FOR IMMEDIATE RELEASE

Chubb Enters Lender Environmental Insurance Market Through An Alliance With A National Speciality Broker

Coverage To Become New Standard For Commercial Real Estate Lenders

Warren, NJ, February 5, 2001 -- The Chubb Group of Insurance Companies has introduced Collateral Impairment and Environmental Liability Insurance for Financial Institutions to commercial real estate lenders. The coverage is available through Environmental Warranty, Inc. (EWI), a national insurance brokerage specializing in environmental risk protection.

The insurance, underwritten by Chubb's Department of Financial Institutions, helps protect lenders from financial loss resulting when a loan is in default and its collateral is contaminated. The policy reimburses the insured for the outstanding loan balance or cleanup costs, depending on the coverage the insured chooses. The policy also reimburses the insured for damages or cleanup costs it becomes legally obligated to pay to third parties during the policy period.

Without insurance, commercial lenders rely on due diligence to identify environmental risks on real estate collateral prior to making loans. The most common form of due diligence is a Phase I site assessment.

"Since Phase I assessments are historical and lack certainty, we envision that Chubb's Collateral Impairment and Environmental Liability Insurance will become the new standard in environmental risk transfer for all commercial real estate lenders," said EWI's CEO Charlie Perry. "We anticipate that the market, especially larger commercial lenders, will convert rapidly to this type of risk management approach over the next two years."

In addition to typically costing between $1,500 and $2,500, Perry said, a Phase I assessment may fail to discover all contamination when an engineer surveys the property. Furthermore, the Phase I cannot protect the lender against future events, nor provide financial protection.

Policies are available for terms up to 20 years on individual loan limits ranging from $1 million to $5 million, subject to an aggregate limit applicable to a portfolio of loans. This aggregate limit ranges from $10 million to $50 million. A one time per loan premium, typically ranging from $250 to $1,500, is paid at loan closing.

Collateral Impairment and Environmental Liability Insurance, on the other hand, provides a cost-effective alternative to the Phase I assessment and does not cost anything if the loan does not close, Perry said. A simple borrower questionnaire is all that is required to apply for the coverage. It normally takes one to three days to receive approval for scheduling a loan under an insurance program, versus three to four weeks to complete a Phase I report, but "it's the new 'certainty' for lenders that is expected to drive this product," Perry added.

"This new offering is the perfect way for us to round out the coverages we already provide to commercial real estate lenders," said Christine Wartella, a vice president of Chubb & Son and financial risks product manager in Chubb's Department of Financial Institutions. "Lenders and their clients can be confident that based on EWI's leadership in environmental risk management, and Chubb's reputation and financial strength, that they are buying the very best protection in the marketplace."

The member insurers of the Chubb Group of Insurance Companies form a multi-billion dollar organization providing property and casualty insurance for personal and commercial customers worldwide through 5,000 agents and brokers. Chubb's global network includes branches and affiliates throughout North America, Europe, Latin America, Asia and Australia. Founded in 1882, Chubb has built a reputation for financial strength, claims handling and innovative insurance solutions. Chubb consistently earns high ratings for financial stability from A.M. Best, Moody’s and Standard & Poor’s.

In 1964, Chubb created its Department of Financial Institutions to focus on the unique risk management issues within the financial institution sector. Chubb offers a full array of property, casualty, fidelity and professional liability products developed specifically for financial institutions.

Founded in 1992, Environmental Warranty, Inc., is a national insurance brokerage firm specializing in environmental insurance coverages. EWI helps owners, lenders, trustees, investors, securitizers and others involved with real estate cope with the growing necessity to eliminate environmental risk.