Company: FRFXF
Filing Date: 2025-10-01
Form Type: F-10
Source: 0001104659-25-095645
Chunk: 106

Company: FAIRFAX FINANCIAL HOLDINGS LTD/ CAN
Filing Date: 2025-10-01
Form: F-10
Chunk 106
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 Act
”). The Bermuda Insurance Act imposes solvency and liquidity standards as well as auditing and reporting requirements on Bermuda insurers and reinsurers. It also empowers the Bermuda Monetary Authority (“

#### BMA
”) to supervise, investigate and intervene in the affairs of these entities. There are a number of remedial actions available to the BMA in order to protect the public interest if the BMA determines that a Bermuda insurer or reinsurer may become insolvent or that a breach of the Bermuda Insurance Act or of any of the conditions of registration on a Bermuda insurer or reinsurer has occurred or is about to occur.

Our material Bermuda (re)insurer is registered as a Class 4 (re)insurer under the Bermuda Insurance Act.

In addition to maintaining a principal office in Bermuda and appointing specified officers, the summary below comprises the material aspects of the insurance regulatory framework in Bermuda applicable to Class 4 (re)insurers under the Bermuda Insurance Act with which our material Bermuda (re)insurer must comply.

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TABLE OF CONTENTS

#### Solvency and Capital Standards
The Bermuda Insurance Act provides that the value of the statutory assets of a (re)insurer must exceed the value of its statutory liabilities by an amount greater than its prescribed minimum solvency margin (“

#### MSM
”). The MSM that must be maintained by a Class 4 (re)insurer is the greater of:

(i)

$100,000,000;

(ii)

50% of net premiums written (with a credit of reinsurance ceded not exceeding 25% of gross premiums);

(iii)

15% of net losses and loss expense reserves; or

(iv)

25% of the (re)insurer’s enhanced capital requirement.

Class 4 (re)insurers are also required to maintain available statutory economic capital and surplus equal to or in excess of their “enhanced capital requirement” (“

#### ECR
”) as determined by the BMA under the Bermuda Solvency Capital Requirement model (the “

#### BSCR model
”). The BSCR model is a risk-based capital model that establishes an enhanced capital requirement and total capital level by taking into account risk characteristics specific to an insurer’s or reinsurer’s business. The BMA also has established a target capital level (“

#### TCL
”) equal to 120% of the (re)insurer’s ECR. The TCL serves as an early warning tool for the BMA and failure to maintain statutory capital