10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED: September 30, 2012 Commission file number: 1-14527

EVEREST REINSURANCE HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware	22-3263609
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

477 Martinsville Road

Post Office Box 830

Liberty Corner, New Jersey 07938-0830

(908) 604-3000

(Address, including zip code, and telephone number, including area code,

of registrant’s principal executive office)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES X NO

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

YES X NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer		Accelerated filer
Non-accelerated filer	X	Smaller reporting company
(Do not check if smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES NO X

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

	Number of Shares Outstanding
Class	At November 1, 2012
Common Shares, $0.01 par value	1,000

The Registrant meets the conditions set forth in General Instruction H (1)(a) and (b) of Form 10-Q and is therefore filing this form with the reduced disclosure format permitted by General Instruction H of Form 10-Q.

EVEREST REINSURANCE HOLDINGS, INC.

Table of Contents

Form 10-Q

Page

PART I

FINANCIAL INFORMATION

Item 1.	Financial Statements
	Consolidated Balance Sheets at September 30, 2012 (unaudited) and
		December 31, 2011	1
	Consolidated Statements of Operations and Comprehensive Income (Loss) for
		the three and nine months ended September 30, 2012 and 2011 (unaudited)	2
	Consolidated Statements of Changes in Stockholder’s Equity for the three and
		nine months ended September 30, 2012 and 2011 (unaudited)	3
	Consolidated Statements of Cash Flows for the three and nine months ended
		September 30, 2012 and 2011 (unaudited)	4
	Notes to Consolidated Interim Financial Statements (unaudited)		5
Item 2.	Management’s Discussion and Analysis of Financial Condition and
		Results of Operation	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		44
Item 4.	Controls and Procedures		44

PART II

OTHER INFORMATION

Item 1.	Legal Proceedings	44
Item 1A.	Risk Factors	44
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 3.	Defaults Upon Senior Securities	44
Item 4.	Mine Safety Disclosures	44
Item 5.	Other Information	45
Item 6.	Exhibits	45

Part I

ITEM  1.  FINANCIAL STATEMENTS

EVEREST REINSURANCE HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

	September 30,		December 31,
(Dollars in thousands, except par value per share)	2012		2011
	(unaudited)
ASSETS:
Fixed maturities - available for sale, at market value	$	5,326,118	$	5,107,028
(amortized cost: 2012, $5,060,968; 2011, $4,880,654)
Fixed maturities - available for sale, at fair value		52,217		113,606
Equity securities - available for sale, at market value (cost: 2012, $15; 2011, $15)		13		10
Equity securities - available for sale, at fair value		1,247,445		1,207,053
Short-term investments		640,698		423,663
Other invested assets (cost: 2012, $420,510; 2011, $379,342)		420,510		379,342
Other invested assets, at fair value		1,039,648		817,352
Cash		309,059		348,267
Total investments and cash		9,035,708		8,396,321
Accrued investment income		56,639		55,849
Premiums receivable		990,571		856,375
Reinsurance receivables - unaffiliated		633,893		570,128
Reinsurance receivables - affiliated		2,851,472		2,901,174
Funds held by reinsureds		153,312		176,156
Deferred acquisition costs		90,088		166,806
Prepaid reinsurance premiums		597,498		625,391
Deferred tax asset		208,090		366,490
Income taxes recoverable		16,153		39,014
Other assets		235,593		195,476
TOTAL ASSETS	$	14,869,017	$	14,349,180
LIABILITIES:
Reserve for losses and loss adjustment expenses	$	7,954,633	$	8,290,619
Unearned premium reserve		1,143,252		1,239,705
Funds held under reinsurance treaties		84,798		123,479
Losses in the course of payment		93,575		11,002
Commission reserves		32,979		40,353
Other net payable to reinsurers		894,866		629,871
5.4% Senior notes due 10/15/2014		249,894		249,858
6.6% Long term notes due 5/1/2067		238,356		238,354
Junior subordinated debt securities payable		329,897		329,897
Accrued interest on debt and borrowings		12,092		4,781
Unsettled securities payable		74,097		8,793
Other liabilities		276,651		241,075
Total liabilities		11,385,090		11,407,787
Commitments and Contingencies (Note 6)
STOCKHOLDER'S EQUITY:
Common stock, par value: $0.01; 3,000 shares authorized;
1,000 shares issued and outstanding (2012 and 2011)		-		-
Additional paid-in capital		338,478		333,416
Accumulated other comprehensive income (loss), net of deferred income tax expense
(benefit) of $116,254 at 2012 and $94,118 at 2011		215,900		174,790
Retained earnings		2,929,549		2,433,187
Total stockholder's equity		3,483,927		2,941,393
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY	$	14,869,017	$	14,349,180
The accompanying notes are an integral part of the consolidated financial statements.

1

EVEREST REINSURANCE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(Dollars in thousands)	2012			2011			2012			2011
	(unaudited)						(unaudited)
REVENUES:
Premiums earned	$	427,112		$	442,862		$	1,299,293		$	1,354,305
Net investment income		76,342			78,325			231,790			249,916
Net realized capital gains (losses):
Other-than-temporary impairments on fixed maturity securities		(486	)		(911	)		(6,627	)		(14,522	)
Other-than-temporary impairments on fixed maturity securities
transferred to other comprehensive income (loss)		-			-			-			-
Other net realized capital gains (losses)		96,429			(178,125	)		361,300			(192,222	)
Total net realized capital gains (losses)		95,943			(179,036	)		354,673			(206,744	)
Other income (expense)		425			(8,865	)		19,599			(20,401	)
Total revenues		599,822			333,286			1,905,355			1,377,076
CLAIMS AND EXPENSES:
Incurred losses and loss adjustment expenses		242,877			322,099			786,851			1,187,936
Commission, brokerage, taxes and fees		70,464			70,842			251,320			239,659
Other underwriting expenses		45,938			42,708			126,551			120,148
Corporate expenses		2,019			1,143			5,317			3,498
Interest, fee and bond issue cost amortization expense		12,682			12,706			38,061			38,083
Total claims and expenses		373,980			449,498			1,208,100			1,589,324
INCOME (LOSS) BEFORE TAXES		225,842			(116,212	)		697,255			(212,248	)
Income tax expense (benefit)		69,857			(116,473	)		200,893			(123,783	)
NET INCOME (LOSS)	$	155,985		$	261		$	496,362		$	(88,465	)
Other comprehensive income (loss), net of tax :
Unrealized appreciation (depreciation) ("URA(D)") on securities arising during the period		18,036			8,842			23,511			12,640
Less: reclassification adjustment for realized losses (gains) included in net income (loss)		261			(1,049	)		1,696			19,661
Total URA(D) on securities arising during the period		18,297			7,793			25,207			32,301
Foreign currency translation adjustments		15,301			(4,558	)		12,737			4,695
Pension adjustments		1,199			746			3,166			2,238
Total other comprehensive income (loss), net of tax		34,797			3,981			41,110			39,234
COMPREHENSIVE INCOME (LOSS)	$	190,782		$	4,242		$	537,472		$	(49,231	)
The accompanying notes are an integral part of the consolidated financial statements.

2

EVEREST REINSURANCE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF

CHANGES IN STOCKHOLDER’S EQUITY

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands, except share amounts)	2012		2011		2012		2011
	(unaudited)				(unaudited)
COMMON STOCK (shares outstanding):
Balance, beginning of period		1,000		1,000		1,000		1,000
Balance, end of period		1,000		1,000		1,000		1,000
ADDITIONAL PAID-IN CAPITAL:
Balance, beginning of period	$	336,813	$	330,990	$	333,416	$	327,767
Share-based compensation plans		1,665		1,657		5,062		4,880
Balance, end of period		338,478		332,647		338,478		332,647
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS),
NET OF DEFERRED INCOME TAXES:
Balance, beginning of period		181,103		199,219		174,790		163,966
Net increase (decrease) during the period		34,797		3,981		41,110		39,234
Balance, end of period		215,900		203,200		215,900		203,200
RETAINED EARNINGS:
Balance, beginning of period		2,773,564		2,547,282		2,433,187		2,636,008
Net income (loss)		155,985		261		496,362		(88,465	)
Balance, end of period		2,929,549		2,547,543		2,929,549		2,547,543
TOTAL STOCKHOLDER'S EQUITY, END OF PERIOD	$	3,483,927	$	3,083,390	$	3,483,927	$	3,083,390
The accompanying notes are an integral part of the consolidated financial statements.

3

EVEREST REINSURANCE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(Dollars in thousands)	2012			2011			2012			2011
	(unaudited)						(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	155,985		$	261		$	496,362		$	(88,465	)
Adjustments to reconcile net income to net cash provided by operating activities:
Decrease (increase) in premiums receivable		(233,296	)		(21,017	)		(129,749	)		(149,561	)
Decrease (increase) in funds held by reinsureds, net		2,646			(94,290	)		(14,878	)		(102,102	)
Decrease (increase) in reinsurance receivables		(39,772	)		112,376			(9,281	)		(243,523	)
Decrease (increase) in current income taxes		18,495			16,559			23,123			15,515
Decrease (increase) in deferred tax asset		22,640			(137,225	)		136,264			(122,876	)
Decrease (increase) in prepaid reinsurance premiums		(66,455	)		(33,514	)		28,866			28,649
Increase (decrease) in reserve for losses and loss adjustment expenses		(109,811	)		(96,587	)		(406,946	)		489,779
Increase (decrease) in unearned premiums		98,935			29,928			(102,067	)		(73,434	)
Increase (decrease) in other net payable to reinsurers		220,948			66,568			263,498			155,372
Change in equity adjustments in limited partnerships		(8,800	)		(12,190	)		(28,850	)		(44,544	)
Change in other assets and liabilities, net		59,520			28,444			158,864			44,148
Non-cash compensation expense		1,737			1,584			4,981			4,638
Amortization of bond premium (accrual of bond discount)		3,330			(17	)		12,939			6,897
Amortization of underwriting discount on senior notes		13			12			38			36
Net realized capital (gains) losses		(95,943	)		179,036			(354,673	)		206,744
Net cash provided by (used in) operating activities		30,172			39,928			78,491			127,273
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from fixed maturities matured/called - available for sale, at market value		273,497			262,235			648,218			525,768
Proceeds from fixed maturities matured/called - available for sale, at fair value		1,300			-			1,300			12,775
Proceeds from fixed maturities sold - available for sale, at market value		114,610			255,913			290,911			1,042,803
Proceeds from fixed maturities sold - available for sale, at fair value		11,783			12,512			72,926			62,632
Proceeds from equity securities sold - available for sale, at market value		-			-			-			27,096
Proceeds from equity securities sold - available for sale, at fair value		85,277			61,080			377,157			150,776
Distributions from other invested assets		16,130			13,487			31,513			103,262
Cost of fixed maturities acquired - available for sale, at market value		(404,009	)		(285,414	)		(1,066,080	)		(995,210	)
Cost of fixed maturities acquired - available for sale, at fair value		(1,658	)		(9,801	)		(7,164	)		(25,025	)
Cost of equity securities acquired - available for sale, at market value		-			-			-			(27,059	)
Cost of equity securities acquired - available for sale, at fair value		(107,330	)		(340,493	)		(288,218	)		(679,764	)
Cost of other invested assets acquired		(20,065	)		(2,393	)		(43,831	)		(47,471	)
Cost of other invested assets acquired, at fair value		-			-			-			(37,611	)
Cost of businesses acquired		-			-			-			(63,100	)
Net change in short-term investments		(58,681	)		29,080			(216,270	)		(18,105	)
Net change in unsettled securities transactions		33,600			(14,007	)		38,712			30,834
Net cash provided by (used in) investing activities		(55,546	)		(17,801	)		(160,826	)		62,601
CASH FLOWS FROM FINANCING ACTIVITIES:
Tax benefit from share-based compensation		(72	)		73			81			242
Revolving credit borrowings		-			(40,000	)		-			(50,000	)
Net cash provided by (used in) financing activities		(72	)		(39,927	)		81			(49,758	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH		28,772			(5,553	)		43,046			6,804
Net increase (decrease) in cash		3,326			(23,353	)		(39,208	)		146,920
Cash, beginning of period		305,733			288,365			348,267			118,092
Cash, end of period	$	309,059		$	265,012		$	309,059		$	265,012
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid (recovered)	$	27,119		$	4,149		$	36,498		$	(16,616	)
Interest paid		5,202			5,228			30,244			30,269
Non-cash transaction:
Net assets acquired and liabilities assumed from business acquisitions		-			-			-			19,130
The accompanying notes are an integral part of the consolidated financial statements.

4

NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

For the Three and Nine Months Ended September 30, 2012 and 2011

1.  GENERAL

As used in this document, “Holdings” means Everest Reinsurance Holdings, Inc., a Delaware company and direct subsidiary of Everest Underwriting Group (Ireland) Limited (“Holdings Ireland”); “Group” means Everest Re Group, Ltd. (Holdings Ireland’s parent); “Bermuda Re” means Everest Reinsurance (Bermuda), Ltd., a subsidiary of Group; “Everest Re” means Everest Reinsurance Company and its subsidiaries, a subsidiary of Holdings (unless the context otherwise requires); and the “Company” means Holdings and its subsidiaries.

2. BASIS OF PRESENTATION

The unaudited consolidated financial statements of the Company for the three and nine months ended September 30, 2012 and 2011 include all adjustments, consisting of normal recurring accruals, which, in the opinion of management, are necessary for a fair statement of the results on an interim basis.  Certain financial information, which is normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), has been omitted since it is not required for interim reporting purposes. The December 31, 2011 consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP.  The results for the three and nine months ended September 30, 2012 and 2011 are not necessarily indicative of the results for a full year.  These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the years ended December 31, 2011, 2010 and 2009 included in the Company’s most recent Form 10-K filing.

All intercompany accounts and transactions have been eliminated.

Certain reclassifications and format changes have been made to prior period amounts to conform to the current period presentation.

Application of Recently Issued Accounting Standard Changes

Intangibles-Goodwill or Other.  In September 2011, the Financial Accounting Standards Board (“FASB”) amended the authoritative guidance for disclosures on Goodwill Impairment.  The amendment allows an entity first to assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis in determining whether it is necessary to perform the two-step goodwill impairment test.  This guidance is effective for periods beginning after December 15, 2011.  The Company implemented this guidance as of January 1, 2012.

Presentation of Comprehensive Income. In June 2011, FASB issued amendments to existing guidance to provide two alternatives for the presentation of comprehensive income. Components of net income and comprehensive income can either be presented within a single, continuous financial statement or be presented in two separate but consecutive financial statements.  The Company has chosen to present the components of net income and comprehensive income in a single, continuous financial statement.  The guidance is effective for reporting periods beginning after December 15, 2011.  The Company implemented this guidance as of January 1, 2012.

Common Fair Value Measurement. In May 2011, FASB issued amendments to existing guidance to achieve common fair value measurement and disclosure requirements between GAAP and International Financial Reporting Standards. The amendments change wording used to describe many GAAP fair value measurement requirements and disclosures. FASB does not intend for the amendments to cause a change in application of fair value accounting guidance.  The guidance is effective for reporting periods beginning after December 15, 2011.  The Company implemented this guidance prospectively as of January 1, 2012.

5

Treatment of Insurance Contract Acquisition Costs. In October 2010, the FASB issued authoritative guidance for the accounting for costs associated with acquiring or renewing insurance contracts.  The guidance identifies the incremental direct costs of contract acquisition and costs directly related to acquisition activities that should be capitalized.  This guidance is effective for reporting periods beginning after December 15, 2011.  The Company implemented this guidance as of January 1, 2012 and determined that $7,215 thousand of previously deferrable acquisition costs will be expensed during 2012 and the first quarter of 2013, including $1,356 thousand and $4,727 thousand of previously deferrable acquisition costs expensed in the three and nine months ended September 30, 2012, respectively.  If the guidance had been applicable for the prior periods, the Company would have expensed $2,789 thousand and $6,160 thousand of deferrable acquisition costs during the three and nine months ended September 30, 2011, respectively.

Improving Disclosures About Fair Value Measurements.  In January 2010, the FASB amended the authoritative guidance for disclosures on fair value measurements.  Effective for interim and annual reporting periods beginning after December 15, 2009, the guidance requires a new separate disclosure for:  significant transfers in and out of Level 1 and 2 and the reasons for the transfers; and provided clarification on existing disclosures to include:  fair value measurement disclosures by class of assets and liabilities and disclosure on valuation techniques and inputs used to measure fair value that fall in either Level 2 or Level 3.  The Company implemented this guidance effective January 1, 2010.  Effective for interim and annual reporting periods beginning after December 15, 2010, the guidance requires another new separate disclosure in regards to Level 3 fair value measurements in that, the period activity will present separately information about purchases, sales, issuances and settlements.  Comparative disclosures shall be required only for periods ending after initial adoption.  The Company implemented this guidance beginning with the third quarter of 2010.

3.  INVESTMENTS

The amortized cost, market value and gross unrealized appreciation and depreciation of available for sale, fixed maturity and equity security investments, carried at market value, are as follows for the periods indicated:

	At September 30, 2012
	Amortized		Unrealized		Unrealized			Market
(Dollars in thousands)	Cost		Appreciation		Depreciation			Value
Fixed maturity securities
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	77,754	$	1,658	$	(817	)	$	78,595
Obligations of U.S. states and political subdivisions		1,275,967		90,415		(53	)		1,366,329
Corporate securities		1,342,335		65,091		(6,198	)		1,401,228
Asset-backed securities		48,695		2,228		-			50,923
Mortgage-backed securities
Commercial		45,345		8,066		(404	)		53,007
Agency residential		559,808		15,901		(541	)		575,168
Non-agency residential		2,148		357		(25	)		2,480
Foreign government securities		759,964		56,900		(4,176	)		812,688
Foreign corporate securities		948,952		46,681		(9,933	)		985,700
Total fixed maturity securities	$	5,060,968	$	287,297	$	(22,147	)	$	5,326,118
Equity securities	$	15	$	-	$	(2	)	$	13

6

	At December 31, 2011
	Amortized		Unrealized		Unrealized			Market
(Dollars in thousands)	Cost		Appreciation		Depreciation			Value
Fixed maturity securities
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	77,351	$	2,475	$	(287	)	$	79,539
Obligations of U.S. states and political subdivisions		1,558,615		102,815		(525	)		1,660,905
Corporate securities		1,200,941		45,070		(17,776	)		1,228,235
Asset-backed securities		44,351		758		(6	)		45,103
Mortgage-backed securities
Commercial		41,953		7,187		(1,266	)		47,874
Agency residential		528,946		16,209		(1,762	)		543,393
Non-agency residential		24,139		470		(320	)		24,289
Foreign government securities		733,814		57,437		(2,602	)		788,649
Foreign corporate securities		670,544		29,421		(10,924	)		689,041
Total fixed maturity securities	$	4,880,654	$	261,842	$	(35,468	)	$	5,107,028
Equity securities	$	15	$	-	$	(5	)	$	10

The $812,688 thousand of foreign government securities at September 30, 2012 included $89,412 thousand of European sovereign securities.  Approximately 48.6%, 15.1%, 11.8%, 7.3% and 5.4% of European Sovereign Securities represented securities held in the governments of France, the United Kingdom, Sweden, the Netherlands and Austria, respectively.  No other countries represented more than 5% of the European sovereign securities.  The Company held no sovereign securities of Portugal, Italy, Ireland, Greece or Spain at September 30, 2012.

In accordance with FASB guidance, the Company reclassified the non-credit portion of other-than-temporary impairments from retained earnings into accumulated other comprehensive income (loss), on April 1, 2009.  The table below presents the pre-tax cumulative unrealized appreciation (depreciation) on those corporate securities, for the periods indicated:

(Dollars in thousands)	At September 30, 2012		At December 31, 2011
Pre-tax cumulative unrealized appreciation (depreciation)	$	490	$	635

The amortized cost and market value of fixed maturity securities are shown in the following table by contractual maturity. Mortgage-backed securities are generally more likely to be prepaid than other fixed maturity securities. As the stated maturity of such securities may not be indicative of actual maturities, the totals for mortgage-backed and asset-backed securities are shown separately.

	At September 30, 2012				At December 31, 2011
	Amortized		Market		Amortized		Market
(Dollars in thousands)	Cost		Value		Cost		Value
Fixed maturity securities – available for sale
Due in one year or less	$	351,241	$	349,065	$	224,406	$	223,507
Due after one year through five years		2,272,775		2,360,911		2,055,299		2,129,437
Due after five years through ten years		977,030		1,040,976		955,253		1,009,893
Due after ten years		803,926		893,588		1,006,307		1,083,532
Asset-backed securities		48,695		50,923		44,351		45,103
Mortgage-backed securities
Commercial		45,345		53,007		41,953		47,874
Agency residential		559,808		575,168		528,946		543,393
Non-agency residential		2,148		2,480		24,139		24,289
Total fixed maturity securities	$	5,060,968	$	5,326,118	$	4,880,654	$	5,107,028

7

The changes in net unrealized appreciation (depreciation) for the Company’s investments are derived from the following sources for the periods as indicated:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(Dollars in thousands)	2012			2011			2012			2011
Increase (decrease) during the period between the market value and cost
of investments carried at market value, and deferred taxes thereon:
Fixed maturity securities	$	28,226		$	11,911		$	38,923		$	51,341
Fixed maturity securities, other-than-temporary impairment		(77	)		(137	)		(146	)		(132	)
Equity securities		-			(1	)		3			(1	)
Other invested assets		-			215			-			(1,515	)
Change in unrealized  appreciation (depreciation), pre-tax		28,149			11,988			38,780			49,693
Deferred tax benefit (expense)		(9,879	)		(4,243	)		(13,624	)		(17,438	)
Deferred tax benefit (expense), other-than-temporary impairment		27			48			51			46
Change in unrealized appreciation (depreciation),
net of deferred taxes, included in stockholder's equity	$	18,297		$	7,793		$	25,207		$	32,301

The Company frequently reviews all of its fixed maturity, available for sale securities for declines in market value and focuses its attention on securities whose fair value has fallen below 80% of their amortized cost at the time of review.  The Company then assesses whether the decline in value is temporary or other-than-temporary.  In making its assessment, the Company evaluates the current market and interest rate environment as well as specific issuer information.  Generally, a change in a security’s value caused by a change in the market, interest rate or foreign exchange environment does not constitute an other-than-temporary impairment, but rather a temporary decline in market value.  Temporary declines in market value are recorded as unrealized losses in accumulated other comprehensive income (loss).  If the Company determines that the decline is other-than-temporary and the Company does not have the intent to sell the security; and it is more likely than not that the Company will not have to sell the security before recovery of its cost basis, the carrying value of the investment is written down to fair value.  The fair value adjustment that is credit or foreign exchange related is recorded in net realized capital gains (losses) in the Company’s consolidated statements of operations and comprehensive income (loss). The fair value adjustment that is non-credit related is recorded as a component of other comprehensive income (loss), net of tax, and is included in accumulated other comprehensive income (loss) in the Company’s consolidated balance sheets.  The Company’s assessments are based on the issuers current and expected future financial position, timeliness with respect to interest and/or principal payments, speed of repayments and any applicable credit enhancements or breakeven constant default rates on mortgage-backed and asset-backed securities, as well as relevant information provided by rating agencies, investment advisors and analysts.

Retrospective adjustments are employed to recalculate the values of asset-backed securities. All of the Company’s asset-backed and mortgage-backed securities have a pass-through structure. Each acquisition lot is reviewed to recalculate the effective yield. The recalculated effective yield is used to derive a book value as if the new yield were applied at the time of acquisition. Outstanding principal factors from the time of acquisition to the adjustment date are used to calculate the prepayment history for all applicable securities. Conditional prepayment rates, computed with life to date factor histories and weighted average maturities, are used in the calculation of projected prepayments for pass-through security types.

8

The tables below display the aggregate market value and gross unrealized depreciation of fixed maturity and equity securities, by security type and contractual maturity, in each case subdivided according to length of time that individual securities had been in a continuous unrealized loss position for the periods indicated:

	Duration of Unrealized Loss at September 30, 2012 By Security Type
	Less than 12 months					Greater than 12 months					Total
			Gross					Gross					Gross
			Unrealized					Unrealized					Unrealized
(Dollars in thousands)	Market Value		Depreciation			Market Value		Depreciation			Market Value		Depreciation
Fixed maturity securities - available for sale
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	-	$	-		$	11,543	$	(817	)	$	11,543	$	(817	)
Obligations of U.S. states and political subdivisions		-		-			5,779		(53	)		5,779		(53	)
Corporate securities		56,805		(411	)		108,100		(5,787	)		164,905		(6,198	)
Asset-backed securities		-		-			-		-			-		-
Mortgage-backed securities
Commercial		-		-			10,332		(404	)		10,332		(404	)
Agency residential		74,338		(354	)		12,983		(187	)		87,321		(541	)
Non-agency residential		-		-			496		(25	)		496		(25	)
Foreign government securities		37,667		(592	)		38,281		(3,584	)		75,948		(4,176	)
Foreign corporate securities		66,424		(1,290	)		80,924		(8,643	)		147,348		(9,933	)
Total fixed maturity securities	$	235,234	$	(2,647	)	$	268,438	$	(19,500	)	$	503,672	$	(22,147	)
Equity securities		-		-			13		(2	)		13		(2	)
Total	$	235,234	$	(2,647	)	$	268,451	$	(19,502	)	$	503,685	$	(22,149	)

	Duration of Unrealized Loss at September 30, 2012 By Maturity
	Less than 12 months					Greater than 12 months					Total
			Gross					Gross					Gross
			Unrealized					Unrealized					Unrealized
(Dollars in thousands)	Market Value		Depreciation			Market Value		Depreciation			Market Value		Depreciation
Fixed maturity securities
Due in one year or less	$	12,962	$	(287	)	$	35,341	$	(5,663	)	$	48,303	$	(5,950	)
Due in one year through five years		116,020		(1,805	)		149,214		(11,175	)		265,234		(12,980	)
Due in five years through ten years		29,938		(175	)		45,936		(1,587	)		75,874		(1,762	)
Due after ten years		1,976		(26	)		14,136		(459	)		16,112		(485	)
Asset-backed securities		-		-			-		-			-		-
Mortgage-backed securities		74,338		(354	)		23,811		(616	)		98,149		(970	)
Total fixed maturity securities	$	235,234	$	(2,647	)	$	268,438	$	(19,500	)	$	503,672	$	(22,147	)

The aggregate market value and gross unrealized losses related to investments in an unrealized loss position at September 30, 2012 were $503,685 thousand and $22,149 thousand, respectively.  There were no unrealized losses on a single issuer that exceeded 0.03% of the market value of the fixed maturity securities at September 30, 2012.  In addition, as indicated on the above table, there was no significant concentration of unrealized losses in any one market sector.  The $2,647 thousand of unrealized losses related to fixed maturity securities that have been in an unrealized loss position for less than one year were comprised of domestic and foreign corporate securities, foreign government securities as well as agency residential mortgage-backed securities.  Of these unrealized losses, $2,039 thousand were related to securities that were rated investment grade by at least one nationally recognized statistical rating organization.  The $19,500 thousand of unrealized losses related to fixed maturity securities in an unrealized loss position for more than one year related primarily to domestic and foreign corporate securities and foreign government securities.  Of these unrealized losses, $17,181 thousand were related to securities that were rated investment grade by at least one nationally recognized statistical rating organization.  The non-investment grade securities with unrealized losses were mainly comprised of corporate securities, with the majority representing a large number of short duration, floating interest rate bank loan securities.  The gross unrealized depreciation for mortgage-backed securities included $25 thousand related to sub-prime and alt-A loans.  In all instances, there were no projected cash flow shortfalls to recover the full book value of the investments and the related interest obligations.  The mortgage-backed securities still have excess credit coverage and are current on interest and principal payments.

9

The Company, given the size of its investment portfolio and capital position, does not have the intent to sell these securities; and it is more likely than not that the Company will not have to sell the security before recovery of its cost basis.  In addition, all securities currently in an unrealized loss position are current with respect to principal and interest payments.

The tables below display the aggregate market value and gross unrealized depreciation of fixed maturity and equity securities, by security type and contractual maturity, in each case subdivided according to length of time that individual securities had been in a continuous unrealized loss position for the periods indicated:

	Duration of Unrealized Loss at December 31, 2011 By Security Type
	Less than 12 months					Greater than 12 months					Total
			Gross					Gross					Gross
			Unrealized					Unrealized					Unrealized
(Dollars in thousands)	Market Value		Depreciation			Market Value		Depreciation			Market Value		Depreciation
Fixed maturity securities - available for sale
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	-	$	-		$	3,452	$	(287	)	$	3,452	$	(287	)
Obligations of U.S. states and political subdivisions		-		-			7,518		(525	)		7,518		(525	)
Corporate securities		342,959		(8,449	)		75,998		(9,327	)		418,957		(17,776	)
Asset-backed securities		819		(6	)		-		-			819		(6	)
Mortgage-backed securities
Commercial		9,292		(1,266	)		-		-			9,292		(1,266	)
Agency residential		151,951		(1,695	)		7,199		(67	)		159,150		(1,762	)
Non-agency residential		41		-			20,693		(320	)		20,734		(320	)
Foreign government securities		12,777		(269	)		40,743		(2,333	)		53,520		(2,602	)
Foreign corporate securities		77,458		(2,025	)		94,182		(8,899	)		171,640		(10,924	)
Total fixed maturity securities	$	595,297	$	(13,710	)	$	249,785	$	(21,758	)	$	845,082	$	(35,468	)
Equity securities		-		-			10		(5	)		10		(5	)
Total	$	595,297	$	(13,710	)	$	249,795	$	(21,763	)	$	845,092	$	(35,473	)

	Duration of Unrealized Loss at December 31, 2011 By Maturity
	Less than 12 months					Greater than 12 months					Total
			Gross					Gross					Gross
			Unrealized					Unrealized					Unrealized
(Dollars in thousands)	Market Value		Depreciation			Market Value		Depreciation			Market Value		Depreciation
Fixed maturity securities
Due in one year or less	$	9,583	$	(59	)	$	26,204	$	(4,486	)	$	35,787	$	(4,545	)
Due in one year through five years		213,809		(4,754	)		137,972		(9,576	)		351,781		(14,330	)
Due in five years through ten years		186,061		(5,484	)		37,964		(2,391	)		224,025		(7,875	)
Due after ten years		23,741		(446	)		19,753		(4,918	)		43,494		(5,364	)
Asset-backed securities		819		(6	)		-		-			819		(6	)
Mortgage-backed securities		161,284		(2,961	)		27,892		(387	)		189,176		(3,348	)
Total fixed maturity securities	$	595,297	$	(13,710	)	$	249,785	$	(21,758	)	$	845,082	$	(35,468	)

The aggregate market value and gross unrealized losses related to investments in an unrealized loss position at December 31, 2011 were $845,092 thousand and $35,473 thousand, respectively.  There were no unrealized losses on a single issuer that exceeded 0.09% of the market value of the fixed maturity securities at December 31, 2011.  In addition, as indicated on the above table, there was no significant concentration of unrealized losses in any one market sector.  The $13,710 thousand of unrealized losses related to fixed maturity securities that have been in an unrealized loss position for less than one year were generally comprised of domestic and foreign corporate securities as well as commercial and agency residential mortgage-backed securities.  Of these unrealized losses, $5,635 thousand were related to securities that were rated investment grade by at least one nationally recognized statistical rating organization.  The $21,758 thousand of unrealized losses related to fixed maturity securities in an unrealized loss position for more than one year related primarily to domestic and foreign corporate and foreign government securities.  Of these unrealized losses, $15,880 thousand were related to securities that were rated investment grade by at least one nationally recognized statistical rating organization.  The non-investment grade securities with unrealized losses were mainly comprised of corporate securities, with the

10

majority representing a large number of short duration, floating interest rate bank loan securities.  The gross unrealized depreciation for mortgage-backed securities included $56 thousand related to sub-prime and alt-A loans.  In all instances, there were no projected cash flow shortfalls to recover the full book value of the investments and the related interest obligations.  The mortgage-backed securities still have excess credit coverage and are current on interest and principal payments.

Other invested assets, at fair value, is comprised of common shares of the Company’s ultimate parent, Group.  At September 30, 2012, the Company held 9,719,971 shares of Group representing 15.8% of the total outstanding shares.

The components of net investment income are presented in the table below for the periods indicated:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(Dollars in thousands)	2012			2011			2012			2011
Fixed maturity securities	$	55,495		$	58,248		$	164,248		$	178,006
Equity securities		8,849			8,726			29,281			20,366
Short-term investments and cash		330			296			758			890
Other invested assets
Limited partnerships		9,096			12,399			29,940			44,753
Dividends from Parent's shares		4,666			4,665			13,997			13,979
Other		1,427			(1,520	)		2,453			3,203
Total gross investment income		79,863			82,814			240,677			261,197
Interest debited (credited) and other investment expense		(3,521	)		(4,489	)		(8,887	)		(11,281	)
Total net investment income	$	76,342		$	78,325		$	231,790		$	249,916

The Company records results from limited partnership investments on the equity method of accounting with changes in value reported through net investment income. Due to the timing of receiving financial information from these partnerships, the results are generally reported on a one month or quarter lag.  If the Company determines there has been a significant decline in value of a limited partnership during this lag period, a loss will be recorded in the period in which the Company identifies the decline.

The Company had contractual commitments to invest up to an additional $71,741 thousand in limited partnerships at September 30, 2012.  These commitments will be funded when called in accordance with the partnership agreements, which have investment periods that expire, unless extended, through 2016.

11

The components of net realized capital gains (losses) are presented in the table below for the periods indicated:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(Dollars in thousands)	2012			2011			2012			2011
Fixed maturity securities, market value:
Other-than-temporary impairments	$	(486	)	$	(911	)	$	(6,627	)	$	(14,522	)
Gains (losses) from sales		85			2,699			4,018			(15,589	)
Fixed maturity securities, fair value:
Gains (losses) from sales		512			(16	)		5,539			(966	)
Gains (losses) from fair value adjustments		298			(5,014	)		1,623			(8,537	)
Equity securities, market value:
Gains (losses) from sales		-			-			-			37
Equity securities, fair value:
Gains (losses) from sales		3,154			637			23,101			2,303
Gains (losses) from fair value adjustments		58,667			(153,395	)		104,739			(115,288	)
Other invested assets, fair value:
Gains (losses) from fair value adjustments		33,729			(23,036	)		222,296			(54,181	)
Short-term investment gains (losses)		(16	)		-			(16	)		(1	)
Total net realized capital gains (losses)	$	95,943		$	(179,036	)	$	354,673		$	(206,744	)

The Company recorded as net realized capital gains (losses) in the consolidated statements of operations and comprehensive income (loss) both fair value re-measurements and write-downs in the value of securities deemed to be impaired on an other-than-temporary basis as displayed in the table above.  The Company had no other-than-temporary impaired securities where the impairment had both a credit and non-credit component.

The proceeds and split between gross gains and losses, from sales of fixed maturity and equity securities, are presented in the table below for the periods indicated:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(Dollars in thousands)	2012			2011			2012			2011
Proceeds from sales of fixed maturity securities	$	126,393		$	268,425		$	363,837		$	1,105,435
Gross gains from sales		2,704			11,572			15,371			29,154
Gross losses from sales		(2,107	)		(8,889	)		(5,814	)		(45,709	)
Proceeds from sales of equity secuities	$	85,277		$	61,080		$	377,157		$	177,872
Gross gains from sales		5,204			6,022			33,005			9,124
Gross losses from sales		(2,050	)		(5,385	)		(9,904	)		(6,784	)

12

4.  FAIR VALUE

The Company’s fixed maturity and equity securities are primarily managed by third party investment asset managers.  The investment asset managers obtain prices from nationally recognized pricing services.   These services seek to utilize market data and observations in their evaluation process.  They use pricing applications that vary by asset class and incorporate available market information and when fixed maturity securities do not trade on a daily basis the services will apply available information through processes such as benchmark curves, benchmarking of like securities, sector groupings and matrix pricing.  In addition, they use model processes, such as the Option Adjusted Spread model to develop prepayment and interest rate scenarios for securities that have prepayment features.

In limited instances where prices are not provided by pricing services or in rare instances when a manager may not agree with the pricing service, price quotes on a non-binding basis are obtained from investment brokers.  The investment asset managers do not make any changes to prices received from either the pricing services or the investment brokers.  In addition, the investment asset managers have procedures in place to review the reasonableness of the prices from the service providers and may request verification of the prices.  In addition, the Company continually performs analytical reviews of price changes and tests the prices on a random basis to an independent pricing source.   No material variances were noted during these price validation procedures.  In limited situations, where financial markets are inactive or illiquid, the Company may use its own assumptions about future cash flows and risk-adjusted discount rates to determine fair value.  The Company made no such adjustments at September 30, 2012 and December 31, 2011.

The Company internally manages a small public equity portfolio which had a fair value at September 30, 2012 of $52,009 thousand and all prices were obtained from publically published sources.

Equity securities in U.S. denominated currency are categorized as Level 1, Quoted Prices in Active Markets for Identical Assets, since the securities are actively traded on an exchange and prices are based on quoted prices from the exchange.  Equity securities traded on foreign exchanges are categorized as Level 2 due to potential foreign exchange adjustments to fair or market value.

Fixed maturity securities are generally categorized as Level 2, Significant Other Observable Inputs, since a particular security may not have traded but the pricing services are able to use valuation models with observable market inputs such as interest rate yield curves and prices for similar fixed maturity securities in terms of issuer, maturity and seniority. Valuations that are derived from techniques in which one or more of the significant inputs are unobservable (including assumptions about risk) are categorized as Level 3, Significant Unobservable Inputs.  These securities include broker priced securities.

As of September 30, 2012 and December 31, 2011, all Level 3 fixed maturity securities, were priced using single non-binding broker quotes since prices for these securities were not provided by normal pricing service companies.  The single broker quotes are provided by market makers or broker-dealers who are recognized as market participants in the markets in which they are providing the quotes.  The prices received from brokers are reviewed for reasonableness by our asset managers and management.

Other invested assets, at fair value, are categorized as Level 1, Quoted Prices in Active Markets for Identical Assets, since the securities are shares of the Company’s parent, which are actively traded on an exchange and the price is based on a quoted price.

13

The following table presents the fair value measurement levels for all assets, which the Company has recorded at fair value (fair and market value) as of the period indicated:

			Fair Value Measurement Using:
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
(Dollars in thousands)	September 30, 2012		(Level 1)		(Level 2)		(Level 3)
Assets:
Fixed maturities, market value
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	78,595	$	-	$	78,595	$	-
Obligations of U.S. States and political subdivisions		1,366,329		-		1,366,329		-
Corporate securities		1,401,228		-		1,401,228		-
Asset-backed securities		50,923		-		43,331		7,592
Mortgage-backed securities
Commercial		53,007		-		53,007		-
Agency residential		575,168		-		575,168		-
Non-agency residential		2,480		-		2,475		5
Foreign government securities		812,688		-		812,688		-
Foreign corporate securities		985,700		-		980,754		4,946
Total fixed maturities, market value		5,326,118		-		5,313,575		12,543
Fixed maturities, fair value		52,217		-		52,217		-
Equity securities, market value		13		13		-		-
Equity securities, fair value		1,247,445		1,113,526		133,919		-
Other invested assets, fair value		1,039,648		1,039,648		-		-

There were no transfers between Level 1 and Level 2 for the three and nine months ended September 30, 2012.

14

The following table presents the fair value measurement levels for all assets, which the Company has recorded at fair value (fair and market value) as of the period indicated:

			Fair Value Measurement Using:
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
(Dollars in thousands)	December 31, 2011		(Level 1)		(Level 2)		(Level 3)
Assets:
Fixed maturities, market value
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	79,539	$	-	$	79,539	$	-
Obligations of U.S. States and political subdivisions		1,660,905		-		1,660,905		-
Corporate securities		1,228,235		-		1,228,235		-
Asset-backed securities		45,103		-		29,057		16,046
Mortgage-backed securities
Commercial		47,874		-		47,874		-
Agency residential		543,393		-		543,393		-
Non-agency residential		24,289		-		24,282		7
Foreign government securities		788,649		-		788,649		-
Foreign corporate securities		689,041		-		686,505		2,536
Total fixed maturities, market value		5,107,028		-		5,088,439		18,589
Fixed maturities, fair value		113,606		-		113,606		-
Equity securities, market value		10		10		-		-
Equity securities, fair value		1,207,053		1,090,959		116,094		-
Other invested assets, fair value		817,352		817,352		-		-

The following tables present the activity under Level 3, fair value measurements using significant unobservable inputs by asset type, for the periods indicated:

	Three Months Ended September 30, 2012												Nine Months Ended September 30, 2012
	Asset-backed			Foreign			Non-agency						Asset-backed			Foreign			Non-agency
(Dollars in thousands)	Securities			Corporate			RMBS			Total			Securities			Corporate			RMBS			Total
Beginning balance	$	8,996		$	7,383		$	5		$	16,384		$	16,046		$	2,536		$	7		$	18,589
Total gains or (losses) (realized/unrealized)
Included in earnings (or changes in net assets)		56			(14	)		1			43			111			(33	)		3			81
Included in other comprehensive income (loss)		390			275			-			665			728			387			(2	)		1,113
Purchases, issuances and settlements		(61	)		(576	)		(1	)		(638	)		4,407			6,640			(3	)		11,044
Transfers in and/or (out) of Level 3		(1,789	)		(2,122	)		-			(3,911	)		(13,700	)		(4,584	)		-			(18,284	)
Ending balance	$	7,592		$	4,946		$	5		$	12,543		$	7,592		$	4,946		$	5		$	12,543
The amount of total gains or losses for the period included
in earnings (or changes in net assets) attributable to the
change in unrealized gains or losses relating to assets
still held at the reporting date	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-
(Some amounts may not reconcile due to rounding.)

15

	Three Months Ended September 30, 2011												Nine Months Ended September 30, 2011
	Asset-backed			Foreign			Non-agency						Asset-backed			Foreign			Non-agency
(Dollars in thousands)	Securities			Corporate			RMBS			Total			Securities			Corporate			RMBS			Total
Beginning balance	$	2,466		$	-		$	381		$	2,847		$	961		$	3,635		$	458		$	5,054
Total gains or (losses) (realized/unrealized)
Included in earnings (or changes in net assets)		16			(3	)		(39	)		(26	)		80			(3	)		10			87
Included in other comprehensive income (loss)		(122	)		(25	)		102			(45	)		(269	)		(25	)		54			(240	)
Purchases, issuances and settlements		(19	)		2,586			(88	)		2,479			37			2,586			(166	)		2,457
Transfers in and/or (out) of Level 3		(27	)		-			(349	)		(376	)		1,505			(3,635	)		(349	)		(2,479	)
Ending balance	$	2,314		$	2,558		$	7		$	4,879		$	2,314		$	2,558		$	7		$	4,879
The amount of total gains or losses for the period included
in earnings (or changes in net assets) attributable to the
change in unrealized gains or losses relating to assets
still held at the reporting date	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-
(Some amounts may not reconcile due to rounding.)

5.  CAPITAL TRANSACTIONS

On October 14, 2011, the Company renewed its shelf registration statement on Form S-3ASR with the SEC, as a Well Known Seasoned Issuer.  This shelf registration statement can be used by Group to register common shares, preferred shares, debt securities, warrants, share purchase contracts and share purchase units; by Holdings to register debt securities and by Everest Re Capital Trust III (“Capital Trust III”) to register trust preferred securities.

6.  CONTINGENCIES

In the ordinary course of business, the Company is involved in lawsuits, arbitrations and other formal and informal dispute resolution procedures, the outcomes of which will determine the Company’s rights and obligations under insurance and reinsurance agreements.  In some disputes, the Company seeks to enforce its rights under an agreement or to collect funds owing to it.  In other matters, the Company is resisting attempts by others to collect funds or enforce alleged rights.  These disputes arise from time to time and are ultimately resolved through both informal and formal means, including negotiated resolution, arbitration and litigation.  In all such matters, the Company believes that its positions are legally and commercially reasonable.  The Company considers the statuses of these proceedings when determining its reserves for unpaid loss and loss adjustment expenses.

Aside from litigation and arbitrations related to these insurance and reinsurance agreements, the Company is not a party to any other material litigation or arbitration.

In 1993 and prior, the Company had a business arrangement with The Prudential Insurance Company of America (“The Prudential”) wherein, for a fee, the Company accepted settled claim payment obligations of certain property and casualty insurers, and, concurrently, became the owner of the annuity or assignee of the annuity proceeds funded by the property and casualty insurers specifically to fulfill these fully settled obligations.  In these circumstances, the Company would be liable if The Prudential, which has an A+ (Superior) financial strength rating from A.M. Best Company (“A.M. Best”), was unable to make the annuity payments.  The table below presents the estimated cost to replace all such annuities for which the Company was contingently liable for the periods indicated:

(Dollars in thousands)	At September 30, 2012		At December 31, 2011
	$	144,117	$	143,447

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Prior to its 1995 initial public offering, the Company purchased annuities from an unaffiliated life insurance company with an A+ (Superior) financial strength rating from A.M. Best to settle certain claim liabilities of the company.  Should the life insurance company become unable to make the annuity payments, the Company would be liable for those claim liabilities.  The table below presents the estimated cost to replace all such annuities for which the Company was contingently liable for the periods indicated:

(Dollars in thousands)	At September 30, 2012		At December 31, 2011
	$	28,562	$	27,634

7.  OTHER COMPREHENSIVE INCOME (LOSS)

The following table presents the components of comprehensive income (loss) in the consolidated statements of operations for the periods indicated:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(Dollars in thousands)	2012			2011			2012			2011
Unrealized appreciation (depreciation) ("URA(D)") on
securities arising during the period
URA(D) of investments - temporary	$	28,226		$	12,125		$	38,926		$	49,825
URA(D) of investments - non-credit OTTI		(77	)		(137	)		(146	)		(132	)
Tax benefit (expense) from URA(D) arising during the period		(9,852	)		(4,195	)		(13,573	)		(17,392	)
Total URA(D) on securities arising during the period, net of tax		18,297			7,793			25,207			32,301
Foreign currency translation adjustments		23,540			(7,012	)		19,596			7,224
Tax benefit (expense) from foreign currency translation		(8,239	)		2,454			(6,859	)		(2,529	)
Net foreign currency translation adjustments		15,301			(4,558	)		12,737			4,695
Pension adjustments		1,844			1,148			4,871			3,443
Tax benefit (expense) on pension		(645	)		(402	)		(1,705	)		(1,205	)
Net pension adjustments		1,199			746			3,166			2,238
Other comprehensive income (loss), net of tax	$	34,797		$	3,981		$	41,110		$	39,234

The following table presents the components of accumulated other comprehensive income (loss), net of tax, in the consolidated balance sheets for the periods indicated:

	At September 30,			At December 31,
(Dollars in thousands)	2012			2011
URA(D) on securities, net of deferred taxes
Temporary	$	172,029		$	146,727
Non-credit, OTTI		318			413
Total unrealized appreciation (depreciation) on investments, net of deferred taxes		172,347			147,140
Foreign currency translation adjustments, net of deferred taxes		95,922			83,185
Pension adjustments, net of deferred taxes		(52,369	)		(55,535	)
Accumulated other comprehensive income (loss)	$	215,900		$	174,790

8.  CREDIT FACILITY

Effective August 15, 2011, the Company entered into a new three year, $150,000 thousand unsecured revolving credit facility with a syndicate of lenders, replacing the August 23, 2006 five year senior revolving credit facility.  Both the August 15, 2011 and August 23, 2006 revolving credit agreements, which have similar terms, are referred to as the “Holdings Credit Facility”.  Citibank N.A. is the administrative agent for the Holdings Credit Facility.  The Holdings Credit Facility may be used for liquidity and general corporate purposes.  The Holdings Credit Facility provides for the borrowing of up to $150,000 thousand with interest at a rate selected by Holdings equal to either, (1) the Base Rate (as defined below) or (2) a periodic fixed rate equal to the Eurodollar Rate plus an applicable margin.  The Base Rate means a fluctuating interest rate per annum in effect from time to time to be equal to the higher of (a) the rate of interest publicly announced by

17

Citibank as its base rate, (b) 0.5% per annum above the Federal Funds Rate or (c) 1% above the one month London Interbank Offered Rate (“LIBOR”), in each case plus the applicable margin.  The amount of margin and the fees payable for the Holdings Credit Facility depends upon Holdings’ senior unsecured debt rating.

The Holdings Credit Facility requires Holdings to maintain a debt to capital ratio of not greater than 0.35 to 1 and Everest Re to maintain its statutory surplus at $1,875,000 thousand plus 25% of future aggregate net income and 25% of future aggregate capital contributions after December 31, 2010, which at September 30, 2012, was $1,989,487 thousand.  As of September 30, 2012, the Company was in compliance with all Holdings Credit Facility covenants.

The following table summarizes outstanding letters of credit and/or borrowings for the periods indicated:

(Dollars in thousands)	At September 30, 2012						At December 31, 2011
Bank	Commitment		In Use		Date of Loan	Maturity/Expiry Date	Commitment		In Use		Date of Loan	Maturity/Expiry Date
Citibank Holdings Credit Facility	$	150,000	$	-			$	150,000	$	-
Total revolving credit borrowings				-						-
Total letters of credit				5,020		12/31/2012				5,020		12/31/2012
Total Citibank Holdings Credit Facility	$	150,000	$	5,020			$	150,000	$	5,020

The following table presents the costs incurred in connection with the Holdings Credit Facility for the periods indicated:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Credit facility fees incurred	$	137	$	163	$	442	$	341

9.  TRUST AGREEMENTS

A subsidiary of the Company, Everest Re, has established a trust agreement, which effectively uses Everest Re’s investments as collateral, as security for assumed losses payable to a non-affiliated ceding company.  At September 30, 2012, the total amount on deposit in the trust account was $143,779 thousand.

10.  SENIOR NOTES

The table below displays Holdings’ outstanding senior notes.  Market value is based on quoted market prices, but due to limited trading activity, these senior notes are considered Level 2 in the fair value hierarchy.

					September 30, 2012				December 31, 2011
					Consolidated Balance				Consolidated Balance
(Dollars in thousands)	Date Issued	Date Due	Principal Amounts		Sheet Amount		Market Value		Sheet Amount		Market Value
5.40% Senior notes	10/12/2004	10/15/2014	$	250,000	$	249,894	$	261,745	$	249,858	$	251,370

Interest expense incurred in connection with these senior notes is as follows for the periods indicated:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Interest expense incurred	$	3,387	$	3,386	$	10,161	$	10,159

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11.  LONG TERM SUBORDINATED NOTES

The table below displays Holdings’ outstanding fixed to floating rate long term subordinated notes.  Market value is based on quoted market prices, but due to limited trading activity, these subordinated notes are considered Level 2 in the fair value hierarchy.

Maturity Date

September 30, 2012

December 31, 2011

Original

Consolidated Balance

Consolidated Balance

(Dollars in thousands)

Date Issued

Principal Amount

Scheduled

Final

Sheet Amount

Market Value

Sheet Amount

Market Value

6.6% Long term subordinated notes

04/26/2007

$

400,000

05/15/2037

05/01/2067

$

238,356

$

244,522

$

238,354

$

210,195

During the fixed rate interest period from May 3, 2007 through May 14, 2017, interest will be at the annual rate of 6.6%, payable semi-annually in arrears on November 15 and May 15 of each year, commencing on November 15, 2007, subject to Holdings’ right to defer interest on one or more occasions for up to ten consecutive years.  During the floating rate interest period from May 15, 2017 through maturity, interest will be based on the 3 month LIBOR plus 238.5 basis points, reset quarterly, payable quarterly in arrears on February 15, May 15, August 15 and November 15 of each year, subject to Holdings’ right to defer interest on one or more occasions for up to ten consecutive years.  Deferred interest will accumulate interest at the applicable rate compounded semi-annually for periods prior to May 15, 2017, and compounded quarterly for periods from and including May 15, 2017.

Holdings can redeem the long term subordinated notes prior to May 15, 2017, in whole but not in part at the applicable redemption price, which will equal the greater of (a) 100% of the principal amount being redeemed and (b) the present value of the principal payment on May 15, 2017 and scheduled payments of interest that would have accrued from the redemption date to May 15, 2017 on the long term subordinated notes being redeemed, discounted to the redemption date on a semi-annual basis at a discount rate equal to the treasury rate plus an applicable spread of either 0.25% or 0.50%, in each case plus accrued and unpaid interest.  Holdings may redeem the long term subordinated notes on or after May 15, 2017, in whole or in part at 100% of the principal amount plus accrued and unpaid interest; however, redemption on or after the scheduled maturity date and prior to May 1, 2047 is subject to a replacement capital covenant.  This covenant is for the benefit of certain senior note holders and it mandates that Holdings receive proceeds from the sale of another subordinated debt issue, of at least similar size, before it may redeem the subordinated notes.

On March 19, 2009, Group announced the commencement of a cash tender offer for any and all of the 6.60% fixed to floating rate long term subordinated notes.  Upon expiration of the tender offer, the Company had reduced its outstanding debt by $161,441 thousand.

Interest expense incurred in connection with these long term subordinated notes is as follows for the periods indicated:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Interest expense incurred	$	3,937	$	3,937	$	11,811	$	11,811

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12.  JUNIOR SUBORDINATED DEBT SECURITIES PAYABLE

The following table displays Holdings’ outstanding junior subordinated debt securities due to Everest Re Capital Trust II (“Capital Trust II”), a wholly owned finance subsidiary of Holdings.  Fair value is primarily based on the quoted market price of the related trust preferred securities, and as such, these securities are considered Level 2 under the fair value hierarchy.

					September 30, 2012				December 31, 2011
					Consolidated Balance				Consolidated Balance
(Dollars in thousands)	Date Issued	Date Due	Amount Issued		Sheet Amount		Fair Value		Sheet Amount		Fair Value
6.20% Junior subordinated debt securities	03/29/2004	03/29/2034	$	329,897	$	329,897	$	331,177	$	329,897	$	326,313

Holdings may redeem the junior subordinated debt securities before their maturity at 100% of their principal amount plus accrued interest as of the date of redemption.  The securities may be redeemed, in whole or in part, on one or more occasions at any time on or after March 30, 2009; or at any time, in whole, but not in part, within 90 days of the occurrence and continuation of a determination that the Trust may become subject to tax or the Investment Company Act.

Interest expense incurred in connection with these junior subordinated debt securities is as follows for the periods indicated:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Interest expense incurred	$	5,113	$	5,113	$	15,340	$	15,340

Holdings considers that the mechanisms and obligations relating to the trust preferred securities, taken together, constitute a full and unconditional guarantee by Holdings of Capital Trust II’s payment obligations with respect to their trust preferred securities.

Capital Trust II will redeem all of the outstanding trust preferred securities when the junior subordinated debt securities are paid at maturity on March 29, 2034.  The Company may elect to redeem the junior subordinated debt securities, in whole or in part, at any time on or after March 30, 2009.  If such an early redemption occurs, the outstanding trust preferred securities would also be proportionately redeemed.

There are certain regulatory and contractual restrictions on the ability of Holdings’ operating subsidiaries to transfer funds to Holdings in the form of cash dividends, loans or advances.  The insurance laws of the State of Delaware, where Holdings’ direct insurance subsidiaries are domiciled, require regulatory approval before those subsidiaries can pay dividends or make loans or advances to Holdings that exceed certain statutory thresholds.  In addition, the terms of Holdings Credit Facility (discussed in Note 8) require Everest Re, Holdings’ principal insurance subsidiary, to maintain a certain statutory surplus level as measured at the end of each fiscal year.  At December 31, 2011, $2,108,692 thousand of the $2,763,171 thousand in net assets of Holdings’ consolidated subsidiaries were subject to the foregoing regulatory restrictions.

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13.  SEGMENT REPORTING

During the quarter ended September 30, 2011, the Company realigned its reporting segments to reflect recent changes in the type and volume of business written. The Company previously reported the results of Marine & Aviation, Surety, Accident and Health (“A&H”) Reinsurance and A&H Primary operations as a separate segment—Specialty Underwriting.  The A&H primary business, which is a relatively new line of business for the Company, has increased significantly, representing approximately 2% of premiums earned and is projected to continue to grow.  The A&H primary business is better aligned with the Insurance reporting segment based on the similarities of this business with those businesses already reflected in the Insurance segment.  The other operating units included in the Specialty Underwriting segment would have encompassed less than 5% of the Company’s premiums earned and their volume is projected to remain approximately 6%.  As a result of the size of these remaining operating units and their similarity to the business reported within U.S. Reinsurance, they have been reclassified to the U.S. Reinsurance segment.  There has been no change to the International reporting segment.  The Company has restated all segment information for prior years to conform to the new reporting segment structure.

The U.S. Reinsurance operation writes property and casualty reinsurance and specialty lines of business, including Marine, Aviation, Surety and A&H business, on both a treaty and facultative basis, through reinsurance brokers, as well as directly with ceding companies primarily within the U.S.  The International operation writes non-U.S. property and casualty reinsurance through Everest Re’s branches in Canada, Singapore and through offices in Brazil, Miami and New Jersey.  The Insurance operation writes property and casualty insurance, including medical stop loss insurance, directly and through general agents, brokers and surplus lines brokers within the U.S. and Canada.

These segments are managed independently, but conform with corporate guidelines with respect to pricing, risk management, control of aggregate catastrophe exposures, capital, investments and support operations.  Management generally monitors and evaluates the financial performance of these operating segments based upon their underwriting results.

Underwriting results include earned premium less losses and LAE incurred, commission and brokerage expenses and other underwriting expenses.  Underwriting results are measured using ratios, in particular loss, commission and brokerage and other underwriting expense ratios, which, respectively, divide incurred losses, commissions and brokerage and other underwriting expenses by premiums earned.

The Company does not maintain separate balance sheet data for its operating segments.  Accordingly, the Company does not review and evaluate the financial results of its operating segments based upon balance sheet data.

	Three Months Ended				Nine Months Ended
U.S. Reinsurance	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Gross written premiums	$	433,494	$	360,833	$	938,444	$	947,155
Net written premiums		219,884		167,469		475,271		486,032
Premiums earned	$	181,396	$	167,530	$	529,409	$	512,104
Incurred losses and LAE		108,153		97,197		321,397		371,638
Commission and brokerage		40,092		23,298		139,920		106,123
Other underwriting expenses		12,766		10,843		33,541		30,621
Underwriting gain (loss)	$	20,385	$	36,192	$	34,551	$	3,722

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	Three Months Ended				Nine Months Ended
International	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Gross written premiums	$	248,459	$	326,053	$	878,637	$	923,649
Net written premiums		105,550		158,038		402,078		457,663
Premiums earned	$	121,611	$	151,050	$	426,419	$	479,989
Incurred losses and LAE		29,309		104,570		191,837		514,260
Commission and brokerage		19,692		35,686		88,432		105,755
Other underwriting expenses		8,246		7,549		21,532		20,938
Underwriting gain (loss)	$	64,364	$	3,245	$	124,618	$	(160,964	)

	Three Months Ended						Nine Months Ended
Insurance	September 30,						September 30,
(Dollars in thousands)	2012			2011			2012			2011
Gross written premiums	$	328,930		$	236,294		$	783,872		$	750,283
Net written premiums		133,432			114,328			348,328			366,223
Premiums earned	$	124,105		$	124,282		$	343,465		$	362,212
Incurred losses and LAE		105,415			120,332			273,617			302,038
Commission and brokerage		10,680			11,858			22,968			27,781
Other underwriting expenses		24,926			24,316			71,478			68,589
Underwriting gain (loss)	$	(16,916	)	$	(32,224	)	$	(24,598	)	$	(36,196	)

The following table reconciles the underwriting results for the operating segments to income (loss) before taxes as reported in the consolidated statements of operations and comprehensive income (loss) for the periods indicated:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(Dollars in thousands)	2012			2011			2012			2011
Underwriting gain (loss)	$	67,833		$	7,213		$	134,571		$	(193,438	)
Net investment income		76,342			78,325			231,790			249,916
Net realized capital gains (losses)		95,943			(179,036	)		354,673			(206,744	)
Corporate expense		(2,019	)		(1,143	)		(5,317	)		(3,498	)
Interest, fee and bond issue cost amortization expense		(12,682	)		(12,706	)		(38,061	)		(38,083	)
Other income (expense)		425			(8,865	)		19,599			(20,401	)
Income (loss) before taxes	$	225,842		$	(116,212	)	$	697,255		$	(212,248	)

The Company produces business in the U.S. and internationally.  The net income deriving from assets residing in the individual foreign countries in which the Company writes business are not identifiable in the Company’s financial records.  Based on gross written premium, the table below presents the largest country, other than the U.S., in which the Company writes business, for the periods indicated:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Canada	$	33,891	$	73,543	$	109,166	$	156,727

No other country represented more than 5% of the Company’s revenues.

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14.  RELATED-PARTY TRANSACTIONS

Parent

Group’s Board of Directors approved an amended share repurchase program authorizing Group and/or its subsidiary Holdings to purchase Group’s common shares through open market transactions, privately negotiated transactions or both.  The table below represents the amendments to the share repurchase program for the common shares approved for repurchase.

	Common Shares
	Authorized for
Amendment Date	Repurchase
(Dollars in thousands)
09/21/2004	$	5,000,000
07/21/2008		5,000,000
02/24/2010		5,000,000
02/22/2012		5,000,000
	$	20,000,000

As of September 30, 2012, Holdings held 9,719,971 common shares of Group, which it had purchased in the open market between February 1, 2007 and March 8, 2011.  The table below represents the total purchase price for these common shares purchased.

(Dollars in thousands)
Total purchase price	$	835,371

Holdings reports these purchases as other invested assets, fair value, in the consolidated balance sheets with changes in fair value re-measurement recorded in net realized capital gains (losses) in the consolidated statements of operations and comprehensive income (loss).  The following table presents the dividends received on these common shares that are reported as net investment income in the consolidated statements of operations and comprehensive income (loss) for the period indicated.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Dividends received	$	4,666	$	4,665	$	13,997	$	13,979

Outside Directors

During the normal course of business, the Company, through its affiliates, engages in insurance and brokerage and commission business transactions, with companies controlled by or affiliated with one or more of Group’s outside directors.  Such transactions, individually and in the aggregate, are not material to the Company’s financial condition, results of operation and cash flows.

Affiliated Companies

During the fourth quarter of 2011, the Company sold its subsidiaries, Everest Insurance Company of Canada (“Everest Canada”) and Premiere Insurance Underwriting Services (“Premiere”), to an affiliated company, Holdings Ireland.  Holdings Ireland is a direct subsidiary of Group, the Company’s ultimate parent.  The Company sold the subsidiaries to Holdings Ireland for $61,005 thousand, which was the book value of the subsidiaries as of September 30, 2011.

Everest Global Services, Inc. (“Global Services”), an affiliate of Holdings, provides centralized management and home office services, through a management agreement, to Holdings and other affiliated companies within Holdings’ consolidated structure.  Services provided by Everest Global include executive managerial services, legal services, actuarial services, accounting services, information technology services and others.

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The following table presents the expenses incurred by Holdings from services provided by Everest Global for the periods indicated.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Expenses incurred	$	20,700	$	16,537	$	57,073	$	46,984

Affiliates

The table below represents affiliated quota share reinsurance agreements ("whole account quota share") for all new and renewal business for the indicated coverage period:

(Dollars in thousands)
		Percent			Assuming		Single			Aggregate
Coverage Period	Ceding Company	Ceded			Company	Type of Business	Occurrence Limit			Limit
01/01/2002-12/31/2002	Everest Re		20.0	%	Bermuda Re	property / casualty business	$	-		$	-
01/01/2003-12/31/2003	Everest Re		25.0	%	Bermuda Re	property / casualty business		-			-
01/01/2004-12/31/2005	Everest Re		22.5	%	Bermuda Re	property / casualty business		-			-
	Everest Re		2.5	%	Everest International	property / casualty business		-			-
01/01/2006-12/31/2006	Everest Re		18.0	%	Bermuda Re	property business		125,000	(1)		-
	Everest Re		2.0	%	Everest International	property business		-			-
01/01/2006-12/31/2007	Everest Re		31.5	%	Bermuda Re	casualty business		-			-
	Everest Re		3.5	%	Everest International	casualty business		-			-
01/01/2007-12/31/2007	Everest Re		22.5	%	Bermuda Re	property business		130,000	(1)		-
	Everest Re		2.5	%	Everest International	property business		-			-
01/01/2008-12/31/2008	Everest Re		36.0	%	Bermuda Re	property / casualty business		130,000	(1)		275,000	(2)
	Everest Re		4.0	%	Everest International	property / casualty business		-			-
01/01/2009-12/31/2009	Everest Re		36.0	%	Bermuda Re	property / casualty business		150,000	(1)		325,000	(2)
	Everest Re		8.0	%	Everest International	property / casualty business		-			-
01/01/2010-12/31/2010	Everest Re		44.0	%	Bermuda Re	property / casualty business		150,000			325,000
01/01/2011-12/31/2011	Everest Re		50.0	%	Bermuda Re	property / casualty business		150,000			300,000
01/01/2012	Everest Re		50.0	%	Bermuda Re	property / casualty business		100,000			200,000
01/01/2003-12/31/2006	Everest Re- Canadian Branch		50.0	%	Bermuda Re	property business		-			-
01/01/2007-12/31/2009	Everest Re- Canadian Branch		60.0	%	Bermuda Re	property business		-			-
01/01/2010-12/31/2010	Everest Re- Canadian Branch		60.0	%	Bermuda Re	property business		350,000	(3)		-
01/01/2011-12/31/2011	Everest Re- Canadian Branch		60.0	%	Bermuda Re	property business		350,000	(3)		-
01/01/2012	Everest Re- Canadian Branch		75.0	%	Bermuda Re	property / casualty business		206,250	(3)		412,500	(3)
01/01/2012	Everest Canada		80.0	%	Everest Re- Canadian Branch	property business		-			-
(1) The single occurance limit is applied before the loss cessions to either Bermuda Re or Everest International.
(2) The aggregate limit is applied before the loss cessions to either Bermuda Re or Everest International.
(3) Amounts shown are Canadian dollars.

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For premiums earned and losses incurred for the period January 1, 2002 through December 31, 2002, Everest Re, Everest National Insurance Company and Everest Security Insurance Company entered into an Excess of Loss Reinsurance Agreement with Bermuda Re, covering workers’ compensation losses occurring on and after January 1, 2002, as respect to new, renewal and in force policies effective on that date through December 31, 2002.  The table below represents Bermuda Re's liability limits for any losses per one occurrence.

	Liability Limits
(Dollars in thousands)	Exceeding		Not to Exceed
Losses per one occurrence	$	100,000	$	150,000

The table below represents loss portfolio transfer reinsurance agreements whereby net insurance exposures and reserves were transferred to an affiliate.

(Dollars in thousands)
Effective	Transferring	Assuming	% of Business or			Covered Period
Date	Company	Company	Amount of Transfer			of Transfer
09/19/2000	Mt. McKinley	Bermuda Re		100	%	All years
10/01/2001	Everest Re  (Belgium Branch)	Bermuda Re		100	%	All years
10/01/2008	Everest Re	Bermuda Re	$	747,022		01/01/2002-12/31/2007

The following tables summarize the premiums and losses ceded by the Company to Bermuda Re and Everest International, respectively, and premiums and losses assumed by the Company from Everest Canada for the periods indicated:

	Three Months Ended				Nine Months Ended
Bermuda Re	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Ceded written premiums	$	448,656	$	445,601	$	1,188,944	$	1,195,023
Ceded earned premiums		412,390		398,561		1,237,883		1,158,961
Ceded losses and LAE (a)		263,990		238,405		732,170		1,023,482

	Three Months Ended					Nine Months Ended
Everest International	September 30,					September 30,
(Dollars in thousands)	2012		2011			2012			2011
Ceded written premiums	$	361	$	31		$	1,055		$	670
Ceded earned premiums		583		2,448			2,550			16,489
Ceded losses and LAE		832		(1,005	)		(744	)		5,908

	Three Months Ended				Nine Months Ended
Everest Canada	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Assumed written premiums	$	4,170	$	-	$	12,813	$	-
Assumed earned premiums		3,963		-		11,329		-
Assumed losses and LAE		2,378		-		6,798		-

(a) Ceded losses and LAE include the Mt. McKinley loss portfolio transfer that constitutes losses ceded under retroactive reinsurance and therefore, in accordance with FASB guidance, a deferred gain on retroactive reinsurance is reflected in other expenses on the consolidated statements of operations and comprehensive income (loss).

Everest Re sold net assets of its UK branch to Bermuda Re and provided Bermuda Re with a reserve indemnity agreement allowing for indemnity payments of up to 90% of ₤25.0 million of the excess of 2002 and prior reserves, provided that any recognition of profit from the reserves for 2002 and prior underwriting years is taken into account.  The limit available under this agreement was fully exhausted at December 31, 2004.

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15. INCOME TAXES

The Company is domiciled in the United States and has subsidiaries domiciled within the United States with significant branches in Canada and Singapore.  The Company’s non-U.S. branches are subject to income taxation at varying rates in their respective domiciles.

The Company generally will use the estimated annual effective tax rate approach for calculating its tax provision for interim periods as prescribed by ASC 740-270, Interim Reporting.  Under the estimated annual effective tax rate approach, the estimated annual effective tax rate is applied to the interim year-to-date pre-tax income to determine the income tax expense or benefit for the year-to-date period.  The tax expense or benefit for a quarter represents the difference between the year-to-date tax expense or benefit for the current year-to-date period less such amount for the immediately preceding year-to-date period.  Management considers the impact of all known events in its estimation of the Company’s annual pre-tax income and effective tax rate.

During the third quarter of 2012, the Internal Revenue Service completed its audit of the Company for the 2007 and 2008 tax years.  At the conclusion of the audit, the Company paid additional federal income taxes of $12,747 thousand plus interest of $1,702 thousand.  The additional tax liability resulted primarily from adjustments to the timing of the Company’s utilization of foreign tax credits and therefore, including interest but net of other permanent benefit adjustments, resulted in only $752 thousand of additional income tax expense.  Conversely, also as a result of closing the IRS audit, the Company was able to take down its reserve for uncertain tax positions by $9,657 thousand and related interest by $1,567 thousand, resulting in an income tax benefit of $11,223 thousand.

During the first and second quarters of 2012, the Company had identified understatements in its Deferred tax asset account of $21,674 thousand.  The understatements resulted from differences between filed and recorded amounts that had accumulated over several prior periods. The Company corrected these understatements in its first and second quarter financial statements, resulting in an additional $21,674 thousand income tax benefit included in the income tax expense (benefit) caption in the Consolidated Statements of Operations and Comprehensive Income (Loss) and increased net income for the same amount.  The Company also increased its Deferred tax asset in its Consolidated Balance Sheets by $21,674 thousand.  The Company believes that the out of period adjustments are immaterial to its 2012 quarterly financial statements and to all prior periods.  As such, the Company has not restated any prior period amounts.

16.  ACQUISITIONS

During the first quarter of 2011, the Company made several acquisitions to expand its domestic and Canadian insurance operations.  Below are descriptions of the transactions.

On January 2,2011, the Company acquired the entire business and operations of Heartland Crop Insurance, Inc. (“Heartland”) of Topeka, Kansas for $55,000 thousand in cash, plus contingent payments in future periods based upon achievement of performance targets. Heartland is a managing general agent specializing in crop insurance.

On January 28, 2011, the Company acquired the entire business and operations of Premiere of Toronto, Canada.  Premiere is a managing general agent specializing in entertainment and sports and leisure risks.  On January 31, 2011, the Company acquired the renewal rights and operations of the financial lines business of Executive Risk Insurance Services, Ltd. (“Executive Risk”) of Toronto, Canada. The financial lines business of Executive Risk mainly underwrites Directors and Officers Liability, Fidelity, and Errors and Omissions Liability.

Overall, the Company recorded $35,068 thousand of goodwill and $26,903 thousand of intangible assets related to these acquisitions, which are reported as part of other assets within the consolidated balance sheets.  All intangible assets recorded as part of these acquisitions will be amortized on a straight line basis over seven years.

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17. SUBSEQUENT EVENTS

In October 2012, Hurricane Sandy severely impacted the Northeastern United States.  Due to the recentness of this event, the Company is unable to estimate the amount of losses at this time.  However, the Company anticipates that this event will adversely impact fourth quarter 2012 and full year 2012 financial statements.

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ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

Industry Conditions.

The worldwide reinsurance and insurance businesses are highly competitive, as well as cyclical by product and market.  As such, financial results tend to fluctuate with periods of constrained availability, high rates and strong profits followed by periods of abundant capacity, low rates and constrained profitability.  Competition in the types of reinsurance and insurance business that we underwrite is based on many factors, including the perceived overall financial strength of the reinsurer or insurer, ratings of the reinsurer or insurer by A.M. Best and/or Standard & Poor’s, underwriting expertise, the jurisdictions where the reinsurer or insurer is licensed or otherwise authorized, capacity and coverages offered, premiums charged, other terms and conditions of the reinsurance and insurance business offered, services offered, speed of claims payment and reputation and experience in lines written.  Furthermore, the market impact from these competitive factors related to reinsurance and insurance is generally not consistent across lines of business, domestic and international geographical areas and distribution channels.

We compete in the U.S. and international reinsurance and insurance markets with numerous global competitors.  Our competitors include independent reinsurance and insurance companies, subsidiaries or affiliates of established worldwide insurance companies, reinsurance departments of certain insurance companies and domestic and international underwriting operations, including underwriting syndicates at Lloyd’s.  Some of these competitors have greater financial resources than we do and have established long term and continuing business relationships, which can be a significant competitive advantage.  In addition, the lack of strong barriers to entry into the reinsurance business and the potential for securitization of reinsurance and insurance risks through capital markets provide additional sources of potential reinsurance and insurance capacity and competition.

Worldwide insurance and reinsurance market conditions continued to be very competitive, particularly in the casualty lines of business.  Generally, there was ample insurance and reinsurance capacity relative to demand.  Competition and its effect on rates, terms and conditions vary widely by market and coverage yet continued to be most prevalent in the U.S. casualty insurance and reinsurance markets.

However, during 2011, the industry experienced significant losses from Australian floods, the New Zealand earthquake, the earthquake and tsunami in Japan, storms in the U.S, and the Thailand floods.  It is too early to determine the longer term impact on market conditions as a result of these events.  While there have been meaningful rate increases for catastrophe coverages in some global catastrophe prone regions, particularly areas impacted by these losses, whether the magnitude of these losses is sufficient to increase rates and improve market conditions for other lines of business remains to be seen.

Overall, we believe that current marketplace conditions, particularly for catastrophe coverages, provide profit opportunities for us given our strong ratings, distribution system, reputation and expertise.  We continue to employ our strategy of targeting business that offers the greatest profit potential, while maintaining balance and diversification in our overall portfolio.

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Financial Summary.

We monitor and evaluate our overall performance based upon financial results.  The following table displays a summary of the consolidated net income (loss), ratios and stockholder’s equity for the periods indicated:

	Three Months Ended						Percentage			Nine Months Ended						Percentage
	September 30,						Increase/			September 30,						Increase/
(Dollars in millions)	2012			2011			(Decrease)			2012			2011			(Decrease)
Gross written premiums	$	1,010.9		$	923.2			9.5	%	$	2,601.0		$	2,621.1			-0.8	%
Net written premiums		458.9			439.8			4.3	%		1,225.7			1,309.9			-6.4	%
REVENUES:
Premiums earned	$	427.1		$	442.9			-3.6	%	$	1,299.3		$	1,354.3			-4.1	%
Net investment income		76.3			78.3			-2.5	%		231.8			249.9			-7.3	%
Net realized capital gains (losses)		95.9			(179.0	)		-153.6	%		354.7			(206.7	)	NM
Other income (expense)		0.4			(8.9	)		-104.8	%		19.6			(20.4	)		-196.1	%
Total revenues		599.8			333.3			80.0	%		1,905.4			1,377.1			38.4	%
CLAIMS AND EXPENSES:
Incurred losses and loss adjustment expenses		242.9			322.1			-24.6	%		786.9			1,187.9			-33.8	%
Commission, brokerage, taxes and fees		70.5			70.8			-0.5	%		251.3			239.7			4.9	%
Other underwriting expenses		45.9			42.7			7.6	%		126.6			120.1			5.3	%
Corporate expense		2.0			1.1			76.6	%		5.3			3.5			52.0	%
Interest, fee and bond issue cost amortization expense		12.7			12.7			-0.2	%		38.1			38.1			-0.1	%
Total claims and expenses		374.0			449.5			-16.8	%		1,208.1			1,589.3			-24.0	%
INCOME (LOSS) BEFORE TAXES		225.8			(116.2	)	NM				697.3			(212.2	)	NM
Income tax expense (benefit)		69.9			(116.5	)		-160.0	%		200.9			(123.8	)	NM
NET INCOME (LOSS)	$	156.0		$	0.3		NM			$	496.4		$	(88.5	)	NM
RATIOS:							Point Change									Point Change
Loss ratio		56.9	%		72.7	%		(15.8	)		60.6	%		87.7	%		(27.1	)
Commission and brokerage ratio		16.5	%		16.0	%		0.5			19.3	%		17.7	%		1.6
Other underwriting expense ratio		10.7	%		9.7	%		1.0			9.7	%		8.9	%		0.8
Combined ratio		84.1	%		98.4	%		(14.3	)		89.6	%		114.3	%		(24.7	)
										At			At			Percentage
										September 30,			December 31,			Increase/
(Dollars in millions)											2012			2011		(Decrease)
Balance sheet data:
Total investments and cash										$	9,035.7		$	8,396.3			7.6	%
Total assets											14,869.0			14,349.2			3.6	%
Loss and loss adjustment expense reserves											7,954.6			8,290.6			-4.1	%
Total debt											818.1			818.1			0.0	%
Total liabilities											11,385.1			11,407.8			-0.2	%
Stockholder's equity											3,483.9			2,941.4			18.4	%
(NM, not meaningful)
(Some amounts may not reconcile due to rounding.)

Revenues.

Premiums.  Gross written premiums increased by 9.5% to $1,010.9 million for the three months ended September 30, 2012 compared to $923.2 million for the three months ended September 30, 2011, reflecting a $92.6 million increase in our insurance business, partially offset by a $4.9 million decrease in our reinsurance business.  Gross written premiums decreased by 0.8% to $2,601.0 million for the nine months ended September 30, 2012 compared to $2,621.1 million for the nine months ended September 30, 2011, reflecting a $53.7 million decrease in our reinsurance business, partially offset by a $33.6 million increase in our insurance business.  The decreases in reinsurance premiums were primarily due to the non-renewal of a large Florida quota share reinsurance contract, partially offset by increases in new business and rate increases on renewals, particularly for catastrophe exposed contracts.  The increase in insurance

29

premiums was primarily due to the growth in crop and primary medical stop loss insurance, partially offset by the termination and runoff of several large casualty programs.

Net written premiums increased by 4.3% to $458.9 million for the three months ended September 30, 2012 from $439.8 million for the three months ended September 30, 2011 and decreased by 6.4% to $1,225.7 million for the nine months ended September 30, 2012 from $1,309.9 million for the nine months ended September 30, 2011. The variance between the changes in gross and net written premiums was primarily attributable to the growth in the crop business, for which the Company uses a higher level of reinsurance.  Premiums earned decreased by 3.6% to $427.1 million for the three months ended September 30, 2012 from $442.9 million for the three months ended September 30, 2011 and decreased by 4.1% to $1,299.3 million for the nine months ended September 30, 2012 from $1,354.3 million for the nine months ended September 30, 2011.  The fluctuations in premiums earned in comparison to net written premiums were primarily attributable to changes in the mix of business, particularly crop insurance which has a different premiums earning pattern.

Net Investment Income.  Net investment income decreased by 2.5% to $76.3 million for the three months ended September 30, 2012 compared with net investment income of $78.3 million for the three months ended September 30, 2011 and decreased by 7.3% to $231.8 million for the nine months ended September 30, 2012 compared with net investment income of $249.9 million for the nine months ended September 30, 2011, primarily as a result of a decrease in investment income from our limited partnership investments and lower reinvestment rates over the past several years.  Net pre-tax investment income, as a percentage of average invested assets was 3.7% for the three months ended September 30, 2012 compared to 3.9% for the three months ended September 30, 2011 and was 3.8% for the nine months ended September 30, 2012 compared to 4.1% for the nine months ended September 30, 2011.  The declines in these yields were primarily the result of fluctuations in our limited partnership income and lower reinvestment rates for the fixed income portfolio.

Net Realized Capital Gains (Losses).  Net realized capital gains were $95.9 million and net realized capital losses were $179.0 million for the three months ended September 30, 2012 and 2011, respectively.  Of the $95.9 million, there were $92.7 million of gains from fair value re-measurements and $3.8 million of net realized capital losses from sales on our fixed maturity and equity securities, partially offset by $0.5 million of other-than-temporary impairments on our available for sale fixed maturity securities.  The net realized capital losses of $179.0 million for the three months ended September 30, 2011 were the result of $181.5 million of losses from fair value re-measurements and $0.9 million of other-than-temporary impairments on our available for sale fixed maturity securities, which were partially offset by $3.3 million of net realized capital gains from sales on our fixed maturity and equity securities.

Net realized capital gains were $354.7 million and net realized capital losses were $206.7 million for the nine months ended September 30, 2012 and 2011, respectively.  Of the $354.7 million, there were $328.7 million of gains from fair value re-measurements and $32.7 million of net realized capital gains from sales on our fixed maturity and equity securities, partially offset by $6.6 million of other-than-temporary impairments on our available for sale fixed maturity securities.  The net realized capital losses of $206.7 million for the nine months ended September 30, 2011 were the result of $178.0 million of losses from fair value re-measurements, $14.5 million of other-than-temporary impairments on our available for sale fixed maturity securities and $14.2 million of net realized capital losses from sales on our fixed maturity and equity securities.

Other Income (Expense).  We recorded other income of $0.4 million and $19.6 million for the three and nine months ended September 30, 2012, respectively.  We recorded other expense of $8.9 million and $20.4 million for the three and nine months ended September 30, 2011, respectively.  The changes were primarily due to fluctuations in currency exchange rates for the corresponding periods and fluctuations in the amortization of deferred gains on retroactive reinsurance agreements with affiliates.

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Claims and Expenses.

Incurred Losses and Loss Adjustment Expenses.  The following tables present our incurred losses and loss adjustment expenses (“LAE”) for the periods indicated.

	Three Months Ended September 30,
	Current			Ratio %/				Prior			Ratio %/				Total			Ratio %/
(Dollars in millions)	Year			Pt Change				Years			Pt Change				Incurred			Pt Change
2012
Attritional (a)	$	236.8			55.5	%		$	(4.0	)		-0.9	%		$	232.8			54.6	%
Catastrophes		12.5			2.9	%			(2.4	)		-0.6	%			10.1			2.3	%
A&E		-			0.0	%			-			0.0	%			-			0.0	%
Total	$	249.3			58.4	%		$	(6.4	)		-1.5	%		$	242.9			56.9	%
2011
Attritional (a)	$	244.4			55.2	%		$	6.6			1.5	%		$	251.0			56.7	%
Catastrophes		70.5			15.9	%			0.6			0.1	%			71.1			16.0	%
A&E		-			0.0	%			-			0.0	%			-			0.0	%
Total	$	314.9			71.1	%		$	7.2			1.6	%		$	322.1			72.7	%
Variance 2012/2011
Attritional (a)	$	(7.6	)		0.3		pts	$	(10.6	)		(2.4	)	pts	$	(18.2	)		(2.1	)	pts
Catastrophes		(58.0	)		(13.0	)	pts		(3.0	)		(0.7	)	pts		(61.0	)		(13.7	)	pts
A&E		-			-		pts		-			-		pts		-			-		pts
Total	$	(65.6	)		(12.7	)	pts	$	(13.6	)		(3.1	)	pts	$	(79.2	)		(15.8	)	pts

	Nine Months Ended September 30,
	Current			Ratio %/				Prior			Ratio %/				Total			Ratio %/
(Dollars in millions)	Year			Pt Change				Years			Pt Change				Incurred			Pt Change
2012
Attritional (a)	$	738.3			56.9	%		$	11.9			0.9	%		$	750.2			57.8	%
Catastrophes		42.5			3.3	%			(5.9	)		-0.5	%			36.6			2.8	%
A&E		-			0.0	%			0.1			0.0	%			0.1			0.0	%
Total	$	780.8			60.2	%		$	6.1			0.4	%		$	786.9			60.6	%
2011
Attritional (a)	$	752.5			55.5	%		$	(11.4	)		-0.8	%		$	741.1			54.7	%
Catastrophes		435.5			32.2	%			11.3			0.8	%			446.8			33.0	%
A&E		-			0.0	%			-			0.0	%			-			0.0	%
Total	$	1,188.0			87.7	%		$	(0.1	)		0.0	%		$	1,187.9			87.7	%
Variance 2012/2011
Attritional (a)	$	(14.2	)		1.4		pts	$	23.3			1.7		pts	$	9.1			3.1		pts
Catastrophes		(393.0	)		(28.9	)	pts		(17.2	)		(1.3	)	pts		(410.2	)		(30.2	)	pts
A&E		-			-		pts		0.1			-		pts		0.1			-		pts
Total	$	(407.2	)		(27.5	)	pts	$	6.2			0.4		pts	$	(401.0	)		(27.1	)	pts
(a) Attritional losses exclude catastrophe and Asbestos and Environmental ("A&E") losses.
(Some amounts may not reconcile due to rounding.)

Incurred losses and LAE decreased by 24.6% to $242.9 million, representing 15.8 loss ratio points for the three months ended September 30, 2012 compared to $322.1 million for the three months ended September 30, 2011.  Current year catastrophe losses were lower by $58.0 million, or 13.0 points, period over period.  The $12.5 million of current year catastrophe losses for 2012 related to Hurricane Isaac.  The $70.5 million of current year catastrophe losses for 2011 related primarily to the 2011 Japanese earthquake and tsunami ($50.2 million) and Hurricane Irene ($15.9 million).  Attritional losses were lower by $18.2 million, or 2.1 loss ratio points, primarily due to the impact of changes in the mix of business and from year over year cessions under our affiliated quota share agreements resulting from changes in ceding percentages.

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Incurred losses and LAE decreased by 33.8% to $786.9 million, representing 27.1 loss ratio points for the nine months ended September 30, 2012 compared to $1,187.9 million for the nine months ended September 30, 2011. The decline was primarily driven by current year catastrophe losses which were lower by $393.0 million, or 28.9 points, period over period.  The $42.5 million of current year catastrophe losses for 2012 related to U.S. storm losses ($30.0 million) and Hurricane Isaac ($12.5 million).  The $435.5 million of current year catastrophe losses for 2011 related primarily to the Japanese earthquake and tsunami ($242.5 million), the 2011 New Zealand earthquake ($110.3 million), the 2011 Australian floods ($28.6 million), U.S. Storms ($26.6 million) and Hurricane Irene ($15.9 million).

Commission, Brokerage, Taxes and Fees.  Commission, brokerage, taxes and fees decreased slightly to $70.5 million for the three months ended September 30, 2012 compared to $70.8 million for the three months ended September 30, 2011, and increased by 4.9% to $251.3 million for the nine months ended September 30, 2012 compared to $239.7 million for the nine months ended September 30, 2011.  The nine month increase is due primarily to the one-time effect of the non-renewal of the Florida quota share contract and the adoption of new accounting standards concerning the accounting for acquisition costs, which is increasing expenses in 2012.

Other Underwriting Expenses.  Other underwriting expenses increased to $45.9 million from $42.7 million for the three months ended September 30, 2012 and 2011, respectively, and increased to $126.6 million from $120.1 million for the nine months ended September 30, 2012 and 2011, respectively, due primarily to higher employee benefit plan expenses.

Corporate Expenses.  Corporate expenses, which are general operating expenses that are not allocated to segments, were $2.0 million and $1.1 million for the three months ended September 30, 2012 and 2011, respectively, and $5.3 million and $3.5 million for the nine months ended September 30, 2012 and 2011, respectively.  These increases were also primarily due to higher employee benefit plan expenses.

Interest, Fees and Bond Issue Cost Amortization Expense. Interest, fees and other bond amortization expense was $12.7 million for the three months ended September 30, 2012 and 2011, and $38.1 million for the nine months ended September 30, 2012 and 2011.

Income Tax Expense (Benefit).  We had income tax expense of $69.9 million and $200.9 million for the three and nine months ended September 30, 2012, respectively.  We had an income tax benefit of $116.5 million and $123.8 million for the three and nine months ended September 30, 2011, respectively.  Our income tax is primarily a function of the statutory tax rates coupled with the impact from tax-preferenced investment income.  Variations in our effective tax rate generally result from changes in the relative levels of pre-tax income.  The increases in tax expense were mainly due to the improvement in taxable income resulting from lower catastrophe losses in 2012.  The nine month income tax expense also reflects tax benefits of $21.7 million realized due to corrections of understatement in the deferred tax asset account and $11.2 million of tax benefits from a reduction in our reserve for uncertain tax positions due to the closing of an IRS audit.

Net Income (Loss).

Our net income was $156.0 million and $0.3 million for the three months ended September 30, 2012 and 2011, respectively.  Our net income was $496.4 million and our net loss was $88.5 million for the nine months ended September 30, 2012 and 2011, respectively.  The increases were primarily driven by the decline in catastrophe losses in 2012 compared to the prior period.

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Ratios.

Our combined ratio decreased by 14.3 points for the three months ended September 30, 2012 and decreased by 24.7 points for the nine months ended September 30, 2012.  The loss ratio component decreased 15.8 points for the three months ended September 30, 2012 and 27.1 points for the nine months ended September 30, 2012, primarily due to lower catastrophe losses.  The other underwriting expense ratio component increased 1.0 point for the three months ended September 30, 2012 and 0.8 points for the nine months ended September 30, 2012. The commission and brokerage ratio component increased 0.5 points for the three months ended September 30, 2012 and 1.6 points for the nine months ended September 30, 2012 due to the increase in expenses explained above.

Stockholder's Equity.

Stockholder's equity increased by $542.5 million to $3,483.9 million at September 30, 2012 from $2,941.4 million at December 31, 2011, principally as a result of $496.4 million of net income, $25.2 million of unrealized appreciation on investments, net of tax, $12.7 million of net foreign currency translation adjustments, $5.1 million of share-based compensation transactions and $3.2 million of net benefit plan obligation adjustments.

Consolidated Investment Results

Net Investment Income.

Net investment income decreased 2.5% to $76.3 million for the three months ended September 30, 2012 compared to $78.3 million for the three months ended September 30, 2011, and decreased 7.3% to $231.8 million for the nine months ended September 30, 2012 compared to $249.9 million for the nine months ended September 30, 2011.  The decreases were primarily due to decreases in income from our limited partnership investments and a decline in income from our fixed maturities resulting from lower reinvestment rates.

The following table shows the components of net investment income for the periods indicated:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(Dollars in millions)	2012			2011			2012			2011
Fixed maturities	$	55.5		$	58.2		$	164.2		$	178.0
Equity securities		8.8			8.7			29.3			20.4
Short-term investments and cash		0.3			0.3			0.8			0.9
Other invested assets
Limited partnerships		9.1			12.4			29.9			44.8
Dividends from Parent's shares		4.7			4.7			14.0			14.0
Other		1.4			(1.5	)		2.5			3.2
Total gross investment income		79.9			82.8			240.7			261.2
Interest debited (credited) and other expense		(3.5	)		(4.5	)		(8.9	)		(11.3	)
Total net investment income	$	76.3		$	78.3		$	231.8		$	249.9
(Some amounts may not reconcile due to rounding.)

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The following tables show a comparison of various investment yields for the periods indicated:

	At	At
	September 30,	December 31,
	2012	2011
Imbedded pre-tax yield of cash and invested assets	3.4%	3.6%
Imbedded after-tax yield of cash and invested assets	2.5%	2.7%

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2012	2011	2012	2011
Annualized pre-tax yield on average cash and invested assets	3.7%	3.9%	3.8%	4.1%
Annualized after-tax yield on average cash and invested assets	2.7%	2.9%	2.8%	3.2%

Net Realized Capital Gains (Losses).

The following table presents the composition of our net realized capital gains (losses) for the periods indicated:

	Three Months Ended September 30,									Nine Months Ended September 30,
(Dollars in millions)	2012			2011			Variance			2012			2011			Variance
Gains (losses) from sales:
Fixed maturity securities, market value
Gains	$	2.0		$	11.4		$	(9.4	)	$	9.2		$	28.2		$	(19.0	)
Losses		(1.9	)		(8.6	)		6.7			(5.2	)		(43.7	)		38.5
Total		0.1			2.7			(2.6	)		4.0			(15.6	)		19.6
Fixed maturity securities, fair value
Gains		0.6			0.2			0.4			6.1			1.0			5.1
Losses		(0.2	)		(0.3	)		0.1			(0.6	)		(2.0	)		1.4
Total		0.5			(0.1	)		0.6			5.5			(1.0	)		6.5
Equity securities, market value
Gains		-			-			-			-			0.2			(0.2	)
Losses		-			-			-			-			(0.2	)		0.2
Total		-			-			-			-			-			-
Equity securities, fair value
Gains		5.2			6.0			(0.8	)		33.0			8.9			24.1
Losses		(2.0	)		(5.4	)		3.4			(9.9	)		(6.6	)		(3.3	)
Total		3.2			0.6			2.6			23.1			2.3			20.8
Total net realized gains (losses) from sales
Gains		7.9			17.6			(9.7	)		48.4			38.3			10.1
Losses		(4.1	)		(14.3	)		10.2			(15.7	)		(52.5	)		36.8
Total		3.8			3.3			0.5			32.7			(14.2	)		46.9
Other-than-temporary impairments:		(0.5	)		(0.9	)		0.4			(6.6	)		(14.5	)		7.9
Gains (losses) from fair value adjustments:
Fixed maturities, fair value		0.3			(5.0	)		5.3			1.6			(8.5	)		10.1
Equity securities, fair value		58.6			(153.4	)		212.0			104.7			(115.3	)		220.0
Other invested assets, fair value		33.7			(23.1	)		56.8			222.3			(54.2	)		276.5
Total		92.7			(181.5	)		274.2			328.7			(178.0	)		506.7
Total net realized capital gains (losses)	$	95.9		$	(179.0	)	$	274.9		$	354.7		$	(206.7	)	$	561.4
(Some amounts may not reconcile due to rounding.)

34

Net realized capital gains were $95.9 million and net realized capital losses were $179.0 million for the three months ended September 30, 2012 and 2011, respectively.  For the three months ended September 30, 2012, we recorded $92.7 million of gains due to fair value re-measurements on fixed maturity, equity securities and other invested assets, and $3.8 million of net realized capital gains from sales of fixed maturity and equity securities, partially offset by $0.5 million of other-than-temporary impairments on fixed maturity securities.  For the three months ended September 30, 2011, we recorded $181.5 million in losses due to fair value re-measurements on fixed maturity and equity securities and other invested assets and $0.9 million of other-than-temporary impairments on fixed maturity securities, partially offset by $3.3 million of net realized capital gains from sales of fixed maturity and equity securities.  The losses on the sales of fixed maturity securities in 2011 included the impact of selling part of our municipal bond portfolio as credit concerns arose in this market sector.

Net realized capital gains were $354.7 million and net realized capital losses were $206.7 million for the nine months ended September 30, 2012 and 2011, respectively.  For the nine months ended September 30, 2012, we recorded $328.7 million of gains due to fair value re-measurements on fixed maturity, equity securities and other invested assets and $32.7 million of net realized capital gains from sales of fixed maturity and equity securities, partially offset by $6.6 million of other-than-temporary impairments on fixed maturity securities.  For the nine months ended September 30, 2011, we recorded $178.0 million in losses due to fair value re-measurements on fixed maturity and equity securities and other invested assets, $14.5 million of other-than-temporary impairments on fixed maturity securities and $14.2 million of net realized capital losses from sales of fixed maturity and equity securities.  The losses on the sales of fixed maturity securities in 2011 included the impact of selling part of our municipal bond portfolio as credit concerns arose in this market sector.

Segment Results.

During the quarter ended September 30, 2011, we realigned our reporting segments to reflect recent changes in the type and volume of business written. We previously reported the results of Marine & Aviation, Surety, A&H Reinsurance and A&H Primary operations as a separate segment—Specialty Underwriting.  The A&H primary business, which is a relatively new line of business for us, has increased significantly, representing approximately 2% of premiums earned and is projected to continue to grow.  The A&H primary business is better aligned with the Insurance reporting segment based on the similarities of this business with those businesses already reflected in the Insurance segment.  The other operating units included in the Specialty Underwriting segment would have encompassed less than 5% of our premiums earned and their volume is projected to remain approximately 6%.  As a result of the size of these remaining operating units and their similarity to the business reported within U.S. Reinsurance, they have been reclassified to the U.S. Reinsurance segment.  There has been no change to the International reporting segment.  We have restated all segment information for prior years to conform to the new reporting segment structure.

The U.S. Reinsurance operation writes property and casualty reinsurance and specialty lines of business, including Marine, Aviation, Surety and A&H business, on both a treaty and facultative basis, through reinsurance brokers, as well as directly with ceding companies primarily within the U.S.  The International operation writes non-U.S. property and casualty reinsurance through Everest Re’s branches in Canada, Singapore and through offices in Brazil, Miami and New Jersey.  The Insurance operation writes property and casualty insurance, including medical stop loss insurance, directly and through general agents, brokers and surplus lines brokers within the U.S and Canada.

These segments are managed independently, but conform with corporate guidelines with respect to pricing, risk management, control of aggregate catastrophe exposures, capital, investments and support operations.  Management generally monitors and evaluates the financial performance of these operating segments based upon their underwriting results.

Underwriting results include earned premium less losses and LAE incurred, commission and brokerage expenses and other underwriting expenses.  We measure our underwriting results using ratios, in particular loss, commission and brokerage and other underwriting expense ratios, which respectively, divide incurred losses, commissions and brokerage and other underwriting expenses by premiums earned.

35

Our loss and LAE reserves are our best estimate of our ultimate liability for unpaid claims.  We re-evaluate our estimates on an ongoing basis, including all prior period reserves, taking into consideration all available information and, in particular, recently reported loss claim experience and trends related to prior periods.  Such re-evaluations are recorded in incurred losses in the period in which the re-evaluation is made.

The following discusses the underwriting results for each of our segments for the periods indicated:

U.S. Reinsurance.

The following table presents the underwriting results and ratios for the U.S. Reinsurance segment for the periods indicated.

	Three Months Ended September 30,												Nine Months Ended September 30,
(Dollars in millions)	2012			2011			Variance			% Change			2012			2011			Variance			% Change
Gross written premiums	$	433.5		$	360.8		$	72.7			20.1	%	$	938.4		$	947.2		$	(8.7	)		-0.9	%
Net written premiums		219.9			167.5			52.4			31.3	%		475.3			486.0			(10.8	)		-2.2	%
Premiums earned	$	181.4		$	167.5		$	13.9			8.3	%	$	529.4		$	512.1		$	17.3			3.4	%
Incurred losses and LAE		108.2			97.2			11.0			11.3	%		321.4			371.6			(50.2	)		-13.5	%
Commission and brokerage		40.1			23.3			16.8			72.1	%		139.9			106.1			33.8			31.8	%
Other underwriting expenses		12.8			10.8			1.9			17.7	%		33.5			30.6			2.9			9.5	%
Underwriting gain (loss)	$	20.4		$	36.2		$	(15.8	)		-43.7	%	$	34.6		$	3.7		$	30.8		NM
										Point Chg												Point Chg
Loss ratio		59.6	%		58.0	%					1.6			60.7	%		72.6	%					(11.9	)
Commission and brokerage ratio		22.1	%		13.9	%					8.2			26.4	%		20.7	%					5.7
Other underwriting expense ratio		7.1	%		6.5	%					0.6			6.4	%		6.0	%					0.4
Combined ratio		88.8	%		78.4	%					10.4			93.5	%		99.3	%					(5.8	)
(NM, not meaningful.)
(Some amounts may not reconcile due to rounding.)

Premiums.Gross written premiums increased by 20.1% to $433.5 million for the three months ended September 30, 2012 from $360.8 million for the three months ended September 30, 2011, primarily due to increased new business and higher premium rates on renewals, particularly for catastrophe exposed risks.  Net written premiums increased 31.3% to $219.9 million for the three months ended September 30, 2012 compared to $167.5 million for the three months ended September 30, 2011, which is in line with the percentage increase in gross written premiums for the quarter.  Premiums earned increased 8.3% to $181.4 million for the three months ended September 30, 2012 compared to $167.5 million for the three months ended September 30, 2011.  The variance difference between premiums earned and net written premiums is primarily due to the non-renewal of the large Florida quota share reinsurance contract and other changes in the mix of business.

Gross written premiums decreased by 0.9% to $938.4 million for the nine months ended September 30, 2012 from $947.2 million for the nine months ended September 30, 2011, primarily due to the non-renewal of a large Florida quota share reinsurance contract, partially offset by increased new business and higher premium rates on renewals, particularly for contracts with catastrophe exposed risks.  Net written premiums decreased 2.2% to $475.3 million for the nine months ended September 30, 2012 compared to $486.0 million for the nine months ended September 30, 2011, which is in line with the decrease in gross written premiums.  Premiums earned increased 3.4% to $529.4 million for the nine months ended September 30, 2012 compared to $512.1 million for the nine months ended September 30, 2011.  As with the quarter, the variance difference between premiums earned and net written premiums is primarily attributable to increases in new business, rate increases on renewals, particularly for catastrophe exposed contracts and changes in the mix of business, partially offset by the non-renewal of the large Florida quota share reinsurance contract.

36

Incurred Losses and LAE.The following tables present the incurred losses and LAE for the U.S. Reinsurance segment for the periods indicated.

	Three Months Ended September 30,
	Current			Ratio %/				Prior			Ratio %/				Total			Ratio %/
(Dollars in millions)	Year			Pt Change				Years			Pt Change				Incurred			Pt Change
2012
Attritional	$	95.9			52.8	%		$	(4.3	)		-2.4	%		$	91.6			50.4	%
Catastrophes		12.5			6.9	%			4.1			2.3	%			16.6			9.2	%
A&E		-			0.0	%			-			0.0	%			-			0.0	%
Total segment	$	108.4			59.7	%		$	(0.2	)		-0.1	%		$	108.2			59.6	%
2011
Attritional	$	82.7			49.3	%		$	(3.5	)		-2.1	%		$	79.2			47.2	%
Catastrophes		16.7			10.0	%			1.3			0.8	%			18.0			10.8	%
A&E		-			0.0	%			-			0.0	%			-			0.0	%
Total segment	$	99.4			59.3	%		$	(2.2	)		-1.3	%		$	97.2			58.0	%
Variance 2012/2011
Attritional	$	13.2			3.5		pts	$	(0.8	)		(0.3	)	pts	$	12.4			3.2		pts
Catastrophes		(4.2	)		(3.1	)	pts		2.8			1.5		pts		(1.4	)		(1.6	)	pts
A&E		-			-		pts		-			-		pts		-			-		pts
Total segment	$	9.0			0.4		pts	$	2.0			1.2		pts	$	11.0			1.6		pts

	Nine Months Ended September 30,
	Current			Ratio %/				Prior			Ratio %/				Total			Ratio %/
(Dollars in millions)	Year			Pt Change				Years			Pt Change				Incurred			Pt Change
2012
Attritional	$	273.6			51.7	%		$	8.2			1.6	%		$	281.8			53.3	%
Catastrophes		42.5			8.0	%			(3.0	)		-0.6	%			39.5			7.4	%
A&E		-			0.0	%			0.1			0.0	%			0.1			0.0	%
Total segment	$	316.1			59.7	%		$	5.3			1.0	%		$	321.4			60.7	%
2011
Attritional	$	262.4			51.3	%		$	(4.0	)		-0.8	%		$	258.4			50.5	%
Catastrophes		102.4			20.0	%			10.9			2.1	%			113.3			22.1	%
A&E		-			0.0	%			-			0.0	%			-			0.0	%
Total segment	$	364.8			71.3	%		$	6.9			1.3	%		$	371.6			72.6	%
Variance 2012/2011
Attritional	$	11.2			0.4		pts	$	12.2			2.4		pts	$	23.4			2.8		pts
Catastrophes		(59.9	)		(12.0	)	pts		(13.9	)		(2.7	)	pts		(73.8	)		(14.7	)	pts
A&E		-			-		pts		0.1			-		pts		0.1			-		pts
Total segment	$	(48.7	)		(11.6	)	pts	$	(1.6	)		(0.3	)	pts	$	(50.2	)		(11.9	)	pts
(Some amounts may not reconcile due to rounding.)

Incurred losses increased 11.3% to $108.2 million for the three months ended September 30, 2012 compared to $97.2 million for the three months ended September 30, 2011, primarily as a result of the $13.2 million (3.5 points) increase in current year attritional losses as a result of increased premiums earned and increased losses from assumed crop business.  The $12.5 million of current year catastrophe losses for 2012 related to Hurricane Isaac.  The $16.7 million of current year catastrophe losses for 2011 related primarily to Hurricane Irene ($13.3 million).

Incurred losses decreased 13.5% to $321.4 million for the nine months ended September 30, 2012 compared to $371.6 million for the nine months ended September 30, 2011, primarily as a result of the $59.9 million (12.0 points) decrease in current year catastrophe losses.  The $42.5 million of current year catastrophe losses for 2012 related to U.S. storm losses ($30.0 million) and Hurricane Isaac ($12.5 million).  The $102.4 million of current year catastrophe losses for 2011 related primarily to the Japanese earthquake and tsunami ($35.7 million), U.S. storms ($26.0 million), the 2011 New Zealand earthquake ($23.0 million), Hurricane Irene ($13.3 million) and the 2011 Australian floods ($3.5 million).

37

Segment Expenses.  Commission and brokerage expenses increased 72.1% to $40.1 million for the three months ended September 30, 2012 compared to $23.3 million for the three months ended September 30, 2011.  Commission and brokerage expenses increased 31.8% to $139.9 million for the nine months ended September 30, 2012 compared to $106.1 million for the nine months ended September 30, 2011.  These variances were primarily due to the increase in premiums earned and the effect resulting from commissions of the non-renewed Florida quota share contract.

Segment other underwriting expenses increased to $12.8 million for the three months ended September 30, 2012 compared to $10.8 million for the same period in 2011 and to $33.5 million for the nine months ended September 30, 2012 compared to $30.6 million for the same period in 2011.  These increases were primarily due to higher share-based compensation and employee benefit plan expenses.

International.

The following table presents the underwriting results and ratios for the International segment for the periods indicated.

	Three Months Ended September 30,												Nine Months Ended September 30,
(Dollars in millions)	2012			2011			Variance			% Change			2012			2011			Variance			% Change
Gross written premiums	$	248.5		$	326.1		$	(77.6	)		-23.8	%	$	878.6		$	923.6		$	(45.0	)		-4.9	%
Net written premiums		105.6			158.0			(52.5	)		-33.2	%		402.1			457.7			(55.6	)		-12.1	%
Premiums earned	$	121.6		$	151.1		$	(29.4	)		-19.5	%	$	426.4		$	480.0		$	(53.6	)		-11.2	%
Incurred losses and LAE		29.3			104.6			(75.3	)		-72.0	%		191.8			514.3			(322.4	)		-62.7	%
Commission and brokerage		19.7			35.7			(16.0	)		-44.8	%		88.4			105.8			(17.3	)		-16.4	%
Other underwriting expenses		8.2			7.5			0.7			9.2	%		21.5			20.9			0.6			2.8	%
Underwriting gain (loss)	$	64.4		$	3.2		$	61.1		NM			$	124.6		$	(161.0	)	$	285.6			-177.4	%
										Point Chg												Point Chg
Loss ratio		24.1	%		69.2	%					(45.1	)		45.0	%		107.1	%					(62.1	)
Commission and brokerage ratio		16.2	%		23.6	%					(7.4	)		20.7	%		22.0	%					(1.3	)
Other underwriting expense ratio		6.8	%		5.1	%					1.7			5.1	%		4.4	%					0.7
Combined ratio		47.1	%		97.9	%					(50.8	)		70.8	%		133.5	%					(62.7	)
(NM, not meaningful.)
(Some amounts may not reconcile due to rounding.)

Premiums.Gross written premiums decreased by 23.8% to $248.5 million for the three months ended September 30, 2012 compared to $326.1 million for the three months ended September 30, 2011, primarily due to a shift in the mix of business away from pro rata to excess of loss business, which generates a lower premium rate commensurate with lower loss exposure.  Net written premiums decreased by 33.2% to $105.6 million for the three months ended September 30, 2012 compared to $158.0 million for the three months ended September 30, 2011, which is consistent with the decrease in gross written premiums.  Premiums earned decreased by 19.5% to $121.6 million for the three months ended September 30, 2012 compared to $151.1 million for the three months ended September 30, 2011.  The change in premiums earned relative to net written premiums is primarily the result of timing; premiums are earned ratably over the coverage period whereas written premiums are recorded at the initiation of the coverage period and changes in the mix of business.

Gross written premiums decreased by 4.9% to $878.6 million for the nine months ended September 30, 2012 compared to $923.6 million for the nine months ended September 30, 2011, primarily due to a shift in the mix of business towards excess of loss business.  Net written premiums decreased by 12.1% to $402.1 million for the nine months ended September 30, 2012 compared to $457.7 million for the nine months ended September 30, 2011, primarily due to the decline in gross written premiums and the impact of changes in our affiliated quota share agreements.  Premiums earned decreased by 11.2% to $426.4 million for the nine months ended September 30, 2012 compared to $480.0 million for the nine months ended September 30, 2011.  The change in premiums earned is comparable to the change in net written premiums.

38

Incurred Losses and LAE. The following tables present the incurred losses and LAE for the International segment for the periods indicated.

	Three Months Ended September 30,
	Current			Ratio %/				Prior			Ratio %/				Total			Ratio %/
(Dollars in millions)	Year			Pt Change				Years			Pt Change				Incurred			Pt Change
2012
Attritional	$	39.8			32.8	%		$	(4.0	)		-3.3	%		$	35.8			29.5	%
Catastrophes		-			0.0	%			(6.5	)		-5.4	%			(6.5	)		-5.4	%
Total segment	$	39.8			32.8	%		$	(10.5	)		-8.7	%		$	29.3			24.1	%
2011
Attritional	$	60.8			40.2	%		$	(7.9	)		-5.2	%		$	52.9			35.0	%
Catastrophes		52.3			34.6	%			(0.7	)		-0.4	%			51.7			34.2	%
Total segment	$	113.1			74.8	%		$	(8.6	)		-5.6	%		$	104.6			69.2	%
Variance 2012/2011
Attritional	$	(21.0	)		(7.4	)	pts	$	3.9			1.9		pts	$	(17.1	)		(5.5	)	pts
Catastrophes		(52.3	)		(34.6	)	pts		(5.8	)		(5.0	)	pts		(58.2	)		(39.6	)	pts
Total segment	$	(73.3	)		(42.0	)	pts	$	(1.9	)		(3.1	)	pts	$	(75.3	)		(45.1	)	pts

	Nine Months Ended September 30,
	Current			Ratio %/				Prior			Ratio %/				Total			Ratio %/
(Dollars in millions)	Year			Pt Change				Years			Pt Change				Incurred			Pt Change
2012
Attritional	$	198.7			46.6	%		$	(4.0	)		-0.9	%		$	194.7			45.7	%
Catastrophes		-			0.0	%			(2.9	)		-0.7	%			(2.9	)		-0.7	%
Total segment	$	198.7			46.6	%		$	(6.9	)		-1.6	%		$	191.8			45.0	%
2011
Attritional	$	202.3			42.1	%		$	(19.9	)		-4.1	%		$	182.4			38.0	%
Catastrophes		331.7			69.1	%			0.2			0.0	%			331.9			69.1	%
Total segment	$	534.0			111.2	%		$	(19.7	)		-4.1	%		$	514.3			107.1	%
Variance 2012/2011
Attritional	$	(3.6	)		4.5		pts	$	15.9			3.2		pts	$	12.3			7.7		pts
Catastrophes		(331.7	)		(69.1	)	pts		(3.1	)		(0.7	)	pts		(334.8	)		(69.8	)	pts
Total segment	$	(335.3	)		(64.6	)	pts	$	12.8			2.5		pts	$	(322.4	)		(62.1	)	pts
(Some amounts may not reconcile due to rounding.)

Incurred losses and LAE decreased 72.0% to $29.3 million for the three months ended September 30, 2012 compared to $104.6 million for the three months ended September 30, 2011, representing 45.1 loss ratio points.  The decrease was principally due to a $52.3 million (34.6 points) decrease in current year catastrophe losses and a $21.0 million (7.4 points) decrease in current year attritional losses due to the impact from year over year cessions under our affiliated quota share agreements resulting from movement in foreign exchange rates and changes in ceding percentages.  There were no current year catastrophe losses for 2012.  The $52.3 million of 2011 current year catastrophes, primarily related to the Japanese earthquake and tsunami ($50.2 million).

Incurred losses and LAE decreased 62.7% to $191.8 million for the nine months ended September 30, 2012 compared to $514.3 million for the nine months ended September 30, 2011, representing 62.1 loss ratio points.  The decrease was principally due to a $331.7 million (69.1 points) decrease in current year catastrophes.  There were no current year catastrophe losses for 2012.  The $331.7 million of 2011 current year catastrophes related primarily to the Japanese earthquake and tsunami ($206.8 million), the 2011 New Zealand earthquake ($87.2 million) and the 2011 Australian flood ($25.1 million).  Attritional losses increased by $12.3 million (7.7 points) primarily due to less year over year favorable reserve development.

39

Segment Expenses.Commission and brokerage expenses decreased 44.8% to $19.7 million for the three months ended September 30, 2012 compared to $35.7 million for the three months ended September 30, 2011.  Commission and brokerage expenses decreased 16.4% to $88.4 million for the nine months ended September 30, 2012 compared to $105.8 million for the nine months ended September 30, 2011.  This is consistent with the reduction in earned premium and a shift in the mix of business towards property catastrophe and excess of loss business which have lower expenses.

Segment other underwriting expenses increased to $8.2 million for the three months ended September 30, 2012 compared to $7.5 million for the three months ended September 30, 2011 and to $21.5 million for the nine months ended September 30, 2012 compared to $20.9 million for the nine months ended September 30, 2011.  The increases relate to higher personnel benefit costs.

Insurance.

The following table presents the underwriting results and ratios for the Insurance segment for the periods indicated.

	Three Months Ended September 30,												Nine Months Ended September 30,
(Dollars in millions)	2012			2011			Variance			% Change			2012			2011			Variance			% Change
Gross written premiums	$	328.9		$	236.3		$	92.6			39.2	%	$	783.9		$	750.3		$	33.6			4.5	%
Net written premiums		133.4			114.3			19.1			16.7	%		348.3			366.2			(17.9	)		-4.9	%
Premiums earned	$	124.1		$	124.3		$	(0.2	)		-0.1	%	$	343.5		$	362.2		$	(18.7	)		-5.2	%
Incurred losses and LAE		105.4			120.3			(14.9	)		-12.4	%		273.6			302.0			(28.4	)		-9.4	%
Commission and brokerage		10.7			11.9			(1.2	)		-9.9	%		23.0			27.8			(4.8	)		-17.3	%
Other underwriting expenses		24.9			24.3			0.6			2.5	%		71.5			68.6			2.9			4.2	%
Underwriting gain (loss)	$	(16.9	)	$	(32.2	)	$	15.3			-47.5	%	$	(24.6	)	$	(36.2	)	$	11.6			-32.0	%
										Point Chg												Point Chg
Loss ratio		84.9	%		96.8	%					(11.9	)		79.7	%		83.4	%					(3.7	)
Commission and brokerage ratio		8.6	%		9.5	%					(0.9	)		6.7	%		7.7	%					(1.0	)
Other underwriting expense ratio		20.1	%		19.6	%					0.5			20.8	%		18.9	%					1.9
Combined ratio		113.6	%		125.9	%					(12.3	)		107.2	%		110.0	%					(2.8	)
(Some amounts may not reconcile due to rounding.)

Premiums. Gross written premiums increased by 39.2% to $328.9 million for the three months ended September 30, 2012 compared to $236.3 million for the three months ended September 30, 2011.  This increase was primarily driven by crop and primary medical stop loss business, partially offset by the termination and runoff of several large casualty programs.  Net written premiums increased 16.7% to $133.4 million for the three months ended September 30, 2012 compared to $114.3 million for the same period in 2011.  The variance between the percentage change in gross written premium versus net written premium is primarily due to the crop business which has a higher use of reinsurance than the runoff casualty programs.  Premiums earned decreased 0.1% to $124.1 million for the three months ended September 30, 2012 compared to $124.3 million for the three months ended September 30, 2011.  The change in premiums earned relative to net written premiums is the result of timing; premiums are earned ratably over the coverage period whereas written premiums are recorded at the initiation of the coverage period.

Gross written premiums increased by 4.5% to $783.9 million for the nine months ended September 30, 2012 compared to $750.3 million for the nine months ended September 30, 2011.  This increase was primarily driven by crop and primary medical stop loss business, partially offset by the termination and runoff of several large casualty programs.  Net written premiums decreased 4.9% to $348.3 million for the nine months ended September 30, 2012 compared to $366.2 million for the same period in 2011.  This decrease is primarily due to a higher use of reinsurance on crop business than the runoff casualty programs.  Premiums earned decreased 5.2% to $343.5 million for the nine months ended September 30, 2012 compared to $362.2 million for the nine months ended September 30, 2011.  The change in premiums earned is consistent with the change in net written premiums.

40

Incurred Losses and LAE.The following tables present the incurred losses and LAE for the Insurance segment for the periods indicated.

	Three Months Ended September 30,
	Current			Ratio %/				Prior			Ratio %/				Total			Ratio %/
(Dollars in millions)	Year			Pt Change				Years			Pt Change				Incurred			Pt Change
2012
Attritional	$	101.1			81.4	%		$	4.3			3.5	%		$	105.4			84.9	%
Catastrophes		-			0.0	%			-			0.0	%			-			0.0	%
Total segment	$	101.1			81.4	%		$	4.3			3.5	%		$	105.4			84.9	%
2011
Attritional	$	100.9			81.1	%		$	18.0			14.5	%		$	118.9			95.6	%
Catastrophes		1.4			1.2	%			-			0.0	%			1.4			1.2	%
Total segment	$	102.3			82.3	%		$	18.0			14.5	%		$	120.3			96.8	%
Variance 2012/2011
Attritional	$	0.2			0.3		pts	$	(13.7	)		(11.0	)	pts	$	(13.5	)		(10.7	)	pts
Catastrophes		(1.4	)		(1.2	)	pts		-			-		pts		(1.4	)		(1.2	)	pts
Total segment	$	(1.2	)		(0.9	)	pts	$	(13.7	)		(11.0	)	pts	$	(14.9	)		(11.9	)	pts

	Nine Months Ended September 30,
	Current			Ratio %/				Prior			Ratio %/				Total			Ratio %/
(Dollars in millions)	Year			Pt Change				Years			Pt Change				Incurred			Pt Change
2012
Attritional	$	266.0			77.5	%		$	7.6			2.2	%		$	273.6			79.7	%
Catastrophes		-			0.0	%			-			0.0	%			-			0.0	%
Total segment	$	266.0			77.5	%		$	7.6			2.2	%		$	273.6			79.7	%
2011
Attritional	$	287.9			79.4	%		$	12.5			3.5	%		$	300.4			82.9	%
Catastrophes		1.4			0.4	%			0.2			0.1	%			1.6			0.5	%
Total segment	$	289.3			79.8	%		$	12.7			3.6	%		$	302.0			83.4	%
Variance 2012/2011
Attritional	$	(21.9	)		(1.9	)	pts	$	(4.9	)		(1.3	)	pts	$	(26.8	)		(3.2	)	pts
Catastrophes		(1.4	)		(0.4	)	pts		(0.2	)		(0.1	)	pts		(1.6	)		(0.5	)	pts
Total segment	$	(23.3	)		(2.3	)	pts	$	(5.1	)		(1.4	)	pts	$	(28.4	)		(3.7	)	pts
(Some amounts may not reconcile due to rounding.)

Incurred losses and LAE decreased by 12.4% to $105.4 million for the three months ended September 30, 2012 compared to $120.3 million for the three months ended September 30, 2011.  This was primarily due to a decrease of $13.5 million (10.7 points) in attritional losses driven by lower year over year prior years development.  The 2011 development was attributable to excess casualty and California workers’ compensation business.

Incurred losses and LAE decreased by 9.4% to $273.6 million for the nine months ended September 30, 2012 compared to $302.0 million for the nine months ended September 30, 2011.  This was primarily due to a decrease of $26.8 million (3.2 points) in attritional losses driven by the decline in premiums earned and a shift in the mix of business towards short-tail business with lower loss ratios.

Segment Expenses.Commission and brokerage expenses decreased 9.9% to $10.7 million for the three months ended September 30, 2012 compared to $11.9 million for the three months ended September 30, 2011 and decreased 17.3% to $23.0 million for the nine months ended September 30, 2012 compared to $27.8 million for the nine months ended September 30, 2011.  These declines were mainly due to changes in distribution with a higher proportion of business being done on a direct basis, which carries a lower commission expense and changes in our affiliated quota share agreements.

41

Segment other underwriting expenses for the three months ended September 30, 2012 increased to $24.9 million from $24.3 million for the three months ended September 30, 2011.  Segment other underwriting expenses for the nine months ended September 30, 2012 increased to $71.5 million from $68.6 million for the nine months ended September 30, 2011.  These increases were primarily due to higher employee benefit plan expenses.

Market Sensitive Instruments.

The SEC’s Financial Reporting Release #48 requires registrants to clarify and expand upon the existing financial statement disclosure requirements for derivative financial instruments, derivative commodity instruments and other financial instruments (collectively, “market sensitive instruments”).  We do not generally enter into market sensitive instruments for trading purposes.

Our current investment strategy seeks to maximize after-tax income through a high quality, diversified, taxable and tax-preferenced fixed maturity portfolio, while maintaining an adequate level of liquidity.  Our mix of taxable and tax-preferenced investments is adjusted periodically, consistent with our current and projected operating results, market conditions and our tax position.  The fixed maturity securities in the investment portfolio are comprised of non-trading available for sale securities.  Additionally, we have invested in equity securities.

The overall investment strategy considers the scope of present and anticipated Company operations.  In particular, estimates of the financial impact resulting from non-investment asset and liability transactions, together with our capital structure and other factors, are used to develop a net liability analysis.  This analysis includes estimated payout characteristics for which our investments provide liquidity.  This analysis is considered in the development of specific investment strategies for asset allocation, duration and credit quality.  The change in overall market sensitive risk exposure principally reflects the asset changes that took place during the period.

Interest Rate Risk.  Our $9.0 billion investment portfolio, at September 30, 2012, is principally comprised of fixed maturity securities, which are generally subject to interest rate risk and some foreign currency exchange rate risk, and some equity securities, which are subject to price fluctuations and some foreign exchange rate risk.  The overall economic impact of the foreign exchange risks on the investment portfolio is partially mitigated by changes in the dollar value of foreign currency denominated liabilities and their associated income statement impact.

Interest rate risk is the potential change in value of the fixed maturity securities portfolio, including short-term investments, from a change in market interest rates.  In a declining interest rate environment, it includes prepayment risk on the $630.7 million of mortgage-backed securities in the $5,378.3 million fixed maturity portfolio.  Prepayment risk results from potential accelerated principal payments that shorten the average life and thus the expected yield of the security.

The table below displays the potential impact of market value fluctuations and after-tax unrealized appreciation on our fixed maturity portfolio (including $640.7 million of short-term investments) for the periods indicated based on upward and downward parallel and immediate 100 and 200 basis point shifts in interest rates.  For legal entities with a U.S. dollar functional currency, this modeling was performed on each security individually.  To generate appropriate price estimates for mortgage-backed securities, changes in prepayment expectations under different interest rate environments were taken into account.  For legal entities with non-U.S. dollar functional currency, the effective duration of the involved portfolio of securities was used as a proxy for the market value change under the various interest rate change scenarios.

	Impact of Interest Rate Shift in Basis Points
	At September 30, 2012
(Dollars in millions)		-200			-100			0			100			200
Total Market/Fair Value	$	6,275.6		$	6,147.8		$	6,019.0		$	5,880.7		$	5,731.1
Market/Fair Value Change from Base (%)		4.3	%		2.1	%		0.0	%		-2.3	%		-4.8	%
Change in Unrealized Appreciation
After-tax from Base ($)	$	166.8		$	83.7		$	-		$	(89.9	)	$	(187.2	)

42

We had $7,954.6 million and $8,290.6 million of gross reserves for losses and LAE as of September 30, 2012 and December 31, 2011, respectively.  These amounts are recorded at their nominal value, as opposed to present value, which would reflect a discount adjustment to reflect the time value of money.  Since losses are paid out over a period of time, the present value of the reserves is less than the nominal value.  As interest rates rise, the present value of the reserves decreases and, conversely, as interest rates decline, the present value increases.  These movements are the opposite of the interest rate impacts on the fair value of investments.  While the difference between present value and nominal value is not reflected in our financial statements, our financial results will include investment income over time from the investment portfolio until the claims are paid.  Our loss and loss reserve obligations have an expected duration that is reasonably consistent with our fixed income portfolio.

Equity Risk.  Equity risk is the potential change in fair and/or market value of the common stock and preferred stock portfolios arising from changing prices.  Our equity investments consist of a diversified portfolio of individual securities and mutual funds, which invest principally in high quality common and preferred stocks that are traded on major exchanges.  The primary objective of the equity portfolio is to obtain greater total return relative to bonds over time through market appreciation and income.

The table below displays the impact on fair/market value and after-tax change in fair/market value of a 10% and 20% change in equity prices up and down for the periods indicated.

	Impact of Percentage Change in Equity Fair/Market Values
	At September 30, 2012
(Dollars in millions)		-20%			-10%			0%		10%		20%
Fair/Market Value of the Equity Portfolio	$	998.0		$	1,122.7		$	1,247.5	$	1,372.2	$	1,497.0
After-tax Change in Fair/Market Value		(162.2	)		(81.1	)		-		81.1		162.2

Foreign Exchange Risk.  Foreign currency risk is the potential change in value, income and cash flow arising from adverse changes in foreign currency exchange rates.  Each of our non-U.S. (“foreign”) operations maintains capital in the currency of the country of its geographic location consistent with local regulatory guidelines.  Each foreign operation may conduct business in its local currency, as well as the currency of other countries in which it operates.  The primary foreign currency exposures for these foreign operations are the Singapore and Canadian Dollars.  We mitigate foreign exchange exposure by generally matching the currency and duration of our assets to our corresponding operating liabilities.  In accordance with FASB guidance, we translate the assets, liabilities and income of non-U.S. dollar functional currency legal entities to the U.S. dollar.  This translation amount is reported as a component of other comprehensive income.  As of September 30, 2012, there has been no material change in exposure to foreign exchange rates as compared to December 31, 2011.

SAFE HARBOR DISCLOSURE

This report contains forward-looking statements within the meaning of the U.S. federal securities laws.  We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in the federal securities laws.  In some cases, these statements can be identified by the use of forward-looking words such as “may”, “will”, “should”, “could”, “anticipate”, “estimate”, “expect”, “plan”, “believe”, “predict”, “potential” and “intend”.  Forward-looking statements contained in this report include information regarding our reserves for losses and LAE, the adequacy of our provision for uncollectible balances, estimates of our catastrophe exposure, the effects of catastrophic events on our financial statements and the ability of our subsidiaries to pay dividends.  Forward-looking statements only reflect our expectations and are not guarantees of performance.  These statements involve risks, uncertainties and assumptions.  Actual events or results may differ materially from our expectations.  Important factors that could cause our actual events or results to be materially different from our expectations include those discussed under the caption “Risk Factors” in our most recently filed Annual Report on Form 10-K, Part 1, Item 1A.  We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

43

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk Instruments.  See “Market Sensitive Instruments” in PART I – ITEM 2.

ITEM 4.  CONTROLS AND PROCEDURES

As of the end of the period covered by this report, our management carried out an evaluation, with the participation of the Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)).  Based on their evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.  Our management, with the participation of the Chief Executive Officer and Chief Financial Officer, also conducted an evaluation of our internal control over financial reporting to determine whether any changes occurred during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.  Based on that evaluation, there has been no such change during the quarter covered by this report.

PART II

ITEM 1.  LEGAL PROCEEDINGS

In the ordinary course of business, the Company is involved in lawsuits, arbitrations and other formal and informal dispute resolution procedures, the outcomes of which will determine the Company’s rights and obligations under insurance and reinsurance agreements.  In some disputes, the Company seeks to enforce its rights under an agreement or to collect funds owing to it.  In other matters, the Company is resisting attempts by others to collect funds or enforce alleged rights.  These disputes arise from time to time and are ultimately resolved through both informal and formal means, including negotiated resolution, arbitration and litigation.  In all such matters, the Company believes that its positions are legally and commercially reasonable.  The Company considers the statuses of these proceedings when determining its reserves for unpaid loss and loss adjustment expenses.

Aside from litigation and arbitrations related to these insurance and reinsurance agreements, the Company is not a party to any other material litigation or arbitration.

ITEM 1A.  RISK FACTORS

No material changes.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.  MINE SAFETY DISCLOSURES

Not applicable.

44

ITEM 5.  OTHER INFORMATION

None.

ITEM 6.  EXHIBITS

Exhibit Index:
Exhibit No.	Description
31.1	Section 302 Certification of Joseph V. Taranto
31.2	Section 302 Certification of Craig Howie
32.1	Section 906 Certification of Joseph V. Taranto and Craig Howie
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Labels Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

45

Everest Reinsurance Holdings, Inc.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Everest Reinsurance Holdings, Inc.
	(Registrant)
	/S/ CRAIG HOWIE
	Craig Howie
	Executive Vice President and
		Chief Financial Officer
	(Duly Authorized Officer and Principal Financial Officer)
Dated: November 14, 2012

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Joseph V. Taranto, certify that:

1. I have reviewed this annual report on Form 10-Q of Everest Reinsurance Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

November 14, 2012

/S/ JOSEPH V. TARANTO
Joseph V. Taranto
Chairman and
	Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Craig Howie, certify that:

1. I have reviewed this annual report on Form 10-Q of Everest Reinsurance Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

November 14, 2012

/S/ CRAIG HOWIE
Craig Howie
Executive Vice President and
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATIONS PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-Q for the quarter ended September 30, 2012 of Everest Reinsurance Holdings, Inc., a corporation organized under the laws of Delaware (the “Company”), filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certify, pursuant to 18 U.S.C. ss. 1350, as enacted by section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934, and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

November 14, 2012

/S/ JOSEPH V. TARANTO
Joseph V. Taranto
Chairman and
	Chief Executive Officer
/S/ CRAIG HOWIE
Craig Howie
Executive Vice President and
	Chief Financial Officer

XML

Investments (Summary Of Changes In Net Unrealized Appreciation (Depreciation) For The Company's Investments) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Increase (Decrease) During The Period Between The Market Value And Cost Of Investments Carried At Market Value, And Deferred Taxes Thereon:
Change in unrealized appreciation (depreciation), pre-tax	$ 28,149	$ 11,988	$ 38,780	$ 49,693
Deferred tax benefit (expense)	(9,879)	(4,243)	(13,624)	(17,438)
Deferred tax benefit (expense), other-than-temporary impairment	27	48	51	46
Change in unrealized appreciation (depreciation), net of deferred taxes, included in stockholder's equity	18,297	7,793	25,207	32,301
Fixed Maturity Securities [Member]
Increase (Decrease) During The Period Between The Market Value And Cost Of Investments Carried At Market Value, And Deferred Taxes Thereon:
Change in unrealized appreciation (depreciation), pre-tax	28,226	11,911	38,923	51,341
Fixed Maturity Securities, Other-Than-Temporary Impairment [Member]
Increase (Decrease) During The Period Between The Market Value And Cost Of Investments Carried At Market Value, And Deferred Taxes Thereon:
Change in unrealized appreciation (depreciation), pre-tax	(77)	(137)	(146)	(132)
Equity Securities [Member]
Increase (Decrease) During The Period Between The Market Value And Cost Of Investments Carried At Market Value, And Deferred Taxes Thereon:
Change in unrealized appreciation (depreciation), pre-tax		(1)	3	(1)
Other Invested Assets [Member]
Increase (Decrease) During The Period Between The Market Value And Cost Of Investments Carried At Market Value, And Deferred Taxes Thereon:
Change in unrealized appreciation (depreciation), pre-tax		$ 215		$ (1,515)

XML

Trust Agreements (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012
Trust Agreements [Abstract]
Amount on deposit in trust accounts	$ 143,779

XML

Contingencies (Estimated Cost To Replace Annuities For Contingent Liability) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
The Prudential Insurance Company [Member]
Loss Contingencies [Line Items]
Estimated cost to replace annuities	$ 144,117	$ 143,447
Unaffiliated Life Insurance Company [Member]
Loss Contingencies [Line Items]
Estimated cost to replace annuities	$ 28,562	$ 27,634

XML

Related-Party Transactions (Expenses Incurred By Holdings From Services Provided By Affiliated Company) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Related-Party Transactions [Abstract]
Expenses incurred	$ 20,700	$ 16,537	$ 57,073	$ 46,984

XML

Senior Notes (Schedule Of Outstanding Senior Notes) (Details) (Senior Notes [Member], USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Dec. 31, 2011
Senior Notes [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Debt instrument, stated interest rate	5.40%
Date issued	Oct. 12, 2004
Date due	Oct. 15, 2014
Principal amounts	$ 250,000
Consolidated balance sheet amount	249,894	249,858
Market value	$ 261,745	$ 251,370

XML

Fair Value (Fair Value Measurement Levels For All Assets, Recorded At Fair And Market Value) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities - available for sale, at market value	$ 5,326,118	$ 5,107,028
Fixed maturities - available for sale, at fair value	52,217	113,606
Equity securities - available for sale, at market value	13	10
Equity securities - available for sale, at fair value	1,247,445	1,207,053
Other invested assets, at fair value	1,039,648	817,352
Fair Value, Inputs, Level 1 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Equity securities - available for sale, at market value	13	10
Equity securities - available for sale, at fair value	1,113,526	1,090,959
Other invested assets, at fair value	1,039,648	817,352
Fair Value, Inputs, Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities - available for sale, at market value	5,313,575	5,088,439
Fixed maturities - available for sale, at fair value	52,217	113,606
Equity securities - available for sale, at fair value	133,919	116,094
Fair Value, Inputs, Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities - available for sale, at market value	12,543	18,589
U.S. Treasury Securities And Obligations Of U.S. Government Agencies And Corporations [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities - available for sale, at market value	78,595	79,539
U.S. Treasury Securities And Obligations Of U.S. Government Agencies And Corporations [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities - available for sale, at market value	78,595	79,539
US States and Political Subdivisions Debt Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities - available for sale, at market value	1,366,329	1,660,905
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities - available for sale, at market value	1,366,329	1,660,905
Corporate Debt Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities - available for sale, at market value	1,401,228	1,228,235
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities - available for sale, at market value	1,401,228	1,228,235
Asset-backed Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities - available for sale, at market value	50,923	45,103
Asset-backed Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities - available for sale, at market value	43,331	29,057
Asset-backed Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities - available for sale, at market value	7,592	16,046
Commercial Mortgage Backed Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities - available for sale, at market value	53,007	47,874
Commercial Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities - available for sale, at market value	53,007	47,874
Agency Residential [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities - available for sale, at market value	575,168	543,393
Agency Residential [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities - available for sale, at market value	575,168	543,393
Non-agency Residential [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities - available for sale, at market value	2,480	24,289
Non-agency Residential [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities - available for sale, at market value	2,475	24,282
Non-agency Residential [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities - available for sale, at market value	5	7
Foreign Government Debt Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities - available for sale, at market value	812,688	788,649
Foreign Government Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities - available for sale, at market value	812,688	788,649
Foreign Corporate Debt Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities - available for sale, at market value	985,700	689,041
Foreign Corporate Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities - available for sale, at market value	980,754	686,505
Foreign Corporate Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities - available for sale, at market value	$ 4,946	$ 2,536

XML

Related-Party Transactions (Tables)

9 Months Ended

Sep. 30, 2012

Related-Party Transactions [Abstract]

Amendments To The Share Repurchase Program For The Common Shares Approved For Repurchase

	Common Shares
	Authorized for
Amendment Date	Repurchase
(Dollars in thousands)
09/21/2004	$	5,000,000
07/21/2008		5,000,000
02/24/2010		5,000,000
02/22/2012		5,000,000
	$	20,000,000

Purchase Price For Common Shares

(Dollars in thousands)
Total purchase price	$	835,371

Dividends Received On Common Shares Reported As Net Investment Income

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Dividends received	$	4,666	$	4,665	$	13,997	$	13,979

Expenses Incurred By Holdings From Services Provided By Affiliated Company

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Expenses incurred	$	20,700	$	16,537	$	57,073	$	46,984

Affiliated Quota Share Reinsurance Agreements For All New And Renewal Business For The Indicated Coverage Period

(Dollars in thousands)
		Percent			Assuming		Single			Aggregate
Coverage Period	Ceding Company	Ceded			Company	Type of Business	Occurrence Limit			Limit
01/01/2002-12/31/2002	Everest Re		20.0	%	Bermuda Re	property / casualty business	$	-		$	-
01/01/2003-12/31/2003	Everest Re		25.0	%	Bermuda Re	property / casualty business		-			-
01/01/2004-12/31/2005	Everest Re		22.5	%	Bermuda Re	property / casualty business		-			-
	Everest Re		2.5	%	Everest International	property / casualty business		-			-
01/01/2006-12/31/2006	Everest Re		18.0	%	Bermuda Re	property business		125,000	(1)		-
	Everest Re		2.0	%	Everest International	property business		-			-
01/01/2006-12/31/2007	Everest Re		31.5	%	Bermuda Re	casualty business		-			-
	Everest Re		3.5	%	Everest International	casualty business		-			-
01/01/2007-12/31/2007	Everest Re		22.5	%	Bermuda Re	property business		130,000	(1)		-
	Everest Re		2.5	%	Everest International	property business		-			-
01/01/2008-12/31/2008	Everest Re		36.0	%	Bermuda Re	property / casualty business		130,000	(1)		275,000	(2)
	Everest Re		4.0	%	Everest International	property / casualty business		-			-
01/01/2009-12/31/2009	Everest Re		36.0	%	Bermuda Re	property / casualty business		150,000	(1)		325,000	(2)
	Everest Re		8.0	%	Everest International	property / casualty business		-			-
01/01/2010-12/31/2010	Everest Re		44.0	%	Bermuda Re	property / casualty business		150,000			325,000
01/01/2011-12/31/2011	Everest Re		50.0	%	Bermuda Re	property / casualty business		150,000			300,000
01/01/2012	Everest Re		50.0	%	Bermuda Re	property / casualty business		100,000			200,000
01/01/2003-12/31/2006	Everest Re- Canadian Branch		50.0	%	Bermuda Re	property business		-			-
01/01/2007-12/31/2009	Everest Re- Canadian Branch		60.0	%	Bermuda Re	property business		-			-
01/01/2010-12/31/2010	Everest Re- Canadian Branch		60.0	%	Bermuda Re	property business		350,000	(3)		-
01/01/2011-12/31/2011	Everest Re- Canadian Branch		60.0	%	Bermuda Re	property business		350,000	(3)		-
01/01/2012	Everest Re- Canadian Branch		75.0	%	Bermuda Re	property / casualty business		206,250	(3)		412,500	(3)
01/01/2012	Everest Canada		80.0	%	Everest Re- Canadian Branch	property business		-			-
(1) The single occurance limit is applied before the loss cessions to either Bermuda Re or Everest International.
(2) The aggregate limit is applied before the loss cessions to either Bermuda Re or Everest International.
(3) Amounts shown are Canadian dollars.

Liability Limits For Any Losses Per One Occurrence

	Liability Limits
(Dollars in thousands)	Exceeding		Not to Exceed
Losses per one occurrence	$	100,000	$	150,000

Loss Portfolio Transfer Reinsurance Agreements, Net Insurance Exposures And Reserves Were Transferred To An Affiliate

(Dollars in thousands)
Effective	Transferring	Assuming	% of Business or			Covered Period
Date	Company	Company	Amount of Transfer			of Transfer
09/19/2000	Mt. McKinley	Bermuda Re		100	%	All years
10/01/2001	Everest Re  (Belgium Branch)	Bermuda Re		100	%	All years
10/01/2008	Everest Re	Bermuda Re	$	747,022		01/01/2002-12/31/2007

Premiums And Losses Ceded By The Company To Affiliate

	Three Months Ended				Nine Months Ended
Bermuda Re	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Ceded written premiums	$	448,656	$	445,601	$	1,188,944	$	1,195,023
Ceded earned premiums		412,390		398,561		1,237,883		1,158,961
Ceded losses and LAE (a)		263,990		238,405		732,170		1,023,482

	Three Months Ended					Nine Months Ended
Everest International	September 30,					September 30,
(Dollars in thousands)	2012		2011			2012			2011
Ceded written premiums	$	361	$	31		$	1,055		$	670
Ceded earned premiums		583		2,448			2,550			16,489
Ceded losses and LAE		832		(1,005	)		(744	)		5,908

	Three Months Ended				Nine Months Ended
Everest Canada	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Assumed written premiums	$	4,170	$	-	$	12,813	$	-
Assumed earned premiums		3,963		-		11,329		-
Assumed losses and LAE		2,378		-		6,798		-

(a) Ceded losses and LAE include the Mt. McKinley loss portfolio transfer that constitutes losses ceded under retroactive reinsurance and therefore, in accordance with FASB guidance, a deferred gain on retroactive reinsurance is reflected in other expenses on the consolidated statements of operations and comprehensive income (loss).

XML

Related-Party Transactions (Loss Portfolio Transfer Reinsurance Agreements, Net Insurance Exposures And Reserves Were Transferred To An Affiliate) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012
Mt. McKinley [Member]
Effective Date	Sep. 19, 2000
Assuming Company	Bermuda Re
% of Business Transfer	100.00%
Covered Period of Transfer	All years
Everest Re (Belgium Branch) [Member]
Effective Date	Oct. 01, 2001
Assuming Company	Bermuda Re
% of Business Transfer	100.00%
Covered Period of Transfer	All years
Everest Re [Member]
Effective Date	Oct. 01, 2008
Assuming Company	Bermuda Re
Amount of Business Transfer	747,022
Covered Period of Transfer	01/01/2002-12/31/2007

XML

Long Term Subordinated Notes (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012
Debt Instrument [Line Items]
Floating rate terms	interest will be based on the 3 month LIBOR plus 238.5 basis points, reset quarterly, payable quarterly in arrears on February 15, May 15, August 15 and November 15 of each year, subject to Holdings' right to defer interest on one or more occasions for up to ten consecutive years.
Percentage of principal amount required for redemption	100.00%
Redemption date	May 01, 2047
Commencement date for cash tender offer for any and all of the 6.60% fixed to floating rate long term subordinated notes	Mar. 19, 2009
Subordinated Debt [Member]
Debt Instrument [Line Items]
Annual interest rate, payable semi-annually in arrears on November 15 and May 15 of each year	6.60%
Percentage of principal amount required for redemption	100.00%
Outstanding debt reduction	161,441
Subordinated Debt [Member] | Minimum [Member]
Debt Instrument [Line Items]
Applicable spread on treasury rate	0.25%
Subordinated Debt [Member] | Maximum [Member]
Debt Instrument [Line Items]
Applicable spread on treasury rate	0.50%
Fixed Rate Interest Period [Member] | Subordinated Debt [Member]
Debt Instrument [Line Items]
Interest payment commencement date	Nov. 15, 2007
Interest basis, 3 month LIBOR plus number of basis points, reset quarterly	238.50%
Fixed Rate Interest Period [Member] | Subordinated Debt [Member] | Minimum [Member]
Debt Instrument [Line Items]
Interest Rate Period, Beginning Date	May 03, 2007
Fixed Rate Interest Period [Member] | Subordinated Debt [Member] | Maximum [Member]
Debt Instrument [Line Items]
Interest Rate Period, Ending Date	May 14, 2017
Right to defer interest on one or more occasions for up to number of consecutive years	10 years
Floating Rate Interest Period [Member]
Debt Instrument [Line Items]
Interest Rate Period, Beginning Date	May 15, 2017
Floating Rate Interest Period [Member] | Subordinated Debt [Member] | Maximum [Member]
Debt Instrument [Line Items]
Right to defer interest on one or more occasions for up to number of consecutive years	10 years

XML

Acquisitions (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012
Business Acquisition [Line Items]
Goodwill	$ 35,068
Intangible assets	26,903
Business acquisition, intangible assets amortized period, years	7 years
Heartland Crop Insurance, Inc [Member]
Business Acquisition [Line Items]
Business acquisition date	Jan. 02, 2011
Business acquisition cash paid	$ 55,000
Premiere Underwriting Services [Member]
Business Acquisition [Line Items]
Business acquisition date	Jan. 28, 2011
Executive Risk Insurance Services, Ltd [Member]
Business Acquisition [Line Items]
Business acquisition date	Jan. 31, 2011

XML

Related-Party Transactions (Affiliated Quota Share Reinsurance Agreements For All New And Renewal Business For The Indicated Coverage Period) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012
Everest Re [Member] | 01/01/2002-12/31/2002 [Member] | Bermuda Re [Member]
Related Party Transaction [Line Items]
Ceding Company	Everest Re
Percent Ceded	20.00%
Assuming Company	Bermuda Re
Type of Business	property / casualty business
Everest Re [Member] | 01/01/2003-12/31/2003 [Member] | Bermuda Re [Member]
Related Party Transaction [Line Items]
Ceding Company	Everest Re
Percent Ceded	25.00%
Assuming Company	Bermuda Re
Type of Business	property / casualty business
Everest Re [Member] | 01/01/2004-12/31/2005 [Member] | Bermuda Re [Member]
Related Party Transaction [Line Items]
Ceding Company	Everest Re
Percent Ceded	22.50%
Assuming Company	Bermuda Re
Type of Business	property / casualty business
Everest Re [Member] | 01/01/2004-12/31/2005 [Member] | Everest International [Member]
Related Party Transaction [Line Items]
Ceding Company	Everest Re
Percent Ceded	2.50%
Assuming Company	Everest International
Type of Business	property / casualty business
Everest Re [Member] | 01/01/2006-12/31/2006 [Member] | Bermuda Re [Member]
Related Party Transaction [Line Items]
Ceding Company	Everest Re
Percent Ceded	18.00%
Assuming Company	Bermuda Re
Type of Business	property business
Single Occurrence Limit	125,000	[1]
Everest Re [Member] | 01/01/2006-12/31/2006 [Member] | Everest International [Member]
Related Party Transaction [Line Items]
Ceding Company	Everest Re
Percent Ceded	2.00%
Assuming Company	Everest International
Type of Business	property business
Everest Re [Member] | 01/01/2006-12/31/2007 [Member] | Bermuda Re [Member]
Related Party Transaction [Line Items]
Ceding Company	Everest Re
Percent Ceded	31.50%
Assuming Company	Bermuda Re
Type of Business	casualty business
Everest Re [Member] | 01/01/2006-12/31/2007 [Member] | Everest International [Member]
Related Party Transaction [Line Items]
Ceding Company	Everest Re
Percent Ceded	3.50%
Assuming Company	Everest International
Type of Business	casualty business
Everest Re [Member] | 01/01/2007-12/31/2007 [Member] | Bermuda Re [Member]
Related Party Transaction [Line Items]
Ceding Company	Everest Re
Percent Ceded	22.50%
Assuming Company	Bermuda Re
Type of Business	property business
Single Occurrence Limit	130,000	[1]
Everest Re [Member] | 01/01/2007-12/31/2007 [Member] | Everest International [Member]
Related Party Transaction [Line Items]
Ceding Company	Everest Re
Percent Ceded	2.50%
Assuming Company	Everest International
Type of Business	property business
Everest Re [Member] | 01/01/2008-12/31/2008 [Member] | Bermuda Re [Member]
Related Party Transaction [Line Items]
Ceding Company	Everest Re
Percent Ceded	36.00%
Assuming Company	Bermuda Re
Type of Business	property / casualty business
Single Occurrence Limit	130,000	[1]
Aggregate Limit	275,000	[2]
Everest Re [Member] | 01/01/2008-12/31/2008 [Member] | Everest International [Member]
Related Party Transaction [Line Items]
Ceding Company	Everest Re
Percent Ceded	4.00%
Assuming Company	Everest International
Type of Business	property / casualty business
Everest Re [Member] | 01/01/2009-12/31/2009 [Member] | Bermuda Re [Member]
Related Party Transaction [Line Items]
Ceding Company	Everest Re
Percent Ceded	36.00%
Assuming Company	Bermuda Re
Type of Business	property / casualty business
Single Occurrence Limit	150,000	[1]
Aggregate Limit	325,000	[2]
Everest Re [Member] | 01/01/2009-12/31/2009 [Member] | Everest International [Member]
Related Party Transaction [Line Items]
Ceding Company	Everest Re
Percent Ceded	8.00%
Assuming Company	Everest International
Type of Business	property / casualty business
Everest Re [Member] | 01/01/2010-12/31/2010 [Member] | Bermuda Re [Member]
Related Party Transaction [Line Items]
Ceding Company	Everest Re
Percent Ceded	44.00%
Assuming Company	Bermuda Re
Type of Business	property / casualty business
Single Occurrence Limit	150,000
Aggregate Limit	325,000
Everest Re [Member] | 01/01/2011 -12/31/2011 [Member] | Bermuda Re [Member]
Related Party Transaction [Line Items]
Ceding Company	Everest Re
Percent Ceded	50.00%
Assuming Company	Bermuda Re
Type of Business	property / casualty business
Single Occurrence Limit	150,000
Aggregate Limit	300,000
Everest Re [Member] | 01/01/2012 [Member] | Bermuda Re [Member]
Related Party Transaction [Line Items]
Ceding Company	Everest Re
Percent Ceded	50.00%
Assuming Company	Bermuda Re
Type of Business	property / casualty business
Single Occurrence Limit	100,000
Aggregate Limit	200,000
Everest Re- Canadian Branch [Member] | 01/01/2010-12/31/2010 [Member] | Bermuda Re [Member]
Related Party Transaction [Line Items]
Ceding Company	Everest Re- Canadian Branch
Percent Ceded	60.00%
Assuming Company	Bermuda Re
Type of Business	property business
Single Occurrence Limit	350,000	[3]
Everest Re- Canadian Branch [Member] | 01/01/2011 -12/31/2011 [Member] | Bermuda Re [Member]
Related Party Transaction [Line Items]
Ceding Company	Everest Re- Canadian Branch
Percent Ceded	60.00%
Assuming Company	Bermuda Re
Type of Business	property business
Single Occurrence Limit	350,000	[3]
Everest Re- Canadian Branch [Member] | 01/01/2012 [Member] | Bermuda Re [Member]
Related Party Transaction [Line Items]
Ceding Company	Everest Re- Canadian Branch
Percent Ceded	75.00%
Assuming Company	Bermuda Re
Type of Business	property / casualty business
Single Occurrence Limit	206,250	[3]
Aggregate Limit	412,500	[3]
Everest Re- Canadian Branch [Member] | 01/01/2012 [Member] | Everest Canada [Member]
Related Party Transaction [Line Items]
Ceding Company	Everest Canada
Percent Ceded	80.00%
Assuming Company	Everest Re- Canadian Branch
Type of Business	property business
Everest Re- Canadian Branch [Member] | 01/01/2003-12/31/2006 [Member] | Bermuda Re [Member]
Related Party Transaction [Line Items]
Ceding Company	Everest Re- Canadian Branch
Percent Ceded	50.00%
Assuming Company	Bermuda Re
Type of Business	property business
Everest Re- Canadian Branch [Member] | 01/01/2007-12/31/2009 [Member] | Bermuda Re [Member]
Related Party Transaction [Line Items]
Ceding Company	Everest Re- Canadian Branch
Percent Ceded	60.00%
Assuming Company	Bermuda Re
Type of Business	property business

[1] The single occurance limit is applied before the loss cessions to either Bermuda Re or Everest International.

[2] The aggregate limit is applied before the loss cessions to either Bermuda Re or Everest International.

[3] Amounts shown are Canadian dollars.

XML

Fair Value (Tables)

9 Months Ended

Sep. 30, 2012

Fair Value [Abstract]

Fair Value Measurement Levels For All Assets

			Fair Value Measurement Using:
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
(Dollars in thousands)	September 30, 2012		(Level 1)		(Level 2)		(Level 3)
Assets:
Fixed maturities, market value
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	78,595	$	-	$	78,595	$	-
Obligations of U.S. States and political subdivisions		1,366,329		-		1,366,329		-
Corporate securities		1,401,228		-		1,401,228		-
Asset-backed securities		50,923		-		43,331		7,592
Mortgage-backed securities
Commercial		53,007		-		53,007		-
Agency residential		575,168		-		575,168		-
Non-agency residential		2,480		-		2,475		5
Foreign government securities		812,688		-		812,688		-
Foreign corporate securities		985,700		-		980,754		4,946
Total fixed maturities, market value		5,326,118		-		5,313,575		12,543
Fixed maturities, fair value		52,217		-		52,217		-
Equity securities, market value		13		13		-		-
Equity securities, fair value		1,247,445		1,113,526		133,919		-
Other invested assets, fair value		1,039,648		1,039,648		-		-

There wer no transfers between Level 1 and Level 2 for the three and nine months ended September 30, 2012.

The following table presents the fair value measurement levels for all assets, which the Company has recorded at fair value (fair and market value) as of the period indicated:

			Fair Value Measurement Using:
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
(Dollars in thousands)	December 31, 2011		(Level 1)		(Level 2)		(Level 3)
Assets:
Fixed maturities, market value
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	79,539	$	-	$	79,539	$	-
Obligations of U.S. States and political subdivisions		1,660,905		-		1,660,905		-
Corporate securities		1,228,235		-		1,228,235		-
Asset-backed securities		45,103		-		29,057		16,046
Mortgage-backed securities
Commercial		47,874		-		47,874		-
Agency residential		543,393		-		543,393		-
Non-agency residential		24,289		-		24,282		7
Foreign government securities		788,649		-		788,649		-
Foreign corporate securities		689,041		-		686,505		2,536
Total fixed maturities, market value		5,107,028		-		5,088,439		18,589
Fixed maturities, fair value		113,606		-		113,606		-
Equity securities, market value		10		10		-		-
Equity securities, fair value		1,207,053		1,090,959		116,094		-
Other invested assets, fair value		817,352		817,352		-		-

Activity Under Level 3, Fair Value Measurements Using Significant Unobservable Inputs By Asset Type

	Three Months Ended September 30, 2012												Nine Months Ended September 30, 2012
	Asset-backed			Foreign			Non-agency						Asset-backed			Foreign			Non-agency
(Dollars in thousands)	Securities			Corporate			RMBS			Total			Securities			Corporate			RMBS			Total
Beginning balance	$	8,996		$	7,383		$	5		$	16,384		$	16,046		$	2,536		$	7		$	18,589
Total gains or (losses) (realized/unrealized)
Included in earnings (or changes in net assets)		56			(14	)		1			43			111			(33	)		3			81
Included in other comprehensive income (loss)		390			275			-			665			728			387			(2	)		1,113
Purchases, issuances and settlements		(61	)		(576	)		(1	)		(638	)		4,407			6,640			(3	)		11,044
Transfers in and/or (out) of Level 3		(1,789	)		(2,122	)		-			(3,911	)		(13,700	)		(4,584	)		-			(18,284	)
Ending balance	$	7,592		$	4,946		$	5		$	12,543		$	7,592		$	4,946		$	5		$	12,543
The amount of total gains or losses for the period included
in earnings (or changes in net assets) attributable to the
change in unrealized gains or losses relating to assets
still held at the reporting date	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-
(Some amounts may not reconcile due to rounding.)

	Three Months Ended September 30, 2011												Nine Months Ended September 30, 2011
	Asset-backed			Foreign			Non-agency						Asset-backed			Foreign			Non-agency
(Dollars in thousands)	Securities			Corporate			RMBS			Total			Securities			Corporate			RMBS			Total
Beginning balance	$	2,466		$	-		$	381		$	2,847		$	961		$	3,635		$	458		$	5,054
Total gains or (losses) (realized/unrealized)
Included in earnings (or changes in net assets)		16			(3	)		(39	)		(26	)		80			(3	)		10			87
Included in other comprehensive income (loss)		(122	)		(25	)		102			(45	)		(269	)		(25	)		54			(240	)
Purchases, issuances and settlements		(19	)		2,586			(88	)		2,479			37			2,586			(166	)		2,457
Transfers in and/or (out) of Level 3		(27	)		-			(349	)		(376	)		1,505			(3,635	)		(349	)		(2,479	)
Ending balance	$	2,314		$	2,558		$	7		$	4,879		$	2,314		$	2,558		$	7		$	4,879
The amount of total gains or losses for the period included
in earnings (or changes in net assets) attributable to the
change in unrealized gains or losses relating to assets
still held at the reporting date	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-
(Some amounts may not reconcile due to rounding.)

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Other Comprehensive Income (Loss) (Components Of Accumulated Other Comprehensive Income (Loss), Net Of Tax, In The Consolidated Balance Sheets) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Other Comprehensive Income (Loss) [Abstract]
URA(D) on securities, net of deferred taxes, Temporary	$ 172,029	$ 146,727
URA(D) on securities, net of deferred taxes, Non-credit, OTTI	318	413
Total unrealized appreciation (depreciation) on investments, net of deferred taxes	172,347	147,140
Foreign currency translation adjustments, net of deferred taxes	95,922	83,185
Pension adjustments, net of deferred taxes	(52,369)	(55,535)
Accumulated other comprehensive income (loss)	$ 215,900	$ 174,790

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Investments (Summary Of Components Of Net Investment Income) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Schedule of Available-for-sale Securities [Line Items]
Gross investment income	$ 79,863	$ 82,814	$ 240,677	$ 261,197
Interest debited (credited) and other investment expense	(3,521)	(4,489)	(8,887)	(11,281)
Total net investment income	76,342	78,325	231,790	249,916
Fixed Maturity Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Gross investment income	55,495	58,248	164,248	178,006
Equity Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Gross investment income	8,849	8,726	29,281	20,366
Short-Term Investments And Cash [Member]
Schedule of Available-for-sale Securities [Line Items]
Gross investment income	330	296	758	890
Limited Partnerships [Member]
Schedule of Available-for-sale Securities [Line Items]
Gross investment income	9,096	12,399	29,940	44,753
Dividends From Parent's Shares [Member]
Schedule of Available-for-sale Securities [Line Items]
Gross investment income	4,666	4,665	13,997	13,979
Other [Member]
Schedule of Available-for-sale Securities [Line Items]
Gross investment income	$ 1,427	$ (1,520)	$ 2,453	$ 3,203

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Income Taxes (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended	9 Months Ended
	Sep. 30, 2012	Jun. 30, 2012	Jun. 30, 2012	Sep. 30, 2012
Income Taxes [Abstract]
Increase in Deferred tax asset				$ 21,674
Understatement in Deferred tax asset account			21,674
Additional income tax benefit resulting from correction, amount		21,674
IRS audit, additional federal income taxes	12,747
IRS audit, interest paid	1,702
IRS audit, additional income tax expense	752
IRS audit, decrease in reserve for uncertain tax positions, interest related	1,567
IRS audit, decrease in reserve for uncertain tax positions	9,657
IRS audit, income tax benefit	$ 11,223

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Investments (Summary Of Pre-Tax Cumulative Unrealized Appreciation (Depreciation) On Corporate Securities) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Investments [Abstract]
Pre-tax cumulative unrealized appreciation (depreciation)	$ 490	$ 635

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Credit Facility (Summary Of Outstanding Letters Of Credit And/Or Borrowings) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2012	Dec. 31, 2011
Line of Credit Facility [Line Items]
Commitment	$ 150,000	$ 150,000
In use	5,020	5,020
Citibank Holdings Credit Facility [Member]
Line of Credit Facility [Line Items]
Commitment	150,000	150,000
Letters Of Credit [Member]
Line of Credit Facility [Line Items]
In use	$ 5,020	$ 5,020
Maturity/Expiry Date	Dec. 31, 2012	Dec. 31, 2012

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Related-Party Transactions (Amendments To The Share Repurchase Program For The Common Shares Approved For Repurchase) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012
Schedule Of Common Shares Repurchase [Line Items]
Common Shares Authorized for Repurchase, amount	$ 20,000,000
Amendment Date, 09/21/2004 [Member]
Schedule Of Common Shares Repurchase [Line Items]
Common Shares Authorized for Repurchase, amount	5,000,000
Amendment Date, 07/21/2008 [Member]
Schedule Of Common Shares Repurchase [Line Items]
Common Shares Authorized for Repurchase, amount	5,000,000
Amendment Date, 02/24/2010 [Member]
Schedule Of Common Shares Repurchase [Line Items]
Common Shares Authorized for Repurchase, amount	5,000,000
Amendment Date, 02/22/2012 [Member]
Schedule Of Common Shares Repurchase [Line Items]
Common Shares Authorized for Repurchase, amount	$ 5,000,000

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Junior Subordinated Debt Securities Payable (Schedule Of Outstanding Junior Subordinated Debt Securities) (Details) (Junior Subordinated Debt [Member], USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Dec. 31, 2011
Junior Subordinated Debt [Member]
Debt Instrument [Line Items]
Debt instrument, stated interest rate	6.20%
Date issued	Mar. 29, 2004
Date due	Mar. 29, 2034
Amount Issued	$ 329,897
Consolidated balance sheet amount	329,897	329,897
Fair Value	$ 331,177	$ 326,313

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Fair Value (Activity Under Level 3, Fair Value Measurements Using Significant Unobservable Inputs By Asset Type) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning balance	$ 16,384	$ 2,847	$ 18,589	$ 5,054
Total gains or (losses) (realized/unrealized), Included in earnings (or changes in net assets)	43	(26)	81	87
Total gains or (losses) (realized/unrealized), Included in other comprehensive income (loss)	665	(45)	1,113	(240)
Purchases, issuances and settlements	(638)	2,479	11,044	2,457
Transfers in and/or (out) of Level 3	(3,911)	(376)	(18,284)	(2,479)
Ending balance	12,543	4,879	12,543	4,879
The amount of total gains or losses for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses relating to assets still held at the reporting date
Asset-backed Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning balance	8,996	2,466	16,046	961
Total gains or (losses) (realized/unrealized), Included in earnings (or changes in net assets)	56	16	111	80
Total gains or (losses) (realized/unrealized), Included in other comprehensive income (loss)	390	(122)	728	(269)
Purchases, issuances and settlements	(61)	(19)	4,407	37
Transfers in and/or (out) of Level 3	(1,789)	(27)	(13,700)	1,505
Ending balance	7,592	2,314	7,592	2,314
The amount of total gains or losses for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses relating to assets still held at the reporting date
Foreign Corporate Debt Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning balance	7,383		2,536	3,635
Total gains or (losses) (realized/unrealized), Included in earnings (or changes in net assets)	(14)	(3)	(33)	(3)
Total gains or (losses) (realized/unrealized), Included in other comprehensive income (loss)	275	(25)	387	(25)
Purchases, issuances and settlements	(576)	2,586	6,640	2,586
Transfers in and/or (out) of Level 3	(2,122)		(4,584)	(3,635)
Ending balance	4,946	2,558	4,946	2,558
The amount of total gains or losses for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses relating to assets still held at the reporting date
Non-agency Residential [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning balance	5	381	7	458
Total gains or (losses) (realized/unrealized), Included in earnings (or changes in net assets)	1	(39)	3	10
Total gains or (losses) (realized/unrealized), Included in other comprehensive income (loss)		102	(2)	54
Purchases, issuances and settlements	(1)	(88)	(3)	(166)
Transfers in and/or (out) of Level 3		(349)		(349)
Ending balance	5	7	5	7
The amount of total gains or losses for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses relating to assets still held at the reporting date

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Investments

9 Months Ended

Sep. 30, 2012

Investments [Abstract]

Investments

3.  INVESTMENTS

The amortized cost, market value and gross unrealized appreciation and depreciation of available for sale, fixed maturity and equity security investments, carried at market value, are as follows for the periods indicated:

	At September 30, 2012
	Amortized		Unrealized		Unrealized			Market
(Dollars in thousands)	Cost		Appreciation		Depreciation			Value
Fixed maturity securities
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	77,754	$	1,658	$	(817	)	$	78,595
Obligations of U.S. states and political subdivisions		1,275,967		90,415		(53	)		1,366,329
Corporate securities		1,342,335		65,091		(6,198	)		1,401,228
Asset-backed securities		48,695		2,228		-			50,923
Mortgage-backed securities
Commercial		45,345		8,066		(404	)		53,007
Agency residential		559,808		15,901		(541	)		575,168
Non-agency residential		2,148		357		(25	)		2,480
Foreign government securities		759,964		56,900		(4,176	)		812,688
Foreign corporate securities		948,952		46,681		(9,933	)		985,700
Total fixed maturity securities	$	5,060,968	$	287,297	$	(22,147	)	$	5,326,118
Equity securities	$	15	$	-	$	(2	)	$	13

	At December 31, 2011
	Amortized		Unrealized		Unrealized			Market
(Dollars in thousands)	Cost		Appreciation		Depreciation			Value
Fixed maturity securities
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	77,351	$	2,475	$	(287	)	$	79,539
Obligations of U.S. states and political subdivisions		1,558,615		102,815		(525	)		1,660,905
Corporate securities		1,200,941		45,070		(17,776	)		1,228,235
Asset-backed securities		44,351		758		(6	)		45,103
Mortgage-backed securities
Commercial		41,953		7,187		(1,266	)		47,874
Agency residential		528,946		16,209		(1,762	)		543,393
Non-agency residential		24,139		470		(320	)		24,289
Foreign government securities		733,814		57,437		(2,602	)		788,649
Foreign corporate securities		670,544		29,421		(10,924	)		689,041
Total fixed maturity securities	$	4,880,654	$	261,842	$	(35,468	)	$	5,107,028
Equity securities	$	15	$	-	$	(5	)	$	10

The $812,688 thousand of foreign government securities at September 30, 2012 included $89,412 thousand of European sovereign securities.  Approximately 48.6%, 15.1%, 11.8%, 7.3% and 5.4% of European Sovereign Securities represented securities held in the governments of France, the United Kingdom, Sweden, the Netherlands and Austria, respectively.  No other countries represented more than 5% of the European sovereign securities.  The Company held no sovereign securities of Portugal, Italy, Ireland, Greece or Spain at September 30, 2012.

In accordance with FASB guidance, the Company reclassified the non-credit portion of other-than-temporary impairments from retained earnings into accumulated other comprehensive income (loss), on April 1, 2009.  The table below presents the pre-tax cumulative unrealized appreciation (depreciation) on those corporate securities, for the periods indicated:

(Dollars in thousands)	At September 30, 2012		At December 31, 2011
Pre-tax cumulative unrealized appreciation (depreciation)	$	490	$	635

The amortized cost and market value of fixed maturity securities are shown in the following table by contractual maturity. Mortgage-backed securities are generally more likely to be prepaid than other fixed maturity securities. As the stated maturity of such securities may not be indicative of actual maturities, the totals for mortgage-backed and asset-backed securities are shown separately.

	At September 30, 2012				At December 31, 2011
	Amortized		Market		Amortized		Market
(Dollars in thousands)	Cost		Value		Cost		Value
Fixed maturity securities – available for sale
Due in one year or less	$	351,241	$	349,065	$	224,406	$	223,507
Due after one year through five years		2,272,775		2,360,911		2,055,299		2,129,437
Due after five years through ten years		977,030		1,040,976		955,253		1,009,893
Due after ten years		803,926		893,588		1,006,307		1,083,532
Asset-backed securities		48,695		50,923		44,351		45,103
Mortgage-backed securities
Commercial		45,345		53,007		41,953		47,874
Agency residential		559,808		575,168		528,946		543,393
Non-agency residential		2,148		2,480		24,139		24,289
Total fixed maturity securities	$	5,060,968	$	5,326,118	$	4,880,654	$	5,107,028

The changes in net unrealized appreciation (depreciation) for the Company's investments are derived from the following sources for the periods as indicated:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(Dollars in thousands)	2012			2011			2012			2011
Increase (decrease) during the period between the market value and cost
of investments carried at market value, and deferred taxes thereon:
Fixed maturity securities	$	28,226		$	11,911		$	38,923		$	51,341
Fixed maturity securities, other-than-temporary impairment		(77	)		(137	)		(146	)		(132	)
Equity securities		-			(1	)		3			(1	)
Other invested assets		-			215			-			(1,515	)
Change in unrealized  appreciation (depreciation), pre-tax		28,149			11,988			38,780			49,693
Deferred tax benefit (expense)		(9,879	)		(4,243	)		(13,624	)		(17,438	)
Deferred tax benefit (expense), other-than-temporary impairment		27			48			51			46
Change in unrealized appreciation (depreciation),
net of deferred taxes, included in stockholder's equity	$	18,297		$	7,793		$	25,207		$	32,301

The Company frequently reviews all of its fixed maturity, available for sale securities for declines in market value and focuses its attention on securities whose fair value has fallen below 80% of their amortized cost at the time of review.  The Company then assesses whether the decline in value is temporary or other-than-temporary.  In making its assessment, the Company evaluates the current market and interest rate environment as well as specific issuer information.  Generally, a change in a security's value caused by a change in the market, interest rate or foreign exchange environment does not constitute an other-than-temporary impairment, but rather a temporary decline in market value.  Temporary declines in market value are recorded as unrealized losses in accumulated other comprehensive income (loss).  If the Company determines that the decline is other-than-temporary and the Company does not have the intent to sell the security; and it is more likely than not that the Company will not have to sell the security before recovery of its cost basis, the carrying value of the investment is written down to fair value.  The fair value adjustment that is credit or foreign exchange related is recorded in net realized capital gains (losses) in the Company's consolidated statements of operations and comprehensive income (loss). The fair value adjustment that is non-credit related is recorded as a component of other comprehensive income (loss), net of tax, and is included in accumulated other comprehensive income (loss) in the Company's consolidated balance sheets.  The Company's assessments are based on the issuers current and expected future financial position, timeliness with respect to interest and/or principal payments, speed of repayments and any applicable credit enhancements or breakeven constant default rates on mortgage-backed and asset-backed securities, as well as relevant information provided by rating agencies, investment advisors and analysts.

Retrospective adjustments are employed to recalculate the values of asset-backed securities. All of the Company's asset-backed and mortgage-backed securities have a pass-through structure. Each acquisition lot is reviewed to recalculate the effective yield. The recalculated effective yield is used to derive a book value as if the new yield were applied at the time of acquisition. Outstanding principal factors from the time of acquisition to the adjustment date are used to calculate the prepayment history for all applicable securities. Conditional prepayment rates, computed with life to date factor histories and weighted average maturities, are used in the calculation of projected prepayments for pass-through security types.

The tables below display the aggregate market value and gross unrealized depreciation of fixed maturity and equity securities, by security type and contractual maturity, in each case subdivided according to length of time that individual securities had been in a continuous unrealized loss position for the periods indicated:

	Duration of Unrealized Loss at September 30, 2012 By Security Type
	Less than 12 months					Greater than 12 months					Total
			Gross					Gross					Gross
			Unrealized					Unrealized					Unrealized
(Dollars in thousands)	Market Value		Depreciation			Market Value		Depreciation			Market Value		Depreciation
Fixed maturity securities - available for sale
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	-	$	-		$	11,543	$	(817	)	$	11,543	$	(817	)
Obligations of U.S. states and political subdivisions		-		-			5,779		(53	)		5,779		(53	)
Corporate securities		56,805		(411	)		108,100		(5,787	)		164,905		(6,198	)
Asset-backed securities		-		-			-		-			-		-
Mortgage-backed securities
Commercial		-		-			10,332		(404	)		10,332		(404	)
Agency residential		74,338		(354	)		12,983		(187	)		87,321		(541	)
Non-agency residential		-		-			496		(25	)		496		(25	)
Foreign government securities		37,667		(592	)		38,281		(3,584	)		75,948		(4,176	)
Foreign corporate securities		66,424		(1,290	)		80,924		(8,643	)		147,348		(9,933	)
Total fixed maturity securities	$	235,234	$	(2,647	)	$	268,438	$	(19,500	)	$	503,672	$	(22,147	)
Equity securities		-		-			13		(2	)		13		(2	)
Total	$	235,234	$	(2,647	)	$	268,451	$	(19,502	)	$	503,685	$	(22,149	)

	Duration of Unrealized Loss at September 30, 2012 By Maturity
	Less than 12 months					Greater than 12 months					Total
			Gross					Gross					Gross
			Unrealized					Unrealized					Unrealized
(Dollars in thousands)	Market Value		Depreciation			Market Value		Depreciation			Market Value		Depreciation
Fixed maturity securities
Due in one year or less	$	12,962	$	(287	)	$	35,341	$	(5,663	)	$	48,303	$	(5,950	)
Due in one year through five years		116,020		(1,805	)		149,214		(11,175	)		265,234		(12,980	)
Due in five years through ten years		29,938		(175	)		45,936		(1,587	)		75,874		(1,762	)
Due after ten years		1,976		(26	)		14,136		(459	)		16,112		(485	)
Asset-backed securities		-		-			-		-			-		-
Mortgage-backed securities		74,338		(354	)		23,811		(616	)		98,149		(970	)
Total fixed maturity securities	$	235,234	$	(2,647	)	$	268,438	$	(19,500	)	$	503,672	$	(22,147	)

The aggregate market value and gross unrealized losses related to investments in an unrealized loss position at September 30, 2012 were $503,685 thousand and $22,149 thousand, respectively.  There were no unrealized losses on a single issuer that exceeded 0.03% of the market value of the fixed maturity securities at September 30, 2012.  In addition, as indicated on the above table, there was no significant concentration of unrealized losses in any one market sector.  The $2,647 thousand of unrealized losses related to fixed maturity securities that have been in an unrealized loss position for less than one year were comprised of domestic and foreign corporate securities, foreign government securities as well as agency residential mortgage-backed securities.  Of these unrealized losses, $2,039 thousand were related to securities that were rated investment grade by at least one nationally recognized statistical rating organization.  The $19,500 thousand of unrealized losses related to fixed maturity securities in an unrealized loss position for more than one year related primarily to domestic and foreign corporate securities and foreign government securities.  Of these unrealized losses, $17,181 thousand were related to securities that were rated investment grade by at least one nationally recognized statistical rating organization.  The non-investment grade securities with unrealized losses were mainly comprised of corporate securities, with the majority representing a large number of short duration, floating interest rate bank loan securities.  The gross unrealized depreciation for mortgage-backed securities included $25 thousand related to sub-prime and alt-A loans.  In all instances, there were no projected cash flow shortfalls to recover the full book value of the investments and the related interest obligations.  The mortgage-backed securities still have excess credit coverage and are current on interest and principal payments.

The Company, given the size of its investment portfolio and capital position, does not have the intent to sell these securities; and it is more likely than not that the Company will not have to sell the security before recovery of its cost basis.  In addition, all securities currently in an unrealized loss position are current with respect to principal and interest payments.

The tables below display the aggregate market value and gross unrealized depreciation of fixed maturity and equity securities, by security type and contractual maturity, in each case subdivided according to length of time that individual securities had been in a continuous unrealized loss position for the periods indicated:

	Duration of Unrealized Loss at December 31, 2011 By Security Type
	Less than 12 months					Greater than 12 months					Total
			Gross					Gross					Gross
			Unrealized					Unrealized					Unrealized
(Dollars in thousands)	Market Value		Depreciation			Market Value		Depreciation			Market Value		Depreciation
Fixed maturity securities - available for sale
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	-	$	-		$	3,452	$	(287	)	$	3,452	$	(287	)
Obligations of U.S. states and political subdivisions		-		-			7,518		(525	)		7,518		(525	)
Corporate securities		342,959		(8,449	)		75,998		(9,327	)		418,957		(17,776	)
Asset-backed securities		819		(6	)		-		-			819		(6	)
Mortgage-backed securities
Commercial		9,292		(1,266	)		-		-			9,292		(1,266	)
Agency residential		151,951		(1,695	)		7,199		(67	)		159,150		(1,762	)
Non-agency residential		41		-			20,693		(320	)		20,734		(320	)
Foreign government securities		12,777		(269	)		40,743		(2,333	)		53,520		(2,602	)
Foreign corporate securities		77,458		(2,025	)		94,182		(8,899	)		171,640		(10,924	)
Total fixed maturity securities	$	595,297	$	(13,710	)	$	249,785	$	(21,758	)	$	845,082	$	(35,468	)
Equity securities		-		-			10		(5	)		10		(5	)
Total	$	595,297	$	(13,710	)	$	249,795	$	(21,763	)	$	845,092	$	(35,473	)

	Duration of Unrealized Loss at December 31, 2011 By Maturity
	Less than 12 months					Greater than 12 months					Total
			Gross					Gross					Gross
			Unrealized					Unrealized					Unrealized
(Dollars in thousands)	Market Value		Depreciation			Market Value		Depreciation			Market Value		Depreciation
Fixed maturity securities
Due in one year or less	$	9,583	$	(59	)	$	26,204	$	(4,486	)	$	35,787	$	(4,545	)
Due in one year through five years		213,809		(4,754	)		137,972		(9,576	)		351,781		(14,330	)
Due in five years through ten years		186,061		(5,484	)		37,964		(2,391	)		224,025		(7,875	)
Due after ten years		23,741		(446	)		19,753		(4,918	)		43,494		(5,364	)
Asset-backed securities		819		(6	)		-		-			819		(6	)
Mortgage-backed securities		161,284		(2,961	)		27,892		(387	)		189,176		(3,348	)
Total fixed maturity securities	$	595,297	$	(13,710	)	$	249,785	$	(21,758	)	$	845,082	$	(35,468	)

The aggregate market value and gross unrealized losses related to investments in an unrealized loss position at December 31, 2011 were $845,092 thousand and $35,473 thousand, respectively.  There were no unrealized losses on a single issuer that exceeded 0.09% of the market value of the fixed maturity securities at December 31, 2011.  In addition, as indicated on the above table, there was no significant concentration of unrealized losses in any one market sector.  The $13,710 thousand of unrealized losses related to fixed maturity securities that have been in an unrealized loss position for less than one year were generally comprised of domestic and foreign corporate securities as well as commercial and agency residential mortgage-backed securities.  Of these unrealized losses, $5,635 thousand were related to securities that were rated investment grade by at least one nationally recognized statistical rating organization.  The $21,758 thousand of unrealized losses related to fixed maturity securities in an unrealized loss position for more than one year related primarily to domestic and foreign corporate and foreign government securities.  Of these unrealized losses, $15,880 thousand were related to securities that were rated investment grade by at least one nationally recognized statistical rating organization.  The non-investment grade securities with unrealized losses were mainly comprised of corporate securities, with the majority representing a large number of short duration, floating interest rate bank loan securities.  The gross unrealized depreciation for mortgage-backed securities included $56 thousand related to sub-prime and alt-A loans.  In all instances, there were no projected cash flow shortfalls to recover the full book value of the investments and the related interest obligations.  The mortgage-backed securities still have excess credit coverage and are current on interest and principal payments.

Other invested assets, at fair value, is comprised of common shares of the Company's ultimate parent, Group.  At September 30, 2012, the Company held 9,719,971 shares of Group representing 15.8% of the total outstanding shares.

The components of net investment income are presented in the table below for the periods indicated:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(Dollars in thousands)	2012			2011			2012			2011
Fixed maturity securities	$	55,495		$	58,248		$	164,248		$	178,006
Equity securities		8,849			8,726			29,281			20,366
Short-term investments and cash		330			296			758			890
Other invested assets
Limited partnerships		9,096			12,399			29,940			44,753
Dividends from Parent's shares		4,666			4,665			13,997			13,979
Other		1,427			(1,520	)		2,453			3,203
Total gross investment income		79,863			82,814			240,677			261,197
Interest debited (credited) and other investment expense		(3,521	)		(4,489	)		(8,887	)		(11,281	)
Total net investment income	$	76,342		$	78,325		$	231,790		$	249,916

The Company records results from limited partnership investments on the equity method of accounting with changes in value reported through net investment income. Due to the timing of receiving financial information from these partnerships, the results are generally reported on a one month or quarter lag.  If the Company determines there has been a significant decline in value of a limited partnership during this lag period, a loss will be recorded in the period in which the Company identifies the decline.

The Company had contractual commitments to invest up to an additional $71,741 thousand in limited partnerships at September 30, 2012.  These commitments will be funded when called in accordance with the partnership agreements, which have investment periods that expire, unless extended, through 2016.

The components of net realized capital gains (losses) are presented in the table below for the periods indicated:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(Dollars in thousands)	2012			2011			2012			2011
Fixed maturity securities, market value:
Other-than-temporary impairments	$	(486	)	$	(911	)	$	(6,627	)	$	(14,522	)
Gains (losses) from sales		85			2,699			4,018			(15,589	)
Fixed maturity securities, fair value:
Gains (losses) from sales		512			(16	)		5,539			(966	)
Gains (losses) from fair value adjustments		298			(5,014	)		1,623			(8,537	)
Equity securities, market value:
Gains (losses) from sales		-			-			-			37
Equity securities, fair value:
Gains (losses) from sales		3,154			637			23,101			2,303
Gains (losses) from fair value adjustments		58,667			(153,395	)		104,739			(115,288	)
Other invested assets, fair value:
Gains (losses) from fair value adjustments		33,729			(23,036	)		222,296			(54,181	)
Short-term investment gains (losses)		(16	)		-			(16	)		(1	)
Total net realized capital gains (losses)	$	95,943		$	(179,036	)	$	354,673		$	(206,744	)

The Company recorded as net realized capital gains (losses) in the consolidated statements of operations and comprehensive income (loss) both fair value re-measurements and write-downs in the value of securities deemed to be impaired on an other-than-temporary basis as displayed in the table above.  The Company had no other-than-temporary impaired securities where the impairment had both a credit and non-credit component.

The proceeds and split between gross gains and losses, from sales of fixed maturity and equity securities, are presented in the table below for the periods indicated:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(Dollars in thousands)	2012			2011			2012			2011
Proceeds from sales of fixed maturity securities	$	126,393		$	268,425		$	363,837		$	1,105,435
Gross gains from sales		2,704			11,572			15,371			29,154
Gross losses from sales		(2,107	)		(8,889	)		(5,814	)		(45,709	)
Proceeds from sales of equity secuities	$	85,277		$	61,080		$	377,157		$	177,872
Gross gains from sales		5,204			6,022			33,005			9,124
Gross losses from sales		(2,050	)		(5,385	)		(9,904	)		(6,784	)

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Junior Subordinated Debt Securities Payable (Schedule Of Interest Expense Incurred In Connection With Junior Subordinated Debt Securities) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Junior Subordinated Debt Securities Payable [Abstract]
Interest expense incurred	$ 5,113	$ 5,113	$ 15,340	$ 15,340

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Investments (Summary Of Components Of Net Realized Capital Gains (Losses)) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Schedule of Available-for-sale Securities [Line Items]
Other-than-temporary impairments	$ (486)	$ (911)	$ (6,627)	$ (14,522)
Gains (losses) from fair value adjustments	33,729	(23,036)	222,296	(54,181)
Total net realized capital gains (losses)	95,943	(179,036)	354,673	(206,744)
Fixed Maturity Securities [Member] | Market Value [Member]
Schedule of Available-for-sale Securities [Line Items]
Other-than-temporary impairments	(486)	(911)	(6,627)	(14,522)
Gains (losses) from sales	85	2,699	4,018	(15,589)
Fixed Maturity Securities [Member] | Fair Value [Member]
Schedule of Available-for-sale Securities [Line Items]
Gains (losses) from sales	512	(16)	5,539	(966)
Gains (losses) from fair value adjustments	298	(5,014)	1,623	(8,537)
Equity Securities [Member] | Market Value [Member]
Schedule of Available-for-sale Securities [Line Items]
Gains (losses) from sales				37
Equity Securities [Member] | Fair Value [Member]
Schedule of Available-for-sale Securities [Line Items]
Gains (losses) from sales	3,154	637	23,101	2,303
Gains (losses) from fair value adjustments	58,667	(153,395)	104,739	(115,288)
Short-Term Investments And Cash [Member]
Schedule of Available-for-sale Securities [Line Items]
Gains (losses) from sales	$ (16)		$ (16)	$ (1)

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Senior Notes (Tables)

9 Months Ended

Sep. 30, 2012

Senior Notes [Abstract]

Schedule Of Outstanding Senior Notes

					September 30, 2012				December 31, 2011
					Consolidated Balance				Consolidated Balance
(Dollars in thousands)	Date Issued	Date Due	Principal Amounts		Sheet Amount		Market Value		Sheet Amount		Market Value
5.40% Senior notes	10/12/2004	10/15/2014	$	250,000	$	249,894	$	261,745	$	249,858	$	251,370

Schedule Of Interest Expense Incurred In Connection With Senior Notes

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Interest expense incurred	$	3,387	$	3,386	$	10,161	$	10,159

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Credit Facility (Tables)

9 Months Ended

Sep. 30, 2012

Credit Facility [Abstract]

Summary Of Outstanding Letters Of Credit And/Or Borrowings

(Dollars in thousands)	At September 30, 2012						At December 31, 2011
Bank	Commitment		In Use		Date of Loan	Maturity/Expiry Date	Commitment		In Use		Date of Loan	Maturity/Expiry Date
Citibank Holdings Credit Facility	$	150,000	$	-			$	150,000	$	-
Total revolving credit borrowings				-						-
Total letters of credit				5,020		12/31/2012				5,020		12/31/2012
Total Citibank Holdings Credit Facility	$	150,000	$	5,020			$	150,000	$	5,020

Summary Of Costs Incurred In Connection With Credit Facilities

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Credit facility fees incurred	$	137	$	163	$	442	$	341

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Senior Notes (Schedule Of Interest Expense Incurred In Connection With Senior Notes) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Senior Notes [Abstract]
Interest expense incurred	$ 3,387	$ 3,386	$ 10,161	$ 10,159

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Investments (Summary Of Gross Gains (Losses) From Sales Of Fixed Maturity And Equity Securities) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Fixed Maturity Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Proceeds from sales of securities	$ 126,393	$ 268,425	$ 363,837	$ 1,105,435
Gross gains from sales	2,704	11,572	15,371	29,154
Gross losses from sales	(2,107)	(8,889)	(5,814)	(45,709)
Equity Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Proceeds from sales of securities	85,277	61,080	377,157	177,872
Gross gains from sales	5,204	6,022	33,005	9,124
Gross losses from sales	$ (2,050)	$ (5,385)	$ (9,904)	$ (6,784)

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Long Term Subordinated Notes (Tables)

9 Months Ended

Sep. 30, 2012

Long Term Subordinated Notes [Abstract]

Schedule Of Outstanding Fixed To Floating Rate Long Term Subordinated Notes

Maturity Date

September 30, 2012

December 31, 2011

Original

Consolidated Balance

Consolidated Balance

(Dollars in thousands)

Date Issued

Principal Amount

Scheduled

Final

Sheet Amount

Market Value

Sheet Amount

Market Value

6.6% Long term subordinated notes

04/26/2007

$

400,000

05/15/2037

05/01/2067

$

238,356

$

244,522

$

238,354

$

210,195

Schedule Of Interest Expense Incurred In Connection With Long Term Subordinated Notes

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Interest expense incurred	$	3,937	$	3,937	$	11,811	$	11,811

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Junior Subordinated Debt Securities Payable (Tables)

9 Months Ended

Sep. 30, 2012

Junior Subordinated Debt Securities Payable [Abstract]

Schedule Of Outstanding Junior Subordinated Debt Securities

					September 30, 2012				December 31, 2011
					Consolidated Balance				Consolidated Balance
(Dollars in thousands)	Date Issued	Date Due	Amount Issued		Sheet Amount		Fair Value		Sheet Amount		Fair Value
6.20% Junior subordinated debt securities	03/29/2004	03/29/2034	$	329,897	$	329,897	$	331,177	$	329,897	$	326,313

Schedule Of Interest Expense Incurred In Connection With Junior Subordinated Debt Securities

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Interest expense incurred	$	5,113	$	5,113	$	15,340	$	15,340

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Basis Of Presentation

9 Months Ended

Sep. 30, 2012

Basis Of Presentation [Abstract]

Basis Of Presentation

2. BASIS OF PRESENTATION

The unaudited consolidated financial statements of the Company for the three and nine months ended September 30, 2012 and 2011 include all adjustments, consisting of normal recurring accruals, which, in the opinion of management, are necessary for a fair statement of the results on an interim basis.  Certain financial information, which is normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"), has been omitted since it is not required for interim reporting purposes. The December 31, 2011 consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP.  The results for the three and nine months ended September 30, 2012 and 2011 are not necessarily indicative of the results for a full year.  These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the years ended December 31, 2011, 2010 and 2009 included in the Company's most recent Form 10-K filing.

All intercompany accounts and transactions have been eliminated.

Certain reclassifications and format changes have been made to prior period amounts to conform to the current period presentation.

Application of Recently Issued Accounting Standard Changes

Intangibles-Goodwill or Other.  In September 2011, the Financial Accounting Standards Board ("FASB") amended the authoritative guidance for disclosures on Goodwill Impairment.  The amendment allows an entity first to assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis in determining whether it is necessary to perform the two-step goodwill impairment test.  This guidance is effective for periods beginning after December 15, 2011.  The Company implemented this guidance as of January 1, 2012.

Presentation of Comprehensive Income. In June 2011, FASB issued amendments to existing guidance to provide two alternatives for the presentation of comprehensive income. Components of net income and comprehensive income can either be presented within a single, continuous financial statement or be presented in two separate but consecutive financial statements.  The Company has chosen to present the components of net income and comprehensive income in a single, continuous financial statement.  The guidance is effective for reporting periods beginning after December 15, 2011.  The Company implemented this guidance as of January 1, 2012.

Common Fair Value Measurement. In May 2011, FASB issued amendments to existing guidance to achieve common fair value measurement and disclosure requirements between GAAP and International Financial Reporting Standards. The amendments change wording used to describe many GAAP fair value measurement requirements and disclosures. FASB does not intend for the amendments to cause a change in application of fair value accounting guidance.  The guidance is effective for reporting periods beginning after December 15, 2011.  The Company implemented this guidance prospectively as of January 1, 2012.

Treatment of Insurance Contract Acquisition Costs. In October 2010, the FASB issued authoritative guidance for the accounting for costs associated with acquiring or renewing insurance contracts.  The guidance identifies the incremental direct costs of contract acquisition and costs directly related to acquisition activities that should be capitalized.  This guidance is effective for reporting periods beginning after December 15, 2011.  The Company implemented this guidance as of January 1, 2012 and determined that $7,215 thousand of previously deferrable acquisition costs will be expensed during 2012 and the first quarter of 2013, including $1,356 thousand and $4,727 thousand of previously deferrable acquisition costs expensed in the three and nine months ended September 30, 2012, respectively.  If the guidance had been applicable for the prior periods, the Company would have expensed $2,789 thousand and $6,160 thousand of deferrable acquisition costs during the three and nine months ended September 30, 2011, respectively.

Improving Disclosures About Fair Value Measurements.  In January 2010, the FASB amended the authoritative guidance for disclosures on fair value measurements.  Effective for interim and annual reporting periods beginning after December 15, 2009, the guidance requires a new separate disclosure for:  significant transfers in and out of Level 1 and 2 and the reasons for the transfers; and provided clarification on existing disclosures to include:  fair value measurement disclosures by class of assets and liabilities and disclosure on valuation techniques and inputs used to measure fair value that fall in either Level 2 or Level 3.  The Company implemented this guidance effective January 1, 2010.  Effective for interim and annual reporting periods beginning after December 15, 2010, the guidance requires another new separate disclosure in regards to Level 3 fair value measurements in that, the period activity will present separately information about purchases, sales, issuances and settlements.  Comparative disclosures shall be required only for periods ending after initial adoption.  The Company implemented this guidance beginning with the third quarter of 2010.

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Segment Reporting (Tables)

9 Months Ended

Sep. 30, 2012

Segment Reporting Information [Line Items]

Schedule Of Underwriting Results For Operating Segments To Income (Loss) Before Taxes

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(Dollars in thousands)	2012			2011			2012			2011
Underwriting gain (loss)	$	67,833		$	7,213		$	134,571		$	(193,438	)
Net investment income		76,342			78,325			231,790			249,916
Net realized capital gains (losses)		95,943			(179,036	)		354,673			(206,744	)
Corporate expense		(2,019	)		(1,143	)		(5,317	)		(3,498	)
Interest, fee and bond issue cost amortization expense		(12,682	)		(12,706	)		(38,061	)		(38,083	)
Other income (expense)		425			(8,865	)		19,599			(20,401	)
Income (loss) before taxes	$	225,842		$	(116,212	)	$	697,255		$	(212,248	)

Schedule Of Gross Written Premium Derived From Largest Non-U.S. Market

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Canada	$	33,891	$	73,543	$	109,166	$	156,727

U.S. Reinsurance [Member]

Segment Reporting Information [Line Items]

Schedule Of Underwriting Results For Operating Segments

	Three Months Ended				Nine Months Ended
U.S. Reinsurance	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Gross written premiums	$	433,494	$	360,833	$	938,444	$	947,155
Net written premiums		219,884		167,469		475,271		486,032
Premiums earned	$	181,396	$	167,530	$	529,409	$	512,104
Incurred losses and LAE		108,153		97,197		321,397		371,638
Commission and brokerage		40,092		23,298		139,920		106,123
Other underwriting expenses		12,766		10,843		33,541		30,621
Underwriting gain (loss)	$	20,385	$	36,192	$	34,551	$	3,722

International [Member]

Segment Reporting Information [Line Items]

Schedule Of Underwriting Results For Operating Segments

	Three Months Ended				Nine Months Ended
International	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Gross written premiums	$	248,459	$	326,053	$	878,637	$	923,649
Net written premiums		105,550		158,038		402,078		457,663
Premiums earned	$	121,611	$	151,050	$	426,419	$	479,989
Incurred losses and LAE		29,309		104,570		191,837		514,260
Commission and brokerage		19,692		35,686		88,432		105,755
Other underwriting expenses		8,246		7,549		21,532		20,938
Underwriting gain (loss)	$	64,364	$	3,245	$	124,618	$	(160,964	)

Insurance [Member]

Segment Reporting Information [Line Items]

Schedule Of Underwriting Results For Operating Segments

	Three Months Ended						Nine Months Ended
Insurance	September 30,						September 30,
(Dollars in thousands)	2012			2011			2012			2011
Gross written premiums	$	328,930		$	236,294		$	783,872		$	750,283
Net written premiums		133,432			114,328			348,328			366,223
Premiums earned	$	124,105		$	124,282		$	343,465		$	362,212
Incurred losses and LAE		105,415			120,332			273,617			302,038
Commission and brokerage		10,680			11,858			22,968			27,781
Other underwriting expenses		24,926			24,316			71,478			68,589
Underwriting gain (loss)	$	(16,916	)	$	(32,224	)	$	(24,598	)	$	(36,196	)

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Investments (Summary Of Aggregate Market Value And Gross Unrealized Depreciation Of Fixed Maturity And Equity Securities By Security Type) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Schedule of Available-for-sale Securities [Line Items]
Fixed maturity securities, Less than 12 months, Market Value	$ 235,234	$ 595,297
Fixed maturity securities, Less than 12 months, Gross Unrealized Depreciation	(2,647)	(13,710)
Fixed maturity securities, Greater than 12 months, Market Value	268,451	249,795
Fixed maturity securities, Greater than 12 months, Gross Unrealized Depreciation	(19,502)	(21,763)
Available-for-sale Securities, Market Value, Total	503,685	845,092
Available-for-sale Securities, Gross Unrealized Depreciation, Total	(22,149)	(35,473)
Fixed Maturity Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed maturity securities, Less than 12 months, Market Value	235,234	595,297
Fixed maturity securities, Less than 12 months, Gross Unrealized Depreciation	(2,647)	(13,710)
Fixed maturity securities, Greater than 12 months, Market Value	268,438	249,785
Fixed maturity securities, Greater than 12 months, Gross Unrealized Depreciation	(19,500)	(21,758)
Available-for-sale Securities, Market Value, Total	503,672	845,082
Available-for-sale Securities, Gross Unrealized Depreciation, Total	(22,147)	(35,468)
U.S. Treasury Securities And Obligations Of U.S. Government Agencies And Corporations [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed maturity securities, Greater than 12 months, Market Value	11,543	3,452
Fixed maturity securities, Greater than 12 months, Gross Unrealized Depreciation	(817)	(287)
Available-for-sale Securities, Market Value, Total	11,543	3,452
Available-for-sale Securities, Gross Unrealized Depreciation, Total	(817)	(287)
US States and Political Subdivisions Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed maturity securities, Greater than 12 months, Market Value	5,779	7,518
Fixed maturity securities, Greater than 12 months, Gross Unrealized Depreciation	(53)	(525)
Available-for-sale Securities, Market Value, Total	5,779	7,518
Available-for-sale Securities, Gross Unrealized Depreciation, Total	(53)	(525)
Corporate Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed maturity securities, Less than 12 months, Market Value	56,805	342,959
Fixed maturity securities, Less than 12 months, Gross Unrealized Depreciation	(411)	(8,449)
Fixed maturity securities, Greater than 12 months, Market Value	108,100	75,998
Fixed maturity securities, Greater than 12 months, Gross Unrealized Depreciation	(5,787)	(9,327)
Available-for-sale Securities, Market Value, Total	164,905	418,957
Available-for-sale Securities, Gross Unrealized Depreciation, Total	(6,198)	(17,776)
Asset-backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed maturity securities, Less than 12 months, Market Value		819
Fixed maturity securities, Less than 12 months, Gross Unrealized Depreciation		(6)
Available-for-sale Securities, Market Value, Total		819
Available-for-sale Securities, Gross Unrealized Depreciation, Total		(6)
Commercial Mortgage Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed maturity securities, Less than 12 months, Market Value		9,292
Fixed maturity securities, Less than 12 months, Gross Unrealized Depreciation		(1,266)
Fixed maturity securities, Greater than 12 months, Market Value	10,332
Fixed maturity securities, Greater than 12 months, Gross Unrealized Depreciation	(404)
Available-for-sale Securities, Market Value, Total	10,332	9,292
Available-for-sale Securities, Gross Unrealized Depreciation, Total	(404)	(1,266)
Agency Residential [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed maturity securities, Less than 12 months, Market Value	74,338	151,951
Fixed maturity securities, Less than 12 months, Gross Unrealized Depreciation	(354)	(1,695)
Fixed maturity securities, Greater than 12 months, Market Value	12,983	7,199
Fixed maturity securities, Greater than 12 months, Gross Unrealized Depreciation	(187)	(67)
Available-for-sale Securities, Market Value, Total	87,321	159,150
Available-for-sale Securities, Gross Unrealized Depreciation, Total	(541)	(1,762)
Non-agency Residential [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed maturity securities, Less than 12 months, Market Value		41
Fixed maturity securities, Greater than 12 months, Market Value	496	20,693
Fixed maturity securities, Greater than 12 months, Gross Unrealized Depreciation	(25)	(320)
Available-for-sale Securities, Market Value, Total	496	20,734
Available-for-sale Securities, Gross Unrealized Depreciation, Total	(25)	(320)
Foreign Government Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed maturity securities, Less than 12 months, Market Value	37,667	12,777
Fixed maturity securities, Less than 12 months, Gross Unrealized Depreciation	(592)	(269)
Fixed maturity securities, Greater than 12 months, Market Value	38,281	40,743
Fixed maturity securities, Greater than 12 months, Gross Unrealized Depreciation	(3,584)	(2,333)
Available-for-sale Securities, Market Value, Total	75,948	53,520
Available-for-sale Securities, Gross Unrealized Depreciation, Total	(4,176)	(2,602)
Foreign Corporate Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed maturity securities, Less than 12 months, Market Value	66,424	77,458
Fixed maturity securities, Less than 12 months, Gross Unrealized Depreciation	(1,290)	(2,025)
Fixed maturity securities, Greater than 12 months, Market Value	80,924	94,182
Fixed maturity securities, Greater than 12 months, Gross Unrealized Depreciation	(8,643)	(8,899)
Available-for-sale Securities, Market Value, Total	147,348	171,640
Available-for-sale Securities, Gross Unrealized Depreciation, Total	(9,933)	(10,924)
Equity Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed maturity securities, Greater than 12 months, Market Value	13	10
Fixed maturity securities, Greater than 12 months, Gross Unrealized Depreciation	(2)	(5)
Available-for-sale Securities, Market Value, Total	13	10
Available-for-sale Securities, Gross Unrealized Depreciation, Total	$ (2)	$ (5)

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Credit Facility (Summary Of Costs Incurred In Connection With Credit Facilities) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Credit Facility [Abstract]
Credit facility fees incurred	$ 137	$ 163	$ 442	$ 341

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Related-Party Transactions (Liability Limits For Any Losses Per One Occurrence) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012
Related-Party Transactions [Abstract]
Liability Limits, Losses per one occurrence, Exceeding	$ 100,000
Liability Limits, Losses per one occurrence, Not to Exceed	$ 150,000

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
ASSETS:
Fixed maturities - available for sale, at market value (amortized cost: 2012, $5,060,968; 2011, $4,880,654)	$ 5,326,118	$ 5,107,028
Fixed maturities - available for sale, at fair value	52,217	113,606
Equity securities - available for sale, at market value (cost: 2012, $15; 2011, $15)	13	10
Equity securities - available for sale, at fair value	1,247,445	1,207,053
Short-term investments	640,698	423,663
Other invested assets (cost: 2012, $420,510; 2011, $379,342)	420,510	379,342
Other invested assets, at fair value	1,039,648	817,352
Cash	309,059	348,267
Total investments and cash	9,035,708	8,396,321
Accrued investment income	56,639	55,849
Premiums receivable	990,571	856,375
Reinsurance receivables - unaffiliated	633,893	570,128
Reinsurance receivables - affiliated	2,851,472	2,901,174
Funds held by reinsureds	153,312	176,156
Deferred acquisition costs	90,088	166,806
Prepaid reinsurance premiums	597,498	625,391
Deferred tax asset	208,090	366,490
Income taxes recoverable	16,153	39,014
Other assets	235,593	195,476
TOTAL ASSETS	14,869,017	14,349,180
LIABILITIES:
Reserve for losses and loss adjustment expenses	7,954,633	8,290,619
Unearned premium reserve	1,143,252	1,239,705
Funds held under reinsurance treaties	84,798	123,479
Losses in the course of payment	93,575	11,002
Commission reserves	32,979	40,353
Other net payable to reinsurers	894,866	629,871
5.4% Senior notes due 10/15/2014	249,894	249,858
6.6% Long term notes due 5/1/2067	238,356	238,354
Junior subordinated debt securities payable	329,897	329,897
Accrued interest on debt and borrowings	12,092	4,781
Unsettled securities payable	74,097	8,793
Other liabilities	276,651	241,075
Total liabilities	11,385,090	11,407,787
Commitments and Contingencies (Note 6)
STOCKHOLDER'S EQUITY:
Common stock, par value: $0.01; 3,000 shares authorized; 1,000 shares issued and outstanding (2012 and 2011)
Additional paid-in capital	338,478	333,416
Accumulated other comprehensive income (loss), net of deferred income tax expense (benefit) of $116,254 at 2012 and $94,118 at 2011	215,900	174,790
Retained earnings	2,929,549	2,433,187
Total stockholder's equity	3,483,927	2,941,393
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY	$ 14,869,017	$ 14,349,180

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Fair Value (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012
Fair Value [Abstract]
Fair value of public equity portfolio	$ 52,009

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Consolidated Statements Of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ 155,985	$ 261	$ 496,362	$ (88,465)
Adjustments to reconcile net income to net cash provided by operating activities:
Decrease (increase) in premiums receivable	(233,296)	(21,017)	(129,749)	(149,561)
Decrease (increase) in funds held by reinsureds, net	2,646	(94,290)	(14,878)	(102,102)
Decrease (increase) in reinsurance receivables	(39,772)	112,376	(9,281)	(243,523)
Decrease (increase) in current income taxes	18,495	16,559	23,123	15,515
Decrease (increase) in deferred tax asset	22,640	(137,225)	136,264	(122,876)
Decrease (increase) in prepaid reinsurance premiums	(66,455)	(33,514)	28,866	28,649
Increase (decrease) in reserve for losses and loss adjustment expenses	(109,811)	(96,587)	(406,946)	489,779
Increase (decrease) in unearned premiums	98,935	29,928	(102,067)	(73,434)
Increase (decrease) in other net payable to reinsurers	220,948	66,568	263,498	155,372
Change in equity adjustments in limited partnerships	(8,800)	(12,190)	(28,850)	(44,544)
Change in other assets and liabilities, net	59,520	28,444	158,864	44,148
Non-cash compensation expense	1,737	1,584	4,981	4,638
Amortization of bond premium (accrual of bond discount)	3,330	(17)	12,939	6,897
Amortization of underwriting discount on senior notes	13	12	38	36
Net realized capital (gains) losses	(95,943)	179,036	(354,673)	206,744
Net cash provided by (used in) operating activities	30,172	39,928	78,491	127,273
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from fixed maturities matured/called - available for sale, at market value	273,497	262,235	648,218	525,768
Proceeds from fixed maturities matured/called - available for sale, at fair value	1,300		1,300	12,775
Proceeds from fixed maturities sold - available for sale, at market value	114,610	255,913	290,911	1,042,803
Proceeds from fixed maturities sold - available for sale, at fair value	11,783	12,512	72,926	62,632
Proceeds from equity securities sold - available for sale, at market value				27,096
Proceeds from equity securities sold - available for sale, at fair value	85,277	61,080	377,157	150,776
Distributions from other invested assets	16,130	13,487	31,513	103,262
Cost of fixed maturities acquired - available for sale, at market value	(404,009)	(285,414)	(1,066,080)	(995,210)
Cost of fixed maturities acquired - available for sale, at fair value	(1,658)	(9,801)	(7,164)	(25,025)
Cost of equity securities acquired - available for sale, at market value				(27,059)
Cost of equity securities acquired - available for sale, at fair value	(107,330)	(340,493)	(288,218)	(679,764)
Cost of other invested assets acquired	(20,065)	(2,393)	(43,831)	(47,471)
Cost of other invested assets acquired, at fair value				(37,611)
Cost of businesses acquired				(63,100)
Net change in short-term investments	(58,681)	29,080	(216,270)	(18,105)
Net change in unsettled securities transactions	33,600	(14,007)	38,712	30,834
Net cash provided by (used in) investing activities	(55,546)	(17,801)	(160,826)	62,601
CASH FLOWS FROM FINANCING ACTIVITIES:
Tax benefit from share-based compensation	(72)	73	81	242
Revolving credit borrowings		(40,000)		(50,000)
Net cash provided by (used in) financing activities	(72)	(39,927)	81	(49,758)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	28,772	(5,553)	43,046	6,804
Net increase (decrease) in cash	3,326	(23,353)	(39,208)	146,920
Cash, beginning of period	305,733	288,365	348,267	118,092
Cash, end of period	309,059	265,012	309,059	265,012
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid (recovered)	27,119	4,149	36,498	(16,616)
Interest paid	5,202	5,228	30,244	30,269
Non-cash transaction:
Net assets acquired and liabilities assumed from business acquisitions		$ 19,130		$ 19,130

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Long Term Subordinated Notes (Schedule Of Interest Expense Incurred In Connection With Long Term Subordinated Notes) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Long Term Subordinated Notes [Abstract]
Interest expense incurred	$ 3,937	$ 3,937	$ 11,811	$ 11,811

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Investments (Narrative) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2012	Dec. 31, 2011
Investment [Line Items]
Fixed maturity securities - available for sale, at market value	$ 5,326,118	$ 5,107,028
Percentage threshold that triggers a review of available for sale debt securities for declines in market value	80.00%
Aggregate market value of investments in unrealized loss position	503,685	845,092
Gross unrealized losses on investments in unrealized loss position	22,149	35,473
Percentage threshold of unrealized losses not exceeded by any one single issuer	0.03%	0.09%
Fixed maturity securities, duration of unrealized loss, less than 12 months, gross unrealized depreciation	2,647	13,710
Fixed maturity securities, duration of unrealized loss, greater than 12 months, gross unrealized depreciation	19,500	21,758
Additional contractual commitments	71,741
Other invested assets, at fair value, shares	9,719,971
Percentage of shares representing the total outstanding shares	15.80%
Minimum [Member]
Investment [Line Items]
Limited partnership financial reporting lag time, months	1 month
Maximum [Member]
Investment [Line Items]
Limited partnership financial reporting lag time, months	3 months
Foreign Government Debt Securities [Member]
Investment [Line Items]
Fixed maturity securities - available for sale, at market value	812,688
Aggregate market value of investments in unrealized loss position	75,948	53,520
Gross unrealized losses on investments in unrealized loss position	4,176	2,602
European Sovereign Securities [Member]
Investment [Line Items]
Fixed maturity securities - available for sale, at market value	89,412
Percentage threshold maximum of securities held in sovereign debt	5.00%
France [Member]
Investment [Line Items]
Percentage of securities held in sovereign debt of a specific country	48.60%
United Kingdom [Member]
Investment [Line Items]
Percentage of securities held in sovereign debt of a specific country	15.10%
Sweden [member]
Investment [Line Items]
Percentage of securities held in sovereign debt of a specific country	11.80%
Netherlands [Member]
Investment [Line Items]
Percentage of securities held in sovereign debt of a specific country	7.30%
Austria [Member]
Investment [Line Items]
Percentage of securities held in sovereign debt of a specific country	5.40%
Investment Grade [Member]
Investment [Line Items]
Fixed maturity securities, duration of unrealized loss, less than 12 months, gross unrealized depreciation	2,039	5,635
Fixed maturity securities, duration of unrealized loss, greater than 12 months, gross unrealized depreciation	17,181	15,880
Sub-prime and Alt-A Loans [Member]
Investment [Line Items]
Fixed maturity securities, duration of unrealized loss, greater than 12 months, gross unrealized depreciation	$ 25	$ 56

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Segment Reporting (Schedule Of Gross Written Premium Derived From Largest Non-U.S. Market) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Segment Reporting Information [Line Items]
Percentage threshold of company revenue not exceeded by any other country	5.00%	5.00%	5.00%	5.00%
Canada [Member]
Segment Reporting Information [Line Items]
Gross written premiums	33,891	73,543	109,166	156,727

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Acquisitions

9 Months Ended

Sep. 30, 2012

Acquisitions [Abstract]

Acquisitions

16.  ACQUISITIONS

During the first quarter of 2011, the Company made several acquisitions to expand its domestic and Canadian insurance operations.  Below are descriptions of the transactions.

On January 2,2011, the Company acquired the entire business and operations of Heartland Crop Insurance, Inc. ("Heartland") of Topeka, Kansas for $55,000 thousand in cash, plus contingent payments in future periods based upon achievement of performance targets. Heartland is a managing general agent specializing in crop insurance.

On January 28, 2011, the Company acquired the entire business and operations of Premiere of Toronto, Canada.  Premiere is a managing general agent specializing in entertainment and sports and leisure risks.  On January 31, 2011, the Company acquired the renewal rights and operations of the financial lines business of Executive Risk Insurance Services, Ltd. ("Executive Risk") of Toronto, Canada. The financial lines business of Executive Risk mainly underwrites Directors and Officers Liability, Fidelity, and Errors and Omissions Liability.

Overall, the Company recorded $35,068 thousand of goodwill and $26,903 thousand of intangible assets related to these acquisitions, which are reported as part of other assets within the consolidated balance sheets.  All intangible assets recorded as part of these acquisitions will be amortized on a straight line basis over seven years.

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Investments (Summary Of Unrealized Appreciation (Depreciation) Of Available For Sale, Fixed Maturity And Equity Security Investments) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Fixed Maturity Securities [Member]
Investment [Line Items]
Amortized Cost	$ 5,060,968	$ 4,880,654
Unrealized Appreciation	287,297	261,842
Unrealized Depreciation	(22,147)	(35,468)
Market Value	5,326,118	5,107,028
U.S. Treasury Securities And Obligations Of U.S. Government Agencies And Corporations [Member]
Investment [Line Items]
Amortized Cost	77,754	77,351
Unrealized Appreciation	1,658	2,475
Unrealized Depreciation	(817)	(287)
Market Value	78,595	79,539
US States and Political Subdivisions Debt Securities [Member]
Investment [Line Items]
Amortized Cost	1,275,967	1,558,615
Unrealized Appreciation	90,415	102,815
Unrealized Depreciation	(53)	(525)
Market Value	1,366,329	1,660,905
Corporate Debt Securities [Member]
Investment [Line Items]
Amortized Cost	1,342,335	1,200,941
Unrealized Appreciation	65,091	45,070
Unrealized Depreciation	(6,198)	(17,776)
Market Value	1,401,228	1,228,235
Asset-backed Securities [Member]
Investment [Line Items]
Amortized Cost	48,695	44,351
Unrealized Appreciation	2,228	758
Unrealized Depreciation		(6)
Market Value	50,923	45,103
Commercial Mortgage Backed Securities [Member]
Investment [Line Items]
Amortized Cost	45,345	41,953
Unrealized Appreciation	8,066	7,187
Unrealized Depreciation	(404)	(1,266)
Market Value	53,007	47,874
Agency Residential [Member]
Investment [Line Items]
Amortized Cost	559,808	528,946
Unrealized Appreciation	15,901	16,209
Unrealized Depreciation	(541)	(1,762)
Market Value	575,168	543,393
Non-agency Residential [Member]
Investment [Line Items]
Amortized Cost	2,148	24,139
Unrealized Appreciation	357	470
Unrealized Depreciation	(25)	(320)
Market Value	2,480	24,289
Foreign Government Debt Securities [Member]
Investment [Line Items]
Amortized Cost	759,964	733,814
Unrealized Appreciation	56,900	57,437
Unrealized Depreciation	(4,176)	(2,602)
Market Value	812,688	788,649
Foreign Corporate Debt Securities [Member]
Investment [Line Items]
Amortized Cost	948,952	670,544
Unrealized Appreciation	46,681	29,421
Unrealized Depreciation	(9,933)	(10,924)
Market Value	985,700	689,041
Equity Securities [Member]
Investment [Line Items]
Amortized Cost	15	15
Unrealized Depreciation	(2)	(5)
Market Value	$ 13	$ 10

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Investments (Tables)

9 Months Ended

Sep. 30, 2012

Investments [Abstract]

Summary Of Unrealized Appreciation (Depreciation) Of Available For Sale, Fixed Maturity And Equity Security Investments

	At September 30, 2012
	Amortized		Unrealized		Unrealized			Market
(Dollars in thousands)	Cost		Appreciation		Depreciation			Value
Fixed maturity securities
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	77,754	$	1,658	$	(817	)	$	78,595
Obligations of U.S. states and political subdivisions		1,275,967		90,415		(53	)		1,366,329
Corporate securities		1,342,335		65,091		(6,198	)		1,401,228
Asset-backed securities		48,695		2,228		-			50,923
Mortgage-backed securities
Commercial		45,345		8,066		(404	)		53,007
Agency residential		559,808		15,901		(541	)		575,168
Non-agency residential		2,148		357		(25	)		2,480
Foreign government securities		759,964		56,900		(4,176	)		812,688
Foreign corporate securities		948,952		46,681		(9,933	)		985,700
Total fixed maturity securities	$	5,060,968	$	287,297	$	(22,147	)	$	5,326,118
Equity securities	$	15	$	-	$	(2	)	$	13

	At December 31, 2011
	Amortized		Unrealized		Unrealized			Market
(Dollars in thousands)	Cost		Appreciation		Depreciation			Value
Fixed maturity securities
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	77,351	$	2,475	$	(287	)	$	79,539
Obligations of U.S. states and political subdivisions		1,558,615		102,815		(525	)		1,660,905
Corporate securities		1,200,941		45,070		(17,776	)		1,228,235
Asset-backed securities		44,351		758		(6	)		45,103
Mortgage-backed securities
Commercial		41,953		7,187		(1,266	)		47,874
Agency residential		528,946		16,209		(1,762	)		543,393
Non-agency residential		24,139		470		(320	)		24,289
Foreign government securities		733,814		57,437		(2,602	)		788,649
Foreign corporate securities		670,544		29,421		(10,924	)		689,041
Total fixed maturity securities	$	4,880,654	$	261,842	$	(35,468	)	$	5,107,028
Equity securities	$	15	$	-	$	(5	)	$	10

Summary Of Pre-Tax Cumulative Unrealized Appreciation (Depreciation) On Corporate Securities

(Dollars in thousands)	At September 30, 2012		At December 31, 2011
Pre-tax cumulative unrealized appreciation (depreciation)	$	490	$	635

Summary Of Amortized Cost And Market Value Of Fixed Maturity Securities, By Contractual Maturity

	At September 30, 2012				At December 31, 2011
	Amortized		Market		Amortized		Market
(Dollars in thousands)	Cost		Value		Cost		Value
Fixed maturity securities – available for sale
Due in one year or less	$	351,241	$	349,065	$	224,406	$	223,507
Due after one year through five years		2,272,775		2,360,911		2,055,299		2,129,437
Due after five years through ten years		977,030		1,040,976		955,253		1,009,893
Due after ten years		803,926		893,588		1,006,307		1,083,532
Asset-backed securities		48,695		50,923		44,351		45,103
Mortgage-backed securities
Commercial		45,345		53,007		41,953		47,874
Agency residential		559,808		575,168		528,946		543,393
Non-agency residential		2,148		2,480		24,139		24,289
Total fixed maturity securities	$	5,060,968	$	5,326,118	$	4,880,654	$	5,107,028

Summary Of Changes In Net Unrealized Appreciation (Depreciation) For The Company's Investments

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(Dollars in thousands)	2012			2011			2012			2011
Increase (decrease) during the period between the market value and cost
of investments carried at market value, and deferred taxes thereon:
Fixed maturity securities	$	28,226		$	11,911		$	38,923		$	51,341
Fixed maturity securities, other-than-temporary impairment		(77	)		(137	)		(146	)		(132	)
Equity securities		-			(1	)		3			(1	)
Other invested assets		-			215			-			(1,515	)
Change in unrealized  appreciation (depreciation), pre-tax		28,149			11,988			38,780			49,693
Deferred tax benefit (expense)		(9,879	)		(4,243	)		(13,624	)		(17,438	)
Deferred tax benefit (expense), other-than-temporary impairment		27			48			51			46
Change in unrealized appreciation (depreciation),
net of deferred taxes, included in stockholder's equity	$	18,297		$	7,793		$	25,207		$	32,301

Summary Of Aggregate Market Value And Gross Unrealized Depreciation Of Fixed Maturity And Equity Securities, By Security Type

	Duration of Unrealized Loss at September 30, 2012 By Security Type
	Less than 12 months					Greater than 12 months					Total
			Gross					Gross					Gross
			Unrealized					Unrealized					Unrealized
(Dollars in thousands)	Market Value		Depreciation			Market Value		Depreciation			Market Value		Depreciation
Fixed maturity securities - available for sale
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	-	$	-		$	11,543	$	(817	)	$	11,543	$	(817	)
Obligations of U.S. states and political subdivisions		-		-			5,779		(53	)		5,779		(53	)
Corporate securities		56,805		(411	)		108,100		(5,787	)		164,905		(6,198	)
Asset-backed securities		-		-			-		-			-		-
Mortgage-backed securities
Commercial		-		-			10,332		(404	)		10,332		(404	)
Agency residential		74,338		(354	)		12,983		(187	)		87,321		(541	)
Non-agency residential		-		-			496		(25	)		496		(25	)
Foreign government securities		37,667		(592	)		38,281		(3,584	)		75,948		(4,176	)
Foreign corporate securities		66,424		(1,290	)		80,924		(8,643	)		147,348		(9,933	)
Total fixed maturity securities	$	235,234	$	(2,647	)	$	268,438	$	(19,500	)	$	503,672	$	(22,147	)
Equity securities		-		-			13		(2	)		13		(2	)
Total	$	235,234	$	(2,647	)	$	268,451	$	(19,502	)	$	503,685	$	(22,149	)

	Duration of Unrealized Loss at December 31, 2011 By Security Type
	Less than 12 months					Greater than 12 months					Total
			Gross					Gross					Gross
			Unrealized					Unrealized					Unrealized
(Dollars in thousands)	Market Value		Depreciation			Market Value		Depreciation			Market Value		Depreciation
Fixed maturity securities - available for sale
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	-	$	-		$	3,452	$	(287	)	$	3,452	$	(287	)
Obligations of U.S. states and political subdivisions		-		-			7,518		(525	)		7,518		(525	)
Corporate securities		342,959		(8,449	)		75,998		(9,327	)		418,957		(17,776	)
Asset-backed securities		819		(6	)		-		-			819		(6	)
Mortgage-backed securities
Commercial		9,292		(1,266	)		-		-			9,292		(1,266	)
Agency residential		151,951		(1,695	)		7,199		(67	)		159,150		(1,762	)
Non-agency residential		41		-			20,693		(320	)		20,734		(320	)
Foreign government securities		12,777		(269	)		40,743		(2,333	)		53,520		(2,602	)
Foreign corporate securities		77,458		(2,025	)		94,182		(8,899	)		171,640		(10,924	)
Total fixed maturity securities	$	595,297	$	(13,710	)	$	249,785	$	(21,758	)	$	845,082	$	(35,468	)
Equity securities		-		-			10		(5	)		10		(5	)
Total	$	595,297	$	(13,710	)	$	249,795	$	(21,763	)	$	845,092	$	(35,473	)

Summary Of Aggregate Market Value And Gross Unrealized Depreciation Of Fixed Maturity And Equity Securities, By Contractual Maturity

	Duration of Unrealized Loss at September 30, 2012 By Maturity
	Less than 12 months					Greater than 12 months					Total
			Gross					Gross					Gross
			Unrealized					Unrealized					Unrealized
(Dollars in thousands)	Market Value		Depreciation			Market Value		Depreciation			Market Value		Depreciation
Fixed maturity securities
Due in one year or less	$	12,962	$	(287	)	$	35,341	$	(5,663	)	$	48,303	$	(5,950	)
Due in one year through five years		116,020		(1,805	)		149,214		(11,175	)		265,234		(12,980	)
Due in five years through ten years		29,938		(175	)		45,936		(1,587	)		75,874		(1,762	)
Due after ten years		1,976		(26	)		14,136		(459	)		16,112		(485	)
Asset-backed securities		-		-			-		-			-		-
Mortgage-backed securities		74,338		(354	)		23,811		(616	)		98,149		(970	)
Total fixed maturity securities	$	235,234	$	(2,647	)	$	268,438	$	(19,500	)	$	503,672	$	(22,147	)

	Duration of Unrealized Loss at December 31, 2011 By Maturity
	Less than 12 months					Greater than 12 months					Total
			Gross					Gross					Gross
			Unrealized					Unrealized					Unrealized
(Dollars in thousands)	Market Value		Depreciation			Market Value		Depreciation			Market Value		Depreciation
Fixed maturity securities
Due in one year or less	$	9,583	$	(59	)	$	26,204	$	(4,486	)	$	35,787	$	(4,545	)
Due in one year through five years		213,809		(4,754	)		137,972		(9,576	)		351,781		(14,330	)
Due in five years through ten years		186,061		(5,484	)		37,964		(2,391	)		224,025		(7,875	)
Due after ten years		23,741		(446	)		19,753		(4,918	)		43,494		(5,364	)
Asset-backed securities		819		(6	)		-		-			819		(6	)
Mortgage-backed securities		161,284		(2,961	)		27,892		(387	)		189,176		(3,348	)
Total fixed maturity securities	$	595,297	$	(13,710	)	$	249,785	$	(21,758	)	$	845,082	$	(35,468	)

Summary Of Components Of Net Investment Income

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(Dollars in thousands)	2012			2011			2012			2011
Fixed maturity securities	$	55,495		$	58,248		$	164,248		$	178,006
Equity securities		8,849			8,726			29,281			20,366
Short-term investments and cash		330			296			758			890
Other invested assets
Limited partnerships		9,096			12,399			29,940			44,753
Dividends from Parent's shares		4,666			4,665			13,997			13,979
Other		1,427			(1,520	)		2,453			3,203
Total gross investment income		79,863			82,814			240,677			261,197
Interest debited (credited) and other investment expense		(3,521	)		(4,489	)		(8,887	)		(11,281	)
Total net investment income	$	76,342		$	78,325		$	231,790		$	249,916

Summary Of Components Of Net Realized Capital Gains (Losses)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(Dollars in thousands)	2012			2011			2012			2011
Fixed maturity securities, market value:
Other-than-temporary impairments	$	(486	)	$	(911	)	$	(6,627	)	$	(14,522	)
Gains (losses) from sales		85			2,699			4,018			(15,589	)
Fixed maturity securities, fair value:
Gains (losses) from sales		512			(16	)		5,539			(966	)
Gains (losses) from fair value adjustments		298			(5,014	)		1,623			(8,537	)
Equity securities, market value:
Gains (losses) from sales		-			-			-			37
Equity securities, fair value:
Gains (losses) from sales		3,154			637			23,101			2,303
Gains (losses) from fair value adjustments		58,667			(153,395	)		104,739			(115,288	)
Other invested assets, fair value:
Gains (losses) from fair value adjustments		33,729			(23,036	)		222,296			(54,181	)
Short-term investment gains (losses)		(16	)		-			(16	)		(1	)
Total net realized capital gains (losses)	$	95,943		$	(179,036	)	$	354,673		$	(206,744	)

Summary Of Gross Gains (Losses) From Sales Of Fixed Maturity And Equity Securities

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(Dollars in thousands)	2012			2011			2012			2011
Proceeds from sales of fixed maturity securities	$	126,393		$	268,425		$	363,837		$	1,105,435
Gross gains from sales		2,704			11,572			15,371			29,154
Gross losses from sales		(2,107	)		(8,889	)		(5,814	)		(45,709	)
Proceeds from sales of equity secuities	$	85,277		$	61,080		$	377,157		$	177,872
Gross gains from sales		5,204			6,022			33,005			9,124
Gross losses from sales		(2,050	)		(5,385	)		(9,904	)		(6,784	)

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Related-Party Transactions (Purchase Price For Common Shares) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012
Related-Party Transactions [Abstract]
Total purchase price	$ 835,371

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General

9 Months Ended

Sep. 30, 2012

General [Abstract]

General

1.  GENERAL

As used in this document, "Holdings" means Everest Reinsurance Holdings, Inc., a Delaware company and direct subsidiary of Everest Underwriting Group (Ireland) Limited ("Holdings Ireland"); "Group" means Everest Re Group, Ltd. (Holdings Ireland's parent); "Bermuda Re" means Everest Reinsurance (Bermuda), Ltd., a subsidiary of Group; "Everest Re" means Everest Reinsurance Company and its subsidiaries, a subsidiary of Holdings (unless the context otherwise requires); and the "Company" means Holdings and its subsidiaries.

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Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2012	Dec. 31, 2011
Fixed maturities - available for sale, amortized cost	$ 5,060,968	$ 4,880,654
Equity securities - available for sale, cost	15	15
Other invested assets, cost	420,510	379,342
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	3,000	3,000
Common stock, shares issued	1,000	1,000
Common stock, shares outstanding	1,000	1,000
Accumulated other comprehensive income (loss), deferred income tax expense (benefit)	$ 116,254	$ 94,118
Senior Notes [Member]
Debt instrument, stated interest rate	5.40%	5.40%
Debt instrument, maturity date	Oct. 15, 2014	Oct. 15, 2014
Subordinated Debt [Member]
Debt instrument, stated interest rate	6.60%	6.60%
Debt instrument, maturity date	May 01, 2067	May 01, 2067

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Long Term Subordinated Notes

9 Months Ended

Sep. 30, 2012

Long Term Subordinated Notes [Abstract]

Long Term Subordinated Notes

11.  LONG TERM SUBORDINATED NOTES

The table below displays Holdings' outstanding fixed to floating rate long term subordinated notes.  Market value is based on quoted market prices, but due to limited trading activity, these subordinated notes are considered Level 2 in the fair value hierarchy.

Maturity Date

September 30, 2012

December 31, 2011

Original

Consolidated Balance

Consolidated Balance

(Dollars in thousands)

Date Issued

Principal Amount

Scheduled

Final

Sheet Amount

Market Value

Sheet Amount

Market Value

6.6% Long term subordinated notes

04/26/2007

$

400,000

05/15/2037

05/01/2067

$

238,356

$

244,522

$

238,354

$

210,195

During the fixed rate interest period from May 3, 2007 through May 14, 2017, interest will be at the annual rate of 6.6%, payable semi-annually in arrears on November 15 and May 15 of each year, commencing on November 15, 2007, subject to Holdings' right to defer interest on one or more occasions for up to ten consecutive years.  During the floating rate interest period from May 15, 2017 through maturity, interest will be based on the 3 month LIBOR plus 238.5 basis points, reset quarterly, payable quarterly in arrears on February 15, May 15, August 15 and November 15 of each year, subject to Holdings' right to defer interest on one or more occasions for up to ten consecutive years.  Deferred interest will accumulate interest at the applicable rate compounded semi-annually for periods prior to May 15, 2017, and compounded quarterly for periods from and including May 15, 2017.

Holdings can redeem the long term subordinated notes prior to May 15, 2017, in whole but not in part at the applicable redemption price, which will equal the greater of (a) 100% of the principal amount being redeemed and (b) the present value of the principal payment on May 15, 2017 and scheduled payments of interest that would have accrued from the redemption date to May 15, 2017 on the long term subordinated notes being redeemed, discounted to the redemption date on a semi-annual basis at a discount rate equal to the treasury rate plus an applicable spread of either 0.25% or 0.50%, in each case plus accrued and unpaid interest.  Holdings may redeem the long term subordinated notes on or after May 15, 2017, in whole or in part at 100% of the principal amount plus accrued and unpaid interest; however, redemption on or after the scheduled maturity date and prior to May 1, 2047 is subject to a replacement capital covenant.  This covenant is for the benefit of certain senior note holders and it mandates that Holdings receive proceeds from the sale of another subordinated debt issue, of at least similar size, before it may redeem the subordinated notes.

On March 19, 2009, Group announced the commencement of a cash tender offer for any and all of the 6.60% fixed to floating rate long term subordinated notes.  Upon expiration of the tender offer, the Company had reduced its outstanding debt by $161,441 thousand.

Interest expense incurred in connection with these long term subordinated notes is as follows for the periods indicated:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Interest expense incurred	$	3,937	$	3,937	$	11,811	$	11,811

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Document And Entity Information	9 Months Ended
	Sep. 30, 2012	Nov. 01, 2012
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3
Entity Registrant Name	EVEREST REINSURANCE HOLDINGS INC
Entity Central Index Key	0000914748
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		1,000

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Junior Subordinated Debt Securities Payable

9 Months Ended

Sep. 30, 2012

Junior Subordinated Debt Securities Payable [Abstract]

Junior Subordinated Debt Securities Payable

12.  JUNIOR SUBORDINATED DEBT SECURITIES PAYABLE

The following table displays Holdings' outstanding junior subordinated debt securities due to Everest Re Capital Trust II ("Capital Trust II"), a wholly owned finance subsidiary of Holdings.  Fair value is primarily based on the quoted market price of the related trust preferred securities, and as such, these securities are considered Level 2 under the fair value hierarchy.

					September 30, 2012				December 31, 2011
					Consolidated Balance				Consolidated Balance
(Dollars in thousands)	Date Issued	Date Due	Amount Issued		Sheet Amount		Fair Value		Sheet Amount		Fair Value
6.20% Junior subordinated debt securities	03/29/2004	03/29/2034	$	329,897	$	329,897	$	331,177	$	329,897	$	326,313

Holdings may redeem the junior subordinated debt securities before their maturity at 100% of their principal amount plus accrued interest as of the date of redemption.  The securities may be redeemed, in whole or in part, on one or more occasions at any time on or after March 30, 2009; or at any time, in whole, but not in part, within 90 days of the occurrence and continuation of a determination that the Trust may become subject to tax or the Investment Company Act.

Interest expense incurred in connection with these junior subordinated debt securities is as follows for the periods indicated:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Interest expense incurred	$	5,113	$	5,113	$	15,340	$	15,340

Holdings considers that the mechanisms and obligations relating to the trust preferred securities, taken together, constitute a full and unconditional guarantee by Holdings of Capital Trust II's payment obligations with respect to their trust preferred securities.

Capital Trust II will redeem all of the outstanding trust preferred securities when the junior subordinated debt securities are paid at maturity on March 29, 2034.  The Company may elect to redeem the junior subordinated debt securities, in whole or in part, at any time on or after March 30, 2009.  If such an early redemption occurs, the outstanding trust preferred securities would also be proportionately redeemed.

There are certain regulatory and contractual restrictions on the ability of Holdings' operating subsidiaries to transfer funds to Holdings in the form of cash dividends, loans or advances.  The insurance laws of the State of Delaware, where Holdings' direct insurance subsidiaries are domiciled, require regulatory approval before those subsidiaries can pay dividends or make loans or advances to Holdings that exceed certain statutory thresholds.  In addition, the terms of Holdings Credit Facility (discussed in Note 8) require Everest Re, Holdings' principal insurance subsidiary, to maintain a certain statutory surplus level as measured at the end of each fiscal year.  At December 31, 2011, $2,108,692 thousand of the $2,763,171 thousand in net assets of Holdings' consolidated subsidiaries were subject to the foregoing regulatory restrictions.

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Consolidated Statements Of Operations And Comprehensive Income (Loss) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
REVENUES:
Premiums earned	$ 427,112	$ 442,862	$ 1,299,293	$ 1,354,305
Net investment income	76,342	78,325	231,790	249,916
Net realized capital gains (losses):
Other-than-temporary impairments on fixed maturity securities	(486)	(911)	(6,627)	(14,522)
Other-than-temporary impairments on fixed maturity securities transferred to other comprehensive income (loss)
Other net realized capital gains (losses)	96,429	(178,125)	361,300	(192,222)
Total net realized capital gains (losses)	95,943	(179,036)	354,673	(206,744)
Other income (expense)	425	(8,865)	19,599	(20,401)
Total revenues	599,822	333,286	1,905,355	1,377,076
CLAIMS AND EXPENSES:
Incurred losses and loss adjustment expenses	242,877	322,099	786,851	1,187,936
Commission, brokerage, taxes and fees	70,464	70,842	251,320	239,659
Other underwriting expenses	45,938	42,708	126,551	120,148
Corporate expenses	2,019	1,143	5,317	3,498
Interest, fee and bond issue cost amortization expense	12,682	12,706	38,061	38,083
Total claims and expenses	373,980	449,498	1,208,100	1,589,324
INCOME (LOSS) BEFORE TAXES	225,842	(116,212)	697,255	(212,248)
Income tax expense (benefit)	69,857	(116,473)	200,893	(123,783)
NET INCOME (LOSS)	155,985	261	496,362	(88,465)
Other comprehensive income (loss), net of tax :
Unrealized appreciation (depreciation) ("URA(D)") on securities arising during the period	18,036	8,842	23,511	12,640
Less: reclassification adjustment for realized losses (gains) included in net income (loss)	261	(1,049)	1,696	19,661
Total URA(D) on securities arising during the period	18,297	7,793	25,207	32,301
Foreign currency translation adjustments	15,301	(4,558)	12,737	4,695
Pension adjustments	1,199	746	3,166	2,238
Other comprehensive income (loss), net of tax	34,797	3,981	41,110	39,234
COMPREHENSIVE INCOME (LOSS)	$ 190,782	$ 4,242	$ 537,472	$ (49,231)

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Contingencies

9 Months Ended

Sep. 30, 2012

Contingencies [Abstract]

Contingencies

6.  CONTINGENCIES

In the ordinary course of business, the Company is involved in lawsuits, arbitrations and other formal and informal dispute resolution procedures, the outcomes of which will determine the Company's rights and obligations under insurance and reinsurance agreements.  In some disputes, the Company seeks to enforce its rights under an agreement or to collect funds owing to it.  In other matters, the Company is resisting attempts by others to collect funds or enforce alleged rights.  These disputes arise from time to time and are ultimately resolved through both informal and formal means, including negotiated resolution, arbitration and litigation.  In all such matters, the Company believes that its positions are legally and commercially reasonable.  The Company considers the statuses of these proceedings when determining its reserves for unpaid loss and loss adjustment expenses.

Aside from litigation and arbitrations related to these insurance and reinsurance agreements, the Company is not a party to any other material litigation or arbitration.

In 1993 and prior, the Company had a business arrangement with The Prudential Insurance Company of America ("The Prudential") wherein, for a fee, the Company accepted settled claim payment obligations of certain property and casualty insurers, and, concurrently, became the owner of the annuity or assignee of the annuity proceeds funded by the property and casualty insurers specifically to fulfill these fully settled obligations.  In these circumstances, the Company would be liable if The Prudential, which has an A+ (Superior) financial strength rating from A.M. Best Company ("A.M. Best"), was unable to make the annuity payments.  The table below presents the estimated cost to replace all such annuities for which the Company was contingently liable for the periods indicated:

(Dollars in thousands)	At September 30, 2012		At December 31, 2011
	$	144,117	$	143,447

Prior to its 1995 initial public offering, the Company purchased annuities from an unaffiliated life insurance company with an A+ (Superior) financial strength rating from A.M. Best to settle certain claim liabilities of the company.  Should the life insurance company become unable to make the annuity payments, the Company would be liable for those claim liabilities.  The table below presents the estimated cost to replace all such annuities for which the Company was contingently liable for the periods indicated:

(Dollars in thousands)	At September 30, 2012		At December 31, 2011
	$	28,562	$	27,634

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Capital Transactions

9 Months Ended

Sep. 30, 2012

Capital Transactions [Abstract]

Capital Transactions

5.  CAPITAL TRANSACTIONS

On October 14, 2011, the Company renewed its shelf registration statement on Form S-3ASR with the SEC, as a Well Known Seasoned Issuer.  This shelf registration statement can be used by Group to register common shares, preferred shares, debt securities, warrants, share purchase contracts and share purchase units; by Holdings to register debt securities and by Everest Re Capital Trust III ("Capital Trust III") to register trust preferred securities.

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Subsequent Events

9 Months Ended

Sep. 30, 2012

Subsequent Events [Abstract]

Subsequent Events

17. SUBSEQUENT EVENTS

In October 2012, Hurricane Sandy severely impacted the Northeastern United States.  Due to the recentness of this event, the Company is unable to estimate the amount of losses at this time.  However, the Company anticipates that this event will adversely impact fourth quarter 2012 and full year 2012 financial statements.

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Segment Reporting

9 Months Ended

Sep. 30, 2012

Segment Reporting [Abstract]

Segment Reporting

13.  SEGMENT REPORTING

During the quarter ended September 30, 2011, the Company realigned its reporting segments to reflect recent changes in the type and volume of business written. The Company previously reported the results of Marine & Aviation, Surety, Accident and Health ("A&H") Reinsurance and A&H Primary operations as a separate segment—Specialty Underwriting.  The A&H primary business, which is a relatively new line of business for the Company, has increased significantly, representing approximately 2% of premiums earned and is projected to continue to grow.  The A&H primary business is better aligned with the Insurance reporting segment based on the similarities of this business with those businesses already reflected in the Insurance segment.  The other operating units included in the Specialty Underwriting segment would have encompassed less than 5% of the Company's premiums earned and their volume is projected to remain approximately 6%.  As a result of the size of these remaining operating units and their similarity to the business reported within U.S. Reinsurance, they have been reclassified to the U.S. Reinsurance segment.  There has been no change to the International reporting segment.  The Company has restated all segment information for prior years to conform to the new reporting segment structure.

The U.S. Reinsurance operation writes property and casualty reinsurance and specialty lines of business, including Marine, Aviation, Surety and A&H business, on both a treaty and facultative basis, through reinsurance brokers, as well as directly with ceding companies primarily within the U.S.  The International operation writes non-U.S. property and casualty reinsurance through Everest Re's branches in Canada, Singapore and through offices in Brazil, Miami and New Jersey.  The Insurance operation writes property and casualty insurance, including medical stop loss insurance, directly and through general agents, brokers and surplus lines brokers within the U.S. and Canada.

These segments are managed independently, but conform with corporate guidelines with respect to pricing, risk management, control of aggregate catastrophe exposures, capital, investments and support operations.  Management generally monitors and evaluates the financial performance of these operating segments based upon their underwriting results.

Underwriting results include earned premium less losses and LAE incurred, commission and brokerage expenses and other underwriting expenses.  Underwriting results are measured using ratios, in particular loss, commission and brokerage and other underwriting expense ratios, which, respectively, divide incurred losses, commissions and brokerage and other underwriting expenses by premiums earned.

The Company does not maintain separate balance sheet data for its operating segments.  Accordingly, the Company does not review and evaluate the financial results of its operating segments based upon balance sheet data.

	Three Months Ended				Nine Months Ended
U.S. Reinsurance	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Gross written premiums	$	433,494	$	360,833	$	938,444	$	947,155
Net written premiums		219,884		167,469		475,271		486,032
Premiums earned	$	181,396	$	167,530	$	529,409	$	512,104
Incurred losses and LAE		108,153		97,197		321,397		371,638
Commission and brokerage		40,092		23,298		139,920		106,123
Other underwriting expenses		12,766		10,843		33,541		30,621
Underwriting gain (loss)	$	20,385	$	36,192	$	34,551	$	3,722

	Three Months Ended				Nine Months Ended
International	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Gross written premiums	$	248,459	$	326,053	$	878,637	$	923,649
Net written premiums		105,550		158,038		402,078		457,663
Premiums earned	$	121,611	$	151,050	$	426,419	$	479,989
Incurred losses and LAE		29,309		104,570		191,837		514,260
Commission and brokerage		19,692		35,686		88,432		105,755
Other underwriting expenses		8,246		7,549		21,532		20,938
Underwriting gain (loss)	$	64,364	$	3,245	$	124,618	$	(160,964	)

	Three Months Ended						Nine Months Ended
Insurance	September 30,						September 30,
(Dollars in thousands)	2012			2011			2012			2011
Gross written premiums	$	328,930		$	236,294		$	783,872		$	750,283
Net written premiums		133,432			114,328			348,328			366,223
Premiums earned	$	124,105		$	124,282		$	343,465		$	362,212
Incurred losses and LAE		105,415			120,332			273,617			302,038
Commission and brokerage		10,680			11,858			22,968			27,781
Other underwriting expenses		24,926			24,316			71,478			68,589
Underwriting gain (loss)	$	(16,916	)	$	(32,224	)	$	(24,598	)	$	(36,196	)

The following table reconciles the underwriting results for the operating segments to income (loss) before taxes as reported in the consolidated statements of operations and comprehensive income (loss) for the periods indicated:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(Dollars in thousands)	2012			2011			2012			2011
Underwriting gain (loss)	$	67,833		$	7,213		$	134,571		$	(193,438	)
Net investment income		76,342			78,325			231,790			249,916
Net realized capital gains (losses)		95,943			(179,036	)		354,673			(206,744	)
Corporate expense		(2,019	)		(1,143	)		(5,317	)		(3,498	)
Interest, fee and bond issue cost amortization expense		(12,682	)		(12,706	)		(38,061	)		(38,083	)
Other income (expense)		425			(8,865	)		19,599			(20,401	)
Income (loss) before taxes	$	225,842		$	(116,212	)	$	697,255		$	(212,248	)

The Company produces business in the U.S. and internationally.  The net income deriving from assets residing in the individual foreign countries in which the Company writes business are not identifiable in the Company's financial records.  Based on gross written premium, the table below presents the largest country, other than the U.S., in which the Company writes business, for the periods indicated:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Canada	$	33,891	$	73,543	$	109,166	$	156,727

No other country represented more than 5% of the Company's revenues.

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Trust Agreements

9 Months Ended

Sep. 30, 2012

Trust Agreements [Abstract]

Trust Agreements

9.  TRUST AGREEMENTS

A subsidiary of the Company, Everest Re, has established a trust agreement, which effectively uses Everest Re's investments as collateral, as security for assumed losses payable to a non-affiliated ceding company.  At September 30, 2012, the total amount on deposit in the trust account was $143,779 thousand.

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Junior Subordinated Debt Securities Payable (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Dec. 31, 2011
Debt Instrument [Line Items]
Junior subordinated debt securities, maturity date	Mar. 29, 2034
Net assets of Holdings' consolidated subsidiaries, subject to regulatory restrictions		$ 2,108,692
Net assets of consolidated subsidiaries		$ 2,763,171
Junior Subordinated Debt [Member]
Debt Instrument [Line Items]
Percentage of principal redeemable before maturity	100.00%
Debt securities, Trust may become subject to tax within number of days of redemption period	90 days

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Other Comprehensive Income (Loss)

9 Months Ended

Sep. 30, 2012

Other Comprehensive Income (Loss) [Abstract]

Other Comprehensive Income (Loss)

7.  OTHER COMPREHENSIVE INCOME (LOSS)

The following table presents the components of comprehensive income (loss) in the consolidated statements of operations for the periods indicated:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(Dollars in thousands)	2012			2011			2012			2011
Unrealized appreciation (depreciation) ("URA(D)") on
securities arising during the period
URA(D) of investments - temporary	$	28,226		$	12,125		$	38,926		$	49,825
URA(D) of investments - non-credit OTTI		(77	)		(137	)		(146	)		(132	)
Tax benefit (expense) from URA(D) arising during the period		(9,852	)		(4,195	)		(13,573	)		(17,392	)
Total URA(D) on securities arising during the period, net of tax		18,297			7,793			25,207			32,301
Foreign currency translation adjustments		23,540			(7,012	)		19,596			7,224
Tax benefit (expense) from foreign currency translation		(8,239	)		2,454			(6,859	)		(2,529	)
Net foreign currency translation adjustments		15,301			(4,558	)		12,737			4,695
Pension adjustments		1,844			1,148			4,871			3,443
Tax benefit (expense) on pension		(645	)		(402	)		(1,705	)		(1,205	)
Net pension adjustments		1,199			746			3,166			2,238
Other comprehensive income (loss), net of tax	$	34,797		$	3,981		$	41,110		$	39,234

The following table presents the components of accumulated other comprehensive income (loss), net of tax, in the consolidated balance sheets for the periods indicated:

	At September 30,			At December 31,
(Dollars in thousands)	2012			2011
URA(D) on securities, net of deferred taxes
Temporary	$	172,029		$	146,727
Non-credit, OTTI		318			413
Total unrealized appreciation (depreciation) on investments, net of deferred taxes		172,347			147,140
Foreign currency translation adjustments, net of deferred taxes		95,922			83,185
Pension adjustments, net of deferred taxes		(52,369	)		(55,535	)
Accumulated other comprehensive income (loss)	$	215,900		$	174,790

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Credit Facility

9 Months Ended

Sep. 30, 2012

Credit Facility [Abstract]

Credit Facility

8.  CREDIT FACILITY

Effective August 15, 2011, the Company entered into a new three year, $150,000 thousand unsecured revolving credit facility with a syndicate of lenders, replacing the August 23, 2006 five year senior revolving credit facility.  Both the August 15, 2011 and August 23, 2006 revolving credit agreements, which have similar terms, are referred to as the "Holdings Credit Facility".  Citibank N.A. is the administrative agent for the Holdings Credit Facility.  The Holdings Credit Facility may be used for liquidity and general corporate purposes.  The Holdings Credit Facility provides for the borrowing of up to $150,000 thousand with interest at a rate selected by Holdings equal to either, (1) the Base Rate (as defined below) or (2) a periodic fixed rate equal to the Eurodollar Rate plus an applicable margin.  The Base Rate means a fluctuating interest rate per annum in effect from time to time to be equal to the higher of (a) the rate of interest publicly announced by Citibank as its base rate, (b) 0.5% per annum above the Federal Funds Rate or (c) 1% above the one month London Interbank Offered Rate ("LIBOR"), in each case plus the applicable margin.  The amount of margin and the fees payable for the Holdings Credit Facility depends upon Holdings' senior unsecured debt rating.

The Holdings Credit Facility requires Holdings to maintain a debt to capital ratio of not greater than 0.35 to 1 and Everest Re to maintain its statutory surplus at $1,875,000 thousand plus 25% of future aggregate net income and 25% of future aggregate capital contributions after December 31, 2010, which at September 30, 2012, was $1,989,487 thousand.  As of September 30, 2012, the Company was in compliance with all Holdings Credit Facility covenants.

The following table summarizes outstanding letters of credit and/or borrowings for the periods indicated:

(Dollars in thousands)	At September 30, 2012						At December 31, 2011
Bank	Commitment		In Use		Date of Loan	Maturity/Expiry Date	Commitment		In Use		Date of Loan	Maturity/Expiry Date
Citibank Holdings Credit Facility	$	150,000	$	-			$	150,000	$	-
Total revolving credit borrowings				-						-
Total letters of credit				5,020		12/31/2012				5,020		12/31/2012
Total Citibank Holdings Credit Facility	$	150,000	$	5,020			$	150,000	$	5,020

The following table presents the costs incurred in connection with the Holdings Credit Facility for the periods indicated:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Credit facility fees incurred	$	137	$	163	$	442	$	341

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Senior Notes

9 Months Ended

Sep. 30, 2012

Senior Notes [Abstract]

Senior Notes

10.  SENIOR NOTES

The table below displays Holdings' outstanding senior notes.  Market value is based on quoted market prices, but due to limited trading activity, these senior notes are considered Level 2 in the fair value hierarchy.

					September 30, 2012				December 31, 2011
					Consolidated Balance				Consolidated Balance
(Dollars in thousands)	Date Issued	Date Due	Principal Amounts		Sheet Amount		Market Value		Sheet Amount		Market Value
5.40% Senior notes	10/12/2004	10/15/2014	$	250,000	$	249,894	$	261,745	$	249,858	$	251,370

Interest expense incurred in connection with these senior notes is as follows for the periods indicated:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Interest expense incurred	$	3,387	$	3,386	$	10,161	$	10,159

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Segment Reporting (Schedule Of Underwriting Results For Operating Segments To Income (Loss) Before Taxes) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Segment Reporting [Abstract]
Underwriting gain (loss)	$ 67,833	$ 7,213	$ 134,571	$ (193,438)
Net investment income	76,342	78,325	231,790	249,916
Net realized capital gains (losses)	95,943	(179,036)	354,673	(206,744)
Corporate expenses	(2,019)	(1,143)	(5,317)	(3,498)
Interest, fee and bond issue cost amortization expense	(12,682)	(12,706)	(38,061)	(38,083)
Other income (expense)	425	(8,865)	19,599	(20,401)
Income (loss) before taxes	$ 225,842	$ (116,212)	$ 697,255	$ (212,248)

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Related-Party Transactions (Narrative) (Details)	9 Months Ended
	Sep. 30, 2012 USD ($)	Sep. 30, 2012 GBP (£)
Related-Party Transactions [Abstract]
Stock repurchase program, number of shares held	9,719,971	9,719,971
Reserve indemnity agreement, percent	90.00%	90.00%
Reserve indemnity agreement, amount		£ 25,000,000
Amount received for subsidiaries sold, book value	$ 61,005,000

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Segment Reporting (Schedule Of Underwriting Results For Operating Segments) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Segment Reporting Information [Line Items]
Premiums earned	$ 427,112	$ 442,862	$ 1,299,293	$ 1,354,305
Incurred losses and LAE	242,877	322,099	786,851	1,187,936
Commission and brokerage	70,464	70,842	251,320	239,659
Other underwriting expenses	45,938	42,708	126,551	120,148
Underwriting gain (loss)	67,833	7,213	134,571	(193,438)
U.S. Reinsurance [Member]
Segment Reporting Information [Line Items]
Gross written premiums	433,494	360,833	938,444	947,155
Net written premiums	219,884	167,469	475,271	486,032
Premiums earned	181,396	167,530	529,409	512,104
Incurred losses and LAE	108,153	97,197	321,397	371,638
Commission and brokerage	40,092	23,298	139,920	106,123
Other underwriting expenses	12,766	10,843	33,541	30,621
Underwriting gain (loss)	20,385	36,192	34,551	3,722
International [Member]
Segment Reporting Information [Line Items]
Gross written premiums	248,459	326,053	878,637	923,649
Net written premiums	105,550	158,038	402,078	457,663
Premiums earned	121,611	151,050	426,419	479,989
Incurred losses and LAE	29,309	104,570	191,837	514,260
Commission and brokerage	19,692	35,686	88,432	105,755
Other underwriting expenses	8,246	7,549	21,532	20,938
Underwriting gain (loss)	64,364	3,245	124,618	(160,964)
Insurance [Member]
Segment Reporting Information [Line Items]
Gross written premiums	328,930	236,294	783,872	750,283
Net written premiums	133,432	114,328	348,328	366,223
Premiums earned	124,105	124,282	343,465	362,212
Incurred losses and LAE	105,415	120,332	273,617	302,038
Commission and brokerage	10,680	11,858	22,968	27,781
Other underwriting expenses	24,926	24,316	71,478	68,589
Underwriting gain (loss)	$ (16,916)	$ (32,224)	$ (24,598)	$ (36,196)
Accident & Health [Member]
Segment Reporting Information [Line Items]
Premiums earned, percentage		2.00%
Specialty Underwriting [Member]
Segment Reporting Information [Line Items]
Premiums earned, percentage		5.00%
Percentage threshold of maximum projected volume of premiums earned		6.00%

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Basis Of Presentation (Details) (USD $) In Thousands, unless otherwise specified			3 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended
	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011 Scenario, Potential Previous Expense [Member]	Sep. 30, 2011 Scenario, Potential Previous Expense [Member]	Sep. 30, 2012 Authoritative Guidance [Member]	Sep. 30, 2012 Authoritative Guidance [Member]
Item Effected [Line Items]
Deferred acquisition costs	$ 90,088	$ 166,806			$ 7,215	$ 7,215
Expensed deferrable acquisition costs			$ 2,789	$ 6,160	$ 1,356	$ 4,727

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Credit Facilities (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Dec. 31, 2011
Line of Credit Facility [Line Items]
Line of credit facility, commitment	$ 150,000	$ 150,000
Line of credit facility, description of variable rate basis	the rate of interest publicly announced by Citibank as its base rate
Total Citibank Holdings Credit Facility [Member]
Line of Credit Facility [Line Items]
Line of credit facility, term of credit facility	3 years	5 years
Line of credit facility, commitment	150,000	150,000
Line of credit facility, required minimum debt-to-capital ratio	0.35
Line of credit facility, required minimum net worth	1,875,000
Percentage amount of consolidated net income required to be reserved to maintain compliance with facility covenants	25.00%
Percentage amount of increase in consolidated net worth from new issuance required to be reserved to maintain compliance with facility covenants	25.00%
Increase in reserves due to new issuance during the period required to maintain compliance with facility covenants	$ 1,989,487
Total Citibank Holdings Credit Facility [Member] | Interest Rate Base Rate Option 1(b) [Member]
Line of Credit Facility [Line Items]
Line of credit facility, description of variable rate basis	0.5
Total Citibank Holdings Credit Facility [Member] | Interest Rate Base Rate Option 1(c) [Member]
Line of Credit Facility [Line Items]
Line of credit facility, description of variable rate basis	% above the one month London Interbank Offered Rate ("LIBOR"), in each case plus the applicable margin
Line of credit facility, spread on variable rate basis	1.00%
Total Citibank Holdings Credit Facility [Member] | Interest Rate Base Rate Option 2 [Member]
Line of Credit Facility [Line Items]
Line of credit facility, description of variable rate basis	periodic fixed rate equal to the Eurodollar Rate plus an applicable margin

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Income Taxes

9 Months Ended

Sep. 30, 2012

Income Taxes [Abstract]

Income Taxes

15. INCOME TAXES

The Company is domiciled in the United States and has subsidiaries domiciled within the United States with significant branches in Canada and Singapore.  The Company's non-U.S. branches are subject to income taxation at varying rates in their respective domiciles.

The Company generally will use the estimated annual effective tax rate approach for calculating its tax provision for interim periods as prescribed by ASC 740-270, Interim Reporting.  Under the estimated annual effective tax rate approach, the estimated annual effective tax rate is applied to the interim year-to-date pre-tax income to determine the income tax expense or benefit for the year-to-date period.  The tax expense or benefit for a quarter represents the difference between the year-to-date tax expense or benefit for the current year-to-date period less such amount for the immediately preceding year-to-date period.  Management considers the impact of all known events in its estimation of the Company's annual pre-tax income and effective tax rate.

During the third quarter of 2012, the Internal Revenue Service completed its audit of the Company for the 2007 and 2008 tax years.  At the conclusion of the audit, the Company paid additional federal income taxes of $12,747 thousand plus interest of $1,702 thousand.  The additional tax liability resulted primarily from adjustments to the timing of the Company's utilization of foreign tax credits and therefore, including interest but net of other permanent benefit adjustments, resulted in only $752 thousand of additional income tax expense.  Conversely, also as a result of closing the IRS audit, the Company was able to take down its reserve for uncertain tax positions by $9,657 thousand and related interest by $1,567 thousand, resulting in an income tax benefit of $11,223 thousand.

During the first and second quarters of 2012, the Company had identified understatements in its Deferred tax asset account of $21,674 thousand.  The understatements resulted from differences between filed and recorded amounts that had accumulated over several prior periods. The Company corrected these understatements in its first and second quarter financial statements, resulting in an additional $21,674 thousand income tax benefit included in the income tax expense (benefit) caption in the Consolidated Statements of Operations and Comprehensive Income (Loss) and increased net income for the same amount.  The Company also increased its Deferred tax asset in its Consolidated Balance Sheets by $21,674 thousand.  The Company believes that the out of period adjustments are immaterial to its 2012 quarterly financial statements and to all prior periods.  As such, the Company has not restated any prior period amounts.

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Contingencies (Tables)

9 Months Ended

Sep. 30, 2012

Contingencies [Abstract]

Estimated Cost To Replace All Such Annuities For Which The Company Was Contingently Liable

(Dollars in thousands)	At September 30, 2012		At December 31, 2011
	$	144,117	$	143,447

(Dollars in thousands)	At September 30, 2012		At December 31, 2011
	$	28,562	$	27,634

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Other Comprehensive Income (Loss) (Components Of Comprehensive Income (Loss) In The Consolidated Statements Of Operations) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Other Comprehensive Income (Loss) [Abstract]
URA(D) of investments - temporary	$ 28,226	$ 12,125	$ 38,926	$ 49,825
URA(D) of investments - non-credit OTTI	(77)	(137)	(146)	(132)
Tax benefit (expense) from URA(D) arising during the period	(9,852)	(4,195)	(13,573)	(17,392)
Total URA(D) on securities arising during the period	18,297	7,793	25,207	32,301
Foreign currency translation adjustments	23,540	(7,012)	19,596	7,224
Tax benefit (expense) from foreign currency translation	(8,239)	2,454	(6,859)	(2,529)
Net foreign currency translation adjustments	15,301	(4,558)	12,737	4,695
Pension adjustments	1,844	1,148	4,871	3,443
Tax benefit (expense) on pension	(645)	(402)	(1,705)	(1,205)
Net pension adjustments	1,199	746	3,166	2,238
Other comprehensive income (loss), net of tax	$ 34,797	$ 3,981	$ 41,110	$ 39,234

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Investments (Summary Of Aggregate Market Value And Gross Unrealized Depreciation Of Fixed Maturity And Equity Securities By Contractual Maturity) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Schedule of Available-for-sale Securities [Line Items]
Fixed maturity securities, Duration of Unrealized Loss, Less than 12 months, Market Value	$ 235,234	$ 595,297
Fixed maturity securities, Duration of Unrealized Loss, Less than 12 months, Gross Unrealized Depreciation	(2,647)	(13,710)
Fixed maturity securities, Duration of Unrealized Loss, Greater than 12 months, Market Value	268,438	249,785
Fixed maturity securities, Duration of Unrealized Loss, Greater than 12 months, Gross Unrealized Depreciation	(19,500)	(21,758)
Fixed maturity securities, Duration of Unrealized Loss, Total, Market Value	503,672	845,082
Fixed maturity securities, Duration of Unrealized Loss, Total, Gross Unrealized Depreciation	(22,147)	(35,468)
Due In One Year Or Less [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed maturity securities, Duration of Unrealized Loss, Less than 12 months, Market Value	12,962	9,583
Fixed maturity securities, Duration of Unrealized Loss, Less than 12 months, Gross Unrealized Depreciation	(287)	(59)
Fixed maturity securities, Duration of Unrealized Loss, Greater than 12 months, Market Value	35,341	26,204
Fixed maturity securities, Duration of Unrealized Loss, Greater than 12 months, Gross Unrealized Depreciation	(5,663)	(4,486)
Fixed maturity securities, Duration of Unrealized Loss, Total, Market Value	48,303	35,787
Fixed maturity securities, Duration of Unrealized Loss, Total, Gross Unrealized Depreciation	(5,950)	(4,545)
Due In One Year Through Five Years [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed maturity securities, Duration of Unrealized Loss, Less than 12 months, Market Value	116,020	213,809
Fixed maturity securities, Duration of Unrealized Loss, Less than 12 months, Gross Unrealized Depreciation	(1,805)	(4,754)
Fixed maturity securities, Duration of Unrealized Loss, Greater than 12 months, Market Value	149,214	137,972
Fixed maturity securities, Duration of Unrealized Loss, Greater than 12 months, Gross Unrealized Depreciation	(11,175)	(9,576)
Fixed maturity securities, Duration of Unrealized Loss, Total, Market Value	265,234	351,781
Fixed maturity securities, Duration of Unrealized Loss, Total, Gross Unrealized Depreciation	(12,980)	(14,330)
Due In Five Years Through Ten Years [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed maturity securities, Duration of Unrealized Loss, Less than 12 months, Market Value	29,938	186,061
Fixed maturity securities, Duration of Unrealized Loss, Less than 12 months, Gross Unrealized Depreciation	(175)	(5,484)
Fixed maturity securities, Duration of Unrealized Loss, Greater than 12 months, Market Value	45,936	37,964
Fixed maturity securities, Duration of Unrealized Loss, Greater than 12 months, Gross Unrealized Depreciation	(1,587)	(2,391)
Fixed maturity securities, Duration of Unrealized Loss, Total, Market Value	75,874	224,025
Fixed maturity securities, Duration of Unrealized Loss, Total, Gross Unrealized Depreciation	(1,762)	(7,875)
Due After Ten Years [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed maturity securities, Duration of Unrealized Loss, Less than 12 months, Market Value	1,976	23,741
Fixed maturity securities, Duration of Unrealized Loss, Less than 12 months, Gross Unrealized Depreciation	(26)	(446)
Fixed maturity securities, Duration of Unrealized Loss, Greater than 12 months, Market Value	14,136	19,753
Fixed maturity securities, Duration of Unrealized Loss, Greater than 12 months, Gross Unrealized Depreciation	(459)	(4,918)
Fixed maturity securities, Duration of Unrealized Loss, Total, Market Value	16,112	43,494
Fixed maturity securities, Duration of Unrealized Loss, Total, Gross Unrealized Depreciation	(485)	(5,364)
Asset-backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed maturity securities, Duration of Unrealized Loss, Less than 12 months, Market Value		819
Fixed maturity securities, Duration of Unrealized Loss, Less than 12 months, Gross Unrealized Depreciation		(6)
Fixed maturity securities, Duration of Unrealized Loss, Total, Market Value		819
Fixed maturity securities, Duration of Unrealized Loss, Total, Gross Unrealized Depreciation		(6)
Collateralized Mortgage Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed maturity securities, Duration of Unrealized Loss, Less than 12 months, Market Value	74,338	161,284
Fixed maturity securities, Duration of Unrealized Loss, Less than 12 months, Gross Unrealized Depreciation	(354)	(2,961)
Fixed maturity securities, Duration of Unrealized Loss, Greater than 12 months, Market Value	23,811	27,892
Fixed maturity securities, Duration of Unrealized Loss, Greater than 12 months, Gross Unrealized Depreciation	(616)	(387)
Fixed maturity securities, Duration of Unrealized Loss, Total, Market Value	98,149	189,176
Fixed maturity securities, Duration of Unrealized Loss, Total, Gross Unrealized Depreciation	$ (970)	$ (3,348)

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Consolidated Statements Of Changes In Stockholder's Equity (USD $) In Thousands, except Share data	Common Stock [Member]	Additional Paid-In Capital [Member] USD ($)	Accumulated Other Comprehensive Income (Loss), Net Of Deferred Income Taxes [Member] USD ($)	Retained Earnings [Member] USD ($)	Total USD ($)
Balance, beginning of period at Jun. 30, 2011		$ 330,990	$ 199,219	$ 2,547,282
Balance, beginning of period, shares at Jun. 30, 2011	1,000
Share-based compensation plans		1,657
Net increase (decrease) during the period			3,981		3,981
Net income (loss)				261	261
Balance, end of period at Sep. 30, 2011		332,647	203,200	2,547,543	3,083,390
Balance, end of period, shares at Sep. 30, 2011	1,000
Balance, beginning of period at Dec. 31, 2010		327,767	163,966	2,636,008
Balance, beginning of period, shares at Dec. 31, 2010	1,000
Share-based compensation plans		4,880
Net increase (decrease) during the period			39,234		39,234
Net income (loss)				(88,465)	(88,465)
Balance, end of period at Sep. 30, 2011		332,647	203,200	2,547,543	3,083,390
Balance, end of period, shares at Sep. 30, 2011	1,000
Balance, beginning of period at Dec. 31, 2011		333,416	174,790	2,433,187	2,941,393
Balance, beginning of period, shares at Dec. 31, 2011	1,000				1,000
Share-based compensation plans		5,062
Net increase (decrease) during the period			41,110		41,110
Net income (loss)				496,362	496,362
Balance, end of period at Sep. 30, 2012		338,478	215,900	2,929,549	3,483,927
Balance, end of period, shares at Sep. 30, 2012	1,000				1,000
Balance, beginning of period at Jun. 30, 2012		336,813	181,103	2,773,564
Balance, beginning of period, shares at Jun. 30, 2012	1,000
Share-based compensation plans		1,665
Net increase (decrease) during the period			34,797		34,797
Net income (loss)				155,985	155,985
Balance, end of period at Sep. 30, 2012		$ 338,478	$ 215,900	$ 2,929,549	$ 3,483,927
Balance, end of period, shares at Sep. 30, 2012	1,000				1,000

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Fair Value

9 Months Ended

Sep. 30, 2012

Fair Value [Abstract]

Fair Value

4.  FAIR VALUE

The Company's fixed maturity and equity securities are primarily managed by third party investment asset managers.  The investment asset managers obtain prices from nationally recognized pricing services.   These services seek to utilize market data and observations in their evaluation process.  They use pricing applications that vary by asset class and incorporate available market information and when fixed maturity securities do not trade on a daily basis the services will apply available information through processes such as benchmark curves, benchmarking of like securities, sector groupings and matrix pricing.  In addition, they use model processes, such as the Option Adjusted Spread model to develop prepayment and interest rate scenarios for securities that have prepayment features.

In limited instances where prices are not provided by pricing services or in rare instances when a manager may not agree with the pricing service, price quotes on a non-binding basis are obtained from investment brokers.  The investment asset managers do not make any changes to prices received from either the pricing services or the investment brokers.  In addition, the investment asset managers have procedures in place to review the reasonableness of the prices from the service providers and may request verification of the prices.  In addition, the Company continually performs analytical reviews of price changes and tests the prices on a random basis to an independent pricing source.   No material variances were noted during these price validation procedures.  In limited situations, where financial markets are inactive or illiquid, the Company may use its own assumptions about future cash flows and risk-adjusted discount rates to determine fair value.  The Company made no such adjustments at September 30, 2012 and December 31, 2011.

The Company internally manages a small public equity portfolio which had a fair value at September 30, 2012 of $52,009 thousand and all prices were obtained from publically published sources.

Equity securities in U.S. denominated currency are categorized as Level 1, Quoted Prices in Active Markets for Identical Assets, since the securities are actively traded on an exchange and prices are based on quoted prices from the exchange.  Equity securities traded on foreign exchanges are categorized as Level 2 due to potential foreign exchange adjustments to fair or market value.

Fixed maturity securities are generally categorized as Level 2, Significant Other Observable Inputs, since a particular security may not have traded but the pricing services are able to use valuation models with observable market inputs such as interest rate yield curves and prices for similar fixed maturity securities in terms of issuer, maturity and seniority. Valuations that are derived from techniques in which one or more of the significant inputs are unobservable (including assumptions about risk) are categorized as Level 3, Significant Unobservable Inputs.  These securities include broker priced securities.

As of September 30, 2012 and December 31, 2011, all Level 3 fixed maturity securities, were priced using single non-binding broker quotes since prices for these securities were not provided by normal pricing service companies.  The single broker quotes are provided by market makers or broker-dealers who are recognized as market participants in the markets in which they are providing the quotes.  The prices received from brokers are reviewed for reasonableness by our asset managers and management.

Other invested assets, at fair value, are categorized as Level 1, Quoted Prices in Active Markets for Identical Assets, since the securities are shares of the Company's parent, which are actively traded on an exchange and the price is based on a quoted price.

The following table presents the fair value measurement levels for all assets, which the Company has recorded at fair value (fair and market value) as of the period indicated:

			Fair Value Measurement Using:
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
(Dollars in thousands)	September 30, 2012		(Level 1)		(Level 2)		(Level 3)
Assets:
Fixed maturities, market value
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	78,595	$	-	$	78,595	$	-
Obligations of U.S. States and political subdivisions		1,366,329		-		1,366,329		-
Corporate securities		1,401,228		-		1,401,228		-
Asset-backed securities		50,923		-		43,331		7,592
Mortgage-backed securities
Commercial		53,007		-		53,007		-
Agency residential		575,168		-		575,168		-
Non-agency residential		2,480		-		2,475		5
Foreign government securities		812,688		-		812,688		-
Foreign corporate securities		985,700		-		980,754		4,946
Total fixed maturities, market value		5,326,118		-		5,313,575		12,543
Fixed maturities, fair value		52,217		-		52,217		-
Equity securities, market value		13		13		-		-
Equity securities, fair value		1,247,445		1,113,526		133,919		-
Other invested assets, fair value		1,039,648		1,039,648		-		-

There wer no transfers between Level 1 and Level 2 for the three and nine months ended September 30, 2012.

The following table presents the fair value measurement levels for all assets, which the Company has recorded at fair value (fair and market value) as of the period indicated:

			Fair Value Measurement Using:
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
(Dollars in thousands)	December 31, 2011		(Level 1)		(Level 2)		(Level 3)
Assets:
Fixed maturities, market value
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	79,539	$	-	$	79,539	$	-
Obligations of U.S. States and political subdivisions		1,660,905		-		1,660,905		-
Corporate securities		1,228,235		-		1,228,235		-
Asset-backed securities		45,103		-		29,057		16,046
Mortgage-backed securities
Commercial		47,874		-		47,874		-
Agency residential		543,393		-		543,393		-
Non-agency residential		24,289		-		24,282		7
Foreign government securities		788,649		-		788,649		-
Foreign corporate securities		689,041		-		686,505		2,536
Total fixed maturities, market value		5,107,028		-		5,088,439		18,589
Fixed maturities, fair value		113,606		-		113,606		-
Equity securities, market value		10		10		-		-
Equity securities, fair value		1,207,053		1,090,959		116,094		-
Other invested assets, fair value		817,352		817,352		-		-

The following tables present the activity under Level 3, fair value measurements using significant unobservable inputs by asset type, for the periods indicated:

	Three Months Ended September 30, 2012												Nine Months Ended September 30, 2012
	Asset-backed			Foreign			Non-agency						Asset-backed			Foreign			Non-agency
(Dollars in thousands)	Securities			Corporate			RMBS			Total			Securities			Corporate			RMBS			Total
Beginning balance	$	8,996		$	7,383		$	5		$	16,384		$	16,046		$	2,536		$	7		$	18,589
Total gains or (losses) (realized/unrealized)
Included in earnings (or changes in net assets)		56			(14	)		1			43			111			(33	)		3			81
Included in other comprehensive income (loss)		390			275			-			665			728			387			(2	)		1,113
Purchases, issuances and settlements		(61	)		(576	)		(1	)		(638	)		4,407			6,640			(3	)		11,044
Transfers in and/or (out) of Level 3		(1,789	)		(2,122	)		-			(3,911	)		(13,700	)		(4,584	)		-			(18,284	)
Ending balance	$	7,592		$	4,946		$	5		$	12,543		$	7,592		$	4,946		$	5		$	12,543
The amount of total gains or losses for the period included
in earnings (or changes in net assets) attributable to the
change in unrealized gains or losses relating to assets
still held at the reporting date	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-
(Some amounts may not reconcile due to rounding.)

	Three Months Ended September 30, 2011												Nine Months Ended September 30, 2011
	Asset-backed			Foreign			Non-agency						Asset-backed			Foreign			Non-agency
(Dollars in thousands)	Securities			Corporate			RMBS			Total			Securities			Corporate			RMBS			Total
Beginning balance	$	2,466		$	-		$	381		$	2,847		$	961		$	3,635		$	458		$	5,054
Total gains or (losses) (realized/unrealized)
Included in earnings (or changes in net assets)		16			(3	)		(39	)		(26	)		80			(3	)		10			87
Included in other comprehensive income (loss)		(122	)		(25	)		102			(45	)		(269	)		(25	)		54			(240	)
Purchases, issuances and settlements		(19	)		2,586			(88	)		2,479			37			2,586			(166	)		2,457
Transfers in and/or (out) of Level 3		(27	)		-			(349	)		(376	)		1,505			(3,635	)		(349	)		(2,479	)
Ending balance	$	2,314		$	2,558		$	7		$	4,879		$	2,314		$	2,558		$	7		$	4,879
The amount of total gains or losses for the period included
in earnings (or changes in net assets) attributable to the
change in unrealized gains or losses relating to assets
still held at the reporting date	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-
(Some amounts may not reconcile due to rounding.)

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Long Term Subordinated Notes (Schedule Of Outstanding Fixed To Floating Rate Long Term Subordinated Notes) (Details) (Subordinated Debt [Member], USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Dec. 31, 2011
Debt Instrument [Line Items]
Debt instrument, stated interest rate	6.60%
Date issued	Apr. 26, 2007
Original Principal Amount	$ 400,000
Consolidated balance sheet amount	238,356	238,354
Market value	$ 244,522	$ 210,195
Scheduled [Member]
Debt Instrument [Line Items]
Maturity Date	May 15, 2037
Final [Member]
Debt Instrument [Line Items]
Maturity Date	May 01, 2067

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Related-Party Transactions (Dividends Received On Common Shares Reported As Net Investment Income) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Related-Party Transactions [Abstract]
Dividends received	$ 4,666	$ 4,665	$ 13,997	$ 13,979

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Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Sep. 30, 2012

Other Comprehensive Income (Loss) [Abstract]

Components Of Comprehensive Income (Loss) In The Consolidated Statements Of Operations

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(Dollars in thousands)	2012			2011			2012			2011
Unrealized appreciation (depreciation) ("URA(D)") on
securities arising during the period
URA(D) of investments - temporary	$	28,226		$	12,125		$	38,926		$	49,825
URA(D) of investments - non-credit OTTI		(77	)		(137	)		(146	)		(132	)
Tax benefit (expense) from URA(D) arising during the period		(9,852	)		(4,195	)		(13,573	)		(17,392	)
Total URA(D) on securities arising during the period, net of tax		18,297			7,793			25,207			32,301
Foreign currency translation adjustments		23,540			(7,012	)		19,596			7,224
Tax benefit (expense) from foreign currency translation		(8,239	)		2,454			(6,859	)		(2,529	)
Net foreign currency translation adjustments		15,301			(4,558	)		12,737			4,695
Pension adjustments		1,844			1,148			4,871			3,443
Tax benefit (expense) on pension		(645	)		(402	)		(1,705	)		(1,205	)
Net pension adjustments		1,199			746			3,166			2,238
Other comprehensive income (loss), net of tax	$	34,797		$	3,981		$	41,110		$	39,234

Components Of Accumulated Other Comprehensive Income (Loss), Net Of Tax, In The Consolidated Balance Sheets

	At September 30,			At December 31,
(Dollars in thousands)	2012			2011
URA(D) on securities, net of deferred taxes
Temporary	$	172,029		$	146,727
Non-credit, OTTI		318			413
Total unrealized appreciation (depreciation) on investments, net of deferred taxes		172,347			147,140
Foreign currency translation adjustments, net of deferred taxes		95,922			83,185
Pension adjustments, net of deferred taxes		(52,369	)		(55,535	)
Accumulated other comprehensive income (loss)	$	215,900		$	174,790

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Related-Party Transactions (Premiums And Losses Ceded By The Company To Affiliate) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 30, 2012		Sep. 30, 2011		Sep. 30, 2012		Sep. 30, 2011
Bermuda Re [Member]
Ceded written premiums	$ 448,656		$ 445,601		$ 1,188,944		$ 1,195,023
Ceded earned premiums	412,390		398,561		1,237,883		1,158,961
Ceded losses and LAE	263,990	[1]	238,405	[1]	732,170	[1]	1,023,482	[1]
Everest International [Member]
Ceded written premiums	361		31		1,055		670
Ceded earned premiums	583		2,448		2,550		16,489
Ceded losses and LAE	832		(1,005)		(744)		5,908
Everest Canada [Member]
Assumed written premiums	4,170				12,813
Assumed earned premiums	3,963				11,329
Assumed losses and LAE	$ 2,378				$ 6,798

[1] Ceded losses and LAE include the Mt. McKinley loss portfolio transfer that constitutes losses ceded under retroactive reinsurance and therefore, in accordance with FASB guidance, a deferred gain on retroactive reinsurance is reflected in other expenses on the consolidated statements of operations and comprehensive income (loss).

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Investments (Summary Of Amortized Cost And Market Value Of Fixed Maturity Securities, By Contractual Maturity) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Schedule of Available-for-sale Securities [Line Items]
Fixed maturity securities - available for sale, Amortized Cost	$ 5,060,968	$ 4,880,654
Fixed maturity securities - available for sale, at market value	5,326,118	5,107,028
Fixed Maturity Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed maturity securities - available for sale, Due in one year or less, Amortized Cost	351,241	224,406
Fixed maturity securities - available for sale, Due after one year through five years, Amortized Cost	2,272,775	2,055,299
Fixed maturity securities - available for sale, Due after five years through ten years, Amortized Cost	977,030	955,253
Fixed maturity securities - available for sale, Due after ten years, Amortized Cost	803,926	1,006,307
Fixed maturity securities - available for sale, Due in one year or less, Market Value	349,065	223,507
Fixed maturity securities - available for sale, Due after one year through five years, Market Value	2,360,911	2,129,437
Fixed maturity securities - available for sale, Due after five years through ten years, Market Value	1,040,976	1,009,893
Fixed maturity securities - available for sale, Due after ten years, Market Value	893,588	1,083,532
Asset-backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed maturity securities - available for sale, Amortized Cost	48,695	44,351
Fixed maturity securities - available for sale, at market value	50,923	45,103
Commercial Mortgage Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed maturity securities - available for sale, Amortized Cost	45,345	41,953
Fixed maturity securities - available for sale, at market value	53,007	47,874
Agency Residential [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed maturity securities - available for sale, Amortized Cost	559,808	528,946
Fixed maturity securities - available for sale, at market value	575,168	543,393
Non-agency Residential [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed maturity securities - available for sale, Amortized Cost	2,148	24,139
Fixed maturity securities - available for sale, at market value	$ 2,480	$ 24,289

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Related-Party Transactions

9 Months Ended

Sep. 30, 2012

Related-Party Transactions [Abstract]

Related-Party Transactions

14.  RELATED-PARTY TRANSACTIONS

Parent

Group's Board of Directors approved an amended share repurchase program authorizing Group and/or its subsidiary Holdings to purchase Group's common shares through open market transactions, privately negotiated transactions or both.  The table below represents the amendments to the share repurchase program for the common shares approved for repurchase.

	Common Shares
	Authorized for
Amendment Date	Repurchase
(Dollars in thousands)
09/21/2004	$	5,000,000
07/21/2008		5,000,000
02/24/2010		5,000,000
02/22/2012		5,000,000
	$	20,000,000

As of September 30, 2012, Holdings held 9,719,971 common shares of Group, which it had purchased in the open market between February 1, 2007 and March 8, 2011.  The table below represents the total purchase price for these common shares purchased.

(Dollars in thousands)
Total purchase price	$	835,371

Holdings reports these purchases as other invested assets, fair value, in the consolidated balance sheets with changes in fair value re-measurement recorded in net realized capital gains (losses) in the consolidated statements of operations and comprehensive income (loss).  The following table presents the dividends received on these common shares that are reported as net investment income in the consolidated statements of operations and comprehensive income (loss) for the period indicated.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Dividends received	$	4,666	$	4,665	$	13,997	$	13,979

Outside Directors

During the normal course of business, the Company, through its affiliates, engages in insurance and brokerage and commission business transactions, with companies controlled by or affiliated with one or more of Group's outside directors.  Such transactions, individually and in the aggregate, are not material to the Company's financial condition, results of operation and cash flows.

Affiliated Companies

During the fourth quarter of 2011, the Company sold its subsidiaries, Everest Insurance Company of Canada ("Everest Canada") and Premiere Insurance Underwriting Services ("Premiere"), to an affiliated company, Holdings Ireland.  Holdings Ireland is a direct subsidiary of Group, the Company's ultimate parent.  The Company sold the subsidiaries to Holdings Ireland for $61,005 thousand, which was the book value of the subsidiaries as of September 30, 2011.

Everest Global Services, Inc. ("Global Services"), an affiliate of Holdings, provides centralized management and home office services, through a management agreement, to Holdings and other affiliated companies within Holdings' consolidated structure.  Services provided by Everest Global include executive managerial services, legal services, actuarial services, accounting services, information technology services and others.

The following table presents the expenses incurred by Holdings from services provided by Everest Global for the periods indicated.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Expenses incurred	$	20,700	$	16,537	$	57,073	$	46,984

Affiliates

The table below represents affiliated quota share reinsurance agreements ("whole account quota share") for all new and renewal business for the indicated coverage period:

(Dollars in thousands)
		Percent			Assuming		Single			Aggregate
Coverage Period	Ceding Company	Ceded			Company	Type of Business	Occurrence Limit			Limit
01/01/2002-12/31/2002	Everest Re		20.0	%	Bermuda Re	property / casualty business	$	-		$	-
01/01/2003-12/31/2003	Everest Re		25.0	%	Bermuda Re	property / casualty business		-			-
01/01/2004-12/31/2005	Everest Re		22.5	%	Bermuda Re	property / casualty business		-			-
	Everest Re		2.5	%	Everest International	property / casualty business		-			-
01/01/2006-12/31/2006	Everest Re		18.0	%	Bermuda Re	property business		125,000	(1)		-
	Everest Re		2.0	%	Everest International	property business		-			-
01/01/2006-12/31/2007	Everest Re		31.5	%	Bermuda Re	casualty business		-			-
	Everest Re		3.5	%	Everest International	casualty business		-			-
01/01/2007-12/31/2007	Everest Re		22.5	%	Bermuda Re	property business		130,000	(1)		-
	Everest Re		2.5	%	Everest International	property business		-			-
01/01/2008-12/31/2008	Everest Re		36.0	%	Bermuda Re	property / casualty business		130,000	(1)		275,000	(2)
	Everest Re		4.0	%	Everest International	property / casualty business		-			-
01/01/2009-12/31/2009	Everest Re		36.0	%	Bermuda Re	property / casualty business		150,000	(1)		325,000	(2)
	Everest Re		8.0	%	Everest International	property / casualty business		-			-
01/01/2010-12/31/2010	Everest Re		44.0	%	Bermuda Re	property / casualty business		150,000			325,000
01/01/2011-12/31/2011	Everest Re		50.0	%	Bermuda Re	property / casualty business		150,000			300,000
01/01/2012	Everest Re		50.0	%	Bermuda Re	property / casualty business		100,000			200,000
01/01/2003-12/31/2006	Everest Re- Canadian Branch		50.0	%	Bermuda Re	property business		-			-
01/01/2007-12/31/2009	Everest Re- Canadian Branch		60.0	%	Bermuda Re	property business		-			-
01/01/2010-12/31/2010	Everest Re- Canadian Branch		60.0	%	Bermuda Re	property business		350,000	(3)		-
01/01/2011-12/31/2011	Everest Re- Canadian Branch		60.0	%	Bermuda Re	property business		350,000	(3)		-
01/01/2012	Everest Re- Canadian Branch		75.0	%	Bermuda Re	property / casualty business		206,250	(3)		412,500	(3)
01/01/2012	Everest Canada		80.0	%	Everest Re- Canadian Branch	property business		-			-
(1) The single occurance limit is applied before the loss cessions to either Bermuda Re or Everest International.
(2) The aggregate limit is applied before the loss cessions to either Bermuda Re or Everest International.
(3) Amounts shown are Canadian dollars.

For premiums earned and losses incurred for the period January 1, 2002 through December 31, 2002, Everest Re, Everest National Insurance Company and Everest Security Insurance Company entered into an Excess of Loss Reinsurance Agreement with Bermuda Re, covering workers' compensation losses occurring on and after January 1, 2002, as respect to new, renewal and in force policies effective on that date through December 31, 2002.  The table below represents Bermuda Re's liability limits for any losses per one occurrence.

	Liability Limits
(Dollars in thousands)	Exceeding		Not to Exceed
Losses per one occurrence	$	100,000	$	150,000

The table below represents loss portfolio transfer reinsurance agreements whereby net insurance exposures and reserves were transferred to an affiliate.

(Dollars in thousands)
Effective	Transferring	Assuming	% of Business or			Covered Period
Date	Company	Company	Amount of Transfer			of Transfer
09/19/2000	Mt. McKinley	Bermuda Re		100	%	All years
10/01/2001	Everest Re  (Belgium Branch)	Bermuda Re		100	%	All years
10/01/2008	Everest Re	Bermuda Re	$	747,022		01/01/2002-12/31/2007

The following tables summarize the premiums and losses ceded by the Company to Bermuda Re and Everest International, respectively, and premiums and losses assumed by the Company from Everest Canada for the periods indicated:

	Three Months Ended				Nine Months Ended
Bermuda Re	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Ceded written premiums	$	448,656	$	445,601	$	1,188,944	$	1,195,023
Ceded earned premiums		412,390		398,561		1,237,883		1,158,961
Ceded losses and LAE (a)		263,990		238,405		732,170		1,023,482

	Three Months Ended					Nine Months Ended
Everest International	September 30,					September 30,
(Dollars in thousands)	2012		2011			2012			2011
Ceded written premiums	$	361	$	31		$	1,055		$	670
Ceded earned premiums		583		2,448			2,550			16,489
Ceded losses and LAE		832		(1,005	)		(744	)		5,908

	Three Months Ended				Nine Months Ended
Everest Canada	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Assumed written premiums	$	4,170	$	-	$	12,813	$	-
Assumed earned premiums		3,963		-		11,329		-
Assumed losses and LAE		2,378		-		6,798		-

(a) Ceded losses and LAE include the Mt. McKinley loss portfolio transfer that constitutes losses ceded under retroactive reinsurance and therefore, in accordance with FASB guidance, a deferred gain on retroactive reinsurance is reflected in other expenses on the consolidated statements of operations and comprehensive income (loss).

Everest Re sold net assets of its UK branch to Bermuda Re and provided Bermuda Re with a reserve indemnity agreement allowing for indemnity payments of up to 90% of £25.0 million of the excess of 2002 and prior reserves, provided that any recognition of profit from the reserves for 2002 and prior underwriting years is taken into account.  The limit available under this agreement was fully exhausted at December 31, 2004.