MHLA filing — read by section

Item 1. Financial Statements

Item 1. Financial Statements 
 MAIDEN HOLDINGS, LTD. 
 CONDENSED CONSOLIDATED BALANCE SHEETS 
 (in thousands of U.S. dollars, except share and per share data) 
 
 September 30, 
2019 
 
 December 31, 
2018 
 
 ASSETS 
 
 (Unaudited) 
 
 (Audited) 
 
 Investments: 
 
 Fixed maturities, available-for-sale, at fair value (amortized cost 2019 - $2,040,852; 2018 - $3,109,980) 
 
 $ 
 2,059,560 
 
 $ 
 3,051,568 
 
 Fixed maturities, held-to-maturity, at amortized cost (fair value 2018 - $998,012) 
 
 — 
 
 1,015,681 
 
 Other investments, at fair value 
 
 30,412 
 
 23,716 
 
 Total investments 
 
 2,089,972 
 
 4,090,965 
 
 Cash and cash equivalents 
 
 39,755 
 
 200,841 
 
 Restricted cash and cash equivalents 
 
 33,171 
 
 130,148 
 
 Accrued investment income 
 
 19,139 
 
 27,824 
 
 Reinsurance balances receivable, net (includes $30,211 and $38,278 from related parties in 2019 and 2018, respectively) 
 
 46,291 
 
 67,997 
 
 Reinsurance recoverable on unpaid losses 
 
 615,481 
 
 71,901 
 
 Loan to related party 
 
 167,975 
 
 167,975 
 
 Deferred commission and other acquisition expenses (includes $80,390 and $370,037 from related parties in 2019 and 2018, respectively) 
 
 90,367 
 
 388,442 
 
 Funds withheld receivable (includes $630,701 from related parties in 2019) 
 
 678,775 
 
 27,039 
 
 Other assets 
 
 11,029 
 
 10,700 
 
 Assets held for sale 
 
 — 
 
 103,628 
 
 Total assets 
 
 $ 
 3,791,955 
 
 $ 
 5,287,460 
 
 LIABILITIES 
 
 Reserve for loss and loss adjustment expenses (includes $2,456,559 and $2,950,388 from related parties in 2019 and 2018, respectively) 
 
 $ 
 2,625,858 
 
 $ 
 3,126,134 
 
 Unearned premiums (includes $226,828 and $1,135,913 from related parties in 2019 and 2018, respectively) 
 
 261,130 
 
 1,200,419 
 
 Deferred gain on retroactive reinsurance 
 
 104,542 
 
 — 
 
 Accrued expenses and other liabilities 
 
 12,416 
 
 66,183 
 
 Senior notes - principal amount 
 
 262,500 
 
 262,500 
 
 Less: unamortized debt issuance costs 
 
 7,646 
 
 7,806 
 
 Senior notes, net 
 
 254,854 
 
 254,694 
 
 Liabilities held for sale 
 
 — 
 
 85,114 
 
 Total liabilities 
 
 3,258,800 
 
 4,732,544 
 
 Commitments and Contingencies 
 
 EQUITY 
 
 Preference shares 
 
 465,000 
 
 465,000 
 
 Common shares ($0.01 par value; 88,124,360 and 87,938,537 shares issued in 2019 and 2018, respectively; 83,111,180 and 82,948,577 shares outstanding in 2019 and 2018, respectively) 
 
 881 
 
 879 
 
 Additional paid-in capital 
 
 751,138 
 
 749,418 
 
 Accumulated other comprehensive income (loss) 
 
 21,936 
 
 ( 65,616 
 ) 
 
 Accumulated deficit 
 
 ( 674,267 
 ) 
 
 ( 563,891 
 ) 
 
 Treasury shares, at cost (5,013,180 and 4,989,960 shares in 2019 and 2018, respectivel y) 
 
 ( 31,533 
 ) 
 
 ( 31,515 
 ) 
 
 Total Maiden shareholders’ equity 
 
 533,155 
 
 554,275 
 
 Noncontrolling interests in subsidiaries 
 
 — 
 
 641 
 
 Total equity 
 
 533,155 
 
 554,916 
 
 Total liabilities and equity 
 
 $ 
 3,791,955 
 
 $ 
 5,287,460 
 
 See accompanying notes to the unaudited Condensed Consolidated Financial Statements. 
 
 3 

 MAIDEN HOLDINGS, LTD. 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) 
 (in thousands of U.S. dollars, except per share data) 
 
 For the Three Months Ended September 30, 
 
 For the Nine Months Ended September 30, 
 
 2019 
 
 2018 
 
 2019 
 
 2018 
 
 Revenues 
 
 Gross premiums written 
 
 $ 
 35,844 
 
 $ 
 484,493 
 
 $ 
 ( 523,178 
 ) 
 
 $ 
 1,629,347 
 
 Net premiums written 
 
 $ 
 35,944 
 
 $ 
 482,806 
 
 $ 
 ( 525,995 
 ) 
 
 $ 
 1,626,485 
 
 Change in unearned premiums 
 
 58,954 
 
 37,271 
 
 937,981 
 
 ( 85,207 
 ) 
 
 Net premiums earned 
 
 94,898 
 
 520,077 
 
 411,986 
 
 1,541,278 
 
 Other insurance revenue 
 
 554 
 
 1,870 
 
 2,058 
 
 7,629 
 
 Net investment income 
 
 13,223 
 
 34,419 
 
 76,367 
 
 101,548 
 
 Net realized gains (losses) on investment 
 
 12,700 
 
 ( 225 
 ) 
 
 25,685 
 
 ( 282 
 ) 
 
 Total other-than-temporary impairment losses 
 
 ( 165 
 ) 
 
 ( 479 
 ) 
 
 ( 165 
 ) 
 
 ( 479 
 ) 
 
 Total revenues 
 
 121,210 
 
 555,662 
 
 515,931 
 
 1,649,694 
 
 Expenses 
 
 Net loss and loss adjustment expenses 
 
 140,860 
 
 600,296 
 
 415,110 
 
 1,323,503 
 
 Commission and other acquisition expenses 
 
 32,763 
 
 167,618 
 
 152,036 
 
 497,026 
 
 General and administrative expenses 
 
 8,546 
 
 19,207 
 
 37,334 
 
 49,738 
 
 Interest and amortization expenses 
 
 4,831 
 
 4,829 
 
 14,490 
 
 14,487 
 
 Foreign exchange and other (gains) losses 
 
 ( 7,827 
 ) 
 
 552 
 
 ( 14,013 
 ) 
 
 ( 1,862 
 ) 
 
 Total expenses 
 
 179,173 
 
 792,502 
 
 604,957 
 
 1,882,892 
 
 Loss from continuing operations before income taxes 
 
 ( 57,963 
 ) 
 
 ( 236,840 
 ) 
 
 ( 89,026 
 ) 
 
 ( 233,198 
 ) 
 
 Less: income tax expense (benefit) 
 
 87 
 
 3,573 
 
 ( 977 
 ) 
 
 402 
 
 Loss from continuing operations 
 
 ( 58,050 
 ) 
 
 ( 240,413 
 ) 
 
 ( 88,049 
 ) 
 
 ( 233,600 
 ) 
 
 Loss from discontinued operations, net of income tax 
 
 ( 277 
 ) 
 
 ( 59,819 
 ) 
 
 ( 22,327 
 ) 
 
 ( 41,609 
 ) 
 
 Net loss 
 
 ( 58,327 
 ) 
 
 ( 300,232 
 ) 
 
 ( 110,376 
 ) 
 
 ( 275,209 
 ) 
 
 Net income from continuing operations attributable to noncontrolling interests 
 
 — 
 
 ( 62 
 ) 
 
 — 
 
 ( 180 
 ) 
 
 Net loss attributable to Maiden 
 
 ( 58,327 
 ) 
 
 ( 300,294 
 ) 
 
 ( 110,376 
 ) 
 
 ( 275,389 
 ) 
 
 Dividends on preference shares 
 
 — 
 
 ( 8,545 
 ) 
 
 — 
 
 ( 25,636 
 ) 
 
 Net loss attributable to Maiden common shareholders 
 
 $ 
 ( 58,327 
 ) 
 
 $ 
 ( 308,839 
 ) 
 
 $ 
 ( 110,376 
 ) 
 
 $ 
 ( 301,025 
 ) 
 
 Basic and diluted loss from continuing operations per share attributable to Maiden common shareholders 
 
 $ 
 ( 0.70 
 ) 
 
 $ 
 ( 3.00 
 ) 
 
 $ 
 ( 1.06 
 ) 
 
 $ 
 ( 3.12 
 ) 
 
 Basic and diluted loss from discontinued operations per share attributable to Maiden common shareholders 
 
 — 
 
 ( 0.72 
 ) 
 
 ( 0.27 
 ) 
 
 ( 0.50 
 ) 
 
 Basic and diluted loss per share attributable to Maiden common shareholders 
 
 $ 
 ( 0.70 
 ) 
 
 $ 
 ( 3.72 
 ) 
 
 $ 
 ( 1.33 
 ) 
 
 $ 
 ( 3.62 
 ) 
 
 Weighted average number of common shares - basic and diluted 
 
 83,092,085 
 
 83,089,172 
 
 83,036,925 
 
 83,085,441 
 
 See accompanying notes to the unaudited Condensed Consolidated Financial Statements. 
 
 4 

 MAIDEN HOLDINGS, LTD. 
 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) 
 (in thousands of U.S. dollars) 
 
 For the Three Months Ended September 30, 
 
 For the Nine Months Ended September 30, 
 
 2019 
 
 2018 
 
 2019 
 
 2018 
 
 Net loss 
 
 $ 
 ( 58,327 
 ) 
 
 $ 
 ( 300,232 
 ) 
 
 $ 
 ( 110,376 
 ) 
 
 $ 
 ( 275,209 
 ) 
 
 Other comprehensive income (loss) 
 
 Net unrealized holdings (losses) gains on available-for-sale fixed maturities arising during period 
 
 ( 2,129 
 ) 
 
 ( 24,658 
 ) 
 
 89,919 
 
 ( 141,926 
 ) 
 
 Adjustment for reclassification of net realized (gains) losses recognized in net (loss) income 
 
 ( 8,555 
 ) 
 
 785 
 
 ( 11,482 
 ) 
 
 40 
 
 Foreign currency translation adjustment 
 
 11,480 
 
 4,458 
 
 9,286 
 
 12,123 
 
 Other comprehensive income (loss), before tax 
 
 796 
 
 ( 19,415 
 ) 
 
 87,723 
 
 ( 129,763 
 ) 
 
 Income tax (expense) benefit related to components of other comprehensive income (loss) 
 
 ( 12 
 ) 
 
 2 
 
 ( 93 
 ) 
 
 19 
 
 Other comprehensive income (loss), after tax 
 
 784 
 
 ( 19,413 
 ) 
 
 87,630 
 
 ( 129,744 
 ) 
 
 Comprehensive loss 
 
 ( 57,543 
 ) 
 
 ( 319,645 
 ) 
 
 ( 22,746 
 ) 
 
 ( 404,953 
 ) 
 
 Net income attributable to noncontrolling interests 
 
 — 
 
 ( 62 
 ) 
 
 — 
 
 ( 180 
 ) 
 
 Other comprehensive loss (income) attributable to noncontrolling interests 
 
 — 
 
 3 
 
 ( 78 
 ) 
 
 21 
 
 Comprehensive income attributable to noncontrolling interests 
 
 — 
 
 ( 59 
 ) 
 
 ( 78 
 ) 
 
 ( 159 
 ) 
 
 Comprehensive loss attributable to Maiden 
 
 $ 
 ( 57,543 
 ) 
 
 $ 
 ( 319,704 
 ) 
 
 $ 
 ( 22,824 
 ) 
 
 $ 
 ( 405,112 
 ) 
 
 See accompanying notes to the unaudited Condensed Consolidated Financial Statements. 
 
 5 

 MAIDEN HOLDINGS, LTD. 
 CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) 
 (in thousands of U.S. dollars) 
 
 For the Three Months Ended September 30, 
 
 For the Nine Months Ended September 30, 
 
 2019 
 
 2018 
 
 2019 
 
 2018 
 
 Preference shares - Series A, C and D 
 
 Beginning balance 
 
 $ 
 465,000 
 
 $ 
 465,000 
 
 $ 
 465,000 
 
 $ 
 465,000 
 
 Ending balance 
 
 465,000 
 
 465,000 
 
 465,000 
 
 465,000 
 
 Common shares 
 
 Beginning balance 
 
 881 
 
 879 
 
 879 
 
 877 
 
 Exercise of options and issuance of shares 
 
 — 
 
 — 
 
 2 
 
 2 
 
 Ending balance 
 
 881 
 
 879 
 
 881 
 
 879 
 
 Additional paid-in capital 
 
 Beginning balance 
 
 751,007 
 
 749,319 
 
 749,418 
 
 748,113 
 
 Exercise of options and issuance of common shares 
 
 — 
 
 15 
 
 ( 2 
 ) 
 
 13 
 
 Share-based compensation expense 
 
 131 
 
 ( 120 
 ) 
 
 1,722 
 
 1,088 
 
 Ending balance 
 
 751,138 
 
 749,214 
 
 751,138 
 
 749,214 
 
 Accumulated other comprehensive income (loss) 
 
 Beginning balance 
 
 21,152 
 
 ( 96,959 
 ) 
 
 ( 65,616 
 ) 
 
 13,354 
 
 Change in net unrealized (losses) gains on investment 
 
 ( 10,696 
 ) 
 
 ( 23,871 
 ) 
 
 78,344 
 
 ( 141,867 
 ) 
 
 Foreign currency translation adjustment 
 
 11,480 
 
 4,461 
 
 9,208 
 
 12,144 
 
 Ending balance 
 
 21,936 
 
 ( 116,369 
 ) 
 
 21,936 
 
 ( 116,369 
 ) 
 
 (Accumulated deficit) retained earnings 
 
 Beginning balance 
 
 ( 615,940 
 ) 
 
 18,338 
 
 ( 563,891 
 ) 
 
 35,472 
 
 Net loss attributable to Maiden 
 
 ( 58,327 
 ) 
 
 ( 300,294 
 ) 
 
 ( 110,376 
 ) 
 
 ( 275,389 
 ) 
 
 Dividends on preference shares 
 
 — 
 
 ( 8,545 
 ) 
 
 — 
 
 ( 25,636 
 ) 
 
 Dividends on common shares 
 
 — 
 
 ( 4,155 
 ) 
 
 — 
 
 ( 29,103 
 ) 
 
 Ending balance 
 
 ( 674,267 
 ) 
 
 ( 294,656 
 ) 
 
 ( 674,267 
 ) 
 
 ( 294,656 
 ) 
 
 Treasury shares 
 
 Beginning balance 
 
 ( 31,528 
 ) 
 
 ( 30,835 
 ) 
 
 ( 31,515 
 ) 
 
 ( 30,642 
 ) 
 
 Shares repurchased 
 
 ( 5 
 ) 
 
 ( 679 
 ) 
 
 ( 18 
 ) 
 
 ( 872 
 ) 
 
 Ending balance 
 
 ( 31,533 
 ) 
 
 ( 31,514 
 ) 
 
 ( 31,533 
 ) 
 
 ( 31,514 
 ) 
 
 Noncontrolling interests in subsidiaries 
 
 Beginning balance 
 
 — 
 
 552 
 
 641 
 
 452 
 
 Disposal of subsidiaries 
 
 — 
 
 — 
 
 ( 719 
 ) 
 
 — 
 
 Net income attributable to noncontrolling interests 
 
 — 
 
 62 
 
 — 
 
 180 
 
 Foreign currency translation adjustment 
 
 — 
 
 ( 3 
 ) 
 
 78 
 
 ( 21 
 ) 
 
 Ending balance 
 
 — 
 
 611 
 
 — 
 
 611 
 
 Total equity 
 
 $ 
 533,155 
 
 $ 
 773,165 
 
 $ 
 533,155 
 
 $ 
 773,165 
 
 See accompanying notes to the unaudited Condensed Consolidated Financial Statements. 
 
 6 

 MAIDEN HOLDINGS, LTD. 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) 
 (in thousands of U.S. dollars) 
 
 For the Nine Months Ended September 30, 
 
 2019 
 
 2018 
 
 Cash flows from operating activities 
 
 Net loss 
 
 $ 
 ( 110,376 
 ) 
 
 $ 
 ( 275,209 
 ) 
 
 Less: net loss from discontinued operations 
 
 22,327 
 
 41,609 
 
 Adjustments to reconcile net loss to net cash flows from operating activities: 
 
 Depreciation, amortization and share-based compensation 
 
 5,737 
 
 4,774 
 
 Net realized (gains) losses on investment 
 
 ( 25,685 
 ) 
 
 282 
 
 Total other-than-temporary impairment losses 
 
 165 
 
 479 
 
 Foreign exchange and other gains 
 
 ( 14,013 
 ) 
 
 ( 1,862 
 ) 
 
 Changes in assets – (increase) decrease: 
 
 Reinsurance balances receivable, net 
 
 18,517 
 
 ( 92,904 
 ) 
 
 Reinsurance recoverable on unpaid losses 
 
 ( 439,142 
 ) 
 
 23,006 
 
 Accrued investment income 
 
 8,542 
 
 ( 1,000 
 ) 
 
 Deferred commission and other acquisition expenses 
 
 159,524 
 
 ( 40,097 
 ) 
 
 Funds withheld receivable 
 
 ( 82,459 
 ) 
 
 ( 8,788 
 ) 
 
 Other assets 
 
 ( 8,465 
 ) 
 
 77,204 
 
 Changes in liabilities – increase (decrease): 
 
 Reserve for loss and loss adjustment expenses 
 
 87,772 
 
 481,227 
 
 Unearned premiums 
 
 ( 518,542 
 ) 
 
 72,200 
 
 Accrued expenses and other liabilities 
 
 ( 51,076 
 ) 
 
 ( 66,401 
 ) 
 
 Net cash (used in) provided by continuing operations 
 
 ( 947,174 
 ) 
 
 214,520 
 
 Net cash used in discontinued operations 
 
 ( 2,109 
 ) 
 
 ( 51,897 
 ) 
 
 Net cash (used in) provided by operating activities 
 
 ( 949,283 
 ) 
 
 162,623 
 
 Cash flows from investing activities: 
 
 Purchases of fixed-maturities – available-for-sale 
 
 ( 1,917,030 
 ) 
 
 ( 517,839 
 ) 
 
 Purchases of other investments 
 
 ( 7,450 
 ) 
 
 ( 17,532 
 ) 
 
 Net proceeds from sale of discontinued operations 
 
 — 
 
 7,500 
 
 Proceeds from sales of fixed-maturities – available-for-sale 
 
 845,962 
 
 185,089 
 
 Proceeds from maturities, paydowns and calls of fixed maturities 
 
 1,766,914 
 
 258,293 
 
 Proceeds from sale and redemption of other investments 
 
 858 
 
 2,160 
 
 Other, net 
 
 3,253 
 
 ( 2,985 
 ) 
 
 Net cash provided by (used in) investing activities for continuing operations 
 
 692,507 
 
 ( 85,314 
 ) 
 
 Net cash (used in) provided by investing activities for discontinued operations 
 
 ( 6,113 
 ) 
 
 112,465 
 
 Net cash provided by investing activities 
 
 686,394 
 
 27,151 
 
 Cash flows from financing activities: 
 
 Repurchase of common shares 
 
 ( 18 
 ) 
 
 ( 857 
 ) 
 
 Dividends paid – Maiden common shareholders 
 
 — 
 
 ( 37,400 
 ) 
 
 Dividends paid – preference shares 
 
 — 
 
 ( 25,636 
 ) 
 
 Net cash used in financing activities 
 
 ( 18 
 ) 
 
 ( 63,893 
 ) 
 
 Effect of exchange rate changes on foreign currency cash, restricted cash and equivalents 
 
 ( 1,269 
 ) 
 
 ( 1,131 
 ) 
 
 Net (decrease) increase in cash, restricted cash and cash equivalents 
 
 ( 264,176 
 ) 
 
 124,750 
 
 Cash, restricted cash and cash equivalents, beginning of period 
 
 337,102 
 
 191,503 
 
 Cash, restricted cash and cash equivalents, end of period 
 
 72,926 
 
 316,253 
 
 Less: cash, restricted cash and equivalents of discontinued operations, end of period 
 
 — 
 
 ( 51,679 
 ) 
 
 Cash, restricted cash and cash equivalents of continuing operations, end of period 
 
 $ 
 72,926 
 
 $ 
 264,574 
 
 Reconciliation of cash and restricted cash reported within Condensed Consolidated Balance Sheets: 
 
 Cash and cash equivalents, end of period 
 
 $ 
 39,755 
 
 $ 
 94,578 
 
 Restricted cash and cash equivalents, end of period 
 
 33,171 
 
 169,996 
 
 Total cash, restricted cash and cash equivalents, end of period 
 
 $ 
 72,926 
 
 $ 
 264,574 
 
 Non-cash investing activities 
 
 Investments transferred out related to Partial Termination Amendment and Commutation 
 
 $ 
 599,613 
 
 $ 
 — 
 
 Investments transferred out for transactions under remaining AmTrust Quota Share business 
 
 812,068 
 
 — 
 
 Investments transferred out related to discontinued operations 
 
 68,262 
 
 — 
 
 See accompanying notes to the unaudited Condensed Consolidated Financial Statements. 
 
 7 

 MAIDEN HOLDINGS, LTD. 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 
 (in thousands of U.S. dollars, except share and per share data) 

 1. Basis of Presentation 
 The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of Maiden Holdings, Ltd. ("Maiden Holdings") and its subsidiaries (the "Company" or "Maiden"). They have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the U.S. Securities and Exchange Commission ("SEC"). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. All significant intercompany transactions and accounts have been eliminated. 
 These interim unaudited Condensed Consolidated Financial Statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim period and all such adjustments are of a normal recurring nature. The results of operations for the interim period are not necessarily indicative, if annualized, of those to be expected for the full year. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. 
 These unaudited Condensed Consolidated Financial Statements, including these notes, should be read in conjunction with the Company's audited Consolidated Financial Statements, and related notes thereto, included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018 . Certain prior year comparatives have been reclassified for 2018 to conform to the 2019 presentation. The effect of these reclassifications had no impact on previously reported shareholders' equity or net income. 
 Strategic Review 
 Maiden Holdings's Board of Directors initiated a review of strategic alternatives ("Strategic Review") in the first quarter of 2018 to evaluate ways to increase shareholder value as a result of continuing significant operating losses and lower returns on equity than planned. 
 In addition, as of December 31, 2018 , both the Company and its subsidiary Maiden Reinsurance Ltd. ("Maiden Bermuda") failed to meet their requirements to hold sufficient capital to cover their respective enhanced capital requirements (“ECR”). The Company had communicated such conditions to the Bermuda Monetary Authority ("BMA") and is following the guidelines of a reportable “event” as stipulated by Bermuda insurance law. 
 As part of both the Strategic Review and the remediation measures implemented to cure the breach of the ECR, a series of transactions were entered into, including: (1) completed the sale of Maiden Reinsurance North America, Inc. ("Maiden US") on December 27, 2018; (2) Maiden Bermuda's shareholders, Maiden Holdings and Maiden Holdings North America, Ltd. ("Maiden NA"), made capital injections of $ 125,000 on December 31, 2018 and $ 70,000 on January 18, 2019 to Maiden Bermuda from the sale proceeds of Maiden US; (3) entered into a partial termination amendment ("Partial Termination Amendment") with AmTrust Financial Services, Inc. ("AmTrust") effective January 1, 2019 which amended the quota share reinsurance agreement (“AmTrust Quota Share”) between Maiden Bermuda and AmTrust’s wholly owned subsidiary AmTrust International Insurance, Ltd. (“AII”) (as more fully described in Note 8); (4) entered into amendments which terminated the AmTrust Quota Share and the European hospital liability quota share reinsurance contract (“European Hospital Liability Quota Share”) with AmTrust’s wholly owned subsidiaries AmTrust Europe Limited ("AEL") and AmTrust International Underwriters DAC ("AIU DAC") effective January 1, 2019; (5) entered into the Loss Portfolio Transfer and Adverse Development Cover Agreement ("LPT/ADC Agreement") with Enstar Group Limited ("Enstar") pursuant to the revised Master Transaction Agreement entered into on March 1, 2019 ("LPT/ADC MTA"); and (6) entered into a Commutation and Release Agreement with AmTrust to commute certain workers' compensation business with AII as of January 1, 2019. 
 As a result of the completion of these steps on July 31, 2019, both the Company and Maiden Bermuda have sufficient capital in excess of the respective ECR requirements. The relevant solvency ratios are expected to continue to improve throughout the remainder of 2019. Please see below for additional details regarding the LPT/ADC Agreement and the Commutation and Release Agreement. 
 Discontinued Operations 
 The Company made the strategic decision to divest its U.S. treaty reinsurance operations through the sale of Maiden US which was completed on December 27, 2018. Except as explicitly described as held for sale or as discontinued operations, and unless otherwise noted, all discussions and amounts presented herein relate to the Company's continuing operations except for net loss, net loss attributable to Maiden and net loss attributable to Maiden common shareholders. 
 Sale of U.S. Treaty Reinsurance Operations 
 The sale of the U.S. treaty reinsurance business occurred in two parts as described below: 
 (a) On August 29, 2018 , the Company entered into a Renewal Rights Agreement ("Renewal Rights") with Transatlantic Reinsurance Company ("TransRe"), pursuant to which the Company sold, and TransRe purchased, Maiden US's rights to: (i) renew Maiden US’s treaty reinsurance agreements upon their expiration or cancellation, (ii) solicit renewals of and replacement coverages for the treaty reinsurance agreements and (iii) replicate and use the products and contract forms used in Maiden US’s business. The sale was consummated on August 29, 2018 . The Company continues to earn premiums and remain liable for losses occurring subsequent to August 29, 2018 for any policies in force prior to and as of August 29, 2018, until those policies expire. 
 The payment received for the sale of the Renewal Rights was $ 7,500 subject to potential additional amounts payable in the future in accordance with the agreement, however no additional fees have been recognized to date. 
 
 8 

 MAIDEN HOLDINGS, LTD. 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 
 (in thousands of U.S. dollars, except share and per share data) 

 1. Basis of Presentation (continued) 
 (b) On December 27, 2018 , the Company completed its sale agreement ("U.S. Sale Agreement") with Enstar Holdings (US) LLC ("Enstar Holdings"), pursuant to which Maiden NA sold Maiden US to Enstar Holdings. Pursuant to and subject to the terms of the U.S. Sale Agreement: Maiden NA sold, and Enstar Holdings purchased, all of the outstanding shares of common stock of Maiden US (“Maiden US Sale”) for gross consideration of $ 286,375 ; (ii) Cavello Bay Reinsurance Limited ("Cavello"), Enstar’s Bermuda reinsurance affiliate, and Maiden Bermuda entered into an agreement pursuant to which certain quota share reinsurance contracts between Maiden US and Maiden Bermuda were novated to Cavello for a ceding commission paid by Maiden Bermuda of $ 12,250 ; (iii) Cavello and Maiden Bermuda also entered into a retrocession agreement pursuant to which certain assets and liabilities associated with the U.S. treaty reinsurance business held by Maiden Bermuda were retroceded to Cavello in exchange for a $ 1,750 ceding commission; and (iv) Maiden Bermuda provided Enstar with a reinsurance cover for loss reserve development, up to a maximum of $ 25,000 , when losses are more than $ 100,000 in excess of the net loss and loss adjustment expenses recorded as of June 30, 2018, for no additional consideration. 
 As discussed above, Maiden NA completed the sale of Maiden US to Enstar Holdings for gross consideration of $ 286,375 , which was subject to certain post-closing adjustments. In conjunction with the completion of the LPT/ADC Agreement discussed below, on July 31, 2019, Maiden NA and Enstar Holdings waived the post-closing adjustments procedures subject to that agreement and agreed to terminate the $ 25,000 excess of loss reinsurance agreement that Maiden Bermuda provided to Enstar in relation to the Maiden US loss reserves acquired by Enstar. As a result of these agreements, Maiden recorded a net additional loss from discontinued operations of $ 16,715 for the nine months ended September 30, 2019 . 
 The Company determined that the sale of the U.S. treaty reinsurance operations represented a strategic shift that has a major effect on its ongoing operations and financial results and that all of the held for sale criteria have been met. Accordingly, all transactions related to the U.S. treaty reinsurance operations have been reported and presented as part of discontinued operations. Please refer to " Note 6. Discontinued Operations " for additional information regarding the effect of the reclassifications on the Company's Condensed Consolidated Financial Statements. 
 LPT/ADC Agreement with Enstar 
 Pursuant to the LPT/ADC Agreement dated as of July 31, 2019 and effective as of January 1, 2019 entered into between Maiden Bermuda and Cavello, Cavello will assume liabilities for the loss reserves as of December 31, 2018 associated with the AmTrust Quota Share in excess of a $ 2,178,535 retention up to $ 600,000 , in exchange for a retrocession premium of $ 445,000 . The $ 2,178,535 retention will be subject to adjustment for paid losses subsequent to December 31, 2018 . 
 The LPT/ADC Agreement provides Maiden Bermuda with $ 155,000 in adverse development cover over its carried AmTrust Quota Share loss reserves at December 31, 2018 . The LPT/ADC Agreement meets the criteria for risk transfer and therefore has been accounted for as retroactive reinsurance. Cumulative ceded losses exceeding $ 445,000 result in a deferred gain which will be recognized over the settlement period in proportion to cumulative losses collected over the estimated ultimate reinsurance recoverable. Consequently, cumulative adverse development subsequent to December 31, 2018 may result in significant losses from operations until periods when the deferred gain is recognized as a benefit to earnings. At September 30, 2019 , the deferred gain liability recorded for retroactive reinsurance under the LPT/ADC Agreement was $ 104,542 . 
 Under the terms of the agreement, the covered losses associated with the commutation with AmTrust, as discussed below in Commutation and Release Agreement - AmTrust Quota Share, are eligible to be covered but recoverable only when such losses are paid or settled by AII or its affiliates, provided such losses and other related amounts shall not exceed $ 312,786 . 
 Settlement of funding for the LPT/ADC Agreement occurred on August 12, 2019 and Maiden Bermuda paid Enstar approximately $ 7,261 in interest related to the LPT/ADC Agreement premium, calculated at the rate of 2.64 % per annum from January 1, 2019 through August 12, 2019 . 
 Commutation and Release Agreement - AmTrust Quota Share 
 The Commutation and Release Agreement entered into and effective as of July 31, 2019, by AII and Maiden Bermuda, provides for AII to assume all reserves ceded by AII to Maiden Bermuda with respect to its proportional 40 % share of the ultimate net loss under the AmTrust Quota Share related to: (a) all losses incurred in Accident Year 2017 and Accident Year 2018 under California workers' compensation policies issued by AII and as defined in the AmTrust Quota Share ("Commuted California Business"); and (b) all losses incurred in Accident Year 2018 under New York workers' compensation policies issued by AII ("Commuted New York Business" and together with the Commuted California Business ("Commuted Business")) in exchange for the release and full discharge of Maiden Bermuda of all of its obligations to AII with respect to the Commuted Business. The Commuted Business does not include any business classified by AII as Specialty Program or Specialty Risk business. 
 AII and Maiden Bermuda agreed that the Commuted Business shall be discharged by Maiden Bermuda's transfer of cash and invested assets in the amount of $ 312,786 ("Commutation Payment") which is the sum of the net ceded reserves in the amount of $ 330,682 with respect to the Commuted Business as of December 31, 2018 less payments in the amount of $ 17,896 made by Maiden Bermuda with respect to the Commuted Business from January 1, 2019 through July 31, 2019. Settlement of the Commutation Payment occurred on August 12, 2019 and Maiden Bermuda paid AII approximately $ 6,335 in interest related to the Commutation Payment premium, calculated at the rate of 3.30 % per annum from January 1, 2019 through August 12, 2019 . Maiden Bermuda received a no objection letter from the BMA regarding the Commutation and Release Agreement. 
 AII and Maiden Bermuda also agreed that, as of July 31, 2019, the AmTrust Quota Share shall be deemed amended as applicable so that the Commuted Business is no longer included as part of the Covered Business under the AmTrust Quota Share. 
 
 9 

 MAIDEN HOLDINGS, LTD. 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 
 (in thousands of U.S. dollars, except share and per share data) 

 1. Basis of Presentation (continued) 
 Segments 
 As a result of the strategic decision to divest all of the Company's U.S. treaty reinsurance operations noted above, the Company revised the composition of its reportable segments. As described in more detail under “ Note 3. Segment Information ”, the reportable segments include: (i) Diversified Reinsurance which consists of a portfolio of property and casualty reinsurance business focusing on regional and specialty property and casualty insurance companies located primarily in Europe; and (ii) AmTrust Reinsurance which includes all business ceded to Maiden Bermuda from subsidiaries of AmTrust. In addition to these reportable segments, the results of operations of the former National General Holdings Corporation Quota Share ("NGHC Quota Share") segment have been included in the "Other" category. 
 
 2. Significant Accounting Policies 
 There have been no material changes to the significant accounting policies as described in the Company's Annual Report on Form 10-K for the year ended December 31, 2018 except for the following: 
 Accounting for Retroactive Reinsurance Agreements 
 Retroactive reinsurance agreements are reinsurance agreements under which a reinsurer agrees to reimburse the Company as a result of past insurable events. For these agreements, the excess of the amounts ultimately collectible under the agreement over the consideration paid is recognized as a deferred gain liability and amortized into income over the settlement period of the ceded reserves once the paid losses have exceeded the minimum retention. The amount of the deferral is recalculated each period based on loss payments and updated estimates of ultimate losses. If the consideration paid exceeds the ultimate losses collectible under the agreement, the net loss on the agreement is recognized in income immediately. 
 The Company entered into an LPT/ADC Agreement with Cavello on July 31, 2019, as discussed in "Note 1. Basis of Presentation" . The Company accounts for this transaction as retroactive reinsurance and pursuant to U.S. GAAP, recognized a deferred gain during the third quarter of 2019, which represents the cumulative adverse development of losses subject to the LPT/ADC Agreement. Amortization of the deferred gain will not occur until paid losses have exceeded the minimum retention under this agreement. The current estimated payout period for the losses covered by the LPT/ADC Agreement before the minimum retention is exceeded is approximately five years . 
 Recently Adopted Accounting Standards Updates 
 Improvements to Non-employee Share-Based Payment Accounting 
 In June 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-07 guidance that simplifies the accounting for share-based payments granted to non-employees for goods and services. Under the guidance, most of the guidance on such payments to non-employees would be aligned with the requirements for share-based payments granted to employees as the board viewed the awards to both employees and non-employees to be economically similar and that two different accounting models are not justified. The Company currently measures directors’ share-based payment awards at fair value as at their grant date; therefore the adoption of this standard on January 1, 2019 did not have any impact on the Company’s Condensed Consolidated Financial Statements. 
 Codification Improvements 
 In July 2018, the FASB issued ASU 2018-09 which includes clarifications to existing codifications or corrections of unintended application of guidance that is not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. The amendments in this update include items raised for board consideration through the codification's feedback system that met the scope of this project, making due process necessary. The amendments affect a wide variety of topics in the codification. The amendments apply to all reporting entities within the scope of the affected accounting guidance. None of the topics deemed applicable upon adoption of this standard on January 1, 2019 have a material impact in the Company's interim consolidated financial statements. 
 Topic 842, Leases 
 In July 2018, the FASB issued ASU 2018-11 for targeted improvements related to ASU 2016-02 which provides entities with an additional transition method to apply the new standard. Under the new optional transition method, an entity initially applies Accounting Standards Codification ("ASC") 842 at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Topic 842 became effective for the Company during the first quarter of 2019 and was applied using a modified retrospective approach by electing the additional transition method permitted by ASU 2018-11. Under the additional transition method, the Company's reporting for the comparative periods presented in its financial statements will be in accordance with the pre-effective date lease accounting requirements under Topic 840. 
 The Company adopted Topic 842 effective on January 1, 2019 , by electing as a package the practical expedients permitted under the transition guidance of Topic 842, and applied consistently to all leases that had commenced before the effective date of adoption. The package of practical expedients allowed the Company not to reassess the following: whether any expired or existing contracts are or contain leases; the lease classification for any expired or existing leases; and initial direct costs for any existing leases. In addition to electing the package of practical expedients, the Company made an accounting policy election to account for non-lease components separately from lease components. Furthermore, the Company made an accounting policy election not to record leases with an initial term of twelve months or less in the Company's Condensed Consolidated Balance Sheets. The adoption of this standard on January 1, 2019 has impacted the Company’s Condensed Consolidated Balance Sheets but did not have any impact on its results of operations or cash flows. 
 
 10 

 MAIDEN HOLDINGS, LTD. 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 
 (in thousands of U.S. dollars, except share and per share data) 

 2. Significant Accounting Policies (continued) 
 Please refer to "Note 10. Commitments and Contingencies a) Operating Lease Commitments" for further disclosures regarding the impact of the adoption of Topic 842 in 2019 . 
 Premium Amortization on Purchased Callable Debt Securities 
 In March 2017, the FASB issued ASU 2017-08 to amend the amortization period for certain purchased callable debt securities held at a premium. Current U.S. GAAP excludes certain callable debt securities from consideration of early repayment of principal even if the holder is certain that the call will be exercised. As a result, upon the exercise of a call on a callable debt security held at a premium, the unamortized premium is recorded as a loss in earnings.The amendments in ASU 2017-08 affect all entities that hold investments in callable debt securities that have an amortized cost basis in excess of the amount that is repayable by the issuer at the earliest call date. The amendments shorten the amortization period for certain callable debt securities held at a premium and require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. 
 For public business entities, the amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. An entity should apply the amendments on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Additionally, in the period of adoption, an entity should provide disclosures about a change in accounting principle. 
 The Company holds a number of fixed maturities with callable features on its Condensed Consolidated Balance Sheets and this includes certain securities that have been purchased at a premium that are being amortized to their contractual maturity dates. The Company has always handled the amortization of any premiums by amortizing to the earliest effective maturity; therefore, the adoption of this guidance on January 1, 2019 did not have any impact on its Condensed Consolidated Financial Statements. 
 Recently Issued Accounting Standards Not Yet Adopted 
 Accounting for Measurement of Credit Losses on Financial Instruments 
 In April 2019, the FASB issued ASU 2019-04 for targeted improvements related to ASU 2016-13 " Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments " which replaces the "incurred loss" impairment methodology with an approach based on "expected losses" to estimate credit losses on certain types of financial instruments and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The guidance requires financial assets measured at amortized cost to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost of the financial asset to present the net carrying value at the amount expected to be collected on the financial asset. The Update also modified the accounting for available-for-sale ("AFS") debt securities, which must be individually assessed for credit losses when fair value is less than the amortized cost basis, in accordance with Subtopic 326-30, Financial Instruments—Credit Losses—Available-for-Sale Debt Securities . Credit losses relating to AFS debt securities will be recorded through an allowance for credit losses. 
 The codification improvements in ASU 2019-04 clarify that an entity should include recoveries when estimating the allowance for credit losses. The amendments specify that expected recoveries of amounts previously written off and expected to be written off should be included in the valuation account and should not exceed the aggregate of amounts previously written off and expected to be written off by the entity. In addition, for collateral dependent financial assets, the amendments clarify that an allowance for credit losses that is added to the amortized cost basis of the financial asset(s) should not exceed amounts previously written off. The amendment also clarifies FASB’s intent to include all reinsurance recoverables that are within the scope of Topic 944 to be within the scope of Subtopic 326-20, regardless of the measurement basis of those recoverables.The guidance is effective for public business entities for annual periods beginning after December 15, 2019, and interim periods therein. The Company is currently evaluating the impact of this guidance on its results of operations, financial condition and liquidity. 
 
 11 

 MAIDEN HOLDINGS, LTD. 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 
 (in thousands of U.S. dollars, except share and per share data) 

 3. Segment Information 
 The Company currently has two reportable segments: Diversified Reinsurance and AmTrust Reinsurance. Our Diversified Reinsurance segment consists of a portfolio of predominantly property and casualty reinsurance business focusing on regional and specialty property and casualty insurance companies located primarily in Europe. Our AmTrust Reinsurance segment includes all business ceded to our subsidiary, Maiden Bermuda, from AmTrust, primarily the AmTrust Quota Share and the European Hospital Liability Quota Share. In addition to our reportable segments, the results of operations of the former NGHC Quota Share segment and the remnants of our retroceded U.S. treaty business have been included in the "Other" category. Please refer to "Note 10. Related Party Transactions" for additional information. 
 As a result of the strategic decision to divest all of the Company's U.S. treaty reinsurance operations as discussed in " Note 1. Basis of Presentation " and " Note 6. Discontinued Operations ", the Company revised the composition of its reportable segments. Previously, the underwriting results associated with the discontinued operations of the Company's U.S. treaty reinsurance business were included within the Diversified Reinsurance segment and the operating results associated with the remnants of the U.S. excess and surplus business were included within the Other category. These are now excluded and all prior periods presented have been reclassified to conform to this new presentation. 
 The Company evaluates segment performance based on segment profit separately from the results of our investment portfolio. General and administrative expenses are allocated to the segments on an actual basis except salaries and benefits where management’s judgment is applied. The Company does not allocate general corporate expenses to the segments. In determining total assets by reportable segment, the Company identifies those assets that are attributable to a particular segment such as reinsurance balances receivable, reinsurance recoverable on unpaid losses, deferred commission and other acquisition expenses, funds withheld receivable, loans and restricted cash and cash equivalents and investments. All remaining assets are allocated to Corporate. 
 As discussed in "Note 1. Basis of Presentation" and "Note 10. Related Party Transactions", the Partial Termination Amendment and the termination of the remaining business with AmTrust effective January 1, 2019 resulted in a significant reduction in gross premiums written. This was due to the return of unearned premium on certain lines covered by the Partial Termination Amendment, with no new business written in 2019 resulting from the termination of the AmTrust Quota Share and the European Hospital Liability Quota Share. The following tables summarize our reporting segment's underwriting results and the reconciliation of our reportable segments and Other category's underwriting results to our consolidated net loss from continuing operations: 
 
 For the Three Months Ended September 30, 2019 
 
 Diversified Reinsurance 
 
 AmTrust Reinsurance 
 
 Other 
 
 Total 
 
 Gross premiums written 
 
 $ 
 14,439 
 
 $ 
 21,405 
 
 $ 
 — 
 
 $ 
 35,844 
 
 Net premiums written 
 
 $ 
 14,539 
 
 $ 
 21,405 
 
 $ 
 — 
 
 $ 
 35,944 
 
 Net premiums earned 
 
 $ 
 20,492 
 
 $ 
 74,406 
 
 $ 
 — 
 
 $ 
 94,898 
 
 Other insurance revenue 
 
 554 
 
 — 
 
 — 
 
 554 
 
 Net loss and loss adjustment expenses ("loss and LAE") 
 
 ( 13,807 
 ) 
 
 ( 126,945 
 ) 
 
 ( 108 
 ) 
 
 ( 140,860 
 ) 
 
 Commission and other acquisition expenses 
 
 ( 7,005 
 ) 
 
 ( 25,758 
 ) 
 
 — 
 
 ( 32,763 
 ) 
 
 General and administrative expenses 
 
 ( 1,849 
 ) 
 
 ( 235 
 ) 
 
 — 
 
 ( 2,084 
 ) 
 
 Underwriting loss 
 
 $ 
 ( 1,615 
 ) 
 
 $ 
 ( 78,532 
 ) 
 
 $ 
 ( 108 
 ) 
 
 ( 80,255 
 ) 
 
 Reconciliation to net loss from continuing operations 
 
 Net investment income and realized gains on investment 
 
 25,923 
 
 Total other-than-temporary impairment losses 
 
 ( 165 
 ) 
 
 Interest and amortization expenses 
 
 ( 4,831 
 ) 
 
 Foreign exchange and other gains 
 
 7,827 
 
 Other general and administrative expenses 
 
 ( 6,462 
 ) 
 
 Income tax expense 
 
 ( 87 
 ) 
 
 Net loss from continuing operations 
 
 $ 
 ( 58,050 
 ) 
 
 Net loss and LAE ratio (1) 
 
 65.6 
 % 
 
 170.6 
 % 
 
 147.6 
 % 
 
 Commission and other acquisition expense ratio (2) 
 
 33.3 
 % 
 
 34.6 
 % 
 
 34.3 
 % 
 
 General and administrative expense ratio (3) 
 
 8.8 
 % 
 
 0.3 
 % 
 
 8.9 
 % 
 
 Expense ratio (4) 
 
 42.1 
 % 
 
 34.9 
 % 
 
 43.2 
 % 
 
 Combined ratio (5) 
 
 107.7 
 % 
 
 205.5 
 % 
 
 190.8 
 % 
 
 12 

 MAIDEN HOLDINGS, LTD. 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 
 (in thousands of U.S. dollars, except share and per share data) 

 3. Segment Information (continued) 
 
 For the Three Months Ended September 30, 2018 
 
 Diversified Reinsurance 
 
 AmTrust Reinsurance 
 
 Other 
 
 Total 
 
 Gross premiums written 
 
 $ 
 31,698 
 
 $ 
 452,795 
 
 $ 
 — 
 
 $ 
 484,493 
 
 Net premiums written 
 
 $ 
 31,291 
 
 $ 
 451,515 
 
 $ 
 — 
 
 $ 
 482,806 
 
 Net premiums earned 
 
 $ 
 28,784 
 
 $ 
 491,293 
 
 $ 
 — 
 
 $ 
 520,077 
 
 Other insurance revenue 
 
 1,870 
 
 — 
 
 — 
 
 1,870 
 
 Net loss and LAE 
 
 ( 19,764 
 ) 
 
 ( 579,163 
 ) 
 
 ( 1,369 
 ) 
 
 ( 600,296 
 ) 
 
 Commission and other acquisition expenses 
 
 ( 8,961 
 ) 
 
 ( 158,657 
 ) 
 
 — 
 
 ( 167,618 
 ) 
 
 General and administrative expenses 
 
 ( 4,256 
 ) 
 
 ( 952 
 ) 
 
 — 
 
 ( 5,208 
 ) 
 
 Underwriting loss 
 
 $ 
 ( 2,327 
 ) 
 
 $ 
 ( 247,479 
 ) 
 
 $ 
 ( 1,369 
 ) 
 
 ( 251,175 
 ) 
 
 Reconciliation to net loss from continuing operations 
 
 Net investment income and realized losses on investment 
 
 34,194 
 
 Total other-than-temporary impairment losses 
 
 ( 479 
 ) 
 
 Interest and amortization expenses 
 
 ( 4,829 
 ) 
 
 Foreign exchange and other losses 
 
 ( 552 
 ) 
 
 Other general and administrative expenses 
 
 ( 13,999 
 ) 
 
 Income tax expense 
 
 ( 3,573 
 ) 
 
 Net loss from continuing operations 
 
 $ 
 ( 240,413 
 ) 
 
 Net loss and LAE ratio (1) 
 
 64.5 
 % 
 
 117.9 
 % 
 
 115.0 
 % 
 
 Commission and other acquisition expense ratio (2) 
 
 29.2 
 % 
 
 32.3 
 % 
 
 32.1 
 % 
 
 General and administrative expense ratio (3) 
 
 13.9 
 % 
 
 0.2 
 % 
 
 3.7 
 % 
 
 Expense ratio (4) 
 
 43.1 
 % 
 
 32.5 
 % 
 
 35.8 
 % 
 
 Combined ratio (5) 
 
 107.6 
 % 
 
 150.4 
 % 
 
 150.8 
 % 
 
 13 

 MAIDEN HOLDINGS, LTD. 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 
 (in thousands of U.S. dollars, except share and per share data) 

 3. Segment Information (continued) 
 
 For the Nine Months Ended September 30, 2019 
 
 Diversified Reinsurance 
 
 AmTrust Reinsurance 
 
 Other 
 
 Total 
 
 Gross premiums written 
 
 $ 
 41,021 
 
 $ 
 ( 564,199 
 ) 
 
 $ 
 — 
 
 $ 
 ( 523,178 
 ) 
 
 Net premiums written 
 
 $ 
 38,204 
 
 $ 
 ( 564,199 
 ) 
 
 $ 
 — 
 
 $ 
 ( 525,995 
 ) 
 
 Net premiums earned 
 
 $ 
 68,256 
 
 $ 
 343,730 
 
 $ 
 — 
 
 $ 
 411,986 
 
 Other insurance revenue 
 
 2,058 
 
 — 
 
 — 
 
 2,058 
 
 Net loss and LAE 
 
 ( 40,695 
 ) 
 
 ( 374,103 
 ) 
 
 ( 312 
 ) 
 
 ( 415,110 
 ) 
 
 Commission and other acquisition expenses 
 
 ( 24,413 
 ) 
 
 ( 127,623 
 ) 
 
 — 
 
 ( 152,036 
 ) 
 
 General and administrative expenses 
 
 ( 6,972 
 ) 
 
 ( 2,063 
 ) 
 
 — 
 
 ( 9,035 
 ) 
 
 Underwriting loss 
 
 $ 
 ( 1,766 
 ) 
 
 $ 
 ( 160,059 
 ) 
 
 $ 
 ( 312 
 ) 
 
 ( 162,137 
 ) 
 
 Reconciliation to net loss from continuing operations 
 
 Net investment income and realized gains on investment 
 
 102,052 
 
 Total other-than-temporary impairment losses 
 
 ( 165 
 ) 
 
 Interest and amortization expenses 
 
 ( 14,490 
 ) 
 
 Foreign exchange and other gains 
 
 14,013 
 
 Other general and administrative expenses 
 
 ( 28,299 
 ) 
 
 Income tax benefit 
 
 977 
 
 Net loss from continuing operations 
 
 $ 
 ( 88,049 
 ) 
 
 Net loss and LAE ratio (1) 
 
 57.9 
 % 
 
 108.8 
 % 
 
 100.3 
 % 
 
 Commission and other acquisition expense ratio (2) 
 
 34.7 
 % 
 
 37.1 
 % 
 
 36.7 
 % 
 
 General and administrative expense ratio (3) 
 
 9.9 
 % 
 
 0.6 
 % 
 
 9.0 
 % 
 
 Expense ratio (4) 
 
 44.6 
 % 
 
 37.7 
 % 
 
 45.7 
 % 
 
 Combined ratio (5) 
 
 102.5 
 % 
 
 146.5 
 % 
 
 146.0 
 % 
 
 14 

 MAIDEN HOLDINGS, LTD. 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 
 (in thousands of U.S. dollars, except share and per share data) 

 3. Segment Information (continued) 
 
 For the Nine Months Ended September 30, 2018 
 
 Diversified Reinsurance 
 
 AmTrust Reinsurance 
 
 Other 
 
 Total 
 
 Gross premiums written 
 
 $ 
 111,139 
 
 $ 
 1,518,208 
 
 $ 
 — 
 
 $ 
 1,629,347 
 
 Net premiums written 
 
 $ 
 109,279 
 
 $ 
 1,517,206 
 
 $ 
 — 
 
 $ 
 1,626,485 
 
 Net premiums earned 
 
 $ 
 82,838 
 
 $ 
 1,458,440 
 
 $ 
 — 
 
 $ 
 1,541,278 
 
 Other insurance revenue 
 
 7,629 
 
 — 
 
 — 
 
 7,629 
 
 Net loss and LAE 
 
 ( 51,828 
 ) 
 
 ( 1,270,306 
 ) 
 
 ( 1,369 
 ) 
 
 ( 1,323,503 
 ) 
 
 Commission and other acquisition expenses 
 
 ( 28,261 
 ) 
 
 ( 468,765 
 ) 
 
 — 
 
 ( 497,026 
 ) 
 
 General and administrative expenses 
 
 ( 13,330 
 ) 
 
 ( 2,954 
 ) 
 
 — 
 
 ( 16,284 
 ) 
 
 Underwriting loss 
 
 $ 
 ( 2,952 
 ) 
 
 $ 
 ( 283,585 
 ) 
 
 $ 
 ( 1,369 
 ) 
 
 ( 287,906 
 ) 
 
 Reconciliation to net loss from continuing operations 
 
 Net investment income and realized losses on investment 
 
 101,266 
 
 Total other-than-temporary impairment losses 
 
 ( 479 
 ) 
 
 Interest and amortization expenses 
 
 ( 14,487 
 ) 
 
 Foreign exchange and other gains 
 
 1,862 
 
 Other general and administrative expenses 
 
 ( 33,454 
 ) 
 
 Income tax expense 
 
 ( 402 
 ) 
 
 Net loss from continuing operations 
 
 $ 
 ( 233,600 
 ) 
 
 Net loss and LAE ratio (1) 
 
 57.3 
 % 
 
 87.1 
 % 
 
 85.4 
 % 
 
 Commission and other acquisition expense ratio (2) 
 
 31.3 
 % 
 
 32.1 
 % 
 
 32.1 
 % 
 
 General and administrative expense ratio (3) 
 
 14.7 
 % 
 
 0.2 
 % 
 
 3.2 
 % 
 
 Expense ratio (4) 
 
 46.0 
 % 
 
 32.3 
 % 
 
 35.3 
 % 
 
 Combined ratio (5) 
 
 103.3 
 % 
 
 119.4 
 % 
 
 120.7 
 % 
 
 (1) 
 Calculated by dividing net loss and LAE by the sum of net premiums earned and other insurance revenue. 
 
 (2) 
 Calculated by dividing commission and other acquisition expenses by the sum of net premiums earned and other insurance revenue. 
 
 (3) 
 Calculated by dividing general and administrative expenses by the sum of net premiums earned and other insurance revenue. 
 
 (4) 
 Calculated by adding together the commission and other acquisition expense ratio and general and administrative expense ratio. 
 
 (5) 
 Calculated by adding together net loss and LAE ratio and the expense ratio. 
 
 The following tables summarize the financial position of our reportable segments including the reconciliation to our consolidated assets at September 30, 2019 and December 31, 2018 : 
 
 September 30, 2019 
 
 Diversified Reinsurance 
 
 AmTrust Reinsurance 
 
 Total 
 
 Total assets - reportable segments 
 
 $ 
 166,032 
 
 $ 
 3,060,970 
 
 $ 
 3,227,002 
 
 Corporate assets 
 
 — 
 
 — 
 
 564,953 
 
 Total Assets 
 
 $ 
 166,032 
 
 $ 
 3,060,970 
 
 $ 
 3,791,955 
 
 December 31, 2018 
 
 Diversified Reinsurance 
 
 AmTrust Reinsurance 
 
 Total 
 
 Total assets - reportable segments 
 
 $ 
 190,437 
 
 $ 
 4,495,740 
 
 $ 
 4,686,177 
 
 Corporate assets 
 
 — 
 
 — 
 
 497,655 
 
 Assets held for sale 
 
 — 
 
 — 
 
 103,628 
 
 Total Assets 
 
 $ 
 190,437 
 
 $ 
 4,495,740 
 
 $ 
 5,287,460 
 
 15 

 MAIDEN HOLDINGS, LTD. 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 
 (in thousands of U.S. dollars, except share and per share data) 

 3. Segment Information (continued) 
 The following tables set forth financial information relating to net premiums written by major line of business and reportable segment for the three and nine months ended September 30, 2019 and 2018 : 
 
 For the Three Months Ended September 30, 
 
 2019 
 2018 
 
 Net premiums written 
 
 Total 
 Total 
 
 Diversified Reinsurance 
 
 International 
 
 $ 
 14,563 
 
 $ 
 31,291 
 
 Other 
 
 ( 24 
 ) 
 
 — 
 
 Total Diversified Reinsurance 
 
 14,539 
 
 31,291 
 
 AmTrust Reinsurance 
 
 Small Commercial Business 
 
 8,050 
 
 232,163 
 
 Specialty Program 
 
 4,139 
 
 94,077 
 
 Specialty Risk and Extended Warranty 
 
 9,216 
 
 125,275 
 
 Total AmTrust Reinsurance 
 
 21,405 
 
 451,515 
 
 Total Net Premiums Written 
 
 $ 
 35,944 
 
 $ 
 482,806 
 
 For the Nine Months Ended September 30, 
 
 2019 
 2018 
 
 Net premiums written 
 
 Total 
 Total 
 
 Diversified Reinsurance 
 
 International 
 
 $ 
 38,246 
 
 $ 
 109,238 
 
 Other 
 
 ( 42 
 ) 
 
 41 
 
 Total Diversified Reinsurance 
 
 38,204 
 
 109,279 
 
 AmTrust Reinsurance 
 
 Small Commercial Business 
 
 ( 329,116 
 ) 
 
 879,403 
 
 Specialty Program 
 
 ( 24,500 
 ) 
 
 286,404 
 
 Specialty Risk and Extended Warranty 
 
 ( 210,583 
 ) 
 
 351,399 
 
 Total AmTrust Reinsurance 
 
 ( 564,199 
 ) 
 
 1,517,206 
 
 Total Net Premiums Written 
 
 $ 
 ( 525,995 
 ) 
 
 $ 
 1,626,485 
 
 The following tables set forth financial information relating to net premiums earned by major line of business and reportable segment for the three and nine months ended September 30, 2019 and 2018 : 
 
 For the Three Months Ended September 30, 
 
 2019 
 2018 
 
 Net premiums earned 
 
 Total 
 Total 
 
 Diversified Reinsurance 
 
 International 
 
 $ 
 20,516 
 
 $ 
 28,784 
 
 Other 
 
 ( 24 
 ) 
 
 — 
 
 Total Diversified Reinsurance 
 
 20,492 
 
 28,784 
 
 AmTrust Reinsurance 
 
 Small Commercial Business 
 
 18,686 
 
 273,456 
 
 Specialty Program 
 
 22,204 
 
 98,359 
 
 Specialty Risk and Extended Warranty 
 
 33,516 
 
 119,478 
 
 Total AmTrust Reinsurance 
 
 74,406 
 
 491,293 
 
 Total Net Premiums Earned 
 
 $ 
 94,898 
 
 $ 
 520,077 
 
 16 

 MAIDEN HOLDINGS, LTD. 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 
 (in thousands of U.S. dollars, except share and per share data) 

 3. Segment Information (continued) 
 
 For the Nine Months Ended September 30, 
 
 2019 
 2018 
 
 Net premiums earned 
 
 Total 
 Total 
 
 Diversified Reinsurance 
 
 International 
 
 $ 
 68,298 
 
 $ 
 82,797 
 
 Other 
 
 ( 42 
 ) 
 
 41 
 
 Total Diversified Reinsurance 
 
 68,256 
 
 82,838 
 
 AmTrust Reinsurance 
 
 Small Commercial Business 
 
 81,424 
 
 882,679 
 
 Specialty Program 
 
 128,751 
 
 283,592 
 
 Specialty Risk and Extended Warranty 
 
 133,555 
 
 292,169 
 
 Total AmTrust Reinsurance 
 
 343,730 
 
 1,458,440 
 
 Total Net Premiums Earned 
 
 $ 
 411,986 
 
 $ 
 1,541,278 
 
 4. Investments 
 
 a) 
 Fixed Maturities 
 
 The original or amortized cost, estimated fair value and gross unrealized gains and losses of fixed maturities at September 30, 2019 and December 31, 2018 are as follows: 
 
 September 30, 2019 
 
 Original or amortized cost 
 
 Gross unrealized gains 
 
 Gross unrealized losses 
 
 Fair value 
 
 AFS fixed maturities: 
 
 U.S. treasury bonds 
 
 $ 
 94,971 
 
 $ 
 780 
 
 $ 
 — 
 
 $ 
 95,751 
 
 U.S. agency bonds – mortgage-backed 
 
 748,135 
 
 12,120 
 
 ( 1,265 
 ) 
 
 758,990 
 
 Non-U.S. government and supranational bonds 
 
 11,899 
 
 201 
 
 ( 340 
 ) 
 
 11,760 
 
 Asset-backed securities 
 
 172,919 
 
 828 
 
 ( 521 
 ) 
 
 173,226 
 
 Corporate bonds 
 
 1,008,823 
 
 28,963 
 
 ( 22,130 
 ) 
 
 1,015,656 
 
 Municipal bonds 
 
 4,105 
 
 72 
 
 — 
 
 4,177 
 
 Total fixed maturity investments 
 
 $ 
 2,040,852 
 
 $ 
 42,964 
 
 $ 
 ( 24,256 
 ) 
 
 $ 
 2,059,560 
 
 December 31, 2018 
 
 Original or amortized cost 
 
 Gross unrealized gains 
 
 Gross unrealized losses 
 
 Fair value 
 
 AFS fixed maturities: 
 
 U.S. treasury bonds 
 
 $ 
 138,625 
 
 $ 
 448 
 
 $ 
 ( 1 
 ) 
 
 $ 
 139,072 
 
 U.S. agency bonds – mortgage-backed 
 
 1,485,716 
 
 3,491 
 
 ( 36,073 
 ) 
 
 1,453,134 
 
 U.S. agency bonds – other 
 
 129,741 
 
 40 
 
 ( 548 
 ) 
 
 129,233 
 
 Non-U.S. government and supranational bonds 
 
 11,212 
 
 66 
 
 ( 1,206 
 ) 
 
 10,072 
 
 Asset-backed securities 
 
 216,072 
 
 425 
 
 ( 1,415 
 ) 
 
 215,082 
 
 Corporate bonds 
 
 1,128,614 
 
 6,525 
 
 ( 30,164 
 ) 
 
 1,104,975 
 
 Total AFS fixed maturities 
 
 3,109,980 
 
 10,995 
 
 ( 69,407 
 ) 
 
 3,051,568 
 
 HTM fixed maturities: 
 
 Corporate bonds 
 
 957,845 
 
 3,872 
 
 ( 20,990 
 ) 
 
 940,727 
 
 Municipal bonds 
 
 57,836 
 
 — 
 
 ( 551 
 ) 
 
 57,285 
 
 Total HTM fixed maturities 
 
 1,015,681 
 
 3,872 
 
 ( 21,541 
 ) 
 
 998,012 
 
 Total fixed maturity investments 
 
 $ 
 4,125,661 
 
 $ 
 14,867 
 
 $ 
 ( 90,948 
 ) 
 
 $ 
 4,049,580 
 
 17 

 MAIDEN HOLDINGS, LTD. 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 
 (in thousands of U.S. dollars, except share and per share data) 

 4. Investments (continued) 
 The Company has historically classified its fixed maturity investments as either AFS or held-to-maturity ("HTM"). The AFS portfolio is reported at fair value. The HTM portfolio at December 31, 2018 included securities for which we had the ability and intent to hold to maturity or redemption and was reported at amortized cost. When a security transferred from AFS to HTM, the fair value at the time of transfer, adjusted for subsequent amortization, becomes the security's amortized cost. When a security transferred from HTM to AFS, the security’s amortized cost basis carries over to the AFS category for the subsequent amortization of the historical premium or discount, comparisons of fair value and amortized cost for the purpose of determining unrealized holding gains and losses and required disclosures of amortized cost. The difference between the security’s amortized cost and fair value at the date of transfer into the AFS portfolio will be recognized as an unrealized gain or loss and recorded in accumulated other comprehensive income ("AOCI"). 
 Due to the termination of both AmTrust Reinsurance quota share contracts effective January 1, 2019, the Company no longer believed that it had the positive ability to hold the securities in the HTM portfolio to maturity because this portfolio served as part of the collateral for the AmTrust Reinsurance segment loss reserves. Therefore, the Company has reclassified and transferred all HTM securities to the AFS portfolio at their fair market value as at March 31, 2019 . The carrying value of the HTM securities at the time of transfer was $ 1,011,878 and the related unrealized gains of $ 14,230 have been reported in the fair value of the AFS securities as well as reported as a component of AOCI as at March 31, 2019 . 
 The contractual maturities of our fixed maturities are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. 
 
 September 30, 2019 
 
 Amortized cost 
 
 Fair value 
 
 Maturity 
 
 Due in one year or less 
 
 $ 
 87,797 
 
 $ 
 85,711 
 
 Due after one year through five years 
 
 661,447 
 
 656,888 
 
 Due after five years through ten years 
 
 370,554 
 
 384,745 
 
 1,119,798 
 
 1,127,344 
 
 U.S. agency bonds – mortgage-backed 
 
 748,135 
 
 758,990 
 
 Asset-backed securities 
 
 172,919 
 
 173,226 
 
 Total fixed maturities 
 
 $ 
 2,040,852 
 
 $ 
 2,059,560 
 
 The following tables summarize fixed maturities in an unrealized loss position and the aggregate fair value and gross unrealized loss by length of time the security has continuously been in an unrealized loss position: 
 
 Less than 12 Months 
 
 12 Months or More 
 
 Total 
 
 September 30, 2019 
 
 Fair 
value 
 
 Unrealized 
losses 
 
 Fair 
value 
 
 Unrealized 
losses 
 
 Fair 
value 
 
 Unrealized 
losses 
 
 Fixed maturities 
 
 U.S. agency bonds – mortgage-backed 
 
 $ 
 40,557 
 
 $ 
 ( 395 
 ) 
 
 $ 
 133,453 
 
 $ 
 ( 870 
 ) 
 
 $ 
 174,010 
 
 $ 
 ( 1,265 
 ) 
 
 Non-U.S. government and supranational bonds 
 
 6,251 
 
 ( 250 
 ) 
 
 681 
 
 ( 90 
 ) 
 
 6,932 
 
 ( 340 
 ) 
 
 Asset-backed securities 
 
 64,556 
 
 ( 295 
 ) 
 
 13,167 
 
 ( 226 
 ) 
 
 77,723 
 
 ( 521 
 ) 
 
 Corporate bonds 
 
 75,767 
 
 ( 1,862 
 ) 
 
 159,516 
 
 ( 20,268 
 ) 
 
 235,283 
 
 ( 22,130 
 ) 
 
 Total temporarily impaired fixed maturities 
 
 $ 
 187,131 
 
 $ 
 ( 2,802 
 ) 
 
 $ 
 306,817 
 
 $ 
 ( 21,454 
 ) 
 
 $ 
 493,948 
 
 $ 
 ( 24,256 
 ) 
 
 At September 30, 2019 , there were approximately 126 securities in an unrealized loss position with a fair value of $ 493,948 and unrealized losses of $ 24,256 . Of these securities, there were 68 securities that have been in an unrealized loss position for 12 months or greater with a fair value of $ 306,817 and unrealized losses of $ 21,454 . 
 
 18 

 MAIDEN HOLDINGS, LTD. 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 
 (in thousands of U.S. dollars, except share and per share data) 

 4. Investments (continued) 
 
 Less than 12 Months 
 
 12 Months or More 
 
 Total 
 
 December 31, 2018 
 
 Fair 
value 
 
 Unrealized 
losses 
 
 Fair 
value 
 
 Unrealized 
losses 
 
 Fair 
value 
 
 Unrealized 
losses 
 
 Fixed maturities 
 
 U.S. treasury bonds 
 
 $ 
 125 
 
 $ 
 ( 1 
 ) 
 
 $ 
 — 
 
 $ 
 — 
 
 $ 
 125 
 
 $ 
 ( 1 
 ) 
 
 U.S. agency bonds – mortgage-backed 
 
 416,147 
 
 ( 6,624 
 ) 
 
 838,091 
 
 ( 29,449 
 ) 
 
 1,254,238 
 
 ( 36,073 
 ) 
 
 U.S. agency bonds – other 
 
 26,838 
 
 ( 27 
 ) 
 
 17,462 
 
 ( 521 
 ) 
 
 44,300 
 
 ( 548 
 ) 
 
 Non-U.S. government and supranational bonds 
 
 4,024 
 
 ( 252 
 ) 
 
 3,770 
 
 ( 954 
 ) 
 
 7,794 
 
 ( 1,206 
 ) 
 
 Asset-backed securities 
 
 74,801 
 
 ( 1,196 
 ) 
 
 5,793 
 
 ( 219 
 ) 
 
 80,594 
 
 ( 1,415 
 ) 
 
 Corporate bonds 
 
 1,052,765 
 
 ( 30,334 
 ) 
 
 286,542 
 
 ( 20,820 
 ) 
 
 1,339,307 
 
 ( 51,154 
 ) 
 
 Municipal bonds 
 
 20,379 
 
 ( 261 
 ) 
 
 36,906 
 
 ( 290 
 ) 
 
 57,285 
 
 ( 551 
 ) 
 
 Total temporarily impaired fixed maturities 
 
 $ 
 1,595,079 
 
 $ 
 ( 38,695 
 ) 
 
 $ 
 1,188,564 
 
 $ 
 ( 52,253 
 ) 
 
 $ 
 2,783,643 
 
 $ 
 ( 90,948 
 ) 
 
 At December 31, 2018 , there were approximately 348 securities in an unrealized loss position with a fair value of $ 2,783,643 and unrealized losses of $ 90,948 . Of these securities, there were 103 securities that have been in an unrealized loss position for 12 months or greater with a fair value of $ 1,188,564 and unrealized losses of $ 52,253 . 
 Other-than-temporarily impaired ( " OTTI") 
 The Company performs quarterly reviews of its fixed maturities in order to determine whether declines in fair value below the amortized cost basis were considered other-than-temporary in accordance with applicable guidance. At September 30, 2019 , we have determined that the unrealized losses on fixed maturities were primarily due to interest rates rising as well as the impact of foreign exchange rate changes on certain foreign currency denominated AFS fixed maturities since their date of purchase. All fixed maturity securities in the investment portfolio continue to pay the expected coupon payments under the contractual terms of the securities. Any credit-related impairment related to fixed maturity securities that the Company does not plan to sell and for which the Company is not more likely than not to be required to sell is recognized in net earnings, with the non-credit related impairment recognized in comprehensive earnings. Based on our analysis, our fixed maturity portfolio is of high credit quality and we believe we will recover the amortized cost basis of our fixed maturity securities. We continually monitor the credit quality of our fixed maturity investments to assess if it is probable that we will receive our contractual or estimated cash flows in the form of principal and interest. For the three and nine months ended September 30, 2019 , we recognized $ 165 ( 2018 - $ 479 ) in OTTI charges in earnings on one fixed maturity security ( 2018 - one fixed maturity security). 
 The following tables summarize the credit ratings of our fixed maturities as at September 30, 2019 and December 31, 2018 : 
 
 September 30, 2019 
 
 Amortized cost 
 
 Fair value 
 
 % of Total 
fair value 
 
 U.S. treasury bonds 
 
 $ 
 94,971 
 
 $ 
 95,751 
 
 4.6 
 % 
 
 U.S. agency bonds 
 
 748,135 
 
 758,990 
 
 36.9 
 % 
 
 AAA 
 
 81,012 
 
 81,402 
 
 4.0 
 % 
 
 AA+, AA, AA- 
 
 108,536 
 
 107,721 
 
 5.2 
 % 
 
 A+, A, A- 
 
 557,135 
 
 563,227 
 
 27.3 
 % 
 
 BBB+, BBB, BBB- 
 
 445,290 
 
 447,141 
 
 21.7 
 % 
 
 BB+ or lower 
 
 5,773 
 
 5,328 
 
 0.3 
 % 
 
 Total fixed maturities (1) 
 
 $ 
 2,040,852 
 
 $ 
 2,059,560 
 
 100.0 
 % 
 
 19 

 MAIDEN HOLDINGS, LTD. 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 
 (in thousands of U.S. dollars, except share and per share data) 

 4. Investments (continued) 
 
 December 31, 2018 
 
 Amortized cost 
 
 Fair value 
 
 % of Total 
fair value 
 
 U.S. treasury bonds 
 
 $ 
 138,625 
 
 $ 
 139,072 
 
 3.4 
 % 
 
 U.S. agency bonds 
 
 1,615,457 
 
 1,582,367 
 
 39.1 
 % 
 
 AAA 
 
 137,172 
 
 135,119 
 
 3.3 
 % 
 
 AA+, AA, AA- 
 
 183,142 
 
 178,674 
 
 4.4 
 % 
 
 A+, A, A- 
 
 1,132,993 
 
 1,113,710 
 
 27.5 
 % 
 
 BBB+, BBB, BBB- 
 
 866,043 
 
 848,348 
 
 21.0 
 % 
 
 BB+ or lower 
 
 52,229 
 
 52,290 
 
 1.3 
 % 
 
 Total fixed maturities (1) 
 
 $ 
 4,125,661 
 
 $ 
 4,049,580 
 
 100.0 
 % 
 
 (1) 
 Ratings above are based on Standard & Poor’s ("S&P"), or equivalent, ratings . 
 
 b) 
 Other Investments 
 
 The table below shows our portfolio of other investments: 
 
 September 30, 2019 
 
 December 31, 2018 
 
 Fair value 
 
 % of Total 
fair value 
 
 Fair value 
 
 % of Total 
fair value 
 
 Investment in limited partnerships 
 
 $ 
 3,079 
 
 10.1 
 % 
 
 $ 
 3,833 
 
 16.2 
 % 
 
 Investment in special purpose vehicles focused on lending activities 
 
 25,533 
 
 84.0 
 % 
 
 18,383 
 
 77.5 
 % 
 
 Other 
 
 1,800 
 
 5.9 
 % 
 
 1,500 
 
 6.3 
 % 
 
 Total other investments 
 
 $ 
 30,412 
 
 100.0 
 % 
 
 $ 
 23,716 
 
 100.0 
 % 
 
 The Company has a remaining unfunded commitment on its investment in limited partnerships of approximately $ 340 at September 30, 2019 ( December 31, 2018 - $ 414 ). The Company also has a remaining unfunded commitment on its investment in special purpose vehicles focused on lending activities of approximately $ 1,358 at September 30, 2019 ( December 31, 2018 - $ 7,359 ). 
 
 c) 
 Net Investment Income 
 
 Net investment income was derived from the following sources: 
 
 For the Three Months Ended September 30, 
 
 For the Nine Months Ended September 30, 
 
 2019 
 
 2018 
 
 2019 
 
 2018 
 
 Fixed maturities 
 
 $ 
 19,798 
 
 $ 
 32,443 
 
 $ 
 69,540 
 
 $ 
 97,485 
 
 Funds withheld interest 
 
 5,267 
 
 234 
 
 14,973 
 
 347 
 
 Loan to related party 
 
 1,777 
 
 1,658 
 
 5,441 
 
 4,651 
 
 Cash and cash equivalents and other 
 
 599 
 
 1,142 
 
 2,190 
 
 2,310 
 
 27,441 
 
 35,477 
 
 92,144 
 
 104,793 
 
 Interest paid on LPT/ADC and Commutation (1) 
 
 ( 13,596 
 ) 
 
 — 
 
 ( 13,596 
 ) 
 
 — 
 
 Investment expenses 
 
 ( 622 
 ) 
 
 ( 1,058 
 ) 
 
 ( 2,181 
 ) 
 
 ( 3,245 
 ) 
 
 Net investment income 
 
 $ 
 13,223 
 
 $ 
 34,419 
 
 $ 
 76,367 
 
 $ 
 101,548 
 
 (1) Interest expense includes: (1) Maiden Bermuda paid Enstar approximately $ 7,261 in interest related to the LPT/ADC Agreement premium, calculated at the rate of 2.64 % per annum from January 1, 2019 through August 12, 2019 ; (2) Maiden Bermuda paid AII approximately $ 6,335 in interest related to the Commutation Payment premium, calculated at the rate of 3.30 % per annum from January 1, 2019 through August 12, 2019 . Settlement of funding for the LPT/ADC Agreement and Commutation Payment occurred on August 12, 2019 by Maiden Bermuda's transfer of cash and invested assets as described in "Note 1. Basis of Presentation". 
 
 20 

 MAIDEN HOLDINGS, LTD. 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 
 (in thousands of U.S. dollars, except share and per share data) 

 4. Investments (continued) 
 
 d) 
 Realized Gains (Losses) on Investment 
 
 Realized gains or losses on the sale of investments are determined on the basis of the first in first out cost method. The following provides an analysis of net realized gains (losses) on investment included in the Condensed Consolidated Statements of Income: 
 
 For the Three Months Ended September 30, 2019 
 
 Gross gains 
 
 Gross losses 
 
 Net 
 
 AFS fixed maturities 
 
 $ 
 13,506 
 
 $ 
 ( 904 
 ) 
 
 $ 
 12,602 
 
 Other investments 
 
 98 
 
 — 
 
 98 
 
 Net realized gains (losses) on investment 
 
 $ 
 13,604 
 
 $ 
 ( 904 
 ) 
 
 $ 
 12,700 
 
 For the Three Months Ended September 30, 2018 
 
 Gross gains 
 
 Gross losses 
 
 Net 
 
 AFS fixed maturities 
 
 $ 
 40 
 
 $ 
 ( 558 
 ) 
 
 $ 
 ( 518 
 ) 
 
 Other investments 
 
 293 
 
 — 
 
 293 
 
 Net realized gains (losses) on investment 
 
 $ 
 333 
 
 $ 
 ( 558 
 ) 
 
 $ 
 ( 225 
 ) 
 
 For the Nine Months Ended September 30, 2019 
 
 Gross gains 
 
 Gross losses 
 
 Net 
 
 AFS fixed maturities 
 
 $ 
 41,366 
 
 $ 
 ( 15,785 
 ) 
 
 $ 
 25,581 
 
 Other investments 
 
 249 
 
 ( 145 
 ) 
 
 104 
 
 Net realized gains (losses) on investment 
 
 $ 
 41,615 
 
 $ 
 ( 15,930 
 ) 
 
 $ 
 25,685 
 
 For the Nine Months Ended September 30, 2018 
 
 Gross gains 
 
 Gross losses 
 
 Net 
 
 AFS fixed maturities 
 
 $ 
 2,979 
 
 $ 
 ( 5,256 
 ) 
 
 $ 
 ( 2,277 
 ) 
 
 Other investments 
 
 1,995 
 
 — 
 
 1,995 
 
 Net realized gains (losses) on investment 
 
 $ 
 4,974 
 
 $ 
 ( 5,256 
 ) 
 
 $ 
 ( 282 
 ) 
 
 Proceeds from sales of AFS fixed maturities were $ 136,347 and $ 845,962 for the three and nine months ended September 30, 2019 , respectively ( 2018 - $ 68,534 and $ 185,089 , respectively). 
 Net unrealized gains (losses) on investments, including those allocated to discontinued operations and classified as held for sale, were as follows: 
 
 September 30, 2019 
 
 December 31, 2018 
 
 Fixed maturities 
 
 $ 
 18,708 
 
 $ 
 ( 59,729 
 ) 
 
 Deferred income tax 
 
 ( 126 
 ) 
 
 ( 33 
 ) 
 
 Net unrealized gains (losses), net of deferred income tax 
 
 $ 
 18,582 
 
 $ 
 ( 59,762 
 ) 
 
 Change, net of deferred income tax 
 
 $ 
 78,344 
 
 $ 
 ( 81,651 
 ) 
 
 The portion of net unrealized gains (losses) recognized in net loss for the three and nine months ended September 30, 2019 and 2018 that are related to other investments still held at the end of the reporting period were as follows: 
 
 For the Three Months Ended September 30, 
 
 2019 
 
 2018 
 
 Net gains recognized in net income on other investments during the period 
 
 $ 
 98 
 
 $ 
 293 
 
 Net realized gains recognized on other investments divested during the period 
 
 ( 181 
 ) 
 
 ( 758 
 ) 
 
 Net unrealized losses recognized on other investments still held at end of period 
 
 $ 
 ( 83 
 ) 
 
 $ 
 ( 465 
 ) 
 
 For the Nine Months Ended September 30, 
 
 2019 
 
 2018 
 
 Net gains recognized in net income on other investments during the period 
 
 $ 
 104 
 
 $ 
 1,995 
 
 Net realized gains recognized on other investments divested during the period 
 
 ( 592 
 ) 
 
 ( 1,637 
 ) 
 
 Net unrealized (losses) gains recognized on other investments still held at end of period 
 
 $ 
 ( 488 
 ) 
 
 $ 
 358 
 
 21 

 MAIDEN HOLDINGS, LTD. 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 
 (in thousands of U.S. dollars, except share and per share data) 

 4. Investments (continued) 
 
 e) 
 Restricted Cash and Cash Equivalents and Investments 
 
 We are required to maintain assets on deposit to support our reinsurance operations and to serve as collateral for our reinsurance liabilities under various reinsurance agreements. We also utilize trust accounts to collateralize business with our reinsurance counterparties. The assets in trust as collateral are primarily cash and highly rated fixed maturities. The fair value of our restricted assets was as follows: 
 
 September 30, 2019 
 
 December 31, 2018 
 
 Restricted cash – third party agreements 
 
 $ 
 21,346 
 
 $ 
 21,420 
 
 Restricted cash – related party agreements 
 
 11,825 
 
 108,728 
 
 Total restricted cash 
 
 33,171 
 
 130,148 
 
 Restricted investments – in trust for third party agreements at fair value ( amortized cost: 2019 – $63,824; 2018 – $88,841) 
 
 63,841 
 
 89,596 
 
 Restricted investments – in trust for related party agreements at fair value (amo rtized cost: 2019 – $1,585,010; 2018 – $3,870,731) 
 
 1,601,064 
 
 3,804,215 
 
 Total restricted investments 
 
 1,664,905 
 
 3,893,811 
 
 Total restricted cash and investments 
 
 $ 
 1,698,076 
 
 $ 
 4,023,959 
 
 5. Fair Value of Financial Instruments 
 (a) Fair Values of Financial Instruments 
 Fair Value Measurements — ASC Topic 820, "Fair Value Measurements and Disclosures" ("ASC 820") defines fair value as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between open market participants at the measurement date. Additionally, ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The hierarchy is broken down into three levels based on the reliability of inputs as follows: 
 
 • 
 Level 1 — Valuations based on unadjusted quoted market prices for identical assets or liabilities that we have the ability to access. Because valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. Examples of assets and liabilities utilizing Level 1 inputs include: U.S. Treasury bonds; 
 
 • 
 Level 2 — Valuations based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets or liabilities in inactive markets, or valuations based on models where the significant inputs are observable (e.g. interest rates, yield curves, prepayment speeds, default rates, loss severities, etc.) or can be corroborated by observable market data. Examples of assets and liabilities utilizing Level 2 inputs include: U.S. government-sponsored agency securities; non-U.S. government and supranational obligations; commercial mortgage-backed securities ("CMBS"); collateralized loan obligations ("CLO"); corporate and municipal bonds; and 
 
 • 
 Level 3 — Valuations based on models where significant inputs are not observable. The unobservable inputs reflect our own assumptions about assumptions that market participants would use. Examples of assets and liabilities utilizing Level 3 inputs include: an investment in preference shares of a start-up insurance producer. 
 
 The availability of observable inputs can vary and is affected by a wide variety of factors, including, for example, the type of financial instrument, whether the financial instrument is new and not yet established in the marketplace, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires significantly more judgment. Accordingly, the degree of judgment exercised by management in determining fair value is greatest for instruments categorized in Level 3. We use prices and inputs that are current at the measurement date. In periods of market dislocation, the observability of prices and inputs may be reduced for many instruments. This condition could cause an instrument to be reclassified between levels. 
 For investments that have quoted market prices in active markets, the Company uses the quoted market prices as fair value and includes these in the Level 1 hierarchy. The Company receives the quoted market prices from a third party nationally recognized provider ("the Pricing Service"). When quoted market prices are unavailable, the Company utilizes the Pricing Service to determine an estimate of fair value. The fair value estimates are included in the Level 2 hierarchy. The Company will challenge any prices for its investments which are considered not to be representative of fair value. If quoted market prices and an estimate from the Pricing Service are unavailable, the Company produces an estimate of fair value based on dealer quotations for recent activity in positions with the same or similar characteristics to that being valued. The Company determines whether the fair value estimate is in the Level 2 or Level 3 hierarchy depending on the level of observable inputs available when estimating the fair value. 
 
 22 

 MAIDEN HOLDINGS, LTD. 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 
 (in thousands of U.S. dollars, except share and per share data) 

 5. Fair Value of Financial Instruments (continued) 
 The Company bases its estimates of fair values for assets on the bid price as it represents what a third party market participant would be willing to pay in an orderly transaction. 
 ASC 825, "Disclosure About Fair Value of Financial Instruments" , requires all entities to disclose the fair value of their financial instruments, both assets and liabilities recognized and not recognized in the balance sheet, for which it is practicable to estimate fair value. The following describes the valuation techniques used by the Company to determine the fair value of financial instruments held at September 30, 2019 and December 31, 2018 . 
 U.S. government and U.S. agency — Bonds issued by the U.S. Treasury, the Federal Home Loan Bank, the Federal Home Loan Mortgage Corporation, Government National Mortgage Association, Federal National Mortgage Association and the Federal Farm Credit Banks Funding Corporation. The fair values of U.S. treasury bonds are based on quoted market prices in active markets, and are included in the Level 1 fair value hierarchy. We believe the market for U.S. treasury bonds is an actively traded market given the high level of daily trading volume. The fair values of U.S. agency bonds are determined using the spread above the risk-free yield curve. As the yields for the risk-free yield curve and the spreads for these securities are observable market inputs, the fair values of U.S. agency bonds are included in the Level 2 fair value hierarchy. 
 Non-U.S. government and supranational bonds — These securities are generally priced by independent pricing services. The Pricing Service may use current market trades for securities with similar quality, maturity and coupon. If no such trades are available, the Pricing Service typically uses analytical models which may incorporate spreads, interest rate data and market/sector news. As the significant inputs used to price non-U.S. government and supranational bonds are observable market inputs, the fair values of non-U.S. government and supranational bonds are included in the Level 2 fair value hierarchy. 
 Asset-backed securities — These securities comprise CMBS and CLO originated by a variety of financial institutions that on acquisition are rated BBB-/Baa3 or higher. These securities are priced by independent pricing services and brokers. The pricing provider applies dealer quotes and other available trade information, prepayment speeds, yield curves and credit spreads to the valuation. As the significant inputs used to price the CMBS and CLO are observable market inputs, the fair value of the CMBS and CLO securities are included in the Level 2 fair value hierarchy. 
 Corporate bonds — Bonds issued by corporations that on acquisition are rated BBB-/Baa3 or higher. These securities are generally priced by independent pricing services. The spreads are sourced from broker/dealers, trade prices and the new issue market. Where pricing is unavailable from pricing services, we obtain non-binding quotes from broker-dealers. As the significant inputs used to price corporate bonds are observable market inputs, the fair values of corporate bonds are included in the Level 2 fair value hierarchy. 
 Municipal bonds — Bonds issued by U.S. state and municipality entities or agencies. The fair values of municipal bonds are generally priced by independent pricing services. The pricing services typically use spreads obtained from broker-dealers, trade prices and the new issue market. As the significant inputs used to price the municipal bonds are observable market inputs, municipal bonds are included in the Level 2 fair value hierarchy. 
 Other investments — Includes unquoted investments comprised of investments in limited partnerships and other investments which includes investments in special purpose vehicles focused on lending activities as well as investments in start-up insurance entities. The fair values of the limited partnerships are determined by the fund manager based on recent filings, operating results, balance sheet stability, growth and other business and market sector fundamentals. The fair value of these investments are measured using the NAV practical expedient and therefore have not been categorized within the fair value hierarchy. If there is a reporting lag between the current period end and reporting date of the latest available fund valuation, we estimate fair values by starting with the most recently available valuation and adjusting for return estimates as well as any subscriptions and distributions that took place during the current period. The fair value of the investments in special purpose vehicles focused on lending activities is initially at cost which approximates fair value. In some cases this initial period could be more than a year depending on the nature of the investment. Currently, all of our investments in special purpose vehicles focused on lending activities are held at cost which approximates fair value. In subsequent measurement periods, the fair values of these investments may be determined using an internally developed discounted cash flow model. As the significant inputs used to price these securities are unobservable, the fair value of these investments are classified as Level 3. The fair value of the remaining other investments, primarily start-up insurance entities, was determined using recent private market transactions and as such, the fair value is included in the Level 3 fair value hierarchy. 
 Cash and cash equivalents (including restricted amounts), accrued investment income, reinsurance balances receivable, and certain other assets and liabilities — The carrying values reported in the Condensed Consolidated Balance Sheets for these financial instruments approximate their fair value due to their short term nature and are classified as Level 2. 
 Loan to related party, reinsurance recoverable on unpaid losses, and funds withheld receivable — The carrying values reported in the Condensed Consolidated Balance Sheets for these financial instruments approximate their fair value and are included in the Level 2 hierarchy. 
 Senior notes — The amount reported in the Condensed Consolidated Balance Sheets for these financial instruments represents the carrying value of the notes. The fair values are based on indicative market pricing obtained from a third-party service provider and as such, are included in the Level 2 hierarchy. 
 
 23 

 MAIDEN HOLDINGS, LTD. 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 
 (in thousands of U.S. dollars, except share and per share data) 

 5. Fair Value of Financial Instruments (continued) 
 (b) Fair Value Hierarchy 
 The Company’s estimates of fair value for financial assets and financial liabilities are based on the framework established in ASC 820. The framework is based on the inputs used in valuation and gives the highest priority to quoted prices in active markets and requires that observable inputs be used in the valuations when available. The disclosure of fair value estimates in the ASC 820 hierarchy is based on whether the significant inputs into the valuation are observable. In determining the level of the hierarchy in which the estimate is disclosed, the highest priority is given to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs that reflect the Company’s significant market assumptions. 
 At September 30, 2019 and December 31, 2018 , we classified our financial instruments measured at fair value on a recurring basis in the following valuation hierarchy: 
 
 September 30, 2019 
 
 Quoted Prices in Active Markets for Identical Assets (Level 1) 
 
 Significant Other Observable Inputs (Level 2) 
 
 Significant Unobservable Inputs (Level 3) 
 
 Fair Value Based on NAV Practical Expedient 
 
 Total Fair Value 
 
 AFS fixed maturities 
 
 U.S. treasury bonds 
 
 $ 
 95,751 
 
 $ 
 — 
 
 $ 
 — 
 
 $ 
 — 
 
 $ 
 95,751 
 
 U.S. agency bonds – mortgage-backed 
 
 — 
 
 758,990 
 
 — 
 
 — 
 
 758,990 
 
 Non-U.S. government and supranational bonds 
 
 — 
 
 11,760 
 
 — 
 
 — 
 
 11,760 
 
 Asset-backed securities 
 
 — 
 
 173,226 
 
 — 
 
 — 
 
 173,226 
 
 Corporate bonds 
 
 — 
 
 1,015,656 
 
 — 
 
 — 
 
 1,015,656 
 
 Municipal bonds 
 
 — 
 
 4,177 
 
 — 
 
 — 
 
 4,177 
 
 Other investments 
 
 — 
 
 — 
 
 27,333 
 
 3,079 
 
 30,412 
 
 Total 
 
 $ 
 95,751 
 
 $ 
 1,963,809 
 
 $ 
 27,333 
 
 $ 
 3,079 
 
 $ 
 2,089,972 
 
 As a percentage of total assets 
 
 2.5 
 % 
 
 51.8 
 % 
 
 0.7 
 % 
 
 0.1 
 % 
 
 55.1 
 % 
 
 December 31, 2018 
 
 Quoted Prices in Active Markets for Identical Assets (Level 1) 
 
 Significant Other Observable Inputs (Level 2) 
 
 Significant Unobservable Inputs (Level 3) 
 
 Fair Value Based on NAV Practical Expedient 
 
 Total Fair Value 
 
 AFS fixed maturities 
 
 U.S. treasury bonds 
 
 $ 
 139,072 
 
 $ 
 — 
 
 $ 
 — 
 
 $ 
 — 
 
 $ 
 139,072 
 
 U.S. agency bonds – mortgage-backed 
 
 — 
 
 1,453,134 
 
 — 
 
 — 
 
 1,453,134 
 
 U.S. agency bonds – other 
 
 — 
 
 129,233 
 
 — 
 
 — 
 
 129,233 
 
 Non-U.S. government and supranational bonds 
 
 — 
 
 10,072 
 
 — 
 
 — 
 
 10,072 
 
 Asset-backed securities 
 
 — 
 
 215,082 
 
 — 
 
 — 
 
 215,082 
 
 Corporate bonds 
 
 — 
 
 1,104,975 
 
 — 
 
 — 
 
 1,104,975 
 
 Other investments 
 
 — 
 
 — 
 
 19,883 
 
 3,833 
 
 23,716 
 
 Total 
 
 $ 
 139,072 
 
 $ 
 2,912,496 
 
 $ 
 19,883 
 
 $ 
 3,833 
 
 $ 
 3,075,284 
 
 As a percentage of total assets 
 
 2.6 
 % 
 
 55.1 
 % 
 
 0.4 
 % 
 
 0.1 
 % 
 
 58.2 
 % 
 
 The Company utilizes the Pricing Service to assist in determining the fair value of our investments; however, management is ultimately responsible for all fair values presented in the Company’s financial statements. This includes responsibility for monitoring the fair value process, ensuring objective and reliable valuation practices and pricing of assets and liabilities and pricing sources. The Company analyzes and reviews the information and prices received from the Pricing Service to ensure that the prices represent a reasonable estimate of the fair value. 
 The Pricing Service was utilized to estimate fair value measurements for approximately 99.7 % and 99.9 % of our fixed maturities at September 30, 2019 and December 31, 2018 , respectively. The Pricing Service utilizes market quotations for fixed maturity securities that have quoted market prices in active markets. Since fixed maturities other than U.S. treasury bonds generally do not trade actively on a daily basis, the Pricing Service prepares estimates of fair value measurements using relevant market data, benchmark curves, sector groupings and matrix pricing and these have been classified as Level 2. 
 
 24 

 MAIDEN HOLDINGS, LTD. 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 
 (in thousands of U.S. dollars, except share and per share data) 

 5. Fair Value of Financial Instruments (continued) 
 At September 30, 2019 and December 31, 2018 , approximately 0.3 % and 0.1 % , respectively, of the Level 2 fixed maturities are valued using the market approach. At September 30, 2019 and December 31, 2018 , one security or $ 5,328 and $ 5,676 , respectively, of Level 2 fixed maturities, was priced using a quotation from a broker and/or custodian as opposed to the Pricing Service due to lack of information available. At September 30, 2019 and December 31, 2018 , we have not adjusted any pricing provided to us based on the review performed by our investment managers. 
 There were no transfers between Level 1 and Level 2 and there were no transfers to or from Level 3 during the periods represented by these Condensed Consolidated Financial Statements. 
 (c) Level 3 Financial Instruments 
 At September 30, 2019 , the Company has other investments of $ 27,333 (December 31, 2018 - $ 19,883 ) which includes investments in special purpose vehicles focused on lending activities as well as investments in start-up insurance entities. The fair value of the investments in special purpose vehicles focused on lending activities is initially at cost which approximates fair value. In subsequent measurement periods, the fair values of these investments may be determined using an internally developed discounted cash flow model. The fair value of investments in start-up insurance entities was determined using recent private market transactions. Due to the significant unobservable inputs in these valuations, the Company includes the estimate of the fair value of each of these other investments as Level 3. 
 (d) Financial Instruments not measured at Fair Value 
 The following table presents the fair value and carrying value or principal amount of the financial instruments not measured at fair value: 
 
 September 30, 2019 
 
 December 31, 2018 
 
 Financial Assets 
 
 Carrying Value 
 
 Fair Value 
 
 Carrying Value 
 
 Fair Value 
 
 HTM – corporate bonds 
 
 $ 
 — 
 
 $ 
 — 
 
 $ 
 957,845 
 
 $ 
 940,727 
 
 HTM – municipal bonds 
 
 — 
 
 — 
 
 57,836 
 
 57,285 
 
 Total financial assets 
 
 $ 
 — 
 
 $ 
 — 
 
 $ 
 1,015,681 
 
 $ 
 998,012 
 
 Financial Liabilities 
 
 Senior Notes - MHLA – 6.625% 
 
 $ 
 110,000 
 
 $ 
 78,540 
 
 $ 
 110,000 
 
 $ 
 75,240 
 
 Senior Notes - MHNC – 7.75% 
 
 152,500 
 
 133,590 
 
 152,500 
 
 143,960 
 
 Total financial liabilities 
 
 $ 
 262,500 
 
 $ 
 212,130 
 
 $ 
 262,500 
 
 $ 
 219,200 
 
 25 

 MAIDEN HOLDINGS, LTD. 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 
 (in thousands of U.S. dollars, except share and per share data) 

 6. Discontinued Operations 
 Sale of U.S. Treaty Reinsurance operations 
 As described in " Note 1. Basis of Presentation ", the Company entered into a Renewal Rights transaction with TransRe on August 29, 2018. The Company continued to earn premiums and remain liable for losses occurring subsequent to August 29, 2018 for any policies in force prior to and as of August 29, 2018, through December 27, 2018, the date the sale of Maiden US was closed pursuant to the U.S. Sale Agreement with Enstar Holdings. 
 Maiden US was a substantial portion of our Diversified Reinsurance segment; therefore the Company concluded that the sale represented a strategic shift that has a major effect on its ongoing operations and financial results and that all of the held for sale criteria have been met. Accordingly, all transactions related to the U.S. treaty reinsurance operations are reported and presented as part of discontinued operations and all of the remaining assets and liabilities related to the true up of sale consideration are classified as held for sale in the Consolidated Balance Sheet as at December 31, 2018 . 
 As described in "Note 1. Basis of Presentation", Cavello and Maiden Bermuda entered into a retrocession agreement pursuant to which certain assets and liabilities associated with the U.S. treaty reinsurance business held by Maiden Bermuda were retroceded to Cavello on December 27, 2018. Previously, the assets and liabilities related to this business including the retrocession agreement were classified as held for sale, however, a decision has been made to reclassify them as held and used in the current period as it is now considered unlikely that these reserves will be novated in the foreseeable future; therefore, there are no remaining assets and liabilities classified as held for sale as at September 30, 2019 . Furthermore, the assets and liabilities related to this business as at December 31, 2018 have been reclassified from held for sale to conform to the current presentation. 
 The assets and liabilities that are classified as held for sale as of September 30, 2019 and December 31, 2018 comprise: 
 
 September 30, 2019 
 
 December 31, 2018 
 
 ASSETS 
 
 Fixed maturities, available-for-sale, at fair value 
 
 $ 
 — 
 
 $ 
 63,560 
 
 Restricted cash and cash equivalents 
 
 — 
 
 6,113 
 
 Other assets 
 
 — 
 
 33,955 
 
 Total assets held for sale 
 
 $ 
 — 
 
 $ 
 103,628 
 
 LIABILITIES 
 
 Reserve for loss and loss adjustment expenses 
 
 $ 
 — 
 
 $ 
 6,363 
 
 Accrued expenses and other liabilities 
 
 — 
 
 78,751 
 
 Total liabilities held for sale 
 
 $ 
 — 
 
 $ 
 85,114 
 
 The following table summarizes the major classes of items constituting the results from discontinued operations for the three and nine months ended September 30, 2019 and 2018 , respectively, presented in the Condensed Consolidated Statements of Income: 
 
 For the Three Months Ended September 30, 
 
 For the Nine Months Ended September 30, 
 
 2019 
 
 2018 
 
 2019 
 
 2018 
 
 Gross premiums written 
 
 $ 
 — 
 
 $ 
 130,200 
 
 $ 
 — 
 
 $ 
 492,222 
 
 Net premiums written 
 
 $ 
 — 
 
 $ 
 128,398 
 
 $ 
 — 
 
 $ 
 479,640 
 
 Net premiums earned 
 
 $ 
 — 
 
 $ 
 170,579 
 
 $ 
 — 
 
 $ 
 502,156 
 
 Other revenue 
 
 — 
 
 — 
 
 62 
 
 — 
 
 Net investment income 
 
 — 
 
 9,675 
 
 — 
 
 29,729 
 
 Net loss and loss adjustment expenses 
 
 — 
 
 ( 129,414 
 ) 
 
 6,363 
 
 ( 371,085 
 ) 
 
 Commission and other acquisition expenses 
 
 — 
 
 ( 44,158 
 ) 
 
 — 
 
 ( 122,109 
 ) 
 
 General and administrative expenses 
 
 ( 351 
 ) 
 
 ( 10,658 
 ) 
 
 ( 2,183 
 ) 
 
 ( 19,651 
 ) 
 
 Amortization of intangible assets 
 
 — 
 
 ( 462 
 ) 
 
 — 
 
 ( 1,386 
 ) 
 
 (Loss) income from discontinued operations before income tax 
 
 ( 351 
 ) 
 
 ( 4,438 
 ) 
 
 4,242 
 
 17,654 
 
 Loss on disposal of discontinued operations 
 
 — 
 
 ( 66,697 
 ) 
 
 ( 25,474 
 ) 
 
 ( 66,697 
 ) 
 
 Income tax benefit (expense) 
 
 74 
 
 11,316 
 
 ( 1,095 
 ) 
 
 7,434 
 
 Loss from discontinued operations, net of income tax 
 
 $ 
 ( 277 
 ) 
 
 $ 
 ( 59,819 
 ) 
 
 $ 
 ( 22,327 
 ) 
 
 $ 
 ( 41,609 
 ) 
 
 As described in "Note 1. Basis of Presentation", as a result of the Settlement and Commutation Agreement entered into by Maiden and Enstar Holdings on July 31, 2019, Maiden recorded an additional loss from discontinued operations of $ 16,715 for the nine months ended September 30, 2019 . 
 
 26 

 MAIDEN HOLDINGS, LTD. 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 
 (in thousands of U.S. dollars, except share and per share data) 

 7. Long-Term Debt 
 Senior Notes 
 At September 30, 2019 and December 31, 2018 , both Maiden Holdings and its wholly owned subsidiary, Maiden NA, have outstanding publicly-traded debt offering of senior notes which were issued in 2016 and 2013, respectively ("Senior Notes"). The 2013 Senior Notes issued by Maiden NA are fully and unconditionally guaranteed by Maiden Holdings. The Senior Notes are unsecured and unsubordinated obligations of the Company. 
 The following table details the Company's Senior Notes issuances outstanding at September 30, 2019 and December 31, 2018 : 
 
 September 30, 2019 
 
 2016 Senior Notes 
 
 2013 Senior Notes 
 
 Total 
 
 Principal amount 
 
 $ 
 110,000 
 
 $ 
 152,500 
 
 $ 
 262,500 
 
 Less: unamortized issuance costs 
 
 3,576 
 
 4,070 
 
 7,646 
 
 Carrying value 
 
 $ 
 106,424 
 
 $ 
 148,430 
 
 $ 
 254,854 
 
 December 31, 2018 
 
 2016 Senior Notes 
 
 2013 Senior Notes 
 
 Total 
 
 Principal amount 
 
 $ 
 110,000 
 
 $ 
 152,500 
 
 $ 
 262,500 
 
 Less: unamortized issuance costs 
 
 3,610 
 
 4,196 
 
 7,806 
 
 Carrying value 
 
 $ 
 106,390 
 
 $ 
 148,304 
 
 $ 
 254,694 
 
 Other details: 
 
 Original debt issuance costs 
 
 $ 
 3,715 
 
 $ 
 5,054 
 
 Maturity date 
 
 June 14, 2046 
 
 Dec 1, 2043 
 
 Earliest redeemable date (for cash) 
 
 June 14, 2021 
 
 Dec 1, 2018 
 
 Coupon rate 
 
 6.625 
 % 
 
 7.75 
 % 
 
 Effective interest rate 
 
 7.07 
 % 
 
 8.04 
 % 
 
 The interest expense incurred on the Senior Notes for the three and nine months ended September 30, 2019 was $ 4,777 and $ 14,330 , respectively ( 2018 - $ 4,776 and $ 14,329 , respectively) of which $ 1,342 was accrued at both September 30, 2019 and December 31, 2018 , respectively. The issuance costs related to the Senior Notes were capitalized and are being amortized over the effective life of the Senior Notes. The amortization expense for the three and nine months ended September 30, 2019 was $ 54 and $ 160 , respectively ( 2018 - $ 53 and $ 158 , respectively). 
 Under the terms of the 2013 Senior Notes, the 2013 Senior Notes can be redeemed, in whole or in part after December 1, 2018 at Maiden NA's option at any time and from time to time, until maturity at a redemption price equal to 100 % of the principal amount of the notes to be redeemed plus accrued but unpaid interest on the principal amount being redeemed to, but not including, the redemption date. Maiden NA is required to give at least thirty and not more than sixty days notice prior to the redemption date. However, as part of the Company's remediation measures to improve its capital ratios and adequacy, Maiden has voluntarily undertaken with the BMA to not voluntarily redeem the 2013 Senior Notes without its prior written approval. 
 
 27 

 MAIDEN HOLDINGS, LTD. 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 
 (in thousands of U.S. dollars, except share and per share data) 

 8. Reinsurance 
 The Company uses reinsurance and retrocessional agreements ("ceded reinsurance") to mitigate volatility, reduce its exposure to certain risks and provide capital support. Additionally, Maiden Bermuda entered into a number of retrocessional quota share agreements with a highly rated global insurer to cede certain lines of business from both of our reportable segments. Effective July 1, 2018, Maiden Bermuda commuted all of these retrocessional quota share agreements. 
 Effective on July 31, 2019, Maiden Bermuda and Cavello entered into a retroactive reinsurance agreement, the LPT/ADC Agreement, pursuant to which, Cavello will assume liabilities for the loss reserves as of December 31, 2018 associated with the AmTrust Quota Share in excess of a $ 2,178,535 retention up to $ 600,000 , in exchange for a retrocession premium of $ 445,000 . The $ 2,178,535 retention will be subject to adjustment for paid losses subsequent to December 31, 2018 . Please see " Note 1. Basis of Presentation " for further details. 
 Each of these agreements provide for recovery from reinsurers or retrocessionaires of a portion of loss and LAE under certain circumstances without relieving the Company of its obligations to the policyholders. The Company remains liable to the extent that any of our reinsurers or retrocessionaires fails to meet their obligations. Loss and LAE incurred and premiums earned are reported after deduction for reinsurance and retrocession. In the event that one or more of our reinsurers or retrocessionaires are unable to meet their obligations under these reinsurance or retrocessional agreements, the Company would not realize the full value of the reinsurance recoverable balances. The effect of ceded reinsurance on net premiums written and earned and on net loss and LAE for the nine months ended September 30, 2019 and 2018 was as follows: 
 
 For the Nine Months Ended September 30, 
 
 2019 
 
 2018 
 
 Premiums written 
 
 Direct 
 
 $ 
 12,819 
 
 $ 
 8,074 
 
 Assumed 
 
 ( 535,997 
 ) 
 
 1,621,273 
 
 Ceded 
 
 ( 2,817 
 ) 
 
 ( 2,862 
 ) 
 
 Net 
 
 $ 
 ( 525,995 
 ) 
 
 $ 
 1,626,485 
 
 Premiums earned 
 
 Direct 
 
 $ 
 11,903 
 
 $ 
 7,797 
 
 Assumed 
 
 402,197 
 
 1,549,339 
 
 Ceded 
 
 ( 2,114 
 ) 
 
 ( 15,858 
 ) 
 
 Net 
 
 $ 
 411,986 
 
 $ 
 1,541,278 
 
 Loss and LAE 
 
 Gross loss and LAE 
 
 $ 
 415,429 
 
 $ 
 1,328,591 
 
 Loss and LAE ceded 
 
 ( 319 
 ) 
 
 ( 5,088 
 ) 
 
 Net 
 
 $ 
 415,110 
 
 $ 
 1,323,503 
 
 The Company's reinsurance recoverable on unpaid losses balance at September 30, 2019 was $ 615,481 ( December 31, 2018 - $ 71,901 ) presented in the Condensed Consolidated Balance Sheets. At September 30, 2019 and 2018 , the Company had no valuation allowance against reinsurance recoverable on unpaid losses. 
 As discussed in "Note 1. Organization" , on December 27, 2018, Cavello and Maiden Bermuda entered into a retrocession agreement pursuant to which certain assets and liabilities associated with the U.S. treaty reinsurance business held by Maiden Bermuda were retroceded to Cavello in exchange for a ceding commission. The balance of reinsurance recoverable on unpaid losses due from Cavello under this retrocession agreement was $ 64,018 at September 30, 2019 ( December 31, 2018 - $ 70,158 ). 
 Additionally, the LPT/ADC Agreement discussed above provides Maiden Bermuda with $ 155,000 in adverse development cover over its carried AmTrust Quota Share loss reserves at December 31, 2018 . The LPT/ADC Agreement meets the criteria for risk transfer and is thus accounted for as retroactive reinsurance. Cumulative ceded losses exceeding $ 445,000 are recognized as a deferred gain liability and amortized into income over the settlement period of the ceded reserves in proportion to cumulative losses collected over the estimated ultimate reinsurance recoverable. The amount of the deferral is recalculated each period based on loss payments and updated estimates. Consequently, cumulative adverse development subsequent to December 31, 2018 may result in significant losses from operations until periods when the deferred gain is recognized as a benefit to earnings. Reinsurance recoverable on unpaid losses under the retroactive reinsurance agreement were $ 549,542 and the deferred gain liability was $ 104,542 as of September 30, 2019 . Amortization of the deferred gain will not occur until paid losses have exceeded the minimum retention under the ADC. The current estimated payout period for the losses covered by the LPT/ADC Agreement before the minimum retention is exceeded is approximately five years . 
 
 28 

 MAIDEN HOLDINGS, LTD. 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 
 (in thousands of U.S. dollars, except share and per share data) 

 8. Reinsurance (continued) 
 Cavello has provided collateral in the form of a letter of credit in the amount of $ 445,000 to AmTrust under the LPT/ADC Agreement and is subject to additional collateral funding requirements as explained in "Note 10. Related Party Transactions" . Under the terms of the LPT/ADC Agreement, the covered losses associated with the Commutation and Release Agreement with AmTrust, as discussed in " Note 1. Basis of Presentation", are eligible to be covered but recoverable only when such losses are paid or settled by AII or its affiliates, provided such losses and other related amounts shall not exceed $ 312,786 . Cavello's parent company, Enstar, has credit ratings of BBB from both Standard &Poor's and Fitch Ratings at September 30, 2019 . 
 
 9. Reserve for Loss and Loss Adjustment Expenses 
 The Company uses both historical experience and industry-wide loss development factors to provide a reasonable basis for estimating future losses. In the future, certain events may be beyond the control of management, such as changes in law, judicial interpretations of law, and inflation, which may favorably or unfavorably impact the ultimate settlement of the Company’s loss and LAE reserves. 
 The anticipated effect of inflation is implicitly considered when estimating liabilities for loss and LAE. While anticipated changes in claim costs due to inflation are considered in estimating the ultimate claim costs, changes in average severity of claims are caused by a number of factors that vary with the individual type of policy written. Ultimate losses are projected based on historical trends adjusted for implemented changes in underwriting standards, policy provisions, and general economic trends. Those anticipated trends are monitored based on actual development and are modified if necessary. 
 The reserving process begins with the collection and analysis of paid losses and incurred claims data for each of our contracts. While reserves are reviewed on a contract by contract basis, paid losses and incurred claims data is also aggregated into reserving segments. The segmental data is disaggregated by reserving class and further disaggregated by either accident year (i.e. the year in which the loss event occurred) or by underwriting year (i.e. the year in which the contract generating the premium and losses incepted). The Company in some cases uses underwriting year information to analyze our Diversified Reinsurance segment and subsequently allocate reserves to the respective accident years. Our reserve for loss and LAE consists of: 
 
 September 30, 2019 
 
 December 31, 2018 
 
 Reserve for reported loss and LAE 
 
 $ 
 1,360,076 
 
 $ 
 1,619,776 
 
 Reserve for losses incurred but not reported ("IBNR") 
 
 1,265,782 
 
 1,506,358 
 
 Reserve for loss and LAE 
 
 $ 
 2,625,858 
 
 $ 
 3,126,134 
 
 The following table represents a reconciliation of our beginning and ending gross and net loss and LAE reserves: 
 
 For the Nine Months Ended September 30, 
 
 2019 
 
 2018 
 
 Gross loss and LAE reserves, January 1 
 
 $ 
 3,126,134 
 
 $ 
 2,464,442 
 
 Less: reinsurance recoverable on unpaid losses, January 1 
 
 71,901 
 
 24,883 
 
 Net loss and LAE reserves, January 1 
 
 3,054,233 
 
 2,439,559 
 
 Net incurred losses related to: 
 
 Current year 
 
 318,654 
 
 1,073,052 
 
 Prior years 
 
 96,456 
 
 250,451 
 
 415,110 
 
 1,323,503 
 
 Net paid losses related to: 
 
 Current year 
 
 ( 8,969 
 ) 
 
 ( 283,477 
 ) 
 
 Prior years 
 
 ( 872,125 
 ) 
 
 ( 555,718 
 ) 
 
 ( 881,094 
 ) 
 
 ( 839,195 
 ) 
 
 Retroactive reinsurance adjustment 
 
 ( 549,542 
 ) 
 
 — 
 
 Effect of foreign exchange rate movements 
 
 ( 28,330 
 ) 
 
 ( 16,202 
 ) 
 
 Other adjustments 
 
 — 
 
 14,540 
 
 Net loss and LAE reserves, September 30 
 
 2,010,377 
 
 2,922,205 
 
 Reinsurance recoverable on unpaid losses, September 30 
 
 615,481 
 
 1,811 
 
 Gross loss and LAE reserves, September 30 
 
 $ 
 2,625,858 
 
 $ 
 2,924,016 
 
 Commencing in 2015, Maiden Bermuda entered into a number of retrocessional quota share agreements with a highly rated global insurer to cede certain lines of business from both of our reportable segments. Effective July 1, 2018, Maiden Bermuda commuted all of these retrocessional quota share agreements. 
 
 29 

 MAIDEN HOLDINGS, LTD. 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 
 (in thousands of U.S. dollars, except share and per share data) 

 9. Reserve for Loss and Loss Adjustment Expenses (continued) 
 Prior period development arises from changes to loss estimates recognized in the current year that relate to loss reserves in previous calendar years. The development reflects changes in management's best estimate of the ultimate losses under the relevant reinsurance policies after review of changes in actuarial assessments. During the three and nine months ended September 30, 2019 , the Company recognized net adverse prior year loss development of $ 63,184 and $ 96,456 , respectively ( 2018 - adverse $ 212,473 and $ 250,451 , respectively) before the impact of the LPT/ADC Agreement with Cavello. 
 In the Diversified Reinsurance segment, the net prior year loss development was adverse $ 692 and favorable $ 1,456 for the three and nine months ended September 30, 2019 , respectively ( 2018 - adverse $ 671 and $ 1,756 , respectively). The favorable development for the nine months ended September 30, 2019 was primarily due to favorable reserve development in German Auto programs as well as facultative reinsurance run-off lines. The adverse development for the three months ended September 30, 2019 and the three and nine months ended September 30, 2018 was due to facultative reinsurance run-off partially offset by favorable development in International Auto. 
 In the AmTrust Reinsurance segment, the net adverse prior year loss development was $ 62,384 and $ 97,600 for the three and nine months ended September 30, 2019 , respectively ( 2018 - adverse $ 210,433 and $ 247,326 , respectively). The adverse development in the three and nine months ended September 30, 2019 was primarily driven by Commercial Auto and General Liability in accident years 2014 to 2018, partly offset by favorable development in Workers Compensation in accident years 2016 to 2018. The adverse development for the three and nine months ended September 30, 2019 includes $ 27,587 recognized from application of the $ 40,500 loss corridor cap on AmTrust program business (please see "Note 10. Related Party Transactions" for details). The adverse development for 2018 was largely from Workers Compensation which represented nearly half of the adverse development and was primarily driven by accident years 2014 to 2017, and to a lesser extent, development in European Hospital Liability, Commercial Auto and General Liability lines. 
 Reinsurance recoverable on unpaid losses under the LPT/ADC Agreement with Cavello of $ 549,542 , which includes a deferred gain on retroactive reinsurance of $ 104,542 , was recognized in the nine months ended September 30, 2019 in the reconciliation of our beginning and ending gross and net loss and LAE reserves presented above. The deferred gain on retroactive reinsurance represents the cumulative adverse development under the AmTrust Quota Share covered under the LPT/ADC Agreement at September 30, 2019 . Amortization of the deferred gain will not occur until paid losses have exceeded the minimum retention under the LPT/ADC Agreement. The current estimated payout period for the losses covered by the LPT/ADC Agreement before the minimum retention is exceeded is approximately 5 years . 
 Under the Commutation and Release Agreement with AmTrust on July 1, 2019, Maiden Bermuda transferred cash and invested assets in the amount of $ 312,786 which is the sum of the net ceded reserves in the amount of $ 330,682 with respect to the Commuted Business as of December 31, 2018 less payments in the amount of $ 17,896 made by Maiden Bermuda with respect to the Commuted Business from January 1, 2019 through July 31, 2019. Settlement of the commutation occurred on August 12, 2019 and is reflected in the reconciliation of our beginning and ending gross and net loss and LAE reserves presented above under net paid losses related to prior years. 
 The Other category had net adverse prior year loss development of $ 108 and $ 312 for the three and nine months ended September 30, 2019 , respectively, ( 2018 - adverse $ 1,369 , respectively) due to increased reserves in the run-off of the NGHC Quota Share. Please refer to "Note 14. Subsequent Events" for additional information regarding the commutation of this quota share subsequent to September 30, 2019 . 
 
 30 

 MAIDEN HOLDINGS, LTD. 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 
 (in thousands of U.S. dollars, except share and per share data) 

 10. Related Party Transactions 
 The Founding Shareholders of the Company were Michael Karfunkel, George Karfunkel and Barry Zyskind. Michael Karfunkel passed away on April 27, 2016. Based on each individual's most recent public filing, Leah Karfunkel (wife of Michael Karfunkel) owns or controls approximately 8.1 % of the outstanding shares of the Company and Barry Zyskind (the Company's non-executive chairman) owns or controls approximately 7.6 % of the outstanding shares of the Company. George Karfunkel owns or controls less than 5.0 % of the outstanding shares of the Company. Leah Karfunkel and George Karfunkel are directors of AmTrust, and Barry Zyskind is the president, chief executive officer and chairman of AmTrust. Leah Karfunkel, George Karfunkel and Barry Zyskind own or control approximately 53.6 % of the ownership interests of Evergreen Parent LP, the ultimate parent of AmTrust. AmTrust owns 1.5 % of the issued and outstanding shares of National General Holdings Corporation ("NGHC"), and Leah Karfunkel, individually, through a grantor retained annuity trust and through the Michael Karfunkel 2005 Family Trust (which is controlled by Leah Karfunkel) owns 39.4 % of the outstanding common shares of NGHC. Barry Zyskind is a director of NGHC. 
 AmTrust 
 The following describes transactions between the Company and AmTrust: 
 AmTrust Quota Share 
 Effective July 1, 2007, the Company and AmTrust entered into a master agreement, as amended ("Master Agreement"), by which they caused Maiden Bermuda, then a wholly owned subsidiary of the Company, and AmTrust's Bermuda reinsurance subsidiary, AII, to enter into the AmTrust Quota Share by which AII retrocedes to Maiden Bermuda an amount equal to 40 % of the premium written by subsidiaries of AmTrust, net of the cost of unaffiliated inuring reinsurance and 40 % of losses. The Master Agreement further provided that AII receives a ceding commission of 31 % of ceded written premiums. 
 On June 11, 2008, Maiden Bermuda and AII amended the AmTrust Quota Share to add Retail Commercial Package Business to the Covered Business. AII receives a ceding commission of 34.375 % on Retail Commercial Package Business. On July 1, 2016, the agreement was renewed through June 30, 2019. 
 Effective July 1, 2018, the amount AEL ceded to the Company was reduced to 20 % . Additionally, for the Specialty Program portion of Covered Business only, AII will be responsible for ultimate net loss otherwise recoverable from Maiden Bermuda to the extent that the loss ratio to Maiden Bermuda, which shall be determined on an inception to date basis from July 1, 2007 through the date of calculation, is between 81.5 % and 95 % ("Loss Corridor"). Above and below the Loss Corridor, Maiden Bermuda continued to reinsure losses at its proportional 40 % share of the AmTrust Quota Share. Effective July 31, 2019, the Loss Corridor was amended such that the maximum amount covered is $ 40,500 , the amount calculated by Maiden Bermuda for the Loss Corridor coverage as of March 31, 2019 . Any development above this maximum amount will be subject to the coverage of the LPT/ADC Agreement. Please refer to Note 1. "Basis of Presentation" for additional information . 
 Effective January 1, 2019, Maiden Bermuda and AmTrust entered into the Partial Termination Amendment which amended the AmTrust Quota Share. The Partial Termination Amendment provided for the cut-off of the ongoing and unearned premium of AmTrust’s Small Commercial Business, comprising workers’ compensation, general liability, umbrella liability, professional liability (including cyber liability) insurance coverages, and U.S. Specialty Risk and Extended Warranty ("Terminated Business") as of December 31, 2018 . Under the Partial Termination Amendment, the ceding commission payable by Maiden Bermuda for its remaining in-force business immediately prior to January 1, 2019 increased by five percentage points with respect to in-force remaining business (excluding Terminated Business) and related unearned premium as of January 1, 2019. Subsequently, on January 30, 2019, Maiden Bermuda and AII agreed to terminate the remaining business subject to the AmTrust Quota Share on a run-off basis effective as of January 1, 2019. 
 The Partial Termination Amendment resulted in Maiden Bermuda returning approximately $ 647,980 in unearned premium to AII, or approximately $ 436,760 net of applicable ceding commission and brokerage as calculated during the second quarter of 2019. During January 2019, as part of this amendment, the Company transferred cash and investments of $ 480,000 to AII based on provisional estimates. The excess of estimated unearned premium, net of applicable ceding commission and brokerage over the actual amount of approximately $ 43,240 was returned by AII to Maiden Bermuda during the second quarter of 2019. 
 Effective as of July 31, 2019, Maiden Bermuda and AII entered into a Commutation and Release Agreement which provided for AII to assume all reserves ceded by AII to Maiden Bermuda with respect to its proportional 40 % share of the ultimate net loss under the AmTrust Quota Share related to the Commuted Business. See further details in Note 1 "Basis of Presentation". 
 
 31 

 MAIDEN HOLDINGS, LTD. 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 
 (in thousands of U.S. dollars, except share and per share data) 

 10. Related Party Transactions (continued) 
 European Hospital Liability Quota Share 
 Effective April 1, 2011, Maiden Bermuda entered into a quota share reinsurance contract with AEL and AIU DAC, both wholly owned subsidiaries of AmTrust. Pursuant to the terms of the contract, Maiden Bermuda assumed 40 % of the premiums and losses related to policies classified as European Hospital Liability, including associated liability coverages and policies covering physician defense costs, written or renewed on or after April 1, 2011. The contract also covers policies written or renewed on or before March 31, 2011, but only with respect to losses that occur, accrue or arise on or after April 1, 2011. The maximum limit of liability attaching shall be € 5,000 ( € 10,000 effective January 1, 2012) or currency equivalent (on a 100 % basis) per original claim for any one original policy. Maiden Bermuda paid a ceding commission of 5 % . 
 Effective July 1, 2016, the contract was amended such that Maiden Bermuda assumes from AEL 32.5 % of the premiums and losses of all policies written or renewed on or after July 1, 2016 until June 30, 2017 and 20 % of all policies written or renewed on or after July 1, 2017. Subsequently, on January 30, 2019, Maiden Bermuda, AEL and AIU DAC agreed to terminate the European Hospital Liability Quota Share on a run-off basis effective as of January 1, 2019. 
 On January 30, 2019, in connection with the termination of the reinsurance agreements described above, the Company and AmTrust entered into a second amendment to the Master Agreement between the parties, originally entered into on July 3, 2007, to remove the provisions requiring AmTrust to reinsure business with the Company. 
 The table below shows the effect of both of these quota share arrangements with AmTrust on the Company's Condensed Consolidated Results of Operations for the three and nine months ended September 30, 2019 and 2018 : 
 
 For the Three Months Ended September 30, 
 
 For the Nine Months Ended September 30, 
 
 2019 
 
 2018 
 
 2019 
 
 2018 
 
 Gross and net premiums written 
 
 $ 
 21,405 
 
 $ 
 452,795 
 
 $ 
 ( 564,199 
 ) 
 
 $ 
 1,518,208 
 
 Net premiums earned 
 
 74,407 
 
 491,613 
 
 344,370 
 
 1,472,614 
 
 Net loss and LAE 
 
 ( 126,945 
 ) 
 
 ( 579,240 
 ) 
 
 ( 373,980 
 ) 
 
 ( 1,275,723 
 ) 
 
 Commission expenses 
 
 ( 24,829 
 ) 
 
 ( 152,511 
 ) 
 
 ( 123,319 
 ) 
 
 ( 456,861 
 ) 
 
 Collateral provided to AmTrust 
 a) AmTrust Quota Share Reinsurance Agreement 
 To provide AmTrust's U.S. insurance subsidiaries with credit for reinsurance on their statutory financial statements, AII, as the direct reinsurer of AmTrust's insurance subsidiaries, has established trust accounts ("Trust Accounts") for their benefit. Maiden Bermuda has agreed to provide appropriate collateral to secure its proportional share under the AmTrust Quota Share of AII's obligations to the AmTrust subsidiaries to whom AII is required to provide collateral. This collateral may be in the form of (a) assets loaned by Maiden Bermuda to AII for deposit into the Trust Accounts, pursuant to a loan agreement between those parties, (b) assets transferred by Maiden Bermuda for deposit into the Trust Accounts, (c) a letter of credit obtained by Maiden Bermuda and delivered to an AmTrust subsidiary on AII's behalf, or (d) premiums withheld by an AmTrust subsidiary at Maiden Bermuda's request in lieu of remitting such premiums to AII. Maiden Bermuda may provide any or a combination of these forms of collateral, provided that the aggregate value thereof equals Maiden Bermuda's proportionate share of its obligations under the AmTrust Quota Share. Maiden Bermuda satisfied its collateral requirements under the AmTrust Quota Share with AII as follows: 
 
 • 
 by lending funds in the amount of $ 167,975 at September 30, 2019 and December 31, 2018 pursuant to a loan agreement entered into between those parties. Advances under the loan are secured by promissory notes. This loan was assigned by AII to AmTrust effective December 31, 2014 and is carried at cost. Interest is payable at a rate equivalent to the Federal Funds Effective Rate ("Fed Funds") plus 200 basis points per annum. Please see "Note 4. (c) Investments" for the total amount of interest earned from this loan. The interest income on the loan was approximately $ 1,777 and $ 5,441 for the three and nine months ended September 30, 2019 , respectively, ( 2018 - $ 1,658 and $ 4,651 , respectively) and the effective yield was 4.2 % and 4.3 % for the same respective periods ( 2018 - 3.9 % and 3.7 % , respectively). On January 30, 2019, in connection with the termination of the reinsurance agreements described above, the Company and AmTrust entered into an amendment to the Loan Agreement between Maiden Bermuda, AmTrust and AII, originally entered into on November 16, 2007. The Amendment provides for the extension of the maturity date to January 1, 2025 and acknowledges that due to the termination of the AmTrust Quota Share, no further loans or advances may be made pursuant to the Loan Agreement; 
 
 • 
 effective December 1, 2008, the Company entered into a Reinsurer Trust Assets Collateral agreement to provide to AII sufficient collateral to secure its proportional share of AII's obligations to the U.S. AmTrust subsidiaries. The amount of the collateral at September 30, 2019 was approximately $ 1,354,283 (December 31, 2018 - $ 3,650,418 ) and the accrued interest was $ 7,645 (December 31, 2018 - $ 23,283 ). Please refer to "Note 4. (e) Investments" for additional information; 
 
 • 
 on January 11, 2019, a portion of the existing trust accounts used for collateral on the AmTrust Quota Share were converted to a funds withheld arrangement. The Company transferred cash and investments of $ 575,000 to AmTrust as a funds withheld receivable which bears an interest rate of 3.5 % , subject to annual adjustment. At September 30, 2019 , the balance of funds withheld was $ 575,000 and the accrued interest was $ 5,073 . The interest income on the funds withheld receivable was approximately $ 5,073 and $ 14,500 for the three and nine months ended September 30, 2019 , respectively. 
 
 32 

 MAIDEN HOLDINGS, LTD. 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 
 (in thousands of U.S. dollars, except share and per share data) 

 10. Related Party Transactions (continued) 
 Pursuant to the terms of the LPT/ADC Agreement, Maiden Bermuda, Cavello and AmTrust and certain of its affiliated companies entered into a Master Collateral Agreement (“MCA”) to define and enable the operation of collateral provided under the AmTrust Quota Share. Under the MCA, Cavello, on behalf of Maiden Bermuda, provided letters of credit to AmTrust in an amount representing Cavello’s obligations under the LPT/ADC Agreement. As these letters of credit replaced other collateral previously provided directly by Maiden Bermuda to AmTrust, the MCA coordinates the collateral protection that will be provided to AmTrust to ensure that no gaps in collateral funding occur by operation of the LPT/ADC Agreement and related MCA. 
 As a result of entering into both the LPT/ADC Agreement and the MCA, certain post-termination endorsements (“PTE's”) to the AmTrust Quota Share between AII and Maiden Bermuda were required. Effective July 31, 2019, the PTE's: 
 i) enable the operation of both the LPT/ADC Agreement and MCA by making provision for certain forms of collateral, including letters of credit provided by Cavello on Maiden Bermuda’s behalf, and further defines the permitted use and return of collateral; and 
 ii) increase the required funding percentage for Maiden Bermuda under the collateral arrangements between the parties to 105 % of its obligations, subject to a minimum excess funding requirement of $ 54,000 , as may be mutually amended by the parties from time to time. Under certain defined conditions, Maiden Bermuda may be required to increase this funding percentage to 110 % . 
 b) European Hospital Liability Quota Share 
 Collateral has been provided to both AEL and AIU DAC under the European Hospital Liability Quota Share agreement: 
 i) for AEL, the amount of the collateral in reinsurance trust accounts at September 30, 2019 was approximately $ 240,386 (December 31, 2018 - $ 249,948 ) and the accrued interest was $ 1,305 (December 31, 2018 - $ 1,976 ). Please refer to "Note 4. (e) Investments" for additional information; and 
 ii) in January 2019, Maiden Bermuda transferred cash of € 45,113 ( $ 51,244 ) to AIU DAC as a funds withheld receivable. AIU DAC pays Maiden a fixed annual interest rate of 0.50 % , on the average daily Funds Withheld balance, commencing on January 24, 2019, subject to annual adjustment. At September 30, 2019 , the balance of funds withheld was $ 55,701 and the accrued interest was $ 192 . The interest income on the funds withheld receivable was approximately $ 71 and $ 196 for the three and nine months ended September 30, 2019 , respectively. 
 Brokerage Agreement 
 Effective July 1, 2007, the Company entered into a reinsurance brokerage agreement with AII Reinsurance Broker Ltd. ("AIIB"), a wholly owned subsidiary of AmTrust. Pursuant to the brokerage agreement, AIIB provided brokerage services relating to the AmTrust Quota Share and the European Hospital Liability Quota Share for a fee equal to 1.25 % of the premium assumed. AIIB was not the Company's exclusive broker. The brokerage agreement was terminated as of March 15, 2019. Maiden Bermuda recorded approximately $ 930 and $ 4,305 of reinsurance brokerage expense for the three and nine months ended September 30, 2019 , respectively ( 2018 - $ 6,145 and $ 18,408 , respectively) and deferred reinsurance brokerage of $ 2,835 at September 30, 2019 (December 31, 2018 - $ 14,199 ) as a result of this agreement. 
 Asset Management Agreement 
 Effective July 1, 2007, the Company entered into an asset management agreement with AII Insurance Management Limited ("AIIM"), a wholly owned subsidiary of AmTrust, pursuant to which AIIM agreed to provide investment management services to the Company. Effective January 1, 2018, AIIM provides investment management services for a quarterly fee of 0.02125 % of the average value of the account. Prior to that date, the fee was payable at a rate of 0.0375 % . The agreement may be terminated upon 30 days written notice by either party. The Company recorded approximately $ 618 and $ 2,071 of investment management fees for the three and nine months ended September 30, 2019 , respectively, ( 2018 - $ 1,055 and $ 3,137 , respectively) under this agreement. 
 NGHC Quota Share 
 Maiden Bermuda, effective March 1, 2010, had a 50 % participation in the NGHC Quota Share, by which it received 25 % of net premiums of the personal lines automobile business and assumed 25 % of the related net losses. On August 1, 2013, the Company received notice from NGHC of the termination of the NGHC Quota Share effective on that date. The Company and NGHC mutually agreed that the termination is on a run-off basis. Please refer to "Note 14. Subsequent Events" for additional information regarding the commutation of this quota share subsequent to September 30, 2019 . 
 
 Insurance Management Services Agreement 
 Effective August 31, 2019, the Company entered into an agreement with Risk Services - Vermont, Inc. ("Risk Services"), an affiliate of AmTrust. Pursuant to the agreement, Risk Services agreed to provide insurance management services to the Company including regulatory compliance services in connection with the re-domestication, licensing and operation of Maiden Bermuda in the State of Vermont. The initial term of the agreement is three years and will automatically renew for an additional three years until either party gives written notice of its intention to terminate this agreement at least three months prior to the commencement of the next applicable period. The fee for this agreement is an initial $ 100 retainer for re-domestication services and $ 100 annually and reimbursement for reasonable out-of-pocket expenses incurred by Risk Services pursuant to the terms of the agreement. The Company recorded approximately $ 100 of fees for the three and nine months ended September 30, 2019 . 
 
 33 

 MAIDEN HOLDINGS, LTD. 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 
 (in thousands of U.S. dollars, except share and per share data) 

 11. Commitments and Contingencies 
 There are no material changes from the commitments, contingencies and concentrations previously disclosed in the Company’s Form 10-K for the year ended December 31, 2018 , other than disclosures associated with the adoption of FASB Topic 842, Leases and the impact of the LPT/ADC Agreement with Enstar as outlined below. Please see “ Note 2. Significant Accounting Policies ” for additional information related to the adoption of FASB Topic 842, Leases. 
 
 a) 
 Concentrations of Credit Risk 
 
 At September 30, 2019 and December 31, 2018 , the Company’s assets where significant concentrations of credit risk may exist include investments, cash and cash equivalents, loan to related party, reinsurance balances receivable, reinsurance recoverable on unpaid losses and funds withheld receivable. Please refer to " Note 8. Reinsurance " for additional information regarding the Company's credit risk exposure on its reinsurance counterparties including the impact of the LPT/ADC Agreement entered into on July 31, 2019. 
 The Company manages concentration of credit risk in the investment portfolio through issuer and sector exposure limitations. The Company believes it bears minimal credit risk in its cash on deposit. The Company also monitors the credit risk related to the loan to related party and its reinsurance balances receivable, within which the largest balance is due from AmTrust. AmTrust has a credit rating of A- from A.M. Best at September 30, 2019 . To mitigate credit risk, we generally have a contractual right of offset thereby allowing us to settle claims net of any premiums or loan receivable. The Company believes these balances as at September 30, 2019 will be fully collectible. 
 
 b) 
 Operating Lease Commitments 
 
 The Company leases office spaces, housing, office equipment and company vehicles under various operating leases expiring in various years through 2022 . The Company did not enter into any new lease arrangements during the three and nine months ended September 30, 2019 . The Company's leases are all currently classified as operating leases and none of them have non-lease components. For operating leases that have a lease term of more than twelve months, the Company recognized a lease liability and a right-of-use asset in the Company's Condensed Consolidated Balance Sheets at the present value of the remaining lease payments until expiration. As the lease contracts generally do not provide an implicit discount rate, the Company used the weighted-average discount rate of 10 % , representing its secured incremental borrowing rate, in calculating the present value of the lease liability. The exercise of lease renewal options is at the sole discretion of the Company and none of our current lease renewal options are deemed to be reasonably certain to be exercised. The Company has made an accounting policy election not to include renewal, termination, or purchase options that are not reasonably certain of exercise when determining the term of the borrowing. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company's weighted-average remaining lease term is 2.8 years. 
 The Company's future lease obligations as at September 30, 2019 of approximately $ 2,610 was calculated based on the present value of future annual rental commitments excluding taxes, insurance and other operating costs for non-cancellable operating leases discounted using the Company's secured incremental borrowing rate. This amount has been recognized on the Company's Condensed Consolidated Balance Sheets as a lease liability of $ 2,610 within accrued expenses and other liabilities with an equivalent amount for the right-of-use asset presented as part of other assets. Under the guidance, the Company continues to recognize the related leasing expense on a straight-line basis over the lease term in the Company's Condensed Consolidated Statements of Income. The Company's total lease expense for the three and nine months ended September 30, 2019 was $ 486 and $ 1,296 , respectively ( 2018 - $ 571 and $ 1,702 , respectively) which was recognized within net income consistent with the accounting treatment in prior periods under Topic 840 . The operating cash outflows from operating leases included in the measurement of the lease liability during the three and nine months ended September 30, 2019 was $ 340 and $ 1,021 , respectively. 
 
 At September 30, 2019 , the scheduled maturity of the Company's operating lease liabilities are expected to be as follows: 
 
 September 30, 2019 
 
 Remainder of 2019 
 $ 
 334 
 
 2020 
 1,169 
 
 2021 
 741 
 
 2022 
 741 
 
 Discount for present value 
 ( 375 
 ) 
 
 Total discounted operating lease liabilities 
 $ 
 2,610 
 
 34 

 MAIDEN HOLDINGS, LTD. 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 
 (in thousands of U.S. dollars, except share and per share data) 

 11. Commitments and Contingencies (continued) 
 At December 31, 2018 , the Company's future minimum lease payments under non-cancellable operating leases were expected to be as follows: 
 
 December 31, 2018 
 
 2019 
 $ 
 1,442 
 
 2020 
 1,228 
 
 2021 
 772 
 
 2022 
 750 
 
 $ 
 4,192 
 
 c) 
 Legal Proceedings 
 
 Except as noted below, the Company is not a party to any material legal proceedings. From time to time, the Company is subject to routine legal proceedings, including arbitrations, arising in the ordinary course of business. These legal proceedings generally relate to claims asserted by or against the Company in the ordinary course of insurance or reinsurance operations. Based on the Company's opinion, the eventual outcome of these legal proceedings is not expected to have a material adverse effect on its financial condition or results of operations. 
 In April 2009, the Company learned that Bentzion S. Turin, the former Chief Operating Officer, General Counsel and Secretary of Maiden Holdings and Maiden Bermuda, sent a letter to the U.S. Department of Labor claiming that his employment with the Company was terminated in retaliation for corporate whistle-blowing in violation of the whistle-blower protection provisions of the Sarbanes-Oxley Act of 2002. Mr. Turin alleged that he was terminated for raising concerns regarding corporate governance with respect to the negotiation of the terms of the Trust Preferred Securities Offering. He seeks reinstatement as Chief Operating Officer, General Counsel and Secretary of Maiden Holdings and Maiden Bermuda, back pay and legal fees incurred. On December 31, 2009, the U.S. Secretary of Labor found no reasonable cause for Mr. Turin’s claim and dismissed the complaint in its entirety. Mr. Turin objected to the Secretary's findings and requested a hearing before an administrative law judge in the U.S. Department of Labor. The Company moved to dismiss Mr. Turin's complaint, and its motion was granted by the Administrative Law Judge on June 30, 2011. On July 13, 2011, Mr. Turin filed a petition for review of the Administrative Law Judge's decision with the Administrative Review Board in the U.S. Department of Labor. On March 29, 2013, the Administrative Review Board reversed the dismissal of the complaint on procedural grounds, and remanded the case to the administrative law judge. The administrative hearing began in September 2014 and concluded in November 2018. The Company believes that it had good and sufficient reasons for terminating Mr. Turin's employment and that the claim is without merit. The Company will continue to vigorously defend itself against this claim. 
 A putative class action complaint was filed against Maiden Holdings, Arturo M. Raschbaum, Karen L. Schmitt, and John M. Marshaleck in the United States District Court for the District of New Jersey on February 11, 2019, alleging that Defendants violated Section 10(b) of the Exchange Act and Rule 10b-5 (and Section 20(a) for control person liability) by making misrepresentations about the Company and its business, including the Company’s risk management and underwriting policies and practices. Plaintiffs further claim that these misrepresentations inflated the price of Maiden Holdings' common stock, and that when the truth about the misrepresentations was revealed, the Company’s stock price fell, causing Plaintiffs to incur losses. Maiden has not yet been served with the complaint, but believe the claims are without merit and intends to vigorously defend itself. There exist and the Company expects additional lawsuits to be filed against the Company, its subsidiaries and its respective officers due to the diminution in value of our securities as a result of our operating results and financial condition. It is currently uncertain as to the effect of such litigation on our business, operating results and financial conditions. 
 
 35 

 MAIDEN HOLDINGS, LTD. 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 
 (in thousands of U.S. dollars, except share and per share data) 

 12. Earnings per Common Share 
 The following is a summary of the elements used in calculating basic and diluted earnings per common share: 
 
 For the Three Months Ended September 30, 
 
 2019 
 
 2018 
 
 Numerator: 
 
 Net loss from continuing operations 
 
 $ 
 ( 58,050 
 ) 
 
 $ 
 ( 240,413 
 ) 
 
 Net income from continuing operations attributable to noncontrolling interests 
 
 — 
 
 ( 62 
 ) 
 
 Net loss attributable to Maiden from continuing operations 
 
 ( 58,050 
 ) 
 
 ( 240,475 
 ) 
 
 Dividends on preference shares – Series A, C and D 
 
 — 
 
 ( 8,545 
 ) 
 
 Amount allocated to participating common shareholders (1) 
 
 — 
 
 ( 8 
 ) 
 
 Loss attributable to Maiden common shareholders, before discontinued operations 
 
 ( 58,050 
 ) 
 
 ( 249,028 
 ) 
 
 Loss from discontinued operations, net of income tax expense 
 
 ( 277 
 ) 
 
 ( 59,819 
 ) 
 
 Net loss allocated to Maiden common shareholders 
 
 $ 
 ( 58,327 
 ) 
 
 $ 
 ( 308,847 
 ) 
 
 Denominator: 
 
 Weighted average number of common shares – basic and diluted (2) 
 
 83,092,085 
 
 83,089,172 
 
 Basic and diluted loss from continuing operations per share attributable to Maiden common shareholders 
 
 $ 
 ( 0.70 
 ) 
 
 $ 
 ( 3.00 
 ) 
 
 Basic and diluted loss from discontinued operations per share attributable to Maiden common shareholders 
 
 — 
 
 ( 0.72 
 ) 
 
 Basic and diluted loss per share attributable to Maiden common shareholders: 
 
 $ 
 ( 0.70 
 ) 
 
 $ 
 ( 3.72 
 ) 
 
 For the Nine Months Ended September 30, 
 
 2019 
 
 2018 
 
 Numerator: 
 
 Net loss from continuing operations 
 
 $ 
 ( 88,049 
 ) 
 
 $ 
 ( 233,600 
 ) 
 
 Net income from continuing operations attributable to noncontrolling interests 
 
 — 
 
 ( 180 
 ) 
 
 Net loss attributable to Maiden from continuing operations 
 
 ( 88,049 
 ) 
 
 ( 233,780 
 ) 
 
 Dividends on preference shares – Series A, C and D 
 
 — 
 
 ( 25,636 
 ) 
 
 Amount allocated to participating common shareholders (1) 
 
 — 
 
 ( 17 
 ) 
 
 Loss attributable to Maiden common shareholders, before discontinued operations 
 
 ( 88,049 
 ) 
 
 ( 259,433 
 ) 
 
 Loss from discontinued operations, net of income tax expense 
 
 ( 22,327 
 ) 
 
 ( 41,609 
 ) 
 
 Net loss allocated to Maiden common shareholders 
 
 $ 
 ( 110,376 
 ) 
 
 $ 
 ( 301,042 
 ) 
 
 Denominator: 
 
 Weighted average number of common shares – basic and diluted (2) 
 
 83,036,925 
 
 83,085,441 
 
 Basic and diluted loss from continuing operations per share attributable to Maiden common shareholders 
 
 $ 
 ( 1.06 
 ) 
 
 $ 
 ( 3.12 
 ) 
 
 Basic and diluted loss from discontinued operations per share attributable to Maiden common shareholders 
 
 ( 0.27 
 ) 
 
 ( 0.50 
 ) 
 
 Basic and diluted loss per share attributable to Maiden common shareholders: 
 
 $ 
 ( 1.33 
 ) 
 
 $ 
 ( 3.62 
 ) 
 
 (1) 
 This represents earnings (dividends paid) allocated to the holders of non-vested restricted shares issued to the Company's employees under the Amended and Restated 2007 Share Incentive Plan. 
 
 (2) 
 Please refer to "Note 14. Shareholders' Equity" and "Note 15. Share Compensation and Pension Plans" of the Notes to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018 , for the terms and conditions of securities that could potentially be dilutive in the future. 
 
 36 

 MAIDEN HOLDINGS, LTD. 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 
 (in thousands of U.S. dollars, except share and per share data) 

 13. Shareholders' Equity 
 
 a) 
 Common Shares 
 
 At September 30, 2019 , the aggregate authorized share capital of the Company is 150,000,000 shares from which the Company has issued 88,124,360 common shares, of which 83,111,180 common shares are outstanding, and 18,600,000 preference shares, all of which are outstanding. The remaining 43,275,640 shares are undesignated at September 30, 2019 . For further discussion on the components of Shareholders' Equity, please refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2018 . 
 
 b) 
 Treasury Shares 
 
 During the nine months ended September 30, 2019 , the Company repurchased a total of 23,220 ( 2018 - 29,391 ) shares at an average price per share of $ 0.78 ( 2018 - $ 6.57 ) from employees, which represent withholdings in respect of tax obligations on the vesting of restricted shares and performance based shares. 
 During the three and nine months ended September 30, 2018 , 205,000 were repurchased on the open market at an average price per share of $ 3.31 under the Company's share repurchase plan which has a remaining authorization of $ 74,245 at September 30, 2019 and December 31, 2018 . No repurchases were made during the three and nine months ended September 30, 2019 under the share repurchase plan. 
 
 c) 
 Accumulated Other Comprehensive Income (Loss) 
 
 The following tables set forth financial information regarding the changes in the balances of each component of AOCI: 
 
 For the Three Months Ended September 30, 2019 
 
 Change in net unrealized gains on investment 
 
 Foreign currency translation 
 
 Total 
 
 Beginning balance 
 
 $ 
 29,278 
 
 $ 
 ( 8,126 
 ) 
 
 $ 
 21,152 
 
 Other comprehensive (loss) income before reclassifications 
 
 ( 2,141 
 ) 
 
 11,480 
 
 9,339 
 
 Amounts reclassified from AOCI to net loss, net of tax 
 
 ( 8,555 
 ) 
 
 — 
 
 ( 8,555 
 ) 
 
 Net current period other comprehensive (loss) income 
 
 ( 10,696 
 ) 
 
 11,480 
 
 784 
 
 Ending balance, Maiden shareholders 
 
 $ 
 18,582 
 
 $ 
 3,354 
 
 $ 
 21,936 
 
 For the Three Months Ended September 30, 2018 
 
 Change in net unrealized gains on investment 
 
 Foreign currency translation 
 
 Total 
 
 Beginning balance 
 
 $ 
 ( 96,107 
 ) 
 
 $ 
 ( 918 
 ) 
 
 $ 
 ( 97,025 
 ) 
 
 Other comprehensive (loss) income before reclassifications 
 
 ( 24,656 
 ) 
 
 4,458 
 
 ( 20,198 
 ) 
 
 Amounts reclassified from AOCI to net income, net of tax 
 
 785 
 
 — 
 
 785 
 
 Net current period other comprehensive (loss) income 
 
 ( 23,871 
 ) 
 
 4,458 
 
 ( 19,413 
 ) 
 
 Ending balance 
 
 ( 119,978 
 ) 
 
 3,540 
 
 ( 116,438 
 ) 
 
 Less: AOCI attributable to noncontrolling interest 
 
 — 
 
 ( 69 
 ) 
 
 ( 69 
 ) 
 
 Ending balance, Maiden shareholders 
 
 $ 
 ( 119,978 
 ) 
 
 $ 
 3,609 
 
 $ 
 ( 116,369 
 ) 
 
 37 

 MAIDEN HOLDINGS, LTD. 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 
 (in thousands of U.S. dollars, except share and per share data) 

 13. Shareholders' Equity (continued) 
 
 For the Nine Months Ended September 30, 2019 
 
 Change in net unrealized gains on investment 
 
 Foreign currency translation 
 
 Total 
 
 Beginning balance 
 
 $ 
 ( 59,762 
 ) 
 
 $ 
 ( 5,932 
 ) 
 
 $ 
 ( 65,694 
 ) 
 
 Other comprehensive income before reclassifications 
 
 89,826 
 
 9,286 
 
 99,112 
 
 Amounts reclassified from AOCI to net income, net of tax 
 
 ( 11,482 
 ) 
 
 — 
 
 ( 11,482 
 ) 
 
 Net current period other comprehensive income 
 
 78,344 
 
 9,286 
 
 87,630 
 
 Ending balance, Maiden shareholders 
 
 $ 
 18,582 
 
 $ 
 3,354 
 
 $ 
 21,936 
 
 For the Nine Months Ended September 30, 2018 
 
 Change in net unrealized gains on investment 
 
 Foreign currency translation 
 
 Total 
 
 Beginning balance 
 
 $ 
 21,889 
 
 $ 
 ( 8,583 
 ) 
 
 $ 
 13,306 
 
 Other comprehensive (loss) income before reclassifications 
 
 ( 141,907 
 ) 
 
 12,123 
 
 ( 129,784 
 ) 
 
 Amounts reclassified from AOCI to net income, net of tax 
 
 40 
 
 — 
 
 40 
 
 Net current period other comprehensive (loss) income 
 
 ( 141,867 
 ) 
 
 12,123 
 
 ( 129,744 
 ) 
 
 Ending balance 
 
 ( 119,978 
 ) 
 
 3,540 
 
 ( 116,438 
 ) 
 
 Less: AOCI attributable to noncontrolling interest 
 
 — 
 
 ( 69 
 ) 
 
 ( 69 
 ) 
 
 Ending balance, Maiden shareholders 
 
 $ 
 ( 119,978 
 ) 
 
 $ 
 3,609 
 
 $ 
 ( 116,369 
 ) 
 
 Note 14. Subsequent Events 
 Commutation of NGHC Quota Share 
 In November 2019, Maiden Bermuda and NGHC entered into a Commutation and Release Agreement to fully and finally settle and commute all rights, obligations and liabilities, known and unknown, of each other under the NGHC Quota Share. Maiden Bermuda will pay NGHC $ 2,248 constituting the ceded reserve balance as at September 30, 2019 . 
 
 38
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.
Maiden Holdings, Ltd. 10-Q

Item 1. Financial Statements
