Edgar Filing: OXBRIDGE RE HOLDINGS Ltd

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Form 10Q

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 September 30, 2015

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

For the transition period from to

Commission File Number: 1-36346

OXBRIDGE RE HOLDINGS LIMITED

(Exact name of registrant as specified in its charter)

Cayman Islands

98-1150254

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

Strathvale House, 2^nd Floor

90 North Church Street, Georgetown

P.O. Box 469

Grand Cayman, Cayman Islands

KY1-9006

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (345) 749-7570

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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

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

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of November 11, 2015; 6,060,000 ordinary shares, par value $0.001 per share, were outstanding.

OXBRIDGE RE HOLDINGS LIMITED

INDEX


		Page
PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Balance Sheets September 30, 2015 (unaudited) and December 31, 2014		3

	Consolidated Statements of Income Three and Nine Months Ended September 30, 2015 and 2014 (unaudited)		4

	Consolidated Statements of Comprehensive Income Three and Nine Months Ended September 30, 2015 and 2014 (unaudited)		5

	Consolidated Statements of Cash Flows Nine Months Ended September 30, 2015 and 2014 (unaudited)		6

	Consolidated Statements of Changes in Shareholders’ Equity Nine Months Ended September 30, 2015 and 2014 (unaudited)		8

	Notes to Consolidated Financial Statements (unaudited)		9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		28

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		38

Item 4.	Controls and Procedures		39

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings		39

Item 1A.	Risk Factors		39

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		39

Item 3.	Defaults Upon Senior Securities		40

Item 4.	Mine Safety Disclosures		40

Item 5.	Other Information		40

Item 6.	Exhibits		40

	Signatures		41

PART I - FINANCIAL INFORMATION

Item 1.

Financial Statements

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

Consolidated Balance Sheets

(expressed in thousands of U.S. Dollars, except per share and share amounts)


	At September, 2015			At December 31, 2014
	(Unaudited)
Assets
Investments:
Fixed-maturity securities, available for sale, at fair value (amortized cost: $3,683 and $3,681, respectively)	$	3,492			3,659
Equity securities, available for sale, at fair value (cost: $8,850 and $8,140, respectively)		6,817			8,179

Total investments		10,309			11,838
Cash and cash equivalents		6,408			5,317
Restricted cash and cash equivalents		30,152			28,178
Accrued interest and dividend receivable		28			22
Premiums receivable		6,729			4,081
Deferred policy acquisition costs		175			132
Prepayment and other receivables		121			80
Property and equipment, net		59			46

Total assets	$	53,981			49,694


Liabilities and Shareholders’ Equity
Liabilities:
Reserve for losses and loss adjustment expenses	$	—			—
Loss experience refund payable		7,824			7,133
Unearned premiums reserve		9,452			5,744
Accounts payable and other liabilities		103			109

Total liabilities		17,379			12,986


Shareholders’ equity:

Ordinary share capital, (par value $0.001, 50,000,000 shares authorized; 6,060,000 and 6,000,000 shares issued and outstanding)		6			6
Additional paid-in capital		33,628			33,540
Retained earnings		5,192			3,145
Accumulated other comprehensive (loss) income		(2,224	)		17

Total shareholders’ equity		36,602			36,708

Total liabilities and shareholders’ equity	$	53,981			49,694

The accompanying Notes to Consolidated Financial Statements are an integral

part of the Consolidated Financial Statements

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

Consolidated Statements of Income

(Unaudited)

(expressed in thousands of U.S. Dollars, except per share and share amounts)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
	(Unaudited)						(Unaudited)

Revenue
Assumed premiums	$	—			468		$	14,888			14,293
Change in loss experience refund payable		(2,089	)		(2,052	)		(6,204	)		(3,713	)
Change in unearned premiums reserve		3,881			3,220			(3,708	)		(7,397	)


Net premiums earned		1,792			1,636			4,976			3,183
Net realized investment gains (losses)		(303	)		165			673			165
Net investment income		90			50			262			50
Other-than-temporary impairment losses		(399	)		—			(399	)		—


Total revenue		1,180			1,851			5,512			3,398


Expenses
Policy acquisition costs and underwriting expenses		85			129			259			302
General and administrative expenses		353			346			1,024			785


Total expenses		438			475			1,283			1,087


Net income		742			1,376		$	4,229			2,311


Earnings per share
Basic and Diluted	$	0.12			0.23		$	0.70			0.52


Dividends paid per share	$	0.12			0.12		$	0.36			0.36

The accompanying Notes to Consolidated Financial Statements are an integral

part of the Consolidated Financial Statements

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

Consolidated Statements of Comprehensive Income

(Unaudited)

(expressed in thousands of U.S. Dollars)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
	(Unaudited)						(Unaudited)

Net income	$	742			1,376		$	4,229			2,311

Other comprehensive loss:
Change in unrealized gain on investments:
Unrealized (loss) gain arising during the period		(1,209	)		120			(1,967	)		120
Other-than-temporary impairment losses		399			—			399			—
Reclassification adjustment for net realized losses (gains) included in net income		303			(165	)		(673	)		(165	)


Net change in unrealized (loss) gain		(507	)		(45	)		(2,241	)		(45	)


Total other comprehensive loss		(507	)		(45	)		(2,241	)		(45	)


Comprehensive income		235			1,331			1,988			2,266

The accompanying Notes to Consolidated Financial Statements are an integral

part of the Consolidated Financial Statements

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

Consolidated Statements of Cash Flows

(Unaudited)

(expressed in thousands of U.S. Dollars)


	Nine Months Ended
	September 30,
	2015			2014
Operating activities
Net income	$	4,229			2,311
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation		88			—
Depreciation		12			9
Net realized investment gains		(673	)		(165	)
Other-than-temporary impairment losses		399			—
Change in operating assets and liabilities:
Accrued interest and dividend receivable		(6	)		(22	)
Premiums receivable		(2,648	)		(6,234	)
Deferred policy acquisition costs		(43	)		(154	)
Prepayment and other receivables		(41	)		(47	)
Prepaid offering costs		—			417
Loss experience refund payable		691			3,713
Unearned premiums reserve		3,708			7,397
Accounts payable and other liabilities		(6	)		(438	)


Net cash provided by operating activities	$	5,710			6,787


Investing activities
Change in restricted cash and cash equivalents		(1,974	)		(16,406	)
Purchase of fixed-maturity securities		(1,101	)		(2,969	)
Purchase of equity securities		(10,814	)		(8,777	)
Proceeds from sale of fixed-maturity and equity securities		11,477			2,880
Purchase of property and equipment		(25	)		(57	)


Net cash used in investing activities	$	(2,437	)		(25,329	)


Financing activities
Proceeds on issuance of share capital		—			5
Additional paid-in capital proceeds, net of offering costs, resulting from;
Share capital		—			21,865
Share warrants		—			5,080
Dividends paid		(2,182	)		(988	)


Net cash (used in) / provided by financing activities	$	(2,182	)		25,962


		(continued)

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

Consolidated Statements of Cash Flows, continued

(Unaudited)

(expressed in thousands of U.S. Dollars)


	Nine Months Ended
	September 30,
	2015			2014

Net change in cash and cash equivalents		1,091			7,420
Cash and cash equivalents at beginning of period		5,317			695


Cash and cash equivalents at end of period	$	6,408			8,115


Supplemental disclosure of cash flow information
Interest paid		—			—

Income taxes paid		—			—


Non-cash investing activities
Net change in unrealized gain on securities available for sale		(2,241	)		(45	)

The accompanying Notes to Consolidated Financial Statements are an integral

part of the Consolidated Financial Statements.

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

Consolidated Statements of Changes in Shareholders’ Equity (unaudited)

Nine Months Ended September 30, 2015 and 2014

(expressed in thousands of U.S. Dollars, except per share and share amounts)


	Ordinary Share Capital				Additional Paid- in		Retained Earnings			Accumulated Other Comprehensive Loss			Total Shareholders’ Equity
	Shares		Amount		Capital		Retained Earnings			Accumulated Other Comprehensive Loss			Total Shareholders’ Equity

Balance at December 31, 2013		1,115,350		1		6,595		853			—			7,449
Net proceeds from the sale of ordinary shares		4,884,650		5		21,865		—			—			21,870
Ordinary share warrants		—		—		5,080		—			—			5,080
Cash dividends paid		—		—		—		(988	)		—			(988	)
Net income for the period		—		—		—		2,311			—			2,311
Total other comprehensive loss		—		—		—		—			(45	)		(45	)

Balance at September 30, 2014		6,000,000	$	6		33,540		2,176			(45	)		35,677


Balance at December 31, 2014		6,000,000		6		33,540		3,145			17			36,708
Cash dividends paid		—		—		—		(2,182	)		—			(2,182	)
Net income for the period		—		—		—		4,229			—			4,229
Issuance of restricted stock		60,000		—		—		—			—			—
Stock-based compensation				—		88		—			—			88
Total other comprehensive loss		—		—		—		—			(2,241	)		(2,241	)

Balance at September 30, 2015		6,060,000	$	6		33,628		5,192			(2,224	)		36,602

The accompanying Notes to Consolidated Financial Statements are an integral

part of the Consolidated Financial Statements.

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

Notes to Consolidated Financial Statements (unaudited)

September 30, 2015

1.	ORGANIZATION AND BASIS OF PRESENTATION

(a) Organization

Oxbridge Re Holdings Limited was incorporated as an exempted company on April 4, 2013 under the laws of the Cayman Islands. Oxbridge Re Holdings Limited owns 100% of the equity interest in Oxbridge Reinsurance Limited (the “Subsidiary”), an entity incorporated on April 23, 2013 under the laws of the Cayman Islands and for which a Class “C” Insurer’s license was granted on April 29, 2013 under the provisions of the Cayman Islands Insurance Law. Oxbridge Re Holdings Limited and the Subsidiary (collectively, the “Company”) have their registered offices at P.O. Box 309, Ugland House, Grand Cayman, Cayman Islands.

The Company’s ordinary shares and warrants are listed on The NASDAQ Capital Market under the symbols “OXBR” and “OXBRW,” respectively.

The Company operates as a single business segment through the Subsidiary, which provides collateralized reinsurance to cover excess of loss catastrophe risks of various affiliated and non-affiliated ceding insurers, including Claddaugh Casualty Insurance Company, Ltd. (“Claddaugh”) and Homeowners Choice Property & Casualty Insurance Company (“HCPCI”), which are related-party entities domiciled in Bermuda and Florida, respectively.

(b) Basis of Presentation

The accompanying unaudited, consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information, and the Securities and Exchange Commission (“SEC”) rules for interim financial reporting. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations. However, in the opinion of management, the accompanying interim consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the Company’s consolidated financial position as of September 30, 2015 and the consolidated results of operations and cash flows for the periods presented. The consolidated results of operations for interim periods are not necessarily indicative of the results of operations to be expected for any subsequent interim period or for the fiscal year ended December 31, 2015. The accompanying unaudited consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2014 included in the Company’s Form 10-K, which was filed with the SEC on March 18, 2015.

In preparing the interim unaudited consolidated financial statements, management was required to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures at the financial reporting date and throughout the periods being reported upon. Certain of the estimates result from judgments that can be subjective and complex and consequently actual results may differ from these estimates, which would be reflected in future periods.

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

Notes to Consolidated Financial Statements (unaudited)

September 30, 2015

Material estimates that are particularly susceptible to significant change in the near-term relate to the determination of the reserve for losses and loss adjustment expenses, valuation of investments and assessment of other-than-temporary impairment (“OTTI”) and loss experience refund payable. Although considerable variability is likely to be inherent in these estimates, management believes that the amounts provided are reasonable. These estimates are continually reviewed and adjusted if necessary. Such adjustments are reflected in current operations.

All significant intercompany balances and transactions have been eliminated.

2.	SIGNIFICANT ACCOUNTING POLICIES

Cash and cash equivalents: Cash and cash equivalents are comprised of cash and short term investments with original maturities of three months or less.

Restricted cash and cash equivalents: Restricted cash and cash equivalents represent funds held in accordance with the Company’s trust agreements with ceding insurers and trustees, which requires the Company to maintain collateral with a market value greater than or equal to the limit of liability, less unpaid premium.

Investments: The Company’s investments consist of fixed-maturity securities and equity securities, and are classified as available for sale. The Company’s investments are carried at fair value with changes in fair value included as a separate component of accumulated other comprehensive (loss) income in shareholders’ equity.

Unrealized gains or losses are determined by comparing the fair market value of the securities with their cost or amortized cost. Realized gains and losses on investments are recorded on the trade date and are included in the statements of income. The cost of securities sold is based on the specified identification method. Investment income is recognized as earned and discounts or premiums arising from the purchase of debt securities are recognized in investment income using the interest method over the remaining term of the security.

The Company reviews all securities for other-than-temporary impairment (“OTTI”) on a quarterly basis and more frequently when economic or market conditions warrant such review. When the fair value of any investment is lower than its cost, an assessment is made to see whether the decline is temporary or other-than-temporary. If the decline is determined to be other-than-temporary the investment is written down to fair value and an impairment charge is recognized in income in the period in which the Company makes such determination. For a debt security that the Company does not intend to sell nor is it more likely than not that the Company will be required to sell before recovery of its amortized cost, only the credit loss component is recognized in income, while impairment related to all other factors is recognized in other comprehensive (loss) income. The Company considers various factors in determining whether an individual security is other-than-temporarily impaired (see Note 4).

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

Notes to Consolidated Financial Statements (unaudited)

September 30, 2015

Fair value measurement: GAAP establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under GAAP are as follows:


Level 1		Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date;

Level 2		Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly, including inputs in markets that are not considered to be active; and

Level 3		Inputs that are unobservable.

Inputs are used in applying the various valuation techniques and broadly refer to the assumptions that market participants use to make valuation decisions, including assumptions about risk. For debt securities, inputs may include price information, volatility statistics, specific and broad credit data, liquidity statistics, broker quotes for similar securities and other factors. The fair value of investments in common stocks and exchange-traded funds is based on the last traded price. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes “observable” requires significant judgment by management and the Company’s investment custodians.

Management and the investment custodians consider observable data to be market data which is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant markets. The categorization of a financial instrument within the hierarchy is based upon the pricing transparency of the instrument and does not necessarily correspond to management and the investment custodians’ perceived risk of that instrument.

Deferred policy acquisition costs (“DAC”): Policy acquisition costs consist of brokerage fees, federal excise taxes and other costs related directly to the successful acquisition of new or renewal insurance contracts, and are deferred and amortized over the terms of the reinsurance agreements to which they relate. The Company evaluates the recoverability of DAC by determining if the sum of future earned premiums and anticipated investment income is greater than the expected future claims and expenses. If a loss is probable on the unexpired portion of policies in force, a premium deficiency loss is recognized. At September 30, 2015, the DAC was considered fully recoverable and no premium deficiency loss was recorded.

Property and equipment: Property and equipment are recorded at cost when acquired. Property and equipment are comprised of motor vehicles, furniture and fixtures, computer equipment and leasehold improvements and are depreciated, using the straight-line method, over their estimated useful lives, which are five years for furniture and fixtures and computer equipment and four years for motor vehicles. Leasehold improvements are amortized over the

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

Notes to Consolidated Financial Statements (unaudited)

September 30, 2015

lesser of the estimated useful lives of the assets or remaining lease term. The Company periodically reviews property and equipment that have finite lives, and that are not held for sale, for impairment by comparing the carrying value of the assets to their estimated future undiscounted cash flows. For the three-month and nine-month period ended September 30, 2015, there were no impairments in property and equipment.

Allowance for uncollectible receivables: Management evaluates credit quality by evaluating the exposure to individual counterparties; where warranted management also considers the credit rating or financial position, operating results and/or payment history of the counterparty. Management establishes an allowance for amounts for which collection is considered doubtful. Adjustments to previous assessments are recognized as income in the year in which they are determined. At September 30, 2015, no receivables were determined to be overdue or impaired and, accordingly, no allowance for uncollectible receivables has been established.

Reserves for losses and loss adjustment expenses: The Company determines its reserves for losses and loss adjustment expenses on the basis of the claims reported by the Company’s ceding insurers, and for losses incurred but not reported, if any, management uses the assistance of an independent actuary. The reserves for losses and loss adjustment expenses represent management’s best estimate of the ultimate settlement costs of all losses and loss adjustment expenses. Management believes that the amounts are adequate; however, the inherent impossibility of predicting future events with precision, results in uncertainty as to the amount which will ultimately be required for the settlement of losses and loss expenses, and the differences could be material. Adjustments are reflected in the consolidated statements of income in the period in which they are determined.

There were no losses or loss adjustment expenses incurred for the three-month and nine-month periods ended September 30, 2015 and 2014.

Loss experience refund payable: Certain contracts include retrospective provisions that adjust premiums or result in profit commissions in the event losses are minimal or zero. In accordance with GAAP, the Company will recognize a liability in the period in which the absence of loss experience obligates the Company to pay cash or other consideration under the contracts. On the contrary, the Company will derecognize such liability in the period in which a loss experience arises. Such adjustments to the liability, which accrue throughout the contract terms, will reduce the liability should a catastrophic loss event occur which is covered by the Company.

Premiums assumed: The Company records premiums assumed, net of loss experience refunds, as earned pro-rata over the terms of the reinsurance agreements and the unearned portion at the balance sheet date is recorded as unearned premiums reserve. A reserve is made for estimated premium deficiencies to the extent that estimated losses and loss adjustment expenses exceed related unearned premiums. Investment income is not considered in determining whether or not a deficiency exists.

Subsequent adjustments of premiums assumed, based on reports of actual premium by the ceding companies, or revisions in estimates of ultimate premium, are recorded in the period

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

Notes to Consolidated Financial Statements (unaudited)

September 30, 2015

in which they are determined. Such adjustments are generally determined after the associated risk periods have expired, in which case the premium adjustments are fully earned when assumed.

Certain contracts may allow for reinstatement premiums in the event of a full limit loss prior to the expiration of the contract. A reinstatement premium is not due until there is a full limit loss event and therefore, in accordance with GAAP, the Company records a reinstatement premium as written only in the event that the reinsured incurs a full limit loss on the contract and the contract allows for a reinstatement of coverage upon payment of an additional premium. For catastrophe contracts which contractually require the payment of a reinstatement premium equal to or greater than the original premium upon the occurrence of a full limit loss, the reinstatement premiums are earned over the original contract period. Reinstatement premiums that are contractually calculated on a pro-rata basis of the original premiums are earned over the remaining coverage period.

Uncertain income tax positions: The authoritative GAAP guidance on accounting for, and disclosure of, uncertainty in income tax positions requires the Company to determine whether an income tax position of the Company is more likely than not to be sustained upon examination by the relevant tax authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. For income tax positions meeting the more likely than not threshold, the tax amount recognized in the financial statements, if any, is reduced by the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement with the relevant taxing authority. The application of this authoritative guidance has had no effect on the Company’s consolidated financial statements because the Company had no uncertain tax positions at September 30, 2015.

Stock-Based Compensation: The Company accounts for stock-based compensation under the fair value recognition provisions of GAAP which requires the measurement and recognition of compensation for all stock-based awards made to employees and directors, including stock options and restricted stock issuances based on estimated fair values. The Company measures compensation for restricted stock based on the price of the Company’s ordinary shares at the grant date. Determining the fair value of share purchase options at the grant date requires significant estimation and judgment. The Company uses an option-pricing model (Black-Scholes option pricing model) to assist in the calculation of fair value for share purchase options. The Company’s shares have not been publicly traded for a sufficient length of time to solely use the Company’s performance to reasonably estimate the expected volatility. Therefore, when estimating the expected volatility, the Company takes into consideration the historical volatility of similar entities. The Company considers factors such as an entity’s industry, stage of life cycle, size and financial leverage when selecting similar entities. The Company uses a sample peer group of companies in the reinsurance industry as well as the Company’s own historical volatility in determining the expected volatility. Additionally, the Company uses the full life of the options, ten years, as the estimated term of the options, and has assumed no forfeitures during the life of the options.

The Company uses the straight-line attribution method for all grants that include only a service condition. Compensation expense related to all awards is included in general and administrative expenses.

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

Notes to Consolidated Financial Statements (unaudited)

September 30, 2015

Recent accounting pronouncements: There have been no recent accounting pronouncements during the nine-month period ended September 30, 2015 that are of significance or potential significance to the Company.

Reclassifications: Certain reclassifications of prior period amounts have been made to conform to the current period presentation.

3.	CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AND CASH EQUIVALENTS


	September 30, 2015 (in thousands)		December 31, 2014 (in thousands)

Cash on deposit	$	2,078	$	1,451
Cash held with custodians		4,330		3,866
Restricted cash held in trust		30,152		28,178


Total		36,560		33,495

Cash and cash equivalents are held by large and reputable counterparties in the United States of America and in the Cayman Islands. Restricted cash held in trust is custodied with Bank of New York Mellon and Wells Fargo Bank and is held in accordance with the Company’s trust agreements with the ceding insurers and trustees, which require that the Company provide collateral having a market value greater than or equal to the limit of liability, less unpaid premium.

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

Notes to Consolidated Financial Statements (unaudited)

September 30, 2015

4.	INVESTMENTS

The Company holds investments in fixed-maturity securities and equity securities that are classified as available for sale. At September 30, 2015 and December 31, 2014, the cost or amortized cost, gross unrealized gains and losses, and estimated fair value of the Company’s available for sale securities by security type were as follows:


	Cost or Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Estimated Fair Value
	($ in thousands)
*As of September 30, 2015*
Fixed-maturity securities
U.S. Treasury and agency securities	$	2,969	$	30	$	—		$	2,999
Exchange-traded debt securities		313		5		—			318
Convertible debt securities	$	401	$	—	$	(226	)	$	175


Total fixed-maturity securities		3,683		35		(226	)		3,492


Preferred stocks		2,278		38		(68	)		2,248
Common stocks		6,572		17		(2,020	)		4,569


Total equity securities		8,850		55		(2,088	)		6,817


Total available for sale securities	$	12,533	$	90	$	(2,314	)	$	10,309


*As of December 31, 2014*
Fixed-maturity securities
U.S. Treasury and agency securities	$	2,969	$	2	$	—		$	2,971
Exchange-traded debt securities		513		18		—			531
Convertible debt securities	$	199	$	—	$	(42	)	$	157


Total fixed-maturity securities		3,681		20		(42	)		3,659


REITs		400		—		(20	)		380
Preferred stocks		1,997		32		(5	)		2,024
Common stocks		5,743		308		(276	)		5,775


Total equity securities		8,140		340		(301	)		8,179


Total available for sale securities	$	11,821	$	360	$	(343	)	$	11,838

At September 30, 2015 and December 31, 2014, available for sale securities with fair value of $3,807,000 and $3,463,000, respectively, are held in trust accounts as collateral under reinsurance contacts with the Company’s ceding insurers.

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

Notes to Consolidated Financial Statements (unaudited)

September 30, 2015

Expected maturities will differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without penalties. The scheduled contractual maturities of fixed-maturity securities at September 30, 2015 and December 31, 2014 are as follows:


	Amortized Cost		Estimated Fair Value
	($ in thousands)
*As of September 30, 2015*
Available for sale
Due in one year or less	$	401	$	175
Due after one year through five years	$	2,969	$	2,999
Due after ten years		313		318


	$	3,683	$	3,492


*As of December 31, 2014*
Available for sale
Due after one year through five years	$	3,168	$	3,128
Due after ten years		513		531


	$	3,681	$	3,659

Proceeds received, and the gross realized gains and losses from sales of available for sale securities, for the three and nine months ended September 30, 2015 and 2014 were as follows:


	Gross proceeds from sales		Gross Realized Gains		Gross Realized Losses
	($ in thousands)
Three Months Ended September 30, 2015
Fixed-maturity securities	$	—	$	—	$	—


Equity securities	$	773	$	5	$	308


Nine Months Ended September 30, 2015
Fixed-maturity securities	$	775	$	75	$	—


Equity securities	$	10,702	$	914	$	316


Three Months Ended September 30, 2014
Fixed-maturity securities	$	—	$	—	$	—


Equity securities	$	2,880	$	166	$	1


Nine Months Ended September 30, 2014
Fixed-maturity securities	$	—	$	—	$	—


Equity securities	$	2,880	$	166	$	1

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

Notes to Consolidated Financial Statements (unaudited)

September 30, 2015

The Company regularly reviews its individual investment securities for OTTI. The Company considers various factors in determining whether each individual security is other-than-temporarily impaired, including:

•

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

•

the length of time and the extent to which the market value of the security has been below its cost or amortized cost;

•

general market conditions and industry or sector specific factors;

•

nonpayment by the issuer of its contractually obligated interest and principal payments; and

•

the Company’s intent and ability to hold the investment for a period of time sufficient to allow for the recovery of costs.

Securities with gross unrealized loss positions at September 30, 2015 and December 31, 2014, aggregated by investment category and length of time the individual securities have been in a continuous loss position, are as follows:


	Less Than Twelve Months					Twelve Months or Greater				Total
As of September 30, 2015	Gross Unrealized Loss			Estimated Fair Value		Gross Unrealized Loss		Estimated Fair Value		Gross Unrealized Loss			Estimated Fair Value
	($ in thousands)					($ in thousands)				($ in thousands)
Fixed-maturity securities
Convertible debt securities	$	(226	)	$	175	$	—	$	—	$	(226	)	$	175


Total fixed-maturity securities		(226	)		175		—		—		(226	)		175
Preferred stocks		(68	)		695		—		—		(68	)		695
All other common stocks		(2,020	)		4,277		—		—		(2,020	)		4,277


Total equity securities		(2,088	)		4,972		—		—		(2,088	)		4,972


Total available for sale securities	$	(2,314	)	$	5,147	$	—	$	—	$	(2,314	)	$	5,147

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

Notes to Consolidated Financial Statements (unaudited)

September 30, 2015

At September 30, 2015, there were 26 securities in an unrealized loss position. None of these securities had been in an unrealized loss position for 12 months or greater.


	Less Than Twelve Months				Twelve Months or Greater				Total
As of December 31, 2014	Gross Unrealized Loss		Estimated Fair Value		Gross Unrealized Loss		Estimated Fair Value		Gross Unrealized Loss		Estimated Fair Value
	($ in thousands)				($ in thousands)				($ in thousands)
Fixed-maturity securities
Convertible debt securities	$	42	$	157	$	—	$	—	$	42	$	157


Total fixed-maturity securities		42		157		—		—		42		157
REITs		20		380		—		—		20		380
Preferred stocks		5		598		—		—		5		598
All other common stocks		276		3,933		—		—		276		3,933


Total equity securities		301		4,911		—		—		301		4,911


Total available for sale securities	$	343	$	5,068	$	—	$	—	$	343	$	5,068

At December 31, 2014, there were 17 securities in an unrealized loss position. None of these securities had been in an unrealized loss position for 12 months or greater.

The Company believes there were no fundamental issues such as credit losses or other factors with respect to its fixed-maturity securities. It is expected that the securities would not be settled at a price less than the par value of the investments and because the Company has the ability and intent to hold these securities and it is probable that the Company will not be required to sell these securities until a market price recovery or maturity, the Company does not consider any of its fixed-maturity securities to be other-than-temporarily impaired at September 30, 2015 and December 31, 2014.

In determining whether equity securities are other than temporarily impaired, the Company considers its intent and ability to hold a security for a period of time sufficient to allow for the recovery of cost. In the three and nine months ended September 30, 2015, the Company determined that two equity securities were other-than-temporarily impaired after considering factors such as the length of time each security had been in an unrealized loss position, the extent of the decline and the near term prospect for recovery alongside other factors. As a result, the Company recognized impairment losses of $399,000 for the three and nine months ended September 30, 2015. There were no impairment losses recorded in the three and nine months ended September 30, 2014.

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

Notes to Consolidated Financial Statements (unaudited)

September 30, 2015

Assets Measured at Estimated Fair Value on a Recurring Basis

The following tables present information about the Company’s financial assets measured at estimated fair value on a recurring basis that is reflected in the consolidated balance sheets at carrying value. The table indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value as of September 30, 2015 and December 31, 2014:


	Fair Value Measurements Using
	(Level 1)		(Level 2)		(Level 3)		Total
	($ in thousands)
*As of September 30, 2015*
Financial Assets:
Cash and cash equivalents	$	6,408	$	—	$	—	$	6,408


Restricted cash and cash equivalents	$	30,152	$	—	$	—	$	30,152


Fixed-maturity securities:
U.S. Treasury and agency securities		2,999		—		—		2,999
Exchange-traded debt securities		318		—		—		318
Convertible debt securities		175		—		—		175


Total fixed-maturity securities		3,492		—		—		3,492


Preferred stocks		2,248		—		—		2,248
All other common stocks		4,569		—		—		4,569


Total equity securities		6,817		—		—		6,817


Total available for sale securities		10,309		—		—		10,309


Total	$	46,869	$	—	$	—	$	46,869

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

Notes to Consolidated Financial Statements (unaudited)

September 30, 2015


	Fair Value Measurements Using
	(Level 1)		(Level 2)		(Level 3)		Total
	($ in thousands)
*As of December 31, 2014*
Financial Assets:
Cash and cash equivalents	$	5,317	$	—	$	—	$	5,317


Restricted cash and cash equivalents	$	28,178	$	—	$	—	$	28,178


Fixed-maturity securities:
U.S. Treasury and agency securities		2,971		—		—		2,971
Exchange-traded debt securities		531		—		—		531
Convertible debt securities		157		—		—		157


Total fixed-maturity securities		3,659		—		—		3,659


REITs		380		—		—		380
Preferred stocks		2,024		—		—		2,024
All other common stocks		5,775		—		—		5,775


Total equity securities		8,179		—		—		8,179


Total available for sale securities		11,838		—		—		11,838


Total	$	45,333	$	—	$	—	$	45,333

5.	TAXATION

Under current Cayman Islands law, no corporate entity, including the Company and the Subsidiary, is obligated to pay taxes in the Cayman Islands on either income or capital gains. The Company and the Subsidiary have an undertaking from the Governor-in-Cabinet of the Cayman Islands, pursuant to the provisions of the Tax Concessions Law, as amended, that, in the event that the Cayman Islands enacts any legislation that imposes tax on profits, income, gains or appreciations, or any tax in the nature of estate duty or inheritance tax, such tax will not be applicable to the Company and the Subsidiary or their operations, or to the ordinary shares or related obligations, until April 23, 2033 and May 17, 2033, respectively.

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

Notes to Consolidated Financial Statements (unaudited)

September 30, 2015

6.	EARNINGS PER SHARE

Basic earnings per share has been computed on the basis of the weighted-average number of ordinary shares outstanding during the periods presented. Diluted earnings per share is computed based on the weighted-average number of ordinary shares outstanding and reflects the assumed exercise or conversion of diluted securities, such as stock options and warrants, computed using the treasury stock method. A summary of the numerator and denominator of the basic and diluted earnings per share is presented below (dollars in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
	(Unaudited)				(Unaudited)

Numerator:
Net earnings	$	742		1,376	$	4,229		2,311


Denominator:
Weighted average shares - basic		6,060,000		6,000,000		6,054,945		4,479,138
Effect of dilutive securities - Stock options		—		—		—		—
Shares issuable upon conversion of warrants		—		—		—		—

Weighted average shares - diluted		6,060,000		6,000,000		6,054,945		4,479,138

Earnings per shares - basic	$	0.12		0.23	$	0.70		0.52

Earnings per shares - diluted	$	0.12		0.23	$	0.70		0.52

For the three and nine-month period ended September 30, 2015, 180,000 options to purchase 180,000 ordinary shares were anti-dilutive as the sum of the proceeds, including unrecognized compensation expense, exceeded the average market price of the Company’s ordinary share during the periods presented.

For the three and nine-month period ended September 30, 2015, 8,230,700 warrants to purchase an aggregate of 8,230,700 ordinary shares were not dilutive because the exercise price of $7.50 exceeded the average market price of the Company’s ordinary share during the periods presented.

GAAP requires the Company to use the two-class method in computing basic earnings per share since holders of the Company’s restricted stock have the right to share in dividends, if declared, equally with common stockholders. These participating securities effect the computation of both basic and diluted earnings per share during periods of net income.

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

Notes to Consolidated Financial Statements (unaudited)

September 30, 2015

7.	SHAREHOLDERS’ EQUITY

On February 28, 2014, the Company’s Registration Statement on Form S-1, as amended, relating to the initial public offering of the Company’s units was declared effective by the SEC. The Registration Statement covered the offer and sale by the Company of 4,884,650 units, each consisting of one ordinary share and one warrant (“Unit”), which were sold to the public on March 26, 2014 at a price of $6.00 per Unit. The ordinary shares and warrants comprising the Units began separate trading on May 9, 2014. The ordinary shares and warrants are traded on the Nasdaq Capital Market under the symbols “OXBR” and “OXBRW,” respectively. One warrant may be exercised to acquire one ordinary share at an exercise price equal to $7.50 per share on or before March 26, 2019. At any time after September 26, 2014 and before the expiration of the warrants, the Company at its option may cancel the warrants in whole or in part, provided that the closing price per ordinary share has exceeded $9.38 for at least ten trading days within any period of twenty consecutive trading days, including the last trading day of the period.

The initial public offering resulted in aggregate gross proceeds to the Company of approximately $29.3 million (of which approximately $5 million related to the fair value proceeds on the warrants issued) and net proceeds of approximately $26.9 million after deducting underwriting commissions and offering expenses.

The fair value of the warrants issued in the initial public offering and initial private placement offering of $1.04 per warrant was determined by the Black-Scholes pricing model using the following assumptions: volatility of 48%, an expected life of 5 years, expected dividend yield of 8% and a risk-free interest rate of 1.69%. There were 8,230,700 warrants outstanding at September 30, 2015. No warrants were exercised during the three-month periods ended September 30, 2015 and 2014.

On January 23, 2015, our Board of Directors declared a quarterly cash dividend of $0.12 per share payable on March 27, 2015 to shareholders of record on February 27, 2015.

On May 9, 2015, our Board of Directors declared a quarterly cash dividend of $0.12 per share payable on June 29, 2015 to shareholders of record on June 8, 2015.

On August 7, 2015, our Board of Directors declared a quarterly cash dividend of $0.12 per share payable on September 29, 2015 to shareholders of record on September 11, 2015.

On November 7, 2015, our Board of Directors declared a quarterly cash dividend of $0.12 per share payable on December 29, 2015 to shareholders of record on December 11, 2015.

As of September 30, 2015, none of the Company’s retained earnings were restricted from payment of dividends to the Company’s shareholders. However, since most of the Company’s capital and retained earnings may be invested in the Subsidiary, a dividend from the Subsidiary would likely be required in order to fund a dividend to the Company’s shareholders and would require notification to the Cayman Islands Monetary Authority (“CIMA”).

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

Notes to Consolidated Financial Statements (unaudited)

September 30, 2015

Under Cayman Islands law, the use of additional paid-in capital is restricted, and the Company will not be allowed to pay dividends out of additional paid-in capital if such payments result in breaches of the prescribed and minimum capital requirement. See also Note 9.

8.	SHARE-BASED COMPENSATION

The Company currently has outstanding stock-based awards granted under the 2014 Omnibus Incentive Plan (the “Plan”). Under the Plan, the Company has discretion to grant equity and cash incentive awards to eligible individuals, including the issuance of up to 1,000,000 of the Company’s ordinary shares. At September 30, 2015, there were 760,000 shares available for grant under the Plan.

Stock options

Stock options granted and outstanding under the Plan vests quarterly over four years, and are exercisable over the contractual term of ten years.

A summary of the stock option activity for the nine-month period ended September 30, 2015 is as follows (option amounts not in thousands):


	Number of Options		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value

Outstanding at January 1, 2015		—
Granted		180,000	$	6
Exercised		—
Forfeited		—

Outstanding at September 30, 2015		180,000	$	6		9.25 years	$	—

Exercisable at September 30, 2015		33,750	$	6		9.25 years	$	—

Compensation expense recognized for the three and nine-month period ended September 30, 2015 totaled $7,000 and $22,000 respectively, and is included in general and administrative expenses. At September 30, 2015, there was approximately $95,000 unrecognized compensation expense related to non-vested stock options granted under the Plan, which the Company expects to recognize over a weighted-average period of thirty nine (39) months.

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

Notes to Consolidated Financial Statements (unaudited)

September 30, 2015

During the nine-month period ended September 30, 2015, 180,000 options were granted with fair value estimated on the date of grant using the following assumptions and the Black-Scholes option pricing model:


Expected dividend yield		8	%
Expected volatility		35	%
Risk-free interest rate		1.81	%
Expected life (in years)		10
Per share grant date fair value of options issued	$	0.64

Restricted Stock Awards

The Company has granted and may grant restricted stock awards to eligible individuals in connection with their service to the Company. The terms of the Company’s outstanding restricted stock grants may include service, performance and market-based conditions. The fair value of the awards with market-based conditions is determined using a Monte Carlo simulation method, which calculates many potential outcomes for an award and then establishes fair value based on the most likely outcome. The determination of fair value with respect to the awards with only performance or service-based conditions is based on the value of the Company’s stock on the grant date.

Information with respect to the activity of unvested restricted stock awards during the nine-month period ended September 30, 2015 is as follows (share amounts not in thousands):


	Weighted- Number of Restricted Stock Awards			Weighted- Average Grant Date Fair Value

Nonvested at January 1, 2015		—
Granted		60,000		$	5.86
Vested		(11,250	)
Forfeited		—

Nonvested at September 30, 2015		48,750		$	5.86

Compensation expense recognized for the three and nine-month period ended September 30, 2015 totaled $22,000 and $66,000 respectively, and is included in general and administrative expenses. At September 30, 2015, there was approximately $286,000 unrecognized compensation expense related to non-vested restricted stock granted under the Plan, which the Company expects to recognize over a weighted-average period of thirty nine (39) months.

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

Notes to Consolidated Financial Statements (unaudited)

September 30, 2015

9.	NET WORTH FOR REGULATORY PURPOSES

The Subsidiary is subject to a minimum and prescribed capital requirement as established by CIMA. Under the terms of its license, the Subsidiary is required to maintain a minimum and prescribed capital requirement of $500 in accordance with the Subsidiary’s approved business plan filed with CIMA. At September 30, 2015, the Subsidiary’s net worth of $24 million exceeded the minimum and prescribed capital requirement. For the three and nine-month period ended September 30, 2015, the Subsidiary’s net income was approximately $1.3 million and $3.6 million, respectively.

The Subsidiary is not required to prepare separate statutory financial statements for filing with CIMA, and there were no material differences between the Subsidiary’s GAAP capital, surplus and net income, and its statutory capital, surplus and net income as of September 30, 2015 or for the periods then ended.

10.

FAIR VALUE AND CERTAIN RISKS AND UNCERTAINTIES

Fair values

With the exception of balances in respect of insurance contracts (which are specifically excluded from fair value disclosures under GAAP) and investment securities as disclosed in Note 4 of these consolidated financial statements, the carrying amounts of all other financial instruments, which consist of cash and cash equivalents, restricted cash and cash equivalents, accrued interest and dividends receivable, premiums receivable and other receivables and accounts payable and accruals, approximate their fair values due to their short-term nature.

Concentration of underwriting risk

A substantial portion of the Company’s current reinsurance business ultimately relates to the risks of two entities domiciled in Florida in the United States, one of which is under common directorship; accordingly the Company’s underwriting risks are not significantly diversified.

Credit risk

The Company is exposed to credit risk in relation to counterparties that may default on their obligations to the Company. The amount of counterparty credit risk predominantly relates to premiums receivable and assets held at the counterparties. The Company mitigates its counterparty credit risk by using several counterparties which decreases the likelihood of any significant concentration of credit risk with any one counterparty. In addition, the Company is exposed to credit risk on fixed-maturity debt instruments to the extent that the debtors may default on their debt obligations.

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

Notes to Consolidated Financial Statements (unaudited)

September 30, 2015

Market risk

Market risk exists to the extent that the values of the Company’s monetary assets fluctuate as a result of changes in market prices. Changes in market prices can arise from factors specific to individual securities or their respective issuers, or factors affecting all securities traded in a particular market. Relevant factors for the Company are both volatility and liquidity of specific securities and markets in which the Company holds investments. The Company has established investment guidelines that seek to mitigate significant exposure to market risk.

11.

COMMITMENTS AND CONTINGENCIES

The Company has an operating lease for office space located at Strathvale House, 2^nd Floor, 90 North Church Street, Grand Cayman, Cayman Islands. The term of the lease is thirty-eight months and commenced April 17, 2015. Rent expense under this lease for the three and nine-month period ended September 30, 2015 was $13,359 and $17,812, respectively, and lease commitments at September 30, 2015 were $158,542.

The Company also has an operating lease for residential space at Britannia Villas #616, Grand Cayman, Cayman Islands. The original term of the lease, which commenced on October 1, 2013, was 13 months. The lease was extended for another 12 months under substantially the same terms and conditions. Rent expense under this lease for the three and nine-month period ended September 30, 2015 was $12,600 and $37,800 respectively, and lease commitments at September 30, 2015 were $4,200. Subsequent to period end, the Company negotiated a further extension of 24 months under substantially similar terms and conditions.

12.

RELATED PARTY TRANSACTIONS

The Company has entered into reinsurance agreements with Claddaugh and HCPCI, both of which are related entities through common directorships. At September 30, 2015 and December 31, 2014, included within premiums receivable, loss experience refund payable and unearned premiums reserve on the consolidated balance sheets are the following related-party amounts:


	At September 30, 2015		At December 31, 2014
	(in thousands)

Premiums receivable	$	—	$	501
Loss experience refund payable	$	5,880	$	3,917
Unearned premiums reserve	$	2,227	$	2,113

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

Notes to Consolidated Financial Statements (unaudited)

September 30, 2015

During the three and nine-month periods ended September 30, 2015 and 2014, included within assumed premiums, change in loss experience refund payable and change in unearned premiums reserve on the consolidated statements of income are the following related-party amounts:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
	(in thousands)						(in thousands)

Revenue
Assumed premiums		—			—			3,340			5,070
Change in loss experience refund payable		(630	)		(674	)		(1,964	)		(1,875	)
Change in unearned premiums reserve		835			1,268			(114	)		(1,344	)

Expenses
Policy acquisition costs & underwriting expenses		—			—			—			49

13.

SUBSEQUENT EVENTS

We evaluate all subsequent events and transactions for potential recognition or disclosure in our financial statements. Except as disclosed in Notes 7 and 11 of these consolidated financial statements and notes thereto, there were no subsequent events and transactions that require disclosure in our financial statements.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS

Certain statements in this Quarterly Report on Form 10-Q, including in this Management’s Discussion and Analysis, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements generally are identified by the words “believe,” “project,” “predict,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. A detailed discussion of risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in the section entitled “Risk Factors” contained in our Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 18, 2015. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Readers are cautioned not to place undue reliance on the forward-looking statements which speak only to the dates on which they were made.

GENERAL

The following is a discussion and analysis of our results of operations for the three and nine-month periods ended September 30, 2015 and 2014 and our financial condition as of September 30, 2015 and December 31, 2014. The following discussion should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and in our Form 10-K filed with the SEC on March 18, 2015. References to “we,” “us,” “our,” “our company,” or “the Company” refer to Oxbridge Re Holdings Limited and its wholly-owned subsidiary, Oxbridge Reinsurance Limited, unless the context dictates otherwise.

Overview

We are a Cayman Islands specialty property and casualty reinsurer that provides reinsurance solutions through our subsidiary, Oxbridge Reinsurance Limited. We focus on underwriting fully-collateralized reinsurance contracts primarily for property and casualty insurance companies in the Gulf Coast region of the United States, with an emphasis on Florida. We specialize in underwriting medium frequency, high severity risks, where we believe sufficient data exists to analyze effectively the risk/return profile of reinsurance contracts.

We underwrite reinsurance contracts on a selective and opportunistic basis as opportunities arise based on our goal of achieving favorable long-term returns on equity for our shareholders. Our goal is to achieve long-term growth in book value per share by writing business that generates attractive underwriting profits relative to the risk we bear. Unlike other insurance and reinsurance companies, we do not intend to pursue an aggressive investment

strategy and instead will focus our business on underwriting profits rather than investment profits. However, we intend to complement our underwriting profits with investment profits on an opportunistic basis. Our primary business focus is on fully collateralized reinsurance contracts for property catastrophes, primarily in the Gulf Coast region of the United States, with an emphasis on Florida. Within that market and risk category, we attempt to select the most economically attractive opportunities across a variety of property and casualty insurers. As our capital base grows, however, we expect that we will consider further growth opportunities in other geographic areas and risk categories.

Our level of profitability is primarily determined by how adequately our premiums assumed and investment income cover our costs and expenses, which consist primarily of acquisition costs and other underwriting expenses, claim payments and general and administrative expenses. One factor leading to variation in our operational results is the timing and magnitude of any follow-on offerings we undertake (if any), as we are able to deploy new capital to collateralize new reinsurance treaties and consequently, earn additional premium revenue. In addition, our results of operations may be seasonal in that hurricanes and other tropical storms typically occur during the period from June 1 through November 30. Further, our results of operations may be subject to significant variations due to factors affecting the property and casualty insurance industry in general, which include competition, legislation, regulation, general economic conditions, judicial trends, and fluctuations in interest rates and other changes in the investment environment.

Because we employ an opportunistic underwriting and investment philosophy, period-to-period comparisons of our underwriting results may not be meaningful. In addition, our historical investment results may not necessarily be indicative of future performance. Due to the nature of our reinsurance and investment strategies, our operating results will likely fluctuate from period to period.

PRINCIPAL REVENUE AND EXPENSE ITEMS

Revenues

We derive our revenues from two principal sources:

•

premiums assumed from reinsurance on property and casualty business; and

•

income from investments.

Premiums assumed include all premiums received by a reinsurance company during a specified accounting period, even if the policy provides coverage beyond the end of the period. Premiums are earned over the term of the related policies. At the end of each accounting period, the portion of the premiums that are not yet earned are included in the unearned premiums reserve and are realized as revenue in subsequent periods over the remaining term of the policy. Our policies typically have a term of twelve months. Thus, for example, for a policy that is written on July 1, 2015, one-half of the premiums will be earned in 2015 and the other half will be earned during 2016.

Premiums from reinsurance on property and casualty business assumed are directly related to the number, type and pricing of contracts we write.

Premiums assumed are recorded net of change in loss experience refund, which consists of changes in amounts due to the cedants under two of our reinsurance contracts. These contracts contain retrospective provisions that adjust premiums in the event losses are minimal or zero. We recognize a liability pro-rata over the period in which the absence of loss experience obligates us to refund premiums under the contracts, and we will derecognize such liability in the period in which a loss experience arises. The change in loss experience refund is negatively correlated to loss and loss adjustment expenses described below.

Income from our investments is primarily comprised of interest income, dividends and net realized gains on investment securities. Such income is primarily from the Company’s investment capital, some of which is held in trust accounts that collateralize the reinsurance policies that we write. The investment parameters for capital held in such trust accounts is generally established by the cedant for the relevant policy.

Expenses

Our expenses consist primarily of the following:

•

losses and loss adjustment expenses;

•

policy acquisition costs and underwriting expenses; and

•

general and administrative expenses.

Loss and loss adjustment expenses are a function of the amount and type of reinsurance contracts we write and of the loss experience of the underlying coverage. As described below, loss and loss adjustment expenses are based on the claims reported by our ceding insurers, and where necessary, may include an actuarial analysis of the estimated losses, including losses incurred during the period and changes in estimates from prior periods. Depending on the nature of the contract, loss and loss adjustment expenses may be paid over a period of years.

Policy acquisition costs and underwriting expenses consist primarily of brokerage fees, ceding commissions, premium taxes and other direct expenses that relate to our writing of reinsurance contracts. We amortize deferred acquisition costs over the related contract term.

General and administrative expenses consist of salaries and benefits and related costs, including costs associated with our professional fees, rent and other general operating expenses consistent with operating as a public company.

RESULTS OF OPERATIONS

The following table summarizes our results of operations for the three and nine-month periods ended September 30, 2015 and 2014 (dollars in thousands, except per share amounts):


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2015			2014			2015			2014
	(Unaudited)						(Unaudited)

Revenue
Assumed premiums	$	—			468		$	14,888			14,293
Change in loss experience refund payable		(2,089	)		(2,052	)		(6,204	)		(3,713	)
Change in unearned premiums reserve		3,881			3,220			(3,708	)		(7,397	)


Net premiums earned		1,792			1,636			4,976			3,183
Net realized investment gains (losses)		(303	)		165			673			165
Net investment income		90			50			262			50
Other-than-temporary impairment losses		(399	)		—			(399	)		—


Total revenue		1,180			1,851			5,512			3,398


Expenses
Policy acquisition costs and underwriting expenses		85			129			259			302
General and administrative expenses		353			346			1,024			785


Total expenses		438			475			1,283			1,087


Net income		742			1,376		$	4,229			2,311


Earnings per share
Basic and Diluted	$	0.12			0.23		$	0.70			0.52


Weighted average shares outstanding
Basic and Diluted		6,060,000			6,000,000			6,054,945			4,479,138


Dividends paid per share	$	0.12			0.12		$	0.36			0.36


Performance ratios to net premiums earned:
Loss ratio		0	%		0	%		0	%		0	%
Acquisition cost ratio		4.7	%		7.9	%		5.2	%		9.5	%
Expense ratio		24.4	%		29.0	%		25.8	%		34.2	%
Combined ratio		24.4	%		29.0	%		25.8	%		34.2	%

General. Net income for the quarter ended September 30, 2015 was $742 thousand, or $0.12 per basic and diluted share, compared to a net income of $1.4 million, or $0.23 per basic and diluted share, for the quarter ended September 30, 2014. The decrease in net income from $1.4 million to $742 thousand was primarily due to realized losses on sale of investments as well as other-than-temporary impairment losses recognized during the quarter ended September 30, 2015.

Net income for the nine months ended September 30, 2015, was $4.2 million or $0.70 per basic and diluted share compared to a net income of $2.3 million for the nine-month period ended September 30, 2014. The increase in net income from $2.3 million to $4.2 million was primarily due to an increase in net premiums earned. Additionally, we only began investing in fixed-maturity and equity securities during August 2014 and earned $536 thousand of investment income (inclusive of other-than-temporary impairment losses) during the nine months ended September 30, 2015, compared with $215 thousand in the comparable period.

Premium Income. Premiums earned reflects the pro rata inclusion into income of premiums assumed (net of loss experience refund) over the life of the reinsurance contracts.

Net premiums earned for the quarter ended September 30, 2015 increased $156 thousand, or 10%, to $1.8 million, from $1.6 million for the quarter ended September 30, 2014. The growth of net premiums earned was driven by continued growth in the number and size of reinsurance contracts placed.

Net premiums earned for the nine months ended September 30, 2015 increased $1.8 million, or 56%, to $4.9 million, from $3.2 million for the nine months ended September 30, 2014. The growth of net premiums earned was driven by continued growth in the number and size of reinsurance contracts placed.

Losses Incurred. There were no losses incurred for the three and nine months ended September 30, 2015 and 2014.

Policy Acquisition Costs and Underwriting Expenses. Acquisition costs represent the amortization of the brokerage fees and federal excise taxes incurred on reinsurance contracts placed. Policy acquisition costs and underwriting expenses for the quarter ended September 30, 2015 decreased $44 thousand, or 34%, to $85 thousand from $129 thousand for the quarter ended September 30, 2014. The decrease is primarily due to the December 31, 2014 expiration of an underwriting consulting agreement with Resonant Consultants, Inc. As such, no underwriting consulting expense is included for the quarter ended September 30, 2015, compared with $38 thousand in the comparable period.

Policy acquisition costs and underwriting expenses for the nine months ended September 30, 2015 decreased by $43 thousand, or 14%, to $259 thousand from $302 thousand for the nine months ended September 30, 2014. The overall decrease is the result of both increased policy acquisition costs associated with the continued growth in the number and size of reinsurance contracts placed during the period, offset by a decrease of $112 thousand due to the December 31, 2014 expiration of an underwriting consulting agreement with Resonant Consultants, Inc.

General and Administrative Expenses. General and administrative expenses for the quarter ended September 30, 2015 increased $7 thousand, or 2%, to $353 thousand, from $346 thousand for the quarter ended September 30, 2014. The increase is not considered material.

General and administrative expenses for the nine months ended September 30, 2015 increased $239 thousand, or 30%, to $1 million, from $785 thousand for the nine months ended September 30, 2014. The increase is due primarily to the fact that, following our initial public offering, we saw a significant and continual increase in our general and administrative expenses, because of an increase in business activities and operations associated with being a public entity.

MEASUREMENT OF RESULTS

We use various measures to analyze the growth and profitability of business operations. For our reinsurance business, we measure growth in terms of premiums assumed and we measure underwriting profitability by examining our loss, underwriting expense and combined ratios. We analyze and measure profitability in terms of net income and return on average equity.

Premiums Assumed. We use gross premiums assumed to measure our sales of reinsurance products. Gross premiums assumed also correlates to our ability to generate net premiums earned. See also the analysis above relating to the growth in premiums assumed.

Loss Ratio. The loss ratio is the ratio of losses and loss adjustment expenses incurred to premiums earned and measures the underwriting profitability of our reinsurance business. There were no losses incurred during the three and nine-month periods ended September 30, 2015 and 2014.

Acquisition Cost Ratio. The acquisition cost ratio is the ratio of policy acquisition costs and other underwriting expenses to net premiums earned. The acquisition cost ratio measures our operational efficiency in producing, underwriting and administering our reinsurance business. The acquisition cost ratio decreased from 7.9% for the quarter ended September 30, 2014 to 4.7% for the quarter ended September 30, 2015. The acquisition cost ratio also decreased from 9.5% for the nine months ended September 30, 2014 to 5.2% for the nine months ended September 30, 2015. The decrease is due to the overall lower weighted-average acquisition costs on reinsurance contracts in force during the three and nine-month periods ended September 30, 2015, coupled with the expiration of Resonant Consulting Inc. contract discussed above.

Expense Ratio. The expense ratio is the ratio of policy acquisition costs, other underwriting expenses and other administrative expenses to net premiums earned. We use the expense ratio to measure our operating performance. The expense ratio decreased from 29.0% for the three-month period ended September 30, 2014 to 24.4% for the three-month period ended September 30, 2015. The expense ratio also decreased from 34.2% for the nine-month period ended September 30, 2014 to 25.8% for the nine-month period ended September 30, 2015. The decrease is due to both a decrease in policy acquisition cost ratio discussed above, as well as a less than commensurate increase in general and administrative expenses when compared with increase in net premiums earned, as the correlation between these financial statement items is relatively low.

Combined Ratio. We use the combined ratio to measure our underwriting performance. The combined ratio is the sum of the loss ratio and the expense ratio. If the combined ratio is at or above 100%, we are not underwriting profitably and may not be profitable. The combined ratio of 24.4% and 29.0% for the three-month periods ended September 30, 2015 and 2014, and 25.8% and 34.2% for the nine-month periods ended September 30, 2015 and 2014, is the same as the expense ratio above, given that we have not experienced losses.

FINANCIAL CONDITION – SEPTEMBER 30, 2015 COMPARED TO DECEMBER 31, 2014

Restricted Cash and Cash Equivalents. As of September 30, 2015, our restricted cash and cash equivalents increased by $1.9 million, or 7%, to $30.1 million, from $28.2 million as of December 31, 2014. The overall increase is due to collateral being placed for June 1, 2015 insurance contracts partially offset by collateral being returned on expiration of a number of insurance contracts at May 31, 2015.

Investments. As of September 30, 2015, our available for sale securities decreased by $1.5 million, or 13%, to $10.3 million, from $11.8 million as of December 31, 2014. The decrease is primarily a result of increased unrealized losses on investments on our fixed-maturity and equity securities during the nine-month period ended September 30, 2015.

Premiums Receivable. As of September 30, 2015, our premiums receivable increased by approximately $2.6 million, or 65%, to $6.7 million, from $4.1 million as of December 31, 2014. The increase is due to premiums assumed for treaty year beginning June 1, 2015 offset by receipt of premium installments during the nine-month period ended September 30, 2015.

Loss Experience Refund Payable. As of September 30, 2015, our loss experience refund payable increased by $691 thousand, or 10%, to $7.8 million, from $7.1 million at December 31, 2014. The increase is due to both the recognition of a pro-rated liability over the nine-month period ended September 30, 2015, because the absence of loss experience under two of our reinsurance contracts obligates us to refund premium to two of our ceding reinsurers, offset by the cash settlement of our loss experience refund liability under one of our reinsurance contracts.

Unearned Premiums Reserve. As of September 30, 2015, our unearned premiums reserve increased by $3.7 million, or 65%, to $9.4 million, from $5.7 million at December 31, 2014. The increase is due primarily the unearned premiums arising on the successful placement of reinsurance contracts for the treaty year effective June 1, 2015.

LIQUIDITY AND CAPITAL RESOURCES

General

We are organized as a holding company with substantially no operations of our own. Our operations are conducted through our sole reinsurance subsidiary, Oxbridge Reinsurance Limited, which underwrites risks associated with our property and casualty reinsurance programs. We have minimal continuing cash needs which are principally related to the payment of administrative expenses and shareholder dividends. There are restrictions on Oxbridge Reinsurance Limited’s ability to pay dividends which are described in more detail below.

Sources and Uses of Funds

Our sources of funds primarily consist of premium receipts (net of brokerage fees and federal excise taxes, where applicable) and investment income, including interest, dividends and realized gains. We use cash to pay losses and loss adjustment expenses, other underwriting expenses, dividends, and general and administrative expenses. Substantially all of our surplus funds, net of funds required for cash liquidity purposes, are invested in accordance with our investment guidelines. Our investment portfolio is primarily comprised of cash and highly liquid securities, which can be liquidated, if necessary, to meet current liabilities. We believe that we have sufficient flexibility to liquidate any long-term securities that we own in a rising market to generate liquidity.

As of September 30, 2015, we believe we had sufficient cash flows from operations to meet our liquidity requirements. We expect that our operational needs for liquidity will be met by cash, investment income and funds generated from underwriting activities. We have no plans to issue debt and expect to fund our operations for the foreseeable future from operating cash flows and the net proceeds of our initial public offering, as well as from potential future equity offerings. However, we cannot provide assurances that in the future we will not incur indebtedness to implement our business strategy, pay claims or make acquisitions.

Although Oxbridge Re Holdings Limited is not subject to any significant legal prohibitions on the payment of dividends, Oxbridge Reinsurance Limited is subject to Cayman Islands regulatory constraints that affect its ability to pay dividends to us and include a minimum net worth requirement. Currently, the minimum net worth requirement for Oxbridge Reinsurance Limited is $500. As of September 30, 2015, Oxbridge Reinsurance Limited exceeded the minimum required. By law, Oxbridge Reinsurance Limited is restricted from paying a dividend if such a dividend would cause its net worth to drop to less than the required minimum.

Cash Flows

Our cash flows from operating, investing and financing activities for the nine-month periods ended September 30, 2015 and 2014 are summarized below.

Cash Flows for the Nine months ended September 30, 2015

Net cash provided by operating activities for the nine months ended September 30, 2015 totaled $5,710, which consisted primarily of cash received from net written premiums less cash disbursed for operating expenses. Net cash used in investing activities of $2,437 was primarily due to the net purchases of available for sale securities and increased collateral deposited in trust accounts. Net cash used in financing activities totaled $2,182 representing cash dividend payments.

Cash Flows for the Nine months ended September 30, 2014

Net cash provided by operating activities for the nine months ended September 30, 2014 totaled $6,787, which consisted primarily of cash received from net written premiums less cash disbursed for operating expenses. Net cash used in investing activities of $25,329 was primarily was primarily due to the net purchases of available for sale securities and increased collateral deposited in trust accounts. Net cash provided by financing activities totaled $25,692, which consisted primarily of net proceeds from the initial public offering of $26,950 offset by cash dividend payments of $988.

Contractual Obligations and Commitments

The following table summarizes our contractual obligations as of September 30, 2015:


	Payment Due by Period (in thousands)
	Total		Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years
Operating lease ⁽¹⁾	$	4		4		—		—		—

Operating Lease ⁽²⁾		158		36		122		—		—

Total	$	162	$	40		122		—		—

(1)

On October 1, 2013, we entered into an operating lease agreement for residential space at Britannia Villas #616, Grand Cayman, Cayman Islands. The original term of the lease, which commenced on October 1, 2013, was 13 months. The lease was extended for another 12 months under substantially the same terms and conditions. Rent expense under this lease for the three and nine-month period ended September 30, 2015 was $12,600 and $37,800 respectively, and lease commitments at September 30, 2015 were $4,200. Subsequent to period end, the Company negotiated a further extension of 24 months under substantially similar terms and conditions.

(2)

The Company has an operating lease for office space located at Strathvale House, 90 North Church Street, Grand Cayman, Cayman Islands. The term of the lease is thirty-eight months and commenced April 17, 2015. Rent expense under this lease for the three and nine-month period ended September 30, 2015 was $13,359 and $17,812, respectively, and lease commitments at September 30, 2015 were $158,542.

OFF-BALANCE SHEET ARRANGEMENTS

As of September 30, 2015, we had no off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K.

EXPOSURE TO CATASTROPHES

As with other reinsurers, our operating results and financial condition could be adversely affected by volatile and unpredictable natural and man-made disasters, such as hurricanes, windstorms, earthquakes, floods, fires, riots and explosions. Although we attempt to limit our exposure to levels we believe are acceptable, it is possible that an actual catastrophic event or multiple catastrophic events could have a material adverse effect on our financial condition, results of operations and cash flows. As described under “CRITICAL ACCOUNTING POLICIES—Reserves for Losses and Loss Adjustment Expenses” below, under GAAP, we are

not permitted to establish loss reserves with respect to losses that may be incurred under reinsurance contracts until the occurrence of an event which may give rise to a claim. As a result, only loss reserves applicable to losses incurred up to the reporting date may be established, with no provision for a contingency reserve to account for expected future losses.

CRITICAL ACCOUNTING POLICIES

We are required to make estimates and assumptions in certain circumstances that affect amounts reported in our consolidated financial statements and related footnotes. We evaluate these estimates and assumptions on an on-going basis based on historical developments, market conditions, industry trends and other information that we believe to be reasonable under the circumstances. These accounting policies pertain to premium revenues and risk transfer, reserve for loss and loss adjustment expenses and the reporting of deferred acquisition costs.

Premium Revenue and Risk Transfer. We record premiums revenue as earned pro-rata over the terms of the reinsurance agreements and the unearned portion at the balance sheet date is recorded as unearned premiums reserve. A reserve is made for estimated premium deficiencies to the extent that estimated losses and loss adjustment expenses exceed related unearned premiums. Investment income is not considered in determining whether or not a deficiency exists.

We account for reinsurance contracts in accordance with ASC 944, “Financial Services – Insurance.” Assessing whether or not a reinsurance contract meets the conditions for risk transfer requires judgment. The determination of risk transfer is critical to reporting premiums written. If we determine that a reinsurance contract does not transfer sufficient risk, we must account for the contract as a deposit liability.

Loss experience refund payable. Certain contracts include retrospective provisions that adjust premiums or result in profit commissions in the event losses are minimal or zero. Under such contracts, the Company expects to recognize aggregate liabilities payable to the ceding insurers assuming no losses occur during the contract period. In accordance with GAAP, the Company will recognize a liability in the period in which the absence of loss experience obligates the Company to pay cash or other consideration under the contract. On the contrary, the Company will derecognize such liability in the period in which a loss experience arises. Such adjustments to the liability, which accrue throughout the contract term, will reduce the liability should a catastrophic loss event covered by the Company occur.

Reserves for Losses and Loss Adjustment Expenses. We determine our reserves for losses and loss adjustment expenses on the basis of the claims reported by our ceding insurers, and for losses incurred but not reported, if any, we will use the assistance of an independent actuary. The reserves for losses and loss adjustment expenses represent management’s best estimate of the ultimate settlement costs of all losses and loss adjustment expenses. We believe that the amounts that are determined by us will be adequate; however, the inherent impossibility of predicting future events with precision, results in uncertainty as to the amount which will ultimately be required for the settlement of losses and loss expenses, and the differences could be material.

Under GAAP, we are not permitted to establish loss reserves until the occurrence of an actual loss event. As a result, only loss reserves applicable to losses incurred up to the reporting date may be recorded, with no allowance for the provision of a contingency reserve to account for expected future losses. Losses arising from future events, which could be substantial, are estimated and recognized at the time the loss is incurred.

Deferred Acquisition Costs. We defer certain expenses that are directly related to and vary with producing reinsurance business, including brokerage fees on gross premiums assumed, premium taxes and certain other costs related to the acquisition of reinsurance contracts. These costs are capitalized and the resulting asset, deferred acquisition costs, is amortized and charged to expense in future periods as premiums assumed are earned. The method followed in computing deferred acquisition costs limits the amount of such deferral to its estimated realizable value. The ultimate recoverability of deferred acquisition costs is dependent on the continued profitability of our reinsurance underwriting. If our underwriting ceases to be profitable, we may have to write off a portion of our deferred acquisition costs, resulting in a further charge to income in the period in which the underwriting losses are recognized.

Stock-Based Compensation: The Company accounts for stock-based compensation under the fair value recognition provisions of GAAP which requires the measurement and recognition of compensation for all stock-based awards made to employees and directors, including stock options and restricted stock issuances based on estimated fair values. The Company measures compensation for restricted stock based on the price of the Company’s ordinary shares at the grant date. Determining the fair value of share purchase options at the grant date requires significant estimation and judgment. The Company uses an option-pricing model (Black-Scholes option pricing model) to assist in the calculation of fair value for share purchase options. The Company’s shares have not been publicly traded for a sufficient length of time to solely use the Company’s performance to reasonably estimate the expected volatility. Therefore, when estimating the expected volatility, the Company takes into consideration the historical volatility of similar entities. The Company considers factors such as an entity’s industry, stage of life cycle, size and financial leverage when selecting similar entities. The Company uses a sample peer group of companies in the reinsurance industry as well as the Company’s own historical volatility in determining the expected volatility. Additionally, the Company uses the full life of the options, ten years, as the estimated term of the options, and has assumed no forfeitures during the life of the options.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Because we are a smaller reporting company, we are not required to provide this information.

Item 4.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our Chief Executive Officer (our principal executive officer) and our Financial Controller (our principal financial officer), we have evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and our Financial Controller have concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1.

Legal Proceedings

We are not currently involved in any litigation or arbitration. We anticipate that, similar to the rest of the insurance and reinsurance industry, we will be subject to litigation and arbitration in the ordinary course of business.

Item 1A.

Risk Factors

There have been no material changes to the risk factors previously disclosed in the section entitled “Risk Factors” in our Form 10-K, which was filed with the Securities and Exchange Commission on March 18, 2015.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

(a) Sales of Unregistered Securities

None.

(b) Repurchases of Equity Securities

None.

(c) Use of Proceeds

None.

Item 3.

Defaults Upon Senior Securities

None.

Item 4.

Mine Safety Disclosures

Not applicable.

Item 5.

Other Information

None.

Item 6.

Exhibits

The following exhibits are filed herewith:


Exhibit No.		Document

31.1		Certifications of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934.

31.2		Certifications of the Financial Controller pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934.

32		Written Statement of the Chief Executive Officer and Financial Controller pursuant to 18 U.S.C. §1350.

101		The following materials from Oxbridge Re Holdings Limited’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 are filed herewith, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Changes in Shareholders’ Equity and (vi) the Notes to Consolidated Financial Statements.

SIGNATURES

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


	OXBRIDGE RE HOLDINGS LIMITED

Date: November 11, 2015		By:	/s/ JAY MADHU
			Jay Madhu
			Chief Executive Officer and President
			(Principal Executive Officer)

Date: November 11, 2015		By:	/s/ WRENDON TIMOTHY
			Wrendon Timothy
			Financial Controller and Secretary
			(Principal Financial Officer and Principal Accounting Officer)