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July 3, 2018
Guy Bowker
Chief Financial Officer and Principal Accounting Oficer
Enstar Group Limited
Windsor Place, 3rd Floor
22 Queen Street
Hamilton HM JX
Bermuda
Re: Enstar Group Limited
Form 10-K for the Fiscal Year Ended December 31, 2017
Filed February 28, 2018
File No. 001-33289
Dear Mr. Bowker:
We have limited our review of your filing to the financial statements
and related
disclosures and have the following comments. In some of our comments, we may
ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by providing
the requested
information or advise us as soon as possible when you will respond. If you do
not believe our
comments apply to your facts and circumstances, please tell us why in your
response.
After reviewing your response to these comments, we may have additional
comments.
Form 10-K for the Fiscal Year Ended December 31, 2017
Notes to Consolidated Financial Statements
2. Significant Accounting Policies
(o) Retroactive Reinsurance and Deferred Charges, page 124
1. At the inception of a loss portfolio transfer, you recognize a deferred
charge equal to the
excess of estimated ultimate losses payable over premiums received, which
is
subsequently amortized over the estimated claim payment period. Please
refer us to the
technical guidance upon which you relied in determining this accounting
treatment. Also
tell us how you assess these charges for impairment at each reporting
date including
reference to the appropriate accounting literature.
Guy Bowker
FirstName LastNameGuy Bowker
Enstar Group Limited
Comapany NameEnstar Group Limited
July 3, 2018
July 3, 2018 Page 2
Page 2
FirstName LastName
11. Losses and Loss Adjustment Expenses
Disclosure of Incurred and Paid Loss development, IBNR, Claims Counts and
Payout
Percentages, page 164
2. Please refer to your disclosure in the last paragraph on page 164 and
tell us the
authoritative literature to which you rely to support your exclusion
of the retroactive
reinsurance agreements, for which you have elected the fair value
option, from the
incurred loss triangles.
3. Regarding the disclosure in the third paragraph on page 165:
With respect to the caption "Acquisitions" that "This prospective
treatment was also
adopted for the disclosures included within our Non-Life Run-off
segment with
respect to StarStone's run-off business whose exposures are
included within the
general casualty and professional indemnity/Directors & Officers
lines of business
disclosed within our Non-Life Run-off loss development tables,"
this presentation
appears to cause calendar years prior to StarStone's acquisition to
not be comparable to
those after the acquisition within each accident year.
With respect to the caption "Retroactive reinsurance agreements"
that "For those loss
portfolio transfers that we assume through retroactive reinsurance
agreements for
which we don't have access to historical loss development
information from the
ceding entities or where the data is not sufficiently reliable,
these have been presented
prospectively within the loss development tables disclosed below,
from the date that
the reinsurance agreements became effective," this presentation
appears to
cause calendar years before assuming a retroactive reinsurance
agreement to not be
comparable to those after the assumption date within each accident
year.
Tell us why you believe your presentation described in each of the
above bullets is
appropriate and why you do not provide separate loss development
tables for each of
those acquisitions and reinsurance agreements.
4. Please reconcile for us:
The 2017 unfavorable loss development of $125.6 million implicit in
the ten-year
tables for the Non-Life Run-off segment on pages 171-177 to the
favorable
development of $196.5 million shown in the Non-Life Run-off
three-year roll forward
on page 167.
The 2017 unfavorable loss development of $1.4 million implicit in
the ten-year tables
for the StarStone segment on pages 183-192 to the favorable
development of $26.8
million shown in the StarStone three-year roll forward on page 182.
Provide an explanation and quantification for each significant
reconciling item.
Non-Life Run-off Segment, page 167
5. Please refer to the penultimate paragraph on page 168 and address the
following:
You say herein that the $393.1 million favorable development of IBNR
reserves in
Guy Bowker
Enstar Group Limited
July 3, 2018
Page 3
2017 relates to $70.0 million for asbestos liabilities, $7.5
million for environmental
liabilities, $7.2 million for general casualty liabilities, $156.2
million for workers'
compensation liabilities and $152.2 million for all other
remaining liabilities. Explain
to us the reason for the $70.0 million in favorable development of
asbestos liabilities,
and provide us an analysis, by accident year, explaining the
reasons for favorable
development of the $156.2 million workers' compensation
liabilities and $152.2
million other remaining line. In this regard, your explanation in
the last paragraph on
page 168 that the $393.1 million favorable development was a
result of the
application on a basis consistent with the assumptions applied in
the prior period, of
our actuarial methodologies to revised historical loss development
data, following 59
commutations and policy buy-backs, to estimate loss reserves
required to cover
liabilities for unpaid losses and LAE relating to non-commuted
exposures is vague.
Provide us an analysis, by line of business and accident year,
explaining the reasons
for the $211.8 million of unfavorable development in 2017 which
offset the $393.1
million discussed in the preceding bullet.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
You may contact Frank Wyman at 202-551-3660 or Jim Rosenberg at
202-551-3679 with
any questions.
FirstName LastNameGuy Bowker
Comapany NameEnstar Group Limited
Division of
Corporation Finance
July 3, 2018 Page 3 Office of
Healthcare & Insurance
FirstName LastName