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February 8, 2019
Mark Armstrong
Chief Executive Officer
GC Palomar Holdings
7979 Ivanhoe Avenue, Suite 500
La Jolla, California 92037
Re: GC Palomar Holdings
Draft Registration Statement on Form S-1
Submitted December 14, 2018
CIK No. 0001761312
Dear Mr. Armstrong:
We have reviewed your draft registration statement 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 this letter by providing the requested information and
either submitting
an amended draft registration statement or publicly filing your registration
statement on
EDGAR. If you do not believe our comments apply to your facts and circumstances
or do not
believe an amendment is appropriate, please tell us why in your response.
After reviewing the information you provide in response to these comments
and your
amended draft registration statement or filed registration statement, we may
have additional
comments.
Draft Registration Statement on Form S-1
Prospectus Summary
Our Competitive Strengths, page 5
1. You state in the last paragraph on page 6 that your hypothetical net
loss in the event of a
historically significant catastrophe such as the 1906 San Francisco or
the 1994 Northridge
earthquake would be capped at $6.15 million. Please clarify to the
extent true that you
remain ultimately liable for your policies in the event that the
reinsurers are unable to pay
any claims, and that the amount of reinsurance you are able to obtain
may change from
time to time. Additionally, if you also have exposure from your
earthquake policies for
attritional losses arising from fire damage, please disclose this fact.
Mark Armstrong
FirstName LastNameMark Armstrong
GC Palomar Holdings
Comapany NameGC Palomar Holdings
February 8, 2019
February 8, 2019 Page 2
Page 2
FirstName LastName
Summary Risk Factors, page 9
2. Please add a bullet discussing the control Genstar Capital will have
after the offering,
including its affiliation with board members, and a separate bullet
discussing material
terms of your debt.
3. Please expand the eighth bullet to specify that over 70% of your gross
written premiums
for the year ended December 31, 2017 were distributed through two
program
administrators, as you more fully explain in your risk factor on page
20.
Corporate Information, page 10
4. You state on page 10 that you are majority owned by Genstar Capital,
but you also
state here that your current sole shareholder is GC Palomar Investor
LP, which currently
holds one share. Please expand your disclosure to more clearly explain
your current
structure and the transactions you reference as "domestication
transactions."
Implications of Being an Emerging Growth Company, page 10
5. Please supplementally provide us with copies of all written
communications, as defined
in Rule 405 under the Securities Act, that you, or anyone authorized
to do so on your
behalf, present to potential investors in reliance on Section 5(d) of
the Securities Act,
whether or not they retain copies of the communications.
Our certificate of incorporation will provide that the Court of Chancery of the
State of Delaware
will be the exclusive forum. . ., page 39
6. We note that your forum selection provision identifies federal
district courts of the United
States as the exclusive forum for the resolution of any complaint
asserting a cause of
action arising under the Securities Act. Please disclose that there is
uncertainty as to
whether a court would enforce such provision.
Use of Proceeds, page 44
7. To the extent known, please revise to state the approximate amount of
proceeds intended
to be contributed to your insurance subsidiaries.
Capitalization, page 46
8. We note your domestication transactions and Genstar Capital
Stockholders Agreement
that will be executed prior to the offering and impact your net
tangible book value per
share. Please tell us your consideration of disclosing unaudited pro
forma financial
information to give effect to the consummation of these probable
events, including the
conversion of outstanding securities.
Mark Armstrong
GC Palomar Holdings
February 8, 2019
Page 3
Industry
Specialty Property Industry, page 75
9. Please expand on your disclosure in the last sentence of the first full
paragraph on page 77
to explain why you believe you have a unique opportunity.
Business
Technology, page 98
10. Please clarify the extent to which your proprietary technology platform
is licensed rather
than developed in-house, and disclose any material license agreements.
Consolidated Financial Statements, page F-1
11. You have only included two years of audited financial statements when
comparative
interim unaudited financial statements are also required. Please advise
if you are omitting
required financial statements under Section 71003 of the FAST Act and
will amend to
include all financial statements required by Regulation S-X at the date
of such amendment
prior to requesting effectiveness.
Note 11. Capital Stock, page F-31
12. Once you have an estimated offering price or range, please explain to us
the reasons for
any differences between the recent valuations of your common share
leading up to the
initial public offer and the estimated offering price. This information
will help facilitate
our review of your accounting for equity issuances including stock
compensation.
General
13. Please provide us proofs of all graphics, visual, or photographic
information you
will provide in the printed prospectus prior to its use, for example in a
preliminary
prospectus. Please note that we may have comments regarding this
material.
You may contact Bonnie Baynes at 202-551-4924 or Lisa Vanjoske at
202-551-3614 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Dorrie Yale at 202-551-8776 or Mary Beth Breslin at 202-551-3625 with
any other
questions.
Sincerely,
FirstName LastNameMark Armstrong
Division of
Corporation Finance
Comapany NameGC Palomar Holdings
Office of
Healthcare & Insurance
February 8, 2019 Page 3
cc: Michael S. Kagnoff, Esq.
FirstName LastName