CNA to cede $690M in legacy comp policies to Cavello
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CNA Financial Corp. will cede about $690 million in legacy workers compensation policies under a retroactive reinsurance agreement with Cavello Bay Reinsurance Ltd., the Chicago-based insurer announced Wednesday.
Under the terms of the transaction, Cavello, a subsidiary of Bermuda-based Enstar Group Ltd., will reinsure about $690 million of net excess workers compensation liabilities currently held by CNA subsidiary Continental Casualty Co. The liabilities relate to business written in 2007 and earlier, and the retroactive insurance agreement in the agreement has an aggregate limit of $1 billion.
The transaction is expected to close in the first quarter of 2021, subject to regulatory approval and closing conditions, according to a statement by CNA. Once closed, CNA said it expects to recognize an after-tax loss of approximately $12 million.
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