Finance Committee Charter for XL Capital Ltd

 

Purpose

 

The Finance Committee is appointed by the Board to oversee the Board's responsibilities relating to the financial affairs of the Company and to recommend to the Board, adoption of the annual business plan and related financial plan, financial policies, debt and equity issuances, dividends, acquisitions and dispositions of business segments and subsidiaries, joint ventures, major new business initiatives, strategic investments and overall investment policy, including review of manager selection, benchmarks and investment performance, and other risk management exposure policies and guidelines.

 

Committee Membership

 

The Finance Committee shall consist of no fewer than five members, each of whom shall have knowledge or experience relating to corporate and other financial matters. The members of the Finance Committee shall be appointed by the Board on the recommendation of the Nominating & Governance Committee. Finance Committee members may be removed by the Board at any time if necessary or appropriate.

 

Committee Authority and Responsibilities

 

The Finance Committee shall establish and recommend to the Board, financial policies for the Company, including, but not limited to, those relating to asset-liability structure, guarantee capacity, collateral usage and leverage.

 

 

The Finance Committee shall review and make recommendations to the Board on all capital-related issues, including:

 

a) Capital Planning and Allocation

b) Long-Term Debt Issuances

c) Common and Preferred Equity Issuances

d) Stock and Debt Redemptions or Buybacks.

 

The Finance Committee shall review and make recommendations to the Board on all significant credit, letter of credit and other financing facilities.

 

 

The Finance Committee shall review the annual business plan and related financial plan of the Company and advise the Board as to its adoption.

 

 

The Finance Committee shall review and recommend to the Board dividend policy and declarations.

 

 

The Finance Committee shall review and recommend to the Board on all significant acquisitions, as well as disposals of business segments or subsidiaries, and joint ventures.

 

 

The Finance Committee shall review and recommend to the Board strategic equity investments.

 

 

The Finance Committee shall review all major new business initiatives, especially those requiring a significant capital allocation.

 

 

The Finance Committee shall review all major risk management exposures.

 

 

The Finance Committee shall review and recommend to the Board overall investment policy, including asset allocation, and to review investment manager selection, benchmarks and investment performance, including credit exposures, policies and guidelines.

 

 

The Finance Committee shall set the performance targets for the Chief Investment Officer of the Company and provide its evaluation of the Chief Investment Officer's performance to the Compensation Committee in conjunction with the latter's annual compensation review.

 

 

The Finance Committee may form and delegate authority to sub-committees when appropriate.

 

 

The Finance Committee shall annually review its own performance.

 

 

The Finance Committee shall review and reassess the adequacy of this charter annually and recommend any proposed changes to the Nominating & Governance Committee and ultimately to the Board for approval.

 

 

The Finance Committee shall review and recommend to the Board authorization levels for (a) capital expenditure and investments (including all items under paragraphs 6 and 7 hereof) and (b) other transactions entered into by the Company and the various business units (including all items under paragraphs 2 and 3 hereof).