8-K

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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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                                    FORM 8-K

                                 CURRENT REPORT

     Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934


         Date of Report (Date of earliest event reported): May 18, 2004


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


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

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

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

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


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Item 5.   Other Events and Regulation FD Disclosure.

     On May 18, 2004, XL Capital Ltd issued the press release attached as
Exhibit 99.1 and incorporated by reference herein.


Item 7.   Financial Statements and Exhibits.

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


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

          99.1         Press Release ("XL Capital Ltd announces its intention
                       to make a one-time cash payment to holders of its
                       Zero-Coupon Convertible Debentures due May 2021 for
                       not exercising put rights") dated May 18, 2004.









                                   SIGNATURES


     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

Date:    May 18, 2004

                                   XL CAPITAL LTD
                                    (Registrant)


                                  By:  /s/ Paul S. Giordano
                                       -----------------------------
                                       Name:   Paul S. Giordano
                                       Title:  Executive Vice President and
                                               General Counsel

EX-99.1

                                                                    Exhibit 99.1

[LOGO OMITTED]

                                                     XL Capital Ltd
                                                     XL House
                                                     One Bermudiana Road
                                                     Hamilton HM 11
                                                     Bermuda

                                                     Phone    (441) 292 8515
                                                     Fax      (441) 292 5280

Press Release


Contact: Gavin R. Arton                              Roger R. Scotton
         Investor Relations                          Media Relations
         (441) 294 7104                              (441) 294 7165


    XL Capital Ltd announces its intention to make a one-time cash payment to
         holders of its Zero-Coupon Convertible Debentures due May 2021
                          for not exercising put rights




HAMILTON, BERMUDA, May 18, 2004 - XL Capital Ltd ("XL" or "the Company") (NYSE:
XL) announced today that it intends to make a one-time cash payment to holders
of its Zero-Coupon Convertible Debentures due 2021 (the "Debentures") who do not
exercise their rights to put the Debentures to XL.

Pursuant to the terms of the indenture governing the Debentures, XL is obligated
to purchase for cash Debentures tendered and not withdrawn before the close of
business on May 21, 2004 at their accreted value of $641.88 per $1,000 principal
amount at maturity on May 24, 2004. XL intends to pay a one-time cash payment of
$14.84 for every $1,000 aggregate principal amount at maturity of the Debentures
held to each Debenture holder not exercising its put right. This payment is
approximately equal to 2.31% of each Debenture's accreted value and 1.48% of
each Debenture's principal amount at maturity. XL will make this payment to
holders of record as of the close of business on May 26, 2004, as promptly as
possible following that date. In the event all of the Debentures remain
outstanding on that date, the aggregate payment by XL would be $15 million.

XL Capital Ltd, through its operating subsidiaries, is a leading provider of
insurance and reinsurance coverages and financial products and services to
industrial, commercial and professional service firms, insurance companies, and
other enterprises on a worldwide basis. As of March 31, 2004, XL Capital Ltd had
consolidated assets of approximately $44.2 billion and consolidated
shareholders' equity of approximately $7.4 billion. More information about XL
Capital Ltd is available at www.xlcapital.com.

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