CONSULTING SERVICES AGREEMENT

WHEREAS, Gary Schmalzriedt ("Executive") is presently employed as Chairman of ACE Overseas General; and

WHEREAS, the Executive will retire from ACE effective September 30, 2006; and

WHEREAS, ACE considers it essential to obtain the benefit of the Executive’s experience as an executive officer of ACE during the period immediately following the Executive’s termination of employment;

WHEREAS, to induce GTS to execute this Agreement for Executive’s services as a consultant, the parties desire to enter into a written Consulting Services Agreement;

NOW, THEREFORE, in consideration of the mutual promises set forth herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

1. Termination of Employment. Executive will retire from ACE effective September 30, 2006.

2. Independent Contractor. From October 1, 2006 until September 30, 2007, ACE shall retain GTS as an independent contractor, and nothing herein shall be construed or deemed as creating any other relationship during that time. From October 1, 2006 until September 30, 2007, Executive shall not hold the title of Chairman ACE Overseas General and shall not have the authority of that officer position to act on behalf of ACE.

3. Consulting Services. From October 1, 2006 to September 30, 2007, GTS hereby agrees to provide and perform for the benefit of ACE the duties and responsibilities described below and in addition those as may be prescribed from time to time by the Board of Directors of ACE Limited and/or the Chief Executive Officer of ACE Limited ("Consulting Services"). GTS shall ensure that Executive shall devote such time and attention to the Consulting Services as may be necessary or required to complete such Consulting Services. Executive shall be permitted to travel at the request of ACE management in the performance of the Consulting Services in accordance with the ACE Executive Travel Policy. Executive shall be entitled to fly business class for all business travel on airplanes.

For the term of the Agreement, GTS through Executive will, as requested by ACE and agreed to by GTS, such agreement not to be unreasonably withheld, provide services to Employer which

relate to matters for which Executive was responsible in connection with his former position with Employer or which relate to the establishment and operation of a training program known as a "War College." Executive will serve as Dean of the War College and in such role, will design the curriculum, solicit instructors and be responsible for delivery of the program. Upon reasonable advanced notice, Executive will make himself available during the term of this Agreement to provide Consulting Services for periods of time as reasonably required by Employer and will report to Evan Greenberg concerning the provision of Consulting Services.

4. Termination of this Agreement. ACE may terminate this Agreement with or without cause at ACE’s discretion and convenience at any time prior to September 30, 2007 by giving the Executive thirty (30) days prior written notice. In addition, ACE may terminate this Agreement immediately for cause, which shall include the failure to perform the Consulting Services, without prior written notice and such termination shall be effective immediately upon notice to the Executive. In the event that this Agreement is terminated for cause, all consideration described in paragraph 5 below shall cease as of the date this Agreement is terminated. "Cause" shall mean embezzlement of ACE funds, habitual insobriety or drug abuse during business hours or while performing the Consulting Services, conviction of a crime involving moral turpitude, or gross negligence in the performance of the Executive’s Consulting Services which gross negligence has had a material adverse effect on the consolidated business, assets, properties or financial condition of ACE or its affiliates. If the Agreement is terminated without cause, Executive will still receive the consideration set forth in paragraphs 5(a), (b) and (c) below.

5. Consideration. As consideration for the GTS’s performance of the Consulting Services from October 1, 2006 through September 30, 2007, ACE shall compensate the Executive as follows: