þ |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 |
o |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 36-6169860 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
333 S. Wabash | 60604 | |
Chicago, Illinois |
(Zip Code)
|
|
(Address of principal executive offices) |
Title of each class |
Name of each exchange on
which registered |
|
Common Stock
with a par value of $2.50 per share |
New York Stock Exchange
Chicago Stock Exchange
|
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
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9
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Table of Contents
Table of Contents
Years ended December 31
(In millions)
2007
2006
2005
77.7
%
75.7
%
89.4
%
30.0
30.0
31.2
0.2
0.3
0.3
107.9
%
106.0
%
120.9
%
79.8
%
78.7
%
92.2
%
30.0
30.2
30.0
0.3
0.2
0.5
110.1
%
109.1
%
122.7
%
$
9,204
$
9,866
$
10,711
4,886
5,787
9,838
$
14,090
$
15,653
$
20,549
$
8,511
$
8,137
$
6,940
471
687
627
0.8
0.9
1.0
28.2
%
38.9
%
33.1
%
4.7
%
4.4
%
3.5
%
(a)
(b)
(c)
Table of Contents
Percent of Total
Years ended December 31
2007
2006
2005
9.1
%
9.6
%
9.0
%
7.3
7.9
7.1
6.8
7.3
7.9
5.9
5.9
5.7
3.7
4.1
4.2
3.6
4.4
3.8
3.4
3.0
2.8
3.2
3.4
4.2
2.3
2.4
3.3
54.7
52.0
52.0
100.0
%
100.0
%
100.0
%
(a)
Table of Contents
Calendar Year Ended
(In millions)
1997
1998
1999 (a)
2000
2001 (b)
2002
(c)
2003
2004
2005
2006
2007
$
28,731
$
28,506
$
26,850
$
26,510
$
29,649
$
25,719
$
31,284
$
31,204
$
30,694
$
29,459
$
28,415
5,056
5,182
6,091
7,333
11,703
10,490
13,847
13,682
10,438
8,078
6,945
$
23,675
$
23,324
$
20,759
$
19,177
$
17,946
$
15,229
$
17,437
$
17,522
$
20,256
$
21,381
$
21,470
$
5,954
$
7,321
$
6,547
$
7,686
$
5,981
$
5,373
$
4,382
$
2,651
$
3,442
$
8,713
$
11,394
12,241
11,937
11,992
10,355
8,768
6,104
4,963
7,022
14,423
16,020
15,256
15,291
12,954
9,747
7,780
7,825
17,042
18,271
18,151
17,333
13,244
10,870
10,085
18,568
20,779
19,686
17,775
13,922
12,814
20,723
21,970
20,206
18,970
15,493
21,649
22,564
21,231
20,297
22,077
23,453
22,373
22,800
24,426
23,491
$
23,675
$
23,324
$
20,759
$
19,177
$
17,946
$
15,229
$
17,437
$
17,522
$
20,256
$
21,381
$
21,470
23,904
24,306
21,163
21,502
17,980
17,650
17,671
18,513
20,588
21,601
24,106
24,134
23,217
21,555
20,533
18,248
19,120
19,044
20,975
23,776
26,038
23,081
24,058
21,109
19,814
19,760
19,631
25,067
25,711
25,590
24,587
22,547
20,384
20,425
24,636
27,754
26,000
25,594
22,983
21,076
26,338
28,078
26,625
26,023
23,603
26,537
28,437
27,009
26,585
26,770
28,705
27,541
26,997
29,211
27,317
$
(3,642
)
$
(5,887
)
$
(6,782
)
$
(7,408
)
$
(5,657
)
$
(5,847
)
$
(2,988
)
$
(2,109
)
$
(719
)
$
(220
)
$
$
27,317
$
29,211
$
27,541
$
26,585
$
23,603
$
21,076
$
20,425
$
19,631
$
20,975
$
21,601
$
7,221
7,939
10,283
11,047
16,487
15,846
14,257
13,112
10,505
8,230
$
34,538
$
37,150
$
37,824
$
37,632
$
40,090
$
36,922
$
34,682
$
32,743
$
31,480
$
29,831
$
$
(2,367
)
$
(2,125
)
$
(1,549
)
$
(1,485
)
$
(713
)
$
(712
)
$
(71
)
$
(17
)
$
(7
)
$
(6
)
$
(541
)
(533
)
(533
)
(476
)
(129
)
(123
)
(51
)
(51
)
(1
)
(1
)
(2,908
)
(2,658
)
(2,082
)
(1,961
)
(842
)
(835
)
(122
)
(68
)
(8
)
(7
)
(734
)
(3,229
)
(4,700
)
(5,447
)
(4,815
)
(5,012
)
(2,866
)
(2,041
)
(711
)
(213
)
$
(3,642
)
$
(5,887
)
$
(6,782
)
$
(7,408
)
$
(5,657
)
$
(5,847
)
$
(2,988
)
$
(2,109
)
$
(719
)
$
(220
)
$
Table of Contents
(a)
(b)
(c)
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Amount (Square Feet) of Building
Owned and Occupied or Leased
Location
and Occupied by CNA
Principal Usage
904,990
Principal executive offices of CNAF
171,406
Property and casualty insurance offices
147,815
Property and casualty insurance offices
110,131
Property and casualty insurance offices
78,655
Property and casualty insurance offices
75,544
Property and casualty insurance offices
70,004
Data Center
67,853
Property and casualty insurance offices
48,696
Property and casualty insurance offices
47,195
Property and casualty insurance offices
Table of Contents
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18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
2007
2006
Dividends
Dividends
High
Low
Declared
High
Low
Declared
$
44.29
$
39.09
$
$
33.60
$
29.88
$
51.96
42.96
0.10
33.20
30.90
49.18
37.12
0.10
36.04
33.05
41.84
32.26
0.15
40.32
36.19
Company
/ Index
2002
2003
2004
2005
2006
2007
100.00
94.14
104.49
127.85
157.50
132.85
100.00
128.68
142.69
149.70
173.34
182.86
100.00
126.41
139.58
160.68
181.36
156.04
Table of Contents
As of and for the Years Ended
December 31
(In millions, except per share data)
2007
2006
2005
2004
2003
$
9,885
$
10,376
$
9,862
$
9,924
$
11,715
$
857
$
1,137
$
243
$
446
$
(1,419
)
(6
)
(29
)
21
(21
)
2
$
851
$
1,108
$
264
$
425
$
(1,417
)
$
3.15
$
4.17
$
0.68
$
1.49
$
(6.52
)
(0.02
)
(0.11
)
0.08
(0.09
)
0.01
$
3.13
$
4.06
$
0.76
$
1.40
$
(6.51
)
$
3.15
$
4.16
$
0.68
$
1.49
$
(6.52
)
(0.02
)
(0.11
)
0.08
(0.09
)
0.01
$
3.13
$
4.05
$
0.76
$
1.40
$
(6.51
)
$
0.35
$
$
$
$
$
41,762
$
44,096
$
39,695
$
39,231
$
38,100
56,732
60,283
59,016
62,496
68,296
40,222
41,080
42,436
43,653
45,494
2,157
2,156
1,690
2,257
1,904
10,150
9,768
8,950
8,974
8,735
$
37.36
$
36.03
$
31.26
$
31.63
$
30.95
$
8,511
$
8,137
$
6,940
$
6,998
$
6,170
471
687
627
1,177
707
(a)
Table of Contents
Page No.
20
22
24
29
30
30
31
33
36
37
38
45
45
46
49
52
53
54
54
55
55
56
56
56
56
57
58
Table of Contents
Years ended December 31
(In millions, except per share data)
2007
2006
2005
$
7,484
$
7,603
$
7,569
2,433
2,412
1,892
279
275
411
10,196
10,290
9,872
5,995
6,025
6,975
14
22
24
1,520
1,534
1,543
733
757
829
(13
)
401
401
329
8,663
8,726
9,700
1,533
1,564
172
(425
)
(450
)
105
(48
)
(44
)
(24
)
1,060
1,070
253
(311
)
86
(10
)
108
(19
)
857
1,137
243
(6
)
(29
)
21
$
851
$
1,108
$
264
$
3.15
$
4.17
$
0.68
(0.02
)
(0.11
)
0.08
$
3.13
$
4.06
$
0.76
$
3.15
$
4.16
$
0.68
(0.02
)
(0.11
)
0.08
$
3.13
$
4.05
$
0.76
271.5
262.1
256.0
271.8
262.3
256.0
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Years ended December 31
2007
2006
2005
(In millions)
$
3,267
$
3,598
$
3,473
3,379
3,557
3,518
878
840
632
602
446
(87
)
(97
)
48
19
505
494
(68
)
67.4
%
72.5
%
90.3
%
32.5
31.6
32.7
0.2
0.5
0.6
100.1
%
104.6
%
123.6
%
Table of Contents
Claim and Claim Adjustment Expense Reserves
December 31
2007
2006
(In millions)
$
5,988
$
5,826
6,060
6,691
$
12,048
$
12,517
$
4,750
$
4,571
5,170
5,543
$
9,920
$
10,114
Table of Contents
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Years ended December 31
2007
2006
2005
(In millions)
$
3,506
$
3,431
$
3,372
3,484
3,411
3,367
621
554
416
619
635
382
(53
)
25
2
566
660
384
62.8
%
60.4
%
68.3
%
26.7
27.4
27.4
0.2
0.1
0.1
89.7
%
87.9
%
95.8
%
Table of Contents
Claim and Claim Adjustment Expense Reserves
December 31
2007
2006
(In millions)
$
2,585
$
2,635
5,818
5,311
$
8,403
$
7,946
$
2,090
$
2,013
4,527
4,010
$
6,617
$
6,023
Table of Contents
Years ended December 31
2007
2006
2005
(In millions)
$
618
$
641
$
704
622
698
593
(159
)
(14
)
(51
)
(36
)
(33
)
(19
)
(195
)
(47
)
(70
)
Table of Contents
Years ended December 31
2007
2006
2005
(In millions)
$
312
$
320
$
251
298
355
376
(2
)
3
9
(17
)
27
(12
)
(19
)
30
(3
)
Claim and Claim Adjustment Expense Reserves
December 31
2007
2006
(In millions)
$
2,159
$
2,511
2,951
3,528
$
5,110
$
6,039
$
1,328
$
1,453
1,787
1,999
$
3,115
$
3,452
Table of Contents
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December 31, 2007
December 31, 2006
Environmental
Environmental
Asbestos
Pollution
Asbestos
Pollution
(In millions)
$
2,352
$
367
$
2,635
$
427
(1,030
)
(125
)
(1,183
)
(142
)
$
1,322
$
242
$
1,452
$
285
Table of Contents
Table of Contents
Net Paid Losses
Net Asbestos
Percent of
Number of
in 2007
Reserves
Asbestos
Policyholders
(In millions)
(In millions)
Net Reserves
December 31, 2007
14
$
29
$
151
11
%
3
1
12
1
34
38
100
8
51
68
263
20
233
45
237
18
1,005
15
93
7
1,238
60
330
25
8
133
10
596
45
1,289
$
136
$
1,322
100
%
Net Paid
(Recovered) Losses
Net Asbestos
Percent of
Number of
in 2006
Reserves
Asbestos
December 31, 2006
Policyholders
(In millions)
(In millions)
Net Reserves
15
$
22
$
171
12
%
3
(1
)
14
1
38
(18
)
132
9
56
3
317
22
220
76
254
17
1,080
17
101
7
1,300
93
355
24
6
141
10
639
44
1,356
$
102
$
1,452
100
%
Table of Contents
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Table of Contents
Net
Environmental
Percent of
Net Paid Losses
Pollution
Environmental
Number of
in 2007
Reserves
Pollution Net
December 31, 2007
Policyholders
(In millions)
(In millions)
Reserve
10
$
9
$
6
2
%
18
8
14
6
28
17
20
8
112
17
53
22
298
9
42
17
410
26
95
39
1
31
13
96
40
438
$
44
$
242
100
%
Net
Environmental
Percent of
Net Paid Losses
Pollution
Environmental
Number of
in 2006
Reserves
Pollution Net
December 31, 2006
Policyholders
(In millions)
(In millions)
Reserve
11
$
16
$
9
3
%
18
5
14
5
29
21
23
8
115
20
58
20
346
9
46
17
461
29
104
37
1
32
11
126
44
490
$
51
$
285
100
%
Table of Contents
Years ended December 31
2007
2006
2005
(In millions)
$
2,047
$
1,842
$
1,608
186
248
147
183
288
254
25
23
25
10
103
47
(1
)
(68
)
(166
)
36
18
20
2,486
2,454
1,935
(53
)
(42
)
(43
)
$
2,433
$
2,412
$
1,892
(a)
Table of Contents
Years ended December 31
2007
2006
2005
(In millions)
$
86
$
62
$
(33
)
(183
)
(98
)
(86
)
3
53
12
(343
)
(9
)
14
(41
)
(3
)
3
(478
)
5
(90
)
117
16
38
32
18
49
7
(5
)
9
53
(10
)
(313
)
87
(13
)
2
(1
)
3
(311
)
86
(10
)
108
(19
)
$
(203
)
$
67
$
(10
)
Table of Contents
December 31, 2007
December 31, 2006
Effective Duration
Effective Duration
Fair Value
(In years)
Fair Value
(In years)
(In millions)
$
9,211
10.7
$
8,524
9.8
29,406
3.3
30,178
3.2
$
38,617
5.1
$
38,702
4.7
Table of Contents
Years ended December 31
2007
2006
2005
(In millions)
$
486
$
382
$
361
(964
)
(377
)
(451
)
(478
)
5
(90
)
146
24
73
(29
)
(8
)
(35
)
117
16
38
$
(361
)
$
21
$
(52
)
Fair
Months in
Value at
Unrealized
Date of
Loss
Loss Prior
Issuer Description and Discussion
Sale
On Sale
To Sale (a)
(In millions)
$
12,815
$
98
0-6
394
9
0-6
80
9
0-12
36
5
0-6
513
5
0-6
$
13,838
$
126
(a)
Table of Contents
December 31
2007
%
2006
%
(In millions)
$
687
2
%
$
5,138
12
%
11,409
27
13,677
31
7,675
18
5,146
12
8,952
22
7,132
16
4,299
10
3,642
8
1,058
3
912
2
34,080
82
35,647
81
5
2
31
55
123
133
1
18
14
177
204
1
452
1
452
1
116
145
568
1
597
1
60
4,497
11
5,538
13
180
1
172
2,214
5
1,852
4
46
26
$
41,762
100
%
$
44,096
100
%
Table of Contents
Percent of
Percent of
Market
Unrealized
Value
Loss
6
%
3
%
43
40
22
23
29
34
100
%
100
%
Fair Value as a Percentage of Amortized Cost
Gross
Estimated
Unrealized
December 31, 2007
Fair Value
90-99%
80-89%
70-79%
<70%
Loss
(In millions)
$
1,549
$
57
$
16
$
3
$
$
76
125
7
1
8
26
1
1
1
1
4
8
2
2
$
1,708
$
65
$
20
$
4
$
1
$
90
Fair Value as a Percentage of Amortized Cost
Gross
Estimated
Unrealized
December 31, 2006
Fair Value
90-99%
80-89%
70-79%
<70%
Loss
(In millions)
$
509
$
2
$
$
$
$
2
87
1
1
2
24
2
$
622
$
3
$
1
$
$
$
4
Table of Contents
December 31
2007
%
2006
%
(In millions)
$
816
3
%
$
5,285
15
%
16,728
50
16,311
47
6,326
19
5,222
15
5,713
17
4,933
14
3,616
11
3,188
9
$
33,199
100
%
$
34,939
100
%
December 31
2007
%
2006
%
(In millions)
$
%
$
%
122
29
111
26
224
54
242
56
73
17
75
17
6
1
$
419
100
%
$
434
100
%
Table of Contents
Security Type
Percent
Percent
of Total
of Total
December 31, 2007
MBS
CMO
ABS
CDO
Total
Security Type
Investments
(In millions)
$
1,212
$
1,460
$
$
$
2,672
23.4
%
6.4
%
5,297
2,063
27
7,387
64.5
17.7
35
309
80
424
3.7
1.0
56
206
222
484
4.2
1.2
13
396
20
429
3.8
1.0
1
28
15
44
0.4
0.1
$
1,212
$
6,862
$
3,002
$
364
$
11,440
100.0
%
27.4
%
$
1,217
$
6,975
$
3,146
$
469
$
11,807
11
%
60
%
26
%
3
%
100
%
$
$
13
$
1,064
$
28
$
1,105
9.7
%
2.6
%
$
$
13
$
1,162
$
39
$
1,214
10.3
%
2.9
%
$
$
1,142
$
3
$
51
$
1,196
10.5
%
2.9
%
$
$
1,187
$
3
$
52
$
1,242
10.5
%
3.0
%
Table of Contents
December 31
2007
2006
(In millions)
$
3,040
$
923
577
1,093
72
196
808
3,326
4,497
5,538
35
43
2
139
127
6
180
172
$
4,677
$
5,710
Table of Contents
Table of Contents
December 31, 2007
Total
Less than 1 year
1-3 years
3-5 years
More than 5 years
(In millions)
$
3,175
$
486
$
235
$
680
$
1,774
247
44
79
63
61
30,259
6,733
9,194
4,767
9,565
11,388
180
346
332
10,530
882
436
342
3
101
31
14
17
$
45,982
$
7,893
$
10,213
$
5,845
$
22,031
(a)
(b)
(c)
(d)
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Increase (Decrease)
Market
Interest
Currency
Equity
December 31, 2007
Value
Rate Risk
Risk
Risk
(In millions)
$
34,080
$
(1,900
)
$
(111
)
$
(42
)
177
(2
)
(1
)
(1
)
568
(1
)
(57
)
4,497
(4
)
(42
)
180
2,214
1
(43
)
7
36
33
1
(69
)
3
(3
)
8
41,762
(1,874
)
(147
)
(212
)
419
(20
)
45
(5
)
6
470
(20
)
(5
)
$
42,232
$
(1,894
)
$
(147
)
$
(217
)
$
2,157
$
(107
)
$
$
Table of Contents
Increase (Decrease)
Market
Interest
Currency
Equity
December 31, 2006
Value
Rate Risk
Risk
Risk
(In millions)
$
35,647
$
(1,959
)
$
(98
)
$
(91
)
204
(2
)
(2
)
597
(9
)
(60
)
60
(6
)
5,538
(5
)
(32
)
172
1,852
1
(37
)
23
1
190
1
(65
)
2
1
(2
)
44,096
(1,773
)
(141
)
(261
)
434
(21
)
41
(4
)
21
496
(21
)
(4
)
$
44,592
$
(1,794
)
$
(141
)
$
(265
)
$
2,156
$
(122
)
$
$
Table of Contents
Increase (Decrease)
Market
Interest
Currency
Equity
December 31, 2007
Value
Rate Risk
Risk
Risk
(In millions)
$
34,080
$
(2,789
)
$
(221
)
$
(106
)
177
(3
)
(1
)
(3
)
568
(2
)
(142
)
4,497
(6
)
(85
)
180
2,214
1
(109
)
7
36
48
2
(171
)
3
(8
)
41,762
(2,747
)
(317
)
(531
)
419
(30
)
45
(11
)
6
470
(30
)
(11
)
$
42,232
$
(2,777
)
$
(317
)
$
(542
)
$
2,157
$
(156
)
$
$
Table of Contents
Increase (Decrease)
Market
Interest
Currency
Equity
December 31, 2006
Value
Rate Risk
Risk
Risk
(In millions)
$
35,647
$
(2,925
)
$
(197
)
$
(227
)
204
(3
)
(5
)
597
(18
)
(149
)
60
(15
)
5,538
(7
)
(64
)
172
1,852
1
(93
)
23
1
279
2
(162
)
2
1
(4
)
(1
)
44,096
(2,652
)
(283
)
(652
)
434
(31
)
41
(10
)
21
496
(31
)
(10
)
$
44,592
$
(2,683
)
$
(283
)
$
(662
)
$
2,156
$
(180
)
$
$
Table of Contents
Consolidated Statements of Operations
Years ended December 31
2007
2006
2005
(In millions, except per share data)
$
7,484
$
7,603
$
7,569
2,433
2,412
1,892
(311
)
86
(10
)
279
275
411
9,885
10,376
9,862
6,009
6,047
6,999
1,520
1,534
1,543
994
1,027
1,034
(13
)
140
131
124
8,663
8,726
9,700
1,222
1,650
162
(317
)
(469
)
105
(48
)
(44
)
(24
)
857
1,137
243
(6
)
(29
)
21
$
851
$
1,108
$
264
$
3.15
$
4.17
$
0.68
(0.02
)
(0.11
)
0.08
$
3.13
$
4.06
$
0.76
$
3.15
$
4.16
$
0.68
(0.02
)
(0.11
)
0.08
$
3.13
$
4.05
$
0.76
271.5
262.1
256.0
271.8
262.3
256.0
Table of Contents
Consolidated Balance Sheets
December 31
2007
2006
(In millions, except share data)
$
34,257
$
35,851
568
657
2,214
1,852
46
26
4,677
5,710
41,762
44,096
94
84
8,228
9,478
1,972
2,108
330
313
142
303
1,161
1,190
270
342
1,198
855
378
277
142
142
579
592
476
503
$
56,732
$
60,283
$
28,588
$
29,636
3,598
3,784
7,106
6,645
930
1,015
63
2,851
353
221
45
50
350
1,807
2,156
2
40
401
539
2,478
2,740
476
503
46,197
50,180
385
335
683
683
2,169
2,166
7,285
6,486
103
549
(39
)
(58
)
10,201
9,826
(51
)
(58
)
10,150
9,768
$
56,732
$
60,283
Table of Contents
Consolidated Statements of Cash Flows
Years ended December 31
2007
2006
2005
(In millions)
$
851
$
1,108
$
264
6
29
(21
)
1
(1
)
48
44
24
(99
)
173
(220
)
(12
)
374
164
311
(86
)
10
(99
)
(170
)
(45
)
(252
)
(274
)
(153
)
64
48
54
1,386
2,427
3,531
(17
)
(1
)
(15
)
29
7
71
72
(2
)
788
(38
)
102
(62
)
(830
)
(771
)
(943
)
(138
)
(1,097
)
(1,344
)
42
142
(16
)
(80
)
306
55
7
(98
)
75
401
1,153
1,952
$
1,252
$
2,261
$
2,216
$
(13
)
$
(11
)
$
(47
)
$
1,239
$
2,250
$
2,169
$
(73,157
)
$
(48,757
)
$
(62,990
)
69,012
42,433
55,611
4,744
4,310
4,579
(236
)
(340
)
(482
)
340
221
316
1,347
(1,331
)
1,627
(2,788
)
2,084
(151
)
(168
)
(195
)
86
(160
)
(131
)
(45
)
14
8
57
(69
)
16
56
$
(1,121
)
$
(1,682
)
$
(1,336
)
$
39
$
36
$
20
$
(1,082
)
$
(1,646
)
$
(1,316
)
Table of Contents
2007
2006
2005
$
(95
)
$
$
759
(294
)
(568
)
(122
)
(589
)
(281
)
3
4
7
(993
)
499
18
10
2
11
(1
)
3
$
(185
)
$
(605
)
$
(837
)
$
$
$
$
(185
)
$
(605
)
$
(837
)
5
(23
)
(1
)
16
59
14
(42
)
(59
)
(14
)
42
124
125
109
$
101
$
124
$
125
$
94
$
84
$
96
7
40
29
$
101
$
124
$
125
Table of Contents
Consolidated Statements of Stockholders Equity
Years ended December 31
2007
2006
2005
(In millions)
$
$
750
$
750
(750
)
750
683
645
645
38
683
683
645
2,166
1,701
1,701
3
465
2,169
2,166
1,701
6,486
5,621
5,357
38
5
6,529
5,621
5,357
(95
)
(243
)
851
1,108
264
7,285
6,486
5,621
549
359
661
(446
)
236
(302
)
(46
)
103
549
359
(58
)
(67
)
(69
)
19
9
2
(39
)
(58
)
(67
)
(58
)
(59
)
(71
)
7
1
12
(51
)
(58
)
(59
)
$
10,150
$
9,768
$
8,950
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Fair Value of Life Settlement
Face Amount of Life Insurance
Number of Life Settlement
Contracts
Policies
December 31, 2007
Contracts
(In millions)
(In millions)
80
$
16
$
53
80
14
52
80
13
51
80
11
51
80
10
51
1,008
51
490
1,408
$
115
$
748
Table of Contents
Table of Contents
Nature of Hedge Designation
Derivatives Change in Fair Value Reflected In:
Realized investment gains or losses
Realized investment gains or losses, along
with the change in fair value of the hedged
asset or liability that is attributable to the
hedged risk
Other comprehensive income, with subsequent
reclassification to earnings when the hedged
transaction, asset or liability impacts
earnings
Consistent with fair value or cash flow above,
depending on the nature of the hedging
relationship
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Years ended December 31
2007
2006
2005
(In millions, except per share amounts)
$
857
$
1,137
$
243
(46
)
(70
)
$
857
$
1,091
$
173
271.5
262.1
256.0
0.3
0.2
271.8
262.3
256.0
$
3.15
$
4.17
$
0.68
$
3.15
$
4.16
$
0.68
Year ended December 31
2005
(In millions, except per share amounts)
$
243
(70
)
173
21
194
(2
)
$
192
$
0.76
$
0.75
Table of Contents
Table of Contents
Years ended December 31
2007
2006
2005
(In millions)
$
2,047
$
1,842
$
1,608
186
248
147
183
288
254
25
23
25
10
103
47
(1
)
(68
)
(166
)
36
18
20
2,486
2,454
1,935
(53
)
(42
)
(43
)
$
2,433
$
2,412
$
1,892
(a)
Table of Contents
Years ended December 31
2007
2006
2005
(In millions)
$
486
$
382
$
361
(964
)
(377
)
(451
)
(478
)
5
(90
)
146
24
73
(29
)
(8
)
(35
)
117
16
38
48
66
39
(313
)
87
(13
)
2
(1
)
3
$
(311
)
$
86
$
(10
)
Years ended December 31
2007
2006
2005
(In millions)
$
(847
)
$
98
$
(443
)
(47
)
78
34
2
2
(1
)
(892
)
178
(410
)
1
(10
)
(12
)
3
4
18
315
(58
)
158
$
(573
)
$
114
$
(246
)
Table of Contents
Cost or
Gross
Gross Unrealized Losses
Estimated
Amortized
Unrealized
Less than
Greater than
Fair
December 31, 2007
Cost
Gains
12 Months
12 Months
Value
(In millions)
$
594
$
93
$
$
$
687
11,776
39
223
183
11,409
7,615
144
82
2
7,675
8,867
246
149
12
8,952
4,143
208
48
4
4,299
1,216
2
160
1,058
34,211
732
662
201
34,080
177
177
246
207
1
452
120
7
11
116
366
214
12
568
$
34,754
$
946
$
674
$
201
$
34,825
Cost or
Gross
Gross Unrealized Losses
Estimated
Amortized
Unrealized
Less than
Greater than
Fair
December 31, 2006
Cost
Gains
12 Months
12 Months
Value
(In millions)
$
5,056
$
86
$
3
$
1
$
5,138
13,821
28
20
152
13,677
4,915
237
1
5
5,146
6,811
338
8
9
7,132
3,443
207
7
1
3,642
885
28
1
912
34,931
924
40
168
35,647
204
204
214
239
1
452
134
11
145
348
250
1
597
60
60
$
35,543
$
1,174
$
41
$
168
$
36,508
Table of Contents
December 31, 2007
December 31, 2006
Gross
Gross
Estimated
Unrealized
Estimated
Unrealized
Fair Value
Loss
Fair Value
Loss
(In millions)
$
5,578
$
357
$
9,829
$
24
1,689
221
1,267
12
690
57
5,248
127
3,869
138
1,022
41
11,826
773
17,366
204
1,549
76
509
2
125
8
87
2
26
4
24
8
2
2
1,708
90
622
4
13,534
863
17,988
208
98
12
10
1
1
1
3
3
102
12
14
1
$
13,636
$
875
$
18,002
$
209
Table of Contents
Table of Contents
Table of Contents
December 31, 2007
December 31, 2006
Cost or
Estimated
Cost or
Estimated
Amortized
Fair
Amortized
Fair
Cost
Value
Cost
Value
(In millions)
$
2,685
$
2,678
$
1,599
$
1,602
12,219
12,002
13,024
13,039
6,150
6,052
9,555
9,619
13,157
13,348
10,753
11,387
$
34,211
$
34,080
$
34,931
$
35,647
Table of Contents
Years ended December 31
2007
2006
2005
(In millions)
$
$
$
(1
)
7
66
14
46
(38
)
4
2
(4
)
2
1
(33
)
65
18
2
(1
)
(2
)
2
$
32
$
83
$
35
Contractual/
Estimated
Notional
Fair Value
December 31, 2007
Amount
Asset (Liability)
(In millions)
$
1,605
$
4
2
3
791
(4
)
135
44
1
$
2,582
$
(1
)
Table of Contents
Contractual/
Estimated
Notional
Fair Value
December 31, 2006
Amount
Asset (Liability)
(In millions)
$
4,795
$
(30
)
8
6
2
9
722
(3
)
79
25
$
5,644
$
(31
)
$
1
$
$
1
$
Table of Contents
Table of Contents
2007
2006
Carrying
Estimated
Carrying
Estimated
December 31
Amount
Fair Value
Amount
Fair Value
(In millions)
$
34,257
$
34,257
$
35,851
$
35,851
568
568
657
657
46
46
12
12
419
419
434
434
45
45
41
41
51
51
58
56
$
826
$
826
$
898
$
899
1,807
1,851
2,156
2,240
350
350
$
472
$
472
$
500
$
500
Table of Contents
Year ended December 31
2007
(In millions)
$
3
(2
)
(1
)
$
Years ended December 31
2007
2006
2005
(In millions)
$
(428
)
$
(577
)
$
(57
)
100
75
116
11
33
46
$
(317
)
$
(469
)
$
105
Table of Contents
Years ended December 31
2007
2006
2005
(In millions)
$
(418
)
$
(296
)
$
(115
)
2
99
(173
)
220
$
(317
)
$
(469
)
$
105
December 31
2007
2006
(In millions)
$
771
$
775
243
245
89
132
24
26
231
248
116
187
73
102
286
93
19
23
199
171
2,051
2,002
635
648
25
340
4
11
189
148
853
1,147
$
1,198
$
855
Table of Contents
Table of Contents
As of and for the years ended December 31
2007
2006
2005
(In millions)
$
29,636
$
30,938
$
31,523
8,191
10,605
13,879
21,445
20,333
17,644
4,939
4,840
5,516
231
361
1,100
120
121
115
5,290
5,322
6,731
867
835
1,335
4,447
3,439
2,711
(17
)
(13
)
(10
)
5,297
4,261
4,036
94
51
(6
)
21,532
21,445
20,333
7,056
8,191
10,605
$
28,588
$
29,636
$
30,938
(a)
(b)
Years ended December 31
2007
2006
2005
(In millions)
$
7
$
$
60
213
332
1,047
220
332
1,107
11
29
(7
)
$
231
$
361
$
1,100
Table of Contents
Claim and Claim Adjustment Expense Reserves
Life &
Corporate
Standard
Specialty
Group
& Other
(In millions)
Lines
Lines
Non-Core
Non-Core
Total
$
5,988
$
2,585
$
2,554
$
2,159
$
13,286
6,060
5,818
473
2,951
15,302
$
12,048
$
8,403
$
3,027
$
5,110
$
28,588
$
4,750
$
2,090
$
1,583
$
1,328
$
9,751
5,170
4,527
297
1,787
11,781
$
9,920
$
6,617
$
1,880
$
3,115
$
21,532
Claim and Claim Adjustment Expense Reserves
Life &
Corporate
Standard
Specialty
Group
& Other
(In millions)
Lines
Lines
Non-Core
Non-Core
Total
$
5,826
$
2,635
$
2,366
$
2,511
$
13,338
6,691
5,311
768
3,528
16,298
$
12,517
$
7,946
$
3,134
$
6,039
$
29,636
$
4,571
$
2,013
$
1,496
$
1,453
$
9,533
5,543
4,010
360
1,999
11,912
$
10,114
$
6,023
$
1,856
$
3,452
$
21,445
Table of Contents
December 31, 2007
December 31, 2006
Environmental
Environmental
(In millions)
Asbestos
Pollution
Asbestos
Pollution
$
2,352
$
367
$
2,635
$
427
(1,030
)
(125
)
(1,183
)
(142
)
$
1,322
$
242
$
1,452
$
285
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Corporate
Standard
Specialty
& Other Non-
(In millions)
Lines
Lines
Core
Total
$
(104
)
$
(25
)
$
84
$
(45
)
7
7
(104
)
(25
)
91
(38
)
(19
)
(11
)
(5
)
(35
)
$
(123
)
$
(36
)
$
86
$
(73
)
Corporate
Standard
Specialty
& Other Non-
(In millions)
Lines
Lines
Core
Total
$
208
$
(61
)
$
86
$
233
208
(61
)
86
233
(58
)
(5
)
2
(61
)
$
150
$
(66
)
$
88
$
172
Table of Contents
Corporate
Standard
Specialty
& Other Non-
(In millions)
Lines
Lines
Core
Total
$
279
$
139
$
174
$
592
60
60
279
139
234
652
154
34
57
245
433
173
291
897
(26
)
(87
)
11
(102
)
(4
)
17
4
17
(30
)
(70
)
15
(85
)
$
403
$
103
$
306
$
812
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Components of reinsurance receivables
(In millions)
December 31, 2007
December 31, 2006
$
7,056
$
8,191
987
1,050
43
48
603
658
8,689
9,947
(461
)
(469
)
$
8,228
$
9,478
Assumed/
(In millions)
Direct
Assumed
Ceded
Net
Net %
$
9,097
$
118
$
2,349
$
6,866
1.7
%
660
76
119
617
12.3
76
75
1
$
9,833
$
194
$
2,543
$
7,484
2.6
%
$
9,125
$
120
$
2,283
$
6,962
1.7
%
718
59
138
639
9.2
100
98
2
$
9,943
$
179
$
2,519
$
7,603
2.4
%
$
10,354
$
186
$
3,675
$
6,865
2.7
%
1,040
60
400
700
8.6
140
136
4
$
11,534
$
246
$
4,211
$
7,569
3.3
%
Table of Contents
Assumed/
(In millions)
Direct
Assumed
Ceded
Net
Net %
$
8,925
$
123
$
2,272
$
6,776
1.8
%
646
75
113
608
12.3
81
80
1
$
9,652
$
198
$
2,465
$
7,385
2.7
%
$
9,193
$
111
$
2,282
$
7,022
1.6
%
719
59
139
639
9.2
86
84
2
$
9,998
$
170
$
2,505
$
7,663
2.2
%
$
9,546
$
203
$
2,934
$
6,815
3.0
%
1,037
58
395
700
8.3
136
132
4
$
10,719
$
261
$
3,461
$
7,519
3.5
%
(In millions)
Direct
Assumed
Ceded
Net
$
14,089
$
1
$
14,071
$
19
15,652
1
15,633
20
20,548
1
20,528
21
Table of Contents
Years ended December 31
(In millions)
Aggregate Cover
CCC Cover
All Other
Total
$
$
$
$
$
$
$
$
$
$
$
(11
)
$
(11
)
(113
)
(113
)
(40
)
(19
)
(59
)
$
$
(40
)
$
(143
)
$
(183
)
$
(17
)
$
$
48
$
31
(244
)
(154
)
(398
)
(27
)
(27
)
(57
)
(66
)
(34
)
(157
)
$
(318
)
$
(66
)
$
(167
)
$
(551
)
Table of Contents
Years ended December 31
(In millions)
2007
2006
2005
$
$
(152
)
$
(328
)
(7
)
(112
)
(24
)
(111
)
$
$
(183
)
$
(551
)
December 31
(In millions)
2007
2006
31
31
150
150
200
200
399
398
69
69
546
546
348
348
149
149
241
241
24
24
$
2,157
$
2,156
Table of Contents
(In millions)
$
350
400
70
1,347
(10
)
$
2,157
Table of Contents
Pension Benefits
Postretirement Benefits
(In millions)
2007
2006
2007
2006
$
2,602
$
2,636
$
177
$
210
23
26
2
2
145
142
9
10
7
7
(7
)
(111
)
(60
)
(15
)
(34
)
(147
)
(152
)
(18
)
(19
)
2
(2
)
8
1
2,503
2,602
162
177
2,258
2,107
187
226
30
79
11
12
7
7
(147
)
(152
)
(18
)
(19
)
3
(2
)
2,331
2,258
$
(172
)
$
(344
)
$
(162
)
$
(177
)
$
3
$
$
$
(175
)
(344
)
(162
)
(177
)
$
(172
)
$
(344
)
$
(162
)
$
(177
)
$
$
(1
)
$
$
(3
)
6
(128
)
(146
)
242
381
37
55
$
239
$
386
$
(91
)
$
(91
)
Table of Contents
Pension Benefits
Postretirement Benefits
(In millions)
2007
2006
2007
2006
$
91
$
2,351
$
162
$
177
2,148
Years ended December 31
(In millions)
2007
2006
2005
$
23
$
26
$
27
145
142
145
(174
)
(162
)
(156
)
2
2
2
11
25
21
$
7
$
33
$
39
$
2
$
2
$
3
9
10
10
(18
)
(28
)
(28
)
3
4
4
$
(4
)
$
(12
)
$
(11
)
Pension
Postretirement
(In millions)
Benefits
Benefits
$
$
(16
)
3
2
$
3
$
(14
)
Table of Contents
December 31
2007
2006
6.000
%
5.750
%
8.000
8.000
5.830
5.830
5.875
%
5.625
%
December 31
2007
2006
2005
5.750
%
5.625
%
5.875
%
8.000
8.000
8.000
5.830
5.830
5.830
5.625
%
5.500
%
5.875
%
Percentage of Plan Assets
December 31
2007
2006
25
%
48
%
20
26
28
22
26
2
1
2
100
%
100
%
Table of Contents
Pension
Postretirement
(In millions)
Benefits
Benefits
$
154
$
12
153
12
153
13
155
13
158
13
846
66
Table of Contents
2007
Weighted-
Average
Option
Number
Price per
of Awards
Award
1,694,900
$
28.86
333,800
41.86
(532,950
)
29.88
(87,200
)
34.37
1,408,550
$
31.21
1,296,437
$
30.75
705,150
$
27.96
$
13.83
Table of Contents
Future
Future
Minimum
Minimum
Lease
Sublease
(In millions)
Payments
Receipts
$
44
$
3
41
3
38
3
34
3
29
3
61
2
$
247
$
17
Table of Contents
Table of Contents
Statutory Capital and Surplus
Statutory Net Income
December 31
Years Ended December 31
2007
2006
2007
2006
2005
(In millions)
$
8,511
$
8,137
$
575
$
721
$
550
471
687
27
67
65
(a)
Table of Contents
Years ended December 31
(In millions)
2007
2006
2005
$
851
$
1,108
$
264
(420
)
127
(136
)
(159
)
(11
)
(131
)
(579
)
116
(267
)
3
(6
)
4
30
42
(24
)
97
80
(33
)
3
4
18
(446
)
236
(302
)
$
405
$
1,344
$
(38
)
December 31
(In millions)
2007
2006
$
123
$
93
(96
)
(147
)
(46
)
76
649
$
103
$
549
Table of Contents
Table of Contents
Year ended December 31, 2007
Standard
Specialty
Life & Group
Corporate & Other
(In millions)
Lines
Lines
Non-Core
Non-Core
Eliminations
Total
$
3,379
$
3,484
$
618
$
7
$
(4
)
$
7,484
878
621
622
312
2,433
47
188
36
8
279
4,304
4,293
1,276
327
(4
)
10,196
2,279
2,187
1,312
217
5,995
6
7
1
14
761
744
15
1,520
338
187
199
13
(4
)
733
43
185
43
130
401
3,427
3,310
1,570
360
(4
)
8,663
877
983
(294
)
(33
)
1,533
(275
)
(317
)
135
32
(425
)
(47
)
(1
)
(48
)
602
619
(159
)
(2
)
1,060
(149
)
(81
)
(56
)
(25
)
(311
)
52
28
20
8
108
$
505
$
566
$
(195
)
$
(19
)
$
$
857
$
2,269
$
1,819
$
2,201
$
2,400
$
$
8,689
$
1,664
$
605
$
26
$
(11
)
$
$
2,284
$
12,048
$
8,403
$
3,027
$
5,110
$
$
28,588
1,483
1,948
162
5
3,598
7,106
7,106
26
1
903
930
$
311
$
365
$
485
$
$
$
1,161
Table of Contents
Year ended December 31, 2006
Standard
Specialty
Life & Group
Corporate & Other
(In millions)
Lines
Lines
Non-Core
Non-Core
Eliminations
Total
$
3,557
$
3,411
$
641
$
(1
)
$
(5
)
$
7,603
840
554
698
320
2,412
44
156
66
9
275
4,441
4,121
1,405
328
(5
)
10,290
2,579
2,060
1,195
190
1
6,025
18
4
22
805
714
14
1
1,534
319
219
201
24
(6
)
757
(13
)
(13
)
66
151
58
126
401
3,787
3,148
1,468
328
(5
)
8,726
654
973
(63
)
1,564
(208
)
(295
)
49
4
(450
)
(43
)
(1
)
(44
)
446
635
(14
)
3
1,070
72
32
(50
)
32
86
(24
)
(7
)
17
(5
)
(19
)
$
494
$
660
$
(47
)
$
30
$
$
1,137
$
2,617
$
1,939
$
2,378
$
3,013
$
$
9,947
$
1,672
$
805
$
52
$
(53
)
$
$
2,476
$
12,517
$
7,946
$
3,134
$
6,039
$
$
29,636
1,633
1,973
173
5
3,784
6,645
6,645
35
980
1,015
$
338
$
352
$
500
$
$
$
1,190
Table of Contents
Year ended December 31, 2005
Standard
Specialty
Life & Group
Corporate & Other
(In millions)
Lines
Lines
Non-Core
Non-Core
Eliminations
Total
$
3,518
$
3,367
$
704
$
(8
)
$
(12
)
$
7,569
632
416
593
251
1,892
17
140
95
159
411
4,167
3,923
1,392
402
(12
)
9,872
3,176
2,298
1,160
343
(2
)
6,975
19
4
1
24
816
702
22
3
1,543
338
221
257
23
(10
)
829
23
130
61
115
329
4,372
3,355
1,501
484
(12
)
9,700
(205
)
568
(109
)
(82
)
172
118
(162
)
58
91
105
(24
)
(24
)
(87
)
382
(51
)
9
253
30
4
(30
)
(14
)
(10
)
(11
)
(2
)
11
2
$
(68
)
$
384
$
(70
)
$
(3
)
$
$
243
Table of Contents
Years ended December 31
(In millions)
2007
2006
2005
$
628
$
603
$
577
3,527
3,910
3,620
4,155
4,513
4,197
2,669
2,679
2,583
468
436
393
293
287
296
782
751
655
4,212
4,153
3,927
257
384
311
911
889
900
52
82
151
1,220
1,355
1,362
119
129
71
183
231
317
302
360
388
(4
)
(5
)
(12
)
$
9,885
$
10,376
$
9,862
Table of Contents
Years ended December 31
(In millions)
2007
2006
2005
$
13
$
17
$
15
6
(2
)
7
19
15
22
(25
)
(51
)
1
(6
)
(36
)
23
7
(2
)
$
(6
)
$
(29
)
$
21
December 31
(In millions)
2007
2006
$
185
$
317
1
33
7
40
4
3
197
393
172
308
2
17
174
325
$
23
$
68
Table of Contents
Quarterly Financial Data
Full
First
Second
Third
Fourth
Year
(In millions, except per share data)
$
2,517
$
2,469
$
2,484
$
2,415
$
9,885
$
426
$
318
$
230
$
200
$
1,174
(132
)
(91
)
(56
)
(38
)
(317
)
294
227
174
162
857
2
(10
)
2
(6
)
$
296
$
217
$
174
$
164
$
851
$
1.08
$
0.84
$
0.64
$
0.59
$
3.15
0.01
(0.04
)
0.01
(0.02
)
$
1.09
$
0.80
$
0.64
$
0.60
$
3.13
Quarterly Financial Data
Full
First
Second
Third
Fourth
Year
(In millions, except per share data)
$
2,501
$
2,412
$
2,620
$
2,843
$
10,376
$
343
$
341
$
436
$
486
$
1,606
(108
)
(100
)
(131
)
(130
)
(469
)
235
241
305
356
1,137
(6
)
(2
)
6
(27
)
(29
)
$
229
$
239
$
311
$
329
$
1,108
$
0.84
$
0.87
$
1.13
$
1.33
$
4.17
(0.02
)
(0.01
)
0.02
(0.10
)
(0.11
)
$
0.82
$
0.86
$
1.15
$
1.23
$
4.06
$
0.84
$
0.87
$
1.13
$
1.32
$
4.16
(0.02
)
(0.01
)
0.02
(0.10
)
(0.11
)
$
0.82
$
0.86
$
1.15
$
1.22
$
4.05
Table of Contents
Table of Contents
Table of Contents
CNA Financial Corporation
Chicago, Illinois
Table of Contents
February 22, 2008
Table of Contents
Chicago, Illinois
February 22, 2008
Table of Contents
Table of Contents
137
138
FIRST
POSITION AND
BECAME
OFFICES HELD
EXECUTIVE
WITH
OFFICER OF
NAME
REGISTRANT
AGE
CNA
PRINCIPAL OCCUPATION DURING PAST FIVE YEARS
Stephen W. Lilienthal
Officer, CNA
Financial
Corporation
57
2001
Michael Fusco
President, Chief
Actuary, CNA
insurance companies
59
2004
Jonathan D. Kantor
President, General
Counsel and
Secretary
52
1997
James R. Lewis
Executive Officer,
Property and
Casualty
Operations,
CNA
insurance
companies
58
2002
D. Craig Mense
President & Chief
Financial Officer
56
2004
Table of Contents
Number of securities
Number of securities to
remaining available for
be issued upon
Weighted average exercise
future issuance under
exercise of outstanding
price of outstanding
equity compensation plans
options, warrants and
options, warrants and
(excluding securities
rights
rights
reflected in column (a))
(a)
(b)
(c)
1,408,550
$
31.21
1,765,125
1,408,550
$
31.21
1,765,125
Table of Contents
139
140
141
142
143
Page
Number
(a
)
1.
66
67
68
70
71
133
(a
)
2.
143
144
149
150
150
151
(a
)
3.
Exhibit
Description of Exhibit
Number
(3
)
3.1
3.1.1
3.1.2
3.2
(4
)
4.1
(10
)
10.1
Table of Contents
Exhibit
Description of Exhibit
Number
10.2
10.3
10.3.1
10.3.2
10.3.3
10.3.4
10.3.5
10.3.6
10.3.7
10.3.8
10.3.9
10.3.10
10.4
Table of Contents
Exhibit
Description of Exhibit
Number
10.5
10.6
10.6.1
10.6.2
10.6.3
10.6.4
10.7
10.7.1
10.7.2
10.8
10.9
10.10
10.11
10.11.1
Table of Contents
Exhibit
Description of Exhibit
Number
10.12
10.13
10.14
10.15
10.16
10.16.1
(21
)
21.1
(23
)
23.1
(31
)
31.1
31.2
(32
)
32.1
32.2
(b)
None.
(c)
None.
included in this Form 10-K, but are on file with the Securities and Exchange Commission.
Table of Contents
December 31, 2007
Cost or
Estimated
Amortized
Fair
Carrying
Cost
Value
Value
(In millions)
$
769
$
860
$
860
7,615
7,675
7,675
3,277
3,350
3,350
832
914
914
20,502
20,223
20,223
1,216
1,058
1,058
34,211
34,080
34,080
5
5
5
18
18
18
154
154
154
177
177
177
3
3
3
243
449
449
120
116
116
366
$
568
568
2,214
2,214
9
46
4,494
4,497
180
180
$
41,651
$
41,762
Table of Contents
Years ended December 31 | 2007 | 2006 | 2005 | |||||||||
(In millions) | ||||||||||||
Revenues:
|
||||||||||||
Net investment income
|
$ | 20 | $ | 21 | $ | 18 | ||||||
Realized investment losses
|
(6 | ) | (7 | ) | (29 | ) | ||||||
Other income
|
| 1 | | |||||||||
|
||||||||||||
|
||||||||||||
Total revenues
|
14 | 15 | (11 | ) | ||||||||
|
||||||||||||
|
||||||||||||
Expenses:
|
||||||||||||
Administrative and general
|
3 | 2 | 9 | |||||||||
Interest
|
131 | 118 | 110 | |||||||||
|
||||||||||||
|
||||||||||||
Total expenses
|
134 | 120 | 119 | |||||||||
|
||||||||||||
|
||||||||||||
Loss from operations before income taxes and
equity in net income of subsidiaries
|
(120 | ) | (105 | ) | (130 | ) | ||||||
Income tax benefit
|
42 | 37 | 46 | |||||||||
|
||||||||||||
|
||||||||||||
Loss before equity in net income of subsidiaries
|
(78 | ) | (68 | ) | (84 | ) | ||||||
Equity in net income of subsidiaries
|
929 | 1,176 | 348 | |||||||||
|
||||||||||||
Net Income
|
$ | 851 | $ | 1,108 | $ | 264 | ||||||
|
144
December 31 | 2007 | 2006 | ||||||
(In millions, except share data) | ||||||||
Assets:
|
||||||||
Investment in subsidiaries
|
$ | 11,795 | $ | 11,512 | ||||
Fixed maturity securities available-for-sale, at fair value (amortized cost of $6 and $9)
|
6 | 9 | ||||||
Equity securities available-for-sale, at fair value (cost of $1 and $1)
|
1 | 1 | ||||||
Short term investments
|
359 | 280 | ||||||
Receivables for securities sold and collateral
|
13 | 1 | ||||||
Amounts due from affiliates
|
46 | 37 | ||||||
Other assets
|
6 | 7 | ||||||
|
||||||||
|
||||||||
Total assets
|
$ | 12,226 | $ | 11,847 | ||||
|
||||||||
|
||||||||
Liabilities and Stockholders Equity:
|
||||||||
Liabilities:
|
||||||||
Short term debt
|
350 | | ||||||
Long term debt
|
1,686 | 2,035 | ||||||
Other liabilities
|
40 | 44 | ||||||
|
||||||||
|
||||||||
Total liabilities
|
2,076 | 2,079 | ||||||
|
||||||||
|
||||||||
Stockholders equity:
|
||||||||
Common stock ($2.50 par value; 500,000,000 shares authorized; 273,040,243 shares
issued; and 271,662,278 and 271,108,480 shares outstanding)
|
683 | 683 | ||||||
Additional paid-in capital
|
2,169 | 2,166 | ||||||
Retained earnings
|
7,285 | 6,486 | ||||||
Accumulated other comprehensive income
|
103 | 549 | ||||||
Treasury stock (1,377,965 and 1,931,763 shares), at cost
|
(39 | ) | (58 | ) | ||||
|
||||||||
|
10,201 | 9,826 | ||||||
|
||||||||
Notes receivable for the issuance of common stock
|
(51 | ) | (58 | ) | ||||
|
||||||||
|
||||||||
Total stockholders equity
|
10,150 | 9,768 | ||||||
|
||||||||
|
||||||||
Total liabilities and stockholders equity
|
$ | 12,226 | $ | 11,847 | ||||
|
145
Years ended December 31 | 2007 | 2006 | 2005 | |||||||||
(In millions) | ||||||||||||
Cash Flows from Operating Activities:
|
||||||||||||
Net income
|
$ | 851 | $ | 1,108 | $ | 264 | ||||||
Adjustments to reconcile net income to net cash flows provided by operating activities:
|
||||||||||||
Income of subsidiaries
|
(929 | ) | (1,176 | ) | (348 | ) | ||||||
Dividends received from subsidiaries
|
270 | 91 | 127 | |||||||||
Realized investment losses
|
6 | 7 | 29 | |||||||||
Other, net
|
(54 | ) | 7 | (59 | ) | |||||||
|
||||||||||||
|
||||||||||||
Total adjustments
|
(707 | ) | (1,071 | ) | (251 | ) | ||||||
|
||||||||||||
|
||||||||||||
Net cash flows provided by operating activities
|
144 | 37 | 13 | |||||||||
|
||||||||||||
|
||||||||||||
Cash Flows from Investing Activities:
|
||||||||||||
Proceeds from fixed maturity securities
|
3 | 1 | 8 | |||||||||
Change in short term investments
|
(63 | ) | (60 | ) | 563 | |||||||
Capital contributions to subsidiaries
|
(1 | ) | (3 | ) | (41 | ) | ||||||
Return of capital from subsidiaries
|
1 | 19 | | |||||||||
Other, net
|
(18 | ) | (7 | ) | (64 | ) | ||||||
|
||||||||||||
|
||||||||||||
Net cash flows provided (used) by investing activities
|
(78 | ) | (50 | ) | 466 | |||||||
|
||||||||||||
|
||||||||||||
Cash Flows from Financing Activities:
|
||||||||||||
Dividends paid to stockholders
|
(95 | ) | | | ||||||||
Proceeds from the issuance of long term debt
|
| 746 | | |||||||||
Principal payments on debt
|
| (250 | ) | (493 | ) | |||||||
Payment to repurchase Series H Issue preferred stock
|
| (993 | ) | | ||||||||
Proceeds from the issuance of common stock
|
| 499 | | |||||||||
Stock options exercised
|
18 | 10 | 2 | |||||||||
Other, net
|
11 | 1 | 12 | |||||||||
|
||||||||||||
|
||||||||||||
Net cash flows provided (used) by financing activities
|
(66 | ) | 13 | (479 | ) | |||||||
|
||||||||||||
|
||||||||||||
Net change in cash
|
| | | |||||||||
Cash, beginning of year
|
| | | |||||||||
|
||||||||||||
|
||||||||||||
Cash, end of year
|
$ | | $ | | $ | | ||||||
|
146
December 31 | 2007 | 2006 | ||||||
(In millions) | ||||||||
Senior notes:
|
||||||||
6.450%, face amount of $150, due January 15, 2008
|
$ | 150 | $ | 150 | ||||
6.600%, face amount of $200, due December 15, 2008
|
200 | 200 | ||||||
6.000%, face amount of $400, due August 15, 2011
|
399 | 398 | ||||||
5.850%, face amount of $549, due December 15, 2014
|
546 | 546 | ||||||
6.500%, face amount of $350, due August 15, 2016
|
348 | 348 | ||||||
6.950%, face amount of $150, due January 15, 2018
|
149 | 149 | ||||||
Debenture, 7.250%, face amount of $243, due November 15, 2023
|
241 | 241 | ||||||
Urban Development Action Grant, 1.00%, due May 7, 2019
|
3 | 3 | ||||||
|
||||||||
|
||||||||
Total
|
$ | 2,036 | $ | 2,035 | ||||
|
147
148
Gross Insurance Reserves | Insurance | Amortiz- | ||||||||||||||||||||||||||||||||||||||||||
Claim | Claims and | ation | ||||||||||||||||||||||||||||||||||||||||||
Deferred | And Claim | Future | Policy- | Net | Policy- | of Deferred | Other | Net | ||||||||||||||||||||||||||||||||||||
Acquisition | Adjustment | Policy | Unearned | holders | Net Earned | Investment | holders | Acquisition | Operating | Written Pre- | ||||||||||||||||||||||||||||||||||
Costs | Expense | Benefits | Premium | Funds | Premiums | Income (a) | Benefits | Cost | Expenses | miums (b) | ||||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||||||||
December 31, 2007
|
||||||||||||||||||||||||||||||||||||||||||||
Standard Lines
|
$ | 311 | $ | 12,048 | $ | | $ | 1,483 | $ | 26 | $ | 3,379 | $ | 878 | $ | 2,285 | $ | 761 | $ | 381 | $ | 3,267 | ||||||||||||||||||||||
Specialty Lines
|
365 | 8,403 | | 1,948 | 1 | 3,484 | 621 | 2,194 | 744 | 372 | 3,506 | |||||||||||||||||||||||||||||||||
Life & Group Non-Core
|
485 | 3,027 | 7,106 | 162 | 903 | 618 | 622 | 1,313 | 15 | 242 | 607 | |||||||||||||||||||||||||||||||||
Corporate & Other Non-Core
|
| 5,110 | | 5 | | 7 | 312 | 217 | | 143 | 6 | |||||||||||||||||||||||||||||||||
Eliminations
|
| | | | | (4 | ) | | | | (4 | ) | (4 | ) | ||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||
Consolidated Operations
|
$ | 1,161 | $ | 28,588 | $ | 7,106 | $ | 3,598 | $ | 930 | $ | 7,484 | $ | 2,433 | $ | 6,009 | $ | 1,520 | $ | 1,134 | $ | 7,382 | ||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||
December 31, 2006
|
||||||||||||||||||||||||||||||||||||||||||||
Standard Lines
|
$ | 338 | $ | 12,517 | $ | | $ | 1,633 | $ | 35 | $ | 3,557 | $ | 840 | $ | 2,597 | $ | 805 | $ | 385 | $ | 3,598 | ||||||||||||||||||||||
Specialty Lines
|
352 | 7,946 | | 1,973 | | 3,411 | 554 | 2,064 | 714 | 370 | 3,431 | |||||||||||||||||||||||||||||||||
Life & Group Non-Core
|
500 | 3,134 | 6,645 | 173 | 980 | 641 | 698 | 1,195 | 14 | 259 | 633 | |||||||||||||||||||||||||||||||||
Corporate & Other Non-Core
|
| 6,039 | | 5 | | (1 | ) | 320 | 190 | 1 | 137 | (2 | ) | |||||||||||||||||||||||||||||||
Eliminations
|
| | | | | (5 | ) | | 1 | | (6 | ) | (5 | ) | ||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||
Consolidated Operations
|
$ | 1,190 | $ | 29,636 | $ | 6,645 | $ | 3,784 | $ | 1,015 | $ | 7,603 | $ | 2,412 | $ | 6,047 | $ | 1,534 | $ | 1,145 | $ | 7,655 | ||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||
December 31, 2005
|
||||||||||||||||||||||||||||||||||||||||||||
Standard Lines
|
$ | 3,518 | $ | 632 | $ | 3,195 | $ | 816 | $ | 361 | $ | 3,473 | ||||||||||||||||||||||||||||||||
Specialty Lines
|
3,367 | 416 | 2,302 | 702 | 351 | 3,372 | ||||||||||||||||||||||||||||||||||||||
Life & Group Non-Core
|
704 | 593 | 1,161 | 22 | 318 | 694 | ||||||||||||||||||||||||||||||||||||||
Corporate & Other Non-Core
|
(8 | ) | 251 | 343 | 3 | 138 | (19 | ) | ||||||||||||||||||||||||||||||||||||
Eliminations
|
(12 | ) | | (2 | ) | | (10 | ) | (12 | ) | ||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||
Consolidated Operations
|
$ | 7,569 | $ | 1,892 | $ | 6,999 | $ | 1,543 | $ | 1,158 | $ | 7,508 | ||||||||||||||||||||||||||||||||
|
(a) | Investment income is allocated based on each segments net carried insurance reserves as adjusted. | |
(b) | Net written premiums relate to business in property and casualty companies only. |
149
Balance at | Charged to | Charged to | ||||||||||||||||||
Beginning | Costs and | Other | Balance at | |||||||||||||||||
of Period | Expenses | Accounts (a) | Deductions | End of Period | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Year ended December 31, 2007
|
||||||||||||||||||||
Deducted from assets:
|
||||||||||||||||||||
Allowance for doubtful accounts:
|
||||||||||||||||||||
Insurance and reinsurance receivables
|
$ | 837 | $ | 12 | $ | 2 | $ | 78 | $ | 773 | ||||||||||
|
||||||||||||||||||||
Valuation allowance:
|
||||||||||||||||||||
Deferred income taxes
|
$ | | $ | | $ | | $ | | $ | | ||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Year ended December 31, 2006
|
||||||||||||||||||||
Deducted from assets:
|
||||||||||||||||||||
Allowance for doubtful accounts:
|
||||||||||||||||||||
Insurance and reinsurance receivables
|
$ | 964 | $ | 48 | $ | 3 | $ | 178 | $ | 837 | ||||||||||
|
||||||||||||||||||||
Valuation allowance:
|
||||||||||||||||||||
Deferred income taxes
|
$ | 30 | $ | | $ | | $ | 30 | $ | | ||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Year ended December 31, 2005
|
||||||||||||||||||||
Deducted from assets:
|
||||||||||||||||||||
Allowance for doubtful accounts:
|
||||||||||||||||||||
Insurance and reinsurance receivables
|
$ | 1,048 | $ | 111 | $ | 3 | $ | 198 | $ | 964 | ||||||||||
|
||||||||||||||||||||
Valuation allowance:
|
||||||||||||||||||||
Deferred income taxes
|
$ | 33 | $ | (3 | ) | $ | | $ | | $ | 30 | |||||||||
|
(a) | Amount includes effects of foreign currency translation. |
150
Consolidated Property and Casualty Operations | ||||||||||||
As of and for the years ended December 31 | 2007 | 2006 | 2005 | |||||||||
(In millions) | ||||||||||||
Deferred acquisition costs
|
$ | 1,161 | $ | 1,190 | ||||||||
|
||||||||||||
Reserves for unpaid claim and claim adjustment expenses
|
28,415 | 29,459 | ||||||||||
|
||||||||||||
Discount deducted from claim and claim adjustment expense reserves
above (based on interest rates ranging from 3.0% to 7.5%)
|
1,636 | 1,648 | ||||||||||
|
||||||||||||
Unearned premiums
|
3,598 | 3,784 | ||||||||||
|
||||||||||||
Net written premiums
|
7,382 | 7,655 | $ | 7,509 | ||||||||
|
||||||||||||
Net earned premiums
|
7,481 | 7,595 | 7,558 | |||||||||
|
||||||||||||
Net investment income
|
2,180 | 2,035 | 1,595 | |||||||||
|
||||||||||||
Incurred claim and claim adjustment expenses related to current year
|
4,937 | 4,837 | 5,054 | |||||||||
|
||||||||||||
Incurred claim and claim adjustment expenses related to prior years
|
220 | 332 | 1,107 | |||||||||
|
||||||||||||
Amortization of deferred acquisition costs
|
1,520 | 1,534 | 1,541 | |||||||||
|
||||||||||||
Paid claim and claim adjustment expenses
|
5,282 | 4,165 | 3,541 |
151
152
CNA Financial Corporation
By
/s/ Stephen W. Lilienthal
Stephen W. Lilienthal
Chief Executive Officer
(Principal Executive Officer)
By
/s/ D. Craig Mense
D. Craig Mense
Executive Vice President and
Chief Financial Officer
(Principal Financial & Accounting Officer)
By
/s/ Stephen W. Lilienthal
(Stephen W. Lilienthal, Chief Executive
Officer and Chairman of the Board of
Directors)
By
/s/ Paul J. Liska
(Paul J. Liska, Director)
By
/s/ Jose Montemayor
(Jose O. Montemayor, Director)
By
/s/ Don M. Randel
(Don M. Randel, Director)
By
/s/ Joseph Rosenberg
(Joseph Rosenberg, Director)
By
/s/ Andrew Tisch
(Andrew H. Tisch, Director)
By
/s/ James S. Tisch
(James S. Tisch, Director)
By
/s/ Marvin Zonis
(Marvin Zonis, Director)
|
If to Loews: | Loews Corporation | ||
|
667 Madison Avenue | |||
|
New York, New York 10021 | |||
|
Attention: Corporate Secretary | |||
|
||||
|
If to any Company: | CNA Financial Corporation | ||
|
CNA Center | |||
|
Chicago, IL 60685 | |||
|
Attention: Corporate Secretary, 43S |
2
LOEWS/CNA HOLDINGS, INC. | ||||||
|
||||||
|
By: | /s/ GARY W GARSON | ||||
|
||||||
|
Name: Gary W. Garson | |||||
|
Title: Senior Vice President, General Counsel and Secretary | |||||
|
||||||
CNA FINANCIAL CORPORATION | ||||||
|
||||||
|
By: | /s/ LAWRENCE J. BOYSEN | ||||
|
||||||
|
Lawrence J. Boysen | |||||
|
Senior Vice President and Controller | |||||
|
||||||
|
By: | /s/ ROBERT M. MANN | ||||
|
||||||
|
Robert M. Mann | |||||
|
Senior Vice President and Deputy General Counsel |
3
By:
|
||||
|
||||
Title:
|
||||
|
||||
|
||||
CNA FINANCIAL CORPORATION | ||||
|
||||
By:
|
||||
|
||||
Title:
|
||||
|
||||
|
||||
Loews/CNA Holdings Inc. | ||||
|
||||
By:
|
||||
|
||||
Title:
|
||||
|
4
By:
|
||||
|
||||
Title:
|
||||
|
||||
|
||||
CNA FINANCIAL CORPORATION | ||||
|
||||
By:
|
||||
|
||||
Title:
|
||||
|
||||
|
||||
Loews/CNA Holdings Inc. | ||||
|
||||
By:
|
||||
|
||||
Title:
|
||||
|
5
6
7
By:
|
||||
|
||||
|
Vice President and Treasurer |
8
LOEWS/CNA HOLDINGS, INC. | ||||||||
|
||||||||
By: | /s/ GARY W GARSON | |||||||
|
Name: | Gary W. Garson | ||||||
|
Title: | Senior Vice President, General Counsel and Secretary |
CNA FINANCIAL CORPORATION | ||||||
|
||||||
|
By: | /s/ LAWRENCE J. BOYSEN | ||||
|
||||||
|
Lawrence J. Boysen
Senior Vice President and Controller |
|||||
|
||||||
|
By: | /s/ ROBERT M. MANN | ||||
|
||||||
|
Robert M. Mann
Senior Vice President and Deputy General Counsel |
AMERICAN CASUALTY COMPANY OF READING,
PENNSYLVANIA |
||||||||
|
||||||||
By:
|
/s/ Dennis R. Hemme | |||||||
|
||||||||
|
||||||||
Title:
|
Vice President and Treasurer | |||||||
|
||||||||
CNA FINANCIAL CORPORATION | ||||||||
|
||||||||
By:
|
/s/ Lawrence J. Boysen | By: | /s/ Robert M. Mann | |||||
|
||||||||
|
Senior Vice President and Controller | Senior Vice President and Deputy General Counsel | ||||||
|
||||||||
Loews/CNA Holdings Inc. | ||||||||
|
||||||||
By:
|
/s/ Gary Garson | |||||||
|
||||||||
|
||||||||
Title:
|
SVP | |||||||
|
COLUMBIA CASUALTY COMPANY | ||||||||
|
||||||||
By:
|
/s/ Dennis R. Hemme | |||||||
|
||||||||
|
||||||||
Title:
|
Vice President and Treasurer | |||||||
|
||||||||
CNA FINANCIAL CORPORATION | ||||||||
|
||||||||
By:
|
/s/ Lawrence J. Boysen | By: | /s/ Robert M. Mann | |||||
|
||||||||
|
Senior Vice President and Controller | Senior Vice President and Deputy General Counsel | ||||||
|
||||||||
Loews/CNA Holdings Inc. | ||||||||
|
||||||||
By:
|
/s/ Gary Garson | |||||||
|
||||||||
|
||||||||
Title:
|
SVP | |||||||
|
CONTINENTAL ASSURANCE COMPANY | ||||||||
|
||||||||
By:
|
/s/ Dennis R. Hemme | |||||||
|
||||||||
|
||||||||
Title:
|
Vice President and Treasurer | |||||||
|
||||||||
CNA FINANCIAL CORPORATION | ||||||||
|
||||||||
By:
|
/s/ Lawrence J. Boysen | By: | /s/ Robert M. Mann | |||||
|
||||||||
|
Senior Vice President and Controller | Senior Vice President and Deputy General Counsel | ||||||
|
||||||||
Loews/CNA Holdings Inc. | ||||||||
|
||||||||
By:
|
/s/ Gary Garson | |||||||
|
||||||||
|
||||||||
Title:
|
SVP | |||||||
|
CONTINENTAL CASUALTY COMPANY | ||||||||
|
||||||||
By:
|
/s/ Dennis R. Hemme | |||||||
|
||||||||
|
||||||||
Title:
|
Vice President and Treasurer | |||||||
|
||||||||
CNA FINANCIAL CORPORATION | ||||||||
|
||||||||
By:
|
/s/ Lawrence J. Boysen | By: | /s/ Robert M. Mann | |||||
|
||||||||
|
Senior Vice President and Controller | Senior Vice President and Deputy General Counsel | ||||||
|
||||||||
Loews/CNA Holdings Inc. | ||||||||
|
||||||||
By:
|
/s/ Gary Garson | |||||||
|
||||||||
|
||||||||
Title:
|
SVP | |||||||
|
NATIONAL FIRE INSURANCE COMPANY OF HARTFORD | ||||||||
|
||||||||
By:
|
/s/ Dennis R. Hemme | |||||||
|
||||||||
Title:
|
Vice President and Treasurer | |||||||
|
||||||||
CNA FINANCIAL CORPORATION | ||||||||
|
||||||||
By:
|
/s/ Lawrence J. Boysen | By: | /s/ Robert M. Mann | |||||
|
||||||||
|
Senior Vice President and Controller | Senior Vice President and Deputy General Counsel | ||||||
|
||||||||
Loews/CNA Holdings Inc. | ||||||||
|
||||||||
By:
|
/s/ Gary Garson | |||||||
|
||||||||
|
||||||||
Title:
|
SVP | |||||||
|
THE CONTINENTAL INSURANCE COMPANY | ||||||||
|
||||||||
By:
|
/s/ Dennis R. Hemme | |||||||
|
||||||||
|
||||||||
Title:
|
Vice President and Treasurer | |||||||
|
||||||||
CNA FINANCIAL CORPORATION | ||||||||
|
||||||||
By:
|
/s/ Lawrence J. Boysen | By: | /s/ Robert M. Mann | |||||
|
||||||||
|
Senior Vice President and Controller | Senior Vice President and Deputy General Counsel | ||||||
|
||||||||
Loews/CNA Holdings Inc. | ||||||||
|
||||||||
By:
|
/s/ Gary Garson | |||||||
|
||||||||
|
||||||||
Title:
|
SVP | |||||||
|
THE CONTINENTAL INSURANCE COMPANY
OF NEW JERSEY |
||||||||
|
||||||||
By:
|
/s/ Dennis R. Hemme | |||||||
|
||||||||
|
Vice President and Treasurer | |||||||
|
||||||||
CNA FINANCIAL CORPORATION | ||||||||
|
||||||||
By:
|
/s/ Lawrence J. Boysen | By: | /s/ Robert M. Mann | |||||
|
||||||||
|
Senior Vice President and Controller | Senior Vice President and Deputy General Counsel | ||||||
|
||||||||
Loews/CNA Holdings Inc. | ||||||||
|
||||||||
By:
|
/s/ Gary Garson | |||||||
|
||||||||
|
||||||||
Title:
|
SVP | |||||||
|
2
TRANSPORTATION INSURANCE COMPANY | ||||||||
|
||||||||
By:
|
/s/ Dennis R. Hemme | |||||||
|
||||||||
|
||||||||
Title:
|
Vice President and Treasurer | |||||||
|
||||||||
CNA FINANCIAL CORPORATION | ||||||||
|
||||||||
By:
|
/s/ Lawrence J. Boysen | By: | /s/ Robert M. Mann | |||||
|
||||||||
|
Senior Vice President and Controller | Senior Vice President and Deputy General Counsel | ||||||
|
||||||||
Loews/CNA Holdings Inc. | ||||||||
|
||||||||
By:
|
/s/ Gary Garson | |||||||
|
||||||||
|
||||||||
Title:
|
SVP | |||||||
|
VALLEY FORGE INSURANCE COMPANY | ||||||||
|
||||||||
By:
|
/s/ Dennis R. Hemme | |||||||
|
||||||||
|
||||||||
Title:
|
Vice President and Treasurer | |||||||
|
||||||||
CNA FINANCIAL CORPORATION | ||||||||
|
||||||||
By:
|
/s/ Lawrence J. Boysen | By: | /s/ Robert M. Mann | |||||
|
||||||||
|
Senior Vice President and Controller | Senior Vice President and Deputy General Counsel | ||||||
|
||||||||
Loews/CNA Holdings Inc. | ||||||||
|
||||||||
By:
|
/s/ Gary Garson | |||||||
|
||||||||
|
||||||||
Title:
|
SVP | |||||||
|
(c) |
Anything else in this Plan, or a SERP Agreement, to the contrary notwithstanding:
|
(i) |
Except as otherwise provided below, no part of the Post-2004
Portion of a Participants benefit shall be payable to any Participant until
he has incurred a separation from service as defined in Code §409A.
|
(ii) |
No Post-2004 portion of a benefit shall be payable to a
Participant who is a key employee, as defined in Code §409A, until six months
after he has incurred a separation from service, unless the Participant is
disabled. For this purpose, a Participant shall be considered disabled only
if he is receiving benefits under a CNA disability plan for a period of at
least three months, by reason of a medically determinable physical or mental
impairment which can be expected to either result in death or last for a
continuous period of not less than 12 months. Any payments that would
otherwise be payable to a key employee during the six months following his
separation from service shall be accumulated and paid in a lump sum, without
interest, at the end of the six month period.
|
(iii) |
In no event shall the distribution of any Post-2004 benefit
be accelerated to a time earlier than which it would otherwise have been paid,
whether by amendment of the Plan, exercise of the Operations Committees
discretion, or otherwise, except in accordance with an election made, if
permitted by the Administrator, not later than
|
December 31, 2005, as provided by IRS Notice 2005-1, or as otherwise
permitted by regulations issued pursuant to Code §409A.
|
(iv) |
In the event that the Administrator, in its sole discretion,
determines that any time or form of distribution provided for in the Plan, or
the existence of a right to elect a different time or form of distribution,
would cause the Plan to fail to meet the requirements of Code §409A, or
otherwise cause Participants to be subject to any adverse federal income tax
consequences, the Administrator shall adopt procedures modifying or removing
the form of distribution or election right, which shall be deemed an amendment
to the Plan.
|
(v) |
Any SERP Agreement that provides for a different form or time
of payment shall specify the time and manner of payment, without Employer or
Participant discretion, at the time the SERP Agreement is entered into, and
shall otherwise comply with the requirements of this paragraph (c); provided
that, in addition to a severance from service, a SERP Agreement may provide
for benefits to be paid at a specified time or pursuant to a fixed schedule
set forth in the SERP Agreement, upon the occurrence of a change in ownership
or control of the Participants Employer, or in a substantial portion of its
assets, as defined in Code §409A, or upon the occurrence of an unforeseeable
emergency, as defined in Code §409A; and provided further that a SERP
Agreement may permit a Participant to elect to further defer the payment of
his benefit if the election does not take effect for at least twelve months
and the payment is deferred by at least five years.
|
(i) |
The Pre-2005 portion of a Choice 1 Participants benefit
shall be the deferred vested pension to which the Participant would be
entitled if he terminated on December 31, 2004, and shall not include the
value of any early retirement subsidy unless the Participant was eligible for
early retirement on December 31, 2004.
|
(ii) |
The Pre-2005 portion of a Choice 2 Participants benefit
shall be his Accrued Pension Annuity (as defined in the Retirement Plan).
|
(iii) |
The Pre-2005 portion of a benefit provided in a SERP
Agreement shall be vested benefit the Participant would be entitled to if he
terminated on December 31, 2004, as determined under the terms of the SERP
Agreement.
|
CNA FINANCIAL CORPORATION
|
||||
By: | /s/ Thomas Pontarelli | |||
Thomas Pontarelli, Executive | ||||
Vice President & Chief Administration
Officer, Continental Casualty Company |
||||
2
(a) |
The Annual Incentive Bonus (AIB) amounts for 2007 that are payable in 2008. The AIB
is determined through a performance goal of Registrants net operating income or payout
formula that is a percentage of Registrants net operating income achieved in a particular
year, in this instance 2007.
|
||
(b) |
The 2007 performance year results for the Long-Term Incentive Cash Plan (LTI Cash
Plan) and the cash awards for the 2005-2007 LTI Cash Plan cycle pursuant to such results.
The 2007 performance year results that were approved apply to the 2005-2007, 2006-2008 and
2007-2009 cycles under the LTI Cash Plan. The form of the letter relating to such awards
has not yet been finalized.
|
||
(c) |
The LTI Cash Plan awards for the 2008-2010 LTI Cash Plan cycle. The form of the award
letter and the form of the award terms relating to such awards have not yet been
finalized.
|
||
(d) |
The AIB opportunities for the 2008 performance year, determined through a performance
goal of Registrants net operating income or payout formula that is a percentage of
Registrants net operating income achieved in 2008, payable in 2009.
|
||
(e) |
The net operating income goals for 2008 under the LTI Cash Plan, applicable to the
2006-2008, 2007-2009 and 2008-2010 LTI Cash Plan cycles. The LTI Cash Plan potential bonus
amounts are based upon Registrants net operating income over three year cycles, with
goals set for each calendar year within the three year cycle. Performance is determined at
the end of each calendar year and payouts are made at the end of the three year cycle.
|
||
(f) |
The definition of net operating income for purposes of determining performance and
bonus payouts applicable to AIB opportunities for 2008 and the 2008 LTI Cash Plan targets
for the 2006-2008, 2007-2009 and 2008-2010 LTI Cash Plan cycles.
|
||
(g) |
The modification to the LTI Cash Plan to limit participation in the plan for a given
year to those eligible officers whose hire date occurred on or before September 30 of such
year. This modification is effective for the performance years from and after 2008.
|
To:
|
{Name} | Number of Stock SARs Granted | {No. of Shares} | ||||||
Re:
|
Grant of Stock Appreciation Rights paid in Stock | Exercise Price | {$Price} | ||||||
|
Grant Date | February 6, 2008 | |||||||
|
Expiration Date | February 6, 2018 | |||||||
2
INSTALLMENT
|
DATE OF EXERCISABILITY APPLICABLE TO
INSTALLMENT |
||||
First quarter of Stock SARs
|
First anniversary of February 6, 2008 | ||||
Second quarter of Stock SARs
|
Second anniversary of February 6, 2008 | ||||
Third quarter of Stock SARs
|
Third anniversary of February 6, 2008 | ||||
Fourth quarter of Stock SARs
|
Fourth anniversary of February 6, 2008 | ||||
(a) |
Ten Years
. The ten-year anniversary of the Grant Date.
|
|
(b) |
Death or Disability
. The one-year anniversary of such Date of Termination, if the
Participants termination of employment by Continental Casualty Company or an Affiliate occurs
by reason of the Participants death or the Participants Permanent Disability.
|
|
(c) |
Retirement
. The three-year anniversary of such Date of Termination, if the
Participants termination of employment by Continental Casualty Company or an Affiliate occurs
by reason of the Participants Retirement (and not by reason of death, Permanent Disability,
or for Cause).
|
3
(d) |
Cause
. The Date of Termination, if the Participants termination occurs by reason of
Cause.
|
|
(e) |
Voluntary Resignation
. The Date of Termination, if the Participants termination of
employment by Continental Casualty Company or an Affiliate occurs by reason of the
Participants voluntary resignation (and the termination is for reasons other than as
described in paragraphs (b), (c), or (d) next above, or paragraph (f) next below); provided,
however, that the Compensation Committee of the Companys Board of Directors (the
Committee), in its sole discretion, may provide for extension of the date specified in this
paragraph (e), except that such extended date may not be later than the earlier to occur of
the 90 day anniversary of the Date of Termination or the date specified in paragraph (a) next
above.
|
|
(f) |
Termination without Cause
. The Date of Termination, if the Participants termination
of employment by Continental Casualty Company or an Affiliate occurs by reason of termination
of employment by the Participants employer for reasons other than Cause (and the termination
is for reasons other than as described in paragraphs (b), (c), or (d), next above); provided,
however, that the Committee, in its sole discretion, may provide for extension of the date
specified in this paragraph (f), except that such extended date may not be later than the
earlier to occur of the one-year anniversary of the Date of Termination or the date specified
in paragraph (a) next above; and further provided that, notwithstanding the provisions of
paragraph 3, the Committee may, in its sole discretion, permit additional exercisability of
the Stock SARs to be earned, if any, during such extension period.
|
(a) |
Any notice of exercise shall specify the number of Stock SARs which the Participant elects to
exercise and the date(s) on which they were awarded and vested.
|
|
(b) |
Any gains realized upon exercise of Stock SARs will be paid in shares of CNA Financial
Corporation common stock. Except as otherwise provided by the Committee, before the Stock
SARs are exercised the Participant will be required to remit to the Company a sufficient
portion of the sale proceeds to pay in either cash or shares acquired through the exercise any
tax withholding requirements resulting from such exercise.
|
|
(c) |
No Stock SARs Rights shall be exercisable if and to the extent the Company determines in its
sole discretion that such exercise would be in violation of applicable state or federal
securities laws or the rules or regulations of any securities exchange on which the shares of
stock are traded. If the Company makes such a determination, it shall use reasonable efforts
to obtain compliance with such laws, rules or regulations. In making any determination
hereunder, the Company may rely on the opinion of counsel for the Company.
|
4
(a) |
Affiliate
. The term Affiliate means any business or entity in which at any
relevant time the Company holds directly or indirectly a greater than a 10% equity (voting or
non-voting) interest.
|
(b) |
Cause
. The Participant will have engaged in conduct that constitutes Cause if the
Participant i) engages in any conduct which the Chief Executive Officer of the Companys insurance
subsidiaries reasonably determines to be fraudulent, constitute willful malfeasance or
gross negligence, or be inconsistent with the dignity and character of an executive of the
Company or ii) violates in a material manner the then current rules of professional conduct
or human resource policies of the Company. If the Participant has entered into an
employment contract with the Company or any Subsidiary and Cause is defined in such
contract, then Cause for purposes of these Award Terms shall be as defined in such
contract in lieu of the definition in the immediately prior sentence.
|
(c) |
Date of Exercisability
. The Participants Date of Exercisability is the date on
which the specified amount of Stock SARs are first able to be exercised as provided for in
paragraph 3 of these Award Terms.
|
|
(d) |
Date of Termination
. The Participants Date of Termination shall be the first day
occurring on or after the Date of Grant on which the Participant is not employed by
Continental Casualty Company or an Affiliate, regardless of the reason for the termination of
employment; provided that a termination of employment shall not be deemed to occur by reason
of a transfer of the Participants employment between Continental Casualty Company and an
Affiliate or between two Affiliates; and further provided that the Participants employment
shall not be considered terminated while the Participant is on a leave of absence from
Continental Casualty Company or an Affiliate approved by the Participants employer. If, as a
result of a sale or other transaction, the Participants employer ceases to be an Affiliate
(and the Participants employer is or becomes an entity that is not an Affiliate), the
occurrence of such transaction shall be treated as the Participants Date of Termination
caused by the Participant being discharged by the employer.
|
|
(e) |
Permanent Disability
. The term Permanent Disability means a physical or mental
condition of Participant which, as determined by the Company, in its sole discretion based on
all available medical information, is expected to continue indefinitely and which renders
Participant incapable of substantially performing of the services required of him by his
employer.
|
|
(f) |
Retirement
. Termination because of Retirement shall mean the Participants Date of
Termination after attainment of age 62 or, if earlier, the Participants Date of Termination
which is designated by the Committee as a Retirement for purposes of the Award Terms.
|
5
Name of Subsidiary | Organized Under Laws of | Business Names | ||||||||||
|
||||||||||||
The Continental Corporation |
New York
|
) | CNA | |||||||||
|
||||||||||||
Continental Casualty Company |
Illinois
|
) | ||||||||||
|
||||||||||||
The Continental Insurance Company |
Pennsylvania
|
) |
1. |
I have reviewed this annual report on Form 10-K of CNA Financial Corporation;
|
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by this report;
|
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this
report, fairly present in all material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4. |
The registrants other certifying officers and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))
for the registrant and have:
|
a) |
Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
|
||
b) |
Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
|
||
c) |
Evaluated the effectiveness of the registrants disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
|
||
d) |
Disclosed in this report any change in the registrants internal control
over financial reporting that occurred during the registrants most recent
fiscal quarter (the registrants fourth quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially
affect, the registrants internal control over financial reporting; and
|
5. |
The registrants other certifying officers and I have disclosed, based on our most recent evaluation
of internal control over financial reporting, to the registrants auditors and the audit committee of
registrants board of directors (or persons performing the equivalent function):
|
a) |
All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrants ability to record, process,
summarize and report financial information; and
|
||
b) |
Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal control
over financial reporting.
|
Dated: February 22, 2008 | By | /s/ Stephen W. Lilienthal | ||
Stephen W. Lilienthal | ||||
Chief Executive Officer | ||||
1. |
I have reviewed this annual report on Form 10-K of CNA Financial Corporation;
|
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by this report;
|
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this
report, fairly present in all material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4. |
The registrants other certifying officers and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))
for the registrant and have:
|
a) |
Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
||
b) |
Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting
principles;
|
||
c) |
Evaluated the effectiveness of the registrants disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
|
||
d) |
Disclosed in this report any change in the registrants internal control
over financial reporting that occurred during the registrants most recent
fiscal quarter (the registrants fourth quarter in the case of an annual
report) that has materially affected, or is reasonably likely to
materially affect, the registrants internal control over financial
reporting; and
|
5. |
The registrants other certifying officers and I have disclosed, based on our most recent evaluation
of internal control over financial reporting, to the registrants auditors and the audit committee
of registrants board of directors (or persons performing the equivalent function):
|
a) |
All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrants ability to record,
process, summarize and report financial information; and
|
||
b) |
Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal control
over financial reporting.
|
Dated: February 22, 2008 | By | /s/ D. Craig Mense | ||
D. Craig Mense | ||||
Chief Financial Officer | ||||
|
the Companys Annual Report on Form 10-K for the year ended December 31, 2007 filed on
the date hereof with the Securities and Exchange Commission (the Report) fully complies
with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934;
and
|
|
the information contained in the Report fairly presents, in all material respects, the
financial condition and results of operations of the Company.
|
/s/ Stephen W. Lilienthal | ||||
Stephen W. Lilienthal | ||||
Chief Executive Officer | ||||
|
the Companys Annual Report on Form 10-K for the year ended December 31, 2007 filed on
the date hereof with the Securities and Exchange Commission (the Report) fully complies
with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934;
and
|
|
the information contained in the Report fairly presents, in all material respects, the
financial condition and results of operations of the Company.
|
/s/ D. Craig Mense | ||||
D. Craig Mense | ||||
Chief Financial Officer | ||||