Company: KG
Filing Date: 2025-11-26
Form Type: 8-K
Source: 0001628280-25-054184
Chunk: 0

Company: Kestrel Group Ltd
Filing Date: 2025-11-26
Form: 8-K
Item: Item 8.01
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Item 8.01      Other Events.  

On November 26, 2025, the Company reported that a subsidiary of Genesis Legacy Solutions, Inc. (“ GLS”), pursuant to the terms of the reinsurance contract, demanded and is currently engaged in an arbitration with one of its ceding companies. Under the subject reinsurance agreement, GLS provides the ceding company in question with (i) reinsurance premium protection (“ RPP”) coverage with aggregate limits of approximately $25.0 million, and (ii) adverse development coverage (“ ADC”) with remaining aggregate limits of $25.5 million.

GLS is asserting that the cedant has committed multiple breaches of the reinsurance agreement, along with other material misrepresentations. Based on these assertions, GLS is seeking full rescission of the reinsurance agreement and related relief, including the ability to recoup losses previously paid, and has denied payment of certain invoices for contractual performance pending the outcome of this arbitration.

GLS has previously paid net losses of $10.8 million related to the RPP coverage. GLS has not paid any losses subject to the ADC coverage of the reinsurance agreement in question. As of September 30, 2025, GLS has liabilities of $4.0 million subject to the RPP coverage and $7.5 million in reserves for the ADC coverage. GLS received premiums totaling $9.7 million and $9.8 million for the RPP and ADC coverages, respectively.

GLS is vigorously pursuing its claims for rescission and recovery of amounts previously paid. The matter is currently proceeding in arbitration, and an arbitration hearing has now been completed with a decision likely in the first quarter of 2026. The cedant disputes GLS assertions, denying that it breached the agreement, and seeks to continue the contract in full force.

The outcome of the arbitration is inherently uncertain. If GLS is successful, it may be entitled to recover up to $10.0 million in losses previously paid and may be relieved of its remaining obligations under the reinsurance agreement in addition to other requested relief. If GLS is unsuccessful, GLS may be required to continue performing under the contract, including potentially paying additional amounts under the RPP coverage, subject to a cap, and being liable for additional amounts under the ADC coverage. The Company's subsidiary Maiden Reinsurance Ltd. has provided a parental guarantee to guarantee the performance and obligations of GLS as finally determined in connection with the arbitration.

At this time, the Company cannot