SecProbe.io

United States securities and exchange commission logo
September 11, 2023
Scott McKinney
Chief Financial Officer
Tiptree Inc.
660 Steamboat Road
Greenwich, Connecticut 06830
Re:Tiptree Inc.
Form 10-K for Fiscal Year Ended December 31, 2022
Filed March 8, 2023
File No. 001-33549
Dear Scott McKinney:
            We have limited our review of your filing to the financial statements and related
disclosures 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 these comments within ten business days by providing the requested
information or advise us as soon as possible when you will respond.  If you do not believe our
comments apply to your facts and circumstances, please tell us why in your response.
            After reviewing your response to these comments, we may have additional comments.
Form 10-K for Fiscal Year Ended December 31, 2022
Market Opportunity, page 15
1.We note your disclosure here, as well as similar disclosure on page 55, that service
contract gross written premium equivalents in U.S. Warranty Solutions were $852 million
and $652 million for 2022 and 2021.  We also note you disclose on page F-46 that you
recognized revenue from service contracts of $210 million and $163 million for 2022 and
2021.  We further note that you disclose on page F-47 that deferred revenue related to
service contracts was $581 million and $470 million at December 31, 2022, and
2021. Please tell us in detail and revise future filings to reconcile the amount of service
contract gross written premiums to the amount of revenue recognized and explain the
difference.
2.To the extent that certain service contract revenue is recognized as Earned Premiums, net,
please tell us in detail and revise your revenue recognition policies on page F-16 in future
filings, to more clearly describe the service contract activities that are insurance contracts

 FirstName LastNameScott McKinney
 Comapany NameTiptree Inc.
 September 11, 2023 Page 2
 FirstName LastNameScott McKinney
Tiptree Inc.
September 11, 2023
Page 2
and accounted for under ASC 944 and those that are contracts with customers and
accounted for under ASC 606.  Also, discuss how you determine which contracts are
accounted for under ASC 944.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of
Operations, page 47
3.We note disclosure on page F-29 that premiums assumed from other companies were
$310 million and represented 34% of total premiums earned for 2022.  Given the
materiality of assumed premiums, please tell us and revise future filings to discuss the
relevant facts and circumstances related to this revenue source to inform investors about
the quality of, and potential variability of your revenue, earnings and cash flow, so that
investors can ascertain the likelihood that past performance is indicative of future
performance.  Additionally, please ensure you disclose all information required by ASC
275-10-50-18 and ASC 280-10-50-42, if applicable.
Adjusted Net Income - Non-GAAP, page 63
4.Please tell us, provide us a quantified reconciliation, and revise future filings to explain,
why the amount of “net realized and unrealized gains (losses)” included in the
reconciliation of adjusted net income does not agree to the amount presented in the
Consolidated Statements of Operations and detailed in Note 6 on page F-28.  Please
ensure you clearly explain the nature of amounts being excluded from adjusted net
income.  Please also tell us how you considered whether excluding certain realized and
unrealized gains (losses) have the effect of changing the recognition and measurement
principles required to be applied in accordance with GAAP and would therefore result in
the non-GAAP measure being misleading and violate Rule 100(b) of Regulation G.  Refer
to Question 100.04 of the Compliance and Disclosure Interpretations on Non-GAAP
Financial Measures for guidance.
5.Please tell us and revise future filings to more clearly disclose the reasons why
management believes the presentation of adjusted net income provides useful information
to investors regarding your financial condition and results of operations.  Specifically
explain why you exclude net realized and unrealized gains (losses) in your measurement.
6.We note your disclosure in note 2 on page 64 that, “Tax on adjustments represents the tax
applied to the total non-GAAP adjustments and includes adjustments for non-recurring or
discrete tax impacts. For the year ended December 31, 2022, included in the adjustment is
an add-back of $33.1 million, respectively, related to deferred tax expense from the WP
Transaction.”  Given the materiality of this adjustment, please revise future filings to
present this adjustment in a separate line.
Adjusted EBITDA - Non-GAAP, page 64
7.Please tell us and revise future filings to disclose the reasons why management believes
the presentation of adjusted EBITDA provides useful information to investors regarding

 FirstName LastNameScott McKinney
 Comapany NameTiptree Inc.
 September 11, 2023 Page 3
 FirstName LastNameScott McKinney
Tiptree Inc.
September 11, 2023
Page 3
your financial condition and results of operations.  Specifically explain why you add
unrealized gains (losses) on available for sale securities reported in other comprehensive
income and why you add the pre-tax gain recorded directly to Tiptree Inc. stockholders’
equity related to the Warburg transaction.  Please tell us how you considered whether
these two adjustments have the effect of changing the recognition and measurement
principles required to be applied in accordance with GAAP and would therefore result in
the non-GAAP measure being misleading and violate Rule 100(b) of Regulation G.  Refer
to Question 100.04 of the Compliance and Disclosure Interpretations on Non-GAAP
Financial Measures for guidance.
Revenue Recognition - Earned Premiums, net, page F-16
8.Please quantify for us the amount of revenue recognized for each year presented, using the
Rule of 78’s.  Additionally, please provide us an accounting analysis that explains how the
Rule of 78’s is consistent with the pattern of losses.  Refer to ASC 944-605-21-1 for
guidance.
Note (8) Reinsurance Receivables, page F-29
9.We note you recognized $1,176 million as reinsurance receivables as of December 31,
2022, and that, of this amount, $725 million represented prepaid reinsurance premiums.
Please tell us how you determined that prepaid reinsurance premiums should be combined
with reinsurance recoverables and presented together as receivables.  Alternatively, please
revise to separately present prepaid reinsurance premiums.  Refer to ASC 944-340-25-1
and ASC 944-310-25-2 for guidance.
Debt Covenants, page F-36
10.We note your disclosure that the Company was in compliance with the representations and
covenants for its outstanding debt or obtained waivers for any events of non-compliance.
We also note your risk factor disclosure related to the risk of an event of default on page
31.  Please revise your disclosure to identify any debt agreement and covenant for which
you obtained a waiver.  Additionally, discuss the facts and circumstances necessitating the
waiver and disclose any material terms and conditions to the waiver.  Refer to Section
IV.C of SEC Release 33-8350 for guidance.
Note (14) Revenue from Contracts with Customers, page F-46
11.Please quantify for us the amount of revenue recognized for each year presented, for each
non-straight line revenue recognition method (e.g., Rule of 78’s, etc.) used for contracts
with customers.  For each method with a material amount of revenue, please provide us an
accounting analysis that explains how each method is consistent with the guidance in ASC
606-10-25-23 that states that revenue should be recognized as you satisfy a performance
obligation.  Specifically, tell us in detail and revise future filings to disclose how each
method faithfully depicts the transfer of your services.  Refer to ASC 606-10-50-18 for

 FirstName LastNameScott McKinney
 Comapany NameTiptree Inc.
 September 11, 2023 Page 4
 FirstName LastName
Scott McKinney
Tiptree Inc.
September 11, 2023
Page 4
guidance.
            In closing, we remind you that the company and its management are responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or
absence of action by the staff.
            You may contact Michael Volley at 202-551-3437 or Amit Pande at 202-551-3423 with
any questions.
Sincerely,
Division of Corporation Finance
Office of Finance