1363829--3/5/2009--Enstar_Group

related topics

{stock, price, share}

{interest, director, officer}

{stock, price, operating}

{acquisition, growth, future}

{loss, insurance, financial}

{tax, income, asset}

{product, liability, claim}

{regulation, change, law}

{regulation, government, change}

{provision, law, control}

{operation, international, foreign}

{cost, operation, labor}

{personnel, key, retain}

{customer, product, revenue}

{debt, indebtedness, cash}

If our insurance and reinsurance subsidiaries loss reserves are inadequate to cover their actual losses, our insurance and reinsurance subsidiaries net income and capital and surplus would be reduced. Our insurance and reinsurance subsidiaries reinsurers may not satisfy their obligations to our insurance and reinsurance subsidiaries. The value of our insurance and reinsurance subsidiaries investment portfolios and the investment income that our insurance and reinsurance subsidiaries receive from these portfolios may decline as a result of market fluctuations and economic conditions. Fluctuations in currency exchange rates may cause us to experience losses. We have made, and expect to continue to make, strategic acquisitions of insurance and reinsurance companies in run-off, and these activities may not be financially beneficial to us or our shareholders. Our past and future acquisitions may expose us to operational risks such as cash flow shortages, challenges to recruit appropriate levels of personnel, financial exposures to foreign currencies, additional integration costs and management time and effort. Fluctuations in the reinsurance industry may cause our operating results to fluctuate. The effects of emerging claim and coverage issues on our business are uncertain. Insurance laws and regulations restrict our ability to operate, and any failure to comply with these laws and regulations, or any investigations by government authorities, may have a material adverse effect on our business. If we fail to comply with applicable insurance laws and regulations, we may be subject to disciplinary action, damages, penalties or restrictions that may have a material adverse effect on our business. Exit and finality opportunities provided by solvent schemes of arrangement may not continue to be available, which may result in the diversion of our resources to settle policyholder claims for a substantially longer run-off period and increase the associated costs of run-off of our insurance and reinsurance subsidiaries. We are dependent on our executive officers, directors and other key personnel and the loss of any of these individuals could adversely affect our business. Conflicts of interest might prevent us from pursuing desirable investment and business opportunities. Our inability to successfully manage the companies and portfolios for which we have been engaged as a third-party manager may adversely impact our financial results and our ability to win future management engagements. Our consulting business generates a significant amount of our total income, and the failure to develop new consulting relationships could materially adversely affect our results of operations and financial condition. We may require additional capital in the future that may not be available or may only be available on unfavorable terms. We are a holding company, and we are dependent on the ability of our subsidiaries to distribute funds to us. Risks Relating to Ownership of Our Ordinary Shares Our stock price may experience volatility, thereby causing a potential loss of value to our investors. A few significant shareholders may influence or control the direction of our business. If the ownership of our ordinary shares continues to be highly concentrated, it may limit your ability and the ability of other shareholders to influence significant corporate decisions. Some aspects of our corporate structure may discourage third-party takeovers and other transactions or prevent the removal of our board of directors and management. The market value of our ordinary shares may decline if large numbers of shares are sold, including pursuant to existing registration rights. Because we are incorporated in Bermuda, it may be difficult for shareholders to serve process or enforce judgments against us or our directors and officers. Shareholders who own our ordinary shares may have more difficulty in protecting their interests than shareholders of a U.S. corporation. We do not intend to pay cash dividends on our ordinary shares. Our board of directors may decline to register a transfer of our ordinary shares under certain circumstances. We might incur unexpected U.S., U.K. or Australia tax liabilities if companies in our group that are incorporated outside of those jurisdictions are determined to be carrying on a trade or business there. U.S. persons who own our ordinary shares might become subject to adverse U.S. tax consequences as a result of related person insurance income, or RPII, if any, of our non-U.S. insurance company subsidiaries. U.S. persons who own our ordinary shares would be subject to adverse tax consequences if we or one or more of our non-U.S. subsidiaries were considered a passive foreign investment company, or PFIC, for U.S. federal income tax purposes.

Full 10-K form ▸

1363829--3/5/2009--Enstar_Group_LTD