8-KMaterial Agreements

Chubb Ltd 8-K Report, Material Agreement (Jan 11, 2005)

Filed January 11, 2005For Securities:CB

Summary

This 8-K filing by ACE Limited (formerly Chubb Ltd) on January 11, 2005, reports a significant divestiture of certain reinsurance subsidiaries. The company, through its subsidiary Century Indemnity Company and other affiliates, has entered into a Stock Purchase Agreement with Randall & Quilter Investment Holdings Limited for the sale of ACE American Reinsurance Company (AARe), Brandywine Reinsurance Company S.A.N.V. (SANV), and Brandywine Reinsurance Company (UK) Ltd. (BRUK). This transaction involves the sale of these property and casualty insurance and reinsurance entities for a nominal cash consideration of $3, plus two Preference Shares from the purchaser. The deal also includes capital contributions to the entities being sold and a condition related to the commutation or novation of certain inter-affiliate reinsurance agreements. The divestiture is subject to customary closing conditions, including regulatory approvals from the Pennsylvania Insurance Department and the UK's Financial Services Authority, and is anticipated to close in the first half of 2005. Investors should view this as a strategic move to streamline operations and potentially exit certain lines of business or geographic markets.

Key Highlights

  • 1ACE Limited is divesting three reinsurance subsidiaries: ACE American Reinsurance Company (AARe), Brandywine Reinsurance Company S.A.N.V. (SANV), and Brandywine Reinsurance Company (UK) Ltd. (BRUK).
  • 2The transaction is structured as a Stock Purchase Agreement with Randall & Quilter Investment Holdings Limited.
  • 3The sale price is nominal, consisting of $3 in cash and two Preference Shares from the purchaser.
  • 4The agreement requires certain capital contributions to the entities being sold at closing.
  • 5A condition for closing includes the commutation or novation of specific reinsurance agreements between ACE affiliates.
  • 6Regulatory approvals are required from the Pennsylvania Insurance Department and the UK's Financial Services Authority.
  • 7The sale is expected to be completed within the first half of 2005.

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