CNA Transfers $690M of Extra Employees’ Compensation Enterprise to Enstar Subsidiary

The commercial line insurer CNA Financial Corp. and Enstar announced on December 30, 2020 that they entered into an agreement to have an Enstar subsidiary reinsure an old portfolio of compensation policies for excess workers, representing a loss reserve of $ 690 million last year.

Under the retrospective reinsurance treaty, CNA will transfer the net liability for excess employee compensation related to the business to Cavello Bay Reinsurance Ltd. in 2007 and prior to its main operating subsidiary Continental Casualty Co. resign from Enstar. The reinsurance contract has a total limit of USD 1 billion.

In a statement, CNA Chairman and CEO Dino Robusto said the transfer of legacy reserves supports CNA’s “continued commitment” to further develop its “core business.”

The transaction is expected to close in the first quarter of 2021, subject to regulatory approval and other closing conditions. At this point, CNA expects an after-tax loss of approximately $ 12 million.

Sources: CNA, Enstar

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