Company: FRFXF
Filing Date: 2025-10-09
Form Type: F-10/A
Source: 0001104659-25-098335
Chunk: 107

Company: FAIRFAX FINANCIAL HOLDINGS LTD/ CAN
Filing Date: 2025-10-09
Form: F-10/A
Chunk 107
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 relevant liabilities. Relevant assets include cash and time deposits, quoted investments, unquoted bonds and debentures, first liens on real estate, investment income due and accrued, accounts and premiums receivable, reinsurance balances receivable, funds held by ceding reinsurers and any other assets which the BMA, on application in any particular case made to it with reasons, accepts in that case.

There are certain categories of assets which, unless specifically permitted by the BMA, do not automatically qualify as relevant assets, such as unquoted equity securities, investments in and advances to affiliates and real estate, and collateral loans.

The relevant liabilities are total general business insurance reserves and total other liabilities less deferred income taxes and letters of credit, guarantees and other instruments.

#### Eligible Capital
Our material Bermuda (re)insurer is required to disclose the makeup of its capital under a “three-tiered capital system.” Under this system, capital instruments are classified as either “basic” or “ancillary” capital, and are further classified into one of three tiers based on “loss absorbency” characteristics, as prescribed in the Insurance (Eligible Capital) Rules 2012, as amended (the “

#### Eligible Capital Rules
”). Highest quality capital is classified as Tier 1 Capital; lesser quality capital is classified as either Tier 2 Capital or Tier 3 Capital. Under this regime, up to certain specified percentages of Tier 1, Tier 2 and Tier 3 Capital (as specified in the Eligible Capital Rules) may be used to support a Class 4 (re)insurer’s MSM, ECR and TCL.

#### Restrictions on Dividends and Distributions
As a Class 4 (re)insurer, our material Bermuda (re)insurer is prohibited from declaring or paying dividends if it is, or if the declaration or payment of such dividend would cause it to be, in breach of its MSM, MLR or ECR. Moreover, where a Class 4 (re)insurer fails to meet its MSM or MLR on the last day of any financial year, it will be prohibited from declaring or paying any dividends during the next financial year without the prior approval of the BMA.

In addition, as a Class 4 (re)insurer, our material Bermuda (re)insurer is prohibited from declaring or paying in any financial year dividends of more than 25% of its total statutory capital and surplus (as shown in

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