Winterthur to pay XL Capital Ltd. $575 million

XL Capital Ltd (NYSE: XL) recently received a draft actuarial report from the Independent Actuary in connection with the Company’s post-closing protection for adverse development of net loss and unearned premium relating to it’s acquisition of specific Winterthur International insurance operations from the Winterthur Swiss Insurance Company (“WSIC”) in 2001.Initial review of the Independent Actuary’s draft report indicates that the Independent Actuary determined that WSIC’s submitted Seasoned Net Reserve Amount (“SNRA”) and Net Premium Receivable Amount (“NPRA”) are closest to the Independent Actuary’s determinations of SNRA and NPRA. These determinations, if made final, will result in XL receiving a net lump sum payment in the amount of approximately $575 million (including interest receivable) from WSIC.This draft will be revised for any manifest errors brought to the Independent Actuary’s attention by XL or WSIC.The report and its determinations are intended to be finalized by December 5, 2005 under the terms of the Sale and Purchase Agreement, as amended, between XL Insurance (Bermuda) Ltd and WSIC (the “SPA”). Under the terms of the SPA, the amounts due to XL are payable within five business days of the Independent Actuary’s report becoming final. Accordingly, absent manifest errors in the draft report an aggregate of $575 million (including interest) will be due from WSIC by December 12, 2005.XL expects that if the draft report is finalized by December 5 it will see a record loss of approximately $830 million in the fourth quarter of 2005 relating to the independent actuarial process.