NEW YORK (Bloomberg) — XL Capital Ltd., the Bermuda-based insurer, expects a gain of $60 million to $80 million after early termination of a fund with a unit of France's Axa SA.

XL "will be paid a greater share of the remaining funds than was originally agreed", the insurer said yesterday in a regulatory filing. In return, Axa Insurance Ltd. was released from a sale-and-purchase agreement, XL said.

XL's chief executive officer Michael McGavick is under pressure to bolster finances after more than $2 billion in net losses over 12 months and a December 15 rating downgrade by Standard & Poor's. Axa said it inherited the deal after its 2006 acquisition of Winterthur from Credit Suisse Group AG.

"It's a good thing for both parties," Emmanuel Touzeau, a spokesman for the French insurer, said in an interview. "There is also a gain on Axa's side," Touzeau said, without giving details. The fund, which initially had $185 million, was set up to protect XL in case reinsurance deals failed.

XL shares fell eight cents (2.3 percent) to $3.38 in trading on the New York Stock Exchange yesterday.