What changed in this filing

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Item 1. Financial Statements

2020-08-14 compared with 2020-05-15 · 363 added, 223 removed, 885 unchanged (40% of the section changed)

11 unchanged sentences

Accrued investment income

Reinsurance balances receivable, net

Reinsurance balances receivable, net (includes $923 from related parties in 2020)

Reinsurance recoverable on unpaid losses

5 unchanged sentences

Deferred gain on retroactive reinsurance

Liability for securities purchased

Accrued expenses and other liabilities (includes $8,137 and $20,049 from related parties in 2020 and 2019, respectively)

9 unchanged sentences

Additional paid-in capital

Accumulated other comprehensive (loss) income

Accumulated other comprehensive income

Accumulated deficit

Treasury shares, at cost (5,013,180 shares in 2020 and 2019, respectively)

Treasury shares, at cost (5,014,014 and 5,013,180 shares in 2020 and 2019, respectivel y)

Total shareholders’ equity

5 unchanged sentences

dollars, except per share data)

For the Three Months Ended March 31,

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Gross premiums written

4 unchanged sentences

Net investment income

Net realized gains (losses) on investment

Net realized gains on investment

Total other-than-temporary impairment losses

4 unchanged sentences

Interest and amortization expenses

Foreign exchange and other gains

Foreign exchange and other losses (gains)

Total expenses

Income (loss) from continuing operations before income taxes

income tax expense (benefit)

income tax benefit

Income (loss) from continuing operations

4 unchanged sentences

Basic and diluted earnings (loss) per share attributable to common shareholders

Weighted average number of common shares - basic and diluted

Weighted average number of common shares - basic

Adjusted weighted average number of common shares and assumed conversions - diluted

See accompanying notes to the unaudited Condensed Consolidated Financial Statements.

2 unchanged sentences

(in thousands of U.S.

For the Three Months Ended March 31,

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Net income (loss)

Other comprehensive (loss) income

Net unrealized holdings (losses) gains on fixed maturities arising during period

Adjustment for reclassification of net realized (gains) losses recognized in net income (loss)

Other comprehensive income (loss)

Net unrealized holdings gains on fixed maturities arising during period

Adjustment for reclassification of net realized gains recognized in net income (loss)

Foreign currency translation adjustment

Other comprehensive (loss) income, before tax

Income tax benefit (expense) related to components of other comprehensive (loss) income

Other comprehensive (loss) income, after tax

Comprehensive (loss) income

Other comprehensive income (loss), before tax

Income tax (expense) benefit related to components of other comprehensive (loss) income

Other comprehensive income (loss), after tax

Comprehensive income

Comprehensive income attributable to noncontrolling interests

Comprehensive (loss) income attributable to Maiden

Comprehensive income attributable to Maiden

See accompanying notes to the unaudited Condensed Consolidated Financial Statements.

2 unchanged sentences

(in thousands of U.S.

For the Three Months Ended March 31,

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Preference shares - Series A, C and D

10 unchanged sentences

Ending balance

Accumulated other comprehensive loss

Accumulated other comprehensive income

Beginning balance

Change in net unrealized (losses) gains on investment

Change in net unrealized gains (losses) on investment

Foreign currency translation adjustment

6 unchanged sentences

Beginning balance

Shares repurchased

Ending balance

9 unchanged sentences

(in thousands of U.S.

For the Three Months Ended March 31,

For the Six Months Ended June 30,

Cash flows from operating activities

3 unchanged sentences

Depreciation, amortization and share-based compensation

Net realized (gains) losses on investment

Net realized gains on investment

Total other-than-temporary impairment losses

22 unchanged sentences

Net cash provided by investing activities

Cash flows from financing activities:

Repurchase of common shares

Net cash used in financing activities

Effect of exchange rate changes on foreign currency cash, restricted cash and equivalents

Net increase (decrease) in cash, restricted cash and cash equivalents

Net increase in cash, restricted cash and cash equivalents

Cash, restricted cash and cash equivalents, beginning of period

Cash, restricted cash and cash equivalents, end of period

cash, restricted cash and equivalents of discontinued operations, end of period

Cash, restricted cash and cash equivalents of continuing operations, end of period

Reconciliation of cash and restricted cash reported within Condensed Consolidated Balance Sheets:

5 unchanged sentences

Investments transferred out related to funds withheld arrangement with AmTrust

Investments transferred out related to discontinued operations

See accompanying notes to the unaudited Condensed Consolidated Financial Statements.

65 unchanged sentences

COVID-19 Pandemic

The evolving COVID-19 global pandemic has caused significant disruption to the economy and financial markets globally, and the full extent of the potential impacts of COVID-19 are not yet known.

The continuing COVID-19 global pandemic has caused significant disruption to the economy and financial markets globally, and the full extent of the potential impacts of COVID-19 are not yet known.

Circumstances caused by the COVID-19 pandemic are complex, uncertain and rapidly evolving.

Our results of operations, financial condition, and liquidity and capital resources have been adversely impacted by the COVID-19 pandemic, and the future impact of the pandemic on our financial condition or results of operations is difficult to predict.

Our results of operations, financial condition, and liquidity and capital resources may have been adversely impacted by the COVID-19 pandemic, and the future impact of the pandemic on our financial condition or results of operations is difficult to predict.

As described herein, the Company is not currently engaged in active reinsurance underwriting and is running off the remaining unearned exposures it has reinsured.

Maiden Global Holdings, Ltd.’s business development teams partner with automobile manufacturers, dealer associations and local primary insurers to design and implement point of sale insurance programs which generate revenue for the auto manufacturer and insurance premiums for the primary insurer ("IIS unit").

The Company's IIS unit does write limited primary insurance coverages that could be exposed to COVID-19 claims.

While we assess our exposure to COVID-19 insurance and reinsurance claims on our existing insurance exposures and remaining reinsurance exposures as limited and immaterial, given the uncertainty surrounding the COVID-19 pandemic and its impact on the insurance industry, our preliminary estimates of losses and loss adjustment expenses and estimates of reinsurance recoverable arising from the COVID-19 pandemic may materially change.

The Company has not received any COVID-19 claims to date.

Maiden Reinsurance has not received any COVID-19 claims to date but our companies within our IIS unit have received a limited number of claims related to those coverages which it deems as immaterial.

Unanticipated issues relating to claims and coverage may emerge, which could adversely affect our business by increasing the scope of coverage beyond our intent and/or increasing the frequency and severity of claims.

Due to the change in fair value of our investments caused by the COVID-19 pandemic, we and our reinsurance subsidiaries may need additional capital to maintain compliance with regulatory capital requirements and/or be required to post additional collateral under existing reinsurance arrangements, which could reduce our liquidity.

In addition, the Company may experience a reduction in the amount of available distribution or dividend capacity from its regulated reinsurance subsidiaries, which would also reduce liquidity.

Due in large part to the uncertainty caused by the COVID-19 pandemic in global financial markets, during the three months ended March 31, 2020 , the Company's investment portfolio experienced significant unrealized losses (largely due to widening credit spreads on fixed income investments), increased volatility, heightened credit risk, and declines in yields on its fixed income investments.

The Company's investment portfolio may continue to be adversely impacted by unfavorable market conditions caused by the COVID-19 pandemic, which could cause continued volatility in our results of operations and negatively impact our financial condition.

The Company's investment portfolio may be adversely impacted by unfavorable market conditions caused by the COVID-19 pandemic, and the Company and its reinsurance subsidiaries may need additional capital to maintain compliance with regulatory capital requirements and/or be required to post additional collateral under existing reinsurance arrangements, which could reduce our liquidity.

In addition, the Company may experience continued volatility in its results of operations which could negatively impact its financial condition and create a reduction in the amount of available distribution or dividend capacity from its regulated reinsurance subsidiaries, which would also reduce liquidity.

MAIDEN HOLDINGS, LTD.

6 unchanged sentences

Changes to the Disclosure Requirements for Fair Value Measurement

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13 for changes to the disclosure framework related to Topic 820 which amends the disclosure requirements for fair value measurement.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13 ("ASU 2018-13") for changes to the disclosure framework related to Topic 820 which amends the disclosure requirements for fair value measurement.

The following disclosure requirements were removed from Topic 820:

5 unchanged sentences

For certain unobservable inputs, an entity may disclose other quantitative information (such as the median or arithmetic average) in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements.

The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019.

The amendments in ASU 2018-13 are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019.

The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption.

All other amendments should be applied retrospectively to all periods presented upon their effective date.

Early adoption is permitted upon issuance of this Update.

An entity is permitted to early adopt any removed or modified disclosures upon issuance of this Update and delay adoption of the additional disclosures until their effective date.

Early adoption is permitted upon issuance of ASU 2018-13.

An entity is permitted to early adopt any removed or modified disclosures upon issuance of ASU 2018-13 and delay adoption of the additional disclosures until their effective date.

These amendments only impact disclosures made in " Note 5.

41 unchanged sentences

The following tables summarize the underwriting results of our reportable segments and the reconciliation of our reportable segments and Other category's underwriting results to consolidated net income ( loss ) from continuing operations:

For the Three Months Ended March 31, 2020

For the Three Months Ended June 30, 2020

Diversified Reinsurance

7 unchanged sentences

General and administrative expenses

Underwriting (loss) income

Reconciliation to net income from continuing operations

Net investment income and realized gains on investment

Interest and amortization expenses

Foreign exchange and other losses, net

Other general and administrative expenses

Income tax benefit

Net income from continuing operations

Net loss and LAE ratio (1)

Commission and other acquisition expense ratio (2)

General and administrative expense ratio (3)

Expense ratio (4)

Combined ratio (5)

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Segment Information (continued)

For the Three Months Ended June 30, 2019

Diversified Reinsurance

AmTrust Reinsurance

Gross premiums written

Net premiums written

Net premiums earned

Other insurance revenue

Net loss and LAE

Commission and other acquisition expenses

General and administrative expenses

Underwriting income (loss)

Reconciliation to net income from continuing operations

Net investment income and realized gains on investment

Interest and amortization expenses

Foreign exchange and other gains

Other general and administrative expenses

Income tax benefit

Net income from continuing operations

Net loss and LAE ratio (1)

Commission and other acquisition expense ratio (2)

General and administrative expense ratio (3)

Expense ratio (4)

Combined ratio (5)

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Segment Information (continued)

For the Six Months Ended June 30, 2020

Diversified Reinsurance

AmTrust Reinsurance

Gross premiums written

Net premiums written

Net premiums earned

Other insurance revenue

Net loss and LAE

Commission and other acquisition expenses

General and administrative expenses

Underwriting loss

3 unchanged sentences

Interest and amortization expenses

Foreign exchange and other gains, net

Foreign exchange and other gains

Other general and administrative expenses

Income tax expense

Income tax benefit

Net income from continuing operations

9 unchanged sentences

Segment Information (continued)

For the Three Months Ended March 31, 2019

For the Six Months Ended June 30, 2019

Diversified Reinsurance

9 unchanged sentences

Reconciliation to net loss from continuing operations

Net investment income and realized losses on investment

Net investment income and realized gains on investment

Interest and amortization expenses

Foreign exchange and other gains, net

Foreign exchange and other gains

Other general and administrative expenses

11 unchanged sentences

Calculated by adding together net loss and LAE ratio and the expense ratio.

For the Three Months Ended March 31, 2020

Diversified Reinsurance

AmTrust Reinsurance

For the Three Months Ended March 31, 2019

Diversified Reinsurance

AmTrust Reinsurance

The following tables summarize the financial position of the Company's reportable segments including the reconciliation to the Company's consolidated total assets at March 31, 2020 and December 31, 2019 :

March 31, 2020

The following tables summarize the financial position of the Company's reportable segments including the reconciliation to the Company's consolidated total assets at June 30, 2020 and December 31, 2019 :

June 30, 2020

Diversified Reinsurance

11 unchanged sentences

dollars, except share and per share data)

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 months ended March 31, 2020 and 2019 :

For the Three Months Ended March 31,

Segment In formation (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 six months ended June 30, 2020 and 2019 :

For the Three Months Ended June 30,

Net premiums written

8 unchanged sentences

Total Net Premiums Written

For the Three Months Ended March 31,

The following tables set forth financial information relating to net premiums earned by major line of business and reportable segment for the three months ended March 31, 2020 and 2019 :

For the Three Months Ended March 31,

For the Six Months Ended June 30,

Net premiums written

Diversified Reinsurance

International

Total Diversified Reinsurance

AmTrust Reinsurance

Small Commercial Business

Specialty Program

Specialty Risk and Extended Warranty

Total AmTrust Reinsurance

Total Net Premiums Written

The following tables set forth financial information relating to net premiums earned by major line of business and reportable segment for the three and six months ended June 30, 2020 and 2019 :

For the Three Months Ended June 30,

Net premiums earned

8 unchanged sentences

Total Net Premiums Earned

For the Three Months Ended March 31,

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Segment Information (continued)

For the Six Months Ended June 30,

Net premiums earned

Diversified Reinsurance

International

Total Diversified Reinsurance

AmTrust Reinsurance

Small Commercial Business

Specialty Program

Specialty Risk and Extended Warranty

Total AmTrust Reinsurance

Total Net Premiums Earned

Fixed Maturities

The original or amortized cost, estimated fair value and gross unrealized gains and losses of fixed maturities at March 31, 2020 and December 31, 2019 are as follows:

March 31, 2020

The original or amortized cost, estimated fair value and gross unrealized gains and losses of fixed maturities at June 30, 2020 and December 31, 2019 are as follows:

June 30, 2020

Original or amortized cost

7 unchanged sentences

Total fixed maturity investments

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Investments (continued)

December 31, 2019

9 unchanged sentences

Total fixed maturity investments

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Investments (continued)

The contractual maturities of our fixed maturities are shown in the table 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.

March 31, 2020

June 30, 2020

Amortized cost

8 unchanged sentences

12 Months or More

March 31, 2020

June 30, 2020

treasury bonds

4 unchanged sentences

Total temporarily impaired fixed maturities

At March 31, 2020 , there were 184 securities in an unrealized loss position with a fair value of $ 549,130 and unrealized losses of $ 52,764 .

At June 30, 2020 , there were 134 securities in an unrealized loss position with a fair value of $ 435,809 and unrealized losses of $ 21,638 .

Of these securities, there were 65 securities that have been in an unrealized loss position for twelve months or greater with a fair value of $ 181,581 and unrealized losses of $ 13,858 .

9 unchanged sentences

Of these securities, there were 67 securities that have been in an unrealized loss position for twelve months or greater with a fair value of $ 262,519 and unrealized losses of $ 16,815 .

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Investments (continued)

Other-than-temporarily impaired

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 March 31, 2020 , we determined that unrealized losses on fixed maturities were primarily due to changes in interest rates as well as the impact of foreign exchange rate changes on certain foreign currency denominated fixed maturities since their date of purchase.

At June 30, 2020 , we determined that unrealized losses on fixed maturities were primarily due to changes in interest rates as well as the impact of foreign exchange rate changes on certain foreign currency denominated fixed maturities since their date of purchase.

All fixed maturity securities continue to pay the expected coupon payments under the contractual terms of the securities.

2 unchanged sentences

The Company continually monitors the credit quality of the fixed maturity investments to assess if it is probable that it will receive contractual or estimated cash flows in the form of principal and interest.

For the three months ended March 31, 2020 , we recognized $ 1,506 ( 2019 - $ 0 ) in OTTI charges in earnings on two fixed maturity securities.

The following tables summarize the credit ratings of our fixed maturities as at March 31, 2020 and December 31, 2019 :

March 31, 2020

For the six months ended June 30, 2020 , $ 1,506 of OTTI charges were recognized in earnings on two fixed maturity securities.

There were no OTTI losses recognized in the three months ended June 30, 2020 and in the three and six months ended June 30, 2019 .

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Investments (continued)

The following tables summarize the credit ratings of our fixed maturities as at June 30, 2020 and December 31, 2019 :

June 30, 2020

Amortized cost

9 unchanged sentences

Other Investments

The table below shows the fair value of the Company's other investments as at March 31, 2020 and December 31, 2019 :

March 31, 2020

The table below shows the fair value of the Company's other investments as at June 30, 2020 and December 31, 2019 :

June 30, 2020

December 31, 2019

1 unchanged sentence

Total other investments

The Company also holds other investments made by special purpose vehicles related to lending activities of $ 29,196 at March 31, 2020 ( December 31, 2019 - $ 26,871 ).

The Company also holds other investments made by special purpose vehicles ("SPV") related to lending activities of $ 30,346 at June 30, 2020 ( December 31, 2019 - $ 26,871 ).

These investments are carried at cost less impairment, if any, with any indication of impairment recognized in income when determined.

1 unchanged sentence

Please see "Note 5 - Fair Value Measurements" for additional information.

The Company has remaining unfunded commitments on its investment in limited partnerships of $ 333 at March 31, 2020 ( December 31, 2019 - $ 340 ).

The Company also has a remaining

The Company has remaining unfunded commitments on its investment in limited partnerships of $ 333 at June 30, 2020 ( December 31, 2019 - $ 340 ).

The Company also has a remaining unfunded commitment on its investment in special purpose vehicles focused on lending activities of $ 215 at June 30, 2020 ( December 31, 2019 - $ 767 ).

MAIDEN HOLDINGS, LTD.

2 unchanged sentences

dollars, except share and per share data)

unfunded commitment on its investment in special purpose vehicles focused on lending activities of $ 1,296 at March 31, 2020 ( December 31, 2019 - $ 767 ).

Investments (continued)

1 unchanged sentence

Net investment income was derived from the following sources:

For the Three Months Ended March 31,

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Fixed maturities

7 unchanged sentences

The following tables show the net realized gains (losses) on investment included in the Condensed Consolidated Statements of Income:

For the Three Months Ended March 31, 2020

For the Three Months Ended June 30, 2020

Fixed maturities

1 unchanged sentence

Net realized gains (losses) on investment

For the Three Months Ended March 31, 2019

For the Three Months Ended June 30, 2019

Fixed maturities

1 unchanged sentence

Net realized gains (losses) on investment

Proceeds from sales of fixed maturities were $ 224,471 for the three months ended March 31, 2020 ( 2019 - $ 84,361 ).

Net unrealized (losses) gains on investments were as follows at March 31, 2020 and December 31, 2019 , respectively:

March 31, 2020

For the Six Months Ended June 30, 2020

AFS fixed maturities

Other investments

Net realized gains (losses) on investment

For the Six Months Ended June 30, 2019

AFS fixed maturities

Other investments

Net realized gains (losses) on investment

Proceeds from sales of fixed maturities were $ 181,030 and $ 405,501 for the three and six months ended June 30, 2020 , respectively ( 2019 - $ 625,254 and $ 709,615 , respectively).

Net unrealized gains on investments were as follows at June 30, 2020 and December 31, 2019 , respectively:

June 30, 2020

December 31, 2019

1 unchanged sentence

Deferred income tax

Net unrealized gains (losses), net of deferred income tax

Net unrealized gains, net of deferred income tax

Change, net of deferred income tax

Restricted Cash and Cash Equivalents and Investments

The Company is required to provide collateral for its reinsurance liabilities under various reinsurance agreements and utilizes trust accounts to collateralize business with reinsurance counterparties.

The assets in trust as collateral are primarily cash and highly rated fixed maturities.

The fair values of these restricted assets were as follows at March 31, 2020 and December 31, 2019 :

MAIDEN HOLDINGS, LTD.

2 unchanged sentences

dollars, except share and per share data)

March 31, 2020

Investments (continued)

Restricted Cash and Cash Equivalents and Investments

The assets in trust as collateral are primarily cash and highly rated fixed maturities.

The fair values of these restricted assets were as follows at June 30, 2020 and December 31, 2019 :

June 30, 2020

December 31, 2019

8 unchanged sentences

2019 – $1,366,873)

Restricted investments – liability for investments purchased for related party agreements (1)

Total restricted investments

Total restricted cash and investments

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

(1) $ 31,997 of the restricted cash held for related party agreements as of June 30, 2020 was used to settle the liability for investments purchased of $ 44,996 as of June 30, 2020 subsequent to the quarter end.

Fair Value of Financial Instruments

31 unchanged sentences

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.

The Company determines whether the fair value estimate

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Fair Value of Financial Instruments (continued)

is in the Level 2 or Level 3 hierarchy depending on the level of observable inputs available when estimating the fair value.

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 March 31, 2020 and December 31, 2019 .

The following describes the valuation techniques used by the Company to determine the fair value of financial instruments held at June 30, 2020 and December 31, 2019 .

government and U.S.

19 unchanged sentences

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.

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Fair Value of Financial Instruments (continued)

Corporate and municipal bonds — Bonds issued by corporations, U.S.

8 unchanged sentences

If there is a reporting lag between the current period end and reporting date of the latest available fund valuation, fair values are estimated 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 investments made by special purpose vehicles focused on lending activities are carried at cost less impairment, if any, with any indication of impairment recognized in income when determined.

The investments made by SPVs focused on lending activities are carried at cost less impairment, if any, with any indication of impairment recognized in income when determined.

As these investments are carried at cost, they are not included in the fair value hierarchy below.

3 unchanged sentences

Senior notes — The carrying value for these financial instruments represents the principal value of the notes less any unamortized issuance costs.

The fair values of the senior notes are based on indicative market pricing obtained from a third-party service provider and as such, are included in the Level 2 fair value hierarchy.

As these notes are presented at carrying value, they are not included in the fair value hierarchy below.

(b) Fair Value Hierarchy

3 unchanged sentences

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 March 31, 2020 and December 31, 2019 , the Company classified its financial instruments measured at fair value on a recurring basis in the following valuation hierarchy:

March 31, 2020

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Fair Value of Financial Instruments (continued)

At June 30, 2020 and December 31, 2019 , the Company classified its financial instruments measured at fair value on a recurring basis in the following valuation hierarchy:

June 30, 2020

Quoted Prices in Active Markets for Identical Assets (Level 1)

11 unchanged sentences

As a percentage of total assets

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Fair Value of Financial Instruments (continued)

December 31, 2019

17 unchanged sentences

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 99.6 % and 99.7 % of our fixed maturities at March 31, 2020 and December 31, 2019 , respectively.

The Pricing Service was utilized to estimate fair value measurements for 99.6 % and 99.7 % of our fixed maturities at June 30, 2020 and December 31, 2019 , respectively.

The Pricing Service utilizes market quotations for fixed maturity securities that have quoted market prices in active markets.

1 unchanged sentence

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 within the fair value hierarchy.

At March 31, 2020 and December 31, 2019 , 0.4 % and 0.3 % , respectively, of the Level 2 fixed maturities are valued using the market approach.

At March 31, 2020 and December 31, 2019 , one security or $ 5,392 and $ 5,481 , 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 March 31, 2020 and December 31, 2019 , the Company has not adjusted any pricing provided to it based on the review performed by its investment managers.

At June 30, 2020 and December 31, 2019 , 0.4 % and 0.3 % , respectively, of the Level 2 fixed maturities are valued using the market approach.

At June 30, 2020 and December 31, 2019 , one security or $ 5,491 and $ 5,481 , 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 June 30, 2020 and December 31, 2019 , the Company has not adjusted any pricing provided to it based on the review performed by its investment managers.

During the year ended December 31, 2019 , the Company transferred its investment in special purpose vehicles focused on lending activities out of Level 3 within the fair value hierarchy due to a change in accounting policy to report these investments at cost less any impairment instead of fair market value.

There were no other transfers to or from Level 3 during the periods represented by these Condensed Consolidated Financial Statements.

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Fair Value of Financial Instruments (continued)

At March 31, 2020 , the Company has other investments of $ 1,800 (December 31, 2019 - $ 1,800 ) which includes investments in start-up insurance entities.

At June 30, 2020 , the Company has other investments of $ 2,800 (December 31, 2019 - $ 1,800 ) which includes investments in start-up insurance entities.

Due to significant unobservable inputs in these valuations, the Company classifies the fair value estimate of these other investments as Level 3 within the fair value hierarchy.

(d) Financial Instruments not measured at Fair Value

The following table presents the respective carrying value and fair value for the financial instruments not measured at fair value on the Condensed Consolidated Balance Sheets as at March 31, 2020 and December 31, 2019 , respectively:

March 31, 2020

The following table presents the respective carrying value and fair value for the financial instruments not measured at fair value on the Condensed Consolidated Balance Sheets as at June 30, 2020 and December 31, 2019 , respectively:

June 30, 2020

December 31, 2019

1 unchanged sentence

Carrying Value

Financial Assets

Other investments in SPV related to lending activities

Financial Liabilities

2 unchanged sentences

Total financial liabilities

The fair value of other investments in SPV related to lending activities was determined using internally developed discounted cash flow models and therefore are included in the Level 3 fair value hierarchy.

The fair values of the Senior Notes are based on indicative market pricing obtained from a third-party service provider and therefore are included in the Level 2 fair value hierarchy.

MAIDEN HOLDINGS, LTD.

12 unchanged sentences

As at December 31, 2018 , the assets and liabilities related to this business including the retrocession agreement were classified as held for sale, however, a decision was made to reclassify them 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 March 31, 2020 and December 31, 2019 .

The following table summarizes the major classes of items constituting the net loss from discontinued operations for the three months ended March 31, 2019 presented in the unaudited Condensed Consolidated Statements of Income:

For the Three Months Ended March 31,

therefore, there are no remaining assets and liabilities classified as held for sale as at June 30, 2020 and December 31, 2019 .

The following table summarizes the major classes of items constituting the net loss from discontinued operations for the three and six months ended June 30, 2019 presented in the unaudited Condensed Consolidated Statements of Income:

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Net loss and loss adjustment expenses

General and administrative expenses

Expense from discontinued operations before income tax

Income from discontinued operations before income tax

Loss on disposal of discontinued operations

Income tax expense

Loss from discontinued operations, net of income tax

As a result of the Settlement and Commutation Agreement entered into by Maiden and Enstar on July 31, 2019, Maiden recorded an additional loss from discontinued operations of $ 16,715 for the three and six months ended June 30, 2019 .

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Long-Term Debt

At March 31, 2020 and December 31, 2019 , both Maiden Holdings and its wholly owned subsidiary, Maiden NA, have outstanding publicly-traded senior notes which were issued in 2016 (" 2016 Senior Notes ") and 2013 (" 2013 Senior Notes "), respectively (collectively "Senior Notes").

At June 30, 2020 and December 31, 2019 , both Maiden Holdings and its wholly owned subsidiary, Maiden NA, have outstanding publicly-traded senior notes which were issued in 2016 (" 2016 Senior Notes ") and 2013 (" 2013 Senior Notes "), respectively (collectively "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 tables detail the issuances of Senior Notes outstanding at March 31, 2020 and December 31, 2019 :

March 31, 2020

The following tables detail the issuances of Senior Notes outstanding at June 30, 2020 and December 31, 2019 :

June 30, 2020

2016 Senior Notes

18 unchanged sentences

Effective interest rate

The interest expense incurred on the Senior Notes for the three months ended March 31, 2020 was $ 4,777 ( 2019 - $ 4,776 ), of which $ 1,342 was accrued at both March 31, 2020 and December 31, 2019 , respectively.

The interest expense incurred on the Senior Notes for the three and six months ended June 30, 2020 was $ 4,776 and $ 9,553 , respectively ( 2019 - $ 4,777 and $ 9,553 , respectively), of which $ 1,342 was accrued at both June 30, 2020 and December 31, 2019 , 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 months ended March 31, 2020 was $ 54 ( 2019 - $ 53 ).

The amortization expense for the three and six months ended June 30, 2020 was $ 54 and $ 108 , respectively ( 2019 - $ 53 and $ 106 , 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.

MAIDEN HOLDINGS, LTD.

2 unchanged sentences

dollars, except share and per share data)

Long-Term Debt (continued)

Maiden NA is required to give at least thirty and not more than sixty days notice prior to the redemption date.

The Company uses reinsurance and retrocessional agreements ("ceded reinsurance") to mitigate volatility, reduce its exposure to certain risks and provide capital support.

3 unchanged sentences

In the event that one or more of our reinsurers or retrocessionaires are unable to meet their obligations under these 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 three months ended March 31, 2020 and 2019 was as follows:

For the Three Months Ended March 31,

The effect of ceded reinsurance on net premiums written and earned and on net loss and LAE for the six months ended June 30, 2020 and 2019 was as follows:

For the Six Months Ended June 30,

Premiums written

2 unchanged sentences

Loss and LAE ceded

The Company's reinsurance recoverable on unpaid losses balance as at March 31, 2020 was $ 620,882 ( December 31, 2019 - $ 623,422 ) presented in the Condensed Consolidated Balance Sheets.

At March 31, 2020 and December 31, 2019 , the Company had no valuation allowance against reinsurance recoverable on unpaid losses.

The Company's reinsurance recoverable on unpaid losses balance as at June 30, 2020 was $ 617,496 ( December 31, 2019 - $ 623,422 ) presented in the Condensed Consolidated Balance Sheets.

At June 30, 2020 and December 31, 2019 , the Company had no valuation allowance against reinsurance recoverable on unpaid losses.

As discussed in "Note 1.

1 unchanged sentence

treaty reinsurance business held by Maiden Reinsurance 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 $ 60,281 at March 31, 2020 ( December 31, 2019 - $ 62,699 ).

The balance of reinsurance recoverable on unpaid losses due from Cavello under this retrocession agreement was $ 58,182 at June 30, 2020 ( December 31, 2019 - $ 62,699 ).

On July 31, 2019, Maiden Reinsurance and Cavello entered into the LPT/ADC Agreement, pursuant to which Cavello assumed 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 .

7 unchanged sentences

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.

As of March 31, 2020 , the reinsurance recoverable on unpaid losses under the retroactive reinsurance agreement were $ 557,950 while the deferred gain liability was $ 112,950 ( December 31, 2019 - $ 557,950 and $ 112,950 , respectively).

As of June 30, 2020 , the reinsurance recoverable on unpaid losses under the retroactive reinsurance agreement were $ 556,540 while the deferred gain liability was $ 111,540 ( December 31, 2019 - $ 557,950 and $ 112,950 , respectively).

Amortization of the deferred gain will not occur until paid losses have exceeded the minimum retention under the LPT/ADC Agreement, which is estimated to be in 2024 .

2 unchanged sentences

Under the terms of the LPT/ADC Agreement, the covered losses associated with the Commutation and Release Agreement with AmTrust 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 March 31, 2020 .

Cavello's parent company, Enstar, has credit ratings of BBB from both Standard &Poor's and Fitch Ratings at June 30, 2020 .

MAIDEN HOLDINGS, LTD.

16 unchanged sentences

The reserve for loss and LAE consists of:

March 31, 2020

June 30, 2020

December 31, 2019

3 unchanged sentences

The following table represents a reconciliation of our beginning and ending gross and net loss and LAE reserves:

For the Three Months Ended March 31,

For the Six Months Ended June 30,

Gross loss and LAE reserves, January 1

4 unchanged sentences

Effect of foreign exchange rate movements

Net loss and LAE reserves, March 31

Reinsurance recoverable on unpaid losses, March 31

Gross loss and LAE reserves, March 31

Net loss and LAE reserves, June 30

Reinsurance recoverable on unpaid losses, June 30

Gross loss and LAE reserves, June 30

Prior period development arises from changes to loss estimates recognized in the current year that relate to loss reserves in previous calendar years.

The favorable or unfavorable development reflects changes in management's best estimate of the ultimate losses under the relevant reinsurance policies after considerable review of changes in actuarial assessments.

During the three months ended March 31, 2020 , the Company recognized net favorable prior year loss development of $ 533 ( 2019 - adverse $ 7,258 ).

In the Diversified Reinsurance segment, net favorable prior year loss development was $ 533 for the three months ended March 31, 2020 ( 2019 - favorable $ 1,096 ) primarily due to favorable reserve development in German Auto Programs.

The favorable loss development for the same period in 2019 was largely due to facultative reinsurance run-off lines.

In the AmTrust Reinsurance segment, there was no prior year loss development for the three months ended March 31, 2020 , ( 2019 - adverse $ 8,126 ).

The adverse development in the three months ended March 31, 2019 was primarily driven by Commercial Auto Liability in accident years 2014 to 2017, partly offset by favorable development in Workers Compensation.

The Other category incurred net adverse prior year loss development of $ 228 for the three months ended March 31, 2019 due to increased reserves in the run-off of the NGHC Quota Share which was commuted in November 2019.

During the three and six months ended June 30, 2020 , the Company recognized net favorable prior year loss development of $ 60 and $ 593 , respectively ( 2019 - adverse $ 26,014 and $ 33,272 , respectively).

In the Diversified Reinsurance segment, net prior year loss development was adverse $ 362 and favorable $ 171 for the three and six months ended June 30, 2020 , respectively ( 2019 - favorable $ 1,052 and $ 2,148 , respectively).

Prior year loss development for the six months ended June 30, 2020 was primarily due to favorable reserve development in German Auto Programs partly offset by adverse development in specific German Auto Programs for the three months ended June 30, 2020 .

The favorable loss development for the same respective periods in 2019 was largely due to favorable development in German Auto Programs and facultative reinsurance run-off lines.

MAIDEN HOLDINGS, LTD.

2 unchanged sentences

dollars, except share and per share data)

Reserve for Loss and Loss Adjustment Expenses (continued)

In the AmTrust Reinsurance segment, the net favorable prior year loss development was $ 422 for the three and six months ended June 30, 2020 , respectively ( 2019 - adverse $ 27,090 and $ 35,216 , respectively).

The net favorable prior year loss development for the three and six months ended June 30, 2020 was primarily due to favorable development in Workers Compensation partly offset by adverse development within Commercial General Liability programs.

The net adverse development in the three and six months ended June 30, 2019 was primarily driven by Commercial Auto Liability in accident years 2015 to 2018, partly offset by favorable development in Workers Compensation.

The Other category had net favorable prior year loss development of $ 24 and net adverse prior year loss development of $ 204 for the three and six months ended June 30, 2019 due to increased reserves in the run-off of the NGHC Quota Share.

This contract was commuted in November 2019.

Related Party Transactions

2 unchanged sentences

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 and George Karfunkel are directors of AmTrust, and Barry Zyskind is the chief executive officer and chairman of AmTrust.

Leah Karfunkel, George Karfunkel and Barry Zyskind own or control approximately 53.4 % of the ownership interests of Evergreen Parent LP, the ultimate parent of AmTrust.

9 unchanged sentences

Above and below the Loss Corridor, Maiden Reinsurance 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 Reinsurance 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.

11 unchanged sentences

On January 30, 2019, in connection with the termination of the reinsurance agreement 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.

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Related Party Transactions (continued)

European Hospital Liability Quota Share

4 unchanged sentences

Maiden Reinsurance paid a ceding commission of 5 % on contracts assumed under the European Hospital Liability Quota Share.

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Related Party Transactions (continued)

Effective July 1, 2016, the European Hospital Liability Quota Share was amended such that Maiden Reinsurance 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 Reinsurance, AEL and AIU DAC agreed to terminate the European Hospital Liability Quota Share on a run-off basis effective as of January 1, 2019.

The table below shows the effect of both of these quota share arrangements with AmTrust on the Company's unaudited Condensed Consolidated Income Statement for the three months ended March 31, 2020 and 2019 , respectively:

For the Three Months Ended March 31,

The table below shows the effect of both of these quota share arrangements with AmTrust on the Company's Condensed Consolidated Income Statements for the three and six months ended June 30, 2020 and 2019 , respectively:

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Gross and net premiums written

10 unchanged sentences

Maiden Reinsurance satisfied its collateral requirements under the AmTrust Quota Share with AII as follows:

by lending funds in the amount of $ 167,975 at March 31, 2020 and December 31, 2019 pursuant to a loan agreement entered into between those parties.

by lending funds in the amount of $ 167,975 at June 30, 2020 and December 31, 2019 pursuant to a loan agreement entered into between those parties.

Advances under the loan are secured by promissory notes.

3 unchanged sentences

The interest income on the loan was $ 1,365 for the three months ended March 31, 2020 ( 2019 - $ 1,822 ) and the effective yield was 3.3 % for the same period ( 2019 - 4.3 % ).

The interest income on the loan was $ 860 and $ 2,225 for the three and six months ended June 30, 2020 , respectively ( 2019 - $ 1,842 and $ 3,664 , respectively) and the effective yield was 2.0 % and 2.6 % for the same respective periods ( 2019 - 4.4 % and 4.4 % ).

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 Reinsurance, AmTrust and AII, originally entered into on November 16, 2007, extending 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;

1 unchanged sentence

AmTrust subsidiaries.

The amount of the collateral at March 31, 2020 was $ 998,535 (December 31, 2019 - $ 1,155,955 ) and the accrued interest was $ 4,897 (December 31, 2019 - $ 7,366 ).

The amount of the collateral at June 30, 2020 was $ 861,978 (December 31, 2019 - $ 1,155,955 ) and the accrued interest was $ 3,273 (December 31, 2019 - $ 7,366 ).

Please refer to "Note 4.

2 unchanged sentences

The Company transferred cash and investments of $ 575,000 to AmTrust as a funds withheld receivable which initially had an annual interest rate of 3.5 % , subject to annual adjustment.

The annual interest rate was adjusted to 2.65 % for the three months ended March 31, 2020 .

At March 31, 2020 , the balance of funds withheld was $ 575,000 (December 31, 2019 - $ 575,000 ) and the accrued interest was $ 8,873 (December 31, 2019 - $ 5,073 ).

The interest income on the funds withheld receivable was $ 3,800 for the three months ended March 31, 2020 ( 2019 - $ 4,426 ).

The annual interest rate was adjusted to 2.65 % for the three and six months ended June 30, 2020 .

At June 30, 2020 , the balance of funds withheld was $ 575,000 (December 31, 2019 - $ 575,000 ) and the accrued interest was $ 3,803 (December 31, 2019 - $ 5,073 ).

The interest income on the funds withheld receivable was $ 3,806 and $ 7,606 for the three and six months ended June 30, 2020 , respectively ( 2019 - $ 5,017 and $ 9,443 , respectively).

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Related Party Transactions (continued)

Pursuant to the terms of the LPT/ADC Agreement, Maiden Reinsurance, 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.

1 unchanged sentence

Because these letters of credit replaced other collateral previously provided directly by Maiden Reinsurance 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 Reinsurance were required.

Effective July 31, 2019, the PTE's:

As a result of entering into both the LPT/ADC Agreement and the MCA, certain post-termination endorsements (“PTEs”) to the AmTrust Quota Share between AII and Maiden Reinsurance were required.

Effective July 31, 2019, the PTEs:

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 Reinsurance’s behalf, and further defines the permitted use and return of collateral;

1 unchanged sentence

Under certain defined conditions, Maiden Reinsurance may be required to increase this funding percentage to 110 % .

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Related Party Transactions (continued)

Effective March 16, 2020, Maiden Reinsurance discontinued as a Bermuda company and completed its re-domestication to the State of Vermont.

Bermuda is a Solvency II equivalent jurisdiction and the State of Vermont is not such a jurisdiction therefore, the collateral provided under the respective agreements with AmTrust subsidiaries was strengthened to reflect the impact of the re-domestication concurrent with the date of Maiden Reinsurance’s re-domestication to Vermont.

Bermuda is a Solvency II equivalent jurisdiction and the State of Vermont is not such a jurisdiction;

therefore, the collateral provided under the respective agreements with AmTrust subsidiaries was strengthened to reflect the impact of the re-domestication concurrent with the date of Maiden Reinsurance’s re-domestication to Vermont.

Maiden Reinsurance and AmTrust agreed to:

4 unchanged sentences

Pursuant to the terms of Post Termination Endorsement No.

2 to the AmTrust Quota Share, Maiden Reinsurance will strengthen the collateral protection provided by Maiden Reinsurance to AII by increasing the required funding percentage for Maiden Reinsurance under the collateral arrangements between the parties to 110 % 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.

2 to the AmTrust Quota Share, Maiden Reinsurance strengthened the collateral protection provided by Maiden Reinsurance to AII by increasing the required funding percentage for Maiden Reinsurance under the collateral arrangements between the parties to 110 % 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.

Post Termination Endorsement No.

1 unchanged sentence

Pursuant to the terms of Post Termination Endorsement No.

1 to the European Hospital Liability Quota Share, Maiden Reinsurance will strengthen the collateral protection provided by Maiden Reinsurance to AEL and AIU DAC by increasing the required funding percentage for Maiden Reinsurance under the collateral arrangements between the parties to the greater of 120 % of the Exposure (as defined therein) and the amount of security required to offset the increase in the Solvency Capital Requirement (“SCR”) that results from the changes in the SCR which arise out of Maiden Reinsurance's re-domestication as compared to the SCR calculation if Maiden Reinsurance had remained domesticated in a Solvency II equivalent jurisdiction with a solvency ratio above 100 % and provided collateral equivalent to 100 % of the Exposure.

1 to the European Hospital Liability Quota Share, Maiden Reinsurance strengthened the collateral protection provided by Maiden Reinsurance to AEL and AIU DAC by increasing the required funding percentage for Maiden Reinsurance under the collateral arrangements between the parties to the greater of 120 % of the Exposure (as defined therein) and the amount of security required to offset the increase in the Solvency Capital Requirement (“SCR”) that results from the changes in the SCR which arise out of Maiden Reinsurance's re-domestication as compared to the SCR calculation if Maiden Reinsurance had remained domesticated in a Solvency II equivalent jurisdiction with a solvency ratio above 100 % and provided collateral equivalent to 100 % of the Exposure.

b) European Hospital Liability Quota Share

Collateral has been provided to both AEL and AIU DAC under the European Hospital Liability Quota Share.

For AEL, the amount of the collateral held in reinsurance trust accounts at March 31, 2020 was $ 200,150 (December 31, 2019 - $ 253,631 ) and the accrued interest was $ 1,696 (December 31, 2019 - $ 1,821 ).

For AEL, the amount of the collateral held in reinsurance trust accounts at June 30, 2020 was $ 219,170 (December 31, 2019 - $ 253,631 ) and the accrued interest was $ 1,764 (December 31, 2019 - $ 1,821 ).

For AIU DAC, the Company utilizes funds withheld to satisfy its collateral requirements.

At March 31, 2020 , the amount of funds withheld was $ 74,516 ( December 31, 2019 - $ 57,305 ) and the accrued interest was $ 71 ( December 31, 2019 - $ 269 ).

AIU DAC pays Maiden Reinsurance a fixed annual interest rate of 0.5 % , on the average daily funds withheld balance which is subject to annual adjustment.The interest income on the funds withheld receivable was $ 71 for the three months ended March 31, 2020 ( 2019 - $ 53 ), respectively.

At June 30, 2020 , the amount of funds withheld was $ 93,188 ( December 31, 2019 - $ 57,305 ) and the accrued interest was $ 200 ( December 31, 2019 - $ 269 ).

AIU DAC pays Maiden Reinsurance a fixed annual interest rate of 0.5 % , on the average daily funds withheld balance which is subject to annual adjustment.The interest income on the funds withheld receivable was $ 127 and $ 198 for the three and six months ended June 30, 2020 , respectively ( 2019 - $ 72 and $ 125 , respectively).

Brokerage Agreement

4 unchanged sentences

The brokerage agreement was terminated as of March 15, 2019.

Maiden Reinsurance recorded $ 234 of reinsurance brokerage expense for the three months ended March 31, 2020 ( 2019 - $ 1,977 ) and deferred reinsurance brokerage of $ 2,139 at March 31, 2020 (December 31, 2019 - $ 2,372 ) as a result of this agreement.

Maiden Reinsurance recorded $ 119 and $ 353 of reinsurance brokerage expense for the three and six months ended June 30, 2020 , respectively ( 2019 - $ 1,398 and $ 3,375 , respectively) and deferred reinsurance brokerage of $ 1,961 at June 30, 2020 (December 31, 2019 - $ 2,372 ) as a result of this agreement.

Asset Management Agreement

2 unchanged sentences

The agreement may be terminated upon 30 days written notice by either party.

The Company recorded $ 400 of investment management fees for the three months ended March 31, 2020 ( 2019 - $ 775 ) under this agreement.

The Company recorded $ 350 and $ 750 of investment management fees for the three and six months ended June 30, 2020 , respectively ( 2019 - $ 678 and $ 1,453 , respectively) under this agreement.

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Related Party Transactions (continued)

Insurance Management Services Agreement

4 unchanged sentences

The fee for this agreement was 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 $ 25 of fees for the three months ended March 31, 2020 .

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

The Company recorded $ 25 and $ 50 of fees for the three and six months ended June 30, 2020 , respectively.

683 Capital Partners, LP (“683 Partners”)

683 Partners and its affiliates currently own or control approximately 9.2 % of the outstanding common shares of the Company and is thus deemed a related party at June 30, 2020 .

683 Partners and its affiliates also reported that they own Preference Shares of the Company and Senior Notes issued by both Maiden Holdings and Maiden NA.

Limited Partnership Agreement with 683 Capital Management, LLC ("683 Capital")

In July 2020, the Company and 683 Capital entered into a limited partnership agreement (“683 LP Agreement”) whereby 683 Capital will separately manage certain funds of Maiden Reinsurance at its discretion, subject to guidelines established by the parties.

Under the 683 LP Agreement, Maiden Reinsurance will pay 683 Capital a management fee and subject to certain metrics agreed to by the parties, an incentive fee upon attainment of those metrics.

Maiden Reinsurance may periodically and in its discretion increase the amount invested under the 683 LP Agreement, and subject to certain conditions, reduce the amount invested under the 683 LP Agreement.

Commitments and Contingencies

1 unchanged sentence

Concentrations of Credit Risk

At March 31, 2020 and December 31, 2019 , 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.

At June 30, 2020 and December 31, 2019 , 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.

8 unchanged sentences

AmTrust has a financial strength/credit rating of A- from A.M.

Best at March 31, 2020 .

Best at June 30, 2020 .

To mitigate credit risk, the Company generally has a contractual right of offset thereby allowing claims to be settled net of any premiums or loan receivable.

The Company believes these balances as at March 31, 2020 will be fully collectible.

The Company believes these balances as at June 30, 2020 will be fully collectible.

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 months ended March 31, 2020 .

The Company did not enter into any new lease arrangements during the three and six months ended June 30, 2020 .

The Company's leases are all currently classified as operating leases and none of them have non-lease components.

5 unchanged sentences

The Company's weighted-average remaining lease term is 2.3 years.

At March 31, 2020 , the Company's future lease obligations of $ 2,060 ( December 31, 2019 - $ 2,342 ) 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 its secured incremental borrowing rate.

At June 30, 2020 , the Company's future lease obligations of $ 1,775 ( December 31, 2019 - $ 2,342 ) 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 its secured incremental borrowing rate.

This amount has been recognized on the Condensed Consolidated Balance Sheets as a lease liability of $ 1,775 within accrued expenses and other liabilities with an equivalent amount for the right-of-use asset presented as part of other assets.

Under Topic 842, Leases , the Company continues to recognize the related leasing expense on a straight-line basis over the lease term in the unaudited Condensed Consolidated Statements of Income.

The Company's total lease expense for the three months ended March 31, 2020 was $ 410 ( 2019 - $ 421 ) 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 months ended March 31, 2020 was $ 340 ( 2019 - $ 341 ).

Under Topic 842, Leases , the Company continues to recognize the related leasing expense on a straight-line basis over the lease term in the Condensed Consolidated Statements of Income.

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Commitments and Contingencies (continued)

The Company's total lease expense for the three and six months ended June 30, 2020 was $ 449 and $ 859 , respectively ( 2019 - $ 389 and $ 810 , 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 six months ended June 30, 2020 was $ 340 and $ 680 , respectively ( 2019 - $ 340 and $ 681 , respectively).

The scheduled maturity of the Company's operating lease liabilities are expected to be as follows:

March 31, 2020

June 30, 2020

Discount for present value

5 unchanged sentences

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.

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Commitments and Contingencies (continued)

In April 2009, the Company learned that Bentzion S.

27 unchanged sentences

It is currently uncertain as to the effect of such litigation on our business, operating results and financial condition.

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

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 March 31,

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Net income (loss) from continuing operations

1 unchanged sentence

Income (loss) attributable to common shareholders, before discontinued operations

Loss from discontinued operations, net of income tax expense

Loss from discontinued operations, net of income tax

Net income (loss) allocated to common shareholders

Weighted average number of common shares – basic and diluted (2)

Weighted average number of common shares – basic (2)

Share options and restricted share units

Adjusted weighted average number of common shares – diluted

Basic and diluted earnings (loss) from continuing operations per share attributable to common shareholders

1 unchanged sentence

Basic and diluted earnings (loss) per share attributable to common shareholders:

For the Three Months Ended March 31,

This represents the share in net income using the two class method of the holders of non-vested restricted shares issued to the Company's employees under the 2019 Omnibus Incentive Plan.

2 unchanged sentences

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, 2019 , for the terms and conditions of securities that could potentially be dilutive in the future.

For the three months ended March 31, 2020 , there were no potentially dilutive securities.

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

For the three and six months ended June 30, 2020 , there were no potentially dilutive securities.

Shareholders' Equity

Common Shares

At March 31, 2020 , the aggregate authorized share capital of the Company is 150,000,000 shares from which the Company has issued 88,983,171 common shares, of which 83,969,991 common shares are outstanding, and 18,600,000 preference shares, all of which are outstanding.

The remaining 42,416,829 shares are undesignated at March 31, 2020 .

At June 30, 2020 , the aggregate authorized share capital of the Company is 150,000,000 shares from which the Company has issued 89,732,851 common shares, of which 84,718,837 common shares are outstanding, and 18,600,000 preference shares, all of which are outstanding.

The remaining 41,667,149 shares are undesignated at June 30, 2020 .

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, 2019 .

Treasury Shares

During the three months ended March 31, 2019 , the Company repurchased a total of 182 shares at an average price per share of $ 1.48 from employees, which represent withholdings in respect of tax obligations on the vesting of restricted shares and performance based shares.

There were no such repurchases during the three months ended March 31, 2020 .

The Company has a remaining authorization of $ 74,245 for share repurchases at March 31, 2020 ( December 31, 2019 - $ 74,245 ).

No repurchases were made during the three months ended March 31, 2020 and 2019 under the share repurchase plan.

During the six months ended June 30, 2020 , the Company repurchased total shares of 834 ( 2019 - 23,220 ) at an average price per share of $ 1.13 ( 2019 - $ 0.78 ) from employees, which represent withholdings in respect of tax obligations on the vesting of restricted shares and performance based shares.

The Company has a remaining authorization of $ 74,245 for share repurchases at June 30, 2020 ( December 31, 2019 - $ 74,245 ).

No repurchases were made during the three and six months ended June 30, 2020 and 2019 under the share repurchase plan.

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

Shareholders' Equity (continued)

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 March 31, 2020

For the Three Months Ended June 30, 2020

Change in net unrealized gains on investment

1 unchanged sentence

Beginning balance

Other comprehensive loss before reclassifications

Amounts reclassified from AOCI to net loss, net of tax

Net current period other comprehensive loss

Other comprehensive income (loss) before reclassifications

Amounts reclassified from AOCI to net income, net of tax

Net current period other comprehensive income (loss)

Ending balance, Maiden shareholders

For the Three Months Ended March 31, 2019

For the Three Months Ended June 30, 2019

Change in net unrealized gains on investment

1 unchanged sentence

Beginning balance

Other comprehensive income before reclassifications

Other comprehensive income (loss) before reclassifications

Amounts reclassified from AOCI to net loss, net of tax

Net current period other comprehensive income

Net current period other comprehensive income (loss)

Ending balance, Maiden shareholders

For the Three Months Ended March 31, 2020

For the Six Months Ended June 30, 2020

Change in net unrealized gains on investment

Foreign currency translation

Beginning balance

Other comprehensive income (loss) before reclassifications

Amounts reclassified from AOCI to net income, net of tax

Net current period other comprehensive loss

Ending balance, Maiden shareholders

For the Six Months Ended June 30, 2019

Change in net unrealized gains on investment

Foreign currency translation

Beginning balance

Other comprehensive income (loss) before reclassifications

Amounts reclassified from AOCI to net loss, net of tax

Net current period other comprehensive income (loss)

Ending balance, Maiden shareholders

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

What changed 10-Q

Item 1. Financial Statements