Company: FRFXF
Filing Date: 2025-10-01
Form Type: F-10
Source: 0001104659-25-095645
Chunk: 78

Company: FAIRFAX FINANCIAL HOLDINGS LTD/ CAN
Filing Date: 2025-10-01
Form: F-10
Chunk 78
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IC has developed a group capital calculation tool using an RBC aggregation methodology. The group capital calculation is designed to assist state insurance regulators in understanding the financial condition of non-insurance entities that are part of an insurance holding company system and the degree to which insurance companies are supporting those non-insurance entities. In 2020, the NAIC adopted amendments to the Model Insurance Holding Company System Regulatory Act and the Insurance Holding Company System Model Regulation that implement the group capital calculation by requiring the ultimate controlling person of an insurer subject to registration to file the group capital calculation with its lead state regulator. The first annual group capital calculation filing was due in Delaware, our lead state, by June 1, 2023.

In 2019, the International Association of Insurance Supervisors (“

#### IAIS
”) adopted the Common Framework for Supervision of Internationally Active Insurance Groups (“

#### ComFrame
”) to establish minimum standards for the supervision of internationally active insurance groups (“

#### IAIGs
”). IAIS members (including supervisors of various Fairfax insurance subsidiaries) have committed to implementing ComFrame and the IAIS is expected to assess each IAIS member’s compliance with ComFrame requirements going forward. Fairfax has been designated as an IAIG with the Delaware Insurance Commissioner as its group-wide supervisor.

ComFrame includes an Insurance Capital Standard (“

#### ICS
”), a risk-based, group-wide capital standard for IAIGs. Effective as of January 1, 2025, IAIS members are required to implement ICS as a group-wide prescribed capital requirement for IAIGs or a group-wide capital requirement that provides comparable outcomes to ICS. The IAIS has determined that the aggregation methodology used in the NAIC’s group capital calculation provides comparable outcomes to the ICS. The impact of ICS and the group capital calculation on the Company are uncertain; however, they may result in an increase in the level of capital and liquidity required by insurance holding companies.

#### NAIC IRIS Ratios
The NAIC has developed a set of financial relationships or “tests” called the Insurance Regulatory Information System (“

#### IRIS
”) that was designed to facilitate early identification of companies that may warrant special attention by insurance regulatory authorities. IRIS identifies 13 industry ratios (referred to as “IRIS ratios”) and specifies “usual ranges” for each ratio. An IRIS ratio that falls outside the usual range is not necessarily considered adverse. An insurance company may fall out of the usual range for one or more ratios because of specific transactions that are