SC TO-I/A

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE TO

(Rule 13e-4)

Tender Offer Statement under Section 14(d)(1) or 13(e)(1)

of the Securities Exchange Act of 1934

(Amendment No. 1)

XL CAPITAL LTD

(Name of Subject Company (Issuer) and Filing Person (Offeror))

RESTRICTED CLASS A ORDINARY SHARES, PAR VALUE $0.01 PER SHARE AND OPTIONS TO PURCHASE CLASS A ORDINARY SHARES, PAR VALUE $0.01 PER SHARE

(Title of Class of Securities)

G98255 10 5

(CUSIP Number of Class of Securities)

(Underlying Class A Ordinary Shares)

Michael A. Becker, Esq.

Cahill Gordon & Reindel llp

80 Pine Street

New York, New York 10005

(212) 701-3000

(Name, Address and Telephone Numbers of Person Authorized

to Receive Notices and Communications on Behalf of Filing Persons)

Calculation of Filing Fee

Transaction Valuation*	Amount of Filing Fee
$12,849,773	$1,374.93**

* Calculated solely for purposes of determining the filing fee. This amount assumes that 126,454 restricted Class A Ordinary Shares, par value $0.01, of XL Capital Ltd and options to purchase 614,318 Class A Ordinary Shares, par value $0.01, of XL Capital Ltd will be exchanged pursuant to this offer for cash-based long term incentive awards with an aggregate target value of $12,849,773. The amount of the filing fee, calculated in accordance with Rule 0-11(b) of the Securities Exchange Act of 1934, as amended, and Fee Rate Advisory #5 for Fiscal Year 2006 issued by the Securities and Exchange Commission on November 23, 2005, equals $107.00 per million dollars of the value of the transaction.

** Previously paid.

o Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

Amount Previously Paid: N/A	Filing Party: N/A
Form or Registration Number: N/A	Date Filed: N/A

o Check the box if the filing relates solely to preliminary communications made be-fore the commencement of a tender offer.

Check the appropriate boxes below to designate any transactions to which the statement relates:

o    third-party tender offer subject to Rule 14d-1.

x    issuer tender offer subject to Rule 13e-4.

o    going private transaction subject to Rule 13e-3.

o    amendment to Schedule 13D under Rule 13d-2.

Check the following box if the filing is a final amendment reporting the results of the tender offer:  o

This Amendment No. 1 (this “Amendment”) amends and supplements the Tender Offer Statement of XL Capital Ltd ( “XL”) on Schedule TO originally filed with the Securities and Exchange Commission on June 6, 2006 (the “Schedule TO”), relating to the offer by XL to certain employees to exchange all of their outstanding eligible unvested restricted Class A Ordinary Shares and eligible options to purchase Class A Ordinary Shares for a long term incentive plan award from Security Capital Assurance Ltd, on the terms and subject to the conditions set forth in an Offer to Exchange, dated June 6, 2006, a copy of which was filed with the original Schedule TO as Exhibit (a)(1).

The information in the Offer to Exchange is incorporated in this Amendment to the Schedule TO by reference to all of the applicable items in the Schedule TO, except that such information is hereby amended and supplemented to the extent specifically provided herein.

Item 12.Exhibits.

Item 12 is hereby amended and supplemented by adding the following exhibit:

(a)(14)                    Form of supplemental e-mail sent to Eligible Security Holders on June 9, 2006.

SIGNATURES

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: June 9, 2006

XL CAPITAL LTD

By: /s/ Kirstin Romann Gould

       Name:  Kirstin Romann Gould

       Title:    Secretary

EXHIBIT INDEX

Exhibit	Description
(a)(1)	Offer to Exchange, dated June 6, 2006.*
(a)(2)	Form of Letter of Transmittal.*
(a)(3)	Form of e-mail to Eligible Security Holders Announcing Offer. *
(a)(4)	Form of Election Withdrawal Notice.*
(a)(5)	The Company’s Annual Report on Form 10-K for its fiscal year ended December 31, 2005, filed with the Securities and Exchange Commission on March 7, 2006 (incorporated herein by reference).
(a)(6)	The Company’s Quarterly Report on Form 10-Q for its fiscal quarter ended March 31, 2006, filed with the Securities and Exchange Commission on May 5, 2006 (incorporated herein by reference).
(a)(7)	The Company’s Current Report on Form 8-K for May 26, 2006, filed with the Securities and Exchange Commission on May 30, 2006 (incorporated herein by reference).
(a)(8)	The Company’s Current Report on Form 8-K for May 15, 2006, filed with the Securities and Exchange Commission on May 19, 2006 (incorporated herein by reference).
(a)(9)	The Company’s Current Report on Form 8-K for May 5, 2006, filed with the Securities and Exchange Commission on May 11, 2006 (incorporated herein by reference).
(a)(10)	The Company’s Current Report on Form 8-K for April 28, 2006, filed with the Securities and Exchange Commission on May 4, 2006 (incorporated herein by reference).
(a)(11)	The Company’s Current Report on Form 8-K for April 7, 2006, filed with the Securities and Exchange Commission on April 11, 2006 (incorporated herein by reference).
(a)(12)	The Company’s definitive Proxy Statement on Schedule 14A for the 2006 Annual Meeting of Stockholders, filed with the Securities and Exchange Commission on March 23, 2006 (incorporated herein by reference).
(a)(13)	A description of the Company’s Class A Ordinary Shares included in the Company’s Registration Statement on Form S-3, which was filed with the SEC on December 1, 2005 (incorporated herein by reference).
(a)(14)	Form of supplemental e-mail sent to Eligible Security Holders on June 9, 2006. **
(b)	Not applicable.
(d)(1)	1991 Performance Incentive Program (as amended and restated effective March 7, 2003), incorporated by reference to Appendix B to the Company’s Definitive Proxy Statement on Schedule 14A filed on April 4, 2003.
(d)(2)	1999 Performance Incentive Program (as amended and restated effective April 29, 2005), incorporated by reference to Appendix C to the Company’s Definitive Proxy Statement on Schedule 14A filed on March 24, 2005.

Exhibit	Description
(d)(3)	Form of Security Capital Assurance Ltd 2006 Long-Term Incentive and Share Award Plan. *
(g)	Not applicable.
(h)	Not applicable.

*Previously filed.

**Filed with this Amendment No. 1.

EX-99.(A)(14)

Exhibit (a)(14)

[Form of supplemental e-mail to Eligible Security Holders dated June 9, 2006]

XL Capital Ltd (“XL”) has received questions from eligible employees relating to the offer to exchange dated June 6, 2006, that was originally filed as Exhibit (a)(1) to the Schedule TO filed by XL with the Securities and Exchange Commission on June 6, 2006. In order to aid understanding of the offer to exchange, XL is providing the supplemental information below to eligible employees via email. The offer to exchange continues to be subject to all of the descriptions, terms and conditions described in the offering materials dated June 6, 2006.

Q1:What are the specific numbers associated with the performance metrics of Operating Income and Growth in Adjusted Book Value that will enable SCA to achieve “Target”, “Below Target” and “Above Target” levels at payout? 

A1:     We are not in a position to provide the specific metrics that will constitute “Below, Above or Target” levels of performance, for a variety of reasons, including that SCA is in the middle of its SEC registration process for its initial public offering of shares and that the metrics are in development and will ultimately require approval of SCA’s board of directors.

Q2:     What is the 0.55 factor relating to the expected life assumption in the Black-Scholes formula, and how was it arrived at?

A2:     The 0.55 factor is not a “discount” to the value of an option otherwise derived from the Black-Scholes evaluation. It represents the expected average life of the option as one of the standard inputs to calculate a value for the option, including: stock price, exercise price, expected life, volatility, dividend yield and tax free interest rate.

XL has consistently used 0.55 as the expected life variable, representing an estimate five and one-half years as the expected life of a ten year option. It was the factor used when XL valued the eligible options at grant. Thus, XL is using the same formula to value the options as was used at the time they were awarded to you.

Q3:  Is XL setting the level of at least 20% ownership of SCA as a prerequisite for employees to retain their XL equity awards? 

A3:  The XL Plans have long provided that a participant remains eligible to participate in the plan so long as he or she continues to provide services to a company that is at least 20% owned, directly or indirectly, by XL Capital Ltd.  If the company falls below the 20% threshold, participants have a “separation from service” under the XL Plans and can no longer participate in them as described in the Offer to Exchange. These terms of the XL Plans have existed for many years and were not changed in connection with the SCA initial public offering.