UPDATE 1-Berkshire reinsurance volume limited by Burlington

* Berkshire to preserve insurance resources

* Follows earlier cutbacks in volume

* Pricing power not strong enough (Adds information on competitors, paragraphs 7-8)

By Lilla Zuill and Jonathan Stempel

NEW YORK, Nov 6 (Reuters) - Warren Buffett's Berkshire Hathaway Inc (BRKa.N) (BRKb.N) said it plans to limit the amount of business underwritten by its reinsurance operations, as it prepares to spend roughly $26 billion to buy railroad operator Burlington Northern Santa Fe Corp (BNI.N).

The disclosure, made in Berkshire's quarterly report released Friday, suggests that Buffett remains cautious about deploying the company's resources to pursue higher volumes in its insurance operations, even if it means lower near-term profitability.

Berkshire had already been paring insurance risk, as the recession and falling stock markets crimped its book value in 2008 and early 2009.

Though net worth has since "significantly" recovered, "management will continue to constrain the volume of business written in light of the pending BNSF acquisition," Berkshire said. "Also, premium rates have not been attractive enough to actually warrant increasing volume thus far in 2009."

Reinsurers provide coverage to other insurers, thereby spreading the risk of loss among several carriers.