Continental Casualty Co., Chicago, might purchase a group annuity contract in the fourth quarter that would transfer between $800 million and $1 billion in U.S. pension plan liabilities to another insurance company.
The insurance company’s parent CNA Financial Corp. disclosed in an 8-K filing with the SEC on Sept. 18 that its subsidiary that sponsors the CNA Retirement Plan is evaluating potential counterparties in connection with the “potential purchase” of such a contract that would cover between 6,000 and 8,000 retirees and beneficiaries.
The potential purchase is expected to close in the fourth quarter and is subject to a commitment agreement with the insurance company and the customary closing conditions, according to the 8-K filing. The selected insurance company would take on the responsibility of paying benefits on Jan. 1.
According to the filing, the premium for the group annuity contract would be paid out of plan assets and no further contributions to the pension plan would be required.
“There can be no assurances that the potential purchase of a group annuity contract will occur or will occur on the terms described herein,” according to the filing.
As of Dec. 31, 2022, the CNA Retirement Plan had $1.9 billion in assets, according to its most recent Form 5500 filing.
