Standard & Poor's (S&P) yesterday affirmed various ratings on XL Capital Ltd. and its insurance and reinsurance subsidiaries (together XLC) and removed them from CreditWatch, where they were placed on September 20, 2001 with negative implications. S&P also said the outlook is stable.

S&P said: "The ratings had been placed on CreditWatch following XLC's announcement that it would incur estimated losses of $680 million (net after-tax) relating to the World Trade Center (WTC) disaster on September 11, 2001. Specifically, the potential impact of these losses on XLC's capital adequacy was a cause for concern. Subsequently, XLC disclosed a thorough ground-up analysis of its loss estimate, which alleviated most concerns about the group's capital adequacy and prospective operating performance.

"In addition, XLC has successfully raised aggregate net proceeds of $812 million in common equity via a secondary offering, and known potential exposures to Enron (albeit modest) should not materially affect the company's earnings."

XLC also announced yesterday that its estimated net aggregate insurance and reinsurance underwriting exposures in connection with the bankruptcy of Enron Corporation ("Enron") could total approximately $75 million (pre-tax). This amount includes estimated potential exposure through its surety underwriting of approximately $45 million. However, XL is not yet in a position to estimate what level of losses will result from its exposure to Enron. Certain circumstances, including the extent to which claims emerge, coverage determinations and developments in the Enron bankruptcy proceedings, may impact these estimates and the amount and timing of actual losses.

XL previously stated that it does not have exposure to the asset backed commercial paper program of Enron Funding Corp.

In addition, the Company also previously announced that it believed it had minimal exposure to Enron in relation to its financial guarantee, weather risk trading and investment operations.