Shareholders' Equity

12 Months Ended

Dec. 31, 2012

Shareholders' Equity

(17)  Shareholders’ Equity

(a)  The authorized but unissued preferred shares may be issued in one or more series and the shares of each series shall have such rights as fixed by the Board of Directors.

(b)  The activity of Chubb’s common stock was as follows:

	Years Ended December 31
	2012			2011			2010
	(number of shares)
Common stock issued
Balance, beginning and end of year		371,980,460			371,980,460			371,980,460
Treasury stock
Balance, beginning of year		99,519,509			74,707,547			39,972,796
Repurchase of shares		13,094,640			27,582,889			37,667,829
Share activity under stock-based employee compensation plans		(2,396,704	)		(2,770,927	)		(2,933,078	)
Balance, end of year		110,217,445			99,519,509			74,707,547
Common stock outstanding, end of year		261,763,015			272,460,951			297,272,913

(c)  As of December 31, 2012, $329 million remained under the share repurchase authorization that was approved by the Board of Directors on January 26, 2012. On January 31, 2013, the Board of Directors authorized the repurchase of up to $1.3 billion of Chubb’s common stock replacing the January 26, 2012 authorization. This authorization has no expiration date.

(d)  The property and casualty insurance subsidiaries are required to file annual statements with insurance regulatory authorities prepared on an accounting basis prescribed or permitted by such authorities (statutory basis). For such subsidiaries, statutory accounting practices differ in certain respects from GAAP.

A comparison of shareholders’ equity on a GAAP basis and policyholders’ surplus on a statutory basis is as follows:

	December 31
	2012					2011
	GAAP			Statutory		GAAP			Statutory
	(in millions)
P&C Group	$	16,833		$	14,117	$	16,613		$	13,958
Corporate and other		(1,006	)				(1,312	)
	$	15,827				$	15,301

A comparison of GAAP and statutory net income (loss) is as follows:

	Years Ended December 31
	2012					2011					2010
	GAAP			Statutory		GAAP			Statutory		GAAP			Statutory
	(in millions)
P&C Group	$	1,791		$	1,936	$	1,915		$	1,824	$	2,374		$	2,295
Corporate and other		(246	)				(237	)				(200	)
	$	1,545				$	1,678				$	2,174

(e)  As a holding company, Chubb’s ability to continue to pay dividends to shareholders and to satisfy its obligations, including the payment of interest and principal on debt obligations, relies on the availability of liquid assets, which is dependent in large part on the dividend paying ability of its property and casualty insurance subsidiaries. The Corporation’s property and casualty insurance subsidiaries are subject to laws and regulations in the jurisdictions in which they operate that restrict the amount of dividends they may pay without the prior approval of regulatory authorities. The restrictions are generally based on net income and on certain levels of policyholders’ surplus as determined in accordance with statutory accounting practices. Dividends in excess of such thresholds are considered “extraordinary” and require prior regulatory approval. During 2012, these subsidiaries paid dividends of $1.8 billion to Chubb.

The maximum dividend distribution that may be made by the property and casualty insurance subsidiaries to Chubb during 2013 without prior regulatory approval is approximately $1.6 billion.