Company: KG
Filing Date: 2025-03-24
Form Type: S-4/A
Source: 0001104659-25-027242
Chunk: 76

Company: Kestrel Group Ltd
Filing Date: 2025-03-24
Form: S-4/A
Chunk 76
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 letter of credit in the amount of $445.0 million to AmTrust under the Loss Portfolio Transfer and Adverse Development Cover Agreement (“LPT/ADC Agreement”) with Enstar Group Limited (“Enstar”) on July 31, 2019, pursuant to which Cavello assumed the loss reserves as of December 31, 2018 associated with a quota share reinsurance agreement between certain insurance subsidiaries of Maiden and AmTrust that went in run-off effective January 1, 2019, subject to additional collateral funding requirements. As of December 31, 2024, the amount of collateral required was $484.7 million. Maiden’s reinsurers may not pay losses in a timely fashion, or at all. Either of these events would increase the combined company’s costs and could have a material adverse effect on the combined company’s business, financial condition, results of operations and prospects.

The failure of any of the loss limitation methods the combined company has employed or could employ in the future could have a material adverse effect on its results of operations or financial condition.

The combined company seeks to limit loss exposure through loss limitation provisions in policies it writes, such as limitations on the amount of losses that can be claimed under a policy, limitations or exclusions from coverage and provisions relating to choice of forum, which are intended to ensure that the combined company’s policies are legally interpreted as intended. These contractual provisions may not be enforceable in the manner expected and disputes relating to coverage may not be resolved in the combined company’s favor. If the loss limitation provisions in the policies are not enforceable or disputes arise concerning the application of such provisions, the losses that the combined company incurs could be materially higher than expected and the combined company’s financial condition and results of operations could be adversely affected.

Maiden’s investments in alternative investments and its investments in joint ventures and/or entities accounted for using the equity method may be illiquid and volatile in terms of value and returns, which could negatively affect the combined company’s investment income and liquidity.

In addition to fixed maturity securities, Maiden has invested in alternative investments such as hedge funds, fixed income funds, equity funds, privately held investments, private equity and private credit funds and co-investments, real estate funds and co-investments and other alternative investments. During 2024, Maiden decreased the amount allocated to such investments, and at December 31, 2024, approximately 48% of its total cash and investments were categorized as equity securities, other investments and equity method investments on its consolidated