United States securities and exchange commission logo
July 22, 2021
Julie Baron
Chief Financial Officer
Trean Insurance Group, Inc.
150 Lake Street West
Wayzata, MN 55391
Re: Trean Insurance
Group, Inc.
Form 10-K Filed
March 26, 2021
File No. 001-39392
Dear Ms. Baron:
We have limited our review of your filing to the financial
statements and related
disclosures and have the following comments. In some of our comments, we
may ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K Filed March 26, 2021
Item 1. Business, page 6
1. Please revise future
filings to more clearly compare and contrast the economics, revenue
model, reinsurance
strategies and other key characteristics between business with Program
Partners and Owned MGA
s. For example, explain if one is generally more profitable
than the other, the
magnitude of fees in the profitability of each, if and how the revenue
and profitability
profile may change as the Program Partner relationship matures, the
extent and type of
reinsurance used for each, etc.
Issuing carrier services, page 12
2. Please revise future
filings to quantify the revenue from issuing carrier services for each
period presented and
disclose where they are presented in the income statement.
Reinsurance, page 15
3. Please revise future
filings to discuss the magnitude of each type of reinsurance used (i.e.
Julie Baron
Trean Insurance Group, Inc.
July 22, 2021
Page 2
quota share and catastrophe XOL) including the impact of each type on
your financial
results.
Investments, page 19
4. We note your disclosure that as of December 31, 2020, you had $174.7
million of funds
held under reinsurance treaties, that these funds are held in separate
accounts for the
benefit of your Program Partners, and that the funds withheld assets
and associated
investment income belong to your various Program Partners. Please
revise future filings
to disclose which party manages the investments. Also, please tell us
how you considered
whether this arrangement resulted in an embedded derivative. Refer to
guidance in ASC
815-15-55-107. If you have an embedded derivative, please revise
future filings to
disclose how you account for it and provide appropriate information
for investors to
understand it's impact on your financial reporting. For example,
disclose:
the value of the embedded derivative at each period end,
how you measure the embedded derivative and where you present
it in your balance
sheet and income statement, and
the information required by ASC 820-10-50 and ASC 815-10-50.
5. Please tell us and revise future filings as appropriate to clarify why
the amount of funds
held disclosed on page 114 of $143,528 thousand is different than the
amount disclosed on
pages 96, 19, etc. of $174,704 thousand.
Note 11. Accounts Payable and Accrued Expenses, page 104
6. We note Amounts retained for the accounts of others increased
significantly and totaled
$41.6 million at December 31, 2020. Please revise your MD&A in future
filings to
provide additional information related to the nature of and business
reasons related to
these items and describe any trends.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
You may contact Michael Volley, Staff Accountant, at 202-551-3437 or Amit
Pande,
Accounting Branch Chief at 202-551-3423 with any questions.
FirstName LastNameJulie Baron Sincerely,
Comapany NameTrean Insurance Group, Inc.
Division of
Corporation Finance
July 22, 2021 Page 2 Office of Finance
FirstName LastName