Company: FRFXF
Filing Date: 2025-03-26
Form Type: 424B3
Source: 0001104659-25-028272
Chunk: 76

Company: FAIRFAX FINANCIAL HOLDINGS LTD/ CAN
Filing Date: 2025-03-26
Form: 424B3
Chunk 76
---
 Federal Reserve Board, the Federal Insurance Office, the Financial Stability
Oversight Council, the U.S. Department of the Treasury, the Executive Office of the President and the NAIC. We cannot predict whether
any specific state or federal measures will be adopted to change the nature or scope of the regulation of insurance or what effect any
such measures would have on Fairfax and its U.S. operating insurance subsidiaries.

Finally, the ongoing investigations
and scrutiny of insurance industry business practices, discussed above, may result in new laws or regulations at the state or federal
level. See “Risk Factors — Risk Factors Relating to Our Business — Certain business practices of the insurance industry
have been the subject of negative publicity and investigations by government authorities and the subject of class action litigation”.

It is not possible to predict
the outcome of any of the foregoing legislative, administrative or congressional activities or the potential effects thereof on us.

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Canada</div>

General

Each of our Canadian insurance
subsidiaries is federally incorporated under the Insurance Companies Act (“ICA”) and is licensed under insurance legislation
in each of the provinces and territories in which it operates.

The ICA and provincial legislation
require the filing by our Canadian insurance subsidiaries of annual and other reports on their financial condition and results. The ICA
imposes restrictions on transactions with related parties and sets forth requirements governing reserves for actuarial liabilities and
the safekeeping of assets and other matters. The ICA is administered, and the activities of our insurance subsidiaries are supervised,
by the Office of the Superintendent of Financial Institutions (“OSFI”). OSFI conducts examinations to ensure compliance
with the ICA and to confirm the financial condition of the companies.

Investment Powers

Under the ICA, the directors
of a federally incorporated insurance company must establish and the insurance company must adhere to investment and lending policies,
standards and procedures that a reasonable and prudent person would apply to a portfolio of investments and loans to avoid undue risk
of loss and obtain a reasonable return, subject to certain overall limitations on the amount it may invest in certain classes of investments,
such as commercial loans, real estate and equities. Additional restrictions (and in some cases, the need for regulatory approvals) limit
the nature of an insurance company’s investments.

Capital Requirements

Property and casualty insurers
are required to meet a Minimum Capital Test (“MCT”) that assesses the insurer’s capital available to capital
required. Federally regulated property and casualty insurers, including our Canadian insurance