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                                                              September 19, 2006

VIA EDGAR

Mr. Jeffrey P. Riedler
Assistant Director
Division of Corporation Finance
100 F. Street N.E.
Mail Stop 6010
Washington, D.C.  20549

Re:      Castlewood Holdings Limited
         Registration Statement on Form S-4
         Filed July 11, 2006
         File No. 333-135699

Dear Mr. Riedler:

         On behalf of Castlewood Holdings Limited, a Bermuda company (the
"Company"), we are today filing with the Securities and Exchange Commission via
EDGAR, Amendment No. 1 to the Company's Registration Statement on Form S-4
("Amendment No. 1"). Amendment No. 1 revises the above-referenced Registration
Statement in response to the comment letter from the Staff of the Commission to
the Company dated August 15, 2006 (the "Comment Letter").

         For your convenience, we have repeated below in bold type the Staff's
comments to which the Company is responding and have set forth the Company's
response immediately below the applicable comment. References to page numbers in
the responses below are to page numbers in the version of Amendment No. 1 that
is marked to indicate the changes made from the filing of the Registration
Statement on July 11, 2006.

         The Company has arranged for copies of Amendment No. 1 and this letter
to be delivered to each member of the Staff referenced in the Comment Letter.


LETTER TO SHAREHOLDERS

1.       PLEASE REFER TO THE THIRD PARAGRAPH OF THE LETTER. IN THE SECOND
         SENTENCE YOU STATE THAT THE ENSTAR BOARD POSTPONED THE ANNUAL MEETING
         SCHEDULED FOR JUNE 2, 2006 BECAUSE THE MEMBERS DETERMINED THAT THE
         PROXY STATEMENT "REQUIRED AMENDMENT TO DESCRIBE CERTAIN TERMS AND
         IMPLICATIONS OF THE CONTEMPLATED MERGER TRANSACTION." WE NOTE THAT THE
         PROXY STATEMENT RELATED ONLY TO THE ELECTION OF DIRECTORS AND THE
         RATIFICATION OF YOUR AUDITING FIRM. IT DID NOT INVOLVE THE MERGER
         TRANSACTION. PLEASE REVISE THE LETTER TO CORRECTLY DESCRIBE THE
         PROPOSALS CONTAINED IN THE PREVIOUS PROXY STATEMENT.

         Enstar has revised the letter to its shareholders to address the
         Staff's comments.

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COMMENTS APPLICABLE TO THE ENTIRE DOCUMENT

2.       IT IS UNCLEAR WHETHER YOU INTEND TO USE THIS PROSPECTUS FOR THE
         REOFFERING TO THE PUBLIC OF SECURITIES BY PERSONS RECEIVING STOCK IN
         THE MERGER. PLEASE REFER TO GENERAL RULE A.1 TO THE FORM S-4 AND
         ADVISE. IF SO, PLEASE PROVIDE THE INFORMATION SPECIFIED IN ITEM 7 OF
         THE FORM S-4.

         The prospectus that makes up part of the Form S-4 Registration
         Statement (the "Registration Statement") will not cover the reoffering
         to the public of securities by persons receiving stock in the merger.
         It covers only the issuance of shares in the merger.

QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE ANNUAL MEETING -- PAGE Q-1

3.       IF YOU RETAIN THIS SECTION, THE Q AND A'S SHOULD BE LIMITED TO
         PROCEDURAL MATTERS AND SHOULD NOT INCLUDE ANY MATTERS RELATED TO THE
         SUBSTANCE OF THE TRANSACTION. IN ADDITION, IT SHOULD NOT INCLUDE
         INFORMATION THAT IS PRESENTED ELSEWHERE IN THE FOREFRONT OF THE
         DOCUMENT. CURRENTLY, MOST OF THE Q AND A'S INVOLVE SUBSTANTIVE MATTERS
         AND/OR REPEAT INFORMATION ALSO PROVIDED ON THE COVER PAGE, IN THE
         NOTICES OF THE MEETINGS AND IN THE SUMMARY. WE THINK THAT IN MOST
         CASES, THE REPETITIVE INFORMATION IS MORE APPROPRIATELY DISCLOSED IN
         THE SUMMARY. PLEASE REVISE THE ENTIRE SECTION ACCORDINGLY.

         The Company has revised the Q and A's to address the Staff's comment.

SUMMARY -- PAGE 1

4.       PLEASE DELETE THE GLOSSARY YOU HAVE INCLUDED AT THE FOREFRONT OF THE
         SUMMARY. INSTEAD, PLEASE EXPLAIN WHAT THESE TERMS MEAN AT THE FIRST
         PLACE THEY ARE USED IN YOUR DOCUMENT. WE THINK THAT IN MOST CASES THE
         MEANINGS OF THESE TERMS ARE OBVIOUS WHEN USED IN CONTEXT, AND VERY
         LITTLE EXPLANATION WILL BE REQUIRED FOR THEIR MEANINGS TO BE CLEAR.

         In light of the Staff's comment, the Company has deleted the glossary
         and added defined terms where appropriate.

5.       IN THE NEXT TO LAST PARAGRAPH ON PAGE 2, PLEASE EXPLAIN WHAT THE TERM
         "EQUITY AFFILIATES" MEANS. ALSO, PROVIDE A MORE ROBUST DESCRIPTION OF
         WHAT ENSTAR'S BUSINESS CURRENTLY CONSISTS OF. IT DOES NOT APPEAR THAT
         ENSTAR HAS ANY OPERATIONS OUTSIDE OF ITS INVESTMENTS IN CASTLEWOOD AND
         B.H. ACQUISITION, SO WE DON'T UNDERSTAND WHY YOU HAVEN'T SIMPLY SAID
         THAT YOUR BUSINESS CONSISTS OF YOUR INVESTMENTS IN THE ENTITIES. IF YOU
         HAVE OTHER INVESTMENTS, YOU SHOULD SAY SO AND BRIEFLY DESCRIBE THEM.

         Enstar has deleted the reference to equity-owned affiliates and
         expanded the description of Enstar's business on page 1. Since Enstar's
         other affiliates are described in its annual report on Form 10-K/A,
         incorporated in the registration statement by reference, and are not
         material, they have not been described further in Amendment No. 1.

                                      -2-

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         YOU ALSO NEED TO CLEARLY INDICATE THAT CASTLEWOOD AND ENSTAR ARE
         RELATED PARTIES, DESCRIBE THE EXTENT OF THEIR COMMON OWNERSHIP AND THE
         NATURE AND EXTENT OF THEIR CURRENT BUSINESS ACTIVITIES. DISCLOSE
         WHETHER THE BUSINESS AND ASSETS OF NEW ENSTAR WILL BE THE SAME AS THOSE
         OF ENSTAR. IF NOT, EXPLAIN HOW THEY WILL DIFFER.

         The Company has added additional disclosure on page 1 to address the
         Staff's comment.

6.       CLEARLY INDICATE THAT CASTLEWOOD AND ENSTAR ARE RELATED PARTIES AND
         THAT THE NEGOTIATIONS WERE NOT ARM'S-LENGTH.

         The Company and Enstar believe that, despite the fact that they are
         related parties, the negotiations were at arm's-length (please see
         response to Comment 30). In addition, the transaction was approved
         unanimously by Enstar's board of directors, including all of its
         independent directors.

         However, in light of the Staff's comment, the Company has provided
         additional disclosure on page 4.

         ALSO DISCLOSE THAT ENSTAR'S BOARD DID NOT FORM AN INDEPENDENT COMMITTEE
         OR RETAIN A FINANCIAL ADVISOR TO EVALUATE THE FAIRNESS OR ADEQUACY OF
         THE MERGER TERMS OR CONSIDERATION.

         Enstar has added additional disclosure on pages 42 and 43 to address
         the Staff's comment.

7.       PLEASE DISCLOSE IN THE SUMMARY AND AT OTHER RELEVANT PLACES IN THE
         REGISTRATION STATEMENT WHAT PERCENTAGE OF NEW ENSTAR'S OUTSTANDING
         SHARES WILL BE OWNED BY MANAGEMENT AND THEIR AFFILIATES SUBSEQUENT TO
         THE MERGER.

         The Company has added additional disclosure on pages 5 and 41 to
         address the Staff's comment.

8.       PLEASE DISCLOSE HOW MANY SHAREHOLDERS ENSTAR HAS PRIOR TO THE MERGER,
         AND HOW MANY CASTLEWOOD HAS.

         The Company has provided this information on page 1.

9.       WE NOTE THAT THIS TRANSACTION WILL REDUCE THE CURRENT NON-AFFILIATED
         PUBLIC SHAREHOLDERS' INTEREST IN ENSTAR FROM 68% TO 32%. PLEASE
         CONSIDER WHETHER THIS IS INFORMATION THAT SHOULD BE INCLUDED IN THE
         SUMMARY AND WHETHER THIS DIMINUTION OF OWNERSHIP INTERESTS SHOULD ALSO
         BE ADDRESSED IN A RISK FACTOR. IF YOU DO NOT BELIEVE THAT THIS
         INFORMATION SHOULD BE INCLUDED IN THE SUMMARY AND A RISK FACTOR,
         PROVIDE ADDITIONAL DISCLOSURE EXPLAINING HOW THE BOARD JUSTIFIES THIS
         REDUCTION IN OWNERSHIP INTEREST. THE REVISED DISCLOSURE SHOULD DESCRIBE
         THE ASSETS OR FINANCIAL RESOURCES THE PUBLIC SHAREHOLDERS WILL OBTAIN
         IN RETURN FOR THIS DIMINUTION OF THEIR INTERESTS.

                                      -3-

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         The Company has added additional disclosure on page 5 to address the
         Staff's comment.

         In addition, the Company has added an additional Risk Factor on page
         18.

10.      WE NOTE THAT A LARGE PROPORTION OF THE BUSINESS DONE BY CASTLEWOOD
         CURRENTLY INVOLVES TRANSACTIONS WITH COMPANIES AND PARTNERSHIPS MANAGED
         OR CONTROLLED BY MR. FLOWERS, WHO WILL BE A MEMBER OF THE BOARD OF
         DIRECTORS OF NEW ENSTAR AFTER THE MERGER. PLEASE DISCLOSE THE STEPS
         THAT WILL BE TAKEN BY NEW ENSTAR TO ADDRESS THE CONFLICT OF INTEREST
         ISSUES INVOLVED IN THESE TRANSACTIONS, AS WELL AS THE OTHERS DISCLOSED
         BEGINNING ON PAGE 150 OF THE PROSPECTUS. WE MAY HAVE FURTHER COMMENT
         AFTER REVIEWING YOUR RESPONSE.

         Transactions with affiliates of Mr. Flowers do not represent a large
         proportion of the business conducted by the Company. The Company's
         principal business involves the acquisition and management of insurance
         and reinsurance companies in run-off. To date, the Company has executed
         only two transactions within this core business through a
         majority-owned subsidiary, Hillcot Holdings Ltd. ("Hillcot"), in which
         Mr. Flowers has an indirect interest. (The Company owns a 50.1%
         economic interest and a 50% voting interest in Hillcot and the Company
         has consolidated Hillcot in its financial statements. Shinsei Bank, of
         which Mr. Flowers is the largest stockholder and a director, holds a
         49.9% economic interest in Hillcot.) These transactions are disclosed
         on pages 77, 78 and 150. Other transactions with Mr. Flowers (all of
         which have been disclosed) have been investments by the Company into
         entities controlled by Mr. Flowers with the Company receiving terms no
         less favorable than would be available in the absence of a conflict.
         Such investments represented less than 2.4% of the Company's invested
         assets as of June 30, 2006.

         The Company's board of directors includes representatives of its
         stockholders other than Enstar, including two directors appointed by
         Trident II, L.P. (Trident II, L.P. and its affiliates own an
         approximate 32.03% economic interest in the Company) and two directors
         appointed by members of the Company's management who own an approximate
         32.03% economic interest in the Company. Each of these directors
         represented interests other than that of Mr. Flowers with respect to
         considering and approving these transactions. The involvement of these
         directors has helped to assure that transactions involving Mr. Flowers
         were negotiated on an arm's-length basis with terms no less favorable
         to the Company than could have been obtained in the absence of a
         conflict.

         Following the merger, New Enstar's board of directors will consist of
         10 members, including four independent directors (as defined in the
         Nasdaq Marketplace Rules).


                                      -4-

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INTERESTS OF CERTAIN PERSONS IN THE MERGER -- PAGE 11

11.      IT IS UNCLEAR WHETHER ANY MEMBERS OF THE CASTLEWOOD AND ENSTAR
         MANAGEMENTS HAVE PROVISIONS IN THEIR EMPLOYMENT AGREEMENTS THAT COULD
         BE TRIGGERED AS A RESULT OF THE MERGER TRANSACTIONS. PLEASE ADVISE OR
         REVISE AS APPROPRIATE.

         As described on page 54 of the Registration Statement and page 52 of
         Amendment No. 1, 80,000 options granted to Enstar directors and
         officers will vest upon the consummation of the merger and Mr. Frazer
         will be entitled to receive severance benefits upon the expected
         termination of his employment with Enstar immediately following the
         merger. There are no other provisions in agreements with Enstar
         management that will be triggered as a result of the merger.

         There are no agreements with Castlewood management that will be
         triggered as a result of the merger. The merger will not constitute a
         "change of control" as such term is or will be defined under the
         employment agreements of Messrs. Silvester, Packer, O'Shea and Oros.

PER SHARE MARKET PRICE INFORMATION -- PAGE 17

12.      PLEASE REFER TO THE LAST PARAGRAPH ON PAGE 17. IT IS INAPPROPRIATE TO
         STATE THAT NEW ENSTAR'S ORDINARY SHARES ARE "ANTICIPATED TO BE APPROVED
         FOR LISTING" ON NASDAQ. WE WILL NOT OBJECT IF YOU STATE, INSTEAD, THAT
         YOU HAVE APPLIED TO HAVE NEW ENSTAR'S SHARES LISTED FOR TRADING ON
         NASDAQ.

         The Company has revised the disclosure on page 16 to address the
         Staff's comment.

RISK FACTORS -- PAGE 19

13.      A NUMBER OF YOUR RISK FACTORS, IN BOTH THE REGISTRATION STATEMENT AND
         THE ENSTAR FORM 10-K INCORPORATED BY REFERENCE, ARE TOO VAGUE AND
         GENERIC TO BE MEANINGFUL TO AN INVESTOR. PLEASE REVISE THE ENTIRE RISK
         FACTOR SECTION OF EACH DOCUMENT TO ENSURE THAT EACH RISK FACTOR
         INCLUDES AN ADEQUATE FACTUAL CONTEXT FOR EVALUATING THE RISK. THE FACTS
         YOU INCLUDE SHOULD ADDRESS THE SPECIFIC IMPACTS THE RISKS WOULD HAVE ON
         YOUR BUSINESS AND YOUR OPERATIONS, AS OPPOSED TO COMPANIES IN GENERAL.
         YOU SHOULD ALSO QUANTIFY THE INFORMATION TO THE EXTENT PRACTICABLE. THE
         FOLLOWING ARE SOME EXAMPLES, BUT NOT AN EXHAUSTIVE LIST, OF RISK
         FACTORS THAT NEED REVISION:

         o        "OUR INABILITY TO SUCCESSFULLY MANAGE OUR PORTFOLIO OF
                  INSURANCE AND REINSURANCE COMPANIES IN RUN-OFF MAY ADVERSELY
                  IMPACT OUR ABILITY TO GROW OUR BUSINESS AND MAY RESULT IN
                  LOSSES." -- PAGE 21

         o        "OUR INSURANCE AND REINSURANCE SUBSIDIARIES' REINSURERS MAY
                  NOT SATISFY THEIR OBLIGATIONS TO OUR INSURANCE AND REINSURANCE
                  SUBSIDIARIES." -- PAGE 22

                                      -5-

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         o        THE EFFECTS OF EMERGING CLAIM AND COVERAGE ISSUES ON OUR
                  BUSINESS ARE UNCERTAIN." -- PAGE 23

         o        "INSURANCE LAWS AND REGULATIONS RESTRICT OUR ABILITY TO
                  OPERATE, AND ANY FAILURE TO COMPLY WITH THESE LAWS AND
                  REGULATIONS MAY HAVE A MATERIAL ADVERSE EFFECT ON OUR
                  BUSINESS." -- PAGE 23

         o        "CONFLICTS OF INTEREST MIGHT PREVENT US FROM PURSUING
                  DESIRABLE INVESTMENT AND BUSINESS OPPORTUNITIES." -- PAGE 25

         The Company has revised the Risk Factors section to address the Staff's
         comment.

         Enstar has revised its Risk Factors to address the Staff's comments.
         Please see Enstar's revised Risk Factors as filed in its Form 10-K/A
         dated September 20, 2006.

14.      PLEASE INCLUDE APPROPRIATE RISK FACTOR DISCLOSURE REGARDING THE
         CONFLICTS OF INTEREST INHERENT IN THE BUSINESS CURRENTLY CONDUCTED BY
         CASTLEWOOD, AND DESCRIBE ANY STEPS THAT WILL BE TAKEN BY NEW ENSTAR TO
         ENSURE THAT FUTURE TRANSACTIONS ENTERED INTO BY NEW ENSTAR ARE AT LEAST
         AS FAVORABLE AS COULD BE OBTAINED FROM UNAFFILIATED PARTIES.

         The Company has revised the Risk Factor regarding conflicts of interest
         on page 25 to address the Staff's comment.

15.      WE NOTE THAT MR. OROS WILL BE BOTH NEW ENSTAR'S EXECUTIVE CHAIRMAN AND
         A MEMBER OF ITS BOARD, AS WELL AS THE MANAGING DIRECTOR OF J.C. FLOWERS
         & CO. LLC WHICH WILL MANAGE THE FLOWERS FUND. PLEASE INCLUDE
         APPROPRIATE RISK FACTOR DISCLOSURE REGARDING THE AMOUNT OF MR. OROS'
         TIME THAT WILL BE SPENT ON COMPANY BUSINESS AND THE CONFLICTS OF
         INTEREST INHERENT IN HIS DUAL ROLES.

         The Company has revised its Risk Factors on page 26 to address the
         Staff's comment.

16.      PLEASE PROVIDE APPROPRIATE RISK FACTOR DISCLOSURE REGARDING THE RISKS
         INHERENT IN MR. FLOWERS' CURRENT OWNERSHIP INTERESTS IN ENSTAR,
         CASTLEWOOD AND ITS AFFILIATES AND NEW ENSTAR. WE NOTE THAT MOST OF THE
         TRANSACTIONS THAT CASTLEWOOD HAS ENTERED INTO INVOLVE ENTITIES THAT MR.
         FLOWERS MANAGED OR CONTROLLED. THE RISK FACTOR SHOULD ADDRESS THE
         SPECIFIC ADVERSE EFFECTS THE SHAREHOLDERS ARE AT RISK OF SUFFERING AS A
         RESULT OF MR. FLOWERS' COMMON OWNERSHIP OF THESE ENTITIES, THE ROLE MR.
         FLOWERS WILL PLAY IN NEW ENSTAR, AND WHETHER NEW ENSTAR WILL CONTINUE
         TO ENGAGE IN TRANSACTIONS WITH OTHER ENTITIES OWNED OR CONTROLLED BY
         MR. FLOWERS.

         The Company has revised its Risk Factors on page 26 to address the
         Staff's comment.

IF WE ARE UNABLE TO IMPLEMENT OUR BUSINESS STRATEGIES, OUR BUSINESS AND
FINANCIAL CONDITION MAY BE ADVERSELY AFFECTED -- PAGE 21



                                      -6-

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17.      YOU SAY THAT YOU MAY BE UNABLE TO IMPLEMENT YOUR STRATEGIES FULLY OR
         REALIZE THE ANTICIPATED RESULTS OF YOUR STRATEGIES AS A RESULT OF
         "SIGNIFICANT BUSINESS, ECONOMIC AND COMPETITIVE UNCERTAINTIES AND
         CONTINGENCIES." PLEASE EXPAND THE RISK FACTOR TO BRIEFLY IDENTIFY THE
         ANTICIPATED RESULTS AND THE UNCERTAINTIES AND CONTINGENCIES YOU REFER
         TO.

         The Company has revised the Risk Factor on page 20 to address the
         Staff's comment.

IF OUR INSURANCE AND REINSURANCE SUBSIDIARIES' LOSS RESERVES ARE INADEQUATE TO
COVER THEIR ACTUAL LOSSES, OUR INSURANCE AND REINSURANCE SUBSIDIARIES' NET
INCOME AND CAPITAL AND SURPLUS WOULD BE REDUCED -- PAGE 21

18.      PLEASE QUANTIFY YOUR EXPERIENCE TO DATE IN REGARD TO MAINTAINING
         ADEQUATE RESERVES TO COVER YOUR LIABILITIES TO DATE IN THE RUNOFF
         BUSINESSES.

         The Company has revised the Risk Factor on page 21 to address the
         Staff's comment.

19.      IN THE LAST PARAGRAPH OF THIS RISK FACTOR YOU REFER TO THE DIFFICULTY
         IN ESTIMATING YOUR SUBSIDIARIES' RESERVES FOR POTENTIAL ASBESTOS AND
         ENVIRONMENTAL LIABILITIES. PLEASE PROVIDE MORE DETAIL REGARDING YOUR
         OBLIGATIONS FOR THE LIABILITIES. FOR EXAMPLE, DISCLOSE WHAT PROPORTION
         OF YOUR BUSINESS INVOLVES SUCH CLAIMS, WHAT YOUR EXPERIENCE HAS BEEN TO
         DATE, AND OTHER INFORMATION THAT WILL ENABLE AN INVESTOR TO UNDERSTAND
         THE FULL EXTENT OF THIS RISK. IN THIS REGARD WE HAVE NOTED THE
         DISCLOSURE ON PAGE 77 INDICATING THAT CASTLEWOOD'S LOSS RESERVES ARE
         "LARGELY RELATED" TO ASBESTOS AND ENVIRONMENTAL EXPOSURES. THE
         DISCLOSURE SHOULD BE QUANTIFIED TO THE EXTENT PRACTICABLE.

         The Company has revised the Risk Factor on page 21 and revised its
         disclosure on page 110 to address the Staff's comment.

FUTURE ACQUISITIONS MAY EXPOSE US TO OPERATIONAL RISKS -- PAGE 24

20.      PLEASE REVISE THE SUBHEADING TO IDENTIFY A SPECIFIC RISK AND ITS
         POTENTIAL ADVERSE CONSEQUENCES.

         The Company has revised the Risk Factor on page 24 to address the
         Staff's comment.

CERTAIN EXIT AND FINALITY STRATEGIES MAY NOT CONTINUE TO BE AVAILABLE -- PAGE 24

21.      CURRENTLY, NEITHER THE SUBHEADING NOR BODY OF THIS RISK FACTOR CLEARLY
         IDENTIFY A SPECIFIC RISK OR ITS CONSEQUENCES. YOU NEED TO EXPLAIN WHAT
         A "SOLVENT SCHEME OF ARRANGEMENT" IS AND HOW YOU USE SUCH A SCHEME IN
         YOUR BUSINESS. ALSO EXPLAIN WHAT ARRANGEMENTS HAVE NOT RECEIVED THE
         REQUIRED CREDITOR OR COURT APPROVALS AND WHAT THE ADVERSE
         CONSEQUENCE(S) OF THIS HAVE BEEN. ALSO, EXPLAIN WHAT YOUR ALTERNATIVES
         ARE WHEN SUCH A FAILURE TO APPROVE OCCURS. FINALLY, QUANTIFY THE
         DISCLOSURE TO THE EXTENT PRACTICABLE. WE MAY HAVE ADDITIONAL COMMENTS.

                                      -7-

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         The Company has revised the Risk Factor on page 24 to address the
         Staff's comment.

THE MARKET VALUE OF OUR ORDINARY SHARES MAY DECLINE IF LARGE NUMBERS OF SHARES
ARE SOLD FOLLOWING THE MERGER -- PAGE 26

22.      YOU SAY THAT ENSTAR'S COMMON STOCK HAS BEEN THINLY TRADED IN THE PAST.
         PLEASE QUANTIFY THE DISCLOSURE, AND EXPLAIN WHY, TO THE EXTENT YOU
         KNOW, THAT THIS HAS BEEN THE CASE, AND WHETHER THERE IS ANY REASON TO
         BELIEVE THAT THE SITUATION WILL BE THE SAME OR DIFFERENT IN THE FUTURE.

         The Company has revised the Risk Factor on page 26 to address the
         Staff's comment.

OUR STOCK PRICE MAY EXPERIENCE VOLATILITY, THEREBY CAUSING A POTENTIAL LOSS OF
VALUE TO OUR INVESTORS -- PAGE 26

23.      PLEASE QUANTIFY ENSTAR'S EXPERIENCE WITH STOCK PRICE VOLATILITY IN THE
         PAST AND DISCUSS WHETHER THE MERGER WILL AFFECT THE FACTORS THAT HAVE
         AFFECTED YOUR STOCK PRICE IN THE PAST.

         The Company has revised the Risk Factor on page 27 to address the
         Staff's comment.

HOLDERS OF OUR ORDINARY SHARES MAY FACE DIFFICULTIES PROTECTING THEIR INTERESTS
BECAUSE WE ARE INCORPORATED UNDER BERMUDA LAW -- PAGE 28

24.      AT THE PRESENT TIME THIS RISK FACTOR DOES NOT DESCRIBE A SPECIFIC RISK
         OR ITS POTENTIAL ADVERSE CONSEQUENCES. PLEASE REVISE BOTH THE BODY AND
         SUBHEADING TO SPECIFICALLY IDENTIFY THE SUBSTANCE OF THE BERMUDA LAWS
         YOU ARE REFERRING TO, AND WHAT THEIR POTENTIAL ADVERSE CONSEQUENCES ARE
         FOR U.S. INVESTORS. FOR EXAMPLE, YOU NEED TO CLEARLY INDICATE, IF TRUE,
         THAT BERMUDA LAW WILL NOT ALLOW YOUR SHAREHOLDERS TO SUE YOU IN BERMUDA
         COURTS AND DISCUSS THE RAMIFICATION FOR U.S. INVESTORS THAT MIGHT SEEK
         REDRESS FOR VARIOUS MATTERS RELATED TO THEIR OWNERSHIP OF YOUR STOCK.

         The Company has revised both the subheading and risk factor on page 29
         to address the Staff's comment.

OUR BOARD OF DIRECTORS MAY DECLINE TO REGISTER A TRANSFER OF OUR ORDINARY SHARES
UNDER CERTAIN CIRCUMSTANCES -- PAGE 29

25.      PLEASE EXPAND THE RISK FACTOR TO MORE SPECIFICALLY IDENTIFY THE
         CONSEQUENCES THAT MIGHT RESULT FROM THESE ACTIONS, AND THE
         CIRCUMSTANCES IN WHICH THE BOARD MIGHT REFUSE TO REGISTER THE
         TRANSFERS. PLEASE ALSO CLEARLY DISCLOSE HOW YOUR RESTRICTIONS DIFFER
         FROM THOSE THAT ARE KNOWN TO BE ENFORCEABLE UNDER BERMUDA LAW. WE MAY
         HAVE FURTHER COMMENT AFTER REVIEWING YOUR RESPONSE.

                                      -8-

<PAGE>

         The Company believes that it has adequately addressed the risks and
         consequences associated with its board's decision to decline a transfer
         of its ordinary shares. The risk factor describes the circumstances in
         which the board may determine to decline a transfer and what options
         the board may pursue in the event that it should decline such a
         transfer and the effects that such an event would have on the
         shareholder.

WE CANNOT PREDICT OUR FUTURE TAX LIABILITIES -- PAGE 29

26.      PLEASE REVISE THE SUBHEADING TO IDENTIFY A SPECIFIC RISK AND ITS
         POTENTIAL ADVERSE CONSEQUENCES.

         The Company has amended the subheading on page 30 to address the
         Staff's comment.

27.      YOU HAVE NOT PROVIDED AN ADEQUATE FACTUAL CONTEXT FOR THIS RISK, OR
         EVEN CLEARLY DELINEATED WHAT THE RISK IS. PLEASE IDENTIFY THE SUBSTANCE
         OF THE SPECIFIC REQUIREMENTS YOU ARE REFERRING TO AND EXPLAIN HOW YOU
         COULD BE ADVERSELY AFFECTED. YOUR DISCLOSURE CURRENTLY DOES NOT
         DISCLOSE THE MATERIAL TERMS OF THE TAX TREATY YOU REFER TO OR QUANTIFY
         THE IMPACT OF THE TREATY. PLEASE REVISE THE DISCLOSURE ACCORDINGLY.

         The Company has amended the Risk Factor on page 30 to address the
         Staff's comment.

U.S. PERSONS WHO OWN OUR ORDINARY SHARES MIGHT BECOME SUBJECT TO ADVERSE U.S.
TAX CONSEQUENCES AS A RESULT OF "RELATED PARTY INSURANCE INCOME . . ." -- PAGE
30

U.S. PERSONS WHO OWN OUR ORDINARY SHARES WOULD BE SUBJECT TO ADVERSE TAX
CONSEQUENCES IF WE OR ONE OR MORE OF OUR NON-U.S. SUBSIDIARIES WERE CONSIDERED A
"PASSIVE FOREIGN INVESTMENT COMPANY..." -- PAGE 30

28.      PLEASE PROVIDE A MORE ADEQUATE FACTUAL CONTEXT FOR EVALUATING THE
         RISKS. YOUR CURRENT DISCLOSURE DOES NOT INCLUDE A FACTUAL CONTEXT, AND
         THE DISCLOSURE ITSELF IS TOO VAGUE AND GENERIC TO BE MEANINGFUL.

         RPII and PFIC tax risks are complex and quite technical. As a result,
         they are not easily described in the plain english format of the Risk
         Factors. The Company has elected not to materially modify the risk
         factors themselves, but to notify potential shareholders that such
         risks exist and Amendment No. 1 provides a cross reference to more
         thorough disclosure of RPII and PFIC elsewhere in the proxy
         statement/prospectus. The Company believes the level of detail provided
         in these disclosures is comparable to that generally provided in
         similar disclosures in prospectuses of other Bermuda insurance
         companies.

THE PROPOSED MERGER - PAGE 41

29.      PLEASE DISCLOSE AND DISCUSS THE BUSINESS PURPOSE FOR THE MERGER
         TRANSACTION.

         The business purpose for the merger is described on pages 44 and 46.

                                      -9-

<PAGE>

30.      PLEASE DISCUSS THE STEPS THAT ENSTAR TOOK TO PROTECT THE INTERESTS OF
         THE UNAFFILIATED SHAREHOLDERS WHEN THIS TRANSACTION WAS NEGOTIATED. IT
         DOES NOT APPEAR THAT THERE WAS AN INDEPENDENT COMMITTEE ESTABLISHED TO
         DETERMINE THE FAIRNESS OF THE MERGER CONSIDERATION TO NON-AFFILIATED
         SHAREHOLDERS. YOUR REVISED DISCLOSURE SHOULD EXPLAIN WHY MANAGEMENT DID
         NOT BELIEVE THAT SUCH AN INDEPENDENT COMMITTEE WAS WARRANTED,
         PARTICULARLY IN LIGHT OF THE EXISTING RELATIONSHIPS BETWEEN THE
         COMPANIES AND MEMBERS OF MANAGEMENT, AND WHY THE BOARDS OF BOTH
         COMPANIES BELIEVE THAT MERGER AND ITS CONSIDERATION ARE FAIR TO THE
         UNAFFILIATED SHAREHOLDERS.

         Since the transaction was negotiated on an arm's-length basis by
         representatives of Enstar whose principal interests were aligned with
         the interests of the non-affiliated Enstar shareholders, Enstar did not
         believe that the non-affiliated shareholders' interests needed
         additional protection.

         Descriptions of the additional steps that were nevertheless taken to
         protect those interests and of the board's consideration of the
         advisability of establishing an independent committee has been added on
         page 42.

         The disclosure on pages 42 through 46 has been expanded to explain
         further why the Enstar board believes the merger and its consideration
         are fair to the unaffiliated shareholders.

31.      PLEASE EXPAND THE DISCUSSION TO EXPLAIN HOW THE MERGER CONSIDERATION
         WAS DETERMINED AND WHAT IT IS BASED ON. CURRENTLY, NO EXPLANATION IS
         GIVEN AS TO HOW THESE TERMS WERE REACHED, OR ON WHAT BASIS THE ENSTAR
         BOARD HAS DETERMINED THAT THE CONSIDERATION IS FAIR AND IN THE BEST
         INTERESTS OF ENSTAR AND ITS SHAREHOLDERS AS STATED IN THE LAST
         PARAGRAPH ON PAGE 43.

         Additional disclosure responsive to the Staff's comments has been
         provided on pages 42 through 46.

32.      YOU STATE THAT THE ENSTAR DIRECTORS VOTED UNANIMOUSLY TO APPROVE THE
         TRANSACTION. PLEASE CLARIFY WHETHER ALL OF THE DIRECTORS WERE PRESENT
         AND VOTED.

         All of Enstar's directors were present and voted. The Company and
         Enstar revised the disclosure on the cover to the proxy statement, in
         the letter to Enstar shareholders and on page 44 to address the Staff's
         comment.

ENSTAR'S REASONS FOR THE MERGER -- PAGE 43

33.      PLEASE EXPAND THE DISCLOSURE IN THIS SECTION TO EXPLAIN HOW EACH
         IDENTIFIED FACTOR CONTRIBUTED TO THE BOARD'S CONCLUSION THAT THE
         TRANSACTION WAS "ADVISABLE AND FAIR TO AND IN THE BEST INTERESTS OF
         ENSTAR AND ITS SHAREHOLDERS." WE NOTE, AMONG OTHER THINGS, THAT THE
         LAST BULLET IN YOUR LIST OF FACTORS CONSIDERED IS "THE OTHER RISKS
         DESCRIBED IN "RISK FACTORS" BEGINNING ON PAGE 19." YOU NEED TO PROVIDE
         A


                                      -10-

<PAGE>

         REASONABLY DETAILED EXPLANATION OF HOW EACH OF THE BULLETED FACTORS,
         INCLUDING EACH OF THE RISK FACTORS YOU CITED IN THE RISK FACTOR SECTION
         OF THE DOCUMENT, CONTRIBUTED TO THE CONCLUSION THAT THE TRANSACTION WAS
         ADVISABLE AND FAIR TO AND IN THE BEST INTERESTS OF ENSTAR AND ITS
         SHAREHOLDERS."

         Enstar has revised the disclosure on pages 44 through 46 to address the
         Staff's comment. Please note that Enstar does not believe it is
         feasible to explain how each identified factor contributed to the
         board's conclusion that the transaction was advisable and fair.
         Enstar's board did not assign any special or relative weight to any
         factor, and each director may have weighted different factors
         differently.

34.      YOU INDICATE THAT SOME OF ENSTAR'S DIRECTORS AND EXECUTIVE OFFICERS
         HAVE INTERESTS IN THE PROPOSED TRANSACTIONS THAT ARE DIFFERENT FROM, OR
         IN ADDITION TO, THOSE OF THE UNAFFILIATED SHAREHOLDERS. PLEASE REVISE
         THE DISCLOSURE TO IDENTIFY THE SPECIFIC INTERESTS OF EACH DIRECTOR AND
         OFFICER. EXPAND THE DISCUSSION TO DISCLOSE THE SPECIFIC CONSIDERATION
         THE BOARD GAVE TO THE INTERESTS IN REACHING ITS CONCLUSIONS TO APPROVE
         THE TRANSACTIONS. IF THE BOARD DID NOT CONSIDER THESE INTERESTS IN
         REACHING ITS CONCLUSION, SAY SO AND EXPLAIN WHY NOT. ALSO, IT APPEARS
         THAT PERSONS WHO HAD THESE INTERESTS BOTH NEGOTIATED THE TERMS OF THE
         PROPOSALS AND VOTED IN FAVOR OF THE PROPOSALS. DISCLOSE WHETHER THE
         INTERESTED INDIVIDUALS VOTED ON THE MATTERS THEY WERE INTERESTED IN. IF
         SO, PLEASE INCLUDE DISCLOSURE EXPLAINING WHY THESE PERSONS DETERMINED
         THAT IT WAS NOT NECESSARY OR APPROPRIATE FOR THEM TO ABSTAIN FROM
         VOTING ON THE TERMS OF THE MERGER PROPOSAL. IN THIS REGARD, WE NOTE
         THAT DISCLOSURE IN THE LAST PARAGRAPH OF PAGE 43 INDICATES THAT THE
         ENSTAR BOARD "CONSIDERED" THE INTERESTS BUT DOES NOT EXPLAIN WHAT THAT
         CONSIDERATION CONSISTED OF.

         The interests of the Enstar directors and executive officers in the
         transaction that may differ from those of unaffiliated shareholders
         have been identified on pages 52 and 53.

         Disclosure has been added with respect to the determination that the
         persons holding such interests should participate in the consideration
         of the merger on pages 4, 11, 44 and 46.

         As disclosed on such pages, Enstar's board considered such interests in
         making its recommendation.

         Enstar does not believe that it is possible to describe with any
         greater specificity the consideration that the board gave to those
         interests. There was no explicit weighting of such interests, and each
         director may have weighted such interests differently.

35.      WE NOTE THAT AS PART OF THE RECAPITALIZATION AGREEMENT, ENSTAR MADE A
         PAYMENT OF $5,076,004 TO CASTLEWOOD, WHO IN TURN, PAID THIS SUM TO
         "CERTAIN" OF ITS EXECUTIVE OFFICERS AND EMPLOYEES. PLEASE IDENTIFY THE
         INDIVIDUALS WHO RECEIVED THESE PAYMENTS AND DISCUSS THE CONSIDERATION
         GIVEN TO THESE PAYMENTS IN YOUR NEGOTIATION OF THE TERMS OF THE MERGER.
         THE REVISED DISCLOSURE SHOULD EXPLAIN WHAT BENEFIT OR VALUE WAS
         RECEIVED BY ENSTAR, IF ANY, IN EXCHANGE, AND WHAT THE BOARD'S REASONS
         FOR APPROVING THIS TRANSACTION WERE.


                                      -11-

<PAGE>

         The Company has included the names of its executive officers and
         employees who will receive payment on page 52 of Amendment No. 1. The
         payment of this amount by Enstar to the Company was negotiated in
         connection with the negotiation of the transaction as a whole. The
         intent of the payment is to assist in the retention of the recipients
         of these payments following the merger. Enstar's board of directors,
         including all of its independent directors, reviewed this factor in its
         evaluation of the transaction and determined that the entirety of the
         transaction was fair to Enstar's shareholders. As previously stated,
         Enstar's board did not assign any special or relative weight to this
         factor, and each director may have weighed this factor differently in
         approving the transaction.

         PLEASE PROVIDE SIMILAR DISCLOSURE REGARDING ENSTAR'S INVESTMENT OF $25
         MILLION IN THE J.C. FLOWERS II LP IN JUNE OF 2006.

         Enstar believes that no further disclosure is necessary. Enstar's
         investment in J.C. Flowers II, L.P. is unrelated to the merger. Enstar
         and the Company made initial commitments to invest $25 million and $75
         million, respectively, in J.C. Flowers II, L.P. in February 2006, which
         commitments were accepted by J.C. Flowers II, L.P. in June 2006 along
         with other subscriptions to the fund. The aggregate commitments of
         Enstar and the Company represent less than 5% of the total amount
         expected to be committed to J.C. Flowers II, L.P.

36.      PLEASE CONSIDER INCLUDING AN ADDITIONAL RISK FACTOR DISCUSSING THIS
         TRANSFER OF CASH FROM THE PUBLIC SHAREHOLDERS TO THE INSIDERS OF
         CASTLEWOOD. THE RISK FACTOR SHOULD EXPLAIN WHAT BENEFIT OR VALUE THE
         PUBLIC ENSTAR SHAREHOLDERS RECEIVED AS A RESULT OF THE PAYMENT.

         The Company does not believe that an additional risk factor addressing
         this issue is appropriate because the transfer of cash is a part of the
         entire transaction and there is no risk associated with this transfer.

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER -- PAGE 46

37.      PLEASE REVISE THE DISCLOSURE IN THE THIRD PARAGRAPH TO INDICATE, IF
         TRUE, THAT YOU HAVE DISCLOSED ALL MATERIAL FEDERAL TAX CONSEQUENCES OF
         THE MERGER.

         The first paragraph indicates that the disclosure includes the material
         U.S. federal income tax consequences to holders. In the third paragraph
         the words "is for general information only and" have been deleted.

38.      WE NOTE THAT YOUR TAX OPINION HAS NOT YET BEEN FILED. PLEASE FILE IT AS
         SOON AS POSSIBLE TO ALLOW SUFFICIENT TIME FOR THE STAFF TO REVIEW IT
         PRIOR TO SUBMISSION OF ANY REQUEST FOR ACCELERATION OF EFFECTIVENESS OF
         THE REGISTRATION STATEMENT. WE MAY HAVE COMMENTS ON THE DISCLOSURE IN
         THIS SECTION ONCE WE REVIEW THE OPINION.

                                      -12-

<PAGE>
         A copy of the tax opinion of Debevoise & Plimpton LLP is being filed
         with Amendment No. 1.

39.      CURRENTLY, THE DISCLOSURE IN THIS SECTION IS BASED ON THE ASSUMPTION
         THAT THE MERGER WILL BE TREATED AS A REORGANIZATION. IT IS
         INAPPROPRIATE TO ASSUME THE OUTCOME THAT COUNSEL IS OPINING ON. PLEASE
         REVISE THE DISCLOSURE TO SUMMARIZE THE BASIS FOR COUNSEL'S OPINION THAT
         THE MERGER WILL BE TREATED AS A REORGANIZATION. ALSO, IDENTIFY COUNSEL
         AND CLEARLY STATE COUNSEL'S CONCLUSION AS TO THE ISSUE THEY HAVE OPINED
         UPON (I.E. THE TAX TREATMENT OF THE MERGER.)

         The first paragraph under the heading "Tax Opinions" has been revised
         to more fully describe the basis for the Debevoise & Plimpton LLP tax
         opinion. The disclosure has also been revised to remove the assumption,
         to identify tax counsel and to state the conclusion in the Debevoise &
         Plimpton LLP tax opinion.

40.      PLEASE MAKE SIMILAR REVISIONS TO THE DISCUSSION BEGINNING ON PAGE 186
         OF THIS DOCUMENT.

         The Company has reviewed the disclosure on page 186 of the Registration
         Statement (page 200 of Amendment No. 1) and does not believe that
         similar assumptions have been made with respect to the tax summary
         provided.

         The Company has revised its disclosure on page 200 to address the
         Staff's comment.

INFORMATION ABOUT CASTLEWOOD, PAGE 71.

COMPANY OVERVIEW -- PAGE 71

41.      IN THE LAST PARAGRAPH OF THIS SECTION ON PAGE 72, YOU SPECIFICALLY
         DISCUSS THE EXIT STRATEGIES OF COMMUTATIONS OR BUY-BACKS. PLEASE
         INCLUDE A MORE DETAILED DISCUSSION OF THIS PROCESS AND HOW IT WORKS.

         The Company has revised its disclosure on page 73 to address the
         Staff's comment.

RESERVES FOR UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSE -- PAGE 76

42.      PLEASE EXPLAIN TO US YOUR REASONS FOR SUBTRACTING THE "RESERVE FOR LOSS
         ADJUSTMENT EXPENSE" IN THE TABULAR PRESENTATIONS ON PAGE 78.

         The Company has revised its presentation such that it no longer
         subtracts the "Reserve for loss adjustment expense" in the tabular
         presentations on page 79 through 82 and through Amendment No. 1 to
         address the Staff's comment.

43.      PLEASE EXPLAIN TO US HOW COME YOU APPARENTLY RECEIVED MORE THAN YOU
         PAID WITH RESPECT TO THE 2005 PERIOD FOR THE LINE ITEM "PAIDS RELATED
         TO OR YEARS" FOR THE B.H. ACQUISITION OPERATIONS TABLE AT THE TOP OF
         PAGE 81. ALSO DISCUSS FOR US THE

                                      -13-

<PAGE>


         APPROPRIATENESS OF PRESENTING THESE AMOUNTS FOR JUST THE PORTION
         RELATED TO CASTLEWOOD INSTEAD OF ALL THE OPERATIONS OF B.H.
         ACQUISITION.

         During 2005, BH Acquisition negotiated and completed a commutation
         transaction with a major reinsurer whereby BH Acquisition's right to
         recover future losses ceded to the reinsurer was exchanged for a
         payment of $23 million. The paid loss recoveries in the year, including
         the $23 million commutation receipt, exceeded the gross paid losses
         resulting in a net paid recovery in the year.

         The loss reserve development table for Castlewood's share of BH
         Acquisition's historical loss development has been presented so that
         investors may more readily determine the relative significance of BH
         Acquisition's loss development compared to Castlewood's consolidated
         loss development. In management's opinion this presentation is more
         meaningful for investors.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS -- PAGE 98


BUSINESS OVERVIEW -- PAGE 99

44.      IN THE RISK FACTOR "CERTAIN EXIT AND FINALITY STRATEGIES MAY NOT
         CONTINUE TO BE AVAILABLE," YOU DISCUSS THE FACT THAT CERTAIN SOLVENT
         SCHEMES THAT YOU HISTORICALLY PURSUED IN EUROPE APPEAR TO BE LESS
         AVAILABLE. PLEASE DISCUSS THE IMPLICATIONS OF THIS ON YOUR BUSINESS.
         INCLUDE WHETHER CERTAIN ACQUISITIONS WERE PURCHASED WITH THE PURSUIT OF
         THIS EXIT STRATEGY IN MIND, AND HOW THAT MAY AFFECT THE PROFITABILITY
         OF THOSE BOOKS OF BUSINESS.

         The Company has revised its disclosure on pages 107 and 108 to address
         the Staff's comment.

CRITICAL ACCOUNTANT POLICIES -- PAGE 103

LOSS AND LOSS ADJUSTMENT EXPENSES -- PAGE 103

45.      WE BELIEVE YOUR DISCLOSURE IN THE CRITICAL ACCOUNTING ESTIMATES SECTION
         OF MD&A REGARDING THE ESTIMATION OF THE RESERVE FOR LOSS AND LOSS
         ADJUSTMENT EXPENSES COULD BE IMPROVED TO BETTER EXPLAIN THE JUDGMENTS
         AND UNCERTAINTIES SURROUNDING THIS ESTIMATE AND THE POTENTIAL IMPACT ON
         YOUR FINANCIAL STATEMENTS. WE BELIEVE IN ORDER TO MEET THE PRINCIPAL
         OBJECTIVES OF MD&A THIS DISCLOSURE SHOULD ENABLE THE INVESTOR TO
         UNDERSTAND 1) MANAGEMENT'S METHOD FOR ESTABLISHING THE ESTIMATE; 2)
         WHETHER AND IF SO TO WHAT EXTENT AND WHY MANAGEMENT HAS ADJUSTED THEIR
         ASSUMPTIONS USED TO DETERMINE THE ESTIMATE FROM THE ASSUMPTIONS USED IN
         THE IMMEDIATELY PRECEDING PERIOD AND 3) THE POTENTIAL VARIABILITY IN
         THE MOST RECENT ESTIMATE AND THE IMPACT THIS VARIABILITY MAY HAVE ON
         REPORTED RESULTS, FINANCIAL CONDITION AND LIQUIDITY. PLEASE KEEP THE
         POINTS IN MIND IN PROVIDING US YOUR RESPONSES TO COMMENTS LISTED BELOW.
         PLEASE PROVIDE US, IN DISCLOSURE-TYPE FORMAT, THE FOLLOWING INFORMATION
         FOR

                                      -14-

<PAGE>


         EACH MATERIAL LINE OF BUSINESS AND ALSO CONSIDER PROVIDING ANY
         ADDITIONAL INFORMATION, IN DISCLOSURE-TYPE FORMAT, TO ACHIEVE THIS
         OBJECTIVE.

         a.       PLEASE DISCLOSE THE AMOUNT OF THE GROSS RESERVES FOR LOSS AND
                  LOSS ADJUSTMENT EXPENSE FOR EACH YEAR PRESENTED. INCLUDE THE
                  AMOUNT OF IBNR SEPARATELY FOR EACH MATERIAL LINE OF BUSINESS.

                  The Company has provided the information requested by the
                  Staff on page 111 of Amendment No. 1.

         b.       PLEASE DESCRIBE THE METHODS YOU USED TO DETERMINE YOUR RESERVE
                  FOR LOSS AND LOSS ADJUSTMENT EXPENSE. PLEASE ENSURE THIS
                  DESCRIPTION:

                  1.       IDENTIFIES THE UNIQUE DEVELOPMENT CHARACTERISTICS OF
                           EACH MATERIAL SHORT-TAIL AND LONG-TAIL LINE OF
                           BUSINESS.

                           The Company has included additional discussion on
                           pages 112 through 114 of Amendment No. 1 to address
                           the Staff's comment.

                  2.       EXPLAIN WHICH METHODOLOGY YOU USED TO RECORD YOUR
                           RESERVES. INCLUDE WHY YOU SELECTED THIS METHODOLOGY
                           OVER ANY OF THE OTHER METHODOLOGIES AND WHETHER THE
                           SAME METHODOLOGY WAS USED FOR ALL PERIODS. DISCLOSE
                           THE RANGE OF OUTCOMES PRODUCED USING THESE VARIOUS
                           METHODOLOGIES.

                           The Company has added additional discussion to the
                           Loss and Loss Adjustment Expenses section on pages
                           112 through 114 of Amendment No. 1 to address the
                           Staff's comment.

                  3.       DESCRIBE THE METHOD YOU USE TO CALCULATE THE IBNR
                           RESERVE FOR EACH MATERIAL LINE OF BUSINESS. FOR
                           EXAMPLE, WE UNDERSTAND THAT SOME COMPANIES MAY
                           CALCULATE THIS RESERVE BY ESTIMATING THE ULTIMATE
                           UNPAID LIABILITY FIRST AND THEN REDUCING THAT AMOUNT
                           BY CUMULATIVE PAID CLAIMS AND BY CASE RESERVES, BUT
                           THERE MAY BE OTHER METHODS AS WELL.

                           The Company has added additional discussion to the
                           Loss and Loss Adjustment Expenses section on page 118
                           of Amendment No. 1 to address the Staff's comment.

         c.       IF MANAGEMENT HAS ADDED AN INCREMENTAL PROVISION TO THE
                  RESERVE FOR LOSS AND LOSS ADJUSTMENT EXPENSE DETERMINED BY
                  YOUR ACTUARIES, QUANTIFY THE INCREMENTAL PROVISION, DESCRIBE
                  THE METHOD USED BY MANAGEMENT TO DETERMINE IT AND THE EXTENT
                  TO WHICH THAT METHOD DIFFERS FROM PERIOD TO PERIOD, AND
                  IDENTIFY AND ANALYZE THE SPECIFIC

                                      -15-

<PAGE>

                  UNDERLYING REASONS THAT EXPLAIN WHY MANAGEMENT BELIEVES IT IS
                  NECESSARY.

                  Management has not added any incremental provision to the
                  reserve for loss and allocated loss adjustment expense
                  determined by the actuaries.

         d.       IT APPEARS THAT YOU HAVE SIGNIFICANTLY REVISED YOUR PROVISION
                  FOR LOSSES OF INSURED EVENTS OF PRIOR YEARS. PLEASE PROVIDE
                  THE FOLLOWING TO EXPLAIN THE REASONS FOR YOUR CHANGE IN
                  ESTIMATE FOR YOUR RESERVES:

                  1.       IDENTIFY AND DESCRIBE IN REASONABLE SPECIFICITY THE
                           NATURE AND EXTENT OF A) NEW EVENTS THAT OCCURRED OR
                           B) ADDITIONAL EXPERIENCE/INFORMATION OBTAINED SINCE
                           THE LAST REPORTING DATE THAT LED TO THE CHANGE IN
                           ESTIMATES.

                           The Company has added additional disclosure regarding
                           commutations to the Loss and Loss Adjustment Expenses
                           section on pages 80 and 81 of Amendment No. 1 to
                           address the Staff's comment.

                           It is not possible to quantify with specificity the
                           isolated impact that commutations and policy
                           buy-backs have on aggregate reserve changes because
                           the Company estimates IBNR at the reserving category
                           level as opposed to the individual contract level.
                           Management evaluates commutation proposals by
                           comparing negotiated settlement with the carrying
                           value of losses payable and OLR.

                           Further, disclosure of this information could be
                           prejudicial to the Company's ongoing commutation and
                           policy buy-back discussions and negotiations with
                           cedants and reinsurers.

                  2.       ENSURE YOUR DISCLOSURE CLARIFIES THE TIMING OF THE
                           CHANGE IN ESTIMATE SUCH AS WHY RECOGNITION OCCURRED
                           IN THE PERIODS THAT IT DID AND WHY RECOGNITION IN
                           EARLIER PERIODS WAS NOT REQUIRED.

                           The Company has added additional discussion to the
                           Loss and Loss Adjustment Expenses section on page 119
                           of Amendment No. 1 to address the Staff's comment.

                  3.       WITH RESPECT TO THE IMPACT THAT THE COMMUTATIONS AND
                           POLICY BUY-BACKS INCLUDE THE AMOUNT OF THE CHANGES
                           ATTRIBUTABLE TO THESE PRACTICES AS WELL AS A
                           DISCUSSION OF THE RESERVES ASSOCIATED WITH THESE
                           POLICIES AND THE AMOUNTS AGREED TO AT THE TIME OF THE
                           SETTLEMENT.

                                      -16-

<PAGE>

                           It is not possible to quantify with specificity the
                           isolated impact that commutations and policy
                           buy-backs has on aggregate reserve changes because
                           the Company estimates IBNR at the reserving category
                           level as opposed to the individual contract level.
                           Management evaluates commutation proposals by
                           comparing negotiated settlement policies with losses
                           payable and OLR.

         e.       PLEASE IDENTIFY AND DESCRIBE THOSE KEY ASSUMPTIONS THAT
                  MATERIALLY AFFECT THE ESTIMATE OF THE RESERVE FOR LOSS AND
                  LOSS ADJUSTMENT EXPENSES. IN ADDITION PLEASE DISCLOSE THE
                  FOLLOWING:

                  1.       FOR EACH OF YOUR KEY ASSUMPTIONS QUANTIFY AND EXPLAIN
                           WHAT CAUSED THEM TO CHANGE FROM THE ASSUMPTIONS USED
                           IN THE IMMEDIATELY PRECEDING PERIOD. PLEASE NOTE THAT
                           THIS DISCUSSION SHOULD SUPPLEMENT, RATHER THAN
                           DUPLICATE THE DISCLOSURE PROVIDED RESPONSIVE TO
                           INDUSTRY GUIDE 6.

                           The Company has added additional discussion to the
                           Loss and Loss Adjustment Expenses section on pages
                           116 and 117 of Amendment No. 1 to address the Staff's
                           comment.

                  2.       EXPLICITLY IDENTIFY AND DISCUSS KEY ASSUMPTIONS AS OF
                           [LATEST BALANCE SHEET DATE] THAT ARE PREMISED ON
                           FUTURE EMERGENCE THAT ARE INCONSISTENT WITH
                           HISTORICAL LOSS RESERVE DEVELOPMENT PATTERNS AND
                           EXPLAIN WHY THESE ASSUMPTIONS ARE NOW APPROPRIATE
                           GIVEN THE INCONSISTENCY IDENTIFIED.

                           There are no key assumptions premised on future
                           emergence that are inconsistent with historical loss
                           reserve development patterns.

         f.       IN ORDER TO SHOW INVESTORS THE POTENTIAL VARIABILITY IN THE
                  MOST RECENT ESTIMATE OF YOUR LOSS RESERVE, QUANTIFY AND
                  PRESENT PREFERABLY IN A TABULAR FORMAT THE IMPACT THAT
                  REASONABLY LIKELY CHANGES IN THE KEY ASSUMPTIONS IDENTIFIED
                  MAY HAVE ON REPORTED RESULTS, FINANCIAL POSITION AND
                  LIQUIDITY. EXPLAIN WHY MANAGEMENT BELIEVES THE SCENARIOS
                  QUANTIFIED ARE REASONABLY LIKELY. PLEASE NOTE THAT A SIMPLE
                  CALCULATION OF A PERCENTAGE CHANGE IN THE RESERVES IS NOT
                  SUFFICIENT TO THIS END.

                  The Company has added additional discussion and provided the
                  requested information on page 117 of Amendment No. 1 to
                  address the Staff's comment.

46.      FOR YOUR ASBESTOS AND ENVIRONMENTAL EXPOSURE, PLEASE PROVIDE MORE
         PRECISE INSIGHT INTO THE EXISTENCE AND EFFECTS ON FUTURE OPERATIONS AND
         FINANCIAL CONDITION OF KNOWN

                                      -17-

<PAGE>

         TRENDS, EVENTS AND UNCERTAINTIES. DISCLOSURE YOU SHOULD CONSIDER, BUT
         NOT BE LIMITED TO, INCLUDES THE FOLLOWING INFORMATION:

         o        THE NUMBER OF CLAIMS PENDING AT EACH BALANCE SHEET DATE;


         o        THE NUMBER OF CLAIMS REPORTED FOR EACH PERIOD PRESENTED;


         o        THE NUMBER OF CLAIMS DISMISSED, SETTLED, OR OTHERWISE RESOLVED
                  FOR EACH PERIOD;

         o        THE NATURE OF THE CLAIMS INCLUDING RELEVANT CHARACTERISTICS OF
                  THE CLAIMANT POPULATION (E.G., INVOLVES A LARGE NUMBER OF
                  RELATIVELY SMALL INDIVIDUAL CLAIMS OF A SIMILAR TYPE);

         o        THE TOTAL SETTLEMENT AMOUNT FOR EACH PERIOD;

         o        THE COST OF ADMINISTERING THE CLAIMS;

         o        EMERGING TRENDS THAT MAY RESULT IN FUTURE RESERVE ADJUSTMENTS;
                  AND

         o        IF MANAGEMENT IS UNABLE TO ESTIMATE THE POSSIBLE LOSS OR RANGE
                  OF LOSS, A STATEMENT TO THAT EFFECT.

         The Company has added additional disclosure on pages 80, 81, 113 and
         114 of Amendment No. 1 to address the Staff's comment.

LIQUIDITY AND CAPITAL RESOURCES -- PAGE 121

47.      BASED ON THE NATURE OF YOUR BUSINESS DESCRIBED THROUGHOUT THE DOCUMENT,
         GIVEN YOUR LACK OF REVENUES AND OTHER OPERATING CASH INFLOWS, IT
         APPEARS THAT THE ONLY AVAILABLE OPTIONS TO GENERATE CASH FROM EXTERNAL
         SOURCES ARE THROUGH FINANCING ACTIVITIES. PLEASE REVISE YOUR DISCUSSION
         TO MORE CLEARLY DISCUSS THIS LIMITATION. ALSO INCLUDE A DISCUSSION OF
         WHETHER OR NOT MANAGEMENT EXPECTS TO GENERATE CASH FLOWS FROM
         OPERATIONS, OR IF IT EXPECTS TO PRIMARILY USE CASH IN ITS OPERATIONS.

         The Company has revised its disclosure on pages 138 and 139 to address
         the Staff's comment.

48.      ALSO PLEASE INCLUDE A DISCUSSION OF YOUR ASSET/LIABILITY MANAGEMENT
         PROCESS AND WHETHER THERE ARE ANY SIGNIFICANT VARIATIONS BETWEEN THE
         MATURITY OF YOUR INVESTMENTS AND THE EXPECTED PAYMENT OF YOUR LOSS
         RESERVES. INCLUDE A DISCUSSION OF THE IMPACT OF SELLING SECURITIES
         BEFORE ANTICIPATED OR THE USE OF CREDIT FACILITIES TO PAY FOR POLICY
         LIABILITIES WILL HAVE ON YOUR FUTURE LIQUIDITY AND RESULTS OF
         OPERATIONS AS WELL AS THE POTENTIAL IMPACT THAT THE CLASSIFICATION OF
         THE ASSETS AS HELD-TO-MATURITY MAY HAVE ON THESE DECISIONS.

                                      -18-

<PAGE>

         The Company has revised its disclosure on page 138 and 139 to address
         the Staff's comment.

AGGREGATE CONTRACTUAL OBLIGATIONS -- PAGE 123

49.      PLEASE REVISE THE TABLE OF CONTRACTUAL OBLIGATIONS TO PRESENT THE
         RESERVES FOR LOSSES AND LOSS ADJUSTMENT EXPENSES GROSS AND NOT NET OF
         THE EFFECT OF EXPECTED REINSURANCE RECOVERIES. IN ADDITION INCLUDE THE
         FINANCING COMMITMENTS RELATED TO CERTAIN INVESTMENTS THAT YOU HAVE
         ENTERED INTO.

         The Company has revised its disclosure on page 141 to address the
         Staff's comment.

QUANTITATIVE AND QUALITATIVE INFORMATION ABOUT MARKET RISK -- PAGE 124

50.      PLEASE REVISE THIS DISCUSSION TO INCLUDE THE IMPACT OF FOREIGN CURRENCY
         RISK ON YOUR FINANCIAL STATEMENTS.

         The Company has revised its disclosure on page 143 to address the
         Staff's comment.

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION -- PAGE 133

1.  ADJUSTMENTS TO THE PRO FORMA CONDENSED COMBINED BALANCE SHEET -- PAGE 137

NOTE U -- PAGE 141

51.      PLEASE EXPLAIN TO US HOW YOU ARRIVED AT THE DECISION TO INCLUDE THIS AS
         A CHARGE DIRECTLY TO ADDITIONAL PAID-IN CAPITAL. PLEASE PROVIDE ANY
         REFERENCES TO THE SPECIFIC PARAGRAPHS WITHIN THE APPLICABLE
         AUTHORITATIVE LITERATURE UPON WHICH YOU RELIED IN MAKING THIS
         DETERMINATION.

         The fair value of New Enstar stock to be issued in connection with the
         acquisition of Enstar in excess of the par value of that stock has been
         credited to Additional Paid in Capital.

         Bermuda law requires that the excess of the value of the shares issued
         over the par value of those shares be credited to an equity account
         called "share premium". Section 40(1) of the Bermuda Companies Act 1981
         states: "Where a company issues shares at a premium, whether for cash
         or otherwise, a sum equal to the aggregate amount or value of the
         premiums on those shares shall be transferred to an account, to be
         called "the share premium account" ...." U.S. GAAP nomenclature for
         "share premium" is additional paid in capital.

         Accounting Principles Board Opinion 6, Status of Accounting Research
         Bulletins, paragraph 12(a) contemplates the allocation of any excess of
         the purchase price of retired stock over the par or stated value of
         that stock to additional paid in capital to the extent, inter alia, of
         additional paid in capital on the same issue, which would seem to

                                      -19-

<PAGE>

         contemplate that any excess of issue price over par or stated value
         would be credited to additional paid in capital.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS -- PAGE 150

52.      PLEASE EXPAND THE APPROPRIATE PARAGRAPHS TO DISCLOSE HOW AND HOW MUCH
         THE MANAGEMENT OF FLOWERS FUND AND JCF CFN IS COMPENSATED.

         The Company has revised its disclosure on page 167 to address the
         Staff's comment.

53.      EXPAND THE THIRD PARAGRAPH TO DISCLOSE WHAT EACH OF CASTLEWOOD AND
         SHINSEI PAID FOR THEIR INVESTMENT IN AIOI INSURANCE COMPANY OF EUROPE
         LTD. AND WHAT PERCENTAGE OF AIOI EACH RECEIVED.

         The Company has revised its disclosure on page 166 to address the
         Staff's comment.

54.      PLEASE EXPAND THE DISCLOSURE IN THE FOURTH PARAGRAPH ON PAGE 150 TO
         DISCLOSE THE TOTAL AMOUNT PAID TO MS. ASHLEY HOLMES TO DATE FOR HER
         CONSULTING SERVICES AND WHETHER SHE WILL CONTINUE TO PROVIDE THE
         SERVICES TO NEW ENSTAR.

         The Company has revised its disclosure on page 166 to address the
         Staff's comment.

55.      PLEASE REFER TO THE DISCLOSURE IN THE FIFTH PARAGRAPH OF PAGE 150 AND
         THE LAST PARAGRAPH OF PAGE 151. COMPARE WHAT BOTH CASTLEWOOD AND ENSTAR
         PAID FOR THEIR LIMITED PARTNERSHIP INTEREST IN NIB PARTNERS AND
         RECEIVED RETURN AS A PARTNERSHIP INTEREST WITH WHAT MR. FLOWERS AND
         EACH MEMBER OF MANAGEMENT PAID AND RECEIVED. EXPLAIN THE TYPE OF
         PARTNERSHIP INTEREST AND PERCENTAGE INTERESTS EACH RECEIVED AND
         DISCLOSE HOW THE PARTNERSHIP AGREEMENT DIVIDES EXPENSES AND INCOME
         BETWEEN LIMITED AND GENERAL PARTNERS. EXPLAIN HOW AND HOW MUCH THE
         GENERAL PARTNERS ARE COMPENSATED FOR PROVIDING MANAGEMENT SERVICES TO
         THE PARTNERSHIP. PROVIDE THE SAME INFORMATION FOR CASSANDRA LLC AND LP
         AND THE AFFIRMATIVE INVESTMENT LP.

         Enstar and Castlewood paid for and received ownership interests in NIB
         Partners, Cassandra LLC and LP and Affirmative Investment LP on a pro
         rata basis to Mr. Flowers and other members of management. The fees and
         other compensation that are payable to affiliates of Mr. Flowers by the
         other limited partners in connection with such investments have been
         waived for both Enstar and Castlewood. Castlewood and Enstar will not
         pay any fees or other compensation to affiliates of Mr. Flowers in
         connection with these investments.

         The Company has revised the disclosure on pages 166 through 168 to
         address the Staff's comment.

FINANCIAL STATEMENTS -- DECEMBER 31, 2005

CONSOLIDATED STATEMENTS OF EARNINGS, PAGE F-4

                                      -20-

<PAGE>

56.      YOUR CURRENT PRESENTATION IMPLIES THAT THE "NET REDUCTION IN LOSS AND
         LOSS ADJUSTMENT EXPENSE LIABILITIES" REPRESENTS REVENUE. IN FACT ON
         PAGE 108 OF THE DOCUMENT YOU ACTUALLY REFERENCE THE ITEMS AS REVENUES.
         PLEASE REVISE YOUR PRESENTATION TO INCLUDE THIS LINE ITEM OUTSIDE OF
         THE "INCOME" OR "REVENUES" SECTION.

         The Company has revised its presentation throughout Amendment No. 1 to
         address the Staff's comment.

57.      PLEASE REVISE THIS PRESENTATION TO REMOVE THE LINE ITEM "FOREIGN
         EXCHANGE (LOSS)/GAIN" FROM THE "INCOME" OR "REVENUE" SECTION.

         The Company has revised its presentation throughout Amendment No. 1 to
         address the Staff's comment.

CONSOLIDATED STATEMENTS OF CASH FLOWS, PAGE F-7

58.      PLEASE EXPLAIN TO US IN GREATER DETAIL WHAT THE "ACQUISITION OF SHARES
         AND CONTRIBUTION TO SURPLUS OF SUBSIDIARY BY MINORITY INTEREST" THAT
         OCCURRED IN 2003 REPRESENTS. INCLUDE THE ACCOUNTING TREATMENT APPLIED
         TO THIS CONTRIBUTION.

         In 2003, the Company and Shinsei subscribed for a 50.1% and 49.9%
         economic interest, respectively, in a holding company, Hillcot Holdings
         Ltd. ("Hillcot"), formed for the purpose of acquiring The Toa-Re
         Insurance Company (UK) Limited. Shinsei and the Company each made cash
         contributions, in the same proportions as their economic interests, to
         fund the purchase. The 2003 consolidated statement of cash flows
         includes as a financing item the U.S. equivalent of amounts paid by
         Shinsei to acquire Hillcot shares and as a contribution toward
         financing this acquisition. Hillcot recorded the contribution as an
         increase in cash and an increase in share capital and additional paid
         in capital. The Company's consolidated financial statements include
         100% of the financial position and results of operations of Hillcot,
         with 49.9% of these amounts recorded as a minority interest held by
         Shinshei.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, PAGE F-8

2.  SIGNIFICANT ACCOUNTING POLICIES, PAGE F-8

LOSSES AND LOSS ADJUSTMENT EXPENSES, PAGE F-9

59.      PLEASE EXPLAIN TO US HOW YOUR POLICY TO AMORTIZE THE PROVISIONS THAT
         YOU ESTABLISHED FOR THE LOSS ADJUSTMENT EXPENSES RELATED TO FUTURE
         RUN-OFF COSTS COMPLIES WITH GAAP.

         Financial Accounting Standards Board statement 60 "Accounting and
         Reporting by Insurance Enterprises," paragraph 20 requires "a liability
         for all costs expected to be incurred in connection with the settlement
         of unpaid claims to be accrued when the

                                      -21-

<PAGE>

         related liability for unpaid claims is accrued." A substantial activity
         for a (re)insurance company in run-off is the adjustment and settlement
         of claims and billing and collection of related reinsurance and almost
         all of its operating costs are incurred in connection with this
         activity.

         The purchase price that Castlewood is prepared to pay to acquire a
         (re)insurance company in run-off explicitly includes provision for the
         costs of administering that run-off. These costs are accrued as loss
         adjustment expense liabilities in accounting for the acquisition, and
         are released to income over the estimated term of the run-off.
         Provisions for loss and loss adjustment expense liabilities are
         reassessed at each reporting date and adjusted should estimates of the
         annual costs or run-off period change.

3.  ACQUISITIONS, PAGE F-11

2004, PAGE F-11

60.      PLEASE EXPLAIN TO US AND DISCLOSE WHY YOU WERE ABLE TO PURCHASE THE
         MERCANTILE NET ASSETS AT SUCH A SIGNIFICANT DISCOUNT. INCLUDE WHETHER
         THIS HAS ANY IMPLICATIONS TO THE RISKS ASSUMED BY THE COMPANY WITH
         RESPECT TO THIS ACQUISITION.

         The Company has provided additional disclosure on page 134 to address
         the Staff's comment. The aggregate adverse loss development indemnities
         provide coverage capped at worst plausible case loss and loss
         adjustment reserves. As a result of these indemnities, the discount has
         no implications to the risks assumed by the Company with respect to
         this acquisition.

5.  INVESTMENTS, PAGE F-12

TRADING, PAGE F-14

61.      PLEASE EXPLAIN TO US THE NATURE OF THESE TRADING SECURITIES INCLUDING
         YOUR INTENTIONS AND FORM OF ACQUISITION. INCLUDE WHY MANAGEMENT CHANGED
         ITS INVESTMENT STRATEGY AND HOW THIS MAY POTENTIALLY AFFECT YOUR
         OPERATIONS.

         During 2004 the Company, though its subsidiary, acquired Harper
         Insurance Limited ("Harper") (formerly Turegum Insurance Company). As
         part of the acquisition, the Company acquired Harper's fixed income
         portfolio. Upon completion of the acquisition, Harper's fixed income
         investment portfolio was reviewed by management, taking into account
         the Company's run-off strategy for Harper's liabilities. Fixed income
         maturities were selected to provide, together with the short-term cash
         investments, sufficient cash flow to fund expected claims payments,
         while maximizing interest income. As a result of this analysis, the
         Company classified certain fixed income securities as held to maturity.
         Fixed income securities that were not part of the Company's run-off
         strategy were classified as trading as management intended to sell
         these securities in the near term. The securities designated as trading
         were completely sold in the first quarter of 2005.

                                      -22-

<PAGE>

10.  SHARE CAPITAL, PAGE F-18

62.      PLEASE DESCRIBE IN GREATER DETAIL THE REDEMPTION CHARACTERISTICS OF THE
         "CLASS E ORDINARY NON-VOTING REDEEMABLE SHARES." INCLUDE THE
         CIRCUMSTANCES UNDER WHICH THEY BECOME REDEEMABLE AND AT WHOSE OPTION
         THE REDEMPTION IS. INCLUDE YOUR CONSIDERATION OF WHETHER THESE SHARES
         SHOULD BE CLASSIFIED OUTSIDE OF EQUITY AS A RESULT OF THIS REDEMPTION
         FEATURE.

         Class E shares are non-voting and were issued to the shareholders of
         Castlewood Limited (a subsidiary of Castlewood), together with the
         Class C shares, upon the acquisition of Castlewood Limited by
         Castlewood Holdings. Upon the declaration of dividends by the Company
         on Class C Shares, the holders of Class E Shares have the option to
         redeem Class E Shares. The amount of Class E Shares that are eligible
         for redemption is equal to the total dividend declared on the Class C
         Shares, as the Class E Shares are redeemable at their par value of $1
         per share. The holders of Class E shares are not entitled to any
         dividends or rights to participate in any distributions of assets upon
         liquidation.

         Class E Shares are not mandatorily redeemable nor is their redemption
         an unconditional obligation. Instead, the redemption of Class E Shares
         is dependent on the payment of dividends on Class C Shares, an event
         which was not definitely certain to occur. There is no mechanism in the
         Company's bye-laws or any privilege or rights which would allow for the
         Class C shareholders to force the Company to make a dividend payment.

         All Class E shares were fully redeemed during the second quarter of
         2006.

         The Company has revised its disclosure on page F-18 to address the
         Staff's comment.

11.  ADDITIONAL PAID-IN CAPITAL, PAGE F-18

63.      PLEASE DESCRIBE TO US AND DISCLOSE IN GREATER DETAIL THE FACTS AND
         CIRCUMSTANCES THAT RESULTED IN THE $14 MILLION CONTRIBUTION RECORDED
         HERE IN 2003.

         As part of the 2001 acquisition of Castlewood Limited by the Company
         the non-management shareholders of the Company agreed to fund up to $79
         million in (re)insurance acquisitions by the Company. The capital
         contribution by those two shareholder groups in 2003 represents the
         final payment of that $79 million commitment. $65 million of this
         commitment was funded by the non-management shareholders prior to 2003.

         The Company has revised its disclosure on page F-19 to address the
         Staff's comment.

13.  EMPLOYEE BENEFITS, PAGE F-19

64.      PLEASE EXPLAIN TO US HOW YOU DETERMINED THE FAIR VALUES TO ASSIGN TO
         THE SHARES ISSUED UNDER THE PROGRAMS.

                                      -23-

<PAGE>

         Class C and E Shares awarded and issued on November 1, 2002 were
         recorded at estimated fair value at the date of the award. Determining
         the fair value of our stock required making complex and subjective
         judgments. The Company's approach to valuation was based on a
         discounted cash flow approach that uses its estimates of revenue,
         driven by assumed growth rates, and estimated costs as well as
         appropriate discount rates. These estimates were consistent with the
         plans and estimates that the Company's management use to manage the
         Company's business. The valuation and was completed in the 4th quarter
         of 2002 based on the Company's financial information as at September
         30, 2002.

         Class D Shares issued in 2004 and 2005 were recorded at book value.
         Additional amounts were charged to income in reporting periods
         subsequent to the issue of the shares to reflect increases in book
         value related to the vested portion of these awards. The terms of the D
         shares provide the Company with an option to acquire vested D shares
         for book value and unvested shares for nominal consideration when those
         employees cease to be employed by the Company.

         On May 23, 2006, the Company entered into a merger agreement and a
         recapitalization agreement. The execution of these agreements changed
         the accounting treatment of the Company's employee share plan from a
         book value plan to a fair value plan. As a result of this modification
         of the award, Castlewood recognized additional stock-based compensation
         of $15,584 for the three month and six months ended June 30, 2006,
         respectively, due to the adoption of FAS No. 123(R) Share-Based Payment
         related to the recording of the employee plan using the fair value
         method.

14.  EARNINGS PER SHARE, PAGE F-19

65.      PLEASE EXPLAIN TO US WHY YOU APPARENTLY HAVE NOT INCLUDED THE "CLASS E
         ORDINARY NON-VOTING REDEEMABLE SHARES" IN THESE EARNINGS PER SHARE
         CALCULATIONS.

         The holders of Class E shares are not entitled to any dividends or
         rights to participate in any distributions of assets upon liquidation.
         As a result, the Class E shares do not meet the definition of a
         participating security in FAS Statement No. 128 Earnings Per Share, and
         therefore the Two-Class Method of Earnings Per Share has not been
         applied.

18.  TAXATION, PAGE F-21

66.      PLEASE PROVIDE TO US AND DISCLOSE A MORE DETAILED DISCUSSION OF THE UK
         OPERATIONS THAT RESULTED IN THE "BENEFIT OF LOSS CARRY-FORWARD" AND THE
         CORRESPONDING "VALUATION ALLOWANCE." INCLUDE A BETTER DISCUSSION OF WHY
         IT IS MORE LIKELY THAN NOT THAT THE CARRY-FORWARDS WILL NOT BE
         UTILIZED.

         At the time of the acquisition of each of the Company's U.K. insurance
         and reinsurance subsidiaries, each company had tax loss carry-forwards
         that arose prior to acquisition as such entities had performed poorly
         and generated tax losses. Under U.K. tax law, the tax loss
         carry-forwards attributable to the acquired companies are retained by
         them on

                                      -24-

<PAGE>

         acquisition by the Company and are available to offset future taxable
         income generated by the acquired company without time limit and, in
         accordance with S107(4) of the Finance Act 2000, are also available to
         offset taxable income generated by the Company's U.K. consulting
         subsidiaries.

         As the insurance and reinsurance subsidiaries' investment income is
         largely offset by expenses, the only future taxable revenue of such
         entities consists of the reduction in net loss and loss adjustment
         expense liabilities generated by future commutations, policy buybacks
         and favorable claims settlements. As the timing and benefit of such
         future activities is unpredictable, the Company has adopted a prudent
         approach of assuming that it is more likely than not that the
         carry-forwards will not be utilized and, therefore a valuation
         allowance of 100% has been provided with respect to this element of the
         potential future tax benefit.

         Although not passed into legislation yet, the U.K. tax authorities have
         confirmed that the benefits provided by S107(4) of the Finance Act
         2000, which provides the ability to utilize tax loss carry-forwards to
         offset taxable income generated by Castlewood's U.K. consulting
         subsidiaries, will be terminated with effect from the end of 2006. As
         such, only the taxable earnings generated by Castlewood's U.K.
         consulting operations for the year ended December 31, 2006 could
         benefit from the tax loss carry-forwards as at December 31, 2005. As
         these amounts are expected to be immaterial, a valuation allowance of
         100% of this element of the potential future benefit of the tax loss
         carry-forwards has been provided.

         The Company has revised its disclosure on page F-22 to address the
         Staff's comment.

19.  STATUTORY REQUIREMENTS, PAGE F-21

67.      PLEASE REVISE YOUR DISCLOSURE TO INCLUDE A DISCUSSION OF THE NATURE OF
         ANY STATUTORY LIMITATIONS RELATED TO DIVIDENDS. ALSO EXPLAIN TO US WHY
         YOU DID NOT INCLUDE ANY DISCLOSURES RELATED TO THE STATUTORY INCOME IN
         THIS DISCUSSION.

         The Company has revised the disclosure on pages F-23 to address the
         Staff's comment.

         The disclosures related to statutory income were excluded previously as
         management did not believe that it added any useful information as the
         Company's reinsurance subsidiaries, which operate in Bermuda and
         Europe, are not regulated by statutory net income, but are regulated by
         their statutory capital and surplus.

FINANCIAL STATEMENTS -- MARCH 31, 2006

3.  ACQUISITION, PAGE F-34

68.      PLEASE EXPLAIN TO US THE ACCOUNTING TREATMENT APPLIED TO THE $22.9
         MILLION CONTRIBUTION TO HILLCOT AND THE $21.0 MILLION ADVANCE FROM THE
         MINORITY INTEREST PARTNER RELATED TO THIS ACQUISITION.

                                      -25-

<PAGE>

         The consolidated financial statements of the Company at June 30, 2006
         reflect the $22.9 million of minority contribution to surplus as an
         increase in minority interest.

         In 2006, the Company and Shinshei contributed $23.0 million and $22.9
         million, respectively, in proportion to their 50.1% and 49.9% economic
         interest, respectively, in Hillcot to fund the acquisition of Aioi
         Insurance Company of Europe Ltd. ("Aioi").

         Hillcot recorded the $22.9 million contribution as an increase in cash
         and an increase in additional paid in capital. The Company's
         consolidated financial statements include 100% of the financial
         position and results of operations of Hillcot, with 49.9% of these
         amounts recorded as a minority interest.

         On March 27, 2006 a $21.0 million advance was obtained from Shinsei by
         Hillcot because bank financing for a portion of the purchase price of
         Aioi had not been finalized at the time the purchase price was paid.
         The bank financing was finalized on April 12, 2006 and the advance was
         repaid on April 13, 2006. Hillcot recorded the advance from Shinsei as
         an increase in cash and an increase in other liabilities.

6.  SUBSEQUENT EVENTS, PAGE F-36

69.      IN THE SECOND FULL PARAGRAPH ON PAGE F-37, YOU DISCUSS THE REPURCHASE
         OF SOME SHARES BY AIOI. PLEASE EXPLAIN TO US WHAT HAPPENED WITH RESPECT
         TO THIS ACQUISITION GIVEN THAT IT WAS ONLY ACQUIRED IN LATE MARCH 2006.
         INCLUDE THE NUMBER OF SHARES ACQUIRED IN MARCH AS WELL AS THE NUMBER OF
         SHARES SOLD IN MAY.

         The repurchase of 40 million shares, Pound Sterling1 par value per
         share, of the 156 million shares, Pound Sterling1 par value per share,
         that existed at the date of acquisition of Aioi subsequent to the
         purchase was contemplated by the purchase transaction. The repurchase
         was approved by the financial services regulator in the UK, the
         Financial Services Authority ("FSA"), as part of their approval of the
         overall purchase transaction. The repurchase was, as required under UK
         law, advertised and could not be effective for seven weeks pending any
         creditor objection. No objections were received, the shares were
         repurchased and the vendor loan note was repaid.

         The transaction was structured in this manner, whereby the repurchase
         of the shares was done subsequent to acquisition, as the vendor did not
         want to go through the process itself. However, approval by the FSA of
         the repurchase was a condition of the completion of the sale and,
         therefore, all parties involved in the negotiation of the sale of Aioi
         were aware that the reduction was to occur.

         See also the revised disclosure on page F-37.

ITEM 21.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES, PAGE II-1

                                      -26-

<PAGE>

70.      PLEASE INCLUDE A LETTER FROM YOUR ACCOUNTANTS REGARDING UNAUDITED
         INTERIM FINANCIAL INFORMATION THAT COMPLIES WITH THE REQUIREMENTS OF
         ITEM 601(b)(15) OF REGULATION S-K. PLEASE ALSO FILE CONSENTS FROM YOUR
         ACCOUNTANTS FOR THE REVIEW REPORTS.

         Our accountants have provided a consent letter in relation to their
         reports on the audited financial statements for the years ended
         December 31, 2005, 2004 and 2003, which is included as Exhibit 23.1 to
         Amendment No. 1. Where their report on the review of unaudited interim
         financial information is included directly or incorporated by reference
         in a registration statement, their policy is not to provide a letter
         consenting to such inclusion or incorporation. Instead, they have
         issued an awareness letter regarding the unaudited interim financial
         information that complies with the requirements of Item 601(b)(15) of
         Regulation S-K, which is included as Exhibit 15.1 to Amendment No. 1

FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2005 -- THE ENSTAR GROUP, INC.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA, PAGE 27

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM, PAGE 30

71.      THE OPINION FOR THE PERIOD ENDED DECEMBER 31, 2003 RELIES ON THE REPORT
         OF OTHER AUDITORS IN RELATION TO THE GREEN TREE FINANCIAL STATEMENT;
         PLEASE INCLUDE THE REPORT OF THE OTHER AUDITORS AND THEIR CONSENT TO
         INCLUDE IT.

         The Green Tree report has been included in The Enstar Group, Inc.'s
         Form 10-K/A filing dated September 19, 2006. A consent from the auditor
         is included as Exhibit 23.7 of Amendment No. 1.

CONSOLIDATED STATEMENTS OF CASH FLOWS, PAGE 35

72.      PLEASE EXPLAIN TO US HOW YOU ACCOUNTED FOR THE "MINORITY INTEREST'S
         CAPITAL CONTRIBUTION IN JCF CFN, NET."

         In Note 2: Significant Accounting Policies, specifically paragraphs (a)
         and (j), Enstar disclosed the accounting for the JCF CFN entities.
         Pursuant to the guidance in FIN 46, Enstar concluded that the JCF CFN
         entities are variable interest entities and that Enstar is the primary
         beneficiary of each of these entities. Therefore, Enstar consolidated
         the JCF CFN entities.

         The minority interest holder contributed 40% of the equity, totaling
         $10.2 million, for its interest in JCF CFN and its estimated share of
         the transaction expenses. When the actual transaction expenses were
         determined the month following the closing, the minority interest
         holders received a distribution of $194,000 from JCF CFN as a
         reimbursement for overestimated transaction expenses. Therefore, the
         contribution to JCF CFN capital by the minority interest holder was
         shown in the cash flow statement net of the distribution ($10,200,000
         less the $194,000 distributed, or $10,006,000).

                                      -27-

<PAGE>

73.      PLEASE EXPLAIN TO US WHY YOU INCLUDED "DIVIDENDS AND DISTRIBUTIONS
         RECEIVED FROM PARTIALLY OWNED EQUITY AFFILIATES" WITHIN CASH FLOWS FROM
         OPERATIONS. WE NOTE THAT IN THE CASTLEWOOD FINANCIAL STATEMENTS
         APPARENTLY SIMILAR TRANSACTION ARE INCLUDED IN INVESTING ACTIVITIES.

         In Note 1: Nature of Business, Enstar states that it is engaged in the
         operation of several equity affiliates in the financial services
         industry. In Note 4: Partially Owned Equity Affiliates, Enstar
         describes its investments in the Company and B.H. Acquisition as well
         as other less significant equity method investments. Note 4 discloses
         that Enstar owns a 50% voting interest and an economic interest of
         about 33% in these entities. Through these disclosures and elsewhere in
         the Form 10-K, Enstar attempted to provide the reader with an
         understanding of the financial position, results of operations and cash
         flows of its significant equity method investments. As such, Enstar
         believed it was appropriate to include the dividends and distributions,
         all of which are returns on equity investments rather than returns of
         capital, as cash flows from operating activities.

         The Company believes that Amendment No. 1 and the responses provided
above fully address the matters contained in the Comment Letter. Please forward
copies of any further comments that you may have to the undersigned at (215)
988-2757. If you have any questions, please do not hesitate to contact the
undersigned at (215) 988-2759 or Joseph Guerriero at (609) 716-6587.

                                          Sincerely,

                                          /s/ Robert C. Juelke
                                          ----------------------
                                          Robert C. Juelke

cc:  Richard J. Harris
     John J. Oros
     Robert F. Quaintance, Esq.
     Mark Smith

                                      -28-