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United States securities and exchange commission logo
May 4, 2021
Gregory J. Gutting
Executive Vice President and Chief Financial Officer
Erie Indemnity Company
100 Erie Insurance Place
Erie, Pennsylvania 16530
Re: Erie Indemnity
Company
Form 10-K for the
Fiscal Year Ended December 31, 2020
Filed February 25,
2021
File No. 000-24000
Dear Mr. Gutting:
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 the Fiscal Year Ended December 31, 2020
Notes to Financial Statements
Note 3. Revenue Recognition, page 58
1. You disclose that you
maintain an estimated allowance to reduce the management fee to
its estimated net
realizable value to account for the potential of mid-term policy
cancellation based on
historical cancellation rates. You go on to indicate that your
historical cancellation
rates were adjusted in 2020 to include the potential for increased
cancellations given the
current economic conditions related to the COVID-19 pandemic.
Please provide us
proposed revised disclosure to be included in future periodic reports
that:
Removes discussion
of an estimated allowance and an estimated net realizable value
and instead
incorporates the ASC 606 concepts of transaction price being constrained
as stipulated in
ASC 606-10-32-11 and that revenue recognized reflects the
consideration to
which you expect to be entitled as stipulated in ASC 606-10-10-2;
Gregory J. Gutting
Erie Indemnity Company
May 4, 2021
Page 2
and
Provides the quantitative disclosure about changes in
transaction price associated
with changes in the assessment of variable consideration as
required by ASC 606-10-
50-10b or tell us why this disclosure is not warranted.
2. Please provide us proposed revised disclosure to be included in future
periodic reports for
contract liabilities in the form of your deferred revenue that:
Indicates the amount of revenue recognized in the reporting period
that was included
in deferred revenue at the beginning of the period as required by
ASC 606-10-50-8b;
and
Explains when you expect to recognize as revenue your deferred
revenue as required
by ASC 606-10-50-13b.
Otherwise, tell us why these disclosures are not warranted.
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 Mark Brunhofer at (202) 551-3638 or Sharon Blume at (202)
551-
3474 with any questions.
FirstName LastNameGregory J. Gutting Sincerely,
Comapany NameErie Indemnity Company
Division of
Corporation Finance
May 4, 2021 Page 2 Office of Finance
FirstName LastName