XL Capital bought Winterthur International in July 2001 from Winterthur Swiss Insurance Co. As part of that purchase, Winterthur Swiss Insurance Co. agreed to replenish Winterthur International's reserves after three years if they proved inadequate.
Winterthur and XL have been unable to agree on the extent to which Winterthur International's reserves need to be replenished, so an independent actuary is evaluating the situation. If the actuary's estimate were closer to Winterthur's than to XL's, XL could be forced to take a $900 million net pre-tax charge, Fitch said.
Fitch said it may cut XL Capital ratings including its "A" long-term issuer rating and the "AA" insurer financial strength ratings of XL Insurance (Bermuda) Ltd. and XL Re Ltd.