SEC Filing | Maiden Holdings, Ltd.

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Unassociated Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2011

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

For the transition period from _________ to _________

Commission File No. 001-34042

MAIDEN HOLDINGS, LTD.

(Exact name of registrant as specified in its charter)

Bermuda (State or other jurisdiction of incorporation or organization)	98-0570192 (IRS Employer Identification No.)

131 Front Street, Hamilton, Bermuda (Address of principal executive offices)	HM12 (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 x No ¨

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 x No ¨

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 ¨		Accelerated filer x

Non-accelerated filer ¨ (Do not check if a smaller reporting company)		Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act). Yes ¨ No x

As of August 1, 2011, the Registrant had one class of Common Stock ($.01 par value),

of which 72,107,197 shares were outstanding.

INDEX

		Page
PART I - Financial Information
Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets as of June 30, 2011 (unaudited) and December 31, 2010	3

	Condensed Consolidated Statements of (Loss) Income for the three and six months ended June 30, 2011 and 2010 (unaudited)	4

	Condensed Consolidated Statements of Comprehensive (Loss) Income for the three and six months ended June 30, 2011 and 2010 (unaudited)	5

	Condensed Consolidated Statements of Changes in Shareholders’ Equity for the six months ended June 30, 2011 and 2010 (unaudited)	6

	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2011 and 2010 (unaudited)	7

	Notes to Condensed Consolidated Financial Statements (unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	58

Item 4.	Controls and Procedures	60

PART II - Other Information

Item 1	Legal Proceedings	61

Item 1A.	Risk Factors	61

Item 6.	Exhibits	62

	Signatures	63

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

MAIDEN HOLDINGS, LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands of U.S. dollars, except share and per share data)

	June 30, 2011 (Unaudited)			December 31, 2010 (Audited)
ASSETS
Investments:
Fixed maturities, available-for-sale, at fair value (Amortized cost 2011:$1,774,615; 2010: $1,819,775)	$	1,850,779		$	1,874,433
Fixed maturities, trading, at fair value (Amortized cost 2011:$50,172)		49,860			—
Other investments, at fair value (Cost 2011: $1,783; 2010: $5,751)		1,962			5,847
Total investments		1,902,601			1,880,280
Cash and cash equivalents		198,356			96,151
Restricted cash and cash equivalents		67,207			89,756
Accrued investment income		12,294			14,091
Reinsurance balances receivable, net (includes $185,563 and $95,227 from related parties in 2011 and 2010, respectively)		379,806			226,333
Funds withheld		145,515			152,713
Prepaid reinsurance premiums (includes $5,891 and $1,211 from related parties in 2011 and 2010, respectively)		37,555			28,992
Reinsurance recoverable on unpaid losses (includes $2,200 and $383 from related parties in 2011 and 2010, respectively)		15,587			6,656
Loan to related party		167,975			167,975
Deferred acquisition costs (includes $134,109 and $118,015 from related parties in 2011 and 2010, respectively)		245,423			203,631
Goodwill and intangible assets, net		101,284			103,905
Other assets		19,688			12,079
Total assets	$	3,293,291		$	2,982,562
LIABILITIES
Reserve for loss and loss adjustment expenses (includes $317,316 and $263,916 from related parties in 2011 and 2010, respectively)	$	1,279,709		$	1,226,773
Unearned premiums (includes $466,258 and $366,412 from related parties in 2011 and 2010, respectively)		841,017			657,556
Accrued expenses and other liabilities		90,206			56,368
Securities sold under agreements to repurchase, at contract value		—			76,225
Senior notes		107,500			—
Junior subordinated debt		215,228			215,191
Total liabilities		2,533,660			2,232,113
Commitments and Contingencies
EQUITY
Common shares ($0.01 par value; 73,112,966 and 73,069,436 shares issued in 2011 and 2010, respectively; 72,150,630 and 72,107,100 shares outstanding in 2011 and 2010, respectively)		731			731
Additional paid-in capital		577,904			577,135
Accumulated other comprehensive income		77,848			54,334
Retained earnings		106,654			121,775
Treasury shares, at cost (2011 and 2010: 962,336 shares)		(3,801	)		(3,801	)
Total Maiden shareholders’ equity		759,336			750,174
Noncontrolling interest in subsidiary		295			275
Total equity		759,631			750,449
Total liabilities and equity	$	3,293,291		$	2,982,562

See accompanying notes to the unaudited condensed consolidated financial statements.

MAIDEN HOLDINGS, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME

(in thousands of U.S. dollars, except share and per share data)

(Unaudited)

	For the three months ended June 30, 2011			For the three months ended June 30, 2010			For the six months ended June 30, 2011			For the six months ended June 30, 2010
Revenues:
Gross premiums written	$	462,395		$	334,784		$	933,172		$	662,166
Net premiums written	$	436,966		$	313,050		$	886,466		$	624,341
Change in unearned premiums		(69,183	)		(29,266	)		(172,148	)		(76,628	)
Net premiums earned		367,783			283,784			714,318			547,713
Other insurance revenue		2,179			—			6,834			—
Net investment income		19,818			18,875			38,959			36,456
Net realized and unrealized investment gains (losses)		591			535			638			847
Total revenues		390,371			303,194			760,749			585,016
Expenses:
Net loss and loss adjustment expenses		250,599			175,354			471,781			345,639
Commission and other acquisition expenses		105,824			88,447			212,896			165,843
General and administrative expenses		12,839			9,484			25,132			18,036
Interest and amortization expenses		9,292			9,116			18,410			18,231
Accelerated amortization of junior subordinated debt discount and issuance cost		20,313			—			20,313			—
Junior subordinated debt repurchase expense		15,050			—			15,050			—
Amortization of intangible assets		1,259			1,452			2,517			2,904
Foreign exchange (gains) losses		(939	)		414			(2,001	)		1,567
Total expenses		414,237			284,267			764,098			552,220
(Loss) income before income taxes		(23,866	)		18,927			(3,349	)		32,796
Income taxes:
Current tax expense		211			—			1,096			—
Deferred tax expense		295			290			582			590
Income tax expense		506			290			1,678			590
Net (loss) income		(24,372	)		18,637			(5,027	)		32,206
Less: Loss attributable to noncontrolling interest		6			—			3			—
Net (loss) income attributable to Maiden	$	(24,366	)	$	18,637		$	(5,024	)	$	32,206

Basic (loss) earnings per share attributable to Maiden shareholders	$	(0.34	)	$	0.27		$	(0.07	)	$	0.46
Diluted (loss) earnings per share attributable to Maiden shareholders	$	(0.34	)	$	0.26		$	(0.07	)	$	0.46
Dividends declared per common share	$	0.07		$	0.065		$	0.14		$	0.13

See accompanying notes to the unaudited condensed consolidated financial statements.

MAIDEN HOLDINGS, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(in thousands of U.S. dollars)

(Unaudited)

	For the three months ended June 30, 2011			For the three months ended June 30, 2010			For the six months ended June 30, 2011			For the six months ended June 30, 2010
Comprehensive (loss) income:
Net (loss) income	$	(24,372	)	$	18,637		$	(5,027	)	$	32,206
Other comprehensive income
Unrealized holdings net gains arising during the period		18,216			4,399			21,762			28,923
Adjustment for reclassification of net realized (gains) losses recognized in net (loss) income		(93	)		(3,869	)		(140	)		(4,181	)
Foreign currency translation adjustment		528			—			1,915			—
Other comprehensive income		18,651			530			23,537			24,742
Comprehensive (loss) income		(5,721	)		19,167			18,510			56,948
Net loss attributable to noncontrolling interest		6			—			3			—
Other comprehensive income attributable to noncontrolling interest		(7	)		—			(23	)		—
Comprehensive income attributable to noncontrolling interest		(1	)		—			(20	)		—
Comprehensive (loss) income attributable to Maiden	$	(5,722	)	$	19,167		$	18,490		$	56,948

See accompanying notes to the unaudited condensed consolidated financial statements.

MAIDEN HOLDINGS, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(in thousands of U.S. dollars)

(Unaudited)

				Maiden Shareholders’ Equity
For the six months ended June 30, 2011	Total equity			Retained earnings			Treasury shares			Accumulated other comprehensive income		Common shares		Additional paid-in capital		Noncontrolling interest in subsidiary
Beginning balance	$	750,449		$	121,775		$	(3,801	)	$	54,334	$	731	$	577,135	$	275
Exercise of options and issuance of shares		91													91		—
Net loss		(5,027	)		(5,024	)											(3	)
Change in net unrealized gains on investments		21,622									21,622						—
Foreign currency translation adjustment		1,915									1,892						23
Share based compensation		678													678		—
Dividends on common shares		(10,097	)		(10,097	)											—
Ending balance	$	759,631		$	106,654		$	(3,801	)	$	77,848	$	731	$	577,904	$	295

				Maiden Shareholders’ Equity
For the six months ended June 30, 2010	Total equity			Retained earnings			Treasury shares			Accumulated other comprehensive income		Common shares		Additional paid-in capital		Noncontrolling interest in subsidiary
Beginning balance	$	676,526		$	70,781		$	(3,801	)	$	32,747	$	713	$	576,086	$	—
Exercise of options and issuance of shares		3													3		—
Net income		32,206			32,206												—
Change in net unrealized gains on investments		24,742									24,742						—
Share based compensation		450													450		—
Dividends on common shares		(9,138	)		(9,138	)											—
Ending balance	$	724,789		$	93,849		$	(3,801	)	$	57,489	$	713	$	576,539	$	—

See accompanying notes to the unaudited condensed consolidated financial statements.

MAIDEN HOLDINGS, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands of U.S. dollars)

(Unaudited)

For the six months ended June 30,	2011			2010
Cash flows from operating activities:
Net (loss) income	$	(5,027	)	$	32,206
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of intangibles		5,213			3,530
Net realized and unrealized (gains) losses on investments		(638	)		(847	)
Foreign exchange (gains) losses		(2,001	)		1,567
Amortization of share-based compensation expense, bond premium and discount and junior subordinated debt discount, net		19,503			(3,599	)
Changes in assets - (increase) decrease:
Reinsurance balances receivable, net		(152,318	)		(77,450	)
Funds withheld		16,111			—
Prepaid reinsurance premiums		(8,563	)		(3,010	)
Accrued investment income		1,797			(2,238	)
Deferred commission and other acquisition costs		(41,037	)		(23,929	)
Other assets		(3,597	)		(42,745	)
Changes in liabilities – increase (decrease):
Reserve for loss and loss adjustment expenses		36,313			70,776
Unearned premiums		181,181			81,207
Accrued expenses and other liabilities		(3,283	)		36,978
Net cash provided by operating activities		43,654			72,446
Cash flows from investing activities:
Purchases of investments:
Purchases of fixed-maturity securities – available-for-sale		(257,268	)		(406,277	)
Purchases of fixed-maturity securities – trading		(152,844	)		(509,394	)
Purchases of other investments		(834	)		(123	)
Sale of investments:
Proceeds from sales of fixed-maturity securities – available-for-sale		76,569			173,687
Proceeds from sales of fixed-maturity securities – trading and short sales		103,482			558,388
Proceeds from maturities and calls of fixed-maturity securities – available-for-sale		243,891			241,703
Proceeds from redemption of other investments		4,242			6
Decrease (increase) in restricted cash and cash equivalents		22,549			(23,452	)
Purchase of capital assets		(830	)		(918	)
Net cash provided by investing activities		38,957			33,620
Cash flows from financing activities:
Repurchase agreements, net		(76,225	)		(24,429	)
Senior notes issuance		107,500			—
Senior notes issuance cost		(2,811	)		—
Common share issuance		91			3
Dividends paid		(10,095	)		(9,138	)
Net cash provided by (used in) financing activities		18,460			(33,564	)
Effect of exchange rate changes on foreign currency cash		1,134			(835	)
Net increase in cash and cash equivalents		102,205			71,667
Cash and cash equivalents, beginning of period		96,151			107,396
Cash and cash equivalents, end of period	$	198,356		$	179,063

See accompanying notes to the unaudited condensed consolidated financial statements.

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of U.S. dollars, except share and 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 (the “Company”) and have been prepared in accordance with generally accepted accounting principles in the United States (“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, 2010.

Certain reclassifications have been made for 2010 to conform to the 2011 presentation and have no impact on net income previously reported.

2. Recent Accounting Pronouncements

Adoption of Accounting Standards Updates

Presentation of Comprehensive Income

In June 2011, the Financial Accounting Standards Board (“FASB”) issued updated guidance to increase the prominence of items reported in other comprehensive income by eliminating the option of presenting components of comprehensive income as part of the statement of changes in shareholders’ equity. The updated guidance requires that all non-owner changes in shareholders’ equity be presented either as a single continuous statement of comprehensive income or in two separate but consecutive statements. The updated guidance is to be applied retrospectively and is effective for the quarter ending March 31, 2012. Early adoption is permitted. The adoption of this guidance resulted in a change in the presentation of the Company’s financial statements but did not have any impact on the Company’s results of operations, financial position or liquidity.

Intangibles — Goodwill and Other

In December 2010, the FASB issued updated guidance that modifies the goodwill impairment test. Under the updated guidance, goodwill is tested for impairment using a two-step process. The first step is to identify potential impairments by comparing the estimated fair value of a reporting unit to its carrying value, including goodwill. If the carrying value of a reporting unit exceeds the estimated fair value, a second step is performed to measure the amount of impairment, if any. The second step is to determine the implied fair value of the reporting unit’s goodwill, measured in the same manner as goodwill is recognized in a business combination, and compare the implied fair value with the carrying amount of the goodwill. If the carrying amount exceeds the implied fair value of the reporting unit’s goodwill, an impairment loss is recognized in an amount equal to that excess.

The updated guidance requires that, if the carrying amount of a reporting unit becomes zero or negative, the second step of the impairment test must be performed when it is more likely than not that a goodwill impairment loss exists. In considering whether it is more likely than not that an impairment loss exists, a company is required to evaluate qualitative factors, including the factors presented in existing guidance that trigger an interim impairment test of goodwill (e.g., a significant adverse change in business climate or an anticipated sale of a reporting unit). The provisions of the guidance were effective for annual and interim periods beginning after December 15, 2010. The adoption of this guidance in January 2011 did not have any effect on the Company’s results of operations, financial position or liquidity.

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of U.S. dollars, except share and per share data)

(Unaudited)

2. Recent Accounting Pronouncements (continued)

Deferred Acquisition Costs

In October 2010, the FASB issued updated guidance to address the diversity in practice for the accounting for costs associated with acquiring or renewing insurance contracts. This guidance modifies the definition of acquisition costs to specify that a cost must be directly related to the successful acquisition of a new or renewal insurance contract in order to be deferred. If application of this guidance would result in the capitalization of acquisition costs that had not previously been capitalized by a reporting entity, the entity may elect not to capitalize those costs. The updated guidance is effective on either a retrospective or prospective basis for interim and annual reporting periods beginning after December 15, 2011, with early adoption permitted as of the beginning of a company’s annual period. We are currently evaluating the impact of the adoption of this new guidance on our consolidated results of operations and financial condition.

Accounting Standards Not Yet Adopted

Transfers and Servicing: Reconsideration of Effective Control for Repurchase Agreement

In April 2011, the FASB amended its guidance on accounting for repurchase agreements. The amendments simplify the accounting by eliminating the requirement that the transferor demonstrate it has adequate collateral to fund substantially all the cost of purchasing replacement assets. Under the amended guidance, a transferor maintains effective control over transferred financial assets (and thus accounts for the transfer as a secured borrowing) if there is an agreement that both entitles and obligates the transferor to repurchase the financial assets before maturity and if all of the following conditions previously required are met; (i) financial assets to be repurchased or redeemed are the same or substantially the same as those transferred, (ii) repurchase or redemption date before maturity at a fixed or determinable price, and (iii) the agreement is entered into contemporaneously with, or in contemplation of, the transfer. As a result, more arrangements could be accounted for as secured borrowings rather than sales. The updated guidance is effective on a prospective basis for interim and annual reporting periods beginning on or after December 15, 2011, early adoption is prohibited. We are currently evaluating the impact of the adoption of this new guidance on our consolidated results of operations and financial condition.

Amendments to Achieve Common Fair Value Measurements and Disclosure Requirements in U.S. GAAP and IFRS

In May 2011, the FASB issued updated guidance that addresses the objective of the FASB and the International Accounting Standards Board (“IASB”) to develop common requirements for measuring and for disclosing information about fair value measurements with U.S. GAAP and International Financial Reporting Standards (“IFRS”). The FASB and the IASB worked together to ensure that fair value has the same meaning in U.S. GAAP and IFRS and that their respective fair value measurement and disclosure requirements are the same (except for minor differences in wording and style). The FASB and the IASB concluded that this guidance will improve comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with U.S. GAAP and IFRS. The guidance explains how to measure fair value. This updated guidance does not require additional fair value measurements and are not intended to establish valuation standards or affect valuation practices outside of financial reporting. The updated guidance is effective during interim and annual periods after December 15, 2011. Early application is not permitted. The adoption of this guidance is not expected to have any effect on the Company’s results of operations, financial position or liquidity.

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of U.S. dollars, except share and 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 and other investments as of June 30, 2011 and December 31, 2010 are as follows:

As of June 30, 2011	Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Fixed Maturities – available-for-sale:
U.S. treasury bonds	$	44,241	$	1,357	$	—		$	45,598
U.S. agency bonds – mortgage backed		994,852		30,311		(2,019	)		1,023,144
U.S. agency bonds – other		16,755		1,468		—			18,223
Non-U.S. government bonds		14,687		1,500		—			16,187
Corporate bonds		661,847		52,446		(9,013	)		705,280
Municipal bonds		42,233		646		(532	)		42,347
Total available-for-sale fixed maturities	$	1,774,615	$	87,728	$	(11,564	)	$	1,850,779

Other investments	$	1,783	$	179	$	—		$	1,962

As of December 31, 2010	Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Fixed Maturities – available-for-sale:
U.S. treasury bonds	$	92,043	$	1,108	$	(1,422	)	$	91,729
U.S. agency bonds – mortgage backed		951,465		22,351		(4,348	)		969,468
U.S. agency bonds – other		41,770		1,638		—			43,408
Non-U.S. government bonds		15,494		444		—			15,938
Corporate bonds		673,756		46,647		(11,410	)		708,993
Municipal bonds		45,247		441		(791	)		44,897
Total available-for-sale fixed maturities	$	1,819,775	$	72,629	$	(17,971	)	$	1,874,433

Other investments	$	5,751	$	96	$	—		$	5,847

The contractual maturities of our fixed maturities, available-for-sale as of June 30, 2011 are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or repay obligations prior to contractual maturity.

As of June 30, 2011	Amortized Cost		Fair Value		% of Total Fair Value
Maturity
Due in one year or less	$	65,769	$	66,404		3.6	%
Due after one year through five years		221,973		228,070		12.3	%
Due after five years through ten years		420,133		455,941		24.6	%
Due after ten years		71,888		77,220		4.2	%
		779,763		827,635		44.7	%
U.S. agency bonds – mortgage backed		994,852		1,023,144		55.3	%
Total	$	1,774,615	$	1,850,779		100.0	%

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of U.S. dollars, except share and per share data)

(Unaudited)

3. Investments (continued)

The following tables summarize our available-for-sale securities and other investments 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					Total
As of June 30, 2011	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Available-for-sale securities:
U.S. agency bonds – mortgage backed	$	218,857	$	(2,019	)	$	—	$	—		$	218,857	$	(2,019	)
Corporate bonds		55,065		(1,035	)		129,523		(7,978	)		184,588		(9,013	)
Municipal bonds		15,916		(532	)		—		—			15,916		(532	)
Total temporarily impaired available-for-sale securities	$	289,838	$	(3,586	)	$	129,523	$	(7,978	)	$	419,361	$	(11,564	)

As of June 30, 2011, there were approximately 21 securities in an unrealized loss position with a fair value of $419,361 and unrealized losses of $11,564. Of these securities, there are 7 securities that have been in an unrealized loss position for 12 months or greater with a fair value of $129,523 and unrealized losses of $7,978.

	Less than 12 Months					12 Months or More					Total
As of December 31, 2010	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Available-for-sale securities:
U.S. treasury bonds	$	47,165	$	(1,422	)	$	—	$	—		$	47,165	$	(1,422	)
U.S. agency bonds – mortgage backed		315,370		(4,348	)		—		—			315,370		(4,348	)
Corporate bonds		86,976		(1,555	)		166,062		(9,855	)		253,038		(11,410	)
Municipal bonds		27,315		(791	)		—		—			27,315		(791	)
Total temporarily impaired available-for-sale securities	$	476,826	$	(8,116	)	$	166,062	$	(9,855	)	$	642,888	$	(17,971	)

As of December 31, 2010, there were approximately 32 securities in an unrealized loss position with a fair value of $642,888 and unrealized losses of $17,971. Of these securities, there are 9 securities that have been in an unrealized loss position for 12 months or greater with a fair value of $166,062 and unrealized losses of $9,855.

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 June 30, 2011, 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 three and six months ended June 30, 2011 and 2010, the Company recognized no OTTI. Based on our qualitative and quantitative OTTI review of each asset class within our fixed maturity portfolio, the remaining unrealized losses on fixed maturities at June 30, 2011 were primarily due to widening of credit spreads relating to the market illiquidity, rather than credit events. Because we do not intend to sell these securities and it is not more likely than not that we will be required to sell 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 June 30, 2011.

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of U.S. dollars, except share and per share data)

(Unaudited)

3. Investments (continued)

(b) Other Investments

The table below shows our portfolio of other investments:

	June 30, 2011				December 31, 2010
Hedge fund	$	—	—		$	4,846	82.9	%
Investments in limited partnerships		1,962	100.0	%		1,001	17.1	%
Total other investments	$	1,962	100.0	%	$	5,847	100.0	%

The Company has an unfunded commitment on its investments in limited partnerships of approximately $4,038 as of June 30, 2011.

Realized gains or losses on the sale of investments are determined on the basis of the first in first out cost method and include adjustments to the cost basis of investments for declines in value that are considered to be other-than-temporary. The following provides an analysis of realized and unrealized gains and losses for the three and six months ended June 30, 2011 and 2010:

For the three months ended June 30, 2011	Gross Gains		Gross losses			Net
Available-for-sale securities	$	211	$	(24	)	$	187
Trading securities		810		—			810
Other investments		—		(94	)		(94	)
Net realized gains		1,021		(118	)		903
Unrealized loss on trading securities		—		(312	)		(312	)
Net realized and unrealized gains	$	1,021	$	(430	)	$	591

For the three months ended June 30, 2010	Gross Gains		Gross losses			Net
Available-for-sale securities	$	5,488	$	(1,619	)	$	3,869
Trading securities		522		(1,137	)		(615	)
Other investments		—		—			—
Net realized gains		6,010		(2,756	)		3,254
Unrealized loss on short sales		—		(2,719	)		(2,719	)
Net realized and unrealized gains	$	6,010	$	(5,475	)	$	535

For the six months ended June 30, 2011	Gross Gains		Gross losses			Net
Available-for-sale securities	$	274	$	(40	)	$	234
Trading securities		810		—			810
Other investments		—		(94	)		(94	)
Net realized gains		1,084		(134	)		950
Unrealized loss on trading securities		—		(312	)		(312	)
Net realized and unrealized gains	$	1,084	$	(446	)	$	638

For the six months ended June 30, 2010	Gross Gains		Gross losses			Net
Available-for-sale securities	$	5,800	$	(1,619	)	$	4,181
Trading securities		522		(1,137	)		(615	)
Other investments		—		—			—
Net realized gains		6,322		(2,756	)		3,566
Unrealized loss on short sales		—		(2,719	)		(2,719	)
Net realized and unrealized gains	$	6,322	$	(5,475	)	$	847

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of U.S. dollars, except share and per share data)

(Unaudited)

3. Investments (continued)

Proceeds from sales of fixed maturities classified as available-for-sale were $76,569 and $173,687 for the six months ended June 30, 2011 and 2010, respectively.

Net unrealized gain (loss) on available-for-sale securities and other investments was as follows:

	June 30, 2011		June 30, 2010
Fixed maturities	$	76,164	$	57,613
Other investments		179		(124	)
Total net unrealized gains		76,343		57,489
Deferred income tax expense		33		—
Net unrealized gains, net of deferred income tax	$	76,376	$	57,489
Change in unrealized gain	$	21,622	$	24,742

(d) Restricted Cash and Investments

We are required to maintain assets on deposit to support our reinsurance operations and 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 primarily cash and highly rated fixed maturity securities. The fair value of our restricted assets was as follows:

	June 30, 2011		December 31, 2010
Restricted cash – third party agreements	$	45,263	$	59,615
Restricted cash – related party agreements		21,448		29,743
Restricted cash – U.S. state regulatory authorities		496		398
Total restricted cash		67,207		89,756
Restricted investments – in trust for third party agreements at fair value (Amortized cost: 2011 – $872,700; 2010 – $1,024,895)		899,015		1,053,982
Restricted investments – in trust for related party agreements at fair value (Amortized cost: 2011 – $413,631; 2010 – $339,810)		441,750		361,424
Restricted investments – in trust for U.S. state regulatory authorities (Amortized cost: 2011 – $13,192; 2010 – $13,198)		13,824		13,690
Total restricted investments		1,354,589		1,429,096
Total restricted cash and investments	$	1,421,796	$	1,518,852

(e) Other

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 holds in short term or fixed income securities. During the period, the Company repaid the entire balance outstanding of $76,225. Interest expense associated with these repurchase agreements was $0 and $756 for the three and six months ended June 30, 2011, respectively, (2010 - $298 and $355, respectively) out of which $0 was accrued as of June 30, 2011 (December 31, 2010 - $702).

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of U.S. dollars, except share and 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 ASC 820. 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 ASC 820 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 ASC 820, 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.

ASC 825, “Disclosure about Fair Value of Financial Instruments,” requires all entities to disclose the fair value of their financial instruments, both assets and liabilities recognized and not recognized in the balance sheet, for which it is practicable to estimate fair value.

The following describes the valuation techniques used by the Company to determine the fair value of financial instruments held as of June 30, 2011.

U.S. government and U.S. government agencies: Comprised primarily of bonds issued by the U.S. Treasury, the Federal Home Loan Bank, the Federal Home Loan Mortgage Corporation, Federal Farm Credit Bank, Government National Mortgage Association and the Federal National Mortgage Association. The fair values of U.S. government securities are based on quoted market prices in active markets, and are included in the Level 1 fair value hierarchy. We believe the market for U.S. Treasury securities is an actively traded market given the high level of daily trading volume. The fair values of U.S. government agency securities are priced using the spread above the risk-free yield curve. As the yields for the risk-free yield curve and the spreads for these securities are observable market inputs, the fair values of U.S. government agency securities are included in the Level 2 fair value hierarchy.

Non-U.S. government bonds: Comprised of Non-U.S. government bonds issued primarily by Germany, Belgium and Netherlands. These securities are generally priced by pricing services. The pricing services may use current market trades for securities with similar quality, maturity and coupon. If no such trades are available, the pricing service typically uses analytical models which may incorporate spreads, interest rate data and market/sector news. As the significant inputs used to price Non-U.S. government bonds are observable market inputs, the fair values of Non-U.S. government bonds are included in the Level 2 fair value hierarchy.

Corporate bonds: Comprised of bonds issued by corporations that on acquisition are rated BBB-/Baa3 or higher provided that, in aggregate, corporate bonds with ratings of BBB-/Baa3 do not constitute more than 5% of the market value of our fixed income securities and are diversified across a wide range of issuers and industries. These securities are generally priced by pricing services. The fair values of corporate bonds that are short-term are priced, by the pricing services, using the spread above the London Interbank Offering Rate (“LIBOR”) yield curve and the fair value of corporate bonds that are long-term are priced using the spread above the risk-free yield curve. The spreads are sourced from broker/dealers, trade prices and the new issue market. Where pricing is unavailable from pricing services, we obtain non-binding quotes from broker-dealers. As the significant inputs used to price corporate bonds are observable market inputs, the fair values of corporate bonds are included in the Level 2 fair value hierarchy.

Municipals: Municipal securities comprise bonds issued by U.S. domiciled state and municipality entities. The fair values of these securities are generally priced by pricing services. The pricing services typically use spreads obtained from broker-dealers, trade prices and the new issue market. As the significant inputs used to price the municipals are observable market inputs, municipals are classified within Level 2.

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of U.S. dollars, except share and per share data)

(Unaudited)

4. Fair Value of Financial Instruments (continued)

Other investments: The fair values of the hedge funds are based on the net asset value of the funds as reported by the fund manager, and as such, the fair values of those investments are included in the Level 3 fair value hierarchy.

Reinsurance balance receivable: The carrying values reported in the accompanying balance sheets for these financial instruments approximate their fair value due to short term nature of the assets.

Loan to related party: The carrying values reported in the accompanying balance sheets for these financial instruments approximate their fair value.

Junior subordinated debt: The carrying values reported in the accompanying balance sheets for these financial instruments approximate their fair value.

Senior Notes: The carrying values reported in the accompanying balance sheets for these financial instruments approximate their fair value.

(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 June 30, 2011 and December 31, 2010:

As of June 30, 2011	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total Fair Value
Assets
Fixed maturities
U.S. treasury bonds	$	95,458		$	—		$	—		$	95,458
U.S. agency bonds – mortgage backed		—			1,023,144			—			1,023,144
U.S. agency bonds – other		—			18,223			—			18,223
Non U.S. government bonds		—			16,187			—			16,187
Corporate bonds		—			705,280			—			705,280
Municipal bonds		—			42,347			—			42,347
Other investments		—			—			1,962			1,962
Total investments	$	95,458		$	1,805,181		$	1,962		$	1,902,601
As a percentage of total assets		2.9	%		54.8	%		0.1	%		57.8	%
Liabilities
Securities sold under agreements to repurchase	$	—		$	—		$	—		$	—
As a percentage of total liabilities		—			—			—			—

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of U.S. dollars, except share and per share data)

(Unaudited)

4. Fair Value of Financial Instruments (continued)

As of December 31, 2010	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total Fair Value
Assets
Fixed maturities
U.S. treasury bonds	$	91,729		$	—		$	—		$	91,729
U.S. agency bonds – mortgage backed		—			969,468			—			969,468
U.S. agency bonds – other		—			43,408			—			43,408
Non U.S. government bonds		—			15,938			—			15,938
Corporate bonds		—			708,993			—			708,993
Municipal bonds		—			44,897			—			44,897
Other investments		—			—			5,847			5,847
Total investments	$	91,729		$	1,782,704		$	5,847		$	1,880,280
As a percentage of total assets		3.1	%		59.7	%		0.2	%		63.0	%
Liabilities
Securities sold under agreements to repurchase	$	—		$	76,225		$	—		$	76,225
As a percentage of total liabilities		—			3.4	%		—			3.4	%

(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 for the three and six months ended June 30, 2011 and 2010:

Other Investments:	For the three months ended June 30, 2011			For the three months ended June 30, 2010
Balance at beginning of period	$	6,322		$	5,601
Net realized and unrealized gains – included in net income		—			—
Net realized and unrealized losses – included in net income		(94	)		—
Change in net unrealized gains – included in other comprehensive (loss) income		(151	)		—
Change in net unrealized losses – included in other comprehensive (loss) income		—			(44	)
Purchases		593			123
Sales and redemptions		(4,708	)		(3	)
Transfers into Level 3		—			—
Transfers out of Level 3		—			—
Balance at end of period	$	1,962		$	5,677
Level 3 gains (losses) included in net income attributable to the change in unrealized gains (losses) relating to assets held at the reporting date	$	—		$	—

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of U.S. dollars, except share and per share data)

(Unaudited)

4. Fair Value of Financial Instruments (continued)

Other Investments:	For the six months ended June 30, 2011			For the six months ended June 30, 2010
Balance at beginning of period	$	5,847		$	5,549
Net realized and unrealized gains – included in net income		—			—
Net realized and unrealized losses – included in net income		(94	)		—
Change in net unrealized gains – included in other comprehensive income (loss)		83			—
Change in net unrealized losses – included in other comprehensive income (loss)		—			11
Purchases		834			123
Sales and redemptions		(4,708	)		(6	)
Transfers into Level 3		—			—
Transfers out of Level 3		—			—
Balance at end of period	$	1,962		$	5,677
Level 3 gains (losses) included in net income attributable to the change in unrealized gains (losses) relating to assets held at the reporting date	$	—		$	—

5. Goodwill and Intangible Assets

Goodwill

Goodwill is calculated as the excess of purchase price over the net fair value of assets acquired. The Company performs an annual impairment analysis to identify potential goodwill impairment and measures the amount of a goodwill impairment loss to be recognized. This annual test is performed during the fourth quarter of each year or more frequently if events or circumstances change in a way that requires the Company to perform the impairment analysis on an interim basis. Goodwill impairment testing requires an evaluation of the estimated fair value of each reporting unit to its carrying value, including the goodwill. An impairment charge is recorded if the estimated fair value is less than the carrying amount of the reporting unit. No impairments have been identified to date.

Intangibles

Intangible assets consist of finite and indefinite life assets. Finite life intangible assets include customer and producer relationships and trademarks. Insurance company licenses are considered indefinite life intangible assets subject to annual impairment testing.

The following table shows an analysis of goodwill and intangible assets as of June 30, 2011 and December 31, 2010:

As of June 30, 2011	Gross		Accumulated Amortization			Net		Useful Life
Goodwill	$	58,325	$	—		$	58,325	Indefinite
State licenses		7,727		—			7,727	Indefinite
Customer relationships		51,400		(16,168	)		35,232	15 years double declining
Net balance	$	117, 452	$	(16,168	)	$	101,284

As of December 31, 2010	Gross		Accumulated Amortization			Net		Useful Life
Goodwill	$	58,429	$	—		$	58,429	Indefinite
State licenses		7,727		—			7,727	Indefinite
Customer relationships		51,400		(13,651	)		37,749	15 years double declining
Net balance	$	117,556	$	(13,651	)	$	103,905

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of U.S. dollars, except share and per share data)

(Unaudited)

5. Goodwill and Intangible Assets (continued)

The goodwill and intangible assets were recognized as a result of the GMAC International Insurance Services, Ltd. Reinsurance Acquisition and GMAC Insurance Acquisition and are assigned to Diversified Reinsurance segment. Goodwill and intangible assets are subject to annual impairment testing. No impairment was recorded during the three and six months ended June 30, 2011 and 2010. The estimated amortization expense for the next five years is:

	June 30, 2011
2011	$	2,516
2012		4,362
2013		3,781
2014		3,276
2015		2,840

6. Long-Term Debt

Senior Notes

In June 2011, the Company, through its wholly-owned subsidiary Maiden NA, issued $107,500 principal amount of 8.25% Senior Notes (“Senior Notes”) due on June 15, 2041, which are fully and unconditionally guaranteed by the Company. The Senior Notes are redeemable for cash, in whole or in part, on or after June 15, 2016, at 100% of the principal amount plus accrued and unpaid interest to but excluding the redemption date. In order to ensure that issuance of the Senior Notes resulted in a long term favorable impact to Maiden shareholders, the Company sought to repurchase a portion of the Trust Preferred Securities, described below, with the proceeds of the Senior Notes offering. Under the redemption notice provisions of the Trust Preferred Securities, the Company was required to give at least 30 days’ notice in advance of the next interest payment (July 15, 2011) prior to redemption, or incur an additional quarter's interest payments. Since the Senior Notes offering was initiated after the 30 day notice period on June 16, 2011, the Company offered to all holders an option to have a portion of their Trust Preferred Securities repurchased on a pro rata basis from the proceeds of the Senior Notes offering in exchange for a waiver of such notice provisions and an agreement to accept interest through July 15, 2011. Certain of the Trust Preferred Securities holders accepted the offer by June 16, 2011. All proceeds of the Senior Notes offering were used to repurchase the Trust Preferred Securities of the holders who accepted the offer. The Senior Notes are an unsecured and unsubordinated obligation of the Company and rank ahead of the Junior Subordinated Debt. The effective interest rate of the Senior Notes, based on the net proceeds received, was 8.47%. The net proceeds from the sale of the Senior Notes were $104,689, after placement agent fees and expense or debt issuance cost of $2,811, and were used to repurchase $107,500 principal amount portion of the outstanding Junior Subordinated Debt, as discussed above. The issuance costs related to the Senior Notes were capitalized and will be amortized over the life of the notes.

The interest on the Senior Notes is payable each quarter beginning on September 15, 2011 and will include accrued interest from June 24, 2011. Interest expense for the period ended June 30, 2011 was $173.

Junior Subordinated Debt

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 special purpose trust established by Maiden Holdings North America, Ltd. ("Maiden NA"), and 45 common shares, $0.01 par value, of the Company for a purchase price of $1,000.45 per Unit (the “TRUPS Offering”). In the aggregate, we also issued 11,700,000 common shares to the purchasers in the TRUPS Offering. This resulted in gross proceeds to the Company of $260,117, before $4,342 of placement agent fees and expenses.

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 61.12%. 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.

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of U.S. dollars, except share and per share data)

(Unaudited)

6. Long-Term Debt (continued)

Under the terms of the Trust Preferred Securities, the Company can repay the principal balance in full or in part at any time. However, if the Company repays such principal within five years of the date of issuance, it is required to pay an additional amount equal to one full year of interest on the amount of Trust Preferred Securities repaid. If the full amount of the Trust Preferred Securities were repaid within five years of the date of issuance (adjusted for the $107,500 repurchase of Junior Subordinated Debt, see Note 12), the additional amount due would be $21,350, which would be a reduction in earnings.

Pursuant to separate Guarantee Agreements dated as of January 20, 2009 with Wilmington Trust Company, 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 ASC Topic 810 “Consolidation”, the Trust is a variable interest entity and the Company is deemed not to be the primary beneficiary of the Trust, therefore it is not consolidated. The issuance of common shares associated with the Trust Preferred Securities resulted in an original issuance discount of $44,928 based on market price of $3.85 on January 20, 2009. The discount is amortized over 30 years based on the effective interest method. The Debenture 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 June 30, 2011, the stated value of the Junior Subordinated Debt was $215,228 which comprises the principal amount of $260,000 and unamortized discount of $44,772. Amortization expense for the three and six months ended June 30, 2011 was $19 and $37, respectively (2010 - $16 and $31, respectively). Interest expense for the three and six months ended June 30, 2011 was $9,100 and $18,200, respectively (2010 - $9,100 and $18,200, respectively).

As a result of the Senior Notes Offering, the Company announced that it will repurchase $107,500 of the Junior Subordinated Debt on July 15, 2011. Pursuant to the terms of the TRUPS Offering, the Company incurred a repurchase expense equivalent to one year’s interest expense or $15,050. The Company also accelerated the amortization of the issuance cost and discount related to those repurchased Junior Subordinated Debt which amounted to $20,313.

7. Earnings per Common Share

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

	For the three months ended June 30, 2011			For the three months ended June 30, 2010		For the six months ended June 30, 2011			For the six months ended June 30, 2010
Net (loss) income available to Maiden common shareholders	$	(24,366	)	$	18,637	$	(5,024	)	$	32,206

Weighted average number of common shares outstanding – basic		72,118,315			70,291,894		72,112,785			70,291,650
Potentially dilutive securities:
Warrants		—			—		—			—
Share options		827,024			478,955		750,709			482,114
Weighted average number of common shares outstanding – diluted		72,945,339			70,770,849		72,863,494			70,773,764

Basic (loss) earnings per share attributable to Maiden shareholders:	$	(0.34	)	$	0.27	$	(0.07	)	$	0.46
Diluted (loss) earnings per share attributable to Maiden shareholders:	$	(0.34	)	$	0.26	$	(0.07	)	$	0.46

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of U.S. dollars, except share and per share data)

(Unaudited)

7. Earnings per Common Share (continued)

As of June 30, 2011, no warrants (June 30, 2010 – 4,050,000) and 2,161,409 share options (June 30, 2010 – 1,689,874) were excluded from the calculation of diluted earnings per common 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 ASC Topic 718 "Compensation - Stock Compensation" fair value method has resulted in share-based expense (a component of salaries and benefits) in the amount of approximately $339 and $678 for the three and six months ended June 30, 2011, respectively (2010 - $240 and $450, respectively).

The key assumptions used in determining the fair value of options granted in the three and six months ended June 30, 2011 and a summary of the methodology applied to develop each assumption are as follows:

Assumptions:	June 30, 2011
Volatility		29.8-46.0	%
Risk-free interest rate		1.62-3.30	%
Weighted average expected lives in years	5-6.1 years
Forfeiture 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. The common shares of the Company began trading on May 6, 2008 on NASDAQ. Since the Company does not have enough history over which to calculate an expected volatility representative of the volatility over the expected lives of the options, the Company also considered the historical and current implied volatilities of a set of comparable 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.

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of U.S. dollars, except share and per share data)

(Unaudited)

8. Share Based Compensation (continued)

The following tables show all options granted, exercised, expired and exchanged under the Plan for the three and six months ended June 30, 2011 and 2010:

For the three months ended June 30, 2011	Number of Share Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term
Outstanding, March 31, 2011		2,906,065		$	6.41	8.13 years
Granted		29,000			9.09	9.90 years
Exercised		(42,532	)		3.80		—
Cancelled		—			—		—
Outstanding, June 30, 2011		2,892,533		$	6.47	7.96 years

For the three months ended June 30, 2010	Number of Share Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term
Outstanding, March 31, 2010		2,335,824		$	5.98	8.78 years
Granted		—			—		—
Exercised		(344	)		3.28		—
Cancelled		(4,250	)		3.28		—
Outstanding, June 30, 2010		2,331,230		$	5.99	8.53 years

For the six months ended June 30, 2011	Number of Share Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term
Outstanding, December 31, 2010		2,940,876		$	6.41	8.40 years
Granted		36,500			8.81	9.86 years
Exercised		(43,530	)		3.79		—
Cancelled		(41,313	)		7.21		—
Outstanding, June 30, 2011		2,892,533		$	6.47	7.96 years

For the six months ended June 30, 2010	Number of Share Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term
Outstanding, December 31, 2009		2,036,542		$	5.79	8.86 years
Granted		300,000			7.25	9.68 years
Exercised		(812	)		3.28		—
Cancelled		(4,500	)		3.28		—
Outstanding, June 30, 2010		2,331,230		$	5.99	8.53 years

The weighted average grant date fair value was $1.95 and $1.76 for all options outstanding at June 30, 2011 and 2010, respectively. There was approximately $2,748 and $2,400 of total unrecognized compensation cost related to non-vested share-based compensation arrangements as of June 30, 2011 and 2010, respectively.

9. Dividends Declared

On May 4, 2011, the Company’s Board of Directors authorized a quarterly dividend of $0.07 per common share, payable on July 15, 2011 to shareholders of record on July 1, 2011.

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of U.S. dollars, except share and per share data)

(Unaudited)

10. Related Party Transactions

The Founding Shareholders of the Company, 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, Chief Executive Officer and Director of AmTrust Financial Services, Inc. (“AmTrust”).

The following describes transactions between the Company and AmTrust.

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 Maiden Insurance Company Ltd. (“Maiden Bermuda”), a wholly-owned subsidiary of the Company, and AmTrust’s Bermuda reinsurance subsidiary, AmTrust International Insurance, Ltd. (“AII”), to enter into a quota share reinsurance agreement (the “Reinsurance Agreement”) by which (a) AII retrocedes to Maiden Bermuda 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, AmTrust Europe, Limited, net of commissions) and 40% of losses and (b) AII transferred to Maiden Bermuda 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 Bermuda 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 had an initial term of three years, which has been extended for three years through June 30, 2013, and will automatically renew for successive three year terms thereafter, unless either AII or Maiden Bermuda 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 Bermuda, run-off, or a reduction of 50% or more of the shareholders’ equity of Maiden Bermuda or the combined shareholders’ equity of AII and the AmTrust subsidiaries.

On June 11, 2008, Maiden Bermuda and AII 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 Bermuda 100% of $82.2 million of unearned premium (net of inuring reinsurance) from the acquisition of UBI’s in-force book of business. Additionally, AmTrust cedes to Maiden Bermuda 40% of net premium written, effective as of June 1, 2008. Maiden Bermuda 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 Reinsurance Agreement shall not be applicable to Retail Commercial Package Business.

On February 9, 2009, Maiden Bermuda and AII amended the Reinsurance Agreement to clarify that (i) AII would offer Maiden Bermuda 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 $5,000 and (ii) the deduction for the cost of inuring reinsurance from Affiliate Subject Premium (as defined in the Reinsurance Agreement) retroceded to Maiden Bermuda is net of ceding commission.

Effective April 1, 2011, Maiden Bermuda and AII amended the Reinsurance Agreement to reduce the commission on all business ceded except Retail Commercial Package Business to 30% until December, 31, 2011. Thereafter the rate shall be 31% subject to an adjustment of 1% to 30% if the proportion of Specialty Risk and Extended Warranty premium ceded is greater than or equal to 42% of the Covered Business (excluding Retail Commercial Package Business). If the proportion of Specialty Risk and Extended Warranty premium ceded is greater than or equal to 38% but less than 42% of the Covered Business (excluding Retail Commercial Package Business), the commission rate shall be reduced by 0.5% to 30.5%. In addition, the collateral requirements were restated to clarify that balances relating to all AmTrust subsidiaries are subject to collateral requirements and the Reinsurance Agreement was extended by one year to July 14, 2014, and shall automatically renew for successive three-year periods thereafter, unless the Reinsurer or Company elects to terminate this Agreement effective as of July 1, 2014 or as of the expiration of any successive three-year period. If the Reinsurer or Company elects to so terminate this Agreement, it shall give written notice to the other party hereto not less than nine months prior to either July 1, 2014 or the expiration of any successive three-year period.

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of U.S. dollars, except share and per share data)

(Unaudited)

10. Related Party Transactions (continued)

The Company recorded approximately $35,437 and $71,243 of ceding commission expense for the three and six months ended June 30, 2011, respectively, (2010 - $31,819 and $66,584, respectively) as a result of this transaction.

AmTrust European Hospital Liability Quota Share Agreement (“European Hospital Liability Quota Share”)

Effective April 1, 2011, the Company, through Maiden Bermuda, entered into a quota share reinsurance contract with AmTrust Europe Limited and AmTrust International Underwriters Limited, both wholly-owned subsidiaries of AmTrust. Pursuant to the terms of the contract, Maiden Bermuda will assume 40% of the premiums and losses related to policies classified as European Hospital Liability, including associated liability coverages and policies covering physician defense costs, written or renewed on or after April 1, 2011. The contract also covers policies written or renewed on or before March 31, 2011, but only with respect to losses that occur, accrue or arise on or after April 1, 2011. The maximum limit of liability attaching shall be €5,000 or currency equivalent (on a 100% basis) per original claim for any one original policy. Maiden Bermuda will pay a ceding commission of 5% and shall allow the reinsured a profit share on original net premiums ceded under the contract. The profit sharing is based upon the reinsured exceeding defined underwriting performance of each contract year, commencing two years after the beginning of each contract year. To the extent that the underwriting performance is exceeded, the Company will share 50% of the excess amounts computed. For the three months period ended June 30, 2011, the Company recorded approximately $975 of commission expense as a result of this transaction.

Other Reinsurance Agreements

Effective January 1, 2008, Maiden Bermuda and AmTrust entered into an agreement to reinsure a 45% participation in the $9,000 in excess of $1,000 layer of AmTrust’s workers’ compensation excess of loss program. This layer provides reinsurance to AmTrust for losses per occurrence in excess of $1,000 up to $10,000, subject to an annual aggregate deductible of $1,250. 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. This coverage expired on January 1, 2010; as a result, under the Master Agreement, Maiden Bermuda therefore now reinsures 40% of the subject workers’ compensation business up to $10,000, subject to certain additional inuring reinsurance protection that AmTrust has purchased.

As of January 1, 2008, Maiden Bermuda had a 50% participation in a $4,000 in excess of $1,000 specialty transportation program written by AmTrust. Starting January 1, 2009, Maiden Bermuda had a 30% participation in a $4,000 in excess of $1,000 specialty transportation program written by AmTrust. This program provides primarily commercial auto coverage and, to a lesser extent, general liability coverage to private non-emergency para-transit and school bus service operators. This participation was sourced through a reinsurance intermediary via open market placement in which competitive bids were solicited by an independent broker. Several other broker market reinsurers hold the other 50% and 70% participation for 2008 and 2009 policies, respectively. The agreement was not renewed as of January 1, 2010.

Effective September 1, 2010, the Company through its indirect wholly-owned subsidiary, Maiden Specialty Insurance Company (“Maiden Specialty”), entered into a quota share reinsurance agreement with Technology Insurance Company, Inc., a subsidiary of AmTrust (“Technology”). Under the agreement, Maiden Specialty will cede (a) 90% of its credit insurance business written under the Open Lending Program (“OPL”) and (b) 100% of its general liability business under the Naxos Avondale Specialty Casualty Program (“NAXS”). Maiden Specialty’s involvement is limited to certain states where Technology is not fully licensed. The agreement also provides that Maiden Specialty receives a ceding commission of 5% of ceded written premiums. The reinsurance agreement has a term of three years and will remain continuously in force until terminated in accordance to the provisions set forth in the contract. Maiden Specialty recorded approximately $1,755 and $2,257 of premiums earned ceded and $542 and $689 ceding commission for the three and six months ended June 30, 2011, respectively.

Effective September 1, 2010, the Company, through its indirect wholly-owned subsidiary, Maiden Reinsurance Company (“Maiden US”), entered into a reinsurance agreement with Security National Insurance Company (“SNIC”), a subsidiary of AmTrust. Under the agreement, SNIC will cede 80% of the gross liabilities produced under the Southern General Agency program to Maiden US. The agreement provides SNIC with a 5% commission of ceded written premiums. The agreement has a term of one year. Under this agreement, Maiden US recorded approximately $0 and $7 of premiums earned and $0 and $0.1 commission expense for the three and six months ended June 30, 2011, respectively.

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of U.S. dollars, except share and per share data)

(Unaudited)

10. Related Party Transactions (continued)

Collateral provided to AmTrust

Maiden Bermuda satisfied its collateral requirements under the Reinsurance Agreement with AII as follows:

by lending funds in the amount of $167,975 as of June 30, 2011 and December 31, 2010 to AII pursuant to a loan agreement entered into between those parties. This loan is carried at cost. The amount of collateral Maiden Bermuda 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 Bermuda’s assets with AII’s other assets and to cause the AmTrust subsidiaries not to commingle Maiden Bermuda’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 Bermuda its proportionate share of such excess assets. AII has further agreed that if the aggregate fair market value of the amount of Maiden Bermuda’s assets held in the trust account exceeds Maiden Bermuda’s proportionate share of AII’s obligations, or if an AmTrust subsidiary misapplies any such collateral, AII will immediately return to Maiden Bermuda an amount equal to such excess or misapplied collateral, less any amounts AII has paid to Maiden Bermuda. In addition, if an AmTrust subsidiary withdraws Maiden Bermuda’s assets from a trust account and maintains those assets on its books as withheld funds, AII has agreed to pay to Maiden Bermuda interest at the rate equivalent to the one-month LIBOR plus 90 basis points per annum computed on the basis of a 360-day year on the loan (except to the extent Maiden Bermuda’s proportionate share of AII’s obligations to that AmTrust subsidiary exceeds the value of the collateral Maiden Bermuda has provided). The amount of accrued interest relating to the loan was $0 and $496 as of June 30, 2011 and December 31, 2010, respectively.

by entering into a Reinsurer Trust Assets Collateral agreement. The amount of the collateral, as of June 30, 2011 was approximately $406,472 (December 31, 2010 – $358,621) and the accrued interest was $3,953 (December 31, 2010 – $3,684).

Reinsurance Brokerage Agreements

Effective July 1, 2007, the Company entered into a reinsurance brokerage agreement with AII Reinsurance Broker Ltd. (“AIIB”), a subsidiary of AmTrust. Pursuant to the brokerage agreement, AIIB provides brokerage services relating to the Reinsurance Agreement and, beginning on April 1, 2011, the European Hospital Liability Quota Share agreement for a fee equal to 1.25% of the premium reinsured from AII. The brokerage fee is payable in consideration of AIIB’s brokerage services. AIIB is not the Company’s exclusive broker. AIIB 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 $1,704 and $3,135 of reinsurance brokerage expense for the three and six months ended June 30, 2011, respectively, (2010 - $1,271 and $2,654, respectively) and deferred reinsurance brokerage of $4,706 and $3,552 as of June 30, 2011 and December 31, 2010, respectively, as a result of these agreements.

The Company paid brokerage fees to AmTrust’s subsidiary AmTrust North America of $0 and $37 for the three and six months ended June 30, 2011, respectively, (2010 - $0 and $20, respectively) for acting as insurance intermediary in relation to certain insurance placements.

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 the Company. 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 quarterly fee has been reduced to 0.05% if the average value of the account is less than or equal to $1,000,000 and 0.0375% if the average value of the account for the previous calendar quarter is greater than $1,000,000. The Company recorded approximately $776 and $1,569 of investment management fees for the three and six months ended June 30, 2011, respectively, (2010 - $662 and $1,318, respectively) as a result of this agreement.

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of U.S. dollars, except share and per share data)

(Unaudited)

10. Related Party Transactions (continued)

Other

On March 1, 2011, the Company entered into a time sharing agreement for the lease of aircraft owned by AmTrust Underwriters, Inc. (“AUI”), a wholly-owned subsidiary of AmTrust. The lease is for 10 months ending on December 31, 2011 and will automatically renew for successive one-year terms unless terminated in accordance with the provisions of the agreement. Pursuant to the agreement, the Company will reimburse AUI for actual expenses incurred as allowed by Federal Aviation Regulations. For the six months ended June 30, 2011, the Company recorded an expense of $42 for the use of the aircraft.

The following describes transactions between the Company and American Capital Acquisition Corporation (“ACAC”):

ACAC Quota Share Reinsurance Agreement

On March 1, 2010, Maiden Bermuda entered into a three year 25% quota share reinsurance agreement with ACAC. ACAC is an insurance holding company owned by the 2005 Michael Karfunkel Grantor Retained Annuity Trust (the “Trust”), which is controlled by Michael Karfunkel (“Karfunkel”), individually, and AmTrust. ACAC, on March 1, 2010, acquired from GMAC Insurance Holdings, Inc. and Motors Insurance Corporation (“Motors”) (collectively, “GMAC”), GMAC’s personal lines automobile business. Karfunkel is a Founding Shareholder of the Company. In addition, Karfunkel is the chairman of the board of directors of ACAC.

The Company, effective March 1, 2010, reinsures 25% of the net premiums of the GMAC personal lines business, pursuant to a quota share reinsurance agreement (“ACAC Quota Share”) with the GMAC personal lines insurance companies, as cedents, and Maiden Bermuda, American Capital Partners Re, Ltd., a Bermuda reinsurer which is a wholly-owned indirect subsidiary of the Trust, and AmTrust, as reinsurers. The Company has a 50% participation in the ACAC Quota Share, by which it receives 25% of net premiums of the personal lines business. The ACAC Quota Share provides that the reinsurers, severally, in accordance with their participation percentages, shall receive 50% of the net premium of the GMAC personal lines insurance companies and assume 50% of the related net losses. The ACAC Quota Share has an initial term of three years and shall renew automatically for successive three year terms unless terminated by written notice not less than nine months prior to the expiration of the current term. Notwithstanding the foregoing, Maiden Bermuda’s participation in the ACAC Quota Share may be terminated by ACAC on 60 days written notice in the event Maiden Bermuda becomes insolvent, is placed into receivership, its financial condition is impaired by 50% of the amount of its surplus at the inception of the ACAC Quota Share or latest anniversary, whichever is greater, is subject to a change of control, or ceases writing new and renewal business. ACAC also may terminate the agreement on nine months written notice following the effective date of initial public offering or private placement of stock by ACAC or a subsidiary. Maiden Bermuda may terminate its participation in the ACAC Quota Share on 60 days written notice in the event ACAC is subject to a change of control, cease writing new and renewal business, effects a reduction in their net retention without Maiden Bermuda’s consent or fails to remit premium as required by the terms of the ACAC Quota Share. The ACAC Quota Share provides that the reinsurers pay a provisional ceding commission equal to 32.5% of ceded earned premium, net of premiums ceded by the personal lines companies for inuring reinsurance, subject to adjustment.

The ceding commission is subject to adjustment to a maximum of 34.5% if the loss ratio for the reinsured business is 60.5% or less and a minimum of 30.5% if the loss ratio is 64.5% or higher. We believe that the terms, conditions and pricing of the ACAC Quota Share have been determined by arm’s length negotiations and reflect current market terms and conditions.

Maiden Bermuda’s recorded approximately $18,665 and $36,302 of ceding commission expense for the three and six months ended June 30, 2011, respectively, (2010 - $6,611 and $7,290, respectively) as a result of this transaction.

Other

Maiden Specialty entered into a reinsurance arrangement with New South Insurance Company (“New South”), a subsidiary of ACAC. Pursuant to the agreement, Maiden Specialty cedes 100% of certain personal lines business to New South. On March 1, 2010, Maiden Specialty entered into a novation agreement with Motors and New South whereby New South replaced Motors as the reinsurer for all of this business. Maiden Specialty recorded approximately $(1.1) and $(0.6) of ceded premium and $0 and $0.2 of ceding commissions for the three and six months ended June 30, 2011, respectively.

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of U.S. dollars, except share and per share data)

(Unaudited)

10. Related Party Transactions (continued)

In June 2011, the Company, through Maiden NA, issued $107,500 principal amount of 8.25% Senior Notes due on June 15, 2041, which are fully and unconditionally guaranteed by the Company. Maiden NA issued the Senior Notes with the intent to use the proceeds to repurchase on a pro rata basis $107,500 of the $260,000 outstanding Trust Preferred Securities. The Company offered all Trust Preferred Securities holders the option to have their securities repurchased on the same terms. American Capital Partners Re, Ltd., an entity owned by a trust controlled by Michael Karfunkel, one of the Founding Shareholders, accepted the offer to repurchase its $79,066 in principal amount of Trust Preferred Securities. George Karfunkel purchased $25,000, and ACAC and AII each purchased $12,500 of the principal amount of the Senior Notes issued by the Company. The Company’s Audit Committee reviewed and approved ACAC’s, AII’s, and George Karfunkel’s participation in this offering.

11. Segments

The Company currently operates three business segments: Diversified Reinsurance, AmTrust Quota Share Reinsurance and ACAC Quota Share. The Company evaluates segment performance based on segment profit separately from the results of our investment portfolio. Other operating expenses allocated to the segments are called General and Administrative expenses which are allocated on an actual basis except salaries and benefits where management’s judgment is applied; the Company does not allocate general corporate expenses to the segments. In determining total assets by segment, the Company identifies those assets that are attributable to a particular segment such as reinsurance receivable, funds withheld, prepaid reinsurance premiums, reinsurance recoverable on unpaid losses, deferred commissions and acquisition cost, loans, goodwill and intangibles, and restricted cash and investments. All remaining assets are allocated to Corporate.

The following tables summarize the underwriting results of our operating segments:

For the three months ended June 30, 2011	Diversified Reinsurance			AmTrust Quota Share Reinsurance			ACAC Quota Share			Total
Net premiums written	$	158,020		$	216,449		$	62,497		$	436,966
Net premiums earned		170,288			136,299			61,196			367,783
Other insurance revenue		2,179			—			—			2,179
Net loss and loss adjustment expenses		(116,387	)		(94,740	)		(39,472	)		(250,599	)
Commissions and other acquisition expenses		(48,257	)		(38,116	)		(19,451	)		(105,824	)
General and administrative expenses		(8,309	)		(596	)		(472	)		(9,377	)
Underwriting (loss) income	$	(486	)	$	2,847		$	1,801		$	4,162

Reconciliation to net loss
Net investment income and realized and unrealized investment gains (losses)											20,409
Amortization of intangible assets											(1,259	)
Foreign exchange gain											939
Interest and amortization expenses											(9,292	)
Accelerated amortization of junior subordinated debt discount and issuance cost											(20,313	)
Junior subordinated debt repurchase expense											(15,050	)
Other general and administrative expenses											(3,462	)
Income tax expense											(506	)
Loss attributable to noncontrolling interest											6
Net loss attributable to Maiden										$	(24,366	)

Net loss and loss expense ratio*		67.5	%		69.5	%		64.5	%		67.7	%
Acquisition cost ratio**		28.0	%		28.0	%		31.8	%		28.6	%
General and administrative expense ratio***		4.8	%		0.4	%		0.8	%		3.5	%
Combined ratio****		100.3	%		97.9	%		97.1	%		99.8	%

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of U.S. dollars, except share and per share data)

(Unaudited)

11. Segments (continued)

For the three months ended June 30, 2010	Diversified Reinsurance			AmTrust Quota Share Reinsurance			ACAC Quota Share			Total
Net premiums written	$	136,709		$	109,123		$	67,218		$	313,050
Net premiums earned		161,779			101,664			20,341			283,784
Net loss and loss adjustment expenses		(99,218	)		(63,423	)		(12,713	)		(175,354	)
Commissions and other acquisition expenses		(48,386	)		(33,090	)		(6,971	)		(88,447	)
General and administrative expenses		(5,726	)		(598	)		—			(6,324	)
Underwriting income	$	8,449		$	4,553		$	657		$	13,659

Reconciliation to net income
Net investment income and realized and unrealized investment gains (losses)											19,410
Amortization of intangible assets											(1,452	)
Foreign exchange loss											(414	)
Interest and amortization expenses											(9,116	)
Other general and administrative expenses											(3,160	)
Income tax expense											(290	)
Net income attributable to Maiden										$	18,637

Net loss and loss expense ratio*		61.3	%		62.4	%		62.5	%		61.8	%
Acquisition cost ratio**		29.9	%		32.5	%		34.3	%		31.2	%
General and administrative expense ratio***		3.5	%		0.6	%		—			3.3	%
Combined ratio****		94.7	%		95.5	%		96.8	%		96.3	%

For the six months ended June 30, 2011	Diversified Reinsurance			AmTrust Quota Share Reinsurance			ACAC Quota Share			Total
Net premiums written	$	416,838		$	343,163		$	126,465		$	886,466
Net premiums earned		344,522			250,773			119,023			714,318
Other insurance revenue		6,834			—			—			6,834
Net loss and loss adjustment expenses		(226,732	)		(168,279	)		(76,770	)		(471,781	)
Commissions and other acquisition expenses		(99,677	)		(75,353	)		(37,866	)		(212,896	)
General and administrative expenses		(16,337	)		(1,264	)		(1,015	)		(18,616	)
Underwriting income	$	8,610		$	5,877		$	3,372		$	17,859

Reconciliation to net loss
Net investment income and realized and unrealized investment gains (losses)											39,597
Amortization of intangible assets											(2,517	)
Foreign exchange gain											2,001
Interest and amortization expenses											(18,410	)
Accelerated amortization of junior subordinated debt discount and issuance cost											(20,313	)
Junior subordinated debt repurchase expense											(15,050	)
Other general and administrative expenses											(6,516	)
Income tax expense											(1,678	)
Loss attributable to noncontrolling interest											3
Net loss attributable to Maiden										$	(5,024	)

Net loss and loss expense ratio*		64.5	%		67.1	%		64.5	%		65.4	%
Acquisition cost ratio**		28.4	%		30.0	%		31.8	%		29.5	%
General and administrative expense ratio***		4.6	%		0.6	%		0.9	%		3.5	%
Combined ratio****		97.5	%		97.7	%		97.2	%		98.4	%

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of U.S. dollars, except share and per share data)

(Unaudited)

11. Segments (continued)

For the six months ended June 30, 2010	Diversified Reinsurance			AmTrust Quota Share Reinsurance			ACAC Quota Share			Total
Net premiums written	$	304,623		$	230,679		$	89,039		$	624,341
Net premiums earned		312,959			212,323			22,431			547,713
Net loss and loss adjustment expenses		(198,635	)		(132,985	)		(14,019	)		(345,639	)
Commissions and other acquisition expenses		(88,900	)		(69,238	)		(7,705	)		(165,843	)
General and administrative expenses		(11,598	)		(1,072	)		—			(12,670	)
Underwriting income	$	13,826		$	9,028		$	707		$	23,561

Reconciliation to net income
Net investment income and realized and unrealized investment gains (losses)											37,303
Amortization of intangible assets											(2,904	)
Foreign exchange loss											(1,567	)
Interest and amortization expenses											(18,231	)
Other general and administrative expenses											(5,366	)
Income tax expense											(590	)
Net income attributable to Maiden										$	32,206

Net loss and loss expense ratio*		63.5	%		62.6	%		62.5	%		63.1	%
Acquisition cost ratio**		28.4	%		32.6	%		34.3	%		30.3	%
General and administrative expense ratio***		3.7	%		0.5	%		—			3.3	%
Combined ratio****		95.6	%		95.7	%		96.8	%		96.7	%

*	Calculated by dividing net loss and loss adjustment expenses by net earned premium and other insurance revenue.

**	Calculated by dividing commission and other acquisition expenses by net earned premium and other insurance revenue.

***	Calculated by dividing general and administrative expenses by net earned premium and other insurance revenue.

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

	Diversified Reinsurance		AmTrust Quota Share Reinsurance		ACAC Quota Share		Total
As of June 30, 2011
Reinsurance balances receivable, net	$	194,248	$	110,733	$	74,825	$	379,806
Funds withheld		145,515		—		—		145,515
Prepaid reinsurance premiums		37,555		—		—		37,555
Reinsurance recoverable on unpaid losses		15,587		—		—		15,587
Deferred acquisition costs		109,575		107,414		28,434		245,423
Loan to related party		—		167,975		—		167,975
Goodwill and intangible assets, net		101,284		—		—		101,284
Restricted investments and cash		967,429		406,472		47,895		1,421,796
Corporate and other assets		5,648		—		—		778,350
Total Assets	$	1,576,841	$	792,594	$	151,154	$	3,293,291

	Diversified Reinsurance		AmTrust Quota Share Reinsurance		ACAC Quota Share		Total
As of December 31, 2010
Reinsurance balances receivable, net	$	131,109	$	25,566	$	69,658	$	226,333
Funds withheld		152,713		—		—		152,713
Prepaid reinsurance premiums		28,992		—		—		28,992
Reinsurance recoverable on unpaid losses		6,656		—		—		6,656
Deferred acquisition costs		85,252		92,155		26,224		203,631
Loan to related party		—		167,975		—		167,975
Goodwill and intangible assets, net		103,905		—		—		103,905
Restricted investments and cash		1,136,252		358,621		23,979		1,518,852
Corporate and other assets		88		—		—		573,505
Total Assets	$	1,644,967	$	644,317	$	119,861	$	2,982,562

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of U.S. dollars, except share and per share data)

(Unaudited)

11. Segments (continued)

The following tables set forth financial information relating to gross and net premiums written and earned by major line of business for the three and six months ended June 30, 2011 and 2010:

For the three months ended June 30,	2011					2010
	Total		% of Total			Total		% of Total
Net premiums written
Diversified Reinsurance
Property	$	49,441		11.3	%	$	36,276		11.6	%
Casualty		76,785		17.6	%		91,855		29.4	%
Accident and Health		5,834		1.3	%		8,578		2.7	%
International		25,960		6.0	%		—		—
Total Diversified Reinsurance		158,020		36.2	%		136,709		43.7	%
AmTrust Quota Share Reinsurance
Small Commercial Business		54,942		12.5	%		44,896		14.3	%
Specialty Program		26,961		6.2	%		20,827		6.6	%
Specialty Risk and Extended Warranty		134,546		30.8	%		43,400		13.9	%
Total AmTrust Quota Share Reinsurance		216,449		49.5	%		109,123		34.8	%
ACAC Quota Share
Automobile Liability		35,461		8.1	%		38,514		12.3	%
Automobile Physical Damage		27,036		6.2	%		28,704		9.2	%
Total ACAC Quota Share		62,497		14.3	%		67,218		21.5	%
	$	436,966		100.0	%	$	313,050		100.0	%

For the six months ended June 30,	2011					2010
	Total		% of Total			Total		% of Total
Net premiums written
Diversified Reinsurance
Property	$	121,704		13.7	%	$	94,329		15.1	%
Casualty		207,803		23.4	%		184,016		29.5	%
Accident and Health		23,541		2.7	%		26,278		4.2	%
International		63,790		7.2	%		—		—
Total Diversified Reinsurance		416,838		47.0	%		304,623		48.8	%
AmTrust Quota Share Reinsurance
Small Commercial Business		116,612		13.1	%		103,830		16.6	%
Specialty Program		35,432		4.0	%		30,901		4.9	%
Specialty Risk and Extended Warranty		191,119		21.6	%		95,948		15.4	%
Total AmTrust Quota Share Reinsurance		343,163		38.7	%		230,679		36.9	%
ACAC Quota Share
Automobile Liability		72,208		8.2	%		50,959		8.2	%
Automobile Physical Damage		54,257		6.1	%		38,080		6.1	%
Total ACAC Quota Share		126,465		14.3	%		89,039		14.3	%
	$	886,466		100.0	%	$	624,341		100.0	%

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of U.S. dollars, except share and per share data)

(Unaudited)

11. Segments (continued)

For the three months ended June 30,	2011					2010
	Total		% of Total			Total		% of Total
Net premiums earned
Diversified Reinsurance
Property	$	43,944		11.9	%	$	47,550		16.7	%
Casualty		92,254		25.1	%		95,829		33.8	%
Accident and Health		11,448		3.1	%		18,400		6.5	%
International		22,642		6.2	%		—		—
Total Diversified Reinsurance		170,288		46.3	%		161,779		57.0	%
AmTrust Quota Share Reinsurance
Small Commercial Business		51,297		13.9	%		56,186		19.8	%
Specialty Program		20,108		5.5	%		16,680		5.9	%
Specialty Risk and Extended Warranty		64,894		17.7	%		28,798		10.1	%
Total AmTrust Quota Share Reinsurance		136,299		37.1	%		101,664		35.8	%
ACAC Quota Share
Automobile Liability		34,967		9.5	%		11,425		4.0	%
Automobile Physical Damage		26,229		7.1	%		8,916		3.2	%
Total ACAC Quota Share		61,196		16.6	%		20,341		7.2	%
	$	367,783		100.0	%	$	283,784		100.0	%

For the six months ended June 30,	2011					2010
	Total		% of Total			Total		% of Total
Net premiums earned
Diversified Reinsurance
Property	$	89,396		12.5	%	$	89,338		16.3	%
Casualty		177,959		24.9	%		184,075		33.6	%
Accident and Health		23,099		3.2	%		39,546		7.2	%
International		54,068		7.6	%		—		—
Total Diversified Reinsurance		344,522		48.2	%		312,959		57.1	%
AmTrust Quota Share Reinsurance
Small Commercial Business		100,499		14.1	%		108,140		19.8	%
Specialty Program		36,513		5.1	%		31,454		5.7	%
Specialty Risk and Extended Warranty		113,761		15.9	%		72,729		13.3	%
Total AmTrust Quota Share Reinsurance		250,773		35.1	%		212,323		38.8	%
ACAC Quota Share
Automobile Liability		68,020		9.5	%		12,594		2.3	%
Automobile Physical Damage		51,003		7.2	%		9,837		1.8	%
Total ACAC Quota Share		119,023		16.7	%		22,431		4.1	%
	$	714,318		100.0	%	$	547,713		100.0	%

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of U.S. dollars, except share and per share data)

(Unaudited)

12. Subsequent Events

Junior Subordinated Debt

On July 15, 2011, the Company repurchased in cash a portion of the outstanding Junior Subordinated Debt with principal amount of $107,500 together with the 14% repurchase charge of $15,050 using the net proceeds from the issuance of the Senior Notes and existing cash, as detailed in Note 6 above. Included in the principal amount repurchased, were $79,066 of Junior Subordinated Debt held by American Capital Partners Re, Ltd, which is owned by a trust established by Michael Karfunkel, one of the Company’s Founding Shareholders.

Dividends

On July 27, 2011, the Company’s Board of Directors authorized a quarterly dividend of $0.08 per common share, payable on October 17, 2011 to shareholders of record on October 3, 2011.

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 Quarterly Report on Form 10-Q (this “Form 10-Q” or this “Report”). 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 “Maiden Holdings” means Maiden Holdings, Ltd. only. Amounts in tables may not reconcile due to rounding differences.

Note on Forward-Looking Statements

This Quarterly Report on Form 10-Q includes 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 Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on March 14, 2011. The projections and statements in this Report speak only as of the date of this Report and we undertake no 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.

Introduction

Since our founding in 2007, we have entered into a series of significant strategic transactions that have transformed the scope and scale of our business while keeping our low volatility, non-catastrophe oriented risk profile intact. These transactions have increased our revenue to an amount in excess of $1 billion while strongly positioning our capital both in the U.S. and internationally and include:

Entering into a quota share reinsurance agreement with AmTrust Financial Services, Inc. ("AmTrust") in 2007 (the "AmTrust Quota Share");

Acquiring the reinsurance operations of GMAC Insurance in 2008 (the "GMAC Acquisition");

Completing a private placement of trust preferred securities of approximately $260.1 million in 2009 (the "TRUPS Offering");

Entering into a quota share reinsurance agreement with American Capital Acquisition Corporation ("ACAC") in 2010 (the "ACAC Quota Share");

Acquiring the majority of the reinsurance-related infrastructure, assets and liabilities of U.K.-based GMAC International Insurance Services, Ltd. (“IIS”) in 2010 (the "IIS Acquisition"); and

Completing a public debt offering of $107.5 million in June 2011 and repurchasing a like amount of the junior subordinated debt in July 2011.

Until such time as the Company attains sufficient historical experience, year-to-year comparability is likely to be more difficult as compared with other companies considered peers of the Company and with whom it competes on a regular basis.

Overview

We are a Bermuda-based holding company formed in June 2007 primarily focused on serving the needs of regional and specialty insurers in the United States and Europe by providing innovative non-catastrophe reinsurance solutions designed to support their capital needs. We specialize in reinsurance solutions that optimize financing by providing coverage within the more predictable and actuarially credible lower layers of coverage and/or reinsuring risks that are believed to be lower hazard, more predictable and generally not susceptible to catastrophe claims. Our tailored solutions include a variety of value added services focused on helping our clients grow and prosper.

We provide reinsurance through our wholly owned subsidiaries, Maiden Reinsurance Company (“Maiden US”) and Maiden Insurance Company Ltd. (“Maiden Bermuda”) and have operations in the United States and Bermuda. On a more limited basis, Maiden Specialty Insurance Company (“Maiden Specialty”), a wholly owned subsidiary of Maiden US, provides primary insurance on a surplus lines basis focusing on non-catastrophe inland marine and property coverages. Maiden Bermuda does not underwrite any primary insurance business.

We currently operate our business through three segments: Diversified Reinsurance, AmTrust Quota Share Reinsurance and the ACAC Quota Share. As of June 30, 2011, we had approximately $3.3 billion in total assets, $759.3 million of total shareholders’ equity and $1.1 billion in total capital, which includes shareholders’ equity and both senior notes and junior subordinated debt. Total capitalization as of June 30, 2011 is temporarily increased by $89.0 million which represents the amount of junior subordinated debt (net of accelerated amortization of subordinated debt discount and issuance costs) which was repurchased on July 15, 2011. Please refer to the discussion captioned “Senior Notes Offering” within the section titled “Recent Developments” which follows this overview for further information.

The market conditions in which we operate have historically been cyclical, experiencing periods of price erosion followed by rate strengthening as a result of catastrophes or other significant losses that affect the overall capacity of the industry to provide coverage. During the period covered by this discussion, the reinsurance market has been characterized by significant competition in most lines of business.

While natural and man-made catastrophes occur each year affecting reinsurance industry results, 2010 and the first half of 2011 experienced an increased level of significant natural and man-made catastrophes, negatively impacting overall industry performance. These events include the Japanese earthquake and tsunami in 2011, significant U.S. thunderstorm and tornado activity in the second quarter of 2011, major earthquakes in Chile in 2010 and in New Zealand in both 2010 and 2011, and the Deepwater Horizon explosion and oil spill in the Gulf of Mexico in 2010. Consistent with our business model, the Company experienced no losses from the 2010 or 2011 global catastrophe events; however, the unusually high frequency of loss activity from U.S. thunderstorm and tornado did impact our U.S clients in the second quarter of 2011, adversely affecting the Company’s results.

In addition, the property and casualty industry invests significant portions of its premiums and retained underwriting profits in fixed income maturities, the yields on which continue to perform at historically low levels. Continued existence of these conditions will increasingly adversely impact the results of the property and casualty industry generally, placing additional pressure on companies underwriting results at a time that market conditions are not supportive of additional pricing measures which would stabilize underwriting trends.

Nonetheless, capital positions across the insurance and reinsurance industry appear to remain adequate at present. As a result, despite the financial impact of the significant catastrophes along with the unfavorable pricing and investment environment, broad industry conditions appear unlikely to significantly change in the immediately foreseeable future, although the ultimate impact remains unclear and is currently more uncertain in light of reinsurance industry performance in the first quarter of 2011. As market conditions continue to develop, we continue to maintain our adherence to disciplined underwriting by declining business when pricing, terms and conditions do not meet our underwriting standards. We believe that if such events continue, they could have a significant positive effect on competition and pricing. We believe we are well positioned to take advantage of market conditions should the pricing environment become more favorable.

Recent Developments

Senior Notes Offering

On June 24, 2011, the Company’s wholly-owned U.S. holding company subsidiary, Maiden Holdings North America, Ltd. ("Maiden NA"), closed the offering of $107.5 million aggregate principal amount of 8.25% Senior Notes due June 15, 2041 (the "Senior Notes"), which are fully and unconditionally guaranteed by Maiden Holdings. The Senior Notes are redeemable for cash, in whole or in part, on or after June 15, 2016, at 100% of the principal amount of the Senior Notes to be repurchased plus accrued and unpaid interest to but excluding the redemption date.

Maiden NA has listed the Senior Notes on the New York Stock Exchange and trading commenced on July 21, 2011 under the symbol “MHNA”.

Total net proceeds from the offering were approximately $104.7 million, after deducting the underwriting discount and estimated offering expenses payable by Maiden NA and the Company. The net proceeds were used to repurchase a portion of the TRUPS Offering securities. The Company repurchased $107.5 million in TRUPS Offering securities on July 15, 2011. Pursuant to the terms of the TRUPS Offering, the Company incurred a non-recurring repurchase expense of approximately $15.1 million, which was reported in the Company's results of operations for the three months ended June 30, 2011. The Company will save approximately $6.2 million annually as a result of the refinancing, and approximately $15.9 million from the closing of the Senior Notes offering until January 20, 2014, the date on which the repurchase penalty associated with the TRUPS Offering expires. Also, as a result of the repurchase, the Company incurred an additional non-recurring non-cash charge of approximately $20.3 million for the period ended June 30, 2011, which represents the accelerated amortization of original issue discount and issuance costs associated with equity issued in conjunction with the TRUPS Offering.

GMAC International Insurance Services, Ltd. Reinsurance Acquisition (“IIS Acquisition”)

On November 30, 2010, we acquired the majority of the reinsurance-related infrastructure, assets and liabilities of IIS. IIS is based in the United Kingdom and also included the following primary components, the sum of which is referred to as the “IIS Acquisition”:

A renewal rights agreement under which Maiden Bermuda underwrites certain assumed reinsurance business written by GMAC International Insurance Company, Ltd. (“GMAC IICL”), which covers primarily personal auto and credit life coverages offered by primary insurers in association with programs IIS designs and implements for original equipment automobile manufacturers;

A reinsurance agreement (the "IICL Agreement") under which Maiden Bermuda reinsures all of the existing contracts written by GMAC IICL pursuant to a loss portfolio transfer; under the purchase agreement, all future contracts will be underwritten by Maiden Bermuda;

Acquisition of GMAC VersichsrungService (“GMAC VS”), an insurance producer based in Germany which supports sales of primary personal auto insurance through participating automobile dealerships and original equipment automobile manufacturers; and

Acquisition of GMAC Life Försäkrings (“GMAC LF”), a credit life insurer domiciled in Sweden which writes certain credit life insurance in association through automobile financings offered through participating automobile dealerships and original equipment automobile manufacturers which has been renamed Maiden Life Försäkrings AB (“Maiden LF”).

According to the loss portfolio transfer provisions of the IICL Agreement, the Company assumed the loss reserves of $98.8 million associated with the GMAC IICL business as of November 30, 2010. The Company also assumed unearned premium, net of acquisition costs, of approximately $19.2 million.

The substantial majority of the premiums and losses underwritten by GMAC IICL are subject to collateral requirements in the form of letters of credit and trust agreements. At the closing of the IIS Acquisition, the Company settled cash balances applicable to the subject reinsurance contracts with GMAC IICL. Actual assets in support of the liabilities assumed under the IICL Agreement will be transferred to the Company when the subject individual agreements are novated to Maiden Bermuda. Please refer to the section entitled “IIS Acquisition – Funds Withheld” in the Liquidity and Capital Resources section of “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-Q for further information.

As a result of assumption of these liabilities, at November 30, 2010 the underlying assets in support of these collateral arrangements totaled $141.8 million. The Company now assumes one hundred percent (100%) of all premiums and losses for which GMAC IICL is otherwise entitled to or liable in respect of the reinsurance contracts.

We will pay a fee to GMAC IICL for the right to renew the expiring contracts, subject to certain minimum payments at close, over a three-year period commencing November 30, 2010.

The aggregate purchase price of GMAC VS and the now renamed Maiden LF at November 30, 2010 was $22.3 million, which was the tangible book value of each entity. All balances of the IIS Acquisition were settled on an estimated basis and pursuant to the terms of the underlying agreements, will be subject to adjustment to the final actual balances as of November 30, 2010 in 2011.

The Company expects the transaction to be accretive to 2011 earnings.

ACAC Transaction

In November 2009, we announced an agreement in principal with ACAC regarding a multi-year 25% quota share reinsurance agreement expected to generate over $200 million in annual revenue. The contract commenced on March 1, 2010 after final regulatory approval and the closing of ACAC’s acquisition of GMACI’s U.S. consumer property and casualty insurance business, as well as a small amount of commercial auto business. This business generated over $1.0 billion in net written premium in each of 2008, 2009 and 2010. ACAC is owned by one of our Founding Shareholders, Michael Karfunkel, and the Michael Karfunkel 2005 Grantor Retained Annuity Trust (the “Trust”), which is controlled by Michael Karfunkel. The Trust currently owns 72.4% of ACAC’s issued and outstanding common stock, Michael Karfunkel currently owns 27.6% of ACAC’s issued and outstanding common stock, and AmTrust owns preferred shares convertible into 21.25% of the issued and outstanding common stock of ACAC. In addition to reinsurance support, we will provide support services focused on helping ACAC to continue its profitable expansion. As noted, management of this business is treated as a separate segment captioned ACAC Quota Share.

Second Quarter and Six Months Ended June 30, 2011 Financial Highlights

Consolidated Results of Operations

Net loss to common shareholders of $24.4 million, or $0.34 basic and diluted loss per share for the three months ended June 30, 2011 as compared to net income of $18.6 million or $0.27 basic and $0.26 diluted earnings per share for the same period in 2010.

Operating earnings of $11.2 million, or $0.16 basic and $0.15 diluted operating earnings per share for the three months ended June 30, 2011 as compared to $21.2 million or $0.30 basic and diluted operating earnings per share for the same period in 2010.(1)

Net loss to common shareholders of $5.0 million, or $0.07 basic and diluted loss per share for the six months ended June 30, 2011 as compared to net income of $32.2 million, or $0.46 basic and diluted earnings per share for the same period in 2010.

Operating earnings of $31.0 million, or $0.43 basic and diluted earnings per share for the six months ended June 30, 2011 as compared to $37.4 million, or $0.53 basic and diluted earnings per share for the same period in 2010.

Non-recurring charges in the three and six months ended June 30, 2011 related to Senior Notes Offering of $15.1 million for the repurchase expense of $107.5 million in junior subordinated debentures funded by the Notes along with a $20.3 million non-cash charge for the accelerated amortization of subordinated debt discount and issuance costs related to the TRUPS Offering which were repurchased with the proceeds of the Senior Notes Offering.

Gross premiums written of $462.4 million and $933.2 million for the three and six months ended June 30, 2011, an increase of 38.1% and 40.9% over 2010.

Net premiums earned of $367.8 million and $714.3 million for the three and six months ended June 30, 2011, an increase of 29.6% and 30.4% over 2010.

Underwriting income of $4.2 million and $17.9 million and a combined ratio of 99.8% and 98.4% for the three and six months ended June 30, 2011 as compared to $13.7 million and $23.6 million and 96.3% and 96.7%, respectively for the same periods in 2010.(1)

Adverse net underwriting impact of second quarter 2011 U.S. thunderstorm and tornado activity totaling $9.5 million, net of the Company’s quarterly provision for normalized catastrophe activity.

Net investment income of $19.8 million and $39.0 million for the three and six months ended June 30, 2011, an increase of 5.0% and 6.9% over the same periods in 2010, respectively.

Consolidated Financial Condition

Annualized operating return on equity of 8.3% as compared to 10.8% for the same period in 2010.(1)

Common shareholders' equity of $759.3 million; book value per common share of $10.52.

Total investments of $1.9 billion; fixed maturities comprise 99.9% of total investments, of which 62.0% have a credit rating of AAA and an overall average credit rating of AA.

Total assets of $3.3 billion.

Reserve for losses and loss expenses of $1.3 billion.

Adjusted for the repurchase of $89.0 million (net of accelerated amortization of subordinated debt discount and issuance costs of $18.5 million) of junior subordinated debt on July 15, 2011, total debt of $233.7 million and a debt to total capitalization ratio of 23.5%.

(1)

Operating earnings and operating earnings per share are non-GAAP financial measures. See "Non-GAAP Financial Measures" for additional information and a reconciliation to the nearest GAAP financial measure (net income). Combined ratios and underwriting income are operating metrics. See “Certain Operating Measures” for additional information on these measures.

Non-GAAP Financial Measures

In presenting the Company's results, management has included and discussed certain non-GAAP financial measures. Management believes that these non-GAAP measures, which may be defined differently by other companies, better explain the Company's results of operations in a manner that allows for a more complete understanding of the underlying trends in the Company's business. However these measures should not be viewed as a substitute for those determined in accordance with GAAP. These non-GAAP measures are:

Operating Earnings and Operating Earnings per Share: In addition to presenting net income determined in accordance with GAAP, we believe that showing operating earnings enables investors, analysts, rating agencies and other users of our financial information to more easily analyze our results of operations in a manner similar to how management analyzes our underlying business performance. Operating earnings should not be viewed as a substitute for GAAP net income. Operating earnings are an internal performance measure used in the management of our operations and represents operating results excluding, as applicable on a recurring basis, net realized and unrealized investment gains or losses, foreign exchange gain or loss, the amortization of intangible assets and non-cash deferred tax expenses. We also exclude certain non-recurring expenditures that are material to understanding our results of operations. For 2011 and 2010, we exclude transaction expenses related to the IIS Acquisition as these are non-recurring. In 2011, as a result of the Senior Notes Offering, we exclude the junior subordinated debt repurchase expense and the accelerated amortization of junior subordinated debt discount and issuance costs, as both are non-recurring. We exclude net realized investment gains or losses and foreign exchange gain or loss as we believe that both are heavily influenced in part by market opportunities and other factors. We do not believe amortization of intangible assets are representative of our ongoing business. We believe all of these amounts are largely independent of our business and underwriting process and including them distorts the analysis of trends in our operations. The following is a reconciliation of operating earnings to its most closely related GAAP measure, net income.

	For the three months ended June 30,						For the six months ended June 30,
	2011			2010			2011			2010
	($ in Millions)						($ in Millions)
Net (loss) income attributable to Maiden	$	(24.4	)	$	18.6		$	(5.0	)	$	32.2
Add (subtract):
Net realized and unrealized investment gains		(0.6	)		(0.5	)		(0.6	)		(0.9	)
Amortization of intangibles		1.3			1.4			2.5			2.9
Foreign exchange (gains) losses		(0.9	)		0.4			(2.0	)		1.6
Junior subordinated debt repurchase expense		15.1			—			15.1			—
Accelerated amortization of subordinated debt discount and issuance cost		20.3			—			20.3			—
Non-recurring general and administrative expenses relating to IIS Acquisition		0.1			1.0			0.1			1.0
Non-cash deferred tax expense		0.3			0.3			0.6			0.6
Operating earnings	$	11.2		$	21.2		$	31.0		$	37.4
Operating earnings per common share:
Basic operating earnings per share	$	0.16		$	0.30		$	0.43		$	0.53
Diluted operating earnings per share	$	0.15		$	0.30		$	0.43		$	0.53

Operating Return on Equity ("Operating ROE"): Management uses operating return on average shareholders' equity as a measure of profitability that focuses on the return to common shareholders. It is calculated using operating earnings available to common shareholders (as defined above) divided by average common shareholders' equity. Management has set as a target a long-term average of 15% Operating ROE, which management believes provides an attractive return to shareholders for the risk assumed. Operating ROE for the three and six months ended June 30, 2011 and 2010 is computed as follows:

	For the three months ended June 30,						For the six months ended June 30,
	2011			2010			2011			2010
	($ in Millions)						($ in Millions)
Operating earnings	$	11.2		$	21.2		$	31.0		$	37.4

Opening shareholders’ equity	$	769.7		$	710.0		$	750.2		$	676.5
Ending shareholders’ equity		759.3			724.8			759.3			724.8
Average shareholders’ equity	$	764.5		$	717.4		$	754.8		$	700.7

Operating return on equity		1.5	%		3.0	%		4.1	%		5.3	%
Annualized operating return on equity		5.9	%		11.9	%		8.3	%		10.8	%

Certain Operating Measures

Underwriting Income and Combined Ratio: The combined ratio is used in the insurance and reinsurance industry as a measure of underwriting profitability. Management measures underwriting results on an overall basis and for each segment on the basis of the combined ratio. The combined ratio is the sum of the loss and loss expense ratio and the expense ratio and the computations of each component are described below. A combined ratio under 100% indicates underwriting profitability, as the total losses and loss expenses, acquisition costs and general and administrative expenses are less than the premiums earned on that business. We have generated underwriting income in each year since our inception. Underwriting income is calculated by subtracting losses and loss adjustment expenses, commissions and other acquisition expenses and applicable general and administrative expenses from the net earned premium and is the monetized counterpart of the combined ratio.

For purposes of these operating measures, the fee-generating business associated with the IIS Acquisition (“IIS Fee Business”) which is included in the Diversified Reinsurance segment, is considered part of the underwriting operations of the Company. Certain portions of the IIS Fee Business are directly associated with the underlying reinsurance contracts recorded in the Diversified Reinsurance segment. To the extent that the fees are generated on underlying insurance contracts sold to third parties that are then ceded under quota share reinsurance contracts to Maiden Bermuda, a proportionate share of the fee is offset against the related acquisition expense. To the extent that IIS Fee Business is not directly associated with premium revenue generated under the applicable reinsurance contracts, that fee revenue is separately reported on the line captioned “Other insurance revenue” in the Company’s Condensed Consolidated Statements of Income.

While an important metric of success, underwriting income and combined ratio do not reflect all components of profitability, as it does not recognize the impact of investment income earned on premiums between the time premiums are received and the time loss payments are ultimately paid to clients. 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 the sum of net premiums earned and other insurance revenue. The “commission and acquisition cost ratio” is derived by dividing acquisition costs by the sum of net premiums earned and other insurance revenue. The “general and administrative expense ratio” is derived by dividing general and administrative expenses by the sum of net premiums earned and other insurance revenue. The “expense ratio” is the sum of the commission and acquisition cost ratio and the general and administrative expense ratio.

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.

The Company's revenues also include fee income generated by the IIS Fee Business as well as income generated from its investment portfolio. The Company's investment portfolio is comprised of fixed maturity investments, held as available-for-sale and trading, and other investments that are held as available for sale. In accordance with GAAP, these investments are carried at fair market value and unrealized gains and losses on the Company's investments held as available-for-sale are generally excluded from earnings. These unrealized gains and losses are included on the Company's balance sheet in accumulated other comprehensive income as a separate component of shareholders' equity. If unrealized losses are considered to be other-than-temporarily impaired, such losses are included in earnings as a realized loss.

Expenses

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

losses paid, which are actual cash payments to insureds, net of recoveries from reinsurers;

change in 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

change in Incurred But Not Reported (“IBNR”) reserves, 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 and can, in certain instances, vary based on loss sensitive features of reinsurance contracts. 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 share-based compensation expense, increased rent expense for our offices and increased professional fees. As the Company continues to expand and diversify in 2011, particularly through the IIS Acquisition, the completion of the implementation of the ACAC Quota Share and other initiatives across both its US and Bermuda platforms, we expect this trend to continue.

Critical Accounting Policies

It is important to understand our accounting policies in order to understand our financial position and results of operations. The Company's Consolidated Financial Statements have been prepared in accordance with GAAP. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The following presents a discussion of those accounting policies and estimates that management believes are the most critical to its operations and require the most difficult, subjective and complex judgment. If actual events differ significantly from the underlying assumptions and estimates used by management, there could be material adjustments to prior estimates that could potentially adversely affect the Company's results of operations, financial condition and liquidity. These critical accounting policies and estimates should be read in conjunction with the Company's Notes to Consolidated Financial Statements, including Note 2, Significant Accounting Policies, for a full understanding of the Company's accounting policies. 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, 2010 filed with the SEC. There were no material changes in the application of our critical accounting estimates subsequent to that report.

Results of Operations

Net (Loss) Income

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

	For the three months ended June 30,						For the six months ended June 30,
	2011			2010			2011			2010
	($ in Millions)						($ in Millions)
Gross premiums written	$	462.4		$	334.8		$	933.2		$	662.2

Net premiums written	$	437.0		$	313.1		$	886.5		$	624.3

Net earned premium	$	367.8		$	283.8		$	714.3		$	547.7
Other insurance revenue		2.2			—			6.8			—
Net loss and loss adjustment expenses		(250.6	)		(175.4	)		(471.7	)		(345.6	)
Commissions and other acquisition expenses		(105.8	)		(88.4	)		(212.9	)		(165.8	)
General and administrative expenses		(9.4	)		(6.3	)		(18.6	)		(12.7	)
Total underwriting income		4.2			13.7			17.9			23.6
General and administrative expenses		(3.4	)		(3.2	)		(6.5	)		(5.4	)
Net investment income		19.8			18.9			39.0			36.5
Net realized and unrealized investment gains (losses)		0.6			0.5			0.6			0.8
Junior subordinated debt repurchase expense		(15.1	)		—			(15.1	)		—
Accelerated amortization of subordinated debt discount and issuance cost		(20.3	)		—			(20.3	)		—
Amortization of intangible assets		(1.3	)		(1.5	)		(2.5	)		(2.9	)
Foreign exchange gains (losses)		0.9			(0.4	)		2.0			(1.6	)
Interest and amortization expenses		(9.3	)		(9.1	)		(18.4	)		(18.2	)
Income tax expense		(0.5	)		(0.3	)		(1.7	)		(0.6	)
Net (loss) income	$	(24.4	)	$	18.6		$	(5.0	)	$	32.2

Selected Consolidated Ratios:
Net loss and loss expense ratio		67.7	%		61.8	%		65.4	%		63.1	%
Acquisition cost ratio		28.6	%		31.2	%		29.5	%		30.3	%
General and administrative expense ratio		3.5	%		3.3	%		3.5	%		3.3	%
Expense ratio		32.1	%		34.5	%		33.0	%		33.6	%
Combined ratio		99.8	%		96.3	%		98.4	%		96.7	%

Net loss for the three months ended June 30, 2011 was $24.4 million as compared to net income of $18.6 million for the same period in 2010. The loss was the result of charges related to the Senior Notes offering and the second quarter 2011 results include $15.1 million of junior subordinated debt repurchase expense and $20.3 million of accelerated amortization of subordinated debt discount and issuance costs. Operating earnings, which includes the items related to the Senior Notes offering as well as other items as defined, was $11.2 million for the three months ended June 30, 2011, as compared to $21.2 million for the same period in 2010. The 2011 results include $9.5 million in losses related to thunderstorm and tornado activity across the U.S. in the second quarter, net of the Company’s quarterly provisions for normalized catastrophe activity.

Net loss for the six months ended June 30, 2011 was $5.0 million as compared to net income of $32.2 million for the same period in 2010. The loss was the result of charges related to the Senior Notes offering and the six month 2011 results include $15.1 million of junior subordinated debt repurchase expense and $20.3 million of accelerated amortization of subordinated debt discount and issuance costs. Operating earnings, which includes the items related to the Senior Notes offering as well as other items as defined, was $31.0 million for the six months ended June 30, 2011, as compared to $37.4 million for the same period in 2010. The 2011 results also include $9.5 million in losses related to thunderstorm and tornado activity across the U.S. in the second quarter, net of the Company’s quarterly provisions for normalized catastrophe activity.

Comparison of Three and Six Months Ended June 30, 2011 and 2010

Premiums. We evaluate our business by segment. The following table details the mix of our business on both a net premiums written and net premiums earned basis:

	Net Premiums Written												Net Premiums Earned
	For the three months ended June 30,						For the six months ended June 30,						For the three months ended June 30,						For the six months ended June 30,
	2011			2010			2011			2010			2011			2010			2011			2010
Diversified Reinsurance		36.2	%		43.7	%		47.0	%		48.8	%		46.3	%		57.0	%		48.2	%		57.1	%
AmTrust Quota Share Reinsurance		49.5	%		34.8	%		38.7	%		36.9	%		37.1	%		35.8	%		35.1	%		38.8	%
ACAC Quota Share		14.3	%		21.5	%		14.3	%		14.3	%		16.6	%		7.2	%		16.7	%		4.1	%
Total		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

A variety of factors resulted in continuing growth in the Company’s premium on both a written and earned basis for both the three and six months ended June 30, 2011 as compared to the same periods in 2010. These factors include:

As noted previously, the ACAC Quota Share segment results in 2011 reflect a full six months of operations as compared to 2010, which only had four months of operation.

In addition, the IIS Acquisition, which was completed in the fourth quarter of 2010 and is reported as part of the Diversified Reinsurance segment, continues to diversify the Company.

In the three and six months ended June 30, 2011, the U.S. business associated with the Diversified Reinsurance business experienced growth resulting in further diversification of the Company’s premium base.

Finally, the Company continues to experience diversified growth within its AmTrust segment, which added an additional line of business in the second quarter 2011, with the inception of the European Hospital Liability Quota Share, which is discussed in greater detail in the AmTrust segment discussion.

Net Premiums Written. Net premiums increased by $123.9 million and $262.1 million or 39.6% and 42.0% for the three and six months ended June 30, 2011 as compared to the same period in 2010, respectively. The increase in net premiums written was primarily the result of the following:

Completion of the first year of operations of the ACAC Quota Share segment. While second quarter premium was down slightly, 2011 includes a full six months of results compared to only four months in 2010, resulting in growth of $37.4 million or 42.0% for the six month period 2011 as compared to 2010.

First full calendar quarter of the IIS Acquisition. The IIS Acquisition was completed on November 30, 2010 and thus the three and six months ended June 30, 2011 represents the first full calendar periods of operations for the business associated with the IIS Acquisition, which contributed $26.0 million and $63.8 million of the overall increase in net premium written for the three and six month periods in 2011.

Continued underwriting discipline by Maiden US. Maiden US continues to maintain its underwriting discipline in the face of ongoing significant market competition. However, Maiden US continues to see demand for its products and in the three and six months ended June 30, 2011, was successful in securing a series of new accounts and experienced organic growth, which resulted in increased premiums of $0.7 million and $36.3 million.

Growth in the AmTrust Quota Share Reinsurance segment premium. The commencement of the European Hospital Liability Quota Share increased premiums written by $75.1 million in the three and six months ended June 30, 2011 while the business under the Master Agreement increased $32.3 million and $37.4 million in the three and six months ended June 30, 2011.

Net Premiums Earned. Net premiums earned increased by $84.0 million and $166.6 million or 29.6% and 30.4% for the three and six months ended June 30, 2011 as compared to the same period in 2010, respectively. The increase in net premiums earned was primarily the result of:

Completion of the first year of operations of the ACAC Quota Share segment. As noted, this new segment commenced on March 1, 2010 and thus the six months ended June 30, 2011 represents a full six month period as compared to only four months in 2010, contributing $40.9 million and $96.6 million of the increase for the three and six month periods ended June 30, 2011 as compared to the same periods in 2010, respectively.

First full calendar quarters of the IIS Acquisition. The IIS Acquisition was completed on November 30, 2010 and thus the six months ended June 30, 2011 represents the first full calendar periods of operations for the business associated with the IIS Acquisition, which contributed $22.6 million and $54.1 million of the overall increase in net premium earned for the three and six month periods ended June 30, 2011 as compared to the same periods in 2010, respectively.

Growth in the AmTrust Quota Share Reinsurance segment premium. The commencement of the European Hospital Liability Quota Share increased premiums earned by $19.5 million in the three and six months ended June 30, 2011 while the business under the Master Agreement increased $15.1 million and $19.0 million in the three and six months ended June 30, 2011 as compared to the same periods in 2010, respectively.

Other Insurance Revenue. Other insurance revenue represents the IIS Fee Business that is not directly associated with premium revenue generated by the Company. The three and six months ended June 30, 2011 represent the first full periods of operations for the IIS Fee Business and is primarily in respect of the German auto business.

Net Investment Income. Net investment income increased by $0.9 million and $2.5 million, or 5.0% and 6.9% for the three and six months ended June 30, 2011 compared to the three and six months ended June 30, 2010, respectively. Average invested assets for the period were approximately $2.2 billion and $2.2 billion compared to $2.0 billion and $2.0 billion and average yields were approximately 3.5% and 3.5% compared to 3.8% and 3.6% for the three and six months ended June 30, 2011 and 2010, respectively. Continued growth in the overall book of business, particularly as a result of the ACAC Quota Share and the IIS Acquisition, combined with positive cash flow from operations over the last twelve months contributed to the growth in invested assets.

Net Realized and Unrealized Investment Gains (Losses). Net realized and unrealized gains on investments were $0.6 million for both the three and six months ended June 30, 2011 compared to net realized gains of $0.5 million and $0.8 million for the three and six months ended June 30, 2010, respectively.

Net Loss and Loss Adjustment Expenses. Net loss and loss adjustment expenses increased by $75.2 million and $126.1 million, or 42.9% and 36.5% for the three and six months ended June 30, 2011 compared to the same periods in 2010, respectively. The Company’s loss ratio for the three and six months ended June 30, 2011 increased to 67.7% and 65.4% from 61.8% and 63.1% for the three and six months ended June 30, 2010, respectively. The underwriting impact of U.S storm activity increased the loss ratio by 2.6% and 1.3% in the three and six months ended June 30, 2011. Adjusted for the storm losses, the Company’s loss ratio for the three and six months ended June 30, 2011 was 65.1% and 64.1%, respectively. The increased loss ratio was due to higher loss ratios in all three segments, primarily AmTrust and ACAC. The Company amortized gains as a reduction of losses incurred of $7.4 million and $15.0 million for the three and six months ended June 30, 2011, as compared to $7.1 million and $8.8 million of the same periods in 2010, respectively.

Commission and Other Acquisition Expenses. Commission and other acquisition expenses increased by $17.4 million and $47.1 million, or 19.6% and 28.4% for the three and six months ended June 30, 2011, respectively, compared to the same period in 2010. This reflects both the growth in earned premium as well as modifications to ceding commission made under the Master Agreement and the lower ceding commission and profit share under the AmTrust European Hospital Liability Quota Share, both effective April 1, 2011 and discussed in further detail in that segment’s results of operations.

General and Administrative Expenses. General and administrative expenses include expenses which are segregated for analytical purposes as a component of underwriting income. General and administrative expenses consist of:

	For the three months ended June 30,				For the six months ended June 30,
	2011		2010		2011		2010
	($ in Millions)				($ in Millions)
General and administrative expenses – segments	$	9.4	$	6.3	$	18.6	$	12.7
General and administrative expenses – corporate		3.4		3.2		6.5		5.4
Total	$	12.8	$	9.5	$	25.1	$	18.1

Total general and administrative expenses increased by $3.3 million, or 35.4% and $7.0 million, or 39.3%, for the three and six months ended June 30, 2011 compared to the same period in 2010, respectively. The general and administrative expense ratio, which is a measure of the Company’s efficiency, was 3.5% for the three and six months ended June 30, 2011 compared to 3.3% for the three and six months ended June 30, 2010. The increase in both periods reflects the increased costs associated with the IIS Acquisition previously described.

Interest and Amortization Expenses. The TRUPS Offering was completed in January 2009 and the Senior Notes Offering closed on June 24, 2011. The interest expense for the three and six months ended June 30, 2011 and 2010 consists of the following:

	For the three months ended June 30,				For the six months ended June 30,
	2011		2010		2011		2010
	($ in Millions)				($ in Millions)
TRUPS Offering	$	9.1	$	9.1	$	18.2	$	18.2
Senior Note Offering		0.2		—		0.2		—
Total	$	9.3	$	9.1	$	18.4	$	18.2

The weighted average interest rate was 16.72% and 16.83% for the three and six months ended June 30, 2011 as compared to 16.95% for the same periods in 2010, respectively.

Income Taxes. As a result of the IIS Acquisition in the fourth quarter 2010, the Company now accrues current income taxes in certain foreign jurisdictions, namely Germany, Sweden and the United Kingdom. Accordingly, the Company incurred $0.5 million and $1.7 million in income taxes for the three and six months ended June 30, 2011 as compared to $0.3 million and $0.6 million in the same period in 2010.

Underwriting Results by Segment

The results of operations for our three business segments, Diversified Reinsurance, AmTrust Quota Share Reinsurance and ACAC Quota Share are discussed below. As noted previously, the Company added a third business segment in the first quarter of 2010, ACAC Quota Share. Please refer to the section within Recent Developments captioned ACAC Transaction for further details on this segment.

Diversified Reinsurance Segment

The combined ratio increased to 100.3% and 97.5% for the three and six months ended June 30, 2011 as compared to 94.7% and 95.6% in the same periods ended 2010, respectively. As discussed previously, the 2011 results include the underwriting impact of U.S. storm activity, which increased the combined ratio by 5.5% and 2.7% for the three and six months ended June 30, 2011, respectively.

The following table summarizes the underwriting results and associated ratios for the Diversified Reinsurance segment:

	For the three months ended June 30,						For the six months ended June 30,
	2011			2010			2011			2010
	($ in Millions)						($ in Millions)
Net premiums written	$	158.0		$	136.7		$	416.8		$	304.6

Net premiums earned	$	170.3		$	161.8		$	344.5		$	312.9
Other insurance revenue		2.2			—			6.8			—
Net loss and loss adjustment expenses		(116.4	)		(99.2	)		(226.7	)		(198.6	)
Commissions and other acquisition expenses		(48.3	)		(48.4	)		(99.7	)		(88.9	)
General and administrative expenses		(8.3	)		(5.7	)		(16.3	)		(11.6	)
Underwriting (loss) income	$	(0.5	)	$	8.5		$	8.6		$	13.8

Net loss and loss expense ratio		67.5	%		61.3	%		64.5	%		63.5	%
Acquisition cost ratio		28.0	%		29.9	%		28.4	%		28.4	%
General and administrative expense ratio		4.8	%		3.5	%		4.6	%		3.7	%
Expense ratio		32.8	%		33.4	%		33.0	%		32.1	%
Combined ratio		100.3	%		94.7	%		97.5	%		95.6	%

Net Premiums Written. Net premiums written increased by $21.3 million and $112.2 million, or 15.6% and 36.8% for the three and six months ended June 30, 2011 compared to the three and six months ended June 30, 2010, respectively. The table below details net premiums written by line of business in this segment for the three months ended June 30, 2011 and 2010:

	For the three months ended June 30,				Change In
	2011		2010		$			%
	($ in Millions)
Property	$	49.4	$	36.3	$	13.1			36.3	%
Casualty		76.8		91.8		(15.0	)		(16.4	)%
Accident and Health		5.8		8.6		(2.8	)		(32.0	)%
International		26.0		—		26.0		NM
Total Diversified Reinsurance	$	158.0	$	136.7	$	21.3			15.6	%

NM = Not Meaningful

As noted, the IIS Acquisition was completed on November 30, 2010 and the three months ended June 30, 2011 represents the second full calendar quarter of operations, which accounted for $26.0 million of the increase. In addition, the business written by Maiden US experienced continued growth in the second quarter of 2011 of $0.7 million or 0.6%, as compared to the second quarter of 2010, when certain accounts were not renewed or more premiums was retained by clients. A series of new accounts were successfully placed, primarily excess of loss reinsurance contracts.

The table below details net premiums written by line of business in this segment for the six months ended June 30, 2011 and 2010:

	For the six months ended June 30,				Change In
	2011		2010		$			%
	($ in Millions)
Property	$	121.7	$	94.3	$	27.4			29.0	%
Casualty		207.8		184.0		23.8			12.9	%
Accident and Health		23.5		26.3		(2.8	)		(10.4	) %
International		63.8		—		63.8		NM
Total Diversified Reinsurance	$	416.8	$	304.6	$	112.2			36.8	%

NM = Not Meaningful

As noted, the IIS Acquisition was completed on November 30, 2010 and the six months ended June 30, 2011 represents the first two full calendar quarters of operations, which accounted for $63.8 million of the increase. In the six months ended June 30, 2011, approximately 73.9% of the net premium written of the International line of business was Personal Automobile business associated with the IIS Acquisition. The remainder of the net premium written in the International line of business was Credit Life business associated with the IIS Acquisition. Further, approximately 53.8% of the net premiums written in the International line of business originated in Germany. No other country in International exceeded 10% of net premiums written for the six months ended June 30, 2011. In addition, the business written by Maiden US experienced solid growth in the six months ended June 30, 2011 of $36.3 million or 12.5% as compared to the same period in 2010, when certain accounts were not renewed or more premiums was retained by clients. A series of new accounts were successfully placed, primarily excess of loss reinsurance contracts.

Net Premiums Earned. Net premium earned increased by $8.5 million and $31.6 million, or 5.3% and 10.1% for the three and six months ended June 30, 2011 compared to the three and six months ended June 30, 2010, respectively. The table below details net premiums earned by line of business in this segment for the three months ended June 30, 2011 and 2010:

	For the three months ended June 30,				Change In
	2011		2010		$			%
	($ in Millions)
Property	$	43.9	$	47.6	$	(3.7	)		(7.6	)%
Casualty		92.3		95.8		(3.5	)		(3.7	)%
Accident and Health		11.5		18.4		(6.9	)		(37.8	)%
International		22.6		—		22.6		NM
Total Diversified Reinsurance	$	170.3	$	161.8	$	8.5			5.3	%

NM = Not Meaningful

The increase in earned premiums reflects the addition of the business associated with the IIS Acquisition in 2011 as compared to 2010. This was offset by decreases in the Casualty and Accident & Health (“A&H”) lines of business, reflecting Maiden’s disciplined underwriting which experienced reductions in both lines written amounts of business during 2010 as certain casualty accounts did not renew and the Company de-emphasized the A&H line of business, subsequently reducing the amount of earned premium in both lines in 2011.

The table below details net premiums earned by line of business in this segment for the six months ended June 30, 2011 and 2010:

	For the six months ended June 30,				Change In
	2011		2010		$			%
	($ in Millions)
Property	$	89.4	$	89.3	$	0.1			0.1	%
Casualty		177.9		184.1		(6.2	)		(3.3	)%
Accident and Health		23.1		39.5		(16.4	)		(41.6	)%
International		54.1		—		54.1		NM
Total Diversified Reinsurance	$	344.5	$	312.9	$	31.6			10.1	%

NM = Not Meaningful

The increase in earned premiums reflects the addition of the business associated with the IIS Acquisition in 2011 as compared to 2010. This was offset by decreases in the Casualty and Accident & Health lines of business, reflecting Maiden’s disciplined underwriting which experienced reductions in both lines written amounts of business during 2010 as certain casualty accounts did not renew and the Company de-emphasized the A&H line of business, subsequently reducing the amount of earned premium in both lines in 2011.

Other Insurance Revenue. Other insurance revenue represents the IIS Fee Business that is not directly associated with premium revenue generated by the Company. The first six months of 2011 represents the first full calendar periods of operations for the IIS Fee Business and is primarily in respect of the German auto business.

Net Loss and Loss Adjustment Expenses. Net loss and loss adjustment expenses increased by $17.2 million and $28.1 million or 17.3% and 14.1% for the three and six months ended June 30, 2011 as compared to the same periods in 2010, respectively. The segments loss ratio for the three and six months ended June 30, 2011 increased to 67.5% and 64.5% from 61.3% and 63.5% for the three and six months ended June 30, 2010, respectively. The underwriting impact of U.S storm activity increased the loss ratio by 5.5% and 2.7% in the three and six months ended June 30, 2011. Adjusted for the storm losses, the Company’s loss ratio for the three and six months ended June 30, 2011 was 62.0% and 61.8%, respectively. Amortized gains as a reduction of losses incurred of $7.4 million and $15.0 million for the three and six months ended June 30, 2011, as compared to $7.1 million and $8.8 million of the same periods in 2010, respectively.

Commission and Other Acquisition Expenses. Commissions and other acquisition expenses decreased by $0.1 million or 0.3% for the three months ended June 30, 2011 as compared to the same period in 2010 and increased $10.8 million or 12.1% for the six months ended June 30, 2011 as compared to the same period in 2010, consistent with the change in earned premiums.

General and Administrative Expenses. General and administrative expenses increased by $2.6 million and $4.7 million, or 45.1% and 40.9%, for the three and six months ended June 30, 2011 compared to the same periods in 2010, respectively. The increase in expenses is the result of growth in the segments premiums, particularly as a result of the IIS Acquisition. The general and administrative expense ratio was 4.8% and 4.6% for the three and six months ended June 30, 2011, as compared to 3.5% and 3.7% for the same periods in 2010, respectively. The overall expense ratio (including acquisition costs) was 32.8% and 33.0% and 33.4% and 32.1% for the three and six months ended June 30, 2011 and 2010, respectively.

AmTrust Quota Share Reinsurance Segment

Pursuant to agreements entered into on July 26, 2011, effective April 1, 2011, the Company entered into a series of contract modifications with AmTrust regarding the reinsurance coverage it provides under the Quota Share Reinsurance Agreement (“Reinsurance Agreement”), including the ceding commission arrangements contained within that contract. These changes include: 1) extension of the Reinsurance Agreement for one additional year, to July 1, 2014, while continuing the automatic three-year renewal subject to the provisions of the agreement; 2) a reduction of the ceding commission payable under the Reinsurance Agreement to 30.0% for the period April 1 to December 31, 2011; and 3) subsequent to December 31, 2011, a provision which potentially reduces the ceding commission payable based on the mix of business ceded under the Reinsurance Agreement, excluding business related to the UBI business to either 30.5% or 30.0%.

In addition, the Company entered into a separate one-year 40% quota share agreement (“European Hospital Liability Quota Share”) with AmTrust Europe Limited and AmTrust International Underwriters Limited to cover those entities medical liability business in Europe, substantially all of which is in Italy. The Company’s maximum limit of liability is €2 million and it will pay a ceding commission of 5.0% plus a profit share as defined in the agreement. The profit sharing is based upon the reinsured exceeding defined underwriting performance of each contract year, commencing two years after the beginning of each contract year. To the extent that the underwriting performance is exceeded, the Company will share 50% of the excess amounts computed. Pursuant to the terms of the European Hospital Liability Quota Share, the Company assumed the in force and unearned premium as of April 1 which totaled $45.9 million. The business written under this agreement will be included in the Specialty Risk and Extended Warranty line of business in the discussion that follows. As a result of the additional agreement with AmTrust, this segment’s name has been renamed AmTrust Quota Share Reinsurance.

The combined ratio increased to 97.9% and 97.7% for the three and six months ended June 30, 2011 as compared to 95.5% and 95.7% for the same period in 2010, respectively. The cause of the increase was due to an increase in the overall loss ratio, offset by a reduction in commissions as a result of a negotiated reduction in the ceding commission of 1.0% effective April 1, 2011. The following table summarizes the underwriting results and associated ratios for the segment for the three and six months ended June 30, 2011 and 2010:

	For the three months ended June 30,						For the six months ended June 30,
	2011			2010			2011			2010
	($ in Millions)						($ in Millions)
Net premiums written	$	216.4		$	109.1		$	343.2		$	230.7

Net premiums earned	$	136.3		$	101.7		$	250.8		$	212.3
Net loss and loss adjustment expenses		(94.8	)		(63.4	)		(168.3	)		(133.0	)
Commissions and other acquisition expenses		(38.1	)		(33.1	)		(75.3	)		(69.2	)
General and administrative expenses		(0.6	)		(0.6	)		(1.3	)		(1.1	)
Underwriting income	$	2.8		$	4.6		$	5.9		$	9.0

Net loss and loss expense ratio		69.5	%		62.4	%		67.1	%		62.6	%
Acquisition cost ratio		28.0	%		32.5	%		30.0	%		32.6	%
General and administrative expense ratio		0.4	%		0.6	%		0.6	%		0.5	%
Expense ratio		28.4	%		33.1	%		30.6	%		33.1	%
Combined ratio		97.9	%		95.5	%		97.7	%		95.7	%

Premiums. Net premiums written increased by $107.3 million or 98.4% for the three months ended June 30, 2011, as compared to the same period in 2010. The increase in net premiums written was primarily due to the commencement of the European Hospital Liability Quota Share effective April 1, 2011, including the $45.9 million in force and unearned premium assumed at the commencement. Net premiums written for the European Hospital Liability Quota Share was $29.2 million relating to policies written after April 1, 2011. Excluding this new coverage, the net premiums written in the segment increased by $32.2 million or 29.6%, primarily due to continuing increases in each line of business. The table below details components of net premiums written for the three months ended June 30, 2011 as compared to the same period in 2010:

	For the three months ended June 30,				Change In
	2011		2010		$		%
	($ in Millions)
Small Commercial Business	$	54.9	$	44.9	$	10.0		22.3	%
Specialty Program		27.0		20.8		6.2		29.5	%
Specialty Risk and Extended Warranty		134.5		43.4		91.1		210.0	%
Total AmTrust Quota Share Reinsurance	$	216.4	$	109.1	$	107.3		98.4	%

Net premiums written increased by $112.5 million or 48.8% for the six months ended June 30, 2011, as compared to the same period in 2010. The increase in net premiums written was primarily due to the commencement of the European Hospital Liability Quota Share effective April 1, 2011, including the $45.9 million in force and unearned premium assumed at the commencement. Net premiums written for the European Hospital Liability Quota Share was $29.2 million relating to policies written after April 1, 2011. Excluding this new coverage, the net premiums written in the segment increased by $37.4 million or 16.2%. The table below details components of net premiums written for the six months ended June 30, 2011 as compared to the same period in 2010:

	For the six months ended June 30,				Change In
	2011		2010		$		%
	($ in Millions)
Small Commercial Business	$	116.6	$	103.8	$	12.8		12.3	%
Specialty Program		35.5		30.9		4.6		14.7	%
Specialty Risk and Extended Warranty		191.1		96.0		95.1		99.2	%
Total AmTrust Quota Share Reinsurance	$	343.2	$	230.7	$	112.5		48.8	%

Net premiums earned increased by $34.6 million or 34.1% for the three months ended June 30, 2011 as compared to the same period in 2010. The increase in net premiums earned was primarily due to the commencement of the European Hospital Liability Quota Share effective April 1, 2011, which accounted for $19.5 million of the overall increase. Excluding this new coverage, the net premiums earned in the segment increased by $15.1 million or 14.9%. The table below details components of net premiums earned for the three months ended June 30, 2011 as compared to the same period in 2010:

	For the three months ended June 30,				Change In
	2011		2010		$			%
	($ in Millions)
Small Commercial Business	$	51.3	$	56.2	$	(4.9	)		(8.7	)%
Specialty Program		20.1		16.7		3.4			20.5	%
Specialty Risk and Extended Warranty		64.9		28.8		36.1			125.3	%
Total AmTrust Quota Share Reinsurance	$	136.3	$	101.7	$	34.6			34.1	%

Net premiums earned increased by $38.5 million or 18.1% for the six months ended June 30, 2011 as compared to the same period in 2010. The increase in net premiums earned was primarily due to the commencement of the European Hospital Liability Quota Share effective April 1, 2011, which accounted for $19.5 million of the overall increase. Excluding this new coverage, the net premiums earned in the segment increased by $19.0 million or 8.9%. The table below details components of net premiums earned for the six months ended June 30, 2011 as compared to the same period in 2010:

	For the six months ended June 30,				Change In
	2011		2010		$			%
	($ in Millions)
Small Commercial Business	$	100.5	$	108.1	$	(7.6	)		(7.1	)%
Specialty Program		36.5		31.5		5.0			16.1	%
Specialty Risk and Extended Warranty		113.8		72.7		41.1			56.4	%
Total AmTrust Quota Share Reinsurance	$	250.8	$	212.3	$	38.5			18.1	%

Net Loss and Loss Adjustment Expenses. Net loss and loss adjustment expenses increased by $31.3 million or 49.4% and $35.3 million and 26.5% for the three and six months ended June 30, 2011 as compared to the same periods in 2010, respectively. The segments loss ratio increased to 69.5% and 67.1% for the three and six months ended June 30, 2011 compared to 62.4% and 62.6% for the same periods in 2010. The increase in the loss ratios reflects the ongoing shift in the mix of business to Specialty Risk and Extended Warranty under the Reinsurance Agreement, which historically produces higher loss ratios than the other lines of business associated with the Reinsurance Agreement.

Commission and Other Acquisition Expenses. Commission and other acquisition expenses increased by $5.0 million or 15.2% and $6.1 million or 8.8% for the three and six months ended June 30, 2011 compared to the same periods in 2010, respectively. The commission and acquisition ratio declined to 28.0% and 30.0% for the three and six months ended June 30, 2011 as compared to 32.5% and 32.6% for the same periods in 2010, respectively. The change in both the expenses and ratio reflects the modifications to ceding commission made under the Reinsurance Agreement and the lower ceding commission and profit share under the European Hospital Liability Quota Share, both effective April 1, 2011. The impact of the lower ceding commission rate reduced the amount of ceding commission paid to AmTrust by $1.1 million for the three and six months ended June 30, 2011. Expenses have also increased in both periods as a result of ongoing growth in earned premium.

General and Administrative Expenses. General and administrative expenses increased by less than $0.2 million for the six months ended June 30, 2011 compared to the same period in 2010.

ACAC Quota Share Segment

Please refer to the above discussion of the ACAC Transaction, which resulted in this segment commencing on March 1, 2010. As a result, comparability between periods is affected by the fact that the results for the first quarter of 2010 reflect only one month of results. For the three and six months ended June 30, 2011, the combined ratio was 97.1% and 97.2%, compared to a combined ratio of 96.8% for both the three months ended June 30, 2010 and the period March 1 to June 30, 2010.

	For the three months ended June 30,						For the six months ended June 30,			For the period from March 1 to June 30,
	2011			2010			2011			2010
	($ in Millions)						($ in Millions)
Net premiums written	$	62.5		$	67.2		$	126.5		$	89.0
Net premiums earned	$	61.2		$	20.4		$	119.0		$	22.4
Net loss and loss adjustment expenses		(39.5	)		(12.7	)		(76.8	)		(14.0	)
Commissions and other acquisitions expenses		(19.4	)		(7.0	)		(37.9	)		(7.7	)
General and administrative expenses		(0.5	)		—			(1.0	)		—
Underwriting income	$	1.8		$	0.7		$	3.3		$	0.7
Net loss and loss expense ratio		64.5	%		62.5	%		64.5	%		62.5	%
Acquisition cost ratio		31.8	%		34.3	%		31.8	%		34.3	%
General and administrative expense ratio		0.8	%		—			0.9	%		—
Expense ratio		32.6	%		34.3	%		32.7	%		34.3	%
Combined ratio		97.1	%		96.8	%		97.2	%		96.8	%

Premiums. Net premium written decreased by $4.7 million, or 7.0% for the three months ended June 30, 2011 compared to the same period in 2010. The table below details net premiums written by line of business in this segment for the three months ended June 30, 2011 and 2010:

	For the three months ended June 30,				Change in
	2011		2010		$			%
	($ in Millions)
Automobile liability	$	35.5	$	38.5	$	(3.0	)		(7.9	)%
Automobile physical damage		27.0		28.7		(1.7	)		(5.8	)%
Total ACAC Quota Share	$	62.5	$	67.2	$	(4.7	)		(7.0	)%

Net premium written increased by $37.5 million, or 42.0% for the six months ended June 30, 2011 compared to the period from March 1 to June 30, 2010. The table below details net premiums written by line of business in this segment for the six months ended June 30, 2011 and the period March 1 to June 30, 2010:

	For the six months ended June 30,		For the period from March 1 to June 30,		Change in
	2011		2010		$		%
	($ in Millions)
Automobile liability	$	72.2	$	51.0	$	21.2		41.7	%
Automobile physical damage		54.3		38.0		16.3		42.5	%
Total ACAC Quota Share	$	126.5	$	89.0	$	37.5		42.0	%

Net premium earned increased by $40.9 million, or 200.9% for the three months ended June 30, 2011 compared to the same period in 2010. The table below details net premiums earned by line of business in this segment for the three months ended June 30, 2011 and 2010:

	For the three months ended June 30,				Change in
	2011		2010		$		%
	($ in Millions)
Automobile liability	$	35.0	$	11.4	$	23.6		206.1	%
Automobile physical damage		26.2		8.9		17.3		194.2	%
Total ACAC Quota Share	$	61.2	$	20.3	$	40.9		200.9	%

Net premium earned increased by $96.6 million, or 430.6% for the six months ended June 30, 2011 compared to the period from March 1 to June 30, 2010. The table below details net premiums earned by line of business in this segment for the six months ended June 30, 2011 and 2010:

	For the six months ended June 30,		For the period from March 1 to June 30,		Change in
	2011		2010		$		%
	($ in Millions)
Automobile liability	$	68.0	$	12.6	$	55.4		440.1	%
Automobile physical damage		51.0		9.8		41.2		418.5	%
Total ACAC Quota Share	$	119.0	$	22.4	$	96.6		430.6	%

Commission and Other Acquisition Expenses. The ACAC Quota Share provides that the reinsurers pay a provisional ceding commission equal to 32.5% of ceded earned premium, net of premiums ceded by the personal lines companies for inuring reinsurance, subject to adjustment. The ceding commission is subject to adjustment to a maximum of 34.5% if the loss ratio for the reinsured business is 60.5% or less and a minimum of 30.5% if the loss ratio is 64.5% or higher. For both the three and six months ended June 30, 2011, the three months ended June 30, 2010 and the period from March 1 to June 30, 2010, the acquisition cost ratio of 31.8% and 31.8%, 34.3% and 34.3%, respectively, reflects the adjusted ceding commission recorded in addition to the U.S. Federal excise tax payable on this premium.

Liquidity and Capital Resources

Liquidity

Maiden Holdings is a holding company and transacts no business of its own. We therefore rely on cash flows to Maiden Holdings in the form of dividends, advances and loans and other permitted distributions from its subsidiary companies to make dividend payments on its common shares.

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 Maiden Bermuda is, under certain circumstances, limited under Bermuda law, which requires our Bermuda operating subsidiary to maintain certain measures of solvency and liquidity. In addition, Bermuda regulations require approval from the Bermuda Monetary Authority for any reduction of capital in excess of 15% of statutory capital, as defined in the Insurance Act. At June 30, 2011, the statutory capital and surplus of Maiden Bermuda was $682.4 million, and the amount of capital and surplus required to be maintained was $163.2 million. During 2011 and 2010, Maiden Bermuda paid no dividends to Maiden Holdings.

Maiden Holdings’ U.S. domiciled operating subsidiaries, Maiden US and Maiden Specialty, are subject to significant regulatory restrictions limiting their ability to declare and pay dividends by their states of domicile, which are Missouri and North Carolina, respectively. In addition, there are restrictions based on risk-based capital tests which is the threshold that constitutes the authorized control level. If Maiden US or Maiden Specialty’s statutory capital and surplus falls below the authorized control level, their respective domiciliary insurance regulators are authorized to take whatever regulatory actions are considered necessary to protect policyholders and creditors. 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 principal, interest and dividend payments on its Senior Notes and common shares. During 2011 and 2010, Maiden US and Maiden Specialty paid no dividends.

Our sources of funds primarily consist of premium receipts net of commissions, 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 net loss and loss adjustment expenses, general and administrative expenses and dividends, with the remainder made available to our investment managers for investment in accordance with our investment policy. A summary of cash flows provided by (used in) operating, investing and financing activities for the six months ended June 30, 2011 and 2010 is as follows:

	For the six months ended June 30,
	2011		2010
	($ in Millions)
Operating activities	$	43.6	$	72.4
Investing activities		39.0		33.6
Financing activities		18.5		(33.6	)
Effect of foreign exchange		1.1		(0.8	)
Total increase in cash and cash equivalents	$	102.2	$	71.6

Cash flows provided by operations for the six months ended June 30, 2011 were $43.6 million compared to $72.4 million for the six months ended June 30, 2010. The amount of cash provided by operations was lower in 2011 as compared to 2010 due to growth in the Company’s premium, particularly in the second quarter of 2011, which resulted in a significant increase in reinsurance balances receivable as of June 30, 2011. The Company’s assets grew by $310.7 million or 10.4% as of June 30, 2011 as compared to December 31, 2010. This increase in assets should ultimately increase cash provided by operating activities as cash from that asset growth is realized.

Investing cash flows consist primarily of proceeds on the sale of investments and payments for investments acquired. Net cash from investing activities provided $39.0 million during the six months ended June 30, 2011 compared to $33.6 million for the six months ended June 30, 2010, as the Company continued to deploy available cash for longer-term investments. During the six months ended June 30, 2011, the proceeds of sales and calls of fixed maturity securities exceeded purchases of such instruments by $63.2 million. These net proceeds along with cash flow provided by operations contributed to the repayment of the Company’s repurchase agreements.

Cash flows provided by financing activities were $18.5 million for the six months ended June 30, 2011 compared to $33.6 million used in for the six months ended June, 2010. In 2011, cash flow provided included $107.5 million from the closing of the Senior Note Offering, offset by dividends paid of $10.1 million and the repayment of $76.2 million of the proceeds from the securities sold under agreements to repurchase, at contract value. In 2010, cash flow used consisted of dividends paid of $9.1 million and the repayment of $24.4 million of the proceeds from the securities sold under agreements to repurchase, at contract value.

As of June 30, 2011, cash and cash equivalents are temporarily elevated due to the timing of the closing of the Senior Notes Offering on June 24, 2011, which totaled $107.5 million and the repurchase of a like amount junior subordinated debt related to the 2009 TRUPS Offering on July 15, 2011 which was funded by the Senior Notes Offering. Including the repurchase expense associated with the junior subordinated debt, cash and cash equivalents would have been $122.6 million lower at June 30 had the repurchase occurred on or before June 30, 2011.

Restrictions, Collateral and Specific Requirements

Maiden Bermuda is neither licensed nor admitted as an insurer, nor is it accredited as a reinsurer, in any jurisdiction in the United 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 the United States in order for U.S. ceding companies to obtain credit on their U.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 Bermuda 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.

Maiden US also offers to its clients, on a voluntary basis, the ability to collateralize certain liabilities related to the reinsurance contracts it issues. Under these arrangements, Maiden US retains broad investment discretion in order to achieve its business objectives while offering clients the additional security a collateralized arrangement offers. We believe this offers the Company a significant competitive advantage and improves the Company’s retention of high-quality clients. As a result of the transition of relationships as a result of the GMAC Acquisition, as of June 30, 2011, certain of these liabilities and collateralized arrangements are on the records of Maiden Bermuda while the remaining are on the records of Maiden US.

As of June 30, 2011, total trust account deposits were $1,421.8 million compared to $1,518.9 million as of December 31, 2010. The following table details additional information on the trust account deposits by segment and by underlying asset as of June 30, 2011 and December 31, 2010:

	June 30, 2011						December 31, 2010
	Cash & Equivalents		Fixed Maturities		Total		Cash & Equivalents		Fixed Maturities		Total
	($ in Millions)						($ in Millions)
Maiden US	$	12.0	$	596.8	$	608.8	$	13.4	$	558.1	$	571.5
Maiden Bermuda		35.6		323.0		358.6		49.0		515.8		564.8
Total Diversified Reinsurance Segment		47.6		919.8		967.4		62.4		1,073.9		1,136.3

Maiden Bermuda		18.9		387.6		406.5		18.1		340.5		358.6
Total AmTrust Quota Share Reinsurance Segment		18.9		387.6		406.5		18.1		340.5		358.6

Maiden Bermuda		0.7		47.2		47.9		9.3		14.7		24.0
ACAC Quota Share		0.7		47.2		47.9		9.3		14.7		24.0
Total	$	67.2	$	1,354.6	$	1,421.8	$	89.8	$	1,429.1	$	1,518.9

As part of the AmTrust Quota Share, Maiden Bermuda has also loaned funds totaling $168.0 million as of June 30, 2011 and December 31, 2010, respectively, to AII to satisfy collateral requirements. In addition, Maiden Bermuda has outstanding letters of credit totaling $27.9 million and $24.0 million as of June 30, 2011 and December 31, 2010, 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 letters 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.

IIS Acquisition – Funds Withheld

The substantial majority of the premiums and losses underwritten by GMAC IICL are subject to collateral requirements in the form of letters of credit and trust agreements. At the closing of the IIS Acquisition, the Company settled cash balances applicable to the subject reinsurance contracts with GMAC IICL of $26.2 million. Actual assets in support of the liabilities assumed under the IICL Agreement will be transferred to the Company when the subject individual agreements are novated to Maiden Bermuda. In the interim, under the funds withheld provisions of the IICL Agreement, the Company is fully credited for the investment income earned by the underlying assets which support the letters of credit and trust agreements GMAC IICL has provided to its ceding companies.

The pre-existing funds withheld amounts (“IIS Funds Withheld”) and cash transferred to GMAC IICL are included in the consolidated balance sheet as Funds Withheld. When the underlying reinsurance contracts are novated to Maiden Bermuda per the terms of the IICL Agreement, Maiden Bermuda will provide collateral in the form of both trusts and letters of credit as required by the respective reinsurance contracts. As of June 30, 2011, eight novations of reinsurance contracts have been agreed to; transfers of the subject balances to the Company are pending. At June 30, 2011 and December 31, 2010, the IIS Funds Withheld balance consisted of the following:

	June 30, 2011					December 31, 2010
	Balance		% of Total			Balance		% of Total
	($ in Millions)					($ in Millions)
Fixed maturities, at fair value	$	102.9		70.8	%	$	109.1		71.4	%
Cash and cash equivalents		10.2		7.0	%		10.3		6.8	%
Funds held on underlying business		18.3		12.6	%		18.0		11.8	%
Insurance balances receivable and other		13.9		9.6	%		15.3		10.0	%
Total	$	145.3		100.0	%	$	152.7		100.0	%

The fixed maturity portfolio consists of non-U.S. government debt, 73.5% and 67.1% of which is rated AAA as of June 30, 2011 and December 31, 2010, respectively. The three largest non-U.S. Sovereign government issuers are the following:

	June 30, 2011					December 31, 2010
	Fair Value		% of Total			Fair Value		% of Total
	($ in Millions)					($ in Millions)
United Kingdom	$	30.5		29.6	%	$	29.8		27.3	%
Germany		21.1		20.5	%		19.9		18.2	%
Italy		18.8		18.2	%		17.4		15.9	%

As of December 31, 2010, 9.6% of these securities consist of non-U.S. government obligations related to Ireland which we have subsequently disposed of. As of June 30, 2011, we do not have any non-U.S. government and government related obligations related to Ireland, Greece, Portugal or Spain. We had no exposure to government elected obligations of Greece, Portugal and Spain as of December 31, 2010. See the discussion in Counterparty Credit Risk in Item 3 of Part I of this Form 10-Q related to the release of assets forming part of the IIS Funds Withheld.

Investments

Our funds are primarily invested in liquid, high-grade fixed income securities and are substantially considered available-for-sale (“AFS”) with an orientation to generating current income. As of June 30, 2011, the weighted average duration of our fixed maturity investment portfolio was 3.61 years and there were approximately $76.2 million of net unrealized gains in the portfolio, compared to a duration of 3.8 years and net AFS unrealized gains of $54.6 million in the portfolio as of December 31, 2010. The table below shows the aggregate amounts of our invested AFS assets and other investments at fair value at June 30, 2011 and December 31, 2010:

As of June 30, 2011	Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	($ in Millions)
Corporate bonds	$	661.9	$	52.4	$	(9.0	)	$	705.3
Non U.S. government bonds		14.7		1.5		—			16.2
Municipal bonds		42.2		0.6		(0.5	)		42.3
U.S. Treasury bond		44.2		1.4		—			45.6
U.S. agency bonds – mortgage backed		994.8		30.3		(2.0	)		1,023.1
U.S. agency bonds - other		16.8		1.5		—			18.3
Total AFS fixed maturities	$	1,774.6	$	87.7	$	(11.5	)	$	1,850.8

Other investments	$	1.8	$	0.2	$	—		$	2.0

As of December 31, 2010	Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	($ in Millions)
Corporate bonds	$	673.8	$	46.6	$	(11.4	)	$	709.0
Non U.S. government bonds		15.5		0.4		—			15.9
Municipal bonds		45.2		0.4		(0.8	)		44.8
U.S. Treasury bond		92.0		1.1		(1.4	)		91.7
U.S. agency bonds – mortgage backed		951.5		22.4		(4.4	)		969.5
U.S. agency bonds - other		41.8		1.7		—			43.5
Total AFS fixed maturities	$	1,819.8	$	72.6	$	(18.0	)	$	1,874.4

Other investments	$	5.8	$	0.1	$	—		$	5.9

Investments were generally stable in the second quarter of 2011. Positive operating cash flows and a continuing increase in fair values were offset by utilization of funds to reduce to $0 the securities sold under agreements to repurchase, at contract value at June 30, 2011.

We review our investment portfolio for impairment on a quarterly basis. Impairments of investment securities results in a charge to operations when a market decline below cost is deemed to be other-than-temporary. To determine the recovery period of a fixed maturity security, we consider the facts and circumstances surrounding the underlying issuer including, but not limited to, the following:

•

Historic and implied volatility of the security;

•

Length of time and extent to which the fair value has been less than amortized cost;

•

Adverse conditions specifically related to the security or to specific conditions in an industry or geographic area;

•

Failure, if any, of the issuer of the security to make scheduled payments; and

•

Recoveries or additional declines in fair value subsequent to the balance sheet date.

When assessing our intent to sell a fixed maturity security or if it is more likely that we will be required to sell a fixed maturity security before recovery of its cost basis, we evaluate facts and circumstances such as, but not limited to, decisions to reposition our security portfolio, sale of securities to meet cash flow needs and sales of securities to capitalize on favorable pricing. In order to determine the amount of the credit loss for a fixed maturity security, we calculate the recovery value by performing a discounted cash flow analysis based on the current cash flows and future cash flows we expect to recover. The discount rate is the effective interest rate implicit in the underlying fixed maturity security. The effective interest rate is the original yield or the coupon if the fixed maturity security was previously impaired. If OTTI exists and we have the intent to sell the security, we conclude that the entire OTTI is credit-related and the amortized cost for the security is written down to current fair value with a corresponding charge to realized loss on our Consolidated Statements of Income. If we do not intend to sell a fixed maturity security or it is not more likely than not we will be required to sell a fixed maturity security before recovery of its amortized cost basis but the present value of the cash flows expected to be collected is less than the amortized cost of the fixed maturity security (referred to as the credit loss), we conclude that an OTTI has occurred and the amortized cost is written down to the estimated recovery value with a corresponding charge to realized loss on our Consolidated Statements of Income, as this is also deemed the credit portion of the OTTI. The remainder of the decline to fair value is recorded to other comprehensive income (“OCI”), as an unrealized OTTI loss on our Consolidated Balance Sheets, as this is considered a non-credit (i.e., recoverable) impairment.

During the three months ended June 30, 2011 and 2010, the Company recognized no other-than-temporary impairment. Based on our qualitative and quantitative impairment review of each asset class within our fixed maturity portfolio, the remaining unrealized losses on fixed maturities at June 30, 2011, were primarily due to widening of credit spreads relating to the market illiquidity, rather than credit events. Because we do not intend to sell these securities and it is not more likely than not that we will be required to sell 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 June 30, 2011.

The Company may, from time to time, engage in investment activity that will be considered trading activity, in amounts generally less than $100 million. This trading activity is generally focused on taking long or short positions in United States Treasury securities. These activities, which commenced in the second quarter of 2010, are classified as trading for the purpose of augmenting where possible investment returns. For the three and six months ended June 30, 2011, $0.8 million and $0.8 million in realized gains from these trading activities occurred, as compared to a net realized loss of $0.6 million for the same periods in 2010, respectively. As of June 30, 2011, the Company maintained one open long position in a U.S. treasury bond valued at $49.9 million which as of June 30, 2011 had resulted in an unrealized loss of $0.3 million which is recorded in net realized and unrealized gains (losses) on the Company’s consolidated statements of income. This position was subsequently sold in July 2011 at a gain of $0.7 million.

The following table presents information regarding our invested assets that were in an unrealized loss position at June 30, 2011 and December 31, 2010, and split by the length of time the assets are in a continuous unrealized loss position:

	Less Than 12 Months					12 Months or More					Total
As of June 30, 2011	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	($ in Millions)
Available-for-sale securities:
U.S. agency bonds – mortgage backed	$	218.9	$	(2.0	)	$	—	$	—		$	218.9	$	(2.0	)
Corporate bonds		55.1		(1.0	)		129.5		(8.0	)		184.6		(9.0	)
Municipal bonds		15.9		(0.5	)		—		—			15.9		(0.5	)
Total temporarily impaired AFS securities	$	289.9	$	(3.5	)	$	129.5	$	(8.0	)	$	419.4	$	(11.5	)

As of June 30, 2011, there were approximately 21 securities in an unrealized loss position with a fair value of $419.4 million and unrealized losses of $11.5 million. Of these securities, there are 7 securities that have been in an unrealized loss position for 12 months or greater with a fair value of $129.5 million and unrealized losses of $8.0 million.

	Less Than 12 Months					12 Months or More					Total
As of December 31, 2010	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	($ in Millions)
Available-for-sale securities:
U.S. treasury bonds	$	47.2	$	(1.4	)	$	—	$	—		$	47.2	$	(1.4	)
U.S. agency bonds – mortgage backed		315.4		(4.3	)		—		—			315.4		(4.3	)
Corporate bonds		86.9		(1.6	)		166.1		(9.9	)		253.0		(11.5	)
Municipal bonds		27.3		(0.8	)		—		—			27.3		(0.8	)
Total temporarily impaired AFS securities	$	476.8	$	(8.1	)	$	166.1	$	(9.9	)	$	642.9	$	(18.0	)

As of December 31, 2010, there were approximately 32 securities in an unrealized loss position with a fair value of $642.9 million and unrealized losses of $18.0 million. Of these securities, there are 9 securities that have been in an unrealized loss position for 12 months or greater with a fair value of $166.1 million and unrealized losses of $9.9 million.

The following table summarizes the fair value by contractual maturity of our AFS fixed maturity investment portfolio (on a fair value basis) as of June 30, 2011 and December 31, 2010:

	June 30, 2011					December 31, 2010
	($ in Millions)		% of Total			($ in Millions)		% of Total
Due in one year or less	$	66.5		3.6	%	$	65.4		3.5	%
Due after one year through five years		228.1		12.3	%		180.2		9.6	%
Due after five years through ten years		455.9		24.6	%		578.7		30.9	%
Due after ten years		77.2		4.2	%		80.6		4.3	%
U.S. agency bonds - mortgage-backed securities		1,023.1		55.3	%		969.5		51.7	%
Total	$	1,850.8		100.0	%	$	1,874.4		100.0	%

As of June 30, 2011 and December 31, 2010, 98.8% and 97.9%, respectively, of our AFS fixed income portfolio consisted of investment grade securities. We define a security as being below-investment grade if it has an S&P credit rating of BB or less. The following table summarizes the composition of the fair value of our fixed maturity investments at the dates indicated by ratings as assigned by Standard & Poor’s (“S&P”) and/or other rating agencies when S&P ratings were not available:

Ratings as of June 30, 2011	Amortized Cost		Fair Market Value		% of Total Fair Market Value
	($ in Millions)
U.S. treasury bonds	$	44.2	$	45.6		2.4	%
U.S. agency bonds		1,011.6		1,041.4		56.3	%
AAA		57.2		60.5		3.3	%
AA+, AA, AA-		83.6		90.5		4.9	%
A+, A, A-		323.5		331.4		17.9	%
BBB+, BBB, BBB-		232.4		258.8		14.0	%
BB+ or lower		22.1		22.6		1.2	%
Total	$	1,774.6	$	1,850.8		100.0	%

Ratings as of December 31, 2010	Amortized Cost		Fair Market Value		% of Total Fair Market Value
	($ in Millions)
U.S. treasury bonds	$	92.0	$	91.7		4.9	%
U.S. agency bonds		993.2		1,013.0		54.0	%
AAA		74.7		78.5		4.2	%
AA+, AA, AA-		74.5		79.4		4.2	%
A+, A, A-		325.3		329.1		17.6	%
BBB+, BBB, BBB-		222.5		244.1		13.0	%
BB+ or lower		37.6		38.6		2.1	%
Total	$	1,819.8	$	1,874.4		100.0	%

The majority of the Company’s U.S. government agency-based securities holdings are mortgage-backed securities. Additional details on the mortgage-backed securities component of our U.S. government agency-based investment portfolio at June 30, 2011 and December 31, 2010 are provided below:

	June 30, 2011					December 31, 2010
	Fair Value		% of Total			Fair Value		% of Total
	($ in Millions)					($ in Millions)
Mortgage-backed securities (“MBS”)
Residential mortgage-backed (“RMBS”)
GNMA – Fixed Rate	$	258.5		24.8	%	$	273.5		27.0	%
FNMA – Fixed Rate		512.9		49.3	%		465.7		46.0	%
FNMA – Variable Rate		86.0		8.3	%		80.0		7.9	%
FHLMC – Fixed Rate		165.7		15.9	%		150.3		14.8	%
Total agency RMBS		1,023.1		98.3	%		969.5		95.7	%
Total mortgage-backed securities		1,023.1		98.3	%		969.5		95.7	%
Non-MBS fixed rate Agency securities		18.3		1.7	%		43.5		4.3	%
Total US Agency bonds	$	1,041.4		100.0	%	$	1,013.0		100.0	%

The Company has substantial holdings of corporate securities in 2011 that take advantage of various investment opportunities in this asset class. As of June 30, 2011 and December 31, 2010, 35.1% and 31.8% of its corporate securities were floating rate securities. Security holdings by sector in this asset class as of June 30, 2011 and December 31, 2010 are as follows:

	June 30, 2011					December 31, 2010
	Fair Value		% of Total			Fair Value			% of Total
	($ in Millions)					($ in Millions)
Corporate Securities
Financial Institutions	$	529.1		75.0	%		$	486.1		68.6	%
Industrials		121.0		17.2	%			161.5		22.8	%
Utilities/Other		55.2		7.8	%			61.4		8.6	%
Total Corporate Securities	$	705.3		100.0	%		$	709.0		100.0	%

The Company’s 10 largest corporate holdings as of June 30, 2011 as carried at fair value and as a percentage of all fixed income securities are as follows:

	Fair Value		% of Holdings Based on Fair Value of All Fixed Income Securities
	($ in Millions)
Morgan Stanley FLT, Due 10/18/2016 (1)	$	36.8		1.9	%
Citigroup Inc. FLT, Due 6/9/2016 (1)		24.8		1.3	%
Barclays Bank PLC FLT Due 2/24/2020		20.2		1.1	%
Merrill Lynch FLT, Due 6/5/2012 (1)		20.0		1.0	%
Bear Stearns FLT Due 11/21/2016 (1)		19.1		1.0	%
HSBC Finance FLT, Due 6/1/2016 (1)		19.0		1.0	%
SLM Corp FLT, Due 1/27/2014 (1)		19.0		1.0	%
JPMorgan Chase FLT, Due 6/13/2016 (1)		18.7		1.0	%
PartnerRe Finance LLC Due 6/1/2020		15.1		0.8	%
GE Capital Corp FLT, Due 3/20/2014 (1)		14.7		0.8	%
Total	$	207.4		10.9	%

(1)

Securities with the notation FLT are floating rate securities.

The Company holds no asset-backed securities.

Given the Company’s status as a Bermuda domiciled entity with limited U.S. Federal tax exposure, to the extent that the Company invests in fixed maturity securities issued by U.S. state and local governments, these investments are made on the merits of the underlying investment and not on the tax-exempt status of those securities under U.S. Federal tax law. As a result, as of June 30, 2011 and December 31, 2010, municipal securities only composed 2.3% and 2.4% of the Company’s fixed maturity portfolio, respectively.

We also own, as a result of our acquisition of Maiden LF, a limited amount of non-U.S. sovereign government debt, of which 87.4% and 90.2% is rated AAA as of June 30, 2011 and December 31, 2010, respectively. The three largest non-U.S. sovereign government issuers are:

	June 30, 2011					December 31, 2010
	Fair value		% of Total			Fair value		% of Total
	($ in Millions)					($ in Millions)
Germany	$	10.1		62.6	%	$	11.6		73.0	%
Netherlands		2.4		15.1	%		1.5		9.6	%
Belgium		2.0		12.6	%		1.5		9.5	%

As of December 31, 2010, 0.3% of these securities consist of non-U.S. government obligations of Ireland which were subsequently disposed of in the second quarter of 2011. We do not have any non-U.S. government and government related obligations of Italy, Greece, Portugal and Spain as of June 30, 2011 and December 31, 2010.

Financial Strength Ratings

Financial strength ratings represent the opinions of rating agencies on our capacity to meet our obligations. Some of our reinsurance treaties contain special funding and termination clauses that are triggered in the event that we or one of our subsidiaries is downgraded by one of the major rating agencies to levels specified in the treaties, or our capital is significantly reduced. If such an event were to happen, we would be required, in certain instances, to post collateral in the form of letters of credit and/or trust accounts against existing outstanding losses, if any, related to the treaty. In a limited number of instances, the subject treaties could be cancelled retroactively or commuted by the cedant and might affect our ability to write business. Our principal operating subsidiaries are rated “A-” (Excellent) with a stable outlook by A.M. Best Company (“A.M. Best”), which rating is the fourth highest of 16 rating levels, and BBB+ (Good) with a stable outlook by Standard & Poor’s, which is the sixth highest of 21 rating levels.

Other Material Changes in Financial Position

The following summarizes other material changes in the financial position of the Company as of June 30, 2011 and December 31, 2010.

	June 30, 2011			December 31, 2010
	($ in Millions)
Reinsurance balances receivable, net	$	379.8		$	226.3
Prepaid reinsurance premiums		37.6			29.0
Deferred commission and other acquisition costs		245.4			203.6
Reserve for loss and loss adjustment expenses		(1,279.7	)		(1,226.8	)
Unearned premiums		(841.0	)		(657.6	)

In general, the increases in these balances reflect the continued growth of the Company, in particular growth in the business of the Diversified Reinsurance segment as a result of both the IIS Acquisition and that segment’s U.S. business, along with continuing growth in the AmTrust segment, including the addition of the European Hospital Liability Quota Share.

Capital Resources

Capital resources consist of funds deployed or available to be deployed in support of our business operations. Our total capital resources at June 30, 2011 and December 31, 2010 were as follows:

	June 30, 2011			December 31, 2010
	($ in Millions)
Junior Subordinated Debt	$	215.2		$	215.2
Senior Notes		107.5			—
Maiden shareholders’ equity		759.3			750.2
Total capital resources	$	1,082.0		$	965.4

Ratio of debt to total capitalization		29.8	%		22.3	%

The increase in the ratio of debt to total capitalization is temporary as of June 30, 2011, as a result of differences in timing between the closing of the Senior Notes Offering on June 24, 2011 and the repurchase of $107.5 million in junior subordinated debt, which occurred on July 15, 2011. Total capitalization as of June 30, 2011 is temporarily increased by $89.0 million, which represents the amount of junior subordinated debentures (net of accelerated amortization of discount) which were repurchased on July 15, 2011. Adjusting for this temporary difference, the normalized ratio of debt to total capitalization as of June 30, 2011 is 23.5%.

As of June 30, 2011, our shareholders’ equity was $759.3 million, a 1.2% increase compared to $750.2 million as of December 31, 2010. The increase was due primarily to unrealized gains on investments of $21.6 million, gains on cumulative translation adjustment from foreign currencies of $1.9 million offset by dividends declared of $10.1 million and the net loss for the six months ended June 30, 2011 of $5.0 million.

On June 24, 2011, the Company completed an offering of $107.5 million aggregate principal amount of 8.25% Senior Notes due June 15, 2041, including $7.5 million aggregate principal amount of Senior Notes to be issued and sold by the Company pursuant to the underwriters’ exercise in part of their over-allotment option. The Senior Notes are redeemable for cash, in whole or in part, on or after June 15, 2016, at 100% of the principal amount of the Senior Notes to be redeemed plus accrued and unpaid interest to but excluding the redemption date.

The net proceeds from the Senior Notes Offering were approximately $104.7 million, after deducting the underwriting discount and estimated offering expenses. With the underwriters’ exercise part of a portion of their over-allotment option, the Company repurchased $107.5 million aggregate liquidation amount of TRUPS Offering on July 15, 2011. Pursuant to the terms of the TRUPS Offering, in the three and six months ended June 30, 2011, the Company incurred a non-recurring call premium charge of approximately $15.1 million. The Company has also incurred an additional non-recurring non-cash charge of $20.3 million, which represents the accelerated amortization of original issue discount and issuance costs associated with equity issued along with the TRUPS Offering. These charges have decreased the shareholder’s equity as of June 30, 2011 by $35.4 million. Our shareholder’s equity is expected to increase in the future from interest expense savings that will result from this offering.

On January 20, 2009, as part of the TRUPS Offering, the Company established a special purpose trust for the purpose of issuing trust preferred securities. This involved 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”) and 45 common shares, $.01 par value, of the Company for a purchase price of $1,000.45 per Unit.

As part of the transaction, the Company issued 11,700,000 common shares to the purchasers of the Trust Preferred Securities. The Trust Preferred Securities mature in 2039 and carry an interest rate of 14% and an effective rate of interest of 16.95%. The proceeds from such issuances, together with the proceeds of the related issuances of common securities of the trusts, were invested by the trusts in subordinated debentures issued by the Company. The gross proceeds to the Company were approximately $260.1 million in the form of junior subordinated debt, before approximately $4.3 million of placement agent fees and expenses.

Under the terms of the TRUPS Offering, the Company can repay the principal balance in full or in part at any time. However, if the Company repays such principal within five years of the date of issuance, it is required to pay an additional amount equal to one full year of interest on the amount of Trust Preferred Securities repaid. If the remaining amount of the Trust Preferred Securities were repaid within five years of the date of issuance (adjusted for the $107.5 million repurchase of Junior Subordinated Debt, which occurred on July 15, 2011), the additional amount due would be $21.4 million, which would be a reduction in earnings.

Further, the value of the common shares issued to purchasers of the Trust Preferred Securities are being carried as a reduction of the liability for the Trust Preferred Securities with the value being amortized against the Company’s earnings over the 30-year term of the Trust Preferred Securities. At June 30, 2011, the unamortized amount carried as a reduction of the Company’s liability for the Trust Preferred Securities (adjusted for the $107.5 million repurchase of Junior Subordinated Debt, which occurred on July 15, 2011) was $26.3 million. If the Company were to repay the Trust Preferred Securities in full or in part at any time prior to their maturity date, the Company would have to recognize a commensurate amount as a reduction of earnings at that time.

The Company expects to continue to evaluate additional opportunities to refinance the TRUPS Offering securities at lower, more cost-effective interest rate levels. To the extent that such refinancing does occur prior to January 20, 2014, the Company may incur additional interest penalties pursuant to the terms of the TRUPS Offering. The Company’s objective would be to generate recurring interest expense savings that would match or exceed the cost of any such interest penalty. However, it is possible this may not occur depending on market conditions and other factors beyond the Company’s control.

In addition, to the extent that any or all of the remaining TRUPS Offering securities are refinanced at any time until ultimate maturity, the Company would incur additional non-recurring non-cash charges against its shareholders equity, which represent the accelerated amortization of original issue discount and issuance costs associated with equity issued along with the TRUPS Offering.

Currency and Foreign Exchange

We conduct business in a variety of non-U.S. currencies, the principal ones being the Euro, the British pound, the Canadian dollar, the Swedish krona, Australian dollar and the Russian ruble. Our reporting currency is the U.S. dollar, and exchange rate fluctuations relative to the U.S. dollar may materially impact our results and financial position.

The Company also has exposure to foreign currency risk due to both its ownership of its German, Swedish and United Kingdom subsidiaries and divisions, whose functional currencies are the Euro and the British pound sterling, and to collection of premiums and paying claims and other operating expenses in currencies other than the U.S. dollar and holding certain net assets in such currencies. The Company's most significant foreign currency exposures are to the Euro and the British pound.

We measure monetary assets and liabilities denominated in foreign currencies at year end exchange rates, with the resulting foreign exchange gains and losses recognized in the Consolidated Statements of Income. Revenues and expenses in foreign currencies are converted at average exchange rates during the periods reported.

For the translation of the Company's subsidiaries' and divisions’ financial statements whose functional currency is other than the U.S. dollar, assets and liabilities are converted into U.S. dollars using the rates of exchange in effect at the balance sheet dates, and revenues and expenses are converted using the average foreign exchange rates for the period. The effect of translation adjustments are included in the foreign currency translation adjustment, which is a separate component of accumulated other comprehensive income in shareholders' equity.

The foreign currency translation adjustment increased by $0.5 million during the three months ended June 30, 2011, due to both the Company's net asset exposure to currencies other than the U.S. dollar and the impact of foreign exchange fluctuations. The following table provides a reconciliation of the foreign currency translation adjustment for the periods ended June 30, 2011 and December 31, 2010:

	June 30, 2011			December 31, 2010
	($ in Millions)
Foreign currency translation adjustment at beginning of period	$	(0.4	)	$	—
Change in foreign currency translation adjustment included in accumulated other comprehensive income		1.9			(0.4	)
Foreign currency translation adjustment at end of period	$	1.5		$	(0.4	)

Net foreign exchange gains totaled $0.9 million during the three months ended June 30, 2011 compared to losses of $0.4 million during the same period in 2010 and were reflected in our Consolidated Statements of Income. The gains in 2011 reflect the continuing weakness in the U.S. dollar against both the Euro and British pound.

Effects of Inflation

The effects of inflation are considered implicitly in pricing and estimating reserves for unpaid losses and loss expenses. The effects of inflation could cause the severity of claims to rise in the future. To the extent inflation causes these costs, particularly medical treatments and litigation costs, to increase above reserves established for these claims, the Company will be required to increase the reserve for losses and loss expenses with a corresponding reduction in its earnings in the period in which the deficiency is identified. The actual effects of inflation on the results of operations of the Company cannot be accurately known until claims are ultimately settled.

Off-Balance Sheet Arrangements

As of June 30, 2011, we did not have any off-balance sheet arrangements as defined by Item 303(a)(4)(ii) of Regulation S-K.

Recent Accounting Pronouncements

See Item 1, Note 2 to the Consolidated Financial Statements for a discussion on recently issued accounting pronouncements not yet adopted.

Item 3. Quantitative and Qualitative Disclosures About 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 June 30, 2011, we had fixed maturity securities with a fair value of $1.9 billion that are subject to interest rate risk.

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 June 30, 2011 to 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 June 30, 2011.

Hypothetical Change in Interest Rates	Fair Value		Estimated Change in Fair Value			Hypothetical Percentage Increase (Decrease) in Shareholders’ Equity
	($ in Millions)
200 basis point increase	$	1,743.8	$	(156.8	)		(20.7	)%
100 basis point increase		1,818.7		(81.9	)		(10.8	)%
No change		1,900.6		—			—	%
100 basis point decrease		1,982.8		82.2			10.8	%
200 basis point decrease		2,072.8		172.2			22.7	%

The interest rate sensitivity on the $168.0 million loan to related party carries an interest rate of one month LIBOR plus 90 basis points. A fluctuation of 100 and 200 basis points in LIBOR would increase or decrease our earnings and cash flows by $1.7 million and $3.4 million, respectively, on an annual basis, depending on the direction of the change in LIBOR, but would not increase or decrease the carrying value of the loan.

Counterparty Credit Risk

The concentrations of the Company's counterparty credit risk exposures as of June 30, 2011 have not changed materially compared to December 31, 2010.

The Company has exposure to credit risk primarily as a holder of fixed income securities. The Company controls this exposure by emphasizing investment grade credit quality in the fixed income securities it purchases. At June 30, 2011, 62.0% of the Company's fixed income portfolio was rated AAA (or equivalent rating), 22.8% was rated A- or better and only 1.2% of the Company's fixed income portfolio was rated below investment grade. The Company believes this high quality concentration reduces its exposure to credit risk on fixed income investments to an acceptable level. At June 30, 2011, the Company is not exposed to any significant credit concentration risk on its investments, excluding securities issued by the U.S. governments which are rated AAA (see Investments in Item 2 of Part I of this Form 10-Q), with the single largest corporate issuer and the top 10 corporate issuers accounting for only 1.9% and 10.9% of the Company's total fixed income securities, respectively.

The Company is subject to the credit risk of its cedants in the event of their insolvency or their failure to honor the value of the funds held balances due to the Company for any other reason. However, the Company's credit risk in some jurisdictions is mitigated by a mandatory right of offset of amounts payable by the Company to a cedant against amounts due to the Company. In certain other jurisdictions the Company is able to mitigate this risk, depending on the nature of the funds held arrangements, to the extent that the Company has the contractual ability to offset any shortfall in the payment of the funds held balances with amounts owed by the Company to cedants for losses payable and other amounts contractually due. Funds held balances for which the Company receives an investment return based upon either the results of a pool of assets held by the cedant or the investment return earned by the cedant on its investment portfolio are exposed to an additional layer of credit risk.

The IIS Funds Withheld account due to the Company is related to one cedant, GMAC IICL, whereby GMAC IICL and the Company entered into the IICL Agreement to assume business written by GMAC IICL. Under the IICL Agreement, the individual balances by cedant which comprise the IIS Funds Withheld account will transfer to the Company upon novation of the underlying reinsurance contract from GMAC IICL to the Company, which is expected to occur during 2011 pursuant to the terms of the IICL Agreement. At June 30, 2011, the IIS Funds Withheld account due from GMAC IICL was $145.3 million, including $102.9 million in segregated investment portfolios which represents collateral pledged to various cedants required by the underlying reinsurance contracts. The investments underlying the IIS Funds Withheld account are maintained in separate investment portfolios by GMAC IICL and managed by the Company.

The Company is subject to the credit risk of this cedant in the event of insolvency or GMAC IICL’s failure to honor the value of the funds held balances for any other reason. However, the Company's credit risk is partially mitigated by the fact that the Company generally has the right to offset any shortfall in the payment of the funds held balances with amounts owed by the Company to the cedant for losses payable and other amounts contractually due.

The Company has exposure to credit risk as it relates to its business written through brokers if any of the Company's brokers is unable to fulfill their contractual obligations with respect to payments to the Company. In addition, in some jurisdictions, if the broker fails to make payments to the insured under the Company's policy, the Company might remain liable to the insured for the deficiency. The Company's exposure to such credit risk is somewhat mitigated in certain jurisdictions by contractual terms. See Business and Risk Factors in Item1 and 1A of Part I of the Company’s Form 10-K, filed on March 14, 2011, respectively, for detailed information on three brokers that accounted for approximately 56.3% of the Company's gross premiums written through brokers in the Diversified Reinsurance segment for the year ended December 31, 2010.

The Company has exposure to credit risk as it relates to its reinsurance balances receivable and reinsurance recoverable on paid and unpaid losses. 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 Bermuda, and to reimburse Maiden Bermuda for any assets or other collateral of Maiden that AmTrust’s U.S. insurance company subsidiaries apply or retain, and income on those assets. Reinsurance balances receivable from the Company's clients at June 30, 2011 were $379.8 million, including balances both currently due and accrued.

The Company believes that credit risk related to these balances is mitigated by several factors, including but not limited to, credit checks performed as part of the underwriting process and monitoring of aged receivable balances. In addition, as the vast majority of its reinsurance agreements permit the Company the right to offset reinsurance balances receivable from clients against losses payable to them, the Company believes that the credit risk in this area is substantially reduced. Provisions are made for amounts considered potentially uncollectible. There was no allowance for uncollectible reinsurance balances receivable at June 30, 2011.

The Company purchases limited amounts of retrocessional reinsurance and requires its reinsurers to have adequate financial strength. The Company evaluates the financial condition of its reinsurers and monitors its concentration of credit risk on an ongoing basis. Provisions are made for amounts considered potentially uncollectible. The balance of reinsurance recoverable on unpaid losses was $15.6 million at June 30, 2011. At June 30, 2011, $10.7 million of the reinsurance recoverable on unpaid losses was due from Motors and the remaining amount was due from reinsurers with an A- or better rating from A.M. Best or state pools.

Foreign Currency Risk

Through its international reinsurance operations, the Company conducts business in a variety of non-U.S. currencies, with the principal exposures being the Euro and British pound. As the Company's reporting currency is the U.S. dollar, foreign exchange rate fluctuations may materially impact the Company's Consolidated Financial Statements.

The Company is generally able to match its liability funds against its net reinsurance liabilities both by currency and duration to protect the Company against foreign exchange and interest rate risks. However, a natural offset does not exist for all currencies.

We may employ various strategies to manage our exposure to foreign currency exchange risk. To the extent that these exposures are not fully hedged or the hedges are ineffective, our results of operations or equity may be reduced by fluctuations in foreign currency exchange rates and could materially adversely affect our financial condition and results of operations. At June 30, 2011, no hedging instruments have been entered into.

Our principal exposure is to the Euro and British pound, however assuming all other variables remain constant and disregarding any tax effects, a change in the U.S. dollar exchange rate of 10% or 20% relative to the non-U.S. currencies held by the Company would result in a change in the Company’s net assets of $16.1 million and $32.2 million, respectively.

Item 4. Controls and Procedures

Our management, with the participation and under the supervision of our principal executive officer and principal financial officer, has evaluated the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) and has concluded that, as of the end of the period covered by this report, such disclosure controls and procedures were effective. During the most recent fiscal quarter, there were no changes in the Company’s internal controls over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

In April 2009, we learned that Bentzion S. Turin, the former Chief Operating Officer, General Counsel and Secretary of Maiden Holdings and Maiden Bermuda, sent a letter to the U.S. Department of Labor claiming that his employment with us was terminated in retaliation for corporate whistle blowing in violation of the whistle blower protection provisions of the Sarbanes-Oxley Act of 2002. Mr. Turin alleged concerns regarding corporate governance with respect to negotiation of the terms of the TRUPS Offering and seeks reinstatement as Chief Operating Officer, General Counsel and Secretary of Maiden Holdings and Maiden Bermuda, back pay and legal fees incurred. We believe that we had ample reason for terminating such employment for good and sufficient legal cause, and we believe that the claim is without merit and are vigorously defending this claim. On December 31, 2009, the U.S. Secretary of Labor found no reasonable cause for Mr. Turin’s claim and dismissed the complaint in its entirety. Mr. Turin objected to the Secretary’s findings and requested a hearing before an administrative law judge in the U.S. Department of Labor. We moved to dismiss Mr. Turin’s complaint, and our motion was granted by the Administrative Law Judge on June 30, 2011. On July 13, 2011, Mr. Turin filed a petition for review of the Administrative Law Judge’s decision with the Administrative Review Board in the U.S. Department of Labor. We will be filing our brief in opposition to the petition for review in the near future.

Item 1A. Risk Factors

The following risk factor disclosed in our Annual Report on Form 10-K for the year ended December 31, 2010 has been amended to reflect our receipt of tax assurance from the Bermuda Minister of Finance that we might become subject to tax in Bermuda in 2035 (instead of 2016 as previously reported in the risk factor).

We may become subject to taxes in Bermuda after 2035, which may have a material adverse effect on our financial condition and operating results and on an investment in our shares.

The Bermuda Minister of Finance, under the Exempted Undertakings Tax Protection Act 1966, as amended, of Bermuda, has given each of Maiden Holdings and Maiden Bermuda an assurance that if any legislation is enacted in Bermuda that would impose tax computed on profits or income, or computed on any capital asset, gain or appreciation, or any tax in the nature of estate duty or inheritance tax, then the imposition of any such tax will not be applicable to Maiden Holdings, Maiden Bermuda or any of their respective operations or their respective shares, debentures or other obligations (except insofar as such tax applies to persons ordinarily resident in Bermuda or to any taxes payable by them in respect of real property or leasehold interests in Bermuda held by them) until March 31, 2035. Given the limited duration of the Minister of Finance’s expected assurance, we cannot be certain that we will not be subject to any Bermuda tax after March 31, 2035. Since Maiden Holdings and Maiden Bermuda are incorporated in Bermuda, we will be subject to changes of law or regulation in Bermuda that may have an adverse impact on our operations, including imposition of tax liability.

Item 5. Other Information

As reported on our Schedule 14A filed with the SEC on March 31, 2011, the Compensation Committee of the Board of Directors approved the formation of a long term incentive program under our Amended and Restated 2007 Share Incentive Plan (the "Plan") with the assistance of our compensation consultant on March 1, 2011. On that date, the Committee determined to award performance-based restricted share units ("PB-RSUs") to five of our named executive officers, John Marshaleck, Karen Schmitt, Patrick J. Haveron, Ronald M. Judd and Lawrence F. Metz, as well as eight other senior Company employees, subject to the amendment of the Plan to expressly permit restricted share units, adoption of a form of restricted share unit agreement and acceptance of the terms of the agreement by the intended grantees. The formula for determining the amount of PB-RSUs awarded uses a combination of a percentage of the employee's base salary (based on a benchmarking analysis from our compensation consultant) divided by the closing price on Nasdaq of our common shares on that date (i.e. 65% Mr. Marshaleck's salary, or $390,000, divided by the closing price on March 1, 2011 of $7.97, equals a grant of 48,934 PB-RSUs). This initial grant of PB-RSUs fully vests on March 1, 2013.

To effect the grants of the PB-RSUs, the Committee amended the Plan to allow for the grant of restricted share units and approved the terms of a form of restricted share unit agreement, which amendment and form of agreement were approved by the Committee on July 26, 2011 and are attached as Exhibits 10.1 and 10.2 to this Quarterly Report. The performance-based restricted share unit agreements contain restrictive non-compete and non-solicitation covenants [and other material terms], which required agreement and execution by the grantees of the PB-RSUs to become effective. As a result, the PB-RSU grants were effected in August 2011.

Item 6. Exhibits.

Exhibit
Number		Description

10.1		Amended and Restated Maiden Holdings, Ltd. 2007 Share Incentive Plan as of July 26, 2011

10.2		Form of Performance-Based Restricted Share Unit Agreement for Employee Recipients of Restricted Share Units under the Amended and Restated 2007 Share Incentive Plan

10.3		Endorsement No. 1 to the Amended and Restated Quota Share Reinsurance Agreement by and between Maiden Insurance Company Ltd. and AmTrust International Insurance, Ltd. dated as of July 26, 2011

10.4		Quota Share Reinsurance Contract by and between Maiden Insurance Company Ltd. and AmTrust Europe Limited and/or AmTrust International Underwriters Limited dated as of April 1, 2011

10.5		Endorsement No. 1 to the Quota Share Reinsurance Contract by and between Maiden Insurance Company Ltd. and AmTrust Europe Limited and/or AmTrust International Underwriters Limited dated as of July 26, 2011

10.6		First Amendment to Amended and Restated Declaration of Trust, dated as of July 14, 2011, by and among Maiden Holdings North America, Ltd., Arturo M. Raschbaum, John M. Marshaleck and Karen L. Schmitt, as all of the Administrators , and Wilmington Trust Company, as Institutional Trustee and Delaware Trustee

31.1		Certification of the Chief Executive Officer, pursuant to Rule 13a-14(a) or 15d-14(a), for the quarter ended June 30, 2011.

31.2		Certification of the Chief Financial Officer, pursuant to Rule 13a-14(a) or 15d-14(a), for the quarter ended June 30, 2011.

32.1		Certification of the Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, for the quarter ended June 30, 2011.

32.2		Certification of the Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, for the quarter ended June 30, 2011.

101		The following materials from Maiden Holdings, Ltd. Quarterly Report on Form 10-Q, formatted in XBRL (eXtensive Business Reporting Language): (i) the unaudited Condensed Balance Sheets, (ii) the unaudited Condensed Consolidated Statements of Income, (iii) the unaudited Condensed Consolidated Statements of Comprehensive Income, (iv) the unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity, (v) the unaudited Condensed Consolidated Statements of Cash Flows, and (vi) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text.**

** Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

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: August 8, 2011	/s/ ARTURO M. RASCHBAUM
	Arturo M. Raschbaum
	President and Chief Executive Officer
	(Principal Executive Officer)

	/s/ JOHN M. MARSHALECK
	John M. Marshaleck
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

AMENDED AND RESTATED

MAIDEN HOLDINGS, LTD. 2007 SHARE INCENTIVE PLAN

1. Preamble.

Maiden Holdings, Ltd., a Bermuda company, hereby establishes the Maiden Holdings, Ltd. 2007 Share Incentive Plan as a means whereby the Company may, through awards of (i) incentive share options, (ii) non-qualified share options and (iii) restricted shares:

(a)

provide selected officers, directors, employees and consultants with additional incentive to promote the success of the Company’s business;

(b)

encourage such persons to remain in the service of the Company; and

(c)

enable such persons to acquire proprietary interests in the Company.

2. Definitions and Rules of Construction.

2.01 “Award” means the grant of Options, Restricted Shares and/or Restricted Share Units to a Participant.

2.02 “Award Date” means the date upon which an Option, Restricted Share of Restricted Share Unit is awarded to a Participant under the Plan.

2.03 “Board” or “Board of Directors” means the board of directors of the Company.

2.04 “Cause” shall mean any willful misconduct by the Participant which affects the business reputation of the Company or willful failure by the Participant to perform his or her material responsibilities to the Company (including, without limitation, breach by the Participant of any provision of any employment, consulting, advisory, nondisclosure, non-competition or other similar agreement between the Participant and the Company or any Subsidiary). The Participant shall be considered to have been discharged for “Cause” if the Company determines, within 30 days after the Participant’s resignation, that discharge for Cause was warranted.

2.05 “Change of Control” shall be deemed to have occurred on the first to occur of any of the following:

(i)

any “person” (as such term is used in Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934), other than any Subsidiary or any employee benefit plan of the Company or a Subsidiary or former Subsidiary, is or becomes a beneficial owner, directly or indirectly, of shares of the Company representing 25% or more of the total voting power of the Company’s then outstanding shares;

(ii)

a tender offer (for which a filing has been made with the SEC which purports to comply with the requirements of Section 14(d) of the Securities Exchange Act of 1934 and the corresponding SEC rules) is made for the shares of the Company. In case of a tender offer described in this paragraph (ii), the “Change of Control” will be deemed to have occurred upon the first to occur of (A) any time during the offer when the person (using the definition in (i) above) making the offer owns or has accepted for payment shares of the Company with 25% or more of the total voting power of the Company’s outstanding shares or (B) three business days before the offer is to terminate unless the offer is withdrawn first, if the person making the offer could own, by the terms of the offer plus any shares owned by this person, shares with 50% or more of the total voting power of the Company’s outstanding shares when the offer terminates; or

(iii)

individuals who were the Board’s nominees for election as directors of the Company immediately prior to a meeting of the shareholders of the Company involving a contest for the election of directors shall not constitute a majority of the Board following the election.

2.06 “Code” means the United States Internal Revenue Code of 1986, as amended from time to time, or any successor thereto.

2.07 “Committee” means two or more directors elected by the Board of Directors from time to time; provided, however, that in the absence of an election by the Board, the Committee shall mean the Compensation Committee of the Board of Directors, or if there is no such Committee, then the Board of Directors.

2.08 "Company” means Maiden Holdings, Ltd., a Bermuda company, and any successor thereto.

2.09 “Exchange Act” shall mean the United States Securities Exchange Act of 1934, as it exists now or from time to time may hereafter be amended.

2.10 “Fair Market Value” shall be as determined in good faith by the Committee or the Board until such time as the Ordinary Shares are quoted or listed on the NASDAQ Stock Market System or a national securities exchange. Thereafter, Fair Market Value shall be the closing sale price on such market for the Ordinary Shares on the date of the Award.

2.11 “Good Reason” shall mean any of the following:

(i)

any significant diminution in the Participant’s title, authority, or responsibilities from and after a Change of Control;

(ii)

any reduction in the base compensation payable to the Participant from and after a Change of Control; or

(iii)

the relocation after a Change of Control of the Company’s place of business at which the Participant is principally located to a location that is greater than 50 miles from the site immediately prior to the Change of Control.

2.12 “ISO” means an incentive share option which is intended to qualify as an incentive stock option within the meaning of section 422 of the Code.

2.13 “NSO” means a non-qualified share option, which is not intended to qualify as an incentive stock option under section 422 of the Code.

2.14 “Option” means the right of a Participant, whether granted as an ISO or an NSO, to purchase a specified number of Ordinary Shares, subject to the terms and conditions of the Plan.

2.15 “Option Price” means the price per Ordinary Share at which an Option may be exercised.

2.16 "Ordinary Shares" means the $0.01 par value ordinary shares of the Company.

2.17 “Participant” means an individual to whom an Award has been granted under the Plan.

2.18 “Plan” means the Maiden Holdings, Ltd. 2007 Share Incentive Plan, as set forth herein and from time to time amended.

2.19 “Restricted Shares” means the Ordinary Shares awarded to a Participant pursuant to Section 8 of this Plan.

2.20 “Restricted Share Unit” means a right, granted under the Plan, to receive Stock, cash or other Awards or a combination thereof at the end of a specified period.

2.21 “Subsidiary” means any entity during any period which the Company owns or controls more than 50% of (i) the outstanding capital shares, or (ii) the combined voting power of all classes of shares.

2.22 Rules of Construction:

2.22.1 Governing Law and Venue. The construction and operation of this Plan are governed by the laws of Bermuda without regard to any conflicts or choice of law rules or principles that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.

2.21.2 Undefined Terms. Unless the context requires another meaning, any term not specifically defined in this Plan is used in the sense given to it by the Code.

2.22.3 Headings. All headings in this Plan are for reference only and are not to be utilized in construing the Plan.

2.22.4 Conformity with Section 422. Any ISOs issued under this Plan are intended to qualify as incentive stock options described in section 422 of the Code, and all provisions of the Plan relating to ISOs shall be construed in conformity with this intention. Any NSOs issued under this Plan are not intended to qualify as incentive stock options described in section 422 of the Code, and all provisions of the Plan relating to NSOs shall be construed in conformity with this intention.

2.22.5 Gender. Unless clearly inappropriate, all nouns of whatever gender refer indifferently to persons or objects of any gender.

2.22.6 Singular and Plural. Unless clearly inappropriate, singular terms refer also to the plural and vice versa.

2.22.7 Severability. If any provision of this Plan is determined to be illegal or invalid for any reason, the remaining provisions are to continue in full force and effect and to be construed and enforced as if the illegal or invalid provision did not exist, unless the continuance of the Plan in such circumstances is not consistent with its purposes.

3. Shares Subject to the Plan.

Subject to adjustment as provided in Section 11 hereof, the aggregate number of Ordinary Shares for which Awards may be issued under this Plan may not exceed 10,000,000 shares, of which only 2,500,000 shares may be issued as Restricted Share Awards or Restricted Share Units. Reserved shares shall be authorized but unissued shares. If any Award shall terminate or expire, as to any number of Ordinary Shares, new Awards may thereafter be awarded with respect to such shares. Notwithstanding the foregoing, the total number of Ordinary Shares with respect to which Awards may be granted to any Participant in any calendar year shall not exceed 1,000,000 shares (subject to adjustment as provided in Section 11 hereof).

4. Administration.

The Committee shall administer the Plan. All determinations of the Committee are made by a majority vote of its members. The Committee’s determinations are final and binding on all Participants. In addition to any other powers set forth in this Plan, the Committee has the following powers:

(a)

to construe and interpret the Plan;

(b)

to establish, amend and rescind appropriate rules and regulations relating to the Plan;

(c)

subject to the terms of the Plan, to select the individuals who will receive Awards, the times when they will receive them, the number of Options, Restricted Shares and Restricted Share Units to be subject to each Award, the Option Price, the vesting schedule (including any performance targets to be achieved in connection with the vesting of any Award), the expiration date applicable to each Award and other terms, provisions and restrictions of the Awards (which need not be identical) and subject to Section 16 hereof, to amend or modify any of the terms of outstanding Awards;

(d)

to contest on behalf of the Company or Participants, at the expense of the Company, any ruling or decision on any matter relating to the Plan or to any Awards;

(e)

generally, to administer the Plan, and to take all such steps and make all such determinations in connection with the Plan and the Awards granted thereunder as it may deem necessary or advisable; and

(f)

to determine the form in which tax withholding under Section 14 of this Plan will be made ( i.e. , cash, Ordinary Shares or a combination thereof).

Except to the extent prohibited by applicable law or the applicable rules of a stock exchange, the Committee may allocate all or any portion of its responsibilities and powers to any one or more of its members and may delegate all or any part of its responsibilities and powers to any person or persons selected by it. Any such allocation or delegation may be revoked by the Committee at any time.

5. Eligible Participants.

Present and future directors, officers, employees and consultants of the Company or any Subsidiary shall be eligible to participate in the Plan. The Committee from time to time shall select those officers, directors and employees of the Company and any Subsidiary of the Company who shall be designated as Participants and shall designate in accordance with the terms of the Plan the number, if any, of ISOs, NSOs, Restricted Shares and Restricted Share Units or any combination thereof, to be awarded to each Participant.

6. Terms and Conditions of Non-Qualified Share Options.

Subject to the terms of the Plan, the Committee, in its discretion, may award an NSO to any Participant. Each NSO shall be evidenced by an agreement, in such form as is approved by the Committee, and except as otherwise provided by the Committee in such agreement, each NSO shall be subject to the following express terms and conditions, and to such other terms and conditions, not inconsistent with the Plan, as the Committee may deem appropriate:

6.01 Option Period. Each NSO will expire as of the earliest of:

(i)

the date on which it is forfeited under the provisions of Section 10.1;

(ii)

10 years from the Award Date;

(iii)

in the case of a Participant who is an employee of the Company or a Subsidiary, three months after the Participant’s termination of employment with the Company and its Subsidiaries for any reason other than for Cause or death or total and permanent disability;

(iv)

in the case of a Participant who is a member of the board of directors of the Company or a Subsidiary, but not an employee of the Company or a Subsidiary, three months after the Participant’s retirement from such board for any reason other than for Cause or death or total and permanent disability or the sale, merger or consolidation, or similar extraordinary transaction involving the Company or Subsidiary, as the case may be;

(v)

immediately upon the Participant’s termination of employment with the Company and its Subsidiaries or service on the board of directors of the Company or a Subsidiary for Cause;

(vi)

12 months after the Participant’s death or total and permanent disability; or

(vii)

any other date specified by the Committee when the NSO is granted.

6.02 Option Price. The Option Price of any NSO shall be determined by the Committee at the time the NSO is granted, and shall be no less than 100% of the Fair Market Value of the Ordinary Shares subject to the NSO on the Award Date.

6.03 Vesting. Unless otherwise determined by the Committee and set forth in the agreement evidencing an Award, NSO Awards shall vest in accordance with Section 10.1.

6.04 Other Option Provisions. The form of NSO authorized by the Plan may contain such other provisions as the Committee may from time to time determine.

7. Terms and Conditions of Incentive Share Options.

Subject to the terms of the Plan, the Committee, in its discretion, may award an ISO to any employee of the Company or a Subsidiary. Each ISO shall be evidenced by an agreement, in such form as is approved by the Committee, and except as otherwise provided by the Committee, each ISO shall be subject to the following express terms and conditions and to such other terms and conditions, not inconsistent with the Plan, as the Committee may deem appropriate:

7.01 Option Period. Each ISO will expire as of the earliest of:

(i)

the date on which it is forfeited under the provisions of Section 10.1;

(ii)

10 years from the Award Date, except as set forth in Section 7.02 below;

(iii)

immediately upon the Participant’s termination of employment with the Company and its Subsidiaries for Cause;

(iv)

three months after the Participant’s termination of employment with the Company and its Subsidiaries for any reason other than for Cause or death or total and permanent disability;

(v)

12 months after the Participant’s death or total and permanent disability; or

(vi)

any other date (within the limits of the Code) specified by the Committee when the ISO is granted.

Notwithstanding the foregoing provisions granting discretion to the Committee to determine the terms and conditions of ISOs, such terms and conditions shall meet the requirements set forth in section 422 of the Code or any successor thereto.

7.02 Option Price and Expiration. The Option Price of any ISO shall be determined by the Committee at the time an ISO is granted, and shall be no less than 100% of the Fair Market Value of the Ordinary Shares subject to the ISO on the Award Date; provided, however, that if an ISO is granted to a Participant who, immediately before the grant of the ISO, beneficially owns shares representing more than 10% of the total combined voting power of all classes of shares of the Company or its parent or subsidiary corporations, the Option Price shall be at least 110% of the Fair Market Value of the Ordinary Shares subject to the ISO on the Award Date and in such cases, the exercise period specified in the Option agreement shall not exceed five years from the Award Date.

7.03 Vesting. Unless otherwise determined by the Committee and set forth in the agreement evidencing an Award, ISO Awards shall vest in accordance with Section 10.1.

7.04 Other Option Provisions. The form of ISO authorized by the Plan may contain such other provisions as the Committee may, from time to time, determine; provided, however, that such other provisions may not be inconsistent with any requirements imposed on incentive stock options under Code section 422 and the regulations thereunder.

8. Terms and Conditions of Restricted Share Awards and Restricted Share Units.

Subject to the terms of the Plan, the Committee, in its discretion, may award Restricted Shares or Restricted Share Units to any Participant at no additional cost to the Participant. Each Restricted Share Award or Restricted Share Unit shall be evidenced by an agreement, in such form as is approved by the Committee, and all Ordinary Shares awarded to Participants under the Plan as Restricted Shares and all Restricted Shares Units awarded to Participants under the Plan shall be subject to the following express terms and conditions and to such other terms and conditions, not inconsistent with the Plan, as the Committee shall deem appropriate:

(a)

Restricted Period. Restricted Shares and the Ordinary Shares underlying Restricted Share Units awarded under this Section 8 may not be sold, assigned, transferred, pledged or otherwise encumbered before they vest.

(b)

Vesting. Unless otherwise determined by the Committee and set forth in the agreement evidencing an Award, Restricted Share Awards and Restricted Share Units under this Section 8 shall vest in accordance with Section 10.2.

(c)

Certificate Legend. Each certificate issued in respect of Restricted Shares awarded under this Section 8 shall be registered in the name of the Participant and shall bear the following (or a similar) legend until such shares have vested:

“The transferability of this certificate and the shares represented hereby are subject to the terms and conditions (including forfeiture) relating to Restricted Shares contained in Section 8 of the Maiden Holdings, Ltd. 2007 Share Incentive Plan and an Agreement entered into between the registered owner and Maiden Holdings, Ltd. Copies of such Plan and Agreement are on file at the principal office of Maiden Holdings, Ltd.”

(d)

Escrow. Any Restricted Shares issued pursuant to this Section 8 shall be held by the Company in escrow for the benefit of the Participant to whom the Restricted Shares are awarded. Upon vesting, a certificate for the vested shares shall be issued to the participant free of the restrictive legend required by Section 8(c).

9. Manner of Exercise of Options.

To exercise an Option in whole or in part, a Participant (or, after his death, his executor or administrator) must give written notice to the Committee on a form acceptable to the Committee, stating the number of shares with respect to which he intends to exercise the Option. The Company will issue the shares with respect to which the Option is exercised upon payment in full of the Option Price. The Committee may permit the Option Price to be paid in cash or Ordinary Shares held by the Participant having an aggregate Fair Market Value, as determined on the date of delivery, equal to the Option Price. The Committee may also permit the Option Price to be paid by any other method permitted by law, including by delivery to the Committee from the Participant of an election directing the Company to withhold the number of Ordinary Shares from the Ordinary Shares otherwise due upon exercise of the Option having an aggregate Fair Market Value on that date equal to the Option Price. If a Participant pays the Option Price with Ordinary Shares which were received by the Participant upon exercise of one or more ISOs, and such Ordinary Shares have not been held by the Participant for at least the greater of:

(a)

two years from the date the ISOs were granted; or

(b)

one year after the transfer of the Ordinary Shares to the Participant;

the use of the shares shall constitute a disqualifying disposition and the ISO underlying the shares used to pay the Option Price shall no longer satisfy all of the requirements of Code section 422.

To the extent that an Option is not exercised by a Participant when it becomes initially exercisable, it shall not expire but shall be carried forward and shall be exercisable, on a cumulative basis, until the expiration of the exercise period. No partial exercise may be for less than 100 full Ordinary Shares.

Notwithstanding any other term or provision of the Plan, no Option granted hereunder may be exercised and no Award of Restricted Shares or Restricted Share Units shall take effect, in whole or in part, unless at the time that the Option or Award has vested (i) the Ordinary Shares are quoted or listed on the NASDAQ Stock Market System or other national securities exchange, (ii) there has been a sale of in excess of twenty percent (20%) of its outstanding shares of the Company to persons not affiliated with the Company as the date of the adoption of the Plan, or (iii) all or substantially all of the Company’s assets and business have been acquired by another corporation or the Company has been merged or consolidated with another corporation and the Company is not the surviving corporation of such transaction.

10. Vesting.

10.1 Options. A Participant may not exercise an Option until it has become vested. The portion of an Award of Options that is vested depends upon the period that has elapsed since the Award Date. The following schedule applies to any Award of Options under this Plan unless the Committee establishes a different vesting schedule on the Award Date:

Number of Months Since Award Date	Vested Percentage
fewer than 12 months		0.0	%
12 months		25.00	%
15 months		31.25	%
18 months		37.50	%
21 months		43.75	%
24 months		50.00	%
27 months		56.25	%
30 months		62.50	%
33 months		68.75	%
36 months		75.00	%
39 months		81.25	%
42 months		87.50	%
45 months		93.75	%
48 months or more		100.00	%

Notwithstanding the above schedule, unless otherwise determined by the Committee and set forth in the agreement evidencing an Award, a Participant’s Awards shall become fully vested if a Participant’s employment with the Company and its Subsidiaries or service on the board of directors of the Company or a Subsidiary is terminated due to: (i) retirement on or after his sixty-fifth birthday; (ii) retirement on or after his fifty-fifth birthday with consent of the Company; (iii) retirement at any age on account of total and permanent disability as determined by the Company; or (iv) death. Unless the Committee otherwise provides in the applicable agreement evidencing an Award or Section 10.3 applies, if a Participant’s employment with or service to the Company or a Subsidiary terminates for any other reason, any Awards that are not yet vested are immediately and automatically forfeited.

A Participant’s employment shall not be considered to be terminated hereunder by reason of a transfer of his employment from the Company to a Subsidiary, or vice versa, or a leave of absence approved by the Participant’s employer. A Participant’s employment shall be considered to be terminated hereunder if, as a result of a sale or other transaction, the Participant’s employer ceases to be a Subsidiary (and the Participant’s employer is or becomes an entity that is separate from the Company and its Subsidiaries).

10.2 Restricted Shares and Restricted Share Units. The Committee shall establish the vesting schedule to apply to any Award of Restricted Shares or Restricted Share Units that is not associated with an ISO or NSO granted under the Plan to a Participant, and in the absence of such a vesting schedule, such Award shall vest in accordance with Section 10.1.

10.3 Effect of “Change of Control”. Notwithstanding Sections 10.1 and 10.2 above, if within 12 months following a “Change of Control” the employment of a Participant with the Company and its Subsidiaries is terminated, the Board of Directors may vest any Award issued to the Participant, and in the case of an Award other than a Restricted Share Award or Restricted Share Unit Award, such Award shall be fully exercisable for 90 days following the date on which the Participant’s service with the Company and its Subsidiaries is terminated, but not beyond the date the Award would otherwise expire but for the Participant’s termination of employment.

11. Adjustments to Reflect Changes in Capital Structure.

11.01 Adjustments. If there is any change in the corporate structure or shares of the Company, the Committee shall make any appropriate adjustments, including, but limited to, such adjustments deemed necessary to prevent accretion, or to protect against dilution, in the number and kind of Ordinary Shares with respect to which Awards may be granted under this Plan (including the maximum number of Ordinary Shares with respect to which Awards may be granted under this Plan in the aggregate and individually to any Participant during any calendar year as specified in Section 3) and, with respect to outstanding Awards, in the number and kind of shares covered thereby and in the applicable Option Price . For the purpose of this Section 11, a change in the corporate structure or shares of the Company includes, without limitation, any change resulting from a recapitalization, stock split, share dividend, consolidation, rights offering, separation, reorganization, or liquidation (including a partial liquidation) and any transaction in which Ordinary Shares are changed into or exchanged for a different number or kind of shares or other securities of the Company or another corporation.

11.02 Cashouts. In the event of an extraordinary dividend or other distribution, merger, reorganization, consolidation, combination, sale of assets, split up, exchange, or spin off, or other extraordinary corporate transaction, the Committee may, in such manner and to such extent (if any) as it deems appropriate and equitable make provision for a cash payment or for the substitution or exchange of any or all outstanding Awards or the cash, securities or property deliverable to the holder of any or all outstanding Awards based upon the distribution or consideration payable to holders of Ordinary Shares upon or in respect of such event; provided, however, in each case, that with respect to any ISO, no such adjustment may be made that would cause the Plan to violate section 422 of the Code (or any successor provision).

12. Nontransferability of Awards.

ISOs are not transferable, voluntarily or involuntarily, other than by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order as defined by the Code. During a Participant’s lifetime, his ISOs may be exercised only by him. All other Awards (other than an ISO) are transferable by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order as defined in the Code. With the approval of the Committee, a Participant may transfer an Award (other than an ISO) for no consideration to or for the benefit of one or more Family Members of the Participant subject to such limits as the Committee may establish, and the transferee shall remain subject to all the terms and conditions applicable to the Award prior to such transfer. The transfer of an Award pursuant to this Section 12 shall include a transfer of the right set forth in Section 16 hereof to consent to an amendment or revision of the Plan and, in the discretion of the Committee, shall also include transfer of ancillary rights associated with the Award. For purposes of this Section 12, “Family Members” mean with respect to a Participant, any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the Participant’s household (other than a tenant or employee), a trust in which these persons have more than 50% of the beneficial interest, a foundation in which these persons (or the Participant) control the management of assets, and any other entity in which these persons (or the Participant) own more than 50% of the voting interests.

13. Rights as Shareholder.

No Ordinary Shares may be delivered upon the exercise of any Option until full payment has been made. A Participant has no rights whatsoever as a shareholder with respect to any shares covered by an Option until the date of the issuance of a share certificate for the shares.

14. Withholding Tax.

The Committee may, in its discretion and subject to such rules as it may adopt, permit or require a Participant to pay all or a portion of the federal, state and local taxes, including FICA and Medicare withholding tax, arising in connection with any Awards by (i) having the Company withhold Ordinary Shares at the minimum rate legally required, (ii) tendering back Ordinary Shares received in connection with such Award or (iii) delivering other previously acquired Ordinary Shares having a Fair Market Value approximately equal to the amount to be withheld.

15. No Right to Employment.

Participation in the Plan will not give any Participant a right to be retained as an employee or director of the Company or its parent or Subsidiaries, or any right or claim to any benefit under the Plan, unless the right or claim has specifically accrued under the Plan.

16. Amendment of the Plan.

The Board, at any time and from time to time, may modify or amend the Plan in any respect, except that without the approval of the shareholders of the Company, the Board may not (a) materially increase the benefits accruing to Participants, (b) increase the maximum number of shares which may be issued under the Plan (except for permissible adjustments provided in the Plan) or (c) materially modify the requirements as to eligibility for participation in the Plan or exercise of an Option. The termination or any modification or amendment of the Plan shall not, without the consent of the Participant, affect the Participant’s rights under an Award previously granted to him or her. With the consent of the Participant affected, the Board may amend outstanding option agreements in a manner not inconsistent with the Plan. The Board hereby reserves the right to amend or modify the terms and provisions of the Plan and of any outstanding options under the Plan to the extent necessary to qualify any or all options under the Plan for such favorable United States federal income tax treatment (including deferral of taxation upon exercise) as may be afforded ISO’s under Section 422A of the Code or any successor provision of the Code.

17. Conditions Upon Issuance of Shares.

An Option shall not be exercisable and an Ordinary Share shall not be issued pursuant to the exercise of an Option, Restricted Shares shall not be awarded, and Restricted Share Units shall not be awarded and Ordinary Shares shall not be issued pursuant to the Restricted Share Units until and unless the award of Restricted Shares, the award of Restricted Share Units and the issuance and delivery of shares underlying the Restricted Share Units, and the exercise of such Option and the issuance and delivery of such share pursuant thereto shall comply with all relevant provisions of law, including, without limitation, the United States Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated thereunder, and the requirements of any stock exchange or national securities association upon which the Ordinary Shares may then be listed or quoted, and shall be further subject to the approval of counsel for the Company with respect to such compliance.

As a condition to the exercise of an Option, the Company may require the person exercising such Option to represent and warrant at the time of any such exercise that the Ordinary Shares are being purchased only for investment and without any present intention to sell or distribute such shares if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned relevant provisions of law.

18. Substitution or Assumption of Awards by the Company.

The Company, from time to time, also may substitute or assume outstanding awards granted by another company, whether in connection with an acquisition of such other company or otherwise, by either (a) granting an Award under the Plan in substitution of such other company’s award, or (b) assuming such award as if it had been granted under the Plan if the terms of such assumed award could be applied to an Award granted under the Plan. Such substitution or assumption shall be permissible if the holder of the substituted or assumed award would have been eligible to be granted an Award under the Plan if the other company had applied the rules of the Plan to such grant. In the event the Company assumes an award granted by another company, the terms and conditions of such award shall remain unchanged (except that the exercise price and the number and nature of shares issuable upon exercise of any such option will be adjusted appropriately pursuant to section 424(a) of the Code). In the event the Company elects to grant a new Award rather than assuming an existing option, such new Award may be granted with a similarly adjusted exercise price.

19. Effective Date and Termination of Plan.

19.01 Effective Date. This Plan is effective as of the date of its adoption by the Board of Directors, subject to subsequent approval by the Company’s shareholders.

19.02 Termination of the Plan. Unless sooner terminated in accordance with Section 11.02 hereof, the Plan shall terminate upon the earlier of (i) the tenth anniversary of the date of its adoption by the Board or (ii) the date on which all shares available for issuance under the Plan shall have been issued pursuant to the exercise or cancellation of Options granted hereunder, the issuance of Restricted Shares and/or the receipt of Ordinary Shares pursuant to the terms of Restricted Share Units. If the date of termination is determined under (i) above, then Options outstanding on such date shall continue to have force and effect in accordance with the provisions of the instruments evidencing such Options.

MAIDEN HOLDINGS, LTD.

Performance-Based Restricted Share Unit Agreement

This Performance-Based Restricted Share Unit Agreement (this “Agreement”) effective as of [DATE], is between Maiden Holdings, Ltd., a Bermuda company (the “Company”), and [NAME] (the “Participant”).

Grant of Units.

The Company hereby grants to the Participant a target award (the “Target Award”) of an aggregate of [#] Performance-Based Restricted Share Units (“Units”). The Units are notational units of measurement denominated in the Company’s common shares, $.01 par value (“Common Shares”), as set forth in and subject to the terms and conditions herein. These Units have been duly granted by the Compensation Committee of the Board of Directors (the “Committee”) pursuant to the Company’s Amended and Restated 2007 Share Incentive Plan (the “Plan”). This Agreement shall be subject to the terms and conditions of the Plan, which is incorporated herein by reference. Any capitalized terms not defined herein shall have the meaning set forth in the Plan.

Vesting of Units and Provisions for Termination and Change in Control.

(a) At the end of the Performance Period set forth in Exhibit A, provided the Participant remains employed with the Company on the Settlement Date (as defined in Section 3(a) below), a number of Units shall vest equal to the Performance Percentage (defined below) of the Target Award. The “Performance Percentage” shall be the percentage (which can range from 0 to 200%) determined by the Committee, in its sole discretion, based on the achievement of the performance goals through the end of the Performance Period as set forth in Exhibit A (the “Earned Units”).

(b) If after the end of the Performance Period, but prior to the Settlement Date, the Participant dies or the Company terminates the Participant’s employment because the Participant is Disabled (as that term is defined in Exhibit A), the Participant will vest in the number of Units earned for the Performance Period. If prior to the end of the Performance Period, the Participant dies or the Company terminates the Participant’s employment because the Participant is Disabled, the Participant (or a beneficiary thereof) will vest a pro rata portion (based on the number of full months employed in the Performance Period) of Units based upon the actual performance at the end of Participant’s employment as determined by the set goals in Exhibit A.

(c) If the Company consummates a Change in Control (as defined in the Plan) prior to the end of the Performance Period and the acquirer does not assume this Agreement, the Participant will vest in a number of Units based upon the actual performance at the end of Participant’s employment as determined by the set goals in Exhibit A, and the Ordinary Shares issuable pursuant to such vesting shall be deemed to have been issued immediately prior to the Change in Control. If the Company consummates a Change in Control (as defined in the Plan) prior to the end of the Performance Period and the acquirer assumes this Agreement and the Participant’s employment with the Company or its successor subsequently is terminated other than for Cause within twelve months following the closing date of the Change of Control, the Participant will vest in a number of Units based upon the actual performance at the end of Participant’s employment as determined by the set goals in Exhibit A, and receive any consideration it would have received in exchange for the Ordinary Shares issuable pursuant to such vesting had such Ordinary Shares been issued immediately prior to the Change of Control..

(d) Except as provided in Subsections (b) and (c), Units (including Earned Units) shall be forfeited and terminate immediately if Participant’s employment is terminated for any reason prior to the Settlement Date.

Delivery of Shares or Cash.

(a) The Earned Units shall be settled in Common Shares or, at the discretion of the Committee, an amount in cash equal to the Fair Market Value of the Shares. Except as provided in Subsections (b) and (c), the transfer of Common Shares or the payment of cash shall be made as soon as practicable following the date on which the Committee certifies the attainment of the performance goals with respect to the Performance Period in accordance with Exhibit A, but in any event no later than 2 ½ months following the last day of the calendar year in which the Performance Period ends (the “Settlement Date”).

(b) If prior to the end of the Performance Period, the Participant dies or the Company terminates the Participant’s employment because the Participant is Disabled, the Settlement Date for any Units that vest as provided in Subsection 2(b) shall be as soon as practicable following the date on which the Participant dies or the Participant’s employment terminates, but in no event later than 2 ½ months following the last day of the calendar year in which the Participant dies or the Participant’s employment terminates.

(c) If the Company consummates a Change in Control prior to the end of the Performance Period and (i) the acquirer does not assume this Agreement; or (ii) the acquirer assumes this Agreement and the Participant’s employment with the Company or its successor subsequently is terminated other than for Cause within twelve months following the closing date of the Change of Control, the Settlement Date for any Units that vest as provided in Subsection 2(c) shall be as soon as practicable following the closing date of the Change of Control or the termination of the Participant’s employment, as applicable, but in any event no later than 2 ½ months following the last day of the calendar year in which the Change in Control occurs or the Participant’s employment terminates.

Transferability of Units.

(a) Prior to the Settlement Date, except, if applicable, to Participant’s personal representatives, heirs or legatees if the Participant dies or is Disabled, or pursuant to a qualified domestic relations order, these Units are personal and no rights granted hereunder shall be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) nor shall any such rights be subject to execution, attachment or similar process. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of these Units or of such rights contrary to the provisions here, or upon the levy of any attachment or similar process upon these Units of such rights, these Units and such rights shall, at the election of the Company, become null and void.

(b) Following the delivery of any Common Shares on the Settlement Date, the transfer or sale of the Common Shares shall be subject to the Company’s policy concerning insider trading, unless the Participant makes a valid election to transfer or sell the Common Shares in accordance with Rule 10b5-1 of the United States securities laws.

Rights as a Shareholder.

Participant shall have no rights as a shareholder with respect to any Common Shares which may be delivered upon vesting of these Units unless and until a certificate or certificates representing the Common Shares are duly issued and delivered to him, including any rights to dividends or other related payments.

Confidentiality.

(a) During Participant’s employment, Participant will have access to confidential or proprietary data or information of the Company (and its affiliates) and its operations. Participant agrees that Participant will not at any time divulge or communicate the Confidential Information (defined below) to any person, nor shall Participant direct any employee to divulge or communicate to any person (other than to a person bound by confidentiality obligations similar to those contained herein and other than as necessary in performing such duties hereunder), or use to the detriment of the Company (or any of its affiliates) or for the benefit of any other person, any Confidential Information. This restriction shall survive Participant’s employment with the Company hereunder, whether by the normal expiration thereof or otherwise. Participant acknowledges that any breach of this Section 6 could lead to the forfeiture the Units awarded hereunder, which shall be decided in the sole discretion of the Company.

(b) The term “Confidential Information” shall mean all information, whether or not reduced to written or recorded form, that is related to the Company and that is not generally known or accessible to members of the public and/or competitors of the Company nor intended for general dissemination, whether furnished by the Company or compiled by the employee, including, without limitation, relating to the Company’s (or any affiliate’s) financial performance, customers, existing or proposed future projects, prospects, or business strategies, personnel information, financial information, customer lists, supplier lists, trade secrets, information regarding operations, systems, services, know-how, computer and any other processed or collated data, computer programs, pricing, marketing and advertising data.

(c) Participant understands the Company intends to maintain the confidentiality of the Confidential Information notwithstanding that employees of the Company may have free access to the information for the purpose of performing their duties with the Company, and notwithstanding that employees not expressly bound by agreements similar to this agreement may have access to such information for job purposes. Participant acknowledges that Confidential Information need not be marked as such to preserve the confidential nature of the information.

Non-Competition.

Participant acknowledges that (a) in the course of Participant’s employment with the Company and its affiliates, Participant has, and will continue to, become familiar with the Company’s and its affiliates’ trade secrets, methods of doing business, business plans and other valuable confidential and proprietary information concerning the Company, its affiliates, their customers and business partners and that Participant’s services have been and will be of special, unique and extraordinary value to the Company and its affiliates. In consideration thereof and of the Target Award, during Participant’s employment with the Company or an affiliate and for a period of one (1) year thereafter, Participant shall not, without the Company’s prior written approval, become engaged, directly or indirectly, as a director, officer, employee or 5% or more stockholder or equity interest owner in, partner in, or consultant to, any business that is directly competitive with the business of the Company (or any affiliate) in any area or region where the Company (or any affiliate) conducts business (“Competition”). Notwithstanding the foregoing, Participant shall not be deemed to be in Competition with the Company if Participant provides evidence satisfactory to the Company, in its sole and absolute discretion, that Participant: (i) works in a separate division, department or unit that does not compete with the business of the Company (or any affiliate); and (ii) will not have contact with the division, department or unit that does compete with the business of the Company (or any affiliate). Participant acknowledges that any breach of this Section 7 could lead to the forfeiture the Units awarded hereunder, which shall be decided in the sole discretion of the Company.

Non-Solicitation.

During Participant’s employment and for a period of two (2) years thereafter, Participant shall not, without the prior written consent of the Company, directly or indirectly, on Participant’s own behalf or on behalf of any other person, firm, corporation or business entity: (a) induce or attempt to induce any agent, affinity group or policyholder of the Company (or any affiliate), or any prior agent, affinity group or policyholder that was an agent, affinity group or policyholder within twelve (12) months of such contact, to withdraw, decrease or cancel its business with the Company (or any affiliate) or otherwise terminate any written or oral agreement or understanding or other relationship with the Company (or any affiliate); (b) solicit or attempt to solicit, service or attempt to service, or for the purpose of obtaining the business of any customer of the Company (or any affiliate), or any prior agent, affinity group or policyholder that was an agent, affinity group or policyholder within twelve (12) months of such contact, to the extent the business solicited is similar to, or competitive with, the business of the Company (or any affiliate), engage in discussions or other communications with (regardless of who initiates such discussions or communications) any person, firm or entity that was an actual or prospective customer of the Company during any part of the twelve (12) month period immediately preceding termination of employment if Participant participated, directly or indirectly, in the solicitation or servicing of that customer or prospective customer, or supervised or managed those who did, during Participant’s employment with the Company at any time during such twelve (12) month period immediately preceding Participant’s termination of Service; (c) solicit or attempt to solicit, hire or attempt to hire, or call, any person who is an employee, individual consultant or independent contractor of the Company (or any affiliate), or any prior employee, individual consultant or independent contractor that was an employee, consultant or independent contractor within twelve (12) months of such contact, with the purpose or intent of attracting such person from the employ of the Company (or any affiliate); or (d) induce or attempt to induce any person who is an employee, individual consultant or independent contractor of the Company (or any affiliate) to terminate or limit his or her service or other relationship with the Company (or any affiliate), or any prior employee, individual consultant or independent contractor that was an employee, individual consultant or independent contractor within twelve (12) months of such contact. Participant acknowledges that any breach of this Section 8 could lead to the forfeiture the Units awarded hereunder, which shall be decided in the sole discretion of the Company.

No Right to Employment.

Neither the Units nor this Agreement gives Participant the right to be retained by the Company in any capacity and Participant’s employment may be terminated at any time and for any reason.

10.

Recapitalization.

If there is any change in the corporate structure or shares of the Company, the Committee (as defined in the Plan) or the Board of Directors shall make any appropriate adjustments, including, but not limited to, such adjustments deemed necessary to prevent accretion, or to protect against dilution, in the number and kind of Common Shares covered by these Units. All adjustments shall be determined by the Committee or the Board in its sole discretion and such determination shall be binding on the Participant.

11.

Extraordinary Corporate Transaction.

In the event of an extraordinary dividend or other distribution, merger, reorganization, consolidation, combination, sale of assets, split up, exchange or spin off or other extraordinary corporate transaction, the Committee or the Board of Directors shall, in the manner determined by the Board or Committee in its sole discretion, make provision for a cash payment or for the substitution or exchange of these Units or the cash, securities or property deliverable to the Participant pursuant to this Agreement based upon the distribution or consideration payable to holders of Common Shares upon or in respect of such event.

12.

Compliance with Laws and Regulations.

(a) The Company will not be obligated to issue or deliver any Common Shares to the Participant unless the issuance and delivery of such shares complies with applicable law, including, without limitation, the Securities Act of 1933, the Securities Exchange Act of 1934, as amended, applicable state securities law and the requirements of any stock exchange or market upon which the Common Shares may then be listed, and shall be further subject to the approval of counsel for the Company with respect to such compliance.

(b) In connection with the delivery of Common Shares to the Participant following the vesting of any Units, the Participant shall execute and deliver to the Company such representations in writing as may be requested by the Committee or the Company that the Company may comply with the applicable requirements of federal and state securities laws.

13.

Withholding.

The Company (or any of its subsidiaries if the Participant is employed by a subsidiary) shall have the right to deduct from payments of any kind otherwise due to the Participant (including payment of salary or bonuses), or to withhold a number of the Common Shares otherwise deliverable pursuant to Section 3 of this Agreement having a fair market value (as determined on the Settlement Date) equal to, the minimum federal, the amount of federal, state or local taxes of any kind required by law to be withheld with respect to the delivery of the Common Shares to the Participant.

14.

Miscellaneous.

(a) Except as provided herein, this Agreement may not be amended or otherwise modified unless evidenced in writing and signed by the Company and Participant.

(b) All notices under this Agreement shall be mailed or delivered by hand to the parties at their respective addresses set forth beneath their names below or at such other address as may be designated in writing by either of the parties to one another.

(c) Nothing contained herein shall be deemed an undertaking by the Company to continue Participant’s employment by the Company which may be terminated at any time at the sole discretion of the Company, except as provided in an employment agreement between the Company and Participant, if any.

(d) This Agreement shall be governed by and construed in accordance with the laws of Bermuda without regard to any conflicts or choice of law rules or principles that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.

(e) Shares earned and delivered under this Agreement shall be subject to any recoupment policy for awards under the Plan adopted by the Company as such policy exists from time to time.

15.

Section 409A and 457A Compliance.

This Agreement and the Units are intended to comply with the short-term deferral exemption under Sections 409A and 457A of the Internal Revenue Code of 1986, as amended (the “Code”) and any regulations, rulings, or guidance provided thereunder. The Company reserves the unilateral right to amend this Agreement upon written notice to the Participant to prevent taxation under Code Sections 409A and 457A.

Dated: [ ]

MAIDEN HOLDINGS, LTD.

131 Front Street, 2nd Floor

Hamilton HM12 Bermuda

By:
	Name:
	Title:

PARTICIPANT’S ACCEPTANCE

The undersigned hereby accepts the foregoing Units and agrees to the terms and conditions thereof.

PARTICIPANT:

Signature:
Name:	[NAME]
Address:	[ADDRESS]

Date:

Exhibit A

Performance Period: January 1, 2011 – December 31, 2012

Performance Goals:

Measure	Weight			Threshold Goal			Target Goal			Maximum Goal

Return on Equity		40	%		10.1	%		13.5	%		20.25	%

Underwriting Performance		30	%		3	%		4	%		6	%

Revenue Growth		20	%		7.5	%		10	%		15	%

Operating Expense		10	%		5	%		4	%		2	%

Restricted Share Units will not be earned if performance is below the threshold set at 75%. 50% of the target number of Restricted Share Units shall be earned if threshold performance is achieved and 200% of the target number shall be earned if maximum performance of 150% or higher is achieved. Results between threshold and maximum performance will be determined based on straight-line interpolation.

For purposes of this award, the following terms shall have the following meanings:

“Disabled” means that the Participant is unable to perform the essential functions of his or her position with or without a reasonable accommodation because of a physical or mental illness or condition) for a period of 90 consecutive days or 120 non-consecutive days within any rolling one year period.

ENDORSEMENT NO. 1

to the

AMENDED AND RESTATED

QUOTA SHARE REINSURANCE AGREEMENT

(hereinafter referred to as the “Agreement”)

BETWEEN

AMTRUST INTERNATIONAL INSURANCE, LTD.

HAMILTON, BERMUDA

(hereinafter referred to as the “Company”)

AND

MAIDEN INSURANCE COMPANY LTD.

HAMILTON, BERMUDA

(hereinafter referred to as the “Reinsurer”)

IT IS HEREBY AGREED, effective as of 12:01 a.m., Eastern Standard Time, April 1, 2011, Paragraph A. of ARTICLE XXI – TERM AND TERMINATION shall be deleted in its entirety and the following substituted therefor:

“A.

This Agreement shall remain in effect until July 1, 2014, and shall automatically renew for successive three-year periods thereafter, unless the Reinsurer or Company elects to terminate this Agreement effective as of July 1, 2014 or as of the expiration of any successive three-year period. If the Reinsurer or Company elects to so terminate this Agreement, it shall give written notice to the other party hereto not less than nine months prior to either July 1, 2014 or the expiration of any successive three-year period.”

IT IS FURTHER AGREED, as of 12:01 a.m., Eastern Standard Time, April 1, 2011, Paragraph A. of ARTICLE XXIII – UNAUTHORIZED REINSURANCE shall be deleted and the following substituted therefor:

“A.	The Reinsurer will timely fund or provide security for its share of the Obligations (as defined below) by:

transferring to the Company assets (the "Reinsurer Trust Assets") for deposit into one or more trust accounts established or to be established by Company for the sole benefit of such Affiliate (each, a “Trust Account”) with a trustee (the “Trustee”), which Trustee shall be at the time a Trust Account is established, and shall continue to be, a member of the Federal Reserve System and shall not be a parent, subsidiary or affiliate of the Reinsurer, Company or such Affiliate, pursuant to a trust agreement meeting the applicable requirements of the jurisdictions having regulatory authority over each applicable Affiliate (each a “Trust Agreement”);

delivering one or more clean, unconditional and irrevocable letters of credit to such Affiliate (each, a "Letter of Credit") in form and substance satisfying the requirements of the jurisdictions having regulatory authority over such Affiliate; and/or

requesting that the Company cause such Affiliate to withhold Subject Premium in lieu of remitting Affiliate Subject Premium to the Company (the "Subject Withheld Funds", together with any other Affiliate Subject Premium that shall be withheld under an Underlying Reinsurance Agreement, the “Withheld Funds”) in accordance with the terms of the Underlying Reinsurance Agreement with such Affiliate.

For the avoidance of doubt, the Reinsurer shall be permitted to elect any or a combination of the above forms of security, provided that the aggregate value of the security funded or provided by the Reinsurer equals the Reinsurer's proportionate share of the Obligations.

IT IS FURTHER AGREED, as of 12:01 a.m., Eastern Standard Time, April 1, 2011, Paragraph C. of ARTICLE VI – PREMIUM AND CEDING COMMISSION shall be deleted in its entirety and the following substituted therefor:

“C.

The Reinsurer shall allow the Company a commission on all Subject Premium ceded hereunder and attributable to Covered Business determined in accordance with the provisions of Schedule B to this Agreement. The Company shall allow the Reinsurer return commission on return premiums at the rate in effect when the return premiums were originally ceded to the Reinsurer. It is expressly agreed that the ceding commission allowed the Company includes provision for all commissions, taxes, assessments (other than assessments based on losses of an Affiliate, as a ceding company under an Underlying Reinsurance Agreement) and all other expenses of whatever nature of the Company and Affiliates, except loss adjustment expenses.”

IT IS FURTHER AGREED, as of 12:01 a.m., Eastern Standard Time, April 1, 2011, Schedule B to this Agreement shall be deleted in its entirety and the following substituted therefor:

“Schedule B

For the period April 1, 2011 to December 31, 2011:

The Reinsurer shall allow the Company a 30% commission on all Subject Premium ceded hereunder and attributable to Covered Business, except that the Reinsurer shall allow the Company a 34.375% commission on Subject Premium related to Retail Commercial Package Business.

For each calendar quarter commencing with the first quarter of 2012, the ceding commission on Subject Premium ceded in that calendar quarter shall be determined in accordance with the following provisions:

A.	The Reinsurer shall allow the Company a provisional 31% commission on all Subject Premium ceded hereunder and attributable to Covered Business (excluding UBI related business as described in Paragraph C. below), which shall be subject to the following adjustment:

If the percentage of ceded premiums for Covered Business attributable to Specialty Risk and Extended Warranty business for the subject quarter and the two calendar quarters immediately prior thereto is:

Greater than or equal to 42% of the total ceded premium for Covered Business for those three quarters, the commission for the subject quarter shall be reduced from 31% to 30%;

Greater than or equal to 38% of the total ceded premium for Covered Business for those three quarters but less than 42%, the commission for the subject quarter shall be reduced from 31% to 30.5%.

B.	The Company shall include its calculation of the percentage of ceded premium for Covered Business attributable to Specialty Risk and Extended Warranty business with its quarterly report to the Reinsurer in accordance with Article VII of the Agreement.

C.	The Reinsurer shall allow the Company a 34.375% commission on Subject Premium related to Retail Commercial Package Business.”

IN WITNESS WHEREOF the parties hereto, by their respective duly authorized officers, have executed this ENDORSEMENT NO. 1 to the Agreement, in duplicate, as of the dates recorded below:

AMTRUST INTERNATIONAL INSURANCE, LTD.

By:	/s/ Michael Bott

Dated:	July 26, 2011

MAIDEN INSURANCE COMPANY LTD.

By:	/s/ David A. Lamneck

Dated:	July 26, 2011

Quota Share Reinsurance Contract

Reinsured		AmTrust Europe Limited, Nottingham, England and/or AmTrust International Underwriters Limited, Eire.

Principal Address		Market Square House
		St. James’s Street
		Nottingham
		NG1 6FG
		United Kingdom

Preamble		Whereas the Reinsured underwrite certain business and are desirous of reinsuring a proportion of such business, being all policies and/or contracts. Now therefore it is agreed that this Contract shall indemnify the Reinsured, subject to the following terms and conditions.

		The titles allocated to the clauses listed under Conditions are intended solely for the convenience of reference and will not affect the meaning, interpretation, construction or effect of this Contract.

Type		Quota Share Treaty.

Class and Period of Business		This Contract shall cover all policies classified by the Reinsured as Medical Malpractice, including associated liability coverages and policies covering physician defense costs, written or renewed by the Reinsured on or after 2nd April 2011.

		This Contract will also cover all such policies written or renewed by the Reinsured on or before 1st April 2011 at the sole option of the Reinsured (the “Inforce Option”), such option to be exercised by June 30, 2011.

		This Contract shall remain in effect continuously thereafter unless the Reinsurer or Reinsured elects to terminate this Contract effective as of April 1, 2012 or any April 2 thereafter. If the Reinsurer or Reinsured elects to so terminate this Contract, it shall give written notice to the other party hereto not less than four months prior to the termination date. Termination shall be on a run-off basis, with runoff to include the full original term of multi-year policies. In the alternative, the Reinsured in its sole option may elect to cut off the Reinsurer’s liabilities and return the associated unearned premium, with such cut-off to occur either as of the date of termination or as of the first anniversary date of each multi-year policy that falls on or after the termination date.

Treaty Detail		The Reinsured shall cede and the Reinsurer shall accept by way of reinsurance a Quota Share Percentage of the business stated in ‘Class and Period of Business’.

		The percentage Quota Share Cession to the Reinsurer shall be Forty per cent (40%). Cessions to AmTrust International Insurance Ltd. shall be deemed retained by the Reinsured.

		The maximum limit of liability attaching hereunder shall be:

		EUR 5,000,000 (Five Million Euros) or currency equivalent (on a 100% (One Hundred Percent) basis) per original claim any one original policy.

		The Reinsured may submit risks that are not otherwise subject to this Contract, including but not limited to risks with limits greater than EUD 5,000,000, to the Reinsurer for Special Acceptance (“Acceptance”). Such risks, if accepted by the Reinsurer in its sole judgment, will be subject to the terms of this Contract except to the extent that such terms are modified in the Acceptance. For any such risks, the Reinsurer shall confirm its Acceptance in writing, along with any modification of the Contract terms for such Acceptance. The Reinsurer’s written confirmation of the Acceptance will become part of the Contract.

		It is agreed that the liability of the Reinsurer on all business ceded hereunder shall commence and cease simultaneously with that of the original Policies and shall follow the original terms, clauses, conditions and settlements of the said Policies, subject to the terms and conditions of this Contract.

Original Net Premium		In respect of the risks ceded hereunder the Reinsured shall pay to the Reinsurer their proportion of the Original Net Premiums.

		Original Net Premium shall mean the gross premium written by the Reinsured on business protected hereunder during the period of this Contract less taxes, cancellations, returned premiums and original commissions.

Territorial Scope		The territorial scope of this Contract shall be as provided in the risks ceded hereunder for insureds located in Italy.

Commission		The Reinsurer shall allow the Reinsured a Fixed Commission of 3.5% (Three and one half Percent) on Original Net Premium ceded hereunder.

		The Reinsurer shall further allow the Reinsured a Profit Share on Original Net Premiums ceded hereunder, being in addition to the 3.5% Fixed Commission.

		The Profit Share will apply separately to each twelve month period this Contract remains in effect (“Contract Year”) and will be adjusted quarterly, the first adjustment to be made 1st April 2013. Reinsured’s Profit Share is 50% of the amount by which Incurred Net Loss Ratio is below 65% of the Original Net Premium. For purposes of calculating profit share, multi-year policies shall be split into individual years so that the maximum original policy period in a Contract Year shall be 12 months plus odd time not exceeding 18 months in all. In the event that the Reinsured exercises its Inforce Option as described above, the premium and losses reinsured under that option will be combined with the first Contract Year for the calculation of the Profit Share. The first Contract Year will be- April 2, 2011 through March 31, 2012, both days inclusive, and subsequent Contract Years will begin April 1 of each year)

		“Incurred Net Loss Ratio” shall be defined as net paid and outstanding Losses (inclusive of IBNR as established by the Reinsured after consultation with the Reinsurer), being paid and outstanding Losses (“Losses” being further defined under the Loss Settlement Clause) less third party recoveries, divided by Original Net Premium (as defined above) for risks attaching during the Contract Year, as a percentage.

Brokerage		1.25% on Original Net Premium ceded.

Accounts		Accounts of the transactions between the Reinsured and the Reinsurer hereunder both in respect of premiums and Losses and all items relative to these risks, separately for each Contract Year, shall be rendered by the Reinsured to the Reinsurer quaterly and received by the Reinsuer within 30 (Thirty) days after the end of each quarter. After receipt of the account by the Reinsurer the balance due hereon shall be paid within 30 (Thirty) days thereafter.

		The Reinsured shall provide a full individual claim listing quarterly for each of the risks ceded hereunder.

Cash Loss Limit		Should any claim payment hereunder in respect of any loss to this Contract exceed EUR 50,000 (Fifty thousand Euros) (for 100%) or currency equivalent then the Reinsured may request special payment by the Reinsurer of the relative amount of such Cash Claim on submission in writing of full loss details. Amounts falling to the share of the Reinsurer will be due immediately (and in any event within 30 days).

Reinsurer Contract Documentation		This document details the contract terms entered into by the Reinsurer and constitutes the contract document.

		With the exception of Contract Endorsements, which may become necessary to formalise any amendments or alterations to this Contract, no further evidence of cover will be issued.

Security		The Reinsurer will post security equal to 100% of the ceded unearned premium and outstanding Losses including IBNR/ calculated by the Reinsured at 75% confidence factor immediately upon being asked to do so and adjusted quarterly. Security shall only be required if the Reinsurer’s Bests rating is reduced to lower than A minus stable or if the Reinsurer’s surplus is less than $600,000,000.

Conditions		Reinsurance Clause
		It is agreed that the liability of the Reinsurer on all business ceded hereunder shall commence and cease simultaneously with that of the original policies and shall follow the original terms of the said policies, subject to the terms of this Contract.

		Offset Clause
		The Reinsured and the Reinsurer, each at its option, may offset any balance or balances, whether on account of premiums, claims and losses, loss expenses or salvages due from one party to the other under this Contract.

		Loss Settlement Clause
		“Losses” as defined herein include all loss settlements made or to be made by the Reinsured, provided the same are within the terms of the original policies, - including loss adjustment costs and expenses allocable to a specific claim incurred by the Reinsured in the investigation, appraisal, adjustment, settlement, litigation, defence or appeal of a specific claim. Losses shall be unconditionally binding upon the Reinsurer and amounts falling to the share of the Reinsurer shall be payable by them upon reasonable evidence of the amount paid being given by the Reinsured.

		Currency Conversion Clause
		For the purpose of this Contract currencies other than the currency in which this Contract is written shall be converted into that currency at the rates of exchange used in the Reinsured’s books or where there is a specific remittance for a loss settlement at the rates of exchange used in making such remittance.

		Inspection Clause
		For as long as either party remains under any liability hereunder the Reinsured shall, upon request by the Reinsurer, make available at the Reinsured’s head office or wherever the same may be located, for inspection at any reasonable time by such representatives as may be authorised by the Reinsurer for that purpose, all non-privileged information (meaning information which would not breach an applicable privilege by being shared) relating to business reinsured hereunder in the Reinsured’s possession or under its control and the said representatives may arrange for copies to be made at the Reinsurer’s expense of any of the records containing such information as they may require.

		If required by the Reinsured, the Reinsurer agrees to enter into a confidentiality agreement prior to undertaking any inspection of records. This would provide that all terms and conditions of this Contract and any information provided in the course of inspection shall be kept confidential by the Reinsurer as against third parties, unless the disclosure is in line with those scenarios detailed in the “Confidentiality” Clause.

		Confidentiality Clause
		The Reinsurer shall regard the transactions under this Contract as strictly confidential and shall not at any time, during its currency or thereafter, make any use, either directly or indirectly, of the information afforded of the business and connections of the Reinsured which shall or may in any way operate to the prejudice or detriment of the latter.

		The restrictions as outlined in the Clause shall not apply to communication or disclosures that the Reinsurer is required to make to its statutory auditors, retrocessionaires, associates, legal counsel, arbitrators involved in any arbitration procedures under this Contract or disclosures required upon subpoena or other duly issued order of a court of other governmental agency or regulatory authority.

		Follow the Fortunes

		A. Any business ceded hereunder is subject to the terms and conditions of the Reinsured’s Original Policy or Policies and automatically follows all changes in coverage and all endorsements made a part of such policy or policies. Should any regulatory or other legal restriction of any state require modification of any subject policy to which this Contract applies, the liability of the Reinsurer will follow that of the Reinsured.

		B. Nothing herein will in any manner create any obligations or establish any rights against the Reinsurer in favour of any third parties or any persons not parties to this Contract except as provided in the Insolvency Clause.

		Errors and Omissions Clause

		Any inadvertent error or omission on the part of either the Reinsured or the Reinsurer shall not relieve either party from any liability which would have attached hereunder, provided that such error or omission is rectified immediately upon discovery

		Special Termination Clause

		The Reinsurer may terminate this Contract in the event of any of the following (clauses 1 through 5 below, collectively, the “Reinsured Special Termination Events”) by written notice to the Reinsured no later than thirty (30) days (or in the case of a Reinsured Special Termination Event described in subsection (1) below, ten (10) days) following actual knowledge of the applicable Reinsured Special Termination Event by the Reinsurer:

		1) the Reinsured is thirty (30) or more days in arrears on payment due to the Reinsurer under this Contract, and has not cured such breach within thirty (30) days following written notice thereof from the Reinsurer (unless the amount not so paid is the subject of a good faith dispute) (a “Reinsured Payment Default”);
		2) the Reinsured has ceased writing new or renewal business and has elected to run off its existing business or an insurance or other regulatory authority has ordered such party to cease writing new or renewal business;
		3) the Reinsured has become insolvent, or has been placed into liquidation or receivership (whether voluntary or involuntary), or there have been instituted against it proceedings for the appointment of a receiver, liquidator, rehabilitator, conservator, or trustee in bankruptcy or other agent known by whatever name, to take possession of its assets or control of its operations
		4) a Reinsured Change of Control has occurred. For purposes of this Agreement, a “Reinsured Change of Control” will be deemed to occur with respect to the Reinsured when either (a) an individual person, corporation or other entity, or a group of commonly controlled persons, corporations or entities, acquires, including through merger, directly or indirectly, more than fifty percent (50%) of the voting securities of the Reinsured or obtains the power to vote (directly or through proxies) more than fifty percent (50%) of the voting securities of the Reinsured, except if such individual person, corporation or other entity is under common control with such Reinsured, or (b) AmTrust Financial Services, Inc. (“AmTrust”) no longer directly or indirectly controls the power to vote more than fifty percent (50%) of the voting securities of the Reinsured; provided that in no event shall the acquisition, including through merger, of more than fifty percent (50%) of the voting securities of AmTrust or of the power to vote (directly or through proxies) more than fifty percent (50%) of the voting securities of AmTrust, or the merger, combination or amalgamation of AmTrust into any person, or similar transaction pursuant to which AmTrust shall not be the surviving entity, be deemed a " Reinsured Change of Control"; or
		5) the combined shareholders' equity of the Reinsured and the Affiliates is reduced to 50% or less of the amount of such shareholders’ equity at either the inception of this Contract or at the latest renewal or anniversary date of this Contract.

		Termination as a result of a Reinsured Payment Default shall be effective upon not less than ten (10) days prior written notice from the Reinsurer to the Reinsured, and termination as a result of any other Reinsured Special Termination Event shall be effective upon not less than thirty (30) days prior written notice from the Reinsurer to the Reinsured. For greater certainty, the Reinsurer may not terminate this Contract as a result of a Reinsured Special Termination Event unless such event is continuing on the date it delivers its notice of termination to the Reinsured.

		The Reinsured may terminate this Contract, in the event of any of the following (clauses 1 through 6 below, collectively, the “Reinsurer Special Termination Events”) by written notice to the Reinsurer no later than thirty (30) days (or in the case of a Reinsurer Special Termination Event described in subsection (1) below, ten (10) days) following actual knowledge of the applicable Reinsurer Special Termination Event by the Reinsured:

		1) the Reinsurer is thirty (30) or more days in arrears on payment due to the Reinsured under this Contract and the Reinsurer has not cured such breach within thirty (30) days following written notice thereof from the Reinsured (unless the amount not so paid is the subject of a good faith dispute) (a “Reinsurer Payment Default”);
		2) the Reinsurer has ceased writing new or renewal business and has elected to run off its existing business or an insurance or other regulatory authority has ordered the party to cease writing new or renewal business;
		3) the Reinsurer has become insolvent, or has been placed into liquidation or receivership (whether voluntary or involuntary), or there have been instituted against it proceedings for the appointment of a receiver, liquidator, rehabilitator, conservator, or trustee in bankruptcy or other agent known by whatever name, to take possession of its assets or control of its operations;

		4) a Reinsurer Change of Control has occurred. For purposes of this Agreement, a “Reinsurer Change of Control” will be deemed to occur when either (a) an individual person, corporation or other entity, or a group of commonly controlled persons, corporations or entities, acquires, including through merger, directly or indirectly, more than fifty percent (50%) of the voting securities of the Reinsurer or obtains the power to vote (directly or through proxies) more than fifty percent (50%) of the voting securities of the Reinsurer, except if such individual person, corporation or other entity is under common control with the Reinsurer or (b) Maiden Holdings, Ltd. no longer directly or indirectly controls the power to vote more than fifty percent (50%) of the voting securities of the Reinsurer;
		5) the Reinsurer's shareholders' equity is reduced to 50% or less of the amount of its shareholders’ equity at either the inception of this Contract or at the latest renewal or anniversary date of this Contract; or

		6) The Reinsurer fails to maintain an A.M. Best rating of A- (Stable) or better.

		Termination as a result of a Reinsurer Payment Default shall be effective upon not less than ten (10) days prior written notice from the Reinsured to the Reinsurer, and termination as a result of any other Reinsurer Special Termination Event shall be effective upon not less than thirty (30) days prior written notice from the Reinsured to the Reinsurer. For greater certainty, the Reinsured may not terminate this Contract as a result of a Reinsurer Special Termination Event unless such event is continuing on the date the applicable Reinsured delivers its notice of termination to the Reinsurer.

		Following the effective date of the termination of this Contract as described in this termination clause all reinsurance hereunder shall remain in force until the expiration date, anniversary date, or prior termination date of all Policies included therein, unless, not later than thirty (30) days following such effective date of termination of this Contract, the Reinsured shall elect that the Reinsurer shall not be liable for any Losses that occur, accrue or arise on or after the effective date of termination. If the Reinsured shall make such election, within thirty (30) days following the date of such election, the Reinsurer shall return to the Reinsured the unearned premium applicable to such Policies in force at the time and date of termination, less the unearned portion of the ceding commission paid thereon.

		Insolvency Clause (G86)
		1. Where an Insolvency Event occurs in relation to the Reinsured the following terms shall apply (and, in the event of any inconsistency between these terms and any other terms of this Contract, these terms shall prevail):

		(1) Notwithstanding any requirement in this Contract that the Reinsured shall actually make payment in discharge of its liability to its policyholder before becoming entitled to payment from the Reinsurer.

		a) the Reinsurer shall be liable to pay the Reinsured even though the Reinsured is unable to actually pay, or to discharge its liability to, its policyholder, but

		b) nothing in this Clause shall operate to accelerate the date for payment by the Reinsurer of any sum which may be payable to the Reinsured, which sum shall only become payable as and when the Reinsured would have discharged, by actual payment, its liability for its current net loss but for it being the subject of an Insolvency Event.

		(2) The existence, quantum, valuation and date for payment of any sum which the Reinsurer is liable to pay the Reinsured under this Contract shall be those and only those for which the Reinsurer would be liable to the Reinsured if the liability of the Reinsured to its policyholders had been determined without reference to any term in any composition or scheme of arrangement or any similar such arrangement, entered into between the Reinsured and all or any part of its policyholders, unless and until the Reinsurer serves written notice to the contrary on the Reinsured in relation to any composition or scheme of arrangement.

		(3) The Reinsurer shall be entitled (but not obliged) to set-off, against any sum which it may be liable to pay the Reinsured, any sum for which the Reinsured is liable to pay the Reinsurer.

		2. An Insolvency Event shall occur if:

		(A) i) (in relation to (1), (2) and (3) above) a winding up petition is presented in respect of the Reinsured or a provisional liquidator is appointed over it or if the Reinsured goes into administration, administrative receivership or receivership or if the Reinsured has a scheme of arrangement or voluntary arrangement proposed in relation to all or any parts of its affairs; or

		ii) (in relation to (1) above) if the Reinsured goes into compulsory or voluntary liquidation; or

		in each case, if the Reinsured becomes subject to any other similar insolvency process (whether under the laws of England and Wales or elsewhere); and

		(B) the Reinsured is unable to pay its debts as and when they fall due within the meaning of section 123 of the Insolvency Act 1986 (or any statutory amendment or re-enactment of that section).

		Contracts (Rights of Third Parties) Act 1999 Clarification Clause NMA 2852
		A person who is not a party to this Contract has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Contract but this does not affect any right or remedy of a third party which exists or is available apart from that Act.

		Intermediary Clause
		All communications and notices served in accordance with any of the provisions of this Contract shall be addressed to the party concerned through the offices of AII Reinsurance Broker Ltd., Hamilton, Bermuda who are hereby recognised by all parties as the Intermediary.

		Amendments Clause
		It is understood and agreed that any mutually agreed modifications to this Contract (whether by Addendum/Endorsement or other written correspondence) shall be binding on both parties and shall be deemed to form a part of this Contract, and attached hereto.

Arbitration		All disputes and differences arising under or in connection with this Contract shall be referred to arbitration under ARIAS Arbitration Rules.

		The Arbitration Tribunal shall consist of three arbitrators, one to be appointed by the Claimant, one to be appointed by the Respondent and the third to be appointed by the two appointed arbitrators.

		The third member of the Tribunal shall be appointed as soon as practicable (and no later than 28 days) after the appointment of the two party-appointed arbitrators. The Tribunal shall be constituted upon the appointment of the third arbitrator.

		The Arbitrators shall be persons (including those who have retired) with not less than ten years’ experience of insurance or reinsurance within the industry or as lawyers or other professional advisers serving the industry.

		Where a party fails to appoint an arbitrator within 14 days of being called upon to do so or where the two party-appointed arbitrators fail to appoint a third within 28 days of their appointment, then upon application ARIAS (UK) will appoint an arbitrator to fill the vacancy. At any time prior to the appointment by ARIAS (UK) the party or arbitrators in default may make such appointment.

		The Tribunal may in its sole discretion make such orders and directions as it considers to be necessary for the final determination of the matters in dispute. The Tribunal shall have the widest discretion permitted under the law governing the arbitral procedure when making such orders or directions.

		The seat of arbitration shall be London, England.

		The proper law of this Contract shall be the law of England.

Non-Waiver		The failure of the Reinsured or the Reinsurer to insist on compliance with this Contract or to exercise any right or remedy hereunder shall not constitute a waiver of any rights or remedy contained herein nor estop either party from thereafter demanding full and complete compliance nor prevent either party from exercising such rights or remedy in the future.

No Third Party Rights		Nothing in this Contract, express or implied, is intended to or shall confer upon any person, other than the parties hereto, any rights, benefits or remedies of any nature whatsoever under or by reason of this Contract.

Right to Associate		The Reinsurer shall have the right, but not the obligation, to associate at its own expense in the defense or settlement of all claims impacting this Contract, and the Reinsured shall cooperate with the Reinsurer in this regard. However, nothing in this clause shall over-ride the provisions of the Loss Settlements Clause.

Choice of Law & Jurisdiction		The validity, construction and performance of this Contract shall be governed by the law of England and Wales and the Courts of England and Wales shall have exclusive jurisdiction in any dispute hereunder

IN WITNESS WHEREOF, the Parties hereto, by their respective duly authorized representatives have executed this Contract as of the dates specified below:

AmTrust Europe, Limited

BY:	/s/ Jeremy Cadle

Dated	April 1, 2011

AmTrust International Underwriters, Limited

BY:	/s/ Edward Bennett, CEO

Dated	April 1, 2011

Maiden Insurance Company, Limited

BY:	/s/ David A. Lamneck, Senior Vice President

Dated	April 1, 2011

ENDORSEMENT NO. 1

to the

Quota Share Reinsurance Contract

(hereinafter referred to as the “Contract”)

between

AmTrust Europe Limited, Nottingham, England

and/or

AmTrust International Underwriters Limited, Eire.

(hereinafter collectively referred to as the “Reinsured”)

and

Maiden Insurance Company Ltd.

(hereinafter referred to as the “Reinsurer”)

IT IS HEREBY AGREED, effective 1st April 2011, that:

1)	The section entitled “Class and Period of Business” of this Contract shall be deleted and the following substituted therefor:

“This Contract shall cover all policies classified by the Reinsured as Medical Malpractice, including associated liability coverages and policies covering physician defense costs, written or renewed by the Reinsured on or after 1st April 2011.

This Contract shall also apply to all such policies written or renewed by the Reinsured on or before 31st March 2011, but only as respects Losses that occur, accrue or arise on or after 1st April 2011. For all purposes of this Contract, the loss date as determined by the Reinsured shall be the date the Loss “occurs, accrues or arises”.

The Contract shall remain in effect continuously thereafter unless the Reinsurer or Reinsured elects to terminate this Contract at April 1, 2012 or any April 1 thereafter. If the Reinsurer or Reinsured elects to so terminate this Contract, it shall give written notice to the other party hereto not less than four months prior to the termination date. Termination shall be on a runoff basis, with runoff to include the full original term of multi-year policies. In the alternative, the Reinsured in its sole option may elect to cut off the Reinsurer’s liabilities and return the associated unearned premium with such cut-off to occur either 1) as of the date of termination or 2) as of the first anniversary date of each such multi-year policy that falls on or after the termination date, at the Reinsured’s sole option.”

2)	The section entitled “Commission” of this Contract shall be deleted and the following substituted therefor:

“The Reinsurer shall allow the Reinsured a Fixed Commission of 5.0% (Five Percent) on Original Net Premium ceded hereunder.

The Reinsurer shall further allow the Reinsured a Profit Share on Original Net Premiums ceded hereunder, being in addition to the 5.0% (Five Percent) Fixed Commission.

The Profit Share shall apply separately to each twelve month period this Contract remains in effect (“Contract Year”) and will be adjusted quarterly, the first adjustment to be made 1st April 2013. Reinsured’s Profit Share is 50% of the amount by which Incurred Net Loss Ratio is below 65% of the Original Net Premium. For purposes of calculating Profit Share, multi-year policies will be split into individual years so that the maximum original policy period in a Contract Year shall be 12 months plus odd time not exceeding 18 months in all. The first Contract Year will be 1st April, 2011 through 31st March, 2012, both days inclusive, including the in force exposures at 1 April 2011. Subsequent Contract Years will begin at 1st April of each year.”

“Incurred Net Loss Ratio” shall be defined as net paid and outstanding Losses (inclusive of IBNR as established by the Reinsured after consultation with the Reinsurer), being paid and outstanding Losses (“Losses” being further defined under the Loss Settlement Clause) less third party recoveries, divided by Original Net Premium (as defined above) for risks attaching during the Contract Year, as a percentage.

3)	The section entitled “Conditions” of this Contract shall be amended by the inclusion of the following subsection directly after the subsection entitled “Loss Settlement Clause”:

“Aggregate Annual Deductible

As respects policies with effective dates prior to 1st April 2011, for the purposes of calculating the liability of the Reinsurer for losses occurring on or after 1st April 2011, the Aggregate Annual Deductible (AAD) specified under an original policy shall be apportioned on a pro rata basis by reference to the aggregate value of claims paid for the period from 1st April 2011 through the end of the policy period, and the aggregate value of claims paid for the entire period of the original policy.

The apportionment of the AAD for a Policy Period shall be provisionally calculated each month on the basis of claims paid through the prior month and the Reinsurer shall pay their share of claims on this basis of this provisional apportionment. The provisional calculation shall be submitted at the date the claims bordereau is submitted to the Reinsurer.

Settlements required as a consequence of changes in the value of the paid claims under the original policy (and consequent changes to the AAD apportionment) shall take effect at the next closing, with the adjustment paid in addition to or set off from the amount due at such closing.

The final calculation of the apportionment of the AAD shall take place within 30 days of the date that all Reinsured liability under a Policy terminates or such other time as the Parties agree and the final reconciliation be paid by the Reinsured or Reinsurer as relevant within 30 days of that calculation.

In the event this Contract (or any Contract Year hereunder if mutually agreed) is terminated on a cut off basis, the AAD under any policy that earns premium both before and after the cutoff date shall be apportioned in the same manner set forth above.”

4)	The section entitled “Security” of this Contract shall be deleted and the following substituted therefor:

“The Reinsurer will post security equal to 100% of the ceded unearned premium and outstanding Losses including IBNR, calculated by the Reinsured at 75% confidence factor immediately upon being asked to do so and adjusted quarterly.”

5)	The name of the Reinsurer shall be corrected to “Maiden Insurance Company Ltd.” in all places it appears in the Contract.

All other terms and conditions of the Contract shall remain unchanged except to the degree necessary to give effect to the changes made herein.

IN WITNESS WHEREOF, the Parties hereto, by their respective duly authorized representatives have executed this Endorsement as of the dates specified below:

AmTrust Europe, Limited

BY:	/s/ Jeremy Cadle

Dated	July 26, 2011

AmTrust International Underwriters, Limited

BY:	/s/ Ronan Conboy

Dated	July 26, 2011

Maiden Insurance Company Ltd.

BY:	/s/ David A. Lamneck

Dated	July 26, 2011

FIRST AMENDMENT TO

AMENDED AND RESTATED DECLARATION OF TRUST OF

MAIDEN CAPITAL FINANCING TRUST

FIRST AMENDMENT TO AMENDED AND RESTATED DECLARATION OF TRUST, dated as of July 14, 2011 (this “First Amendment”), by and among Maiden Holdings North America, Ltd. (the “Sponsor”), Arturo M. Raschbaum, John M. Marshaleck and Karen L. Schmitt, as all of the Administrators (collectively, the “Administrators”), and Wilmington Trust Company, as Institutional Trustee and Delaware Trustee (collectively, the “Trustee”).

WITNESSETH:

WHEREAS, the Amended and Restated Declaration of Trust of Maiden Capital Financing Trust, dated as of January 20, 2009 (as heretofore amended and supplemented, the “Declaration of Trust”), was executed and delivered by the parties thereto, providing for the establishment of the Maiden Capital Financing Trust (the “Trust”) and the issuance of the Common Securities and Capital Securities (capitalized terms used herein but not otherwise defined have the meanings ascribed thereto in the Declaration of Trust);

WHEREAS, Article XI of the Declaration of Trust sets forth the substantive and procedural requirements for an amendment to the Declaration of Trust; and

WHEREAS, in accordance with Section 11.01(c) of the Declaration of Trust, the Holders of a Majority in liquidation amount of the Capital Securities have consented to this First Amendment, and such consents have been provided to the Trustee and the Sponsor; and

WHEREAS, an Officers’ Certificate from each of the Trust and the Sponsor has been delivered to the Institutional Trustee pursuant to Section 11.01(b)(i)(A) of the Declaration of Trust; and

WHEREAS, an opinion of counsel of the Sponsor has been delivered to the Institutional Trustee pursuant to Section 11.01(b)(i)(B) of the Declaration of Trust; and

WHEREAS, this First Amendment has been duly authorized by all necessary corporate action on the part of the Sponsor;

NOW, THEREFORE, in consideration of the premises set forth above and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Sponsor, the Administrators and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders as follows:

ARTICLE I

Amendment to the Declaration

Section 1.1. Exchange Provision. Effective as of the date hereof, Article VI of the Declaration is hereby amended to add the following Section 6.11:

“Section 6.11. Exchange Provision.

(a) Notwithstanding anything to the contrary in this Declaration, if at any time the Sponsor or any of its Affiliates (in either case, a “Sponsor Affiliated Holder”) is a beneficial owner or Holder of any Capital Securities, such Sponsor Affiliated Holder shall have the right to exchange all or such portion of its indirect holding of Capital Securities or its Capital Securities, as the case may be, as it elects and receive, in exchange therefor, a principal amount of Debentures equal to the liquidation amount of the Capital Securities. Such election:

(i) shall be exercisable effective on any date specified in the written notice of such election by such Sponsor Affiliated Holder delivered to the Institutional Trustee and specifying the liquidation amount of its indirect holding of Capital Securities or Capital Securities, as the case may be, with respect to which such election is being made and the date of distribution on which such exchange shall occur, which distribution date shall be on or after the date of receipt by the Institutional Trustee of such election notice; and

(ii) shall be conditioned upon the Sponsor providing an instruction to the Institutional Trustee (A) to cancel the Capital Securities that are subject to the election described above, and (B) to the extent required, to reissue the Capital Securities which are not subject to such election and to authenticate a certificate representing the Capital Securities that are not subject to such election.

After the exchange, such Capital Securities will be canceled and will no longer be deemed to be outstanding and all rights of the Sponsor or its Affiliate(s) with respect to such Capital Securities will cease.

(b) Notwithstanding anything to the contrary in this Declaration, in the case of an exchange of Capital Securities (the “Exchanged Capital Securities”) for Debentures described in Section 6.11(a), the Institutional Trustee on behalf of the Trust on the date of such exchange shall exchange Debentures having a principal amount equal to a proportional amount of the aggregate liquidation amount of the outstanding Common Securities, based on the ratio of the aggregate liquidation amount of the Exchanged Capital Securities divided by the aggregate liquidation Amount of the Capital Securities outstanding immediately prior to such exchange, for such proportional amount of Common Securities held by the Sponsor (which contemporaneously shall be canceled and no longer be deemed to be outstanding); provided, that the Sponsor delivers or causes to be delivered to the Institutional Trustee or its designee the required amount of Common Securities to be exchanged by 10:00 A.M. New York time, on the date on which such exchange is to occur.”

ARTICLE II

Miscellaneous

Section 2.1. Effect of First Amendment. Upon the execution and delivery of this First Amendment by the Sponsor, the Administrators and the Trustee, the Declaration of Trust shall be amended in accordance herewith, and this First Amendment shall form a part of the Declaration of Trust for all purposes, and every Holder of Securities heretofore or hereafter authenticated and delivered under the Declaration of Trust shall be bound thereby.

Section 2.2. Declaration of Trust Remains in Full Force and Effect. Except as amended hereby, all provisions in the Declaration of Trust shall remain in full force and effect.

Section 2.3. Declaration of Trust and First Amendment Construed Together. This First Amendment is an amendment to and implementation of the Declaration of Trust, and the Declaration of Trust and this First Amendment shall henceforth be read and construed together.

Section 2.4. Confirmation and Preservation of Declaration of Trust. The Declaration of Trust, as amended by this First Amendment, is in all respects confirmed and preserved.

Section 2.5. Severability. In case any provision in this First Amendment shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 2.6. Benefits of First Amendment. Nothing in this First Amendment or the Securities, express or implied, shall give to any Person, other than the parties hereto and thereto and their successors hereunder and thereunder and the Holders of the Securities, any benefit of any legal or equitable right, remedy or claim under the Declaration of Trust, this First Amendment or the Securities.

Section 2.7. Successors. All agreements of the Sponsor in this First Amendment shall bind its successors except as provided in the Declaration of Trust. All agreements of the Administrators and the Trustee in this First Amendment shall bind their successors.

Section 2.8. Certain Duties and Responsibilities of the Administrators and the Trustee. In entering into this First Amendment, the Administrators and the Trustee shall be entitled to the benefit of every provision of the Declaration of Trust relating to the conduct or affecting the liability or affording protection to the Trustee, whether or not elsewhere herein so provided.

Section 2.9. Governing Law. This First Amendment and the rights of the parties hereunder shall be governed by and interpreted in accordance with, the laws of the State of Delaware and all rights and remedies shall be governed by the internal laws of the State of Delaware.

Section 2.10. Counterparts. This First Amendment may contain more than one counterpart of the signature page and this First Amendment may be executed by the affixing of the signature of each of the Administrators, the Trustee and the Sponsor to one of such counterpart signature pages. All of such counterpart signature pages shall be read as though one, and they shall have the same force and effect as though all of the signers had signed a single signature page.

Section 2.11. Headings. The Article and Section headings herein have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.

[Signatures appear on the following pages]

IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be duly executed as of the date first written above.

	Sponsor

	MAIDEN HOLDINGS NORTH AMERICA, LTD.

	By:	/s/ Paul Hawk
		Name: Paul Hawk
		Title:

	Administrator

	/s/ Arturo M. Raschbaum
	Name: Arturo M. Raschbaum

	Administrator

	/s/ John M. Marshaleck
	Name: John M. Marshaleck

	Administrator

	/s/ Karen L. Schmitt
	Name: Karen L. Schmitt

Signature Page of First Amendment

	Institutional Trustee

	WILMINGTON TRUST COMPANY, not in its individual capacity but solely as trustee

	By:	/s/ Michael H. Wass
		Name: Michael H. Wass
		Title: Financial Services Officer

	Delaware Trustee

	WILMINGTON TRUST COMPANY, not in its individual capacity but solely as trustee

	By:	/s/ Michael H. Wass
		Name: Michael H. Wass
		Title: Financial Services Officer

Signature Page of First Amendment

EXHIBIT 31.1

CERTIFICATION

I, Arturo M. Raschbaum, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Maiden Holdings, Ltd.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including any consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2011	/s/ ARTURO M. RASCHBAUM
	Arturo M. Raschbaum
	President and Chief Executive Officer
	(Principal Executive Officer)

EXHIBIT 31.2

CERTIFICATION

I, John Marshaleck, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Maiden Holdings, Ltd.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(a)

(b)

(c)

(d)

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: August 8, 2011	/s/ JOHN M. MARSHALECK
	John M. Marshaleck
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

Exhibit 32.1

CERTIFICATION

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, chapter 63 of title 18, United States Code), the undersigned officer of Maiden Holdings, Ltd. (the “Company”), hereby certifies, to such officer’s knowledge, that:

The Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 8, 2011	By:	/s/ ARTURO M. RASCHBAUM
		Name: Arturo M. Raschbaum
		Title: President and Chief Executive Officer

The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, chapter 63 of title 18, United States Code) and is not being filed as part of the Report.

Exhibit 32.2

CERTIFICATION

Date: August 8, 2011	By:	/s/ JOHN M. MARSHALECK
		Name: John M. Marshaleck
		Title: Chief Financial Officer