SecProbe.io

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Mail Stop 7010

September 27, 2004

via U.S. mail and facsimile

Jeffrey L. Jacobson, Chief Financial Officer
301 East Colorado Boulevard, Suite 300
Pasadena, California 91101-1901

	RE:	Wesco Financial Corporation
		Form 10- K for the Fiscal Year Ended December 31, 2004
		Filed March 16, 2005
		File No. 1-4720

Dear Mr. Jacobson:

      We have reviewed your filings and have the following
comments.
We have limited our review to only your financial statements and
related disclosures and do not intend to expand our review to
other
portions of your documents.  Where indicated, we think you should
revise your disclosures in future filings in response to these
comments.  If you disagree, we will consider your explanation as
to
why our comment is inapplicable or a revision is unnecessary.
Please
be as detailed as necessary in your explanation.  In some of our
comments, we may ask you to provide us with supplemental
information
so we may better understand your disclosure.  After reviewing this
information, we may or may not raise additional comments.

      Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or on any other
aspect
of our review.  Feel free to call us at the telephone numbers
listed
at the end of this letter.

Form 10-K for the Fiscal Year Ended December 31, 2004

Item 2 - Properties, page 16
1. You disclose related party leasing arrangements, such as those
with Blue Chip and NICO.  In future filings, if material, please
disclose the amount of rental income for each of the periods for
which income statements are presented.  Refer to paragraph 2 of
SFAS
57 for guidance.

Management`s Discussion and Analysis, page 19

Results of Operations, page 20
2. We note that your discussion related to consolidated net income
and insurance segment net income uses an "underwriting income"
measure of financial performance.  We believe this measure to be a
non-GAAP financial measure. In future filings, please revise this
disclosure to comply with Item 10 of Regulation S-K. If you
disagree,
explain to us how use of this measure is acceptable under Item 10.

3. In future filings, please include in management`s discussion
and
analysis a more robust discussion of the more likely than not
impact
the payment of claims will have on known trends and uncertainties,
in
particular cash outflows from operations.  Discuss whether there
are
any significant variations between the maturity of your
investments
and the expected payment of your loss reserves and the impact of
selling securities before anticipated or the use of credit
facilities
to pay for policy liabilities will have on your future liquidity
and
results of operations.  Link this discussion to the table of
contractual obligations.

4. Please disclose in further detail the judgments and
uncertainties
surrounding the estimates related to the reserve for loss and loss
adjustment expenses and the potential impact on your financial
statements. In this regard, in future filings, please revise your
management`s discussion and analysis to include the following
information for each of your lines of business:

a) Please disclose the reserves accrued as of the latest balance
sheet date presented that includes a breakout between case
reserves
and IBNR reserves.  The total of these amounts should agree to the
amount presented on the balance sheet.

b) Please disclose the range of loss reserve estimates as
determined
by your actuaries.  Discuss the key assumptions used to arrive at
management`s best estimate of loss reserves within that range and
what specific factors led management to believe this amount rather
than any other amount within the range represented the best
estimate
of incurred losses.

c) For each line of your longer tail business, please provide more
precise insight into the existence and effects on future
operations
and financial condition of known trends, events and uncertainties.
Disclosure you should consider, but not be limited to, includes
the
following information:

* the number of claims pending at each balance sheet date;
* the number of claims reported for each period presented;
* the number of claims dismissed, settled, or otherwise resolved
for
each period;
* the nature of the claims including relevant characteristics of
the
claimant population (e.g., involves a large number of relatively
small individual claims of a similar type);
* the total settlement amount for each period;
* the cost of administering the claims;
* emerging trends that may result in future reserve adjustments;
and
* if management is unable to estimate the possible loss or range
of
loss, a statement to that effect.

Insurance Segment, page 21
5. It appears that your insurance segment accounted for 86% of
your
consolidated net income.  In future filings, please provide
information about the quality of, and potential variability of,
your
earnings and cash flow, so that investors can ascertain the
likelihood that past performance is indicative of future
performance.
In this respect, please identify and address those key variables
and
other qualitative and quantitative factors which are peculiar to
and
necessary for an understanding and evaluation of your company.
Refer
to SEC Release 33-8350 Interpretation: Commission Guidance
Regarding
Management`s Discussion and Analysis of Financial Condition and
Results of Operations for guidance.

Contractual Obligations, page 27
6. In future filings, please include your loss reserve to be paid
in
the contractual obligation table, as it appears that these
liabilities represent future legal obligations.  Due to the
significance of these liabilities, we believe the inclusion of
reserves in the contractual obligation table will provide
investors
increased disclosure of your liquidity.

Critical Accounting Policies, page 27
7. We note that you set your claim reserves for your property
catastrophe reinsurance operations based upon information you
receive
from the cedant.  If this poses a potential for a higher degree of
uncertainty related to your estimate of assumed loss reserves as
compared to direct loss reserves, please include disclosures
relating
to your critical accounting policy of this uncertainty, including
the
risks associated with making estimates, and the effects and
expected
effects of the uncertainty on financial position and results of
operations.  Also in this disclosure, please disclose the
following:

* The dollar amount of reserves recorded based on information
received from the cedants and the nature and extent of the
information received from the cedants related to policies, claims,
unearned premiums and loss reserves;
* The time lag from when claims are reported to the cedant to when
the cedant reports them to you and whether, how and to what extent
this time lag effects your loss reserve estimate;
* The amount of any backlog related to the processing of assumed
reinsurance information, whether the backlog has been reserved for
in
the financial statements and, if applicable, when the backlog will
be
resolved;
* What process management performs to determine the accuracy and
completeness of the information received from the cedants;
* How management resolves disputes with cedants and how often
disputes occur;
* How management uses the information received from the cedants in
its determination of its assumed loss reserves, and whether
reinsurance intermediaries are used to transact and service
reinsurance policies and how that impacts your loss reserving
methodology, and
* Whether management uses historical loss information to validate
its
existing reserves and/or as a means of noticing unusual trends in
the
information received from the cedants.

Goodwill, page 28
8. We have read your current disclosure relating to your critical
accounting policy for goodwill and have the following comments:

* In future filings, please address material implications of
uncertainties associated with your assumptions and estimates
underlying your evaluation of goodwill impairment. Such disclosure
should supplement, not duplicate, the description of accounting
policies that are already disclosed in the notes to the financial
statements. Since critical accounting estimates and assumptions
are
based on matters that are highly uncertain, you should analyze
their
specific sensitivity to change, based on other outcomes that are
reasonably likely to occur and would have a material effect.
Refer
to SEC Release 33-8350 Interpretation: Commission Guidance
Regarding
Management`s Discussion and Analysis of Financial Condition and
Results of Operations for guidance.

* We note that segment net income for the furniture rental segment
from 2000 to 2004 was $33,371, $13,076, $2,442, $(6,257), and
$5,022.
We acknowledge the improvement in earnings from 2003 to 2004;
however, it does not appear that the segment is performing or
benefiting from the earnings experienced in 2000 or 2001.
Although
the assessment for impairment of goodwill is not isolated to one
factor but several assumptions, please tell us what factors
supported
your conclusion that goodwill was not impaired as of December 31,
2004.

* To the extent that goodwill impairment tests have identified
circumstances in which goodwill impairment is likely in a future
period, such as declining headroom between the fair value and the
carrying value of your reporting units, please disclose such
circumstances in your operating and financial review and
prospects.
Item 9A - Controls and Procedures, page 31
9. In future filings, please disclose, if true, that your
disclosure
controls and procedures were effective to ensure that information
required to be disclosed by you in the reports that you file or
submit under the Exchange Act is recorded, processed, summarized
and
reported, within the time periods specified in the Commission`s
rules
and forms and to ensure that information required to be disclosed
by
you in the reports that you file or submit under the Exchange Act
is
accumulated and communicated to your management, including your
principal executive and principal financial officers, or persons
performing similar functions, as appropriate to allow timely
decisions regarding required disclosure.  Otherwise, please simply
conclude that your disclosure controls and procedures are
effective
or ineffective, whichever the case may be.

Consolidated Balance Sheet, page 36
10. We note that you net the provision for losses and loss
adjustment
expenses against amounts that will be recoverable under
reinsurance
contracts, as discussed on page 27.  Please clarify for us whether
you present your provision for losses net of amounts recoverable
under reinsurance contracts on your balance sheet, and if so, your
basis in GAAP for doing so.
11. In future filings please identify on the face of the balance
sheet, income statement, or statement of cash flows related party
transactions and the amounts.  See Article 4-08(k) of Regulation
S-X
for guidance.

Consolidated Statement of Income, page 37
12. In future filings, please separate insurance losses and loss
adjustment expenses from underwriting expenses on the income
statement. Alternatively, provide this information in a footnote.

Consolidated Statement of Cash Flows, page 39
13. We note, from your disclosures on page 23, that the majority
of
your revenue associated with rental furniture is derived from
rental
income, rather than the sale of rental furniture.  Consequently,
it
appears that the nature of your rental furniture is more similar
to
that of productive assets, rather than that of inventory.  In
light
of the above, please tell us why you classify proceeds from sales
of
rental furniture as an operating activity, rather than an
investing
activity.  As part of your response, please tell us your
consideration of paragraph 87 of SFAS No. 95.

Industrial Business, page 42
14. Please tell us and, in future filings, please disclose your
revenue recognition policy for the industrial segment.

Note 3 - Insurance Business, page 43
15. Please expand the disclosure in this footnote to include the
information relating to the Company`s significant reinsurance
agreements as required by SFAS 113. Include related party
disclosure,
describing the automatic acceptance of super-catastrophe
reinsurance
retrocession from Berkshire Insurance Group and your  reliance on
NICO to operate its insurance business. We note your disclosure
that
your insurance business has no employees. Also, we do not
understand
the implications of the "conflict of interest" risk described on
page
11. Please explain to us the nature and potential magnitude of
this
risk and related actions taken by management to protect the
company.

16. Based on your disclosures in note three, it appears that you
have
significantly revised your estimate of loss reserves recorded in
prior years.  In future filings, please provide further insight
into
the key factors that drive the reserve calculations for each line
of
business.  Please explain the reason for your change in estimate.
For each line of business, please include the following
disclosures
so that an investor can identify what kind of impact these key
factors would have the reserves should they materially differ from
what management estimated.

* Identify the years to which the change in estimate relates and
disclose the amount of the related loss reserve as of the
beginning
of the year that was re-estimated.  Discuss and quantify
offsetting
changes in estimates that increase and decrease the loss reserve.
* Identify the changes in the key assumptions you made to estimate
the reserve since the last reporting date.
* Identify the nature and timing of the change in estimate,
explicitly identifying and describing in reasonable specificity
the
new events that occurred or additional information acquired since
the
last reporting date that led to the change in estimate.
* Ensure your disclosure clearly explains why recognition occurred
in
the periods that it did and why recognition was not required in
earlier periods.
* Explain the rationale for a change in estimate that does not
correlate with claim trends.

Note 5 - Industrial Business, page 44
17. We note the claims relating to alleged contamination of soil
and
groundwater against Precision Brand Products.  In future filings,
please disclose the estimated additional loss, or range of loss,
that
is reasonably possible, or disclose that such an estimate cannot
be
made.

*    *    *    *

      As appropriate, please respond to these comments within 10
business days or tell us when you will provide us with a response.
Please furnish a letter that keys your responses to our comments
and
provides any requested supplemental information.  Detailed
response
letters greatly facilitate our review.  Please file your response
letter on EDGAR.  Please understand that we may have additional
comments after reviewing your amendment and responses to our
comments.

      We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require.
Since the company and its management are in possession of all
facts
relating to a company`s disclosure, they are responsible for the
accuracy and adequacy of the disclosures they have made.

  In connection with responding to our comments, please provide,
in
writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in their filings;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing