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 SeptemberJune 30, 2017

2020
o☐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
98-0570192
(State or other jurisdiction of
incorporation or organization)
98-0570192
(IRS Employer
Identification No.)
94 Pitts Bay Road 
131 Front Street, Hamilton, Pembroke
Bermuda
HM08
(Address of principal executive offices)
HM12
(Zip Code)

(441) (441) 298-4900
(Registrant's telephone number, including area code)


Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading symbol(s)Name of Each Exchange on Which Registered
Common Shares, par value $0.01 per shareMHLDNASDAQ Capital Market
Series A Preference Shares, par value $0.01 per shareMH.PANew York Stock Exchange
Series C Preference Shares, par value $0.01 per shareMH.PCNew York Stock Exchange
Series D Preference Shares, par value $0.01 per shareMH.PDNew York Stock Exchange
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. Yesx☒ No o☐

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

☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerx
☐ 
Accelerated filero
☐
Non-accelerated filero
☒ (Do not check if a smaller reporting company)
  
Smaller reporting companyo☒
  
Emerging growth companyo☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

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

☒
As of November 2, 2017,August 7, 2020, the number of shares of the Registrant's Common Stock ($.01 par value) outstanding was 84,624,829.84,718,837.





INDEX
  Page
PART I - Financial Information 
Item 1.
Financial Statements
 
 

 
 
Condensed Consolidated Balance Sheets as of SeptemberJune 30, 20172020 (unaudited) and December 31, 20162019 (audited)
3
   
 
Condensed Consolidated Statements of Income for the Three and NineSix Months Ended SeptemberJune 30, 20172020 and 20162019 (unaudited)
4
   
 
Condensed Consolidated Statements of Comprehensive Income for the Three and NineSix Months Ended SeptemberJune 30, 20172020 and 20162019 (unaudited)
5
   
 
Condensed Consolidated Statements of Changes in Shareholders' Equity for the NineThree and Six Months Ended SeptemberJune 30, 20172020 and 20162019 (unaudited)
6
   
 
Condensed Consolidated Statements of Cash Flows for the NineSix Months Ended SeptemberJune 30, 20172020 and 20162019 (unaudited)
7
   
 
Notes to Condensed Consolidated Financial Statements (unaudited)
8
   
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
35
   
Item 3.4.
QuantitativeControls and Qualitative Disclosures About Market RiskProcedures
64
Item 4.
Controls and Procedures
66
   
PART II - Other Information 
   
Item 1.
Legal Proceedings
65
Item 1A.
Risk Factors
65
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
66
Item 3.
Defaults Upon Senior Securities
66
Item 4.
Mine Safety Disclosures
66
Item 5.
Other Information
67
   
Item 1A.6.
Risk FactorsExhibits
67
   
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
67
Item 3.
Defaults Upon Senior Securities
67
Item 4.
Mine Safety Disclosures
67
Item 5.
Other Information
67
Item 6.
ExhibitsSignatures
68
Signatures
69




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)
 September 30,
2017		 December 31,
2016
 (Unaudited) (Audited) June 30,
2020		 December 31,
2019
ASSETS     (Unaudited) (Audited)
Investments:        
Fixed maturities, available-for-sale, at fair value (amortized cost 2017: $3,844,996; 2016: $4,005,642) $3,884,587
 $3,971,666
Fixed maturities, held to maturity, at amortized cost (fair value 2017: $1,152,106; 2016: $766,135) 1,118,368
 752,212
Other investments, at fair value (cost 2017: $5,640; 2016: $10,057) 7,041
 13,060
Fixed maturities, available-for-sale, at fair value (amortized cost 2020 - $1,422,298; 2019 - $1,813,426) $1,439,563
 $1,835,518
Other investments 36,054
 31,748
Total investments 5,009,996
 4,736,938
 1,475,617
 1,867,266
Cash and cash equivalents 182,677
 45,747
 56,583
 48,197
Restricted cash and cash equivalents 131,598
 103,788
 80,870
 59,081
Accrued investment income 35,547
 36,517
 11,868
 18,331
Reinsurance balances receivable, net (includes $150,985 and $132,056 from related parties in 2017 and 2016, respectively) 479,472
 410,166
Reinsurance recoverable on unpaid losses (includes $2,374 and $5,085 from related parties in 2017 and 2016, respectively) 140,629
 99,936
Reinsurance balances receivable, net (includes $923 from related parties in 2020) 13,268
 12,181
Reinsurance recoverable on unpaid losses 617,496
 623,422
Loan to related party 167,975
 167,975
 167,975
 167,975
Deferred commission and other acquisition expenses (includes $371,733 and $339,172 from related parties in 2017 and 2016, respectively) 469,617
 424,605
Goodwill and intangible assets, net 76,116
 77,715
Deferred commission and other acquisition expenses (includes $56,159 and $68,433 from related parties in 2020 and 2019, respectively) 63,533
 77,356
Funds withheld receivable (includes $668,188 and $632,305 from related parties in 2020 and 2019, respectively) 715,623
 684,441
Other assets 145,470
 148,912
 10,603
 9,946
Total assets $6,839,097
 $6,252,299
 $3,213,436
 $3,568,196
LIABILITIES        
Reserve for loss and loss adjustment expenses (includes $2,131,851 and $1,776,784 from related parties in 2017 and 2016, respectively) $3,365,011
 $2,896,496
Unearned premiums (includes $1,238,085 and $1,152,484 from related parties in 2017 and 2016, respectively) 1,601,069
 1,475,506
Accrued expenses and other liabilities 175,540
 161,334
Liability for investments purchased 21,658
 6,402
Reserve for loss and loss adjustment expenses (includes $1,920,745 and $2,272,418 from related parties in 2020 and 2019, respectively) $2,071,222
 $2,439,907
Unearned premiums (includes $156,869 and $189,797 from related parties in 2020 and 2019, respectively) 182,121
 220,269
Deferred gain on retroactive reinsurance 111,540
 112,950
Liability for securities purchased 44,996
 —
Accrued expenses and other liabilities (includes $8,137 and $20,049 from related parties in 2020 and 2019, respectively) 17,802
 32,444
Senior notes - principal amount 262,500
 362,500
 262,500
 262,500
Less: unamortized debt issuance costs 8,070
 11,091
 7,484
 7,592
Senior notes, net 254,430
 351,409
 255,016
 254,908
Total liabilities 5,417,708
 4,891,147
 2,682,697
 3,060,478
Commitments and Contingencies 

 

 


 


EQUITY        
Preference shares 465,000
 315,000
 465,000
 465,000
Common shares ($0.01 par value; 87,728,554 and 87,321,012 shares issued in 2017 and 2016, respectively; 84,624,829 and 86,271,109 shares outstanding in 2017 and 2016, respectively) 877
 873
Common shares ($0.01 par value; 89,732,851 and 88,161,638 shares issued in 2020 and 2019, respectively; 84,718,837 and 83,148,458 shares outstanding in 2020 and 2019, respectively) 897
 882
Additional paid-in capital 747,464
 749,256
 752,896
 751,327
Accumulated other comprehensive income 46,079
 14,997
 9,201
 17,836
Retained earnings 181,510
 285,662
Treasury shares, at cost (3,103,725 and 1,049,903 shares in 2017 and 2016, respectively) (19,903) (4,991)
Total Maiden shareholders’ equity 1,421,027
 1,360,797
Noncontrolling interests in subsidiaries 362
 355
Total equity 1,421,389
 1,361,152
Accumulated deficit (665,721) (695,794)
Treasury shares, at cost (5,014,014 and 5,013,180 shares in 2020 and 2019, respectively) (31,534) (31,533)
Total shareholders’ equity 530,739
 507,718
Total liabilities and equity $6,839,097
 $6,252,299
 $3,213,436
 $3,568,196
See accompanying notes to the unaudited Condensed Consolidated Financial Statements.


MAIDEN HOLDINGS, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(in thousands of U.S. dollars, except per share data)
 For the Three Months Ended September 30, For the Nine Months Ended September 30, For the Three Months Ended June 30,
For the Six Months Ended June 30,
 2017 2016 2017 2016 2020
2019
2020
2019
Revenues                
Gross premiums written $630,972
 $706,854
 $2,259,597
 $2,259,290
 $4,982
 $2,117
 $16,716
 $(559,022)
Net premiums written $617,330
 $690,653
 $2,201,950
 $2,133,911
 $4,090
 $(409) $14,462
 $(561,939)
Change in unearned premiums 36,536
 7,625
 (127,475) (182,060) 17,218
 134,395
 38,061
 879,027
Net premiums earned 653,866
 698,278
 2,074,475
 1,951,851
 21,308
 133,986
 52,523
 317,088
Other insurance revenue 2,488
 2,345
 7,816
 8,696
 250
 754
 658
 1,566
Net investment income 40,823
 35,666
 123,492
 107,291
 14,309
 31,122
 32,273
 63,144
Net realized gains on investment 5,859
 1,900
 8,316
 4,511
 8,875
 24,086
 19,913
 12,985
Total other-than-temporary impairment losses —
 —
 (1,506) —
Total revenues 703,036
 738,189
 2,214,099
 2,072,349
 44,742
 189,948
 103,861
 394,783
Expenses                
Net loss and loss adjustment expenses 535,968
 466,751
 1,545,157
 1,297,361
 11,008
 121,561
 32,094
 274,250
Commission and other acquisition expenses 193,462
 206,706
 625,530
 587,501
 8,154
 49,656
 20,127
 119,273
General and administrative expenses 19,492
 16,952
 52,252
 49,738
 9,261
 12,158
 17,811
 28,777
Interest and amortization expenses 4,829
 6,856
 18,430
 21,314
 4,830
 4,830
 9,661
 9,659
Accelerated amortization of senior note issuance cost —
 —
 2,809
 2,345
Amortization of intangible assets 533
 616
 1,599
 1,846
Foreign exchange losses (gains) 3,550
 (687) 12,193
 (6,474)
Foreign exchange and other losses (gains) 2,295
 (1,207) (5,902) (6,186)
Total expenses 757,834
 697,194
 2,257,970
 1,953,631
 35,548
 186,998
 73,791
 425,773
(Loss) income before income taxes (54,798) 40,995
 (43,871) 118,718
Less: income tax expense 256
 199
 1,017
 1,206
Net (loss) income (55,054) 40,796
 (44,888) 117,512
Add: net loss attributable to noncontrolling interests 3
 56
 34
 166
Net (loss) income attributable to Maiden (55,051) 40,852
 (44,854) 117,678
Dividends on preference shares (8,545) (9,023) (20,611) (27,723)
Net (loss) income attributable to Maiden common shareholders $(63,596) $31,829
 $(65,465) $89,955
Basic (loss) earnings per share attributable to Maiden common shareholders $(0.74) $0.42
 $(0.76) $1.20
Diluted (loss) earnings per share attributable to Maiden common shareholders $(0.74) $0.40
 $(0.76) $1.15
Dividends declared per common share $0.15
 $0.14
 $0.45
 $0.42
Income (loss) from continuing operations before income taxes 9,194
 2,950
 30,070
 (30,990)
Less: income tax benefit (18) (1,026) (3) (1,064)
Income (loss) from continuing operations 9,212
 3,976
 30,073
 (29,926)
Loss from discontinued operations, net of income tax —
 (19,389) —
 (22,123)
Net income (loss) $9,212
 $(15,413) $30,073
 $(52,049)
Basic and diluted earnings (loss) from continuing operations per share attributable to common shareholders $0.11
 $0.04
 $0.35
 $(0.36)
Basic and diluted loss from discontinued operations per share attributable to common shareholders —
 (0.23) —
 (0.27)
Basic and diluted earnings (loss) per share attributable to common shareholders $0.11
 $(0.19) $0.35
 $(0.63)
Weighted average number of common shares - basic 85,859,201
 75,993,451
 86,256,481
 74,625,839
 84,537,385
 83,058,123
 83,896,804
 83,008,888
Adjusted weighted average number of common shares and assumed conversions - diluted 85,859,201
 86,150,951
 86,256,481
 86,018,019
 84,537,385
 83,075,156
 83,896,804
 83,008,888


See accompanying notes to the unaudited Condensed Consolidated Financial Statements.



MAIDEN HOLDINGS, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
(in thousands of U.S. dollars)
  For the Three Months Ended September 30, For the Nine Months Ended September 30,
  2017 2016 2017 2016
Net (loss) income $(55,054) $40,796
 $(44,888) $117,512
Other comprehensive income        
Net unrealized holdings gains on available-for-sale fixed maturities arising during the period 25,019
 8,888
 68,798
 155,052
Adjustment for reclassification of net realized (gains) losses recognized in net income (3,650) (1,202) 1,123
 578
Foreign currency translation adjustment (10,828) (2,730) (38,803) (7,927)
Other comprehensive income, before tax 10,541
 4,956
 31,118
 147,703
Income tax (expense) benefit related to components of other comprehensive income (25) 11
 5
 (28)
Other comprehensive income, after tax 10,516
 4,967
 31,123
 147,675
Comprehensive (loss) income (44,538) 45,763
 (13,765) 265,187
Net loss attributable to noncontrolling interests 3
 56
 34
 166
Other comprehensive income attributable to noncontrolling interests (12) (17) (41) (32)
Comprehensive (income) loss attributable to noncontrolling interests (9) 39
 (7) 134
Comprehensive (loss) income attributable to Maiden $(44,547) $45,802
 $(13,772) $265,321

  For the Three Months Ended June 30, For the Six Months Ended June 30,
  2020 2019 2020 2019
Net income (loss) $9,212
 $(15,413) $30,073
 $(52,049)
Other comprehensive income (loss)        
Net unrealized holdings gains on fixed maturities arising during period 41,778
 43,018
 1,575
 92,048
Adjustment for reclassification of net realized gains recognized in net income (loss) (2,368) (15,415) (6,401) (2,927)
Foreign currency translation adjustment (3,820) (6,192) (3,823) (2,194)
Other comprehensive income (loss), before tax 35,590
 21,411
 (8,649) 86,927
Income tax (expense) benefit related to components of other comprehensive (loss) income (101) (39) 14
 (81)
Other comprehensive income (loss), after tax 35,489
 21,372
 (8,635) 86,846
Comprehensive income 44,701
 5,959
 21,438
 34,797
Comprehensive income attributable to noncontrolling interests —
 —
 —
 (78)
Comprehensive income attributable to Maiden $44,701
 $5,959
 $21,438
 $34,719
See accompanying notes to the unaudited Condensed Consolidated Financial Statements.


MAIDEN HOLDINGS, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited)
(in thousands of U.S. dollars)
For the Nine Months Ended September 30,
2017
2016
Preference shares    
 For the Three Months Ended June 30, For the Six Months Ended June 30,

2020 2019 2020
2019
Preference shares - Series A, C and D        
Beginning balance $315,000
 $480,000
 $465,000
 $465,000
 $465,000
 $465,000
Issuance of Preference Shares – Series D 150,000
 —
Mandatory conversion of Preference Shares - Series B —
 (165,000)
Ending balance 465,000
 315,000
 465,000
 465,000
 465,000
 465,000
Common shares            
Beginning balance 873
 747
 890
 881
 882
 879
Exercise of options and issuance of shares 4
 4
 7
 —
 15
 2
Shares issued on mandatory conversion of Preference Shares - Series B —
 121
Ending balance 877
 872
 897
 881
 897
 881
Additional paid-in capital            
Beginning balance 749,256
 579,178
 751,862
 750,670
 751,327
 749,418
Exercise of options and issuance of common shares 1,072
 662
 (7) —
 (15) (2)
Share-based compensation expense 2,194
 2,625
 1,041
 337
 1,584
 1,591
Issuance costs of Preference Shares - Series D (5,058) —
Mandatory conversion of Preference Shares - Series B —
 164,879
Others —
 (141)
Ending balance 747,464
 747,203
 752,896
 751,007
 752,896
 751,007
Accumulated other comprehensive income            
Beginning balance 14,997
 (23,767) (26,288) (220) 17,836
 (65,616)
Change in net unrealized gains on investment 69,926
 155,602
Change in net unrealized gains (losses) on investment 39,309
 27,564
 (4,812) 89,040
Foreign currency translation adjustment (38,844) (7,959) (3,820) (6,192) (3,823) (2,272)
Ending balance 46,079
 123,876
 9,201
 21,152
 9,201
 21,152
Retained earnings    
Accumulated deficit        
Beginning balance 285,662
 316,184
 (674,933) (600,527) (695,794) (563,891)
Net (loss) income attributable to Maiden (44,854) 117,678
Dividends on preference shares (20,611) (27,723)
Dividends on common shares (38,687) (32,799)
Net income (loss) 9,212
 (15,413) 30,073
 (52,049)
Ending balance 181,510
 373,340
 (665,721) (615,940) (665,721) (615,940)
Treasury shares            
Beginning balance (4,991) (4,521) (31,533) (31,515) (31,533) (31,515)
Shares repurchased (14,912) (470) (1) (13) (1) (13)
Ending balance (19,903) (4,991) (31,534) (31,528) (31,534) (31,528)
Noncontrolling interests in subsidiaries            
Beginning balance 355
 1,278
 —
 —
 —
 641
Change in minority interest —
 (54)
Dividend paid to noncontrolling interest —
 (31)
Net loss attributable to noncontrolling interests (34) (166)
Disposal of subsidiaries —
 —
 —
 (719)
Foreign currency translation adjustment 41
 32
 —
 —
 —
 78
Ending balance 362
 1,059
 —
 —
 —
 —
Total equity $1,421,389
 $1,556,359
Total shareholders' equity $530,739
 $590,572
 $530,739
 $590,572
See accompanying notes to the unaudited Condensed Consolidated Financial Statements.


MAIDEN HOLDINGS, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(in thousands of U.S. dollars)
For the Nine Months Ended September 30, 2017 2016
Cash flows from operating activities    
Net (loss) income $(44,888) $117,512
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation, amortization and share-based compensation 10,472
 16,841
Net realized gains on investment (8,316) (4,511)
Foreign exchange losses (gains) 12,193
 (6,474)
Changes in assets – (increase) decrease:
    
Reinsurance balances receivable, net (62,517) (154,091)
Reinsurance recoverable on unpaid losses (40,455) (26,281)
Accrued investment income 1,545
 (1,537)
Deferred commission and other acquisition expenses (43,171) (49,713)
Other assets (1,865) (32,027)
Changes in liabilities – increase (decrease):
    
Reserve for loss and loss adjustment expenses 419,660
 250,937
Unearned premiums 117,882
 204,752
Accrued expenses and other liabilities 14,239
 10,749
Net cash provided by operating activities 374,779
 326,157
Cash flows from investing activities:    
Purchases of investments:    
Purchases of fixed-maturities – available-for-sale (715,838) (732,001)
Purchases of other investments (986) (167)
Sale of investments:    
Proceeds from sales of fixed-maturities – available-for-sale 199,751
 101,923
Proceeds from maturities and calls of fixed maturities – available-for-sale 302,496
 442,490
Proceeds from maturities and calls of fixed maturities – held to maturity 20,744
 —
Proceeds from sale and redemption of other investments 11,119
 572
Increase in restricted cash and cash equivalents (27,040) (103,685)
Other, net (2,299) (521)
Net cash used in investing activities (212,053) (291,389)
Cash flows from financing activities:    
Preference shares, net of issuance costs 144,942
 —
Senior notes, net of issuance costs —
 106,424
Redemption of 2012 senior notes (100,000) —
Redemption of 2011 senior notes —
 (107,500)
Issuance of common shares 1,076
 666
Repurchase of common shares (14,912) (470)
Dividends paid – Maiden common shareholders (38,935) (31,062)
Dividends paid – preference shares (20,611) (27,723)
Net cash used in financing activities (28,440) (59,665)
Effect of exchange rate changes on foreign currency cash 2,644
 2,715
Net increase (decrease) in cash and cash equivalents 136,930
 (22,182)
Cash and cash equivalents, beginning of period 45,747
 89,641
Cash and cash equivalents, end of period $182,677
 $67,459
For the Six Months Ended June 30, 2020 2019
Cash flows from operating activities    
Net income (loss) $30,073
 $(52,049)
Less: net loss from discontinued operations —
 22,123
Adjustments to reconcile net income (loss) to net cash flows from operating activities:    
Depreciation, amortization and share-based compensation 4,004
 4,388
Net realized gains on investment (19,913) (12,985)
Total other-than-temporary impairment losses 1,506
 —
Foreign exchange and other gains (5,902) (6,186)
Changes in assets – (increase) decrease:
    
Reinsurance balances receivable, net (10,196) (1,191)
Reinsurance recoverable on unpaid losses 4,294
 (242)
Accrued investment income 6,413
 5,526
Deferred commission and other acquisition expenses 13,662
 136,686
Funds withheld receivable (13,416) (81,649)
Other assets (9,316) (7,910)
Changes in liabilities – increase (decrease):
    
Reserve for loss and loss adjustment expenses (361,082) (833)
Unearned premiums (37,634) (459,179)
Accrued expenses and other liabilities (21,645) (48,251)
Net cash used in continuing operations (419,152) (501,752)
Net cash used in discontinued operations —
 (1,905)
Net cash used in operating activities (419,152) (503,657)
Cash flows from investing activities:    
Purchases of fixed maturities  (245,331) (395,640)
Purchases of other investments (4,475) (5,290)
Proceeds from sales of fixed maturities  405,501
 709,615
Proceeds from maturities, paydowns and calls of fixed maturities 292,780
 324,480
Proceeds from sale and redemption of other investments 92
 580
Other, net (598) 3,276
Net cash provided by investing activities for continuing operations 447,969
 637,021
Net cash used in investing activities for discontinued operations —
 (6,113)
Net cash provided by investing activities 447,969
 630,908
Cash flows from financing activities:    
Repurchase of common shares (1) (13)
Net cash used in financing activities (1) (13)
Effect of exchange rate changes on foreign currency cash, restricted cash and equivalents 1,359
 (177)
Net increase in cash, restricted cash and cash equivalents 30,175
 127,061
Cash, restricted cash and cash equivalents, beginning of period 107,278
 337,102
Cash, restricted cash and cash equivalents, end of period 137,453
 464,163
Reconciliation of cash and restricted cash reported within Condensed Consolidated Balance Sheets:    
Cash and cash equivalents, end of period $56,583
 $82,465
Restricted cash and cash equivalents, end of period 80,870
 381,698
Total cash, restricted cash and cash equivalents, end of period $137,453
 $464,163
Non-cash investing activities    
Investments transferred out related to Partial Termination Amendment $—
 $280,670
Investments transferred out related to funds withheld arrangement with AmTrust —
 571,396
Investments transferred out related to discontinued operations —
 65,400
See accompanying notes to the unaudited Condensed Consolidated Financial Statements.
MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)




1.Basis of Presentation
The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of Maiden Holdings, Ltd. ("Maiden Holdings") and its subsidiaries (the "Company" or "Maiden"). They have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP" or "U.S.U.S. GAAP") for interim financial information 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 U.S. GAAP for complete financial statements. All significant inter-companyintercompany transactions and accounts have been eliminated.
These interim unaudited Condensed 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 U.S. 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, 2016.2019. Certain reclassificationsprior year comparatives have been made for 2016reclassified to conform to the 2017 presentation and havecurrent year presentation. The effect of these reclassifications had no impact on consolidatedpreviously reported shareholders' equity or net incomeloss.
Strategic Review
Since 2018, the Company has engaged in a series of strategic measures that have dramatically reduced the regulatory capital required to operate our business, materially strengthened our solvency ratios, re-domiciled Maiden Reinsurance Ltd. ("Maiden Reinsurance") to Vermont in the U.S. and totalceased active reinsurance underwriting. During that time, we significantly increased our estimate of ultimate losses and loss reserves while purchasing reinsurance protection against further loss reserve volatility and as a result, have improved the ultimate economic value of the Company. We believe these measures have given the Company the ability to more flexibly allocate capital to those activities most likely to produce the greatest returns for shareholders.
The measures we ultimately have taken were initiated in early 2018, when our Board of Directors initiated a review of strategic alternatives ("Strategic Review") to evaluate ways to increase shareholder value after a period of continuing higher than targeted combined ratios and lower returns on equity previously reported.than expected.
2. Significant Accounting Policies
There have been no material changesAs part of the Strategic Review, a series of transactions were entered into including: (1) completed the sale of Maiden Reinsurance North America, Inc. ("Maiden US") on December 27, 2018; (2) Maiden Reinsurance's shareholders, Maiden Holdings and Maiden Holdings North America, Ltd. ("Maiden NA"), made capital injections of $125,000 on December 31, 2018 and $70,000 on January 18, 2019 to our significant accounting policies asMaiden Reinsurance from the sale proceeds of Maiden US; (3) entered into a partial termination amendment ("Partial Termination Amendment") with AmTrust Financial Services, Inc. ("AmTrust") effective January 1, 2019 which amended the quota share reinsurance agreement (“AmTrust Quota Share”) between Maiden Reinsurance and AmTrust’s wholly owned subsidiary AmTrust International Insurance, Ltd. (“AII”) (as more fully described in our"Note 10 - Related Party Transactions"); (4) entered into amendments which terminated the AmTrust Quota Share and the European hospital liability Quota Share Reinsurance Contract (“European Hospital Liability Quota Share”) with AmTrust’s wholly owned subsidiaries AmTrust Europe Limited ("AEL") and AmTrust International Underwriters DAC ("AIU DAC") effective January 1, 2019 (these transactions are broadly referred to herein as the "Final AmTrust QS Terminations"); (5) entered into the Loss Portfolio Transfer and Adverse Development Cover Agreement ("LPT/ADC Agreement") with Enstar Group Limited ("Enstar") pursuant to the revised Master Transaction Agreement entered into on March 1, 2019; and (6) entered into a Commutation and Release Agreement with AmTrust to commute certain workers' compensation business with AII as of January 1, 2019.
Please see 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, 20162019 for further details on the above transactions.
Discontinued Operations
The Company made the strategic decision to divest its U.S. treaty reinsurance operations through the sale of Maiden US which was completed on December 27, 2018. Except as explicitly described as discontinued operations, and unless otherwise noted, all discussions and amounts presented herein relate to the Company's continuing operations except for the following:net income (loss).
Recently Adopted Accounting Standards UpdatesRe-domestication of Maiden Reinsurance
Improvements to Employee Share-Based Payment Accounting
InEffective March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2016-09 guidance that outlines changes for certain aspects of share-based payments to employees, such as accounting for forfeitures, which applies16, 2020, we re-domesticated our principal operating subsidiary, Maiden Reinsurance, to the Company. Under the new guidance, the entities can elect to either estimate the numberState of awards that are expected to vest or account for forfeitures when they occur. The guidance is effective for public business entities for fiscal year beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted for all entities, in any annual or interim period for which financial statements haven't been issued or made available for issuance, but all of the guidance must be adoptedVermont in the same period. Based onUnited States, having made the Company's history, forfeituresnecessary filings in both Vermont and Bermuda in the fourth quarter of 2019 and first quarter of 2020. Maiden Reinsurance is now subject to the statutes and regulations of Vermont in the ordinary course of business. We have never been material.determined that re-domesticating Maiden Reinsurance to Vermont enables us to better align our capital and resources with our liabilities, which originate mostly in the United States, resulting in a more efficient structure. The re-domestication, in combination with the transactions completed pursuant to the Strategic Review, will continue to strengthen the Company’s capital position and solvency ratios. While the Vermont Department of Financial Regulation ("Vermont DFR") will be the group supervisor for the Company, will account for forfeitures as they occur. The adoption of this guidancethe re-domestication did not have a material impact on the Company's Condensed Consolidated Financial Statements. There were no forfeitures for the three and nine months ended September 30, 2017.
Simplified Accounting for Goodwill Impairment
In February 2017, the FASB issued ASU 2017-04 guidance that simplifies the accounting for goodwill impairment for all entities by requiring impairment charges to be based on Step 1 of the two-step impairment test under ASC 350 Intangibles - Goodwill and Other. Under the new guidance, if the carrying value of a reporting unit exceeds its fair value, the Company will record an impairment charge based on that difference. The impairment charge will be limitedapply to the amountparent holding company which remains a Bermuda-based holding company. Securities issued by Maiden Holdings were not affected by the re-domestication of goodwill allocatedMaiden Reinsurance to that reporting unit. The standard eliminates the requirement to calculate goodwill impairment under Step 2, which calculates any impairment charge by comparing the implied fair value of goodwillVermont. Concurrent with its carrying amount. The Update does not changere-domestication to Vermont on March 16, 2020, Maiden Holdings contributed as capital the guidance on completing Step 1remaining 65% of the goodwill impairment test. The standard has tiered effective dates, startingits ownership in 2020 for calendar public business entities that meet the definitionMaiden Reinsurance to Maiden NA. Maiden NA now owns 100% of an SEC filer. Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017.
Recently Issued Accounting Standards Not Yet Adopted
Premium Amortization on Purchased Callable Debt Securities
In March 2017, the FASB issued ASU 2017-08 to amend the amortization period for certain purchased callable debt securities held at a premium. Current GAAP excludes certain callable debt securities from consideration of early repayment of principal even if the holder is certain that the call will be exercised. As a result, upon the exercise of a call on a callable debt security held at a premium, the unamortized premium is recorded as a loss in earnings.Maiden Reinsurance.
MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)


2. Significant Accounting Policies1.Basis of Presentation (continued)
Segments
As a result of the strategic decision to divest all of the Company's U.S. treaty reinsurance operations noted above, the Company revised the composition of its reportable segments. As described in more detail under “Note 3. Segment Information”, the reportable segments include: (i) Diversified Reinsurance which consists of a portfolio of property and casualty reinsurance business focusing on regional and specialty property and casualty insurance companies located primarily in Europe; and (ii) AmTrust Reinsurance which includes all business ceded to Maiden Reinsurance from subsidiaries of AmTrust. In addition to these reportable segments, the results of operations of the former National General Holdings Corporation Quota Share ("NGHC Quota Share") segment, which was commuted in November 2019, was previously included in the "Other" category.

COVID-19 Pandemic
The amendments in ASU 2017-08 affect all entities that hold investments in callable debt securities that have an amortized cost basis in excesscontinuing COVID-19 global pandemic has caused significant disruption to the economy and financial markets globally, and the full extent of the amount that is repayablepotential impacts of COVID-19 are not yet known. Circumstances caused by the issuer at the earliest call date. The amendments shorten the amortization period for certain callable debt securities held at a premiumCOVID-19 pandemic are complex, uncertain and require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. For public business entities, the amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity should apply the amendments on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Additionally, in the period of adoption, an entity should provide disclosures about a change in accounting principle.
The Company holds a number of securities with callable features on the Condensed Consolidated Balance Sheet and this includes certain securities that have been purchased at a premium that is being amortized to the associated security's maturity date. The Company is currently evaluating the impact of this guidance on the Company'srapidly evolving. Our results of operations, financial positioncondition, and liquidity and capital resources may have been adversely impacted by the COVID-19 pandemic, and the future impact of the pandemic on our financial condition or liquidity atresults of operations is difficult to predict.
As described herein, the dateCompany is not currently engaged in active reinsurance underwriting and is running off the remaining unearned exposures it has reinsured. Maiden Global Holdings, Ltd.’s business development teams partner with automobile manufacturers, dealer associations and local primary insurers to design and implement point of adoption.
Scope of Modification Accounting
In May 2017, the FASB issued ASU 2017-09 to amend the guidance aboutsale insurance programs which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. An entity should accountgenerate revenue for the effectsauto manufacturer and insurance premiums for the primary insurer ("IIS unit"). The Company's IIS unit does write limited primary insurance coverages that could be exposed to COVID-19 claims.  While we assess our exposure to COVID-19 insurance and reinsurance claims on our existing insurance exposures and remaining reinsurance exposures as limited and immaterial, given the uncertainty surrounding the COVID-19 pandemic and its impact on the insurance industry, our preliminary estimates of losses and loss adjustment expenses and estimates of reinsurance recoverable arising from the COVID-19 pandemic may materially change. Maiden Reinsurance has not received any COVID-19 claims to date but our companies within our IIS unit have received a modification unless alllimited number of claims related to those coverages which it deems as immaterial. Unanticipated issues relating to claims and coverage may emerge, which could adversely affect our business by increasing the following are met:scope of coverage beyond our intent and/or increasing the frequency and severity of claims.
1.The fair value (or calculated value Company's investment portfolio may be adversely impacted by unfavorable market conditions caused by the COVID-19 pandemic, and the Company and its reinsurance subsidiaries may need additional capital to maintain compliance with regulatory capital requirements and/or intrinsic value, if such an alternative measurement method is used) of the modified award is the same as the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the original award immediately before the original award is modified. If the modification does not affect any of the inputs to the valuation technique that the entity uses to value the award, the entity is notbe required to estimatepost additional collateral under existing reinsurance arrangements, which could reduce our liquidity. In addition, the value immediately beforeCompany may experience continued volatility in its results of operations which could negatively impact its financial condition and after the modification;
2.The vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and
3.The classification of the modified award as an equity instrument orcreate a liability instrument is the same as the classification of the original award immediately before the original award is modified.
The current disclosure requirements in Topic 718 apply regardless of whether an entity is required to apply modification accounting under the amendments in this Update.
The amendments in this Update are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period, for (1) public business entities for reporting periods for which financial statements have not yet been issued and (2) all other entities for reporting periods for which financial statements have not yet been made available for issuance. The amendments in this Update should be applied prospectively to an award modified on or after the adoption date.
The Company currently has a number of share based payment awards as disclosedreduction in the Annual Report on Form 10-K for the year ended December 31, 2016, however, we do not anticipate any modifications to the termsamount of available distribution or conditions at this time. The impact of this guidance on the Company's Condensed Consolidated Financial Statements will be evaluated once ASU-2017-09 is adopted and when the Company makes any modification to any ofdividend capacity from its current shared based payment awards.regulated reinsurance subsidiaries, which would also reduce liquidity.


MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)


2. Significant Accounting Policies
There have been no material changes to the significant accounting policies as described in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 except for the following:
Recently Adopted Accounting Standards Updates
Changes to the Disclosure Requirements for Fair Value Measurement
In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13 ("ASU 2018-13") for changes to the disclosure framework related to Topic 820 which amends the disclosure requirements for fair value measurement. The following disclosure requirements were removed from Topic 820: (i) amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, (ii) policy for timing of transfers between levels, and (iii) valuation processes for Level 3 fair value measurements. The amendments clarify that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date. The following disclosure requirements were added to Topic 820: (i) changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period; and (ii) range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, an entity may disclose other quantitative information (such as the median or arithmetic average) in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements.
The amendments in ASU 2018-13 are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted upon issuance of ASU 2018-13. An entity is permitted to early adopt any removed or modified disclosures upon issuance of ASU 2018-13 and delay adoption of the additional disclosures until their effective date. These amendments only impact disclosures made in "Note 5. Fair Value Measurements" therefore, the adoption of this standard on January 1, 2020 did not impact the Company’s consolidated balance sheets, results of operations or cash flows.
Recently Issued Accounting Standards Not Yet Adopted
Accounting for Measurement of Credit Losses on Financial Instruments
In June 2016, the FASB issued ASU 2016-13 "Financial Instruments: Credit Losses (Topic 326)" replacing the "incurred loss" impairment methodology with an approach based on "expected losses" to estimate credit losses on certain types of financial instruments and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The guidance requires financial assets to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the cost of the financial asset to present the net carrying value at the amount expected to be collected on the financial asset. ASU 2016-13 also modified the accounting for available-for-sale ("AFS") debt securities, which must be individually assessed for credit losses when fair value is less than the amortized cost basis, in accordance with Subtopic 326-30, Financial Instruments: Credit Losses Available-for-Sale Debt Securities. Credit losses relating to AFS debt securities will be recorded through an allowance for credit losses rather than under the current other-than-temporarily impaired ("OTTI") methodology.
In April 2019, the FASB issued ASU 2019-04 for targeted improvements related to ASU 2016-13 which clarify that an entity should include all expected recoveries in its estimate of the allowance for credit losses. In addition, for collateral dependent financial assets, the amendments mandate that an allowance for credit losses that is added to the amortized cost basis of the financial asset should not exceed amounts previously written off. It also clarifies FASB’s intent to include all reinsurance recoverables within the scope of Topic 944 to be within the scope of Subtopic 326-20, regardless of the measurement basis of those recoverables. The Company's reinsurance balances receivable and reinsurance recoverable on unpaid losses are its most significant financial assets within the scope of ASU 2016-13.
The guidance is effective for public business entities, excluding entities eligible to be smaller reporting companies ("SRCs") as defined by the SEC, for annual periods beginning after December 15, 2019, and interim periods therein. The guidance is effective for all other entities, including public entities eligible to be SRCs, for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. As of December 31, 2019, the Company qualified for SRC status, as determined on the last business day of its most recent second quarter, and is thus eligible to follow the reporting deadlines and effective dates applicable to SRCs. Therefore Topic 326 will not be effective until the 2023 fiscal year. The Company continues to evaluate the impact of this guidance on its results of operations, financial condition and liquidity.
MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)

3. Segment Information
The Company currently has two2 reportable segments: Diversified Reinsurance and AmTrust Reinsurance. Our Diversified Reinsurance segment consists of a portfolio of predominantly property and casualty reinsurance business focusing on regional and specialty property and casualty insurance companies located primarily in the U.S. and Europe. Our AmTrust Reinsurance segment includes all business ceded to our wholly owned subsidiary, Maiden Reinsurance Ltd. ("Maiden Bermuda") fromby AmTrust, Financial Services, Inc. ("AmTrust"), primarily the AmTrust Quota Share and the European Hospital Liability Quota Share.Share, which are in run-off effective January 1, 2019. In addition to our reportable segments, the results of operations of the former National General Holdings CorporationNGHC Quota Share ("NGHC Quota Share") segment which was commuted in November 2019 and the remnants of theour retroceded U.S. excess and surplus ("E&S")treaty business have been included in the "Other" category. Please refer to "Note 8.10. Related Party Transactions" for additional information.
The Company evaluates segment performance based on segment profit separately from the results of our investment portfolio. General and administrative expenses are allocated to the segments on an actual basis except salaries and benefits where management’s judgment is applied. The Company does not allocateapplied; however general corporate expenses are not allocated to the segments. In determining total assets by reportable segment, the Company identifies those assets that are attributable to a particular segment such as reinsurance balances receivable, reinsurance recoverable on unpaid losses, deferred commission and other acquisition expenses, loans, goodwillfunds withheld receivable, loan to related party and intangible assets, restricted cash and cash equivalents and investments and unearned reinsurance premiums ceded, funds withheld receivable and reinsurance recoverable on paid losses (presented as part of other assets in the Condensed Consolidated Balance Sheet).investments. All remaining assets are allocated to Corporate.
As discussed in "Note 1. Basis of Presentation" and "Note 10. Related Party Transactions", the Partial Termination Amendment and the termination of the remaining business with AmTrust effective January 1, 2019 resulted in a significant reduction in gross premiums written. This was due to the return of unearned premium on certain lines covered by the Partial Termination Amendment, with no new business written since 2018 as a result of the termination of the AmTrust Quota Share and the European Hospital Liability Quota Share. The following tables summarize our reporting segment'sthe underwriting results of our reportable segments and the reconciliation of our reportable segments and Other category's underwriting results to our consolidated net income:income (loss) from continuing operations:
For the Three Months Ended September 30, 2017 Diversified Reinsurance AmTrust Reinsurance Other Total
For the Three Months Ended June 30, 2020 Diversified Reinsurance AmTrust Reinsurance Total
Gross premiums written $210,953
 $420,019
 $—
 $630,972
 $9,687
 $(4,705) $4,982
Net premiums written $207,137
 $410,193
 $—
 $617,330
 $8,553
 $(4,463) $4,090
Net premiums earned $217,513
 $436,353
 $—
 $653,866
 $11,527
 $9,781
 $21,308
Other insurance revenue 2,488
 —
 —
 2,488
 250
 —
 250
Net loss and loss adjustment expense ("loss and LAE") (172,273) (355,030) (8,665) (535,968)
Net loss and loss adjustment expenses ("loss and LAE") (6,038) (4,970) (11,008)
Commission and other acquisition expenses (54,810) (138,650) (2) (193,462) (4,374) (3,780) (8,154)
General and administrative expenses (8,595) (771) —
 (9,366) (1,746) (667) (2,413)
Underwriting loss $(15,677) $(58,098) $(8,667) (82,442)
Reconciliation to net loss        
Net investment income and net realized gains on investment       46,682
Underwriting (loss) income $(381) $364
 (17)
Reconciliation to net income from continuing operations      
Net investment income and realized gains on investment     23,184
Interest and amortization expenses       (4,829)     (4,830)
Amortization of intangible assets       (533)
Foreign exchange losses       (3,550)
Foreign exchange and other losses, net     (2,295)
Other general and administrative expenses       (10,126)     (6,848)
Income tax expense       (256)
Net loss       $(55,054)
Income tax benefit     18
Net income from continuing operations     $9,212
              
Net loss and LAE ratio(1)
 78.3% 81.4%   81.6% 51.3% 50.8% 51.0%
Commission and other acquisition expense ratio(2)
 24.9% 31.7%   29.5% 37.1% 38.6% 37.8%
General and administrative expense ratio(3)
 3.9% 0.2%   3.0% 14.8% 6.9% 43.0%
Expense ratio(4)
 28.8% 31.9%   32.5% 51.9% 45.5% 80.8%
Combined ratio(5)
 107.1% 113.3%   114.1% 103.2% 96.3% 131.8%
MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)


3. Segment Information (continued)
For the Three Months Ended September 30, 2016 Diversified Reinsurance AmTrust Reinsurance Other Total
For the Three Months Ended June 30, 2019 Diversified Reinsurance AmTrust Reinsurance Other Total
Gross premiums written $186,750
 $520,104
 $—
 $706,854
 $11,244
 $(9,127) $—
 $2,117
Net premiums written $179,092
 $511,561
 $—
 $690,653
 $8,718
 $(9,127) $—
 $(409)
Net premiums earned $175,141
 $523,137
 $—
 $698,278
 $22,472
 $111,514
 $—
 $133,986
Other insurance revenue 2,345
 —
 —
 2,345
 754
 —
 —
 754
Net loss and LAE (132,396) (334,310) (45) (466,751) (12,497) (109,088) 24
 (121,561)
Commission and other acquisition expenses (39,868) (166,836) (2) (206,706) (8,147) (41,509) —
 (49,656)
General and administrative expenses (9,038) (759) —
 (9,797) (2,092) (562) —
 (2,654)
Underwriting (loss) income $(3,816) $21,232
 $(47) 17,369
Reconciliation to net income        
Net investment income and net realized gains on investment       37,566
Underwriting income (loss) $490
 $(39,645) $24
 (39,131)
Reconciliation to net income from continuing operations        
Net investment income and realized gains on investment       55,208
Interest and amortization expenses       (6,856)       (4,830)
Amortization of intangible assets       (616)
Foreign exchange gains       687
Foreign exchange and other gains       1,207
Other general and administrative expenses       (7,155)       (9,504)
Income tax expense       (199)
Net income       $40,796
Income tax benefit       1,026
Net income from continuing operations       $3,976
                
Net loss and LAE ratio(1)
 74.6% 63.9%   66.6% 53.8% 97.8%   90.2%
Commission and other acquisition expense ratio(2)
 22.5% 31.9%   29.5% 35.1% 37.2%   36.9%
General and administrative expense ratio(3)
 5.1% 0.1%   2.4% 9.0% 0.5%   9.0%
Expense ratio(4)
 27.6% 32.0%   31.9% 44.1% 37.7%   45.9%
Combined ratio(5)
 102.2% 95.9%   98.5% 97.9% 135.5%   136.1%










MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)


3. Segment Information (continued)
For the Nine Months Ended September 30, 2017 Diversified Reinsurance AmTrust Reinsurance Other Total
For the Six Months Ended June 30, 2020 Diversified Reinsurance AmTrust Reinsurance Total
Gross premiums written $683,839
 $1,575,677
 $81
 $2,259,597
 $21,421
 $(4,705) $16,716
Net premiums written $671,880
 $1,529,980
 $90
 $2,201,950
 $18,925
 $(4,463) $14,462
Net premiums earned $623,574
 $1,450,811
 $90
 $2,074,475
 $24,058
 $28,465
 $52,523
Other insurance revenue 7,816
 —
 —
 7,816
 658
 —
 658
Net loss and LAE (487,759) (1,047,222) (10,176) (1,545,157) (13,079) (19,015) (32,094)
Commission and other acquisition expenses (159,744) (465,789) 3
 (625,530) (9,353) (10,774) (20,127)
General and administrative expenses (25,819) (2,240) —
 (28,059) (3,359) (1,311) (4,670)
Underwriting loss $(41,932) $(64,440) $(10,083) (116,455) $(1,075) $(2,635) (3,710)
Reconciliation to net loss        
Net investment income and net realized gains on investment       131,808
Reconciliation to net income from continuing operations      
Net investment income and realized gains on investment     52,186
Total other-than-temporary impairment losses     (1,506)
Interest and amortization expenses       (18,430)     (9,661)
Accelerated amortization of senior note issuance cost       (2,809)
Amortization of intangible assets       (1,599)
Foreign exchange losses       (12,193)
Foreign exchange and other gains     5,902
Other general and administrative expenses       (24,193)     (13,141)
Income tax expense       (1,017)
Net loss       $(44,888)
Income tax benefit     3
Net income from continuing operations     $30,073
              
Net loss and LAE ratio(1)
 77.2% 72.2%   74.2% 52.9% 66.8% 60.4%
Commission and other acquisition expense ratio(2)
 25.3% 32.1%   30.0% 37.8% 37.8% 37.8%
General and administrative expense ratio(3)
 4.1% 0.1%   2.5% 13.6% 4.7% 33.5%
Expense ratio(4)
 29.4% 32.2%   32.5% 51.4% 42.5% 71.3%
Combined ratio(5)
 106.6% 104.4%   106.7% 104.3% 109.3% 131.7%
MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)


3. Segment Information (continued)
For the Six Months Ended June 30, 2019 Diversified Reinsurance AmTrust Reinsurance Other Total
Gross premiums written $26,582
 $(585,604) $—
 $(559,022)
Net premiums written $23,665
 $(585,604) $—
 $(561,939)
Net premiums earned $47,764
 $269,324
 $—
 $317,088
Other insurance revenue 1,566
 —
 —
 1,566
Net loss and LAE (26,888) (247,158) (204) (274,250)
Commission and other acquisition expenses (17,408) (101,865) —
 (119,273)
General and administrative expenses (5,123) (1,828) —
 (6,951)
Underwriting loss $(89) $(81,527) $(204) (81,820)
Reconciliation to net loss from continuing operations        
Net investment income and realized gains on investment       76,129
Interest and amortization expenses       (9,659)
Foreign exchange and other gains       6,186
Other general and administrative expenses       (21,826)
Income tax benefit       1,064
Net loss from continuing operations       $(29,926)
         
Net loss and LAE ratio(1)
 54.5% 91.8%   86.1%
Commission and other acquisition expense ratio(2)
 35.3% 37.8%   37.4%
General and administrative expense ratio(3)
 10.4% 0.7%   9.0%
Expense ratio(4)
 45.7% 38.5%   46.4%
Combined ratio(5)
 100.2% 130.3%   132.5%

For the Nine Months Ended September 30, 2016 Diversified Reinsurance AmTrust Reinsurance Other Total
Gross premiums written $667,388
 $1,591,902
 $—
 $2,259,290
Net premiums written $626,522
 $1,507,389
 $—
 $2,133,911
Net premiums earned $538,152
 $1,413,699
 $—
 $1,951,851
Other insurance revenue 8,696
 —
 —
 8,696
Net loss and LAE (395,718) (898,703) (2,940) (1,297,361)
Commission and other acquisition expenses (139,895) (447,604) (2) (587,501)
General and administrative expenses (26,717) (2,308) —
 (29,025)
Underwriting (loss) income $(15,482) $65,084
 $(2,942) 46,660
Reconciliation to net income        
Net investment income and net realized gains on investment       111,802
Interest and amortization expenses       (21,314)
Accelerated amortization of senior note issuance cost       (2,345)
Amortization of intangible assets       (1,846)
Foreign exchange gains       6,474
Other general and administrative expenses       (20,713)
Income tax expense       (1,206)
Net income       $117,512
         
Net loss and LAE ratio(1)
 72.4% 63.5%   66.2%
Commission and other acquisition expense ratio(2)
 25.6% 31.7%   30.0%
General and administrative expense ratio(3)
 4.8% 0.2%   2.5%
Expense ratio(4)
 30.4% 31.9%   32.5%
Combined ratio(5)
 102.8% 95.4%   98.7%
(1)Calculated by dividing net loss and LAE by the sum of net premiums earned and other insurance revenue.
(2)Calculated by dividing commission and other acquisition expenses by the sum of net premiums earned and other insurance revenue.
(3)Calculated by dividing general and administrative expenses by the sum of net premiums earned and other insurance revenue.
(4)Calculated by adding together the commission and other acquisition expense ratio and general and administrative expense ratio.
(5)Calculated by adding together net loss and LAE ratio and the expense ratio.

The following tables summarize the financial position of ourthe Company's reportable segments including the reconciliation to ourthe Company's consolidated total assets at SeptemberJune 30, 20172020 and December 31, 2016:2019:
June 30, 2020 Diversified Reinsurance AmTrust Reinsurance Total
Total assets - reportable segments $157,302
 $2,570,738
 $2,728,040
Corporate assets —
 —
 485,396
Total Assets $157,302
 $2,570,738
 $3,213,436
       
December 31, 2019 Diversified Reinsurance AmTrust Reinsurance Total
Total assets - reportable segments $167,845
 $2,843,802
 $3,011,647
Corporate assets —
 —
 556,549
Total Assets $167,845
 $2,843,802
 $3,568,196
September 30, 2017 Diversified Reinsurance AmTrust Reinsurance Total
Total assets - reportable segments $1,898,036
 $4,362,008
 $6,260,044
Corporate assets —
 —
 579,053
Total Assets $1,898,036
 $4,362,008
 $6,839,097
       
December 31, 2016 Diversified Reinsurance AmTrust Reinsurance Total
Total assets - reportable segments $1,787,320
 $3,900,067
 $5,687,387
Corporate assets —
 —
 564,912
Total Assets $1,787,320
 $3,900,067
 $6,252,299

MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)


3. Segment Information (continued)
The following table setstables set forth financial information relating to net premiums written by major line of business and reportable segment for the three and ninesix months ended SeptemberJune 30, 20172020 and 2016:2019:
For the Three Months Ended September 30, 2017 2016
 Total % of Total Total % of Total
For the Three Months Ended June 30, 2020 2019
Net premiums written         Total Total
Diversified Reinsurance            
Property $37,962
 6.2% $30,606
 4.4%
Casualty 129,726
 21.0% 115,360
 16.7%
Accident and Health 16,946
 2.7% 14,845
 2.2%
International 22,503
 3.7% 18,281
 2.6% $8,498
 $8,736
Other 55
 (18)
Total Diversified Reinsurance 207,137
 33.6% 179,092
 25.9% 8,553
 8,718
AmTrust Reinsurance            
Small Commercial Business 295,499
 47.9% 314,677
 45.6% (6,394) 5,515
Specialty Program 63,816
 10.3% 98,895
 14.3% 477
 (16,031)
Specialty Risk and Extended Warranty 50,878
 8.2% 97,989
 14.2% 1,454
 1,389
Total AmTrust Reinsurance 410,193
 66.4% 511,561
 74.1% (4,463) (9,127)
Total Net Premiums Written $617,330
 100.0% $690,653
 100.0% $4,090
 $(409)
For the Nine Months Ended September 30, 2017 2016
 Total % of Total Total % of Total
For the Six Months Ended June 30, 2020 2019
Net premiums written         Total Total
Diversified Reinsurance            
Property $132,398
 6.0% $123,991
 5.8%
Casualty 391,503
 17.8% 365,332
 17.1%
Accident and Health 74,504
 3.4% 68,140
 3.2%
International 73,475
 3.3% 69,059
 3.2% $18,870
 $23,683
Other 55
 (18)
Total Diversified Reinsurance 671,880
 30.5% 626,522
 29.3% 18,925
 23,665
AmTrust Reinsurance            
Small Commercial Business 1,028,905
 46.7% 983,601
 46.1% (6,394) (337,166)
Specialty Program 255,767
 11.6% 268,193
 12.6% 477
 (28,639)
Specialty Risk and Extended Warranty 245,308
 11.2% 255,595
 12.0% 1,454
 (219,799)
Total AmTrust Reinsurance 1,529,980
 69.5% 1,507,389
 70.7% (4,463) (585,604)
Other 90
 —% —
 —%
Total Net Premiums Written $2,201,950
 100.0% $2,133,911
 100.0% $14,462
 $(561,939)
The following tables set forth financial information relating to net premiums earned by major line of business and reportable segment for the three and six months ended June 30, 2020 and 2019:
For the Three Months Ended June 30, 2020 2019
Net premiums earned Total% of Total Total % of Total
Diversified Reinsurance        
International $11,472
 53.8 % $22,490
 16.8 %
Other 55
 0.3 % (18) — %
Total Diversified Reinsurance 11,527
 54.1 % 22,472
 16.8 %
AmTrust Reinsurance        
Small Commercial Business (7,112) (33.4)% 23,283
 17.4 %
Specialty Program 426
 2.0 % 30,326
 22.6 %
Specialty Risk and Extended Warranty 16,467
 77.3 % 57,905
 43.2 %
Total AmTrust Reinsurance 9,781
 45.9 % 111,514
 83.2 %
Total Net Premiums Earned $21,308
 100.0 % $133,986
 100.0 %
MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)


3. Segment Information (continued)
The following table sets forth financial information relating to net premiums earned by major line of business and reportable segment for the three and nine months ended September 30, 2017 and 2016:
For the Six Months Ended June 30, 2020 2019
Net premiums earned Total% of Total Total % of Total
Diversified Reinsurance        
International $24,003
 45.7 % $47,782
 15.1 %
Other 55
 0.1 % (18) — %
Total Diversified Reinsurance 24,058
 45.8 % 47,764
 15.1 %
AmTrust Reinsurance        
Small Commercial Business (6,173) (11.8)% 62,738
 19.8 %
Specialty Program 501
 1.0 % 106,547
 33.6 %
Specialty Risk and Extended Warranty 34,137
 65.0 % 100,039
 31.5 %
Total AmTrust Reinsurance 28,465
 54.2 % 269,324
 84.9 %
Total Net Premiums Earned $52,523
 100.0 % $317,088
 100.0 %

For the Three Months Ended September 30, 2017 2016
  Total % of Total Total % of Total
Net premiums earned        
Diversified Reinsurance        
Property $43,362
 6.6% $29,921
 4.3%
Casualty 130,428
 20.0% 105,893
 15.2%
Accident and Health 22,780
 3.5% 18,436
 2.6%
International 20,943
 3.2% 20,891
 3.0%
Total Diversified Reinsurance 217,513
 33.3% 175,141
 25.1%
AmTrust Reinsurance        
Small Commercial Business 314,773
 48.1% 320,596
 45.9%
Specialty Program 59,143
 9.1% 89,856
 12.9%
Specialty Risk and Extended Warranty 62,437
 9.5% 112,685
 16.1%
Total AmTrust Reinsurance 436,353
 66.7% 523,137
 74.9%
Total Net Premiums Earned $653,866
 100.0% $698,278
 100.0%
For the Nine Months Ended September 30, 2017 2016
  Total % of Total Total % of Total
Net premiums earned        
Diversified Reinsurance        
Property $122,888
 5.9% $103,023
 5.3%
Casualty 375,141
 18.1% 313,736
 16.1%
Accident and Health 63,878
 3.1% 55,788
 2.8%
International 61,667
 3.0% 65,605
 3.4%
Total Diversified Reinsurance 623,574
 30.1% 538,152
 27.6%
AmTrust Reinsurance        
Small Commercial Business 946,782
 45.6% 864,699
 44.3%
Specialty Program 251,153
 12.1% 251,543
 12.9%
Specialty Risk and Extended Warranty 252,876
 12.2% 297,457
 15.2%
Total AmTrust Reinsurance 1,450,811
 69.9% 1,413,699
 72.4%
Other 90
 —% —
 —%
Total Net Premiums Earned $2,074,475
 100.0% $1,951,851
 100.0%

MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)

4. Investments
a)Fixed Maturities and Other Investments
During the second quarter of 2017, we designated additional fixed maturities with a fair value of $391,934 as held-to-maturity ("HTM") and during 2016 we designated fixed maturities with a total fair value of $155,538 as HTM reflecting our intent to hold these securities to maturity. The net unrealized holding gain of $4,313 and $15,770, respectively, as at each designation date continues to be reported in the carrying value of the HTM securities and is amortized through other comprehensive income over the remaining life of the securities using the effective yield method in a manner consistent with the amortization of any premium or discount.
The original or amortized cost, estimated fair value and gross unrealized gains and losses of fixed maturities and other investments at SeptemberJune 30, 20172020 and December 31, 2016,2019 are as follows:
September 30, 2017 Original or amortized cost Gross unrealized gains Gross unrealized losses Fair value
Available-for-sale ("AFS") fixed maturities :        
U.S. treasury bonds $5,194
 $150
 $(8) $5,336
U.S. agency bonds – mortgage-backed 2,004,645
 14,208
 (12,451) 2,006,402
Non-U.S. government and supranational bonds 33,392
 216
 (2,012) 31,596
Asset-backed securities 257,969
 4,456
 (164) 262,261
Corporate bonds 1,541,296
 52,717
 (17,624) 1,576,389
Municipal bonds 2,500
 103
 —
 2,603
Total AFS fixed maturities 3,844,996
 71,850
 (32,259) 3,884,587
Held-to-maturity ("HTM") fixed maturities:        
Corporate bonds 1,057,943
 34,027
 (748) 1,091,222
Municipal bonds 60,425
 459
 —
 60,884
Total HTM fixed maturities 1,118,368
 34,486
 (748) 1,152,106
Other investments 5,640
 1,401
 —
 7,041
Total investments $4,969,004
 $107,737
 $(33,007) $5,043,734
June 30, 2020 Original or amortized cost Gross unrealized gains Gross unrealized losses Fair value
U.S. treasury bonds $210,512
 $673
 $(2) $211,183
U.S. agency bonds – mortgage-backed 421,150
 14,608
 (375) 435,383
Non-U.S. government and supranational bonds 7,284
 327
 (46) 7,565
Asset-backed securities 186,908
 935
 (3,833) 184,010
Corporate bonds 596,444
 22,360
 (17,382) 601,422
Total fixed maturity investments $1,422,298
 $38,903
 $(21,638) $1,439,563

December 31, 2019 Original or amortized cost Gross unrealized gains Gross unrealized losses Fair value
U.S. treasury bonds $94,921
 $704
 $—
 $95,625
U.S. agency bonds – mortgage-backed 533,296
 6,717
 (1,291) 538,722
Non-U.S. government and supranational bonds 11,796
 294
 (91) 11,999
Asset-backed securities 187,881
 821
 (532) 188,170
Corporate bonds 981,441
 31,140
 (15,725) 996,856
Municipal bonds 4,091
 55
 —
 4,146
Total fixed maturity investments $1,813,426
 $39,731
 $(17,639) $1,835,518
December 31, 2016 Original or amortized cost Gross unrealized gains Gross unrealized losses Fair value
AFS fixed maturities:        
U.S. treasury bonds $5,186
 $238
 $(11) $5,413
U.S. agency bonds – mortgage-backed 1,720,436
 12,867
 (17,265) 1,716,038
U.S. agency bonds – other 18,082
 20
 —
 18,102
Non-U.S. government and supranational bonds 35,158
 73
 (5,297) 29,934
Asset-backed securities 217,232
 3,713
 (69) 220,876
Corporate bonds 1,947,347
 30,951
 (62,093) 1,916,205
Municipal bonds 62,201
 2,897
 —
 65,098
Total AFS fixed maturities 4,005,642
 50,759
 (84,735) 3,971,666
HTM fixed maturities:        
Corporate bonds 752,212
 16,370
 (2,447) 766,135
Total HTM fixed maturities 752,212
 16,370
 (2,447) 766,135
Other investments 10,057
 3,003
 —
 13,060
Total investments $4,767,911
 $70,132
 $(87,182) $4,750,861

MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)


4. Investments (continued)
The contractual maturities of our fixed maturities are shown in the table below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
June 30, 2020 Amortized cost Fair value
Due in one year or less $238,418
 $237,728
Due after one year through five years 476,319
 479,611
Due after five years through ten years 99,503
 102,831
  814,240
 820,170
U.S. agency bonds – mortgage-backed 421,150
 435,383
Asset-backed securities 186,908
 184,010
Total fixed maturity investments $1,422,298
 $1,439,563
  AFS fixed maturities HTM fixed maturities
September 30, 2017 Amortized cost Fair value Amortized cost Fair value
Maturity        
Due in one year or less $40,440
 $38,784
 $49,293
 $49,298
Due after one year through five years 577,760
 583,569
 335,922
 346,747
Due after five years through ten years 961,682
 990,968
 723,297
 746,131
Due after ten years 2,500
 2,603
 9,856
 9,930
  1,582,382
 1,615,924
 1,118,368
 1,152,106
U.S. agency bonds – mortgage-backed 2,004,645
 2,006,402
 —
 —
Asset-backed securities 257,969
 262,261
 —
 —
Total fixed maturities $3,844,996
 $3,884,587
 $1,118,368
 $1,152,106

The following tables summarize fixed maturities in an unrealized loss position and the aggregate fair value and gross unrealized loss by length of time the security has continuously been in an unrealized loss position:
  Less than 12 Months 12 Months or More Total
June 30, 2020 Fair
value		 Unrealized
losses		 Fair
value		 Unrealized
losses		 Fair
value		 Unrealized
losses
U.S. treasury bonds $60,586
 $(2) $—
 $—
 $60,586
 $(2)
U.S. agency bonds – mortgage-backed 39,380
 (280) 14,104
 (95) 53,484
 (375)
Non-U.S. government and supranational bonds 116
 (6) 578
 (40) 694
 (46)
Asset-backed securities 102,486
 (2,398) 52,170
 (1,435) 154,656
 (3,833)
Corporate bonds 51,660
 (5,094) 114,729
 (12,288) 166,389
 (17,382)
Total temporarily impaired fixed maturities $254,228
 $(7,780) $181,581
 $(13,858) $435,809
 $(21,638)
  Less than 12 Months 12 Months or More Total
September 30, 2017 Fair
value		 Unrealized
losses		 Fair
value		 Unrealized
losses		 Fair
value		 Unrealized
losses
Fixed maturities            
U.S. treasury bonds $—
 $—
 $592
 $(8) $592
 $(8)
U.S. agency bonds – mortgage-backed 700,173
 (5,545) 390,211
 (6,906) 1,090,384
 (12,451)
Non–U.S. government and supranational bonds 12,678
 (1,116) 15,132
 (896) 27,810
 (2,012)
Asset-backed securities 21,499
 (105) 3,323
 (59) 24,822
 (164)
Corporate bonds 152,959
 (4,437) 262,782
 (13,935) 415,741
 (18,372)
Total temporarily impaired fixed maturities $887,309
 $(11,203) $672,040
 $(21,804) $1,559,349
 $(33,007)

At SeptemberJune 30, 2017,2020, there were approximately 148134 securities in an unrealized loss position with a fair value of $1,559,349$435,809 and unrealized losses of $33,007.$21,638. Of these securities, there were 9365 securities that have been in an unrealized loss position for 12twelve months or greater with a fair value of $672,040$181,581 and unrealized losses of $21,804.$13,858.
MAIDEN HOLDINGS, LTD.
  Less than 12 Months 12 Months or More Total
December 31, 2019 Fair
value		 Unrealized
losses		 Fair
value		 Unrealized
losses		 Fair
value		 Unrealized
losses
U.S. agency bonds – mortgage-backed $31,401
 $(257) $85,008
 $(1,034) $116,409
 $(1,291)
Non-U.S. government and supranational bonds 1,824
 (22) 701
 (69) 2,525
 (91)
Asset-backed securities 60,863
 (240) 17,594
 (292) 78,457
 (532)
Corporate bonds 29,692
 (305) 159,216
 (15,420) 188,908
 (15,725)
Total temporarily impaired fixed maturities $123,780
 $(824) $262,519
 $(16,815) $386,299
 $(17,639)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)

4. Investments (continued)
  Less than 12 Months 12 Months or More Total
December 31, 2016 Fair
value		 Unrealized
losses		 Fair
value		 Unrealized
losses		 Fair
value		 Unrealized
losses
Fixed maturities            
U.S. treasury bonds $589
 $(11) $—
 $—
 $589
 $(11)
U.S. agency bonds – mortgage-backed 997,943
 (14,440) 47,969
 (2,825) 1,045,912
 (17,265)
Non-U.S. government and supranational bonds 3,169
 (160) 25,236
 (5,137) 28,405
 (5,297)
Asset-backed securities 30,589
 (69) —
 —
 30,589
 (69)
Corporate bonds 642,599
 (15,058) 357,954
 (49,482) 1,000,553
 (64,540)
Total temporarily impaired fixed maturities $1,674,889
 $(29,738) $431,159
 $(57,444) $2,106,048
 $(87,182)

At December 31, 2016,2019, there were approximately 251104 securities in an unrealized loss position with a fair value of $2,106,048$386,299 and unrealized losses of $87,182.$17,639. Of these securities, there were 9167 securities that have been in an unrealized loss position for 12twelve months or greater with a fair value of $431,159$262,519 and unrealized losses of $57,444.$16,815.
OTTIOther-than-temporarily impaired
The Company performs quarterly reviews of its fixed maturities in order to determine whether declines in fair value below the amortized cost basis were considered other-than-temporary in accordance with applicable guidance. At SeptemberJune 30, 2017,2020, we have determined that the unrealized losses on fixed maturities were primarily due to widening of credit andchanges in interest rate spreadsrates as well as the impact of foreign exchange rate changes on certain foreign currency denominated AFS fixed maturities since their date of purchase. Because we doAll fixed maturity securities continue to pay the expected coupon payments under the contractual terms of the securities. Any credit-related impairment related to fixed maturity securities that the Company does not intendplan to sell these securities and itfor which the Company is not more likely than not that we willto be required to do so until a recoverysell is recognized in net earnings, with the non-credit related impairment recognized in comprehensive earnings.
Based on our analysis, our fixed maturity portfolio is of fair value tohigh credit quality and we believe the amortized cost we currently believebasis of the securities will ultimately be recovered. The Company continually monitors the credit quality of the fixed maturity investments to assess if it is probable that weit will collect all amounts due according to their respectivereceive contractual terms. Therefore, we do not consider theseor estimated cash flows in the form of principal and interest. For the six months ended June 30, 2020, $1,506 of OTTI charges were recognized in earnings on 2 fixed maturities to be other-than-temporarily impaired ("OTTI") at September 30, 2017. The Company has recognizedmaturity securities. There were no OTTI through earnings forlosses recognized in the three months ended June 30, 2020 and in the three and ninesix months ended SeptemberJune 30, 2017 and 2016.
The following summarizes the credit ratings of our fixed maturities:
Ratings(1) at September 30, 2017
 Amortized cost Fair value % of Total
fair value
U.S. treasury bonds $5,194
 $5,336
 0.1%
U.S. agency bonds 2,004,645
 2,006,402
 39.8%
AAA 169,514
 173,589
 3.4%
AA+, AA, AA- 238,268
 244,507
 4.9%
A+, A, A- 1,395,001
 1,421,504
 28.3%
BBB+, BBB, BBB- 1,093,491
 1,125,119
 22.3%
BB+ or lower 57,251
 60,236
 1.2%
Total fixed maturities $4,963,364
 $5,036,693
 100.0%
2019.
MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)


4. Investments (continued)
The following tables summarize the credit ratings of our fixed maturities as at June 30, 2020 and December 31, 2019:
Ratings(1) at December 31, 2016
 Amortized cost Fair value % of Total
fair value
June 30, 2020 Amortized cost Fair value % of Total
fair value
U.S. treasury bonds $5,186
 $5,413
 0.1% $210,512
 $211,183
 14.7%
U.S. agency bonds 1,738,518
 1,734,140
 36.6% 421,150
 435,383
 30.2%
AAA 170,515
 171,090
 3.6% 97,579
 96,314
 6.7%
AA+, AA, AA- 238,315
 237,169
 5.0% 111,053
 110,763
 7.7%
A+, A, A- 1,386,023
 1,374,860
 29.0% 233,775
 236,501
 16.4%
BBB+, BBB, BBB- 1,053,529
 1,047,376
 22.2% 311,877
 315,567
 21.9%
BB+ or lower 165,768
 167,753
 3.5% 36,352
 33,852
 2.4%
Total fixed maturities(1) $4,757,854
 $4,737,801
 100.0% $1,422,298
 $1,439,563
 100.0%

December 31, 2019 Amortized cost Fair value % of Total
fair value
U.S. treasury bonds $94,921
 $95,625
 5.2%
U.S. agency bonds 533,296
 538,722
 29.4%
AAA 99,212
 99,542
 5.4%
AA+, AA, AA- 101,491
 101,467
 5.5%
A+, A, A- 540,002
 549,479
 29.9%
BBB+, BBB, BBB- 438,731
 445,202
 24.3%
BB+ or lower 5,773
 5,481
 0.3%
Total fixed maturities(1)
 $1,813,426
 $1,835,518
 100.0%
(1)BasedRatings above are based on Standard & Poor’s ("S&P"), or equivalent, ratingsratings.
b)Other Investments
The table below shows our portfoliothe fair value of the Company's other investments:investments as at June 30, 2020 and December 31, 2019:
  June 30, 2020 December 31, 2019
  Fair value % of Total
fair value		 Fair value % of Total
fair value
Investment in limited partnerships $2,908
 50.9% $3,077
 63.1%
Other 2,800
 49.1% 1,800
 36.9%
Total other investments $5,708
 100.0% $4,877
 100.0%

  September 30, 2017 December 31, 2016
  Fair value % of Total
fair value		 Fair value % of Total
fair value
Investment in limited partnerships $5,541
 78.7% $5,474
 41.9%
Investment in quoted equity —
 —% 6,586
 50.4%
Other 1,500
 21.3% 1,000
 7.7%
Total other investments $7,041
 100.0% $13,060
 100.0%
The Company also holds other investments made by special purpose vehicles ("SPV") related to lending activities of $30,346 at June 30, 2020 (December 31, 2019 - $26,871). These investments are carried at cost less impairment, if any, with any indication of impairment recognized in income when determined. Because these investments are carried at cost, they are not included in the table above. Please see "Note 5 - Fair Value Measurements" for additional information.
The Company has remaining unfunded commitments on its investment in limited partnerships of $333 at June 30, 2020 (December 31, 2019 - $340). The Company also has a remaining unfunded commitment on its investment in limited partnershipsspecial purpose vehicles focused on lending activities of approximately $319$215 at SeptemberJune 30, 20172020 (December 31, 20162019 - $463)$767).
c)Net Investment Income
Net investment income was derived from the following sources:
  For the Three Months Ended September 30, For the Nine Months Ended September 30,
  2017 2016 2017 2016
Fixed maturities $40,369
 $35,769
 $123,849
 $108,018
Cash and cash equivalents 899
 506
 1,328
 1,147
Loan to related party 913
 599
 2,441
 1,729
Other 569
 572
 1,460
 1,519
  42,750
 37,446
 129,078
 112,413
Investment expenses (1,927) (1,780) (5,586) (5,122)
Net investment income $40,823
 $35,666
 $123,492
 $107,291
MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)


4. Investments (continued)
c)Net Investment Income
Net investment income was derived from the following sources:
  For the Three Months Ended June 30, For the Six Months Ended June 30,
  2020 2019 2020 2019
Fixed maturities $9,635
 $23,522
 $22,286
 $49,742
Funds withheld interest 4,009
 5,169
 7,862
 9,706
Loan to related party 860
 1,842
 2,225
 3,664
Cash and cash equivalents and other 159
 1,316
 655
 1,591
  14,663
 31,849
 33,028
 64,703
Investment expenses (354) (727) (755) (1,559)
Net investment income $14,309
 $31,122
 $32,273
 $63,144

d)Realized Gains (Losses) on Investment
Realized gains or losses on the sale of investments are determined on the basis of the first in first out cost method. The following provides an analysis oftables show the net realized gains (losses) on investment included in the Condensed Consolidated Statements of Income:
For the Three Months Ended June 30, 2020 Gross gains Gross losses Net
Fixed maturities $9,059
 $—
 $9,059
Other investments —
 (184) (184)
Net realized gains (losses) on investment $9,059
 $(184) $8,875
       
For the Three Months Ended June 30, 2019 Gross gains Gross losses Net
Fixed maturities $25,436
 $(1,501) $23,935
Other investments 151
 —
 151
Net realized gains (losses) on investment $25,587
 $(1,501) $24,086
       
For the Six Months Ended June 30, 2020 Gross gains Gross losses Net
AFS fixed maturities $19,991
 $(1) $19,990
Other investments 107
 (184) (77)
Net realized gains (losses) on investment $20,098
 $(185) $19,913
       
For the Six Months Ended June 30, 2019 Gross gains Gross losses Net
AFS fixed maturities $27,860
 $(14,881) $12,979
Other investments 151
 (145) 6
Net realized gains (losses) on investment $28,011
 $(15,026) $12,985
For the Three Months Ended September 30, 2017 Gross gains Gross losses Net
AFS fixed maturities $1,366
 $(997) $369
Other investments 5,490
 —
 5,490
Net realized gains on investment $6,856
 $(997) $5,859
       
For the Three Months Ended September 30, 2016 Gross gains Gross losses Net
AFS fixed maturities $1,813
 $—
 $1,813
Other investments 87
 —
 87
Net realized gains on investment $1,900
 $—
 $1,900
       
For the Nine Months Ended September 30, 2017 Gross gains Gross losses Net
AFS fixed maturities $3,854
 $(1,253) $2,601
Other investments 5,715
 —
 5,715
Net realized gains on investment $9,569
 $(1,253) $8,316
       
For the Nine Months Ended September 30, 2016 Gross gains Gross losses Net
AFS fixed maturities $4,953
 $(891) $4,062
Other investments 449
 —
 449
Net realized gains on investment $5,402
 $(891) $4,511

Proceeds from sales of fixed maturities classified as AFS were $97,357$181,030 and $199,751$405,501 for the three and ninesix months ended SeptemberJune 30, 2017,2020, respectively (2016(2019 - $15,260$625,254 and $101,923,$709,615, respectively).
Net unrealized (losses) gains on investments were as follows:follows at June 30, 2020 and December 31, 2019, respectively:
  June 30, 2020 December 31, 2019
Fixed maturities $17,266
 $22,092
Deferred income tax (82) (96)
Net unrealized gains, net of deferred income tax $17,184
 $21,996
Change, net of deferred income tax $(4,812) $81,758
  September 30, 2017 December 31, 2016
Fixed maturities $47,888
 $(23,635)
Other investments 1,401
 3,003
Total net unrealized gains (losses) 49,289
 (20,632)
Deferred income tax (79) (84)
Net unrealized gains (losses), net of deferred income tax $49,210
 $(20,716)
Change, net of deferred income tax $69,926
 

e)Restricted Cash and Cash Equivalents 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.
MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)


4. Investments (continued)
e)Restricted Cash and Cash Equivalents and Investments
The Company is required to provide collateral for its reinsurance liabilities under various reinsurance agreements and utilizes trust accounts to collateralize business with reinsurance counterparties. The assets in trust as collateral are primarily cash and highly rated fixed maturities. The fair valuevalues of ourthese restricted assets waswere as follows:follows at June 30, 2020 and December 31, 2019:
  June 30, 2020 December 31, 2019
Restricted cash – third party agreements $22,652
 $21,447
Restricted cash – related party agreements 58,218
 37,634
Total restricted cash 80,870
 59,081
Restricted investments – in trust for third party agreements at fair value (amortized cost: 2020 – $59,951; 2019 – $65,539)
 60,082
 65,678
Restricted investments – in trust for related party agreements at fair value (amortized cost: 2020 – $1,050,781; 2019 – $1,366,873)
 1,066,310
 1,382,994
Restricted investments – liability for investments purchased for related party agreements(1)
 (31,997) —
Total restricted investments 1,094,395
 1,448,672
Total restricted cash and investments $1,175,265
 $1,507,753

  September 30, 2017 December 31, 2016
Restricted cash – third party agreements $80,999
 $56,891
Restricted cash – related party agreements 50,467
 46,777
Restricted cash – U.S. state regulatory authorities 132
 120
Total restricted cash 131,598
 103,788
Restricted investments – in trust for third party agreements at fair value (Amortized cost: 2017 – $1,337,185; 2016 – $1,307,926)
 1,354,548
 1,299,569
Restricted investments AFS– in trust for related party agreements at fair value (Amortized cost: 2017 – $2,193,678; 2016 – $2,242,565)
 2,218,382
 2,225,066
Restricted investments HTM– in trust for related party agreements at fair value (Amortized cost: 2017 – $1,118,368; 2016 – $752,212)
 1,152,106
 766,135
Restricted investments – in trust for U.S. state regulatory authorities (Amortized cost: 2017 – $4,071; 2016 – $4,059)
 4,188
 4,238
Total restricted investments 4,729,224
 4,295,008
Total restricted cash and investments $4,860,822
 $4,398,796

(1) $31,997 of the restricted cash held for related party agreements as of June 30, 2020 was used to settle the liability for investments purchased of $44,996 as of June 30, 2020 subsequent to the quarter end.

MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)

5. Fair Value of Financial Instruments
(a) Fair Values of Financial Instruments
Fair Value Measurements — Accounting Standards Codification ("ASC") Topic 820, "Fair Value Measurements and Disclosures" ("ASC 820") defines fair value as the price that would be received upon the sale of an asset or paid to transfer a liability (i.e. the "exit price") in an orderly transaction between open market participants at the measurement date. Additionally, ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The hierarchy is broken down into three levels based on the reliability of inputs as follows:
Level 1 — Valuations based on unadjusted quoted market prices for identical assets or liabilities that we have the ability to access. Valuation adjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. Examples of assets and liabilities utilizing Level 1 inputs include: exchange-traded equity securities and U.S. Treasury bonds;
Level 2 — Valuations based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical 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. Examples of assets and liabilities utilizing Level 2 inputs include: U.S. government-sponsored agency securities; non-U.S. government and supranational obligations; commercial mortgage-backed securities ("CMBS"); collateralized loan obligations ("CLO"); corporate and municipal bonds; and
Level 3 — Valuations based on models where significant inputs are not observable. The unobservable inputs reflect our own assumptions about assumptions that market participants would use. Examples of assets and liabilities utilizing Level 3 inputs include: an investment in preference shares of a start-up insurance producer.
•
Level 1 — Valuations based on unadjusted quoted market prices for identical assets or liabilities that we have the ability to access. Because valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. Examples of assets and liabilities utilizing Level 1 inputs include: U.S. Treasury bonds;
•
Level 2 — Valuations based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical 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. Examples of assets and liabilities utilizing Level 2 inputs include: U.S. government-sponsored agency securities; non-U.S. government and supranational obligations; commercial mortgage-backed securities ("CMBS"); collateralized loan obligations ("CLO"); corporate and municipal bonds; and
•
Level 3 — Valuations based on models where significant inputs are not observable. The unobservable inputs reflect our own assumptions about assumptions that market participants would use. Examples of assets and liabilities utilizing Level 3 inputs include: an investment in preference shares of a start-up insurance producer.
The availability of observable inputs can vary from financial instrument to financial instrument and is affected by a wide variety of factors, including, for example, the type of financial instrument, whether the financial instrument is new and not yet established in the marketplace, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires significantly more judgment. Accordingly, the degree of judgment exercised by management in determining fair value is greatest for instruments categorized in Level 3. We use prices and inputs that are current at the measurement date. In periods of market dislocation, the observability of prices and inputs may be reduced for many instruments. This condition could cause an instrument to be reclassified between levels.
For investments that have quoted market prices in active markets, the Company uses the quoted market prices as fair value and includes these prices in the amounts disclosed in the Level 1 hierarchy. The Company receives the quoted market prices from a third party nationally recognized provider ("the Pricing Service.Service"). When quoted market prices are unavailable, the Company utilizes the Pricing Service to determine an estimate of fair value. The fair value estimates are included in the Level 2 hierarchy. The Company will challenge any prices for its investments which are considered not to be representationrepresentative of fair value. If quoted market prices and an estimate from the Pricing Service are unavailable, the Company produces an estimate of fair value based on dealer quotations for recent activity in positions with the same or similar characteristics to that being valued or through consensus pricing of a pricing service.valued. The Company determines whether the fair value estimate
MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)

5. Fair Value of Financial Instruments (continued)
is in the Level 2 or Level 3 hierarchy depending on the level of observable inputs available when estimating the fair value. The Company bases its estimates of fair values for assets on the bid price as it represents what a third party market participant would be willing to pay in an orderly transaction.
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 at SeptemberJune 30, 2017.2020 and December 31, 2019.
U.S. government and U.S. agency — Bonds issued by the U.S. Treasury, the Federal Home Loan Bank, the Federal Home Loan Mortgage Corporation, Government National Mortgage Association, Federal National Mortgage Association and the Federal National Mortgage Association.Farm Credit Banks Funding Corporation. The fair values of U.S. treasury bonds 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 bonds is an actively traded market given the high level of daily trading volume. The fair values of U.S. agency bonds are determined 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. agency bonds are included in the Level 2 fair value hierarchy.
MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)

5. Fair Value of Financial Instruments (continued)
Non-U.S. government and supranational bonds — These securities are generally priced by independent pricing services. The Pricing Service 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 and supranational bonds are observable market inputs, the fair values of non-U.S. government and supranational bonds are included in the Level 2 fair value hierarchy.
Asset-backed securities — These securities comprise CMBS and CLO originated by a variety of financial institutions that on acquisition are rated BBB-/Baa3 or higher. These securities are priced by independent pricing services and brokers. The pricing provider applies dealer quotes and other available trade information, prepayment speeds, yield curves and credit spreads to the valuation. As the significant inputs used to price the CMBS and CLO are observable market inputs, the fair value of the CMBS and CLO issecurities are included in the Level 2 fair value hierarchy.
Corporate and municipal bonds — Bonds issued by corporations, U.S. state and municipality entities or agencies that on acquisition are rated BBB-/Baa3 or higher. These securities are generally priced by independent pricing services. The credit spreads are sourced from broker/dealers, trade prices and the new issue market. Where pricing is unavailable from pricing services, we obtaincustodian pricing or non-binding quotes are obtained from broker-dealers.broker-dealers to estimate fair values. As the significant inputs used to price corporate and municipal bonds are observable market inputs, the fair values of corporate bonds are included in the Level 2 fair value hierarchy.
Municipal bonds — Bonds issued by U.S. state and municipality entities or agencies. The fair values of municipal bonds are generally priced by independent 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 municipal bonds are observable market inputs, municipal bonds are classified within Level 2.
Other investments — Includes both quoted and unquoted investments. The fair valueinvestments comprised of our quoted equity investment is obtained from the Pricing Service and is classified within Level 1. The quoted equity investment was sold in the third quarter of 2017.
Unquoted other investments comprise investments in limited partnerships and twoother investments which includes investments in special purpose vehicles focused on lending activities as well as investments in start-up insurance related companies.entities. The fair values of the limited partnerships are determined by the fund manager based on recent filings, operating results, balance sheet stability, growth and other business and market sector fundamentals. The fair value of these investments are measured using the NAV practical expedient and therefore have not been categorized within the fair value hierarchy. If there is a reporting lag between the current period end and reporting date of the latest available fund valuation, we estimate fair values are estimated by starting with the most recently available valuation and adjusting for return estimates as well as any subscriptions and distributions that took place during the current period.
The investments made by SPVs focused on lending activities are carried at cost less impairment, if any, with any indication of impairment recognized in income when determined. As these investments are carried at cost, they are not included in the fair value hierarchy below.
The fair value of the investments in the start-up insurance related companies wasentities are determined using recent private market transactions and as such, the fair value isof these investments are included in the Level 3 fair value hierarchy.
Cash and cash equivalents (including restricted amounts), accrued investment income, reinsurance balances receivable, and certain other assets and liabilities — The carrying values reported in the Condensed Consolidated Balance Sheets for these financial instruments approximate their fair value due to their short term nature and are classified aswithin the Level 2.2 fair value hierarchy.
Loan to related party, reinsurance recoverable on unpaid losses, and funds withheld receivable — The carrying value reported in the Condensed Consolidated Balance Sheets for this financial instrument approximates its fair value and it is included in the Level 2 hierarchy.
Senior notes —The amountvalues reported in the Condensed Consolidated Balance Sheets for these financial instruments represents the carryingapproximate their fair value of the notes. The fair values are based on indicative market pricing obtained from a third-party service provider and as such, are included in the Level 2 fair value hierarchy.
Senior notes —The carrying value for these financial instruments represents the principal value of the notes less any unamortized issuance costs. As these notes are presented at carrying value, they are not included in the fair value hierarchy below.
(b) Fair Value Hierarchy
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.
MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)


5. Fair Value of Financial Instruments (continued)
At SeptemberJune 30, 20172020 and December 31, 2016, we2019, the Company classified ourits financial instruments measured at fair value on a recurring basis in the following valuation hierarchy:
September 30, 2017 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value Based on NAV Practical Expedient Total Fair Value
AFS fixed maturities          
June 30, 2020 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value Based on NAV Practical Expedient Total Fair Value
Fixed maturities          
U.S. treasury bonds $5,336
 $—
 $—
 $—
 $5,336
 $211,183
 $—
 $—
 $—
 $211,183
U.S. agency bonds – mortgage-backed —
 2,006,402
 —
 —
 2,006,402
 —
 435,383
 —
 —
 435,383
Non-U.S. government and supranational bonds —
 31,596
 —
 —
 31,596
 —
 7,565
 —
 —
 7,565
Asset-backed securities —
 262,261
 —
 —
 262,261
 —
 184,010
 —
 —
 184,010
Corporate bonds —
 1,576,389
 —
 —
 1,576,389
 —
 601,422
 —
 —
 601,422
Municipal bonds —
 2,603
 —
 —
 2,603
Other investments —
 —
 1,500
 5,541
 7,041
 —
 —
 2,800
 2,908
 5,708
Total $5,336
 $3,879,251
 $1,500
 $5,541
 $3,891,628
 $211,183
 $1,228,380
 $2,800
 $2,908
 $1,445,271
As a percentage of total assets 0.1% 56.7% —% 0.1% 56.9% 6.6% 38.2% 0.1% 0.1% 45.0%
December 31, 2019 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value Based on NAV Practical Expedient Total Fair Value
Fixed maturities          
U.S. treasury bonds $95,625
 $—
 $—
 $—
 $95,625
U.S. agency bonds – mortgage-backed —
 538,722
 —
 —
 538,722
Non-U.S. government and supranational bonds —
 11,999
 —
 —
 11,999
Asset-backed securities —
 188,170
 —
 —
 188,170
Corporate bonds —
 996,856
 —
 —
 996,856
Municipal bonds —
 4,146
 —
 —
 4,146
Other investments —
 —
 1,800
 3,077
 4,877
Total $95,625
 $1,739,893
 $1,800
 $3,077
 $1,840,395
As a percentage of total assets 2.7% 48.8% 0.1% 0.1% 51.7%
December 31, 2016 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value Based on NAV Practical Expedient Total Fair Value
AFS fixed maturities          
U.S. treasury bonds $5,413
 $—
 $—
 $—
 $5,413
U.S. agency bonds – mortgage-backed —
 1,716,038
 —
 —
 1,716,038
U.S. agency bonds – other —
 18,102
 —
 —
 18,102
Non-U.S. government and supranational bonds —
 29,934
 —
 —
 29,934
Asset-backed securities —
 220,876
 —
 —
 220,876
Corporate bonds —
 1,916,205
 —
 —
 1,916,205
Municipal bonds —
 65,098
 —
 —
 65,098
Other investments 6,586
 —
 1,000
 5,474
 13,060
Total $11,999
 $3,966,253
 $1,000
 $5,474
 $3,984,726
As a percentage of total assets 0.2% 63.4% —% 0.1% 63.7%

The Company utilizes athe Pricing Service to assist in determining the fair value of ourits investments; however, management is ultimately responsible for all fair values presented in the Company’s financial statements. This includes responsibility for monitoring the fair value process, ensuring objective and reliable valuation practices and pricing of assets and liabilities and pricing sources. The Company analyzes and reviews the information and prices received from the Pricing Service to ensure that the prices represent a reasonable estimate of the fair value.
The Pricing Service was utilized to estimate fair value measurements for approximately 99.9%99.6% and 98.8%99.7% of itsour fixed maturities at SeptemberJune 30, 20172020 and December 31, 2016,2019, respectively. The Pricing Service utilizes market quotations for fixed maturity securities that have quoted market prices in active markets. SinceBecause fixed maturities other than U.S. treasury bonds generally do not trade actively on a daily basis, the Pricing Service prepares estimates of fair value measurements using relevant market data, benchmark curves, sector groupings and matrix pricing and these have been classified as Level 2.2 within the fair value hierarchy.
At SeptemberJune 30, 20172020 and December 31, 2016, 0.1%2019, 0.4% and 1.2%0.3%, respectively, of the Level 2 fixed maturities are valued using the market approach. At each of those dates, a total of three securities,June 30, 2020 and December 31, 2019, 1 security or approximately $6,463$5,491 and $56,674,$5,481, respectively, of Level 2 fixed maturities, werewas priced using a quotation from a broker and/or custodian as opposed to the Pricing Service due to lack of information available. At SeptemberJune 30, 20172020 and December 31, 2016, we have2019, the Company has not adjusted any pricing provided to usit based on the review performed by ourits investment managers.
During the year ended December 31, 2019, the Company transferred its investment in special purpose vehicles focused on lending activities out of Level 3 within the fair value hierarchy due to a change in accounting policy to report these investments at cost less any impairment instead of fair market value. There were 0 other transfers to or from Level 3 during the periods represented by these Condensed Consolidated Financial Statements.
MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)


5. Fair Value of Financial Instruments (continued)
The Company utilized a Pricing Service to estimate fair value measurement for the quoted equity investment reflecting the closing price quoted for the final trading day of the period and is included in Level 1. The quoted equity investment was sold in the third quarter of 2017.
There have not been any transfers between Level 1 and Level 2 and there has not been any transfers to or from Level 3 during the periods represented by these Condensed Consolidated Financial Statements.
(c) Level 3 Financial Instruments
TheAt June 30, 2020, the Company also has other investments of $1,500$2,800 (December 31, 20162019 - $1,000)$1,800) which includes investments in start-up insurance related companies, the fair value of each was determined using recent private market transactions.entities. Due to the significant unobservable inputs in these valuations, the Company includes the estimate ofclassifies the fair value estimate of these unquotedother investments as Level 3.
The Company has determined that its investment in Level 3 securities is not material to its financial position or results of operations. Duringwithin the three and nine months ended September 30, 2017 and 2016, there have been no transfers into or out of Level 3.fair value hierarchy.
(d) Financial Instruments not measured at Fair Value
The following table presents the respective carrying value and fair value and carrying value offor the financial instruments not measured at fair value:value on the Condensed Consolidated Balance Sheets as at June 30, 2020 and December 31, 2019, respectively:
  June 30, 2020 December 31, 2019
  Carrying Value Fair Value Carrying Value Fair Value
Financial Assets        
Other investments in SPV related to lending activities $30,346
 $42,382
 $26,871
 $42,156
         
Financial Liabilities        
Senior Notes - MHLA – 6.625% $110,000
 $84,700
 $110,000
 $86,460
Senior Notes - MHNC – 7.75% 152,500
 134,810
 152,500
 137,067
Total financial liabilities $262,500
 $219,510
 $262,500
 $223,527
  September 30, 2017 December 31, 2016
  Carrying Value Fair Value Carrying Value Fair Value
Financial Assets        
HTM – corporate bonds $1,057,943
 $1,091,222
 $752,212
 $766,135
HTM – municipal bonds 60,425
 60,884
 —
 —
Total financial assets $1,118,368
 $1,152,106
 $752,212
 $766,135
         
Financial Liabilities        
Senior Notes - MHLA – 6.625% $110,000
 $117,040
 $110,000
 $111,452
Senior Notes - MHNC – 7.75% 152,500
 159,600
 152,500
 164,700
Senior Notes - MHNB – 8.00%(1)
 —
 —
 100,000
 101,600
Total financial liabilities $262,500
 $276,640
 $362,500
 $377,752

(1)
The fair value of other investments in SPV related to lending activities was determined using internally developed discounted cash flow models and therefore are included in the Level 3 fair value hierarchy.
The fair values of the Senior Notes are based on indicative market pricing obtained from a third-party service provider and therefore are included in the Level 2 fair value hierarchy.




Please refer to "Note 6. Long-Term Debt", for disclosure regarding the redemption of the 2012 Senior Notes during the second quarter of 2017.
MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)


6. Long-Term DebtDiscontinued Operations
Senior NotesSale of U.S. Treaty Reinsurance operations
As described in Part II of our Annual Report on Form 10-K for the year ended December 31, 2019, the Company entered into a renewal rights transaction with Transatlantic Reinsurance Company on August 29, 2018 and subsequently sold Maiden Holdings and its wholly owned subsidiary,US on December 27, 2018 to Enstar. Maiden Holdings North America, Ltd. ("Maiden NA"), both have an outstanding public debt offering of senior notes which were issued in 2016 and 2013, respectively, (the "Senior Notes"). The 2013 Senior Notes issuance made by Maiden NA is fully and unconditionally guaranteed by the Company. The Senior Notes are unsecured and unsubordinated obligationUS was a substantial portion of the Company.
On June 27, 2017, we fully redeemedDiversified Reinsurance segment; therefore the Company concluded that the sale represented a strategic shift that has a major effect on its ongoing operations and financial results and that all of the 2012 Senior Notes usingheld for sale criteria were met. Accordingly, all transactions related to the U.S. treaty reinsurance operations are reported and presented as part the results from discontinued operations in the Condensed Consolidated Statements of Income.
As described in Part II of our Annual Report on Form 10-K for the year ended December 31, 2019, Cavello Bay Reinsurance Limited ("Cavello"), Enstar’s Bermuda reinsurance affiliate, and Maiden Reinsurance entered into a portion ofretrocession agreement pursuant to which certain assets and liabilities associated with the proceeds fromU.S. treaty reinsurance business held by Maiden Reinsurance were retroceded to Cavello on December 27, 2018. As at December 31, 2018, the Preference Shares - Series D issuance (seeassets and liabilities related discussion in "Note 11. Shareholders' Equity"). The 2012 Senior Notes were redeemed at a redemption price equal to 100% of the principal amount of $100,000 plus accrued and unpaid interest on the principal amount being redeemed up to, but notthis business including the redemption date. Asretrocession agreement were classified as held for sale, however, a result,decision was made to reclassify them as it is now considered unlikely that these reserves will be novated in the Company accelerated the amortization of theforeseeable future; therefore, there are no remaining 2012 Senior Note issuance cost of $2,809.assets and liabilities classified as held for sale as at June 30, 2020 and December 31, 2019.
The following table detailssummarizes the Company's Senior Notes issuances asmajor classes of September 30, 2017 and December 31, 2016:
September 30, 2017 2016 Senior Notes 2013 Senior Notes 2012 Senior Notes Total
Principal amount $110,000
 $152,500
 $—
 $262,500
Less: unamortized issuance costs 3,664
 4,406
 —
 8,070
Carrying value $106,336
 $148,094
 $—
 $254,430
         
December 31, 2016 2016 Senior Notes 2013 Senior Notes 2012 Senior Notes Total
Principal amount $110,000
 $152,500
 $100,000
 $362,500
Less: unamortized issuance costs 3,694
 4,532
 2,865
 11,091
Carrying value $106,306
 $147,968
 $97,135
 $351,409
         
         
Other details:        
Original debt issuance costs $3,715
 $5,054
 $3,406
  
Maturity date June 14, 2046
 Dec 1, 2043
 Mar 27, 2042
  
Earliest redeemable date (for cash) June 14, 2021
 Dec 1, 2018
 Mar 27, 2017
  
Coupon rate 6.625% 7.75% 8.00%  
Effective interest rate 7.07% 8.04% 8.31%  
The interest expense incurred onitems constituting the Senior Notesnet loss from discontinued operations for the three and ninesix months ended SeptemberJune 30, 2017 was $4,776 and $18,218, respectively, (2016 - $6,776 and $21,049, respectively)2019 presented in the unaudited Condensed Consolidated Statements of which $1,342 and $1,453 was accrued at September 30, 2017 and December 31, 2016, respectively. The issuance costs related to the Senior Notes were capitalized and are being amortized over the lifeIncome:
  For the Three Months Ended June 30, For the Six Months Ended June 30,
  2019 2019
Net loss and loss adjustment expenses $6,363
 $6,363
General and administrative expenses (1,506) (1,843)
Income from discontinued operations before income tax 4,857
 4,520
Loss on disposal of discontinued operations (23,077) (25,474)
Income tax expense (1,169) (1,169)
Loss from discontinued operations, net of income tax $(19,389) $(22,123)


As a result of the Senior Notes. The amountSettlement and Commutation Agreement entered into by Maiden and Enstar on July 31, 2019, Maiden recorded an additional loss from discontinued operations of amortization expense$16,715 for the three and ninesix months ended SeptemberJune 30, 2017 was $53 and $212, respectively, (2016 - $80 and $265, respectively).2019.

MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)


7. Long-Term Debt
Senior Notes
At June 30, 2020 and December 31, 2019, both Maiden Holdings and its wholly owned subsidiary, Maiden NA, have outstanding publicly-traded senior notes which were issued in 2016 ("2016 Senior Notes") and 2013 ("2013 Senior Notes"), respectively (collectively "Senior Notes"). The 2013 Senior Notes issued by Maiden NA are fully and unconditionally guaranteed by Maiden Holdings. The Senior Notes are unsecured and unsubordinated obligations of the Company.
The following tables detail the issuances of Senior Notes outstanding at June 30, 2020 and December 31, 2019:    
June 30, 2020 2016 Senior Notes 2013 Senior Notes Total
Principal amount $110,000
 $152,500
 $262,500
Less: unamortized issuance costs 3,541
 3,943
 7,484
Carrying value $106,459
 $148,557
 $255,016
       
December 31, 2019 2016 Senior Notes 2013 Senior Notes Total
Principal amount $110,000
 $152,500
 $262,500
Less: unamortized issuance costs 3,565
 4,027
 7,592
Carrying value $106,435
 $148,473
 $254,908
       
Other details:      
Original debt issuance costs $3,715
 $5,054
  
Maturity date June 14, 2046
 December 1, 2043
  
Earliest redeemable date (for cash) June 14, 2021
 December 1, 2018
  
Coupon rate 6.625% 7.75%  
Effective interest rate 7.07% 8.04%  

The interest expense incurred on the Senior Notes for the three and six months ended June 30, 2020 was $4,776 and $9,553, respectively (2019 - $4,777 and $9,553, respectively), of which $1,342 was accrued at both June 30, 2020 and December 31, 2019, respectively. The issuance costs related to the Senior Notes were capitalized and are being amortized over the effective life of the Senior Notes. The amortization expense for the three and six months ended June 30, 2020 was $54 and $108, respectively (2019 - $53 and $106, respectively).
Under the terms of the 2013 Senior Notes, the 2013 Senior Notes can be redeemed, in whole or in part after December 1, 2018 at Maiden NA's option at any time and from time to time, until maturity at a redemption price equal to 100% of the principal amount of the notes to be redeemed plus accrued but unpaid interest on the principal amount being redeemed to, but not including, the redemption date. Maiden NA is required to give at least thirty and not more than sixty days notice prior to the redemption date.
MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)

8. Reinsurance
The Company uses reinsurance and retrocessional agreements ("ceded reinsurance") to mitigate volatility, reduce its exposure to certain risks and provide capital support. Ceded reinsurance provides for the recovery of a portion of loss and LAE under certain circumstances without relieving the Company of its obligations to the policyholders. The Company remains liable to the extent that any of its reinsurers or retrocessionaires fails to meet their obligations. Loss and LAE incurred and premiums earned are reported after deduction for ceded reinsurance. In the event that one or more of our reinsurers or retrocessionaires are unable to meet their obligations under these agreements, the Company would not realize the full value of the reinsurance recoverable balances.
The effect of ceded reinsurance on net premiums written and earned and on net loss and LAE for the six months ended June 30, 2020 and 2019 was as follows:
For the Six Months Ended June 30, 2020 2019
Premiums written    
Direct $10,218
 $9,443
Assumed 6,498
 (568,465)
Ceded (2,254) (2,917)
Net $14,462
 $(561,939)
Premiums earned    
Direct $9,719
 $8,170
Assumed 44,631
 310,749
Ceded (1,827) (1,831)
Net $52,523
 $317,088
Loss and LAE    
Gross loss and LAE $32,452
 $274,543
Loss and LAE ceded (358) (293)
Net $32,094
 $274,250

The Company's reinsurance recoverable on unpaid losses balance as at June 30, 2020 was $617,496 (December 31, 2019 - $623,422) presented in the Condensed Consolidated Balance Sheets. At June 30, 2020 and December 31, 2019, the Company had 0 valuation allowance against reinsurance recoverable on unpaid losses.
As discussed in "Note 1. Organization", on December 27, 2018, Cavello and Maiden Reinsurance entered into a retrocession agreement pursuant to which certain assets and liabilities associated with the U.S. treaty reinsurance business held by Maiden Reinsurance were retroceded to Cavello in exchange for a ceding commission. The balance of reinsurance recoverable on unpaid losses due from Cavello under this retrocession agreement was $58,182 at June 30, 2020 (December 31, 2019 - $62,699).
On July 31, 2019, Maiden Reinsurance and Cavello entered into the LPT/ADC Agreement, pursuant to which Cavello assumed the loss reserves as of December 31, 2018 associated with the AmTrust Quota Share in excess of a $2,178,535 retention up to $600,000, in exchange for a retrocession premium of $445,000. The $2,178,535 retention is subject to adjustment for paid losses subsequent to December 31, 2018. Please see "Note 1. Basis of Presentation" for further details.
The LPT/ADC Agreement provides Maiden Reinsurance with $155,000 in adverse development cover over its carried AmTrust Quota Share loss reserves at December 31, 2018. The LPT/ADC Agreement meets the criteria for risk transfer and is thus accounted for as retroactive reinsurance. Cumulative ceded losses exceeding $445,000 are recognized as a deferred gain liability and amortized into income over the settlement period of the ceded reserves in proportion to cumulative losses collected over the estimated ultimate reinsurance recoverable. The amount of the deferral is recalculated each period based on loss payments and updated estimates. Consequently, cumulative adverse development subsequent to December 31, 2018 may result in significant losses from operations until periods when the deferred gain is recognized as a benefit to earnings. As of June 30, 2020, the reinsurance recoverable on unpaid losses under the retroactive reinsurance agreement were $556,540 while the deferred gain liability was $111,540 (December 31, 2019 - $557,950 and $112,950, respectively). Amortization of the deferred gain will not occur until paid losses have exceeded the minimum retention under the LPT/ADC Agreement, which is estimated to be in 2024.
Cavello has provided collateral in the form of a letter of credit in the amount of $445,000 to AmTrust under the LPT/ADC Agreement and Cavello is subject to additional collateral funding requirements as explained in "Note 10. Related Party Transactions". Under the terms of the LPT/ADC Agreement, the covered losses associated with the Commutation and Release Agreement with AmTrust are eligible to be covered but recoverable only when such losses are paid or settled by AII or its affiliates, provided such losses and other related amounts shall not exceed $312,786. Cavello's parent company, Enstar, has credit ratings of BBB from both Standard &Poor's and Fitch Ratings at June 30, 2020.
MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)

9. Reserve for Loss and Loss Adjustment Expenses
Our reserve for loss and LAE comprises:
  September 30, 2017 December 31, 2016
Reserve for reported loss and LAE $1,898,474
 $1,617,956
Reserve for losses incurred but not reported ("IBNR") 1,466,537
 1,278,540
Reserve for loss and LAE $3,365,011
 $2,896,496
The following table represents a reconciliation of our beginning and ending gross and net loss and LAE reserves:
For the Nine Months Ended September 30, 2017 2016
Gross loss and LAE reserves, January 1 $2,896,496
 $2,510,101
Less: reinsurance recoverable on unpaid losses, January 1 99,936
 71,248
Net loss and LAE reserves, January 1 2,796,560
 2,438,853
Net incurred losses related to:    
Current year 1,394,623
 1,255,493
Prior years 150,534
 41,868
  1,545,157
 1,297,361
Net paid losses related to:    
Current year (400,908) (356,135)
Prior years (765,049) (722,395)
  (1,165,957) (1,078,530)
Effect of foreign exchange movements 48,622
 4,764
Net loss and LAE reserves, September 30 3,224,382
 2,662,448
Reinsurance recoverable on unpaid losses, September 30 140,629
 97,070
Gross loss and LAE reserves, September 30 $3,365,011
 $2,759,518
Management believes that its use ofCompany uses both historical experience and industry-wide loss development factors to provide a reasonable basis for estimating future losses. In the future, certain events may be beyond the control of management, such as changes in law, judicial interpretations of law, and rates of inflation, which may favorably or unfavorably impact the ultimate settlement of the Company’s loss and LAE reserves.
The anticipated effect of inflation is implicitly considered when estimating liabilities for loss and LAE. While anticipated changes in claim costs due to inflation are considered in estimating the ultimate claim costs, changes in average severity of claims are caused by a number of factors that vary with the individual type of policy written. Ultimate losses are projected based on historical trends adjusted for implemented changes in underwriting standards, claims handling, policy provisions, and general economic trends. Those anticipated trends are monitored based on actual development and are modified if necessary.
The reserving process begins with the collection and analysis of paid losses and incurred claims data for each of the Company's contracts. While reserves are mostly reviewed on a contract by contract basis, paid loss and incurred claims data is also aggregated into reserving segments. The segmental data is disaggregated by reserving class and further disaggregated by either accident year (i.e. the year in which the loss event occurred) or by underwriting year (i.e. the year in which the contract generating the premium and losses incepted). The Company in some cases uses underwriting year information to analyze the Diversified Reinsurance segment and subsequently allocate reserves to the respective accident years. The reserve for loss and LAE consists of:
  June 30, 2020 December 31, 2019
Reserve for reported loss and LAE $1,114,598
 $1,271,358
Reserve for losses incurred but not reported ("IBNR") 956,624
 1,168,549
Reserve for loss and LAE $2,071,222
 $2,439,907

The following table represents a reconciliation of our beginning and ending gross and net loss and LAE reserves:
For the Six Months Ended June 30, 2020 2019
Gross loss and LAE reserves, January 1 $2,439,907
 $3,126,134
Less: reinsurance recoverable on unpaid losses, January 1 623,422
 71,901
Net loss and LAE reserves, January 1 1,816,485
 3,054,233
Net incurred losses related to:    
Current year 32,687
 240,978
Prior years (593) 33,272
  32,094
 274,250
Net paid losses related to:    
Current year (1,832) (3,186)
Prior years (387,023) (272,136)
  (388,855) (275,322)
Effect of foreign exchange rate movements (5,998) (3,880)
Net loss and LAE reserves, June 30 1,453,726
 3,049,281
Reinsurance recoverable on unpaid losses, June 30 617,496
 67,304
Gross loss and LAE reserves, June 30 $2,071,222
 $3,116,585

Prior period development arises from changes to loss estimates recognized in the current year that relate to loss reserves in previous calendar years. The favorable or unfavorable development reflects changes in management's best estimate of the ultimate losses under the relevant reinsurance policies after considerable review of changes in actuarial assessments.
During the three and ninesix months ended SeptemberJune 30, 2017,2020, the Company recognized approximately $77,670net favorable prior year loss development of $60 and $150,534,$593, respectively (2016(2019 - $12,446adverse $26,014 and $41,868,$33,272, respectively) of adverse development in both the Diversified Reinsurance and AmTrust Reinsurance segments as well as in its run-off business..
ForIn the Diversified Reinsurance segment, adversenet prior year loss development was $7,878adverse $362 and $39,486favorable $171 for the three and ninesix months ended SeptemberJune 30, 2017,2020, respectively (2016(2019 - $10,408favorable $1,052 and $37,404,$2,148, respectively) which. Prior year loss development for the six months ended June 30, 2020 was primarily due to favorable reserve development in German Auto Programs partly offset by adverse development in specific German Auto Programs for the three months ended June 30, 2020. The favorable loss development for the same respective periods in 2019 was largely due to a higher than expected loss emergence emanating largely fromfavorable development in German Auto Programs and facultative commercial auto as well as a handful of specific contracts across several lines of business.
For the AmTrust Reinsurance segment, the net adverse development was $61,127 and $100,872 for the three and nine months ended September 30, 2017, respectively, largely from program and non-program general liability, auto liability and workers compensation lines where elevated loss activity has been observed, $16,237 of which, came from one program that was terminated on September 1, 2017 (2016 - $1,993 and $1,524, respectively).
Our Other category also incurred adverse development of $8,665 and $10,176 for the three and nine months ended September 30, 2017, respectively, (2016 - $45 and $2,940, respectively) due to increased reserves in the remaining run–off litigated U.S. E&S property claims and increased reserves in the run–off of the NGHC Quota Share Reinsurance Agreement.reinsurance run-off lines.
MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)



7.9. Reserve for Loss and Loss Adjustment Expenses (continued)
ForIn the AmTrust Reinsurance segment, the net favorable prior year loss development was $422 for the three and ninesix months ended SeptemberJune 30, 2017,2020, respectively (2019 - adverse $27,090 and $35,216, respectively). The net favorable prior year loss development for the Company recorded an estimate of $20,000three and six months ended June 30, 2020 was primarily due to favorable development in losses from Hurricanes Harvey and Irma, predominantlyWorkers Compensation partly offset by adverse development within Commercial General Liability programs. The net adverse development in the Diversified segment largely fromthree and six months ended June 30, 2019 was primarily driven by Commercial Auto Liability in accident years 2015 to 2018, partly offset by favorable development in Workers Compensation.
The Other category had net favorable prior year loss development of $24 and net adverse prior year loss development of $204 for the propertythree and casualty lines. The Company expects no impact fromsix months ended June 30, 2019 due to increased reserves in the Mexico earthquakes or Hurricane Maria.run-off of the NGHC Quota Share. This contract was commuted in November 2019.
8.10. Related Party Transactions
The Founding Shareholders of the Company arewere Michael Karfunkel, George Karfunkel and Barry Zyskind. Michael Karfunkel passed away on April 27, 2016. Based on each individual's most recent public filing, Leah Karfunkel (wife of the late Michael Karfunkel) owns or controls approximately 8.0%7.9% of the outstanding shares of the Company and Barry Zyskind (the Company's non-executive chairman) owns or controls approximately 7.6%7.4% of the outstanding shares of the Company as at September 30, 2017.Company. George Karfunkel now owns or controls less than 5.0% of the outstanding shares of the Company as at September 30, 2017 so there is no longer a public filing requirement.Company. Leah Karfunkel and George Karfunkel are directors of AmTrust, and Barry Zyskind is the president, CEOchief executive officer and chairman of AmTrust. Leah Karfunkel, George Karfunkel and Barry Zyskind own or control approximately 42.8%53.4% of the outstanding sharesownership interests of AmTrust. AmTrust owns 1.6%Evergreen Parent LP, the ultimate parent of the issued and outstanding shares of National General Holdings Corporation ("NGHC") common stock, and Leah Karfunkel and the Michael Karfunkel 2005 Family Trust (which is controlled by Leah Karfunkel) owns 41.8% of the outstanding common shares of NGHC. Barry Zyskind is the non-executive chairman of NGHC.AmTrust.
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("Master Agreement"), by which they caused Maiden Bermuda, a wholly owned subsidiary of the Company,Reinsurance, and AmTrust's Bermuda reinsurance subsidiary, AmTrust International Insurance, Ltd. ("AII"),AII, to enter into a quota share reinsurance agreement (the "Reinsurance Agreement")the AmTrust Quota Share by which AII retrocedesretroceded to Maiden BermudaReinsurance an amount equal to 40% of the premium written by subsidiaries of AmTrust, net of the cost of unaffiliated inuring reinsurance and 40% of losses. The Master Agreement further provided that AII receivesreceive a ceding commission of 31% of ceded written premiums. On June 11, 2008, Maiden BermudaReinsurance and AII amended the Reinsurance AgreementAmTrust Quota Share to add Retail Commercial Package Business to the Covered Business. AII receives a ceding commission of 34.375% on Retail Commercial Package Business.
On July 1, 2016, the agreement was renewed through June 30, 2019. The agreement automatically renews for successive three-year periods thereafter unless AII orEffective July 1, 2018, the amount AEL ceded to Maiden Bermuda electsReinsurance was reduced to so terminate the Reinsurance Agreement by giving written notice to the other party not less than nine months prior to the expiration of any successive three-year period. 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.20%.
Additionally,Effective July 1, 2013, for the Specialty Program portion of Covered Business only, AII will bewas responsible for ultimate net loss otherwise recoverable from Maiden BermudaReinsurance to the extent that the loss ratio to Maiden Bermuda,Reinsurance, which shall be determined on an inception to date basis from July 1, 2007 through the date of calculation, is between 81.5% and 95% ("Loss Corridor"). Above and below the defined corridor,Loss Corridor, Maiden Bermuda will continueReinsurance continued to reinsure losses at its proportional 40% share of the AmTrust Quota Share. Effective July 31, 2019, the Loss Corridor was amended such that the maximum amount covered is $40,500, the amount calculated by Maiden Reinsurance for the Loss Corridor coverage as of June 30, 2019. Any development above this maximum amount will be subject to the coverage of the LPT/ADC Agreement. Please refer to Note 1. "Basis of Presentation" for additional information.
Effective January 1, 2019, Maiden Reinsurance and AII entered into the Partial Termination Amendment which amended the AmTrust Quota Share. The Partial Termination Amendment provided for the cut-off of the ongoing and unearned premium of AmTrust’s Small Commercial Business, comprising workers’ compensation, general liability, umbrella liability, professional liability (including cyber liability) insurance coverages, and U.S. Specialty Risk and Extended Warranty ("Terminated Business") as of December 31, 2018. Under the Partial Termination Amendment, the ceding commission payable by Maiden Reinsurance for its remaining in-force business immediately prior to January 1, 2019 increased by 5 percentage points with respect to in-force remaining business (excluding Terminated Business) and related unearned premium as of January 1, 2019. The Partial Termination Amendment resulted in Maiden Reinsurance returning $647,980 in unearned premium to AII, or $436,760 net of applicable ceding commission and brokerage as calculated during the second quarter of 2019.
Subsequently, on January 30, 2019, Maiden Reinsurance and AII agreed to terminate the remaining business subject to the AmTrust Quota Share on a run-off basis effective as of January 1, 2019.
Effective July 31, 2019, Maiden Reinsurance and AII entered into a Commutation and Release Agreement which provided for AII to assume all reserves ceded by AII to Maiden Reinsurance with respect to its proportional 40% share of the ultimate net loss under the AmTrust Quota Share related to the Commuted Business. Please refer to Note 1 "Basis of Presentation" for additional information.
AII and Maiden Reinsurance also agreed that, as of July 31, 2019, the AmTrust Quota Share shall be deemed amended as applicable so that the Commuted Business is no longer included as part of the Covered Business under the AmTrust Quota Share.
On January 30, 2019, in connection with the termination of the reinsurance agreement described above, the Company and AmTrust entered into a second amendment to the Master Agreement between the parties, originally entered into on July 3, 2007, to remove the provisions requiring AmTrust to reinsure business with the Company.

MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per the Reinsurance Agreement.share data)
AmTrust
10. Related Party Transactions (continued)
European Hospital Liability Quota Share Agreement ("European Hospital Liability Quota Share")
Effective April 1, 2011, Maiden Bermuda,Reinsurance entered into a quota share reinsurance contractthe European Hospital Liability Quota Share with AmTrust Europe Limited ("AEL")AEL and AmTrust International Underwriters Limited ("AIUL"),AIU DAC, both wholly owned subsidiaries of AmTrust. Pursuant to the terms of the contract,European Hospital Liability Quota Share, Maiden BermudaReinsurance assumed 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 contractEuropean Hospital Liability Quota Share 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 (€10,000 effective January 1, 2012) or currency equivalent (on a 100% basis) per original claim for any one original policy. Maiden Bermuda will payReinsurance paid a ceding commission of 5%. The agreement has been renewed through March 31, 2018 and can be terminated at any April 1 by either party on four months notice.contracts assumed under the European Hospital Liability Quota Share. 
Effective July 1, 2016, the contractEuropean Hospital Liability Quota Share was amended such that Maiden BermudaReinsurance assumes from AEL 32.5% of the premiums and losses of all policies written or renewed on or after July 1, 2016 until June 30, 2017 and 20% of all policies written or renewed on or after July 1, 2017. ForSubsequently, on January 30, 2019, Maiden Reinsurance, AEL and AIU DAC agreed to terminate the three and nine months ended September 30, 2017,European Hospital Liability Quota Share on a run-off basis effective as of January 1, 2019.
The table below shows the Company recorded approximately $138,171 and $460,667 (2016 - $163,336 and $447,767, respectively) of commission expense as a resulteffect of both of these quota share arrangements with AmTrust.
MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)

8. Related Party Transactions (continued)
Other Reinsurance Agreements
Effective September 1, 2010,AmTrust on the Company, through a subsidiary, entered into a quota share reinsurance agreement with Technology Insurance Company, Inc. ("Technology"), a subsidiary of AmTrust. Under the agreement, we ceded (a) 90% of its gross liability written under the Open Lending Program ("OPL") and (b) 100% of its surplus lines general liability business under the Naxos Avondale Specialty Casualty Program ("NAXS"). Our involvement is limited to certain states where Technology was not fully licensed. The agreement also provides that we receive a ceding commission of 5% of ceded written premiums.
The OPL program was terminated on December 31, 2011, on a run-off basis, and the NAXS program was terminated on October 31, 2012. We recorded $1 and $4 of ceded premiumsCompany's Condensed Consolidated Income Statements for the three and ninesix months ended SeptemberJune 30, 2017, respectively (2016 - $nil2020 and $12, respectively).2019, respectively:
Effective April 1, 2012, the Company, through a subsidiary, entered into a reinsurance agreement with AmTrust's wholly owned subsidiary, AmTrust North America, Inc. ("AmTrust NA"). We indemnify AmTrust NA, on an excess of loss basis, as a result of losses occurring on AmTrust NA's new and renewal policies relating to the lines of business classified as Automobile Liability by AmTrust NA in its annual statement utilizing the specific underwriting guidelines defined in the reinsurance agreement. AmTrust NA shall retain the first $1,000 of loss, per any one policy or per any one loss occurrence. This agreement has a term of one year and automatically renews annually unless terminated pursuant to the terms of the agreement. During the three and nine months ended September 30, 2017, under the terms of this agreement, we have recorded net premiums earned of approximately $351 and $1,182, respectively (2016 - $305 and $745, respectively) and commission expense of $53 and $256, respectively (2016 - $87 and $187, respectively).
  For the Three Months Ended June 30, For the Six Months Ended June 30,
  2020 2019 2020 2019
Gross and net premiums written $(4,705) $(9,127) $(4,705) $(585,604)
Net premiums earned 9,540
 111,833
 28,224
 269,963
Net loss and LAE (4,970) (109,091) (19,015) (247,035)
Commission expenses (3,780) (41,509) (10,774) (101,865)

Collateral provided to AmTrust
a) AmTrust Quota Share Reinsurance Agreement
In order toTo provide AmTrust's U.S. insurance subsidiaries with credit for reinsurance on their statutory financial statements, AII, as the direct reinsurer of the AmTrust's insurance subsidiaries, has established trust accounts ("Trust Accounts") for their benefit. Maiden BermudaReinsurance has agreed to provide appropriate collateral to secure its proportional share under the Reinsurance AgreementAmTrust Quota Share of AII's obligations to the AmTrust subsidiaries to whom AII is required to provide collateral. This collateral may be in the form of (a) assets loaned by Maiden BermudaReinsurance to AII for deposit into the Trust Accounts, pursuant to a loan agreement between those parties, (b) assets transferred by Maiden BermudaReinsurance for deposit into the Trust Accounts, or (c) a letter of credit obtained by Maiden BermudaReinsurance and delivered to an AmTrust subsidiary on AII's behalf, or (d) premiums withheld by an AmTrust subsidiary atbehalf. Maiden Bermuda's request in lieu of remitting such premiums to AII. Maiden BermudaReinsurance may provide any or a combination of these forms of collateral, provided that the aggregate value thereof equals Maiden Bermuda'sReinsurance's proportionate share of its obligations under the Reinsurance Agreement with AII.
AmTrust Quota Share. Maiden BermudaReinsurance satisfied its collateral requirements under the Reinsurance AgreementAmTrust Quota Share with AII as follows:
•
•
by lending funds in the amount of $167,975 at June 30, 2020 and December 31, 2019 pursuant to a loan agreement entered into between those parties. Advances under the loan are secured by promissory notes. This loan was assigned by AII to AmTrust effective December 31, 2014 and is carried at cost. Interest is payable at a rate equivalent to the Federal Funds Effective Rate ("Fed Funds") plus 200 basis points per annum. Please see "Note 4. (c) Investments" for the total amount of interest earned from this loan. The interest income on the loan was $860 and $2,225 for the three and six months ended June 30, 2020, respectively (2019 - $1,842 and $3,664, respectively) and the effective yield was 2.0% and 2.6% for the same respective periods (2019 - 4.4% and 4.4%). On January 30, 2019, in connection with the termination of the reinsurance agreements described above, the Company and AmTrust entered into an amendment to the Loan Agreement between Maiden Reinsurance, AmTrust and AII, originally entered into on November 16, 2007, extending the maturity date to January 1, 2025 and acknowledges that due to the termination of the AmTrust Quota Share, no further loans or advances may be made pursuant to the Loan Agreement;
•
effective December 1, 2008, the Company entered into a Reinsurer Trust Assets Collateral agreement to provide to AII sufficient collateral to secure its proportional share of AII's obligations to the U.S. AmTrust subsidiaries. The amount of the collateral at June 30, 2020 was $861,978 (December 31, 2019 - $1,155,955) and the accrued interest was $3,273 (December 31, 2019 - $7,366). Please refer to "Note 4. (e) Investments" for additional information;
on January 11, 2019, a portion of the amount of $167,975 at September 30, 2017 and December 31, 2016 pursuantexisting trust accounts used for collateral on the AmTrust Quota Share were converted to a loan agreement entered into between those parties. Advances under the loan, which were made in three separate tranchesfunds withheld arrangement. The Company transferred cash and investments of $113,542 (December 18, 2007), $20,193 (April 11, 2008) and $34,240 (June 23, 2008), are secured by promissory notes. The maturity date with respect to each advance is ten years from the date the advance was made. This loan was assigned by AII$575,000 to AmTrust effective December 31, 2014as a funds withheld receivable which initially had an annual interest rate of 3.5%, subject to annual adjustment. The annual interest rate was adjusted to 2.65% for the three and is carried at cost. Interest is payable at a rate equivalent tosix months ended June 30, 2020. At June 30, 2020, the one-month LIBOR plus 90 basis points per annum; and
•effective December 1, 2008, the Company entered into a Reinsurer Trust Assets Collateral agreement to provide to AII sufficient collateral to secure its proportional sharebalance of AII's obligations to the U.S. AmTrust subsidiaries. The amount of the collateral, at September 30, 2017funds withheld was approximately $3,245,369$575,000 (December 31, 20162019 - $2,766,032)$575,000) and the accrued interest was $21,288$3,803 (December 31, 20162019 - $20,420)$5,073). Please referThe interest income on the funds withheld receivable was $3,806 and $7,606 for the three and six months ended June 30, 2020, respectively (2019 - $5,017 and $9,443, respectively).

MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)

10. Related Party Transactions (continued)
Pursuant to "Note 4. (e) Investments"the terms of the LPT/ADC Agreement, Maiden Reinsurance, Cavello and AmTrust and certain of its affiliated companies entered into a Master Collateral Agreement (“MCA”) to define and enable the operation of collateral provided under the AmTrust Quota Share. Under the MCA, Cavello provided letters of credit on behalf of Maiden Reinsurance to AmTrust in an amount representing Cavello’s obligations under the LPT/ADC Agreement. Because these letters of credit replaced other collateral previously provided directly by Maiden Reinsurance to AmTrust, the MCA coordinates the collateral protection that will be provided to AmTrust to ensure that no gaps in collateral funding occur by operation of the LPT/ADC Agreement and related MCA. As a result of entering into both the LPT/ADC Agreement and the MCA, certain post-termination endorsements (“PTEs”) to the AmTrust Quota Share between AII and Maiden Reinsurance were required.
Effective July 31, 2019, the PTEs: i) enable the operation of both the LPT/ADC Agreement and MCA by making provision for additional information.certain forms of collateral, including letters of credit provided by Cavello on Maiden Reinsurance’s behalf, and further defines the permitted use and return of collateral; and ii) increase the required funding percentage for Maiden Reinsurance under the collateral arrangements between the parties to 105% of its obligations, subject to a minimum excess funding requirement of $54,000, as may be mutually amended by the parties from time to time. Under certain defined conditions, Maiden Reinsurance may be required to increase this funding percentage to 110%.
Effective March 16, 2020, Maiden Reinsurance discontinued as a Bermuda company and completed its re-domestication to the State of Vermont. Bermuda is a Solvency II equivalent jurisdiction and the State of Vermont is not such a jurisdiction; therefore, the collateral provided under the respective agreements with AmTrust subsidiaries was strengthened to reflect the impact of the re-domestication concurrent with the date of Maiden Reinsurance’s re-domestication to Vermont. Maiden Reinsurance and AmTrust agreed to: 1) amend the AmTrust Quota Share pursuant to Post Termination Endorsement No. 2 effective March 16, 2020; and 2) amend the European Hospital Liability Quota Share pursuant to Post Termination Endorsement No. 1 effective March 16, 2020.
Pursuant to the terms of Post Termination Endorsement No. 2 to the AmTrust Quota Share, Maiden Reinsurance strengthened the collateral protection provided by Maiden Reinsurance to AII by increasing the required funding percentage for Maiden Reinsurance under the collateral arrangements between the parties to 110% of its obligations, subject to a minimum excess funding requirement of $54,000, as may be mutually amended by the parties from time to time. Post Termination Endorsement No. 2 also sets forth conditions by which the funding percentage will be reduced and the sequence of how collateral will be utilized as obligations as defined under the AmTrust Quota Share are satisfied.
Pursuant to the terms of Post Termination Endorsement No. 1 to the European Hospital Liability Quota Share, Maiden Reinsurance strengthened the collateral protection provided by Maiden Reinsurance to AEL and AIU DAC by increasing the required funding percentage for Maiden Reinsurance under the collateral arrangements between the parties to the greater of 120% of the Exposure (as defined therein) and the amount of security required to offset the increase in the Solvency Capital Requirement (“SCR”) that results from the changes in the SCR which arise out of Maiden Reinsurance's re-domestication as compared to the SCR calculation if Maiden Reinsurance had remained domesticated in a Solvency II equivalent jurisdiction with a solvency ratio above 100% and provided collateral equivalent to 100% of the Exposure.
b) European Hospital Liability Quota Share
Collateral has been provided to both AEL requested that Maiden Bermuda provide collateral to secure its proportional shareand AIU DAC under the European Hospital Liability Quota Share agreement. Please referShare. For AEL, the amount of the collateral held in reinsurance trust accounts at June 30, 2020 was $219,170 (December 31, 2019 - $253,631) and the accrued interest was $1,764 (December 31, 2019 - $1,821). For AIU DAC, the Company utilizes funds withheld to "Note 4. (e) Investments"satisfy its collateral requirements. At June 30, 2020, the amount of funds withheld was $93,188 (December 31, 2019 - $57,305) and the accrued interest was $200 (December 31, 2019 - $269). AIU DAC pays Maiden Reinsurance a fixed annual interest rate of 0.5%, on the average daily funds withheld balance which is subject to annual adjustment.The interest income on the funds withheld receivable was $127 and $198 for additional information.the three and six months ended June 30, 2020, respectively (2019 - $72 and $125, respectively).
Brokerage Agreement
Effective July 1, 2007, the Company entered into a reinsurance brokerage agreement with AII Reinsurance Broker Ltd. ("AIIB"), a wholly owned subsidiary of AmTrust. Pursuant to the brokerage agreement, AIIB providesprovided brokerage services relating to the Reinsurance AgreementAmTrust Quota Share and the European Hospital Liability Quota Share agreement for a fee equal to 1.25% of the premium assumed. The brokerage fee is payable in consideration of AIIB's brokerage services. AIIB iswas not the Company's exclusive broker. The brokerage agreement may bewas terminated upon 30 days written notice by either party. as of March 15, 2019.
Maiden BermudaReinsurance recorded approximately $5,642$119 and $18,662$353 of reinsurance brokerage expense for the three and ninesix months ended SeptemberJune 30, 2017,2020, respectively (2016(2019 - $6,652$1,398 and $18,330,$3,375, respectively) and deferred reinsurance brokerage of $1,961 at SeptemberJune 30, 2017 of $15,4762020 (December 31, 20162019 - $14,395)$2,372) as a result of this agreement.
The Company also paid brokerage fees to AmTrust's subsidiary, AmTrust North America, of $54 and $55 for the three and nine months ended September 30, 2017 (2016 - $41 and $42), respectively, for acting as insurance intermediary in relation to certain insurance placements.
MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)

8. Related Party Transactions (continued)
Asset Management Agreement
Effective July 1, 2007, the Company entered into an asset management agreement with AII Insurance Management Limited ("AIIM"), a wholly owned subsidiary of AmTrust, pursuant to which AIIM has agreed to provide investment management services to the Company. Effective January 1, 2018, AIIM provides investment management services for a quarterly fee of 0.0375% if0.02125% of the average value of the account for the previous calendar quarter is greater than $1 billion.account. The agreement may be terminated upon 30 days written notice by either party. The Company recorded approximately $1,927$350 and $5,586$750 of investment management fees for the three and ninesix months ended SeptemberJune 30, 2017,2020, respectively (2016(2019 - $1,780$678 and $5,122,$1,453, respectively) as a result ofunder this agreement.
Other
The Company entered into time sharing agreements for the lease of aircraft owned by AmTrust Underwriters, Inc. ("AUI"), a wholly owned subsidiary of AmTrust, and by AmTrust on March 1, 2011 and November 5, 2014, respectively. The agreements automatically renew for successive one-year terms unless terminated in accordance with the provisions of the agreements. Pursuant to the agreements, the Company will reimburse AUI and AmTrust for actual expenses incurred as allowed by Federal Aviation Regulations. For the three and nine months ended September 30, 2017, the Company recorded an expense of $nil and $39, respectively (2016 - $22 and $61, respectively) for the use of the aircraft.
NGHC
The following describes transactions between the Company and NGHC and its subsidiaries:
NGHC Quota Share
Maiden Bermuda, effective March 1, 2010, had a 50% participation in the NGHC Quota Share, by which it received 25% of net premiums of the personal lines automobile business and assumed 25% of the related net losses. On August 1, 2013, the Company received notice from NGHC of the termination of the NGHC Quota Share effective on that date. The Company and NGHC mutually agreed that the termination is on a run-off basis.
Other
Effective April 1, 2015, Maiden US renewed the Medical Excess of Loss reinsurance agreement with wholly owned subsidiaries of NGHC, Distributors Insurance Company PCC, AIBD Insurance Company IC and Professional Services Captive Corporation IC. Pursuant to this agreement, Maiden US indemnifies on an excess of loss basis, for the amounts of net loss, paid from April 1, 2015 through March 31, 2016. Maiden US was liable for 100% of the net loss for each covered person per agreement year in excess of the $1,175 retention (each covered person per agreement year). Maiden US' liability did not exceed $8,825 per covered person per agreement year. In addition, Maiden US continued to indemnify extra contractual obligations with a maximum liability of $2,000. This agreement terminated on March 31, 2016 and Maiden US was relieved of all liability hereunder for losses incurred or paid subsequent to such termination date. Under these agreements, Maiden US recorded no premiums earned for the three and nine months ended September 30, 2017 (2016 - $nil and $157, respectively).
Effective May 1, 2015, Maiden US entered into an agreement with several NGHC subsidiaries for medical excess of loss programs. This program covers employer aggregate and traditional specific medical stop loss policies underwritten by the Managing General Agent that they support. The NGHC companies covered under the treaty are Integon Indemnity Insurance Company, Integon National Insurance Company and National Health Insurance Company. This agreement expired on April 30, 2017. Upon expiration of this agreement, coverage remains in full force and effect on all assumed liability for policies in force on the date of expiration until expiration, cancellation or next anniversary date of such subject policies.
The treaty limit of the aggregate medical stop loss is subject to a limit of $4,000 in excess of $1,000 any one insured person. The treaty limit on the traditional specific medical stop loss Layer 1 is subject to a limit of $1,000 in excess of $1,000 any one insured person; Layer 2 is subject to a limit of $3,000 in excess of $2,000 any one insured person and Layer 3 is subject to a limit of $5,000 in excess of $5,000. In addition to these limits, the Company shall cover extra contractual obligations arising under this agreement with a maximum liability of $2,000. Under these agreements, Maiden US recorded $163 and $403 of premiums earned for the three and nine months ended September 30, 2017, respectively (2016 - $136 and $295, respectively).
MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)


9.10. Related Party Transactions (continued)
Insurance Management Services Agreement
Effective August 31, 2019, the Company entered into an agreement with Risk Services - Vermont, Inc. ("Risk Services"), an affiliate of AmTrust. Pursuant to the agreement, Risk Services agreed to provide insurance management services to the Company including regulatory compliance services in connection with the re-domestication, licensing and operation of Maiden Reinsurance in the State of Vermont. The initial term of the agreement is three years and will automatically renew for an additional three years until either party gives written notice of its intention to terminate this agreement at least three months prior to the commencement of the next applicable period. The fee for this agreement was an initial $100 retainer for re-domestication services and $100 annually and reimbursement for reasonable out-of-pocket expenses incurred by Risk Services pursuant to the terms of the agreement. The Company recorded $25 and $50 of fees for the three and six months ended June 30, 2020, respectively.
683 Capital Partners, LP (“683 Partners”)
683 Partners and its affiliates currently own or control approximately 9.2% of the outstanding common shares of the Company and is thus deemed a related party at June 30, 2020. 683 Partners and its affiliates also reported that they own Preference Shares of the Company and Senior Notes issued by both Maiden Holdings and Maiden NA.
Limited Partnership Agreement with 683 Capital Management, LLC ("683 Capital")
In July 2020, the Company and 683 Capital entered into a limited partnership agreement (“683 LP Agreement”) whereby 683 Capital will separately manage certain funds of Maiden Reinsurance at its discretion, subject to guidelines established by the parties. Under the 683 LP Agreement, Maiden Reinsurance will pay 683 Capital a management fee and subject to certain metrics agreed to by the parties, an incentive fee upon attainment of those metrics. Maiden Reinsurance may periodically and in its discretion increase the amount invested under the 683 LP Agreement, and subject to certain conditions, reduce the amount invested under the 683 LP Agreement.
11. Commitments and Contingencies
There are no material changes from the commitments, contingencies and concentrations previously disclosed in the Company’s Form 10-K for the year ended December 31, 2019.
a)Concentrations of Credit Risk
At SeptemberJune 30, 20172020 and December 31, 2016,2019, the Company’s assets where significant concentrations of credit risk may exist include investments, cash and cash equivalents, loan to related party, reinsurance balances receivable, and reinsurance recoverable on unpaid losses.
The reinsurers with the three largest balances accounted for 44.7%, 15.7% and 14.6%, respectively, of the Company's reinsurance recoverable on unpaid losses balance at September 30, 2017 (December 31, 2016 – 54.8%, 31.6% and 2.9%, respectively). At September 30, 2017, 98.7% (December 31, 2016 - 97.2%)funds withheld receivable. Please refer to "Note 8. Reinsurance" for additional information regarding the Company's credit risk exposure on its reinsurance counterparties including the impact of the reinsuranceLPT/ADC Agreement effective January 1, 2019. The Company 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. Letters of credit are provided by its reinsurers for material amounts recoverable on unpaid losses was due from reinsurers with credit ratings from A.M Best of A or better, and 1.3% (December 31, 2016 - 2.8%) of the reinsurance recoverable on unpaid losses was due from reinsurers with ratings of B++ or lower. At September 30, 2017, 89.1% (December 31, 2016 - 98.6%) of reinsurance recoverable on unpaid losses, due from reinsurers with ratings of B++ or lower, were collateralized.
At September 30, 2017 and December 31, 2016, the Company had no valuation allowance against reinsurance recoverable on unpaid losses.as discussed further in "Note 8 — Reinsurance".
The Company manages concentration of credit risk in theits investment portfolio through issuer and sector exposure limitations. The Company believes it bears minimal credit risk in its cash on deposit. The Company also monitors the credit risk related to the loan to related party and its reinsurance balancesfunds withheld receivable, within which the largest balance is due from AmTrust. AmTrust has a financial strength/credit rating of A- from A.M. Best at June 30, 2020. To mitigate credit risk, wethe Company generally havehas a contractual right of offset thereby allowing usclaims to settle claimsbe settled net of any premiums or loan receivable. The Company believes these balances as at June 30, 2020 will be fully collectible.
b)Concentrations of RevenueOperating Lease Commitments
DuringThe Company leases office spaces, housing, office equipment and company vehicles under various operating leases expiring in various years through 2022. The Company did not enter into any new lease arrangements during the three and ninesix months ended SeptemberJune 30, 2017, our gross premiums written from AmTrust accounted for $420,019 or 66.6%2020. The Company's leases are all currently classified as operating leases and $1,575,677 or 69.7%none of them have non-lease components. For operating leases that have a lease term of more than twelve months, the Company recognized a lease liability and a right-of-use asset in the Company's Condensed Consolidated Balance Sheets at the present value of the remaining lease payments until expiration. As the lease contracts generally do not provide an implicit discount rate, the Company used the weighted-average discount rate of 10%, respectivelyrepresenting its secured incremental borrowing rate, in calculating the present value of the lease liability. The exercise of lease renewal options is at the sole discretion of the Company and none of our current lease renewal options are deemed to be reasonably certain to be exercised. The Company has made an accounting policy election not to include renewal, termination, or purchase options that are not reasonably certain of exercise when determining the term of the borrowing. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company's weighted-average remaining lease term is 2.3 years.
At June 30, 2020, the Company's future lease obligations of $1,775 (December 31, 2019 - $2,342) was calculated based on the present value of future annual rental commitments excluding taxes, insurance and other operating costs for non-cancellable operating leases discounted using its secured incremental borrowing rate. This amount has been recognized on the Condensed Consolidated Balance Sheets as a lease liability of $1,775 within accrued expenses and other liabilities with an equivalent amount for the right-of-use asset presented as part of other assets. Under Topic 842, Leases, the Company continues to recognize the related leasing expense on a straight-line basis over the lease term in the Condensed Consolidated Statements of Income.
MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)

11. Commitments and Contingencies (continued)
The Company's total gross premiums written (2016 – $520,104 or 73.6%lease expense for the three and $1,591,902 or 70.5%,six months ended June 30, 2020 was $449 and $859, respectively (2019 - $389 and $810, respectively) which was recognized within net income consistent with the accounting treatment in prior periods under Topic 840. The operating cash outflows from operating leases included in the measurement of the lease liability during the three and six months ended June 30, 2020 was $340 and $680, respectively (2019 - $340 and $681, respectively).
The scheduled maturity of the Company's operating lease liabilities are expected to be as follows:
 June 30, 2020
2020$500
2021741
2022741
Discount for present value(207)
Total discounted operating lease liabilities$1,775

c)Dividends Declared
On August 3, 2017, the Company's Board of Directors authorized the following quarterly dividend:
Dividend per SharePayable on:Record date:
Common shares$0.15October 16, 2017October 2, 2017
d)Legal Proceedings
Except as noted below, the Company is not a party to any material legal proceedings. From time to time, the Company is subject to routine legal proceedings, including arbitrations, arising in the ordinary course of business. These legal proceedings generally relate to claims asserted by or against the Company in the ordinary course of insurance or reinsurance operations. Based on the Company's opinion, the eventual outcome of these legal proceedings is not expected to have a material adverse effect on its financial condition or results of operations.
In April 2009, the Company learned that Bentzion S. Turin, the former Chief Operating Officer, General Counsel and Secretary of Maiden Holdings and Maiden Bermuda,Reinsurance, sent a letter to the U.S. Department of Labor claiming that his employment with the Company was terminated in retaliation for corporate whistle blowingwhistle-blowing in violation of the whistle blowerwhistle-blower protection provisions of the Sarbanes-Oxley Act of 2002. Mr. Turin alleged that he was terminated for raising concerns regarding corporate governance with respect to the negotiation of the terms of the Trust Preferred Securities Offering. He seeks reinstatement as Chief Operating Officer, General Counsel and Secretary of Maiden Holdings and Maiden Bermuda,Reinsurance, back pay and legal fees incurred. 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. The Company moved to dismiss Mr. Turin's complaint, and its 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. On March 29, 2013, the Administrative Review Board reversed the dismissal of the complaint on procedural grounds, and remanded the case to the administrative law judge. The administrative hearing began in September 2014. Twelve hearing days have taken place,2014 and we expect the hearings to concludeconcluded in late 2017 or earlyNovember 2018. The Company believes that it had good and sufficient reasons for terminating Mr. Turin's employment and that the claim is without merit. The Company will continue to vigorously defend itself against this claim.
A putative class action complaint was filed against Maiden Holdings, Arturo M. Raschbaum, Karen L. Schmitt, and John M. Marshaleck in the United States District Court for the District of New Jersey on February 11, 2019. On February 19, 2020, the Court appointed lead plaintiffs, and on May 1, 2020, lead plaintiffs filed an amended class action complaint (the “Amended Complaint”).The Amended Complaint asserts violations of Section 10(b) of the Exchange Act and Rule 10b-5 (and Section 20(a) for control person liability) arising in large part from allegations that Maiden failed to take adequate loss reserves in connection with reinsurance provided to AmTrust. Plaintiffs further claim that certain of Maiden Holdings’ representations concerning its business, underwriting and financial statements were rendered false by the allegedly inadequate loss reserves, that these misrepresentations inflated the price of Maiden Holdings' common stock, and that when the truth about the misrepresentations was revealed, the Company’s stock price fell, causing Plaintiffs to incur losses. The Company believes the claims are without merit and intends to vigorously defend itself. It is possible that additional lawsuits will be filed against the Company, its subsidiaries and its respective officers due to the diminution in value of our securities as a result of our operating results and financial condition. It is currently uncertain as to the effect of such litigation on our business, operating results and financial condition.
MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)


10.12. 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 September 30, 2017 2016
Numerator:    
Net (loss) income attributable to Maiden $(55,051) $40,852
Dividends on preference shares – Series A, C and D (8,545) (6,032)
Dividends on convertible preference shares – Series B —
 (2,991)
Amount allocated to participating common shareholders(1)
 (6) (19)
Numerator for basic EPS - net (loss) income allocated to Maiden common shareholders (63,602) 31,810
Potentially dilutive securities:    
Dividends on convertible preference shares – Series B(2)
 —
 2,991
Numerator for diluted EPS - net (loss) income allocated to Maiden common shareholders after assumed conversion $(63,602) $34,801
Denominator:    
Weighted average number of common shares – basic 85,859,201
 75,993,451
Potentially dilutive securities:    
Share options and restricted share units —
 1,100,206
Convertible preference shares(2)
 —
 9,057,294
Adjusted weighted average number of common shares and assumed conversions – diluted 85,859,201
 86,150,951
Basic (loss) earnings per share attributable to Maiden common shareholders: $(0.74) $0.42
Diluted (loss) earnings per share attributable to Maiden common shareholders: $(0.74) $0.40
     
For the Nine Months Ended September 30, 2017 2016
Numerator:    
Net (loss) income attributable to Maiden $(44,854) $117,678
Dividends on preference shares – Series A, C and D (20,611) (18,752)
Dividends on convertible preference shares – Series B —
 (8,971)
Amount allocated to participating common shareholders(1)
 (17) (55)
Numerator for basic EPS - net (loss) income allocated to Maiden common shareholders (65,482) 89,900
Potentially dilutive securities:    
Dividends on convertible preference shares – Series B(2)
 —
 8,971
Numerator for diluted EPS - net (loss) income allocated to Maiden common shareholders after assumed conversion $(65,482) $98,871
Denominator:    
Weighted average number of common shares – basic 86,256,481
 74,625,839
Potentially dilutive securities:    
Share options and restricted share units —
 1,085,740
Convertible preference shares(2)
 —
 10,306,440
Adjusted weighted average number of common shares and assumed conversions – diluted 86,256,481
 86,018,019
Basic (loss) earnings per share attributable to Maiden common shareholders: $(0.76) $1.20
Diluted (loss) earnings per share attributable to Maiden common shareholders: $(0.76) $1.15
  For the Three Months Ended June 30, For the Six Months Ended June 30,
  2020 2019 2020 2019
Numerator:        
Net income (loss) from continuing operations $9,212
 $3,976
 $30,073
 $(29,926)
Amount allocated to participating common shareholders(1)
 (168) —
 (390) —
Income (loss) attributable to common shareholders, before discontinued operations 9,044
 3,976
 29,683
 (29,926)
Loss from discontinued operations, net of income tax —
 (19,389) —
 (22,123)
Net income (loss) allocated to common shareholders $9,044

$(15,413) $29,683
 $(52,049)
Denominator:        
Weighted average number of common shares – basic(2)
 84,537,385
 83,058,123
 83,896,804
 83,008,888
Share options and restricted share units —
 17,033
 —
 —
Adjusted weighted average number of common shares – diluted 84,537,385
 83,075,156
 83,896,804
 83,008,888
Basic and diluted earnings (loss) from continuing operations per share attributable to common shareholders $0.11
 $0.04
 $0.35
 $(0.36)
Basic and diluted loss from discontinued operations per share attributable to common shareholders —
 (0.23) —
 (0.27)
Basic and diluted earnings (loss) per share attributable to common shareholders: $0.11
 $(0.19) $0.35
 $(0.63)

(1)This represents earnings allocated tothe share in net income using the two class method of the holders of non-vested restricted shares issued to the Company's employees under the 2007 Share2019 Omnibus Incentive Plan.
(2)
Please refer to "Note 13. Shareholders' Equity" and "Note 14. Share Compensation and Pension Plans" of the Notes to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2016, 2019, for the terms and conditions of each of these anti-dilutive instruments.securities that could potentially be dilutive in the future. For the three and six months ended June 30, 2020, there were 0 potentially dilutive securities.

MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)

11.13. Shareholders' Equity
a)Common Shares
At SeptemberJune 30, 2017,2020, the aggregate authorized share capital of the Company is 150,000,000 shares from which the Company has issued 87,728,55489,732,851 common shares, of which 84,624,82984,718,837 common shares are outstanding, and 18,600,000 preference shares, all of which are outstanding. The remaining 43,671,44641,667,149 shares are undesignated at SeptemberJune 30, 2017.2020. For further discussion on the components of Shareholders' Equity, please refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2016.2019.
b)
Preference Shares – Series D
On June 15, 2017, the Company issued and authorized a total of 6,000,000, 6.700% Preference Shares – Series D (the "Preference Shares - Series D"), par value $0.01 per share, at a price of $25 per preference share. The Company's total net proceeds from the offering was $144,942, after deducting issuance costs of $5,058, which were recognized as a reduction in additional paid-in capital. The Preference Shares – Series D have no stated maturity date and are redeemable in whole or in part at the sole option of the Company any time after June 15, 2022, subject to certain regulatory restrictions at a redemption price of $25 per preference share plus any declared and unpaid dividends, without accumulation of any undeclared dividends. Additionally, at any time prior to June 15, 2022, the Company may redeem all but not less than all of the Series D Preference Shares at a redemption price of $26 per share, plus declared and unpaid dividends, if any, to, but excluding, the date of redemption subject to certain conditions and regulatory approval.
Dividends on the Preference Shares – Series D are non-cumulative. Consequently, in the event a dividend is not declared on the Preference Shares – Series D for any dividend period, holders of Preference Shares – Series D will not be entitled to receive a dividend for such period, and such undeclared dividend will not accrue and will not be payable. The holders of Preference Shares – Series D will be entitled to receive dividend payments only when, as and if declared by the Company's board of directors or a duly authorized committee of the board of directors. Any such dividends will be payable from, and including, the date of original issue on a non-cumulative basis, quarterly in arrears.
To the extent declared, these dividends will accumulate, with respect to each dividend period, in an amount per share equal to 6.7% of the $25 liquidation preference per annum. During any dividend period, so long as any Preference Shares – Series D remain outstanding, unless the full dividends for the latest completed dividend period on all outstanding Preference Shares – Series D have been declared and paid, no dividend shall be paid or declared on the common shares.
The holders of the Preference Shares – Series D have no voting rights other than the right to elect up to two directors if preference share dividends are not declared and paid for six or more dividend periods.
c)Treasury Shares
During the three and ninesix months ended SeptemberJune 30, 2017,2020, the Company repurchased a total shares of 2,015,700 common shares at an average price of $7.11 per share under its share repurchase authorization. As at September 30, 2017, the Company has a remaining authorization of $85,662 for share repurchases.
In addition, during the nine months ended September 30, 2017, the Company repurchased a total of 38,122 shares834 (2019 - 23,220) at an average price per share of $15.06$1.13 (2019 - $0.78) from employees, which represent withholdings in respect of tax obligations on the vesting of restricted shares and performance based shares. None
The Company has a remaining authorization of these$74,245 for share repurchases took placeat June 30, 2020 (December 31, 2019 - $74,245). NaN repurchases were made during the three and six months ended SeptemberJune 30, 2017.

2020 and 2019 under the share repurchase plan.
MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)


11.13. Shareholders' Equity (continued)
d)c)Accumulated Other Comprehensive Income (Loss)
The following tables set forth financial information regarding the changes in the balances of each component of AOCI:
For the Three Months Ended September 30, 2017 Change in net unrealized gains on investment Foreign currency translation adjustments Total
For the Three Months Ended June 30, 2020 Change in net unrealized gains on investment Foreign currency translation Total
Beginning balance $27,866
 $7,629
 $35,495
 $(22,125) $(4,163) $(26,288)
Other comprehensive income (loss) before reclassifications 24,994
 (10,828) 14,166
 41,677
 (3,820) 37,857
Amounts reclassified from AOCI to net income, net of tax (3,650) —
 (3,650) (2,368) —
 (2,368)
Net current period other comprehensive income (loss) 21,344
 (10,828) 10,516
 39,309
 (3,820) 35,489
Ending balance 49,210
 (3,199) 46,011
Less: AOCI attributable to noncontrolling interest —
 (68) (68)
Ending balance, Maiden shareholders $49,210
 $(3,131) $46,079
 $17,184
 $(7,983) $9,201
            
For the Three Months Ended September 30, 2016 Change in net unrealized gains on investment Foreign currency translation adjustments Total
For the Three Months Ended June 30, 2019 Change in net unrealized gains on investment Foreign currency translation Total
Beginning balance $93,793
 $25,034
 $118,827
 $1,714
 $(1,934) $(220)
Other comprehensive income (loss) before reclassifications 8,899
 (2,730) 6,169
 42,979
 (6,192) 36,787
Amounts reclassified from AOCI to net income, net of tax (1,202) —
 (1,202)
Amounts reclassified from AOCI to net loss, net of tax (15,415) —
 (15,415)
Net current period other comprehensive income (loss) 7,697
 (2,730) 4,967
 27,564
 (6,192) 21,372
Ending balance 101,490
 22,304
 123,794
Less: AOCI attributable to noncontrolling interest —
 (82) (82)
Ending balance, Maiden shareholders $101,490
 $22,386
 $123,876
 $29,278
 $(8,126) $21,152
      
For the Nine Months Ended September 30, 2017 Change in net unrealized gains on investment Foreign currency translation adjustments Total
Beginning balance $(20,716) $35,604
 $14,888
Other comprehensive income (loss) before reclassifications 68,803
 (38,803) 30,000
Amounts reclassified from AOCI to net income, net of tax 1,123
 —
 1,123
Net current period other comprehensive income (loss) 69,926
 (38,803) 31,123
Ending balance 49,210
 (3,199) 46,011
Less: AOCI attributable to noncontrolling interest —
 (68) (68)
Ending balance, Maiden shareholders $49,210
 $(3,131) $46,079
      
For the Nine Months Ended September 30, 2016 Change in net unrealized gains on investment Foreign currency translation adjustments Total
Beginning balance $(54,112) $30,231
 $(23,881)
Other comprehensive income (loss) before reclassifications 155,024
 (7,927) 147,097
Amounts reclassified from AOCI to net income, net of tax 578
 —
 578
Net current period other comprehensive income (loss) 155,602
 (7,927) 147,675
Ending balance 101,490
 22,304
 123,794
Less: AOCI attributable to noncontrolling interest —
 (82) (82)
Ending balance, Maiden shareholders $101,490
 $22,386
 $123,876


For the Six Months Ended June 30, 2020 Change in net unrealized gains on investment Foreign currency translation Total
Beginning balance $21,996
 $(4,160) $17,836
Other comprehensive income (loss) before reclassifications 1,589
 (3,823) (2,234)
Amounts reclassified from AOCI to net income, net of tax (6,401) —
 (6,401)
Net current period other comprehensive loss (4,812) (3,823) (8,635)
Ending balance, Maiden shareholders $17,184
 $(7,983) $9,201
       
For the Six Months Ended June 30, 2019 Change in net unrealized gains on investment Foreign currency translation Total
Beginning balance $(59,762) $(5,932) $(65,694)
Other comprehensive income (loss) before reclassifications 91,967
 (2,194) 89,773
Amounts reclassified from AOCI to net loss, net of tax (2,927) —
 (2,927)
Net current period other comprehensive income (loss) 89,040
 (2,194) 86,846
Ending balance, Maiden shareholders $29,278
 $(8,126) $21,152

12. Subsequent Events
On November 7, 2017, the Company's Board of Directors authorized the following quarterly dividends:
 
Dividend per Share
Payable on:
Record date:
Common shares
$0.15
 January 16, 2018 January 2, 2018
Preference shares - Series A
$0.515625
 December 15, 2017 December 1, 2017
Preference shares - Series C $0.445313
 December 15, 2017 December 1, 2017
Preference shares - Series D $0.418750
 December 15, 2017 December 1, 2017


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 unaudited 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.Certain reclassifications have been made for 20162019 to conform to the 20172020 presentation and have no impact on consolidated net income and total equity previously reported.
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. Our 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 and financial condition 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 6, 2017,18, 2020, however, these factors should not be construed as exhaustive. Forward-looking statements speak only as of the date they are made 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.


Overview
We areMaiden Holdings is a Bermuda-based holding company, primarilypreviously focused on serving the needs of regional and specialty insurers in the United States ("U.S."), Europe and select other global markets by providing innovative reinsurance solutions designed to support their capital needs.markets. We specialize in reinsurance solutions that optimize financing and risk management 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. Our principal operating subsidiaries are rated "A" (Excellent) with a stable outlook by A.M. Best Company ("A.M. Best") which rating is the third highest of sixteen rating levels and "BBB+" (Good) with a negative outlook by S&P Global Ratings ("S&P"), which is the eighth highest of twenty-two rating levels. Our common shares trade on the NASDAQ Global Select Market ("NASDAQ") under the symbol "MHLD".
We provide reinsurance in the U.S. and Europe through our wholly owned subsidiaries, Maiden Reinsurance Ltd. ("Maiden Bermuda") and Maiden Reinsurance North America, Inc. ("Maiden US"). Internationally, we provide insurance sales and distribution services through Maiden Global Holdings, Ltd. ("Maiden Global") and its subsidiaries. Maiden Global primarily focuses onoperate internationally providing branded auto and credit life insurance products through insurer partners to retail clients in the European Union ("EU")EU and other global markets.markets through Maiden Global Holdings, Ltd. ("Maiden Global"). These products also produce reinsurance programs which are underwritten by Maiden Bermuda.Reinsurance Ltd. ("Maiden Reinsurance"). Certain international credit life business is written on a primary basis by Maiden Life Försäkrings AB ("Maiden LF"). During 2016, the Company incorporated and general insurance business is written on a new wholly owned subsidiary,primary basis by Maiden General Försäkrings AB ("Maiden GF"). We are also running off the liabilities associated with AmTrust Financial Services, Inc. ("AmTrust") contracts terminated in Sweden.early 2019 as discussed below.  In addition, we are not actively underwriting reinsurance business. We have also entered into a retroactive reinsurance agreement and a commutation agreement that further reduces our exposure to and limits the potential volatility related to these AmTrust liabilities, which are discussed in "Note 1. Basis of Presentation" of the Notes to Condensed Consolidated Financial Statements included in Part I Item 1. "Financial Information".
As discussed in "Note 1. Basis of Presentation" of the Notes to Condensed Consolidated Financial Statements included in Part I Item 1. "Financial Information" and in Item 1. "Business" of our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on March 18, 2020, the sale of Maiden Reinsurance North America, Inc. ("Maiden US") and the termination of both of our quota share contracts with AmTrust have materially reduced our gross and net premiums written since 2018. We have significantly reduced our operating expenses and continue to take steps to reduce these costs further.
We expect to continue to re–evaluate our operating strategy during 2020 while leveraging the significant assets and capital we retain. In addition to restoring operating profitability, our strategic focus will center on creating the greatest risk-adjusted shareholder returns, whether via asset and capital management or active reinsurance underwriting, or a combination of both. Our present assessment of the reinsurance marketplace along with our current operating profile is that the risk-adjusted returns that may be produced via active reinsurance underwriting are likely to present more limited opportunities compared to other strategic initiatives which may produce greater shareholder value.
Our business consists of two reportable segments: Diversified Reinsurance and AmTrust Reinsurance. As a result of the strategic decision to divest all of our U.S. treaty reinsurance operations in 2018, we revised the composition of our reportable segments in the fourth quarter of 2018. Our Diversified Reinsurance segment now only consists of a portfolio of predominantly property and casualty reinsurance business focusing on regional and specialty property and casualty insurance companies located primarily in the U.S. and also in Europe. Our AmTrust Reinsurance segment includes the run-off of all business ceded by AmTrust Financial Services, Inc. ("AmTrust") to Maiden Bermuda,Reinsurance, primarily the AmTrust Quota Share and the European Hospital Liability Quota Share.
The reinsurance industryRecent Developments
Effective March 16, 2020, we re-domesticated our principal operating subsidiary, Maiden Reinsurance, to the State of Vermont in the United States. Maiden Reinsurance is maturenow subject to the statutes and highly competitiveregulations of Vermont in the ordinary course of business. We have determined that re-domesticating Maiden Reinsurance to Vermont enables us to better align our capital and resources with our liabilities, which originate mostly in the market conditionsUnited States, resulting in a more efficient structure.The re-domestication, in combination with the transactions completed pursuant to the Strategic Review, will continue to strengthen the Company’s capital position and solvency ratios. While the Vermont Department of Financial Regulation ("Vermont DFR") will be the group supervisor for the Company, the re-domestication did not apply to the parent holding company which we operate have historically been cyclical, experiencing periodsremains a Bermuda-based holding company. Securities issued by Maiden Holdings were not affected by the re-domestication of price erosion followed by rate strengtheningMaiden Reinsurance to Vermont.
Concurrent with its re-domestication to Vermont on March 16, 2020, Maiden Holdings contributed as capital the remaining 65% of its ownership in Maiden Reinsurance to Maiden Holdings North America, Ltd. ("Maiden NA"). Maiden NA now owns 100% of Maiden Reinsurance. Maiden NA also maintains a portfolio of cash and fixed maturity investments, along with other strategic investments of $48.8 million at June 30, 2020. We believe Maiden NA’s investments, including its ownership of Maiden Reinsurance, will create opportunities to utilize net operating loss carry-forwards ("NOLs") which total $213.3 million as of June 30, 2020. These NOLs are not presently recognized as deferred tax assets as a full valuation allowance is currently carried against them. For further details please see Note 16 — Taxation included under Item 8 "Financial Statements and Supplementary Data" in our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on March 18, 2020. Taken together, the Company believes these measures should generate additional income for Maiden NA in a tax-efficient manner while sharing in the improvement in profitability anticipated in Maiden Reinsurance as a result of catastrophes or other significant losses that affect the overall capacitymeasures enacted as part of the industryStrategic Review.
In addition to provide coverage.these changes regarding Maiden Reinsurance, companies compete onsince the basisthird quarter of many factors, including premium rates, company2018, we have engaged in a series of strategic measures that have dramatically reduced the regulatory capital required to operate our business, materially strengthened our solvency ratios, and underwriter relationships, general reputationceased active reinsurance underwriting. During that time, we significantly increased our estimate of ultimate losses and perceived financial strength,loss reserves while purchasing reinsurance protection against further loss reserve volatility and as a result, have improved the terms and conditionsultimate economic value of the products offered, ratings assigned by independent rating agencies, speed of claims payments, reputationCompany.
We believe these measures have given the Company the ability to more flexibly allocate capital to those activities most likely to produce the greatest returns for shareholders, and experiencethe Company is actively engaged in risks underwritten, capacity and coverages offered and various other factors. These factors operate at the individual market participant level and generally in the aggregate across the reinsurance industry. In addition, underlying economic conditions and variations in the reinsurance buying practices of ceding companies, by participantevaluating opportunities, both individually and in the aggregate contribute to cyclical movements in rates, terms and conditions and may impact industry aggregate results and subsequently the level of completion in the reinsurance industry.that it believes will accomplish that goal.
While the business we write as part of our business model remains somewhat more insulated from these competitive conditions, we continue to experience residual pricing pressures as a result of these broader industry conditions. As market conditions evolve, we continue to maintain our adherence to disciplined underwriting by declining business when pricing, terms and conditions do not meet our underwriting and pricing standards.
During the third quarter of 2017, a series of natural catastrophes caused significant losses in insurance and reinsurance markets globally. Consistent with our low volatility, non–catastrophe oriented business model, we experienced more limited losses from these events than other market participants, with an estimate of $20.0 million from Hurricanes Harvey and Irma in the U.S., and no expected losses from Hurricane Maria or the Mexican earthquakes. While the ultimate losses from these events are not known presently, it appears the magnitude of loss may be sufficient to result in some level of pricing increases, primarily in property lines but possibly more broadly. We believe that we are well positioned to take advantage of market conditions should the pricing environment become more favorable.
Since our founding in 2007,The measures we have entered intotaken were initiated in early 2018, when our Board of Directors initiated a seriesreview of significant strategic and capital transactions that have transformed the scope and scalealternatives ("Strategic Review") to evaluate ways to increase shareholder value after a period of our business while maintaining our low volatility, non-catastrophe risk profile. These transactions have supported the growth in our gross premiums written to in excess of $2.8 billion in 2016 while significantly enhancing our total capital resources. Total capital resources are approximately $1.7 billion at September 30, 2017.
To date, we have not yet attained our targeted returns. We believe our efficient balance sheet and low volatility business are the primary reasons our returns have generally exceeded industry averages. Our capital management strategy in recent years has appreciably lowered our cost of capital and improved our returns on common equity. More recently,continuing higher than targeted combined ratios and lower returns on equity than expected. This Strategic Review resulted in a series of transactions that have affectedtransformed our underwriting profitabilityoperations and limitedmaterially reduced the risk on our progress towardbalance sheet. These transactions can be found in Part II of our objective. We believe, however, thatAnnual Report on Form 10-K for the underwriting initiatives we have implemented will enable us to make progress toward our long term operating return on common equity target during the next 12 to 24 months.year ended December 31, 2019.

Please refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations" section included under Item 7 of our Annual Report on Form 10-K for the year ended December 31, 20162019 for further information.
COVID-19 Pandemic
The continuing COVID-19 global pandemic has caused significant disruption to the economy and financial markets globally, and the full extent of the potential impacts of COVID-19 are not yet known. Circumstances caused by the COVID-19 pandemic are complex, uncertain and rapidly evolving. Our results of operations, financial condition, and liquidity and capital resources have been adversely impacted by the COVID-19 pandemic, and the future impact of the pandemic on our financial condition or results of operations is difficult to predict.
As described herein, the Company is not currently engaged in active reinsurance underwriting and is running off the remaining unearned exposures it has reinsured. Maiden Global’s business development teams partner with automobile manufacturers, dealer associations and local primary insurers to design and implement point of sale insurance programs which generate revenue for the auto manufacturer and insurance premiums for the primary insurer ("IIS unit"). Our IIS unit does write limited primary insurance coverages that could be exposed to COVID-19 claims.  While we assess our exposure to COVID-19 insurance and reinsurance claims on our existing insurance exposures and remaining reinsurance exposures as limited and immaterial, given the uncertainty surrounding the COVID-19 pandemic and its impact on the insurance industry, our preliminary estimates of loss and loss adjustment expenses ("loss and LAE") and estimates of reinsurance recoverable arising from the COVID-19 pandemic may materially change. Maiden Reinsurance has not received any COVID-19 claims to date but our companies within our IIS unit have received a limited number of claims related to those coverages which it deems as immaterial. Unanticipated issues relating to claims and coverage may emerge, which could adversely affect our business by increasing the scope of coverage beyond our intent and/or increasing the frequency and severity of claims.
The Company's investment portfolio may be adversely impacted by unfavorable market conditions caused by the COVID-19 pandemic and we and our reinsurance subsidiaries may need additional capital to maintain compliance with regulatory capital requirements and/or be required to post additional collateral under existing reinsurance arrangements, which could reduce our liquidity. In addition, the Company may experience continued volatility in our results of operations which could negatively impact our financial condition and create a reduction in the amount of available distribution or dividend capacity from our regulated reinsurance subsidiaries, which would also reduce liquidity.
Please refer to the Liquidity and Capital Resources section for a further discussion of the impact of the COVID-19 pandemic on our liquidity and investment portfolio.

Three and NineSix Months Ended SeptemberJune 30, 20172020 and 20162019 Financial Highlights
For the Three Months Ended September 30, 2017 2016 Change
Summary Consolidated Statement of Income Data: ($ in thousands except per share data)
Net (loss) income $(55,054) $40,796
 $(95,850)
Net (loss) income attributable to Maiden common shareholders (63,596) 31,829
 (95,425)
Non-GAAP operating (loss) earnings(1)
 (56,414) 30,196
 (86,610)
Basic (loss) earnings per common share:      
Net (loss) income attributable to Maiden common shareholders(2)
 (0.74) 0.42
 (1.16)
Non-GAAP operating (loss) earnings attributable to Maiden common shareholders(1)
 (0.66) 0.40
 (1.06)
Diluted (loss) earnings per common share:
      
Net (loss) income attributable to Maiden common shareholders(2) (9)
 (0.74) 0.40
 (1.14)
Non-GAAP operating (loss) earnings attributable to Maiden common shareholders(1) (9)
 (0.66) 0.39
 (1.05)
Dividends per common share 0.15
 0.14
 0.01
Gross premiums written 630,972
 706,854
 (75,882)
Net premiums earned 653,866
 698,278
 (44,412)
Underwriting (loss) income(3)
 (82,442) 17,369
 (99,811)
Net investment income 40,823
 35,666
 5,157
Combined ratio(4)
 114.1 % 98.5% 15.6
Annualized non-GAAP operating return on average common shareholders' equity(1)
 (22.5)% 11.0% (33.5)
       
For the Nine Months Ended September 30, 2017
2016
Change
Summary Consolidated Statement of Income Data: ($ in thousands except per share data)
Net (loss) income $(44,888) $117,512
 $(162,400)
Net (loss) income attributable to Maiden common shareholders (65,465) 89,955
 (155,420)
Non-GAAP operating (loss) earnings(1)
 (46,226) 86,974
 (133,200)
Basic (loss) earnings per common share:      
Net (loss) income attributable to Maiden common shareholders(2)
 (0.76) 1.20
 (1.96)
Non-GAAP operating (loss) earnings attributable to Maiden common shareholders(1)
 (0.54) 1.16
 (1.7)
Diluted (loss) earnings per common share:      
Net (loss) income attributable to Maiden common shareholders(2) (9)
 (0.76) 1.15
 (1.91)
Non-GAAP operating (loss) earnings attributable to Maiden common shareholders(1) (9)
 (0.54) 1.11
 (1.65)
Dividends per common share 0.45
 0.42
 0.03
Gross premiums written 2,259,597
 2,259,290
 307
Net premiums earned 2,074,475
 1,951,851
 122,624
Underwriting (loss) income(3)
 (116,455) 46,660
 (163,115)
Net investment income 123,492
 107,291
 16,201
Combined ratio(4)
 106.7 % 98.7% 8.0
Annualized non-GAAP operating return on average common shareholders' equity(1)
 (6.2)% 11.8% (18.0)
For the Three Months Ended June 30, 2020 2019 Change
Summary Consolidated Statement of Income Data (unaudited): ($ in thousands except per share data)
Net income from continuing operations $9,212
 $3,976
 $5,236
Loss from discontinued operations, net of income tax —
 (19,389) 19,389
Net income (loss) 9,212
 (15,413) 24,625
Basic and diluted earnings (loss) per common share(9):
      
Net income (loss) attributable to common shareholders(2)(9)
 0.11
 (0.19) 0.30
Gross premiums written 4,982
 2,117
 2,865
Net premiums earned 21,308
 133,986
 (112,678)
Underwriting loss(3)
 (17) (39,131) 39,114
Net investment income 14,309
 31,122
 (16,813)
Combined ratio(4)
 131.8% 136.1 % (4.3)
Non-GAAP measures:      
Non-GAAP operating earnings (loss)(1)
 $1,222
 $(21,341) $22,563
Non-GAAP operating earnings (loss) per share - attributable to common shareholders(1)(9)
 0.01
 (0.26) 0.27
Annualized non-GAAP operating return on average common shareholders' equity(1)
 11.5% (69.9)% 81.4
       
For the Six Months Ended June 30, 2020 2019 Change
Summary Consolidated Statement of Income Data (unaudited): ($ in thousands except per share data)
Net income (loss) from continuing operations $30,073
 $(29,926) $59,999
Loss from discontinued operations, net of income tax —
 (22,123) 22,123
Net income (loss) 30,073
 (52,049) 82,122
Basic and diluted earnings (loss) per common share(9):
      
Net income (loss) attributable to Maiden common shareholders(2)(9)
 0.35
 (0.63) 0.98
Gross premiums written 16,716
 (559,022) 575,738
Net premiums earned 52,523
 317,088
 (264,565)
Underwriting loss(3)
 (3,710) (81,820) 78,110
Net investment income 32,273
 63,144
 (30,871)
Combined ratio(4)
 131.7% 132.5 % (0.8)
Non-GAAP measures:      
Non-GAAP operating earnings (loss)(1)
 $4,354
 $(48,893) $53,247
Non-GAAP operating earnings (loss) attributable to Maiden common shareholders(1)(9)
 0.05
 (0.59) 0.64
Annualized non-GAAP operating return on average common shareholders' equity(1)
 16.1% (91.8)% 107.9



 September 30, 2017 December 31, 2016 Change June 30, 2020 December 31, 2019 Change
Consolidated Financial Condition ($ in thousands except per share data) ($ in thousands except per share data)
Total investments and cash and cash equivalents(5)
 $5,324,271
 $4,886,473
 $437,798
 $1,613,070
 $1,974,544
 $(361,474)
Total assets 6,839,097
 6,252,299
 586,798
 3,213,436
 3,568,196
 (354,760)
Reserve for loss and loss adjustment expense ("loss and LAE") 3,365,011
 2,896,496
 468,515
Reserve for loss and LAE 2,071,222
 2,439,907
 (368,685)
Senior notes - principal amount 262,500
 362,500
 (100,000) 262,500
 262,500
 —
Maiden common shareholders' equity 956,027
 1,045,797
 (89,770)
Maiden shareholders' equity 1,421,027
 1,360,797
 60,230
Common shareholders' equity 65,739
 42,718
 23,021
Shareholders' equity 530,739
 507,718
 23,021
Total capital resources(6)
 1,683,527
 1,723,297
 (39,770) 793,239
 770,218
 23,021
Ratio of debt to total capital resources 15.6% 21.0% (5.4)
      
Book Value      
Ratio of debt to total capital resources(12)
 33.1% 34.1% (1.0)
Book Value calculations:      
Book value per common share(7)
 $11.30
 $12.12
 $(0.82) $0.78
 $0.51
 $0.27
Accumulated dividends per common share 3.77
 3.32
 0.45
 4.27
 4.27
 —
Book value per common share plus accumulated dividends $15.07
 $15.44
 $(0.37) $5.05
 $4.78
 $0.27
Change in book value per common share plus accumulated dividends 5.6%    
Diluted book value per common share(8)
 $0.76
 $0.50
 $0.26
            
Diluted book value per common share(8) (9)
 $11.20
 $12.00
 $(0.80)
Non-GAAP measures:      
Adjusted book value per common share(10)
 $2.09
 $1.87
 $0.22
Adjusted Maiden shareholders' equity(11)
 642,279
 620,668
 21,611
Adjusted total capital resources(11)
 904,779
 883,168
 21,611
Ratio of debt to adjusted total capital resources(13)
 29.0% 29.7% (0.7)
(1)
Non-GAAP operating earnings (loss) earnings,, non-GAAP operating earnings (loss) earnings per common share, and annualized non-GAAP operating return on average common equity and underwriting loss are non-GAAP financial measures. See "Key Financial Measures" for additional information and a reconciliation to the nearest U.S. GAAP financial measure (net (loss) income).information.
(2)
Please refer to "Notes to Condensed Consolidated Financial Statements (unaudited) Note 10.12. Earnings per Common Share" for the calculation of basic and diluted (loss) earningsincome or loss per common share.
(3)
Underwriting (loss) incomeloss is a non-GAAP measure and is calculated as net premiums earned plus other insurance revenue less net loss and LAE, commission and other acquisition expenses and general and administrative expenses directly related to underwriting activities. See "Key Financial Measures" for additional information.
(4)CalculatedCombined ratio is calculated by adding together the net loss and LAE ratio and the expense ratio.
(5)Total investments and cash and cash equivalents includes both restricted and unrestricted.
(6)
Total capital resources is the sum of the Company's principal amount of debt and Maiden shareholders' equity. See "Key Financial Measures" for additional information.
(7)
Book value per common share is calculated using Maiden common shareholders’ equity (shareholders' equity excluding the aggregate liquidation value of our preference shares) divided by the number of common shares outstanding.outstanding.See "Key Financial Measures" for additional information.
(8)
Diluted book value per common share is calculated by dividing Maiden common shareholders' equity, adjusted for assumed proceeds from the exercise of dilutive options, by the number of outstanding common shares plus dilutive options and restricted share unitsshares (assuming exercise of all dilutive share based awards). See "Key Financial Measures" for additional information.
(9)During a period of loss, the basic weighted average common shares outstanding is used in the denominator of the diluted loss per common share computation as the effect of including potential dilutive shares would be anti-dilutive.
(10)
Adjusted book value per common share is a non-GAAP measure that is calculated using common shareholders' equity, adjusted for the estimated unamortized deferred gain on retroactive reinsurance, divided by the number of common shares outstanding. See "Key Financial Measures" for additional information.
(11)
Adjusted shareholders' equity and adjusted total capital resources are calculated by adding the estimated unamortized deferred gain on retroactive reinsurance to the GAAP shareholders' equity and GAAP total capital resources, respectively. The deferred gain arises from the LPT/ADC Agreement with Cavello relating to losses from the AmTrust Quota Share agreement. Under U.S. GAAP, the deferred gain shall be amortized over the estimated remaining settlement period. See "Key Financial Measures" for additional information.
(12)Ratio of debt to total capital resources is calculated using the total principal amount of debt divided by the sum of total capital resources.
(13)Ratio of debt to adjusted total capital resources is calculated using the total principal amount of debt divided by the sum of adjusted total capital resources.

Key Financial Measures
In addition to the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Income and Comprehensive Income, management uses certain key financial measures, some of which are non-GAAP measures, to evaluate itsthe Company's financial performance and the overall growth in value generated for the Company’s common shareholders. Management believes that these measures, which may be defined differently by other companies, better explain the Company’s results to investors in a manner that allows for a more complete understanding of the underlying trends in the Company’s business. The non-GAAP measures should not be viewed as a substitute for those determined in accordance with U.S. GAAP. The calculation of some of these key financial measures including the reconciliation of non-GAAP measures to the nearest GAAP measure and relevant discussions are found within Item 2 - "Management's Discussion and Analysis of Financial Condition and Results of Operations" on page 60. These key financial measures are:
Non-GAAP operating earnings (loss) and non-GAAP diluted operating earnings (loss) per common share: managementshare: Management believes that the use of non-GAAP operating earnings (loss) and non-GAAP diluted non-GAAP operating earnings (loss) per common share enables investors and other users of the Company’s financial information to analyze its performance in a manner similar to how management analyzes performance. Management also believes that these measures generally follow industry practice and, therefore allowallowing the users of financial information to compare the Company’s performance with its industry peer group, and that the equity analysts and certain rating agencies which follow the Company, and the insurance industry as a whole, generally exclude these items from their analyses for the same reasons. Non-GAAP operating earnings (loss) should not be viewed as a substitute for U.S. GAAP net income.income (loss).
Non-GAAP operating earnings (loss) is an internal performance measure used by management as these measures focus on the underlying fundamentals of the Company's operations by excluding, on a recurring basis: (1) net realized gains or losses on investment; (2) total other-than-temporary impairment ("OTTI") losses; (3) foreign exchange and other gains or losses; (3)and (4) the portion of favorable or unfavorable prior year reserve development for which we have ceded the risk under retroactive reinsurance agreements and related changes in amortization of intangible assets; (4)the deferred gain losses. It also excludes on a non-recurring basis: (1) loss from discontinued operations, net of income tax and; (2) loss and related activity from our run-off operations comprised of our former segment NGHC Quota Share and our divested excess and surplus ("E&S") business; (5) accelerated amortization of debt issuance costs; and (6) non-cash deferred tax expenses.run-off operations which was commuted in November 2019. We exclude net realized gains or losses on investment, OTTI losses and foreign exchange and other gains or losses as we believe these are influenced by market opportunities and other factors. We do not believe amortization of intangible assets and loss and related activityresults from our NGHC Quota Share run-off operations commuted in November 2019, results from our discontinued operations, and ceded risks under retroactive reinsurance agreements are representative of our ongoing and future business. We believe all of these amounts are largelysubstantially independent of our business and any potential future underwriting process andtherefore including them distortswould distort the analysis of underlying trends in our operations.
Underwriting (loss) incomeloss is a non-GAAP measure and is calculated as net premiums earned plus other insurance revenue less net loss and LAE, commission and other acquisition expenses and general and administrative expenses directly related to underwriting activities. For purposes of these non-GAAP operating measures, the fee-generating business which is included in our Diversified Reinsurance segment, is considered part of the underwriting operations of the Company. Management believes that this measure is important in evaluating the underwriting performance of the Company and its segments. This measure is also a useful tool to measure the profitability of the Company separately from the investment results and is also a widely used performance indicator in the insurance industry. A reconciliation of the Company's underwriting results can be found in the Company'sCondensed Consolidated Financial Statements. Please refer toStatements in the "Notes to Condensed Consolidated Financial Statements (unaudited) Note 3. Segment ReportingInformation" included under Item 1. "Financial Statements" of this Quarterly Report on Form 10-Q.
Combined ratio is commonly used in the insurance and reinsurance industry in conjunction with underwriting income (loss) 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 net loss and LAE ratio and the expense ratio and the computations of each component are described below. A combined ratio under 100% indicates underwriting profitability, as the net loss and LAE, commission and other acquisition expenses and general and administrative expenses are less than the net premiums earned and other insurance revenue on that business. Please refer to "Notes to Condensed Consolidated Financial Statements (unaudited) Note 3. Segment Information" included under Item 1. "Financial Statements" of this Quarterly Report on Form 10-Q for further details.


Non-GAAPoperating (loss) earningsWhile an important metric of success, underwriting loss and non-GAAP diluted operating (loss) earnings per common share can be reconciledcombined ratio do not reflect all components of profitability, as they do 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 cash and investments by segment, investment income and interest expense are not allocated to the nearest U.S. GAAP financial measure as follows:reportable segments. Certain general and administrative expenses are generally allocated to segments based on actual costs incurred.
For the Three Months Ended September 30, 2017 2016
  ($ in thousands except per share data)
Net (loss) income attributable to Maiden common shareholders $(63,596) $31,829
Add (subtract):    
Net realized gains on investment (5,859) (1,900)
Foreign exchange losses (gains) 3,550
 (687)
Amortization of intangible assets 533
 616
Divested E&S business and NGHC run-off 8,667
 47
Non-cash deferred tax expense 291
 291
Non-GAAP operating (loss) earnings attributable to Maiden common shareholders $(56,414) $30,196
     
Diluted (loss) earnings per share attributable to Maiden common shareholders $(0.74) $0.40
Add (subtract):    
Net realized gains on investment (0.07) (0.02)
Foreign exchange losses (gains) 0.04
 (0.01)
Amortization of intangible assets 0.01
 0.02
Divested E&S business and NGHC run-off 0.10
 —
Non-GAAP diluted operating (loss) earnings per common share
 $(0.66) $0.39
     
For the Nine Months Ended September 30, 2017 2016
  ($ in thousands except per share data)
Net (loss) income attributable to Maiden common shareholders $(65,465) $89,955
Add (subtract):    
Net realized gains on investment (8,316) (4,511)
Foreign exchange losses (gains) 12,193
 (6,474)
Amortization of intangible assets 1,599
 1,846
Divested E&S business and NGHC run-off 10,083
 2,942
Accelerated amortization of senior note issuance cost 2,809
 2,345
Non-cash deferred tax expense 871
 871
Non-GAAP operating (loss) earnings attributable to Maiden common shareholders $(46,226) $86,974
     
Diluted (loss) earnings per share attributable to Maiden common shareholders $(0.76) $1.15
Add (subtract):    
Net realized gains on investment (0.10) (0.05)
Foreign exchange losses (gains) 0.14
 (0.08)
Amortization of intangible assets 0.02
 0.02
Divested E&S business and NGHC run-off 0.12
 0.03
Accelerated amortization of senior note issuance cost 0.03
 0.03
Non-cash deferred tax expense 0.01
 0.01
Non-GAAP diluted operating (loss) earnings per common share
 $(0.54) $1.11
Non-GAAPoperating (loss) earnings attributable to Maiden common shareholders decreasedThe "net loss and LAE ratio" is derived by $86.6 million for the three months ended September 30, 2017 compared to the same period in 2016. This decrease was due to $77.7 million of prior year adversedividing net loss development in both of our key operating segments as well as third quarter catastrophe losses of $20.0 million from Hurricanes Harvey and Irma. The decline in underwriting income during the three months ended September 30, 2017 was partially offset by a $5.2 million increase in net investment income.

Non-GAAPoperating (loss) earnings attributable to Maiden common shareholders decreased by $133.2 million for the nine months ended September 30, 2017 compared to the same period in 2016. This decrease was due to $150.5 million of prior year adverse loss development as well as higher initial current year loss ratios during the nine months ended September 30, 2017 in both our operating segments as well as third quarter catastrophe losses of $20.0 million from Hurricanes Harvey and Irma. The decline in underwriting income during the nine months ended September 30, 2017 was partially offsetLAE by the $16.2 million increase insum of net investment income.premiums earned and other insurance revenue. The "commission and other acquisition expense ratio" is derived by dividing commission and other acquisition expenses by the sum of net premiums earned and other insurance revenue. The "general and administrative expense ratio" is derived by dividing general and administrative expenses by the sum of net premiums earned and other insurance revenue. The "expense ratio" is the sum of the commission and other acquisition expense ratio and the general and administrative expense ratio.
Non-GAAP Operating Return on Average Common Equity ("Non-GAAP Operating ROACE"): Management uses non-GAAP operating return on average common shareholders' equity as a measure of profitability that focuses on the return to common shareholders. It is calculated using non-GAAP operating earnings (loss) earnings available to common shareholders (as defined above) divided by average common shareholders' equity. Management has set, as a target, a long-term average of 15% Operating ROACE, which management believes provides an attractive return to shareholders for the risk assumed from our business.
Operating ROACE for the three and nine months ended September 30, 2017 and 2016 was computed as follows:
  For the Three Months Ended September 30, For the Nine Months Ended September 30,
  2017 2016 2017 2016
  ($ in thousands)
Non-GAAP operating (loss) earnings attributable to Maiden common shareholders $(56,414) $30,196
 $(46,226) $86,974
Opening Maiden common shareholders’ equity $1,035,399
 $1,049,714
 $1,045,797
 $867,821
Ending Maiden common shareholders’ equity $956,027
 $1,240,300
 $956,027
 $1,240,300
Average Maiden common shareholders’ equity $995,713
 $1,091,203
 $1,000,912
 $981,196
Operating ROACE (22.5)% 11.0% (6.2)% 11.8%
Book Value per Common Share and Diluted Book Value per Common Share:Share: Book value per common share and diluted book value per common share are non-GAAP measures. Management uses growth in both of these metrics as a prime measure of the value we are generating for our common shareholders, asbecause management believes that growth in each metric ultimately results in growth in the Company’s common share price. These metrics are impacted by the Company’s net (loss) income and external factors, such as interest rates, which can drive changes in unrealized gains or losses on our investment portfolio. At September 30, 2017, book value per commonportfolio, as well as share decreased by 6.8% and diluted book value per common share decreased by 6.7%, compared to December 31, 2016, (see "Liquidity and Capital Resources - Investments" on page 58 for further information). Book value and diluted book value per common share at September 30, 2017 and December 31, 2016 were computed as follows:repurchases.
  September 30, 2017 December 31, 2016
  ($ in thousands except share and per share data)
Ending Maiden common shareholders’ equity $956,027
 $1,045,797
Proceeds from assumed conversion of dilutive options 9,697
 13,383
Numerator for diluted book value per common share calculation $965,724
 $1,059,180
     
Common shares outstanding 84,624,829
 86,271,109
Shares issued from assumed conversion of dilutive options and restricted share units 1,611,917
 1,961,457
Denominator for diluted book value per common share calculation 86,236,746
 88,232,566
     
Book value per common share $11.30
 $12.12
Diluted book value per common share $11.20
 $12.00

Ratio of Debt to Total Capital Resources: Management uses this non-GAAP measure to monitor the financial leverage of the Company. This measure is calculated using the total principal amount of debt divided by the sum of total capital resources.
Non-GAAP underwriting income (loss), Non-GAAP loss and LAE ratio, and Non-GAAP combined ratio: Management has further adjusted underwriting loss, as defined above, as well as the reported loss and LAE ratios and reported combined ratios by recognizing into income the unamortized deferred gain arising from the LPT/ADC Agreement. The ratiodeferred gain represents amounts estimated to be fully recoverable from Cavello and management believes adjusting for this shows the ultimate economic benefit of Debt tothe LPT/ADC Agreement on Maiden's underwriting income (loss). We believe reflecting the economic benefit of this retroactive reinsurance agreement is helpful for understanding future trends in our operations.
Adjusted Total Shareholders' Equity, Adjusted Total Capital Resources, at September 30, 2017Ratio of debt to Adjusted Total Capital Resources and December 31, 2016 wasAdjusted Book Value per Common Share: Management has adjusted GAAP shareholders' equity by adding the unamortized deferred gain on retroactive reinsurance arising from the LPT/ADC Agreement to shareholders' equity. As a result, by virtue of this adjustment, management has also adjusted Total Capital Resources and computed as follows:
  September 30, 2017 December 31, 2016
  ($ in thousands)
Senior notes - principal amount $262,500
 $362,500
Maiden shareholders’ equity 1,421,027
 1,360,797
Total capital resources $1,683,527
 $1,723,297
Ratio of debt to total capital resources 15.6% 21.0%
the Ratio of debt to Adjusted Capital Resources and Adjusted Book Value per Common Share. The deferred gain represents amounts estimated to be fully recoverable from Cavello and management believes adjusting for this shows the ultimate economic benefit of the LPT/ADC Agreement. We believe reflecting the economic benefit of this retroactive reinsurance agreement is helpful to understand future trends in our operations, which will improve Maiden's shareholders' equity over the settlement period.
Certain Operating Measures and Relevant Factors
Refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations" section included under Item 7 of our Annual Report on Form 10-K for the year ended December 31, 20162019 for a general discussion on "Certain Operating Measures" utilized by the Companyand the "Relevant Factors" associated with these Certain Operating Measures.Company.
Critical Accounting Policies and Estimates
The Company's critical accounting policies and estimates are discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations" section included under Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2016,2019, filed with the SEC on March 6, 2017.18, 2020. The critical accounting policies and estimates should be read in conjunction with "Part I, Item 1 - Notes to Condensed Consolidated Financial Statements (unaudited) Note 2. Significant Accounting Policies" included in this Form 10Q10-Q and "Notes to Consolidated Financial Statements Note 2. Significant Accounting Policies" included inwithin the audited Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2016,2019, filed with the SEC.SEC on March 18, 2020. There have been no material changes in the application of our critical accounting estimates subsequent to that report.



Results of Operations
The following table sets forth our selected unaudited Condensed Consolidated Statement of Income data for each of the periods indicated:three and six months ended June 30, 2020 and 2019:
 For the Three Months Ended September 30, For the Nine Months Ended September 30, For the Three Months Ended June 30, For the Six Months Ended June 30,
($ in thousands) 2017 2016 2017 2016 2020 2019 2020 2019
Gross premiums written $630,972
 $706,854
 $2,259,597
 $2,259,290
 $4,982
 $2,117
 $16,716
 $(559,022)
Net premiums written $617,330
 $690,653
 $2,201,950
 $2,133,911
 $4,090
 $(409) $14,462
 $(561,939)
Net premiums earned $653,866
 $698,278
 $2,074,475
 $1,951,851
 $21,308
 $133,986
 $52,523
 $317,088
Other insurance revenue 2,488
 2,345
 7,816
 8,696
 250
 754
 658
 1,566
Net loss and LAE (535,968) (466,751) (1,545,157) (1,297,361) (11,008) (121,561) (32,094) (274,250)
Commission and other acquisition expenses (193,462) (206,706) (625,530) (587,501) (8,154) (49,656) (20,127) (119,273)
General and administrative expenses(1)
 (9,366) (9,797) (28,059) (29,025) (2,413) (2,654) (4,670) (6,951)
Underwriting (loss) income(2)
 (82,442) 17,369
 (116,455) 46,660
Underwriting loss(2)
 (17) (39,131) (3,710) (81,820)
Other general and administrative expenses(1)
 (10,126) (7,155) (24,193) (20,713) (6,848) (9,504) (13,141) (21,826)
Net investment income 40,823
 35,666
 123,492
 107,291
 14,309
 31,122
 32,273
 63,144
Net realized gains on investment 5,859
 1,900
 8,316
 4,511
 8,875
 24,086
 19,913
 12,985
Accelerated amortization of senior note issuance cost —
 —
 (2,809) (2,345)
Amortization of intangible assets (533) (616) (1,599) (1,846)
Foreign exchange (losses) gains (3,550) 687
 (12,193) 6,474
Total other-than-temporary impairment losses —
 —
 (1,506) —
Foreign exchange and other (losses) gains (2,295) 1,207
 5,902
 6,186
Interest and amortization expenses (4,829) (6,856) (18,430) (21,314) (4,830) (4,830) (9,661) (9,659)
Income tax expense (256) (199) (1,017) (1,206)
Net (loss) income (55,054) 40,796
 (44,888) 117,512
Loss attributable to noncontrolling interests 3
 56
 34
 166
Dividends on preference shares (8,545) (9,023) (20,611) (27,723)
Net (loss) income attributable to Maiden common shareholders $(63,596) $31,829
 $(65,465) $89,955
Income tax benefit 18
 1,026
 3
 1,064
Net income (loss) from continuing operations 9,212
 3,976
 30,073
 (29,926)
Loss from discontinued operations, net of income tax —
 (19,389) —
 (22,123)
Net income (loss) $9,212
 $(15,413) $30,073
 $(52,049)
                
Ratios                
Net loss and LAE ratio(3)
 81.6% 66.6% 74.2% 66.2% 51.0% 90.2% 60.4% 86.1%
Commission and other acquisition expense ratio(4)
 29.5% 29.5% 30.0% 30.0% 37.8% 36.9% 37.8% 37.4%
General and administrative expense ratio(5)
 3.0% 2.4% 2.5% 2.5% 43.0% 9.0% 33.5% 9.0%
Expense ratio(6)
 32.5% 31.9% 32.5% 32.5% 80.8% 45.9% 71.3% 46.4%
Combined ratio(7)
 114.1% 98.5% 106.7% 98.7% 131.8% 136.1% 131.7% 132.5%
(1)
Underwriting related general and administrative expenses is a non-GAAP measure. Please refer to "General and Administrative Expenses" belowfor additional information related to these corporate expenses and the reconciliation to those presented in our unaudited Condensed Consolidated Statements of Income.
(2)Underwriting (loss) incomeloss is a non-GAAP measure and is calculated as net premiums earned plus other insurance revenue less net loss and LAE, commission and other acquisition expenses and general and administrative expenses directly related to underwriting activities.
(3)Calculated by dividing net loss and LAE by the sum of net premiums earned and other insurance revenue.
(4)Calculated by dividing commission and other acquisition expenses by the sum of net premiums earned and other insurance revenue.
(5)Calculated by dividing general and administrative expenses by the sum of net premiums earned and other insurance revenue.
(6)Calculated by adding together commission and other acquisition expense ratio and general and administrative expense ratio.
(7)Calculated by adding together net loss and LAE ratio and the expense ratio.

Net Income (Loss)
Net loss attributable to Maiden common shareholdersincome for the three months ended SeptemberJune 30, 20172020 was $63.6$9.2 million compared to a net income attributable to Maiden common shareholdersloss of $31.8$15.4 million for the same period in 2016.2019. The factors that contributed to the net decreaseimprovement in results for the three months ended SeptemberJune 30, 20172020 compared to the same period in 2016 were as follows:2019 was primarily due to the following:
net income from continuing operations of $9.2 million compared to net income from continuing operations of $4.0 million for the same period in 2019 largely due to the following factors:
current perioda negligible underwriting loss of $82.4for the three months ended June 30, 2020 compared to $39.1 million in the third quarter compared to underwriting income of $17.4 million during the third quarter of 2016.same period in 2019. The deteriorationreduction in the underwriting resultloss was primarily due to:
◦Adverse developmentthe impact of priorlower loss ratios for current year losses of $77.7 million forpremiums earned during the three months ended SeptemberJune 30, 20172020 compared to $12.4 million for the same period in 2016. This development, which is discussed in greater detail in the individual segment discussion and analysis, was primarily in our AmTrust Reinsurance segment, but adverse development was also experienced in our Diversified Reinsurance Segment and Other category;
◦Our Other category also incurred adverse development of $8.7 million during the quarter compared to a negligible amount in the comparative quarter due to increased loss reserves in our remaining run–off litigated U.S. E&S property claims as well as increased loss reserves in the run–off of the National General Holdings Corporation Quota Share ("NGHC Quota Share");
◦In the third quarter of 2017, we incurred $20.0 million of estimated losses from Hurricanes Harvey and Irma, with an estimated $15.0 million in related losses in our Diversified Reinsurance segment and $5.0 million in losses from our AmTrust Reinsurance segment;2019; and
◦Currentfavorable prior year underwriting results have alsoloss development of $0.1 million or 0.3 percentage points in the second quarter of 2020 compared to adverse prior year loss development of $26.0 million or 19.3 percentage points during the same period in 2019 which had been impacted as we have increased our initial loss picks in both our Diversified Reinsurance andincurred primarily within AmTrust Reinsurance segments factoring in both market conditions and recent loss trends and experience.Segment.
foreign exchange lossesThe improved underwriting results were partially offset by the following:
lower realized gains on investment of $3.6$8.9 million for the three months ended SeptemberJune 30, 20172020 compared to foreign exchangerealized gains of $0.7$24.1 million for the same period in 2016 due to the strengthening2019;
•
a reduction in net investment income of $16.8 million or 54.0% for the three months ended June 30, 2020 compared to the same period in 2019 primarily due to the decline in average investable assets of 38.0%; and
foreign exchange and other losses of euro and British pound against the U.S. dollar.
The decreases above were offset by the following:
increase in net investment income of $5.2$2.3 million or 14.5%, for the three months ended SeptemberJune 30, 20172020 compared to foreign exchange and other gains of $1.2 million for the same period in 2019.
•
net income from discontinued operations of $0.0 million for the three months ended June 30, 2020 compared to a net loss from discontinued operations of $19.4 million for the same period in 2019 as a result of the Settlement and Commutation Agreement entered into by Maiden and Enstar on July 31, 2019 which caused a net additional loss of $16.7 million to be recognized.
Net income for the six months ended June 30, 2020 was $30.1 million compared to a net loss of $52.0 million for the same period in 2019. The net improvement in results for the six months ended June 30, 2020 compared to the same period in 2016. This increase reflects the growth in average invested assets of 6.6% from the same period in 2016 and increase in average yields to 3.1% during the three months ended September 30, 2017 compared to 2.9% during the same period in 2016. Additionally, part of the increase is attributable2019 was primarily due to the callfollowing:
net income from continuing operations of certain securities which generated additional amortization income of $0.8 million during the quarter. There were no calls in the comparative period.
Net loss attributable to Maiden common shareholders for the nine months ended September 30, 2017 was $65.5$30.1 million compared to net income attributable to Maiden common shareholdersloss from continuing operations of $90.0$29.9 million for the same period in 2016.
The factors that contributed2019 largely due to the net decrease for the nine months ended September 30, 2017following factors:
underwriting loss of $3.7 million compared to $81.8 million in the same period in 2016 were as follows:
an underwriting loss of $116.5 million compared to underwriting income of $46.7 million during the nine months ended September 30, 2016.2019. The deteriorationreduction in the underwriting resultloss was principally due to:
◦Adverse developmentthe impact of priorlower loss ratios for current year losses of $150.5 million in 2017premiums earned during the six months ended June 30, 2020 compared to $41.9 million for the same period in 2016. This development, which is discussed in greater detail in the individual segment discussion and analysis, was primarily in our AmTrust Reinsurance segment, but adverse development was also experienced in our Diversified Reinsurance Segment and Other category;
◦Our Other category, also incurred adverse development of $10.2 million during the period compared to $2.9 million in the comparative period in 2016 due to increased loss reserves in our remaining run–off litigated U.S. E&S property claims as well as increased loss reserves in the run–off of the NGHC Quota Share;
◦In the third quarter of 2017, we incurred $20.0 million of estimated losses from Hurricanes Harvey and Irma, with an estimated $15.0 million in related losses in our Diversified Reinsurance segment and $5.0 million in losses from our AmTrust Reinsurance segment;2019; and
◦Currentfavorable prior year underwriting results have alsoloss development of $0.6 million or 1.1 percentage points in the first half of 2020 compared to adverse prior year loss development of $33.3 million or 10.5 percentage points during the same period in 2019 which had been impacted as we have increased our initial loss picks in both our Diversified Reinsurance andincurred primarily within AmTrust Reinsurance segments factoring in both market conditions and recent loss trends and experience.Segment.
foreign exchange lossesrealized gains on investment of $12.2$19.9 million for the ninesix months ended SeptemberJune 30, 20172020 compared to foreign exchangerealized gains of $6.5$13.0 million for the same period in 2016 due to the strengthening of euro and British pound against the U.S. dollar.2019.
The decreases aboveimproved underwriting results and realized gains were partially offset by the following:
increasea reduction in net investment income of $16.2$30.9 million or 15.1%48.9% for the ninesix months ended SeptemberJune 30, 20172020 compared to the same period in 2016. This increase reflects2019, primarily due to the growthdecline in average investedinvestable assets of 8.6% from35.9%; and
foreign exchange and other gains of $5.9 million for the six months ended June 30, 2020 compared to foreign exchange and other gains of $6.2 million for the same period in 2016 and increase in average yields to 3.1% during the nine months ended September 30, 2017 compared to 3.0% during the same period in 2016. Additionally, part of the increase is attributable to the call of certain securities which generated additional amortization income of $4.8 million during the period. There were no calls in the comparative period.2019.
•
net income from discontinued operations of $0.0 million for the six months ended June 30, 2020 compared to a net loss from discontinued operations of $22.1 million for the same period in 2019 as a result of the Settlement and Commutation Agreement entered into by Maiden and Enstar on July 31, 2019 which caused a net additional loss of $16.7 million to be recognized.

Net Premiums Written
Net premiums written decreased by $73.3 million or 10.6% and increased by $68.0 million, or 3.2%, for the three and nine months ended September 30, 2017 compared to the same periods in 2016, respectively.
The tables below compare net premiums written by our reportable segments, reconciled to the total consolidated net premiums written for the three and ninesix months ended SeptemberJune 30, 20172020 and 2016:2019:
For the Three Months Ended September 30, 2017 2016 Change in
For the Three Months Ended June 30, 2020 2019 Change in
($ in thousands) Total % of Total Total % of Total $ % Total Total $ %
Diversified Reinsurance $207,137
 33.6% $179,092
 25.9% $28,045
 15.7 % $8,553
 $8,718
 $(165) (1.9)%
AmTrust Reinsurance 410,193
 66.4% 511,561
 74.1% (101,368) (19.8)% (4,463) (9,127) 4,664
 (51.1)%
Total $617,330
 100.0% $690,653
 100.0% $(73,323) (10.6)% $4,090
 $(409) $4,499
 NM
                    
For the Nine Months Ended September 30, 2017 2016 Change in
For the Six Months Ended June 30, 2020 2019 Change in
($ in thousands) Total % of Total Total % of Total $ % Total Total $ %
Diversified Reinsurance $671,880
 30.5% $626,522
 29.3% $45,358
 7.2 % $18,925
 $23,665
 $(4,740) (20.0)%
AmTrust Reinsurance 1,529,980
 69.5% 1,507,389
 70.7% 22,591
 1.5 % (4,463) (585,604) 581,141
 (99.2)%
Total - reportable segments 2,201,860
 100.0% 2,133,911
 100.0% 67,949
 3.2 %
Other 90
 —% —
 —% 90
 NM
Total $2,201,950
 100.0% $2,133,911
 100.0% $68,039
 3.2 % $14,462
 $(561,939) $576,401
 (102.6)%
NM - Notnot meaningful
The decrease in netNet premiums written for the three and six months ended SeptemberJune 30, 20172020 were $4,090 and $14,462, respectively, compared to net premiums written of $(409) and $(561,939) in the same respective periods in 2019 due to the following:
Premiums written in the Diversified Reinsurance segment decreased by $0.2 million or 1.9% and $4.7 million or 20.0% for the three and six months ended June 30, 2020, respectively, compared to the same periodrespective periods in 2016 was the result of the following:
A decline in net2019 due to lower premiums written in German Auto programs within our AmTrust Reinsurance segment of $101.4 million or 19.8% which was mainly a result of changes, in 2017, to the mix of programs in the Specialty Risk and Extended Warranty business and, in 2016, the impact of cumulative cession of premium for the first time from a series of acquisitions made by AmTrust in its Small Commercial and Specialty Program businesses as well as slower organic growth overall; andIIS business.
The decrease was offset by an increase in net premiums written in our Diversified Reinsurance segment of $28.0 million or 15.7% as well as the lower utilization of retrocessional capacity in 2017.
The increase in net premiums written for the nine months ended September 30, 2017 compared to the same period in 2016 came from both the Diversified Reinsurance and AmTrust Reinsurance segments. The primary reason was the reduction in the utilization of retrocessional capacity for both segments in 2017 which increased net premiums written by $61.5 million on a consolidated basis.
•
There were no new written premiums within the AmTrust Reinsurance segment due to the termination of both the AmTrust Quota Share and the European Hospital Liability Quota Share effective January 1, 2019. For the three and six months ended June 30, 2020 and 2019, the negative premiums written are primarily the result of return premium and other adjustments after the termination of the AmTrust contracts in 2019. In 2019, the Partial Termination Amendment resulted in Maiden Reinsurance returning approximately $648.0 million in unearned premium to AII, or $436.8 million net of applicable ceding commission and brokerage.
Please refer to the analysis below of our Diversified Reinsurance and AmTrust Reinsurance segments for further details.

Net Premiums Earned
Net premiums earned decreased by $44.4$112.7 million or 6.4%84.1% and increased by $122.6$264.6 million or 6.3%83.4% for the three and ninesix months ended SeptemberJune 30, 20172020, respectively, compared to the same respective periods in 2016, respectively.

2019. The tables below compare net premiums earned by our reportable segments, reconciled to the total consolidated net premiums earned:earned, for the three and six months ended June 30, 2020 and 2019:
For the Three Months Ended September 30, 2017 2016 Change in
($ in thousands) Total % of Total Total % of Total $ %
Diversified Reinsurance $217,513
 33.3% $175,141
 25.1% $42,372
 24.2 %
AmTrust Quota Share Reinsurance 436,353
 66.7% 523,137
 74.9% (86,784) (16.6)%
Total $653,866
 100.0% $698,278
 100.0% $(44,412) (6.4)%
             
For the Nine Months Ended September 30, 2017 2016 Change in
($ in thousands) Total % of Total Total % of Total $ %
Diversified Reinsurance $623,574
 30.1% $538,152
 27.6% $85,422
 15.9 %
AmTrust Quota Share Reinsurance 1,450,811
 69.9% 1,413,699
 72.4% 37,112
 2.6 %
Total - reportable segments 2,074,385
 100.0% 1,951,851
 100.0% 122,534
 6.3 %
Other 90
 —% —
 —% 90
 NM
Total $2,074,475
 100.0% $1,951,851
 100.0% $122,624
 6.3 %
NM - Not meaningful
For the Three Months Ended June 30, 2020 2019 Change in
($ in thousands) Total % of Total Total % of Total $ %
Diversified Reinsurance $11,527
 54.1% $22,472
 16.8% $(10,945) (48.7)%
AmTrust Quota Share Reinsurance 9,781
 45.9% 111,514
 83.2% (101,733) (91.2)%
Total $21,308
 100.0% $133,986
 100.0% $(112,678) (84.1)%
             
For the Six Months Ended June 30, 2020 2019 Change in
($ in thousands) Total % of Total Total % of Total $ %
Diversified Reinsurance $24,058
 45.8% $47,764
 15.1% $(23,706) (49.6)%
AmTrust Quota Share Reinsurance 28,465
 54.2% 269,324
 84.9% (240,859) (89.4)%
Total $52,523
 100.0% $317,088
 100.0% $(264,565) (83.4)%
Net premiums earned in the AmTrust Reinsurance segment for the three and six months ended SeptemberJune 30, 20172020 decreased by 16.6% to $436.4$101.7 million or 91.2% and $240.9 million or 89.4%, respectively, compared to the same periodrespective periods in 2016 and modestly increased by 2.6% to $1.45 billion during the nine months ended September 30, 2017 compared2019 due to the comparative period in 2016 similar toterminations of the reasons outlined in the net premiums written section above.AmTrust Quota Share and European Hospital Liability Quota Share effective January 1, 2019. Please refer to the analysis of our AmTrust Reinsurance segment on page 5349 for further discussion.
Net premiums earned in our Diversified Reinsurance segment for the three and ninesix months ended SeptemberJune 30, 2017 increased2020 decreased by $10.9 million or 48.7% and $23.7 million or 49.6%, respectively, compared to the same respective periods in 2016 as a result of overall growth2019 driven by non-renewals in our Diversified Reinsurance segment's U.S. property and casualty premiums as well as a reductionEuropean Capital Solutions business combined with reductions in the corporate retrocessional programquota share cessions for 2017. These increases were offset by the commutation of a large account during the second quarter of 2017.German Auto Programs within our IIS business. Please refer to the analysis of our Diversified Reinsurance segment on page 5047 for further discussion.

Other Insurance Revenue 
All of our Other Insurance Revenue is produced by our Diversified Reinsurance segment. Please refer to the analysis of our Diversified Reinsurance segment on page 5248 for further discussion.
Net Investment Income
Net investment income decreased by $16.8 million or 54.0% and Net Realized Gains on Investment
For$30.9 million or 48.9% for the three and ninesix months ended SeptemberJune 30, 2017, net investment income increased by $5.2 million or 14.5% and $16.2 million or 15.1%2020, respectively, compared to the same respective periods in 2016, respectively,2019, primarily due to the growthdecline in average investedinvestable assets of 6.6%38.0% and 8.6%, respectively. Additionally, part35.9% in those same respective periods. The decline in investable assets is largely due to the cessation of the increase in netactive reinsurance underwriting which materially reduced our revenues and is responsible for significant negative operating cash flows as we run-off our existing reinsurance liabilities. Lower investment income is attributablewas also driven by the decline in average book yields to the call of certain securities during the three2.3% and nine months ended September 30, 2017, which generated additional amortization income of $0.8 million and $4.8 million, respectively. There were no calls in either of the comparative periods in 2016.
Net realized gains on investment were $5.9 million and $8.3 million2.5% for the three and ninesix months ended SeptemberJune 30, 2017,2020, respectively, compared to $1.9 million and $4.5 million3.1% for the same respective periods in 2016, respectively.2019.
The following table details the Company's average investedinvestable assets and average book yield for the three and ninesix months ended SeptemberJune 30, 20172020 compared to the same respective periods in 2016:2019:
 For the Three Months Ended September 30, For the Nine Months Ended September 30, For the Three Months Ended June 30, For the Six Months Ended June 30,
($ in thousands) 2017 2016 2017 2016 2020 2019 2020 2019
Average invested assets(1)
 $5,294,274
 $4,968,685
 $5,232,717
 $4,819,365
Average investable assets(1)
 $2,518,159
 $4,061,954
 $2,621,092
 $4,086,959
Average book yield(2)
 3.1% 2.9% 3.1% 3.0% 2.3% 3.1% 2.5% 3.1%
(1)The average of the Company'sour total investments, cash, and cash equivalents, restricted cash and cash equivalents, funds withheld receivable and loan to related party held at each quarter-end during the year.period.
(2)Ratio of net investment income over average investedinvestable assets at fair value.


Net Realized Gains on Investment
Net realized gains on investment were $8.9 million and $19.9 million for the three and six months ended June 30, 2020, respectively, compared to net realized gains of $24.1 million and $13.0 million for the same respective periods in 2019. The realized gains for the three and six months ended June 30, 2020 were primarily due to sales of corporate bonds during 2020 for the settlement of claim payments to AmTrust.
The net realized gains of $24.1 million and $13.0 million for the same respective periods in 2019 were driven by sales of corporate bonds during the second quarter in anticipation of completing and funding the LPT/ADC Agreement with Enstar. The year-to-date gains were partially offset by net investment losses realized on the non-cash transfer of corporate and other debt securities in the first quarter of 2019 related to the Partial Termination Amendment with AmTrust and the conversion of a portion of reinsurance trust assets held as collateral into a funds withheld receivable.
Net Impairment Losses Recognized in Earnings
The Company recognized $1.5 million of OTTI losses in earnings on two fixed maturity securities for the six months ended June 30, 2020. There were no OTTI losses recognized during the three months ended June 30, 2020 and the three and six months ended June 30, 2019.
Net Loss and Loss Adjustment ExpensesLAE
Net loss and LAE increaseddecreased by $69.2$110.6 million or 14.8% and $247.8$242.2 million or 19.1% forduring the three and ninesix months ended SeptemberJune 30, 20172020, respectively, compared to the same respective periods in 2016, respectively.
The net loss and LAE increase during the three months ended September 30, 2017 was2019 largely due to the following:cessation of active reinsurance underwriting, including the termination of the AmTrust Reinsurance quota share agreements effective January 1, 2019.
AdverseThe loss ratio for the second quarter of 2020 was modestly impacted by net favorable prior year lossreserve development of $77.7$0.1 million or 0.3 percentage points compared to net adverse prior year reserve development of $26.0 million or 19.3 percentage points during the third quartersame period in 2019. The loss ratio for the six months ended June 30, 2020 was impacted by net favorable prior year reserve development of 2017,$0.6 million or 1.1 percentage points compared to $12.4net adverse prior year reserve development of $33.3 million recorded in or 10.5 percentage points during the comparativesame period in 2016. This2019. The prior year development which is discussed in greater detail in the individual segment discussion and analysis, was primarily in our AmTrust Reinsurance segment, but adverse development was also experienced in our Diversified Reinsurance Segment and Other category;
$20.0 million of losses incurred for Hurricanes Harvey and Irma during the third quarter of 2017. These preliminary estimates are based on a review of contracts potentially exposed, preliminary discussions with clients and catastrophe modeling techniques and any changes in these estimates will be recorded in the period in which it occurs. Maiden expects no impact from the Mexico earthquakes or Hurricane Maria; and
Excluding the impact of adverse development and the losses from the current year catastrophe events, our net loss and LAE ratio would have been 66.8% for the three months ended September 30, 2017 compared to 64.8% for the same period in 2016. The deterioration for the current year reflects increases we have made in our initial loss picks in both our Diversified Reinsurance and AmTrust Reinsurance segments factoring in both market conditions and recent loss trends and experience.analysis. 
The net loss and LAE increase duringratios decreased to 51.0% and 60.4% for the ninethree and six months ended SeptemberJune 30, 2017 was due to the following:
Adverse prior year loss development of $150.5 million during the current period 20172020, respectively, compared to $41.9 million recorded in the comparative period in 2016. This development, which is discussed in greater detail in the individual segment discussion90.2% and analysis, was primarily in our AmTrust Reinsurance segment, but adverse development was also experienced in our Diversified Reinsurance Segment and Other category;
$20.0 million of losses incurred for Hurricanes Harvey and Irma during the third quarter of 2017. These preliminary estimates are based on a review of contracts potentially exposed, preliminary discussions with clients and catastrophe modeling techniques and any changes in these estimates will be recorded in the period in which it occurs. Maiden expects no impact from the Mexico earthquakes or Hurricane Maria; and.
Excluding the impact of adverse development and the losses from the current year catastrophe events, our net loss and LAE ratio would have been 66.0% for the nine months ended September 30, 2017 compared to 64.0%86.1% for the same periodrespective periods in 2016. The deterioration2019 primarily due to significant reduction in for the current year reflects increases we have made in our initial loss picks in both our Diversified Reinsurance and AmTrust Reinsurance segments factoring in both market conditions and recent loss trends and experience.
The impact on the net loss and LAE ratios in each period should be considered in conjunction with the commission and other acquisition expense ratio as changes to either ratio can be affected by changes in the mix of business and the impact of the change in the commission and other acquisition expense rates on quota share contracts with loss sensitive features. As a result of these factors, as well as the adverse prior year loss development in 2017 in bothresulting from the Diversified Reinsurance andtermination of the AmTrust Reinsurance segments and our run-off business, the combined ratio increased by 15.6 and 8.0 points for the three and nine months ended September 30, 2017 compared to the same periods in 2016, respectively.quota share contracts effective January 1, 2019.
Commission and Other Acquisition Expenses
Commission and other acquisition expenses decreased by $13.2$41.5 million or 6.4%83.6% and increased by $38.0$99.1 million or 6.5%83.1% for the three and ninesix months ended SeptemberJune 30, 20172020, respectively, compared to the same respective periods in 2016, respectively. The commission and other acquisition expense ratios remained the same at 29.5% and 30.0% for the three and nine months ended September 30, 2017 and the same periods2019 due to significantly lower earned premiums in 2016, respectively.both of our reportable segments. The commission and other acquisition expense ratio is largely dependent onwas 37.8% for both the mix of business within the AmTrust Reinsurance segmentthree and the mix of pro-ratasix months ended June 30, 2020, respectively, compared to 36.9% and excess of loss business as well as the impact of loss sensitive features in some contracts within the Diversified Reinsurance segment. Please refer to the reasons37.4% for the changessame respective periods in the combined ratio discussed in the Net Loss and Loss Adjustment Expenses section above.2019.

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 and six months ended June 30, 2020 and 2019 comprise:
 For the Three Months Ended September 30, For the Nine Months Ended September 30, For the Three Months Ended June 30, For the Six Months Ended June 30,
($ in thousands) 2017 2016 2017 2016 2020 2019 2020 2019
General and administrative expenses – segments $9,366
 $9,797
 $28,059
 $29,025
 $2,413
 $2,654
 $4,670
 $6,951
General and administrative expenses – corporate 10,126
 7,155
 24,193
 20,713
 6,848
 9,504
 13,141
 21,826
Total general and administrative expenses $19,492
 $16,952
 $52,252
 $49,738
 $9,261
 $12,158
 $17,811
 $28,777
Total general and administrative expenses increaseddecreased by $2.5$2.9 million, or 15.0%,23.8% and $11.0 million or 38.1% for the three and six months ended SeptemberJune 30, 20172020, respectively, compared to the same periodrespective periods in 2016. The increase in total general and administrative expenses was primarily due to increases in legal, employee related expenses, other professional fees and technology-related expenses.2019. The general and administrative expense ratio increased to 3.0%43.0% and 33.5% for the three and six months ended SeptemberJune 30, 20172020, respectively, from 2.4%9.0% for both the three and six months ended June 30, 2019 as a result of significantly lower earned premiums compared to the prior periods. Lower earned premiums was largely due to termination of the AmTrust Reinsurance quota share contracts effective January 1, 2019 and non-renewals within our International business in the Diversified Reinsurance segment.
The decreased corporate expenses for the three and six months ended SeptemberJune 30, 2016.
Total general and administrative expenses for the nine months ended September 30, 20172020 compared to the same periodrespective periods in 2016 similarly increased2019 were largely due to increases in legal,lower salary, benefits and other professional feescorporate expenses associated with the Strategic Review and technology-related expenses offset by a decrease in employee related expenses. The general and administrative expense ratio remained flat at 2.5% for the nine months ended September 30, 2017 and 2016.headcount reductions since 2018.
Interest and Amortization Expenses
The interest and amortization expenses related to our the outstanding senior notes issued by Maiden Holdings in 2016 and Maiden NA in 2013 ("Senior NotesNotes") were $4.8 million and $18.4$9.7 million for the three and ninesix months ended SeptemberJune 30, 2017 compared2020 and 2019, respectively.
Please refer to $6.9 million and $21.3 million for the same periods in 2016, respectively. The decrease in interest expenses was due to the redemption of the 8.00% 2012 Senior Notes in June 2017 and the refinancing of the 8.25% 2011 Senior Notes with the 6.625% 2016 Senior Notes in June 2016. Refer to "Notes to Condensed Consolidated Financial Statements (unaudited) Note 6.7. Long Term Debt" for further details on the Company’s Senior Notes. The weighted average effective interest rate for the Company's debtSenior Notes was 7.6% and 7.8% for the three and ninesix months ended SeptemberJune 30, 2017 compared2020 and 2019, respectively.
Foreign Exchange and Other (Losses) Gains
Net foreign exchange and other amounted to 7.8%$2.3 million losses and 8.1% for the same periods in 2016, respectively.
On June 27, 2017, Maiden NA fully redeemed all of its 2012 Senior Notes using the proceeds from the Preference Shares - Series D issuance. The 2012 Senior Notes were redeemed at a redemption price equal to 100% of the principal amount of $100.0$5.9 million plus accrued and unpaid interest on the principal amount being redeemed up to, but not including, the redemption date. As a result, the Company accelerated the amortization of the remaining 2012 Senior Note issuance cost of $2.8 million.
Income Tax Expense
The Company recorded income tax expense of $0.3 million and $1.0 million forgains during the three and ninesix months ended SeptemberJune 30, 20172020, respectively, compared to net foreign exchange and $0.2other gains of $1.2 million and $1.2$6.2 million for the same respective periods in 2016, respectively. These amounts relate2019.
Net foreign exchange gains of $6.3 million occurred during the six months ended June 30, 2020 due to income taxthe strengthening of the U.S. dollar on the earningsre-measurement of our international subsidiaries, non-cash U.S. deferred tax expense relating to timing differencesnet loss reserves and state taxes incurred by our U.S. subsidiaries.related liabilities denominated in euro.
Dividends on Preference Shares
ForNet foreign exchange and other gains of $6.2 million for the three and ninesix months ended SeptemberJune 30, 2017, dividends paid2019 included $4.3 million of proceeds received from the sale of AVS and its related European subsidiaries to preference shareholders decreased by $0.5Allianz Partners on January 10, 2019. Excluding the gain of $4.3 million, or 5.3% and $7.1net foreign exchange gains of $1.9 million or 25.7% compared to the same periods in 2016, respectively. The decrease iswere realized primarily attributable to the conversionstrengthening of the Mandatory Convertible Preference Shares - Series B on September 15, 2016. The decrease for both the three and nine months ended September 30, 2017, however, was offset by the $2.5 million of dividends paid to 6.70% Preference Shares - Series D (the "Preference Shares - Series D") (see discussion below) during the third quarter of 2017.
On June 15, 2017, the Company issued a total of 6,000,000, Preference Shares – Series D, par value $0.01 per share, at a price of $25 per preference share. Refer to "Notes to Condensed Consolidated Financial Statements (unaudited) Note 11. Shareholders' Equity" for detailsU.S. dollar on the Company’s preference shares.re-measurement of net loss reserves and related liabilities mainly denominated in euro.

Underwriting Results by Reportable Segment
Diversified Reinsurance Segment
The underwriting results and associated underwriting ratios for theour Diversified Reinsurance segment for the three and six months ended June 30, 2020 and 2019 were as follows:
 For the Three Months Ended September 30, For the Nine Months Ended September 30, For the Three Months Ended June 30, For the Six Months Ended June 30,
($ in thousands) 2017 2016 2017 2016 2020 2019 2020 2019
Gross premiums written $210,953
 $186,750
 $683,839
 $667,388
 $9,687
 $11,244
 $21,421
 $26,582
Net premiums written 207,137
 179,092
 671,880
 626,522
 $8,553
 $8,718
 $18,925
 $23,665
Net premiums earned 217,513
 175,141
 623,574
 538,152
 $11,527
 $22,472
 $24,058
 $47,764
Other insurance revenue 2,488
 2,345
 7,816
 8,696
 250
 754
 658
 1,566
Net loss and LAE (172,273) (132,396) (487,759) (395,718) (6,038) (12,497) (13,079) (26,888)
Commission and other acquisition expenses (54,810) (39,868) (159,744) (139,895) (4,374) (8,147) (9,353) (17,408)
General and administrative expenses (8,595) (9,038) (25,819) (26,717) (1,746) (2,092) (3,359) (5,123)
Underwriting loss $(15,677) $(3,816) $(41,932) $(15,482)
Underwriting (loss) income $(381) $490
 $(1,075) $(89)
Ratios                
Net loss and LAE ratio 78.3% 74.6% 77.2% 72.4% 51.3% 53.8% 52.9% 54.5%
Commission and other acquisition expense ratio 24.9% 22.5% 25.3% 25.6% 37.1% 35.1% 37.8% 35.3%
General and administrative expense ratio 3.9% 5.1% 4.1% 4.8% 14.8% 9.0% 13.6% 10.4%
Expense ratio 28.8% 27.6% 29.4% 30.4% 51.9% 44.1% 51.4% 45.7%
Combined ratio 107.1% 102.2% 106.6% 102.8% 103.2% 97.9% 104.3% 100.2%
The combined ratio for the three and ninesix months ended SeptemberJune 30, 20172020 increased to 107.1%103.2% and 106.6%104.3%, respectively, compared to 102.2%97.9% and 102.8% in100.2% for the same respective periods in 2016, respectively. The combined ratio increase during the three months ended September 30, 2017 was due to the following:
$15.0 million of losses incurred for Hurricanes Harvey and Irma during the third quarter of 2017;
Adverse prior year loss development of $7.9 million during the third quarter of 2017, compared to $10.4 million recorded in the same period in 2016. The third quarter 2017 activity was largely from commercial auto excess from the 2014 underwriting year as well as other liability excess of loss. The adverse development during the third quarter 2016 was primarily from the commercial auto line of business; and
Excluding the impact of catastrophe events and prior year loss development, the combined ratio for the third quarter 2017 would have been 96.7% compared to 96.3% for 2016, reflecting higher initial expected loss ratios for premiums earned during the period.
The increase in the combined ratio for the nine months ended September 30, 2017 was due to the following:
Adverse prior year loss development of $39.5 million during 2017, compared to $37.4 million recorded in the same period in 2016. The 2017 development was2019, largely due to a higher than expecteddeclines in premium volume which increased the expense ratio. Please see the respective sections on net loss, emergence emanating largely from facultative commercial auto as well as certain specific contracts across several lines of business, with over half of the development coming from three accounts. The 2016 adverse development was primarily from the commercial auto line of business;
$15.0 million of losses incurredcommissions and administrative expenses for Hurricanes Harvey and Irma; and
Excluding the catastrophe events and prior year loss development,factors that have impacted the combined ratio forratios in the current period 2017 would have been 98.0% compared to 96.0% for 2016, reflecting higher initial expected loss ratios for premiums earned during the period.discussion below.
Premiums -— Gross premiums written increaseddecreased by $24.2$1.6 million or 13.0%13.8% and $16.5$5.2 million or 2.5%19.4% for the three and ninesix months ended SeptemberJune 30, 20172020, respectively, compared to the same respective periods in 2016, respectively. The increases were2019. This was primarily due to growth resulting from existing client accounts and premium from new customerslower premiums written in German Auto Programs in our IIS business during the three and ninesix months ended SeptemberJune 30, 2017, which was offset by the commutation and return of the unearned premium of a large account during the second quarter of 2017.
2020. Net premiums written increaseddecreased by $28.0$0.2 million or 15.7%1.9% and $4.7 million or 20.0% during the three and six months ended SeptemberJune 30, 20172020 compared to the same periodrespective periods in 20162019 mainly due to growth from all sub-segments as well as the lower utilization of retrocessional capacity.

Netnet premiums written for the nine months ended September 30, 2017 increased by $45.4 million or 7.2%in our German Auto programs within our IIS business as a result of the reduction in the corporate retrocessional program for 2017 and new business written offset by the commutation referred to in the preceding paragraph.discussed above.
The tabletables below showsshow net premiums written by line of business for the three and ninesix months ended SeptemberJune 30, 20172020 and 2016:2019:
For the Three Months Ended September 30, 2017 2016 Change in
  Total % of Total Total % of Total $ %
Net Premiums Written ($ in thousands)   ($ in thousands)   ($ in thousands)  
Property $37,962
 18.3% $30,606
 17.1% $7,356
 24.0%
Casualty 129,726
 62.6% 115,360
 64.4% 14,366
 12.5%
Accident and Health 16,946
 8.2% 14,845
 8.3% 2,101
 14.2%
International 22,503
 10.9% 18,281
 10.2% 4,222
 23.1%
Total Diversified Reinsurance $207,137
 100.0% $179,092
 100.0% $28,045
 15.7%
             
For the Nine Months Ended September 30, 2017
2016 Change in
  Total % of Total Total % of Total $ %
Net Premiums Written ($ in thousands)   ($ in thousands)   ($ in thousands)  
Property $132,398
 19.7% $123,991
 19.8% $8,407
 6.8%
Casualty 391,503
 58.3% 365,332
 58.3% 26,171
 7.2%
Accident and Health 74,504
 11.1% 68,140
 10.9% 6,364
 9.3%
International 73,475
 10.9% 69,059
 11.0% 4,416
 6.4%
Total Diversified Reinsurance $671,880
 100.0% $626,522
 100.0% $45,358
 7.2%
For the Three Months Ended June 30, 2020 2019 Change in
($ in thousands) Total Total $ %
Net Premiums Written        
International $8,498
 $8,736
 $(238) (2.7)%
Other 55
 (18) 73
 NM
Total Diversified Reinsurance $8,553
 $8,718
 $(165) (1.9)%
         
For the Six Months Ended June 30, 2020
2019 Change in
($ in thousands) Total Total $ %
Net Premiums Written        
International $18,870
 $23,683
 $(4,813) (20.3)%
Other 55
 (18) 73
 NM
Total Diversified Reinsurance $18,925
 $23,665
 $(4,740) (20.0)%
NM - not meaningful


Net premiums earned increaseddecreased by $42.4$10.9 million or 24.2%48.7% and $85.4$23.7 million or 15.9%49.6% during the three and ninesix months ended SeptemberJune 30, 20172020, respectively, compared to the same respective periods in 2016, respectively.2019 primarily due to lower earned premiums from German Auto programs and non-renewals in our European Capital Solutions business since 2019. The tabletables below showsshow net premiums earned by line of business:
For the Three Months Ended September 30, 2017 2016 Change in
  Total % of Total Total % of Total $ %
Net Premiums Earned ($ in thousands)   ($ in thousands)   ($ in thousands)  
Property $43,362
 19.9% $29,921
 17.1% $13,441
 44.9 %
Casualty 130,428
 60.0% 105,893
 60.5% 24,535
 23.2 %
Accident and Health 22,780
 10.5% 18,436
 10.5% 4,344
 23.6 %
International 20,943
 9.6% 20,891
 11.9% 52
 0.2 %
Total Diversified Reinsurance $217,513
 100.0% $175,141
 100.0% $42,372
 24.2 %
             
For the Nine Months Ended September 30, 2017 2016 Change in
  Total % of Total Total % of Total $ %
Net Premiums Earned ($ in thousands)   ($ in thousands)   ($ in thousands)  
Property $122,888
 19.7% $103,023
 19.1% $19,865
 19.3 %
Casualty 375,141
 60.2% 313,736
 58.3% 61,405
 19.6 %
Accident and Health 63,878
 10.2% 55,788
 10.4% 8,090
 14.5 %
International 61,667
 9.9% 65,605
 12.2% (3,938) (6.0)%
Total Diversified Reinsurance $623,574
 100.0% $538,152
 100.0% $85,422
 15.9 %
Within our Diversified Reinsurance segment, the business written by Maiden US experienced an increase in net premiums earned for the three and ninesix months ended SeptemberJune 30, 2017 compared to the same periods in 2016 due to overall growth in all sub-segments as well as a reduction in the corporate retrocessional program for 2017. These increases were offset by the2020 and 2019:

commutation of a large account during the second quarter of 2017 and further reduced by the decline in earned premiums from the International business of $4.0 million during the nine months ended September 30, 2017 compared to the same period in 2016.
For the Three Months Ended June 30, 2020 2019 Change in
($ in thousands) Total Total $ %
Net Premiums Earned        
International $11,472
 $22,490
 $(11,018) (49.0)%
Other 55
 (18) 73
 NM
Total Diversified Reinsurance $11,527
 $22,472
 $(10,945) (48.7)%
         
For the Six Months Ended June 30, 2020 2019 Change in
($ in thousands) Total Total $ %
Net Premiums Earned        
International $24,003
 $47,782
 $(23,779) (49.8)%
Other 55
 (18) 73
 NM
Total Diversified Reinsurance $24,058
 $47,764
 $(23,706) (49.6)%
NM - not meaningful
Other Insurance Revenue - —Other insurance revenue, which represents fee income from our IIS business that is not directly associated with premium revenue assumed by the Company increasedas well as other income earned from transitional services relating to the sale of Maiden US, decreased by $0.1$0.5 million or 66.8% and $0.9 million or 58.0% for the three and six months ended June 30, 2020, respectively, compared to the same respective periods in 2019. This was due to the sale of AVS and its subsidiaries on January 10, 2019 as a substantial portion of our fee income was generated by AVS and its subsidiaries in Germany and Austria through its point of sale producers in select OEM's dealerships.
The tables below show other insurance revenue by source for the three and six months ended June 30, 2020 and 2019:    
For the Three Months Ended June 30, 2020 2019 Change
  
($ in thousands)

 %
International $239
 $325
 $(86) (26.5)%
Other income 11
 429
 (418) (97.4)%
Total Diversified Reinsurance $250
 $754
 $(504) (66.8)%
         
For the Six Months Ended June 30, 2020 2019 Change
  ($ in thousands) %
International $592
 $1,061
 $(469) (44.2)%
Other income 66
 505
 (439) (86.9)%
Total Diversified Reinsurance $658
 $1,566
 $(908) (58.0)%

Net Loss and LAE— Net loss and LAE decreased by $6.5 million or 51.7% and $13.8 million or 51.4% for the three and six months ended June 30, 2020, respectively, compared to the same respective periods in 2019. Net loss and LAE ratio decreased to 51.3% and 52.9% for the three and six months ended June 30, 2020, respectively, compared with 53.8% and 54.5% during the same respective periods in 2019.
During the three months ended SeptemberJune 30, 2017 and decreased by $0.9 million for the nine months ended September 30, 2017 compared to the same periods in 2016, respectively.
Net Loss and Loss Adjustment Expenses - Net loss and LAE increased by $39.9 million or 30.1% and $92.0 million or 23.3% for the three and nine months ended September 30, 2017 compared to the same periods in 2016, respectively.
Net loss and LAE ratios were 78.3% and 77.2% for the three and nine months ended September 30, 2017 compared with 74.6% and 72.4% during the same periods in 2016, respectively.
The net loss and LAE ratio increase during the three months ended September 30, 2017 was due to the following:
$15.0 million of losses incurred for Hurricanes Harvey and Irma during the third quarter of 2017;
Adverse prior year loss development of $7.9 million during the third quarter of 2017, compared to $10.4 million recorded in the same period in 2016. The third quarter 2017 activity was largely from commercial auto excess from the 2014 underwriting year as well as other liability excess of loss. The adverse development during the third quarter 2016 was primarily from the commercial auto line of business; and
Excluding the impact of catastrophe events and prior year loss development,2020, the net loss and LAE ratio for the third quarter 2017 would have been 67.9%decreased by 2.5 percentage points compared to 68.7% for 2016, reflecting higher initial expected loss ratios for premiums earned during the period.
The net loss and LAE ratio increase for the nine months ended September 30, 2017 was due to the following:
Adverse prior year loss development of $39.5 million during 2017, compared to $37.4 million recorded in the same period in 2016.2019. The 2017 development2020 loss ratio was largely due to a higher than expected loss emergence emanating largely from facultative commercial auto as well as certain specific contracts across several lines of business, with over half of the development coming from three accounts. The 2016impacted by adverse development was primarily from the commercial auto line of business. The ratio also reflects higher initial expected loss ratios for premiums earning in the nine months ended September 30, 2017;
$15.0 million of losses incurred for Hurricanes Harvey and Irma; and
Excluding the catastrophe events and prior year loss reserve development which was $0.4 million or 3.1 percentage points during the three months ended June 30, 2020, compared to the impact of favorable development of $1.1 million or 4.5 percentage points on the loss ratio in 2019. The loss development in 2020 was driven by adverse experience in specific German Auto programs while the loss development in 2019 was driven by favorable experience in German Auto programs.
During the six months ended June 30, 2020, the net loss and LAE ratio for 2017 would have been 68.6%decreased by 1.6 percentage points compared to 65.5% for 2016, reflecting higher initial expectedthe same period in 2019. The 2020 loss ratios for premiums earnedratio was impacted by favorable prior year loss reserve development which was $0.2 million or 0.7 percentage points during the period.six months ended June 30, 2020, compared to the impact of favorable development of $2.1 million or 4.4 percentage points on the loss ratio in 2019. The loss development in 2020 was driven by favorable experience in German Auto programs, while the favorable loss development in 2019 was due to favorable experience from facultative reinsurance run-off lines as well as German Auto programs.

The impact on the net loss and LAE ratios should be considered in conjunction with the commission and other acquisition expense ratio as changes to either ratio can be effected by the changes in the mix of business and the impact of the increaseincreases in the commission and other acquisition expense rates on pro-rata contracts with loss sensitive features. As a result of these factors, as well as the impactsimpact on the loss ratio described above, the combined ratio increased by 4.95.3 and 3.84.1 percentage points for the three and ninesix months ended SeptemberJune 30, 20172020 compared to the same respective periods in 2016, respectively.2019.
Commission and Other Acquisition Expenses -— Commission and other acquisition expenses increaseddecreased by $14.9$3.8 million or 37.5%46.3% and $19.8$8.1 million or 14.2%46.3% for the three and ninesix months ended SeptemberJune 30, 20172020, respectively, compared to the same respective periods in 2016, respectively. 2019, largely as a result of the corresponding decrease in net premiums earned in this segment.
The increase in ratioscommission and other acquisition expense ratio for the three and ninesix months ended SeptemberJune 30, 2017 was primarily due2020 increased to 37.1% and 37.8%, respectively, compared to 35.1% and 35.3% for the same respective periods in 2019, reflecting the change in the mix of pro rata versus excess of loss premiums written.written compared to the same respective periods in 2019. Please refer to the reasonspreceding paragraph for the changes inother factors that can impact the combined ratio discussed in the preceding paragraph.ratio.
General and Administrative Expenses -— General and administrative expenses decreased by $0.4$0.3 million or 4.9%16.5% and $0.9$1.8 million or 3.4%34.4% for the three and ninesix months ended SeptemberJune 30, 20172020, respectively, compared to the same respective periods in 2016, respectively.2019. The general and administrative expense ratio was 3.9%increased to 14.8% and 4.1%13.6% for the three and ninesix months ended SeptemberJune 30, 20172020, respectively, compared to 5.1%9.0% and 4.8%10.4% for the same respective periods in 2016, respectively. 2019 due to lower net premiums earned compared to prior periods.
The overall expense ratio (including commission and other acquisition expenses) for the three and ninesix months ended SeptemberJune 30, 2017 was 28.8%2020 increased to 51.9% and 29.4%51.4% compared to 27.6%44.1% and 30.4%45.7% for the same respective periods in 2016, respectively.

2019 largely as a result of lower premium revenue compared to the respective prior year periods.
AmTrust Reinsurance Segment
The AmTrust Reinsurance segment reported underwriting lossresults of $58.1$0.4 million income and $64.4$2.6 million loss during the three and ninesix months ended SeptemberJune 30, 2017,2020, respectively, compared to an underwriting incomeloss of $21.2$39.6 million and $65.1$81.5 million in the comparativesame respective periods in 2016, respectively. 2019. The improved underwriting results in the current year periods were primarily driven by a lower combined ratio on significantly lower earned premiums during the three and six months ended June 30, 2020 compared to the respective prior periods in 2019.
The underwriting results and associated ratios for the AmTrust Reinsurance segment for the three and ninesix months ended SeptemberJune 30, 20172020 and 20162019 were as follows:
 For the Three Months Ended September 30, For the Nine Months Ended September 30, For the Three Months Ended June 30, For the Six Months Ended June 30,
($ in thousands) 2017 2016 2017 2016 2020 2019 2020 2019
Gross premiums written $420,019
 $520,104
 $1,575,677
 $1,591,902
 $(4,705) $(9,127) $(4,705) $(585,604)
Net premiums written 410,193
 511,561
 1,529,980
 1,507,389
 $(4,463) $(9,127) $(4,463) $(585,604)
Net premiums earned 436,353
 523,137
 1,450,811
 1,413,699
 $9,781
 $111,514
 $28,465
 $269,324
Net loss and LAE (355,030) (334,310) (1,047,222) (898,703) (4,970) (109,088) (19,015) (247,158)
Commission and other acquisition expenses (138,650) (166,836) (465,789) (447,604) (3,780) (41,509) (10,774) (101,865)
General and administrative expenses (771) (759) (2,240) (2,308) (667) (562) (1,311) (1,828)
Underwriting (loss) income $(58,098) $21,232
 $(64,440) $65,084
Underwriting income (loss) $364
 $(39,645) $(2,635) $(81,527)
Ratios                
Net loss and LAE ratio 81.4% 63.9% 72.2% 63.5% 50.8% 97.8% 66.8% 91.8%
Commission and other acquisition expense ratio 31.7% 31.9% 32.1% 31.7% 38.6% 37.2% 37.8% 37.8%
General and administrative expense ratio 0.2% 0.1% 0.1% 0.2% 6.9% 0.5% 4.7% 0.7%
Expense ratio 31.9% 32.0% 32.2% 31.9% 45.5% 37.7% 42.5% 38.5%
Combined ratio 113.3% 95.9% 104.4% 95.4% 96.3% 135.5% 109.3% 130.3%
The AmTrust Reinsurance segment experienced an increase in the combined ratio decreased 39.2 percentage points to 113.3%96.3% for the three months ended SeptemberJune 30, 20172020 compared to 95.9%135.5% for the same period in 2016,2019 partly due to the following:
Adverseimpact of favorable prior year loss development of $61.1$0.4 million or 4.3 percentage points during the thirdsecond quarter 2017,of 2020 compared to $2.0the impact of adverse prior year development of $27.1 million recorded inor 24.3 percentage points for the same period in 2016.2019. Prior year favorable development in 2020 was primarily due to Workers Compensation partly offset by adverse development within Commercial Auto Liability. The third quarter 2017 activityadverse development in 2019 was largely from the general liability line of business as well as auto liability and workers compensation lines of business for both Specialty Programs and Smallprimarily due to Commercial where elevated loss activity has been observed. $16.2 million of the third quarter of 2017 adverse lossAuto Liability in accident years 2015 to 2018, partly offset by favorable development came from one program which was terminated by AmTrust on September 1, 2017.in Workers Compensation.
During the third quarter of 2017, the AmTrust Reinsurance segment recognized total estimated losses from Hurricanes Harvey and Irma of $5.0 million.
Excluding the catastrophe events and prior year loss development, theThe combined ratio decreased 21.0 percentage points to 109.3% for the current period in 2017 would have been 98.2%six months ended June 30, 2020 compared to 95.6%130.3% for 2016, reflecting higher initial expected loss ratios for premiums earned during the period.
The AmTrust Reinsurance segment experienced an increase in the combined ratio to 104.4% for the nine months ended September 30, 2017 compared to 95.4% during the same period in 20162019 partly due to the following:
Adverseimpact of favorable prior year loss development of $100.9$0.4 million compared to $1.5 million recorded in 2016. Similar to the third quarter activity, the year to date 2017 activity was largely from the general liability line of business as well as auto liability and workers compensation lines of business for both Specialty Programs and Small Commercial where elevated loss activity has been observed.
During the current period, the AmTrust Reinsurance segment recognized total estimated losses from Hurricanes Harvey and Irma of $5.0 million.
Excluding the catastrophe events and prior year loss development, the combined ratio for the current period in 2017 was 97.1% compared to 95.3% for 2016, reflecting higher initial expected loss ratios for premiums earnedor 1.5 percentage points during the period.

Premiums - Gross premiums written decreased by $100.1 million or 19.2% and $16.2 million or 1.0% for the three and nine months ended September 30, 2017first half of 2020 compared to the impact of adverse prior year development of $35.2 million or 13.1 percentage points for the same periodsperiod in 2016, respectively.2019. Prior year favorable development in 2020 was primarily due to Workers Compensation partly

offset by adverse development within Commercial Auto Liability. The decreaseadverse development in 2019 was primarily due to Commercial Auto Liability in accident years 2014 to 2018, partly offset by favorable development in Workers Compensation.
Premiums—There were negative gross and net premiums written for the three and six months ended SeptemberJune 30, 20172020 reflecting premium adjustments under the AmTrust Quota Share as of April 1, 2020. Furthermore, the termination of both the AmTrust Quota Share and the European Hospital Liability Quota Share as of January 1, 2019, led to no new business written under these contracts during 2020.
In 2019, the Partial Termination Amendment resulted in Maiden Reinsurance returning approximately $648.0 million in unearned premium to AII, or approximately $436.8 million net of applicable ceding commission and brokerage, which caused negative gross and net premiums written for the three and six months ended June 30, 2019.
The tables below show net premiums written by category for the three and six months ended June 30, 2020 and 2019:
For the Three Months Ended June 30, 2020 2019
($ in thousands) Total Total
Net Premiums Written    
Small Commercial Business $(6,394) $5,515
Specialty Program 477
 (16,031)
Specialty Risk and Extended Warranty 1,454
 1,389
Total AmTrust Reinsurance $(4,463) $(9,127)
     
For the Six Months Ended June 30, 2020 2019
($ in thousands) Total Total
Net Premiums Written    
Small Commercial Business $(6,394) $(337,166)
Specialty Program 477
 (28,639)
Specialty Risk and Extended Warranty 1,454
 (219,799)
Total AmTrust Reinsurance $(4,463) $(585,604)
Net premiums earned decreased by $101.7 million or 91.2% and $240.9 million or 89.4% for the three and six months ended June 30, 2020, respectively, compared to the same respective periods in 2019 due to the terminations of the AmTrust Quota Share and European Hospital Liability Quota Share as of January 1, 2019. There were negative net premiums earned on Small Commercial Business for the three and six months ended June 30, 2020 due to premium adjustments and earned premium returns under the recent commutation of certain home warranty business under the AmTrust Quota Share as of April 1, 2020.

The tables below detail net premiums earned by category for the three and six months ended June 30, 2020 and 2019:
For the Three Months Ended June 30, 2020 2019 Change in
($ in thousands) Total % of Total Total % of Total $ %
Net Premiums Earned            
Small Commercial Business $(7,112) (72.7)% $23,283
 20.9% $(30,395) (130.5)%
Specialty Program 426
 4.4 % 30,326
 27.2% (29,900) (98.6)%
Specialty Risk and Extended Warranty 16,467
 168.3 % 57,905
 51.9% (41,438) (71.6)%
Total AmTrust Reinsurance $9,781
 100.0 % $111,514
 100.0% $(101,733) (91.2)%
             
For the Six Months Ended June 30, 2020 2019 Change in
($ in thousands) Total % of Total Total % of Total $ %
Net Premiums Earned            
Small Commercial Business $(6,173) (21.7)% $62,738
 23.3% $(68,911) (109.8)%
Specialty Program 501
 1.8 % 106,547
 39.6% (106,046) (99.5)%
Specialty Risk and Extended Warranty 34,137
 119.9 % 100,039
 37.1% (65,902) (65.9)%
Total AmTrust Reinsurance $28,465
 100.0 % $269,324
 100.0% $(240,859) (89.4)%

Net Loss and LAE— Net loss and LAE decreased by $104.1 million or 95.4% and $228.1 million or 92.3% for the three and six months ended June 30, 2020, respectively, compared to the same respective periods in 2019 due to significantly lower earned premiums as a result of the termination of both quota share agreements with AmTrust. Net loss and LAE ratios decreased to 50.8% and 66.8% for the three and six months ended June 30, 2020, respectively, compared to 97.8% and 91.8% for the same respective periods in 2019.
During the three months ended June 30, 2020, the net loss and LAE ratio decreased by 47.0 percentage points compared to the same period in 2016 was2019 primarily due to the result offollowing factors:
the Partial Termination Amendment caused significant changes in 2017, to the mix of programsbusiness being earned in 2020 compared to 2019. These changes resulted in a current year loss ratio which decreased relative to the same period in 2019 for the remaining in-force business; and
the impact of prior year loss development was favorable development of $0.4 million or 4.3 percentage points during the three months ended June 30, 2020 on the loss ratio, compared to the impact of adverse prior year loss development which was $27.1 million or 24.3 percentage points for the same period in 2019. Prior year favorable development in 2020 was primarily due to Workers Compensation partly offset by adverse development within Commercial General Liability. Prior year adverse development in 2019 was due to favorable development in Commercial Auto Liability in accident years 2014 to 2017, Specialty Risk and Extended Warranty business and,Hospital Liability, partly offset by favorable development in 2016,Workers Compensation.
During the cumulative cession of premium for the first time from a series of acquisitions made by AmTrust in its Small Commercial and Specialty Program businesses as well as slower organic growth.
The decrease in gross premiums written for the ninesix months ended SeptemberJune 30, 20172020, the net loss and LAE ratio decreased by 25.0 percentage points compared to the same period in 2016 reflects slower organic growth overall as well as reductions AmTrust's Specialty Program segment and Small Commercial non-workers’ compensation business reflecting underwriting initiatives focused on improving2019 primarily due to the profitability of these classes of business.following factors:
The table below shows net premiums written by linethe Partial Termination Amendment caused significant changes in the mix of business for the three and nine months ended September 30, 2017 and 2016:
For the Three Months Ended September 30, 2017 2016 Change in
  Total % of Total Total % of Total $ %
Net Premiums Written ($ in thousands)   ($ in thousands)   ($ in thousands)  
Small Commercial Business $295,499
 72.0% $314,677
 61.5% $(19,178) (6.1)%
Specialty Program 63,816
 15.6% 98,895
 19.3% (35,079) (35.5)%
Specialty Risk and Extended Warranty 50,878
 12.4% 97,989
 19.2% (47,111) (48.1)%
Total AmTrust Reinsurance $410,193
 100.0% $511,561
 100.0% $(101,368) (19.8)%
             
For the Nine Months Ended September 30, 2017 2016 Change in
  Total % of Total Total % of Total $ %
Net Premiums Written ($ in thousands)   ($ in thousands)   ($ in thousands)  
Small Commercial Business $1,028,905
 67.3% $983,601
 65.3% $45,304
 4.6 %
Specialty Program 255,767
 16.7% 268,193
 17.8% (12,426) (4.6)%
Specialty Risk and Extended Warranty 245,308
 16.0% 255,595
 16.9% (10,287) (4.0)%
Total AmTrust Reinsurance $1,529,980
 100.0% $1,507,389
 100.0% $22,591
 1.5 %
Net premiums writtenbeing earned in our AmTrust Reinsurance segment for the three months ended September 30, 20172020 compared to 2019. These changes resulted in a current year loss ratio which decreased by $101.4 million or 19.8% and increased by $22.6 million or 1.5% during the nine months ended September 30, 2017 comparedrelative to the same periodsperiod in 2016, respectively. See gross premiums written section above for details. The retroceded premiums increased by $1.3 million and decreased by $38.8 million during the three and nine months ended September 30, 2017 compared to the same periods in 2016, respectively.
Net premiums earned decreased by $86.8 million or 16.6% and increased by $37.1 million or 2.6%2019 for the threeremaining in-force business; and nine months ended September 30, 2017 compared to
the same periods in 2016, respectively. See net premiums written section above for details in the movement in earned premium. The retroceded premiums earned increased by $6.0 million and decreased by $10.6 million during the three and nine months ended September 30, 2017 compared to the same periods in 2016, respectively.

The table below details net premiums earned by lineimpact of business for the three and nine months ended September 30, 2017 and 2016:
For the Three Months Ended September 30, 2017 2016 Change in
  Total % of Total Total % of Total $ %
Net Premiums Earned ($ in thousands)   ($ in thousands)   ($ in thousands)  
Small Commercial Business $314,773
 72.1% $320,596
 61.3% $(5,823) (1.8)%
Specialty Program 59,143
 13.6% 89,856
 17.2% (30,713) (34.2)%
Specialty Risk and Extended Warranty 62,437
 14.3% 112,685
 21.5% (50,248) (44.6)%
Total AmTrust Reinsurance $436,353
 100.0% $523,137
 100.0% $(86,784) (16.6)%
             
For the Nine Months Ended September 30, 2017 2016 Change in
  Total % of Total Total % of Total $ %
Net Premiums Earned ($ in thousands)   ($ in thousands)   ($ in thousands)  
Small Commercial Business $946,782
 65.3% $864,699
 61.2% $82,083
 9.5 %
Specialty Program 251,153
 17.3% 251,543
 17.8% (390) (0.2)%
Specialty Risk and Extended Warranty 252,876
 17.4% 297,457
 21.0% (44,581) (15.0)%
Total AmTrust Reinsurance $1,450,811
 100.0% $1,413,699
 100.0% $37,112
 2.6 %
Net Loss and Loss Adjustment Expenses - Net loss and LAE increased by $20.7 million or 6.2% and $148.5 million or 16.5% for the three and nine months ended September 30, 2017 compared to the same periods in 2016, respectively. Net loss and LAE ratios were 81.4% and 72.2% for the three and nine months ended September 30, 2017 compared to 63.9% and 63.5% for the same periods in 2016, respectively.
The net loss and LAE ratio during the three months ended September 30, 2017 increased primarily as a result of the following:
Adverse prior year loss development was favorable development of $61.1$0.4 million or 1.5 percentage points during the third quarter 2017,six months ended June 30, 2020 on the loss ratio, compared to $2.0the impact of adverse prior year loss development which was $35.2 million recorded inor 13.1 percentage points for the same period in 2016. The third quarter 2017 activity2019. Prior year favorable development in 2020 was largely from the general liability line of business as well as auto liability and workers compensation lines of business for both Specialty Programs and Small Commercial where elevated loss activity has been observed. $16.2 million of the third quarter 2017 adverse development came from one program which was terminated by AmTrust on September 1, 2017;
During the third quarter of 2017, the AmTrust Reinsurance segment recognized total estimated losses from Hurricanes Harvey and Irma of $5.0 million; and
Excluding the catastrophe events and prior year loss development, the net loss and LAE ratio for the current period in 2017 would have been 66.2% compared to 63.5% for 2016, reflecting higher initial expected loss ratios for premiums earned during the period.
The net loss and LAE ratio for the nine months ended September 30, 2017 increased primarily due to the following:
Adverse prior year loss development of $100.9 million during 2017, compared to $1.5 million recorded in 2016. Similar to the third quarter , the year to date 2017Workers Compensation partly offset by adverse development within Commercial General Liability. Prior year adverse development in 2019 was largely from the general liability line of business as well as auto liability and workers compensation lines of business for both Specialty Programs and Smalldue to favorable development in Commercial where elevated loss activity has been observed;Auto Liability in accident years 2014 to 2018, partly offset by favorable development in Workers Compensation.
During the third quarter of 2017, the AmTrust Reinsurance segment recognized total estimated losses from Hurricanes Harvey and Irma of $5.0 million; and
Excluding the catastrophe events and prior year loss development, the net loss and LAE ratio for the current period in 2017 was 64.9% compared to 63.5% for 2016, reflecting higher initial expected loss ratios for premiums earned during the period.


Commission and Other Acquisition Expenses -— Commission and other acquisition expenses decreased by $28.2$37.7 million or 16.9%90.9% and increased by $18.2$91.1 million or 4.1%89.4% for the three and ninesix months ended SeptemberJune 30, 20172020, respectively, compared to the same respective periods in 2016, respectively. 2019 due to significantly lower earned premiums as a result of the terminations of both quota share agreements with AmTrust effective as of January 1, 2019.
The commission and other acquisition expense ratio decreased to 31.7% and increased to 32.1%38.6% and remained flat at 37.8% for the three and ninesix months ended SeptemberJune 30, 2017,2020, respectively, compared to 31.9%37.2% and 31.7% during37.8% for the three and nine months ended September 30, 2016, respectively. The fluctuations in the ratios during the three and nine months ended September 30, 2017 compared to the comparativesame respective periods in 2016 reflect the change in the mix of business. The commission ratio is also affected by the commission associated with the retrocession premium ceded during the three and nine months ended September 30, 2017 versus the same periods in 2016.2019.
General and Administrative Expenses -— General and administrative expenses increased by 1.6%$0.1 million or 18.7% and decreased by 2.9%,$0.5 million or 28.3% for the three and ninesix months ended SeptemberJune 30, 20172020, respectively, compared to the same respective periods in 2016, respectively.2019. The general and administrative expense ratioratios increased slightly to 0.2%6.9% and decreased slightly to 0.1%4.7% for the three and ninesix months ended SeptemberJune 30, 2017 from 0.1%2020, respectively, compared to 0.5% and 0.2% during0.7% for the three and nine months ended September 30, 2016, respectively. same respective periods in 2019 as a result of significantly lower earned premiums due to the termination of both quota share agreements with AmTrust as of January 1, 2019.
The overall expense ratio (including commission and other acquisition expenses) was 31.9%increased to 45.5% and 32.2%42.5% for the three and ninesix months ended SeptemberJune 30, 20172020, respectively, compared to 32.0%37.7% and 31.9% 38.5%for the three and nine months ended September 30, 2016, respectively.same respective periods in 2019 primarily due to significantly lower earned premiums as discussed above.

Liquidity and Capital Resources
Liquidity
Maiden Holdings is a holding company and transacts no business of its own. We therefore rely on cash flows in the form of dividends, advances, loans and other permitted distributions from our subsidiary companies to pay expenses and make dividend payments on our common and preference shares. The jurisdictions in which our operating subsidiaries are licensed to write business impose regulations requiring companies to maintain or meet statutory solvency and liquidity requirements. Some jurisdictionsrequirements and also place restrictions on the declaration and payment of dividends and other distributions.
As of June 30, 2020, the Company had investable assets of $2.5 billion compared to $2.8 billion as of December 31, 2019. Investable assets are the combined total of our investments, cash and cash equivalents (including restricted), loan to a related party and funds withheld receivable. The decrease in investable assets is primarily the result of significant negative operating cash flows during six months ended June 30, 2020, particularly as a result of our cessation of active reinsurance underwriting, including certain contract terminations that occurred in 2019 that require the disbursement of cash and investments to settle claim payments in 2020.
The regulatory and liquidity requirements of the Company's operating segments are discussed in "Management's"Management's Discussionand Analysis of Financial Condition and Results of Operations" section included under Item 7 of our Annual Report on Form 10- K for the year ended December 31, 2016,2019, filed with the SEC on March 6, 2017.18, 2020.
As previously indicated, Maiden Reinsurance re-domesticated to Vermont on March 16, 2020. We expect to be actively engaged with the Vermont DFR regarding the formulation of Maiden Reinsurance's longer term business plan, including its investment policy, changes to which require prior regulatory approval as stipulated by Vermont law or the Vermont DFR for any active

underwriting, capital management or other strategic initiatives. Maiden Reinsurance has received all necessary approvals required to date by the Vermont DFR.
The Company's investment portfolio may be adversely impacted by unfavorable market conditions caused by the COVID-19 pandemic and we and our insurance subsidiaries may need additional capital to maintain compliance with regulatory capital requirements and/or be required to post additional collateral under existing reinsurance arrangements, which could reduce our liquidity. In addition, we may experience continued volatility in our results of operations which could negatively impact our financial condition and create a reduction in the amount of available distribution or dividend capacity from our regulated reinsurance subsidiaries, which would also reduce liquidity.
Operating, investing and financing cash flows
Our sources of funds primarily consisthistorically have consisted of premium receipts net of commissions and brokerage, investment income, net proceeds from capital raising activities, which may include the issuance of debt and common and preference shares, and proceeds from sales, maturities, pay downs and redemption of investments. Cash is currently used primarily to pay loss and LAE, ceded reinsurance premium, general and administrative expenses, and interest expense, and dividends, with the remainder in excess of our operating requirements, made available to our investment managers for investment in accordance with our investment policy.
Our business has undergone significant changes in the past two years. As previously noted, the Strategic Review resulted in a series of transactions that have materially reduced our balance sheet risk and have transformed our operations. As a result of the transactions entered into from the Strategic Review, we are not engaged in any active underwriting of reinsurance business thus our net premiums written will continue to be materially lower in 2020 and investment income will become a significantly larger portion of our total revenues. This has caused significant negative operating cash flow, particularly as we run off the AmTrust Reinsurance reserves as shown in the table below. We expect this trend to continue going forward for the rest of 2020 and beyond.
We expect to use funds from cash and investment portfolios, collected premiums on reinsurance contracts in force or being run-off, investment income and proceeds from investment sales and redemptions to meet our expected claims payments and operational expenses. Claim payments will be principally from the run-off of existing reserves for loss and loss adjustment expenses. A significant portion of those liabilities are collateralized and claim payments will be funded by using this collateral which should provide sufficient funding to fulfill those obligations. We generally expect negative operating cash flows to be partly offset by positive investing cash flows. Overall, we continue to expect our cash flows to be sufficient to meet our cash requirements and to operate our business.
At June 30, 2020 and December 31, 2019, unrestricted cash and cash equivalents and unrestricted fixed maturity investments were $401.8 million and $435.0 million, respectively. The Company’s management believes its current sources of liquidity are adequate to meet its cash requirements for the next twelve months. The table below summarizes our operating, investing and financing cash flows for the ninesix months ended SeptemberJune 30, 20172020 and 2016:2019:
For the Nine Months Ended September 30, 2017 2016
For the Six Months Ended June 30, 2020 2019
 ($ in thousands) ($ in thousands)
Operating activities $374,779
 $326,157
 $(419,152) $(503,657)
Investing activities (212,053) (291,389) 447,969
 630,908
Financing activities (28,440) (59,665) (1) (13)
Effect of exchange rate changes on foreign currency cash 2,644
 2,715
 1,359
 (177)
Total increase (decrease) in cash and cash equivalents $136,930
 $(22,182)
Total increase in cash, restricted cash and cash equivalents 30,175
 127,061
Less: change in cash, restricted cash and cash equivalents of discontinued operations —
 (6,113)
Total increase in cash, restricted cash and cash equivalents of continuing operations $30,175
 $133,174
Cash Flows fromused in Operating Activities
Cash flows fromused in operating activities for the six months ended June 30, 2020 were $419.2 million compared to cash flows used in operating activities of $503.7 million for the six months ended June 30, 2019, a decrease of $84.5 million. Cash flows used in discontinued operations were $0.0 million for the six months ended June 30, 2020 compared to $1.9 million in the six months ended June 30, 2019. Cash flows used in continuing operating activities were $419.2 million for the six months ended June 30, 2020 compared to cash flows used in continuing operations of $501.8 million for the six months ended June 30, 2019.
The operating cash flows used in continuing operations for the ninesix months ended SeptemberJune 30, 20172020 and 2019 were $374.8 million compared to $326.2 million for the nine months ended September 30, 2016, a 14.9% increase. In 2016, operating cash flows were reduced by the settlement of a $107.0 million commutation with AmTrust. Adjusted for the commutation, cash flows from operations for the nine months ended September 30, 2017 were $58.4 million or 13.5% lower compared to the same period in 2016. The decrease wasprimarily the result of a higher combined ratiothe termination of the AmTrust Quota Share including both the Partial Termination Amendment and largely unchangedthe Commutation and Release Agreement, and the termination of the European Hospital Liability Quota Share, which significantly decreased gross premiums written in 2017 compared to 2016.
Reservesduring both respective periods while claim payments have been principally from the run-off of existing reserves for loss and LAE during the nine months ended September 30, 2017 also increased by $168.7 million following the adverse development recognized on both our operating segments as well as our run–off business and the current year estimated losses from Hurricanes Harvey and Irma.LAE.
Cash Flows from Investing Activities
Cash flows from investing activities consist primarily of proceeds from the sales and maturities of investments and payments for investments acquired. Net cash used inprovided by investing activities was $212.1$448.0 million for the ninesix months ended SeptemberJune 30, 20172020 compared to $291.4$630.9 million for the same period in 2016. The Company continues2019 primarily due to deploy available cash for longer-term investments as investment conditions permit and to maintain, where possible, cash and cash equivalents balances at low levels. Our total cash balance as at September 30, 2017 includesproceeds from the pending settlement of investments purchased of $21.7 million which settled in October. For the nine months ended September 30, 2017, the purchasessale of fixed maturity securities exceededinvestments which were made to settle claim payments during the six months ended June 30, 2020.

Cash flows used in discontinued operations was $0.0 million for the six months ended June 30, 2020 compared to cash flows used in discontinued operations of $6.1 million for the same period in 2019. Cash flows provided by continuing operations was $448.0 million during the six months ended June 30, 2020 compared to cash flows provided by continuing operations of $637.0 million for the same period in 2019 as the proceeds from the sales, maturities and calls exceeded the purchases of fixed maturity securities by $192.8 million. Adding$453.0 million compared to an inflow of $638.5 million for the outflow was the increasesame period in restricted cash and cash equivalents of $27.0 million offset by the net proceeds from other investing activities of $7.8 million.2019.
Cash Flows from Financing Activities
Cash flows used in financing activities were $28.4 million$1.0 thousand for the ninesix months ended SeptemberJune 30, 20172020 compared to $59.7 million$13.0 thousand for the same period in 2016. The decrease in net cash outflow for the nine months ended September 30, 2017 compared to the same period in 2016 was due to the issuance of new preference shares with net proceeds of $144.9 million,2019 which was partially used to redeem the 2012 senior notes issuance of $100.0 million. The net proceeds from the preference share issue were offset by the repurchaserepresent repurchases of common shares to settle employee withholdings in respect of $14.9 milliontax obligations on the vesting of restricted shares and performance based shares. No dividends on common or preference shares were paid during the current period in 2017 bulksix months ended June 30, 2020 and 2019. Our Board of which was made underDirectors have not declared any common or preference share dividends since the Company's authorized share repurchase program. In addition, there was a decrease in dividends paid on preference shares of $7.1 million due to the mandatory conversion of Preference Shares Series B to Maiden's common shares during the thirdfourth quarter of 2016, offset by the increase in dividends paid to common shareholders of $7.9 million due to an increased number of common shares outstanding as well as higher dividend rate in 2017.

2018.
Restrictions, Collateral and Specific Requirements
The Company's restrictions, collateral and specific requirements are discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations" section included under Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2016,2019, filed with the SEC on March 6, 2017.18, 2020.
At SeptemberJune 30, 20172020 and December 31, 2016,2019, restricted cash and cash equivalents and fixed maturity investments used as collateral were $4.86$1.2 billion and $4.40$1.5 billion, respectively. This collateral represents 90.8%74.5% and 90.0%77.6% of the fair value of our total fixed maturity investments and cash, and cash equivalents (including restricted cash and cash equivalents)equivalents at SeptemberJune 30, 20172020 and December 31, 2016,2019, respectively. The $462.0 million increase was primarily attributable to the increase in assets provided as collateral for the AmTrust Reinsurance segment reflecting continued growth in both premiums and reserves.
Investments
The investment of our funds ishas generally been designed to ensure safety of principal while generating current income. Accordingly, our funds arehave been invested in liquid, investment-grade fixed income securities which are all designated as either available-for-sale ("AFS") or held-to-maturity ("HTM"). In 2017 and 2016, the Company designated certain corporate and municipal bonds previously classified as AFS to HTM to reflect our intention of holding these bonds until maturity. Seeat June 30, 2020. Please see "Notes to Condensed Consolidated Financial Statements (unaudited) Note 4. Investments" included under Part I Item 1 "Financial Information" of this Form 10-Q.
As our insurance liabilities continue to run-off and the required capital to operate our business for regulatory purposes decreases, we may have the ability to consider additional asset classes to enhance the income and returns our investment portfolio produces. We may allocate a portion of our investment portfolio to other investments, including private equity and credit funds, fixed income funds, hedge funds, equity funds and other non-fixed income investments.
We may utilize and pay fees to various companies to provide investment advisory and/or management services related to these investments. These fees, which would be predominantly based upon the amount of assets under management, would be included in net investment income. We believe these other investments and equity method investments would provide diversification against our fixed income investments and an opportunity for improved risk-adjusted returns; however, the returns of these investments may be more volatile and we may experience significant unrealized gains or losses in a particular quarter or year.
The substantial majority of our current and future investments are or will be held by Maiden Reinsurance, whose investment policy is required to be approved by the Vermont DFR. Maiden Reinsurance has received all necessary approvals for its investment policy.
During the ninesix months ended SeptemberJune 30, 2017,2020, the yield on the 10-year U.S. Treasury bond decreased by 12126 basis points to 2.33%0.66%. The 10-year U.S. Treasury rate is the key risk-free determinant in the fair value of many of the securities in our AFS portfolio. The decrease in interest ratesU.S. Treasury yield curve experienced a material downward shift during the ninesix months ended SeptemberJune 30, 2017 reflects some uncertainty2020, reflecting significant global financial and economic volatility from the COVID-19 pandemic which spread during the first half of 2020. The global nature of the pandemic resulted in an abrupt downturn in economic activity both globally and within the U.S., and financial markets experienced unprecedented volatility during this period. The U.S. Federal Reserve, along with central bankers globally, implemented multiple rounds of rapid and aggressive monetary measures to provide liquidity to financial markets and to relieve imbalances that rapidly formed in those markets in the face of the pandemic and its economic and financial impacts. Government policymakers in the U.S. and globally have additionally implemented an ongoing series of unprecedented fiscal policy despite generally improvingmeasures to provide immediate and near-term economic conditions in both the U.S and internationally. Relaxation of stringent monetary policy as has been experienced in recent years continuesrelief to emerge but at a gradual pace.affected populations.
The movement in the market values of our AFS fixed maturity portfolio was aduring the six months ended June 30, 2020 generated net gainunrealized losses of $73.6$4.8 million, primarily due to foreign exchangethe ongoing COVID-19 pandemic which has caused widening credit spreads, a surging demand for liquidity and a slowdown to global economic activity, all of which have decreased bond prices during the six months ended June 30, 2020.
Due in large part to the ongoing uncertainty caused by the COVID-19 pandemic in global financial markets during the six months ended June 30, 2020, our investment portfolio experienced significant fluctuation in unrealized gains of $52.5 million arisingand losses (largely due to rapidly fluctuating credit spreads on fixed income investments), increased volatility, heightened credit risk, and declines in yields on our euro-denominatedfixed income investments. Our investment portfolio followingportfolios may be adversely impacted by unfavorable market conditions caused by the strengtheningCOVID-19 pandemic, which could cause continued volatility in our results of the euro versus the U.S. dollar during the nine months ended September 30, 2017. See "Liquidityoperations and Capital Resources - Capital Resources" on page 63 for further information.negatively impact our financial condition.
At SeptemberJune 30, 2017,2020, we consider the levels of cash and cash equivalents we are holding to be within our targeted ranges. At September 30, 2017 there was approximately $21.7 million in liability for investments purchased on the Company's Consolidated Balance Sheet compared to $6.4 million as at December 31, 2016, which was subsequently settled in cash after the quarter end. However, duringDuring periods when interest rates experience greater volatility, we have periodically maintained more cash and cash equivalents in order to better assess current market conditions and opportunities within our defined risk appetite, and may do so in future periods.
In order to To limit our exposure to unexpected interest rate increases which would reduce the value of our fixed income securities and reduce our shareholders' equity, we attempt to maintain the duration of our fixed maturity investment portfolio combined with our cash and cash equivalents, both restricted and unrestricted, within a reasonable range of the duration of our loss reserves.

At SeptemberJune 30, 20172020 and December 31, 2016,2019, these respective durations in years were as follows:
 September 30, 2017 December 31, 2016 June 30, 2020 December 31, 2019
Fixed maturities and cash and cash equivalents 4.4 4.9 2.0 3.0
Reserve for loss and LAE(1) 3.6 3.8 4.5 4.2
At September(1) The duration regarding our reserve for loss and LAE at June 30, 2017 and December 31, 20162020 is gross of LPT/ADC Agreement reserves.
During the six months ended June 30, 2020, the weighted average duration of our fixed maturity investment portfolio decreased by 0.51.0 years to 4.42.0 years and the duration for the reserve for loss and LAE decreasedincreased by 0.3 years to 3.64.5 years. The differential in duration between these assets and liabilities may fluctuate over time and in the case of fixed maturities, ishistorically has been affected by factors such as market conditions, changes in asset mix and prepayment speeds in the case of both our agency mortgage-backed securities ("Agency MBS") and commercial mortgage-backed securities ("CMBS").

securities. At June 30, 2020, the duration of our fixed maturity investment portfolio decreased compared to December 31, 2019 due to sales of fixed maturities primarily as a result of settling claim payments with AmTrust. At June 30, 2020, the duration of our loss reserves net of the LPT/ADC Agreement was in line with the duration of our fixed maturity investment portfolio.
The average yield and average duration of our fixed maturities, by asset class, and our cash and cash equivalents (restricted and unrestricted) are as follows:follows at June 30, 2020 and December 31, 2019, respectively:
September 30, 2017 Original or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value 
Average yield(1)
 
Average duration(2)
AFS fixed maturities ($ in thousands)    
June 30, 2020 Original or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value 
Average yield(1)
 
Average duration(2)
 ($ in thousands)    
U.S. treasury bonds $5,194
 $150
 $(8) $5,336
 3.0% 1.7
 $210,512
 $673
 $(2) $211,183
 1.1% 0.2
U.S. agency bonds – mortgage-backed 2,004,645
 14,208
 (12,451) 2,006,402
 2.8% 4.6
 421,150
 14,608
 (375) 435,383
 2.8% 2.8
Non-U.S. government and supranational bonds 33,392
 216
 (2,012) 31,596
 2.7% 3.3
 7,284
 327
 (46) 7,565
 1.4% 6.6
Asset-backed securities 257,969
 4,456
 (164) 262,261
 4.4% 2.3
 186,908
 935
 (3,833) 184,010
 3.0% 0.8
Corporate bonds 1,541,296
 52,717
 (17,624) 1,576,389
 3.2% 5.0
 596,444
 22,360
 (17,382) 601,422
 2.6% 2.8
Municipal bonds 2,500
 103
 —
 2,603
 4.2% 8.1
Total AFS fixed maturities 3,844,996
 71,850
 (32,259) 3,884,587
 3.1% 4.6
HTM fixed maturities            
Corporate bonds 1,057,943
 34,027
 (748) 1,091,222
 3.5% 5.2
Municipal Bonds 60,425
 459
 —
 60,884
 3.2% 5.0
Total HTM fixed maturities 1,118,368
 34,486
 (748) 1,152,106
 3.5% 5.1
 1,422,298
 38,903
 (21,638) 1,439,563
 2.5% 2.2
Cash and cash equivalents 314,275
 —
 —
 314,275
 0.2% 0.0
 137,453
 —
 —
 137,453
 0.1% 0.0
Total $5,277,639
 $106,336
 $(33,007) $5,350,968
 3.0% 4.4
 $1,559,751
 $38,903
 $(21,638) $1,577,016
 2.3% 2.0
December 31, 2016 Original or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value 
Average yield(1)
 
Average duration(2)
AFS fixed maturities ($ in thousands)    
December 31, 2019 Original or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value 
Average yield(1)
 
Average duration(2)
 ($ in thousands)    
U.S. treasury bonds $5,186
 $238
 $(11) $5,413
 3.0% 2.4
 $94,921
 $704
 $—
 $95,625
 2.5% 0.7
U.S. agency bonds – mortgage-backed 1,720,436
 12,867
 (17,265) 1,716,038
 2.8% 4.9
 533,296
 6,717
 (1,291) 538,722
 2.9% 4.1
U.S. agency bonds – other 18,082
 20
 —
 18,102
 3.2% 8.9
Non-U.S. government and supranational bonds 35,158
 73
 (5,297) 29,934
 2.4% 3.4
 11,796
 294
 (91) 11,999
 1.2% 4.6
Asset-backed securities 217,232
 3,713
 (69) 220,876
 4.6% 2.5
 187,881
 821
 (532) 188,170
 3.8% 0.9
Corporate bonds 1,947,347
 30,951
 (62,093) 1,916,205
 3.5% 5.4
 981,441
 31,140
 (15,725) 996,856
 2.9% 3.4
Municipal bonds 62,201
 2,897
 —
 65,098
 4.2% 6.5
 4,091
 55
 —
 4,146
 4.6% 1.4
Total AFS fixed maturities 4,005,642
 50,759
 (84,735) 3,971,666
 3.2% 5.1
HTM fixed maturities            
Corporate bonds 752,212
 16,370
 (2,447) 766,135
 3.6% 5.2
Total HTM fixed maturities 752,212
 16,370
 (2,447) 766,135
    
 1,813,426
 39,731
 (17,639) 1,835,518
 3.0% 3.2
Cash and cash equivalents 149,535
 —
 —
 149,535
 0.1% 0.0
 107,278
 —
 —
 107,278
 0.6% 0.0
Total $4,907,389
 $67,129
 $(87,182) $4,887,336
 3.2% 4.9
 $1,920,704
 $39,731
 $(17,639) $1,942,796
 2.8% 3.0
(1)Average yield is calculated by dividing annualized investment income for each sub-component of AFS and HTMfixed maturity securities and cash and cash equivalents (including amortization of premium or discount) by amortized cost.
(2)Average duration in years.

The following table summarizes the Company's fixed maturity investment portfolio holdings by contractual maturity at SeptemberAt June 30, 2017 and December 31, 2016:
  September 30, 2017 December 31, 2016
($ in thousands) AFS fixed maturities HTM fixed maturities AFS fixed maturities HTM fixed maturities
  Fair Value Amortized cost Fair Value Amortized Cost
Due in one year or less $38,784
 $49,293
 $61,219
 $—
Due after one year through five years 583,569
 335,922
 560,141
 260,557
Due after five years through ten years 990,968
 723,297
 1,371,356
 486,568
Due after ten years 2,603
 9,856
 42,036
 5,087
  1,615,924
 1,118,368
 2,034,752
 752,212
U.S. agency bonds – mortgage-backed 2,006,402
 —
 1,716,038
 —
Asset-backed securities 262,261
 —
 220,876
 —
Total fixed maturities $3,884,587
 $1,118,368
 $3,971,666
 $752,212
Substantially all2020, 100.0% of the Company’s U.S. agency bond holdings are mortgage-backed. Additional details on the Agency MBS at SeptemberJune 30, 20172020 and December 31, 20162019 were as follows:
  September 30, 2017 December 31, 2016
  Fair Value % of Total Fair Value % of Total
U.S. agency bonds - mortgage-backed ($ in thousands)   ($ in thousands)  
Residential mortgage-backed (RMBS)        
GNMA – fixed rate $357,165
 17.8% $368,142
 21.2%
FNMA – fixed rate 893,334
 44.5% 800,947
 46.2%
FNMA – variable rate 14,441
 0.7% 17,761
 1.0%
FHLMC – fixed rate 736,956
 36.8% 523,983
 30.2%
FHLMC – variable rate 4,506
 0.2% 5,205
 0.3%
Total U.S. agency bonds - mortgage-backed 2,006,402
 100.0% 1,716,038
 98.9%
Non-MBS fixed rate agency bonds —
 —% 18,102
 1.1%
Total U.S. agency bonds $2,006,402
 100.0% $1,734,140
 100.0%
The following table provides a summary of changes in fair value associated with our U.S. agency bonds - mortgage-backed portfolio:
  For the Three Months Ended September 30, For the Nine Months Ended September 30,
  2017 2016 2017 2016
Agency MBS: ($ in thousands) ($ in thousands)
Beginning balance $1,795,612
 $1,451,795
 $1,716,038
 $1,476,991
Purchases 271,651
 267,040
 490,237
 366,399
Sales, calls and paydowns (63,438) (104,146) (202,556) (261,238)
Net realized gains on sales – included in net income 22
 —
 (74) 230
Change in net unrealized losses – included in other comprehensive income 3,751
 (7,149) 6,155
 28,156
Amortization of bond premium and discount (1,196) (1,762) (3,398) (4,760)
Ending balance $2,006,402
 $1,605,778
 $2,006,402
 $1,605,778
  June 30, 2020 December 31, 2019
($ in thousands) Fair Value % of Total Fair Value % of Total
U.S. agency bonds - mortgage-backed        
Residential mortgage-backed ("RMBS")        
GNMA – fixed rate $26,513
 6.1% $33,079
 6.1%
GNMA – variable rate 6,750
 1.5% 7,075
 1.3%
FNMA – fixed rate 189,317
 43.5% 241,905
 44.9%
FHLMC – fixed rate 212,803
 48.9% 256,663
 47.7%
Total U.S. agency bonds $435,383
 100.0% $538,722
 100.0%
Our Agency MBS portfolio is 40.1%30.2% of our fixed maturity investments at SeptemberJune 30, 2017.2020. Given the relative size of this portfolio to our total investments, if faster prepayment patterns were to occur over an extended period of time, this could potentially limit the growth in our investment income in certain circumstances or even potentially reducingreduce the total amount of investment income we earn.
At SeptemberJune 30, 20172020 and December 31, 2016, 98.8%2019, 97.6% and 96.5%99.7%, respectively, of our fixed maturity investments 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 equivalent, or less. SeePlease see "Part I, Item 1 - Notes to Condensed Consolidated Financial Statements (unaudited) Note 4. Investments" for additional information on the credit rating of our fixed income portfolio.

The security holdings by sector and financial strength rating of our corporate bond holdings at SeptemberJune 30, 20172020 and December 31, 20162019 were as follows:
 
Ratings(1)
     
Ratings(1)
    
September 30, 2017 AAA AA+, AA, AA- A+, A, A- BBB+, BBB, BBB- BB+ or lower Fair Value % of Corporate bonds portfolio
           ($ in thousands)  
June 30, 2020 AAA, AA+, AA, AA- A+, A, A- BBB+, BBB, BBB- BB+ or lower Fair Value % of Corporate bonds portfolio
Corporate bonds                       ($ in thousands)  
Basic Materials —% —% 1.8% 4.4% 0.9% $186,804
 7.1% —% 0.9% 1.5% —% $14,954
 2.4%
Communications —% 0.5% 1.3% 6.0% —% 209,098
 7.8% —% 1.0% 4.7% 1.8% 44,558
 7.5%
Consumer —% 0.5% 13.9% 11.6% —% 695,590
 26.0% —% 1.4% 26.1% 1.5% 174,554
 29.0%
Energy —% 1.0% 3.8% 3.0% 0.8% 229,598
 8.6% 2.6% 4.8% 4.0% 1.5% 77,673
 12.9%
Financial Institutions 1.4% 3.3% 22.8% 12.3% —% 1,059,788
 39.8% 6.6% 22.2% 12.6% 0.9% 254,517
 42.3%
Industrials —% 0.8% 2.0% 2.8% 0.1% 151,750
 5.7% —% 0.4% 2.9% —% 19,613
 3.3%
Technology —% 1.1% 2.6% 0.8% 0.5% 134,983
 5.0% —% 1.9% 0.7% —% 15,553
 2.6%
Total Corporate bonds 1.4% 7.2% 48.2% 40.9% 2.3% $2,667,611
 100.0%
Total 9.2% 32.6% 52.5% 5.7% $601,422
 100.0%
 
Ratings(1)
     
Ratings(1)
    
December 31, 2016 AAA AA+, AA, AA- A+, A, A- BBB+, BBB, BBB- BB+ or lower Fair Value % of Corporate bonds portfolio
           ($ in thousands)  
December 31, 2019 AAA, AA+, AA, AA- A+, A, A- BBB+, BBB, BBB- BB+ or lower Fair Value % of Corporate bonds portfolio
Corporate bonds                       ($ in thousands)  
Basic Materials —% —% 1.5% 4.1% 2.4% $213,904
 8.0% —% 0.6% 1.4% —% $19,517
 2.0%
Communications —% 0.5% 1.3% 6.6% —% 223,984
 8.4% —% 2.4% 4.0% —% 64,159
 6.4%
Consumer —% 0.4% 14.9% 8.9% 0.3% 657,717
 24.5% 0.2% 8.3% 19.6% —% 279,940
 28.1%
Energy —% 1.0% 3.8% 2.7% 2.1% 256,449
 9.6% 0.9% 6.1% 3.8% —% 107,369
 10.8%
Financial Institutions 1.4% 2.3% 22.1% 12.6% 0.2% 1,035,759
 38.6% 3.1% 30.1% 10.7% 0.6% 443,983
 44.5%
Industrials —% 0.8% 2.0% 2.9% 0.6% 170,030
 6.3% —% 1.8% 3.5% —% 53,279
 5.3%
Technology —% 2.2% 1.1% 0.6% 0.7% 124,497
 4.6% —% 1.7% 1.2% —% 28,609
 2.9%
Total Corporate bonds 1.4% 7.2% 46.7% 38.4% 6.3% $2,682,340
 100.0%
Total 4.2% 51.0% 44.2% 0.6% $996,856
 100.0%
(1)Ratings as assigned by S&P, or equivalent
The
At June 30, 2020, the Company’s ten largest corporate holdings, all52.8% of which are U.S. dollar denominated, 48.4% of which are in the Consumer Sector and 60.6%39.4% of which are in the Financial Institutions sector, at September 30, 2017 as carried at fair value and as a percentage of all fixed income securities were as follows:
September 30, 2017 Fair Value % of Holdings
Based on Fair
Value of All
Fixed Income
Securities		 
Rating(1)
  ($ in thousands)    
Australia and New Zealand Banking Group, 3.70% Due 11/16/2025 $26,505
 0.5% AA-
Morgan Stanley, 4.00% Due 7/23/2025 26,383
 0.5% BBB+
Schlumberger Holdings Corporation, 4.00% Due 12/21/2025 26,269
 0.5% AA-
JP Morgan Chase & Co, 3.90% Due 7/15/2025 21,078
 0.5% A-
Vale Overseas Ltd, 4.375% Due 1/11/2022 20,890
 0.4% BBB-
Gilead Sciences Inc, 3.65% Due 3/1/2026 20,889
 0.4% A
BNP Paribas, 5.00% Due 1/15/2021 20,732
 0.4% A
Brookfield Asset Management Inc, 4.00%, Due 1/15/2025 20,590
 0.4% A-
Rabobank Nederland Utrec, 3.875% Due 2/8/2022 20,261
 0.4% A+
AT&T Inc, 2.625% Due 12/1/2022 19,997
 0.4% BBB+
Total $223,594
 4.4%  
June 30, 2020 Fair Value % of Holdings 
Rating(1)
  ($ in thousands)    
UBS Group Funding (Jersey) Ltd, 2.65% Due 2/1/2022 $17,507
 1.2% A-
Electricite de France, 4.625%, Due 9/11/2024 17,120
 1.2% A-
Abbvie Inc., 3.80%, Due 3/15/2025 16,643
 1.1% BBB
Daimler Finance North America LLC, 3.30%, Due 5/19/2025 13,828
 1.0% BBB+
Brookfield Asset Management Inc., 4.00% Due 1/15/2025 13,213
 0.9% A-
Bayer US Finance LLC, 3.375% Due 10/8/2024 13,088
 0.9% BBB+
Anheuser-Busch INBEV NV, 2.875% Due 9/25/2024 12,363
 0.9% BBB+
Deutsche Bank AG, 1.25%, Due 9/8/2021 12,362
 0.9% BBB-
Nordea Bank ABP, 0.875% Due 6/26/2023 12,323
 0.9% A
Carlsberg Breweries A/S, 2.5%, Due 5/28/2024 12,114
 0.8% BBB
Total $140,561
 9.8%  
(1)Ratings as assigned by S&P, or equivalent

We ownAt June 30, 2020 and December 31, 2019, respectively, we hold the following securities notnon-U.S. dollar denominated in U.S. dollars:securities:
 September 30, 2017 December 31, 2016 June 30, 2020 December 31, 2019
($ in thousands) Fair Value % of Total Fair Value % of Total Fair Value % of Total Fair Value % of Total
Non-U.S. dollar denominated corporate bonds $427,985
 93.3% $345,646
 92.3% $263,486
 97.2% $310,323
 96.3%
Non-U.S. government and supranational bonds 30,624
 6.7% 28,980
 7.7% 7,565
 2.8% 11,999
 3.7%
Total non-U.S. dollar denominated AFS securities $458,609
 100.0% $374,626
 100.0%
Total non-U.S. dollar denominated securities $271,051
 100.0% $322,322
 100.0%
TheseAt June 30, 2020 and December 31, 2019, respectively, these non-U.S. securities are invested in the following currencies:
 September 30, 2017 December 31, 2016 June 30, 2020 December 31, 2019
($ in thousands) Fair Value % of Total Fair Value % of Total Fair Value % of Total Fair Value % of Total
Euro $391,865
 85.4% $315,768
 84.3% $241,132
 89.0% $272,493
 84.5%
British Pound 42,654
 9.3% 39,154
 10.5% 23,813
 8.8% 42,342
 13.1%
Australian Dollar 14,169
 3.1% 10,089
 2.7%
Canadian Dollar 5,272
 1.2% 3,360
 0.9% 4,754
 1.7% 5,364
 1.7%
All other 4,649
 1.0% 6,255
 1.6%
Total non-U.S. dollar denominated AFS securities $458,609
 100.0% $374,626
 100.0%
All other currencies 1,352
 0.5% 2,123
 0.7%
Total non-U.S. dollar denominated securities $271,051
 100.0% $322,322
 100.0%
The net increasedecrease in non-U.S. denominated fixed maturities is primarily due to purchases. We do not have any non-U.S. government and government related obligationsthe depreciation of Greece, Ireland, Italy, Portugal and Spain at SeptemberEuro denominated corporate bonds during the six months ended June 30, 20172020. At June 30, 2020 and December 31, 2016. At September 30, 2017 and December 31, 2016, 100.0%2019, all of the Company's non-U.S. government and supranational issuers were rated A+have a rating of A or higher by S&P.
For our non-U.S. dollar denominated corporate bonds, the following table summarizes the composition of the fair value of our fixed maturity investments at the dates indicated by ratings:
Ratings(1)
 September 30, 2017 December 31, 2016 June 30, 2020 December 31, 2019
($ in thousands) Fair Value % of Total Fair Value % of Total Fair Value % of Total Fair Value % of Total
AAA $37,396
 8.7% $31,704
 9.2% $1,169
 0.4% $481
 0.2%
AA+, AA, AA- 58,473
 13.7% 30,535
 8.8% 24,522
 9.4% 21,231
 6.8%
A+, A, A- 198,164
 46.3% 161,845
 46.8% 99,380
 37.7% 137,584
 44.3%
BBB+, BBB, BBB- 133,952
 31.3% 114,456
 33.1% 127,370
 48.3% 145,546
 46.9%
BB+ or lower —
 —% 7,106
 2.1% 11,045
 4.2% 5,481
 1.8%
Total non-U.S. dollar denominated corporate bonds $427,985
 100.0% $345,646
 100.0% $263,486
 100.0% $310,323
 100.0%
(1)Ratings as assigned by S&P, or equivalent

The Company does not employ any credit default protection against any of the fixed maturities held in non-U.S. denominated currencies.currencies at June 30, 2020 and December 31, 2019, respectively.
Other Balance Sheet Changes
The following table summarizes the Company's other material balance sheet changes of the Company at SeptemberJune 30, 20172020 and December 31, 2016:2019:
($ in thousands) September 30, 2017 December 31, 2016 Change Change % June 30, 2020 December 31, 2019 Change Change %
Reinsurance balances receivable, net $479,472
 $410,166
 $69,306
 16.9%
Deferred commission and other acquisition expenses $63,533
 $77,356
 $(13,823) (17.9)%
Funds withheld receivable 715,623
 684,441
 31,182
 4.6 %
Reserve for loss and LAE 3,365,011
 2,896,496
 468,515
 16.2% 2,071,222
 2,439,907
 (368,685) (15.1)%
Unearned premiums 1,601,069
 1,475,506
 125,563
 8.5% 182,121
 220,269
 (38,148) (17.3)%
Deferred gain on retroactive reinsurance 111,540
 112,950
 (1,410) (1.2)%
Liability for investments purchased 44,996
 —
 44,996
 NM
Accrued expenses and other liabilities 17,802
 32,444
 (14,642) (45.1)%
NM - not meaningful
The Company's deferred commission and other acquisition expenses decreased by 17.9% and unearned premiums decreased by 17.3% primarily due to the Partial Termination Amendment with AmTrust on a cut-off basis and the termination of the remaining business under both quota share contracts with AmTrust which are now in run-off with no new business written beginning January 1, 2019. Funds withheld receivable increased by 4.6% primarily due to insurance balances receivable that were converted into funds withheld to be utilized as collateral for the European Hospital Liability Quota Share.
Accrued expenses and other liabilities decreased by 45.1% as at June 30, 2020 compared to December 31, 2019 due to reductions in the reinsurance balances receivable, net,payable as a result of the aforementioned termination of both AmTrust reinsurance contracts effective January 1, 2019. The Company's reserve for loss and LAE and unearned premiums increased during the nine months ended September 30, 2017 versus December 31, 2016. The higher amount of reinsurance balances receivable, net as at September 30, 2017 was due to higher premiums written in the Diversified Reinsurance segment during 2017 and the balance relates to timing of premium settlement. The gross premiums written during the nine months ended September 30, 2017 was largely unchanged compared to the same period in 2016. The reserve for loss and LAE increased due to adverse development recognized during 2017 from both our operating segments as well as from our run-off business and the current year estimated losses from Hurricanes Harvey and Irma of $20.0 million. The higher unearned premium as at September 30, 2017 compared to prior year end wasdecreased by 15.1% primarily due to the earning patternrecent commutation of premiums written.workers' compensation reserves during 2019 in the AmTrust Reinsurance segment.

The liability for investments purchased increased by $45.0 million at June 30, 2020 compared to December 31, 2019 due to timing on investment trades primarily within the trust accounts used for collateral on the AmTrust Quota Share which were settled using restricted cash subsequent to June 30, 2020.
Capital Resources
Capital resources consist of funds deployed or available to be deployed in support of our operations. OurIn the six months ended June 30, 2020,our total capital resources decreasedincreased by $39.8$23.0 million, or 2.3%, at September 30, 20173.0% compared atto December 31, 2016. The Company’s management believes its current sources of liquidity are adequate2019 due to meet its cash requirements for the next 12 months.
Thenet income attributable to common shareholders partly offset by unrealized losses on our investment portfolio.The following table shows the movement in total capital resources at SeptemberJune 30, 20172020 and December 31, 2016:2019:
($ in thousands) September 30, 2017 December 31, 2016 Change Change % June 30, 2020 December 31, 2019 Change Change %
Preference shares $465,000
 $315,000
 $150,000
 47.6 % $465,000
 $465,000
 $—
 —%
Common shareholders' equity 956,027
 1,045,797
 (89,770) (8.6)% 65,739
 42,718
 23,021
 53.9%
Total Maiden shareholders' equity 1,421,027
 1,360,797
 60,230
 4.4 %
Total shareholders' equity 530,739
 507,718
 23,021
 4.5%
Senior Notes - principal amount 262,500
 362,500
 (100,000) (27.6)% 262,500
 262,500
 —
 —%
Total capital resources $1,683,527
 $1,723,297
 $(39,770) (2.3)% $793,239
 $770,218
 $23,021
 3.0%
The major factors contributing to the net decreaseincrease in capital resources were as follows:
Maiden shareholders'Shareholders' equity
Total Maiden shareholders' equity at SeptemberJune 30, 20172020 increased by $60.2$23.0 million, or 4.4%,4.5% compared to December 31, 2016 primarily2019 due to:to the following factors:
issuancenet income attributable to Maiden of new preference shares with net proceeds of $144.9$30.1 million after issuance cost of $5.1 million;for the six months ended June 30, 2020; and
net increase in share based transactions of $1.6 million; partly offset by
net decrease in AOCI of $31.1 million. This increase$8.6 million which arose due to: 1)(1) an increase in AOCInet unrealized losses on investment of $69.9$4.8 million which aroseresulting from the net increasedecrease in the fair value of our U.S. dollar denominated investment portfolio of $17.4 million relating to market price movements and an increase in our non-U.S. dollar denominated investment portfolio of $52.5 million, primarily due to widening credit spreads and unfavorable economic conditions during the strengthening of the eurosix months ended June 30, 2020; and British pound relative to the U.S. dollar during 2017; and offset by 2)(2) a decrease in cumulative translation adjustments of $38.8$3.8 million due to the effect of the appreciationrecent depreciation of the euro and British pound relative to the original currencies on our non-U.S. dollar net liabilities (excluding non-U.S. dollar denominated AFS fixed maturities); and
net increase resulting from share based transactions of $3.3 million.
These increases were offset by:
net loss attributable to Maiden of $44.9 million. See "Results of Operations - Net Income" on page 45 for a discussion of the Company’s net loss for the nine months ended September 30, 2017;
dividends declared of $59.3 million related to the Company’s common and preferred shares; and
shares repurchased of $14.9 million..
On February 21, 2017, the Company's Board of Directors approved the repurchase of up to $100.0 million of the Company's common shares from time to time at market prices. During the third quarter of 2017,six months ended June 30, 2020, the Company repurchased a total of 2,015,700did not repurchase

any common shares at an average price of $7.11 per share under its share repurchase authorization. At SeptemberJune 30, 2017,2020, the Company has a remaining authorization of $85.7$74.2 million for share repurchases.
Please refer to "Notes to Condensed Consolidated Financial Statements (unaudited) Note 11.13. Shareholders' Equity" included under Part III Item 18. "Financial Information" Statements and  Supplementary Data" of thisour Annual Report on Form 10-Q10-K for a discussion of the equity instruments issued by the Company as at SeptemberDecember 31, 2019.
On October 25, 2019, the Company transferred the listing of its common shares from the NASDAQ Global Select Market to the NASDAQ Capital Market. The NASDAQ Capital Market is a continuous trading market that operates in substantially the same manner as the NASDAQ Global Select Market and listed companies must meet certain financial requirements and comply with the NASDAQ Stock Market LLC’s (“NASDAQ”) corporate governance requirements. The Company’s common shares continue to trade under the symbol “MHLD”.
On April 17, 2020, the Company received a letter from NASDAQ stating that the Company had not regained compliance during the compliance period and that the Company’s securities would be delisted from the NASDAQ Capital Market by the opening of business on April 28, 2020 unless the Company requests an appeal of NASDAQ’s determination to a Hearings Panel. On April 24, 2020, the Company filed a Hearing Request Form to appeal NADSAQ’s determination with the Hearings Panel, which stayed the de-listing until a decision is rendered subsequent to the appeal hearing. On June 2, 2020, the Company issued a press release announcing it has regained compliance with NADSAQ’s mimimum bid price and all applicable listing requirements for continued listing, and the appeal hearing was canceled. Accordingly, the Company's common shares continue to be listed on the NASDAQ Capital Market.
Book value and diluted book value per common share at June 30, 20172020 and December 31, 2016.2019 were computed as follows:
  June 30, 2020 December 31, 2019
($ in thousands except share and per share data)    
Ending common shareholders’ equity $65,739
 $42,718
Numerator for diluted book value per common share calculation $65,739
 $42,718
     
Common shares outstanding 84,718,837
 83,148,458
Shares issued from assumed conversion of dilutive options and restricted shares 1,563,888
 1,818,797
Denominator for diluted book value per common share calculation 86,282,725
 84,967,255
     
Book value per common share $0.78
 $0.51
Diluted book value per common share 0.76
 0.50
At June 30, 2020, book value per common share increased by 52.9% and diluted book value per common share increased by 52.0%, compared to December 31, 2019. This was primarily due to our net income attributable to common shareholders of $30.1 million during the six months ended June 30, 2020, partly offset by the net decrease in AOCI of $8.6 million for the six months ended June 30, 2020.
Please see "Liquidity and Capital Resources - Investments" on page 53 for further information on the change in fair value of our fixed maturity investment portfolio.
Senior Notes
On June 27, 2017, we fully redeemed all of the 2012 Senior Notes using a portion of the proceeds from the Preference Shares - Series D issuance. The 2012 Senior NotesThere were redeemed at a redemption price equal to 100% of the principal amount of $100.0 million plus accrued and unpaid interest on the principal amount being redeemed up to, but not including, the redemption date. As a result, the Company accelerated the amortization of the remaining 2012 Senior Note issuance cost of $2.8 million (see related discussion in "Note 6. Long-Term Debt" and "Note 11. Shareholders' Equity" of the Notes to Condensed Consolidated Financial Statements (unaudited) included under Part I Item 1 "Financial Information" of this Form 10-Q).
Except as discussed above, there were no further changes in the Company’s Senior Notes at SeptemberJune 30, 20172020 compared to December 31, 20162019 and the Company did not enter into any short-term borrowing arrangements during the ninesix months ended SeptemberJune 30, 2017. Refer2020. Please refer to "Notes to Condensed Consolidated Financial Statements (unaudited) Note 7. Long Term Debt" included in the Company’s Annual Report onunder Part I Item 1 "Financial Information" of this Form 10-K for the year ended December 31, 201610-Q for a discussion of the Company’s Senior Notes.
We have,The ratio of Debt to Total Capital Resources at June 30, 2020 and expect to continue, to fund a portion of our capital requirements through issuances of senior securities, including secured, unsecured and convertible debt securities, or issuances of common or preference shares. For flexibility, we have a current universal shelf registration statement that allows for the public offering and sale of our debt securities, common shares, preference shares and warrants to purchase such securities. The issuance of debt or equity securities will depend on future market conditions, funding needs and other factors and there can be no assurance that any such issuance will occur or be successful.December 31, 2019 was computed as follows:

  June 30, 2020 December 31, 2019
($ in thousands)    
Senior notes - principal amount $262,500
 $262,500
Maiden shareholders’ equity 530,739
 507,718
Total capital resources $793,239
 $770,218
Ratio of debt to total capital resources 33.1% 34.1%
Financial Strength Ratings
Our principal operating subsidiaries' ratings were affirmed as "BBB+" (Good)The Company does not have a financial strength rating from any nationally recognized statistical rating organization.


Non-GAAP Measures
As defined and described in Key Financial Measures on June 6, 2017page 40, management uses certain key financial measures, some of which are non-GAAP measures, to evaluate the Company's financial performance and the outlook was changed from stableoverall growth in value generated for the Company’s common shareholders. Management believes that these measures, which may be defined differently by other companies, explain the Company’s results to negative by Standard & Poor's ("S&P"). The rating is the eighth highest of twenty-two rating levels. The Company's principal operating subsidiaries are rated A (Excellent) withinvestors in a stable outlook by A.M. Best Company ("A.M. Best") and has remained unchanged throughout the reporting period. The rating of A (Excellent) is the third highest of sixteen rating levels, as previously disclosed in the "Financial Strength Ratings"manner that allows for a more complete understanding of the Company's Annual Report on Form 10-K for the year ended December 31, 2016.
Aggregate Contractual Obligations
In the normal course of its business, the Company is a party to a variety of contractual obligations as summarizedunderlying trends in the Company’s Annual Report on Form 10-Kbusiness. The calculation, reconciliation to nearest GAAP measure and discussion of relevant non-GAAP measures used by management are as follows:
Non-GAAPoperating earnings were $1.2 million for the yearthree months ended June 30, 2020, compared to a non-GAAP operating loss of $21.3 million for the same period in 2019. The Company's non-GAAP operating results included an underwriting loss of $0.0 million for the three months ended June 30, 2020, compared to an underwriting loss of $39.1 million for the same period in 2019, which was primarily the result of underwriting results not covered by the LPT/ADC Agreement, specifically the run-off of the AmTrust Quota Share with losses occurring after December 31, 2016. These contractual obligations are considered2018 (including the additional ceding commission paid under the Partial Termination Amendment) as well as claims related to the European Hospital Liability Quota Share.
Non-GAAPoperating earnings were $4.4 million for the six months ended June 30, 2020, compared to a non-GAAP operating loss of $48.9 million for the same period in 2019. The Company's non-GAAP operating results included an underwriting loss of $3.7 million for the six months ended June 30, 2020, compared to an underwriting loss of $81.8 million for the same period in 2019, which was primarily the result of underwriting results not covered by the Company when assessing its liquidity requirementsLPT/ADC Agreement, specifically the run-off of the AmTrust Quota Share with losses occurring after December 31, 2018 (including the additional ceding commission paid under the Partial Termination Amendment) as well as claims related to the European Hospital Liability Quota Share.



Non-GAAP operating earnings (loss) and Non-GAAP diluted operating earnings (loss) per share attributable to common shareholders
Non-GAAPoperating earnings (loss) and non-GAAP diluted operating earnings (loss) per share attributable to common shareholders can be reconciled to the nearest U.S. GAAP financial measure as follows:
For the Three Months Ended June 30, 2020 2019
  ($ in thousands except per share data)
Net income (loss) $9,212
 $(15,413)
Add (subtract):    
Net realized gains on investment (8,875) (24,086)
Foreign exchange and other losses (gains) 2,295
 (1,207)
Change in unamortized deferred gain on retroactive reinsurance (1,410) —
Loss from discontinued operations, net of income tax —
 19,389
Income from NGHC Quota Share run-off —
 (24)
Non-GAAP operating earnings (loss) $1,222
 $(21,341)
     
Diluted earnings (loss) per share attributable to common shareholders $0.11
 $(0.19)
Add (subtract):    
Net realized gains on investment (0.11) (0.29)
Foreign exchange and other losses (gains) 0.03
 (0.01)
Change in unamortized deferred gain on retroactive reinsurance (0.02) —
 Loss from discontinued operations, net of income tax —
 0.23
Non-GAAP diluted operating earnings (loss) per share attributable to common shareholders
 $0.01
 $(0.26)
     
For the Six Months Ended June 30, 2020 2019
  ($ in thousands except per share data)
Net income (loss) $30,073
 $(52,049)
Add (subtract):    
Net realized gains on investment (19,913) (12,985)
Total other-than-temporary impairment losses 1,506
 —
Foreign exchange and other gains (5,902) (6,186)
   Loss from NGHC Quota Share run-off —
 204
Change in unamortized deferred gain on retroactive reinsurance (1,410) —
Loss from discontinued operations, net of income tax —
 22,123
Non-GAAP operating earnings (loss) $4,354
 $(48,893)
     
Diluted earnings (loss) per share attributable to common shareholders $0.35
 $(0.63)
Add (subtract):    
Net realized gains on investment (0.24) (0.16)
Total other-than-temporary impairment losses 0.02
 —
Foreign exchange and other gains (0.07) (0.07)
Change in unamortized deferred gain on retroactive reinsurance (0.01) —
Loss from discontinued operations, net of income tax —
 0.27
Non-GAAP diluted operating earnings (loss) per share attributable to common shareholders
 $0.05
 $(0.59)

Non-GAAP Operating ROACE
The improvement in Non-GAAP Operating ROACE for the three and six months ended June 30, 2020 relative to the same periods in 2019 reflects the reflective improvement in non-GAAP operating earnings and was computed as follows:
  For the Three Months Ended June 30, For the Six Months Ended June 30,
($ in thousands) 2020 2019 2020 2019
Non-GAAP operating earnings (loss) $1,222
 $(21,341) $4,354
 $(48,893)
Opening common shareholders’ equity 19,998
 119,289
 42,718
 89,275
Ending common shareholders’ equity 65,739
 125,572
 65,739
 125,572
Average common shareholders’ equity 42,869
 122,431
 54,229
 107,424
Non-GAAP Operating ROACE 11.5% (69.9)% 16.1% (91.8)%
Non-GAAP Underwriting Results and Combined Ratio
The following summarizes our non-GAAP underwriting results for the three and six months ended June 30, 2020 and 2019:
  For the Three Months Ended June 30, For the Six Months Ended June 30,
($ in thousands) 2020 2019 2020 2019
Gross premiums written $4,982
 $2,117
 $16,716
 $(559,022)
Net premiums written $4,090
 $(409) $14,462
 $(561,939)
Net premiums earned $21,308
 $133,986
 $52,523
 $317,088
Other insurance revenue 250
 754
 658
 1,566
Non-GAAP net loss and LAE(1)
 (12,418) (121,561) (33,504) (274,250)
Commission and other acquisition expenses (8,154) (49,656) (20,127) (119,273)
General and administrative expenses (2,413) (2,654) (4,670) (6,951)
Non-GAAP underwriting loss(1)
 $(1,427) $(39,131) $(5,120) $(81,820)
         
Ratios:        
Non-GAAP net loss and LAE ratio(1)
 57.6% 90.2% 63.0% 86.1%
Commission and other acquisition expense ratio 37.8% 36.9% 37.8% 37.4%
General and administrative expense ratio 43.0% 9.0% 33.5% 9.0%
Expense ratio 80.8% 45.9% 71.3% 46.4%
Non-GAAP combined ratio(1)
 138.4% 136.1% 134.3% 132.5%
(1) Non-GAAP underwriting loss, non-GAAP net loss and LAE, non-GAAP net loss and LAE ratio, and non-GAAP combined ratio for the three and six months ended June 30, 2020 include the impact of favorable prior year reserve development subject to the LPT/ADC Agreement. See "Key Financial Measures" on page 40 for definitions of Non-GAAP underwriting loss, net loss and LAE, non-GAAP net loss and LAE ratio, and non-GAAP combined ratio.
The non-GAAP underwriting results as well as the non-GAAP loss and LAE and ratios and non-GAAP combined ratios reflect the recognition into income of the decrease in the estimated deferred gain arising from the LPT/ADC Agreement relating to losses subject to the AmTrust Quota Share agreement which are fully recoverable from Cavello to show the ultimate economic benefit to Maiden.
As shown in the table below, adjusted for the recognition into income of the decrease in unamortized deferred gain on retroactive reinsurance of $1.4 million during the three and six months ended June 30, 2020, the non-GAAP underwriting loss was $1.4 million and $5.1 million, respectively, compared to $39.1 million and $81.8 million for the same respective periods in 2019. The non-GAAP combined ratio during the three and six months ended June 30, 2020 was 138.4% and 134.3%, respectively, compared to 136.1% and 132.5% during the same respective periods in 2019.
  For the Three Months Ended June 30, For the Six Months Ended June 30,
  2020 2019 2020 2019
Combined ratio 131.8 % 136.1% 131.7 % 132.5%
Less: change in unamortized deferred gain on retroactive reinsurance (6.6)% —% (2.6)% —%
Non-GAAP combined ratio 138.4 % 136.1% 134.3 % 132.5%

Non-GAAP Net Loss and LAE
As noted previously, the recognition of the decrease in the unamortized deferred gain on retroactive reinsurance of $1.4 million increased net loss and LAE for the three and six months ended June 30, 2020 by $1.4 million in the calculation of non-GAAP Loss and LAE as shown in the table below:
  For the Three Months Ended June 30, For the Six Months Ended June 30,
($ in thousands) 2020 2019 2020 2019
Net loss and LAE $11,008
 $121,561
 $32,094
 $274,250
Less: change in unamortized deferred gain on retroactive reinsurance (1,410) —
 (1,410) —
Non-GAAP net loss and LAE $12,418
 $121,561
 $33,504
 $274,250
Adjusted for the recognition into income of the decrease in the deferred gain on retroactive reinsurance of $1.4 million during the three and six months ended June 30, 2020, non-GAAP net loss and LAE was $12.4 million and $33.5 million, respectively, compared to net loss and LAE of $121.6 million and $274.3 million incurred for the same respective periods in 2019, and the Company is confidentnon-GAAP net loss and LAE ratio was 57.6% and 63.0%, respectively, compared to net loss ratios of 90.2% and 86.1% for the same respective periods in its ability2019.
Adjusted Shareholders' Equity, Adjusted Total Capital Resources, Adjusted Book Value per Common Share, and Ratio of Debt to meet allTotal Adjusted Capital Resources
The Adjusted Shareholders' Equity, Adjusted Total Capital Resources and Adjusted Book Value per Common Share at June 30, 2020 and December 31, 2019 reflect the addition of its obligations. Exceptthe unamortized deferred gain on retroactive reinsurance to the GAAP shareholders' equity as previously noteddepicted in the Senior Notes section above,computations below.
The estimated deferred gain of $111.5 million at SeptemberJune 30, 2017, there2020 and $113.0 million at December 31, 2019 arises from the LPT/ADC Agreement with Cavello relating to losses subject to that agreement which are no further material changesfully recoverable from Cavello. The inclusion of the unamortized deferred gain in these metrics better reflects the ultimate economic benefit of the LPT/ADC Agreement, which will improve Maiden's shareholders' equity over the settlement period under the terms of the agreement.
Reconciliation of shareholders' equity to Adjusted shareholders' equity and Adjusted Total Capital Resources
The following table computes adjusted shareholders' equity and adjusted total capital resources by recognizing the unamortized deferred gain on retroactive reinsurance at June 30, 2020 and December 31, 2019:
($ in thousands) June 30, 2020 December 31, 2019 Change Change %
Preference shares $465,000
 $465,000
 $—
 — %
Common shareholders' equity 65,739
 42,718
 23,021
 53.9 %
Total shareholders' equity 530,739
 507,718
 23,021
 4.5 %
Unamortized deferred gain on retroactive reinsurance 111,540
 112,950
 (1,410) (1.2)%
Adjusted shareholders' equity 642,279
 620,668
 21,611
 3.5 %
Senior Notes - principal amount 262,500
 262,500
 —
 — %
Adjusted total capital resources $904,779
 $883,168
 $21,611
 2.4 %
Reconciliation of Book Value per Common Share to Adjusted Book Value per Common Share
The adjusted book value per common share as reconciled for the recognition of the unamortized deferred gain on retroactive reinsurance at June 30, 2020 and December 31, 2019 was computed as follows:
  June 30, 2020 December 31, 2019
Book value per common share $0.78
 $0.51
Unamortized deferred gain on retroactive reinsurance 1.31
 1.36
Adjusted book value per common share $2.09
 $1.87

Ratio of Debt to Adjusted Total Capital Resources 
Management uses this non-GAAP measure to monitor the financial leverage of the Company. This measure is calculated using the total principal amount of debt divided by the sum of adjusted total capital resources as computed in the Company’s contractual obligations as disclosed in the Company’s table above. The ratio of contractual obligations included in the Company’s Annual Report on Form 10-K for the year endedDebt to Adjusted Total Capital Resources at June 30, 2020 and December 31, 2016.2019 was computed as follows:
($ in thousands) June 30, 2020 December 31, 2019
Senior notes - principal amount $262,500
 $262,500
Adjusted shareholders’ equity 642,279
 620,668
Adjusted total capital resources $904,779
 $883,168
Ratio of debt to adjusted total capital resources 29.0% 29.7%
Currency and Foreign Exchange
We conduct business in a variety of foreign (non-U.S.) currencies, the principal exposures being the euro and the British pound, the Australian dollar, the Canadian dollar and the Swedish krona.pound. Assets and liabilities denominated in foreign currencies are exposed to changes in currency exchange rates. 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. Our principal exposure to foreign currency risk is our obligation to settle claims in foreign currencies. In addition, in order to minimize this risk, we maintain and expect to continue to maintain a portion of our investment portfolio in investments denominated in currencies other than the U.S. dollar. We may employ various strategies (including hedging) 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 adversely effected.affected. At SeptemberJune 30, 2017,2020, no such hedges or hedging strategies were in force or had been entered into. We measure monetary assets and liabilities denominated in foreign currencies at period end exchange rates, with the resulting foreign exchange gains and losses recognized in the unaudited Condensed Consolidated Statements of Income. Revenues and expenses in foreign currencies are converted at average exchange rates during the period. The effect of the translation adjustments for foreign operations is included in AOCI.
Net foreign exchange losses amounted to $3.6of $2.1 million and $12.2 million during the three and nine months ended September 30, 2017, respectively, compared to net foreign exchange gains of $0.7$6.3 million were generated during the three and six months ended June 30, 2020, respectively, compared to foreign exchange gains of $1.2 million and $6.5$1.9 million for the same periods in 2016,three and six months ended June 30, 2019, respectively.
Effects of Inflation
The anticipated effects of inflation are considered explicitly in the pricing of the insured exposures, which are used as the initial estimates of reserves for loss and LAE. In addition, inflation is also implicitly accounted for in subsequent estimates of loss and LAE reserves, as the expected rate of emergence is in part predicated upon the historical levels of inflation that impact ultimate claim costs. To the extent inflation causes these costs, particularly medical treatments and litigation costs, to vary from the assumptions made in the pricing or reserving estimates, the Company will be required to change the reserve for loss and LAE with a corresponding change in its earnings in the period in which the variance 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
At SeptemberJune 30, 2017,2020, we did not have any off-balance sheet arrangements as defined by Item 303(a) (4) of Regulation S-K.
Recent Accounting Pronouncements
See "Part I, Item 1 - Notes to Condensed Consolidated Financial Statements (unaudited) Note 2. Significant Accounting Policies" 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 three types of market risk: changes in interest rates, changes in credit quality of issuers of investment securities and reinsurers and changes in foreign exchange rates.
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 September 30, 2017, we had AFS fixed maturity securities with a fair value of $3.9 billion that are subject to interest rate risk.
The table below summarizes the interest rate risk associated with our fixed maturity securities by illustrating the sensitivity of the fair value and carrying value of our fixed maturity securities at September 30, 2017 to selected hypothetical changes in interest rates, and the associated impact on our shareholders’ equity. Temporary changes in the fair value of our fixed maturity securities that are held as AFS do impact the carrying value of these securities and are reported in our shareholders’ equity as a component of AOCI. The selected scenarios in the table below are not predictions of future events, but rather are intended to illustrate the effect such events may have on the fair value of our AFS fixed maturity securities and on our shareholders’ equity at September 30, 2017:
Hypothetical Change in Interest Rates Fair Value Estimated Change in Fair Value Hypothetical % (Decrease) Increase in Shareholders’ Equity
  ($ in thousands)  
200 basis point increase $3,555,940
 $(328,647) (23.1)%
100 basis point increase 3,714,624
 (169,963) (12.0)%
No change 3,884,587
 —
 — %
100 basis point decrease 4,068,897
 184,310
 13.0 %
200 basis point decrease 4,267,740
 383,153
 27.0 %
The interest rate sensitivity on the $168.0 million loan to related party which carries an interest rate of one month LIBOR plus 90 basis points, with an increase of 100 and 200 basis points in LIBOR would increase our earnings and cash flows by $1.7 million and $3.4 million, respectively, on an annual basis, but would not affect the carrying value of the loan.
Counterparty Credit Risk
The concentrations of the Company’s counterparty credit risk exposures have not changed materially compared to December 31, 2016.
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. The table below summarizes the credit ratings by major rating category of the Company's fixed maturity investments at September 30, 2017 and December 31, 2016:
  September 30, 2017 December 31, 2016
Ratings(1)
  
AA+ or better 44.5% 41.3%
AA, AA-, A+, A, A- 32.2% 33.2%
BBB+, BBB, BBB- 22.2% 22.0%
BB+ or lower 1.1% 3.5%
  100.0% 100.0%
(1)Ratings as assigned by S&P, or equivalent
The Company believes this high quality concentration reduces its exposure to credit risk on fixed income investments to an acceptable level. At September 30, 2017, the Company is not exposed to any significant credit concentration risk on its investments, excluding securities issued by the U.S. government and agencies which are rated AA+ (see "Liquidity and Capital Resources - Investments" on page 58), with the largest corporate issuer and the top 10 corporate issuers accounting for only 0.5% and 4.4% 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 Company has exposure to credit risk, as it relates to its business written through brokers if any, if the Company’s brokers are 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 Item 1 and 1A of Part I of the Annual Report on Form 10-K filed with the SEC on March 6, 2017 for detailed information on three brokers that accounted for approximately 34.6% of the Company’s gross premiums written in our Diversified Reinsurance segment for the year ended December 31, 2016.
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 September 30, 2017 were $479.5 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 September 30, 2017.
The Company 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 $140.6 million at September 30, 2017 compared to $99.9 million at December 31, 2016. At September 30, 2017, $62.8 million or 44.7% of the total reinsurance recoverable is receivable from one reinsurer which has a credit rating of A+ (December 31, 2016 - $54.8 million or 54.8% and with credit rating of A+). Furthermore, at September 30, 2017, $46.1 million or 32.8% (December 31, 2016 - $23.8 million or 23.8%) of these reinsurance recoverables relate to reinsurance claims from Superstorm Sandy. The table below summarizes the A.M. Best credit ratings of the Company's reinsurance counterparties at September 30, 2017 and December 31, 2016:
  September 30, 2017 December 31, 2016
A or better 98.7% 97.2%
B++ or worse 1.3% 2.8%
  100.0% 100.0%
Foreign Currency Risk
The Company is generally able to match foreign currency denominated assets 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. For the nine months ended September 30, 2017 and as at September 30, 2017, 7.4% of our net premiums written and 9.8% of our reserve for loss and LAE were transacted in euro, respectively.
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 September 30, 2017, no hedging instruments have been entered into. Our principal foreign currency exposure is to the euro and British pound, however, assuming all other variables remain constant and disregarding any tax effects, a strengthening (weakening) of 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 decrease (increase) in the Company's net assets of $1.2 million and $2.4 million, respectively.

Item 4. Controls and Procedures
 Our management, with the participation and under the supervision of our ChiefCo-Chief Executive OfficerOfficers and Chief Financial Officer, have 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”)). Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by SEC rules and forms and that such information is accumulated and communicated to management, including our ChiefCo-Chief Executive OfficerOfficers and Chief Financial Officer, to allow for timely decisions regarding required disclosures. Our ChiefCo-Chief Executive OfficerOfficers and Chief Financial Officer have concluded that, as of the end of the period covered by this report, such disclosure controls and procedures were effective. Our management, including our ChiefCo-Chief Executive OfficerOfficers and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide an absolute assurance that all control issues and instances of fraud, if any, within our Company have been detected.
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
See "Part I, Item 1 - Notes to Condensed Consolidated Financial Statements (unaudited) Note 9.11. Commitments and Contingencies" for an update on legal matters. Except as disclosed above, there are no material changes from the legal proceedings previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2016.2019.
Item 1A. Risk Factors
Our business is subject to a number of risks, including those identified in Item 1A. of Part I of our Annual Report on Form 10-K for the year ended December 31, 2016,2019, that could have a material adverse effect on our business, results of operations, financial condition and/or liquidity and that could cause our operating results to vary significantly from period to period. The risks described in our 20162019 Form 10-K are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also could have a material adverse effect on our business, results of operations, financial condition and/or liquidity.
ThereCircumstances caused by the COVID-19 pandemic are no material changes fromcomplex, uncertain and rapidly evolving. We therefore may not be able to accurately predict the risk factors previously disclosedlonger-term effects that the COVID-19 pandemic may have on our financial condition or results of operations. To the extent the COVID-19 pandemic adversely affects our financial condition or results of operations, it may also have the effect of heightening additional risks described in Part I, Item 1A, Risk Factors, of our Annual Report on Form 10-K for the year ended December 31, 2016.2019.
The impact of COVID-19 and related risks has adversely affected, and is expected to continue to adversely affect, our business, results of operations, financial condition, and liquidity and capital resources, and any future impact on our business is difficult to predict at this time.
The continuing COVID-19 global pandemic has caused significant disruption to the economy and financial markets globally, and the full extent of the potential impacts of COVID-19 are not yet known. Circumstances caused by the COVID-19 pandemic are complex, uncertain and rapidly evolving. Our results of operations, financial condition, and liquidity and capital resources have been adversely impacted by the COVID-19 pandemic, and the future impact of the pandemic on our financial condition or results of operations is difficult to predict. In particular, we believe we are subject to the following risks related to the COVID-19 pandemic:
Investments. Due in large part to the uncertainty caused by the COVID-19 pandemic in global financial markets, our investment portfolio has experienced increased volatility, heightened credit risk, and declines in yields on our fixed income investments. Our investment portfolios may continue to be adversely impacted by unfavorable market conditions caused by the COVID-19 pandemic, which could cause continued volatility in our results of operations and negatively impact our financial condition.
Debt and Equity Financing. As a result of the economic conditions caused by the COVID-19 pandemic, capital and credit markets continue to experience volatility that could negatively impact our ability to raise additional capital through the debt or equity markets or through bank or other debt financing. If we are unable to obtain adequate capital on suitably attractive terms, or at all, we may be unable to implement our future operating plans and our business, financial condition, and results of operations could be materially adversely affected.
Liquidity. Due to the change in fair value of our investments caused by the COVID-19 pandemic, we and our reinsurance subsidiaries may need additional capital to maintain compliance with regulatory capital requirements and/or be required to post additional collateral under existing reinsurance arrangements, which could reduce our liquidity. In addition, we may experience continued volatility in our results of operations which could negatively impact our financial condition and create a reduction in the amount of available distribution or dividend capacity from our regulated reinsurance subsidiaries, which would also reduce liquidity.
Operational Disruptions. We rely on the continued productivity of our senior executive team, our employees, and agents, brokers, third party administrators, suppliers and outsourcing providers to carry out our operations. If any of these people are unable to continue to work productively, or at all, due to illness, government restrictions, remote working conditions, or other disruptions related to the COVID-19 pandemic, our ability to conduct our operations may be adversely affected. In addition, like many other companies, the vast majority of our employees are working remotely, and we are therefore more dependent on our information technology systems and the continued access by our employees and service providers to reliable internet and telecommunications systems. We will be adversely affected if these systems do not function effectively or are disrupted due to heightened demand, cybersecurity attacks and data security incidents, or for any other related reason. These types of operational disruptions that impact our people and/or systems and others we may not foresee, would negatively impact our ability to settle claims efficiently, complete acquisitions, integrate our acquired businesses, manage our investments, provide or submit timely filing requirements with the SEC and other regulators or otherwise conduct our business.
Claims. As described herein, the Company is not engaged in active reinsurance underwriting currently and is running off the remaining unearned exposures it has reinsured. Our IIS unit does write limited primary insurance coverages that could be exposed to COVID-19 claims.  While we assess our exposure to COVID-19 insurance and reinsurance claims on our existing insurance exposures and remaining reinsurance exposures as limited and immaterial, given the uncertainty surrounding the COVID-19 pandemic and its impact on the insurance industry, our preliminary estimates of losses and loss adjustment expenses and estimates of reinsurance recoverable arising from the COVID-19 pandemic may materially change. Unanticipated issues relating to claims and coverage may emerge, which could adversely affect our business by increasing the scope of coverage beyond our intent and/or increasing the frequency and severity of claims.

Item 2. Unregistered Sales of Equity and Use of Proceeds
Items 2. (a) and (b) are not applicable.
2. (c) Share Repurchases
On February 21, 2017, the Company's Board of Directors approved the repurchase of up to $100.0 million of the Company's common shares from time to time at market prices. The table below details theCompany has a remaining authorization of $74,245 for share repurchases thatat June 30, 2020. There were madeno share repurchases during the three months ended SeptemberJune 30, 2017,2020 under the share repurchase authorization:authorization.

For the Three Months Ended September 30, 2017 Total number of shares repurchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs (a) Dollar amount still available under trading plan
        ($ in thousands)
July 1, 2017 - July 31, 2017 —
 $—
 —
 $100,000
August 1, 2017 - August 31, 2017 1,380,000
 $7.31
 1,380,000
 $89,914
September 1, 2017 - September 30, 2017 635,700
 $6.69
 635,700
 $85,662
Total 2,015,700
 $7.11
 2,015,700
 $85,662
For the Three Months Ended June 30, 2020 Total number of shares repurchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs (a) Dollar amount still available under trading plan
        ($ in thousands)
April 1, 2020 - April 30, 2020 —
 $—
 —
 $74,245
May 1, 2020 - May 31, 2020 834
 1.13
 —
 74,245
June 1, 2020 - June 30, 2020 —
 —
 —
 74,245
Total 834
 $1.13
 —
 74,245

Subsequent to the three months ended SeptemberJune 30, 20172020 and through the period ended November 9, 2017,August 14, 2020, the Company did not repurchase any additional common shares which represent withholdings in respect of tax obligations on the vesting of performance based shares.

Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.

Item 5. Other Information
Executive Ownership and Sales
From time to time, some of the Company’s directors and executives may determine that it is advisable to diversify their investments for personal financial planning reasons, or may seek liquidity for other reasons, and may sell common shares of the Company in the open market, in private transactions or to the Company. To effect such sales, some of the Company’s directors and executives have previously entered into, and may in the future enter into, trading plans designed to comply with the Company’s Insider Trading and Outside Investments Policy and the provisions of Rule 10b5-1 under the Securities Exchange Act of 1934. The trading plans will not reduce any of the executives’ ownership of the Company’s shares below the applicable executive stock ownership guidelines. The Company does not undertake any obligation to report Rule 10b5-1 plans that may be adopted by any employee or director of the Company in the future, or to report any modifications or termination of any publicly announced plan.




Item 6. Exhibits.
Exhibit
No.
 Description
31.1 
Section 302 Certification of CEO
31.2 
Section 302 Certification of CFO
32.1 
Section 906 Certification of CEO
32.2 
Section 906 Certification of CFO
101.1 The following materials from Maiden Holdings, Ltd. Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, formatted in XBRL (eXtensiveiXBRL (Inline eXtensive Business Reporting Language): (i) the unaudited Condensed Consolidated 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 unaudited Condensed Consolidated Financial Statements.


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.
 By: 
November 9, 2017August 14, 2020 /s/ Arturo M. RaschbaumLawrence F. Metz
  
Arturo M. RaschbaumLawrence F. Metz
President and ChiefCo-Chief Executive Officer
   
  /s/ Karen L. SchmittPatrick J. Haveron
  
Karen L. SchmittPatrick J. Haveron
Co-Chief Executive Officer and Chief Financial Officer
   
/s/ Michael J. Tait
Michael J. Tait
Chief Accounting Officer




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