SecProbe.io

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Via Facsimile and U.S. Mail
Mail Stop 6010

      July 13, 2005

Mr. Thomas J. Kilian
President and Chief Executive Officer
Ceres Group, Inc.
17800 Royalton Road
Cleveland, Ohio   44136

      Re:	Ceres Group, Inc.
		Form 10-K for Fiscal Year Ended December 31, 2004
		Filed March 18, 2005
      File No. 000-08483

Dear Mr. Kilian:

      We have limited our review of your filing to only those
issues
we have addressed in our comments.  In our comments, we have asked
you to provide us with information so we may better understand
your
disclosure.  After reviewing this information, we may 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 7.  Management`s Discussion and Analysis of Financial
Condition
and Results of Operations, page 22

Critical Accounting Policies, page 22

Liabilities for Other Policy Claims and Benefits Payable, page 22

1. We note throughout the document that management discusses the
inherent uncertainty in establishing reserves for loss and loss
adjustment expenses.  Given this inherent uncertainty, we feel
that a
more robust discussion of this estimate is appropriate.  Please
provide to us the disclosures that you would propose to include in
future Forms 10-K that better explains the judgments and
uncertainties surrounding this estimate and the potential impact
on
your financial statements.  We believe that disclosures explaining
the likelihood that any materially different amounts would be
reported under different conditions or using different assumptions
is
consistent with the objective of Management`s Discussion and
Analysis.  The proposed disclosure should include the following
information for each of your lines of business:

* Please disclose the reserves accrued as of the latest balance
sheet
date presented.  The total of theses amounts should agree to the
amount presented on the balance sheet.
* 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.
* Please include a better discussion of the uncertainty involved
in
estimating the "Future policy benefits, losses and claims"
liability.

2. Based on the information disclosed in Note J on page 71, it
appears that management significantly revised its estimate of loss
reserves recorded in prior years.  Please revise Management`s
Discussion and Analysis to explain the reason for this change in
estimate.  For each line of business, include the following
disclosures:

* 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 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 the disclosure clearly explains why recognition occurred
in
the periods that it did and why recognition was not required in
earlier periods.
* Disclose any trends such as, the number of claims incurred,
average
settlement amounts, number of claims outstanding at period ends
along
with average per claim outstanding, and any other trends,
necessary
to understand the change in estimate. Please explain the rationale
for a change in estimate that does not correlate with trends.

Liquidity and Capital resources, page 34

3. Please explain to us the rationale for the apparent shift in
your
investing philosophy as evidenced by the existence of trading
securities in the current period and why you did not address this
apparent change in this liquidity discussion.  Also clarify for us
if
these trading securities represent transfers from available-for-
sale
or i f they represent new investments.

4. Based on the information provided in the table in Note J on
page
71, it appears that there has been a significant shift in the
payment
patterns of these liabilities.  Please provide to us the
disclosures
that you would propose to include in future Forms 10-K that would
provide the following information about the more likely than not
impact the payment of claims will have on known trends and
uncertainties, in particular cash outflows from operations.  In
the
disclosure please include a discussion of any asset/liability
management process and whether there are any significant
variations
between the maturity of the investments and the expected payment
of
the loss reserves.  Include a discussion of the impact of selling
securities before anticipated or the use of credit facilities to
pay
for policy liabilities will have on any future liquidity and
results
of operations.

Contractual Obligations, page 35

5. We note that the Company has not included its policy claims and
benefits payable or interest on long term debt in the contractual
obligation table, and it would appear that these liabilities
represent future legal obligations of the Company.  Due to the
significant nature of these liabilities to your business we
believe
the inclusion of reserves in the contractual obligation table will
provide investors increased disclosure of your liquidity.  The
purpose of Financial Reporting Release 67 is to obtain enhanced
disclosure concerning a registrant`s contractual payment
obligations
and the exclusion of ordinary course items would be inconsistent
with
the objective of the Item 303(a)(5) of Regulation S-K.  Based on
the
above factors, please provide to us a revised contractual
obligation
table that you would propose to include in future Forms 10-K that
includes the expected settlement of your loss reserves.

Financial Statements - December 31, 2004, page 43

D.  Discontinued Operations, page 64

6. Please explain to us what resulted in the additional $2.2
million
loss recorded in 2003 related to the sale of Pyramid.  Also
explain
to us why you decided to sell an apparently profitable line of
business, based on the income from operations disclosed in your
income statement, at such a significant loss.

G.  Value of Business acquired, page 66

7. Please clarify for us what the "Adjustments to expense reserve"
represent and how it is incorporated into your policy related to
VOBA.  Also provide to us a better explanation of what resulted in
the larger affect in the more recent periods related to this
charge.
Your policy note on page 54 makes it appear that you may establish
VOBA related to non-life policies.  Please clarify for us whether
this is the case and, if so, provide to us the specific references
to
the authoritative literature that supports this practice.

K.  Reinsurance Arrangements, page 71

8. Please explain to us in greater detail why the reinsurance
transactions you describe in this note result in deferred gains.
Include any references to the specific paragraphs within the
authoritative literature upon which you relied to determine that
this
treatment is appropriate.  If you feel that it will help clarify
the
treatment applied, consider providing as an example of what you
recorded related to these transactions the journal entries that
you
made at the time you entered into these agreements.

U.  Operating Segments, page 82

9. Please explain to us how you allocate "Net investment income"
to
the various segments given that you make the assertion that you do
not allocate investments by segment.  Also explain to us why you
do
not include the product revenue information required by paragraph
37
of SFAS 131.

*    *    *    *

	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 response letter that keys your responses to our
comments and provides any requested information.  Detailed letters
greatly facilitate our review.

	We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings to be certain that the
filings include all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed investment decision.  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 the 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; and

* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

      In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.

      You may contact Ibolya Ignat, Staff Accountant, at (202)
551-
3656, or Jim Atkinson, Accounting Branch Chief, at (202) 551-3674,
if
you have questions regarding the comments. In this regard, do not
hesitate to contact me, at (202) 551-3679.

							Sincerely,

							Jim B. Rosenberg
							Senior Assistant Chief
Accountant

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Thomas J. Kilian
Ceres Group, Inc.
July 13, 2005
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