Company: FRFXF
Filing Date: 2025-03-14
Form Type: F-4
Source: 0001104659-25-024010
Chunk: 98

Company: FAIRFAX FINANCIAL HOLDINGS LTD/ CAN
Filing Date: 2025-03-14
Form: F-4
Chunk 98
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 Class 4
(re)insurer, our material Bermuda (re)insurer is prohibited from declaring or paying in any financial year dividends of more than 25%
of its total statutory capital and surplus (as shown in its previous financial year’s statutory balance sheet) unless it files (at
least seven days before payment of such dividends) an affidavit with the BMA stating that it will continue to meet its MSM and MLR.

Additionally, under the Companies
Act 1981 of Bermuda (the “Bermuda Companies Act”), no Bermuda company may declare or pay a dividend, or make a distribution
out of contributed surplus, if there are reasonable grounds for believing that: (a) the company is, or would after the payment, be,
unable to pay its liabilities as they become due, or (b) the realizable value of its assets would thereby be less than its liabilities.

Reduction of Capital

No Class 4 (re)insurer
may reduce its total statutory capital by 15% or more, as set out in its previous year’s financial statements, unless it has received
the prior approval of the BMA. Total statutory capital consists of the insurer’s paid-in share capital, its contributed surplus
(sometimes called additional paid-in capital) and any other fixed capital designated by the BMA as statutory capital (such as letters
of credit).

A Class 4 (re)insurer
seeking to reduce its statutory capital by 15% or more, as set out in its previous year’s financial statements, is also required
to submit an affidavit to the BMA stating that the proposed reduction will not cause the insurer to fail its relevant margins and such
other information as the BMA may require.

Insurance Code of Conduct

Our material Bermuda (re)insurer
must comply with the BMA’s Insurance Code of Conduct (the “Bermuda Insurance Code”), which prescribes the duties,
standards, procedures and sound business principles with which all companies registered under the Bermuda Insurance Act must comply.

Failure to comply with the
requirements of the Bermuda Insurance Code will be taken into account by the BMA in determining whether an insurer is conducting its business
in a sound and prudent manner as prescribed by the Bermuda Insurance Act and may result in the BMA exercising its powers of intervention
and investigation (see below) and will be a factor in calculating the operational risk charge under the insurer’s BSCR or approved
internal model.

Cyber Code of Conduct

Our material Bermuda (re