Company: KG
Filing Date: 2025-08-15
Form Type: 10-Q
Source: 0002055116-25-000018
Chunk: 158

Company: Kestrel Group Ltd
Filing Date: 2025-08-15
Form: 10-Q
Item: Item 1A
Chunk 158
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 Insurance Companies from AmTrust, Kestrel Group may need to raise additional capital. Kestrel Group cannot assure that it will be able to raise equity or debt financing on favorable terms and in the needed amounts, or at all. If Kestrel Group cannot obtain adequate capital, its business, financial condition, results of operations and prospects could be materially adversely affected.

In addition, the terms of a capital raising transaction may include stringent financial and operating covenants which may restrict Kestrel Group from raising additional capital in the future.

The general lines of authority or business Kestrel Group is licensed to conduct, as well as the rates charged by Kestrel Group under the policies it writes through the AmTrust Insurance Companies, will be subject to prior regulatory approval in most of the states in which Kestrel Group operates.

Kestrel Group is impacted by the regulation of the AmTrust Insurance Companies. Admitted insurance companies are subject to various state laws that govern organization, licensing, capitalization, policy forms, rate approvals and claims handling. Since the AmTrust Insurance Companies are admitted in most of the states in which Kestrel Group operates, Kestrel Group may have 

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to obtain prior regulatory approval of general lines of authority or business it may be lacking in such states, as well as prior regulatory approval of program-specific insurance rates charged to its insureds and its clients’ insureds in such states, including any increases in the rates. The timing of such approval processes, as well as the willingness of insurance regulators to approve licensing changes or rate increases, can impact the profitability of new policies written by Kestrel Group, which in turn can cause fluctuations in Kestrel Group’s revenue and earnings. If Kestrel Group is unable to obtain approval for the requested licensing or rate changes, or if such approval is delayed, its financial condition, results of operations and liquidity may be adversely affected.

Even if the combination qualifies as a transaction described in Section 351 of the Code, a U.S. Holder of Maiden shares may still recognize gain as a result of the first merger if Maiden is or was classified as a passive foreign investment company (“PFIC”) for any taxable year during which a U.S. Holder held Maiden shares.

Pursuant to Section 1291(f) of the Code, to the extent provided in U.S. Treasury Regulations promulgated under the Code (the “Treasury Regulations”), even if the combination qualifies as a transaction described in Section 351 of the Code, if Maiden was a