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                      COMMON SECURITIES GUARANTEE AGREEMENT


                                 XL CAPITAL LTD


                                  Dated as of ,


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                                TABLE OF CONTENTS

                                                                            Page
                                    ARTICLE I

                         DEFINITIONS AND INTERPRETATION

SECTION 1.1           Definitions Interpretation.............................2

                                   ARTICLE II

                                    GUARANTEE

SECTION 2.1           Guarantee..............................................3
SECTION 2.2           Waiver of Notice and Demand............................4
SECTION 2.3           Obligations Not Affected...............................4
SECTION 2.4           Rights of Holders......................................5
SECTION 2.5           Guarantee of Payment...................................5
SECTION 2.6           Subrogation............................................5
SECTION 2.7           Independent Obligations................................5

                                   ARTICLE III

                    LIMITATION OF TRANSACTIONS; SUBORDINATION

SECTION 3.1           Limitation of Transactions.............................6
SECTION 3.2           Ranking................................................6

                                   ARTICLE IV

                                   TERMINATION

SECTION 4.1           Termination............................................7

                                    ARTICLE V

                                  MISCELLANEOUS

SECTION 5.1           Successors and Assigns.................................7
SECTION 5.2           Amendments.............................................7
SECTION 5.3           Notices................................................8
SECTION 5.4           Benefit................................................8
SECTION 5.5           Governing Law..........................................9
SECTION 5.6           No Recourse Against Certain Persons....................9

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                      COMMON SECURITIES GUARANTEE AGREEMENT


     GUARANTEE AGREEMENT (this "Common Securities Guarantee"), dated as of , ,
is executed and delivered by XL Capital Ltd, a Cayman Islands exempted limited
company (the "Guarantor"), for the benefit of the Holders (as defined herein)
from time to time of the Common Securities (as defined herein) of XL Capital
Trust [I], a Delaware business trust (the "Issuer").

     WHEREAS, pursuant to an amended and restated Declaration of Trust (the
"Declaration"), dated as of , , among the Trustees of the Issuer named therein,
the Guarantor, as sponsor, and the holders from time to time of undivided
beneficial interests in the assets of the Issuer, the Issuer is issuing on the
date hereof common securities having an aggregate liquidation amount of $[ ]
designated the [ ]% Common Securities (the "Common Securities");

     WHEREAS, as incentive for the Holders to purchase the Common Securities,
the Guarantor desires to irrevocably and unconditionally agree, to the extent
set forth in this Common Securities Guarantee, to pay to the Holders of the
Common Securities the Guarantee Payments (as defined herein) and to make certain
other payments on the terms and conditions set forth herein; and

     WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Preferred Securities Guarantee") for the benefit of the holders
of the Preferred Securities (as defined herein), which terms include, among
other things, except that if an Event of Default (as such term is defined in the
Indenture) has occurred and is continuing, the rights of Holders of the Common
Securities to receive Guarantee Payments under this Common Securities Guarantee
are subordinated to the rights of holders of Preferred Securities to receive
guarantee payments under the Preferred Securities Guarantee.

     NOW, THEREFORE, in consideration of the purchase by each Holder of Common
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Common Securities Guarantee
for the benefit of the Holders.



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                                    ARTICLE I

                         DEFINITIONS AND INTERPRETATION


SECTION 1.1 Definitions Interpretation.

     In this Common Securities Guarantee, unless the context otherwise requires:

          (a) capitalized terms used in this Common Securities Guarantee but not
     defined in the preamble above have the respective meanings assigned to them
     in this Section 1.1;

          (b) terms defined in the Declaration as at the date of execution of
     this Common Securities Guarantee have the same meaning when used in this
     Common Securities Guarantee unless otherwise defined in this Common
     Securities Guarantee;

          (c) a term defined anywhere in this Common Securities Guarantee has
     the same meaning throughout;

          (d) all references to "the Common Securities Guarantee" or "this
     Common Securities Guarantee" are to this Common Securities Guarantee as
     modified, supplemented or amended from time to time;

          (e) all references in this Common Securities Guarantee to Articles and
     Sections are to Articles and Sections of this Common Securities Guarantee
     unless otherwise specified; and

          (f) a reference to the singular includes the plural and vice versa.

     "Guarantee Payments" shall mean the following payments or distributions,
without duplication, with respect to the Common Securities, to the extent not
paid or made by the Issuer: (i) any accrued and unpaid Distributions that are
required to be paid on such Common Securities, to the extent the Issuer has
funds available therefor, (ii) the redemption price, including all accrued and
unpaid Distributions to the date of redemption (the "Redemption Price"), to the
extent the Issuer has funds available therefor, with respect to any Common
Securities called for redemption by the Issuer, and (iii) upon a voluntary or
involuntary dissolution, winding-up or termination of the Issuer (other than in
connection with the distribution of Subordinated Notes to the Holders in
exchange for Common Securities as provided in the Declaration), the lesser of
(a) the aggregate of the liquidation amount and all accrued and unpaid
Distributions on the Common Securities to the date of payment, to the extent the
Issuer has funds available therefor, and (b) the amount of assets


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of the Issuer remaining available for distribution to Holders in liquidation of
the Issuer (in either case, the "Liquidation Distribution"). If an Event of
Default (as defined in the Indenture) has occurred and is continuing, the rights
of Holders of the Common Securities to receive Guarantee Payments under this
Common Securities Guarantee are subordinated to the rights of holders of
Preferred Securities to receive guarantee payments under the Preferred
Securities Guarantee.

     "Holder" shall mean any holder, as registered on the books and records of
the Issuer, of any Common Securities.

     "Indenture" means the Indenture dated as of , 2001, between the Guarantor
and State Street Bank and Trust Company, as Trustee, and the First Supplemental
Indenture thereto pursuant to which certain subordinated debt securities of the
Guarantor are to be issued to the Property Trustee (as defined in the
Declaration), as from time to time amended.

     "Property Trustee" shall have the meaning ascribed to such term in the
Declaration.

     "Subordinated Notes" means the series of subordinated debt securities of
the Guarantor designated the [ ]% Subordinated Deferrable Interest Notes due ,
20 held by the Property Trustee.

     "Preferred Securities" shall mean the securities representing preferred
undivided beneficial interests in the assets of the Issuer.

     "XL" shall mean XL Capital Ltd, a Cayman Islands exempted limited company.


                                   ARTICLE II

                                    GUARANTEE


SECTION 2.1 Guarantee

     The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by the Issuer), as and when due, regardless of any defense, right of set-off or
counterclaim which the Issuer may have or assert. The Guarantor's obligation to
make a Guarantee Payment


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may be satisfied by direct payment of the required amounts by the Guarantor to
the Holders or by causing the Issuer to pay such amounts to the Holders.

SECTION 2.2 Waiver of Notice and Demand

     The Guarantor hereby waives notice of acceptance of this Common Securities
Guarantee and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the Issuer
or any other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands.

SECTION 2.3 Obligations Not Affected

     The obligations, covenants, agreements and duties of the Guarantor under
this Common Securities Guarantee shall in no way be affected or impaired by
reason of the happening from time to time of any of the following:

          (a) the release or waiver, by operation of law or otherwise, of the
     performance or observance by the Issuer of any express or implied
     agreement, covenant, term or condition relating to the Common Securities to
     be performed or observed by the Issuer;

          (b) the extension of time for the payment by the Issuer of all or any
     portion of the Distributions, Redemption Price, Liquidation Distribution or
     any other sums payable under the terms of the Common Securities or the
     extension of time for the performance of any other obligation under,
     arising out of, or in connection with, the Common Securities (other than an
     extension of time for payment of Distributions or other sum payable that
     results from the extension of any interest payment period on the
     Subordinated Notes permitted by the Indenture);

          (c) any failure, omission, delay or lack of diligence on the part of
     the Holders to enforce, assert or exercise any right, privilege, power or
     remedy conferred on the Holders pursuant to the terms of the Common
     Securities, or any action on the part of the Issuer granting indulgence or
     extension of any kind;

          (d) the voluntary or involuntary liquidation, dissolution, sale of any
     collateral, receivership, insolvency, bankruptcy, assignment for the
     benefit of creditors, reorganization, arrangement, composition or
     readjustment of debt of, or other similar proceedings affecting, the Issuer
     or any of the assets of the Issuer;

          (e) any invalidity of, or defect or deficiency in, the Common
     Securities;


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          (f) the settlement or compromise of any obligation guaranteed hereby
     or hereby incurred; or

          (g) any other circumstance whatsoever that might otherwise constitute
     a legal or equitable discharge or defense of a guarantor;

it being the intent of this Section 2.3 that the obligations of the Guarantor
hereunder shall be absolute and unconditional under any and all circumstances.

     There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.

SECTION 2.4 Rights of Holders

     The Guarantor expressly acknowledges that any Holder of Common Securities
may institute a legal proceeding directly against the Guarantor to enforce its
rights under this Common Securities Guarantee, without first instituting a legal
proceeding against the Issuer or any other Person.

SECTION 2.5 Guarantee of Payment

     This Common Securities Guarantee creates a guarantee of payment and not of
collection.

SECTION 2.6 Subrogation

     The Guarantor shall be subrogated to all (if any) rights of the Holders of
Common Securities against the Issuer in respect of any amounts paid to such
Holders by the Guarantor under this Common Securities Guarantee; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any rights which
it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Common Securities
Guarantee, if, at the time of any such payment, any amounts are due and unpaid
under this Common Securities Guarantee. If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor agrees to hold
such amount in trust for the Holders and to pay over such amount to the Holders.

SECTION 2.7 Independent Obligations

     The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer with respect to the Common Securities and that
the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursu-


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ant to the terms of this Common Securities Guarantee notwithstanding the
occurrence of any event referred to in subsections (a) through (g), inclusive,
of Section 2.3 hereof.


                                   ARTICLE III

                    LIMITATION OF TRANSACTIONS; SUBORDINATION


SECTION 3.1 Limitation of Transactions

     (a) So long as any Common Securities remain outstanding, if (i) the
Guarantor shall be in default with respect to its Guarantee Payments or other
obligations hereunder, or (ii) if an Event of Default (as defined in the
Indenture) shall exist then (a) the Guarantor shall not declare or pay any
dividend on, or make any distributions with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its capital stock
and (b) the Guarantor shall not make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities issued by
the Guarantor which rank pari passu with or junior to the Subordinated Notes.

     (b) Notwithstanding subsection 3.1(a) or any other language to the contrary
contained in this Common Securities Guarantee, nothing shall prevent the
Guarantor from: (i) declaring or paying any dividend on, or making any
distribution with respect to, or redeeming, purchasing, acquiring or making a
liquidation payment with respect to, any of its capital stock in or with (x)
securities of the Guarantor (including capital stock) that rank junior to such
capital stock or (y) securities (including capital stock) of XL or (ii) paying
any interest, principal or premium on, or repaying, repurchasing or redeeming,
any debt securities issued by the Guarantor which rank pari passu with or junior
to the Subordinated Notes, with (x) securities of the Guarantor (including
capital stock) that rank junior to such debt securities or (y) securities
(including capital stock) of XL.

SECTION 3.2 Ranking

     This Common Securities Guarantee will constitute an unsecured obligation of
the Guarantor and will rank (i) subordinate and junior in right of payment to
all other liabilities of the Guarantor, including the Subordinated Notes and the
Preferred Securities Guarantee, except those liabilities of the Guarantor made
pari passu or subordinate by their terms, (ii) pari passu with the most senior
preferred stock issued from time to time by the Guarantor and with any guarantee
now or hereafter entered into by the Guarantor in respect of any preferred stock
of any Subsidiary or Affiliate of the Guarantor, except the Preferred Securities
Guarantee, and (iii) senior to the Guarantor's common stock.



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                                   ARTICLE IV

                                   TERMINATION


SECTION 4.1 Termination

     This Common Securities Guarantee shall terminate upon the first to occur of
(i) full payment of the Redemption Price of all Common Securities, (ii) the
distribution of Subordinated Notes to the Holders of all of the Common
Securities or (iii) the full payment of the amounts payable in accordance with
the Declaration upon liquidation of the Issuer. Notwithstanding the foregoing,
this Common Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder of Common Securities
must restore payment of any sums paid under the Common Securities or under this
Common Securities Guarantee.


                                    ARTICLE V

                                  MISCELLANEOUS


SECTION 5.1 Successors and Assigns

     All guarantees and agreements contained in this Common Securities Guarantee
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Common
Securities then outstanding.

SECTION 5.2 Amendments

     Except with respect to any changes which do not adversely affect the rights
of Holders (in which case no consent of Holders will be required), this Common
Securities Guarantee may only be amended with the prior approval of the Holders
of at least a majority in liquidation amount of all the outstanding Common
Securities. The provisions of Section 12.2 of the Declaration with respect to
meetings of Holders of the Securities apply to the giving of such approval.


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SECTION 5.3 Notices

     All notices provided for in this Common Securities Guarantee shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by registered or certified mail, as follows:

          (a) if given to the Issuer, in care of the Regular Trustees at the
     Issuer's mailing address set forth below (or such other address as the
     Issuer may give notice of to the Holders of the Common Securities):

                           XL Capital Trust I
                           c/o XL Capital Ltd
                           XL House
                           One Bermudiana Road
                           Hamilton HM11
                           Bermuda
                           Attention:  Paul S. Giordano

          (b) if given to the Guarantor, at the Guarantor's mailing address set
     forth below (or such other address as the Guarantor may give notice of to
     the Holders of the Common Securities):

                           XL Capital Ltd
                           XL House
                           One Bermudiana Road
                           Hamilton HM11
                           Bermuda
                           Attention:  Paul S. Giordano

          (c) if given to any Holder of Common Securities, at the address set
     forth on the books and records of the Issuer.

     All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.

SECTION 5.4 Benefit

     This Common Securities Guarantee is solely for the benefit of the Holders
of the Common Securities and is not separately transferable from the Common
Securities.


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SECTION 5.5 Governing Law

     THIS COMMON SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 5.6 No Recourse Against Certain Persons

     No past, present or future director, officer, employee or stockholder, as
such, of the Guarantor or any successor thereof shall have any liability for any
obligations of the Guarantor under this Preferred Securities Guarantee or for
any claim based on, in respect of, or by reason of, such obligations or their
creation and all such liability is hereby waived and released. Such waiver and
release are part of the consideration for the issue of this Common Securities
Guarantee and the Common Securities.



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     IN WITNESS WHEREOF, XL CAPITAL LTD has caused this Common Securities
Guarantee Agreement to be duly executed as a deed the day and year first before
written.




The common seal of  )
XL CAPITAL LTD      )
was hereunto        )
affixed in the      )
presence of         )


________________________________
Name:
Title:



Witness:


________________________________
Name:
Title: