A further de-coupling of directors between XL Capital and its troubled spin-off Security Capital Assurance has taken place with Michael Esposito removing himself as chairman of the XL board and Alan Senter resigning from SCA's board.

The news came late last Friday and follows on from the resignation of XL chief executive officer Brian O' Hara from the SCA board last month.

Mr. Esposito will continue as chairman of the SCA board while Mr. Senter will continue as an XL director.

When Mr. O'Hara stepped off the SCA board it was speculated amongst financial circles that the reason was to allow XL to inject capital into SCA to help it avoid a threatened ratings downgrade due to a $2 billion shortfall in excess capital highlighted by the Fitch Ratings agency.

By no longer appearing on both board of directors Mr. Esposito and Mr. Senter have further lessened the chance of any claims of conflicts of interest should XL mount a rescue mission to help SCA.

Shares of SCA have been in freefall since the summer and ended last Friday at $3.96, way below their 2007 high of $34.58.

XL's 46 percent stake in SCA has lost more than $500 million in value over the past few months, and Bermuda's number two insurer has had its own financial strength rating outlook reduced to "negative" by AM Best in the past two weeks.

Moody's Investors Service has also warned it may downgrade XL's senior debt rating due to its $1.3 billion of direct investments in subprime mortgage assets.

Earlier this year Mr. Esposito indicated he would be stepping down from the XL board in 2008, however on Friday he said he felt the SCA situation needed his full attention which outweighed his desire to stick to his 2008 timeframe plan.

"While I am saddened by my decision to retire from XL earlier than I had planned, I can reflect proudly on the past 21 years as a founding XL director on what has become a leading global franchise in the insurance and reinsurance industry and look forward to assisting SCA in addressing its current challenges," he said.

In a statement XL boss Mr. O'Hara, who is now acting chairman, said: "We admire Mike's decision to forego the remainder of his XL Board term to give his full attention to SCA. It has been my pleasure and privilege to serve alongside Mike over the past two decades. We will miss his steady presence as XL's chairman."

Mr. O'Hara has previously signalled his intention to retire as CEO next summer.

Regarding the resignation of Mr. Senter, SCA chief executive officer Paul Giordano said: "I thank Alan for the counsel and commitment he provided during his time as an SCA director."