Dominic J. Addesso
President and Chief Financial Officer
Everest Reinsurance Holdings, Inc.
477 Martinsville Road
P. O. Box 830
Liberty Corner, NJ 07938-0830
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Re:
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Everest Reinsurance Holdings, Inc.
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Form 10-K for Fiscal Year Ended December 31, 2010
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Filed March 30, 2011
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File No. 033-71652 |
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The Company is responsible for the adequacy and accuracy of the disclosures in the filing;
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Staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and
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The Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
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1.
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Please refer to prior comments one and two. Please provide us proposed disclosure to be included in future filings required by ASC 825-10-50-28 through 50-32 for those securities where you elected the fair value option. For example it appears that you are missing the disclosure required by paragraphs 50-28(a) and (b) and 50-30(b).
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2.
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Please refer to your response to prior comment five.
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Regarding matters relating to your insurance and reinsurance business, you indicate that you consider these matters in determining your reserves for loss and loss adjustment expenses. You continue to disclose that “an adverse resolution of one or more of these items in any one quarter or fiscal year could have a material adverse effect on the Company’s results of operations in that period.” This disclosure appears to indicate there is at least a reasonable possibility that a material loss exceeding amounts already recognized may have been incurred. Please tell us how you considered SAB Topic 5.W., which appears to require additional disclosure. Please provide us revised proposed disclosure to be included in future filings.
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Regarding your statement in your response that there are no known significant pending legal issues not involving insurance or reinsurance business activity, please provide us proposed disclosure to be included in future filings to indicate, if true, that these matters are not material to your financial statements, or provide us proposed disclosure to be included in future filings to either disclose an estimate of the additional loss or range of loss or state that such an estimate cannot be made as required by ASC 450-20-50-4b.
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The contingency disclosure concerning the Company’s insurance and reinsurance business addressed the general uncertainty regarding the settlement of insurance and reinsurance claims and the potential adverse impact on the Company’s financial statements and liquidity due to unknown future litigation. The Company did not have at December 31, 2010, and currently does not have, any individual claim or reinsurance disputes that it considers nonrecurring or abnormal and has not made any judgmental adjustments to historical experience for insufficiently understood claims activity. The Company will remove this general disclosure from the contingency footnote in future filings.
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The purpose of the Company’s statement; “There are no known significant pending legal issues not involving insurance or reinsurance business activity.”, was intended to inform the readers of the financial statements that there were no known material corporate legal issues, which could materially impact future financial statements. As with any corporation, the Company is involved in miscellaneous legal issues at the corporate level. These issues are not material to the Company either individually or in the aggregate. An estimate of the amount of loss from these issues could be determined; however, the amount is not material enough to disclose. As a result, the Company will also remove this disclosure from the contingency footnote in future filings.
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