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 WARREN, N.J., Aug. 30 /PRNewswire/ -- The Chubb Corporation announced today that its subsidiary, Pacific Indemnity Company, has entered into an agreement in principle for a class action settlement with Continental Casualty Company (a subsidiary of CNA Financial Corporation), Fibreboard Corporation and attorneys representing claimants against Fibreboard for all future asbestos-related bodily injury claims. This settlement will be subject to court approval. In addition, Pacific Indemnity and Continental Casualty have reached an agreement for the handling of all pending claims for asbestos-related bodily injury.
 Chubb said it will take a charge of $358 million after taxes or $3.95 per share against earnings in the third quarter of 1993. While Chubb anticipates that it will report a net loss for the third quarter, the company expects to report a net profit for the first nine months and for the full year 1993.
 A substantial portion of Pacific Indemnity's obligation under these agreements is covered by existing loss reserves, including specifically identified case reserves and general liability "incurred but not reported"
reserves. However, additional reserves of $675 million are being provided in the third quarter. As a result, Chubb's total reserves for Fibreboard will be $1.25 billion which management believes are sufficient to cover all its liabilities associated with asbestos- related bodily injury claims against Fibreboard.
 In a separate action, Chubb announced its intention to exercise its option to commute an existing medical malpractice reinsurance agreement which is unrelated to Fibreboard and which will result in the recognition of a gain of $125 million before taxes in the third quarter.
 Pursuant to the agreement in principle, a $1.525 billion trust fund will be established to pay future claims, which are generally claims that were not filed in court before Aug. 27, 1993. Pacific Indemnity will contribute approximately 35 percent, or $538 million, to the fund and Continental Casualty will contribute the remaining 65 percent.
 With respect to the agreement between Pacific Indemnity and Continental Casualty for handling pending claims, Pacific Indemnity's obligation is not expected to exceed $635 million.
 The proposed settlement will reaffirm portions of an agreement reached in March 1992 between Pacific Indemnity and Fibreboard. Continental Casualty will cease to challenge that agreement in court. Among other matters, that 1992 agreement eliminates any Pacific Indemnity liability for asbestos-related property damage claims.
 Pacific Indemnity, Continental Casualty and Fibreboard are requesting the California Court of Appeal to delay its decisions regarding issues currently before it involving those parties exclusively, until court approval of the settlement is final. Continental Casualty and Pacific Indemnity have also agreed to dismiss disputes against each other which involve Fibreboard and are in litigation in other courts.
 All of the parties have agreed to use their best efforts to seek court approval of the settlement.
 Chubb believes that a settlement is in the best interests of all the parties because it would resolve costly litigation among the parties; it would remove the uncertainty over the outcome of current litigation; and it would provide a vehicle for the settlement of future claims by parties who have suffered from their unfortunate exposure to asbestos. Although the settlement may be challenged in the courts, Chubb is optimistic that the courts will approve the settlement.
 -0- 8/30/93
 /CONTACT: Gail E. Devlin, 908-580-3245, or Glenn A. Montgomery, 908-580-2365, both of Chubb Corporation/

CO: The Chubb Corporation; Pacific Indemnity Company; Continental
 Casualty Company; Fibreboard Corporation ST: New Jersey IN: INS SU:

SM -- NY021 -- 6936 08/30/93 08:47 EDT
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Publication:PR Newswire
Date:Aug 30, 1993

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