<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
------------------
FORM 11-K
ANNUAL REPORT
------------------
[X] ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ____________ TO ____________
COMMISSION FILE NUMBER 1-8661
A. FULL TITLE OF THE PLAN: CAPITAL ACCUMULATION PLAN OF THE CHUBB
CORPORATION, CHUBB & SON INC. AND PARTICIPATING AFFILIATES.
B. NAME OF ISSUER OF THE SECURITIES HELD PURSUANT TO THE PLAN AND THE
ADDRESS OF ITS PRINCIPAL EXECUTIVE OFFICE:
The Chubb Corporation (the "Corporation")
15 Mountain View Road
P.O. Box 1615
Warren, New Jersey 07061 - 1615
================================================================================
<PAGE> 2
CAPITAL ACCUMULATION PLAN OF
THE CHUBB CORPORATION, CHUBB & SON INC.
AND PARTICIPATING AFFILIATES
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
S&P 500 SHORT-TERM CHUBB FIXED
INDEX INCOME CORPORATION INCOME BALANCED
FUND FUND STOCK FUND FUND FUND
------- ---------- ----------- ------ --------
<S> <C> <C> <C> <C> <C>
Investments at fair value
(Notes 1 and 3)
Common Stock of The Chubb
Corporation................ -- -- $126,171,163 -- --
Mutual Funds................. $102,642,333 -- -- -- $21,121,688
Investment in Equities....... -- -- -- -- --
Fixed Income Securities...... -- -- -- $157,465,429 --
Money Market Fund -- Fidelity
Retirement Government Money
Market..................... -- $7,104,033 -- -- --
Participant Loans............ -- -- -- -- --
Participants' transfers
receivable (payable) between
Funds........................ -- -- -- -- --
------------ ---------- ------------ ------------ -----------
Net Assets Available for
Benefits at December 31,
1997..................... $102,642,333 $7,104,033 $126,171,163 $157,465,429 $21,121,688
============ ========== ============ ============ ===========
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C> <C> <C>
Contributions
Employers:
Pay conversion................................. $ 4,300,469 $ 305,892 $ 3,928,203
Matching....................................... 2,580,238 214,618 2,545,849
------------ ---------- ------------
Total employers............................ 6,880,707 520,510 6,474,052
Participants..................................... 153,670 7,848 118,819
Rollovers........................................ 995,581 81,362 850,258
Loan repayments.................................... 2,297,393 228,399 2,790,346
Interest........................................... 13,949 154,587 41,064
Dividends.......................................... 2,021,221 180,487 1,007,881
Net appreciation/(depreciation) in fair value of
assets........................................... 24,322,835 -- 38,364,289
Participants' transfer between Funds............... (671,873) 203,758 (7,235,073)
Distributions to participants...................... (17,429,816) (1,109,697) (14,211,652)
Forfeitures........................................ (126,293) 248,359 (98,107)
------------ ---------- ------------
Increase (decrease) in Net Assets Available for
Benefits during the year......................... 18,457,374 515,613 28,101,877
Net Assets Available for Benefits at December 31,
1996............................................. $ 84,184,959 $6,588,420 $ 98,069,286
------------ ---------- ------------
Net Assets Available for Benefits at December 31,
1997........................................... $102,642,333 $7,104,033 $126,171,163
============ ========== ============
<CAPTION>
<S> <C> <C>
Contributions
Employers:
Pay conversion................................. $ 4,811,636 $ 1,478,377
Matching....................................... 3,187,272 873,214
------------ -----------
Total employers............................ 7,998,908 2,351,591
Participants..................................... 250,631 46,325
Rollovers........................................ 976,323 505,435
Loan repayments.................................... 3,213,779 678,781
Interest........................................... 10,250,890 26
Dividends.......................................... -- 2,362,975
Net appreciation/(depreciation) in fair value of
assets........................................... -- 783,218
Participants' transfer between Funds............... (9,599,295) 924,971
Distributions to participants...................... (20,391,529) (2,626,102)
Forfeitures........................................ (63,476) (37,617)
------------ -----------
Increase (decrease) in Net Assets Available for
Benefits during the year......................... (7,363,769) 4,989,603
Net Assets Available for Benefits at December 31,
1996............................................. $164,829,198 $16,132,085
------------ -----------
Net Assets Available for Benefits at December 31,
1997........................................... $157,465,429 $21,121,688
============ ===========
</TABLE>
See accompanying notes.
2
<PAGE> 3
<TABLE>
<CAPTION>
GROWTH
EQUITIES INTERNATIONAL EMERGING MARKETS LONG-TERM VALUE OTC PARTICIPANT TOTAL
FUND EQUITY FUND EQUITY FUND BOND FUND EQUITY FUND FUND LOANS ALL FUNDS
-------- ------------- ---------------- --------- ----------- ---- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
-- -- -- -- -- -- -- $126,171,163
$45,977,286 $13,112,222 $7,430,013 -- -- -- -- 190,283,542
-- -- -- -- $35,448,349 $2,396,302 -- 37,844,651
-- -- -- $8,988,930 -- -- -- 166,454,359
-- -- -- -- -- -- -- 7,104,033
-- -- -- -- -- -- $21,475,536 21,475,536
-- -- -- -- -- -- -- --
----------- ----------- ---------- ---------- ----------- ---------- ----------- ------------
$45,977,286 $13,112,222 $7,430,013 $8,988,930 $35,448,349 $2,396,302 $21,475,536 $549,333,284
=========== =========== ========== ========== =========== ========== =========== ============
$ 3,735,560 $ 1,220,583 $ 1,352,571 $ 635,886 $2,309,570 $ 60,573 $ -- $ 24,139,320
2,117,886 686,080 773,545 383,602 1,306,192 32,420 -- 14,700,916
----------- ----------- ----------- ----------- ----------- ---------- ------------ ------------
5,853,446 1,906,663 2,126,116 1,019,488 3,615,762 92,993 -- 38,840,236
139,065 47,660 51,935 24,187 96,649 3,078 -- 939,867
723,087 177,542 104,538 147,506 725,532 53,327 -- 5,340,491
1,552,282 552,516 565,125 295,310 1,026,858 27,501 (13,228,290) --
61 24 24 7,008 32 -- 1,888,986 12,356,651
4,237,789 475,949 97,254 590,492 1,081,529 130,219 -- 12,185,796
4,376,139 935,216 (3,938,500) 47,329 6,149,317 (318,268) -- 70,721,575
(797,641) (40,183) (3,253,493) 1,773,474 4,752,882 2,415,350 11,527,123 --
(6,928,489) (2,518,528) (2,620,151) (1,227,126) (3,696,077) (7,820) (2,284,089) (75,051,076)
(138,630) (41,828) (55,098) (14,491) (64,486) (78) -- (391,745)
----------- ----------- ----------- ----------- ----------- ---------- ------------ ------------
9,017,109 1,495,031 (6,922,250) 2,663,177 13,687,998 2,396,302 (2,096,270) 64,941,795
$36,960,177 $11,617,191 $14,352,263 $6,325,753 $21,760,351 -- $ 23,571,806 $484,391,489
----------- ----------- ----------- ----------- ----------- ---------- ------------ ------------
$45,977,286 $13,112,222 $ 7,430,013 $8,988,930 $35,448,349 $2,396,302 $ 21,475,536 $549,333,284
=========== =========== =========== =========== =========== ========== ============ ============
</TABLE>
3
<PAGE> 4
CAPITAL ACCUMULATION PLAN OF
THE CHUBB CORPORATION, CHUBB & SON INC.
AND PARTICIPATING AFFILIATES
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
S&P 500 SHORT-TERM CHUBB FIXED
INDEX INCOME CORPORATION INCOME BALANCED
FUND FUND STOCK FUND FUND FUND
------- ---------- ----------- ------ --------
<S> <C> <C> <C> <C> <C>
Investments at fair value
(Notes 1 and 3)
Common Stock of The Chubb
Corporation................ -- -- $96,024,482 -- --
Mutual Funds................. $84,580,098 -- -- -- $15,834,784
Investment in Equities....... -- -- -- -- --
Fixed Income Securities...... -- -- -- $161,099,199 --
Pooled Investments:
US Government Money Market
Fund..................... -- $6,562,036 2,215,750 3,223,769 --
EGSF Venture Capital
Fund..................... 10,433 -- -- -- --
Participant Loans............ -- -- -- --
Accrued Income................. -- 26,950 492,429 12,873 --
Participants' transfers
receivable (payable) between
Funds........................ (405,572) (566) (663,375) 493,357 297,301
----------- ---------- ----------- ------------ -----------
Net Assets Available for
Benefits at December 31,
1996 (Note 4)............ $84,184,959 $6,588,420 $98,069,286 $164,829,198 $16,132,085
=========== ========== =========== ============ ===========
</TABLE>
See accompanying notes.
4
<PAGE> 5
<TABLE>
<CAPTION>
GROWTH
EQUITIES INTERNATIONAL EMERGING MARKETS LONG-TERM VALUE PARTICIPANT TOTAL
FUND EQUITY FUND EQUITY FUND BOND FUND EQUITY FUND LOANS ALL FUNDS
-------- ------------- ---------------- --------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
-- -- -- -- -- -- $ 96,024,482
$36,984,067 $11,441,815 $14,405,711 -- -- -- 163,246,475
-- -- -- -- $21,621,712 -- 21,621,712
-- -- -- $6,221,912 -- -- 167,321,111
-- -- -- 61,418 -- -- 12,062,973
-- -- -- -- -- -- 10,433
-- -- -- -- -- $23,571,806 23,571,806
-- -- -- 245 -- -- 532,497
(23,890) 175,376 (53,448) 42,178 138,639 -- --
----------- ----------- ----------- ---------- ----------- ----------- ------------
36,960,177
$ $11,617,191 $14,352,263 $6,325,753 $21,760,351 $23,571,806 $484,391,489
=========== =========== =========== ========== =========== =========== ============
</TABLE>
5
<PAGE> 6
CAPITAL ACCUMULATION PLAN OF
THE CHUBB CORPORATION, CHUBB & SON INC.
AND PARTICIPATING AFFILIATES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Investment valuation
The Plan's assets at December 31, 1997 are held by Fidelity Management
Trust Company, as successor trustee to The Chase Manhattan Bank, N.A. in a trust
established effective July 1, 1997 for the benefit of the participants of the
Plan and at December 31, 1996, the Plan's assets were held by The Chase
Manhattan Bank, N.A. in a trust established effective January 1, 1994 for the
benefit of the participants of the Plan (the "Trust Fund").
The Trust Fund's assets are valued as follows:
- Marketable equity and debt securities traded on a national securities
exchange are valued at the last reported sale price on the last
business day of the year. Such securities traded in the over-the-
counter market are valued at the closing bid price on the last
business day of the calendar year.
- Interests in commingled trust funds, mutual funds and pooled
investment funds are valued at the redemption price established by the
trustee or the investment manager of the respective fund.
- Participants' notes are valued at the unpaid principal balances, with
maturities ranging from one to ten years. Notes executed during the
period January 1, 1984 through September 30, 1989, bear interest at a
rate which is one percent less than the 90-day Treasury Bill rate as
established by the Federal Reserve Bank at its offering immediately
preceding the valuation date next preceding the valuation date on
which the loan is made, except that the rate shall not exceed the
guaranteed annual rate of return of the Fixed Income Fund for the
quarter ending on the applicable valuation date next preceding the
valuation date on which the loan is made, nor the maximum rate
permitted by applicable law. Notes executed during the period
September 30, 1989 through March 20, 1994 bear interest at a rate
which is equal to the prime rate charged by Citibank, N.A. as of the
applicable valuation date next preceding the valuation date on which
the loan is made, rounded up to the next whole integer, except that
the rate shall not exceed the maximum rate permitted by applicable
law. Notes executed after March 20, 1994 bear interest at a rate which
is equal to the prime rate as reported in the Wall Street Journal on
the last business day of the month next preceding the valuation date
on which the loan is made, rounded up to the next whole integer,
except that the rate shall not exceed the maximum rate permitted by
applicable law.
- The underlying investments of the Fixed Income Fund are contracts with
insurance companies and banks under which each insurance company or
bank agrees to pay a rate of interest equal to or in excess of the
rate initially guaranteed for a specified period of time. These
investment contracts are fully benefit responsive and are valued at
contract value, which approximates fair value therefore, no valuation
reserve is required. Contract value represents contributions to the
fund plus interest accrued less redemptions. The crediting interest
rates for both calendar year 1997 and 1996 ranged from 5.37% to 7.89%.
Generally, crediting interest rates reset quarterly or annually.
However, some rates extend through the maturity date of the contract.
The average yield for the calendar years 1997 and 1996 were 6.7% and
6.6%, respectively. These contracts are subject to certain
restrictions or penalties in the event of early withdrawal or
liquidation.
Security transactions
Purchases and sales of securities are recorded on trade dates. Gains or
losses on the sale of securities are based on average cost.
Dividend income is recorded on the ex-dividend date. Interest income is
recorded on an accrual basis.
6
<PAGE> 7
CAPITAL ACCUMULATION PLAN OF
THE CHUBB CORPORATION, CHUBB & SON INC.
AND PARTICIPATING AFFILIATES
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1997 AND 1996
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
Administrative and investment management expenses
All expenses related to the administration of the Plan and all fees paid to
the trustee and other investment managers for the management of the Plan's
investments, except for brokerage commissions and transfer taxes are expected,
but not required to be paid by The Chubb Corporation, Chubb & Son Inc. and
Participating Affiliates (the "Employers" or "Plan Sponsors"). The Plan
Administrator, the Profit Sharing Committee, is authorized to charge
Participants account maintenance fees.
In 1997 and 1996, virtually all expenses were paid by the employers on
behalf of the Plan.
Income tax status
The Internal Revenue Service ("IRS") has determined and informed the
Company by letter dated December 22, 1995 that the Plan qualifies under Section
401(a) of the Internal Revenue Code ("IRC"), and therefore the trust established
under the Plan is tax-exempt. The Plan administrator and its counsel believe
that the Plan is currently designed and being operated in compliance with
applicable requirements of the IRC.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
2. PLAN DESCRIPTION
The following is an overall description of the Plan. More detailed
information may be obtained in the Plan document which is maintained by the Plan
Administrator.
The Plan is a defined contribution plan. Generally, each employee is
eligible to participate in the Plan either upon the completion of one year of
service and the attainment of age 21 or the completion of two years of service.
Under the Plan, a participant may elect to have part of his or her salary
otherwise due from the Employer contributed to the Plan by such Employer on a
pre-tax basis (the employer pay conversion contribution) or after tax basis
(participant contribution). The Plan is funded on a bi-weekly basis. Pre-tax
contributions are subject to an annual limitation of $9,500 in 1997 and 1996,
which may be increased annually based on the Consumer Price Index. A
participant's pre-tax pay conversion contributions are matched dollar for dollar
up to the first 4% of compensation (the employer matching contribution). In
addition, employees may make rollover contributions from other qualified plans.
The Plan allows each participant the option of investing his or her own
contribution and his or her share of the employer's matching contribution in
several investment funds. Effective July 1, 1997, one additional fund, the Over
The Counter Fund ("OTC Fund") was added to the Plan. Participants may, subject
to limitations, transfer their investments between funds at their own request.
Generally, the investments of the individual funds are managed by several
outside investment managers, subject to the Plan's guidelines. Through October
30, 1996, Chubb Equity Managers, Inc., a subsidiary of The Chubb Corporation,
was the investment manager of the Value Equity Fund.
A separate account is maintained for each participant. Each participant
employed prior to December 31, 1992 has a 100% vested nonforfeitable interest in
all units credited to his or her account. A participant hired after December 31,
1992 is required to complete five years of service in order to have a 100%
vested
7
<PAGE> 8
CAPITAL ACCUMULATION PLAN OF
THE CHUBB CORPORATION, CHUBB & SON INC.
AND PARTICIPATING AFFILIATES
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1997 AND 1996
2. PLAN DESCRIPTION -- (CONTINUED)
nonforfeitable interest in units credited to his or her account attributable to
the employer matching contribution and earnings on the employer matching
contribution. Service with affiliated non-participating companies is considered
in calculating vesting and participation service. Forfeited balances of
terminated participants' nonvested accounts are used to reduce future company
contributions or pay plan expenses.
A participant may withdraw any amount which does not exceed the aggregate
current value of his or her own contributions, subject to certain limitations.
In the event of financial hardship, there are provisions, subject to limitations
and penalties, which will permit an active participant to withdraw certain other
amounts from his or her account. All withdrawals must be in cash.
Participants may obtain loans from the Plan pursuant to the provisions
specified in the Plan. Loans are payable in equal installments representing a
combination of interest and principal by withholding from the participant's
biweekly paychecks, and the outstanding principal amounts of any loans can be
prepaid on any applicable valuation date. In the event a participant has a loan
outstanding under the Plan, various limitations exist on such participant's
rights to receive further loans under the Plan.
Upon retirement, the balance in a participant's account is payable to him
or her in a lump sum or in annual installments over 5, 10 or 15 years or over a
period equal to his or her life expectancy or to the joint life expectancies of
the participant and his or her spousal beneficiary. In addition to these
options, a participant may elect to defer the lump sum payment or the
commencement of annual installments until the day following any applicable
valuation date, then elected by him or her, which is not later than the April 1
of the calendar year following the calendar year in which the participant
attains age 70 1/2. In the event of termination of employment other than by
reason of retirement or death, a participant will receive the balance in his or
her separate account in a lump sum payment. However, if the value in the
participant's account is greater than a certain limit, the participant may
choose either to receive the lump sum distribution or to leave the units
invested in the Plan until age 65, disability or death. If a participant dies,
before or after retirement or after termination, any remaining balance in his or
her account is paid to his or her estate or beneficiary under any of the
following payment options: (a) lump sum, (b) installments as received by the
participant prior to death, or (c) installment payments in accordance with the
Plan, regardless of method received by participant prior to death.
Upon request, any lump sum distribution to a participant or his or her
beneficiary from The Chubb Corporation Stock Fund may be made in common stock of
The Chubb Corporation in lieu of cash payments.
While the Employers have not expressed any intent to terminate the Plan,
they are free to do so at any time subject to the provisions of ERISA. In the
event of such a termination, each affected participant is entitled to receive
the value of his or her account.
3. INVESTMENTS
The Trust Fund is managed by Fidelity Management Trust Company (the
"Trustee") successor to the The Chase Manhattan Bank, N.A., effective July 1,
1997, a fiduciary with respect to the Plan under an agreement with the
Employers. The Trust Fund's assets are held or accounted for by the Trustee
under a trust agreement. The Trustee and certain investment managers have full
discretionary authority for the purchase and sale of investments subject to
certain limitations on the composition of the portfolio as specified in the
trust agreement.
8
<PAGE> 9
CAPITAL ACCUMULATION PLAN OF
THE CHUBB CORPORATION, CHUBB & SON INC.
AND PARTICIPATING AFFILIATES
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1997 AND 1996
3. INVESTMENTS -- (CONTINUED)
The following table presents investments. Investments that represent 5
percent or more of the Plan's net assets are separately identified.
<TABLE>
<CAPTION>
DECEMBER 31, 1997 DECEMBER 31, 1996
---------------------------- ----------------------------
COST FAIR VALUE COST FAIR VALUE
---- ---------- ---- ----------
<S> <C> <C> <C> <C>
Fixed Income Securities
Investments in Insurance and
Bank Contracts............... $157,465,429 $157,465,429 $161,099,199 $161,099,199
Bond Mutual Fund................ 8,856,360 8,988,930 6,069,848 6,221,912
------------ ------------ ------------ ------------
Subtotal................ $166,321,789 $166,454,359 $167,169,047 $167,321,111
------------ ------------ ------------ ------------
The Chubb Corporation Common
Stock........................... $ 45,605,755 $126,171,163 $ 44,962,569 $ 96,024,482
Investments in Equities
Strong Schafer Value Fund....... $ 29,256,569 $ 35,448,349 $ 20,681,783 $ 21,621,712
OTC Fund........................ 2,690,353 2,396,302 -- --
------------ ------------ ------------ ------------
$ 31,946,922 $ 37,844,651 $ 20,681,783 $ 21,621,712
Mutual Funds
Spartan U.S. Equity Index
Fund......................... $ 95,191,945 $102,642,333 $ 58,752,264 $ 84,580,098
Fidelity Contrafund Fund........ 37,881,663 45,977,286 31,050,295 36,984,067
Other........................... 43,309,383 41,663,923 38,951,262 41,682,310
------------ ------------ ------------ ------------
Subtotal................ $176,382,991 $190,283,542 $128,753,821 $163,246,475
------------ ------------ ------------ ------------
Money Market Funds................ $ 7,104,033 $ 7,104,033 $ 12,068,725 $ 12,073,406
Participant Loans (maturing from
January 1998 to December 2007
with interest rates from 4.64%
to 11%)......................... $ 21,475,536 $ 21,475,536 $ 23,571,806 $ 23,571,806
------------ ------------ ------------ ------------
TOTAL................... $448,837,027 $549,333,284 $397,207,751 $483,858,992
============ ============ ============ ============
</TABLE>
4. UNITS OF PARTICIPATION AND VALUES
The interest of an employee in the investment chosen is represented by
units of participation. Effective July 1, 1997, investment values are reported
in shares rather than units, in order for participants to more easily track fund
performance. The number and value of shares or units at the quarterly valuation
dates for the years ended December 31, 1997 and 1996 were as follows:
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF NET ASSET
SHARES/UNITS NET ASSET UNITS VALUE
HELD BY VALUE PER HELD BY PER
PARTICIPANTS SHARES/UNIT PARTICIPANTS UNIT
-------------- ------------ ------------- ----------
DECEMBER 31, 1997 DECEMBER 31, 1996
----------------------------- --------------------------
<S> <C> <C> <C> <C>
S&P 500 Index Fund.......................................... 2,934,314.83 $34.98 283,437.539 $296.51
Short-Term Income Fund...................................... 7,104,032.84 1.00 63,823.792 102.78
Chubb Corporation Stock Fund................................ 11,106,616.44 11.36 169,965.367 576.45
Fixed Income Fund........................................... 157,465,429.30 1.00 2,943,744.330 55.89
Balanced Fund............................................... 986,073.19 21.42 1,123,532.807 14.36
Growth Equities Fund........................................ 986,002.26 46.63 221,570.939 16.71
International Equity Fund................................... 812,909.02 16.13 943,926.060 12.30
Emerging Markets Equity Fund................................ 824,640.70 9.01 1,024,989.426 14.00
Long-Term Bond Fund......................................... 754,104.88 11.92 502,219.969 12.59
Value Equity Fund........................................... 554,747.25 63.90 1,372,171.144 15.85
OTC Fund.................................................... 71,638.33 33.45 -- --
</TABLE>
9
<PAGE> 10
CAPITAL ACCUMULATION PLAN OF
THE CHUBB CORPORATION, CHUBB & SON INC.
AND PARTICIPATING AFFILIATES
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1997 AND 1996
4. UNITS OF PARTICIPATION AND VALUES -- (CONTINUED)
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF
SHARES/UNITS NET ASSET UNITS NET ASSET
HELD BY VALUE PER HELD BY VALUE
PARTICIPANTS SHARES/UNIT PARTICIPANTS PER UNIT
-------------- ------------ ------------- ----------
SEPTEMBER 30, 1997 SEPTEMBER 30, 1996
----------------------------- --------------------------
<S> <C> <C> <C> <C>
S&P 500 Index Fund.......................................... 2,967,886.55 $34.31 278,885.769 $273.77
Short-Term Income Fund...................................... 6,676,579.05 1.00 66,741.220 101.54
Chubb Corporation Stock Fund................................ 11,314,927.58 10.65 177,931.350 491.65
Fixed Income Fund........................................... 156,678,115.05 1.00 2,950,902.900 55.00
Balanced Fund............................................... 877,376.08 23.07 1,018,605.896 13.74
Growth Equities Fund........................................ 900,187.33 51.61 2,112,318.948 15.40
International Equity Fund................................... 798,835.59 17.48 870,694.060 12.00
Emerging Markets Equity Fund................................ 903,580.99 12.46 986,305.034 13.38
Long-Term Bond Fund......................................... 626,313.45 12.22 467,640.466 12.12
Value Equity Fund........................................... 522,217.58 67.29 1,299,803.102 14.25
OTC Fund.................................................... 47,898.67 39.31 -- --
</TABLE>
<TABLE>
<CAPTION>
JUNE 30, 1997 JUNE 30, 1996
----------------------------- --------------------------
<S> <C> <C> <C> <C>
S&P 500 Index Fund.......................................... 264,204.54 $358.31 276,596.175 $265.70
Short-Term Income Fund...................................... 56,603.82 105.34 67,876.302 100.28
Chubb Corporation Stock Fund................................ 159,491.05 721.76 180,690.957 529.50
Fixed Income Fund........................................... 2,763,478.40 57.71 2,971,994.281 54.10
Balanced Fund............................................... 1,155,278.59 15.90 967,910.730 13.40
Growth Equities Fund........................................ 2,212,965.62 18.59 2,070,339.946 14.94
International Equity Fund................................... 897,771.19 13.99 845,800.479 12.12
Emerging Markets Equity Fund................................ 927,161.64 14.50 1,012,634.265 13.29
Long-Term Bond Fund......................................... 490,132.69 13.08 438,547.483 11.85
Value Equity Fund........................................... 1,557,625.73 18.48 1,257,728.556 14.14
OTC Fund.................................................... -- -- -- --
</TABLE>
<TABLE>
<CAPTION>
MARCH 31, 1997 MARCH 31, 1996
----------------------------- --------------------------
<S> <C> <C> <C> <C>
S&P 500 Index Fund.......................................... 281,513.33 $304.11 269,431.175 $254.37
Short-Term Income Fund...................................... 60,712.23 104.03 69,818.270 99.08
Chubb Corporation Stock Fund................................ 168,891.47 580.83 182,067.039 496.38
Fixed Income Fund........................................... 2,859,649.97 56.79 3,020,451.124 53.24
Balanced Fund............................................... 1,198,251.47 14.53 923,300.124 13.00
Growth Equities Fund........................................ 2,348,727.40 16.47 1,835,551.111 14.49
International Equity Fund................................... 961,789.80 12.34 750,107.566 11.73
Emerging Markets Equity Fund................................ 1,046,141.02 13.04 954,681.949 13.69
Long-Term Bond Fund......................................... 506,739.95 12.60 425,322.911 11.71
Value Equity Fund........................................... 1,539,665.82 15.98 1,142,002.994 13.55
OTC Fund.................................................... -- -- -- --
</TABLE>
5. FUND BALANCES DUE PARTICIPANTS
Amounts allocated to accounts of Participants who have withdrawn from
participation in the Plan at December 31, 1997 were $19,682 compared with
$517,510 in 1996.
For the purpose of preparing the Plan's Form 5500, the Department of Labor
Rules and Regulations require that these amounts be reported as liabilities.
Distributions to Participants on Form 5500 also differ for this reason.
6. YEAR 2000 ISSUE (UNAUDITED)
The Plan Sponsors have developed a plan to modify its internal information
technology to be ready for the year 2000 and have begun converting critical data
processing systems. The project also includes determining whether third party
service providers have reasonable plans in place to become year 2000 compliant.
The Plan Sponsors currently expect the project to be substantially complete by
early 1999. The Plan Sponsors do not expect this project to have a significant
effect on plan operations.
10
<PAGE> 11
EIN: 13-2595722
PLAN 002
CAPITAL ACCUMULATION PLAN OF
THE CHUBB CORPORATION, CHUBB & SON INC.
AND PARTICIPATING AFFILIATES
ITEM 27A -- ASSETS HELD FOR INVESTMENT
DECEMBER 31, 1997
<TABLE>
<CAPTION>
# OF UNITS CONTRACT OR
SECURITY DESCRIPTION OR SHARES COST FAIR VALUE
-------------------- ---------- ---- -----------
<S> <C> <C> <C>
Fixed Income Securities
CNA Insurance Company.......................... 1 $ 6,503,281 $ 6,503,281
Contract #GP13027-016, due on 3/31/99, at
6.69%
CNA Insurance Company.......................... 1 14,058,966 14,058,966
Contract #GP13027, Division 006, due in
equal maturities on 9/30/99 and 12/31/99,
at 7.83%
Hartford Life Insurance Company................ 1 10,119,363 10,119,363
Contract #GA9655, due in equal maturities on
3/31/98, 6/30/98, 9/30/98 and 12/31/98, at
5.92%
John Hancock Life Insurance Company............ 1 15,190,865 15,190,865
Contract #7836, due in equal maturities on
3/31/2000 and 9/30/2000, at 7.33%
John Hancock Life Insurance Company............ 1 6,516,172 6,516,172
Contract #8642, due on 3/31/2001, at 6.86%
Pacific Mutual Life Insurance Company.......... 1 10,108,288 10,108,288
Contract #G-25863-02, due in equal
maturities on 3/31/98, 6/30/98, 9/30/98
and 12/31/98, at 5.90%
Pacific Mutual Life Insurance Company.......... 1 7,628,308 7,628,308
Contract #G25863-03, due 6/30/99, at 7.34%
Peoples Life Insurance Company................. 1 3,345,769 3,345,769
Contract BDA 00602FR, due on 6/30/2000, at
6.45%
Peoples Life Insurance Company................. 1 14,084,924 14,084,924
Contract #BDA00666FR-00, due in equal
maturities on 9/30/99 and 12/31/99, at
7.89%
Peoples Life Insurance Company................. 1 6,887,286 6,887,286
Contract #BDA00667FR-00, due on 6/30/2000,
at 6.33%
Principal Mutual Life Insurance Company........ 1 15,198,668 15,198,668
Contract #3-15670, due in equal maturities
on 3/31/2000 and 9/30/2000, at 7.35%
Principal Mutual Life Insurance Company........ 1 6,898,733 6,898,733
Contract #3-16924, due on 12/31/2000, at
6.41%
Provident National Assurance Company........... 1 10,140,466 10,140,466
Contract #627-05490, due on 3/31/98,
6/30/98, 9/30/98 and 12/31/98, at 5.97%
Prudential Asset Management.................... 1 9,099,074 9,099,074
Contract #6529-212, due in equal maturities
on 3/31/98, 6/30/98, 9/30/98 and 12/31/98,
at 6.04%
Prudential Asset Management.................... 1 16,179,717 16,179,717
Contract #6529-213, due in equal maturities
on 3/31/98, 6/30/98, 9/30/98 and 12/31/98,
at 5.37%
</TABLE>
11
<PAGE> 12
EIN: 13-2595722
PLAN 002
CAPITAL ACCUMULATION PLAN OF
THE CHUBB CORPORATION, CHUBB & SON INC.
AND PARTICIPATING AFFILIATES -- (CONTINUED)
ITEM 27A -- ASSETS HELD FOR INVESTMENT
DECEMBER 31, 1997
<TABLE>
<CAPTION>
# OF UNITS CONTRACT OR
SECURITY DESCRIPTION OR SHARES COST FAIR VALUE
-------------------- ---------- ---- -----------
<S> <C> <C> <C>
Short Term Interest Fund....................... $ 5,505,549 $ 5,505,549
MAS Funds Fixed Income Portfolio............... 754,104.86 8,856,360 8,988,930
------------ ------------
Subtotal.................................... $166,321,789 $166,454,359
------------ ------------
The Chubb Corporation Common Stock............... 11,106,616 $ 45,605,755 $126,171,163
------------ ------------
Investments in Equities (Common stock unless
otherwise noted)
Strong Schafer Value Fund...................... 554,747.25 $ 29,256,569 $ 35,448,349
OTC Fund....................................... 71,638.33 2,690,353 2,396,302
------------ ------------
Subtotal.................................... $ 31,946,922 $ 37,844,651
------------ ------------
Mutual Funds
Colonial Tr VII Newport Tiger Fund Class Z..... 824,640.70 $ 9,690,034 $ 7,430,013
Spartan U.S. Equity Index Fund................. 2,934,314.83 95,191,946 102,642,333
Columbia Balanced Fund......................... 986,073.19 19,873,287 21,121,688
Fidelity Contrafund Fund....................... 986,002.28 37,881,663 45,977,286
Fidelity Diversified International Fund........ 812,809.02 13,746,062 13,112,222
------------ ------------
Subtotal.................................... $176,382,992 $190,283,542
------------ ------------
Money Market Fund -- Fidelity Retirement
Government Money Market Portfolio.............. 7,104,032.84 $ 7,104,033 $ 7,104,033
Participant Loans (Maturities January 1998 to
December 2007, Rates 4.64% to 11%)............. $ 21,475,536 $ 21,475,536
------------ ------------
TOTAL..................................... $448,837,027 $549,333,284
============ ============
</TABLE>
12
<PAGE> 13
EIN: 13-2595722
PLAN 002
CAPITAL ACCUMULATION PLAN OF
THE CHUBB CORPORATION, CHUBB & SON INC.
AND PARTICIPATING AFFILIATES
EXHIBIT 27D -- SCHEDULE OF REPORTABLE TRANSACTIONS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SALE OR COST OF NET
NUMBER OF PURCHASE REDEMPTION ASSETS GAIN
TRANSACTIONS PRICE PRICE SOLD (LOSS)
------------ -------- ---------- ------- ------
<S> <C> <C> <C> <C> <C>
Category (iii) -- Series of
transactions in excess of 5%
of plan assets:
Fixed Income Fund............ 332 $ 21,047,740 $ 31,678,587 $31,678,587 --
Chubb Corporation Stock
Fund...................... 234 $ 9,704,319 $ 19,044,228 $10,183,434 $ 8,860,794
Short Term Income Fund....... 628 $146,937,867 $ 54,876,063 $54,876,063 --
S&P 500 Index Fund........... 355 $ 14,512,650 $115,439,591 $72,739,235 $42,700,356
</TABLE>
There were no category (i) or (ii) or (iv) reportable transactions during 1997.
13
<PAGE> 14
REPORT OF INDEPENDENT AUDITORS
The Profit Sharing Committee
Capital Accumulation Plan of The Chubb Corporation,
Chubb & Son Inc. and Participating Affiliates
We have audited the accompanying statements of Net Assets Available for
Plan Benefits of the Capital Accumulation Plan of The Chubb Corporation, Chubb &
Son Inc. and Participating Affiliates as of December 31, 1997 and 1996, and the
related Statement of Changes in Net Assets Available for Plan Benefits for the
year ended December 31, 1997. These financial statements are the responsibility
of the Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the Net Assets Available for Plan Benefits of the
Capital Accumulation Plan of The Chubb Corporation, Chubb & Son Inc. and
Participating Affiliates at December 31, 1997 and 1996 and the Changes in its
Net Assets Available for Plan Benefits for the year ended December 31, 1997, in
conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
of assets held for investment purposes as of December 31, 1997, and reportable
transactions for the year then ended, are presented for purposes of complying
with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974, and are
not a required part of the basic financial statements. The Fund Information in
the Statements of Net Assets Available for Plan Benefits and the Statement of
Changes in Net Assets Available for Plan Benefits is presented for purposes of
additional analysis rather than to present the net assets available for plan
benefits and changes in net assets available for plan benefits of each fund. The
supplemental schedules and Fund Information have been subjected to the auditing
procedures applied in our audits of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
ERNST & YOUNG LLP
New York, New York
June 26, 1998
------------------------
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statements
(Form S-8:
No. 33-12208, No. 33-29185, No. 33-30020, No. 33-49230 and No. 33-49232)
pertaining to the Capital Accumulation Plan of The Chubb Corporation, Chubb &
Son Inc. and Participating Affiliates and in the related Prospectuses of our
report dated June 26, 1998 with respect to the financial statements and
schedules of the Capital Accumulation Plan of The Chubb Corporation, Chubb & Son
Inc. and Participating Affiliates included in this Annual Report (Form 11-K) for
the year ended December 31, 1997.
ERNST & YOUNG LLP
New York, New York
June 26, 1998
14
<PAGE> 15
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
PROFIT SHARING COMMITTEE OF THE CAPITAL ACCUMULATION PLAN OF THE CHUBB
CORPORATION, CHUBB & SON INC. AND PARTICIPATING AFFILIATES HAS DULY CAUSED THIS
ANNUAL REPORT TO BE SIGNED BY THE UNDERSIGNED THEREUNTO DULY AUTHORIZED.
CAPITAL ACCUMULATION PLAN OF
THE CHUBB CORPORATION, CHUBB & SON INC. and
PARTICIPATING AFFILIATES
By: DONALD B. LAWSON
--------------------------
DONALD B. LAWSON, A MEMBER
OF THE PROFIT SHARING
COMMITTEE
Dated: June 26, 1998
