Company: FRFXF
Filing Date: 2025-10-01
Form Type: F-10
Source: 0001104659-25-095645
Chunk: 95

Company: FAIRFAX FINANCIAL HOLDINGS LTD/ CAN
Filing Date: 2025-10-01
Form: F-10
Chunk 95
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TABLE OF CONTENTS

(iii)

Mutual assets (Central Fund and callable layer) : Members make annual contributions to the Central Fund which can be used to pay out in relation to the claims against any member who fails to meet its insurance liabilities in full. In addition, this is supplemented by a “callable layer” of up to 5% of members’ overall premium limits which Lloyd’s can call upon to meet claims.

When calibrating the SCR, Lloyd’s is required to include, in addition to the risks impacting its members, all quantifiable risks to which Lloyd’s itself is exposed, including risks to its central assets and central liabilities. Lloyd’s and its managing agents must also comply with requirements to conduct own risk and solvency assessments and to report, as set out in, respectively, the Conditions Governing Business and the Reporting parts of the Solvency II UK Firms section of the PRA Rulebook.

As dual-regulated firms in their own right, managing agents are under an obligation to manage the syndicate assets and the insurance business carried on by members of the syndicate in accordance with the Solvency II UK Firms section of the PRA Rulebook. This requires managing agents to ensure that the financial resources for each syndicate they manage and the capital resources at syndicate level are adequate, and that they establish and maintain systems and controls for the management of prudential, credit, market, operational and insurance risks for each syndicate.

Managing agents must calculate capital resources at syndicate level under the rules in the Solvency II UK Firms section of the PRA Rulebook and, in particular, must calculate an SCR for each syndicate (which captures the risks that will emerge over the next 12 months) and a uSCR (to capture potential adverse developments which may arise until all liabilities have been paid). The SCR and uSCR take into account the risks, controls and financial resources available to each syndicate, and are notified to Lloyd’s periodically.

Managing agents are also subject to their own regulatory capital requirements, comprising both a minimum qualifying capital requirement and minimum net asset requirement.

Conduct of Business

The FCA’s conduct of business requirements for managing agents can be found in the Insurance: Conduct of Business Sourcebook of the FCA Handbook (“

#### ICOBS
”). These rules regulate the day-to-day conduct of business standards to be observed by managing agents involved in insurance distribution activities and/or the activity of managing the underwriting capacity of a Lloyd