e11vk
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 11-K
PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
þ |
|
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 |
for
the fiscal year ended December 31, 2009
OR
|
|
|
o |
|
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
Warren, New Jersey 07059
Financial Statements and
Supplemental Schedule
Capital Accumulation Plan of The Chubb Corporation
December 31, 2009
With Report of Independent Registered Public
Accounting Firm
Capital Accumulation Plan of The Chubb Corporation
Financial Statements and Supplemental Schedule
Year Ended December 31, 2009
Contents
|
|
|
|
|
|
|
|
1 |
|
|
|
|
|
|
Financial Statements |
|
|
|
|
|
|
|
|
|
|
|
|
3 |
|
|
|
|
|
|
|
|
|
4 |
|
|
|
|
|
|
|
|
|
5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19 |
|
|
|
|
|
|
|
|
|
20 |
|
|
|
|
|
|
|
|
|
21 |
|
|
|
|
|
|
Exhibit 23.1 - Consent of Independent Registered Accounting Firm Ernst & Young LLP |
|
|
22 |
|
EX-23.1 |
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 as of December 31, 2009 and 2008, and the related
statement of changes in net assets available for benefits for the year ended December 31, 2009.
These financial statements are the responsibility of the Plans management. 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 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
audits 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, 2009 and 2008, and the
changes in its net assets available for benefits for the year ended December 31, 2009, in
conformity with US generally accepted accounting principles.
1
Our audits were 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, 2009 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 audits 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 25, 2010
2
Capital Accumulation Plan of The Chubb Corporation
Statements of Net Assets Available for Benefits
|
|
|
|
|
|
|
|
|
|
|
December 31 |
|
|
|
2009 |
|
|
2008 |
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
Investments, at fair value: |
|
|
|
|
|
|
|
|
Stable value funds |
|
$ |
326,490,465 |
|
|
$ |
290,364,740 |
|
The Chubb Corporation common stock |
|
|
340,536,877 |
|
|
|
357,185,334 |
|
Mutual funds |
|
|
790,526,303 |
|
|
|
576,920,174 |
|
Money market funds |
|
|
67,287,694 |
|
|
|
97,200,775 |
|
Participant loans |
|
|
22,643,051 |
|
|
|
21,256,240 |
|
|
|
|
|
|
|
1,547,484,390 |
|
|
|
1,342,927,263 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Receivables: |
|
|
|
|
|
|
|
|
Employer contributions |
|
|
26,612,448 |
|
|
|
26,470,447 |
|
Accrued interest and dividends |
|
|
2,446,921 |
|
|
|
2,391,570 |
|
Due from broker |
|
|
2,747,785 |
|
|
|
1,218,301 |
|
|
|
|
|
|
|
31,807,154 |
|
|
|
30,080,318 |
|
|
|
|
Net assets available for benefits reflecting all
assets at fair value |
|
|
1,579,291,544 |
|
|
|
1,373,007,581 |
|
|
|
|
|
|
|
|
|
|
Adjustments from fair value to contract value
for fully benefit-responsive investment
contracts |
|
|
(3,788,157 |
) |
|
|
4,305,132 |
|
|
|
|
Total assets |
|
|
1,575,503,387 |
|
|
|
1,377,312,713 |
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
Accrued investment fees |
|
|
43,514 |
|
|
|
28,600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets available for benefits |
|
$ |
1,575,459,873 |
|
|
$ |
1,377,284,113 |
|
|
|
|
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, 2009
|
|
|
|
|
Additions |
|
|
|
|
Additions to net assets attributable to: |
|
|
|
|
Investment income (loss): |
|
|
|
|
Realized gain on sale of mutual funds |
|
$ |
3,784,156 |
|
Unrealized gain on mutual funds |
|
|
163,312,212 |
|
Realized loss on sale of The Chubb Corporation common stock |
|
|
(16,257,202 |
) |
Unrealized gain on The Chubb Corporation common stock |
|
|
3,879,732 |
|
Interest and dividends |
|
|
32,717,991 |
|
Interest on participant loans |
|
|
1,318,840 |
|
Other income |
|
|
2,542 |
|
|
|
|
|
Total investment income (loss) |
|
|
188,758,271 |
|
|
|
|
|
|
|
|
|
|
Contributions: |
|
|
|
|
Participant: |
|
|
|
|
Pre-tax |
|
|
55,819,068 |
|
After-tax |
|
|
1,920,287 |
|
Employer |
|
|
26,257,030 |
|
Rollovers |
|
|
1,805,940 |
|
|
|
|
|
Total contributions |
|
|
85,802,325 |
|
|
|
|
|
|
|
|
|
|
Total additions |
|
|
274,560,596 |
|
|
|
|
|
|
|
|
|
|
Deductions |
|
|
|
|
Deductions from net assets attributable to: |
|
|
|
|
Benefit payments |
|
|
76,078,528 |
|
Defaulted participant loans, net |
|
|
85,989 |
|
Administrative expenses |
|
|
220,319 |
|
|
|
|
|
Total deductions |
|
|
76,384,836 |
|
|
|
|
|
|
|
|
|
|
Net increase |
|
|
198,175,760 |
|
|
|
|
|
|
Transfers from other plans |
|
|
|
|
|
|
|
|
|
Net assets available for benefits |
|
|
|
|
Beginning of year |
|
|
1,377,284,113 |
|
|
|
|
|
|
|
|
|
|
End of year |
|
$ |
1,575,459,873 |
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
4
Capital Accumulation Plan of The Chubb Corporation
Notes to Financial Statements
December 31, 2009
1. Plan Description
The following is a brief description of the Capital Accumulation Plan of The Chubb Corporation (the
Plan). 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 Participating 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 to provide automatic enrollment
for eligible employees with initial pre-tax contributions of 4% of their compensation by the
employee with an increase of 1% annually thereafter, to a maximum of 10%. Participants may also
make rollover contributions from other qualified plans. The Employer matches participant
contributions 100% limited to 4% of their annual compensation as defined in the Plan. Participants
age 50 and older who contribute at least 4% of pre-tax pay qualify to make unmatched additional
catch-up contributions according to the schedules and maximum amounts permitted by the Internal
Revenue Code for each year.
5
Capital Accumulation Plan of The Chubb Corporation
Notes to Financial Statements (continued)
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:
|
|
|
|
|
|
|
Vesting % |
Years of service: |
|
|
|
|
2 |
|
|
20 |
% |
3 |
|
|
40 |
% |
4 |
|
|
60 |
% |
5 |
|
|
80 |
% |
6 |
|
|
100 |
% |
Forfeitures
Employees who terminate employment prior to becoming 100% vested may forfeit the nonvested portion
of their account balance, plus actual earnings thereon. 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, 2009 were $1,064,640,
with an available balance of approximately $954,000 available to reduce future employer
contributions or to pay administrative expenses.
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 trust. For
participants automatically enrolled, the investment option selected is the Vanguard Target Date
Retirement mutual fund with a target date closest to the participants 65th birthday.
6
Capital Accumulation Plan of The Chubb Corporation
Notes to Financial Statements (continued)
1. Plan Description (continued)
Loans
Participants may borrow a minimum of $1,000 up to a maximum equal to the lesser of a) $50,000, b)
50% of their vested account balance, or c) 50% of the Participants annualized rate of
compensation, as defined, at the time the loan is requested. Their remaining vested account balance
and annualized rate of compensation serves as collateral for the loan. Participants can have up to
two loans outstanding at any time as long as they, collectively, do not exceed the maximum limits.
The principal portion of the loan is repayable by check or through payroll deductions and bears
interest at the prime rate, plus 1%, as determined on the last day of the month preceding the loan.
Prior to May 20, 2009, the effective rate of interest was the prime rate, rounded up to the nearest
whole percent. As of December 31, 2009 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, 2009, the balance of defaulted loans approximated
$198,000.
Payment of Benefits
Upon attaining the normal retirement age (65) or in certain circumstances, the attainment of age
591/2, a participant is entitled to his or her vested benefits in the form of a lump sum payment, an
annuity or installment payments, as prescribed by the Plan. In addition, participants may withdraw
funds from the Plan upon termination of employment or, subject to the approval of the Plan
Administrator, participants may request a withdrawal of a portion of their balance in the case of
financial hardship, as defined. 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) 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
Capital Accumulation Plan of The Chubb Corporation
Notes to Financial Statements (continued)
1. Plan Description (continued)
Administration Expenses
Unless paid by the Plan Sponsor, the Trustee pays the expenses of the Plan using plan assets. For
2009 and 2008, the following expenses have been paid by the Plan: (a) brokerage costs, (b) other
expenses in connection with the purchase and sale of assets by the manager of funds, (c) fees paid
for asset management and (d) certain overhead expenses directly attributable to the administration
of the Plan. Qualified Domestic Relations Order (QDRO) and loan request fees, if any, are paid for
by the individual participant from the participants account, as these fees are not paid by the
Plan sponsor or the Trustee.
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
The Plans assets and liabilities are valued at fair value as of December 31, 2009 and 2008 (see
Note 4) with the exception of fully benefit-responsive investment contracts which are carried at
contract value.
The Stable Value Portfolio (Fully Benefit-Responsive Investment Contracts)
The Plan invests in a stable value fund that is fully benefit-responsive. 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.
8
Capital Accumulation Plan of The Chubb Corporation
Notes to Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
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.
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.
9
Capital Accumulation Plan of The Chubb Corporation
Notes to Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
To reduce exposure of the SVP to wrap credit risk, wrap contracts are diversified across multiple
wrap counterparties, each agreeing to wrap a certain 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 (see Note 3).
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 revalued 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.
10
Capital Accumulation Plan of The Chubb Corporation
Notes to Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
Payment of Benefits
Benefit payments to participants are recorded when paid.
New Accounting Pronouncements
In April 2009, the Financial Accounting Standards Board (FASB) issued FASB Staff Position 157-4,
Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have
Significantly Decreased and Identifying Transactions That Are Not Orderly (FSP 157-4). FSP 157-4
amended FASB Statement No. 157 (codified as ASC 820) to provide additional guidance on estimating
fair value when the volume and level of activity for an asset or liability have significantly
decreased in relation to its normal market activity. FSP 157-4 also provided additional guidance on
circumstances that may indicate that a transaction is not orderly and on defining major categories
of debt and equity securities to comply with the disclosure requirements of ASC 820. The Plan
adopted the guidance in FSP 157-4 for the reporting period ended December 31, 2009. Adoption of FSP
157-4 did not have a material effect on the Plans net assets available for benefits or its changes
in net assets available for benefits.
In May 2009, the FASB issued FASB Statement No. 165, Subsequent Events, which was codified into ASC
855, Subsequent Events, to provide general standards of accounting for and disclosure of events
that occur after the balance sheet date, but before financial statements are issued or are
available to be issued. ASC 855 was amended in February 2010. The Plan has adopted ASC 855, as
amended.
In September 2009, the FASB issued Accounting Standards Update 2009-12, Investments in Certain
Entities That Calculate Net Asset Value per Share (or Its Equivalent) (ASU 2009-12). ASU 2009-12
amended ASC 820 to allow entities to use net asset value (NAV) per share (or its equivalent), as a
practical expedient, to measure fair value when the investment does not have a readily determinable
fair value and the net asset value is calculated in a manner consistent with investment company
accounting. The Plan adopted the guidance in ASU 2009-12 for the reporting period ended
December 31, 2009 and has utilized the practical expedient to measure the fair value of investments
within the scope of this guidance based on the investments NAV. In addition, as a result of
adopting ASU 2009-12, the Plan has provided additional disclosures regarding the nature and risks
of investments within the scope of this guidance. Adoption of ASU 2009-12 did not have a material
effect on the Plans net assets available for benefits or its changes in net assets available for
benefits.
11
Capital Accumulation Plan of The Chubb Corporation
Notes to Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
In January 2010, the FASB issued Accounting Standards Update 2010-06, Improving Disclosures about
Fair Value Measurements, (ASU 2010-06). ASU 2010-06 amended ASC 820 to clarify certain existing
fair value disclosures and require a number of additional disclosures. The guidance in ASU 2010-06
clarified that disclosures should be presented separately for each class of assets and
liabilities measured at fair value and provided guidance on how to determine the appropriate
classes of assets and liabilities to be presented. ASU 2010-06 also clarified the requirement for
entities to disclose information about both the valuation techniques and inputs used in estimating
Level 2 and Level 3 fair value measurements. In addition, ASU 2010-06 introduced new requirements
to disclose the amounts (on a gross basis) and reasons for any significant transfers between Levels
1, 2 and 3 of the fair value hierarchy and present information regarding the purchases, sales,
issuances and settlements of Level 3 assets and liabilities on a gross basis. With the exception of
the requirement to present changes in Level 3 measurements on a gross basis, which is delayed until
2011, the guidance in ASU 2010-06 becomes effective for reporting periods beginning after
December 15, 2009. Plan management is currently evaluating the effect that the provisions of ASU
2010-06 will have on the Plans financial statements.
3. Investments
At December 31, 2009 all wrap contracts held are fully benefit responsive. The average yield and
crediting rate are reflected below:
|
|
|
|
|
|
|
|
|
|
|
2009 |
|
2008 |
|
|
|
Average Yield |
|
|
2.84 |
% |
|
|
4.55 |
% |
Crediting Rate |
|
|
2.37 |
|
|
|
3.76 |
|
12
Capital Accumulation Plan of The Chubb Corporation
Notes to Financial Statements (continued)
3. Investments (continued)
The following open-end wrap contracts were held by the SVP at December 31, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underlying |
|
Underlying |
|
|
|
|
|
|
Assets At Fair |
|
Assets At |
Wrap Contract Provider |
|
Rating |
|
Value |
|
Contract Value |
|
AIG Financial Products Corporation |
|
|
A- |
|
|
$ |
52,065,935 |
|
|
$ |
51,403,164 |
|
JPMorgan Chase Bank, NA |
|
AA- |
|
|
109,561,284 |
|
|
|
108,413,660 |
|
Monumental Life Insurance Co. |
|
AA- |
|
|
83,905,491 |
|
|
|
82,974,829 |
|
State Street Bank & Trust Co. |
|
AA- |
|
|
80,957,755 |
|
|
|
79,910,655 |
|
|
|
|
|
|
|
|
Total wrap contracts |
|
|
|
|
|
$ |
326,490,465 |
|
|
$ |
322,702,308 |
|
|
|
|
|
|
|
|
The following presents the individual investments that represent 5% or more of the Plans net
assets:
|
|
|
|
|
|
|
|
|
|
|
2009 |
|
2008 |
|
|
|
Stable Value Funds, at fair value |
|
$ |
326,490,465 |
|
|
$ |
290,364,740 |
|
Mutual Funds, at fair value: |
|
|
|
|
|
|
|
|
Dodge & Cox Balanced |
|
|
103,970,933 |
|
|
|
78,285,462 |
|
Spartan US Equity Ind Advan |
|
|
102,849,779 |
|
|
|
83,043,060 |
|
Fidelity Contrafund |
|
|
146,165,324 |
|
|
|
114,747,412 |
|
Fidelity Diversified International |
|
|
84,335,955 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock, at fair value: |
|
|
|
|
|
|
|
|
The Chubb Corporation |
|
|
340,536,877 |
|
|
|
357,185,334 |
|
13
Capital Accumulation Plan of The Chubb Corporation
Notes to Financial Statements (continued)
4. Fair Value Measurements
ASC 820, Fair Value Measurements and Disclosures, (formerly FASB Statement No. 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 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. |
|
|
|
|
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, 2009 and 2008:
|
|
|
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 New
York Stock Exchange (the active market on which the security is traded). |
|
|
|
|
Mutual funds: Valued at the closing price reported on the active market on which the
security trades. |
14
Capital Accumulation Plan of The Chubb Corporation
Notes to Financial Statements (continued)
4. Fair Value Measurements (continued)
|
|
|
Money market funds: Valued at cost plus accrued interest, which approximates fair
value. |
|
|
|
|
Participant loans: Valued at the outstanding balances which approximates fair value. |
Assets at fair value as of December 31, 2009 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
|
|
|
Stable value funds |
|
$ |
|
|
|
$ |
326,490,465 |
|
|
$ |
|
|
|
$ |
326,490,465 |
|
The Chubb Corporation common stock |
|
|
340,536,877 |
|
|
|
|
|
|
|
|
|
|
|
340,536,877 |
|
Mutual funds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Large-cap equity |
|
|
153,214,585 |
|
|
|
|
|
|
|
|
|
|
|
153,214,585 |
|
Mid-cap equity |
|
|
68,557,163 |
|
|
|
|
|
|
|
|
|
|
|
68,557,163 |
|
Small-cap equity |
|
|
42,116,490 |
|
|
|
|
|
|
|
|
|
|
|
42,116,490 |
|
Multi-cap equity |
|
|
211,592,822 |
|
|
|
|
|
|
|
|
|
|
|
211,592,822 |
|
International equity |
|
|
120,296,181 |
|
|
|
|
|
|
|
|
|
|
|
120,296,181 |
|
Balanced funds |
|
|
103,970,933 |
|
|
|
|
|
|
|
|
|
|
|
103,970,933 |
|
Target retirement date funds |
|
|
13,200,813 |
|
|
|
|
|
|
|
|
|
|
|
13,200,813 |
|
Fixed income |
|
|
77,571,316 |
|
|
|
|
|
|
|
|
|
|
|
77,571,316 |
|
Money market funds |
|
|
67,287,694 |
|
|
|
|
|
|
|
|
|
|
|
67,287,694 |
|
Participant loans |
|
|
|
|
|
|
|
|
|
|
22,643,051 |
|
|
|
22,643,051 |
|
|
|
|
Total assets at fair value |
|
$ |
1,198,344,874 |
|
|
$ |
326,490,465 |
|
|
$ |
22,643,051 |
|
|
$ |
1,547,478,390 |
|
|
|
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Large-cap equity |
|
|
125,168,903 |
|
|
|
|
|
|
|
|
|
|
|
125,168,903 |
|
Mid-cap equity |
|
|
43,806,238 |
|
|
|
|
|
|
|
|
|
|
|
43,806,238 |
|
Small-cap equity |
|
|
24,033,945 |
|
|
|
|
|
|
|
|
|
|
|
24,033,945 |
|
Multi-cap equity |
|
|
154,465,615 |
|
|
|
|
|
|
|
|
|
|
|
154,465,615 |
|
International equity |
|
|
94,318,786 |
|
|
|
|
|
|
|
|
|
|
|
94,318,786 |
|
Balanced funds |
|
|
78,285,462 |
|
|
|
|
|
|
|
|
|
|
|
78,285,462 |
|
Target retirement date funds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed income |
|
|
56,841,225 |
|
|
|
|
|
|
|
|
|
|
|
56,841,225 |
|
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,
15
Capital Accumulation Plan of The Chubb Corporation
Notes to Financial Statements (continued)
5. Related Party Transactions (continued)
FMTC qualifies as a party-in-interest. Fees paid to Fidelity Management Trust Company by the Plan
for management and administrative services amounted to $211,220 for the year ended December 31,
2009.
6. Plan Termination
While the Company has not expressed any intent to terminate the Plan, the Company 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 not received a determination letter from the Internal Revenue Service stating that the
Plan is qualified under Section 401(a) of the Internal Revenue Code (the Code). However, the
plan administrator believes that the Plan has been designed to comply with and is operating in
accordance with the applicable requirements of the Code and, therefore, believes the Plan 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 reasonably assured 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.
16
Capital Accumulation Plan of The Chubb Corporation
Notes to Financial Statements (continued)
8. Risks and Uncertainties (continued)
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 fully benefit-responsive investment contracts is limited to the fair
value of the contracts with each counterparty.
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 |
|
|
2009 |
|
2008 |
|
|
|
Net assets available for
benefits per Schedule H of Form
5500 reflecting all assets at fair
value |
|
$ |
1,579,248,030 |
|
|
$ |
1,372,978,981 |
|
Adjustment from fair value to
contract value for fully
benefit-responsive investment
contracts |
|
|
(3,788,157 |
) |
|
|
4,305,132 |
|
|
|
|
Net assets available for benefits
at contract value
per financial statements |
|
$ |
1,575,459,873 |
|
|
$ |
1,377,284,113 |
|
|
|
|
17
Capital Accumulation Plan of The Chubb Corporation
EIN #13-2595722 Plan # 002
Schedule H, Line 4i Schedule of Assets
(Held at End of Year)
Year Ended December 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
(b) |
|
(c) |
|
(d) |
|
|
(e) |
|
|
|
|
|
|
|
** |
|
|
*** |
|
|
|
|
|
Description of Investments, Including |
|
|
|
|
|
|
|
|
Identity of Issue, Borrower, |
|
Maturity Date, Rate of Interest, |
|
|
|
|
|
|
|
|
Lessor or Similar Party |
|
Collateral, Par or Maturity Date |
|
Cost |
|
|
Current Value |
|
|
|
|
Stable Value Funds: |
|
|
|
|
|
|
|
|
|
|
|
|
JP Morgan Chase |
|
JP Morgan Chase |
|
|
|
|
|
$ |
108,413,660 |
|
|
|
AIG |
|
AIG Financial Products Co. |
|
|
|
|
|
|
51,403,164 |
|
|
|
State Street Bank |
|
State Street Bank & Trust Company Boston |
|
|
|
|
|
|
79,910,655 |
|
|
|
Monumental Life Insurance Company |
|
Monumental Life Insurance Company |
|
|
|
|
|
|
82,974,829 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock: |
|
|
|
|
|
|
|
|
|
|
* |
|
The Chubb Corporation |
|
Common Stock |
|
|
|
|
|
|
340,536,877 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mutual Funds: |
|
|
|
|
|
|
|
|
|
|
|
|
Dodge & Cox |
|
Dodge & Cox Balanced |
|
|
|
|
|
|
103,970,933 |
|
|
|
T. Rowe Price |
|
T. Rowe Price Mid Cap Growth |
|
|
|
|
|
|
46,726,031 |
|
|
|
MSIF |
|
MSIF CP FX Inc 1 |
|
|
|
|
|
|
48,811,692 |
|
|
|
Vanguard |
|
Vanguard Value Index Inst. |
|
|
|
|
|
|
50,364,805 |
|
|
|
Janus |
|
Janus High Yield Bond |
|
|
|
|
|
|
28,759,624 |
|
|
|
Goldman Sachs |
|
GS Midcap Value Ins. |
|
|
|
|
|
|
21,831,132 |
|
|
|
Vanguard |
|
Vanguard Small Growth Index Inst. |
|
|
|
|
|
|
7,468,113 |
|
|
|
Allianz |
|
Allianz Nacm Pacific Rim I |
|
|
|
|
|
|
35,960,226 |
|
* |
|
Fidelity |
|
Fidelity Contrafund |
|
|
|
|
|
|
|
|
* |
|
Fidelity |
|
Fidelity Diversified Intl |
|
|
|
|
|
|
|
|
* |
|
Fidelity Spartan |
|
Spartan US Equity Ind. Advan. |
|
|
|
|
|
|
102,849,779 |
|
* |
|
Fidelity |
|
Fidelity Contrafund K |
|
|
|
|
|
|
146,165,324 |
|
* |
|
Fidelity |
|
Fidelity Diversified International K |
|
|
|
|
|
|
84,335,955 |
|
* |
|
Fidelity |
|
Fidelity Fund K |
|
|
|
|
|
|
21,017,982 |
|
* |
|
Fidelity |
|
Fidelity OTC K |
|
|
|
|
|
|
44,415,517 |
|
|
|
Royce |
|
Royce Low Priced Stock IS |
|
|
|
|
|
|
34,648,377 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vanguard |
|
Vanguard Target Retirement Income |
|
|
|
|
|
|
1,092,030 |
|
|
|
Vanguard |
|
Vanguard Target Retirement 2005 |
|
|
|
|
|
|
298,747 |
|
|
|
Vanguard |
|
Vanguard Target Retirement 2010 |
|
|
|
|
|
|
803,368 |
|
|
|
Vanguard |
|
Vanguard Target Retirement 2015 |
|
|
|
|
|
|
1,837,382 |
|
|
|
Vanguard |
|
Vanguard Target Retirement 2020 |
|
|
|
|
|
|
2,557,347 |
|
|
|
Vanguard |
|
Vanguard Target Retirement 2025 |
|
|
|
|
|
|
2,030,241 |
|
|
|
Vanguard |
|
Vanguard Target Retirement 2030 |
|
|
|
|
|
|
1,742,455 |
|
|
|
Vanguard |
|
Vanguard Target Retirement 2035 |
|
|
|
|
|
|
1,676,748 |
|
|
|
Vanguard |
|
Vanguard Target Retirement 2040 |
|
|
|
|
|
|
419,402 |
|
|
|
Vanguard |
|
Vanguard Target Retirement 2045 |
|
|
|
|
|
|
455,469 |
|
|
|
Vanguard |
|
Vanguard Target Retirement 2050 |
|
|
|
|
|
|
287,624 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money Market Funds: |
|
|
|
|
|
|
|
|
|
|
|
|
Fimm Government Port C1 I |
|
Money Market Fund |
|
|
|
|
|
|
57,074,689 |
|
|
|
Interest Bearing Cash 316175207 |
|
Money Market Fund |
|
|
|
|
|
|
1,426,919 |
|
|
|
Fidelity STIF |
|
Money Market Fund |
|
|
|
|
|
|
8,786,086 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Participant loans |
|
Interest rates from 4.00% 10.00% |
|
|
|
|
|
|
22,643,051 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,543,696,233 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) |
|
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 |
19
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/ JOHN W. ROWLAND
|
|
|
|
John W. Rowland, Acting Chairperson of |
|
|
|
the Employee Benefits Committee |
|
Dated: June 25, 2010
EXHIBIT INDEX
Exhibit 23.1 Consent of Independent Registered Public Accounting Firm Ernst & Young LLP