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August 12, 2019
Guy Bowker
Chief Financial Officer
Enstar Group LTD
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, 2018
Filed March 1, 2019
File No. 001-33289
Dear Mr. Bowker:
We have reviewed your July 26, 2019 response to our comment letter and
have the
following comment. In our comment, we may ask you to provide us with
information so we may
better understand your disclosure.
Please respond to the comment 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
comment applies to your facts and circumstances, please tell us why in your
response.
After reviewing your response to the comment, we may have additional
comments. Unless we note otherwise, our references to the prior comment are to
the comment in
our July 12, 2019 letter.
Form 10-K for fiscal year ended December 31, 2018
Notes to Consolidated Financial Statements
10. Losses and Loss Adjustment Expenses
Loss Development Information
Disclosures of Incurred and Paid Loss Development, IBNR, Claims Counts and
Payout
Percentages, page 182
1. We acknowledge the information and additional disclosures provided in
your response to
our prior comment 1. Please address the following:
Refer to the first bullet of our prior comment 1 and your proposed
disclosure thereto
on the top of page 4 of your response indicating that the increase
(reduction) in
estimates of net ultimate losses includes the net impact of
commutations and policy
Guy Bowker
FirstName LastNameGuy Bowker
Enstar Group LTD
Comapany NameEnstar Group LTD
August 12, 2019
Page 2
August 12, 2019 Page 2
FirstName LastName
buybacks on the liability for losses and LAE reserves and
reinsurance recoveries, upon
completion of a commutation or policy buyback. In this regard,
your disclosure
beginning at page 186 of Note 10 and similar disclosure in MD&A
discusses the
causes of prior year development for each of the three years ended
December 31,
2016, 2017 and 2018 for the Non-life Run-off segment. At various
places throughout
those disclosures, you indicate commutations as one of the causes.
With respect to
those disclosures, provide us proposed revised disclosure
quantifying the number of
commutations and buy backs and their dollar impact on prior year
development (i.e.
what you refer to as "discount") for each of the three years.
Refer to the fifth bullet of our prior comment 1 and your proposed
disclosure thereto
on page 9 of your response. Explain to us how determination of
annual percentage
payout of incurred losses for the Non-life Run-off segment based
on the "number of
years since the net loss and LAE reserves were acquired or
assumed" complies with
ASC 944-40-50-4G. In this regard, ASC 944-40-50-4G refers to
"incurred" claims for
purposes of reporting historical average annual percentage payout.
Revise your
proposed disclosure, as necessary.
Similarly with respect to the fifth bullet of our prior comment 1
and to your proposed
disclosure on page 9 of your response that "the annual percentage
payout" for the
Atrium and Star Stone segments is "based on the number of years
that have lapsed
since the initial date of loss of the reported claim," clarify for
us whether this
disclosure means that the payout percentages are based on
"incurred" claims as
opposed to reported claims and, as such, complies with ASC
944-40-50-4G. Revise
your proposed disclosure, as necessary.
Refer to the seventh bullet of our prior comment 1 and your
proposed disclosure
thereto regarding accident years older than 10 years at the top of
page 9 of your
response. You disclose that "due to data limitation issues
impacting our legacy
underwriting and claims systems for certain of our subsidiaries
relating to the 20XX
acquisition year loss development tables within our Non-life
Run-off segment,
changes in IBNR reserves are reflected as an immediate reduction
in the acquired loss
reserves in the year of acquisition." Since development appears to
be reflected "as an
immediate reduction in the acquired loss reserves in the year of
acquisition," the line
item for accident years older than 10 years within each
development table does not
appear to comply with ASC 944-40-50-4B. If you continue to believe
that information
for accident years older than 10 years is informative, we suggest
that, within each table
impacted, you clearly distinguish the line item for accident years
older than 10 years
from the line items of accident years of 10 years or less, and
include a prominent
reference therein to a note to the table. The note should clearly
disclose: how you
present development within the line item for accident years older
than 10 years, the
reason that the presentation in that line item does not comply
with ASC 944-40-50-4B,
and the reason you are presenting the line item. Other
presentations of accident years
older than 10 years could also be acceptable. As such, feel free
to provide us other
presentations for our consideration.
Guy Bowker
Enstar Group LTD
August 12, 2019
Page 3
You may contact Frank Wyman at 202-551-3660 or Jim Rosenberg at
202-551-3679
with any questions.
FirstName LastNameGuy Bowker Sincerely,
Comapany NameEnstar Group LTD
Division of Corporation
Finance
August 12, 2019 Page 3 Office of Healthcare &
Insurance
FirstName LastName