share exchange worth over $71 million which will give it a larger stake in South America.

In the deal XL will exchange all of its shares in Risk Capital Holdings Inc.

for that company's ownership interests in Latin American Reinsurance Company, Ltd. Latin American Re is a joint venture between XL, Risk Capital, and Annuity & Life Re (Holdings), Ltd., a Bermuda-based life reinsurer. Cash may be included in the share-for-share deal and the transaction is subject to regulatory approval.

Risk Capital will repurchase 4,755,000 of its shares from XL for a price per share equal to the lesser of 85 percent of the average closing price per share of Risk Capital's shares during the 20 trading days beginning on January 21 and $15.00.