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Commitments, Contingencies and Other Items | 6 Months Ended
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Jun. 30, 2015
Commitments and Contingencies Disclosure [Abstract] |
Commitments, Contingencies and Other Items | COMMITMENTS, CONTINGENCIES AND OTHER ITEMS There are no material changes from the commitments and contingencies previously disclosed in the Company’s Form 10-K for the year ended December 31, 2014, other than those discussed below and in “Note 7. Debt and Credit Facilities.” Contingent Gain During the second quarter of 2015, a decision was reached by the U.S. Court of Appeals for the District of Columbia Circuit in a case between the IRS and a Bermuda-based reinsurance company (the “Plaintiff”) in favor of the Plaintiff. In deciding the case, the U.S. Court of Appeals concluded that federal excise tax does not apply to foreign to foreign retrocessions. The IRS, however, may take further action related to this decision. As a result of this decision by the U.S. Court of Appeals, it is possible the Company may recognize a gain in a future period, currently estimated to be $8.5 million, related to its foreign to foreign retrocessional federal excise tax contributions. The realization and recognition of the gain would be subject to the ultimate outcome of any future appeals in the case by the IRS, as well as the application of the current or future court decisions to the Company’s specific facts and circumstances. Legal Proceedings The Company and its subsidiaries are subject to lawsuits and regulatory actions in the normal course of business that do not arise from or directly relate to claims on reinsurance treaties or contracts or direct surplus lines insurance policies. This category of business litigation may involve allegations of underwriting or claims-handling errors or misconduct, employment claims, regulatory actions or disputes arising from the Company’s business ventures. The Company’s operating subsidiaries are subject to claims litigation involving, among other things, disputed interpretations of policy coverages. Generally, the Company’s direct surplus lines insurance operations are subject to greater frequency and diversity of claims and claims-related litigation than its reinsurance operations and, in some jurisdictions, may be subject to direct actions by allegedly injured persons or entities seeking damages from policyholders. These lawsuits, involving claims on policies issued by the Company’s subsidiaries which are typical to the insurance industry in general and in the normal course of business, are considered in its loss and loss expense reserves. In addition, the Company may from time to time engage in litigation or arbitration related to its claims for payment in respect of ceded reinsurance, including disputes that challenge the Company’s ability to enforce its underwriting intent. Such matters could result, directly or indirectly, in providers of protection not meeting their obligations to the Company or not doing so on a timely basis. The Company may also be subject to other disputes from time to time, relating to operational or other matters distinct from insurance or reinsurance claims. Any litigation or arbitration, or regulatory process, contains an element of uncertainty, and the value of an exposure or a gain contingency related to a dispute is difficult to estimate accordingly. Currently, the Company believes that no individual litigation or arbitration to which it is presently a party is likely to have a material adverse effect on its financial condition, business or operations.

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