Shareholders' Equity

12 Months Ended

Dec. 31, 2014

Equity [Abstract]

Shareholders' Equity

(16)  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
	2014			2013			2012
	(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		123,673,969			110,217,445			99,519,509
Repurchase of shares		16,893,455			14,887,701			13,094,640
Share activity under stock-based employee compensation plans		(1,016,353	)		(1,431,177	)		(2,396,704	)
Balance, end of year		139,551,071			123,673,969			110,217,445
Common stock outstanding, end of year		232,429,389			248,306,491			261,763,015

(c)  As of December 31, 2014, $52 million remained under the share repurchase authorization that was approved by the Board of Directors on January 30, 2014. On January 29, 2015, the Board of Directors authorized the repurchase of up to $1.3 billion of Chubb’s common stock. These authorizations have 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 principles 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
	2014					2013
	GAAP			Statutory		GAAP			Statutory
	(in millions)
P&C Group	$	17,786		$	15,127	$	17,398		$	15,024
Corporate and other		(1,490	)				(1,301	)
	$	16,296				$	16,097

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

	Years Ended December 31
	2014					2013					2012
	GAAP			Statutory		GAAP			Statutory		GAAP			Statutory
	(in millions)
P&C Group	$	2,330		$	2,399	$	2,480		$	2,485	$	1,791		$	1,936
Corporate and other		(230	)				(135	)				(246	)
	$	2,100				$	2,345				$	1,545

At December 31, 2014, the aggregate statutory capital and surplus of the property and casualty insurance subsidiaries was $15.1 billion, of which $14.8 billion related to Federal Insurance Company (Federal). Federal is a direct subsidiary of Chubb and is the direct or indirect parent of most of Chubb’s other insurance subsidiaries. A risk-based capital formula is used by U.S. state regulatory authorities to identify insurance companies that may be undercapitalized and that may merit regulatory attention. The risk-based capital requirement level is calculated as two times the authorized control level risk-based capital and is the level at or below which company or state regulatory action would be required. At December 31, 2014, the risk-based capital requirement level for Federal was $5.0 billion.

(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 principles. Dividends in excess of such thresholds are considered “extraordinary” and require prior regulatory approval. During 2014, these subsidiaries paid dividends of $2.0 billion to Chubb.

The maximum dividend distribution that may be made by the property and casualty insurance subsidiaries to Chubb during 2015 without prior regulatory approval is approximately $1.9 billion.