wholly-owned subsidiary, X.L. Reinsurance Company Ltd. (XL Re), to provide speciality reinsurance coverage for captives, commercial insurance and reinsurance companies.

The new company is to be initially capitalised at $250 million and is expected to be fully operational by December 1.

XL said yesterday it had increased its maximum limits offered to general liability clients to $150 million from $100 million. Individual directors' and officers' (D&O) liability insurance limits (for side A coverage only) are being raised to $50 million from $25 million.

XL is also introducing a new general liability policy form (GL-004) to replace its existing policy contract for all business written or renewing on or after December 1. The new policy clarifies key coverage terms and is the fourth such revision to the company's general liability indemnity form.

"These actions,'' stated Mr. Brian O'Hara, president and CEO of XL parent, EXEL Ltd., "reflect current market conditions and our clients desire to purchase large capacity from a single source offering consistent coverage and superior financial security.

"A separately capitalised company reflects the increasing importance of specialty reinsurance to our organisation. Our Specialty Reinsurance Assumed division has produced approximately $100 million of gross premiums this year.

In addition, XL Re will be the vehicle for managing our relationship with Risk Capital Re in which the company recently made an investment.

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