EXHIBIT 10.32
          AMENDMENT AND TERMINATION OF REINSURANCE GUARANTEE AGREEMENT
THIS  AMENDMENT AND  TERMINATION  OF  REINSURANCE  GUARANTEE  AGREEMENT  (this
"Agreement") is made as of [date]
BETWEEN:
(1)     XL INSURANCE (BERMUDA) LTD, a Bermuda insurance company, ("XLI")
AND:
(2)     XL CAPITAL ASSURANCE INC., a New York domiciled financial guaranty
        insurance company; ("XLCA")
AND:
(3)     XL FINANCIAL ASSURANCE LTD., a Bermuda domiciled financial guaranty
        reinsurance company; ("XLFA")
WHEREAS:
A.      XLI issued a reinsurance agreement guarantee dated as of May 1, 2004
        (the "XLI Guarantee") of XLFA's obligations to XLCA pursuant to a Second
        Amended and Restated Facultative Quota Share Reinsurance Treaty dated as
        of May 1, 2004 between XLFA and XLCA (the "Original Fac QS Treaty") (the
        "XLI Guarantee");
B.      XLCA and XLFA have entered into a Third Amended and Restated Facultative
        Quota Share Reinsurance Treaty dated as of [ ] attached hereto as
        Exhibit A (the "Amended Fac QS Treaty");
C.      XLI wishes to terminate the XLI Guarantee with respect to any new
        business ceded by XLCA to XLFA pursuant to the Amended Fac QS Treaty
        effective as at the date of an initial public offering of the shares of
        Security Capital Assurance Ltd, the direct parent company of XLFA and
        ultimate parent company of XLCA ("SCA IPO");
D.      XLCA and XLFA agree to the termination of the XLI Guarantee solely with
        respect to any such new business being ceded by XLCA to XLFA pursuant to
        the Amended Fac QS Treaty as at the date of the SCA IPO; and
E.      XLI agrees that it will continue to guarantee the obligations of XLFA
        pursuant to the terms of the XLI Guarantee of any existing business
        which has been ceded by XLCA to XLFA pursuant to the Amended Fac QS
        Treaty prior to the date of the SCA IPO.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereby agree as follows:
1.      Each of the parties hereto agree that the XLI guarantee is hereby
        terminated and cancelled solely with respect to any new business ceded
        by XLCA to XLFA pursuant to the Amended Fac QS Treaty on and after the
        date of the SCA IPO.
2.      Each of the parties acknowledges and agrees that the obligations of XLI
        under the terms of the XLI Guarantee for the business referred to in
        paragraph one above are hereby released and discharged and XLI shall
        have no further obligations thereunder.
3.      Each of the parties further acknowledges and agrees that the terms of
        the XLI guarantee shall remain in full force and effect with respect to
        any existing business ceded by XLCA to XLFA pursuant to the Amended Fac
        QS Treaty prior to the date of the SCA IPO.
4.      This Agreement may be executed in two or more counterparts each of which
        shall constitute an original, but all of which when taken together shall
        constitute one agreement. Any party may deliver a signed counterpart
        signature page of this Agreement by fax and such faxed signature pages
        shall be deemed to be an original for all purposes.
5.      The terms and conditions of this Agreement and the rights of the parties
        hereunder shall be governed by and construed in all respects in
        accordance with the laws of the State of New York.
Executed and delivered by the parties hereto as of the date first above written.
Signed for and on behalf of XL INSURANCE (BERMUDA) LTD
By:___________________
Title:
Signed for and on behalf of XL FINANCIAL ASSURANCE LTD.
By:___________________
Title:
Signed for and on behalf of XL CAPITAL ASSURANCE INC.
By:___________________
Title:
                                    Exhibit A
    Third Amended and Restated Facutltative Quota Share Reinsurance Treaty