XL XL Fleet Corp

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A
(Rule 14a-101)

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.   )

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Preliminary Proxy Statement

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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

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Definitive Proxy Statement

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Definitive Additional Materials

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Soliciting Material Pursuant to §240.14a-12

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XL GROUP
Public Limited Company

(Name of Registrant as Specified In Its Charter)

   

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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Fee previously paid with preliminary materials.

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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

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XL GROUP PLC

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To approve the application by XL-Ireland of a reserve credit, arising on its books of account as a result of the cancellation of XL-Ireland ordinary shares in connection with the scheme of arrangement, to pay up in full at par the ordinary shares allotted to XL-Bermuda in connection with the scheme of arrangement.

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To approve an amendment to the memorandum of association of XL-Ireland to grant XL-Ireland a new object enabling it to enter into the scheme of arrangement.

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To approve an amendment to the articles of association of XL-Ireland to (1) provide that the allotment or issue of all ordinary shares in XL-Ireland on or after such amendment and before 5:00 p.m. (Eastern Time) and 10:00 p.m. (Irish time) (the “ Close of Business ”) on the day before the hearing at which the scheme of arrangement is sanctioned (the “ Cancellation Record Time ”) be allotted and issued subject to the Scheme of Arrangement; (2) allow XL-Bermuda to transfer to itself, or to any person on its behalf, any XL-Ireland ordinary shares allotted or issued to any person on or after the Cancellation Record Time, or otherwise issued after the amendment to the articles of association of XL-Ireland that are not subject to the scheme of arrangement; (3) allow XL-Ireland to appoint an attorney to enter into any transfers required in respect of the transfer referred to at (2) above and XL-Bermuda to appoint an attorney to exercise rights attached to those shares; and (4) disapply rights of pre-emption to XL-Ireland ordinary shares allotted and issued pursuant to the Scheme of Arrangement.

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To approve, as a prospective shareholder of XL-Bermuda, a bye-law of XL-Bermuda that will require that any amendment to the bye-laws of XL-Bermuda must be approved by (1) 75% of the votes cast by shareholders of XL-Bermuda present or represented by proxy and voting at a general meeting or (2) if the Board of Directors of XL-Bermuda has unanimously approved the proposed amendment, a majority of votes cast by shareholders of XL-Bermuda present or represented by proxy and voting at such general meeting.

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To approve, as a prospective shareholder of XL-Bermuda, a bye-law of XL-Bermuda that will require that any merger or amalgamation involving XL-Bermuda must be approved by (1) 75% of the votes cast by shareholders of XL-Bermuda present or represented by proxy and voting at a general meeting or (2) if the Board of Directors of XL-Bermuda has unanimously approved the proposed merger or amalgamation, a majority of votes cast by shareholders of XL-Bermuda present or represented by proxy and voting at such general meeting.

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To approve, as a prospective shareholder of XL-Bermuda, a bye-law of XL-Bermuda that will provide XL-Bermuda the option to purchase for fair market value all or part of the shares held by an XL-Bermuda shareholder if the Board of Directors in its sole discretion determines that ownership of shares of XL-Bermuda by any shareholders may result in adverse tax, regulatory or legal consequences to XL-Bermuda or its subsidiaries or any other shareholder to the extent the Board of Directors, in the reasonable exercise of its discretion, determines it is necessary to avoid or cure such adverse consequences.

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To approve motions to adjourn each meeting to a later date to solicit additional proxies, at the discretion of the chairman of the meeting, if there are insufficient proxies to approve the meeting proposals at the time of each applicable shareholder meeting.

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The accompanying proxy statement provides important information about the meeting proposals described above. We encourage you to read the entire document carefully, including the “Risk Factors” section beginning on page 32 of the accompanying proxy statement, before voting. You are entitled to vote by attending the meetings or by appointing a proxy. It is not necessary that the proxy appointed by you be a shareholder of XL-Ireland.

Your vote is very important. Your Board of Directors unanimously recommends that you vote “FOR” all of the above proposals.

To ensure that your XL-Ireland ordinary shares are voted in accordance with your wishes, please mark, date, sign and return the accompanying proxy cards (one gold for the scheme meeting, and one white for the extraordinary general meeting) in the enclosed, postage-paid envelope as promptly as possible or appoint a proxy to vote your XL-Ireland ordinary shares by using the Internet.

If you hold your XL-Ireland ordinary shares in “street name” beneficially through a bank, broker, trustee, custodian or other nominee (which we generally refer to as “ brokers ” or “ nominees ”), please follow the voting instruction form provided by your broker or nominee. If you are a holder of domestic depositary interests representing XL-Ireland ordinary shares (“ DDIs ”) held through Computershare Investor Services PLC (“ Computershare UK ”), the relevant voting instructions have been provided by Computershare UK (if you hold DDIs directly) or your broker or nominee. If you have any questions relating to voting, please contact Georgeson LLC at the numbers shown below.

Please note that holders of XL-Ireland ordinary shares through brokers or nominees and holders of DDIs may be required to submit voting instructions to their broker, nominee or Computershare UK (for direct holders of DDIs), as applicable, at or prior to the deadline applicable to registered holders of XL-Ireland ordinary shares and such holders should therefore follow the separate instructions that will be provided by their broker, nominee or Computershare UK, as applicable. Computershare UK, if appropriate, or your broker or nominee will not be able to vote your XL-Ireland ordinary shares unless it receives appropriate and timely instructions from you.

If you have any questions about the meetings or require assistance, please call Georgeson LLC, our proxy solicitor, at (866) 482-4943 (toll-free within the United States), at 0800-408-0091 (toll-free within the United Kingdom) or at (781) 575-2137 (outside the United States or the United Kingdom).

On behalf of XL-Ireland’s Board of Directors, thank you for your continued support.

Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued in the contemplated scheme of arrangement or determined if the accompanying proxy statement is truthful or complete. Any representation to the contrary is a criminal offense.

The accompanying proxy statement related to the XL Group plc ordinary shares is dated May 11, 2016 and is first being mailed to the holders of XL Group plc’s ordinary shares on or about May 11, 2016.

SUMMARY OF NOTICES OF THE SPECIAL COURT-ORDERED MEETING AND THE EXTRAORDINARY GENERAL
MEETING OF THE HOLDERS OF XL GROUP PLC ORDINARY SHARES
TO BE HELD ON JUNE 23, 2016

To the Holders of Ordinary Shares of XL Group plc:

On June 23, 2016, XL Group plc, a public limited company organized under the laws of Ireland (“ XL-Ireland ”), will hold a special court-ordered meeting (the “ scheme meeting ”) of the holders of XL-Ireland ordinary shares, par value $0.01 per share, of XL-Ireland (the “ XL-Ireland Ordinary Shares ”), which will commence at 10:00 a.m., Irish time, and an extraordinary general meeting (the “ extraordinary general meeting ”) of shareholders, which will commence at 10:15 a.m., Irish time (or as soon as possible thereafter as the scheme meeting concludes or is adjourned), in order to approve certain proposals, including a proposal related to a scheme of arrangement under Irish law. We sometimes refer to these meetings together as the “ shareholder meetings .” The shareholder meetings will be held at our offices at XL House, 8 St. Stephen’s Green, Dublin 2, Ireland. Shareholders are being asked to vote on the following matters:

At the scheme meeting:

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To approve the scheme of arrangement substantially in the form attached as Annex A to the accompanying proxy statement (the “ Scheme of Arrangement ”), pursuant to which (i) all of the existing XL-Ireland ordinary shares (other than XL-Ireland ordinary shares held by XL Group Ltd (formerly known as Coral Reef Limited) (“ XL-Bermuda ”) and, if applicable, its nominees) will be cancelled, (ii) the reserves created on cancellation of the XL-Ireland ordinary shares will be used to issue XL-Ireland ordinary shares to XL-Bermuda and (iii) in return for such issuance of new XL-Ireland ordinary shares to XL-Bermuda, XL-Bermuda will issue common shares, par value $0.01 per share (the “ XL-Bermuda common shares ”) to the holders of XL-Ireland ordinary shares. Pursuant to the Scheme of Arrangement, each shareholder will receive one XL-Bermuda common share for each XL-Ireland ordinary share owned by such shareholder.

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We refer to this proposal (Proposal Number One) as the “ Scheme of Arrangement Proposal .”

At the extraordinary general meeting, if the Scheme of Arrangement Proposal is approved:

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To approve the Scheme of Arrangement by and on behalf of XL-Ireland.

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We refer to this proposal (Proposal Number Two) as the “ EGM Scheme of Arrangement Proposal .”

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To approve a reduction of capital of XL-Ireland under Sections 84 and 85 of the Irish Companies Act 2014 in order to effect the cancellation of XL-Ireland ordinary shares contemplated by the Scheme of Arrangement.

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We refer to this proposal (Proposal Number Three) as the “ Capital Reduction Proposal .”

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To approve the terms of the acquisition of XL-Ireland ordinary shares by XL-Bermuda, as a subsidiary of XL-Ireland prior to the Scheme of Arrangement, in connection with the Scheme of Arrangement.

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We refer to this proposal (Proposal Number Four) as the “ Subsidiary Share Acquisition Proposal .”

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To approve the authorization of the directors of XL-Ireland to allot XL-Ireland ordinary shares to XL-Bermuda up to an amount equal to the nominal value of the XL-Ireland ordinary shares cancelled in connection with the Scheme of Arrangement.

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We refer to this proposal (Proposal Number Five) as the “ Directors’ Allotment Authority Proposal .”

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To approve the application by XL-Ireland of a reserve credit, arising on its books of account as a result of the cancellation of XL-Ireland ordinary shares in connection with the Scheme of Arrangement, to pay up in full at par the XL-Ireland ordinary shares allotted to XL-Bermuda in connection with the Scheme of Arrangement.

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We refer to this proposal (Proposal Number Six) as the “ Ireland Reserve Application Proposal .”

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To approve an amendment to the memorandum of association of XL-Ireland to grant XL-Ireland a new object enabling it to enter into the Scheme of Arrangement.

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We refer to this proposal (Proposal Number Seven) as the “ Ireland Memorandum Amendment Proposal .”

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To approve an amendment to the articles of association of XL-Ireland to (1) provide that the allotment or issue of all ordinary shares in XL-Ireland on or after such amendment and before 5:00 p.m. (Eastern Time) and 10:00 p.m. (Irish time) (the “ Close of Business ”) on the day before the hearing at which the scheme of arrangement is sanctioned (the “ Cancellation Record Time ”) will be allotted and issued subject to the Scheme of Arrangement; (2) allow XL-Bermuda to transfer to itself, or to any person on its behalf, any XL-Ireland ordinary shares allotted or issued to any person on or after the Cancellation Record Time, or otherwise issued after the amendment to the articles of association of XL-Ireland that are not subject to the scheme of arrangement; (3) allow XL-Ireland to appoint an attorney to enter into any transfers required in respect of the transfer referred to at (2) above and XL-Bermuda to appoint an attorney to exercise rights attached to those shares; and (4) disapply rights of pre-emption to XL-Ireland ordinary shares allotted and issued pursuant to the Scheme of Arrangement.

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We refer to this proposal (Proposal Number Eight) as the “ Ireland Articles Amendment Proposal .”

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To approve, as a prospective shareholder of XL-Bermuda, a bye-law of XL-Bermuda that will require that any amendment to the bye-laws of XL-Bermuda must be approved by (1) 75% of the votes cast by shareholders of XL-Bermuda present or represented by proxy and voting at a general meeting or (2) if the Board of Directors of XL-Bermuda has unanimously approved the proposed amendment, a majority of votes cast by shareholders of XL-Bermuda present or represented by proxy and voting at such general meeting.

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We refer to this proposal (Proposal Number Nine) as the “ Bermuda Bye-Law Amendment Threshold Proposal .”

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To approve, as a prospective shareholder of XL-Bermuda, a bye-law of XL-Bermuda that will require that any merger or amalgamation involving XL-Bermuda must be approved by (1) 75% of the votes cast by shareholders of XL-Bermuda present or represented by proxy and voting at a general meeting or (2) if the Board of Directors of XL-Bermuda has unanimously approved the merger or amalgamation, a majority of votes cast by shareholders of XL-Bermuda present or represented by proxy and voting at such general meeting.

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We refer to this proposal (Proposal Number Ten) as the “ Bermuda Merger and Amalgamation Threshold Proposal .”

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To approve, as a prospective shareholder of XL-Bermuda, a bye-law of XL-Bermuda that will provide XL-Bermuda the option to purchase for fair market value all or part of the shares held by a XL-Bermuda shareholder if the Board of Directors in its sole discretion determines that ownership of shares of XL-Bermuda by any shareholders may result in adverse tax, regulatory or legal consequences to XL-Bermuda or its subsidiaries or any other shareholder to the extent the Board of Directors, in the reasonable exercise of its discretion, determines it is necessary to avoid or cure such adverse consequences.

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We refer to this proposal (Proposal Number Eleven) as the “ Bermuda Repurchase Right Proposal .”

At both shareholder meetings:

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To approve motions to adjourn each meeting to a later date to solicit additional proxies, at the discretion of the chairman of the meeting, if there are insufficient proxies to approve the meeting proposals at the time of each applicable shareholder meeting.

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We refer to such proposals as the “ Adjournment Proposals .”

The proposals contemplated by this proxy statement, including the Scheme of Arrangement Proposal, the EGM Scheme of Arrangement Proposal, the Capital Reduction Proposal, the Subsidiary Share Acquisition Proposal, the Director’s Allotment Authority Proposal, the Ireland Reserve Application

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Proposal, the Ireland Memorandum Amendment Proposal, the Ireland Articles Amendment Proposal, the Bermuda Bye-Law Amendment Threshold Proposal, the Bermuda Merger and Amalgamation Threshold Proposal, the Bermuda Repurchase Right Proposal and the Adjournment Proposals, are sometimes referred to herein as the “ meeting proposals .”

The transactions contemplated by the Scheme of Arrangement, including the Scheme of Arrangement Proposal, the EGM Scheme of Arrangement Proposal, the Capital Reduction Proposal, the Directors’ Allotment Authority Proposal, the Ireland Reserve Application Proposal, the Ireland Memorandum Amendment Proposal and the Ireland Articles Amendment Proposal and, if approved, the Subsidiary Share Acquisition Proposal, are sometimes referred to herein as the “ Transaction .”

Approval of each of the Scheme of Arrangement Proposal, the EGM Scheme of Arrangement Proposal, the Capital Reduction Proposal, the Directors’ Allotment Authority Proposal, the Ireland Reserve Application Proposal, the Ireland Memorandum Amendment Proposal and the Ireland Articles Amendment Proposal by our shareholders is a condition to the Scheme of Arrangement becoming effective.

The formal notices of the scheme meeting and the extraordinary general meeting are provided as attachments to the accompanying proxy statement as Annexes E and F, respectively, and should be read closely. This summary does not constitute the formal notice in respect of either of those meetings.

If any other matters properly come before either of the shareholder meetings or any adjournments of either of such shareholder meetings, the persons named in the proxy card will have the authority to vote the XL-Ireland ordinary shares represented by all properly executed proxies in their discretion. Our Board of Directors currently does not know of any matters to be raised at the shareholder meetings other than the meeting proposals contained in this proxy statement and procedural matters.

Our Board of Directors has set May 10, 2016 as the record date for the scheme meeting and for the extraordinary general meeting. This means that only those persons who were holders of XL-Ireland ordinary shares at 5:00 p.m. (Eastern Time) and 10:00 p.m. (Irish time) (the “ Close of Business ”) on the record date will be entitled to vote at the shareholder meetings and any adjournments thereof. As of the record date, 283,368,533 XL-Ireland ordinary shares were issued and outstanding. If you are a shareholder of XL-Ireland who is not a holder as of the Close of Business on the record date, you will not have the right to vote at the scheme meeting or the extraordinary general meeting.

The scheme meeting is being convened in accordance with an order of the High Court of Ireland (the “ Irish High Court ”) made on May 9, 2016. If the XL-Ireland shareholders approve each of the Scheme of Arrangement Proposal, the EGM Scheme of Arrangement Proposal, the Capital Reduction Proposal, the Directors’ Allotment Authority Proposal, the Ireland Reserve Application Proposal, the Ireland Memorandum Amendment Proposal and the Ireland Articles Amendment Proposal, and the other conditions to the Scheme of Arrangement have been satisfied or waived (and we do not abandon the Scheme of Arrangement), we will proceed to seek the sanction of the Irish High Court in respect of the Scheme of Arrangement and the Capital Reduction Proposal. Our Irish counsel has advised us that the Irish High Court is unlikely to sanction the Scheme of Arrangement until all conditions to the Transaction have been satisfied or waived and any other Irish or foreign regulatory requirements or approvals have been satisfied or obtained. Sanction of the Irish High Court must be obtained as a condition to the Scheme of Arrangement becoming effective.

We expect the hearing before the Irish High Court regarding sanction of the Scheme of Arrangement to be scheduled for July 20, 2016. If you are an XL-Ireland shareholder who wishes to appear in person or be represented by counsel at the Irish High Court hearing in order to present evidence or arguments in support of or opposition to the Scheme of Arrangement, you may do so by giving proper written notice to A&L Goodbody Solicitors, North Wall Quay, IFSC, Dublin 1, as Irish legal advisers to XL-Ireland, no later than 12:00 p.m. (Eastern Time) and 5:00 p.m. (Irish time) on July 5, 2016. XL-Ireland will not object to the participation in the Irish High Court hearing by any person who holds XL-Ireland ordinary shares through a broker or nominee or any other person with a legitimate interest in the proceedings and all such persons will have a right to participate.

The accompanying proxy statement and proxy cards (one gold for the scheme meeting, and one white for the extraordinary general meeting) are first being sent to XL-Ireland shareholders on or about May 11, 2016 and contain additional information on how to attend the shareholder meetings and vote any XL-Ireland ordinary shares you own in person at the shareholder meetings.

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Proof of ownership of XL-Ireland ordinary shares as of the Close of Business on the record date, as well as a form of personal photo identification, must be presented to be admitted to the shareholder meetings.

If you hold your XL-Ireland ordinary shares in the name of a bank, broker, trustee, custodian or other nominee (which we generally refer to as “brokers” or “nominees”), or if you are a holder of domestic depositary interests representing XL-Ireland ordinary shares (“DDIs”) held through Computershare Investor Services PLC (“Computershare UK”), and you plan to attend the shareholder meetings, you must present proof of your ownership of those shares or DDIs as of the Close of Business on the record date, such as a bank or brokerage account statement or letter from your broker, nominee or Computershare UK, together with a form of personal photo identification, to be admitted to the shareholder meetings. In addition, you may not vote your XL-Ireland ordinary shares in person at the shareholder meetings unless you obtain an “instrument of proxy” from Computershare UK (if you hold DDIs directly) or the broker or nominee that holds your XL-Ireland ordinary shares or DDIs. You will need to follow the instructions of your broker, nominee or Computershare UK in order to obtain such an “instrument of proxy”.

YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU EXPECT TO ATTEND THE SHAREHOLDER MEETINGS, PLEASE TAKE THE NECESSARY STEPS TO VOTE AT THE MEETING.

IF YOU ARE A REGISTERED SHAREHOLDER, YOU SHOULD MARK, DATE, SIGN AND RETURN THE ACCOMPANYING PROXY CARDS (ONE GOLD FOR THE SCHEME MEETING, AND ONE WHITE FOR THE EXTRAORDINARY GENERAL MEETING) IN THE ENCLOSED, POSTAGE-PAID ENVELOPE AS PROMPTLY AS POSSIBLE, OR APPOINT A PROXY TO VOTE YOUR XL-IRELAND ORDINARY SHARES BY USING THE INTERNET.

IF YOU HOLD YOUR XL-IRELAND ORDINARY SHARES IN “STREET NAME” THROUGH A BROKER OR NOMINEE, PLEASE FOLLOW THE VOTING INSTRUCTIONS PROVIDED TO YOU BY YOUR BROKER OR NOMINEE.

IF YOU ARE A HOLDER OF DDIs, YOU SHOULD FOLLOW THE INSTRUCTIONS YOU RECEIVE FROM COMPUTERSHARE UK (IF YOU HOLD DDIs DIRECTLY) OR THROUGH YOUR BROKER OR NOMINEE.

PLEASE NOTE THAT HOLDERS OF XL-IRELAND ORDINARY SHARES THROUGH A BROKER OR NOMINEE AND HOLDERS OF DDIs MAY BE REQUIRED TO SUBMIT VOTING INSTRUCTIONS TO THEIR BROKER, NOMINEE OR COMPUTERSHARE UK (FOR DIRECT HOLDERS OF DDIS), AS APPLICABLE, AT OR PRIOR TO THE DEADLINE APPLICABLE TO REGISTERED HOLDERS OF XL-IRELAND ORDINARY SHARES AND SUCH HOLDERS SHOULD THEREFORE FOLLOW THE SEPARATE INSTRUCTIONS THAT WILL BE PROVIDED BY THEIR BROKER, NOMINEE OR COMPUTERSHARE UK, AS APPLICABLE.

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The accompanying proxy statement incorporates documents by reference. Please see “Where You Can Find More Information” beginning on page 141 of the accompanying proxy statement for a listing of documents incorporated by reference. These documents are available to any person upon request by contacting us at:

XL Group
Investor Relations
100 Washington Boulevard
6 th Floor
Stamford, CT 06902
Telephone: (203) 964-3470
Fax: (203) 964-3444
Email: investorinfo@xlgroup.com

To ensure timely delivery of these documents, any request should be made no later than June 17, 2016. The exhibits to these documents will generally not be made available unless such exhibits are specifically incorporated by reference in the accompanying proxy statement.

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XL GROUP PLC

In addition, if you wish to attend the special meetings in person and you either hold your XL-Ireland ordinary shares in “street name” beneficially though a broker or nominee, or are a holder of DDIs, you must present proof of your ownership of those shares or DDIs as of the Close of Business on the record date, such as a bank or brokerage account statement or letter from your broker, nominee or Computershare UK, together with a form of personal photo identification, to be admitted to the shareholder meetings. In addition, you may not vote your XL-Ireland ordinary shares in person at the shareholder meetings unless you obtain an “instrument of proxy” from Computershare UK (if you hold DDIs directly) or the broker or nominee that holds your XL-Ireland ordinary shares or DDIs. You will need to follow the instructions of your broker, nominee or Computershare UK in order to obtain such an “instrument of proxy”.

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STRUCTURE OF THE TRANSACTION

In Proposal Number One (the “ Scheme of Arrangement Proposal ”), we are seeking your approval at the scheme meeting with respect to a scheme of arrangement under Sections 449 to 455 of the Irish Companies Act 2014, substantially in the form attached as Annex A to this proxy statement (the “ Scheme of Arrangement ”), that, once it becomes effective, will result in you owning common shares, par value $0.01 per share (“ XL-Bermuda common shares ”) of XL Group Ltd (formerly known as Coral Reef Limited), a Bermuda exempted company (“ XL-Bermuda ”), instead of XL-Ireland ordinary shares.

In Proposal Number Two (the “ EGM Scheme of Arrangement Proposal ”), we are seeking your approval at the extraordinary general meeting with respect to the Scheme of Arrangement by and on behalf of XL-Ireland. This second approval at the extraordinary general meeting is being sought to fulfill a requirement of Irish law.

In Proposal Number Three (the “ Capital Reduction Proposal ”), we are seeking your approval at the extraordinary general meeting of a capital reduction under Sections 84 and 85 of the Irish Companies Act 2014 in order to effect the cancellation of XL-Ireland ordinary shares contemplated by the Scheme of Arrangement.

In Proposal Number Four (the “ Subsidiary Share Acquisition Proposal ”), we are seeking your approval at the extraordinary general meeting of the terms of the acquisition of XL-Ireland ordinary shares by XL-Bermuda, as a subsidiary of XL-Ireland prior to the Scheme of Arrangement, in connection with the Scheme of Arrangement.

In Proposal Number Five (the “ Directors’ Allotment Authority Proposal ”), we are seeking your approval at the extraordinary general meeting of the authorization of the directors of XL-Ireland to allot XL-Ireland ordinary shares to XL-Bermuda up to an amount equal to the nominal value of the XL-Ireland ordinary shares cancelled in connection with the Scheme of Arrangement.

In Proposal Number Six (the “ Ireland Reserve Application Proposal ”), we are seeking your approval at the extraordinary general meeting of the application by XL-Ireland of a reserve credit, arising on its books of account as a result of the cancellation of XL-Ireland ordinary shares in connection with the Scheme of Arrangement, to pay up in full at par the XL-Ireland ordinary shares allotted to XL-Bermuda in connection with the Scheme of Arrangement.

In Proposal Number Seven (the “ Ireland Articles Amendment Proposal ”), we are seeking your approval at the extraordinary general meeting of the application by XL-Ireland of an amendment to the articles of association of XL-Ireland to (1) provide that the allotment or issue of all ordinary shares in XL-Ireland on or after the amendment to the articles of association and before 5:00 p.m. (Eastern Time) and 10:00 p.m. (Irish time) on the day before the hearing at which the Scheme of Arrangement is sanctioned (the “ Cancellation Record Time ”) will be subject to the Scheme of Arrangement; (2) allow XL-Bermuda to transfer to itself, or to any person on its behalf, any ordinary shares allotted or issued to any person in XL-Ireland on or after the Cancellation Record Time, or otherwise issued after the amendment to the articles of association of XL-Ireland that are not subject to the Scheme of Arrangement; (3) allow XL-Ireland to appoint an attorney to enter into any transfers required in respect of the transfer referred to at (2) above and XL-Bermuda to appoint an attorney to exercise rights attached to those shares; and (4) disapply rights of pre-emption to ordinary shares in XL-Ireland allotted or issued pursuant to the Scheme of Arrangement.

In Proposal Number Eight (the “ Ireland Memorandum Amendment Proposal ”), we are seeking your approval at the extraordinary general meeting of the application by XL-Ireland of an amendment to the memorandum of association of XL-Ireland to grant XL-Ireland a new object enabling it to enter into the Scheme of Arrangement.

Prior to the Scheme of Arrangement, XL-Bermuda, as a subsidiary of XL-Ireland, will acquire shares of XL-Ireland. If the Scheme of Arrangement becomes effective, (i) XL-Ireland’s share in XL-Bermuda will be cancelled, (ii) all of the existing XL-Ireland ordinary shares will be cancelled, other than the XL-Ireland ordinary shares held by XL-Bermuda and, if applicable, its nominees, (iii) XL-Ireland will issue XL-Ireland ordinary shares to XL-Bermuda equal to the number of XL-Ireland ordinary shares cancelled pursuant to (ii) above using the reserve created by the cancellation of the XL-Ireland ordinary shares, and (iv) in return

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for such issuance of XL-Ireland ordinary shares to XL-Bermuda, XL-Bermuda will issue XL-Bermuda common shares to existing XL-Ireland shareholders whose XL-Ireland ordinary shares were cancelled pursuant to (ii) above. As a result of the Scheme of Arrangement, each shareholder of XL-Ireland will receive one XL-Bermuda common share for each XL-Ireland ordinary share owned by such shareholder, except XL-Bermuda and, if applicable, its nominees who will retain their XL-Ireland ordinary shares held prior to the effectiveness of the Scheme of Arrangement.

There are several steps required in order for us to effect the Scheme of Arrangement, including holding the scheme meeting. The scheme meeting is being convened in accordance with an order of the High Court of Ireland (the “ Irish High Court ”) made on May 9, 2016. We will hold the scheme meeting to approve the Scheme of Arrangement on June 23, 2016. If each of the Scheme of Arrangement Proposal, the EGM Scheme of Arrangement Proposal, the Capital Reduction Proposal, the Directors’ Allotment Authority Proposal, the Ireland Reserve Application Proposal, the Ireland Memorandum Amendment Proposal and the Ireland Articles Amendment Proposal are approved by the shareholders and the other conditions to the Scheme of Arrangement having been satisfied or waived (and we do not abandon the Scheme of Arrangement), we will seek the Irish High Court’s sanction of the Scheme of Arrangement and the Capital Reduction Proposal.

If we obtain the requisite approvals from our shareholders and the Irish High Court and if all of the other conditions to the Scheme of Arrangement are satisfied or, if allowed by law, waived, we intend to file the court order authorizing the Scheme of Arrangement with the Irish Companies Registration Office within 21 days. Registration of that order by the Registrar of Companies will cause the Scheme of Arrangement to become effective before the opening of trading of the XL-Ireland ordinary shares on the New York Stock Exchange, Inc. (the “ NYSE ”) on the date of such registration (the “ Effective Time ”). The Effective Time will depend on factors such as any postponement or adjournment of the Sanction Hearing.

At the Effective Time, the following steps will occur effectively simultaneously in the following order:

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XL-Ireland’s share in XL-Bermuda will be cancelled;

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2.

all of the existing XL-Ireland ordinary shares will be cancelled, other than the XL-Ireland ordinary shares held by XL-Bermuda and, if applicable, its nominees;

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XL-Ireland will issue XL-Ireland ordinary shares to XL-Bermuda equal to the number of XL-Ireland ordinary shares cancelled pursuant to step 2 above using the reserve created by the cancellation of the XL-Ireland ordinary shares; and

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in return for such issuance of XL-Ireland ordinary shares to XL-Bermuda, XL-Bermuda will issue XL-Bermuda common shares to existing XL-Ireland shareholders whose shares were cancelled pursuant to step 2 above.

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As a result of the Scheme of Arrangement, the holders of XL-Ireland ordinary shares will become holders of XL-Bermuda common shares and XL-Bermuda and, if applicable, its nominees will own all of the outstanding XL-Ireland ordinary shares. The members of the Board of Directors of XL-Ireland then in office will become the members of the Board of Directors of XL-Bermuda at the Effective Time.

After the Effective Time, you will continue to own an interest in the ultimate parent holding company of the XL group of companies, which will conduct the same business operations through its subsidiaries as conducted by XL-Ireland through its subsidiaries before the Effective Time. The number of XL-Bermuda common shares you will own will be the same as the number of XL-Ireland ordinary shares you owned prior to the Effective Time, and your relative ownership interest in XL will remain unchanged (except that XL-Bermuda will not have issued XL-Bermuda common shares to itself or its nominees in respect of XL-Ireland ordinary shares not canceled in the Scheme of Arrangement).

At the Close of Business on the record date, 283,368,533 XL-Ireland ordinary shares were issued and outstanding.

The transactions contemplated by the Scheme of Arrangement, including the Scheme of Arrangement Proposal, the EGM Scheme of Arrangement Proposal, the Capital Reduction Proposal, the Directors’ Allotment Authority Proposal, the Ireland Reserve Application Proposal, the Ireland Memorandum Amendment Proposal and the Ireland Articles Amendment Proposal and, if approved, the Subsidiary Share Acquisition Proposal, are sometimes referred to herein as the “ Transaction .”

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If, and only if, the Transaction is consummated, XL-Ireland will be liquidated and following the effectiveness of such liquidation, XL-Ireland’s direct, wholly owned subsidiary, XLIT Ltd., will become a direct, wholly owned subsidiary of XL-Bermuda. If the Transaction is consummated, the liquidation of XL-Ireland is expected to occur in late 2016 or early 2017.

The following diagram depicts our organizational structure immediately before and after the Transaction and the liquidation of XL-Ireland. The diagram does not depict any subsidiaries of XL-Ireland other than XL-Bermuda prior to the Effective Time and XLIT Ltd.

We use the terms “ XL ,” “ we ,” “ our company ,” “ our ” and “ us ” in this proxy statement to refer to XL Group plc and its subsidiaries prior to the Scheme of Arrangement and to refer to XL Group Ltd and its subsidiaries after the Scheme of Arrangement. The term “shareholder” where used in the proxy statement shall refer to a holder of XL-Ireland ordinary shares or of XL-Bermuda common shares, as applicable.

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QUESTIONS AND ANSWERS ABOUT THE TRANSACTION AND THE OTHER PROPOSALS

1.    Q:

What am I being asked to vote on at the shareholder meetings?

​

A:

Shareholders are being asked to vote on the following matters:

​

At the scheme meeting:

•

To approve the Scheme of Arrangement, pursuant to which: (i) XL-Ireland’s share in XL-Bermuda will be cancelled; (ii) all of the existing XL-Ireland ordinary shares will be cancelled, other than the XL-Ireland ordinary shares held by XL-Bermuda and, if applicable, its nominees; (iii) XL-Ireland will issue XL-Ireland ordinary shares to XL-Bermuda equal to the number of XL-Ireland ordinary shares cancelled pursuant to (ii) above using the reserve created by the cancellation of the XL-Ireland ordinary shares; and (iv) in return for such issuance of XL-Ireland ordinary shares to XL-Bermuda, XL-Bermuda will issue XL-Bermuda common shares to existing XL-Ireland shareholders whose shares were cancelled pursuant to (ii) above. As a result of the Scheme of Arrangement, each shareholder of XL-Ireland will receive one XL-Bermuda common share for each XL-Ireland ordinary share owned by such shareholder, except XL-Bermuda and, if applicable, its nominees will retain their initial shares in XL-Ireland.

​

At the extraordinary general meeting:

•

If the Scheme of Arrangement Proposal is approved, to approve the Scheme of Arrangement by and on behalf of XL-Ireland.

​

•

If the Scheme of Arrangement Proposal is approved, to approve a reduction of capital of XL-Ireland under Sections 84 and 85 of the Irish Companies Act 2014 in order to effect the cancellation of XL-Ireland ordinary shares contemplated by the Scheme of Arrangement.

​

•

If the Scheme of Arrangement Proposal is approved, to approve the terms of the acquisition of XL-Ireland ordinary shares by XL-Bermuda, as a subsidiary of XL-Ireland prior to the Scheme of Arrangement, in connection with the Scheme of Arrangement, which are set forth in Exhibit G of this proxy statement.

​

•

If the Scheme of Arrangement Proposal is approved, to approve the authorization of the directors of XL-Ireland to allot ordinary shares in XL-Ireland to XL-Bermuda up to an amount equal to the nominal value of the ordinary shares cancelled in connection with the Scheme of Arrangement.

​

•

If the Scheme of Arrangement Proposal is approved, to approve the application by XL-Ireland of a reserve credit, arising on its books of account as a result of the cancellation of ordinary shares in connection with the Scheme of Arrangement, to pay up in full at par the ordinary shares allotted to XL-Bermuda in connection with the Scheme of Arrangement.

​

•

If the Scheme of Arrangement Proposal is approved, to approve an amendment to the memorandum of association of XL-Ireland to grant XL-Ireland a new object enabling it to enter into the Scheme of Arrangement.

​

•

If the Scheme of Arrangement Proposal is approved, to approve an amendment to the articles of association of XL-Ireland to (1) provide that the allotment or issue of all ordinary shares in XL-Ireland on or after the amendment to the articles of association and before 5:00 p.m. (Eastern Time) and 10:00 p.m. (Irish time) (the “ Close of Business ”) on the day before the hearing at which the scheme of arrangement is sanctioned (the “ Cancellation Record Time ”) will be subject to the Scheme of Arrangement; (2) allow XL-Bermuda to transfer to itself, or to any person on its behalf, any XL-Ireland ordinary shares allotted or issued to any person on or after the Cancellation Record Time, or otherwise issued after the amendment to the articles of association of XL-Ireland that are not subject to the scheme of arrangement; (3) allow XL-Ireland to appoint an attorney to enter into any transfers required

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in respect of the transfer referred to at (2) above and XL-Bermuda to appoint an attorney to exercise rights attached to those shares; and (4) disapply rights of pre-emption to XL-Ireland ordinary shares allotted and issued pursuant to the Scheme of Arrangement.

•

If the Scheme of Arrangement Proposal is approved, to approve, as a prospective shareholder of XL-Bermuda, a bye-law of XL-Bermuda that will require that any amendment to the bye-laws of XL-Bermuda must be approved by (1) 75% of the votes cast by shareholders of XL-Bermuda present or represented by proxy and voting at a general meeting or (2) if the Board of Directors of XL-Bermuda has unanimously approved the proposed amendment, a majority of votes cast by shareholders of XL-Bermuda present or represented by proxy and voting at such general meeting.

​

•

If the Scheme of Arrangement Proposal is approved, to approve, as a prospective shareholder of XL-Bermuda, a bye-law of XL-Bermuda that will require that any merger or amalgamation involving XL-Bermuda must be approved by (1) 75% of the votes cast by shareholders of XL-Bermuda present or represented by proxy and voting at a general meeting or (2) if the Board of Directors of XL-Bermuda has unanimously approved the proposed merger or amalgamation, a majority of votes cast by shareholders of XL-Bermuda present or represented by proxy and voting at such general meeting.

​

•

If the Scheme of Arrangement Proposal is approved, to approve, as a prospective shareholder of XL-Bermuda, a bye-law of XL-Bermuda that will provide XL-Bermuda the option to purchase for fair market value all or part of the shares held by a XL-Bermuda shareholder if the Board of Directors in its sole discretion determines that ownership of shares of XL-Bermuda by any shareholders may result in adverse tax, regulatory or legal consequences to XL-Bermuda or its subsidiaries or any other shareholder to the extent the Board of Directors, in the reasonable exercise of its discretion, determines it is necessary to avoid or cure such adverse consequences.

​

At both of the shareholder meetings:

•

To approve motions to adjourn each meeting to a later date to solicit additional proxies, at the discretion of the chairman of the meeting, if there are insufficient proxies to approve the meeting proposals at the time of each applicable shareholder meeting.

​

We refer to such proposals as the “ Adjournment Proposals .” The proposals contemplated by this proxy statement, including the Scheme of Arrangement Proposal, the EGM Scheme of Arrangement Proposal, the Capital Reduction Proposal, the Subsidiary Share Acquisition Proposal, the Directors’ Allotment Authority Proposal, the Ireland Reserve Application Proposal, the Ireland Memorandum Amendment Proposal, the Ireland Articles Amendment Proposal, the Bermuda Bye-Law Amendment Threshold Proposal, the Bermuda Merger and Amalgamation Threshold Proposal, the Bermuda Repurchase Right Proposal and the Adjournment Proposals, are sometimes referred to herein as the “ meeting proposals .”

Please see “Proposal Number One: The Scheme of Arrangement Proposal,” “Proposal Number Two: The EGM Scheme of Arrangement Proposal,” “Proposal Number Three: The Capital Reduction Proposal,” “Proposal Number Four: The Subsidiary Share Acquisition Proposal,” “Proposal Number Five: The Directors’ Allotment Authority Proposal,” “Proposal Number Six: The Ireland Reserve Application Proposal,” “Proposal Number Seven: The Ireland Memorandum Amendment Proposal,” “Proposal Number Eight: The Ireland Articles Amendment Proposal,” “Proposal Number Nine: The Bermuda Bye-Law Amendment Threshold Proposal,” “Proposal Number Ten: The Bermuda Merger and Amalgamation Threshold Proposal” and “Proposal Number Eleven: The Bermuda Repurchase Right Proposal.”

2.    Q:

Why is XL proposing the Scheme of Arrangement and related transactions?

​

A:

As a result of developments since 2010, including XL’s acquisition of Catlin Group Limited (“ Catlin ”) in 2015 and the determination of Bermuda’s full equivalence with Solvency II, the Board determined that changing the jurisdiction of incorporation of the XL group of companies’

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parent holding company to Bermuda would be in the interests of XL-Ireland and its shareholders for, among others, the following reasons:

•

XL-Ireland engaged in numerous discussions with the Central Bank of Ireland (“ CBI ”) regarding group supervision following which XL-Ireland and the CBI concluded that the Bermuda Monetary Authority (“ BMA ”) would be best situated to serve as the XL group of companies’ group wide supervisor and be in a position to approve the XL group of companies’ internal capital model. This determination was buttressed by (i) the BMA’s extensive knowledge of both the XL group of companies and Catlin, (ii) the significance of operations, concentration of risk and balance sheet that the XL group of companies (including the former Catlin companies) have in Bermuda, (iii) the work that the BMA has performed on the group internal capital models for both the XL group of companies and Catlin, (iv) the experience and resources of the BMA to regulate international property and casualty (“ P&C ”) (re)insurance companies and (v) the following specific considerations:

​

◦

The XL group of companies has operated in Bermuda since 1986 and the XL group of companies’ largest concentration of risk and its largest operating balance sheet is in Bermuda. XL Insurance (Bermuda) Ltd (“ XLIB ”), which is the XL group of companies’ largest operating company and holds all of the XL group of companies’ other operating subsidiaries, is domiciled in Bermuda and is regulated for solvency and other purposes by the BMA;

​

◦

The acquisition of Catlin has resulted in a significantly greater presence of our operations in Bermuda;

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◦

The November 26, 2015 determination by the European Union’s Commission (the “ European Commission ”) of full Solvency II equivalence for Bermuda provided the potential for the BMA to be recognized as group wide supervisor for the XL group of companies under Solvency II; and

​

◦

The acquisition of Catlin required that XL-Ireland integrate and conform policies and model approaches before implementing and seeking approval of a group internal capital model. As Catlin’s group supervisor, the BMA had performed substantial work on Catlin group’s internal capital model prior to its acquisition by XL-Ireland. The BMA, as the regulator of XLIB, also performed substantial work in coordination with the CBI on the XL group of companies’ group internal capital model prior to the acquisition of Catlin and has indicated its readiness to work with the XL group of companies to finalize and approve a group internal capital model. These factors contributed to the Board’s belief that the BMA would be well positioned to facilitate the most timely and efficient approval of a group internal capital model for the XL group of companies, a key goal for the XL group of companies;

​

•

The long-term stability of Bermuda’s legal and regulatory environment mirrors that of Ireland. Bermuda’s legal and regulatory history as a financial services and insurance and reinsurance hub is particularly strong. The European Commission’s determination of full Solvency II equivalence, including group supervision equivalence, for Bermuda strongly supports the Board’s determination that Bermuda is a respected member of the international (re)insurance and regulatory community;

​

•

Bermuda has continued to emerge as a premier regulator of global insurance and reinsurance companies. Bermuda’s market is one of the top three reinsurance markets in the world, and includes 15 of the top 40 reinsurers. Bermuda has also emerged as a significant hub for institutional investment in the insurance and reinsurance sector. In addition, Bermuda’s proximity to the United States and its significant transport links to the United States and London enhance operating efficiencies for the XL group of companies;

​

•

Bermuda, like Ireland, is a common law jurisdiction. In addition, both jurisdictions are subject to companies acts that have their source in English companies law. Therefore, despite certain differences between the two corporate legal systems, we believe that the rights of XL-Ireland shareholders and XL-Bermuda shareholders will be substantially similar; and

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•

Bermuda law, like Irish law, permits dividends to be paid in U.S. dollars and upon the approval of the Board without the need for shareholder approval.

​

Please see “Proposal Number One: The Scheme of Arrangement Proposal—Background and Reasons for the Transaction.”

3.    Q:

How does the Board of Directors recommend that I vote?

​

A:

Our Board of Directors unanimously recommends that our shareholders vote “FOR” each of the meeting proposals set forth in this proxy statement.

​

4.    Q:

Who can vote at the shareholder meetings?

​

A:

All persons who were registered holders of XL-Ireland ordinary shares at the Close of Business on May 10, 2016, the record date for the shareholder meetings, are shareholders of record for the purposes of the shareholder meetings and will be entitled to attend and vote, in person or by proxy, at the shareholder meetings and any adjournments thereof. Each shareholder of record will be entitled to one vote per XL-Ireland ordinary share held by such shareholder at the shareholder meetings.

​

If you hold your XL-Ireland ordinary shares in “street name” beneficially though a broker or nominee, please follow the voting instruction form provided by your broker or nominee. If you are a holder of DDIs, the relevant voting instructions have been provided by Computershare UK (if you hold DDIs directly) or your broker or nominee to appoint or revoke a proxy with respect to the shareholder meetings. If you have any questions relating to voting, please contact Georgeson LLC at the numbers shown on page 15.

Please see “The Shareholder Meetings—Record Date; Voting Rights.”

5.    Q:

How do I vote if I am a registered shareholder?

​

A:

You may vote your XL-Ireland ordinary shares either by voting in person at the shareholder meetings or by submitting a completed proxy. We have enclosed two proxy cards (one gold proxy card for the scheme meeting, and one white proxy card for the extraordinary general meeting). By submitting your proxy, you are legally authorizing another person to vote your XL-Ireland ordinary shares by proxy in accordance with your instructions. You may appoint any person as your proxy and it is not a requirement that this person be a shareholder of XL-Ireland. The enclosed proxy card designates Michael McGavick or, failing him, Kirstin Gould to vote your XL-Ireland ordinary shares in accordance with the voting instructions you indicate in your proxy at each of the shareholder meetings. If you wish to appoint another person as your proxy, you can complete the details of your proxy in the table provided in the forms of proxy.

​

In addition, if any other matters (other than the meeting proposals contained in this proxy statement and procedural matters) properly come before either of the shareholder meetings or any adjournments of those meetings, the persons named in the proxy card will have the authority to vote your XL-Ireland ordinary shares on those matters in their discretion. The Board currently does not know of any matters to be raised at the shareholder meetings other than the meeting proposals contained in this proxy statement and procedural matters.

You may submit your proxy either by mail, courier or hand delivery, via the Internet (at http://www.envisionreports.com/XL-EGM). Please let us know whether you plan to attend each of the shareholder meetings by marking the appropriate box on your proxy card or by following the instructions provided when you submit your proxy via the Internet. For more details about Internet proxies, please see “The Shareholder Meetings—How You Can Vote.” In order for your proxy to be validly submitted and for your XL-Ireland ordinary shares to be voted in accordance with your instructions, we must receive your mailed, couriered or hand-delivered proxy prior to the start of the applicable shareholder meeting. If you submit a proxy via the Internet, then you may submit your voting instructions up until the Close of Business on June 21, 2016.

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If you do not wish to vote all of your XL-Ireland ordinary shares in the same manner on any particular proposal(s), you may specify your vote by clearly hand-marking the proxy card to indicate how you want to vote your XL-Ireland ordinary shares. You may not split your vote if you are voting via the Internet.

If you are a registered shareholder and if you do not provide instructions on your proxy cards that are validly submitted (or when giving your proxy via the Internet) how you want to vote your XL-Ireland ordinary shares, the proxy holders will vote your XL-Ireland ordinary shares “FOR” each of the meeting proposals set forth in this proxy statement.

Please see “The Shareholder Meetings—Proxies” and “The Shareholder Meetings—How You Can Vote.”

6.    Q:

How can I vote if I hold my shares in “street name”?

​

A:

Shareholders who hold their shares in “street name” beneficially though a broker or nominee must vote their XL-Ireland ordinary shares by following the procedures established by their broker or nominee. This applies to our employees who received, through our employee plans, XL-Ireland ordinary shares that are held in accounts with Merrill Lynch, Pierce, Fenner & Smith Incorporated and its affiliates (“ Merrill Lynch ”).

​

Under NYSE Rule 452, absent instructions, brokers and nominees who are members of the NYSE and who hold XL-Ireland ordinary shares on behalf of customers will not have the authority to vote on any of the matters to be considered at the shareholder meetings, other than the Adjournment Proposals. If you do not instruct your broker or nominee on how to vote your XL-Ireland ordinary shares prior to the shareholder meetings, your XL-Ireland ordinary shares will not be voted at the shareholder meetings and such XL-Ireland ordinary shares will not be considered when determining whether any applicable proposal has received the required approval. However, they will be counted as present by person or by proxy for purposes of the relevant quorum requirement.

If you hold XL-Ireland ordinary shares through a broker or nominee, we recommend that you contact your broker or nominee directly for more information on the procedures by which your XL-Ireland ordinary shares can be voted. Your broker or nominee will not be able to vote your XL-Ireland ordinary shares unless it receives appropriate instructions from you.

In addition, you may not vote your XL-Ireland ordinary shares in person at the shareholder meetings unless you obtain an “instrument of proxy” from Computershare UK (if you hold DDIs directly) or the broker or nominee that holds your XL-Ireland ordinary shares or DDIs. You will need to follow the instructions of your broker, nominee or Computershare UK in order to obtain such an “instrument of proxy”.

Please see “The Shareholder Meetings—How You Can Vote.” Please also see “The Shareholder Meetings—Votes of Shareholders Required for Approval” for further information on how shares held in the “street name” of a broker will be considered for purposes of the “majority in number” approval requirement.

7.    Q:

How can I vote if I hold DDIs?

​

A:

Holders of DDIs through Computershare UK must vote the XL-Ireland ordinary shares underlying such DDIs by following the procedures established by Computershare UK (if you hold DDIs directly) or those established by their broker or nominee.

​

If you do not instruct Computershare UK or, if appropriate, your broker or nominee on how to vote the XL-Ireland ordinary shares underlying your DDIs prior to the shareholder meetings, the XL-Ireland ordinary shares underlying your DDIs will not be voted at the shareholder meetings and such XL-Ireland ordinary shares will not be considered unless your broker or nominee possesses discretionary voting authority when determining whether any applicable proposal has received the required approval. However, they will be counted as present by person or by proxy for purposes of the relevant quorum requirement.

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If you hold DDIs, we recommend that you contact Computershare UK (if you hold DDIs directly) or your broker or nominee directly for more information on the procedures by which the XL-Ireland ordinary shares underlying your DDIs can be voted. Computershare UK, if appropriate, or your broker or nominee will not be able to vote such XL-Ireland ordinary shares unless it receives appropriate instructions from you.

In addition, you may not vote your XL-Ireland ordinary shares in person at the shareholder meetings unless you obtain an “instrument of proxy” from Computershare UK (if you hold DDIs directly) or the broker or nominee that holds your XL-Ireland ordinary shares or DDIs. You will need to follow the instructions of your broker, nominee or Computershare UK in order to obtain such an “instrument of proxy”.

Please see “The Shareholder Meetings—How You Can Vote.” Please also see “The Shareholder Meetings—Votes of Shareholders Required for Approval” for further information on how shares held in the “street name” of a broker will be considered for purposes of the “majority in number” approval requirement.

8.    Q:

What vote of XL-Ireland shareholders is required to approve the meeting proposals?

​

A:

The Scheme of Arrangement Proposal requires approval by the affirmative vote of  (i) a majority in number of the registered holders of XL-Ireland ordinary shares attending the scheme meeting, in person or by proxy and (ii) 75% or more of the XL-Ireland ordinary shares voted at the scheme meeting, in person or by proxy. Approval of the Scheme of Arrangement Proposal by our shareholders is a condition to the effectiveness of the Scheme of Arrangement.

​

The EGM Scheme of Arrangement Proposal requires the affirmative vote of not less than 75% of all XL-Ireland ordinary shares voted, at the extraordinary general meeting, in person or by proxy. Approval of the EGM Scheme of Arrangement Proposal by our shareholders is a condition to the effectiveness of the Scheme of Arrangement.

The Capital Reduction Proposal requires the affirmative vote of not less than 75% of all XL-Ireland ordinary shares voted, at the extraordinary general meeting, in person or by proxy. Approval of the Capital Reduction Proposal by our shareholders is a condition to the effectiveness of the Scheme of Arrangement.

The Subsidiary Share Acquisition Proposal requires the affirmative vote of not less than 75% of all XL-Ireland ordinary shares voted, at the extraordinary general meeting, in person or by proxy.

The Directors’ Allotment Authority Proposal requires the affirmative vote of more than 50% of all XL-Ireland ordinary shares voted at the extraordinary general meeting, in person or by proxy. Approval of the Directors’ Allotment Authority Proposal by our shareholders is a condition to the effectiveness of the Scheme of Arrangement.

The Ireland Reserve Application Proposal requires the affirmative vote of more than 50% of all XL-Ireland ordinary shares voted at the extraordinary general meeting, in person or by proxy. Approval of the Ireland Reserve Application Proposal by our shareholders is a condition to the effectiveness of the Scheme of Arrangement.

The Ireland Memorandum Amendment Proposal requires the affirmative vote of not less than 75% of all XL-Ireland ordinary shares voted at the extraordinary general meeting, in person or by proxy. Approval of the Ireland Memorandum Amendment Proposal by our shareholders is a condition to the effectiveness of the Scheme of Arrangement.

The Ireland Articles Amendment Proposal requires the affirmative vote of not less than 75% of all XL-Ireland ordinary shares voted at the extraordinary general meeting, in person or by proxy. Approval of the Ireland Articles Amendment Proposal by our shareholders is a condition to the effectiveness of the Scheme of Arrangement.

The Bermuda Bye-Law Amendment Threshold Proposal requires the affirmative vote of not less than 75% of all XL-Ireland ordinary shares voted, at the extraordinary general meeting, in person or by proxy.

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The Bermuda Merger and Amalgamation Threshold Proposal requires the affirmative vote of not less than 75% of all XL-Ireland ordinary shares voted, at the extraordinary general meeting, in person or by proxy.

The Bermuda Repurchase Right Proposal requires the affirmative vote of not less than 75% of all XL-Ireland ordinary shares voted, at the extraordinary general meeting, in person or by proxy.

The Adjournment Proposals require the affirmative vote of XL-Ireland’s ordinary shares representing more than 50% of all XL-Ireland ordinary shares voted, in person or by proxy, at the relevant meeting.

Please see “The Shareholder Meetings—Votes of Shareholders Required for Approval.”

9.    Q:

What quorum is required for action at the shareholder meetings?

​

A:

At the scheme meeting to approve the Scheme of Arrangement Proposal, at least two shareholders must be present, in person or by proxy, representing at least two-thirds of the XL-Ireland ordinary shares that carry the right to vote at the meeting in order for the meeting to proceed.

​

At the extraordinary general meeting, at least two shareholders must be present, in person or by proxy, representing at least two-thirds of the issued XL-Ireland ordinary shares that carry the right to vote at the meeting in order for the meeting to proceed with all resolutions considered.

An adjournment of either meeting can be approved by a quorum of at least two shareholders representing at least 50% of XL-Ireland ordinary shares that carry the right to vote at the meeting.

For purposes of determining a quorum, abstentions and broker non-votes present in person or by proxy are counted as represented.

Please see “The Shareholder Meetings—Quorum.”

10.  Q:

When do you expect the Transaction to be consummated?

​

A:

We currently expect to complete the Scheme of Arrangement, if approved and sanctioned, in the third quarter of 2016. The Transaction may be delayed or abandoned by our Board for any reason prior to obtaining the sanction of the Irish High Court, even if the Transaction has been approved by the requisite vote of the XL-Ireland shareholders.

​

The Board may determine to delay or abandon the Transaction for any reason.

Please see “Proposal Number One: The Scheme of Arrangement Proposal—Effective Time of the Transaction” and “Proposal Number One: The Scheme of Arrangement Proposal—Amendment, Termination or Delay.”

11.  Q:

If all required approvals are obtained and conditions are satisfied or waived, is the Transaction required to be consummated?

​

A:

The Transaction may be delayed or abandoned by our Board for any reason prior to obtaining the sanction of the Irish High Court, even if the Transaction has been approved by the requisite vote of the XL-Ireland shareholders. However, the Board will not have any statutory discretion under Irish law to refuse to consummate the Scheme of Arrangement if the Scheme of Arrangement has been sanctioned by the Irish Court.

​

Please see “Proposal Number One: The Scheme of Arrangement Proposal—Amendment, Termination or Delay.”

12.  Q:

Will the Transaction affect XL’s future operations?

​

A:

We believe that the Transaction and the contemplated liquidation of XL-Ireland will have no material impact on how we conduct our day-to-day operations.

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13.  Q:

Will the Transaction dilute my economic interest?

​

A:

No, your relative economic ownership in XL will not change as a result of the Transaction, other than be increased by a de minimis amount as the result of the fact that the XL-Ireland ordinary shares held by XL-Bermuda immediately prior to the effectiveness of the Scheme of Arrangement, will not be cancelled and XL-Bermuda will not reissue an equivalent number of XL-Bermuda common shares to itself.

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14.  Q:

How will the Transaction affect XL’s financial reporting and the information XL provides to its shareholders?

​

A:

Upon completion of the transaction, we will remain subject to the U.S. Securities and Exchange Commission (the “ SEC ”) reporting requirements, the mandates of the Sarbanes-Oxley Act of 2002 (“ Sarbanes-Oxley ”) and the applicable corporate governance rules of the NYSE, and we will continue to report our consolidated financial results in U.S. dollars and in accordance with U.S. generally accepted accounting principles (“ U.S. GAAP ”). We will continue to file reports on Forms 10-K, 10-Q and 8-K with the SEC, as we currently do. We will no longer be required to provide you with Irish Statutory Accounts prepared in accordance with Irish law, but we will be required to provide you certain financial information pursuant to Bermuda law.

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15.  Q:

How will XL-Bermuda common shares differ from XL-Ireland ordinary shares?

​

A:

XL-Bermuda common shares will be similar to your existing XL-Ireland ordinary shares. However, there are differences between what your rights as a shareholder will be under Bermuda law and what they currently are as a shareholder under Irish law. In addition, there are differences between the organizational documents of XL-Bermuda and XL-Ireland.

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We discuss these and other differences in detail under “Description of XL Group Ltd Share Capital” and “Comparison of Rights of Shareholders and Powers of the Board of Directors.” XL-Bermuda’s memorandum of association and bye-laws will be substantially in the forms attached to this proxy statement as Annexes B and C, respectively.

16.  Q:

What are the material tax consequences of the Transaction?

​

A:

The Transaction should not be a taxable transaction for XL-Ireland or XL-Bermuda for either Irish, Bermuda or U.S. federal income tax purposes. Further, under U.S. federal income tax law, holders of XL-Ireland ordinary shares generally should not recognize gain or loss in the Transaction.

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For Irish tax law purposes, holders of XL-Ireland ordinary shares who are neither resident nor ordinarily resident in Ireland and who do not have some connection with Ireland other than holding XL-Ireland ordinary shares should not be within the charge to Irish capital gains tax or corporation tax on chargeable gains on the cancellation of their XL-Ireland ordinary shares in connection with the Scheme of Arrangement.

For a discussion of certain material U.S. federal, Bermuda, Irish and United Kingdom tax consequences of the Transaction to XL’s shareholders and XL, please see “Summary—Proposal Number One: The Scheme of Arrangement Proposal—Tax Considerations of the Transaction” and “Material Tax Considerations Relating to the Transaction.”

17.  Q:

If the Scheme of Arrangement is approved and consummated, do I have to take any action to participate in the Scheme of Arrangement?

​

A:

You do not have to take any action if your XL-Ireland ordinary shares are held in book-entry form or by your broker. XL-Ireland ordinary shares so held will automatically be cancelled at the Effective Time and, as part of the Scheme of Arrangement, new XL-Bermuda common shares will be issued to you or your broker without any action on your part. Please see “Proposal Number One: The Scheme of Arrangement Proposal—Cancellation and Issuance of Shares.” If you hold your XL-Ireland ordinary shares in certificated form or if you hold DDIs, please see the following two questions.

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18.  Q:

What happens if I hold XL-Ireland ordinary shares in certificated form?

​

A:

If you hold your XL-Ireland ordinary shares in certificated form, and the Scheme of Arrangement is consummated, your XL-Ireland ordinary shares will automatically be cancelled at the Effective Time and cease to be valid and your ownership of XL-Bermuda common shares will be evidenced through an electronic book-entry in your name on XL-Bermuda’s shareholder records. Upon completion of the Transaction, our transfer agent will mail you a letter of transmittal for you to complete and return along with your old share certificates and, once returned and validated, will send to you a statement documenting your ownership of XL-Bermuda common shares in registered form. You should not return your XL-Ireland ordinary share certificates with the enclosed proxy cards.

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Please see “Proposal Number One: The Scheme of Arrangement Proposal—Cancellation and Issuance of Shares.” Please also see “Summary—Proposal Number One: The Scheme of Arrangement Proposal—Tax Considerations of the Transaction” and “Material Tax Considerations Relating to the Transaction—Bermuda Tax Considerations” for further information.

19.  Q:

What happens if I hold DDIs?

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A:

XL-Ireland and XL-Bermuda intend to take the necessary steps with Computershare UK to have outstanding DDIs in respect of XL-Ireland ordinary shares to be automatically cancelled and replaced at the Effective Time with depositary interests issued in respect of XL-Bermuda common shares. Computershare UK will contact holders of DDIs regarding these steps.

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20.  Q:

May I revoke my proxy?

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A:

Any proxy is revocable.

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If you hold your XL-Ireland ordinary shares in “street name” beneficially though a broker or nominee, please follow the voting instruction form provided by your broker or nominee. If you are a holder of DDIs, the relevant voting instructions have been provided by Computershare UK (if you hold DDIs directly) or your broker or nominee to appoint or revoke a proxy with respect to the shareholder meetings. If you have any questions relating to voting, please contact Georgeson LLC at the numbers shown on page 15.

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For registered holders of XL-Ireland ordinary shares:

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After you have submitted a proxy, you may revoke it by mail, courier, or hand delivery before the shareholder meetings by sending a written notice to our Secretary at XL House, 8 St. Stephen’s Green, Dublin 2, Ireland. Your written notice must be received prior to the start of the applicable shareholder meeting.

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If you wish to revoke your submitted proxy and submit new voting instructions by mail, courier or hand delivery, then you must sign, date and mail, courier or hand-deliver a proxy card with your new voting instructions for the shareholder meetings, which we must receive prior to the start of the applicable shareholder meeting.

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If you wish to revoke your submitted proxy and submit new voting instructions via the Internet, then you must submit such new voting instructions for the shareholder meetings via the Internet by the Close of Business on June 21, 2016.

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You also may revoke your proxy in person by completing a written ballot (but only if you are the registered owner of the XL-Ireland ordinary shares as of the record date or if you obtain a “form of proxy” from the registered owner of the XL-Ireland ordinary shares as of the record date) and vote your XL-Ireland ordinary shares at the shareholder meetings.

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•

Attending the shareholder meetings without taking one of the actions above will not revoke your proxy.

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If you hold your XL-Ireland ordinary shares in “street name” beneficially through a broker or nominee and want to change your vote, please follow the voting instruction form provided by your broker or nominee. If you are a holder of DDIs and want to change your vote, the relevant voting instructions have been provided by Computershare UK (if you hold DDIs directly) or your broker or nominee. If you have any questions relating to voting, please contact Georgeson LLC at the numbers shown on page 15.

Please see “The Shareholder Meetings—Revoking Your Proxy.”

21.  Q:

How do I attend the shareholder meetings?

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A:

All holders of XL-Ireland ordinary shares as of the Close of Business on the record date are invited to attend the scheme meeting at XL’s registered office, located at XL House, 8 St. Stephen’s Green, Dublin 2, Ireland, which will commence at 10:00 a.m., Irish time, on June 23, 2016. All holders of XL-Ireland ordinary shares as of the Close of Business on the record date are also invited to attend the extraordinary general meeting at XL’s registered office, which will commence at 10:15 a.m. Irish time, on June 23, 2016 (or as soon as possible thereafter as the scheme meeting concludes or is adjourned). Proof of ownership of XL-Ireland ordinary shares as of the Close of Business on the record date, as well as a form of personal photo identification, must be presented to be admitted to either of the shareholder meetings.

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If you are not a registered holder of XL-Ireland ordinary shares – in other words, if you hold XL-Ireland ordinary shares in “street name” through a broker or nominee or if you are a holder of DDIs – then your name will not appear in XL-Ireland’s register of shareholders. In such circumstances, XL-Ireland ordinary shares are held in your broker’s or nominees name or the name of the nominee through which your broker or nominee holds the shares, on your behalf, and your broker or nominee will be entitled to vote your XL-Ireland ordinary shares in accordance with your instructions. This also applies to our employees who received, through our employee plans, ordinary shares that are held in accounts with Merrill Lynch. In order for you to attend the shareholder meetings, you must present proof of your ownership of your shares or DDIs as of the Close of Business on the record date, such as a bank or brokerage account statement or letter from Computershare UK (if you hold DDIs directly) or your broker or nominee, together with a form of personal photo identification, to be admitted to the shareholder meetings. Note that if you own XL-Ireland ordinary shares other than as a registered owner on XL-Ireland’s shareholder register, even if you attend the shareholder meetings, you cannot vote the XL-Ireland ordinary shares that are held by your broker or nominee unless you obtain an “instrument of proxy” from Computershare UK (if you hold DDIs directly) or the broker or nominee that holds your XL-Ireland ordinary shares or DDIs. You will need to follow the procedures required by Computershare UK, if appropriate, or your broker or nominee in order to obtain such an “instrument of proxy.” You should contact your broker or nominee if you have any questions with respect to these procedures.

Please see “The Shareholder Meetings—How You Can Vote”.

22.  Q:

Whom should I call if I have questions about the shareholder meetings or the meeting proposals in this proxy statement?

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A:

You should contact our proxy solicitor:
Georgeson LLC
480 Washington Blvd., 26 th Floor
Jersey City, NJ 07310
Toll-free within the United States: (866) 482-4943
Toll-free within the United Kingdom: 0800-408-0091
Outside the United States or the United Kingdom: (781) 575-2137

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SELECTED HISTORICAL FINANCIAL AND OTHER DATA

The following table presents selected historical financial and other data for XL-Ireland. The income statement data for fiscal years 2015, 2014, 2013, 2012 and 2011 and the three months ended March 31, 2016 and 2015 and the balance sheet data as of December 31, 2015, 2014, 2013, 2012 and 2011 and as of March 31, 2016 and 2015 are derived from our consolidated financial statements. The selected historical financial and other data presented below should be read in conjunction with the financial statements and accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in XL-Ireland’s Annual Report on Form 10-K for the year ended December 31, 2015 and Quarterly Report on Form 10-Q for the three months ended March 31, 2016 and other financial information incorporated by reference in this proxy statement. Historical financial information may not be indicative of XL-Bermuda’s future performance.

We have included no data for XL-Bermuda because this entity was not an operating entity during any of the periods shown below.

(1)

Preference share dividends represent dividends on the Redeemable Series C preference ordinary shares issued by XLIT Ltd. (the “ Series C Preference Shares ”) and the Series D and E preference ordinary shares issued by XLIT Ltd. (the “ Series D and E Preference Shares ”). Following the 2010 redomestication from Cayman Islands to Ireland, subsequent to July 1, 2010, the Series C Preference Shares (which were redeemed in 2011) and the Series D and E Preference Shares represent non-controlling interests in XL-Ireland’s consolidated financial statements.

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UNAUDITED SUMMARY PRO FORMA FINANCIAL INFORMATION

Pro forma consolidated financial statements for XL-Bermuda are not presented in this proxy statement because no significant pro forma adjustments are required to be made to show the impact of the Transaction to the historical income statement of XL-Ireland for the year ended December 31, 2015 or the three months ended March 31, 2016 or the historical balance sheet as of December 31, 2015 or as of March 31, 2016. Those financial statements are included in XL-Ireland’s Annual Report on Form 10-K for the year ended December 31, 2015 and Quarterly Report on Form 10-Q for the three months ended March 31, 2016, respectively.

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RISK FACTORS

Before you decide how to vote your XL-Ireland ordinary shares, you should consider carefully the following risk factors related to the meeting proposals set forth in this proxy statement, in addition to the other information contained in this proxy statement and the documents incorporated by reference, including, without limitation, our Annual Report on Form 10-K for the year ended December 31, 2015, our Quarterly Report on Form 10-Q for the three months ended March 31, 2016 and any subsequent filings we make with the SEC prior to the date of the shareholder meetings.

Your rights as a shareholder will change as a result of the Scheme of Arrangement due to differences between Bermuda law and Irish law.

Because of differences between Bermuda law and Irish law, if the Scheme of Arrangement is consummated, certain of your rights as a shareholder will change. Certain of these changes will be conditioned on the approval of proposals at the shareholder meetings relating to the adoption of bye-laws of XL-Bermuda. A discussion of material differences in shareholder rights between XL-Ireland and XL-Bermuda is included in detail under “Description of XL Group Ltd Share Capital,” “Comparison of Rights of Shareholders and Powers of the Board of Directors,” “Proposal Number Nine: The Bermuda Bye-Law Amendment Threshold Proposal—Effect of Proposal,” “Proposal Number Ten: The Bermuda Merger and Amalgamation Threshold Proposal—Effect of Proposal,” and “Proposal Number Eleven: The Bermuda Repurchase Right Proposal—Effect of Proposal.” XL-Bermuda’s memorandum of association and bye-laws will be substantially in the forms attached to this proxy statement as Annexes B and C, respectively, subject to the items identified above which will be subject to approval by holders of XL-Ireland ordinary shares at the extraordinary general meeting as referenced above. Further, although not reflected in the memorandum of association or bye-laws of XL-Bermuda, because XL-Bermuda will not be incorporated in Ireland, if the Transaction is consummated, attempted takeovers of XL-Bermuda would not, as a matter of law, be subject to the Irish Takeover Rules or review by the Irish Takeover Panel.

The anticipated benefits of the Transaction may not be realized.

We may not realize the benefits we anticipate from the Transaction. Our failure to realize those benefits could have a material and adverse effect on our business, results of operations or financial condition.

Please see “Proposal Number One: The Scheme of Arrangement Proposal—Background and Reasons for the Transaction.”

If the Irish High Court does not sanction the Scheme of Arrangement, XL-Ireland will not have the ability to effect the Transaction.

We cannot proceed with the Transaction unless the Irish High Court sanctions the Scheme of Arrangement after conducting the Sanction Hearing. Assuming that the scheme meetings are conducted in accordance with the Irish High Court’s order and that the shareholders approve the Scheme of Arrangement Proposal by the majority required by the Irish Companies Act 2014, we are not aware of any reason why the Irish High Court would not sanction the Scheme of Arrangement. Nevertheless, the Irish High Court’s sanction is a matter for its discretion and there can be no assurance if or when such sanction will be obtained.

If the Irish High Court does not sanction the Scheme of Arrangement, XL-Ireland will be unable to effect the Transaction as contemplated under the Scheme of Arrangement (even if shareholders have approved all proposals necessary to consummate the Scheme of Arrangement). In addition, the Irish High Court may impose such conditions, modifications or amendments as it deems appropriate in relation to the Scheme of Arrangement, but may not impose any material changes without the joint consent of XL-Ireland and XL-Bermuda. If such conditions, modifications or amendments are imposed, XL will be unable to effect the Transaction without amending the Scheme of Arrangement, which, depending on the nature of such conditions, modifications or amendments, might require new shareholder approvals. In addition, it is likely that XL may determine to terminate the Scheme of Arrangement and not proceed with the Transaction if any condition, modification or amendment is imposed on us that is adverse to XL.

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Please see “Proposal Number One: The Scheme of Arrangement Proposal—Court Sanction of the Scheme of Arrangement.”

The market for the XL-Bermuda common shares may differ from the market for the XL-Ireland ordinary shares.

We will continue to list XL-Bermuda common shares on the NYSE under the symbol “XL”, the same trading symbol as the XL-Ireland ordinary shares. The market price, trading volume or volatility of the XL-Bermuda common shares could be different from those of the XL-Ireland ordinary shares.

XL-Bermuda may become subject to taxes in Bermuda after March 31, 2035, which may have a material adverse effect on its financial condition.

Bermuda currently does not impose profits taxes, income taxes, capital gains taxes or any tax of the nature of estate or inheritance taxes. The Bermuda Minister of Finance, under the Exempted Undertakings Tax Protection Act 1966, as amended, of Bermuda, has provided XL-Bermuda an assurance that if any legislation is enacted in Bermuda that would “impose tax computed on profits or income or computed on any capital asset, gain or appreciation, or any tax in the nature of estate duty or inheritance tax, then the imposition” of any such tax will not be applicable to XL-Bermuda or any of its respective operations, shares, debentures or other obligations until March 31, 2035. It is possible that after March 31, 2035 XL-Bermuda may become subject to Bermuda taxes of the nature described above if Bermuda changes its tax laws as described in the prior sentence.

The Transaction may not allow us to maintain a competitive worldwide effective corporate tax rate.

We believe the Transaction should permit us to maintain a competitive worldwide effective tax rate. However, we cannot provide any assurance as to what our worldwide effective tax rate will be after the Transaction because of, among other things, uncertainty regarding the amount of business activities in any particular jurisdiction in the future and the tax laws of such jurisdictions. Our actual worldwide effective tax rate may vary from our expectation and that variation may be material.

If Bermuda does not maintain Solvency II equivalence in the future, XL could face other regulation that would be adverse to its business.

Although the Solvency II equivalence determination for Bermuda (and other third countries) has been granted for an “indefinite period”, Solvency II provides that equivalence for third countries should be regularly reviewed to take into account any changes to the prudential or solvency regime. It is therefore possible that in the future a determination could be made that Bermuda’s insurance supervisory regime is no longer equivalent to Solvency II. In such event, European Union supervisors may conduct group supervision in respect of XL or utilize (currently unspecified) “other methods” to achieve the aims of group supervision. These methods may include requiring XL to form a European Union subgroup under a new European Union domiciled holding company over which supervision would be exercised by a European supervisor, possibly accompanied by additional supervisory measures. This supervision or any group supervision conducted, or alternative measures utilized by European Union supervisors may apply in addition to Bermuda’s group supervision regime and could impose restrictions and requirements on XL that could be material and adverse to XL’s business and operations.

The Transaction will result in additional direct and indirect costs, even if it is not consummated.

We will incur additional costs and expenses in connection with and as a result of the Transaction. These costs and expenses include professional fees to comply with Bermuda corporate laws and financial reporting requirements, as well as any additional costs we may incur going forward as a result of our new corporate structure. In addition, we have incurred and expect to incur further legal, accounting, filing and possible other fees and mailing, financial printing and other expenses in connection with the Transaction, even if the proposals necessary to consummate the Scheme of Arrangement are not approved or the Transaction is not consummated.

We may choose to abandon or defer the Transaction.

The Transaction may be abandoned or delayed, at any time or for any reason prior to the Sanction Hearing, by action of the Board of Directors. While we currently expect the Effective Time to take place

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soon after the Sanction Hearing, the Effective Time will not occur until the Irish Registrar of Companies has registered an order of the High Court approving the Scheme of Arrangement. In addition the Board of Directors may defer the application to the Irish High Court to approve the Scheme of Arrangement until the latest of December 31, 2016 (or such later date as the Irish High Court has allowed) or may abandon the Transaction before the Sanction Hearing for economic, strategic or other reasons, including if adverse conditions are imposed on the Transaction by the Irish High Court. It is likely that XL may determine to terminate the Scheme of Arrangement and not proceed with the Transaction if any condition, modification or amendment is imposed on us that is adverse to XL.

The enforcement of judgments in shareholder suits against XL-Bermuda may be more difficult.

XL-Bermuda is a Bermuda company. XL-Bermuda has been advised by its Bermuda counsel, ASW Law Limited, that a judgment for the payment of money rendered by a court in the U.S. based on civil liability would not be automatically enforceable in Bermuda. XL-Bermuda has also been advised by ASW Law Limited that with respect to a final and conclusive judgment obtained in a court of competent jurisdiction in the U.S. under which a sum of money is payable (other than a sum of money payable in respect of multiple damages, taxes or other charges of a like nature or in respect of a fine or other penalty), a Bermuda court would be expected to enforce a judgment based thereon, provided that (a) such courts had proper jurisdiction over the parties subject to such judgment, (b) such courts did not contravene the rules of natural justice of Bermuda, (c) such judgment was not obtained by fraud, (d) the enforcement of the judgment would not be contrary to the public policy of Bermuda, (e) no new admissible evidence relevant to the action is submitted prior to the rendering of the judgment by the courts of Bermuda and (f) there is due compliance with the correct procedures under the laws of Bermuda. As a result, it may be difficult for a shareholder to effect service of process within the U.S. or to enforce judgments obtained against XL-Bermuda in U.S. courts. XL-Bermuda will irrevocably agree that it may be served with process with respect to actions based on offers and sales of securities made in the U.S. by having Puglisi & Associates be XL-Bermuda’s U.S. agent appointed for that purpose. A Bermuda court may impose civil liability on XL-Bermuda or its directors or officers in a suit brought in the Supreme Court of Bermuda against XL-Bermuda or such persons with respect to a violation of U.S. federal securities laws, provided that the facts surrounding such violation would constitute or give rise to a cause of action under Bermuda law.

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FORWARD-LOOKING STATEMENTS

This proxy statement contains “forward-looking statements” within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended (the “ Securities Act ”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”). The Private Securities Litigation Reform Act of 1995 (“ PSLRA ”) provides a “safe harbor” for forward-looking statements.

Statements that are not historical facts, including statements about our beliefs, plans or expectations, are forward-looking statements. Such statements include forward-looking statements both with respect to us in general, and to the insurance and reinsurance sectors in particular (both as to underwriting and investment matters). These statements are based on current plans, estimates and expectations, all of which involve risk and uncertainty. Actual results may differ materially from those included in such forward-looking statements and therefore you should not place undue reliance on them. Words such as “may,” “will,” “should,” “likely,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates” and similar expressions are used to identify these forward-looking statements for purposes of the PSLRA or otherwise.

The factors that could cause actual future results to differ materially from current expectations include, but are not limited to, our ability to obtain approval of the XL-Ireland shareholders and the Irish High Court for, and to satisfy the other conditions to, the Transaction within the expected timeframe or at all, our ability to realize the expected benefits from the Transaction, the occurrence of difficulties in connection with the Transaction, any unanticipated costs in connection with the Transaction and changes in tax laws, tax treaties or tax regulations or the interpretation or enforcement thereof by the tax authorities in Bermuda, the United States and other jurisdictions following the Transaction.

The foregoing factors are in addition to those factors discussed under “Risk Factors” and “Proposal Number One: The Scheme of Arrangement Proposal—Background and Reasons for the Transaction” and elsewhere in this proxy statement, as well as those in the documents that we incorporate by reference into this proxy statement (including, without limitation, the “Risk Factors” sections of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and other documents on file with the SEC prior to the date of the shareholder meetings). There may be other risks and uncertainties that we are unable to predict at this time. We expressly disclaim any obligation to update or revise these forward-looking statements whether as a result of new information, future developments or otherwise.

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Transaction, other than be increased by a de minimis amount as the result of the fact that the XL-Ireland ordinary shares held by XL-Bermuda immediately prior to the effectiveness of the Scheme of Arrangment will not be cancelled and XL-Bermuda will not reissue an equivalent number of XL-Bermuda common shares itself.

Court Sanction of the Scheme of Arrangement

Pursuant to Section 453 of the Irish Companies Act 2014, the Scheme of Arrangement must be sanctioned by the Irish High Court. This required XL-Ireland to file an originating notice of motion and supporting documentation in connection with the Scheme of Arrangement with the Irish High Court. Prior to the mailing of this proxy statement, XL-Ireland obtained an order from the Irish High Court providing for the convening of the scheme meeting of XL-Ireland shareholders and other procedural matters regarding such meeting and other related Irish High Court proceedings, including a date upon which the Irish High Court will hold the Sanction Hearing. Subject to the shareholders approving each of the Scheme of Arrangement Proposal, the EGM Scheme of Arrangement Proposal, the Capital Reduction Proposal, the Directors’ Allotment Authority Proposal, the Ireland Reserve Application Proposal, the Ireland Memorandum Amendment Proposal and the Ireland Articles Amendment Proposal by the relevant majorities required by the Irish Companies Act 2014 and the other conditions to the Scheme of Arrangement having been satisfied or waived (and assuming we do not abandon the Scheme of Arrangement), the Irish High Court will hold the Sanction Hearing and, we expect, authorize the Scheme of Arrangement.

At the Sanction Hearing, the Irish High Court may impose such conditions, modifications and amendments as it deems appropriate in relation to the Scheme of Arrangement, but may not impose any material changes without the joint consent of XL-Ireland and XL-Bermuda. Subject to any applicable laws, XL-Ireland may consent to any condition, modification or amendment of the Scheme of Arrangement on behalf of the XL-Ireland shareholders that the Irish High Court may think fit to approve or impose. In determining whether to exercise its discretion and authorize the Scheme of Arrangement, the Irish High Court will determine, among other things, whether the Scheme of Arrangement is fair to XL-Ireland’s shareholders.

We expect the Sanction Hearing to be scheduled for July 20, 2016. If you are an XL-Ireland shareholder who wishes to appear in person or be represented by counsel at the Irish High Court hearing in order to present evidence or arguments in support of or opposition to the Scheme of Arrangement, you may do so by giving proper written notice to A&L Goodbody Solicitors, North Wall Quay, IFSC, Dublin 1, as Irish legal advisers to XL-Ireland, no later than 12:00 p.m. (Eastern Time) and 5:00 p.m. (Irish time) on July 5, 2016. XL-Ireland will not object to the participation in the Sanction Hearing by any person who holds XL-Ireland ordinary shares through a broker or nominee or any other person with a legitimate interest in the proceedings and all such persons will have a right to participate.

Assuming that the scheme meeting is conducted in accordance with the Irish High Court’s order and that the shareholders approve the meeting proposals the approval of which are a condition to the Scheme of Arrangement, we are not aware of any reason why the Irish High Court would not sanction the Scheme of Arrangement. Nevertheless, the Irish High Court’s sanction is a matter for its discretion and there can be no assurance if or when such sanction will be obtained.

If the Scheme of Arrangement is sanctioned by the Irish High Court, we intend to file the court order authorizing the Scheme of Arrangement with the Irish Companies Registration Office. Registration of that order by the Registrar of Companies will cause the Scheme of Arrangement to become effective before the opening of trading of the XL-Ireland ordinary shares on the NYSE on the date of such registration, or at such other date and time after such court order filing as the registration of that order may occur, which we refer to as the “Effective Time.”

If the shareholders approve each of the Scheme of Arrangement Proposal, the EGM Scheme of Arrangement Proposal, the Capital Reduction Proposal, the Directors’ Allotment Authority Proposal, the Ireland Reserve Application Proposal, the Ireland Memorandum Amendment Proposal and the Ireland Articles Amendment Proposal (and we do not abandon the Scheme of Arrangement), then XL-Ireland

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intends to apply for sanction of the Scheme of Arrangement at the Sanction Hearing. We encourage you to read the Scheme of Arrangement in its entirety for a complete understanding of its terms and conditions. The Scheme of Arrangement will be substantially in the form attached as Annex A to this proxy statement.

Once the Scheme of Arrangement is effective, the Irish High Court will have exclusive jurisdiction to hear and determine any suit, action or proceeding and to settle any dispute which arises out of or is connected with the terms of the Scheme of Arrangement or its implementation or out of any action taken or omitted to be taken under the Scheme of Arrangement or in connection with the administration of the Scheme of Arrangement.

Please see “—Conditions to Completion of the Transaction” below for more information on the conditions to the Transaction.

Background and Reasons for the Transaction

Background

In 2010, the XL group of companies changed the jurisdiction of incorporation of its parent holding company from the Cayman Islands to Ireland after a careful review of a number of factors, including (i) reputational, political and other risks because of negative publicity regarding companies that were incorporated in jurisdictions such as the Cayman Islands at that time and (ii) the concomitant potential impact of such risks on the XL group of companies’ global business platforms.

Evolution of XL-Ireland’s Global Business Operations—The Catlin Acquisition.

Since 2010, XL-Ireland’s Board and management team has overseen a significant evolution of the nature and scope of XL-Ireland’s global business operations. In furtherance of XL-Ireland’s strategy and in recognition of the five macro forces shaping the property and casualty (“ P&C ”) insurance industry (globalization, analytics and big data, broker consolidation, alternative capital and regulation), in May 2015, we completed our acquisition of the entire issued share capital of Catlin Group Limited (“ Catlin ”), a Bermuda-domiciled global P&C insurer and reinsurer with a significant presence in Bermuda. XL-Ireland’s already substantial operations in and ties to Bermuda were bolstered by the acquisition. Catlin had been domiciled in Bermuda since 2001 and, prior to its acquisition by XL-Ireland, Catlin’s group wide supervisor had been the BMA. Moreover, following the closing of the Catlin acquisition, a significant number of Catlin’s employees, including our Executive Deputy Chairman, Stephen Catlin, have remained in Bermuda, in addition to the sizeable XL group of companies employee base already located there.

Group Supervision and Solvency II

Subsequent to XL-Ireland’s redomestication to Ireland in 2010, the Central Bank of Ireland (“ CBI ”) informed XL-Ireland that it would be its group supervisor under Solvency II. Solvency II was implemented on January 1, 2016. Under Solvency II, among other matters, insurers subject to Solvency II are required to calculate their Solvency Capital Requirement based upon a standard formula or a regulator approved internal capital model. XL-Ireland has previously determined to seek a regulator approved internal capital model for its Solvency Capital Requirement. An internal capital model would be designed to address risks specific to the XL group of companies. It would be based on principles and restrictions applicable to the XL group of companies’ operations and business of the XL group of companies. Therefore it would more accurately reflect the solvency and capital needs of XL-Ireland and its subsidiaries, as opposed to the standard Solvency II formula which was designed as a “one size fits all” model. Such an internal capital model would be expected to result in a more relevant solvency assessment and more efficient capital position, as well as increased financial flexibility, for XL-Ireland.

On November 26, 2015, the European Union’s Commission (the “ European Commission ”) adopted a delegated act determining full equivalence with Solvency II of the solvency/prudential regime applicable in Bermuda in all three equivalence areas: reinsurance; group solvency calculation; and group supervision. The European Union’s Council and European Parliament raised no objections to the European Commission’s decision by February 26, thereby acknowledging and endorsing the European Commission’s determination. As a result of this determination, among other things, group supervision exercised by the BMA is to be deemed equivalent to the supervision of EU groups carried out by the EU supervisory authorities in accordance with Solvency II.

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Reasons for Redomestication to Bermuda

As a result of these and other developments since XL-Ireland’s redomestication to Ireland in 2010, XL-Ireland’s Board determined that changing the jurisdiction of incorporation of the XL group of companies’ parent holding company to Bermuda would be in the interests of XL-Ireland and its shareholders for, among others, the following reasons:

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XL-Ireland engaged in numerous discussions with the CBI regarding group supervision following which XL-Ireland and the CBI concluded that the BMA would be best situated to serve as the XL group of companies’ group wide supervisor and be in a position to approve the XL group of companies’ internal capital model. This determination was buttressed by (i) the BMA’s extensive knowledge of both the XL group of companies and Catlin, (ii) the significance of operations, concentration of risk and balance sheet that the XL group of companies (including the former Catlin companies) has in Bermuda, (iii) the work that the BMA has performed on the group internal capital models for both the XL group of companies’ and Catlin, (iv) the experience and resources of the BMA to regulate international P&C (re)insurance companies and (v) the following specific considerations:

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The XL group of companies has operated in Bermuda since 1986 and the XL group of companies’ largest concentration of risk and its largest operating balance sheet is in Bermuda. XLIB, which is the XL group of companies’ largest operating company and holds all of the XL group of companies’ other operating subsidiaries, is domiciled in Bermuda and is regulated for solvency and other purposes, by the BMA;

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The acquisition of Catlin has resulted in a significantly greater presence of our operations in Bermuda;

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The November 26, 2015 determination by the European Commission of full Solvency II equivalence for Bermuda provided the potential for the BMA to be recognized as group wide supervisor for the XL group of companies under Solvency II; and

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The acquisition of Catlin required that XL-Ireland integrate and conform policies and model approaches before implementing and seeking approval of a group internal capital model. As Catlin’s group supervisor, the BMA had performed substantial work on Catlin group’s internal capital model prior to its acquisition by XL-Ireland. The BMA, as the regulator of XLIB, also performed substantial work in coordination with the CBI on the XL group of companies’ group internal capital model prior to the acquisition of Catlin and has indicated its readiness to work with the XL group of companies to finalize and approve a group internal capital model. These factors contributed to the Board’s belief that the BMA would be well positioned to facilitate the most timely and efficient approval of a group internal capital model for the XL group of companies, a key goal for the XL group of companies;

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The long-term stability of Bermuda’s legal and regulatory environment mirrors that of Ireland. Bermuda’s legal and regulatory history as a financial services and insurance and reinsurance hub is particularly strong. The European Commission’s determination of full Solvency II equivalence, including group supervision equivalence, for Bermuda strongly supports the Board’s determination that Bermuda is a respected member of the international (re)insurance and regulatory community;

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Bermuda has continued to emerge as a premier regulator of global insurance and reinsurance companies. Bermuda’s market is one of the top three reinsurance markets in the world, and includes 15 of the world’s top 40 reinsurers. Bermuda has also emerged as a significant hub for institutional investment in the insurance and reinsurance sector. In addition, Bermuda’s proximity to the United States and its significant transport links to the United States and London enhance operating efficiencies for the XL group of companies;

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•

Bermuda, like Ireland, is a common law jurisdiction. In addition, both jurisdictions are subject to companies acts that have their source in English companies law. Therefore, despite certain differences between the two corporate legal systems, we believe that the rights of XL-Ireland shareholders and XL-Bermuda shareholders will be substantially similar; and

​

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•

Bermuda law, like Irish law, permits dividends to be paid in U.S. dollars and upon the approval of the Board without the need for shareholder approval.

​

Please see “Risk Factors—Your rights as a shareholder will change as a result of the Scheme of Arrangement due to differences between Bermuda law and Irish law,” “Risk Factors—The anticipated benefits of the Transaction may not be realized” and “Risk Factors—If Bermuda does not maintain Solvency II equivalence in the future, XL could face other regulation that would be adverse to its business.”

Amendment, Termination or Delay

Subject to applicable Irish law and any other applicable laws, the Scheme of Arrangement may be amended, modified or supplemented at any time before or after its approval by the holders of XL-Ireland ordinary shares at the scheme meeting. At the Sanction Hearing, the Irish High Court may impose such conditions, modifications and amendments as it deems appropriate in relation to the Scheme of Arrangement, but may not impose any material changes without the joint consent of XL-Ireland and XL-Bermuda. Subject to any applicable laws, XL-Ireland may consent to any condition, modification or amendment of the Scheme of Arrangement on behalf of the shareholders which the Irish High Court may think fit to approve or impose. After approval of the Scheme of Arrangement by the XL-Ireland shareholders, no amendment, modification or supplement to the Scheme of Arrangement may be made or effected that legally requires further approval by XL-Ireland shareholders without obtaining that approval.

The Board may abandon the Scheme of Arrangement and the Transaction, delay the Transaction or engage in corporate restructuring related to the Transaction at any time prior to the Sanction Hearing, without obtaining the approval of XL-Ireland’s shareholders, even though the Scheme of Arrangement may have been approved by the requisite vote of the shareholders and all other conditions to the Transaction may have been satisfied or, if allowed by law, waived for any reason (including legal, tax and regulatory reasons arising from the Transaction).

Unless the Scheme of Arrangement has become effective on or before December 31, 2016 (unless extended with the approval of the Irish High Court), the Scheme of Arrangement will lapse by its terms and not come into effect.

Conditions to Completion of the Transaction

The Transaction will not be consummated unless the following conditions are satisfied or, if allowed by law, waived:

1.

the Scheme of Arrangement Proposal is approved by the requisite vote of the holders of XL-Ireland ordinary shares, voting as a class;

​

2.

the Capital Reduction Proposal is approved by the requisite vote of the holders of XL-Ireland ordinary shares;

​

3.

the EGM Scheme of Arrangement Proposal is approved by the requisite vote of the holders of XL-Ireland ordinary shares;

​

4.

the Directors’ Allotment Authority Proposal is approved by the requisite vote of the holders of XL-Ireland ordinary shares;

​

5.

the Ireland Reserve Application Proposal is approved by the requisite vote of the holders of XL-Ireland ordinary shares;

​

6.

the Ireland Memorandum Amendment Proposal is approved by the requisite vote of the holders of XL-Ireland ordinary shares;

​

7.

the Ireland Articles Amendment Proposal is approved by the requisite vote of the holders of XL-Ireland ordinary shares; and

​

8.

the requisite court order sanctioning the Scheme of Arrangement and the Capital Reduction is obtained from the Irish High Court.

​

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Our Irish counsel has advised us that the Irish High Court is unlikely to sanction the Scheme of Arrangement until all other conditions to the Transaction have been satisfied or waived and any other Irish or foreign regulatory requirements or approvals have been satisfied or obtained.

We are parties to certain agreements that by their terms require the consent of third parties prior to the implementation of the Scheme of Arrangement and certain related transactions. We believe that we will obtain all necessary consents on a timely basis and that the failure to obtain any other consents will not have a material impact on our business or our ability to consummate the Transaction.

Federal Securities Law Consequences; Resale Restrictions

The issuance of XL-Bermuda shares to XL-Ireland shareholders in the Scheme of Arrangement will not be registered under the Securities Act in reliance upon Section 3(a)(10) of the Securities Act. That section exempts from registration securities issued solely in exchange for outstanding securities where the terms and conditions of the issuance and exchange of such securities have been approved by a court of competent jurisdiction, after a hearing upon the fairness of the terms and conditions of the issuance and exchange at which all persons to whom such securities will be issued have a right to appear and to whom adequate notice of the hearing has been given. In determining whether it is appropriate to authorize the Scheme of Arrangement, the Irish High Court will consider at the Sanction Hearing whether the terms and conditions of the Scheme of Arrangement are fair to XL-Ireland’s shareholders. The Irish High Court has scheduled the Sanction Hearing for July 20, 2016.

The XL-Bermuda common shares issued to XL-Ireland shareholders in connection with the Transaction will be freely transferable, except as follows:

•

Persons who are affiliates of XL-Ireland or have been affiliates within 90 days prior to reselling any XL-Bermuda common shares may resell any XL-Bermuda common shares in the manner permitted by Rule 144 promulgated under the Securities Act. In computing the holding period of the XL-Ireland ordinary shares for the purposes of Rule 144(d), such persons will be permitted to “tack” the holding period of their XL-Ireland ordinary shares held prior to the Effective Time.

​

•

Persons whose XL-Ireland ordinary shares bear a legend restricting transfer will receive XL-Bermuda common shares that are subject to the same restrictions.

​

Persons who may be deemed to be affiliates of XL-Ireland or XL-Bermuda for these purposes generally include individuals or entities that control, are controlled by, or are under common control with, XL-Ireland or XL-Bermuda, and would generally not be expected to include shareholders who are not executive officers, directors or significant holders of XL-Ireland ordinary shares or XL-Bermuda common shares.

We have not filed a registration statement with the SEC covering any resales of the XL-Bermuda shares to be received by XL-Ireland’s shareholders in connection with the Transaction. XL-Bermuda intends to file certain post-effective amendments to existing effective registration statements of XL-Bermuda concurrently with the completion of the Transaction.

Upon consummation of the Scheme of Arrangement, the XL-Bermuda common shares will be deemed to be registered under Section 12(b) of the Exchange Act, by virtue of Rule 12g-3 under the Exchange Act, without the filing of any Exchange Act registration statement and XL-Bermuda will be deemed to be the successor issuer of the registered ordinary shares.

Effective Time of the Transaction

If the meeting proposals the approval of which are a condition to the Scheme of Arrangement are approved and the Scheme of Arrangement is sanctioned by the Irish High Court, we intend to file the court order authorizing the Scheme of Arrangement with the Irish Companies Registration Office. Registration of that order will cause the Scheme of Arrangement to become effective at the Effective Time, which is expected to be before the opening of trading of the XL-Ireland ordinary shares on the NYSE on the date of such registration (or at such other date and time after such court order filing as the registration of that order may occur), at which time the various steps of the Scheme of Arrangement as detailed above will occur effectively simultaneously. Subject to any order to the contrary by the Irish High Court, the Effective Time must be on or before December 31, 2016.

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The expected timetable for the Transaction is set forth in Annex D to this proxy statement.

In the event the conditions to the Transaction are not satisfied or, if allowed by law, waived, the Transaction may be abandoned or delayed, even after approval by the requisite vote of the XL-Ireland shareholders; The Transaction may be delayed or abandoned by our Board for any reason prior to obtaining the sanction of the Irish High Court, even if the Transaction has been approved by the requisite vote of the XL-Ireland shareholders. However, the Board will not have any statutory discretion under Irish law to refuse to consummate the Scheme of Arrangement if the Scheme of Arrangement has been sanctioned by the Irish Court.

Please see “—Amendment, Termination or Delay”.

Management of XL-Bermuda

If the Transaction is consummated, the executive officers and directors of XL-Ireland immediately prior to the Effective Time are expected to be the executive officers and directors of XL-Bermuda.

Exculpation and Indemnification

Under the Irish Companies Act 2014, a company may not exempt its directors or corporate secretary from liability for negligence, default or a breach of duty or trust. Where a breach of duty has been established, directors and the corporate secretary may be statutorily exempted by a court from personal liability for negligence, default or breach of duty or trust if, among other things, the court determines that they have acted honestly and reasonably, and that they may fairly be excused as a result.

XL-Ireland’s articles of association contain provisions that indemnify its directors and officers against liabilities to the fullest extent permitted by law (except in the case of claims by or in the right of XL-Ireland) and expenses they may incur in their capacity as directors and officers, if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the interests of XL-Ireland and, with respect to any criminal action or proceeding, had no reasonable cause to believe their actions were unlawful. In addition, to the extent that a director or officer is successful on the merits or otherwise in defense of any relevant legal proceeding, the articles of association of XL-Ireland provide that he or she will be indemnified against expenses actually and reasonably incurred by him or her in connection with that legal proceeding. The indemnity provisions do not extend to situations involving claims by or in the right of XL-Ireland in which a court determines that a director or officer is liable for willful neglect or default in the performance of his or her duty to XL-Ireland.

The Irish Companies Act 2014 prescribes that an advance commitment to indemnify only permits a company to pay the costs or discharge the liability of a director or corporate secretary where judgment is given in favor of the director or corporate secretary in any civil or criminal action in respect of such costs or liability, or where the Irish High Court grants relief because the director or corporate secretary acted honestly and reasonably and ought fairly to be excused wholly or partly. Any provision whereby an Irish company seeks to commit in advance to indemnify its directors or corporate secretary over and above the limitations imposed by the Irish Companies Act 2014 will be void under Irish law, whether contained in its bye-laws or any contract between the company and the director or corporate secretary. The Bermuda Companies Act permits XL-Bermuda to indemnify its directors, any other officers and the auditor against losses arising or liability resulting from their negligence, default, breach of duty or breach of trust in relation to XL-Bermuda or any subsidiary of XL-Bermuda; provided, that XL-Bermuda is not permitted to indemnify any such person against any liability arising from their fraud or dishonesty.

XLIT has entered into indemnification agreements (the “ Indemnification Agreements ”) with each of XL-Ireland’s directors and its corporate secretary, and a deed poll indemnity (the “ Deed Poll ”) as to other executives, directors and employees of XL-Ireland (and its subsidiaries) who have not entered into an Indemnification Agreement. The Indemnification Agreements and Deed Poll provide that XLIT will indemnify the indemnitees to the fullest extent permitted by Cayman Islands law against claims related to each indemnitee’s service to (or at the request of) XL-Ireland, except in certain circumstances, including (i) where payment is actually made or then due (A) by XL-Ireland in its discretion, (B) under an insurance policy, (C) pursuant to an agreement between indemnitee and XL-Ireland, XLIT or other entity served by indemnitee at the request of XL-Ireland or (D) under the governing documents of XL-Ireland, XLIT Ltd.

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or other entity served by indemnitee at the request of XL-Ireland; (ii) in connection with a proceeding initiated by indemnitee, unless such proceeding was authorized by the XLIT Board of Directors or falls within certain limited exceptions specifically provided for in the Indemnification Agreements; (iii) in connection with a proceeding brought by or in the name of XL-Ireland, where the indemnitee is found, in a final and non-appealable judgment of a court of competent jurisdiction, to be liable for willful neglect or willful default in the performance of the indemnitee’s duty, unless a court of competent jurisdiction determines that the indemnitee is fairly and reasonably entitled to such payment. The Indemnification Agreements and Deed Poll also provide that any and all indemnifiable expenses shall, if so requested by the indemnitee, be advanced promptly as they are incurred, provided that the indemnitee must repay any such expense advance if it is determined in a final and non-appealable judgment of a court of competent jurisdiction that the indemnitee is not entitled to be indemnified against such expenses. Prior to seeking an indemnification payment or expense advance under the Indemnification Agreements, an indemnitee must request that XL-Ireland consider in its discretion whether to make such indemnification payment or expense advance. In the event an indemnification or expense advance (or an undertaking to provide such indemnification or advance) is not received from XL-Ireland within 5 business days of such request, the indemnitees will be eligible to receive such indemnification or expense advance from XLIT pursuant to the terms of the Indemnification Agreement.

The bye-laws of XL-Bermuda provide that XL-Bermuda will indemnify every “Indemnified Person” (which includes any director or other officer, including, if applicable, any resident representative) out of the assets of XL-Bermuda against all liabilities, loss, damage or expense (including but not limited to liabilities under contract, tort and statute or any applicable foreign law or regulation and all reasonable legal and other costs and expenses properly payable) incurred or suffered by him by or by reason of any act done, conceived in or omitted in the conduct of XL-Bermuda’s business or in the discharge of his duties or in defending any proceedings, whether civil or criminal; provided, that such expenses and liabilities are not found by a court of competent jurisdiction (upon entry of a final non-appealable judgment) to be the result of any such Indemnified Person’s fraud and dishonesty.

In a recent Bermuda Supreme Court case, the Court ordered that the indemnity provisions of a Bermuda company’s bye-laws were enforceable and could be relied on by the defendant directors after the Court found them guilty of misfeasance for breaching their duty of care owed to the company. This case demonstrates that the Bermuda courts will uphold indemnification provisions in the bye-laws of a Bermuda company to protect its directors and officers.

XL-Bermuda’s bye-laws also provide that XL-Bermuda may purchase and maintain insurance for the benefit of any indemnified person against any liability incurred by him or her under the Bermuda Companies Act in his or her capacity as a director or officer or indemnifying such indemnified person in respect of any loss arising or liability attaching to him or her by virtue of any rule of law in respect of any negligence, default, breach of duty or breach of trust of which the indemnified person may be guilty in relation to XL-Bermuda or any subsidiary thereof.

In order to continue to retain and attract highly experienced and capable persons to serve as directors and executives of XL, we intend that XL-Bermuda will enter into arrangements (in the form of agreements) following the Scheme of Arrangement providing for the indemnification of, and advancement of expenses to, the directors and certain executive officers of XL-Bermuda. We expect that the indemnification and expense advancement provided under these arrangements will be substantially similar to the indemnity currently afforded by XLIT, which will also remain in place. XL-Bermuda also expects to continue to maintain liability insurance policies similar to those currently maintained by XL-Ireland.

Please see “Comparison of Rights of Shareholders and Powers of the Board of Directors—Indemnification of Directors and Officers; Insurance.”

Interests of Certain Persons in the Transaction

Except for the indemnification arrangements described above, no person who has been a director or executive officer of XL-Ireland at any time since the beginning of our last fiscal year, or any associate of any such person, has any material or substantial interest in the Transaction, except for any interest arising from his or her ownership of securities of XL-Ireland. No such person is receiving any extra or special benefit not shared on a pro rata basis by all other holders of XL-Ireland ordinary shares.

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Regulatory Matters

We will be required to obtain an exemption from the acquisition of control (“ Form A ”) application and approval requirements from the domiciliary regulators of the U.S. insurance subsidiaries of XL. If one or more domiciliary state regulators refuses to grant our exemption request, we will be required to make a Form A application or similar filing in such state, and obtain approval of that application, prior to the Effective Time.

In addition, we will also be required to obtain the prior approval of, or make filings with, certain insurance and financial services regulators in several non-U.S. jurisdictions in which our insurance subsidiaries conduct business.

Although not an express condition to sanctioning of the Scheme of Arrangement, we do not believe that the Irish High Court will sanction the Scheme of Arrangement unless all required regulatory approvals or related waivers have been obtained.

Holders of XL-Ireland ordinary shares should consult their own legal advisor as to whether such holder will need to submit any Hart-Scott-Rodino Antitrust Improvements Act filing or any other regulatory filing in connection with the Transaction.

No Appraisal Rights

Under Irish law, none of the holders of XL-Ireland ordinary shares has any right to an appraisal of the value of their XL-Ireland ordinary shares or payment for them in connection with the Transaction.

Cancellation and Issuance of Shares

Assuming the Scheme of Arrangement becomes effective, if your XL-Ireland ordinary shares are held in book-entry form or by your broker, your XL-Ireland ordinary shares will automatically be cancelled at the Effective Time and cease to be valid and, in consideration therefor, fully paid and non-assessable XL-Bermuda common shares will be issued to you or your broker without any action on your part. If you hold your XL-Ireland ordinary shares in certificated form, and the Scheme of Arrangement becomes effective, your XL-Ireland ordinary shares will automatically be cancelled at the Effective Time and cease to be valid and your ownership of XL-Bermuda common shares will be evidenced through an electronic book-entry in your name on XL-Bermuda’s shareholder records. Our transfer agent will mail you a letter of transmittal for your old share certificates and send to you a statement documenting your ownership of XL-Bermuda common shares in registered form.

Certain XL-Ireland ordinary shares are held and settled through DDIs. The XL-Ireland ordinary shares underlying DDIs are held by Computershare UK and its affiliates as nominees through DTC. XL-Ireland and XL-Bermuda intend to take the necessary steps with Computershare UK to have outstanding DDIs in respect of XL-Ireland ordinary shares to be automatically cancelled and replaced at the Effective Time with depositary interests issued in respect of XL-Bermuda common shares.

You should not return your XL-Ireland ordinary share certificates with the enclosed proxy card.

XL-Bermuda common shares issued pursuant to the Scheme of Arrangement will be fully paid and non-assessable.

Equity Incentive Plans

If the Transaction is consummated, XL-Bermuda will assume the existing obligations of XL-Ireland in connection with awards granted under XL-Ireland’s equity incentive plans, which include the following plans:

•

XL Group plc 1991 Performance Incentive Program for Employees; and

​

•

XL Group plc Directors Stock & Option Plan,

​

(the “ Equity Incentive Plans ”).

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The Equity Incentive Plans will be amended as necessary to comply with Bermuda law and give effect to the Transaction, including to provide (1) that XL-Bermuda common shares will be issued, held, available or used to measure or satisfy benefits as appropriate under the Equity Incentive Plans, in substitution for XL-Ireland ordinary shares; and (2) for the appropriate substitution of XL-Bermuda for XL-Ireland in the Equity Incentive Plans. The Transaction will not impact the terms and conditions of the awards granted under the Equity Incentive Plans after the substitution of XL-Bermuda for XL-Ireland.

XL-Bermuda intends to file new registration statements and/or post-effective amendments to certain effective registration statements of XL-Ireland concurrently with the completion of the Transaction in connection with its assumption of the existing obligations of XL-Ireland in connection with awards granted under XL-Ireland’s Equity Incentive Plans.

Effect on Employees

In connection with consummation of the Transaction, all outstanding employment agreements entered into with XL-Ireland’s senior executives by XL-Ireland are expected to be assumed by XL-Bermuda. We expect there will be minimal effect on our employees globally as a result of the Transaction.

Outstanding Debt and Effect on Access to Capital and Credit Markets

We do not believe that the Transaction will have any material effect on our credit facilities or senior notes. Certain amendments to our credit facilities will need to be obtained in connection with the subsequent liquidation of XL-Ireland, these are being sought from our lenders. In addition, XL-Bermuda will need to execute one or more supplemental indentures in connection with, and become a guarantor of, certain of our senior notes. Following the Transaction, all of our outstanding debt will remain outstanding and XL-Bermuda or one or more its subsidiaries will continue to be the borrowers, issuers and guarantors of such debt.

We do not expect that the Transaction will have any adverse effect on our ability to access the capital markets or bank credit markets.

Stock Exchange Listing and Reporting Obligations

XL-Ireland ordinary shares are expected to continue to trade on the NYSE and the BSX until the Effective Time.

We intend to make application so that, immediately following the Effective Time, the XL-Bermuda common shares (for which there is currently no established public trading market) will be listed on the NYSE under the symbol “XL”, the same symbol under which the XL-Ireland ordinary shares are currently listed. XL-Bermuda common shares are also expected to be listed on the Bermuda Stock Exchange following the Effective Time under the symbol “XL.BH”, the same symbol under which the XL-Ireland ordinary shares are currently listed. We do not currently intend to list the XL-Bermuda common shares on any other stock exchange.

Upon completion of the Transaction, we will remain subject to SEC reporting requirements, the mandates of Sarbanes-Oxley Act and the applicable corporate governance rules of the NYSE, and we will continue to report our consolidated financial results in U.S. dollars and in accordance with U.S. GAAP. We will continue to file reports on Forms 10-K, 10-Q and 8-K with the SEC, as we currently do. We will no longer be required to provide you with Irish Statutory Accounts prepared in accordance with Irish law, but we will be required to provide you certain financial information pursuant to Bermuda law.

Accounting Treatment of the Transaction

Under U.S. GAAP, the Transaction represents a transaction between entities under common control. Assets and liabilities transferred between entities under common control are accounted for at cost. Accordingly, the assets and liabilities of XL-Bermuda will be reflected at their carrying amounts in the accounts of XL-Ireland at the Effective Time.

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Effect of the Transaction on Potential Future Status as a Foreign Private Issuer

Under SEC rules, companies organized outside of the United States that qualify as “foreign private issuers” remain subject to SEC regulation, but are exempt from certain requirements that apply to U.S. reporting companies. XL-Ireland is not a “foreign private issuer.” Even if XL-Bermuda meets the tests for a “foreign private issuer,” we do not currently intend to avail ourselves of the benefits of being a “foreign private issuer.”

Required Vote

The Scheme of Arrangement Proposal requires approval by the affirmative vote of  (i) a majority in number of the registered holders of XL-Ireland ordinary shares attending the scheme meeting, in person or by proxy and (ii) 75% or more of the XL-Ireland ordinary shares voted at the scheme meeting, in person or by proxy.

Please see “The Shareholder Meetings—Votes of Shareholders Required for Approval” for more information on the vote required.

Board Recommendation

Our Board has approved the Scheme of Arrangement and unanimously recommends that our shareholders vote “FOR” the Scheme of Arrangement Proposal at the scheme meeting.

Resolution

“THAT the Scheme of Arrangement (a copy of which has been produced to this meeting and for the purposes of identification signed by the chairman thereof) in its original form or with such modifications, additions or conditions as may be approved or imposed by the High Court of Ireland be and is hereby approved and that the directors of the Company be and are hereby authorized to take such action as they consider necessary or appropriate for carrying the Scheme of Arrangement into effect.”

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PROPOSAL NUMBER SIX: THE IRELAND RESERVE APPLICATION PROPOSAL

Holders of XL-Ireland ordinary shares are being asked to approve at the extraordinary general meeting the application by XL-Ireland of a reserve credit, arising on its books of account as a result of the cancellation of ordinary shares in connection with the Scheme of Arrangement, to pay up in full at par the ordinary shares allotted to XL-Bermuda in connection with the Scheme of Arrangement.

Required Vote

The Ireland Reserve Application Proposal requires the affirmative vote of more than 50% of all XL-Ireland ordinary shares voted at the extraordinary general meeting, in person or by proxy.

Please see “The Shareholder Meetings—Votes of Shareholders Required for Approval” for more information on the vote required.

Effect of Proposal

The application of the reserve credit contemplated by the Ireland Reserve Application Proposal is a prerequisite step to the completion of the Scheme of Arrangement. If the Ireland Reserve Application Proposal is not approved, the Scheme of Arrangement cannot be completed.

Board Recommendation

Our Board unanimously recommends that our shareholders vote “FOR” approval of the Ireland Reserve Application Proposal.

Resolution

“THAT, subject to and forthwith upon the reduction of capital referred to at Resolution 2 (the Capital Reduction Proposal) taking effect, the reserve credit arising in the books of account of the Company as a result of the cancellation of the Cancellation Shares (as defined in the Scheme of Arrangement referred to at Resolution 1) be applied in paying up in full at par such number of New XL Group Shares, (as defined in the Scheme of Arrangement referred to in Resolution 1) as shall be equal to the aggregate of the number of Cancellation Shares cancelled pursuant to Resolution 2, such New XL Group Ltd Shares to be allotted and issued to XL Group Ltd and/or its nominees credited as fully paid up and free from all liens, charges, encumbrances, rights of pre-emption and any other third party rights of any nature whatsoever.”

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PROPOSAL NUMBER SEVEN: THE IRELAND MEMORANDUM AMENDMENT PROPOSAL

Holders of XL-Ireland ordinary shares are being asked to approve at the extraordinary general meeting an amendment to the memorandum of association of XL-Ireland to grant XL-Ireland a new object enabling it to enter into the Scheme of Arrangement.

Required Vote

The Ireland Memorandum Amendment Proposal requires the affirmative vote of not less than 75% of all XL-Ireland ordinary shares voted at the extraordinary general meeting, in person or by proxy.

Please see “The Shareholder Meetings—Votes of Shareholders Required for Approval” for more information on the vote required.

Effect of Proposal

The granting of the new object enabling XL-Ireland to enter into the Scheme of Arrangement contemplated by the Ireland Memorandum Amendment Proposal is a prerequisite step to the completion of the Scheme of Arrangement. If the Ireland Memorandum Amendment Proposal is not approved, the Scheme of Arrangement cannot be completed.

Board Recommendation

Our Board unanimously recommends that our shareholders vote “FOR” approval of the Ireland Memorandum Amendment Proposal.

Resolution

“THAT, with effect from the passing of this resolution, the Memorandum of Association of the Company be amended by adding the following new paragraph 3.48:

“To enter into any scheme of arrangement with its creditors or members or any class of them pursuant to Sections 449 to 455 of the Companies Act 2014.””

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PROPOSAL NUMBER EIGHT: THE IRELAND ARTICLES AMENDMENT PROPOSAL

Holders of XL-Ireland ordinary shares are being asked to approve at the extraordinary general meeting an amendment to the articles of association of XL-Ireland to (1) provide that the allotment or issue of all ordinary shares in XL-Ireland on or after such amendment and before the Cancellation Record Time will be allotted and issued subject to the Scheme of Arrangement; (2) allow XL-Bermuda to transfer to itself, or to any person on its behalf, any XL-Ireland ordinary shares allotted or issued to any person on or after the Cancellation Record Time, or otherwise issued after the amendment to the articles of association of XL-Ireland that are not subject to the scheme of arrangement; (3) allow XL-Ireland to appoint an attorney to enter into any transfers required in respect of the transfer referred to at (2) above and XL-Bermuda to appoint an attorney to exercise rights attached to those shares; and (4) disapply rights of pre-emption to XL-Ireland ordinary shares allotted and issued pursuant to the Scheme of Arrangement.

Required Vote

The Ireland Articles Amendment Proposal requires the affirmative vote of not less than 75% of all XL-Ireland ordinary shares voted at the extraordinary general meeting, in person or by proxy.

Please see “The Shareholder Meetings—Votes of Shareholders Required for Approval” for more information on the vote required.

Effect of Proposal

The amendment of the articles of association of XL-Ireland to (1) provide that the allotment or issue of all ordinary shares in XL-Ireland on or after such amendment and before the Cancellation Record Time will be allotted and issued subject to the Scheme of Arrangement; (2) allow XL-Bermuda to transfer to itself, or to any person on its behalf, any XL-Ireland ordinary shares allotted or issued to any person on or after the Cancellation Record Time, or otherwise issued after the amendment to the articles of association of XL-Ireland that are not subject to the scheme of arrangement; (3) allow XL-Ireland to appoint an attorney to enter into any transfers required in respect of the transfer referred to at (2) above and XL-Bermuda to appoint an attorney to exercise rights attached to those shares; and (4) disapply rights of pre-emption to XL-Ireland ordinary shares allotted and issued pursuant to the Scheme of Arrangement.

Board Recommendation

Our Board unanimously recommends that our shareholders vote “FOR” approval of the Ireland Articles Amendment Proposal.

Resolution

“THAT, with effect from the passing of this resolution, the Articles of Association of the Company be amended by adding the following new Article 124:

“124   SCHEME OF ARRANGEMENT

(a)

In these Articles, the Scheme means the scheme of arrangement between the Company and the holders of the Ordinary Shares dated May 11, 2016 under Sections 449 to 455 of the Companies Act 2014 in its original form or with or subject to any modifications, additions or conditions as may be approved or imposed by the Court and expressions defined in the Scheme and (if not so defined) in the document constituting the scheme circular circulated with the Scheme under Section 452 of the Companies Act 2014 shall have the same meanings in this Article.

​

(b)

Notwithstanding any other provisions of these Articles, if the Company allots and issues any Ordinary Shares (other than to XL Group Ltd or its nominees) on or after the adoption of this Article and prior to the Cancellation Record Time, such Ordinary Shares shall be allotted and issued subject to the terms of the Scheme and the holder or holders of those Ordinary Shares shall be bound by the Scheme accordingly.

​

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(c)

Notwithstanding any other provision of these Articles, if any new Ordinary Shares are allotted or issued to any person (a “new member”) (other than under the Scheme or to XL Group Ltd or its nominees) (i) on or after the Cancellation Record Time or (ii) otherwise, after the adoption of this Article in any circumstances in which neither the Scheme nor Article 124(b) above applies, XL Group Ltd may, provided that the Scheme has become effective, have such Ordinary Shares transferred immediately, free of all encumbrances, to XL Group Ltd and/or its nominee(s) in consideration of the issue by XL Group Ltd to the new member of the number of common shares of US$0.01 each in the capital of XL Group Ltd to which the new member would have been entitled under the Scheme had such Ordinary Shares transferred to XL Group Ltd hereunder been Cancellation Shares at the Cancellation Record Time.

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(d)

In order to give effect to any such transfer required by this Article 124, the Company may appoint any person to execute and deliver a form of transfer on behalf of, or as attorney for, the new member in favour of XL Group Ltd and/or its nominee(s). Pending the registration of XL Group Ltd as a holder of any Ordinary Share to be transferred under this Article 124, the new member shall not be entitled to exercise any rights attaching to any such Ordinary Share unless so agreed by XL Group Ltd and XL Group Ltd shall be irrevocably empowered to appoint a person nominated by the Directors of XL Group Ltd to act as attorney or agent on behalf of any holder or holders of that Ordinary Share in accordance with any directions XL Group Ltd may give in relation to any dealings with or disposal of that Ordinary Share (or any interest in it), the exercise of any rights attached to it or receipt of any distribution or other benefit accruing or payable in respect of it and any holder or holders of that Ordinary Share must exercise all rights attaching to it in accordance with the directions of XL Group Ltd. The Company shall not be obliged to issue a certificate to the new member for any such Ordinary Share.

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(e)

No right of pre-emption granted to any holder or holders of Ordinary Shares nor to any other person whatsoever shall apply to the allotment or issue of Ordinary Shares pursuant to the Scheme of Arrangement.””

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PROPOSAL NUMBER NINE: THE BERMUDA BYE-LAW AMENDMENT
THRESHOLD PROPOSAL

Holders of XL-Ireland ordinary shares are being asked to approve at the extraordinary general meeting, as prospective shareholders of XL-Bermuda, proposed bye-law 90 of XL-Bermuda that will require that any amendment to the bye-laws of XL-Bermuda must be approved by (1) 75% of the votes cast by shareholders of XL-Bermuda present or represented by proxy and voting at a general meeting or (2) if the Board of Directors of XL-Bermuda has unanimously approved the proposed amendment, a majority of votes cast by shareholders of XL-Bermuda present or represented by proxy and voting at such general meeting. The full text of the proposed bye-law 90 is set forth in Annex C.

Required Vote

In order to approve the Bermuda Bye-Law Amendment Threshold Proposal, we must obtain the affirmative vote of not less than 75% of all XL-Ireland ordinary shares voted, in person or by proxy, at the extraordinary general meeting.

Please see “The Shareholder Meetings—Votes of Shareholders Required for Approval” for more information on the vote required.

Effect of Proposal

Currently, under Irish law and XL-Ireland’s articles of association, amendments to XL-Ireland’s articles of association require a special resolution. This requires the affirmative vote of not less than 75% of all XL-Ireland ordinary shares voted, in person or by proxy or a written resolution signed by the holders of not less than 75% of the XL-Ireland ordinary shares, provided that all of the holders of XL-Ireland ordinary shares have been circulated with the proposed text of the resolution and explanation of its main purpose. Bermuda law permits a reduction of this threshold and XL-Ireland’s Board of Directors believes that it would be in the interests of shareholders to reduce the required approval threshold for an amendment to XL-Bermuda’s bye-laws where XL-Bermuda’s Board of Directors has unanimously approved such amendment.

If the Bermuda Bye-Law Amendment Threshold Proposal is not approved, then bye-law 90 of XL-Bermuda as set forth on Annex C will instead provide that any amendment to the bye-laws of XL-Bermuda must be approved by 75% of the votes cast by shareholders of XL-Bermuda present or represented by proxy and voting at a general meeting, which would mirror the current voting requirements under Irish law and XL-Ireland’s articles of association.

Board Recommendation

Our Board unanimously recommends that our shareholders vote “FOR” approval of the Bermuda Bye-Law Amendment Threshold Proposal.

Resolution

“THAT, upon the effectiveness of the Scheme of Arrangement bye-law 90 of XL Group Ltd as adopted by XL Group Ltd shall read as follows:

“90   Alteration of Bye-laws

No Bye-law shall be rescinded, altered or amended and no new Bye-law shall be made until the same has been approved by (1) seventy-five percent (75%) of the votes cast by Members present or represented by proxy and voting at a general meeting or (2) if the Board has unanimously approved the proposal, a majority of votes cast by Members present or represented by proxy and voting at such general meeting.””

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PROPOSAL NUMBER TEN: THE BERMUDA MERGER AND AMALGAMATION
THRESHOLD PROPOSAL

Holders of XL-Ireland ordinary shares are being asked to approve at the extraordinary general meeting, as prospective shareholders of XL-Bermuda, proposed bye-law 92 of XL-Bermuda that will require that any merger or amalgamation involving XL-Bermuda must be approved by (1) 75% of the votes cast by shareholders of XL-Bermuda present or represented by proxy and voting at a general meeting or (2) if the Board of Directors of XL-Bermuda has unanimously approved the merger or amalgamation, a majority of votes cast by shareholders of XL-Bermuda present or represented by proxy and voting at such general meeting. The full text of the proposed bye-law 92 is set forth in Annex C.

Required Vote

In order to approve the Bermuda Merger and Amalgamation Threshold Proposal, we must obtain the affirmative vote of not less than 75% of all XL-Ireland ordinary shares voted, in person or by proxy, at the extraordinary general meeting.

Please see “The Shareholder Meetings—Votes of Shareholders Required for Approval” for more information on the vote required.

Effect of Proposal

Currently, under Irish law, in most cases, mergers and amalgamations involving XL-Ireland require a special resolution. This requires the affirmative vote of not less than 75% of all XL-Ireland ordinary shares voted, in person or by proxy, at a general meeting or as a written resolution signed by the holders of not less than 75% of the XL-Ireland ordinary shares, provided that all of the holders of XL-Ireland ordinary shares have been circulated with the proposed text of the resolution and explanation of its main purpose. Bermuda law permits a reduction of this threshold and XL-Ireland’s Board of Directors believes that it would be in the interests of shareholders to reduce the required approval threshold for mergers and amalgamations involving XL-Bermuda following the Effective Time where XL-Bermuda’s Board of Directors unanimously supports the transaction.

If the Bermuda Merger and Amalgamation Threshold Proposal is not approved, then bye-law 92 of XL-Bermuda as set forth on Annex C will instead provide that any merger or amalgamation involving XL-Bermuda must be approved by 75% of the votes cast by shareholders of XL-Bermuda present or represented by proxy and voting at a general meeting, which would mirror the current voting requirements under Irish law.

Board Recommendation

Our Board unanimously recommends that our shareholders vote “FOR” approval of the Bermuda Merger and Amalgamation Threshold Proposal.

Resolution

“THAT, upon the effectiveness of the Scheme of Arrangement bye-law 92 of XL Group Ltd as adopted by XL Group Ltd shall read as follows:

“92   Member Vote to Approve an Amalgamation or Merger

A resolution proposed for consideration at a general meeting to approve the amalgamation or merger of the Company with any other company shall require the affirmative vote of  (i) seventy-five percent (75%) of votes cast by Members present or represented by proxy and voting at such general meeting or (ii) if the Board has unanimously approved the proposal, a majority of the votes cast by Members present or represented by proxy and voting at such general meeting. In each case the quorum for such general meeting shall be as set out in Bye-Law 39.””

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PROPOSAL NUMBER ELEVEN: THE BERMUDA REPURCHASE RIGHT PROPOSAL

Holders of XL-Ireland ordinary shares are being asked to approve at the extraordinary general meeting, as prospective shareholders of XL-Bermuda, proposed bye-laws 11(1)(b), 11(1)(c) and 11(2) of XL-Bermuda that will provide XL-Bermuda the option to purchase for fair market value all or part of the XL-Bermuda common shares held by a XL-Bermuda shareholder if the Board of Directors in its sole discretion determines that ownership of such by any shareholders may result in adverse tax, regulatory or legal consequences to XL-Bermuda or its subsidiaries or any other shareholder to the extent the Board of Directors, in the reasonable exercise of its discretion, determines it is necessary to avoid or cure such adverse consequences. The full text of proposed bye-law 11 is set forth in Annex C.

Required Vote

In order to approve the Bermuda Repurchase Right Proposal, we must obtain the affirmative vote of not less than 75% of all XL-Ireland ordinary shares voted, in person or by proxy, at the extraordinary general meeting.

Please see “The Shareholder Meetings—Votes of Shareholders Required for Approval” for more information on the vote required.

Effect of Proposal

The ability of a company to repurchase shares to avoid adverse tax, regulatory or legal consequences to the company, any subsidiary or any shareholder is found in the organizational documents of many publicly traded Bermuda companies. The Bermuda Companies Act allows companies to have such a right, so long as the authorization is included in the company’s bye-laws.

XL-Ireland’s Board of Directors believes that it would be in the interests of shareholders to provide for such a right in XL-Bermuda’s bye-laws. XL-Bermuda, like XL-Ireland, will have subsidiaries and operations across the globe and so will be subject to a variety of regulatory, legal and tax regimes. In particular, XL-Ireland and its subsidiaries are subject to laws that may impose limitations on the direct or indirect ownership of their shares by individuals in certain jurisdictions. Bye-laws 11(1)(b), 11(1)(c) and 11(2) would provide flexibility for XL-Bermuda to avoid potential adverse tax, regulatory or legal consequences to XL-Bermuda or any subsidiary or shareholder thereof under such regimes if the Board of Directors, in its reasonable discretion, determines it necessary to avoid or cure such adverse consequences.

If the repurchase right is exercised, the shares will be repurchased by XL-Bermuda (or sold to a third party if XL-Bermuda assigns its purchase rights as provided in bye-law 11(1)(b), 11(1)(c) and 11(2)) at the Fair Market Value (as defined in the XL-Bermuda bye-laws). For so long as the NYSE is the primary securities exchange on which the XL-Bermuda common shares are traded, “Fair Market Value” will be the average closing sale price of the shares on the NYSE for the last five trading days immediately preceding the day on which notice of the repurchase of such shares is sent pursuant to the bye-laws. Section 11(2) of the bye-laws contains a restriction, waivable by the Board of Directors, on XL-Bermuda’s ability to exercise the rights under bye-law 11(1) if such transaction would result in any shareholder owning 10% or more of the outstanding shares or voting power of XL-Bermuda.

If the Bermuda Repurchase Right Proposal is not approved, then bye-law 11 of XL-Bermuda as set forth on Annex C will not include bye-laws 11(1)(b), 11(1)(c) and 11(2), which would be consistent with the current provision under the XL-Ireland articles of association.

Board Recommendation

Our Board unanimously recommends that our shareholders vote “FOR” approval of the Bermuda Repurchase Right Proposal.

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Resolution

“THAT, upon the effectiveness of the Scheme of Arrangement bye-law 11 of XL Group Ltd will read immediately prior to the effective time of the Scheme of Arrangement as follows:

“11   Exercise of power to purchase shares of or discontinue the Company

(1)

Purchase of Common Shares

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(a)

The Company shall have the power to purchase its own shares for cancellation or acquire them as Treasury Shares in accordance with the Act on such terms as the Board shall think fit. The Board may exercise all the powers of the Company to purchase or acquire all or any part of its own shares pursuant to the Act.

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(b)

Subject to the Act, if the Board in its sole discretion determines that ownership of shares of the Company by any Member may result in adverse tax, regulatory or legal consequences to the Company, any Subsidiary of the Company or any other Member, the Company will have the option, but not the obligation, to purchase all or part of the shares of the Company held by such Member (to the extent the Board, in the reasonable exercise of its discretion, determines it is necessary to avoid or cure such adverse consequences) for immediately available funds in an amount equal to the Fair Market Value of such shares on the Business Day immediately prior to the date the Company sends the Repurchase Notice referred to below (the “Repurchase Price”); provided, that the Board will use reasonable efforts to exercise this option equally among similarly situated Members (to the extent possible under the circumstances). In the event that the Company determines to purchase any such shares, the Company will be entitled to assign its purchase right to a third party or parties, including one or more of the other Members, with the consent of such assignee. Each Member shall be bound by the determination by the Company to purchase or assign its right to purchase such Member’s shares and, if so required by the Company, shall sell the number of shares of the Company that the Company requires it to sell.

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(c)

In the event that the Company or its assignee(s) determines to purchase any such shares, the Company shall provide each Member concerned with written notice of such determination (a “Repurchase Notice”) at least seven (7) calendar days prior to such purchase or such shorter period as each such Member may authorise, specifying the date on which any such shares are to be purchased and the Repurchase Price. The Company may revoke the Repurchase Notice at any time before it (or its assignee(s)) pays for the shares. Neither the Company nor its assignee(s) shall be obligated to give general notice to the Members of any intention to purchase or the conclusion of any purchase of shares of the Company. The closing of any such purchase of shares of the Company shall be no less than seven (7) calendar days after receipt of the Repurchase Notice by the Member, unless such Member agrees to a shorter period, and payment of the Repurchase Price by the Company or its assignee(s) shall be by wire transfer or certified check.

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(2)

Restrictions on repurchases of shares

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If the Company purchases any shares pursuant to Bye-law 11(b), it shall do so only in a manner that the Board believes the consummation of such transaction would not have the effect of increasing the number of the Controlled Shares of any person to 10% or any higher percentage of any class of voting Shares or of the total issued Shares or of the voting power of the Company. Notwithstanding the foregoing, the Board, in its sole discretion and by unanimous consent of all of the Directors then in office, may waive the provisions of this Bye-law 11(2).

(3)

Power to discontinue the Company

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The Board may exercise all the powers of the Company to discontinue the Company to a named country or jurisdiction outside Bermuda pursuant to Section 132G of the Act.””

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MATERIAL TAX CONSIDERATIONS RELATING TO THE TRANSACTION

This section contains a general discussion of certain material tax consequences to holders of XL-Ireland ordinary shares of  (1) the Transaction, (2) post-Transaction ownership and disposition of XL-Bermuda common shares and (3) post-Transaction operations of XL.

The discussion under the caption “—U.S. Federal Income Tax Considerations” addresses certain material U.S. federal income tax consequences to (1) XL-Ireland and XL-Bermuda of the Transaction and post-Transaction operations and (2) U.S. holders and non-U.S. holders (each as defined below) of exchanging XL-Ireland ordinary shares for XL-Bermuda common shares in the Transaction and owning and disposing of XL-Bermuda common shares received in the Transaction.

The discussion under the caption “—Bermuda Tax Considerations” addresses certain material Bermuda tax consequences to shareholders of the Transaction and of ownership and disposition of the XL-Bermuda common shares.

The discussion under the caption “—Irish Tax Considerations” addresses certain material Irish tax consequences of the Transaction for shareholders of the Transaction.

The discussion under the caption “—United Kingdom Tax Considerations” addresses certain material United Kingdom tax consequences to holders of XL-Ireland ordinary shares of exchanging XL-Ireland ordinary shares for XL-Bermuda common shares in the Transaction and owning and disposing of XL-Bermuda common shares received in the Transaction.

The below discussion applies to the shareholders who receive XL-Bermuda common shares through the Scheme of Arrangement. The discussion is not a substitute for an individual analysis of the tax consequences of the Transaction, post-Transaction ownership and disposition of XL-Bermuda common shares or post-Transaction operations of XL. You should consult your own tax advisors regarding the particular U.S. (federal, state and local), Bermuda, Irish, United Kingdom and other non-U.S. tax consequences of these matters in light of your particular situation.

U.S. Federal Income Tax Considerations

Scope of Discussion

This discussion generally does not address any aspects of U.S. taxation other than U.S. federal income taxation, is not a complete analysis or listing of all potential tax consequences of the Transaction or of holding and disposing of XL-Bermuda common shares and does not address all tax considerations that may be relevant to XL-Ireland shareholders. In particular, the below discussion addresses tax consequences to holders who hold their XL-Ireland ordinary shares, and who will hold their XL-Bermuda common shares, solely as capital assets, which generally means as property held for investment. The below discussion does not address any tax consequences to XL-Ireland or XL-Bermuda shareholders, as applicable, who, for U.S. federal tax purposes, are subject to special rules, such as:

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banks, financial institutions or insurance companies;

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tax-exempt entities;

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persons who hold shares as part of a straddle, hedge, integrated transaction or conversion transaction;

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persons who have been, but are no longer, citizens or residents of the United States;

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persons holding shares through a partnership or other fiscally transparent person;

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dealers or traders in securities, commodities or currencies;

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grantor trusts;

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persons subject to the alternative minimum tax;

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U.S. persons whose “functional currency” is not the U.S. dollar;

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regulated investment companies and real estate investment trusts;

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persons whose XL-Ireland ordinary shares constitute “Section 306 stock” (as defined in the U.S. Internal Revenue Code of 1986, as amended, which we refer to as the “ Code ”);

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persons who received the XL-Ireland ordinary shares through exercise of employee share options or otherwise as compensation or through a tax qualified retirement plan;

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persons who, at any time within the five-year period ending on the date of the Transaction, have owned (directly, indirectly or through attribution) 10% or more of the total combined voting power of all classes of shares of XL-Ireland entitled to vote; or

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persons who, immediately after the Transaction, will own (directly, indirectly or through attribution) 10% or more of the total combined voting power of all classes of shares of XL-Bermuda entitled to vote.

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This discussion is based on the Code, the Treasury regulations promulgated thereunder, which we refer to as the “ Treasury Regulations ,” judicial and administrative interpretations thereof and the Convention Between the Government of the United States of America and the Government of the United Kingdom of Great Britain and Northern Ireland (on behalf of the Government of Bermuda) relating to the Taxation of Insurance Enterprises and Mutual Assistance in Tax Matters, which we refer to as, the “ Bermuda-U.S. Tax Treaty ,” in each case as in effect and available on the date of this proxy statement. All of the foregoing are subject to change, which change could apply with retroactive effect and could affect the tax consequences described in this proxy statement. The discussion assumes, as is the case under current law, that XL-Ireland and XL-Bermuda are treated as foreign persons for U.S. federal tax purposes and will be so treated as of and after the Effective Time (except to the extent XL-Ireland liquidates as previously mentioned herein). Neither XL-Ireland nor XL-Bermuda will request a ruling from the United States Internal Revenue Service, which we refer to as the “ IRS ,” as to the U.S. federal tax consequences of the Transaction, post-Transaction ownership and disposition of XL-Bermuda common shares or any other matter. There can be no assurance that the IRS will not challenge any of the U.S. federal tax consequences described below.

For purposes of this discussion, a “ U.S. holder ” is a beneficial owner of XL-Ireland ordinary shares or, after the completion of the Transaction, XL-Bermuda common shares, that for U.S. federal income tax purposes is:

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an individual citizen or resident alien of the United States;

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a corporation or other entity taxable as a corporation created or organized in or under the laws of the United States or any state thereof or the District of Columbia;

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an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or

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a trust, if such trust validly has elected to be treated as a U.S. person for U.S. federal income tax purposes or if  (1) a U.S. court can exercise primary supervision over its administration and (2) one or more U.S. persons have the authority to control all of the substantial decisions of the trust.

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A “ non-U.S. holder ” is a beneficial owner of XL-Ireland ordinary shares or, after the completion of the Transaction, XL-Bermuda common shares, other than a U.S. holder or an entity or arrangement treated as a partnership for U.S. federal income tax purposes, which we refer to as a “ Partnership .” If a Partnership is a beneficial owner of XL-Ireland ordinary shares or XL-Bermuda common shares, the tax treatment of a partner in that Partnership will generally depend on the status of the partner and the activities of the Partnership. Holders of XL-Ireland ordinary shares or XL-Bermuda common shares that are Partnerships and partners in such Partnerships should consult their tax advisors regarding the U.S. federal income tax consequences to them of the Transaction and the ownership and disposition of XL-Bermuda common shares. For purposes of this tax discussion, “holder” or “shareholder” means either a U.S. holder or a non-U.S. holder or both, as the context may require.

Material U.S. Tax Consequences of the Transaction

XL-Ireland and XL-Bermuda.    Neither XL-Ireland nor XL-Bermuda should be subject to U.S. federal income tax as a result of the Transaction. Taking into account the actual liquidation of XL-Ireland, the Transaction should qualify as a Section 368(a)(1)(F) reorganization and the below discussion describes the general consequences to U.S. holders and non-U.S. holders of the Transaction qualifying as a Section 368(a)(1)(F) reorganization.

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U.S. Holders.    A U.S. holder who receives XL-Bermuda common shares in the Transaction should not recognize any gain or loss solely as a result of the Transaction. The tax basis of the XL-Bermuda common shares received in exchange for XL-Ireland ordinary shares will be equal to the basis of the XL-Ireland ordinary shares exchanged. U.S. holders whose tax basis in their XL-Ireland ordinary shares exceeds the fair market value of such shares at the time of the Transaction will carry over the tax basis (and thus the inherent “loss”) of their XL-Ireland ordinary shares to their XL-Bermuda common shares. Thus, subject to any subsequent changes in the fair market value of the XL-Bermuda common shares, any loss will be preserved. The holding period for the XL-Bermuda common shares received in the Transaction will include the holding period for the XL-Ireland ordinary shares surrendered in the Transaction. Under applicable Treasury Regulations, a U.S. holder should not be required to file a “gain recognition agreement,” with the IRS solely as a result of the Transaction, even if such U.S. holder owns five percent or more of the XL-Bermuda common shares immediately after the Transaction. U.S. holders who hold their XL-Ireland ordinary shares with differing tax bases or holding periods are urged to consult their tax advisor with regard to identifying the tax bases and holding periods of the particular XL-Bermuda common shares received in the Transaction.

Non-U.S. Holders.    A non-U.S. holder generally will not be subject to U.S. federal income or withholding tax on gain realized, if any, on the receipt of XL-Bermuda common shares in exchange for their XL-Ireland ordinary shares.

Material U.S. Tax Considerations Post-Transaction to XL

U.S. Income and Branch Profits Tax.    A foreign corporation deemed to be engaged in the conduct of a trade or business in the U.S. will generally be subject to U.S. federal income tax, as well as a branch profits tax in certain circumstances, on its income which is treated as effectively connected with the conduct of that trade or business unless the corporation is entitled to relief under an applicable income tax treaty, as discussed below. Such tax, if imposed, would be based on effectively connected income computed in a manner generally analogous to that applied to the income of a U.S. corporation, except that a foreign corporation is entitled to deductions and credits only if it timely files a U.S. federal income tax return. Whether a trade or business is being conducted in the United States is an inherently factual determination. Because the Code, Treasury Regulations and court decisions fail to identify definitively activities that constitute being engaged in a trade or business in the United States, we cannot assure you that the IRS will not contend successfully that XL-Bermuda and/or certain of its non-U.S. subsidiaries are or will be engaged in a trade or business in the United States. XL-Ireland believes it and its non-U.S. subsidiaries have operated, and XL-Bermuda and its non-U.S. subsidiaries intend to continue to operate, in such a manner that they will not be considered to be conducting a trade or business within the United States for purposes of U.S. federal income taxation, except with regard to XL’s business conducted through Lloyd’s of London, which we refer to as, the “ Lloyd’s Business ,” which is governed by a negotiated closing agreement between the IRS and Lloyd’s of London, pursuant to which certain of XL’s income related to the Lloyd’s Business is subject to U.S. tax. XL-Ireland and certain of its non-U.S. subsidiaries have, and XL-Bermuda and certain of its non-U.S. subsidiaries intend, to file protective U.S. federal income tax returns on a timely basis in order to preserve the right to claim income tax deductions and credits if it is ever determined that they are subject to U.S. federal income tax.

A corporation resident in Bermuda generally will be entitled to the benefits of the Bermuda-U.S. Tax Treaty if the corporation: (1) is a “resident” of Bermuda as defined under the “Residence” article of the Bermuda-U.S. Tax Treaty, and (2) qualifies under the “limitation on benefits” provisions of the Bermuda-U.S. Tax Treaty. XL-Bermuda expects to be entitled to the benefits of the Bermuda-U.S. Tax Treaty applicable to business profit of an enterprise of insurance. Assuming XL-Bermuda is entitled to benefits under the Bermuda-U.S. Tax Treaty, it will not be subject to U.S. federal income tax on any business income found to be effectively connected with a U.S. insurance trade or business unless that insurance trade or business is conducted through a permanent establishment in the United States, and then only on income attributable to that permanent establishment. Whether business is being conducted in the United States through a permanent establishment is an inherently factual determination. XL-Bermuda intends to continue to conduct its activities so as not to have a permanent establishment in the United States, although we cannot assure you that it will achieve this result.

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Some of XL-Bermuda’s non-U.S. subsidiaries may be entitled to the benefits of a tax treaty with the United States and the country where those subsidiaries are resident. In those cases, the non-U.S. subsidiaries may have additional protections against U.S. taxation.

Foreign corporations also are subject to U.S. withholding tax at a rate of 30% of the gross amount of certain “fixed or determinable annual or periodical gains, profits and income” derived from sources within the United States (such as dividends and certain interest on investments), to the extent such amounts are not effectively connected with the foreign corporation’s conduct of a trade or business in the United States. The tax rate is subject to reduction by applicable treaties.

U.S. subsidiaries of XL-Bermuda are and will continue to be subject to taxation in the United States on their worldwide income at regular corporate rates.

Sections 482 and 845 of the Code give the IRS broad authority to reallocate income, deductions and credits from transactions (in the case of Section 845 of the Code, reinsurance transactions) between related parties. XL-Ireland believes that all agreements it or its subsidiaries entered into, and XL-Bermuda believes that all agreements it or its subsidiaries intend to enter into, whether with related or unrelated parties, are and will remain at arm’s-length. Nevertheless, no assurance can be given that the IRS will not assert its authority under Sections 482 or 845 of the Code in a manner that would increase the tax liability of XL-Bermuda’s U.S. subsidiaries.

The United States also imposes an excise tax on insurance and reinsurance premiums paid to foreign insurers or reinsurers with respect to risks located in the United States. The rate of tax applicable to premiums paid to XL-Bermuda’s Bermuda subsidiaries is 4% for direct, non-life insurance premiums and 1% for reinsurance and direct, life insurance premiums.

Post-Transaction Consequences to U.S. Holders

Receiving Distributions on XL-Bermuda Common Shares.    Subject to the discussion below under “—Special Rules—Controlled Foreign Corporations,” “—Special Rules—Related Person Insurance Income” and “—Special Rules—Passive Foreign Investment Company Provisions,” U.S. holders will be required to include in gross income the gross amount of any distribution received on the XL-Bermuda common shares to the extent that the distribution is paid out of XL-Bermuda’s current or accumulated earnings and profits as determined for U.S. federal income tax purposes, which we refer to as a dividend. With respect to non-corporate U.S. holders, certain dividends received from a qualified foreign corporation will be subject to U.S. federal income tax at a reduced rate. As long as the XL-Bermuda common shares are listed on the NYSE (or certain other stock exchanges) and XL-Bermuda is not a passive foreign investment company, XL-Bermuda will be treated as a qualified foreign corporation for this purpose. This reduced rate will not be available in all situations, and U.S. holders should consult their own tax advisor regarding the application of the relevant rules to their particular circumstances. Dividends from XL-Bermuda will not be eligible for the dividends-received deduction under the Code, which is generally allowed to U.S. corporate shareholders on dividends received from certain domestic and foreign corporations.

Distributions in excess of the current and accumulated earnings and profits of XL-Bermuda will be applied first to reduce the U.S. holder’s tax basis in its XL-Bermuda common shares, and thereafter will constitute gain from the sale or exchange of such shares. In the case of a non-corporate U.S. holder, such “gain” is subject to a reduced U.S. federal income tax rate if the holder’s holding period for such XL-Bermuda common shares exceeds 12 months. Special rules not here described may apply to U.S. holders who do not have a uniform tax basis and holding period in all of their XL-Bermuda common shares, and any such U.S. holders are urged to consult their own tax advisor with regard to such rules.

Dispositions of XL-Bermuda Common Shares.    Subject to the discussion below under “—Repurchase of Common Shares by XL-Bermuda,” “—Special Rules—Related Person Insurance Income” and “—Special Rules—Passive Foreign Investment Company Provisions,” U.S. holders of XL-Bermuda common shares generally should recognize capital gain or loss for U.S. federal income tax purposes on the sale, exchange or other taxable disposition of XL-Bermuda common shares in an amount equal to the difference between the amount realized from such sale, exchange or other taxable disposition and the U.S.

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holders’ tax basis in such shares. In the case of a non-corporate U.S. holder, such gain may be subject to a reduced U.S. federal income tax rate if the holder’s holding period for such XL-Bermuda common shares exceeds 12 months. The deductibility of capital losses is subject to limitations.

Repurchase of Common Shares by XL-Bermuda.    A repurchase of ordinary shares by XL-Bermuda generally will be treated as a dividend to the extent of XL-Bermuda’s current and accumulated earnings and profits unless it satisfies one of the alternative tests under Section 302(b) of the Code to be treated as a sale or exchange, subject to the potential application of the CFC, RPII and PFIC rules as discussed in “—Post-Transaction—Special Rules” below. The tests for determining whether a repurchase of shares will qualify as a sale or exchange under Section 302(b) of the Code include whether a repurchase (i) is “substantially disproportionate,” (ii) constitutes a “complete termination of the holder’s stock interest” in XL-Bermuda or (iii) is “not essentially equivalent to a dividend,” each within the meaning of Section 302(b) of the Code. In determining whether any of the tests under Section 302(b) of the Code are met, including the tests mentioned in the preceding sentence, shares considered to be owned by the U.S. holder under certain constructive ownership rules, as well as shares actually owned, generally must be taken into account. Because the determination of whether any of the alternative tests of Section 302(b) of the Code is satisfied with respect to a particular U.S. holder will depend on the particular facts and circumstances at the time the determination is made, U.S. holders are advised to consult their own tax advisors to determine their tax treatment in light of their own particular circumstances.

Post-Transaction Consequences to Non-U.S. Holders

Consequences of Owning XL-Bermuda Common Shares.    A non-U.S. holder generally will not be subject to U.S. federal income or withholding tax on dividends from XL-Bermuda unless: (1) the dividends are effectively connected with the holder’s conduct of a trade or business in the United States (and, if a tax treaty applies, the dividends are attributable to a permanent establishment or fixed place of business maintained by the non-U.S. holder in the United States); or (2) such non-U.S. holder is subject to backup withholding.

Consequences of Disposing of XL-Bermuda Common Shares.    A non-U.S. holder generally will not be subject to U.S. federal income or withholding tax on any gain recognized on the sale, exchange or other disposition of XL-Bermuda common shares unless: (1) such gain is effectively connected with the conduct by the non-U.S. holder of a trade or business within the United States (and, if a tax treaty applies, is attributable to a permanent establishment or fixed place of business maintained by the non-U.S. holder in the United States); (2) in the case of certain capital gains recognized by a non-U.S. holder that is an individual, such individual is present in the United States for 183 days or more during the taxable year in which the capital gain is recognized and certain other conditions are met; or (3) the non-U.S. holder is subject to backup withholding.

Post-Transaction—Special Rules

Classification of XL-Bermuda or its Non-U.S. Subsidiaries as Controlled Foreign Corporations.    In general, a foreign corporation is considered a controlled foreign corporation, which we refer to as “ CFC ,” if 10% U.S. Shareholders own (directly, indirectly through non-U.S. entities or by application of the constructive ownership rules of Section 958(b) of the Code (i.e., “ constructively ”)) more than 50% of the total combined voting power of all classes of voting stock of such foreign corporation, or more than 50% of the total value of all stock of such corporation. A “ 10% U.S. Shareholder ” is a U.S. Person (as defined in Section 957(c) of the Code) who owns (directly, indirectly through non-U.S. entities or constructively) at least 10% of the total combined voting power of all classes of stock entitled to vote of the foreign corporation. Each 10% U.S. Shareholder of a foreign corporation that is a CFC for an uninterrupted period of 30 days or more during a taxable year and owns shares in that CFC directly or indirectly through foreign entities on the last day of the foreign corporation’s taxable year on which it is a CFC must include in its gross income for U.S. federal income tax purposes its pro rata share (based on its actual direct and indirect, through foreign entities, ownership) of the CFC’s “subpart F income,” even if the subpart F income is not distributed. Subpart F income generally includes, among other things, investment income such as dividends, interest and capital gains, and income from insuring risks located outside the insurer’s country of incorporation. For purposes of taking into account insurance income, a CFC also includes a foreign

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corporation in which more than 25% of the total combined voting power of all classes of stock (or more than 25% of the total value of the stock) is owned by 10% U.S. Shareholders on any day during the taxable year of such corporation, if certain premium tests are met. It is expected that all of the income of XL-Bermuda’s insurance and reinsurance subsidiaries in Bermuda, and a portion of the income of XL-Bermuda’s other non-U.S. insurance and reinsurance subsidiaries, would be considered subpart F income if such subsidiary were to be considered a CFC. In addition, a non-U.S. insurance subsidiary of XL-Bermuda may be considered a CFC under the RPII rules discussed below.

Due to the dispersion of XL-Bermuda’s share ownership among holders, the provisions in its bye-laws that impose limitations on the concentration of voting power of its voting shares, and other factors, XL-Bermuda believes that no U.S. Person that owns ordinary shares in XL-Bermuda directly, indirectly through foreign entities or constructively should be subject to treatment after the Transaction as a 10% U.S. Shareholder of a CFC. These provisions of XL-Bermuda’s bye-laws are described in “Description of XL Group Ltd Share Capital.” We cannot assure you, however, that the IRS will not challenge the effectiveness of these provisions for purposes of preventing CFC and 10% U.S. Shareholder status and that a court will not sustain such challenge.

Related Person Insurance Income

Generally.    The CFC rules described above also apply (with certain modifications) to certain insurance companies that earn related person insurance income, which we refer to as “ RPII .” For purposes of applying the CFC rules to foreign corporations that earn RPII, a foreign corporation will be treated as a CFC if RPII Shareholders collectively own (directly, indirectly through foreign entities or by application of the constructive ownership rules) 25% or more of the stock of the corporation by vote or value. The term “ RPII Shareholder ” means any U.S. Person (as defined in Section 957(c) of the Code) who owns, directly or indirectly through foreign entities, any amount (rather than stock possessing 10% or more of the total combined voting power) of the foreign corporation’s stock.

RPII is defined as any “insurance income” attributable to policies of insurance or reinsurance with respect to which the person (directly or indirectly) insured is a “RPII Shareholder” of the foreign corporation or a “related person” to such RPII Shareholder. In general, and subject to certain limitations, “insurance income” is income (including premium and investment income) attributable to the issuing of any insurance or reinsurance contract which would be taxed under the provisions of the Code relating to insurance companies if the income were the income of a domestic insurance company.

For purposes of the RPII rules, “related person” means someone who controls or is controlled by the RPII Shareholder or someone who is controlled by the same person or persons that control the RPII Shareholder. “Control” is measured by either more than 50% in value or more than 50% in voting power of stock, applying constructive ownership principles. A corporation’s pension plan is ordinarily not a “related person” with respect to the corporation unless the pension plan owns, directly or indirectly through the application of constructive ownership rules, more than 50%, measured by vote or value, of the stock of the corporation. In the case of a partnership, trust or estate, control means the ownership, directly or indirectly, of more than 50% (by value) of the beneficial interests in such partnership, estate or trust.

If none of the exceptions described below applies, each U.S. Person who owns ordinary shares in XL-Bermuda (and therefore, indirectly in its non-U.S. insurance subsidiaries) on the last day of the tax year in which a non-U.S. subsidiary is a CFC would be required to include in its gross income for U.S. federal income tax purposes its share of RPII of that non-U.S. subsidiary for the U.S. Person’s taxable year that includes the end of that non-U.S. subsidiary’s taxable year. This inclusion generally would be determined as if such RPII were distributed proportionately only to such U.S. Persons holding shares at that date. The inclusion would be limited to the current-year earnings and profits of that non-U.S. subsidiary reduced by the shareholder’s pro rata share, if any, of certain prior-year deficits in earnings and profits. Even if one or more of the exceptions to the RPII rules applies, the general CFC rules described earlier may still apply to require 10% U.S. Shareholders to include in income their pro rata share of RPII, among other things.

RPII Exceptions.    The special RPII rules described above will not apply to a non-U.S. subsidiary if (1) direct or indirect insureds and persons related to such insureds, whether or not U.S. Persons, own, at all times during that non-U.S. subsidiary’s taxable year directly or indirectly, less than 20% of the voting power

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and less than 20% of the value of the stock of that non-U.S. subsidiary, which we refer to as, the “ 20% Ownership Exception ,” (2) RPII, determined on a gross basis, is less than 20% of that non-U.S. subsidiary’s gross insurance income for the taxable year, which we refer to as, the “ 20% Gross Income Exception ,” (3) that non-U.S. subsidiary elects to be taxed on its RPII as if the RPII were effectively connected with the conduct of a U.S. trade or business and to waive all treaty benefits with respect to RPII and meets certain other requirements or (4) that non-U.S. subsidiary elects to be treated as a U.S. corporation for U.S. tax purposes. XL-Bermuda expects its non-U.S. subsidiaries will operate in a manner such that they will qualify for the 20% Gross Income Exception and the 20% Ownership Exception; no assurances, however, can be provided that XL-Bermuda’s non-U.S. subsidiaries will operate in such manner successfully or that the IRS will not make any assertions to the contrary.

Computation of RPII.    In order to determine how much RPII each of its non-U.S. insurance subsidiaries has earned in each taxable year, XL-Ireland may obtain, and XL-Bermuda may obtain and rely upon information from its insureds and reinsureds to determine whether any of the insureds, reinsureds or other persons related to such insureds or reinsureds own XL-Bermuda shares and are U.S. Persons. XL-Bermuda may not be able to determine whether any of the underlying insureds of the insurance companies to which its non-U.S. subsidiaries provides insurance or reinsurance are RPII shareholders or related persons to such shareholders. Consequently, XL-Bermuda may not be able to determine accurately the gross amount of RPII earned by its non-U.S. subsidiaries in a given taxable year. XL-Bermuda may also seek information from its shareholders to determine whether direct or indirect owners of XL-Bermuda’s common shares at the end of the year are U.S. Persons so that the RPII may be determined and apportioned among such persons. To the extent XL-Bermuda is unable to determine whether a direct or indirect owner of shares is a U.S. Person, XL-Bermuda may assume that such owner is not a U.S. Person, thereby increasing the per share RPII amount for all shareholders identified as U.S. Persons.

Uncertainty as to Application of RPII.    Treasury Regulations interpreting the RPII provisions of the Code exist only in proposed form. It is not certain whether these Treasury Regulations will be adopted in their proposed form or what changes might ultimately be made or whether any such changes, as well as any interpretation or application of the RPII rules by the IRS, the courts or otherwise, might have retroactive effect. Accordingly, the meaning of the RPII provisions and their application to XL-Bermuda is uncertain. These provisions include the grant of authority to the U.S. Treasury to prescribe “such regulations as may be necessary to carry out the purposes of this subsection, including . . . regulations preventing the avoidance of this subsection through cross insurance arrangements or otherwise.” In addition, we cannot assure you that the IRS will not challenge any determinations by XL-Bermuda as to the amount, if any, of RPII that should be includible in income or that the amounts of the RPII inclusions will not be subject to adjustment based upon subsequent IRS examination. U.S. holders should consult their tax advisors as to the effects of these uncertainties.

Basis Adjustments for RPII.    A U.S. shareholder’s tax basis in its XL-Bermuda common shares will be increased by the amount of any subpart F income that the shareholder includes in income, including any RPII included in income by an RPII shareholder. Any distributions made by XL-Bermuda out of previously taxed subpart F income, including RPII income, will be exempt from further U.S. income tax in the hands of the U.S. shareholder. The U.S. shareholder’s tax basis in its XL-Bermuda common shares will be reduced by the amount of any distributions that are excluded from income under this rule.

Information Reporting.    Under certain circumstances, U.S. Persons owning stock in a foreign corporation are required to file IRS Form 5471 with their U.S. federal income tax returns. Generally, information reporting on IRS Form 5471 is required with respect to (1) a person who is treated as an RPII Shareholder, and (2) certain 10% U.S. Shareholders. For any taxable year in which XL-Bermuda determines that the 20% Gross Income Exception and the 20% Ownership Exception do not apply, XL-Bermuda intends to mail to all U.S. Persons registered as holders of its ordinary shares IRS Form 5471, completed with information from XL-Bermuda, for attachment to the U.S. federal income tax returns of such shareholders.

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Dispositions of Ordinary Shares and Code Section 1248.    Section 1248 of the Code provides that if a U.S. Person sells or exchanges stock in a foreign corporation and such person owned directly, indirectly through certain foreign entities or constructively 10% or more of the voting power of the corporation at any time during the five-year period ending on the date of disposition when the corporation was a CFC, any gain from the sale or exchange of the shares will be treated as a dividend to the extent of the CFC’s earnings and profits (determined under U.S. federal income tax principles) during the period that the shareholder held the shares and while the corporation was a CFC (with certain adjustments). A 10% U.S. Shareholder may in certain circumstances be required to report a disposition of shares of a CFC by attaching IRS Form 5471 to the U.S. federal income tax or information return that it would normally file for the taxable year in which the disposition occurs.

Section 1248 of the Code also applies to the sale or exchange of shares in a foreign corporation if the foreign corporation would be treated as a CFC for RPII purposes and would be taxed as an insurance company if it were a domestic corporation, regardless of whether the shareholder is a 10% U.S. Shareholder or whether the 20% Gross Income Exception or the 20% Ownership Exception applies. Existing Treasury Regulations do not address whether Section 1248 of the Code would apply if a foreign corporation is not a CFC but the foreign corporation has a subsidiary that is a CFC or that would be taxed as an insurance company if it were a domestic corporation. U.S. holders should consult their tax advisors regarding the effects of these rules on a disposition of shares.

Passive Foreign Investment Company Provisions

The treatment of U.S. holders of XL-Bermuda common shares in some cases could be materially different from that described above if, at any relevant time, XL-Ireland or XL-Bermuda were a passive foreign investment company, which we refer to as a “ PFIC .”

For U.S. tax purposes, a foreign corporation will generally be classified as a PFIC for any taxable year if either (1) 75% or more of its gross income is “passive income” (as defined for U.S. federal income tax purposes) or (2) the average percentage of assets held by such corporation which produce passive income or which are held for the production of passive income is at least 50%. For purposes of applying the tests in the preceding sentence, a look-through rule applies and the foreign corporation is deemed to own its proportionate share of the assets, and to receive directly the proportionate share of the income, of any other corporation of which the foreign corporation owns, directly or indirectly, at least 25% by value of the stock. In addition, the PFIC statutory provisions also contain an express exception for income derived in the active conduct of an insurance business by a corporation that is predominantly engaged in an insurance business. This exception is intended to ensure that income derived by a bona fide insurance company is not treated as passive income, except to the extent such income is attributable to financial reserves in excess of the reasonable needs of the insurance business.

XL believes that it is not a PFIC, and has not been a PFIC in any prior taxable year. XL further believes that XL-Bermuda will not be a PFIC following the Transaction. The tests for determining PFIC status are applied annually and it is difficult to accurately predict future income and assets relevant to this determination. In addition, there are currently no Treasury Regulations regarding the application of the PFIC provisions to an insurance company and Treasury Regulations or pronouncements interpreting or clarifying these rules may be forthcoming. Accordingly, no assurance can be given that the IRS would not challenge this position or that a court would not sustain such challenge.

If XL-Bermuda should determine in the future that it is a PFIC, it will endeavor to so notify U.S. holders of XL-Bermuda common shares, although there can be no assurance that it will be able to do so in a timely and complete manner.

U.S. holders of XL-Bermuda common shares should consult their own tax advisor about the PFIC rules, including the availability of certain elections.

Information Reporting and Backup Withholding

U.S. holders that own at least five percent (of total voting power or total value) of XL-Ireland immediately before the Transaction will be required to file a Section 368(a) statement. Other information reporting could also apply to the Transaction. Shareholders of XL-Ireland should consult their own tax

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advisor about the information reporting requirements that could be applicable to the exchange of XL-Ireland ordinary shares for XL-Bermuda common shares in the Transaction.

Dividends on XL-Bermuda common shares paid within the United States or through certain U.S.-related intermediaries are subject to information reporting unless the holder is a corporation, other exempt recipient or non-U.S. holder who establishes such foreign status. Dividends subject to information reporting are subject to backup withholding (currently at a rate of 28%) unless the payee furnishes the payor with a taxpayer identification number and satisfies certain certification requirements. Information reporting requirements and backup withholding may also apply to the payment of proceeds from a sale of XL-Bermuda common shares within the United States or through certain U.S.-related intermediaries. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against the holder’s U.S. federal income tax liability, provided that the holder furnishes certain required information to the IRS on a timely basis.

If a U.S. holder of XL-Bermuda common shares does not provide us (or our paying agent) with the holder’s correct taxpayer identification number or other required information, the holder may be subject to penalties imposed by the IRS.

In order for a non-U.S. holder to not be subject to backup withholding tax on a subsequent disposition of XL-Bermuda common shares, or dividends paid on those shares, a non-U.S. holder may be required to provide a taxpayer identification number, certify the holder’s foreign status or otherwise establish an exemption.

Holders should consult their tax advisor regarding the application of information reporting and backup withholding to their particular situations.

THE U.S. FEDERAL INCOME TAX CONSIDERATIONS SUMMARIZED ABOVE ARE FOR GENERAL INFORMATION ONLY. EACH XL-IRELAND SHAREHOLDER SHOULD CONSULT HIS OR HER TAX ADVISOR AS TO THE PARTICULAR CONSEQUENCES THAT MAY APPLY TO SUCH SHAREHOLDER.

Bermuda Tax Considerations

Taxation of XL-Bermuda

At the date of this proxy statement, there is no Bermuda income, corporation or profits tax, withholding tax, capital gains tax, capital transfer tax, estate duty or inheritance tax payable by XL-Bermuda. XL-Bermuda will not be subject to stamp duty on the issue, transfer or redemption of the XL-Bermuda common shares.

XL-Bermuda has received an undertaking from the Minister of Finance of Bermuda under the Exempted Undertakings Tax Protection Act, 1966, as amended, that, in the event that there is enacted in Bermuda any legislation imposing (i) tax computed on profits or income, (ii) tax computed on any capital assets, gain or appreciation or (iii) any tax in the nature of estate duty or inheritance tax, such tax shall not until March 31, 2035 be applicable to XL-Bermuda or to any of its operations, XL-Bermuda common shares, debentures or other obligations except insofar as such tax applies to persons ordinarily resident in Bermuda and holding such XL-Bermuda common shares, debentures or other obligations of XL-Bermuda or any land leased or let to XL-Bermuda.

As an exempted company, XL-Bermuda will be liable to pay the Bermuda Government an annual government fee, which is based on the assessable capital of XL-Bermuda (i.e. the total of XL-Bermuda’s authorized share capital and the amount, if any, standing to the credit of XL-Bermuda’s share premium account).

Taxation of holders of XL-Bermuda common shares

At the date of this proxy statement, there is no Bermuda income, corporation or profits tax, withholding tax, capital gains tax, capital transfer tax, estate duty or inheritance tax payable by the holders of XL-Bermuda common shares, other than holders of XL-Bermuda common shares ordinarily resident in Bermuda.

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Prospective purchasers should consult legal advisors in the countries of their citizenship, residence and domicile to determine the possible tax or other consequences of purchasing, holding and redeeming XL-Bermuda common shares under the laws of their respective jurisdictions.

Irish Tax Considerations

Scope of Discussion

The following discussion describes the material Irish tax consequences of the Scheme of Arrangement expected to be applicable to certain beneficial owners of XL-Ireland ordinary shares. The summary is based upon Irish tax laws and the practice of the Irish Revenue Commissioners in effect on the date of this proxy statement. Changes in law and/or administrative practice may result in alteration of the tax considerations described below. The summary does not constitute tax advice and is intended only as a general guide. Also it is not exhaustive and shareholders should consult their own tax advisors about the Irish tax consequences (and tax consequences under the laws of other relevant jurisdictions) of the transactions and of the acquisition, ownership and disposal of XL-Ireland ordinary shares. The summary applies only to shareholders who will own XL-Ireland ordinary shares as capital assets and does not apply to other categories of shareholders, such as dealers in securities, trustees, insurance companies, collective investment schemes, pension funds or shareholders who have, or who are deemed to have, acquired their XL-Ireland ordinary shares by virtue of an Irish office or employment (performed or carried on in Ireland).

Taxation of holders of XL-Ireland ordinary shares

The Scheme of Arrangement should not be treated as involving a distribution subject to Irish tax as income.

Irish Tax on Chargeable Gains

Holders of XL-Ireland ordinary shares who are neither resident nor ordinarily resident in Ireland for Irish tax purposes and do not hold their shares in connection with a trade carried on by such shareholders through an Irish branch or agency should not be within the charge to Irish capital gains tax or corporation tax on chargeable gains (“ CGT ”) on the disposal of their XL-Ireland ordinary shares, or on the receipt of XL-Bermuda common shares pursuant to the Scheme of Arrangement.

Holders of XL-Ireland ordinary shares that are resident or ordinarily resident in Ireland for Irish tax purposes or that hold their XL-Ireland ordinary shares in connection with a trade carried on by such persons through an Irish branch or agency will, subject to the availability of any exemptions and reliefs, generally be within the charge to CGT in relation to the disposal of XL-Ireland ordinary shares under the Scheme of Arrangement.

However, for the purposes of Irish CGT (i) the receipt of XL-Bermuda common shares pursuant to the Scheme of Arrangement should be treated as a reorganization of XL-Ireland’s share capital and (ii) on the basis that the Scheme of Arrangement is effected for bona fide commercial reasons and does not form part of any arrangement or scheme of which the main purpose or one of the main purposes is the avoidance of liability to tax, the effect should be that the holding of XL-Bermuda common shares received pursuant to the Scheme of Arrangement should be treated as the same asset, acquired at the same time and for the same consideration, as the holding of XL-Ireland ordinary shares held by that shareholder immediately prior to the Scheme of Arrangement.

Stamp Duty

The rate of stamp duty (where applicable) on transfers of shares of Irish incorporated companies is 1% of the price paid or the market value of the shares acquired, whichever is greater. Where Irish stamp duty arises it is generally a liability of the transferee.

The documents effecting the Scheme of Arrangement should not attract Irish stamp duty.

United Kingdom Tax Considerations

Scope of discussion

The following statements are only a general guide to the material United Kingdom (“ UK ”) tax consequences to holders of XL-Ireland ordinary shares of exchanging XL-Ireland ordinary shares for

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XL-Bermuda common shares in the Transaction and owning and disposing of XL-Bermuda common shares received in the Transaction. They do not constitute legal or tax advice. They are based on UK tax legislation as applied in England and published practice of Her Majesty’s Revenue & Customs (“ HMRC ”) in force and effect at the date of this document, both of which are subject to change, possibly with retrospective effect.

These statements relate solely to holders of XL-Ireland ordinary shares or, after completion of the Transaction, XL-Bermuda common shares who are resident in the UK (and, in the case of individuals, resident and domiciled in the UK) for UK tax purposes and who are not resident for tax purposes in any other jurisdiction (“ UK Holders ”), unless expressly provided otherwise.

These statements relate solely to UK Holders who are the absolute beneficial owners of their XL-Ireland ordinary shares and XL-Bermuda common shares, who are beneficially entitled to the dividends thereon in circumstances where the dividends paid are regarded for UK tax purposes as that person’s own income (and not the income of some other person) and receive dividends otherwise than through an Individual Savings Account or Self-Invested Personal Pension, who hold their XL-Ireland ordinary shares and XL-Bermuda common shares as an investment and not as trading stock, who have not (and are not deemed to have) acquired their XL-Ireland ordinary shares and XL-Bermuda common shares by reason of an office or employment and to whom the spilt year treatment does not apply.

The statements below are not exhaustive and may not apply to certain classes of UK Holders such as (but not limited to) dealers in securities, broker dealers, insurance companies, collective investment schemes, tax exempt organizations, financial institutions, persons who hold their XL-Ireland ordinary shares or XL-Bermuda common shares as part of hedging or conversion transactions, persons subject to the remittance basis, persons connected with XL-Ireland or XL-Bermuda, persons who hold investments in any HMRC-approved arrangements or schemes, or persons who control or hold (either alone or together with one or more associated or connected persons) directly or indirectly, 10% or more of the shares and/or voting power of XL-Ireland or XL-Bermuda.

Material UK Tax Consequences of the Scheme of Arrangement to UK Holders

Taxation of income.    The Scheme of Arrangement should not be treated as involving a distribution subject to UK tax as income.

Taxation of Chargeable Gains .   It is expected that for the purposes of UK taxation of chargeable gains (“ CGT ”) the Scheme of Arrangement will be a scheme of reconstruction.

UK Holders that, either alone or together with persons connected with them, do not hold more than 5% of the shares in or debentures of XL-Ireland, should not be treated as having made a disposal of their XL-Ireland ordinary shares for CGT purposes. Instead, the “roll-over” treatment is expected to apply such that the XL-Bermuda common shares should be treated as the same asset as the XL-Ireland ordinary shares for CGT purposes, acquired at the same time and for the same consideration as those XL-Ireland ordinary shares.

UK Holders that, either alone or together with persons connected with them, hold more than 5% of the shares in or debenture of XL-Ireland, will be eligible for the “roll-over” treatment described above only if the Scheme of Arrangement is effected for bona fide commercial reasons and does not form part of a scheme or arrangements of which the main purpose, or one of the main purposes, is avoidance of liability to UK capital gains tax or corporation tax. If these conditions are not met, then such UK Holder will be treated as receiving XL-Bermuda common shares in consideration for the cancellation of the XL-Ireland ordinary shares and as having made a disposal of the XL-Ireland ordinary shares which may, depending on individual circumstances, give rise to a chargeable gain or allowable loss for CGT purposes. XL-Ireland has not applied to HMRC for clearance under Section 138 of the Taxation of Chargeable Gains Act 1992 that the Scheme of Arrangement is effected for bona fide commercial reasons and does not form part of such a scheme or arrangement. UK Holders who are in any doubt about their position should consult their own tax advisors.

Transactions in Securities .   UK Holders should note that clearances have not been sought under Section 748 of the Corporation Tax Act 2010 and Section 701 of the Income Tax Act 2007 that HMRC will not issue a counter-acting tax assessment under the transaction in securities rules in Sections 731 et seq. of

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the Corporation Tax Act 2010 and Sections 682 et seq. of the Income Tax Act 2007 in relation to the Scheme of Arrangement. UK Holders who are in any doubt about their position should consult their own tax advisors.

UK Stamp Duty and Stamp Duty Reserve Tax (“ SDRT ”) .   No UK stamp duty or SDRT should be payable by UK Holders as a result of the cancellation of XL-Ireland ordinary shares and the issue of XL-Bermuda common shares under the Scheme of Arrangement.

Taxation of Dividends

Individuals .   UK Holders who are within the charge to UK income tax will generally be subject to UK income tax on dividends on the XL-Bermuda common shares. Such individuals should generally be entitled to a non-payable tax credit equal to one-ninth of the amount of the dividend declared. For such UK Holders that are eligible for this tax credit, the credit will have the effect of reducing the effective rate of UK income tax on the amount of the dividend declared to zero (for individuals who are subject to tax at the basic rate), 25% (for individuals subject to tax at the higher rate) and 30.56% (for individuals subject to tax at the additional rate).

Following announcements in the July 2015 Budget and the 2015 Autumn Statement and Spending Review, on 9 December 2015 the UK government published draft legislation for inclusion in the Finance Bill 2016 to change the taxation of dividend income, currently intended to take effect from 6 April 2016. The first change relates to the abolition of the dividend tax credit, which is to be replaced by a new tax-free dividend allowance of  £5,000 per year. The second change relates to the rates at which dividend income in excess of the tax-free allowance is to be taxed: (i) 7.5% for basic rate taxpayers; (ii) 32.5% for higher rate taxpayers and (iii) 38.1% for additional rate taxpayers.

Corporation Tax Payers .   UK Holders who are within the charge to UK corporation tax will prima facie be subject to UK corporation tax on any dividends on the XL-Bermuda common shares unless the dividend falls within an exempt class and certain conditions for exemption are satisfied. The exemption is of wide application and such UK Holders should therefore in practice generally not be subject to UK corporation tax on the dividend, unless such UK Holders elect to be taxed on the dividend.

Disposals of XL-Bermuda common shares

Taxation of Chargeable Gains .   A disposal or deemed disposal of XL-Bermuda common shares may, depending on the particular circumstances of the UK Holder and subject to any available exemptions or reliefs, give rise to a chargeable gain or an allowable loss for CGT purposes.

Individuals .   An individual UK Holder whose total taxable gains and income in a given tax year, including any gains made on the disposal or deemed disposal of his XL-Bermuda common shares, is less than or equal to the upper limit of the income tax basic rate band applicable in respect of that tax year, referred to as, the band limit, will generally be subject to capital gains tax at a flat rate of 18% in respect of any gain arising on a disposal or deemed disposal of his XL-Bermuda common shares in that year.

An individual UK Holder whose total taxable gains and income in a given tax year, including any gains made on the disposal or deemed disposal of his XL-Bermuda common shares, is greater than the band limit will generally be subject to capital gains tax at a flat rate of 18% in respect of any gain arising on a disposal or deemed disposal of his XL-Bermuda common shares (to the extent that, when added to the holder’s other taxable gains and income in that tax year, the gain is less than or equal to the band limit) and at a flat rate of 28% in respect of the remainder of the gain arising on a disposal or deemed disposal of his XL-Bermuda common shares in that year.

No indexation allowance will be available to an individual UK Holder in respect of any disposal of XL-Bermuda common shares. However, each individual UK Holder has an annual exemption, such that capital gains tax is chargeable only on gains arising from all sources during the tax year in excess of this figure.

The annual exemption is £11,100 for the tax year 2015/2016.

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Corporation Tax Payers .   For UK Holders within the charge to UK corporation tax an indexation allowance may be available to reduce any chargeable gain arising (but not to create or increase any allowable loss).

Temporary Non-Residents .   A holder of XL-Bermuda common shares who is an individual, who has ceased to be resident for tax purposes in the UK for a period of less than five years and who disposes of XL-Bermuda common shares during that period may be liable to pay for UK capital gains tax (subject to any available exemption or relief). If applicable, the tax charge will arise in the tax year that the individual returns to the UK.

UK Stamp Duty and SDRT

No UK stamp duty should be payable in respect of any instrument of transfer of the XL-Bermuda common shares provided that the instrument is not executed in the UK and does not relate to any property situate, or to any matter or thing done or to be done, in the UK.

No SDRT should be payable in respect of an agreement to transfer XL-Bermuda common shares or depositary interests, provided that the XL-Bermuda common shares are not registered in a register maintained in the UK by or on behalf of XL-Bermuda or paired with shares issued by a body corporate incorporated in the UK and, in respect of depositary interests, provided further that XL-Bermuda is not centrally managed and controlled in the UK and that the XL-Bermuda common shares are listed on a recognised stock exchange (within the meaning given by Section 1137(1) of the Corporation Tax Act 2010).

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DESCRIPTION OF XL GROUP LTD SHARE CAPITAL

The following description of XL-Bermuda’s share capital is a summary. This summary is subject to the Bermuda Companies Act and to the complete text of XL-Bermuda’s memorandum of association and bye-laws (which will have been adopted by XL-Bermuda substantially in the forms attached as Annexes B and C, respectively, prior to the Effective Time, subject to the outcome of Proposal Number Ten, Proposal Number Eleven and Proposal Number Twelve). We encourage you to read those laws and documents carefully. There are differences between XL-Ireland’s memorandum and articles of association and XL-Bermuda’s memorandum of association and bye-laws.

See “Comparison of Rights of Shareholders and Powers of the Board of Directors.” Except where otherwise indicated, the description below reflects XL-Bermuda’s memorandum of association and bye-laws substantially as those documents will be in effect upon consummation of the Transaction.

Capital Structure

Authorized Share Capital

The authorized share capital of XL-Bermuda is US$100 divided into 10,000 shares of par value US$0.01 each. The authorized share capital of XL-Bermuda as of immediately prior to the Transaction will be US$9,999,900 divided into 500,000,000 common shares of par value US$0.01 each and 499,990,000 shares of par value US$0.01 each.

XL-Bermuda’s bye-laws authorize the XL-Bermuda Board of Directors (the “ XL-Bermuda Board ”), without shareholder approval, but subject to the provisions of XL-Bermuda’s bye-laws, the limitations prescribed by law and without prejudice to any special rights previously conferred on holders of any existing class or series of shares of XL-Bermuda, to issue, allot, exchange or otherwise dispose of shares or options, warrants or other rights to purchase shares or securities which are convertible into or exchangeable for shares, at such time, for such consideration and on such terms and conditions as the XL-Bermuda Board may determine.

The XL-Bermuda Board is authorised, pursuant to XL-Bermuda’s bye-laws and without shareholder approval, but subject to the provisions of XL-Bermuda’s bye-laws, the limitations prescribed by law and without prejudice to any special rights previously conferred on the holders of any existing class or series of shares, to issue and allot non-voting common shares that do not entitle the holders thereof to voting rights.

XL-Bermuda’s bye-laws authorize the XL-Bermuda Board, without shareholder approval, but subject to the provisions of XL-Bermuda’s bye-laws, the limitations prescribed by law and without prejudice to any special rights previously conferred on the holders of any existing class or series of shares, to issue shares in one or more series and if it does so, may name and designate each series in such manner as it deems appropriate to reflect the particular rights and restrictions attached to that series.

Each such share will have attached to it such preferred, qualified or other special rights, privileges and conditions and be subject to such restrictions, whether in regard to dividend, return of capital, redemption, conversion into the XL-Bermuda common shares or voting or otherwise, as the XL-Bermuda Board may determine on or before its allotment.

Except as otherwise specified below, references to voting by shareholders of XL-Bermuda are references to voting by holders of shares entitled to attend and vote generally at general meetings of the shareholders of XL-Bermuda. Immediately after the Effective Time, the only such shares of XL-Bermuda issued and outstanding will be the XL-Bermuda common shares issued pursuant to the Scheme of Arrangement.

Issued Share Capital

Immediately prior to the Transaction, the issued share capital of XL-Bermuda will be US$0.01 shares divided into one (1) XL-Bermuda common share of par value US$0.01 per XL-Bermuda common share, which share will be held by XL-Ireland. At the Effective Time, the XL-Bermuda common share held by

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XL-Ireland will be purchased at nominal value by XL-Bermuda and thereby treated as cancelled in accordance with Section 42A of the Bermuda Companies Act. Also at the Effective Time, XL-Bermuda will issue a number of its common shares that is equal to the number of XL-Ireland ordinary shares outstanding prior to the Transaction.

XL-Bermuda common shares issued pursuant to the Transaction will be credited as fully paid up and will be non-assessable.

Pre-emption Rights, Share Warrants and Share Options

Under Bermuda law, there are no statutory pre-emption rights and therefore, no shareholder of a Bermuda company has an automatic pre-emptive right to subscribe for additional issuances of a company’s shares unless, and to the extent that, such right is attached to a class of shares on issue or is otherwise expressly granted to the shareholder under the bye-laws of such company or under any contract between the shareholder and the company. XL-Bermuda’s bye-laws do not grant pre-emptive rights to shareholders.

XL-Bermuda’s bye-laws provide that the XL-Bermuda Board is authorized to issue share warrants and share options by a resolution of the XL-Bermuda Board and such share warrants and share options will be contractual obligations of XL-Bermuda.

XL-Bermuda will be subject to the rules of the NYSE requiring shareholder approval of certain share issuances.

Dividends

Under the bye-laws of XL-Bermuda and in accordance with the Bermuda Companies Act, the XL-Bermuda Board may from time to time declare dividends, or distributions out of contributed surplus, (either in cash or in specie, including in shares of XL-Bermuda) to be paid to the shareholders in proportion to the number of shares held by them, and in accordance with their rights and interests, including such interim dividends as appear to the XL-Bermuda Board to be justified by the position of XL-Bermuda.

XL-Bermuda’s bye-laws authorize the XL-Bermuda Board, in its discretion (but subject to any rights or restrictions at the time lawfully attached to any class or series of shares, and subject to XL-Bermuda’s bye-laws and the solvency requirements discussed below), to declare such dividends and determine that any dividend shall be paid in cash or wholly or partly in specie, in which case the XL-Bermuda Board may fix the value for distribution in specie of any assets.

XL-Bermuda’s bye-laws provide that no dividend or distribution payable by XL-Bermuda will bear interest against XL-Bermuda and the XL-Bermuda Board may deduct from any such dividend or distribution all sums of money (if any) presently payable by him or her to XL-Bermuda on account of calls or otherwise in respect of shares of XL-Bermuda. Any dividend, or distribution out of contributed surplus, unclaimed for a period of six years from the date of declaration of such dividend or distribution will be forfeited and will revert and belong to XL-Bermuda.

Under the Bermuda Companies Act, a company may not (i) declare a dividend or (ii) make a distribution out of contributed surplus, if there are reasonable grounds for believing that: (x) the company is or would, after the payment, be unable to pay its liabilities as they become due or (y) the realizable value of the company’s assets would thereby be less than its liabilities.

Under XL-Bermuda’s bye-laws, a majority of the XL-Bermuda Board may fix, in advance, a record date for determining the shareholders entitled to receive any dividend or distribution.

Repurchased and redeemed XL-Bermuda common shares may be cancelled or held as treasury shares in accordance with the Bermuda Companies Act and on such terms as the XL-Bermuda Board thinks fit.

There is no distinction between interim and final dividends in Bermuda as the declaration and payment of dividends is at the discretion of the XL-Bermuda Board. Once the XL-Bermuda Board declares a dividend, only then will the XL-Bermuda Board be obliged to pay the dividend to XL-Bermuda common shareholders, subject to the solvency requirements discussed above and any other conditions set by the XL-Bermuda Board. Directors must also consider that the dividend declaration is in the interests of XL-Bermuda.

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Share Repurchases, Redemptions and Conversions

Repurchases and Redemptions by XL-Bermuda

Under XL-Bermuda’s bye-laws, the XL-Bermuda Board may exercise all of the powers of XL-Bermuda to purchase or acquire all or any part of its own shares at any price and upon such terms as the XL-Bermuda Board may in its discretion determine, provided always that such acquisition is in accordance with the Bermuda Companies Act. Further XL-Bermuda may acquire its own shares as treasury shares in accordance with the Bermuda Companies Act and on such terms as the XL-Bermuda Board think fit. The Bermuda Companies Act prohibits XL-Bermuda from exercising the rights to attend and vote at a general meeting of XL-Bermuda that attach to any treasury shares acquired by XL-Bermuda.

XL-Bermuda must satisfy the solvency requirements under the Bermuda Companies Act if it is to purchase its shares and may not purchase its own shares if, on the date on which the purchase is to be effected, there are reasonable grounds for believing that XL-Bermuda is, or after the purchase would be, unable to pay its liabilities as they become due.

If Proposal Number Eleven is approved by shareholders, XL-Bermuda’s bye-laws will provide XL-Bermuda the option to purchase for fair market value all or part of the shares held by a XL-Bermuda shareholder if the XL-Bermuda Board in its sole discretion determines that ownership of shares of XL-Bermuda by any such shareholders may result in adverse tax, regulatory or legal consequences to XL-Bermuda or its subsidiaries or any other shareholder to the extent the XL-Bermuda Board, in the reasonable exercise of its discretion, determines it is necessary to avoid or cure such adverse consequences.

Existing Share Repurchase Program

The Board of Directors of XL-Ireland has previously authorized a program to repurchase up to $1 billion of the ordinary shares of XL-Ireland, under which there remained, as of close of trading on May 10, 2016, authorization to repurchase up to $226,219,593 of the ordinary shares of XL-Ireland. Prior to the consummation of the Transaction, we expect the Board of Directors of XL-Bermuda to authorize the repurchase or redemption of XL-Bermuda shares by XL-Bermuda and subsidiaries of XL-Bermuda pursuant to the program, such that XL-Bermuda and its subsidiaries will be authorized to purchase or redeem shares in an aggregate amount approximately equal to the then-remaining authorization under the existing XL-Ireland share repurchase program.

Bonus Shares

Under XL-Bermuda’s bye-laws, the XL-Bermuda Board may capitalize any part of the amount standing to the credit of  (i) any of XL-Bermuda’s share premium or other reserve accounts or funds; or (ii) the profit and loss account or otherwise, available for distribution by applying such amount in paying up unissued shares to be allotted as fully paid bonus shares pro rata to XL-Bermuda’s shareholders.

Consolidation and Division; Subdivision

Under its bye-laws, XL-Bermuda may, by resolution of the XL-Bermuda shareholders passed by more than 50% of the votes cast at a meeting of shareholders, divide any or all of its share capital into shares of smaller nominal value than its existing shares (often referred to as a stock split) or consolidate any or all of its share capital into shares of larger nominal value than its existing shares (often referred to as a reverse stock split).

Reduction of Share Capital

XL-Bermuda may, by resolution of the XL-Bermuda shareholders and by publishing the intent to reduce its capital in a local newspaper, reduce its authorized but unissued share capital, or its issued share capital, in any way and on such terms as it sees fit, pursuant to the Bermuda Companies Act. Under the Bermuda Companies Act, a Bermuda company may agree in its bye-laws that no shareholder approval of such share capital reduction is required. However, for these purposes, XL-Bermuda’s bye-laws require more than 50% of the votes cast by XL-Bermuda shareholders at a meeting of shareholders to pass the

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resolution, provided a reduction of issued share capital shall require the affirmative vote of 75% of votes cast by shareholders present or represented by proxy and voting at such general meeting. Where any such share capital reduction is carried out, XL-Bermuda must file a memorandum of reduction of share capital with the Bermuda Registrar of Companies.

Voting

Subject to the rights, if any, of the holders of any series of preferred shares, if and when issued and subject to applicable law, each holder of XL-Bermuda common shares will be entitled to one vote per share and all voting rights will be vested in those holders of record on the applicable record date on all matters voted on by the XL-Bermuda shareholders. However, if, and for so long as, the votes conferred by the XL-Bermuda Controlled Shares (as defined below) of any person constitute 10% or more of the votes conferred by the issued shares of the company, the voting rights with respect to the XL-Bermuda Controlled Shares of such person will be limited, in the aggregate, to a voting power equal to approximately (but slightly less than) 10%, pursuant to a formula set forth in XL-Bermuda’s bye-laws. “ XL-Bermuda Controlled Shares ” of a person (as defined in XL-Bermuda’s bye-laws) include (1) all XL-Bermuda shares owned directly, indirectly or constructively by that person (within the meaning of Section 958 of the U.S. Internal Revenue Code of 1986, as amended) or (2) all XL-Bermuda shares owned directly, indirectly or constructively by that person or any “group” of which that person is a part, within the meaning of Section 13(d)(3) of the Exchange Act.

Holders of XL-Bermuda common shares will have noncumulative voting rights, which means that the holders of more than 50% of the shares voting for the election of directors to the XL-Bermuda Board can elect 100% of the directors to the XL-Bermuda Board and the holders of the remaining shares will not be able to elect any directors to the XL-Bermuda Board.

Shareholder decisions are generally taken by resolution at general meetings. Resolutions generally require approval by a simple majority of the votes cast at the meeting or by such higher majority as set out in the bye-laws. Matters requiring more than a simple majority resolution as a matter of Bermuda statutory law include, among other things, entering into a scheme of arrangement (75%) and removing an auditor (66 2/3%).

Variation of Rights Attaching to a Class of Shares

Under the Bermuda Companies Act, the rights attaching to any class of shares may be varied by the consent of the holders of those issued shares at such threshold as set out in the bye-laws.

Variation of any special rights attached to any class of issued shares of XL-Bermuda must, in accordance with XL-Bermuda’s bye-laws, be approved by (i) the consent in writing of the holders of all of the issued and outstanding shares of that class; or (ii) with the sanction of a resolution passed by two-thirds (2/3) of the votes cast at a separate general meeting of the shareholders of the class at which meeting the necessary quorum must be two persons at least holding or representing by proxy one-third (1/3) of the issued shares of the class.

The rights conferred upon the shareholders of any class issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.

In addition, where the rights attaching to any class of shares are varied in accordance with the relevant bye-laws, the holders of at least 10% of the issued shares of that class could apply to the Bermuda Court to have the variation cancelled.

Inspection of Books and Records

Pursuant to XL-Bermuda’s bye-laws, the XL-Bermuda Board is required to keep records of account at XL-Bermuda’s registered office for inspection by the directors. Where the records of account are held in a location outside of Bermuda, the directors are required to keep at XL-Bermuda’s office such records as will

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enable the directors to ascertain with reasonable accuracy the financial position of XL-Bermuda at the end of each three month period. The shareholders of XL-Bermuda have no right to inspect any accounting record or book or document of XL-Bermuda except as provided for by law or as authorized by the XL-Bermuda Board.

XL-Bermuda must also keep a register of shareholders at its registered office in Bermuda for inspection and the Secretary of XL-Bermuda is required to establish and maintain a register of directors and officers for public inspection as prescribed by the Bermuda Companies Act. In addition, XL-Bermuda must file with the Bermuda Registrar of Companies a list of its directors containing, in the case of an individual director, his or her first and last name and address, or, in the case of a company acting as director, its name and registered office address. As a Bermuda company whose shares will be listed on an appointed stock exchange (i.e. the NYSE), XL-Bermuda may, in addition to its register of members at its registered office, keep one or more branch registers in a location outside of Bermuda. However, such branch register(s) must be kept in the same manner in which the register of members in Bermuda must be kept.

Acquisitions

Amalgamations and Mergers

Under the Bermuda Companies Act, the amalgamation or merger of a Bermuda company with another company (wherever incorporated) (other than certain affiliated companies) requires, subject to the company’s bye-laws, the amalgamation or merger to be approved by the company’s board of directors and by its shareholders. The Bermuda Companies Act prescribes approval by 75% of shareholders but permits companies to reduce this in its bye-laws to a simple majority.

If Proposal Number Ten is approved by shareholders, the XL-Bermuda bye-laws will require that any amalgamation or merger must be approved by (1) 75% of the votes cast by shareholders of XL-Bermuda present or represented by proxy and voting at a general meeting or (2) if the XL-Bermuda Board has unanimously approved the proposed amalgamation or merger, a majority of votes cast by shareholders of XL-Bermuda present or represented by proxy and voting at such general meeting.

If Proposal Number Ten is not approved by shareholders, the XL-Bermuda bye-laws will require that any amalgamation or merger must be approved by 75% of the votes cast by shareholders of XL-Bermuda present or represented by proxy and voting at such general meeting.

For purposes of approval of an amalgamation or merger, all shares, whether or not otherwise entitled to vote, carry the right to vote. Holders of a separate class of shares are entitled to a separate class vote if the rights of such class would be varied by virtue of the amalgamation or merger.

Schemes of Arrangement

Bermuda companies are able to apply to the Bermuda Supreme Court (the “ Bermuda Court ”) under Section 99 of the Bermuda Companies Act to obtain the Bermuda Court’s sanction of a proposed scheme of arrangement. Schemes may be transfer schemes or cancellation schemes but, unlike a transfer scheme, a cancellation scheme requires the company to pass a solvency test or obtain the agreement of all of its creditors to the scheme. In either case, dissenting shareholders do not have express statutory appraisal rights, but the Bermuda Court will only sanction a scheme if it is fair. Shares owned by the offeror can be voted to approve the scheme but the Bermuda Court will be concerned to see that the shareholders approving the scheme are fairly representative of the general body of shareholders.

Under the Bermuda Companies Act, any scheme must be approved by a majority in number representing three quarters in value of the shareholders present and voting either in person or by proxy at the requisite special general meeting. If there are dissenting shareholders who hold more than 10% of the shares, the Bermuda Court might be persuaded not to exercise its discretion to sanction the scheme on the ground that the scheme constitutes a takeover within Section 102 of the Bermuda Companies Act and requires a 90% acceptance.

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A Bermuda company may effect a squeeze-out of a minority shareholder in a Bermuda company by way of a general offer followed by a squeeze-out under Section 102 of the Bermuda Companies Act. Broadly, if the offer is approved by the holders of 90% in value of the shares which are the subject of the offer, the offeror can compulsorily acquire the shares of dissenting shareholders. Shares owned by the offeror or its subsidiaries or their nominees at the date of the offer do not, however, count towards the 90%. If the offeror or any of its subsidiaries or any nominee of the offeror, or any of its subsidiaries together already own more than 10% of the shares in the subject company at the date of the offer, the offeror must offer the same terms to all holders of the same class and the holders who accept the offer, besides holding not less than 90% in value of the shares, must also represent no less than 75% in number of the holders of those shares, although the additional restrictions should not apply if the offer is made by a subsidiary of a parent (where the subsidiary does not own more than 10% of the shares of the subject company) even where the parent owns more than 10% of the shares of the subject company, provided that the subsidiary and the parent are not nominees.

The 90% acceptance must be obtained within four months after the making of the offer and, once obtained, the compulsory acquisition may be commenced within two months of the acquisition of the 90%. Dissenting shareholders do not have express appraisal rights but are entitled to seek relief  (within one month of the compulsory acquisition notice) from the Bermuda Court which has power to make such orders as it thinks fit.

There is an alternative squeeze-out mechanism exercisable by the holders of 95% or more of the shares or any class of shares serving notice on the remaining shareholders or class of shareholders under Section 103 of the Bermuda Companies Act. Dissenting shareholders have a right to apply to the Bermuda Court within one month of the compulsory acquisition notice to have the value of their shares appraised by the Bermuda Court, but these appraisal rights differ from the appraisal rights in a merger, in that under Section 103 of the Bermuda Companies Act, if one dissenting shareholder applies to court and is successful in obtaining a higher valuation, that valuation must be paid to all shareholders being squeezed out.

Appraisal Rights

Under the Bermuda Companies Act, a dissenting shareholder of an amalgamating or merging company who did not vote in favor of the amalgamation or merger and does not believe it has been offered fair value for its shares may within one month of the giving of the notice calling the meeting at which the amalgamation or merger was decided upon apply to the Bermuda Court to appraise the fair value of its shares. Where the Bermuda Court has appraised any such shares and the amalgamation or merger has not been consummated before the appraisal then, within one month of the Bermuda Court appraising the value of the shares, the company is entitled to either: (i) pay to the dissenting shareholder an amount equal to the value of its shares as appraised by the Bermuda Court or (ii) terminate the amalgamation or merger agreement in accordance with the Bermuda Companies Act.

Where the Bermuda Court has appraised the fair value of any shares and the amalgamation or merger has proceeded prior to the appraisal then, within one month of the Bermuda Court appraising the value of the shares, if the amount (if any) paid to the dissenting shareholder for his or her shares is less than that appraised by the Bermuda Court, the amalgamated or surviving company must pay to such shareholder the difference between the amount paid to such shareholder and the value appraised by the Bermuda Court.

There is no right of appeal from an appraisal by the Bermuda Court. The costs of any application to the Bermuda Court to appraise the fair value of any shares will be allocated between the company and the shareholder in the discretion of the Bermuda Court.

Disclosure of Interests in Shares

Under Bermuda law, securities may be offered or sold in Bermuda only in compliance with provisions of the Investment Business Act 2003, the Exchange Control Act of 1972, and related regulations of Bermuda that regulate the sale of securities in Bermuda. In addition, specific permission is required from the BMA, pursuant to the provisions of the Exchange Control Act of 1972 and related regulations, for all issuances and transfers of securities of Bermuda companies, other than in cases where the BMA has granted a general permission. The BMA, in its policy dated June 1, 2005, provides that where any equity

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securities of a Bermuda company, which would include the XL-Bermuda common shares, are listed on an appointed stock exchange (the NYSE is deemed to be an appointed stock exchange under Bermuda law), general permission is given for the issue and subsequent transfer of any securities of such company from and/or to a non-resident of Bermuda, for as long as any equity securities of the company remain so listed.

In addition, persons or groups (within the meaning of the Exchange Act) beneficially owning 5% or more of XL-Bermuda common shares must comply with the reporting requirements under Regulation 13D-G of the Exchange Act.

Anti-Takeover Provisions

Bermuda law does not include any takeover regulations applicable to shareholders of Bermuda companies.

XL-Bermuda’s bye-laws provide that the XL-Bermuda Board must decline to register a transfer of shares if it appears to the XL-Bermuda Board that the effect of such transfer would be to increase the number of the XL-Bermuda Controlled Shares of any person to 10% or more of any class of voting shares of the total issued shares or of the voting power of XL-Bermuda.

Corporate Governance

XL-Bermuda’s bye-laws allocate authority over the management of XL-Bermuda to the XL-Bermuda Board who may exercise all the powers of XL-Bermuda (except those powers that are required by the Bermuda Companies Act and XL-Bermuda’s bye-laws to be exercised by the shareholders of XL-Bermuda). The XL-Bermuda Board may delegate management (including its powers, discretions and authorities) of XL-Bermuda to committees of the XL-Bermuda Board or to any company, firm or person or any fluctuating body of persons for such period and subject to such conditions as the XL-Bermuda Board may think fit. Regardless of any delegation, the XL-Bermuda directors cannot absolve themselves entirely of their responsibility by delegation to others.

Please see “Comparison of Rights of Shareholders and Powers of the Board of Directors—Shareholders’ Suits” and “Comparison of Rights of Shareholders and Powers of the Board of Directors—Enforcement of Civil Liabilities Against Foreign Persons.”

Duration; Dissolution; Rights upon Liquidation

XL-Bermuda’s duration will be unlimited. XL-Bermuda may be dissolved at any time by way of either a shareholder’s voluntary winding up or a creditors’ voluntary winding up. In the case of a shareholder’s voluntary winding up, the company must be solvent and a special resolution of the shareholders is required. XL-Bermuda may also be dissolved by way of court order on the application of a creditor.

In the event of a voluntary or involuntary liquidation, dissolution or winding up of XL-Bermuda, the holders of XL-Bermuda common shares will be entitled to share equally in any of the assets available for distribution after XL-Bermuda has paid in full all of its debts and after the holders of all series of XL-Bermuda’s outstanding preferred shares, if any, have received their liquidation preferences in full.

The rights of the shareholders to a return of XL-Bermuda’s assets on dissolution or winding up, following the settlement of all claims of creditors, may be prescribed in XL-Bermuda’s bye-laws or the terms of any shares issued by the Board of Directors of XL-Bermuda from time to time. The holders of preference shares, in particular, may have the right to priority over common or other shareholders in a dissolution or winding up of XL-Bermuda.

Please see “Comparison of Rights of Shareholders and Powers of the Board of Directors—Rights upon Liquidation.”

No Share Certificates

It is not intended that XL-Bermuda will issue share certificates unless (1) certificates are required by law, any stock exchange, a recognized depository, any operator of any clearance or settlement system, or the terms of issue of any class or series of its shares, or (2) a holder of XL-Ireland shares in respect of which a certificate has been issued applies for share certificates evidencing ownership of XL-Bermuda shares received pursuant to the Transaction. See “Proposal Number One: The Scheme of Arrangement Proposal.”

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Under the bye-laws of XL-Bermuda, holders of XL-Bermuda common shares will have no right to certificates for their shares, except on request. Holders’ rights to request certificates for shares are subject to any resolution of the Board of Directors of XL-Bermuda determining otherwise.

Stock Exchange Listing

If the Transaction becomes effective, the Transaction will not affect our stock exchange listing of the ordinary shares. We intend to make application for and expect that, immediately following the Effective Time, the XL-Bermuda common shares will be listed on the NYSE under the symbol “XL,” the same symbol under which the XL-Ireland ordinary shares are currently listed. XL-Bermuda common shares are also expected to be listed on the BSX following the Effective Time. We do not currently intend to list the XL-Bermuda common shares on any stock exchange other than those listed above.

No Sinking Fund

The XL-Bermuda common shares will have no sinking fund provisions.

No Liability for Further Calls or Assessments

The XL-Bermuda common shares to be issued in the Transaction will be duly and validly issued pursuant to the Transaction, will be credited as fully paid up and will be non-assessable.

Transfer and Registration of Shares

The XL-Bermuda share register will be maintained by its transfer agent. Registration in this share register will be determinative of membership in XL-Bermuda. A shareholder of XL-Bermuda who holds shares beneficially will not be the holder of record of such shares. Instead, the depository (for example, Cede & Co., as nominee for DTC) or other nominee will be the holder of record of such shares. Accordingly, a transfer of shares from a person who holds such shares beneficially to a person who will also hold such shares beneficially through the same depository or other nominee will not be registered in XL-Bermuda’s official share register, as the depository or other nominee will remain the record holder of such shares.

The XL-Bermuda Board of Directors may in its absolute discretion, and without providing a reason, refuse to register the transfer of a share which is not fully paid up.

The XL-Bermuda Board may also refuse to register a transfer unless the shares of XL-Bermuda are (i) listed on an appointed stock exchange (of which the NYSE is one) or (ii) (A) a duly executed instrument of transfer is provided to XL-Bermuda or XL-Bermuda’s transfer agent accompanied by the certificate (if any has been issued) in respect of the shares to which it relates and by such other evidence as the XL-Bermuda Board may reasonably require to show the right of the transferor to make the transfer, (B) the instrument of transfer is only in respect of one class of shares, and (C) all applicable consents, authorizations, permissions or approvals of any governmental body or agency in Bermuda or any other applicable jurisdiction have been obtained (if required).

Among other things, the XL-Bermuda Board may also decline to register a transfer of shares unless a registration statement under the Securities Act is in effect with respect to the transfer or the transfer is exempt from registration. The registration of transfers may be suspended at such times and for such periods, not exceeding 30 days in any year, as the XL-Bermuda Board may from time to time determine (except as may be required by law). Further, XL-Bermuda’s bye-laws provide that the XL-Bermuda Board must decline to register a transfer of shares if it appears to the XL-Bermuda Board that the effect of such transfer would be to increase the number of the XL-Bermuda Controlled Shares of any person to 10% or more of any class of voting shares of the total issued shares or of the voting power of the company.

If the XL-Bermuda Board refuses to register a transfer of any share, it must send to the transferee notice of the refusal within thirty days after the date on which the instrument of transfer was lodged with XL-Bermuda.

Shares listed on an appointed stock exchange, such as the NYSE, may be transferred by any means permitted by the rules of such exchange.

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COMPARISON OF RIGHTS OF SHAREHOLDERS AND
POWERS OF THE BOARD OF DIRECTORS

Your rights as a shareholder of XL-Ireland and the relative powers of XL-Ireland’s Board of Directors are governed by Irish law and XL-Ireland’s memorandum and articles of association. After the Transaction, you will be a XL-Bermuda shareholder, and your rights and the relative powers of XL-Bermuda’s Board of Directors will be governed by Bermuda law and XL-Bermuda’s memorandum of association and bye-laws.

Many of the principal attributes of the XL-Ireland ordinary shares and the XL-Bermuda common shares will be similar. However, there are differences between what your rights are under Irish law and what they will be after the Transaction under Bermuda law. In addition, there are differences between XL-Ireland’s memorandum and articles of association and XL-Bermuda’s memorandum of association and bye-laws.

The following discussion is a summary of certain changes in your rights resulting from the Transaction.

This summary does not cover all of the differences between Irish law and Bermuda law affecting companies and their shareholders or all of the differences between XL-Ireland’s memorandum and articles of association and XL-Bermuda’s memorandum of association and bye-laws. This summary is subject to the Bermuda Companies Act and the Irish Companies Act 2014, and to the complete text of XL-Ireland’s memorandum and articles of association and XL-Bermuda’s memorandum of association and bye-laws (which will have been adopted by XL-Bermuda substantially in the forms attached as Annexes B and C, respectively, prior to the Effective Time, subject to the outcome of Proposal Number Ten, Proposal Number Eleven and Proposal Number Twelve). We encourage you to read those laws and documents carefully.

For information as to how you can obtain XL-Ireland’s memorandum and articles of association, please see “Where You Can Find More Information.” Except where otherwise indicated, the discussion of XL-Bermuda below reflects XL-Bermuda’s memorandum of association and bye-laws as those documents will be in effect upon consummation of the Transaction.

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