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Item 1A. Risk Factors

2024-03-05 compared with 2023-03-08 · 168 added, 274 removed, 574 unchanged (44% of the section changed)

The following risk factors could result in a significant or material adverse effect on our results of operations or financial condition.

Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations.

Risk Factors Summary

The following is a summary of the principal risks that could adversely affect our business, operations, and financial results.

Risks Relating to Our Business

Our results of operations fluctuate from period to period and may not be indicative of our long-term prospects.

• A downgrade or withdrawal of our A.M.

Best ratings would materially and adversely affect our ability to implement our business strategy.

• If our losses and loss adjustment expenses greatly exceed our loss reserves, our financial condition may be materially and adversely affected.

• Our property and casualty reinsurance operations make us vulnerable to losses from catastrophes and may cause our results of operations to vary significantly from period to period.

• The inability to obtain business provided from brokers could materially and adversely affect our business, financial condition and results of operations.

Risks Relating to Insurance and Other Regulations

• Any suspension or revocation of any of our licenses would materially and adversely affect our business, financial condition and results of operations

• Our reinsurance subsidiaries are subject to minimum capital and surplus requirements, and our failure to meet these requirements could subject us to regulatory action.

• We are subject to the risk of possibly becoming an investment company under U.S.

federal securities law.

• A failure by Syndicate 3456 to comply with rules and regulations could materially and adversely interfere with our business strategy.

Risks Relating to Our SILP Investment Strategy

• Our investment performance depends in part on the performance of SILP and may suffer as a result of adverse financial market developments or other factors that impact SILP’s liquidity, which could materially and adversely affect our investment results, financial condition and results of operations.

• SILP may be concentrated in a few large positions, which could result in material adverse valuation movements.

• Under the SILP LPA, we are contractually obligated to invest substantially all our assets in SILP with certain exceptions.

SILP’s performance depends on the ability of DME Advisors to select and manage appropriate investments.

Risks Relating to Our Innovations Strategy

• The carry values of our Innovations investments may differ significantly from those that would be used if we carried these investments at fair value.

• Our Innovations investments support our underwriting operations and the failure to identify and consummate investment opportunities may materially and adversely affect our ability to implement our business strategy.

• Investments in privately held early-stage companies involve significant risks.

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Risks Relating to Our Class A Ordinary Shares

• Our level of debt may have an adverse impact on our liquidity, restrict our current and future operations, particularly our ability to respond to business opportunities, and increase our vulnerability to adverse economic and industry conditions.

• We may not be able to repay or refinance our convertible notes, pay interest on the convertible notes, or settle conversions of the convertible notes in cash or to repurchase the convertible notes upon a fundamental change, and our future debt, if any, may contain limitations on our ability to pay cash upon conversion or repurchase of the convertible notes.

• Provisions of our Articles, the Companies Act of the Cayman Islands (the “Companies Act”) and our corporate structure may each impede a takeover, which could adversely affect the value of our Class A ordinary shares.

Risks Relating to Taxation

• Greenlight Capital Re, Greenlight Re and/or GRIL may be subject to United States federal income taxation.

• United States persons who own Class A ordinary shares may be subject to United States federal income taxation on our undistributed earnings and may recognize ordinary income upon disposition of Class A ordinary shares.

• The Tax Cuts and Jobs Act of 2017 (the “TCJA”) may cause us to undertake changes to the manner in which we conduct our business and could subject United States persons who own Class A ordinary shares to United States income taxation on our undistributed earnings.

• The impact of the initiative of the Organization for Economic Co-operation and Development (“OECD”) and the European Union (“EU”) to eliminate harmful tax practices is uncertain and could adversely affect our tax status in the Cayman Islands, where we are exempt from income taxes.

Additional details relating to the above and other risk factors are described below:

Risks Relating to Our Business

Our results of operations fluctuate from period to period and may not be indicative of our long-term prospects.

Our results of operations fluctuate from period to period due to a variety of factors, including:

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In addition, our SILP investment strategy and Innovations investments are likely to be more volatile than traditional fixed-income portfolios composed primarily of investment-grade bonds.

See “ — Risks Relating to Our SILP Investment Strategy” and “ — Risks Relating to Our Innovations Investments.” Accordingly, our short-term results of operations may not be indicative of our long-term prospects.

See “ — Risks Relating to Our SILP Investment Strategy ” and “ — Risks Relating to Our Innovations S trategy .” Accordingly, our short-term results of operations may not be indicative of our long-term prospects.

A downgrade or withdrawal of our A.M.

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Additionally, if A.M.

Best downgrades or withdraws our ratings, we cannot provide assurance that our regulators, the Cayman Islands Monetary Authority and the Central Bank of Ireland, would continue to authorize our current business strategy and investment strategy.

Best downgrades or withdraws our ratings, we cannot provide assurance that our regulators, CIMA and the Central Bank of Ireland, would continue to authorize our current business strategy and investment strategy.

See “ — Risks Relating to Insurance and Other Regulations – Any suspension or revocation of our reinsurance licenses would materially and adversely impact our ability to do business and implement our business strategy .”

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Greenlight Re’s A.M.

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● if our investments incur significant losses.

Best downgrades or withdraws either of our ratings, we could be severely limited or prevented from writing new or renewal reinsurance contracts, which would materially and adversely affect our ability to implement our business strategy.

In addition, substantially all of our assumed reinsurance contracts contain provisions that permit our clients to cancel the contract or require additional collateral in the event of a downgrade in our A.M.

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Substantially all of our assumed reinsurance contracts contain provisions that permit our clients to cancel the contract or require additional collateral in the event of a downgrade in our A.M.

Best ratings below specified levels or a reduction of our capital or surplus below specified levels over the course of the agreement.

Contracts containing such cancellation rights represented approximately 26% of gross premiums written during 2023.

Additional collateral in the event of a downgrade in our A.M.

Best ratings would be approximately $133.2 million at December 31, 2023.

We expect that similar provisions will also be included in future contracts.

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The exercise of such rights in the aggregate could significantly affect our financial condition, results of operations, and our underwriting capacity.

If our losses and loss adjustment expenses greatly exceed our loss reserves, our financial condition may be materially and adversely affected.

If our losses and LAE greatly exceed our loss reserves, our financial condition may be materially and adversely affected.

Our results of operations and financial condition depend upon our ability to accurately assess the potential losses and loss adjustment expenses associated with the risks we reinsure.

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We may need additional capital in the future in order to operate our business, and such capital may not be available to us or may not be available to us on favorable terms.

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We may need to raise additional capital in the future through public or private equity or debt offerings or otherwise in order to:

● repay our convertible notes;

● repay our debt;

● fund liquidity needs or replace lost capital resulting from underwriting or investment losses;

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Increases in interest rates could result in higher interest expense on our outstanding debt.

Further, any additional capital raised through the sale of equity could dilute existing ownership interest in our company and may cause the market price of our Class A ordinary shares to decline.

Additional capital raised through the issuance of debt may result in creditors having rights, preferences, and privileges senior or otherwise superior to those of our Class A ordinary shares.

Further, any additional capital raised through the sale of equity could dilute existing ownership interest in our company and may cause the market price of our ordinary shares to decline.

Additional capital raised through the issuance of debt may result in creditors having rights, preferences, and privileges senior or otherwise superior to those of our ordinary shares.

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Competitors with greater resources may make it difficult for us to effectively market our products or offer our products at a profit.

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Our failure to compete effectively could materially and adversely affect our financial condition and results of operations, and may increase the likelihood that we will be deemed a passive foreign investment company or an investment company.

See “ — Risks Relating to Taxation — United States persons who own Class A ordinary shares may be subject to United States federal income taxation on our undistributed earnings and may recognize ordinary income upon disposition of Class A ordinary shares.

See “ — Risks Relating to Taxation — United States persons who own ordinary shares may be subject to United States federal income taxation on our undistributed earnings and may recognize ordinary income upon disposition of ordinary shares.

” and “ — Risks Relating to Insurance and Other Regulations — We are subject to the risk of possibly becoming an investment company under U.S.

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Any of the foregoing could materially and adversely affect our business, financial condition and results of operations.

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Inflation may adversely impact our results of operations or financial condition.

Steps taken by governments throughout the world in response to the COVID-19 pandemic, expansionary monetary policies, the military conflict between Russia and Ukraine and other factors have led to an inflationary environment.

Our operations are susceptible to inflation, and underestimating inflation levels could result in underpricing the risks we reinsure.

Challenging economic or political conditions may adversely impact our results of operations or financial condition.

Our results of operations and financial condition may be materially adversely affected by a challenging economic market, such as a highly inflationary environment.

Our operations are susceptible to inflation, and underestimating inflation levels could result in underpricing the risks we reinsure because premiums are established before the ultimate amounts of losses and LAE are known.

While we consider the potential effects of inflation when setting premium rates, our premiums may not fully offset the ultimate effects of inflation.

Additionally, our reserving models include assumptions about future payments for the settlement of claims and claims-handling expenses, such as the value of replacing property, associated labor costs for the property business we write, and litigation costs.

Inflation may cause costs to increase above loss reserves established for claims.

In that case, we will be required to increase our loss reserves with a corresponding reduction in net income in the period the deficiency is identified, which may have a material adverse effect on our results of operations and financial condition.

Unanticipated higher inflation could also lead to higher interest rates, potentially negatively impacting the value of any rate-sensitive financial instruments held by SILP and could also impact our Innovations investments.

The global inflationary environment in the last couple years has resulted in an increase in our projected future claim costs, resulting in adverse loss reserve development.

While the global inflationary pressures have abated from their recent highs, any subsequent increase in inflation may lead to an increase in our loss reserves with a corresponding reduction in net income in the period the deficiency is identified, which may have a material adverse effect on our results of operations and financial condition.

See “ —Risks Related to Our SILP Investment Strategy” and “—Risks Related to Our Innovations Investments.”

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Further, our results of operations and financial condition may also be materially adversely affected by a challenging political climate, including events such as military actions, invasions, wars, civil unrest and terrorist activities and the imposition of sanctions and importation limitations.

For example, the ongoing conflict between Russia and Ukraine and the resulting responses have led to disruption, instability and volatility in global markets and industries.

Although the severity and duration of the ongoing Ukraine conflict is impossible to predict, the continuing active conflict could lead to further economic uncertainty, represented by significant and prolonged volatility in commodity prices, credit and capital markets, as well as supply chain interruptions.

Due to the widespread impact of the ongoing conflict, it is likely to indirectly impact the markets in which we operate.

The effect of emerging claim and coverage issues on our business is uncertain.

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● assignment-of-benefits agreements, where rights of insurance claims and benefits of the insurance policy are transferred to third parties, which can result in inflated repair costs and legal expenses to insurers and reinsurers;

● claims related to political unrest, geopolitical instability, or other politically driven events, such as the military conflict between Russia and Ukraine, including loss claims relating to expropriation, forced abandonment, license cancellation, trade embargo, contract frustration, non-payment, war on land or political violence (including terrorism, revolution insurrection, and civil unrest);

● claims related to political unrest, geopolitical instability, or other politically driven events, such as the conflict in the Middle East, and the military conflict between Russia and Ukraine, including loss claims relating to expropriation, forced abandonment, license cancellation, trade embargo, contract frustration, non-payment, war on land or political violence (including terrorism, revolution, insurrection, and civil unrest);

● claims related to data security breaches, information system failures, or cyber-attacks;

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Operational risks, including human or systems failures, are inherent in our business.

Operational risks and losses can result from, among other things, fraud, errors, failure to document transactions or to obtain proper internal authorization, failure to comply with regulatory requirements, information technology failures, or external events.

We believe that our modeling, underwriting, information technology, and application systems are critical to our business.

Modeling risks are inherent in our business.

We believe that our modeling is critical to our business.

We utilize modeling tools to facilitate the pricing, reserving, and risk management of our reinsurance portfolio.

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The cybersecurity regulatory environment is evolving, and we expect the costs of complying with new or developing regulatory requirements to increase.

In addition, as our operations expand to other jurisdictions, we will be required to comply with cybersecurity laws in those jurisdictions, which will further increase our cost of compliance.

Epidemics, pandemics, and other public health threats, including COVID-19, could have a material adverse effect on our business, including our results of operations, financial position and/or liquidity, in a manner and to a degree that cannot be predicted.

We continue to monitor the developments relating to the COVID-19 pandemic, including actions taken or recommended by governments and other authorities to reduce the spread of the virus and to assess its impact on our business and the insurance and reinsurance sectors.

The future impact of the pandemic on us is uncertain and could have a material adverse impact on inflation, global financial markets, and our results of operations, financial position, and/or liquidity.

The extent of the impact will depend on future developments, including actions taken to limit the spread of COVID-19 and the uncertain impact of potential judicial, legislative, and regulatory actions by local, state, and national governmental and regulatory bodies.

Risks presented by the ongoing effects of COVID-19 include possible higher loss and loss adjustment expenses, inflation, potential impairment on SILP’s investment strategy or performance, Innovations investments’ performance and heightened cybersecurity risks.

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These laws and regulations vary country to country and state to state, but they generally require the establishment of programs to detect and prevent unauthorized access to personal data and to mitigate theft of personal data.

For example, the General Data Protection Regulation (“GDPR”), which establishes uniform data privacy laws across the European Union (“EU”) is effective for all EU member states.

The GDPR anticipates the processing of data for reinsurance and other purposes and applies standards and rules that covered entities must establish and monitor with respect to such processing and use.

As our operations expand to other jurisdictions, we will be required to comply with cybersecurity laws in those jurisdictions, which will further increase our cost of compliance.

See “Part 1, Item 1.

Business - Regulations ” and “ Part 1C .

Cybersecu rity .”

Our property and casualty reinsurance operations make us vulnerable to losses from catastrophes and may cause our results of operations to vary significantly from period to period.

Certain of our reinsurance operations expose us to claims arising out of unpredictable catastrophic events, including weather-related and other natural catastrophes and man-made disasters such as acts of war or terrorism.

The incidence and severity of catastrophes are inherently unpredictable.

Increases in the frequency and severity of natural catastrophes and the losses that result from them are possible.

In particular, climate change, to the extent that it produces extreme changes in temperatures and weather patterns, could impact the frequency or severity of weather events and wildfires.

Changes in weather patterns could also affect the frequency and severity of other natural catastrophe events to which we may be exposed.

Certain of our reinsurance operations expose us to claims arising out of unpredictable catastrophic events, including losses from severe weather and other natural catastrophes and man-made disasters such as acts of war or terrorism.

The incidence and severity of catastrophes are inherently unpredictable, with climate change continuing to add to that inherent unpredictability as well as increasing the frequency and severity of events.

To the extent climate change produces extreme changes in temperatures and weather patterns, it could impact the frequency or severity of weather including, but not limited to, hurricanes, tornadoes, freezes, droughts, other storms, and wildfires.

These changes in weather patterns could also affect the frequency and severity of other natural catastrophe events to which we may be exposed.

Further, such catastrophes could impact the affordability and availability of homeowners insurance, which could impact pricing.

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Claims from catastrophic events could cause substantial volatility in our financial results for any fiscal quarter or year and could materially and adversely affect our business, financial condition and results of operations.

The inability to obtain business provided from brokers could materially and adversely affect our business, financial condition and results of operations.

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Finally, given the scientific uncertainty of predicting the effect of climate cycles and global climate change on the frequency and severity of natural catastrophes and the lack of adequate predictive tools, we may not be able to adequately model the associated exposures and potential losses in connection with such catastrophes which could have a material adverse effect on our business, financial condition or operating results.

The loss of significant brokers could materially and adversely affect our business, financial condition and results of operations.

A significant portion of our business is placed through brokered transactions, which involve a limited number of reinsurance brokers, which has continued to decrease in recent years as a result of consolidation in the broker sector.

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We depend on our clients’ evaluations of the risks associated with their insurance underwriting, which may subject us to reinsurance losses.

In our proportional reinsurance business, in which we assume an agreed percentage of each underlying insurance contract, we do not expect to separately evaluate each of the original individual risks assumed under these reinsurance contracts.

In our proportional reinsurance business, we do not expect to separately evaluate each of the original individual risks assumed under these reinsurance contracts.

Therefore, we are largely dependent on the original underwriting decisions made by ceding companies.

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While we generally seek to mitigate this risk through, among other things, collateral agreements, funds withheld, corporate guarantees, and the right to offset receivables against any losses payable, an increased inability of customers to fulfill their obligations to us could have an adverse effect on our financial condition and results of operations.

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Our reinsurance balances receivable from brokers and cedents at December 31, 2023 totaled $619.4 million, which included premiums, ceding commissions receivable, and funds at Lloyd’s, a majority of which are not collateralized.

We cannot provide assurance that such receivables will be collected or that valuation allowances or write-downs for uncollectible balances will not be required in future periods.

We may be unable to purchase reinsurance for the liabilities we reinsure, and if we successfully purchase such reinsurance, we may be unable to collect, which could adversely affect our business, financial condition, and results of operations.

From time to time, we seek to purchase reinsurance for certain liabilities we reinsure to mitigate the effect of a potential concentration of losses upon our financial condition.

We may not successfully alleviate risk through reinsurance arrangements.

Additionally, we may be unable to collect, which could adversely affect our business, financial condition, and results of operations.

As part of our risk management, from time to time, we seek to purchase reinsurance for certain liabilities we reinsure to mitigate the effect of a potential concentration of losses upon our financial condition.

The insolvency or inability or refusal of a retrocessionaire to make payments under the terms of its agreement with us could have an adverse effect on us because our obligations to our clients would remain.

At certain times, market conditions have limited, and in some cases have prevented, reinsurers from obtaining the types and amounts of retrocessional coverage they consider necessary for their business needs.

Accordingly, we may not be able to obtain our desired amounts of retrocessional coverage, negotiate terms that we deem appropriate or acceptable, or obtain retrocessional coverage from entities with satisfactory creditworthiness.

Accordingly, we may not be able to obtain our desired amounts of retrocessional coverage, negotiate terms that we deem

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appropriate or acceptable, or obtain retrocessional coverage from entities with satisfactory creditworthiness.

Our inability to establish adequate retrocessional arrangements or the failure of our retrocessional arrangements to protect us from overly concentrated risk exposure could materially and adversely affect our business, financial condition, and results of operations.

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Our credit facility requires us and/or certain of our subsidiaries to comply with certain covenants, including restrictions on our ability to place a lien or charge on pledged assets, issue debt, and in certain circumstances, on the payment of dividends.

For more details, see “Part II, Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liq ui di ty ”.

Our failure to comply with these or other covenants could result in an event of default under the credit facility or any credit facility we may enter into in the future, which, if not cured or waived, could result in us being required to repay the amounts outstanding under these facilities prior to maturity.

As a result, our business, financial condition, and results of operations could be materially and adversely affected.

We may not successfully obtain the necessary credit facilities to support our business strategy.

As noted in “Part 1, Item 1.

Business - Regul ations ”, we are required to provide letters of credit or collateral to jurisdictions in which we are not licensed or admitted as a reinsurer.

While we have expanded our credit facilities with the addition of the CIBC LOC facility in late 2023, there is no assurance that the Citi LOC facility will be renewed in 2024 (see Note 16 “ Commitments and Contingencies - Letters of Credit and Trusts ” of the consolidated financial statements).

If we lose or are unable to retain or implement succession plans for our senior management and other key personnel, our ability to implement our business strategy could be delayed or hindered, which, in turn, could materially and adversely affect our business, financial condition and results of operations.

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The failure of these work permits to be granted or extended could prevent us from continuing to implement our business strategy.

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We may face risks arising from future strategic transactions such as acquisitions, dispositions, mergers, or joint ventures.

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or assume businesses with internal control deficiencies.

Risk-mitigating provisions that we put in place in the course of negotiating and executing these transactions, such as due diligence efforts and indemnification provisions, may not be sufficient to fully address these risks and contingencies.

Risk-mitigating provisions that we put in place in the course of negotiating and executing these

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transactions, such as due diligence efforts and indemnification provisions, may not be sufficient to fully address these risks and contingencies.

Non-compliance with laws, regulations, and taxation regarding transactions with international counterparties may adversely affect our business.

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Any suspension or revocation of any of our licenses would materially and adversely affect our business, financial condition and results of operations.

We are licensed as a reinsurer in the Cayman Islands and the EEA.

Greenlight Re is licensed as a reinsurer in the Cayman Islands and the EEA.

We are also licensed to write insurance business in the U.K.

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CIMA and the CBI may take a number of actions, including suspending or revoking a reinsurance license whenever the regulatory body believes that a licensee is or may become unable to meet its financial obligations, is carrying on business in a manner likely to be detrimental to the public interest or the interest of its creditors or policyholders, has contravened the terms of the Act, or has otherwise behaved in such a manner so as to cause such regulatory body to call into question the licensee’s fitness to conduct regulated activity.

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Further, based on statutes, regulations, and policies in their respective jurisdictions, CIMA and CBI may suspend or revoke our licenses if certain events occur, including without limitation:

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federal securities law .”)

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Our reinsurance subsidiaries are subject to minimum capital and surplus requirements, and our failure to meet these requirements could subject us to regulatory action.

The Insurance (Capital and Solvency) (Classes B, C, and D Insurers) Regulations (2018 Revision) (the “Capital and Solvency Regulations”) impose on Greenlight Re a minimum capital requirement of US$50 million, a prescribed capital requirement of US$226.5 million and a requirement to maintain solvency equal to greater than the total prescribed capital requirement (the “Capital Requirements”).

At December 31, 2022, Greenlight Re was in compliance with the Capital Requirements.

The Insurance (Capital and Solvency) (Classes B, C, and D Insurers) Regulations (2018 Revision) (the “Capital and Solvency Regulations”) impose on Greenlight Re to maintain minimum statutory capital and surplus equal to the greater of:

a) the minimum capital requirement of $50 million and b) the prescribed capital requirement (the “Capital Requirements”).

At December 31, 2023, Greenlight Re was in compliance with the Capital Requirements - see Note 18 “ Statutory Requir ements ” of the consolidated financial statements.

GRIL, our Irish subsidiary, is required to comply with risk-based solvency requirements under the European legislation known as “Solvency II,” including calculating and maintaining a minimum capital requirement and solvency capital requirement.

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These restrictions could adversely impact the Company.

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We are subject to the risk of possibly becoming an investment company under U.S.

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We rely on an exemption under the Investment Company Act for an entity organized and regulated as a foreign insurance company which is engaged primarily and predominantly in the reinsurance of risks on insurance agreements.

The law in this area is subjective, and there is a lack of guidance as to the meaning of “primarily and predominantly” under the relevant exemption to the Investment Company Act.

For example, there is no standard for the amount of premiums that need to be written relative to the level of an entity’s capital in order to qualify for the exemption.

As we hold ourselves out as a global specialty property and casualty reinsurer and we do not propose to engage primarily in the business of investing or trading in securities, we believe the exemption applies.

Accordingly, we do not believe that we are, or are likely to become in the future, an investment company under the Investment Company Act.

Nonetheless, the law in this area is not well developed, and there is a lack of definitive guidance as to the meaning of “primarily and predominantly” under the relevant exemption to the Investment Company Act.

If this exemption were deemed inapplicable, we would have to register under the Investment Company Act as an investment company.

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Registered investment companies are not permitted to operate their business in the manner in which we operate our business, nor are registered investment companies permitted to have many of the relationships that we have with our affiliated companies.

Accordingly, we likely would not be permitted to be limited partners in SILP unless we obtained board and shareholder approvals under the Investment Company Act.

If we did not invest in SILP, we would seek to identify and retain another investment advisor with a value-oriented investment philosophy.

If we could not identify or retain such an advisor, we would be required to make substantial modifications to our investment strategy.

Any such changes to our investment strategy could materially and adversely impact our investment results, financial condition, and ability to implement our business strategy.

Any changes to our investment strategy necessitated by being labeled a registered investment company could materially and adversely impact our investment results, financial condition, and ability to implement our business strategy.

If at any time it were established that we had been operating as an investment company in violation of the registration requirements of the Investment Company Act, there would be a risk, among other material adverse consequences, that we could become subject to monetary penalties or injunctive relief, or both, or that we would be unable to enforce contracts with third parties or that third parties could seek to obtain rescission of transactions with us undertaken during the period in which it was established that we were an unregistered investment company.

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To the extent that the laws and regulations change in the future so that contracts we write are deemed not to be reinsurance contracts, we will be at greater risk of not qualifying for the Investment Company Act exception.

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Statutes, regulations, and policies that our subsidiaries are subject to may also restrict the ability of these subsidiaries to write insurance and reinsurance policies, make certain investments, and distribute funds.

More specifically, with respect to GRIL, Solvency II was introduced with effect from January 1, 2016, and governs the prudential regulation of insurers and reinsurers, and requires insurers and reinsurers in Europe to meet risk-based solvency requirements.

More specifically, with respect to GRIL, Solvency II governs the prudential regulation of insurers and reinsurers, and requires insurers and reinsurers in Europe to meet risk-based solvency requirements.

It also imposes group solvency and governance requirements on groups with insurers and/or reinsurers operating in the European Economic Area.

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We may not be able to comply fully with, or obtain desired exemptions from, revised statutes, regulations, and policies that currently, or may in the future, govern the conduct of our business.

Failure to comply with, or to obtain desired

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authorizations and/or exemptions under, any applicable laws could result in restrictions on our ability to do business or undertake activities that are regulated in one or more of the jurisdictions in which we operate and could subject us to fines and other sanctions.

The MAA includes amendments that provide for a specific administrative fines framework whereby CIMA has been granted the power to issue monetary penalties of up to 1 million Cayman Dollars for a very serious breach.

Failure to comply with, or to obtain desired authorizations and/or exemptions under, any applicable laws could result in restrictions on our ability to do business or undertake activities that are regulated in one or more of the jurisdictions in which we operate and could subject us to fines and other sanctions.

In addition, governmental authorities worldwide have become increasingly interested in potential risks posed by the insurance industry as a whole, and to the commercial and financial systems in general.

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As a matter of Cayman Islands law, a director of a Cayman Islands company is in the position of a fiduciary with respect

to the company and therefore it is considered that they owe the following duties to the company:

a duty to act in good faith and

in what they consider to be in the best interests of the company;

a duty not to make a profit out of their position as director

(unless the company permits them to do so);

to the company and therefore it is considered that they owe certain duties to the company, including:

a duty to act in good faith and in what they consider to be in the best interests of the company;

a duty not to make a profit out of their position as director (unless the company permits them to do so);

a duty to exercise their powers for the purposes for which they are conferred;

duty not to put themselves in a position where the interests of the company conflict with their personal interest or their duty to a

and a duty not to put themselves in a position where the interests of the company conflict with their personal interest or their duty to a third party.

A director of a Cayman Islands company owes to the company a duty to act with skill and care.

A director will need

to exhibit in the performance of their duties both the degree of skill that may reasonably be expected from a subjective

perspective determined by reference to their knowledge and experience and the skill and care objectively to be expected from a

person occupying office as a director of the company.

Under Cayman Islands corporate law and pursuant to our Third Amended and Restated Memorandum and Articles of Association (the “Articles”), a director may vote on a contract or transaction where the director has an interest as a shareholder, director, officer, or employee, provided such interest is duly disclosed to the Board.

A director will need to exhibit in the performance of their duties both the degree of skill that may reasonably be expected from a subjective perspective determined by reference to their knowledge and experience and the skill and care objectively to be expected from a person occupying office as a director of the company.

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Under Cayman Islands corporate law and pursuant to our Articles, a director may vote on a contract or transaction where the director has an interest as a shareholder, director, officer, or employee, provided such interest is duly disclosed to the Board.

In exercising any such vote, such director's duties remain as described above.

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Under Delaware law, interested party transactions are voidable.

A failure by Syndicate 3456 to comply with rules and regulations could materially and adversely interfere with our business strategy.

A failure by our Syndicate 3456 to comply with rules and regulations could materially and adversely interfere with our business strategy.

Syndicate 3456 is subject to Lloyd’s oversight.

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The success of the investment strategy may also be affected by general economic conditions.

Unexpected market volatility and illiquidity associated with our investment in SILP could materially and adversely affect our investment results, financial condition, or

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results of operations.

Unexpected market volatility and illiquidity associated with our investment in SILP could materially and adversely affect our investment results, financial condition, or results of operations.

SILP may be concentrated in a few large positions, which could result in material adverse valuation movements.

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At December 31, 2023, SILP, along with certain affiliates of DME Advisors, collectively owned 27.1% of Green Brick Partners, Inc., a publicly traded company (NYSE:

GRBK), or the “GRBK Shares”.

GRBK), or the “GRBK Shares”, which was subsequently reduced by approximately 2% in January 2024.

At December 31, 2023, SILP had invested more than 10% of Greenlight Re Surplus in GRBK.

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Since SILP may not be widely diversified by security or by industry, it may be subject to more rapid changes in value than would be the case if our investment portfolio were required to maintain a wide diversification among companies, securities industries, and types of securities.

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Under the SILP LPA, we are contractually obligated to invest substantially all our assets in SILP with certain exceptions.

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Greenlight Re and GRIL, as limited partners of SILP may withdraw upon notice only on the Greenlight Re Relevant Date or the GRIL Relevant Date or “for cause” (each as defined in the SILP LPA).

Additionally, while GRIL may withdraw as a limited partner in SILP due to

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unsatisfactory long-term performance of DME II or DME Advisors, as determined solely by the Board of Directors of GRIL at the end of each fiscal year during the term of the SILP LPA, Greenlight Re may not.

The historical performance of DME Advisors and its affiliates should not be considered indicative of the future results of the SILP investment portfolio, our future results, or any returns expected on our Class A ordinary shares.

The historical returns of SILP and other funds managed by DME Advisors and its affiliates are not directly linked to our Class A ordinary shares.

Additionally, while GRIL may withdraw as a limited partner in SILP due to unsatisfactory long-term performance of DME II or DME Advisors, as determined solely by the Board of Directors of GRIL at the end of each fiscal year during the term of the SILP LPA, Greenlight Re may not.

The historical returns of SILP and other funds managed by DME Advisors and its affiliates are not directly linked to our ordinary shares.

Results for the SILP investment portfolio could differ from those of other funds managed by DME Advisors and its affiliates due to restrictions imposed by our investment guidelines and other factors.

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and Greenlight Re may lead to a conflict of interest.

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DME Advisors and its affiliates may also manage accounts whose advisory fee schedules, investment objectives, and policies differ from those of SILP, which may cause DME Advisors and its affiliates to effect trading in one account that may have an adverse effect on another account, including SILP.

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The loss carry forward provision contained in the SILP LPA allows DME II to earn a reduced performance allocation of 10% of profits in any year subsequent to the year in which SILP has incurred a loss until all losses are recouped and an additional amount equal to 150% of the loss is earned.

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While the performance compensation arrangement contained in the SILP LPA provides that losses will be carried forward as an offset against net profits in subsequent periods, DME II and DME Advisors generally will not otherwise be penalized for losses or decreases in the value of our portfolio under the SILP LPA.

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DME Advisors only uses soft dollars to pay for expenses that would otherwise be borne by SILP and certain other co-managed funds.

However, DME Advisors’ right to use soft dollars may give DME Advisors an incentive to select brokers or dealers for our transactions or to negotiate commission rates or other execution terms in a manner that takes into account the soft dollar benefits received by DME Advisors rather than giving exclusive consideration to the interests of our investment portfolio and, accordingly, may create a conflict.

However, DME Advisors’ right to use soft dollars may give DME Advisors an incentive to select brokers or dealers for our transactions or to negotiate commission rates or other execution terms in a

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manner that takes into account the soft dollar benefits received by DME Advisors rather than giving exclusive consideration to the interests of our investment portfolio and, accordingly, may create a conflict.

Increased regulation or scrutiny of alternative investment advisors may affect DME Advisors’ ability to manage SILP or affect our business reputation.

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Short sales subject our capital accounts in SILP to material and adverse loss potential since the market price of securities sold short may continuously increase.

Short-sale transactions have been subject to increased regulatory scrutiny, including the imposition of restrictions on

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short selling certain securities and reporting requirements.

Short-sale transactions have been subject to increased regulatory scrutiny, including the imposition of restrictions on short selling certain securities and reporting requirements.

SILP’s ability to execute a short selling strategy may be materially and adversely impacted by new temporary and/or permanent rules, interpretations, prohibitions, and restrictions adopted in response to these adverse market events.

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Any event which may adversely affect the value of positions SILP holds could materially and adversely affect the net asset value of our investment portfolio and our results of operations.

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SILP may transact in derivatives trading, which may increase the risks associated with our investment portfolio.

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Risks Relating to Our Innovations Strategy

The carry values of our Innovations investments may differ significantly from those that would be used if we carried these investments at fair value.

The carrying values of our Innovations investments may differ significantly from those that would be used if we carried these investments at fair value.

Additionally, we have a material concentration in our top five holdings at December 31, 2023.

Our Innovations investments include private investments and unlisted equities in early-stage or start-up entities for which no active market may exist.

We carry these investments on our consolidated balance sheets at cost, less impairment, plus or minus observable price changes.

These carry values may differ significantly from those that would be used if we carried them at fair value.

We carry these investments on our consolidated balance sheets at cost, less impairment, plus or minus observable price changes (see “ Critic al Accounting Estimates - “ Investments ” under “Part II, Item 8.

Management Discussion and Analysis of Financial Condition and Results of Operations”).

These carrying values may differ significantly from those that would be used if we carried them at fair value.

If we were required to liquidate all or a portion of these investments quickly, we could realize significantly less than the carrying value.

Furthermore, our Innovations investments are generally subject to restrictions on redemptions and sales that limit our ability to liquidate these investments in the short term.

The carry value of our Innovations investments may become concentrated in a limited number of entities or have significant exposure to certain geographic areas or economic sectors.

The carrying value of our Innovations investments may become concentrated in a limited number of entities as a result of subsequent remeasurement and/or have significant exposure to certain geographic areas or economic sectors.

The concentration of investments can increase investment risk and volatility.

At December 31, 2023, our top five holdings accounted for 67% of the total carrying value.

Any of the foregoing could result in a decline in our investment performance and capital resources and, accordingly, could materially and adversely affect our financial results and results of operations.

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Our Innovations investments carry higher risks due to illiquidity.

We invest in illiquid equity and debt instruments of early-stage companies in our Innovations investments portfolio.

Furthermore, our Innovations investments are generally subject to restrictions on redemptions and sales that limit our ability to liquidate these investments in the short term.

As such, there is a high liquidity risk due to the lack of active markets.

We may not be able to sell timely, or at all, illiquid holdings of early-stage companies facing significant challenges operationally and financially subsequent to our initial investment (see below “ Investments in privately held early-stage companies involve significant risks ”).

Accordingly, this could materially and adversely affect our business, financial condition and results of operations.

Our Innovations investments support our underwriting operations and the failure to identify and consummate investment opportunities may materially and adversely affect our ability to implement our business strategy.

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Investments in privately held early-stage companies involve significant risks.

Our Innovations unit primarily invests in privately held U.S.

early-stage companies.

Our Innovations unit primarily invests in privately held early-stage companies.

Investments in privately held early-stage companies involve a number of significant risks, including the following:

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• these companies may have limited financial resources and may be unable to meet their operating obligations;

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Therefore, the death, disability, resignation or termination of one or more of these persons could have a material adverse effect on such investment and, in turn, on us;

• they may not have adequate internal controls which would make them susceptible to fraud or mismanagement;

• there is generally little public information about these companies.

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As a minority equity investor, we are often not in a position to influence the entity, and other equity holders and management of such entity may make decisions that could decrease the value of our investment in such entity.

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When we make a minority equity investment through our Innovations unit, we are subject to the risk that an entity may make business decisions with which we disagree.

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The entity may be subject to restrictive financial and operating covenants and their leverage may impair the ability to finance their future operations and capital needs.

As a result, such entity’s flexibility to respond to changing business and economic conditions and to take advantage of business opportunities may be limited.

As a result, such

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entity’s flexibility to respond to changing business and economic conditions and to take advantage of business opportunities may be limited.

Our failure to make follow-on investments in our existing Innovations investments could impair the value of our

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federal securities laws .”

Risks Relating to Our Class A Ordinary Shares

Risks Relating to Our Ordinary Shares

Our ability to achieve our business objectives depends on our ability to manage and deploy capital.

Our ability to achieve our business objectives depends on our ability to manage and deploy capital, which depends, in

turn, on our management’s ability, with oversight from our Board of Directors, to identity, evaluate and monitor our

underwriting and investment results, our liquidity and competing needs for capital.

We cannot assure you that our management

and deployment of capital will enable us to achieve our business objectives, and our failure to effectively manage and deploy

our capital could materially and adversely affect our financial condition and results of operations.

Our ability to achieve our business objectives depends on our ability to manage and deploy capital, which depends, in turn, on our management’s ability, with oversight from our Board of Directors, to identity, evaluate and monitor our underwriting and investment results, our liquidity and competing needs for capital.

We cannot assure you that our management and deployment of capital will enable us to achieve our business objectives, and our failure to effectively manage and deploy our capital could materially and adversely affect our financial condition and results of operations.

Our level of debt may have an adverse impact on our liquidity, restrict our current and future operations, particularly our ability to respond to business opportunities, and increase our vulnerability to adverse economic and industry conditions.

At March 1, 2023, we had $65.8 million of convertible notes outstanding (December 31, 2022:

$79.6 million) that mature on August 1, 2023.

At December 31, 2023, we had $73.3 million of debt outstanding (December 31, 2022:

$80.5 million) that matures on August 1, 2026.

Our level of debt and the provisions of such debt could have significant consequences, which include, but are not limited to, the following:

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• make us more vulnerable to economic downturns and limit our ability to withstand competitive pressures or take advantage of new opportunities to grow our business.

We cannot assure you that we will be able to refinance our indebtedness debt upon maturity on acceptable terms or at all.

A shareholder may be required to sell its ordinary shares.

Our Articles provide that we have the option, but not the obligation, to require a shareholder to sell its ordinary shares for their fair market value to us, to other shareholders or to third parties if our Board of Directors determines that ownership of our ordinary shares by such shareholder may result in adverse tax, regulatory or legal consequences to us, any of our subsidiaries or any of our shareholders and that such sale is necessary to avoid or cure such adverse consequences.

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We may refinance some or all of our indebtedness by issuing new debt or equity securities in one or more offerings.

We cannot assure you that we will be able to refinance our indebtedness on acceptable terms or at all.

Such securities offerings may dilute our existing shareholders, reduce the value of our Class A ordinary shares, or both.

Because our decision to issue securities depends on, among other things, market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing, or nature of any future offerings.

Thus, holders of our Class A ordinary shares bear the risk of our future offerings diluting and potentially reducing the value of our Class A ordinary shares.

Conversion of our convertible notes or future sales or issuances of Class A ordinary shares may dilute the ownership interest of existing shareholders, including holders who have previously converted their notes.

Such dilution may adversely affect the trading price of our Class A ordinary shares,and the convertible notes and the conversion rate of the convertible notes may not be adjusted for all dilutive events.

We may issue equity or debt securities in the future for a number of reasons, including to finance our operations and business strategy, to acquire assets or companies, to adjust our ratio of debt to equity, or in connection with our incentive and stock option plans.

Any issuance of equity securities, including the issuance of shares, if any, upon conversion of the convertible notes, could dilute the interests of our existing shareholders, including holders who have previously received shares upon conversion of their notes, and could substantially affect the trading price of our Class A ordinary shares and the convertible notes.

In addition, conversion of our convertible notes into our Class A ordinary shares could depress the price of our Class A ordinary shares.

We may not be able to repay or refinance our convertible notes, pay interest on the convertible notes, or settle conversions of the convertible notes in cash or to repurchase the convertible notes upon a fundamental change, and our future debt, if any, may contain limitations on our ability to pay cash upon conversion or repurchase of the convertible notes.

Our convertible notes mature in August 2023.

Further, holders of our convertible notes have the right to require us to repurchase all or a portion of their notes for cash upon the occurrence of a fundamental change under the indenture governing the convertible notes.

In addition, upon conversion of the convertible notes, unless we elect to deliver solely Class A ordinary shares to settle such conversion (other than paying cash in lieu of delivering any fractional share), we will be required to make cash payments in respect of the convertible notes being converted.

However, we may not have enough available cash or be able to obtain financing on favorable terms, if at all, at the time we are required to make repurchases of convertible notes surrendered therefor or pay cash with respect to the convertible notes being converted.

In addition, our ability to make the required repurchase upon a fundamental change may be limited by law or the terms of other debt agreements or securities.

Our failure to pay interest on the convertible notes or to make the required cash repurchase or cash payment, as the case may be, would constitute an event of default under the indenture governing the convertible notes which, in turn, could constitute an event of default under other debt agreements or securities, thereby resulting in their acceleration and required prepayment and thereby further restricting our ability to make such interest payments and repurchases.

If, due to a default, the repayment of related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay such indebtedness and the convertible notes.

We may be required to refinance all or part of our debt, sell important strategic assets at unfavorable prices, incur additional indebtedness or issue ordinary shares or other equity securities, which we may be unable to do on terms acceptable to us, in amounts sufficient to meet our needs or at all.

A shareholder may be required to sell its Class A ordinary shares.

Our Articles provide that we have the option, but not the obligation, to require a shareholder to sell its Class A ordinary shares for their fair market value to us, to other shareholders or to third parties if our Board of Directors determines that ownership of our Class A ordinary shares by such shareholder may result in adverse tax, regulatory or legal consequences to us, any of our subsidiaries or any of our shareholders and that such sale is necessary to avoid or cure such adverse consequences.

Provisions of our Articles, the Companies Act of the Cayman Islands (the “Companies Act”) and our corporate structure may each impede a takeover, which could adversely affect the value of our Class A ordinary shares.

Our Articles contain certain provisions that could make it difficult for a third party to acquire us, even if doing so would be beneficial to our shareholders.

Our Articles provide that a director may only be removed for “cause” as defined in the Articles, upon the affirmative vote of not less than 50% of the votes cast at a meeting at which more than 50% of our issued and outstanding Class A ordinary shares are represented.

Further, under the Amended and Restated Memorandum and Articles of Association of Greenlight Re, a director may only be removed without cause upon the affirmative vote of not less than 80% of the votes cast at a meeting at which more than 50% of our issued and outstanding Class A ordinary shares are represented.

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Our Articles permit our Board of Directors to issue preferred shares from time to time, with such rights and preferences as they consider appropriate.

Our Board of Directors may authorize the issuance of preferred shares with terms and conditions and under circumstances that could have an effect of discouraging a takeover or other transaction, deny shareholders the receipt of a premium on their Class A ordinary shares in the event of a tender or other offer for Class A ordinary shares and have a depressive effect on the market price of the Class A ordinary shares.

Our Board of Directors may authorize the issuance of preferred shares with terms and conditions and under circumstances that could have an effect of discouraging a takeover or other transaction, deny shareholders the receipt of a premium on their ordinary shares in the event of a tender or other offer for ordinary shares and have a depressive effect on the market price of the ordinary shares.

As compared to mergers under corporate law in the United States, it may be more difficult to consummate a merger of two or more companies in the Cayman Islands or the merger of one or more Cayman Islands companies with one or more overseas companies, even if such transaction would be beneficial to our shareholders.

In certain circumstances, the Companies Act allows for mergers or consolidations between two Cayman Islands

companies, or between a Cayman Islands exempted company and a company incorporated in another jurisdiction (provided that

is facilitated by the laws of that other jurisdiction).

Where the merger or consolidation is between two Cayman Islands companies, the directors of each company must

approve a written plan of merger or consolidation containing certain prescribed information.

That plan or merger or

consolidation must then be authorized by:

(a) a special resolution of the shareholders of each company;

and (b) such other

authorization, if any, as may be specified in such constituent company’s articles of association.

No shareholder resolution is

required for a merger between a parent company (i.e., a company that holds issued shares that together represent 90% of the

votes at a general meeting of the subsidiary company) and its subsidiary company if a copy of the plan of merger is given to

every member of each subsidiary company to be merged unless that member agrees otherwise.

The consent of each holder of a

fixed or floating security interest of a constituent company must be obtained, unless the court waives such requirement.

Cayman Islands Registrar of Companies is satisfied that the requirements of the Companies Act (which includes certain other

formalities) have been complied with, the Registrar of Companies will register the plan of merger or consolidation.

Where the merger or consolidation involves a foreign company, the procedure is similar, save that with respect to the

foreign company, the directors of the Cayman Islands exempted company are required to make a declaration to the effect that,

having made due enquiry, they are of the opinion that the following requirements have been met:

(i) that the merger or

consolidation is permitted or not prohibited by the constitutional documents of the foreign company and by the laws of the

jurisdiction in which the foreign company is incorporated, and that those laws and any requirements of those constitutional

documents have been or will be complied with;

(ii) that no petition or other similar proceeding has been filed and remains

outstanding or order made or resolution adopted to wind up or liquidate the foreign company in any jurisdictions;

(iii) that no

receiver, trustee, administrator or other similar person has been appointed in any jurisdiction and is acting in respect of the

foreign company, its affairs or its property or any part thereof;

and (iv) that no scheme, order, compromise or other similar

arrangement has been entered into or made in any jurisdiction whereby the rights of creditors of the foreign company are and

continue to be suspended or restricted.

Where the surviving company is the Cayman Islands exempted company, the directors of the Cayman Islands exempted company are further required to make a declaration to the effect that, having made due enquiry, they are of the opinion that the following requirements have been met:

(i) that the foreign company is able to pay its debts as they fall due and that the merger or consolidation is bona fide and not intended to defraud unsecured creditors of the foreign company;

(ii) that in respect of the transfer of any security interest granted by the foreign company to the surviving or consolidated company (a) consent or approval to the transfer has been obtained, released or waived;

(b) the transfer is permitted by and has been approved in accordance with the constitutional documents of the foreign company;

and (c) the laws of the jurisdiction of the foreign company with respect to the transfer have been or will be complied with;

(iii) that the foreign company will, upon the merger or consolidation becoming effective, cease to be incorporated, registered or exist under the laws of the relevant foreign

jurisdiction;

and (iv) that there is no other reason why it would be against the public interest to permit the merger or

consolidation.

For example, a merger or consolidation generally requires the consent of each holder of a fixed or floating security interest, unless the court waives such requirement, and a formal declaration must be made, meeting enumerated requirements, if the transaction involves a foreign company or where the surviving company is the Cayman Islands exempted company.

The Companies Act also includes statutory provisions that facilitate the reconstruction and amalgamation of companies,

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ought not to be approved, the court can be expected to approve the arrangement if it determines that:

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● the company is not proposing to act illegally or beyond the scope of its corporate authority and the statutory provisions as to majority vote have been complied with;

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rights, which would otherwise ordinarily be available to dissenting shareholders of a Delaware corporation.

In addition, David Einhorn, Chairman of our Board of Directors, owns all of the outstanding Class B ordinary shares.

As a result, we will not be able to enter into a scheme of arrangement without the approval of Mr.

Einhorn as the holder of our Class B ordinary shares.

Holders of Class A ordinary shares may have difficulty obtaining or enforcing a judgment against us, and they may face difficulties in protecting their interests because we are incorporated under Cayman Islands law.

Holders of ordinary shares may have difficulty obtaining or enforcing a judgment against us, and they may face difficulties in protecting their interests because we are incorporated under Cayman Islands law.

We are an exempted company limited by shares incorporated under the laws of the Cayman Islands and conduct a majority of our operations outside the United States.

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The common law of the Cayman Islands is derived in part from judicial precedent in the Cayman Islands as

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well as from English common law, which has persuasive, but not binding, authority on a court in the Cayman Islands.

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States predicated upon the civil liability provisions of the federal securities laws of the United States or any state;

original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability provisions of

and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability provisions of

the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are penal in

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We are not aware nor have we been advised of any reported class action having been brought in a Cayman Islands court.

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Derivative actions have been brought in the Cayman Islands courts, and the Cayman Islands courts have confirmed the

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against our Board of Directors.

Provisions of our Articles may reallocate the voting power of our Class A ordinary shares and subject holders of Class A ordinary shares to SEC compliance.

In certain circumstances, the total voting power of our Class A ordinary shares held by any one person will be reduced to less than 9.9% of the total issued and outstanding ordinary shares, and the total voting power of the Class B ordinary shares will be reduced to 9.5% of the total voting power of the total issued and outstanding ordinary shares.

In the event a holder of our Class A ordinary shares acquires shares representing 9.9% or more of the total voting power of our total ordinary shares or the Class B ordinary shares represent more than 9.5% of the total voting power of our total outstanding shares, there will be an effective reallocation of the voting power of the Class A ordinary shares or Class B ordinary shares which may cause a shareholder to acquire 5% or more of the voting power of the total ordinary shares.

Such a shareholder may become subject to the reporting and disclosure requirements of Sections 13(d) and (g) of the Exchange Act.

Such a reallocation also may result in an obligation to amend previous filings made under Section 13(d) or (g) of the Exchange Act.

Under our Articles, we have no obligation to notify shareholders of any adjustments to their voting power.

Shareholders should consult their own legal counsel regarding the possible reporting requirements under Section 13 of the Exchange Act.

At December 31, 2022, David Einhorn owned 18.0% of the issued and outstanding ordinary shares, which given that each Class B share is entitled to ten votes, causes him to exceed the 9.5% limitation imposed on the total voting power of the Class B ordinary shares.

Thus, the voting power held by the Class B ordinary shares that is in excess of the 9.5% limitation will be reallocated pro-rata to holders of Class A ordinary shares according to their percentage interest in the Company.

However, no shareholder will be allocated voting rights that would cause it to have 9.9% or more of the total voting power of our ordinary shares.

The allocation of the voting power of the Class B ordinary shares to a holder of Class A ordinary shares will depend upon the total voting power of the Class B ordinary shares outstanding, as well as the percentage of Class A ordinary shares held by a shareholder and the other holders of Class A ordinary shares.

Accordingly, we cannot estimate with precision what multiple of a vote per share a holder of Class A ordinary shares will be allocated as a result of the anticipated reallocation of voting power of the Class B ordinary shares.

We do not intend to pay dividends on our Class A ordinary shares and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common shares.

We do not intend to declare and pay dividends on our Class A ordinary shares for the foreseeable future.

Therefore, you are not likely to receive any dividends on your Class A ordinary shares for the foreseeable future.

The success of an investment in our Class A ordinary shares will depend upon any future appreciation in their value.

There is no guarantee that our Class A ordinary shares will appreciate in value or even maintain the price at which our shareholders have purchased their shares.

We do not intend to pay dividends on our ordinary shares and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common shares.

We do not intend to declare and pay dividends on our ordinary shares for the foreseeable future.

Therefore, you are not likely to receive any dividends on your ordinary shares for the foreseeable future.

The success of an investment in our ordinary shares will depend upon any future appreciation in their value.

There is no guarantee that our ordinary shares will appreciate in value or even maintain the price at which our shareholders have purchased their shares.

In the event that we did declare a dividend, such dividends and other distributions on issued and outstanding ordinary

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Dividends and other distributions

will be distributed among the holders of our Class A ordinary shares on a pro rata basis

will be distributed among the holders of our ordinary shares on a pro rata basis.

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We cannot be assured that after such date we would not be subject to any such tax.

As the law currently stands, upon the expiration of the current exemption, it will be possible for us to apply for another 20 year exemption, which we plan to do.

If we were to become subject to taxation in the Cayman Islands, our financial condition and results of operations could be materially and adversely affected.

Greenlight Capital Re, Greenlight Re and/or GRIL may be subject to United States federal income taxation.

We may be subject to United States federal income taxation.

Greenlight Capital Re and Greenlight Re are incorporated under the laws of the Cayman Islands, and GRIL is incorporated under the laws of Ireland.

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Greenlight Capital Re, Greenlight Re and/or GRIL may be subject to United States federal income tax on a portion of its net investment income, regardless of its source;

Greenlight Capital Re, Greenlight Re, and/or GRIL may not be entitled to deduct certain expenses that would otherwise be deductible from the income subject to United States taxation;

and Greenlight Capital Re, Greenlight Re and/or GRIL may be subject to United States branch profits tax on profits deemed to have been distributed out of the United States.

United States persons who own Class A ordinary shares may be subject to United States federal income taxation on our undistributed earnings and may recognize ordinary income upon disposition of Class A ordinary shares.

United States persons who own ordinary shares may be subject to United States federal income taxation on our undistributed earnings and may recognize ordinary income upon disposition of ordinary shares.

Passive Foreign Investment Company.

Significant potential adverse United States federal income tax consequences , including certain reporting requirements, generally apply to any United States person who owns shares in a passive foreign investment company, or a “PFIC”.

We do not expect that any of Greenlight Capital Re, Greenlight Re, or GRIL will be a PFIC for the current taxable year.

However, we cannot provide assurance that none of Greenlight Capital Re, Greenlight Re, or GRIL will be a PFIC for the current taxable year or any future taxable year.

Potential adverse United States federal income tax consequences , including certain reporting requirements, generally apply to any United States person who owns shares in a passive foreign investment company, or a “PFIC”.

We believe that based upon implementation of our business plan, none of Greenlight Capital Re, Greenlight Re, or GRIL will be, or should be, a PFIC for the current taxable year or for any foreseeable future years.

In general, any of Greenlight Capital Re, Greenlight Re or GRIL would be a PFIC for a taxable year if either (i) 75% or more of its income constitutes “passive income” or (ii) 50% or more of its assets produce “passive income”, or are held for the production of passive income.

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The exception for insurance companies is intended to ensure that a qualifying insurance entity’s income is not treated as passive income, except to the extent such income is attributable to financial reserves in excess of the reasonable needs of the insurance business.

We intend to operate our business with financial reserves and applicable insurance liabilities at levels that should not cause us to be deemed PFICs, although we cannot provide assurance that we will be successful in structuring our operations to meet such levels nor can we ensure that the IRS will not successfully challenge our status.

We intend to operate our business with financial reserves and applicable insurance liabilities at levels that should not cause us to be deemed PFICs, although we cannot provide definitive assurance that we will be successful in structuring our operations to meet such levels nor can we ensure that the IRS will not successfully challenge our status.

If we are unable to underwrite sufficient amount of risks and maintain a sufficient amount of applicable insurance liabilities, any of Greenlight Capital Re, Greenlight Re or GRIL may become a PFIC.

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Whether our insurance contracts possess adequate risk transfer for purposes of determining whether income under our contracts is insurance income, and whether we are predominantly engaged in an insurance business, are subjective in nature and there is little authoritative tax guidance on these issues.

We cannot provide assurance that the IRS will

We cannot provide assurance that the IRS will not successfully challenge our interpretation of the scope of the active insurance company exception and our qualification for

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not successfully challenge our interpretation of the scope of the active insurance company exception and our qualification for the exception.

the exception.

Further, the IRS may issue regulatory or other guidance that causes us to fail to qualify for the active insurance company exception on a prospective or retroactive basis.

Therefore, we cannot provide assurance that we will satisfy the exception for insurance companies and will not be treated as PFICs currently or in the future.

Controlled Foreign Corporation.

Therefore, we cannot provide definitive assurance that we will satisfy the exception for insurance companies and will not be treated as PFICs currently or in the future.

Controlled Foreign Corporation (“CFC”).

United States persons who, directly or indirectly or through attribution rules, own 10% or more of the total combined voting power or value of our shares, which we refer to as United States 10% shareholders, may be subject to the controlled foreign corporation, or CFC, rules.

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In general, a foreign insurance company will be treated as a CFC only if during the taxable year United States 10% shareholders collectively own more than 25% of the total combined voting power or total value of the entity’s shares.

We believe that the dispersion of our Class A ordinary shares among holders and the restrictions placed on transfer, issuance or repurchase of our Class A ordinary shares , will in most cases prevent shareholders who acquire Class A ordinary shares from being United States 10% shareholders.

We believe that the dispersion of our ordinary shares among holders and the restrictions placed on transfer, issuance or repurchase of our ordinary shares, will in most cases prevent shareholders who acquire ordinary shares from being United States 10% shareholders.

We cannot provide assurance, however, that these rules will not apply to you if you are or become a United States 10% shareholder.

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● direct or indirect insureds and persons related to such insureds owned directly or indirectly 20% or more of the voting power or value of our stock,

a United States person who owns Class A ordinary shares directly or indirectly on the last day of the taxable year would most likely be required to include their pro-rata share of our related person insurance income for the taxable year in their income.

a United States person who owns ordinary shares directly or indirectly on the last day of the taxable year would most likely be required to include their pro-rata share of our related person insurance income for the taxable year in their income.

This amount would be determined as if such related person insurance income were distributed proportionally to United States persons at that date.

We do not expect that we will knowingly enter into reinsurance agreements in which, in the aggregate, the direct or indirect insureds are, or are related to, owners of 20% or more of the Class A ordinary shares.

We do not believe that the 20% gross insurance income threshold will be met.

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In addition, the shareholder will be required to comply with certain reporting requirements, regardless of the amount of shares owned by the direct or indirect United States shareholder.

Although not free from doubt, we believe these rules should not apply to dispositions of Class A ordinary shares because Greenlight Capital Re is not directly engaged in the insurance business and because proposed United States Treasury regulations applicable to this situation appear to apply only in the case of shares of corporations that are directly engaged in the insurance business.

We cannot provide assurance, however, that the IRS will interpret the proposed regulations in this manner or that the proposed regulations will not be promulgated in final form in a manner that would cause these rules to apply to dispositions of Class A ordinary shares.

United States tax-exempt organizations who own Class A ordinary shares may recognize unrelated business taxable income.

Although not free from doubt, we believe these rules should not apply to dispositions of ordinary shares because Greenlight Capital Re is not directly engaged in the insurance business and because proposed United States Treasury regulations applicable to this situation appear to apply only in the case of shares of corporations that are directly engaged in the insurance business.

United States tax-exempt organizations who own ordinary shares may recognize unrelated business taxable income.

If you are a United States tax-exempt organization you may recognize unrelated business taxable income if a portion of our subpart F insurance income is allocated to you.

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The TCJA may cause us to undertake changes to the manner in which we conduct our business and could subject United States persons who own Class A ordinary shares to United States income taxation on our undistributed earnings.

The Tax Cuts and Jobs Act (“TCJA”) may cause us to undertake changes to the manner in which we conduct our business and could subject United States persons who own ordinary shares to United States income taxation on our undistributed earnings.

On December 22, 2017, the TCJA was signed into law.

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Accordingly, subject to any future corrections or clarifications that may be made to the TCJA, or any additional regulations that may be promulgated thereunder, the Company will be treated as a PFIC for any taxable year in which it does not meet the bright-line applicable insurance liabilities requirement of the TCJA.

At December 31, 2022, 2021, and 2020 the Company met the bright-line applicable insurance liabilities test.

At December 31, 2023, we met the bright-line applicable insurance liabilities test.

However, there is still substantial uncertainty regarding the application of the test.

The Company cannot guarantee that it will continue to meet the bright-line applicable insurance liabilities test in future periods.

In the event that the Company cannot meet this test, shareholders that are United States persons will be subject to United States income taxation on the Company’s undistributed earnings.

Further changes in United States tax regulations and laws including the rules regarding passive foreign investment companies could have a material impact on our ability to qualify for the insurance company exemption and/or change our status for United States persons who own Class A ordinary shares.

The IRS or Congress may issue additional regulations or legislation regarding the applicable insurance liabilities bright-line test of the passive foreign investment company (“PFIC”) rules or other aspects of the PFIC rules applicable to foreign insurance companies.

On December 4, 2020, the IRS issued proposed regulations (the “2020 Proposed Regulations”) and final regulations (the “2020 Final Regulations”) that would provide additional guidance and requirements regarding the exclusion from the definition of “passive income” for income derived in the active conduct of an insurance business by a qualified insurance corporation (“QIC”) and the application of certain look-through rules with respect to assets held, and income earned, through subsidiaries.

Under the 2020 Proposed Regulations, a QIC is in the “active conduct” of an insurance business only if it satisfies either a “factual requirements test” or an “active conduct percentage test.” The factual requirements test requires that the officers and employees of the QIC carry out substantial managerial and operational activities on a regular and continuous basis with respect to its core functions and that they perform virtually all of the active decision-making functions relevant to underwriting functions.

The active conduct percentage test generally requires that (i) the total costs incurred by the QIC with respect to its officers and employees for services rendered with respect to its core functions (other than investment activities) equal or exceed 50 percent of total costs incurred by the QIC with respect to its officers and employees and any other person or entities for services rendered with respect to its core functions (other than investment activities) and (ii) to the extent the QIC outsources any part of its core functions to unrelated entities, officers and employees of the QIC with experience and relevant expertise must select and supervise the person that performs the outsourced functions, establish objectives for performance of the outsourced functions and prescribe rigorous guidelines relating to the outsourced functions which are routinely evaluated and updated.

Under certain exceptions, however, a QIC (a) that has no or only a nominal number of employees or (b) that is a vehicle that (x) has the effect of securitizing or collateralizing insurance risks underwritten by other insurance or reinsurance companies or (y) is an insurance linked securities fund that invests in securitization vehicles, is deemed not engaged in the active conduct of an insurance business.

A QIC’s officers and employees include those of certain affiliates for these purposes.

The 2020 Final Regulations contain guidance on the treatment of the assets and income of certain look-through subsidiaries of a QIC, among other provisions related to QICs and PFICs.

We currently expect that the Company would not be a PFIC for the 2023 taxable year under the rules described above, were they effective for such year.

However, the rules are subject to varying interpretations and are highly dependent on the facts and circumstances, which may change from year to year or within a year.

We can offer no assurance whether, in what form or when the 2020 Proposed Regulations could be adopted.

We also can offer no assurance as to the potential impact of the 2020 Proposed Regulations or the 2020 Final Regulations for the Company in any year.

We cannot guarantee that we will continue to meet the bright-line applicable insurance liabilities test in future periods.

In the event that we cannot meet this test, shareholders that are United States persons will be subject to United States income taxation on our undistributed earnings.

corporation will generally be considered a passive foreign investment company (“PFIC”), for U.S.

federal income tax purposes, in any taxable year if either (i) at least 75% of its gross income for such year is passive income or (ii) at least 50% of the value of its assets is attributable to assets that produce or are held for the production of passive income.

Based on our past and current projections of our income and assets, we do not expect the Company to be a PFIC for the 2023 taxable year or for the foreseeable future.

However, since our projections may differ from our actual business results and our market capitalization and value of our assets may fluctuate, we cannot definitively assure you that we will not be or become a PFIC in the current taxable year or any future taxable year.

We are monitoring developments with respect to both the applicable insurance liabilities test and the IRS regulations.

At this time, we cannot predict whether or what, if any, additional regulations will be adopted or additional legislation will be enacted.

If regulations are adopted or legislation enacted that cause us to fail to meet the requirements of the insurance company

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exception, or if we fail to meet the applicable insurance liabilities test such failure could have a material adverse effect on the taxation of our shareholders who are U.S.

If regulations are adopted or legislation enacted that cause us to fail to meet the requirements of the insurance company exception, or if we fail to meet the applicable insurance liabilities test such failure could have a material adverse effect on the taxation of our shareholders who are U.S.

In that event we may undertake further changes to the manner in which we conduct our business, which also could have a material effect on our results of operations.

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Shareholders should consult their own tax advisors regarding potential changes in tax laws.

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If investments held by GRIL are determined not to be integral to the reinsurance business carried on by GRIL, additional Irish tax could be imposed and our business and financial results could be materially adversely affected.

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These measures are largely directed at counteracting the effects of tax neutral jurisdictions and preferential tax regimes in countries around the world.

While the Cayman Islands is currently on the list of jurisdictions that have substantially implemented the internationally agreed tax standard, we are not able to predict if additional requirements will be imposed, and if so, whether changes arising from such additional requirements will subject us to additional taxes.

The Cayman Islands was removed from the EU’s list of non-cooperative jurisdictions for tax purposes in October 2020 following the introduction of economic substance and private funds legislation and it is considered to be a country which co-operates with the EU with no pending commitments.

While the Cayman Islands is currently on the list of co-operative jurisdictions, we are not able to predict if additional requirements will be imposed, and if so, whether changes arising from such additional requirements will subject us to additional taxes.

The Cayman Islands’ economic substance legislation had already been evaluated in June 2019 by the OECD’s Forum on Harmful Tax Practices as “not harmful”, which is the highest rating possible.

There are no immediate regulatory, tax, trade or other legal impacts to the Company, but we are not able to predict any future EU actions and whether the EU will deem the newly enacted laws to be compliant with its requirements in order to remove the Cayman Islands from Annex 1.

While the implementation of the accord is uncertain and the minimum tax is not expected to apply to the Company as currently proposed, adjustments to the threshold could impact the Company in future periods.

UNRESOLVED STAFF COMMENTS

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There are no immediate regulatory, tax, trade or other legal impacts to the Company, but we are not able to predict any future EU actions.

On October 8, 2021, the OECD announced an accord endorsing and providing an implementation plan for a global minimum tax rate of at least 15% for large multinational corporations on a jurisdiction-by-jurisdiction basis, known as the “two pillar plan.” While the Company is not currently aware of any definitive actions being taken in the Cayman Islands to implement a minimum tax, in Ireland, a bill implementing the two pillar plan was signed into law on December 18, 2023, including an “undertaxed profit rule” that will come into effect in 2025.

In the United Kingdom, there was an announcement on November 17, 2023 that the government intends to implement an “undertaxed profit rule” with effect no earlier than 2025 as part of its legislation implementing the two pillar plan.

If the Cayman Islands does not adopt a minimum tax, the undertaxed profits rule may allow Irish or United Kingdom tax authorities to collect more tax from our Irish or United Kingdom companies.

The global minimum tax rules implemented in different jurisdictions (including the undertaxed profit rule) would apply to overseas profits of multinational firms with annual revenue of more than €750 million.

While these global minimum tax rules are not expected to apply to the Company as currently proposed and being implemented in jurisdictions applicable to the Company’s operations, due to the Company’s revenues currently falling below the proposed annual revenue threshold, adjustments to the threshold or continued growth of the Company’s revenues could impact the Company in future periods.

Further, even if the Company did eventually meet the applicable threshold due to continued revenue growth or otherwise, then given the size and structure of the Company, the Company may be eligible to meet an initial phase transitional safe harbor provided for in the model rules of the accord (and incorporated into the Irish legislation), which provides relief from taxation under the accord for a period of up to five additional years after the Company comes within the scope of the rules.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors