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As filed with the Securities and Exchange Commission on May 16, 2002

                                                    September 1, 2004
Registration No. 333-            ================================================================================

                      
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
                               -----------------
                                   
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
                               -----------------
                                  
ACE LIMITED
            (Exact
(Exact name of registrant as specified in its charter)
                   Cayman Islands              98-0091805
                   (State or other          (I.R.S. Employer
                   jurisdiction of         Identification No.)
                   incorporation)

               ACE Global Headquarters        Ed Ota, Esq.
                17 Woodbourne Avenue      ACE INA Holdings Inc.
               Hamilton, HM 08 Bermuda      Two Liberty Place
                    (441) 295-520         1601 Chestnut Street
               (Address, including zip        Philadelphia,
                 code, and telephone       Pennsylvania 19103
                  number, including          (215) 640-1000
                    area code, of
               Registrant's principal
                 executive offices)
                                        (Name, address, including
                                         zip code, and telephone
                                                 number,
                                         including area code, of
                                           agent for service)

                             

Cayman Islands

98-0091805
(State or other jurisdiction of incorporation)(I.R.S. Employer Identification No.)

ACE Global Headquarters

Ed Ota, Esq.
17 Woodbourne AvenueACE INA Holdings Inc.
Hamilton, HM 08, BermudaTwo Liberty Place
(441) 295-52001601 Chestnut Street
(Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices)Philadelphia, Pennsylvania 19103
(215) 640-1000
(Name, address, including zip code, and telephone number, including area code, of agent for service)
ACE INA HOLDINGS INC.
            (Exact
(Exact name of registrant as specified in its charter)
                      Delaware                 58-2457246
                   (State or other          (I.R.S. Employer
                   jurisdiction of         Identification No.)
                   incorporation)

                  Two Liberty Place           Ed Ota, Esq.
                1601 Chestnut Street      ACE INA Holdings Inc.
                    Philadelphia,           Two Liberty Place
                 Pennsylvania 19103       1601 Chestnut Street
                   (215) 640-1000             Philadelphia,
               (Address, including zip     Pennsylvania 19103
                 code, and telephone         (215) 640-1000
                  number, including
                    area code, of
               Registrant's principal
                 executive offices)
                                        (Name, address, including
                                         zip code, and telephone
                                                 number,
                                         including area code, of
                                           agent for service)

                             
Delaware58-2457246
(State or other jurisdiction of incorporation)(I.R.S. Employer Identification No.)

Two Liberty Place
1601 Chestnut Street
Philadelphia, Pennsylvania 19103
(215) 640-1000
(Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices)

Ed Ota, Esq.
ACE INA Holdings Inc.
Two Liberty Place
1601 Chestnut Street
Philadelphia, Pennsylvania 19103
(215) 640-1000
(Name, address, including zip code, and telephone number, including area code, of agent for service)
ACE CAPITAL TRUST III
ACE CAPITAL TRUST IV
            (Exact
(Exact name of registrant as specified in its charter)
                      Delaware              Each Applied For
                   (State or other          (I.R.S. Employer
                   jurisdiction of         Identification No.)
                   incorporation)

              c/o ACE INA Holdings Inc.       Ed Ota, Esq.
                  Two Liberty Place       ACE INA Holdings Inc.
                1601 Chestnut Street        Two Liberty Place
                    Philadelphia,         1601 Chestnut Street
                 Pennsylvania 19103           Philadelphia,
                   (215) 640-1000          Pennsylvania 19103
               (Address, including zip       (215) 640-1000
                 code, and telephone    (Name, address, including
                  number, including      zip code, and telephone
                    area code, of                number,
               Registrant's principal    including area code, of
                 executive offices)        agent for service)

                               -----------------

                                  
DelawareEach Applied For
(State or other jurisdiction of incorporation)(I.R.S. Employer Identification No.)

c/o ACE INA Holdings Inc.
Two Liberty Place
1601 Chestnut Street
Philadelphia, Pennsylvania 19103
(215) 640-1000
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)

Ed Ota, Esq.
ACE INA Holdings Inc.
Two Liberty Place
1601 Chestnut Street
Philadelphia, Pennsylvania 19103
(215) 640-1000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
       Peter N. Mear            Edward S. Best          L. Markus Wiltshire
    General Counsel and    Mayer, Brown, Rowe & Maw   Sidley, Austin, Brown &
         Secretary         190 South LaSalle Street          Wood LLP
        ACE Limited            Chicago, Illinois         875 Third Avenue
  ACE Global Headquarters         60603-3441         New York, New York 10022
   17 Woodbourne Avenue         (312) 782-0600            (212) 906-2000
 Hamilton, HM 08, Bermuda
      (441) 295-5200
                               -----------------
Peter N. MearEdward S. Best
General Counsel and Secretary
ACE Limited
ACE Global Headquarters
17 Woodbourne Avenue
Hamilton, HM 08, Bermuda
(441) 295-5200		Mayer, Brown, Rowe & Maw LLP
190 South LaSalle Street
Chicago, Illinois 60603-3441
(312) 782-0600
        Approximate date of commencement of proposed sale to the public: From time to time after this Registration Statement becomes effective.
        If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [_]o
        If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X]ý
        If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_]o
        If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_]o
        If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [_]
================================================================================

o
CALCULATION OF REGISTRATION FEE
================================================================================


                                                                            Proposed
                                                                             maximum
                                                        Proposed maximum    aggregate
       Title of Each Class of           Amount to be   aggregate offering   offering        Amount of
   Securities to be Registered (1)    Registered(1)(2) price per unit (2)   price (2)    registration fee
- ---------------------------------------------------------------------------------------------------------

Ordinary Shares of ACE Limited (3)...
Preferred Shares of ACE Limited (4)..
Depositary Shares of ACE Limited (5).
Debt Securities of ACE Limited (6)...
Warrants to Purchase Ordinary or
  Preferred Shares of ACE Limited....
Warrants to Purchase Debt Securities
  of ACE Limited.....................
Stock Purchase Contracts of ACE
  Limited............................
Stock Purchase Units of ACE Limited
  (7)................................
Debt Securities of ACE INA Holdings
  Inc. (6)...........................
Preferred Securities of ACE Capital
  Trust III..........................
Preferred Securities of ACE Capital
  Trust IV...........................
Guarantee of Debt Securities of ACE
  INA Holdings Inc. by ACE Limited
  (8)................................
Guarantee of Preferred Securities of
  ACE Capital Trust III and ACE
  Capital Trust IV by ACE Limited
  and certain backup undertakings (9)
                                      -------------------------------------------------------------------
Total................................  $1,500,000,000         100%        $1,500,000,000     $138,000(10)
- ---------------------------------------------------------------------------------------------------------


- --------------------------------------------------------------------------------

Title of Each Class of Securities to be Registered(1)
 Amount to be Registered(1)(2)
 Proposed maximum aggregate offering price per unit (2)
 Proposed maximum aggregate offering price(2)
 Amount of registration fee
Ordinary Shares of ACE Limited(3)
Preferred Shares of ACE Limited (4)
Depositary Shares of ACE Limited (5)
Debt Securities of ACE Limited (6)
Warrants to Purchase Ordinary or Preferred Shares of ACE Limited
Warrants to Purchase Debt Securities of ACE Limited
Stock Purchase Contracts of ACE Limited
Stock Purchase Units of ACE Limited (7)
Debt Securities of ACE INA Holdings Inc. (6)
Preferred Securities of ACE Capital Trust III
Preferred Securities of ACE Capital Trust IV
Guarantee of Debt Securities of ACE INA Holdings Inc. by ACE Limited (8)
Guarantee of Preferred Securities of ACE Capital
Trust III and ACE Capital Trust IV by ACE
Limited and specified backup undertakings (9)		        
Total $1,075,000,000 100% $1,075,000,000 $136,203
(1)
An indeterminate number or amount of Ordinary Shares, Preferred Shares,
    Depositary Shares, Debt Securities, Warrants, Stock Purchase Contractsordinary shares, preferred shares, depositary shares, debt securities, warrants, stock purchase contracts and Stock Purchase Unitsstock purchase units of ACE Limited, Debt Securitiesdebt securities of ACE INA Holdings Inc. and Preferred Securitiespreferred securities of ACE Capital Trust III and ACE Capital Trust IV as may from time to time be issued at indeterminate prices, with an aggregate initial offering price not to exceed $1,500,000,000$1,075,000 or the equivalent thereof in foreign currencies or currency units, or if any Debt
    Securitiesdebt securities are issued with original issue discount, suchthe greater amount as shall result in an aggregate offering prices of $1,500,000,000.$1,075,000. Certain Debt Securitiesdebt securities of ACE INA Holdings Inc. may be issued and sold to either or both of ACE Capital Trust III or ACE Capital Trust IV in connection with the issuance of Preferred Securitiespreferred securities by either or both of the ACE Trusts, in which even,event, these Debt Securitiesdebt securities may later be distributed to the holders of the applicable Preferred Securitiespreferred securities upon a dissolution of ACE Capital Trust III and/or ACE Capital Trust IV and the distribution of the ACE Trust's assets. Securities registered, referred to as the offered securities, may be sold separately, together or as units with other offered securities.

(2)
Estimated solely for the purpose of calculating the registration fee. Pursuant to Rule 457(o) of the rules and regulations under the Securities Act of 1933, which permits the registration fee to be calculated on the basis of the maximum offering price of all the securities listed, the table does not specify by each class information as to the amount to be registered, proposed maximum offering price per unit or proposed maximum aggregate offering price. Unless otherwise indicated in an amendment to this filing, no separate consideration will be received for ordinary shares, preferred shares or debt securities that are issued by ACE Limited or ACE INA Holdings Inc. upon conversion or exchange of Debt Securities,
    Preferred Sharesdebt securities, preferred shares or Depositary Sharesdepositary shares registered under this Registrationregistration statement.

(3)
Also includes suchthe presently indeterminate number of Ordinary Shares as may
    be issued be ACE Limited (a) upon conversion of or exchange for any Debt
    Securities or Preferred Shares that provide for conversion or exchange into
    Ordinary Shares, (b) upon exercise of Warrants to purchase Ordinary Shares
    or (c) pursuant to Stock Purchase Contracts.
(4) Also includes such presently indeterminate number of Preferred Sharesordinary shares as may be issued by ACE Limited (a) upon conversion of or exchange for any Debt Securitiesdebt securities or preferred shares that provide for conversion or exchange into 

   Preferred Shares,ordinary shares, (b) upon exercise of warrants to purchase Preferred Sharesordinary shares or (c) pursuant to Stock Purchase Contracts.
stock purchase contracts.

(4)
Also includes the presently indeterminate number of preferred shares as may be issued by ACE Limited (a) upon conversion of or exchange for any debt securities that provide for conversion or exchange into preferred shares, (b) upon exercise of warrants to purchase preferred shares or (c) pursuant to stock purchase contracts.

(5)
To be represented by depositary receipts representing an interest in all or a specified portion of an Ordinary Shareordinary share or Preferred Share.
preferred share.

(6)
Subject to Notenote (1), an indeterminate principal amount of Debt Securities,debt securities, which may be senior or subordinated.

(7)
Each Stock Purchasestock purchase unit consists of (a) a Stock Purchase Contractstock purchase contract under which the holder, upon settlement, will purchase an indeterminate number of Ordinary Sharesordinary shares and (b) a beneficial interest in Debt Securities, Preferred
    Securitiesdebt securities, preferred securities or debt obligations of third parties purchased with the proceeds from the sale of the Stock Purchase Units.stock purchase units. Each beneficial interest will be pledged to secure the obligation of the holder to purchase the Ordinary
    Shares.ordinary shares. No separate consideration will be received for the Stock Purchase
    Contractstock purchase contract or the related beneficial interests.

(8)
No separate consideration will be received for the guarantees of the Debt
    Securitiesdebt securities issued by ACE INA Holdings Inc.

(9)
No separate consideration will be received for the guarantees of the Preferred Securitiespreferred securities issued by ACE Capital Trust III or ACE Capital Trust IV. The guarantees include the rights of holders of the preferred securities under the guarantees and certain backup undertakings, comprised of obligations of ACE Limited under the ACE INA subordinated indenture and any supplemental indentures thereto and under the applicable trust agreement to provide certain indemnities in respect of, and be responsible for certain costs, expenses, debts and liabilities of, each of ACE Capital Trust III and ACE Capital Trust IV, each as described in this registration statement. All obligations under the applicable trust agreement, including indemnity obligations, are included in the back-up undertakings.
(10) Pursuant to Rule 457(p) under the Securities Act of 1933, the amount of
     the registration fee payable hereunder has been offset by $30,438.74 of
     filing fees paid in respect of $127,358,750 of unsold securities
     previously registered under the registrant's Registration Statement on
     Form
PURSUANT TO RULE 429, THE PROSPECTUS INCLUDED AS PART OF THIS REGISTRATION STATEMENT ALSO RELATES TO REGISTRATION STATEMENT ON FORM S-3, (No. 333-78841).

                               -----------------

   FILE NO. 333-88482.
The registrant hereby amends this Registration Statementregistration statement on suchthe date or dates as may be necessary to delay its effective date until the Registrantregistrant shall file a further amendment that specifically states that this Registration
Statementregistration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statementregistration statement shall become effective on suchthe date as the Commission,commission, acting pursuant to said Section 8(a), may determine.

================================================================================



The
SUBJECT TO COMPLETION DATED SEPTEMBER 1, 2004
PROSPECTUS
This information in this prospectus supplement and accompanying prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus supplement and accompanying
prospectus areis not an offer to sell these securities and are not soliciting annor does it seek any offer to buy these securities in any statejurisdiction where the offer or sale is not permitted.

                  SUBJECT TO COMPLETION, DATED May 16, 2002.

PROSPECTUS

                                $1,500,000,000

                                  
$1,500,000,000
ACE Limited
Ordinary Shares, Preferred Shares, Depositary Shares, Debt Securities,
Warrants to Purchase Ordinary Shares,
Warrants to Purchase Preferred Shares,
Warrants to Purchase Debt Securities, Stock Purchase Contracts and
Stock Purchase Units

                               -----------------

                             
ACE INA Holdings Inc.
Debt Securities
Fully and Unconditionally Guaranteed by
ACE Limited

                               -----------------

                             
ACE Capital Trust III
ACE Capital Trust IV
Preferred Securities
Fully and Unconditionally 
Guaranteed to the Extent Provided in this Prospectus by
ACE Limited
        ACE, ACE INA or the applicable ACE Trust will provide the specific terms of these securities in supplements to this prospectus. The prospectus supplements may also add, update or change information contained in this prospectus. You should read this prospectus and any supplements carefully before you invest.

                               -----------------
        ACE's ordinary shares are traded on the New York Stock Exchange under the symbol "ACE."

   ACE's principal executive offices are located at: ACE Global Headquarters,
17 Woodbourne Avenue, Hamilton, HM 08, Bermuda, telephone number: (441)
295-5200. The principal executive offices of ACE INA and each of the ACE Trusts
are located at: Two Liberty Place, 1601 Chestnut Street, Philadelphia,
Pennsylvania 19103, telephone number (215) 640-1000.

                               -----------------
        Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
        This prospectus may not be used to consummate sales of offered securities unless accompanied by a prospectus supplement.
The date of this prospectus is          , 2002.

2004.

TABLE OF CONTENTS

About This Prospectus

2

ACE Limited

2

ACE INA

3

The ACE Trusts

3

Use of Proceeds

4

Ratio of Earnings to Fixed Charges and Preferred Share Dividends of ACE

4

General Description of the Offered Securities

5

Description of ACE Capital Stock

6

Description of the Depositary Shares

20

Description of ACE Debt Securities

22

Description of ACE INA Debt Securities and ACE Guarantee

34

Description of the Warrants to Purchase Ordinary Shares or Preferred Shares

51

Description of the Warrants to Purchase Debt Securities

53

Description of Preferred Securities

54

Description of Preferred Securities Guarantees

65

Description of Stock Purchase Contracts and Stock Purchase Units

70

Plan of Distribution

71

Legal Opinions

73

Experts

73

Enforcement of Civil Liabilities Under United States Federal Securities Laws

74

Where You Can Find More Information

75
You should rely only on the information contained or incorporated by reference in this prospectus or any supplement. None of ACE, ACE INA or either ACE Trust has authorized anyone else to provide you with different information. ACE, ACE INA and the ACE Trusts are offering these securities only in states where the offer is permitted. You should not assume that the information in this prospectus or any supplement is accurate as of any date other than the date on the front of those documents. ACE's business, financial condition, results of operations and prospects may have changed since that date.
Except as expressly provided in an underwriting agreement, no offered securities may be offered or sold in the Cayman Islands or Bermuda, (althoughalthough offers may be made to persons in Bermuda from outside Bermuda) and offersBermuda. Offers may only be accepted from persons resident in Bermuda, for Bermuda exchange control purposes, where suchthese offers have been delivered outside of Bermuda. Persons resident in Bermuda, for Bermuda exchange control purposes, may require the prior approval of the Bermuda Monetary Authority in order to acquire any offered securities.
        In this prospectus, references to "dollars" and "$" are to United States currency, and the terms "United States" and "U.S." mean the United States of America, its states, its territories, its possessions and all areas subject to its jurisdiction.

ABOUT THIS PROSPECTUS
        This prospectus is part of a registration statement that ACE, ACE INA and the ACE Trusts filed with the Securities and Exchange Commission utilizing a "shelf" registration process, relating to the ordinary shares, preferred shares, depositary shares, debt securities, debt securities guarantee, warrants, stock purchase contracts, stock purchase units, preferred securities and preferred securities guarantees described in this prospectus. Under this shelf process, any or all of ACE, ACE INA and the ACE Trusts may sell the securities described in this prospectus in one or more offerings up to a totalan aggregate initial offering price by all of ACE, ACE INA and the ACE Trusts of $1,500,000,000. This prospectus provides you with a general description of the securities ACE, ACE INA or an ACE Trust may offer. This prospectus does not contain all of the information set forth in the registration statement as permitted by the rules and regulations of the SEC. For additional information regarding ACE, ACE INA, the ACE Trusts and the offered securities, please refer to the registration statement. Each time ACE, ACE INA or an ACE Trust sells securities, it will provide a prospectus supplement that will contain specific information about the terms of that offering. The prospectus supplement may also add, update or change information contained in this prospectus. You should read both this prospectus and any prospectus supplement together with additional information described under the heading "Where You Can Find More Information."

ACE LIMITED
        ACE Limited is athe Bermuda-based holding company of the ACE Group of Companies, incorporated with limited liability inunder the Cayman Islands which maintainsCompanies Law. ACE opened its business office in Bermuda in 1985 when it was initially incorporated and continues to maintain its business office in Bermuda. Through ourits various operating subsidiaries, we provideACE provides a broad range of insurance and reinsurance products to insureds worldwide through operations in the United States and almost 50 other countries. In addition, we provide funds at Lloyd's of London,
throughAt June 30, 2004, ACE Global Markets, to support underwriting capacity for Lloyd's
syndicates managed by Lloyd's managing agencies which are wholly owned
subsidiaries of ACE. At December 31, 2001, we had total assets of $37.1approximately $53.65 billion and shareholders' equity of $6.1approximately $9.22 billion. We derive ourACE derives its revenue principally from premiums, fees and investment income. We operate
        ACE operates through four business segments: Insurance-- 
        ACE was incorporated in August 1985. ACE's principal executive offices are located at ACE Global Headquarters, 17 Woodbourne Avenue, Hamilton, HM 08, Bermuda, and its telephone number is (441) 295-5200.


ACE INA
        ACE INA is an indirect subsidiary of ACE that was formed in December 1998 to acquire and hold the international and domestic property and casualty businesses ofthat ACE acquired from CIGNA Corporation.Corporation in 1999. ACE INA is a U.S. holding company and has no direct operations. ACE INA's principal asset is the capital stock of its insurance subsidiaries.
        The principal executive offices of ACE INA are located at Two Liberty Place, 1601 Chestnut Street, Philadelphia, Pennsylvania 19103, and its telephone number is (215) 640-1000.


                                      2



THE ACE TRUSTS
        ACE Capital Trust III is a statutory business trust created under Delaware law pursuant to (1) a trust agreement executed by ACE, as original sponsor of the ACE Trust, and the ACE Trusteestrustees for the ACE Capital Trust III and (2) the filing of a certificate of trust with the Delaware Secretary of State on May 19, 1999. On August 5, 1999, ACE assigned its rights and obligations as sponsor of ACE Capital Trust III to ACE INA. ACE Capital Trust IV is a statutory business
trust created under Delaware law pursuant to (1) a trust agreement executed by ACE INA, as sponsor of the ACE Capital Trust IV, and the ACE Trusteestrustees for the ACE Trust and (2) the filing of a certificate of trust with the Delaware Secretary of State on May 14, 2002. Each trust agreement will be amended and restated in its entirety substantially in the form filed as an exhibit to the registration statement of which this prospectus forms a part. Each restated trust agreement will be qualified as an indenture under the Trust Indenture Act of 1939. Each ACE Trust exists for the exclusive purposes of:

  .   
        ACE INA will directly or indirectly own all of the common securities of each ACE Trust. The common securities of an ACE Trust will rank equally, and payments will be made thereonpro rata, with the preferred securities of that ACE Trust, except that,Trust. However, if an event of default under the restated trust agreement resulting from an event of default under the ACE INA subordinated debt securities held by the ACE Trust has occurred and is continuing, the rights of the holder of the common securities to payment in respect of distributions and payments upon liquidation, redemption and otherwise will be subordinated to the rights of the holders of the preferred securities. Unless otherwise disclosed in the applicable prospectus supplement, ACE INA will, directly or indirectly, acquire common securities in an aggregate liquidation amount equal to at least 3% of the total capital of each ACE Trust. Each of the ACE Trusts is a legally separate entity, and the assets of one are not available to satisfy the obligations of any of the others.

   Unlessother.
        The following is true for each ACE Trust unless otherwise disclosed in the related prospectus supplement, supplement:

        The office of the Delaware Trusteetrustee for each ACE Trust in the State of Delaware is located at c/o Bank One Delaware, Inc., Three Christina Centre, 201 North Walnut Street, Wilmington, Delaware 19801. The principal executive offices for each of the ACE Trusts are located at c/o ACE INA Holdings Inc., Two Liberty Place, 1601 Chestnut Street, Philadelphia, Pennsylvania 19103. The telephone number of each of the ACE Trusts is (215) 640-1000.

                                      3



USE OF PROCEEDS
        Unless otherwise disclosed in the applicable prospectus supplement, ACE and ACE INA intend to use the net proceeds from the sale of the offered securities for general corporate purposes, which may include repayment of indebtedness, expansion of our net underwriting capacity and acquisitions. Each ACE Trust will invest all proceeds received from the sale of its preferred securities and common securities in a particular series of subordinated debt securities of ACE INA. ACE INA which will use suchthese funds for general corporate purposes, which may include repayment of indebtedness, expansion of our net underwriting capacity and acquisitions.

RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED SHARE DIVIDENDS OF ACE
        For purposes of computing the following ratios, earnings consist of net income before income tax expense, (excludingexcluding interest costs capitalized)capitalized, plus fixed charges to the extent that suchthese charges are included in the determination of earnings. Fixed charges consist of interest costs, (includingincluding interest costs capitalized)capitalized, plus one-third of minimum rental payments under operating leases, (estimatedwhich are estimated by management to be the interest factor of such rentals).



                                    Three Months                   Three Months
                                       Ended     Fiscal Year Ended    Ended      Year Ended
                                     March 31,     December 31,    December 31, September 30,
                                    ------------ ----------------- ------------ -------------
                                     2002  2001  2001  2000  1999   1998  1997   1998   1997
                                    ----   ----  ----  ----  ----  -----  ----- -----  -----

Ratio of Earnings to Fixed Charges. 5.32   3.82   (1)  3.6x  4.1x  48.4x  72.5x 22.4x  40.7x
Ratio of Earnings to Combined Fixed
  Charges and Preferred Share
  Dividends........................ 4.84   3.55   (1)  3.6x  4.1x  48.4x  72.5x 22.4x  40.7x


- --------
these rentals.
 
 Six Months Ended
June 30,
 Fiscal Year Ended
December 31,
 
 
 2004
 2003
 2002
 2001
 2000
 1999
 
Ratio of Earnings to Fixed Charges 11.8x9.2x(1)(2)3.6x4.1x
Ratio of Earnings to Combined Fixed Charges and Preferred Share Dividends 9.7x7.9x(1)(2)3.4x4.1x
(1)
Earnings for the year ended December 31, 2002 were insufficient to cover fixed charges by $39 million and combined fixed charges and preferred share dividends by $65 million.

(2)
Earnings for the year ended December 31, 2001 were insufficient to cover fixed charges by $17.4$237 million and combined fixed charges and preferred share dividends by $263 million.
        The ACE Trusts had no operations during the periods set forth above.

                                      4




GENERAL DESCRIPTION OF THE OFFERED SECURITIES
        ACE may, from time to time, offer under this prospectus, separately or together:

  .   
        ACE INA may from time to time offer unsecured senior or subordinated debt securities, which will be fully and unconditionally guaranteed by ACE.
        Each of ACE Capital Trust III and ACE Capital Trust IV may offer preferred securities representing undivided beneficial interests in their respective assets, which will be fully and unconditionally guaranteed to the extent described in this prospectus by ACE.
        The aggregate initial offering price of the securities offered securitiesby ACE, ACE INA and the ACE Trusts will not exceed $1,500,000,000.


DESCRIPTION OF ACE CAPITAL STOCK
        The following is a summary of certainthe material provisions of ACE's Memorandummemorandum of Associationassociation and Articlesarticles of Association. Because this summary is not complete,
youassociation. You should refer to ACE's Memorandummemorandum and Articlesarticles for complete information regarding thetheir provisions, copies of the Memorandum and Articles, including the
definitions of some of the terms used below. Copies of the Memorandum and
Articleswhich are incorporated by reference as exhibits to the registration statement of which this prospectus forms a part. Whenever particular sections
or defined terms of the Memorandum and Articles are referred to, such sections
or defined terms are incorporated herein by reference, and the statement in
connection with which such reference is made is qualified in its entirety by
such reference.
        ACE's authorized share capital consists of two classes of shares: (1)

Ordinary Shares

   The
        Our ordinary shares are listed on the New York Stock Exchange under the symbol "ACE." TheOur ordinary shares currently issued and outstanding are fully paid and nonassessable. Thenonassessable, which means that our ordinary shares are paid for in full at the time they are issued, and, once our ordinary shares are paid for in full, there is no further liability for further assessment or taxation. Any of our ordinary shares offered by a prospectus supplement upon issuance against full consideration, will also be fully paid and nonassessable.nonassessable once they are issued to the purchaser in exchange for the full purchase price.
        There are no provisions of Cayman Islands law or the Memorandumour memorandum or the Articlesarticles which impose any limitation on the rights of our shareholders to hold or vote ordinary shares by reason of their not being residents of the Cayman Islands.

                                      5


Dividend Rights
        After all dividends on all classes or series ofour preferred shares have been paid or declared and set apart for payment, holders of our ordinary shares are entitled to receive such dividends as may be declared from time to time by ACE's Boardour board of Directors, referred to as the Board,directors in its discretion, out of funds legally available therefor.

   for the payment of dividends.
Liquidation
        In the event of anyour dissolution, liquidation or winding, up of ACE, whether voluntary or involuntary, after there shall have been paidwe will first pay or set aside for payment to the holders of any outstanding shares ranking senior to theour ordinary shares, as to distribution on liquidation, dissolution or winding up, the full amounts to which they shall be entitled,are entitled. After these payments have been paid or set aside, the holdersholder of theour then outstanding ordinary shares, will be entitled to receive,pro rata, according to the number of ordinary shares registered in thetheir names, any of such shareholders, anyour remaining assets of ACEwhich remain available for distribution to its shareholders; provided,distribution. However, if, at suchthe time any holder of ordinary shares hasour dissolution, liquidation or winding up, you have any outstanding debts, liabilities or engagements to or with ACE (whetherus, whether presently payable or not),not, either alone or jointly with any other person, whether a shareholder or not, (including,including, without limitation, any liability associated with the unpaid purchase price of suchour ordinary shares),shares, the liquidator appointed to oversee theour liquidation of
ACE will deduct the aggregate amount of these debts, liabilities and engagements from the amount payable in respect of suchyour ordinary shares the
aggregate amount of such debts, liabilities and engagements andshares. The liquidator will then apply suchthis amount to any of such holder'syour debts, liabilities or engagements to or with ACE, (whetherwhether presently payable or not).not. The liquidator may distribute to you, in kind, to
the holders of the ordinary shares remaining assets of ACE or may sell, transfer or otherwise dispose of all or any part of suchour remaining assets to any other corporation, trust or entity and receive payment thereforfor our remaining assets in cash, shares or obligations of suchthe other corporation, trust or entity or any combination thereof, andof these. The liquidator may also sell all or part of the consideration so received for the sale of our remaining assets and may distribute thethis consideration received or any balance or proceeds thereofof this consideration to holders of the ordinary shares.

   you.


Voting Rights

   The Articles
        Our articles provide that the quorum required for a general meeting of shareholders is not less than six shareholders present in person or by proxy holding at least 50% of the issued and outstanding shares entitled to vote at such meeting. Athe meeting, and a quorum for considering a "special resolution"special resolution is 66 2/3%2/3% of the issued and outstanding shares entitled to vote at suchthe meeting. Subject to
applicable law and any provision of the Articles requiring a greater majority,
ACEGenerally, we may, from time to time by special resolution resolution:
        Each holder of our ordinary shares is entitled to one vote per share on all matters submitted to a vote of shareholders at any such meeting, subject to the 10% voting limitation described below. All matters, including the election of directors, voted upon at any duly held shareholders' meeting will be carried by a majority of the votes cast at the meeting by shareholders represented in person or by proxy, except (1)proxy. However, the following actions, among others, require the approval of at least 662/3% of the outstanding voting shares, voting together as a single class:
        In addition, at least 66 2/3% of the outstanding voting shares,
voting together as a single class, (2) approval of a special resolution, (3)
amendment of certain provisions of the Articles which require the approval of
at least 66 2/3% of the outstanding voting shares, voting together as a single
class and (4) as otherwise provided in the Articles. A special resolution
requires the approval of at least 66 2/3%2/3% of the votes cast by such shareholders represented in person or by proxy at a duly convened meeting.

   The Articlesmeeting is required to approve a special resolution.
        Our articles provide that, except as otherwise required by law and subject
to the rights of the holders of any class or series of shares issued by ACE
having a preference over the ordinary shares as to dividends or upon
liquidation to elect directors in specified circumstances,generally, extraordinary general meetings of ACE's shareholders may be called only by (1) the directors or (2) at the request in writing of shareholders owning at least 25% of the outstanding shares generally entitled to vote.


                                      6


        Each ordinary share has one vote, except that,vote. However, if and so long as, the "Controlled Shares"controlled shares of any person constitute 10% or more of the issued ordinary shares, the voting rights with respect to thethese controlled shares owned by such
person will be limited, in the aggregate, to a voting power of approximately 10%, pursuant to a formula specified in the Articles. "Controlled Shares"our articles. The term controlled shares generally means
(1) all shares of ACE directly, indirectly, constructively or constructivelybeneficially owned by any person, within the meaning of Section 958 of the U.S. Internal Revenue Code of
1986, as amended, referred to in this prospectus as the Code, and (2) all
shares of ACE directly, indirectly or beneficially owned by such person within
the meaning of Section 13(d) of the Exchange Act (includingincluding any shares owned by a group of persons as so defined and including any shares that would otherwise
be excluded by the provisions of Section 13(d)(6) of the Exchange Act).

   Thepersons.
        Our ordinary shares have noncumulative voting rights, which means that the holders of a majority of theour ordinary shares may elect all of ACE'sour directors, and, in suchthis event, the holders of the remaining shares will not be able to elect any directors. The BoardOur board is presently divided into three classes, two of which have fourfive directors and one of which has five directors.six directors, which we refer to as a classified board. At present, each class is elected for a three-year term, with the result that shareholders will not vote for the election of a majority of directors in any single year. Directors may be removed without cause only by the affirmative vote of the holders of at least 66 2/3%2/3% of the outstanding shares generally entitled to vote, voting together as a single class, cast at a meeting of shareholders. Directors may be removed


with cause by the affirmative vote of the holders of a majority of the votes cast at a meeting of shareholders.

   This
        Our classified board provision could prevent a party who acquires control of a majority of the outstanding voting power from obtaining control of the
Boardour board until the second annual shareholders meeting following the date the acquiror obtains the controlling share interest. The classified board provisionThis could have the effect of discouraging a potential acquiror from making a tender offer or otherwise attempting to obtain control of ACE and could thus increase the likelihood that incumbent directors will retain their positions.
Preemptive Rights
        No holder of ordinary shares, solely by reason of such holding our ordinary shares, has or will have any preemptive right to subscribe to any additional issue of shares of any class or series nor to any security convertible into suchordinary shares.
Other Classes or Series of Shares

   The Articles
        Our articles generally authorize the directors to create and issue one or more other classes or series of shares and to determine the rights and preferences of each suchclass or series. Among other rights, for each class or series, to the extent permitted by the Articles and applicable
law. Among other rights, the directors may determine:

  .   
Preferred Shares

   From
        Our articles provide that the directors may, from time to time, pursuant to the authority granted to the directors by the
Articles to create other classes or series of shares, the Board may create and issue one or moreother classes or series of preferred shares setting forth the rights and preferences of each such class or series in a Certificatecertificate of Designation, Preferences and Rights. Thedesignation, which certificate of designations we would incorporate by reference into this prospectus. Our preferred shares upon issuance
against full consideration, will be fully paid and nonassessable.nonassessable once they are issued in exchange for payment of their full purchase price. The particular rights and preferences of the preferred shares offered by any prospectus supplement and the extent, if any, to which the general provisions described below may apply to the offered preferred shares, will be described in the applicable prospectus supplement. Because the


        The following is a summary of the material terms of our preferred shares is not complete,and you should refer to the Memorandum, the
Articlesour memorandum, articles and the applicable Certificatecertificate of Designation, Preferences and Rightsdesignations for complete information regarding the terms of any class or series of preferred shares described in a prospectus supplement.
        The applicable prospectus supplement will specify the terms of the class or series of preferred shares, described in a prospectus supplement. Whenever particular
sections or defined terms of the Memorandum, the Articles and the applicable
Certificate of Designation, Preferences and Rights are referred to, such
sections or defined terms are incorporated herein by reference, and the
statement in connection with which such reference is made is qualified in its
entirety by such reference.

   A prospectus supplement will specify the terms of a particular class or
series of preferred shares as follows:

  .   including:
Dividends

   The
        You, as a holders of preferred shares, will be entitled to receive dividends at the rate set by the Board,board, payable on specified dates each year for the respective dividend periods ending on suchthose dates, referred to in this prospectus

                                      8



as dividend periods, when and as declared by the Board. Such dividendsboard. Dividends will accrue on each preferred share from the first day of the dividend period in which suchthe share is issued or from suchany other date as the Boardboard may fix for suchthis purpose. All dividends on preferred shares will be cumulative, sowhich means that if ACE doeswe do not pay, or declare and set apart funds for payment of, the dividend, or any part thereof,of the dividend, on the issued and outstanding preferred shares for any dividend period, we must later pay in full, or declare and set apart for payment, the deficiency in the dividend on the preferred shares, must thereafter be fully
paidwithout interest, before we may pay, or declareddeclare and set apart for payment, but without interest, before any dividend may be paid or declared and set apart for payment on the ordinary shares. The holders of preferred sharesYou will not be entitled to participate in any other or additional earnings or profits of ACE, except for such premiums, if any, aswhich may be payable in case of redemption or liquidation, dissolution or winding up of ACE.

   Any dividend paid upon the preferred shares at a
        At any time when any accrued dividends for any prior dividend period are delinquent, we will be expressly declareddeclare any dividend paid upon the preferred shares to be in whole or partial payment of the accrued dividends to the
extent thereof, beginning with the earliest dividend period for which dividends are then wholly or partly delinquent, anddelinquent. This express designation of whole or partial payments will be so designatedcommunicated to each shareholder to whom payment is made.

   No
        We will not pay dividends will be paid upon any shares of any class or series of preferred shares for a current dividend period unless there willwe have been paid, or declared and set apart for payment, all dividends required to be paid to the holders of each other class or series of preferred shares for all past dividend periods of such


the other class or series. If we pay any dividends are paid on any of the preferred shares with respect to any past dividend period at any time when we are paying, or declaring and setting apart for payment, less than the total dividends then accumulated and payable for all past dividend periods on all of the preferred shares then outstanding, are to be paid or
declared and set apart for payment, then we will pay the dividends being paid will be paid on each class or series of preferred shares in the proportions that the dividends then accumulated and payable on each class or series for all past dividend periods bear to the total dividends then accumulated and payable for all past dividend periods on all outstanding preferred shares.
Liquidation, Dissolution or Winding Up

   In case
        If we liquidate, dissolve or wind up our business, whether voluntarily or involuntarily, we will pay you a sum out of voluntary or involuntaryour assets equal to the liquidation dissolution or winding up
of ACE,preference for the holders of each class or series of preferred shares will be
entitled to receive out of the assets of ACE in money or money's worth the
liquidation preference with respect to that class or series of preferred
shares, together withyou own plus all accrued but unpaid dividends thereon (whetheron your preferred shares, whether or not earned or declared),declared. We will make these payments to you before any of suchour assets will be paid or distributed to holders of our ordinary shares. In case of voluntary or involuntary liquidation,
dissolution or winding up of ACE, if theIf our assets are insufficient to pay the full amounts to which you and the holders of all of the classes or series of our preferred shares then outstanding the full amounts to which they may be entitled, the holders of each outstanding
class or series of preferred sharesyou will share ratably in suchour assets in proportion to the amounts which would be payable with respect to sucheach class or series if all amounts payable thereonon each class or series of preferred shares were paid in full. The consolidation or merger of ACE with or into any other corporation, or a sale of all or any part of its assets, will not be deemed a liquidation, dissolution or winding up of ACE within the meaning of this paragraph.
Redemption
        Except as otherwise provided with respect to a particular class or series of
preferred shares,set forth in the applicable prospectus supplement, the following general redemption provisions will apply to each class or series of preferred shares.

   On or prior
        Prior to the date fixed for redemption of a particular class or series
ofredeeming any preferred shares, or any part thereof as specified in the notice of
redemption for such class or series, ACEwe will deposit adequate funds for suchthe redemption in trust for theyour account of holders of such class or series, with a bank or trust company that has an office in the United States, and that has, or is an affiliate of a bank or trust company that has, capital and surplus of at least $50,000,000. IfAfter we deposit these funds in trust, or have stated our intent to deposit these funds in a redemption notice, and you are given the name and address of suchthe bank or trust company, and
the deposit of or intent to deposit the redemption funds in such trust account
have been stated in the redemption notice, then, from and after the mailing of the notice and the making of suchthe deposit, theyour shares of the class or series
called for redemption will no longer be deemed to be outstanding for any purpose whatsoever and allyour rights of the holders of such

                                      9



shares in or with respect to ACE pursuant to these preferred shares will cease and terminate, except only the right
of the holders of the shares (1) for your rights:
        Six years after the redemption date, any moneys we deposit in trust which remain unclaimed and not converted will be paid to ACEus upon itsour request, after which repayment the holders of the
shares called for redemptionyou can no longer look to suchthe bank or trust company for the payment of the redemption price but must look only to ACEus for the payment of any lawful claim for such moneys which holders of such shares may
still have. After suchthese moneys. In addition, after this six-year period, theyour right of any shareholder or other
person to receive suchthis payment may be forfeited in the manner and with the
effectas provided under Cayman Islands law. Any portion of the moneys so
deposited by ACE,we deposit in respect of your preferred shares called for redemption that are converted into ordinary shares will be repaid to ACEus upon itsour request.


        In case of the redemption of only a part of a class or series of preferred shares, ACEwe will designate by lot, in sucha manner as determined by the Board may determine,board, the shares to be redeemed or will effect suchthe redemptionpro rata.

   rata.
Conversion Rights
        Except as otherwise provided with respect to a particular class or series of
preferred shares,in the applicable prospectus supplement, the following general conversion provisions will apply to each class or series of preferred shares that is convertible into ordinary shares.
        All ordinary shares issued upon conversion will be fully paid and nonassessable and will be free of all taxes, liens and charges with respect to thetheir issue, thereof except taxes, if any, payable by reason of issuance of the ordinary shares in a name other than that of the holder of the shares converted and except as otherwise
provided by applicable law or the Articles.your name.
        The number of ordinary shares issuable upon conversion of a particular class or series of preferred shares at any time will be the quotient obtained by dividing the aggregate conversion value of the shares of suchthe class or series surrendered for conversion by the conversion price per share of ordinary shares then in effect for suchthe class or series. ACEWe will not be required, however, upon any such conversion to issue any fractional share of ordinary shares, but instead ACEwe will pay to the holder who would otherwise be entitled
to receive such fractional share, if issued,you a sum in cash equal to the value of suchthe fractional share based on the last reported sale price per ordinary share on the NYSE at the date of determination. Preferred shares will be deemed to have been converted as of the close of business on the date of receipt at the office of the transfer agent of the certificates, duly endorsed, together with written notice by the holder of hisyour election to convert the shares.
        The basic conversion price per ordinary share for a class or series of preferred shares, as fixed by the Board,board, will be subject to adjustment from time to time as follows:

  .   In case ACE (1) paysfollows.
        If we:
then we will retroactively adjust your basic conversion price per ordinary share in effect
      immediately prior to that event will be adjusted retroactively so that the holder of each outstanding share of each class or series ofyour convertible preferred shares which, by its terms, is convertible into ordinary shares will
      thereafter be entitled to receive, upon the conversion, of such share the number of ordinary shares which that holderyou would have owned and been entitled to receive after the happening of any of the events described above had such share of such class or seriesyour shares been converted immediately prior to the happening of that event. An adjustment made pursuant to this
      clause will become effective retroactively immediately after such record
      date in the case of a dividend or distribution and immediately after the
      effective date in the case of a subdivision, split or combination. Such
      adjustments will be made successively whenever any event described in
      this clause occurs.


                                      10



  .   In case ACE issues
        If we issue to all holders of ordinary shares as a class any rights or warrants enabling them to subscribe for or purchase ordinary shares at a price per share less than the current market price per ordinary share at the record date for determination of shareholders entitled to receive suchthese rights or warrants, thethen we will retroactively adjust your basic conversion price per ordinary share in effect immediately prior thereto for each class or
      series of preferred shares which, by its terms, is convertible into
      ordinary shares will be adjusted retroactively by multiplying suchyour basic conversion price by a fraction, thefraction. The fraction's numerator of which will be the sum of
      number of ordinary shares outstanding at such record date and the number
      of ordinary shares which the aggregate exercise price (before deduction
      of underwriting discounts or commissions and other expenses of ACE in
      connection with the issue) of the total number of shares so offered for
      subscription or purchase would purchase at such current market price per
      share and the denominator of which will be the sum of the number of ordinary shares outstanding at suchthe record date plus the number of ordinary shares which the aggregate exercise price, before deduction of underwriting discounts or commissions and our other expenses in connection with the issue, of the total number of shares offered for subscription or purchase would purchase at the current market price per share. The fraction's denominator will be the sum of the number of ordinary shares outstanding at the record date plus the number of additional ordinary shares so offered for subscription or purchase. An
      adjustment made pursuant to this clause will become effective
      retroactively immediately after the record date for determination of
      shareholders entitled to receive such rights or warrants. Such
      adjustments will be made successively whenever any event described in
      this clause occurs.

  .   In case ACE distributes
        If we distribute to all holders of ordinary shares as a class evidences of indebtedness or assets, (otherother than cash dividends), thedividends, then we will retroactively adjust your basic conversion price per ordinary share in effect immediately prior
      thereto for each class or series of preferred shares which, by its terms,
      is convertible into ordinary shares will be adjusted retroactively by multiplying suchyour basic conversion price by a fraction, thefraction. The fraction's numerator of
      which will be the difference between the current market price per ordinary share at the record date for determination of shareholders entitled to


receive suchthe distribution and the fair value, (asas determined by the Board)board, of the portion of the evidences of indebtedness or assets, (otherother than cash dividends)dividends, so distributed applicable to one ordinary share and theshare. The fraction's denominator of which will be the current market price per ordinary share. An adjustment made pursuant to this clause will become
      effective retroactively immediately after such record date. Such
      adjustments will be made successively whenever any event described in
      this clause occurs.

   For the purpose of any computation under the last clause above, the current
market price per ordinary share, on any datewhich will be deemed to be the average of the high and low sales prices of the ordinary shares as reported in the New York Stock Exchange--CompositeExchange—Composite Transactions, (or suchor other principal market quotation as may then be applicable to the ordinary shares)shares, for each of the 30 consecutive trading days commencing 45 trading days before suchthat date.

   No adjustment
        Any adjustments described above will become effective retroactively immediately after the applicable record date, or, in the case of a subdivision, split or combination, immediately after the effective date, and these adjustments will be made insuccessively whenever any event described occurs.
        We will not adjust the basic conversion price for any class or
series of preferred shares in effect immediately prior to such computation if the amount of suchthe adjustment would be less than 50 cents. However, any adjustments, which, by reason of the preceding sentence, arewe do not required to be
mademake, will be carried forward and taken into account in any subsequent adjustment. Notwithstanding anything to the contrary,In addition, we will make any adjustment required for purposes of making the computations described above will be made not later than the earlier of (1) three years after the effective date describeddescribe above for suchthe adjustment or (2)and the date as of which suchthe adjustment would result in an increase or decrease of at least 3% in the aggregate number of ordinary shares issued and outstanding on the first date on which an event occurred which required the making of a computation described above. Allthe computation. We will make all calculations
will be made to the nearest cent or to the nearest 1/100th of a share, as the case may be.
        In the case of any capital reorganization or reclassification of ordinary shares, or if ACE consolidateswe consolidate with or mergesmerge into, or sellssell or disposesdispose of all or substantially all of itsour property and assets to, any other corporation, we will make proper provisions will be made as part of the terms of suchthe capital reorganization, reclassification, consolidation, merger or sale that any shares
of a particular class or series of preferred shares at the time outstanding will thereafter be convertible into the number of shares of stock or other securities or property to which a holder of the number of ordinary shares deliverable upon conversion of suchthe preferred shares would have been entitled upon suchthe capital reorganization, reclassification, consolidation or merger.


                                      11



   No
        We will not make any dividend adjustment with respect to any preferred shares or ordinary shares will be made in connection with any conversion.
        Whenever there is anwe issue of additional ordinary shares requiring a change in the conversion price as provideddescribed above, and whenever there occurs any other event occurs which results in a change in theyour existing conversion rights, of the
holders of shares of a class or series of preferred shares, ACEwe will file with itsour transfer agent or agents a statement signed by theour Chairman, President and Chief Executive Officer, or by any of our Executive Officer of ACE,Officers, specifically describing suchthe issue of additional ordinary shares or suchthe other event, (and,including, in the case of a capital reorganization, reclassification, consolidation or merger, the terms thereof) andof the capital reorganization, reclassification, consolidation or merger. The statement will also contain the actual conversion prices or basis of conversion as changed by suchthe issue or event and the change, if any, in the securities issuable upon conversion. Whenever there are issued by ACEwe issue any rights or warrants to all holders of our ordinary shares as a class any rights or warrants enabling them to subscribe for or purchase ordinary shares, ACEwe will also file in like manner a statement describing the same and the consideration itwe will receive therefrom.
The statement so filedreceive. These statements will be open to inspection by any holder of record of
shares of any class or series of preferred shares.

   ACEyour inspection.
        We will at all times have authorized,authorize, and will at all times reserve and set aside, a sufficient number of duly authorized ordinary shares for the conversion of all shares of all then outstanding classes or series of preferred shares which are then convertible into ordinary shares.
Reissuance of Shares

   Any
        If we retire any preferred shares retired by purchase or redemption, through conversion, or through the operation of any sinking fund or redemption or purchase account, these shares will have the status of


authorized but unissued preferred shares andshares. We may be
reissuedreissue these shares as part of the same class or series or may be reclassifiedreclassify and reissued by the Boardreissue them in the same manner as any other authorized and unissued preferred shares.
Voting Rights
        Except as indicatedset forth below, orgenerally, you, as otherwise required by applicable law, the
holdersa holder of preferred shares, will have no voting rights.
        Whenever dividends payable on any class or series of preferredyour shares are in arrears in an aggregate amount equivalent to six full quarterly dividends on all of the preferred shares, of that class or series then outstanding, the
holders of preferred shares of that class or seriesyou will have the exclusive and special right, voting separately as a class, to elect two of our directors, of ACE, and we will increase the number of directors constituting the Board will be increasedboard to the extent necessary to effectuate suchthis right. Whenever suchthis right of the holders of any
class or series of the preferred shares has vested, such rightit may be exercised initially either at an extraordinary meeting of the holders of such class or
series of the preferred shares or at any annual meeting of shareholders and, thereafterafter its initial exercise, at annual meetings of shareholders. TheThis special voting right of the holders of any
class or series of the preferred shares voting separately as a class to elect
members of the Board will continue until such time as all dividends accumulated on such class or series of the preferred shares have been paid in full, at which time that specialthis right will terminate, subject to revesting in the event of each and every subsequent default in payment of dividends in an aggregate amount equivalent to six full quarterly dividends.
        At any time when suchthis special voting powerright has vested, in the holders of any
class or series of the preferred shares as described in the preceding
paragraph, a proper officer of ACEwe will, upon the written request of the holders of record of at least 10% of such class or series of the preferred shares then outstanding addressed to the Secretary of ACE, call an extraordinary meeting of the holders of such class or series of the preferred shares for the purpose of electing directors. SuchThis extraordinary meeting will be held at the earliest practicable date in sucha place as may be designated pursuant to the
Articles (or,we designate or, if there be no designation, at theour principal office of ACEoffices in Hamilton, Bermuda).Bermuda. If suchwe do not call this meeting shall not be called by the proper officers
of ACE within 20 days after the Secretary of ACE has been personally served with suchthe proper request, or within 30 days after mailing the same within the United

                                      12

 States by registered or certified mail addressed to the Secretary of ACE at itsour principal office, then the holders of record of at least 10% of such class or
series of the preferred shares then outstanding may designate in writing one of their number to call suchthe meeting at ACE'sour expense, and suchthis meeting may be called by suchthis designated person so designated upon the notice required for annual meetings of shareholders and will be held in Hamilton, Bermuda. Any holder of
such class or series of preferred shares soThis designated person will have access to theour stock books of ACE for the purpose of causing meetings of shareholders to be called pursuantcalled. However, we do not have to, these provisions. Notwithstanding the foregoing, no suchand will not, call an extraordinary meeting will be called during the period within 90 days immediately preceding the date fixed for the next annual meeting of shareholders.
        At any annual or extraordinary meeting at which the holders of any class or
series of the preferred shares have thethis special right, voting separately as a
class, to elect directors as described above,right, the presence, in person or by proxy, of the holders of 33 1/3% of such class or series1/3% of the preferred shares will be required to constitute a quorum of such class or series for the election of any director by the holders of such class or series, voting as a
class.director. At any such meeting or adjournment thereof, (1)of the meeting, the absence of a quorum
of such class or series of the preferred shares will not prevent the election of directors other than those to be elected by such class or series of the
preferred shares,pursuant to this special voting as a class,right, and the absence of a quorum for the election of such other directors will not prevent the election of the directors to be elected by such class or series of the preferred shares,pursuant to this special voting as a
class, and (2)right. In addition, in the absence of either or both such quorums,types of quorum, a majority of the holders present in person or by proxy of any class or series of stock for which a quorum is lacking will have power tomay adjourn the meeting for the election of directors which they are entitled to elect, from time to time, until a quorum shall be present, without notice other than announcement at the meeting.
        During any period induring which the holders of any class or series of the
preferred shares have the special voting right, to vote asonly a class for directors as described
above, any vacancies in the Board will be filled only by vote of a majority, (eveneven if that be only a single director)director, of the remaining directors theretoforepreviously elected by the holders of the class or series of stock which elected the directors whose office shalloffices have become vacant.vacant may fill any board vacancy. During suchthis period, the directors so elected bypursuant to the holders of any class or series of the preferred
shares willspecial voting right shall continue in office (1) until the next succeeding annual meeting or until their successors, if any, are elected by suchthese holders and qualify or, (2) unless required by applicable law to continue in office for a longer period, until termination of the special voting right, of the holders of such class or series of the
preferred shares to vote as a class for directors, if earlier. If and to the extent


permitted by applicable law, immediately upon any termination of the special voting right, of the holders of any class or series of the preferred shares to vote as
a class for directors as provided herein, the term of office of the directors then in office so elected bypursuant to the holders of such class or seriesspecial voting right will terminate.
        Whether or not ACEour business is being wound up, theyour rights attached to any class or
series of preferred shares may only be varied with (1)either the written consent in writing of the holders of three-fourths of the issued shares of thatyour class or series of preferred shares or
(2) the sanction of a special resolution approved by at least 66 2/3%2/3% of the votes cast by the holders of the shares of thatyour class or series of preferred shares at a duly convened meeting where at least one-third of the issued shares of that class or series are represented, either in person or by proxy. TheYour rights attached to
any class or series of preferred shares will not be deemed to be varied by the creation or issue of any shares or any securities convertible into or evidencing the right to purchase shares ranking prior to or equally with suchyour class or series of the preferred shares with respect to the payment of dividends or of assets upon liquidation, dissolution or winding up. Holders of
preferred sharesYou are not entitled to vote on any amalgamation, consolidation, merger or statutory share exchange, except to the extent that suchthis type of a transaction would vary theyour rights, attached to any class or series of preferred
shares, in which case any such variation is subject to the approval process described above. Holders of preferred sharesYou are not entitled to vote on any sale of all or substantially all of the assets of ACE.our assets.
        On any item on which the holders of the preferred sharesyou are entitled to vote, such holdersyou will be entitled to one vote for each preferred share held.
Restrictions in Event of Default in Dividends on Preferred Shares
        If, at any time, ACE haswe have failed to pay dividends or amounts payable with respect to any obligations to retire preferred shares in full, on the preferred
shares, thereafterafter that time and until dividends in full,or these amounts, including all accrued and unpaid dividends for all past quarterly dividend periods on the preferred shares 13

outstanding, shall have been declared and set apart in trust for payment or paid, or if at any time ACE has failed to pay in full amounts payable with
respect to any obligations to retirewe may not:
Preemptive Rights
        No holder of preferred shares, solely by reason of such holding the preferred shares, has or will have any preemptive right to subscribe to any additional issue of shares of any class or series nor to any security convertible into such shares.


7.80% Cumulative Redeemable Preferred Shares, Series C
        In May 2003, we issued 2,300,000 shares of our 7.80% Cumulative Redeemable Preferred Shares, Series C, which we refer to as the ACE Series C Preferred Shares. The ACE Series C Preferred Shares are represented by depository shares, with each depository share representing 1/10 of an ACE Series C Preferred Share. The ACE Series C Preferred Shares rank senior to all ordinary shares now outstanding or that we may issue in the future, as to payment of dividends and distribution of assets upon our dissolution, liquidation or winding up.
Dividends
        Dividends on the ACE Series C Preferred Shares are cumulative and are payable quarterly in arrears on March 1, June 1, September 1 and December 1 of each year. We will only pay dividends on the ACE Series C Preferred Shares if our board of directors or an authorized committee of our board declares those dividends payable and ACE has funds legally available to pay those dividends.
        Dividends on the ACE Series C Preferred Shares are fixed at a rate per year of 7.80% of the liquidation preference of $250 per preferred share (or $19.50 per preferred share).
Optional Redemption
        On and after May 30, 2008, we may redeem the ACE Series C Preferred Shares, in whole at any time or in part from time to time at a redemption price of $250 per ACE Series C Preferred Share, plus accrued and unpaid dividends, if any, to the date of redemption. We may not redeem the ACE Series C Preferred Shares before May 30, 2008, except as described in the next paragraph and except that we may redeem the ACE Series C Preferred Shares before that date at a redemption price of $260 per ACE Series C Preferred Share, plus accrued and unpaid dividends, if any, to the date of redemption, if we
in either case, a vote of the holders of our ACE Series C Preferred Shares, voting separately as a single class (alone or with one or more class or series of other preferred shares).
        We also will have the option to redeem the ACE Series C Preferred Shares, at any time in whole or in part from time to time, at a redemption price of $250 per Preferred Share, plus accrued and unpaid dividends, if any, to the date of redemption, if there is a change in tax law that would require us or any successor corporation to pay any additional or "gross up" amounts with respect to the ACE Series C Preferred Shares.
Voting Rights
        The holders of the ACE Series C Preferred Shares are not entitled to any voting rights, except as required by applicable law and as described above under "Description of ACE Capital Stock—Preferred Shares—Voting Rights". Holders of ACE Series C Preferred Shares are also entitled to vote separately as a class with respect to certain court approved schemes of arrangement or reconstruction in which we will not be the surviving entity.
Liquidation Rights
        In the event of our voluntary or involuntary liquidation, dissolution or winding up, the holders of ACE Series C Preferred Shares will be entitled to receive out of our assets available for distribution to


shareholders—before any distribution of assets is made on our ordinary shares or any other class or series of our stock ranking junior to the ACE Series C Preferred Shares—a liquidating distribution in the amount of $250 per share, plus an amount equal to the sum of all accumulated and unpaid dividends, whether or not earned or declared, for the then-current dividend period and all prior dividend periods.
        In the event our assets available for distribution to the holders of ACE Series C Preferred Shares upon any liquidation, dissolution or winding up, whether voluntary or involuntary, are insufficient to pay in full all amounts to which the holders are entitled, no distribution will be made on any other stock ranking equally with the ACE Series C Preferred Shares unless a pro rata distribution is made on the ACE Series C Preferred Shares, with the amount allocable to each series determined on the basis of the aggregate liquidation preference of the outstanding shares of each series and distributions to the shares of each series being made on a pro rata basis.
Transfer Agent

   ACE's
        Our registrar and transfer agent for theour ordinary shares and the preferred shares is Mellon Investor Services.
Transfer of Shares

   The Articles
        Our articles contain various provisions affecting the transferability of ACE'sour shares. Under our articles, the Articles, the Boardboard has absolute discretion to decline to register aany transfer of shares (1) unless a registration statement underfor any reason, including its determination that the
Securities Act is in effect with respect to such shares or a written opinion
from counsel acceptable to the directors is obtained to the effect that such
registration is not required or (2) if the Board determines that such transfer would result in a person having controlled shares that constitute 10% or more of any class or series of ACE's issued shares. The Board alsoshares and that a registration statement under the Securities Act with respect to the shares has absolute
discretion to decline to register any transfer of shares. The Boardnot been filed. However, the board has waived its right to decline to register any transfer of shares which have been traded in the public market, (including theincluding any ordinary and preferred shares offered by a prospectus supplement)supplement or which were outstanding immediately prior to ACE's initial public offering.
        Maples and Calder, ACE'sour Cayman Islands counsel, has advised itus that, while the precise form of the restrictions on transfers contained in the Articlesour articles is untested, as a matter of general principle, restrictions on transfers of shares are enforceable under Cayman Islands law and are not uncommon. The transferor of
such sharesYou will be deemed to own suchyour shares for dividend, voting and reporting purposes until a transfer of suchthe shares has been registered on our stock transfer records.
        The restrictions on voting and ownership of more than 10% of any class or series of our issued shares described above, as well as the provisions discussed below under "Anti-Takeover Effects of Articles of Association" and "Shareholder Rights Plan," may have the effect of discouraging an attempt to obtain control of ACE through certain actions.

   The ArticlesACE.
        Our articles also provide that the Boardboard may suspend the registration of transfer for suchany periods as the Boardboard may determine, but shall not suspend the registration of transfer for more than 45 days in any year.


                                      14


Lloyd's Related Requirements
        Under Lloyd's regulations, as currently in effect, any person who, along with any associates, beneficially holds 10% or more of the votes or economic interest in ACE, or who controls decisions by ACE's Boardour board, is deemed to be a "controller" of any ACE subsidiary that is either a Lloyd's corporate member or Lloyd's managing agent. Lloyd's imposes an absolute prohibition on any company being a 10% controller of a Lloyd's corporate member or Lloyd's managing agent without first notifying Lloyd's and receiving theirits consent. This prohibition
is qualified in respect ofHowever, if a person who breaches the 20%, 33%, 50% or majority controller thresholds, in that the Lloyd's corporate member or Lloyd's managing agent must do all that lies within its powers to comply with


Lloyd's requirements. In these latter circumstances, this essentiallyrequirements, which means that notice must have beenwas given to the Council of Lloyd's thatregarding the relevant threshold will
be exceededbreach of the ownership percentage and that the Council of Lloyd's hasdid not objected.object. Lloyd's requires each "controller" of a Lloyd's corporate member or Lloyd's managing agentcontroller to execute and deliver a declaration and undertaking to Lloyd's containingwith representations concerning, among other things, the absence of criminal activities, censure, insolvency, civil liabilities and government investigations, etc., and
submittinginvestigations. Lloyd's also requires each controller to submit to the jurisdiction of the English courts. Any person that becomes the owner of 10% (or subsequently 20%, 33%, 50% or a majority) of theour ordinary shares would have to deliver this declaration and undertaking to Lloyd's, in the
form prescribed byunless he received an exemption from Lloyd's. The decision to grant an exemption is completely within Lloyd's unless Lloyd's exempts such person from this
requirement. Lloyd's regulations give Lloyd's the right to withhold consent to
a person becoming a controller of a Lloyd's corporate member, even where the
declaration and undertaking has been provided, if Lloyd's, in its discretion,
does not consider such person to be "fit and proper."discretion.
        In addition, under English law, if any person who is connected with"connected with" a Lloyd's broker holds, or subsequently becomes the holder of, more than 5% of theour ordinary shares, in ACE, that Lloyd's broker risks losing its Lloyd's license. For these purposes, a person is treated as connected with"connected with" a Lloyd's broker if
if:
Lien on Shares

   The Articles
        Our articles provide that ACEwe will have a first lien on all of our outstanding shares for all debts, liabilities or engagements to or with ACE (whetherus, whether presently payable or not) by the holder of such shares,not, except for shares declared to be exempt bywhich the Board.board declares exempt. This lien would extendextends to the payment of dividends or other money payable in respect of any ordinary shares or preferred shares subject to the lien. The Articles also provide that theIn addition, our directors may deduct from any dividend payable to a shareholderyou all sums of money presently payable by such
shareholderyou to ACEus on any account. The BoardHowever, the board has exempted from these provisions the ordinary and preferred shares offered by aany prospectus supplement.

supplement from these provisions.
Anti-Takeover Effects of our Articles of Association

   The Articles
        Our articles contain certain provisions that make it more difficult for an entity to acquire control of ACE by means of a tender offer, open market purchase, proxy fight or otherwise. These provisions, as well as the shareholder rights plan described under "Shareholder Rights Plan" below, are designed to encourage persons seeking to acquire control of ACE to negotiate with itsour directors. The
directorsWe believe that, as a general rule, theyour interests of its shareholders would be best served if any change in control results from negotiations with the directors. Theour directors, who would negotiate based upon careful consideration of the proposed terms, such asincluding the price, to be paid to shareholders, the form of consideration to be paid and the anticipated tax effects of the transaction. However, these provisions could have the effect of discouraging a prospective acquiror from making a tender offer or otherwise attempting to obtain control of ACE. To the extent these provisions discourage takeover attempts, theyACE, which could deprive shareholdersyou of opportunities to realize takeover premiums for theiryour shares or could depress the market price of theyour shares.


                                      15



   In addition to those provisions of the Articles discussed above, set forth
below is a description of other material provisions of the Articles. Because
the following description is intended as a summary only and is therefore not
complete, you should refer to the Articles, which are incorporated by reference
as an exhibit to the registration statement of which this prospectus forms a
part, for complete information regarding these provisions.

   
No Shareholder Action by Written Consent

   The Articles
        Our articles provide that shareholders must take any action required or permitted to be taken by ACE's shareholders must be takenthem at a duly called annual general or extraordinary general meeting of its shareholders and may not be taken by


written consent in writing or otherwise. The affirmative vote of the holders of at least 66 2/3%2/3% of the outstanding shares generally entitled to vote, voting together as a single class, is required to amend or repeal, or adopt any provision inconsistent with, this provision of the Articles.

   our articles.
Availability of Shares of Capital Stock for Future Issuances

   The availability of
        Our directors may issue shares for issue by ACE's directors without further action by shareholders, (except as may be required by applicable stock exchange
requirements) could be viewed as enabling the directors to make more difficult
a change in control of ACE, including by issuing warrants or rights to acquire shares to discourage or defeat unsolicited stock accumulation programs and acquisition proposals and by issuing shares in a private placement or public offering to dilute or deter stock ownership of persons seeking to obtain control of ACE. This could be enable the directors to make it more difficult for someone to effect a change in control of ACE.
Shareholder Proposals

   The Articles
        Our articles provide that if a shareholder desiresyou desire to submit a proposal for consideration at either an annual general meeting or extraordinary general meeting, or to nominate persons for election as directors, you must submit written notice of such
shareholder'syour intent to make such athe proposal or nomination to ACE's Secretary at our principal executive offices. This notice must be given and
received by the Secretary of ACE at its principal executive offices not later than (1) with respect to an annual general meeting, 60 days prior to the anniversary date of the immediately preceding annual general meeting and (2)or, with respect to an extraordinary general meeting, the close of business on the tenth day following the date on which the notice of such meeting is first sent or given to shareholders. TheThis notice must describe the proposal or nomination in sufficient detail for a proposal or nomination to be summarized on the agenda
for the meeting and must set forth (1) the following information:
        In the case ofaddition, a notice with regard to a nomination of any person for election as a director the notice must set forth: (1) also contain:
        The presiding officer of the annual general meeting or extraordinary general meeting will, if the facts warrant, refuse to acknowledge a proposal or nomination not made in compliance with the foregoing procedure.

   The affirmative vote of the holders of at least 66 2/3% of the outstanding
shares entitled to vote, voting together as a single class, will be required to
amend or repeal, or adopt any provision inconsistent with, the foregoing
provision of the Articles.

   Theproperly made.
        This advance notice requirements regulating shareholder nominations andfor shareholders' proposals provision may have the effect of precluding a contest for the election of directors or the introduction of a shareholder proposal if the procedures
summarized above are not followed and may discourage or deter a third party from conducting a solicitation of proxies to elect its own slate of directors or to introduce a proposal. 16

The affirmative vote of the holders of at least 662/3% of the outstanding shares will be required to amend or repeal, or adopt any provision inconsistent with, this provision.


Shareholder Rights Plan
        On May 7, 1999, ACE'sour board of directors declared a dividend of one preference share purchase right for each outstanding ordinary share to shareholders of record at the close of business on June 1, 1999. Subject to
certain exceptions,Generally, each right, when exercisable, entitles the holder to purchase from ACEus one one-thousandth of a series A junior participating preference share at an exercise price of $150, subject to certain antidilution adjustments. Because of the nature of the preference shares' dividend, liquidation and voting rights, the value of the one one-thousandth of a preference share purchasable upon the exercise of each right should approximate the value of one ordinary share.

   The
        These purchase rights generally will only be exercisable:

  .   

        Generally, if any person or group that acquires, or obtains the right to acquire, 15% or more of theour outstanding ordinary shares, of ACE is
referred to as an "Acquiring Person."

   Generally, if any person or group becomes an Acquiring Person, each right, except for rights held by the Acquiring Person,this person or group, will entitle its holder to purchase ordinary shares having a value equal to two times the exercise price of the right. If ACE is acquired in a merger, amalgamation or other business combination transaction, or if 50% or more of ACE's assets or earnings power is sold, then proper provision will be made so that each holder of a right, except for a person or group acquiring, or obtaining the Acquiring Person,right to acquire, 15% or more of our outstanding ordinary shares, will be entitled to receive common stock of the acquiring or surviving company having a value equal to two times the exercise price of the right.

   ACE's
        In addition, our board of directors has the option, at any time after any person or group becomes an Acquiring Personacquires, or obtains the right to acquire, 15% or more of our outstanding ordinary shares, but before the Acquiring Personthey acquires 50% or more of theour outstanding ordinary shares, to exchange each right, except for rights held by the Acquiring Person,this person or group, for one ordinary share. AtFurther, at any time prior to the time that any person or group becomes an Acquiring
Person, ACE'sacquires, or obtains the right to acquire, 15% or more of our outstanding ordinary shares, our board of directors may redeem the rights in whole, but not in part, at a price of $0.01 per right. TheThese rights will expire on June 1, 2009 if they have not been previously exercised, exchanged or redeemed.


                                      17




DESCRIPTION OF THE DEPOSITARY SHARES
General

   ACE
        We may at its option, elect to offer depositary shares, each representing a specified fraction (to be set forth in the prospectus supplement relating to a
particular series of preferred shares) of a share of a particular series of preferred shares as described below. In the event ACE elects to do so,
depositaryshares. Depositary receipts evidencing depositary shares will be issued to those persons purchasing the public.fractional shares of the related preferred shares.
        The shares of any class or series of preferred shares represented by depositary shares will be deposited under a deposit agreement among ACE, a depositary selected by ACE and the holders of the depositary receipts. The
depositary will be a bank or trust company having its principal officereceipts, whom we refer to in the
United States and having a combined capital and surplus of at least
$50,000,000.this section as owners. Subject to the terms of the deposit agreement, each owner of a
depositary share will be entitled in proportion to the applicable fraction of
a preferred share represented by such depositary share, to all the rights and preferences of the preferred shares represented thereby (includingby the depositary share in proportion to the fraction of a preferred share represented by the depositary share, including dividend, voting, redemption and liquidation rights).

   The depositary shares will be evidenced by depositary receipts issued
pursuant to the deposit agreement. Depositary receipts will be distributed to
those persons purchasing the fractional shares of the related class or series
of preferred shares in accordance with the terms of the offering described in
the related prospectus supplement. Copies of the forms of deposit agreement and
depositary receipt are filed as exhibits to the registration statement of which
this prospectus forms a part, and the following summary is qualified in its
entirety by reference to such exhibits.

   Pending the preparation of definitive depositary receipts, the depositary
may, upon the written order of ACE, issue temporary depositary receipts
substantially identical to (and entitling the holders thereof to all the rights
pertaining to) the definitive depositary receipts but not in definitive form.
Definitive depositary receipts will be prepared thereafter without unreasonable
delay, and temporary depositary receipts will be exchangeable for definitive
depositary receipts without charge to the holder thereof.

rights.
Dividends and Other Distributions
        The depositary will distribute all cash dividends or other distributions received in respect ofon the related class or series of preferred shares to the record holders of depositary shares relating to such class or series of
preferred sharesowners in proportion to the number of such depositary shares owned by
such holders.owned. In the event of a distribution other than in cash, the depositary will distribute property received by it to the record holders of depositary shares
entitled thereto,owners, unless the depositary determines that it is not feasible to make suchthe distribution, in which case the depositary may, with theour approval, of
ACE, sell suchthe property and distribute the net proceeds from suchthe sale to such
holders.

the owners.
Withdrawal of Shares
        Upon surrender of the depositary receipts, at the corporate trust office of
the depositary (unlessunless the related depositary shares have previously been called for redemption),redemption, the holder of the depositary shares evidenced therebyowner is entitled to delivery of the number of whole shares of the related class or
series of preferred shares and any money or other property represented by suchhis depositary shares. Holders of depositary shares will be entitled to receive
whole shares of the related class or series of preferred shares on the basis
set forth in the prospectus supplement for such class or series of preferred
shares, but holders of such whole preferred shares will not thereafter be entitled to exchange themthe preferred shares for depositary shares. If the delivered depositary receipts
delivered by the holder evidence a number of depositary shares in excess of the
number of depositary shares representing the number of whole preferred shares to be withdrawn, the depositary will deliver to such holder at the same timeowner a new depositary receipt evidencing suchthis excess number of depositary shares.at the same time. In no event will fractional preferred shares be delivered upon surrender of depositary receipts to the depositary.

                                      18

receipts.
Redemption of Depositary Shares
        Whenever ACE redeemswe redeem preferred shares held by the depositary, the depositary will redeem as of the same redemption date the number of depositary shares representing shares of the related class or series of preferred shares so
redeemed.shares. The redemption price per depositary share will be equal to the applicable fraction of the redemption price per share payable with respect to
such class or series of the preferred shares.share. If less than all the depositary shares are to be redeemed, the depositary shares to be redeemed will be selected by lot orpro rata as may be determined by the depositary.

depositary or us.
Voting the Preferred Shares
        Upon receipt of notice of any meeting at which the holders of the preferred shares are entitled to vote, the depositary will mail the information contained in suchthe notice of meeting to the record holdersowners of the depositary shares
relating to such preferred shares. Each record holder of such depositary sharesowner on the record date, (whichwhich will be the same date as the record date for the preferred shares) will be entitled toshares, may instruct the depositary ashow to the
exercise of theits voting rights pertaining to the amount of the class or series
of preferred shares represented by such holder'sthe owner's depositary shares. The depositary will endeavor, insofar as practicable, to vote the number of the preferred shares represented by suchthese depositary shares in accordance with suchthe instructions, and ACEwe will agree to take all action which the depositary deems necessary in order to enable the depositary to do so. The depositary will abstain from votingnot vote preferred shares to the extentif it does not receive specific instructions from the holders of depositary shares representing such preferred
shares.

record owners.


Amendment and Termination of the Deposit Agreement

   The
        Unless otherwise provided in the applicable prospectus supplement, the form of depositary receipt evidencing the depositary shares and any provision of the deposit agreement may be amended at any time be amended by agreement between ACEus and the depositary. However, any amendment which materially and adversely alters the rights of the holders of depositary receiptsowners will not be effective unless such amendmentit has been approved by the holders of depositary
receiptsowners representing at least a majority, (or,or, in the case of amendments
relating to or affecting rights to receive dividends or distributions or voting or redemption rights, 66 2/3%, unless otherwise provided in the related
prospectus supplement)2/3% of the depositary shares then outstanding. The deposit
agreement may be terminated by ACEWe or the depositary only may terminate the deposit agreement only:
Charges of Depositary

   ACE
        We will pay all transfer and other taxes and governmental charges arising solely from the existence of the depositary arrangements. ACEWe will also pay charges of the depositary in connection with the initial deposit of the related class
or series of preferred shares and any redemption of suchthe preferred shares. Holders of depositary receiptsOwners will pay all other transfer and other taxes and governmental charges and suchany other charges as are expressly provided in the deposit agreement to be for their accounts.
        The depositary may refuse to effect any transfer of a depositary receipt or any withdrawal of shares of a class or series of preferred shares evidenced therebyby the depositary receipts until all such taxes and charges with respect to such depositary
receiptthe receipts or such preferred shares are paid by the holders thereof.

owners.
Miscellaneous
        The depositary will forward all reports and communications which it receives from ACE which
are delivered to the depositaryus and which ACE iswe are required to furnish to the holders of the preferred shares.


                                      19


        Neither the depositary nor ACEwe will be liable if itthe depositary is prevented or delayed by law or any circumstance beyond its control in performing its obligations under the deposit agreement. The obligations of ACEOur and the depositary under
the deposit agreementdepositary's obligations will be limited to performance of the duties under the deposit agreement in gooda manner that does not constitute bad faith, of their
duties thereunder, and neither ACEwe nor the depositary will be obligated to prosecute or defend any legal proceeding in respect of any depositary shares or
class or series of preferred shares unless satisfactory indemnity is furnished.
ACE and the depositary may rely on written advice of counsel or accountants or
on information provided by persons presenting preferred shares for deposit,
holders of depositary shares or other persons believed to be competent and on
documents believed to be genuine.


Resignation and Removal of Depositary
        The depositary may resign at any time by delivering to ACEus notice of its election to do so,resign, and ACEwe may at any time remove the depositary. Any such resignation or removal of the depositary will take effect upon the appointment of a successor depositary, which successor depositary must be appointed within 60 days after delivery of the notice of resignation or removal and must be a bank or trust company having its principal office in the United States and having a combined capital and surplus of at least $50,000,000.

                                      20

$50,000,000 or be an affiliate of such bank or trust company.


DESCRIPTION OF ACE DEBT SECURITIES
        The following description of the ACE debt securities sets forth the material terms and provisions of the ACE debt securities to which any prospectus
supplement may relate.securities. The ACE senior debt securities are towill be issued under an indenture, referred to in this prospectus as the ACE senior indenture, between ACEus and Bank OneJ.P. Morgan Trust Company, N.A.National Association (as successor to The First National Bank of Chicago), as trustee, dated as of March 15, 2002, a copy of which is incorporated by reference as an exhibit to the registration statement of which this prospectus forms a part. The ACE subordinated debt securities are towill be issued under an indenture, referred to in this prospectus as the ACE subordinated indenture, between ACEus and Bank OneJ.P. Morgan Trust Company, N.A.,National Association, as trustee, the form of which is filedincorporated by reference as an exhibit to the registration statement of which this prospectus forms a part. The ACE senior indenture and the ACE subordinated indenture are sometimes referred to hereinin this prospectus collectively as the ACE indentures and each individually as an ACE indenture. The specific terms applicable to a particular termsissuance of the ACE debt securities offered byand any prospectus supplement, andvariations from the extent to which the
general provisions describedterms set forth below may apply to the offered ACE debt
securities, will be describedset forth in the applicable prospectus supplement.

   Because the
        The following summariesis a summary of the material terms and provisions of the ACE indentures and the ACE debt securities are not complete, yousecurities. You should refer to the forms of the ACE indentures and the ACE debt securities for complete information regarding the terms and provisions of the ACE indentures including
the definitions of some of the terms used below, and the ACE debt securities.
Wherever particular articles, sections or defined terms of an ACE indenture are
referred to, those articles, sections or defined terms are incorporated herein
by reference, and the statement in connection with which such reference is made
is qualified in its entirety by such reference. The ACE indentures are substantially identical, except for certainthe covenants of ACE and provisions relating to subordination.
General
        The ACE indentures do not limit the aggregate principal amount of ACE debt securities which ACEwe may issue thereunder and provide that ACEissue. We may issue ACE debt securities thereunderunder the ACE indentures from time to time in one or more series. (Section
3.1) The ACE indentures do not limit the amount of other Indebtedness (as
defined below)indebtedness, or ACE debt securities other than certain secured Indebtedness
as described below,indebtedness, which ACEwe or itsour subsidiaries may issue.
        Unless otherwise provided in a prospectus supplement, the ACE senior debt securities will be our unsecured obligations of ACE and will rank equally with all of itsour other unsecured and unsubordinated indebtedness. The ACE subordinated debt securities of each series will be our unsecured obligations of ACE,and will be subordinated in right of payment to the prior payment in full of all Senior
Indebtedness of ACE (whichour senior indebtedness, which term includes ACE senior debt securities) with
respect to such series,securities, as described below under "Subordination of ACE Subordinated Debt Securities" and in the applicable prospectus supplement.Securities."
        Because ACE iswe are a holding company, itsour rights and the rights of itsour creditors, (including the holdersincluding you, as a holder of ACE debt securities)securities, and shareholders to participate in any distribution of assets of any subsidiary upon the subsidiary's liquidation or reorganization or otherwise would be subject to the prior claims of the subsidiary's creditors, except to the extent that ACE may itself bewe are a creditor with recognized claims againstof the subsidiary. The right of our creditors, of ACE (including the holders of ACE debt securities)including you, to participate in the distribution of stock owned by ACEus in certainsome of itsour subsidiaries, including ACE'sour insurance subsidiaries, may also be subject to approval by certain
insurance regulatory authorities having jurisdiction over suchthese subsidiaries.

   The
        Each prospectus supplement relating to the particular ACE debt securities
offered thereby will describe the following terms of the offered ACE debt securities:

  .   


        We will have the ability under the ACE indentures to "reopen" a previously issued series of ACE debt securities and issue additional ACE debt securities of that series or establish additional terms of that series. ACE isWe are also permitted to issue ACE debt securities with the same terms as previously issued ACE debt securities. (Section 3.1)
        Unless otherwise providedset forth in the relatedapplicable prospectus supplement, principal of premium and interest on and additional amounts, if any, with respect to anyon the ACE debt securities will initially be payable at the office or agency maintained by ACE for such
purposes (initially the corporate trust office of the trustee). In the case oftrustee or any other office or agency designated by us. Interest on ACE debt securities issued in registered form, interest form:
        We will designate the initial paying agents, initially designated by ACE for the ACE debt securitieswhich will be named in the relatedapplicable prospectus supplement. ACEsupplement, and may, at any time, designate additional paying agents, or rescind the designation of any paying agent or approve a change in the office through which any paying agent acts, except that ACE will
beacts. However, we are required to maintain a paying agent in each place where the principal of, any premium or interest on or any additional amounts with respect to the ACE debt securities are payable. (Sections 3.7 and 10.2)
        Unless otherwise providedset forth in the relatedapplicable prospectus supplement, you may present the ACE debt securities may be presented for transfer, (dulyduly endorsed or accompanied by a written instrument of transfer if so required by ACE or the security registrar)registrar, or exchangedexchange for other ACE debt securities of the same series (containingcontaining identical terms and provisions, in any authorized denominations, and of a like aggregate principal amount)amount, in each case at the office or agency maintained by ACEus for suchthis purposes, (initiallywhich will initially be the corporate trust office of the trustee).
Suchtrustee. Any transfer or exchange will be made without service charge, but ACEalthough we may require payment of a sum sufficient to cover any tax or other governmental charge and any other expenses then payable. ACE willis not be required to (1)
to:

        Unless otherwise set forth in the relatedapplicable prospectus supplement. ACE may at any time
designate additional transfer agents or rescind the designation of any transfer
agent or approve a change in the office through which any transfer agent acts,
except that ACEsupplement, we will be required to maintain a transfer agent in each place
where the principal of, any premium or interest on or any additional amounts
with respect toonly issue the ACE debt securities are payable. (Section 10.2)

   Unless otherwise provided in the related prospectus supplement, the ACE debt
securities will be issued only in fully registered form without coupons in minimum denominations of $1,000 and any integral multiple thereof.of $1,000. (Section 3.2) TheIf the ACE debt securities may be represented in whole or in part by one or
more global ACE debt securities registered in the name of a depositary or its
nominee and, if so represented, interests in such global ACE debt security will
be shown on, and transfers thereof will be effected only through, records
maintained by the designated depositary and its participants as described
below. Where ACE debt securities of any series are issued in bearer form, the
specialany restrictions and considerations, including special offering restrictions and special United StatesU.S. Federal income tax considerations applicable to such ACE debtthese securities, and to payment on and transfer and exchange of, such ACE debtthese securities, will be described in the relatedapplicable prospectus supplement.
        The ACE debt securities may be issued as original issue discount securities, (bearingwhich means that they will bear no interest or bearingbear interest at a rate which, at the time of issuance, is below market rates) torates. ACE debt securities issued as original issue discount securities will be sold at a substantial discount below their principal amount. Special United States
        U.S. Federal income tax and other considerations applicable to original issue discount securities will be described in the relatedapplicable prospectus supplement.
        If the purchase price, of any ACE debt securities is payable in one or more
foreign currencies or currency units or if any ACE debt securities are
denominated in one or more foreign currencies or currency units or if the principal of, or any premium or interest on, or any additional amounts with respect to, any ACE debt securities is payable in, or if any ACE debt securities are denominated in, one or more foreign currencies or currency units, the restrictions, elections, certain United
StatesU.S. Federal income tax considerations, specific terms and other information with respect to such ACE debt securities and such foreign currency or currency
units will be set forth in the relatedapplicable prospectus supplement.

   ACE will comply with Section 14(e) under the Exchange Act, and any other
tender offer rules under the Exchange Act which may then be applicable, in
connection with any obligation of ACE to purchase ACE debt securities at the
option of the holders. Any such obligation applicable to a series of ACE debt
securities will be described
        Unless otherwise set forth in the relatedapplicable prospectus supplement.

   Unless otherwise described in a prospectus supplement, relating to any ACE
debt securities, other than as described below under "--Covenants"—Covenants Applicable to ACE Senior Debt Securities--LimitationSecurities—Limitation on Liens on Stock of Designated Subsidiaries," the ACE indentures do not contain any provisions that would
limit ACE'sour ability to incur indebtedness or that would affordprotect holders of the ACE debt securities protection in the event of a sudden and significant decline in theour credit quality of ACE or a takeover, recapitalization or highly leveraged or similar transaction involving ACE.us. Accordingly, ACEwe could in the future enter into transactions that could increase the amount of indebtednessits outstanding at that timeindebtedness or otherwise affect ACE'sits capital structure or credit rating. You should refer to the prospectus supplement relating to a particular
series of ACE debt securities for information regarding to any deletions from,
modifications of or additions to the Events of Defaults described below or
covenants of ACE contained in the ACE indentures, including any addition of a
covenant or other provisions providing event risk or similar protection.


Conversion and Exchange
        The terms, if any, on which ACE debt securities of any series are convertible into or exchangeable for, either mandatorily, at our or your option, property or cash, ordinary shares, preferred shares or other securities, whether or not issued by ACE, property or cash,us, or a combination of any of the foregoing,these, will be set forth in the relatedapplicable prospectus supplement.
Such terms may

                                      24



include provisions for conversion or exchange, either mandatory, at the option
of the holder, or at the option of ACE, in which the securities, property or
cash to be received by the holders of the ACE debt securities would be
calculated according to the factors and at such time as described in the
related prospectus supplement.


Global Securities
        The ACE debt securities of a series may be issued, in whole or in part, in the form of one or more global ACE debt securities that will be deposited with, or on behalf of, a depositary identified in the applicable prospectus supplement relating to
such series.

   The specific termsand registered in the name of the depositary arrangement with respect to a series ofor its nominee. Interests in any global ACE debt securities will be described in the prospectus supplement relating to
such series. ACE anticipates that the following provisions will apply to all
depositary arrangements.

   Upon the issuance of a global security, the depositary for such global
security or its nominee will credit, on its book-entry registration and
transfer system, the respective principal amounts of the ACE debt securities
represented by such global security. Such accounts will be designated by the
underwriters or agents with respect to such ACE debt securities or by ACE if
such ACE debt securities are offered and sold directly by ACE. Ownership of
beneficial interests in a global security will be limited to persons that may
hold interests through participants. Ownership of beneficial interests in such
global security will be shown on, and transfers of the transfer of that ownershipACE debt securities will be effected only through, records maintained by the depositary orand its nominee
(with respect to interestsparticipants as described below.
        The specific terms of participants) and on the records of participants
(with respect to interests of persons other than participants). The laws of
some states require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair the ability to transfer beneficial interests in a global security.

   So long as the depositary for a global security, or its nominee, is the
registered owner of such global security, such depositary or such nominee, as
the case may be,arrangement will be considereddescribed in the sole owner or holderapplicable prospectus supplement.
Payment of Additional Amounts
        We will make all payments on the ACE debt securities represented by such global security for all purposes under the
applicable ACE indenture. Except as described below, owners of beneficial
interests in a global security will not be entitled to have ACE debt securities
of the series represented by such global security registered in their names and
will not receive or be entitled to receive physical delivery of ACE debt
securities of that series in definitive form.

   Principal of, any premium and interest on, and any additional amounts with
respect to, ACE debt securities registered in the name of a depositary or its
nominee will be made to the depositary or its nominee, as the case may be, as
the registered owner of the global security representing such ACE debt
securities. None of ACE, the trustee, any paying agent or the security
registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of the global security for such ACE debt securities or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.

   ACE expects that the depositary for a series of ACE debt securities or its
nominee, upon receipt of any payment with respect to such ACE debt securities,
will credit immediately participants' accounts with payments in amounts
proportionate to their respective beneficial interest in the principal amount
of the global security for such ACE debt securities as shown on the records of
such depositary or its nominee. ACE also expects that payments by participants
to owners of beneficial interests in such global security held through such
participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers
registered in street name, and will be the responsibility of such participants.

   The ACE indentures provide that if (1) the depositary for a series of ACE
debt securities notifies ACE that it is unwilling or unable to continue as
depositary or if such depositary ceases to be eligible under the applicable ACE
indenture and a successor depositary is not appointed by ACE within 90 days of
written notice, (2) ACE

                                      25



determines that ACE debt securities of a particular series will no longer be
represented by global securities and executes and delivers to the trustee a
company order to such effect or (3) an Event of Default with respect to a
series of ACE debt securities has occurred and is continuing, the global
securities will be exchanged for ACE debt securities of such series in
definitive form of like tenor and of an equal aggregate principal amount, in
authorized denominations. Such definitive ACE debt securities will be
registered in such name or names as the depositary shall instruct the trustee.
(Section 3.5) It is expected that such instructions may be based upon
directions received by the depositary from participants with respect to
ownership of beneficial interests in global securities.

Payment of Additional Amounts

   ACE will make all payments of principal of and premium, if any, interest and
any other amounts on, or in respect of, the ACE debt securities of any series
without withholding or deduction at source for, or on account of any present or future taxes fees, duties, assessments or governmental charges of whatever
nature imposed or levied by or on behalf of the Cayman Islands or Bermuda, each referred to as a taxing jurisdiction, or any political subdivision or
taxing authority thereof or therein, unless such taxes, fees, duties,
assessments or governmental chargeswe are required to be withhelddo so by applicable law or deducted by
(x) the laws (or any regulations or rulings promulgated thereunder) of a taxing
jurisdiction or any political subdivision or taxing authority thereof or
therein or (y) an official position regarding the application, administration,
interpretation or enforcement of any such laws, regulations or rulings,
including, without limitation, a holding by a court of competent jurisdiction
or by a taxing authority in a taxing jurisdiction or any political subdivision
thereof.regulation.


        If a withholding or deduction at source iswe are required ACEto withhold amounts, we will, subject to certainthe limitations and exceptions described below, pay to the holder of any
such ACE debt security suchyou additional amounts as may be necessary so that every net payment of principal, premium, if any, interest or any other amount
made to such holder,you, after the withholding, or deduction, will not be less than
the same amount provided for in suchthe ACE debt security and the applicable ACE indenture to be then due and payable.

   ACEindenture.
        We will not be required to pay any additional amounts for or on account of:

    1. for:
        In addition, ACEwe will not pay additional amounts with respect to any payment
of principal of, or premium, if any, interest or any other amounts on, any such
ACE debt security to any holder who isyou are a fiduciary or partnership or other than the sole beneficial owner of suchthe ACE debt security toif the extent such payment
would be required by the laws of the relevant taxing jurisdiction (or any
political subdivision or relevant taxing authority thereof or therein) to be
included in the income for tax purposes of a beneficiary or partner or settlor
with respect to such fiduciary or a member of such partnership or a beneficial
owner who would not have been entitled to suchthe additional amounts had it been the holder of the ACE debt security. (Section 10.4)
Covenants Applicable to ACE Senior Debt Securities
Limitation on Liens on Stock of Designated Subsidiaries
        Under the ACE senior indenture, ACEwe will covenant that, so long as any ACE senior debt securities are outstanding, itwe will not, nor will itwe permit any Subsidiarysubsidiary to, create, incur, assume incur,or guarantee or otherwise permit to exist any Indebtednessindebtedness secured by any mortgage, pledge, lien, security interest or
other encumbrance uponon any shares of capital stock of any Designated Subsidiary
(whether such shares of stock are now owned or hereafter acquired) without
effectively providingdesignated subsidiary unless we concurrently provide that the ACE senior debt securities (and,and, if ACE so elects,we elect, any other Indebtedness of ACEindebtedness that is not subordinate to the ACE senior debt securities and with respect to which the governing instruments require, or pursuant to which ACE is otherwisewe are obligated, to provide such security)security, will be secured equally and ratably with such Indebtednessthis indebtedness for at least the time period suchthis other Indebtednessindebtedness is so secured. (Section 10.5 of the ACE senior indenture)

   For purposes of the ACE senior indenture, "capital stock" of any Person
        The term "designated subsidiary" means any and all shares, interests, rights to purchase, warrants, options,
participationspresent or other equivalentsfuture consolidated subsidiary, the consolidated net worth of or interests in, however designated,
equitywhich constitutes at least 5% of such Person, including preferred stock, but excluding any debt
securities convertible into such equity.our consolidated net worth. (Section 1.1 of the ACE senior indenture)

   The term "Designated Subsidiary" means any present or future consolidated
Subsidiary of ACE, the Consolidated Net Worth of which constitutes at least 5%
of ACE's Consolidated Net Worth. (Section 1.1 of the ACE senior indenture) As
of April 30, 2002, ACE's Designated Subsidiaries were ACE Bermuda, Tempest, ACE
INA and ACE USA..


        For purposes of the ACE indentures, the term "Indebtedness""indebtedness" means, with respect to any Person, (1) person:
Limitations on Disposition of Stock of Designated Subsidiaries
        The ACE senior indenture also provides that, so long as any ACE senior debt securities are outstanding and except in a transaction otherwise governed by suchthe ACE indenture, ACEindentures, we will not issue, sell, assign, transfer or otherwise dispose of any shares of, securities convertible into, or warrants, rights or options to subscribe for or purchase shares of, capital stock, (otherother than preferred stock having no voting rights, of any kind) of any Designated
Subsidiary, anddesignated subsidiary. Similarly, we will not permit any Designated Subsidiarydesignated subsidiary to issue, (otherother than to ACE) any shares (other than director's qualifying shares)us, these types of or securities,
convertible into, or warrants, rights or options, to subscribe for or purchaseother than director's qualifying shares of, capital stock (other thanand preferred stock having no voting rights, of any kind) of any Designated Subsidiary,designated subsidiary, if, after giving effect to any suchthe transaction and the issuance of the maximum number of shares issuable upon the conversion or exercise of all suchthe convertible securities, warrants, rights or options, ACEwe would own, directly or indirectly, less than 80% of the shares of capital stock of such Designated Subsidiary (otherthe designated subsidiary, other than preferred stock having no voting rights of any kind); provided, however, that (1) any issuance, sale,
assignment,rights.
        However, we may issue, sell, assign, transfer or other disposition permitted by ACE may only be made forotherwise dispose of securities if the consideration is at least a fair market value consideration as determined by ACE'sour board of
directors pursuant to a resolution adopted in good faith and (2) the foregoing
will not prohibit any such issuance or disposition of securities if required by any law or any regulation or order of any governmental or insurance regulatory
authority. Notwithstanding the foregoing, (1) ACEregulation. We may also merge or consolidate any Designated Subsidiarydesignated subsidiary into or with another direct or indirect Subsidiary of
ACE,subsidiary, the shares of capital stock of which ACE ownswe own at least 80%, and (2) ACE
may, or, subject to the provisions described under "--Consolidation,"—Consolidation, Amalgamation, Merger and Sale of Assets" below, sell, assign, transfer or otherwise dispose of the entire capital stock of any Designated Subsidiarydesignated subsidiary at one time forif the consideration is at least a fair market value consideration as determined by ACE's board of
directors pursuant to a resolution adopted in good faith.our board. (Section 10.6 of the ACE senior indenture)


Consolidation, Amalgamation, Merger and Sale of Assets
        Each ACE indenture provides that ACEwe may not (1) not:
        unless, (a) in 
Events of Default
        Each of the following events will constitute an Eventevent of Defaultdefault under the
applicableeach ACE indenture with respect to any series of ACE debt securities
issued thereunder (whatever the reason for such Event of Default and whether it
will be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):

   (1) indenture:

        If an Eventevent of Defaultdefault with respect to the ACE debt securities of any series, (otherother than an Eventevents of Default described in (7) of the preceding paragraph)bankruptcy, insolvency or reorganization, occurs and is continuing, either the trustee or the holders of not less than 25% in principal amount of the outstanding ACE debt securities of suchthe series
by written notice as provided in the applicable ACE indenture may declare the principal amount, (or suchor a lesser amount as may be provided for in the ACE debt securities, of such series) of all outstanding ACE debt securities of suchthe series to be immediately due and payable immediately.by written notice. At any time after a declaration of acceleration has been made, but before a judgment or decree for payment of money has been obtained by the trustee, and subject to applicable law and
certain other provisions of the applicable ACE indenture,generally, the holders of not less than a majority in principal amount of the ACE debt securities of suchthe series may under certain circumstances, rescind and annul suchthe declaration of acceleration. An EventAny event of Default described in (7) of the preceding paragraphbankruptcy, insolvency or reorganization will cause the principal amount and accrued interest, (or suchor the lesser amount as provided for in the ACE debt securities, of such series) to become immediately due and payable without any declaration or other act by the trustee or any holder. (Section 5.2)
        Each ACE indenture provides that, within 90 days after the occurrence of any event which is, or after notice or lapse of time or both would become, an Eventevent of Default with respect to the ACE debt securities of any series, each referred
to in this prospectus as a default the trustee will transmit in the manner
set forth in such ACE indenture, notice of suchthe default to the holderseach holder of the ACE debt securities of such series unless suchthe default has been cured or waived; provided, however, thatwaived. However, except in the case of a default in the payment of principal of, or premium, if any, or interest, if any, on or additional amounts or any sinking fund or purchase fund installment with respect to any ACE debt security, of such series, the trustee may withhold suchthis notice if and so long as the board of directors, the executive committee or a trust committee of directors and/or responsible officers of the trustee determines in good faith determine that the withholding of suchthe notice is in the best interest of the holders of
ACE debt securities of such series; and provided, further, that in the case of
any default of the character described in (5) of the second preceding
paragraph, no such notice to holders will be given until at least 30 days after
the default occurs.holders. (Section 6.2)

                                      29


        If an Eventevent of Defaultdefault occurs and is continuing with respect to the ACE debt securities of any series, the trustee may, in its discretion, proceed to protect and enforce its rights and the rights of the holders of ACE debt securities of
such series by all appropriate judicial proceedings. (Section 5.3) Each ACE indenture provides that, subject to the duty of the trustee during any default to act with the required standard of care, the trustee will be under no obligation to exercise any of its rights or powers under suchthe ACE indenture at the request or direction of any of the holders, of ACE debt securities, unless suchthe holders shall have offered to the trustee reasonable indemnity. (Section 6.1) Subject to suchthese indemnification provisions, for the indemnification of the trustee, and
subject to applicable law and certain other provisions of the applicable ACE
indenture, the holders of a majority in principal amount of the outstanding ACE debt securities of any series will generally have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee, or exercising any trust or power conferred on the trustee, with respect to the ACE debt securities of suchthe series. (Section 5.12)
Modification and Waiver
        ACE and the trustee may modify or amend either ACE indenture with the consent of the holders of not less than a majority in principal amount of the outstanding ACE debt securities of each series affected thereby; provided,
however, that no suchby the modification or amendment, may,so long as the modification or amendment does not, without the consent of the
holder of each outstanding ACE debt security affected thereby,

  .   holder:

        In addition, no supplemental indenture may, directly or indirectly, modify or eliminate the subordination provisions of the ACE subordinated indenture in any manner which might terminate or impair the subordination of the ACE subordinated debt securities of any series to Senior Indebtedness with respect
to such seriessenior indebtedness without the prior written consent of the holders of such Senior
Indebtedness.the senior indebtedness. (Section 9.7 of the ACE subordinated indenture)
        ACE and the trustee may modify or amend either ACE indenture and the ACE debt securities of any series without the consent of any holder in order to, among other things:

  .   

        The holders of at least a majority in principal amount of the outstanding ACE debt securities of any series may, on behalf of the holders of all ACE debt securities of that series, waive compliance by ACE with certain covenants of
the applicable ACE indenture.specified covenants. (Section 10.8 of the ACE senior indenture; Section 10.6 of the ACE subordinated indenture) The holders of not less than a majority in principal amount of the outstanding ACE debt securities of any series may, on behalf of the holders of all ACE debt securities of that series, waive any past default and its consequences under the applicable ACE indenture with respect to the ACE debt securities of that series, except a default (1) default:
        Under each ACE indenture, ACE is required tomust annually furnish the trustee annually a statement as toregarding its performance by ACE of certain of itsspecified obligations under that ACE
indenture and as to any default in such performance.its performance under the applicable ACE indenture. ACE is also required to deliver to the trustee, within five days after its occurrence, thereof, written notice of any Eventevent of Default,default, or any event which after notice or lapse of time or both would constitute an Eventevent of Default,default, resulting from the failure to perform, or breach of, any covenant or warranty contained in the applicable ACE indenture or the ACE debt securities of any series.securities. (Section 10.9 of the ACE senior indenture; Section 10.7 of the ACE subordinated indenture)
Discharge, Defeasance and Covenant Defeasance

   ACE
        We may discharge certainour payment obligations to holders of any series of ACE debt
securities that have not already been delivered to the trustee for cancellation
and that either have become due and payable or will become due and payable
within one year (or scheduled for redemption within one year) by depositing
with the trustee, in

                                      31



trust, funds in U.S. dollars or in the Foreign Currency (as defined below) in
which such ACE debt securities are payable in an amount sufficient to pay the
entire indebtedness on such ACE debt securities with respect to principal and
any premium, interest and additional amounts to the date of such deposit (if
such ACE debt securities have become due and payable) or to the maturity
thereof, as the case may be. (Section 4.1)

   Each ACE indenture provides that, unless the provisions of Section 4.2
thereof are made inapplicable to the ACE debt securities, ofwhich we refer to as defeasance, or within any
series pursuantelect to Section 3.1 thereof, ACE may elect either (1) to defease and be discharged from any and allcomplying with the covenants in the ACE indentures, except for certain ministerial obligations, with respect to suchlike registering transfers or exchanges of the ACE debt securities, (except for, among other things, the obligationwhich we refer to pay additional
amounts, if any, upon the occurrence of certain events of taxation, assessment
or governmental charge with respect to payments on such ACE debt securities and
other obligations to register the transfer or exchange of such ACE debt
securities, to replace temporary or mutilated, destroyed, lost or stolen ACE
debt securities, to maintain an office or agency with respect to such ACE debt
securities and to hold moneys for payment in trust), referred to in this
prospectus as defeasance, or (2) to be released from its obligations with
respect to such ACE debt securities under certain covenants as described in the
related prospectus supplement, and any omission to comply with such obligations
will not constitute a default or an Event of Default with respect to such ACE
debt securities, referred to in this prospectus as covenant defeasance.
        Defeasance or covenant defeasance, as the case may be, will be conditioned upon the irrevocable deposit by ACEus with the Trustee,trustee, in trust, of ana cash amount in U.S.
dollars or in the Foreign Currency in which such ACE debt securities are
payable at stated maturity, or Government Obligations (as defined below),government obligations, or both, applicable to such ACE debt securities which, through the scheduled payment of principal and interest in accordance with their terms, will provide money in an amount sufficient to pay the principal of, any premium and interest on and any additional amounts with respect to, suchthe ACE debt securities on the scheduled due dates. (Section 4.2)

   Such a trust
        We may only be establisheddo this if, among other things, (1) things:

Subordination of ACE Subordinated Debt Securities
        The ACE subordinated debt securities of each series will to the extent set
forth in the ACE subordinated indenture,generally be subordinate in right of payment to the prior payment in full of all Senior Indebtedness with respect to such
series.senior indebtedness. (Section 16.1 of the ACE subordinated indenture) Upon any payment or distribution of our assets, of ACE of any kind or character, whether in cash, property or securities, to creditors upon anyour dissolution, winding-up, liquidation or reorganization, of ACE, whether voluntary or involuntary, or in bankruptcy, insolvency, receivership or other proceedings, all amounts due upon all Senior Indebtedness with respect to the ACE subordinated debt securities of
any seriessenior indebtedness will first be paid in full, or payment thereof provided for in money in accordance with its terms, before the holders of ACE subordinated debt securities of such series are entitled to receive or retain any payment on account of principal of, or any premium or interest on or any additional amounts with respect to the ACE subordinated debt securities of such series,
and tosecurities. This means that end the holders of such

                                      33



Senior Indebtednesssenior indebtedness will be entitled to receive for application to the payment
thereof, any payment or distribution of any kind or character, whether in cash,
property or securities, including any such payment or distribution which may be payable or deliverable by reason of the payment of any other Indebtednessindebtedness of ACE being subordinated to the payment of ACE subordinated debt securities, of
such series, which may be payable or deliverable in respect of the ACE subordinated debt securities of such series upon any such dissolution, winding-up, liquidation or reorganization or in any such bankruptcy, insolvency, receivership or other proceeding. (Section 16.3 of the ACE subordinated indenture)
        By reason of such subordination, in the event of our liquidation or insolvency, of ACE, holders of Senior Indebtedness with respect to the ACE subordinated
debt securities of any seriesour senior indebtedness and holders of our other obligations of ACE that are not subordinated to such Senior Indebtednesssenior indebtedness may recover more ratably than the holders of the ACE subordinated debt securities of such series.securities.
        Subject to the payment in full of all Senior Indebtedness with respect to
the ACE subordinated debt securities of any series, thesenior indebtedness, your rights, of the holdersas a holder of the ACE subordinated debt securities, of such series will be subrogated to the rights of the holders of such Senior Indebtednesssenior indebtedness to receive payments or distributions of our cash, property or securities of ACE applicable to such Senior
Indebtednessthe senior indebtedness until the principal of, any premium and interest on and any additional amounts with respect to the ACE subordinatedsenior debt securities of
such series have been paid in full. (Section 16.4 of the ACE subordinated indenture)
        No payment of principal (includingof, including redemption and sinking fund payments) ofpayments, or any premium or interest on or any additional amounts with respect to the ACE subordinated debt securities of any series may be made (1) made:
        The ACE subordinated indenture does not limit or prohibit ACEus from incurring additional Senior Indebtedness,senior indebtedness, which may include Indebtednessindebtedness that is senior to the ACE subordinated debt securities of any series, 


but subordinate to our other obligations of ACE.obligations. The ACE senior debt securities will constitute Senior
Indebtednesssenior indebtedness with respect to the ACE subordinated debt securities of each
series under the ACE subordinated indenture.securities.
        The term "Senior Indebtedness""senior indebtedness" means with respect to all indebtedness of ACE outstanding at any time, except:
        Senior Indebtedness with respect to the ACE subordinated debt
securities of any particular seriesindebtedness will continue to be Senior Indebtedness
with respect to the ACE subordinated debt securities of such seriessenior indebtedness and be entitled to the benefits of the subordination provisions irrespective of any amendment, modification or waiver of any term of such Senior Indebtedness.the senior indebtedness. (Sections 1.1 and 16.8 of the ACE subordinated indenture)
        The ACE subordinated indenture provides that the foregoingthese subordination provisions insofar as they relate to any particular series of ACE subordinated
debt securities, may be changed prior to such issuance.issuance of the ACE subordinated debt securities. Any such change would be described in the relatedapplicable prospectus supplement.

                                      34


New York Law to Govern
        The ACE indentures and the ACE debt securities will be governed by, and construed in accordance with, the laws of the Statestate of New York applicable to
agreements made or instruments entered into and, in each case, performed in
that state.York. (Section 1.13)
Information Concerning the Trustee

   ACE
        We may, from time to time, borrow from or maintain deposit accounts with and conduct other banking transactions with Bank OneJ.P. Morgan Trust Company, N.A.National Association and its affiliates in the ordinary course of business.
        Under each ACE indenture, Bank OneJ.P. Morgan Trust Company, N.A.National Association is required to transmit annual reports to all holders regarding its eligibility and qualifications as trustee under the applicable ACE indenture and related matters. (Section 7.3)

                                      35




DESCRIPTION OF ACE INA DEBT SECURITIES AND ACE GUARANTEE
        The following description of the ACE INA debt securities and the ACE guarantee sets forth the material terms and provisions of the ACE INA debt securities and the ACE guarantee to which any prospectus supplement may relate. The ACE INA senior debt securities are to be issued under an indenture, referred to in this prospectus as the ACE INA senior indenture, among ACE INA, ACE and Bank OneJ.P. Morgan Trust Company, N.A.National Association (as successor to The First National Bank of Chicago), as trustee, dated as of August 1, 1999, a copy of which is incorporated by reference as an exhibit to the registration statement of which this prospectus forms a part. The ACE INA subordinated debt securities are to be issued under an indenture, referred to in this prospectus as the ACE INA subordinated indenture, among ACE INA, ACE and Bank OneJ.P. Morgan Trust Company, N.A.National Association (as successor to The First National Bank of Chicago), as trustee, the formdated December 1, 1999, a copy of which is filedincorporated by reference as an exhibit to the registration statement of which this prospectus forms a part. The ACE INA senior indenture and the ACE INA subordinated indenture are sometimes referred to herein collectively as the "ACEACE INA indentures"indentures and each individually as an "ACEACE INA indenture." The specific terms applicable to a particular termsissuance of the ACE INA debt securities offered byand any prospectus supplement, andvariations from the extent to which the general
provisions describedterms set forth below may apply to the offered ACE INA debt securities, will be describedset forth in the applicable prospectus supplement.

   Because the
        The following summariesis a summary of the material terms and provisions of the ACE INA indentures, the ACE INA debt securities and the ACE guarantee are not
complete, youguarantee. You should refer to the forms of the ACE INA indentures and the ACE INA debt securities for complete information regarding the terms and provisions of the ACE INA indentures, including the definitions of some of the terms used
below, the ACE INA debt securities and the ACE guarantee. Wherever particular
articles, sections or defined terms of an ACE INA indenture are referred to,
such articles, sections or defined terms are incorporated herein by reference,
and the statement in connection with which such reference is made is qualified
in its entirety by such reference. The ACE INA indentures are substantially identical, except for certainthe covenants of ACE INA and ACE and provisions relating to subordination.
General
        The ACE INA indentures do not limit the aggregate principal amount of ACE INA debt securities which ACE INA may issue thereunder and provide thatissue. ACE INA may issue ACE INA debt securities thereunderunder the ACE INA indenture from time to time in one or more series. (Section 3.1) The ACE INA indentures do not limit the amount of other Indebtedness (as defined below)indebtedness or ACE INA debt securities, other than certain
secured Indebtedness as described below,indebtedness which ACE,we, ACE INA or their respective subsidiaries may issue.
        Unless otherwise providedset forth in athe applicable prospectus supplement, the ACE INA senior debt securities will be unsecured obligations of ACE INA and will rank equally with all of its other unsecured and unsubordinated indebtedness. The ACE INA
subordinated debt securities of each series will be unsecured obligations of
ACE INA,indebtedness, subordinated in right of payment to the prior payment in full of all Senior Indebtedness (whichof ACE INA's senior indebtedness, which term includes ACE INA senior debt securities) of ACE
INA with respect to such series,securities, as described below under "Subordination of ACE INA Subordinated Debt Securities" and in the related prospectus supplement.Securities." The ACE INA subordinated debt securities of any series issued to an ACE Trust will rank equally with each other series of ACE INA subordinated debt securities issued to other ACE Trusts.
        Because ACE INA is a holding company, its rights and the rights of its creditors, (including the holdersincluding you as a holder of ACE INA debt securities) and shareholderssecurities, to participate in any distribution of assets of any subsidiary upon that subsidiary's liquidation or reorganization or otherwise would be subject to the prior claims of the subsidiary's creditors, except to the extent that ACE INA may itself beis a creditor with recognized claims againstof the subsidiary. The rights of creditors of ACE INA, (including the holdersincluding you as a holder of ACE INA debt securities)securities, to participate in the distribution of stock owned by ACE INA in
certain of its subsidiaries, including ACE INA's insurance subsidiaries, may also be subject to the approval of certain insurance regulatory authorities having jurisdiction over suchthe subsidiaries.

                                      36



   In the event
        If ACE INA subordinated debt securities are issued to an ACE Trust in connection with the issuance of preferred securities and common securities by that ACE Trust, suchthose ACE INA subordinated debt securities may subsequently may be distributedpro rata to the holders of such preferredthe securities and common
securities in connection withof the ACE Trust under the dissolution of that ACE TrustTrust. This type of distribution would only occur upon the occurrence of certain


specified events, which will be described in the applicable prospectus supplement relating to
such preferred securities and common securities.supplement. Only one series of ACE INA subordinated debt securities will be issued to an ACE Trust in connection with the issuance of preferred securities and common securities by that ACE Trust.
        The applicable prospectus supplement relating to the particular ACE INA debt securities
offered thereby will describe the following terms of the offered ACE INA debt securities:

  .   


        ACE INA will have the ability under the ACE INA indentures to "reopen"reopen a previously issued series of ACE INA debt securities and issue additional ACE INA debt securities of that series or establish additional terms of that series. ACE INA is also permitted to issue ACE INA debt securities with the same terms as previously issued ACE INA debt securities. (Section 3.1)
        Unless otherwise providedset forth in the relatedapplicable prospectus supplement, principal of, premium and interest on and additional amounts, if any, with respect to anyon the ACE INA debt securities will initially be payable at the office or agency maintained

                                      38



by ACE INA and ACE for such purposes (initially 


the corporate trust office of the trustee). In the case oftrustee, or any other office or agency designated by ACE INA for this purpose. Interest on ACE INA debt securities issued in registered form,
interest form:
        ACE INA will designate the initial paying agents, initially designated by ACE
INA for the ACE INA debt securitieswhich will be named in the relatedapplicable prospectus supplement. ACE INAsupplement, and may, at any time, designate additional paying agents or rescind the designation of any paying agent or approve a change in the office through which any paying agent acts, except thatacts. However, ACE INA and ACE will beis required to maintain a paying agent in each place where the principal of, any premium or interest on or any additional amounts with respect to the ACE INA debt securities are payable. (Sections 3.7 and 10.2)
        Unless otherwise providedset forth in the relatedapplicable prospectus supplement, you may present the ACE INA debt securities may be presented for transfer, (dulyduly endorsed or accompanied by a written instrument of transfer if so required by ACE INA or the security registrar)registrar, or exchangedexchange for other ACE INA debt securities of the same series (containingcontaining identical terms and provisions, in any authorized denominations, and of a like aggregate principal amount)amount, in each case at the office or agency maintained by ACE INA for such purposes (initiallythese purposes. This office will initially be the corporate trust office of the trustee). Suchtrustee. Any transfer or exchange will be made without service charge, butalthough ACE INA may require payment of a sum sufficient to cover any tax or other governmental charge and any other expenses then payable. ACE INA willis not be
required to (1) to:
        ACE INA has appointed the trustee as security registrar. AnyThe security registrar and any transfer agent (in addition to the
security registrar) initially designated by ACE INA for any ACE INA debt
securities will be named in the relatedapplicable prospectus supplement. At any time, ACE INA may at
any time designate additional transfer agents or rescind the designation of any transfer agent or approve a change in the office through which any transfer agent acts, except thatacts. However, ACE INA and ACE will beis required to maintain a transfer agent in each place where the principal of, any premium or interest on or any additional amounts with respect to the ACE INA debt securities are payable. (Section 10.2)
        Unless otherwise providedset forth in the relatedapplicable prospectus supplement, we will only issue the ACE INA debt securities will be issued only in fully registered form without coupons in minimum denominations of $1,000 and any integral multiple thereof.of $1,000. (Section 3.2) TheIf the ACE INA debt securities may be represented in whole or in part by one
or more global ACE INA debt securities registered in the name of a depositary
or its nominee and, if so represented, interests in such global ACE INA debt
security will be shown on, and transfers thereof will be effected only through,
records maintained by the designated depositary and its participants as
described below. Where ACE INA debt securities of any series are issued in bearer form, the specialany restrictions and considerations, including special
offering restrictions and special United StatesU.S. Federal income tax considerations applicable to, such ACE INA debt securities and to payment on and transfer and exchange of, such ACE INA debtthese securities, will be described in the relatedapplicable prospectus supplement.
        The ACE INA debt securities may be issued as original issue discount securities, (bearingwhich means that they will bear no interest or bearingbear interest at a rate which, at the time of issuance, is below market rates) torates. ACE INA debt securities issued as original issue discount securities will be sold at a substantial discount below their principal amount. Special United StatesU.S. Federal income tax and other considerations applicable to original issue discount securities will be described in the relatedapplicable prospectus supplement.


        If the purchase price, of any ACE INA debt securities is payable in one or
more foreign currencies or currency units or if any ACE INA debt securities are
denominated in one or more foreign currencies or currency units or if the principal of, or any premium or interest on or any additional amounts with respect to, any ACE INA debt securities is payable, or if any ACE INA debt securities are denominated, in one or more foreign currencies or currency units, the restrictions, elections, certain United
StatesU.S. Federal income tax considerations, specific terms and other information with respect to such ACE INA debt securities and such foreign currency or
currency units will be set forth in the relatedapplicable prospectus supplement.

                                      39



   ACE INA will comply with Section 14(e) under the Exchange Act, and any other
tender offer rules under the Exchange Act which may then be applicable, in
connection with any obligation of ACE INA to purchase ACE INA debt securities
at the option of the holders. Any such obligation applicable to a series of ACE
INA debt securities will be described
        Unless otherwise set forth in the relatedapplicable prospectus supplement.

   Unless otherwise described in a prospectus supplement, relating to any ACE
INA debt securities, other than as described below under "--Covenants"—Covenants Applicable to ACE INA Senior Debt Securities--LimitationSecurities—Limitation on Liens on Stock of Designated Subsidiaries," the ACE INA indentures do not contain any provisions that would limit the ability of ACE INA or ACE to incur indebtedness or that would afford holders of ACE INA debt securities protection in the event of a sudden and significant decline in the credit quality of ACE INA or ACE or a takeover, recapitalization or highly leveraged or similar transaction involving ACE INA or ACE. Accordingly, ACE INA or ACE could in the future enter into transactions that could increase the amount of its outstanding indebtedness outstanding at that time or otherwisecould affect ACE INA's or ACE'sits respective capital structure or credit rating.
You should refer to the prospectus supplement relating to a particular series
of ACE INA debt securities for information regarding any deletions from,
modifications of or additions to the Events of Defaults described below or
covenants of ACE INA or ACE contained in the ACE INA indentures, including any
addition of a covenant or other provisions providing event risk or similar
protection.


ACE Guarantee

   ACE
        We will fully and unconditionally guarantee all payments with respect toon the ACE INA debt securities. Unless otherwise providedset forth in athe applicable prospectus supplement, the ACEour guarantee of the ACE INA senior debt securities will be an unsecured obligation of ACE and will rank equally with all of its other unsecured and unsubordinated indebtedness (including the ACE senior debt
securities). The ACEindebtedness. Our guarantee of the ACE INA subordinated debt securities of
any particular series will be an unsecured obligation of ACE, subordinated in right of payment to the prior payment in full of all ACE Senior Indebtedness
(which term includes ACE senior debt securities and the ACE guarantee of the
ACE INA senior debt securities) with respect to such series as described below
under "Subordination of ACE Guarantee" and in the related prospectus
supplement. The ACEindebtedness. Our guarantee of the ACE INA subordinated debt securities of
any series issued to an ACE Trust will rank equally with the ACEour guarantee of each other series of ACE subordinated debt securities issued to other ACE Trusts.
        Since ACE iswe are a holding company, itsour rights and the rights of itsour creditors, (including the holdersincluding you as a holder of the ACE INA debt securities who are creditorswould be a creditor of ACEours by virtue of the ACE guarantee)our guarantee, and shareholders to participate in any distribution of the assets of any subsidiary upon suchthe subsidiary's liquidation or reorganization or otherwise would be subject to prior claims of the subsidiary's creditors, except to the extent that ACEwe may itself be a creditor with recognized claims againstof the subsidiary. The right of our creditors, of ACE
(including the holders of the ACE INA debt securities who are creditors of ACE
by virtue of the ACE guarantee)including you, to participate in the distribution of the stock owned by ACEus in certainsome of itsour subsidiaries, including ACE'sour insurance subsidiaries, may also be subject to approval by certain insurance regulatory authorities having jurisdiction over suchthe subsidiaries.
Conversion and Exchange
        The terms, if any, on which ACE INA debt securities are convertible into or exchangeable for, either mandatorily, at your option or at ACE INA's option, for ordinary shares of ACE, preferred shares of ACE or other securities, whether or not issued by ACE, property or cash, or a combination of any of these, will be set forth in the applicable prospectus supplement.
Payments of Additional Amounts
        We will make all payments of principal of and premium, if any, interest and
any other amounts on or in respect of, the ACE INA debt securities of any
series without withholding or deduction at source for, or on account of any present or future taxes fees, duties, assessments or governmental charges of
whatever nature imposed or levied by or on behalf of the Cayman Islands or Bermuda, each referred to in this prospectus as a taxing jurisdiction, or any
political subdivision or taxing authority thereof or therein, unless such
taxes, fees, duties, assessments or governmental chargeswe are required to be
withhelddo so by applicable law or deducted by (x) the laws (or any regulations or rulings promulgated
thereunder) of a taxing jurisdiction or any political subdivision or taxing
authority thereof or therein or (y) an official position regarding the
application, administration, interpretation or enforcement of any such laws,
regulations or rulings (including, without limitation, a holding by a court of
competent jurisdiction or by a taxing authority in a taxing jurisdiction or any
political subdivision thereof).regulation.
        If a withholding or deduction at source iswe are required ACEto withhold amounts, we will, subject to certainthe limitations and exceptions described below, pay to the holder of any such ACE INA debt security suchyou additional amounts as may be necessary so that

                                      40

 every net payment of principal, premium, if any, interest or any other amount
made to such holder,you, after the withholding or deduction, will not be less than
the same amount provided for in suchthe ACE INA debt security and the applicable ACE INA indenture to be then due and payable.

   ACEindenture.

        We will not be required to pay any additional amounts for or on account of:

      1.  
        In addition, ACEwe will not pay additional amounts with respect to any payment
of principal of, or premium, if any, interest or any other amounts on, any such
ACE INA debt security to any holder who isyou are a fiduciary or partnership or other than the sole beneficial owner of suchthe ACE INA debt security toif the extent such
payment would be required by the laws of the relevant taxing jurisdiction (or
any political subdivision or relevant taxing authority thereof or therein) to
be included in the income for tax purposes of a beneficiary or partner or settlor with respect to such fiduciary or a member of such partnership or a
beneficial owner who would not have been entitled to suchthe additional amounts had it been the holder of the ACE INA debt security. (Section 10.4)

Conversion and Exchange

   The terms, if any, on which ACE INA debt securities of any series are
convertible into or exchangeable for other securities, whether or not issued by
ACE INA, property or cash, or a combination of any of the foregoing, will be
set forth in the related prospectus supplement. Such terms may include
provisions for conversion or exchange, either mandatory, at the option of the
holder, or at the option of ACE INA, in which the securities, property or cash
to be received by the holders of the ACE INA debt securities would be
calculated according to the factors and at such time as described in the
related prospectus supplement.


Global Securities
        The ACE INA debt securities of a series may be issued, in whole or in part, in the form of one or more global ACE INA debt securities that will be deposited with, or on behalf of, a depositary identified in the applicable prospectus supplement relating to such series.

   The specific termsand registered in the name of the depositary arrangement with respect to a series ofor its nominee. Interests in any global ACE INA debt securitiessecurity will be described in the prospectus supplement relating
to such series. ACE INA anticipates that the following provisions will apply to
all depositary arrangements.


                                      41



   Upon the issuance of a global security, the depositary for such global
security or its nominee will credit,shown on, its book-entry registration and transfer system, the respective principal amountstransfers of the ACE INA debt securities represented by such global security. Such accounts will be
designated by the underwriters or agents with respect to such ACE INA debt
securities or by ACE INA if such ACE INA debt securities are offered and sold
directly by ACE INA. Ownership of beneficial interests in a global security
will be limited to persons that may hold interests through participants.
Ownership of beneficial interests in such global security will be shown on, and
the transfer of that ownership will be effected only through, records maintained by the depositary orand its nominee (with respect to interestsparticipants as described below.
        The specific terms of
participants) and on the records of participants (with respect to interests of
persons other than participants). The laws of some states require that certain
purchasers of securities take physical delivery of such securities in
definitive form. Such limits and such laws may impair the ability to transfer
beneficial interests in a global security.

   So long as the depositary for a global security, or its nominee, is the
registered owner of such global security, such depositary or such nominee, as
the case may be,arrangement will be considered the sole owner or holder of the ACE INA
debt securities represented by such global security for all purposes underdescribed in the applicable ACE INA indenture. Except as described below, owners of beneficial
interests in a global security will not be entitled to have ACE INA debt
securities of the series represented by such global security registered in
their names and will not receive or be entitled to receive physical delivery of
ACE INA debt securities of that series in definitive form.

   Principal of, any premium and interest on, and any additional amounts with
respect to, ACE INA debt securities registered in the name of a depositary or
its nominee will be made to the depositary or its nominee, as the case may be,
as the registered owner of the global security representing such ACE INA debt
securities. None of ACE INA, ACE, the trustee, any paying agent or the security
registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of the global security for such ACE INA debt securities or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.

   ACE INA expects that the depositary for a series of ACE INA debt securities
or its nominee, upon receipt of any payment with respect to such ACE INA debt
securities, will credit immediately participants' accounts with payments in
amounts proportionate to their respective beneficial interest in the principal
amount of the global security for such ACE INA debt securities as shown on the
records of such depositary or its nominee. ACE INA also expects that payments
by participants to owners of beneficial interests in such global security held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts
of customers registered in street name, and will be the responsibility of such
participants.

   The ACE INA indentures provide that if (1) the depositary for a series of
ACE INA debt securities notifies ACE INA that it is unwilling or unable to
continue as depositary or if such depositary ceases to be eligible under the
applicable ACE INA Indenture and a successor depositary is not appointed by ACE
INA within 90 days of written notice, (2) ACE INA determines that ACE INA debt
securities of a particular series will no longer be represented by global
securities and executes and delivers to the trustee a company order to such
effect or (3) an Event of Default with respect to a series of ACE INA debt
securities will have occurred and be continuing, the global securities will be
exchanged for ACE INA debt securities of such series in definitive form of like
tenor and of an equal aggregate principal amount, in authorized denominations.
Such definitive ACE INA debt securities will be registered in such name or
names as the depositary shall instruct the trustee. (Section 3.5) It is
expected that such instructions may be based upon directions received by the
depositary from participants with respect to ownership of beneficial interests
in global securities.

prospectus supplement.
Option to Extend Interest Payment Date
        If providedand as set forth in the relatedapplicable prospectus supplement, ACE INA will have the right, at any time and from time to time during the term of any series of ACE INA subordinated debt securities issued to an ACE Trust, to defer payment of interest for sucha number of consecutive interest payment periods, as may be
specifiedwhich we refer to in the relatedthis prospectus supplement each, referred to as an Extension Period, subject to the terms, conditions and covenants,

                                      42



if any, specified in such prospectus supplement, provided that such Extension
Periodextension period. However, no extension period may not extend beyond the stated maturity of such series ofthe ACE INA subordinated debt securities. Certain United StatesU.S. Federal income tax consequences and specialother considerations applicable to suchthe ACE INA subordinated debt securities will be described in the relatedapplicable prospectus supplement. (Section 3.11 of the ACE INA subordinated indenture)

Option to Extend Maturity Date

   If provided in the related prospectus supplement, ACE INA will have the
right to (x) change the stated maturity of the principal of the ACE INA
subordinated debt securities of any series issued to an ACE Trust upon the
liquidation of that ACE Trust and the exchange of the ACE INA subordinated debt
securities for the preferred securities of that ACE Trust or (y) extend the
stated maturity of the principal of the ACE INA subordinated debt securities of
any series, provided that (1) neither ACE INA nor ACE is in bankruptcy,
otherwise insolvent or in liquidation; (2) neither ACE INA nor ACE has
defaulted on any payment on such ACE INA subordinated debt securities or under
ACE's guarantee in respect thereof, as the case may be, and no deferred
interest payments have accrued, (3) the applicable ACE Trust is not in arrears
on payments of distributions on its preferred securities and no deferred
distributions have accumulated, (4) the ACE INA subordinated debt securities of
such series are rated investment grade by Standard & Poor's Ratings Services,
Moody's Investors Service, Inc. or another nationally recognized statistical
rating organization and (5) the extended stated maturity is no later than the
49th anniversary of the initial issuance of the preferred securities of the
applicable ACE Trust. If ACE INA exercises its right to liquidate the
applicable ACE Trust and exchange the ACE INA subordinated debt securities for
the preferred securities of the ACE Trust as described above, any changed
stated maturity of the principal of the ACE INA subordinated debt securities
shall be no earlier than the date that is five years after the initial issue
date of the preferred securities and no later than the date 30 years (plus an
extended term of up to an additional 19 years if the conditions described above
are satisfied) after the initial issue date of the preferred securities of the
applicable ACE Trust. (Section 3.14 of the ACE INA subordinated indenture)

Redemption

   Except as otherwise provided in the related prospectus supplement, in the
case of any series of ACE INA subordinated debt securities issued to an ACE
Trust, if an Investment Company Event or a Tax Event, each, referred to as a
Special Event, shall occur and be continuing, ACE INA may, at its option,
redeem such series of ACE INA subordinated debt securities, in whole but not in
part, at any time within 90 days of the occurrence of the Special Event, at a
redemption price equal to 100% of the principal amount of such ACE INA
subordinated debt securities then outstanding plus accrued and unpaid interest
to the date fixed for redemption. (Section 11.8 of the ACE INA subordinated
indenture)

   For purposes of the ACE INA subordinated indenture, "Investment Company
Event" means, in respect of an ACE Trust, the receipt by such ACE Trust of an
opinion of independent counsel experienced in such matters to the effect that,
as a result of the occurrence of a change in law or regulation or a change in
the interpretation or application of law or regulation by any legislative body,
court or governmental agency or regulatory authority, such ACE Trust is or will
be considered an investment company that is required to be registered under the
Investment Company Act, which change becomes effective on or after the date of
original issuance of the preferred securities of such ACE Trust. (Section 1.1
of the ACE INA subordinated indenture)

   "Tax Event" means, in respect of an ACE Trust, the receipt by such ACE Trust
or ACE INA of an opinion of independent counsel experienced in such matters to
the effect that, as a result of any amendment to, or change (including any
announced prospective change) in, the laws (or any regulation thereunder) of
the United States or any political subdivision or taxing authority thereof or
therein, or as a result of any official administrative pronouncement or
judicial decision interpreting or applying such laws or regulations, which
amendment or change is effective or which pronouncement or decision is
announced on or after the date of original issuance of the preferred securities
of such ACE Trust, there is more than an insubstantial risk that (i) such ACE
Trust is, or will be within 90 days of the date of such opinion, subject to
United States Federal income tax with respect to income received or accrued on
the corresponding series of ACE INA subordinated debt securities, (ii) interest
payable by ACE INA on such ACE INA subordinated debt securities is not, or
within 90 days of the date of such opinion will not be, deductible by ACE INA,
in whole or in part, for United States Federal income tax purposes

                                      43



or (iii) such ACE Trust is, or will be within 90 days of the date of such
opinion, subject to more than a de minimis amount of other taxes, duties or
other governmental charges. (Section 1.1 of the ACE INA subordinated indenture)

   Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of ACE INA subordinated debt
securities to be redeemed at its registered address. Unless ACE INA and ACE, as
guarantor, default in payment of the redemption price, on and after the
redemption date, interest will cease to accrue on the ACE INA subordinated debt
securities or portions thereof called for redemption.




Covenants Applicable to ACE INA Senior Debt Securities
Limitation on Liens on Stock of Designated Subsidiaries
        Under the ACE INA senior indenture, each of ACE INA and ACE will covenant that, so long as any ACE INA senior debt securities are outstanding, it will not, nor will it permit any of its Subsidiariessubsidiary to create, incur, assume, incur, guarantee or otherwise permit to exist any Indebtednessindebtedness secured by any mortgage, pledge, lien, security interest or other encumbrance uponon any shares of capital stock of any Designated Subsidiary (whether such shares are now
owned or hereafter acquired) without effectively providingdesignated subsidiary, unless ACE INA and ACE concurrently provide that the ACE INA senior debt securities (and,and, if ACE INA and ACE so elect, any other Indebtednessindebtedness of ACE INA that is not subordinate to the ACE INA senior debt securities and with respect to which the governing instruments require, or pursuant to which the ACE INA is otherwise obligated, to provide such security)security, will be secured equally and ratably with such Indebtednessthe indebtedness for at least the time period suchthe other Indebtednessindebtedness is so secured. (Section 10.5 of the ACE INA senior indenture)

   For purposes of the ACE INA senior indenture, "capital stock" of any Person
        The term "designated subsidiary" means any and all shares, interests, rights to purchase, warrants, options,
participationspresent or other equivalentsfuture consolidated subsidiary of or interests in (however designated)
equityACE, the consolidated net worth of such Person, including preferred stock, but excluding any debt
securities convertible into such equity.which constitutes at least 5% of ACE's consolidated net worth. (Section 1.1 of the ACE INA senior indenture)

   The term "Designated Subsidiary" means any present or future consolidated
Subsidiary of ACE, the Consolidated Net Worth of which constitutes at least 5%
of ACE's Consolidated Net Worth. (Section 1.1 of the ACE INA senior indenture)
As of April 30, 2002, ACE's Designated Subsidiaries were ACE Bermuda, Tempest,
ACE INA and ACE USA..
        For purposes of the ACE INA indentures, the term "Indebtedness""indebtedness" means, with respect to any Person, (1) person:
Limitations on Disposition of Stock of Designated Subsidiaries
        The ACE INA senior indenture also provides that, so long as any ACE INA senior debt securities are outstanding and except in a transaction otherwise governed by such indenture,the ACE INA indentures, neither ACE INA nor ACE will issue, sell, assign, transfer or otherwise dispose of any shares of, securities


convertible into, or warrants, rights or options to subscribe for or purchase shares of, capital stock, (otherother than preferred stock having no voting rights, of any kind) of any
Designated Subsidiary, anddesignated subsidiary. Similarly, ACE INA will not permit any Designated Subsidiarydesignated subsidiary to issue, (otherother than to ACE INA or ACE) any shares (other than director's qualifying
shares)ACE, these types of or securities, convertible into, or warrants, rights or options, to
subscribe for or purchaseother than director's qualifying shares of, capital stock (other thanand preferred stock having no voting rights, of any kind) of any Designated Subsidiary,designated subsidiary, if, after giving effect to any suchthe transaction and the issuance of the maximum number of shares issuable upon the conversion or exercise of all suchthe convertible securities, warrants, rights or options, ACE would own, directly or indirectly, less than 80% of the shares of capital stock of such Designated Subsidiary
(otherthe designated subsidiary, other than preferred stock having no voting rights of any kind); provided,
however, that (1) any issuance, sale, assignment,rights.
        However, ACE INA may issue, sell, assign, transfer or other disposition
permitted by ACE INA or ACE may only be made forotherwise dispose of securities if the consideration is at least a fair market value consideration as determined by theACE INA's board of directors of ACE INA or ACE, as the
case may be, pursuant to a resolution adopted in good faith and (2) the
foregoing shall not prohibit any such issuance or disposition of securities if required by any law or any regulation or order of any governmental or insurance
regulatory authority. Notwithstanding the foregoing, (1)regulation. ACE INA or ACE, as the case may be, may also merge or consolidate any Designated Subsidiarydesignated subsidiary into or with another direct or indirect Subsidiarysubsidiary of ACE, the shares of capital stock of which ACE owns at least 80%, and (2) ACE INA or, ACE, as the case may be, may, subject to the provisions described under "--Consolidation,"—Consolidation, Amalgamation, Merger and Sale of Assets" below, sell, assign, transfer or otherwise dispose of the entire capital stock of any Designated Subsidiarydesignated subsidiary at one time forif the consideration is at least a fair market value consideration as determined by the board of directors
of ACE INAINA's or ACE, as the case may be, pursuant to a resolution adopted in good
faith.ACE's board. (Section 10.6 of the ACE INA senior indenture)
Covenants Applicable to ACE INA Subordinated Debt Securities Issued to an ACE Trust
        Each of ACE INA and ACE will also covenant, as to each series of ACE INA subordinated debt securities issued to an ACE Trust in connection with the issuance of preferred securities and common securities by that ACE Trust, that it will not, and will not permit any of its Subsidiaries to, (1) subsidiaries to:
        if at such time (i) there shall have
occurred that time:

        If ACE INA subordinated debt securities are issued to an ACE Trust in connection with the issuance of preferred securities and common securities of suchthe ACE Trust, for so long as suchthe ACE INA subordinated debt securities remain outstanding, ACE INA will also covenant (1) covenant:

Consolidation, Amalgamation, Merger and Sale of Assets
        Each ACE INA indenture provides that ACE INA and ACE may not (1) not:
        unless:

Events of Default
        Each of the following events will constitute an Eventevent of Defaultdefault under the
applicableeach ACE INA indenture, with respect to any series of ACE INA debt
securities issued thereunder (whatever the reason for such Event of

                                      46



Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

   (1) body:

        If an Eventevent of Defaultdefault with respect to the ACE INA debt securities of any series, (otherother than an Eventevents of Default described in (7) of the preceding
paragraph)bankruptcy, insolvency or reorganization, occurs and is continuing, either the trustee or the holders of not less than 25% in principal amount of the outstanding ACE INA debt securities of suchthe series by written notice as provided in the applicable ACE INA indenture may declare the principal amount, (or suchor a lesser amount as may be provided for in the ACE INA debt securities, of such series) of all outstanding ACE INA debt securities of suchthe series to be immediately due and payable immediately.by written notice. In the case of an Eventevent of Defaultdefault with respect to a series of ACE INA subordinated debt securities issued to an ACE Trust, if the trustee or suchthe holders fail to declare suchthe principal amount, (oror lesser amount)amount, to be due and payable immediately, the holders of at least 25% in liquidation amount of the outstanding preferred securities of the ACE Trust may do so by written notice
as provided in the ACE INA subordinated indenture.notice. At any time after a declaration of acceleration has been made, but before a judgment or decree for payment of money has been obtained by the trustee, and subject to applicable
law and certain other provisions of the applicable ACE INA indenture,generally, the holders of not less than a majority in principal amount of the outstanding ACE INA debt securities of suchthe series may under certain circumstances, rescind and annul suchthe declaration of acceleration. In the case of a series of ACE INA subordinated debt securities issued to an ACE Trust, if suchthe holders fail to rescind and annul suchthe declaration, the holders of a 47

majority in

liquidation amount of the outstanding preferred securities of suchthe ACE Trust may, subject to satisfaction of certainspecified conditions, rescind and annul suchthe declaration by written notice as provided in the ACE INA subordinated
indenture. An Eventnotice. Any event of Default described in (7) of the preceding paragraph
shallbankruptcy, insolvency or reorganization will cause the principal amount and accrued interest, (or suchor the lesser amount as provided for in the ACE INA debt securities, of such series) to become immediately due and payable without any declaration or other act by the trustee or any holder. (Section 5.2)
        Each ACE INA indenture provides that, within 90 days after the occurrence of any event which is, or after notice or lapse of time or both would become, an Eventevent of Default with respect to the ACE INA debt securities of any series,
each referred to in this prospecuts as a default the trustee must transmit, in
the manner set forth in such ACE INA indenture, notice of suchthe default to the
holderseach holder of the ACE INA debt securities of such series unless suchthe default has been cured or waived; provided, however, thatwaived. However, except in the case of a default in the payment of principal of, or premium if any, or interest, if any, on or additional amounts or any sinking fund or purchase fund installment with respect to any ACE INA debt security, of such series, the trustee may withhold suchthis notice if and so long as the board of directors, the executive committee or a trust committee of directors and/or responsible officers of the trustee determine in good faith determine that the withholding of suchthe notice is in the best interest of the holders of ACE INA debt securities of such series; and
provided, further, that in the case of any default of the character described
in (5) of the second preceding paragraph, no such notice to holders will be
given until at least 30 days after the default occurs.holders. (Section 6.2)
        If an Eventevent of Defaultdefault occurs and is continuing with respect to the ACE INA debt securities of any series, the trustee may, in its discretion, proceed to protect and enforce its rights and the rights of the holders of ACE INA debt securities of such series by all appropriate judicial proceedings. (Section 5.3) Each ACE INA indenture provides that, subject to the duty of the trustee during any default to act with the required standard of care, the trustee will be under no obligation to exercise any of its rights or powers under suchthe ACE INA indenture at the request or direction of any of the holders, of ACE INA debt
securities, unless suchthe holders shall have offered to the trustee reasonable indemnity. (Section 6.1) Subject to suchthese indemnification provisions, for the indemnification of
the trustee, and subject to applicable law and certain other provisions of the
applicable ACE INA indenture, the holders of a majority in principal amount of the outstanding ACE INA debt securities of any series will generally have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee, or exercising any trust or power conferred on the trustee, with respect to the ACE INA debt securities of suchthe series. (Section 5.12)
        If an Eventevent of Defaultdefault with respect to a series of ACE INA subordinated debt securities issued to an ACE Trust has occurred and is continuing and suchthis event is attributable to a default in the payment of principal of, any premium or interest on or additional amounts with respect to the related ACE INA subordinated debt securities on the date suchthe principal, premium, interest or additional amounts are otherwise payable, a holder of preferred securities of suchthe ACE Trust may institute directly a legal proceeding against ACE INA or ACE, (pursuantpursuant to the ACE guarantee)guarantee, for enforcement of payment to suchthe holder of the principal of, any premium and interest on and additional amounts with respect to suchthe related ACE INA subordinated debt securities having a principal amount equal to the liquidation amount of the holder's related preferred securities, of such holder (a "Direct Action").referred to in this prospectus as a direct action. (Section 5.8 of the ACE INA subordinated indenture) ACE INA and ACE may not amend the ACE INA subordinated indenture to remove the foregoingthis right to bring a Direct Actiondirect action without the prior consent of the holders of all of the outstanding preferred securities of suchthe ACE Trust. (Section 9.2 of the ACE INA subordinated indenture) If the right to bring a Direct Actiondirect action is removed, the applicable ACE Trust may become subject to the reporting obligations under the Exchange Act. Each of ACE INA and ACE will have the right under the ACE INA subordinated indenture to set-off any payment made to sucha holder of preferred securities by ACE INA or ACE, as the case may be, in connection with a Direct Action.direct action. (Section 3.12 of the ACE INA subordinated indenture)
        The holders of the preferred securities will not be able to exercise directly any remedies other than those set forth in the preceding paragraph available to the holders of the related ACE INA subordinated debt securities.

                                      48




Modification and Waiver
        ACE INA, ACE and the trustee may modify or amend either ACE INA indenture with the consent of the holders of not less than a majority in principal amount of the outstanding ACE INA debt securities of each series affected thereby;
provided, however, that no suchby the modification or amendment, may,so long as the modification or amendment does not, without the consent of the holder of each outstanding ACE INA debt security affected thereby,

  .   holder:
        In addition, no supplemental indenture may, directly or indirectly, modify or eliminate the subordination provisions of the ACE INA subordinated indenture in any manner which might


terminate or impair the subordination of the ACE INA subordinated debt securities of any series to Senior Indebtedness with respect
to such seriessenior indebtedness or the subordination of the related ACE guarantee with respect to the
ACE INA subordinated debt securities of any series to ACE Senior Indebtedness
with respect to such series,senior indebtedness, without the prior written consent of the holders of such Senior Indebtednessthe senior indebtedness or suchthe ACE Senior Indebtedness,senior indebtedness, respectively. (Section 9.7 of the ACE INA subordinated indenture)
        ACE INA, ACE and the trustee may modify or amend either ACE INA indenture and the ACE INA debt securities of any series without the consent of any holder in order to, among other things:

  .   

        The holders of at least a majority in principal amount of the outstanding ACE INA debt securities of any series may, on behalf of the holders of all ACE INA debt securities of that series, waive compliance by ACE INA and ACE with certainspecified covenants of the applicable ACE INA indenture. (Section 10.8 of the ACE INA senior indenture; Section 10.6 of the ACE INA subordinated indenture) The holders of not less than a majority in principal amount of the outstanding ACE INA debt securities of any series on behalf of the holders of all ACE INA debt securities of that series and, in the case of any ACE INA subordinated debt securities issued to an ACE Trust, the holders of not less than a majority in liquidation amount of the outstanding preferred securities of the ACE Trust, may waive any past default and its consequences under the applicable ACE INA
indenture with respect to the ACE INA debt securities of that series, except a default (1) default:
        Under each ACE INA indenture, each of ACE INA and ACE is required tomust annually furnish the trustee annually a statement as toregarding its performance of certain of itsspecified obligations under that ACE INA indenture and as to any default in such
performance.its performance under


the applicable ACE INA indenture. Each of ACE INA and ACE is also required to deliver to the trustee, within five days after its occurrence, thereof, written notice of any Eventevent of Default,default, or any event which after notice or lapse of time or both would constitute an Eventevent of Default,default, resulting from the failure to perform or breach of any covenant or warranty contained in the applicable ACE INA indenture or the ACE INA debt securities of any series. (Sections 10.9 and 10.10 of the ACE INA senior indenture; Sections 10.7 and 10.8 of the ACE INA subordinated indenture)

                                      50


Discharge, Defeasance and Covenant Defeasance
        ACE INA or ACE may discharge certaintheir payment obligations to holders of any series of
ACE INA debt securities that have not already been delivered to the trustee for
cancellation and that either have become due and payable or will become due and
payable within one year (or scheduled for redemption within one year) by
depositing with the trustee, in trust, funds in U.S. dollars or in the Foreign
Currency in which such ACE INA debt securities are payable in an amount
sufficient to pay the entire indebtedness on such ACE INA debt securities with
respect to principal and any premium, interest and additional amounts to the
date of such deposit (if such ACE INA debt securities have become due and
payable) or to the maturity thereof, as the case may be. (Section 4.1)

   Each ACE INA indenture provides that, unless the provisions of Section 4.2
thereof are made inapplicable to the ACE INA debt securities, of or within any
series pursuantwhich we refer to Section 3.1 thereof, ACE INA may elect either (1) to defease
and discharge itself and ACE from any and all obligations with respect to such
ACE INA debt securities (except for, among other things, the obligation of ACE
to pay additional amounts upon the occurrence of certain events of taxation,
assessment or governmental charge with respect to payments on such ACE INA debt
securities and other obligations to register the transfer or exchange of such
ACE INA debt securities, to replace temporary or mutilated, destroyed, lost or
stolen ACE INA debt securities, to maintain an office or agency with respect to
such ACE INA debt securities and to hold moneys for payment in trust), referred
to in this prospectus as defeasance, or (2)elect to release itself and ACEbe discharged from their respective obligationscomplying with respect to such ACE INA debt securities under
certainthe covenants as described in the related prospectus supplement, and any
omission to comply with suchACE NA indentures, except for certain ministerial obligations, shall not constitute a defaultlike registering transfers or an
Eventexchanges of Default with respect to such ACE INA debt securities, referred to in
this prospectus as covenant defeasance,. Defeasance or covenant defeasance, as
the case may be, shall be conditioned upon the irrevocable deposit by ACE INA
or ACE with the Trustee, in trust, of an amount in U.S. dollars or in the
Foreign Currency in which such ACE INA debt securities are payable at stated
maturity, or Government Obligations (as defined below), or both, applicable to
such ACE INA debt securities, which through the scheduled payment of principal
and interest in accordance with their terms will provide money in an amount
sufficientwe refer to pay the principal of, any premium and interest on, and any
additional amounts with respect to, suchas covenant defeasance.
        ACE INA debt securities on the
scheduled due dates. (Section 4.2)

   Such a trustor ACE may only be establisheddo this if, among other things, (1) 
Subordination of ACE INA Subordinated Debt Securities
        The ACE INA subordinated debt securities of each series will to the extent
set forth in the ACE INA subordinated indenture,generally be subordinate in right of payment to the prior payment in full of all Senior Indebtedness with respect to
such series.senior indebtedness. (Section 16.1 of the ACE INA subordinated indenture) Upon any payment or distribution of assets of ACE INA of any kind or character, whether in cash, property or securities, to creditors 52

upon any dissolution, winding-up, liquidation or reorganization of ACE INA, whether voluntary or involuntary, or in bankruptcy, insolvency, receivership or other proceedings, all amounts due upon all Senior Indebtedness with respect to
the ACE INA subordinated debt securities of any seriessenior indebtedness will first be paid in full, or payment thereof provided for in money in accordance with its terms, before the holders of ACE INA subordinated debt securities of suchthat series are entitled to receive or retain any payment on account of principal of, or any premium or interest on, or any additional amounts with respect to, the ACE INA subordinated debt securities of such series, and tosecurities. This means that end the holders of such Senior Indebtedness shallthe senior indebtedness will be entitled to receive for application to the
payment thereof, any payment or distribution of any kind or character, whether
in cash, property or securities, including any such payment or distribution, which may be payable or deliverable by reason of the payment of any other Indebtednessindebtedness of ACE INA being subordinated to the payment of ACE INA subordinated debt securities, of such series, which may be payable or deliverable in respect of the ACE INA subordinated debt securities of such
series upon any such dissolution, winding-up, liquidation or reorganization or in any such bankruptcy, insolvency, receivership or other proceeding. (Section 16.3 of the ACE INA subordinated indenture)
        By reason of suchthis subordination, in the event of liquidation or insolvency of ACE INA, holders of Senior Indebtedness with respect to the ACE INA
subordinated debt securities of any seriessenior indebtedness and holders of other obligations of ACE INA that are not subordinated to such Senior Indebtednessthe


senior indebtedness may recover more, ratably, than the holders of the ACE INA subordinated debt securities of such
series.securities.
        Subject to the payment in full of all Senior Indebtedness with respect to
the ACE INA subordinated debt securities of any series,senior indebtedness, the rights of the holders of the ACE INA subordinated debt securities of such series will be subrogated to the rights of the holders of such Senior Indebtednessthe senior indebtedness to receive payments or distributions of cash, property or securities of ACE INA applicable to such Senior Indebtednessthe senior indebtedness until the principal of, any premium and interest on, and any additional amounts with respect to, the ACE INA subordinated debt securities of such series have been paid in full. (Section 16.4 of the ACE INA subordinated indenture)
        No payment of principal (includingof, including redemption and sinking fund payments) ofpayments, or any premium or interest on or any additional amounts with respect to the ACE INA subordinated debt securities of any series may be made by ACE INA (1) if
if:
        The ACE INA subordinated indenture does not limit or prohibit ACE INA from incurring additional Senior Indebtedness,senior indebtedness, which may include Indebtednessindebtedness that is senior to the ACE INA subordinated debt securities, of any series, but subordinate to other obligations of ACE INA. The ACE INA senior debt securities will constitute Senior Indebtednesssenior indebtedness with respect to the ACE INA subordinated debt securities of each series under the ACE INA subordinated indenture.securities.
        The term "Senior Indebtedness""senior indebtedness" means, with respect to the ACE INA subordinated debt securities of any particular series, all Indebtednessindebtedness of ACE INA outstanding at any time, except (1) except:

        Senior Indebtednessindebtedness with respect to the ACE INA subordinated debt securities of any particular
series shall continue to be Senior Indebtedness with respect to the ACE INA
subordinated debt securities of such series and be entitled to the benefits of the subordination provisions irrespective of any amendment, modification or

waiver of any term of such Senior Indebtedness.the senior indebtedness. (Sections 1.1 and 16.8 of the ACE INA subordinated indenture)
        The ACE INA subordinated indenture provides that the foregoing subordination provisions, insofar as they relate to any particular series of ACE INA subordinated debt securities, may be changed prior to such issuance. Any suchissuance of the applicable ACE INA subordinated debt securities, which change would be described in the relatedapplicable prospectus supplement.
Subordination of ACE Guarantee of ACE INA Subordinated Debt Securities
        The ACE guarantee of ACE INA subordinated debt securities of each series
will to the extent set forth in the ACE INA subordinated indenture,generally be subordinate in right of payment to the prior payment in full of all ACE Senior
Indebtedness with respect to such series.senior indebtedness. (Section 18.1 of the ACE INA subordinated indenture) Upon any payment or distribution of assets of ACE of any kind or character, whether in cash, property or securities, to creditors upon any dissolution, winding-up, liquidation or reorganization of ACE, whether voluntary or involuntary, or in bankruptcy, insolvency, receivership or other proceedings, all amounts due upon all ACE Senior Indebtedness with respect to
the ACE INA subordinated debt securities of any seriessenior indebtedness will first be paid in full, or payment thereofof the ACE senior indebtedness provided for in money in accordance with its terms, before the holders of ACE INA subordinated debt securities of such series are entitled to receive or retain any payment from ACE on account of principal of, or any premium or interest on, or any additional amounts with respect to, the ACE INA subordinated debt securities of such series, and tosecurities. This means that end the holders of such ACE Senior Indebtednesssenior indebtedness shall be entitled to receive for
application to the payment thereof, any payment or distribution by ACE of any kind or character, whether in cash, property or securities, including any such payment or distribution which may be payable or deliverable by ACE by reason of the payment of any other Indebtednessindebtedness of ACE being subordinated to the payment of ACE INA subordinated debt securities, of such series, which may be payable or deliverable by ACE in respect of the ACE INA subordinated debt securities of
such series upon any such dissolution, winding-up, liquidation or reorganization or in any such bankruptcy, insolvency, receivership or other proceeding. (Section 18.3 of the ACE INA subordinated indenture)
        By reason of suchthis subordination, in the event of liquidation or insolvency of ACE, holders of ACE Senior Indebtedness with respect to the ACE INA
subordinated debt securities of any seriessenior indebtedness and holders of other obligations of ACE that are not subordinated to suchthe ACE Senior Indebtednesssenior indebtedness may recover more, ratably, than the holders of the ACE INA subordinated debt securities of such
series.securities.
        Subject to the payment in full of all ACE Senior Indebtedness with respect
to the ACE INA subordinated debt securities of any series,senior indebtedness, the rights of the holders of the ACE INA subordinated debt securities of such series under the ACE guarantee will be subrogated to the rights of the holders of suchthe ACE Senior Indebtednesssenior indebtedness to receive payments or distributions of cash, property or securities of ACE applicable to suchthe ACE Senior Indebtednesssenior indebtedness until the principal of, any premium and interest on, and any additional amounts with respect to, the ACE INA subordinatedsenior debt securities of such series have been paid in full. (Section 18.4 of the ACE INA subordinated indenture)
        No payment of principal (includingof, including redemption and sinking fund payments) ofpayments, or any premium or interest on or any additional amounts with respect to the ACE INA subordinated debt securities of any series may be made by ACE (i) if if:
        The ACE INA subordinated indenture does not limit or prohibit ACE from incurring additional ACE Senior Indebtedness,senior indebtedness, which may include Indebtednessindebtedness that is senior to the ACE guarantee of the ACE INA subordinated 54

debt securities, of any series, but subordinate to other obligations of ACE. The ACE senior debt securities will constitute ACE Senior Indebtednesssenior indebtedness with respect to the ACE INA subordinated debt securities of each series under the ACE INA
subordinated indenture.securities.


        The term "ACE Senior Indebtedness"senior indebtedness" means, with respect to the ACE INA subordinated debt securities of any particular series, all Indebtednessindebtedness of ACE outstanding at any time, except (1) except:

        The ACE INA subordinated indenture provides that the foregoing subordination provisions, insofar as they relate to any particular series of ACE INA subordinated debt securities, may be changed prior to such issuance. Any suchthe issuance of that series of ACE INA subordinated debt securities, which change would be described in the applicable prospectus supplement.
New York Law to Govern
        The ACE INA indentures, the ACE INA debt securities and the ACE guarantee will be governed by, and construed in accordance with, the laws of the Statestate of New York applicable to agreements made or instruments entered into and, in each
case, performed in that state.York. (Section 1.13)

                                      55




DESCRIPTION OF THE WARRANTS TO PURCHASE
ORDINARY SHARES OR PREFERRED SHARES
        The following statements with respect tosummary sets forth the material terms and provisions of the ordinary share warrants and preferred share warrants, are summaries of, and subjectwhich would be issued pursuant to the detailed
provisions of a stock warrant agreement to be entered into bybetween ACE and a stock warrant agent to be selected at the time of issue. The stock warrant agreement may include or incorporate by reference standard warrant provisions substantially in the form of the Standard Stock Warrant Provisionsstandard stock warrant provisions, which is filed as an exhibit to the registration statement of which this prospectus forms a part.
General
        The stock warrants evidenced by stock warrant certificates, may be issued under the stock warrant agreement independently or together with any other securities offered by anya prospectus supplement and may be attached to or
separate from such other offered securities.supplement. If stock warrants are offered, the relatedapplicable prospectus supplement will describe the designation and terms of the stock warrants, including, without limitation, the following:

  .   
        The ordinary shares or preferred shares issuable upon exercise of the stock warrants will, when issued in accordance with the stock warrant agreement, be fully paid and nonassessable. This means that the shares will be paid for in full at the time they are issued, and, once they are paid for in full, there will be no further liability for further assessments or taxation.
Exercise of Stock Warrants

   Stock
        You may exercise your stock warrants may be exercised by surrendering to the stock warrant agent theyour stock warrant certificate with the form of election to purchase on the reverse thereof dulyof the certificate properly completed and signedexecuted by the warrantholder,you, or its dulyyour authorized agent, (suchwhich signature tomust be guaranteed by a bank or trust company, by a broker or dealer which is a member of the National Association of Securities Dealers, Inc., which we refer to in this prospectus as the NASD, or by a member of a national securities exchange),
indicatingexchange. You must indicate on the warrantholder'sform of election whether you are electing to exercise all or a portion of the stock warrants evidenced by the certificate. Surrendered stock warrant
certificates shall be accompanied byYou must also submit a payment of the aggregate exercise price of the stock warrants to be exercised as set forth in the related prospectus
supplement, in lawful money of the United States along with your stock warrant certificates, unless otherwise providedset forth in the related applicable


prospectus supplement. Upon receipt thereofof the stock warrant certificate, form of election and aggregate payment, if applicable, by the stock warrant agent, the stock warrant agent will requisition from the transfer agent for the ordinary shares or the preferred shares, as the case may be, for issuance and
delivery to or upon the written order of the exercising

                                      56



warrantholder, a certificate representing the number of ordinary shares or preferred shares purchased.purchased for issuance and delivery to you or upon your written order. If you exercise less than all of the stock warrants evidenced by any stock warrant certificate, are exercised, the stock warrant agent shall deliver to the exercising warrantholderyou a new stock warrant certificate representing theyour unexercised stock warrants.
Antidilution and Other Provisions
        The exercise price payable, and the number of ordinary shares or preferred shares purchasable upon the exercise of each stock warrant, and the number of stock warrants outstanding will beare subject to adjustment in certainif specified events including occur. These events include:
        In lieu of adjusting the number of ordinary shares or preferred shares purchasable upon exercise of each stock warrant, ACE may elect to adjust the number of stock warrants. No adjustment in the number of shares purchasable upon exercise of the stock warrants will be required until cumulative adjustments require an adjustment of at least 1% thereof. ACEin the number of shares purchasable. We may also, at its option, reduce the exercise price at any time. No fractional shares will be issued upon exercise of stock warrants, but ACEwe will pay the cash value of any fractional shares otherwise issuable. Notwithstanding the foregoing,preceding sentences, in case of any consolidation, merger, or sale or conveyance of theour property of ACEwe as an entirety or substantially as an entirety, the holder of each outstandingyou, as a stock warrant holder, shall have the right to the kind and amount of shares of stock and other securities and property, (including cash)including cash, receivable by a holder of the number of ordinary shares or preferred shares into which suchyour stock warrants were exercisable immediately prior thereto.

to this event.
No Rights as Shareholders

   Holders of stock warrants
        You will not be entitled, by virtue of being such
holders,a stock warrant holder, to vote, to consent, to receive dividends, to receive notice as shareholders with respect to any meeting of shareholders for the election of our directors of ACE or any other matter, or to exercise any rights whatsoever as shareholders of ACE.

                                      57

our's.


DESCRIPTION OF THE WARRANTS TO PURCHASE DEBT SECURITIES
        The following statements with respect tosummary sets forth the material terms and provisions of the debt warrants, are summaries of,
and subjectwhich would be issued pursuant to the detailed provisions of a debt warrant agreement to be
entered into bybetween ACE and a debt warrant agent to be selected at the time of issue. The debt warrant agreement may include or incorporate by reference standard warrant provisions substantially in the form of the Standard Debt
Securities Warrant Provisionsstandard debt warrant provisions, which is filed as an exhibit to the registration statement of which this prospectus forms a part.
General
        The debt warrants evidenced by debt warrant certificates, may be issued under the debt warrant agreement independently or together with any other securities offered by anya prospectus supplement and may be attached to or
separate from such other offered securities.supplement. If debt warrants are offered, the relatedapplicable prospectus supplement will describe the designation and terms of the debt warrants, including, without limitation, the following:

  .   
        You, as a debt warrant holder, will generally not have any of the rights of holders of ACE debt securities, including the right to receive the payment of principal of, any premium or interest on, or any additional amounts with respect to, the ACE debt securities or to enforce any of the covenants of the ACE debt securities or the applicable ACE indenture, except as otherwise provided in the applicable ACE
indenture.
Exercise of Debt Warrants

   Debt
        You may exercise your debt warrants may be exercised by surrendering the debt warrant certificate at the office of the debt warrant agent your debt warrant certificate with the form of election to purchase on the reverse side of the debt warrant certificate properly completed and executed (with signature(s)signed by you, which signature must be guaranteed by a bank or trust company, by a broker or dealer which is a member of the National Association of Securities Dealers,
Inc.NASD or by a member of a national securities exchange), and byexchange. You must also submit a payment in full of the exercise price, as set forth in the relatedapplicable prospectus supplement. Upon the exercise of debt warrants, ACE will issue the ACE debt securities in authorized denominations in accordance with the instructions of the exercising
warrantholder.your instructions. If you exercise less than all of the debt warrants evidenced by theyour debt warrant certificate, are exercised, a new debt warrant certificate will be issued for the remaining number of debt warrants.


                                      58




DESCRIPTION OF PREFERRED SECURITIES
        Each ACE Trust will be governed by the terms of the applicable restated
trust agreement. Under thean amended and restated trust agreement, which refer to in this prospectus as a trust agreement, a form of which is an ACE Trust,exhibit to the registration statement of which this prospectus forms a part. Under each trust agreement, the ACE Trust may issue, from time to time, only one series of preferred securities.
The preferred securities will havewith the terms set forth in the restated trust agreement or made a part of the restated trust agreement by the Trust Indenture Act, and describedwhich terms we will set forth in the relatedapplicable prospectus supplement. TheseThe terms of the ACE Trust preferred securities will generally mirror the terms of the ACE INA subordinated debt securities, purchased bywhich the ACE Trust usingwill purchase with the proceeds from the sale of its preferred securities and its common securities. The ACE INA subordinated debt securities issued to an ACE Trust will be guaranteed by ACE on a subordinated basis and are referred to in this prospectus as the "correspondingcorresponding ACE INA subordinated debt securities"securities relating to that ACE Trust. See "Use of Proceeds."
        The following is a summary sets forthof the material terms and provisions of each restated trust agreement and the preferred securities to which any prospectus
supplement relates. Because this summary is not complete, yousecurities. You should refer to the form of amended and restated trust agreement and to the Trust Indenture Act for complete information regarding the terms and provisions of thatthe trust agreement and of the preferred securities, including the definitions of some of the terms
used below. The form of restated trust agreement filed as an exhibit to the
registration statement of which this prospectus forms a part is incorporated by
reference in this summary. Whenever particular sections or defined terms of a
restated trust agreement are referred to, such sections or defined terms are
incorporated herein by reference, and the statements in connection with which
such reference is made is qualified in its entirety by such reference.

securities.
Issuance, Status and Guarantee of Preferred Securities

   Under the terms of the restated trust agreement for each ACE Trust, the
Administrative Trustees will issue the preferred securities on behalf of that
ACE Trust.
        The preferred securities will represent preferred beneficial interests in thean ACE Trust and theyou, as holders of the preferred securities, will be entitled to a preference in certainspecified circumstances, including as regards distributions and amounts payable on redemption or liquidation over the common securities of suchthe applicable ACE Trust, as well as other benefits under the corresponding restated trust
agreement.Trust. The preferred securities of aneach ACE Trust will rank equally, and payments will be made on the preferred securitiespro rata, with the common securities of that ACE Trust, except as described under "--Subordination"—Subordination of Common Securities."Securities" below. The Property Trusteeproperty trustee will hold legal title to the corresponding ACE INA subordinated debt securities in trust for your benefit and for the benefit of the holdersholder of the related preferred securities andACE Trust's common securities. TheIn this prospectus, we refer to the common securities and the preferred securities of an ACE Trust are collectively
referred to as the "trust securities" of that ACE Trust.
        ACE will issue a guarantee, agreement forwhich we refer to in this prospectus as the benefit of the holders of each
ACE Trust's preferred securities (the "preferred securities guarantee" for
thoseguarantee, the preferred securities).securities. Under each preferred securities guarantee, ACE will guarantee, on a subordinated basis, payment of distributions on the related preferred securities and amounts payable on redemption or liquidation of suchthe related preferred securities, but only to the extent that the related ACE Trust has funds on hand to make suchthese payments. See "Description of Preferred Securities Guarantees."
Distributions
        Distributions on the preferred securities will be cumulative, will accumulate from the original issue date and will be payable on the dates as
specified in the relatedapplicable prospectus supplement. In the event thatIf any date on which these distributions are payable on the preferred securities is not a Business
Day,business day, payment of the distribution payable on suchthat date will be made on the next succeeding business day that is a Business Day (and without any additional distributions or other payment in respect of any such delay), except that,the delay. However, if such Business
Daythe next succeeding business day is in the next succeeding calendar year, payment of suchthe distribution shallwill be made on the immediately preceding Business Day,business day, in each case with the same
force and effect as if made on the date suchthe payment was originally payable
(eachpayable. We refer to each date on which distributions are payable in accordance with the foregoing,this prospectus as a "distribution date").distribution date. (Section 59

4.1). A "Business Day""business day" is any day other than a Saturday or a Sunday, or a day on which banking institutions in The City of New York are authorized or required by law or executive order to remain closed or a day on which the corporate trust office of the Property Trusteeproperty trustee or the trustee for the corresponding ACE INA subordinated debt securities is closed for business. (Section 1.1).


        Distributions on each preferred security will be payable at athe rate specified in the relatedapplicable prospectus supplement. Thesupplement and the amount of distributions payable for any period will be computed on the basis of a 360-day year of twelve 30-day months unless otherwise specified in the relatedapplicable prospectus supplement. Distributions to which holders of preferred securitiesyou are entitled will accumulate additional distributions at the rate per annum if and as specified in the relatedapplicable prospectus supplement. References to "distributions" include any accumulated or additional distributions unless otherwise stated. (Section 4.1).
        If providedset forth in the applicable prospectus supplement, ACE INA haswill have the right under the ACE INA subordinated indenture to defer the payment of interest at
any time or from time to time on any series of corresponding ACE INA subordinated debt securities for an Extension Period which will bethe period specified in the relatedapplicable prospectus supplement. No Extension PeriodHowever, no extension period may extend beyond the stated maturity of the corresponding ACE INA subordinated debt securities. See "Description of ACE INA Debt Securities and ACE Guarantee--OptionGuarantee—Option to Extend Interest Payment Date." As a consequence of any such extension, distributions on the corresponding preferred securities would be deferred (butbut would continue to accumulate additional distributions at the rate per annum set forth in the applicable prospectus supplement, for such preferred securities, which rate will match the interest rate payable on the corresponding ACE INA subordinated debt securities during the Extension Period)extension period, by the ACE Trust which issued suchthe preferred securities during any such Extension Period.extension period. (Section 4.1)
        The funds of each ACE Trust available for distribution to holders of its
preferred securitiesyou will be limited to payments under the corresponding ACE INA subordinated debt securities in which the ACE Trust will invest the proceeds from the issuance and sale of its trust securities. If ACE INA or ACE, as the case may be, does not make interest payments on those corresponding ACE INA subordinated debt securities, the Property Trusteeproperty trustee will not have funds available to pay distributions on the related preferred securities. The payment of distributions, (ifif and to the extent the ACE Trust has funds legally available for the payment of suchthe distributions and cash sufficient to make such payments)the payments, is guaranteed by ACE on a limited basis as set forth herein under "Description of Preferred Securities Guarantees."
        Distributions on the preferred securities will be payable to the holders thereofof the preferred securities as they appear on the register of suchthe applicable ACE Trust on the relevant record dates. As long as the preferred securities remain in book-entry form, the record dates will be one Business Daybusiness day prior to the relevant distribution dates. Subject to any applicable laws and regulations and the provisions of the
applicable restated trust agreement,Generally, each distribution payment will be made as described under "Global Preferred Securities." In the eventIf any preferred securities are not in book-entry form, the relevant record date for such
preferred securities will be the date at least 15 days prior to the relevant distribution date, as specified in the relatedapplicable prospectus supplement. (Section 4.1)
Redemption or Exchange
        Mandatory Redemption.    Upon any repayment or redemption, in whole or in part, of any corresponding ACE INA subordinated debt securities held by an ACE Trust, whether at stated maturity, upon earlier redemption or otherwise,the property trustee will simultaneously apply the proceeds from suchthe repayment or redemption, shall simultaneously be applied by
the Property Trustee, upon not less than 30 nor more than 60 days notice to holders of trust securities, to redeem, on apro rata basis, preferred
securities and commontrust securities having an aggregate stated liquidation amount equal to the aggregate principal amount of the corresponding ACE INA subordinated debt securities so repaid or redeemed. The redemption price per trust security will be equal to theits stated liquidation amount, thereof plus any accumulated and unpaid distributions thereonon the trust security to the redemption date, of redemption, plus the related amount of premium, if any, and any additional amounts paid by ACE INA or ACE upon the concurrent repayment or redemption of the corresponding ACE INA subordinated debt securities,securities. The amount described in the preceding sentence is referred to in this prospectus as the redemption price. (Section 4.2) If less than all of any series ofthe corresponding ACE INA subordinated debt securities are to be repaid or redeemed on a redemption date, then the property trustee shall allocate the proceeds from suchthe repayment or redemption shall be allocated to the redemptionpro rata of the related preferred securities and the commontrust securities. (Section 4.2)

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        Generally, ACE INA will have the right to redeem any series of corresponding ACE INA subordinated debt securities (1) at any time, in whole but not in part, upon the occurrence of a Special Event (as defined in the ACE indentures)special event and subject to the further conditions described under "Description of ACE INA Debt Securities and ACE Guarantee--Redemption,Guarantee—Redemption." or (2) as may be otherwise specified
in the applicable prospectus supplement.
        Special Event Redemption or Distribution of Corresponding ACE INA Subordinated Debt Securities.    If a Special Eventspecial event relating to the preferred
securities and commontrust securities of an ACE Trust shall occuroccurs and beis continuing, within 90 days following the occurrence of the special event, ACE INA has the right to redeem the corresponding ACE INA subordinated debt securities, in whole but not in part, and, therebyin doing so, cause a mandatory redemption of such preferred securities and commonthe related trust securities, in whole but not in part, at the redemption price within 90 days following the occurrence of the Special
Event.price. At any time, ACE INA has the right to dissolve the related ACE Trust and, after satisfaction of the liabilities of creditors of suchthe ACE Trust, as
provided by applicable law, cause suchthe corresponding ACE INA subordinated debt securities to be distributed to the holders of such preferred securities and
commonthe trust securities in liquidation of the ACE Trust. If ACE INA does not elect to redeem the corresponding ACE INA subordinated debt securities upon the occurrence of a Special Event,special event, the applicable preferredtrust securities will remain outstanding, and in theoutstanding. If a tax event a Tax Event has occurred and is continuing, Additional Sumsadditional sums may be payable on the corresponding ACE INA subordinated debt securities. "Additional Sums"For purposes of this section, "additional sums" means the additional amounts as may be necessary in order that the amount of distributions then due and payable by an ACE Trust on theits outstanding preferredtrust securities and common securities of the ACE Trust shall not be reduced as a result of any additional taxes, duties and other governmental charges to which such ACE Trustit has become subject as a result of a Tax Event.tax event. (Section 1.1)
        On and from the date fixed for any distribution of corresponding ACE INA subordinated debt securities upon dissolution of an ACE Trust (1) Trust:
        There can be no assurance as to the market prices for the preferred securities or the corresponding ACE INA subordinated debt securities that may be distributed in exchange for preferred securities if a dissolution and liquidation of an ACE Trust were to occur. Accordingly, the preferred securities that you may purchase, orand the corresponding ACE INA subordinated debt securities that you may receive on dissolution and liquidation of an ACE Trust, may trade at a discount to the price that you paid to purchase the preferred securities.
Redemption Procedures

   Preferred
        The property trustee shall redeem the preferred securities redeemed on each redemption date shall be redeemed at the redemption price with the applicable proceeds from the contemporaneous redemption of the corresponding ACE INA subordinated debt securities. Redemptions ofThe property trustee will redeem the preferred securities, and shall be made andpay the redemption price,
shall be payable on each redemption date only to the extent that the relatedapplicable ACE Trust has funds on hand available for the payment of suchthe redemption price. See also "--Subordination"—Subordination of Common Securities."


        If an ACE Trust gives a notice of redemption, (whichwhich notice will be irrevocable)irrevocable, in respect of its preferred securities, then, by 12:00 noon, New York City time, on the redemption date, to the extent funds are available, the Property Trusteeproperty trustee will deposit irrevocably with the depositary for the preferred securities funds sufficient to pay the applicable redemption price andprice. The property trustee will also give the depositary irrevocable instructions and authority to pay the redemption price to the holdersyou, as a holder of suchthe preferred securities. If suchthe preferred securities are no longer in book-entry form, the Property Trustee,property trustee, to the extent funds are available, will irrevocably deposit with the paying agent 61

for suchthe preferred securities funds sufficient to pay the applicable redemption price and will give suchthe paying agent irrevocable instructions and authority to pay the redemption price to the holders thereofyou upon surrender of theiryour certificates evidencing suchthe preferred securities. Notwithstanding the foregoing,preceding sentences, distributions payable on or prior to the redemption date for any preferred securities called for redemption shall be payable to the holders of
such preferred securitiesyou on the relevant record datesdate for the related distribution dates. If notice of redemption shall have been given and funds deposited as required, then, immediately prior to the close of business on the date of suchthe deposit, all of your rights, as a holder of the holders of such preferred securities so called for redemption, will cease, except theyour right of the holders of such
preferred securities to receive the redemption price, but without interest, and suchyour preferred securities will cease to be outstanding. In the event thatIf any date on which any redemption price is payable is not a Business Day,business day, then payment of the redemption price payable on suchthat date will be made on the next succeeding business day which is a Business Day (and without any interest or other payment in respect of any such delay), except that,the delay. However, if such Business Daythe next succeeding business day falls in the next calendar year, suchthe payment will be made on the immediately preceding Business Day,business day, in each case with the same force and effect as if made on suchthe proper payment date. In the eventIf that payment of the redemption price in respect of
preferred securities called for redemption is improperly withheld or refused and not paid either by the ACE Trust or by ACE pursuant to the preferred securities guarantee as described under "Description of Preferred Securities Guarantees," distributions on suchthe preferred securities will continue to accumulate interest at the then applicable rate, from the redemption date originally established by the ACE Trust for suchthe preferred securities to the date suchthe redemption price is actually paid, in which case the actual payment date will be the date fixed for redemption for purposes of calculating the redemption price.

   Subject to applicable law (including, without limitation, United States
Federal securities law),
        Generally, ACE or its subsidiaries, including ACE INA, may at any
time and from time to time purchase outstanding preferred securities by tender,
in the open market or by private agreement.securities.
        Payment of the redemption price on the preferred securities shallwill be made to the applicable recordholdersrecord holders as they appear on the register for suchthe preferred securities on the relevant record date, which shallwill be one Business Daybusiness day prior to the relevant redemption date; provided, however, that in the event thatdate. If any preferred securities are not in book-entry form, the relevant record date for suchthe preferred securities shallwill be a date at least 15 days prior to the redemption date, as specified in the applicable prospectus supplement.

   If
        The property trustee will allocate the aggregate liquidation amountpro rata to the trust securities based upon the relative liquidation amounts of the classes if less than all of the preferred securities and commontrust securities issued by an ACE Trust are to be redeemed on a redemption date, then the aggregate
liquidation amount of such preferred securities and common securities to be
redeemed shall be allocated date. The property trustee will select on apro rata to the preferred securities and the common
securities based upon the relative liquidation amounts of such classes. The
particular preferred securities to be redeemed shall be selected on a pro rata basis not more than 60 days prior to the redemption date by the Property
Trustee from the outstanding preferred securities not previously called for redemption the particular preferred securities to be redeemed by suchany method, (includingincluding without limitation by lot)lot, as the
Property Trusteeit shall deem fair and appropriate. The Property Trustee shallproperty trustee will promptly notify the trust registrar in writing of the preferred securities selected for redemption and, in the case of any preferred securities selected for partial redemption, the liquidation amount thereofof the preferred securities to be redeemed. For allGenerally, for purposes of each restated trust agreement, unless the context otherwise
requires, all provisions relating to the redemption of preferred securities shallwill relate, in the case of any preferred securities redeemed or to be redeemed only in part, to the portion of the liquidation amount of preferred securities which has been or is to be redeemed.
        Notice of any redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each holder of trust securities to be redeemed at its registered address. Unless each of ACE INA and ACE defaults in payment of the redemption price on the corresponding ACE INA


subordinated debt securities, on and after the redemption date interest will cease to accrue on suchthe ACE INA subordinated debt securities or portions thereof (andof the ACE INA subordinated debt securities, and distributions will cease to accrue on the related preferred securities or portions thereof)of the related preferred securities, called for redemption. (Section 4.2)
Subordination of Common Securities
        Payment of distributions on and the redemption price of, each ACE Trust's preferredtrust securities and common securities, as applicable, shallwill be madepro rata based on the liquidation amount of such preferred

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securities and common securities; provided, however, thatthe trust securities. However, if on any
distribution date or redemption date an event of default under the corresponding ACE INA subordinated debt securities shall have occurredoccurs and beis continuing on any distribution date or redemption date, no payment of any distribution on, or redemption price of, any of the ACE Trust's common securities, and no other payment on account of the redemption, liquidation or other acquisition of suchthe common securities, shallwill be made unless payment in full in cash of all accumulated and unpaid distributions on all of the ACE Trust's outstanding preferred securities for all distribution periods terminating on or prior thereto,to that date, or in the case of payment of the redemption price the full amount of suchthe redemption price on all of the ACE Trust's outstanding preferred securities then called for redemption, shall have been made or provided for, and all funds available to the Property
Trustee shallproperty trustee will first be applied to the payment in full in cash of all distributions on, or redemption price of, the ACE Trust's preferred securities then due and payable.

   In the case
        If any event of any Event of Defaultdefault under the restated trust agreement resulting from a event of default under the corresponding ACE INA subordinated debt securities occurs, the holder of suchthe ACE Trust's common securities will be deemed to have waived any right to act with respect to any such Eventthat event of Default under the applicable restated trust agreementdefault until the effect of all such Events of Defaultthe events of default with respect to suchthe preferred securities have been cured, waived or otherwise eliminated. Until any such Eventsthese events of Default under
the applicable restated trust agreement with respect to the preferred
securitiesdefault have been so cured, waived or otherwise eliminated, the Property
Trusteeproperty trustee shall act solely on behalf of the holders of suchthe preferred securities and not on behalf of the holder of the ACE Trust's common securities, and only the holders of suchthe preferred securities will have the right to direct the Property Trusteeproperty trustee to act on their behalf. (Section 4.3)
Liquidation Distribution Upon Dissolution of ACE Trust
        Pursuant to each restated trust agreement, each ACE Trust shallwill automatically dissolve upon expiration of its term and shallwill dissolve on the first to occur of:

      1.  certain events of 

        If an early dissolution occurs as described in clause (1), (2) or (5)the first, second and fifth bullets above or upon the date designated for automatic dissolution of the ACE Trust, the ACE Trust shallwill be liquidated by the ACE Trusteestrustees as expeditiously as the ACE Trusteestrustees determine to be possible by distributing to the holders of the trust securities, after satisfaction of liabilities to creditors of suchthe ACE Trust as provided by applicable law, to
the holders of such trust securitiesTrust's creditors, corresponding ACE INA subordinated debt securities having an aggregate principal amount equal to the aggregate

stated liquidation amount of the trust securities. However, if suchthe property trustee determines that this distribution is determined bynot practical, the Property Trustee not to be practical, such holders will be entitled to receive out of the assets of the ACE TrustTrust's assets available for distribution, to holders, after satisfaction of liabilities to creditors of suchthe ACE Trust as provided by applicable law,Trust's creditors, an amount equal to, in the case of holders of preferred securities, the aggregate of the liquidation amount plus accumulated and unpaid distributions thereonon the trust securities to the date of payment, this amount being referred to in this prospectus as the Liquidation Distribution.liquidation distribution. If such Liquidation
Distributionthe liquidation distribution can be paid only in part because suchthe ACE Trust has insufficient assets available to pay in full the aggregate Liquidation Distribution,liquidation distribution, then the amounts payable directly by such

                                      63

the ACE Trust on its preferred securities shallwill be paid on apro rata basis. The Holderholder of suchthe ACE Trust's common securities will be entitled to receive distributions upon any such liquidationpro rata with the holders of its preferred securities, except that if an event of default under the corresponding ACE INA subordinated debt securities has occurred and is continuing, the preferred securities shall have a priority over the common securities. (Section 9.4)
Events of Default; Notice

   Any one
        The following constitute an event of the following events constitutes an "Event of Default"default under each
restated trust agreement with respect to the applicable preferred securities
(whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

   (1) securities:
        Within five Business Daysbusiness days after the occurrence of any Eventevent of Defaultdefault actually known to the Property Trustee,property trustee, the Property Trustee shallproperty trustee will transmit notice of such Eventthe event of Defaultdefault to the holders of such ACE Trust'sthe applicable preferred securities, the Administrative Trusteesadministrative trustees and ACE INA, as Depositor,depositor, unless such
Eventthe event of Default shall havedefault has been cured or waived. (Section 8.2) ACE INA, as Depositor,depositor, and the Administrative Trusteesadministrative trustees are required to file annually with the Property Trusteeproperty trustee a certificate as to whether or not they are in compliance with all the conditions and covenants applicable to them under each restated
trust agreement. (Sections 8.15 and 8.16)
        If an event of default under the corresponding ACE INA subordinated debt securities has occurred and is continuing, the preferred securities shall have a preference over the common securities upon dissolution of each ACE Trust as described above. See "--Liquidation"—Liquidation Distribution Upon Dissolution of ACE Trust." The existence of an Eventevent of Defaultdefault under the restated trust agreement does not entitle the holders of preferred securities to accelerate the maturity thereof.

of the preferred securities.


Removal of ACE Trustees
        Unless an event of default under the corresponding ACE INA subordinated debt securities shall havehas occurred and beis continuing, any ACE Trusteetrustee may be removed at any time by the holder of the ACE Trust's common securities. If an event of default under the corresponding ACE INA subordinated debt securities has occurred and is continuing, the Property Trusteeproperty trustee and the Delaware Trusteetrustee may be removed at such time by the holders of a

                                      64

 majority in liquidation amount of the outstanding preferred securities. In no event will the holders of the preferred securities have the right to vote to appoint, remove or replace the Administrative Trustees,administrative trustees, which voting rights are vested exclusively in the holder of the ACE Trust's common securities. No resignation or removal of an ACE Trusteetrustee and no appointment of a successor trustee shall be effective until the acceptance of appointment by the successor trustee in accordance with the provisions of the applicable restated trust agreement. (Section 8.10)
Co-Trustees and Separate Property Trustee
        Unless an Eventevent of Defaultdefault shall have occurred and be continuing, at any
time or times, for the purpose of meeting the legal requirements of the Trust Indenture Act or of any jurisdiction in which any part of the property of any ACE Trust may at the time be located, ACE INA, as Depositor,depositor, and the Administrative Trusteesadministrative trustees shall have power, at any time or times, to appoint one or more persons either to act as a co-trustee jointly with the Property Trustee,property trustee of all or any part of the property of suchthe ACE Trust or to act as separate trustee of any such
property, in either case with suchthe powers as may be provided in the instrument of appointment,appointment. ACE INA, as depositor, and the administrative trustees shall generally also have the power to vest in suchthat person or persons in suchthat capacity any property, title, right or power deemed necessary or desirable, subject to the
provisions of the applicable restated trust agreement. In casedesirable. If an event of default under the corresponding ACE INA subordinated debt securities has occurred and is continuing, the Property Trusteeproperty trustee alone shall have power to make suchthis appointment. (Section 8.9)
Merger or Consolidation of ACE Trustees
        Any corporation into which the Property Trustee,property trustee, the Delaware Trusteetrustee or any Administrative Trusteeadministrative trustee that is not a natural person may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which suchthe ACE Trusteetrustee shall be a party, shall be the successor of suchthe ACE Trusteetrustee under each restated trust agreement, provided suchso long as the corporation shall beis otherwise qualified and eligible. (Section 8.12)
Mergers, Consolidations, Amalgamations or Replacements of the ACE Trusts
        An ACE Trust may not merge with or into, convert into, consolidate, amalgamate, or be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety to any corporation or other entity, except as described below or as described in "Liquidation Distribution Upon Dissolution of ACE Trust." An ACE Trust may, at the request of ACE INA, with the consent of only the Administrative Trusteesadministrative trustees and without the consent of the holders of the preferred securities, merge with or into, convert into, consolidate, amalgamate, or be replaced by or convey, transfer or lease its properties and assets substantially as an entirety to a trust organized as such under the laws of any State, provided, that

      1.  suchstate so long as the following conditions are met:

        Notwithstanding the foregoing,preceding description, an ACE Trust shall not, except with the consent of holders of 100% in liquidation amount of the preferred securities, consolidate, amalgamate, merge with or into, convert into, or be replaced by or convey, transfer or lease its properties and assets substantially as an entirety to any other entity or permit any other entity to consolidate, amalgamate, merge with or into, convert into, or replace it if suchthe consolidation, amalgamation, merger, replacement, conveyance, transfer or lease would cause the ACE Trust or the successor entity to be classified as other than a grantor trust for United StatesU.S. Federal income tax purposes. (Section 9.5)
Voting and Preemptive Rights
        Except as provided below and under "--Removal"—Removal of ACE Trustees," "Description of ACE INA Debt Securities and ACE Guarantee--EventsGuarantee—Events of Default," "Description of Preferred Securities Guarantees--AmendmentsGuarantees—Amendments and Assignment" and as otherwise
required by law and the applicable restated trust agreement,, the holders of the preferred securities will generally not have noany voting rights. Holders of the preferred securities have no preemptive or similar rights. (Sections 5.14 and 6.1)


Amendment of Restated Trust Agreements
        Each restated trust agreement may be amended from time to time by ACE INA and the ACE Trustees,trustees, without the consent of the holders of the trust securities:

      1.  
        However, in the case of clause (1), suchthe first bullet above, that action shallwill not adversely affect in any material respect the interests of any holder of trust securities. Any such amendments of a restated trust agreement shalladopted in accordance with the two bullet points above will become effective when notice thereofof the amendment is given to the holders of trust securities of the applicable ACE Trust.


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        Each restated trust agreement may be amended by the ACE Trustees and ACE INA with the consent of holders representing not less than a majority, (basedbased upon liquidation amounts)amounts, of the outstanding trust securities and receipt by the ACE Trusteestrustees of an opinion of counsel to the effect that suchthe amendment or the exercise of any power granted to the ACE Trusteestrustees in accordance with suchthe amendment will not affect the ACE Trust's status as a grantor trust for United
StatesU.S. Federal income tax purposes or the ACE Trust's exemption from status as an "investment company" under the Investment Company Act. However, without the consent of each holder of trust securities, such restatedthe trust agreement may not be amended to:

      1.  
        So long as any corresponding ACE INA subordinated debt securities are held by the Property Trustee,property trustee, the ACE Trusteestrustees shall not:

      1.  

without, in each case, obtaining the prior approval of the holders of a majority in aggregate liquidation amount of all outstanding preferred securities.

        However, where a consent under the ACE INA subordinated indenture would require the consent of each holder of the affected corresponding ACE INA subordinated debt securities, affected thereby, no such consent shall be given by the Property
Trusteeproperty trustee without the prior consent of each holder of the corresponding preferred securities. The ACE Trusteestrustees shall not revoke any action previously authorized or approved by a vote of the holders of the preferred securities except by subsequent vote of the holders of the preferred securities. The Property
Trusteeproperty trustee shall notify each holder of preferred securities of any notice of default with respect to the corresponding ACE INA subordinated debt securities. In addition to obtaining the foregoingthese approvals of the holders of the preferred securities, prior to taking any of the foregoingthese actions, the ACE Trusteestrustees shall obtain an opinion of counsel experienced in such matters to the effect that the ACE Trust will not be classified as an association taxable as a corporation for United StatesU.S. Federal income tax purposes on account of suchthat action. (Section 6.1)
        Any required approval or action of holders of preferred securities may be given or taken at a meeting of holders of preferred securities convened for suchthat purpose or pursuant to written consent. The Property Trusteeproperty trustee will cause a notice of any meeting at which holders of preferred securities are entitled to vote to be given to each holder of record of preferred securities in the manner
set forth in each restated trust agreement.securities. (Sections 6.2, 6.3 and 6.6)
        No vote or consent of the holders of preferred securities will be required for an ACE Trust to redeem and cancel its preferred securities in accordance with the applicable restated trust agreement.

                                      67



   Notwithstanding that
        Even though the holders of preferred securities are entitled to vote or consent under any of the circumstances described above, any of the preferred securities that are owned by ACE INA, the ACE Trusteestrustees or any affiliate of ACE INA or any ACE Trustees,trustees shall, for purposes of suchthe vote or consent, be treated as if they were not outstanding.
Global Preferred Securities
        The preferred securities of an ACE Trust may be issued, in whole or in part, in the form of one or more global preferred securities that will be deposited with, or on behalf of, the depositary. The depositary identified inand the prospectus supplement.

   The specific terms of the depositary arrangement with respect to the preferred securities of an ACE Trust will be described in the relatedapplicable prospectus supplement. ACE INA anticipates that the following provisions will
generally apply to depositary arrangements.

   Upon the issuance of a global preferred security, and the deposit of such
global preferred security with or on behalf of the depositary, the depositary
for such global preferred security or its nominee will credit, on its
book-entry registration and transfer system, the respective aggregate
liquidation amounts of the individual preferred securities represented by such
global preferred securities to the accounts of participants. Such accounts
shall be designated by the underwriters or agents with respect to such
preferred securities or by ACE INA if such preferred securities are offered and
sold directly by ACE INA. Ownership of beneficial interests in a global
preferred security will be limited to participants or persons that may hold
interests through participants. Ownership of beneficial interests in such
global preferred security will be shown on, and the transfer of that ownership
will be effected only through, records maintained by the depositary or its
nominee (with respect to interests of participants) and the records of
participants (with respect to interests of persons who hold through
participants). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a global preferred security.

   So long as the depositary for a global preferred security, or its nominee,
is the registered owner of such global preferred security, such depositary or
such nominee, as the case may be, will be considered the sole owner or holder
of the preferred securities represented by such global preferred security for
all purposes under the restated trust agreement governing such preferred
securities. Except as provided below, owners of beneficial interests in a
global preferred security will not be entitled to have any of the individual
preferred securities represented by such global preferred security registered
in their names, will not receive or be entitled to receive physical delivery of
any such preferred securities in definitive form and will not be considered the
owners or holders thereof under the restated trust agreement.

   Payments of any liquidation amount, premium or distributions in respect of
individual preferred securities registered in the name of a depositary or its
nominee will be made to the depositary or its nominee, as the case may be, as
the registered owner of the global preferred security representing such
preferred securities. None of ACE, ACE INA, the Property Trustee, any paying
agent, or the securities registrar for such preferred securities will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of the global
preferred security representing such preferred securities or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.

   ACE INA expects that the depositary or its nominee, upon receipt of any
payment in respect of a global preferred security representing any ACE Trust's
preferred securities, will credit immediately participants' accounts with
payments in amounts proportionate to their respective beneficial interest in
the aggregate liquidation amount of such global preferred security for such
preferred securities as shown on the records of such depositary or its nominee.
ACE INA also expects that payments by participants to owners of beneficial
interests in such global preferred security held through such participants will
be governed by standing instructions and customary practices, as is now the
case with securities held for the accounts of customers in bearer form or
registered in street name and will be the responsibility of such participants.

                                      68



   Unless otherwise specified in the applicable prospectus supplement, the
restated trust agreement of each ACE Trust will provide that (1) if ACE INA
advises the ACE Trustees in writing that the depositary is no longer willing or
able to act as depositary and ACE fails to appoint a qualified successor within
90 days, (2) ACE INA at its option advises the ACE Trustees in writing that it
elects to terminate the book-entry system through the depositary or (3) after
the occurrence of an event of default under the corresponding ACE INA
subordinated debt securities, owners of preferred securities representing at
least a majority of liquidation amount of such preferred securities advise the
Property Trustee in writing that the continuation of a book-entry system
through the depositary is no longer in their best interests, then the global
preferred securities will be exchanged for preferred securities in definitive
form in accordance with the instructions of the depositary. It is expected that
such instructions may be based upon directions received by the depositary from
participants with respect to ownership of beneficial interests in global
preferred securities. Individual preferred securities so issued will be issued
in authorized denominations.


Payment and Paying Agency
        Payments of distributions in respect of the preferred securities shall be made to the depositary, which shall credit the relevant accounts at the depositary on the applicable distribution dates, or,However, if any ACE Trust's preferred securities are not held by the depositary, suchthese payments shall be made by check mailed to the address of the holder entitled theretoto the payments as such
addressit shall appear on the register thatof the ACE Trust. (Section 4.4)
        Unless otherwise specifiedset forth in the applicable prospectus supplement, the paying agent shall initially be Bank OneJ.P. Morgan Trust Company, N.A.National Association and any co-paying agent chosen by Bank OneJ.P. Morgan Trust Company, N.A.National Association and acceptable to the Administrative Trusteesadministrative trustees and ACE. The paying agent shall be permitted to resign as paying agent upon 30 days' written notice to the Administrative Trustees,administrative trustees, the Property Trusteeproperty trustee and ACE INA. In the event Bank OneIf J.P. Morgan Trust Company, N.A.National Association shall no longer be the paying agent, the Administrative Trusteesadministrative trustees shall appoint a successor, (whichwhich shall be a bank or trust company acceptable to the Administrative Trusteesadministrative trustees and ACE INA)INA, to act as paying agent. (Section 5.9)
Registrar and Transfer Agent
        Unless otherwise specifiedset forth in the applicable prospectus supplement, Bank OneJ.P. Morgan Trust Company, N.A.National Association will act as registrar and transfer agent for the preferred securities.


        Registration of transfers and exchanges of preferred securities will be effected without charge by or on behalf of each ACE Trust, but upon payment ofTrust. However, the holders must pay any tax or other governmental charges that may be imposed in connection with any transfer or exchange. The ACE Trusts will not be required to register or cause to be registered the transfer of their preferred securities after suchthe preferred securities have been called for redemption. (Section 5.4)
Information Concerning the Property Trustee
        The Property Trusteeproperty trustee undertakes to perform only those duties specifically set forth in each restated trust agreement, provided that itagreement. However, the property trustee must exercise the same degree of care as a prudent person would exercise in the conduct of his or her own affairs. Subject to this provision, the Property Trusteepreceding sentence, the property trustee is under no obligation to exercise any of the powers vested in it by the applicable
restated trust agreement at the request of any holder of preferred securities unless it is offered reasonable indemnity against the costs, expenses and liabilities that it might be incurred thereby.incur. If, in performing its duties under the restated trust agreement, the Property Trusteeproperty trustee is required to decide between alternative causes of action, construe ambiguous provisions in the applicable restated trust agreement or is unsure of the application of any provision of the applicable restated trust agreement, and the matter is not one on which holders of preferred securities are entitled under such restatedthe trust agreement to vote, then the Property Trusteeproperty trustee shall take suchthe action as is directed by ACE INA. If it is not so directed,Otherwise, the Property Trusteeproperty trustee shall take suchthe action as it deems advisable and in the best interests of the holders of the trust securities and will have no liability except for its own bad faith, negligence or willful misconduct. (Sections 8.1 and 8.3)


                                      69


Administrative Trustees
        The Administrative Trusteesadministrative trustees are authorized and directed to conduct the affairs of and to operate the ACE Trusts in such a way that that:
        In this connection,regard, ACE INA and the Administrative Trusteesadministrative trustees are authorized to take any action not inconsistent with applicable law, the certificate of trust of each ACE Trust or each restated
trust agreement, that ACE INA and the Administrative Trusteesadministrative trustees determine, in their discretion, to be necessary or desirable for suchthese purposes, as long as suchthe action does not materially adversely affect the interests of the holders of the related preferred securities.

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DESCRIPTION OF PREFERRED SECURITIES GUARANTEES
        Concurrently with the issuance by each ACE Trust of its preferred securities, ACEwe will execute and deliver a preferred securities guarantee for the benefit of the holders from time to time of suchthe preferred securities. The
Bank OneJ.P. Morgan Trust Company, N.A.National Association will act as indenturethe guarantee trustee referred to as the
Guarantee Trustee, under each preferred securities guarantee for the purposes of compliance with the Trust Indenture Act, and each preferred securities guarantee will be qualified as an indenture under the Trust Indenture Act.
Because the
        The following is a summary of certainthe material provisions of the preferred securities guarantees is not complete, youguarantees. You should refer to the form of preferred securities guarantee and the Trust Indenture Act for more complete information regarding the provisions of each preferred securities guarantee, including the
definitions of some of the terms used below.guarantee. The form of the preferred securities guarantee has been filed as an exhibit to the registration statement of which this prospectus formsis a part. Reference in this summary to preferred securities means thatthe ACE Trust's preferred securities to which athe preferred securities guarantee relates. The Guarantee Trusteeguarantee trustee will hold each preferred securities guarantee for the benefit of the holders of the related ACE Trust's preferred securities.
General

   ACE
        We will irrevocably agree to pay in full on a subordinated basis, to the extent described herein,below, the Guarantee Payments (as defined below) (withoutguarantee payments, without duplication of amounts theretoforepreviously paid by or on behalf of the ACE Trust)Trust, to the holders of the preferred securities as and when due, regardless of any defense, right of setoff or counterclaim that suchthe ACE Trust may have or assert other than the defense of payment. The following payments with respect to the preferred securities, to the extent not paid by or on behalf of the related ACE Trust, are referred to in this prospectus as the Guarantee Payments, will be subject to the preferred
securities guarantee:

      1.  guarantee payments:
        Our obligation to make a Guarantee Paymentguarantee payment may be satisfied by direct payment of the required amounts by ACEus to the holders of the applicable preferred securities or by causing the ACE Trust to pay suchthese amounts to suchthe holders. (Section 5.1)
        Each preferred securities guarantee will be an irrevocable guarantee on a subordinated basis of the related ACE Trust's payment obligations under the preferred securities, but will apply only to the extent that such relatedthe applicable ACE Trust has funds sufficient to make suchthe payments. Each preferred securities guarantee is, to that extent, a guarantee of payment and not a guarantee of collection. See "--Status"—Status of the Preferred Securities Guarantees."
        If ACE INA or ACEwe does not make interest payments on the corresponding ACE INA subordinated debt securities held by an ACE Trust, the ACE Trust will not be able to pay distributions on the preferred securities and will not have funds legally available for payment. Each preferred securities guarantee will rank subordinate and junior in right of payment to all Senior Indebtedness of
ACE,our senior indebtedness, including all


ACE debt securities and ACE's obligations as guarantor under the ACE INA subordinated indenture, as described below under "--Status"—Status of the Preferred Securities Guarantees" and in the related prospectus supplement.Guarantees."
        Because ACE iswe are a holding company, itsour rights and the rights of itsour creditors, including the holders of preferred securities who are our creditors of ACE by

                                      71

 virtue of a preferred securities guarantee, and shareholders to participate in any distribution of assets of any subsidiary upon suchthe subsidiary's liquidation,
or reorganization or otherwise would be subject to the prior claims of the subsidiary's creditors, except to the extent that ACE may itself be a creditor with recognized claims against the subsidiary. The right of our creditors, of ACE
(includingincluding the holders of preferred securities who are our creditors of ACE by virtue of a preferred securities guarantee)guarantee, to participate in the distribution of stock owned by ACEus in certain of itsour subsidiaries, including ACE'sour insurance subsidiaries, may also be subject to approval by certain insurance regulatory authorities having jurisdiction over suchthe subsidiaries. Except as otherwise
provided in the applicable prospectus supplement,Generally, the preferred securities guarantees do not limit theour ability of ACE or ACE INA to incur or issue other secured or unsecured debt, whether under an indenture or otherwise.

   ACE's
        Our obligations described herein and in any accompanying prospectus
supplement, through the applicableunder preferred securities guarantee, the ACE INA subordinated indenture, (including the ACEincluding our guarantee of the ACE INA subordinated debt securities) and any supplemental indentures theretosecurities, and the expense agreement described below, taken together, constitute a full, irrevocable and unconditional guarantee by ACEus of payments due on the preferred securities. No single document standing alone or operating in conjunction with fewer than all of the other documents constitutes suchconstitute this guarantee. It is only the combined operation of these documents that has the effect of providing a full, irrevocable and unconditional guarantee of the ACE Trust's obligations under the preferred securities. See "The ACE Trusts," "Description of Preferred Securities," and "Description of ACE INA Debt Securities and ACE Guarantee."

   ACE
        We will also agree to guarantee the obligations of each ACE Trust with respect to the common securities issued by the ACE Trust to the same extent as under the preferred securities guarantee, except thatguarantee. However, if an Eventevent of Defaultdefault under the ACE INA subordinated indenture has occurred and is continuing, the holders of preferred securities under the preferred securities guarantee will have priority over the holders of the common securities under the common securities guarantee with respect to distributions and payments on liquidation, redemption or otherwise.
Status of the Preferred Securities Guarantees
        Each preferred securities guarantee will constitute anour unsecured obligation
of ACE and will rank subordinate and junior in right of payment to all Senior
Indebtedness of ACE (including all ACEour senior indebtedness, including our debt securities and ACE's obligations as guarantor under the ACE INA subordinate indenture).indenture. (Section 6.2) For purposes of any preferred securities guarantee, "Senior Indebtedness""senior indebtedness" means all
Indebtedness of ACE (including itsour indebtedness, including our obligations as guarantor under the ACE INA subordinated indenture)indenture, outstanding at any time, except (a) except:

        Each preferred securities guarantee will rank equally with all other similar preferred securities guarantees issued by ACEus on behalf of holders of preferred securities of any other ACE Trust or any trust, partnership or other entity affiliated with ACEus which is a financing vehicle of ACEours or any affiliate of ACEours in connection with the issuance by suchthe entity of preferred securities or other similar securities that are guaranteed by ACEus pursuant to an instrument that ranks equally with or junior in right of payment to the preferred securities guarantee. 72

(Section 6.3). Each preferred securities guarantee will constitute a guarantee of payment and not of collection. Thiscollection, which means that the guaranteed party may to
the extent permitted by law,generally institute a legal proceeding directly against ACEus to enforce its rights under the preferred securities guarantee without first instituting a legal proceeding against any other person or entity, (includingincluding the applicable ACE Trust)Trust. (Section 5.4). Each
        No preferred securities guarantee will not be discharged except by payment of the Guarantee Paymentsguarantee payments in full to the extent not paid by the ACE Trust or upon distribution to the holders of the preferred securities of the corresponding ACE INA subordinated debt securities. None of the preferred securities guarantees places a limitation on the amount of additional Indebtednessindebtedness that may be incurred by ACE or ACE INA. ACE expectsus. We expect from time to time to incur additional Indebtednessindebtedness that will rank senior to the preferred securities guarantees.
Payment of Additional Amounts
        ACE will make all Guarantee Payments pursuant to the preferred securities
guarantee payments without withholding or deduction at source for, or on account of, any present or future taxes, fees, duties, assessments or governmental charges of whatever nature imposed or levied by or on behalf of the Cayman Islands or Bermuda, each, referred to in this prospectus as a taxing jurisdiction, or any political subdivision or taxing authority thereof or therein,of the taxing jurisdiction, unless suchthe taxes, fees, duties, assessments or governmental charges are required to be withheld or deducted by (x) by:
        If a withholding or deduction at source is required, ACE will, subject to certain limitations and exceptions described below, pay to the holder of any related preferred securities suchthe additional amounts as may be necessary so that every Guarantee Payment pursuantguarantee payment made to the preferred securities
guarantee made to such holder, after suchthis withholding or deduction, will not be less than the amount provided for in suchthe preferred securities guarantee to be then due and payable.
        ACE will not be required to pay any additional amounts for or on account of:

      1.  

        In addition, ACE will not pay you any additional amounts with respect to any Guarantee Payment to any holder who isguarantee payment if you are a fiduciary or partnership or other than the sole beneficial owner of the related preferred security, to the extent suchthe payment would be required by the laws of the relevant taxing jurisdiction, (oror any political subdivision or relevant taxing authority thereofof or therein)in the taxing jurisdiction, to be included in the income for tax purposes of a beneficiary or partner or settlor with respect to suchthe fiduciary or a member of suchthe partnership or a beneficial owner who would not have been entitled to suchthe additional amounts had it been the holder of suchthe preferred security. (Section 5.8)
Amendments and Assignment

   Except with respect to any changes which do not materially adversely affect
the rights of holders of the related preferred securities (in which case no
consent will be required), no
        No preferred securities guarantee may be amended without the prior approval of the holders of not less than a majority of the aggregate liquidation amount of suchthe outstanding preferred securities.securities, except with respect to any changes which do not materially adversely affect the rights of holders of the related preferred securities, in which case no consent will be required. (Section 8.2). All guarantees and agreements contained in each preferred securities guarantee shallwill bind theour successors and assigns receivers, trustees and representatives of ACE and shallwill inure to the benefit of the holders of the related preferred securities then outstanding.securities. (Section 8.1) ExceptWe may not assign our obligations under the preferred securities guarantee except in connection with a consolidation, amalgamation or merger or conveyance, transfer or lease involving ACE that is permitted under the ACE INA subordinated indenture and under which the person formed by suchthe consolidation or amalgamation or into which ACE iswe are merged or which acquires or leases theour properties and assets of ACE agrees in writing to perform ACE'sour obligations under the preferred securities guarantee, ACE may not assign its obligations
thereunder.

guarantee.
Events of Default
        An event of default under each preferred securities guarantee will occur upon theour failure of ACE to perform any of itsour payment or other obligations thereunder.under the preferred securities guarantee. The holders


of not less than a majority in aggregate liquidation amount of the related preferred securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee in respect of such preferred securities guarantee trustee or to direct the exercise of any trust or power conferred upon the Guarantee Trustee
under such preferred securities guarantee.guarantee trustee. (Section 5.4)
        Any holder of the preferred securities may institute a legal proceeding directly against ACEus to enforce its rights under suchthe preferred securities guarantee without first instituting a legal proceeding against the ACE Trust, the Guarantee Trusteeguarantee trustee or any other person or entity. (Section 5.4)

   ACE,
        We, as guarantor, isare required to file annually with the Guarantee Trusteeguarantee trustee a certificate as to whether or not ACE is in compliance with all the conditions and covenants applicable to it under the preferred securities guarantee. (Section 2.4)
Information Concerning the Guarantee Trustee
        The Guarantee Trustee,guarantee trustee, other than during the occurrence and continuance of a default by ACEus in performance of any preferred securities guarantee, undertakes to perform only suchthe duties as are specifically set forth in each preferred securities guarantee and, afterguarantee. After default with respect to any preferred securities guarantee, the guarantee trustee must exercise the same degree of care and skill as a prudent person would exercise or use in the conduct of his or her own affairs. (Section 3.1). Subject to this provision, the Guarantee Trusteepreceding sentence, the guarantee trustee is under no obligation to exercise any of the powers vested in it by any preferred securities guarantee at the request of any holder of any preferred securities unless it is offered reasonable indemnity against the costs, expenses, and liabilities that it might be incurred thereby.incur. (Section 3.2)

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Termination of the Preferred Securities Guarantees
        Each preferred securities guarantee will terminate and be of no further
force and effect upon (1) upon:

        Each preferred securities guarantee will continue to be effective or will be reinstated as the case may be, if, at any time, any holder of the related preferred securities must restore payment of any sums paid with respect to suchthe preferred securities or suchthe preferred securities guarantee. (Section 7.1)
New York Law to Govern
        Each preferred securities guarantee will be governed by and construed in accordance with the laws of the State of New York applicable to agreements made
and performed in that state.York. (Section 8.5)
The Expense Agreement
        Pursuant to the expense agreement entered into by ACEus under the restatedeach trust agreement, ACEwe will irrevocably and unconditionally guarantee to each person or entity to whom an ACE Trust becomes indebted or liable, the full payment of any costs, expenses or liabilities of the ACE Trust, other than obligations of the ACE Trust to pay to the holders of the preferred securities or other similar interests in the ACE Trust of the amounts due such holdersthem pursuant to the terms of the preferred securities or such other similar interests, as the case may be.

                                      75




DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS

   ACE
        We may issue stock purchase contracts, representing contracts obligating holdersyou to purchase from ACE,us, and obligating ACEus to sell to the holders,you, a specified number of ordinary shares at a future date or dates. The price per ordinary share may be fixed at the time the stock purchase contracts are issued or may be determined by reference to a specific formula set forth in the stock purchase contracts.
        The stock purchase contracts may be issued separately or as a part of stock purchase units consisting of a stock purchase contract and, as security for the holder'syour obligations to purchase the ordinary shares under the stock purchase contracts, either (1) either:
        The stock purchase contracts may require us to make periodic payments to the holders of the stock purchase unitsyou or vice versa, and suchthese payments may be unsecured or prefunded on some basis. The stock purchase contracts may require holdersyou to secure theiryour obligations in a specified manner, and, in certainsome circumstances, we may deliver newly issued prepaid stock purchase contracts upon release to a holderyou of any collateral securing such holder'syour obligations under the original stock purchase contract.
        The applicable prospectus supplement will describe the specific terms of any stock purchase contracts or stock purchase units and, if applicable, prepaid stock purchase contracts. TheHowever, that description in the prospectus supplement will not purport to be complete and will be qualified in its entirety by reference to
(1) to:


PLAN OF DISTRIBUTION
        ACE, ACE INA and/or any ACE Trust may sell offered securities in any one or more of the following ways from time to time: (1) 
        The applicable prospectus supplement with respect to the offered securities will set forth the specific terms of the offering of the offered securities, including including:
        The distribution of the offered securities may be effected from time to timetime:
        in one or more transactions at a fixed price or prices, which may be changed,
changed;
        Offers to purchase offered securities may be solicited by agents designated by ACE from time to time. Any such agent involved in the offer or sale of the offered securities in respect of which this prospectus is delivered will be named, and any commissions payable by ACE, ACE INA and/or the applicable ACE Trust to suchthe agent will be set forth, in the applicable prospectus supplement. Unless otherwise indicatedset forth in suchthe applicable prospectus supplement, any such agent will be acting on a reasonable best efforts basis for the period of its appointment. Any such agent may be deemed to be an underwriter, as that term is defined in the Securities Act, of the offered securities so offered and sold.
        If offered securities are sold to the public by means of an underwritten offering, either through underwriting syndicates represented by managing underwriters or directly by the managing underwriters ACE, ACE INA and/or the applicable ACE Trust will execute an underwriting agreement with an underwriter or underwriters, and the names of the specific managing underwriter or underwriters, as well as any other underwriters, andwhich will be set forth in the applicable prospectus supplement. In addition, the terms of the transaction, including commissions, discounts and any other compensation of the underwriters and dealers, if any, will be set forth in the applicable prospectus supplement, which prospectus supplement will be used by the underwriters to make resales of the offered securities. If underwriters are utilized in the sale of the offered securities, the offered securities will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions, including including:

        In addition, unless otherwise indicated in the prospectus supplement, the underwriting agreement will provide that the obligations of the underwriters are subject to certainspecified conditions precedent and that the underwriters with respect to a sale of offered securities will be obligated to purchase all suchof the offered securities of a series if any are purchased.
        ACE, ACE INA and/or the applicable ACE Trust may grant to the underwriters options to purchase additional offered securities, to cover over-allotments, if any, at the public offering price (withwith additional underwriting discounts or commissions),commissions, as may be set forth in the applicable prospectus supplement relating
thereto.supplement. If ACE, ACE INA and/or the applicable ACE Trust grants any over-allotment option, the terms of suchthe over-allotment option will be set forth in the applicable prospectus supplement relating to such offered securities.supplement.
        If a dealer is utilized in the sales of offered securities, in respect of
which this prospectus is delivered, ACE, ACE INA and/or the applicable ACE Trust will sell suchthe offered securities to the dealer as principal. The dealer may then resell suchthe offered securities to the public at varying prices to be determined by suchthe dealer at the time of resale. Any such dealer may be deemed to be an underwriter as such term is defined in the Securities Act, of the offered securities so offered and sold. The name of the dealer and the terms of the transaction will be set forth in the relatedapplicable prospectus supplement.
        Offers to purchase offered securities may be solicited directly by ACE, ACE INA and/or the applicable ACE Trust and the sale thereofof the offered securities may be made by ACE, ACE INA and/or the applicable ACE Trust directly to 77

institutional investors or others who may be deemed to be underwriters within
the meaning of the Securities Act with respect to any resale thereof.of the offered securities. The terms of any suchof these sales will be described in the relatedapplicable prospectus supplement.
        Offered securities may also be offered and sold if so indicated in the
applicable prospectus supplement, in connection with a remarketing upon their purchase, in accordance with a redemption or repayment pursuant to their terms, or otherwise by one or more remarketing firms acting as principals for their own accounts or as agents for ACE, ACE INA and/or the applicable ACE Trust. Any remarketing firm will be identified and the terms of its agreements, if any, with ACE, ACE INA and/or an ACE Trust and its compensation will be described in the applicable prospectus supplement. Remarketing firms may be deemed to be underwriters as such term is defined in the Securities Act, in connection with the offered securities remarketed thereby.by them.
        Agents, underwriters, dealers and remarketing firms may be entitled, under
relevant agreements entered into with ACE, ACE INA and/or the applicable ACE Trust, to indemnification by ACE, ACE INA and/or the applicable ACE Trust against some civil liabilities, including liabilities under the Securities Act that may arise from any untrue statement or alleged untrue statement of a material fact or any omission or alleged omission to state a material fact in this prospectus, any supplement or amendment hereto, or in the registration statement of which this prospectus forms a part, or to contribution with respect to payments which the agents, underwriters or dealers may be required to make.

   If so indicated in the prospectus supplement,
        ACE, ACE INA and/or the applicable ACE Trust willmay authorize underwriters or other persons acting as ACE's, ACE INA's and/or the applicable ACE Trust's agents to solicit offers by certainspecified institutions to purchase offered securities from ACE, ACE INA and/or the applicable ACE Trust, pursuant to contracts providing for payments and delivery on a future date.date, which will be set forth in the applicable prospectus supplement. Institutions with which suchthese contracts may be made include commercial and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions and others, butothers. However, in all cases, suchthese institutions must be approved by ACE, ACE INA and/or the applicable ACE Trust. The obligations of any purchaser under any such contract will be subject to the condition that the purchase of the offered securities shall not, at the time of delivery, be prohibited under the laws of the jurisdiction to which suchthe purchaser is subject. The underwriters and such other agents will not have any responsibility in respect of the validity or performance of suchthese contracts.


        Each series of offered securities will be a new issue and, other than the ordinary shares, which are listed on the NYSE, will have no established trading market. ACE, ACE INA and/or the applicable ACE Trust may elect to list any series of offered securities on an exchange and, in the case of the ordinary shares, on any additional exchange, but,exchange. However, unless otherwise specified in the applicable prospectus supplement, none of ACE, ACE INA or any ACE Trust shall be obligated to do so. No assurance can be given as to the liquidity of the trading market for any of the offered securities.
        Underwriters, dealers, agents and remarketing firms may be customers of, engage in transactions with, or perform services for, ACE and its subsidiaries in the ordinary course of business.

LEGAL OPINIONS
        Legal matters with respect to United States and New York law will be passed upon for ACE, ACE INA and the ACE Trusts by Mayer, Brown, Rowe & Maw LLP, Chicago, Illinois. The validity of the preferred securities under Delaware law will be passed upon on behalf of ACE, ACE INA and the ACE Trusts by Richards, Layton & Finger, P.A., Wilmington, Delaware. Legal matters with respect to Cayman Islands law will be passed upon for ACE by Maples and Calder, George Town, Grand Cayman, Cayman Islands, British West Indies. Legal matters with respect to Bermuda law will be passed upon for ACE by Conyers Dill & Pearman, Hamilton, Bermuda. Legal matters will be passed upon for the underwriters, dealers or
agents, if any, by Sidley, Austin, Brown & Wood LLP, New York, New York. Mayer, Brown, Rowe & Maw and Sidley, Austin, Brown & Wood LLP will rely on the opinion of Maples and Calder with respect to Cayman Islands law and the opinion of Conyers Dill & Pearman with respect to Bermuda law.

                                      78



EXPERTS
        The consolidated financial statements and financial statement schedules incorporated in this prospectus by reference to ACE's Annual Report on Form 10-K for the year ended December 31, 20012003 have been so incorporated in reliance on the reports of PricewaterhouseCoopers LLP, an independent accountants,registered public accounting firm, given on the authority of said firm as experts in accounting and auditing. Any audited financial statements and schedules that are incorporated or that are deemed to be incorporated by reference into this prospectus that are the subject of a report by independent registered public accountants will be so incorporated by reference in reliance upon such reports and upon the authority of such firmsfirm as experts in accounting and auditing to the extent covered by consents of these accountants filed with the SEC.


ENFORCEMENT OF CIVIL LIABILITIES UNDER
UNITED STATES FEDERAL SECURITIES LAWS
        ACE is a Cayman Islands company. In addition, some of its officers and directors, as well as some of the experts named in this prospectus, reside outside the United States, and all or much of itsACE's assets and theirsome of the officers' and directors' assets are or may be located in jurisdictions outside the United States. Therefore, investors may have difficulty effecting service of process within the United States upon those persons or recovering against ACE or them on judgments of U.S. courts, including judgments based upon the civil liability provisions of the U.S. Federal securities laws. However, investors may serve ACE with process in the United States with respect to actions against it arising out of or in connection with violations of U.S. Federal securities laws relating to offers and sales of the securities covered by this prospectus by serving ACE INA Holdings, its United States agent irrevocably appointed for that purpose.
        ACE has been advised by Maples and Calder, its Cayman Islands counsel, that there is doubt as to whether the courts of the Cayman Islands would enforce (i)
enforce:
        ACE has also been advised by Maples and Calder that there is no treaty in effect between the United States and the Cayman Islands providing for suchthis enforcement, and there are grounds upon which Cayman Islands courts may not enforce judgments of United States courts. Some remedies available under the laws of United States jurisdictions, including certainsome remedies available under the U.S. Federal securities laws, would not be allowed in Cayman Islands courts as contrary to that nation's public policy.


WHERE YOU CAN FIND MORE INFORMATION
ACE
        ACE files annual, quarterly and special reports, proxy statements and other information with the SEC. ACE's SEC filings are available to the public over the Internet at the SEC's web site at http://www.sec.gov. You may read and copy any document ACE files in the SEC's Public Reference Room, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549. You may also obtain copies of this information by mail from the Public Reference Section of the SEC, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, at prescribed rates. You may obtain information on the operation of the SEC's Public Reference Room in Washington, D.C. by calling the SEC at 1-800-SEC-0330. ACE's SEC filings are also available at the office of the New York Stock Exchange, 20 Broad Street, New York, New York 10005. For further information on obtaining copies of ACE's public filings at the NYSE, you should call (212) 656-5060.
        The SEC also maintains an Internet web site that contains reports, proxy statements and other information about issuers, like Everest Group and Everest
Holdings,ACE, that file electronically with the SEC. The address of that site is http://www.sec.gov. The SEC file number for documents filed by ACE Limited under the Exchange Act is 1-11778.

                                      79


Incorporation by Reference
        ACE is allowed to "incorporate by reference" the information it files with the SEC, which means that ACE can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus, and information that ACE files subsequently with the SEC will automatically update and supersede the information included and/or incorporated by reference in this prospectus. ACE incorporates by reference the documents listed below and any future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, after the initial filing of the registration statement that contains this prospectus and prior to the time that ACE, ACE INA and the ACE Trusts sell all of the securities offered by this prospectus:

  .   
        You may request a copy of these filings, (otherother than exhibits unless that exhibit is specifically incorporated by reference into that filing)filing, at no cost, by writing or telephoning ACE at the following address:
ACE INA
        ACE INA has no direct operations. ACE INA is directly and indirectly wholly owned by ACE. The obligations of ACE INA under its debt securities will be fully and unconditionally guaranteed by ACE.


See "Description of ACE INA Debt Securities and ACE Guarantee." ACE INA is not currently subject to the information reporting requirements under the Exchange Act. ACE INA will become subject to the reporting requirements upon the effectiveness of the registration statement that contains this prospectus, although ACE INA intends to seek and expects to receive an exemption from those requirements. So long as any guaranteed debt securities of ACE INA are outstanding, ACE will include in the footnotes to its audited consolidated financial statements summarized consolidated financial information concerning ACE INA.
The ACE Trusts
        There are no separate financial statements of the ACE Trusts in this prospectus. ACE does not believe the financial statements would be helpful to the holders of the preferred securities of the ACE Trusts because:

  .   

        Neither of the ACE Trusts is currently subject to the information reporting requirements of the Exchange Act. Each ACE Trust will become subject to thebe exempt from these requirements uponfollowing the effectiveness of the registration statement that contains this prospectus, although each ACE Trust intends to seek and expects to receive
an exemption from those requirements. If the ACE Trusts did not receive such an
exemption, the expenses of operating the ACE Trusts would increase, as would
the likelihood that ACE would exercise its option to dissolve and liquidate the
ACE Trusts early.

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prospectus.


PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14.    Other Expenses of Issuance and Distribution.
        The following table sets forth the estimated expenses in connection with the issuance and distribution of the securities registered hereby, other than underwriting discounts and commissions:
         Securities and Exchange Commission registration fee $  138,000
         Trustee's fees and expenses........................     15,000
         Printing and engraving expenses....................    150,000
         Rating agency fees.................................    412,500
         Accounting fees and expenses.......................    150,000
         Legal fees and expenses............................    250,000
         Blue Sky fees and expenses.........................     10,000
         Miscellaneous......................................    124,500
                                                             ----------
            Total........................................... $1,250,000
                                                             ==========

 
  
Securities and Exchange Commission registration fee $136,203
Trustee's fees and expenses  15,000
Printing and engraving expenses  100,000
Rating agency fees  312,500
Accounting fees and expenses  100,000
Legal fees and expenses  150,000
Blue Sky fees and expenses  10,000
Miscellaneous  176,297
  
Total $1,000,000
  

Item 15.    Indemnification of Officers and Directors.
ACE
        Section 100 of ACE's Articles of Association filed as Exhibit 4.2 to its
registration statement (File No. 333-78841), contains provisions with respect to indemnification of ACE's officers and directors. This provision provides that ACE shall indemnify, in accordance with and to the full extent now or hereafter permitted by law, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (including, without limitation, an action by or in the right of ACE), by reason of his acting as a director, officer, employee or agent of, or his acting in any other capacity for or on behalf of, ACE against any liability or expense actually and reasonably incurred by such person in respect thereof. ACE may also advance the expenses of defending any such act, suit or proceeding in accordance with and to the full extent now or hereafter permitted by law. This indemnification and advancement of expenses are not exclusive of any other right to indemnification or advancement of expenses provided by law or otherwise.
        The Companies Law (Revised) of the Cayman Islands does not set out any specific restrictions on the ability of a company to indemnify officers or directors. However, the application of basic principles and certain Commonwealth case law which is likely to be persuasive in the Cayman Islands would indicate that indemnification is generally permissible except in the
event thatif there had been fraud or willful default on the part of the officer or director or reckless disregard of his duties and obligations to the company.
        Directors and officers of ACE are also provided with indemnification against certain liabilities pursuant to a directorsdirectors' and officersofficers' liability insurance policy. Coverage is afforded for any loss that the insureds become legally obligated to pay by reason of any claim or claims first made against the insureds or any of them during the policy period from any wrongful acts that are actually or allegedly caused, committed or attempted by the insureds prior to the end of the policy period. Wrongful acts are defined as any actual or alleged error, misstatement, misleading statement or act, omission, neglect or breach of duty by the insureds while acting in their individual or collective capacities as directors or officers of ACE, or any other matter claimed against them by reason of their being directors or officers of ACE. Certain of ACE's directors are provided by their employer with indemnification against certain liabilities incurred as directors of ACE.

                                     II-1



   Reference is made to the forms of Underwriting Agreement filed as Exhibits
1.1 though 1.5 of ACE's registration statement (File No. 333-78841).
        The Underwriting Agreements which will be entered into in connection with offerings of securities registered hereunder will provide, among other things, that the underwriters are obligated, under some
II-1

circumstances, to indemnify directors, specified officers and controlling persons of ACE against specified liabilities, including liabilities under the Securities Act of 1933, as amended.
ACE INA
        Section 102(b)(7) of the Delaware General Corporation Law permits a corporation to provide in its certificate of incorporation that a director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) for acts of omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) for payments of unlawful dividends or unlawful stock repurchases or redemptions or (iv) for any transaction from which the director derived an improper personal benefit. ACE INA's Certificate of Incorporation contains such a provision.
        Under Article VI of ACE INA's By-laws as currently in effect, as well as under Section 10 of ACE INA's Certificate of Incorporation, each person who is or was a director or officer of ACE INA, or who serves or served any other enterprise or organization at the request of ACE INA, shall be indemnified by ACE INA to the full extent permitted by the Delaware General Corporation Law.
        Section 145 of the Delaware General Corporation Law provides that a corporation may indemnify any person who, by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, is made (or threatened to be made) a party to an action other than one brought by or on behalf of the corporation, against reasonable expenses (including attorneys' fees), judgments, fines and settlement payments, if the person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of such corporation and, with respect to any criminal actions, also had no reasonable cause to believe his conduct was unlawful. In the case of actions on behalf of the corporation, indemnification may extend only to reasonable expenses (including attorneys' fees) and only if such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, provided that no such indemnification is permitted in respect of any claim as to which such person is adjudged liable to the corporation for negligence or misconduct in the performance of his duty to the corporation unless and only to the extent that a court otherwise provides. To the extent that a person has been successful in defending any action (even one on behalf of the corporation), he is entitled to indemnification for reasonable expenses (including attorneys' fees).
        The indemnification provided for by the Delaware General Corporation Law is not exclusive of any other rights of indemnification, and a corporation may maintain insurance against liabilities for which indemnification is not expressly provided by the Delaware General Corporation Law. ACE INA maintains a liability insurance policy providing coverage for its directors and officers.

Item 16.    Exhibits and Financial Statement Schedules.
        See Exhibit Index included herewith which is incorporated herein by reference.
II-2

Item 17.    Undertakings.
        The undersigned registrants hereby undertake:
    (a)
    To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

    (i)
    To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

    (ii)
    To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement.
        Notwithstanding the foregoing, any increase or decrease in volume of securities offered

                                     II-2

 (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement;
      (iii)
      To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrants pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement.
    (b)
    That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initialbona fide offering thereof.

    (c)
    To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
        The undersigned registrants hereby undertake that, for purposes of determining any liability under the Securities Act of 1933, each filing of ACE's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initialbona fide offering thereof.
        The undersigned registrants hereby undertake that:
    (a)
    For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrants pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective; and

    (b)
    For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new
II-3
      registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initialbona fide offering thereof.
        Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrants pursuant to the provisions set forth or described in Item 15 of this registration statement, or otherwise, the registrants have been informed that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event thatIf a claim for indemnification against such liabilities (other than the payment by a registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrants will, unless in the opinion of their counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by them is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

                                     II-3


II-4

SIGNATURES
        Pursuant to the requirements of the Securities Act of 1933, ACE Limited certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Hamilton, Bermuda, on the 15th31st day of May, 2002.

                                              ACE LIMITED

                                              By:   /S/  PHILIP V. BANCROFT
                                                  -----------------------------
                                                    Name:  Philip V. Bancroft
                                                    August, 2004.



ACE LIMITED



By:

/s/  PHILIP V. BANCROFT      
Name: Philip V. Bancroft
Title:    Chief Financial Officer
        Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on the 15th31st day of May, 2002.

          Signature                       Title
          ---------           -----------------------------

   /S/  BRIAN DUPERREAULT     Chairman and Chief Executive
- -----------------------------   Officer; Director
      Brian Duperreault

   /S/  PHILIP V. BANCROFT    Chief Financial Officer
- -----------------------------   (Principal Financial
     Philip V. Bancroft         Officer)

     /S/  ROBERT A. BLEE      Chief Accounting Officer
- -----------------------------   (Principal Accounting
       Robert A. Blee           Officer)

              *               Vice Chairman; Director
- -----------------------------
        Donald Kramer

              *               President and Chief Operating
- -----------------------------   Officer; Director
    Dominic J. Frederico

              *               Director
- -----------------------------
      Michael G. Atieh

              *               Director
- -----------------------------
      Bruce L. Crockett

- ----------------------------- Director
      Robert G. Mendoza

              *               Director
- -----------------------------
     Robert M. Hernandez



          Signature                       Title
          ---------           -----------------------------

              *               Director
- -----------------------------
       Peter Menikoff

              *               Director
- -----------------------------
       Thomas J. Neff

              *               Director
- -----------------------------
        John A. Krol

              *               Director
- -----------------------------
         Robert Ripp

              *               Director
- -----------------------------
       Walter A. Scott

              *               Director
- -----------------------------
      Dermot F. Smurfit

              *               Director
- -----------------------------
      Robert W. Staley

              *               Director
- -----------------------------
       Gary M. Stuart

              *               Director
- -----------------------------
       Sidney F. Wentz

BY:  /S/  PETER N. MEAR
- -----------------------------
   Attorney-in-Fact


                           August, 2004.
Signature
Title



/s/  EVAN G. GREENBERG      
Evan G. Greenberg		President and Chief Executive Officer;
Director

/s/  PHILIP V. BANCROFT      
Philip V. Bancroft

Chief Financial Officer
(Principal Financial Officer)

/s/  PAUL MEDINI      
Paul Medini

Chief Accounting Officer
(Principal Accounting Officer)

*
Michael G. Atieh

Director

*
Bruce L. Crockett

Director

*
Brian Duperreault

Director

*
Dominic J. Frederico

Director

*
Robert M. Hernandez

Director

*
Peter Menikoff

Director

*
Thomas J. Neff

Director

II-5

*
John A. Krol

Director

*
Robert Ripp

Director

*
Walter A. Scott

Director

*
Dermot F. Smurfit

Director

*
Robert W. Staley

Director

*
Gary M. Stuart

Director

By:

/s/  PETER MEAR      
Peter Mear
Attorney-in-Fact

II-6

AUTHORIZED REPRESENTATIVE
        Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the undersigned as the duly authorized representative of ACE Limited in the United States.

                                               /S/  BRIAN DUPERREAULT
                                          --------------------------------------
                                                    Brian Duperreault





/s/  EVAN G. GREENBERG      
Evan G. Greenberg
August 31, 2004
II-7

SIGNATURES
        Pursuant to the requirements of the Securities Act of 1933, ACE INA Holdings Inc. certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Hamilton, Bermuda,Philadelphia, Pennsylvania, on the 15th31st day of May, 2002.

                                               ACE INA HOLDINGS INC.

                                               By: /S/  ROBERT B. JEFFERSON
                                                   -----------------------------
                                                   Robert B. Jefferson
                                                   Treasurer andAugust, 2004.



ACE INA HOLDINGS INC.



By:

/s/  FRANCIS W. MCDONNELL      
Name: Francis W. McDonnell
Title:    Chief Financial Officer
        Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on the 15th31st day of May, 2002.

          Signature                       Title
          ---------           -----------------------------

   /S/  BRIAN DUPERREAULT     Director
- -----------------------------
     Brian Duperreault

  /S/  DOMINIC J. FREDERICO
- -----------------------------
    Dominic J. Frederico      Chairman and Director

   /S/  PHILIP V. BANCROFT
- -----------------------------
     Philip V. Bancroft       Director

      /S/  SUSAN RIVERA
- ----------------------------- President and Director
        Susan Rivera          (Principal Executive Officer)

                              Treasurer and Chief Financial
  /S/  ROBERT B. JEFFERSON      Officer
- ----------------------------- (Principal Financial and
     Robert B. Jefferson        Accounting Officer)

     /S/  DONALD KRAMER
- -----------------------------
        Donald Kramer         Director

  /S/  TIMOTHY A. BOROUGHS
- -----------------------------
     Timothy A. Boroughs      Director

August, 2004.
Name
Title



/s/  SUSAN RIVERA      
Susan Rivera		President and Director
(Principal Executive Officer)

/s/  FRANCIS W. MCDONNELL      
Francis W. McDonnell

Chief Financial Officer
(Principal Financial and Accounting Officer)

*
Philip V. Bancroft

Director

*
Timothy A. Boroughs

Director

*
Brian E. Dowd

Director

*
Evan G. Greenberg

Director

*
Donald Kramer

Director

*
Gary Schmalzriedt

Director

*By:

/s/  PETER MEAR      
Peter Mear
Attorney-in-Fact



II-8

SIGNATURES
        Pursuant to the requirements of the Securities Act of 1933, ACE Capital Trust III certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Hamilton, Bermuda,Philadelphia, Pennsylvania, on the 15th31st day of May, 2002.

                                               ACE CAPITAL TRUST III
                                               By: ACE INA Holdings Inc., as
                                               Depositor

                                               By: /S/  ROBERT B. JEFFERSON
                                                   -----------------------------
                                                   Treasurer and Chief Financial
                                                   Officer


                                  August, 2004.



ACE CAPITAL TRUST III



By:

ACE INA Holdings Inc., as Depositor



By:

/s/  FRANCIS W. MCDONNELL      
Francis W. McDonnell
II-9

SIGNATURES
        Pursuant to the requirements of the Securities Act of 1933, ACE Capital Trust IV certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Hamilton, Bermuda,Philadelphia, Pennsylvania, on the 15th31st day of May, 2002.

                                               ACE CAPITAL TRUST IV
                                               BY: ACE INA Holdings Inc., as
                                                 Depositor

                                               By: /S/  ROBERT B. JEFFERSON
                                                   -----------------------------
                                                   Treasurer and Chief Financial
                                                   Officer

August, 2004.



ACE CAPITAL TRUST IV



By:

ACE INA Holdings Inc., as Depositor



By:

/s/  FRANCIS W. MCDONNELL      
Francis W. McDonnell
II-10

EXHIBIT INDEX
*1.1Form of Underwriting Agreement relating to ordinary shares, preferred shares, depositary shares, debt securities and warrants of ACE Limited.
  1.2Form of Underwriting Agreement relating to debt securities of ACE INA Holdings Inc., fully and unconditionally guaranteed by ACE Limited (incorporated by reference to Exhibit 1.2 to Amendment No. 2 tothe Registration Statement on Form S-3 of ACE Limited (No. 333-78841) filed August 12, 1999)).
*1.3Form of Underwriting Agreement relating to preferred securities issued of ACE Capital Trust III and ACE Capital Trust IV and preferred securities guarantees of ACE Limited.
*1.4Form of Underwriting Agreement relating to stock purchase contracts of ACE Limited.
*1.5Form of Underwriting Agreement relating to stock purchase units of ACE Limited.
  4.1Memorandum of Association of ACE Limited (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1 of ACE Limited (No. 33-57206)).
  4.2Articles of Association of the ACE Limited (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1 of ACE Limited (No. 33-57206)).
  4.3Special Resolutions adopted January 22, 2002 increasing the number of authorized Ordinary Sharesordinary shares and Other Sharesother shares (incorporated by reference to Exhibit 3.3 to Form 10-K of ACE Limited for the year ended December 31, 2001).
  4.4Resolutions Establishing the Terms of ACE's 7.80% Cumulative Redeemable Preferred Shares (incorporated by reference to Exhibit 4.2 to the Form 8-K of ACE Limited filed May 30, 2003).
  4.5Senior Indenture between ACE Limited and Bank OneJ.P. Morgan Trust Company, N.A.National Association (as successor to The First National Bank of Chicago), as trustee, dated March 15, 2002 (incorporated by reference to Exhibit 4.1 to the Form 8-K of ACE Limited filed March 19, 2002).

      4.5 
  4.6Form of Subordinated Indenture between ACE Limited and Bank OneJ.P. Morgan Trust Company, N.A.
            (formerly,National Association, as trustee (incorporated by reference to Exhibit 4.4 to the Registration Statement on Form S-3 of ACE Limited (No. 333-78841)).
  4.7Form of Senior Indenture between ACE INA Holdings Inc., ACE Limited and J.P. Morgan Trust Company, National Association (as successor to The First National Bank of Chicago), as trustee (incorporated by reference to Exhibit 4.44.5 to Amendment No. 2 tothe Registration Statement on Form S-3 (No. 333-78841) filed August 12,
            1999).

      4.6 Form of Senior Indenture between ACE INA Holdings Inc., ACE Limited and Bank One Trust
            Company, N.A., as trustee, dated August 1, 1999 (incorporated by reference to Exhibit 4.5 to
            Amendment No. 2 to Registration Statement on Form S-3 (No. 333-78841) filed August 12, 1999)).

      4.7 
  4.8Form of Subordinated Indenture between ACE INA Holdings Inc., ACE Limited and Bank OneJ.P. Morgan Trust Company, N.A. (formerly,National Association (as successor to The First National Bank of Chicago), as trustee (incorporated by reference to Exhibit 4.6 to Amendment No. 2 tothe Registration Statement on Form S-3 of ACE Limited (No. 333-
            78841) filed August 12, 1999)333-78841)).

 (Yen)4.8 
*4.9Form of Standard Stock Warrant Provisions.

 (Yen)4.9 
*4.10Form of Standard Debt Warrant Provisions.

     4.10 
  4.11Certificate of Trust of ACE Capital Trust III (incorporated by reference to Exhibit 4.11 to Amendment No. 2 tothe Registration Statement on Form S-3 of ACE Limited (No. 333-78841) filed August 12, 1999)).

*   *4.11 
4.12Certificate of Trust of ACE Capital Trust IV.

     4.12 IV (incorporated by reference to Exhibit 4.11 to the Registration Statement on Form S-3 of ACE Limited (No. 333-884482)).
  4.13Trust Agreement of ACE Capital Trust III (incorporated by reference to Exhibit 4.14 to Amendment
            No. 2 tothe Registration Statement on Form S-3 of ACE Limited (No. 333-78841) filed August 12, 1999)).

*   *4.13 
  4.14Assignment and Assumption Agreement and First Amendment to the Trust Agreement of ACE Capital Trust III.

*   *4.14 III (incorporated by reference to Exhibit 4.13 to the Registration Statement on Form S-3 of ACE Limited (No. 333-884482)).
  4.15Amendment No. 2 to the Trust Agreement of ACE Capital Trust III.



**4.15 III (incorporated by reference to Exhibit 4.14 to the Registration Statement on Form S-3 of ACE Limited (No. 333-884482)).
  4.16Trust Agreement of ACE Capital Trust IV.

  4.16 IV (incorporated by reference to Exhibit 4.15 to the Registration Statement on Form S-3 of ACE Limited (No. 333-884482)).
  4.17Form of Amended and Restated Trust Agreement of ACE Capital Trust III (incorporated by reference to Exhibit 4.17 to Amendment No. 2 tothe Registration Statement on Form S-3 of ACE Limited (No. 333-78841) filed
         August 12, 1999)).

**4.17 
  4.18Form of Amended and Restated Trust Agreement of ACE Capital Trust IV.

  4.18 IV (incorporated by reference to Exhibit 4.17 to the Registration Statement on Form S-3 of ACE Limited (No. 333-884482)).
  4.19Form of Preferred Securities Guarantee Agreement with respect to the preferred securities issued by ACE Capital Trust III (incorporated by reference to Exhibit 4.20 to Amendment No. 2 tothe Registration Statement on Form S-3 of ACE Limited (No. 333-78841) filed August 12, 1999)).

**4.19 
  4.20Form of Preferred Securities Guarantee Agreement with respect to the preferred securities issued by ACE Capital Trust IV.

*IV (incorporated by reference to Exhibit 4.19 to the Registration Statement on Form S-3 of ACE Limited (No. 333-884482)).
  5.1Opinion of Maples and Calder as to the legality of the ordinary shares of ACE Limited and preferred shares.

*shares of ACE Limited.
  5.2Opinion of Mayer, Brown, Rowe & Maw LLP as to the legality of the debt securities, stock warrants, debt warrants, depositary shares, preferred securities, preferred securities guarantees, stock purchase contracts and stock purchase units.

  5.3A 
  5.3Opinion of Richards, Layton & Finger, P.A. relating to ACE Capital Trust III (incorporated by
         reference to Exhibit 5.3C to Amendment No. 2 to Registration Statement on Form S-3 (No. 333-
         78841) filed August 12, 1999).

* 5.3B III.
  5.4Opinion of Richards, Layton & Finger, P.A. relating to ACE Capital Trust IV.

*
  12.1Statement regarding the computation of ratio of combined fixed charges and preference dividends to earnings.

*
  23.1Consent of Maples and Calder (included in Exhibit 5.1).

*
  23.2Consent of Mayer, Brown, Rowe & Maw LLP (included in Exhibit 5.2).
  23.3Consent of Richards, Layton & Finger, P.A. (incorporated by reference to(included in Exhibit 5.3).
23.4 to
         Amendment No. 2 to Registration Statement on Form S-3 (No. 333-78841) filed August 12, 1999).

**23.4 Consent of PricewaterhouseCoopers LLP.

**
24.1Powers of Attorney.

**Attorney with respect to ACE Limited.
  24.2Powers of Attorney with respect to ACE INA Holdings Inc.
25.1Statement of Eligibility of Bank OneJ.P. Morgan Trust Company, N.A.)National Association on Form T-1, as trustee for the ACE Limited Debt Securitiesdebt securities and as preferred securities guarantee trustee under the Preferred Securities Guarantee Agreement of ACE Limited for the benefit of the holders of Preferred Securitiespreferred securities of ACE Capital Trust III and ACE Capital Trust IV

**IV.
25.2Statement of Eligibility of Bank OneJ.P. Morgan Trust Company, N.A.National Association on Form T-1, as trustee for the ACE INA Debt Securities.

**debt securities.
25.3Statement of Eligibility of Bank OneJ.P. Morgan Trust Company, N.A.National Association on Form T-1, as property trustee for the Preferred Securitiespreferred securities of ACE Capital Trust III.

**25.4 Statement of Eligibility of Bank One Trust Company, N.A. on Form T-1, as property trustee for the
         Preferred Securities of ACE Capital TrustIII and IV.

- --------

*  To be filed by amendment.
** Filed herewith.
(Yen) 
To be filed, if necessary, subsequent to the effectiveness of this registration statement by an amendment to this registration statement or incorporated by reference pursuant to a Current Report on Form 8-K in connection with an offering of securities.



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TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
ACE LIMITED
ACE INA
THE ACE TRUSTS
USE OF PROCEEDS
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED SHARE DIVIDENDS OF ACE
GENERAL DESCRIPTION OF THE OFFERED SECURITIES
DESCRIPTION OF ACE CAPITAL STOCK
DESCRIPTION OF THE DEPOSITARY SHARES
DESCRIPTION OF ACE DEBT SECURITIES
DESCRIPTION OF ACE INA DEBT SECURITIES AND ACE GUARANTEE
DESCRIPTION OF THE WARRANTS TO PURCHASE ORDINARY SHARES OR PREFERRED SHARES
DESCRIPTION OF THE WARRANTS TO PURCHASE DEBT SECURITIES
DESCRIPTION OF PREFERRED SECURITIES
DESCRIPTION OF PREFERRED SECURITIES GUARANTEES
DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
PLAN OF DISTRIBUTION
LEGAL OPINIONS
EXPERTS
ENFORCEMENT OF CIVIL LIABILITIES UNDER UNITED STATES FEDERAL SECURITIES LAWS
WHERE YOU CAN FIND MORE INFORMATION
PART II INFORMATION NOT REQUIRED IN PROSPECTUS
SIGNATURES
AUTHORIZED REPRESENTATIVE
SIGNATURES
SIGNATURES
SIGNATURES
EXHIBIT INDEX