The following tables summarize selected financial data of the Company for the seven months ended September 30, 2014 and for the years ended February 28, 2014, February 28, 2013 and February 29, 2012. The information in the tables was extracted from the detailed financial statements and related notes which were prepared in accordance with IFRS and are included in this registration statement and should be read in conjunction with such financial statements and with the information appearing under the heading, “ Item 5. Operating and Financial Review and Prospects. ” The amounts below are expressed in Canadian Dollars. Please refer to “ Financial Information and Exchange Rates ” for information about the exchange rate between Canadian Dollars and U.S. Dollars.

2

Not applicable.

Risks Relating to Insurance and Reinsurance

The insurance and reinsurance markets are cyclical and we will be subject to their cycles.

The insurance and reinsurance markets are cyclical and subject to unforeseen developments which may affect our results. These include trends of courts granting increasingly larger awards for certain damages, natural disasters, fluctuations in interest rates, changes in laws, changes in the investment environment that affect market prices of investments, inflationary pressures and other events that affect the size of premiums or losses companies and primary insurers experience. Demand for insurance and reinsurance is influenced significantly by prevailing economic conditions. The supply of reinsurance is related to prevailing prices, the levels of insured losses, and the levels of industry surplus which, in turn, may fluctuate in response to changes in rates of return on investments being earned in the reinsurance industry. Furthermore, weak economic conditions may adversely affect (among other aspects of our business) the demand for and claims made under our products, the ability of clients, counterparties and others to establish or maintain their relationships with us, our ability to access and efficiently use internal and external capital resources and our investment.

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Our results of operations will fluctuate from period to period and may not be indicative of our long-term prospects.

The performance of our reinsurance operations and investment portfolio will fluctuate from period to period. Fluctuations will result from a variety of factors, including: reinsurance contract pricing; our assessment of the quality of available reinsurance opportunities; the volume and mix of reinsurance products underwritten; loss experience on our reinsurance liabilities; the performance of our investment portfolio; and our ability to assess and integrate our risk management strategy properly.

We face numerous competitors, many of which are more experienced and better capitalized than us.

We will compete with major global insurance and reinsurance companies. These companies may have extensive experience in insurance and reinsurance and have greater financial resources available to them. We may also face competition in the future from new entrants that provide products similar to those we provide. Competition could result in less business being available to us, lower premium rates, investment credits, and less favorable retrocession coverage, which could adversely impact our growth and profitability. Our competitors include, among others, Watford Re Ltd., Third Point Reinsurance Ltd. and Hamilton Re, Ltd. and traditional reinsurers, including ACE Ltd., Everest Re, General Re Corporation, Hannover Re Group, Munich Reinsurance Company, Partner Re Ltd., Swiss Reinsurance Company and Transatlantic Reinsurance Company, which are dominant companies in our industry. Although we seek to provide coverage where capacity and alternatives are limited, we directly compete with these larger companies due to the breadth of their coverage across the property and casualty market in substantially all lines of business. We also compete with smaller companies and other niche reinsurers.

Further, our ability to compete may be harmed if insurance industry participants consolidate. Consolidated entities may try to use their enhanced market power to negotiate price reductions for our products and services. If competitive pressures reduce our prices, we would expect to write less business. As the insurance industry consolidates, if at all, competition for customers may become more intense, and the importance of acquiring and properly servicing each customer may become greater. We could incur greater expenses relating to customer acquisition and retention, further reducing our operating margins. In addition, insurance companies that merge may be able to spread their risks across a consolidated, larger capital base so that they require less reinsurance. The number of companies offering retrocessional reinsurance may decline. Reinsurance intermediaries could also consolidate, potentially adversely impacting our ability to access business and distribute our products. We could also experience more robust competition from larger, better capitalized competitors. Any of the foregoing could significantly, and negatively, affect our business or our results of operation.

If we choose to purchase reinsurance, we may be unable to do so, and if we successfully purchase reinsurance, we may be unable to collect the amounts due from such reinsurers.

We may purchase reinsurance for our own account in order to mitigate the volatility of losses upon our financial condition. A reinsurer’s insolvency, or inability or refusal to make payments under the terms of its reinsurance agreement with us, could have a material adverse effect on us because we will remain liable to the insured.

From time to time, market conditions have limited, and in some cases have prevented, insurers and reinsurers from obtaining the types and amounts of reinsurance that they consider adequate for their business needs. Accordingly, we may not be able to obtain our desired amounts of reinsurance or retrocessional reinsurance. In addition, even if we were able to obtain such reinsurance or retrocessional reinsurance, we may not be able to negotiate terms that we deem appropriate or acceptable or obtain such reinsurance or retrocessional reinsurance from entities with satisfactory creditworthiness.

There are numerous counterparty risks associated with the insurance and reinsurance businesses.

We may suffer investment losses due to defaults by others, including issuers of investment securities, reinsurance and derivative counterparties. Issuers or borrowers whose securities we hold, reinsurers, clearing agents, clearing houses and other financial intermediaries may default on their obligations due to bankruptcy, insolvency, lack of liquidity, adverse economic conditions, fraud or other reasons. Our investment portfolio may include investment securities or other assets of the type that have recently experienced defaults. All or any of these types of default could have a material adverse effect on our results of operations, financial condition and liquidity.

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In addition, our reinsurance transactions may expose us to credit and counterparty risks of certain parties, such as intermediaries and trustees, in addition to risks relating to such ceding insurers’ underwriting practices. Although we intend to operate our business in a manner that should limit and manage these risks, there can be no assurance that we will not be adversely affected as a result of our exposure to such risks.

For example, in accordance with industry practice, we may pay amounts owed under our policies to reinsurance intermediaries or brokers, who in turn pay these amounts to the ceding insurer. In some jurisdictions, if the intermediary or broker fails to make such an onward payment, we might remain liable to the ceding insurer for the deficiency. Conversely, the ceding insurer may pay premiums to the intermediary or broker, for onward payment to us in respect of reinsurance policies we issued. In certain jurisdictions, these premiums are considered to have been paid to us at the time that payment is made to the intermediary or broker, and the ceding insurer will no longer be liable to us for those amounts, whether we have or have not actually received the premiums. We may not be able to collect all premiums receivable due from any particular intermediary or broker at any given time.

We also expect to hold a substantial portion of our reserves with third party custodians to secure letters of credit for the benefit of the related cedant, and our access to these amounts is expected to be limited. As a result, we may be exposed to the risk of operational errors or delays at applicable trustees in addition to credit risk with respect to such parties. The terms of applicable custody and letter of credit agreements are generally expected to provide, and depending on the cedant’s jurisdiction, may be required to provide, certain protections against such risks, but there can be no assurance that we will not be adversely affected as a result of our exposure to such risks.

There are numerous operational risks associated with the insurance and reinsurance businesses that could adversely affect our business.

Operational risks and losses can result from many sources, including fraud, errors by employees, failure to document transactions properly or to obtain proper internal authorization, failure to comply with regulatory requirements or information technology failures.

We believe our information technology and application systems will be critical to our business and reputation and ability to compete successfully. In addition to our own systems, we will be dependent on those of others, including those licensed from our service providers. We cannot be certain that we will have access to these, or comparable service providers and information and technology application systems, or that existing systems will continue to operate as intended. A major defect or failure in our internal controls or information technology and application systems could result in management distraction, harm to our reputation, a loss or delay of revenues or increased expense.

There are ever changing legal and regulatory developments in the insurance and reinsurance industries that could adversely affect our business.

The insurance industry has experienced substantial volatility as a result of litigation, investigations and regulatory activity by various insurance, governmental and enforcement authorities concerning certain practices within the insurance industry. These practices include the accounting treatment for finite reinsurance or other non-traditional or loss mitigation insurance and reinsurance products.

These investigations have resulted in changes in the insurance and reinsurance markets and industry business practices. We cannot predict the potential effects, if any, that future litigation, investigations and regulatory activity may have upon the reinsurance industry.

The effect of emerging claim and coverage issues on our business is uncertain.

As industry practices and legal, judicial and regulatory conditions change, unexpected issues related to claims and coverage may emerge. Various provisions of our contracts, such as limitations or exclusions from coverage or choice of forum, may be difficult to enforce in the manner we intend, due to, among other things, disputes relating to coverage and choice of legal forum. These issues may adversely affect our business by either extending coverage beyond the period that we intended or by increasing the number or size of claims. In some instances, these changes may not manifest themselves until many years after we have issued insurance or reinsurance contracts that are affected by these changes. As a result, we may not be able to ascertain the full extent of our liabilities under our insurance or reinsurance contracts for many years following the issuance of our contracts. The effects of unforeseen development or substantial government intervention could adversely impact our ability to adhere to our goals.

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Our failure to maintain sufficient letter of credit (“LOC”) facilities or to increase our LOC capacity on commercially acceptable terms as we grow could significantly and negatively affect our ability to implement our business strategy.

We are not licensed or admitted as a reinsurer in any jurisdiction other than Bermuda. Certain jurisdictions, including the United States, do not permit ceding insurers to take credit on their statutory financial statements for reinsurance obtained from unlicensed or non-admitted insurers unless the reinsurer posts a LOC or provides other collateral. Further, our license from the Bermuda Monetary Authority (“BMA”) requires that it post collateral equal to the limit of each contract of reinsurance written. Consequently, certain clients will require us to deliver a LOC or provide other collateral through funds withheld or trust arrangements. When a reinsurer obtains a LOC facility, the reinsurer is typically required to provide collateral to the LOC provider in order to secure the obligations under the facility. Our ability to provide collateral, and the costs at which we provide collateral, are primarily dependent on the composition of our investment portfolio.

Typically, LOCs are collateralized with fixed-income securities. Banks may be willing to accept our investment portfolio as collateral, but on terms that may be less favorable to us than reinsurance companies that invest solely or predominantly in fixed-income securities. The inability to renew, maintain or obtain LOCs collateralized by our investment portfolio may significantly limit the amount of reinsurance we can write or require us to modify our investment strategy.

We may utilize margin loans from prime brokers to provide cash to support the LOC arrangements. The potential for margin loan capacity to be reduced or withdrawn may negatively impact our ability to obtain, renew, maintain or increase LOCs.

If we are unable to obtain, renew, maintain or increase LOC facilities or is unable to do so on commercially acceptable terms, we may need to liquidate all or a portion of our investment portfolio and invest in a fixed-income portfolio or other forms of investment acceptable to our clients and banks as collateral, which could significantly and negatively affect our ability to implement our business strategy.

We depend on our clients’ evaluations of the risks associated with their insurance underwriting, which may subject us to reinsurance losses.

In some of our proportional reinsurance business, in which we assume an agreed percentage of each underlying insurance contract being reinsured, or quota share contracts, we do not expect to separately evaluate each of the original individual risks assumed under these reinsurance contracts. Therefore, we will be largely dependent on the original underwriting decisions made by ceding companies. We will be subject to the risk that the clients may not have adequately evaluated the insured risks and that the premiums ceded may not adequately compensate us for the risks we assume. We also do not expect to separately evaluate each of the individual claims made on the underlying insurance contracts under quota share contracts. Therefore, we will be dependent on the original claims decisions made by our clients.

We could face unanticipated losses from political instability which could have a material adverse effect on our financial condition and results of operations.

We could be exposed to unexpected losses on our reinsurance contracts resulting from political instability and other politically driven events globally. These risks are inherently unpredictable and recent events may indicate an increased frequency and severity of losses. It is difficult to predict the timing of these events or to estimate the amount of loss that any given occurrence will generate. To the extent that losses from these risks occur, our financial condition and results of operations could be significantly and negatively affected.

6

Any suspension or revocation of RRL’s reinsurance license would materially impact our ability to do business and implement our business strategy.

RRL is presently licensed as a reinsurer only in Bermuda. The suspension or revocation of RRL’s license to do business as a reinsurance company in this jurisdiction for any reason would mean that RRL would not be able to enter into any new reinsurance contracts until the suspension ended or until RRL became licensed in another jurisdiction. Any such suspension or revocation of RRL’s license could negatively impact RRL’s reputation in the reinsurance marketplace and could have a material adverse effect on our results of operations.

We are subject to the risk of possibly becoming an investment company under U.S. federal securities law.

In the United States, the Investment Company Act of 1940, as amended (the “Investment Company Act”) regulates certain companies that invest in or trade securities. For United States investments, we will rely on an exemption under the Investment Company Act for an entity organized and regulated as a foreign insurance company which is engaged primarily and predominantly in the reinsurance of risks on insurance agreements. The law in this area is subjective and there is a lack of guidance as to the meaning of ‘‘primarily and predominantly’’ under the relevant exemption to the Investment Company Act. For example, there is no standard for the amount of premiums that need to be written relative to the level of an entity’s capital in order to qualify for the exemption. If this exemption were deemed inapplicable, we would have to register under the Investment Company Act as an investment company, unless another exemption is available. Registered investment companies are subject to extensive, restrictive and potentially adverse regulation relating to, among other things, operating methods, management, capital structure, leverage, dividends and transactions with affiliates. Registered investment companies are not permitted to operate their business in the manner in which we operate our business, nor are registered investment companies permitted to have many of the relationships that we have with our affiliated companies.

If at any time it were established that we had been operating as an investment company in violation of the registration requirements of the Investment Company Act, there would be a risk, among other material adverse consequences, that we could become subject to monetary penalties or injunctive relief, or both, or that we would be unable to enforce contracts with third parties or that third parties could seek to obtain rescission of transactions with us undertaken during the period in which it was established that we were an unregistered investment company.

To the extent that the laws and regulations change in the future so that contracts we write are deemed not to be reinsurance contracts, we will be at greater risk of not qualifying for the Investment Company Act exception. Additionally, it is possible that our classification as an investment company would result in the suspension or revocation of our reinsurance license.

Insurance regulations to which we are, or may become, subject, and potential changes thereto, could have a significant and negative effect on our business.

We currently are admitted to do business in Bermuda. Our operations in this jurisdiction will be subject to regulation and supervision. We expect to conduct our business in a manner such that we expect that it will not be subject to insurance and/or reinsurance licensing requirements or regulations in any jurisdiction other than Bermuda, and, if we complete our proposed acquisition of Omega Insurance Holdings Inc. (“Omega”), Canada. Although we do not currently intend that we or RRL will engage in activities which would require either entity to comply with insurance and reinsurance licensing requirements outside of Bermuda or Canada, should we choose to engage in activities that would require us to become licensed in such jurisdictions, we cannot assure investors that we will be able to do so or to do so in a timely manner. Furthermore, the laws and regulations applicable to direct insurers could indirectly affect us, such as collateral requirements in various U.S. states to enable such insurers to receive credit for reinsurance ceded to us. Also, we cannot assure investors that insurance regulators in the United States or elsewhere will not review our activities and claim that we are subject to such jurisdiction’s licensing requirements. In addition, we are subject to indirect regulatory requirements imposed by jurisdictions that may limit our ability to provide reinsurance. For example, our ability to write reinsurance may be subject, in certain cases, to arrangements satisfactory to applicable regulatory bodies, and proposed legislation and regulations may have the effect of imposing additional requirements upon, or restricting the market for, non-U.S. reinsurers, with whom domestic companies may place business. We do not know of any such proposed legislation pending at this time.

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We may not be able to comply fully with, or obtain desired exemptions from, statutes, regulations and policies that currently, or may in the future, govern the conduct of our business. Failure to comply with, or to obtain desired authorizations and/or exemptions under, any applicable laws could result in restrictions on our ability to do business or undertake activities that are regulated in one or more of the jurisdictions in which we operate and could subject us to fines and other sanctions. In addition, changes in the laws or regulations to which our subsidiaries are subject or may become subject, or in the interpretations thereof by enforcement or regulatory agencies, could have a material adverse effect on our business.

The insurance and reinsurance regulatory framework of Bermuda recently has become subject to increased scrutiny in many jurisdictions, including the United States. In the past, there have been Congressional and other initiatives in the United States regarding increased supervision, regulation and taxation of the insurance industry, including proposals to supervise and regulate offshore reinsurers. Government regulators are generally concerned with the protection of policyholders rather than other constituencies, such as our shareholders. We are not able to predict the future impact on our operations of changes in the laws and regulations to which we are or may become subject.

We expect to become subject to regulations in Canada through our proposed acquisition of Omega. As a participant in the Canadian insurance industry, Omega is subject to significant regulations of the Canadian federal and provincial governments, including capital and solvency standards, restrictions on certain types of investments and periodic market conduct and financial examinations by regulators. Future changes to Canadian regulations may limit Omega’s ability to adjust prices, adjudicate claims or take other actions that would enhance operating results. Omega seeks to mitigate these risks through regular discussions with regulators and industry groups to ensure it is aware of proposed changes and to provide feedback on proposed changes.

Complex and changing U.S. government regulations could impact our business and results of operations.

In July 2010, the U.S. government passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, or “Dodd-Frank Act,” one of the most sweeping financial reforms in decades. The legislation is expected to affect virtually every segment of the financial services industry, including the insurance and reinsurance industry in the United States.

Among other things, the Dodd-Frank Act created the Federal Insurance Office (the “FIO”) to be located within the U.S. Treasury department, with the authority to monitor all aspects of the insurance industry (except health insurance), and changes the regulatory framework for non-admitted insurance and reinsurance. The FIO recently issued a report with recommendations on how to modernize and improve the system of insurance regulation in the United States. Many of the provisions of the Dodd-Frank Act and the recommendations of the FIO require substantial rulemaking within the federal government. Consequently, the ultimate impact of any of these provisions on our operations, financial results or capital resources is currently indeterminable. We intend to monitor the impact of the Dodd-Frank Act on our business.

Risks Relating to the Investment Strategy

We may change our investment strategy at any time.

We will initially pursue an investment strategy that will focus up to 30% of our investment portfolio in the natural resources sector. As of December 31, 2014, approximately 28% of the fair market value of our investment portfolio consisted of investments in the natural resources sector. However, we may change our investment strategy at any time, and there can be no assurances that we will not change this strategy materially at any time. Any change in investment strategy could expose us to different risks than those described in this section entitled “Risk Factors”. Further, an investment strategy that focuses a significant percentage of investments in one sector may experience more significant swings in valuation and investment performance than a more diversified investment strategy would experience.

A substantial portion of our investment portfolio will have limited liquidity, which could adversely affect our financial results.

We strive to structure our investments in a manner that recognizes our liquidity needs for future liabilities of the insurance operations. However, providing mineral development financing to junior resource companies and trading in micro-cap securities will limit the liquidity of our portfolio. We cannot assure investors that we will successfully structure our investments in relation to our anticipated liabilities. Failure to do so could force us to liquidate investments at a significant loss or at prices that are not optimal, which could significantly and adversely affect our financial results. The success of our investment strategy may also be affected by general economic conditions.

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Unexpected market volatility and illiquidity associated with our investments could significantly and negatively affect our investment portfolio results.

Investments in junior and intermediate resource companies may have a significantly higher degree of risk than many other types of investments. This risk may arise from numerous factors, including, but not limited to the following factors.

• The valuation of junior and intermediate resource companies is highly dependent upon the properties to which they have claims. The most important aspect of a property is the resource quality, which involves the geological configuration of the ore body containing the resource (e.g., its size, depth below the surface and grade), the complexity of recovering the desired resource from the ore, the cost of production, the growth potential, the distance to a mill and any royalties and/or taxes associated with the property. Many of these attributes are only imprecisely known and may even be completely unknown. The technical data available from exploration efforts may be incomplete and/or erroneous, leading to false estimates of the resource available for extraction.
• The value of a property is also dependent upon the infrastructure available and the associated costs to support exploration and development efforts. This includes roads, power availability, water availability, skilled labor availability and housing. In many cases, the infrastructure may be incomplete or entirely lacking, or may be prohibitively expensive. This causes considerable uncertainty in the capital expenditure that may be required in order to exploit a resource.
• The exploration for mineral deposits involves significant financial risks, and few properties that are exploited are ultimately developed into producing mines. Major exploration expenses are required to determine if mineral properties may have the potential to be commercially viable or to be sold or otherwise divested. If any properties in our investment portfolio are not commercially viable or able to be sold or otherwise divested, then we may incur impairment losses.
• A further source of risk is the social license associated with a property. This includes multiple factors that may be only imprecisely known. Properties cannot be explored and developed without the requisite permits, and there can be no certainty that these permits will be issued. There may be substantial opposition to the issuance of permits by environmental organizations, or by the local populace or by the regional or national governments. Even when a project is eventually approved, the approvals may be substantially delayed, resulting in high holding costs with no progress on a project.   
• The legal title to a property may be subject to challenge, and in the event of government instability, existing permits and legal titles may be overturned. In addition, properties may be subject to prior unregistered liens, agreements, claims or transfers which may affect the title or permits and the resource company’s rights to the property.
• Properties where previous mining activities have been conducted may have substantial unknown or imprecisely known historical environmental liabilities, and future mining activities may incur substantial and unpredictable future environmental liabilities.
• Valuations of junior and intermediate resource companies are highly dependent upon competent, experienced management. Necessary management expertise spans a large range of disciplines, including executive management, financial management, geology, metallurgy, operations, engineering and social license management. There can be no certainty that a given management team will be successful in achieving their objectives, or that the needed expertise will be available.
• The financial health of junior and intermediate resource companies is often tenuous. Since these companies may have no revenues, their continued viability is highly dependent upon their ability to raise capital in the equity and/or debt markets which are subject to varying and unpredictable market conditions. There is no guarantee that such capital will be available or that it will be available at prices that are not highly dilutive to existing shareholders or substantially burdensome to future revenues, e.g., when hedging of production at unattractive prices is required.
• Another source of risk is the market desirability of a given company and the market conditions for the resource(s) held in its properties. A company’s market desirability is directly related to its liquidity of trading, its visibility in a crowded resource market and the float of shares available for trading. It is also influenced by the market sentiment toward companies in its sector and the market price(s) for its products. Resource markets tend to be cyclical in nature, and the depth of negative sentiment is unpredictable. There may be little or no ability to affect these factors and/or to predict their future outlooks.
• The valuation of junior and intermediate resource companies is partially a function of their corporate responsibility in such areas as transparency, voting rights, regulatory perspectives and industry perspectives. There may be no way for investors to affect these issues, and furthermore there are no guarantees that favorable ratings will be obtained in the future.

We may effectuate short sales of securities that subject us to unlimited loss potential.

We may enter into transactions in which it sells a security it does not own, which we refer to as a short sale, in anticipation of a decline in the market value of the security. Short sales for our account theoretically will involve unlimited loss potential since the market price of securities sold short may continue to increase.

Our investments made through Courant Capital Management LLC involve taking long and short positions in large-cap equities, which positions are speculative and could result in losses, which may be significant.

We have invested a portion of our investment portfolio with Courant Capital Management LLC (“Courant”). Courant uses a proprietary trading strategy to invest in large-cap equities. Courant employs a statistical approach to take long and short positions in these equities, investing at times at which it considers the equity to be over-sold or over-bought in the short-term. However, Courant’s investment strategy is subject to market volatility, and there can be no assurance that this strategy will achieve expected gains. We may incur losses in the current or future periods as a result of Courant’s investment strategies, including significant losses, which could materially and adversely affect our liquidity, financial condition and results of operations.

The extent of our exposure to this risk is limited by the size of our investment in the Courant fund. We do not finance our investments in Courant with debt in order to apply financial leverage. We have daily visibility into the accounts in which Courant’s portfolio investments are held and can monitor Courant’s performance on a daily basis. Our portfolio managed by Courant is diversified among large-cap equities, and we can liquidate our entire position in the Courant portfolio into cash at any time within a three-day settlement period. However, there can be no assurances that these risk management strategies will be effective or that our investments made through Courant will not negatively impact our future liquidity, financial position and results of operations.

We may buy and sell derivatives which may increase the risk of our investment portfolio.

We may buy and sell derivative instruments, or derivatives, including futures, options, swaps, structured securities and other instruments and contracts that derive their value from one or more underlying securities, financial benchmarks, currencies, commodities or indices. Before doing so, we expect that we would make a determination as to whether we were required to register as a commodity pool operator or if we qualified for an exemption from the registration requirements. To the extent that we engage in derivatives trading in the future, there are a number of risks associated therewith. Because many derivatives are leveraged, and thus provide significantly more market exposure than the money paid or deposited when the transaction is entered into, a relatively small adverse market movement may result in the loss of a substantial portion of or the entire investment, and may potentially expose us to a loss exceeding the original amount invested. Derivatives may also expose us to liquidity and counterparty risk. There may not be a liquid market within which to close or dispose of outstanding derivatives contracts. In the event of the counterparty’s default, we would generally only rank as an unsecured creditor and risk the loss of all or a portion of the amounts we were contractually entitled to receive.

Our representatives’ service on boards and committees may place trading restrictions on our investments and may subject us to indemnification liability.

We may from time to time place representatives or representatives of our affiliates on creditors’ committees and/or boards of certain companies in which we have invested. While such representation may enable us to enhance the sale value of our investments, it may also place trading restrictions on our investments and may subject us to indemnification liability.

Risks Relating to the Company

We have no history of operating results.

We have limited operations in the reinsurance business to date and no financial results on which potential investors may base their investment decision or compare our results with other investment opportunities. Because we are in the initial stage of development, we face substantial business and financial risks and may suffer significant losses. We must successfully develop business relationships, establish operating procedures, hire staff, install management information and other systems and complete other tasks necessary to conduct our intended business activities. We are attempting to successfully develop and maintain business relationships, establish operating procedures, and complete other tasks appropriate for the conduct of our intended business activities. In particular, our ability to implement successfully our strategy depends on, among other things:

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It is possible that we will not be successful in implementing our business strategy or accomplishing these necessary tasks.

Additionally, because our business model and investment strategies differ from those of other insurers and reinsurers, investors may not be able to compare our business or prospects to those of other property and casualty reinsurers because, among other things:

• RRL intends to focus on reinsurance contracts that have average or above frequency and low severity claims where risks are generally more predictable than compared to reinsurance contracts where claims are expected to be less frequent but more severe (i.e., catastrophic risks). Profit or loss of reinsurers who assume more predictable risks is generally less volatile and less profitable than the profit or loss of reinsurers who assume catastrophic risks. Our underwriting profit may therefore not be as profitable compared to reinsurers who assume catastrophic risks, and conversely, our underwriting losses may not be as large as reinsurers who assume catastrophic risks.
• RRL intends to focus on reinsurance contracts that have longer periods for loss development (i.e., run-off) where premiums collected on the contracts may be held, and invested, for longer periods than reinsurance contracts where claims are expected to develop and be paid more quickly. Our investment income may therefore be higher compared to the investment income of reinsurers with contracts that have shorter loss development periods.
• RRL intends to maintain a high capital ratio to support claim liabilities and may therefore enter into fewer reinsurance contracts than other reinsurers who may maintain a lower level of capital to support claim liabilities. As such, our underwriting profit or loss may be less than the underwriting profit or loss compared to reinsurers who maintain a lower level of capital to support claim liabilities. Conversely, our investment income may be higher compared to reinsurers who maintain a lower level of capital to support claim liabilities.
• RRL intends to rely significantly on third-party contractors to whom we will pay commissions and incentives to evaluate and secure reinsurance contracts. Our underwriting costs may therefore be higher, and our underwriting profit lower, compared to reinsurers who do not rely on third-party contractors to evaluate and secure reinsurance contracts.
• In addition to the availability of RRL’s assets to settle claims, RRL expects to further support a substantial amount of its insurance risks with letters of credit (“LOCs”). We will incur costs to maintain LOCs. Other established reinsurers may not enhance their claims-paying ability with LOCs. Our underwriting costs may therefore be higher compared to reinsurers who do not support their claims-paying ability with LOCs.
• Depending on the amount and types of business made available to RRL, RRL does not initially expect to have an aged block of diversified insurance risks, either by line of business, geographic area, producer, etc. Most traditional reinsurers would have such diversity embedded in to their overall book of business and, accordingly, may not be exposed to single events and one-time loss occurrences.
• RRL does not have a history of operations, and that absence of an operating history may affect our ability to execute our strategies and operating philosophies. 

We cannot assure investors that there will be sufficient demand for the insurance and reinsurance products we plan to write to support our planned level of operations, or that we will succeed in implementing our business strategy

Our operational structure is currently being developed and implemented.

We are in the process of developing and implementing our operational structure and enterprise risk management framework, including exposure management, financial reporting, information technology and internal controls, with which we will conduct our business activities. There can be no assurance that the development of our operational structure or the implementation of our enterprise risk management framework will proceed smoothly or on our projected timetable.

Forward-looking statements may prove inaccurate.

The analysis of our business contains forward-looking statements, which include information concerning our possible future results, as well as other expressions of belief, expectation or anticipation. The forward-looking statements included in our analysis are based on a limited history and current expectations and are subject to uncertainty including the risk that the assumptions on which they are based prove to be inaccurate. Shareholders are cautioned that many factors could affect the our future results and, as a result, contribute to our actual results being materially different from those results expressed in, or implied by, the forward-looking statements contained herein. Because we are a newly formed company, most of the statements relating to us and our business, including statements relating to our competitive strengths and business strategies, are forward-looking statements.

Because we do not have an operating history as a reinsurance company, our historical and pro forma financial information may not be indicative of our future results.

The historical and pro forma financial information we have included in this registration statement has been derived from the historical financial information of Till, AMB, SPD, GPY and Omega and may not reflect what our results of operations, financial position and cash flows would have been had the Reorganization and Omega Acquisition been consummated during the periods presented or be indicative of what our results of operations, financial position, and cash flows may be as a reinsurance company in the future. Assumptions and adjustments have been made regarding the Company after giving effect to the Reorganization and Omega Acquisition, and these assumptions and adjustments may not prove to be accurate. Our actual financial condition and results of operations following the completion of the Reorganization and Omega Acquisition may not be consistent with, or evident from, the pro forma financial information.

Our historical and pro forma financial information reflect AMB, SPD and GPY’s operations as mineral resource exploration companies and Omega’s operations as an insurance business, but do not reflect our operations as a reinsurance business. Until April 17, 2014, AMB was a mineral resource exploration company. After April 17, 2014, we began to transition to a reinsurance business. Our historical and pro forma financial information does not reflect changes that we expect to experience and are currently experiencing as a result of our transition to a reinsurance company, including changes in our cost structure, financing, personnel needs, tax structure, business operations and management. We have no history of operating as a reinsurance company. Our lack of an operating history as a reinsurance business will make it difficult for investors to assess our ability to operate profitably as a reinsurance business.

There are limitations for financial projections, especially for a new company.

We have no operating history in the reinsurance business. We only recently commenced our reinsurance business and have no history of operations. There can be no assurance that policyholders or cedants will transact with us. Moreover, insurance and reinsurance risks we assume and expenses may leave us exposed to liabilities in excess of premiums and investment income, resulting in a demand on our capital base, and there can be no assurance that losses exceeding our total resources will not occur.

RRL is unrated and the markets rely heavily on ratings so RRL may not be able to generate premiums.

Third party rating agencies assess and rate the claims paying ability of insurers and reinsurers based on criteria established by such rating agencies. The claims paying ability ratings assigned by rating agencies to insurance and reinsurance companies represent independent opinions of financial strength and ability to meet policyholder obligations, and are not directed toward the protection of investors. Insured parties and brokers/intermediaries use these ratings as one measure by which to assess the financial strength and quality of insurers and reinsurers. These ratings are often a key factor in the decision by an insured or a broker/intermediary of whether to place business with a particular insurance or reinsurance provider. RRL hopes to secure an “A-(Excellent)” or better rating from A.M. Best, a company which provides credit ratings services for the insurance industry, and apply for a rating as soon as practicable. However, there is no guarantee that such a rating, or a comparable rating from any rating agency, will be obtained, or that if any such rating is obtained, that it will be maintained. Other than A.M. Best, the rating agencies may not rate RRL for some time because RRL lacks an operating history. Although we believe our strong financial position will be sufficient to attract a sufficient volume of business, there can be no assurance that the lack of a rating will not adversely affect the volume and quality of business available to RRL.

We expect to rely on Multi-Strat Re Ltd., brokers, and other reinsurance intermediaries, which may be unwilling or unable to produce business for us.

We expect to rely primarily on Multi-Strat Re Ltd. (“Multi-Strat Re”) for the business we will receive. We expect that a large portion of our business will come from a limited number of intermediaries. We have entered into agreements with Multi-Strat Re pursuant to which we have written limited amounts of reinsurance business through the Multi-Strat Re platform. Multi-Strat Re is licensed as a Class 3A insurer under the Insurance Act but has a limited history of operations. We understand that Multi-Strat Re is the process of sourcing insurance business and is in regular contact with the BMA about the status of such business. It is possible that the BMA will not approve certain insurance business proposed by Multi-Strat Re, in which case Multi-Strat Re will not be able to write such insurance business, and we will not be able to source such insurance business through the Multi-Strat Re platform. Loss of the Multi-Strat Re business could adversely affect our results.

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We may not be able to locate, bind, or profitably underwrite insurance and reinsurance underwriting risks.

Our successful operations rely on our ability to find, select, monitor and control the reinsurance risks we are assuming. To the extent that the developing nature of this market, together with the volatility of both spreads in capital markets and of low treasury returns, cause such risks to be more volatile than projected or less profitable, poor implementation or selection of underwriting criteria could result in material deterioration in earnings or shareholder’s equity in future periods.

The concentration of our insurance and reinsurance clients could adversely affect us.

Due to the limited number of potential insurance and reinsurance clients, we expect that a few of these potential clients will account for a high percentage of our revenues for the foreseeable future. If we fail to attract or retain business from one or more of these potential clients, we would be adversely affected. Also, the loss of a significant client in the future could adversely affect us.

If interest rates increase significantly, they could hurt us.

If interest rates move upward significantly, we could be adversely affected in two ways. First, competitors could become more aggressive in their pricing, making up for any increase in underwriting losses with higher investment gains. Second, cedants could insist on higher claims limits to compensate for the opportunity cost of investing the funds that they are using to pay the premiums to RRL.

If our loss reserves are inadequate, we could suffer additional reductions in earnings.

We will establish loss reserves to cover the payment of all losses incurred with respect to the business it writes. Reserves are estimates involving actuarial and statistical projections at a given time to quantify our expectation of ultimate settlement and administration of claims costs and the timing thereof. The establishment of an appropriate level of reserves is an inherently uncertain process. Moreover, the estimation of reserves for new insurers, such as us, is inherently less reliable than the reserve estimations for an insurer with a longer operating history because such newer companies do not yet have an established loss history. Actual losses and loss adjustment expenses we incur may deviate, perhaps substantially, from initial estimates. If our reserves in respect of business written should be inadequate, we may be required to increase reserves, causing a corresponding reduction in our net income in the period in which the deficiency is identified. There can be no assurance that losses will not exceed our reserves and have a material adverse effect on our financial condition or results of operations in a particular period. If actual claims exceed our loss reserves, our financial results could be significantly adversely affected.

Fixed overheads could adversely affect our expense ratio.

Our overhead will not necessarily vary in proportion to the volume and profitability of the business we write, which is expected to fluctuate. As a result, our expense ratio may become disproportionately high during periods in which we write a lower volume of business.

We are dependent on outsourcing and any inability to do so or failure by an outsourcer could adversely affect us.

Until dedicated management is retained, our success will largely be dependent on the efforts of our service providers, particularly with respect to obtaining premiums, insurance underwriting, and/or raising capital. Should we fail to obtain premiums, we would likely be deemed to be a passive foreign investment company for U.S. federal tax purposes, which would cause significant negative tax consequences to U.S. investors. If we fail to meet expectations in underwriting, we could suffer financially.

We may not be able to recruit the quality or quantity of full-time management necessary to make us successful.

While outsourcing makes sense when we are our current size, our expansion plans may require us to recruit full-time management.

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If we are unable to do so, we could fail to grow, and our results of operations could be adversely affected.

We are reliant on key employees.

Various aspects of our business will depend on the services and skills of key personnel, including our Chief Executive Officer, Chief Investment Officer and Chief Financial Officer. We may enter into employment contracts and take other steps to encourage the retention of certain management personnel, and to identify and retain additional personnel, but there can be no assurance that we will be able to attract and retain key personnel. We currently have employment contracts with our Chief Executive Officer and Chief Financial Officer.

There are limitations in using predictive models.

We will utilize predictive models to underwrite our insurance and reinsurance business and manage our reserves successfully. Any substantial or repeated failures in the accuracy or reliability of such models could have a material adverse effect on our business, financial condition and results of operation.

We may be unable to retrocede risk and might suffer severe losses as a result.

We may seek to limit our risk by purchasing retrocessional protection for our business. At the outset, however, we believe that access to retrocession will be limited. There can be no assurance that retrocession will be available to us in the future. If retrocession is available, there can be no assurance that it will be on terms we deem to be appropriate or acceptable or from entities with satisfactory creditworthiness. We have not arranged for any retrocession to date.

We may be unsuccessful in making acquisitions or strategic investments.

We may pursue growth through acquisitions and/or strategic investments in new businesses, including Omega. The negotiation of potential acquisitions or strategic investments as well as the integration of an acquired business or new personnel could result in a substantial diversion of management resources. Acquisitions could involve numerous additional risks such as potential losses from unanticipated litigation or levels of claims and inability to generate sufficient revenue to offset acquisition costs. Our ability to manage our growth through acquisitions or strategic investments will depend, in part, on our success in addressing these risks. Any failure by us to effectively implement our acquisitions or strategic investment strategies could have a material adverse effect on our business, financial condition or results of operations.

Our financial results are likely to be very volatile, which could diminish valuations of our shares.

Insurance and reinsurance risks and investing in natural resource companies can be volatile. We expect to mitigate insurance and reinsurance volatilities by adhering to strict underwriting guidelines restricting the volatility of risks being assumed and/or through further retrocessions pursuant to which we will cede our own risks to other assuming companies.

Furthermore, our investment results could also be volatile. Investors must be prepared for the possibility of losing their entire investment.

We may require additional capital, which may be unavailable when we need it.

Our future capital requirements depend on many factors, including our ability to establish reserves at levels sufficient to cover losses. We may need to raise additional funds through financings or curtail our growth and reduce our assets. Any equity or debt financing, if available at all, may be on terms that are not favorable to us. In the case of equity financings, dilution to our shareholders could result. In addition, one or more investors may fail to purchase the full amount of shares such investor committed to purchase under its subscription agreement. If we cannot obtain adequate capital, our business, results of operations and financial condition could be adversely affected. We may require additional capital in the future, which may not be available or may only be available on unfavorable terms.

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U.S. persons who own our shares may have more difficulty in protecting their interests than U.S. persons who are shareholders of a U.S. corporation.

Our bye-laws call for all shareholder suits to be adjudicated in Bermuda and all shareholders agree to this as a condition of purchasing shares. Bermuda does not permit its attorneys to act on behalf of clients on a contingency fee basis, so any shareholder or combination of shareholders must pay legal fees to press any grievance against us or our directors in a Bermuda court of law. Furthermore, Bermuda’s legal system requires the non-prevailing party to pay legal fees of the prevailing party.

The rights of shareholders under Bermuda law are also not as extensive as the rights of shareholders under legislation or judicial precedent in many Canadian or United States jurisdictions. For example, class actions and derivative actions are generally not available to shareholders under the laws of Bermuda. However, the Bermuda courts ordinarily would be expected to follow English case law precedent, which does permit a shareholder to commence an action in the name of a company to remedy a wrong done to the company where the act complained of (i) is alleged to be beyond the corporate power of the company; (ii) is illegal; or (iii) would result in the violation of the company’s Memorandum of Association or Bye-laws. Furthermore, consideration would be given by the court to acts that are alleged to constitute a fraud against the minority shareholders or where an act requires the approval of a greater percentage of the company’s shareholders than actually approved it. The winning party in such an action would generally be able to recover a portion of attorneys’ fees incurred in connection with such action. Our bye-laws provide that shareholders waive all claims or rights of action that they might have, individually or in the right of the Company, against any director or officer for any act or failure to act in the performance of such director’s or officer’s duties, except with respect to any fraud or dishonesty of such director or officer.

We are subject to the jurisdiction of Bermuda work eligibility laws which may limit our ability to employ key employees.

We may also be affected by Bermuda laws requiring work permits for certain employees. Under Bermuda law, non-Bermudians (other than spouses of Bermudians) may not engage in any gainful occupation in Bermuda without an appropriate governmental work permit. Our success may depend in part upon the continued services of key employees and contractors in Bermuda. A work permit may be granted or renewed upon showing that, after proper public advertisement, no Bermudian (or spouse of a Bermudian or a holder of a permanent resident’s certificate or holder of a working resident’s certificate) is available who meets the minimum standards reasonably required by the employer. The Bermuda government’s policy no longer places a term limit on individuals with work permits. A work permit is issued with an expiry date (up to five years) and no assurances can be given that any work permit will be issued or, if issued, renewed upon the expiration of the relevant term. If work permits are not obtained, or are not renewed, for our principal employees and contractors, we would lose their services, which could materially affect our business.

There could be changes of law in Bermuda that could adversely affect us.

Because we are organized in Bermuda, we will be subject to changes of law or regulation in such jurisdiction that may have an adverse impact on our operations overall, including imposition of tax liability or increased regulatory supervision. In addition, we will be exposed to changes in the political environment in Bermuda.

Failure to complete our acquisition of Omega Insurance Holdings Inc. could negatively affect our share price, future business and financial results.

On October 10, 2014, we entered into a share purchase agreement with the shareholders of Omega, pursuant to which we propose to acquire all of the issued and outstanding shares of Omega (the “Omega Acquisition”). Completion of the Omega Acquisition is not assured and is subject to risks, including the risk that our acquisition may not be approved by the Canadian regulatory authority OSFI. If the Omega Acquisition is not consummated, our share price, ongoing business and financial results may be adversely affected as a result of, among other things, the diversion of management attention away from our reinsurance business and assumptions by the market that the Omega Acquisition will be consummated.

We may incur significant transaction and acquisition-related integration costs in connection with an acquisition of Omega.

We have entered into a share purchase agreement for the Omega Acquisition. Although we anticipate realizing significant benefits from an Omega Acquisition, we will incur costs to consummate the acquisition and to integrate Omega’s operations with our operations. At this time, we cannot identify the timing, nature and amount of all such costs. The acquisition-related costs could materially adversely affect our results of operations in the period in which such costs are recorded or our cash flow in the period in which any related costs are actually paid.

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We may experience difficulties in integrating the Omega businesses, which could cause us to fail to realize many of the anticipated benefits of the Omega Acquisition.

We entered into a share purchase agreement with the shareholders of Omega with the expectation that the Omega Acquisition will result in various benefits, including, among other things, capacity to support future reinsurance operations, a revenue stream from outsourcing services provided to foreign insurance carriers in Canada, and insurance management expertise. Achieving these benefits will depend in part on our ability to manage Omega following the transaction. The difficulties of achieving these benefits will potentially include, among other things, addressing differences in management philosophies and the distraction of our management’s attention from our day-to-day business. An inability to realize the full extent of the anticipated benefits of the Omega Acquisition could have an adverse effect on our revenues and operating results, which may affect our share price.

Our acquisition of Omega may expose us to unknown liabilities.

If the Omega Acquisition is consummated, we will generally be subject to all liabilities of Omega. If there are unknown liabilities or other obligations, including contingent liabilities, our business could be materially affected. Omega is an insurance business which includes insurance run-off, portfolio transfers, and fronting arrangements. These lines of business are new to us and may pose unknown risks, including, but not limited to:

Risks Relating to our Shares.

Our shares have limited voting rights.

No holder or combination of holders who attribute beneficial ownership to one another may hold more than 9.9% of the voting power of the Company, regardless of whether they hold substantially more than 9.9% of the votes attaching to our issued and outstanding shares. However, if any one person (within the meaning of the United States Internal Revenue Code of 1986, as amended) owns in excess of 50% of our shares, then the restriction on voting power will cease to apply. While this structure is in place to avoid inadvertent taxation of U.S. shareholders under the controlled foreign corporation U.S. taxation rules, it also limits the abilities of shareholders to combine to enforce changes in our practices.

There are restrictions on dividends.

We are a holding company and therefore cannot conduct a reinsurance or insurance business on our own. We will initially have no significant operations or assets other than our ownership of shares of RRL. Dividends and other permitted payments from RRL are expected to be our primary source of funds to pay expenses and dividends, if any. Although we may declare dividends to our shareholders, it is uncertain when, if ever, such dividends will be declared, and the Class 3A insurance license of RRL also prohibits RRL from declaring and/or paying any dividends and/or making any capital contributions to RRL’s parent, shareholders or affiliates without the obtaining prior written approval of the BMA. During the early years of operations, we expect that RRL will retain virtually all profit (if any), other than that necessary to pay our expenses, to provide capacity to write reinsurance and to accumulate reserves and surplus for the payment of claims. In addition, the payment of dividends by RRL to Till is limited under Bermuda law and regulations, and may be limited by the terms of RRL’s agreements with its cedants.

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Warrants and options will dilute shareholders.

We have issued warrants and will issue further warrants and options to our officers, directors and certain business partners. Our shareholders will experience dilution upon the exercise of the warrants, with the scope of such dilution dependent on the number of fully diluted shares of the Company outstanding as of such time.

We have adopted a stock option plan, and as options are granted and exercised thereunder, our shareholders will experience dilution upon the exercise of such options, with the scope of such dilution dependent on the number of fully diluted shares outstanding as of such time. In addition, although the size of the option pool will be determined by our senior management and approved by our Board, no assurance can be given that the size of the option pool will be adequate to retain and properly incentivize our management. As a result, additional options or other equity awards may be granted in the future, resulting in additional dilution to our shareholders.

Risks Relating to Conflicts of Interest

Our directors and officers may be conflicted to our detriment.

One of our directors is a principal of Multi-Strat Holdings Ltd. (“Multi-Strat Holdings” or “MSH”) and Multi-Strat Re, and one of our directors is a director of Omega, which may give rise to conflicts of interest. In connection with executing their duties as our directors and officers, such directors and officers have agreed to abide by certain requirements, including notifying our other board members of any conflicts of interest relating to any matter to be determined by our board. Under these requirements, a conflict of interest arises with respect to a director or officer in respect of any determination if the outcome of such determination will affect his or her personal remuneration by more than a de minimis amount, other than as a result of appreciation of share options or as the result of other incentive awards previously granted by us, but does not arise simply due to a preference for a particular service provider or counterparty to us, regardless of any affiliation with such party, whether resulting from greater familiarity with such parties or their businesses, existing good relationships with such parties or other reasons.

Risks Relating to Taxation

U.S. holders who hold our shares may be subject to adverse U.S. tax consequences if we are considered to be a passive foreign investment company for U.S. federal income tax purposes.

If we are considered to be a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes, a U.S. Holder (as defined below) who owns any of our shares may be subject to adverse U.S. federal income tax consequences, including a greater tax liability than might otherwise apply and an interest charge on certain taxes that are deferred by virtue of our non-U.S. status. In general, either we would be a PFIC for a tax year if: (i) 75% or more of our income constitutes “passive income” or (ii) 50% or more of our assets (by value) produce or were held to produce “passive income,” based on the quarterly average of the fair market value of such assets. Passive income generally includes interest, dividends and other investment income but does not include income derived in the active conduct of an insurance business by a corporation predominantly engaged in an insurance business. This exception for insurance companies is intended to ensure that a bona fide insurance company’s income is not treated as passive income, except to the extent such income is attributable to financial reserves in excess of the reasonable needs of the insurance business. However, there is very little authority as to what constitutes the active conduct of an insurance business for purposes of the PFIC rules. The IRS has notified taxpayers in IRS Notice 2003-34 that it intends to scrutinize the activities of certain insurance companies located outside of the United States, including reinsurance companies that invest a significant portion of their assets in alternative investment strategies, to determine whether such companies qualify for the active insurance company exception in the PFIC rules.

We did not actively engage in an insurance business in our tax year ended December 31, 2014 and we believe that we were classified as a PFIC for such tax year. Whether we are classified as a PFIC in our current tax year ending December 31, 2015 or subsequent tax years will depend, in part, on whether we are actively engaged in insurance activities that involve sufficient transfer of risk and whether our financial reserves are consistent with industry standards and are not in excess of the reasonable needs of our insurance business during such years. Accordingly, we cannot assure you that we will not be a PFIC in our current tax year or future tax years or that the IRS will agree with any determination by us that we are not a PFIC. Prospective investors are urged to consult their own tax advisors to assess their tolerance of this risk.

If a U.S. Holder holds our shares during any tax year in which we are treated as a PFIC, such shares will generally be treated as stock in a PFIC for all subsequent years. The consequences of us being treated as a PFIC and certain elections designed to mitigate such consequences, including a “Protective QEF Election,” are discussed in more detail under the heading “Certain United States Federal Income Tax Considerations”. If you are a United States person, we advise you to consult your own tax advisor concerning the potential tax consequences to you under the PFIC rules and to assess your tolerance of this risk.

We may become subject to taxes in Bermuda after March 31, 2035, which may have a material adverse effect on our financial condition and operating results and on an investment in our shares.

The Bermuda Minister of Finance, under The Exempted Undertakings Tax Protection Act 1966 of Bermuda, has assured us that if any legislation is enacted in Bermuda that would impose tax computed on profits or income, or computed on any capital asset, gain or appreciation, or any tax in the nature of estate duty or inheritance tax, then the imposition of any such tax will not be applicable to us or to any of our operations or shares, debentures or other obligations until after March 31, 2035.

We may be subject to U.S. federal income tax, which would have an adverse effect on our financial condition and results of operations and on an investment in our shares.

If either the Company or RRL were considered to be engaged in a trade or business in the United States, we could be subject to U.S. federal income and additional branch profits taxes on the portion of our earnings that are effectively connected to such U.S. business or in the case of RRL, if it is entitled to benefits under the United States income tax treaty with Bermuda and if it were considered engaged in a trade or business in the United States through a permanent establishment, RRL could be subject to U.S. federal income tax on the portion of its earnings that are attributable to its permanent establishment in the United States, in which case its results of operations could be materially adversely affected. The Company and RRL are Bermuda companies. We intend to manage our business so that each of these companies should operate in such a manner that neither of these companies should be treated as engaged in a U.S. trade or business and, thus, should not be subject to U.S. federal taxation (other than the U.S. federal excise tax on insurance and reinsurance premium income attributable to insuring or reinsuring U.S. risks and U.S. federal withholding tax on certain U.S. source investment income). However, there can be no assurance that the IRS will not contend that the Company or RRL are engaged in a trade or business in the United States. If the Company or RRL were so engaged, it would be subject to U.S. income tax at regular corporate rates on its taxable income that is effectively connected with the conduct of such trade or business as well as a 30% branch profits tax in certain circumstances.

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Certain gain on investments we make may be subject to U.S. federal income tax under FIRPTA.

Under the Foreign Investment in Real Property Tax Act (“FIRPTA”), gain or loss of a foreign corporation on the disposition of a “United States real property interest” is treated as if it were effectively connected with the conduct of a U.S. trade or business of such corporation. United States real property interests include interests other than as a creditor in a “United States real property holding corporation” (“USRPHC”). A USRPHC is any corporation, subject to a limited exception for a corporation whose stock is regularly traded on an established securities market, if the fair market value of its United States real property interests on any applicable determination date equals or exceeds 50% of the fair market value of the sum of its United States real property interests, its interests in real property outside of the United States and any other of its assets which are used or held for use in a trade or business. We intend to retain oversight over our investments and may impose guidelines from time to time designed to provide for an overall earnings or risk profile for us. Although nonexistent at present, such guidelines may limit the extent to which we may invest in USRPHCs and/or other United States real property interests. After the completion of the Arrangement, we will, directly or indirectly, hold interests in USRPHCs and United States real property interests.

Potential Additional Application of the Federal Insurance Excise Tax.

The IRS has formally announced its position that the U.S. federal insurance excise tax (the “FET”) is applicable (at a 1% rate on premiums) to all reinsurance cessions or retrocessions of risks by non-U.S. insurers or reinsurers to non-U.S. reinsurers where the underlying risks are either (i) risks of a U.S. entity or individual located wholly or partly within the United States or (ii) risks of a non-U.S. entity or individual engaged in a trade or business in the United States which are located within the United States (“U.S. Situs Risks”), even if the FET has been paid on prior cessions of the same risks. The legal and jurisdictional basis for, and the method of enforcement of, the IRS’s position is unclear. RRL has determined that the FET should likely be applicable with respect to risks ceded to it by, or by it to, a non-U.S. insurance company. If the FET is applicable, it should apply at a 1% rate on premiums for all U.S. Situs Risks ceded to RRL by a non-U.S. insurance company, or by RRL to a non-U.S. insurance company, even though the FET also applies at a 1% rate on premiums ceded to RRL with respect to such risks.

Changes in U.S. federal income tax law could materially adversely affect an investment in our shares.

In the past, legislation has been introduced in the U.S. Congress (but not enacted) intended to eliminate certain perceived tax advantages of companies (including insurance companies) that have legal domiciles outside the United States but have certain U.S. connections. It is possible that legislation could be introduced and enacted by the current Congress or future Congresses that could have an adverse effect on us or our shareholders. For example, one budget proposal would reduce or eliminate the tax deduction for reinsurance premiums paid by a U.S. insurer or reinsurer to an affiliate in a lower tax jurisdiction, such as Bermuda. Another proposal would treat foreign corporations as U.S. corporations for tax purposes if management and control occur primarily in the United States. Any such change in U.S. tax law could have a material adverse effect on us. The IRS may issue new regulations or pronouncements interpreting or clarifying rules applicable to us. We are not able to predict if, when or in what form such legislation or guidance will be enacted or provided and whether such legislation or guidance will have a retroactive effect.

We may become subject to Canadian federal income tax, which would have an adverse effect on our financial condition and results of operations and on an investment in shares.

We could become subject to Canadian federal income tax on our world-wide income or the world-wide income of RRL from all sources if either or both were considered under Canadian law to be resident in Canada. Since both companies are incorporated in Bermuda, whether either of us would be considered to be resident in Canada under Canadian law will generally depend on whether central management and control is exercised in Canada. We intend to manage our affairs such that neither our, nor RRL’s, central management and control should be considered to be exercised in Canada. However, there can be no assurance that we will actually do so, or that the Canada Revenue Agency or a Canadian court would not take a contrary view and consider either or both companies to be resident in Canada under Canadian law. In that case, we, RRL or both of us, as applicable, would be subject to combined Canadian federal and provincial corporate tax on our or their world-wide income at rates of approximately 25-30%, depending on applicable provincial tax rates, if any. In addition, dividends we pay to a non-resident shareholder would be subject to Canadian withholding tax of 25%, unless a lower rate was available under an applicable income tax treaty.

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We, RRL or both of us could, even if neither is resident in Canada, be subject to Canadian federal income tax to the extent that we or they derive income from a business carried on in Canada as determined under Canadian law. Whether a non-resident of Canada is considered to carry on business in Canada is generally a question of fact to be determined based on all relevant circumstances. We intend to manage our affairs such that neither company should be considered to carry on business in Canada. However, there can be no assurance that we will actually do so, or that the Canada Revenue Agency or a Canadian court would not take a contrary view and consider either or both companies to derive income from a business carried on in Canada. If this were to happen, we, RRL or both of us, as applicable, would be subject to combined Canadian federal and provincial tax on its or their income from carrying on business in Canada at combined rates of approximately 25-30%, depending on applicable provincial rates, if any. In addition, such income could be subject to an additional 25% branch tax in certain circumstances.