Chicago-based commercial lines insurer CNA Financial Corp. announced that it has entered into a binding agreement to sell its group benefits business to The Hartford Financial Services Group Inc. for about $500 million.
The business sold includes group life and accident, short- and long-term disability and certain other products. CNA’s group long-term care business is excluded from the sale. The transaction is expected to be completed before the end of the year. The company expects about 1,200 workers to be transferred to The Hartford once the sale’s final.
The purchase price is subject to certain adjustments including changes in the level of statutory surplus through the closing date. The sale is expected to provide additional capital to CNA’s principal insurance subsidiary, Continental Casualty Co., as contemplated in CNA’s recently announced capital plan. CNA said it expects to recognize an after-tax GAAP loss of about $200 million on the sale in the fourth quarter of 2003, but an after-tax statutory gain of more than $100 million.
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