Maiden Holdings, Ltd. 10-Q

Item 1. Financial Statements MAIDEN HOLDINGS, LTD. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands of U.S. dollars, except share and per share data) March 31, 2024 December 31, 2023 ASSETS (Unaudited) (Audited) Investments: Fixed maturities, available-for-sale, at fair value (Amortized cost: 2024 - $ 266,368 ; 2023 - $ 258,536 ) $ 259,451 $ 250,601 Equity securities, at fair value (Cost: 2024 - $ 43,439 ; 2023 - $ 43,439 ) 44,428 45,299 Equity method investments 82,159 80,929 Other investments (Allowance for expected credit losses: 2024 - $ 1,023 ; 2023 - $ 1,023 ) 200,388 182,811 Total investments 586,426 559,640 Cash and cash equivalents 20,721 35,412 Restricted cash and cash equivalents 9,449 7,266 Accrued investment income 3,927 4,532 Reinsurance balances receivable, net (includes $ 7,882 and $ 9,201 from related parties in 2024 and 2023, respectively. Allowance for expected credit losses: 2024 - $ 145 ; 2023 - $ 187 ) 11,552 12,450 Reinsurance recoverable on unpaid losses (Allowance for expected credit losses: 2024 - $ 2,438 ; 2023 - $ 3,240 ) 569,346 564,331 Loan to related party 167,975 167,975 Deferred commission and other acquisition expenses (includes $ 15,144 and $ 16,605 from related parties in 2024 and 2023, respectively) 15,990 17,566 Funds withheld receivable (includes $ 61,016 and $ 128,451 from related parties in 2024 and 2023, respectively. Allowance for expected credit losses: 2024 - $ 18 ; 2023 - $ 19 ) 77,089 143,985 Other assets 6,496 5,777 Total assets $ 1,468,971 $ 1,518,934 LIABILITIES Reserve for loss and loss adjustment expenses (includes $ 700,127 and $ 752,991 from related parties in 2024 and 2023, respectively) $ 813,879 $ 867,433 Unearned premiums (includes $ 40,655 and $ 44,577 from related parties in 2024 and 2023, respectively) 42,108 46,260 Deferred gain on retroactive reinsurance 78,222 73,240 Accrued expenses and other liabilities (includes $ 15,347 and $ 10,781 from related parties in 2024 and 2023, respectively) 30,766 28,244 Senior notes - principal amount 262,361 262,361 Less: unamortized debt issuance costs 7,725 7,764 Senior notes, net 254,636 254,597 Total liabilities 1,219,611 1,269,774 Commitments and Contingencies EQUITY Common shares ($ 0.01 par value; 2024: 150,134,586 and 2023: 149,732,355 shares issued; 2024: 100,393,538 and 2023: 100,472,120 shares outstanding) 1,501 1,497 Additional paid-in capital 886,432 886,072 Accumulated other comprehensive loss ( 32,191 ) ( 31,469 ) Accumulated deficit ( 485,486 ) ( 486,945 ) Treasury shares, at cost (2024: 49,741,048 shares and 2023: 49,260,235 shares) ( 120,896 ) ( 119,995 ) Total shareholders’ equity 249,360 249,160 Total liabilities and equity $ 1,468,971 $ 1,518,934 See accompanying notes to the unaudited Condensed Consolidated Financial Statements. 3 MAIDEN HOLDINGS, LTD. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (in thousands of U.S. dollars, except per share data) For the Three Months Ended March 31, 2024 2023 Revenues Gross premiums written $ 8,323 $ 836 Net premiums written $ 8,314 $ 760 Change in unearned premiums 4,094 8,242 Net premiums earned 12,408 9,002 Other insurance revenue (expense), net 46 ( 59 ) Net investment income 7,700 9,545 Net realized and unrealized investment gains 8,750 1,005 Total revenues 28,904 19,493 Expenses Net loss and loss adjustment expenses 11,625 9,815 Commission and other acquisition expenses 5,593 4,235 General and administrative expenses 8,060 10,108 Interest and amortization expenses 4,815 3,824 Foreign exchange and other (gains) losses ( 2,053 ) 2,816 Total expenses 28,040 30,798 Income (loss) before income taxes and interest in income (loss) of equity method investments 864 ( 11,305 ) Less: income tax expense (benefit) 11 ( 28 ) Interest in income (loss) of equity method investments 606 ( 51 ) Net income (loss) $ 1,459 $ ( 11,328 ) Basic and diluted earnings (loss) per share available (attributable) to common shareholders $ 0.01 $ ( 0.11 ) Weighted average number of common shares - basic and diluted 100,457,125 101,552,364 See accompanying notes to the unaudited Condensed Consolidated Financial Statements. 4 MAIDEN HOLDINGS, LTD. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (in thousands of U.S. dollars) For the Three Months Ended March 31, 2024 2023 Net income (loss) $ 1,459 $ ( 11,328 ) Other comprehensive (loss) income Net unrealized holdings gains on AFS securities arising during period 1,018 1,936 Foreign currency translation adjustment ( 1,736 ) 568 Other comprehensive (loss) income, before tax ( 718 ) 2,504 Income tax expense related to components of other comprehensive (loss) income ( 4 ) ( 30 ) Other comprehensive (loss) income, after tax ( 722 ) 2,474 Comprehensive income (loss) $ 737 $ ( 8,854 ) See accompanying notes to the unaudited Condensed Consolidated Financial Statements. 5 MAIDEN HOLDINGS, LTD. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) (in thousands of U.S. dollars) For the Three Months Ended March 31, 2024 2023 Common shares Beginning balance $ 1,497 $ 1,492 Issuance of common shares from vesting of stock based compensation 4 4 Ending balance 1,501 1,496 Additional paid-in capital Beginning balance 886,072 884,259 Issuance of common shares from vesting of stock based compensation ( 4 ) ( 4 ) Share-based compensation expense 364 777 Exchange of preference shares — 93 Ending balance 886,432 885,125 Accumulated other comprehensive loss Beginning balance ( 31,469 ) ( 41,234 ) Change in net unrealized investment gains 1,014 1,906 Foreign currency translation adjustment ( 1,736 ) 568 Ending balance ( 32,191 ) ( 38,760 ) Accumulated deficit Beginning balance ( 486,945 ) ( 442,863 ) Opening allowance for expected credit losses — ( 5,513 ) Net income (loss) 1,459 ( 11,328 ) Ending balance ( 485,486 ) ( 459,704 ) Treasury shares Beginning balance ( 119,995 ) ( 117,075 ) Shares repurchased ( 901 ) ( 288 ) Ending balance ( 120,896 ) ( 117,363 ) Total shareholders' equity $ 249,360 $ 270,794 See accompanying notes to the unaudited Condensed Consolidated Financial Statements. 6 MAIDEN HOLDINGS, LTD. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands of U.S. dollars) For the Three Months Ended March 31, 2024 2023 Cash flows from operating activities Net income (loss) $ 1,459 $ ( 11,328 ) Adjustments to reconcile net loss to net cash flows from operating activities: Depreciation, amortization and share-based compensation ( 479 ) ( 579 ) Interest in (income) loss of equity method investments ( 606 ) 51 Net realized and unrealized investment gains ( 8,750 ) ( 1,005 ) Change in allowance for expected credit losses ( 842 ) ( 32 ) Foreign exchange and other (gains) losses ( 2,053 ) 2,816 Changes in assets – (increase) decrease: Reinsurance balances receivable, net 673 269 Reinsurance recoverable on unpaid losses 692 906 Accrued investment income 573 ( 1,297 ) Deferred commission and other acquisition expenses 1,539 2,967 Funds withheld receivable 14,325 958 Other assets ( 707 ) ( 362 ) Changes in liabilities – increase (decrease): Reserve for loss and loss adjustment expenses 4,131 4,597 Unearned premiums ( 4,088 ) ( 8,242 ) Accrued expenses and other liabilities 2,182 ( 10,066 ) Net cash provided by (used in) operating activities 8,049 ( 20,347 ) Cash flows from investing activities: Purchases of fixed maturities ( 165,478 ) ( 2,709 ) Purchases of other investments ( 8,204 ) ( 8,552 ) Purchases of equity method investments ( 2,727 ) ( 2,329 ) Purchases of equity securities — ( 1,000 ) Proceeds from sales of fixed maturities 23,835 954 Proceeds from maturities, paydowns and calls of fixed maturities 130,876 8,014 Proceeds from sale and redemption of other investments 466 10,318 Proceeds from sale and redemption of equity method investments 1,618 10,579 Others, net ( 122 ) ( 8 ) Net cash (used in) provided by investing activities ( 19,736 ) 15,267 Cash flows from financing activities: Repurchase of common shares ( 673 ) ( 288 ) Net cash used in financing activities ( 673 ) ( 288 ) Effect of exchange rate changes on foreign currency cash, restricted cash and equivalents ( 148 ) 105 Net decrease in cash, restricted cash and cash equivalents ( 12,508 ) ( 5,263 ) Cash, restricted cash and cash equivalents, beginning of period 42,678 46,624 Cash, restricted cash and cash equivalents, end of period $ 30,170 $ 41,361 Reconciliation of cash and restricted cash reported within Condensed Consolidated Balance Sheets: Cash and cash equivalents, end of period $ 20,721 $ 24,194 Restricted cash and cash equivalents, end of period 9,449 17,167 Total cash, restricted cash and cash equivalents, end of period $ 30,170 $ 41,361 See accompanying notes to the unaudited Condensed Consolidated Financial Statements. 7 MAIDEN HOLDINGS, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (in thousands of U.S. dollars, except share and per share data) 1. Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of Maiden Holdings, Ltd. ("Parent Company" or "Maiden Holdings") and its subsidiaries (the "Company" or "Maiden"). They have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the U.S. Securities and Exchange Commission ("SEC"). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. All significant intercompany transactions and accounts have been eliminated. These interim unaudited Condensed Consolidated Financial Statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim period and all such adjustments are of a normal recurring nature. The results of operations for the interim period are not necessarily indicative, if annualized, of those to be expected for the full year. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. These unaudited Condensed Consolidated Financial Statements, including these notes, should be read in conjunction with the Company's audited Consolidated Financial Statements and related notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023. Certain prior year comparatives have been reclassified to conform to the current period presentation. The effect of these reclassifications had no impact on previously reported shareholders' equity or net income. Maiden creates shareholder value by actively managing and allocating our assets and capital, including through ownership and management of businesses and assets primarily in the insurance and related financial services industries where we can leverage our deep knowledge of those markets. In November 2020, the Company formed our indirect wholly owned subsidiary Genesis Legacy Solutions ("GLS") which specialized in providing a full range of legacy services to small insurance entities, particularly those in run-off or with blocks of reserves that are no longer core to those companies' operations, working with clients to develop and implement finality solutions including acquiring entire companies. The Company believed the formation of GLS was highly complementary to its overall longer-term strategy. However, a combination of factors, including market conditions in the sector GLS focuses on, resulted in an inability for GLS to gain sufficient scale to achieve its objectives or earn a profit, and GLS results did not reach the objectives the Company expected it to over time. Having completed the capital commitment made to GLS in 2020, the Company has determined to not commit any additional capital to new opportunities and to run-off the existing accounts underwritten by GLS. The Company does not presently underwrite prospective reinsurance risks. Short-term income protection business is written on a primary basis by our wholly owned subsidiaries Maiden Life Försäkrings AB ("Maiden LF") and Maiden General Försäkrings AB ("Maiden GF") in the Scandinavian and Northern European markets. Our wholly owned subsidiary, Maiden Global Holdings Ltd. (“Maiden Global”) is a licensed intermediary in the United Kingdom. Maiden Global had previously operated internationally by providing branded auto and credit life insurance products through insurer partners, particularly those in Europe and other global markets ("IIS business"). These products also produced reinsurance programs which were underwritten by our wholly owned subsidiary Maiden Reinsurance Ltd. (“Maiden Reinsurance”). Since 2023, the Company has been evaluating the strategic value of Maiden LF and Maiden GF in relation to their ongoing growth and profitability prospects, regulatory capital requirements and ability to create shareholder value in excess of our target return on capital levels. On May 3, 2024, Maiden LF and Maiden GF entered into a renewal rights transaction with AmTrust Nordic AB ("AmTrust Nordic"), a Swedish unit of AmTrust Financial Services, Inc. ("AmTrust") which is expected to cover the majority of Maiden LF and Maiden GF's primary business written in Sweden, Norway and other Nordic countries. The Company anticipates entering into additional renewal rights agreements with other AmTrust entities for certain business written by Maiden GF and Maiden LF in the United Kingdom and Ireland. Please see "Note 14. Subsequent Events" for further details on this transaction. The Company also has various historic reinsurance programs underwritten by Maiden Reinsurance which are in run-off, including the liabilities associated with AmTrust reinsurance agreements which were terminated in 2019 as discussed in "Note 10. Related Party Transactions" . In addition, the Company has a retroactive reinsurance agreement and a commutation agreement that further reduces its exposure and limits the potential volatility related to AmTrust liabilities, which are discussed in " Note 8. Reinsurance ". Please also see the Company's audited Consolidated Financial Statements, and related notes thereto, included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 for further details . 8 MAIDEN HOLDINGS, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (in thousands of U.S. dollars, except share and per share data) 2. Significant Accounting Policies There have been no material changes to the significant accounting policies as described in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, except for the following: Recently Adopted Accounting Standards Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions In June 2022, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2022-03 " Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions" an amendment of Fair Value Measurement (Topic 820). The amendments in this ASU require the Company to provide disclosures for equity securities subject to contractual sale restrictions under 820-10-50-6B including the fair value of equity securities subject to contractual sale restrictions reflected in the balance sheet; the nature and remaining duration of the restrictions; and any circumstances that could cause a lapse in the restrictions. The amendments in this Update are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The Company adopted this Update on January 1, 2024. Certain of the Company's equity securities are subject to restrictions on redemptions and sales that are determined by the governing documents, which could limit our ability to liquidate those investments. These restrictions may include lock-ups, redemption gates, restricted share classes, restrictions on the frequency of redemption and notice periods as described in " Note 4. (b) Investments". The Company has assessed the required disclosures for equity securities that may be subject to contractual sales restrictions. These amendments have expanded the disclosures made in "Note 4. Investments" however the adoption of this standard did not impact the Company’s consolidated balance sheets, results of operations or statement of cash flows. 9 MAIDEN HOLDINGS, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (in thousands of U.S. dollars, except share and per share data) 3. Segment Information The Company currently has two reportable segments: Diversified Reinsurance and AmTrust Reinsurance. Our Diversified Reinsurance segment consists of a portfolio of predominantly property and casualty reinsurance business focusing on regional and specialty property and casualty insurance companies located primarily in Europe. This segment also includes transactions entered into by GLS as described in " Note 1. Basis of Presentation. Our AmTrust Reinsurance segment includes all business ceded to Maiden Reinsurance by AmTrust, primarily the quota share reinsurance agreement (“AmTrust Quota Share”) between Maiden Reinsurance and AmTrust’s wholly owned subsidiary, AmTrust International Insurance, Ltd. (“AII”) and the European hospital liability quota share reinsurance contract ("European Hospital Liability Quota Share") with AmTrust’s wholly owned subsidiaries, AmTrust Europe Limited ("AEL") and AmTrust International Underwriters DAC ("AIU DAC"), which are both in run-off effective January 1, 2019. Please refer to "Note 10. Related Party Transactions" for additional information regarding the AmTrust Reinsurance segment. The Company evaluates segment performance based on segment profit separately from the results of our investment portfolio. General and administrative expenses are allocated to the segments on an actual basis except salaries and benefits where management’s judgment is applied; however, general corporate expenses are not allocated to the segments. In determining total assets by reportable segment, the Company identifies those assets that are attributable to a particular segment such as reinsurance balances receivable, reinsurance recoverable on unpaid losses, deferred commission and other acquisition expenses, funds withheld receivable, loan to related party and restricted cash and investments. All remaining assets are allocated to Corporate. The following tables summarize the underwriting results of our reportable segments and the reconciliation of our reportable segments' underwriting results to consolidated net income (loss) for the three months ended March 31, 2024 and 2023, respectively: For the Three Months Ended March 31, 2024 Diversified Reinsurance AmTrust Reinsurance Total Gross premiums written $ 8,828 $ ( 505 ) $ 8,323 Net premiums written $ 8,819 $ ( 505 ) $ 8,314 Net premiums earned $ 8,991 $ 3,417 $ 12,408 Other insurance revenue 46 — 46 Net loss and LAE ( 2,924 ) ( 8,701 ) ( 11,625 ) Commission and other acquisition expenses ( 4,295 ) ( 1,298 ) ( 5,593 ) General and administrative expenses ( 2,090 ) ( 670 ) ( 2,760 ) Underwriting loss $ ( 272 ) $ ( 7,252 ) ( 7,524 ) Reconciliation to net income Net investment income and net realized and unrealized investment gains 16,450 Interest and amortization expenses ( 4,815 ) Foreign exchange and other gains, net 2,053 Other general and administrative expenses ( 5,300 ) Income tax expense ( 11 ) Interest in income of equity method investments 606 Net income $ 1,459 10 MAIDEN HOLDINGS, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (in thousands of U.S. dollars, except share and per share data) 3. Segment Information (continued) For the Three Months Ended March 31, 2023 Diversified Reinsurance AmTrust Reinsurance Total Gross premiums written $ 6,849 $ ( 6,013 ) $ 836 Net premiums written $ 6,773 $ ( 6,013 ) $ 760 Net premiums earned $ 7,471 $ 1,531 $ 9,002 Other insurance expense ( 59 ) — ( 59 ) Net loss and LAE ( 3,156 ) ( 6,659 ) ( 9,815 ) Commission and other acquisition expenses ( 3,656 ) ( 579 ) ( 4,235 ) General and administrative expenses ( 2,589 ) ( 557 ) ( 3,146 ) Underwriting loss $ ( 1,989 ) $ ( 6,264 ) ( 8,253 ) Reconciliation to net loss Net investment income and net realized and unrealized investment gains 10,550 Interest and amortization expenses ( 3,824 ) Foreign exchange and other losses, net ( 2,816 ) Other general and administrative expenses ( 6,962 ) Income tax benefit 28 Interest in loss from equity method investments ( 51 ) Net loss $ ( 11,328 ) The following tables summarize the financial position of the Company's reportable segments including a reconciliation to the Company's consolidated total assets at March 31, 2024 and December 31, 2023: March 31, 2024 Diversified Reinsurance AmTrust Reinsurance Total Reinsurance balances receivable, net $ 3,530 $ 7,882 $ 11,412 Reinsurance recoverable on unpaid losses 5,472 520,780 526,252 Deferred commission and other acquisition expenses 846 15,144 15,990 Loan to related party — 167,975 167,975 Restricted cash and cash equivalents and investments 70,556 156,202 226,758 Funds withheld receivable 16,073 61,016 77,089 Other assets 582 — 582 Total assets - reportable segments 97,059 928,999 1,026,058 Corporate assets — — 442,913 Total Assets $ 97,059 $ 928,999 $ 1,468,971 December 31, 2023 Diversified Reinsurance AmTrust Reinsurance Total Reinsurance balances receivable, net $ 3,108 $ 9,201 $ 12,309 Reinsurance recoverable on unpaid losses 5,692 515,463 521,155 Deferred commission and other acquisition expenses 961 16,605 17,566 Loan to related party — 167,975 167,975 Restricted cash and cash equivalents and investments 67,211 152,663 219,874 Funds withheld receivable 15,534 128,451 143,985 Other assets 685 — 685 Total assets - reportable segments 93,191 990,358 1,083,549 Corporate assets — — 435,385 Total Assets $ 93,191 $ 990,358 $ 1,518,934 11 MAIDEN HOLDINGS, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (in thousands of U.S. dollars, except share and per share data) 3. Segment Information (continued) The following tables set forth financial information relating to net premiums written by major line of business and reportable segment for the three months ended March 31, 2024 and 2023: For the Three Months Ended March 31, 2024 2023 Net premiums written Total Total Diversified Reinsurance International $ 8,819 $ 6,773 Total Diversified Reinsurance 8,819 6,773 AmTrust Reinsurance Small Commercial Business ( 492 ) ( 83 ) Specialty Program ( 15 ) 156 Specialty Risk and Extended Warranty 2 ( 6,086 ) Total AmTrust Reinsurance ( 505 ) ( 6,013 ) Total Net Premiums Written $ 8,314 $ 760 The following tables set forth financial information for net premiums earned by major line of business and reportable segment for the three months ended March 31, 2024 and 2023: For the Three Months Ended March 31, 2024 2023 Net premiums earned Total Total Diversified Reinsurance International $ 8,991 $ 7,471 Total Diversified Reinsurance 8,991 7,471 AmTrust Reinsurance Small Commercial Business ( 492 ) ( 83 ) Specialty Program ( 15 ) 156 Specialty Risk and Extended Warranty 3,924 1,458 Total AmTrust Reinsurance 3,417 1,531 Total Net Premiums Earned $ 12,408 $ 9,002 12 MAIDEN HOLDINGS, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (in thousands of U.S. dollars, except share and per share data) 4. Investments The Company holds: (i) available-for-sale ("AFS") portfolios of fixed maturity and equity securities, carried at fair value; (ii) other investments, of which certain investments are carried at fair value and investments in direct lending entities are carried at cost less impairment; (iii) equity method investments; and (iv) funds held - directly managed. a) Fixed Maturities The amortized cost, gross unrealized gains and losses, and fair value of fixed maturities at March 31, 2024 and December 31, 2023 are as follows: March 31, 2024 Original or amortized cost Gross unrealized gains Gross unrealized losses Fair value U.S. treasury bonds $ 66,447 $ — $ ( 3 ) $ 66,444 U.S. agency bonds – mortgage-backed 29,221 — ( 3,603 ) 25,618 Non-U.S. government bonds 42,029 6 ( 462 ) 41,573 Collateralized loan obligations 63,960 — ( 765 ) 63,195 Corporate bonds 64,711 — ( 2,090 ) 62,621 Total fixed maturity investments $ 266,368 $ 6 $ ( 6,923 ) $ 259,451 December 31, 2023 Original or amortized cost Gross unrealized gains Gross unrealized losses Fair value U.S. treasury bonds $ 55,046 $ 8 $ ( 2 ) $ 55,052 U.S. agency bonds – mortgage-backed 29,918 — ( 3,267 ) 26,651 Non-U.S. government bonds 21,219 — ( 468 ) 20,751 Collateralized loan obligations 80,591 — ( 1,788 ) 78,803 Corporate bonds 71,762 — ( 2,418 ) 69,344 Total fixed maturity investments $ 258,536 $ 8 $ ( 7,943 ) $ 250,601 The Company separately presents the accrued interest receivable balance on its AFS fixed maturity investments on the Condensed Consolidated Balance Sheets under accrued investment income. The amount of accrued interest receivable on AFS securities was $ 1,370 at March 31, 2024 (December 31, 2023 - $ 1,418 ). The Company has elected the practical expedient to exclude accrued interest from both the fair value and the amortized cost basis of the AFS fixed maturity securities for the purposes of identifying and measuring any impairments under the allowance for expected credit losses standard adopted on January 1, 2023. Write-offs of accrued interest receivable balances are recognized in net investment gains and losses in the period in which they are deemed uncollectible. There was no write-off recognized on the accrued interest receivable during the three months ended March 31, 2024 and 2023. The contractual maturities of our fixed maturities are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. March 31, 2024 Amortized cost Fair value Due in one year or less $ 139,186 $ 138,553 Due after one year through five years 30,458 28,973 Due after five years through ten years 3,543 3,112 173,187 170,638 U.S. agency bonds – mortgage-backed 29,221 25,618 Collateralized loan obligations 63,960 63,195 Total fixed maturity investments $ 266,368 $ 259,451 13 MAIDEN HOLDINGS, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (in thousands of U.S. dollars, except share and per share data) 4. Investments (continued) The following tables summarize fixed maturities in an unrealized loss position and the aggregate fair value and gross unrealized loss by length of time the security has continuously been in an unrealized loss position: Less than 12 Months 12 Months or More Total March 31, 2024 Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses U.S. treasury bonds $ 46,011 $ ( 3 ) $ — $ — $ 46,011 $ ( 3 ) U.S. agency bonds – mortgage-backed — — 25,618 ( 3,603 ) 25,618 ( 3,603 ) Non-U.S. government bonds 10,700 ( 9 ) 10,109 ( 453 ) 20,809 ( 462 ) Collateralized loan obligations — — 63,195 ( 765 ) 63,195 ( 765 ) Corporate bonds — — 62,621 ( 2,090 ) 62,621 ( 2,090 ) Total temporarily impaired fixed maturities $ 56,711 $ ( 12 ) $ 161,543 $ ( 6,911 ) $ 218,254 $ ( 6,923 ) At March 31, 2024, there were 57 securities in an unrealized loss position with a fair value of $ 218,254 and unrealized losses of $ 6,923 . Of these securities in an unrealized loss position, there were 52 securities in our portfolio that have been in an unrealized loss position for twelve months or greater with a fair value of $ 161,543 and unrealized losses of $ 6,911 . Less than 12 Months 12 Months or More Total December 31, 2023 Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses U.S. treasury bonds $ 518 $ ( 2 ) $ — $ — $ 518 $ ( 2 ) U.S. agency bonds – mortgage-backed — — 26,651 ( 3,267 ) 26,651 ( 3,267 ) Non-U.S. government bonds 8,217 ( 1 ) 10,343 ( 467 ) 18,560 ( 468 ) Collateralized loan obligations — — 78,803 ( 1,788 ) 78,803 ( 1,788 ) Corporate bonds — — 69,344 ( 2,418 ) 69,344 ( 2,418 ) Total temporarily impaired fixed maturities $ 8,735 $ ( 3 ) $ 185,141 $ ( 7,940 ) $ 193,876 $ ( 7,943 ) At December 31, 2023, there were 59 securities in an unrealized loss position with a fair value of $ 193,876 and unrealized losses of $ 7,943 . Of these securities in an unrealized loss position, there were 56 securities in our portfolio that have been in an unrealized loss position for twelve months or greater with a fair value of $ 185,141 and unrealized losses of $ 7,940 . Allowance for Expected Credit Losses & Non-Credit Related Impairment Costs The Company evaluates AFS securities for impairment when fair value is below amortized cost on a quarterly basis. If the Company intends to sell or will be required to sell the security before its anticipated recovery, the full amount of the impairment loss is charged to net income (loss) and included in net investment gains (losses). If the Company does not intend to sell or will not be required to sell the security before its anticipated recovery, an allowance for expected credit losses is established and the portion of the loss relating to credit factors is recorded in net income (loss). The non-credit impairment amount of the loss (which could be related to interest rates and/or market conditions) is recognized in other comprehensive income. To estimate the allowance for expected credit losses for most of the AFS securities, the Company analyzes projected cash flows which are primarily driven by assumptions regarding loss severity, probability of default and projected recovery rates. The Company's determination of default and loss severity rates are based on credit rating, credit analysis and macroeconomic forecasts. Unrealized losses on securities issued or backed, either explicitly or implicitly by the U.S. government are not analyzed for credit losses. The Company has concluded that any possibility of a credit loss on these securities is highly unlikely due to the explicit U.S. government guarantee related to certain securities (e.g., Government National Mortgage Association issuances) and the implicit guarantee related to other securities that has been validated by past actions (e.g., U.S. government bailout of Federal National Mortgage Association and Federal Home Loan Mortgage Corporation during the 2008 credit crisis). Although these securities are not analyzed for credit losses, they are evaluated for impairment based on the Company's intention to sell and likely requirement to sell. Based on the Company's analysis at March 31, 2024 and 2023, respectively, the unrealized losses on the Company’s AFS fixed maturity securities were due to non-credit factors and were expected to be recovered as the related securities approach maturity. At March 31, 2024, the Company did not intend to sell the securities in an unrealized loss position and it is more likely than not that the Company will not be required to sell these securities before the anticipated recovery of their amortized costs. Therefore, there was no allowance recorded for expected credit losses on AFS securities for the three months ended March 31, 2024 and 2023. 14 MAIDEN HOLDINGS, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (in thousands of U.S. dollars, except share and per share data) 4. Investments (continued) The following tables summarize the credit ratings of our fixed maturities as at March 31, 2024 and December 31, 2023: March 31, 2024 Amortized cost Fair value % of Total fair value U.S. treasury bonds $ 66,447 $ 66,444 25.6 % U.S. agency bonds – mortgage-backed 29,221 25,618 9.9 % AAA 74,228 73,452 28.3 % AA+, AA, AA- 29,096 28,582 11.0 % A+, A, A- 33,836 32,588 12.6 % BBB+, BBB, BBB- 28,145 27,453 10.6 % BB+ or lower 5,395 5,314 2.0 % Total fixed maturities (1) $ 266,368 $ 259,451 100.0 % December 31, 2023 Amortized cost Fair value % of Total fair value U.S. treasury bonds $ 55,046 $ 55,052 22.0 % U.S. agency bonds – mortgage-backed 29,918 26,651 10.6 % AAA 84,455 82,703 33.0 % AA+, AA, AA- 18,952 18,372 7.3 % A+, A, A- 33,060 31,810 12.7 % BBB+, BBB, BBB- 31,585 30,631 12.2 % BB+ or lower 5,520 5,382 2.2 % Total fixed maturities (1) $ 258,536 $ 250,601 100.0 % (1) Ratings above are based on Standard & Poor’s ("S&P"), or equivalent, ratings . b) Other Investments, Equity Securities and Equity Method Investments Certain of the Company's other investments and equity method investments are subject to restrictions on redemptions and sales that are determined by the governing documents, which could limit our ability to liquidate those investments. These restrictions may include lock-ups, redemption gates, restricted share classes, restrictions on the frequency of redemption and notice periods. A gate is the ability to deny or delay a redemption request. Certain other investments and equity method investments may not have any restrictions governing their sale, but there is no active market and no guarantee that we will be able to execute a sale in a timely manner. In addition, even if certain other investments and equity method investments are not eligible for redemption or sales are restricted, the Company may still receive income distributions from those investments. Other investments The table shows the composition of the Company's other investments as of March 31, 2024 and December 31, 2023: March 31, 2024 December 31, 2023 Carrying value % of Total Carrying value % of Total Private equity funds $ 53,757 26.8 % $ 47,383 25.9 % Private credit investments 29,220 14.6 % 27,806 15.2 % Privately held equity investments 44,768 22.3 % 38,617 21.1 % Total other investments at fair value 127,745 63.7 % 113,806 62.2 % Investments in direct lending entities (at cost) 72,643 36.3 % 69,005 37.8 % Total other investments $ 200,388 100.0 % $ 182,811 100.0 % The Company's collateralized investments in direct lending entities of $ 72,643 at March 31, 2024 (December 31, 2023 - $ 69,005 ) are carried at cost less an allowance for expected credit losses, with any indication of credit loss recognized in net income when determined. An allowance for expected credit losses of $ 1,023 was reported on the investments in direct lending entities as at March 31, 2024 and December 31, 2023. Please see "Note 5(d). Fair Value Measurements" for additional information regarding this investment. 15 MAIDEN HOLDINGS, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (in thousands of U.S. dollars, except share and per share data) 4. Investments (continued) Equity Securities Equity securities include publicly traded equity investments in common stocks and privately held equity investments in common and preferred stocks. The Company's publicly traded equity investments in common stocks trade on major exchanges. The Company's privately held equity investments in common and preferred stocks are direct investments in companies that the Company believes offer attractive risk adjusted returns or offer other strategic advantages. Each investment may have its own unique terms and conditions and there may be restrictions on disposals. There is no active market for these investments. The following table provides the cost and fair values of the equity securities held at March 31, 2024 and December 31, 2023: March 31, 2024 December 31, 2023 Cost Fair Value Cost Fair Value Privately held common stocks $ 34,549 $ 34,400 $ 34,549 $ 35,272 Privately held preferred stocks 8,800 9,946 8,800 9,946 Publicly traded equity investments in common stocks 90 82 90 81 Total equity securities $ 43,439 $ 44,428 $ 43,439 $ 45,299 With the exception of the publicly traded equity investments in common stocks presented in the table above, all of the privately held securities held at March 31, 2024 are subject to contractual sale restrictions. Each of these investments are subject to agreements that restrict the transfer, sale, and indemnification of these privately held investments indefinitely. The Company must hold these shares indefinitely unless the investee's shares are registered with the SEC and qualified by state authorities, or until an exemption from such registration and qualification requirements may become available. Fair Value Remaining duration of restrictions Nature of contractual sale restrictions Circumstances that could cause a lapse in restrictions Privately held common stocks $ 34,400 Indefinite The Purchaser must hold the restricted shares indefinitely Registration of securities with the SEC or if exemption is available Privately held preferred stocks 9,946 Indefinite The Purchaser must hold the restricted shares indefinitely Registration of securities with the SEC or if exemption is available Total equity securities subject to contractual sale restrictions $ 44,346 Equity Method Investments The equity method investments currently include real estate investments and other investments. The table below shows the carrying value of the Company's equity method investments as of March 31, 2024 and December 31, 2023: March 31, 2024 December 31, 2023 Carrying Value % of Total Carrying Value % of Total Real estate investments $ 52,614 64.0 % $ 49,897 61.7 % Other investments 29,545 36.0 % 31,032 38.3 % Total equity method investments $ 82,159 100.0 % $ 80,929 100.0 % The equity method investments above include limited partnerships which are variable interests issued by variable interest entities ("VIEs"). The Company does not have the power to direct the activities that are most significant to the economic performance of these VIEs, therefore, the Company is not the primary beneficiary of these VIEs. T he Company is deemed to have limited influence over the operating and financial policies of the investee and accordingly, these investments are reported under the equity method of accounting. In applying the equity method of accounting, the investments are initially recorded at cost and are subsequently adjusted based on the Company’s proportionate share of the investee's net income or loss. Generally, the maximum exposure to loss on these interests is limited to the amount of commitment made by the Company as more fully described in "Note 11 - Commitments, Contingencies and Guarantees" in these condensed consolidated financial statements. 16 MAIDEN HOLDINGS, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (in thousands of U.S. dollars, except share and per share data) 4. Investments (continued) c) Net Investment Income Net investment income was derived from the following sources for the three months ended March 31, 2024 and 2023: For the Three Months Ended March 31, 2024 2023 Fixed maturities $ 2,440 $ 2,418 Income on funds withheld 901 3,335 Interest income from loan to related party 3,070 2,698 Cash and cash equivalents 1,381 1,193 7,792 9,644 Investment expenses ( 92 ) ( 99 ) Net investment income $ 7,700 $ 9,545 d) Net Realized and Unrealized Investment Gains (Losses) 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 and unrealized investment gains (losses) included in the Condensed Consolidated Statements of Income for the three months ended March 31, 2024 and 2023: For the Three Months Ended March 31, 2024 Gross gains Gross losses Net Fixed maturities $ — $ ( 218 ) $ ( 218 ) Equity securities 146 ( 1,017 ) ( 871 ) Other investments 11,324 ( 1,485 ) 9,839 Net realized and unrealized investment gains (losses) $ 11,470 $ ( 2,720 ) $ 8,750 For the Three Months Ended March 31, 2023 Gross gains Gross losses Net Equity securities $ 1,024 $ ( 378 ) $ 646 Other investments 1,641 ( 1,282 ) 359 Net realized and unrealized investment gains (losses) $ 2,665 $ ( 1,660 ) $ 1,005 Realized and unrealized gains and losses from equity securities detailed above include both sales and distributions of equity securities and unrealized gains and losses coming from fair value changes. Unrealized (losses) gains recognized for equity securities still held at reporting date for the three months ended March 31, 2024 and 2023, respectively, included: For the Three Months Ended March 31, 2024 2023 Net (losses) gains recognized for equity securities $ ( 871 ) $ 646 Net gains recognized for equity securities divested — ( 176 ) Unrealized (losses) gains recognized for equity securities still held at reporting date $ ( 871 ) $ 470 Proceeds from sales of fixed maturity investments were $ 23,835 for the three months ended March 31, 2024 (2023 - $ 954 ). Net unrealized losses included in accumulated other comprehensive income ("AOCI") were as follows at March 31, 2024 and December 31, 2023, respectively: March 31, 2024 December 31, 2023 Net unrealized losses on fixed maturity investments $ ( 6,917 ) $ ( 7,935 ) Deferred income tax 147 151 Net unrealized losses, net of deferred income tax $ ( 6,770 ) $ ( 7,784 ) Change, net of deferred income tax $ 1,014 $ 7,884 17 MAIDEN HOLDINGS, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (in thousands of U.S. dollars, except share and per share data) 4. Investments (continued) 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 restricted assets at March 31, 2024 and December 31, 2023 are: March 31, 2024 December 31, 2023 Restricted cash – third party agreements $ 5,643 $ 6,019 Restricted cash – related party agreements 3,806 1,247 Total restricted cash 9,449 7,266 Restricted investments – in trust for third party agreements at fair value (amortized cost: 2024 – $ 67,490 ; 2023 – $ 63,299 ) 64,913 61,192 Restricted investments – in trust for related party agreements at fair value (amortized cost: 2024 – $ 155,319 ; 2023 – $ 155,546 ) 152,396 151,416 Total restricted investments 217,309 212,608 Total restricted cash and investments $ 226,758 $ 219,874 18 MAIDEN HOLDINGS, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (in thousands of U.S. dollars, except share and per share data) 5. Fair Value of Financial Instruments (a) Fair Values of Financial Instruments Fair Value Measurements — Accounting Standards Codification Topic 820, "Fair Value Measurements and Disclosures" ("ASC 820") defines fair value as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between open market participants at the measurement date. Additionally, ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The hierarchy is broken down into three levels based on the reliability of inputs: • Level 1 — Valuations based on unadjusted quoted market prices for identical assets or liabilities that we have the ability to access. Because valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. Examples of assets and liabilities utilizing Level 1 inputs include: U.S. Treasury bonds; and publicly traded equity securities; • Level 2 — Valuations based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets or liabilities in inactive markets, or valuations based on models where the significant inputs are observable (e.g. interest rates, yield curves, prepayment speeds, default rates, loss severity, etc.) or can be corroborated by observable market data. Examples of assets and liabilities utilizing Level 2 inputs include: U.S. government-sponsored agency securities; non-U.S. government and supranational obligations; commercial mortgage-backed securities ("CMBS"); collateralized loan obligations ("CLO"); corporate and municipal bonds; and • Level 3 — Valuations based on models where significant inputs are not observable. The unobservable inputs reflect our own assumptions about assumptions that market participants would use developed on the basis of the best information available in the particular circumstances. Examples of assets and liabilities utilizing Level 3 inputs include: an investment in preference shares of a start-up insurance producer. The availability of observable inputs can vary and is affected by a wide variety of factors, including, for example, the type of financial instrument, whether the financial instrument is new and not yet established in the marketplace, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires significantly more judgment. Accordingly, the degree of judgment exercised by management in determining fair value is greatest for instruments categorized in the Level 3 hierarchy. The Company uses prices and inputs that are current as at the measurement date. In periods of market dislocation, the observability of prices and inputs may be reduced for many instruments. This condition could cause an instrument to be reclassified between hierarchy levels. For investments that have quoted market prices in active markets, the Company uses the quoted market prices as fair value and includes these in the Level 1 hierarchy. The Company receives the quoted market prices from a third party nationally recognized provider ("the Pricing Service"). When quoted market prices are unavailable, the Company utilizes the Pricing Service to determine an estimate of fair value. The fair value estimates are included in the Level 2 hierarchy. The Company will challenge any prices for its investments which are considered not to be representative of fair value. If quoted market prices and an estimate from the Pricing Service are unavailable, the Company produces an estimate of fair value based on dealer quotations for recent activity in positions with the same or similar characteristics to that being valued. The Company determines whether the fair value estimate is in the Level 2 or Level 3 hierarchy depending on the level of observable inputs available when estimating the fair value. 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 for 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 that are measured at fair value on a recurring basis held at March 31, 2024 and December 31, 2023. U.S. government and U.S. agency bonds — Bonds issued by the U.S. Treasury, the Federal Home Loan Bank, the Federal Home Loan Mortgage Corporation, Government National Mortgage Association, Federal National Mortgage Association and the Federal Farm Credit Banks Funding Corporation. The fair values of U.S. treasury bonds are based on quoted market prices in active markets, and are included in the Level 1 fair value hierarchy. We believe the market for U.S. treasury bonds is an actively traded market given the high level of daily trading volume. The fair values of U.S. agency bonds are determined using the spread above the risk-free yield curve. As the yields for the risk-free yield curve and the spreads for these securities are observable market inputs, the fair values of U.S. agency bonds are included in the Level 2 fair value hierarchy. Non-U.S. government bonds — These securities are generally priced by independent pricing services. The Pricing Service may use current market trades for securities with similar quality, maturity and coupon. If no such trades are available, the Pricing Service typically uses analytical models which may incorporate spreads, interest rate data and market/sector news. As the significant inputs used to price non-U.S. government bonds are observable market inputs, the fair values of non-U.S. government bonds are included in the Level 2 fair value hierarchy. 19 MAIDEN HOLDINGS, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (in thousands of U.S. dollars, except share and per share data) 5. Fair Value of Financial Instruments (continued) Collateralized loan obligations ("CLO") - These asset backed securities are originated by a variety of financial institutions that on acquisition are rated BBB-/Baa3 or higher. These securities are priced by independent pricing services and brokers. The pricing provider applies dealer quotes and other available trade information, prepayment speeds, yield curves and credit spreads to the valuation. As the significant inputs used to price the CLO are observable market inputs, the fair values are included in the Level 2 fair value hierarchy. Commercial mortgage-backed securities ("CMBS") - These asset backed securities are originated by a variety of financial institutions that on acquisition are rated BBB-/Baa3 or higher. These securities are priced by independent pricing services and brokers. The pricing provider applies dealer quotes and other available trade information, prepayment speeds, yield curves and credit spreads to the valuation. As the significant inputs used to price the CMBS are observable market inputs, the fair values are included in the Level 2 fair value hierarchy. Corporate and municipal bonds — Bonds issued by corporations, U.S. state and municipality entities or agencies that on acquisition are rated BBB-/Baa3 or higher. These securities are generally priced by independent pricing services. The credit spreads are sourced from broker/dealers, trade prices and new issue market. Where pricing is unavailable from pricing services, custodian pricing or non-binding quotes are obtained from broker-dealers to estimate fair values. As significant inputs used to price corporate and municipal bonds are observable market inputs, fair values are included in the Level 2 fair value hierarchy. Equity securities - Equity securities include publicly traded common and preferred stocks, and privately held common and preferred stocks. The fair value of publicly traded common and preferred stocks is primarily priced by pricing services, reflecting the closing price quoted for the final trading day of the period. These investments are carried at fair value using observable market pricing data and is included in the Level 1 fair value hierarchy. Any unrealized gains or losses on the investment is recorded in net income in the reporting period in which it occurs. The privately held common and preferred stocks are valued using significant inputs that are unobservable where there is little or no market activity. Unadjusted third party pricing sources or management's assumptions and internal valuation models may be used to determine the fair values, therefore, these investments are classified as Level 3 in the fair value hierarchy. Other investments — Includes unquoted investments comprised of the following types of investments: • Privately held investments: These are direct equity investments in common and preferred shares of privately held entities. The fair values are estimated using quarterly financial statements and/or recent private market transactions and thus are included under Level 3 of the fair value hierarchy due to unobservable market data used for valuation. • Private credit investments: These are privately held equity investments in common stock of entities that lend money valued using the most recently available or quarterly net asset value ("NAV") statements as provided by the external fund manager or third-party administrator and therefore measured using the NAV as a practical expedient. • Private equity funds: These are comprised of private equity funds, private equity co-investments with sponsoring entities and investments in real estate limited partnerships and joint ventures . The fair value is estimated based on the most recently available NAV as advised by the external fund manager or third-party administrator. The fair values are therefore measured using the NAV as a practical expedient. Derivative Instruments - The Company entered into a reinsurance contract that is accounted for as a derivative. This reinsurance contract provides indemnification to an insured or cedant as a result of a change in a variable as opposed to an identifiable insurable event. The Company considers this contract to be part of its underwriting operations. This derivative is initially valued at cost which approximates fair value. In subsequent measurement periods, the fair value of this derivative is determined using internally developed discounted cash flow models using appropriate discount rates. The selection of an appropriate discount rate is judgmental and is the most significant unobservable input used in the valuation of this derivative. T he fair value changes in underwriting-related derivative instruments is included within other insurance revenue (expense), net. The derivative liability on retroactive reinsurance is presented as part of accrued expenses and other liabilities. A significant increase (decrease) in this input in isolation may result in a significantly lower (higher) fair value measurement for the derivative contract. As the significant inputs used to price these derivatives are unobservable, the fair values of these contracts are classified as Level 3 in the fair value hierarchy. (b) Fair Value Hierarchy The Company’s estimates of fair value for financial assets and financial liabilities are based on the framework established in ASC 820. The framework is based on the inputs used in valuation and gives the highest priority to quoted prices in active markets and requires that observable inputs be used in the valuation methodology whenever available. In determining the level of the hierarchy in which the estimate is disclosed, the highest priority is given to unadjusted quoted prices in active trading markets and the lowest priority to unobservable inputs that reflect significant market assumptions. 20 MAIDEN HOLDINGS, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (in thousands of U.S. dollars, except share and per share data) 5. Fair Value of Financial Instruments (continued) At March 31, 2024 and December 31, 2023, the Company classified its financial instruments measured at fair value on a recurring basis in the following valuation hierarchy: March 31, 2024 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 U.S. treasury bonds $ 66,444 $ — $ — $ — $ 66,444 U.S. agency bonds – mortgage-backed — 25,618 — — 25,618 Non-U.S. government bonds — 41,573 — — 41,573 Collateralized loan obligations — 63,195 — — 63,195 Corporate bonds — 57,307 5,314 — 62,621 Equity securities 82 — 18,333 26,013 44,428 Other investments — — 34,347 93,398 127,745 Total investments $ 66,526 $ 187,693 $ 57,994 $ 119,411 $ 431,624 As a percentage of total assets 4.5 % 12.8 % 3.9 % 8.1 % 29.3 % Underwriting-related derivative liability $ — $ — $ 3,984 $ — $ 3,984 December 31, 2023 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 U.S. treasury bonds $ 55,052 $ — $ — $ — $ 55,052 U.S. agency bonds – mortgage-backed — 26,651 — — 26,651 Non-U.S. government bonds — 20,751 — — 20,751 Collateralized loan obligations — 78,803 — — 78,803 Corporate bonds — 63,962 5,382 — 69,344 Equity securities 81 — 19,351 25,867 45,299 Other investments — — 27,750 86,056 113,806 Total investments $ 55,133 $ 190,167 $ 52,483 $ 111,923 $ 409,706 As a percentage of total assets 3.6 % 12.5 % 3.5 % 7.4 % 27.0 % Underwriting-related derivative liability $ — $ — $ 3,984 $ — $ 3,984 The Company utilizes the Pricing Service to assist in determining the fair value of its investments; however, management is ultimately responsible for all fair values presented in the Company’s consolidated financial statements. This includes responsibility for monitoring the fair value process, ensuring objective and reliable valuation practices, and pricing of assets and liabilities and use of pricing sources. The Company analyzes and reviews the information and prices received from the Pricing Service to ensure that the prices provided represent a reasonable estimate of fair value. The Pricing Service was utilized to estimate fair value measurements for 98.0 % and 97.9 % of our fixed maturities at March 31, 2024 and December 31, 2023, respectively. The Pricing Service utilizes market quotations for fixed maturity securities that have quoted market prices in active markets. Since fixed maturities other than U.S. treasury bonds generally do not trade actively on a daily basis, the Pricing Service prepares estimates of fair value measurements using relevant market data, benchmark curves, sector groupings and matrix pricing and these have been classified as Level 2 within the fair value hierarchy. At March 31, 2024 and December 31, 2023, approximately 2.0 % and 2.1 %, respectively, of our fixed maturities were valued using the market approach. At March 31, 2024, one security or $ 5,314 (December 31, 2023 - one security or $ 5,382 ) of our fixed maturity investment portfolio classified as Level 3 in the FMV hierarchy table was priced using a quotation from a broker and/or custodian as opposed to the Pricing Service due to lack of information available. At March 31, 2024 and December 31, 2023, the Company has not adjusted any pricing provided to it based on the review performed by its investment managers. There were no transfers to or from Level 3 during the three months ended March 31, 2024 and 2023. 21 MAIDEN HOLDINGS, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (in thousands of U.S. dollars, except share and per share data) 5. Fair Value of Financial Instruments (continued) (c) Level 3 Financial Instruments At March 31, 2024, the Company holds Level 3 financial instruments which consist of corporate bonds, private credit funds and privately held investments of $ 57,994 (December 31, 2023 - $ 52,483 ) and an underwriting-related derivative liability of $ 3,984 (December 31, 2023 - $ 3,984 ) on a reinsurance contract written by GLS which is included in accrued expenses and other liabilities. The fair value of privately held equity securities are estimated using quarterly unaudited capital or financial statements provided by the investee or recent private market transactions, where applicable. Any changes to the financial information provided by the investee could result in a significantly higher or lower valuation at the reporting date. The fair value of underwriting-related derivative instruments is determined using a discounted cash flow model in which the Company examines current market conditions, historical results as well as contract specific information that may impact future cash flows in order to assess the reasonableness of inputs used in the valuation model . Due to significant unobservable inputs in these valuations, the Company classifies the fair values as Level 3 within the fair value hierarchy . The following table provides a summary of quantitative information regarding the significant unobservable inputs used in determining the fair value of other investments measured at fair value on a recurring basis under the Level 3 classification at March 31, 2024: Fair Value Valuation Technique Unobservable Inputs Range Privately held equity securities - common shares $ 39,749 Quarterly financial statements Price/book ratios of comparable public companies Privately held equity securities - preferred shares 11,331 Quarterly financial statements Privately calculated enterprise valuations Other investments - Private credit funds 1,600 Quarterly financial statements Price/book ratios of comparable public companies Corporate bonds 5,314 Non-binding broker dealer quotation Total Level 3 investments $ 57,994 Underwriting-related derivative liability $ 3,984 Discounted cash flows Duration matched discount rates 5.0 % to 6.0 % The following table shows the reconciliation of beginning and ending balances for investments measured at fair value on a recurring basis using Level 3 inputs for the three months ended March 31, 2024 and 2023. The Company includes any related interest and dividend income in net investment income and are excluded from the reconciliation in the table below: For the Three Months Ended March 31, 2024 2023 Balance - beginning of period $ 52,483 $ 18,806 Net realized and unrealized gains recognized in the statement of income 5,511 1,392 Purchases — 1,000 Total Level 3 investments - end of period $ 57,994 $ 21,198 (d) Financial Instruments Disclosed, But Not Carried, at Fair Value The fair value of financial instruments accounting guidance also applies to financial instruments disclosed, but not carried, at fair value, except for certain financial instruments related to insurance contracts . At March 31, 2024, the carrying values of cash equivalents (including restricted amounts), accrued investment income, reinsurance balances receivable, loan to related party, and certain other assets and liabilities approximate fair values due to their inherent short duration. As these financial instruments are not actively traded, the fair values of these financial instruments are classified as Level 2 in the fair value hierarchy. The investments made by direct lending entities are carried at cost less an allowance for expected credit losses, with any indication of credit loss recognized in net income when determined. The net carrying value of these investments approximates their fair value at the reporting date. The fair value estimates of these investments are not based on observable market data and therefore are classified as Level 3 in the fair value hierarchy. 22 MAIDEN HOLDINGS, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (in thousands of U.S. dollars, except share and per share data) 5. Fair Value of Financial Instruments (continued) The fair values of the Company's outstanding Senior Notes (as defined in "Note 7. Long-Term Debt" ) are based on indicative market pricing obtained from a third-party pricing service which uses observable market inputs, and therefore the fair values of these liabilities are classified as Level 2 in the fair value hierarchy. The following table presents the respective carrying value and fair value for the Senior Notes as at March 31, 2024 and December 31, 2023: March 31, 2024 December 31, 2023 Carrying Value Fair Value Carrying Value Fair Value Senior Notes - MHLA – 6.625 % $ 110,000 $ 73,392 $ 110,000 $ 73,744 Senior Notes - MHNC – 7.75 % 152,361 111,772 152,361 115,855 Total Senior Notes $ 262,361 $ 185,164 $ 262,361 $ 189,599 23 MAIDEN HOLDINGS, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (in thousands of U.S. dollars, except share and per share data) 6. Shareholders' Equity a) Common Shares On May 3, 2023 at its Annual General Meeting of Shareholders, the Company's common shareholders approved the increase in the authorized share capital of the Company from $ 1,500 divided into 150,000,000 shares of par value $ 0.01 each, to $ 2,000 divided into 200,000,000 shares of par value $ 0.01 each. At March 31, 2024, the aggregate authorized share capital of the Company is 200,000,000 shares from which 150,134,586 common shares were issued, of which 100,393,538 common shares are outstanding, and 49,741,048 shares are treasury shares (please see Note 6. (b) Treasury Shares below for additional information). The remaining 49,865,414 shares are undesignated at March 31, 2024. At March 31, 2024, 2,036,848 common shares will be issued and outstanding upon vesting of restricted shares, and 4,204,356 common shares remaining are reserved for issuance under the 2019 Omnibus Incentive Plan. b) Treasury Shares On February 21, 2017, the Company's Board of Directors approved the repurchase of up to $ 100,000 of the Company's common shares from time to time at market prices. During the three months ended March 31, 2024, Maiden Reinsurance repurchased 352,111 common shares at an average price per share of $ 1.91 under the Company's share repurchase plan (2023 - none ). The Company's remaining authorization is $ 70,942 for common share repurchases at March 31, 2024 (December 31, 2023 - $ 71,615 ). During the three months ended March 31, 2024, the Company also repurchased 128,702 common shares (2023 - 128,156 ) at an average price per share of $ 1.77 (2023 - $ 2.25 ) from employees, which represent tax withholding in respect of tax obligations on the vesting of both non-performance-based and discretionary performance-based restricted shares. Treasury shares include 43,231,034 common shares owned by Maiden Reinsurance consisting of 41,439,348 shares issued as part of the exchange for preference shares held ("Exchange") and 1,791,686 shares directly purchased on the open market by Maiden Reinsurance which are not treated as outstanding common shares on the Condensed Consolidated Balance Sheet at March 31, 2024. Please see further information on the Exchange and related preference share repurchases in the Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 12, 2024. T he table below includes the total number of treasury shares outstanding at March 31, 2024 and December 31, 2023, respectively: March 31, 2024 December 31, 2023 Number of shares held by Maiden Reinsurance treated as treasury shares 43,231,034 42,878,923 Number of treasury shares due to common share repurchases by Maiden Holdings 6,510,014 6,381,312 Total number of treasury shares at the end of the reporting period 49,741,048 49,260,235 c) AOCI The following tables set forth financial information regarding the changes in the balances of each component of AOCI: For the Three Months Ended March 31, 2024 Change in net unrealized gains on investment Foreign currency translation Total Beginning balance $ ( 7,784 ) $ ( 23,685 ) $ ( 31,469 ) Other comprehensive income (loss) before reclassifications 1,014 ( 1,736 ) ( 722 ) Ending balance, Maiden shareholders $ ( 6,770 ) $ ( 25,421 ) $ ( 32,191 ) For the Three Months Ended March 31, 2023 Change in net unrealized gains on investment Foreign currency translation Total Beginning balance $ ( 15,668 ) $ ( 25,566 ) $ ( 41,234 ) Other comprehensive income before reclassifications 1,906 568 2,474 Ending balance, Maiden shareholders $ ( 13,762 ) $ ( 24,998 ) $ ( 38,760 ) 24 MAIDEN HOLDINGS, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (in thousands of U.S. dollars, except share and per share data) 7. Long-Term Debt Senior Notes At March 31, 2024 and December 31, 2023, Maiden Holdings had outstanding publicly-traded senior notes which were issued in 2016 ("2016 Senior Notes") and its wholly owned subsidiary, Maiden Holdings North America, Ltd. ("Maiden NA") had outstanding publicly-traded senior notes which were issued in 2013 ("2013 Senior Notes") (collectively "Senior Notes"). The 2013 Senior Notes issued by Maiden NA are fully and unconditionally guaranteed by Maiden Holdings. The Senior Notes are unsecured and unsubordinated obligations of the Company. The following tables detail the issuances of Senior Notes outstanding at March 31, 2024 and December 31, 2023: March 31, 2024 2016 Senior Notes 2013 Senior Notes Total Principal amount $ 110,000 $ 152,361 $ 262,361 Less: unamortized issuance costs 3,329 4,396 7,725 Carrying value $ 106,671 $ 147,965 $ 254,636 December 31, 2023 2016 Senior Notes 2013 Senior Notes Total Principal amount $ 110,000 $ 152,361 $ 262,361 Less: unamortized issuance costs 3,345 4,419 7,764 Carrying value $ 106,655 $ 147,942 $ 254,597 Other details: Original debt issuance costs pertaining to remaining outstanding principal amount $ 3,715 $ 5,049 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 % Total interest and amortization expense incurred on the Senior Notes for the three months ended March 31, 2024 was $ 4,815 (2023 - $ 3,824 ), of which $ 1,342 was accrued as interest payable at both March 31, 2024 and December 31, 2023, respectively. The issuance costs related to the Senior Notes were capitalized and are amortized over the effective life of the Senior Notes using the effective interest method of amortization. Under the terms of the 2013 Senior Notes, the 2013 Senior Notes can be redeemed, in whole or in part, at Maiden NA's option at any time and from time to time, until maturity at a redemption price equal to 100 % of the principal amount of the notes to be redeemed plus accrued but unpaid interest on the principal amount being redeemed to, but not including, the redemption date. Maiden NA is required to give at least thirty days and not more than sixty days notice prior to the redemption date. Under the terms of the 2016 Senior Notes, the 2016 Senior Notes can be redeemed, in whole or in part, at Maiden Holdings' option at any time and from time to time, until maturity at a redemption price equal to 100 % of the principal amount of the notes to be redeemed plus accrued but unpaid interest on the principal amount being redeemed to, but not including, the redemption date. Maiden Holdings is required to give at least thirty days and not more than sixty days notice prior to the redemption date. On May 3, 2023, the Company's Board of Directors approved the repurchase, including the repurchase by Maiden Reinsurance in accordance with its investment guidelines, of up to $ 100,000 of the Company's Senior Notes from time to time at market prices in open market purchases or as may be privately negotiated. The Company has a remaining authorization of $ 99,905 for Senior Notes repurchases at March 31, 2024. 25 MAIDEN HOLDINGS, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (in thousands of U.S. dollars, except share and per share data) 8. Reinsurance The Company uses reinsurance and retrocessional agreements ("ceded reinsurance") to mitigate volatility, reduce its exposure to certain risks and provide capital support. Ceded reinsurance provides for the recovery of a portion of loss and LAE under certain circumstances without relieving the Company of its obligations to the policyholders. The Company remains liable to the extent that any of its reinsurers or retrocessionaires fails to meet their obligations. Loss and LAE incurred and premiums earned are reported after deduction for ceded reinsurance. In the event that one or more of our reinsurers or retrocessionaires are unable to meet their obligations under these agreements, the Company would not realize the full value of the reinsurance recoverable balances. The effect of ceded reinsurance on net premiums written and earned and on net loss and LAE for the three months ended March 31, 2024 and 2023 was as follows: For the Three Months Ended March 31, 2024 2023 Premiums written Direct $ 8,831 $ 6,859 Assumed ( 508 ) ( 6,022 ) Ceded ( 9 ) ( 77 ) Net $ 8,314 $ 760 Premiums earned Direct $ 8,546 $ 6,862 Assumed 3,865 2,217 Ceded ( 3 ) ( 77 ) Net $ 12,408 $ 9,002 Loss and LAE Gross loss and LAE $ 12,375 $ 9,796 Loss and LAE ceded ( 750 ) 19 Net $ 11,625 $ 9,815 The Company's reinsurance recoverable on unpaid losses balance as at March 31, 2024 was $ 569,346 (December 31, 2023 - $ 564,331 ) presented in the Condensed Consolidated Balance Sheets. As of March 31, 2024, the total allowance for expected credit losses on the Company's reinsurance recoverable balance was $ 2,438 . The following table provides a reconciliation of the beginning and ending balances of the allowance for expected credit losses on reinsurance recoverable for the three months ended March 31, 2024 and 2023: For the Three Months Ended March 31, 2024 2023 Allowance for expected credit losses on reinsurance recoverable, beginning of period $ 3,240 4,277 Decrease in allowance for expected credit losses on reinsurance recoverable where credit losses were previously recognized ( 802 ) ( 23 ) Allowance for expected credit losses on reinsurance recoverable, end of period $ 2,438 4,254 On December 27, 2018, Cavello Bay Reinsurance Limited ("Cavello") and Maiden Reinsurance entered into a retrocession agreement pursuant to which certain assets and liabilities associated with the U.S. treaty reinsurance business held by Maiden Reinsurance were 100.0 % retroceded to Cavello in exchange for a ceding commission. The reinsurance recoverable on unpaid losses due from Cavello under this retrocession agreement was $ 43,094 at March 31, 2024 (December 31, 2023 - $ 43,176 ). The recoverable due from Cavello is net of an allowance for expected credit losses of $ 2,284 as at March 31, 2024 (December 31, 2023 - $ 2,769 ). On July 31, 2019, Maiden Reinsurance and Cavello entered into a Loss Portfolio Transfer and Adverse Development Cover Agreement ("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 . The $ 2,178,535 retention is subject to adjustment for paid losses subsequent to December 31, 2018. The LPT/ADC Agreement provides Maiden Reinsurance with $ 155,000 in adverse development cover over its carried AmTrust Quota Share loss reserves at December 31, 2018. The LPT/ADC Agreement meets the criteria for risk transfer and is thus accounted for as retroactive reinsurance. Cumulative ceded losses exceeding $ 445,000 are recognized as a deferred gain liability and amortized into income over the settlement period of the ceded reserves in proportion to cumulative losses collected over the estimated ultimate reinsurance recoverable. The amount of the deferral is recalculated each period based on loss payments and updated estimates. 26 MAIDEN HOLDINGS, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (in thousands of U.S. dollars, except share and per share data) 8. Reinsurance (continued) Consequently, cumulative adverse development subsequent to December 31, 2018 may result in significant losses from operations until periods when the deferred gain is recognized as a benefit to earnings. As of March 31, 2024, the reinsurance recoverable on unpaid losses under the LPT/ADC Agreement was $ 520,780 while the deferred gain liability under the LPT/ADC Agreement was $ 75,916 (December 31, 2023 - $ 515,463 and $ 70,916 , respectively). The recoverable due under the LPT/ADC Agreement is net of an allowance for expected credit losses of $ 136 as at March 31, 2024 (December 31, 2023 - $ 453 ). 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 before the end of 2024. Cavello provided collateral in the form of a letter of credit in the amount of $ 445,000 to AmTrust under the LPT/ADC Agreement. Cavello is subject to additional collateral funding requirements as explained in "Note 10. Related Party Transactions". As of March 31, 2024, the amount of collateral required was $ 473,144 (December 31, 2023 - $ 490,070 ). Under the terms of the LPT/ADC Agreement, the covered losses associated with the Commutation and Release Agreement with AmTrust are eligible to be covered but recoverable only when such losses are paid or settled by AII or its affiliates, provided such losses and other related amounts shall not exceed $ 312,786 . Cavello's parent company, Enstar, has credit ratings of BBB+ from both Standard & Poor's and Fitch Ratings at March 31, 2024 . 27 MAIDEN HOLDINGS, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (in thousands of U.S. dollars, except share and per share data) 9. Reserve for Loss and Loss Adjustment Expenses The Company uses both historical experience and industry-wide loss development factors to provide a reasonable basis for estimating future losses. In the future, certain events may be beyond the control of management, such as changes in law, judicial interpretations of law, and rates of inflation, which may favorably or unfavorably impact the ultimate settlement of the Company’s loss and LAE reserves. The anticipated effect of inflation is implicitly considered when estimating liabilities for loss and LAE. While anticipated changes in claim costs due to inflation are considered in estimating the ultimate claim costs, changes in the average severity of claims are caused by a number of factors that vary with the individual type of policy written. Ultimate losses are projected based on historical trends adjusted for implemented changes in underwriting standards, claims handling, policy provisions, and general economic trends. Those anticipated trends are monitored based on actual development and are modified if necessary. The reserving process begins with the collection and analysis of paid losses and incurred claims data for each of the Company's contracts. While reserves are mostly reviewed on a contract by contract basis, paid loss and incurred claims data is also aggregated into reserving segments. The segmental data is disaggregated by reserving class and further disaggregated by either accident year (i.e. the year in which the loss event occurred) or by underwriting year (i.e. the year in which the contract generating the premium and losses incepted). In cases where the Company uses underwriting year information, reserves are subsequently allocated to the respective accident year. The reserve for loss and LAE consists of: March 31, 2024 December 31, 2023 Reserve for reported loss and LAE $ 487,112 $ 543,818 Reserve for losses incurred but not reported ("IBNR") 326,767 323,615 Reserve for loss and LAE $ 813,879 $ 867,433 The following table represents a reconciliation of our beginning and ending gross and net loss and LAE reserves: For the Three Months Ended March 31, 2024 2023 Gross loss and LAE reserves, January 1 $ 867,433 $ 1,131,408 Less: reinsurance recoverable on unpaid losses, January 1 564,331 556,116 Net loss and LAE reserves, January 1 303,102 575,292 Net incurred losses related to: Current year 5,062 6,159 Prior years 6,563 3,656 11,625 9,815 Net paid losses related to: Current year ( 125 ) ( 75 ) Prior years ( 59,590 ) ( 73,013 ) ( 59,715 ) ( 73,088 ) Change in deferred gain on retroactive reinsurance ( 4,982 ) ( 1,573 ) GLS run-off business acquired or assumed — 767 Opening allowance for expected credit loss on reinsurance recoverable on unpaid losses — 4,286 Effect of foreign exchange rate movements ( 5,497 ) 3,611 Net loss and LAE reserves, March 31 244,533 519,110 Reinsurance recoverable on unpaid losses, March 31 569,346 552,513 Gross loss and LAE reserves, March 31 $ 813,879 $ 1,071,623 Prior period development arises from changes to loss estimates recognized in the current year that relate to loss reserves established 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. The Company recognized net adverse prior year loss development of $ 6,563 for the three months ended March 31, 2024 (2023 - adverse $ 3,656 ). In the Diversified Reinsurance segment, there was favorable prior year loss development of $ 655 for the three months ended March 31, 2024 (2023 - adverse $ 757 ). Prior year loss development for the three months ended March 31, 2024 was driven by favorable development in GLS and other runoff business lines partly offset by adverse development in International business. Prior year adverse development for the three months ended March 31, 2023 was due to unfavorable reserve development in other runoff business and also included the recognition of expected credit losses on reinsurance recoverable on unpaid losses. 28 MAIDEN HOLDINGS, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (in thousands of U.S. dollars, except share and per share data) 9. Reserve for Loss and Loss Adjustment Expenses (continued) The table below shows prior year loss development for the AmTrust Reinsurance segment for the three months ended March 31, 2024 and 2023: For the Three Months Ended March 31, 2024 2023 Prior Year Loss Development adverse (favorable) ($ in thousands) AmTrust Quota Share $ 5,000 $ 3,448 AmTrust other runoff ( 317 ) ( 523 ) European Hospital Liability Quota Share 2,535 ( 26 ) Total AmTrust Reinsurance Prior Year Development $ 7,218 $ 2,899 In the AmTrust Reinsurance segment, net adverse prior year loss development was $ 7,218 during the three months ended March 31, 2024 (2023 - adverse $ 2,899 ) as detailed in the table above. Net adverse prior year loss development for the three months ended March 31, 2024 was primarily from the AmTrust Quota Share and European Hospital Liability. In the AmTrust Quota Share, U.S. Program business experienced additional adverse development from construction defect coverage for accident years 2015 to 2018 as new claims emergence was significantly greater than expected; this was partly offset by continued favorable development within Workers Compensation business for accident years 2014 to 2017. Net adverse loss development on European Hospital Liability Quota Share was primarily driven by emergence of loss data from adverse claim verdicts on older claims, resulting in strengthening of loss development tail on underwriting years 2011 to 2014. Net adverse prior year loss development for the three months ended March 31, 2023 was driven by unfavorable movements in General Liability, Auto Liability and Specialty Risk & Extended Warranty partly offset by continued favorable development in Workers Compensation. The increase in the deferred gain on retroactive reinsurance was $ 4,982 for the three months ended March 31, 2024 (2023 - $ 1,573 increase). This included an increase in the deferred gain liability and related reinsurance recoverable on unpaid losses under the LPT/ADC Agreement with Cavello of $ 5,000 for the three months ended March 31, 2024 (2023 - $ 1,573 increase) caused by adverse development on loss reserves covered under the LPT/ADC Agreement (2023 - adverse). The deferred gain on retroactive reinsurance under the LPT/ADC Agreement represents the cumulative adverse development for covered risks in the AmTrust Quota Share as of March 31, 2024 and December 31, 2023. Amortization of the deferred gain will not occur until paid losses have exceeded the minimum retention under the LPT/ADC Agreement, which is presently expected to be before the end of 2024. 29 MAIDEN HOLDINGS, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (in thousands of U.S. dollars, except share and per share data) 10. Related Party Transactions The Founding Shareholders of the Company were Michael Karfunkel, George Karfunkel and Barry Zyskind. Based on each individual's most recent public filing, Leah Karfunkel (wife of the late Michael Karfunkel), George Karfunkel and Barry Zyskind (the Company's non-executive chairman) each own or control less than 5.0 % of the Company's outstanding common shares. Leah Karfunkel and George Karfunkel are directors of AmTrust, and Barry Zyskind is the chief executive officer and chairman of AmTrust. Leah Karfunkel, George Karfunkel and Barry Zyskind own or control approximately 55.2 % of the ownership interests of Evergreen Parent, L.P., the ultimate parent of AmTrust. The following describes transactions that have transpired between the Company and AmTrust: AmTrust Quota Share Effective July 1, 2007, the Company and AmTrust entered into a master agreement, as amended ("Master Agreement"), by which they caused Maiden Reinsurance and AII to enter into the AmTrust Quota Share by which AII retroceded to Maiden Reinsurance an amount equal to 40 % of the premium written by subsidiaries of AmTrust, net of the cost of unaffiliated inuring reinsurance and 40 % of losses. The Master Agreement further provided that AII receive a ceding commission of 31 % of ceded written premiums. On June 11, 2008, Maiden Reinsurance and AII amended the AmTrust Quota Share to add Retail Commercial Package Business to the Covered Business (as defined in the AmTrust Quota Share). AII receives a ceding commission of 34.375 % on Retail Commercial Package Business. On July 1, 2016, the agreement was renewed through June 30, 2019. Effective July 1, 2018, the amount AEL ceded to Maiden Reinsurance was reduced to 20 %. Effective July 1, 2013, for the Specialty Program portion of Covered Business only, AII was responsible for ultimate net loss otherwise recoverable from Maiden Reinsurance to the extent that the loss ratio to Maiden Reinsurance, which shall be determined on an inception to date basis from July 1, 2007 through the date of calculation, is between 81.5 % and 95 % ("Loss Corridor"). Above and below the Loss Corridor, Maiden Reinsurance continued to reinsure losses at its proportional 40 % share of the AmTrust Quota Share. Effective July 31, 2019, the Loss Corridor was amended such that the maximum amount covered is $ 40,500 , the amount calculated by Maiden Reinsurance for the Loss Corridor coverage as of March 31, 2019. Any development above this maximum amount will be subject to the coverage of the LPT/ADC Agreement. Effective January 1, 2019, Maiden Reinsurance and AII entered into a partial termination amendment ("Partial Termination Amendment") which amended the AmTrust Quota Share. The Partial Termination Amendment provided for the cut-off of the ongoing and unearned premium of AmTrust’s Small Commercial Business and U.S. Specialty Risk and Extended Warranty ("Terminated Business") as of December 31, 2018. Under the Partial Termination Amendment, the ceding commission payable by Maiden Reinsurance for its remaining in-force business immediately prior to January 1, 2019 increased by five percentage points with respect to in-force remaining business (excluding Terminated Business) and related unearned premium as of January 1, 2019. Subsequently, on January 30, 2019, Maiden Reinsurance and AII agreed to terminate the remaining business subject to the AmTrust Quota Share on a run-off basis effective as of January 1, 2019. Effective July 31, 2019, Maiden Reinsurance and AII entered into a Commutation and Release Agreement which provided for AII to assume all reserves ceded by AII to Maiden Reinsurance with respect to its proportional 40 % share of the ultimate net loss under the AmTrust Quota Share related to the commuted business including: (a) all losses incurred in Accident Year 2017 and Accident Year 2018 under California workers' compensation policies and as defined in the AmTrust Quota Share ("Commuted California Business"); and (b) all losses incurred in Accident Year 2018 under New York workers' compensation policies ("Commuted New York Business"), and together with the Commuted California Business ("Commuted Business") in exchange for the release and full discharge of Maiden Reinsurance's obligations to AII with respect to the Commuted Business. The Commuted Business excludes any business classified by AII as Specialty Program or Specialty Risk business. AII and Maiden Reinsurance also agreed that as of July 31, 2019, the AmTrust Quota Share was deemed amended as applicable so that the Commuted Business is no longer included as part of Covered Business under the AmTrust Quota Share. 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. Please refer to " Note 10. Related Party Transactions" in the Annual Report on Form 10-K for the year ended December 31, 2023 for further details. European Hospital Liability Quota Share Effective April 1, 2011, Maiden Reinsurance entered into the European Hospital Liability Quota Share with AEL and AIU DAC. Pursuant to the terms of the European Hospital Liability Quota Share, Maiden Reinsurance assumed 40 % of the premiums and losses related to policies classified as European Hospital Liability, including associated liability coverages and policies covering physician defense costs, written or renewed on or after April 1, 2011. The European Hospital Liability Quota Share also covers policies written or renewed on or before March 31, 2011, but only with respect to losses that occur, accrue or arise on or after April 1, 2011. The maximum limit of liability attaching shall be € 5,000 (€ 10,000 effective January 1, 2012) or currency equivalent (on a 100 % basis) per original claim for any one original policy. Maiden Reinsurance paid a ceding commission of 5 % on contracts assumed under the European Hospital Liability Quota Share. 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. 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. 30 MAIDEN HOLDINGS, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (in thousands of U.S. dollars, except share and per share data) 10. Related Party Transactions (continued) Effective July 1, 2022, Maiden Reinsurance and AIU DAC entered into an agreement ("Commutation Agreement") which provided for AIU DAC to assume all reserves ceded by AIU DAC to Maiden Reinsurance with respect to AIU DAC’s French Medical Malpractice exposures for underwriting years 2012 through 2018 reinsured by Maiden Reinsurance under the European Hospital Liability Quota Share. In accordance with the Commutation Agreement, Maiden Reinsurance paid $ 31,291 (€ 29,401 ) to AIU DAC, which is the sum of net ceded reserves of $ 27,625 (€ 25,956 ) and an agreed exit cost of $ 3,666 (€ 3,444 ). As a result of the Commutation Agreement, Maiden Reinsurance reduced its exposure to AmTrust's Hospital Liability business, but still has exposure to Italian medical malpractice liabilities under the European Hospital Liability Quota Share. 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 months ended March 31, 2024 and 2023, respectively: For the Three Months Ended March 31, 2024 2023 Gross and net premiums written $ ( 505 ) $ ( 6,013 ) Net premiums earned 3,417 1,531 Net loss and LAE ( 9,018 ) ( 7,182 ) Commission and other acquisition expenses ( 1,298 ) ( 579 ) Collateral provided to AmTrust a) AmTrust Quota Share To provide AmTrust's U.S. insurance subsidiaries with credit for reinsurance on their statutory financial statements, AII, as the direct reinsurer of AmTrust's insurance subsidiaries, established trust accounts ("Trust Accounts") for their benefit. Maiden Reinsurance has provided appropriate collateral to secure its proportional share under the AmTrust Quota Share of AII's obligations to the AmTrust subsidiaries to whom AII is required to provide collateral which can include: (a) assets loaned by Maiden Reinsurance to AII for deposit into the Trust Accounts, pursuant to a loan agreement between those parties; (b) assets transferred by Maiden Reinsurance for deposit into the Trust Accounts; or (c) a letter of credit obtained by Maiden Reinsurance and delivered to an AmTrust subsidiary on AII's behalf. Maiden Reinsurance may provide any or a combination of these forms of collateral, provided that the aggregate value thereof equals Maiden Reinsurance's proportionate share of its obligations under the AmTrust Quota Share. The collateral requirements under the AmTrust Quota Share with AII was satisfied as follows: • by lending funds of $ 167,975 at March 31, 2024 and December 31, 2023 pursuant to a loan agreement entered into between those parties. Advances under the loan are secured by promissory notes. This loan was assigned by AII to AmTrust effective December 31, 2014 and is carried at cost. There was no allowance for expected credit losses recognized on the loan at March 31, 2024 and December 31, 2023. Interest is payable at a rate equivalent to the Federal Funds Effective Rate ("Fed Funds") plus 200 basis points per annum. The interest income on the loan was $ 3,070 for the three months ended March 31, 2024 (2023 - $ 2,698 ) and the effective yield was 7.3 % (2023 - 6.4 %). • on January 30, 2019, in connection with the termination of the reinsurance agreements described above, the Company and AmTrust amended the Loan Agreement between Maiden Reinsurance, AmTrust and AII, originally entered into on November 16, 2007, by extending the maturity date to January 1, 2025 and specifies that due to the termination of the AmTrust Quota Share, no further loans or advances may be made pursuant to the Loan Agreement. • on January 11, 2019, the Company transferred $ 575,000 to AmTrust as a portion of the existing Trust Accounts used for collateral on the AmTrust Quota Share was converted to a funds withheld arrangement. The funds withheld receivable earns an annual interest rate of 3.5 % for 2024, subject to annual adjustment ( 3.5 % for 2023). At March 31, 2024, the funds withheld balance was $ 61,016 (December 31, 2023 - $ 128,451 ) and accrued interest was $ 844 (December 31, 2023 - $ 1,584 ). The interest income on the funds withheld receivable was $ 844 for the three months ended March 31, 2024 (2023 - $ 3,281 ). No allowance for expected credit losses was recognized for the fund withheld receivable from AmTrust and related accrued interest at March 31, 2024 and December 31, 2023. 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. Under the MCA, Cavello provided letters of credit on behalf of Maiden Reinsurance to AmTrust in an amount representing Cavello’s obligations under the LPT/ADC Agreement. Because these letters of credit replaced other collateral previously provided directly by Maiden Reinsurance to AmTrust, the MCA coordinates the collateral protection that will be provided to AmTrust to ensure that no gaps in collateral funding occur by operation of the LPT/ADC Agreement and related MCA. As a result of entering into both the LPT/ADC Agreement and the MCA, certain post-termination endorsements (“PTEs”) to the AmTrust Quota Share between AII and Maiden Reinsurance were required. 31 MAIDEN HOLDINGS, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (in thousands of U.S. dollars, except share and per share data) 10. Related Party Transactions (continued) Effective July 31, 2019, the PTEs: i) enable the operation of both the LPT/ADC Agreement and MCA by making provision for certain forms of collateral, including letters of credit provided by Cavello on Maiden Reinsurance’s behalf, and further defines the permitted use and return of collateral; and ii) increase the required funding percentage for Maiden Reinsurance under the collateral arrangements between the parties to 105 % of its obligations, subject to a minimum excess funding requirement of $ 54,000 , as may be mutually amended by the parties from time to time. Under certain defined conditions, Maiden Reinsurance may be required to increase this funding percentage to 110 %. Effective March 16, 2020, Maiden Reinsurance discontinued as a Bermuda company and completed its re-domestication to the State of Vermont. Bermuda is a Solvency II equivalent jurisdiction and the State of Vermont is not such a jurisdiction; therefore, the collateral provided under the respective agreements with AmTrust subsidiaries was strengthened to reflect the impact of the re-domestication concurrent with the date of Maiden Reinsurance’s re-domestication to Vermont. Maiden Reinsurance and AmTrust agreed to: 1) amend the AmTrust Quota Share pursuant to Post Termination Endorsement No. 2 effective March 16, 2020; and 2) amend the European Hospital Liability Quota Share pursuant to Post Termination Endorsement No. 1 effective March 16, 2020. Pursuant to the terms of Post Termination Endorsement No. 2 to the AmTrust Quota Share, Maiden Reinsurance strengthened the collateral protection provided by Maiden Reinsurance to AII by increasing the required funding percentage for Maiden Reinsurance under the collateral arrangements between the parties to 110 % of its obligations, subject to a minimum excess funding requirement of $ 54,000 , as may be mutually amended by the parties from time to time. Post Termination Endorsement No. 2 also sets forth conditions by which the funding percentage will be reduced and the sequence of how collateral will be utilized as obligations, as defined under the AmTrust Quota Share, are satisfied. Pursuant to the terms of Post Termination Endorsement No. 2, the funding percentage was reduced to 107.5 % during the first quarter of 2023. Pursuant to the terms of Post Termination Endorsement No. 1 to the European Hospital Liability Quota Share, Maiden Reinsurance strengthened the collateral protection provided by Maiden Reinsurance to AEL and AIU DAC by increasing the required funding percentage for Maiden Reinsurance under the collateral arrangements between the parties to the greater of 120 % of the Exposure (as defined therein) and the amount of security required to offset the increase in the Solvency Capital Requirement (“SCR”) that results from the changes in the SCR which arise out of Maiden Reinsurance's re-domestication as compared to the SCR calculation if Maiden Reinsurance had remained domesticated in a Solvency II equivalent jurisdiction with a solvency ratio above 100 % and provided collateral equivalent to 100 % of the Exposure. b) European Hospital Liability Quota Share Collateral has been provided to both AEL and AIU DAC under the European Hospital Liability Quota Share. For AEL, the amount of the collateral held in reinsurance trust accounts at March 31, 2024 was $ 151,199 (December 31, 2023 - $ 147,635 ) and the accrued interest was $ 953 (December 31, 2023 - $ 1,091 ). Asset Management Agreement Effective July 1, 2007, the Company entered into an asset management agreement with AII Insurance Management Limited ("AIIM"), a wholly owned subsidiary of AmTrust, pursuant to which AIIM agreed to provide investment management services to the Company. Effective January 1, 2018, AIIM provides investment management services for a quarterly fee of 0.02125 % of the average value of the account. The agreement may be terminated upon 30 days written notice by either party. The Company recorded $ 57 of investment management fees for the three months ended March 31, 2024 (2023 - $ 73 ) 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. On November 13, 2020, Maiden LF, 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. 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. 32 MAIDEN HOLDINGS, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (in thousands of U.S. dollars, except share and per share data) 11. Commitments, Contingencies and Guarantees 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, 2023. a) Concentrations of Credit Risk At March 31, 2024 and December 31, 2023, 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 paid and unpaid losses and funds withheld receivable. Please refer to " Note 8. Reinsurance " for additional information regarding the Company's credit risk exposure on its reinsurance counterparties including the impact of the LPT/ADC Agreement effective January 1, 2019. The Company requires its reinsurers to have adequate financial strength. The Company evaluates the financial condition of its reinsurers and monitors its concentration of credit risk on an ongoing basis. Provisions are made for amounts that are considered potentially uncollectible. Reinsurance receivable and recoverable balances, loan to related party, and the funds withheld receivable are reviewed for expected credit losses on a quarterly basis and are presented net of an allowance for expected credit losses. Letters of credit are provided by its reinsurers for material amounts recoverable as discussed in " Note 8. Reinsurance ". The Company manages the concentration of credit risk in its investment portfolio through issuer and sector exposure limitations. The Company believes it bears minimal credit risk in its cash on deposit. The Company also monitors the credit risk related to the loan to related party, reinsurance balances receivable and funds withheld receivable, within which the largest balances are due from AmTrust. AmTrust has a financial strength/credit rating of A- (Excellent) from A.M. Best at March 31, 2024. To mitigate credit risk, the Company generally has a contractual right of offset thereby allowing claims to be settled net of any premiums or loan receivable. The Company believes these balances as at March 31, 2024 will be fully collectible. b) Investment Commitments and Related Financial Guarantees The Company had total unfunded commitments on alternative investments of $ 98,384 at March 31, 2024 (December 31, 2023 - $ 100,846 ) which included commitments for other investments, private equity securities and equity method investments. The table below shows the total unfunded commitments by type of investment as at March 31, 2024 and December 31, 2023: March 31, 2024 December 31, 2023 Fair Value % of Total Fair Value % of Total Private equity funds $ 53,215 54.1 % $ 53,675 53.2 % Private credit funds 11,302 11.5 % 11,361 11.3 % Investments in direct lending entities — — % 595 0.6 % Total unfunded commitments on other investments $ 64,517 65.6 % $ 65,631 65.1 % Total unfunded commitments on equity securities $ 14,735 15.0 % $ 14,735 14.6 % Total unfunded commitments on equity method investments $ 19,132 19.4 % $ 20,480 20.3 % Total unfunded commitments on alternative investments $ 98,384 100.0 % $ 100,846 100.0 % Certain of the Company's investments in limited partnerships are related to real estate joint ventures with interests in multi-property projects with varying strategies ranging from the development of properties to the ownership of income-producing properties. In certain of these joint ventures, the Company has provided certain indemnities, guarantees and commitments to certain parties such that it may be required to make payments now or in the future. Any loss for which the Company could be liable would be contingent on the default of a loan by the real estate joint venture entity for which the Company provided a financial guarantee to a lender. While the Company has committed to aggregate limits as to the amount of guarantees it will provide as part of its limited partnerships, guarantees are only provided on an individual transaction basis and are subject to the terms and conditions of each transaction mutually agreed by the parties involved. The Company is not bound to such guarantees without its express authorization. As discussed above, at March 31, 2024, guarantees of $ 69,733 (December 31, 2023 - $ 62,508 ) were provided to lenders by the Company on behalf of real estate joint ventures, however, the likelihood of the Company incurring any losses pertaining to project level financing guarantees was determined to be remote. Therefore, no liability has been accrued under ASC 450-20. c) Operating Lease Commitments The Company leases office spaces and equipment under various operating leases expiring in various years through 2025. The Company's leases are 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, and whose lease payments are above a certain threshold, the Company recognizes a lease liability and a right-of-use asset in the Condensed Consolidated Balance Sheets at the present value of the remaining lease payments until expiration. 33 MAIDEN HOLDINGS, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (in thousands of U.S. dollars, except share and per share data) 11. Commitments, Contingencies and Guarantees (continued) 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. At March 31, 2024, the Company's future lease obligations of $ 167 (December 31, 2023 - $ 228 ) were 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 Sheet as a lease liability within accrued expenses and other liabilities with an equivalent amount for the right-of-use asset presented as part of other assets . 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 approximately 1.0 year at March 31, 2024. Under Topic 842, Leases , the Company continues to recognize the related leasing expense on a straight-line basis over the lease term on the Condensed Consolidated Statements of Income. The Company's total lease expense was $ 146 for three months ended March 31, 2024 (2023 - $ 120 ) recognized in general and administrative expenses consistent with the prior accounting treatment under Topic 840. At March 31, 2024, the scheduled maturity of the Company's operating lease liabilities are expected to be as follows: March 31, 2024 2024 $ 137 2025 39 Discount for present value ( 9 ) Total discounted operating lease liabilities $ 167 The Company has contracted to lease office space in New York City commencing in April 2024, which will create a significant right-of-use asset and a lease liability once certain leasehold improvements have been completed and the operating lease has commenced. The Company will occupy this space and capitalize the leased asset in the second quarter of 2024. d) Legal Proceedings Except as noted below, the Company is not a party to any material legal proceedings. From time to time, the Company is subject to routine legal proceedings, including arbitration, arising in the ordinary course of business. These legal proceedings generally relate to claims asserted by or against the Company in the ordinary course of insurance or reinsurance operations. Based on the Company's opinion, the eventual outcome of these legal proceedings is not expected to have a material adverse effect on its financial condition or results of operations. In April 2009, the Company learned that Bentzion S. Turin, the former Chief Operating Officer, General Counsel and Secretary of Maiden Holdings and Maiden Reinsurance, sent a letter to the U.S. Department of Labor claiming that his employment with the Company was terminated in retaliation for corporate whistle-blowing in violation of the whistle-blower protection provisions of the Sarbanes-Oxley Act of 2002. Mr. Turin alleged that he was terminated for raising concerns regarding corporate governance with respect to the negotiation of the terms of the Trust Preferred Securities Offering. He seeks reinstatement as Chief Operating Officer, General Counsel and Secretary of Maiden Holdings and Maiden Reinsurance, back pay and legal fees incurred. On December 31, 2009, the U.S. Secretary of Labor found no reasonable cause for Mr. Turin’s claim and dismissed the complaint in its entirety. Mr. Turin objected to the Secretary's findings and requested a hearing before an administrative law judge in the U.S. Department of Labor. The Company moved to dismiss Mr. Turin's complaint, and its motion was granted by the Administrative Law Judge on June 30, 2011. On July 13, 2011, Mr. Turin filed a petition for review of the Administrative Law Judge's decision with the Administrative Review Board in the U.S. Department of Labor. On March 29, 2013, the Administrative Review Board reversed the dismissal of the complaint on procedural grounds, and remanded the case to the administrative law judge. The administrative hearing began in September 2014 and concluded in November 2018. On September 2, 2021, Administrative Law Judge Theresa C. Timlin of the U.S. Department of Labor issued a decision and order which denied Mr. Turin’s complaint in full. On September 16, 2021, Mr. Turin filed a petition for review of the Administrative Law Judge's decision with the Administrative Review Board in the U.S. Department of Labor. On June 29, 2023, the Administrative Review Board issued a decision and order which summarily affirmed the September 2, 2021 decision and order of the Administrative Law Judge. The decision and order of the Administrative Review Board became the final order of the Secretary of Labor on July 27, 2023. On July 28, 2023, Mr. Turin filed a petition for review of the final order of the Secretary of Labor in the United States Court of Appeals for the Second Circuit. The Secretary of Labor is the respondent before the Second Circuit and the Court granted the Company's petition to intervene in order to present its position to the Court. A putative class action complaint was filed against Maiden Holdings, Arturo M. Raschbaum, Karen L. Schmitt, and John M. Marshaleck in the United States District Court for the District of New Jersey on February 11, 2019. On February 19, 2020, the Court appointed lead plaintiffs, and on May 1, 2020, lead plaintiffs filed an amended class action complaint (the “Amended Complaint”). The Amended Complaint asserts violations of Section 10(b) of the Exchange Act and Rule 10b-5 (and Section 20(a) for control person liability) arising in large part from allegations that Maiden failed to take adequate loss reserves in connection with reinsurance provided to AmTrust. 34 MAIDEN HOLDINGS, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (in thousands of U.S. dollars, except share and per share data) 11. Commitments, Contingencies and Guarantees (continued) Plaintiffs further claim that certain of Maiden Holdings’ representations concerning its business, underwriting and financial statements were rendered false by the allegedly inadequate loss reserves, that these misrepresentations inflated the price of Maiden Holdings' common stock, and that when the truth about the misrepresentations was revealed, the Company’s stock price fell, causing Plaintiffs to incur losses. On September 11, 2020, a motion to dismiss was filed on behalf of all Defendants. On August 6, 2021, the Court issued an order denying, in part, Defendants’ motion to dismiss, ordering Plaintiffs to file a shorter amended complaint no later than August 20, 2021, and permitting discovery to proceed on a limited basis. On February 7, 2023, the District Court denied Plaintiffs’ motion for reconsideration of the District Court’s decision denying Plaintiffs’ objection to the Magistrate Judge’s December 2021 ruling on discovery. On May 26, 2023, the Company filed a Renewed Motion to Dismiss the Second Amended Complaint or, in the Alternative, for Summary Judgment, which has been fully briefed. On December 19, 2023, the U.S. District Court for the District of New Jersey granted summary judgment on plaintiffs’ claim for securities fraud under Section 10(b) of the Securities Exchange Act to Maiden Holdings, Ltd. and individual defendants Arturo Raschbaum, Karen Schmitt, and John Marshalek. The Court held that the factual record failed to support, as a matter of law, plaintiffs’ allegations that the defendants had made false statements regarding the Company’s loss reserves. The Court also dismissed plaintiffs’ claims that the individual defendants were liable as control persons under Section 20(a) of the Securities Exchange Act for any such alleged false statements. Plaintiffs have appealed to the United States Court of Appeals for the Third Circuit. We believe the claims are without merit and we intend to vigorously defend ourselves. It is possible that additional lawsuits will be filed against the Company, its subsidiaries and its respective officers due to the diminution in value of our securities as a result of our operating results and financial condition. It is currently uncertain as to the effect of such litigation on our business, operating results and financial condition. 12. Earnings per Common Share The following is a summary of the elements used in calculating basic and diluted earnings per common share: For the Three Months Ended March 31, 2024 2023 Numerator: Net income (loss) $ 1,459 $ ( 11,328 ) Amount allocated to participating common shareholders (1) ( 17 ) — Net income (loss) available (attributable) to Maiden common shareholders $ 1,442 $ ( 11,328 ) Denominator: Weighted average number of common shares – basic 100,457,125 101,552,364 Dilutive share options and restricted share units (2) — — Adjusted weighted average number of common shares – diluted (2) 100,457,125 101,552,364 Basic and diluted earnings (loss) per share available (attributable) to common shareholders $ 0.01 $ ( 0.11 ) (1) This represents the share in net income using the two-class method for holders of non-vested restricted shares issued to the Company's employees under the 2019 Omnibus Incentive Plan. (2) Please refer to "Note 6. Shareholders' Equity" and "Note 14. Share Compensation and Pension Plans" in the Notes to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 for the terms and conditions of securities that could potentially be dilutive in the future. There were no potentially dilutive securities for the three months ended March 31, 2024 (2023 - 0 ). 13. Income Taxes The Company recognized an income tax expense of $ 11 for the three months ended March 31, 2024 compared to an income tax benefit of $ 28 for the same period in 2023. The effective tax rate on the Company's net income differs from the statutory rate of zero percent under Bermuda law due to tax on foreign operations, primarily the U.S. and Sweden. A valuation allowance has been established against the net U.S. and International deferred tax assets which is primarily attributable to net operating losses and capital losses in the respective regions. At this time, the Company believes it is necessary to establish a valuation allowance against the U.S. and International net deferred tax assets as more evidence is needed regarding the utilization of these losses. At March 31, 2024, the Company has available net operating loss carry-forwards of $ 334,019 (December 31, 2023 - $ 337,420 ) for income tax purposes. Approximately $ 182,801 (December 31, 2023 - $ 186,203 ) of the net operating loss ("NOL") carryforwards expire in various years beginning in 2029. As of March 31, 2024, approximately $ 151,218 or 45.3 % of the Company's NOL carryforwards have no expiry date under the relevant U.S. tax law. At March 31, 2024, the Company also has a capital loss carry-forward of $ 14,058 (December 31, 2023 - $ 13,853 ) which will expire beginning in 2024. 35 MAIDEN HOLDINGS, LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (in thousands of U.S. dollars, except share and per share data) 14. Subsequent Events Common Share Repurchases Subsequent to the three months ended March 31, 2024 and through the period ended May 8, 2024, the Company repurchased 238,884 additional common shares at an average price per share of $ 2.16 under the Company's authorized common share repurchase plan pursuant to Rule 10b5-1(c)(1) under the Securities Exchange Act of 1934. The Company's remaining share repurchase authorization was $ 70,425 at May 8, 2024. Renewal Rights Transaction - IIS Business On May 3, 2024, Maiden LF and Maiden GF entered into a renewal rights transaction with AmTrust Nordic, a Swedish unit of AmTrust which is expected to cover the majority of Maiden LF and Maiden GF's primary business written in Sweden, Norway and other Nordic countries. The Company anticipates entering into additional renewal rights agreements with other AmTrust entities for certain business written by Maiden GF and Maiden LF in the United Kingdom and Ireland. Under these agreements, AmTrust Nordic in collaboration with existing Maiden LF and Maiden GF distribution partners, will offer renewals to select policyholders in exchange for a fee at standard market terms for business successfully renewed. AmTrust are expected to hire a limited number of related staff to support the transfer of the business. These transactions are part of the Company's broader plan to divest its IIS businesses as a result of its recently concluded strategic review of the IIS business platform. The purpose of that review was to evaluate the strategic value of Maiden LF and Maiden GF in relation to their ongoing growth and profitability prospects, regulatory capital requirements and ability to create shareholder value in excess of the Company's target return on capital levels. As part of these conclusions, the Company expects to enter into additional transactions to either sell or wind-up Maiden GF and Maiden LF during 2024 and is actively evaluating potential transactions currently. 36