Company: FRFXF
Filing Date: 2025-03-26
Form Type: 424B3
Source: 0001104659-25-028272
Chunk: 95

Company: FAIRFAX FINANCIAL HOLDINGS LTD/ CAN
Filing Date: 2025-03-26
Form: 424B3
Chunk 95
---
Our Bermuda licensed insurers
and reinsurers are subject to the Insurance Act 1978 of Bermuda and the applicable rules and regulations promulgated thereunder,
each as amended (the “Bermuda Insurance Act”). The Bermuda Insurance Act imposes solvency and liquidity standards
as well as auditing and reporting requirements on Bermuda insurers and reinsurers. It also empowers the Bermuda Monetary Authority (“BMA”)
to supervise, investigate and intervene in the affairs of these entities. There are a number of remedial actions available to the BMA
in order to protect the public interest if the BMA determines that a Bermuda insurer or reinsurer may become insolvent or that a breach
of the Bermuda Insurance Act or of any of the conditions of registration on a Bermuda insurer or reinsurer has occurred or is about to occur.

<div align='center'>- 55 -</div>

Our material Bermuda (re)insurer
is registered as a Class 4 (re)insurer under the Bermuda Insurance Act.

In addition to maintaining
a principal office in Bermuda and appointing specified officers, the summary below comprises the material aspects of the insurance regulatory
framework in Bermuda applicable to Class 4 (re)insurers under the Bermuda Insurance Act with which our material Bermuda (re)insurer
must comply.

Solvency and Capital Standards

The Bermuda Insurance Act
provides that the value of the statutory assets of a (re)insurer must exceed the value of its statutory liabilities by an amount greater
than its prescribed minimum solvency margin (“MSM”). The MSM that must be maintained by a Class 4 (re)insurer
is the greater of:

| (i) | $100,000,000; |

| (ii) | 50% of net premiums written (with a credit                 
 of reinsurance ceded not exceeding 25% of gross premiums); |

| (iii) | 15% of net losses and loss expense reserves; 
 or                                           |

| (iv) | 25% of the (re)insurer’s enhanced 
 capital requirement.              |

Class 4 (re)insurers
are also required to maintain available statutory economic capital and surplus equal to or in excess of their “enhanced capital
requirement” (“ECR”) as determined by the BMA under the Bermuda Solvency Capital Requirement model (the “BSCR model”). The BSCR model is a risk-based capital model that establishes an enhanced capital requirement and total capital level
by taking into account