Company: FRFXF
Filing Date: 2025-03-14
Form Type: F-4
Source: 0001104659-25-024010
Chunk: 76

Company: FAIRFAX FINANCIAL HOLDINGS LTD/ CAN
Filing Date: 2025-03-14
Form: F-4
Chunk 76
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 2019 through December 31, 2027. Under the current program (i) the threshold for the program to
go into effect (the triggering event) is $200 million in insured losses, (ii) the insurer deductible is 20% of the insurer’s
affiliated group’s direct earned premium for the prior year from qualified property and casualty insurance lines, and (iii) the
amount that insurers must cover as a whole through co-payments and deductibles, which is known in the industry as the aggregate retention,
is $37.5 billion. TRIA is applicable to almost all commercial lines of property and casualty insurance, but excludes commercial
auto, burglary and theft, surety, professional liability and farm owners’ multi-peril insurance. Insurers with direct commercial
property and casualty insurance exposure in the United States are required to participate in the program and make available coverage
for certified acts of terrorism. Federal participation will be triggered when the Secretary of the Treasury certifies an act of terrorism.

While the provisions of
TRIA and the purchase of certain terrorism reinsurance coverage mitigate our exposure in the event of a large-scale terrorist attack,
the risk of severe losses to us from acts of terrorism remains because our effective deductible is significant, certain lines that we
write are not covered by TRIA and there is no certainty that future acts of terrorism will be certified as such by the Secretary of the
Treasury. There is also no certainty that the program will be extended beyond December 31, 2027, or, if it is extended, that the
program will provide coverage in the same amounts and on the same terms. Moreover, regardless of TRIA, some state insurance regulators
do not permit terrorism exclusions for various coverages or causes of loss. Accordingly, we continue to carefully monitor our concentrations
of risk.

Possible Legislative, Regulatory and Policy Changes

In recent years, the insurance
industry has been subject to increased scrutiny by legislators, regulators and policymakers. As noted above, the NAIC and a number of
state legislatures have considered or adopted legislative proposals that alter and, in many cases, increase the authority of state regulators
to regulate insurance companies and holding company systems. Additional regulations or new requirements may emerge from activities of
various regulatory and policymaking bodies, including the Federal Reserve Board, the Federal Insurance Office, the Financial Stability
Oversight Council, the U.S. Department of the Treasury, the Executive Office of the President and the NAIC. We cannot predict whether