XL Capital Ltd. has announced it plans to redomicile to Ireland from the Cayman Islands as it became the latest Bermuda-based company to signal its intent to change its parent holding company's place of incorporation.

In an interview with The Royal Gazette, XL's CEO Michael McGavick said the main reason behind the move was the lure of Ireland's "international relationship" for doing business, with the jurisdiction having membership of the European Union and the Organisation for Economic Development and Co-operation, as well as numerous trade and tax treaties throughout the world.

Mr. McGavick said he expected the decision to reincorporate in Ireland would have no impact on the insurance giant's Bermuda operations and staff, but added that some employees from other jurisdictions could make the switch to support the initial activity of the Irish business.

"We don't expect any impact on Bermuda as result of this particular decision," he said.

The move would also see the parent holding company renamed XL Group plc. and more than half of the company's board meetings held in Ireland in the future.

This follows a number of companies redomiciling from Bermuda to Ireland in recent months, with Willis Group Holdings Ltd. among the most recent high profile departure joining a growing list of planned or completed movers, including Accenture, Covidien, Ingersoll-Rand, Cooper Industries Ltd., Warner Chilcott and TBS International.

Mr. McGavick, who said the idea of the move had been kicking around for some time prior to his appointment almost two years ago, described Ireland as a "proper base" for the holding company as well as XL's future as a whole.

"We believe that changing XL's place of incorporation from the Caymans to Ireland is in the best interests of XL and our shareholders," he said.

"Among other benefits, we believe the proposed move will reduce certain risks that may impact us and offer us the opportunity to reinforce our reputation, which is one of our key assets, and to better support our global business platforms.

"We will see minimal impact on our operations, our people and our earnings potential."

XL has been operating in Ireland since 1990 as a base for its European business and the company has cited the country's "stable long-term legal and regulatory environment" as one of its most redeeming features.

"We did see Cayman as a domicile of increasing risk, but our focus is really on Ireland's advantages," said Mr. McGavick.

"It is more based on the status and stature of Ireland in its international dealings and that is where the opportunity really comes - it is not a decision that reflects on Bermuda either one way or the other."

The new XL Group is intended to reflect the insurer's exclusive focus on providing property, casualty and specialty re/insurance products for its clients' complex risks.

To effect the redomestication, a new Irish public limited company, XL Group plc., would replace XL Capital as the ultimate holding company of the XL group of companies, and the company's ordinary shareholders would receive one ordinary share of the new Irish company in lieu of each ordinary share of the company held by them.

XL expects to submit the proposal for redomestication, along with related proposals, to its shareholders in the next several months and complete the transaction on July 1, 2010.

The proposed redomestication will be subject to approval by the company's ordinary shareholders and the Grand Court of the Cayman Islands, as well as satisfaction of other conditions.

XL will continue to be registered with the US Securities and Exchange Commission and be subject to its reporting requirements.

It will also continue to be subject to the mandates of the Sarbanes-Oxley Act of 2002 and the applicable corporate governance rules of the New York Stock Exchange, and will continue to report its financial results in US dollars and under US generally-accepted accounting principles, in addition to any reporting requirements under Irish law.

In addition, the company's shares will continue to trade on the New York Stock Exchange.