8-K

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                       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

                                November 13, 2002
                Date of Report (Date of earliest event reported)


                                 XL CAPITAL LTD
             (Exact name of registrant as specified in its charter)

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

              XL House, One Bermudiana Road, Hamilton, Bermuda HM11
                    (Address of principal executive offices)

                                 (441) 292-8515
              (Registrant's telephone number, including area code)

                                 Not Applicable
          (Former name or former address, if changed since last report)



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Item 5. Other events.


On November 13, 2002, XL Capital Ltd, a Cayman Islands exempted limited company
(the "Registrant"), entered into an Underwriting Agreement together with a
related Pricing Agreement forming a part thereof dated the date thereof with
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co.
Incorporated and the other underwriters named on Schedule I of the Pricing
Agreement, pursuant to which the Company agreed to issue and sell up to
11,500,000 of its 7 5/8% Series B Preference Ordinary Shares, par value $0.01
per share.

This Current Report on Form 8-K is being filed for the purpose of filing the
attached documents in connection therewith as exhibits to the shelf registration
statement on Form S-3 (Registration No. 333-75240) filed by the Registrant, XL
Capital Finance (Europe) plc, XL Capital Trust I, XL Capital Trust II, and XL
Capital Trust III (the "Registration Statement"), and such Exhibits are hereby
incorporated into the Registration Statement by reference.


Item 7. Financial Statements and Exhibits.


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

       Exhibit No.          Description
       ------------------------------------------------------------------------

          1.1(e) Underwriting Agreement, dated November 13, 2002, by and among
               XL Capital Ltd, and Merrill Lynch, Pierce, Fenner & Smith
               Incorporated, Morgan Stanley & Co. Incorporated and the other
               underwriters named on Schedule I of the related Pricing Agreement
               forming a part thereof dated the date thereof.

          1.1(f) Pricing Agreement, dated November 13, 2002, by and among XL
               Capital Ltd, and Merrill Lynch, Pierce, Fenner & Smith
               Incorporated, Morgan Stanley & Co. Incorporated and the other
               underwriters named on Schedule I thereto.

          4.18 Excerpts from the Authorizing Resolutions of the Special Finance
               Committee of XL Capital Ltd, dated November 6, 2002.

          12.1 Statement regarding Computation of Earnings to Fixed Charges and
               Earnings to Preference Ordinary Share Dividends (supercedes
               Exhibit 12.1 to the Registrant's Registration Statement on Form
               S-3 filed with the SEC on October 22, 2001 (Registration No.
               333-72018)).






                                   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.

Dated:   November 14, 2002


                                XL CAPITAL LTD


                                By:  /s/ Jerry de St. Paer
                                    --------------------------------------------
                                    Name:   Jerry de St. Paer
                                    Title:  Executive Vice President &
                                              Chief Financial Officer

EX-1.1(E)

                                                                  EXECUTION COPY

                                 XL Capital Ltd

                       Series B Preference Ordinary Shares

                                  -------------

                             Underwriting Agreement


                                                               November 13, 2002

Merrill Lynch, Pierce, Fenner & Smith
   Incorporated
Morgan Stanley & Co. Incorporated
c/o Merrill Lynch, Pierce, Fenner & Smith
    Incorporated
World Financial Center - North Tower
250 Vesey Street
New York, New York 10281

as Representatives of the several
   Underwriters named in the Pricing
   Agreement hereinafter described

Ladies and Gentlemen:

     From time to time XL Capital Ltd, a Cayman Islands exempted limited company
(the "Company"), proposes to enter into one or more Pricing Agreements (each a
"Pricing Agreement") in the form of Annex I hereto, with such additions and
deletions as the parties thereto may determine, and, subject to the terms and
conditions stated herein and therein, to issue and sell to the firms named in
Schedule I to the applicable Pricing Agreement (such firms constituting the
"Underwriters" with respect to such Pricing Agreement and the securities
specified therein) certain shares of its Series B Preference Ordinary Shares,
par value $0.01 per share (the "Shares"), specified in Schedule II to such
Pricing Agreement (with respect to such Pricing Agreement, the "Firm Shares").
If specified in such Pricing Agreement, the Company may grant to the
Underwriters the right to purchase at their election an additional number of
shares, specified in such Pricing Agreement as provided in Section 3 hereof (the
"Optional Shares"). The Firm Shares and the Optional Shares, if any, which the
Underwriters elect to purchase pursuant to Section 3 hereof are herein
collectively called the "Designated Shares".

     The terms and rights of any particular issuance of Designated Shares shall
be as specified in the Pricing Agreement relating thereto.

     1. Particular sales of Designated Shares may be made from time to time to
the Underwriters of such Shares, for whom the firms designated as



representatives of the Underwriters of such Shares in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to Underwriters who act without any firm being designated
as their representative. This Underwriting Agreement shall not be construed as
an obligation of the Company to sell any of the Shares or as an obligation of
any of the Underwriters to purchase any of the Shares. The obligation of the
Company to issue and sell any of the Shares and the obligation of any of the
Underwriters to purchase any of the Shares shall be evidenced by the Pricing
Agreement with respect to the Designated Shares specified therein. Each Pricing
Agreement shall specify the aggregate number of the Firm Shares, the maximum
number of Optional Shares, if any, the initial public offering price of such
Firm and Optional Shares or the manner of determining such price, the purchase
price to the Underwriters of such Designated Shares, the names of the
Underwriters of such Designated Shares, the names of the Representatives of such
Underwriters, the number of such Designated Shares to be purchased by each
Underwriter and the commission, if any, payable to the Underwriters with respect
thereto and shall set forth the date, time and manner of delivery of such Firm
and Optional Shares, if any, and payment therefor. The Pricing Agreement shall
also specify (to the extent not set forth in the registration statement and
prospectus with respect thereto) the terms of such Designated Shares. A Pricing
Agreement shall be in the form of an executed writing (which may be in
counterparts), and may be evidenced by an exchange of telegraphic communications
or any other rapid transmission device designed to produce a written record of
communications transmitted. The obligations of the Underwriters under this
Agreement and each Pricing Agreement shall be several and not joint.

     2. The Company represents and warrants to, and agrees with, each of the
Underwriters, as of the date hereof, as of the date of the Pricing Agreement
with respect to any Designated Shares and as of each Time of Delivery, that:

          (a) The Company meets the requirements for use of Form S-3 under the
     Act; and a registration statement on Form S-3 (File No 333-75240) (the
     "Initial Registration Statement") in respect of the Shares has been filed
     with the Securities and Exchange Commission (the "Commission"); the Initial
     Registration Statement and any post-effective amendment thereto, each in
     the form heretofore delivered or to be delivered to the Representatives
     and, excluding exhibits to the Initial Registration Statement, but
     including all documents incorporated by reference in the prospectus
     included therein, to the Representatives for each of the other Underwriters
     has been declared effective by the Commission in such form; other than a
     registration statement, if any, increasing the size of the offering (a
     "Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b) under
     the Securities Act of 1933, as amended (the "Act"), which became effective
     upon filing, no other document with respect to the Initial Registration
     Statement or document incorporated by reference therein has heretofore been
     filed, or transmitted for filing, with the Commission (other than the
     prospectuses filed pursuant to Rule 424(b) of the rules and regulations of
     the Commission under the Act, in the form heretofore delivered to the
     Representatives); and no stop order suspending the effectiveness of the
     Initial Registration Statement, any post-effective amendment thereto or the
     Rule 462(b) Registration Statement, if any, has been issued and no
     proceeding for that purpose has been initiated or threatened by the
     Commission (any preliminary prospectus included in the Initial Registration
     Statement or filed with the Commission pursuant to Rule 424(a) under the
     Act, including the related preliminary prospectus supplement with respect
     to the Shares), is hereinafter called a "Preliminary Prospectus"; the
     various parts of the Initial Registration



                                       2


     Statement and the Rule 462(b) Registration Statement, if any, including all
     exhibits thereto and the documents incorporated by reference in the
     prospectus contained in the Initial Registration Statement at the time such
     part of the Initial Registration Statement became effective, each as
     amended at the time such part of the Initial Registration Statement became
     effective or such part of the Rule 462(b) Registration Statement, if any,
     became or hereafter becomes effective, are hereinafter collectively called
     the "Registration Statement"; the prospectus relating to the Designated
     Shares, in the form first furnished to the Underwriters for use in
     connection with the offering of the Designated Shares (including the
     related prospectus supplement with respect to the Designated Shares) and
     filed with the Commission pursuant to Rule 424(b) under the Act, is
     hereinafter called the "Prospectus"; any reference herein to any
     Preliminary Prospectus or the Prospectus shall be deemed to refer to and
     include the documents incorporated by reference therein pursuant to the
     applicable form under the Act, as of the date of such Preliminary
     Prospectus or Prospectus, as the case may be; any reference to any
     amendment or supplement to any Preliminary Prospectus or the Prospectus
     shall be deemed to refer to and include any documents filed after the date
     of such Preliminary Prospectus or Prospectus, as the case may be, under the
     Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
     incorporated by reference in such Preliminary Prospectus or Prospectus, as
     the case may be; any reference to any amendment to the Initial Registration
     Statement shall be deemed to refer to and include any annual report of the
     Company filed pursuant to Section 13(a), 13(c) or 15(d) of the Exchange Act
     after the effective date of the Registration Statement that is incorporated
     by reference in the Registration Statement;

          (b) The documents incorporated by reference in the Prospectus, when
     they became effective or were filed with the Commission, as the case may
     be, conformed in all material respects to the requirements of the Act or
     the Exchange Act, as applicable, and the rules and regulations of the
     Commission thereunder, and none of such documents contained an untrue
     statement of a material fact or omitted to state a material fact required
     to be stated therein or necessary to make the statements therein, in the
     light of the circumstances under which they were made, not misleading; and
     any further documents so filed and incorporated by reference in the
     Prospectus or any further amendment or supplement thereto, when such
     documents become effective or are filed with the Commission, as the case
     may be, will conform in all material respects to the requirements of the
     Act or the Exchange Act, as applicable, and the rules and regulations of
     the Commission thereunder and will not contain an untrue statement of a
     material fact or omit to



                                       3


     state a material fact required to be stated therein or necessary to make
     the statements therein, in the light of the circumstances under which they
     were made, not misleading;

          (c) The Registration Statement and the Prospectus conform, and any
     further amendments or supplements to the Registration Statement or the
     Prospectus will conform, in all material respects to the requirements of
     the Act and the rules and regulations of the Commission thereunder and do
     not and will not, as of the applicable effective date, as of the date
     hereof and as of the date of execution of the Pricing Agreement with
     respect to such Designated Shares as to the Registration Statement and any
     amendment thereto and as of the applicable filing date and as of the Time
     of Delivery as to the Prospectus and any amendment or supplement thereto,
     contain an untrue statement of a material fact or omit to state a material
     fact required to be stated therein or necessary to make the statements in
     the Registration Statement not misleading and the statements in the
     Prospectus, in the light of the circumstances under which they were made,
     not misleading; provided, however, that this representation and warranty
     shall not apply to any statements or omissions made in reliance upon and in
     conformity with information furnished in writing to the Company by an
     Underwriter of Designated Shares through the Representatives expressly for
     use in the Prospectus;

          (d) Neither the Company nor any of its Significant Subsidiaries (as
     defined below) has sustained since the date of the latest audited financial
     statements included or incorporated by reference in the Prospectus any loss
     or interference with its business from fire, explosion, flood or other
     calamity, whether or not covered by insurance, or from any labor dispute or
     court or governmental action, order or decree, otherwise than as set forth
     or contemplated in the Prospectus which loss or interference would have a
     Material Adverse Effect (as defined below), or would reasonably be expected
     to have a prospective Material Adverse Effect; and, since the respective
     dates as of which information is given in the Registration Statement and
     the Prospectus, there has not been any change in the capital stock (other
     than changes resulting from the exercise of stock options or the
     conversions of warrants or capital stock which were outstanding as of such
     date, or from the exercise of options granted after such date in the
     ordinary course of business or from repurchases of capital stock) or
     long-term debt of the Company or any of its Significant Subsidiaries or any
     material adverse change, or any development that would reasonably be
     expected to involve a prospective material adverse change, in or affecting
     the general affairs, management, financial position, stockholders' equity
     or results of operations of the Company and its Significant Subsidiaries,
     taken as a whole, otherwise than as set forth or contemplated in the
     Prospectus;

          (e) The Company has been duly incorporated and is validly existing as
     an exempted limited company in good standing under the laws of the Cayman
     Islands, with full power and authority to own its properties and conduct
     its business as described in the Prospectus and has been duly qualified as
     a foreign company for the transaction of business and is in good standing
     under the laws of each other jurisdiction in which it owns or leases
     properties or conducts any business so as to require such qualification,
     except where such failure to be so qualified in any such jurisdiction or to
     have any such power or authority would not have a material adverse effect
     on the current or future condition (financial or other), business,
     properties or results of operations of the Company and its subsidiaries
     taken as a whole or the transactions contemplated by this Agreement (a
     "Material Adverse Effect"); and each Significant Subsidiary of the Company
     has been duly incorporated and is validly existing as a corporation in good
     standing under the laws of its jurisdiction of incorporation;

          (f) The Company had, on September 30, 2002, an authorized
     capitalization as set forth in the Prospectus under the caption "Actual"
     under the heading "Capitalization", and all of the issued shares of capital
     stock of the Company have been duly and validly authorized and issued and
     are fully paid and non-assessable;

          (g) The Shares have been duly and validly authorized, and, when the
     Firm Shares are issued and delivered pursuant to this Agreement and the
     Pricing Agreement with respect to such Designated Shares and, in the case
     of any Optional Shares, pursuant to each



                                       4


     Over-allotment Option (as defined in Section 3 hereof) with respect to such
     Shares, such Designated Shares will be duly and validly issued and fully
     paid and non-assessable and will not be subject to preemptive or other
     similar rights of any securityholder of the Company, and no holder of the
     Shares will be subject to personal liability by reason of being such a
     holder; the Shares conform to the description thereof contained in the
     Registration Statement and the Designated Shares will conform to the
     description thereof contained in the Prospectus; the applicable resolution
     of the Special Finance Committee of the Company's Board of Directors
     creating the Designated Shares shall be in full force and effect prior to
     the Closing Date;

          (h) This Agreement has been duly authorized, executed and delivered by
     the Company, and each Pricing Agreement has been duly authorized by and, on
     the date thereof, will be duly executed and delivered by the Company;

          (i) The issue and sale of the Shares, the execution and delivery of
     this Agreement and any Pricing Agreement and the compliance by the Company
     with all of the provisions of this Agreement, any Pricing Agreement, the
     Shares and each Over-allotment Option, if any, and the consummation of the
     transactions contemplated herein and therein will not conflict with or
     result in a breach or violation of any of the terms or provisions of, or
     constitute a default under, any indenture, mortgage, deed of trust, loan
     agreement or other agreement or instrument to which the Company or any of
     its Significant Subsidiaries is a party or by which the Company or any of
     its Significant Subsidiaries is bound or to which any of the property or
     assets of the Company or any of its Significant Subsidiaries is subject,
     nor will such action result in any violation of the provisions of the
     charter, the Articles of Association, the Memorandum of Association or
     By-laws (or similar organizational documents) of the Company or any of its
     Significant Subsidiaries or any statute or any order, rule or regulation of
     any court or governmental agency or body ("Governmental Agency") having
     jurisdiction over the Company or any of its Significant Subsidiaries or any
     of its properties except in each case (other than with respect to such
     charter, Articles of Association, Memorandum of Association or By-Laws (or
     similar organizational documents)) for such conflicts, violations, breaches
     or defaults which would not result in a Material Adverse Effect;

          (j) No consent, approval, authorization, order, filing, registration
     or qualification of or with any such Governmental Agency (a "Governmental
     Authorization") is required for the issue and sale by the Company of the
     Shares or the consummation by the Company of the transactions contemplated
     by this Agreement or any Pricing Agreement or any Over-allotment Option,
     except such as have been, or will have been prior to each Time of Delivery
     (as defined in Section 4 hereof), obtained under the Act and such consents,
     approvals, authorizations, registrations or qualifications as may be
     required under state securities or Blue Sky laws in connection with the
     purchase and distribution of the Shares by the Underwriters;

          (k) All of the issued share capital of each Significant Subsidiary of
     the Company which is a corporation has been duly and validly authorized and
     issued, is fully paid and non-assessable and (except for directors'
     qualifying shares) is owned directly or indirectly by the Company, free and
     clear of all liens, encumbrances, equities or claims (for purposes of this
     agreement, "Subsidiary" means, as applied to any person, any corporation,
     limited or general partnership, trust, association or other business entity
     of which an aggregate of greater than



                                       5


     50% of the outstanding Voting Shares of such person is, at any time,
     directly or indirectly, owned by such person and/or one or more
     subsidiaries of such person and "Significant Subsidiary" shall have the
     meaning of "significant subsidiary" as set forth in Regulation S-X under
     the Act; for purposes of the definition of " Subsidiary," "Voting Shares"
     means, with respect to any corporation, the capital stock having the
     general voting power under ordinary circumstances to elect at least a
     majority of the board of directors (irrespective of whether or not at the
     time stock of any other class or classes shall have or might have voting
     power by reason of the happening of any contingency));

          (l) None of the transactions contemplated to be performed by the
     Company by this Agreement (including, without limitation, the use of the
     proceeds from the sale of the Designated Shares) will violate or result in
     a violation of Section 7 of the Exchange Act, or any regulation promulgated
     thereunder, including, without limitation, Regulations T, U, and X of the
     Board of Governors of the Federal Reserve System;

          (m) Prior to the date hereof, neither the Company nor, to the
     Company's knowledge, any of its affiliates has taken any action which is
     designed to or which has constituted or which might have been expected to
     cause or result in stabilization or manipulation of the price of any
     security of the Company in connection with the offering of the Designated
     Shares in violation of the Exchange Act;

          (n) Other than as set forth or incorporated by reference in the
     Prospectus, or as encountered in the ordinary course of business in the
     Company's claims activities, there are no legal or governmental actions,
     suits or proceedings pending to which the Company or any of its Significant
     Subsidiaries is a party or of which any property of the Company or any of
     its Significant Subsidiaries is the subject, which would individually or in
     the aggregate reasonably be expected to have a Material Adverse Effect on
     the operations of the Company and its Significant Subsidiaries; and, to the
     best of the Company's knowledge, no such proceedings are threatened or
     contemplated by governmental authorities or threatened by others;

          (o) The financial statements of the Company and its consolidated
     subsidiaries incorporated by reference in the Prospectus present fairly the
     financial position of the Company and its consolidated Subsidiaries as of
     the dates shown and their results of operations and cash flows for the
     periods shown, and except as otherwise disclosed in the Prospectus, such
     financial statements have been prepared in conformity with the generally
     accepted accounting principles in the United States applied on a consistent
     basis;

          (p) The Company and its Significant Subsidiaries possess adequate
     certificates, authorities or permits issued by appropriate governmental
     agencies or bodies necessary to conduct the business now operated by them
     and have not received any written notice of proceedings relating to the
     revocation or modification of any such certificate, authority or permit
     that would, individually or in the aggregate, reasonably be expected to
     have a Material Adverse Effect;

          (q) The Company is subject to Section 13 or 15(d) of the Exchange Act;



                                       6


          (r) Neither the Company nor any of its Significant Subsidiaries is in
     violation of its charter, Articles of Association, Memorandum of
     Association or By-laws (or similar organizational documents) or in default
     in the performance or observance of any material obligation, agreement,
     covenant or condition contained in any indenture, mortgage, deed of trust,
     loan agreement, lease or other agreement or instrument to which it is a
     party or by which it or any of its properties may be bound, except for such
     defaults which would not result in a Material Adverse Effect;

          (s) The statements set forth in the Prospectus under the captions
     "Description of Series B Preference Shares," "Description of XL Capital
     Share Capital" and "Description of XL Capital Preference Ordinary Shares",
     insofar as they purport to constitute a summary of the terms of the Shares,
     and the statements set forth under the caption "Certain Tax Considerations"
     in the Prospectus insofar as they purport to describe the provisions of the
     laws referred to therein, are accurate, complete and fair in all material
     respects;

          (t) The Company is not and, after giving effect to the offering and
     sale of the Shares, will not be an "investment company", as such term is
     defined in the Investment Company Act of 1940, as amended (the "Investment
     Company Act");

          (u) PricewaterhouseCoopers LLP, the Company's auditors, are
     independent public accountants as required by the Act and the rules and
     regulations of the Commission thereunder;

          (v) No stamp or other issuance or transfer taxes or duties and no
     capital gains, income, withholding or other taxes are payable by or on
     behalf of the Underwriters to the Cayman Islands or any political
     subdivision or taxing authority thereof or therein in connection with (A)
     the issuance, sale and delivery by the Company to or for the respective
     accounts of the Underwriters of the Designated Shares or (B) the sale or
     delivery outside the Cayman Islands by the Underwriters of the Designated
     Shares to the initial purchasers thereof, other than as described in the
     opinion of Hunter & Hunter delivered pursuant to Section 7(d) of this
     Agreement.

     3. Upon the execution of the Pricing Agreement applicable to any Designated
Shares and authorization by the Representatives of the release of the Firm
Shares, the several Underwriters propose to offer the Firm Shares for sale upon
the terms and conditions set forth in the Prospectus.

     The Company may specify in the Pricing Agreement applicable to any
Designated Shares that the Company thereby grants to the Underwriters the right
(an "Overallotment Option") to purchase at their election up to the number of
Optional Shares set forth in such Pricing Agreement, on the terms set forth in
the paragraph above, for the sole purpose of covering over-allotments in the
sale of the Firm Shares. Any such election to purchase Optional Shares may be
exercised by written notice from the Representatives to the Company, given
within a period specified in the Pricing Agreement, setting forth the aggregate
number of Optional Shares to be purchased and the date on which such Optional
Shares are to be delivered, as determined by the Representatives but in no event
earlier than the First Time of Delivery (as defined in Section 4 hereof) or,
unless the Representatives and the



                                       7


Company otherwise agree in writing, earlier than or later than the respective
number of business days after the date of such notice set forth in such Pricing
Agreement.

     The number of Optional Shares to be added to the number of Firm Shares to
be purchased by each Underwriter as set forth in Schedule I to the Pricing
Agreement applicable to such Designated Shares shall be, in each case, the
number of Optional Shares which the Company has been advised by the
Representatives have been attributed to such Underwriter; provided that, if the
Company has not been so advised, the number of Optional Shares to be so added
shall be, in each case, that proportion of Optional Shares which the number of
Firm Shares to be purchased by such Underwriter under such Pricing Agreement
bears to the aggregate number of Firm Shares (rounded as the Representatives may
determine to the nearest 100 shares). The total number of Designated Shares to
be purchased by all the Underwriters pursuant to such Pricing Agreement shall be
the aggregate number of Firm Shares set forth in Schedule I to such Pricing
Agreement plus the aggregate number of Optional Shares which the Underwriters
elect to purchase.

     4. Certificates for the Firm Shares and the Optional Shares to be purchased
by each Underwriter pursuant to the Pricing Agreement relating thereto, in the
form specified in such Pricing Agreement and in such authorized denominations
and registered in such names as the Representatives may request upon at least
forty-eight hours' prior notice to the Company, shall be delivered by or on
behalf of the Company to the Representatives for the account of such
Underwriter, against payment by such Underwriter or on its behalf of the
purchase price therefor by wire transfer of Federal (same-day) funds to the
account specified by the Company to Merrill Lynch, Pierce, Fenner & Smith
Incorporated at least twenty-four hours in advance as specified in such Pricing
Agreement, (i) with respect to the Firm Shares, all in the manner and at the
place and time and date specified in such Pricing Agreement or at such other
place and time and date as the Representatives and the Company may agree upon in
writing, such time and date being herein called the "First Time of Delivery" and
(ii) with respect to the Optional Shares, if any, in the manner and at the time
and date specified by the Representatives in the written notice given by the
Representatives of the Underwriters' election to purchase such Optional Shares,
or at such other time and date as the Representatives and the Company may agree
upon in writing, such time and date, if not the First Time of Delivery, herein
called the "Second Time of Delivery". Each such time and date for delivery is
herein called a "Time of Delivery".

     5. The Company agrees with each of the Underwriters of any Designated
Shares:

          (a) To prepare the Prospectus in relation to the applicable Designated
     Shares in a form approved by the Representatives and to file such
     Prospectus pursuant to Rule 424(b) under the Act not later than the
     Commission's close of business on the second business day following the
     execution and delivery of the Pricing Agreement relating to the applicable
     Designated Shares or, if applicable, such earlier time as may be required
     by Rule 424(b); to make no further amendment or any supplement to the
     Registration Statement or Prospectus after the date of the Pricing
     Agreement relating to such Shares and prior to any Time of Delivery for
     such Shares which shall be disapproved by the Representatives for such
     Shares promptly after reasonable notice thereof; to



                                       8


     advise the Representatives promptly of any such amendment or supplement so
     long as the delivery of a prospectus is required in connection with the
     offering or sale of such Shares and furnish the Representatives with copies
     thereof; to file promptly all reports and any definitive proxy or
     information statements required to be filed by the Company with the
     Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange
     Act for so long as the delivery of a prospectus is required in connection
     with the offering or sale of such Shares, and during such same period to
     advise the Representatives, promptly after it receives notice thereof, of
     the time when any amendment to the Registration Statement has been filed or
     becomes effective or any supplement to the Prospectus or any amended
     Prospectus has been filed with the Commission, of the issuance by the
     Commission of any stop order or of any order preventing or suspending the
     use of any prospectus relating to the Shares, of the suspension of the
     qualification of such Shares for offering or sale in any jurisdiction, of
     the initiation or threatening of any proceeding for any such purpose, or of
     any request by the Commission for the amending or supplementing of the
     Registration Statement or Prospectus or for additional information; and, in
     the event of the issuance of any such stop order or of any such order
     preventing or suspending the use of any prospectus relating to the Shares
     or suspending any such qualification, promptly to use its best efforts to
     obtain the withdrawal of such order; Merrill Lynch, Pierce, Fenner & Smith
     Incorporated shall advise the Company when the delivery of a prospectus is
     no longer required in connection with the offer or sale of Shares pursuant
     to this Section 5(a);

          (b) Promptly from time to time to take such action as the
     Representatives may reasonably request to qualify such Shares for offering
     and sale under the securities laws of such jurisdictions as the
     Representatives may reasonably request and to comply with such laws so as
     to permit the continuance of sales and dealings therein in such
     jurisdictions for as long as may be necessary to complete the distribution
     of such Shares, provided that in connection therewith, the Company shall
     not be required to qualify as a foreign corporation or to file a general
     consent to service of process in any jurisdiction;

          (c) Prior to 3:00 P.M., New York City time, on the New York Business
     Day next succeeding the date of this Agreement and from time to time, to
     furnish the Underwriters with written and electronic copies of the
     Prospectus in New York City in such quantities as the Representatives may
     reasonably request, and, if the delivery of a prospectus is required at any
     time in connection with the offering or sale of the Shares and if at such
     time any event shall have occurred as a result of which the Prospectus as
     then amended or supplemented would include an untrue statement of a
     material fact or omit to state any material fact necessary in order to make
     the statements therein, in the light of the circumstances under which they
     were made when such Prospectus is delivered, not misleading, or, if for any
     other reason it shall be necessary during such same period to amend or
     supplement the Prospectus or to file under the Exchange Act any document
     incorporated by reference in the Prospectus in order to comply with the Act
     or the Exchange Act, to notify the Representatives and upon their request
     to file such document and to prepare and furnish without charge to each
     Underwriter and to any dealer in securities as many written and electronic
     copies as the Representatives may from time to time reasonably request of
     an amended Prospectus or a supplement to the Prospectus which will correct
     such statement or omission or effect such compliance;

          (d) To make generally available to its security holders as soon as
     practicable, but in any event not later than eighteen months after the
     effective date of the Registration Statement



                                       9


     (as defined in Rule 158(c) under the Act), an earnings statement of the
     Company and its subsidiaries (which need not be audited) complying with
     Section 11(a) of the Act and the rules and regulations of the Commission
     thereunder (including, at the option of the Company, Rule 158);

          (e) That during the period beginning from the date hereof and
     continuing until the date 30 days after the date of this Underwriting
     Agreement, not to offer, sell, contract to sell, issue or otherwise dispose
     of, except as provided hereunder with regard to the Firm Shares and the
     Optional Shares, if any, any Shares of the Company or any retail preference
     ordinary shares of the Company or any securities that are convertible into
     or exchangeable for, or that represent the right to receive, Shares, any
     such retail preference ordinary shares or any such convertible or
     exchangeable securities, without the prior written consent of Merrill
     Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co.
     Incorporated, on behalf of the Underwriters. For the purposes of the
     foregoing, the term "retail preference ordinary shares" shall not include
     preference ordinary shares sold as part of a unit with stock purchase
     contracts or similar securities pursuant to which the holders thereof are
     obligated to purchase ordinary shares of the Company;

          (f) To use its best efforts to cause the Designated Shares to be
     listed, and to maintain the listing of the Designated Shares, on the New
     York Stock Exchange;

          (g) To use the net proceeds received by it from the sale of the
     Designated Shares pursuant to this Agreement and the Pricing Agreement in
     the manner set forth in the Prospectus under the caption "Use of Proceeds;"

          (h) If the Company elects to rely upon Rule 462(b), the Company shall
     file a Rule 462(b) Registration Statement with the Commission in compliance
     with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of the
     Pricing Agreement with respect to the Designated Shares, and the Company
     shall at the time of filing either pay the Commission the filing fee for
     the Rule 462(b) Registration Statement or give irrevocable instructions for
     the payment of such fee pursuant to Rule 111(b) under the Act; and

          (i) Upon request of any Underwriter, to furnish, or cause to be
     furnished, to such Underwriter an electronic version of the Company's
     corporate logo for use on the website, if any, operated by such Underwriter
     for the purpose of facilitating the on-line offering of the Shares in
     connection with the distribution contemplated by this Underwriting
     Agreement (the "License"); provided, however, that the License shall be
     used solely for the purpose described above, is granted without any fee and
     may not be assigned or transferred.

     6. The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
registration of the Shares under the Act and the issuance and sale of the
Designated Shares, and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, any Preliminary Prospectus
and the Prospectus and any amendments and supplements thereto and the mailing
and delivering of copies thereof to the Underwriters and dealers; (ii) the cost
of printing or producing any Agreement among



                                       10


Underwriters, this Agreement, any Pricing Agreement, any Blue Sky Memorandum,
closing documents (including compilations thereof); (iii) all expenses in
connection with the qualification of the Shares for offering and sale under
state securities laws as provided in Section 5(b) hereof, including the
reasonable fees and disbursements of counsel for the Underwriters in connection
with such qualification and in connection with the Blue Sky and legal investment
surveys; (iv) any filing fees incident to, and the fees and disbursements of
counsel for the Underwriters in connection with, any required reviews by the
National Association of Securities Dealers, Inc. of the terms of the sale of the
Shares; (v) the cost of preparing certificates for the Shares; (vi) the cost and
charges of any transfer agent or registrar or dividend disbursing agent; (vii)
all expenses and taxes arising as a result of the issuance, sale and delivery of
the Designated Shares, of the sale and delivery outside of the Cayman Islands of
the Designated Shares by the Underwriters to the initial purchasers thereof in
the manner contemplated under this Agreement and the Pricing Agreement,
including, in any such case, any Cayman Islands income, capital gains,
withholding, transfer or other tax asserted against a Underwriter by reason of
the purchase and sale of the Designated Shares pursuant to the Underwriting
Agreement and the Pricing Agreement; (viii) any fees charged by securities
rating services for the rating of the Designated Shares; (ix) any cost incurred
in connection with the listing of the Designated Shares on the New York Stock
Exchange; and (x) all other costs and expenses incident to the performance of
its obligations hereunder, under any Pricing Agreement and under any
Over-allotment Options which are not otherwise specifically provided for in this
Section. It is understood, however, that, except as provided in this Section,
and Sections 8, 11 and 19 hereof, the Underwriters will pay all of their own
costs and expenses, including the fees of their counsel, transfer taxes on
resale of any of the Shares by them, and any advertising expenses connected with
any offers they may make.

     7. The obligations of the Underwriters of any Designated Shares under the
Pricing Agreement relating to such Designated Shares shall be subject, in the
discretion of the Representatives, to the condition that all representations and
warranties and other statements of the Company in or incorporated by reference
in the Pricing Agreement relating to such Designated Shares are, at and as of
each Time of Delivery for such Designated Shares, true and correct, the
condition that the Company shall have performed all of its obligations hereunder
theretofore to be performed, and the following additional conditions:

          (a) The Prospectus shall have been filed with the Commission pursuant
     to Rule 424(b) within the applicable time period prescribed for such filing
     by the rules and regulations under the Act and in accordance with Section
     5(a) hereof; if the Company has elected to rely upon Rule 462(b), the Rule
     462(b) Registration Statement shall have become effective by 10:00 P.M.,
     Washington, D.C. time, on the date of the Pricing Agreement with respect to
     such Designated Shares; no stop order suspending the effectiveness of the
     Registration Statement or any part thereof shall have been issued and no
     proceeding for that purpose shall have been initiated or threatened by the
     Commission; and all requests for additional information on the part of the
     Commission shall have been complied with to the Representatives' reasonable
     satisfaction;

          (b) Simpson Thacher & Bartlett, counsel for the Underwriters, shall
     have furnished to the Representatives their written opinion or opinions,
     dated such Time of Delivery, in form and substance reasonably satisfactory
     to the Representatives, in the form attached hereto in



                                       11


     Annex II, and such counsel shall have received such papers and information
     as they may reasonably request to enable them to pass upon such matters;

          (c) Cahill Gordon & Reindel, United States counsel for the Company,
     shall have furnished to the Representatives their written opinion or
     opinions, dated such Time of Delivery, in form and substance reasonably
     satisfactory to the Representatives, in the form attached hereto in Annex
     III;

          (d) Hunter & Hunter, Cayman Islands counsel for the Company, shall
     have furnished to the Representatives their written opinion or opinions,
     dated such Time of Delivery, in form and substance reasonably satisfactory
     to the Representatives, in the form attached hereto in Annex IV;

          (e) Paul S. Giordano, Executive Vice President and General Counsel to
     the Company, shall have furnished to the Representatives his written
     opinion or opinions, dated such Time of Delivery, in form and substance
     reasonably satisfactory to the Representatives, in the form attached hereto
     in Annex V;

          (f) On the date of the Pricing Agreement for such Designated Shares
     and at each Time of Delivery for such Designated Shares,
     PricewaterhouseCoopers LLP, the independent accountants of the Company who
     have certified the financial statements of the Company and its subsidiaries
     included or incorporated by reference in the Registration Statement shall
     have furnished to the Representatives a letter or letters, dated the
     respective dates of delivery thereof, in form and substance reasonably
     satisfactory to the Representatives;

          (g) (i) Neither the Company nor any of its Significant Subsidiaries
     shall have sustained since the date of the latest audited financial
     statements included or incorporated by reference in the Prospectus any loss
     or interference with its business from fire, explosion, flood or other
     calamity, whether or not covered by insurance, or from any labor dispute or
     court or governmental action, order or decree, otherwise than as set forth
     or contemplated in the Prospectus, and (ii) since the respective dates as
     of which information is given in the Prospectus, there shall not have been
     any change in the capital stock (other than changes resulting from the
     exercise of share or over-allotment options or the conversion of warrants
     or capital stock which were outstanding as of such date, or from the
     exercise of options granted after such date in the ordinary course of
     business or from repurchases of capital stock) or long-term debt of the
     Company or any of its Significant Subsidiaries or any change, or any
     development involving a prospective change, in or affecting the general
     affairs, management, financial position, stockholders' equity or results of
     operations of the Company and its Significant Subsidiaries, taken as a
     whole, otherwise than as set forth or contemplated in the Prospectus, the
     effect of which, in any such case described in clause (i) or (ii), is in
     the judgment of the Representatives so material and adverse as to make it
     impractical or inadvisable to proceed with the public offering or the
     delivery of the Designated Shares on the terms and in the manner
     contemplated in the Prospectus;

          (h) At each Time of Delivery, the Shares shall be rated at least "A3"
     by Moody's and "A-" by S&P, and the Company shall have delivered to the
     Representatives a letter dated on,



                                       12


     or prior to, such Time of Delivery, from each such rating agency, or other
     evidence satisfactory to the Representatives confirming that the Shares
     have such ratings. On or after the date of the Pricing Agreement relating
     to the Designated Shares (i) no downgrading shall have occurred in the
     rating accorded the Company's debt securities or preference ordinary shares
     or the Company's financial strength or claims paying ability by any
     "nationally recognized statistical rating organization", as that term is
     defined by the Commission for purposes of Rule 436(g)(2) under the Act, and
     (ii) no such organization shall have publicly announced that it has under
     surveillance or review, with possible negative implications, its rating of
     any of the Company's debt securities or preference ordinary shares or the
     Company's financial strength or claims paying ability;

          (i) On or after the date of the Pricing Agreement relating to the
     Designated Shares there shall not have occurred any of the following: (i) a
     suspension or material limitation in trading in securities generally on the
     New York Stock Exchange (the "Exchange"); (ii) a suspension or material
     limitation in trading in the Company's securities on the Exchange; (iii) a
     general moratorium on commercial banking activities in New York, the Cayman
     Islands or Bermuda declared by the relevant authority or a material
     disruption in commercial banking or securities settlement or clearance
     services in the United States or any other relevant jurisdiction; (iv) the
     outbreak or escalation of hostilities involving the United States, the
     Cayman Islands or Bermuda or the declaration by the United States, the
     Cayman Islands or Bermuda of a national emergency or war, if the effect of
     any such event specified in this clause (iv) in the judgment of the
     Representatives is so material and adverse as to make it impractical or
     inadvisable to proceed with the public offering or the delivery of the
     Designated Shares on the terms and in the manner contemplated in the
     Prospectus; (v) a change or development involving a prospective change in
     the Cayman Islands or Bermuda taxation affecting the Company, the
     Designated Shares or the transfer thereof or the imposition of exchange
     controls by the United States, Bermuda or the Cayman Islands or (vi) the
     occurrence of any other calamity or crisis or any change in financial,
     political or economic conditions in the United States or currency exchange
     rates or controls in the United States, the Cayman Islands, Bermuda or
     elsewhere, if the effect of any such event specified in this clause (vi) in
     the judgment of the Representatives is so material and adverse as to make
     it impractical or inadvisable to proceed with the public offering or the
     delivery of the Designated Shares on the terms and in the manner
     contemplated in the Prospectus;

          (j) The Shares at each Time of Delivery shall have been duly listed,
     subject to notice of issuance, on the Exchange;

          (k) The Company shall have complied with the provisions of Section
     5(c) hereof with respect to the furnishing of prospectuses on the New York
     Business Day next succeeding the date of the Pricing Agreement relating to
     such Designated Shares;

          (l) The Company shall have furnished or caused to be furnished to the
     Representatives at each Time of Delivery for the Designated Shares
     certificates of officers of the Company satisfactory to the Representatives
     as to the accuracy of the representations and warranties of the Company
     herein at and as of such Time of Delivery, as to the performance by the
     Company of all of its obligations hereunder to be performed at or prior to


                                       13


     such Time of Delivery, as to the matters set forth in subsections (a)
     relating to the effectiveness of the Registration Statement and no stop
     orders, the matters set forth in subsections (h) and (i) of this Section
     and as to such other matters as the Representatives may reasonably request;
     and

          (m) Prior to the Closing Date, the Company shall have furnished to the
     Representatives such further information, certificates and documents as the
     Representatives may reasonably request.

     8. The Company will indemnify and hold harmless each Underwriter against
any losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal expenses of one counsel (in addition to
any local counsel) engaged reasonably incurred by such Underwriter in connection
with investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus and any other prospectus
relating to the Shares, or any such amendment or supplement in reliance upon and
in conformity with written information furnished to the Company by any
Underwriter of Designated Shares through the Representatives expressly for use
in the Prospectus.

     (a) Each Underwriter will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus and any other prospectus relating to the Shares, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus and any other prospectus relating to the Shares, or
any such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives expressly for use therein; and will reimburse the Company for
any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such action or claim as such expenses are
incurred, including the reasonable fees and expenses of one counsel (in addition
to any applicable local counsel).



                                       14


     (b) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation (except as set forth below). Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest; (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party; (iii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the institution of
such action or (iv) the indemnifying party shall authorize the indemnified party
to employ separate counsel at the expense of the indemnifying party. No
indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include any statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.

     (c) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters of the Designated Shares on
the other from the offering of the Designated Shares to which such loss, claim,
damage or liability (or action in respect thereof) relates. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect



                                       15


not only such relative benefits but also the relative fault of the Company on
the one hand and the Underwriters of the Designated Shares on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and such Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from such offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by such Underwriters. The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company on the
one hand or such Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would not
be just and equitable if contributions pursuant to this subsection (d) were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the applicable Designated Shares underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The obligations of the Underwriters of Designated
Shares in this subsection (d) to contribute are several in proportion to their
respective underwriting obligations with respect to such Shares and not joint.

     (d) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.

     9. If any Underwriter shall default in its obligation to purchase the Firm
Shares or Optional Shares which it has agreed to purchase under the Pricing
Agreement relating to such Shares, the Representatives may in their discretion
arrange for themselves or another party or other parties satisfactory to the
Company to purchase such Shares on the terms contained herein. If within
thirty-six hours after such default by any Underwriter the Representatives do
not arrange for the purchase of such Firm Shares or Optional Shares, as the case
may be, then the Company shall be entitled to a further period of thirty-six
hours within which to procure another party or other parties satisfactory to the
Representatives to purchase such Shares on such terms. In the event that, within
the respective prescribed period, the Representatives notify the Company that
they have so arranged



                                       16


for the purchase of such Shares, or the Company notifies the Representatives
that it has so arranged for the purchase of such Shares, the Representatives or
the Company shall have the right to postpone a Time of Delivery for such Shares
for a period of not more than seven days, in order to effect whatever changes
may thereby be made necessary in the Registration Statement or the Prospectus,
or in any other documents or arrangements, and the Company agrees to file
promptly any amendments or supplements to the Registration Statement or the
Prospectus which in the opinion of the Representatives may thereby be made
necessary. The term "Underwriter" as used in this Agreement shall include any
person substituted under this Section with like effect as if such person had
originally been a party to the Pricing Agreement with respect to such Designated
Shares.

     (a) If, after giving effect to any arrangements for the purchase of the
Firm Shares or Optional Shares, as the case may be, of a defaulting Underwriter
or Underwriters by the Representatives and the Company as provided in subsection
(a) above, the aggregate number of such Shares which remains unpurchased does
not exceed one-eleventh of the aggregate number of the Firm Shares or Optional
Shares, as the case may be, to be purchased at the respective Time of Delivery,
then the Company shall have the right to require each non-defaulting Underwriter
to purchase the number of Firm Shares or Optional Shares, as the case may be,
which such Underwriter agreed to purchase under the Pricing Agreement relating
to such Designated Shares and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the number of Firm Shares
or Optional Shares, as the case may be, which such Underwriter agreed to
purchase under such Pricing Agreement) of the Firm Shares or Optional Shares, as
the case may be, of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.

     (b) If, after giving effect to any arrangements for the purchase of the
Firm Shares or Optional Shares, as the case may be, of a defaulting Underwriter
or Underwriters by the Representatives and the Company as provided in subsection
(a) above, the aggregate number of Firm Shares or Optional Shares, as the case
may be, which remains unpurchased exceeds one-eleventh of the aggregate number
of the Firm Shares or Optional Shares, as the case may be, to be purchased at
the respective Time of Delivery, as referred to in subsection (b) above, or if
the Company shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase Firm Shares or Optional Shares,
as the case may be, of a defaulting Underwriter or Underwriters, then the
Pricing Agreement relating to such Firm Shares or the Over-allotment Option
relating to such Optional Shares, as the case may be, shall thereupon terminate,
without liability on the part of any non-defaulting Underwriter or the Company,
except for the expenses to be borne by the Company and the Underwriters as
provided in Section 6 hereof and the indemnity and contribution agreements in
Section 8 hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.

     10. The respective indemnities, agreements, representations, warranties and
other statements of the Company and the several Underwriters, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Shares.



                                       17


     11. If any Pricing Agreement or Over-allotment Option shall be terminated
pursuant to Section 9 hereof, the Company shall not then be under any liability
to any Underwriter with respect to the Firm Shares or Optional Shares with
respect to which such Pricing Agreement shall have been terminated except as
provided in Sections 6, 8 and 19 hereof; but, if for any other reason,
Designated Shares are not delivered by or on behalf of the Company as provided
herein, the Company will reimburse the Underwriters through the Representatives
for all out-of-pocket expenses approved in writing by the Representatives,
including reasonable fees and disbursements of counsel, reasonably incurred by
the Underwriters in making preparations for the purchase, sale and delivery of
such Designated Shares, but the Company shall then be under no further liability
to any Underwriter with respect to such Designated Shares except as provided in
Sections 6, 8 and 19 hereof.

     12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Shares shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.

     All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary; provided, however, that any notice
to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its principal
address, which address will be supplied to the Company by the Representatives
upon written request. Any such statements, requests, notices or agreements shall
take effect upon receipt thereof.

     13. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, the Company and, to the extent
provided in Sections 8 and 10 hereof, the officers and directors of the Company
and each person who controls the Company or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of the Shares from
any Underwriter shall be deemed a successor or assign by reason merely of such
purchase.

     14. The Company irrevocably (i) agrees that any legal suit, action or
proceeding against the Company brought by any Underwriter or by any person who
controls any Underwriter arising out of or based upon this Agreement, any
Pricing Agreement or the transactions contemplated hereby or thereby may be
instituted in the federal district court for the Southern District of New York
and the New York County Court, (ii) waives, to the fullest extent it may
effectively do so, any objection which it may now or hereafter have to the
laying of venue of any such proceeding and (iii) submits to the exclusive
jurisdiction of such courts in any such suit, action or proceeding. The Company
has appointed CT Corporation System, New York, New York, as its authorized agent
(the "Authorized Agent") upon whom process may be served in any such action
arising out of or based on this Agreement, any Pricing Agreement or the
transactions contemplated hereby or thereby which may be instituted in the
federal district court for the Southern District of New York and the New York
County



                                       18


Court by any Underwriter or by any person who controls any Underwriter,
expressly consents to the jurisdiction of any such court in respect of any such
action, and waives any other requirements of or objections to personal
jurisdiction with respect thereto. Such appointment shall be irrevocable. The
Company represents and warrants that the Authorized Agent has agreed to act as
such agent for service of process and agrees to take any and all action,
including the filing of any and all documents and instruments, that may be
necessary to continue such appointment in full force and effect as aforesaid.
Service of process upon the Authorized Agent and written notice of such service
to the Company shall be deemed, in every respect, effective service of process
upon the Company.

     15. Time shall be of the essence in each Pricing Agreement. As used herein,
the term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business. "New York Business Day" shall mean each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in New York are generally authorized or obligated by law or
executive order to close.

     16. This Agreement and each Pricing Agreement shall be governed by and
construed in accordance with the laws of the State of New York.

     17. This Agreement and each Pricing Agreement may be executed by any one or
more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.

     18. The Company is authorized, subject to applicable law, to disclose any
and all aspects of this potential transaction that are necessary to support any
U.S. federal income tax benefits expected to be claimed with respect to such
transaction, without the Underwriters imposing any limitation of any kind.

     19. In respect of any judgment or order given or made for any amount due
hereunder or under any Pricing Agreement that is expressed and paid in a
currency (the "judgment currency") other than United States dollars, the Company
will indemnify each Underwriter against any loss incurred by such Underwriter as
a result of any variation between (i) the rate of exchange at which the United
States dollar amount is converted into the judgment currency for the purpose of
such judgment or order and (ii) the rate of exchange at which an Underwriter is
able to purchase United States dollars with the amount of judgment currency
actually received by such Underwriter. The foregoing indemnity shall constitute
a separate and independent obligation of the Company and shall continue in full
force and effect notwithstanding any such judgment or order aforesaid. The term
"rate of exchange" shall include any premiums and costs of exchange payable in
connection with the purchase of or conversion into United States dollars.

      [Remainder of Page Intentionally Left Blank; Signature Page Follows]



                                       19




     If the foregoing is in accordance with your understanding, please sign and
return to us one for the Company and one for each of the Representatives
counterparts hereof.

                                      Very truly yours,

                                      XL Capital Ltd

                                      By: /s/ Jerry de St. Paer
                                          -------------------------------------
                                            Name:   Jerry de St. Paer
                                            Title:  Executive Vice President &
                                                      Chief Financial Officer

Accepted as of the date hereof:

Merrill Lynch, Pierce, Fenner & Smith
   Incorporated
Morgan Stanley & Co. Incorporated

By:  Merrill Lynch, Pierce, Fenner & Smith
         Incorporated


By:  /s/ Kerry Cannella
     -----------------------------
       Name:   Kerry Cannella
       Title:  Vice President




                                       20








                                                                         ANNEX I

                                Pricing Agreement


Merrill Lynch, Pierce, Fenner & Smith
   Incorporated
Morgan Stanley & Co. Incorporated
    As Representatives of the several
      Underwriters named in Schedule I hereto,
c/o Merrill Lynch, Pierce, Fenner & Smith
    Incorporated
World Financial Center - North Tower
250 Vesey Street
New York, New York 10281


                                                               November __, 2002

Ladies and Gentlemen:

     XL Capital Ltd, a Cayman Islands exempted limited company (the "Company"),
proposes, subject to the terms and conditions stated herein and in the
Underwriting Agreement, dated November 13, 2002 (the "Underwriting Agreement"),
between the Company on the one hand and Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Morgan Stanley & Co. Incorporated, on the other hand, to issue
and sell to the Underwriters named in Schedule I hereto (the "Underwriters") the
Shares specified in Schedule II hereto (the "Designated Shares") consisting of
Firm Shares and any Optional Shares the Underwriters may elect to purchase. Each
of the provisions of the Underwriting Agreement is incorporated herein by
reference in its entirety, and shall be deemed to be a part of this Agreement to
the same extent as if such provisions had been set forth in full herein; and
each of the representations and warranties set forth therein shall be deemed to
have been made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus relating to the Designated Shares which
are the subject of this Pricing Agreement. Each reference to the Representatives
herein and in the provisions of the Underwriting Agreement so incorporated by
reference shall be deemed to refer to you. Unless otherwise defined herein,
terms defined in the Underwriting Agreement are used herein as therein defined.
The Representatives designated to act on behalf of the Representatives and on
behalf of each of the Underwriters of the Designated Shares pursuant to Section
12 of the Underwriting Agreement and the address of the Representatives referred
to in such Section 12 are set forth in Schedule II hereto.

     An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Shares, in the form
heretofore delivered to you is now proposed to be filed with the Commission.

     Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees to
issue and sell to each of the





Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from the Company, at the time and place and at the purchase price to
the Underwriters set forth in Schedule II hereto, the number of Firm Shares set
forth opposite the name of such Underwriter in Schedule I hereto and, (b) in the
event and to the extent that the Underwriters shall exercise the election to
purchase Optional Shares, as provided below, the Company agrees to issue and
sell to each of the Underwriters, and each of the Underwriters agrees, severally
and not jointly, to purchase from the Company at the purchase price to the
Underwriters set forth in Schedule II hereto that portion of the number of
Optional Shares as to which such election shall have been exercised.

     The Company hereby grants to each of the Underwriters the right to purchase
at their election up to the number of Optional Shares set forth opposite the
name of such Underwriter in Schedule I hereto on the terms referred to in the
paragraph above for the sole purpose of covering over-allotments in the sale of
the Firm Shares. Any such election to purchase Optional Shares may be exercised
by written notice from the Representatives to the Company given within a period
of 20 calendar days after the date of this Pricing Agreement, setting forth the
aggregate number of Optional Shares to be purchased and the date on which such
Optional Shares are to be delivered, as determined by the Representatives, but
in no event earlier than the First Time of Delivery or, unless the
Representatives and the Company otherwise agree in writing, no earlier than two
or later than ten business days after the date of such notice.




     If the foregoing is in accordance with your understanding, please sign and
return to us one for the Company and one for each of the Representatives plus
one for each counsel counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the Underwriters
and the Company. It is understood that your acceptance of this letter on behalf
of each of the Underwriters is or will be pursuant to the authority set forth in
a form of Agreement among Underwriters, the form of which shall be submitted to
the Company for examination, upon request, but without warranty on the part of
the Representatives as to the authority of the signers thereof.


                                   Very truly yours,

                                   XL Capital Ltd

                                   By: ________________________________
                                       Name:
                                       Title:



Accepted as of the date hereof:

Merrill Lynch, Pierce, Fenner & Smith
   Incorporated
Morgan Stanley & Co. Incorporated

By:  Merrill Lynch, Pierce, Fenner & Smith
         Incorporated


By:  __________________________________
       Name:
       Title:


For themselves and the other several
Underwriters named in Schedule I to
the foregoing Agreement.






                                   SCHEDULE I


           Underwriter                   Number of Firm      Maximum Number of
                                          Shares to be            Optional
                                           Purchased        Shares Which May be
                                                                 Purchased













        Total........................
                                        ================       ===============






                                   SCHEDULE II


Title of Designated Shares:



Number of Designated Shares:

     Number of Firm Shares:

     Maximum Number of Optional Shares:

Initial Offering Price to Public:

                  per Share

Purchase Price by Underwriters:

                  per Share

Commission Payable to Underwriters:

                  per Share

Form of Designated Shares:


Specified Funds for Payment of Purchase Price:


Describe any lock-up provisions with respect to the Designated Shares:


Time of Delivery:


Time of Delivery Location:


Names and Addresses of Representatives:


Liquidation Preference:


Redemption Provisions:


Dividend Rate:


Dividend Payment Dates:


Conversion Provisions:


Other Terms:







                                    ANNEX II
                   SIMPSON THACHER & BARTLETT FORM OF OPINION






                                    ANNEX III
                     CAHILL GORDON & REINDEL FORM OF OPINION









                                    ANNEX IV
                         HUNTER & HUNTER FORM OF OPINION







                                     ANNEX V
                         XL CAPITAL LTD FORM OF OPINION

EX-1.1(F)

                                                                  Execution Copy

                                Pricing Agreement


Merrill Lynch, Pierce, Fenner & Smith
            Incorporated
Morgan Stanley & Co. Incorporated
    As Representatives of the several
      Underwriters named in Schedule I hereto,
c/o Merrill Lynch, Pierce, Fenner & Smith
    Incorporated
World Financial Center - North Tower
250 Vesey Street
New York, New York 10281

                                                               November 13, 2002

Ladies and Gentlemen:

     XL Capital Ltd, a Cayman Islands exempted limited company (the "Company"),
proposes, subject to the terms and conditions stated herein and in the
Underwriting Agreement, dated November 13, 2002 (the "Underwriting Agreement"),
between the Company on the one hand and Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Morgan Stanley & Co. Incorporated, on the other hand, to issue
and sell to the Underwriters named in Schedule I hereto (the "Underwriters") the
Shares specified in Schedule II hereto (the "Designated Shares") consisting of
Firm Shares and any Optional Shares the Underwriters may elect to purchase. Each
of the provisions of the Underwriting Agreement is incorporated herein by
reference in its entirety, and shall be deemed to be a part of this Agreement to
the same extent as if such provisions had been set forth in full herein; and
each of the representations and warranties set forth therein shall be deemed to
have been made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus relating to the Designated Shares which
are the subject of this Pricing Agreement. Each reference to the Representatives
herein and in the provisions of the Underwriting Agreement so incorporated by
reference shall be deemed to refer to you. Unless otherwise defined herein,
terms defined in the Underwriting Agreement are used herein as therein defined.
The Representatives designated to act on behalf of the Representatives and on
behalf of each of the Underwriters of the Designated Shares pursuant to Section
12 of the Underwriting Agreement and the address of the Representatives referred
to in such Section 12 are set forth in Schedule II hereto.

     An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Shares, in the form
heretofore delivered to you is now proposed to be filed with the Commission.

     Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the time and place
and at the purchase price to the Underwriters set forth in





Schedule II hereto, the number of Firm Shares set forth opposite the name of
such Underwriter in Schedule I hereto, and (b) in the event and to the extent
that the Underwriters shall exercise the election to purchase Optional Shares,
as provided below, the Company agrees to issue and sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from the Company at the purchase price to the Underwriters set forth in
Schedule II hereto that portion of the number of Optional Shares as to which
such election shall have been exercised.

     The Company hereby grants to each of the Underwriters the right to purchase
at their election up to the number of Optional Shares set forth opposite the
name of such Underwriter in Schedule I hereto on the terms referred to in the
paragraph above for the sole purpose of covering over-allotments in the sale of
the Firm Shares. Any such election to purchase Optional Shares may be exercised
by written notice from the Representatives to the Company given within a period
of 20 calendar days after the date of this Pricing Agreement, setting forth the
aggregate number of Optional Shares to be purchased and the date on which such
Optional Shares are to be delivered, as determined by the Representatives, but
in no event earlier than the First Time of Delivery or, unless the
Representatives and the Company otherwise agree in writing, no earlier than two
or later than ten business days after the date of such notice.




     If the foregoing is in accordance with your understanding, please sign and
return to us one for the Company and one for each of the Representatives plus
one for each counsel counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the Underwriters
and the Company. It is understood that your acceptance of this letter on behalf
of each of the Underwriters is or will be pursuant to the authority set forth in
a form of Agreement among Underwriters, the form of which shall be submitted to
the Company for examination, upon request, but without warranty on the part of
the Representatives as to the authority of the signers thereof.


                                      Very truly yours,

                                      XL Capital Ltd

                                      By: /s/ Jerry de St. Paer
                                          -------------------------------------
                                            Name:   Jerry de St. Paer
                                            Title:  Executive Vice President &
                                                      Chief Financial Officer

Accepted as of the date hereof:

Merrill Lynch, Pierce, Fenner & Smith
   Incorporated
Morgan Stanley & Co. Incorporated

By:  Merrill Lynch, Pierce, Fenner & Smith
         Incorporated


By:  /s/ Kerry Cannella
     -----------------------------
       Name:   Kerry Cannella
       Title:  Vice President



For themselves and the other several
Underwriters named in Schedule I to
the foregoing Agreement.






                                   SCHEDULE I





                                  Underwriter                                     Number of Firm   Maximum Number
                                                                                   Shares to be      of Optional
                                                                                     Purchased      Shares Which
                                                                                                       May be
                                                                                                      Purchased

                                                                                                     
Merrill Lynch, Pierce, Fenner & Smith                                                   1,150,000          172,500
            Incorporated
Morgan Stanley & Co. Incorporated                                                       1,150,000          172,500
A.G. Edwards & Sons, Inc.                                                               1,140,000          171,000
Goldman, Sachs & Co.                                                                    1,140,000          171,000
Salomon Smith Barney Inc.                                                               1,140,000          171,000
UBS Warburg LLC                                                                         1,140,000          171,000
Wachovia Securities, Inc.                                                               1,140,000          171,000
Banc of America Securities LLC                                                            200,000           30,000
Bear, Stearns & Co. Inc.                                                                  200,000           30,000
Credit Suisse First Boston Corporation                                                    200,000           30,000
Deutsche Bank Securities Inc.                                                             200,000           30,000
Lehman Brothers Inc.                                                                      200,000           30,000
H&R Block Financial Advisors, Inc.                                                         50,000            7,500
HSBC Securities (USA) Inc.                                                                 50,000            7,500
J.P. Morgan Securities Inc.                                                                50,000            7,500
Legg Mason Wood Walker, Incorporated                                                       50,000            7,500
McDonald Investments Inc., a KeyCorp Company                                               50,000            7,500
Quick & Reilly, Inc.                                                                       50,000            7,500
RBC Dain Rauscher Inc.                                                                     50,000            7,500
Raymond James & Associates, Inc.                                                           50,000            7,500
Charles Schwab & Co., Inc.                                                                 50,000            7,500
TD Waterhouse Investor Services, Inc.                                                      50,000            7,500
U.S. Bancorp Piper Jaffray Inc.                                                            50,000            7,500
Wells Fargo Investment Services, LLC.                                                      50,000            7,500
ABN AMRO Incorporated                                                                      25,000            3,750
Advest, Inc.                                                                               25,000            3,750
BB&T Capital Markets, A division of Scott and Stringfellow, Inc.                           25,000            3,750
BNY Capital Markets, Inc.                                                                  25,000            3,750
Robert W. Baird & Co. Incorporated                                                         25,000            3,750
Crowell, Weedon & Co.                                                                      25,000            3,750
D.A. Davidson & Co.                                                                        25,000            3,750
Fahnestock & Co. Inc.                                                                      25,000            3,750
Fifth Third Securities, Inc.                                                               25,000            3,750
J.J.B. Hilliard, W.L. Lyons, Inc.                                                          25,000            3,750
Janney Montgomery Scott LLC                                                                25,000            3,750




Mesirow Financial, Inc.                                                                    25,000            3,750
Morgan Keegan & Company, Inc.                                                              25,000            3,750
NatCity Investments, Inc.                                                                  25,000            3,750
SWS Securities, Inc.                                                                       25,000            3,750
Stifel, Nicolaus & Company, Incorporated                                                   25,000            3,750

        Total...........................................................               10,000,000        1,500,000
                                                                                       ==========        =========






                                   SCHEDULE II


Title of Designated Shares:


     7 5/8% Series B Preference Ordinary Shares



Number of Designated Shares:

     Number of Firm Shares: 10,000,000

     Maximum Number of Optional Shares: 1,500,000



Initial Offering Price to Public:

     $25.00 per Share, plus accrued dividends, if any, from November 18, 2002.



Purchase Price by Underwriters:

     $24.2125 per Share, plus accrued dividends, if any, from November 18, 2002.



Commission Payable to Underwriters:

     3.15% per Share



Date from which Dividends will Accumulate:

     November 18, 2002



Form of Designated Shares:

     Book-entry only form represented by one or more global securities deposited
     with The Depository Trust Company ("DTC") or its designated custodian, to
     be made available for checking by the Representatives at least 24 hours
     prior to the Time of Delivery.



Specified Funds for Payment of Purchase Price:

     Federal (same day) funds.



Describe any lock-up provisions with respect to the Designated Shares:

                  During the period beginning from the date hereof and
         continuing until the date 30 days after the date of this Pricing
         Agreement, the Company will not offer, sell, contract to sell, issue or
         otherwise dispose of, except as provided hereunder with regard to the
         Firm Shares and the Optional Shares, if any, any Shares of the Company
         or any retail preference ordinary shares of the Company or any
         securities that are convertible into or exchangeable for, or that
         represent the right to receive, Shares, any such retail





          preference ordinary shares or any such convertible or exchangeable
          securities, without the prior written consent of Merrill Lynch,
          Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co.
          Incorporated, on behalf of the Underwriters. For the purposes of the
          foregoing, the term "retail preference ordinary shares" shall not
          include preference ordinary shares sold as part of a unit with stock
          purchase contracts or similar securities pursuant to which the holders
          thereof are obligated to purchase ordinary shares of the Company.



Time of Delivery:

          10:00 A.M. (New York City time), November 18, 2002.



Time of Delivery Location:

         Simpson Thacher & Bartlett
         425 Lexington Avenue
         New York, New York  10017

Names and Addresses of Representatives:

         Merrill Lynch, Pierce, Fenner & Smith Incorporated
         World Financial Center - North Tower
         250 Vesey Street
         New York, New York 10281
         Attn:  Financial Institutions Group, 7th Fl.
         Facsimile No. 212-449-1987

         Morgan Stanley & Co. Incorporated
         1585 Broadway - 2nd Floor
         New York, New York 10036
         Attention: Steve Anderson
         Facsimile No. 212-761-0781


Liquidation Preference:

         $25 per share

Redemption Provisions:

          The Designated Shares are not redeemable prior to November 18, 2007,
     except as described below. On and after November 18, 2007, the Company, at
     its option, upon not less than 30 nor more than 60 days prior written
     notice, may redeem the Designated Shares, in whole at any time or in part
     from time to time, for cash at a redemption price of $25 per share, plus
     accrued and unpaid dividends, if any, to the date of redemption, without
     interest on such unpaid dividends. At any time prior to November 18, 2007,
     if the Company shall have:

          o submitted to the holders of its ordinary shares a proposal for an
          amalgamation, consolidation, merger, arrangement, reconstruction,




          reincorporation, deregistration or any other similar transaction
          involving the Company that requires, or

          o submitted any proposal for any other matter that, as a result of any
          change in Cayman Islands law after the date of this Pricing Agreement
          (whether by enactment or official interpretation) requires,

     in each case, a vote of the holders of the Designated Shares at the time
     outstanding voting separately as a single class (alone or with one or more
     class or series of preference ordinary shares), then the Company will have
     the option upon not less than 30 nor more than 60 days' prior written
     notice to redeem all of the outstanding Designated Shares for cash at a
     redemption price of $26 per share, plus accrued and unpaid dividends, if
     any, to the date of redemption, without interest on such unpaid dividends.

          In addition, the Company shall have the option to redeem for cash the
     Designated Shares at any time, in whole or in part, upon not less than 30
     nor more than 60 days' prior written notice, at a redemption price of $25
     per share, plus accrued and unpaid dividends, if any, to the date of
     redemption, without interest on such unpaid dividends, if there is a
     "change in tax law" that would require the Company or any successor company
     to pay additional amounts with respect to the Designated Shares on the next
     succeeding dividend payment date, and the payment of those additional
     amounts cannot be avoided by the use of any reasonable measures available
     to the Company or any successor company. For the purposes of this
     provision, a "change in tax law" shall be (a) a change in or amendment to
     laws, regulations or rulings of any jurisdiction, political subdivision or
     taxing authority described in the next sentence, (b) a change in the
     official application or interpretation of those laws, regulations or
     rulings, or (c) any execution of or amendment to any treaty affecting
     taxation to which any jurisdiction, political subdivision or taxing
     authority described in the next sentence is party after November 13, 2002.
     The jurisdictions, political subdivisions and taxing authorities referred
     to in the previous sentence are (a) the Cayman Islands or any political
     subdivision or governmental authority of or in the Cayman Islands with the
     power to tax, (b) any jurisdiction from or through which the Company or its
     paying agent is making payments on the Designated Shares or any political
     subdivision or governmental authority of or in that jurisdiction with the
     power to tax, or (c) any other jurisdiction in which the Company or its
     successor company is organized or generally subject to taxation or any
     political subdivision or governmental authority of or in that jurisdiction
     with the power to tax, as more fully described under the caption
     "Description of the Series B Preference Shares - Tax Redemption" in the
     Prospectus Supplement, dated November 13, 2002, with respect to the
     Designated Shares.


          Furthermore, the Company shall have the option to redeem for cash the
     Designated Shares at any time, in whole or in part, upon not less than 30
     nor more than 60 days' prior written notice, at a redemption price of $25
     per share, plus accrued and unpaid dividends, if any, to the date of
     redemption, without interest on such unpaid dividends, if the entity formed
     by a consolidation,





     merger or amalgamation involving the Company or the entity to which the
     Company conveys, transfers or leases substantially all of its properties
     and assets is required to pay additional amounts in respect of any tax,
     assessment or governmental charge imposed on any holder of Designated
     Shares as a result of a change in tax law that occurred after the date of
     the consolidation, merger, amalgamation, conveyance, transfer or lease and
     the payment of those amounts cannot be avoided by the use of any reasonable
     measures available to the Company or such successor, as more fully
     described under the caption "Description of the Series B Preference Shares
     - Tax Redemption" in the Prospectus Supplement, dated November 13, 2002,
     with respect to the Designated Shares (the "Prospectus Supplement").



Dividend Rate:

     7.625% of the liquidation preference per annum (equal to $1.90625 per
     share)



Dividend Payment Dates:

     March 31, June 30, September 30 and December 31 of each year, beginning
     December 31, 2002

Conversion Provisions:

     None

Other Terms:

          Generally, the Shares have no voting rights. Whenever dividends
     payable on the Shares are in arrears (whether or not such dividends have
     been earned or declared) in an aggregate amount equivalent to dividends for
     six full dividend periods (whether or not consecutive), the holders of
     Shares, voting as a single class with all other series of the preference
     ordinary shares that are also in arrears and have such a right, will have
     the right to elect two persons who will then be appointed as additional
     directors to the Company's Board of Directors. Whenever all arrearages in
     dividends on the Shares have been paid in full, then the right of holders
     of the Shares to be represented by directors will cease (but subject always
     to the same provision for the vesting of such rights in the case of any
     future arrearages in an amount equivalent to dividends for six full
     dividend periods). Without the sanction of a special resolution passed by
     the holders of the Shares, the Company may not take any action which would
     vary the rights attached to the Shares unless the Shares have been
     previously redeemed or called for redemption.

          Payments on the Shares shall be made free and clear of and without
     deduction or withholding for or on account of any present or future taxes,
     assessments or other governmental charges imposed by any jurisdiction,
     political subdivision or taxing authority described in the second paragraph
     under "Redemption Provisions", unless the deduction or withholding of such
     taxes, assessments or other governmental charges is required by law,
     regulations or rulings or the application or official interpretation of
     such law, regulations or rulings. In that event, the Company shall pay or
     cause to be paid additional amounts to the registered holders of the Shares
     as additional dividends to make up for any deduction or withholding for any
     present or future taxes, assessments or other governmental charges imposed
     by any jurisdiction, political subdivision or taxing authority described in
     the second paragraph under "Redemption Provisions" in respect of any
     amounts that the Company or a successor company must pay with respect to
     the Shares, so that the net amounts paid to the holders of the Shares,
     after that deduction





     or withholding, shall equal the respective amounts that would have been
     receivable by such holders had no such withholding or deduction been
     required. However, the Company shall not be obligated to pay additional
     amounts to any holder in limited circumstances, as more fully described
     under the caption "Description of the Series B Preference Shares -
     Additional Amounts" in the Prospectus Supplement.

EX-4.18

Series B Preference Ordinary Shares

     1. RESOLVED that, a class of Ordinary Shares in the capital of the Company
     be designated as "Series B Preference Ordinary Shares". The Series B
     Preference Ordinary Shares shall be cumulative preference ordinary shares
     with a nominal value of US$0.01 and, subject to the Articles and the
     provisions of and restrictions contained in the Companies Law (2002
     Revision) and every statutory modification or re-enactment thereof for the
     time being in force (the "Law"), shall have the following preferences and
     rights and shall be subject to the following restrictions:

          (a) Liquidation Preference. On any voluntary or involuntary return of
          assets on liquidation, dissolution, winding-up or otherwise of the
          Company, the assets of the Company legally available for distribution
          among shareholders shall be applied first in repaying to the holders
          of the Series B Preference Ordinary Shares (the "Holders") an amount
          equal to US$25.00 per Series B Preference Ordinary Share (inclusive of
          the nominal amount thereof) plus all accrued and unpaid dividends
          (whether or not earned or declared), if any, to the date fixed for
          distribution, in preference to the repayment of such nominal amount of
          and any share premium or other amounts paid on the Class A Ordinary
          Shares and the Class B Ordinary Shares (together, the "Ordinary
          Shares") or any other shares ranking junior in right of payment to the
          Series B Preference Ordinary Shares as to the voluntary or involuntary
          return of assets on liquidation, dissolution, winding-up or otherwise
          of the Company or as to dividends (including the Ordinary Shares, the
          "Junior Shares") to the holders of such Junior Shares, without
          interest on such unpaid dividends. In the event that upon any such
          voluntary or involuntary return of assets on liquidation, dissolution,
          winding-up or otherwise, the assets of the Company available are
          insufficient to pay the amount of the liquidation distributions on all
          outstanding Series B Preference Ordinary Shares as referred to above
          and the corresponding amounts payable on all other shares ranking pari
          passu with the Series B Preference Ordinary Shares with respect to the
          payment of dividends and amounts upon any voluntary or involuntary
          return of assets on liquidation, dissolution, winding-up or otherwise
          of the Company (including, without limitation, the Series A Preference
          Ordinary Shares) ("Parity Shares"), then the holders of the Series B
          Preference Ordinary Shares and all such Parity Shares shall share


                                      -2-


          ratably in such distribution of assets in proportion to the full
          liquidating distributions to which they would otherwise be
          respectively entitled. The Series B Preference Ordinary Shares shall
          not be convertible into or exchangeable for any other shares of the
          Company.

          (b) Dividend Rights. (i) The holders of the Series B Preference
          Ordinary Shares shall be entitled to receive cumulative preferential
          cash dividends in respect of their Series B Preference Ordinary Shares
          at the percentage rate per annum on their liquidation value specified
          by the Attorneys (as defined below) (or by either of them) on the date
          of pricing of such shares (the "Pricing Date"). Such dividends shall
          be payable in arrears in equal amounts (except as set forth below with
          respect to the initial dividend period) on 31st March, 30th June, 30th
          September and 31st December when and if declared by the Directors in
          each year or, if such date is not a day on which banks are authorised
          to open for business in New York and Bermuda (a "Business Day"), on
          the Business Day immediately after such date. Such dividends will
          begin to accrue and will be cumulative from the date of original
          issuance. The first dividend, which if declared will be payable on 31
          March 2003, will represent the period of time from and will accrue
          from the date of original issuance up to 31 March 2003. The
          dividend for such initial period and any other dividend payable on the
          Series B Preference Ordinary Shares for any partial dividend period
          shall be computed on the basis of a 360-day year consisting of twelve
          (12) 30-day months. Dividends will be payable to holders of record as
          they appear in the Company's register of members at the close of
          business on the applicable record date, which will be one day prior to
          the dividend payment date as long as all of the Series B Preference
          Ordinary Shares remain in book-entry form. If any of the Series B
          Preference Ordinary Shares are not in book-entry form, the record date
          will be 15 days prior to the dividend payment date (whether or not
          such date is a Business Day). Holders of Series B Preference Ordinary
          Shares will not be entitled to any dividends in excess of full
          cumulative dividends as described above. Dividends on the Series B
          Preference Ordinary Shares will accrue and will be fully cumulative,
          whether or not there are funds legally available for the payment of
          such dividends and whether or not the dividends are declared. No
          interest or sum of money in lieu of interest will be payable on any
          dividend



                                      -3-


          payment or on any payment on Series B Preference Ordinary Shares which
          is in arrears. Any dividend payment made on Series B Preference
          Ordinary Shares will first be credited against the earliest accrued
          but unpaid dividend due with respect to Series B Preference Ordinary
          Shares which remains payable.

               (ii) As long as any Series B Preference Ordinary Shares are
          outstanding, no dividends or other distributions may be declared or
          paid or set apart for payment on any class or series of Parity Shares
          for any period unless either (1) full cumulative dividends have been
          or contemporaneously are declared and paid or declared and a sum
          sufficient for the payment thereof set apart for such payments on the
          Series B Preference Ordinary Shares for all dividend periods
          terminating on or prior to the dividend payment date on such Parity
          Shares, or (2) all dividends declared upon the Series B Preference
          Ordinary Shares and any Parity Shares are declared pro rata so that
          the amount of dividends declared per share on the Series B Preference
          Ordinary Shares and any Parity Shares will in all cases bear to each
          other the same ratio that accrued and unpaid dividends per share on
          the Series B Preference Ordinary Shares and such Parity Shares bear to
          each other.

               (iii) As long as any Series B Preference Ordinary Shares are
          outstanding (1) no dividends (other than those paid in Ordinary Shares
          or other shares ranking junior in right of payment to the Series B
          Preference Ordinary Shares as to dividends and as to any voluntary or
          involuntary return of assets on liquidation, dissolution, winding-up
          or otherwise of the Company (including the Ordinary Shares, "Fully
          Junior Shares")) may be declared or paid or set apart for payment upon
          any Junior Shares, (2) no other distribution (other than those paid in
          Fully Junior Shares) may be declared or paid or set apart for payment
          upon any Junior Shares and (3) no Junior Shares will be redeemed,
          purchased or otherwise acquired (other than a redemption, purchase or
          other acquisition of Ordinary Shares made for purposes of any employee
          incentive, stock, benefit or any similar plan of the Company or any of
          its subsidiaries) for any consideration (or any moneys be paid to or
          made available for a sinking fund or the redemption of any Junior
          Shares) by the Company (except by conversion into or exchange for
          Fully Junior Shares), unless, in any such case, full cumulative
          dividends on the Series B Preference Ordinary Shares and any Parity
          Shares have



                                      -4-


          been or contemporaneously are declared and paid, or declared and a sum
          sufficient for the payment thereof set apart for payment, for all
          dividend periods terminating on or prior to the date such dividends or
          distributions are declared or paid on the Junior Shares, or such
          Junior Shares are redeemed, purchased or otherwise acquired.

     (c) Voting Rights. (i) Subject to clause (iii) below, and unless required
     by law or court order, the holders of Series B Preference Ordinary Shares
     shall not be entitled to receive notice of nor to attend nor to vote at any
     general meeting of the Company.

               (ii) The holders of Series B Preference Ordinary Shares shall be
          entitled to one vote for each share held at any separate general
          meeting of that class or series (i.e., preference ordinary shares or
          Series B Preference Ordinary Shares, respectively), subject to the
          provisions of Article 41 of the Articles. Subject to the applicable
          provisions of the Articles and the Law, unless the Series B Preference
          Ordinary Shares have been previously redeemed or called for redemption
          (and funds necessary for such redemption have been set apart by the
          Company in trust for the benefit of the holders of the Series B
          Preference Ordinary Shares so called for redemption), the Company may
          not take any action which would vary the rights attached to the Series
          B Preference Ordinary Shares and no class or series of shares may be
          created which ranks senior to the Series B Preference Ordinary Shares
          as to dividend rights or as to the return of assets on liquidation,
          dissolution, winding up or otherwise of the Company, in each case,
          without the approval of a special resolution in writing by the holders
          of 100% of the Series B Preference Ordinary Shares or the sanction of
          a special resolution passed by the votes of at least two-thirds of the
          outstanding Series B Preference Ordinary Shares cast at a separate
          general meeting of the holders of the Series B Preference Ordinary
          Shares. At every separate meeting of the holders of the Series B
          Preference Ordinary Shares, the necessary quorum shall be any one or
          more persons present in person or by proxy holding not less than 50%
          of the issued shares of that class. Notwithstanding the foregoing and
          subject to the applicable



                                      -5-


          provisions of the Articles and the Law, holders of the Series B
          Preference Ordinary Shares are not entitled to vote on any sale of all
          or substantially all of the assets of the Company, and the issuance of
          any shares that are in parity with the Series B Preference Ordinary
          Shares with respect to payment of dividends and distribution of assets
          in liquidation.

               (iii) If at any time the equivalent of six (6) or more full
          quarterly dividends (whether consecutive or not) on the Series B
          Preference Ordinary Shares shall be in arrears (whether or not such
          dividends shall have been earned or declared), then during such period
          until all such arrearages in dividends shall have been paid in full,
          and only during such period (the "Voting Period"), the holders of the
          Series B Preference Ordinary Shares voting together with any other
          series or classes of preference ordinary shares also in arrears and
          having such right shall be entitled by ordinary resolution at a
          separate meeting of such holders to elect two persons and nominate
          such elected persons for appointment by the Board of Directors as
          additional Directors of the Company. In no event shall there be more
          than two Directors elected by the holders of preference ordinary
          shares (whether voting alone as a series or class or with another
          series or class so in arrears and having such right).

               (iv) Any Director who shall have been elected pursuant to
          paragraph (2)(c)(iii) above may be removed at any time during a Voting
          Period, either for or without cause, by, and only by, ordinary
          resolution of the holders of the outstanding preference ordinary
          shares of the relevant series at a special separate general meeting of
          such holders called for that purpose. Any vacancy thereby created may
          be filled during such Voting Period by ordinary resolution of the
          holders of preference ordinary shares of all the relevant series at
          such a meeting. Any Director elected by holders of preference ordinary
          shares pursuant to this provision, or by any Director so elected as
          herein contemplated, who dies, resigns or otherwise ceases to be a
          Director during a Voting Period shall, except as otherwise provided in
          the preceding sentence, be replaced by the



                                      -6-


          remaining Director theretofore elected by the holders of preference
          ordinary shares nominating a replacement for appointment by the Board
          of Directors, provided that if no remaining additional Director is
          then in office, additional Directors will be elected in accordance
          with the procedures described above. At the end of the Voting Period,
          the holders of preference ordinary shares of all of the relevant
          series shall be automatically divested of all voting powers vested in
          them by this provision, but subject always to subsequent vesting of
          such voting power in the holders of preference ordinary shares in the
          event of any similar cumulated arrearage in payment of quarterly
          dividends occurring thereafter. The term of all Directors elected and
          appointed pursuant to this provision shall in all events expire at the
          end of the applicable Voting Period and if the size of the Board was
          increased for purpose of the additional Directors, the number of
          Directors constituting the Board shall be reduced accordingly. The
          provisions of the Articles relating to general meetings and the
          provisions of Article 41 of the Articles shall apply, mutatis
          mutandis, to every such separate meeting, except that the necessary
          quorum shall be any one or more persons present in person or by proxy
          holding not less than fifty percent (50%) of the issued preference
          ordinary shares of the relevant series.

     (d) Redemption. The Company shall be entitled to redeem all or any of the
     Series B Preference Ordinary Shares as follows:

               (i) Subject to clauses (ii), (iii) and (iv), the Series B
          Preference Ordinary Shares shall not be redeemable by the Company
          prior to the date to be determined by the Attorneys (or by either of
          them) on the Pricing Date. On or after such date, the Company shall be
          entitled at any time in whole or from time to time in part by not less
          than thirty (30) days nor more than sixty (60) days' prior written
          notice to the relevant Holders, in such form and given in such manner
          as the Directors shall from time to time determine and in accordance
          with paragraph (e) below, to redeem all or any of the Series B
          Preference Ordinary Shares pursuant to this clause for cash at a
          redemption price of US$25.00 per share being redeemed (inclusive of
          the nominal value



                                      -7-


          thereof) plus all accrued and unpaid dividends, if any, thereon to the
          date of redemption, without interest on such unpaid dividends.

               (ii) At any time prior to the date determined by the Attorneys
          (or by either of them) on the Pricing Date, if the Company shall have
          submitted to the holders of Ordinary Shares a proposal for an
          amalgamation, consolidation, merger, arrangement, reconstruction,
          reincorporation, de-registration or any other similar transaction
          involving the Company that requires or shall have submitted any
          proposal for any other matter that, as a result of any change in
          Cayman Islands Law after 13 November 2002 (whether by enactment or
          official interpretation), requires, in each case, a vote of the
          holders of the Series B Preference Ordinary Shares voting separately
          as a single class (alone or with one or more class or series of
          preference ordinary shares, including the Company's Series A
          Preference Ordinary Shares), the Company shall be entitled by not less
          than thirty (30) days nor more than sixty (60) days prior written
          notice to the relevant Holders, in such form and given in such manner
          as the Directors shall from time to time determine and in accordance
          with paragraph (e) below, to redeem all Series B Preference Ordinary
          Shares pursuant to this clause for cash at a redemption price of
          US$26.00 per share being redeemed (inclusive of the nominal value
          thereof), plus all accrued and unpaid dividends, if any, to the date
          of redemption.

               (iii) If there is a "change in tax law" that would require the
          Company or any successor company to pay additional amounts with
          respect to the Series B Preference Ordinary Shares on the next
          succeeding dividend payment date, and the payment of those additional
          amounts cannot be avoided by the use of any reasonable measures
          available to the Company or any successor company, the Company shall
          be entitled at any time thereafter by not less than thirty (30) days
          nor more than sixty (60) days prior written notice to the relevant
          Holders, in such form and given in such manner as the Directors shall
          from time to time determine



                                      -8-


          and in accordance with paragraph (e) below, to redeem any or all
          Series B Preference Ordinary Shares pursuant to this clause for cash
          at a redemption price of US$25.00 per share being redeemed (inclusive
          of the nominal value thereof) plus accrued and unpaid dividends, if
          any, to the date of redemption. For the purposes of this provision, a
          "change in tax law" shall be (a) a change in or amendment to laws,
          regulations or rulings of any jurisdiction, political subdivision or
          taxing authority described in the next sentence, (b) a change in the
          official application or interpretation of those laws, regulations or
          rulings, or (c) any execution of or amendment to any treaty affecting
          taxation to which any jurisdiction, political subdivision or taxing
          authority described in the next sentence is party after 13 November
          2002. The jurisdictions, political subdivisions and taxing authorities
          referred to in the previous sentence are (a) the Cayman Islands or any
          political subdivision or governmental authority of or in the Cayman
          Islands with the power to tax, (b) any jurisdiction from or through
          which the Company or its paying agent is making payments on the Series
          B Preference Ordinary Shares or any political subdivision or
          governmental authority of or in that jurisdiction with the power to
          tax, or (c) any other jurisdiction in which the Company or its
          successor company is organized or generally subject to taxation or any
          political subdivision or governmental authority of or in that
          jurisdiction with the power to tax.

               (iv) If the entity formed by a consolidation, merger or
          amalgamation involving the Company or the entity to which the Company
          conveys, transfers or leases substantially all of its properties and
          assets is required to pay additional amounts in respect of any tax,
          assessment or governmental charge imposed on any holder of Series B
          Preference Ordinary Shares as a result of a change in tax law that
          occurred after the date of the consolidation, merger, amalgamation,
          conveyance, transfer or lease, and the payment of those amounts cannot
          be avoided by the use of any reasonable measures available to the
          Company or any successor company, the Company shall be entitled at any
          time thereafter by not less than thirty (30) days nor



                                      -9-


          more than sixty (60) days prior written notice to the relevant
          Holders, in such form and given in such manner as the Directors shall
          from time to time determine and in accordance with paragraph (e)
          below, to redeem any or all Series B Preference Ordinary Shares
          pursuant to this clause for cash at a redemption price of US$25.00 per
          share being redeemed, (inclusive of the nominal value thereof), plus
          all accrued and unpaid dividends, if any, to the date of redemption.

     (e) Notice of any redemption described herein will be mailed at least
     thirty (30) days but not more than sixty (60) days before the redemption
     date to each holder of record of Series B Preference Ordinary Shares to be
     redeemed at the address shown in the register of members of the Company.
     Each notice will state as appropriate: (1) the redemption date; (2) the
     number of Series B Preference Ordinary Shares to be redeemed; (3) the
     redemption price; (4) the place or places where certificates for Series B
     Preference Ordinary Shares are to be surrendered for payment of the
     redemption price if any such certificates are outstanding; and (5) where
     applicable, that dividends on the Series B Preference Ordinary Shares to be
     redeemed will cease to accrue on such redemption date. If fewer than all
     Series B Preference Ordinary Shares are to be redeemed, the notice mailed
     to each such holder thereof will also specify the number of Series B
     Preference Ordinary Shares to be redeemed from such holder. The notice
     shall contain (i) the name and address of the relevant bank or trust
     company to be used for purposes of redemption (if any) and (ii) a statement
     as to the deposit or intent to deposit the redemption funds in such trust
     account.

     (f) If fewer than all of the Series B Preference Ordinary Shares are to be
     redeemed, the number of shares to be redeemed will be determined by the
     Directors in their absolute discretion and such Series B Preference
     Ordinary Shares may be redeemed pro rata from the holders of record in
     proportion to the number of Series B Preference Ordinary Shares held by
     such holders (with adjustments to avoid redemption of fractional shares) or
     by lot.

     (g) If notice of redemption of any Series B Preference Ordinary Shares has
     been given and if the funds necessary for such



                                      -10-


     redemption have been set apart by the Company in trust for the benefit of
     the holders of Series B Preference Ordinary Shares so called for
     redemption, then from and after the redemption date, dividends will cease
     to accrue on the Series B Preference Ordinary Shares being redeemed, the
     Series B Preference Ordinary Shares will no longer be deemed to be
     outstanding and all rights of the holders of such shares will terminate,
     except the right to receive the redemption price.

     (h) If a redemption date falls after a dividend record date and prior to
     the corresponding dividend payment date, the holders of Series B Preference
     Ordinary Shares at the close of business on the dividend record date will
     be entitled to receive the dividend payable with respect to such Series B
     Preference Ordinary Shares on the corresponding dividend payment date
     notwithstanding the redemption thereof between the dividend record date and
     the corresponding dividend payment date or a default in the payment of the
     dividend due on such dividend payement date.

     (i) Unless full cumulative dividends on all Series B Preference Ordinary
     Shares and all Parity Shares shall have been declared and paid, or declared
     and a sum sufficient for the payment thereof set apart for payment for all
     past dividend periods terminating on or prior to the date of a redemption,
     purchase or other acquisition, no Series B Preference Ordinary Shares or
     any Parity Shares may be redeemed, purchased or otherwise acquired by the
     Company unless all Series B Preference Ordinary Shares and any Parity
     Shares are redeemed; provided, that, the Company may acquire fewer than all
     of the Series B Preference Ordinary Shares or any Parity Shares pursuant to
     a purchase or exchange offer made on the same terms to holders of all
     Series B Preference Ordinary Shares and Parity Shares as determined in good
     faith by the Board of Directors of the Company.

     (j) The Company, subject to (1) the special rights granted to any of the
     Company's issued and outstanding shares and (2) the Company's requirement
     pursuant to clause (i) to make a purchase or exchange offering on the same
     terms to holders of all outstanding Series B Preference Ordinary Shares and
     Parity Shares, may purchase Series B Preference Ordinary Shares. Any such
     purchase made by the Company may be made in the open market,



                                      -11-


     by tender to all holders of Series B Preference Ordinary Shares, by private
     agreement or otherwise as the Directors see fit. Any Series B Preference
     Ordinary Shares purchased by the Company for its own account (other than in
     the ordinary course of business of dealing in securities) will be canceled
     by the Company and will no longer be issued and outstanding.

     (k) The Series B Preference Ordinary Shares may be purchased or redeemed by
     the Company either out of profits or from the proceeds of a fresh issue of
     shares or out of capital or the share premium account.

     (l) Payment of the redemption amount shall only be effected upon surrender
     to the Company for cancellation of any share certificate in respect of the
     Series B Preference Ordinary Shares (to the extent such certificates are
     outstanding) to be redeemed and shall be made as promptly as practicable.
     If any certificate so surrendered includes Series B Preference Ordinary
     Shares not being redeemed, a new certificate for the remaining Series B
     Preference Ordinary Shares shall be issued to the holder in accordance with
     the Articles of Association of the Company without charge to such holder.

     (m) The Directors may make such further regulations concerning the
     administerial process of redemption as they shall from time to time deem
     necessary so long as the rights of the Holders are not varied.

     (n) The rights conferred upon the holders of the Series B Preference
     Ordinary Shares shall not be deemed to be varied by the creation or issue
     of any Parity Shares, Junior Shares or Fully Junior Shares.

     (o) Payments of Additional Amounts. Payments on the Series B Preference
     Ordinary Shares shall be made free and clear of and without deduction or
     withholding for or on account of any present or future taxes, assessments
     or other governmental charges imposed by any jurisdiction, political
     subdivision or taxing authority described in clause 1(d)(iii) of these
     Resolutions, unless the deduction or withholding of such taxes, assessments
     or other governmental charges is required by law, regulations or



                                      -12-


     rulings or the application or official interpretation of such law,
     regulations or rulings. In that event, the Company shall pay or cause to be
     paid additional amounts to the registered holders of the Series B
     Preference Ordinary Shares as additional dividends to make up for any
     deduction or withholding for any present or future taxes, assessments or
     other governmental charges imposed by any jurisdiction, political
     subdivision or taxing authority described in clause 1(d)(iii) of these
     Resolutions in respect of any amounts that the Company or a successor
     company must pay with respect to the Series B Preference Ordinary Shares,
     so that the net amounts paid to the holders of the Series B Preference
     Ordinary Shares, after that deduction or withholding, shall equal the
     respective amounts that would have been receivable by such holders had no
     such withholding or deduction been required. However, the Company shall not
     be obligated to pay additional amounts to any holder that:

               (i) resides in or is a citizen of the jurisdiction, political
          subdivision or taxing authority imposing the taxes, assessments or
          other governmental charges that would otherwise trigger the Company's
          obligation to pay additional amounts; or

               (ii) is a fiduciary, partnership, limited liability company or
          other pass-thru entity if, and to the extent that, the payment of
          additional amounts would be required by a jurisdiction, political
          subdivision or taxing authority described in clause 1(d)(iii) of these
          Resolutions to be included in the income for tax purposes of a
          beneficiary or settlor with respect to that fiduciary or a member of
          that partnership, limited liability company or other pass-thru entity
          who would not have been entitled to any additional amounts had that
          beneficiary, settlor or member held those Series B Preference Ordinary
          Shares directly.

     In addition, the Company shall not be obligated to pay any additional
     amounts to a holder of Series B Preference Ordinary Shares on account of:

               (i) any tax, assessment or other governmental charge that would
          not have been imposed but for the existence of any present or former
          connection between the holder, or certain other persons, and the
          taxing jurisdiction or political subdivision, or any Series B
          Preference



                                      -13-


          Ordinary Shares presented for payment more than thirty (30) days after
          the Relevant Date;

               (ii) any estate, inheritance, gift, sales, transfer, personal
          property or similar tax, assessment or other governmental charge;

               (iii) any tax, assessment or other governmental charge that is
          payable otherwise than by withholding or deduction from payment of the
          liquidation preference of or any dividends on the Series B Preference
          Ordinary Shares;

               (iv) any tax, assessment or other governmental charge that is
          imposed or withheld by reason of the failure by the holder or the
          beneficial owner of the Series B Preference Ordinary Shares to
          promptly comply with a request by the Company to (a) provide
          information, documents, certifications or other evidence concerning
          the nationality, residence or identity of the holder or beneficial
          owner or (b) make and deliver any declaration or other similar claim,
          other than a claim for refund of a tax, assessment or other
          governmental charge withheld by the Company, or satisfy any
          information or reporting requirements, which, in the case of clauses
          (a) or (b), is required or imposed by a statute, treaty, regulation or
          administrative practice of the taxing jurisdiction as a precondition
          to exemption from all or part of that tax, assessment or other
          governmental charge; or

               (v) any combination of the items identified by the subparagraphs
          above.

     The "Relevant Date" means, in respect of any payment, the date on which
     such payment first becomes due and payable, but if the full amount of the
     moneys payable has not been received by the depositary on or prior to such
     due date, it means the first date on which, the full amount of such moneys
     having been so received and being available for payment to holders, notice
     to that effect shall have been duly given to the holders of the Series B
     Preference Ordinary Shares.




                                      -14-


     (p) No Preemptive Rights. The Series B Preference Ordinary Shares shall not
     be entitled to the benefits of any retirement or sinking fund. No holder of
     Series B Preference Ordinary Shares, solely by reason of any such holding,
     has or will have any preemptive right to subscribe for any additional issue
     of the Company's shares of any class or series or to any security
     convertible into any such shares.

     (q) Ranking. Any class or series of shares of the Company shall be deemed
     to rank (1) prior to the Series B Preference Ordinary Shares, as to the
     payment of dividends and as to any voluntary or involuntary return of
     assets on liquidation, dissolution, winding-up or otherwise of the Company,
     if the holders of such class or series shall be entitled to the receipt of
     dividends or of amounts distributable upon any voluntary or involuntary
     return of assets on liquidation, dissolution, winding up or otherwise, as
     the case may be, in preference or priority to the holders of the Series B
     Preference Ordinary Shares, (2) on a parity with the Series B Preference
     Ordinary Shares as to the payment of dividends and as to distribution of
     assets upon any voluntary or involuntary return of assets on liquidation,
     dissolution, winding up or otherwise of the Company, whether or not the
     dividend rates, dividend payment dates or redemption or liquidation prices
     per share thereof shall be different from those of the Series B Preference
     Ordinary Shares, if the holders of such class or series and the Series B
     Preference Ordinary Shares shall be entitled to the receipt of dividends
     and of amounts distributable upon any voluntary or involuntary return of
     assets on liquidation, dissolution, winding up or otherwise of the Company
     in proportion to their respective amounts of accrued and unpaid dividends
     per share or liquidation preferences, without preference or priority one
     over the other or (3) junior to the Series B Preference Ordinary Shares, as
     to the payment of dividends and as to distribution of assets upon any
     voluntary or involuntary return of assets on liquidation, dissolution,
     winding up or otherwise of the Company, if such class or series is ordinary
     shares or other shares ranking junior in right of payment to Series B
     Preference Ordinary Shares as to dividends and/or as to the distribution of
     assets upon any voluntary or involuntary return of assets on liquidation,
     dissolution, winding up or otherwise of the Company. The Series B
     Preference Ordinary Shares will rank on a parity with the Series A
     Preference Ordinary Shares as to the payment of dividends and



                                      -15-


     as to distribution of assets upon any voluntary or involuntary return of
     assets on liquidation, dissolution, winding up or otherwise of the Company.

     2. RESOLVED that, in the event that the holders of the preference ordinary
     shares elect two persons and nominate such elected persons for appointment
     by the Board of Directors as additional Directors of the Company pursuant
     to paragraph 1(c)(iii) of these Resolutions during a Voting Period, the
     Board of Directors hereby, pursuant to Article 52 of the Articles, increase
     the number of persons consisting of the Board of Directors by two persons
     (subject to the limit in the number of Directors stated in Article 52) and
     hereby appoint, pursuant to Article 82 of the Articles, such persons
     elected and nominated by the holders of preference ordinary shares as
     additional Directors of the Company. Such additional Directors shall be
     apportioned among the classes of Directors in accordance with Article 81(a)
     of the Articles. Such appointment is conditional upon and subject to the
     following:

          (a) the term of office of each such Director shall in all events
          automatically expire at the end of the applicable Voting Period; and

          (b) prior to the appointment of each such elected person as a Director
          becoming effective, each such person shall provide to the Company
          notice in writing that he resigns the office of Director, in the form
          attached to these Resolutions, which form is hereby approved, such
          notice to only be effective upon the earliest of: (i) the expiration
          of the Voting Period during which such Director was appointed or (ii)
          the passing of an ordinary resolution by the holders of the relevant
          series of outstanding preference ordinary shares for the removal of
          such Director (in accordance with paragraph 1(c)(iv) of these
          Resolutions).

     3. RESOLVED that, in the event that it is necessary for any Director
     elected and nominated by the holders of preference ordinary shares to be
     removed from office in accordance with the provisions of paragraph 1(c)(iv)
     of these Resolutions, the Board of Directors shall put a Special Resolution
     to the Company at the immediately following Annual General Meeting of the
     Company for the removal of such Director or Directors pursuant to Article
     81(b) of the Articles.

     4. RESOLVED that, in the event that to give effect to the rights granted to
     the holders of preference ordinary shares by the provisions of paragraph
     1(c)(iii) of these Resolutions it is necessary to increase the limit in the
     number



                                      -16-


     of Directors specified in Article 52 of the Articles, the Directors shall
     put an ordinary resolution to the Company at the next Annual General
     Meeting of the Company to increase the limit in the number of Directors.

     5. RESOLVED, that the Company be, and it hereby is, authorised to issue and
     sell up to 27,000,000 Series B Preference Ordinary Shares, par value
     US$0.01 (including Series B Preference Ordinary Shares to be sold pursuant
     to any over-allotment option), to one or more underwriters to be named in
     an underwriting agreement at a price at which issued and sold by the
     Company, in such number and at such price, rate of dividends, and other
     terms and conditions of such Series B Preference Ordinary Shares to be
     determined by the Attorneys (or by either of them) upon the issue of such
     shares. All such determinations in respect of the Series B Preference
     Ordinary Shares made by the Attorneys (or by either of them), including,
     without limitation, approval of the form of share certificate, are hereby
     ratified and confirmed.

EX-12.1

XL CAPITAL                                                                                       Exhibit 12.1
                                                                                                 ------------
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND PREFERENCE DIVIDENDS
000s of U.S. Dollars

                                       Nine Months
                                          Ended           Yr End          Yr End          Yr End          Yr End          Yr End
                                         30-Sep           31-Dec          31-Dec          31-Dec          31-Dec          31-Dec
                                          2002             2001            2000            1999            1998            1997
                                     ---------------- --------------- --------------- --------------- --------------- -----------

Earnings:
                                                                                                      
  Pre-tax income from continuing
    operations                          213,662        (833,916)        376,734         390,252         636,670         776,550
  Fixed charges and pref divs.          140,793         126,219          69,427          53,609          36,898          33,250
  Distributed income of equity
    investees                            11,843           3,662           4,987           1,266          25,319          30,564
                                     ----------- --------------- --------------- --------------- --------------- ---------------
  Subtotal                              366,298        (704,035)        451,148         445,127         698,887         840,364
  Less: Minority interest                 6,528           2,113           1,093             220             749             308
  Preference share dividends              2,369               -               -               -               -               -
                                     ----------- --------------- --------------- --------------- --------------- ---------------

  Total Earnings                        357,401        (706,148)        450,055         444,907         698,138         840,056
                                     =========== =============== =============== =============== =============== ===============

Fixed Charges:
  Interest costs                         78,472          65,350          32,147          37,378          33,444          29,622
  Accretion of deposit liabilities       55,104          56,147          31,261          12,394               -               -
  Rental expense at 30% (1)               4,848           4,722           6,019           3,837           3,454           3,628
                                     ----------- --------------- --------------- --------------- --------------- ---------------
  Total Fixed charges                   138,424         126,219          69,427          53,609          36,898          33,250
                                     ----------- --------------- --------------- --------------- --------------- ---------------
  Preference share dividends -
    XL Capital                            2,369               -               -               -               -               -
                                     ----------- --------------- --------------- --------------- --------------- ---------------
  Total Prefered dividends                2,369               -               -               -               -               -
                                     ----------- --------------- --------------- --------------- --------------- ---------------

  Total fixed charges and preference
    dividends                           140,793         126,219          69,427          53,609          36,898          33,250
                                     =========== =============== =============== =============== =============== ===============


  Ratio of Earnings to Fixed Charges        2.6           (5.6)             6.5             8.3            18.9            25.3
                                     ----------- --------------- --------------- --------------- --------------- ---------------

  Ratio of Earnings to Combined
    Fixed Charges and Preference
    Dividends                               2.5           (5.6)             6.5             8.3            18.9            25.3
                                     ----------- --------------- --------------- --------------- --------------- ---------------

Deficiency                                  N/A        (832,367)            N/A             N/A             N/A             N/A
                                     ----------- --------------- --------------- --------------- --------------- ---------------



(1)  30% represents a reasonable approximation of the interest factor

(2)  For the year ended December 31, 2001, earnings were insufficient to cover
     fixed charges by $832.4 million.