Company: FRFXF
Filing Date: 2025-03-26
Form Type: 424B3
Source: 0001104659-25-028272
Chunk: 81

Company: FAIRFAX FINANCIAL HOLDINGS LTD/ CAN
Filing Date: 2025-03-26
Form: 424B3
Chunk 81
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 the purposes of, these two activities (article 14 of the Financial Services Act 2012 (Transitional
Provisions) (Permission and Approval) Order 2013).

The Council of Lloyd’s
(“Council”) is the governing body of the Lloyd’s market, and under the Lloyd’s Act 1982 (the “1982 Act”), it is responsible for the market’s management and supervision. Under the 1982 Act, the Council has the power to
regulate and direct the business of the market, and to make by-laws. Lloyd’s market rules are set out in the by-laws, and
in other guidance, codes of conduct, bulletins and principles issued by the Council or under its authority, although regulation of the
Lloyd’s market is under the ultimate direction of the PRA and the FCA.

Lloyd’s does not carry
on insurance activity itself, but regulates its members doing so. Members of Lloyd’s form and underwrite all insurance business
via syndicates which consist of one or more such members. Lloyd’s supervises its own members (including in relation to setting
the amount of capital required to be provided by each member to support its underwriting liabilities) under the direction of the PRA
and the FCA. Members are not required to be authorized under FSMA, but must abide by the Lloyd’s rules, which means that the PRA
and the FCA indirectly regulate members (given that Lloyd’s itself is a dual-regulated firm). Under sections 316 and 318 of FSMA,
the PRA and the FCA can give directions to Lloyd’s or its members in order to advance one or more of their statutory objectives,
for example by imposing particular rules on members. Lloyd’s has a memorandum of understanding with the PRA and the FCA to
assist with cooperation in supervision and enforcement.

As regards to prudential
requirements, the rules in the Solvency II UK Firms section of the PRA Rulebook apply to Lloyd’s and its managing agents as
a whole with some modifications (see “Prudential and Capital Requirements” below).

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Syndicates are managed by
managing agents who are authorized by the PRA and regulated by the PRA and the FCA.

Regulation of Lloyd’s Managing Agents

Under section 19 of
FSMA, it is unlawful to carry on the regulated business of being a Lloyd’s managing agent in the United Kingdom