##### 



SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549
   FORM 11-K ANNUAL REPORT   x ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003 OR o TRANSITION REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from  to Commission file
number 333-84068 A. Full title of the plan and
address of the plan, if different from that of the issuer named below: The Individual Retirement Plan of
United States Fire Insurance Company
305 Madison Avenue
Morristown, New Jersey
07962 B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: Fairfax Financial Holdings Limited
95 Wellington Street West
Suite 800
Toronto, Ontario
M5J 2N7




---



##### 



THE INDIVIDUAL RETIREMENT PLAN OF
UNITED STATES FIRE INSURANCE COMPANY FORM 11-K INDEX Page(s)Report of Independent Registered Public Accounting Firm
    
    
    1Financial StatementsStatements of Net Assets Available for Benefits
    
    
    2Statement of Changes in Net Assets Available for Benefits
    
    
    3Notes to Financial Statements
    
    
    4Schedule H, Line 4(i), Schedule of Assets (Held at End of Year)
    
    
    10Signatures
    
    
    11Exhibit Index
    
    
    12Exhibit 23 - Consent of Independent Registered Public Accounting Firm
 i




---



##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Participants and Plan Administrator of
The Individual Retirement Plan of United States Fire Insurance Company In our opinion, the accompanying statements of net assets available for
benefits and the related statement of changes in net assets available for
benefits present fairly, in all material respects, the net assets available for
benefits of The Individual Retirement Plan of United States Fire Insurance
Company (the Plan) at December 31, 2003 and 2002, and the changes in net
assets available for benefits for the year ended December 31, 2003 in
conformity with accounting principles generally accepted in the United States
of America. These financial statements are the responsibility of the Plans
management. Our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion. Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental Schedule of Assets
(Held at End of Year) is presented for the purpose of additional analysis and
is not a required part of the basic financial statements but is supplementary
information required by the Department of Labors Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The supplemental schedule is the responsibility of the Plans
management. The supplemental schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.  /s/  PricewaterhouseCoopers LLP New York, New York
June 18, 2004 1




---



##### 



THE INDIVIDUAL RETIREMENT PLAN OF
UNITED STATES FIRE INSURANCE COMPANY STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS December 31,2003
    
    2002ASSETSInvestments at fair value
    
    $
    93,804,431
    
    
    $
    81,680,243Employer contribution receivable
    
    
    2,149,960
    
    
    
    1,917,212Net assets available for benefits
    
    $
    95,954,391
    
    
    $
    83,597,455
    The accompanying notes are an integral part of these financial statements. 2




---



##### 



THE INDIVIDUAL RETIREMENT PLAN OF
UNITED STATES FIRE INSURANCE COMPANY STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS For the Year EndedDecember 31, 2003Additions to net assets attributed to:Investment income:Dividends
    
    $
    1,670,968Interest on loans to participants
    
    
    118,904Net appreciation in fair value of investments
    
    
    13,786,109Net investment income
    
    
    15,575,981Contributions:Participant
    
    
    4,856,974Employer
    
    
    3,470,3388,327,312Total additions
    
    
    23,903,293Deductions from net assets attributed to:Benefits paid to participants
    
    
    (11,401,049
    )Administrative expenses
    
    
    (145,308
    )Total deductions
    
    
    (11,546,357
    )Net increase
    
    
    12,356,936Net assets available for benefits, beginning of year
    
    
    83,597,455Net assets available for benefits, end of year
    
    $
    95,954,391
    The accompanying notes are an integral part of these financial statements. 3




---



##### 



THE INDIVIDUAL RETIREMENT PLAN OF
UNITED STATES FIRE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS  (1)
    
    Description of the PlanThe following description of The Individual Retirement Plan of United States
Fire Insurance Company (the Plan) is provided for general information
purposes only. Participants should refer to the Plan document, which legally
governs the Plan, for a complete description of the Plans provisions.GeneralOn August 13, 1998, United States Fire Insurance Company (the Company), a
participating employer of The Individual Retirement Plan of Talegen Holdings,
Inc. (the Talegen Plan), was purchased by Fairfax Financial Holdings Limited
(Fairfax). Effective August 13, 1998 (the Effective Date), the Company
adopted the Plan. Effective August 31, 1998, all assets, liabilities and account
balances maintained under the Talegen Plan for the benefit of Company employees
were transferred to the Plan.The Plan is a participant-directed, defined contribution plan covering eligible
employees and former employees of the Company. An eligible employee as of the
Effective Date was both a participant in the Talegen Plan on the day before the
Effective Date and an employee of the Company on the Effective Date. Prior to
April 1, 1999, other employees of the Company became eligible after completing
one year of service. Effective April 1, 1999, the Plan was amended to make all
existing and future employees of the Company immediately eligible to join the Plan. The
amendment allowed employees to contribute to the Plan and receive the Company
basic contribution. Eligibility for Company matching contributions requires
one year of service. The Plan is a profit sharing plan with a cash or deferred
arrangement that is intended to qualify under Sections 401(a) and 401(k) of the
Internal Revenue Code of 1986, as amended. Participants may save on an
after-tax basis, a tax-deferred basis or a combination of both. Participation
in the Plan is voluntary and eligible employees are permitted to contribute to
the Plan systematically through payroll deductions. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974, as amended
(ERISA).Effective August 31, 2000, following the acquisition of Sen-Tech International
Holdings, Inc. (Seneca) by The North River Insurance Company, an affiliate of
the Company, the employees of Seneca became eligible for participation in the
Plan.Effective January 1, 2001, the employees of Fairfax Information Technology
Services, Inc. (FITS), a wholly owned subsidiary of Fairfax, became eligible
for participation in the Plan.AdministrationThe Plan is administered by the Plans Administrative Committee and Finance
Committee. The Company appointed AMVESCAP National Trust Company (AMVESCAP)
as trustee for the Plan. Certain recordkeeping and other administrative
services under the Plan are provided by AMVESCAP Retirement, Inc.ContributionsEligible employees may participate by electing to contribute between 1% and 20%
of their salaries, as defined by the Plan document. Prior to January 1, 2002,
the maximum rate of before-tax and/or after-tax contributions that any
participant could make to the Plan was 12%. Company contributions include: (i)
a regular basic contribution at the end of the Plan year equal to 3% of
salaries, as defined by the Plan document, for all employees on the last day of the Plan year or who
terminated their employment during the Plan year due to retirement, 4




---



##### 



death or disability; (ii) a regular matching contribution equal to 50% of
participants contributions, excluding contributions in excess of 6% of
salaries; and (iii) at the sole discretion of the Company, an
additional basic
contribution and/or an additional matching contribution for a Plan year. The
Company made no discretionary additional contributions in 2003.Catch-Up ContributionsOn September 30, 2002, the Plan began allowing eligible participants who attain
age 50 in a particular calendar year to make additional catch-up
contributions permitted by the Economic Growth & Tax Relief Reconciliation Act,
effective January 1, 2002. Catch-up contributions are not eligible for the
matching Company contribution.Participant AccountsEach participants account is credited with the participants contribution,
employer contributions made on the participants behalf and Plan earnings,
which are allocated proportionately among all participants based on their
investment in each fund. Withdrawals by or distributions to the participant,
as such terms are defined in the Plan document, reduce a participants account.VestingParticipants are immediately vested in their contributions, Company basic
contributions and actual earnings thereon. A participant who was employed by
the Company or an affiliated company prior to July 1, 1993 or a participant who
was employed by the Company or an affiliated company on or before August 13,
1998 and had their account balance transferred to the Plan, is 100% vested in,
and has a non-forfeitable right to, Company matching contributions. A
participant hired by the Company after August 13, 1998 is vested in Company
matching contributions in accordance with the following schedule: Less than one year of service
    
    0% vestedOne year of service but less than two years of service
    
    20% vestedTwo years of service but less than three years of service
    
    40% vestedThree years of service but less than four years of service
    
    60% vestedFour years of service but less than five years of service
    
    80% vestedFive or more years of service
    
    100% vested
  Additionally, a participant becomes 100% vested in Company matching
contributions if the participant becomes totally disabled while employed by the
Company, dies while employed by the Company, reaches age 65 while employed by
the Company, or terminates employment with the Company on or after attaining
age 55.Forfeited AccountsForfeitures of non-vested Company contributions are used to reduce
Company contributions. The amount forfeited was $55,307 in 2003. The forfeiture balance at December 31, 2003 was $38,164. The amount
used to reduce Company contributions was $22,432 in 2003.Participant LoansThe Plan permits loans to participants that are evidenced by a promissory note
payable to the Plan. A loan may not exceed the lesser of 50% of the vested
portion of the participants account or $50,000. The rate of interest charged
is determined at the time of the loan application and is fixed for the duration
of each loan. The interest rate is a commercially reasonable rate determined
by the Plans Administrative Committee. Historically, loans have been made
with a rate equal to 1% over the prime rate. The period of repayment for a loan may not exceed five years unless the loan is to be used to acquire the
principal residence of the participant, in which case the 5




---



##### 



repayment period may not exceed ten years.
After September 30, 2001, the unpaid balance of any new loan obtained by a
participant will become immediately due and payable upon termination of the
participants employment. Any loan obtained on or before September 30, 2001 is
not accelerated and will continue in accordance with its terms. Effective
February 1, 2002, a participant is limited to only one loan outstanding at one
time. Any participant with one or more outstanding loans as of February 1,
2002, may not obtain another loan until all existing loans have been repaid.
Any loans obtained prior to February 1, 2002 will remain outstanding in
accordance with their terms but the participant may not obtain any new loan
while such loan is outstanding.Investment OptionsParticipants may direct the assets allocated to their accounts to be invested
in one or more of the following investment options: AIM Mid-Cap Core Equity Fund
    
    INVESCO Stable Value FundAmerican Funds American Balanced Fund
    
    Neuberger Berman Genesis Trust FundAmerican Funds EuroPacific Fund
    
    PIMCO Total Return FundAmerican Funds Growth Fund of America
    
    SSGA Money Market FundDodge & Cox Stock Fund
    
    Self Managed AccountFidelity Advisor Growth & Income Fund
    
    Fairfax Stock FundINVESCO 500 Index Fund
  Effective August 1, 2003, the AIM Mid-Cap Core Equity Fund, American Funds
American Balanced Fund, American Funds Growth Fund of America, American Funds
EuroPacific Fund, Dodge & Cox Stock Fund and Fidelity Advisor Growth & Income
Fund were added as investments options, and American Fundamental Investors
Fund, INVESCO Dynamics Fund, INVESCO Financial Services Fund, INVESCO Growth &
Income Fund, INVESCO Technology Fund, INVESCO Telecommunications Fund, IRT
Aggressive Asset Allocation Fund, IRT Conservative Asset Allocation Fund, IRT
Moderate Asset Allocation Fund and Janus Adviser International Fund were
removed as investment options for new contributions or transfers from other
funds. On October 1, 2003, any remaining investment balances in the closed
funds were reinvested according to the fund-mapping chart below: From
    
    ToAmerican Fundamental Investors Fund
    
    Dodge & Cox Stock FundINVESCO Financial Services Fund
    
    Dodge & Cox Stock FundINVESCO Dynamics Fund
    
    AIM Mid-Cap Core Equity FundINVESCO Growth & Income Fund
    
    American Funds Growth Fund of AmericaINVESCO Telecommunications Fund
    
    American Funds Growth Fund of AmericaINVESCO Technology Fund
    
    American Funds Growth Fund of AmericaIRT Aggressive Asset Allocation Fund
    
    American Funds American Balanced FundIRT Conservative Asset Allocation Fund
    
    American Funds American Balanced FundIRT Moderate Asset Allocation Fund
    
    American Funds American Balanced FundJanus Adviser International Fund
    
    American Funds EuroPacific Fund
  ExpensesExpenses incidental to the purchase and sale of investments are reflected in
the cost or net proceeds of sale, as applicable, of the related securities. The Company pays all costs of
administering the Plan, but the Plan reserves the right to have certain
expenses paid directly from the assets of the Plan. 6




---



##### 



Payment of BenefitsParticipants benefits are payable at the later of termination of employment or
attainment of age 65, provided that a participant who terminates employment
prior to age 65 may elect to receive benefits prior to age 65 at any time after
termination of employment, and further provided that benefits must commence no
later than April 1 following the year in which the participant attains age
70 1/2. A participants account will be paid in a single lump-sum payment,
unless the participant elects (i) to receive installment payments over a period
not exceeding the joint life expectancy of the participant and the
participants beneficiary, or (ii) to have the participants account applied to
purchase an annuity contract. If an annuity is elected by a married
participant, the annuity provided will be a 50% joint and survivor annuity for
the participant and the participants spouse, unless another form is elected by
the participant with spousal consent. In the case of death of a participant
before his or her benefits commence, the vested portion of his or her account
shall be distributed to his or her beneficiary as soon as administratively
practical following the participants date of death.(2)
    
    Summary of Significant Accounting PoliciesBasis of AccountingThe financial statements of the Plan are prepared under the accrual basis of
accounting.Use of EstimatesThe preparation of financial statements in conformity with generally accepted
accounting principles requires the Plan administrator to make estimates and
assumptions that affect the reported amounts of assets and liabilities as well
as the disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reported period. Actual results could differ from those estimates.Investment Valuation and Income RecognitionMutual funds are valued at quoted market prices that represent the net asset
value of shares held by the Plan at year-end. Receivables and payables are
stated at fair values. Loans to participants are stated at unpaid principal
balances, which approximates fair values.In accordance with the policy of stating investments at fair value, both net
unrealized appreciation or depreciation and realized gains or losses for the
year are reflected in the statements of changes in net assets available for
Plan benefits.Purchases and sales of investments are recorded as of the trade date. Gain or
loss on sale of investments is based on rolling average costs. Dividend income
is recorded on the ex-dividend date. Income from other investments, including
participant loans, is recorded as earned.ContributionsContributions from eligible participants and matching Company contributions are
recorded in the month the related payroll deductions are made.BenefitsBenefits are recorded when paid. 7




---



##### 



(3)
    
    InvestmentsThe following presents investments that represent 5% or more of the
Plans net assets available for benefits: December 31,2003
    
    2002INVESCO Stable Value Fund
    
    $
    25,821,133
    
    
    $
    27,207,578INVESCO 500 Index Fund
    
    
    22,659,720
    
    
    
    19,647,197Dodge & Cox Stock Fund
    
    
    10,657,049
    
    
    
    American Funds American Balanced Fund
    
    
    10,421,167
    
    
    
    AIM Mid-Cap Core Equity Fund
    
    
    7,990,770
    
    
    
    PIMCO Total Return Fund
    
    
    4,905,782
    
    
    
    4,589,642IRT Moderate Asset Allocation Fund
    
    
    
    
    
    
    8,045,209American Fundamental Investors Fund
    
    
    
    
    
    
    7,132,170INVESCO Dynamics Fund
    
    
    
    
    
    
    6,842,001
  During the year ended December 31, 2003, the Plans investments (including
gains and losses on investments bought, sold and held during the year)
appreciated in value as follows: For the Year EndedDecember 31, 2003Mutual Funds
    
    $
    13,580,452Fairfax Stock Fund
    
    
    205,657Total net appreciation
    
    $
    13,786,109
  (4)
    
    Parties-in-InterestThe Plan investments are managed by AMVESCAP, of which INVESCO, the manager of
certain funds available as investments under the Plan, is a wholly-owned
subsidiary. AMVESCAP is also the trustee, as defined by the Plan, and,
therefore, transactions in INVESCO funds qualify as party-in-interest transactions.
Administrative expenses of $145,308 have been paid to AMVESCAP, the
recordkeeper for the Plan, for the year ended December 31, 2003.The Fairfax Stock Fund is considered a party-in-interest as a result of the
relationship discussed in Note 1 herein. Subsequent to Fairfaxs purchase of
the Talegen Plan, the option to invest in the Fairfax Stock Fund was added
as an investment election to the Plan. As of December 31, 2003, the Fairfax
Stock Fund held by the Plan had a market value of $317,200.(5)
    
    Plan TerminationThe Company intends to continue the Plan indefinitely, but reserves the right
to temporarily suspend contributions and to amend or terminate the Plan subject
to the provisions of ERISA. If the Plan is terminated, all participants would
become 100% vested on the termination date and all Plan assets would be used
solely to provide the benefits payable to participants or their beneficiaries. 8




---



##### 



(6)
    
    Income Tax StatusThe Plan obtained its initial and latest determination letter dated May 16,
2001, in which the Internal Revenue Service stated that the Plan, as adopted on
August 13, 1998 and amended in 1999 and 2000, was in compliance with the
applicable requirements of the Internal Revenue Code. The Plan has been
amended since receiving this determination letter. The Plan administrator and
the Plans tax counsel believe that the Plan is currently designed and being
operated in compliance with the applicable requirements of the Internal Revenue
Code. Therefore, no provision for income taxes has been included in the Plans
financial statements.(7)
    
    Risks and UncertaintiesThe Plan provides for various investment options in any combination of stocks,
mutual funds, and other investments securities. Investment securities are
exposed to various risks, such as interest rate, market and credit risks. Due
to the level of risk associated with certain investment securities, it is at
least reasonably possible that changes in the values of investment securities
will occur in the near term and that such changes could materially affect
participants account balances and the amounts reported in the statements of
net assets available for Plan benefits. 9




---



##### 



THE INDIVIDUAL RETIREMENT PLAN OF
UNITED STATES FIRE INSURANCE COMPANY SCHEDULE H, LINE 4(i)  SCHEDULE OF ASSETS (HELD AT END OF YEAR) Current Value atDecember 31, 2003INVESCO
Stable Value Fund1
    
    $
    25,821,133INVESCO 500
Index Fund1
    
    
    22,659,720Dodge & Cox Stock Fund
    
    
    10,657,049American Funds American Balanced Fund
    
    
    10,421,167AIM Mid-Cap Core Equity Fund
    
    
    7,990,770PIMCO Total Return Fund
    
    
    4,905,782Neuberger Berman Genesis Trust Fund
    
    
    4,141,724American Funds EuroPacific Fund
    
    
    2,656,184American Funds Growth Fund of America
    
    
    2,713,671Fidelity Advisor Growth & Income Fund
    
    
    154,215SSGA Money Market Fund
    
    
    11,614Self Managed Account
    
    
    17,203Fairfax
Stock Fund1
    
    
    317,200Loans to participants, interest ranging from
5.0% to 10.5%, maturing through 2013
    
    
    1,336,999$
    93,804,431
   1
    
    Party-in-interest. 10




---



##### 



SIGNATURES The Plan.Pursuant to the requirements of the Securities Exchange Act of 1934,
the Chairman of the Administrative Committee of The Individual Retirement Plan
of United States Fire Insurance Company has duly caused this annual report to
be signed on its behalf by the undersigned hereunto duly authorized. THE INDIVIDUAL RETIREMENT PLAN OF
UNITED STATES FIRE INSURANCE COMPANYBy:
    
    /s/ Peter VisaggioPeter Visaggio,
Chairman of the Administrative CommitteeDated: June 28, 2004
 11




---



##### 



EXHIBIT INDEX Exhibit No.Exhibit 23
    
    Consent of Independent Registered Public Accounting Firm
 12