SecProbe.io

August 13, 2010

Mr. Daniel Brazier
Chief Financial Officer  Kingsway Financial Services, Inc.  7120 Hurontario Street, Suite 800 Mississauga, Ontario, Canada L5W 0A9 Canada

 Re: Kingsway Financial Services, Inc.    Form 40-F for the Year Ended December 31, 2009
Filed on April 2, 2010
 File No. 001-15204

Dear Mr. Brazier:

We have reviewed your filing and have the following comments.  In our comments, we
ask you to provide us with information so  we may better underst and your disclosure.
 Please respond to this letter within te n business days by providing the requested
information or by advising us when you will provide the requested response.  Where a comment requests you to revise disclosu re, the information you provide s hould show us what the revised
disclosure will look like and identify the filing in which you intend to first include it.  If you do
not believe a comment applies to your facts a nd circumstances, please tell us why in your
response.  Please furnish us a letter on EDGAR under the form type label CORRESP that keys
your responses to our comments.
 After reviewing the information provided, we may raise additional comments and/or
request that you amend your filing.

Narrative Description of the Business, page 10

1. On this page you state that your gross prem iums written in 2009 totaled $291.0 million.
This is inconsistent with other statements in your document that gross premiums written in 2009 were $376.8 million. Please explain this inconsistency .

Mr. Daniel Brazier
Kingsway Financial Services, Inc.           August 13, 2010 Page 2
 Consolidated Financial Statements

Notes to Consolidated Financial Statements
Note 4. Discontinued Operations a nd related contingencies, page 44

2. Please tell us why you believe that presenti ng the operations of Li ncoln/Walshire in
discontinued operations is appropriate under U.S. GAAP given that you appear to have
continuing involvement after the disposal of Lincoln as discussed on page 46.  Include in
your response how the terms of the Run-o ff Management Agreement including  Rockwall
Financial’s ceasing to perform under this ag reement in March 2010 as disclosed in the
press release filed as an exhibit to you r May 14, 2010 Form 6-K factored into your
conclusion to present Lincoln/Walshire as discontinued operations. Please reference the
U.S. GAAP authoritative guidance on which you relied.
 Note 17. Indebtedness

(d) Loans Payable, page 72

3. You disclose that the promissory note payable issued by your subsidiary, Kingsway
America Inc., to Kingsway ROC LLC is an oblig ation of the consolidated entity because
you are not the primary beneficiary of ROC LL C, and presumably do not consolidate it.
It is unclear why you disclose th e activity of the KLROC Trust in this note.  Please revise
your disclosure to clarify the relationship  between KLROC Trust, Kingsway America and
ROC LLC.  In this regard, please identify the affiliate from whom KLROC Trust
purchased the 7.12% senior note due June 30, 2015 and whether a nd how this is related to
the 7.37% note payable due June 30, 2015 i ssued by Kingsway America to ROC LLC.
 Note 18. Variable Intere st Entities, page 73

4. You state that you have variab le interest entitie s that you do not consolidate because you
are not the primary benefici ary. In addressing the off-balance sheet arrangements
disclosure requirement from Instruction B(11) of Form 40-F, please disclose the
following items, to the extent they are appl icable and material, for your non-consolidated
variable interest en tities for which you have material exposure:
• Categories and rating of assets the off-balance sheet entity holds;
• Weighted-average life of assets th e off-balance sheet entity holds;
• Forms of funding and weighted-average lif e of the funding the off-balance sheet
entity holds;
• Any material difficulties the off-balance sh eet entity has experienced in issuing its
commercial paper or other fi nancing during the period;
• Any material write-downs or downgrades of assets the off-balance sheet entity holds;
• Maximum limit of the losses to be borne by any first loss note holders;
• Detailed disclosure regarding your oblig ations under the liq uidity facilities.
• The scenarios where you would have to cons olidate the off-balance sheet entity, and
your expectation of the likelihood of such consolidation; and

Mr. Daniel Brazier
Kingsway Financial Services, Inc.           August 13, 2010 Page 3
 • The frequency of which you reconsider, and the typical triggers which require you to
reconsider, whether you are the primary beneficiary of the entity.
• Include a discussion of any known trends or uncertainties that you may reasonably
expect to have a material favorable or  unfavorable impact on your income from
operations, liquidity and capital resources. In this regard, please consider, to the
extent material in light of your particul ar facts and circumstances, disclosing the
amount of any material loss you expect to re alize as a result of your involvement with
any material off-balance sheet entity.
  We urge all persons who are responsible for th e accuracy and adequacy of the disclosure
in the filing to be certain that the filing include s all information the Securities Exchange Act of
1934 and all applicable Exchange Act rules requir e.  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 responding to our comments, please provi de a written statement from the company
acknowledging that:
• the company is responsible for the adequacy an d accuracy of the disclo sure in the filing;
• 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 federa l securities laws of  the United States.

You may contact Ibolya Igna t, Staff Accountant at (202)  551-3656 or Mark Brunhofer,
Accounting Reviewer, at (202) 551- 3638 if you have questions regarding the processing of your
response as well as any questions regarding co mments on the financial statements and related
matters.  You may contact Scot Foley, Staff Attorney, at (202) 551-3383 or Suzanne Hayes,
Branch Chief at (202) 551-3675 with  questions on any of the other comments.  In this regard, do
not hesitate to contact me, at (202) 551-3679.

Sincerely,

Jim B. Rosenberg
Senior Assistant Chief Accountant