10-Q 1 v157927_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2009

¨ 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. 001-33143

Maiden Holdings, Ltd.

(Exact name of registrant as specified in its charter)

Bermuda (State or other jurisdiction of incorporation or organization)	04-3106389 (IRS Employer Identification No.)

48 Par-la-Ville Road, Suite 1141 HM11 (Address of principal executive offices)	HM11 (Zip Code)

(441) 292-7090 (Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

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

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

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

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

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

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

INDEX

		Page

PART I	FINANCIAL INFORMATION

Item 1.	Financial Statements:

	Condensed Consolidated Balance Sheets as of June 30, 2009 (unaudited) and December 31, 2008	3

	Condensed Consolidated Statement of Income for the three months ended June 30, 2009 and 2008 (unaudited) and the six months ended June 30, 2009 and 2008 (unaudited)	4

	Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2009 and 2008 (unaudited)	5

	Condensed Consolidated Statement of Changes in Shareholders’ Equity for the three months ended June 30, 2009 and 2008 (unaudited) and the six months ended June 30, 2009 and 2008 (unaudited)	6

	Notes to Unaudited Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33

Item 4.	Controls and Procedures	33

PART II	OTHER INFORMATION	34

Item 1.	Legal Proceedings	34

Item 1A	Risk Factors	34

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34

Item 4.	Submission of Matters to a Vote of Security Holders	34

Item 6.	Exhibits	36

	Signatures	37

PART 1 - FINANCIAL INFORMATION

Item 1. Financial Statements

MAIDEN HOLDINGS, LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

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

	(unaudited)
	June 30, 2009			December 31, 2008
Assets
Fixed maturities, available-for-sale, at fair value (Amortized cost 2009: $1,307,221; 2008: $1,163,926)	$	1,294,934		$	1,119,955
Other investments, at fair value (Cost 2009: $5,814 ; 2008: $5,819)		5,392			5,291
Total investments		1,300,326			1,125,246
Cash and cash equivalents		150,777			131,897
Restricted cash and cash equivalents		311,883			409,277
Accrued investment income		10,601			10,293
Reinsurance balances receivable (includes $39,599 and $48,837 from related party in 2009 and 2008, respectively - see note 10)		230,519			71,895
Loan to related party (see note 10)		167,975			167,975
Deferred acquisition costs (includes $77,518 and $80,455 from related party in 2009 and 2008, respectively - see note 10)		171,395			104,470
Other assets		32,474			2,617
Intangible assets		51,434			55,147
Goodwill		49,747			49,747
Total Assets	$	2,477,131		$	2,128,564
Liabilities and Shareholders’ Equity
Liabilities
Reserve for losses and loss expenses (includes $157,349 and $69,646 from related party in 2009 and 2008, respectively- see note 10)	$	939,758		$	897,656
Unearned premiums (includes $237,698 and $245,742 from related parties in 2009 and 2008, respectively- see note 10)		585,451			444,479
Accrued expenses and other liabilities		22,630			44,024
Securities sold under agreements to repurchase, at contract value		108,797			232,646
Trust preferred securities – related parties (see note 6)		215,096			-
Total Liabilities		1,871,732			1,618,805
Commitments and Contingencies
Shareholders’ Equity:
Common shares, ($0.01 par value;71,250,000 and 59,550,000 shares issued in 2009 and 2008 respectively; 70,287,664 and 58,587,664 shares outstanding in 2009 and 2008 respectively)		713			596
Additional paid-in capital		575,723			530,519
Accumulated other comprehensive loss		(15,097	)		(44,499	)
Retained earnings		47,861			26,944
Treasury Shares, at cost (2009 and 2008:962,336 shares)		(3,801	)		(3,801	)
Total Shareholders’ Equity		605,399			509,759
Total Liabilities and Shareholders’ Equity	$	2,477,131		$	2,128,564

See accompanying notes to the unaudited condensed consolidated financial statements.

MAIDEN HOLDINGS, LTD.

CONDENSED CONSOLIDATED STATEMENT OF INCOME

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

(Unaudited)

	For the Three Months Ended June 30, 2009			For the Three Months Ended June 30, 2008			For the Six Months Ended June 30, 2009			For the Six Months Ended June 30, 2008
Revenues:
Premium income:
Net premiums written	$	238,356		$	171,251		$	574,905		$	273,683
Change in unearned premiums		(14,515	)		(93,913	)		(140,971	)		(131,040	)
Net earned premium		223,841			77,338			433,933			142,643
Net investment income		15,113			7,763			29,372			15,372
Net realized investment gains (losses)		1,534			39			(396	)		163
Total revenues		240,488			85,140			462,909			158,178
Expenses:
Loss and loss adjustment expenses		151,057			43,610			297,345			81,446
Commission and other acquisition expenses		57,664			25,498			104,295			46,758
Other operating expenses		7,133			2,236			14,667			3,662
Trust preferred interest – related party		9,112			-			16,202			-
Amortization of intangible assets		1,675			-			3,239			-
Foreign exchange (gain) loss		(2,404	)		4			(2,191	)		4
Total expenses		224,237			71,348			433,557			131,870

Net income	$	16,251		$	13,792			29,352		$	26,308

Basic earnings per common share	$	0.23		$	0.23			0.43		$	0.44
Diluted earnings per common share		0.23			0.23			0.42			0.44
Dividends declared per common share	$	0.06		$	0.05			0.12		$	0.10

See accompanying notes to the unaudited condensed consolidated financial statements.

MAIDEN HOLDINGS, LTD.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

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

(Unaudited)

	For the Six Months Ended June 30, 2009			For the Six Months Ended June 30, 2008
Cash flows from operating activities:
Net income	$	29,352		$	26,308
Adjustments to reconcile net income to net cash provided by operating activities :
Depreciation and amortization of intangibles		3,502			11
Net realized loss (gain) on sales of investments		396			(163	)
Foreign exchange gain on revaluation		(945	)		-
Amortization of share-based compensation expense, bond premium and discount and trust preferred securities discount		(2,822	)		(396	)
Changes in assets - (increase) decrease:
Reinsurance balances receivable		(157,679	)		(73,943	)
Accrued investment income		(308	)		(1,623	)
Deferred commission and other acquisition costs		(66,925	)		(46,796	)
Other assets		(1,041	)		392
Changes in liabilities – increase (decrease):
Accrued expenses and other liabilities		(24,011	)		(1,391	)
Loss and loss adjustment expense reserves		42,102			44,832
Unearned premiums		140,972			131,040
Net cash (used in) provided by operating activities		(37,407	)		78,271
Cash flows from investing activities:
Purchases of investments:
Purchases of fixed-maturity securities		(415,611	)		(309,980	)
Purchases of other investments		(138	)		(309	)
Sale of investments:
Proceeds from sales of fixed-maturity securities		134,384			73,365
Proceeds from maturities and calls of fixed-maturity securities		116,139			-
Proceeds from redemption of other investments		127			-
Increase in restricted cash		97,394			-
Loan to related party		-			(54,433	)
Purchase of furniture and equipment		(201	)		(52	)
Net cash used in investing activities		(67,906	)		(291,409	)
Cash flows from financing activities:
Repurchase agreements, net		(123,849	)		254,557
Common share issuance		117			-
Trust preferred securities issuance		260,000			-
Trust preferred securities issuance cost		(4,342	)		-
Dividend paid		(7,733	)		(2,978	)
Net cash provided by financing activities		124,193			251,579
Net increase in cash and cash equivalents		18,880			38,441
Cash and cash equivalents, beginning of period		131,897			35,729
Cash and cash equivalents, end of period	$	150,777		$	74,170

Supplemental information on cash flows
Cash paid for interest	$	8,594		$	-

Supplemental information about non-cash investing and financing activities
Discount on Trust Preferred Securities	$	(44,928	)	$	-
Additional paid in Capital		44,928			-

See accompanying notes to the unaudited condensed consolidated financial statements.

MAIDEN HOLDINGS, LTD.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

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

(Unaudited)

For the six months ended June 30, 2009	Common Shares		Additional Paid-In Capital		Accumulated Other Comprehensive Loss			Retained Earnings			Treasury Shares			Total Shareholders’ Equity
Balance at December 31, 2008	$	596	$	530,519	$	(44,499	)	$	26,944		$	(3,801	)	$	509,759

Net income									29,352						29,352
Unrealized gains, net of deferred taxes						29,402									29,402
Comprehensive income															58,754
Shares issued, net		117		44,928											45,045
Share based compensation				276											276
Dividends to shareholders									(8,435	)					(8,435	)
Balance at June 30, 2009	$	713	$	575,723	$	(15,097	)	$	47,861		$	(3,801	)	$	605,399

For the six months ended June 30, 2008	Common Shares		Additional Paid-In Capital		Accumulated Other Comprehensive Loss			Retained Earnings			Treasury Shares		Total Shareholders’ Equity
Balance at December 31, 2007	$	596	$	529,647	$	(13,496	)	$	20,598		$	-	$	537,345

Net income		-		-		-			26,308			-		26,308
Net unrealized losses		-		-		(21,349	)		-			-		(21,349	)
Comprehensive income														4,959
Share based compensation		-		391		-			-			-		391
Dividends to shareholders		-		-		-			(5,955	)		-		(5,955	)
Balance at June 30, 2008	$	596	$	530,038	$	(34,845	)	$	40,951		$	-	$	536,740

See accompanying notes to the unaudited condensed consolidated financial statements.

MAIDEN HOLDINGS, LTD.

Notes to Unaudited Condensed Consolidated Financial Statements

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

(Unaudited)

1. Basis of Presentation — Summary of Significant Accounting Policies

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

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

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

2. Recent Accounting Pronouncements

In June 2009, the Financial Accounting Standard Board (“FASB”) issued Statement No. 166, “Accounting for Transfers of Financial Assets” (“SFAS166”) an amendment to FASB Statement No. 140. SFAS166 will require more information about transfers of financial assets, including securitization transactions, and where entities have continuing exposure to the risks related to transferred financial assets. It eliminates the concept of a “qualifying special-purpose entity,” changes the requirements for derecognizing financial assets, and requires additional disclosures. SFAS166 enhances information reported to users of financial statements by providing greater transparency about transfers of financial assets and an entity’s continuing involvement in transferred financial assets. SFAS166 will be effective for annual reporting periods beginning on or after January 1, 2010. Early application is not permitted. The Company is currently analyzing the impact this will have on its financial statements.

In June 2009, the FASB issued Statement No. 167, “Amendments to FASB Interpretation No. 46(R)” (“SFAS 167”). SFAS 167 is a revision to FASB Interpretation 46 (Revised December 2003), “Consolidation of Variable Interest Entities ” and changes how a reporting entity determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated. The determination of whether a reporting entity is required to consolidate another entity is based on, among other things, the other entity’s purpose and design and the reporting entity’s ability to direct the activities of the other entity that most significantly impact the other entity’s economic performance. SFAS 167 will require a reporting entity to provide additional disclosures about its involvement with variable interest entities and any significant changes in risk exposure due to that involvement. A reporting entity will be required to disclose how its involvement with a variable interest entity affects the reporting entity’s financial statements. SFAS 167 will be effective for annual reporting periods beginning on or after January 1, 2010. Early application is not permitted. The Company is currently analyzing the impact this will have on its financial statements.

In June 2009, the FASB issued Statement No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles” (“SFAS 168”). SFAS 168 will become the single source of authoritative nongovernmental U.S. generally accepted accounting principles (“GAAP”), superseding existing FASB, American Institute of Certified Public Accountants (“AICPA”), Emerging Issues Task Force (“EITF”), and related accounting literature. SFAS 168 reorganizes the thousands of GAAP pronouncements into roughly 90 accounting topics and displays them using a consistent structure. Also included is relevant Securities and Exchange Commission guidance organized using the same topical structure in separate sections. SFAS 168 will be effective for financial statements issued for reporting periods that end after September 15, 2009. This will have an impact on the Company’s financial statement disclosures since all future references to authoritative accounting literature will be referenced in accordance with SFAS 168.

In May 2009, the FASB issued Statement No. 165, “Subsequent Events” (“SFAS 165”). SFAS 165 requires entities to disclose the date through which they have evaluated subsequent events and whether the date corresponds with the release of their financial statements. Effective for interim and annual periods ending after June 15, 2009, the Company implemented SFAS 165 as of April 1, 2009 with no material impact on Company’s consolidated financial condition and results of operations.

MAIDEN HOLDINGS, LTD.

Notes to Unaudited Condensed Consolidated Financial Statements

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

(Unaudited)

2. Recent Accounting Pronouncements (continued)

In April 2009, the FASB issued three FASB Staff Positions (“FSP”) – (1) FSP FAS 115-2 and FAS 124-2 “Recognition and Presentation of Other-Than-Temporary Impairments” (“FSP FAS 115-2”), (2) FSP FAS 157-4 “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FSP FAS 157-4”), and (3) FSP FAS 107-1 and APB 28-1 “Interim Disclosures about Fair Value of Financial Instruments” (“FSP FAS 107-1”). FSP FAS 115-2 amends the other-than-temporary impairment guidance in GAAP for debt securities to remove the requirement that a company must have the intent and ability to hold a debt security until its anticipated recovery, but rather, under the revised guidance, a company must recognize an other-than-temporary impairment charge on its income statement if it intends to sell the debt security or if it is more likely than not it will be required to sell a debt security before the recovery of its amortized cost basis. In addition, the new FSP FAS 115-2 also requires the recognition of an other-than-temporary impairment charge if the present value of cash flows of a debt security expected to be collected is less than the amortized cost basis of the debt security. FSP FAS 115-2 is effective for interim and annual periods ending after June 15, 2009. The Company adopted FSP FAS 115-2 for the period ended June 30, 2009. The adoption of FSP FAS 115-2 did not have a material impact on the financial statements of the Company.

FSP FAS 157-4 provides additional guidance for estimating fair value in accordance with Financial Accounting Standard No. 157 “Fair Value Measurements” (“SFAS 157”), when the volume and level of activity for an asset or liability has significantly decreased. FSP FAS 157-4 provides a list of non-exhaustive factors a company should consider in determining whether there has been a significant decrease in the volume and level of activity for an asset or liability when compared with normal market activity for that asset or liability (or similar assets or liabilities). If a company determines there has been a significant decrease in the volume and level of activity of an asset or liability, further analysis of the transactions or quoted prices is needed, and a significant adjustment to the transactions or quoted prices may be necessary to estimate the fair value in accordance with SFAS 157. FSP FAS 157-4 also provides additional guidance on identifying circumstances that indicate a transaction is not orderly, and therefore, excluded as an observable input in the determination of fair value. FSP FAS 157-4 is effective for interim and annual periods ending after June 15, 2009. The Company adopted FSP FAS 157-4 for the period ended June 30, 2009. The adoption of FSP FAS 157-4 and did not have a material impact on the financial statements of the Company.

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

3. Investments

(a)

Fixed Maturities and Other Investments

The original or amortized cost, estimated fair value and gross unrealized gains and losses of available-for-sale fixed maturities and other investments as of June 30, 2009 and December 31, 2008 are as follows:

June 30, 2009	Original or amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
Fixed Maturities:
U.S. – treasury bonds	$	33,626	$	286	$	(233	)	$	33,679
U.S. Agency - mortgage backed securities		697,512		20,812		(2,120	)		716,204
Corporate fixed maturities		552,330		15,395		(46,325	)		521,400
Municipal bonds		23,753		14		(116	)		23,651
Total available for sale fixed maturities		1,307,221		36,507		(48,794	)		1,294,934
Other investments		5,814		-		(422	)		5,392
Total investments	$	1,313,035	$	36,507	$	(49,216	)	$	1,300,326

MAIDEN HOLDINGS, LTD.

Notes to Unaudited Condensed Consolidated Financial Statements

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

(Unaudited)

3. Investments (continued)

(a)

Fixed Maturities and Other Investments(continued)

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

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

	Less than 12 months					12 months or more					Total
June 30, 2009	Fair value		Unrealized losses			Fair value		Unrealized Losses			Fair value		Unrealized losses
Available-for-sale securities:
U.S. – treasury bonds	$	4,268		(233	)		-		-		$	4,268		(233	)
U.S. Agency mortgage backed securities		135,262		(1,011	)		49,685		(1,109	)		184,947		(2,120	)
Corporate fixed maturities		47,945		(4,254	)		213,601		(42,071	)		261,546		(46,325	)
Municipal bonds		10,408		(116	)		-		-			10,408		(116	)
		197,833		(5,614	)		263,286		(43,180	)		461,169		(48,794	)
Other investments	$	-		-		$	4,708		(422	)	$	4,708		(422	)
Total temporarily impaired available-for-sale securities and other investments	$	197,883	$	(5,614	)	$	267,994	$	(43,602	)	$	465,877	$	(49,216	)

MAIDEN HOLDINGS, LTD.

Notes to Unaudited Condensed Consolidated Financial Statements

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

(Unaudited)

3. Investments – (continued)

As of June 30, 2009, there were approximately 39 securities in an unrealized loss position with a fair value of $ 465,877. Of these securities, there were 21 securities that have been in an unrealized loss position for 12 months or more with a value of $ 267,994.

	Less than 12 months					12 months or more					Total
December 31, 2008	Fair value		Unrealized losses			Fair value		Unrealized Losses			Fair value		Unrealized losses
Available-for-sale securities:
U.S. – treasury bonds	$	6,521	$	(30	)		-	$	-		$	6,521		(30	)
U.S. Agency mortgage backed securities		148,803		(5,302	)		-		-			148,803		(5,302	)
Corporate fixed maturities		104,279		(13,708	)		153,055		(49,205	)		257,334		(62,912	)
		259,603		(19,040	)		153,055		(49,205	)		412,658		(68,244	)
Other investments	$	4,722	$	(528	)	$	-	$	-		$	4,722		(528	)
Total temporarily impaired available-for-sale securities and other investments	$	264,325	$	(19,568	)	$	153,055	$	(49,205	)	$	417,380	$	(68,772	)

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

Other-than-Temporary Impairments (“OTTI”)

We review our investment portfolio for impairment on a quarterly basis. Impairment of investments results in a charge to operations when a fair value decline below cost is deemed to be other-than-temporary. As of June 30, 2009, we reviewed our portfolio to evaluate the necessity of recording impairment losses for other-than-temporary declines in the fair value of investments. During the three and six months ended June 30, 2009 and 2008, the Company recognized no other than temporary impairment fixed income securities and other investments. Based on our qualitative and quantitative OTTI review of each asset class within our fixed maturity portfolio, the unrealized losses on fixed maturities at June 30, 2009, were primarily due to widening of credit spreads relating to the market illiquidity, rather than credit events. Because the Company neither intends nor will be required to sell these securities until a recovery of fair value to amortized cost, we currently believe it is probable that we will collect all amounts due according to their respective contractual terms. Therefore we do not consider these fixed maturities to be other-than-temporarily impaired at June 30, 2009.

(b) Restricted Cash and Investments

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

	June 30, 2009		December 31, 2008
Restricted cash - third party agreements	$	296,575	$	335,201
Restricted cash - related party agreements		15,308		74,076
Total restricted cash		311,883		409,277
Restricted investments - in Trust for third party agreements at fair value (Amortized cost: 2009 - $755,827; 2008 - $701,973)		731,432		660,388
Restricted investments - in Trust for related party agreements at fair value (Amortized cost: 2009 - $138,773; 2008 - $1,200)		145,861		1,203
Total restricted investments		877,293		661,591
Total restricted cash and investments	$	1,189,176	$	1,070,868

MAIDEN HOLDINGS, LTD.

Notes to Unaudited Condensed Consolidated Financial Statements

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

(Unaudited)

3. Investments – (continued)

The Company enters into repurchase agreements. The agreements are accounted for as collateralized borrowing transactions and are recorded at contract amounts. The Company receives cash or securities, that it invests or holds in short term or fixed income securities. As of June 30, 2009, there were $108,797 principal amount outstanding at interest rates between 0.4% and 0.55%. Interest expense associated with these repurchase agreements was $10 and $783 for the three and six months ended June 30, 2009, respectively, out of which $10 was accrued as of June 30, 2008. The Company has approximately $108,797 of collateral pledged in support of these agreements.

4. Fair Value of Financial Instruments

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

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

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

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

In accordance with SFAS 157, the Company determines fair value based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

SFAS 107, “Disclosure about Fair Value of Financial Instruments” requires all entities to disclose the fair value of its financial instruments, both assets and liabilities recognized and not recognized in the balance sheet, for which it is practicable to estimate fair value.

The Company uses the following methods and assumptions in estimating its fair value disclosure for its financial instruments.

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

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

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

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

Trust preferred securities. The carrying values reported in the accompanying balance sheets for these financial instruments approximate their fair value.

MAIDEN HOLDINGS, LTD.

Notes to Unaudited Condensed Consolidated Financial Statements

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

(Unaudited)

4. Fair Value of Financial Instruments (continued)

a) Fair Value Hierarchy

The following table presents the level within the fair value hierarchy at which the Company’s financial assets and financial liabilities are measured on a recurring basis as of June 30, 2009 and December 31, 2008:

June 30, 2009	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total Fair Value
Assets
Fixed maturities	$	33,679		$	1,261,255		$	-		$	1,294,934

Other investments		-			-			5,392			5,392

Total	$	33,679		$	1,261,255		$	5,392		$	1,300,326
As a percentage of total assets		1.4	%		50.9	%		0.2	%		52.5	%

Liabilities
Securities sold under agreements to repurchase	$	-		$	108,797		$	-		$	108,797
As a percentage of total liabilities		-			5.8	%		-			5.8	%

December 31, 2008	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total Fair Value
Assets
Fixed maturities	$	38,527		$	1,081,428		$	-		$	1,119,955

Other investments		-			-			5,291			5,291

Total	$	38,527		$	1,081,428		$	5,291		$	1,125,246
As a percentage of total assets		1.8	%		50.8	%		0.2	%		52.8	%

Liabilities
Securities sold under agreements to repurchase	$	-		$	232,646		$	-		$	232,646
As a percentage of total liabilities		-			14.4	%		-			14.4	%

b) Level 3 Financial Instruments

The following table presents changes in Level 3 for our financial instruments measured at fair value on a recurring basis for the six months ended June 30, 2009:

Other Investments:	June 30, 2009
Balance – January 1	$	5,291
Change in net unrealized gains (losses) – included in other comprehensive loss		106
Net realized gains (losses) – included in net income		(15	)
Net purchases or (sales)		10
Net transfers in (out of) of Level 3		-
Balance at end of period	$	5,392

MAIDEN HOLDINGS, LTD.

Notes to Unaudited Condensed Consolidated Financial Statements

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

(Unaudited)

5. Goodwill and Intangible Assets

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

June 30, 2009	Gross		Accumulated Amortization			Net		Useful Life
Goodwill	$	49,747	$	-		$	49,747	Indefinite
State licenses		4,527		-			4,527	Indefinite
Customer relationships		51,400		(4,493	)		46,907	15 years double declining
Net balance	$	105,674	$	(4,493	)	$	101,181

December 31, 2008	Gross		Accumulated Amortization			Net		Useful Life
Goodwill	$	49,747	$	-		$	49,747	Indefinite
State licenses		5,000		-			5,000	Indefinite
Customer relationships		51,400		(1,253	)		50,147	15 years double declining
Net balance	$	106,147	$	(1,253	)	$	104,894

On October 31, 2008, the Company acquired the reinsurance operations of GMAC Insurance (GMACI), including its book of assumed reinsurance business. As part of the transaction the Company’s wholly owned subsidiary Maiden Holdings North America, Ltd. (“Maiden NA”) acquired GMAC RE LLC, the reinsurance managing general agent writing business on behalf of Motors Insurance Corporation and the renewal rights for the business written by GMAC RE. In connection with the transaction Maiden NA also entered into an agreement to acquire two licensed insurance companies, GMAC Direct Insurance Company (“GMAC Direct”) and Integon Specialty Insurance Company (“Integon”). Regulatory approval for the acquisition of Integon was received on July 27, 2009 and the acquisition is expected to be consummated on September 1, 2009. The acquisition of GMAC Direct closed on December 23, 2008, and it was renamed Maiden Reinsurance Company on February 2, 2009.

Goodwill and intangible assets are subject to annual impairment testing. No impairment was recorded during the three and six months ended June 30, 2009. The Company currently estimates the amortization of the intangible assets with finite lives for the years ended December 31, 2009, 2010, 2011, 2012 and 2013 to be $6,590, $5,808, $5,033, $4,362 and $3,781, respectively.

6. Trust Preferred Securities

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

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

MAIDEN HOLDINGS, LTD.

Notes to Unaudited Condensed Consolidated Financial Statements

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

(Unaudited)

6. Trust Preferred Securities (continued)

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

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

As a consequence of the issuance of a majority of the Units to a related party under FASB Interpretation 46R Consolidation of Variable Interest Entities (“FIN 46R”), the Trust is a variable interest entity and the Company is deemed to be the Primary beneficiary and is required to consolidate the Trust. The issuance of common shares associated with the Trust Preferred Securities resulted in an original issuance discount of $44,928 based on market price on January 20, 2009. The discount is amortized over 30 years based on the effective interest method. The Debentures and Trust Preferred Securities mature in 2039 and carry a stated or coupon rate of 14% with an effective interest rate of 16.95%. As of June 30, 2009, the stated value of the Trust Preferred Securities was $215,096 which comprises the principal amount of $260,000 and unamortized discount of $44,904.

7. Earnings Per Share

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

	Three months ended June 30, 2009		Three months ended June 30, 2008		Six months ended June 30, 2009		Six months ended June 30, 2008
Net income available to common shareholders	$	16,251	$	13,792	$	29,352	$	26,308

Weighted average number of common shares outstanding - basic		70,287,664		59,550,000		68,994,846		59,550,000
Potentially dilutive securities:
Warrants		-		-		-		-
Share options		379,435		-		315,858		-
Weighted average number of common shares outstanding - diluted		70,667,099		59,550,000		69,310,704		59,550,000

Basic earnings per common share:	$	0.23	$	0.23	$	0.43	$	0.44
Diluted earnings per common share:	$	0.23	$	0.23	$	0.42	$	0.44

As of June 30, 2009, 4,050,000 (2008: 4,050,000) warrants and 645,626 (2008: 859,707) share options were excluded from the calculation of diluted earnings per share as they were anti-dilutive.

8. Share Based Compensation

Share Options

The fair value of each option grant is separately estimated for each vesting date. The fair value of each option is amortized into compensation expense on a straight-line basis between the grant date for the award and each vesting date. The Company has estimated the fair value of all share option awards as of the date of the grant by applying the Black-Scholes-Merton multiple-option pricing valuation model. The application of this valuation model involves assumptions that are judgmental and highly sensitive in the determination of compensation expense. The adoption of SFAS No. 123R’s fair value method has resulted in share-based expense (a component of salaries and benefits) in the amount of approximately $117 and $276 for the three and six months ended June 30, 2009, respectively (2008: $204 and $391, respectively).

MAIDEN HOLDINGS, LTD.

Notes to Unaudited Condensed Consolidated Financial Statements

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

(Unaudited)

8. Share Based Compensation (continued)

The key assumptions used in determining the fair value of options granted in the three and six months ended June 30, 2009 and a summary of the methodology applied to develop each assumption are as follows:

Assumptions :	June 30, 2009
Volatility		29.8-43.9	%
Risk-free interest rate		2.36-3.30	%
Weighted average expected lives in years	5-6.1 years
Forfeiture rate		0	%
Dividend yield rate		1-5.39	%

Expected Price Volatility – This is a measure of the amount by which a price has fluctuated or is expected to fluctuate. The common shares of Maiden Holdings, Ltd. began trading on May 6, 2008. Since the Company does not have enough history over which to calculate an expected volatility representative of the volatility over the expected lives of the options, the Company considered the historical and current implied volatilities of a set of comparable companies in the industry in which the Company operates.

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

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

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

The following schedules shows all options granted, exercised, expired and exchanged under the Plan for the three months ended June 30, 2009:

Three Months Ended June 30, 2009	Number of Share Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term
Outstanding, March 31, 2009		1,469,834	$	5.55	9.31 years
Granted		34,000		5.05	9.89 years
Exercised		-		-		-
Cancelled		-		-		-
Outstanding, June 30, 2009		1,503,834	$	5.54	9.08 years

The following schedule shows all options granted, exercised, expired and exchanged under the Plan for the six months ended June 30, 2009:

Six Months Ended June 30, 2009	Number of Share Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term
Outstanding, December 31, 2008		1,519,834		$	5.92	9.44 years
Granted		184,000			4.51	9.70 years
Exercised		-			-
Cancelled		(200,000	)		7.74		-
Outstanding, June 30, 2009		1,503,834		$	5.54	9.08 years

MAIDEN HOLDINGS, LTD.

Notes to Unaudited Condensed Consolidated Financial Statements

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

(Unaudited)

8. Share Based Compensation (continued)

The following schedules shows all options granted, exercised, expired and exchanged under the Plan for the three months ended June 30, 2008:

Three Months Ended June 30, 2008	Number of Share Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term
Outstanding, March 31, 2008		883,000	$	10.00	9.5 years
Granted		79,000		10.00	9.9 years
Exercised		-		-
Cancelled		-		-
Outstanding, June 30, 2008		962,000	$	10.00	9.3 years

The following schedule shows all options granted, exercised, expired and exchanged under the Plan for the six months ended June 30, 2008:

Six Months Ended June 30, 2008	Number of Share Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term
Outstanding, December 31, 2007		716,000	$	10.00	9.1 years
Granted		246,000		10.00	9.7 years
Exercised		-		-
Cancelled		-		-
Outstanding, June 30, 2008		962,000	$	10.00	9.3 years

The weighted average grant date fair value was $1.58 and $ 3.33 for all options outstanding at June 30, 2009 and 2008, respectively. There was approximately $1,478 and $2,471 of total unrecognized compensation cost related to non-vested share-based compensation arrangements as of June 30, 2009 and 2008, respectively.

9. Dividends Declared

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

On May 11, 2009, the Company’s Board of Directors approved a quarterly cash dividend of $0.06 per common share. This dividend was paid on July 15, 2009 to shareholders of record on July 1, 2009.

10. Related Party Transactions

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

Quota Share Reinsurance Agreement

Effective July 1, 2007, the Company and AmTrust entered into a master agreement, as amended (the “Master Agreement”), by which they caused AmTrust’s Bermuda reinsurance subsidiary, AmTrust International Insurance, Ltd. (“AII”) and Maiden Insurance Company Ltd. (“Maiden Insurance”) to enter into the Reinsurance Agreement by which (a) AII retrocedes to Maiden Insurance an amount equal to 40% of the premium written by subsidiaries of AmTrust, net of the cost of unaffiliated inuring reinsurance (and in the case of AmTrust’s U.K. insurance subsidiary, IGI Insurance Company Limited (“IGI”), net of commissions) and 40% of losses and (b) AII transferred to Maiden Insurance 40% of the AmTrust subsidiaries’ unearned premium reserves, effective as of July 1, 2007, with respect to the current lines of business, excluding risks for which the AmTrust subsidiaries’ net retention exceeds $5,000 (“Covered Business”). AmTrust also has agreed to cause AII, subject to regulatory requirements, to reinsure any insurance company which writes Covered Business in which AmTrust acquires a majority interest to the extent required to enable AII to cede to Maiden Insurance 40% of the premiums and losses related to such Covered Business. The Agreement further provides that AII receives a ceding commission of 31% of ceded written premiums.

MAIDEN HOLDINGS, LTD.

Notes to Unaudited Condensed Consolidated Financial Statements

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

(Unaudited)

10. Related Party Transactions (continued)

The Reinsurance Agreement has an initial term of three years and will automatically renew for successive three year terms thereafter, unless either AII or Maiden Insurance notifies the other of its election not to renew not less than nine months prior to the end of any such three year term. In addition, either party is entitled to terminate on thirty days notice or less upon the occurrence of certain early termination events, which include a default in payment, insolvency, change in control of AII or Maiden Insurance, run-off, or a reduction of 50% or more of the shareholders’ equity of Maiden Insurance or the combined shareholders’ equity of AII and the AmTrust subsidiaries.

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

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

The Company recorded approximately $27,619 and $ 56,873 of ceding commission expense for the three and six months ended June 30, 2009, respectively (2008: $24,090 and $43,865, respectively), as a result of this transaction.

Other Reinsurance Agreement

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

The following is the effect on the Company’s balance sheet as of June 30, 2009 and December 31, 2008, and the results of operations for the three and six months ended June 30, 2009 and 2008 related to the Reinsurance Agreements with AmTrust:

Assets and (liabilities):	June 30, 2009			December 31, 2008
Restricted cash and investments	$	161,169		$	75,279
Loan to related party		167,975			167,975
Reinsurance balances receivable, net		39,599			48,837
Accrued interest on loan to related party		1,124			1,478
Deferred acquisition costs		77,518			80,455
Reserve for losses and loss expenses		(157,349	)		(69,646	)
Unearned premiums	$	(237,698	)	$	(245,742	)

Results of operations:	Three months ended June 30, 2009		Three months ended June 30, 2008			Six months ended June 30, 2009		Six months ended June 30, 2008
Net premium written - assumed	$	82,086	$	171,245		$	175,401	$	258,959
Change in unearned premium - assumed		7,371		(94,602	)		8,042		(118,020	)
Net earned premium - assumed		89,457		76,643			183,443		140,939

Commission and other acquisition costs on premium written		26,767		58,077			57,324		86,543
Change in deferred acquisition costs		2,560		(32,913	)		2,937		(40,625	)
Ceding commission and other acquisition cost - expensed		29,327		25,164			60,261		45,918

Loss and loss adjustment expense		57,494		43,363			115,626		80,762

Interest income on loan to related party		553		933			1,363		2,285

MAIDEN HOLDINGS, LTD.

Notes to Unaudited Condensed Consolidated Financial Statements

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

(Unaudited)

10. Related Party Transactions (continued)

Collateral provided to AmTrust

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

Maiden Insurance satisfied its collateral requirements under the Quota Share Agreement with AII by lending funds in the amount of $167,975 as at June 30, 2009 and December 31, 2008 to AII pursuant to a loan agreement entered into between those parties. The amount of collateral Maiden Insurance is required to maintain, which is determined quarterly, equals its proportionate share of (a) the amount of ceded paid losses for which AII is responsible to such AmTrust subsidiaries but has not yet paid, (b) the amount of ceded loss reserves (including ceded reserves for claims reported but not resolved and losses incurred but not reported) for which AII is responsible to AmTrust subsidiaries, and (c) the amount of ceded reserves for unearned premiums ceded by AmTrust subsidiaries to AII. Pursuant to the Master Agreement, AmTrust has agreed to cause AII not to commingle Maiden Insurance’s assets with AII’s other assets and to cause the AmTrust subsidiaries not to commingle Maiden Insurance’s assets with the AmTrust subsidiaries’ other assets if an AmTrust subsidiary withdraws those assets. AII has agreed that, if an AmTrust subsidiary returns to AII excess assets withdrawn from a Trust Account, drawn on a Letter of Credit or maintained by such AmTrust subsidiary as Withheld Funds, AII will immediately return to Maiden Insurance its proportionate share of such excess assets. AII has further agreed that if the aggregate fair market value of the amount of Maiden Insurance’s assets held in the Trust Account exceeds Maiden Insurance’s proportionate share of AII’s obligations, or if an AmTrust subsidiary misapplies any such collateral, AII will immediately return to Maiden Insurance an amount equal to such excess or misapplied collateral, less any amounts AII has paid to Maiden Insurance. In addition, if an AmTrust subsidiary withdraws Maiden Insurance’s assets from a Trust Account and maintains those assets on its books as withheld funds, AII has agreed to pay to Maiden Insurance interest at the rate equivalent to the one-month London Interbank Offered Rate (“LIBOR”) plus 90 basis points per annum computed on the basis of a 360-day year on the loan (except to the extent Maiden Insurance’s proportionate share of AII’s obligations to that AmTrust subsidiary exceeds the value of the collateral Maiden Insurance has provided), and net of unpaid fees Maiden Insurance owes to AIIM and its share of fees owed to the trustee of the Trust Accounts. Effective December 1, 2008, the Company entered into a Reinsurer Trust Assets Collateral agreement to provide to AII sufficient collateral to secure its proportional share of AII’s obligations to the U.S. AmTrust subsidiaries. The amount of the collateral in Trust, as at June 30, 2009 and December 31, 2008 was approximately $161,169 and $75,279, respectively, (See Note 3(b)).

Reinsurance Brokerage Agreements

Effective July 1, 2007, the Company entered into a reinsurance brokerage agreement with AII Reinsurance Broker Ltd., a subsidiary of AmTrust. Pursuant to the brokerage agreement, AII Reinsurance Broker Ltd. provides brokerage services relating to the Reinsurance Agreement for a fee equal to 1.25% of the premium reinsured from AII. The brokerage fee is payable in consideration of AII Reinsurance Broker Ltd’s brokerage services. AII Reinsurance Broker Ltd. is not the Company’s exclusive broker. AII Reinsurance Broker Ltd. may, if mutually agreed, also produce reinsurance for the Company from other ceding companies, and in such cases the Company will negotiate a mutually acceptable commission rate. The Company recorded approximately $1,095 and $2,250 of reinsurance brokerage expense for the three and six months ended June 30, 2009, respectively (2008: $953 and $1,750, respectively), and deferred reinsurance brokerage of $2,948 and $3,009 as at June 30, 2009 and December 31, 2008, respectively, as a result of this agreement.

Effective April 1, 2008, the Company entered into brokerage services agreements with IGI Intermediaries Limited and IGI Inc. (IGI), both subsidiaries of AmTrust. Pursuant to the brokerage services agreements, IGI provides marketing services to us which includes providing marketing material to potential policyholders, providing us with market information on new trends and business opportunities and referring new brokers and potential policyholders to us. A fee equal to IGI‘s costs in providing such services plus 8% is payable in consideration of IGI’s marketing services. The Company recorded approximately $117 and $270 expense, which is included in other operating expenses, for the three and six months ended June 30, 2009, respectively.

MAIDEN HOLDINGS, LTD.

Notes to Unaudited Condensed Consolidated Financial Statements

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

(Unaudited)

10. 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”), an AmTrust subsidiary, pursuant to which AIIM has agreed to provide investment management services to Maiden Insurance. Pursuant to the asset management agreement, AIIM provides investment management services for an annual fee equal to 0.35% of average invested assets plus all costs incurred. Effective April 1, 2008, the investment management services annual fee has been reduced to 0.20% if the average value of the account is less than $1 billion and 0.15% if the average value of the account is greater than $1 billion. The Company recorded approximately $619 and $1,216 of investment management fees for the three and six months ended June 30, 2009 (2008: $258 and $716), respectively, as a result of this agreement

11. Segments

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

For the three months ended June 30, 2009	Reinsurance - AmTrust Quota Share			Reinsurance -Other			Total
Net premiums written	$	89,803		$	148,553		$	238,356
Net earned premium		87,627			136,214			223,841
Losses and loss adjustment expenses		(56,487	)		(94,570	)		(151,057	)
Commissions and other acquisition expenses		(28,714	)		(28,950	)		(57,664	)
General and administrative expenses		(687	)		(4,088	)		(4,775	)
Underwriting income	$	1,739		$	8,606		$	10,345

Reconciliation to net income
Net investment income and realized gains (losses)								16,647
Amortization of intangible assets								(1,675	)
Foreign exchange gain								2,404
Trust preferred interest								(9,112	)
General and administrative expenses								(2,358	)

Net Income							$	16,251

Net loss and loss expense ratio*		64.5	%		69.4	%		67.5	%
Acquisition cost ratio**		32.8	%		21.3	%		25.8	%
General and administrative expense ratio***		0.8	%		3.0	%		3.2	%
Combined ratio****		98.1	%		93.7	%		96.5	%

MAIDEN HOLDINGS, LTD.

Notes to Unaudited Condensed Consolidated Financial Statements

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

(Unaudited)

11. Segments (continued)

For the six months ended June 30, 2009	Reinsurance - AmTrust Quota Share			Reinsurance -Other			Total
Net premiums written	$	175,174		$	399,731		$	574,905
Net earned premium		180,049			253,884			433,933
Losses and loss adjustment expenses		(113,760	)		(183,585	)		(297,345	)
Commissions and other acquisition expenses		(59,123	)		(45,172	)		(104.295	)
General and administrative expenses		(1,061	)		(9,815	)		(10,876	)
Underwriting income	$	6,105		$	15,312		$	21,417

Reconciliation to net income
Net investment income and realized gain (loss)								28,976
Amortization of intangibles assets								(3,239	)
Foreign exchange gain								2,191
Trust preferred interest								(16,202	)
General and administrative expenses								(3,791	)

Net Income							$	29,352

Net loss and loss expense ratio*		63.2	%		72.3	%		68.5	%
Acquisition cost ratio**		32.8	%		17.8	%		24.0	%
General and administrative expense ratio***		0.6	%		3.9	%		3.4	%
Combined ratio****		96.6	%		94.0	%		95.9	%

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

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

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

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

For the three months ended June 30, 2008	Reinsurance - AmTrust Quota Share			Reinsurance -Other			Total
Net premiums written	$	168,068		$	3,183		$	171,251
Net earned premium		76,246			1,092			77,338
Losses and loss adjustment expenses		(43,213	)		(397	)		(43,610	)
Commissions and other acquisition expenses		(25,043	)		(455	)		(25,498	)
General and administrative expenses		(201	)		(480	)		(681	)
Underwriting income	$	7,789		$	(240	)	$	7,549

Reconciliation to net income
Net investment income and realized gain (loss)								7,802
General and administrative expenses								(1,559	)
Net Income							$	13,792

Net loss and loss expense ratio*		56.7	%		36.4	%		56.4	%
Acquisition cost ratio**		32.9	%		41.7	%		33.0	%
General and administrative expense ratio***		0.3	%		44.0	%		0.9	%
Combined ratio****		89.9	%		122.1	%		90.3	%

MAIDEN HOLDINGS, LTD.

Notes to Unaudited Condensed Consolidated Financial Statements

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

(Unaudited)

11. Segments (continued)

For the six months ended June 30, 2008	Reinsurance - AmTrust Quota Share			Reinsurance -Other			Total
Net premiums written	$	251,016		$	22,667		$	273,683
Net earned premium		140,036			2,607			142,643
Losses and loss adjustment expenses		(80,421	)		(1,025	)		(81,446	)
Commissions and other acquisition expenses		(45,614	)		(1,144	)		(46,758	)
General and administrative expenses		(377	)		(629	)		(1,006	)
Underwriting income	$	13,624		$	(191	)	$	13,433

Reconciliation to net income
Net investment income								15,535
General and administrative expenses								(2,660	)
Net Income							$	26,308

Net loss and loss expense ratio*		57.3	%		39.3	%		57.1	%
Acquisition cost ratio**		32.6	%		43.9	%		32.8	%
General and administrative expense ratio***		0.3	%		24.1	%		0.7	%
Combined ratio****		90.2	%		107.3	%		90.6	%

As of June 30, 2009
Reinsurance balances receivable	$	37,374		$	193,145		$	230,519
Deferred acquisition costs		76,899			94,496			171,395
Loan to related party		167,975			-			167,975
Goodwill		-			49,747			49,747
Intangibles		-			51,434			51,434
Restricted investments and cash		161,168			1,028,008			1,189,176
Corporate and other assets		-			-			616,885
Total Assets	$	443,416		$	1,416,830		$	2,477,131

As of June 30, 2008
Reinsurance balances receivable	$	89,019		$	12,914		$	101,933
Deferred commission and other acquisition costs		82,482			8,529			91,011
Loan to related party		167,975			-			167,975
Corporate and other assets		-			-			812,759
Total Assets	$	339,476		$	21,443		$	1,173,678

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

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

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

MAIDEN HOLDINGS, LTD.

Notes to Unaudited Condensed Consolidated Financial Statements

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

(Unaudited)

11. Segments (continued)

The following tables set forth financial information relating to gross and net premiums written and earned by major line of business for the three and six months ended June 30, 2009 and 2008:

	Three months ended June 30
	2009					2008
	Total		% of Total			Total		% of Total
Gross and net premiums written
Reinsurance - AmTrust Quota Share
Small Commercial Business	$	45,936		19.3	%	$	116,203		67.9	%
Specialty Middle Market Property & Casualty		12,764		5.4	%		14,614		8.5	%
Specialty Risk and Extended Warranty		31,103		13.0	%		37,251		21.7	%
Total Reinsurance - AmTrust Quota Share	$	89,803		37.7	%	$	168,068		98.1	%
Reinsurance – Other
Property		25,510		10.7	%		-		0.00	%
Casualty		105,233		44.1	%		3,183		1.9	%
Accident and Health		17,810		7.5	%		-		0.00	%
Total Reinsurance - Other		148,553		62.3	%		3,183		1.9	%
	$	238,356		100.0	%	$	171,251		100.00	%

	Six months ended June 30
	2009					2008
	Total		% of Total			Total		% of Total
Gross and net premiums written
Reinsurance - AmTrust Quota Share
Small Commercial Business	$	98,908		17.2	%	$	159,860		58.41	%
Specialty Middle Market Property & Casualty		21,993		3.8	%		21,481		7.84	%
Specialty Risk and Extended Warranty		54,273		9.5	%		69,675		25.45	%
Total Reinsurance - AmTrust Quota Share	$	175,174		30.5	%	$	251,016		91.70	%
Reinsurance – Other
Property		76,958		13.4	%		-		0.00	%
Casualty		255,308		44.4	%		22,667		8.30	%
Accident and Health		67,464		11.7	%		-		0.00	%
Total Reinsurance - Other		399,730		69.5	%		22,667		8.30	%
	$	574,904		100.0	%	$	273,683		100.00	%

MAIDEN HOLDINGS, LTD.

Notes to Unaudited Condensed Consolidated Financial Statements

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

(Unaudited)

11. Segments (continued)

	Three months ended June 30
	2009					2008
	Total		% of Total			Total		% of Total
Gross and net premiums earned
Reinsurance - AmTrust Quota Share
Small Commercial Business	$	52,120		23.3	%	$	45,849		59.3	%
Specialty Middle Market Property & Casualty		13,070		5.8	%		8,989		11.6	%
Specialty Risk and Extended Warranty		22,437		10.0	%		21,408		27.7	%
Total Reinsurance - AmTrust Quota Share	$	87,627		39.1	%	$	76,246		98.6	%
Reinsurance – Other
Property		39,578		17.7	%		-		0.0	%
Casualty		71,339		31.9	%		1,092		1.4	%
Accident and Health		25,297		11.3	%		-		0.0	%
Total Reinsurance - Other		136,214		60.9	%		1,092		1.4	%
	$	223,841		100.0	%	$	77,338		100.0	%

	Six months ended June 30
	2009					2008
	Total		% of Total			Total		% of Total
Gross and net premiums earned
Reinsurance - AmTrust Quota Share
Small Commercial Business	$	106,748		24.6	%	$	77,729		54.4	%
Specialty Middle Market Property & Casualty		26,418		6.1	%		19,303		13.5	%
Specialty Risk and Extended Warranty		46,883		10.8	%		43,004		30.2	%
Total Reinsurance - AmTrust Quota Share	$	180,049		41.5	%	$	140,036		98.2	%
Reinsurance – Other
Property		65,577		15.1	%		-		0.0	%
Casualty		137,693		31.8	%		2,607		1.8	%
Accident and Health		50,614		11.6	%		-		0.0	%
Total Reinsurance - Other		253,884		58.5	%		2,607		1.8	%
	$	433,933		100.0	%	$	142,643		100.0	%

12. Subsequent Events

Management has reviewed all events occurring since the date of the financial statements to August 14, 2009, the date at which the attached statements were issued, to determine if any such events should be disclosed. No such events, other than disclosed in the following paragraph, arose during the period indicated which required disclosure.

On August 10, 2009, the Company’s Board of Directors approved a quarterly cash dividend of $0.06 per common share payable on October 15, 2009 to shareholders of record on October 1, 2009.

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

Note on Forward-Looking Statement

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

General Overview

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

On October 31, 2008, we acquired the reinsurance operations of GMAC Insurance from GMACI Holdings, LLC (“GMACI”), including a book of assumed reinsurance business. As part of the transaction, the Company’s wholly owned subsidiary, Maiden Holdings North America, Ltd. (“Maiden NA”), acquired GMAC RE LLC (“GMAC RE”), a reinsurance managing general agent writing business on behalf of Motors Insurance Corporation (“Motors”) and the renewal rights for the business written through GMAC RE. GMAC RE was subsequently renamed Maiden Re Insurance Services, LLC (“Maiden Re”). In connection with the transaction, Maiden NA also entered into stock purchase agreements to acquire insurance companies, GMAC Direct Insurance Company (“GMAC Direct”) and Integon Specialty Insurance Company (“Integon”). The acquisition of GMAC Direct was consummated on December 23, 2008 and it was renamed “Maiden Reinsurance Company” on February 2, 2009. Regulatory approval for the acquisition of Integon was received on July 27, 2009 and the acquisition is expected to be consummated on September 1, 2009. In conjunction with the GMAC Acquisition, on October 31, 2008, Maiden Insurance and Motors entered into a Portfolio Transfer and Quota Share Reinsurance Agreement under which Maiden Insurance reinsured (i) all of the existing contracts written by GMAC RE pursuant to a loss portfolio transfer, and (ii) contracts written pursuant to a fronting arrangement with Motors. The acquisition of GMAC RE, GMAC Direct and Integon and the renewal rights to GMACI’s reinsurance business and the loss portfolio and quota share reinsurance transaction with Motors is referred to as the “GMAC Acquisition”.

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

Relevant Factors

Revenues

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

Expenses

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

•

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

•

outstanding loss or case reserves, which represent management’s best estimate of the likely settlement amount for known claims, less the portion that can be recovered from reinsurers; and

•

IBNR, which are reserves established by us for changes in the values of claims that have been reported to us but are not yet settled, as well as claims that have occurred but have not yet been reported. The portion recoverable from reinsurers is deducted from the gross estimated loss.

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

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

Ratios

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

Critical Accounting Policies

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

Summary of Results of Operations

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

	For the Three Months Ended June 30, 2009			For the Three Months Ended June 30, 2008			For the Six Months Ended June 30, 2009			For the Six Months Ended June 30, 2008
Gross and net premiums written	$	238,356		$	171,251		$	574,905		$	273,683
Change in unearned premiums		(14,515	)		(93,913	)		(140,971	)		(131,040	)
Net earned premium		223,841			77,338			433,933			142,643
Net investment income		15,113			7,763			29,372			15,372
Net realized investment gains (losses)		1,534			39			(396	)		163
Total revenue		240,488			85,140			462,909			158,178
Loss and loss adjustment expenses		151,057			43,610			297,345			81,446
Commission and other acquisition expenses		57,664			25,498			104,295			46,758
General and administrative expenses		7,133			2,236			14,667			3,662
Amortization of intangibles		9,112			-			16,202			-
Interest expense – related party		1,675			-			3,239			-
Foreign exchange gain		(2,404	)		4			(2,191	)		4
Total expenses		224,237			71,348			433,557			131,870

Net income	$	16,251		$	13,792		$	29,352		$	26,308


Selected Consolidated Ratios:
Net loss ratio		67.5	%		56.4	%		68.5	%		57.1	%
Acquisition cost ratio		25.8	%		33.0	%		24.0	%		32.8	%
General and administrative expense ratio		3.2	%		2.9	%		3.4	%		2.6	%
Expense Ratio		29.0	%		35.9	%		27.4	%		35.4	%
Combined ratio		96.5	%		92.3	%		95.9	%		92.5	%

Comparison of Three and Six Months Ended June 30, 2009 and 2008

Premiums. Net premium written increased by $67.1 million, or 39.2%, and $301.2 million, or 110.1%, respectively for the three and six months ended June 30, 2009 compared to the three and six months ended June 30, 2008. This increase was primarily due to the GMAC Acquisition in the fourth quarter of 2008. The lower percentage increase in the second quarter of 2009 reflects non-recurrence of premium written relating to the AmTrust Quota Share of approximately $82 million relating to a one-time unearned premium portfolio transfer in the second quarter of 2008 as a result of AmTrust’s acquisition of Unitrin Business Insurance (“UBI”) .

Net premium earned increased by $146.5 million, or 189.4%, and $291.3 million, or 204.2%, respectively for the three and six months ended June 30, 2009 compared to the three and six months ended June 30, 2008. Approximately $133.7 million and $246.0 million, respectively, of the increase was due to the GMAC Acquisition in the fourth quarter of 2008 with the balance relating to increases across all lines of the AmTrust Quota Share.

Net Investment Income. Net investment income increased by $7.4 million, or 94.7%, and $14.0 million, or 91.1%, respectively for the three and six months ended June 30, 2009 compared to the three and six months ended June 30, 2008. Average invested assets for the period were approximately $1,846 million and $1.765 million, respectively compared to $660 million and $667 million, respectively, and yields were approximately 3.3% and 2.6%, respectively, compared to 4.7% and 4.6%, respectively, for the three and six months ended June 30, 2009 and 2008, respectively. We also carried a substantial amount of cash and cash equivalents in the three and six months ended June 30, 2009 as we continue to deploy the cash obtained through the GMAC Acquisition and also from the proceeds from the Trust Preferred issuance. We expect investment income and the yield achieved to increase over time as cash is more fully deployed.

Net Realized Investment Gains (Losses). Net realized gains (losses) on investments were $1.5 million and $(0.4) million, respectively for the three and six months ended June 30, 2009 compared to gains of $0.04 million and $0.2 million, respectively for the three and six months ended June 30, 2008.

Loss and Loss Adjustment Expenses. Loss and loss adjustment expenses increased by $107.4 million, or 246.4%, and $215.9 million, or 265.1%, respectively for the three and six months ended June 30, 2009 compared to the three and six months ended June 30, 2008. The Company’s loss ratio for the three and six months ended June 30, 2009 increased to 67.5% and 68.5% , respectively, from 56.4% and 57.1%, respectively, for the three and six months ended June 30, 2008. The increase in the loss ratio was primarily due to the GMAC Acquisition in the fourth quarter of 2008 and the addition of UBI premiums, which carry a higher loss ratio, to the AmTrust Quota Share in the second quarter of 2008.

Commission and Other Acquisition Expenses. Commission and other acquisition expenses increased by $32.2 million, or 126.2%, and $57.5 million, or 123.1%, respectively, for the three and six months ended June 30, 2009 compared to the three and six months ended June 30, 2008. This increase was primarily due to the GMAC Acquisition in the fourth quarter of 2008 and the addition of UBI premiums to the AmTrust Quota Share in the second quarter of 2008.

General and Administrative Expenses. General and administrative expenses increased by $4.9 million, or 219%, and $11.0 million, or 300.5%, respectively, for the three and six months ended June 30, 2009 compared to the three and six months ended June 30, 2008. This increase was primarily due to due to the GMAC Acquisition in the fourth quarter of 2008 and the continued build out of our infrastructure.

Interest expense. Interest expense for the for the three and six months ended June 30, 2009 of $9.1 million and $16.2 million, respectively, relates to the issuance of $260 million of 14% Trust Preferred Securities on January 20, 2009. There was no interest paid in the three and six months ended June 30, 2008.

Foreign Exchange Gain. The foreign exchange gain the for the three and six months ended June 30, 2009 arose primarily because of the strengthening of Sterling versus the US dollar and our assets in Sterling exceed our liabilities.

Underwriting Results by Segment

The Company currently operates two business segments Reinsurance - Other and Reinsurance – AmTrust Quota Share. The following tables summarize the underwriting results and associated ratios by segments:

Reinsurance – Other Segment

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

	Three months ended June 30,						Six months ended June 30,
	2009			2008			2009			2008
	($ in thousands)						($ in thousands)
Net premiums written	$	148,553		$	3,183		$	399,731		$	22,667
Net earned premium		136,214			1,092			253,884			2,607
Losses and loss adjustment expenses		(94,570	)		(397	)		(183,585	)		(1,025	)
Commissions and other acquisition expenses		(28,950	)		(455	)		(45,172	)		(1,144	)
General and administrative expenses		(4,088	)		(480	)		(9,815	)		(629	)
Underwriting income	$	8,606		$	(240	)	$	15,312		$	(191	)


Net loss ratio		69.4	%		36.4	%		72.3	%		39.3	%
Acquisition cost ratio		21.3	%		41.7	%		17.8	%		43.9	%
General and administrative expense ratio		3.0	%		44.0	%		3.9	%		24.1	%
Combined ratio		93.7	%		122.1	%		94.0	%		107.3	%

Comparison of Three and Six Months Ended June 30, 2009 and 2008

Premiums. Net premium written increased by $145.4 million, or 4,568% , and $377.1 million, or 1,663.7%, respectively, for the three and six months ended June 30, 2009 compared to the three and six months ended June 30, 2008. These increases were principally due to the GMAC Acquisition in the fourth quarter of 2008.

Net premium earned increased by $135.1 million, or 12,371.8%, and $251.3 million, or 9,639.4%, respectively, for the three and six months ended June 30, 2009 compared to the three and six months ended June 30, 2008. These increases were principally due to GMAC Acquisition in the fourth quarter of 2008.

Loss and Loss Adjustment Expenses. Loss and loss adjustment expenses increased by $94.2 million, or 23,728.0%, and $182.6 million, or 17,814.6%, respectively, for the three and six months ended June 30, 2009 and 2008, respectively. These increases were principally due to the GMAC Acquisition in the fourth quarter of 2008. The Company’s net loss ratio for the three and six months ended June 30, 2009 increased to 69.4 % and 72.3%, respectively, from 36.4% and 39.3%, respectively, for the three and six months ended June 30, 2008 due to the GMAC acquisition.

Commission and Other Acquisition Expenses. Commission and other acquisition expenses increased by $28.5 million, or 6,263.7%, and $44.0 million, or 3,846.2%, respectively, for the three and six months ended June 30, 2009 compared to the three and six months ended June 30, 2008. These increases were principally due to the GMAC Acquisition in the fourth quarter of 2008.

General and Administrative Expenses. General and administrative expenses increased by $3.6 million, or 750.0%, $9.2 million, or 1,462.6%, respectively, for the three and six months ended June 30, 2009 compared to the three and six months ended June 30, 2008. These increases were principally due to the GMAC Acquisition in the fourth quarter of 2008.

Reinsurance – AmTrust Quota Share

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

	Three months ended June 30,						Six months ended June 30,
	2009			2008			2009			2008
	($ in thousands)						($ in thousands)
Net premiums written	$	89,803		$	168,068		$	175,174		$	251,016
Net earned premium		87,627			76,246			180,049			140,036
Net losses and loss adjustment expenses		(56,487	)		(43,213	)		(113,760	)		(80,421	)
Commissions and other acquisition expenses		(28,714	)		(25,043	)		(59,123	)		(45,614	)
General and administrative expenses		(687	)		(201	)		(1,061	)		(377	)
Underwriting income	$	1,739		$	7,789		$	6,105		$	13,624


Net loss ratio		64.5	%		56.7	%		63.2	%		57.3	%
Acquisition cost ratio		32.8	%		32.9	%		32.8	%		32.6	%
General and administrative expense ratio		0.8	%		0.3	%		0.6	%		0.3	%
Combined ratio		98.1	%		89.9			96.6	%		90.2	%

Comparison of Three and Six Months Ended June 30, 2009 and 2008

Premiums. Net premium written decreased by $78.3 million, or 46.6%, and $75.8 million, or 30.2%, respectively, for the three and six months ended June 30, 2009 compared to the three and six months ended June 30, 2008. For the three months ended June 30, 2009 the decrease is primarily due to the one-time unearned premium portfolio of $82 million relating to Unitrin, lower Specialty Risk and Extended Warranty and Specialty Middle Market Property and Casualty lines partially offset by higher Small Commercial Business premium. For the six months ended June 30, 2009 the decrease is primarily due to the non-recurrence of premium written of approximately $82 million relating to a one-time unearned premium portfolio transfer in the second quarter of 2008 as a result of AmTrust’s acquisition of UBI , lower Specialty Risk and Extended Warranty offset by higher Small Commercial Business premium..

Net earned premium increased by $11.4 million, or 15%, and $40.0 million, or 28.6%, respectively, for the three and six months ended June 30, 2009 compared to the three and six months ended June 30, 2008. For the three months ended June 30, 2009 the increase is primarily due to higher cessions from AmTrust’s Small Commercial Business premium and Specialty Middle Market Property and Casualty lines. For the six months ended June 30, 2009 the increase is primarily due to the addition of the UBI premium to the AmTrust Quota Share in the second quarter of 2008 and increased cessions across all lines of the AmTrust Quota share.

Loss and Loss Adjustment Expenses. Loss and loss adjustment expenses increased by $13.3 million, or 30.8%, and $33.3 million, or 41.4%, respectively, for the three and six months ended June 30, 2009 compared to the three and six months ended June 30, 2008. The Company’s net loss ratio for the three and six months ended June 30, 2009 increased to 64.5 % and 63.2%, respectively, from 56.7 % and 57.4%, respectively, for the three and six months ended June 30, 2008. The increase in the net loss ratio resulted, primarily, from the addition of UBI premiums, which carries a higher loss ratio, to the AmTrust Quota Share in the second quarter of 2008.

Commission and Other Acquisition Expenses. Commission and other acquisition expenses increased by $3.7 million, or 14.8%, and $13.5 million, or 29.6%, respectively, for the three and six months ended June 30, 2009 compared to the three and six months ended June 30, 2008. The increase in commissions and other acquisition expenses is consistent with the increase in earned premiums except that the commission rate on the UBI premium ceded is slightly higher.

General and Administrative Expenses. General and administrative expenses increased by $0.5 million, or 241.8%, and $0.7 million, or 181.4%, respectively, for the three and six months ended June 30, 2009 compared to the three and six months ended June 30, 2008.

Liquidity and Capital Resources

Sources and Uses of Funds

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

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

		Six months ended June 30,
		2009			2008
	($ in thousands)
Cash and cash equivalents provided by (used in):
Operating activities		$	(37,407	)	$	78,271
Investing activities			(67,906	)		(291,409	)
Financing activities			124,193			251,579
Change in cash and cash equivalents		$	18,880		$	38,411

Cash flows from operations for the six months ended June 30, 2009 were $(37.4) million compared to $78.2 million for the six months ended June 30, 2008. This increase in the cash used in operating activities was primarily due to the increase in the reinsurance receivables and acquisitions costs. This is primarily due to GMAC Acquisition.

Investing cash flows consist primarily of proceeds on the sale of investments and payments for investments acquired. We used $67.9 million in net cash for investing activities during the six months ended June 30, 2009 compared to $291.4 million for the six months ended June 30, 2008.

Cash flows provided by financing activities were $124.2 million for the six months ended June 30, 2009 compared to $251.6 million for the six months ended June 30, 2008. Included in cash flows provided by financing activities for the six months ended June 30, 2009 were the Trust Preferred issuance (net of expenses) of $255.8 million, dividends paid of $7.7 million and the repayment of $232.6 million of the proceeds from the securities sold under agreements to repurchase, at contract value.

Our funds are primarily invested in liquid, high-grade fixed income securities. As of June 30, 2009, 99.7% of our fixed income portfolio consisted of investment grade securities. The maturity distribution of our fixed income portfolio (on a market value basis) as of June 30, 2009 was as follows:

	June 30,
	2009
	($ in thousands)
Due in one year or less	$	26,392
Due after one year through five years		194,699
Due after five years through ten years		285,506
Due after ten years		72,133
Mortgage and asset -backed		716,204

Total	$	1,294,934

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

The following summarizes the credit ratings of our fixed maturities:

Rating* as of June 30, 2009	Amortized cost		Fair value		% of total fair value
U.S. treasury bonds	$	33,626	$	33,679		2.6	%
AAA U.S. Agency - mortgage-backed securities		708,035		726,611		56.1	%
AAA		39,805		41,958		3.2	%
AA+, AA, AA-		41,579		43,415		3.4	%
A+, A, A-		297,996		266,405		20.6	%
BBB+, BBB, BBB-		181,926		179,164		13.8	%
B- or lower		4,254		3,702		0.3	%

	$	1,307,221	$	1,294,934		100.0	%

Rating* as of December 31, 2008	Amortized cost		Fair value		% of total fair value
U.S. treasury bonds	$	37,782	$	38,527		3.4	%
AAA U.S. Agency - mortgage-backed securities		756,023		771,899		68.9	%
AAA,		15,693		15,748		1.4	%
AA, AA-		40,954		29,087		2.6	%
A+, A, A-		265,170		222,704		19.9	%
BBB+, BBB-		36,921		30,607		2.7	%
B- or lower		11,384		11,383		1.1	%

	$	1,163,927	$	1,119,955		100.0	%

* Ratings as assigned by Standard & Poor’s (“S&P”)

Trust Preferred

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

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

As a consequence of the issuance of a majority of the Units to a related party under FASB Interpretation 46R Consolidation of Variable Interest Entities (“FIN 46R”), the Trust is a variable interest entity and the Company is deemed to be the Primary beneficiary and is required to consolidate the Trust. The issuance of common shares associated with the Trust Preferred Securities resulted in an original issuance discount of $44.9 million based on market price on January 20, 2009. The discount is amortized over 30 years based on the effective interest method. The Debentures and Trust Preferred Securities mature in 2039 and carry a stated or coupon rate of 14% with an effective interest rate of 16.95%. As of June 30, 2009, the stated value of the Trust Preferred Securities was $215.1 million which comprises the principal amount of $260 million and unamortized discount of $44.9 million

Securities Sold Under Agreements to Repurchase, at Contract Value

The Company enters into repurchase agreements. The agreements are accounted for as collateralized borrowing transactions and are recorded at contract amounts. The Company receives cash or securities, that it invests or hold in short term or fixed income securities. In March 2009 the Company chose to end all of its agreements and repaid all amounts then outstanding from existing cash resources. On June 23, 2009, the Company entered into new repurchase agreements totaling $108.8 million, we expect to repay these agreements from existing cash resources prior to September 30, 2009. Interest expense associated with repurchase agreements for the three and six months ended June 30, 2009 and 2008 was $0.01 million and $0.8 million, respectively, compared to the three and six months ended June 30, 2008 interest expense of $1.1million and $1.5 million, respectively.

Restrictions, Collateral and Specific Requirements

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

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

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

At this time, Maiden Insurance uses trust accounts primarily to meet collateral requirements - cash equivalents and investments pledged in favor of ceding companies in order to comply with relevant insurance regulations. As of June 30, 2009, total trust account deposits were $1.19 billion compared to $0 as of June 30, 2008. For the Quota Share Agreement with AII, Maiden Insurance has also loaned funds totaling $168 million as of June 30, 2009 and 2008 to AmTrust’s Bermuda reinsurance subsidiary to satisfy collateral requirements.

In addition, Maiden Insurance has outstanding letters of credit totaling $17.3 million and $0 as of June 30, 2009 and 2008, respectively.

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

In addition, the terms of the Debentures would limit, in the event of certain circumstances, Maiden NA’s ability to pay dividends to the Company.

We do not currently anticipate that the restrictions on liquidity resulting from restrictions on the payments of dividends by our subsidiary companies or from assets committed in trust accounts or to collateralize the letter of credit facilities will have a material impact on our ability to carry out our normal business activities, including, our ability to make dividend payments on our common shares.

Investment Portfolio

Our investment portfolio, including cash and cash equivalents and restricted cash, increased by $96.6 million, or 5.8% to $1,763 million at June 30, 2009 from $1,666 million as of December 31, 2008. Our fixed maturities are classified as available for sale (99.6%) as of June 30, 2009, as defined by SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities.” As such, the reported value of those securities is equal to their fair value. Our fixed maturity securities, gross, as of this date had a fair value of $1,294.9 million and an amortized cost of $1,307.2 million. Our investment portfolio is summarized in the table below by type of investment:

	(Unaudited) June 30, 2009					December 31, 2008
	Fair value		Percentage of portfolio			Fair value		Percentage of portfolio
	($ in thousands)					($ in thousands)
U.S. – treasury bonds	$	33,679		2.6	%	$	38,527		3.4	%
U.S. Agency - mortgage backed securities		716,204		55.1	%		771,899		68.6	%
Corporate fixed maturities		521,400		40.1	%		309,529		27.5	%
Municipalities		23,651		1.8	%		-		0.0	%
Other investments		5,392		0.4	%		5,291		0.5	%
Total available for sale investments	$	1,300,326		100.0	%	$	1,125,246		100.0	%

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

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

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

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

·	any nonpayment of scheduled interest payments; and

·	the occurrence of any discrete credit event resulting in the issuer defaulting on material outstanding obligation or seeking protection under bankruptcy law.

Impairment of investment securities results in a charge to operations when a market decline below cost is deemed to be other-than-temporary. During the three and six months ended June 30, 2009 and 2008, based on the criteria above, we determined that no securities were other-than-temporarily-impaired.

At June 30, 2009, the Company had $48.8 million of gross unrealized losses related to available-for-sale fixed income securities. Corporate bonds represent 40% of the fair value of our fixed maturities and 95% of the total unrealized losses of our fixed maturities. The Company owns 78 corporate bonds in the industrial, bank and financial and other sectors, which have a fair value of approximately 12%, 25% and 3%, respectively, and 10%, 85% and 0% of gross unrealized losses, respectively, of our fixed maturities. The Company believes that the unrealized losses in these securities are the result, primarily, of general economic conditions and not the condition of the issuers, which we believe are solvent and have the ability to meet their obligations. Therefore, the Company expects that the market price for these securities should recover within a reasonable time.

Item 3. Exposures to Market Risk

Quantitative and Qualitative Disclosures about Market Risk

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

Interest Rate Risk

Interest rate risk is the risk that we may incur economic losses due to adverse changes in interest rates. The primary market risk to the investment portfolio is interest rate risk associated with investments in fixed maturity securities. Fluctuations in interest rates have a direct impact on the market valuation of these securities. At June 30, 2009, we had fixed maturity securities with a fair value of $1,294.9 million that are subject to interest rate risk.

The table below summarizes the interest rate risk associated with our fixed maturity securities by illustrating the sensitivity of the fair value and carrying value of our fixed maturity securities as of June 30, 2009 to selected hypothetical changes in interest rates, and the associated impact on our stockholders’ equity. Temporary changes in the fair value of our fixed maturity securities that are held as available-for-sale do impact the carrying value of these securities and are reported in our shareholders’ equity as a component of other comprehensive income. The selected scenarios in the table below are not predictions of future events, but rather are intended to illustrate the effect such events may have on the fair value and carrying value of our fixed maturity securities and on our shareholders’ equity, as of June 30, 2009.

Hypothetical Change in Interest Rates	Fair Value		Estimated Change in Fair Value			Hypothetical Percentage Increase (Decrease) in Shareholders’ Equity
200 basis point increase	$	1,224,879	$	(70,055	)		(12	)%
100 basis point increase		1,256,441		(38,493	)		(6	)%
No change		1,294,934		-			0	%
100 basis point decrease		1,325,622		30,688			5	%
200 basis point decrease	$	1,362,210	$	67,276			11	%

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

Credit Risk

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

Off-Balance Sheet Transactions

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

Item 4. Controls and Procedures

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

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

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

Item 1A . Risk Factors.

Information regarding risk factors appears in Item 1A.Risk Factors in our 2008 Annual report on Form 10K filed with the SEC on March 31, 2009. The risk factors described below updates and should be read in conjunction with the risk factors described in our 2008 Annual Report on Form 10K.

The recent ratings downgrade of Motors Insurance Corporation could adversely affect our ability to retain GMAC RE customers.

As we transition the existing relationships with Motors Insurance Corporation (“Motors”) to Maiden Reinsurance in the U.S., Motors will continue to write our client contracts for a period as long as through October 31, 2010. Motors will in turn cede 100% of the business written to Maiden Insurance during this period. Once our U.S. insurance subsidiaries are fully licensed, the business will be transitioned from Motors. In June 2009, Motors was downgraded to B++ under review by A.M. Best. As a result, ceding companies may be reluctant to do business with Motors and thus the successful transition of all of the GMAC RE clients to Maiden cannot be assured.

While best efforts will be undertaken to transition all of the GMAC RE active client accounts from Motors to Maiden Reinsurance, there can be no certainty that all business underwritten by GMAC RE will effectively transition

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

On May 11, 2009 6,000 options with an exercise price of $5.02 were issued to each of the following directors, Simcha Lyons, Raymond M. Neff, Yehuda L. Neuberger and Steven H. Nigro. In addition we issued on June 1, 2009, 10,000 options with an exercise price of $5.11 to an officer of the Company.

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

Item 4. Submission of Matters to a Vote of Security Holders.

The Company held its 2009 Annual General Meeting on April 30, 2009. Matters voted on at the meeting and the number of votes cast:

1.	To elect five directors to the Board of Directors to serve until the 2010 Annual General Meeting of Shareholders or until their successors have been duly elected or appointed and qualified:

Name	Votes For	Votes Against
Simcha Lyons	64,682,618	232,133
Raymond M. Neff	64,722,068	192,683
Yehuda L. Neuberger	49,795,891	15,118,860
Steven H. Nigro	64,682,618	232,133
Barry D. Zyskind	63,856,123	1,058,628

2.	To elect three directors to the Board of Directors of Maiden Insurance Company, Ltd. to serve until the 2010 Annual General Meeting of Shareholders or until their successors have been duly elected or appointed and qualified:

Name	Votes For	Votes Against
Max Caviet	64,617,582	297,169
John Marshaleck	64,794,953	192,683
Arturo Raschbaum	49, 794,953	119,798

3.	To increase the authorized share capital of the Company from US$1,000,000 divided into 100,000,000 shares of par value US$0.01 each, to US$1,500,000 divided into 150,000,000 shares of par value US$0.01 each:

Voted For		Voted Against		Abstain		Broker Non-Votes
50,499,594		418,552		7,370		13,989,235

To ratify the selections of BDO Seidman, LLP to serve as the Company’s independent registered public accounting firm for the year ending December 31, 2009, and Arthur Morris and Company as Maiden Insurance Company, Ltd.’s independent registered public accounting firm for the year ending December 31, 2009:

Voted For		Voted Against		Abstain		Broker Non-Votes
64,858,538		55,758		455		0

Item 6. Exhibits.

Exhibit Number		Description

31.1		Certification of the Chief Executive Officer, pursuant to Rule 13a-14(a) or 15d-14(a), for the quarter ended June 30, 2009.

31.2		Certification of the Chief Financial Officer, pursuant to Rule 13a-14(a) or 15d-14(a), for the quarter ended June 30, 2009.

32.1		Certification of the Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, for the quarter ended June 30, 2009.

32.2		Certification of the Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, for the quarter ended June 30, 2009.

SIGNATURES

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

		Maiden Holdings, Ltd. (Registrant)

Date: August 13, 2009		/s/ ARTURO M. RASCHBAUM
		Arturo M. Raschbaum President and Chief Executive Officer

		/s/ JOHN M. MARSHALECK
		John M. Marshaleck Chief Financial Officer