Via Facsimile and U.S. Mail
Mail Stop 6010
August 3, 2005
Mr. Joseph F. Fisher
Executive Vice President and Chief Financial Officer
Platinum Underwriters Holdings, Ltd.
The Belvedere Building
69 Pitts Bay Road
Pembroke, Bermuda HM 08
Re: Platinum Underwriters Holdings, Ltd.
Form 10-K for Fiscal Year Ended December 31, 2004
Filed March 16, 2005
File No. 001-31341
Dear Mr. Fisher:
We have limited our review of your filing to those issues we
have addressed in our comments. Where indicated, we think you
should
revise your document in response to these comments. If you
disagree,
we will consider your explanation as to why our comment is
inapplicable or a revision is unnecessary. Please be as detailed
as
necessary in your explanation.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
Form 10-K for the Fiscal Year Ended December 31, 2004
Business
Finite Risk, page 10
1. We note from your disclosure that you offer finite reinsurance
and
believe it can be expanded upon. Please disclose for each main
category of finite risk contracts:
a. The economic benefit that you are attempting to provide to the
ceding companies.
b. Whether the protection is prospective or retrospective.
c. Any provisions in the contracts and/or treaties that are not
usually included in a standard reinsurance contract (i.e. certain
risk mitigation features).
Management`s Discussion and Analysis of Financial Condition and
Results of Operations
Critical Accounting Policies
Premiums, page 35
2. We believe your disclosure in Management`s Discussion and
Analysis
regarding the estimate of assumed premium on your reinsurance
business could be improved to better explain the judgments and
uncertainties surrounding this estimate and the potential impact
on
your financial statements. Accordingly, please revise MD&A to
include the following information:
a. Discuss the key assumptions used to arrive at management`s best
estimate of the premiums written but not reported estimate and the
premiums earned but not reported estimate, and what specific
factors
led management to believe each assumed premium estimates are the
most
realistic.
b. Include quantified and narrative disclosure for each of your
premium estimates of the impact that reasonably likely changes in
one
or more of the variables (i.e. methodology and/or assumptions
used)
would have on reported results, financial position and liquidity.
c. Disclose the provision for doubtful accounts that is recorded
related to the assumed premium estimate.
Unpaid Losses and LAE, page 36
3. We note that you set your claim reserves for assumed
reinsurance
operations based upon information received from the cedant. As
this
appears to pose a potential for a higher degree of uncertainty in
establishing the estimate of assumed loss reserves as compared to
direct loss reserves, please expand the disclosure in the critical
accounting estimates section of MD&A related to this uncertainty.
Accordingly, please revise MD&A to include the following
information:
a. Include in this disclosure the risks associated with making
this
estimate and the effects and expected effects this uncertainty has
or
will have on management`s judgments and assumptions in
establishing
the assumed loss reserve.
b. The nature and extent of the information received from the
cedants
related to policies, claims, unearned premiums and loss reserves;
c. The time lag from when claims are reported to the cedant to
when
the cedant reports them to the company and whether, how, and to
what
extent this time lag effects the loss reserve estimate;
d. How management uses the information received from the cedants
in
its determination of its assumed loss reserves, whether
reinsurance
intermediaries are used to transact and service reinsurance
policies,
and how that impacts the loss reserving methodology;
e. The amount of any backlog related to the processing of assumed
reinsurance information, whether the backlog has been reserved for
in
the financial statements and, if applicable, when the backlog will
be
resolved;
f. What process management performs to determine the accuracy and
completeness of the information received from the cedants;
g. How management resolves disputes with cedants, how often
disputes
occur, and the magnitude of any current, material disputes; and
h. Whether management uses historical loss information to validate
its existing reserves and/or as a means of noticing unusual trends
in
the information received from the cedants.
4. We believe your disclosure in Management`s Discussion and
Analysis
regarding the reserve for loss and loss adjustment expenses could
be
improved to better explain the judgments and uncertainties
surrounding this estimate and the potential impact on your
financial
statements. We believe that disclosures explaining the likelihood
that materially different amounts would be reported under
different
conditions or using different assumptions is consistent with the
objective of Management`s Discussion and Analysis. Accordingly,
please revise MD&A to include the following information for each
of
your lines of business:
a. Please disclose the reserves accrued as of the latest balance
sheet date presented. The total of theses amounts should agree to
the amount presented on the balance sheet.
b. Please disclose the range of loss reserve estimates as
determined
by your actuaries. Include the key assumptions used to arrive at
management`s best estimate of loss reserves within that range and
what specific factors led management to believe this amount rather
than any other amount within the range represented the best
estimate
of incurred losses. Include quantified and narrative analyses of
the
impact that reasonably likely changes in one or more of the
variables
(i.e. actuarially method and/or assumptions used) would have on
reported results, financial position and liquidity.
c. If you do not calculate a range around your loss reserve, but
instead use point estimates please include the following
disclosures:
* Disclose the various methods considered and the method that was
selected to calculate the reserves. If multiple point estimates
are
generated, include the range of these point estimates. Include a
discussion of why the method selected was more appropriate over
the
other methods.
* Discuss how management determined the most appropriate point
estimate and why the other point estimates were not chosen. Also
clarify whether the company actually records to the point estimate
or
if not, how that estimate is used.
* Include quantified and narrative disclosure of the impact that
reasonably likely changes in one or more of the variables (i.e.
actuarially method and/or assumptions used) would have on reported
results, financial position and liquidity.
d. Because IBNR reserve estimates are more imprecise, please
disclose
the amount of IBNR separately from case reserves for each line of
business.
Notes to Consolidated Financial Statements
Unpaid Losses and LAE, page F-17
5. We note from your disclosure that favorable development
occurred
due to changes in 2004 of estimates of premiums and the patterns
of
their earnings across current and prior accident years. Please
clarify in your filing how changes in premiums estimates impacted
the
development of your loss reserves.
* * * *
Please amend your filing within 10 business days or tell us
when you will provide us with a response. You may wish to provide
us
with marked copies of the amendment to expedite our review.
Please
furnish a cover letter with your amendment that keys your response
to
our comment. Detailed cover letters greatly facilitate our
review.
Please file your letter on EDGAR under the form type label
CORRSEP.
Please understand that we may have additional comments after
reviewing your amendment and response to our comment.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed investment decision. Since the
company and its management are in possession of all facts relating
to
a company`s disclosure, they are responsible for the accuracy and
adequacy of the disclosures they have made.
In connection with responding to our comments, please
provide,
in your letter, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comment on your filing.
You may contact Dana Hartz, Staff Accountant, at (202) 551-
3648
or Joseph Roesler, Review Accountant, at (202) 551-3628 if you
have
questions regarding the comments. In this regard, do not hesitate
to
contact me, at (202) 551-3679.
Sincerely,
Jim B. Rosenberg
Senior Assistant Chief
Accountant
??
??
??
??
Mr. Joseph F. Fisher
Platinum Underwriters Holding, Ltd.
August 3, 2005
Page 5