What would be "unreasonable"? Berkshire has only had super-duper excessive cash for a couple of years. Berkshire would argue this is a trading strategy, which has been part of the Berkshire business for 60 years.

That itself could be a problem. I gather Berkshire isn't categorized and regulated as an "investment company" under the Company Act of 1940. They don't claim to be a mutual fund or closed end fund, and probably don't want to claim that. I don't know the restrictions those would entail--capital, disclosure, governance, diversification--but they probably aren't nice. Daily Journal worked hard to refute the "investment company" attempt.

Their best defence might be something along the lines of "We are primarily an insurance firm. Our investments started out as float set aside for claims, and have increased from that invested money. Surely the government wants insurers that are wildly overcapitalized rather than those that barely meet the minimum?"

Unfortunately this doesn't fit as a well given the extreme rise in the scale of the investments, and the falling off of supercat risk being written. There is probably a reasonable limit to the "more is better" argument.

Interestingly, merely introducing a token dividend might have pre-empted this in the past--perhaps one reason for the absurdly low token ones at some big firms--but if the accusation were ever made, I think they'd have to have a plan to pay out all the excess capital beyond the demonstrable need of the business.

Jim