CHUBB UNIT IS SUED OVER REQUEST FOR SURETY-BOND COLLATERAL

Federal Insurance, a domestic unit of US insurer Chubb, is being sued by the Aquila unit of Utilicorp energy group, which is seeking to block the insurer’s request that Aquila put up $570m in collateral for a surety bond that was issued to guarantee a delivery of natural gas. Aquila argues that the request is unreasonable. For its part, Chubb said that its demand for collateral was “a prudent action” in the wake of losses suffered through the collapse of US energy trader Enron. Chubb has taken an after-tax charge of $143m against fourth-quarter earnings in connection with Enron-related surety bonds.