Group, Inc., from Talegen Holdings, Inc., an indirect wholly-owned subsidiary of the Xerox Corporation.

ACE will use its newly-created US holding company to buy Westchester, which through its insurance subsidiaries, provides specialty commercial property and umbrella liability coverages in the US.

ACE said yesterday it will use cash and bank debt to finance the purchase of Westchester for aggregate cash consideration of $333 million, the estimated approximate value of the company at the closing date of the deal.

In connection with the acquisition, National Indemnity, a subsidiary of Berkshire Hathaway, will provide $750 million (75 percent of quota share of $1 billion) of reinsurance protection to Westchester with respect to its loss reserves for the 1996 and prior accident years. Subject to regulatory approval and other customary closing conditions, the acquisition is expected to be completed in January.

INDEX FALLS AGAIN STK Index falls again The Bermuda Stock Exchange index fell 1.65 points yesterday to 1,281 on a volume of 11,883 shares valued at $228,813, and bonds worth $26,375. Five issues traded, one gaining, one falling and three unchanged in value.

Bermuda Telephone Co. fell 75 cents to $32.25. Bermuda Home gained 25 cents to close at $8.88. Trading unchanged were Bank of Bermuda at $26.50, Bank of Butterfield at $13.63 and Bermuda Hospital Bermuda dollar bond at $105.50.