original sponsors of the Bermuda-based excess liability insurance company file to sell chunks of their stock.

Share sales by ACE stockholders is part of a "smooth transition'', associated with the end of a two-year restriction, said chief financial officer Mr. Chris Marshall.

Since the Securities and Exchange Commission (SEC) restriction expired March 31, companies have either sold or intend to sell about 2.7 million shares or 5.7 percent of the ACE's outstanding shares.

"The shares were restricted at the time of the initial public offering and it was expected they would come into the marketplace once the SEC-required two-year restriction expired,'' said Mr. Marshall.

"This is not a surprise. It was expected.'' For ACE, the two period expired March 31 with SEC filing commencing in early April.

The companies selling shares are among the 34 companies that joined forces to create ACE during the capacity shortage of the mid-1980s.

At the time of the IPO, ACE shares were offered at $27.50.

The stock started trading yesterday at $26.25 and hit $27 by mid-afternoon.

Mr. Marshall said setting aside money for potential breast implant litigation affected the company's share price in 1994.

Among the companies filing with the SEC to sell shares are: American Cyanamid, bought by American Home Products; Wand/Ace; ELCO -- the management corporation with a shareholding in the Lilly Corporate Centre of drug company Lilly (Eli) & Co.; Merck; IBM; BIPCO International; Bankers Trust; and Bank America.

When a company files a share sale form, known as a 144, with the SEC, it has, or intends to sell the stock.

ACE provides directors and officers liability insurance, excess liability coverage, as well as insurance for satellites.

The group's share holdings at formation totaled 13.4 million shares.

In an unrelated sale, Chase Manhattan filed June 6 to sell 350,000 shares of Bermuda company EXEL Ltd.

Chase plans to sell the shares through Goldman Sachs & Co.

Chase was a founding shareholder of EXEL.