associated with breast implantation litigation.

The latest disbursement brings the firm's total losses for such claims to $370 million -- $250 million of which was reportedly paid out in the fiscal year 1997.

The figures were revealed in the company's latest quarterly (10Q) filing with the US Securities and Exchange Commission (SEC) for the quarter to June 30, 1998.

The news comes after the research arms of investment banks have almost uniformly said this month that ACE remains a good buy. Deutsche Bank Securities initiated coverage of ACE with a "Buy'' rating.

Merrill Lynch Global Securities headlines "The insurance company of the future'' in delivering a rating "Intermediate term buy''.

Headlined "Coming up ACEs in the third quarter'', The PaineWebber report rates the insurer's shares as "attractive.'' BT Alex. Brown reiterates ACE as a "strong buy'', forecasting a six to 12 month target price of $47 per share.

ACE shares yesterday plunged some $3 before recovering a dollar and trading around $30 by mid-afternoon.

ACE last increased its then existing reserves relating to breast implant claims by a required $200 million four years ago June 30, although the reserve increase was partially satisfied by an allocation from existing IBNR.

ACE believes that its reserves for unpaid losses and loss expenses including those arising from breast implant claims are adequate.

A number of ACE's insureds made claims relating to breast implants or related components or raw material they produced and/or sold.

Lawsuits including class actions, involving thousands of implant recipients were filed in US state and federal courts. Most of the federal cases were eventually consolidated to a Federal District Court in Alabama, although cases were in the process of being transferred back to federal courts or remanded in state courts.

On May 15, 1995, the Dow Corning Corporation, a significant defendant, filed for protection under Chapter 11 of the US Bankruptcy Code and claims against Dow Corning remain stayed, subject to the Bankruptcy Code.

The Settlement Claims Office had reported that as of October 31, 1997, it has sent out Notification of Status Letters to more than 360,000 non-opt-out domestic implant recipients who had registered with the Settlement Claims Office.

As of April 29, 1998 approximately $757 million had been distributed under the Settlement to implant recipients of the three major defendants.

Distribution has begun on certain additional payments to claimants relating to other implants since all appeals on the Settlement have been dismissed.

In addition, a multi-district litigation judge has approved the detailed terms of a settlement programme being offered by the three major defendants to eligible foreign claimants.

The Settlement Claims Office has also reported that approximately 32,500 domestic registrants exercised opt-out rights after receiving their status letters. Previously, approximately 19,000 other domestic implant recipients had exercised opt-out rights in 1994 and/or before receiving status letters.

ACE's 1994 increase in reserves was based on information made available in conjunction with the lawsuits and information made available from the Company's insureds and was predicated upon an allocation between coverage provided before and after the end of 1985 (when the company commenced underwriting operations). No additional reserves relating to breast implant claims have been added since June 30, 1994.

ACE companies provide insurance and reinsurance for a diverse, international client base. Operating in Bermuda, Ireland, the US and the UK at Lloyd's, ACE had some $3.5 billion in shareholders' equity and some $8 billion in assets at June 30.

ACE Ltd. has been hit with a further claim associated with breast implant litigation. But David Fox reports that investment analysts remain positive about the Bermuda-based insurer's prospects.