Company: FRFXF
Filing Date: 2025-10-09
Form Type: F-10/A
Source: 0001104659-25-098335
Chunk: 94

Company: FAIRFAX FINANCIAL HOLDINGS LTD/ CAN
Filing Date: 2025-10-09
Form: F-10/A
Chunk 94
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 are “Certification Functions” and include those functions that are considered to be Key Functions under the Solvency II Directive (as implemented into law in the United Kingdom).

All staff in each of the managing agents, save for those who are in roles such as catering or security (where they cannot pose a risk to the business or its customers), must comply with individual conduct rules. SMF holders must comply with additional conduct rules relating to regulatory objectives.

Prudential and Capital Requirements

As noted above, we principally operate in the United Kingdom through the Lloyd’s market. Lloyd’s capital structure, often referred to as the “chain of security,” is intended to provide a high degree of security for policyholders. There are three parts to the “chain of security”:

(i)

Syndicate level assets : The insurance premiums that are collected by members and held in a premium trust fund for the benefit of policyholders whose contracts are underwritten by the syndicate. These monies are the first resource used for paying claims made by the members’ policyholders from that syndicate.

(ii)

Funds at Lloyd’s : Each member must provide capital to support its underwriting at Lloyd’s. This capital is held in trust as a buffer to back up each member’s underwriting liabilities in each syndicate in which it is a member. The amount of capital to be provided by each member is determined by reference to the rules on the Solvency Capital Requirement (“

#### SCR
”) contained in the Solvency II UK Firms section of the PRA Rulebook, which apply to Lloyd’s and to its managing agents. Lloyd’s requires managing agents to determine the SCR on an ultimate basis (“

#### uSCR
”) for each syndicate they manage (described in greater detail below). Lloyd’s then applies an “Economic Capital Uplift” to each uSCR and the resulting figure is used to calculate each member’s capital resources requirement in proportion to its share of each syndicate of which it is a member. Details of how a member’s capital requirement is calculated are set out in the Lloyd’s Membership & Underwriting Conditions and Requirements: Funds at Lloyd’s.

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(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