<PAGE> 1
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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, 1998
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
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<PAGE> 2
CAPITAL ACCUMULATION PLAN OF
THE CHUBB CORPORATION, CHUBB & SON INC.
AND PARTICIPATING AFFILIATES
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1998
<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................ -- -- $107,580,899 -- --
Mutual Funds................. $132,423,032 -- -- -- $28,304,740
Fixed Income Securities...... -- -- -- $166,001,126 --
Money Market Fund -- Fidelity
Retirement Government Money
Market..................... -- $9,526,540 -- -- --
Participant Loans............ -- -- -- -- --
------------ ---------- ------------ ------------ -----------
Net Assets Available for
Benefits at December 31,
1998..................... $132,423,032 $9,526,540 $107,580,899 $166,001,126 $28,304,740
============ ========== ============ ============ ===========
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 1998
<TABLE>
<S> <C> <C> <C>
Contributions
Employees:
Participants................................... $ 148,373 $ 10,040 $ 104,124
Pay conversion................................. 4,513,134 373,044 4,041,068
------------ ----------- ------------
Total employees............................ 4,661,507 383,084 4,145,192
Employer Match................................... 2,647,047 266,594 2,547,535
Rollovers and transfers from other plans......... 1,835,574 703,513 3,418,088
Loan repayments.................................. 2,012,686 187,985 2,604,657
Interest........................................... -- -- --
Dividends.......................................... 2,597,999 452,055 --
Net appreciation/(depreciation) in fair value of
assets........................................... 26,390,958 -- (15,157,100)
Participants' transfer between Funds............... (1,778,333) 1,893,670 (6,245,653)
Distributions to participants...................... (8,492,768) (1,501,134) (9,829,800)
Forfeitures........................................ (93,971) 36,740 (73,183)
------------ ----------- ------------
Increase (decrease) in plan equity during the
year............................................. 29,780,699 2,422,507 (18,590,264)
Plan equity at December 31, 1997................... $102,642,333 $7,104,033 $126,171,163
------------ ----------- ------------
Plan equity at December 31, 19998................ $132,423,032 $9,526,540 $107,580,899
============ =========== ============
<CAPTION>
<S> <C> <C>
Contributions
Employees:
Participants................................... $ 173,374 $ 51,817
Pay conversion................................. 3,718,572 1,572,280
------------ -----------
Total employees............................ 3,891,946 1,624,097
Employer Match................................... 2,436,484 914,144
Rollovers and transfers from other plans......... 4,139,621 528,554
Loan repayments.................................. 2,534,403 603,936
Interest........................................... 10,293,964 --
Dividends.......................................... -- 2,770,031
Net appreciation/(depreciation) in fair value of
assets........................................... -- 1,760,441
Participants' transfer between Funds............... (73,999) 14,663
Distributions to participants...................... (14,664,217) (1,097,799)
Forfeitures........................................ (22,505) 64,985
------------ -----------
Increase (decrease) in plan equity during the
year............................................. 8,535,697 7,183,052
Plan equity at December 31, 1997................... $157,465,429 $21,121,688
------------ -----------
Plan equity at December 31, 19998................ $166,001,126 $28,304,740
============ ===========
</TABLE>
See accompanying notes.
2
<PAGE> 3
<TABLE>
<CAPTION>
GROWTH OTC
EQUITY INTERNATIONAL EMERGING MARKETS LONG-TERM VALUE GROWTH PARTICIPANT TOTAL
FUND EQUITY FUND EQUITY FUND BOND FUND EQUITY FUND FUND LOANS ALL FUNDS
------ ------------- ---------------- --------- ----------- ------ ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
-- -- -- -- -- -- -- $107,580,899
$62,353,720 $16,161,744 $ 6,418,072 $15,081,742 $31,234,168 $6,972,564 -- 298,949,782
-- -- -- -- -- -- -- 166,001,126
-- -- -- -- -- -- -- 9,526,540
-- -- -- -- -- -- $ 19,441,401 19,441,401
----------- ----------- ----------- ----------- ----------- ---------- ------------ ------------
62,353,720
$ $16,161,744 $ 6,418,072 $15,081,742 $31,234,168 $6,972,564 $ 19,441,401 $601,499,748
=========== =========== =========== =========== =========== ========== ============ ============
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 116,880 $ 37,985 $ 32,753 $ 23,894 $ 107,875 $ 9,967 -- $ 817,082
3,546,725 1,238,723 827,172 697,472 2,677,465 431,512 -- 23,638,167
----------- ----------- ----------- ----------- ----------- ---------- ------------ ------------
3,663,605 1,277,708 859,925 721,366 2,785,340 441,479 -- 24,455,249
1,978,152 686,966 478,044 419,198 1,502,702 236,496 -- 14,113,362
733,132 275,134 58,131 898,030 834,143 408,939 -- 13,832,859
1,234,134 447,796 339,200 274,250 932,077 107,656 $(11,278,780) --
-- -- -- -- -- -- 1,704,675 11,998,639
4,607,890 615,623 139,007 1,081,819 191,586 290,232 -- 12,746,242
9,881,097 1,314,415 (1,033,611) (289,162) (2,742,351) 1,186,131 -- 21,310,818
(2,779,274) (290,876) (1,325,581) 4,097,795 (5,396,013) 2,219,900 9,663,701 --
(2,854,654) (1,155,082) (513,313) (1,101,907) (2,277,233) (309,609) (2,122,192) (45,919,708)
(87,646) (122,162) (13,743) (8,577) (44,432) (4,962) (1,539) (370,997)
----------- ----------- ----------- ----------- ----------- ---------- ------------ ------------
16,376,434 3,049,522 (1,011,941) 6,092,812 (4,214,181) 4,576,262 (2,034,135) 52,166,464
$45,977,286 $13,112,222 $ 7,430,013 $8,988,930 $35,448,349 $2,396,302 $ 21,475,536 549,333,284
----------- ----------- ----------- ----------- ----------- ---------- ------------ ------------
$62,353,720 $16,161,744 $ 6,418,072 $15,081,742 $31,234,168 $6,972,564 $ 19,441,401 $601,499,748
=========== =========== =========== =========== =========== ========== ============ ============
</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, 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
Fixed Income Securities.......................... -- -- -- $157,465,429 --
Money Market Fund -- Fidelity Retirement
Government Money Market........................ -- $7,104,033 -- -- --
Participant Loans................................ -- -- -- -- --
------------ ---------- ------------ ------------ -----------
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>
4
<PAGE> 5
<TABLE>
<CAPTION>
OTC
GROWTH EQUITY INTERNATIONAL EMERGING MARKETS LONG-TERM VALUE GROWTH 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 $8,988,930 $35,448,349 $2,396,302 -- 237,117,123
-- -- -- -- -- -- -- 157,465,429
-- -- -- -- -- -- -- 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
=========== =========== ========== =========== =========== ========== =========== ============
</TABLE>
5
<PAGE> 6
CAPITAL ACCUMULATION PLAN OF
THE CHUBB CORPORATION, CHUBB & SON INC.
AND PARTICIPATING AFFILIATES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Investment valuation
The Plan's assets at December 31, 1998 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 (the "Trust Fund"). Effective June 1, 1998, the assets of such trust became
part of a The Chubb Corporation Master Trust ("Master Trust") along with the
assets of the Corporation's Employee Stock Ownership Plan.
The Trust Fund's assets are valued as follows:
- The Plan's investment in the Master Trust is stated at fair value,
which is the redemption price of the Master Trust's Investments.
- 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 Fixed Income Fund is invested substantially or wholly in contracts
with one or more banks, insurance companies or other financial
institutions under which the Fund receives a specified rate of
interest, fixed income securities related to such contracts,
securities issued or guaranteed by the United States government or any
instrumentality or agency thereof, and other short term instruments
designed to provide the Fund with adequate liquidity. The 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 1998 and 1997 ranged from 5.91% to 5.37%.
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 1998 and 1997 were 6.65% and
6.7%, respectively. These contracts are subject to certain
restrictions or penalties in the event of early withdrawal or
liquidation.
6
<PAGE> 7
CAPITAL ACCUMULATION PLAN OF
THE CHUBB CORPORATION, CHUBB & SON INC.
AND PARTICIPATING AFFILIATES
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1998 AND 1997
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
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.
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 1998 and 1997, 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 has been amended since receiving the
determination letter. The Plan administrator and its counsel believe that the
Plan is currently designed and being operated in compliance with applicable
requirements of the IRC. The Plan Administrator has indicated that it will take
the necessary steps, if any, to maintain the Plan's qualified status.
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 $10,000 in 1998 and $9,500
in 1997, 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 Growth Fund ("OTC Growth 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.
7
<PAGE> 8
CAPITAL ACCUMULATION PLAN OF
THE CHUBB CORPORATION, CHUBB & SON INC.
AND PARTICIPATING AFFILIATES
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1998 AND 1997
2. PLAN DESCRIPTION -- (CONTINUED)
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 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 participant 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 master trust agreement effective, June 1, 1998, along with the assets of
the Corporation's Employee Stock Ownership Plan. The Trustee and certain
investment managers have full discretionary authority for the
8
<PAGE> 9
CAPITAL ACCUMULATION PLAN OF
THE CHUBB CORPORATION, CHUBB & SON INC.
AND PARTICIPATING AFFILIATES
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1998 AND 1997
3. INVESTMENTS -- (CONTINUED)
purchase and sale of investments subject to certain limitations on the
composition of the portfolio as specified in the master trust agreement.
The following table presents investments. Investments that represent 5
percent or more of the Master Trust's net assets as of December 31, 1998 and of
the Plan's net assets at December 31, 1997 are separately identified.
<TABLE>
<CAPTION>
DECEMBER 31, 1998 DECEMBER 31, 1997
---------------------------- ----------------------------
COST FAIR VALUE COST FAIR VALUE
---- ---------- ---- ----------
<S> <C> <C> <C> <C>
Fixed Income Securities
Investments in Insurance and
Bank Contracts............... $166,001,126 $166,001,126 $157,465,429 $157,465,429
The Chubb Corporation Common
Stock........................... $ 55,571,106 $107,580,899 $ 45,605,755 $126,171,163
Mutual Funds
Spartan U.S. Equity Index
Fund......................... $101,348,739 $132,423,032 $ 95,191,945 $102,642,333
Fidelity Contrafund Fund........ 46,380,538 62,353,720 37,881,663 45,977,286
Strong Schafer Value Fund....... 28,792,835 31,234,168 29,256,569 35,448,349
Other........................... 71,157,507 72,938,862 54,856,096 53,049,155
------------ ------------ ------------ ------------
Subtotal................ $247,679,619 $298,949,782 $217,186,273 $237,117,123
------------ ------------ ------------ ------------
Money Market Funds................ $ 9,526,540 $ 9,526,540 $ 7,104,033 $ 7,104,033
Participant Loans (maturing from
January 1999 to December 2008
with interest rates from 7%
to 11%)......................... $ 19,441,401 $ 19,441,401 $ 21,475,536 $ 21,475,536
------------ ------------ ------------ ------------
TOTAL................... $498,219,792 $601,499,748 $448,837,027 $549,333,284
============ ============ ============ ============
</TABLE>
4. MASTER TRUST
At December 31, 1998, the Plan's interest in the total investments of the
Master Trust was approximately 75%. Investment income is allocated to the Plan
based upon its pro rata share of the funds in the Master Trust.
In addition to the Plans net assets of $601,499,748, the net assets of the
Master Trust totaling $802,402,862 also include additional Common Stock of The
Chubb Corporation valued at $200,903,114.
The change in net assets of the Master Trust totaling $802,402,862 include
transfers to the Master Trust of $814,075,227, contributions, loan repayments
and transfers (to) from other plans, net of benefit payments of $19,856,539,
interest and dividend income of $19,804,774 and net depreciation in fair value
of investments, net of administrative expenses of $51,333,678.
5. 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
9
<PAGE> 10
CAPITAL ACCUMULATION PLAN OF
THE CHUBB CORPORATION, CHUBB & SON INC.
AND PARTICIPATING AFFILIATES
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1998 AND 1997
5. UNITS OF PARTICIPATION AND VALUES -- (CONTINUED)
track fund performance. The number and value of shares or units at the quarterly
valuation dates for the years ended December 31, 1998 and 1997 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, 1998 DECEMBER 31, 1997
----------------------------- ---------------------------
<S> <C> <C> <C> <C>
S&P 500 Index Fund.......................................... 3,012,352.87 $43.96 2,934,314.83 $34.98
Short-Term Income Fund...................................... 9,526,539.68 1.00 7,104,032.84 1.00
Chubb Corporation Stock Fund................................ 10,801,295.12 9.96 11,106,616.44 11.36
Fixed Income Fund........................................... 166,001,125.99 1.00 157,465,429.30 1.00
Balanced Fund............................................... 1,221,611.58 23.17 986,073.19 21.42
Growth Equity Fund.......................................... 1,097,970.07 56.79 986,002.26 46.63
International Equity Fund................................... 912,062.31 17.72 812,909.02 16.13
Emerging Markets Equity Fund................................ 829,208.22 7.74 824,640.70 9.01
Long-Term Bond Fund......................................... 1,287,936.97 11.71 754,104.88 11.92
Value Equity Fund........................................... 526,803.31 59.29 554,747.25 63.90
OTC Growth Fund............................................. 159,811.23 43.63 71,638.33 33.45
</TABLE>
<TABLE>
<CAPTION>
SEPTEMBER 30, 1998 SEPTEMBER 30, 1997
----------------------------- ---------------------------
<S> <C> <C> <C> <C>
S&P 500 Index Fund.......................................... 2,980,426.92 $36.33 2,967,886.55 $34.31
Short-Term Income Fund...................................... 9,682,094.86 1.00 6,676,579.05 1.00
Chubb Corporation Stock Fund................................ 11,089,330.84 9.62 11,314,927.58 10.65
Fixed Income Fund........................................... 162,783,121.91 1.00 156,678,115.05 1.00
Balanced Fund............................................... 1,076,400.65 22.24 877,376.08 23.07
Growth Equity Fund.......................................... 1,001,309.61 49.51 900,187.33 51.61
International Equity Fund................................... 852,751.09 16.01 798,835.59 17.48
Emerging Markets Equity Fund................................ 903,580.99 12.46 903,580.99 12.46
Long-Term Bond Fund......................................... 1,057,610.33 12.21 626,313.45 12.22
Value Equity Fund........................................... 527,624.74 49.85 522,217.58 67.29
OTC Growth Fund............................................. 136,664.47 33.86 47,898.67 39.31
</TABLE>
<TABLE>
<CAPTION>
JUNE 30, 1998 JUNE 30, 1997
----------------------------- ---------------------------
<S> <C> <C> <C> <C>
S&P 500 Index Fund.......................................... 2,975,808.67 $40.49 264,204.54 $358.31
Short-Term Income Fund...................................... 9,151,839.06 1.00 56,603.82 105.34
Chubb Corporation Stock Fund................................ 10,762,558.11 12.15 159,491.05 721.76
Fixed Income Fund........................................... 156,487,558.25 1.00 2,763,478.40 57.71
Balanced Fund............................................... 1,063,044.81 23.55 1,155,278.59 15.90
Growth Equity Fund.......................................... 995,142.45 54.61 2,212,965.62 18.59
International Equity Fund................................... 859,145.93 18.72 897,771.19 13.99
Emerging Markets Equity Fund................................ 813,627.12 6.23 927,161.64 14.50
Long-Term Bond Fund......................................... 863,429.20 12.14 490,132.69 13.08
Value Equity Fund........................................... 562,998.52 66.06 1,557,625.73 18.48
OTC Growth Fund............................................. 100,970.16 39.71 -- --
</TABLE>
<TABLE>
<CAPTION>
MARCH 31, 1998 MARCH 31, 1997
----------------------------- ---------------------------
<S> <C> <C> <C> <C>
S&P 500 Index Fund.......................................... 3,001,253.40 $39.69 281,513.33 $304.11
Short-Term Income Fund...................................... 8,009,356.05 1.00 60,712.23 104.03
Chubb Corporation Stock Fund................................ 10,889,363.69 11.81 168,891.47 580.83
Fixed Income Fund........................................... 158,575,674.52 1.00 2,859,649.97 56.79
Balanced Fund............................................... 1,037,005.10 22.94 1,198,251.47 14.53
Growth Equity Fund.......................................... 985,951.66 52.28 2,348,727.40 16.47
International Equity Fund................................... 849,389.65 18.28 961,789.80 12.34
Emerging Markets Equity Fund................................ 816,548.43 9.07 1,046,141.02 13.04
Long-Term Bond Fund......................................... 882,999.81 12.12 506,739.95 12.60
Value Equity Fund........................................... 580,141.47 70.20 1,539,665.82 15.98
OTC Growth Fund............................................. 83,005.09 39.66 -- --
</TABLE>
10
<PAGE> 11
CAPITAL ACCUMULATION PLAN OF
THE CHUBB CORPORATION, CHUBB & SON INC.
AND PARTICIPATING AFFILIATES
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1998 AND 1997
6. FUND BALANCES DUE PARTICIPANTS
Amounts allocated to accounts of Participants who have withdrawn from
participation in the Plan at December 31, 1998 were $2,309 compared with $19,682
in 1997.
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.
7. 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
mid 1999. The Plan Sponsors do not expect this project to have a significant
effect on plan operations.
11
<PAGE> 12
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, 1998
<TABLE>
<CAPTION>
# OF UNITS CONTRACT OR
SECURITY DESCRIPTION OR SHARES COST FAIR VALUE
-------------------- ---------- ---- -----------
<S> <C> <C> <C>
Fixed Income Securities
Chase Manhattan Bank............................. 1 $ 4,004,472 $ 4,004,472
Contract #401077, due on 7/15/2002, at 5.92%
Combined Insurance............................... 1 4,166,896 4,166,896
Contract #CG1093, due on 6/30/2001, at 6.05%
CNA Insurance Company............................ 15,159,783 15,159,783
Contract #GP13027006, due on 12/31/99, at
7.83%
CNA Insurance Company............................ 1 6,938,350 6,938,350
Contract #GP13027-016, due on 3/31/99, at
6.69%
GE Life of Virginia.............................. 1 4,168,809 4,168,809
Contract #GS3131, due 12/31/2001, at 6.12%
Hartford Life Insurance Company.................. 1 2,679,607 2,679,607
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 16,304,356 16,304,356
Contract #7836, due in equal maturities on
3/31/2000 and 9/30/2000, at 7.33%
John Hancock Life Insurance Company.............. 1 6,963,182 6,963,182
Contract #8642, due on 3/31/2001, at 6.86%
Monumental Life Ins. Co. ........................ 1 5,118,521 5,118,521
Contract #BDA00404TR, due 5/8/2002, at 5.16%
Monumental Life Ins. Co. ........................ 1 5,011,095 5,011,095
Contract #BDA00404TR-3, due 10/15/2004, at
5.3%
Monumental Life Ins. Co. ........................ 1 3,561,571 3,561,571
Contract #BDA00602FR, due 6/30/2000, at 6.45%
Monumental Life Ins. Co. ........................ 1 15,196,224 15,196,224
Contract #BDA00666FR, due 12/31/99, at 7.89%
Monumental Life Ins. Co. ........................ 1 7,323,251 7,323,251
Contract #BDA00667FR, due 6/30/2000, at 6.33%
Pacific Mutual Life Insurance Company............ 1 8,188,226 8,188,226
Contract #G-25863-03, due 6/30/99, at 7.34%
Principal Mutual Life Insurance Company.......... 1 16,315,770 16,315,770
Contract #3-15670, due on 9/30/2000, at 7.35%
Principal Mutual Life Insurance Company.......... 1 7,340,942 7,340,942
Contract #3-16924, due on 12/31/2000, at 6.41%
Rabobank Nederland............................... 1 5,053,502 5,053,502
Contract #CHB109801, due 2/18/2003, at 5.43%
State Street Bank................................ 1 4,023,956 4,023,956
Contract #98105, due 4/25/2003, at 5.90%
State Street Bank................................ 1 4,083,148 4,083,148
Contract #98249, due 4/15/2003, at 5.40%
UBS AG........................................... 1 3,032,277 3,032,277
Contract #2460, due 6/16/2003, at 5.91%
</TABLE>
12
<PAGE> 13
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, 1998
<TABLE>
<CAPTION>
# OF UNITS CONTRACT OR
SECURITY DESCRIPTION OR SHARES COST FAIR VALUE
-------------------- ---------- ---- -----------
<S> <C> <C> <C>
Short Term Interest Fund......................... 21,367,188 21,367,188
------------ ------------
Subtotal................................. $166,001,126 $166,001,126
------------ ------------
The Chubb Corporation Common Stock............... 10,801,295 $ 55,571,106 $107,580,899
------------ ------------
Mutual Funds
Colonial Tr VII Newport Tiger Fund Class Z....... 829,208 $ 8,515,119 $ 6,418,072
Spartan U.S. Equity Index Fund................... 3,012,353 101,348,739 132,423,032
Columbia Balanced Fund........................... 1,221,612 25,733,211 28,304,740
Fidelity Contrafund Fund......................... 1,097,970 46,380,538 62,353,720
Fidelity Diversified International Fund.......... 912,062 15,649,845 16,161,744
MAS Funds Fixed Income Portfolio................. 1,287,937 15,253,568 15,081,742
Strong Schafer Value Fund........................ 526,803 28,792,835 31,234,168
OTC Growth Fund.................................. 159,811 6,005,764 6,972,564
------------ ------------
Subtotal................................. $247,679,619 $298,949,782
------------ ------------
Money Market Funds
Fidelity Retirement Government Money Market
Portfolio..................................... 9,526,540 $ 9,526,540 $ 9,526,540
Participant Loans (Maturities January 1999 to
December 2008, Rates 7% to 11%).................. $ 19,441,401 $ 19,441,401
------------ ------------
TOTAL............................... $498,219,792 $601,499,748
============ ============
</TABLE>
13
<PAGE> 14
EIN: 13-2595722
PLAN 002
CAPITAL ACCUMULATION PLAN OF
THE CHUBB CORPORATION, CHUBB & SON INC.
AND PARTICIPATING AFFILIATES
27D -- SCHEDULE OF REPORTABLE TRANSACTIONS
DECEMBER 31, 1998
<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:
Chubb Corporation Stock
Fund........................ 504 $ 43,912,970 $ 51,749,127 $ 33,947,619 $17,801,508
Growth Equity Fund............ 502 $ 19,955,659 $ 13,460,321 $ 11,456,784 $ 2,003,535
International Equity Fund..... 495 $ 20,211,226 $ 18,476,120 $ 18,307,443 $ 168,676
S&P 500 Fund.................. 504 $ 30,258,837 $ 26,969,095 $ 24,202,043 $ 2,767,052
</TABLE>
There were no category (i) or (ii) or (iv) reportable transactions during 1998.
14
<PAGE> 15
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, 1998 and 1997, and the
related Statement of Changes in Net Assets Available for Plan Benefits for the
year ended December 31, 1998. 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, 1998 and 1997 and the Changes in its
Net Assets Available for Plan Benefits for the year ended December 31, 1998, 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, 1998, 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 25, 1999
------------------------
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 25, 1999 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, 1998.
ERNST & YOUNG LLP
New York, New York
June 25, 1999
15
<PAGE> 16
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 25, 1999
16
