17 unchanged sentences
• We have exposure to losses arising from unpredictable natural disasters, terrorist acts, and other catastrophic events, the occurrence of which could result in an increase in the number or value of claims and could exceed the amount of reinsurance we purchased to protect us from such claims.
−Removed: • The global coronavirus outbreak could harm business and results of operations of the Company.
• The effect of emerging claim and coverage issues on our business is uncertain and may result in coverage of risks that we did not factor in our policy prices.
9 unchanged sentences
• If actual renewals of our existing contracts do not meet expectations, our premiums written in future years and our future results of operations could be materially adversely affected.
−Removed: • If California, North Carolina, Ohio or Virginia significantly increase the assessments our insurance companies are required to pay, our financial condition and results of operations will suffer.
+Added: • If California, North Carolina, Ohio or any other state in which our insurance companies are admitted significantly increase the assessments our insurance companies are required to pay, our financial condition and results of operations will suffer.
• Our use of third-party claims administrators in certain lines of business may achieve less desirable results which could cause us to incur higher losses and loss adjustment expenses.
1 unchanged sentence
• Changes in U.S.
−Removed: tax laws and the interpretation of certain provisions of the 2017 Tax Act (including associated regulations), which may be retroactive, could have a significant impact on the Company and persons who own our shares.
+Added: tax laws (including associated regulations) and the interpretation of certain provisions applicable to insurance/reinsurance businesses with U.S.
+Added: operations, which may be retroactive, could have a significant impact on the Company and persons who own our shares.
• The Company, JRG Re and James River Group Holdings UK Limited may be subject to U.S.
6 unchanged sentences
Risks Related to Ownership of Our Common Shares
+Added: • Litigation and legal proceedings against us or our subsidiaries could have a material adverse effect on our business, financial condition and/or results of operations.
+Added: • There is no guarantee that our evaluation of strategic alternatives will result in any particular outcome, and the perceived uncertainties related to the Company could adversely affect our business and our shareholders.
+Added: • The sale of JRG Re is subject to closing conditions and there can be no assurance that these conditions will be satisfied on the timeline we expect or at all, the sale of JRG may be terminated in certain circumstances, including the failure of the buyer to obtain required financing, and a portion of the consideration for the sale of JRG Re is a pre-closing dividend that is subject to the availability of unencumbered assets of JRG Re on the closing date.
+Added: • The identification of material weaknesses or the failure to otherwise maintain effective internal controls may result in material misstatements in our financial reporting and/or cause us to fail to meet our periodic reporting obligations.
• The amount of dividends that we may pay to our common shareholders is subject to restriction pursuant to the terms of the Series A Preferred Shares, and we cannot assure you that we will declare or pay dividends on our common shares in the future.
9 unchanged sentences
• Our operating results have in the past varied from quarter to quarter and may not be indicative of our long-term prospects.
−Removed: • Litigation and legal proceedings against us or our subsidiaries could have a material adverse effect on our business, financial condition and/or results of operations.
Risks Related to Our Business and Industry
3 unchanged sentences
Rather, reserves represent an estimate of what we expect the ultimate settlement and administration of claims will cost us, and our ultimate liability may be greater or less than current reserves.
−Removed: These estimates are based on our assessment of facts and circumstances then known, as well as estimates of future trends in claim severity, claim frequency, judicial theories of liability and other factors.
+Added: These estimates are
+Added: based on our assessment of facts and circumstances then known, as well as estimates of future trends in claim severity, claim frequency, judicial theories of liability and other factors.
These variables are affected by both internal and external events that could increase our exposure to losses, including changes in actuarial projections, claims handling procedures, inflation, climate change, economic and judicial trends, and legislative changes.
1 unchanged sentence
In the insurance and reinsurance industry, there is always the risk that reserves may prove inadequate, and actual results always differ from our reserve estimates.
−Removed: It is possible for insurance and reinsurance companies to underestimate the cost of
+Added: It is possible for insurance and reinsurance companies to underestimate the cost of claims.
Our estimates could prove to be low, and this underestimation could have a material adverse effect on our financial strength.
−Removed: For example, in our Casualty Reinsurance segment, we experienced adverse development on the reserves for losses and loss adjustment expenses of:
+Added: For example, in our subsidiary JRG Re, we experienced adverse development on the reserves for losses and loss adjustment expenses of:
$35.5 million for the calendar year ended December 31, 2023;
−Removed: $137.6 million for the calendar year ended December 31, 2021 primarily in underwriting years 2014 through 2018;
−Removed: and $37.8 million in 2020 primarily in accident years 2014 through 2018.
+Added: $13.4 million for the calendar year ended December 31, 2022;
+Added: and $137.6 million for the calendar year ended December 31, 2021 primarily in underwriting years 2014 through 2018.
In addition, for the commercial auto business in our Excess and Surplus Lines segment, we experienced adverse development on the reserves for losses and loss adjustment expenses of:
+Added: $8.7 million for the calendar year ended December 31, 2023 principally relating to 2021 and prior accident years;
$8.9 million for the calendar year ended December 31, 2022 principally relating to the 2020 and prior accident years;
−Removed: $200.1 million for the calendar year ended December 31, 2021 principally relating to the 2019 and prior accident years for Rasier and its affiliates;
−Removed: and $91.4 million in 2020 principally relating to the 2018 and prior accident years for Rasier and its affiliates.
+Added: and $200.1 million for the calendar year ended December 31, 2021 principally relating to the 2019 and prior accident years for Rasier and its affiliates.
+Added: Our Core E&S business (excluding commercial auto) in the Excess and Surplus Lines segment experienced adverse development on the reserves for losses and loss adjustment expenses of $23.9 million for the calendar year ended December 31, 2023 principally relating to the 2020 and prior accident years.
We cannot assure you that we will not have further adverse development in our business.
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• The necessary reliance on the ceding company for information regarding claims.
−Removed: If any of our insurance or reinsurance reserves should prove to be inadequate for the reasons discussed above, or for any other reason, we will be required to increase reserves, resulting in a reduction in our net income and shareholders’ equity in the period in which the deficiency is identified.
+Added: If any of our insurance or reinsurance reserves should prove to be inadequate for the reasons discussed above, or for any other reason, we will be required to increase reserves, resulting in a reduction in our net income and shareholders’ equity in the
+Added: period in which the deficiency is identified.
Future loss experience substantially in excess of established reserves could also have a material adverse effect on future earnings and liquidity and financial rating, which could affect our ability to attract business, our cost of capital and our ability to retain or hire qualified personnel.
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A decline in our financial strength rating may result in a reduction of new or renewal business.
−Removed: Companies, insurers and reinsurance brokers use ratings from independent ratings agencies as an important means of assessing the financial strength and quality of reinsurers.
+Added: Companies, insurers and reinsurance brokers use ratings from independent ratings agencies as an important means of assessing the financial strength and quality of insurers and reinsurers.
Best has assigned a financial strength rating of “A-” (Excellent), which is the fourth highest of 13 ratings that A.M.
−Removed: Best issues, to each of James River Insurance, James River Casualty, Falls Lake Fire and Casualty, Falls Lake National, Stonewood Insurance, and JRG Re .
+Added: Best issues, to each of James River Insurance, James River Casualty, Falls Lake Fire and Casualty, Falls Lake National and Stonewood Insurance .
+Added: On December 20, 2023, A.M.
+Added: Best announced that it revised the outlook on our financial strength rating from stable to negative on such entities.
+Added: Also, on December 20, 2023, A.M.
+Added: Best announced that it downgraded the financial strength rating of JRG Re from “A-” (Excellent) with a stable outlook to "B++" (good) with a negative outlook.
+Added: Best announced that the ratings actions follow our announcements in November 2023 that we identified a material weakness in our internal control over financial reporting, that we entered into an agreement to sell JRG Re, and that we are exploring strategic alternatives for the Company.
+Added: Best indicated that the negative outlook reflects the uncertainty that the actions will have on our organization, and reflects the execution risk associated with some of these initiatives.
+Added: Best further announced that the ratings actions on JRG Re was based upon A.M.
+Added: Best's view that JRG Re is less integral to our strategic, operational and financial objectives, as a result of our determination to suspend underwriting in our former casualty reinsurance segment, and our agreement to sell JRG Re at 75% of the book value, valued at September 30, 2023.
Best assigns ratings that are intended to provide an independent opinion of an insurance or reinsurance company’s ability to meet its obligations to policyholders and such ratings are not an evaluation directed to investors.
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A downgrade of our rating could cause our current and future brokers and agents, retail brokers and insureds to choose other, more highly-rated competitors.
−Removed: A downgrade of this rating could also increase the cost or reduce the availability of reinsurance to us, increase collateral required for our assumed reinsurance business, trigger termination of assumed and/or ceded reinsurance contracts, trigger termination rights in certain of our agreements with MGAs in our Specialty Admitted segment, or result in a default under our credit facilities.
+Added: A downgrade of this rating could also increase the cost or reduce the availability of reinsurance to us, increase collateral required for our assumed reinsurance business, trigger termination of assumed and/or ceded reinsurance contracts, trigger termination rights in certain of our agreements with MGAs in our Specialty Admitted segment, or, as occurred upon the downgrade by A.M.
+Added: Best of JRG Re described above, result in a default under our credit facilities.
See the Risk Factor “Our credit agreements contain a number of financial and other covenants, the breach of any of which could result in acceleration of payment of amounts due under our credit facilities.”
1 unchanged sentence
It is possible that such reviews of us may result in adverse ratings consequences, which could have a material adverse effect on our financial condition and results of operations.
−Removed: A downgrade below “A-” or withdrawal of any rating could severely limit or prevent us from writing new and renewal insurance or reinsurance contracts.
+Added: A downgrade below “A-” or withdrawal of any rating could severely limit or prevent us from writing new and renewal insurance contracts.
See also “Item 7.
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Our competitors may offer more favorable compensation and/or permanent remote work arrangements to our key management or employees to incentivize them to leave our Company, or alternatively, to make it more difficult for us to recruit and hire new employees.
−Removed: Additionally, the transition to remote work by employees has allowed competitors that are located in different states or parts of the country to solicit our employees without requiring their relocation.
−Removed: Although we have employment agreements with the members of our senior management team, which include certain post-employment restrictions on engaging in businesses competitive with the Company, we do not have employment agreements with our senior underwriters or claims personnel.
−Removed: Our inability to attract and
−Removed: retain qualified personnel and the loss of services of key personnel could have a material adverse effect on our financial condition and results of operations.
−Removed: Additionally, if members of management or a significant number of our employees should become unavailable due to an outbreak of COVID-19 or other illness among them, whether due to work in an office environment or otherwise, our operations could be disrupted, which may have a detrimental impact on our business.
+Added: Further, the transition to remote work by employees has allowed competitors that are located in different states or parts of the country to solicit our employees without requiring their relocation.
+Added: Although we have employment agreements with most members of our senior management team, which include certain post-employment restrictions on engaging in businesses competitive with the Company, we do not have employment agreements with our senior underwriters or claims personnel.
+Added: The November 2023 announcement that we are evaluating strategic alternatives caused uncertainty among our employees regarding our future operations or employment needs, which may limit our ability to retain or hire qualified personnel, and may contribute to the unplanned loss of highly skilled employees through attrition.
+Added: Our inability to attract and retain qualified personnel and the loss of services of key personnel could have a material adverse effect on our financial condition and results of operations.
Adverse economic factors, including recession, inflation, periods of high unemployment or lower economic activity could result in the sale of fewer policies than expected or an increase in frequency or severity of claims and premium defaults or both, which, in turn, could affect our growth and profitability.
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These outcomes would reduce our underwriting profit to the extent these factors are not reflected in the rates we charge.
−Removed: We underwrite a significant portion of our insurance in (i) the Excess and Surplus Lines segment in Florida, California, Texas and New York, (ii) the fronting and program business of the Specialty Admitted Insurance segment in California, Michigan, New York, Texas, and Georgia, and (iii) individual risk workers’ compensation business of the Specialty Admitted Insurance segment in North Carolina, Georgia, Missouri, and Virginia.
+Added: We underwrite a significant portion of our insurance in (i) the Excess and Surplus Lines segment in Florida, California, Texas and New York, and (ii) the fronting and program business of the Specialty Admitted Insurance segment in California, Texas, North Carolina, Florida, and New York.
Any economic downturn or reduced business activities in any such state, or other states where we conduct business, could have a material adverse effect on our financial condition and results of operations.
−Removed: If the current high inflationary environment persists over an extended period of time, it could adversely affect the adequacy of our reserves by increasing average loss costs over time, negatively impact the values of our investments and our investment returns, and may increase our compensation expenses.
+Added: Higher than expected inflation could adversely affect the adequacy of our reserves by increasing average loss costs over time, negatively impact the values of our investments and our investment returns, and may increase our compensation expenses.
We distribute products through a select group of brokers and agents, several of which account for a significant portion of our business, and such relationships may not continue, or if they do continue, the relationship may not be on favorable terms to us.
3 unchanged sentences
• the Specialty Admitted Insurance segment conducted business with two agencies that produced $259.6 million in gross written premiums, representing 51.8% of that segment’s gross written premiums for the year.
−Removed: • the Casualty Reinsurance segment conducted business with three brokers that generated $62.5 million of gross written premiums, or 73.4% of that segment’s gross written premiums for the year.
The relationship with any of these brokers or agents may not continue.
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Where necessary, we review the financial condition of potential new brokers and agents before we agree to transact business with them.
−Removed: Although failures by brokers and agents to remit premiums have not been
−Removed: material to date, there may be instances where brokers and agents collect premiums but do not remit them to us and we may be required under applicable law to provide the coverage set forth in the policy despite the absence of premiums.
+Added: Although failures by brokers and agents to remit premiums have not been material to date, there may be instances where brokers and agents collect premiums but do not remit them to us and we may be required under applicable law to provide the coverage set forth in the policy despite the absence of premiums.
Because the possibility of these events depends in large part upon the financial condition and internal operations of our brokers and agents (which in most cases is not public information), we are not able to quantify the exposure presented by this risk.
1 unchanged sentence
We rely on a select group of customers for a significant portion of our business, and the loss or termination of our relationship with any of these customers, or a material reduction in business with any of these customers, could materially adversely affect our rate of growth, results of operations and financial condition.
−Removed: Our two largest customers accounted for approximately $120.9 million (8.1%) and $110.9 million (7.4%) of our consolidated gross written premium in 2022.
−Removed: No insured generated 10.0% or more of consolidated gross written premiums for 2022.
−Removed: Our largest customer in 2021 accounted for approximately $124.1 million of our gross written premium, representing 8.2% of our gross written premiums in 2021.
−Removed: No insured generated 10.0% or more of consolidated gross written premiums for 2021.
+Added: Our largest customer, an agent for the Specialty Admitted Insurance segment, accounted for approximately $163.1 million (10.8%) of our consolidated gross written premium from continuing operations in 2023.
+Added: No other insured generated 10.0% or more of consolidated gross written premiums from continuing operations for 2023.
+Added: Our two largest customers in 2022, both agents for the Specialty Admitted Insurance segment, accounted for approximately $120.9 million (8.6%) and $110.9 million (7.9%) of our consolidated gross written premium from continuing operations in 2022.
+Added: No insured generated 10.0% or more of consolidated gross written premiums from continuing operations for 2022.
+Added: Our largest customer in 2021, an agent for the Specialty Admitted Insurance segment, accounted for approximately $124.1 million of our gross written premium, representing 9.4% of our consolidated gross written premium from continuing operations in 2021.
+Added: No insured generated 10.0% or more of consolidated gross written premiums from continuing operations for 2021.
The loss or termination of our relationship with these customers, or another significant customer, or a material reduction in business with any such party, could materially adversely affect our rate of growth, results of operations and financial condition.
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Some exclusions relate to risks that we cannot in turn exclude from the policies we write due to business or regulatory constraints.
−Removed: In addition, reinsurers are imposing terms, such as lower per occurrence and aggregate limits, and more exclusions, limiting the protection provided under the reinsurance contract.
+Added: In addition, reinsurers are imposing terms, such as lower per occurrence and aggregate limits, and
+Added: more exclusions, limiting the protection provided under the reinsurance contract.
As a result, we, like other direct insurance companies, write insurance policies which to some extent do not have the benefit of reinsurance protection.
9 unchanged sentences
Additionally, prepaid reinsurance premiums ceded to three reinsurers at December 31, 2023 was $100.2 million in the aggregate, or 34.2% of the total balance of prepaid reinsurance premiums.
−Removed: In addition to reinsurance purchased to manage our ongoing business, we have entered into two retroactive reinsurance transactions on legacy books of business:
−Removed: the first, a loss portfolio transfer reinsurance transaction on our legacy commercial auto lines business in our Excess & Surplus Lines segment (the “Commercial Auto LPT”), and the second, the Casualty Re LPT.
−Removed: At December 31, 2022, reinsurance recoverables on the Commercial Auto
−Removed: LPT were $145.2 million (including $132.0 million of unpaid recoverables and $13.2 million of paid recoverables), and reinsurance recoverables on the Casualty Re LPT were $244.7 million.
+Added: In addition to reinsurance purchased to manage our ongoing business, we have two retroactive reinsurance arrangements on a legacy books of business:
+Added: the first, a loss portfolio transfer reinsurance transaction on our legacy commercial auto lines business in our Excess & Surplus Lines segment (the “Commercial Auto LPT”), and the second, a loss portfolio transfer retrocession agreement entered into by JRG Re on February 23, 2022 (the "Casualty Re LPT").
+Added: At December 31, 2023, reinsurance recoverables on the Commercial Auto LPT were $84.5 million (including $78.1 million of unpaid recoverables and $6.4 million of paid recoverables), and reinsurance recoverables on the Casualty Re LPT were $221.7 million.
At December 31, 2023, all of our material reinsurance recoverable amounts are from companies with A.M.
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While these exclusions and limitations help us assess and reduce our loss exposure and help eliminate known exposures to certain risks, it is possible that a court or regulatory authority could nullify or void an exclusion or legislation could be enacted modifying or barring the use of such endorsements and limitations.
−Removed: For example, in response to the COVID-19 pandemic, there have been proposals by federal and state lawmakers to retroactively amend business interruption insurance policies to cover claims related to COVID-19 when such insurance policies otherwise would exclude such risks.
−Removed: Further, a number of states have instituted, and other states are considering instituting, changes designed to effectively expand workers’ compensation coverage by creating presumptions of compensability of claims for certain types of workers.
These types of governmental actions could result in higher than anticipated losses and loss adjustment expenses, which could have a material adverse effect on our financial condition or results of operations.
−Removed: In some instances, these changes may not become apparent until sometime after we have issued insurance policies that are affected by the changes.
+Added: In some instances, these changes may not become
+Added: apparent until sometime after we have issued insurance policies that are affected by the changes.
As a result, the full extent of liability under our insurance contracts may not be known for many years after a contract is issued.
10 unchanged sentences
Additionally, a large-scale pandemic or terrorist act could have a material effect on sales, profitability, competitiveness, marketability of product offerings, liquidity and operating results.
−Removed: See “ The global coronavirus outbreak could harm business and results of operations of the Company ” risk factor herein.
−Removed: The global coronavirus outbreak could harm business and results of operations of the Company.
−Removed: In December 2019, a coronavirus (COVID-19) outbreak was reported in China, and, in March 2020, the World Health Organization declared it a pandemic.
−Removed: COVID-19 variants continue to spread throughout the United States and Bermuda, the countries in which the Company operates.
−Removed: In response, many governments, including Bermuda, the state and local governments of the States of Virginia and North Carolina, and governments in many other states in which our policyholders are located, instituted emergency restrictions that substantially limited the operation of non-essential businesses and the activities of individuals.
−Removed: Many jurisdictions imposed, eased, and reinstated emergency restrictions at various points during the pandemic in response to the spread of COVID-19 variants.
−Removed: These restrictions may have resulted in significant adverse effects on our policyholders and many different types of small and mid-sized businesses within the Company’s client base, particularly those in the retail, hospitality and food and beverage industries, among many others.
−Removed: Our workers' compensation line of business includes claimants experiencing "long-COVID", the ultimate cost of which is difficult to predict.
−Removed: In addition, we have observed indirect impacts of COVID-19 in our workers' compensation line of business, such as greater frequency and severity of workplace injuries resulting from inexperienced workers or distracted driving.
−Removed: The ultimate effect and severity of COVID-19 on the economy, our policyholders and our claimants is not known.
−Removed: The effect of COVID-19 and related events, including those described above and those not yet known, could have a negative effect on the stock price, business prospects, financial condition and results of operations of the Company, including as a result of quarantines, market volatility, market downturns, actions of lawmakers and regulators, changes in consumer behavior, business closures, deterioration in the credit quality of policyholders or the inability of policyholders to pay their premium and deductible obligations to the Company, and deterioration in the credit quality of reinsurers or insurance entities with which we have a fronting arrangement or the inability of reinsurers or the insurance entities for which we are fronting to pay their obligations to the Company .
−Removed: The impact of the pandemic may also exacerbate the other risks described in this “Risk Factors” section.
−Removed: The occurrence of any of the events described in these risk factors could have a material adverse effect on the Company’s financial condition and results of operations.
+Added: For example, the COVID-19 pandemic presented, and other future pandemics could present, inflation, supply chain disruptions, labor shortages, backlogs in the court system, responsive regulatory actions and mandates, financial market disruptions, and economic downturn, among other things.
The effect of emerging claim and coverage issues on our business is uncertain.
8 unchanged sentences
• Social inflation trends, including higher and more frequent claims, more favorable judgments and legislated increases.
+Added: In addition, the passage of new legislation designed to expand the right to sue, to remove limitations on recovery, to deem by statute the existence of a covered occurrence, to extend or eliminate the statutes of limitations or otherwise to repeal or weaken tort reforms could have a material and adverse effect on our results of operations and/or financial position.
Our investment portfolio is subject to significant market and credit risks, which could result in a material adverse impact on our financial condition or results of operations.
5 unchanged sentences
Quantitative and Qualitative Disclosures About Market Risk.” Prior to 2022, interest rates had been at or near historic lows, limiting yields on fixed income investments and negatively impacting investment income.
−Removed: Increases in interest rates during 2022, while generating higher investment yields, led to declines in the fair values of our fixed income securities, influenced by the duration of our fixed income investments and the extent of interest rate increases.
+Added: Increases in interest rates during 2022 and for much of 2023, while generating higher investment yields, led to declines in the fair values of our fixed income securities, influenced by
+Added: the duration of our fixed income investments and the extent of interest rate increases.
For example, for the year ended December 31, 2022, we experienced unrealized losses on fixed maturity investments of $193.0 million, which were recognized in other comprehensive loss.
+Added: During 2023, the fair values of our fixed maturity securities recovered some of the unrealized losses with signs of inflation easing and optimism about future Federal Reserve interest rate cuts.
+Added: The $99.3 million reduction in accumulated other comprehensive loss in the year ended December 31, 2023 reflects the increase in fair values of our fixed maturity securities as well as $53.2 million of losses recognized on JRG Re's fixed maturities.
+Added: The Company entered into a definitive agreement on November 8, 2023 to sell JRG Re.
+Added: The sale is expected to close in the first quarter of 2024 and the Company no longer has the intent or ability to hold securities in an unrealized loss position until a recovery of their fair value could occur.
Some fixed income securities have call or prepayment options, which represent possible reinvestment risk in declining rate environments.
10 unchanged sentences
As of December 31, 2023, we held equity investments of $8.4 million in non-public limited liability companies that have invested in renewable energy investments.
−Removed: These investments were sponsored and are managed by an entity for which two former directors serve as officers.
We invested in the equity of these projects because we anticipate earning attractive risk-adjusted returns from these investments.
41 unchanged sentences
To date, the following states have either adopted the NAIC Insurance Data Security Model Law or similar laws that govern the cybersecurity and data protection practices of insurers, insurance agents, and other licensed entities registered under state insurance laws :
−Removed: Alabama, California, Connecticut, Delaware, Indiana, Iowa, Louisiana, Maine, Michigan, Minnesota, Mississippi, New Hampshire, New York, North Dakota, Ohio, South Carolina, Tennessee, Virginia and Wisconsin.
+Added: Alabama, California, Connecticut, Delaware, Indiana, Iowa, Louisiana, Maine, Michigan, Minnesota, Mississippi, New Hampshire, New York, North Dakota, Ohio, Pennsylvania, South Carolina, Tennessee, Virginia and Wisconsin.
It is not yet known whether, and to what extent, other state legislatures or insurance regulators where we operate will enact the NAIC Insurance Data Security Model Law in whole or in part, or in a modified form.
8 unchanged sentences
In addition, if we fail to comply with these regulations, we may be subject to penalties, including fines and suspensions, which may materially adversely affect our financial condition and results of operations.
−Removed: Our admitted insurance and reinsurance subsidiaries are subject to extensive regulation, primarily by California (the domiciliary state for Falls Lake Fire and Casualty Company), Ohio (the domiciliary state for James River Insurance and Falls
−Removed: Lake National), North Carolina (the domiciliary state for Stonewood Insurance), Virginia (the domiciliary state for James River Casualty), Bermuda (the domicile of JRG Re), and to a lesser degree, the other jurisdictions in the United States in which we operate.
+Added: Our admitted insurance and reinsurance subsidiaries are subject to extensive regulation, primarily by California (the domiciliary state for Falls Lake Fire and Casualty Company), Ohio (the domiciliary state for James River Insurance, James
+Added: River Casualty, and Falls Lake National), North Carolina (the domiciliary state for Stonewood Insurance), Bermuda (the domicile of JRG Re), and to a lesser degree, the other jurisdictions in the United States in which we operate.
Most insurance regulations are designed to protect the interests of insurance policyholders, as opposed to the interests of shareholders.
27 unchanged sentences
The NAIC Amendments must be adopted by a state legislature and such state’s insurance regulator in order to be effective in that state.
−Removed: Each of California, North Carolina, Ohio and Virginia, the states in which our U.S.
+Added: Each of California, North Carolina and Ohio, the states in which our U.S.
insurance subsidiaries are domiciled, adopted the NAIC Amendments, including the enterprise risk report requirement.
3 unchanged sentences
The ORSA Model Act must be adopted by a state legislature in order to be effective in that state.
−Removed: California, North Carolina, Ohio and Virginia, the states in which our U.S.
+Added: Each of California, North Carolina and Ohio, the states in which our U.S.
insurance subsidiaries are domiciled, adopted the ORSA Model Act and require an ORSA filing.
20 unchanged sentences
Although we are continually monitoring these agents and administrators, our monitoring efforts may not be adequate.
−Removed: The insurance and reinsurance business is historically cyclical, and we may experience periods with excess underwriting capacity and unfavorable premium rates, which could materially adversely affect our business.
−Removed: Historically, insurers and reinsurers have experienced significant fluctuations in operating results due to competition, frequency and severity of catastrophic events, levels of capacity, adverse trends in litigation, regulatory constraints, general economic conditions and other factors.
+Added: The insurance business is historically cyclical, and we may experience periods with excess underwriting capacity and unfavorable premium rates, which could materially adversely affect our business.
+Added: Historically, insurers have experienced significant fluctuations in operating results due to competition, frequency and severity of catastrophic events, levels of capacity, adverse trends in litigation, regulatory constraints, general economic conditions and other factors.
We have experienced these types of fluctuations since the Company’s inception.
−Removed: The supply of insurance and reinsurance is related to prevailing prices, the level of insured losses and the level of capital available to the industry that, in turn, may fluctuate in response to changes in rates of return on investments being earned in the insurance and reinsurance industry.
−Removed: As a result, the insurance and reinsurance business historically has been a cyclical industry characterized by periods of intense price competition due to excessive underwriting capacity as well as periods when shortages of capacity increased premium levels.
−Removed: Demand for insurance and reinsurance depends on numerous factors, including the frequency and severity of catastrophic events, levels of capacity, the introduction of new capital providers, general economic conditions and underwriting results of primary insurers.
−Removed: All of these factors fluctuate and may contribute to price declines generally in the insurance and reinsurance industry.
+Added: The supply of insurance is related to prevailing prices, the level of insured losses and the level of capital available to the industry that, in turn, may fluctuate in response to changes in rates of return on investments being earned in the insurance industry.
+Added: As a result, the insurance business historically has been a cyclical industry characterized by periods of intense price competition due to excessive underwriting capacity as well as periods when shortages of capacity increased premium levels.
+Added: Demand for insurance depends on numerous factors, including the frequency and severity of catastrophic events, levels of capacity, the introduction of new capital providers, general economic conditions and underwriting results of primary insurers.
+Added: All of these factors fluctuate and may contribute to price declines generally in the insurance industry.
We cannot predict with certainty whether market conditions will improve, remain constant or deteriorate.
−Removed: Negative market conditions may impair our ability to underwrite insurance and reinsurance at rates we consider appropriate and commensurate relative to the risk assumed.
−Removed: If we cannot underwrite insurance or reinsurance at appropriate rates, our ability to transact
−Removed: business will be materially adversely affected.
+Added: Negative market conditions may impair our ability to underwrite insurance at rates we consider appropriate and commensurate relative to the risk assumed.
+Added: If we cannot underwrite insurance at appropriate rates, our ability to transact business will be materially adversely affected.
Any of these factors could lead to a material adverse effect on our business, financial condition and results of operations.
28 unchanged sentences
In the May Equity Offering, we announced the offering of 6,497,500 shares at $31.00 per share the day after our shares had a closing market price equal to $46.50.
−Removed: Additionally, on March 1, 2022 we issued 150,000 Series A Perpetual Cumulative Convertible Preferred Shares, par value $0.00125 per share (the "Series A Preferred Shares"), for an aggregate purchase price of $150 million, primarily to protect our balance sheet after experiencing $115.0 million of adverse reserve development in the Casualty Reinsurance segment in the fourth quarter of 2021, primarily related to underwriting years 2014 through 2018.
−Removed: The Series A Preferred Shares, among other things, have the right to receive a payment on account of the distribution of assets on any
−Removed: voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company before any payment may be made to holders of any other class or series of capital shares, pay dividends to the security holders at the initial rate of 7% of their liquidation preference of $1,000 per share per annum, include restrictions that may limit our ability to pay dividends to common shareholders and may not be redeemed at our election.
+Added: Additionally, on March 1, 2022 we issued 150,000 Series A Perpetual Cumulative Convertible Preferred Shares, par value $0.00125 per share (the "Series A Preferred Shares"), for an aggregate purchase price of $150 million, primarily to protect our balance sheet after experiencing $115.0 million of adverse reserve development in our former casualty reinsurance segment in the fourth quarter of 2021.
+Added: The Series A Preferred Shares, among other things, have the right to receive a payment on account of the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company before any payment may be made to holders of any other class or series of capital shares, pay dividends to the security holders at the initial rate of 7% of their liquidation preference of $1,000 per share per annum, include restrictions
+Added: that may limit our ability to pay dividends to common shareholders and may not be redeemed at our election.
See also " The Series A Preferred Shares have rights, preferences and privileges that are not held by, and are preferential to the rights of, our common shareholders, which could adversely affect our liquidity and financial condition" and " The amount of dividends that we may pay to our common shareholders is subject to restrictions pursuant to the terms of the Series A Preferred Shares, and we cannot assure you that we will declare or pay dividends on our common shares in the future."
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Best not lower than an A-.
−Removed: A breach of any of these covenants could result in acceleration of our obligations to repay our outstanding indebtedness under such agreement if we are unable to obtain a waiver or amendment from our lenders, and otherwise could impair our ability to borrow funds or result in higher borrowing costs.
+Added: At December 31, 2023, we were in default of the financial strength rating covenant due to the downgrade of JRG Re by A.M.
+Added: Best on December 20, 2023 from "A-" (Excellent) to "B++" (good), which default has been waived by our lenders until March 1, 2025.
+Added: See the Risk Factor " A decline in the financial strength rating may result in a reduction of new or renewal business " above.
+Added: This breach or any other breach of any of the covenants could result in acceleration of our obligations to repay our outstanding indebtedness under such agreement if we are unable to obtain a waiver or amendment from our lenders, and otherwise could impair our ability to borrow funds or result in higher borrowing costs.
We operate in a highly competitive environment and we may not continue to be able to compete effectively against larger or more well-established business rivals.
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In addition, it may be difficult or prohibitively expensive for us to implement technology systems and processes that are competitive with the systems and processes of these larger companies.
−Removed: In particular, competition in the insurance and reinsurance industry is based on many factors, including price of coverage, the general reputation and perceived financial strength of the company, relationships with brokers, terms and conditions of products offered, ratings assigned by independent rating agencies, speed of claims payment and reputation, and the experience and reputation of the members of our underwriting team in the particular lines of insurance and reinsurance we seek to underwrite.
+Added: In particular, competition in the insurance industry is based on many factors, including price of coverage, the general reputation and perceived financial strength of the company, relationships with brokers, terms and conditions of products offered, ratings assigned by independent rating agencies, speed of claims payment and reputation, and the experience and reputation of the members of our underwriting team in the particular lines of insurance we seek to underwrite.
See also “Item 1.
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If the wholesale distribution model were to be significantly altered by changes in the way E&S lines risks are marketed, including, without limitation, through use of the internet, it could have a material adverse effect on our premiums, underwriting results and profits.
−Removed: There is no assurance that we will be able to continue to compete successfully in the insurance or reinsurance markets.
−Removed: Increased competition in these markets could result in a change in the supply and/or demand for insurance or reinsurance, affect our ability to price our products at risk-adequate rates, affect our ability to retain business with existing customers, or underwrite new business on favorable terms.
+Added: There is no assurance that we will be able to continue to compete successfully in the insurance market.
+Added: Increased competition in the market could result in a change in the supply and/or demand for insurance, affect our ability to price our products at risk-adequate rates, affect our ability to retain business with existing customers, or underwrite new business on favorable terms.
If this increased competition so limits our ability to transact business, our operating results could be materially adversely affected.
If we are unable to keep pace with the technological advancements in the insurance industry, our ability to compete effectively could be impaired.
−Removed: We are committed to developing and maintaining information technology systems that will allow our insurance subsidiaries to compete effectively.
−Removed: There can be no assurance that the development of current technology for future use will not result in our being competitively disadvantaged, especially with those carriers that have greater resources.
−Removed: If we are unable to keep pace with the advancements being made in technology, our ability to compete with other insurance companies who have advanced technological capabilities will be negatively affected.
+Added: We are committed to developing and maintaining information technology systems and data analytics that will allow our insurance subsidiaries to compete effectively.
+Added: There can be no assurance that the development of current technology or data analytics for future use will not result in our being competitively disadvantaged, especially with those carriers that have greater resources.
+Added: If we are unable to keep pace with the advancements being made in technology and data analytics, our ability to compete with other insurance companies who have advanced technological or data analytics capabilities will be negatively affected.
Further, if we are unable to effectively execute and update or replace our key legacy technology systems as they become obsolete or as emerging technology renders them competitively inefficient, our competitive position and our cost structure could be adversely affected.
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In our financial forecasting process, we make assumptions about the renewal of our prior year’s contracts.
−Removed: The insurance and reinsurance industries have historically been cyclical businesses with intense competition, often based on price.
+Added: The insurance industry has historically been a cyclical business with intense competition, often based on price.
If actual renewals do not meet expectations or if we choose not to write a renewal (including in connection with the early termination of insurance policies), our premiums written in future years and our future operations could be materially adversely affected.
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If work permits are not obtained or are not renewed for our key employees, we would lose their services, which could materially affect our business.
−Removed: If California, North Carolina, Ohio or Virginia significantly increases the assessments our insurance companies are required to pay, our financial condition and results of operations will suffer.
−Removed: Our insurance companies are subject to assessments in California (the domiciliary state for Falls Lake Fire and Casualty Company), North Carolina (the domiciliary state for Stonewood Insurance), Ohio (the domiciliary state for James River Insurance and Falls Lake National) and Virginia (the domiciliary state for James River Casualty), for various purposes, including the provision of funds necessary to fund the operations of the various insurance departments and the state funds that pay covered claims under certain policies written by impaired, insolvent or failed insurance companies.
+Added: If California, North Carolina Ohio or any other state in which our insurance companies are admitted significantly increases the assessments our insurance companies are required to pay, our financial condition and results of operations will suffer.
+Added: Our insurance companies are subject to assessments in California (the domiciliary state for Falls Lake Fire and Casualty Company), North Carolina (the domiciliary state for Stonewood Insurance), Ohio (the domiciliary state for James River Insurance, James River Casualty and Falls Lake National) and other states in which our insurance companies may be admitted, for various purposes, including the provision of funds necessary to fund the operations of the various insurance departments and the state funds that pay covered claims under certain policies written by impaired, insolvent or failed insurance companies.
These assessments are generally set based on an insurer’s percentage of the total premiums written in the insurer’s state within a particular line of business.
−Removed: As our U.S.-based insurance subsidiaries grow, our share of any assessments may increase.
+Added: As our insurance subsidiaries grow, our share of any assessments may increase.
We cannot predict with certainty the amount of future assessments because they depend on factors outside our control, such as insolvencies of other insurance companies.
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Historically, our Excess and Surplus Lines and Specialty Admitted Insurance segments handled all claims using employed staff.
−Removed: As we have entered new lines of business, we now use third-party claims administrators and contract employees to administer claims subject to the supervision of our employed staff.
−Removed: It is possible that these contract employees and third-party
−Removed: claims administrators may achieve less desirable results on claims than has historically been the case for our internal staff, which could result in significantly higher losses and loss adjustment expenses in those lines of business.
+Added: As we have entered new lines of business, we now use third-party claims administrators and contract employees to
+Added: administer claims subject to the supervision of our employed staff.
+Added: It is possible that these contract employees and third-party claims administrators may achieve less desirable results on claims than has historically been the case for our internal staff, which could result in significantly higher losses and loss adjustment expenses in those lines of business.
Risks Related to Taxation
−Removed: The ongoing effect of the 2017 Tax Act may have a significant impact on the Company.
+Added: Changes in tax law may have a significant impact on the Company.
The Tax Act, enacted on December 22, 2017, introduced significant changes to the Internal Revenue Code of 1986, as amended (the “Code”).
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federal income tax consequences to you considering your particular circumstances.
−Removed: Base Erosion and Anti-Abuse Tax .
The Tax Act’s BEAT provision imposes a minimum tax on “applicable taxpayers,” which are generally corporations that are part of a group with at least $500 million of applicable annual gross receipts and that make certain payments to related foreign persons, including payments that are deductible for U.S.
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The applicability of BEAT depends on a number of factors and the extent to which we may be subject to BEAT in future periods as a result of changes in interpretations, as well as additional regulatory guidance that may be issued, is currently unknown.
+Added: The Inflation Reduction Act of 2022 (the “IRA”) contains a number of tax-related provisions, including a 15% corporate alternative minimum tax imposed on certain corporations that meet an income-based test, as well as a 1% nondeductible excise tax on certain stock repurchases.
+Added: It is unclear how these provisions of the IRA will be applied and what impact the IRA will have on our tax liability.
+Added: We will continue to evaluate the IRA’s impact as further information becomes available.
+Added: In recent years, the Organization for Economic Co-operation and Development (“OECD”), with the support of the G20, has developed proposals to address perceived base erosion and profit shifting (“BEPS”).
+Added: BEPS generally refers to tax planning strategies that exploit gaps and mismatches in tax rules to artificially shift profits to locations with low or no tax and little or no economic activity, for the purpose of reducing a multinational group’s aggregate tax liability.
+Added: In 2021, the OECD/G20 Inclusive Framework on BEPS published a statement updating and finalizing the key components of a “two pillar” plan for global tax reform, as agreed among a number of countries across the globe.
+Added: Pillar I addresses tax nexus and the allocation of profits for tax purposes.
+Added: Under Pillar II, a global minimum tax at the rate of 15% would be imposed on certain companies whose revenues exceed a threshold.
+Added: In December 2022, the member states of the European Union unanimously voted to adopt the OECD’s minimum tax rules and phase them into national law, and in February 2023 the OECD released technical guidance on the global minimum tax which was agreed by consensus of the BEPS 2.0 (Pillars I and II) signatory jurisdictions.
+Added: Under the European Union’s minimum tax directive, member states are to adopt domestic legislation implementing the minimum tax rules effective for periods beginning on or after December 31, 2023, with the “under-taxed profit rule” to take effect for periods beginning on or after December 31, 2024.
+Added: Legislatures in multiple countries outside of the European Union have also drafted legislation to implement the OECD’s minimum tax proposal.
+Added: As a result of these developments, the tax laws of certain countries in which we and our affiliates do business could change on a prospective or retroactive basis, and any such changes, including the adoption of the global minimum tax rules, could subject us to additional taxes and costs for tax compliance.
persons who own our shares may be subject to U.S.
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However, we cannot assure you that this will continue to be the case.
−Removed: Additionally, certain recently released proposed regulations would expand the scope of related person insurance income to potentially include all of the insurance income any of our non-U.S.
+Added: Additionally, certain proposed regulations would expand the scope of related person insurance income to potentially include all of the insurance income any of our non-U.S.
operating companies earn from reinsuring affiliates if such companies are majority owned (directly, indirectly or by application of certain constructive ownership rules) by U.S.
It is not certain whether any of these proposed regulations will be adopted in their proposed form or what changes or clarifications might ultimately be made thereto or whether any such changes, as well as any interpretation or application of the related person insurance income rules by the IRS, the courts, or otherwise, might have retroactive effect.
−Removed: Consequently, we cannot assure you that a person who is a direct or indirect U.S.
+Added: Consequently, we cannot assure you that a person who is a direct or
+Added: indirect U.S.
shareholder will not be required to include amounts in its income in respect of related person insurance income in any taxable year.
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The Company and JRG Re are each incorporated under the laws of Bermuda and James River UK is incorporated under the laws of England and Wales.
−Removed: Carolina Re is incorporated under the laws of Bermuda, but is taxed as a U.S.
−Removed: domestic corporation as a result of an election under Section 953(d) of the Code.
In general, a corporation organized under the laws of a foreign country or U.S.
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tax-exempt organizations who own our shares may recognize unrelated business taxable income.
−Removed: tax-exempt organization may recognize unrelated business taxable income if a portion of our subpart F insurance income is allocated to it.
+Added: tax-exempt organization may recognize unrelated business taxable income if a portion of any subpart F insurance income we may have is allocated to it.
In general, subpart F insurance income will be allocated to a tax-exempt organization owning (or treated as owning) our shares if we are a CFC as discussed above and it is a U.S.
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The United States has entered into intergovernmental agreements between the United States and Bermuda and between the United States and the United Kingdom (the “IGAs”), which potentially modify the FATCA withholding regime described above with respect to us and our common shares.
−Removed: There can be no certainty as to whether the Company, Carolina Re or JRG Re will be treated as a FFI under FATCA.
+Added: There can be no certainty as to whether the Company or JRG Re will be treated as a FFI under FATCA.
We strongly urge you to consult your own tax advisor regarding the potential impact of FATCA, the IGAs and any non-U.S.
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income taxation.
−Removed: Apart from enactment of the Tax Act, other legislative proposals or administrative or judicial developments could also result in an increase in the amount of U.S.
+Added: Legislative proposals or administrative or judicial developments could result in an increase in the amount of U.S.
tax payable by us or by an owner of our shares or reduce the attractiveness of our products.
Any such developments could materially adversely affect our results of operations.
−Removed: The Tax Act, other tax laws and interpretations thereof, including with respect to whether a company is engaged in a U.S.
+Added: Tax laws and interpretations thereof, including with respect to whether a company is engaged in a U.S.
trade or business, is a CFC, has related party insurance income, is a PFIC, or is subject to BEAT, are subject to change, possibly on a retroactive basis.
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The IRS is permitted to reallocate or recharacterize income, deductions or certain other items, and to make any other adjustment, to reflect the proper amount, source or character of the taxable income in respect of payments among related parties to reflect an arm’s-length transaction.
−Removed: In the recent past, we have had in place intercompany loans from our U.S.
+Added: In the past, we have had in place intercompany loans from our U.S.
subsidiaries to our parent company and intercompany reinsurance agreements among consolidated entities.
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persons is generally eligible for long-term capital gain rates.
−Removed: While the Tax Act did not modify these rules, there has been proposed legislation before the U.S.
−Removed: Senate and House of Representatives that would exclude shareholders of certain
−Removed: foreign corporations from this advantageous tax treatment.
+Added: While neither the Tax Act nor the IRA modified these rules, there has been proposed legislation before the U.S.
+Added: Senate and House of Representatives that would exclude shareholders of certain foreign corporations from this advantageous tax treatment.
If such legislation were to become law, non-corporate U.S.
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through a permanent establishment in the U.K., and therefore such entities could become subject to U.K.
−Removed: We may become subject to additional global taxes, including taxes in Bermuda after March 31, 2035, which may have a material adverse effect on our results of operations and your investment.
−Removed: The Bermuda Minister of Finance, under the Exempted Undertakings Tax Protection Act 1966 of Bermuda, as amended, has given us an assurance that if any legislation is enacted in Bermuda that would impose tax computed on profits or income, or computed on any capital asset, gain or appreciation, or any tax in the nature of estate duty or inheritance tax, then the imposition of any such tax will not be applicable to us or any of our operations, shares, debentures or other obligations until March 31, 2035, except insofar as such tax applies to persons ordinarily resident in Bermuda or to any taxes payable by us in respect of real property owned or leased by us in Bermuda.
−Removed: We cannot assure you that we will not be subject to any Bermuda tax after March 31, 2035.
−Removed: Further, the Organization for Economic Co-operation and Development is coordinating a global effort to reform certain aspects of the international tax system.
+Added: We may become subject to taxes in Bermuda, which may have a material adverse effect on our results of operations and your investment.
+Added: The Organization for Economic Co-operation and Development is coordinating a global effort to reform certain aspects of the international tax system.
This effort included the December 2021 release of model rules for a 15% global minimum tax regime.
If these model rules are partially or fully implemented globally, we could be subject to additional taxes and costs for tax compliance.
+Added: In response to this initiative, Bermuda has recently introduced the Corporate Income Tax Act 2023 ("CIT Act") which will be fully effective for tax years beginning on or after January 1, 2025.
+Added: Entities subject to tax under the CIT Act are the Bermuda constituent entities of multi-national groups.
+Added: A multi-national group is defined under the CIT Act as a group with entities in more than one jurisdiction with consolidated revenues of at least €750 million for two of the four previous fiscal years.
+Added: If Bermuda constituent entities of a multi-national group are subject to tax under the CIT Act, such tax is charged at a rate of 15 per cent of the net income of such constituent entities (as determined in accordance with the CIT Act, including after adjusting for any relevant foreign tax credits applicable to the Bermuda constituent entities).
+Added: No tax is chargeable under the CIT Act until tax years starting on or after January 1, 2025.
+Added: Provided that the Company is not part of a multi-national group, it is not currently expected to be subject to tax under the CIT Act and, under current Bermuda law, there is no other income, corporate or profits tax or withholding tax, capital gains tax or capital transfer tax payable by the Company.
+Added: The Company has obtained from the Minister of Finance under The Exempted Undertaking Tax Protection Act of 1966, as amended, ("EUTP Act") as assurance that, in the event that Bermuda enacts legislation imposing tax computed on profits, income, any capital asset, gain or appreciation, or any tax in the nature of estate duty or inheritance, then the imposition of any such tax shall not be applicable to the Company or to any of its operations or its shares, debentures or other obligations, until March 31, 2035.
+Added: The Company could be subject to taxes in Bermuda after that date.
+Added: This assurance is subject to the proviso that it is not to be construed so as to prevent the application of any tax or duty to such persons as are ordinarily resident in Bermuda or to prevent the application of any tax payable in accordance with the provisions of the Land Tax Act 1967 or
+Added: otherwise payable in relation to any property leased to the Company.
+Added: In the event the Company is subject to tax under the CIT Act, this would supersede the assurance received from the Minister of Finance under the EUTP Act.
Risks Related to Ownership of Our Common Shares
−Removed: The price of our common shares may fluctuate significantly and you could lose all or part of your investment.
−Removed: Volatility in the market price of our common shares may prevent you from being able to sell your common shares at or above the price you paid for your common shares.
−Removed: The market price for our common shares could fluctuate significantly for various reasons, including, without limitation:
+Added: The trading price of our common shares has been, and may continue to be, volatile, and you could lose all or part of your investment.
+Added: Volatility in the market price of our common shares may prevent you from being able to sell your common shares at or above the price you paid.
+Added: The market price for our common shares has, and may continue to, fluctuate significantly for various reasons, including, without limitation:
• our operating and financial performance and prospects;
2 unchanged sentences
• market reaction to adverse loss reserve development;
+Added: • market reaction to any strategic alternative transaction that we enter into, rumors regarding the same, or our determination to terminate the review of strategic alternatives without entering into a transaction;
• the loss of one or more individually large clients, and its impact on our growth rate, profitability and financial condition;
20 unchanged sentences
• adverse resolution of litigation against us.
−Removed: In addition, stock markets, including the NASDAQ Stock Market (the market on which our common shares are traded), have experienced price and volume fluctuations that have affected and continue to affect the market prices of equity securities issued by many companies, including companies in our industry.
+Added: In addition, stock markets, including the NASDAQ Stock Market (the market on which our common shares are traded), have experienced price and volume fluctuations that have affected and continue to affect the market prices of equity securities
+Added: issued by many companies, including companies in our industry.
In the past, some companies that have had volatile market prices for their securities have been subject to class action or derivative lawsuits.
The filing of a lawsuit against us, regardless of the outcome, could have a negative effect on our business, as it could result in substantial legal costs and a diversion of management’s attention and resources.
−Removed: The Company had such a lawsuit filed against it following our May 2021 equity offering.
−Removed: The filing of this lawsuit against us, or any future filings of a lawsuit against us, regardless of the outcome, could have a negative effect on our business, as it could result in substantial legal costs and a diversion of management’s attention and resources.
+Added: The Company had such a lawsuit filed against it following our May 2021 equity offering and another regarding the restatement of our financial statements in November 2023.
+Added: The filing of these lawsuits against us, or any future filings of a lawsuit against us, regardless of the outcome, could have a negative effect on our business, as it could result in substantial legal costs and a diversion of management’s attention and resources.
Legal Proceedings” for more information.
1 unchanged sentence
These market and industry factors may materially reduce the market price of our common shares, regardless of our operating performance.
−Removed: The holders of the Series A Convertible Preferred Shares are entitled to vote up to 9.9% of the aggregate voting power of our then-outstanding common shares on an as converted basis or of the outstanding voting securities of the Company, and have rights to approve certain actions.
+Added: We cannot assure you that our evaluation of strategic alternatives will result in any particular outcome, and the perceived uncertainties related to the Company could adversely affect our business and our shareholders.
+Added: On November 10, 2023, we announced that our board of directors initiated an exploration of strategic alternatives for the Company, including consideration of a wide range of options including, among other things, a potential sale, merger, or other strategic transaction.
+Added: We have not set a deadline or definitive timetable for the completion of the strategic review process, nor have we made any decisions relating to any strategic alternative at this time.
+Added: No assurance can be given as to the outcome of the process, including whether the process will result in any particular outcome.
+Added: Any potential transaction may be dependent on a number of factors that may be beyond our control, for example, market conditions, industry trends or acceptable terms.
+Added: The process of reviewing potential strategic alternatives may be time consuming, distracting and disruptive to our business operations.
+Added: In addition, given that the exploration of strategic alternatives may eventually result in a potential sale, merger or other strategic transaction, any perceived uncertainty regarding our future operations or employment needs may limit our ability to retain or hire qualified personnel and may contribute to unplanned loss of highly skilled employees through attrition, and result in the loss of brokers, agents or customers with whom we do business.
+Added: We may ultimately determine that no transaction is in the best interest of our shareholders.
+Added: We do not intend to comment further regarding the review of strategic alternatives until we determine disclosure is necessary or advisable.
+Added: Accordingly, speculation regarding any developments associated with our review of strategic alternatives and any perceived uncertainties related to the Company or its business could cause the price of our shares to fluctuate significantly.
+Added: The sale of JRG Re is subject to conditions to closing over which we do not have control, and a portion of the consideration is comprised of a pre-closing dividend that is subject to the availability of unencumbered assets at JRG Re.
+Added: The sale of JRG Re announced on November 8, 2023 (the “Transaction”) is subject to a number of closing conditions and there can be no assurance that these conditions will be satisfied on the timeline we expect or at all.
+Added: The Transaction may also be terminated in certain circumstances, including termination (A) by either the Company or the Buyer if the Transaction is not completed by June 3, 2024 (subject to one two-month extension in the event closing has not occurred solely because one or more required governmental approvals have not been obtained), or (B) by the Company if (i) all closing conditions have been met, (ii) the Company is ready, willing and able to consummate the closing, and (iii) the Buyer fails to complete the closing solely as a result of the failure to obtain debt financing or alternate financing that is sufficient to finance the consummation of the Transaction.
+Added: In addition, a portion of the consideration pursuant to the Transaction is comprised of a $139 million dividend or return of capital or surplus by JRG Re to the Company prior to the closing date of the Transaction, which dividend or return of capital or surplus is subject to the availability of unencumbered assets at JRG Re on the closing date.
+Added: A number of factors may impact the availability of unencumbered assets at JRG Re prior to the closing date, including collateral requirements of JRG Re’s cedents.
+Added: While the Transaction is pending or if the Transaction is not completed, we may be subject to several risks including:
+Added: • The current trading price of our common stock may reflect a market assumption that the Transaction will be completed, and may decline if the Transaction is not completed;
+Added: • We have incurred and expect to incur significant transaction costs in connection with the Transaction whether or not the Transaction is completed;
+Added: • Under the definitive agreements for the Transaction, we are subject to certain restrictions on the conduct of JRG Re’s business prior to the closing date of the Transaction, which restrictions could adversely affect our ability to realize certain business strategies or take advantage of certain business opportunities;
+Added: • The negative perception of investors, vendors, trading partners, or employees if the Transaction is not completed;
+Added: • The attention of our management may be directed toward the completion of the pending Transaction and related matters, and their focus may be diverted from our day-to-day business operations;
+Added: • Our inability to cure the financial strength rating default under our credit agreements prior to the expiration of the waiver of such default provided by our lenders (see " Our credit agreements contain financial and other covenants, the breach of any of which could result in accelerations of payment of amounts due under our credit facilities ").
+Added: Any of these risks could have a material adverse effect on our business, financial condition, results of operations and prospects.
+Added: Litigation and legal proceedings against us or our subsidiaries could have a material adverse effect on our business, financial condition and/or results of operations.
+Added: We or our subsidiaries are or may be named as defendants in various legal actions, including commercial matters and litigation regarding insurance claims which arise in the ordinary course of business.
+Added: In addition, the Company is involved from time to time in legal actions which seek extra-contractual damages, punitive damages or penalties, including claims alleging bad faith in handling of insurance claims.
+Added: On July 9, 2021, a purported class action lawsuit was filed in the US District Court, Eastern District of Virginia on behalf of Employees’ Retirement Fund of the City of Fort Worth against the Company and certain of its present and former officers, alleging claims under Section 10(b) of the Securities Exchange Act of 1934.
+Added: On December 7, 2023 we reached an agreement in principle to settle this purported securities class action lawsuit and on December 22, 2023 the parties submitted the stipulation of settlement to the Court for approval.
+Added: On January 26, 2024 the Court issued its preliminary approval order of the settlement and scheduled a final settlement hearing for May 24, 2024.
+Added: A final, non-appealable closure of the litigation could take several months.
+Added: Legal Proceedings” for more information.
+Added: On November 13, 2023, a purported class action lawsuit was filed in the US District Court, Southern District of New York, on behalf of Paul Glantz against the Company and certain of its officers, asserting claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
+Added: Glantz alleges that he purchased James River common stock between August 7, 2023 and November 7, 2023, inclusive, that the Company failed to disclose that it lacked effective internal controls regarding the recognition of reinstatement premiums for reinsurance causing the Company to overstate its net income, and that, as a result, Plaintiff suffered unspecified damages.
+Added: Legal Proceedings” for more information.
+Added: We believe that the outcomes of these matters and other presently pending matters, individually and in the aggregate, will not have a material adverse effect on our consolidated financial position.
+Added: However, the outcomes of lawsuits cannot be predicted and, if determined adversely, could require us to pay significant damage amounts or to change aspects of our operations, which could have a material adverse effect on our financial results.
+Added: In the future we may identify additional material weaknesses or otherwise fail to maintain an effective system of internal controls, which may result in material misstatements of our consolidated financial statements or cause us to fail to meet our periodic reporting obligations.
+Added: The occurrence of any such event may have a material adverse effect on our business and common share price.
+Added: We previously identified a material weakness in our internal control over financial reporting.
+Added: A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis.
+Added: As previously disclosed, in preparing our unaudited consolidated financial statements for the three and nine months ended September 30, 2023, the Company became aware that the unaudited consolidated financial statements for the six months ended June 30, 2023 contained material misstatements related to unrecorded reinstatement premium as more fully described in Note 1 to the condensed consolidated financial statements of the 10-Q/A filed with the SEC on November 14, 2023.
+Added: Management of the Company concluded that because the controls to evaluate the accounting and disclosure of the reinstatement premium did not operate effectively, and resulted in the failure to detect the misstatement, the deficiencies were a material weakness in the Company's internal control over financial reporting.
+Added: Our internal controls did not detect the error related to the unrecorded reinstatement premium during the period ending June 30, 2023.
+Added: This control deficiency resulted in the restatement of the Company's unaudited consolidated financial statements contained in its Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 and if it was not remediated, could have resulted in a material misstatement to future annual or interim consolidated financial statements that would not be prevented or detected.
+Added: Accordingly, management determined that this control deficiency constituted a material weakness.
+Added: To address this material weakness, we took actions designed to improve our internal control over financial reporting and remediate the control deficiencies that led to the material weakness, including (i) implementing additional review procedures
+Added: within our accounting department, (ii) implementing additional training of accounting personnel, and (iii) enhancing our existing process and internal control documentation and financial statement preparation process, specifically including updates to accounting policies for reinstatement premium, to ensure completion of financial reporting and proper accounting in accordance with U.S.
+Added: As of the year ended December 31, 2023, we concluded that our remediation efforts have been successful and that the previously identified material weakness in internal control over financial reporting has been remediated.
+Added: However, while the material weakness has been remediated, we continue to seek improvements to enhance our control environment and to strengthen our internal controls to provide reasonable assurance that our financial statements continue to be fairly stated in all material respects .
+Added: If we discover additional weaknesses in our system of internal financial and accounting controls and procedures, our consolidated financial statements may contain material misstatements, and we could be required to restate our financial results.
+Added: Our internal control over financial reporting will not prevent or detect all errors and all fraud.
+Added: A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met.
+Added: Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected.
+Added: Any failure to implement and maintain effective internal control over financial reporting could cause investors to lose confidence in our reported financial and other information, adversely impact our stock price, cause us to incur increased costs to remediate any deficiencies, and attract regulatory scrutiny or additional lawsuits that could be costly to resolve and distract management’s attention, limit our ability to access the capital markets or cause our stock to be delisted from The Nasdaq Global Select Market.
+Added: Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.
+Added: The holders of the Series A Convertible Preferred Shares are entitled to vote up to 9.9% of the aggregate voting power of our then-outstanding common shares on an as converted basis or of the outstanding voting securities of the Company, and have rights to approve certain actions, which may allow such holders to exercise significant influence over matters requiring shareholder approval.
Additionally, GPC Partners may exercise influence over us through their ability to designate a nominee for election to our board of directors.
The holders of the Series A Preferred Shares are entitled to vote up to 9.9% of the aggregate voting power of the then-outstanding common shares on an as converted basis or of the outstanding voting securities of the Company with the holders of our common shares on all matters submitted for a vote of holders of common shares (voting together as one class).
+Added: As a result, such holders may be able to exercise significant influence over all matters requiring shareholder approval.
Pursuant to the Investment Agreement dated February 24, 2022 (the “Investment Agreement”) by and between the Company and GPC Partners Investments (Thames) LP (“GPC Partners”), an affiliate of Gallatin Point Capital LLC, GPC Partners has the right to designate one candidate for nomination for election to our board of directors for so long as GPC Partners and its Permitted Transferees (as defined in the Investment Agreement) continue to beneficially own Series A Preferred Shares and/or common shares issued or issuable upon conversion of such Series A Preferred Shares that represent in the aggregate at least 50% of the number of common shares beneficially owned by the Investors, on an as-converted basis, as of the issuance date of the Series A Preferred Shares.
−Removed: Notwithstanding the fact that all directors will be subject to fiduciary duties to us and to applicable law, the interests of the director designated by GPC Partners may differ from the interests of our security holders as a whole or of our other directors.
+Added: Notwithstanding the fact that all directors will be subject to fiduciary duties to us and to applicable law, the interests of the director designated by GPC Partners for nomination may differ from the interests of our security holders as a whole or of our other directors.
Additionally, holders of the Series A Preferred Shares are entitled to a separate class vote with respect to amendments to the Company’s organizational documents that have an adverse effect on the Series A Preferred Shares, including authorizations or issuances by the Company of securities that are senior to or pari passu with the Series A Preferred Shares, increases or decreases in the number of authorized Series A Preferred Shares, or the issuance of any additional Series A Preferred Shares other than in payment of dividends on the outstanding Series A Preferred Shares.
As a result, the holders of the Series A Preferred Shares may have the ability to influence the outcome of certain matters affecting our governance and capitalization.
−Removed: The conversion of the Series A Preferred Shares into common shares would dilute the ownership of common shareholders and may adversely affect the market price of our common shares.
+Added: The conversion of the Series A Preferred Shares into common shares would dilute the ownership of common shareholders and could adversely affect the market price of our common shares.
The conversion of our Series A Preferred Shares into common shares or payment of dividends on the Series A Preferred Shares in common shares would dilute the ownership interest of existing holders of our common shares.
Further, common shares issuable upon conversion of the Series A Preferred Shares, or as payment of dividends on the Series A Preferred Shares, may be sold by GPC Partners or its Permitted Transferees after the second anniversary of the Series A Preferred Shares issuance date.
−Removed: Any sale of common shares following conversion of the Series A Preferred Shares or payment of dividends on the Series A Preferred Shares in common shares, would increase the number of common shares available for public trading, and may adversely affect prevailing market prices of our common shares.
+Added: Any sale of common shares following conversion of the Series A Preferred Shares or payment of dividends on
+Added: the Series A Preferred Shares in common shares, would increase the number of common shares available for public trading, and may adversely affect prevailing market prices of our common shares.
The Series A Preferred Shares have rights, preferences and privileges that are not held by, and are preferential to the rights of, our common shareholders, which could adversely affect our liquidity and financial condition.
The holders of our Series A Preferred Shares have the right to receive a payment on account of the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company before any payment may be made to holders of any other class or series of capital shares.
−Removed: In addition, dividends on the Series A Preferred Shares accrue and are cumulative at the rate of 7.0% of the $1,000 per share liquidation preference per annum, paid in cash, in-kind in common shares or in Series A Preferred Shares, at our election.
−Removed: On the five-year anniversary of the issuance date, and each five-year anniversary thereafter, the dividend rate on the liquidation preference will reset to a rate equal to the five-year U.S.
+Added: In addition, dividends on the Series A Preferred Shares accrue and are cumulative at the initial rate of 7.0% of the $1,000 per share liquidation preference per annum, paid in cash, in-kind in common shares or in Series A Preferred Shares, at our election.
+Added: On March 1, 2027 (the five-year anniversary of the issuance date of the Series A Preferred Shares), and each five-year anniversary thereafter, the dividend rate on the liquidation preference will reset to a rate equal to the five-year U.S.
treasury rate (calculated as set forth in the Certificate of Designations designating the Series A Preferred Shares (the “Certificate of Designations”)) plus 5.2%.
17 unchanged sentences
See also “Item 5.
−Removed: Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases Of Equity Securities - Dividends.” We cannot assure you that we will continue to pay dividends in the future, or that the amount of any such dividend will not decline from prior dividends we have paid.
+Added: Market For Registrant’s Common Equity, Related Stockholder
+Added: Matters and Issuer Purchases Of Equity Securities - Dividends.” We cannot assure you that we will continue to pay dividends in the future, or that the amount of any such dividend will not decline from prior dividends we have paid.
We depend upon dividends and distributions from our subsidiaries, and we may be unable to distribute dividends to our shareholders to the extent we do not receive dividends from our subsidiaries.
7 unchanged sentences
insurance subsidiaries limit the aggregate amount of dividends or other distributions that they may declare or pay within any 12 month period without advance regulatory approval.
−Removed: In Ohio, the domiciliary state of Falls Lake National and James River Insurance, this limitation is the greater of statutory net income for the preceding calendar year or 10% of the statutory surplus at the end of the preceding calendar year, provided that such dividends may only be paid out of earned surplus of each of the companies, without obtaining regulatory approval.
−Removed: In each of North Carolina and Virginia, the domiciliary states of Stonewood Insurance and James River Casualty, respectively, this limitation is the greater of statutory net income excluding realized capital gains for the preceding calendar year or 10% of the statutory surplus at the end of the preceding calendar year, provided that such dividends may only be paid out of unassigned surplus without obtaining regulatory approval.
+Added: In Ohio, the domiciliary state of Falls Lake National, James River Insurance and James River Casualty, this limitation is the greater of statutory net income for the preceding calendar year or 10% of the statutory surplus at the end of the preceding calendar year, provided that such dividends may only be paid out of earned surplus of each of the companies, without obtaining regulatory approval.
+Added: In North Carolina, the domiciliary state of Stonewood Insurance, respectively, this limitation is the greater of statutory net income excluding realized capital gains for the preceding calendar year or 10% of the statutory surplus at the end of the preceding calendar year, provided that such dividends may only be paid out of unassigned surplus without obtaining regulatory approval.
In California, the domiciliary state of Falls Lake Fire and Casualty Compan y, this limitation is the greater of statutory net income for the preceding calendar year or 10% of the statutory surplus at the end of the preceding calendar year, provided that such dividends may only be paid out of unassigned surplus without obtaining regulatory approval.
53 unchanged sentences
Generally, the duties of directors and officers of a Bermuda company are owed to the company only.
−Removed: Shareholders of
−Removed: Bermuda companies typically do not have rights to take action against directors or officers of the company and may only do so in limited circumstances.
+Added: Shareholders of Bermuda companies typically do not have rights to take action against directors or officers of the company and may only do so in limited circumstances.
Class actions are not available under Bermuda law.
22 unchanged sentences
If any such shareholder or proposed acquiror does not provide such information, or if our board of directors has reason to believe that any certification or other information provided pursuant to any such request is inaccurate or incomplete, our board of directors may decline to register any transfer or to effect any issuance or purchase of our common shares to which such request is related.
−Removed: In addition, the insurance holding company laws and regulations of the states in which our insurance companies are domiciled generally require that, before a person can acquire direct or indirect control of an insurer domiciled in the state, and
−Removed: in some cases prior to divesting its control, prior written approval must be obtained from the insurer’s domiciliary state insurance regulator.
+Added: In addition, the insurance holding company laws and regulations of the states in which our insurance companies are domiciled generally require that, before a person can acquire direct or indirect control of an insurer domiciled in the state, and in some cases prior to divesting its control, prior written approval must be obtained from the insurer’s domiciliary state insurance regulator.
These laws may discourage potential acquisition proposals and may delay, deter or prevent an investment in or a change of control involving us, or one or more of our regulated subsidiaries, including transactions that our management and some or all of shareholders might consider desirable.
28 unchanged sentences
Our technologies, systems and networks may become the target of cyber-attacks or information security breaches that could result in the unauthorized release, gathering, monitoring, misuse, loss or destruction of our or our insureds’, reinsureds’ or claimants’ confidential, proprietary and other information, or otherwise disrupt our or our insureds’, reinsureds’, claimants’ or other third parties’ business operations, which in turn may result in legal claims, regulatory scrutiny and liability, reputational damage, the incurrence of costs to eliminate or mitigate further exposure and the loss of customers.
−Removed: This risk may be heightened as a result of continued remote work in response to the ongoing COVID-19 pandemic.
−Removed: Although to date we have
−Removed: not experienced any material losses relating to cyber-attacks or other information security breaches, there can be no assurance that we will not suffer such losses in the future.
+Added: This risk may be heightened as a result of the current remote and hybrid work environment.
+Added: Although to date we have not experienced any material losses relating to cyber-attacks or other information security breaches, there can be no assurance that we will not suffer such losses in the future.
While we make efforts to maintain the security and integrity of our information technology networks and related systems, and we have implemented various measures and an incident response protocol to manage the risk of, or respond to, a security breach or disruption, there can be no assurance that our security efforts and measures will be effective or that attempted security breaches or disruptions would not be successful or damaging.
−Removed: In addition, our results of operations could be materially adversely affected if one of our business partners, such as brokers, general agents, third party claims administrators or vendors, experiences disruptions to their operating systems and/or a cybersecurity breach, as such disruption or breach could reduce submission flow, policy issuance, claims settlement, and/or make us more vulnerable to a cybersecurity breach ourselves.
+Added: In addition, our results of operations could be materially adversely affected if one of our business partners, such as brokers, general agents, third party claims administrators or vendors, experiences disruptions to their operating systems and/or a cybersecurity breach, as such disruption
+Added: or breach could reduce submission flow, policy issuance, claims settlement, and/or make us more vulnerable to a cybersecurity breach ourselves.
Our risk and exposure to these matters remains heightened because of, among other things, the evolving nature of these threats and the outsourcing of some of our business operations.
9 unchanged sentences
We may not be able to manage our growth or other changes effectively.
−Removed: We intend to continue to grow our business, may attempt to enter new business lines, and may also face changes from market, legal or regulatory developments.
+Added: We intend to continue to grow our excess and surplus and specialty admitted businesses, may attempt to enter new business lines, and may also face changes from market, legal or regulatory developments.
Such growth, new business lines, and changes could require additional capital, systems development and skilled personnel.
1 unchanged sentence
The failure to manage our growth and other changes effectively could have a material adverse effect on our business, financial condition and results of operations.
−Removed: Litigation and legal proceedings against us or our subsidiaries could have a material adverse effect on our business, financial condition and/or results of operations.
−Removed: We or our subsidiaries are or may be named as defendants in various legal actions, including commercial matters and litigation regarding insurance claims which arise in the ordinary course of business.
−Removed: In addition, the Company is involved from time to time in legal actions which seek extra-contractual damages, punitive damages or penalties, including claims alleging bad faith in handling of insurance claims.
−Removed: On July 9, 2021, a purported class action lawsuit was filed in the US District Court, Eastern District of Virginia on behalf of Employees’ Retirement Fund of the City of Fort Worth (“Plaintiff”) against the Company and certain of its present and former officers (together, “Defendants”), alleging claims under Section 10(b) of the Securities Exchange Act of 1934.
−Removed: Legal Proceedings” for more information.
−Removed: We believe that the outcome of this matter and other presently pending matters, individually and in the aggregate, will not have a material adverse effect on our consolidated financial position.
−Removed: However, the outcomes of lawsuits cannot be predicted and, if determined adversely, could require us to pay significant damage amounts or to change aspects of our operations, which could have a material adverse effect on our financial results.
Changes in accounting practices and future pronouncements may materially affect our reported financial results.
−Removed: Developments in accounting practices may require us to incur considerable additional expenses to comply, particularly if we are required to prepare information relating to prior periods for comparative purposes or to apply the new requirements
−Removed: retroactively.
+Added: Developments in accounting practices may require us to incur considerable additional expenses to comply, particularly if we are required to prepare information relating to prior periods for comparative purposes or to apply the new requirements retroactively.
The impact of changes in current accounting practices and future pronouncements cannot be predicted but may affect the calculation of net income, shareholders’ equity and other relevant financial statement line items.
9 unchanged sentences
Further, we cannot assure that future changes to SAP or components of SAP or the grant of permitted accounting practices to our competitors will not have a negative impact on us.
−Removed: Failure to maintain effective internal controls in accordance with Sarbanes-Oxley could have a material adverse effect on our business and common share price.
−Removed: As a public company with SEC reporting obligations, we are required to document and test our internal control procedures to satisfy the requirements of Section 404(b) of Sarbanes-Oxley Act of 2002, as amended ("Sarbanes-Oxley"), which require annual assessments by management of the effectiveness of our internal control over financial reporting.
−Removed: During the course of our assessment, we may identify deficiencies that we are unable to remediate in a timely manner.
−Removed: Testing and maintaining our internal control over financial reporting may also divert management’s attention from other matters that are important to the operation of our business.
−Removed: We may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404(b) of Sarbanes-Oxley.
−Removed: If we conclude that our internal control over financial reporting is not effective, we cannot be certain as to the timing of completion of our evaluation, testing and remediation actions or its effect on our operations.
−Removed: Moreover, any material weaknesses or other deficiencies in our internal control over financial reporting may impede our ability to file timely and accurate reports with the SEC.
−Removed: Any of the above could cause investors to lose confidence in our reported financial information or our common share listing on the NASDAQ Stock Market to be suspended or terminated, which could have a negative effect on the trading price of our common shares.
−Removed: UNRESOLVED STAFF COMMENTS
−Removed: Not applicable.
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.