EGEverest Group

Basis of Presentation Application of Recently Issued Accounting Standard Changes, page 6 1. You state that you are the primary beneficiary of Mt. Logan Re, but not of the underlying separate segregated accounts and therefore have deconsolidated those segregated accounts. Please tell us if the segregated accounts are required to be included in the financial statements of Mt.

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Logan Re in which you are the primary beneficiary, and if so, why deconsolidation of these accounts is in accordance with GAAP. Provide us a detailed analysis of your accounting for the deconsolidation of the separate segregated accounts under ASU 2015-02. 13. Segment Reporting, page 27 2. Please tell us the basis for no longer reporting Mt. Logan Re as a separate segment. Refer to ASC 280-10-50-10. In this regard, please tell us if your organizational structure, as noted on your website, has changed.

Mt. Logan Re is a Class 3 insurer registered in Bermuda under The Segregated Accounts Act 2000. Under the provisions of The Segregated Accounts Act 2000, each segregated account (or silo) must economically stand on its own. Each silo is governed by its shareholders, must fully collateralize its obligations and no silo has recourse to the general account (host) or to the other silos.

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The silos offer capital market investors the opportunity to gain exposure to the risk-reward profile of diversifying, non-correlated reinsurance risks via privately offered insurance linked securities in the form of preference shares. Conversely, Mt. Logan Re as the host insurer is not permitted to write business in its own account. In addition, Mt Logan Re is required to exclude its segregated accounts business (silos) from its statutory income statement in its annual filings with the Bermuda Regulatory Authority. On the balance sheet, all assets related to the segregated account business are reflected on a single asset line and correspondingly, all liabilities from the segregated account business are recorded on a single liability line.

GAAP Consolidation Evaluation and Analysis

The Company performed a detailed evaluation and analysis of ASU 2015-02, pursuant to ASC 810.

The Company's analysis began with a series of scope questions for determining which consolidation model should apply under U.S. GAAP. Specifically: (1) Does Mt. Logan Re as the host and each segregated cell (silo) meet the definition of a legal entity for purposes of applying the consolidation guidance in ASC 810, (2) Is the host entity a Variable Interest Entity ("VIE"), (3) determine the primary beneficiary of the host entity and (4) determine the primary beneficiaries of each silo.

The Codification defines "legal entity" as almost any legal structure that is used to own assets, issue debt, or otherwise conduct activities. Mt. Logan Re, the general account, (the host) is a legal entity wholly owned by the Company. Each of the segregated cells were deemed to be a silo within Mt. Logan Re and are also considered to be a separate VIE due to:

All of the assets, liabilities, and equity related to segregated cells are separate from the other cells and the remainder of the legal entity, the general (host) account.

None of the liabilities or claims associated with the segregated cells are payable from the other cells or the remainder of the assets of the legal entity, the general (host) account.

Per the consolidation requirements in ASC 810-10-15-1, there are only four general exceptions to the requirements for consolidating a legal entity. Broadly speaking, the exceptions apply to (1) employee benefit plans, (2) investment companies, (3) governmental entities, and (4) money market funds.

None of these scope exceptions apply to Mt. Logan Re.

There are four scope exceptions to application of the VIE model: (1) Not-for-profit entities, (2) Separate accounts of life insurance entities, (3) Exhaustive efforts, and (4) Business entities.

Does the reporting entity have a variable interest in the legal entity?

Yes, pursuant to ASC 810-10: 55-17 the identification of variable interests requires an economic analysis of the rights and obligations of a legal entity's assets, liabilities, equity, and other contracts. Variable interests are contractual, ownership, or other pecuniary interests in a legal entity that change with changes in the fair value of the legal entity's net assets exclusive of variable interests. The VIE subsections use the terms expected losses and expected residual returns to describe the expected variability in the fair value of a legal entity's net assets exclusive of variable interests.

The Company does have a majority interest in the legal entity Mt. Logan Re (the Host) and does have an overall minor participation in the total segregated cell investments:

The Company owns 100% of the common equity in the core (host) entity and therefore the core entity is an Everest Re Group, Ltd. VIE. Management concluded there was insufficient equity at risk and as such the host entity qualifies as a VIE. This represents a change in accounting policy which was adopted concurrent with the adoption of ASU 2015-02. This is consistent with the SEC position shared with the Securities Industry and Financial Markets Association with respect to umbrella entities for international series funds.

Having determined that the host entity is a VIE, management then considered whether the Company has a variable interest in the silos and effectively treated them as separate legal entities for consideration. The term host refers to the remaining legal entity after removal of all the identified silos. When silos exist and the host is a VIE, the units of account for potential consolidation are each respective silo and the host itself.

ASC 810-10-25-38 Subsequent to ASU 2015-02) states that: A reporting entity shall consolidate a VIE when that reporting entity has a variable interest (or combination of variable interests) that provides the reporting entity with a controlling interest on the basis of the provisions in paragraphs 810-10-25-38A through 25-38J. The reporting entity that consolidates a VIE is called the primary beneficiary of that VIE. Pursuant to ASC 810-10-25-38A, a reporting entity is deemed to have a controlling financial interest in a VIE if it has both of the following characteristics:

The power to direct activities of a VIE that most significantly impact the VIE's economic performance, and

The obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The quantitative approach described in the definition of the terms expected losses, expected residual returns and expected variability is not required and shall not be the sole determinant as to whether a reporting entity has these obligations or rights.

The Company has both characteristics of a controlling financial interest in Mt. Logan Re (host) but very limited power and economic exposure in the silos.

In the host entity, Everest Re Group, Ltd. controls the election of Board of Directors, has all the decision making powers and has sole interest in all operating results.

In the segregated cells or silos, the power and economic benefits rest with the preferred stockholders of each silo. At December 31, 2015, there were 10 active capitalized silos with total capital of $812.5 million. Of this amount, $50.0 million, or approximately 6%, spread across 4 of the 10 segregated silos, represented capital from the Company. The balance of the capital represents investments by non-related third party investors. The $50.0 million represents primarily start-up or seed money for new funds to attract additional investors and has the same power and economic benefits as the third party investors. For 3 of the 4 silos invested in by the Company, the ownership percentage was less than a majority, 6.2%, 7.3% and 16.9%. The Company's investment in one cell represented 61.5% of the total capital in the cell; however, the total capital in that cell was less than 5% of the total capital in all cells. The Company's intent is not to be a majority shareholder in any of the cells for any extended period of time. As a result, of the relative immateriality of the Company's investment in these cells and the Company's intent not to continue to be a majority shareholder of any cell, management determined it was not necessary to continue to consolidate the cells.

Conclusion

The Host:

Based on the facts and circumstances analyzed, Mt. Logan, the host entity is a VIE and should be and is consolidated as the Company is the primary beneficiary of this entity.

The Segregated cells (silos):

Considering the above criteria and the following summarized facts and circumstances, the Company determined that it was appropriate to analyze each silo for consolidation. The Company determined that consolidation was not necessary as it was not the primary beneficiary for the cells in which it has an ownership interest less than 10% for consolidation and an analysis of whether the Company was the primary beneficiary for the remaining two cells was not deemed necessary given the immaterial nature of such cells. As such, the Company deconsolidated all ten of the segregated cells.

These facts and circumstances include:

The host parent entity is a VIE as it lacks sufficient equity at risk

Each segregated cell has its own underwriting/investment objectives and policies

Each segregated cell has its own investors separate from other cells

Each segregated cell is considered a separate silo for investor protections in virtually all circumstances

Each segregated cell is operating on a standalone basis for the benefit of the investors within that cell.

The Company has a relatively small investment in the cells to provide seed money or show "skin in the game" for third party investors.

No investment in any segregated cell is material/significant in a monetary sense nor is it in a combined sense. The value/percentage of the Company's investment in each segregated cell decreases as external investors buy into the cell and/or as the Company withdraws the seeding money.

The Company has concluded that it is the primary beneficiary of Mt. Logan Re Core, but not of the underlying separate segregated cells and therefore has deconsolidated these segregated cells. This change has no impact to the net income or retained earnings attributable to the consolidated financial statements for Everest Re Group, Ltd.

The Company's investment in the cells is reflected as part of other assets and the income from the cells is reflected in other income. The amounts are not material to the overall operations of the Company. The income generated from the Core or Host company is also reflected in other income.

The Company applied a retrospective approach and deconsolidated all prior periods because this makes the financial statements comparable for all periods.

13. Segment Reporting, page 27

2. Please tell us the basis for no longer reporting Mt. Logan Re as a separate segment. Refer to ASC 280-10-50-10. In this regard, please tell us if your organizational structure, as noted on your website, has changed.

Response:

Virtually all of the activity previously reported in the Mt. Logan Re segment related to the underwriting results of the segmented silos of Mt. Logan Re and by deconsolidating the silos, the remaining activity in the core entity does not meet the materiality criteria for separate reporting under ASC 280-10-50-10. The total of the Company's underwriting income from their seed money in the silos combined with the commission income for the host consolidated entity is less than 2.5% of the total pretax consolidated net income for the Company for the year ended December 31, 2015.

Our organizational structure, as reflected on our website has not changed. Mt. Logan Re is still an owned legal entity, even though the segregated silos under Mt. Logan Re have been deconsolidated.

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We note that in Part III you incorporate by reference certain information from your definitive proxy statement for your 2013 annual meeting of shareholders. Please note that we will be unable to complete our review of your Form 10-K until such time as you have filed and we have reviewed the information required in Part III, at which time, we may have additional comments.

The Company acknowledges there may be additional comments following the staff’s review of its proxy statement. Read in the reply ↗

Please provide us proposed disclosure to be included in future periodic reports that explains the relationship between pre-tax income (loss) for your US and non-US operations and the corresponding underwriting gains (losses) for your operating segments for each period presented.

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For example, your US Reinsurance and Insurance segments produced combined underwriting losses of $97.8 million in 2012 and $200.4 million in 2011, while you reported US pre-tax income of $432.3 million and US pre-tax losses of $395.2 million in these years, respectively. Include an explanation of how the reconciling items disclosed on page F-49 were allocated in your determination of pre-tax income (loss) for your US and non-US operations and the factors underlying changes in this allocation process for each period presented. Also, provide us proposed disclosure that explains the trends and expected future trends in pre-tax income (loss) for your US and non-US operations. Notes to Consolidated Financial Statements 15. Dividend Restrictions and Statutory Financial Information, page F-41

In Footnote 11, INCOME TAXES on page F-29, the Company discloses that …”The provision for income taxes in the consolidated statement of operations and comprehensive income (loss) has been determined in accordance with the individual income of each entity and the respective applicable tax laws”… The pre-tax income (loss) split between US and non-US is an accumulation of actual results based on each entity’s country of domicile. Conversely, the operating segments are not determined or managed on a strict US versus non-US basis.

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This is addressed in the segment definitions which disclose a mixture of US and non-US business in the International and Insurance segments. In addition, the Company discloses that business is generally reported in the segment where it is first produced, before the impact of any inter-affiliate reinsurance.

Under Part II, Item 7, Industry Conditions, the Company describes the overall global insurance and reinsurance market conditions. As explained above, some of the international business written by the company results in pre-tax US income. As a result, favorable global market conditions should result in both increased US pre-tax income, as well as, non-US pretax income. Generally, there are not distinctive market trends that would enable the Company to anticipate a greater or lesser movement in its US versus non-US pre-tax income. The fluctuations in the US versus non-US pretax income generally result from how each of its subsidiaries is impacted from catastrophic events and fluctuations in realized investment gains (losses).

To enhance its US and non-US income disclosure, the Company will expand the second paragraph of Footnote 11, INCOME TAXES in future filings as follows: Pre-tax income generated by Group’s non-Bermuda subsidiaries and the UK branch of Bermuda is subject to applicable federal, foreign, state and local taxes on corporations. Company subsidiaries domiciled in the US, as well as, the Canadian and Singapore branches of Everest Re generate US pre-tax income (loss). Foreign domiciled subsidiaries, including the UK branch of Bermuda Re, generate non-US pre-tax income (loss). Fluctuations in US and non-US pre-tax income (loss) primarily result from the impact of catastrophe losses and realized investment gains (losses) on each subsidiary and branch.

Notes to Consolidated Financial Statements

15. Dividend Restrictions and Statutory Financial Information, page F-41

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Please provide us the following information as proposed disclosure to be included in future periodic filings:  Disclose the amount of statutory capital and surplus necessary to satisfy regulatory requirements if significant in relation to the entity’s statutory capital and surplus, as required under ASC 944-505-50-1b. If not significant, clarify in the disclosure.

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 Disclose the amounts of restricted net assets of subsidiaries as of December 31, 2012 or tell us how your current disclosure meets the objective of Rule 4-08(e) (3) (ii) of Regulation S-X.

The minimum required regulatory statutory and surplus is not meaningful given the size of the Company’s principal operating insurance entities. The Company believes that the more meaningful information is the amount of capital that the operating entities may dividend to its holding companies without prior regulatory approval. The Company also believes that its current disclosure meets the requirements of Rule 4-08(e) (3) (ii) of Regulation S-X.

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Footnote 5, Credit Facilities and Footnote 8, Junior Subordinated Debt Securities Payable disclose the amount of parent company capital and the amount of statutory surplus of Everest Reinsurance Company, “Everest Re”, that must be maintained to comply with debt covenants. The Company also views statutory capital and surplus that cannot be returned to the parent company without prior regulatory approval as being subject to regulatory restriction.

The Company will expand Footnote 15, Dividend Restrictions and Statutory Information in future filings as follows:

Statutory Financial Information.

Everest Re prepares its statutory financial statements in accordance with accounting practices prescribed or permitted by the National Association of Insurance Commissioners (“NAIC”) and the Delaware Insurance Department. Prescribed statutory accounting practices are set forth in the NAIC Accounting Practices and Procedures Manual. The capital and statutory surplus of Everest Re was $2,612,995 thousand and $2,322,115 thousand at December 31, 2012 and 2011, respectively. The statutory net income of Everest Re was $359,816 thousand for the year ended December 31, 2012, the statutory net loss of Everest Re was $326,400 thousand for the year ended December 31, 2011 and the statutory net income of Everest Re was $218,452 thousand for the year ended December 31, 2010.

The $2,612,995 thousand of capital and statutory surplus at December 31, 2012 exceeded minimum regulatory requirements. The balance of the capital and statutory surplus, after permitted dividends of $359,026 thousand, is subject to regulatory restrictions.

Bermuda Re prepares its statutory financial statements in conformity with the accounting principles set forth in Bermuda in The Insurance Act 1978, amendments thereto and related regulations. The statutory capital and surplus of Bermuda Re was $2,904,406 thousand and $2,736,599 thousand at December 31, 2012 and 2011, respectively. The statutory net income of Bermuda Re was $475,353 thousand, $97,359 thousand and $391,862 thousand for the years ended December 31, 2012, 2011 and 2010, respectively.

The $2,904,406 thousand of statutory capital and surplus at December 31, 2012 exceeded minimum regulatory requirements. The balance of the statutory capital and surplus, after permitted dividends of $726,101 thousand, is subject to regulatory restrictions.”

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Refer to your response to prior comment two. Please provide us the break out of each reconciling item for each year disclosed in the table on page F-49 between US and non- US pre-tax income (loss). Also explain for us the basis for determining US versus non- US pre-tax income (loss) for each of the reconciling items for each year presented.

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In addition, tell us the intent of your disclosure that “net income deriving from and assets residing in individual foreign countries in which the Company writes business are not identifiable in the Company’s financial records” and what effect it has on your assertions regarding amounts disclosed in the financial statements and related notes.

The following table provides the split between US and non-US income/(expense) for underwriting gain (loss) and the reconciling items comprising pre-tax income (loss):

Year Ended December 31, 2012

(Dollars in thousands)

U.S.

Non- U.S.

Total

Underwriting gain (loss)

$

42,774

216,228

259,003

Net investment income

287,382

312,820

600,202

Net realized capital gains (losses)

143,326

21,073

164,400

Net derivative gain (loss)

-

(9,738

)

Corporate expenses

(8,764

(15,211

(23,976

Interest, fee and bond issue cost amortization expense

(50,746

(2,936

(53,683

Other income

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(expense)

18,360

(15,042

3,318

Income (loss) before taxes

432,332

507,194

939,526

Year Ended December 31, 2011

(574,141

(183,641

(757,781

292,980

327,062

620,041

(28,565

35,488

6,923

(11,261

(6,073

(10,388

(16,461

(50,763

(1,556

(52,319

(28,644

5,556

(23,089

(395,206

161,260

(233,947

Year Ended December 31, 2010

(138,501

29,303

(109,200

326,321

327,142

653,463

2,774

99,137

101,911

(1,119

(5,867

(9,047

(14,914

(54,553

(1,277

(55,830

10,968

5,958

16,927

141,142

450,097

591,238

The basis of the split between US and non-US income (loss) for each item is based upon the country of incorporation for the entities within the consolidated group. The operating results for all companies incorporated in the US comprise the US pre-tax results and all other entities comprise the non-US pre-tax results.

In future filings, the Company will expand the Income Taxes footnote (footnote 11 on page F-29 for the December 31, 2012 filing) to include the above components of US versus non-US pre-tax income (loss):

The weighted average expected tax provision has been calculated using the pre-tax income (loss) in each jurisdiction multiplied by that jurisdiction’s applicable statutory tax rate. Reconciliation of the difference between the provision for income taxes and the expected tax provision at the weighted average tax rate for the periods indicated is provided below:

Years Ended December 31,

2012

2011

2010

Pre-tax income (loss)

Expected tax provision at the applicable statutory rate(s)

151,316

11,013

(138,322

12,216

49,436

33,716

Increase (decrease) in taxes resulting from:

Tax exempt income

(20,623

(33,672

(56,457

Dividend received deduction

(8,351

(6,893

(2,784

Proration

3,138

5,080

8,510

Tax audit settlement

(2,508

(710

(36,511

Uncertain tax positions

(31,912

8,139

(5,237

Other

5,377

3,123

(1,471

2,172

(11,529

1,340

Total income tax provision

96,437

14,136

(167,849

14,388

(54,572

35,056

The disclosure “net income deriving from and assets residing in individual foreign countries in which the Company writes business are not identifiable in the Company’s financial records” addresses segment reporting disclosure requirement 280-10-50-41, Information About Geographic Areas. This disclosure indicates that the Company does not maintain financial statements by individual countries; however, it is able to provide gross written premiums for the largest country outside of the US.

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You assert that “operating segments are not determined or managed on a strict US or non-US basis.” However, your disclosure on page F-47 appears to indicate that business written by your US reinsurance and Insurance operations is predominantly in the US and that written by your International and Bermuda operations is predominantly in foreign countries.

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For example, your disclosure states that your US Reinsurance operation writes business “primarily within the US” and your International operation writes “non-US property-and casualty reinsurance.” Please provide us proposed disclosure to be included in future filings that explains how each of your operating segments is managed with regard to business written in the US and non-US markets. Notes to Consolidated Financial Statements 15. Dividend Restrictions and Statutory Financial Information, page F-41

The segments are managed based upon type of business: reinsurance versus insurance. Reinsurance is further segregated geographically by US, International, which encompasses Canada, Asia and South America and Bermuda, which includes Bermuda, Ireland, UK and Europe. Historically, the reference to US versus non-US in the segment definitions was geographical in nature as opposed to indicating whether the business was subject to US tax.

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In future filings, the Company will eliminate the reference to non-US business to eliminate any confusion as to the tax status of the business as follows:

The U.S. Reinsurance operation writes property and casualty reinsurance and specialty lines of business, including Marine, Aviation, Surety and A&H business, on both a treaty and facultative basis, through reinsurance brokers, as well as directly with ceding companies primarily within the U.S. The International operation writes foreign property and casualty reinsurance through Everest Re’s branches in Canada and Singapore and through offices in Brazil, Miami and New Jersey. The Bermuda operation provides reinsurance and insurance to worldwide property and casualty markets through brokers and directly with ceding companies from its Bermuda office and reinsurance to the United Kingdom and European markets through its UK branch and Ireland Re. The Insurance operation writes property and casualty insurance, including medical stop loss insurance, directly and through general agents, brokers and surplus lines brokers within the U.S. and Canada.

Notes to Consolidated Financial Statements

15. Dividend Restrictions and Statutory Financial Information, page F-41

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Please refer to prior comment three. Please quantify for us the net assets for Everest Re and Bermuda Re on a GAAP-basis that are subject to regulatory restrictions. Provide us proposed disclosure to be included in future filings, as applicable.

The regulatory capital requirements for our licensed insurance subsidiaries are based upon statutory capital as opposed to GAAP basis equity or net assets. These requirements limit the amount of dividends that the subsidiaries may declare to its parent without prior regulatory and stipulate the amount of statutory capital that is required to be maintained at each subsidiary. These statutory based requirements are standard industry practice and the Company believes these disclosures meet the requirements of Rule 4-08(e) (3) (ii). Please see response to comment 4.

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below for proposed future disclosure regarding required regulatory capital.

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Please refer to prior comment three. As previously requested, please provide us proposed disclosure to be included in future filings of the amount of statutory capital and surplus necessary to satisfy regulatory requirements if significant in relation to the entity’s statutory capital and surplus, as required under ASC 944-505-50-1b. If not significant, clarify in proposed disclosure to be included in future filings.

The Company’s licensed insurance entities are subject to annual capital adequacy tests by the applicable regulators. These tests use risk based models using individual entity exposures to determine a minimum capital and surplus level. This minimum level is then compared to the actual capital and surplus level to determine if the entity has sufficient capital. As examples, the Company’s two major operating subsidiaries, Everest Re and Bermuda Re are subject to capital adequacy testing by their regulators.

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Everest Re is subject to the Risk-Based Capital model (RBC) developed by the National Association of insurance Commissioners and at December 31, 2012, its determined authorized control level risk-based capital was

$673.1 million compared to its total adjusted capital of $2.6 billion. As long as the total adjusted capital is 200% or more of the authorized control level capital, no action is required by the Company.

Bermuda Re is subject to the Bermuda Solvency Capital Requirement (BSCR) administered by the Bermuda Monetary Authority (BMA). No regulatory action is taken if an insurer’s capital and surplus is equal to or in excess of their enhanced capital requirement determined by the BSCR model. In addition, the BMA has established a target capital level for each insurer, which is 120% of the enhanced capital requirement. Using December 31, 2012 data, Bermuda Re’s target capital level was $2.0 billion compared to actual statutory capital and surplus of $2.9 billion.

In future filings, the Company will add the following paragraph to its Dividend Restrictions and Statutory Financial Information footnote:

In addition to dividend restrictions, each of the Company’s operating insurance and reinsurance entities are subject to statutory capital and surplus requirements by their applicable regulators. These requirements are based upon the results from risk-based models using inputs for individual entities. These models generally develop a minimum capital and surplus level, along with a higher targeted capital and surplus level. In all instances, the statutory capital and surplus levels for the individual entities exceed the regulatory targeted levels.

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