XL Capital Ltd. chairman Brian O'Hara said he was forced to sell about 80 percent of his stake in the Bermuda-based insurer to meet margin calls.

"I had pledged those shares as collateral to secure a personal loan used to fund purchases of XL shares in order to avoid the expiration of certain options," Mr. O'Hara said in a written statement released yesterday.

"The forced sale was due to the precipitous drop in XL's share price last week. The sale in no way reflects a lack of confidence in XL's current and future prospects."

Mr. O'Hara sold about 640,000 shares at prices from $3.45 to $6.19 apiece, according to a regulatory filing. By yesterday afternoon, the stock was trading at more than $12.

The forced sale came on a day when the company's shares hit their lowest value since the insurer floated on the stock market 17 years ago.

Many top executives shared Mr. O'Hara's plight last week as the average US stock fell around 18 percent.

A margin call happens when a bank tells an investor who has borrowed money against his protfolio that because the value of the shares in his portfolio has fallen, the investor must put up more cash - or immediately sell his shares to pay back the loan.

Another to fall into the same trap was Aubrey McClendon, the CEO of Chesapeake Energy, who last Friday revealed he had been forced to sell all of his 33.5 million shares in the company to meet a margin call.

The 60-year-old Mr. O'Hara was the first employee of XL, when the company was set up in Bermuda in the late 1980s. His long stint as chief executive officer, during which he built up XL into a major global player, ended in April, when he stepped down as CEO to be replaced by Michael McGavick.

The value of his holding in XL was estimated to be $133 million at June 30 last year. Twelve months later it had dropped to around $31 million, even though Mr. O'Hara had actually acquired another 80,000 shares.

The $100 million fall was due to the collapse of the company's share price.