11-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK REPURCHASE SAVINGS AND SIMILAR PLANS
PURSUANT TO SECTION
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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þ |
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ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
for the fiscal year ended December 31, 2008
OR
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o |
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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
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
Capital Accumulation Plan of The Chubb Corporation
Financial Statements and Supplemental Schedule
Year Ended December 31, 2008
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1 |
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Financial Statements |
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3 |
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4 |
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5 |
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18 |
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19 |
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20 |
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Exhibit 23.1 Consent of Independent Registered Public Accounting Firm Ernst & Young LLP |
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Exhibit 23.2 Consent of Independent Registered Public Accounting Firm Mitchell & Titus LLP |
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EX-23.1 |
EX-23.2 |
Report of the Independent Registered Public Accounting Firm
The Employee Benefits Committee
Capital Accumulation Plan of The Chubb Corporation
We have audited the accompanying statement of net assets available for benefits of the Capital
Accumulation Plan of The Chubb Corporation (formerly known as the Capital Accumulation Plan of The
Chubb Corporation, Chubb & Son Inc. and Participating Affiliates) as of December 31, 2008 and the
related statement of changes in net assets available for benefits for the year then ended. These
financial statements are the responsibility of the Plans management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. We
were not engaged to perform an audit of the Plans internal control over financial reporting. Our
audit included consideration of internal control over financial reporting as a basis for designing
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Plans internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statement referred to above present fairly, in all material respects,
the net assets available for benefits of the Plan at December 31, 2008 and the changes in its net
assets available for benefits for the year then ended, in conformity with US generally accepted
accounting principles.
Our audit was performed for the purpose of forming an opinion on the financial statements taken as
a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31,
2008 is presented for purposes of additional analysis and is not a required part of the financial
statements but is supplementary information required by the Department of Labors Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974.
This supplemental schedule is the responsibility of the Plans management. The supplemental
schedule has been subjected to the auditing procedures applied in our audit of the financial
statements and, in our opinion, is fairly stated in all material respects in relation to the
financial statements taken as a whole.
/s/ Ernst & Young LLP
New York,
New York
June 12, 2009
1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Employee Benefits Committee
Capital Accumulation Plan of The Chubb Corporation,
We have audited the accompanying statements of net assets available for benefits of the Capital
Accumulation Plan of The Chubb Corporation, (the Plan), (formerly known as the
Capital Accumulation Plan of The Chubb Corporation, Chubb &
Son, Inc. and Participating Affiliates), as of
December 31, 2007. These financial statements are the responsibility of the Plans
administrators. Our responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. We
were not engaged to perform an audit of the Plans internal control over financial reporting. Our
audit included consideration of internal control over financial reporting as a basis for designing
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Plans internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and 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 benefits of the Plan at December 31, 2007 in conformity
with accounting principles generally accepted in the United States of America.
/s/ Mitchell & Titus LLP
New York, New York
June 23, 2008
2
Capital Accumulation Plan of The Chubb Corporation
Statements of Net Assets Available for Benefits
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December 31 |
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2008 |
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2007 |
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Assets |
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Investments, at fair value: |
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Stable value funds |
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$ |
290,364,740 |
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$ |
268,344,529 |
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The Chubb Corporation common stock |
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357,185,334 |
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411,822,801 |
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Mutual funds |
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576,920,174 |
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976,155,118 |
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Money market funds |
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97,200,775 |
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56,935,130 |
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Participant loans |
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21,256,240 |
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22,188,945 |
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1,342,927,263 |
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1,735,446,523 |
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Receivables: |
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Employer contributions |
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26,470,447 |
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25,176,040 |
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Accrued interest and dividends |
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2,391,570 |
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4,327,268 |
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Due from broker |
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1,218,301 |
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2,190,678 |
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30,080,318 |
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31,693,986 |
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Net assets available for benefits reflecting all
assets at fair value |
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1,373,007,581 |
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1,767,140,509 |
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Adjustments from fair value to contract value
for fully benefit responsive guaranteed
investment contracts |
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4,305,132 |
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(952,872 |
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Total assets |
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1,377,312,713 |
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1,766,187,637 |
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Liabilities |
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Accrued investment fees |
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28,600 |
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25,785 |
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Net assets available for benefits |
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$ |
1,377,284,113 |
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$ |
1,766,161,852 |
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The accompanying notes are an integral part of these financial statements.
3
Capital Accumulation Plan of The Chubb Corporation
Statement of Changes in Net Assets Available for Benefits
Year Ended December 31, 2008
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Additions |
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Additions to net assets attributable to: |
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Investment income (loss): |
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Realized loss on sale of mutual funds |
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$ |
(126,905,133 |
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Unrealized loss on mutual funds |
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(177,360,575 |
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Realized loss on sale of The Chubb Corporation common stock |
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(83,623,014 |
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Unrealized loss on The Chubb Corporation common stock |
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(12,524,074 |
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Interest and dividends |
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43,674,393 |
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Interest on participant loans |
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1,561,448 |
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Other income |
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23,449 |
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Total investment income (loss) |
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(355,153,506 |
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Contributions: |
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Participant: |
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Pre-tax |
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56,558,718 |
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After-tax |
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2,353,938 |
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Employer |
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21,727,890 |
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Rollovers |
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2,777,969 |
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Total contributions |
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83,418,515 |
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Total additions |
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(271,734,991 |
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Deductions |
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Deductions from net assets attributable to: |
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Benefit payments |
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116,931,727 |
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Defaulted participant loans, net |
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20,892 |
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Administrative expenses |
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190,698 |
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Total deductions |
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117,143,317 |
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Net decrease |
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(388,878,308 |
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Transfers from other plans |
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569 |
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Net assets available for benefits
Beginning of year |
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1,766,161,852 |
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End of year |
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$ |
1,377,284,113 |
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The accompanying notes are an integral part of these financial statements.
4
Capital Accumulation Plan of The Chubb Corporation
Notes to Financial Statements
Year Ended December 31, 2008
1. Plan Description
The following is a brief description of the Capital Accumulation Plan of The Chubb Corporation (the
Plan) formerly known as the Capital Accumulation Plan of The Chubb Corporation, Chubb & Son Inc.
and Participating Affiliates. Participants should refer to the plan document, which is maintained
by the Employee Benefits Committee (the Plan Administrator), for a more complete description of
the Plans provisions.
Effective January 1, 1976, The Chubb Corporation (the Company or Employer) adopted the Capital
Accumulation Plan of The Chubb Corporation, Chubb & Son Inc. and Participant Affiliates for the
benefit of its eligible employees and its participating affiliates. The Plan name has been changed
as the result of an amendment on January 1, 2008 to The Capital Accumulation Plan of The Chubb
Corporation. The Plan is a defined contribution plan and is subject to the provisions of the
Employee Retirement Income Security Act (ERISA).
Eligibility
An employee becomes eligible to participate in the Plan on the first day of the month following
completion of one full calendar month of service. Employees become eligible for employer matching
contributions after either completion of one year of service and attainment of age 21 or the
completion of two years of service if under age 21.
Contributions
Participants may elect to contribute pre-tax and after tax contributions, up to the maximum amount
permitted by the Internal Revenue Code, but not greater than 50% of their compensation, as defined
by the Plan. Effective July 1, 2008, the Company amended the Plan for automatic enrollment for
eligible employees with initial pre-tax contributions of 4% by the employee with an increase of 1%
annually thereafter. Participants may also make rollover contributions from other qualified plans.
The Employer matches participant contributions 100% limited to 4% of their annual compensation.
Participants age 50 and older who contribute at least 4% of pre-tax pay qualify to make unmatched
additional catch-up contributions each pay period according to the schedules and maximum amounts
permitted by the Internal Revenue Code for each year.
5
1. Plan Description (continued)
Vesting
Participants are immediately and fully vested in their contributions plus actual earnings thereon.
Vesting in the Companys matching contributions plus actual earnings thereon is based on years of
service, as follows:
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Years of service |
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Vesting % |
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2 |
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20 |
% |
3 |
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40 |
% |
4 |
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60 |
% |
5 |
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80 |
% |
6 |
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100 |
% |
Forfeitures
Forfeitures, plus earnings thereon, can be used by the Company to reduce future employer
contributions and to pay administrative expenses. Participants that resume employment prior to
incurring five consecutive one year breaks in service are entitled to have previously forfeited
amounts restored to their account. If forfeitures for any Plan year are not sufficient to restore
forfeited amounts the Company is required to contribute the remaining balance. Forfeitures from
employees for the year ended December 31, 2008 were $870,682, with an available amount of
approximately $823,000 available to reduce future employer contributions.
Participant Accounts
Contributions are invested by Fidelity Management Trust Company (the Trustee) according to the
investment options elected by the participants and are held by the Trustee in a single trust. For
participants automatically enrolled, the investment option selected is the Dodge & Cox Balanced
mutual fund.
6
1. Plan Description (continued)
Loans
Participants may borrow a minimum of $1,000 up to the maximum equal to the lesser of $50,000, 50%
of their vested account balance, or 50% of the Participants annual rate of compensation, as
defined, at the time the loan is requested. Their vested account balance and annual rate of
compensation also serves as collateral for the loan. Participants can have up to two loans
outstanding at any time as long as it does not exceed the maximum limits. The principal portion of
the loan is repayable by check or through payroll deductions and bears interest at prime rate. As
of December 31, 2008 the interest rates on outstanding loans range from 4% to 10%.
Loans that are in default are accounted for as a reduction of net assets available for benefits in
the year the default occurs. As of December 31, 2008, the balance of defaulted loans approximated
$158,000.
Payment of Benefits
Upon attaining the normal retirement age (65), a participant is entitled to his or her vested
benefits in the form of lump sum payments, annuity or installment payments, as described by the
plan document. In addition, participants may withdraw funds from the Plan upon termination of
employment or, in certain other cases and subject to the approval of the Employee Benefits
Committee, participants may request a withdrawal of a portion of their balances in the case of
financial hardship. 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 elected by the participant prior
to death, or (c) installment payments as elected by the participants beneficiary.
Upon request, any lump sum distribution to a participant or his or her beneficiary from the Chubb
Stock Fund or the ESOP (Employee Stock Ownership Plan) Fund may be made in common stock of The
Chubb Corporation in lieu of cash payments.
7
1. Plan Description (continued)
Administration Expenses
Unless paid by the Plan Sponsor, the Trustee pays the expenses of the Plan using plan assets. For
2008 and 2007, the following expenses have been paid by the Plan: (a) taxes on the assets in the
trust fund or related income, (b) brokerage costs, (c) other expenses in connection with the
purchase and sale of assets by the manager of funds, (d) fees paid for asset management and (e)
certain overhead expenses directly attributable to the administration of the Plan. Qualified
Domestic Relations Order (QDRO) fees are paid for by the individual participant, as these fees are
not paid by the Plan sponsor or the Trustee.
Reclassifications
Certain amounts in the 2007 statement of net assets available for benefits have been reclassified
to conform with the current years presentation.
2. Summary of Significant Accounting Policies
Basis of Presentation
The accounting and financial reporting policies of the Plan are in conformity with accounting
principles generally accepted in the United States of America.
Fair Value Measurement
In September 2006, the Financial Accounting Standards Board (FASB) issued Statement No. 157, Fair
Value Measurements (FAS 157), which establishes a framework for measuring fair value under U.S.
generally accepted accounting principles and expands disclosure about fair value measurements. FAS
157 is effective for financial statements issued for fiscal years beginning after November 15,
2007. The Plan adopted FAS 157 during 2008. The adoption of FAS 157 did not have an impact on the
Plans net assets available for benefits or changes in net assets available for benefits. The
Plans assets and liabilities are valued at fair value as of December 31, 2008 and 2007 (see Note
4) with the exception of fully benefit responsive guaranteed contracts which are carried at
contract value.
8
2. Summary of Significant Accounting Policies (continued)
The Stable Value Portfolio (Fully Benefit-Responsive Investment Contracts)
As described in Financial Accounting Standards Board Staff Position (FSP) AAG INV-1 and SOP 94-4-1,
Reporting of Fully Benefit Responsive Investment Contracts Held by Certain Investment Companies
Subject to the AICPA Investment Company Guide and Defined-Contribution Health and Welfare and
Pension Plans (the FSP), investment contracts held by a defined contribution plan are required to
be reported at fair value. However, contract value is the relevant measurement attribute for that
portion of the net assets available for benefits of a defined contribution plan attributable to
fully benefit-responsive investment contracts because contract value is the amount participants
would receive if they were to initiate permitted transactions under the terms of the plan. The Plan
invests in a stable value fund that is fully benefit responsive. As required by the FSP, the
statements of net assets available for benefits presents the fair value of the investment contracts
as well as the adjustment of the fully benefit responsive investment contracts from fair value to
contract value. The statements of net assets available for benefits are prepared on a contract
value basis.
Fidelity Management Trust Co. acts as the manager of the Stable Value Portfolio (SVP).
It is the policy of the manager of the SVP to use its best efforts to maintain a stable net asset
value of $1.00 per unit although there is no guarantee that the manager will be able to maintain
this value.
The SVP is invested in short to intermediate term fixed income securities and cash equivalents
represented by shares in a money market fund. In addition, the SVP includes wrapper contracts
issued by third parties and may include derivative instruments such as futures contracts and swap
agreements.
9
2. Summary of Significant Accounting Policies (continued)
A wrap contract is an agreement by another party, such as a bank or insurance company, to make
payments to a portfolio in certain circumstances. Wrap contracts are designed to allow a stable
value portfolio to maintain a stable net asset value of $1.00 per unit and to protect the portfolio
in extreme circumstances. In a typical wrap contract, the wrap issuer agrees to pay a portfolio the
difference between the contract value and the market value of the underlying assets once the market
value has been totally exhausted. This could happen if a portfolio experiences significant
redemptions (redemption of most of a portfolios units) during a time when the market value of a
portfolios underlying assets is below contract value, and market value is ultimately reduced to
zero. If that occurs, the wrap issuer agrees to pay the portfolio an amount sufficient to cover
unitholder redemptions and certain other payments (such as portfolio expenses), provided all the
terms of the wrap contract have been met. Purchasing wrap contracts is similar to buying insurance,
in that a portfolio pays a relatively small amount to protect against a relatively unlikely event
(the redemption of most of the shares of a portfolio). Fees the SVP pays for wrap contracts are
offset against interest income.
A wrap issuer may terminate a wrap contract at any time. However, in the event that the market
value of the SVPs covered assets is below its contract value at the time of such termination, the
manager of the SVP may elect to keep the wrap contract in place until such time as the market value
of the SVPs covered assets is equal to its contract value, normally over the duration of the SVPs
covered assets measured at notification date.
The manager expects that a substantial percentage of the SVPs assets to be underlying the wrap
contracts, although this may change over time. Assets not underlying the wrap contracts will
generally be invested in money market instruments and cash equivalents to provide necessary
liquidity for participant withdrawals and exchanges.
To reduce exposure of the SVP to wrap credit risk, wrap contracts are diversified across multiple
wrap counterparties, each agreeing to wrap a pro-rata percentage of the covered underlying assets.
The SVPs ability to receive amounts due pursuant to these contracts is dependent upon the
counterparties ability to meet their financial obligations.
10
2. Summary of Significant Accounting Policies (continued)
The wrap contracts limit the ability of the SVP to transact at contract value upon the occurrence
of certain events. Such events include the following: (i) amendments to the Plan including changes
in the investment options, transfer procedures or withdrawal rights not consented to by the wrap
issuer, (ii) termination of the Plan, (iii) changes to Plans prohibition of direct transfers from
the SVP to a competing investment option, (iv) other Plan Sponsor events (e.g. divestitures or
spin-offs of a subsidiary) which cause a significant withdrawal from the SVP or, (v) the failure of
the trust to qualify for exemption from federal income taxes or any required prohibited transaction
exemption under ERISA. The Plan Administrator does not believe that the occurrence of any such
event, which would limit the Plans ability to transact at contract value with participants, is
probable.
The crediting rate, and hence the SVPs return, may be affected by many factors, including
purchases and redemptions by unitholders. The impact depends on whether the market value of the
underlying assets is higher or lower than the contract value of those assets. If the market value
of the underlying assets is higher than their contract value, the crediting rate will ordinarily be
higher than the yield of the underlying assets. If the market value of underlying assets is lower
than their contract value, the crediting rate will ordinarily be lower than the yield of the
underlying assets.
Investment Income
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.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted
in the United States of America requires management to make estimates and assumptions that affect
the amounts of assets and liabilities and changes therein, and disclosure of contingent assets and
liabilities. Actual results could differ from those estimates.
Payment of Benefits
Benefit payments to participants are recorded when paid.
11
3. Investments
At December 31, 2008 all wrap contracts held are fully benefit responsive. The average yield and
crediting rate are reflected below:
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2008 |
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2007 |
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Average Yield |
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4.55 |
% |
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4.71 |
% |
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Crediting Rate |
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3.76 |
% |
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4.77 |
% |
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The following open-end wrap contracts were held by the SVP at December 31, 2008:
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Underlying |
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Underlying |
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Assets |
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Assets At |
Wrap Contract Provider |
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Rating |
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At Fair Value |
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Contract Value |
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AIG Financial Products Corporation |
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A- |
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$ |
72,591,185 |
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$ |
73,663,832 |
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JPMorgan Chase Bank, NA |
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AA- |
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72,591,185 |
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73,671,073 |
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Monumental Life Insurance Co. |
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AA |
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72,591,185 |
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|
73,663,891 |
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State Street Bank & Trust Co. |
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AA |
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72,591,185 |
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73,671,076 |
|
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Total wrap contracts |
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290,364,740 |
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294,669,872 |
|
12
3. Investments (continued)
The following presents the individual investments that represent 5% or more of the Plans net
assets:
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2008 |
|
2007 |
|
|
|
|
|
|
|
|
|
|
|
|
Stable Value Funds, at fair value |
|
$ |
290,364,740 |
|
|
$ |
268,344,529 |
|
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Mutual Funds, at fair value: |
|
|
|
|
|
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Dodge & Cox balanced |
|
$ |
78,285,462 |
|
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$ |
126,296,704 |
|
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Spartan US Equity Ind Advan |
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$ |
83,043,060 |
|
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$ |
143,837,456 |
|
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|
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Fidelity Contrafund |
|
$ |
114,747,412 |
|
|
$ |
190,519,469 |
|
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|
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Fidelity Diversified International |
|
$ |
|
|
|
$ |
131,801,416 |
|
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|
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|
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Common Stock, at fair value: |
|
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|
|
|
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The Chubb Corporation |
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$ |
357,185,334 |
|
|
$ |
411,822,801 |
|
|
|
|
4. Fair Value Measurements
FASB Statement No. 157, Fair Value Measurements, (FAS 157) establishes a framework for measuring
fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation
techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted
quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the
lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value
hierarchy under FAS 157 are described as follows:
|
|
|
Level 1 Inputs to the valuation methodology are unadjusted quoted prices for
identical assets or liabilities in active markets that the plan has the ability to access. |
13
4. Fair Value Measurements (continued)
|
|
|
Level 2 Inputs to the valuation methodology include: (a) quoted prices for similar
assets or liabilities in active markets; (b) quoted prices for identical or similar assets
or liabilities in inactive markets; (c) inputs other than quoted prices that are
observable for the asset or liability; and (d) inputs that are derived principally from or
corroborated by observable market data by correlation or other means. If the asset or
liability has a specified (contractual) term, the level 2 input must be observable for
substantially the full term of the asset or liability. |
|
|
|
|
Level 3 Inputs to the valuation methodology are unobservable and significant to the
fair value measurement. |
The asset or liabilitys fair value measurement level within the fair value hierarchy is based on
the lowest level of any input that is significant to the fair value measurement. Valuation
techniques used need to maximize the use of observable inputs and minimize the use of unobservable
inputs.
Following is a description of the valuation methodologies used for assets measured at fair value.
There have been no changes in the methodologies used at December 31, 2008 and 2007:
|
|
|
Stable value funds: Valued at the market values of the underlying fixed income
securities and terms of the underlying investment contracts as further discussed in Note
1. |
|
|
|
|
The Chubb Corporation common stock: Valued at the closing price reported on the active
market on which the individual securities are traded. |
|
|
|
|
Mutual funds: Valued at the net asset value of shares held by the Plan at year end. |
|
|
|
|
Money market funds: Valued at cost plus accrued interest, which approximates fair
value. |
|
|
|
|
Participant loans: Valued at the outstanding balances which approximates fair value. |
14
4. Fair Value Measurements (continued)
Assets at fair value as of December 31, 2008 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stable value funds |
|
$ |
|
|
|
$ |
290,364,740 |
|
|
$ |
|
|
|
$ |
290,364,740 |
|
The Chubb Corporation
common stock |
|
|
357,185,334 |
|
|
|
|
|
|
|
|
|
|
|
357,185,334 |
|
Mutual funds |
|
|
576,920,174 |
|
|
|
|
|
|
|
|
|
|
|
576,920,174 |
|
Money market funds |
|
|
97,200,775 |
|
|
|
|
|
|
|
|
|
|
|
97,200,775 |
|
Participant loans |
|
|
|
|
|
|
|
|
|
|
21,256,240 |
|
|
|
21,256,240 |
|
|
|
|
Total assets at fair value |
|
$ |
1,031,306,283 |
|
|
$ |
290,364,740 |
|
|
$ |
21,256,240 |
|
|
$ |
1,342,927,263 |
|
|
|
|
5. Related Party Transactions
Certain Plan investments are shares of funds managed by Fidelity Management Trust Company. Fidelity
Management Trust Company (FMTC) is the trustee as defined by the Plan and, therefore, FMTC
qualifies as a party-in-interest. Fees paid to Fidelity Management Trust Company by the Plan for
management services amounted to $190,698 for the year ended December 31, 2008.
15
6. Plan Termination
While the Employer has not expressed any intent to terminate the Plan, the Plan Sponsor reserves
the right to amend, modify or terminate the Plan at any time. In the
event of termination, the value of Participants accounts will be paid in accordance with the provisions of the Plan and the
provisions of ERISA.
7. Income Tax Status
The Plan has received a determination letter from the Internal Revenue Service dated March 27,
2003, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the
Code) and, therefore, the related trust is exempt from taxation. Subsequent to this determination
by the Internal Revenue Service, the Plan was amended and restated. Once qualified, the Plan is
required to operate in conformity with the Code to maintain its qualification. The Plan
Administrator believes the Plan is being operated in compliance with the applicable requirements of
the Code and, therefore, believes that the Plan, as amended and restated, is qualified and the
related trust is tax exempt.
8. Risks and Uncertainties
The Plan invests in various investment securities. Investment securities are exposed to various
risks such as interest rate, market and credit risks. Due to the level of risk associated with
certain investment securities, it is at least reasonably possible that changes in the values of
investment securities will occur in the near term and that such changes could materially affect the
amounts reported in the statements of net assets available for benefits.
The Plans exposure to concentration of credit risk is limited by the diversification of
investments. Additionally, the investments within each fund election are further diversified into
various financial instruments, with the exception of The Chubb Corporation common stock. The Plans
exposure to credit risk on guaranteed investment contracts is limited to the fair value of the
contracts with each counterparty.
16
9. Reconciliation of Financial Statements to Form 5500
The following is a reconciliation between the statement of net assets available for benefits per
the accompanying financial statements and the Form 5500:
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
2008 |
|
2007 |
|
|
|
|
|
|
|
|
|
|
|
|
Net assets available for benefits per Schedule H of
Form 5500 reflecting all assets at fair value |
|
$ |
1,372,978,981 |
|
|
$ |
1,767,114,724 |
|
Adjustment from fair value to contract value for
fully benefit responsive guaranteed investment
contract |
|
|
4,305,132 |
|
|
|
(952,872 |
) |
|
|
|
Net assets available for benefits at contract value
per financial statements |
|
$ |
1,377,284,113 |
|
|
$ |
1,766,161,852 |
|
|
|
|
17
Capital Accumulation Plan of The Chubb Corporation
Schedule of Assets (Held at End of Year)
EIN: 134-2595722 Plan Number: 002
(Line 4i of Schedule H to the 2008 Form 5500)
December 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
(b) |
|
(c) |
|
(d) |
|
|
(e) |
|
|
|
|
|
|
|
** |
|
|
*** |
|
|
|
|
|
Description of Investments, |
|
|
|
|
|
|
|
|
|
|
Including Maturity Date, Rate of |
|
|
|
|
|
|
|
|
Identity of Issue, Borrower, |
|
Interest, Collateral, Par or |
|
|
|
|
|
|
|
|
Lessor or Similar Party |
|
Maturity Date |
|
Cost |
|
|
Current Value |
|
|
|
|
Stable Value Funds: |
|
|
|
|
|
|
|
|
|
|
|
|
JP Morgan Chase |
|
JP Morgan Chase |
|
|
|
|
|
$ |
73,671,073 |
|
|
|
AIG |
|
AIG Financial Products Co. |
|
|
|
|
|
|
73,663,832 |
|
|
|
State Street Bank |
|
State Street Bank & Trust Company Boston |
|
|
|
|
|
|
73,671,076 |
|
|
|
Monumental Life Insurance Company |
|
Monumental Life Insurance Company |
|
|
|
|
|
|
73,663,891 |
|
|
|
Common Stock: |
|
|
|
|
|
|
|
|
|
|
* |
|
The Chubb Corporation |
|
Common Stock |
|
|
|
|
|
|
357,185,334 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mutual Funds: |
|
|
|
|
|
|
|
|
|
|
|
|
Dodge & Cox |
|
Dodge & Cox Balanced Z |
|
|
|
|
|
|
78,285,462 |
|
|
|
T. Rowe Price |
|
T. Rowe Price Mid Cap Growth |
|
|
|
|
|
|
28,613,102 |
|
|
|
MSIF |
|
MSIF CP FX Inc 1 |
|
|
|
|
|
|
42,594,639 |
|
|
|
Vanguard |
|
Vanguard Value Index Inst. |
|
|
|
|
|
|
42,125,843 |
|
|
|
Janus |
|
Janus High Yield Bond |
|
|
|
|
|
|
14,246,586 |
|
|
|
Goldman Sachs |
|
GS Midcap value Ins. |
|
|
|
|
|
|
15,193,136 |
|
|
|
Vanguard |
|
Vanguard Small Growth Index Inst. |
|
|
|
|
|
|
3,701,600 |
|
|
|
Allianz |
|
Allianz Nacm Pacific Rim I |
|
|
|
|
|
|
30,677,630 |
|
* |
|
Fidelity |
|
Fidelity Contrafund |
|
|
|
|
|
|
7 |
|
* |
|
Fidelity |
|
Fidelity Diversified Intl |
|
|
|
|
|
|
6 |
|
* |
|
Fidelity Spartan |
|
Spartan US Equity Ind. Advan. |
|
|
|
|
|
|
83,043,060 |
|
* |
|
Fidelity |
|
Fidelity Contrafund K |
|
|
|
|
|
|
114,747,412 |
|
* |
|
Fidelity |
|
Fidelity Diversified International K |
|
|
|
|
|
|
63,641,150 |
|
* |
|
Fidelity |
|
Fidelity Fund K |
|
|
|
|
|
|
16,193,909 |
|
* |
|
Fidelity |
|
Fidelity OTC K |
|
|
|
|
|
|
23,524,287 |
|
|
|
Royce |
|
Royce Low Price Stock IS |
|
|
|
|
|
|
20,332,345 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money Market Funds: |
|
|
|
|
|
|
|
|
|
|
|
|
Fimm Government Port C1 I |
|
Money Market Fund |
|
|
|
|
|
|
60,637,910 |
|
|
|
Interest Bearing Cash 316175207 |
|
Money Market Fund |
|
|
|
|
|
|
2,675,415 |
|
* |
|
Fidelity Stiff |
|
Money Market Fund |
|
|
|
|
|
|
33,887,450 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Participant loans |
|
Interest rates from 4.00% 10.00% |
|
|
|
|
|
|
21,256,240 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,347,232,395 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) |
|
Party-in-interest to the Plan. |
|
(**) |
|
Cost not disclosed as all investments are participant directed
|
|
(***) |
|
Stable value funds are valued at contract value all other investments are valued at fair value |
18
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Employee Benefits
Committee has duly caused this annual report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
|
|
|
|
|
CAPITAL ACCUMULATION PLAN OF
THE CHUBB CORPORATION
|
|
|
By: |
/s/ WILLIAM B. JOHNSEN
|
|
|
|
William B. Johnsen, Chairperson of the |
|
|
|
Employee Benefits Committee |
|
|
Dated: June 26, 2009
19
EXHIBIT INDEX
Exhibit 23.1 Consent of Independent Registered Public Accounting Firm Ernst & Young LLP
Exhibit 23.2 Consent of Independent registered Public Accounting Firm Mitchell & Titus LLP
20