XL Capital is thought to have backed off from a bid for the UK life insurance business of General Electric Co., a UK newspaper reported yesterday.

The Times said XL was one of three final bidders for the business, but was no longer in the running, leaving Swiss Re and Deutsche Bank AG as the finalists.

The Times said the sale was expected to fetch ?40 million less than the ?380 million the business was originally priced at.

The Times also said smaller annuity providers are also circling, ?attracted by the prospect of picking up from the auction winner pieces of GE Life that are still open for business?.

GE Life has more than ?7 billion in assets under management and is a market leader in enhanced annuities, which give people whose expected life spans are shortened by bad health better rates than are available in the mainstream annuity market.

An XLspokeswoman said yesterday the company was not in a position to comment on the story.