CNA Financial Corporation has signed a binding “share purchase agreement” to sell CNA’s London reinsurance operation, CNA Reinsurance Company Limited (UK), to Tawa UK Ltd., pending approval by the Financial Services Authority (FSA), the UK regulator, and the Illinois Insurance Department.
CNA had previously announced in the fall of 2001 that it would consolidate its reinsurance operations, operating solely out of the United States and, therefore, seek a buyer for CNA Reinsurance Company Limited (UK). CNA previously recorded an impairment loss in anticipation of the sale and does not expect to record an additional loss under the terms of the agreement.
The share purchase agreement includes all business underwritten by CNA Reinsurance Company Limited (UK) since its inception. Change of control is dependent upon approval by the FSA, which will conduct an extensive review. The Illinois Insurance Department will also conduct a comprehensive review regarding the terms of the transaction. The formal approval processes and close of sale are expected to be completed by the end of 2002.
Benfield ReMetrics served as an advisor to CNA in this transaction, providing analytical support and reinsurance advice. Benfield ReMetrics is a division of Benfield Group plc, a leading global reinsurance intermediary.
Tawa was formed in 2001 to acquire and manage property and casualty insurance and reinsurance companies in run-off. As such, Tawa has agreed to manage CNA Reinsurance Company Limited (UK) as a run-off operation.
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