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United States securities and exchange commission logo
December 21, 2020
Christopher Uchida
Chief Financial Officer and Corporate Secretary
Palomar Holdings, Inc.
7979 Ivanhoe Avenue, Suite 500
La Jolla, California 92037
Re: Palomar Holdings,
Inc.
Form 10-K for the
Fiscal Year Ended December 31, 2019
Filed February 28,
2020
Form 10-Q For the
Period Ended September 30, 2020
Filed November 13,
2020
File No. 001-38873
Dear Mr. Uchida:
We have reviewed your filings 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 for the Fiscal Year Ended December 31, 2019
Notes to Consolidated Financial Statements
Note 8: Reserve for Losses and Loss Adjustment Expenses, page 101
1. On page 102 you
disclose that loss and loss adjustment expense reserve redundancies of
$0.2 million in 2019
were related primarily to Texas homeowners' coverage; however, it
is apparent that your
loss development tables on pages 103 depict $1.1 million of
favorable development
for your Homeowners' line and $0.9 million unfavorable
development for your
Special Property lines. Please provide us proposed revised
disclosure to be
included in your upcoming 2020 Form 10-K that not only highlights this
offsetting development
but explains the underlying causes of each.
Christopher Uchida
FirstName LastNameChristopher Uchida
Palomar Holdings, Inc.
Comapany21,
December NamePalomar
2020 Holdings, Inc.
December
Page 2 21, 2020 Page 2
FirstName LastName
Form 10-Q For the Period Ended September 30, 2020
Management's Discussion and Analysis of Financial Condition and Results of
Operation
Reconciliation of Non-GAAP Financial Measures
Adjusted Net Income Excluding Catastrophe Losses, page 40
2. Please represent to us that you will not present your non-GAAP
performance measure,
adjusted net income excluding catastrophe losses, in your future
annual or quarterly
reports, earnings releases and/or any other material provided on your
website or
otherwise. In this regard, we note that you are in the business of
writing insurance policies
that specifically cover the catastrophe losses you remove in this
non-GAAP performance
measure and that these claims are normal, recurring cash operating
expenses. See question
100.01 of the Compliance and Disclosure Interpretations for Non-GAAP
Financial
Measures, updated April 4, 2020. Note that you are not precluded from
disclosing the
impact of catastrophe losses in, for example, the form of expense
and/or combined ratios
that exclude catastrophe losses when accompanied by the appropriate
expense or
combined ratio for catastrophe losses and in the aggregate.
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 Rolf Sundwall at 202-551-3105 or Mark Brunhofer at
202-551-3638 if
you have any questions.
Sincerely,
Division of
Corporation Finance
Office of
Finance