In a shock announcement late last night, insurance giant ACE Limited said its top female executive, Susan Rivera, had resigned. Mrs. Rivera, 39, the head of ACE's largest US operations - ACE USA and ACE INA Holdings - was replaced by Brian Dowd, formerly president and CEO of ACE Westchester Specialty.

The news follows ACE being caught up in recent months in damning allegations against the insurance industry after New York Attorney General Eliot Spitzer launched a lawsuit against leading broker Marsh & McLennan alleging that it and some insurers it places business for had engaged in price-fixing exercises and payoffs to Marsh for business.

Mr. Spitzer's suit - after the Attorney General began an intensive probe of the insurance industry in April - named Marsh alone as a defendant but charges the world's largest commercial insurer American International Group (AIG), ACE, Hartford and Munich-American Risk Partners had participated in a “bid-rigging scheme with Marsh”.

Mrs. Rivera's sudden departure comes after it was revealed in October that she knew ACE was being pressured by leading broker Marsh to rig bids to create an appearance of competition. Mrs. Rivera, who was put in charge of ACE USA in 2002, has been widely recognised as a rising star at ACE. She joined ACE from AIG, as did many other ACE executives including chairman Brian Duperreault and CEO Evan Greenberg.

Last night ACE was mum on the reason for Mrs. Rivera's hasty departure, saying in a Press statement simply: “ACE USA appreciates her three years of service to the company.”

A company spokesman declined to answer questions on when Mrs. Rivera's resignation had become effective, or the reasons for her departure.

A Wall Street Journal report that month said that Mrs. Rivera had been warned in November 2003, in an e-mail from the president of ACE's casualty risk unit Geoffrey Gregory, that the way bids were being arranged “could potentially be construed as simply creating the appearance of competition”.

This means she would have been aware of the practice long before the high-profile investigation by New York Attorney General Eliot Spitzer was launched.

Citing unnamed sources close to events, the Wall Street Journal said that rather than put a stop to the phoney bids, ACE began referring to them by an unrevealing in-house euphemism: “indication” bids.

In early November Mr. Gregory and another employee in the same unit, Patricia Abrams - who had previously plead guilty to a misdemeanour in connection with Mr. Spitzer's investigation - were fired by ACE for their alleged involvement in the bid-rigging scandal.

Three unnamed employees were also suspended by ACE in connection with an “ongoing investigation into improper business practices”.

Meanwhile, Mr. Dowd has named both chairman and CEO of ACE USA, as well as taking on the role of chairman of ACE Westchester Specialty, the US-based excess and surplus wholesale brokerage operation that he has been head of.

Mr. Dowd also replaces Mrs. Rivera as president of ACE INA Holdings, an insurance holding company that was said to encompasses many US-based service and support functions.

In a release, ACE said Mr. Dowd will be responsible for all of ACE's retail and wholesale property and casualty insurance business in the United States and Canada - an operation that has generated over $3 billion in net earned premiums through the first nine months of 2004 and has more than 4,000 employees.

John Lupica was also named president and COO of ACE USA while Dennis Crosby has been appointed president and CEO of ACE Westchester Specialty.

Mr. Lupica was previously president, ACE Professional Risk and ACE USA Regional Operations and Mr. Crosby was ACE USA senior vice-president and regional executive for the Southeast Region.