CHICAGO, August 1, 2014—CNA Financial Corporation (NYSE: CNA) announced today the successful completion of the sale of Continental Assurance Company (CAC) to a subsidiary of Wilton Re Holdings Limited (Wilton Re). Additionally, Wilton Re Bermuda Limited will reinsure all of the run-off structured settlement annuities reinsured by a Bermuda-based subsidiary of CNA.
"This sale marks another important milestone for CNA, as we continue to simplify our operations and create a more focused P&C business capable of delivering consistent performance,” said Thomas F. Motamed, Chairman and Chief Executive Officer of CNA.
With the completion of the transaction, CNA has effectively disposed of Life & Group Non-Core gross GAAP insurance reserves of $3.5 billion, or 23%, representing the vast majority of its payout annuity business.
As a result of the funds withheld basis used in the reinsurance transaction involving CNA’s Bermuda-based structured settlement annuities, CNA will recognize an after-tax charge of approximately $35 million in the third quarter. This amount represents the difference in market value and book value of the funds withheld assets at the reinsurance contract’s inception. In future periods, CNA will recognize income to the extent the funds withheld assets are sold or the market value of those assets reduces to the maturity value of the securities.
Morgan Stanley & Co. LLC served as financial advisor and Hogan Lovells US LLP served as legal counsel for CNA in this transaction.
Serving businesses and professionals since 1897, CNA is the country’s eighth largest commercial insurance writer and the 13th largest property and casualty company. CNA’s insurance products include standard commercial lines, specialty lines, surety, marine and other property and casualty coverages. CNA's services include risk management, information services, underwriting, risk control and claims administration. For more information, please visit CNA at www.cna.com. "CNA" is a service mark registered by CNA Financial Corporation with the United States Patent and Trademark Office. Certain CNA Financial Corporation subsidiaries use the "CNA" service mark in connection with insurance underwriting and claims activities.