XL Capital Ltd.'s spin-off of its financial guaranty insurance and reinsurance business saw its shares open at $20.90 on Wednesday, above their $20.50 IPO price, to become the richest US insurance IPO since 2004.

The Bermuda-based financial guaranty reinsurance firm raised $460 million by offering 22.44 million shares, beating the $299 million IPO from Allied World Assurance.

XL announced in June that it would spin off Security Capital which it set up as a holding company for the financial guaranty businesses of XL Capital. The offering represents a 35 percent stake in the company.

SCA offered just over 18 million shares, while parent company XL Insurance Bermuda Ltd. sold about 4.5 million shares, according to an amended prospectus filed with the US Securities and Exchange Commission.

SCA said it would use proceeds of the sale for general corporate purposes and as capital for its insurance and reinsurance subsidiaries. It will not receive proceeds from the 4.4 million shares sold by XL, which still holds 65 percent of its common stock.

Security Capital had first quarter 2006 income of 2006 of $21.4 million on total premiums written of $82.2 million, compared with income of $25.5 million on total premiums written of $51.7 million for the same period a year ago.

Goldman Sachs & Co., JPMorgan, and Merrill Lynch & Co. were the lead underwriters for the offering.