Exhibit 4.9(a)

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                                 XL CAPITAL LTD

                                       AND

                              THE BANK OF NEW YORK

                                   as Trustee

                              --------------------

                               FIRST SUPPLEMENTAL
                                    INDENTURE
                                       TO
                                    INDENTURE

                          Dated as of [        ], 2004

                              --------------------

               [  ]% Subordinated Deferrable Interest Debentures
                            due [        ], 20[  ]

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                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----

ARTICLE I       DEFINITIONS...................................................1

Section 1.1.    Definition of Terms...........................................1
Section 1.2.    Interpretation................................................2

ARTICLE II      GENERAL TERMS AND CONDITIONS OF THE NOTES.....................2

Section 2.1.    Designation and Principal Amount..............................2
Section 2.2.    Maturity......................................................3
Section 2.3.    Form and Payment..............................................3
Section 2.4.    Global Note...................................................3
Section 2.5.    Interest......................................................3
Section 2.6.    Denominations.................................................4

ARTICLE III     REDEMPTION OF THE NOTES.......................................4

Section 3.1.    Tax Event Redemption..........................................4
Section 3.2.    Optional Redemption by Company................................4
Section 3.3.    No Sinking Fund...............................................5

ARTICLE IV      EXTENSION OF INTEREST PAYMENT PERIOD..........................5

Section 4.1.    Extension of Interest Payment Period..........................5
Section 4.2.    Notice of Extension...........................................5

ARTICLE V       EXPENSES......................................................6

Section 5.1.    Payment of Expenses...........................................6

ARTICLE VI      SUBORDINATION.................................................6

Section 6.1.    Agreement to Subordinate......................................6
Section 6.2.    Default on Senior Indebtedness................................7
Section 6.3.    Liquidation; Dissolution; Bankruptcy..........................7
Section 6.4.    Subrogation...................................................8
Section 6.5.    Trustee to Effectuate Subordination...........................8
Section 6.6.    Notice by the Company.........................................9
Section 6.7.    Rights of the Trustee; Holders of Senior Indebtedness.........9
Section 6.8.    Subordination May Not Be Impaired.............................9

ARTICLE VII     COVENANT TO LIST ON EXCHANGE.................................10

Section 7.1.    Listing on Exchange..........................................10

ARTICLE VIII    FORM OF NOTE.................................................10

Section 8.1.    Form of Note.................................................10


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ARTICLE IX      ORIGINAL ISSUE OF NOTES......................................16

Section 9.1.    Original Issue of Notes......................................16

ARTICLE X       CERTAIN COVENANTS............................................16

Section 10.1.   Limitation on Dividends and Other Payments...................16
Section 10.2.   Covenants as to the Trust....................................16

ARTICLE XI      CERTAIN EVENTS OF DEFAULT....................................17

Section 11.1.   Additional Events of Default.................................17
Section 11.2.   Waiver of Existing Defaults..................................17

ARTICLE XII     MISCELLANEOUS................................................17

Section 12.1.   Supplemental Indenture Incorporated Into Indenture...........17
Section 12.2.   Trustee Not Responsible for Recitals; Disclaimer.............17
Section 12.3.   Governing Law................................................17
Section 12.4.   Separability.................................................17
Section 12.5.   Counterparts.................................................18
Section 12.6.   Acknowledgment of Rights of Holders of Preferred Securities..18


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            THIS FIRST SUPPLEMENTAL INDENTURE, dated as of [     ], 20[  ] (this
"FIRST SUPPLEMENTAL INDENTURE"), between XL Capital Ltd, a Cayman Islands
exempted limited company (the "COMPANY"), and The Bank of New York, a New York
banking corporation,, not in its individual capacity but solely as trustee (the
"TRUSTEE"), under the Indenture dated as of June 2, 2004 between the Company and
the Trustee (the "INDENTURE").

                              W I T N E S S E T H:

            WHEREAS, the Company executed and delivered the Indenture to the
Trustee to provide for the future issuance of the Company's unsecured
subordinated Securities, to be issued from time to time in one or more series as
might be determined by the Company in accordance with the Indenture, in an
unlimited aggregate principal amount which may be authenticated and delivered as
provided in the Indenture; and

            WHEREAS, pursuant to the terms of the Indenture, the Company desires
to provide for the establishment of a new series of its Securities to be known
as its [  ]% Subordinated Deferrable Interest Notes due [        ], 20[  ] (the
"NOTES"), the form and substance of such Notes and the terms, provisions and
conditions thereof to be as set forth in the Indenture and this First
Supplemental Indenture; and

            WHEREAS, XL Capital Trust [  ], a Delaware statutory business trust
(the "TRUST"), has offered to the public $[      ] aggregate liquidation amount
of its [  ]% Trust Preferred Securities (the "PREFERRED SECURITIES") and has
offered to the Company $[     ] aggregate liquidation amount of its common
securities (the "COMMON SECURITIES" and, together with the Preferred Securities,
the "TRUST SECURITIES"), such Trust Securities representing undivided beneficial
interests in the assets of the Trust, and proposes to invest the proceeds from
such offering in $[     ] aggregate principal amount of the Notes; and

            WHEREAS, the Company has requested the Trustee to execute and
deliver this First Supplemental Indenture, and all requirements necessary to
make this First Supplemental Indenture a valid instrument, in accordance with
its terms, and to make the Notes, when executed by the Company and authenticated
and delivered by the Trustee, the valid obligations of the Company, have been
performed, and the execution and delivery of this First Supplemental Indenture
has been duly authorized in all respects.

            NOW, THEREFORE, in consideration of the purchase and acceptance of
the Notes by the holders thereof, and for the purpose of setting forth, as
provided in the Indenture, the form and substance of the Notes and the terms,
provisions and conditions thereof, the Company covenants and agrees with the
Trustee as follows:

                                    ARTICLE I

                                   DEFINITIONS

            Section 1.1. DEFINITION OF TERMS. Unless the context otherwise
requires, (a) a term defined in the Indenture has the same meaning when used in
this First Supplemental Indenture, (b) a term defined anywhere in this First
Supplemental Indenture has the same meaning throughout and (c) the following
terms have the meanings given to them in the Declaration (including, without
limitation, Annex I thereto):

                  CLEARING AGENCY
                  DELAWARE TRUSTEE
                  DISTRIBUTION
                  NO RECOGNITION OPINION
                  PREFERRED SECURITIES GUARANTEE
                  PREFERRED SECURITY CERTIFICATE

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                  PRO RATA
                  PROPERTY TRUSTEE
                  PURCHASE AGREEMENT
                  REGULAR TRUSTEE
                  SPECIAL EVENT
                  TAX EVENT
                  TAX EVENT OPINION

            In addition, the following terms have the following respective
meanings:

            "DECLARATION" means the Amended and Restated Declaration of Trust of
XL Capital Trust [ ], a Delaware statutory business trust, dated as of
[         ], 20[  ].

            "DISSOLUTION EVENT" means that, as a result of the occurrence and
continuation of a Special Event, the Trust is to be dissolved in accordance with
the Declaration and the Notes held by the Property Trustee are to be distributed
to the holders of the Trust Securities PRO RATA in accordance with the
Declaration.

            "MATURITY DATE" means the date on which the Notes mature and on
which the principal shall be due and payable together with all accrued and
unpaid interest thereon including Additional Interest, if any.

            "SENIOR INDEBTEDNESS" means: (i) any payment in respect of (A)
indebtedness of the Company for money borrowed and (B) indebtedness evidenced by
securities, debentures, bonds, notes or other similar instruments issued by the
Company; (ii) all capital lease obligations of the Company; (iii) all
obligations of the Company issued or assumed as the deferred purchase price of
property, all conditional sale obligations of the Company and all obligations of
such obligor under any title retention agreement (but excluding trade accounts
payable arising in the ordinary course of business); (iv) all obligations of the
Company for reimbursement on any letter of credit, banker's acceptance, security
purchase facility or similar credit transaction; (v) all obligations of the type
referred to in clauses (i) through (iv) of other Persons for the payment of
which the Company is responsible or liable as obligor, guarantor or otherwise;
and (vi) all obligations of the type referred to in clauses (i) through (v) of
other Persons secured by any lien on any property or asset of the Company
(whether or not such obligation is assumed by the Company), except for any such
indebtedness that is by its terms subordinated to or pari passu with the Notes,
as the case may be. For greater certainty, "Senior Indebtedness" includes all
indebtedness for money borrowed between or among the Company and its Affiliates,
except for such indebtedness that is by its terms subordinated to or pari passu
with the Notes, as the case may be. Such Senior Indebtedness shall continue to
be Senior Indebtedness and be entitled to the benefits of Article VI hereof
irrespective of any amendment, modification or waiver of any term of such Senior
Indebtedness.

            Section 1.2. INTERPRETATION. Each definition in this First
Supplemental Indenture includes the singular and the plural, and references to
the neuter gender include the masculine and feminine where appropriate. Terms
which relate to accounting matters shall be interpreted in accordance with
generally accepted accounting principles in effect from time to time. References
to any statute mean such statute as amended at the time and include any
successor legislation. The word "or" is not exclusive, and the words "herein,"
"hereof" and "hereunder" refer to this First Supplemental Indenture as a whole.
References to Articles and Sections are to the Articles and Sections of this
First Supplemental Indenture. The headings to the Articles and Sections are for
convenience of reference and shall not affect the meaning or interpretation of
this First Supplemental Indenture.

                                   ARTICLE II

                    GENERAL TERMS AND CONDITIONS OF THE NOTES

            Section 2.1. DESIGNATION AND PRINCIPAL AMOUNT. There is hereby
authorized a series of Securities designated the "[  ]% Subordinated Deferrable
Interest Notes due [        ], 20[  ]." The aggregate principal


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amount of Notes which may be authenticated and delivered under the Indenture is
limited to $[      ] (except for Notes authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Notes
pursuant to Sections 2.08, 2.09, 2.11, 3.07 or 9.05 of the Indenture and except
for any Notes which pursuant to Section 2.04 of the Indenture are deemed not to
have been authenticated and delivered pursuant to the Indenture).

            Section 2.2. MATURITY. The Maturity Date will be [       ], 20[  ].

            Section 2.3. FORM AND PAYMENT. Except as provided in Section 2.4,
the Notes shall be issued in fully registered certificated form without interest
coupons. Principal of and interest (including Additional Interest, if any) on
the Notes issued in certificated form will be payable, the transfer of such
Notes will be registrable and such Notes will be exchangeable for Notes bearing
identical terms and provisions at the office or agency of the Trustee in New
York, New York, provided, however, that payment of interest may be made at the
option of the Company by check mailed to the registered Holder at such address
as shall appear in the security register maintained by the Registrar.
Notwithstanding the foregoing, so long as the registered Holder of any Notes is
the Property Trustee, the payment of the principal of and interest (including
Additional Interest, if any) on such Notes held by the Property Trustee will be
made at such place and to such account as may be designated by the Property
Trustee.

            Section 2.4. GLOBAL NOTE. In connection with a Dissolution Event:

            (a) Notes in certificated form may be presented to the Trustee by
the Property Trustee in exchange for a global Note in an aggregate principal
amount equal to the aggregate principal amount of the Notes so presented, to be
registered in the name of The Depository Trust Company ("DTC"), as the initial
Clearing Agency for the Notes, or the nominee of DTC, and delivered by the
Trustee to DTC for crediting to the accounts of its participants pursuant to the
instructions of the Regular Trustees. The Company, upon any such presentation,
shall execute a global Note in such aggregate principal amount and deliver the
same to the Trustee for authentication and delivery in accordance with the
Indenture and this First Supplemental Indenture. Payments on the Notes issued as
a global Note will be made in immediately available funds to DTC (or a successor
Clearing Agency); and

            (b) If any Preferred Securities are held in certificated form (i.e.,
not in book entry form), Notes in certificated form may be presented to the
Trustee by the Property Trustee and any Preferred Security Certificate which
represents Preferred Securities (other than Preferred Securities held by DTC (or
a successor Clearing Agency) or its nominee) ("NON BOOK-ENTRY PREFERRED
SECURITIES") will be deemed to represent beneficial interests in Notes in
certificated form presented to the Trustee by the Property Trustee having an
aggregate principal amount equal to the aggregate stated liquidation amount of
the Non Book-Entry Preferred Securities until such Preferred Security
Certificates are presented to the Registrar for transfer or reissuance, at which
time such Preferred Security Certificates will be canceled and a Note in
certificated form, registered in the name of the holder of such Preferred
Security Certificate or the transferee of the holder of such Preferred Security
Certificate, as the case may be, with an aggregate principal amount equal to the
aggregate stated liquidation amount of the Preferred Security Certificate
canceled, will be executed by the Company and delivered to the Trustee for
authentication and delivery in accordance with the Indenture and this First
Supplemental Indenture. Upon issuance of such Notes, Notes in certificated form
with an equivalent aggregate principal amount that were presented by the
Property Trustee to the Trustee will be deemed to have been canceled.

            Section 2.5. INTEREST. (a) Each Note will bear interest at the rate
of [  ]% per annum (the "COUPON RATE") from the original date of issuance until
the principal thereof becomes due and payable, and on any overdue principal and
(to the extent that payment of such interest is enforceable under applicable
law) on any overdue installment of interest at the Coupon Rate, compounded
quarterly, payable (subject to the provisions of Article IV) quarterly in
arrears on [      ], [      ], [      ] and [      ] of each year (each, an
"INTEREST PAYMENT DATE"), commencing on [       ], 20[  ], to the Person in
whose name such Note or any predecessor Note is registered, at the close of
business on the Regular Record Date for such interest installment, which shall
be the close of business on the Business Day next preceding that Interest
Payment Date. If pursuant to the provisions of Section


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2.08 of the Indenture the Notes are no longer represented by a global Security,
the Company may select a regular record date for such interest installment which
shall be any date at least fifteen days before an Interest Payment Date.

            (b) The amount of interest payable for any period will be computed
on the basis of a 360-day year of twelve 30-day months. In the event that any
date on which interest is payable on the Notes is not a Business Day, then
payment of interest payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other payment in respect of
any such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date. The
amount of interest payable for any period shorter than a full quarterly period
for which interest is computed will be computed on the basis of the actual
number of days elapsed in such a 90-day quarter.

            (c) If at any time while the Property Trustee is the Holder of any
Notes, the Trust or the Property Trustee is required to pay any taxes, duties,
assessments or governmental charges of whatever nature (other than withholding
taxes) imposed by the United States, or any other taxing authority, then, in any
case, the Company will pay as additional interest ("ADDITIONAL INTEREST") on the
Notes held by the Property Trustee, such additional amounts as shall be required
so that the net amounts received and retained by the Trust and the Property
Trustee after paying such taxes, duties, assessments or other governmental
charges will be equal to the amounts the Trust and the Property Trustee would
have received had no such taxes, duties, assessments or other governmental
charges been imposed.

            Section 2.6. DENOMINATIONS. In the event Notes are issued in
certificated form, such Notes will be in denominations of $1,000 and integral
multiples thereof.

                                   ARTICLE III

                             REDEMPTION OF THE NOTES

            Section 3.1. TAX EVENT REDEMPTION. If a Tax Event has occurred and
is continuing and after receiving a Tax Event Opinion, the Regular Trustees
shall have been informed by tax counsel rendering the Tax Event Opinion that a
No Recognition Opinion cannot be delivered to the Trust, then, notwithstanding
Section 3.2(a) but subject to Section 3.2(b), the Company shall have the right,
upon not less than 30 nor more than 60 days' notice to the registered Holders of
the Notes, to redeem the Notes, in whole or in part, for cash within 90 days
following the occurrence of such Tax Event (the "90 DAY PERIOD") at a redemption
price equal to 100% of the principal amount to be redeemed plus any accrued and
unpaid interest thereon to the date of such redemption (the "SPECIAL REDEMPTION
PRICE"), provided, however, that if at the time there is available to the
Company the opportunity to eliminate, within the 90 Day Period, the Tax Event by
taking some ministerial action ("MINISTERIAL ACTION"), such as filing a form or
making an election, or pursuing some other similar reasonable measure that has
no adverse effect on the Company, the Trust or the holders of the Trust
Securities, the Company shall pursue such Ministerial Action in lieu of
redemption; and provided further, that the Company shall have no right to redeem
the Notes while the Trust is pursuing any Ministerial Action pursuant to its
obligations under the Declaration. The Special Redemption Price shall be paid
prior to 12:00 noon, New York City time, on the date of such redemption or at
such earlier time as the Company determines and specifies in the notice of
redemption; provided, however, the Company shall deposit with the Trustee an
amount sufficient to pay the Special Redemption Price by 10:00 a.m., New York
City time, on the date such Special Redemption Price is to be paid.

            Section 3.2. OPTIONAL REDEMPTION BY COMPANY. (a) Subject to the
provisions of Article Three of the Indenture and to Section 3.2(b), the Company
shall have the right to redeem the Notes, in whole or in part, from time to
time, on or after [      ], 20[  ], at a redemption price equal to 100% of the
principal amount to be redeemed plus any accrued and unpaid interest thereon to
the date of such redemption (the "OPTIONAL REDEMPTION PRICE"). Any redemption
pursuant to this paragraph will be made upon not less than 30 or more than 60
days' notice to the registered Holder of the Notes, at the Optional Redemption
Price. If the Notes are only partially redeemed


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pursuant to this Section 3.2, the Notes will be redeemed by lot or by any other
method utilized by the Trustee; provided, however, that if at the time of
redemption the Notes are registered as a global security, the Depositary shall
determine by lot the interest of each of its participants in such global Note to
be redeemed. The Optional Redemption Price shall be paid prior to 12:00 noon,
New York City time, on the date of such redemption or at such earlier time as
the Company determines and specifies in the notice of redemption, provided the
Company shall deposit with the Trustee an amount sufficient to pay the Optional
Redemption Price by 10:00 a.m., New York City time, on the date such Optional
Redemption Price is to be paid.

            (b) If a partial redemption of the Notes would result in the
delisting of the Preferred Securities issued by the Trust from any national
securities exchange or other organization on or with which the Preferred
Securities are then listed, the Company shall not be permitted to effect such
partial redemption and may only redeem the Notes in whole.

            Section 3.3. NO SINKING FUND. The Notes are not entitled to the
benefit of any sinking fund.

                                   ARTICLE IV

                      EXTENSION OF INTEREST PAYMENT PERIOD

            Section 4.1. EXTENSION OF INTEREST PAYMENT PERIOD. The Company shall
have the right, at any time and from time to time prior to the Maturity Date, to
extend the interest payment period of such Notes for up to twenty (20)
consecutive quarters (the "EXTENDED INTEREST PAYMENT PERIOD"). To the extent
permitted by applicable law, interest, the payment of which has been deferred
because of the extension of the interest payment period pursuant to this Section
4.1, will bear interest compounded quarterly at the Coupon Rate for each quarter
of the Extended Interest Payment Period ("COMPOUNDED INTEREST"). At the end of
the Extended Interest Payment Period, the Company shall pay all interest accrued
and unpaid on the Notes, including any Additional Interest ("DEFERRED
INTEREST"), which shall be payable to the Holders of the Notes in whose names
the Notes are registered in the security register maintained by the Registrar on
the first Regular Record Date after the end of the Extended Interest Payment
Period. Before the termination of any Extended Interest Payment Period, the
Company may further extend such period, provided, however, that such period
together with all previous and such further extensions thereof shall not exceed
twenty (20) consecutive quarters or extend beyond the Maturity Date. Upon the
termination of any Extended Interest Payment Period and upon the payment of all
Deferred Interest then due, the Company may select a new Extended Interest
Payment Period, subject to the foregoing requirements. No interest shall be due
and payable during an Extended Interest Payment Period, except at the end
thereof.

            Section 4.2. NOTICE OF EXTENSION. (a) If the Property Trustee is the
only registered Holder of the Notes at the time the Company selects an Extended
Interest Payment Period, the Company shall give written notice to both the
Regular Trustees and the Property Trustee of its selection of such Extended
Interest Payment Period one Business Day before the earlier of (i) the next
succeeding date on which Distributions on the Trust Securities are payable, or
(ii) the date the Trust is required to give notice of the record or payment date
for such Distributions to the New York Stock Exchange or other applicable
self-regulatory organization or to holders of the Preferred Securities, but in
any event at least one Business Day before such record date. The Regular
Trustees shall give notice of the Company's selection of such Extended Interest
Payment Period to the holders of the Preferred Securities.

            (b) If the Property Trustee is not the only Holder of the Notes at
the time the Company selects an Extended Interest Payment Period, the Company
shall give the Holders of the Notes and the Trustee written notice of its
selection of such Extended Interest Payment Period ten (10) Business Days before
the earlier of (i) the next succeeding Interest Payment Date, or (ii) the date
the Company is required to give notice of the record or payment date of such
interest payment to the New York Stock Exchange or other applicable
self-regulatory organization or to Holders of the Notes.


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            (c) The quarter in which any notice is given pursuant to paragraphs
(a) or (b) of this Section 4.2 shall be counted as one of the twenty quarters
permitted in the maximum Extended Interest Payment Period permitted under
Section 4.1.

                                    ARTICLE V

                                    EXPENSES

            Section 5.1. PAYMENT OF EXPENSES. In connection with the offering,
sale and issuance of the Notes to the Property Trustee in connection with the
sale of the Trust Securities by the Trust, and in connection with the
maintenance of the Trust for so long as the Trust Securities are outstanding,
the Company shall:

            (a) pay all costs and expenses relating to the offering, sale and
      issuance of the Notes, including compensation of the Trustee under the
      Indenture in accordance with the provisions of Section 7.07 of the
      Indenture;

            (b) pay all costs and expenses of the Trust (including, but not
      limited to, costs and expenses relating to the organization of the Trust,
      the offering, sale and issuance of the Trust Securities, the fees and
      expenses of the Property Trustee and the Delaware Trustee, the costs and
      expenses relating to the operation of the Trust, including without
      limitation, costs and expenses of accountants, attorneys, statistical or
      bookkeeping services, expenses for printing and engraving and computing or
      accounting equipment, paying agent(s), registrar(s), transfer agent(s),
      any Clearing Agency for the Notes, duplicating, travel and telephone and
      other telecommunications expenses and costs and expenses incurred in
      connection with the acquisition, financing, and disposition of Trust
      assets), other than obligations of the Trust in respect of the Common
      Securities and the Preferred Securities;

            (c) be primarily liable for any indemnification obligations arising
      with respect to the Declaration;

            (d) pay any and all taxes, duties, assessments or governmental
      charges of whatever nature (other than United States withholding taxes
      attributable to the Trust or its assets) imposed on the Trust or its
      assets and all liabilities, costs and expenses of the Trust with respect
      to such taxes, duties, assessments or governmental charges; and

            (e) pay any and all fees and expenses related to the enforcement by
      the Property Trustee of the rights of the holders of the Preferred
      Securities.

                                   ARTICLE VI

                                  SUBORDINATION

            Section 6.1. AGREEMENT TO SUBORDINATE. The Company covenants and
agrees, and each holder of Notes issued hereunder by such holder's acceptance
thereof likewise covenants and agrees, that all Notes shall be issued subject to
the provisions of this Article VI; and each holder of a Note, whether upon
original issue or upon transfer or assignment thereof, accepts and agrees to be
bound by such provisions.

            The payment by the Company of the principal of, premium, if any, and
interest on all Notes issued hereunder shall, to the extent and in the manner
hereinafter set forth, be subordinated and subject in right of payment to the
prior payment in full of all Senior Indebtedness, whether outstanding at the
date of this First Supplemental Indenture or thereafter incurred.


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            This Article shall constitute a continuing offer to all Persons who,
in reliance upon such provisions, become holders of, or continue to hold, Senior
Indebtedness, and such provisions are made for the benefit of the holders of
Senior Indebtedness and such holders are made obligees hereunder and they and/or
each of them may enforce such provisions.

            No provision of this Article VI shall prevent the occurrence of any
default or Event of Default with respect to the Notes.

            Section 6.2. DEFAULT ON SENIOR INDEBTEDNESS. In the event and during
the continuation of any default by the Company in the payment of principal,
premium, interest or any other amount due on any Senior Indebtedness, or in the
event that the maturity of any Senior Indebtedness has been accelerated because
of a default, then, in either case, no payment shall be made by the Company to
the Holders of the Notes with respect to the principal (including redemption and
sinking fund payments) of, premium, if any, interest on, or any other amount
owing in respect of, the Notes.

            In the event that, notwithstanding the foregoing, any payment shall
be received by the Trustee or any Holder of the Notes when such payment is
prohibited by the preceding paragraph of this Section 6.2, such payment shall be
held in trust for the benefit of, and shall be paid over or delivered to, the
holders of Senior Indebtedness or their respective representatives, or to the
trustee or trustees under any indenture pursuant to which any of such Senior
Indebtedness may have been issued, as their respective interests may appear, but
only to the extent that the holders of the Senior Indebtedness (or their
representative or representatives or a trustee) notify the Trustee within 90
days of such payment of the amounts then due and owing on the Senior
Indebtedness and only the amounts specified in such notice to the Trustee shall
be paid to the holders of Senior Indebtedness.

            Section 6.3. LIQUIDATION; DISSOLUTION; BANKRUPTCY. Upon any payment
by the Company, or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to creditors upon any
dissolution or winding-up or liquidation or reorganization of the Company,
whether voluntary or involuntary or in bankruptcy, insolvency, receivership or
other proceedings, all amounts due upon all Senior Indebtedness shall first be
paid in full, or payment thereof provided for in money in accordance with its
terms, before any payment or distribution is made by the Company to the Holders
of the Notes on account of the principal of, premium, if any, interest on, or
any other amount owing in respect of, the Notes; and upon any such dissolution
or winding-up or liquidation or reorganization, any payment by the Company, or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, to which the Holders of the Notes or the Trustee would
be entitled to receive from the Company, except for the provisions of this
Article VI, shall be paid by the Company or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other Person making such payment or
distribution, or by the Holders of the Notes or by the Trustee under this
Indenture if received by them or it, directly to the holders of Senior
Indebtedness (PRO RATA to such holders on the basis of the respective amounts of
Senior Indebtedness held by such holders, as calculated by the Company) or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
may have been issued, as their respective interests may appear, to the extent
necessary to pay such Senior Indebtedness in full, in money or money's worth,
after giving effect to any concurrent payment or distribution to or for the
holders of such Senior Indebtedness, before any payment or distribution is made
to the Holders of Notes or to the Trustee.

            In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee or the Holders of the Notes before all Senior Indebtedness is paid in
full, or provision is made for such payment in money in accordance with its
terms, such payment or distribution shall be held in trust for the benefit of
and shall be paid over or delivered to the holders of such Senior Indebtedness
or their representative or representatives, or to the trustee or trustees under
any indenture pursuant to which any instruments evidencing such Senior
Indebtedness may have been issued, as their respective interests may appear, as
calculated by the Company, for application to the payment of all Senior
Indebtedness remaining unpaid to the extent necessary to pay such Senior
Indebtedness in full in money in accordance with its terms, after giving effect
to any concurrent payment or distribution to or for the benefit of the holders
of such Senior Indebtedness.


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            For purposes of this Article VI, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article VI with respect
to the Notes to the payment of all Senior Indebtedness that may at the time be
outstanding, provided, however, that (i) such Senior Indebtedness is assumed by
the new corporation, if any, resulting from any such reorganization or
readjustment, and (ii) the rights of the holders of such Senior Indebtedness are
not, without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or the merger of the
Company into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided for in Article Five of the Indenture shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section 6.3 if such other corporation shall, as a part of such consolidation,
merger, conveyance or transfer, comply with the conditions stated in Article
Five of the Indenture. Nothing in Section 6.2 or in this Section 6.3 shall apply
to claims of, or payments to, the Trustee under or pursuant to Section 7.07 of
the Indenture.

            Section 6.4. SUBROGATION. Subject to the payment in full of all
Senior Indebtedness, the rights of the Holders of the Notes shall be subrogated
to the rights of the holders of such Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Company applicable to such
Senior Indebtedness until the principal of, premium, if any, and interest on,
and all other amounts owing in respect of, the Notes shall be paid in full; and,
for the purposes of such subrogation, no payments or distributions to the
holders of such Senior Indebtedness of any cash, property or securities to which
the Holders of the Notes or the Trustee would be entitled except for the
provisions of this Article VI, and no payment over pursuant to the provisions of
this Article VI, to or for the benefit of the holders of such Senior
Indebtedness by Holders of the Notes or the Trustee, shall, as between the
Company, its creditors other than holders of Senior Indebtedness, and the
Holders of the Notes be deemed to be a payment by the Company to or on account
of such Senior Indebtedness. It is understood that the provisions of this
Article VI are and are intended solely for the purposes of defining the relative
rights of the Holders of the Notes, on the one hand, and the holders of Senior
Indebtedness on the other hand.

            Nothing contained in this Article VI or elsewhere in this First
Supplemental Indenture or the Indenture or in the Notes is intended to or shall
impair, as between the Company, its creditors other than the holders of Senior
Indebtedness, and the Holders of the Notes, the obligation of the Company, which
is absolute and unconditional, to pay to the Holders of the Notes the principal
of (and premium, if any) and interest on and all other amounts owing in respect
of the Notes as and when the same shall become due and payable in accordance
with their terms, or is intended to or shall affect the relative rights of the
Holders of the Notes and creditors of the Company, other than the holders of
Senior Indebtedness, nor shall anything herein or therein prevent the Trustee or
the Holder of any Note from exercising all remedies otherwise permitted by
applicable law upon default under the Indenture, as amended and supplemented by
this First Supplemental Indenture, subject to the rights, if any, under this
Article VI of the holders of such Senior Indebtedness in respect of cash,
property or securities of the Company received upon the exercise of any such
remedy.

            Upon any payment or distribution of assets of the Company referred
to in this Article VI, the Trustee, subject to the provisions of Section 7.01 of
the Indenture, and the Holders of the Notes, shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in which such
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidation trustee,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the Holders of the Notes, for the purposes of ascertaining the
Persons entitled to participate in such distribution, the holders of Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article VI.

            Section 6.5. TRUSTEE TO EFFECTUATE SUBORDINATION. Each Holder of a
Note by such holder's acceptance thereof authorizes and directs the Trustee on
such holder's behalf to take such action as may be necessary or appropriate to
effectuate the subordination provided in this Article VI and appoints the
Trustee as such holder's attorney-in-fact for any and all such purposes.


                                      -8-
<PAGE>

            Section 6.6. NOTICE BY THE COMPANY. The Company shall give prompt
written notice to a Trust Officer of any fact known to the Company that would
prohibit the making of any payment of monies to or by the Trustee in respect of
the Notes pursuant to the provisions of this Article VI. Notwithstanding the
provisions of this Article VI or any other provision of the Indenture and this
First Supplemental Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment of
monies to or by the Trustee in respect of the Notes pursuant to the provisions
of this Article VI unless and until a Trust Officer shall have received written
notice thereof from the Company or a holder or holders of Senior Indebtedness or
from any representative or trustee therefor; and before the receipt of any such
written notice, the Trustee, subject to the provisions of Section 7.01 of the
Indenture, shall be entitled in all respects to assume that no such facts exist;
provided, however, that if the Trustee shall not have received the notice
provided for in this Section 6.6 at least two Business Days prior to the date
upon which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (or premium, if
any) or interest on any Note) then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive such
money and to apply the same to the purposes for which they were received, and
shall not be affected by any notice to the contrary that may be received by it
within two Business Days prior to such date.

            The Trustee, subject to the provisions of Section 7.01 of the
Indenture, shall be entitled to rely on the delivery to it of a written notice
by a Person representing himself to be a holder of Senior Indebtedness (or a
representative or trustee on behalf of such holder) to establish that such
notice has been given by a holder of such Senior Indebtedness or a
representative or trustee on behalf of any such holder or holders. In the event
that the Trustee determines in good faith that further evidence is required with
respect to the right of any Person as a holder of such Senior Indebtedness to
participate in any payment or distribution pursuant to this Article VI, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of such Senior Indebtedness held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article VI, and if such evidence is not furnished, the Trustee
may defer any payment to such Person pending judicial determination as to the
right of such Person to receive such payment.

            Section 6.7. RIGHTS OF THE TRUSTEE; HOLDERS OF SENIOR INDEBTEDNESS.
The Trustee in its individual capacity shall be entitled to all the rights set
forth in this Article VI in respect of any Senior Indebtedness at any time held
by it, to the same extent as any other holder of Senior Indebtedness, and
nothing in this Indenture shall deprive the Trustee of any of its rights as such
holder.

            With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article VI, and no implied covenants or
obligations with respect to the holders of such Senior Indebtedness shall be
read into the Indenture or this First Supplemental Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and, subject to the provisions of Section 7.01 of
the Indenture, the Trustee shall not be liable to any holder of Senior
Indebtedness if it shall pay over or deliver to Holders of Notes, the Company or
any other Person money or assets to which any holder of Senior Indebtedness
shall be entitled by virtue of this Article VI or otherwise.

            Section 6.8. SUBORDINATION MAY NOT BE IMPAIRED. No right of any
present or future holder of any Senior Indebtedness to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by the Company
with the terms, provisions and covenants of the Indenture or this First
Supplemental Indenture, regardless of any knowledge thereof that any such holder
may have or otherwise be charged with.

            Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Notes, without incurring responsibility to the Holders of the Notes and without
impairing or releasing the subordination provided in this Article VI or the
obligations hereunder of the Holders of the Notes to the holders of such Senior
Indebtedness, do any one or more the following: (i) change the manner, place or
terms of payment or extend


                                      -9-
<PAGE>

the time of payment of, or renew or alter, such Senior Indebtedness, or
otherwise amend or supplement in any manner such Senior Indebtedness or any
instrument evidencing the same or any agreement under which such Senior
Indebtedness is outstanding; (ii) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing such senior Indebtedness;
(iii) release any Person liable in any manner for the collection of such Senior
Indebtedness; and (iv) exercise or refrain from exercising any rights against
the Company and any other Person.

                                   ARTICLE VII

                          COVENANT TO LIST ON EXCHANGE

            Section 7.1. LISTING ON EXCHANGE. If the Notes are distributed to
the holders of the Preferred Securities upon a Dissolution Event, the Company
will use its best efforts to list such Notes on the New York Stock Exchange,
Inc. or on such other national securities exchange or with the Nasdaq Stock
Market or such other organization as the Preferred Securities are then listed.

                                  ARTICLE VIII

                                  FORM OF NOTE

            Section 8.1. FORM OF NOTE. The Notes and the Trustee's Certificate
of Authentication to be endorsed thereon are to be substantially in the
following forms:

                             (FORM OF FACE OF NOTE)

            [IF THE NOTE IS TO BE A GLOBAL SECURITY, INSERT: THIS NOTE IS A
GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY ("DTC") OR A NOMINEE OF
DTC. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO
A NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A
NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

            UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]


                                      -10-
<PAGE>

No.                                                                   $

CUSIP No.

                                 XL CAPITAL LTD

                   [  ]% SUBORDINATED DEFERRABLE INTEREST NOTE
                             DUE [        ], 20[  ]

            XL CAPITAL LTD, a Cayman Islands exempted limited company (the
"COMPANY", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
________________ or registered assigns, the principal sum of ________________
Dollars on [       ], 20[  ] and to pay interest on said principal sum from
[       ], 20[  ] or from the most recent interest payment date (each such date,
an "INTEREST PAYMENT DATE") to which interest has been paid or duly provided
for, quarterly (subject to deferral as set forth herein) in arrears on [      ],
[       ], [      ]and [       ] of each year, commencing [         ], 20[  ],
at the rate of [  ]% per annum until the principal hereof shall have become due
and payable, and on any overdue principal and premium, if any, and (without
duplication and to the extent that payment of such interest is enforceable under
applicable law) on any overdue installment of interest, compounded quarterly, at
the same rate per annum. The amount of interest payable on any Interest Payment
Date shall be computed on the basis of a 360-day year of twelve 30-day months.
The amount of interest payable for any period shorter than a full quarterly
period for which interest is computed will be computed on the basis of the
actual number of days elapsed in such 90-day quarter. In the event that any date
on which interest is payable on this Note is not a Business Day, then payment of
interest payable on such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date. The interest
installment so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture, be paid to the Person
in whose name this Note (or one or more Predecessor Securities, as defined in
said Indenture) is registered at the close of business on the Regular Record
Date for such interest installment [which shall be the close of business on the
Business Day next preceding such Interest Payment Date.] [IF PURSUANT TO THE
PROVISIONS OF SECTION 2.08 OF THE INDENTURE THE NOTES ARE NO LONGER REPRESENTED
BY A GLOBAL SECURITY -- which shall be [insert date (to be selected by the
Company) which is not less than 15 days prior to each Interest Payment Date.]]
Any such interest installment not punctually paid or duly provided for shall
forthwith cease to be payable to the registered Holders on such Regular Record
Date, and may be paid to the Person in whose name this Note (or one or more
Predecessor Securities) is registered at the close of business on a special
record date to be fixed by the Company for the payment of such defaulted
interest, notice whereof shall be given to the registered Holders of the Notes
not less than fifteen (15) days prior to such special record date, or may be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Notes may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in the Indenture. The principal of (and premium, if any) and the interest on
this Note shall be payable at the office or agency of the Trustee maintained for
that purpose in New York, New York, in any coin or currency of the United States
of America which at the time of payment is legal tender for payment of public
and private debts; provided, however, that payment of interest may be made at
the option of the Company by check mailed to the registered Holder at such
address as shall appear in the security register maintained by the Registrar.
Notwithstanding the foregoing, so long as the Holder of this Note is the
Property Trustee of XL Capital Trust [ ], the payment of the principal of (and
premium, if any) and interest on this Note will be made in immediately available
funds at such place and to such account as may by designated by the Property
Trustee of XL Capital Trust [ ].

            The indebtedness evidenced by this Note is, to the extent provided
in the Indenture, subordinate and junior in right of payment to the prior
payment in full of all Senior Indebtedness, and this Note is issued subject to
the provisions of the Indenture with respect thereto. Each Holder of this Note,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his behalf to take such action as may be
necessary or appropriate to acknowledge or effectuate the subordination so
provided and (c) appoints the


                                      -11-
<PAGE>

Trustee his attorney-in-fact for any and all such purposes. Each Holder hereof,
by his acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder of
Senior Indebtedness, whether now outstanding or hereafter incurred, and waives
reliance by each such holder upon said provisions.

            This Note shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until the
Certificate of Authentication hereon shall have been signed by or on behalf of
the Trustee.

            The provisions of this Note are continued on the reverse side hereof
and such continued provisions shall for all purposes have the same effect as
though fully set forth at this place.

            IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.

Dated: [       ], 20[  ]

                                           XL CAPITAL LTD


                                           By: _________________________________
                                               Name:
                                               Title:

Attest:


By: ______________________________
    Name:
    Title:


                                      -12-
<PAGE>

                     (FORM OF CERTIFICATE OF AUTHENTICATION)

                          CERTIFICATE OF AUTHENTICATION

            This is one of the Securities of the series designated herein
referred to in the within-mentioned Indenture.

                                          THE BANK OF NEW YORK,
                                            as Trustee


                                          By:___________________________________
                                             Authorized Signatory


                                      -13-
<PAGE>

                            (FORM OF REVERSE OF NOTE)

            This Note is one of a duly authorized series of Securities of the
Company designated its "[  ]% Subordinated Deferrable Interest Notes due
[       ], 20[  ]" (herein sometimes referred to as the "NOTES"), issued under
and pursuant to an Indenture dated as of June 2, 2004, duly executed and
delivered between the Company and The Bank of New York, not in its individual
capacity but solely as trustee (the "TRUSTEE"), as supplemented by a First
Supplemental Indenture dated as of [       ], 20[  ], between the Company and
the Trustee (such Indenture as so supplemented, the "INDENTURE"), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the Holders of the Notes.
The terms of the Notes include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939, as in effect
on the date of the Indenture (the "TIA"). This Note is subject to all such terms
and the Holder of this Note is referred to the Indenture and the TIA for a
statement of those terms.

            The Notes are general unsecured obligations of the Company and are
limited (except as otherwise provided in the Indenture) to $[     ] in aggregate
principal amount.

            Upon the occurrence and continuation of a Tax Event, in certain
circumstances this Note may be redeemed by the Company at a redemption price
equal to 100% of the principal amount hereof, plus any accrued but unpaid
interest thereon to the date of such redemption (the "SPECIAL REDEMPTION
PRICE"). The Special Redemption Price shall be paid prior to 12:00 noon, New
York City time, on the date of such redemption or at such earlier time as the
Company determines. The Company shall also have the right to redeem this Note at
the option of the Company, without premium or penalty, in whole or in part at
any time on or after [ ], 20[ ] (an "OPTIONAL REDEMPTION"), at a redemption
price equal to 100% of the principal amount hereof, plus any accrued but unpaid
interest thereon to the date of such redemption (the "OPTIONAL REDEMPTION
PRICE"). Any optional redemption pursuant to this paragraph will be made upon
not less than 30 or more than 60 days notice, at the Optional Redemption Price.
If the Notes are only partially redeemed by the Company pursuant to an Optional
Redemption, the Notes will be redeemed by lot or by any other method utilized by
the Trustee; provided, however, that if at the time of redemption the Notes are
registered as a global Note, the depositary shall determine by lot the interest
of each of its participants in such global Note to be redeemed.

            In the event of redemption of this Note in part only, a new Note or
Notes of this series for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.

            In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Notes may be declared,
and upon such declaration shall become, due and payable, in the manner, with the
effect and subject to the conditions provided in the Indenture.

            The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of a majority in aggregate principal
amount of the Securities of each series affected at the time outstanding, as
defined in the Indenture, to amend or supplement the Indenture or the Securities
of any series (including the Notes) for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of the Indenture
or of modifying in any manner the rights of the Holders of the Securities
(including the Notes); provided, however, that no such amendment or supplement
shall (i) extend the fixed maturity of any Securities of any series, or reduce
the principal amount thereof, or reduce the rate or extend the time for payment
of interest thereon, without the consent of the Holder of each Security of such
series so affected or (ii) reduce the aforesaid percentage in aggregate
principal amount of Securities, the Holders of which are required to consent to
any such amendment or supplement, without the consent of the Holders of each
Security then outstanding and affected thereby. The Indenture also contains
provisions permitting the Holders of a majority in aggregate principal amount of
the Securities of any series at the time outstanding affected thereby, on behalf
of all of the Holders of the Securities of such series, to waive any past
default in the performance of any of the covenants contained in the Indenture,
or established pursuant to the Indenture with respect to such series, and its
consequences, except a default in the payment of the principal of or interest,
if any, on any of the Securities of such series. Any such consent or waiver by
the registered Holder of


                                      -14-
<PAGE>

this Note (unless revoked as provided in the Indenture) shall be conclusive and
binding upon such Holder and upon all future Holders and owners of this Note and
of any Note issued in exchange herefor or in place hereof (whether by
registration of transfer or otherwise), irrespective of whether or not any
notation of such consent or waiver is made upon this Note.

            No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Note at the time and place and at the rate and in the money
herein prescribed.

            The Company shall have the right at any time during the term of the
Notes, and from time to time, to extend the interest payment period of the Notes
for up to twenty (20) consecutive quarters (an "EXTENDED INTEREST PAYMENT
PERIOD"), at the end of which period the Company shall pay all interest then
accrued and unpaid (together with interest thereon at the rate specified for the
Notes to the extent that payment of such interest is enforceable under
applicable law). Before the termination of any such Extended Interest Payment
Period, the Company may further extend such Extended Interest Payment Period,
provided, however, that such Extended Interest Payment Period together with all
previous and such further extensions thereof shall not exceed twenty (20)
consecutive quarters or extend beyond the maturity of the Notes. At the
termination of any such Extended Interest Payment Period and upon the payment of
all accrued and unpaid interest and any additional amounts then due, the Company
may select a new Extended Interest Payment Period, subject to the foregoing
requirements.

            As provided in the Indenture and subject to certain limitations
therein set forth, this Note is transferable by the registered Holder hereof on
the security register of the Company maintained by the Registrar, upon surrender
of this Note for registration of transfer at the office or agency of the Trustee
in New York, New York accompanied by a written instrument or instruments of
transfer in form satisfactory to the Company or the Trustee duly executed by the
registered Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Notes of authorized denominations and for the same
aggregate principal amount will be issued to the designated transferee or
transferees. No service charge will be made for any such transfer, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in relation thereto.

            Prior to due presentment for registration of transfer of this Note,
the Company, the Trustee, any Paying Agent and the Registrar may deem and treat
the registered Holder hereof as the absolute owner hereof (whether or not this
Note shall be overdue and notwithstanding any notice of ownership or writing
hereon made by anyone other than the Registrar) for the purpose of receiving
payment of principal of and interest due hereon and for all other purposes, and
neither the Company nor the Trustee nor any Paying Agent nor the Registrar shall
be affected by any notice to the contrary.

            No past, present or future director, officer, employee or
stockholder, as such, of the Company or the Trustee or any successor of either
thereof shall have any liability for any obligations of the Company or the
Trustee under the Notes or this Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation, all such liability
being, by the acceptance hereof and as part of the consideration for the
issuance hereof, expressly waived and released.

            [The Notes of this series are issuable only in registered form
without coupons in denominations of $[ ] and any integral multiple thereof.]
[This global Note is exchangeable for Notes in definitive certificated form only
under certain limited circumstances set forth in the Indenture. Notes so issued
are issuable only in registered form without coupons in denominations of $1,000
and any integral multiple thereof.] As provided in the Indenture and subject to
certain limitations therein set forth, Notes so issued are exchangeable for a
like aggregate principal amount of Notes of a different authorized denomination,
as requested by the Holder surrendering the same.

            This Note shall be governed by the internal laws of the State of New
York, and for all purposes shall be construed in accordance with the laws of
said State.

            All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.


                                      -15-
<PAGE>

                                   ARTICLE IX

                             ORIGINAL ISSUE OF NOTES

            Section 9.1.  ORIGINAL ISSUE OF NOTES. Notes in the aggregate
principal amount of $[       ] may, upon execution of this First Supplemental
Indenture, be executed by the Company and delivered to the Trustee for
authentication, and the Trustee shall thereupon authenticate and deliver said
Notes to or upon the written order of the Company, signed by its Chairman, its
President, or any Vice President and its Treasurer, an Assistant Treasurer, or
Secretary without any further action by the Company.

                                    ARTICLE X

                                CERTAIN COVENANTS

            The following covenants shall apply to the Notes (but not with
respect to any other series of Securities), and are in addition to the covenants
set forth in Article Four of the Indenture.

            Section 10.1. LIMITATION ON DIVIDENDS AND OTHER PAYMENTS. If (i)
there shall have occurred any event that constitutes an Event of Default or (ii)
the Company shall be in default with respect to its payment of any obligations
under the Preferred Securities Guarantee, then (a) the Company shall not declare
or pay any dividend on, make any distributions with respect to, or redeem,
purchase or make a liquidation payment with respect to, any of its capital
stock, (b) the Company shall not make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities issued by
the Company which rank pari passu with or junior to the Notes, and (c) the
Company shall not make any guarantee payments (other than pursuant to the
Preferred Securities Guarantee) with respect to the foregoing.

            If the Company shall have given notice of its election to defer
payments of interest on the Notes by extending the interest payment period as
provided in Article IV and such period, or any extension thereof, shall be
continuing, then (i) the Company shall not declare or pay any dividend, or make
any distributions with respect to, or redeem, purchase or make a liquidation
payment with respect to, any of its capital stock, (ii) the Company shall not
make any payment of interest, principal, premium, if any, on or repay,
repurchase or redeem any debt securities issued by the Company which rank pari
passu with or junior to the Notes, and (iii) the Company shall not make any
guarantee payments (other than pursuant to the Preferred Securities Guarantee)
with respect to the foregoing.

            Notwithstanding the foregoing restrictions, nothing in this Section
10.1 shall prevent the Company, in any event, from making dividend, redemption,
liquidation or guarantee payments on capital stock, or interest, principal,
redemption or guarantee payments on debt securities issued by the Company
ranking pari passu with or junior to the Notes, where the payment is made by way
of securities (including capital stock) that rank junior to the securities on
which such payment is being made.

            Section 10.2. COVENANTS AS TO THE TRUST. For so long as the
Trust Securities remain outstanding, the Company will (i) maintain 100% direct
or indirect ownership of the Common Securities; provided, however, that any
permitted successor of the Company under the Indenture may succeed to the
Company's ownership of the Common Securities, (ii) not cause, as sponsor of the
Trust, or permit, as the holder of the Common Securities of the Trust, the
termination, dissolution or winding-up of the Trust, except in connection with a
distribution of the Notes as provided in the Declaration and in connection with
certain mergers, consolidations or amalgamations as permitted by the
Declaration, (iii) use its reasonable efforts to cause the Trust (a) to remain a
statutory business trust, except in connection with a distribution of Notes to
the holders of the Preferred Securities in liquidation of the Trust, the
redemption of all of the Trust Securities of the Trust or certain mergers,
consolidations or amalgamations, each as permitted by the Declaration, and (b)
to otherwise continue to be treated as a grantor trust for United States fed-


                                      -16-
<PAGE>

eral income tax purposes and (iv) use its reasonable efforts to cause each
holder of Trust Securities to be treated as owning an individual beneficial
interest in the Notes.

                                   ARTICLE XI

                            CERTAIN EVENTS OF DEFAULT

            Section 11.1. ADDITIONAL EVENTS OF DEFAULT. An Event of Default with
respect to the Notes shall include those events described in Section 6.01 of the
Indenture and, with respect to the Notes only, the occurrence of any of the
following events: the voluntary or involuntary dissolution, winding up or
termination of the Trust, except in connection with (i) the distribution of
Notes to holders of Preferred Securities in liquidation of their interests in
the Trust, (ii) the redemption of all of the outstanding Preferred Securities,
or (iii) certain mergers, consolidations or amalgamations, each as permitted by
the provisions of the Declaration.

            Section 11.2. WAIVER OF EXISTING DEFAULTS. Notwithstanding Section
6.04 of the Indenture, the Holders of a majority in aggregate principal amount
of the Notes may not waive a Default or an existing Event of Default (i) in the
payment of the principal of or accrued interest on the Notes, unless the Company
has paid or deposited with the Trustee a sum sufficient to pay all matured
installments of interest (with interest on overdue interest at the rate
specified in Section 2.5(a)) upon all of the Notes and the principal of the
Notes that shall have become due otherwise than by acceleration or (ii) that
arise out of a breach by the Company of Section 10.1. Section 6.04 of the
Indenture shall, in all other respects and as modified by this Section 11.2,
apply to the Notes.

                                   ARTICLE XII

                                  MISCELLANEOUS

            Section 12.1. SUPPLEMENTAL INDENTURE INCORPORATED INTO INDENTURE.
This First Supplemental Indenture is executed by the Company and the Trustee
pursuant to the provisions of Sections 2.01 and 2.02 of the Indenture, and the
terms and conditions hereof shall be deemed to be part of the Indenture for all
purposes relating to the Notes. The provisions of the Indenture, as modified by
this First Supplemental Indenture, are effective with respect to the Notes, and
are not effective with respect to any series of Securities to be issued pursuant
to any previous or subsequent supplemental indenture or resolution of the Board
of Directors. The Indenture, as supplemented by this First Supplemental
Indenture, is in all respects adopted, ratified and confirmed.

            Section 12.2. TRUSTEE NOT RESPONSIBLE FOR RECITALS; DISCLAIMER. The
recitals herein contained are made by the Company and not by the Trustee, and
the Trustee assumes no responsibility for the correctness thereof. The Trustee
makes no representation as to the validity or sufficiency of this First
Supplemental Indenture.

            Section 12.3. GOVERNING LAW. This First Supplemental Indenture and
each Note shall be deemed to be a contract made under the internal laws of the
State of New York, and for all purposes shall be construed in accordance with
the laws of said State.

            Section 12.4. SEPARABILITY. In case any one or more of the
provisions contained in this First Supplemental Indenture or in the Notes shall
for any reason be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provisions of this First Supplemental Indenture or of the Notes, but this First
Supplemental Indenture and the Notes shall be construed as if such invalid or
illegal or unenforceable provision had never been contained herein or therein.


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<PAGE>

            Section 12.5. COUNTERPARTS. This First Supplemental Indenture may be
executed in any number of counterparts each of which shall be an original; but
such counterparts shall together constitute but one and the same instrument.

            Section 12.6. ACKNOWLEDGMENT OF RIGHTS OF HOLDERS OF PREFERRED
SECURITIES. The Company hereby acknowledges the right of each holder of
Preferred Securities, upon and during the continuance of an Event of Default
under the Declaration that results from the failure of the Company to pay
principal of or interest on the Notes when due, to directly institute
proceedings against the Company to obtain payment to such holder of an amount
equal to the principal or interest so defaulted on with respect to Notes in a
principal amount equal to the aggregate liquidation amount of the Preferred
Securities owned by such holder.


                                      -18-
<PAGE>

            IN WITNESS WHEREOF, XL CAPITAL LTD has caused this First
Supplemental Indenture to be duly executed as a deed the day and year first
before written.


By: _______________________________
    Name:
    Title:


                                      -19-
<PAGE>

            IN WITNESS WHEREOF, the undersigned, being duly authorized, has
executed this First Supplemental Indenture as of the date first above written.

                                         THE BANK OF NEW YORK


                                         By: ___________________________________
                                             Name:
                                             Title:


                                      -20-