Company: FRFXF
Filing Date: 2025-10-09
Form Type: F-10/A
Source: 0001104659-25-098335
Chunk: 79

Company: FAIRFAX FINANCIAL HOLDINGS LTD/ CAN
Filing Date: 2025-10-09
Form: F-10/A
Chunk 79
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TABLE OF CONTENTS

comply with these laws and regulations may cause non-conforming investments to be treated as non-admitted assets for purposes of measuring statutory surplus and, in some instances, would require divestiture. As of the date of this short form prospectus, we believe our investments comply with such laws and regulations in all material respects.

#### Credit for Reinsurance and Licensing
A primary insurer ordinarily will enter into a reinsurance agreement only if it can obtain credit for the reinsurance ceded on its U.S. statutory financial statements. In general, credit for reinsurance is allowed in the following circumstances: (1) if the reinsurer is licensed in the state in which the primary insurer is domiciled; (2) if the reinsurer is an “accredited” or otherwise approved reinsurer in the state in which the primary insurer is domiciled; (3) in some instances, if the reinsurer (a) is domiciled in a state that is deemed to have substantially similar credit for reinsurance standards as the state in which the primary insurer is domiciled and (b) meets certain financial requirements; or (4) if none of the above apply, to the extent that the reinsurance obligations of the reinsurer are collateralized appropriately, typically through the posting of a letter of credit for the benefit of the primary insurer, the deposit of assets into a trust fund established for the benefit of the primary insurer, or by the primary insurer retaining as collateral for the reinsurer’s obligations, assets that would otherwise be transferred by the primary insurer to the reinsurer as consideration for the reinsurance. With respect to reinsurance collateral requirements, states have adopted provisions of the NAIC Credit for Reinsurance Model Law and Regulation that allow full credit to U.S. ceding insurers for reinsurance ceded to qualified reinsurers (called “certified reinsurers” or “Reciprocal Jurisdiction Reinsurers”) that do not otherwise satisfy the state’s credit for reinsurance requirements based upon less than 100% collateralization. Under those provisions, collateral requirements may be reduced or eliminated for reinsurers meeting certain criteria as to financial strength and reliability that are domiciled in “qualified” or “reciprocal” jurisdictions. The NAIC reports that all 50 states have adopted the provisions of the NAIC Credit for Reinsurance Model Law and Regulation that provide for these reduced or eliminated reinsurance collateral requirements.

While the elimination or reduction of regulatory requirements for collateral for reinsurance ceded to Reciprocal Jur