CNA Structured Settlements | CNA to Sell Continental Assurance Company

CNA Financial Corp has reached a definitive agreement to sell its life insurance subsidiary, Continental Assurance Company to Wilton Re Holdings Limited, a Bermuda company subsidiary of Wilton Connecticut based Wilton Re, according to a February 10, 2014 press release. CNA had previously sold its individual life and annuity businesss to Swiss Re Life and Health America in March 2004.

CNA's move follows decisions by a number of primary companies like Allstate and Hartford to eliminate non-core life insurance activities, in the case of CNA, its structured settlement and group annuity business. Wilton Re's founders recognized the need of fresh sources of capital and risk diversification for such life insurers when it began operations in 2005. The deal was expected to bring in $615 million in proceeds and is expected to be concluded in Q2 2014. Wilton Re, which began operations in January 2005, had consolidated GAAP equity of approximately $1.5 billion at year end 2012.

A decade ago CNA divested itself of its individual annuity business with a sale to Swiss Re, in March 2004.

What does this mean to holders of CNA structured settlements?

At the time CNA underwrote structure settlements, the annuity issuer was Continental Assurance Company, the qualified assignment company was CNA Structured Settlements, Inc. There was no other guarantee unless the annuitant agreed to a guarantee from CNA structured settlements were written with a performance guarantee from CNA Financial Corporation ("CNAF guarantee") at additional cost-sometimes thousands of dollars more. See a sample of the guarantee here Download CNA_Financial_CNAF_Guarantee. One source tells us more than 50% of structured settlements funded through their master general agency, with Continental Assurance Company, included a CNAF guarantee.

How does the sale of Continental Assurance Company affect the holders of structured settlements with a CNAF guarantee?

It should not affect them at all. CNA and Wilton RE are encouraged to issue a statement of clarification for the benefit of CNA structured settlement holders and those who placed CNA structured settlements before they ceased underwriting new business.

Hogan Lovells US LLP , which coincidentally is of counsel to the National Structured Settlements Trade Association (NSSTA), acted as Wilton Re's counsel. The extent to which Hogan Lovells can assist in this regard would be appreciated.

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Source: http://docphy.com/business-industry/business/cna-structured-settlements-cna-sell-continental-assurance-company.html