Via Facsimile and U.S. Mail
Mail Stop 6010
December 20, 2005
Mr. Dan R. Carmichael
Chief Executive Officer and Director
Ohio Casualty Corporation
9450 Seward Road
Fairfield, OH 45014
Re: Ohio Casualty Corporation
Form 10-K for Fiscal Year Ended December 31, 2004
File No. 0-05544
Dear Mr. Carmichael:
We have limited our review of your filing to those issues we
have addressed in our comments. In our comments, we ask you to
provide us with more information so we may better understand your
disclosure.
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
filings.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or 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 year ended December 31, 2004
Management`s Discussion and Analysis, page 18
Results of Operations, page 18
1. We note that you have included in your disclosures a caption
for
the non-GAAP measure operating income (loss). We believe that the
use of this measure must comply with Item 10e of Regulation S-K.
This measure eliminates certain recurring items such as realized
gains (losses). The acceptability of a non-GAAP financial measure
that eliminates recurring items from the most comparable GAAP
measure
depends on all facts and circumstances. We note that excluded
realized investment gains (losses) have the following attributes:
* There is a past pattern of these items occurring in each
reporting
period;
* The financial impact of these items will not disappear or become
immaterial in the future; and
* There is no unusual reason that a company can substantiate to
identify the special nature of these items.
These attributes raise significant questions as to the usefulness
of
this measure for investors and the appropriateness of its
presentation in accordance with Item 10 of Regulation S-K. Please
refer to Questions 8, 9, and 21 of "Frequently Asked Questions
Regarding the Use of Non-GAAP Financial Measures". Please tell
us
how this measure complies with the guidance referred to above.
Loss and Loss Adjustment Expenses, page 39
2. We noticed that the Company`s actuaries determine a point
estimate
by product which management adjusts based upon its best estimate
of
the liability for loss and LAE reserves. For each product line,
please provide to us, in disclosure-type format, a description of
the
method used by the actuary to determine the point estimate for
each
product line and what specific factors/justifications, management
used to adjust the point estimates provided by the actuaries.
3. We note your sensitivity analysis disclosure related to changes
in
the stable loss inflation assumption. Please explain to us
whether
this assumption is the key variable in your loss reserving
methodology and whether you believe the hypothetical one percent
increase in the inflationary trend is reasonably likely to occur.
If
not true, please provide us in disclosure-type format which
assumptions are key to your reserving process and the impact of
reasonably likely changes in those assumptions.
4. As INBR reserves estimates are more imprecise, for each line of
your business, please tell us, in disclosure-type format, the
amounts
of your loss reserves for IBNR claims.
Financial Statements, page 49
Note 1C: Investments, page 54
5. Please explain to us why you include cash equivalents under
paragraph 8 of SFAS 95 as short-term investments.
Please respond to these comments within 10 business days or
tell us when you will provide us with a response. Please furnish
a
letter that keys your responses to our comments and provide the
requested information. Detailed letters greatly facilitate our
review. Please file your letter on EDGAR under the form type
label
CORRESP. Please understand that we may have additional comments
after reviewing your responses to our comments.
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 comments on your filing.
If you have any questions, please contact Mark Brunhofer,
Staff
Accountant, at (202) 551-3638 or Kevin Woody, Branch Chief, at
(202)
551-3629. In this regard, do not hesitate to contact me, at (202)
551-3679.
Sincerely,
Jim B. Rosenberg
Senior Assistant Chief Accountant
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Dan R. Carmichael
Ohio Casualty Corporation
December 20, 2005
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