8-K

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): August 23, 2004

————————————

XL CAPITAL LTD

(Exact name of registrant as specified in its charter)

————————————

Cayman Islands	1-10809	98-0191089
(State or other jurisdiction	(Commission File Number)	(I.R.S. Employer Identification No.)
of incorporation)

XL House, One Bermudiana Road, Hamilton, Bermuda HM11
(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)

————————————

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 August 23, 2004, XL Capital Ltd issued the press release attached as Exhibit 99.1 and incorporated by reference herein.

Item 9.01. Financial Statements and Exhibits.

      (c)       Exhibits. The following exhibits are filed herewith:

Exhibit No.	Description
99.1	Press Release (“XL CAPITAL LTD TO REDEEM ALL OF ITS OUTSTANDING LIQUID
	YIELD OPTION™ NOTES DUE 2021”) dated August 23, 2004.

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: August 23, 2004

	XL CAPITAL LTD
	(Registrant)
By:	/s/ Paul S. Giordano
	Name:	Paul S. Giordano
	Title:	Executive Vice President,
		General Counsel & Secretary

EX-99.1

Exhibit 99.1

[XL Capital Logo Omitted]

XL Capital Ltd
XL House
One Bermudiana Road
Hamilton HM 11 Bermuda
Phone: (441) 292-8515
Fax: (441) 292-5280

NEWS RELEASE

IMMEDIATE

Contact:	Scott C. Hoy	Roger R. Scotton
	Investor Relations	Media Contact
	(441) 294-7201	(441) 294-7165

XL CAPITAL LTD TO REDEEM ALL OF ITS OUTSTANDING
LIQUID YIELD OPTION™ NOTES DUE 2021

HAMILTON, BERMUDA (August 23, 2004) -- XL Capital Ltd (NYSE: XL) (“XL”) announced today that it has called for redemption all of its outstanding Liquid Yield Option™ Notes due 2021 (“LYONs”). The redemption date for the LYONs will be September 7, 2004. The redemption price will be $622.5046 per LYON. In the event all of the outstanding LYONs are surrendered for redemption, the aggregate redemption price would be $316,756,486.

In order to receive the LYONs redemption price, holders must deliver their LYONs to U.S. Bank National Association, as paying agent under the indenture governing the LYONs.

XL Capital Ltd, through its operating subsidiaries, is a leading provider of insurance and reinsurance coverages and financial products to industrial, commercial and professional service firms, insurance companies, and other enterprises on a worldwide basis. As of June 30, 2004, XL Capital Ltd had consolidated assets of approximately $45.5 billion and

-2-

consolidated shareholders’ equity of approximately $7.1 billion. More information about XL Capital Ltd is available at www.xlcapital.com.

# # #