ACE American Lloyds Insurance Company

Bad faith is the unreasonable failure of an insurance company to honor the terms of an insurance policy and deal with a policyholder in good faith. Insurance companies who are found to have acted in bad faith can be liable for punitive damages in addition to contract damages. Some states have bad faith statutes called "Unfair Insurance Claims Practices Acts."

ACE is listed on the New York Stock Exchange and has numerous American stockholders. However, many of ACE Limited's officers and directors, who are not US residents, might be immune from civil liability under US Securities laws designed to ensure corporate accountability. This is a significant benefit of the ACE board's decision to reincorporate in Switzerland during 2008.