Notice of Pendency of Class Action Against The Chubb Corporation Announced by Milberg Weiss

Apr 12, 2001, 01:00 ET from Milberg Weiss Bershad Hynes & Lerach LLP

    SAN DIEGO, April 12 /PRNewswire/ -- This Notice of Pendency of Action
 replaces and supersedes a prior notice published on August 30, 2000, which,
 pursuant to a Court Order dated January 10, 2001, was found deficient.
     This lawsuit was filed as a class action on August 31, 2000 in the United
 States District Court for the District of New Jersey by the California Public
 Employees' Retirement System ("CalPERS") on behalf of purchasers of The Chubb
 Corporation ("Chubb") (NYSE:   CB) common stock during the period between
 April 27, 1999 and October 15, 1999 (the "Class Period"), including the former
 shareholders of Executive Risk Inc. ("Executive Risk") who exchanged their
 Executive Risk shares for Chubb stock in July 1999 (the "Proposed Class").
 The title of the action is California Public Employees' Retirement System v.
 The Chubb Corporation et al., No. 3:00-CV-04285 (GEB), United States District
 Court for the District of New Jersey.  The action is assigned to the Honorable
 Garrett E. Brown, Jr., and the case files (including the Complaint) are
 located in the clerk's office at the United States District Court, Clarkson S.
 Fisher Federal Building and U.S. Courthouse, 402 East State Street, Trenton,
 New Jersey 08608.
     The named plaintiff is CalPERS.  The defendants are Chubb, Executive Risk
 Inc. ("Executive Risk"), Dean R. O'Hare, Chubb's Chairman and Chief Executive
 Officer, Henry B. Schram, Chubb's Senior Vice President and Chief Accounting
 Officer, David B. Kelso, Chubb's Executive Vice President and Chief Financial
 Officer, Stephen J. Sills, President and CEO of Executive Risk, Robert H.
 Kullas, Chairman of Executive Risk, and Robert V. Deutsch, Executive Vice
 President and Chief Financial Officer of Executive Risk.
     The purpose of this Notice is to inform all class members of their right
 to move the court for appointment as Lead Plaintiff, and also to provide
 sufficient information about the action so that they can make an informed and
 reasoned judgment about whether they should seek Lead Plaintiff status.  The
 Private Securities Litigation Reform Act (the "PSLRA") provides that the Court
 shall appoint as Lead Plaintiff the member or members of the class that the
 Court determines to be most capable of adequately representing the interests
 of class members.  In determining the "most adequate plaintiff," the PSLRA
 provides that the Court shall adopt a rebuttable presumption that the most
 adequate plaintiff is the person or group of persons that has either filed a
 complaint or made a motion for appointment as Lead Plaintiff, has the largest
 financial interest in the relief sought by the class, and otherwise satisfies
 the requirements of Rule 23 of the Federal Rules of Civil Procedure.  15
 U.S.C. section 78u-4(a)(3)(iii).  At the Lead Plaintiff selection stage, this
 latter requirement involves a preliminary showing that the proposed Lead
 Plaintiff's claims are typical of claims of the class members, and that the
 Lead Plaintiff will be an adequate representative of the class.  Any member of
 the alleged class may seek to be appointed as Lead Plaintiff, even if that
 person has not filed a complaint.
     The PSLRA sets forth the following requirements, among others, for any
 person seeking to serve as a representative:
     Each plaintiff seeking to serve as a representative party on behalf of a
 class shall provide a sworn certification, which shall be personally signed by
 such plaintiff and filed with the complaint, that:
 
     (1) states that the plaintiff has reviewed the complaint and authorized
         its filing;
 
     (2) states that the plaintiff did not purchase the security that is the
         subject of the complaint at the direction of the plaintiff's counsel
         or in order to participate in any private action arising under this
         chapter;
 
     (3) states that the plaintiff is willing to serve as a representative
         party on behalf of a class, including providing testimony at
         deposition and trial, if necessary;
 
     (4) sets forth all of the transactions of the plaintiff in the security
         that is the subject of the complaint during the class period specified
         in the complaint;
 
     (5) identifies any other action under this chapter, filed during the
         three-year period preceding the date on which the certification is
         signed, in which the plaintiff has sought to serve as a representative
         party on behalf of a class; and
 
     (6) states that the plaintiff will not accept any payment for serving as a
         representative party on behalf of a class beyond the plaintiffs' pro-
         rata share of any recovery, except as ordered or approved by the court
         in accordance with paragraph (4).
 
     15 U.S.C. section 78u-4(a)(2)(A)(i)-(iv).
 
     If you wish to serve as lead plaintiff, you must move the Court no later
 than sixty days after the date of this notice.  The Proposed Class has not yet
 been certified by the Court.  If you do not wish to serve as lead plaintiff,
 no action is required of you at this time; it is not necessary to file a
 notice of claim or take any other action at this time in order to be a member
 of the class if the Court hereinafter certifies a class in this action.  If
 you wish to discuss this action or have any questions concerning this notice
 or your rights or interests, you may contact any counsel you prefer.  CalPERS
 is represented in this action by William Lerach and Darren Robbins of Milberg
 Weiss Bershad Hynes & Lerach LLP.  They can be contacted by telephone at
 (800) 449-4400, or by e-mail at wsl@mwbhl.com.
     This action seeks damages for violations of sections 10(b), 14 and 20(a)
 of the Securities Exchange Act of 1934, and Rule l0b-5 promulgated thereunder,
 and section 11 and 15 of the Securities Act of 1933.  The Complaint alleges
 causes of action on behalf of Executive Risk shareholders who received Chubb
 shares upon the Executive Risk merger on the theory that Executive Risk
 shareholders were defrauded (Counts II and III).  The Complaint also alleges a
 cause of action on behalf of all persons who purchased Chubb stock during the
 Class Period on the theory that all such persons were defrauded (Count I).
     At the time of the Executive Risk merger and the false statements alleged
 in the Complaint, CalPERS was not a shareholder of Executive Risk and received
 no Chubb shares as a result of that merger.  CalPERS, therefore, likely lacks
 standing to assert the claims on behalf of Executive Risk shareholders
 asserted in Counts II and III of the Complaint.  In addition, at the time of
 the Executive Risk merger, CalPERS held approximately 900,000 shares of Chubb
 stock, and if the fraud upon Executive Risk shareholders alleged in the
 Complaint in fact occurred, CalPERS could be deemed to be a beneficiary of
 that fraud, thus creating the potentiality of a conflict of interest between
 CalPERS and those members of the Proposed Class who were Executive Risk
 shareholders.
     During the Class Period prior to the Executive Risk merger and the release
 of Chubb's second quarter 1999 earnings, CalPERS purchased a total of
 2,237 shares of Chubb stock.  During the Class Period subsequent to the
 release of Chubb's second-quarter earnings, CalPERS purchased 715 shares of
 Chubb stock.  CalPERS presently holds in excess of 690,000 shares of Chubb.
     The Complaint in the action alleges in summary that: Chubb sells personal,
 standard commercial and specialty commercial insurance and is one of the
 largest U.S. underwriters of directors' and officers' liability insurance.
 According to the Complaint, the action arises out of a scheme to make it
 appear that serious problems and increasingly large losses in Chubb's standard
 commercial insurance business, which had badly hurt Chubb's results in
 1997-98, were being overcome by a combination of rate increases and non-
 renewal of unprofitable standard commercial insurance business (the "rate
 increase/policy non-renewal initiative"), which enabled Chubb to report better
 than expected first-quarter 1999 earnings per share ("EPS"), indicating
 Chubb's business was turning around faster than expected and that Chubb would
 therefore achieve stronger EPS growth in 1999 and 2000 than earlier forecast,
 thus artificially inflating Chubb's stock to $76-3/8 per share in mid-1999.
 This, according to the complaint, enabled Chubb to successfully complete its
 acquisition of Executive Risk, a highly profitable underwriter of directors'
 and officers' liability insurance, in exchange for 1.235 shares of Chubb stock
 for each share of Executive Risk stock -- a total of 14.8 million shares --
 plus 1.8 million shares reserved for Executive Risk's executives' options, via
 a June 17, 1999 Registration Statement and a June 17, 1999 Merger Proxy and
 other false and misleading public statements.  The inflation of Chubb's stock
 price reduced the number of shares Chubb had to issue to acquire Executive
 Risk, saving Chubb at least $300-$400 million, while enabling the top three
 insiders of Executive Risk to receive millions of dollars in special benefits
 and payments upon the sale of Executive Risk to Chubb.  However, just eight
 days after Chubb's acquisition of Executive Risk, Chubb shocked the market by
 revealing much worse than expected second-quarter 1999 EPS due to increasing
 losses in its standard commercial insurance business, later revealing that its
 "rate increase/policy non-renewal initiative," which prior to the merger
 defendants had consistently represented was beneficial and would continue to
 benefit Chubb's 1999 EPS, would have no positive impact on Chubb's results
 until mid-2000 at the earliest.
     The Complaint further alleges that subsequent to the Executive Risk merger
 vote on July 19, 1999 and release of the second-quarter earnings results,
 Chubb gave further false reassurances that caused the stock to trade at
 artificially inflated prices for the remainder of the Class Period.  The
 Complaint nevertheless alleges that Chubb's stock immediately declined and
 continued to fall, subsequent to the release of those earnings, to as low as
 $44 in mid-October 1999, as Chubb continued to report worsening results for
 its standard commercial insurance business, which caused Chubb's 1999 EPS to
 decline sharply from its 1998 EPS.
     Set forth in detail below are each of the alleged misstatements or
 omissions giving rise to plaintiffs' claims together with the dates of those
 misstatements or omissions:
 
     1.  On April 27, 1999, Chubb reported better than forecast first quarter
 1999 results via a release which stated:
 
      Our favorable first quarter results reflect positive trends in all three
      major segments of our business, said Dean R. O'Hare, chairman and chief
      executive officer....
 
      Even more significantly for the future, our pricing strategy in standard
      commercial lines has begun to show the impact we are looking for in our
      renewal business.  Month by month, renewal rate increases are building
      momentum, and we expect this trend to continue.  Moreover, we have been
      successful in retaining business we want to keep at higher rates, while
      at the same time we are walking away from business where we can't obtain
      adequate pricing.  By maintaining this profit-oriented discipline,
      standard commercial lines will likely show a decline in premiums
      throughout the year and produce improved combined ratios.  This decline
      in premiums should be offset by continued premium growth in personal and
      specialty commercial lines and by the benefits of a series of growth
      initiatives begun late last year.
 
     2.  On April 27, 1999, subsequent to the release of its first quarter 1999
 results, Chubb held a conference call for analysts, money and portfolio
 managers, institutional investors and large Chubb shareholders to discuss
 Chubb's first quarter 1999 results, its business and its prospects.  During
 the call -- and in follow-up conversations with analysts -- defendants O'Hare
 and Schram stated:
 
      Management's actions to turn around Chubb's standard commercial insurance
      operations by raising prices and not renewing unprofitable policies were
      not only working, in fact, they were exceeding management's expectations,
      and this accounted in large part for Chubb's better than expected first-
      quarter 1999 results.
 
      Due to the successful turnaround of Chubb's standard commercial insurance
      operations, that part of Chubb's business would show 5-l/2%-6% premium
      growth throughout 1999, as Chubb's rate increases for new or renewal
      standard commercial insurance policies were sticking.
 
      The momentum of rate increases in Chubb's standard commercial insurance
      operations was growing month by month.
 
      Chubb was successful at retaining the higher priced standard commercial
      insurance rate which it desired and was profitable.
 
      Chubb was not losing as much of its standard commercial insurance
      business due to rate increases as it had feared.  However, Chubb was
      prepared to lose $250-$300 million in standard commercial insurance
      business, as this would make Chubb's standard commercial insurance
      business "a lot more profitable."  The insurance companies who would pick
      up this business Chubb walked away from were "assholes."
 
      The combined ratio of Chubb's standard commercial insurance business
      would decline throughout 1999, to about 110% by year-end from 119.5% at
      year-end 1998.
 
      The improvements in Chubb's standard commercial insurance business would
      produce an underwriting profit by 2000.
 
      O'Hare was "totally confident" in the success of Chubb's new pricing of
      its standard commercial insurance lines.
 
      O'Hare was optimistic over the future performance of Chubb's business, in
      part due to the turnaround of its standard commercial insurance business.
      O'Hare stated: "You guys are so bloody negative it's disgusting.  We're
      trying to send a strong signal to you that things are getting better.  I
      don't know how else to say it.... This goddamned ship has turned faster
      than I thought it was going to...."
 
     3.  Subsequent to the April 27, 1999 conference call, defendants O'Hare,
 Kelso and/or Schram had private one-on-one conversations with analysts from
 Paine Webber, Bear Stearns, Prudential Securities and Warburg Dillon Read,
 repeating the information provided in the April 27, 1999 conference call and
 also telling them that:
 
      As a result of the better than expected pace of the turnaround of Chubb's
      standard commercial insurance business, Chubb was increasing its
      forecasted 1999 EPS to $4.10+ and its 2000 EPS to $4.50+.
 
     4.  On April 27, 1999, Chubb executives, including O'Hare, Kelso and
 Schram, appeared at the Chubb 1999 Shareholders' Meeting in New Jersey.  In
 formal presentations and private conversations with the assembled
 shareholders, analysts, money and portfolio managers, institutional investors,
 brokers and stock traders, they told attendees the same information as
 disseminated during the April 27, 1999 analyst conference call and follow-up
 conversations with analysts.
 
     5.  On April 27, 1999 Best's Insurance News reported on Chubb's Annual
 Shareholders' meeting:
 
      Speaking at the company's annual meeting of shareholders, held Tuesday in
      Warren, N.J., Chubb Chairman Dean R. O'Hare said the company has focused
      on improving its underwriting results and expense ratios.
 
                                 *     *     *
 
      At the meeting, several shareholder-representatives complained that
      Chubb's stock price has lagged behind several market and industry indexes
      in recent years.  Based on improving commercial rates and strong results
      in personal lines, O'Hare said he expects the company to prove a long-
      term stock winner.  "I'm a happy camper," he said.
 
     6.  On April 27, 1999, Bloomberg reported an interview by Hampton with
 O'Hare, as follows:
 
      Hampton:  Reporting from Bloomberg News New York Time Ted Hampton.  Today
                I'm speaking with Dean O'Hare the Chairman and Chief Executive
                of Chubb Corporation in Warren, New Jersey, which today
                reported first quarter earnings.  Mr. O'Hare thanks very much
                for joining me and congratulations on your quarter [you] beat
                estimates [and your] stock is up 1-5/8 as we speak.  Why do you
                think investors are celebrating a little bit today?
 
      O'Hare:   I guess they're celebrating because earnings are better than
                the Street expected them to be.
 
      Hampton:  And to what did you attribute that?
 
      O'Hare:   Why, I would hope that it's attributable to the fact this ship
                of ours is turning quicker than other people... had
                expected....
 
      Hampton:  Is there at Chubb a sense that commercial lines pricing is
                bottoming or are you still contending with the soft market
                conditions?
 
      O'Hare:   There is definitely a sense at Chubb that pricing is firming.
 
                                 *     *     *
 
                I will tell you this, that from what I've seen on a monthly
                basis, we have gone from a, let's take the month of December,
                where we were seeing price declines to a point that we are now
                seeing standard commercial lines price increases that are,
                let's call them 3-1/2 percent.  I fully expect that [they're]
                going to build rather rapidly to 5-1/2 percent.
 
 On April 27, 1999, Bloomberg reported:
 
      "This ship of ours is turning quicker than other people may have
      expected," Dean R. O'Hare, chairman and chief executive of the Warren,
      New Jersey, company said in an interview, referring to the profit
      surprise.
 
     7.  On April 27, 1999, Paine Webber issued a report on Chubb, which was
 based on and repeated information provided in the April 27, 1999 conference
 call and in follow-up conversations with O'Hare.  The report increased the
 forecasted 1999 and 2000 EPS to $4.10 and $4.55 for Chubb.  It also stated:
 
      CB beat consensus with Q1 earnings of $1.02 vs. expectations of $0.97.
      Management's repricing strategy is clearly working to drive out
      underpriced business and garner average rate increases on what remains.
 
                                 *     *     *
 
      After a number of quarters of ratcheting down expectations, Chubb's first
      quarter of 1999 was a pleasant surprise.  In addition to stronger
      earnings than we were looking for from a better-than-expected combined
      ratio, management commented on rate movement in its books and predicted
      6% average rate increases by the end of the year with a combined ratio in
      the standard/commercial lines down from 118% to what the company hopes
      will be 109-110%.  [W]e believe this quarter was good enough to justify
      an increase in our estimates.
 
     8.  On April 27, 1999, Bear Stearns issued a report on Chubb, which was
 based on and repeated information provided in the April 27, 1999 conference
 call and in follow-up conversations with O'Hare.  The report forecast 1999 and
 2000 EPS of $4.35 and $4.80 and second quarter 1999 EPS of $1.05 for Chubb.
 It also stated:
 
      We are reiterating our aggressive Buy rating of Chubb shares, following
      the company's favorable commentary on its first quarter results and
      expectations for the balance of the year.  [I]mportantly, management
      indicated on the company's conference call that results were ahead of
      Chubb's own expectations.  In...standard commercial lines, the momentum
      is positive and is expected to continue to show better results for the
      balance of the year....
 
                                 *     *     *
 
      Mr. O'Hare's comment in response to one question was "This ship is
      turning around faster than I expected...."
 
                                 *     *     *
 
      Overall, Mr. O'Hare indicated that he is encouraged by results in the
      first quarter, and is rating his own expectations for premium growth to
      as much as 5% for the year, compared to previous guidance to flat
      premiums.
 
     9.  On April 28, 1999, Dowling & Partners Securities issued a report on
 Chubb, based on the April 27, 1999 conference call, forecasting 1999 and 2000
 EPS of $4.10 and $4.65 respectively.  It also stated:
 
      After becoming somewhat agitated at the tone of the questions concerning
      rate activity and renewal experience associated with standard commercial
      business.  [O'Hare] exclaimed, "You guys are so bloody negative it's
      disgusting.  We're trying to send a strong signal to you that things are
      getting better.  I don't know how else to say it....  This goddamned ship
      has turned faster than I thought it was going to but it's a big ship."
 
                                 *     *     *
 
      STANDARD COMMERCIAL MARKET.  In Q-3:98, [management] announced that it
      was accelerating actions to bring Chubb's Standard Commercial business
      back to profitability via price increases of 5-20%, non-renewals and
      culling of unprofitable business, "even if this aggressiveness results in
      lost business."  Chubb suggested that it is willing to lose as much as
      $250-300MM of this business "if we cannot maintain adequate prices...."
 
                                 *     *     *
 
      This quarter [management] updated analysts on the progress of the rating
      plan:
 
      "The pricing strategy we have been executing since late last year is
      having the intended impact.  We all know that you can't turn around a
      business of this size in one quarter but the signs bode well for the
      future.  All the indications are that we are keeping much of the business
      that we want to keep at higher rates and we are being very disciplined
      about walking away from under-priced accounts ... right now we are
      thinking that standard commercial lines in 1999 could be down by as much
      as $200MM but it would be a lot more profitable."
 
      Who would pick up this business?  "As long as there are a-holes present,
      and boy there are still two for sure, this is going to happen."
 
     10.  On April 28, 1999, Prudential Securities issued a report on Chubb,
 which was based on and repeated information provided in the April 27, 1999
 conference call and in follow-up conversations with O'Hare.  The report
 forecast 1999 and 2000 EPS of $4.28 and $4.70 for Chubb.  It also stated:
 
      THE FIRST GOOD NEWS FROM CHUBB IN A LONG TIME
 
      Following a string of earnings disappointments and deteriorating patterns
      of underwriting performance in the standard commercial lines, Chubb made
      progress on all fronts in the first quarter.  EPS of $1.02... beat... the
      Street consensus of $0.97....
 
      [F]ollowing the very disappointing fourth quarter, Chubb aggressively
      implemented repricing strategies to return its standard commercial lines
      margins to satisfactory levels.  Dean O'Hare, Chubb's Chairman and Chief
      Executive Officer sent out a strong signal that pricing initiatives are
      working, renewal rate increases are sticking and "the signs bode well for
      the future."  We are raising our 1999 EPS for Chubb to $4.20 and $4.75.
 
                                 *     *     *
 
      Chubb Corp. management ended its first quarter 1999 teleconference with
      the following statement.  "[We are] trying to send a strong signal that
      things are getting better, the ship is turning around faster [than we]
      originally thought...."  Specifically, the actions instituted to turn
      around the standard commercial line book of business will prove
      successful, thereby enabling this historically superior underwriter to
      enhance its future growth rate by attaining its targeted 5% underwriting
      profit margin pre-catastrophe related losses....  After reviewing the
      better than expected initial quarter 1999 results, we raised our 1999 and
      2000 per share earning estimates....
 
                                 *     *     *
 
      By year end, management expects to...increase renewal rates by better
      than 6%, while keeping retentions above 65% and in turn significantly
      improving the book's profitability.
 
     11.  The plaintiffs allege in their complaint that the statements made on
 April 27, 1999 and April 28, 1999, that Chubb's "favorable first quarter
 results reflect positive trends in all three major segments" of Chubb's
 business, that Chubb had successfully stabilized its standard commercial
 insurance business, which now had positive "momentum" due to Chubb
 management's "aggressive" actions to increase standard commercial insurance
 premiums because "renewal rate increases [were] sticking," and that Chubb
 expected standard commercial insurance premium growth to move "rather rapidly"
 to 5-1/2%-6%, compared to the flat premium growth earlier forecast, which
 would enable Chubb's standard commercial insurance business to achieve a 5%
 underwriting profit margin leading to 1999 EPS of $4.10+ and 2000 EPS of
 $4.55+ -- higher results than earlier forecast because Chubb's "ship [was]
 turning quicker" than originally thought -- were false when made.  According
 to the allegations in the Complaint, the true facts -- known to defendants,
 but which they concealed -- were: (a) Chubb's aggressive actions to raise
 prices on its standard commercial insurance policies and accept substantial
 non-renewals to boost operating results of those lines was not working, let
 alone exceeding management's expectations, because the rate increases were not
 sticking and Chubb's standard commercial insurance underwriting losses were
 increasing; (b) The rate increases that were, in fact, being obtained on new
 and renewal standard commercial insurance policies were very small and well
 below the levels necessary to have any materially favorable impact on Chubb's
 1999 results, or even to lessen the growing underwriting losses in Chubb's
 standard commercial insurance business; (c) Chubb was, in fact, not
 maintaining a disciplined approach to renewing standard commercial insurance
 and was renewing hundreds of millions of dollars of standard commercial
 insurance policies at premium levels Chubb knew were unprofitable and thus
 would adversely impact Chubb's results going forward; (d) Chubb's aggressive
 action to raise prices on its standard commercial insurance policies and
 accept substantial non-renewals to boost operating results of those lines,
 even if successful would not have any significant positive impact on Chubb's
 financial results during 1999 and, in fact, Chubb's standard commercial
 insurance problems would continue to very adversely impact Chubb's results
 throughout most of 1999; (e) Chubb's reserves for its property and marine
 insurance line had been manipulated by reserve reductions which were not
 justified; (f) Chubb's standard commercial insurance business had not
 stabilized as, due to weak premium growth and increasing losses, the combined
 ratio on these lines of business was still increasing and would continue to
 increase throughout 1999 (excluding catastrophes), leading to larger than ever
 losses in these lines of business; (g) Chubb's standard commercial insurance
 business was not encountering strong positive momentum or positive trends.
 Due to weak premium growth and increasing losses, the combined ratio on these
 lines of business was still increasing and would continue to increase
 throughout 1999 (excluding catastrophes), leading to larger than ever losses
 in these lines of business; (h) Chubb's strategy of renewing only at good
 prices would not have any significant impact on Chubb's results until at least
 mid-2000, as it would take "at least two annual renewal cycles" for Chubb to
 reprice the standard commercial lines premiums and after the premiums were
 repriced it would take another year for the higher premiums to be earned into
 income.  Chubb concealed this key fact from its public disclosures until after
 the merger closed; (i) Chubb's better than expected first quarter 1999 results
 were not the result of favorable developments or trends in Chubb's standard
 commercial insurance business as represented, in fact, Chubb's first quarter
 1999 results had been deliberately falsified in order to artificially and
 improperly boost Chubb's reported EPS and to conceal the continued serious
 deterioration in its standard commercial insurance business; (j) As a result
 of the foregoing negative conditions which were adversely impacting Chubb's
 business, defendants knew that Chubb's forecasts of 5-1/2%-6% premium growth
 for its standard commercial insurance business during 1999 and a falling
 combined ratio for its standard commercial insurance business were false and
 could not be obtained; and (k) As a result of the foregoing negative factors
 which were adversely impacting Chubb's business, defendants knew Chubb's
 forecasts of 1999 EPS of $4.10+ and 2000 EPS of $4.50+ were false when made
 and could not and would not be achieved, even if Chubb suffered no catastrophe
 losses and even if Chubb achieved its repricing objectives in standard
 commercial insurance.
     12.  On May 7, 1999, Bloomberg issued a report on Chubb, based on
 information from defendants, stating:
 
      Chubb Corp. shares gained 19 percent this week, as the 14th-largest U.S.
      property and casualty insurer was seen benefitting from lower losses on
      commercial policies and regulatory reform legislation.  Shares of the
      Warren, New Jersey, company advanced 11 1/6, including a 5 1/2-point jump
      today, to a four-month high of 70 5/16....
 
      The rebound was "overdue" said spokeswoman Gail Devlin, and was a
      "recognition that the shares were undervalued." She said "there may be
      more ahead."
 
      On May 19, 1999, O'Hare held a private meeting with securities analysts,
      institutional investors and money managers in Boston.  During these
      discussions, O'Hare forecast 1999 EPS of $4.28 and 2000 EPS of $4.70 for
      Chubb.  On May 12, 1999, Prudential Securities issued a report on the
      O'Hare briefing, stating:
 
      On Wednesday, May 12, Dean O'Hare, Chairman and Chief Executive Officer
      of Chubb Corporation met with members of the Boston investment community
      ....  We received an update on pricing initiatives in the troubled
      standard commercial lines, with an indication that pricing momentum
      continues to build.  An improvement in underwriting results in this area
      is expected as the year unfolds.
 
                                 *     *     *
 
      Here is what Chairman O'Hare said.
 
      BUILDING ON PREMIUM RATE INCREASES IN THE STANDARD COMMERCIAL LINES
      Today, we received another piece of confirmation that Chubb's pricing
      strategies are working.  Premium rates for the standard commercial lines
      rose 4% in the first week of May, following increases of 3.2% in April
      and 2.2% in March.  Retention rates remain in the low 70s.  New business
      that is going on the books has been intensely audited and the company is
      very comfortable with the pricing.
 
                                 *     *     *
 
      Chubb's financial models indicate its stock is worth $102-l40 per share.
      Mr. O'Hare stated that a value of $128 per share is realistic in today's
      market....
 
     13.  On May 14, 1999, Chubb filed its report on Form 10-Q for the first
 quarter 1999 with the SEC, which reported Chubb's previously publicly reported
 first quarter financial results.  The first quarter 10-Q was signed by Schram.
 It stated:
 
      Premiums from standard commercial insurance, which represent 35% of our
      total writings, decreased by 3.9% in the first quarter of 1999 compared
      with the same period a year ago.  The decrease was the results of the
      strategy we put in place in late 1998 to renew good business at adequate
      prices and not renew underperforming accounts where we cannot attain
      price adequacy.  On that business that was renewed, rates increased
      modestly in the first quarter of 1999 and we expect this trend to
      continue.
 
     14.  On June 2, 1999, O'Hare was the main dinner speaker at DLJ's First
 Annual Insurance Conference, which was attended by large Chubb shareholders,
 securities analysts, institutional investors and money managers.  During his
 speech -- and in private conversations with attendees -- O'Hare stated:
 
      Management's actions to turn around Chubb's standard commercial insurance
      operations by raising prices and not renewing unprofitable policies were
      not only working, in fact, they were exceeding management's expectations.
      Chubb's standard commercial insurance operations would show 5-1/2%-6%
      premium growth throughout 1999, as Chubb's rate increases for new or
      renewal standard commercial insurance policies were sticking.
 
      The momentum of rate increases in Chubb's standard commercial insurance
      operations was growing month by month.
 
      Chubb was being successful at retaining the higher priced standard
      commercial insurance business which it desired and was profitable.
 
      Chubb was not losing as much of its standard commercial insurance
      business due to rate increases as it had feared.
 
      The combined ratio of Chubb's standard commercial insurance business
      would decline throughout 1999, to about 110% by year-end from 119.5% at
      year-end 1998.
 
      The changes in Chubb's standard commercial insurance business would
      produce an underwriting profit by 2000 and a 6% total return on equity by
      2001.  Chubb's stock was undervalued and, based on its improving business
      situation, the stock was worth between $102-$140 per share.
 
      O'Hare was very optimistic about the future performance of Chubb's
      business, in part due to the turnaround of its standard commercial
      insurance business.  As a result of the better than expected pace of the
      turnaround of Chubb's standard commercial insurance business, Chubb had
      increased its forecasted 1999 EPS to $4.10+ and its 2000 EPS to $4.70+.
 
     15.  On June 3, 1999, DLJ issued a report on Chubb which was based on and
 repeated information provided at the June 2, 1999 dinner, including private
 conversations with O'Hare.  The report forecast 1999 and 2000 EPS of $4.35 and
 $5.05 and second quarter 1999 EPS of $1.06 for Chubb and stated:
 
      Last night, Chairman and CEO of the Chubb Corp., Dean O'Hare, was the
      guest speaker at the concluding dinner of DLJ's first annual Insurance
      Conference.
 
      SIGNIFICANT COMMENTS MADE INCLUDE:
      CB's execution of its turnaround strategy in its standard commercial
      lines business (roughly 35% of premiums written) is exceeding
      management's expectation.
 
                                 *     *     *
 
      Management expects that the overall combined ratio, ex catastrophes, will
      improve steadily due to expense reductions, claims management, and the
      repricing or non-renewing of unprofitable standard commercial business.
 
     16.  On June 15, 1999, O'Hare held a private luncheon for several
 securities analysts that followed Chubb.  During the luncheon, O'Hare stated:
 "I know I have been criticized at times for being too optimistic," but "I am
 more optimistic than usual," and he was "quite confident [he was] sending the
 correct signal as far as overall trends are concerned," as "Chubb [was]
 significantly outperforming most of its peers with respect to implementing
 renewal price increases on standard commercial business."  He added as to the
 turn in standard commercial lines, "We're going to make it happen" which would
 lead to "a 6% return on equity" by late 2000 in the standard commercial lines.
     17.  The plaintiffs allege in their Complaint that the statements made
 between May 7, 1999 and June 15, 1999 that Chubb's stock was "undervalued" and
 there may be "more good news ahead," that Chubb's standard commercial
 insurance business' favorable pricing momentum "continues to build," that the
 turnaround of this business was "exceeding management's expectations," that
 the new standard commercial insurance being accepted by Chubb had been
 "intensely audited" and Chubb was now "very comfortable with the pricing,"
 that these premiums had increased "modestly" in the first quarter 1999 and, as
 a result, Chubb's standard commercial insurance combined ratio (excluding
 catastrophe) would improve steadily in 1999-2000 due to Chubb's rate
 increase/policy non-renewal strategy, and that O'Hare was "more optimistic
 than usual" and Chubb was forecasting 1999 EPS of $4.20+ and 2000 EPS of
 $4.70+, and thus that Chubb's own financial models -- reflecting these more
 favorable trends -- showed Chubb's stock was worth $102-$140 per share and
 that a $128 price was "realistic in today's market," were false when made.
 According to the allegations in the Complaint, the true facts -- known to
 defendants, but which they concealed -- were: (a) Chubb's aggressive actions
 to raise prices on its standard commercial insurance policies and accept
 substantial non-renewals to boost operating results of those lines was not
 working, let alone exceeding management's expectations, because the rate
 increases were not sticking and Chubb's standard commercial insurance
 underwriting losses were increasing; (b) The rate increases that were, in
 fact, being obtained on new and renewal standard commercial insurance policies
 were very small and well below the levels necessary to have any materially
 favorable impact on Chubb's 1999 results, or even to lessen the growing
 underwriting losses in Chubb's standard commercial insurance business; (c)
 Chubb was, in fact, not using a disciplined approach to standard commercial
 insurance renewals and was renewing hundreds of millions of dollars of
 standard commercial insurance policies at premium levels Chubb knew were
 unprofitable and thus would aversely impact Chubb's results going forward; (d)
 Chubb's aggressive action to raise prices on its standard commercial insurance
 policies and accept substantial non-renewals to boost operating results of
 those lines, even if successful, would not have any significant positive
 impact on Chubb's financial results during 1999 and, in fact, Chubb's standard
 commercial insurance problems would continue to very adversely impact Chubb's
 results throughout most of 1999; (e) Chubb's reserves for its property and
 marine insurance line had been manipulated by reserve reductions which were
 not justified; (f) Chubb's standard commercial insurance business had not
 stabilized as, due to weak premium growth and increasing losses, the combined
 ratio on these lines of business was still increasing and would continue to
 increase throughout 1999 (excluding catastrophes), leading to larger than ever
 losses in these lines of business; (g) Chubb's standard commercial insurance
 business was not encountering strong positive momentum or positive trends.
 Due to weak premium growth and increasing losses, the combined ratio on these
 lines of business was still increasing and would continue to increase
 throughout 1999 (excluding catastrophes), leading to larger than ever losses
 in these lines of business; (g) Chubb's standard commercial insurance business
 was not encountering strong positive momentum or positive trends.  Due to weak
 premium growth and increasing losses, the combined ratio on these lines of
 business was still increasing and would continue to increase throughout 1999
 (excluding catastrophes), leading to larger than ever losses in these lines of
 business; (h) Chubb's strategy of renewing only at good prices would not have
 any significant impact on Chubb's results until at least mid-2000, as it would
 take "at least two annual renewal cycles" for Chubb to reprice the standard
 commercial lines premiums, and after the premiums were repriced it would take
 another year for the higher premiums to be earned into income.  Chubb
 concealed this key fact from its public disclosures until after the merger
 closed; (i) Chubb's better than expected first quarter 1999 results were not
 the result of favorable developments or trends in Chubb's standard commercial
 insurance business as represented; in fact, Chubb's first quarter 1999 results
 had been deliberately falsified in order to artificially and improperly boost
 Chubb's reported EPS and to conceal the continued serious deterioration in its
 standard commercial insurance business; (j) As a result of the foregoing
 negative conditions which were adversely impacting Chubb's business,
 defendants knew that Chubb's forecasts of 5-1/2%-6% premium growth for its
 standard commercial insurance business during 1999 and a falling combined
 ratio for its standard commercial insurance business were false and could not
 be obtained; and (k) As a result of the foregoing negative factors which were
 adversely impacting Chubb's business, defendants knew Chubb's forecasts of
 1999 EPS of $4.20+ and 2000 EPS of $4.70+ were false when made and could not
 and would not be achieved, even if Chubb suffered no catastrophe losses and
 even if Chubb achieved its repricing objectives in standard commercial
 insurance.
     18.  On June 17, 1999, Chubb and Executive Risk filed the final version of
 their Registration Statement and Merger Proxy with the SEC relating to the
 proposed merger, which became effective that day.  The Registration Statement
 was signed by O'Hare, Kelso and Schram, who were also associated with and
 identified in the Merger Proxy.  Sills, Kullas and Deutsch wrote the Merger
 Proxy and were associated with and identified in the Merger Proxy.  The record
 date on the merger was June 17, 1999.  The Merger Proxy was mailed to
 Executive Risk's shareholders on June 18, 1999 to secure Executive Risk's
 shareholders' approval of the proposed sale of their company to Chubb for
 1.235 shares of Chubb stock for each Executive Risk share.  The Merger Proxy
 stated:
 
      We cannot complete the merger without the approval of the holders of a
      majority of the outstanding shares of Executive Risk common stock.  After
      careful consideration, your board of directors has unanimously approved
      the merger agreement and determined that the merger is in the best
      interest of Executive Risk and its shareholders.  The board of directors
      unanimously recommends that you vote FOR the merger agreement.  In
      arriving at its determination and recommendation, the board of directors
      took into account the factors described in the attached proxy
      statement/prospectus, including the opinions of Donaldson, Lufkin &
      Jenrette Securities Corporation and Salomon Smith Barney Inc. to the
      effect that the merger consideration is fair to Executive Risk
      shareholders from a financial point of view.
 
     The Merger Proxy also stated:
 
      What Executive Risk Shareholders Will Receive in the Merger
      You will receive 1.235 Chubb shares for each Executive Risk share you
      hold...  Based on the number of shares of Executive Risk common stock
      outstanding on June 15, 1999 and the closing price of $70.56 per share of
      Chubb stock on that date, Chubb would issue approximately 14.28 million
      shares to the stockholders of Executive Risk with an aggregate value of
      approximately $1,007.5 million.
 
     19.  The Merger Proxy incorporated Chubb's first quarter 1999 10-Q by
 reference and included Chubb's recent financial results:
 
      The data as of March 31, 1999 and 1998 and for the three months ended
      March 31, 1999 and 1998 have been derived from Chubb's unaudited
      consolidated financial statements which include, in the opinion of
      Chubb's management, all adjustments, consisting of normal recurring
      accruals, necessary to present fairly the results of operations and
      financial position of Chubb for the periods and dates presented....
 
                                                   For the Three Months
                                                        Ended March 31,
 
                                                      1999          1998
     Total revenues                               $1,629.6      $1,587.3
     Operating Income from continuing
       operations**                                 $166.4        $162.8
     Realized investment gains from continuing       $20.5         $29.0
       operations**                                 $186.9        $19l.8*
 
     Operating income from continuing                $1.02          $.95*
       operations per diluted common shares**
 
     Income from continuing operations per           $1.14         $1.12*
       diluted common shares
 
      *  Property and casualty insurance income and income from continuing
      operations have been reduced by a net charge of $26.0 million or $.15 per
      hare for the after-tax effect of a $40.0 million restructuring charge.
 
      **  Operating income for continuing operations is defined as income from
      continuing operations excluding realized gains, net of tax.
 
     20.  The Merger Proxy set forth how the recent strong increase in Chubb's
 stock price made the sale of Executive Risk to Chubb much more advantageous to
 Executive Risk public shareholders:
 
      The table...sets forth the value of the shares of Chubb common stock that
      a stockholder would have received for one share of Executive Risk common
      stock assuming the merger has taken place on those dates....
 
 
                    Closing Price of     Closing Price of    Value of Chubb
                    Chubb Common Stock   Executive Risk      Common Stock
                                         Common Stock        Received
 
     February 5, 1999       $58.06           $44.00          $71.70
     June 15, 1999          $70.56           $87.50          $87.14
 
     Based on these stock prices, the total consideration to be paid to
 Executive Risk's shareholders had increased from $839 million on February 5,
 1999 to $1.019 billion on June 15, 1999.
 
     21.  The plaintiffs allege in their complaint that the June 17, 1999
 Registration Statement and Merger Proxy and the oral proxy statements
 identified above were false and misleading and concealed material information
 because: (a) The merger was not in the best interests of Executive Risk's
 public shareholders as the price of the Chubb stock they were to receive in
 exchange for their Executive Risk stock was artificially inflated due to the
 false statements and accounting manipulations detailed herein; (b) The merger
 consideration to be received by Executive Risk's public shareholders was not
 fair as the price of the Chubb stock they were to receive in exchange for
 their Executive Risk stock was artificially inflated due to the false
 statements and accounting manipulations detailed herein; (c) Chubb's
 aggressive actions to raise prices on its standard commercial insurance
 policies and accept substantial non-renewals to boost operating results of
 those lines was not working, let alone exceeding management's expectations,
 because the rate increases were not sticking and Chubb's standard commercial
 insurance underwriting losses were increasing; (d) Chubb's strategy of
 renewing only at good prices would not have any significant impact on Chubb's
 results until at least mid-2000, as it would take "at least two annual renewal
 cycles" for Chubb to reprice the standard commercial lines premiums, and after
 the premiums were repriced it would take another year for the higher premiums
 to be earned into income.  Chubb concealed this key fact from its public
 disclosures until after the merger closed; (e) Chubb was, in fact, not
 maintaining a disciplined approach to standard commercial insurance renewals
 and was renewing hundreds of millions of dollars of standard commercial
 insurance policies at premium levels Chubb knew were unprofitable and thus
 would adversely impact Chubb's results going forward; (f) The rate increases
 that were, in fact, being obtained on new and renewal standard commercial
 insurance policies were very small and well below the levels necessary to have
 any materially favorable impact on Chubb's 1999 results, or even to lessen the
 growing underwriting losses in Chubb's standard commercial insurance business;
 (g) Chubb's aggressive action to raise prices on its standard commercial
 insurance policies and accept substantial non-renewals to boost operating
 results of those lines, even if successful, would not have any significant
 positive impact on Chubb's financial results during 1999 and, in fact, Chubb's
 standard commercial insurance problems would continue to very adversely impact
 Chubb's results throughout most of 1999; (h) Chubb's standard commercial
 insurance business had not stabilized as, due to weak premium growth and
 increasing losses, the combined ratio on these lines of business was still
 increasing and would continue to increase throughout 1999 (excluding
 catastrophes), leading to larger than ever losses in these lines of business;
 (i) Chubb's standard commercial insurance business was encountering weak
 premium growth and increasing losses, and the combined ratio on these lines of
 business was still increasing and would continue to increase throughout 1999
 (excluding catastrophes), leading to larger than ever losses in these lines of
 business; (j) Chubb's better than expected first quarter 1999 results were not
 the result of favorable developments or trends in Chubb's standard commercial
 insurance business as represented, in fact, Chubb's first quarter 1999 results
 had been deliberately falsified in order to artificially and improperly boost
 Chubb's reported EPS and to conceal the continued serious deterioration in its
 standard commercial insurance business; (k) As a result of the foregoing
 negative conditions which were adversely impacting Chubb's business,
 defendants' forecasts of 5-1/2%-6% premium growth for Chubb's standard
 commercial insurance business during 1999 and a falling combined ratio for its
 standard commercial insurance business were false and could not be obtained;
 and (l) As a result of the foregoing negative factors which were adversely
 impacting Chubb's business, Chubb's forecasts of 1999 EPS of $4.20+ and 2000
 EPS of $4.70 were false when made and could not and would not be achieved,
 even if Chubb suffered no catastrophe losses and even if Chubb achieved its
 repricing objectives in standard commercial insurance.
     22.  On June 25, 1999, Bear Stearns met privately with O'Hare and other
 top Chubb executives to receive a briefing about Chubb's business.  On June
 28, 1999, Bear Stearns issued a report on Chubb, which was based on and
 repeated the information Chubb's executives had given it on June 25, 1999.
 The report stated:
 
      We are reiterating our aggressive Buy rating of Chubb shares, following a
      private meeting with management Friday.  We expect that, as Chubb
      continues to meet and exceed "Street" earnings expectations, the shares
      will be revalued back toward historical relative valuations....
 
      Chubb's CEO Dean O'Hare noted that the company's repricing/reunderwriting
      project in the standard commercial lines (approximately 30% of Chubb's
      total business) continues to make progress....
 
      One of the issues concerning investors earlier this year was the decline
      in retentions (the amount of business successfully renewed) that Chubb
      saw when it first began its repricing efforts.  However, according to the
      company, the decline in retentions appears to have bottomed, and
      management expects these figures to begin to move higher.
 
     23.  According to the allegations in the Complaint, the true facts --
 known to defendants, but which were concealed were: (a) Chubb's aggressive
 actions to raise prices on its standard commercial insurance policies and
 accept substantial non-renewals to boost operating results of those lines was
 not working, let alone exceeding management's expectations, because the rate
 increases were not sticking and Chubb's standard commercial insurance
 underwriting losses were increasing; (b) The rate increases that were, in
 fact, being obtained on new and renewal standard commercial insurance policies
 were very small and well below the levels necessary to have any materially
 favorable impact on Chubb's 1999 results, or even to lessen the growing
 underwriting losses in Chubb's standard commercial insurance business; (c)
 Chubb's aggressive action to raise prices on its standard commercial insurance
 policies and accept substantial non-renewals to boost operating results of
 those lines, even if successful, would not have any significant positive
 impact on Chubb's financial results during 1999 and, in fact, Chubb's standard
 commercial insurance problems would continue to very adversely impact Chubb's
 results throughout all of 1999; (d) Chubb's reserves for its property and
 marine insurance lines had been manipulated by reserve reductions which were
 not justified; (e) Chubb's standard commercial insurance business had not
 stabilized as, due to weak premium growth and increasing losses, the combined
 ratio on these lines of business was still increasing and would continue to
 increase throughout 1999 (excluding catastrophes), leading to larger than ever
 losses in these lines of business; (f) Chubb's standard commercial insurance
 business was not encountering strong positive momentum or positive trends.
 Due to weak premium growth and increasing losses, the combined ratio on these
 lines of business was still increasing and would continue to increase
 throughout 1999 (excluding catastrophes), leading to larger than ever losses
 in these lines of business; (g) Chubb's strategy of renewing only at good
 prices would not have any significant impact on Chubb's results until at least
 mid-2000, as it would take "at least two annual renewal cycles" for Chubb to
 reprice the standard commercial lines premiums, and after the premiums were
 repriced it would take another year for the higher premiums to be earned into
 income.  Chubb concealed this key fact from its public disclosures until after
 the merger closed; (h) Chubb was, in fact, renewing millions of dollars of
 standard commercial insurance policies at premium levels Chubb knew were
 unprofitable and thus would adversely impact Chubb's results going forward;
 (i) Chubb's better than expected first quarter 1999 results were not the
 result of favorable developments or trends in Chubb's standard commercial
 insurance business as represented, in fact, Chubb's first quarter 1999 results
 had been deliberately falsified in order to artificially and improperly boost
 Chubb's reported EPS and to conceal the continued serious deterioration in its
 standard commercial insurance business; (j) Chubb was actually losing more
 standard commercial insurance business than stated and was writing less new
 standard commercial insurance than stated; (k) As a result of the foregoing
 negative factors which were adversely impacting Chubb's business, defendants
 knew Chubb's forecasts of 5-1/2%-6% premium growth for its standard commercial
 insurance business during 1999 and a falling combined ratio for its standard
 commercial insurance business were false and could not be obtained; and (l) As
 a result of the foregoing negative factors which were adversely impacting
 Chubb's business, defendants knew Chubb's forecasts of 1999 EPS of $4.20+ and
 2000 EPS of $4.70+ were false when made and could not and would not be
 achieved, even if Chubb suffered no catastrophe losses and even if Chubb
 achieved its repricing objectives in standard commercial insurance.
     24.  On July 27, 1999, just eight days after Executive Risk's shareholders
 approved the sale of their company to Chubb in return for stock, Chubb
 reported second quarter 1999 operating income of $1.00 per share -- well below
 expected results.  Chubb's release stated:
 
      Standard commercial lines premiums in the second quarter declined 9% to
      $455.4 million and had a combined ratio of 120.8%.
 
      "Given the moderate magnitude of rate increases in the early stages of
      the repricing program," said Mr. O'Hare, "it will take at least two
      renewal cycles to adequately reprice the entire standard commercial book,
      and during that time we will continue to have losses from non-renewed
      policies.  Thus it will be mid-2000 before the benefits of these actions
      significantly flow to the bottom line."
 
     25.  On July 27, 1999, subsequent to the release of its second quarter
 1999 results, Chubb held a conference call for analysts, money and portfolio
 managers, institutional investors and large Chubb shareholders to discuss
 Chubb's second quarter 1999 results, its business and its prospects.  During
 the call -- and in follow-up conversations with analysts -- O'Hare and Kelso
 stated:
 
      Management's actions to turn around Chubb's standard commercial insurance
      operations by raising prices and not renewing unprofitable policies were
      in fact working, but would take longer than expected to benefit Chubb's
      EPS.
 
      The rate increases in Chubb's standard commercial insurance operations
      were still growing.
 
      The combined ratio of Chubb's standard commercial insurance business
      would decline during the balance of 1999.
 
      The changes in Chubb's standard commercial insurance business would
      produce an underwriting profit by 2000 and a 6% total return on equity by
      2001.
 
     26.  Subsequent to the July 27, 1999 conference call, O'Hare and Kelso had
 private one-on-one conversations with analysts from Paine Webber, DLJ,
 Prudential Securities and Bear Stearns, during which they repeated the
 information from the July 27, 1999 conference call and also told them that the
 rate increase/policy non-renewal initiative was working and Chubb still
 expected 1999 EPS of over $4.00 and 2000 EPS of over $4.50.
     27.  On July 27, 1999, PaineWebber issued a report on Chubb, which was
 based on and repeated information provided in the July 27, 1999 conference
 call and in follow-up conversations with O'Hare, Kullas and Sills.  The report
 cut the forecasted 1999 and 2000 EPS for Chubb to $4.10 and $4.55.  It also
 stated:
 
      In what was perceived as a shocking disappointment, Chubb reported flat
      premiums for the second quarter with earnings...short of the Street
      consensus....
 
      Management dampened its earlier enthusiasm for improving market
      conditions which had ratcheted up expectations early in the second
      quarter.
 
                                 *     *     *
 
      The bad news: Total standard commercial business shrank 9.0% more than
      expected.  The combined ratio remained unacceptably high at 120.8%.
      Commercial multiperil results were terrible .... Premiums in total were
      flat rather than up about 5% as expected.
 
      CEO Dean O'Hare stated: "I might have actually gotten a little bit
      euphoric that we could do this turnaround of standard commercial lines
      without any real disturbance of the premium pattern, Q2 has brought me
      back to where I started.  I'm not in any way discouraged but I admit to
      being somewhat overly optimistic at the end of the first quarter...."
 
      He also noted: "we are losing more business than we did in the first
      quarter and we're writing less new business than we did in the first
      quarter."
 
                                 *     *     *
 
      Management stated that it will take at least two renewal cycles to
      adequately reprice the entire standard commercial book.  It will be mid
      2000 before these actions have a significant impact on the bottom line.
 
     28.  On July 27, 1999, Prudential Securities issued a report on Chubb,
 which was based on and repeated information provided in the July 27, 1999
 conference call and in follow-up conversations with O'Hare, Kullas and Sills.
 The report cut the forecasted 1999 EPS for Chubb to $4.07.  It also stated:
 
      First quarter trends were very encouraging.  As you recall, following the
      very disappointing fourth quarter, Chubb aggressively implemented pricing
      strategies to return its standard commercial lines margins to
      satisfactory levels.  Chubb made progress on all fronts in the first
      quarter and management believed that the company had a good shot at
      increasing its total premiums by as much as 5% for the year (excluding
      any contribution from Executive Risk) for 1999 compared with its earlier
      projection of flat premiums.
 
      Management is not in any way discouraged by the second quarter trends.
      Rate increases continue to build momentum....  Management is returning to
      its initial projection of flat premiums for the year with the
      anticipation that it will lose about $200 million in standard commercial
      premiums, or about 10% of the standard commercial book.
 
                                 *     *     *
 
      Standard commercial results were awful ....  The total standard
      commercial book reported a combined ratio of 120.8% slightly better than
      a year ago but deteriorated from the 117.9% reported in the first
      quarter.
 
     29.  On July 28, 1999, DLJ issued a report on Chubb which was based on and
 repeated information provided in the July 27, 1999 conference call and in
 follow-up conversations with O'Hare, Kullas and Sills.  The report cut the
 forecasted 1999 EPS for Chubb to $4.25.  It also stated:
 
      A month ago Chairman and CEO Dean O'Hare was enthusiastically optimistic
      that the turnaround in the standard commercial book might occur ahead of
      schedule based on trends seen mid-quarter.
 
      HOWEVER, on yesterday's conference call he stated that he had been overly
      optimistic and returned to expect CB's original targets.
 
      We are lowering our 1999 estimate to $4.25 per share from $4.35 to
      incorporate trends in the 2Q99 results.
 
      THERE IS GOOD NEWS: CB's turnaround strategy remains on target with
      original expectations.
 
     30.  The plaintiff's allege in their complaint that Chubb's stock
 continued to trade at artificially inflated levels throughout the balance of
 the Class Period due to Chubb's failure to make a full and complete disclosure
 of the adverse facts and conditions then impacting Chubb's business and
 Chubb's continued false and misleading statements.  According to the
 allegations in the Complaint, the true facts -- known by defendants, but which
 they concealed -- were that: (a) Chubb's action to raise prices on its
 standard commercial insurance policies and accept substantial non-renewals to
 boost operating results of those lines had failed; (b) The combined ratio on
 these lines of business was still increasing and would continue to increase
 throughout 1999 (excluding catastrophes), which would hurt Chubb's EPS in
 1999; (c) Chubb's standard commercial insurance business was encountering
 increasing losses due to weak premium growth and the combined ratio on these
 lines of business was still increasing and would continue to increase
 throughout 1999 (excluding catastrophes); (d) Even if Chubb was able to raise
 prices on its standard commercial insurance lines and shed unprofitable
 policies, this would not have any material positive impact on Chubb's results
 until at least two renewal cycles, i.e., late in 2000, at the earliest; (e) As
 a result of the foregoing, defendants knew that Chubb's forecast of 5-1/2%-6%
 premium growth for its standard commercial insurance business during 1999 was
 false and could not be obtained; (f) As a result of the foregoing negative
 factors which were adversely impacting Chubb's business, defendants knew
 Chubb's forecasts of 1999 EPS of $4.00+ and 2000 EPS of $4.50+ were false when
 made and could not and would not be achieved, even if Chubb suffered no
 catastrophe losses.
 
 

SOURCE Milberg Weiss Bershad Hynes & Lerach LLP
    SAN DIEGO, April 12 /PRNewswire/ -- This Notice of Pendency of Action
 replaces and supersedes a prior notice published on August 30, 2000, which,
 pursuant to a Court Order dated January 10, 2001, was found deficient.
     This lawsuit was filed as a class action on August 31, 2000 in the United
 States District Court for the District of New Jersey by the California Public
 Employees' Retirement System ("CalPERS") on behalf of purchasers of The Chubb
 Corporation ("Chubb") (NYSE:   CB) common stock during the period between
 April 27, 1999 and October 15, 1999 (the "Class Period"), including the former
 shareholders of Executive Risk Inc. ("Executive Risk") who exchanged their
 Executive Risk shares for Chubb stock in July 1999 (the "Proposed Class").
 The title of the action is California Public Employees' Retirement System v.
 The Chubb Corporation et al., No. 3:00-CV-04285 (GEB), United States District
 Court for the District of New Jersey.  The action is assigned to the Honorable
 Garrett E. Brown, Jr., and the case files (including the Complaint) are
 located in the clerk's office at the United States District Court, Clarkson S.
 Fisher Federal Building and U.S. Courthouse, 402 East State Street, Trenton,
 New Jersey 08608.
     The named plaintiff is CalPERS.  The defendants are Chubb, Executive Risk
 Inc. ("Executive Risk"), Dean R. O'Hare, Chubb's Chairman and Chief Executive
 Officer, Henry B. Schram, Chubb's Senior Vice President and Chief Accounting
 Officer, David B. Kelso, Chubb's Executive Vice President and Chief Financial
 Officer, Stephen J. Sills, President and CEO of Executive Risk, Robert H.
 Kullas, Chairman of Executive Risk, and Robert V. Deutsch, Executive Vice
 President and Chief Financial Officer of Executive Risk.
     The purpose of this Notice is to inform all class members of their right
 to move the court for appointment as Lead Plaintiff, and also to provide
 sufficient information about the action so that they can make an informed and
 reasoned judgment about whether they should seek Lead Plaintiff status.  The
 Private Securities Litigation Reform Act (the "PSLRA") provides that the Court
 shall appoint as Lead Plaintiff the member or members of the class that the
 Court determines to be most capable of adequately representing the interests
 of class members.  In determining the "most adequate plaintiff," the PSLRA
 provides that the Court shall adopt a rebuttable presumption that the most
 adequate plaintiff is the person or group of persons that has either filed a
 complaint or made a motion for appointment as Lead Plaintiff, has the largest
 financial interest in the relief sought by the class, and otherwise satisfies
 the requirements of Rule 23 of the Federal Rules of Civil Procedure.  15
 U.S.C. section 78u-4(a)(3)(iii).  At the Lead Plaintiff selection stage, this
 latter requirement involves a preliminary showing that the proposed Lead
 Plaintiff's claims are typical of claims of the class members, and that the
 Lead Plaintiff will be an adequate representative of the class.  Any member of
 the alleged class may seek to be appointed as Lead Plaintiff, even if that
 person has not filed a complaint.
     The PSLRA sets forth the following requirements, among others, for any
 person seeking to serve as a representative:
     Each plaintiff seeking to serve as a representative party on behalf of a
 class shall provide a sworn certification, which shall be personally signed by
 such plaintiff and filed with the complaint, that:
 
     (1) states that the plaintiff has reviewed the complaint and authorized
         its filing;
 
     (2) states that the plaintiff did not purchase the security that is the
         subject of the complaint at the direction of the plaintiff's counsel
         or in order to participate in any private action arising under this
         chapter;
 
     (3) states that the plaintiff is willing to serve as a representative
         party on behalf of a class, including providing testimony at
         deposition and trial, if necessary;
 
     (4) sets forth all of the transactions of the plaintiff in the security
         that is the subject of the complaint during the class period specified
         in the complaint;
 
     (5) identifies any other action under this chapter, filed during the
         three-year period preceding the date on which the certification is
         signed, in which the plaintiff has sought to serve as a representative
         party on behalf of a class; and
 
     (6) states that the plaintiff will not accept any payment for serving as a
         representative party on behalf of a class beyond the plaintiffs' pro-
         rata share of any recovery, except as ordered or approved by the court
         in accordance with paragraph (4).
 
     15 U.S.C. section 78u-4(a)(2)(A)(i)-(iv).
 
     If you wish to serve as lead plaintiff, you must move the Court no later
 than sixty days after the date of this notice.  The Proposed Class has not yet
 been certified by the Court.  If you do not wish to serve as lead plaintiff,
 no action is required of you at this time; it is not necessary to file a
 notice of claim or take any other action at this time in order to be a member
 of the class if the Court hereinafter certifies a class in this action.  If
 you wish to discuss this action or have any questions concerning this notice
 or your rights or interests, you may contact any counsel you prefer.  CalPERS
 is represented in this action by William Lerach and Darren Robbins of Milberg
 Weiss Bershad Hynes & Lerach LLP.  They can be contacted by telephone at
 (800) 449-4400, or by e-mail at wsl@mwbhl.com.
     This action seeks damages for violations of sections 10(b), 14 and 20(a)
 of the Securities Exchange Act of 1934, and Rule l0b-5 promulgated thereunder,
 and section 11 and 15 of the Securities Act of 1933.  The Complaint alleges
 causes of action on behalf of Executive Risk shareholders who received Chubb
 shares upon the Executive Risk merger on the theory that Executive Risk
 shareholders were defrauded (Counts II and III).  The Complaint also alleges a
 cause of action on behalf of all persons who purchased Chubb stock during the
 Class Period on the theory that all such persons were defrauded (Count I).
     At the time of the Executive Risk merger and the false statements alleged
 in the Complaint, CalPERS was not a shareholder of Executive Risk and received
 no Chubb shares as a result of that merger.  CalPERS, therefore, likely lacks
 standing to assert the claims on behalf of Executive Risk shareholders
 asserted in Counts II and III of the Complaint.  In addition, at the time of
 the Executive Risk merger, CalPERS held approximately 900,000 shares of Chubb
 stock, and if the fraud upon Executive Risk shareholders alleged in the
 Complaint in fact occurred, CalPERS could be deemed to be a beneficiary of
 that fraud, thus creating the potentiality of a conflict of interest between
 CalPERS and those members of the Proposed Class who were Executive Risk
 shareholders.
     During the Class Period prior to the Executive Risk merger and the release
 of Chubb's second quarter 1999 earnings, CalPERS purchased a total of
 2,237 shares of Chubb stock.  During the Class Period subsequent to the
 release of Chubb's second-quarter earnings, CalPERS purchased 715 shares of
 Chubb stock.  CalPERS presently holds in excess of 690,000 shares of Chubb.
     The Complaint in the action alleges in summary that: Chubb sells personal,
 standard commercial and specialty commercial insurance and is one of the
 largest U.S. underwriters of directors' and officers' liability insurance.
 According to the Complaint, the action arises out of a scheme to make it
 appear that serious problems and increasingly large losses in Chubb's standard
 commercial insurance business, which had badly hurt Chubb's results in
 1997-98, were being overcome by a combination of rate increases and non-
 renewal of unprofitable standard commercial insurance business (the "rate
 increase/policy non-renewal initiative"), which enabled Chubb to report better
 than expected first-quarter 1999 earnings per share ("EPS"), indicating
 Chubb's business was turning around faster than expected and that Chubb would
 therefore achieve stronger EPS growth in 1999 and 2000 than earlier forecast,
 thus artificially inflating Chubb's stock to $76-3/8 per share in mid-1999.
 This, according to the complaint, enabled Chubb to successfully complete its
 acquisition of Executive Risk, a highly profitable underwriter of directors'
 and officers' liability insurance, in exchange for 1.235 shares of Chubb stock
 for each share of Executive Risk stock -- a total of 14.8 million shares --
 plus 1.8 million shares reserved for Executive Risk's executives' options, via
 a June 17, 1999 Registration Statement and a June 17, 1999 Merger Proxy and
 other false and misleading public statements.  The inflation of Chubb's stock
 price reduced the number of shares Chubb had to issue to acquire Executive
 Risk, saving Chubb at least $300-$400 million, while enabling the top three
 insiders of Executive Risk to receive millions of dollars in special benefits
 and payments upon the sale of Executive Risk to Chubb.  However, just eight
 days after Chubb's acquisition of Executive Risk, Chubb shocked the market by
 revealing much worse than expected second-quarter 1999 EPS due to increasing
 losses in its standard commercial insurance business, later revealing that its
 "rate increase/policy non-renewal initiative," which prior to the merger
 defendants had consistently represented was beneficial and would continue to
 benefit Chubb's 1999 EPS, would have no positive impact on Chubb's results
 until mid-2000 at the earliest.
     The Complaint further alleges that subsequent to the Executive Risk merger
 vote on July 19, 1999 and release of the second-quarter earnings results,
 Chubb gave further false reassurances that caused the stock to trade at
 artificially inflated prices for the remainder of the Class Period.  The
 Complaint nevertheless alleges that Chubb's stock immediately declined and
 continued to fall, subsequent to the release of those earnings, to as low as
 $44 in mid-October 1999, as Chubb continued to report worsening results for
 its standard commercial insurance business, which caused Chubb's 1999 EPS to
 decline sharply from its 1998 EPS.
     Set forth in detail below are each of the alleged misstatements or
 omissions giving rise to plaintiffs' claims together with the dates of those
 misstatements or omissions:
 
     1.  On April 27, 1999, Chubb reported better than forecast first quarter
 1999 results via a release which stated:
 
      Our favorable first quarter results reflect positive trends in all three
      major segments of our business, said Dean R. O'Hare, chairman and chief
      executive officer....
 
      Even more significantly for the future, our pricing strategy in standard
      commercial lines has begun to show the impact we are looking for in our
      renewal business.  Month by month, renewal rate increases are building
      momentum, and we expect this trend to continue.  Moreover, we have been
      successful in retaining business we want to keep at higher rates, while
      at the same time we are walking away from business where we can't obtain
      adequate pricing.  By maintaining this profit-oriented discipline,
      standard commercial lines will likely show a decline in premiums
      throughout the year and produce improved combined ratios.  This decline
      in premiums should be offset by continued premium growth in personal and
      specialty commercial lines and by the benefits of a series of growth
      initiatives begun late last year.
 
     2.  On April 27, 1999, subsequent to the release of its first quarter 1999
 results, Chubb held a conference call for analysts, money and portfolio
 managers, institutional investors and large Chubb shareholders to discuss
 Chubb's first quarter 1999 results, its business and its prospects.  During
 the call -- and in follow-up conversations with analysts -- defendants O'Hare
 and Schram stated:
 
      Management's actions to turn around Chubb's standard commercial insurance
      operations by raising prices and not renewing unprofitable policies were
      not only working, in fact, they were exceeding management's expectations,
      and this accounted in large part for Chubb's better than expected first-
      quarter 1999 results.
 
      Due to the successful turnaround of Chubb's standard commercial insurance
      operations, that part of Chubb's business would show 5-l/2%-6% premium
      growth throughout 1999, as Chubb's rate increases for new or renewal
      standard commercial insurance policies were sticking.
 
      The momentum of rate increases in Chubb's standard commercial insurance
      operations was growing month by month.
 
      Chubb was successful at retaining the higher priced standard commercial
      insurance rate which it desired and was profitable.
 
      Chubb was not losing as much of its standard commercial insurance
      business due to rate increases as it had feared.  However, Chubb was
      prepared to lose $250-$300 million in standard commercial insurance
      business, as this would make Chubb's standard commercial insurance
      business "a lot more profitable."  The insurance companies who would pick
      up this business Chubb walked away from were "assholes."
 
      The combined ratio of Chubb's standard commercial insurance business
      would decline throughout 1999, to about 110% by year-end from 119.5% at
      year-end 1998.
 
      The improvements in Chubb's standard commercial insurance business would
      produce an underwriting profit by 2000.
 
      O'Hare was "totally confident" in the success of Chubb's new pricing of
      its standard commercial insurance lines.
 
      O'Hare was optimistic over the future performance of Chubb's business, in
      part due to the turnaround of its standard commercial insurance business.
      O'Hare stated: "You guys are so bloody negative it's disgusting.  We're
      trying to send a strong signal to you that things are getting better.  I
      don't know how else to say it.... This goddamned ship has turned faster
      than I thought it was going to...."
 
     3.  Subsequent to the April 27, 1999 conference call, defendants O'Hare,
 Kelso and/or Schram had private one-on-one conversations with analysts from
 Paine Webber, Bear Stearns, Prudential Securities and Warburg Dillon Read,
 repeating the information provided in the April 27, 1999 conference call and
 also telling them that:
 
      As a result of the better than expected pace of the turnaround of Chubb's
      standard commercial insurance business, Chubb was increasing its
      forecasted 1999 EPS to $4.10+ and its 2000 EPS to $4.50+.
 
     4.  On April 27, 1999, Chubb executives, including O'Hare, Kelso and
 Schram, appeared at the Chubb 1999 Shareholders' Meeting in New Jersey.  In
 formal presentations and private conversations with the assembled
 shareholders, analysts, money and portfolio managers, institutional investors,
 brokers and stock traders, they told attendees the same information as
 disseminated during the April 27, 1999 analyst conference call and follow-up
 conversations with analysts.
 
     5.  On April 27, 1999 Best's Insurance News reported on Chubb's Annual
 Shareholders' meeting:
 
      Speaking at the company's annual meeting of shareholders, held Tuesday in
      Warren, N.J., Chubb Chairman Dean R. O'Hare said the company has focused
      on improving its underwriting results and expense ratios.
 
                                 *     *     *
 
      At the meeting, several shareholder-representatives complained that
      Chubb's stock price has lagged behind several market and industry indexes
      in recent years.  Based on improving commercial rates and strong results
      in personal lines, O'Hare said he expects the company to prove a long-
      term stock winner.  "I'm a happy camper," he said.
 
     6.  On April 27, 1999, Bloomberg reported an interview by Hampton with
 O'Hare, as follows:
 
      Hampton:  Reporting from Bloomberg News New York Time Ted Hampton.  Today
                I'm speaking with Dean O'Hare the Chairman and Chief Executive
                of Chubb Corporation in Warren, New Jersey, which today
                reported first quarter earnings.  Mr. O'Hare thanks very much
                for joining me and congratulations on your quarter [you] beat
                estimates [and your] stock is up 1-5/8 as we speak.  Why do you
                think investors are celebrating a little bit today?
 
      O'Hare:   I guess they're celebrating because earnings are better than
                the Street expected them to be.
 
      Hampton:  And to what did you attribute that?
 
      O'Hare:   Why, I would hope that it's attributable to the fact this ship
                of ours is turning quicker than other people... had
                expected....
 
      Hampton:  Is there at Chubb a sense that commercial lines pricing is
                bottoming or are you still contending with the soft market
                conditions?
 
      O'Hare:   There is definitely a sense at Chubb that pricing is firming.
 
                                 *     *     *
 
                I will tell you this, that from what I've seen on a monthly
                basis, we have gone from a, let's take the month of December,
                where we were seeing price declines to a point that we are now
                seeing standard commercial lines price increases that are,
                let's call them 3-1/2 percent.  I fully expect that [they're]
                going to build rather rapidly to 5-1/2 percent.
 
 On April 27, 1999, Bloomberg reported:
 
      "This ship of ours is turning quicker than other people may have
      expected," Dean R. O'Hare, chairman and chief executive of the Warren,
      New Jersey, company said in an interview, referring to the profit
      surprise.
 
     7.  On April 27, 1999, Paine Webber issued a report on Chubb, which was
 based on and repeated information provided in the April 27, 1999 conference
 call and in follow-up conversations with O'Hare.  The report increased the
 forecasted 1999 and 2000 EPS to $4.10 and $4.55 for Chubb.  It also stated:
 
      CB beat consensus with Q1 earnings of $1.02 vs. expectations of $0.97.
      Management's repricing strategy is clearly working to drive out
      underpriced business and garner average rate increases on what remains.
 
                                 *     *     *
 
      After a number of quarters of ratcheting down expectations, Chubb's first
      quarter of 1999 was a pleasant surprise.  In addition to stronger
      earnings than we were looking for from a better-than-expected combined
      ratio, management commented on rate movement in its books and predicted
      6% average rate increases by the end of the year with a combined ratio in
      the standard/commercial lines down from 118% to what the company hopes
      will be 109-110%.  [W]e believe this quarter was good enough to justify
      an increase in our estimates.
 
     8.  On April 27, 1999, Bear Stearns issued a report on Chubb, which was
 based on and repeated information provided in the April 27, 1999 conference
 call and in follow-up conversations with O'Hare.  The report forecast 1999 and
 2000 EPS of $4.35 and $4.80 and second quarter 1999 EPS of $1.05 for Chubb.
 It also stated:
 
      We are reiterating our aggressive Buy rating of Chubb shares, following
      the company's favorable commentary on its first quarter results and
      expectations for the balance of the year.  [I]mportantly, management
      indicated on the company's conference call that results were ahead of
      Chubb's own expectations.  In...standard commercial lines, the momentum
      is positive and is expected to continue to show better results for the
      balance of the year....
 
                                 *     *     *
 
      Mr. O'Hare's comment in response to one question was "This ship is
      turning around faster than I expected...."
 
                                 *     *     *
 
      Overall, Mr. O'Hare indicated that he is encouraged by results in the
      first quarter, and is rating his own expectations for premium growth to
      as much as 5% for the year, compared to previous guidance to flat
      premiums.
 
     9.  On April 28, 1999, Dowling & Partners Securities issued a report on
 Chubb, based on the April 27, 1999 conference call, forecasting 1999 and 2000
 EPS of $4.10 and $4.65 respectively.  It also stated:
 
      After becoming somewhat agitated at the tone of the questions concerning
      rate activity and renewal experience associated with standard commercial
      business.  [O'Hare] exclaimed, "You guys are so bloody negative it's
      disgusting.  We're trying to send a strong signal to you that things are
      getting better.  I don't know how else to say it....  This goddamned ship
      has turned faster than I thought it was going to but it's a big ship."
 
                                 *     *     *
 
      STANDARD COMMERCIAL MARKET.  In Q-3:98, [management] announced that it
      was accelerating actions to bring Chubb's Standard Commercial business
      back to profitability via price increases of 5-20%, non-renewals and
      culling of unprofitable business, "even if this aggressiveness results in
      lost business."  Chubb suggested that it is willing to lose as much as
      $250-300MM of this business "if we cannot maintain adequate prices...."
 
                                 *     *     *
 
      This quarter [management] updated analysts on the progress of the rating
      plan:
 
      "The pricing strategy we have been executing since late last year is
      having the intended impact.  We all know that you can't turn around a
      business of this size in one quarter but the signs bode well for the
      future.  All the indications are that we are keeping much of the business
      that we want to keep at higher rates and we are being very disciplined
      about walking away from under-priced accounts ... right now we are
      thinking that standard commercial lines in 1999 could be down by as much
      as $200MM but it would be a lot more profitable."
 
      Who would pick up this business?  "As long as there are a-holes present,
      and boy there are still two for sure, this is going to happen."
 
     10.  On April 28, 1999, Prudential Securities issued a report on Chubb,
 which was based on and repeated information provided in the April 27, 1999
 conference call and in follow-up conversations with O'Hare.  The report
 forecast 1999 and 2000 EPS of $4.28 and $4.70 for Chubb.  It also stated:
 
      THE FIRST GOOD NEWS FROM CHUBB IN A LONG TIME
 
      Following a string of earnings disappointments and deteriorating patterns
      of underwriting performance in the standard commercial lines, Chubb made
      progress on all fronts in the first quarter.  EPS of $1.02... beat... the
      Street consensus of $0.97....
 
      [F]ollowing the very disappointing fourth quarter, Chubb aggressively
      implemented repricing strategies to return its standard commercial lines
      margins to satisfactory levels.  Dean O'Hare, Chubb's Chairman and Chief
      Executive Officer sent out a strong signal that pricing initiatives are
      working, renewal rate increases are sticking and "the signs bode well for
      the future."  We are raising our 1999 EPS for Chubb to $4.20 and $4.75.
 
                                 *     *     *
 
      Chubb Corp. management ended its first quarter 1999 teleconference with
      the following statement.  "[We are] trying to send a strong signal that
      things are getting better, the ship is turning around faster [than we]
      originally thought...."  Specifically, the actions instituted to turn
      around the standard commercial line book of business will prove
      successful, thereby enabling this historically superior underwriter to
      enhance its future growth rate by attaining its targeted 5% underwriting
      profit margin pre-catastrophe related losses....  After reviewing the
      better than expected initial quarter 1999 results, we raised our 1999 and
      2000 per share earning estimates....
 
                                 *     *     *
 
      By year end, management expects to...increase renewal rates by better
      than 6%, while keeping retentions above 65% and in turn significantly
      improving the book's profitability.
 
     11.  The plaintiffs allege in their complaint that the statements made on
 April 27, 1999 and April 28, 1999, that Chubb's "favorable first quarter
 results reflect positive trends in all three major segments" of Chubb's
 business, that Chubb had successfully stabilized its standard commercial
 insurance business, which now had positive "momentum" due to Chubb
 management's "aggressive" actions to increase standard commercial insurance
 premiums because "renewal rate increases [were] sticking," and that Chubb
 expected standard commercial insurance premium growth to move "rather rapidly"
 to 5-1/2%-6%, compared to the flat premium growth earlier forecast, which
 would enable Chubb's standard commercial insurance business to achieve a 5%
 underwriting profit margin leading to 1999 EPS of $4.10+ and 2000 EPS of
 $4.55+ -- higher results than earlier forecast because Chubb's "ship [was]
 turning quicker" than originally thought -- were false when made.  According
 to the allegations in the Complaint, the true facts -- known to defendants,
 but which they concealed -- were: (a) Chubb's aggressive actions to raise
 prices on its standard commercial insurance policies and accept substantial
 non-renewals to boost operating results of those lines was not working, let
 alone exceeding management's expectations, because the rate increases were not
 sticking and Chubb's standard commercial insurance underwriting losses were
 increasing; (b) The rate increases that were, in fact, being obtained on new
 and renewal standard commercial insurance policies were very small and well
 below the levels necessary to have any materially favorable impact on Chubb's
 1999 results, or even to lessen the growing underwriting losses in Chubb's
 standard commercial insurance business; (c) Chubb was, in fact, not
 maintaining a disciplined approach to renewing standard commercial insurance
 and was renewing hundreds of millions of dollars of standard commercial
 insurance policies at premium levels Chubb knew were unprofitable and thus
 would adversely impact Chubb's results going forward; (d) Chubb's aggressive
 action to raise prices on its standard commercial insurance policies and
 accept substantial non-renewals to boost operating results of those lines,
 even if successful would not have any significant positive impact on Chubb's
 financial results during 1999 and, in fact, Chubb's standard commercial
 insurance problems would continue to very adversely impact Chubb's results
 throughout most of 1999; (e) Chubb's reserves for its property and marine
 insurance line had been manipulated by reserve reductions which were not
 justified; (f) Chubb's standard commercial insurance business had not
 stabilized as, due to weak premium growth and increasing losses, the combined
 ratio on these lines of business was still increasing and would continue to
 increase throughout 1999 (excluding catastrophes), leading to larger than ever
 losses in these lines of business; (g) Chubb's standard commercial insurance
 business was not encountering strong positive momentum or positive trends.
 Due to weak premium growth and increasing losses, the combined ratio on these
 lines of business was still increasing and would continue to increase
 throughout 1999 (excluding catastrophes), leading to larger than ever losses
 in these lines of business; (h) Chubb's strategy of renewing only at good
 prices would not have any significant impact on Chubb's results until at least
 mid-2000, as it would take "at least two annual renewal cycles" for Chubb to
 reprice the standard commercial lines premiums and after the premiums were
 repriced it would take another year for the higher premiums to be earned into
 income.  Chubb concealed this key fact from its public disclosures until after
 the merger closed; (i) Chubb's better than expected first quarter 1999 results
 were not the result of favorable developments or trends in Chubb's standard
 commercial insurance business as represented, in fact, Chubb's first quarter
 1999 results had been deliberately falsified in order to artificially and
 improperly boost Chubb's reported EPS and to conceal the continued serious
 deterioration in its standard commercial insurance business; (j) As a result
 of the foregoing negative conditions which were adversely impacting Chubb's
 business, defendants knew that Chubb's forecasts of 5-1/2%-6% premium growth
 for its standard commercial insurance business during 1999 and a falling
 combined ratio for its standard commercial insurance business were false and
 could not be obtained; and (k) As a result of the foregoing negative factors
 which were adversely impacting Chubb's business, defendants knew Chubb's
 forecasts of 1999 EPS of $4.10+ and 2000 EPS of $4.50+ were false when made
 and could not and would not be achieved, even if Chubb suffered no catastrophe
 losses and even if Chubb achieved its repricing objectives in standard
 commercial insurance.
     12.  On May 7, 1999, Bloomberg issued a report on Chubb, based on
 information from defendants, stating:
 
      Chubb Corp. shares gained 19 percent this week, as the 14th-largest U.S.
      property and casualty insurer was seen benefitting from lower losses on
      commercial policies and regulatory reform legislation.  Shares of the
      Warren, New Jersey, company advanced 11 1/6, including a 5 1/2-point jump
      today, to a four-month high of 70 5/16....
 
      The rebound was "overdue" said spokeswoman Gail Devlin, and was a
      "recognition that the shares were undervalued." She said "there may be
      more ahead."
 
      On May 19, 1999, O'Hare held a private meeting with securities analysts,
      institutional investors and money managers in Boston.  During these
      discussions, O'Hare forecast 1999 EPS of $4.28 and 2000 EPS of $4.70 for
      Chubb.  On May 12, 1999, Prudential Securities issued a report on the
      O'Hare briefing, stating:
 
      On Wednesday, May 12, Dean O'Hare, Chairman and Chief Executive Officer
      of Chubb Corporation met with members of the Boston investment community
      ....  We received an update on pricing initiatives in the troubled
      standard commercial lines, with an indication that pricing momentum
      continues to build.  An improvement in underwriting results in this area
      is expected as the year unfolds.
 
                                 *     *     *
 
      Here is what Chairman O'Hare said.
 
      BUILDING ON PREMIUM RATE INCREASES IN THE STANDARD COMMERCIAL LINES
      Today, we received another piece of confirmation that Chubb's pricing
      strategies are working.  Premium rates for the standard commercial lines
      rose 4% in the first week of May, following increases of 3.2% in April
      and 2.2% in March.  Retention rates remain in the low 70s.  New business
      that is going on the books has been intensely audited and the company is
      very comfortable with the pricing.
 
                                 *     *     *
 
      Chubb's financial models indicate its stock is worth $102-l40 per share.
      Mr. O'Hare stated that a value of $128 per share is realistic in today's
      market....
 
     13.  On May 14, 1999, Chubb filed its report on Form 10-Q for the first
 quarter 1999 with the SEC, which reported Chubb's previously publicly reported
 first quarter financial results.  The first quarter 10-Q was signed by Schram.
 It stated:
 
      Premiums from standard commercial insurance, which represent 35% of our
      total writings, decreased by 3.9% in the first quarter of 1999 compared
      with the same period a year ago.  The decrease was the results of the
      strategy we put in place in late 1998 to renew good business at adequate
      prices and not renew underperforming accounts where we cannot attain
      price adequacy.  On that business that was renewed, rates increased
      modestly in the first quarter of 1999 and we expect this trend to
      continue.
 
     14.  On June 2, 1999, O'Hare was the main dinner speaker at DLJ's First
 Annual Insurance Conference, which was attended by large Chubb shareholders,
 securities analysts, institutional investors and money managers.  During his
 speech -- and in private conversations with attendees -- O'Hare stated:
 
      Management's actions to turn around Chubb's standard commercial insurance
      operations by raising prices and not renewing unprofitable policies were
      not only working, in fact, they were exceeding management's expectations.
      Chubb's standard commercial insurance operations would show 5-1/2%-6%
      premium growth throughout 1999, as Chubb's rate increases for new or
      renewal standard commercial insurance policies were sticking.
 
      The momentum of rate increases in Chubb's standard commercial insurance
      operations was growing month by month.
 
      Chubb was being successful at retaining the higher priced standard
      commercial insurance business which it desired and was profitable.
 
      Chubb was not losing as much of its standard commercial insurance
      business due to rate increases as it had feared.
 
      The combined ratio of Chubb's standard commercial insurance business
      would decline throughout 1999, to about 110% by year-end from 119.5% at
      year-end 1998.
 
      The changes in Chubb's standard commercial insurance business would
      produce an underwriting profit by 2000 and a 6% total return on equity by
      2001.  Chubb's stock was undervalued and, based on its improving business
      situation, the stock was worth between $102-$140 per share.
 
      O'Hare was very optimistic about the future performance of Chubb's
      business, in part due to the turnaround of its standard commercial
      insurance business.  As a result of the better than expected pace of the
      turnaround of Chubb's standard commercial insurance business, Chubb had
      increased its forecasted 1999 EPS to $4.10+ and its 2000 EPS to $4.70+.
 
     15.  On June 3, 1999, DLJ issued a report on Chubb which was based on and
 repeated information provided at the June 2, 1999 dinner, including private
 conversations with O'Hare.  The report forecast 1999 and 2000 EPS of $4.35 and
 $5.05 and second quarter 1999 EPS of $1.06 for Chubb and stated:
 
      Last night, Chairman and CEO of the Chubb Corp., Dean O'Hare, was the
      guest speaker at the concluding dinner of DLJ's first annual Insurance
      Conference.
 
      SIGNIFICANT COMMENTS MADE INCLUDE:
      CB's execution of its turnaround strategy in its standard commercial
      lines business (roughly 35% of premiums written) is exceeding
      management's expectation.
 
                                 *     *     *
 
      Management expects that the overall combined ratio, ex catastrophes, will
      improve steadily due to expense reductions, claims management, and the
      repricing or non-renewing of unprofitable standard commercial business.
 
     16.  On June 15, 1999, O'Hare held a private luncheon for several
 securities analysts that followed Chubb.  During the luncheon, O'Hare stated:
 "I know I have been criticized at times for being too optimistic," but "I am
 more optimistic than usual," and he was "quite confident [he was] sending the
 correct signal as far as overall trends are concerned," as "Chubb [was]
 significantly outperforming most of its peers with respect to implementing
 renewal price increases on standard commercial business."  He added as to the
 turn in standard commercial lines, "We're going to make it happen" which would
 lead to "a 6% return on equity" by late 2000 in the standard commercial lines.
     17.  The plaintiffs allege in their Complaint that the statements made
 between May 7, 1999 and June 15, 1999 that Chubb's stock was "undervalued" and
 there may be "more good news ahead," that Chubb's standard commercial
 insurance business' favorable pricing momentum "continues to build," that the
 turnaround of this business was "exceeding management's expectations," that
 the new standard commercial insurance being accepted by Chubb had been
 "intensely audited" and Chubb was now "very comfortable with the pricing,"
 that these premiums had increased "modestly" in the first quarter 1999 and, as
 a result, Chubb's standard commercial insurance combined ratio (excluding
 catastrophe) would improve steadily in 1999-2000 due to Chubb's rate
 increase/policy non-renewal strategy, and that O'Hare was "more optimistic
 than usual" and Chubb was forecasting 1999 EPS of $4.20+ and 2000 EPS of
 $4.70+, and thus that Chubb's own financial models -- reflecting these more
 favorable trends -- showed Chubb's stock was worth $102-$140 per share and
 that a $128 price was "realistic in today's market," were false when made.
 According to the allegations in the Complaint, the true facts -- known to
 defendants, but which they concealed -- were: (a) Chubb's aggressive actions
 to raise prices on its standard commercial insurance policies and accept
 substantial non-renewals to boost operating results of those lines was not
 working, let alone exceeding management's expectations, because the rate
 increases were not sticking and Chubb's standard commercial insurance
 underwriting losses were increasing; (b) The rate increases that were, in
 fact, being obtained on new and renewal standard commercial insurance policies
 were very small and well below the levels necessary to have any materially
 favorable impact on Chubb's 1999 results, or even to lessen the growing
 underwriting losses in Chubb's standard commercial insurance business; (c)
 Chubb was, in fact, not using a disciplined approach to standard commercial
 insurance renewals and was renewing hundreds of millions of dollars of
 standard commercial insurance policies at premium levels Chubb knew were
 unprofitable and thus would aversely impact Chubb's results going forward; (d)
 Chubb's aggressive action to raise prices on its standard commercial insurance
 policies and accept substantial non-renewals to boost operating results of
 those lines, even if successful, would not have any significant positive
 impact on Chubb's financial results during 1999 and, in fact, Chubb's standard
 commercial insurance problems would continue to very adversely impact Chubb's
 results throughout most of 1999; (e) Chubb's reserves for its property and
 marine insurance line had been manipulated by reserve reductions which were
 not justified; (f) Chubb's standard commercial insurance business had not
 stabilized as, due to weak premium growth and increasing losses, the combined
 ratio on these lines of business was still increasing and would continue to
 increase throughout 1999 (excluding catastrophes), leading to larger than ever
 losses in these lines of business; (g) Chubb's standard commercial insurance
 business was not encountering strong positive momentum or positive trends.
 Due to weak premium growth and increasing losses, the combined ratio on these
 lines of business was still increasing and would continue to increase
 throughout 1999 (excluding catastrophes), leading to larger than ever losses
 in these lines of business; (g) Chubb's standard commercial insurance business
 was not encountering strong positive momentum or positive trends.  Due to weak
 premium growth and increasing losses, the combined ratio on these lines of
 business was still increasing and would continue to increase throughout 1999
 (excluding catastrophes), leading to larger than ever losses in these lines of
 business; (h) Chubb's strategy of renewing only at good prices would not have
 any significant impact on Chubb's results until at least mid-2000, as it would
 take "at least two annual renewal cycles" for Chubb to reprice the standard
 commercial lines premiums, and after the premiums were repriced it would take
 another year for the higher premiums to be earned into income.  Chubb
 concealed this key fact from its public disclosures until after the merger
 closed; (i) Chubb's better than expected first quarter 1999 results were not
 the result of favorable developments or trends in Chubb's standard commercial
 insurance business as represented; in fact, Chubb's first quarter 1999 results
 had been deliberately falsified in order to artificially and improperly boost
 Chubb's reported EPS and to conceal the continued serious deterioration in its
 standard commercial insurance business; (j) As a result of the foregoing
 negative conditions which were adversely impacting Chubb's business,
 defendants knew that Chubb's forecasts of 5-1/2%-6% premium growth for its
 standard commercial insurance business during 1999 and a falling combined
 ratio for its standard commercial insurance business were false and could not
 be obtained; and (k) As a result of the foregoing negative factors which were
 adversely impacting Chubb's business, defendants knew Chubb's forecasts of
 1999 EPS of $4.20+ and 2000 EPS of $4.70+ were false when made and could not
 and would not be achieved, even if Chubb suffered no catastrophe losses and
 even if Chubb achieved its repricing objectives in standard commercial
 insurance.
     18.  On June 17, 1999, Chubb and Executive Risk filed the final version of
 their Registration Statement and Merger Proxy with the SEC relating to the
 proposed merger, which became effective that day.  The Registration Statement
 was signed by O'Hare, Kelso and Schram, who were also associated with and
 identified in the Merger Proxy.  Sills, Kullas and Deutsch wrote the Merger
 Proxy and were associated with and identified in the Merger Proxy.  The record
 date on the merger was June 17, 1999.  The Merger Proxy was mailed to
 Executive Risk's shareholders on June 18, 1999 to secure Executive Risk's
 shareholders' approval of the proposed sale of their company to Chubb for
 1.235 shares of Chubb stock for each Executive Risk share.  The Merger Proxy
 stated:
 
      We cannot complete the merger without the approval of the holders of a
      majority of the outstanding shares of Executive Risk common stock.  After
      careful consideration, your board of directors has unanimously approved
      the merger agreement and determined that the merger is in the best
      interest of Executive Risk and its shareholders.  The board of directors
      unanimously recommends that you vote FOR the merger agreement.  In
      arriving at its determination and recommendation, the board of directors
      took into account the factors described in the attached proxy
      statement/prospectus, including the opinions of Donaldson, Lufkin &
      Jenrette Securities Corporation and Salomon Smith Barney Inc. to the
      effect that the merger consideration is fair to Executive Risk
      shareholders from a financial point of view.
 
     The Merger Proxy also stated:
 
      What Executive Risk Shareholders Will Receive in the Merger
      You will receive 1.235 Chubb shares for each Executive Risk share you
      hold...  Based on the number of shares of Executive Risk common stock
      outstanding on June 15, 1999 and the closing price of $70.56 per share of
      Chubb stock on that date, Chubb would issue approximately 14.28 million
      shares to the stockholders of Executive Risk with an aggregate value of
      approximately $1,007.5 million.
 
     19.  The Merger Proxy incorporated Chubb's first quarter 1999 10-Q by
 reference and included Chubb's recent financial results:
 
      The data as of March 31, 1999 and 1998 and for the three months ended
      March 31, 1999 and 1998 have been derived from Chubb's unaudited
      consolidated financial statements which include, in the opinion of
      Chubb's management, all adjustments, consisting of normal recurring
      accruals, necessary to present fairly the results of operations and
      financial position of Chubb for the periods and dates presented....
 
                                                   For the Three Months
                                                        Ended March 31,
 
                                                      1999          1998
     Total revenues                               $1,629.6      $1,587.3
     Operating Income from continuing
       operations**                                 $166.4        $162.8
     Realized investment gains from continuing       $20.5         $29.0
       operations**                                 $186.9        $19l.8*
 
     Operating income from continuing                $1.02          $.95*
       operations per diluted common shares**
 
     Income from continuing operations per           $1.14         $1.12*
       diluted common shares
 
      *  Property and casualty insurance income and income from continuing
      operations have been reduced by a net charge of $26.0 million or $.15 per
      hare for the after-tax effect of a $40.0 million restructuring charge.
 
      **  Operating income for continuing operations is defined as income from
      continuing operations excluding realized gains, net of tax.
 
     20.  The Merger Proxy set forth how the recent strong increase in Chubb's
 stock price made the sale of Executive Risk to Chubb much more advantageous to
 Executive Risk public shareholders:
 
      The table...sets forth the value of the shares of Chubb common stock that
      a stockholder would have received for one share of Executive Risk common
      stock assuming the merger has taken place on those dates....
 
 
                    Closing Price of     Closing Price of    Value of Chubb
                    Chubb Common Stock   Executive Risk      Common Stock
                                         Common Stock        Received
 
     February 5, 1999       $58.06           $44.00          $71.70
     June 15, 1999          $70.56           $87.50          $87.14
 
     Based on these stock prices, the total consideration to be paid to
 Executive Risk's shareholders had increased from $839 million on February 5,
 1999 to $1.019 billion on June 15, 1999.
 
     21.  The plaintiffs allege in their complaint that the June 17, 1999
 Registration Statement and Merger Proxy and the oral proxy statements
 identified above were false and misleading and concealed material information
 because: (a) The merger was not in the best interests of Executive Risk's
 public shareholders as the price of the Chubb stock they were to receive in
 exchange for their Executive Risk stock was artificially inflated due to the
 false statements and accounting manipulations detailed herein; (b) The merger
 consideration to be received by Executive Risk's public shareholders was not
 fair as the price of the Chubb stock they were to receive in exchange for
 their Executive Risk stock was artificially inflated due to the false
 statements and accounting manipulations detailed herein; (c) Chubb's
 aggressive actions to raise prices on its standard commercial insurance
 policies and accept substantial non-renewals to boost operating results of
 those lines was not working, let alone exceeding management's expectations,
 because the rate increases were not sticking and Chubb's standard commercial
 insurance underwriting losses were increasing; (d) Chubb's strategy of
 renewing only at good prices would not have any significant impact on Chubb's
 results until at least mid-2000, as it would take "at least two annual renewal
 cycles" for Chubb to reprice the standard commercial lines premiums, and after
 the premiums were repriced it would take another year for the higher premiums
 to be earned into income.  Chubb concealed this key fact from its public
 disclosures until after the merger closed; (e) Chubb was, in fact, not
 maintaining a disciplined approach to standard commercial insurance renewals
 and was renewing hundreds of millions of dollars of standard commercial
 insurance policies at premium levels Chubb knew were unprofitable and thus
 would adversely impact Chubb's results going forward; (f) The rate increases
 that were, in fact, being obtained on new and renewal standard commercial
 insurance policies were very small and well below the levels necessary to have
 any materially favorable impact on Chubb's 1999 results, or even to lessen the
 growing underwriting losses in Chubb's standard commercial insurance business;
 (g) Chubb's aggressive action to raise prices on its standard commercial
 insurance policies and accept substantial non-renewals to boost operating
 results of those lines, even if successful, would not have any significant
 positive impact on Chubb's financial results during 1999 and, in fact, Chubb's
 standard commercial insurance problems would continue to very adversely impact
 Chubb's results throughout most of 1999; (h) Chubb's standard commercial
 insurance business had not stabilized as, due to weak premium growth and
 increasing losses, the combined ratio on these lines of business was still
 increasing and would continue to increase throughout 1999 (excluding
 catastrophes), leading to larger than ever losses in these lines of business;
 (i) Chubb's standard commercial insurance business was encountering weak
 premium growth and increasing losses, and the combined ratio on these lines of
 business was still increasing and would continue to increase throughout 1999
 (excluding catastrophes), leading to larger than ever losses in these lines of
 business; (j) Chubb's better than expected first quarter 1999 results were not
 the result of favorable developments or trends in Chubb's standard commercial
 insurance business as represented, in fact, Chubb's first quarter 1999 results
 had been deliberately falsified in order to artificially and improperly boost
 Chubb's reported EPS and to conceal the continued serious deterioration in its
 standard commercial insurance business; (k) As a result of the foregoing
 negative conditions which were adversely impacting Chubb's business,
 defendants' forecasts of 5-1/2%-6% premium growth for Chubb's standard
 commercial insurance business during 1999 and a falling combined ratio for its
 standard commercial insurance business were false and could not be obtained;
 and (l) As a result of the foregoing negative factors which were adversely
 impacting Chubb's business, Chubb's forecasts of 1999 EPS of $4.20+ and 2000
 EPS of $4.70 were false when made and could not and would not be achieved,
 even if Chubb suffered no catastrophe losses and even if Chubb achieved its
 repricing objectives in standard commercial insurance.
     22.  On June 25, 1999, Bear Stearns met privately with O'Hare and other
 top Chubb executives to receive a briefing about Chubb's business.  On June
 28, 1999, Bear Stearns issued a report on Chubb, which was based on and
 repeated the information Chubb's executives had given it on June 25, 1999.
 The report stated:
 
      We are reiterating our aggressive Buy rating of Chubb shares, following a
      private meeting with management Friday.  We expect that, as Chubb
      continues to meet and exceed "Street" earnings expectations, the shares
      will be revalued back toward historical relative valuations....
 
      Chubb's CEO Dean O'Hare noted that the company's repricing/reunderwriting
      project in the standard commercial lines (approximately 30% of Chubb's
      total business) continues to make progress....
 
      One of the issues concerning investors earlier this year was the decline
      in retentions (the amount of business successfully renewed) that Chubb
      saw when it first began its repricing efforts.  However, according to the
      company, the decline in retentions appears to have bottomed, and
      management expects these figures to begin to move higher.
 
     23.  According to the allegations in the Complaint, the true facts --
 known to defendants, but which were concealed were: (a) Chubb's aggressive
 actions to raise prices on its standard commercial insurance policies and
 accept substantial non-renewals to boost operating results of those lines was
 not working, let alone exceeding management's expectations, because the rate
 increases were not sticking and Chubb's standard commercial insurance
 underwriting losses were increasing; (b) The rate increases that were, in
 fact, being obtained on new and renewal standard commercial insurance policies
 were very small and well below the levels necessary to have any materially
 favorable impact on Chubb's 1999 results, or even to lessen the growing
 underwriting losses in Chubb's standard commercial insurance business; (c)
 Chubb's aggressive action to raise prices on its standard commercial insurance
 policies and accept substantial non-renewals to boost operating results of
 those lines, even if successful, would not have any significant positive
 impact on Chubb's financial results during 1999 and, in fact, Chubb's standard
 commercial insurance problems would continue to very adversely impact Chubb's
 results throughout all of 1999; (d) Chubb's reserves for its property and
 marine insurance lines had been manipulated by reserve reductions which were
 not justified; (e) Chubb's standard commercial insurance business had not
 stabilized as, due to weak premium growth and increasing losses, the combined
 ratio on these lines of business was still increasing and would continue to
 increase throughout 1999 (excluding catastrophes), leading to larger than ever
 losses in these lines of business; (f) Chubb's standard commercial insurance
 business was not encountering strong positive momentum or positive trends.
 Due to weak premium growth and increasing losses, the combined ratio on these
 lines of business was still increasing and would continue to increase
 throughout 1999 (excluding catastrophes), leading to larger than ever losses
 in these lines of business; (g) Chubb's strategy of renewing only at good
 prices would not have any significant impact on Chubb's results until at least
 mid-2000, as it would take "at least two annual renewal cycles" for Chubb to
 reprice the standard commercial lines premiums, and after the premiums were
 repriced it would take another year for the higher premiums to be earned into
 income.  Chubb concealed this key fact from its public disclosures until after
 the merger closed; (h) Chubb was, in fact, renewing millions of dollars of
 standard commercial insurance policies at premium levels Chubb knew were
 unprofitable and thus would adversely impact Chubb's results going forward;
 (i) Chubb's better than expected first quarter 1999 results were not the
 result of favorable developments or trends in Chubb's standard commercial
 insurance business as represented, in fact, Chubb's first quarter 1999 results
 had been deliberately falsified in order to artificially and improperly boost
 Chubb's reported EPS and to conceal the continued serious deterioration in its
 standard commercial insurance business; (j) Chubb was actually losing more
 standard commercial insurance business than stated and was writing less new
 standard commercial insurance than stated; (k) As a result of the foregoing
 negative factors which were adversely impacting Chubb's business, defendants
 knew Chubb's forecasts of 5-1/2%-6% premium growth for its standard commercial
 insurance business during 1999 and a falling combined ratio for its standard
 commercial insurance business were false and could not be obtained; and (l) As
 a result of the foregoing negative factors which were adversely impacting
 Chubb's business, defendants knew Chubb's forecasts of 1999 EPS of $4.20+ and
 2000 EPS of $4.70+ were false when made and could not and would not be
 achieved, even if Chubb suffered no catastrophe losses and even if Chubb
 achieved its repricing objectives in standard commercial insurance.
     24.  On July 27, 1999, just eight days after Executive Risk's shareholders
 approved the sale of their company to Chubb in return for stock, Chubb
 reported second quarter 1999 operating income of $1.00 per share -- well below
 expected results.  Chubb's release stated:
 
      Standard commercial lines premiums in the second quarter declined 9% to
      $455.4 million and had a combined ratio of 120.8%.
 
      "Given the moderate magnitude of rate increases in the early stages of
      the repricing program," said Mr. O'Hare, "it will take at least two
      renewal cycles to adequately reprice the entire standard commercial book,
      and during that time we will continue to have losses from non-renewed
      policies.  Thus it will be mid-2000 before the benefits of these actions
      significantly flow to the bottom line."
 
     25.  On July 27, 1999, subsequent to the release of its second quarter
 1999 results, Chubb held a conference call for analysts, money and portfolio
 managers, institutional investors and large Chubb shareholders to discuss
 Chubb's second quarter 1999 results, its business and its prospects.  During
 the call -- and in follow-up conversations with analysts -- O'Hare and Kelso
 stated:
 
      Management's actions to turn around Chubb's standard commercial insurance
      operations by raising prices and not renewing unprofitable policies were
      in fact working, but would take longer than expected to benefit Chubb's
      EPS.
 
      The rate increases in Chubb's standard commercial insurance operations
      were still growing.
 
      The combined ratio of Chubb's standard commercial insurance business
      would decline during the balance of 1999.
 
      The changes in Chubb's standard commercial insurance business would
      produce an underwriting profit by 2000 and a 6% total return on equity by
      2001.
 
     26.  Subsequent to the July 27, 1999 conference call, O'Hare and Kelso had
 private one-on-one conversations with analysts from Paine Webber, DLJ,
 Prudential Securities and Bear Stearns, during which they repeated the
 information from the July 27, 1999 conference call and also told them that the
 rate increase/policy non-renewal initiative was working and Chubb still
 expected 1999 EPS of over $4.00 and 2000 EPS of over $4.50.
     27.  On July 27, 1999, PaineWebber issued a report on Chubb, which was
 based on and repeated information provided in the July 27, 1999 conference
 call and in follow-up conversations with O'Hare, Kullas and Sills.  The report
 cut the forecasted 1999 and 2000 EPS for Chubb to $4.10 and $4.55.  It also
 stated:
 
      In what was perceived as a shocking disappointment, Chubb reported flat
      premiums for the second quarter with earnings...short of the Street
      consensus....
 
      Management dampened its earlier enthusiasm for improving market
      conditions which had ratcheted up expectations early in the second
      quarter.
 
                                 *     *     *
 
      The bad news: Total standard commercial business shrank 9.0% more than
      expected.  The combined ratio remained unacceptably high at 120.8%.
      Commercial multiperil results were terrible .... Premiums in total were
      flat rather than up about 5% as expected.
 
      CEO Dean O'Hare stated: "I might have actually gotten a little bit
      euphoric that we could do this turnaround of standard commercial lines
      without any real disturbance of the premium pattern, Q2 has brought me
      back to where I started.  I'm not in any way discouraged but I admit to
      being somewhat overly optimistic at the end of the first quarter...."
 
      He also noted: "we are losing more business than we did in the first
      quarter and we're writing less new business than we did in the first
      quarter."
 
                                 *     *     *
 
      Management stated that it will take at least two renewal cycles to
      adequately reprice the entire standard commercial book.  It will be mid
      2000 before these actions have a significant impact on the bottom line.
 
     28.  On July 27, 1999, Prudential Securities issued a report on Chubb,
 which was based on and repeated information provided in the July 27, 1999
 conference call and in follow-up conversations with O'Hare, Kullas and Sills.
 The report cut the forecasted 1999 EPS for Chubb to $4.07.  It also stated:
 
      First quarter trends were very encouraging.  As you recall, following the
      very disappointing fourth quarter, Chubb aggressively implemented pricing
      strategies to return its standard commercial lines margins to
      satisfactory levels.  Chubb made progress on all fronts in the first
      quarter and management believed that the company had a good shot at
      increasing its total premiums by as much as 5% for the year (excluding
      any contribution from Executive Risk) for 1999 compared with its earlier
      projection of flat premiums.
 
      Management is not in any way discouraged by the second quarter trends.
      Rate increases continue to build momentum....  Management is returning to
      its initial projection of flat premiums for the year with the
      anticipation that it will lose about $200 million in standard commercial
      premiums, or about 10% of the standard commercial book.
 
                                 *     *     *
 
      Standard commercial results were awful ....  The total standard
      commercial book reported a combined ratio of 120.8% slightly better than
      a year ago but deteriorated from the 117.9% reported in the first
      quarter.
 
     29.  On July 28, 1999, DLJ issued a report on Chubb which was based on and
 repeated information provided in the July 27, 1999 conference call and in
 follow-up conversations with O'Hare, Kullas and Sills.  The report cut the
 forecasted 1999 EPS for Chubb to $4.25.  It also stated:
 
      A month ago Chairman and CEO Dean O'Hare was enthusiastically optimistic
      that the turnaround in the standard commercial book might occur ahead of
      schedule based on trends seen mid-quarter.
 
      HOWEVER, on yesterday's conference call he stated that he had been overly
      optimistic and returned to expect CB's original targets.
 
      We are lowering our 1999 estimate to $4.25 per share from $4.35 to
      incorporate trends in the 2Q99 results.
 
      THERE IS GOOD NEWS: CB's turnaround strategy remains on target with
      original expectations.
 
     30.  The plaintiff's allege in their complaint that Chubb's stock
 continued to trade at artificially inflated levels throughout the balance of
 the Class Period due to Chubb's failure to make a full and complete disclosure
 of the adverse facts and conditions then impacting Chubb's business and
 Chubb's continued false and misleading statements.  According to the
 allegations in the Complaint, the true facts -- known by defendants, but which
 they concealed -- were that: (a) Chubb's action to raise prices on its
 standard commercial insurance policies and accept substantial non-renewals to
 boost operating results of those lines had failed; (b) The combined ratio on
 these lines of business was still increasing and would continue to increase
 throughout 1999 (excluding catastrophes), which would hurt Chubb's EPS in
 1999; (c) Chubb's standard commercial insurance business was encountering
 increasing losses due to weak premium growth and the combined ratio on these
 lines of business was still increasing and would continue to increase
 throughout 1999 (excluding catastrophes); (d) Even if Chubb was able to raise
 prices on its standard commercial insurance lines and shed unprofitable
 policies, this would not have any material positive impact on Chubb's results
 until at least two renewal cycles, i.e., late in 2000, at the earliest; (e) As
 a result of the foregoing, defendants knew that Chubb's forecast of 5-1/2%-6%
 premium growth for its standard commercial insurance business during 1999 was
 false and could not be obtained; (f) As a result of the foregoing negative
 factors which were adversely impacting Chubb's business, defendants knew
 Chubb's forecasts of 1999 EPS of $4.00+ and 2000 EPS of $4.50+ were false when
 made and could not and would not be achieved, even if Chubb suffered no
 catastrophe losses.
 
 SOURCE  Milberg Weiss Bershad Hynes & Lerach LLP