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August 29, 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 reviewed your August 1, 2018 response to our comment letter 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. Unless we note otherwise, our references to prior comments are to
comments in our
July 3, 2018 letter.
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. We acknowledge the information provided in your response to our prior
comment one.
You assert on page 2 that your recognition of a deferred charge is
"symmetrical" to ceding
company guidance in ASC 944. That guidance requires immediate recognition
of all
losses arising at the inception of a ceded reinsurance agreement. Please
explain this
Guy Bowker
FirstName LastNameGuy Bowker
Enstar Group Limited
Comapany NameEnstar Group Limited
August 29, 2018
August 29, 2018 Page 2
Page 2
FirstName LastName
apparent inconsistency and provide a revised analysis supporting your
accounting
treatment for assumed retroactive reinsurance contracts.
11. Losses and Loss Adjustments Expenses
Disclosure of Incurred and Paid Loss Development, IBNR, Claims Counts and
Payout
Percentages, page 164
2. We acknowledge the information provided in your response to prior
comment three. We
continue to believe, however, that your existing presentation under
ASU 2015-09 is
incomplete and that loss development for the NLRO segment, as
presented therein, has
been distorted by inclusion of the "take-on impact" and related "net
incurred losses and
LAE" beginning only at the acquisition date with no recasting of prior
periods. If recasting
is not practicable, we believe that the 10-year tables should be
revised to remove business
acquisitions and retroactive reinsurance agreements that you have
presented prospectively.
Please provide us revised tables that exclude amounts related to these
acquisitions of
businesses/consummations of retroactive reinsurance agreements.
Provide us additional
tables that include them from the date of acquisition/consummation
showing, separately
for the year of acquisition/consummation, the development from that
date. At a minimum,
an additional table should be provided for each year of
acquisition/consummation and
further disaggregated into separate tables, if it combines lines with
significantly different
characteristics.
3. We acknowledge the reconciliations and supporting information provided
in your
response to our prior comment four. Please address the following:
Your adjustment for the NLRO segment of $245.4 million "to remove
the net incurred
losses and LAE related to the 2017 LPT transactions presented
prospectively and
included within the 2017 calendar year column in the loss
development tables" seems
vague. Confirm that this adjustment removes only the "take-on
impact" and that the
favorable loss development of $196,540 includes loss development
that occurred in
2017 for these LPT transactions. Also, explain how this adjustment
of $245.4 million
relates to total liabilities acquired in 2017 of $4.3 billion, as
presented on page 4 of
your Form 10-K
Your adjustment for the StarStone segment of $19.7 million for the
difference between
use of the "case reserves to IBNR ratio" and "earned premium
ratio" is not clear.
Explain why use of these different methodologies was necessary and
refer us to the
specific technical guidance upon which you relied in using these
methods and
asserting that they represent generally accepted methodologies.
4. We acknowledge the information provided in your response to our prior
comment five.
We continue to believe that your revised explanations supporting loss
development are
vague. Please provide a more detailed analysis for each line of
business and each year
presented that reflects the key factors underlying year-to-year
fluctuations in loss
development. Include separate quantifications of the impacts of actual
loss emergence and
Guy Bowker
Enstar Group Limited
August 29, 2018
Page 3
commutations as indicated in your statement that the "overall net
favorable reserve
development of $181.3 million was primarily attributable to
better-than-expected actual
loss emergence and commutations that were settled at amounts below the
actual carried
loss reserves." In addition, explain how the information provided in
your response,
including the tabular presentation on page 13, will be integrated with
existing disclosure
for the NLRO segment on pages 167-178 of the Form 10-K.
You may contact Frank Wyman at 202-551-3660 or Jim Rosenberg at
202-551-3679 if
you have questions regarding the comments.
FirstName LastNameGuy Bowker Sincerely,
Comapany NameEnstar Group Limited
Division of
Corporation Finance
August 29, 2018 Page 3 Office of
Healthcare & Insurance
FirstName LastName