XL Capital Ltd. chairman Brian O'Hara appears to have settled his debt to UBS Bank, which was suing the insurance executive in the United States in an attempt to recover $1.5 million of outstanding loans.

UBS Bank USA, of Salt Lake City, Utah, filed a 'Notice of Voluntary Dismissal With Prejudice' at the US District Court for the District of Utah on February 3, 2009 - just over three months after the action was brought against O'Hara and his wife, Nancy O'Hara.

The OffshoreAlert online newsletter, published by KYC News, reported that in the complaint, UBS stated that Mr. O'Hara borrowed $10 million from the bank in April, 2008 and that the loans were secured by Nancy O'Hara.

Mr. O'Hara, a 60-year-old Bermuda resident, publicly stated that he used the loans "to fund purchases of XL shares in order to avoid the expiration of certain options".

With hindsight, he would have been better off allowing the options to expire, however. XL's shares plummeted from $29.50 per share at the time O'Hara entered into the credit agreement to just $3.45 on October 9, the day that Mr. O'Hara's shares were forcibly sold to meet a margin call.

In its complaint, UBS stated that, after liquidating the collateral securing the loans, there was still a shortfall of $1,535,079, which Brian O'Hara had failed or refused to pay.

Mr. O'Hara has been with XL Capital since the company was formed in 1986 and served as president and chief executive officer from 1994 until May 1, 2008. According to OffshoreAlert, SEC filings show that, over the last 10 years alone, O'Hara received more than $60 million in executive compensation from XL Capital, including $23 million in cash by way of salary and bonuses.

Mr. O'Hara is due to stand down as chairman in April this year.