meeting to give shareholders the vote on ACE's proposed merger.

Capital Re Corp. announced the meeting to be held on October 4.

Earlier this month Capital Re announced it had suffered steep second quarter losses after paying out more claims than expected.

Its discontinued British Lloyd's operations also hit the bottom line.

Bermuda-based insurance giant ACE announced its plan to buy roughly 11 percent of Capital Re for $75 million five months ago, before launching an all out bid for complete take-over in June.

Under the deal Capital Re's stockholders were to receive 0.6 ordinary ACE shares for every share they held, subject to a maximum value of $22 per Capital Re share. The complete marriage of the two was valued at $605.9 million when it was announced with Capital Re shares hovering around $18.90.

Since then Capital Re shares have dropped sharply to the low teens.

Some analysts have described the full acquisition as a "bail-out'' since competition and reinsurance losses have weighed heavily on Capital Re since last year.

Notice of the special meeting and proxy materials will be mailed to shareholders of record on September 2. The deal follow's ACE's much more substantial cash buyout of the international and domestic property and casualty insurance businesses of another US insurer, CIGNA Corp.