SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
919 THIRD AVENUE
NEW YORK, NY 10022-3897
TEL: (212) 735-3000
FAX: (212) 735-2000
October 9, 1997
HSB Group, Inc.
HSB Capital I
c/o HSB Group, Inc.
One State Street
Hartford, Connecticut 06102
Ladies and Gentlemen:
We have acted as special counsel to HSB Group,
Inc., a Connecticut corporation (the "Company"), and HSB
Capital I, a business trust formed under the Business
Trust Act of the State of Delaware (Chapter 38, Title 12,
of the Delaware Code, 12 Del. C. SECTIONS 3801 et. seq.) (the
"Issuer Trust"), in connection with the preparation of
the Registration Statement on Form S-4 (the "Registration
Statement") to be filed by the Company and the Issuer
Trust with the Securities and Exchange Commission (the
"Commission") on the date hereof. The Registration
Statement relates to the registration under the
Securities Act of 1933, as amended (the "Act"), of
$110,000,000 aggregate liquidation amount of Global
Floating Rate Capital Securities, Series B (the "Capital
Securities") in connection with a proposed exchange offer
(the "Exchange Offer").
The Capital Securities are to be issued
pursuant to the Amended and Restated Trust Agreement of
the Issuer Trust, dated as of July 15, 1997 (the "Trust
Agreement"), among Saul L. Basch, R. Kevin Price and
Robert C. Walker, as administrative trustees, The First
National Bank of Chicago, as property trustee (the
"Property Trustee"), First Chicago Delaware Inc., as
Delaware trustee, and the Company, as sponsor.
This opinion is being furnished in accordance
with the requirements of Item 601(b)(5) of Regulation S-K
under the Act.
In connection with this opinion, we have
examined originals or copies, certified or otherwise
identified to our satisfaction, of (i) the Registration
Statement; (ii) an executed copy of the Registration
Rights Agreement, dated as of July 15, 1997 (the
"Registration Rights Agreement"), among the Company, the
Issuer Trust, and Goldman, Sachs & Co.; (iii) the form of
the Capital Securities and a specimen certificate
thereof; (iv) the Certificate of Trust of the Issuer
Trust filed with the Secretary of State of the State of
Delaware on July 10, 1997; and (v) the Trust Agreement.
We have also examined originals or copies, certified or
otherwise identified to our satisfaction, of such other
documents, certificates and records as we have deemed
necessary or appropriate as a basis for the opinions set
forth herein.
In our examination, we have assumed the legal
capacity of all natural persons, the genuineness of all
signatures, the authenticity of all documents submitted
to us as originals, the conformity to original documents
of all documents submitted to us as certified or
photostatic copies and the authenticity of the originals
of such latter documents. In making our examination of
documents executed by parties other than the Issuer
Trust, we have assumed that such parties had the power,
corporate or other, to enter into and perform all
obligations thereunder and have also assumed the due
authorization by all requisite action, corporate or
other, and execution and delivery by such parties of such
documents and the validity and binding effect thereof on
such parties. As to any facts material to the opinions
expressed herein which we did not independently establish
or verify, we have relied upon oral or written statements
and representations of officers, trustees and other
representatives of the Company, the Issuer Trust and
others.
Members of our firm are admitted to the bar in
the States of New York and Delaware, and we do not
express any opinion as to the laws of any other
jurisdiction other than the laws of the United States of
America to the extent referred to specifically herein.
Based upon and subject to the foregoing, we are
of the opinion that:
1. The Capital Securities have been duly
authorized for issuance by the Issuer Trust, and when (i)
the Registration Statement becomes effective and the
Trust Agreement has been qualified under the Trust
Indenture Act of 1939, as amended, and (ii) the Capital
Securities are duly executed, authenticated and issued in
accordance with the Trust Agreement and delivered and
issued in the Exchange Offer as contemplated by the
Registration Rights Agreement and the Registration
Statement, the Capital Securities will be duly and
validly issued, fully paid and nonassessable undivided
beneficial interests in the assets of the Issuer Trust.
We bring to your attention, however, that the holders of
the Capital Securities may be obligated, pursuant to the
Trust Agreement, to (i) provide indemnity and/or security
in connection with, and pay taxes or governmental charges
arising from, transfers of Capital Securities and the
issuance of replacement Capital Securities and (ii)
provide security and indemnity in connection with
requests of or directions to the Property Trustee in
connection with the exercise of its rights and powers
under the Trust Agreement.
2. The holders of the Capital Securities will
be entitled to the same limitation of personal liability
extended to stockholders of private corporations for
profit organized under the General Corporation Law of the
State of Delaware.
We hereby consent to the filing of this opinion
with the Commission as an exhibit to the Registration
Statement. We also consent to the reference to our firm
under the caption "Validity of Securities" in the
Registration Statement. In giving this consent, we do
not thereby admit that we are included in the category of
persons whose consent is required under Section 7 of the
Act or the rules and regulations of the Commission. This
opinion is expressed as of the date hereof, and we
disclaim any undertaking to advise you of any subsequent
changes in the facts stated or assumed herein or of any
subsequent changes in applicable law.
Very truly yours,
/S/Skadden, Arps, Slate, Meagher & Flom LLP