12. RELATED-PARTY TRANSACTIONS

Parent

Group entered into a $250,000 thousand long term promissory note agreement with Holdings as of December 31, 2014. The note will mature on December 31, 2023 and has an interest rate of 1.72% that is payable annually. This transaction is presented as a Note Receivable – Affiliated in the Consolidated Balance Sheets of Holdings. Interest income in the amount of $1,075 thousand was recorded by Holdings for the three months ended March 31, 2017, and March 31, 2016.

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
05/15/2013		5,000,000
11/19/2014		5,000,000
		30,000,000

Holdings had purchased and held 9,719,971 Common Shares of Group, which were purchased in the open market between February 2007 and March 2011.

In December, 2015, Holdings transferred the 9,719,971 Common Shares of Group, which it held as other invested assets, at fair value, valued at $1,773,214 thousand, to Preferred Holdings, an affiliated entity and subsidiary of Group, in exchange for 1,773.214 preferred shares of Preferred Holdings with a $1,000 thousand par value and 1.75% annual dividend rate. After the exchange, Holdings no longer holds any shares or has any ownership interest in Group.

Holdings reported both its Parent shares and preferred shares in Preferred Holdings, 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 the preferred shares of Preferred Holdings and on the Parent 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
	March 31,
(Dollars in thousands)	2017		2016
Dividends received on preferred stock of affiliate	$	7,758	$	7,758

Affiliated Companies

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
	March 31,
(Dollars in thousands)	2017		2016
Expenses incurred	$	23,183	$	21,170

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

01/01/2010-12/31/2010

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

01/01/2012-12/31/2014

Everest Re

50.0%

Bermuda Re

property / casualty business

100,000

200,000

01/01/2015-12/31/2016

Everest Re

50.0%

Bermuda Re

property / casualty business

162,500

325,000

01/01/2017

Everest Re

60.0%

Bermuda Re

property / casualty business

219,000

438,000

01/01/2010-12/31/2010

Everest Re- Canadian Branch

60.0%

Bermuda Re

property business

350,000

⁽¹⁾

01/01/2011-12/31/2011

Everest Re- Canadian Branch

60.0%

Bermuda Re

property business

350,000

⁽¹⁾

01/01/2012-12/31/2012

Everest Re- Canadian Branch

75.0%

Bermuda Re

property / casualty business

206,250

⁽¹⁾

412,500

⁽¹⁾

01/01/2013-12/31/2013

Everest Re- Canadian Branch

75.0%

Bermuda Re

property / casualty business

150,000

⁽¹⁾

412,500

⁽¹⁾

01/01/2014

Everest Re- Canadian Branch

75.0%

Bermuda Re

property / casualty business

262,500

⁽¹⁾

412,500

⁽¹⁾

01/01/2012

Everest Canada

80.0%

Everest Re- Canadian Branch

property business

⁽¹⁾Amounts shown are Canadian dollars.

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


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

On July 13, 2015, the Company sold Mt. McKinley to Clearwater Insurance Company, a Delaware domiciled insurance company. As of that date, Mt. McKinley is no longer deemed an affiliated company or related party.

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 and Lloyd's syndicate 2786 for the periods indicated:


	Three Months Ended
Bermuda Re	March 31,
(Dollars in thousands)	2017		2016
Ceded written premiums	$	634,896	$	516,683
Ceded earned premiums		588,874		538,953
Ceded losses and LAE (a)		340,131		290,476


	Three Months Ended
Everest International	March 31,
(Dollars in thousands)	2017			2016
Ceded written premiums	$	(70	)	$	(31	)
Ceded earned premiums		(71	)		(24	)
Ceded losses and LAE		(443	)		142


	Three Months Ended
Everest Canada	March 31,
(Dollars in thousands)	2017		2016
Assumed written premiums	$	12,848	$	10,199
Assumed earned premiums		12,853		10,454
Assumed losses and LAE		6,651		6,987


	Three Months Ended
Lloyd's Syndicate 2786	March 31,
(Dollars in thousands)	2017		2016
Assumed written premiums	$	7,849	$	696
Assumed earned premiums		6,927		88
Assumed losses and LAE		3,433		-

(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, amortization of deferred gain on retroactive reinsurance is reflected in other income on the consolidated statements of operations and comprehensive income (loss). Upon the sale of Mt. McKinley, the value of the remaining deferred gain on retroactive reinsurance was included in the calculation of the realized gain on sale of subsidiary.

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.

Effective February 27, 2013, Group established a new subsidiary, Mt. Logan Re, which is a Class 3 insurer based in Bermuda. Effective July 1, 2013, Mt. Logan Re established separate segregated accounts for its business activity, which will invest in a diversified set of catastrophe exposures.

The following table summarizes the premiums and losses that are ceded by the Company to Mt. Logan Re segregated accounts and assumed by the Company from Mt. Logan Re segregated accounts.


	Three Months Ended
Mt. Logan Re Segregated Accounts	March 31,
(Dollars in thousands)	2017		2016
Ceded written premiums	$	39,179	$	40,931
Ceded earned premiums		33,957		34,872
Ceded losses and LAE		19,759		9,098

Assumed written premiums		2,732		3,560
Assumed earned premiums		2,732		3,560
Assumed losses and LAE		-		-