Bermuda
(State or other jurisdiction
of incorporation)
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001-34042
(Commission File
Number)
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98-0570192
(IRS Employer
Identification No.)
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o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01
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Entry into a Material Definitive Agreements.
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Item 2.01
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Completion of Acquisition or Disposition of Assets.
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Item 8.01
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Other Events.
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Item 9.01
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Financial Statements and Exhibits.
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Exhibit
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No.
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Description
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10.1
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99.1
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99.2
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99.3
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Date:
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January 3, 2019
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MAIDEN HOLDINGS, LTD.
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By:
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/s/ Denis M. Butkovic
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Denis M. Butkovic
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Senior Vice President, General Counsel and
Secretary
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A.
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Terminated Lines of Business
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1.
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The following lines of business in the Company’s Small Commercial Business and Extended Warranty and Specialty Risk Segments shall terminate on a cut-off basis (the “
Terminated Business
”):
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2.
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The Company shall provide the Reinsurer with all reasonably requested documentation necessary to confirm that the lines of business included by the Company within Terminated Business is Terminated Business. The Reinsurer acknowledges that any business ceded by the Company to Swiss Reinsurance America Corporation pursuant to the U.S. Commercial Lines Quota Share Reinsurance Contract effective January 1, 2019 among the Company, its affiliates and Swiss Reinsurance America Corporation is included in Terminated Business.
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3.
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The Reinsurer shall return the estimated unearned premium net of ceding commission and brokerage in the estimated amount of $480 million (the “
Estimated UEP
”) to the Company on or before January 3, 2019. The Company shall provide the Reinsurer a reasonably detailed statement showing the Company’s calculation of the Estimated UEP.
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4.
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The Reinsurer and Company agree that the return of the Estimated UEP shall be effectuated by the transfer from the Reinsurer to the Company of certain of the Reinsurer’s assets in the amount of the Estimated UEP held by the Company in the Trust Account, as defined in Article XXIII of the Agreement, established pursuant to the Reinsurance Trust Agreement dated April 23, 2008 by the Company, as Grantor, Technology Insurance Company, Inc., as beneficiary and JP Morgan Chase Bank, N.A., as Trustee (the “
Trust Account
”). The Company holds these assets pursuant to Reinsurance Trust Assets Collateral Agreement dated December 1, 2008 between the Reinsurer and the Company, the “
Collateral Agreement
”). The Reinsurer shall execute any document reasonably
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5.
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On or before May 30, 2019, the Company shall report (together with detailed documentation to support the calculation) to the Reinsurer the actual unearned premium applicable to the Terminated Business. In the event that actual unearned premium exceeds the Estimated UEP, the Reinsurer shall return to the Company assets in an amount equal to the difference as set forth in Paragraph 4. In the event that the Estimated UEP exceeds the actual unearned premium, the Company shall return the difference to the Reinsurer by designating assets in an amount equal to the difference as Collateral subject to the Collateral Agreement.
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6.
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In the event of a dispute between the Reinsurer and the Company regarding the actual unearned premium, Article XVI of the Agreement shall apply.
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7.
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The Reinsurer shall not be liable for Ultimate Net Loss incurred by the Company on or after the Effective Time with respect to the Terminated Business. The Reinsurer and Company shall remain liable to each other with respect to the Terminated Business for all obligations under the Agreement incurred prior to the Effective Time.
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B.
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Other Covered Business
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1.
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ARTICLE I - BUSINESS REINSURED is deleted in its entirety and restated as follows:
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2.
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Paragraph C to ARTICLE VI - PREMIUM AND CEDING COMMISSION is amended as follows:
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3.
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All other terms and conditions remain in effect.
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|
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Historical
|
|
Discontinued Operations
|
|
Pro Forma
|
||||||
Revenues
|
|
|
|
|
|
|
||||||
Gross premiums written
|
|
$
|
2,816,051
|
|
|
$
|
737,960
|
|
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$
|
2,078,091
|
|
Net premiums written
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|
$
|
2,761,988
|
|
|
$
|
724,612
|
|
|
$
|
2,037,376
|
|
Change in unearned premiums
|
|
(29,209
|
)
|
|
15,508
|
|
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(44,717
|
)
|
|||
Net premiums earned
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|
2,732,779
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|
|
740,120
|
|
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1,992,659
|
|
|||
Other insurance revenue
|
|
9,802
|
|
|
—
|
|
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9,802
|
|
|||
Net investment income
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166,345
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|
|
42,211
|
|
|
124,134
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|
|||
Net realized gains on investment
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12,222
|
|
|
—
|
|
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12,222
|
|
|||
Total revenues
|
|
2,921,148
|
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|
782,331
|
|
|
2,138,817
|
|
|||
Expenses
|
|
|
|
|
|
|
||||||
Net loss and loss adjustment expenses
|
|
2,160,011
|
|
|
604,578
|
|
|
1,555,433
|
|
|||
Commission and other acquisition expenses
|
|
820,758
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|
|
176,961
|
|
|
643,797
|
|
|||
General and administrative expenses
|
|
70,560
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|
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17,944
|
|
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52,616
|
|
|||
Interest and amortization expenses
|
|
23,260
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|
|
—
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|
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23,260
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|||
Accelerated amortization of senior note issuance cost
|
|
2,809
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|
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—
|
|
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2,809
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|
|||
Amortization of intangible assets
|
|
2,132
|
|
|
2,132
|
|
|
—
|
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|||
Foreign exchange and other losses
|
|
14,921
|
|
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—
|
|
|
14,921
|
|
|||
Total expenses
|
|
3,094,451
|
|
|
801,615
|
|
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2,292,836
|
|
|||
Loss before income taxes
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(173,303
|
)
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(19,284
|
)
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|
(154,019
|
)
|
|||
Less: income tax (benefit) expense
|
|
(3,558
|
)
|
|
3,074
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|
|
(6,632
|
)
|
|||
Net loss
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(169,745
|
)
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|
(22,358
|
)
|
|
(147,387
|
)
|
|||
Add: net income attributable to noncontrolling interests
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|
(151
|
)
|
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—
|
|
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(151
|
)
|
|||
Net loss attributable to Maiden
|
|
(169,896
|
)
|
|
(22,358
|
)
|
|
(147,538
|
)
|
|||
Dividends on preference shares
|
|
(29,156
|
)
|
|
—
|
|
|
(29,156
|
)
|
|||
Net loss attributable to Maiden common shareholders
|
|
$
|
(199,052
|
)
|
|
$
|
(22,358
|
)
|
|
$
|
(176,694
|
)
|
|
|
|
|
|
|
|
||||||
Basic and diluted loss per share attributable to Maiden common shareholders
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|
$
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(2.32
|
)
|
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$
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(0.26
|
)
|
|
$
|
(2.06
|
)
|
|
|
|
|
|
|
|
||||||
Weighted average number of common shares - basic and diluted
|
|
85,678,232
|
|
|
85,678,232
|
|
|
85,678,232
|
|
|
|
Historical
|
|
Discontinued Operations
|
|
Pro Forma
|
||||||
Revenues
|
|
|
|
|
|
|
||||||
Gross premiums written
|
|
$
|
2,831,348
|
|
|
$
|
742,319
|
|
|
$
|
2,089,029
|
|
Net premiums written
|
|
$
|
2,654,952
|
|
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$
|
687,281
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|
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$
|
1,967,671
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|
Change in unearned premiums
|
|
(86,802
|
)
|
|
(44,719
|
)
|
|
(42,083
|
)
|
|||
Net premiums earned
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|
2,568,150
|
|
|
642,562
|
|
|
1,925,588
|
|
|||
Other insurance revenue
|
|
10,817
|
|
|
—
|
|
|
10,817
|
|
|||
Net investment income
|
|
145,892
|
|
|
37,259
|
|
|
108,633
|
|
|||
Net realized gains on investment
|
|
6,774
|
|
|
—
|
|
|
6,774
|
|
|||
Total revenues
|
|
2,731,633
|
|
|
679,821
|
|
|
2,051,812
|
|
|||
Expenses
|
|
|
|
|
|
|
||||||
Net loss and loss adjustment expenses
|
|
1,819,906
|
|
|
530,394
|
|
|
1,289,512
|
|
|||
Commission and other acquisition expenses
|
|
773,664
|
|
|
158,141
|
|
|
615,523
|
|
|||
General and administrative expenses
|
|
66,984
|
|
|
16,730
|
|
|
50,254
|
|
|||
Interest and amortization expenses
|
|
28,173
|
|
|
—
|
|
|
28,173
|
|
|||
Accelerated amortization of senior note issuance cost
|
|
2,345
|
|
|
—
|
|
|
2,345
|
|
|||
Amortization of intangible assets
|
|
2,461
|
|
|
2,461
|
|
|
—
|
|
|||
Foreign exchange and other (gains) losses
|
|
(11,612
|
)
|
|
1,800
|
|
|
(13,412
|
)
|
|||
Total expenses
|
|
2,681,921
|
|
|
709,526
|
|
|
1,972,395
|
|
|||
Income (loss) before income taxes
|
|
49,712
|
|
|
(29,705
|
)
|
|
79,417
|
|
|||
Less: income tax expense
|
|
1,574
|
|
|
1,161
|
|
|
413
|
|
|||
Net income (loss)
|
|
48,138
|
|
|
(30,866
|
)
|
|
79,004
|
|
|||
Add: net loss attributable to noncontrolling interests
|
|
842
|
|
|
—
|
|
|
842
|
|
|||
Net income (loss) attributable to Maiden
|
|
48,980
|
|
|
(30,866
|
)
|
|
79,846
|
|
|||
Dividends on preference shares
|
|
(33,756
|
)
|
|
—
|
|
|
(33,756
|
)
|
|||
Net income (loss) attributable to Maiden common shareholders
|
|
$
|
15,224
|
|
|
$
|
(30,866
|
)
|
|
$
|
46,090
|
|
|
|
|
|
|
|
|
||||||
Basic earnings (loss) per share attributable to Maiden common shareholders
|
|
$
|
0.20
|
|
|
$
|
(0.40
|
)
|
|
$
|
0.60
|
|
Diluted earnings (loss) per share attributable to Maiden common shareholders
|
|
$
|
0.19
|
|
|
$
|
(0.39
|
)
|
|
$
|
0.58
|
|
Weighted average number of common shares - basic
|
|
77,534,860
|
|
|
77,534,860
|
|
|
77,534,860
|
|
|||
Adjusted weighted average number of common shares - diluted
|
|
78,686,943
|
|
|
78,686,943
|
|
|
78,686,943
|
|
|
|
Historical
|
|
Discontinued Operations
|
|
Pro Forma
|
||||||
Revenues
|
|
|
|
|
|
|
||||||
Gross premiums written
|
|
$
|
2,662,825
|
|
|
$
|
697,412
|
|
|
$
|
1,965,413
|
|
Net premiums written
|
|
$
|
2,514,116
|
|
|
$
|
659,066
|
|
|
$
|
1,855,050
|
|
Change in unearned premiums
|
|
(85,047
|
)
|
|
(1,509
|
)
|
|
(83,538
|
)
|
|||
Net premiums earned
|
|
2,429,069
|
|
|
657,557
|
|
|
1,771,512
|
|
|||
Other insurance revenue
|
|
11,512
|
|
|
—
|
|
|
11,512
|
|
|||
Net investment income
|
|
131,092
|
|
|
33,449
|
|
|
97,643
|
|
|||
Net realized gains on investment
|
|
2,498
|
|
|
—
|
|
|
2,498
|
|
|||
Total other-than-temporary impairment losses
|
|
(1,060
|
)
|
|
—
|
|
|
(1,060
|
)
|
|||
Total revenues
|
|
2,573,111
|
|
|
691,006
|
|
|
1,882,105
|
|
|||
Expenses
|
|
|
|
|
|
|
||||||
Net loss and loss adjustment expenses
|
|
1,633,570
|
|
|
493,084
|
|
|
1,140,486
|
|
|||
Commission and other acquisition expenses
|
|
724,197
|
|
|
165,570
|
|
|
558,627
|
|
|||
General and administrative expenses
|
|
64,872
|
|
|
15,458
|
|
|
49,414
|
|
|||
Interest and amortization expenses
|
|
29,063
|
|
|
—
|
|
|
29,063
|
|
|||
Amortization of intangible assets
|
|
2,840
|
|
|
2,840
|
|
|
—
|
|
|||
Foreign exchange and other gains
|
|
(7,753
|
)
|
|
—
|
|
|
(7,753
|
)
|
|||
Total expenses
|
|
2,446,789
|
|
|
676,952
|
|
|
1,769,837
|
|
|||
Income before income taxes
|
|
126,322
|
|
|
14,054
|
|
|
112,268
|
|
|||
Less: income tax expense (benefit)
|
|
2,038
|
|
|
2,039
|
|
|
(1
|
)
|
|||
Net income
|
|
124,284
|
|
|
12,015
|
|
|
112,269
|
|
|||
Add: net loss attributable to noncontrolling interests
|
|
192
|
|
|
—
|
|
|
192
|
|
|||
Net income attributable to Maiden
|
|
124,476
|
|
|
12,015
|
|
|
112,461
|
|
|||
Dividends on preference shares
|
|
(24,337
|
)
|
|
—
|
|
|
(24,337
|
)
|
|||
Net income attributable to Maiden common shareholders
|
|
$
|
100,139
|
|
|
$
|
12,015
|
|
|
$
|
88,124
|
|
|
|
|
|
|
|
|
||||||
Basic earnings per share attributable to Maiden common shareholders
|
|
$
|
1.36
|
|
|
$
|
0.16
|
|
|
$
|
1.20
|
|
Diluted earnings per share attributable to Maiden common shareholders
|
|
$
|
1.31
|
|
|
$
|
0.14
|
|
|
$
|
1.17
|
|
Weighted average number of common shares - basic
|
|
73,478,544
|
|
|
73,478,544
|
|
|
73,478,544
|
|
|||
Adjusted weighted average number of common shares - diluted
|
|
85,638,235
|
|
|
85,638,235
|
|
|
85,638,235
|
|