XL Capital Ltd 8K - 11/29/06
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): November 29,
2006
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XL
CAPITAL LTD
(Exact
name of registrant as specified in its charter)
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|
Cayman
Islands
|
1-10804
|
98-0191089
|
|
(State
or other jurisdiction
of
incorporation)
|
(Commission
File Number)
|
(I.R.S.
Employer Identification No.)
|
XL
House, One Bermudiana Road, Hamilton, Bermuda HM 11
(Address
of principal executive offices)
Registrant’s
telephone number, including area code: (441) 292 8515
Not
Applicable
(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:
[
]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[
]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[
]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act
(17 CFR 240.14d-2(b))
[
]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act
(17 CFR 240.13e-4(c))
Item
8.01. Other Events.
On
November 29, 2006, the conditions to the effectiveness of an amendment (the
“Amendment”) to the quota share reinsurance treaty (the “Treaty”) among certain
subsidiaries of XL Capital Ltd (the “Company”) and Cyrus Reinsurance Limited
(“Cyrus Re”) were
satisfied. Cyrus Re is a
Bermuda
domiciled reinsurance company that
provides reinsurance coverage for property catastrophe reinsurance and
retrocession treaties underwritten by these subsidiaries within the
reinsurance segment of the Company. The Treaty covers the 2006 and 2007
underwriting periods, with a final risk period ending July 1, 2008. The
Amendment permits the issuance of a limited amount of indebtedness by Cyrus
Re,
subject to certain conditions.
Cyrus
Re
had originally contributed $525 million into a trust for the benefit of the
ceding companies (the “Trust”) to support the 2006 and 2007 coverages to be
ceded by them to Cyrus Re (subject to release from time to time if certain
tests
are met). Total capitalization was determined principally based on a multiple
of
the 1,000 year modeled aggregate expected loss to Cyrus Re for the 2006 and
2007
underwriting periods in respect of the business to be ceded for such periods.
At
December 1, 2006, after giving effect to the operation of the Treaty and the
additional contributions to the Trust required by the Amendment, there was
approximately $635 million (excluding accumulated premium and investment income)
held in the Trust to support cessions under the Treaty, as amended.
Highfields
Capital Management LP, an investment management company in which the Company
holds a significant minority economic interest, manages certain private
investment funds which hold in the aggregate approximately 50% of the equity
interest in the parent of Cyrus Re. While subsidiaries of the Company are
investors in certain of these funds, they did not participate in the investments
in Cyrus Re's parent by these funds. These subsidiaries will, however,
indirectly benefit from any management and performance fees earned by the
investment management company on the investments made by its managed funds
in
Cyrus Re's parent and any other fees earned by the management company as a
result of the Treaty, as it does on other investments by these funds. The
Company also expects to be a minority co-investor, along with the principals
and
owners of Highfields Capital Management LP, in another investment management
enterprise that manages money for the Company and that has other clients which
invested in Cyrus Re's parent. The Company's funds managed by this enterprise
will not be invested in such parent, but the Company will in the ordinary course
share in any management fees earned by this enterprise as a result of
investments by its other clients in such parent.
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.
XL
CAPITAL
LTD
(Registrant)
By: /s/
Kirstin Romann Gould
Name: Kirstin
Romann Gould
Title:
Secretary