On November 17, 2003, the St. Paul Companies and Travelers announced that they had signed a definitive merger agreement that would create the nation's second largest commercial insurer, to be known as St. Paul Travelers. On February 13, 2004, St. Paul filed a joint proxy statement/prospectus/registration statement. The materially false and misleading proxy/registration statement provided historical balance sheets of both St. Paul and Travelers individually, as of September 30, 2003. It also included an un-audited pro forma condensed combined balance sheet as of September 30, 2003, which combined the historical balance sheets of St. Paul and Travelers, giving effect to the merger as if it had been consummated on September 30, 2003. On April 1, 2004, the merger was actually completed.

On July 23, 2004, St. Paul Travelers stated that the historic accounting and actuarial methods of St. Paul were being conformed to those of Travelers and that all St. Paul assets and liabilities were being recorded at fair value on the opening balance sheet. As a result, the company announced that it would take a $1.625 billion reserve charge. On this news, shares fell $0.89 per share, or 2.44%, to close at $35.66 per share on July 23, 2004. On August 5, 2004, St. Paul Travelers reported a net loss for the second quarter ended June 30, 2004, of $275 million, or $0.42 per basic and diluted share. The net loss was, in part, attributable to the reserve charge. This news caused company shares to fall an additional $1.73 per share, or 4.74%, to close at $34.75 per share on August 5, 2004.

The lawsuits allege that the prospectus, registration statement, and associated statements made by the defendants were materially false and misleading and failed to disclose, among other things: (1) that the merger was far from a "merger of equals" and was more akin to a bailout of St. Paul; (2) that the defendants knew that the methods used by St. Paul to calculate reserves were less conservative than those of Travelers and, if revealed, would impair the success of the merger; (3) that, because of these facts, the company's reserve reduction was insufficient; and (4) St. Paul Travelers' earnings and assets were materially overstated at all relevant times.

If you purchased securities issued by St. Paul Travelers during the applicable period, you may request appointment by the court as a lead plaintiff if you do so by October 12, 2004. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the court must determine that your claim is typical of the claims of other class members, and that you will adequately represent the class. Under certain circumstances, one or more class members may together serve as lead plaintiffs. Your ability to share in any recovery is not affected by the decision whether or not to serve as a lead plaintiff. You may retain any counsel of your choice to serve you in this action, or you may choose to do nothing, and remain in the class as a silent member.