xl8k.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported):
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June
9, 2009
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XL
Capital Ltd
(Exact
name of registrant as specified in its charter)
Cayman
Islands
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1-10804
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98-0191089
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(State
or other jurisdiction of
incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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XL
House, One Bermudiana Road, Hamilton, Bermuda
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HM11
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(Address
of principal executive offices)
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Registrant's telephone number,
including area code: (441)
292-8515
Not
Applicable
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(Former
name or former address, if changed since last
report)
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Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General
Instruction A.2. below):
□
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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□
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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□
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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□
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
8.01. Other Events.
The insurance segment of XL Capital Ltd
announced on June 9, 2009 that XL Specialty Insurance Company ("XL
Specialty"), a wholly-owned subsidiary of XL Capital Ltd, has entered into
an agreement with National Indemnity Company, an insurance company subsidiary of
Berkshire Hathaway Inc. ("National Indemnity"). Under the agreement, and a
related reinsurance agreement, National Indemnity will issue endorsements
("Endorsements") to certain directors and officers liability insurance policies
known as "Side A" coverage policies ("D&O Policies") underwritten by XL
Specialty (the "Facility").
The
Endorsements entitle policyholders to present claims under such D&O Policies
directly to National Indemnity in the event that XL Specialty is unable to meet
its obligations due to an order of insolvency, liquidation or an injunction
that prohibits XL Specialty from paying claims. Under the terms of
the Facility, National Indemnity will issue Endorsements with aggregate premiums
up to $140,000,000. In addition, XL Specialty has an irrevocable option, which
may be exercised during the first eleven (11) months of the Facility, to require
National Indemnity to issue Endorsements on D&O Policies with additional
aggregate premiums up to $100,000,000 (the "Option"). The
Endorsements will terminate on the tenth anniversary of their
issuance. The Facility provides that National Indemnity will be
obligated to issue Endorsements on D&O Policies issued during an eighteen
month period that commenced on June 8, 2009.
National
Indemnity's obligations under the Facility to issue new Endorsements will
terminate if XL Specialty's financial strength rating is downgraded to or below
"BBB+" by Standard & Poor's Corporation ("S&P") or to or below "A-" by
A.M. Best and Company ("A.M. Best") or should S&P and A.M. Best cease rating
XL Specialty. In connection with the Facility, XL Insurance (Bermuda)
Ltd ("XLIB") will purchase an obligation in an aggregate principal amount of
$150 million (the "Initial Payment Obligation") from National
Indemnity. If XL Specialty elects to exercise the Option, XLIB will
purchase a second obligation in an aggregate principal amount of $100 million
(the "Second Payment Obligation", and together with the Initial Payment
Obligation, the "Payment Obligations"). In addition, XL Specialty
will establish a trust (the "Security Trust") to hold the premiums (net of
commissions) on the D&O Policies endorsed by National Indemnity. XL
Specialty will also arrange to provide National Indemnity with a letter of
credit in the event the assets in the Security Trust are insufficient to meet XL
Specialty's obligations under the Facility (the "Letter of
Credit"). The Security Trust, the Letter of Credit and the Payment
Obligations collateralize XL Specialty's indemnity obligations under the
Facility to National Indemnity for any payments National Indemnity is required
to make under the Endorsements.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Date: June 9, 2009
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XL
Capital Ltd
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By:
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/s/ Kirstin Romann Gould
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Name: Kirstin
Romann Gould
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Title: General
Counsel and Secretary
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