Company: FRFXF
Filing Date: 2025-03-14
Form Type: F-4
Source: 0001104659-25-024010
Chunk: 95

Company: FAIRFAX FINANCIAL HOLDINGS LTD/ CAN
Filing Date: 2025-03-14
Form: F-4
Chunk 95
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CA provided a representative sample of business interruption policies to the
High Court and asked it to determine whether on the basis of certain agreed and assumed facts: (a) the policies provide cover in
principle; and (b) the policyholders of the policies can establish the necessary causal link (as a matter of the application of
the law and the wording of the policies) between the assumed losses sustained by policyholders and any relevant peril, event or circumstance
that is covered by relevant terms in the policies. The hearing took place in late July 2020 and judgment was handed down at first
instance on September 15, 2020 (FCA v Arch Insurance (UK) Ltd and others [2020] EWHC 244).

In January 2021, the
U.K. Supreme Court handed down judgment on appeal which was ‘leapfrogged’ from the decision of the High Court (FCA v
Arch Insurance (UK) Ltd and others [2021] UKSC 1). The judgment is legally binding on the insurers that were parties to the case in respect
of interpreting the business interruption policy wordings considered. The decision provides persuasive guidance for the interpretation
of similar policy wordings and claims that can be taken into account by the court, the FOS and the FCA. The FCA has also introduced new
guidance setting out its expectation that insurers should apply the judgment in assessing or reassessing all outstanding or rejected
claims and complaints that may be affected by the test case (except those that have been referred to the FOS). The FCA has estimated
that the judgment affects around 370,000 policyholders who are able to recover losses relating to business interruption due to COVID-19,
but the implications of the decision go beyond the pandemic and will impact other business interruption claims. The judgment has changed
the law in respect of various terms applied in business interruption policies such as trends clauses with the effect that higher settlement
figures should be anticipated.

<div align='center'>Bermuda</div>

General

Our Bermuda licensed insurers
and reinsurers are subject to the Insurance Act 1978 of Bermuda and the applicable rules and regulations promulgated thereunder,
each as amended (the “Bermuda Insurance 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