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United States securities and exchange commission logo
November 9, 2022
Vivek Garipalli
Chief Executive Officer
Clover Health Investments, Corp.
3401 Mallory Lane, Suite 210
Franklin, Tennessee 37067
Re: Clover Health
Investments, Corp.
Form 10-K for the
Fiscal Year Ended December 31, 2021
Form 10-Q for the
Quarterly Period Ended September 30, 2022
Response dated
September 28, 2022
File No. 001-39252
Dear Vivek Garipalli:
We have reviewed your September 28, 2022 response to our comment
letter 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. Unless we note otherwise, our references to prior comments are
to comments in our
September 9, 2022 letter.
Form 10-Q for the Quarterly Period Ended September 30, 2022
Notes to Unaudited Condensed Consolidated Financial Statements
2. Summary of Significant Accounting Policies
Performance Guarantees, page 13
1. We note your response
to comment 2 explaining your basis that the contract with CMS is
accounted for as a
performance guarantee under ASC 460. Please further explain, citing
the specific
authoritative literature applied within ASC 460, your basis for each of the
following:
recognition of a
performance guarantee receivable and obligation;
whether the
obligation is measured at fair value in accordance with ASC 460-10-30-
2. If it is not,
then please explain why; and
Vivek Garipalli
Clover Health Investments, Corp.
November 9, 2022
Page 2
why straight-line basis for the amortization of the guarantee is
appropriate.
In addition, revise your disclosures to provide additional clarity on
the above items.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations
Premium Deficiency Reserve (Benefit) Expense, page 38
2. We note your discussion that a $27.7 million premium deficiency
reserve benefit was
recorded for the three months ended September 30, 2022, which includes
amortization
associated with a previously recorded reserve, compared to a $20.8
million premium
deficiency reserve expense recorded for the three months ended
September 30, 2021. In
future filings, please revise your discussion to provide more details,
including
quantification, of the various factors, drivers and activities causing
the premium
deficiency reserve benefit or expense, and related changes, during the
periods presented.
Critical Accounting Policies and Estimate, page 43
3. We note the disclosure of your critical accounting policies and
estimates relating to the
Direct Contracting Receivable and Performance Year Obligation,
included on page 75 of
the Form 10-K for the Fiscal Year Ended December 31, 2021, identifies
key inputs in
determining the performance year receivable and obligation as trends,
risk score, and the
number of beneficiaries aligned to the DCE. In future filings, please
revise to disclose
quantitative details, such as the inputs included in the baseline
estimate, how much each
estimate and/or assumption has changed over the relevant period, as
well as a sensitivity
analysis of the reported amount to the methods, assumptions and
estimates underlying its
calculation
You may contact Marc Thomas at (202) 551-3452 or Robert Klein at (202)
551-3847 if
you have questions regarding comments on the financial statements and related
matters.
FirstName LastNameVivek Garipalli Sincerely,
Comapany NameClover Health Investments, Corp.
Division of
Corporation Finance
November 9, 2022 Page 2 Office of
Finance
FirstName LastName