| Hilltop Holdings Inc. |
200 Crescent Court, Suite 1330 | |
Dallas, Texas 75201 | |
Tel: 214.855.2177 | |
Fax: 214.855.2173 | |
www.hilltop-holdings.com | |
NYSE: HTH |
September 8, 2010 |
| Via Facsimile & EDGAR |
United States Securities and Exchange Commission
Division of Corporate Finance
Mail Stop 4720
100 F Street, N.E.
Washington, D.C. 20549
Re: Hilltop Holdings Inc.
Form 10-K for Fiscal Year Ended December 31, 2009
Filed on March 11, 2010
File No. 001-31987
Ladies and Gentlemen:
Hilltop Holdings Inc., a Maryland corporation (the “Company”), hereby files via EDGAR with the United States Securities and Exchange Commission (the “Commission”) the following response to the Staff’s comments in a telephone conversation with the Company on August 24, 2010. For your convenience, we have repeated the comments prior to the response. All references to page numbers in the discussion below are to the pages in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009, as originally filed with the Commission on March 11, 2010 (the “2009 Form 10-K”).
1. Please refer to your response included in your letter dated July 29, 2010. Since it appears you do not earn premiums or incur losses from this contract please provide us with a comprehensive analysis of ASC 605-45 of your contracts pursuant to participation in the write your own program. ASC 605-45 provides guidance whether an entity should report revenue gross or net with participation of others. The reporting depends on whether the Company performs as an agent of a broker without receiving risk or rewards of ownership, revenue should be recorded on a net basis. Please address ASC 605-45-45-4 through 605-45-45-14 and ASC 605-45-45-18 as appropriate.
Response: Please refer to response to Item 2 below.
2. Please elaborate on your statement in your previous response that if FEMA were unable to perform you would have a legal obligation to the policyholders.
Response: We respectfully request that we be permitted to include the following disclosure prospectively in our Annual Reports on Form 10-K and, if necessary, our Quarterly Reports on Form 10-Q, to clarify the accounting treatment of our write your own program.
“NLASCO voluntarily participates as a Write Your Own carrier in the National Flood Insurance Program, or NFIP. The NFIP is administered and regulated by the Federal Emergency Management Agency. NLASCO operates as a fiscal agent of the Federal government in the selling and administering of the Standard Flood Insurance Policy. This involves writing the policy, the collection of premiums and the paying of covered claims. All pricing is set by FEMA and all collections are made by the Company. The Company cedes 100% of the policies written by the Company on the Standard Flood Insurance Policy to FEMA; however, if FEMA were unable to perform, the Company would have a legal obligation to the policyholders. The terms of the reinsurance agreement are standard terms, which require the Company to maintain its rating criteria, determine policyholder eligibility, issue policies on the Company’s paper, endorse and cancel policies, collect from insured and process claims. NLASCO receives ceding commissions from NFIP for underwriting administration, claims management, commission and adjuster fees.
If any members of the Commission have any questions concerning the response above or desire further information or clarification in connection therewith, he or she should contact the undersigned at (214) 855-2171.
| Very truly yours, |
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| /s/ DARREN PARMENTER |
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| Darren Parmenter |
| Senior Vice President - Finance |
CGP
cc: Ibolya Ignat
U.S. Securities and Exchange Commission