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                                                                                                September 19, 2007

Mr. V. Prem Watsa
Chairman and Chief Executive Officer
Fairfax Financial Holdings Limited
95 Wellington Street West, Suite 800
Toronto, Ontario Canada M5J2N7

Re:      Fairfax Financial Holdings Limited
           Form 40-F for fiscal year ended December 31, 2006
            File No. 1-31556

Dear Mr. Watsa:

We have reviewed your filing and have the following comments. We have limited
our review to only your financia l statements and related disclosures and do not intend to
expand our review to other portions of your documents. In our comments, we ask you to
provide us with information so we may better understand your disclosure.  After
reviewing this information, we may raise additional comments.

 Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filing.  We look forward to  working with you in these respects.  We
welcome any questions you may have about our comments or any other aspect of our review.  Feel free to call us at the telephone numbers listed at the end of this letter.

Form 40-F for fiscal year  ended December 31, 2006
Off-Balance Sheet Arrangements
1. You state that off-balance sheet arrangem ents are described in Notes 4, 13 and 15
to your consolidated financial statemen ts. However, these disclosures do not
appear to provide all of the information specified in General Instruction B (11). In particular, you appear to omit discussion of triggering events that could cause
obligations or liabilities related to of f-balance sheet arrangements to arise and
known trends or uncertainties that are reas onably likely to result in a material
reduction in the availability of off-ba lance sheet arrangements to you. Please
provide the information required by Genera l Instruction B (11) in a disclosure-
type format or explain to us the factors that you considered in concluding that the
existing disclosure in Notes 4, 13 and 15 is adequate.

Mr. V. Prem Watsa
Fairfax Financial Holdings Limited
September 19, 2007 Page 2
Exhibit 2 - Consolidated  Financial Statements

Notes to Consolidated Financial Statements

Note 20. US GAAP Reconciliation, page 52

For each of the comments below, please provide us the information requested in
disclosure-type format in order that we may evaluate your disclosure.

2. Consistent with CICA Accounting Guideline AcG-3 (paragraph 15), describe
your “corporate policies with  respect to limits of coverage, reinsurance, net
retentions and similar inform ation.” Ensure that the pr incipal terms of your ceded
reinsurance contracts are adequately descri bed so that an investor would be able
to adequately assess the exte nt of your net exposure to claims risk. Describe and
quantify any limitations in these contract s on your ability to cede losses in the
future on a basis consistent with historical results.

3. On page 53, you state that under Cana dian GAAP recoveries on stop loss
reinsurance treaties are reco rded at the same time as the claims are ceded, while
under US GAAP, consistent with accounting for retroactive reinsurance under
SFAS 113, the excess of ceded liabilities over premium paid is recorded as a
deferred gain. Guideline D-7 issued by the Superintendent of Financial
Institutions appears to indicate Canadian GAAP account ing model for reinsurance
of short term insurance contracts fo llows the requirements of SFAS 113, in
particular the deferral of the excess of reinsured liabilities under retroactive
reinsurance over cash paid. Explain mo re specifically the methods and key
assumptions used to account for your  reinsurance arrangements on both a
Canadian and a US GAAP basis, particularly the factors that you considered in not applying the provisions of Guideline D-7.

4. On page 132, you state that the Company’s profitability is affected by cost of
reinsurance, which appears to be signif icant, given the magnitude of amounts
recoverable from reinsurers at De cember 31, 2006. Quantify the cost of
reinsurance and the factors that caused vari ations in this cost on a US GAAP basis
for each period presented.

5. Please tell us why your provision for uncoll ectible reinsurance is the same amount
under both Canadian and US GAAP a nd did not change between 2005 and 2006
despite your $1 billion commutation of the Swiss Re corporate insurance cover.

6. On page 36, you describe the accounting eff ect of the Swiss Re commutation as a
“non-cash pre-tax and after-tax charge of $142.6 million …a $1 billion decrease in the balance recoverable from re insurers and a $587.4 decrease in funds
withheld payable to reinsurers.” You also show this $587.4 million amount as
“proceeds from the Swiss Re commutation” that increased unpaid claim liabilities. Also, you state elsewhere that  the Swiss Re commutation produced
“approximately $585 million cash proceeds.” Pl ease provide us in disclosure-type
format a description of your US GAAP accounting for the Swiss Re

Mr. V. Prem Watsa
Fairfax Financial Holdings Limited
September 19, 2007 Page 3
commutations that explains your accounting for this transaction and all accounts
affected.
*    *    *    *
Please respond to these comments within  10 business days or tell us when you
will provide us with a respons e.  Your letter should key your responses to our comments.
Detailed cover letters greatly facilitate our review.  Please furnish your letter on EDGAR
under the form type label CORRESP.

We urge all persons who are responsible for the accuracy and adequacy of the
disclosure in the filing to be certain that the filing includes all in formation required under
the Securities Exchange Act of 1934 and th at they have provided all information
investors require for an informed invest ment decision.  Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have made.

 In connection with responding to our co mments, please provide, in your letter, a
statement from the company acknowledging that:

• the company is responsible for the adequacy  and accuracy of the disclosure in the
filings;
• staff comments or changes to disclosure  in response to staff comments do not
foreclose the Commission from taking any action with respect to the filing; and
• the company may not assert staff comme nts as a defense in any proceeding
initiated by the Commission or any person under the federal secu rities laws of the
United States.

 In addition, please be advi sed that the Division of En forcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filing or in response to our comments on your filing.

You may contact Frank Wyman, St aff Accountant, at 202-551-3660  or Don
Abbott, Senior Staff Accountant, at 202- 551-3608, if you have questions regarding the
comments.  In this regard, do not hes itate to contact me, at (202) 551-3679.

       S i n c e r e l y ,

       J i m  B .  R o s e n b e r g
      Senior Assistant Chief Accountant