Michael Burry has a note out on Substack that discusses a recent paper describing how the PE industry are unloading their bad private credit loans onto life insurance companies they control. When the loans inevitably fail, the regulations provide that the surviving insurers eat the losses. I thought this was a new low for what is going on with PE. No doubt Berkshire is managing the situation well.

Extract from the report which Burry references:

“Private equity (PE) firms have acquired large life insurers and loaded their balance sheets with private credit assets that are opaque and difficult for regulators to value...when a life insurer becomes insolvent, state-based guaranty funds protect insurance policyholders by "assessing" surviving insurers to cover the shortfall. In most states, such outlays are fully creditable against state premium taxes over time..PE-owned life insurers reflect a structural transformation in which an insurer supports a broader asset-management business that is designed to extract value upfront and impose losses on others. PE firms exploit this regulatory regime by pairing life insurers with private credit to capture value from both sides.”