Attached files
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8-K - FORM 8-K - CNA FINANCIAL CORP | c59090e8vk.htm |
EX-10.1 - EX-10.1 - CNA FINANCIAL CORP | c59090exv10w1.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
MEDIA CONTACT: Katrina Parker, 312-822-5167
MEDIA CONTACT: Katrina Parker, 312-822-5167
CNA ENTERS INTO AGREEMENT TO TRANSFER ITS ASBESTOS AND ENVIRONMENTAL
POLLUTION LIABILITIES TO NATIONAL INDEMNITY COMPANY
POLLUTION LIABILITIES TO NATIONAL INDEMNITY COMPANY
Chicago, July 15, 2010 CNA Financial Corporation (NYSE: CNA) announced today that its principal
operating subsidiary, Continental Casualty Company, together with several of its other insurance
subsidiaries, have entered into an agreement with National Indemnity Company (NICO), a subsidiary
of Berkshire Hathaway Inc., under which the CNA companies legacy asbestos and environmental
pollution liabilities will be transferred to NICO. Under the terms of the transaction, effective
January 1, 2010 the CNA companies will cede approximately $1.6 billion of net asbestos and
environmental pollution liabilities to NICO under a retroactive reinsurance agreement with an
aggregate limit of $4 billion. The aggregate reinsurance limit will also cover credit risk on
existing third party reinsurance related to these liabilities.
The CNA companies will pay to NICO a reinsurance premium of $2 billion and also transfer to NICO
the right to collect billed third party reinsurance receivables with a net book value of
approximately $200 million.
To secure its obligations, NICO will deposit $2.2 billion in a collateral trust for the benefit of
the CNA companies. In addition, Berkshire Hathaway Inc. has guaranteed the payment obligations of
NICO up to the full aggregate reinsurance limit as well as certain of NICOs performance
obligations under the trust agreement.
NICO will assume responsibility for claims handling and collection from third party reinsurers
related to the CNA companies asbestos and environmental pollution claims.
We believe this transaction is consistent with our focus on financial stability and delivering
improved levels of operating consistency as we effectively eliminate a significant source of
uncertainty from these legacy liabilities said Thomas F. Motamed, Chairman and Chief Executive
Officer of CNA Financial Corporation. This transaction will allow us to sharpen our focus even
further on the execution of strategies to improve and grow our on-going core businesses.
The closing of this transaction is subject to the receipt of required regulatory approvals and the
satisfaction of other closing conditions. The closing is expected to occur in the third quarter of
2010 at which time CNA expects to recognize an after-tax loss of approximately $375 million.
Serving businesses and professionals since 1897, CNA is the countrys seventh largest
commercial insurance writer and the 13th largest property and casualty company. CNAs
insurance products include standard commercial lines, specialty lines, surety, marine and other
property and casualty coverages. CNAs 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 registered trademark of CNA Financial Corporation.
FORWARD-LOOKING STATEMENT
This press release may include statements which relate to anticipated future events
(forward-looking statements) rather than actual present conditions or historical events. These
statements are made pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995 and generally include words such as believes, expects, intends,
anticipates, estimates, and similar expressions. Forward-looking statements, by their nature,
are subject to a variety of inherent risks and uncertainties that could cause actual results to
differ materially from the results projected. Many of these risks and uncertainties cannot be
controlled by CNA and include the satisfaction of the conditions to closing, including receipt of
regulatory approvals, whether the contemplated transaction will close, whether the other parties to
the contemplated transaction will fully perform their obligations to CNA, the uncertainty in
estimating loss reserves for asbestos and environmental pollution claims and the possible continued
exposure of CNA to liabilities for asbestos and environmental pollution claims. For a detailed
description of other risks and uncertainties affecting CNA, please refer to CNAs filings with the
Securities and Exchange Commission, available at www.cna.com.
Any forward-looking statements made in this press release are made by CNA as of the date of this
press release. Further, CNA does not have any obligation to update or revise any forward-looking
statement contained in this press release, even if CNAs expectations or any related events,
conditions or circumstances change.
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