Company: KG
Filing Date: 2025-08-15
Form Type: 10-Q
Source: 0002055116-25-000018
Chunk: 438

Company: Kestrel Group Ltd
Filing Date: 2025-08-15
Form: 10-Q
Item: Item 4
Chunk 438
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 and accuracy of reports used in the revenue recognition process were ineffective;

•Information technology general controls are not sufficiently or appropriately designed or implemented over in-scope business processes and financial reporting systems for Kestrel Group LLC.

Remediation Measures

To address the material weakness described above, we have designed and implemented new and enhanced controls to ensure that: 

•in-house accounting personnel have training to ensure they have the relevant expertise related to technical accounting matters, particularly in revenue recognition; 

•there is greater segregation of duties and procedures to emphasize analysis of accounts;

•many existing and proven Maiden controls are being integrated throughout the Kestrel Group to ensure full compliance;

•Kestrel IT will be incorporated into the Maiden information technology general controls environment.

We believe the actions described above will be sufficient to remediate the identified material weakness and strengthen our internal control over financial reporting.  However, the new and enhanced controls have not operated for a sufficient amount of time to conclude that the material weakness has been remediated.  Further, the integration of the legacy Kestrel and Maiden businesses can also expose us to risks that material weaknesses may not be promptly resolved, potentially delaying completion of our consolidated internal control assessment and impairing our financial reporting. We will continue to monitor the effectiveness of these controls and will make any further changes management determines appropriate.

Our management, including our Principal Executive Officer and Principal Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide an absolute assurance that all control issues and instances of fraud, if any, within our Company have been detected.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

Except as noted below, the Company is not a party to any material legal proceedings. From time to time, the Company is subject to routine legal proceedings, including arbitration, arising in the ordinary course of business. These legal proceedings generally relate to claims asserted by or against the Company in the ordinary course of insurance or reinsurance operations. Based on the Company's opinion, the eventual outcome of these legal proceedings is not expected to have a material adverse effect on its financial