UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549


FORM
10-Q





(Mark
One)




xQUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934





For the
quarterly period ended March 31, 2009





oTRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934





For the
transition period from _________ to _________





Commission
file no. 001-33143





Maiden
Holdings, Ltd.





(Exact
name of registrant as specified in its charter)








Bermuda
                        (State
      or other jurisdiction of
                        incorporation
      or organization)
                      04-3106389
                        (IRS
      Employer Identification No.)48 Par-la-Ville Road, Suite 1141
      HM11
                        (Address
      of principal executive offices)
                      HM11
                        (Zip
      Code)(441) 292-7090
                        (Registrant’s
      telephone number, including area
code)





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes xNo o





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the
preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files). Yes o    No o




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.




Large
      accelerated filer o
                  Accelerated
      filer oNon-accelerated
      filer x(Do
      not check if a smaller reporting company)
                  Smaller
      reporting company o





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Securities Exchange Act). Yes oNo x




As of May
14, 2009, the Registrant had one class of Common Stock ($.01 par
value),


of which
70,287,664,shares were issued and
outstanding.









INDEX





PagePART
      I
                      
                      FINANCIAL
      INFORMATIONItem
      1.
                      
                      Financial
      Statements:Condensed
      Consolidated Balance Sheets as of March 31, 2009 (unaudited) and December
      31, 2008
                      
                      3Condensed
      Consolidated Statement of Income for the three months ended March 31, 2009
      and 2008 (unaudited)
                      
                      4Condensed
      Consolidated Statement of Cash Flows for the three months ended March 31,
      2009 and 2008 (unaudited)
                      
                      5Condensed
      Consolidated Statement of Changes in Shareholders’ Equity for the three
      months ended March 31, 2009 and 2008 (unaudited)
                      
                      6Notes
      to Condensed Consolidated Financial Statements
                      
                      7Item
      2.
                      
                      Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                      
                      21Item
      3.
                      
                      Quantitative
      and Qualitative Disclosures About Market Risk
                      
                      29Item
      4.
                      
                      Controls
      and Procedures
                      
                      30PART
      II
                      
                      OTHER
      INFORMATIONItem
      1.
                      
                      Legal
      Proceedings
                      
                      31Item
      2.
                      
                      Unregistered
      Sales of Equity Securities and Use of Proceeds
                      
                      31Item
      6.
                      
                      Exhibits
                      
                      31Signatures




2





PART 1 -
FINANCIAL INFORMATION




Item 1.
Financial Statements







MAIDEN HOLDINGS,
LTD.


CONDENSED
CONSOLIDATED BALANCE SHEETS


(in
thousands (000’s), except per share data)




(unaudited)March
      31, 2009
                                              
                                              
                                              December
      31, 2008AssetsFixed
      maturities, available-for-sale, at fair value (Amortized cost 2009:
      $1,279,902;  2008: $1,163,926)
                                              
                                              $
                                              1,219,451
                                              
                                              
                                              $
                                              1,119,955Other
      investments, at fair value (Cost 2009: $5,919 ; 2008:
      $5,819)
                                              
                                              
                                              5,386
                                              
                                              
                                              
                                              5,291Total
      investments
                                              
                                              
                                              1,224,837
                                              
                                              
                                              
                                              1,125,246Cash
      and cash equivalents
                                              
                                              
                                              95,193
                                              
                                              
                                              
                                              131,897Restricted
      cash and cash equivalents
                                              
                                              
                                              362,583
                                              
                                              
                                              
                                              409,277Accrued
      investment income
                                              
                                              
                                              9,453
                                              
                                              
                                              
                                              10,293Reinsurance
      balances receivable (includes $58,057and $48,837 from
      related party in 2009 and 2008, respectively - see
      note 10)
                                              
                                              
                                              182,052
                                              
                                              
                                              
                                              71,895Loan
      to related party (see note 10)
                                              
                                              
                                              167,975
                                              
                                              
                                              
                                              167,975Deferred
      acquisition costs (includes $80,078 and $80,455 from related party in 2009
      and 2008, respectively - see note 9)
                                              
                                              
                                              152,616
                                              
                                              
                                              
                                              104,470Other
      assets
                                              
                                              
                                              7,647
                                              
                                              
                                              
                                              2,617Intangible
      assets
                                              
                                              
                                              53,582
                                              
                                              
                                              
                                              55,147Goodwill
                                              
                                              
                                              49,747
                                              
                                              
                                              
                                              49,747Total
      Assets
                                              
                                              $
                                              2,305,685
                                              
                                              
                                              $
                                              2,128,564Liabilities
      and Shareholders’ EquityLiabilitiesReserve
      for losses and loss expenses (includes $91,442and $69,646 from
      related party in 2009 and 2008, respectively- see note 10)
                                              
                                              $
                                              925,816
                                              
                                              
                                              $
                                              897,656Unearned
      premiums (includes $245,069 and $245,742 from  related parties
      in 2009 and 2008, respectively- see note 10)
                                              
                                              
                                              570,936
                                              
                                              
                                              
                                              444,479Accrued
      expenses and other liabilities
                                              
                                              
                                              46,489
                                              
                                              
                                              
                                              44,024Securities
      sold under agreements to repurchase, at contract value
                                              
                                              
                                              -
                                              
                                              
                                              
                                              232,646Trust
      preferred securities – related parties (see note 6)
                                              
                                              
                                              215,084
                                              
                                              
                                              
                                              -Total
      Liabilities
                                              
                                              
                                              1,758,325
                                              
                                              
                                              
                                              1,618,805Commitments and
      ContingenciesShareholders’
      Equity:Common
      shares, ($0.01 par
      value;71,250,000 and 59,550,000 shares issued in 2009 and 2008
      respectively; 70,287,664 and 58,587,664 shares outstanding in 2009 and
      2008 respectively)
                                              
                                              
                                              713
                                              
                                              
                                              
                                              596Additional
      paid-in capital
                                              
                                              
                                              575,606
                                              
                                              
                                              
                                              530,519Accumulated
      other comprehensive loss
                                              
                                              
                                              (60,985
                                              )
                                              
                                              
                                              (44,499
                                              )Retained
      earnings
                                              
                                              
                                              35,827
                                              
                                              
                                              
                                              26,944Treasury
      Shares, at cost (2009
      and 2008:962,336  shares)
                                              
                                              
                                              (3,801
                                              )
                                              
                                              
                                              (3,801
                                              )Total
      Shareholders’ Equity
                                              
                                              
                                              547,360
                                              
                                              
                                              
                                              509,759Total
      Liabilities and Shareholders’ Equity
                                              
                                              $
                                              2,305,685
                                              
                                              
                                              $
                                              2,128,564





See
accompanying notes to the unaudited condensed consolidated financial
statements.





3





MAIDEN HOLDINGS,
LTD.


CONDENSED
CONSOLIDATED STATEMENT OF INCOME


(in
thousands (000’s), except per share data)


(Unaudited)





For
      theThree MonthsEndedMarch 31, 2009
                                          
                                          
                                          For
      theThree MonthsEndedMarch 31, 2008Revenues:Premium
      income:Net
      premiums written
                                          
                                          $
                                          336,548
                                          
                                          
                                          $
                                          102,432Change
      in unearned premiums
                                          
                                          
                                          (126,456
                                          )
                                          
                                          
                                          (37,127
                                          )Net
      earned premium
                                          
                                          
                                          210,092
                                          
                                          
                                          
                                          65,305Net
      investment income
                                          
                                          
                                          14,259
                                          
                                          
                                          
                                          7,609Net
      realized investment gains (losses)
                                          
                                          
                                          (1,930
                                          )
                                          
                                          
                                          125Total
      revenues
                                          
                                          
                                          222,421
                                          
                                          
                                          
                                          73,039Expenses:Loss
      and loss adjustment expenses
                                          
                                          
                                          146,288
                                          
                                          
                                          
                                          37,836Commission
      and other acquisition expenses
                                          
                                          
                                          46,631
                                          
                                          
                                          
                                          21,261Other  operating
      expenses
                                          
                                          
                                          7,535
                                          
                                          
                                          
                                          1,426Trust
      preferred interest – related parties
                                          
                                          
                                          7,090
                                          
                                          
                                          
                                          -Amortization
      of intangible assets
                                          
                                          
                                          1,564
                                          
                                          
                                          
                                          -Foreign
      exchange loss
                                          
                                          
                                          213
                                          
                                          
                                          
                                          -Total
      expenses
                                          
                                          
                                          209,321
                                          
                                          
                                          
                                          60,523Net
      income
                                          
                                          $
                                          13,100
                                          
                                          
                                          $
                                          12,516Basic
      and diluted earnings per common share
                                          
                                          $
                                          0.19
                                          
                                          
                                          $
                                          0.21Dividends
      declared per common share
                                          
                                          $
                                          0.06
                                          
                                          
                                          $
                                          0.05





See
accompanying notes to the unaudited condensed consolidated financial
statements.





4





MAIDEN HOLDINGS,
LTD.


CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS


(in
thousands (000’s), except per share data)


(Unaudited)





For
      theThree MonthsEndedMarch 31, 2009
                                            
                                            
                                            For
      theThree MonthsEndedMarch 31, 2008Cash
      flows from operating activities:Net
      income
                                            
                                            $
                                            13,100
                                            
                                            
                                            $
                                            12,516Adjustments
      to reconcile net income to net cash provided by operating activities
      :Depreciation
      and amortization of intangibles
                                            
                                            
                                            1,636
                                            
                                            
                                            
                                            5Net
      realized loss (gain) on sales of investments
                                            
                                            
                                            1,930
                                            
                                            
                                            
                                            (125
                                            )Foreign
      exchange loss on revaluation
                                            
                                            
                                            
                                            
                                            
                                            
                                            -Amortization
      of share-based compensation expense, bond premium and discount and trust
      preferred securities discount
                                            
                                            
                                            (927
                                            )
                                            
                                            
                                            107Changes
      in assets - (increase) decrease:Reinsurance
      balances receivable
                                            
                                            
                                            (110,157
                                            )
                                            
                                            
                                            (51,990
                                            )Accrued
      investment income
                                            
                                            
                                            840
                                            
                                            
                                            
                                            (2,008
                                            )Deferred
      commission and other acquisition costs
                                            
                                            
                                            (48,146
                                            )
                                            
                                            
                                            (14,459
                                            )Other
      assets
                                            
                                            
                                            (40
                                            )
                                            
                                            
                                            7Changes
      in liabilities – increase (decrease):Accrued
      expenses and other liabilities
                                            
                                            
                                            1,763
                                            
                                            
                                            
                                            (22
                                            )Loss
      and loss adjustment expense reserves
                                            
                                            
                                            28,160
                                            
                                            
                                            
                                            23,140Unearned
      premiums
                                            
                                            
                                            126,457
                                            
                                            
                                            
                                            37,127Net
      cash provided by operating activities
                                            
                                            
                                            14,616
                                            
                                            
                                            
                                            4,298Cash
      flows from investing activities:Purchases
      of investments:Purchases
      of fixed-maturity securities
                                            
                                            
                                            (222,323
                                            )
                                            
                                            
                                            (156,564
                                            )Purchases
      of other investments
                                            
                                            
                                            (138
                                            )
                                            
                                            
                                            (23
                                            )Sale
      of investments:Proceeds
      from sales of fixed-maturity securities
                                            
                                            
                                            85,769
                                            
                                            
                                            
                                            58,921Proceeds
      from maturities and calls of fixed-maturity securities
                                            
                                            
                                            19,423
                                            
                                            
                                            
                                            -Proceeds
      from redemption of other investments
                                            
                                            
                                            22
                                            
                                            
                                            
                                            -Increase
      in restricted cash
                                            
                                            
                                            46,694
                                            
                                            
                                            
                                            -Purchase
      of furniture and equipment
                                            
                                            
                                            (381
                                            )
                                            
                                            
                                            (40
                                            )Net
      cash used in investing activities
                                            
                                            
                                            (70,934
                                            )
                                            
                                            
                                            (97,706
                                            )Cash
      flows from financing activities:Repurchase
      agreements, net
                                            
                                            
                                            (232,646
                                            )
                                            
                                            
                                            102,172Common
      share issuance
                                            
                                            
                                            117
                                            
                                            
                                            
                                            -Trust
      preferred securities issuance
                                            
                                            
                                            260,000
                                            
                                            
                                            
                                            -Trust
      preferred securities issuance cost
                                            
                                            
                                            (4,342
                                            )
                                            
                                            
                                            -Dividend
      paid
                                            
                                            
                                            (3,515
                                            )
                                            
                                            
                                            (1,489
                                            )Net
      cash provided by financing activities
                                            
                                            
                                            19,614
                                            
                                            
                                            
                                            100,683Net
      (decrease) increase in cash and cash equivalents
                                            
                                            
                                            (36,704
                                            )
                                            
                                            
                                            7,275Cash
      and cash equivalents, beginning of period
                                            
                                            
                                            131,897
                                            
                                            
                                            
                                            35,729Cash
      and cash equivalents, end of period
                                            
                                            $
                                            95,193
                                            
                                            
                                            $
                                            43,004




Supplemental
      information about non-cash investing and financing
    activitiesDiscount
      on Trust preferred securities
                
                $
                (44,928
                )
                
                $
                -Additional
      paid in Capital
                
                
                44,928
                
                
                
                -





See accompanying notes to the
unaudited condensed consolidated financial statements.




5





MAIDEN HOLDINGS,
LTD.


CONDENSED
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY


(in thousands(000’s), exceptpershare data)


(Unaudited)





For
      the three months ended March 31, 2009
                                
                                Common
                                  Shares
                                
                                
                                Additional
                                  Paid-In
                                  Capital
                                
                                
                                Accumulated
                                  Other
                                  Comprehensive
                                  Loss
                                
                                
                                Retained
                                  Earnings
                                
                                
                                Treasury
      Shares
                                
                                
                                Total
                                  Shareholders’
                                  EquityBalance
      at December 31, 2008
                                
                                $
                                596
                                
                                
                                $
                                530,519
                                
                                
                                $
                                (44,499
                                )
                                
                                $
                                26,944
                                
                                
                                $
                                (3,801
                                )
                                
                                $
                                509,759Net
      income
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                13,100
                                
                                
                                
                                -
                                
                                
                                
                                13,100Net
      unrealized losses
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                (16,486
                                )
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                (16,486
                                )Comprehensive
      loss
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                (3,386
                                )Shares
      issued, net
                                
                                
                                117
                                
                                
                                
                                44,928
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                45,045Share
      based compensation
                                
                                
                                -
                                
                                
                                
                                159
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                159Dividends
      to shareholders
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                (4,217
                                )
                                
                                
                                -
                                
                                
                                
                                (4,217
                                )Balance
      at March 31, 2009
                                
                                $
                                713
                                
                                
                                $
                                575,606
                                
                                
                                $
                                (60,985
                                )
                                
                                $
                                35,827
                                
                                
                                $
                                (3,801
                                )
                                
                                $
                                547,360











For
      the three months ended March 31, 2008
                                                                                            
                                                                                            Common
                                                                                              Shares
                                                                                            
                                                                                            
                                                                                            Additional
                                                                                              Paid-In
                                                                                              Capital
                                                                                            
                                                                                            
                                                                                            Accumulated
                                                                                              Other
                                                                                              Comprehensive
                                                                                              Loss
                                                                                            
                                                                                            
                                                                                            Retained
                                                                                              Earnings
                                                                                            
                                                                                            
                                                                                            Treasury
      Shares
                                                                                            
                                                                                            
                                                                                            Total
                                                                                              Shareholders’
                                                                                              EquityBalance
      at December 31, 2007
                                                                                            
                                                                                            $
                                                                                            596
                                                                                            
                                                                                            
                                                                                            $
                                                                                            529,647
                                                                                            
                                                                                            
                                                                                            $
                                                                                            (13,496
                                                                                            )
                                                                                            
                                                                                            $
                                                                                            20,598
                                                                                            
                                                                                            
                                                                                            $
                                                                                            -
                                                                                            
                                                                                            
                                                                                            $
                                                                                            537,345Net
      income
                                                                                            
                                                                                            
                                                                                            -
                                                                                            
                                                                                            
                                                                                            
                                                                                            -
                                                                                            
                                                                                            
                                                                                            
                                                                                            -
                                                                                            
                                                                                            
                                                                                            
                                                                                            12,516
                                                                                            
                                                                                            
                                                                                            
                                                                                            -
                                                                                            
                                                                                            
                                                                                            
                                                                                            12,516Net
      unrealized losses
                                                                                            
                                                                                            
                                                                                            -
                                                                                            
                                                                                            
                                                                                            
                                                                                            -
                                                                                            
                                                                                            
                                                                                            
                                                                                            (16,493
                                                                                            )
                                                                                            
                                                                                            
                                                                                            -
                                                                                            
                                                                                            
                                                                                            
                                                                                            -
                                                                                            
                                                                                            
                                                                                            
                                                                                            (16,493
                                                                                            )Comprehensive
      loss
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            
                                                                                            (3,977
                                                                                            )Share
      based compensation
                                                                                            
                                                                                            
                                                                                            -
                                                                                            
                                                                                            
                                                                                            
                                                                                            187
                                                                                            
                                                                                            
                                                                                            
                                                                                            -
                                                                                            
                                                                                            
                                                                                            
                                                                                            -
                                                                                            
                                                                                            
                                                                                            
                                                                                            -
                                                                                            
                                                                                            
                                                                                            
                                                                                            187Dividends
      to shareholders
                                                                                            
                                                                                            
                                                                                            -
                                                                                            
                                                                                            
                                                                                            
                                                                                            -
                                                                                            
                                                                                            
                                                                                            
                                                                                            -
                                                                                            
                                                                                            
                                                                                            
                                                                                            (2,978
                                                                                            )
                                                                                            
                                                                                            
                                                                                            -
                                                                                            
                                                                                            
                                                                                            
                                                                                            (2,978
                                                                                            )Balance
      at March 31, 2008
                                                                                            
                                                                                            
                                                                                            596
                                                                                            
                                                                                            
                                                                                            $
                                                                                            529,834
                                                                                            
                                                                                            
                                                                                            $
                                                                                            (29,989
                                                                                            )
                                                                                            
                                                                                            $
                                                                                            30,136
                                                                                            
                                                                                            
                                                                                            $
                                                                                            -
                                                                                            
                                                                                            
                                                                                            $
                                                                                            530,577




See accompanying notes to the
unaudited condensed consolidatedfinancial
statements.





6





MAIDEN HOLDINGS,
LTD.




Notes
to Unaudited Condensed Consolidated Financial Statements


(in
thousands (000’s), except per share data)


(Unaudited)




1.Basis of Presentation —
Summary of Significant Accounting Policies




The
accompanying unaudited condensed consolidated financial statements include the
accounts of Maiden Holdings, Ltd. and its subsidiaries and have been prepared in
accordance with U.S. generally accepted accounting principles (“GAAP”) for
interim financial statements and with the instructions to Form 10-Q and Article
10 of Regulation S-X as promulgated by the U.S. Securities and Exchange
Commission (“SEC”). Accordingly they do not include all of the information and
footnotes required by GAAP for complete financial statements. All significant
inter-company transactions and accounts have been eliminated in the consolidated
financial statements.




These
interim consolidated financial statements reflect all adjustments that are, in
the opinion of management, necessary for a fair presentation of the results for
the interim period and all such adjustments are of a normal recurring nature.
The results of operations for the interim period are not necessarily indicative,
if annualized, of those to be expected for the full year. The preparation
of financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.





These
unaudited condensed consolidated financial statements, including these notes,
should be read in conjunction with the Company’s audited consolidated financial
statements, and related notes thereto, included in the Company’s Annual Report
on Form 10-K for the year ended December 31, 2008.





2.
            Recent Accounting
      Pronouncements




In
April 2009, the Financial Accounting Standard Board (“FASB”) issued three
FASB Staff Positions (“FSP”) – (1) FSP FAS 115-2 and FAS 124-2 “Recognition
and Presentation of Other-Than-Temporary Impairments” (“FSP FAS 115-2”),
(2) FSP FAS 157-4 “Determining Fair Value When the Volume and Level of
Activity for the Asset or Liability Have Significantly Decreased and Identifying
Transactions That Are Not Orderly” (“FSP FAS 157-4”), and (3) FSP FAS 107-1
and APB 28-1 “Interim Disclosures about Fair Value of Financial Instruments”
(“FSP FAS 107-1”). FSP FAS 115-2 amends the other-than-temporary impairment
guidance in GAAP for debt securities to remove the requirement that a company
must have the intent and ability to hold a debt security until its anticipated
recovery, but rather, under the revised guidance, a company must recognize an
other-than-temporary impairment charge on its income statement if it intends to
sell the debt security or if it is more likely than not it will be required to
sell a debt security before the recovery of its amortized cost basis. In
addition, the new FSP FAS 115-2 also requires the recognition of an
other-than-temporary impairment charge if the present value of cash flows of a
debt security expected to be collected is less than the amortized cost basis of
the debt security. FSP FAS 115-2 is effective for interim and annual periods
ending after June 15, 2009. The Company will adopt FSP FAS 115-2 for the
period ended June 30, 2009. The Company is currently evaluating the
provisions of FSP FAS 115-2 and its potential impact on future financial
statements.   FSP FAS 157-4 provides additional guidance for
estimating fair value in accordance with Financial Accounting Standard
No. 157 “Fair Value Measurements” (“SFAS 157”), when the volume and level
of activity for an asset or liability has significantly decreased. FSP FAS 157-4
provides a list of non-exhaustive factors a company should consider in
determining whether there has been a significant decrease in the volume and
level of activity for an asset or liability when compared with normal market
activity for that asset or liability (or similar assets or liabilities). If a
company determines there has been a significant decrease in the volume and level
of activity of an asset or liability, further analysis of the transactions or
quoted prices is needed, and a significant adjustment to the transactions or
quoted prices may be necessary to estimate the fair value in accordance with
SFAS 157. FSP FAS 157-4 also provides additional guidance on identifying
circumstances that indicate a transaction is not orderly, and therefore,
excluded as an observable input in the determination of fair value. FSP FAS
157-4 is effective for interim and annual periods ending after June 15,
2009. The Company will adopt FSP FAS 157-4 for the period ended June 30, 2009.
The Company is currently evaluating the provisions of FSP FAS 157-4 and its
potential impact on future financial statements. FSP FAS 107-1 requires
publicly traded companies to include disclosures about the fair value of its
financial instruments whenever it issues its interim financial statements. FSP
FAS 107-1 is effective for interim and annual periods ending after June 15,
2009. The Company will include the required disclosures about the fair value of
its financial instruments in its interim financial statements starting with the
period ended June 30, 2009.





In
addition, in April 2009, the SEC staff issued Staff Accounting Bulletin
(“SAB”) 111 that amended Topic 5.M. “Other Than Temporary Impairment of Certain
Investments in Debt and Equity Securities”. This SAB amends Topic 5.M. solely to
include the staff’s view on equity securities and exclude debt securities from
its scope. By excluding debt securities from the scope of Topic 5.M., companies
are no longer required to assess if they have the intent and ability to hold
available-for-sale debt securities until anticipated recovery to determine if
there is an other-than-temporary impairment charge.




7




MAIDEN HOLDINGS,
LTD.




Notes
to Unaudited Condensed Consolidated Financial Statements


(in
thousands (000’s), except per share data)


(Unaudited)





3.
            Investments





(a)
              Fixed
      Maturities and Other
Investments





The
original or amortized cost, estimated fair value and gross unrealized gains and
losses of available-for-sale fixed maturities and other investments as of March
31, 2009 and December 31, 2008 are as follows:




March
      31, 2009
                              
                              Original
      or
                                amortized
                                cost
                              
                              
                              Gross
                                unrealized
                                gains
                              
                              
                              Gross
                                unrealized
                                losses
                              
                              
                              Fair
                                valueFixed
      Maturities:U.S.
      – treasury bonds
                              
                              
                              33,365
                              
                              
                              
                              620
                              
                              
                              
                              (235
                              )
                              
                              
                              33,750U.S.
      Agency - mortgage backed securities
                              
                              $
                              747,243
                              
                              
                              $
                              25,048
                              
                              
                              $
                              (3,455
                              )
                              
                              $
                              768,836Corporate
      fixed maturities
                              
                              
                              488,114
                              
                              
                              
                              3,815
                              
                              
                              
                              (86,305
                              )
                              
                              
                              405,624Municipalities
                              
                              
                              11,180
                              
                              
                              
                              61
                              
                              
                              
                              -
                              
                              
                              
                              11,241Total
      available for sale fixed maturities
                              
                              
                              1,279,902
                              
                              
                              
                              29,544
                              
                              
                              
                              (89,995
                              )
                              
                              
                              1,219,451Other
      investments
                              
                              
                              5,919
                              
                              
                              
                              -
                              
                              
                              
                              (533
                              )
                              
                              
                              5,386Total
      investments
                              
                              $
                              1,285,821
                              
                              
                              $
                              29,544
                              
                              
                              $
                              (90,528
                              )
                              
                              $
                              1,224,837





December 31,
      2008
                                  
                                  Original
      or
                                    amortized
                                    cost
                                  
                                  
                                  Gross
                                    unrealized
      gains
                                  
                                  
                                  Gross
                                    unrealized
                                    losses
                                  
                                  
                                  Fair
                                    ValueFixed
      Maturities:U.S.
      – treasury bonds
                                  
                                  $
                                  37,782
                                  
                                  
                                  $
                                  775
                                  
                                  
                                  $
                                  (30
                                  )
                                  
                                  $
                                  38,527U.S.
      Agency - mortgage backed securities
                                  
                                  
                                  756,023
                                  
                                  
                                  
                                  21,178
                                  
                                  
                                  
                                  (5,302
                                  )
                                  
                                  
                                  771,899Corporate
      fixed maturities
                                  
                                  
                                  370,121
                                  
                                  
                                  
                                  2,320
                                  
                                  
                                  
                                  (62,912
                                  )
                                  
                                  
                                  309,529Total
      available for sale fixed maturities
                                  
                                  
                                  1,163,926
                                  
                                  
                                  
                                  24,273
                                  
                                  
                                  
                                  (68,244
                                  )
                                  
                                  
                                  1,119,955Other
      investments
                                  
                                  
                                  5,819
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (528
                                  )
                                  
                                  
                                  5,291Total
      investments
                                  
                                  $
                                  1,169,745
                                  
                                  
                                  $
                                  24,273
                                  
                                  
                                  $
                                  (68,772
                                  )
                                  
                                  $
                                  1,125,246





The
following tables summarize fixed maturities in an unrealized loss position and
the aggregate fair value and gross unrealized loss by length of time the
security has continuously been in an unrealized loss position:





Less
      than 12 months
                                                          
                                                          
                                                          12
      months or more
                                                          
                                                          
                                                          TotalMarch 31,
      2009
                                                          
                                                          Fair
                                                            value
                                                          
                                                          
                                                          Unrealized
                                                            losses
                                                          
                                                          
                                                          Fair
                                                            value
                                                          
                                                          
                                                          Unrealized
                                                            Losses
                                                          
                                                          
                                                          Fair
                                                            value
                                                          
                                                          
                                                          Unrealized
                                                            lossesAvailable-for-sale
      securities:U.S.
      – treasury bonds
                                                          
                                                          $
                                                          3,017
                                                          
                                                          
                                                          
                                                          (235
                                                          )
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          $
                                                          3,017
                                                          
                                                          
                                                          
                                                          (235
                                                          )U.S.
      Agency mortgage backed securities
                                                          
                                                          
                                                          14,905
                                                          
                                                          
                                                          
                                                          (488
                                                          )
                                                          
                                                          
                                                          129,954
                                                          
                                                          
                                                          
                                                          (2,967
                                                          )
                                                          
                                                          
                                                          144,859
                                                          
                                                          
                                                          
                                                          (3,455
                                                          )Corporate
      fixed maturities
                                                          
                                                          
                                                          110,637
                                                          
                                                          
                                                          
                                                          (24,967
                                                          )
                                                          
                                                          
                                                          180,741
                                                          
                                                          
                                                          
                                                          (61,338
                                                          )
                                                          
                                                          
                                                          291,378
                                                          
                                                          
                                                          
                                                          (86,305
                                                          )128,559
                                                          
                                                          
                                                          
                                                          (25,690
                                                          )
                                                          
                                                          
                                                          310,695
                                                          
                                                          
                                                          
                                                          (64,305
                                                          )
                                                          
                                                          
                                                          436,237
                                                          
                                                          
                                                          
                                                          (89,995
                                                          )Other
      investments
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          $
                                                          4,679
                                                          
                                                          
                                                          
                                                          (533
                                                          )
                                                          
                                                          $
                                                          4,679
                                                          
                                                          
                                                          
                                                          (533
                                                          )Total
      temporarily impaired  available-for-sale securities and other
      investments
                                                          
                                                          $
                                                          128,559
                                                          
                                                          
                                                          $
                                                          (25,690
                                                          )
                                                          
                                                          $
                                                          315,374
                                                          
                                                          
                                                          $
                                                          (64,838
                                                          )
                                                          
                                                          $
                                                          443,933
                                                          
                                                          
                                                          $
                                                          (90,528
                                                          )





8





MAIDEN HOLDINGS,
LTD.




Notes
to Unaudited Condensed Consolidated Financial Statements


(in
thousands (000’s), except per share data)


(Unaudited)





3.
            Investments –
      (continued)





As of
March 31, 2009, there were approximately 53 securities in an unrealized loss
position with a fair value of $443,933. Of these securities, there are 20
securities that have been in an unrealized loss position for 12 months or
greater with a value of $315,374.





Less
      than 12 months
                          
                          
                          12
      months or more
                          
                          
                          TotalDecember 31,
      2008
                          
                          Fair
                            value
                          
                          
                          Unrealized
                            losses
                          
                          
                          Fair
                            value
                          
                          
                          Unrealized
                            Losses
                          
                          
                          Fair
                            value
                          
                          
                          Unrealized
                            lossesAvailable-for-sale
      securities:U.S.
      – treasury bonds
                          
                          $
                          6,521
                          
                          
                          $
                          (30
                          )
                          
                          
                          -
                          
                          
                          $
                          -
                          
                          
                          $
                          6,521
                          
                          
                          
                          (30
                          )U.S.
      Agency mortgage backed securities
                          
                          
                          148,803
                          
                          
                          
                          (5,302
                          )
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          148,803
                          
                          
                          
                          (5,302
                          )Corporate
      fixed maturities
                          
                          
                          104,279
                          
                          
                          
                          (13,707
                          )
                          
                          
                          153,055
                          
                          
                          
                          (49,205
                          )
                          
                          
                          257,334
                          
                          
                          
                          (62,912
                          )259,603
                          
                          
                          
                          (19,039
                          )
                          
                          
                          153,055
                          
                          
                          
                          (49,205
                          )
                          
                          
                          412,658
                          
                          
                          
                          (68,244
                          )Other
      investments
                          
                          $
                          4,722
                          
                          
                          $
                          (528
                          )
                          
                          $
                          -
                          
                          
                          $
                          -
                          
                          
                          $
                          4,722
                          
                          
                          
                          (528
                          )Total
      temporarily impaired  available-for-sale securities and other
      investments
                          
                          $
                          264,325
                          
                          
                          $
                          (19,567
                          )
                          
                          $
                          153,055
                          
                          
                          $
                          (49,205
                          )
                          
                          $
                          417,380
                          
                          
                          $
                          (68,772
                          )





As of
December 31, 2008, there were approximately 40 securities in an unrealized loss
position with a fair value of $417,380. Of these securities, there are 10
securities that have been in an unrealized loss position for 12 months or
greater with a value of $153,055.





Other-than-Temporary
Impairments (“OTTI”)





We review
our investment portfolio for impairment on a quarterly basis. Impairment of
investments results in a charge to operations when a fair value decline below
cost is deemed to be other-than-temporary. As of March 31, 2009, we reviewed our
portfolio to evaluate the necessity of recording impairment losses for
other-than-temporary declines in the fair value of
investments.  During the quarter ended March 31, 2009, theCompany recognized no
other than temporary impairment fixed income securities and other investments
(2008: $-). Based on our qualitative and quantitative OTTI review of each
asset class within our fixed maturity portfolio, the unrealized losses on fixed
maturities at March 31, 2009, were primarily due to widening of credit
spreads relating to the market illiquidity, rather than credit events. Because
we have the ability and intent to hold these securities until a recovery of fair
value to amortized cost, we currently believe it is probable that we will
collect all amounts due according to their respective contractual terms.
Therefore we do not consider these fixed maturities to be other-than-temporarily
impaired at March 31, 2009.





(b)
            Restricted
      Cash and Investments





We are required to maintain assets on
deposit to support our reinsurance operationsand to serve as collateral for our
reinsurance liabilities under various reinsurance agreements. The assets on deposit are available to
settle reinsurance liabilities. We also utilize trust accounts to collateralize
business with our reinsurance counterparties. These trust accounts generally
take the place of letter of credit requirements. The assets in trust as
collateral are primarilycash andhighly rated fixed maturity securities.
The fair value of our restricted assets was as follows:




March 31,
    2009
                                  
                                  
                                  December 31,
      2008Restrictedcash-third party
      agreements
                                  
                                  $
                                  268,453
                                  
                                  
                                  $
                                  335,201Restrictedcash-relatedparty
      agreements
                                  
                                  
                                  94,130
                                  
                                  
                                  
                                  74,076Total restricted
      cash
                                  
                                  
                                  362,583
                                  
                                  
                                  
                                  409,277Restrictedinvestments-in Trust for third party
      agreementsat fair
      value(Amortized
      cost:2009 -
      $759,624; 2008 -$701,973)
                                  
                                  
                                  703,729
                                  
                                  
                                  
                                  660,388Restrictedinvestments-in Trust forrelatedparty agreementsat fair value(Amortized cost:2009 - $58,819; 2008 -$1,

 200)
                                  
                                  
                                  59,264
                                  
                                  
                                  
                                  1,203Total restricted
      investments
                                  
                                  
                                  762,994
                                  
                                  
                                  
                                  661,591Total restricted cash and
      investments
                                  
                                  $
                                  1,125,577
                                  
                                  
                                  $
                                  1,070,868





9





MAIDEN HOLDINGS,
LTD.




Notes
to Unaudited Condensed Consolidated Financial Statements


(in
thousands (000’s), except per share data)


(Unaudited)





4.
            Fair
      Value of Financial Instruments




The
Company’s estimates of fair value for financial assets and financial liabilities
are based on the framework established in SFAS 157. The framework is based on
the inputs used in valuation and gives the highest priority to quoted prices in
active markets and requires that observable inputs be used in the valuations
when available. The disclosure of fair value estimates in the SFAS 157 hierarchy
is based on whether the significant inputs into the valuation are observable. In
determining the level of the hierarchy in which the estimate is disclosed, the
highest priority is given to unadjusted quoted prices in active markets and the
lowest priority to unobservable inputs that reflect the Company’s significant
market assumptions. The three levels of the hierarchy are as
follows:





·
            Level
      1- Unadjusted quoted market prices for identical assets or
      liabilities in active markets that the Company has the ability to
      access.





·
            Level
      2- Quoted prices for similar assets or liabilities in active
      markets; quoted prices for identical or similar assets or liabilities in
      inactive markets; or valuations based on models where the significant
      inputs are observable (e.g., interest rates, yield curves, prepayment
      speeds, default rates, loss severities, etc.) or can be corroborated by
      observable market data.





·
            Level
      3- Valuations based on models where significant inputs are not
      observable. The unobservable inputs reflect the Company’s own assumptions
      about the assumptions that market participants would
  use.





In
accordance with SFAS 157, the Company determines fair value based on the price
that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. The
following section describes the valuation methodologies used by the Company to
measure assets and liabilities at fair value, including an indication of the
level within the fair value hierarchy in which each asset or liability is
generally classified.





Investments available for
sale. Investments available for sale are recorded at fair value on a
recurring basis and include fixed maturities and securities sold under
agreements to repurchase. Fair value of investments is measured based upon
quoted prices in active markets, if available. If quoted prices in active
markets are not available, fair values are measured by an independent pricing
service that utilizes valuation techniques based upon observable market data.
Level 1 investments include those traded on an active exchange, such as the
NASDAQ. Since fixed maturities other than U.S. treasury securities generally do
not trade on a daily basis, the independent pricing service prepares estimates
of fair value measurements for these securities using its proprietary pricing
applications which include available relevant market information. These
investments are classified as Level 2 investments and include obligations of
U.S. government agencies, municipals and corporate debt securities.




Other investments. Other
investments consist primarily of hedge funds where the fair value estimate is
determined by an external fund manager based on recent filings, operating
results, balance sheet stability, growth and other business and market sector
fundamentals. Due to the significant unobservable inputs in these valuations,
the Company includes other investments in the amount disclosed in Level
3.




a)
              Fair Value
      Hierarchy




The
following table presents the level within the fair value hierarchy at which the
Company’s financial assets and financial liabilities are measured on a recurring
basis as of March 31, 2009 and December 31, 2008:





March
      31, 2009
                                            
                                            Quoted Prices in
                                              Active Markets
                                              for
      Identical
                                              Assets (Level
      1)
                                            
                                            
                                            Significant
                                              Other Observable
                                              Inputs (Level
      2)
                                            
                                            
                                            Significant
                                              Unobservable
                                              Inputs
                                              (Level 3)
                                            
                                            
                                            Total Fair
                                              ValueAssetsFixed
      maturities
                                            
                                            $
                                            33,750
                                            
                                            
                                            $
                                            1,185,701
                                            
                                            
                                            $
                                            -
                                            
                                            
                                            $
                                            1,219,451Other
      investments
                                            
                                            
                                            -
                                            
                                            
                                            
                                            -
                                            
                                            
                                            
                                            5,386
                                            
                                            
                                            
                                            5,386Total
                                            
                                            $
                                            33,750
                                            
                                            
                                            $
                                            1,185,701
                                            
                                            
                                            $
                                            5,386
                                            
                                            
                                            $
                                            1,224,837As a percentage of total
      assets
                                            
                                            
                                            1.5
                                            %
                                            
                                            
                                            51.4
                                            %
                                            
                                            
                                            0.2
                                            %
                                            
                                            
                                            53.1
                                            %




10





MAIDEN HOLDINGS,
LTD.




Notes
to Unaudited Condensed Consolidated Financial Statements


(in
thousands (000’s), except per share data)


(Unaudited)





4.
            Fair
      Value of Financial Instruments
(continued)




December 31,
      2008
                                                  
                                                  Quoted Prices in
                                                    Active Markets
                                                    for
      Identical
                                                    Assets (Level
      1)
                                                  
                                                  
                                                  Significant
                                                    Other Observable
                                                    Inputs (Level
      2)
                                                  
                                                  
                                                  Significant
                                                    Unobservable
                                                    Inputs
                                                    (Level 3)
                                                  
                                                  
                                                  Total Fair
                                                    ValueAssetsFixed
      maturities
                                                  
                                                  $
                                                  38,527
                                                  
                                                  
                                                  $
                                                  1,081,428
                                                  
                                                  
                                                  $
                                                  -
                                                  
                                                  
                                                  $
                                                  1,119,955Other
      investments
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  
                                                  5,291
                                                  
                                                  
                                                  
                                                  5,291Total
                                                  
                                                  $
                                                  38,527
                                                  
                                                  
                                                  $
                                                  1,081,428
                                                  
                                                  
                                                  $
                                                  5,291
                                                  
                                                  
                                                  $
                                                  1,125,246As a percentage of total
      assets
                                                  
                                                  
                                                  1.8
                                                  %
                                                  
                                                  
                                                  50.8
                                                  %
                                                  
                                                  
                                                  0.2
                                                  %
                                                  
                                                  
                                                  52.8
                                                  %LiabilitiesSecurities sold under agreements
      to repurchase
                                                  
                                                  $
                                                  -
                                                  
                                                  
                                                  $
                                                  232,646
                                                  
                                                  
                                                  $
                                                  -
                                                  
                                                  
                                                  $
                                                  232,646As a percentage of totalliabilities
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  
                                                  14.4
                                                  %
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  
                                                  14.4
                                                  %




b)
            Level 3 Financial
      Instruments




The following table presents changes in
Level 3 for our financial instruments measured at fair value on a recurring
basis forthe three months
ended March 31, 2009 and 2008:




Other
      Investments:
                          
                          March
      31, 2009
                          
                          
                          March
      31, 2008Balance at beginning of
      period
                          
                          $
                          5,291
                          
                          
                          $
                          15,656Change in net unrealizedlosses– included in other comprehensive
      loss
                          
                          
                          (6
                          )
                          
                          
                          (3,296
                          )Net realizedlosses– included in net
      income
                          
                          
                          (15
                          )
                          
                          
                          -Net
    purchases
                          
                          
                          116
                          
                          
                          
                          23Net transfers in (out of) of Level
      3
                          
                          
                          -
                          
                          
                          
                          -Balance at end of
      period
                          
                          $
                          5,386
                          
                          
                          $
                          12,383




11





MAIDEN HOLDINGS,
LTD.




Notes
to Unaudited Condensed Consolidated Financial Statements


(in
thousands (000’s), except per share data)


(Unaudited)




5.
              Goodwill and Intangible
      Assets




The following table shows an analysis of
goodwill and intangible assets:




March31, 2009
                          
                          Gross
                          
                          
                          AccumulatedAmortization
                          
                          
                          Net
                          
                          Useful
  LifeGoodwill
                          
                          $
                          49,747
                          
                          
                          $
                          -
                          
                          
                          $
                          49,747
                          
                          IndefiniteState
    licenses
                          
                          
                          5,000
                          
                          
                          
                          -
                          
                          
                          
                          5,000
                          
                          IndefiniteCustomer
      relationships
                          
                          
                          51,400
                          
                          
                          
                          (2,818
                          )
                          
                          
                          48,582
                          
                          15 years double
      decliningNet balance
                          
                          $
                          106,147
                          
                          
                          $
                          (2,818
                          )
                          
                          $
                          103,329




December 31,
      2008
                          
                          Gross
                          
                          
                          AccumulatedAmortization
                          
                          
                          Net
                          
                          Useful
  LifeGoodwill
                          
                          $
                          49,747
                          
                          
                          $
                          -
                          
                          
                          $
                          49,747
                          
                          IndefiniteState
    licenses
                          
                          
                          5,000
                          
                          
                          
                          -
                          
                          
                          
                          5,000
                          
                          IndefiniteCustomer
      relationships
                          
                          
                          51,400
                          
                          
                          
                          (1,253
                          )
                          
                          
                          50,147
                          
                          15 years double
      decliningNet balance
                          
                          $
                          106,147
                          
                          
                          $
                          (1,253
                          )
                          
                          $
                          104,894





On November 3, 2008, the Company
acquired the reinsurance operations of GMAC Insurance (GMACI), including its
book of assumed reinsurance business. As part of the transaction the Company’s
wholly owned subsidiary Maiden Holdings North America, Ltd. (“Maiden NA”)
acquired GMAC RE LLC, the reinsurance managing general agent writing business on
behalf of Motors Insurance Corporation and the renewal rights for the business
written by GMAC RE.In connection with the transaction
Maiden NA also entered into an agreement to acquire two licensed insurance
companies, GMAC Direct Insurance Company (“GMAC Direct”) and Integon Specialty
Insurance Company (“Integon”). Consummation of the acquisition of these
insurance companies is subject to regulatory approval.Theacquisition of GMAC Direct closed on
December 23, 2008, and
itwas renamed Maiden Reinsurance Company
on February 2nd2009.





Goodwill
and intangible assets are subject to annual impairment testing. No impairment
was recorded during the quarter ended March 31, 2009. The amortization of the
intangible assets with finite lives for the years ended December 31, 2009,
2010, 2011, 2012 and 2013 will be $6,590, $5,808, $5,033, $4,362, $3,781,
respectively.




6.
            Trust
      Preferred Securities





On
January 20, 2009, the Company completed a private placement of 260,000 units
(the “Units”), each Unit consisting of $1,000 principal amount of capital
securities (the “Trust Preferred Securities”) of Maiden Capital Financing Trust
(the “Trust”) ,a trust established by Maiden NA,  and 45 common
shares, $.01 par value, of the Company (the “Common Shares”), for a purchase
price of $1,000.45 per Unit.  This resulted in gross proceeds to the
Company of $260,117, before $4,342 of placement agent fees and
expenses.  As a result the Company issued 11,700,000  of its
Common Shares.  Certain trusts established by Michael Karfunkel and
George Karfunkel, two of the Company’s founding shareholders, purchased an
aggregate of 159,000 of the Units or 61%.  The remaining 101,000 Units
were purchased by existing institutional shareholders of the
Company.




The Trust
used the proceeds from the sale of the Trust Preferred Securities to purchase a
subordinated debenture (the “Debenture”) in the principal amount of $260,000
issued by Maiden NA.





12




MAIDEN HOLDINGS,
LTD.




Notes
to Unaudited Condensed Consolidated Financial Statements


(in
thousands (000’s), except per share data)


(Unaudited)





6.
            Trust
      Preferred Securities (continued)





The
Debenture was issued pursuant to an Indenture dated January 20, 2009 by and
between the Maiden NA and Wilmington Trust Company
(“Wilmington”).  The terms of the Debenture are substantially the same
as the terms of the Trust Preferred Securities.  The interest payments
by Maiden NA will be used by the Trust to pay the quarterly distributions to the
holders of the Trust Preferred Securities.  The Indenture permits
Maiden NA to redeem the Debenture (and thus a like amount of the Trust Preferred
Securities) at stated value plus one year’s interest together with accrued and
unpaid interest, if any, through the date of redemption at any time until
January 15, 2014.  On and after January 15, 2014, Maiden NA may redeem
any or all of the Debenture (and thus a like amount of the Trust Preferred
Securities) at stated value plus accrued and unpaid interest, if any, through
the date of redemption.  If the Company redeems any amount of its
Debenture, the Trust must redeem a like amount of the Trust Preferred
Securities.  The Indenture permits Maiden NA, as long as no event of
default has occurred and continues, to defer interest payments on the Debenture
for up to 20 consecutive quarterly periods, during which interest accrues and
compounds until paid.





Pursuant
to separate Guarantee Agreements dated as of January 20, 2009 (each a “Guarantee
Agreement”) with Wilmington, as guarantee trustee, each of the Company and
Maiden NA has agreed to guarantee the payment of distributions and payments on
liquidation or redemption of the Trust Preferred
Securities.





As a
consequence of the issuance of a majority of the Units to a related party under
FASB Interpretation 46R Consolidation of Variable Interest Entities (“FIN 46R”),
the Trust is a variable interest entity and the Company is deemed to be the
Primary beneficiary and is required to consolidate the Trust. The issuance of
common shares associated with the Trust Preferred Securities resulted in an
original issuance discount of $44,928 based on market price on January 20, 2009.
The discount is amortized over 30 years based on the effective interest method.
The Debentures and Trust Preferred Securities mature in 2039 and carry a stated
or coupon  rate of 14% with an effective interest rate of 16.95%. As
of March 31, 2009, the stated value of the Trust Preferred Securities was
$215,084 which comprises the principal amount of $260,000 and unamortized
discount of $44,916.





7.
            Earnings Per
      Share





The
following is a summary of the elements used in calculating basic and diluted
earnings per share:




Three
      monthsendedMarch 31, 2009
                                                        
                                                        
                                                        Three
      monthsendedMarch 31, 2008Net
      income available to common shareholders
                                                        
                                                        $
                                                        13,100
                                                        
                                                        
                                                        $
                                                        12,516Weighted
      average number of common shares outstanding - basic
                                                        
                                                        
                                                        67,687,664
                                                        
                                                        
                                                        
                                                        59,550,000Potentially
      dilutive securities:Warrants
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        -Share
      options
                                                        
                                                        
                                                        250,126
                                                        
                                                        
                                                        
                                                        -Weighted
      average number of common shares outstanding - diluted
                                                        
                                                        
                                                        67,937,790
                                                        
                                                        
                                                        
                                                        59,550,000Basic
      and diluted earnings per common share:
                                                        
                                                        $
                                                        0.19
                                                        
                                                        
                                                        $
                                                        0.21




As of
March 31, 2009, 4,050,000 (2008: 4,050,000) warrants and 662,000 (2008: 793,700)
share options were excluded from the calculation of diluted earnings per share
as they were anti-dilutive.


8.
              Share Based
      Compensation





Share
Options




The fair
value of each option grant is separately estimated for each vesting date. The
fair value of each option is amortized into compensation expense on a
straight-line basis between the grant date for the award and each vesting date.
The Company has estimated the fair value of all share option awards as of the
date of the grant by applying the Black-Scholes-Merton multiple-option pricing
valuation model. The application of this valuation model involves assumptions
that are judgmental and highly sensitive in the determination of compensation
expense. The adoption of SFAS No. 123R’s fair value method has resulted in
share-based expense (a component of salaries and benefits) in the amount of
approximately $159 and $187 for the three months ended March 31, 2009 and 2008,
respectively.




13





MAIDEN HOLDINGS,
LTD.




Notes
to Unaudited Condensed Consolidated Financial Statements


(in
thousands (000’s), except per share data)


(Unaudited)





8.
            Share Based Compensation
      (continued)





The key
assumptions used in determining the fair value of options granted in the three
months ended March 31, 2009 and a summary of the methodology applied to develop
each assumption are as follows:




Assumptions
      :
                    
                    March
      31, 2009Volatility
                    
                    
                    29.8-43.9
                    %Risk-free
      interest rate
                    
                    
                    2.36-3.30
                    %Weighted
      average expected lives in years
                    
                    5-6.1
      yearsForfeiture
      rate
                    
                    
                    0
                    %Dividend
      yield rate
                    
                    
                    1-5.39
                    %




Expected Price Volatility –
This is a measure of the amount by which a price has fluctuated or is expected
to fluctuate. At the times the Company granted options, there was no external
market for the Company’s common shares. Thus, it was not possible to use actual
experience to estimate the expected volatility of the price of the common shares
in estimating the value of the options granted. As a substitute for such
estimate, the Company used the historical volatility of companies in the
industry in which the Company operates.




Risk-Free Interest Rate –
This is the U.S. Treasury rate for the week of the grant having a term equal to
the expected life of the option. An increase in the risk-free interest rate will
increase compensation expense.





Expected Lives – This is the
period of time over which the options granted are expected to remain outstanding
giving consideration to vesting schedules, historical exercise and forfeiture
patterns. The Company uses the simplified method outlined in SEC Staff
Accounting Bulletin No. 107 to estimate expected lives for options granted
during the period as historical exercise data is not available and the options
meet the requirements set out in the Bulletin. Options granted have a maximum
term of ten years. An increase in the expected life will increase compensation
expense.





Forfeiture Rate – This is the
estimated percentage of options granted that are expected to be forfeited or
cancelled before becoming fully vested. An increase in the forfeiture rate will
decrease compensation expense.





The
following schedules shows all options granted, exercised, expired and exchanged
under the Plan for the three months ended March 31, 2009:





March 31,
      2009
                          
                          Number
      of
                            Share
      Options
                          
                          
                          Weighted
      Average Exercise Price
                          
                          
                          Weighted
      Average Remaining Contractual TermOutstanding,
      December 31, 2008
                          
                          
                          1,519,834
                          
                          
                          $
                          10.00
                          
                          
                          
                          9.44
      yearsGranted
                          
                          
                          150,000
                          
                          
                          
                          4.39
                          
                          
                          
                          9.91
      yearsExercised
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -Cancelled
                          
                          
                          (200,000
                          )
                          
                          
                          -
                          
                          
                          
                          -Outstanding,
      March 31, 2009
                          
                          
                          1,469,834
                          
                          
                          $
                          5.55
                          
                          
                          
                          9.31
      years





The
following schedule shows all options granted, exercised, expired and exchanged
under the Plan for the three months ended March 31, 2008:


March 31,
      2008
                            
                            Number
      of
                              Share
      Options
                            
                            
                            Weighted
      Average Exercise Price
                            
                            
                            Weighted
      Average Remaining Contractual TermOutstanding,
      December 31, 2007
                            
                            
                            716,000
                            
                            
                            $
                            10.00
                            
                            
                            
                            9.60
      yearsGranted
                            
                            
                            167,000
                            
                            
                            
                            10.00
                            
                            
                            
                            9.90
      yearsExercised
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Cancelled
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Outstanding,
      March 31, 2008
                            
                            
                            883,000
                            
                            
                            $
                            10.00
                            
                            
                            
                            9.50
      years









14





MAIDEN HOLDINGS,
LTD.




Notes
to Unaudited Condensed Consolidated Financial Statements


(in
thousands (000’s), except per share data)


(Unaudited)


9.Dividends
Declared





On
February 25, 2009, the Company’s Board of Directors approved a quarterly cash
dividend of $0.06 per common share. This dividend was paid on April 15, 2009 to
shareholders of record on April 1, 2009.





10.Related Party
Transactions





The
Founding Shareholders of Maiden, Michael Karfunkel, George Karfunkel and Barry
Zyskind, are also the principal shareholders, and, respectively, the Chairman of
the Board of Directors, a Director, and the President and Chief Executive
Officer and Director of AmTrust. The following describes transactions between
the Company and AmTrust.





Quota
Share Reinsurance Agreement





Effective
July 1, 2007, the Company and AmTrust entered into a master agreement, as
amended (the “Master Agreement”), by which they caused AmTrust’s Bermuda
reinsurance subsidiary, AmTrust International Insurance, Ltd.  (“AII”)
and Maiden Insurance Company Ltd. (“Maiden Insurance”) to enter into the
Reinsurance Agreement by which (a) AII retrocedes to Maiden Insurance an amount
equal to 40% of the premium written by  subsidiaries of AmTrust, net
of the cost of unaffiliated inuring reinsurance (and in the case of AmTrust’s
U.K. insurance subsidiary, IGI Insurance Company Limited (“IGI”), net of
commissions) and 40% of losses and (b) AII transferred to Maiden Insurance 40%
of the AmTrust subsidiaries’ unearned premium reserves, effective as of July 1,
2007, with respect to the current lines of business, excluding risks for which
the AmTrust subsidiaries’ net retention exceeds $5,000 (“Covered
Business”). AmTrust also has agreed to cause AII, subject to regulatory
requirements, to reinsure any insurance company which writes Covered Business in
which AmTrust acquires a majority interest to the extent required to enable AII
to cede to Maiden Insurance 40% of the premiums and losses related to such
Covered Business. The Agreement further provides that AII receives a ceding
commission of 31% of ceded written premiums. The Reinsurance Agreement has an
initial term of three years and will automatically renew for successive three
year terms thereafter, unless either AII or Maiden Insurance notifies the other
of its election not to renew not less than nine months prior to the end of any
such three year term. In addition, either party is entitled to terminate on
thirty days notice or less upon the occurrence of certain early termination
events, which include a default in payment, insolvency, change in control of AII
or Maiden Insurance, run-off, or a reduction of 50% or more of the shareholders’
equity of Maiden Insurance or the combined shareholders’ equity of AII and the
AmTrust subsidiaries.





On June
11, 2008, the Company and AmTrust amended the Reinsurance Agreement to add
Retail Commercial Package Business to the Covered Business as a consequence of
AmTrust’s acquisition of Unitrin Business Insurance (UBI). Under the amendment,
AmTrust's subsidiaries cede, upon collection, to Maiden 100% of unearned premium
(net of inuring reinsurance) from the acquisition of UBI's in-force book of
business. Additionally, AmTrust cedes to Maiden 40% of net premium written,
effective as of June 1, 2008. Maiden will pay to AmTrust a ceding commission of
34.375% on the unearned premium cession and the Retail Commercial Package
Business. The $2,000 maximum liability for a single loss provided in the Quota
Share Reinsurance Agreement shall not be applicable to Retail Commercial Package
Business.





On
February 9, 2009, AII and Maiden Insurance amended the Reinsurance Agreement to
clarify that (i) AII would offer Maiden Insurance the opportunity to reinsure
Excess Retention Business, which is defined as a policy issued by an AmTrust
insurance subsidiary with respect to which the insurance subsidiary’s retention
is greater than $5 million and (ii) the deduction for the cost of inuring
reinsurance from Affiliate Subject Premium (as defined in the Reinsurance
Agreement) retroceded to Maiden Insurance is net of ceding commission. In
addition, the Reinsurance Agreement has been amended by deleting the limitation
on Maiden Insurance’s maximum liability in respect of a single loss, which,
under certain circumstances, was $2 million. Pursuant to the Reinsurance
Agreement, as amended, AII and Maiden Insurance share, proportionally, in all
premium and losses ceded thereunder.





The
Company recorded approximately $29,254 and $19,774 of ceding commission expense
for the three months ended March 31, 2009 and 2008, respectively as a result of
this transaction.





Other
Reinsurance Agreement





Effective
January 1, 2008 the Company and AmTrust entered into an agreement to reinsure a
45% participation in the $9 million in excess of $1 million layer of AmTrust's
workers' compensation excess of loss program. This layer provides reinsurance to
AmTrust for losses per occurrence in excess of $1 million up to $10 million,
subject to an annual aggregate deductible of $1.25 million. This participation
was sourced through a reinsurance intermediary via open market placement in
which competitive bids were solicited by an independent broker. The remaining
55% participation was placed with a single carrier.





The
following is the effect on the Company’s balance sheet as of March 31, 2009 and
December 31, 2008, and the results of operations for the three months ended
March 31, 2009 and 2008 related to the Reinsurance Agreements with
AmTrust:





15




MAIDEN HOLDINGS,
LTD.




Notes
to Unaudited Condensed Consolidated Financial Statements


(in
thousands (000’s), except per share data)


(Unaudited)





10.Related Party Transactions
(continued)




Assets
      and (liabilities):
                                        
                                        March
      31, 2009
                                        
                                        
                                        December
      31, 2008Loan
      to related party
                                        
                                        $
                                        167,975
                                        
                                        
                                        $
                                        167,975Reinsurance
      balances receivable, net
                                        
                                        
                                        58,057
                                        
                                        
                                        
                                        48,837Accrued
      interest on loan to related party
                                        
                                        
                                        570
                                        
                                        
                                        
                                        1,478Deferred
      commission and other acquisition costs
                                        
                                        
                                        80,078
                                        
                                        
                                        
                                        80,455Loss
      and loss adjustment expense reserves
                                        
                                        
                                        (91,442
                                        )
                                        
                                        
                                        (69,646
                                        )Unearned
      premiums
                                        
                                        $
                                        (245,069
                                        )
                                        
                                        $
                                        (245,742
                                        )


Three
      months Ended
                                                  March
      31,Results
      of operations:
                                                
                                                2009
                                                
                                                
                                                2008Net
      premium written - assumed
                                                
                                                $
                                                93,314
                                                
                                                
                                                $
                                                87,714Change
      in unearned premium - assumed
                                                
                                                
                                                671
                                                
                                                
                                                
                                                (23,417
                                                )Net
      earned premium - assumed
                                                
                                                
                                                93,985
                                                
                                                
                                                
                                                64,297Commission
      and other acquisition costs on premium written
                                                
                                                
                                                30,556
                                                
                                                
                                                
                                                26,905Change
      in deferred commission and other acquisition costs
                                                
                                                
                                                377
                                                
                                                
                                                
                                                (7,004
                                                )Ceding
      commission and other acquisition cost - expensed
                                                
                                                
                                                30,933
                                                
                                                
                                                
                                                19,901Loss
      and loss adjustment expense
                                                
                                                
                                                58,132
                                                
                                                
                                                
                                                37,399Interest
      income on loan to related party
                                                
                                                $
                                                810
                                                
                                                
                                                $
                                                1,591
  Collateral
provided to AmTrust




In order
to provide AmTrust’s U.S. insurance subsidiaries with credit for reinsurance on
their statutory financial statements, AII, as the direct reinsurer of the
AmTrust’s insurance subsidiaries, has established trust accounts (“Trust
Accounts”) for their benefit. Maiden Insurance has agreed to provide appropriate
collateral to secure its proportional share under the Quota Share Agreement of
AII’s obligations to the AmTrust subsidiaries to whom AII is required to provide
collateral. This collateral may be in the form of (a) assets loaned by Maiden
Insurance to AII, for deposit into the Trust Accounts, pursuant to a loan
agreement between those parties, (b) assets transferred by Maiden Insurance, for
deposit into the Trust Accounts, (c) a letter of credit obtained by Maiden
Insurance and delivered to an AmTrust subsidiary on AII’s behalf (a “Letter of
Credit”), or (d) premiums withheld by an AmTrust subsidiary at Maiden
Insurance’s request in lieu of remitting such premiums to AII (“Withheld
Funds”). Maiden Insurance may provide any or a combination of these forms of
collateral, provided that the aggregate value thereof equals Maiden Insurance’s
proportionate share of its obligations under the Quota Share Agreement with AII.
If collateral is required to be provided to any AmTrust subsidiary under
applicable law or regulatory requirements, Maiden Insurance will provide
collateral to the extent required, although Maiden Insurance does not expect
that such collateral will be required unless an AmTrust subsidiary is domiciled
in the United States.




Maiden
Insurance satisfied its collateral requirements under the Quota Share Agreement
with AII by lending funds in the amount of $167,975 as at March 31, 2009 and
December 31, 2008 to AII pursuant to a loan agreement entered into between those
parties. The amount of collateral Maiden Insurance is required to maintain,
which is determined quarterly, equals its proportionate share of (a) the amount
of ceded paid losses for which AII is responsible to such AmTrust subsidiaries
but has not yet paid, (b) the amount of ceded loss reserves (including ceded
reserves for claims reported but not resolved and losses incurred but not
reported) for which AII is responsible to AmTrust subsidiaries, and (c) the
amount of ceded reserves for unearned premiums ceded by AmTrust subsidiaries to
AII. Pursuant to the Master Agreement, AmTrust has agreed to cause AII not to
commingle Maiden Insurance’s assets with AII’s other assets and to cause the
AmTrust subsidiaries not to commingle Maiden Insurance’s assets with the AmTrust
subsidiaries’ other assets if an AmTrust subsidiary withdraws those assets. AII
has agreed that, if an AmTrust subsidiary returns to AII excess assets withdrawn
from a Trust Account, drawn on a Letter of Credit or maintained by such AmTrust
subsidiary as Withheld Funds, AII will immediately return to Maiden Insurance
its proportionate share of such excess assets. AII has further agreed that if
the aggregate fair market value of the amount of Maiden Insurance’s assets held
in the Trust Account exceeds Maiden Insurance’s proportionate share of AII’s
obligations, or if an AmTrust subsidiary misapplies any such collateral, AII
will immediately return to Maiden Insurance an amount equal to such excess or
misapplied collateral, less any amounts AII has paid to Maiden Insurance. In
addition, if an AmTrust subsidiary withdraws Maiden Insurance’s assets from a
Trust Account and maintains those assets on its books as withheld funds, AII has
agreed to pay to Maiden Insurance interest at the rate equivalent to the
one-month London Interbank Offered Rate (“LIBOR”) plus 90 basis points per annum
computed on the basis of a 360-day year on the loan (except to the extent Maiden
Insurance’s proportionate share of AII’s obligations to that AmTrust subsidiary
exceeds the value of the collateral Maiden Insurance has provided), and net of
unpaid fees Maiden Insurance owes to AIIM and its share of fees owed to the
trustee of the Trust Accounts.




16





MAIDEN HOLDINGS,
LTD.




Notes
to Unaudited Condensed Consolidated Financial Statements


(in
thousands (000’s), except per share data)


(Unaudited)


10.Related Party Transactions
(continued)





Effective
December 1, 2008, the Company entered into a Reinsurer Trust Assets Collateral
agreement to provide to AII sufficient collateral to secure its proportional
share of AII’s obligations to the U.S. AmTrust subsidiaries. The amount of the
collateral in Trust, as at March 31, 2009 and December 31, 2008 was
approximately $153,394 and $75,279. (See Note 3(b)).




Reinsurance
Brokerage Agreements





Effective
July 1, 2007, the Company entered into a reinsurance brokerage agreement with
AII Reinsurance Broker Ltd., a subsidiary of AmTrust. Pursuant to the brokerage
agreement, AII Reinsurance Broker Ltd. provides brokerage services relating to
the Reinsurance Agreement for a fee equal to 1.25% of the premium reinsured from
AII. The brokerage fee is payable in consideration of AII Reinsurance Broker
Ltd’s brokerage services. AII Reinsurance Broker Ltd. is not the Company’s
exclusive broker. AII Reinsurance Broker Ltd. may, if mutually agreed, also
produce reinsurance for the Company from other ceding companies, and in such
cases the Company will negotiate a mutually acceptable commission rate. The
Company recorded approximately $1,155 and $797 of reinsurance brokerage expense
for the three months ended March 31, 2009 and 2008, respectively and deferred
reinsurance brokerage of $2,920 and $3,009 as at March 31, 2009 and December 31,
2008, respectively as a result of this agreement.





Effective
April 1, 2008, the Company entered into brokerage services agreements with IGI
Intermediaries Limited and IGI Inc. (IGI), both subsidiaries of AmTrust.
Pursuant to the brokerage services agreements, IGI provides marketing services
to us which includes providing marketing material to potential policyholders,
providing us with market information on new trends and business opportunities
and referring new brokers and potential policyholders to us. A fee equal to
IGI‘s costs in providing such services plus 8% is payable in consideration of
IGI’s marketing services. The Company recorded approximately $152 as expense,
which is included in other operating expenses, for the three months ended March
31, 2009.





Asset
Management Agreement





Effective
July 1, 2007, the Company entered into an asset management agreement with AII
Insurance Management Limited (“AIIM”), an AmTrust subsidiary, pursuant to which
AIIM has agreed to provide investment management services to Maiden Insurance.
Pursuant to the asset management agreement, AIIM provides investment management
services for an annual fee equal to 0.35% of average invested assets plus all
costs incurred.  Effective April 1, 2008, the investment management
services annual fee has been reduced to 0.20% if the average value of the
account is less than $1 billion and 0.0375 if the average value of the account
is greater than $1 billion.  The Company recorded approximately $597
and $458 of investment management fees for the three months ended March 31, 2009
and 2008, respectively, as a result of this agreement.





17





MAIDEN HOLDINGS,
LTD.




Notes
to Unaudited Condensed Consolidated Financial Statements


(in
thousands (000’s), except per share data)


(Unaudited)





11.Segments





The Company currently operates two
business segments, Reinsurance – AmTrust Quota Share and Reinsurance - Other.
The Company evaluates segment performance based on segment profit, which
excludes investment income, realized gains and losses, general corporate
expenses, interest expenses, income taxes and any other non-core business income
or expenses. The following tables summarize business segments as follows:




For the three months ended March
      31, 2009
                                    
                                    Reinsurance -
      AmTrustQuota Share
                                    
                                    
                                    Reinsurance
      -Other
                                    
                                    
                                    TotalNet premiums
      written
                                    
                                    $
                                    85,371
                                    
                                    
                                    $
                                    251,177
                                    
                                    
                                    $
                                    336,548Net premiums
      earned
                                    
                                    
                                    92,420
                                    
                                    
                                    
                                    117,672
                                    
                                    
                                    
                                    210,092Net losses and loss
      expenses
                                    
                                    
                                    (57,272
                                    )
                                    
                                    
                                    (89,016
                                    )
                                    
                                    
                                    (146,288
                                    )Commissions and other
      acquisition
      costs
                                    
                                    
                                    (30,409
                                    )
                                    
                                    
                                    (16,222
                                    )
                                    
                                    
                                    (46,631
                                    )General and administrative
      expenses
                                    
                                    
                                    (374
                                    )
                                    
                                    
                                    (5,726
                                    )
                                    
                                    
                                    (6,100
                                    )Underwriting
      income
                                    
                                    $
                                    4,365
                                    
                                    
                                    $
                                    6,708
                                    
                                    
                                    $
                                    11,073Reconciliation to net
      incomeNet investment
      income
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    12,329Amortization of
      intangibles
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    (1,564
                                    )Foreign exchangeloss
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    (213
                                    )Trust
      preferred interest
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    (7,090
                                    )General and administrative
    expenses
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    (1,435
                                    )Net Income
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    $
                                    13,100Net loss and loss expense
      ratio*
                                    
                                    
                                    62.0
                                    %
                                    
                                    
                                    75.6
                                    %
                                    
                                    
                                    69.6
                                    %Acquisition cost
      ratio**
                                    
                                    
                                    32.9
                                    %
                                    
                                    
                                    13.8
                                    %
                                    
                                    
                                    22.2
                                    %General and administrative expense
      ratio***
                                    
                                    
                                    0.4
                                    %
                                    
                                    
                                    4.9
                                    %
                                    
                                    
                                    3.6
                                    %Combined
    ratio
                                    
                                    
                                    95.3
                                    %
                                    
                                    
                                    94.3
                                    %
                                    
                                    
                                    95.4
                                    %As of March 31,
      2009Reinsurance
      balances receivable
                                    
                                    
                                    49,552
                                    
                                    
                                    
                                    132,500
                                    
                                    
                                    
                                    182,052Deferred
      commission and other acquisition costs
                                    
                                    
                                    76,261
                                    
                                    
                                    
                                    76,355
                                    
                                    
                                    
                                    152,616Loan
      to related party
                                    
                                    
                                    167,975
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    167,975Goodwill
                                    
                                    
                                    -
                                    
                                    
                                    
                                    49,747
                                    
                                    
                                    
                                    49,747Intangibles
                                    
                                    
                                    -
                                    
                                    
                                    
                                    53,582
                                    
                                    
                                    
                                    53,582Restricted
      Investments and cash
                                    
                                    
                                    152,278
                                    
                                    
                                    
                                    570,086
                                    
                                    
                                    
                                    722,364Corporate
      and other assets
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    977,349Total
      Assets
                                    
                                    
                                    446,066
                                    
                                    
                                    
                                    882,270
                                    
                                    
                                    
                                    2,305,685




18





MAIDEN HOLDINGS,
LTD.




Notes
to Unaudited Condensed Consolidated Financial Statements


(in
thousands (000’s), except per share data)


(Unaudited)


11.Segments
(continued)





For the three months ended March
      31,  2008
                              
                              Reinsurance -
      AmTrustQuota Share
                              
                              
                              Reinsurance -
                                Other
                              
                              
                              TotalNet premiums
      written
                              
                              $
                              82,948
                              
                              
                              $
                              19,484
                              
                              
                              $
                              102,432Net premiums
      earned
                              
                              
                              63,790
                              
                              
                              
                              1,515
                              
                              
                              
                              65,305Net losses and loss
      expenses
                              
                              
                              (37,208
                              )
                              
                              
                              (628
                              )
                              
                              
                              (37,836
                              )Acquisition
      costs
                              
                              
                              (20,572
                              )
                              
                              
                              (689
                              )
                              
                              
                              (21,261
                              )General and administrative
      expenses
                              
                              
                              (176
                              )
                              
                              
                              (149
                              )
                              
                              
                              (325
                              )Underwriting
      income
                              
                              $
                              5,834
                              
                              
                              $
                              49
                              
                              
                              $
                              5,883Reconciliation to net
      incomeNet investment
      income
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              7,734General and administrative
    expenses
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              (1,101
                              )Net Income
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              $
                              12,516Net loss and loss expense
      ratio*
                              
                              
                              58.3
                              %
                              
                              
                              41.5
                              %
                              
                              
                              57.9
                              %Acquisition cost
      ratio**
                              
                              
                              32.3
                              %
                              
                              
                              45.5
                              %
                              
                              
                              32.6
                              %General and administrative expense
      ratio***
                              
                              
                              0.3
                              %
                              
                              
                              9.8
                              %
                              
                              
                              0.5
                              %Combined
    ratio
                              
                              
                              90.9
                              %
                              
                              
                              96.8
                              %
                              
                              
                              91.0
                              %As of March 31,
      2008Reinsurance
      balances receivable
                              
                              $
                              69,425
                              
                              
                              $
                              10,555
                              
                              
                              $
                              79,980Deferred
      commission and other acquisition costs
                              
                              
                              50,393
                              
                              
                              
                              8,281
                              
                              
                              
                              58,674Loan
      to related party
                              
                              
                              113,542
                              
                              
                              
                              -
                              
                              
                              
                              113,542Corporate
      and other assets
                              
                              
                              -
                              
                              
                              
                              
                              
                              
                              
                              643,000Total
      Assets
                              
                              $
                              233,360
                              
                              
                              $
                              18,836
                              
                              
                              $
                              895,196





*Calculated by dividing net losses and
loss expenses by net premiums earned.


** Calculated by dividing commission and
other acquisition costs by net premiums earned


*** Calculated by dividing general and
administrative expenses by net premiums earned.


****
Calculated by adding together net loss and loss expense ratio, acquisition cost
ratio and general and administrative expense ratio.





The
following tables set forth financial information relating to gross and net
premiums written and earned by major line of business for the three months ended
March 31, 2009 and 2008:




Three months ended
      March31,2009
                                                      
                                                      
                                                      2008Total
                                                      
                                                      
                                                      %
      of Total
                                                      
                                                      
                                                      Total
                                                      
                                                      
                                                      %
      of TotalGross
      and net premiums writtenReinsurance
      - AmTrust Quota ShareSmall
      Commercial Business
                                                      
                                                      $
                                                      52,972
                                                      
                                                      
                                                      
                                                      15.7
                                                      %
                                                      
                                                      $
                                                      43,657
                                                      
                                                      
                                                      
                                                      42.6
                                                      %Specialty
      Middle Market Property & Casualty
                                                      
                                                      
                                                      9,228
                                                      
                                                      
                                                      
                                                      2.7
                                                      %
                                                      
                                                      
                                                      6,867
                                                      
                                                      
                                                      
                                                      6.7
                                                      %Specialty
      Risk and Extended Warranty
                                                      
                                                      
                                                      23,171
                                                      
                                                      
                                                      
                                                      6.9
                                                      %
                                                      
                                                      
                                                      32,424
                                                      
                                                      
                                                      
                                                      31.7
                                                      %Total
      Reinsurance - AmTrust Quota Share
                                                      
                                                      $
                                                      85,371
                                                      
                                                      
                                                      
                                                      25.3
                                                      %
                                                      
                                                      $
                                                      82,948
                                                      
                                                      
                                                      
                                                      81.00
                                                      %Reinsurance
      – OtherProperty
                                                      
                                                      
                                                      51,448
                                                      
                                                      
                                                      
                                                      15.3
                                                      %
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      %Casualty
                                                      
                                                      
                                                      150,075
                                                      
                                                      
                                                      
                                                      44.6
                                                      %
                                                      
                                                      
                                                      19,484
                                                      
                                                      
                                                      
                                                      19.0
                                                      %Accident
      and Health
                                                      
                                                      
                                                      49,654
                                                      
                                                      
                                                      
                                                      14.8
                                                      %
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      %Total
      Reinsurance - Other
                                                      
                                                      
                                                      251,177
                                                      
                                                      
                                                      
                                                      74.7
                                                      %
                                                      
                                                      
                                                      19,484
                                                      
                                                      
                                                      
                                                      19.0
                                                      %$
                                                      336,548
                                                      
                                                      
                                                      
                                                      100.0
                                                      %
                                                      
                                                      $
                                                      102,432
                                                      
                                                      
                                                      
                                                      100.0
                                                      %




19





MAIDEN HOLDINGS,
LTD.




Notes
to Unaudited Condensed Consolidated Financial Statements


(in
thousands (000’s), except per share data)


(Unaudited)





11.Segments
(continued)




Three months ended
      March312009
                                                                    
                                                                    
                                                                    2008Total
                                                                    
                                                                    
                                                                    %
      of Total
                                                                    
                                                                    
                                                                    Total
                                                                    
                                                                    
                                                                    %
      of TotalGross
      and net premiums earnedReinsurance
      – AmTrust Quota ShareSmall
      Commercial Business
                                                                    
                                                                    $
                                                                    54,627
                                                                    
                                                                    
                                                                    
                                                                    26.0
                                                                    %
                                                                    
                                                                    $
                                                                    31,880
                                                                    
                                                                    
                                                                    
                                                                    48.8
                                                                    %Specialty
      Middle Market Property & Casualty
                                                                    
                                                                    
                                                                    13,348
                                                                    
                                                                    
                                                                    
                                                                    6.4
                                                                    %
                                                                    
                                                                    
                                                                    10,314
                                                                    
                                                                    
                                                                    
                                                                    15.8
                                                                    %Specialty
      Risk and Extended Warranty
                                                                    
                                                                    
                                                                    24,445
                                                                    
                                                                    
                                                                    
                                                                    11.6
                                                                    %
                                                                    
                                                                    
                                                                    21,596
                                                                    
                                                                    
                                                                    
                                                                    33.1
                                                                    %Total
      AmTrust Quota Share
                                                                    
                                                                    $
                                                                    92,420
                                                                    
                                                                    
                                                                    
                                                                    44.0
                                                                    %
                                                                    
                                                                    $
                                                                    63,790
                                                                    
                                                                    
                                                                    
                                                                    97.7
                                                                    %Reinsurance
      – OtherProperty
                                                                    
                                                                    
                                                                    25,999
                                                                    
                                                                    
                                                                    
                                                                    12.4
                                                                    %
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    -
                                                                    %Casualty
                                                                    
                                                                    
                                                                    66,354
                                                                    
                                                                    
                                                                    
                                                                    31.6
                                                                    %
                                                                    
                                                                    
                                                                    1,515
                                                                    
                                                                    
                                                                    
                                                                    2.3
                                                                    %Accident
      and Health
                                                                    
                                                                    
                                                                    25,318
                                                                    
                                                                    
                                                                    
                                                                    12.0
                                                                    %
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    -
                                                                    %Total
      Reinsurance - Other
                                                                    
                                                                    
                                                                    117,672
                                                                    
                                                                    
                                                                    
                                                                    56.0
                                                                    %
                                                                    
                                                                    
                                                                    1,515
                                                                    
                                                                    
                                                                    
                                                                    2.3
                                                                    %$
                                                                    210,092
                                                                    
                                                                    
                                                                    
                                                                    100.0
                                                                    %
                                                                    
                                                                    $
                                                                    65,305
                                                                    
                                                                    
                                                                    
                                                                    100.0
                                                                    %




12.Subsequent
Events





On
May 11, 2009, the Company declared a quarterly dividend of $0.06 per common
share, payable on July 15, 2009 to shareholders of record on July 1,
2009.




20




Item 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS





The following discussion and analysis of
our financial condition and results of operations should be read in conjunction
with our condensed consolidated financial statements and related notes included
elsewhere in this Form 10-Q. References in this Form 10-Q to the terms “we,”
“us,” “our,” “the Company” or other similar terms mean the consolidated
operations of Maiden Holdings, Ltd and its subsidiaries, unless the context
requires otherwise. References in this Form 10-Q to the term “Holdings” means
Maiden Holdings, Ltd only.




Note on Forward-Looking
Statement




This Form 10-Q and other publicly
available documents may include, and our officers and representatives may from
time to time make, projections concerning financial information and statements
concerning future economic performance and events, plans and objectives relating
to management, operations, products and services, and assumptions underlying
these projections and statements. These projections and statements are
forward-looking statements within the meaning of The Private Securities
Litigation Reform Act of 1995 and are not historical facts but instead represent
only our belief regarding future events, many of which, by their nature, are
inherently uncertain and outside our control. These projections and statements
may address, among other things, our strategy for growth, product development,
financial results and reserves. Actual results and financial condition may
differ, possibly materially, from these projections and statements and therefore
you should not place undue reliance on them. Factors that could cause our actual
results to differ, possibly materially, from those in the specific projections
and statements are discussed throughout this Management’s Discussion and
Analysis of Financial Condition and Results of Operations and in “Risk Factors”
in Item 1A of Part I of our 2008 Annual Report on Form 10-K filed with
the U.S. Securities and Exchange Commission (“SEC”) on March 31, 2009.The projections and
statements in this report speak only as of the date of this report and those in
other publicly available documents or made by our officers and representatives
from time to time speak only as of their respective date and we undertakeno obligation to update or
revise any forward-looking statement that may be made from time to time, whether
as a result of new information, future developments or otherwise, except as required by law.





General Overview





We are a
Bermuda-based holding company formed in June 2007 to provide reinsurance
solutions, products and services to U.S. and European insurance companies that
specialize in products offering coverage at low limits or insuring risks that
are believed to be low hazard, predictable and generally not susceptible to
catastrophe claims. We have operations in Bermuda and the U.S.  We
provide innovative reinsurance business solutions for such insurance companies
to enable them to improve their capacity and ability to deliver and market their
products and services.





On
October 31, 2008, we acquired the reinsurance operations of GMAC Insurance from
GMACI Holdings, LLC (“GMACI”), including a book of assumed reinsurance business.
As part of the transaction, the Company’s wholly owned subsidiary, Maiden
Holdings North America, Ltd. (“Maiden NA”), acquired GMAC RE LLC (“GMAC RE”), a
reinsurance managing general agent writing business on behalf of Motors
Insurance Corporation (“Motors”) and the renewal rights for the business written
through GMAC RE.  GMAC RE was subsequently renamed Maiden Re Insurance
Services, LLC (“Maiden Re”).  In connection with the transaction,
Maiden NA also entered into stock purchase agreements to acquire insurance
companies, GMAC Direct Insurance Company (“GMAC Direct”) and Integon Specialty
Insurance Company (“Integon”). The acquisition of GMAC Direct was consummated on
December 23, 2008 and it was renamed “Maiden Reinsurance Company” on February 2,
2009.  Regulatory approval for the acquisition of Integon is
pending.  In conjunction with the GMAC Acquisition, on October 31,
2008, Maiden Insurance and Motors entered into a Portfolio Transfer and Quota
Share Reinsurance Agreement under which Maiden Insurance reinsured (i) all of
the existing contracts written by GMAC RE pursuant to a loss portfolio transfer,
and (ii) contracts written pursuant to a fronting arrangement with
Motors.  The acquisition of GMAC RE, GMAC Direct and Integon and the
renewal rights to GMACI’s reinsurance business and the loss portfolio and quota
share reinsurance transaction with Motors is referred to as the “GMAC
Acquisition”.





To support the businesses acquired in
the GMAC Acquisition and the North American operations of Maiden NA, on January
20, 2009, we completed aprivateplacement of 260,000 units (the
“Units”), each Unit consisting of $1,000 principal amount of capital securities
(the “Trust Preferred Securities”) of Maiden Capital Financing Trust, a trust
established by Maiden NA, and 45 common shares, $.01 par value, of the Company
for a purchase price of $1,000.45 per Unit.  This resulted in gross
proceeds to the Company of approximately $260.1 millionbefore approximately $4.3 millionof placement agent fees and
expenses.  As part of the transaction, the Company issued 11,700,000
common shares to the purchasers of the Units. The Trust Preferred
Securitiesmature in 2039 and carry an interest
rate of 14% and an effective rate of interest of 16.95%. Approximately 61% of these securities were placed
privately with the Founding Shareholders and the remainder with several existing
institutionalshareholders
of the Company.




21





Relevant Factors





Revenues





We derive our revenues primarily from
premiums on our insurance policies and reinsurance contracts, net of any
reinsurance or retrocessional coverage purchased. Insurance and reinsurance
premiums are a function of the amounts and types of policies and contracts we
write, as well as prevailing market prices. Our prices are determined before our
ultimate costs, which may extend far into the future, are known. In addition,
our revenues include income generated from our investment portfolio, consisting
of net investment income and net realized investment gains or losses. Investment
income is principally derived from interest and dividends earned on investments,
partially offset by investment management fees and fees paid to our custodian
bank. Net realized investment gains or losses include (1) net realized
investment gains or losses from the sale of investments and (2) write-downs
related to declines in the market value of securities on our available for sale
portfolio that were considered to be other than temporary.




Expenses




Our
expenses consist largely of net losses and loss expenses, commissions and other
acquisition costs, general and administrative expenses, amortization of
intangible assets and foreign exchange gains or losses. Net losses and loss
expenses incurred are comprised of three main components:




•
              losses
      paid, which are actual cash payments to insureds, net of recoveries from
      reinsurers;•
              outstanding
      loss or case reserves, which represent management’s best estimate of the
      likely settlement amount for known claims, less the portion that can be
      recovered from reinsurers; and•
              IBNR,
      which are reserves established by us for changes in the values of claims
      that have been reported to us but are not yet settled, as well as claims
      that have occurred but have not yet been reported. The portion recoverable
      from reinsurers is deducted from the gross estimated
  loss.




Acquisition
costs are comprised of commissions, brokerage fees and insurance taxes.
Commissions and brokerage fees are usually calculated as a percentage of
premiums and depend on the market and line of business. Acquisition costs are
reported after (1) deducting commissions received on ceded reinsurance,
(2) deducting the part of acquisition costs relating to unearned premiums
and (3) including the amortization of previously deferred acquisition
costs.




General
and administrative expenses include personnel expenses including share-based
compensation charges, rent expense, professional fees, information technology
costs and other general operating expenses. We are experiencing increases in
general and administrative expenses resulting from additional staff, increased
rent expense for our offices and increased professional fees. We believe
this trend will continue in 2009 as we continue to hire additional staff and
build our infrastructure, including additional expenses related to the GMAC RE
business for the full year 2009.




Ratios




Management
measures results for each segment on the basis of the “loss and loss expense
ratio,” “acquisition cost ratio,” “general and administrative expense ratio,”
“expense ratio” and the “combined ratio.” Because we do not manage our assets by
segment, investment income, interest expense and total assets are not allocated
to individual reportable segments. General and administrative expenses are
allocated to segments based on various factors, including staff count and each
segment’s proportional share of gross premiums written. The “loss and loss
expense ratio” is derived by dividing net losses and loss expenses by net
premiums earned. The “acquisition cost ratio” is derived by dividing acquisition
costs by net premiums earned. The “general and administrative expense ratio” is
derived by dividing general and administrative expenses by net premiums earned.
The “expense ratio” is the sum of the acquisition cost ratio and the general and
administrative expense ratio. The “combined ratio” is the sum of the loss and
loss expense ratio, the acquisition cost ratio and the general and
administrative expense ratio.





22




Critical Accounting
Policies





It is
important to understand our accounting policies in order to understand our
financial position and results of operations. Our unaudited condensed
consolidated financial statements reflect determinations that are inherently
subjective in nature and require management to make assumptions and best
estimates to determine the reported values. If events or other factors cause
actual results to differ materially from management’s underlying assumptions or
estimates, there could be a material adverse effect on our financial condition
or results of operations. We believe that some of the more critical judgments in
the areas of accounting estimates and assumptions that affect our financial
condition and results of operations are related to reserves for losses and loss
expenses, reinsurance recoverables, premiums and acquisition costs, valuation of
financial instruments and other-than-temporary-impairment of investments. For a
detailed discussion of our critical accounting policies please refer to our
Annual Report on Form 10-K for the year ended December 31, 2008 filed with
the SEC. There were no material changes in the application of our critical
accounting estimates subsequent to that report.





Results of
Operations





The following table sets forth our
selected consolidated statement of operations data for each of the periods
indicated.




Three Months ended March
      31,2009
                                            
                                            
                                            2008($ in
      thousands)Gross and net premiums
      written
                                            
                                            $
                                            336,548
                                            
                                            
                                            $
                                            102,432Net earned
      premium
                                            
                                            $
                                            210,092
                                            
                                            
                                            $
                                            65,305Net investment
      income
                                            
                                            
                                            14,259
                                            
                                            
                                            
                                            7,609Net realized investment (losses)
      gains
                                            
                                            
                                            (1,930
                                            )
                                            
                                            
                                            125Total
    Revenue
                                            
                                            
                                            222,421
                                            
                                            
                                            
                                            73,039Loss and loss adjustment
      expenses
                                            
                                            
                                            146,288
                                            
                                            
                                            
                                            37,836Commissions and other acquisition
      expenses
                                            
                                            
                                            46,631
                                            
                                            
                                            
                                            21,261General and administrative
      expenses
                                            
                                            
                                            7,535
                                            
                                            
                                            
                                            1,426Amortization of intangible
      assets
                                            
                                            
                                            1,564
                                            
                                            
                                            
                                            -Interest
      expense
                                            
                                            
                                            7,090
                                            
                                            
                                            
                                            -Foreign exchange
      loss
                                            
                                            
                                            213
                                            
                                            
                                            
                                            -Total
    Expenses
                                            
                                            
                                            209,321
                                            
                                            
                                            
                                            60,523Net income
                                            
                                            $
                                            13,100
                                            
                                            
                                            $
                                            12,516




Three Months ended March
      31,2009
                      
                      2008Selected Consolidated
      Ratios:Loss and loss expense
      ratio
                      
                      
                      69.6
                      %
                      
                      
                      57.9
                      %Acquisition cost
      ratio
                      
                      
                      22.2
                      %
                      
                      
                      32.6
                      %General and administrative expense
      ratio
                      
                      
                      3.6
                      %
                      
                      
                      2.2
                      %Expense
    ratio
                      
                      
                      25.8
                      %
                      
                      
                      34.8
                      %Combined
    ratio
                      
                      
                      95.4
                      %
                      
                      
                      92.7
                      %




23




Comparison of Three Months Ended
March 31, 2009 and 2008





Premiums.Net premium writtenincreased by $234.1 million, or 228.6%,
for the three months ended March 31, 2009 compared to the three months ended
March 31, 2008.  This increase was primarily due to the GMAC
Acquisition in the fourth quarter of 2008.





Net premium earnedincreased by $144.8 million, or 221.7%
for the three months ended March 31, 2009 compared to the three months ended
March 31, 2008. Approximately $112.3 million of this increase was due to the
GMAC Acquisition in the fourth quarter of 2008 and $17.8 million was due to the
addition of UBI premium to the AmTrust Quota Share in the second quarter of
2008.





Net
Investment Income. Net
investment incomeincreased
by $6.7 million, or 87.4% for the three months ended March 31, 2009 compared to
the three months ended March 31, 2008. Average invested assets for the period
were approximately$1,724
million compared to$542million and yields were approximately3.3% compared to4.8% for thethree months ended March 31, 2009 and
2008, respectively. We also carried a substantial amount of cash and cash
equivalents in the quarter as we continue to deploy the cash obtained through
the GMAC Acquisition and also from the proceeds from the Trust Preferred
issuance.We expect
investment incomeand the
yield achievedto increase
over time ascash is more
fully deployed.





Net
RealizedInvestment
(Losses) Gains. Net
realizedlosseson investmentswere $1.9 million for the three months
ended March 31, 2009 compared to a gain of$0.125 millionthree months ended March 31,
2008.





Loss
and Loss Adjustment Expenses. Loss and loss adjustment expenseswere$146.3 million and$37.8 million for the three months ended
March 31,2009 and2008, respectively.The Company’s loss ratio for the three
months ended March 31, 2009 increased to69.6% from57.9% for the three months ended March 31,
2008.The
increase in the loss ratio was primarily due to the GMAC Acquisition in the
fourth quarter of 2008 andtheaddition ofUBIpremiums which carry a higher loss ratio
to the AmTrust Quota Sharein the second quarter of
2008.





Commission
and Other AcquisitionExpenses.Commission and other acquisition
expensesincreased by $25.4
million, or 119.3% for the three months ended March 31, 2009 compared to$21.3 million for the three
months ended March 31, 2008.This increase was primarily due to the
addition GMAC Acquisition in the fourth quarter of 2008 andtheaddition ofUBIto the AmTrust Quota Sharein the second quarter of
2008.





General
and Administrative Expenses.General
andadministrativeexpensesincreased by $6.1 million, or 428.4%,
for the three months ended March 31, 2009 compared to the three months ended
March 31, 2008. This increase was primarily due to due to the GMAC Acquisition
in the fourth quarter of 2008 and the continued build out of our
infrastructure.





Interest
expense.  Interest expense for the
quarter relates to the issuance of $260 million of 14% Trust Preferred
Securities on January 20, 2009.




Underwriting Results bySegment




The Company currently operates two
business segmentsReinsurance - OtherandReinsurance– AmTrust Quota Share. The following
tables summarizethe
underwriting results and associated ratios bysegments:





Reinsurance – Other
Segment





The following table
summarizesthe underwriting results and associated
ratios for the Reinsurance - Other segment. The comparisons with the prior year
are not particularly meaningful due to the GMAC Acquisition in the fourth
quarter of 2008:





24




Three months ended March
      31,2009
                                                    
                                                    
                                                    2008($ in
      thousands)Net premiums
      written
                                                    
                                                    $
                                                    251,177
                                                    
                                                    
                                                    $
                                                    19,484Net premiums
      earned
                                                    
                                                    
                                                    117,671
                                                    
                                                    
                                                    
                                                    1,515Net losses and loss
      expenses
                                                    
                                                    
                                                    (89,016
                                                    )
                                                    
                                                    
                                                    (628
                                                    )Commissions and other
      acquisitionexpenses
                                                    
                                                    
                                                    (16,222
                                                    )
                                                    
                                                    
                                                    (689
                                                    )General and administrative
      expenses
                                                    
                                                    
                                                    (5,726
                                                    )
                                                    
                                                    
                                                    (149
                                                    )Underwriting
      income
                                                    
                                                    $
                                                    6,707
                                                    
                                                    
                                                    $
                                                    49Net loss and loss expense
      ratio
                                                    
                                                    
                                                    75.6
                                                    %
                                                    
                                                    
                                                    41.5
                                                    %Acquisition cost
      ratio
                                                    
                                                    
                                                    13.8
                                                    %
                                                    
                                                    
                                                    45.5
                                                    %General and administrative expense
      ratio
                                                    
                                                    
                                                    4.9
                                                    %
                                                    
                                                    
                                                    9.8
                                                    %Combined
    ratio
                                                    
                                                    
                                                    94.3
                                                    %
                                                    
                                                    
                                                    96.8
                                                    %




Premiums. Net premium writtenincreased by $231.7 million, or 1,189%
for the three months ended March 31, 2009 compared to the three months ended
March 31, 2008.  This increase was due to the GMAC Acquisition in the
fourth quarter of 2008.





Net premium earnedincreased by $116.2 million, or 7,667%
for the three months ended March 31, 2009 compared to the three months ended
March 31, 2008. This increase was due to GMAC Acquisition in the fourth quarter
of 2008.





Loss
and Loss Adjustment Expenses. Loss and loss adjustment expenseswere$89.0 million and$0.7million for the three months ended
March 31,2009 and2008, respectively.This increase was due to the GMAC
Acquisition in the fourth quarter of 2008.





Commission
and Other AcquisitionExpenses.Commission and other acquisition
expensesincreased by $15.5
million, or 2,254% for the three months ended March 31, 2009 compared tothe three months ended
March 31, 2008.This
increase was due to the GMAC Acquisition in the fourth quarter of
2008.





General
and Administrative Expenses.General
andadministrativeexpensesincreased by $5.6 million, or 3,743%,
for the three months ended March 31, 2009 compared to the three months ended
March 31, 2008. This increase was due to the GMAC Acquisition in the fourth
quarter of 2008.





Reinsurance – AmTrust Quota Share
Segment





The following table
summarizesthe underwriting results and associated
ratios for the Reinsurance – AmTrust Quota Share segment:




Three months ended March
      31,For the three months ended March
      31, 2009
                                              
                                              2009
                                              
                                              
                                              2008($ in
      thousands)Net premiums
      written
                                              
                                              $
                                              85,371
                                              
                                              
                                              $
                                              82,948Net premiums
      earned
                                              
                                              
                                              92,420
                                              
                                              
                                              
                                              63,790Net losses and loss
      expenses
                                              
                                              
                                              (57,272
                                              )
                                              
                                              
                                              (37,208
                                              )Commissions and other
      acquisitionexpenses
                                              
                                              
                                              (30,409
                                              )
                                              
                                              
                                              (20,572
                                              )General and administrative
      expenses
                                              
                                              
                                              (374
                                              )
                                              
                                              
                                              (176
                                              )Underwriting
      income
                                              
                                              $
                                              4,365
                                              
                                              
                                              $
                                              5,834Net loss and loss expense
      ratio
                                              
                                              
                                              62.0
                                              %
                                              
                                              
                                              58.3
                                              %Acquisition cost
      ratio
                                              
                                              
                                              32.9
                                              %
                                              
                                              
                                              32.5
                                              %General and administrative expense
      ratio
                                              
                                              
                                              0.4
                                              %
                                              
                                              
                                              0.3
                                              %Combined
    ratio
                                              
                                              
                                              95.3
                                              %
                                              
                                              
                                              91.1
                                              %




25




Premiums. Net premium writtenincreased by $2.4 million, or 2.9%, for
the three months ended March 31, 2009 compared to the three months ended March
31, 2008.  Increases in the Small Commercial Business Insurance
premium ceded by AmTrust were partially offset by lower Specialty Risk and
Extended Warranty premium.





Net premium earnedincreased by $28.6 million, or 44.9%,
for the three months ended March 31, 2009 compared to the three months ended
March 31, 2008. This increase is primarily due to the addition of UBI premium to
the AmTrust Quota Share in the second quarter of 2008.





Loss
and Loss Adjustment Expenses. Loss and loss adjustment expenses
increased by $20.1 million, or 53.9% for the three months ended March 31, 2009
compared to the three months ended March 31, 2008.The Company’s loss ratio for the three
months ended March 31, 2009 increased to 61.8% from58.3% for the three months ended March 31,
2008. The increase in the loss and loss adjustment ratio resulted, primarily,
from theaddition ofUBIpremiums, which carries a higher loss
ratio, to the AmTrust Quota Sharein the second quarter of
2008.





Commission
and Other Acquisition Expenses.Commission and other acquisition
expensesincreased by $9.7
million, or 46.5% for the three months ended March 31, 2009 compared to the
three months ended March 31, 2008.The increase in commissions and other
acquisition expenses is consistent with the increase in earned premiums except
that the commission rate on the UBI premium ceded is slightly higher.





General
and Administrative Expenses.General
andadministrativeexpensesincreased by $0.2 million for the three
months ended March 31, 2009 compared to the three months ended March 31,
2008.





Liquidity and Capital
Resources





Sources and Uses of
Funds




Our sources of funds primarily consist
of premium receipts net ofpaid losses andcommissions, investment income, net
proceeds from capital raising activities, which may include the issuance of
common shares, and proceeds from sales and redemption of investments. Cash is
used primarily to pay losses and loss expenses, general and administrative
expenses and dividends, with the remainder made available to our investment
managers for investment in accordance with our investment
policy.




The following table is a summary of our
statement of cash flows:




Three months ended March
      31,2009
                                          
                                          
                                          2008($ in
      thousands)Cash and cash equivalents provided
      by (used in):Operating
      activities
                                          
                                          $
                                          14,616
                                          
                                          
                                          $
                                          4,298Investing
      activities
                                          
                                          
                                          (70,934
                                          )
                                          
                                          
                                          (97,706
                                          )Financing
      activities
                                          
                                          
                                          19,614
                                          
                                          
                                          
                                          100,683Change in cash and cash
      equivalents
                                          
                                          $
                                          (36,704
                                          )
                                          
                                          $
                                          7,275




Cash flows from operations for thethree monthsendedMarch31, 2009were $14.6million compared to $4.3million for thethree monthsendedMarch31, 2008.This increase was due to the GMAC
Acquisition in the fourth quarter of 2008.





Investing cash flows consist primarily
of proceeds on the sale of investments and payments for investments acquired. We
used $70.9million in net cash for investing
activities during thethree
monthsendedMarch31, 2009compared to $97.7million for thethree monthsendedMarch31, 2008.





Cash flows provided by financing
activities were $19.6million for thethree monthsendedMarch31, 2009compared to $100.7million for thethree monthsendedMarch31, 2008.<

font style="DISPLAY: inline; COLOR: #000000">Included in cash flows provided by
financing activities for the three months ended March 31, 2009 were Trust
Preferred issuance (net of expenses) of $255.8 million , dividends paid of $3.5 million and
the repayment of $232.6 million of the proceeds from the securities sold
under agreements to repurchase, at contract value.




26





Our funds are primarily invested in
liquid, high-grade fixed income securities. As ofMarch31, 200997.6% of our fixed income portfolio
consisted of investment grade securities. The maturity distribution of our fixed
income portfolio (on a market value basis) as ofMarch31, 2009was as follows:




March 31,2009($ in
      thousands)Due in one year or
      less
                                              
                                              $
                                              22,697Due after one year through five
      years
                                              
                                              
                                              167,878Due after five years through ten
      years
                                              
                                              
                                              206,195Due after ten
      years
                                              
                                              
                                              53,845Mortgage and asset
      -backed
                                              
                                              
                                              768,836Total
                                              
                                              
                                              1,219,451




We do not believe that inflation has had
a material effect on our consolidated results of operations. The effects of
inflation are considered implicitly in pricing. Loss reserves are established to
recognize likely loss settlements at the date payment is made. Those reserves
inherently recognize the effects of inflation. The actual effects of inflation
on our results cannot be accurately known, however, until claims are ultimately
resolved.





Trust Preferred
Securities





On January 20, 2009, the Company
completed a private placement of 260,000 units (the “Units”), each Unit
consisting of $1,000 principal amount of capital securities (the “Trust
Preferred Securities”) of Maiden Capital Financing Trust (the “Trust”) (an
indirect wholly owned subsidiary of the Company) and 45 common shares, $.01 par
value, of the Company (the “Common Shares”), for a purchase price of $1,000.45
per Unit.  This resulted in gross proceeds to the Company of
$260.1 millionbefore $4.3 millionof placement agent fees and
expenses.  11,700,000 Common Shares in the aggregate were issued by
the Company.  Certain trusts established by Michael Karfunkel and
George Karfunkel, two of the Company’s founding shareholders, purchased an
aggregate of 159,000 of the Units or 61%.  The remaining 101,000 Units
were purchased by existing institutionalshareholders of the Company.




The Trust used the proceeds from the
sale of the Trust Preferred Securities to purchase a subordinated debenture (the
“Debenture”) in the principal amount of $260millionissued by the Company’s wholly owned
subsidiary, Maiden Holdings North America, Ltd. (“Maiden NA”).





As a consequence of the issuance of a
majority of the Units to a related party under FASB Interpretation 46R
Consolidation of Variable Interest Entities (“FIN 46R”), the Trust is a variable
interest entity and the Company is deemed to be the Primary beneficiary and is
required to consolidate the Trust. The issuance of common shares associated with
the Trust Preferred Securities resulted in an original issuance discount of$44.9 millionbased on market price on January 20,
2009. The discount is amortized over 30 years based on the effective interest
method. The Debentures and Trust Preferred Securities mature in 2039 and carrya stated or coupon rate of
14% withan effective
interest rate of 16.95%. As of March 31, 2009, the stated
value of the Trust Preferred Securities was $215,084 which comprises the
principal amount of $260millionand unamortized
discount of $44.9
million.





Securities
Sold Under Agreements to Repurchase, at Contract Value





The Company enters into repurchase
agreements. The agreements are accounted for as collateralized borrowing
transactions and are recorded at contract amounts. The Company receives cash or
securities, that it invests or hold in short term or fixed income securities.In March 2009 the Company
chose to end all of its agreements and repaid all amounts then outstanding from
existing cash resources.Interest expense associated with these
repurchase agreements for the three months ended March 31, 2009and 2008was $0.8millionand $0.4 million, respectively.





27




Restrictions, Collateral and Specific
Requirements





The jurisdictions in which our operating
subsidiaries are licensed to write business impose regulations requiring
companies to maintain or meet various defined statutory ratios, including
solvency and liquidity requirements. Some jurisdictions also place restrictions
on the declaration and payment of dividends and other
distributions.





The payment of dividends from Maiden
Holdings’ Bermuda domiciled operating subsidiary is, under certain
circumstances, limited under Bermuda law, which requires our Bermuda operating
subsidiary to maintain certain measures of solvency and liquidity. Maiden
Holdings’U.S.domiciled operating subsidiaries
are subject to significant regulatory restrictions limiting their ability to
declare and pay dividends. The inability of the subsidiaries of Maiden Holdings
to pay dividends and other permitted distributions could have a material adverse
effect on Maiden Holdings’ cash requirements and ability to make dividend
payments on its common shares.





Maiden Holdings’ operating subsidiary in
Bermuda, Maiden Insurance, is neither licensed nor admitted as an insurer, nor
is it accredited as a reinsurer, in any jurisdiction in theUnited States. As a result, it is generally required
to post collateral security with respect to any reinsurance liabilities it
assumes from ceding insurers domiciled in theUnited Statesin order forU.S.ceding companies to obtain credit
on theirU.S.statutory financial statements
with respect to insurance liabilities ceded to them. Under applicable statutory
provisions, the security arrangements may be in the form of letters of credit,
reinsurance trusts maintained by trustees or funds-withheld arrangements where
assets are held by the ceding company.





At this time, Maiden Insurance uses
trust accounts primarily to meet collateral requirements - cash equivalents and
investments pledged in favor of ceding companies in order to comply with
relevant insurance regulations. As ofMarch31, 2009, total trust account deposits were
$1.13billion compared to $0 as ofMarch 31, 2008. For the Quota Share Agreement with
AII, Maiden Insurance has also loaned funds totaling $168.0 million and $113.5
million as ofMarch31, 2009and 2008, respectively, to AmTrust’sBermudareinsurance subsidiary to satisfy
collateral requirements.





In addition, Maiden Insurance has
outstanding letters of credit totaling $15.89million and $0 as ofMarch31, 2009and 2008, respectively.





Collateral arrangements with ceding
insurers may subject our assets to security interests or require that a portion
of our assets be pledged to, or otherwise held by, third parties. Both our trust
accounts and letter of credit are fully collateralized by assets held in
custodial accounts. Although the investment income derived from our assets while
held in trust accrues to our benefit, the investment of these assets is governed
by the terms of the letter of credit facilities or the investment regulations of
the state or territory of domicile of the ceding insurer, which may be more
restrictive than the investment regulations applicable to us under Bermuda law.
The restrictions may result in lower investment yields on these assets, which
may adversely affect our profitability.





We do not currently anticipate that the
restrictions on liquidity resulting from restrictions on the payments of
dividends by our subsidiary companies or from assets committed in trust accounts
or to collateralize the letter of credit facilities will have a material impact
on our ability to carry out our normal business activities, including, our
ability to make dividend payments on our common shares.In addition, the terms of the Debentures
would limit, in the event of certain circumstances, Maiden NA’s ability to pay
dividends to the Company.





Investment Portfolio





Our investment portfolio, including cash
and cash equivalentsand
restricted cash, increasedby$16.1million, or1.0% to $1,682million at March 31, 2009from $1,666million as of December 31,
2008.Our fixed maturities are classified as
available for sale (99.6%) as of March 31, 2009, as defined by SFAS No. 115,
“Accounting for Certain Investments in Debt and Equity Securities.” As such, the
reported value of those securities is equal to their fair value. Our fixed
maturity securities, gross, as of this date had a fair value of $1,219.5million and an amortized cost of
$1,279.9million.Our investment portfolio is
summarized in the table below by type of investment:





28




(Unaudited)
                                                    March
      31, 2009
                                                  
                                                  
                                                  December
      31, 2008Fair
      value
                                                  
                                                  
                                                  Percentage
      of portfolio
                                                  
                                                  
                                                  Fair
      value
                                                  
                                                  
                                                  Percentage
      of portfolio($ in
      thousands)
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  ($ in
      thousands)U.S.
      – treasury bonds
                                                  
                                                  $
                                                  33,750
                                                  
                                                  
                                                  
                                                  2.8
                                                  %
                                                  
                                                  $
                                                  38,527
                                                  
                                                  
                                                  
                                                  3.4
                                                  %U.S.
      Agency - mortgage backed securities
                                                  
                                                  
                                                  768,836
                                                  
                                                  
                                                  
                                                  62.8
                                                  %
                                                  
                                                  
                                                  771,899
                                                  
                                                  
                                                  
                                                  68.6
                                                  %Corporate
      fixed maturities
                                                  
                                                  
                                                  405,624
                                                  
                                                  
                                                  
                                                  33.1
                                                  %
                                                  
                                                  
                                                  309,529
                                                  
                                                  
                                                  
                                                  27.5
                                                  %Municipalities
                                                  
                                                  
                                                  11,241
                                                  
                                                  
                                                  
                                                  0.9
                                                  %
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  
                                                  -
                                                  %Other
      investments
                                                  
                                                  
                                                  5,386
                                                  
                                                  
                                                  
                                                  0.4
                                                  %
                                                  
                                                  
                                                  5,291
                                                  
                                                  
                                                  
                                                  0.5
                                                  %Total
      available for sale investments
                                                  
                                                  $
                                                  1,224,837
                                                  
                                                  
                                                  
                                                  100.0
                                                  %
                                                  
                                                  $
                                                  1,125,246
                                                  
                                                  
                                                  
                                                  100.0
                                                  %




Quarterly, the Companyevaluates for
other-than-temporary-impairment, whereby it evaluates each security which has an
unrealized loss as of the end of the subject reporting period.We usea set of quantitative and qualitative
criteria to review our investment portfolio to evaluate the necessity of
recording impairment losses for other-than-temporary declines in the fair value
of our investments. Some of the criteria we consider
include:





·
            how long and by how much the fair
      value of the security has been below its amortized
      cost;


·
            the financial condition and
      near-term prospects of the issuer of the security, including any specific
      events that may affect its operations or
  earnings;


·
            our intent and ability to keep the
      security for a sufficient time period for it to recover its
      value;


·
            any nonpayment of scheduled
      interest payments; and


·
            the occurrence of discrete credit
      event resulting in (i) the issuer defaulting on material outstanding
      obligation (ii) the issuer seeking protection under bankruptcy
      law.





Impairment of investment securities
results in a charge to operations when a market decline below cost is deemed to
be other-than-temporary.During the three months ended March 31,2009 and2008, based on the criteria above, we
determined thatnosecurities were
other-than-temporarily-impaired.





At March 31, 2009, the Company had
$86.3million of gross unrealized losses
related to available-for-sale fixed income securities. Corporate bonds represent33% of the fair value of our fixed
maturities and96% of the total unrealized losses of our
fixed maturities. The Company owns62corporate bonds in the industrial, bank
and financial and other sectors, which have a fair value of approximately6%,24% and3%, respectively, and2%,94% and0% of total unrealized losses,
respectively, of our fixed maturities. The Company believes that the unrealized
losses in these securities are the result, primarily, of general economic
conditions and not the condition of the issuers, which we believe are solvent
and have the ability to meet their obligations. Therefore, the Company expects
that the market price for these securities should recover within a reasonable
time.





Item 3. Exposures to Market
Risk





Quantitative and Qualitative Disclosures
about Market Risk




Market risk is the risk that we will
incur losses in our investments due to adverse changes in market rates and
prices. Market risk is directly influenced by the volatility and liquidity in
the market in which the related underlying assets are invested. We believe that
we are principally exposed to two types of market risk: changes in interest
rates and changes in credit quality of issuers of investment securities and
reinsurers.





Interest Rate Risk




Interest rate risk is the risk that we
may incur economic losses due to adverse changes in interest rates. The primary
market risk to the investment portfolio is interest rate risk associated with
investments in fixed maturity securities. Fluctuations in interest rates have a
direct impact on the market valuation of these securities. At March 31, 2009, we
had fixed maturity securities with a fair value of $1,219.5 million that are
subject to interest rate risk.





29





The table below summarizes the interest
rate risk associated with our fixed maturity securities by illustrating the
sensitivity of the fair value and carrying value of our fixed maturity
securities as of March 31, 2009to selected hypothetical changes in
interest rates, and the associated impact on our stockholders’
equity.Temporary changes in the fair value of
our fixed maturity securities that are held as available-for-sale do impact the
carrying value of these securities and are reported in our shareholders’ equity
as a component of other comprehensive income.The selected scenarios in the table
below are not predictions of future events, but rather are intended to
illustrate the effect such events may have on the fair value and carrying value
of our fixed maturity securities and on our shareholders’ equity, as of March
31, 2009.








Hypothetical Change in Interest Rates
                    
                    Fair
      Value
                    
                    
                    Estimated
      Change in Fair Value
                    
                    
                    Hypothetical
      Percentage Increase (Decrease) in Shareholders’ Equity200 basis point
      increase
                    
                    $
                    1,172,035
                    
                    
                    $
                    (47,416
                    )
                    
                    
                    (9
                    %)100 basis point
      increase
                    
                    
                    1,194,939
                    
                    
                    
                    (24,512
                    )
                    
                    
                    (4
                    %)No change
                    
                    
                    1,219,451
                    
                    
                    
                    -
                    
                    
                    
                    0
                    %100 basis point
      decrease
                    
                    
                    1,243,812
                    
                    
                    
                    24,362
                    
                    
                    
                    4
                    %200 basis point
      decrease
                    
                    $
                    1,272,076
                    
                    
                    $
                    52,625
                    
                    
                    
                    10
                    %





The interest rate sensitivity on the
$168 million loan to related party which carries an interest rate of one month
LIBOR plus 90 basis points, a fluctuation of 100 and 200 basis points in LIBOR
would affect our earnings and cash flows by $1.7 million and $3.4 million,
respectively, on an annual basis, but would not affect the carrying value of the
loan.





Credit Risk




In providing reinsurance, wehavepremiums receivable subject to credit
risk of the ceding company. Our credit risk results from our insureds’ potential
inability to meet their premium obligations. We also are exposed to credit risk
on our investment portfolio. Our credit risk is the potential loss in market
value resulting from adverse change in the borrower’s ability to repay its
obligations. Our investment objectives are to preserve capital, generate
investment income and maintain adequate liquidity for the payment of claims and
debt service, if any. We seek to achieve these goals by investing in a
diversified portfolio of securities. We manage credit risk through regular
review and analysis of the creditworthiness of all investments and potential
investments. If we retrocede business to other reinsurers, we will have
reinsurance recoverables subject to credit risk. To mitigate the risk of these
counterparties’ nonpayment of amounts due, we will establish business and
financial standards for reinsurer approval, incorporating ratings and outlook by
major rating agencies and considering then-current market information. Further,
we are subject to the credit risk that AII and/or AmTrust will fail to perform
their obligations to pay interest on and repay principal of amounts loaned to
AII pursuant to its loan agreement with Maiden Insurance, and to reimburse
Maiden Insurance for any assets or other collateral of Maiden that AmTrust’s
U.S. insurance company subsidiaries apply or retain, and income on those
assets.





Off-Balance Sheet
Transactions




We have no off-balance sheet
arrangements or transactions with unconsolidated, special purpose
entities.





Item 4. Controls and
Procedures





The principal executive officer and
principal financial officer of the Company have evaluated the Company’s
disclosure controls and procedures and have concluded that, as of the end of the
period covered by this report, such disclosure controls and procedures were
effective in ensuring that information required to be disclosed by the Company
in the reports that it files or submits under the Securities Exchange Act of
1934 is timely recorded, processed, summarized and reported. The principal
executive officer and principal financial officer also concluded that such
disclosure controls and procedures were effective in ensuring that information
required to be disclosed by the Company in the reports that it files or submits
under such Act is accumulated and communicated to the Company’s management,
including its principal executive officer and principal financial officer, as
appropriate, to allow timely decisions regarding required disclosure. During the
most recent fiscal quarter, there have been no changes in the Company’s internal
controls over financial reporting that have materially affected, or are
reasonably likely to materially affect, the Company’s internal control over
financial reporting.





30




PART II - OTHER
INFORMATION





Item
1. Legal Proceedings.





In April
2009, the Company learned that Bentzion S. Turin, Holdings and Maiden
Insurance's former Chief Operating Officer, General Counsel and Secretary, sent
a letter to the U.S. Department of Labor claiming that his employment with us
was terminated in retaliation for corporate whistleblowing in violation of the
whistleblower protection provisions of the Sarbanes-Oxley Act of
2002.  Mr. Turin alleged concerns regarding corporate governance with
respect to negotiation of the terms of our January 2009 Trust Preferred offering
and seeks reinstatement as Holdings and Maiden Insurance's Chief Operating
Officer, General Counsel and Secretary, back pay and legal fees
incurred.  The Company believes that it had ample reason for
terminating such employment for good and sufficient legal cause, and the Company
believes that the claim is without merit and is vigorously defending this
claim.





Item
2.  Unregistered Sales of Equity Securities and Use of
Proceeds





On
February 24, 2009, we granted each of John Marshaleck, our Chief Operating
Officer, and Karen Schmitt, the President of Maiden Re, options to purchase
75,000 common shares with an exercise price of $4.45 per share.





The
issuance of such options were not registered under the Securities Act of 1933,
as amended, in reliance on the exemption from federal registration under Section
4(2) of the Securities Act, based on the Company’s belief that the offer and
sale of said securities did not involve any public offering as each investor was
“accredited” and no general solicitation has been involved in the
offering.





Item
6. Exhibits.





Exhibit
      Number
                  
                  Description4.1
                  
                  Amended
      and Restated Declaration of Trust, dated as of January 20, 2009, by and
      among Wilmington Trust Company, as Institutional Trustee and as Delaware
      Trustee, Maiden Holdings North America, Ltd., as Sponsor, and the
      Administrators (as named therein).*4.2
                  
                  Indenture,
      dated January 20, 2009, between Maiden Holdings North America, Ltd. and
      Wilmington Trust Company, as Trustee, relating to Fixed Rate Subordinated
      Deferable Interest Debentures Due 2039 (including the form of
      debenture).*4.3
                  
                  Guarantee
      Agreement, dated as of January 20, 2009, by and between Maiden Holdings,
      Ltd., as Guarantor, and Wilmington Trust Company, as
    Trustee.*4.4
                  
                  Guarantee
      Agreement, dated as of January 20, 2009, by and between Maiden Holdings
      North America, Ltd., as Guarantor, and Wilmington Trust Company, as
      Trustee.*10.1
                  
                  Form
      of Purchase Agreement by and among Maiden Holdings, Ltd., Maiden Capital
      Financing Trust, Maiden Holdings North America, Ltd. and various
      institutional investors dated as of January 14, 2009.*31.1
                  
                  Certification
      of the Chief Executive Officer, pursuant to Rule 13a-14(a) or 15d-14(a),
      for the quarter ended March 31, 2009.31.2
                  
                  Certification
      of the Chief Financial Officer, pursuant to Rule 13a-14(a) or 15d-14(a),
      for the quarter ended March 31, 2009.32.1
                  
                  Certification
      of the Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, for
      the quarter ended March 31, 2009.32.2
                  
                  Certification
      of the Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, for
      the quarter ended March 31,
2009.





*
            Incorporated
      by reference to the Company’s Current Report on Form 8-K filed with the
      SEC on January 26, 2009.




31




SIGNATURES





Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.




Maiden
      Holdings, Ltd.(Registrant)Date:May 15, 2009
                    
                    /s/ ARTURO
      M. RASCHBAUMArturo
      M. RaschbaumPresident and Chief Executive
      Officer




/s/ MICHAEL
      J. TAITMichael
      J. TaitChief Financial
      Officer


32