Company: FRFXF
Filing Date: 2025-10-09
Form Type: F-10/A
Source: 0001104659-25-098335
Chunk: 31

Company: FAIRFAX FINANCIAL HOLDINGS LTD/ CAN
Filing Date: 2025-10-09
Form: F-10/A
Chunk 31
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 are owed to us or failure by our insureds to reimburse us for deductibles that are paid by us on their behalf.

Various insurance intermediaries collect premiums from our customers, which they then remit to us. We may be required to provide insurance coverage even if an intermediary fails to pay us. In addition, we write

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certain insurance policies, such as large deductible policies (policies where the insured retains a specific amount of any potential loss), in which the insured must reimburse us for certain losses. Accordingly, we bear credit risk on these policies and cannot assure you that intermediaries of our insureds will pay us on a timely basis or at all.

If our insurance and reinsurance subsidiaries are unable to maintain financial strength ratings, it may be more difficult for them to renew policies, retain business or write new business and a downgrade of our credit rating may affect the cost and availability of financing.

Financial strength and credit ratings by major North American rating agencies are important factors in establishing competitive position for insurance and reinsurance companies. Third-party rating agencies assess and rate the claims-paying ability of reinsurers and insurers based upon the criteria of such rating agencies. Periodically, the rating agencies evaluate our insurance and reinsurance subsidiaries to confirm that they continue to meet the criteria of the ratings previously assigned to them. The claims-paying ability ratings assigned by rating agencies to insurance or reinsurance companies represent independent opinions of financial strength and ability to meet policyholder obligations. A downgrade in these ratings could lead to a significant reduction in the number of insurance policies our insurance subsidiaries write and could cause early termination of contracts written by our reinsurance subsidiaries or a requirement for them to post collateral at the direction of their counterparties.

A downgrade in our long-term debt ratings by the major rating agencies could require us and/or our subsidiaries to accelerate our or their cash settlement obligations for certain derivative transactions to which we or they are a party and could result in the termination of certain other derivative transactions. In addition, a downgrade of our credit rating may affect the cost and availability of unsecured financing. Ratings are subject to periodic review at the discretion of each respective rating agency and may be revised downward or revoked at their sole discretion. Rating agencies may also increase their scrutiny of rated companies, revise their rating standards or take other action. We have dedicated personnel that manage our relationships with our various rating agencies, however, there can be no assurance that these activities will avoid a downgrade by rating agencies. We can provide no assurance that we will