SIXTH DIVISION

JUSTICE BUCKLEY delivered the opinion of the court:

The Aetna Casualty and Surety Company (Aetna) brought a declaratory judgment action to resolve a coverage dispute with Federal Insurance Company (Federal) concerning defense costs and settlements paid on behalf of Allsteel, Incorporated (Allsteel). On cross-motions for summary judgment, the Cook County circuit court denied Federal's motion, granted Aetna's motion, and entered judgment in favor of Aetna in the amount of $960,000.

Federal filed this timely appeal and contends that the circuit court erred in granting Aetna's motion for summary judgment because Allsteel's tender of a complaint to Aetna during Aetna's policy period constituted written notice of a "wrongful act," thereby obligating Aetna to provide coverage for Allsteel in three lawsuits filed after expiration of the Aetna policy. For the following reasons, we affirm the judgment of the circuit court.

I. BACKGROUND

In 1991, Aetna issued a "claims made" pension and welfare fund fiduciary responsibility insurance policy to the Allsteel retirement income plan for the period December 31, 1991, to December 31, 1992. Under the policy, only claims made during the policy period were covered. The Aetna policy contained a claims made extension clause which stated:

"If, during the policy period hereof, the Insured shall first become aware of any Wrongful Act which may subsequently give rise to a claim against any Insured and shall during the policy period hereof give written notice to the Company of such Wrongful Act, then any such claim which is subsequently made against the Insured arising out of such Wrongful Act shall for the purposes of this policy be deemed to have been first made against the Insured during the policy period."

At the expiration of the policy period, Allsteel did not renew the Aetna policy.

Federal's fiduciary liability policy was in effect from June 30, 1994, to June 30, 1996. As part of its underwriting process, Federal asked Allsteel to complete an application before it would offer coverage. On the application, Allsteel stated that there were no "facts or circumstances which [it had] reason to suppose might afford valid grounds for any future claims that would fall within the scope of the proposed coverage." Allsteel also chose not to respond to a question concerning whether it had "given written notice under the provisions of any prior or current fiduciary liability insurance of specific facts or circumstances which might give rise to a claim being made against any insured." Federal offered coverage to Allsteel, and its policy included the following exclusion:

"5. The Company shall not be liable for Loss on account of any Claim made against the Insured:

(a) based upon, arising from, or in consequence of any circumstance if written notice of such circumstance has been given under any policy or coverage section of which this coverage is a renewal or replacement and if such prior policy or coverage section affords coverage *** for such Loss in whole or in part, as a result of such notice ***."

In 1974, Allsteel adopted a pension plan that provided retirement benefits for its employees. Under the terms of the plan, retirees received benefits as of their retirement date. In 1988 and 1991, Allsteel and its employees negotiated new collective bargaining agreements. The new agreements offered incentives for employees to take early retirement by March 31, 1991. Some Allsteel employees believed they had taken early retirement during early 1991 but learned that Allsteel had determined them ineligible for early retirement benefits.

In March of 1992, Meredith v. Allsteel, Inc., No. 92 C 1856 (N.D. Ill.), was filed in the United States District Court for the Northern District of Illinois. The plaintiffs were retired Allsteel employees who claimed they had been wrongly denied retirement benefits. The plaintiffs alleged that Allsteel had violated section 204(g) of the Employee Retirement Income Security Act (ERISA) (29 U.S.C.