What changed in this filing

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Item 1. Financial Statements

2020-11-13 compared with 2020-08-14 · 554 added, 293 removed, 955 unchanged (47% of the section changed)

4 unchanged sentences

dollars, except share and per share data)

September 30,

2020 December 31,

ASSETS (Unaudited) (Audited)

Fixed maturities, available-for-sale, at fair value (amortized cost 2020 - $ 1,258,915 ;

2019 - $ 1,813,426 )

$ 1,287,967 $ 1,835,518

Other investments 75,364 31,748

3 unchanged sentences

Accrued investment income 12,510 18,331

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

Reinsurance balances receivable, net 6,144 12,181

Reinsurance recoverable on unpaid losses 597,677 623,422

1 unchanged sentence

Deferred commission and other acquisition expenses (includes $ 49,216 and $ 68,433 from related parties in 2020 and 2019, respectively)

55,962 77,356

Funds withheld receivable (includes $ 601,902 and $ 632,305 from related parties in 2020 and 2019, respectively)

652,855 684,441

Other assets 8,355 9,946

$ 3,054,704 $ 3,568,196

Reserve for loss and loss adjustment expenses (includes $ 1,810,043 and $ 2,272,418 from related parties in 2020 and 2019, respectively)

$ 1,975,073 $ 2,439,907

Unearned premiums (includes $ 138,252 and $ 189,797 from related parties in 2020 and 2019, respectively)

161,453 220,269

Deferred gain on retroactive reinsurance 79,995 112,950

Liability for securities purchased

Accrued expenses and other liabilities (includes $ 34,414 and $ 20,049 from related parties in 2020 and 2019, respectively)

45,026 32,444

Senior notes - principal amount 262,500 262,500

2 unchanged sentences

Total liabilities

2,516,618 3,060,478

Commitments and Contingencies

6 unchanged sentences

Accumulated deficit ( 663,559 ) ( 695,794 )

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

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

( 31,534 ) ( 31,533 )

Total shareholders’ equity

538,086 507,718

Total liabilities and equity

$ 3,054,704 $ 3,568,196

See accompanying notes to the unaudited Condensed Consolidated Financial Statements.

3 unchanged sentences

dollars, except per share data)

For the Three Months Ended June 30,

For the Six Months Ended June 30,

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2020 2019 2020 2019

Gross premiums written

$ 3,517 $ 35,844 $ 20,233 $ ( 523,178 )

Net premiums written

$ 3,031 $ 35,944 $ 17,493 $ ( 525,995 )

Change in unearned premiums

21,274 58,954 59,335 937,981

Net premiums earned

24,305 94,898 76,828 411,986

Other insurance revenue

261 554 919 2,120

Net investment income

12,686 13,223 44,959 76,367

Net realized gains on investment

4,133 12,700 24,046 25,685

Total other-than-temporary impairment losses

( 962 ) ( 165 ) ( 2,468 ) ( 165 )

Total revenues

40,423 121,210 144,284 515,993

Net loss and loss adjustment expenses

9,065 140,860 41,159 415,110

Commission and other acquisition expenses

9,651 32,763 29,778 152,036

General and administrative expenses

8,160 8,898 25,971 37,675

Interest and amortization expenses

4,832 4,831 14,493 14,490

Foreign exchange and other losses (gains) 6,536 ( 7,827 ) 634 ( 14,013 )

Total expenses

38,244 179,525 112,035 605,298

Income (loss) from continuing operations before income taxes 2,179 ( 58,315 ) 32,249 ( 89,305 )

income tax benefit

income tax expense (benefit) 17 87 14 ( 977 )

Income (loss) from continuing operations 2,162 ( 58,402 ) 32,235 ( 88,328 )

Loss from discontinued operations, net of income tax

Income (loss) from discontinued operations, net of income tax — 75 — ( 22,048 )

Net income (loss) $ 2,162 $ ( 58,327 ) $ 32,235 $ ( 110,376 )

2 unchanged sentences

Basic and diluted earnings (loss) per share attributable to common shareholders $ 0.03 $ ( 0.70 ) $ 0.38 $ ( 1.33 )

Weighted average number of common shares - basic

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

Weighted average number of common shares - basic and diluted 84,744,787 83,092,085 84,181,528 83,036,925

See accompanying notes to the unaudited Condensed Consolidated Financial Statements.

2 unchanged sentences

(in thousands of U.S.

For the Three Months Ended June 30,

For the Six Months Ended June 30,

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2020 2019 2020 2019

Net income (loss) $ 2,162 $ ( 58,327 ) $ 32,235 $ ( 110,376 )

Other comprehensive income (loss)

Net unrealized holdings gains on fixed maturities arising during period

Net unrealized holdings gains (losses) on fixed maturities arising during period 15,028 ( 2,129 ) 16,603 89,919

Adjustment for reclassification of net realized gains recognized in net income (loss) ( 3,242 ) ( 8,555 ) ( 9,643 ) ( 11,482 )

1 unchanged sentence

Other comprehensive income (loss), before tax 4,788 796 ( 3,861 ) 87,723

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

Income tax expense related to components of other comprehensive income (loss) ( 32 ) ( 12 ) ( 18 ) ( 93 )

Other comprehensive income (loss), after tax 4,756 784 ( 3,879 ) 87,630

Comprehensive income

Comprehensive income (loss) 6,918 ( 57,543 ) 28,356 ( 22,746 )

Comprehensive income attributable to noncontrolling interests — — — ( 78 )

Comprehensive income attributable to Maiden

Comprehensive income (loss) attributable to Maiden $ 6,918 $ ( 57,543 ) $ 28,356 $ ( 22,824 )

See accompanying notes to the unaudited Condensed Consolidated Financial Statements.

2 unchanged sentences

(in thousands of U.S.

For the Three Months Ended June 30,

For the Six Months Ended June 30,

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2020 2019 2020 2019

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

Exercise of options and issuance of shares

897 881 882 879

Exercise of options and issuance of common shares 1 — 16 2

Ending balance

898 881 898 881

Additional paid-in capital

Beginning balance

752,896 751,007 751,327 749,418

Exercise of options and issuance of common shares

( 1 ) — ( 16 ) ( 2 )

Share-based compensation expense

429 131 2,013 1,722

Ending balance

753,324 751,138 753,324 751,138

Accumulated other comprehensive income

Beginning balance

9,201 21,152 17,836 ( 65,616 )

Change in net unrealized gains (losses) on investment

11,754 ( 10,696 ) 6,942 78,344

Foreign currency translation adjustment

( 6,998 ) 11,480 ( 10,821 ) 9,208

Ending balance

13,957 21,936 13,957 21,936

Accumulated deficit

Beginning balance

( 665,721 ) ( 615,940 ) ( 695,794 ) ( 563,891 )

Net income (loss)

2,162 ( 58,327 ) 32,235 ( 110,376 )

Ending balance

( 663,559 ) ( 674,267 ) ( 663,559 ) ( 674,267 )

Treasury shares

Beginning balance

( 31,534 ) ( 31,528 ) ( 31,533 ) ( 31,515 )

Shares repurchased

— ( 5 ) ( 1 ) ( 18 )

Ending balance

Noncontrolling interests in subsidiaries

( 31,534 ) ( 31,533 ) ( 31,534 ) ( 31,533 )

Non-controlling interests in subsidiaries

Beginning balance

Disposal of subsidiaries

— — — ( 719 )

Foreign currency translation adjustment

1 unchanged sentence

Total shareholders' equity

$ 538,086 $ 533,155 $ 538,086 $ 533,155

See accompanying notes to the unaudited Condensed Consolidated Financial Statements.

2 unchanged sentences

(in thousands of U.S.

For the Six Months Ended June 30,

For the Nine Months Ended September 30, 2020 2019

Cash flows from operating activities

5 unchanged sentences

Total other-than-temporary impairment losses

Foreign exchange and other gains

Foreign exchange and other losses (gains) 634 ( 14,013 )

Changes in assets – (increase) decrease:

4 unchanged sentences

Funds withheld receivable 53,205 ( 82,459 )

Other assets ( 3,589 ) ( 5,843 )

Changes in liabilities – increase (decrease):

3 unchanged sentences

Net cash used in continuing operations

( 447,664 ) ( 947,441 )

Net cash used in discontinued operations

6 unchanged sentences

Proceeds from sale and redemption of other investments 1,786 858

Other, net ( 602 ) 3,253

Net cash provided by investing activities for continuing operations

528,677 692,507

Net cash used in investing activities for discontinued operations

4 unchanged sentences

Effect of exchange rate changes on foreign currency cash, restricted cash and equivalents 1,605 ( 1,269 )

Net increase in cash, restricted cash and cash equivalents

Net increase (decrease) in cash, restricted cash and cash equivalents 82,617 ( 264,176 )

Cash, restricted cash and cash equivalents, beginning of period 107,278 337,102

5 unchanged sentences

Non-cash investing activities

Investments transferred out related to Partial Termination Amendment

Investments transferred out related to funds withheld arrangement with AmTrust

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

32 unchanged sentences

(2) Maiden Reinsurance'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 Reinsurance from the sale proceeds of Maiden US;

("Maiden NA"), each made their pro rata portion of capital injections in the aggregate of $ 125,000 on December 31, 2018 and $ 70,000 on January 18, 2019 to Maiden Reinsurance from the sale proceeds of Maiden US;

(3) entered into a partial termination amendment ("Partial Termination Amendment") with AmTrust Financial Services, Inc.

10 unchanged sentences

Re-domestication of Maiden Reinsurance

Effective March 16, 2020, we re-domesticated our principal operating subsidiary, Maiden Reinsurance, to the State of Vermont in the United States, having made the necessary filings in both Vermont and Bermuda in the fourth quarter of 2019 and first quarter of 2020.

Effective March 16, 2020, we re-domesticated our principal operating subsidiary, Maiden Reinsurance, to the State of Vermont in the U.S., having made the necessary filings in both Vermont and Bermuda in the fourth quarter of 2019 and first quarter of 2020.

Maiden Reinsurance is now subject to the statutes and regulations of Vermont in the ordinary course of business.

1 unchanged sentence

The re-domestication, in combination with the transactions completed pursuant to the Strategic Review, will continue to strengthen the Company’s capital position and solvency ratios.

While the Vermont Department of Financial Regulation ("Vermont DFR") will be the group supervisor for the Company, the re-domestication did not apply to the parent holding company which remains a Bermuda-based holding company.

Securities issued by Maiden Holdings were not affected by the re-domestication of Maiden Reinsurance to Vermont.

Concurrent with its re-domestication to Vermont on March 16, 2020, Maiden Holdings contributed as capital the remaining 65 % of its ownership in Maiden Reinsurance to Maiden NA.

Maiden NA now owns 100 % of Maiden Reinsurance.

MAIDEN HOLDINGS, LTD.

3 unchanged sentences

Basis of Presentation (continued)

Securities issued by Maiden Holdings were not affected by the re-domestication of Maiden Reinsurance to Vermont.

Concurrent with its re-domestication to Vermont on March 16, 2020, Maiden Holdings contributed as capital the remaining 65 % of its ownership in Maiden Reinsurance to Maiden NA.

Maiden NA now owns 100 % of Maiden Reinsurance in the aggregate.

As a result of the strategic decision to divest all of the Company's U.S.

81 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 June 30, 2020

Diversified Reinsurance

AmTrust Reinsurance

For the Three Months Ended September 30, 2020 Diversified Reinsurance AmTrust Reinsurance Total

Gross premiums written

$ 9,152 $ ( 5,635 ) $ 3,517

Net premiums written

$ 8,666 $ ( 5,635 ) $ 3,031

Net premiums earned

$ 11,323 $ 12,982 $ 24,305

Other insurance revenue

Net loss and loss adjustment expenses ("loss and LAE")

( 6,624 ) ( 2,441 ) ( 9,065 )

Commission and other acquisition expenses

( 4,204 ) ( 5,447 ) ( 9,651 )

General and administrative expenses

( 1,818 ) ( 630 ) ( 2,448 )

Underwriting (loss) income

$ ( 1,062 ) $ 4,464 3,402

Reconciliation to net income from continuing operations

Net investment income and realized gains on investment 16,819

Total other-than-temporary impairment losses

Interest and amortization expenses

1 unchanged sentence

Other general and administrative expenses

Income tax benefit

Income tax expense ( 17 )

Net income from continuing operations $ 2,162

Net loss and LAE ratio (1)

57.2 % 18.8 % 36.9 %

Commission and other acquisition expense ratio (2)

36.3 % 42.0 % 39.3 %

General and administrative expense ratio (3)

15.7 % 4.8 % 33.2 %

Expense ratio (4)

52.0 % 46.8 % 72.5 %

Combined ratio (5)

109.2 % 65.6 % 109.4 %

MAIDEN HOLDINGS, LTD.

3 unchanged sentences

Segment Information (continued)

For the Three Months Ended June 30, 2019

Diversified Reinsurance

AmTrust Reinsurance

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

Net 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

Underwriting income (loss)

Reconciliation to net income from continuing operations

( 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

Interest and amortization expenses

1 unchanged sentence

Other general and administrative expenses

Income tax benefit

Net income from continuing operations

Income tax expense ( 87 )

Net loss from continuing operations

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 % 9.3 %

Expense ratio (4)

42.1 % 34.9 % 43.6 %

Combined ratio (5)

107.7 % 205.5 % 191.2 %

MAIDEN HOLDINGS, LTD.

3 unchanged sentences

Segment Information (continued)

For the Six Months Ended June 30, 2020

Diversified Reinsurance

AmTrust Reinsurance

For the Nine Months Ended September 30, 2020 Diversified Reinsurance AmTrust Reinsurance Total

Gross premiums written

$ 30,573 $ ( 10,340 ) $ 20,233

Net premiums written

$ 27,591 $ ( 10,098 ) $ 17,493

Net premiums earned

$ 35,381 $ 41,447 $ 76,828

Other insurance revenue

Net loss and LAE

( 19,703 ) ( 21,456 ) ( 41,159 )

Commission and other acquisition expenses

( 13,557 ) ( 16,221 ) ( 29,778 )

General and administrative expenses

Underwriting loss

( 5,177 ) ( 1,941 ) ( 7,118 )

Underwriting (loss) income $ ( 2,137 ) $ 1,829 ( 308 )

Reconciliation to net income from continuing operations

2 unchanged sentences

Interest and amortization expenses

Foreign exchange and other gains

Foreign exchange and other losses ( 634 )

Other general and administrative expenses

Income tax benefit

Income tax expense ( 14 )

Net income from continuing operations

Net loss and LAE ratio (1)

54.3 % 51.8 % 52.9 %

Commission and other acquisition expense ratio (2)

37.3 % 39.1 % 38.3 %

General and administrative expense ratio (3)

14.3 % 4.7 % 33.4 %

Expense ratio (4)

51.6 % 43.8 % 71.7 %

Combined ratio (5)

105.9 % 95.6 % 124.6 %

MAIDEN HOLDINGS, LTD.

3 unchanged sentences

Segment Information (continued)

For the Six Months Ended June 30, 2019

Diversified Reinsurance

AmTrust Reinsurance

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

2,120 — — 2,120

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

$ ( 1,704 ) $ ( 160,059 ) $ ( 312 ) ( 162,075 )

Reconciliation to net loss from continuing operations

Net investment income and realized gains on investment 102,052

Total other-than-temporary impairment losses

Interest and amortization expenses

4 unchanged sentences

Net loss and LAE ratio (1)

57.8 % 108.8 % 100.2 %

Commission and other acquisition expense ratio (2)

34.7 % 37.1 % 36.7 %

General and administrative expense ratio (3)

9.9 % 0.6 % 9.1 %

Expense ratio (4)

44.6 % 37.7 % 45.8 %

Combined ratio (5)

102.4 % 146.5 % 146.0 %

(1) Calculated by dividing net loss and LAE by the sum of net premiums earned and other insurance revenue.

3 unchanged sentences

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

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

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 September 30, 2020 and December 31, 2019:

September 30, 2020 Diversified Reinsurance AmTrust Reinsurance Total

Total assets - reportable segments

$ 156,237 $ 2,413,955 $ 2,570,192

Corporate assets

December 31, 2019

Diversified Reinsurance

AmTrust Reinsurance

$ 156,237 $ 2,413,955 $ 3,054,704

December 31, 2019 Diversified Reinsurance AmTrust Reinsurance Total

Total assets - reportable segments

$ 167,845 $ 2,843,802 $ 3,011,647

Corporate assets

$ 167,845 $ 2,843,802 $ 3,568,196

MAIDEN HOLDINGS, LTD.

2 unchanged sentences

dollars, except share and per share data)

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,

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, 2020 and 2019:

For the Three Months Ended September 30, 2020 2019

Net premiums written

1 unchanged sentence

International

$ 8,757 $ 14,563

( 91 ) ( 24 )

Total Diversified Reinsurance

1 unchanged sentence

Small Commercial Business

( 2,123 ) 8,050

Specialty Program

( 209 ) 4,139

Specialty Risk and Extended Warranty

( 3,303 ) 9,216

Total AmTrust Reinsurance

( 5,635 ) 21,405

Total Net Premiums Written

For the Six Months Ended June 30,

$ 3,031 $ 35,944

For the Nine Months Ended September 30, 2020 2019

Net premiums written

1 unchanged sentence

International

$ 27,627 $ 38,246

( 36 ) ( 42 )

Total Diversified Reinsurance

27,591 38,204

AmTrust Reinsurance

Small Commercial Business

( 8,517 ) ( 329,116 )

Specialty Program

268 ( 24,500 )

Specialty Risk and Extended Warranty

( 1,849 ) ( 210,583 )

Total AmTrust Reinsurance

( 10,098 ) ( 564,199 )

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,

$ 17,493 $ ( 525,995 )

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, 2020 and 2019:

For the Three Months Ended September 30, 2020 2019

Net premiums earned

Total % of Total Total % of Total

Diversified Reinsurance

International

$ 11,414 47.0 % $ 20,516 21.6 %

( 91 ) ( 0.4 ) % ( 24 ) — %

Total Diversified Reinsurance

11,323 46.6 % 20,492 21.6 %

AmTrust Reinsurance

Small Commercial Business

( 1,921 ) ( 7.9 ) % 18,686 19.7 %

Specialty Program

( 190 ) ( 0.8 ) % 22,204 23.4 %

Specialty Risk and Extended Warranty

15,093 62.1 % 33,516 35.3 %

Total AmTrust Reinsurance

12,982 53.4 % 74,406 78.4 %

Total Net Premiums Earned

$ 24,305 100.0 % $ 94,898 100.0 %

MAIDEN HOLDINGS, LTD.

3 unchanged sentences

Segment Information (continued)

For the Six Months Ended June 30,

For the Nine Months Ended September 30, 2020 2019

Net premiums earned

Total % of Total Total % of Total

Diversified Reinsurance

International

$ 35,417 46.1 % $ 68,298 16.6 %

( 36 ) — % ( 42 ) — %

Total Diversified Reinsurance

35,381 46.1 % 68,256 16.6 %

AmTrust Reinsurance

Small Commercial Business

( 8,094 ) ( 10.6 ) % 81,424 19.8 %

Specialty Program

311 0.4 % 128,751 31.2 %

Specialty Risk and Extended Warranty

49,230 64.1 % 133,555 32.4 %

Total AmTrust Reinsurance

41,447 53.9 % 343,730 83.4 %

Total Net Premiums Earned

Fixed Maturities

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

Gross unrealized gains

Gross unrealized losses

$ 76,828 100.0 % $ 411,986 100.0 %

a) Fixed Maturities

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

September 30, 2020 Original or amortized cost Gross unrealized gains Gross unrealized losses Fair value

treasury bonds

$ 100,930 $ 197 $ — $ 101,127

agency bonds – mortgage-backed

339,144 11,567 ( 361 ) 350,350

government and supranational bonds

8,649 605 ( 32 ) 9,222

Asset-backed securities

184,982 1,233 ( 1,225 ) 184,990

Corporate bonds

625,210 27,782 ( 10,714 ) 642,278

Total fixed maturity investments

December 31, 2019

Original or amortized cost

Gross unrealized gains

Gross unrealized losses

$ 1,258,915 $ 41,384 $ ( 12,332 ) $ 1,287,967

December 31, 2019 Original or amortized cost Gross unrealized gains Gross unrealized losses Fair value

treasury bonds

$ 94,921 $ 704 $ — $ 95,625

agency bonds – mortgage-backed

533,296 6,717 ( 1,291 ) 538,722

government and supranational bonds

11,796 294 ( 91 ) 11,999

Asset-backed securities

187,881 821 ( 532 ) 188,170

Corporate bonds

981,441 31,140 ( 15,725 ) 996,856

Municipal bonds

4,091 55 — 4,146

Total fixed maturity investments

$ 1,813,426 $ 39,731 $ ( 17,639 ) $ 1,835,518

MAIDEN HOLDINGS, LTD.

5 unchanged sentences

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.

June 30, 2020

Amortized cost

September 30, 2020 Amortized cost Fair value

Due in one year or less

$ 161,459 $ 160,918

Due after one year through five years

445,698 459,737

Due after five years through ten years

127,632 131,972

734,789 752,627

agency bonds – mortgage-backed

339,144 350,350

Asset-backed securities

184,982 184,990

Total fixed maturity investments

$ 1,258,915 $ 1,287,967

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

June 30, 2020

treasury bonds

Less than 12 Months 12 Months or More Total

September 30, 2020 Fair

value Unrealized

agency bonds – mortgage-backed

$ 25,644 $ ( 252 ) $ 9,871 $ ( 109 ) $ 35,515 $ ( 361 )

government and supranational bonds

1,481 ( 11 ) 597 ( 21 ) 2,078 ( 32 )

Asset-backed securities 35,748 ( 450 ) 60,211 ( 775 ) 95,959 ( 1,225 )

Corporate bonds

100,944 ( 4,857 ) 76,452 ( 5,857 ) 177,396 ( 10,714 )

Total temporarily impaired fixed maturities

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 .

$ 163,817 $ ( 5,570 ) $ 147,131 $ ( 6,762 ) $ 310,948 $ ( 12,332 )

At September 30, 2020, there were 116 securities in an unrealized loss position with a fair value of $ 310,948 and unrealized losses of $ 12,332 .

Of these securities, there were 54 securities that have been in an unrealized loss position for twelve months or greater with a fair value of $ 147,131 and unrealized losses of $ 6,762 .

Less than 12 Months

12 Months or More

December 31, 2019

Less than 12 Months 12 Months or More Total

December 31, 2019 Fair

value Unrealized

agency bonds – mortgage-backed

$ 31,401 $ ( 257 ) $ 85,008 $ ( 1,034 ) $ 116,409 $ ( 1,291 )

government and supranational bonds

1,824 ( 22 ) 701 ( 69 ) 2,525 ( 91 )

Asset-backed securities 60,863 ( 240 ) 17,594 ( 292 ) 78,457 ( 532 )

Corporate bonds

29,692 ( 305 ) 159,216 ( 15,420 ) 188,908 ( 15,725 )

Total temporarily impaired fixed maturities

$ 123,780 $ ( 824 ) $ 262,519 $ ( 16,815 ) $ 386,299 $ ( 17,639 )

At December 31, 2019, there were 104 securities in an unrealized loss position with a fair value of $ 386,299 and unrealized losses of $ 17,639 .

2 unchanged sentences

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 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.

At September 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.

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 the amortized cost basis of the securities will ultimately be recovered.

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 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.

3 unchanged sentences

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

Based on our analysis, our fixed maturity portfolio is of high credit quality and we believe the amortized cost basis of the securities will ultimately be recovered.

For the three and nine months ended September 30, 2020, $ 962 and $ 2,468 of OTTI charges were recognized in earnings on two and four fixed maturity securities, respectively.

For the three and nine months ended September 30, 2019, the Company recognized $ 165 in OTTI charges in earnings on one fixed maturity security.

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

September 30, 2020 Amortized cost Fair value % of Total

treasury bonds

$ 100,930 $ 101,127 7.8 %

339,144 350,350 27.2 %

97,188 97,508 7.6 %

114,808 116,591 9.1 %

280,518 288,467 22.4 %

BBB+, BBB, BBB-

280,263 289,970 22.5 %

46,064 43,954 3.4 %

Total fixed maturities (1)

December 31, 2019

Amortized cost

$ 1,258,915 $ 1,287,967 100.0 %

December 31, 2019 Amortized cost Fair value % of Total

treasury bonds

$ 94,921 $ 95,625 5.2 %

533,296 538,722 29.4 %

99,212 99,542 5.4 %

101,491 101,467 5.5 %

540,002 549,479 29.9 %

BBB+, BBB, BBB-

438,731 445,202 24.3 %

5,773 5,481 0.3 %

Total fixed maturities (1)

$ 1,813,426 $ 1,835,518 100.0 %

(1) Ratings above are based on Standard & Poor’s ("S&P"), or equivalent, ratings .

Other Investments

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

b) Other Investments

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

September 30, 2020 December 31, 2019

Fair value % of Total

fair value Fair value % of Total

Hedge fund investments $ 25,376 60.4 % $ — — %

Investment in limited partnerships

13,850 33.0 % 3,077 63.1 %

2,800 6.6 % 1,800 36.9 %

Total other investments $ 42,026 100.0 % $ 4,877 100.0 %

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 ).

The Company also holds other investments made by special purpose vehicles ("SPV") related to lending activities of $ 33,338 at September 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 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 ).

The Company has remaining unfunded commitments on its investment in limited partnerships of $ 333 at September 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 $ 23,127 at September 30, 2020 (December 31, 2019 - $ 767 ).

MAIDEN HOLDINGS, LTD.

3 unchanged sentences

Investments (continued)

Net Investment Income

c) Net Investment Income

Net investment income was derived from the following sources:

For the Three Months Ended June 30,

For the Six Months Ended June 30,

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2020 2019 2020 2019

Fixed maturities

$ 7,647 $ 19,798 $ 29,933 $ 69,540

Funds withheld interest

3,981 5,267 11,843 14,973

Loan to related party

886 1,777 3,111 5,441

Cash and cash equivalents and other

548 599 1,203 2,190

13,062 27,441 46,090 92,144

Interest paid on LPT/ADC and Commutation (1)

— ( 13,596 ) — ( 13,596 )

Investment expenses

( 376 ) ( 622 ) ( 1,131 ) ( 2,181 )

Net investment income

Realized Gains (Losses) on Investment

$ 12,686 $ 13,223 $ 44,959 $ 76,367

(1) Interest expense paid on LPT/ADC Agreement and Commutation Payment includes:

a) Maiden Reinsurance 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;

and b) Maiden Reinsurance 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 Reinsurance's transfer of cash and invested assets as described in Part I of our Annual Report on Form 10-K for the year ended December 31, 2019 .

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

For the Three Months Ended June 30, 2020

For the Three Months Ended September 30, 2020 Gross gains Gross losses Net

Fixed maturities

$ 3,948 $ — $ 3,948

Other investments

715 ( 530 ) 185

Net realized gains (losses) on investment

For the Three Months Ended June 30, 2019

$ 4,663 $ ( 530 ) $ 4,133

For the Three Months Ended September 30, 2019 Gross gains Gross losses Net

Fixed maturities

$ 13,506 $ ( 904 ) $ 12,602

Other investments

Net realized gains (losses) on investment

For the Six Months Ended June 30, 2020

$ 13,604 $ ( 904 ) $ 12,700

For the Nine Months Ended September 30, 2020 Gross gains Gross losses Net

AFS fixed maturities

$ 23,939 $ ( 1 ) $ 23,938

Other investments

822 ( 714 ) 108

Net realized gains (losses) on investment

For the Six Months Ended June 30, 2019

$ 24,761 $ ( 715 ) $ 24,046

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

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

Fixed maturities

Deferred income tax

Net unrealized gains, net of deferred income tax

Change, net of deferred income tax

$ 41,615 $ ( 15,930 ) $ 25,685

Proceeds from sales of fixed maturities were $ 71,857 and $ 477,358 for the three and nine months ended September 30, 2020, respectively (2019 - $ 136,347 and $ 845,962 , respectively).

MAIDEN HOLDINGS, LTD.

3 unchanged sentences

Investments (continued)

Restricted Cash and Cash Equivalents and Investments

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

September 30, 2020 December 31, 2019

Fixed maturities

$ 29,052 $ 22,092

Deferred income tax

( 114 ) ( 96 )

Net unrealized gains, net of deferred income tax

$ 28,938 $ 21,996

Change, net of deferred income tax

$ 6,942 $ 81,758

e) 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 June 30, 2020 and December 31, 2019 :

June 30, 2020

December 31, 2019

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

September 30, 2020 December 31, 2019

Restricted cash – third party agreements $ 22,669 $ 21,447

4 unchanged sentences

2019 – $ 65,539 )

Restricted investments – in trust for related party agreements at fair value (amo rtized cost:

62,059 65,678

Restricted investments – in trust for related party agreements at fair value (amortized cost:

2020 – $ 972,375 ;

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

2019 – $ 1,366,873 )

997,935 1,382,994

Total restricted investments

1,059,994 1,448,672

Total restricted cash and investments

(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.

$ 1,158,168 $ 1,507,753

Fair Value of Financial Instruments

22 unchanged sentences

Accordingly, the degree of judgment exercised by management in determining fair value is greatest for instruments categorized in Level 3.

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)

We use prices and inputs that are current at the measurement date.

7 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

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

government and U.S.

25 unchanged sentences

As the significant inputs used to price corporate and municipal bonds are observable market inputs, the fair values 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.

Other investments — Includes unquoted investments comprised of investments in limited partnerships, hedge funds 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 and hedge funds 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.

5 unchanged sentences

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 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)

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

5 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.

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)

Significant Other Observable Inputs (Level 2)

Significant Unobservable Inputs (Level 3)

Fair Value Based on NAV Practical Expedient

Total Fair Value

At September 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:

September 30, 2020 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

Fixed maturities

5 unchanged sentences

Other investments

— — 2,800 39,226 42,026

$ 101,127 $ 1,186,840 $ 2,800 $ 39,226 $ 1,329,993

As a percentage of total assets

December 31, 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

3.3 % 38.8 % 0.1 % 1.3 % 43.5 %

December 31, 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

Fixed maturities

6 unchanged sentences

Other investments

— — 1,800 3,077 4,877

$ 95,625 $ 1,739,893 $ 1,800 $ 3,077 $ 1,840,395

As a percentage of total assets

2.7 % 48.8 % 0.1 % 0.1 % 51.7 %

The Company utilizes the Pricing Service to assist in determining the fair value of its investments;

2 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 June 30, 2020 and December 31, 2019 , respectively.

The Pricing Service was utilized to estimate fair value measurements for 99.5 % and 99.7 % of our fixed maturities at September 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 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.

3 unchanged sentences

Fair Value of Financial Instruments (continued)

At September 30, 2020 and December 31, 2019, 0.5 % and 0.3 %, respectively, of the Level 2 fixed maturities are valued using the market approach.

At September 30, 2020 and December 31, 2019, one security or $ 6,172 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 September 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.

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.

At September 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 June 30, 2020 and December 31, 2019 , respectively:

June 30, 2020

December 31, 2019

Carrying 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 September 30, 2020 and December 31, 2019, respectively:

September 30, 2020 December 31, 2019

Carrying Value Fair Value Carrying Value Fair Value

Financial Assets

2 unchanged sentences

Senior Notes - MHLA – 6.625 %

$ 110,000 $ 87,340 $ 110,000 $ 86,460

Senior Notes - MHNC – 7.75 %

152,500 134,444 152,500 137,067

Total financial liabilities

$ 262,500 $ 221,784 $ 262,500 $ 223,527

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.

14 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 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,

therefore, there are no remaining assets and liabilities classified as held for sale as at September 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 nine months ended September 30, 2019 presented in the unaudited Condensed Consolidated Statements of Income:

For the Three Months Ended September 30, For the Nine Months Ended September 30,

Net loss and loss adjustment expenses $ — $ 6,363

2 unchanged sentences

Loss on disposal of discontinued operations — ( 25,474 )

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 .

Income tax benefit (expense) 74 ( 1,095 )

Income (loss) from discontinued operations, net of income tax $ 75 $ ( 22,048 )

MAIDEN HOLDINGS, LTD.

3 unchanged sentences

Long-Term Debt

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").

At September 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 June 30, 2020 and December 31, 2019 :

June 30, 2020

2016 Senior Notes

2013 Senior Notes

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

September 30, 2020 2016 Senior Notes 2013 Senior Notes Total

Principal amount

$ 110,000 $ 152,500 $ 262,500

unamortized issuance costs 3,528 3,901 7,429

Carrying value $ 106,472 $ 148,599 $ 255,071

December 31, 2019

2016 Senior Notes

2013 Senior Notes

December 31, 2019 2016 Senior Notes 2013 Senior Notes Total

Principal amount

$ 110,000 $ 152,500 $ 262,500

unamortized issuance costs 3,565 4,027 7,592

2 unchanged sentences

Original debt issuance costs $ 3,715 $ 5,054

Maturity date

June 14, 2046

December 1, 2043

Earliest redeemable date (for cash)

June 14, 2021

December 1, 2018

Maturity date June 14, 2046 December 1, 2043

Earliest redeemable date (for cash) June 14, 2021 December 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 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 interest expense incurred on the Senior Notes for the three and nine months ended September 30, 2020 was $ 4,777 and $ 14,330 , respectively (2019 - $ 4,777 and $ 14,330 , respectively), of which $ 1,342 was accrued at both September 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 and six months ended June 30, 2020 was $ 54 and $ 108 , respectively ( 2019 - $ 53 and $ 106 , respectively).

The amortization expense for the three and nine months ended September 30, 2020 was $ 55 and $ 163 , respectively (2019 - $ 54 and $ 160 , 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.

9 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 six months ended June 30, 2020 and 2019 was as follows:

For the Six Months Ended June 30,

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

For the Nine Months Ended September 30, 2020 2019

Premiums written

$ 14,718 $ 12,819

5,515 ( 535,997 )

( 2,740 ) ( 2,817 )

$ 17,493 $ ( 525,995 )

Premiums earned

$ 14,630 $ 11,903

64,853 402,197

( 2,655 ) ( 2,114 )

$ 76,828 $ 411,986

Gross loss and LAE

$ 54,845 $ 415,429

Loss and LAE ceded

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.

( 13,686 ) ( 319 )

$ 41,159 $ 415,110

The Company's reinsurance recoverable on unpaid losses balance as at September 30, 2020 was $ 597,677 (December 31, 2019 - $ 623,422 ) presented in the Condensed Consolidated Balance Sheets.

At September 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 $ 58,182 at June 30, 2020 ( December 31, 2019 - $ 62,699 ).

The balance of reinsurance recoverable on unpaid losses due from Cavello under this retrocession agreement was $ 69,454 at September 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 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).

As of September 30, 2020, the reinsurance recoverable on unpaid losses under the retroactive reinsurance agreement were $ 524,995 while the deferred gain liability was $ 79,995 (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 June 30, 2020 .

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

MAIDEN HOLDINGS, LTD.

16 unchanged sentences

The reserve for loss and LAE consists of:

June 30, 2020

December 31, 2019

September 30, 2020 December 31, 2019

Reserve for reported loss and LAE

$ 1,039,079 $ 1,271,358

Reserve for losses incurred but not reported ("IBNR")

935,994 1,168,549

Reserve for loss and LAE

$ 1,975,073 $ 2,439,907

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

For the Six Months Ended June 30,

For the Nine Months Ended September 30, 2020 2019

Gross loss and LAE reserves, January 1

$ 2,439,907 $ 3,126,134

reinsurance recoverable on unpaid losses, January 1

623,422 71,901

Net loss and LAE reserves, January 1

1,816,485 3,054,233

Net incurred losses related to:

48,988 318,654

( 7,829 ) 96,456

41,159 415,110

Net paid losses related to:

( 5,253 ) ( 8,969 )

( 519,864 ) ( 872,125 )

( 525,117 ) ( 881,094 )

Retroactive reinsurance adjustment

32,955 ( 549,542 )

Effect of foreign exchange rate movements

Net loss and LAE reserves, June 30

Reinsurance recoverable on unpaid losses, June 30

Gross loss and LAE reserves, June 30

11,914 ( 28,330 )

Net loss and LAE reserves, September 30 1,377,396 2,010,377

Reinsurance recoverable on unpaid losses, September 30 597,677 615,481

Gross loss and LAE reserves, September 30 $ 1,975,073 $ 2,625,858

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 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.

During the three and nine months ended September 30, 2020, the Company recognized net favorable prior year loss development of $ 7,236 and $ 7,829 , respectively (2019 - adverse $ 63,184 and $ 96,456 , respectively).

In the Diversified Reinsurance segment, net adverse prior year loss development was $ 483 and $ 312 for the three and nine months ended September 30, 2020, respectively (2019 - adverse $ 692 and favorable $ 1,456 , respectively).

Prior year loss development for the three and nine months ended September 30, 2020 was primarily due to adverse reserve development in European Capital Solutions.

The favorable loss development for the nine months ended September 30, 2019 was largely due to favorable development in German Auto Programs as well as facultative reinsurance run-off lines.

MAIDEN HOLDINGS, LTD.

3 unchanged sentences

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.

The adverse development for the three months ended September 30, 2019 was due to facultative reinsurance run-off partially offset by favorable development in International Auto.

In the AmTrust Reinsurance segment, the net favorable prior year loss development was $ 7,719 and $ 8,141 for the three and nine months ended September 30, 2020, respectively (2019 - adverse $ 62,384 and $ 97,600 , respectively).

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

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).

Retroactive reinsurance adjustment of $ 32,955 represents the decrease in reinsurance recoverable on unpaid losses under the LPT/ADC Agreement with Cavello that was recognized in the nine months ended September 30, 2020 (2019 - $ 549,542 increase) in the reconciliation of our beginning and ending gross and net loss and LAE reserves presented above.

This includes the corresponding decrease in the deferred gain on retroactive reinsurance for favorable development both on reserves covered under the LPT/ADC Agreement of $ 9,250 and Workers Compensation commuted losses of $ 23,705 during the nine months ended September 30, 2020 (2019 - $ 104,542 increase in deferred gain).

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, 2020 and September 30, 2019.

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.

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 due to increased reserves in the run-off of the NGHC Quota Share which was commuted in November 2019.

Related Party Transactions

14 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 June 30, 2019 .

Any development above this maximum amount will be subject to the coverage of the LPT/ADC Agreement.

1 unchanged sentence

"Basis of Presentation" for additional information .

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 January 1, 2019, Maiden Reinsurance and AII entered into the Partial Termination Amendment which amended the AmTrust Quota Share.

8 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

5 unchanged sentences

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 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,

Thereafter, 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 Condensed Consolidated Income Statements for the three and nine months ended September 30, 2020 and 2019, respectively:

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2020 2019 2020 2019

Gross and net premiums written $ ( 5,635 ) $ 21,405 $ ( 10,340 ) $ ( 564,199 )

1 unchanged sentence

Net loss and LAE ( 2,441 ) ( 126,945 ) ( 21,456 ) ( 373,980 )

Commission expenses

Commission and other acquisition expenses ( 5,447 ) ( 25,758 ) ( 16,221 ) ( 127,623 )

Collateral provided to AmTrust

6 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 June 30, 2020 and December 31, 2019 pursuant to a loan agreement entered into between those parties.

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)

• by lending funds in the amount of $ 167,975 at September 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 $ 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 % ).

The interest income on the loan was $ 886 and $ 3,111 for the three and nine months ended September 30, 2020, respectively (2019 - $ 1,777 and $ 5,441 , respectively) and the effective yield was 2.1 % and 2.5 % for the same respective periods (2019 - 4.2 % and 4.3 %, 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 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 June 30, 2020 was $ 861,978 (December 31, 2019 - $ 1,155,955 ) and the accrued interest was $ 3,273 (December 31, 2019 - $ 7,366 ).

The amount of the collateral at September 30, 2020 was $ 759,348 (December 31, 2019 - $ 1,155,955 ) and the accrued interest was $ 3,184 (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 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)

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

At September 30, 2020, the balance of funds withheld was $ 575,000 (December 31, 2019 - $ 575,000 ) and the accrued interest was $ 3,845 (December 31, 2019 - $ 5,073 ).

The interest income on the funds withheld receivable was $ 3,845 and $ 11,451 for the three and nine months ended September 30, 2020, respectively (2019 - $ 5,073 and $ 14,500 , respectively).

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.

20 unchanged sentences

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.

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)

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 June 30, 2020 was $ 219,170 (December 31, 2019 - $ 253,631 ) and the accrued interest was $ 1,764 (December 31, 2019 - $ 1,821 ).

For AEL, the amount of the collateral held in reinsurance trust accounts at September 30, 2020 was $ 302,733 (December 31, 2019 - $ 253,631 ) and the accrued interest was $ 1,883 (December 31, 2019 - $ 1,821 ).

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

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).

At September 30, 2020, the amount of funds withheld was $ 26,902 (December 31, 2019 - $ 57,305 ) and the accrued interest was $ 271 (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 $ 64 and $ 262 for the three and nine months ended September 30, 2020, respectively (2019 - $ 71 and $ 196 , respectively).

Brokerage Agreement

4 unchanged sentences

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

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.

Maiden Reinsurance recorded $ 162 and $ 515 of reinsurance brokerage expense for the three and nine months ended September 30, 2020, respectively (2019 - $ 930 and $ 4,305 , respectively) and deferred reinsurance brokerage of $ 1,728 at September 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 $ 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)

The Company recorded $ 321 and $ 1,071 of investment management fees for the three and nine months ended September 30, 2020, respectively (2019 - $ 618 and $ 2,071 , respectively) under this agreement.

On September 9, 2020, Maiden Reinsurance, AmTrust and AIIM entered into a novation agreement, effective July 1, 2020, which provided for the novation of the asset management agreement, dated January 1, 2018 between Maiden Reinsurance and AIIM, and the release by Maiden Reinsurance of AIIM's obligations under the asset management agreement.

The novation mandates that AmTrust is to be bound by the terms of the asset management agreement in place of AIIM and AmTrust agrees to perform any and all past, present and future obligations of AIIM under the asset management agreement.

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

The Company recorded $ 25 and $ 75 of annual fees for the three and nine months ended September 30, 2020, respectively.

The initial retainer of $ 100 was incurred during the three and nine months ended September 30, 2019.

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 currently own or control approximately 9.1 % of the outstanding common shares of the Company and is thus deemed a related party at September 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.

3 unchanged sentences

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.

Hedge fund investments of $ 25,376 were managed by 683 Capital under this agreement at September 30, 2020.

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

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, 2019.

Concentrations of Credit Risk

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.

a) Concentrations of Credit Risk

At September 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.

7 unchanged sentences

The Company also monitors the credit risk related to the loan to related party and funds withheld receivable, within which the largest balance is due from AmTrust.

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

Best at June 30, 2020 .

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

Best at September 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 June 30, 2020 will be fully collectible.

Operating Lease Commitments

The Company believes these balances as at September 30, 2020 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 2024.

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

The Company did not enter into any new lease arrangements during the three and nine months ended September 30, 2020 however one of its existing leases was recently renewed through 2024.

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.

For operating leases that have a lease term of more than twelve months, and whose lease payments are above a certain threshold, 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 2.3 years.

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.

The Company's weighted-average remaining lease term is approximately 2.5 years at September 30, 2020.

At September 30, 2020, the Company's future lease obligations of $ 1,790 (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 $ 1,790 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 Condensed Consolidated Statements of Income.

The Company's total lease expense for the three and nine months ended September 30, 2020 was $ 444 and $ 1,303 , respectively (2019 - $ 486 and $ 1,296 , 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, 2020 was $ 341 and $ 1,021 , respectively (2019 - $ 340 and $ 1,021 , respectively).

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

September 30, 2020

Discount for present value ( 235 )

Total discounted operating lease liabilities $ 1,790

MAIDEN HOLDINGS, LTD.

3 unchanged sentences

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:

June 30, 2020

Discount for present value

Total discounted operating lease liabilities

Legal Proceedings

c) Legal Proceedings

Except as noted below, the Company is not a party to any material legal proceedings.

37 unchanged sentences

The following is a summary of the elements used in calculating basic and diluted earnings per common share:

For the Three Months Ended June 30,

For the Six Months Ended June 30,

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2020 2019 2020 2019

Net income (loss) from continuing operations $ 2,162 $ ( 58,402 ) $ 32,235 $ ( 88,328 )

Amount allocated to participating common shareholders (1)

( 24 ) — ( 559 ) —

Income (loss) attributable to common shareholders, before discontinued operations 2,138 ( 58,402 ) 31,676 ( 88,328 )

Loss from discontinued operations, net of income tax

Income (loss) from discontinued operations, net of income tax — 75 — ( 22,048 )

Net income (loss) allocated to common shareholders $ 2,138 $ ( 58,327 ) $ 31,676 $ ( 110,376 )

Weighted average number of common shares – basic (2)

Share options and restricted share units

Adjusted weighted average number of common shares – diluted

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

84,744,787 83,092,085 84,181,528 83,036,925

Basic and diluted earnings (loss) from continuing operations per share attributable to common shareholders $ 0.03 $ ( 0.70 ) $ 0.38 $ ( 1.06 )

1 unchanged sentence

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

$ 0.03 $ ( 0.70 ) $ 0.38 $ ( 1.33 )

(1) 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 and six months ended June 30, 2020 , there were no potentially dilutive securities.

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

Shareholders' Equity

Common Shares

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 .

a) Common Shares

At September 30, 2020, the aggregate authorized share capital of the Company is 150,000,000 shares from which the Company has issued 89,777,896 common shares, of which 84,763,882 common shares are outstanding, and 18,600,000 preference shares, all of which are outstanding.

The remaining 41,622,104 shares are undesignated at September 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 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.

b) Treasury Shares

During the nine months ended September 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 September 30, 2020 (December 31, 2019 - $ 74,245 ).

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

MAIDEN HOLDINGS, LTD.

3 unchanged sentences

Shareholders' Equity (continued)

Accumulated Other Comprehensive Income (Loss)

c) Accumulated Other Comprehensive Income

The following tables set forth financial information regarding the changes in the balances of each component of AOCI:

For the Three Months Ended June 30, 2020

Change in net unrealized gains on investment

Foreign currency translation

For the Three Months Ended September 30, 2020 Change in net unrealized gains on investment Foreign currency translation Total

Beginning balance $ 17,184 $ ( 7,983 ) $ 9,201

3 unchanged sentences

Ending balance, Maiden shareholders $ 28,938 $ ( 14,981 ) $ 13,957

For the Three Months Ended June 30, 2019

Change in net unrealized gains on investment

Foreign currency translation

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 income (loss) before reclassifications

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 income (loss)

Net current period other comprehensive (loss) income ( 10,696 ) 11,480 784

Ending balance, Maiden shareholders $ 18,582 $ 3,354 $ 21,936

For the Six Months Ended June 30, 2020

Change in net unrealized gains on investment

Foreign currency translation

For the Nine Months Ended September 30, 2020 Change in net unrealized gains on investment Foreign currency translation Total

Beginning balance

$ 21,996 $ ( 4,160 ) $ 17,836

Other comprehensive income (loss) before reclassifications

16,585 ( 10,821 ) 5,764

Amounts reclassified from AOCI to net income, net of tax

Net current period other comprehensive loss

( 9,643 ) — ( 9,643 )

Net current period other comprehensive income (loss) 6,942 ( 10,821 ) ( 3,879 )

Ending balance, Maiden shareholders

For the Six Months Ended June 30, 2019

Change in net unrealized gains on investment

Foreign currency translation

$ 28,938 $ ( 14,981 ) $ 13,957

For the Nine Months Ended September 30, 2019 Change in net unrealized gains on investment Foreign currency translation Total

Beginning balance

Other comprehensive income (loss) before reclassifications

$ ( 59,762 ) $ ( 5,932 ) $ ( 65,694 )

Other comprehensive income before reclassifications

89,826 9,286 99,112

Amounts reclassified from AOCI to net loss, net of tax

Net current period other comprehensive income (loss)

( 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

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S.

dollars, except share and per share data)

The Company uses the estimated annual effective tax rate method.

Certain items, including those deemed to be unusual, infrequent or that cannot be reliably estimated, are excluded from the estimated annual effective tax rate.

In these cases, the actual tax expense or benefit is reported in the same period as the related item.

Certain tax effects are also not reflected in the estimated annual effective tax rate, primarily certain changes in the realizability of deferred tax assets and uncertain tax positions.

Maiden NA files a consolidated federal income tax return for the Company’s U.S.

based subsidiaries, including Maiden Reinsurance, which re-domesticated to Vermont on March 16, 2020 and, as a result, became subject to U.S.

Maiden NA has Net Operating Loss carry-forwards ("NOLs") and other Deferred Tax Assets (“DTAs”) and Deferred Tax Liabilities (“DTLs”) that are not presently recognized as a net DTA because a full valuation allowance is currently carried against them.

On March 27, 2020, the U.S.

enacted the Coronavirus Aid, Relief and Economic Security Act (the “CARES” Act) to mitigate the economic impacts of COVID-19.

The Company believes that the provisions of the CARES Act will not have a material impact on its U.S.

federal tax liabilities.

Subsequent Events

Preference Shares

On November 13, 2020, the Company announced that commencing November 16, 2020, Maiden Reinsurance was offering to purchase for cash, upon the terms and subject to the conditions set forth in its Offer to Purchase ("Purchase Offer") and accompanying Letter of Transmittal, up to $ 100.0 million of its 8.25% Non-Cumulative Preference Shares Series A, 7.125% Non-Cumulative Preference Shares Series C and 6.7% Non-Cumulative Preference Shares Series D ("Preference Securities").

The acquisition by Maiden Reinsurance of the Preference Securities pursuant to the Purchase Offer is being made in compliance with Maiden Reinsurance's investment policy previously approved b y the Vermont DFR.

The principal purpose of the Purchase Offer is to adjust the Company's and Maiden Reinsurance ’s capital structure to reflect its current operations and the amount of capital that is required to operate.

The Company's Board of Directors has not declared or paid a dividend on the Preference Securities since the fourth quarter of 2018 and there can be no assurance that it will declare and pay dividends on the Preference Securities in the future.

The Preference Securities are perpetual and there is no fixed date on which we are required to redeem or otherwise repurchase them.

Further, given the perpetual form of capital the Preference Securities represent, there can be no assurance that the Company or Maiden Reinsurance will make additional offers in the future to purchase the Preference Securities.

The Company expects to use cash on hand to pay the consideration payable by it pursuant to the Purchase Offer and the fees and expenses incurred by it in connection therewith.

The Purchase Offer is neither conditioned upon any minimum number of Securities being tendered, nor subject to any financing condition.

The Company or Maiden Reinsurance reserves the right, but is not obligated to, increase the Maximum Aggregate Purchase Amount in its sole and absolute discretion.

The Purchase Offer will expire on December 15, 2020 at 11:59 p.m., New York City time, unless the Company or Maiden Reinsurance extends it (such date and time, as the same may be extended, the "Expiration Date").

If the aggregate Offer Price of the Preference Securities that are validly tendered and not properly withdrawn at the Expiration Time (the "Total Consideration Amount") exceeds the Maximum Aggregate Purchase Amount, Maiden Reinsurance will accept for purchase that number of Securities that does not result in the Total Consideration Amount exceeding the Maximum Aggregate Purchase Amount.

In that event, the Securities will be subject to proration, as will be described in the Purchase Offer.

Novation of the Asset Management Agreement

On November 13, 2020, Maiden Life Försäkrings AB ("Maiden LF"), Maiden General Försäkrings AB ("Maiden GF"), AmTrust and AIIM entered into a novation agreement, effective July 1, 2020, which provided for the novation of the asset management agreement, dated January 1, 2018 between Maiden LF, Maiden GF and AIIM, and the release by Maiden LF and Maiden GF of AIIM's obligations under the asset management agreement.

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