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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0000950137-04-010788.txt : 20041207
<SEC-HEADER>0000950137-04-010788.hdr.sgml : 20041207
<ACCEPTANCE-DATETIME>20041207084730
ACCESSION NUMBER:		0000950137-04-010788
CONFORMED SUBMISSION TYPE:	424B5
PUBLIC DOCUMENT COUNT:		2
FILED AS OF DATE:		20041207
DATE AS OF CHANGE:		20041207

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CNA FINANCIAL CORP
		CENTRAL INDEX KEY:			0000021175
		STANDARD INDUSTRIAL CLASSIFICATION:	FIRE, MARINE & CASUALTY INSURANCE [6331]
		IRS NUMBER:				366169860
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		424B5
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-69741
		FILM NUMBER:		041187467

	BUSINESS ADDRESS:	
		STREET 1:		CNA PLZ
		STREET 2:		235
		CITY:			CHICAGO
		STATE:			IL
		ZIP:			60685
		BUSINESS PHONE:		3128225000

	MAIL ADDRESS:	
		STREET 1:		CNA PLAZA
		STREET 2:		235
		CITY:			CHICAGO
		STATE:			IL
		ZIP:			60685
</SEC-HEADER>
<DOCUMENT>
<TYPE>424B5
<SEQUENCE>1
<FILENAME>c89899b5e424b5.htm
<DESCRIPTION>PROSPECTUS SUPPLEMENT
<TEXT>
<HTML>
<HEAD>
<TITLE>e424b5</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<TABLE width="100%" border="1" cellpadding="5"><TR><TD>
<FONT size="2" color="#CC2D30">The information in this
prospectus supplement is not complete and may be changed. A
registration statement relating to these securities has been
filed with the Securities and Exchange Commission and is
effective. This prospectus supplement and the accompanying
prospectus are not an offer to sell these securities and we are
not soliciting offers to buy these securities in any state where
the offer or sale is not permitted.</FONT><FONT size="2"> <BR>
</FONT>
</TD></TR></TABLE>

<P align="right">
<FONT size="2">Filed pursuant to Rule&nbsp;424(b)(5)
</FONT>

<DIV align="right">
<FONT size="2">File&nbsp;No.&nbsp;333-69741
</FONT>
</DIV>

<DIV align="center">
<B><FONT size="2" color="#CC2D30">Subject to
Completion</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2" color="#CC2D30">Preliminary Prospectus
Supplement dated December&nbsp;6, 2004</FONT></B>
</DIV>

<P align="left">
<B><U><FONT size="2">PROSPECTUS SUPPLEMENT</FONT></U></B>

<DIV align="left">
<B><FONT size="2">(To prospectus dated August&nbsp;23,
2001)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="5">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B>

<P align="center">
<IMG src="c89899b5n8989977.gif" alt="(CNA LOGO)">

<P align="center">
<B><FONT size="4">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%&nbsp;Notes
due 2014</FONT></B>

<P align="center">
<HR size="1" width="27%" align="center" noshade>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We will pay interest on the notes on
June&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and
December&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of each year,
beginning on June&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2005. The
notes will mature on
December&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2014. The notes
will not be redeemable prior to maturity.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The notes represent our unsecured and
unsubordinated debt and rank equally with all our other
unsecured and unsubordinated indebtedness. The notes will be
issued only in registered form in denominations of $1,000 and
integral multiples of $1,000.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Investing in the notes involves risks that are described in
the &#147;Risk Factors&#148; section beginning on
page&nbsp;S-3.</B>

<P align="center">
<HR size="1" width="27%" align="center" noshade>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="66%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="20%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Per Note</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Public offering price(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">%
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">$
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Underwriting discount
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">%
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">$
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds, before expenses, to CNA Financial
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">%
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">$
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<HR size="1" width="15%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="4%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Plus accrued interest from
    December&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2004, if
    settlement occurs after that date
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved
these securities or passed upon the accuracy or adequacy of this
prospectus supplement or the accompanying prospectus. Any
representation to the contrary is a criminal offense.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The notes will be ready for delivery in
book-entry form only through The Depository Trust Company,
Clearstream or Euroclear, as the case may be, on or about
December&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2004.
</FONT>

<P align="center">
<HR size="1" width="27%" align="center" noshade>

<P align="center">
<I><FONT size="2">Joint Book-Running Managers</FONT></I>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="50%"></TD>
    <TD width="50%"></TD>
</TR>

<TR valign="top">
    <TD align="left"><B><FONT size="5">Merrill Lynch&nbsp;&#38; Co.</FONT></B></TD>
    <TD align="right"><B><FONT size="5">Morgan Stanley</FONT></B></TD>
</TR>

</TABLE>

<P align="center">
<HR size="1" width="27%" align="center" noshade>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="50%"></TD>
    <TD width="50%"></TD>
</TR>

<TR valign="top">
    <TD align="left"><B><FONT size="4">Lehman Brothers</FONT></B></TD>
    <TD align="right"><B><FONT size="4">UBS Investment Bank</FONT></B></TD>
</TR>

</TABLE>

<P align="center">
<HR size="1" width="27%" align="center" noshade>

<P align="center">
<FONT size="2">The date of this prospectus supplement is
December&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2004.
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>

<DIV align="left">

</DIV>

<DIV align="left">
<!-- TOC -->
</DIV>

<DIV align="left">
<A name="tocpage"></A>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">You should rely only on the information
contained in or incorporated by reference in this prospectus
supplement and the accompanying prospectus. We have not
authorized anyone to provide you with different information. We
are not making an offer of these securities in any state where
the offer is not permitted. You should not assume that the
information contained in this prospectus supplement or the
accompanying prospectus is accurate as of any date other than
the date on the front of this prospectus supplement.</FONT></B>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><FONT size="2">TABLE OF CONTENTS</FONT></B>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="90%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Page</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="5" align="center" valign="top">
    <B><FONT size="2">Prospectus Supplement</FONT></B></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#101'>The Company</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">S-2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#102'>Risk Factors</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">S-3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#103'>Forward-Looking
    Statements</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">S-15</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#104'>Ratio of Earnings to Fixed
    Charges</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">S-17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#105'>Use of Proceeds</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">S-17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#106'>Capitalization</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">S-18</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#107'>Selected Consolidated
    Financial Data</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">S-19</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#108'>Description of Notes</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">S-21</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#109'>Underwriting</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">S-26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#110'>Legal Matters</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">S-27</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#111'>Experts</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">S-27</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#112'>Where You Can Find
    Additional Information</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">S-27</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="5" align="center" valign="top">
    <B><FONT size="2">Prospectus</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">About this Prospectus
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Where You Can Find More Information
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Forward Looking Statements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">The CNA Companies
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">The CNA Capital Trusts
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Use of Proceeds
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Securities to be Offered
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Description of the Debt Securities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Description of the Junior Debt Securities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Description of Common Stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Description of Preferred Stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">29</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Description of Depositary Shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">32</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Description of Warrants
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Description of Preferred Securities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Description of Guarantees
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Description of Purchase Contracts and Purchase
    Units
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">51</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Relationship Among the Preferred Securities, the
    Corresponding Junior Debt Securities and the Guarantees
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">51</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Plan of Distribution
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">53</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Validity of Securities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Experts
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">55</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left">
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</DIV>

<P align="center"><FONT size="2">S-1
</FONT>
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<DIV align="left">
<A name='101'></A>
</DIV>

<!-- link1 "THE COMPANY" -->

<P align="center">
<B><FONT size="2">THE COMPANY</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are a leading global insurance organization
with a broad range of commercial property and casualty insurance
products and insurance-related services. We are primarily
focused on selling standard and specialty lines products to
businesses and professionals, including architects, engineers,
lawyers, healthcare professionals, financial intermediaries and
corporate directors and officers. In 2003, we wrote over
$9&nbsp;billion of annual net premiums, making our company the
country&#146;s seventh largest commercial insurance writer and
the 14th&nbsp;largest property and casualty company. Our
property and casualty and remaining life and group insurance
operations are primarily conducted by Continental Casualty
Company, The Continental Insurance Company and Continental
Assurance Company. Loews Corporation owned approximately 91% of
our outstanding common stock and 100% of our preferred stock as
of September&nbsp;30, 2004.
</FONT>

<P align="center"><FONT size="2">S-2
</FONT>

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<DIV align="left">
<A name='102'></A>
</DIV>

<!-- link1 "RISK FACTORS" -->

<P align="center">
<B><FONT size="2">RISK FACTORS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Our business faces significant risks. The
risks described below may not be the only risks we face.
Additional risks that we do not yet know of or that we currently
think are immaterial may also impair our business operations.
You should carefully consider and evaluate all of the
information included or incorporated by reference into this
prospectus supplement and the accompanying prospectus, including
the risk factors listed below, before deciding whether to invest
in our notes.</FONT></I>

<P align="left">
<B><FONT size="2">Risks Related to Us and Our Industry</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">If we determine that loss reserves are
    insufficient to cover our estimated ultimate unpaid liability
    for claims, we may need to increase our loss reserves, which
    could materially and adversely affect our results of operations,
    financial condition and equity.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We maintain loss reserves to cover our estimated
ultimate unpaid liability for claims and claim adjustment
expenses for reported and unreported claims and for future
policy benefits. Reserves represent management&#146;s best
estimate at a given accounting date. Insurance reserves are not
an exact calculation of liability but instead are complex
estimates derived by us, generally utilizing a variety of
reserve estimation techniques, from numerous assumptions and
expectations about future events, many of which are highly
uncertain, such as estimates of claims severity, frequency of
claims, mortality, morbidity, expected interest rates,
inflation, claims handling and case reserving policies and
procedures, underwriting and pricing policies, changes in the
legal and regulatory environment and the lag time between the
occurrence of an insured event and the time it is ultimately
settled. Many of these uncertainties are not precisely
quantifiable and require significant management judgment.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As industry practices and legal, judicial,
social, and other environmental conditions change, unexpected
issues related to claims and coverage may emerge. These issues
have had and may continue to have a negative effect on our
business by either extending coverage beyond our underwriting
intent or by increasing the number or size of claims. Recent
examples of emerging claims and coverage issues include:
</FONT>
<P>

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    <TD width="7%"></TD>
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    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">increases in the number and size of water damage
    claims, including those related to expenses for testing and
    remediation of mold conditions;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">increases in the number and size of claims
    relating to injuries from medical products, and exposure to lead
    and silica;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">the effects of accounting and financial reporting
    scandals and other major corporate governance failures, which
    have resulted in an increase in the number and size of claims,
    including director and officer and errors and omissions
    insurance claims;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">class action litigation relating to claims
    handling and other practices;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">increases in the number of construction defect
    claims, including claims for a broad range of additional insured
    endorsements on policies;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">increases in the number of claims alleging abuse
    by members of the clergy.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The effects of these and other unforeseen
emerging claim and coverage issues are extremely hard to predict.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In light of the many uncertainties associated
with establishing the estimates and making the assumptions
necessary to establish reserve levels, we review and change our
reserve estimates in a regular and ongoing process as experience
develops and further claims are reported and settled.
Adjustments to reserves are reflected in the results of the
periods in which the estimates are changed. Because setting
reserves is an inherently uncertain process involving estimates,
currently established reserves may not be sufficient. For
example, as a result of adverse prior year developments, we
recorded reserve additions of $2,464&nbsp;million in 2001,
$35&nbsp;million in 2002 and $2,409&nbsp;million in 2003, which
adversely affected our results of operations in those years. In
addition, we periodically undergo state regulatory financial
</FONT>

<P align="center"><FONT size="2">S-3
</FONT>

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<DIV align="left">
<FONT size="2">examinations, including review and analysis of
our reserves. Such examinations are currently underway. We are
presently engaged in discussions related to these examinations
with state regulatory agencies.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If estimated reserves are insufficient for any of
the reasons discussed above, the required increase in reserves
would be recorded as a charge against our earnings for the
period in which reserves are determined to be insufficient,
which could materially adversely affect our business, results of
operations, financial condition and equity.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Loss reserves for asbestos, environmental
    pollution and mass torts are especially difficult to estimate
    and may result in our having to make more frequent and larger
    additions to those reserves, which could adversely affect our
    results of operations, financial condition and
    equity.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our experience has been that establishing
reserves for casualty coverages relating to asbestos,
environmental pollution and mass tort claim and claim adjustment
expenses is subject to uncertainties that are greater than those
presented by other claims. Estimating the ultimate cost of both
reported and unreported asbestos, environmental pollution and
mass tort claims is subject to a higher degree of variability
due to a number of additional factors, including among others:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="7%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">coverage issues, including whether certain costs
    are covered under the policies and whether policy limits apply;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">inconsistent court decisions and developing legal
    theories;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">increasingly aggressive tactics of
    plaintiffs&#146; lawyers;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">the risks and lack of predictability inherent in
    major litigation;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">changes in the volume of asbestos, environmental
    pollution and mass tort claims which cannot now be anticipated;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">continued increase in mass tort claims relating
    to silica and silica-containing products;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">the impact of the exhaustion of primary limits
    and the resulting increase in claims on any umbrella or excess
    policies we have issued;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">the number and outcome of direct actions against
    us;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">our ability to recover reinsurance for asbestos,
    environmental pollution and mass tort claims;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">changes in the legal and legislative environment
    in which we operate.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Due to the factors described above, among others,
establishing reserves for asbestos, environmental pollution and
mass tort claim and claim adjustment expenses is subject to
uncertainties that are greater than those presented by other
claims. Traditional actuarial methods and techniques employed to
estimate the ultimate cost of claims for more traditional
property and casualty exposures are less precise in estimating
claim and claim adjustment reserves for asbestos, environmental
pollution and mass torts. Therefore, these traditional actuarial
methods and techniques are necessarily supplemented with
additional estimating techniques and methodologies, many of
which involve significant judgments that are required of
management. Due to the inherent uncertainties in estimating
reserves for asbestos, environmental pollution and mass tort
claim and claim adjustment expenses, we may be required to
record material changes in our claim and claim adjustment
expense reserves in the future, which could materially adversely
affect our results of operations, financial condition and
equity. A discussion of the specific factors affecting our
reserves for environmental pollution and other mass tort claims
and asbestos claims is set forth below.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Environmental pollution and other mass tort
claims.</FONT></I><FONT size="2"> Many policyholders have made
claims for defense costs and indemnification in connection with
environmental pollution matters. We and others in
</FONT>

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<FONT size="2">the insurance industry are disputing coverage for
many such claims. Key coverage issues in these claims include:
</FONT>
</DIV>
<P>

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<TR>
    <TD width="6%"></TD>
    <TD width="7%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">whether cleanup costs are considered damages
    under the policies (and accordingly whether we would be liable
    for these costs);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">the trigger of coverage, and the allocation of
    liability among triggered policies;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">the applicability of pollution exclusions and
    owned property exclusions;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">the potential for joint and several
    liability;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">the definition of an occurrence.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">To date, courts have been inconsistent in their
rulings on these issues, which adds to the uncertainty of
outcome of many of these claims.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Liability that we may have for costs for
environmental pollution and other mass tort claims is inherently
uncertain and the standards for cleanup in environmental
pollution matters are unclear. The scope of federal and state
statutes and regulations determining liability and insurance
coverage for environmental pollution liabilities have been the
subject of extensive litigation. In many cases, courts have
expanded the scope of coverage and liability for cleanup costs
beyond the original intent of our insurance policies. In
addition, the number of sites potentially subject to cleanup
under applicable laws is unknown and the impact of various
proposals to reform existing regulations is difficult to
predict. It is impossible to predict the pattern of laws and
regulation that could result or the possible effect upon our
financial condition or results of operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have established reserves that represent our
best estimate of ultimate claim and claim adjustment expenses at
September&nbsp;30, 2004 based upon known facts and current law.
However, if claims result in liability exceeding the recorded
reserves, the required increase in reserves could materially
adversely affect our business, results of operations, financial
condition and equity.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Asbestos claims.</FONT></I><FONT size="2"> We
also have exposure to asbestos claims. Estimation of asbestos
claim and claim adjustment expense reserves involves many of the
same limitations discussed above for environmental pollution
claims. Furthermore, estimation of asbestos claims is difficult
due to, among other reasons:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="7%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">inconsistency of court decisions, jury attitudes
    and future court decisions;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">specific policy provisions;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">allocation of liability among insurers and
    insureds;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">missing policies and proof of coverage;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">the proliferation of bankruptcy proceedings and
    attendant uncertainties;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">novel theories asserted by policyholders and
    their counsel;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">the targeting of a broader range of businesses
    and entities as defendants;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">the uncertainty as to which other insureds may be
    targeted in the future and uncertainties inherent in predicting
    the number of future claims;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">volatility in claim numbers and settlement
    demands;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">increase in the number of non-impaired claimants
    and the extent to which they can be precluded from making claims;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">the efforts by insureds to obtain coverage not
    subject to aggregate limits;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">long latency period between asbestos exposure and
    disease manifestation and the resulting potential for
    involvement of multiple policy periods for individual claims;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">S-5
</FONT>

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="7%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">medical inflation trends;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">the mix of asbestos-related diseases
    presented;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">the ability to recover reinsurance.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, some asbestos defendants have
asserted that their claims for insurance are not subject to
aggregate limits on coverage. We currently have such claims from
a number of insureds. Some of these claims involve insureds,
facing exhaustion of products liability aggregate limits in
their policies, who have asserted that their asbestos claims
fall within so-called &#147;non-products&#148; liability
coverage contained within their policies, rather than products
liability coverage, and that the claimed
&#147;non-products&#148; coverage is not subject to any
aggregate limit. It is difficult to predict the ultimate size of
any of the claims for coverage not subject to aggregate limits
or predict to what extent, if any, the attempts to assert
&#147;non-products&#148; claims outside the products liability
aggregate will succeed.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Due to these uncertainties created by volatility
in claim numbers and settlement demands, our ultimate liability
for asbestos claims may vary substantially from the amount
currently reserved. Other variables that will influence our
ultimate exposure to asbestos claims will be medical inflation
trends, jury attitudes, the strategies of plaintiff attorneys to
broaden the scope of defendants, the mix of asbestos-related
diseases presented and the possibility of legislative reform.
Adverse developments with respect to these matters could cause
our claims experience to be worse than expected.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have established reserves that represent our
best estimate of ultimate claim and claim adjustment expenses at
September&nbsp;30, 2004 based upon known facts and current law.
However, these claims could result in liability exceeding the
recorded reserves, and the required increase in reserves could
materially adversely affect our business, results of operations,
financial condition and equity.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Catastrophe losses are unpredictable and
    may harm our business and could materially and adversely affect
    our results of operations, financial condition and
    equity.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have experienced, and are expected in the
future to experience, catastrophe losses. Various events can
cause catastrophe losses, including hurricanes, windstorms,
earthquakes, hail, explosions, severe winter weather and fires.
The frequency and severity of these catastrophes are inherently
unpredictable. For example, the four hurricanes that struck
Florida in quick succession in the third quarter of 2004 were
unprecedented in modern times. We estimate that our loss
exposure for those hurricanes was $174&nbsp;million after-tax
($268&nbsp;million pre-tax), net of anticipated reinsurance
recoveries. The extent of losses from a catastrophe is a
function of both the total amount of insured exposures in the
area affected by the event and the severity of the event. It is
possible that a catastrophic event or a series of multiple
catastrophic events could materially adversely affect our
business, results of operations, financial condition and equity.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Losses from terrorism may harm our results
    of operations, financial condition and equity.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Insurers, including us, incurred substantial
losses relating to the 2001 World Trade Center event and may
bear substantial losses from future acts of terrorism. It is
possible that the frequency and severity of terrorist acts may
increase. Though governmental developments and changes to our
policies may ultimately limit our exposure to losses from
terrorism, these limitations may not effectively decrease our
exposure to these losses. Our current reinsurance policies
exclude or substantially limit our ability to recover from
reinsurers for losses from terrorism. We expect reinsurance that
we purchase for future years to contain these exclusions or
limitations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Terrorism Risk Insurance Act of 2002 (the
&#147;Terrorism Act&#148;) established a program within the
Department of the Treasury under which the federal government
shares the risk of loss by commercial property and casualty
insurers arising from future terrorist attacks. The Terrorism
Act was extended in 2004, and now expires on December&nbsp;31,
2005. Under the program, participating insurance companies must
pay certain deductibles of earned premiums on losses from
terrorist attacks, with the federal government to pay 90% and
insurers the remaining 10% of any excess. Overall program losses
are capped annually at
</FONT>

<P align="center"><FONT size="2">S-6
</FONT>

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<DIV align="left">
<FONT size="2">$100&nbsp;billion, beyond which Congress would
determine funding for additional losses. We are a mandatory
participant in the program and, as such, are required to offer
terrorism coverage to insureds.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Terrorism Act expires on December&nbsp;31,
2005. There are bills pending in Congress that would extend the
Terrorism Act for two additional years with increased
deductibles and require that terrorism coverage be made
available for all years. Deductibles under the bills would be
held at 15% in year four and raised to 20% in year five. If the
Terrorism Act is not extended, we would, among other steps, seek
to exclude risks with perceived terrorism exposure to the extent
permitted by law. Notwithstanding these efforts, we may not be
able to eliminate or limit terrorism exposure risks in coverages
and regulatory authorities may not approve policy exclusions for
terrorism.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the Terrorism Act is not extended and we are
unsuccessful in eliminating or limiting our exposure to losses
due to terrorist acts, a future act of terrorism could
materially and adversely affect our results of operations,
financial condition and equity.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Our premium writings and profitability are
    affected by the availability and cost of reinsurance, which
    could materially and adversely affect our results of operations,
    financial condition and equity.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We purchase reinsurance to help manage our
exposure to risk. Under our reinsurance arrangements, another
insurer assumes a specified portion of our claim and claim
adjustment expenses in exchange for a specified portion of
policy premiums. Market conditions determine the availability
and cost of the reinsurance protection we purchase, which
affects the level of our business and profitability as well as
the level and/or types of risk we retain. For 2002 and
subsequent years, we purchased less reinsurance than in past
years in part because of a substantial increase in the cost of
certain reinsurance. As a result, we may retain more losses
relative to prior years and may experience more fluctuations in
reported losses. If we are unable to obtain sufficient
reinsurance at a cost we deem acceptable, we may be unwilling to
bear the increased risk and would reduce the level of our
underwriting commitments. As a result, our business, results of
operations, financial condition and equity could be materially
adversely affected.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">If we are not able to collect amounts owed
    to us by reinsurers, our results of operations, financial
    condition and equity could be adversely affected.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Amounts recoverable from reinsurers are estimated
in a manner consistent with claim and claim adjustment expense
reserves or future policy benefits reserves and are reported as
receivables in the balance sheets. The ceding of insurance does
not, however, discharge our primary liability for a claim. As a
result, we are subject to credit risk with respect to our
ability to recover amounts due from reinsurers if the reinsurer
is unable to meet its obligations assumed under reinsurance
agreements. As of September&nbsp;30, 2004, we had reinsurance
receivables of $15,381&nbsp;million, net of allowance for
uncollectible reinsurance of $531&nbsp;million. Of our
reinsurance receivables, we have billed reinsurers
$587&nbsp;million for paid losses. Certain of our reinsurance
carriers have experienced deteriorating financial conditions or
have been downgraded by rating agencies. During 2003 and 2004,
we commuted, or &#147;bought out&#148;, reinsurance arrangements
from two of our reinsurance carriers at a loss to us of
$156&nbsp;million and $75&nbsp;million, respectively, before
consideration of previously established allowances for
uncollectible reinsurance. It is possible that future financial
deterioration of such reinsurers could result in certain
balances becoming uncollectible, resulting in increases to our
allowance for uncollectible reinsurance or additional
commutations, either of which could materially adversely affect
our results of operations, financial condition and equity.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We have incurred, and will incur for the
    foreseeable future, significant interest expense related to
    funds withheld from reinsurance arrangements, which has a
    material and adverse effect on our results of operations,
    financial condition and equity.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have entered into several property and
casualty reinsurance agreements where we retain the ceded
premium as collateral to secure the reinsurer&#146;s obligation
to pay for ceded losses. We are required to credit interest on
these &#147;funds withheld&#148; balances, or as otherwise
specified in the contract, at specified rates for all periods in
which the funds withheld liability exists. In addition, certain
of these reinsurance
</FONT>

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<FONT size="2">contracts require us to pay interest on
additional ceded premiums arising from ceded losses as if those
premiums were payable at the inception of the contract. There is
also a single contract where the interest rate will increase
retroactively to the contract effective date if ceded losses
exceed certain thresholds. Interest cost was $161&nbsp;million
and $288&nbsp;million for the nine months ended
September&nbsp;30, 2004 and 2003. The amount subject to interest
crediting rates on such contracts was $2,726&nbsp;million and
$2,789&nbsp;million at September&nbsp;30, 2004 and
December&nbsp;31, 2003. The amount subject to interest crediting
on these funds withheld contracts will vary over time based on a
number of factors, including the timing of loss payments and
ultimate gross losses incurred. We expect that we will continue
to incur significant interest costs on these contracts for
several years, which will have a material and adverse effect on
our results of operations, financial condition and equity.
</FONT>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Rating agencies may downgrade their ratings
    for us in the future, which may adversely affect our ability to
    write insurance at competitive rates or at all or to raise
    capital in the debt markets at attractive rates, which could
    materially and adversely affect our results of operations,
    financial condition and equity.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Ratings are an increasingly important factor in
establishing the competitive position of insurance companies.
Our insurance company subsidiaries are rated by four major
rating agencies, A.M. Best Company, Inc., Standard&nbsp;&#38;
Poor&#146;s Rating Services, Moody&#146;s Investors Service,
Inc. and Fitch, Inc. Our public debt is also rated by these
agencies. Ratings reflect the rating agency&#146;s opinions of
an insurance company&#146;s financial strength, operating
performance, strategic position and ability to meet its
obligations to policyholders and debtholders. Agency ratings are
not a recommendation to buy, sell or hold any security, and may
be revised or withdrawn at any time by the issuing organization.
Each agency&#146;s rating should be evaluated independently of
any other agency&#146;s rating.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the past several years, the major rating
agencies have lowered our financial strength and debt ratings
and each currently maintains a negative outlook. Rating agencies
have expressed industry-wide concern about, among other factors,
the intensity of the competitive environment in the
U.S.&nbsp;commercial insurance markets, the rate of progress of
any improvement in profitability and the general adequacy of
carried reserves for our exposures, including asbestos and
environmental pollution and other mass torts.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Due to the intense competitive environment in the
insurance industry, the inherent uncertainty in determining
reserves for claims, and possible changes in the methodology or
criteria applied by the rating agencies, rating agencies may
take action to lower our ratings in the future. If our property
and casualty insurance financial strength ratings were
downgraded below current levels, our business and results of
operations could be materially adversely affected. Among the
adverse effects in the event of such downgrades would be the
inability to obtain a material volume of business from certain
major insurance brokers, the inability to sell a material volume
of our insurance products to certain markets, and the required
collateralization of certain future payment obligations or
reserves. We have entered into several settlement agreements and
assumed reinsurance contracts that require collateralization of
future payment obligations and assumed reserves if our ratings
or other specific criteria fall below certain thresholds. The
ratings triggers are generally more than one level below our
current ratings.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If our debt ratings are downgraded, it will be
more expensive for us to borrow money and we may be required to
collateralize future payment obligations. As a result, a
decrease in either or both of our financial strength ratings or
the ratings on our debt may materially and adversely affect our
business, results of operations, financial condition and equity.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, we believe that a lowering of the
debt ratings of Loews Corporation by certain of the rating
agencies that rate it could result in an adverse impact on our
ratings, independent of any change in circumstances at CNA. Each
of the major rating agencies that rates Loews currently
maintains a negative outlook.
</FONT>

<P align="center"><FONT size="2">S-8
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<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We are subject to extensive regulation that
    could, if we do not comply with regulatory requirements, subject
    us to fines, or regulators may restrict or preclude us from
    carrying on our business, which could materially and adversely
    affect our results of operations, financial condition and
    equity.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The insurance industry is subject to
comprehensive and detailed regulation and supervision throughout
the United States. Most insurance regulations are designed to
protect the interests of our policyholders rather than our
investors. Each state in which we do business has established
supervisory agencies that regulate the manner in which we do
business. Their regulations relate to, among other things:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="7%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">standards of solvency, including risk-based
    capital measurements;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">restrictions on the nature, quality and
    concentration of investments;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">restrictions on our ability to withdraw from
    unprofitable lines of insurance;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">the required use of certain methods of accounting
    and reporting;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">the establishment of reserves for unearned
    premiums, losses and other purposes;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">potential assessments for funds necessary to
    settle covered claims against impaired, insolvent or failed
    insurance companies;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">licensing of insurers and agents;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">approval of policy forms;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">limitations on the ability of our insurance
    subsidiaries to pay dividends to us.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Regulatory powers also extend to premium rate
regulations which require that rates not be excessive,
inadequate or unfairly discriminatory. We also are required by
the states to provide coverage to persons who would not
otherwise be considered eligible by the insurers. Each state
dictates the types of insurance and the level of coverage that
must be provided to such involuntary risks. Our share of these
involuntary risks is mandatory and generally a function of our
respective share of the voluntary market by line of insurance in
each state.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If we do not comply with applicable regulatory
requirements, the insurance regulatory authorities could
preclude or temporarily suspend us from carrying on some or all
of our activities or fine us. That type of action could
materially adversely affect our business, results of operations,
financial condition and equity.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We are subject to capital adequacy
    requirements and, if we do not meet these requirements,
    regulatory agencies may restrict or prohibit us from operating
    our business, which could materially and adversely affect our
    results of operations, financial condition and
    equity.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are subject to risk-based capital standards
set by state regulators. This risk-based capital formula is
calculated by applying specified risk factors to various asset,
premium and reserve items. Insurance companies are required to
measure their statutory capital and surplus as reported in their
statutory accounting statements as compared to their capital as
calculated under the risk-based capital formula. This ratio is
used by state insurance departments to identify companies that
merit further regulatory attention. Current rules require
companies to maintain statutory capital and surplus at a
specified level determined using the risk based capital formula.
If we do not meet the minimum requirements as defined by the
risk-based capital rules, we may be restricted or prohibited
from operating our business by state regulators. If we are
required to record a charge against earnings in connection with
a change in estimates or circumstances, such as increasing our
reserves in the future as a result of unexpectedly poor claims
experience or recording realized losses due to impairment of our
investments, we may violate these minimum capital adequacy
requirements unless we are able to raise sufficient additional
capital. If this were to occur, our business, results of
operations, financial condition and equity may be materially
adversely affected.
</FONT>

<P align="center"><FONT size="2">S-9
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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Our insurance subsidiaries, upon whom we
    depend for dividends and advances in order to fund our working
    capital needs, are limited by state regulators in their ability
    to pay dividends, which could materially and adversely affect
    our results of operations, financial condition and
    equity.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are a holding company and are dependent upon
dividends, advances, loans and other sources of cash from our
subsidiaries to meet our obligations, including our ability to
pay principal and interest on the notes. The payment of
dividends to us by our insurance subsidiaries must be approved
by the subsidiaries&#146; domiciliary state departments of
insurance. These dividends also are generally limited to amounts
determined by formula, which varies by state. The formula for
the majority of the states is the greater of 10% of the prior
year statutory surplus or the prior year statutory net income,
less the aggregate of all dividends paid during the twelve
months prior to the date of payment. Some states, however, have
an additional stipulation that dividends cannot exceed the prior
year&#146;s earned surplus.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Dividends from Continental Casualty Company are
subject to the insurance holding company laws of the State of
Illinois, the domiciliary state of Continental Casualty Company.
Under these laws, ordinary dividends, or dividends that do not
require prior approval of the Illinois Department of Insurance,
may be paid only from earned surplus, which is calculated by
removing unrealized gains from unassigned surplus. As of
September&nbsp;30, 2004, Continental Casualty Company was in a
negative earned surplus position. Until Continental Casualty
Company is in a positive earned surplus position, all dividends
require prior approval of the Illinois Department of Insurance.
In January 2004, the Illinois Department of Insurance approved
extraordinary dividends in the amount of approximately
$312&nbsp;million to be used to fund our 2004 debt service and
principal repayment requirements. As of September&nbsp;30, 2004,
there was approximately $41&nbsp;million of this extraordinary
dividend capacity available for payment to us.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Continental Casualty Company intends to request
approval for extraordinary dividends in 2005 to fund our debt
service and principal repayment requirements, however, that
approval may not be granted. By agreement with the New Hampshire
Insurance Department, The Continental Insurance Company Group
may not pay dividends to Continental Casualty Company until
after January&nbsp;1, 2006.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If we are restricted, by regulatory rule or
otherwise, from paying or receiving intercompany dividends, we
may not be able to fund our working capital needs and debt
service requirements from available cash. We would be required
to fund these working capital needs and debt service, including
interest payments on the notes, and dividend requirements from
other sources, which may be more expensive than an intercompany
dividend or may not be available at all. As a result, our
business, results of operations, financial condition and equity
may be materially adversely affected.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Current legal and regulatory activities
    relating to insurance brokers and agents, contingent commissions
    and bidding practices and certain finite-risk insurance products
    could harm our business, results of operations, financial
    condition and equity.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have received subpoenas and inquiries from the
Attorneys General of the states of Connecticut, Florida,
Minnesota and New York, and from insurance and/or other
regulators of the states of California, Delaware, Florida,
Illinois, North Carolina, Pennsylvania, and South Carolina,
seeking documents and information concerning contingent
commission arrangements, the existence of any bid-rigging
activity or tying arrangements involving brokerage services, and
the underwriting of legal malpractice insurance. We have
produced and are in the process of producing documents, and have
responded to and are in the process of responding to the
interrogatories of these state enforcement agencies.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, the Securities and Exchange
Commission and the New York State Attorney General have sought
information and documents by subpoena regarding finite-risk
insurance, finite-risk reinsurance and other similar products
sold or purchased by us. We are responding to these subpoenas.
Finite-risk reinsurance (and finite-risk insurance) has been
defined as a form of reinsurance (and insurance) in which, among
other things, the time value of money is considered in the
product&#146;s design and pricing, in addition to the expected
amount of the loss payments.
</FONT>

<P align="center"><FONT size="2">S-10
</FONT>
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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At this time, we are unable to predict the
potential effects, if any, that these investigations and
inquiries may have upon the insurance markets and industry
business practices or what, if any, changes may be made to laws
and regulations regarding the insurance industry and financial
reporting. Any of the foregoing could materially and adversely
affect our business, results of operations, financial condition
and equity.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Our investment portfolio may suffer reduced
    returns or losses, which could materially and adversely affect
    our results of operations, financial condition and
    equity.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Investment returns are an important part of our
overall profitability, and fluctuations in the fixed income or
equity markets could materially adversely affect our results of
operations, financial condition and equity.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Fluctuations in interest rates affect our returns
on, and the market value of, fixed income and short-term
investments. In addition, defaults by third parties, primarily
from investments in liquid corporate and municipal bonds, who
fail to pay or perform on their obligations could reduce our
investment income and realized investment gains or result in
investment losses.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We invest a portion of our assets in equity
investments, primarily through limited partnerships, which are
subject to greater volatility than our fixed income investments
and, in some cases, which use leverage and, therefore, are
subject to even greater volatility. Limited partnership
investments generally provide higher expected return, but
present greater risk and are more illiquid than our fixed income
investments. General economic conditions, stock market
conditions and many other factors beyond our control can
adversely affect the value of our equity investments and our
ability to control the timing of the realization of investment
income. As a result of these factors, we may not realize an
adequate return on our investments, may incur losses on sales of
our investments and may be required to write down the value of
our investments, which may materially adversely affect our
business, results of operations, financial condition and equity.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We may be required to book a charge to our
    earnings to reflect a decline in the value of investment
    securities in our portfolio even though we have not sold the
    security, which could adversely affect our results of operations
    for that period.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are required by current accounting guidance to
periodically evaluate the investment securities in our portfolio
to determine if there has been a decline in the value of the
securities that is other than temporary. If we determine that we
own securities that have suffered such a decline, we are
required to take a charge against our earnings in the period in
which the determination is made to reflect the decrease in the
value of the security even though we have not sold the security.
These charges will adversely affect our results of operations
for the period in which the charge is taken. We are not
permitted to recognize an increase in the value of the security,
should circumstances change.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In March 2004, the Emerging Issues Task Force
reached consensus on the guidance provided in EITF&nbsp;03-1,
<I>The Meaning of Other-Than-Temporary Impairment and its
Application to Certain Investments,</I> as applicable to debt
and equity securities that are within the scope of
SFAS&nbsp;No.&nbsp;115, <I>Accounting for Certain Investments in
Debt and Equity Securities </I>and equity securities that are
accounted for using the cost method specified in Accounting
Principles Board Opinion No.&nbsp;18, <I>The Equity Method of
Accounting for Investments in Common Stock.</I> The new guidance
was to be effective for reporting periods beginning after
June&nbsp;15, 2004. In September 2004, the Financial Accounting
Standards Board delayed the effective date of EITF&nbsp;03-1
until additional implementation guidance is provided. Adoption
of the standard as originally issued may cause us to recognize
impairment losses that would not have been recognized under the
current guidance or to recognize such losses in earlier periods,
especially those due to increases in interest rates, and would
likely also impact our recognition of investment income on
impaired securities. Such an impact would likely increase
earnings volatility in future periods.
</FONT>

<P align="center"><FONT size="2">S-11
</FONT>

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<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We may be adversely affected by the
    cyclical nature of the property and casualty
    business.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The property and casualty market is cyclical and
has experienced periods characterized by relatively high levels
of price competition, less restrictive underwriting standards
and relatively low premium rates, followed by periods of
relatively lower levels of competition, more selective
underwriting standards and relatively high premium rates. A
downturn in the profitability cycle of the property and casualty
business could have a material adverse effect on our business,
results of operations, financial condition and equity.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We face intense competition in our
    industry. If we do not compete effectively, our business may be
    harmed.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All aspects of the insurance business are highly
competitive. We compete with a large number of stock and mutual
insurance companies and other entities for both distributors and
customers and must continuously allocate resources to refine and
improve insurance products and services. Insurers compete on the
basis of factors including selling effort, product, price,
service and financial strength and rating. We seek pricing that
will result in what we believe are adequate returns on the
capital allocated to our business. We may lose business to
competitors offering competitive insurance products at lower
prices, which may materially adversely affect our business,
results of operations, financial condition and equity. In
addition, we may face increased competition from banks. Until
passage of the Graham-Leach-Bliley Act of 1999, the ability of
banks to engage in securities-related businesses was limited and
banks were restricted from being affiliated with insurers. With
the passage of that Act, mergers that combine commercial banks,
insurers and securities firms under one holding company are now
permitted. The ability of banks to affiliate with insurers may
have a material adverse effect on all of our product lines by
substantially increasing the number, size and financial strength
of potential competitors.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We may suffer losses from litigation, which
    could materially and adversely affect our results of operations,
    financial condition and equity.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As is typical in the insurance industry, we face
significant risks of litigation, in addition to claims
litigation covered by reserves that we have established. These
lawsuits may be difficult to assess or quantify and may seek
recovery of very large or indeterminate amounts, including
punitive and treble damages, which may remain unknown for
substantial periods of time. Further, we, like other
participants in the insurance industry, have been subject in
recent years to an increasing volume of class action lawsuits
challenging a range of industry practices. A substantial legal
liability could result in a material adverse effect on our
business, results of operations, financial condition and equity.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We rely on our information technology and
    telecommunications systems, and the failure of these systems
    could disrupt our operations, which could materially and
    adversely affect our results of operations, financial condition
    and equity.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our business is highly dependent upon the
successful and uninterrupted functioning of our information
technology and telecommunications systems. We rely on these
systems to process new and renewal business, provide customer
service, make claims payments and facilitate collections and
cancellations, as well as to perform actuarial and other
analytical functions necessary for pricing and product
development. As a result, the failure of these systems could
interrupt our operations and adversely affect our business,
results of operations, financial condition and equity.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Since we are dependent on key executives,
    the loss of any of these executives or our inability to retain
    other key personnel could adversely affect our business, results
    of operations, financial condition and equity.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our success substantially depends upon our
ability to attract and retain qualified employees and upon the
ability of our senior management and other key employees to
implement our business strategy. We believe there are only a
limited number of available qualified executives in the business
lines in which
</FONT>

<P align="center"><FONT size="2">S-12
</FONT>

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<DIV align="left">
<FONT size="2">we compete. Although we are not aware of any
planned departures, we rely substantially upon the services of
our executive officers. The loss of any of their services or the
services of other members of our management team or the
inability to attract and retain other talented personnel could
impede the further implementation of our business strategy,
which could have a material adverse effect on our business,
results of operations, financial condition and equity. We do not
currently maintain key man life insurance policies with respect
to any of our employees.
</FONT>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">A substantial portion of our revenue and
    operating income is generated by businesses that are in run-off.
    As a result, if we are unable to decrease our expenses or
    increase revenue in our continuing lines of business, our net
    income will decline.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During the past two years, we ceased offering
certain insurance products relating principally to our life,
group and reinsurance segments. Many of the business lines were
sold and the remaining lines of business are in run-off,
including individual and group long-term care, institutional
markets products and certain reinsurance operations. In 2003,
36% of our revenue was generated from our non-core lines of
business. We expect that revenue from these lines of business
will continue to decline. As a result, if we are unable to
decrease our overhead expenses or increase our revenue from our
continuing lines of business, our net income will decline.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Significant variances from our key
    assumptions used to determine reserves and deferred acquisition
    costs for our long-term care product offerings could materially
    adversely affect our results of operations, financial condition
    and equity.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our reserves and deferred acquisition costs for
our long-term care product offerings are based on certain
assumptions including morbidity, policy persistency and interest
rates. Actual experience may differ from these assumptions. The
recoverability of deferred acquisition costs and the adequacy of
the reserves are contingent on actual experience related to
these key assumptions and other factors including potential
future premium increases and future health care cost trends.
Significant variances in our actual experience with respect to
these long-term care product offerings could materially and
adversely affect our results of operations, financial condition
and equity.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We have a relationship with a troubled
    national contractor as a lender and as an insurer, which could
    result in substantial creditor and insurance losses to us and
    have a material adverse effect on our results of operations,
    financial condition and equity.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have made loans through a credit facility to a
national contractor to which CNA Surety Corporation, our 64%
owned subsidiary, provides significant amounts of surety bond
insurance coverage through surety bonds underwritten by our
affiliates. A major portion of such coverage has been reinsured
by our subsidiary, Continental Casualty Company. The loans were
provided by us to help the contractor meet its liquidity needs.
Loans under the credit facility are secured by a pledge of
substantially all of the assets of the contractor and certain of
its affiliates. The credit facility and all loans under it will
mature in March of 2006. The credit facility provides for loans
aggregating $86&nbsp;million, all of which is currently
utilized. Loews Corporation, the owner of approximately 91% of
our common stock, holds a $25&nbsp;million participation in the
credit facility. Although Loews does not have rights against the
contractor directly under the participation agreement, it shares
recoveries and certain fees under the credit facility
proportionally with us.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The contractor has implemented restructuring
efforts to reduce costs and improve cash flow. In connection
with the credit facility, we periodically assess the
contractor&#146;s future cash requirements and cash flows
available to support debt service. The contractor&#146;s cash
flow requirements and projections have been negatively impacted
by its restructuring efforts and anticipated costs to resolve
outstanding claims. In this connection, the contractor has
requested an amendment to the credit facility to increase the
credit facility by $40&nbsp;million and we are currently in
negotiations with the contractor as to the amount and terms of
such amendment. We anticipate that once the terms of the
amendment are agreed on, the contractor will seek to draw down a
portion of such additional amount before year-end. Loews has
advised us that it
</FONT>

<P align="center"><FONT size="2">S-13
</FONT>

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<DIV align="left">
<FONT size="2">will participate in one-third of any increase in
the credit facility. We also expect to take an impairment charge
of approximately $43&nbsp;million ($28&nbsp;million after tax)
in connection with the preparation of our financial statements
for the fourth quarter of 2004, net of the participation by
Loews, with respect to amounts already loaned under this credit
facility and would expect to take an additional impairment
charge on any draw down of the additional amount. Assuming an
additional $20&nbsp;million is drawn down, we would expect to
take an additional impairment charge of $13&nbsp;million
($9&nbsp;million after tax), net of the participation by Loews.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">While we believe that the contractor&#146;s
restructuring efforts may be successful and provide sufficient
cash flow for its operations, the contractor may fail to achieve
its restructuring plan or perform its contractual obligations
under the credit facility or under our surety bonds. If one or
more of these developments were to happen, additional advances
from us under the credit facility and/or further impairment
charges by us might be required, and a material adverse effect
on our results of operations, financial condition and equity
could occur. In addition, such failures could cause the full
amount due under the credit facility to be uncollectible and/or
cause an estimated surety loss, net of indemnification and
subrogation recoveries, but before the effects of minority
interest, of approximately $200&nbsp;million pretax.
</FONT>

<P align="left">
<B><FONT size="2">Risks Related to the Offering</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Loews owns a majority of our common stock
    and has the power to elect our Board of Directors and influence
    our affairs.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Loews beneficially owned approximately 91% of our
outstanding common stock as of September&nbsp;30, 2004. As a
result, Loews has the ability to elect our entire board of
directors and determine the outcome of other matters submitted
to our shareholders, such as the approval of significant
transactions, and otherwise to influence our affairs.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">You cannot be sure that an active trading
    market will develop for the notes.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The notes are a new issue of securities and there
is no established trading market for the notes. We do not intend
to apply to list the notes for trading on any securities
exchange or to arrange for quotation on any automated dealer
quotation system.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a result of this and the other factors listed
below, an active trading market for the notes may not develop,
in which case the market price and liquidity of the notes may be
adversely affected.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, you may not be able to sell your
notes at a particular time or at a price favorable to you.
Future trading prices of the notes will depend on many factors,
including:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="7%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">our operating performance and financial condition;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">our prospects or the prospects for companies in
    our industry generally;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">the interest of securities dealers in making a
    market in the notes;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">the market for similar securities;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">prevailing interest rates;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">the factors described in this prospectus under
    &#147;&#151;&nbsp;Risks related to us and our industry.&#148;
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have been advised by the underwriters that
they intend to make a market for the notes, but they have no
obligation to do so and may discontinue market-making at any
time without providing any notice.
</FONT>

<P align="center"><FONT size="2">S-14
</FONT>
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<DIV align="left">
<A name='103'></A>
</DIV>

<!-- link1 "FORWARD-LOOKING STATEMENTS" -->

<P align="center">
<B><FONT size="2">FORWARD-LOOKING STATEMENTS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each of this prospectus supplement, the
accompanying prospectus and the documents we incorporate by
reference in this prospectus supplement and the accompanying
prospectus contain a number of forward-looking statements which
relate to anticipated future events rather than actual present
conditions or historical events. You can identify
forward-looking statements because generally they include words
such as &#147;believes,&#148; &#147;expects,&#148;
&#147;intends,&#148; &#147;anticipates,&#148;
&#147;estimates&#148; and similar expressions. Forward-looking
statements include any and all statements regarding expected
developments in our insurance business, including losses and
loss reserves for asbestos, environmental pollution and mass
tort claims which are more uncertain, and therefore more
difficult to estimate than loss reserves respecting traditional
property and casualty exposures; the impact of routine ongoing
insurance reserve reviews we are conducting; the ongoing state
regulatory examinations of our primary insurance company
subsidiaries, and our responses to the results of those reviews
and examinations; our expectations concerning our revenues,
earnings, expenses and investment activities; expected cost
savings and other results from our expense reduction and
restructuring activities; and our proposed actions in response
to trends in our business. Forward-looking statements, by their
nature, are subject to a variety of inherent risks and
uncertainties that could cause actual results to differ
materially from the results expected in the forward-looking
statement. Many of these risks and uncertainties cannot be
controlled by us. Some examples of these risks and uncertainties
are:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
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    <TD width="7%"></TD>
    <TD width="87%"></TD>
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    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">general economic and business conditions,
    including inflationary pressures on medical care costs,
    construction costs and other economic sectors that increase the
    severity of claims;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">changes in financial markets such as fluctuations
    in interest rates, long-term periods of low interest rates,
    credit conditions and currency, commodity and stock prices;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">the effect of corporate bankruptcies, such as
    Enron and WorldCom, on surety bond claims, as well as on capital
    markets, and on the markets for directors and officers and
    errors and omissions coverages;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">changes in foreign or domestic political, social
    and economic conditions;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">regulatory initiatives and compliance with
    governmental regulations, judicial decisions, including
    interpretation of policy provisions, decisions regarding
    coverage and theories of liability, trends in litigation and the
    outcome of any litigation involving us, and rulings and changes
    in tax laws and regulations;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">effects upon insurance markets and upon industry
    business practices and relationships of current litigation,
    investigations and regulatory activity by the New York State
    Attorney General&#146;s office and other authorities concerning
    contingent commission arrangements with brokers and bid
    solicitation activities;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">legal and regulatory activities with respect to
    certain non-traditional and finite-risk insurance products, and
    possible resulting changes in accounting and financial reporting
    rules in relation to such products;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">regulatory limitations, impositions and
    restrictions upon us, including the effects of assessments and
    other surcharges for guaranty funds and second-injury funds and
    other mandatory pooling arrangements;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">the impact of competitive products, policies and
    pricing and the competitive environment in which we operate,
    including changes in our book of business;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">product and policy availability and demand and
    market responses, including the level of ability to obtain rate
    increases and decline or non-renew underpriced accounts, to
    achieve premium targets and profitability and to realize growth
    and retention estimates;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">development of claims and the impact on loss
    reserves, including changes in claim settlement policies;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">S-15
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="7%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">the effectiveness of current initiatives by
    claims management to reduce loss and expense ratio through more
    efficacious claims handling techniques;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">the performance of reinsurance companies under
    reinsurance contracts with us;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">results of financing efforts, including the
    availability of bank credit facilities;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">changes in our composition of operating segments;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">weather and other natural physical events,
    including the severity and frequency of storms, hail, snowfall
    and other winter conditions, as well as of natural disasters
    such as hurricanes and earthquakes;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">man-made disasters, including the possible
    occurrence of terrorist attacks and the effect of the absence of
    applicable terrorism legislation on coverages;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">the possibility that the Terrorism Risk Insurance
    Act of 2002 will not be extended beyond the end of 2005, as a
    result of which we could incur substantial additional exposure
    to losses resulting from terrorist attacks, which could be
    increased by current state regulatory restrictions on terrorism
    policy exclusions and by regulatory unwillingness to approve
    such exclusions prospectively;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">the occurrence of epidemics;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">exposure to liabilities due to claims made by
    insureds and others relating to asbestos remediation and
    health-based asbestos impairments, as well as exposure to
    liabilities for environmental pollution, mass tort and
    construction defect claims;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">whether a national privately financed trust to
    replace litigation of asbestos claims with payments to claimants
    from the trust will be established or approved through federal
    legislation, or, if established and approved, whether it will
    contain funding requirements in excess of our established loss
    reserves or carried loss reserves;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">the sufficiency of our loss reserves and the
    possibility of future increases in reserves;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">regulatory limitations and restrictions,
    including limitations upon our ability to receive dividends from
    our insurance subsidiaries imposed by state regulatory agencies
    and minimum risk-based capital standards established by the
    National Association of Insurance Commissioners;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">the risks and uncertainties associated with our
    loss reserves as outlined in the Reserves&nbsp;&#151; Estimates
    and Uncertainties section of &#147;Management&#146;s Discussion
    and Analysis of Financial Condition and Results of
    Operations&#148; contained in our Quarterly Report on
    Form&nbsp;10-Q for the quarter ended September&nbsp;30, 2004,
    which is incorporated by reference into this prospectus
    supplement;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">the level of success in integrating acquired
    businesses and operations, and in consolidating, or selling
    existing ones;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">the possibility of further changes in our ratings
    by ratings agencies, including the inability to access certain
    markets or distributions channels and the required
    collateralization of future payment obligations as a result of
    such changes, and changes in rating agency policies and
    practices;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">the actual closing of contemplated transactions
    and agreements.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our forward-looking statements speak only as of
the date on which they are made and we do not have any
obligation to update or revise any forward-looking statement to
reflect events or circumstances after the date of the statement,
even if our expectations or any related facts or circumstances
change.
</FONT>

<P align="center"><FONT size="2">S-16
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<A name='104'></A>
</DIV>

<!-- link1 "RATIO OF EARNINGS TO FIXED CHARGES" -->

<P align="center">
<B><FONT size="2">RATIO OF EARNINGS TO FIXED CHARGES</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth our ratio of
consolidated earnings to fixed charges for the periods
indicated. For purposes of computing this ratio, earnings
consist of income before income taxes plus fixed charges of
consolidated companies. Fixed charges consist of interest and
that portion of operating lease rental expense which is deemed
to be an interest factor for such rentals.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="42%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Nine Months</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="19"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">September&nbsp;30,</FONT></B></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ratio of earnings to fixed charges
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(a)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(a)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(a)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(a)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="15%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(a)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">For the nine months ended September&nbsp;30, 2003
    and for the years ended December&nbsp;31, 2003, 2001 and 1999,
    earnings were insufficient to cover fixed charges by
    $2,598&nbsp;million, $2,352&nbsp;million, $2,326&nbsp;million
    and $79&nbsp;million, respectively.
    </FONT></TD>
</TR>

</TABLE>

<DIV align="left">
<A name='105'></A>
</DIV>

<!-- link1 "USE OF PROCEEDS" -->

<P align="center">
<B><FONT size="2">USE OF PROCEEDS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Net proceeds from this offering of notes are
expected to be approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
after deducting underwriting discounts and commissions and the
estimated expenses of the offering.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We intend to contribute approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
of the net proceeds from this offering to our subsidiary,
Continental Casualty Company, in order for it to repurchase the
Continental Casualty Company Group Surplus Note due 2024 and to
pay accrued and unpaid interest on such note. We plan to seek
approval from the insurance regulatory authority for the
repayment of the Continental Casualty Company Group Surplus
Note. All of the proceeds used to repay the Continental Casualty
Company Group Surplus Note will go to Loews Corporation. We also
intend to use approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
of the net proceeds from this offering to repay at maturity our
6.50%&nbsp;notes due April&nbsp;15, 2005 and to pay accrued and
unpaid interest on such notes. Pending the application of the
net proceeds of the offering, we intend to invest the net
proceeds in short-term interest bearing investments.
</FONT>

<P align="center"><FONT size="2">S-17
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<A name='106'></A>
</DIV>

<!-- link1 "CAPITALIZATION" -->

<P align="center">
<B><FONT size="2">CAPITALIZATION</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table shows our consolidated
capitalization as of September&nbsp;30, 2004:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="7%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">on a historical basis;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">as adjusted to give effect to this offering and
    the use of the net proceeds therefrom. See &#147;Use of
    Proceeds.&#148;
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">You should read this table in conjunction with
our consolidated financial statements and related notes which
are incorporated by reference in this prospectus supplement.
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="58%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="5"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="5"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">September&nbsp;30, 2004</FONT></B></TD>
</TR>

<TR>
    <TD colspan="5"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="5"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Actual</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">As Adjusted</FONT></B></TD>
</TR>

<TR>
    <TD colspan="5"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="5"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="5"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(In millions of dollars)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="5" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Short-term debt:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Current portions of long-term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">531</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="5" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Long-term debt (net of unamortized
    discount):</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Credit facility&nbsp;&#151; CNA Surety, due
    September&nbsp;30, 2005
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Term loan&nbsp;&#151; CNA Surety, due through
    September&nbsp;30, 2005
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Debenture, CNA Surety, face amount of $31, due
    April&nbsp;29, 2034
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Senior notes:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">6.500%, face amount of $493, due April&nbsp;15,
    2005
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">492</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">6.750%, face amount of $250, due
    November&nbsp;15, 2006
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">249</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">249</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">6.450%, face amount of $150, due January&nbsp;15,
    2008
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">149</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">149</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">6.600%, face amount of $200, due
    December&nbsp;15, 2008
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">199</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">199</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">8.375%, face amount of $70, due August&nbsp;15,
    2012
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">69</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">69</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">6.950%, face amount of $150, due January&nbsp;15,
    2018
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">149</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">149</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    &nbsp;&nbsp;<FONT size="2">%, face amount of
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, due December&nbsp;&nbsp;&nbsp;,
    2014
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Debenture, CNAF, 7.250%, face amount of $243, due
    November&nbsp;15, 2023
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">241</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">241</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Capital leases, 10.400%&#150;11.500%, due through
    December&nbsp;31, 2011
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other debt, 1.000%&#150;6.600%, due through 2019
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Surplus Note:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Continental Casualty Company Group Surplus Note,
    face amount of $46, due to Loews February 2024
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">46</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Less: current portion of long-term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(531</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total long-term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,182</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="5" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Stockholders&#146; equity:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Preferred Stock (12,500,000&nbsp;shares
    authorized):
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Series&nbsp;H Issue (no par value;
    $100,000&nbsp;stated value, 7,500&nbsp;shares issued and held by
    Loews Corporation, actual and as adjusted)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">750</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">750</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Common Stock ($2.50&nbsp;par value;
    500,000,000&nbsp;shares authorized; 258,177,285&nbsp;shares
    issued; and 255,953,958&nbsp;shares outstanding, actual and as
    adjusted)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">645</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">645</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Additional paid-in capital
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,701</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,701</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Retained earnings
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,296</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,296</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accumulated other comprehensive income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">652</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">652</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Treasury stock (2,223,327&nbsp;shares, actual and
    as adjusted), at cost
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(69</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(69</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Notes receivable for the issuance of common stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(73</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(73</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total stockholders&#146; equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,902</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,902</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total capitalization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,615</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">S-18
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<A name='107'></A>
</DIV>

<!-- link1 "SELECTED CONSOLIDATED FINANCIAL DATA" -->

<P align="center">
<B><FONT size="2">SELECTED CONSOLIDATED FINANCIAL DATA</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our selected consolidated financial data
presented below as of and for the years ended December&nbsp;31,
2003, 2002, 2001, 2000 and 1999 have been derived from our
audited consolidated financial statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The selected consolidated financial information
as of and for the nine months ended September&nbsp;30, 2004 and
2003 are unaudited and have been derived from our unaudited
condensed consolidated financial statements and include all
adjustments (consisting of normal recurring adjustments), which
are, in our opinion, necessary for a fair presentation of our
financial position at those dates and results of operations for
those periods. Our results of operations for the nine months
ended September&nbsp;30, 2004 are not necessarily indicative of
our results for the year.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">You should read this selected consolidated
financial information in conjunction with our audited
consolidated financial statements in our Annual Report on
Form&nbsp;10-K for the year ended December&nbsp;31, 2003, and
the unaudited condensed consolidated financial statements in our
Quarterly Report on Form&nbsp;10-Q for the period ended
September&nbsp;30, 2004, each of which is incorporated by
reference in this prospectus supplement and the accompanying
prospectus, and &#147;Management&#146;s Discussion and Analysis
of Financial Condition and Results of Operations&#148; for those
periods, which are contained in those documents.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="34%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">As of and for the</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Nine Months Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="19"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">September&nbsp;30,</FONT></B></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">As of and for the Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="27"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="27" align="center" nowrap><B><FONT size="1">(In millions, except per share data and ratios)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Results of Operations</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,245</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,669</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,716</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,286</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,089</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,408</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,294</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income (loss) from continuing operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">136</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,607</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,433</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">247</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,592</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,177</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income (loss) from discontinued operations, net
    of tax
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(35</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income (loss) before cumulative effects of
    changes in accounting principles
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">136</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,607</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,433</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">212</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,581</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,182</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cumulative effects of changes in accounting
    principles, net of tax
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(57</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(61</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(177</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Net income (loss)</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">136</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,607</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,433</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">155</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,642</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,182</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(172</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Earnings (Loss) per Common Share</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income (loss) from continuing operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.35</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(7.39</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6.58</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8.20</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(0.06</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income (loss) from discontinued operations, net
    of tax
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(0.16</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.06</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.03</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.02</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income (loss) before cumulative effects of
    changes in accounting principles, net of tax
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.35</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(7.39</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6.58</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.94</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8.14</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.43</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(0.04</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cumulative effects of changes in accounting
    principles, net of tax
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(0.26</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(0.32</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(0.96</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Earnings (loss) per share available to common
    stockholders</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.35</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(7.39</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6.58</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.68</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8.46</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.43</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1.00</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Weighted average outstanding common stock and
    common stock equivalents</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">256.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">223.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">227.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">223.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">194.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">183.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">184.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">S-19
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="37%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">As of and for the</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Nine Months Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="19"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">September&nbsp;30,</FONT></B></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">As of and for the Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="27"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="27" align="center" nowrap><B><FONT size="1">(In millions, except per share data and ratios)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Financial Condition:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total investments
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">37,950</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">37,802</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">38,100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35,293</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35,826</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36,059</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36,935</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">61,421</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67,850</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">68,503</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">61,731</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">65,723</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">62,785</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">62,390</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Insurance reserves
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">43,387</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">46,053</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">45,383</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40,179</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">43,623</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39,054</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39,271</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Long and short term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,713</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,153</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,904</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,292</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,567</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,729</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,881</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Stockholders&#146; equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,902</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,201</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,952</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,401</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,122</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,400</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,723</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Statutory Surplus:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Property and casualty companies(a)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,603</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,213</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,170</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,836</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,241</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,373</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,679</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Life insurance companies
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,255</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,597</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">707</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,645</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,752</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,274</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,222</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="15%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(a)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Surplus includes the property and casualty
    companies&#146; equity ownership of the life insurance
    subsidiaries in 2004 and 2003, and the ownership of the life and
    group insurance subsidiaries in 2002, 2001, 2000 and 1999.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">S-20
</FONT>

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<DIV align="left">
<A name='108'></A>
</DIV>

<!-- link1 "DESCRIPTION OF NOTES" -->

<P align="center">
<B><FONT size="2">DESCRIPTION OF NOTES</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following description of the notes
supplements the more general description of &#147;Description of
the Debt Securities&#148; and &#147;Securities to be
Offered&#148; that appears in the accompanying prospectus. If
there are any inconsistencies between this section and the
prospectus, you should rely upon the information in this
section. In this summary, the terms &#147;we,&#148;
&#147;our,&#148; and &#147;us&#148; refer solely to CNA
Financial Corporation and its successors under the indenture and
not to any of its subsidiaries.
</FONT>

<P align="left">
<B><FONT size="2">General</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are issuing the notes pursuant to an indenture
dated March&nbsp;1, 1991 between us and J.&nbsp;P.&nbsp;Morgan
Trust Company, National Association, formerly known as The First
National Bank of Chicago, as trustee, which was supplemented by
a first supplemental indenture dated as of October&nbsp;15,
1993, and a second supplemental indenture to be dated as of
December&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2004. The notes
will be issued in registered form only in denominations of
$1,000 and integral multiples of $1,000. The indenture does not
limit the aggregate principal amount of debt securities that may
be issued and provides that debt securities may be issued from
time to time in one or more series. We will issue the notes
initially in the aggregate principal amount of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
and we may, from time to time, without the consent of the
holders of the notes, reopen the series and issue additional
notes.
</FONT>

<P align="left">
<B><FONT size="2">Maturity</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The notes will mature on
December&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2014 and are not
redeemable prior to maturity. The notes are not subject to any
sinking fund provision. We may buy notes in the open market or
otherwise, but we make no assurance as to the existence or
liquidity of any trading market for the notes. If the maturity
date of the notes falls on a day that is not a business day, the
payment of interest and principal may be made on the next
succeeding business day, and no interest on such payment shall
accrue for the period from and after the maturity date.
</FONT>

<P align="left">
<B><FONT size="2">Interest</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The notes will bear interest at an annual rate
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%, with interest accruing from
and including December&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2004
or from the most recent interest payment date to which interest
has been paid or provided for. Interest on the notes is payable
on June&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and
December&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of each year. The
first interest payment date is
June&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2005. Interest will be
payable to the registered holders of the notes at the close of
business
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
as the case may be, prior to the applicable interest payment
date. Interest will be computed on the basis of a 360-day year
of twelve 30-day months. If any interest payment date falls on a
day that is not a business day, the interest payment shall be
made on the next succeeding business day, and no interest on
such payment shall accrue for the period from and after such
interest payment date.
</FONT>

<P align="left">
<B><FONT size="2">Priority</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The notes are our senior debt. The notes
represent our direct, unsecured and unsubordinated debt and will
rank equally with our current and future unsecured and
unsubordinated indebtedness. Because we are a holding company,
the notes will be structurally subordinated to all existing and
future liabilities of our subsidiaries, which as of
September&nbsp;30, 2004 was approximately $50.7&nbsp;billion.
The notes will be effectively subordinated to all our current
and future secured indebtedness to the extent of the value of
the assets securing such indebtedness. As of September&nbsp;30,
2004, we had approximately $1.3&nbsp;billion of senior
indebtedness outstanding, none of which was secured.
</FONT>

<P align="center"><FONT size="2">S-21
</FONT>

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<P align="left">
<B><FONT size="2">Covenants</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to the covenants set forth in the
accompanying prospectus under &#147;Description of the Debt
Securities,&#148; the notes provide:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Negative Pledge.</FONT></I><FONT size="2">
Because we are a holding company, our assets consist primarily
of the securities of our subsidiaries. The negative pledge
provisions of the notes limit our ability to pledge some of
these securities. The notes provide that we will not, and will
not permit any subsidiary to, create, assume, incur or permit to
exist any indebtedness for borrowed money (including any
guarantee of indebtedness for borrowed money) that is secured by
a pledge, lien or other encumbrance on:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="7%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">the voting securities of Continental Casualty
    Company, The Continental Insurance Company, Continental
    Assurance Company or CNA Surety Corporation, or any subsidiary
    succeeding to any substantial part of the business now conducted
    by any of those corporations, which we refer to collectively as
    the &#147;principal subsidiaries,&#148;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">the voting securities of a subsidiary that owns,
    directly or indirectly, the voting securities of any of the
    principal subsidiaries,
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">without making effective provision so that the
outstanding notes will be secured equally and ratably with
indebtedness so secured so long as such other indebtedness shall
be secured.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For purposes of the negative pledge, the notes
provide that &#147;subsidiary&#148; means any corporation,
partnership or other entity of which at the time of
determination we or one or more other subsidiaries own directly
or indirectly more than 50% of the outstanding shares of the
voting stock or equivalent interest, and &#147;voting
stock&#148; means stock which ordinarily has voting power for
the election of directors, whether at all times or only so long
as no senior class of stock has such voting power by reason of
any contingency.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Neither the indenture nor the notes contain any
covenant which would limit a recapitalization transaction, a
change of control of CNA Financial Corporation or a highly
leveraged transaction unless such transaction or change of
control were structured to include a merger or consolidation or
sale or conveyance of our assets substantially as an entirety,
and then only to the extent set forth in the indenture. See
&#147;Description of the Debt Securities&nbsp;&#151;
Consolidation, Merger and Sale of Assets&#148; in the
accompanying prospectus.
</FONT>

<P align="left">
<B><FONT size="2">Events of Default</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following events of default replace the
events of default set forth in the accompanying prospectus under
&#147;Description of the Debt Securities&#148; with respect to
the notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">An event of default with respect to the notes is
defined in the indenture as being:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="7%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">our default for 30&nbsp;days in the payment of
    any installment of interest on the notes;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">our default in the payment of any principal on
    the notes;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">our default in the performance of any of the
    agreements in the indenture contained therein for the benefit of
    the notes which shall not have been remedied within a period of
    60&nbsp;days after receipt of written notice by us from the
    trustee or by us and the trustee from the holders of not less
    than 25% in principal amount of the notes then outstanding;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">the acceleration, or failure to pay at maturity,
    of any of our indebtedness for money borrowed exceeding
    $100,000,000 in principal amount, which acceleration is not
    rescinded or annulled or indebtedness paid within 15&nbsp;days
    after the date on which written notice thereof shall have first
    been given to us as provided in the indenture;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">certain events related to our bankruptcy,
    insolvency or reorganization.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">S-22
</FONT>
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<P align="left">
<B><FONT size="2">Book-Entry Delivery and Settlement</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have obtained the information in this section
concerning The Depository Trust Company, or DTC, and its
book-entry system and procedures from sources that we believe to
be reliable, but we take no responsibility for the accuracy of
this information.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The notes initially will be represented by one or
more fully registered global notes. Each global note will be
deposited with, or on behalf of, DTC or any successor thereto
and registered in the name of Cede&nbsp;&#38; Co., DTC&#146;s
nominee.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">You may hold your interests in the global notes
in the United States through DTC, either as a participant in
such system or indirectly through organizations which are
participants in such system. So long as DTC or its nominee is
the registered owner of the global notes, DTC or such nominee
will be considered the sole owner and holder of the notes for
all purposes of the notes and the indenture. Except as provided
below, owners of beneficial interests in the notes will not be
entitled to have the notes registered in their names, will not
receive or be entitled to receive physical delivery of the notes
in definitive form and will not be considered the owners or
holders of the notes under the indenture, including for purposes
of receiving any reports that we or the trustee deliver pursuant
to the indenture. Accordingly, each person owning a beneficial
interest in a note must rely on the procedures of DTC or its
nominee and, if such person is not a participant, on the
procedures of the participant through which such person owns its
interest, in order to exercise any rights of a holder of notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Investors may elect to hold interests in the
global notes held by DTC through Clearstream Banking,
<I>soci&#233;t&#233; anonyme, </I>&#147;Clearstream,&#148; or
Euroclear Bank S.A./ N.V. as operator of the Euroclear System,
the &#147;Euroclear operator,&#148; if they are participants in
such systems, or indirectly through organizations that are
participants in such systems. Clearstream and the Euroclear
operator will hold interests on behalf of their participants
through customers&#146; securities accounts in
Clearstream&#146;s and the Euroclear operator&#146;s names on
the books of their respective depositaries, which in turn will
hold such interests in customers&#146; securities accounts in
the depositaries&#146; names on the books of DTC.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless and until we issue the notes in fully
certificated form under the limited circumstances described
below under the heading &#147;&#151;&nbsp;Certificated
Notes&#148;:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="7%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">you will not be entitled to receive physical
    delivery of a certificate representing your interest in the
    notes;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">all references in this prospectus supplement or
    in the accompanying prospectus to actions by holders will refer
    to actions taken by DTC upon instructions from its direct
    participants;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">all references in this prospectus supplement or
    the accompanying prospectus to payments and notices to holders
    will refer to payments and notices to DTC or Cede&nbsp;&#38;
    Co., as the registered holder of the notes, for distribution to
    you in accordance with DTC procedures.
    </FONT></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">The Depository Trust Company</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">DTC will act as securities depositary for the
notes. The notes will be issued as fully registered global notes
registered in the name of Cede&nbsp;&#38; Co. DTC is:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="7%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">a limited-purpose trust company organized under
    the New York Banking Law;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">a &#147;banking organization&#148; under the New
    York Banking Law;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">a member of the Federal Reserve System;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">a &#147;clearing corporation&#148; under the New
    York Uniform Commercial Code;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">a &#147;clearing agency&#148; registered under
    the provision of Section&nbsp;17A of the Securities Exchange Act
    of 1934.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">S-23
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">DTC holds securities that its direct participants
deposit with DTC. DTC also facilitates the settlement among
direct participants of securities transactions, such as
transfers and pledges, in deposited securities through
electronic computerized book-entry changes in direct
participants&#146; accounts, thereby eliminating the need for
physical movement of securities certificates.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Direct participants of DTC include securities
brokers and dealers (including underwriters), banks, trust
companies, clearing corporations, and certain other
organizations. DTC is owned by a number of its direct
participants and by The New York Stock Exchange, Inc., the
American Stock Exchange, Inc. and the National Association of
Securities Dealers, Inc. Indirect participants of DTC, such as
securities brokers and dealers, banks and trust companies, can
also access the DTC system if they maintain a custodial
relationship with a direct participant.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If you are not a direct participant or an
indirect participant and you wish to purchase, sell or otherwise
transfer ownership of, or other interests in, the notes, you
must do so through a direct participant or an indirect
participant. DTC agrees with and represents to DTC participants
that it will administer its book-entry system in accordance with
its rules and by-laws and requirements of law. The SEC has on
file a set of the rules applicable to DTC and its direct
participants.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Title to book-entry interests in the notes will
pass by book-entry registration of the transfer within the
records of Clearstream, the Euroclear operator or DTC, as the
case may be, in accordance with their respective procedures.
Book-entry interests in the notes may be transferred within
Clearstream and within the Euroclear System and between
Clearstream and the Euroclear System in accordance with
procedures established for these purposes by Clearstream and the
Euroclear operator. Book-entry interests in the notes may be
transferred within DTC in accordance with procedures established
for this purpose by DTC. Transfers of book-entry interests in
the notes among Clearstream, the Euroclear operator and DTC may
be effected in accordance with procedures established for this
purpose by Clearstream, the Euroclear operator and DTC.
Beneficial owners will not receive physical delivery of
certificates representing their ownership interests in the
notes, except as provided below in
&#147;&#151;&nbsp;Certificated Notes.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">To facilitate subsequent transfers, all notes
deposited with DTC are registered in the name of DTC&#146;s
nominee, Cede&nbsp;&#38; Co. The deposit of notes with DTC and
their registration in the name of Cede&nbsp;&#38; Co. has no
effect on beneficial ownership. DTC has no knowledge of the
actual beneficial owners of the notes. DTC&#146;s records
reflect only the identity of the direct participants to whose
accounts such notes are credited, which may or may not be the
beneficial owners. The participants will remain responsible for
keeping account of their holdings on behalf of their customers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Conveyance of notices and other communications by
DTC to direct participants, by direct participants to indirect
participants and by direct and indirect participants to
beneficial owners (including, by Clearstream or Euroclear, as
applicable) will be governed by arrangements among them, subject
to any statutory or regulatory requirements as may be in effect
from time to time.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Book-Entry Format</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the book-entry format, the trustee will pay
interest or principal payments to Cede&nbsp;&#38; Co., as
nominee of DTC. DTC will forward the payment to the direct
participants, who will then forward the payment to the indirect
participants or to the beneficial owners. You may experience
some delay in receiving your payments under this system.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Initial settlement for the global notes will be
made in immediately available funds. Secondary market trading
between DTC&#146;s participants will occur in the ordinary way
in accordance with DTC&#146;s rules and will be settled in
immediately available funds using DTC&#146;s Same-Day Funds
Settlement System. Secondary market trading between Clearstream
customers and/or Euroclear participants will occur in the
ordinary way in accordance with the applicable rules and
operating procedures of Clearstream and the Euroclear System and
will be settled using the procedures applicable to conventional
Eurobonds in immediately available funds.
</FONT>

<P align="center"><FONT size="2">S-24
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Cross-market transfers between persons holding
directly or indirectly through DTC, on the one hand, and
directly or indirectly through Clearstream customers or
Euroclear participants, on the other, will be effected through
DTC in accordance with DTC&#146;s rules on behalf of the
relevant European international clearing system by its
U.S.&nbsp;depositary; however, these cross-market transactions
will require delivery of instructions to the relevant European
international clearing system by the counterparty in the
clearing system in accordance with its rules and procedures and
within its established deadlines (European time). The relevant
European international clearing system will, if the transaction
meets its settlement requirements, deliver instructions to its
U.S.&nbsp;depositary to take action to effect final settlement
on its behalf by delivering interests in the notes to or
receiving interests in the notes from DTC, and making or
receiving payment in accordance with normal procedures for
same-day funds settlement applicable to DTC. Clearstream
customers and Euroclear participants may not deliver
instructions directly to their respective U.S.&nbsp;depositaries.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Because of time-zone differences, credits of
interests in the notes received in Clearstream or the Euroclear
System as a result of a transaction with a DTC participant will
be made during subsequent securities settlement processing and
dated the business day following DTC settlement date. Credits of
interests or any transactions involving interests in the notes
received in Clearstream or the Euroclear System as a result of a
transaction with a DTC participant and settled during subsequent
securities settlement processing will be reported to the
relevant Clearstream customers or Euroclear participants on the
business day following DTC settlement date. Cash received in
Clearstream or the Euroclear System as a result of sales of
interests in the notes by or through a Clearstream customer or a
Euroclear participant to a DTC participant will be received with
value on the DTC settlement date but will be available in the
relevant Clearstream or Euroclear cash account only as of the
business day following settlement in DTC.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Although DTC, Clearstream and the Euroclear
operator have agreed to the foregoing procedures in order to
facilitate transfers of interests in the notes among
participants of DTC, Clearstream and Euroclear, they are under
no obligation to perform or continue to perform the foregoing
procedures and these procedures may be changed or discontinued
at any time.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The trustee will not recognize you as a holder
under the indenture, and you can only exercise the rights of a
holder indirectly through DTC and its direct participants. DTC
has advised us that it will only take action regarding a note if
one or more of the direct participants to whom the note is
credited direct DTC to take such action. DTC can only act on
behalf of its direct participants. Your ability to pledge notes
to indirect participants, and to take other actions, may be
limited because you will not possess a physical certificate that
represents your notes.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Certificated Notes</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless and until they are exchanged, in whole or
in part, for notes in definitive form in accordance with the
terms of the notes, the notes may not be transferred except as a
whole by DTC to a nominee of DTC; as a whole by a nominee of DTC
to DTC or another nominee of DTC; or as a whole by DTC or a
nominee of DTC to a successor of DTC or a nominee of such
successor.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We will issue notes to you or your nominees, in
fully certificated registered form, rather than to DTC or its
nominees, only if:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="7%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">DTC notifies us that it is unwilling or unable to
    continue as depository or that DTC is no longer eligible or in
    good standing under the Securities Exchange Act of 1934, and we
    do not appoint a successor depository within
    90&nbsp;days;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;</FONT></TD>
    <TD align="left">
    <FONT size="2">we, at our option, elect to terminate use of the
    book-entry system through DTC.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If any of the two above events occurs, DTC is
required to notify all direct participants that notes in fully
certificated registered form are available through DTC. DTC will
then surrender the global notes along with instructions for
re-registration. The trustee will re-issue the notes in full
certificated registered form and will recognize the registered
holders of the certificated notes as holders under the indenture.
</FONT>

<P align="center"><FONT size="2">S-25
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<A name='109'></A>
</DIV>

<!-- link1 "UNDERWRITING" -->

<P align="center">
<B><FONT size="2">UNDERWRITING</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Subject to the terms and conditions set forth in
the underwriting agreement dated
December&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2004, each of the
underwriters has severally agreed to purchase, and we have
agreed to sell to each underwriter, the principal amount of the
note set forth opposite the name of each underwriter:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="84%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Principal</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Underwriters</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amount</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Merrill Lynch, Pierce, Fenner&nbsp;&#38; Smith<BR>
    Incorporated
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Morgan Stanley&nbsp;&#38; Co. Incorporated
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Lehman Brothers Inc
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">UBS Securities LLC
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the terms and conditions of the
underwriting agreement, if the underwriters take any of the
notes, then they are obligated to take and pay for all the notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The notes are a new issue of securities with no
established trading market and will not be listed on any
national securities exchange. The underwriters have advised us
that they intend to make a market for the notes, but they have
no obligation to do so and may discontinue market-making at any
time without providing any notice. No assurance can be given as
to the liquidity of any trading market for the notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The underwriters initially propose to offer part
of the notes directly to the public at the offering price
described on the cover page of this prospectus supplement and
part of the notes to certain dealers at a price that represents
a concession not in excess of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of
the principal amount of the notes. The underwriters may allow,
and any such dealer may reallow, a concession not in excess
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of the principal amount of
the notes to certain other dealers. After the initial offering
of the notes, the underwriters may from time to time vary the
offering price and other selling terms.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have also agreed to indemnify the underwriters
against certain liabilities, including liabilities under the
Securities Act of 1933, as amended, or to contribute to payments
which the underwriters may be required to make in respect of any
such liabilities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with the offering of the notes, the
underwriters may engage in transactions that stabilize, maintain
or otherwise affect the price of the notes. Specifically, the
underwriters may overallot in connection with the offering of
the notes, creating a short position. In addition, the
underwriters may bid for, and purchase, notes in the open market
to cover short positions or to stabilize the price of the notes.
Any of these activities may stabilize or maintain the market
price of the notes above independent market levels. The
underwriters are not required to engage in any of these
activities, and may end any of them at any time.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Neither we nor any underwriter makes any
representation or prediction as to the direction or magnitude of
any effect that the transactions described in the immediately
preceding paragraph may have on the price of the notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our expenses associated with this offering, to be
paid by us, excluding underwriters&#146; discounts and
commissions, are estimated to be
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Certain of the underwriters and their respective
affiliates have, from time to time, performed, and may in the
future perform, various financial advisory, commercial banking
and investment banking services for us, for which they received
or will receive customary fees and expenses. In addition, as
part of our investment activities, we regularly buy and sell
securities through certain of the underwriters or their
respective affiliates based upon customary terms and conditions
and fees.
</FONT>

<P align="center"><FONT size="2">S-26
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<A name='110'></A>
</DIV>

<!-- link1 "LEGAL MATTERS" -->

<P align="center">
<B><FONT size="2">LEGAL MATTERS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The validity of the notes will be passed upon for
us by Mayer, Brown, Rowe&nbsp;&#38; Maw LLP, Chicago, Illinois,
and for the underwriters by Davis Polk&nbsp;&#38; Wardwell, New
York, New York.
</FONT>

<DIV align="left">
<A name='111'></A>
</DIV>

<!-- link1 "EXPERTS" -->

<P align="center">
<B><FONT size="2">EXPERTS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The consolidated financial statements and the
related consolidated financial statement schedules incorporated
by reference in this prospectus supplement and the accompanying
prospectus from our annual report on Form&nbsp;10-K for the year
ended December&nbsp;31, 2003 have been audited by
Deloitte&nbsp;&#38; Touche LLP, independent auditors, as stated
in their reports, which are incorporated herein by reference and
have been so incorporated by reliance upon the reports of such
firm given their authority as experts in accounting and auditing.
</FONT>

<DIV align="left">
<A name='112'></A>
</DIV>

<!-- link1 "WHERE YOU CAN FIND ADDITIONAL INFORMATION" -->

<P align="center">
<B><FONT size="2">WHERE YOU CAN FIND ADDITIONAL
INFORMATION</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We file annual, quarterly and current reports,
proxy statements and other information with the Securities and
Exchange Commission, in accordance with the Securities Exchange
Act of 1934. You may read and copy any document we file at the
Securities and Exchange Commission&#146;s public reference room
in Washington,&nbsp;D.C. Please call the Securities and Exchange
Commission at 1-800-SEC-0330 for further information on the
public reference rooms. Our Securities and Exchange Commission
filings are also available to the public from the Securities and
Exchange Commission&#146;s website at http://www.sec.gov.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Securities and Exchange Commission allows us
to &#147;incorporate by reference&#148; into this prospectus
supplement the information we file with it, which means we can
disclose important information to you by referring to our filed
Securities and Exchange Commission documents. The information
incorporated by reference is considered to be part of this
prospectus supplement. Information we file with the Securities
and Exchange Commission after the date of this document will
update and supersede the information in this prospectus
supplement and the accompanying prospectus. We incorporate by
reference the documents listed below and any future filings made
with the Securities and Exchange Commission under
Sections&nbsp;13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 until we sell all of these securities.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">1.&nbsp;Our Annual Report on Form&nbsp;10-K for
    the year ended December&nbsp;31, 2003.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">2.&nbsp;Our Quarterly Reports on Form&nbsp;10-Q
    for the quarters ended March&nbsp;31, 2004, June&nbsp;30, 2004
    and September&nbsp;30, 2004.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">3.&nbsp;Our Current Reports on Form&nbsp;8-K
    dated October&nbsp;22, 2004 (filed on October&nbsp;22, 2004),
    October&nbsp;27, 2004 (filed on October&nbsp;28, 2004) and
    November&nbsp;5, 2004 (filed on November&nbsp;5, 2004).
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have also filed a registration statement on
Form&nbsp;S-3 with the Securities and Exchange Commission under
the Securities Act of 1933, relating to, among other things,
these securities. This prospectus supplement and the
accompanying prospectus do not contain all of the information
set forth in the registration statement. You should read the
registration statement for further information about these
securities and us. The registration statement can be found in
the Securities and Exchange Commission&#146;s public reference
room or on the Securities and Exchange Commission&#146;s website
referred to above, and you may request a copy of any of these
filings, at no cost, by writing or calling Jonathan Kantor at:
</FONT>

<P align="center">
<FONT size="2">CNA Financial Corporation
</FONT>

<DIV align="center">
<FONT size="2">CNA Center
</FONT>
</DIV>

<DIV align="center">
<FONT size="2">Chicago, Illinois 60685
</FONT>
</DIV>

<DIV align="center">
<FONT size="2">(312)&nbsp;822-5000
</FONT>
</DIV>

<P align="center"><FONT size="2">S-27
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="left">
<B><FONT size="2">Prospectus</FONT></B>

<P align="center">
<B><FONT size="4">$600,000,000</FONT></B>

<P align="center">
<B><FONT size="5">CNA FINANCIAL CORPORATION</FONT></B>

<P align="center">
<B><FONT size="2">Senior Debt Securities</FONT></B>

<DIV align="center">
<B><FONT size="2">Subordinated Debt Securities</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Subordinated Junior Debt Securities</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Preferred Stock</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Depositary Shares</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Common Stock</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Warrants</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Purchase Contracts</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Purchase Units</FONT></B>
</DIV>

<P align="center">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">CNA Financial Corporation&#146;s Common Stock is
listed on the New York Stock Exchange, the Chicago Stock
Exchange and the Pacific Exchange, and traded on the
Philadelphia Stock Exchange, under the trading symbol
&#147;CNA&#148;.
</FONT>

<P align="center">
<HR size="1" width="30%" align="center" noshade>

<P align="center">
<B><FONT size="4">CNA FINANCIAL CAPITAL I</FONT></B>

<DIV align="center">
<B><FONT size="4">CNA FINANCIAL CAPITAL II</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="4">CNA FINANCIAL CAPITAL III</FONT></B>
</DIV>

<P align="center">
<FONT size="2">Preferred Securities fully and unconditionally
</FONT>

<DIV align="center">
<FONT size="2">guaranteed, as described herein, by
</FONT>
</DIV>

<P align="center">
<B><FONT size="5">CNA FINANCIAL CORPORATION</FONT></B>

<P align="center">
<HR size="1" width="30%" align="center" noshade>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We will provide specific terms of these
securities in supplements to this prospectus. You should read
this prospectus and any supplement carefully before you invest.
This prospectus may not be used to sell these securities without
a supplement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">Neither the Securities and Exchange Commission
nor any other regulatory body has approved or disapproved of
these securities or passed upon the accuracy or adequacy of this
Prospectus. Any representation to the contrary is a criminal
offense.</FONT></B>

<P align="center">
<FONT size="2">The date of this Prospectus is August 23, 2001.
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">ABOUT THIS PROSPECTUS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This prospectus is part of a registration
statement (including any amendments and exhibits, the
&#147;Registration Statement&#148;) that we filed with the
Securities and Exchange Commission (the &#147;SEC&#148;)
utilizing a &#147;shelf&#148; registration process. Under this
shelf process, we may, over the next two years, sell any
combination of the securities described in this prospectus in
one or more offerings up to a total dollar amount of
$600,000,000. This prospectus provides you with a general
description of the securities that we may offer. Each time we
sell securities, we will provide a prospectus supplement that
will contain specific information about the terms of that
offering. The prospectus supplement may also add, update or
change information contained in this prospectus. You should read
both this prospectus and any prospectus supplement together with
additional information described under the heading WHERE YOU CAN
FIND MORE INFORMATION.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In this prospectus, we refer to:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">CNA Financial Corporation as &#147;CNAF&#148;;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">CNAF and its subsidiaries as the &#147;CNA
    Companies&#148;;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">CNA Financial Capital&nbsp;I, CNA Financial
    Capital&nbsp;II and CNA Financial Capital&nbsp;III as the
    &#147;CNA Capital Trusts&#148;; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the securities offered by this prospectus as the
    &#147;Offered Securities&#148;.
    </FONT></TD>
</TR>

</TABLE>

<P align="center">
<B><FONT size="2">WHERE YOU CAN FIND MORE INFORMATION</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">CNAF files annual, quarterly and special reports,
proxy statements and other information with the SEC. Our SEC
filings are available to the public over the Internet at the
SEC&#146;s web site at http://www.sec.gov. You may also read and
copy any document we file at the SEC&#146;s public reference
rooms at the following addresses:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">450 Fifth Street, N.W., Judiciary Plaza,
    Washington, D.C. 20549;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">7 World Trade Center, 13th&nbsp;Floor,
    Suite&nbsp;1300, New York, New York 10048; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Suite&nbsp;1400, Citicorp Center,
    14th&nbsp;Floor, 500&nbsp;West Madison, Chicago, Illinois 60661.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">You can call the SEC at 1-800-SEC-0330 for
further information on the public reference rooms.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">CNAF&#146;s common stock (&#147;Common
Stock&#148;) is listed on the New York Stock Exchange, the
Chicago Stock Exchange and the Pacific Exchange. You also can
find copies of CNAF&#146;s SEC filings at the offices of these
stock exchanges at the addresses listed below:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">New York Stock Exchange, Inc., 20 Broad Street,
    New York, New York 10005;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Chicago Stock Exchange, Inc., 440 South LaSalle
    Street, Chicago, Illinois 60603; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Pacific Exchange, Inc., 301 Pine Street, San
    Francisco, California 94104.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The SEC allows us to disclose certain information
to you in this prospectus by referring you to documents
previously filed with the SEC that includes such information.
This process is generally referred to as &#147;incorporating by
reference.&#148; The information incorporated by reference is an
important part of this prospectus, and information that we file
later with the SEC will automatically update and supersede this
information. We incorporate by reference the documents
</FONT>

<P align="center"><FONT size="2">2
</FONT>

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<DIV align="left">
<FONT size="2">listed below and any future filings made with the
SEC under Sections&nbsp;13(a), 13(c), 14, or 15(d) of the
Securities Exchange Act of 1934 until we sell all of the Offered
Securities.
</FONT>
</DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Annual Report on Form&nbsp;10-K for the year
    ended December&nbsp;31, 2000; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Quarterly Report on Form&nbsp;10-Q for the
    periods ended March&nbsp;31, 2001 and June&nbsp;30, 2001, as
    amended.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The description of the Common Stock contained in
    the registration statement on Form&nbsp;S-3 (File
    No.&nbsp;33-35250) filed on June&nbsp;6, 1990 (the &#147;Common
    Stock Description&#148;).
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">You may request a copy of these filings at no
cost, by writing or telephoning us at the following address:
</FONT>

<P align="center">
<FONT size="2">Office of the General Counsel
</FONT>

<DIV align="center">
<FONT size="2">CNA Financial Corporation
</FONT>
</DIV>

<DIV align="center">
<FONT size="2">CNA Plaza
</FONT>
</DIV>

<DIV align="center">
<FONT size="2">Chicago, Illinois 60685
</FONT>
</DIV>

<DIV align="center">
<FONT size="2">(312)&nbsp;822-5000
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have not included, or incorporated by
reference, separate financial statements of any of the CNA
Capital Trusts. The CNA Capital Trusts are newly formed and have
no operating history or independent operations. The sole
purposes of the CNA Capital Trusts will be to issue common and
preferred securities and to use the proceeds to purchase junior
subordinated debt securities (&#147;Junior Debt
Securities&#148;) from CNAF. All of the common securities of the
CNA Capital Trusts will be owned by CNAF and all of the
obligations of the CNA Capital Trusts will be fully guaranteed
by CNAF. Because of these factors, we do not believe that
separate financial statements for the CNA Capital Trusts would
be helpful to you in considering an investment in any of the
Offered Securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">You should rely only on the information
incorporated by reference or provided in this prospectus or any
prospectus supplement. We have not authorized anyone else to
provide you with different or additional information. We are not
making an offer of these securities in any jurisdiction where
the offer or sale is not permitted. You should not assume that
the information in this prospectus or any prospectus supplement
is accurate as of any date other than the date on the front of
those documents.
</FONT>

<P align="center">
<B><FONT size="2">FORWARD-LOOKING STATEMENTS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This prospectus includes a number of statements
which relate to anticipated future events (forward-looking
statements) rather than actual present conditions or historical
events. You can identify forward-looking statements because
generally they include words such as &#147;believes&#148;,
&#147;expects&#148;, &#147;intends&#148;,
&#147;anticipates&#148;, &#147;estimates&#148;, and similar
expressions. Forward-looking statements, by their nature, are
subject to a variety of risks and uncertainties that could cause
actual results to differ materially from the results expected in
the forward-looking statement. Many of these risks and
uncertainties cannot be controlled by the CNA Companies. Some
examples of these risks and uncertainties are:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">general economic and business conditions;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">competition;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">changes in financial markets such as fluctuations
    in interest rates, credit conditions and currency, commodity and
    stock prices;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">changes in foreign, political, social and
    economic conditions; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">regulatory initiatives and compliance with
    governmental regulations, judicial decisions and rulings.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">3
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any forward-looking statements made in this
prospectus are made by CNAF as of the date of this prospectus.
CNAF does not have any obligation to update or revise any
forward-looking statement contained in this prospectus, even if
the expectations of CNAF or any related facts or circumstances
change.
</FONT>

<P align="center">
<B><FONT size="2">THE CNA COMPANIES</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">CNAF is a holding company whose subsidiaries
consist primarily of property/casualty and life insurance
companies. The CNA Companies collectively are among the largest
insurance organizations in the United States. Based on 2000 net
written premiums, CNAF is the ninth largest property-casualty
insurance company and the 40th largest life insurance company in
the United States. CNAF&#146;s common stock is listed on the New
York Stock Exchange, the Chicago Stock Exchange and the Pacific
Exchange and also trades on the Philadelphia Stock Exchange. The
trading symbol for the Common Stock is &#147;CNA&#148;. As of
August&nbsp;23, 2001, Loews Corporation (&#147;Loews&#148;)
owned approximately 87% of CNAF&#146;s outstanding common stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">CNAF was incorporated as a Delaware corporation
in 1967. CNAF&#146;s principal subsidiaries are Continental
Casualty Company (&#147;CCC&#148;), incorporated in 1897,
Continental Assurance Company (&#147;CAC&#148;), incorporated in
1911, and The Continental Corporation (&#147;Continental&#148;),
which is the holding company of The Continental Insurance
Company (&#147;CIC&#148;), incorporated in 1853.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The principal business of the CNA Companies is
insurance. CCC, CIC and each of their property and casualty
insurance affiliates generally conduct the property and casualty
insurance operations of the CNA Companies. CAC and Valley Forge
Life Insurance Company (a wholly owned subsidiary of CAC)
generally conduct the life insurance operations of the CNA
Companies. The principal market for insurance products offered
by the CNA Companies is the United States.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">AS A HOLDING COMPANY, CNAF RECEIVES ITS OPERATING
INCOME AND OPERATING CASH FLOW FROM ITS SUBSIDIARIES. CNAF
RELIES UPON DISTRIBUTIONS FROM ITS SUBSIDIARIES AS WELL AS
RETURNS ON ITS CASH AND INVESTED ASSETS TO GENERATE THE FUNDS
NECESSARY TO MEET ITS OBLIGATIONS, INCLUDING ITS PAYMENT OF
PRINCIPAL AND INTEREST ON ITS DEBT AND DIVIDENDS ON ITS CAPITAL
STOCK. THE ABILITY OF CNAF&#146;S SUBSIDIARIES TO MAKE SUCH
PAYMENTS IS SUBJECT TO MANY FACTORS, INCLUDING APPLICABLE STATE
LAWS AND ANY RESTRICTIONS THAT MAY BE CONTAINED IN CREDIT
AGREEMENTS OR OTHER FINANCING ARRANGEMENTS ENTERED INTO BY CNAF
OR SUCH SUBSIDIARIES. CREDITORS OF CNAF&#146;S SUBSIDIARIES
GENERALLY WILL HAVE PRIORITY AS TO THE ASSETS OF SUCH
SUBSIDIARIES OVER THE CLAIMS OF CNAF AND THE HOLDERS OF
CNAF&#146;S INDEBTEDNESS AND CAPITAL STOCK, INCLUDING THE
OFFERED SECURITIES.
</FONT>

<P align="center">
<B><FONT size="2">THE CNA CAPITAL TRUSTS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each CNA Capital Trust is a statutory business
trust formed under Delaware law pursuant to (i)&nbsp;a trust
agreement executed by CNAF, as sponsor of the CNA Capital Trust,
and a Delaware trustee for that CNA Capital Trust (the
&#147;Delaware Trustee&#148;) and (ii)&nbsp;the filing of a
certificate of trust with the Delaware Secretary of State. Each
trust agreement will be amended and restated in its entirety
(each, as so amended and restated, a &#147;Trust
Agreement&#148;) substantially in the form filed as an exhibit
to the Registration Statement. Each Trust Agreement will be
qualified as an indenture under the Trust Indenture Act of 1939,
as amended (the &#147;Trust Indenture Act&#148;). Each CNA
Capital Trust exists for the exclusive purposes of
(i)&nbsp;issuing and selling its common and preferred
securities, (ii)&nbsp;using the proceeds from the sale of its
securities to acquire a series of Junior Debt Securities issued
by CNAF, and (iii)&nbsp;engaging in other related activities.
</FONT>

<P align="center"><FONT size="2">4
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All of the common securities of each CNA Capital
Trust (&#147;Common Securities&#148;) will be owned by CNAF. The
common securities of a CNA Capital Trust will rank equal to, and
payments will be made thereon in the same proportion, as the
preferred securities (&#147;Preferred Securities&#148;) of such
CNA Capital Trust, except that upon the occurrence and
continuance of an event of default under a Trust Agreement
resulting from an event of default under the indenture with
respect to the Junior Debt Securities (a &#147;Junior Debt
Related Event of Default&#148;), the rights of CNAF as holder of
the Common Securities to payment in respect of distributions and
payments upon liquidation, redemption or otherwise will be
subordinated to the rights of the holders of the Preferred
Securities of such CNA Capital Trust. See &#147;Description of
Preferred Securities &#151; Subordination of Common
Securities.&#148; CNAF will acquire Common Securities in an
aggregate liquidation amount equal to not less than 3% of the
total capital of each CNA Capital Trust.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless otherwise specified in the applicable
prospectus supplement, each CNA Capital Trust has a term of
approximately 55&nbsp;years, but may terminate earlier as
provided in the applicable Trust Agreement. Each CNA Capital
Trust&#146;s business and affairs are conducted by its trustees,
each appointed by CNAF as holder of the Common Securities.
Unless otherwise specified in the applicable prospectus
supplement, the trustees for each CNA Capital Trust will be The
First National Bank of Chicago, as the property trustee (the
&#147;Property Trustee&#148;), First Chicago Delaware, Inc., as
the Delaware Trustee, and two individual trustees (the
&#147;Administrative Trustees&#148;) who are employees or
officers of or affiliated with the CNA Companies (collectively,
the &#147;Issuer Trustees&#148;). The First National Bank of
Chicago, as Property Trustee, will act as sole indenture trustee
under each Trust Agreement for purposes of compliance with the
Trust Indenture Act. The First National Bank of Chicago will
also act as trustee under the Guarantees and the Junior
Indenture (as defined herein). See &#147;Description of
Guarantees&#148; and &#147;Description of Junior Debt
Securities.&#148; The holder of the Common Securities of a CNA
Capital Trust, or the holders of a majority in liquidation
amount of the related Preferred Securities if an Event of
Default in respect of the Trust Agreement for such CNA Capital
Trust has occurred and is continuing, will be entitled to
appoint, remove or replace the Property Trustee and/or the
Delaware Trustee for such CNA Capital Trust. In no event will
the holders of the Preferred Securities have the right to vote
to appoint, remove or replace the Administrative Trustees; such
voting rights are vested exclusively in the holder of the Common
Securities. The duties and obligations of each Issuer Trustee
are governed by the applicable Trust Agreement. CNAF will pay
all fees and expenses related to each CNA Capital Trust and the
offering of the Preferred Securities and will pay, directly or
indirectly, all ongoing costs, expenses and liabilities of each
CNA Capital Trust.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The principal executive office of each CNA
Capital Trust is CNA Plaza, Chicago, Illinois 60685 and its
telephone number is (312)&nbsp;822-5000.
</FONT>

<P align="center">
<B><FONT size="2">USE OF PROCEEDS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Except as otherwise described in the applicable
prospectus supplement, the net proceeds from the sale of the
Offered Securities will be added to CNAF&#146;s general funds
and used for general corporate purposes, which may include, but
are not limited to, prepayment of other debt and capital
contributions to CNAF&#146;s subsidiaries to support such
subsidiaries&#146; operations. Each CNA Capital Trust will use
all proceeds received from the sale of its Preferred Securities
to purchase CNAF&#146;s Junior Debt Securities.
</FONT>

<P align="center"><FONT size="2">5
</FONT>

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<P align="center">
<B><FONT size="2">SECURITIES TO BE OFFERED</FONT></B>

<P align="left">
<B><FONT size="2">Securities to be Offered by CNAF</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">CNAF may offer and sell from time to time under
this prospectus:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="4%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">its unsecured senior debt securities
    (&#147;Senior Debt Securities&#148;);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">its unsecured subordinated debt securities
    (&#147;Subordinated Debt Securities&#148;, and collectively with
    Senior Debt Securities, &#147;Debt Securities&#148;);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(3)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Junior Debt Securities;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(4)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">shares of its common stock, par value $2.50 per
    share (&#147;Common Stock&#148;);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(5)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">shares of its preferred stock, no par value
    (&#147;Preferred Stock&#148;), which may be represented by
    depositary shares (&#147;Depositary Shares&#148;);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(6)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">warrants (&#147;Warrants&#148;) to purchase Debt
    Securities, Junior Debt Securities, Common Stock, Preferred
    Stock or Depositary Shares;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(7)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">purchase contracts (&#147;Purchase
    Contracts&#148;) to purchase any of Debt Securities, Junior Debt
    Securities, Common Stock, Preferred Stock, Depositary Shares,
    Warrants or preferred securities (&#147;Preferred
    Securities&#148;) of the CNA Capital Trusts (collectively the
    &#147;Purchase Contract Securities&#148;); and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(8)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">purchase units (&#147;Purchase Units&#148;), each
    representing ownership of a Purchase Contract and any of
    (x)&nbsp;Debt Securities or Junior Debt Securities,
    (y)&nbsp;debt obligations of third parties, including treasury
    bonds and similar obligations of the United States and/or
    (z)&nbsp;Trust Preferred Securities, securing the holder&#146;s
    obligations to purchase the applicable Purchase Contract
    Securities under the Purchase Contract.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">CNAF may offer to sell the Offered Securities in
one or more separate classes or series, in amounts, at prices
and on terms to be determined by market conditions at the time
of sale and set forth in a prospectus supplement. Offered
Securities may be sold for U.S. dollars, foreign denominated
currency or currency units. Similarly, the amounts payable by
CNAF as dividends, interest, principal or other distributions
also may be payable in U.S. dollars, foreign denominated
currency or currency units. Debt Securities and Junior Debt
Securities may consist of debentures, notes or other evidences
of indebtedness. CNAF will describe all of these terms in the
prospectus supplement relating to the offer.
</FONT>

<P align="left">
<B><FONT size="2">Securities to be Offered by the CNA Capital
Trusts</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each of the CNA Capital Trusts may offer and
sell, from time to time, its Preferred Securities. CNAF will
guarantee the obligation of the CNA Capital Trusts to pay
(i)&nbsp;periodic cash distributions, (ii)&nbsp;liquidation
amounts and (iii)&nbsp;redemption payments with respect to the
Preferred Securities. See &#147;Description of Guarantees.&#148;
EACH GUARANTEE WILL BE AN IRREVOCABLE GUARANTEE BY CNAF ON A
SUBORDINATED BASIS THAT THE RELATED CNA CAPITAL TRUST WILL PAY
ITS OBLIGATIONS UNDER ITS PREFERRED SECURITIES TO THE EXTENT
THAT SUCH RELATED CNA CAPITAL TRUST HAS SUFFICIENT FUNDS TO MAKE
SUCH PAYMENTS. THE GUARANTEE IS NOT A GUARANTEE OF COLLECTION
FROM CNAF. The guarantee is subordinate to all indebtedness of
CNAF (including any Debt Securities which may be issued), except
for (i)&nbsp;indebtedness of CNAF that is expressly made junior
to or equal with such guarantee, (ii)&nbsp;non-recourse
indebtedness, (iii)&nbsp;indebtedness of CNAF to any of the
other CNA Companies or to any of its employees,
(iv)&nbsp;CNAF&#146;s liabilities for taxes, (v)&nbsp;trade debt
incurred in the ordinary course of business and (vi)&nbsp;Junior
Debt Securities. In connection with the investment of the
proceeds from the offering of Preferred Securities, CNA Capital
Trusts will purchase Junior Debt Securities issued by CNAF in
one or more series. The Junior Debt
</FONT>

<P align="center"><FONT size="2">6
</FONT>

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<DIV align="left">
<FONT size="2">Securities purchased by a CNA Capital Trust may
be subsequently distributed pro rata to the holder of Preferred
Securities and Common Securities of that CNA Capital Trust under
certain circumstances. See &#147;Description of Junior Debt
Securities&#148;.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">You should read the summaries of the Offered
Securities below, as well as the description of the particular
Offered Securities in any applicable prospectus supplement. For
a further description of CNAF&#146;s Common Stock, you should
refer to the Common Stock description that is incorporated by
reference in this prospectus from CNAF&#146;s registration
statement on Form&nbsp;S-3 (File No.&nbsp;33-35250) filed on
June&nbsp;6, 1990.
</FONT>

<P align="center">
<B><FONT size="2">DESCRIPTION OF THE DEBT SECURITIES</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Debt Securities will consist of notes,
debentures or other evidences of indebtedness. Debt Securities
may be issued from time to time in one or more series. The
Senior Debt Securities will be issued under an Indenture, dated
March 1, 1991, between CNAF and The First National Bank of
Chicago, a national banking association, as trustee, as
supplemented by a supplemental indenture, dated as of
October&nbsp;15, 1993 (as so supplemented, the &#147;Senior
Indenture&#148;). The Subordinated Debt Securities will be
issued under an Indenture between CNAF and The First National
Bank of Chicago, a national banking association, as trustee (the
&#147;Subordinated Indenture&#148;). The Senior Indenture and
the Subordinated Indenture are sometimes referred to
collectively as the &#147;Indentures&#148; and individually as
the &#147;Indenture&#148;. The First National Bank of Chicago,
in its capacity as trustee under either or both of the
Indentures is referred to hereinafter as the &#147;Trustee&#148;.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each of the Indentures has been qualified under
the Trust Indenture Act of 1939, as amended (the &#147;Trust
Indenture Act&#148;) and is subject to that act. Copies of the
Senior Indenture and the form of the Subordinated Indenture are
included as exhibits to the Registration Statement. The
following description summarizes the material terms of the
Indentures and the Debt Securities. Because it is only a
summary, it does not contain all of the details found in the
full text of the Debt Securities and the Indentures, including
the definitions of certain terms used in the description of the
Debt Securities in this prospectus, and other terms that are
made a part of the Indentures by the Trust Indenture Act.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Indentures are substantially identical except
for provisions relating to subordination. Any Debt Securities
offered by this prospectus and any accompanying prospectus
supplement are referred to herein as the &#147;Offered Debt
Securities.&#148;
</FONT>

<P align="left">
<B><FONT size="2">General</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Indentures do not limit the aggregate
principal amount of Debt Securities that may be issued
thereunder and provide that Debt Securities may be issued from
time to time in one or more series and may be denominated and
payable in U.S. dollars, foreign currencies or units based on or
related to foreign currencies. CNAF may sell Offered Debt
Securities at par, a premium or an original issue discount.
Offered Debt Securities sold at an original issue discount may
bear no interest or interest at a below market rate. The
specific terms of a series of Offered Debt Securities will be
established in or pursuant to a resolution of CNAF&#146;s Board
of Directors and/or in one or more supplemental indentures.
Pursuant to the Indentures, CNAF can establish different rights
with respect to each series of Debt Securities issued under the
Indentures.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The applicable prospectus supplement will provide
information for the following terms of the Offered Debt
Securities (to the extent such terms are applicable to such
Offered Debt Securities):
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the title of such Offered Debt Securities and the
    particular series thereof;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">any limit on the aggregate principal amount of
    such Offered Debt Securities;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">7
</FONT>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">whether such Offered Debt Securities are to be
    issuable in registered form (&#147;Registered Securities&#148;)
    or bearer form (&#147;Bearer Securities&#148;) or both, whether
    any of such Offered Debt Securities are to be issuable initially
    in temporary global form and whether any of such Offered Debt
    Securities are to be issuable in permanent global form;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the price or prices (generally expressed as a
    percentage of the aggregate principal amount thereof) at which
    such Offered Debt Securities will be issued;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the date or dates on which such Offered Debt
    Securities will mature;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the interest rate or rates per annum for the
    Offered Debt Securities, or the formula by which such interest
    rate or rates shall be determined for the Offered Debt
    Securities, the dates from which any such interest on the
    Offered Debt Securities will accrue and the circumstances, if
    any, under which CNAF may reset such interest rate or interest
    rate formula;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the interest payment dates on which any such
    interest on such Offered Debt Securities will be payable, the
    regular record date for any interest payable on such Offered
    Debt Securities that are Registered Securities on any interest
    payment date, and the extent to which, or the manner in which
    any interest payable on a Global Security on an interest payment
    date will be paid if other than in the manner described below
    under &#147;Global Securities&#148;;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the person to whom interest on any Registered
    Security of such series will be payable, if other than the
    person in whose name such Offered Debt Security (or one or more
    predecessor Offered Debt Securities) is registered at the close
    of business on the regular record date for such payment, and the
    manner in which, or the person to whom, any interest on any
    Bearer Security of such series will be payable, if otherwise
    than upon presentation and surrender of the coupons thereto;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">if other than the principal amount of such
    Offered Debt Securities, the portion of the principal amount of
    such Offered Debt Securities which shall be payable upon
    declaration of acceleration of the maturity thereof or provable
    in bankruptcy;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">any mandatory or optional sinking fund or
    analogous provisions;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">each office or agency where, subject to the terms
    of the applicable Indenture as described below under
    &#147;Payments and Paying Agents,&#148; the principal of any
    interest on such Offered Debt Securities will be payable and
    each office or agency where, subject to the terms of the
    applicable Indenture as described below under
    &#147;Denominations, Registration and Transfer,&#148; such
    Offered Debt Securities may be presented for registration of
    transfer or exchange;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the date, if any, after which and the price or
    prices at which, such Offered Debt Securities may be redeemed,
    pursuant to any optional or mandatory redemption provisions, in
    whole or in part, and the other detailed terms and provisions of
    any such optional or mandatory redemption provisions;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the denominations in which such Offered Debt
    Securities which are Registered Securities will be issuable, if
    other than denominations of U.S. $1,000 and any integral
    multiple thereof, and the denomination in which such Offered
    Debt Securities which are Bearer Securities will be issuable, if
    other than denominations of U.S. $5,000;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the currency or currencies of payment of
    principal of and any premium and interest on such Offered Debt
    Securities;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">any index used to determine the amount of
    payments of principal or any interest on such Debt Securities
    different from those described herein;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">8
</FONT>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the application, if any, of any restrictive
    covenants or events of default that are in addition to or
    different from those described herein;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the form of such Offered Debt Security; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">any other terms and provisions of such Offered
    Debt Securities not inconsistent with the terms and provisions
    of the applicable Indenture, including without limitations any
    restrictive covenants which may be applicable to CNAF for the
    benefit of the holders of such Offered Debt Securities.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Any such prospectus supplement will also describe
any special provisions for the payment of additional amounts
with respect to such Offered Debt Securities. Offered Debt
Securities of any series may be issued in one or more tranches
as described in the applicable prospectus supplement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the purchase price of any of the Offered Debt
Securities is payable in a foreign currency or currencies or
foreign currency unit or units or if the principal of and any
premium and interest on any series of Debt Securities are
payable in a foreign currency or currencies or foreign currency
unit or units, the restrictions, elections, general tax
considerations, specific terms and other information with
respect to such issue of Debt Securities and such foreign
currency or currencies or foreign currency unit or units will be
described in the applicable prospectus supplement.
</FONT>

<P align="left">
<B><FONT size="2">Ranking and Subordination</FONT></B>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Senior
Debt Securities.</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Senior Debt Securities will rank equally with
all of CNAF&#146;s other unsecured and unsubordinated
indebtedness. As of June&nbsp;30, 2001, CNAF had approximately
$2.13&nbsp;billion aggregate principal amount of indebtedness
for borrowed money which would rank pari passu with the Senior
Debt Securities. The Senior Indenture does not limit the amount
of debt, either secured or unsecured, that may be issued by CNAF
under the Senior Indenture or otherwise. In addition,
CNAF&#146;s subsidiaries had approximately $339.0&nbsp;million
of indebtedness outstanding.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Subordinated
Debt Securities.</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Indebtedness evidenced by the Subordinated Debt
Securities will be subordinated in right of payment, as set
forth in the Subordinated Indenture, to the prior payment in
full of all CNAF&#146;s existing and future Senior Indebtedness.
Senior Indebtedness is defined in the Subordinated Indenture as
the principal of and interest on (including any interest that
accrues after or would have accrued but for the filing of a
petition initiating any proceeding pursuant to any bankruptcy
law, regardless of whether such interest is allowed or permitted
to the holder of such debt against the bankruptcy or any other
insolvency estate of CNAF in such proceeding) and other amounts
due on or in connection with any debt incurred, assumed or
guaranteed by CNAF, whether outstanding on the date of the
Subordinated Indenture or thereafter incurred, assumed or
guaranteed, and all renewals, extensions and refundings of any
such debt. Amounts outstanding under any Senior Debt Securities
will be included in Senior Indebtedness. Excluded from the
definition of Senior Indebtedness are the following:
(a)&nbsp;any debt which expressly provides (i)&nbsp;that such
debt shall not be senior in right of payment to the Subordinated
Debt Securities, or (ii)&nbsp;that such debt shall be
subordinated to any other debt of CNAF, unless such debt
expressly provides that such debt shall be senior in right of
payment to the Subordinated Debt Securities; and (b)&nbsp;any of
CNAF&#146;s debt in respect of the Subordinated Debt Securities.
As of June&nbsp;30, 2001, CNAF had approximately
$2.13&nbsp;billion aggregate principal amount of indebtedness
for borrowed money which would rank senior to the Subordinated
Debt Securities and no borrowings which would rank junior or
equal with the Subordinate Debt Securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">By reason of such subordination, in the event of
dissolution, insolvency, bankruptcy or other similar
proceedings, upon any distribution of assets, (i)&nbsp;the
holders of Subordinated Debt
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">Securities will be required to pay over their
share of such distribution to the holders of Senior Indebtedness
until such Senior Indebtedness is paid in full; and
(ii)&nbsp;creditors of CNAF who are not holders of Subordinated
Debt Securities or holders of Senior Indebtedness may recover
less, ratably, than holders of Senior Indebtedness and may
recover more, ratably, than the holders of Subordinated Debt
Securities.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event that the Subordinated Debt
Securities are declared due and payable prior to their stated
maturity by reason of the occurrence of an event of default,
CNAF is obligated to notify holders of Senior Indebtedness
promptly of such acceleration. CNAF may not pay the Subordinated
Debt Securities until 179&nbsp;days have passed after such
acceleration occurs and may thereafter pay the Subordinated Debt
Securities if the terms of the Subordinated Indenture otherwise
permit payment at that time.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">No payment of the principal, issue price plus
accrued original issue discount (if any), redemption price,
interest, if any, or any other amount payable with respect to
any Subordinated Debt Security may be made, nor may CNAF acquire
any Subordinated Debt Securities except as described in the
Subordinated Indenture, if any default with respect to Senior
Indebtedness occurs and is continuing that permits the
acceleration of the maturity of the Senior Indebtedness and
either such default is the subject of judicial proceedings or
CNAF receives notice of the default, unless
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">179&nbsp;days pass after notice of the default is
    given and such default is not then the subject of judicial
    proceedings or the default with respect to the Senior
    Indebtedness is cured or waived; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the terms of the Subordinated Indenture otherwise
    permit the payment or acquisition of the Subordinated Debt
    Securities at that time.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Denominations, Registration and
Transfer</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Offered Debt Securities will be issuable as
Registered Securities, Bearer Securities or both. Offered Debt
Securities may be issuable in the form of one or more Global
Securities, as described below under &#147;Global
Securities.&#148; Unless otherwise provided in the applicable
prospectus supplement, Registered Securities denominated in U.S.
dollars will be issued only in denominations of $1,000 or any
integral multiple thereof and Bearer Securities denominated in
U.S. dollars will be issued only in denominations of $5,000 with
coupons attached. A Global Security will be issued in a
denomination equal to the aggregate principal amount of
outstanding Offered Debt Securities represented by such Global
Security. The prospectus supplement relating to Offered Debt
Securities denominated in a foreign or composite currency will
specify the denominations for these Offered Debt Securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with its original issuance, no
Bearer Security shall be mailed or otherwise delivered to any
location in the United States (as defined below under
&#147;Limitations on Issuance of Bearer Securities&#148;) and a
Bearer Security may be delivered in connection with its original
issuance only if the person entitled to receive such Bearer
Security furnishes written certification, in the form required
by the applicable Indenture, to the effect that such Bearer
Security is not being acquired by or on behalf of a United
States person (as defined below under &#147;Limitations on
Issuance of Bearer Securities&#148;), or, if a beneficial
interest in such Bearer Security is being acquired by or on
behalf of a United States person, that such United States person
is a financial institution (as defined in Treasury
Regulation&nbsp;Section&nbsp;1.165-12(c)(1)(v)) that is
purchasing for its own account or for the account of a customer
and which agrees to comply with the requirements of
Section&nbsp;165(j)(3)(A), (B) or (C) of the United States
Internal Revenue Code of 1986, as amended (the
&#147;Code&#148;), and the regulations thereunder. See
&#147;Global Securities&#148; and &#147;Limitations on Issuance
of Bearer Securities&#148; below.
</FONT>

<P align="center"><FONT size="2">10
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Registered Securities of any series will be
exchangeable for other Registered Securities of the same series
and of a like aggregate principal amount and tenor of different
authorized denominations. In addition, if Offered Debt
Securities of any series are issuable as both Registered
Securities and as Bearer Securities, at the option of the holder
upon request confirmed in writing, and subject to the terms of
the applicable Indenture, Bearer Securities (with all unmatured
coupons, except as provided below, and all matured coupons in
default attached) of such series will be exchangeable for
Registered Securities of the same series of any authorized
denominations and of a like aggregate principal amount and
tenor. Unless otherwise indicated in an applicable prospectus
supplement, any Bearer Security surrendered in exchange for a
Registered Security between a record date and the relevant date
for payment of interest shall be surrendered without the coupon
relating to such date for payment of interest attached and
interest will not be payable in respect of the Registered
Security issued in exchange for such Bearer Security, but will
be payable only to the holder of such coupon when due in
accordance with the terms of the applicable Indenture. Except as
provided in an applicable prospectus supplement, Bearer
Securities will not be issued in exchange for Registered
Securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Offered Debt Securities may be presented for
exchange as provided above, and Registered Securities (other
than a Global Security) may be presented for registration of
transfer (with the form of transfer duly executed), at the
office of the security registrar designated by CNAF or at the
office of any transfer agent designated by CNAF for such purpose
with respect to any series of Offered Debt Securities and
referred to in an applicable prospectus supplement, without
service charge and upon payment of any taxes and other
governmental charges as described in the applicable Indenture.
Such transfer or exchange will be made when the security
registrar or such transfer agent, as the case may be, is
satisfied with the documents of title and identity of the person
making the request. CNAF has initially appointed the Trustee as
the security registrar under the Indentures. If a prospectus
supplement refers to any transfer agent (in addition to the
security registrar) initially designated by CNAF with respect to
any series of Offered Debt Securities, CNAF may at any time
rescind the designation of any such transfer agent or approve a
change in the location through which any such transfer agent
acts. Exceptions to the prior sentence will occur if Offered
Debt Securities of a series are issuable only as Registered
Securities. CNAF will be required to maintain a transfer agent
in each place of payment for such series. Similarly, if Offered
Debt Securities of a series are issuable as Bearer Securities,
then CNAF will be required to maintain (in addition to the
security registrar) a transfer agent in a place of payment for
such series located outside the United States. CNAF may at any
time designate additional transfer agents with respect to any
series of Offered Debt Securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event of any redemption, neither CNAF nor
the Trustee shall be required to (i)&nbsp;issue, register the
transfer of or exchange Offered Debt Securities of any series
during a period beginning at the opening of business
15&nbsp;days before the day of the mailing of a notice of
redemption of Offered Debt Securities of that series selected to
be redeemed and ending at the close of business (a)&nbsp;if
Offered Debt Securities of the series are issuable only as
Registered Securities, the day of mailing of the relevant notice
of redemption, and (b)&nbsp;if Offered Debt Securities of the
series are issuable as Bearer Securities, the day of the first
publication of the relevant notice of redemption or, if Offered
Debt Securities of that series are also issuable as Registered
Securities and there is no publication, the mailing of the
relevant notice of redemption; (ii)&nbsp;register the transfer
of or exchange any Registered Security or portion thereof,
called for redemption, except the unredeemed portion of any
Registered Security being redeemed in part; or
(iii)&nbsp;exchange any Bearer Security called for redemption,
except to exchange such Bearer Security for a Registered
Security of that series and like tenor which is immediately
surrendered for redemption.
</FONT>

<P align="center"><FONT size="2">11
</FONT>

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<P align="left">
<B><FONT size="2">Payments and Paying Agents</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless otherwise indicated in an applicable
prospectus supplement, payment of principal of and any interest
on Registered Securities (other than a Global Security) will be
made at the office of such paying agent or paying agents (each a
&#147;Paying Agent&#148;) as CNAF may designate from time to
time, except that, at the option of CNAF, payment of any
interest may be made by check mailed to the address of the payee
entitled thereto as such address shall appear in the Security
Register. Unless otherwise indicated in an applicable prospectus
supplement, payment of any installment of interest on Registered
Securities will be made to the person in whose name such
Registered Security is registered at the close of business on
the regular record date for such interest payment.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless otherwise indicated in an applicable
prospectus supplement, payment of principal of and any premium
and interest on Bearer Securities will be payable (subject to
applicable laws and regulations) at the offices of such Paying
Agent or Paying Agents as CNAF may designate from time to time,
except that, at CNAF&#146;s option, payment of any interest may
be made by check mailed to the address of the payee entitled
thereto as such address shall appear in the Security Register.
Unless otherwise indicated in an applicable prospectus
supplement, payment of any installment of interest on Registered
Securities will be made to the person in whose name such
Registered Security is registered at the close of business on
the regular record date for such interest payment.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless otherwise indicated in an applicable
prospectus supplement, payment of principal of and any premium
and interest on Bearer Securities will be payable (subject to
applicable laws and regulations) at the offices of such Paying
Agent or Paying Agents outside the United States as CNAF may
designate from time to time, except that, at CNAF&#146;s option,
payment of any interest may be made by check or by wire transfer
to an account maintained by the payee outside the United States.
Unless otherwise indicated in an applicable prospectus
supplement, payment of interest on Bearer Securities on any
interest payment date will be made only against surrender of the
coupon relating to such interest payment date. No payment with
respect to any Bearer Security will be made at any of
CNAF&#146;s offices or agencies in the United States or by check
mailed to any address in the United States or by wire transfer
to an account maintained in the United States. Payments will not
be made in respect of Bearer Securities or coupons relating to
those Bearer Securities pursuant to presentation to CNAF or its
Paying Agents within the United States. Notwithstanding the
foregoing, payment of principal of and any interest on Bearer
Securities denominated and payable in U.S.&nbsp;Dollars will be
made at the office of CNAF&#146;s Paying Agent in the United
States if, and only if, payment of the full amount thereof in
U.S.&nbsp;dollars at all offices or agencies outside the United
States is illegal or effectively precluded by exchange controls
or other similar restrictions and CNAF has delivered to the
Trustee an opinion of counsel to that effect.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless otherwise indicated in an applicable
prospectus supplement, the principal office of the Trustee in
The City of New York will be designated as CNAF&#146;s sole
Paying Agent for payments with respect to Offered Debt
Securities which are issuable solely as Registered Securities.
Any Paying Agent outside the United States and any other Paying
Agent in the United States initially designated by CNAF for the
Offered Debt Securities will be named in the applicable
prospectus supplement. CNAF may at any time designate additional
Paying Agents or rescind the designation of any Paying Agent or
approve a change in the office through which any Paying Agent
acts, except that, if Offered Debt Securities of a series are
issuable only as Registered Securities, CNAF will be required to
maintain a Paying Agent in each place of payment of such series
and, if Offered Debt Securities of a series are issuable as
Bearer Securities, CNAF will be required to maintain (i)&nbsp;a
Paying Agent in each place of payment for such series in the
United States for payments with respect to any Registered
Securities of such series (and for payments with respect to
Bearer Securities of such series in the circumstances described
above, but not otherwise), (ii)&nbsp;a Paying Agent in each
place of payment located outside the United States
</FONT>

<P align="center"><FONT size="2">12
</FONT>

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<DIV align="left">
<FONT size="2">where Offered Debt Securities of such series and
any coupons belonging thereto may be presented and surrendered
for payment; provided that if the Offered Debt Securities of
such series are listed on The International Stock Exchange, the
London Stock Exchange or the Luxembourg Stock Exchange or any
other stock exchange located outside the United States and such
stock exchange shall so require, CNAF will maintain a Paying
Agent in London or Luxembourg or any other required city located
outside the United States, as the case may be, for Offered Debt
Securities of such series, and (iii)&nbsp;a Paying Agent in each
place of payment located outside the United States where
(subject to applicable laws and regulations) Registered
Securities of such series may be surrendered for registration of
transfer or exchange and where notices and demands to or upon
CNAF may be served.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All monies paid by CNAF to a Paying Agent for the
payment of principal of and any interest on any Offered Debt
Securities that remains unclaimed for at least two years after
such principal, premium, if any, or interest has become due and
the payable will be repaid, at the request of CNAF, to CNAF.
After this repayment, the holder of such Offered Debt Security
or any coupon relating thereto will look only to CNAF for
payment thereof.
</FONT>

<P align="left">
<B><FONT size="2">Global Securities</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Offered Debt Securities of a series may be
issued in whole or in part in the form of one or more Global
Securities that will be deposited with, or on behalf of, a
depository (the &#147;Depository&#148;) identified in the
prospectus supplement relating to such series. Global Securities
may be issued only in fully registered form and may be issued in
either temporary or permanent form. Unless and until it is
exchanged in whole or in part for the individual Offered Debt
Securities represented thereby, a Global Security may not be
transferred except as a whole by the Depository for such Global
Security to a nominee of such Depository or by a nominee of such
Depository to such Depository or another nominee of such
Depository or by the Depository or any nominee of such
Depository to a successor Depository or any nominee of such
successor.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The specific terms of the depository arrangement
with respect to a series of Offered Debt Securities will be
described in the prospectus supplement relating to such series.
CNAF anticipates that the following provisions will generally
apply to depository arrangements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon the issuance of a Global Security, the
Depository for such Global Security or its nominee will credit
on its book-entry registration and transfer system the
respective principal amounts of the individual Offered Debt
Securities represented by such Global Security to the accounts
of persons that have accounts with such Depository
(&#147;Participants&#148;). Such accounts shall be designated by
the underwriters, dealers or agents with respect to such Offered
Debt Securities or by CNAF if such Offered Debt Securities are
offered and sold directly by CNAF. Ownership of beneficial
interests in a Global Security will be limited to Participants
or persons that may hold interests through Participants.
Ownership of beneficial interests in such Global Security will
be shown on, and the transfer of that ownership will be effected
only through, records maintained by the applicable Depository or
its nominee (with respect to interests of Participants) and
records of Participants (with respect to interests of persons
who hold through Participants). The laws of some states require
that certain purchasers of securities take physical delivery of
such securities in definitive form. Such limits and such laws
may impair the ability to own, pledge or transfer beneficial
interest in a Global Security.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">So long as the Depository for a Global Security
or its nominee is the registered owner of such Global Security,
such Depository or such nominee, as the case may be, will be
considered the sole owner or holder of the Offered Debt
Securities represented by such Global Security for all purposes
under the applicable Indenture. Except as provided below, owners
of beneficial interests in a Global Security will not be
entitled to have any of the individual Offered Debt Securities
of the series represented by such Global Security Registered in
their names, will not
</FONT>

<P align="center"><FONT size="2">13
</FONT>

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<DIV align="left">
<FONT size="2">receive or be entitled to receive physical
delivery of any such Offered Debt Securities of such series in
definitive form and will not be considered the owners or holders
thereof under the applicable Indenture.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Payments of principal of and any premium and any
interest on individual Offered Debt Securities represented by a
Global Security registered in the name of a Depository or its
nominee will be made to the Depository or its nominee, as the
case may be, as the registered owner of the Global Security
representing such Offered Debt Securities. None of CNAF, the
Trustee, any Paying Agent or the Security Registrar for such
Offered Debt Securities will have any responsibility or
liability for any aspect of the records relating to or payments
made on account of beneficial ownership interests in the Global
Security for such Offered Debt Securities or for maintaining,
supervising or reviewing any records relating to such beneficial
ownership interests.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">CNAF expects that the Depository for a series of
Offered Debt Securities or its nominee, upon receipt of any
payment of principal, premium or interest in respect of a
permanent Global Security representing any of such Offered Debt
Securities, immediately will credit Participants&#146; accounts
with payments in amounts proportionate to their respective
beneficial interest in the principal amount of such Global
Security for such Offered Debt Securities as shown on the
records of such Depository or its nominee. CNAF also expects
that payments by Participants to owners of beneficial interests
in such Global Security held through such Participants will be
governed by standing instructions and customary practices, as is
now the case with securities held for the accounts in bearer
form or registered in &#147;street name.&#148; Such payments
will be the responsibility of such Participants.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a Depository for a series of Offered Debt
Securities is at any time unwilling, unable or ineligible to
continue as depository and a successor depository is not
appointed by CNAF within 90&nbsp;days, CNAF will issue
individual Offered Debt Securities of such series in exchange
for the Global Security representing such series of Offered Debt
Securities. In addition, CNAF may, at any time and in its sole
discretion, subject to any limitations described in the
prospectus supplement relating to such Offered Debt Securities,
determine not to have any Offered Debt Securities of such series
represented by one or more Global Securities and, in such event,
will issue individual Offered Debt Securities of such series in
exchange for the Global Security or Securities representing such
series of Offered Debt Securities. Individual Offered Debt
Securities of such series so issued will be issued in
denominations, unless otherwise specified by CNAF, of $1,000 and
integral multiples thereof.
</FONT>

<P align="left">
<B><FONT size="2">Limitations on Issuance of Bearer
Securities</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In compliance with United States federal tax laws
and regulations, Bearer Securities may not be offered, sold,
resold or delivered in connection with their original issuance
in the United States or to United States persons (each as
defined below) other than to a Qualifying Foreign Branch of a
United States Financial Institution (as defined below), and any
underwriters, agents and dealers participating in the offering
of Offered Debt Securities must agree that they will not offer
any Bearer Securities for sale or resale in the United States or
to United States persons (other than a Qualifying Foreign Branch
of a United States Financial Institution) or deliver Bearer
Securities within the United States. In addition, any such
underwriters, agents and dealers must agree to send
confirmations to each purchaser of a Bearer Security confirming
that such purchaser represents that it is not a United States
person or is a Qualifying Branch of a United States Financial
Institution and, if such person is a dealer, that it will send
similar confirmations to purchasers from it. The term
&#147;Qualifying Foreign Branch of a United States Financial
Institution&#148; means a branch located outside the United
States of a United States securities clearing organization, bank
or other financial institution listed under Treasury Regulation
Section&nbsp;1.165-12(c)(1)(v) that agrees to comply with the
requirements of Section&nbsp;165(j)(3)(A), (B)&nbsp;or (C) of
the Code and the regulations thereunder.
</FONT>

<P align="center"><FONT size="2">14
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Bearer Securities and any coupons relating
thereto will bear a legend substantially to the following
effect: &#147;Any United States person who holds this obligation
will be subject to limitations under the United States income
tax laws, including the limitations provided in
Sections&nbsp;165(j) and 1287(a) of the Internal Revenue
Code.&#148; Under Sections&nbsp;165(j) and 1287(a) of the Code,
holders that are United States persons, with certain exceptions,
will not be entitled to deduct any loss on Bearer Securities and
must treat as ordinary income, any gain realized on the sale or
other disposition (including the receipt of principal) of Bearer
Securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The term &#147;United States person&#148; means a
citizen or resident of the United States, a corporation,
partnership or other entity created or organized in or under the
laws of the United States or of any political subdivision
thereof, an estate or, for taxable years beginning before
January 1, 1997, a trust the income of which is subject to
United States federal income taxation regardless of its source
or, for taxable years beginning after December&nbsp;31, 1996, a
trust if a U.S. court is able to exercise primary supervision
over the administration of the trust and one or more U.S.
fiduciaries have the authority to control all substantial
decisions of the trust. The term &#147;United States&#148; means
the United States of America (including the states and the
District of Columbia), its territories, its possessions and
other areas subject to its jurisdiction (including the
Commonwealth of Puerto Rico).
</FONT>

<P align="left">
<B><FONT size="2">Defeasance</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Indentures provide that CNAF will be
discharged from any and all obligations in respect of the Debt
Securities of any series (except for certain obligations to
register the transfer or exchange of Debt Securities of such
series, to replace stolen, lost or mutilated Debt Securities of
such series, to maintain paying agencies and to hold monies for
payment in trust) upon the deposit with the Trustee for such
series of Debt Securities in trust of money and/or U.S.
Government Obligations (as defined below) in an amount
sufficient to pay the principal of and each installment of
interest, if any, on the Debt Securities of such series on the
maturity of such payments in accordance with the terms of the
applicable Indenture and the Debt Securities of such series.
Such a trust may only be established if, among other things,
CNAF has delivered to such Trustee an Opinion of Counsel (who
may be CNAF&#146;s counsel) to the effect that (i)&nbsp;holders
of the Debt Securities of such series will not recognize income,
gain or loss for federal income tax purposes as a result of such
deposit, defeasance and discharge and will be subject to federal
income tax on the same amounts and in the same manner and at the
same times, as would have been the case if such deposit,
defeasance and discharge had not occurred, and (ii)&nbsp;the
Debt Securities of such series, if then listed on The New York
Stock Exchange, will not be delisted as a result of such
deposit, defeasance and discharge.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Indentures provide that, if applicable, CNAF
may omit to comply with any additional restrictive covenants
imposed on CNAF in connection with the establishment of any
series of Debt Securities and that clause (d)&nbsp;under
&#147;Events of Default&#148; with respect to such restrictive
covenants and clause (e)&nbsp;under &#147;Events of
Default&#148; shall not be deemed to be an Event of Default
under the applicable Indenture and the Debt Securities of any
series, upon the deposit with the Trustee under the applicable
Indenture, in trust of money and/or U.S. Government Obligations
which through the payment of interest and principal in respect
thereof in accordance with their terms will provide money in an
amount sufficient to pay the principal of, and each installment
of interest, if any, on the Debt Securities of such series on
the maturity of such payments in accordance with the terms of
the applicable Indenture and the Debt Securities of such series.
The obligations of CNAF under the applicable Indenture and Debt
Securities of such series other than with respect to the
covenants referred to above and the Events of Default other than
the Events of Default referred to above shall remain in full
force and effect. Such a trust may only be established if, among
other things, CNAF has delivered to the Trustee an Opinion of
Counsel (who may be counsel for CNAF) to the effect that
(i)&nbsp;the holders of the Debt Securities of such series will
not recognize income, gain or loss for federal income tax
purposes as a result
</FONT>

<P align="center"><FONT size="2">15
</FONT>

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<DIV align="left">
<FONT size="2">of such deposit and defeasance of certain
covenants and Events of Default and will be subject to federal
income tax on the same amounts and in the same manner and at the
same times, as would have been the case if such deposit and
defeasance had not occurred, and (ii)&nbsp;the Debt Securities
of such series, if then listed on The New York Stock Exchange,
will not be delisted as a result of such deposit and defeasance.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event CNAF exercises its option to omit
compliance with certain covenants of an Indenture with respect
to the Debt Securities of any series as described above and the
Debt Securities of such series are declared due and payable
because of the occurrence of any Event of Default other than an
Event of Default described in clauses&nbsp;(d) or (e) under
&#147;Events of Default,&#148; the amount of money and U.S.
Government Obligations on deposit with the Trustee will be
sufficient to pay amounts due on the Debt Securities of such
series at the time of the acceleration resulting from such Event
of Default. However, CNAF will remain liable for such payments.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The term &#147;U.S. Government Obligation&#148;
means direct noncallable obligations of, or noncallable
obligations guaranteed by, the United States or an agency
thereof for the payment of which guarantee or obligation, the
full faith and credit of the United States is pledged.
</FONT>

<P align="left">
<B><FONT size="2">Modification of the Indentures</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Indentures contain provisions permitting CNAF
and the Trustee, with the consent of the holders of a majority
of the principal amount of the Debt Securities of each series
then outstanding under such Indenture, to execute supplemental
indentures adding any provisions to or changing or eliminating
any of the provisions of the applicable Indenture or modifying
the rights of the holders of the Debt Securities of such series,
except that no such supplemental indenture may, among other
things, (i)&nbsp;extend the final maturity of any Debt
Securities, or reduce the rate or extend the time of payment of
interest thereon, or reduce the principal amount thereof, impair
the right to institute suit for payment thereof or reduce any
amount payable upon any redemption thereof without the consent
of the holder of the Debt Security so affected, or
(ii)&nbsp;reduce the aforesaid percentage of Debt Securities,
the consent of the holders of which is required for any such
supplemental indenture, without the consent of the holders of
all outstanding Debt Securities. CNAF&#146;s Board does not have
the power to waive any of the covenants of the Indentures
including those relating to consolidation, merger or sale of
assets.
</FONT>

<P align="left">
<B><FONT size="2">Events of Default</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">An Event of Default with respect to any series of
Debt Securities is defined in the Indentures as being:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">default by CNAF for thirty (30) days in the
    payment of any installment of interest on the Debt Securities of
    such series;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">default by CNAF in the payment of any principal
    on the Debt Securities of such series when due;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">default by CNAF in the payment of any sinking
    fund installment with respect to such series of Debt Securities;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">default by CNAF in the performance of any of the
    agreements in the applicable Indenture contained therein for the
    benefit of the Debt Securities of such series which shall not
    have been remedied within a period of 60 days after receipt of
    written notice by CNAF from the Trustee for such series of Debt
    Securities or by CNAF and such Trustee from the holders of not
    less than 25% in principal amount of the Offered Debt Securities
    of such series then outstanding;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">16
</FONT>

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">with respect to any series of Offered Debt
    Securities (unless otherwise specified in the accompanying
    prospectus supplement), the acceleration, or failure to pay at
    maturity, of any of CNAF&#146;s indebtedness for money borrowed
    exceeding $20,000,000 in principal amount, which acceleration is
    not rescinded or annulled or indebtedness paid within 15 days
    after the date on which written notice thereof shall have first
    been given to CNAF as provided in the applicable Indenture;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">certain events of bankruptcy, insolvency or
    reorganization of CNAF (a &#147;Bankruptcy Default&#148;); or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">any other Event of Default established in
    accordance with the applicable Indenture with respect to any
    series of Debt Securities.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">No Event of Default (other than a Bankruptcy
Default) with respect to a particular series of Debt Securities
necessarily constitutes an Event of Default with respect to any
other series of Debt Securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Indentures provide that if an Event of
Default with respect to any series of Debt Securities shall have
occurred and is continuing, either the Trustee with respect to
the Debt Securities of that series or the holders of at least
25% in aggregate principal amount of Debt Securities of that
series then outstanding may declare the principal amount (or, if
the Debt Securities of that series were sold at an original
issue discount, such portion of the principal amount as may be
specified in the terms of that series) of all the Debt
Securities of that series and interest, if any, accrued thereon
to be due and payable immediately, but upon certain conditions
such declaration may be annulled and past defaults (except,
unless theretofore cured, a default in payment of principal of
or interest on Debt Securities of that series) may be waived by
the holders of a majority in principal amount of the Debt
Securities of that series then outstanding.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Indentures each contain a provision entitling
the Trustee with respect to any series of Debt Securities,
subject to the duty of the Trustee during default to act with
the required standard of care, to be indemnified by the holders
of Debt Securities of such series before proceeding to exercise
any right or power under the applicable Indenture at the request
of the holders of such Debt Securities. The Indentures also
provide that the holders of a majority in principal amount of
the outstanding Debt Securities of any series may direct the
time, method and place of conducting any proceeding for any
remedy available to the Trustee for such series of Debt
Securities, or exercising any trust or power conferred on such
Trustee, with respect to the Debt Securities of such series. The
Indentures each contain a covenant that CNAF will file annually
with the Trustee a certificate as to the absence of any default
or specifying any default that exists.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">No holder of any Debt Security of any series will
have any right to institute any proceeding with respect to the
applicable Indenture or for any remedy under such Indenture,
unless (i)&nbsp;such holder previously shall have given the
Trustee for such series of Debt Securities written notice of an
Event of Default with respect to Debt Securities of that series
and (ii)&nbsp;the holders of at least 25% in aggregate principal
amount of the outstanding Debt Securities of that series shall
have made written request, and offered reasonable indemnity, to
such Trustee to institute such proceeding as trustee, and such
Trustee shall not have received from the holders of a majority
in aggregate principal amount of the outstanding Debt Securities
of that series a direction inconsistent with such request and
shall have failed to institute such proceeding within
60&nbsp;days. However, any right of a holder of any Debt
Security to receive payment of the principal of and any interest
on such Debt Security on or after the due dates expressed in
such CNAF Debt Security and to institute suit for the
enforcement of any such payment on or after such dates shall not
be impaired or affected without consent of such holder.
</FONT>

<P align="center"><FONT size="2">17
</FONT>

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<P align="left">
<B><FONT size="2">Consolidation, Merger and Sale of
Assets</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">CNAF covenants that it will not merge or
consolidate with any other corporation or sell or convey all or
substantially all of its assets to any Person, unless
(i)&nbsp;either CNAF shall be the continuing corporation, or the
successor corporation or the Person which acquires by sale or
conveyance substantially all of the assets of CNAF (if other
than CNAF) shall be a corporation organized under the laws of
the United States or any state thereof and shall expressly
assume the due and punctual payment of the principal of and
interest on all the Debt Securities, according to their tenor,
and the due and punctual performance and observance of all of
the covenants and conditions of the applicable Indenture to be
performed or observed by CNAF, by supplemental indenture
satisfactory to the Trustee, executed and delivered to the
Trustee by such corporation, and (ii)&nbsp;CNAF or such
successor corporation, as the case may be, shall not,
immediately after such merger or consolidation, or such sale or
conveyance, be in default in the performance of any such
covenants or condition.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Other than the covenants described above, or as
set forth in any accompanying prospectus supplement, the
Indentures and the Debt Securities do not contain any covenants
or other provisions designed to afford holders of the Debt
Securities protection in the event of a takeover,
recapitalization or highly leveraged transaction involving CNAF.
</FONT>

<P align="left">
<B><FONT size="2">No Personal Liability</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">No past, present or future director, officer,
employee or stockholder, as such, of CNAF or any successor
thereof shall have any liability for any obligations of CNAF
under the Debt Securities or the Indentures or for any claims
based on, in respect of, or by reason of, such obligations or
their creation. Each holder of Debt Securities by accepting such
Debt Security waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the
Debt Securities.
</FONT>

<P align="left">
<B><FONT size="2">The Trustee</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Trustee in its individual or any other
capacity may become the owner or pledgee of Debt Securities and
may otherwise deal with CNAF or its Affiliates with the same
rights it would have if it were not the Trustee provided it
complies with the terms of the applicable Indenture. The CNA
Companies and the Trustee may engage in normal and customary
banking transactions from time to time.
</FONT>

<P align="center">
<B><FONT size="2">DESCRIPTION OF JUNIOR DEBT
SECURITIES</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Junior Debt Securities may be issued in one
or more series under a Junior Subordinated Indenture (the
&#147;Junior Indenture&#148;), between CNAF and The First
National Bank of Chicago, as trustee (the &#147;Junior Indenture
Trustee&#148;). The Junior Indenture has been qualified under
the Trust Indenture Act and is subject to that act. The form of
the Junior Indenture is included as an exhibit to the
Registration Statement. The following description summarizes the
material terms of the Junior Indenture and the Junior Debt
Securities. Because it is only a summary, it does not contain
all of the details found in the full text of the Junior Debt
Securities and the Junior Indenture, including the definitions
of certain terms used in the description of the Junior Debt
Securities in this prospectus, and those terms made a part of
the Junior Indenture by the Trust Indenture Act.
</FONT>

<P align="left">
<B><FONT size="2">General</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Junior Indenture does not limit the aggregate
principal amount of Junior Debt Securities that may be issued
thereunder and provides that Junior Debt Securities may be
issued from time to time in one or more series and may be
denominated and payable in U.S. dollars, foreign
</FONT>

<P align="center"><FONT size="2">18
</FONT>

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<DIV align="left">
<FONT size="2">currencies or units based on or related to
foreign currencies. CNAF may sell Junior Debt Securities at par,
a premium or a discount. As of June&nbsp;30, 2001, CNAF had
approximately $2.13&nbsp;billion aggregate principal amount of
indebtedness for borrowed money which would rank senior to the
Junior Debt Securities, and no such indebtedness which is equal
or junior to the Junior Debt Securities.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Junior Debt Securities will be issuable in
one or more series pursuant to an indenture supplemental to the
Junior Indenture or a resolution of CNAF&#146;s Board of
Directors or a committee thereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The applicable prospectus supplement will provide
information for the following terms of the Junior Debt
Securities:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the title of the Junior Debt Securities or series
    thereof;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">any limit upon the aggregate principal amount of
    the Junior Debt Securities;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the date or dates on which the principal of the
    Junior Debt Securities is payable (the &#147;Stated
    Maturity&#148;) or the method of determination thereof;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the interest rate or rates, if any, for the
    Junior Debt Securities, the dates on which any such interest
    shall be payable, the right, if any, of CNAF to defer or extend
    an interest payment date, and the regular record date for any
    interest payable on any interest payment date or the method by
    which any of the foregoing shall be determined;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the place or places where, subject to the terms
    of the Junior Indenture as described below under &#147;Payment
    and Paying Agents,&#148; the principal of and premium, if any,
    and interest on the Junior Debt Securities will be payable and
    where, subject to the terms of the Junior Indenture as described
    below under &#147;&#151;Denominations, Registration and
    Transfer,&#148; the Junior Debt Securities may be presented for
    registration of transfer or exchange and the place or places
    where notices and demands to or upon CNAF in respect of the
    Junior Debt Securities and the Junior Indenture may be made
    (&#147;Place of Payment&#148;);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the obligation or the right, if any, of CNAF to
    redeem, purchase or repay the Junior Debt Securities and the
    period or periods within which, the price or prices at which,
    the currency or currencies (including currency unit or units) in
    which and the other terms and conditions upon which the Junior
    Debt Securities shall be redeemed, repaid or purchased, in whole
    or in part, pursuant to such obligation;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the denominations in which any Junior Debt
    Securities shall be issuable if other than denominations of $25
    and any integral multiple thereof;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">if other than in U.S. Dollars, the currency or
    currencies (including currency unit or units) in which the
    principal of (and premium, if any) and interest, if any, on the
    Junior Debt Securities shall be payable, or in which the Junior
    Debt Securities shall be denominated;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">any additions, modifications or deletions in the
    Events of Default or covenants of CNAF specified in the Junior
    Indenture with respect to the Junior Debt Securities;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">if other than the principal amount thereof, the
    portion of the principal amount of Junior Debt Securities that
    shall be payable upon declaration of acceleration of the
    maturity thereof;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">any additions or changes to the Junior Indenture
    with respect to a series of Junior Debt Securities as shall be
    necessary to permit or facilitate the issuance of such series in
    bearer form, registrable or not registrable as to principal, and
    with or without interest coupons;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">19
</FONT>

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">any index or indices used to determine the amount
    of payments of principal of and premium, if any, on the Junior
    Debt Securities and the manner in which such amounts will be
    determined;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the terms and conditions relating to the issuance
    of a temporary Global Security representing all of the Junior
    Debt Securities of such series and the exchange of such
    temporary Global Security for definitive Junior Debt Securities
    of such series;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">subject to the terms described under
    &#147;&#151;Global Junior Debt Securities,&#148; whether the
    Junior Debt Securities of the series shall be issued in whole or
    in part in the form of one or more Global Securities and, in
    such case, the Depositary for such Global Securities, which
    Depositary shall be a clearing agency registered under the
    Securities Exchange Act of 1934, as amended (the &#147;Exchange
    Act&#148;);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the appointment of any Paying Agent or Agents;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the terms and conditions of any obligation or
    right of CNAF or a holder to convert or exchange the Junior Debt
    Securities into other securities;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the form of the Trust Agreement and Guarantee
    Agreement, if applicable;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the relative degree, if any, to which such Junior
    Debt Securities of the series shall be senior to or be
    subordinated to other series of such Junior Debt Securities or
    other indebtedness of CNAF in right of payment, whether such
    other series of Junior Debt Securities or other indebtedness are
    outstanding or not; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">any other terms of the Junior Debt Securities not
    inconsistent with the provisions of the Junior Indenture.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the purchase price of any of the Junior Debt
Securities is payable in a foreign currency or currencies or
foreign currency unit or units or if the principal, premium, if
any, and interest on any Junior Debt Securities are payable in a
foreign currency or currencies or currency unit or units, the
restrictions, elections, general tax considerations, specific
terms and other information with respect to such issue of Junior
Debt Securities and such foreign currency or currency units will
be set forth in the applicable prospectus supplement.
</FONT>

<P align="left">
<B><FONT size="2">Denominations, Registration and
Transfer</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless otherwise specified in the applicable
prospectus supplement, the Junior Debt Securities will be
issuable only in registered form without coupons in
denominations of $25 and any integral multiple thereof. Junior
Debt Securities of any series will be exchangeable for other
Junior Debt Securities of the same issue and series, of any
authorized denominations, of a like aggregate principal amount,
and bearing the same terms.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Junior Debt Securities may be presented for
exchange as provided above, and may be presented for
registration of transfer (with the form of transfer endorsed
thereon, or a satisfactory written instrument of transfer, duly
executed), at the office of the appropriate Securities Registrar
or at the office of any transfer agent designated by CNAF for
such purpose with respect to any series of Junior Debt
Securities and referred to in the applicable prospectus
supplement, without service charge and upon payment of any taxes
and other governmental charges as described in the Junior
Indenture. CNAF will appoint the Junior Indenture Trustee as
Securities Registrar under the Junior Indenture. If the
applicable prospectus supplement refers to any transfer agents
(in addition to the Securities Registrar) initially designated
by CNAF with respect to any series of Junior Debt Securities,
CNAF may at any time rescind the designation of any such
transfer agent or approve a change in the location through which
any such transfer agent acts, provided that CNAF maintains a
transfer agent in each Place of Payment for such series. CNAF
may at any time designate additional transfer agents with
respect to any series of Junior Debt Securities.
</FONT>

<P align="center"><FONT size="2">20
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event of any redemption, neither CNAF nor
the Junior Indenture Trustee shall be required to
(i)&nbsp;issue, register the transfer of or exchange Junior Debt
Securities of any series during a period beginning at the
opening of business 15 days before the day of selection for
redemption of Junior Debt Securities of that series and ending
at the close of business on the day of mailing of the relevant
notice of redemption or (ii)&nbsp;transfer or exchange any
Junior Debt Securities so selected for redemption, except, in
the case of any Junior Debt Securities being redeemed in part,
any portion thereof not to be redeemed.
</FONT>

<P align="left">
<B><FONT size="2">Payment and Paying Agents</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless otherwise indicated in the applicable
prospectus supplement, payment of principal of (and premium, if
any) and any interest on Junior Debt Securities will be made at
the office of the Junior Indenture Trustee in The City of New
York or at the office of such Paying Agent or Paying Agents as
CNAF may designate from time to time in the applicable
prospectus supplement, except that at the option of CNAF payment
of any interest may be made (i),&nbsp;except in the case of
Global Junior Debt Securities, by check mailed to the address of
the Person entitled thereto as such address shall appear in the
Securities Register or (ii)&nbsp;by transfer to an account
maintained by the Person entitled thereto as specified in the
Securities Register, provided that proper transfer instructions
have been received by the regular record date. Unless otherwise
indicated in the applicable prospectus supplement, payment of
any interest on Junior Debt Securities will be made to the
Person in whose name such Junior Debt Security is registered at
the close of business on the Regular Record Date for such
interest, except in the case of defaulted interest. CNAF may at
any time designate additional Paying Agents or rescind the
designation of any Paying Agent; however CNAF will at all times
be required to maintain a Paying Agent in each Place of Payment
for each series of Junior Debt Securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All monies paid by CNAF to the Junior Indenture
Trustee or any Paying Agent, or then held by CNAF in trust, for
the payment of the principal, premium, if any, or interest on
any Junior Debt Security that remains unclaimed for two years
after such principal, premium, if any, or interest has become
due and payable, at the request of CNAF, will be repaid to CNAF.
After this repayment, the holder of such Junior Debt Security
will look only to CNAF for payment thereof.
</FONT>

<P align="left">
<B><FONT size="2">Global Junior Debt Securities</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Junior Debt Securities of a series may be
issued in whole or in part in the form of one or more Global
Junior Debt Securities that will be deposited with, or on behalf
of, a depositary (the &#147;Depositary&#148;) identified in the
prospectus supplement relating to such series. Global Junior
Debt Securities may be issued only in fully registered form and
in either temporary or permanent form. Unless and until it is
exchanged in whole or in part for the individual Junior Debt
Securities represented thereby, a Global Junior Debt Security
may not be transferred except as a whole by the Depositary for
such Global Junior Debt Security to a nominee of such Depositary
or by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by the Depositary or any nominee
to a successor Depositary or any nominee of such successor.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The specific terms of the depositary arrangement
with respect to a series of Junior Debt Securities will be
described in the prospectus supplement relating to such series.
CNAF anticipates that the provisions described above under the
heading &#147;Description of Debt Securities-Global
Securities&#148; will generally apply to depositary arrangements
with respect to the Junior Debt Securities, as if the Junior
Debt Securities were &#147;Debt Securities&#148; as discussed in
that section.
</FONT>

<P align="left">
<B><FONT size="2">Option to Extend Interest Payment
Date</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If provided in the applicable prospectus
supplement, CNAF shall have the right at any time and from time
to time during the term of any series of Junior Debt Securities
to defer payment of
</FONT>

<P align="center"><FONT size="2">21
</FONT>

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<DIV align="left">
<FONT size="2">interest for such number of consecutive interest
payment periods as may be specified in the applicable prospectus
supplement (each, an &#147;Extension Period&#148;), subject to
the terms, conditions and covenants, if any, specified in such
prospectus supplement, provided that such Extension Period may
not extend beyond the Stated Maturity of such series of Junior
Debt Securities.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Redemption</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless otherwise indicated in the applicable
prospectus supplement, Junior Debt Securities will not be
subject to any sinking fund.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless otherwise indicated in the applicable
prospectus supplement, CNAF may, at its option, redeem the
Junior Debt Securities of any series in whole at any time or in
part from time to time. Except as otherwise specified in the
applicable prospectus supplement, the redemption price for any
Junior Debt Security so redeemed shall equal any accrued and
unpaid interest thereon to the redemption date, plus the
principal amount thereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Except as otherwise specified in the applicable
prospectus supplement, if a Tax Event (as defined below) or an
Investment Company Event (as defined below) in respect of a
series of Junior Debt Securities shall occur and be continuing,
CNAF may, at its option, redeem such series of Junior Debt
Securities in whole (but not in part) at any time within
90&nbsp;days of the occurrence of such Tax Event, or Investment
Company Event, at a redemption price equal to 100% of the
principal amount of such Junior Debt Securities then outstanding
plus accrued and unpaid interest to the date fixed for
redemption.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Tax Event&#148; means, with respect to a
CNA Capital Trust, the receipt by CNAF and that CNA Capital
Trust of an opinion of counsel experienced in such matters to
the effect that, as a result of any amendment to, or change
(including any announced prospective change) in, the laws (or
any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein, or
as a result of any official administrative pronouncement, such
determination or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or
which pronouncement, determination or decision is announced on
or after the date of original issuance of the applicable series
of Junior Debt Securities under the Junior Indenture, there is
more than an insubstantial risk that (i)&nbsp;that such CNA
Capital Trust is, or will be within 90 days of the date of the
opinion of counsel, subject to United States federal income tax
with respect to income received or accrued on the applicable
Junior Debt Securities, (ii)&nbsp;interest payable by CNAF on
such series of Junior Debt Securities is not, or within
90&nbsp;days of the date of such opinion will not be, deductible
by CNAF, in whole or in part, for United States federal income
tax purposes, or (iii)&nbsp;such CNA Capital Trust is, or will
be within 90&nbsp;days of the date of such opinion, subject to
more than the minimal amount of the taxes, duties or other
government charges.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Investment Company Event&#148; means the
receipt by CNAF and a CNA Capital Trust of an opinion of
counsel, experienced in such matters to the effect that, as a
result of the occurrence of a change in law or regulation or a
change in interpretation or application of law or regulation by
any legislative body, court, governmental agency or regulatory
authority, that such CNA Capital Trust is or will be considered
an &#147;investment company&#148; that is required to be
registered under the Investment Company Act of 1940, which
change becomes effective on or after the date of original
issuance of the applicable series of Junior Debt Securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Notice of any redemption will be mailed at least
30&nbsp;days but not more than 60&nbsp;days before the
redemption date to each holder of Junior Debt Securities to be
redeemed at its registered address. Unless CNAF defaults in
payment of the redemption price, on and after the redemption
date interest ceases to accrue on such Junior Debt Securities or
portions thereof called for redemption.
</FONT>

<P align="center"><FONT size="2">22
</FONT>

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<P align="left">
<B><FONT size="2">Modification of Junior Indenture</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">From time to time CNAF and the Junior Indenture
Trustee may, without the consent of the holders of any series of
Junior Debt Securities, amend, waive or supplement the Junior
Indenture for specified purposes, including, among other things,
curing ambiguities, defects or inconsistencies (provided that
any such action does not materially adversely affect the
interest of the holders of any series of Junior Debt Securities
or, in the case of Junior Debt Securities issued to a CNA
Capital Trust (&#147;Corresponding Junior Debt
Securities&#148;), the holders of the Preferred Securities
issued by such CNA Trust (&#147;Related Preferred
Securities&#148;) so long as they remain outstanding) and
qualifying, or maintaining the qualification of, the Junior
Indenture under the Trust Indenture Act. The Junior Indenture
contains provisions permitting CNAF and the Junior Indenture
Trustee, with the consent of the holders of a majority in
principal amount of each outstanding series of Junior Debt
Securities affected, to modify the Junior Indenture in a manner
affecting the rights of the holders of such series of the Junior
Debt Securities; provided, that no such modification may,
without the consent of the holder of each outstanding Junior
Debt Security so affected, (i)&nbsp;change the Stated Maturity
of any series of Junior Debt Securities, or reduce the principal
amount thereof, or reduce the rate (or change the manner of
calculation of the rate) or extend the time of payment of
interest thereon (except such extension as is contemplated
hereby), (ii)&nbsp;change any of the redemption, conversion or
exchange terms, (iii)&nbsp;reduce the percentage of principal
amount of Junior Debt Securities of any series, the holders of
which are required to consent to any such modification of the
Junior Indenture, (iv)&nbsp;modify the provisions relating to
modifications, waivers of covenants or waivers of past default
except under certain limited circumstances or (v)&nbsp;change
any of the subordination provisions provided that, in the case
of Corresponding Junior Debt Securities, so long as any of the
Related Preferred Securities remain outstanding, no such
modification may be made without the prior consent of a majority
in liquidation amount of such Related Preferred Securities, or,
in the case of the preceding provision, each holder of the
Related Preferred Securities, and no termination of the Junior
Indenture may occur, and no waiver of any Junior Debt Security
Event of Default or compliance with any covenant under the
Junior Indenture may be effective, without the prior consent of
the holders of a majority of the aggregate liquidation amount of
such Related Preferred Securities unless and until the principal
of the Corresponding Junior Debt Securities and all accrued and
unpaid interest thereon have been paid in full and certain other
conditions are satisfied.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, CNAF and the Junior Indenture
Trustee may execute, without the consent of any holder of Junior
Debt Securities, any supplemental Junior Indenture for the
purpose of creating any new series of Junior Debt Securities.
</FONT>

<P align="left">
<B><FONT size="2">Junior Debt Related Events of
Default</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Junior Indenture provides that any one or
more of the following described events with respect to a series
of Junior Debt Securities that has occurred and is continuing
constitutes a &#147;Junior Debt Related Event of Default&#148;
with respect to such series of Junior Debt Securities:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">failure for 30&nbsp;days to pay any interest on
    such series of the Junior Debt Securities, when due (subject to
    the deferral of any due date in the case of an Extension
    Period); or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">failure to pay any principal or premium on such
    series of Junior Debt Securities when due whether at maturity,
    upon redemption by declaration or otherwise; or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">failure to observe or perform in any material
    respect certain other covenants contained in the Junior
    Indenture for 90&nbsp;days after written notice to CNAF from the
    Junior Indenture Trustee or the holders of at least 25% in
    aggregate outstanding principal amount of such series of
    outstanding Junior Debt Securities; or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">certain events in bankruptcy, insolvency or
    reorganization of CNAF.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">23
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The holders of a majority in aggregate
outstanding principal amount of such series of Junior Debt
Securities have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the
Junior Indenture Trustee. The Junior Indenture Trustee or the
holders of not less than 25% in aggregate outstanding principal
amount of such series of Junior Debt Securities may declare the
principal due and payable immediately upon a Junior Debt Related
Event of Default. In the case of Corresponding Junior Debt
Securities, should the Junior Indenture Trustee fail to make
such declaration, the holders of at least 25% in aggregate
liquidation amount of the Related Preferred Securities shall
have such right. The holders of a majority in aggregate
outstanding principal amount of such series of Junior Debt
Securities may annul such declaration and waive the default if
the default (other than the non-payment of the principal of such
series of Junior Debt Securities which has become due solely by
such acceleration) has been cured and a sum sufficient to pay
all matured installments of interest and principal due otherwise
than by acceleration has been deposited with the Junior
Indenture Trustee. In the case of Corresponding Junior Debt
Securities, the holders of a majority in aggregate liquidation
amount of the Related Preferred Securities shall have such right.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The holders of a majority in aggregate
outstanding principal amount of the Junior Debt Securities
affected thereby may, on behalf of the holders of all the Junior
Debt Securities, waive any past default, except a default in the
payment of principal, premium, if any, or interest (unless such
default has been cured and a sum sufficient to pay all matured
installments of interest and principal due otherwise than by
acceleration has been deposited with the Junior Indenture
Trustee) or a default in respect of a covenant or provision
which under the Junior Indenture cannot be modified or amended
without the consent of the holder of each outstanding Junior
Subordinated Debt Security. In the case of Corresponding Junior
Debt Securities, the holders of a majority in aggregate
liquidation amount of the Related Preferred Securities shall
have such right. CNAF is required to file annually with the
Junior Indenture Trustee a certificate as to whether or not CNAF
is in compliance with all the conditions and covenants
applicable to it under the Junior Indenture.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In case a Junior Debt Related Event of Default
shall occur and be continuing as to a series of Corresponding
Junior Debt Securities, the Property Trustee will have the right
to declare the principal of and the interest on such
Corresponding Junior Debt Securities, and any other amounts
payable under the Junior Indenture, to be immediately due and
payable and to enforce its other rights as a creditor with
respect to such Corresponding Junior Debt Securities.
</FONT>

<P align="left">
<B><FONT size="2">Enforcement of Certain Rights by Holders of
Preferred Securities</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a Junior Debt Related Event of Default has
occurred and is continuing and such event is attributable to the
failure of CNAF to pay interest or principal on the related
Junior Debt Securities on the date such interest or principal is
otherwise payable, a holder of Related Preferred Securities may
institute a legal proceeding directly against CNAF for
enforcement of payment to such holder of the principal and
premium, if any, of or interest on such related Junior Debt
Securities having a principal amount equal to the aggregate
liquidation amount of the Related Preferred Securities of such
holder (a &#147;Direct Action&#148;). CNAF may not amend the
Junior Indenture to remove this right to bring a Direct Action
without the consent of all holders of the Related Preferred
Securities. If such right is removed, the applicable Issue may
become subject to the reporting obligations under the Securities
Exchange Act of 1934, as amended. CNAF shall have the right
under the Junior Indenture to set-off any payment made to such
holder of Preferred Securities by CNAF in connection with a
Direct Action.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The holders of the Preferred Securities would not
be able to exercise directly any remedies other than those
described in the preceding paragraph available to the holders of
the Junior Debt Securities unless there shall have been an Event
of Default under the Trust Agreement. See &#147;Description of
Preferred Securities&nbsp;&#151; Events of Default; Notice.&#148;
</FONT>

<P align="center"><FONT size="2">24
</FONT>

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<P align="left">
<B><FONT size="2">Consolidation, Merger, Sale of Assets and
Other Transactions</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Junior Indenture provides that CNAF shall not
consolidate with or merge into any other Person or convey,
transfer or lease its properties and assets as an entirety or
substantially as an entirety to any Person, and no Person shall
consolidate with or merge into CNAF or convey, transfer or lease
its properties and assets as an entirety or substantially as an
entirety to CNAF, unless (i)&nbsp;in case CNAF consolidates with
or merges into another Person or conveys, transfers or leases
its properties and assets as an entirety or substantially as an
entirety to any Person, the successor Person is organized under
the laws of the United States or any state or the District of
Columbia, and such successor Person expressly assumes
CNAF&#146;s obligations on the Junior Debt Securities issued
under the Junior Indenture; (ii)&nbsp;immediately after giving
effect thereto, no Junior Debt Related Event of Default, and no
event which, after notice or lapse of time or both, would become
a Junior Debt Related Event of Default, shall have happened and
be continuing; (iii)&nbsp;in the case of Corresponding Junior
Debt Securities, such transaction is permitted under the related
Trust Agreement and Guarantee and does not give rise to any
breach or violation of the related Trust Agreement or Guarantee;
and (iv)&nbsp;delivery of appropriate officers certificates and
opinions of counsel go to the satisfaction of the above listed
conditions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Other than the covenants described above, or as
set forth in any accompanying prospectus supplement, the Junior
Indenture and the Junior Debt Securities do not contain any
covenants or other provisions designed to afford holders of the
Junior Debt Securities protection in the event of a takeover,
recapitalization or highly leveraged transaction involving CNAF.
</FONT>

<P align="left">
<B><FONT size="2">Satisfaction and Discharge</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Junior Indenture provides that when, among
other things, all Junior Debt Securities not previously
delivered to the Junior Indenture Trustee for cancellation
(i)&nbsp;have become due and payable, (ii)&nbsp;will become due
and payable at their Stated Maturity within one year or
(iii)&nbsp;are to be called for redemption within one year, and
CNAF deposits or causes to be deposited with the Junior
Indenture Trustee trust funds, in trust, for the purpose and in
an amount in the currency or currencies in which the Junior Debt
Securities are payable sufficient to pay and discharge the
entire indebtedness on the Junior Debt Securities not previously
delivered to the Junior Indenture Trustee for cancellation, for
the principal, premium, if any, and interest, if any, to the
date of the deposit or to the Stated Maturity, as the case may
be, then the Junior Indenture will cease to be of further effect
(except as to CNAF&#146;s obligations to pay all other sums due
pursuant to the Junior Indenture and to provide the
officers&#146; certificates and opinions of counsel described
therein), and CNAF will be deemed to have satisfied and
discharged the Junior Indenture.
</FONT>

<P align="left">
<B><FONT size="2">Conversion or Exchange</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If and to the extent indicated in the applicable
prospectus supplement, the Junior Debt Securities of any series
may be convertible or exchangeable into Preferred Securities or
other securities. The specific terms on which Junior Debt
Securities of any series may be so converted or exchanged will
be set forth in the applicable prospectus supplement. Such terms
may include provisions for conversion or exchange, either
mandatory, at the option of the holder, or at the option of
CNAF, in which case the number of shares of Preferred Securities
or other securities to be received by the Holders of Junior Debt
Securities would be calculated as of a time and in the manner
stated in the applicable prospectus supplement.
</FONT>

<P align="left">
<B><FONT size="2">Subordination</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the Junior Indenture, CNAF has agreed that any
Junior Debt Securities issued thereunder will be subordinate and
junior in right of payment to all Senior Debt (as defined below)
to the extent provided in the Junior Indenture. Upon any payment
or distribution of assets to creditors upon any liquidation,
dissolution, winding up, reorganization, assignment for the
benefit of
</FONT>

<P align="center"><FONT size="2">25
</FONT>

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<DIV align="left">
<FONT size="2">creditors, marshaling of assets or any
bankruptcy, insolvency, debt restructuring or similar
proceedings in connection with any insolvency or bankruptcy
proceeding of CNAF, the holders of Senior Debt will be entitled
to receive payment in full of principal of (and premium, if any)
and interest, if any, on such Senior Debt before the holders of
Junior Debt Securities or, in the case of Corresponding Junior
Debt Securities, the Property Trustee on behalf of the holders,
will be entitled to receive or retain any payment in respect of
the principal of (and premium, if any) or interest, if any, on
the Junior Debt Securities.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event of the acceleration of the maturity
of any Junior Debt Securities, the holders of all Senior Debt
outstanding at the time of such acceleration will be entitled to
receive payment in full of all amounts due thereon (including
any amounts due upon acceleration) before the holders of Junior
Debt Securities will be entitled to receive or retain any
payment in respect of the principal of (or premium, if any) or
interest, if any, on the Junior Debt Securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">No payments on account of principal (or premium,
if any) or interest, if any, in respect of the Junior Debt
Securities may be made if there shall have occurred and be
continuing a default in any payment with respect to Senior Debt,
or an event of default with respect to any Senior Debt resulting
in the acceleration of the maturity thereof, or if any judicial
proceeding shall be pending with respect to any such default.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Debt&#148; means with respect to any
Person, whether recourse is to all or a portion of the assets of
such Person and whether or not contingent:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">every obligation of such Person for money
    borrowed;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">every obligation of such Person evidenced by
    bonds, debentures, notes or other similar instruments, including
    obligations incurred in connection with the acquisition of
    property, assets or businesses;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">every reimbursement obligation of such Person
    with respect to letters of credit, bankers&#146; acceptances or
    similar facilities issued for the account of such Person;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">every obligation of such Person issued or assumed
    as the deferred purchase price of property or services (but
    excluding trade accounts payable or accrued liabilities arising
    in the ordinary course of business);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">every capital lease obligation of such Person;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">all indebtedness of CNAF, whether incurred on or
    prior to the date of the Junior Indenture or thereafter
    incurred, for claims in respect of derivative products,
    including interest rate, foreign exchange rate and commodity
    forward contracts, futures contracts, options and swaps and
    similar arrangements; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">every obligation of the type referred to in the
    preceding bullet points of another Person and all dividends of
    another Person the payment of which, in either case, such Person
    has guaranteed or is responsible or liable, directly or
    indirectly, as obligor or otherwise.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Senior Debt&#148; means the principal of
(and premium, if any) and interest, if any, including interest
accruing on or after the filing of any petition in bankruptcy or
for reorganization relating to CNAF, whether or not such claim
for post-petition interest is allowed in such proceeding, on
Debt, whether incurred on or prior to the date of the Junior
Indenture or thereafter incurred (including, without limitation,
Debt incurred pursuant to the Senior Indenture and the
Subordinated Indenture), unless, in the instrument creating or
evidencing the same or pursuant to which the same is
outstanding, it is provided that such obligations are not
superior in right of payment to the Junior Debt Securities or to
other Debt which is pari passu with, or subordinated
</FONT>

<P align="center"><FONT size="2">26
</FONT>

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<DIV align="left">
<FONT size="2">to, the Junior Debt Securities; provided,
however, that Senior Debt shall not be deemed to include:
</FONT>
</DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">any Debt of CNAF which, when incurred and without
    respect to any election under Section&nbsp;1111(b) of the
    Bankruptcy Code, was without recourse to CNAF;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">any Debt of CNAF to any of its subsidiaries;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Debt to any employee of CNAF;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">any liability for taxes;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">indebtedness or monetary obligations to trade
    creditors or assumed by CNAF or any of its subsidiaries in the
    ordinary course of business in connection with the obtaining of
    goods, materials or services; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">any other Junior Debt Securities.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Junior Indenture provides that the foregoing
subordination provisions, insofar as they relate to any
particular issue of Junior Debt Securities, may be changed prior
to such issuance. Any such change would be described in the
applicable prospectus supplement.
</FONT>

<P align="left">
<B><FONT size="2">Information Concerning the Junior Indenture
Trustee</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Junior Indenture Trustee, other than during
the continuance of a Junior Debt Related Event of Default,
undertakes to perform only such duties as are specifically set
forth in the Junior Indenture, and in the event an Event of
Default has occurred and is continuing, exercise the same degree
of care and skill in the exercise of its rights and powers as a
prudent person would exercise or use under the circumstances in
the conduct of his own affairs. The Junior Indenture Trustee is
under no obligation to exercise any of the powers vested in it
by the Junior Indenture at the request of any holder of Junior
Debt Securities, unless offered reasonable indemnity by such
holder against the costs, expenses and liabilities which might
be incurred thereby. The Junior Indenture Trustee is not
required to expend or risk its own funds or otherwise incur
personal financial liability in the performance of its duties if
the Junior Indenture Trustee reasonably believes that repayment
or adequate indemnity is not reasonably assured to it. The
Junior Trustee in its individual or any other capacity may
become the owner or pledgee of Junior Debt Securities or Related
Preferred Securities and may otherwise deal with CNAF or its
Affiliates with the same rights it would have if it were not the
Junior Trustee provided it complies with the terms of the Junior
Indenture. The CNA Companies and the Junior Trustee may engage
in normal and customary banking transactions from time to time.
</FONT>

<P align="left">
<B><FONT size="2">Corresponding Junior Debt Securities</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Corresponding Junior Debt Securities may be
issued in one or more series of Junior Debt Securities under the
Junior Indenture with terms corresponding to the terms of a
series of Related Preferred Securities. In that event,
concurrently with the issuance of the applicable CNA Capital
Trust&#146;s Preferred Securities, such CNA Capital Trust will
invest the proceeds thereof and the consideration paid by CNAF
for the Common Securities in a series of Corresponding Junior
Debt Securities issued by CNAF to such CNA Capital Trust. Each
series of Corresponding Junior Debt Securities will be in the
principal amount equal to the aggregate liquidation amount of
the Related Preferred Securities and the Common Securities of
such CNA Capital Trust and will rank pari passu with all other
series of Junior Debt Securities. Holders of the Related
Preferred Securities for a series of Corresponding Junior Debt
Securities will have the rights in connection with modifications
to the Junior Indenture or upon occurrence of Junior Debt
Security Events of Default described under &#147;&#151;
Modification of Junior Indenture&#148; and &#147;&#151; Junior
Debt Security Events of Default&#148;, unless provided otherwise
in the prospectus supplement for such Related Preferred
Securities.
</FONT>

<P align="center"><FONT size="2">27
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">CNAF will covenant in the Junior Indenture as to
each series of Corresponding Junior Debt Securities, that if and
so long as (i)&nbsp;the CNA Capital Trust of the related series
of Trust Securities is the holder of all such Corresponding
Junior Debt Securities and (ii)&nbsp;a Tax Event in respect of
such CNA Capital Trust has occurred and is continuing CNAF will
pay to such CNA Capital Trust the applicable Additional Sums (as
defined under &#147;Description of Preferred Securities&#151;
Redemption or Exchange&#148;). CNAF will also agree, as to each
series of Corresponding Junior Debt Securities:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to maintain directly or indirectly 100% ownership
    of the Common Securities of the CNA Capital Trust to which
    Corresponding Junior Debt Securities have been issued, provided
    that certain successors which are permitted pursuant to the
    Junior Indenture may succeed to CNAF&#146;s ownership of the
    Common Securities
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">not to voluntarily terminate, wind-up or
    liquidate any CNA Capital Trust, except in connection with
    (a)&nbsp;a distribution of Corresponding Junior Debt Securities
    to the holders of the Preferred Securities in liquidation of
    such CNA Capital Trust, (b)&nbsp;the redemption of Preferred
    Securities or (c)&nbsp;certain mergers, consolidations or
    amalgamations, in each case as permitted by the related Trust
    Agreement; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to use its reasonable efforts, consistent with
    the terms and provisions of the related Trust Agreement, to
    cause (a)&nbsp;such CNA Capital Trust to remain classified as a
    grantor trust and not as an association taxable as a corporation
    for United&nbsp;States federal income tax purposes or
    (b)&nbsp;each holder of Preferred Securities to be treated as
    owning an undivided beneficial interest in the Securities.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">No Personal Liability</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">No past, present or future director, officer,
employee or stockholder, as such, of CNAF or any successor
thereof shall have any liability for any obligations of CNAF
under the Junior Debt Securities or the Junior Indenture or for
any claims based on, in respect of, or by reason of, such
obligations or their creation. Each holder of Junior Debt
Securities by accepting such Junior Debt Security waives and
releases all such liability. The waiver and release are part of
the consideration for the issue of the Junior Debt Securities.
</FONT>

<P align="center">
<B><FONT size="2">DESCRIPTION OF COMMON STOCK</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">CNAF is authorized to issue 200 million shares of
Common Stock. As of June&nbsp;30, 2001, 185.5&nbsp;million
shares of Common Stock were issued and 183.3&nbsp;million were
outstanding. The Common Stock has a par value of $2.50 per
share. As of February&nbsp;28, 1999, Loews Corporation owned
approximately 85% of CNAF&#146;s outstanding Common Stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following summary description of the terms of
the Common Stock sets forth certain general terms and provisions
of the Common Stock. This description is qualified in its
entirety by reference to (i)&nbsp;CNAF&#146;s Certificate of
Incorporation, a copy of which is filed as an exhibit to
CNAF&#146;s Registration Statement on Form&nbsp;S-8 (File
No.&nbsp;333-65493), (ii)&nbsp;CNAF&#146;s By-laws, a copy of
which is filed as an exhibit to CNAF&#146;s Annual Report on
Form&nbsp;10-K for the year ended December&nbsp;31, 1998, and
(iii)&nbsp;the description of the Common Stock set forth in
CNAF&#146;s registration statement on Form&nbsp;S-3 (File
No.&nbsp;33-35250) filed on June&nbsp;6, 1990, all of which are
incorporated herein by reference.
</FONT>

<P align="left">
<B><FONT size="2">Dividends</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Subject to the rights of the holders of Preferred
Stock, holders of Common Stock are entitled to receive dividends
and other distributions in cash, stock or CNAF&#146;s property,
when, as and if declared by CNAF&#146;s Board of Directors out
of assets or funds of CNAF legally available therefor and shall
share equally on a per share basis in all such dividends and
distributions.
</FONT>

<P align="center"><FONT size="2">28
</FONT>

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<P align="left">
<B><FONT size="2">Voting Rights</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At every meeting of stockholders, every holder of
Common Stock is entitled to one vote per share. Subject to any
voting rights of the holders of Preferred Stock and as otherwise
required by Delaware law, any action submitted to stockholders
(other than the election of directors) is approved, if approved
by a majority of the stock having voting power present at a
meeting at which there is a quorum. A quorum generally requires
the presence, in person or proxy, of the holders of a majority
of the stock issued and outstanding. Delaware law requires that
the holders of a majority of the issued and outstanding shares
of stock, eligible to vote thereon, approve (i)&nbsp;amendments
to the Certificate of Incorporation, (ii)&nbsp;most mergers and
consolidations of CNAF and (iii)&nbsp;sale of all or
substantially all of CNAF&#146;s assets.
</FONT>

<P align="left">
<B><FONT size="2">Liquidation Rights</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event of any liquidation, dissolution or
winding-up of CNAF, whether voluntary or involuntary, the
holders of Common Stock are entitled to share equally in the
assets available for distribution after payment of all
liabilities and provision for the liquidation preference of any
shares of Preferred Stock then outstanding.
</FONT>

<P align="left">
<B><FONT size="2">Miscellaneous</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The holders of Common Stock have no preemptive
rights, cumulative voting rights, subscription rights, or
conversion rights and the Common Stock is not subject to
redemption.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The transfer agent and registrar with respect to
the Common Stock is First Chicago Trust Company of New York. The
Common Stock is listed on the New York Stock Exchange, the
Chicago Stock Exchange and the Pacific Exchange, and also is
traded on the Philadelphia Stock Exchange. The trading symbol
for the Common Stock is &#147;CNA&#148;.
</FONT>

<P align="center">
<B><FONT size="2">DESCRIPTION OF PREFERRED STOCK</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">CNAF is authorized to issue up to 12,500,000
shares of Preferred Stock, without par value, in one or more
series. All shares of Preferred Stock, irrespective of series,
constitute one and the same class. The following description of
the terms of the Preferred Stock sets forth certain general
terms and provisions of the Preferred Stock. Certain terms of
any series of Preferred Stock offered by the prospectus
supplement will be described in the prospectus supplement
relating to such series of Preferred Stock. If so indicated in
the prospectus supplement, the terms of any such series may
differ from the terms set forth below.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following summary description of the terms of
the Preferred Stock sets forth certain general terms and
provisions of the Preferred Stock. This description is qualified
in its entirety by reference to CNAF&#146;s Certificate of
Incorporation and By-Laws, copies of which are filed as exhibits
to CNAF&#146;s registration statement on Form&nbsp;S-8 (File
No.&nbsp;333-65493) and to the Registration Statement.
</FONT>

<P align="left">
<B><FONT size="2">General</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Board of Directors is authorized to establish
and designate series and to fix the number of shares and the
relative rights, preferences and limitations of the respective
series of Preferred Stock, including:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the designation and number of shares comprising
    such series, which may be increased or decreased from time to
    time by the Board of Directors;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the dividend rate or rates on the shares of such
    series and the relation which such dividends bear to the
    dividends payable on any other class or classes or of any other
    series of capital stock, the terms and conditions upon which and
    the periods in respect of
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">29
</FONT>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    <FONT size="2">which dividends shall be payable, whether and
    upon what conditions such dividends shall be cumulative and, if
    cumulative, the dates from which dividends shall accumulate;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">whether the shares of such series shall be
    redeemable, the limitations and restrictions with respect to
    such redemption, the time or times when, the price or prices at
    which and the manner in which such shares shall be redeemable,
    including the manner of selecting shares of such series for
    redemption if less than all shares are to be redeemed;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the rights to which the holders of shares of such
    series shall be entitled, and the preferences, if any, over any
    other series (or of any other series over such series), upon the
    voluntary or involuntary liquidation, dissolution, distribution
    of assets or winding-up of CNAF, which rights may vary depending
    on whether such liquidation, dissolution, distribution or
    winding-up is voluntary or involuntary, and, if voluntary, may
    vary at different dates;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">whether the shares of such series shall be
    subject to the operation of a purchase, retirement or sinking
    fund, and, if so, whether and upon what conditions such
    purchase, retirement or sinking fund shall be cumulative or
    noncumulative, the extent to which and the manner in which such
    fund shall be applied to the purchase or redemption of the
    shares of such series for retirement or to other corporate
    purposes and the terms and provisions relative to the operation
    thereof;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">whether the shares of such series shall be
    convertible into or exchangeable for shares of any other class
    or classes or of any other series of any class or classes of
    capital stock of CNAF, and, if so convertible or exchangeable,
    the price or prices or the rate or rates of conversion or
    exchange and the method, if any, of adjusting the same, and any
    other terms and conditions of such conversion or exchange;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the voting powers, full and/or limited, if any,
    of the shares of such series; and whether and under what
    conditions the shares of such series (alone or together with the
    shares of one or more other series having similar provisions)
    shall be entitled to vote separately as a single class, for the
    election of one or more matters;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">whether the issuance of any additional shares of
    such series, or of any shares of any other series, shall be
    subject to restrictions as to issuance, or as to the powers,
    preferences or rights of any such other series; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">any other preferences, privileges and powers, and
    relative, participating, optional or other special rights, and
    qualifications, limitations or restrictions of such series, as
    the Board of Directors may deem advisable.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Unless otherwise specifically described in the
applicable prospectus supplement for a series of Preferred
Stock, all shares of Preferred Stock shall be of equal rank,
preference and priority as to dividends; when the stated
dividends are not paid in full, the shares of all series of the
Preferred Stock shall share ratably in any payment thereof; and
upon liquidation, dissolution or winding up, if assets are
insufficient to pay in full all Preferred Stock, then such
assets shall be distributed among the holders ratably.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The description of certain provisions of the
Preferred Stock described below is only a summary and is subject
to and qualified in its entirety by reference to the Certificate
of Incorporation and the Certificate of Designations that
relates to a particular series of Preferred Stock.
</FONT>

<P align="left">
<B><FONT size="2">Dividend Rights</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Except as may be set forth in an applicable
prospectus supplement relating to a series of Preferred Stock,
the holders of Preferred Stock shall be entitled to receive, but
only when and as declared by the Board of Directors out of funds
legally available for that purpose, cash dividends
</FONT>

<P align="center"><FONT size="2">30
</FONT>

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<DIV align="left">
<FONT size="2">at the rates and on the dates set forth in the
applicable prospectus supplement relating to a particular series
of Preferred Stock. Such rate may be fixed or variable. Each
such dividend will be payable to the holders of record as they
appear on the stock register of CNAF on such record dates as
will be fixed by the Board of Directors of CNAF or a duly
authorized committee thereof. Dividends payable on the Preferred
Stock for any period less than a full dividend period (being the
period between such dividend payment dates) will be computed on
the basis of the actual number of days elapsed over a 360 day
year. For a full dividend period, the amount of dividends
payable will be computed on the basis of a 360 day year
consisting of twelve 30 day months. Except as may be set forth
in the prospectus supplement relating to a series of Preferred
Stock, such dividends shall be payable from, and shall be
cumulative from, the date of original issue of each share, so
that if in any dividend period, dividends at the rate or rates
as described in the applicable prospectus supplement relating to
such series of Preferred Stock shall not have been declared and
paid or set apart for payment on all outstanding shares of
Preferred Stock for such dividend period and all preceding
dividend periods from and after the first day from which
dividends are cumulative, then the aggregate deficiency shall be
declared and fully paid or set apart for payment, but without
interest, before any dividends shall be declared or paid or set
apart for payment on the Common Stock by CNAF. After payment in
full of all dividend arrearages on the Preferred Stock,
dividends on the Common Stock may be declared and paid out of
funds legally available for that purpose as the Board of
Directors may determine.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Redemption</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The prospectus supplement will describe whether
and under what circumstances (i)&nbsp;any shares of Preferred
Stock may be redeemed by CNAF and (ii)&nbsp;the holders of
Preferred Shares may require CNAF to redeem any or all of such
shares.
</FONT>

<P align="left">
<B><FONT size="2">Conversion or Exchange</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The holders of Preferred Stock will have such
rights, if any, to convert such shares into or to exchange such
shares for shares of any other class or classes, or of any other
series of any class, of the capital stock of CNAF and/or other
property or cash, as described in the applicable prospectus
supplement.
</FONT>

<P align="left">
<B><FONT size="2">Voting Rights</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The holders of Preferred Stock will have such
voting rights, if any, as described in the applicable prospectus
supplement relating to a series of Preferred Stock. Unless and
except to the extent required by the law or provided by the
Board of Directors, holders of Preferred Stock shall have no
voting power with respect to any matter. In no event shall the
Preferred Stock be entitled to more than one vote per share in
respect of each share of stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The holders of the outstanding shares of a series
of Preferred Stock shall be entitled to vote as a class upon a
proposed amendment, whether or not entitled to vote thereon by
the Certificate of Incorporation, if the amendment would
increase or decrease the aggregate number of authorized shares
of such series of Preferred Stock, increase or decrease the par
value of the shares of such series of Preferred Stock, or alter
or change the powers, preferences, or special rights of the
shares of such series of Preferred Stock so as to affect them
adversely. If any proposed amendment would alter or change the
powers, preferences, or special rights of one or more series of
Preferred Stock so as to affect them adversely, but shall not so
affect the entire series, then only the shares of the series so
affected by the amendment shall be considered a separate series
for purposes of this paragraph. The number of authorized shares
of any such series of Preferred Stock may be increased or
decreased (but not below the number of shares thereof then
outstanding) by the affirmative vote of the holders of a
majority of the stock of CNAF entitled to vote irrespective of
the previous two sentences, if so provided in the Certificate of
Incorporation, in any amendment thereto which created such
series of Preferred Stock, or in
</FONT>

<P align="center"><FONT size="2">31
</FONT>

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<DIV align="left">
<FONT size="2">any amendment thereto which was authorized by a
resolution or resolutions adopted by the affirmative vote of the
holders of a majority of such series of Preferred Stock. This
paragraph is subject to any amendments to Delaware law regarding
these matters.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The foregoing voting provisions will not apply
if, in connection with the matters specified, provision is made
for the redemption or retirement of all outstanding Preferred
Stock.
</FONT>

<P align="left">
<B><FONT size="2">Liquidation Rights</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon any liquidation, dissolution or winding up
of CNAF, whether voluntary or involuntary, holders of Preferred
Stock will have such preferences and priorities, if any, with
respect to distribution of the assets of CNAF or the proceeds
thereof as may be set forth in the applicable prospectus
supplement relating to a series of Preferred Stock.
</FONT>

<P align="left">
<B><FONT size="2">Miscellaneous</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The transfer agent, dividend disbursing agent and
registrar for the Preferred Stock issued in connection with this
prospectus will be as described in the applicable prospectus
supplement. The holders of Preferred Stock, including any
Preferred Stock issued in connection with this prospectus, will
not have any preemptive rights to purchase or subscribe for any
shares of any class or other securities of any type of CNAF.
When issued, the Preferred Stock will be fully paid and
nonassessable. The Certificate of Designations setting forth the
provisions of each series of Preferred Stock will become
effective after the date of this prospectus, but on or before
issuance of the related series of Preferred Stock.
</FONT>

<P align="center">
<B><FONT size="2">DESCRIPTION OF DEPOSITARY SHARES</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The description set forth below and in any
prospectus supplement of certain provisions of the Deposit
Agreement (as defined below) and of the Depositary Shares and
Depositary Receipts summarizes the material terms of the Deposit
Agreement and of the Depositary Shares and Depositary Receipts,
and is qualified in its entirety by reference to, the form of
Deposit Agreement and form of Depositary Receipts relating to
each series of the Preferred Stock.
</FONT>

<P align="left">
<B><FONT size="2">General</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">CNAF may, at its option, elect to have shares of
Preferred Stock be represented by Depositary Shares. The shares
of any series of the Preferred Stock underlying the Depositary
Shares will be deposited under a separate deposit agreement (the
&#147;Deposit Agreement&#148;) between CNAF and a bank or trust
company selected by CNAF (the &#147;Preferred Stock
Depositary&#148;). The prospectus supplement relating to a
series of Depositary Shares will set forth the name and address
of the Preferred Stock Depositary. Subject to the terms of the
Deposit Agreement, each owner of a Depositary Share will be
entitled, proportionately, to all the rights, preferences and
privileges of the Preferred Stock represented thereby (including
dividend, voting, redemption, conversion, exchange and
liquidation rights).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Depositary Shares will be evidenced by
Depositary Receipts issued pursuant to the Deposit Agreement,
each of which will represent the applicable interest in a number
of shares of a particular series of the Preferred Stock
described in the applicable prospectus supplement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A holder of Depositary Shares will be entitled to
receive the shares of Preferred Stock (but only in whole shares
of Preferred Stock) underlying such Depositary Shares. If the
Depositary Receipts delivered by the holder evidence a number of
Depositary Shares in excess of the whole number of shares of
Preferred Stock to be withdrawn, the Depositary will deliver to
such holder at the same time a new Depositary Receipt evidencing
such excess number of Depositary Shares.
</FONT>

<P align="center"><FONT size="2">32
</FONT>

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<P align="left">
<B><FONT size="2">Dividends and Other Distributions</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Preferred Stock Depositary will distribute
all cash dividends or other cash distributions in respect to the
Preferred Stock to the record holders of Depositary Receipts in
proportion, insofar as possible, to the number of Depositary
Shares owned by such holders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event of a distribution other than in cash
in respect to the Preferred Stock, the Preferred Stock
Depositary will distribute property received by it to the record
holders of Depositary Receipts in proportion, insofar as
possible, to the number of Depositary Shares owned by such
holders, unless the Preferred Stock Depositary determines that
it is not feasible to make such distribution, in which case the
Preferred Stock Depositary may, with the approval of CNAF, adopt
such method as it deems equitable and practicable for the
purpose of effecting such distribution, including sale (at
public or private sale) of such property and distribution of the
net proceeds from such sale to such holders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The amount so distributed in any of the foregoing
cases will be reduced by any amount required to be withheld by
CNAF or the Preferred Stock Depositary on account of taxes.
</FONT>

<P align="left">
<B><FONT size="2">Conversion and Exchange</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If any Preferred Stock underlying the Depositary
Shares is subject to provisions relating to its conversion or
exchange as set forth in the prospectus supplement relating
thereto, each record holder of Depositary Shares will have the
right or obligation to convert or exchange such Depositary
Shares pursuant to the terms thereof.
</FONT>

<P align="left">
<B><FONT size="2">Redemption of Depositary Shares</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If Preferred Stock underlying the Depositary
Shares is subject to redemption, the Depositary Shares will be
redeemed from the proceeds received by the Preferred Stock
Depositary resulting from the redemption, in whole or in part,
of the Preferred Stock held by the Preferred Stock Depositary.
The redemption price per Depositary Share will be equal to the
aggregate redemption price payable with respect to the number of
shares of Preferred Stock underlying the Depositary Shares.
Whenever CNAF redeems Preferred Stock from the Preferred Stock
Depositary, the Preferred Stock Depositary will redeem as of the
same redemption date a proportionate number of Depositary Shares
representing the shares of Preferred Stock that were redeemed.
If less than all the Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed will be selected by lot or pro
rata as may be determined by CNAF.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">After the date fixed for redemption, the
Depositary Shares so called for redemption will no longer be
deemed to be outstanding and all rights of the holders of the
Depositary Shares will cease, except the right to receive the
redemption price upon such redemption. Any funds deposited by
CNAF with the Preferred Stock Depositary for any Depositary
Shares which the holders thereof fail to redeem shall be
returned to CNAF after a period of two years from the date such
funds are so deposited.
</FONT>

<P align="left">
<B><FONT size="2">Voting</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon receipt of notice of any meeting at which
the holders of any shares of Preferred Stock underlying the
Depositary Shares are entitled to vote, the Preferred Stock
Depositary will mail the information contained in such notice to
the record holders of the Depositary Receipts. Each record
holder of such Depositary Receipts on the record date (which
will be the same date as the record date for the Preferred
Stock) will be entitled to instruct the Preferred Stock
Depositary as to the exercise of the voting rights pertaining to
the number of shares of Preferred Stock underlying such
holder&#146;s Depositary Shares. The Preferred Stock Depositary
will endeavor, insofar as practicable, to vote the number of
shares of Preferred Stock underlying such Depositary Shares in
accordance with such instructions, and CNAF will agree to take
all
</FONT>

<P align="center"><FONT size="2">33
</FONT>

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<DIV align="left">
<FONT size="2">reasonable action which may be deemed necessary
by the Preferred Stock Depositary to enable the Preferred Stock
Depositary to do so. The Preferred Stock Depositary will abstain
from voting the Preferred Stock to the extent it does not
receive specific written instructions from holders of Depositary
Receipts representing such Preferred Stock.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Record Date</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Whenever (i)&nbsp;any cash dividend or other cash
distribution shall become payable, any distribution other than
cash shall be made, or any rights, preferences or privileges
shall be offered with respect to the Preferred Stock, or
(ii)&nbsp;the Preferred Stock Depositary shall receive notice of
any meeting at which holders of Preferred Stock are entitled to
vote or of which holders of Preferred Stock are entitled to
notice, or of the mandatory conversion of or any election on the
part of CNAF to call for the redemption of any Preferred Stock,
the Preferred Stock Depositary shall, in each such instance, fix
a record date (which shall be the same as the record date for
the Preferred Stock) for the determination of the holders of
Depositary Receipts (y)&nbsp;who shall be entitled to receive
such dividend, distribution, rights, preferences or privileges
or the net proceeds of the sale thereof or (z)&nbsp;who shall be
entitled to give instructions for the exercise of voting rights
at any such meeting or to receive notice of such meeting or of
such redemption or conversion, subject to the provisions of the
Deposit Agreement.
</FONT>

<P align="left">
<B><FONT size="2">Amendment and Termination of the Deposit
Agreement</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The form of Depositary Receipt and any provision
of the Deposit Agreement may at any time be amended by agreement
between CNAF and the Preferred Stock Depositary. However, any
amendment which imposes or increases any fees, taxes or other
charges payable by the holders of Depositary Receipts (other
than taxes and other governmental charges, fees and other
expenses payable by such holders as stated under &#147;Charges
of Preferred Stock Depositary&#148;), or which otherwise
prejudices any substantial existing right of holders of
Depositary Receipts, will not take effect as to outstanding
Depositary Receipts until the expiration of 90&nbsp;days after
notice of such amendment has been mailed to the record holders
of outstanding Depositary Receipts.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Whenever so directed by CNAF, the Preferred Stock
Depositary will terminate the Deposit Agreement by mailing
notice of such termination to the record holders of all
Depositary Receipts then outstanding at least 30&nbsp;days prior
to the date fixed in such notice for such termination. The
Preferred Stock Depositary may likewise terminate the Deposit
Agreement if at any time 45&nbsp;days shall have expired after
the Preferred Stock Depositary shall have delivered to CNAF a
written notice of its election to resign and a successor
depositary shall not have been appointed and accepted its
appointment. If any Depositary Receipts remain outstanding after
the date of termination, the Preferred Stock Depositary
thereafter will discontinue the transfer of Depositary Receipts,
will suspend the distribution of dividends to the holders
thereof, and will not give any further notices (other than
notice of such termination) or perform any further acts under
the Deposit Agreement except as provided below and except that
the Preferred Stock Depositary will continue (i)&nbsp;to collect
dividends on the Preferred Stock and any other distributions
with respect thereto and (ii)&nbsp;to deliver the Preferred
Stock together with such dividends and distributions and the net
proceeds of any sales of rights, preferences, privileges or
other property, without liability for interest thereon, in
exchange for Depositary Receipts surrendered. At any time after
the expiration of two years from the date of termination, the
Preferred Stock Depositary may sell the Preferred Stock then
held by it at public or private sales, at such place or places
and upon such terms as it deems proper and may thereafter hold
the net proceeds of any such sale, together with any money and
other property then held by it, without liability for interest
thereon, for the pro rata benefit of the holders of Depositary
Receipts which have not been surrendered.
</FONT>

<P align="center"><FONT size="2">34
</FONT>

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<P align="left">
<B><FONT size="2">Charges of Preferred Stock
Depositary</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">CNAF will pay all charges of the Preferred Stock
Depositary including charges in connection with the initial
deposit of the Preferred Stock, the initial issuance of the
Depositary Receipts, the distribution of information to the
holders of Depositary Receipts with respect to matters on which
Preferred Stock is entitled to vote, withdrawals of the
Preferred Stock by the holders of Depositary Receipts or
redemption or conversion of the Preferred Stock, except for
taxes (including transfer taxes, if any) and other governmental
charges and such other charges as are expressly provided in the
Deposit Agreement to be at the expense of holders of Depositary
Receipts or persons depositing Preferred Stock.
</FONT>

<P align="left">
<B><FONT size="2">Miscellaneous</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Preferred Stock Depositary will make
available for inspection by holders of Depositary Receipts at
its corporate office and its New York office all reports and
communications from CNAF which are delivered to the Preferred
Stock Depositary as the holder of Preferred Stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Neither the Preferred Stock Depositary nor CNAF
will be liable if it is prevented or delayed by law or any
circumstance beyond its control in performing its obligations
under the Deposit Agreement. The obligations of the Preferred
Stock Depositary under the Deposit Agreement are limited to
performing its duties thereunder without negligence or bad
faith. The obligations of CNAF under the Deposit Agreement are
limited to performing its duties thereunder in good faith.
Neither CNAF nor the Preferred Stock Depositary is obligated to
prosecute or defend any legal proceeding in respect of any
Depositary Shares or Preferred Stock unless satisfactory
indemnity is furnished. CNAF and the Preferred Stock Depositary
are entitled to rely upon advice of or information from counsel,
accountants or other persons believed to be competent and on
documents believed to be genuine.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Preferred Stock Depositary may resign at any
time or be removed by CNAF, effective upon the acceptance by its
successor of its appointment; provided, that if a successor
Preferred Stock Depositary has not been appointed or accepted
such appointment within 45&nbsp;days after the Preferred Stock
Depositary has delivered a notice of election to resign to CNAF,
the Preferred Stock Depositary may terminate the Deposit
Agreement. See &#147;Amendment and Termination of Deposit
Agreement&#148; above.
</FONT>

<P align="center">
<B><FONT size="2">DESCRIPTION OF WARRANTS</FONT></B>

<P align="left">
<B><FONT size="2">General</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">CNAF may issue Warrants to purchase Debt
Securities, Junior Debt Securities, Preferred Stock (or
Depositary Shares representing Preferred Stock) or Common Stock
(collectively, the &#147;Underlying Warrant Securities&#148;),
and such Warrants may be issued independently or together with
any such Underlying Warrant Securities and may be attached to or
separate from such Underlying Warrant Securities. Each series of
Warrants will be issued under a separate warrant agreement (each
a &#147;Warrant Agreement&#148;) to be entered into between CNAF
and a warrant agent (&#147;Warrant Agent&#148;). The Warrant
Agent will act solely as an agent of CNAF in connection with the
Warrants of such series and will not assume any obligation or
relationship of agency for or with holders or beneficial owners
of Warrants. The following describes certain general terms and
provisions of the offered Warrants hereby. Further terms of the
Warrants and the applicable Warrant Agreement will be described
in the applicable prospectus supplement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The applicable prospectus supplement will
describe the specific terms of any Warrants for which this
Prospectus is being delivered, including the following:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the title of such Warrants;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the aggregate number of such Warrants;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">35
</FONT>

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the issue price or prices of the Warrants;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the currency or currencies, including composite
    currencies, in which the price of such Warrants may be payable;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the designation and terms of the Underlying
    Warrant Securities purchasable upon exercise of such Warrants;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the price at which and the currency or
    currencies, including composite currencies, in which the
    Underlying Warrant Securities purchasable upon exercise of such
    Warrants may be purchased;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the exercise date and expiration date for such
    Warrants;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">whether such Warrants will be issued in
    registered form or bearer form;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">if applicable, the minimum or maximum amount of
    such Warrants which may be exercised at any one time;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">if applicable, the designation and terms of the
    Underlying Warrant Securities with which such Warrants are
    issued and the number of such Warrants issued with each such
    Underlying Warrant Security;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">if applicable, the date on and after which such
    Warrants and the related Underlying Warrant Securities will be
    traded separately;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">information with respect to book-entry
    procedures, if any;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">if applicable, a discussion of certain United
    States federal income tax considerations; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">any other terms of such Warrants, including
    terms, procedures and limitations relating to the exchange and
    exercise of such Warrants.
    </FONT></TD>
</TR>

</TABLE>

<P align="center">
<B><FONT size="2">DESCRIPTION OF PREFERRED SECURITIES</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the terms of the Trust Agreement for
each CNA Capital Trust, the Issuer Trustee on behalf of such CNA
Capital Trust will issue the Preferred Securities and the Common
Securities (collectively, &#147;Trust Securities&#148;). The
Preferred Securities of a particular issue will represent
preferred beneficial interests in the CNA Capital Trust and the
holders thereof will be entitled to a preference over the Common
Securities of such CNA Capital Trust in certain circumstances
with respect to distributions and amounts payable on redemption
or liquidation over the Common Securities of such CNA Capital
Trust, as well as other benefits as described in the
corresponding Trust Agreement. Because the description below is
only a summary, it does not contain the detailed information
contained in each Trust Agreement, including certain of the
definitions used in this prospectus or in the Trust Indenture
Act. The form of the Trust Agreement has been filed as an
exhibit to the Registration Statement of which this Prospectus
forms a part. Each of the CNA Capital Trusts is a legally
separate entity and the assets of one are not available to
satisfy the obligations of any of the others.
</FONT>

<P align="left">
<B><FONT size="2">General</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Preferred Securities of a CNA Capital Trust
will rank equal with, and payments will be made thereon in
proportion with, the Common Securities of that CNA Capital Trust
except as described under &#147;&#151;Subordination of Common
Securities.&#148; Legal title to the Corresponding Junior Debt
Securities will be held by the Property Trustee in trust for the
benefit of the holders of the related Preferred Securities and
Common Securities. Each Guarantee Agreement executed by CNAF for
the benefit of the holders of a CNA Capital Trust&#146;s
Preferred Securities (the &#147;Guarantee&#148; for such
Preferred Securities) will be a guarantee on a subordinated
basis with respect to the related Preferred Securities but will
not guarantee payment of Distributions or
</FONT>

<P align="center"><FONT size="2">36
</FONT>

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<DIV align="left">
<FONT size="2">amounts payable on redemption or liquidation of
such Preferred Securities when the related CNA Capital Trust
does not have funds on hand available to make such payments. See
&#147;Description of Guarantees.&#148;
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The revenue of a CNA Capital Trust available for
distribution to holders of Preferred Securities will be limited
to payments under the corresponding Junior Debt Securities which
such CNA Capital Trust purchased with the proceeds from the sale
of its Common Securities and Preferred Securities. If CNAF fails
to make a required payment in respect of such Junior Debt
Securities, the applicable CNA Capital Trust will not have
sufficient funds to make the related payments, including
distributions in respect of its Preferred Securities.
</FONT>

<P align="left">
<B><FONT size="2">Distributions</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Distributions on the Preferred Securities will be
cumulative, will accumulate from the date of original issuance
and will be payable on such dates as specified in the applicable
prospectus supplement. In the event that any date on which
Distributions are payable on the Preferred Securities is not a
Business Day (as defined below), unless otherwise specified in
the applicable prospectus supplement, payment of the
Distribution payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest
or other payment in respect to any such delay) except that, if
such Business Day is in the next succeeding calendar year,
payment of such Distribution shall be made on the immediately
preceding Business Day, in each case with the same force and
effect as if made on such date (each date on which Distributions
are payable in accordance with the foregoing, a
&#147;Distribution Date&#148;). A &#147;Business Day&#148; shall
mean any day other than a Saturday or a Sunday, or a day on
which banking institutions in The City of New York are
authorized or required by law or executive order to remain
closed.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each CNA Capital Trust&#146;s Preferred
Securities represent preferred beneficial interests in the
applicable CNA Capital Trust, and the Distributions on each
Preferred Security will be payable at a rate specified in the
prospectus supplement for such Preferred Securities. The amount
of Distributions payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months unless otherwise
specified in the applicable prospectus supplement. Distributions
to which holders of Preferred Securities are entitled will
accumulate additional Distributions at the rate per annum if and
as specified in the applicable prospectus supplement. The term
&#147;Distributions&#148; as used herein includes any such
additional Distributions unless otherwise stated.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If provided in the applicable prospectus
supplement, CNAF has the right under the Indenture, pursuant to
which it will issue the Corresponding Junior Debt Securities, to
defer the payment of interest at any time or from time to time
on any series of the Corresponding Junior Debt Securities for a
period which will be specified in such prospectus supplement
relating to such series (each, an &#147;Extension Period&#148;),
provided that no Extension Period may extend beyond the stated
maturity of the Corresponding Junior Debt Securities. Because of
any such extension, Distributions on the corresponding Preferred
Securities would be deferred (but would continue to accumulate
additional Distributions thereon at the rate per annum described
in the prospectus supplement for such Preferred Securities) by
the CNA Capital Trust which issued such Preferred Securities
during any such Extension Period. During such Extension Period
CNAF may not, and may not permit any subsidiary of CNAF to,
(i)&nbsp;declare or pay any dividends or distributions on, or
redeem, purchase, acquire or make a liquidation payment with
respect to, any of CNAF&#146;s capital stock or (ii)&nbsp;make
any payment of principal, interest or premium, if any, on or
repay, repurchase or redeem any debt securities of CNAF that
rank pari passu with or junior in interest to the Corresponding
Junior Debt Securities or (iii)&nbsp;make any guarantee payments
with respect to any guarantee by CNAF of debt securities of any
subsidiary of CNAF if such guarantee ranks pari passu with or
junior in interest to the Corresponding Junior Debt Securities
(other than (a)&nbsp;dividends or distributions in common stock
of CNAF, (b)&nbsp;payments under any Guarantee
</FONT>

<P align="center"><FONT size="2">37
</FONT>

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<DIV align="left">
<FONT size="2">and (c)&nbsp;purchases of common stock related to
the issuance of common stock under any of CNAF&#146;s benefit
plans for its directors, officers or employees).
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The revenue of each CNA Capital Trust available
for distribution to holders of its Preferred Securities will be
limited to payments under the Corresponding Junior Debt
Securities in which the CNA Capital Trust will invest the
proceeds from the issuance and sale of its Trust Securities. See
&#147;Description of Junior Debt Securities&#151; Corresponding
Junior Debt Securities.&#148; If CNAF does not make interest
payments on such Corresponding Junior Debt Securities, the
Property Trustee will not have funds available to pay
Distributions on the Related Preferred Securities. The payment
of Distributions (if and to the extent the CNA Capital Trust has
funds legally available for the payment of such Distributions
and cash sufficient to make such payments) is guaranteed by CNAF
to the extent set forth herein under &#147;Description of
Guarantees.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Distributions on the Preferred Securities will be
payable to the holders thereof as they appear on the register of
such CNA Capital Trust on the relevant record dates, which, as
long as the Preferred Securities remain in book-entry form, will
be one Business Day prior to the relevant distribution date. If
any Preferred Securities are not in book-entry form, the
relevant record date for such Preferred Securities shall be the
date at least 15&nbsp;days prior to the relevant Distribution
Date, as specified in the applicable prospectus supplement.
</FONT>

<P align="left">
<B><FONT size="2">Redemption or Exchange</FONT></B>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Mandatory
Redemption.</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon the repayment or redemption, in whole or in
part, of any Corresponding Junior Debt Securities, whether at
maturity or upon earlier redemption as provided in the Junior
Indenture, the proceeds from such repayment or redemption shall
be applied by the Property Trustee to redeem a Like Amount (as
defined below) of the Common Securities and Preferred Securities
of the CNA Capital Trust, upon not less than 30 nor more than
60&nbsp;days&#146; notice, at a redemption price (the
&#147;Redemption Price&#148;) equal to the aggregate liquidation
amount of such Common Securities and Preferred Securities plus
accumulated but unpaid Distributions thereon to the date of
redemption (the &#147;Redemption Date&#148;) and the related
amount of the premium, if any, paid by CNAF upon the concurrent
redemption of such Corresponding Junior Debt Securities. See
&#147;Description of Junior Debt
Securities&#151;Redemption.&#148; If less than all of any series
of Corresponding Junior Debt Securities are to be repaid or
redeemed on a Redemption Date, then unless there is a Junior
Debt Related Event of Default then continuing, the proceeds from
such repayment or redemption shall be allocated to the
redemption pro rata of the related Preferred Securities and the
Common Securities. The amount of premium, if any, paid by CNAF
upon the redemption of all or any part of any series of any
Corresponding Junior Debt Securities to be repaid or redeemed on
a Redemption Date shall be allocated to the redemption pro rata
of the related Preferred Securities and the Common Securities
unless there is a Junior Debt Related Event of Default then
continuing.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Special
Event Redemption or Distribution of Corresponding Junior Debt
Securities.</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a Special Event in respect of a series of
Preferred Securities and Common Securities shall occur and be
continuing, CNAF has the right to redeem the Corresponding
Junior Debt Securities in whole (but not in part) and thereby
cause a mandatory redemption of such Preferred Securities and
Common Securities in whole (but not in part) at the Redemption
Price within 90&nbsp;days following the occurrence of such
Special Event. At any time (so long as it would not be a taxable
event to the holders of Preferred Securities under federal law),
CNAF has the right to terminate the related CNA Capital Trust
and, after satisfaction of the liabilities of creditors of such
CNA Capital Trust as provided by applicable law, cause such
Corresponding Junior Debt Securities to be distributed to the
holders of such Preferred Securities and Common Securities in
liquidation of the CNA Capital Trust. If CNAF does not elect
either option described above, the
</FONT>

<P align="center"><FONT size="2">38
</FONT>

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<DIV align="left">
<FONT size="2">applicable series of Preferred Securities will
remain outstanding and, in the event a Tax Event has occurred
and is continuing, Additional Sums (as defined below) may be
payable on the Corresponding Junior Debt Securities.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Extension
of Maturity of Corresponding Junior Debt Securities.</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If provided in the applicable prospectus
supplement, CNAF shall have the right to extend or shorten the
maturity of any series of Corresponding Junior Debt Securities
at the time that CNAF exercises its right to elect to terminate
the related CNA Capital Trust and cause such Corresponding
Junior Debt Securities to be distributed to the holders of such
Preferred Securities and Common Securities in liquidation of the
CNA Capital Trust, provided that it can extend the maturity only
if certain conditions specified in the applicable prospectus
supplement are met at the time such election is made and at the
time of such extension.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Additional Sums&#148; means the additional
amounts as may be necessary so that the amount of Distributions
then due and payable by a CNA Capital Trust on the outstanding
Preferred Securities and Common Securities of the CNA Capital
Trust shall not be reduced as a result of any additional taxes,
duties and other governmental charges to which such CNA Capital
Trust has become subject as a result of a Tax Event.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Like Amount&#148; means (i)&nbsp;with
respect to a redemption of any series of Common Securities or
Preferred Securities, securities of such series having a
liquidation amount equal to that portion of the principal amount
of Corresponding Junior Debt Securities to be contemporaneously
redeemed in accordance with the Junior Indenture, allocated to
the Common Securities and to the Preferred Securities based upon
the relative Liquidation Amounts of such classes and the
proceeds of which will be used to pay the Redemption Price of
such Trust Securities, and (ii)&nbsp;with respect to a
distribution of Corresponding Junior Debt Securities to holders
of any series of Trust Securities in connection with a
dissolution or liquidation of the related CNA Capital Trust,
Corresponding Junior Debt Securities having a principal amount
equal to the liquidation amount of the Trust Securities of the
holder to whom such Corresponding Junior Debt Securities are
distributed.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">After the liquidation date fixed for any
distribution of Corresponding Junior Debt Securities for any
series of Preferred Securities (i)&nbsp;such series of Preferred
Securities will no longer be deemed to be outstanding,
(ii)&nbsp;The Depository Trust Company (&#147;DTC&#148;) or its
nominee, if the record holder of any series of Preferred
Securities, will receive a registered global certificate or
certificates representing the Corresponding Junior Debt
Securities to be delivered upon such distribution and
(iii)&nbsp;any certificates representing such series of
Preferred Securities not held by DTC or its nominee will be
deemed to represent the Corresponding Junior Debt Securities
having a principal amount equal to the liquidation amount of
such series of Preferred Securities, and bearing accrued and
unpaid interest in an amount equal to the accrued and unpaid
Distributions on such series of Preferred Securities until such
certificates are presented to the Administrative Trustees or
their agent for transfer or reissuance.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">There can be no assurance as to the market prices
for the Preferred Securities or the Corresponding Junior Debt
Securities that may be distributed in exchange for Preferred
Securities if a dissolution and liquidation of a CNA Capital
Trust were to occur. Accordingly, the Preferred Securities that
an investor may purchase, or the Corresponding Junior Debt
Securities that the investor may receive on dissolution and
liquidation of a CNA Capital Trust, may trade at a different
price from the purchase price for those Preferred Securities.
</FONT>

<P align="left">
<B><FONT size="2">Redemption Procedures</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Preferred Securities redeemed on each Redemption
Date shall be redeemed at the Redemption Price with the
applicable proceeds from the contemporaneous redemption of the
Corresponding Junior Debt Securities. Redemptions of the
Preferred Securities shall be made
</FONT>

<P align="center"><FONT size="2">39
</FONT>

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<DIV align="left">
<FONT size="2">and the Redemption Price shall be payable on each
Redemption Date only to the extent that the related CNA Capital
Trust has funds on hand available for the payment of such
Redemption Price. See also &#147;&#151;Subordination of Common
Securities.&#148;
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a CNA Capital Trust gives a notice of
redemption in respect of its Preferred Securities, then, by
12:00 noon, New York City time, on the Redemption Date, to the
extent funds are legally available, with respect to any
Preferred Securities held by DTC or its nominee, the Property
Trustee will deposit irrevocably with DTC funds sufficient to
pay the applicable Redemption Price and will give DTC
irrevocable instructions and authority to pay the Redemption
Price to the holders of such Preferred Securities. If such
Preferred Securities are not in book-entry form, the Property
Trustee, to the extent funds are legally available, will
irrevocably deposit with the paying agent for such Preferred
Securities funds sufficient to pay the applicable Redemption
Price and will give such paying agent irrevocable instructions
and authority to pay the Redemption Price to the holders thereof
upon surrender of their certificates evidencing such Preferred
Securities. Notwithstanding the foregoing, distributions payable
on or prior to the Redemption Date for any Preferred Securities
called for redemption shall be payable to the holders of such
Preferred Securities on the relevant record dates for the
related Distribution Dates. If notice of redemption shall have
been given and funds deposited as required, then upon the date
of such deposit, all rights of the holders of such Preferred
Securities so called for redemption will cease, except the right
of the holders of such Preferred Securities to receive the
Redemption Price, but without interest on such Redemption Price,
and such Preferred Securities will cease to be outstanding. In
the event that any date fixed for redemption of Preferred
Securities is not a Business Day, then payment of the Redemption
Price payable on such date will be made on the next succeeding
day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such
Business Day falls in the next calendar year, such payment will
be made on the immediately preceding Business Day. In the event
that payment of the Redemption Price in respect of Preferred
Securities called for redemption is improperly withheld or
refused and not paid either by the CNA Capital Trust or by CNAF
pursuant to the Guarantee as described under &#147;Description
of Guarantees&#148;, distributions on such Preferred Securities
will continue to accrue at the then applicable rate, from the
Redemption Date originally established by the CNA Capital Trust
for such Preferred Securities to the date such Redemption Price
is actually paid, in which case the actual payment date will be
the date fixed for redemption for purposes of calculating the
Redemption Price.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Subject to applicable law (including, without
limitation, United States federal securities law), CNAF or its
subsidiaries may at any time and from time to time purchase
outstanding Preferred Securities by tender, in the open market
or by private agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If less than all of the Preferred Securities and
Common Securities issued by a CNAF Capital Trust are to be
redeemed on a Redemption Date, then a Like Amount of such
Preferred Securities and Common Securities shall be redeemed.
The particular Preferred Securities to be redeemed shall be
selected on a pro rata basis not more than 60&nbsp;days prior to
the Redemption Date by the Property Trustee from the outstanding
Preferred Securities not previously called for redemption, by
such method as the Property Trustee shall deem fair and
appropriate and which may provide for the selection for
redemption of portions (equal to the minimum liquidation amount
or an integral multiple in excess thereof) of the liquidation
amount of Preferred Securities of a larger denomination. The
Property Trustee shall promptly notify the trust registrar in
writing of the Preferred Securities selected for redemption and,
in the case of any Preferred Securities selected for partial
redemption, the liquidation amount thereof to be redeemed. For
all purposes of each Trust Agreement, unless the context
otherwise requires, all provisions relating to the redemption of
Preferred Securities shall relate, in the case of any Preferred
Securities redeemed or to be redeemed only in part, to the
portion of the aggregate liquidation amount of Preferred
Securities which has been or is to be redeemed.
</FONT>

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</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Notice of any redemption will be mailed at least
30&nbsp;days but not more than 60&nbsp;days before the
Redemption Date to each Holder of Trust Securities to be
redeemed at its registered address.
</FONT>

<P align="left">
<B><FONT size="2">Subordination of Common Securities</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Payment of Distributions on, the Redemption Price
of, and the Liquidation Distribution (as defined below)
applicable to, each CNA Capital Trust&#146;s Preferred
Securities and Common Securities, as applicable, shall be made
proportionately based on the liquidation amount of such
Preferred Securities and Common Securities; provided, however,
that if on any Distribution Date, Redemption Date or liquidation
date a Junior Debt Related Event of Default shall have occurred
and be continuing, no payment of any Distribution on, Redemption
Price of, or Liquidation Distribution applicable to any of the
CNA Capital Trust&#146;s Common Securities, and no other payment
on account of the redemption, liquidation or other acquisition
of such Common Securities, shall be made unless payment in full
in cash of all accumulated and unpaid Distributions on all of
the CNA Capital Trust&#146;s outstanding Preferred Securities
for all Distribution periods terminating on or prior thereto, or
in the case of payment of the Redemption Price or Liquidation
Distribution the full amount of such payment in respect of all
of the CNA Capital Trust&#146;s outstanding Preferred
Securities, shall have been made or provided for, and all funds
available to the Property Trustee shall first be applied to the
payment in full in cash of all Distributions on, Redemption
Price of, or Liquidation Distribution applicable to the CNA
Capital Trust&#146;s Preferred Securities then due and payable.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the case of a Junior Debt Related Event of
Default, CNAF as holder of such CNA Capital Trust&#146;s Common
Securities will be deemed to have waived any right to act with
respect to any such Junior Debt Related Event of Default under
the applicable Trust Agreement until the effect of all such
Junior Debt Related Events of Default with respect to such
Preferred Securities have been cured, waived or otherwise
eliminated. Until any such events of default under the
applicable Trust Agreement with respect to the Preferred
Securities have been so cured, waived or otherwise eliminated,
the Property Trustee shall act solely on behalf of the holders
of such Preferred Securities and not on behalf of CNAF as holder
of the CNA Capital Trust&#146;s Common Securities, and only the
holders of such Preferred Securities will have the right to
direct the Property Trustee to act on their behalf.
</FONT>

<P align="left">
<B><FONT size="2">Liquidation Distribution Upon
Termination</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to each Trust Agreement, each CNA
Capital Trust shall automatically terminate upon expiration of
its term and shall terminate on the first to occur of:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">certain events of bankruptcy, dissolution or
    liquidation of CNAF (a &#147;Bankruptcy Event&#148;);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the distribution of a Like Amount of the
    Corresponding Junior Debt Securities to the holders of its Trust
    Securities, if CNAF, as Depositor, has given written direction
    to the Property Trustee to terminate such CNA Capital Trust
    (which direction is optional and wholly within the discretion of
    CNAF, as Depositor) and such distribution would not result in a
    federal taxable event to holders of the Preferred Securities (a
    &#147;Distribution Event&#148;);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the redemption of all of the CNA Capital
    Trust&#146;s Trust Securities following a Special Event;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">redemption of all of the CNA Capital Trust&#146;s
    Preferred Securities as described under &#147;Description of
    Preferred Securities&#151; Redemption or Exchange&#151;
    Mandatory Redemption&#148;; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the entry of an order for the dissolution of the
    CNA Capital Trust by a court of competent jurisdiction (a
    &#147;Dissolution Event&#148;).
    </FONT></TD>
</TR>

</TABLE>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If an early termination occurs from a Bankruptcy
Event, a Distribution Event or a Dissolution Event, the CNA
Capital Trust shall be liquidated by the Issuer Trustees as
expeditiously as the Issuer Trustees determine to be possible by
distributing, after satisfaction of liabilities to creditors of
such CNA Capital Trust as provided by applicable law, to the
holders of such Trust Securities a Like Amount of the
Corresponding Junior Debt Securities, unless such distribution
is determined by the Property Trustee not to be practical, in
which event such holders will be entitled to receive out of the
assets of the CNA Capital Trust available for distribution to
holders, after satisfaction of liabilities to creditors of such
CNA Capital Trust as provided by applicable law, an amount equal
to, in the case of holders of Preferred Securities, the
aggregate of the liquidation amount plus accrued and unpaid
Distributions thereon to the date of payment (such amount being
the &#147;Liquidation Distribution&#148;). If such Liquidation
Distribution can be paid only in part because such CNA Capital
Trust has insufficient assets available to pay in full the
aggregate Liquidation Distribution, then the amounts payable
directly by such CNA Capital Trust on its Preferred Securities
shall be paid on a pro rata basis. The holder(s) of such CNA
Capital Trust&#146;s Common Securities will be entitled to
receive distributions upon any such liquidation pro rata with
the holders of its Preferred Securities, except that if a Junior
Debt Related Event of Default has occurred and is continuing,
the Preferred Securities shall have a priority over the Common
Securities. A supplemental Indenture may provide that if an
early termination occurs as described in the fifth bullet point
above, the Corresponding Junior Debt Securities may be subject
to optional redemption in whole (but not in part).
</FONT>

<P align="left">
<B><FONT size="2">Events of Default; Notice</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A Junior Debt Related Event of Default under the
Junior Indenture (see &#147;Description of Junior Debt
Securities &#151; Junior Debt Related Events of Default&#148;)
will constitute an event of default with respect to the
Preferred Securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Within five Business Days after the occurrence of
any Junior Debt Related Event of Default actually known to the
Property Trustee, the Property Trustee shall transmit notice of
such Event of Default to the holders of such CNA Capital
Trust&#146;s Preferred Securities, the Administrative Trustees
and CNAF, as Depositor, unless such Event of Default shall have
been cured or waived. CNAF, as Depositor, and the Administrative
Trustees are required to file annually with the Property Trustee
a certificate as to whether or not they are in compliance with
all the conditions and covenants applicable to them under each
Trust Agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a Junior Debt Related Event of Default has
occurred and is continuing, the Preferred Securities shall have
a preference over the Common Securities as described above under
&#147;&#151;Subordination of Common Securities.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon certain Junior Debt Related Events of
Default, the holders of Preferred Securities may have the right
to bring a Direct Action. See &#147;Description of Junior Debt
Securities &#151; Enforcement of Certain Rights by Holders of
Preferred Securities.&#148;
</FONT>

<P align="left">
<B><FONT size="2">Removal of Issuer Trustees</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless a Junior Debt Related Event of Default
shall have occurred and be continuing, any Issuer Trustee may be
removed at any time by the holder of the Common Securities. If a
Junior Debt Related Event of Default has occurred and is
continuing, the Property Trustee and the Delaware Trustee may be
removed at such time by the holders of a majority in liquidation
amount of the outstanding Preferred Securities. In no event will
the holders of the Preferred Securities have the right to vote
to appoint, remove or replace the Administrative Trustees, which
voting rights are vested exclusively in CNAF as the holder of
the Common Securities. No resignation or removal of an Issuer
Trustee and no appointment of a successor trustee shall be
effective until the acceptance of appointment by the successor
trustee in accordance with the provisions of the applicable
Trust Agreement.
</FONT>

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</FONT>

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<P align="left">
<B><FONT size="2">Co-Trustees and Separate Property
Trustee</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless a Trust Related Event of Default shall
have occurred and be continuing, at any time or times, for the
purpose of meeting the legal requirements of the Trust Indenture
Act or of any jurisdiction in which any part of the Trust
Property may at the time be located, CNAF, as the holder of the
Common Securities, and the Administrative Trustees shall have
power to appoint one or more persons either to act as a
co-trustee, jointly with the Property Trustee, of all or any
part of such Trust Property, or to act as separate trustee of
any such property, in either case with such powers as may be
provided in the instrument of appointment, and to vest in such
person or persons in such capacity any property, title, right or
power deemed necessary or desirable, subject to the provisions
of the applicable Trust Agreement. In case a Junior Debt Related
Event of Default has occurred and is continuing, the Property
Trustee alone shall have power to make such appointment.
</FONT>

<P align="left">
<B><FONT size="2">Merger or Consolidation of Issuer
Trustees</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any corporation into which the Property Trustee,
the Delaware Trustee or any Administrative Trustee that is not a
natural person may be merged or converted or with which it may
be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which such Trustee shall be a
party, or any corporation succeeding to all or substantially all
the corporate trust business of such Trustee, shall be the
successor of such Trustee under each Trust Agreement, provided
such corporation shall be otherwise qualified and eligible.
</FONT>

<P align="left">
<B><FONT size="2">Mergers, Consolidations, Amalgamations or
Replacements of the CNA Capital Trusts</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A CNA Capital Trust may not merge with or into,
consolidate, amalgamate, or be replaced by, or convey, transfer
or lease its properties and assets as an entirety or
substantially as an entirety to any corporation or other Person,
except as described below. A CNA Capital Trust may, at the
request of CNAF, with the consent of the Administrative Trustees
and without the consent of the holders of the Preferred
Securities, merge with or into, consolidate, amalgamate, or be
replaced by or convey, transfer or lease its properties and
assets as an entirety or substantially as an entirety to a trust
organized as such under the laws of any state; provided, that:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">such successor entity either (a)&nbsp;expressly
    assumes all of the obligations of such CNA Capital Trust with
    respect to the Preferred Securities or (b)&nbsp;substitutes for
    the Preferred Securities other securities having substantially
    the same terms as the Preferred Securities (the &#147;Successor
    Securities&#148;) so long as the Successor Securities rank the
    same as the Preferred Securities rank in priority with respect
    to distributions and payments upon liquidation, redemption and
    otherwise;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">CNAF expressly appoints a trustee of such
    successor entity possessing the same powers and duties as the
    Property Trustee as the holder of the Corresponding Junior Debt
    Securities;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the Successor Securities are listed, or any
    Successor Securities will be listed upon notification of
    issuance, on any national securities exchange or other
    organization on which the Preferred Securities are then listed,
    if any;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">such merger, consolidation, amalgamation,
    replacement, conveyance, transfer or lease does not cause the
    Preferred Securities (including any Successor Securities) to be
    downgraded by any nationally recognized statistical rating
    organization;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">such merger, consolidation, amalgamation,
    replacement, conveyance, transfer or lease does not adversely
    affect the rights, preferences and privileges of the holders of
    the Preferred Securities (including any Successor Securities) in
    any material respect;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">43
</FONT>

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">such successor entity has a purpose identical to
    that of the CNA Capital Trust;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">prior to such merger, consolidation,
    amalgamation, replacement, conveyance, transfer or lease, CNAF
    has received an opinion from independent counsel to the CNA
    Capital Trust experienced in such matters to the effect that
    (a)&nbsp;such merger, consolidation, amalgamation, replacement,
    conveyance, transfer or lease does not adversely affect the
    rights, preferences and privileges of the holders of the
    Preferred Securities (including any Successor Securities) in any
    material respect, (b)&nbsp;following such merger, consolidation,
    amalgamation, replacement, conveyance, transfer or lease,
    neither the CNA Capital Trust nor such successor entity will be
    required to register as an investment company under the
    Investment Company Act and (c)&nbsp;following such merger,
    consolidation, amalgamation, replacement, conveyance, transfer
    or lease, the Trust (or any successor entity) will continue to
    be classified as a grantor trust for United States federal
    income tax purposes; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">CNAF or any permitted successor or assignee owns
    all of the Common Securities of such successor entity and
    guarantees the obligations of such successor entity under the
    Successor Securities at least to the extent provided by the
    Guarantee.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Notwithstanding the foregoing, a CNA Capital
Trust shall not, except with the consent of holders of 100% in
Liquidation Amount of the Preferred Securities, consolidate,
amalgamate, merge with or into, or be replaced by or convey,
transfer or lease its properties and assets as an entirety or
substantially as an entirety to any other entity or permit any
other entity to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger,
replacement, conveyance, transfer or lease would cause the CNA
Capital Trust or the successor entity to be classified as other
than a grantor trust for United States federal income tax
purposes.
</FONT>

<P align="left">
<B><FONT size="2">Voting Rights; Amendment of Each Trust
Agreement</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Except as provided below and under
&#147;Description of Guarantees&#151; Amendments and
Assignment&#148; and as otherwise required by law and the
applicable Trust Agreement, the holders of the Preferred
Securities will have no voting rights.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each Trust Agreement may be amended from time to
time by CNAF, the Property Trustee and the Administrative
Trustees, without the consent of the holders of the Preferred
Securities (i)&nbsp;to cure any ambiguity, correct or supplement
any provisions in such Trust Agreement that may be inconsistent
with any other provision, or to make any other provisions with
respect to matters or questions arising under such Trust
Agreement, which shall not be inconsistent with the other
provisions of such Trust Agreement, or (ii)&nbsp;to modify,
eliminate or add to any provisions of such Trust Agreement to
such extent as shall be necessary to ensure that the CNA Capital
Trust will be classified for United States federal income tax
purposes as a grantor trust at all times that any Trust
Securities are outstanding or to ensure that the CNA Capital
Trust will not be required to register as an &#147;investment
company&#148; under the Investment Company Act; provided,
however, that such action shall not adversely affect in any
material respect the interests of any holder of Trust
Securities, and any amendments of such Trust Agreement shall
become effective when notice thereof is given to the holders of
Trust Securities. Each Trust Agreement may be amended by the
Issuer Trustees and CNAF with (i)&nbsp;the consent of holders
representing a majority (based upon liquidation amounts) of the
outstanding Preferred Securities, and (ii)&nbsp;receipt by the
Issuer Trustees of an opinion of counsel to the effect that such
amendment or the exercise of any power granted to the Issuer
Trustees in accordance with such amendment will not affect the
CNA Capital Trust&#146;s status as a grantor trust for United
States federal income tax purposes or the CNA Capital
Trust&#146;s exemption from status as an &#147;investment
company&#148; under the Investment Company Act, provided that
without the consent of each holder of Trust Securities, such
Trust Agreement may not be amended to (i)&nbsp;change the
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">amount or timing of any Distribution on the Trust
Securities or otherwise adversely affect the amount of any
Distribution required to be made in respect of the Trust
Securities as of a specified date, (ii)&nbsp;change any
redemption, conversion or exchange provisions of the Trust
Securities, (iii)&nbsp;restrict the right of a holder of Trust
Securities to institute suit for the enforcement of any such
payment on or after such date, (iv)&nbsp;change the purpose of
the CNA Capital Trust, (v)&nbsp;authorize or issue any
beneficial interest in the CNA&nbsp;Capital Trust other than the
contemplated Trust Securities, (vi)&nbsp;change the conditions
precedent for CNAF to elect to dissolve the CNA Capital Trust
and distribute the Corresponding Junior Debt Securities or
(vii)&nbsp;affect the limited liability of any holder of
Preferred Securities.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">So long as any Corresponding Junior Debt
Securities are held by the Property Trustee, the Issuer Trustees
shall not (i)&nbsp;direct the time, method and place of
conducting any proceeding for any remedy available to the Junior
Indenture Trustee, or executing any trust or power conferred on
the Property Trustee with respect to such Corresponding Junior
Debt Securities, (ii)&nbsp;waive any past default that is
waivable under the Junior Indenture, (iii)&nbsp;exercise any
right to rescind or annul a declaration that the principal of
all the Junior Debt Securities shall be due and payable or
(iv)&nbsp;consent to any amendment, modification or termination
of the Junior Indenture or such Corresponding Junior Debt
Securities where such consent shall be required, without, in
each case, obtaining the prior approval of the holders of a
majority in aggregate liquidation amount of all outstanding
Preferred Securities; provided, however, that where a consent
under the Junior Indenture would require the consent of each
holder of Corresponding Junior Debt Securities affected thereby,
no such consent shall be given by the Property Trustee without
the prior consent of each holder of the Related Preferred
Securities. The Issuer Trustees shall not revoke any action
previously authorized or approved by a vote of the holders of
the Preferred Securities except by subsequent vote of the
holders of the Preferred Securities. The Property Trustee shall
notify each holder of Preferred Securities of any notice of
default with respect to the Corresponding Junior Debt
Securities. In addition to obtaining the foregoing approvals of
the holders of the Preferred Securities, prior to taking any of
the foregoing actions, the Issuer Trustees shall obtain an
opinion of counsel experienced in such matters to the effect
that the CNA Capital Trust will not be classified as an
association taxable as a corporation for United States federal
income tax purposes on account of such action.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any required approval of holders of Preferred
Securities may be given at a meeting of holders of Preferred
Securities convened for such purpose or pursuant to written
consent. The Property Trustee will cause a notice of any meeting
at which holders of Preferred Securities are entitled to vote,
or of any matter upon which action by written consent of such
holders is to be taken, to be given to each holder of record of
Preferred Securities in the manner set forth in each Trust
Agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">No vote or consent of the holders of Preferred
Securities will be required for a CNA Capital Trust to redeem
and cancel its Preferred Securities in accordance with the
applicable Trust Agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Notwithstanding that holders of Preferred
Securities are entitled to vote or consent under any of the
circumstances described above, any of the Preferred Securities
that are owned by CNAF, the Issuer Trustees or any affiliate of
CNAF or any Issuer Trustees shall, for purposes of such vote or
consent, be treated as if they were not outstanding.
</FONT>

<P align="left">
<B><FONT size="2">Global Preferred Securities</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Preferred Securities of a series may be
issued in whole or in part in the form of one or more Global
Preferred Securities that will be deposited with, or on behalf
of, the Depositary identified in the applicable prospectus
supplement. Unless otherwise indicated in the prospectus
supplement for such series, the Depositary will be DTC. Global
Preferred Securities may be issued only in fully registered form
and in either temporary or permanent form. Unless and until it
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">is exchanged in whole or in part for the
individual Preferred Securities represented thereby, a Global
Preferred Security may not be transferred except as a whole by
the Depositary for such Global Preferred Security to a nominee
of such Depositary or by a nominee of such Depositary to such
Depositary or another nominee of such Depositary or by the
Depositary or any nominee to a successor Depositary or any
nominee of such successor.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The specific terms of the depositary arrangement
with respect to a series of Preferred Securities will be
described in the applicable prospectus supplement. CNAF
anticipates that the following provisions will generally apply
to depositary arrangements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon the issuance of a Global Preferred Security,
and the deposit of such Global Preferred Security with or on
behalf of the Depositary, the Depositary for such Global
Preferred Security or its nominee will credit, on its book-entry
registration and transfer system, the respective aggregate
liquidation amounts of the individual Preferred Securities
represented by such Global Preferred Securities to the accounts
of Participants. Such accounts shall be designated by the
dealers, underwriters or agents with respect to such Preferred
Securities or by CNAF if such Preferred Securities are offered
and sold directly by CNAF. Ownership of beneficial interests in
a Global Preferred Security will be limited to Participants or
persons that may hold interests through Participants. Ownership
of beneficial interests in such Global Preferred Security will
be shown on, and the transfer of that ownership will be effected
only through, records maintained by the applicable Depositary or
its nominee (with respect to interests of Participants) and the
records of Participants (with respect to interests of persons
who hold through Participants). The laws of some states require
that certain purchasers of securities take physical delivery of
such securities in definitive form. Such limits and such laws
may impair the ability to transfer beneficial interests in a
Global Preferred Security.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">So long as the Depositary for a Global Preferred
Security, or its nominee, is the registered owner of such Global
Preferred Security, such Depositary or such nominee, as the case
may be, will be considered the sole owner or holder of the
Preferred Securities represented by such Global Preferred
Security for all purposes under the Indenture governing such
Preferred Securities. Except as provided below, owners of
beneficial interests in a Global Preferred Security will not be
entitled to have any of the individual Preferred Securities of
the series represented by such Global Preferred Security
registered in their names, will not receive or be entitled to
receive physical delivery of any such Preferred Securities of
such series in definitive form and will not be considered the
owners or holders thereof under the Indenture.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Payments of Distributions, Redemption Price and
Liquidation Distributions in respect of individual Preferred
Securities represented by a Global Preferred Security registered
in the name of a Depositary or its nominee will be made to the
Depositary or its nominee, as the case may be, as the registered
owner of the Global Preferred Security representing such
Preferred Securities. None of CNAF, the Property Trustee, any
Paying Agent, or the Securities Registrar for such Preferred
Securities will have any responsibility or liability for any
aspect of the records relating to or payments made on account of
beneficial ownership interests of the Global Preferred Security
representing such Preferred Securities or for maintaining,
supervising or reviewing any records relating to such beneficial
ownership interests.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">CNAF expects that the Depositary for a series of
Preferred Securities or its nominee, upon receipt of any payment
of Distributions, Redemption Price and Liquidation Distributions
in respect of a permanent Global Preferred Security representing
any of such Preferred Securities, immediately will credit
Participants&#146; accounts with payments in amounts
proportionate to their respective beneficial interest in the
aggregate Liquidation Amount of such Global Preferred Security
for such Preferred Securities as shown on the records of such
Depositary or its nominee. CNAF also expects that payments by
Participants to owners of beneficial interests in such Global
Preferred Security held through such Participants will be
governed by standing instructions and customary practices, as is
now the case with securities held for the accounts of
</FONT>

<P align="center"><FONT size="2">46
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<DIV align="left">
<FONT size="2">customers in bearer form or registered in
&#147;street name.&#148; Such payments will be the
responsibility of such Participants.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless otherwise specified in the applicable
prospectus supplement, if a Depositary for a series of Preferred
Securities is at any time unwilling, unable or ineligible to
continue as depositary and a successor depositary is not
appointed by CNAF within 90&nbsp;days, CNAF will issue
individual Preferred Securities of such series in exchange for
the Global Preferred Security representing such series of
Preferred Securities. In addition, CNAF may at any time and in
its sole discretion, subject to any limitations described in the
prospectus supplement relating to such Preferred Securities,
determine not to have any Preferred Securities of such series
represented by one or more Global Preferred Securities and, in
such event, will issue individual Preferred Securities of such
series in exchange for the Global Preferred Security or
Securities representing such series of Preferred Securities.
Further, if CNAF so specifies with respect to the Preferred
Securities of a series, an owner of a beneficial interest in a
Global Preferred Security representing Preferred Securities of
such series may, on terms acceptable to CNAF, the Property
Trustee and the Depositary for such Global Preferred Security,
receive individual Preferred Securities of such series in
exchange for such beneficial interests, subject to any
limitations described in the prospectus supplement relating to
such Preferred Securities. In any such instance, an owner of a
beneficial interest in a Global Preferred Security will be
entitled to physical delivery of individual Preferred Securities
of the series represented by such Global Preferred Security
equal in principal amount to such beneficial interest and to
have such Preferred Securities registered in its name.
</FONT>

<P align="left">
<B><FONT size="2">Payment and Paying Agency</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Payments in respect of the Preferred Securities
shall be made to the Depositary, which shall credit the relevant
accounts at the Depositary on the applicable Distribution Dates
or, if any CNA Capital Trust&#146;s Preferred Securities are not
held by the Depositary, such payments shall be made by check
mailed to the address of the holder entitled thereto as such
address shall appear on the Register. Unless otherwise specified
in the applicable prospectus supplement, the paying agent (the
&#147;Paying Agent&#148;) shall initially be the Property
Trustee and any co-paying agent chosen by the Property Trustee
and acceptable to the Administrative Trustees and CNAF. The
Paying Agent shall be permitted to resign as Paying Agent upon
30&nbsp;days&#146; written notice to the Property Trustee and
CNAF. In the event that the Property Trustee shall no longer be
the Paying Agent, the Administrative Trustees shall appoint a
successor (which shall be a bank or trust company acceptable to
the Administrative Trustees and CNAF) to act as Paying Agent.
</FONT>

<P align="left">
<B><FONT size="2">Registrar and Transfer Agent</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless otherwise specified in the applicable
prospectus supplement, the Property Trustee will act as
registrar and transfer agent for the Preferred Securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Registration of transfers of Preferred Securities
will be effected without charge by or on behalf of each CNA
Capital Trust, but upon payment of any tax or other governmental
charges that may be imposed in connection with any transfer or
exchange. The CNA Capital Trusts will not be required to
register or cause to be registered the transfer of their
Preferred Securities after such Preferred Securities have been
called for redemption.
</FONT>

<P align="left">
<B><FONT size="2">Information Concerning the Property
Trustee</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Property Trustee, other than during the
occurrence and continuance of a Trust Related Event of Default,
undertakes to perform only such duties as are specifically set
forth in each Trust Agreement and, after such Junior Debt
Related Event of Default, must exercise the same degree of care
and skill as a prudent person would exercise or use in the
conduct of his or her own affairs. Subject to this provision,
the Property Trustee is under no obligation to exercise any of
the powers vested in it by the applicable Trust Agreement at the
request of any holder of
</FONT>

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<DIV align="left">
<FONT size="2">Preferred Securities unless it is offered
reasonable indemnity against the costs, expenses and liabilities
that might be incurred thereby. If no Junior Debt Related Event
of Default has occurred and is continuing and the Property
Trustee is required to decide between alternative causes of
action, construe ambiguous provisions in the applicable Trust
Agreement or is unsure of the application of any provision of
the applicable Trust Agreement, and the matter is not one on
which holders of Preferred Securities are entitled under such
Trust Agreement to vote, then the Property Trustee shall take
such action as is directed by CNAF and if not so directed, shall
take such action as it deems advisable and in the best interests
of the holders of the CNA Capital Trust&#146;s Common Securities
and Preferred Securities and will have no liability except for
its own bad faith, negligence or willful misconduct.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Miscellaneous</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Administrative Trustees are authorized and
directed to conduct the affairs of and to operate the CNA
Capital Trusts in such a way that no CNA Capital Trust will be
deemed to be an &#147;investment company&#148; required to be
registered under the Investment Company Act or classified as an
association taxable as a corporation for United States federal
income tax purposes and so that the Corresponding Subordinated
Debt Securities will be treated as indebtedness of CNAF for
United States federal income tax purposes. In this connection,
CNAF and the Administrative Trustees are authorized to take any
action, not inconsistent with applicable law, the certificate of
trust of each CNA Capital Trust or each Trust Agreement, that
CNAF and the Administrative Trustees determine in their
discretion to be necessary or desirable for such purposes, as
long as such action does not materially adversely affect the
interests of the holders of the related Preferred Securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Holders of the Preferred Securities have no
preemptive or similar rights.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">No CNA Capital Trust may borrow money or issue
debt or mortgage or pledge any of its assets.
</FONT>

<P align="center">
<B><FONT size="2">DESCRIPTION OF GUARANTEES</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A Guarantee will be executed and delivered by
CNAF concurrently with the issuance by each CNA Capital Trust of
its Preferred Securities for the benefit of the holders from
time to time of such Preferred Securities. The First National
Bank of Chicago will act as indenture trustee (&#147;Guarantee
Trustee&#148;) under each Guarantee for the purposes of
compliance with the Trust Indenture Act and each Guarantee will
be qualified as an indenture under the Trust Indenture Act. The
form of the Guarantee has been included as an exhibit to the
Registration Statement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following description summarizes the material
terms of the Guarantees. This summary is qualified in its
entirety by reference to the detailed provisions of the
Guarantees, including the definitions of certain terms used in
the description of the Guarantees in this prospectus, and those
terms made a part of each of the Guarantees by the Trust
Indenture Act. Reference in this summary to Preferred Securities
means that CNA Capital Trust&#146;s Preferred Securities to
which a Guarantee relates. The Guarantee Trustee will hold each
Guarantee for the benefit of the holders of the related CNA
Capital Trust&#146;s Preferred Securities.
</FONT>

<P align="left">
<B><FONT size="2">General</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">CNAF will irrevocably agree to pay in full on a
subordinated basis, to the extent set forth herein, the
Guarantee Payments (as defined below) to the holders of the
Preferred Securities, as and when due, regardless of any
defense, right of set-off or counterclaim that such CNA Capital
Trust may have or assert other than the defense of payment. The
following payments with respect to the Preferred Securities, to
the extent not paid by or on behalf of the related CNA Capital
Trust (the &#147;Guarantee Payments&#148;), will be subject to
the Guarantee: (i)&nbsp;any accumulated and unpaid Distributions
required to be paid on such Preferred Securities, to the
</FONT>

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<DIV align="left">
<FONT size="2">extent that such CNA Capital Trust has funds on
hand available therefor at such time, (ii)&nbsp;the Redemption
Price with respect to any Preferred Securities called for
redemption, to the extent that such CNA Capital Trust has funds
on hand available therefor at such time, or (iii)&nbsp;upon a
voluntary or involuntary dissolution, winding up or liquidation
of such CNA Capital Trust (unless the Corresponding Junior Debt
Securities are distributed to holders of such Preferred
Securities), the lesser of (a)&nbsp;the Liquidation Distribution
and (b)&nbsp;the amount of assets of such CNA Capital Trust
remaining available for distribution to holders of Preferred
Securities after satisfaction of liabilities to creditors of
such CNA Capital Trust as required by applicable law (in either
case, the &#147;Liquidation Distribution&#148;). CNAF&#146;s
obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by CNAF to the holders of
the applicable Preferred Securities or by causing the CNA
Capital Trust to pay such amounts to such holders.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each Guarantee will be an irrevocable guarantee
on a subordinated basis of the related CNA Capital Trust&#146;s
obligations under the Preferred Securities, but will apply only
to the extent that such related CNA Capital Trust has funds
sufficient to make such payments, and is not a guarantee of
collection.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If CNAF does not make required payments on the
Corresponding Junior Debt Securities held by the CNA Capital
Trust, the CNA Capital Trust will not have funds legally
available and will not be able to pay the related amounts in
respect of the Preferred Securities. Each Guarantee will rank
subordinate and junior in right of payment to all Senior Debt of
CNAF. See &#147;&#151; Status of the Guarantees.&#148; Except as
otherwise provided in the applicable prospectus supplement, the
Guarantees do not limit the incurrence or issuance of other
secured or unsecured debt of CNAF, whether under the Indentures,
the Junior Indenture, any other indenture that CNAF may enter
into in the future or otherwise. See the prospectus supplement
relating to any offering of Preferred Securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">CNAF&#146;s obligations described herein and in
any accompanying prospectus supplement, through the applicable
Guarantee, the applicable Trust Agreement, the Junior Debt
Securities, the Junior Indenture and any supplemental indentures
thereto, and the Expense Agreement, taken together, constitute a
full, irrevocable and unconditional guarantee by CNAF of
payments due on the Preferred Securities. No single document
standing alone or operating in conjunction with fewer than all
of the other documents constitutes such guarantee. It is only
the combined operation of these documents that has the effect of
providing a full, irrevocable and unconditional guarantee of the
CNA Capital Trust&#146;s obligations under the Preferred
Securities. See &#147;The CNA Capital Trusts,&#148;
&#147;Description of Preferred Securities,&#148; and
&#147;Description of Subordinated Debt Securities.&#148;
</FONT>

<P align="left">
<B><FONT size="2">Status of the Guarantees</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each Guarantee will constitute an unsecured
obligation of CNAF and will rank subordinate and junior in right
of payment to all Senior Debt.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each Guarantee will rank equally with all other
Guarantees issued by CNAF. Each Guarantee will constitute a
guarantee of payment and not of collection (i.e., the guaranteed
party may institute a legal proceeding directly against the
Guarantor to enforce its rights under the Guarantee without
first instituting a legal proceeding against any other person or
entity). Each Guarantee will be held for the benefit of the
holders of the related Preferred Securities. Each Guarantee will
not be discharged except by payment of the Guarantee Payments in
full to the extent not paid by the CNA Capital Trust or upon
distribution to the holders of the Preferred Securities of the
Corresponding Subordinated Debt Securities. None of the
Guarantees places a limitation on the amount of additional
Senior Debt that may be incurred by CNAF. CNAF expects from time
to time to incur additional indebtedness constituting Senior
Debt.
</FONT>

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</FONT>

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<P align="left">
<B><FONT size="2">Amendments and Assignment</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Except with respect to any changes which do not
materially adversely affect the rights of holders of the
Preferred Securities (in which case no vote will be required),
no Guarantee may be amended without the prior approval of the
holders of not less than a majority of the aggregate liquidation
amount of such outstanding Preferred Securities. The manner of
obtaining any such approval will be as set forth under
&#147;Description of the Preferred Securities&#151; Voting
Rights; Amendment of Each Trust Agreement.&#148; All guarantees
and agreements contained in each Guarantee shall bind the
successors, assigns, receivers, trustees and representatives of
CNAF and shall inure to the benefit of the holders of the
related Preferred Securities then outstanding.
</FONT>

<P align="left">
<B><FONT size="2">Events of Default</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">An event of default under each Guarantee will
occur upon the failure of CNAF to perform any of its payment or
other obligations thereunder. The holders of not less than a
majority in aggregate liquidation amount of the Preferred
Securities have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of such Guarantee or to direct the
exercise of any trust or power conferred upon the Guarantee
Trustee under such Guarantee.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any holder of the Preferred Securities may
institute a legal proceeding directly against CNAF to enforce
its rights under such Guarantee without first instituting a
legal proceeding against the CNA Capital Trust, the Guarantee
Trustee or any other person or entity.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">CNAF, as guarantor, is required to file annually
with the Guarantee Trustee a certificate as to whether or not
CNAF is in compliance with all the conditions and covenants
applicable to it under the Guarantee.
</FONT>

<P align="left">
<B><FONT size="2">Information Concerning the Guarantee
Trustee</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Guarantee Trustee, other than during the
occurrence and continuance of a default by CNAF in performance
of any Guarantee, undertakes to perform only such duties as are
specifically set forth in each Guarantee and, after default with
respect to any Guarantee, must exercise the same degree of care
and skill as a prudent person would exercise or use in the
conduct of his or her own affairs. Subject to this provision,
the Guarantee Trustee is under no obligation to exercise any of
the powers vested in it by any Guarantee at the request of any
holder of any Preferred Securities unless it is offered
reasonable indemnity against the costs, expenses and liabilities
that might be incurred thereby.
</FONT>

<P align="left">
<B><FONT size="2">Termination of the Guarantees</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each Guarantee will terminate and be of no
further force and effect upon full payment of the Redemption
Price of the Preferred Securities, upon full payment of the
amounts payable upon liquidation of the related CNA Capital
Trust or upon distribution of Corresponding Junior Debt
Securities to the holders of the related Preferred Securities.
Each Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of the
related Preferred Securities must restore payment of any sums
paid under such Preferred Securities or such Guarantee.
</FONT>

<P align="left">
<B><FONT size="2">The Expense Agreement</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the Expense Agreement entered into by
CNAF under each Trust Agreement (the &#147;Expense
Agreement&#148;), CNAF will irrevocably and unconditionally
guarantee to each person or entity to whom the CNA Capital Trust
becomes indebted or liable, the full payment of any costs,
expenses or liabilities of the CNA Capital Trust, other than
obligations of the CNA Capital Trust to pay to the holders of
any Preferred Securities or other similar interests in the CNA
Capital
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">Trust of the amounts due such holders pursuant to
the terms of the Preferred Securities or such other similar
interests, as the case may be.
</FONT>
</DIV>

<P align="center">
<B><FONT size="2">DESCRIPTION OF PURCHASE CONTRACTS</FONT></B>

<DIV align="center">
<B><FONT size="2">AND PURCHASE UNITS</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">CNAF and/or the CNA Capital Trusts may issue
Purchase Contracts, representing contracts obligating holders to
purchase from CNAF and/or the applicable CNA Capital Trust, and
CNAF and/or the applicable CNA Capital Trust to sell to the
holders, a specified quantity of Debt Securities, Junior Debt
Securities Common Stock, Preferred Stock, Depositary Shares,
Warrants or Preferred Securities at a future date or dates. The
price of the securities subject to a Purchase Contract may be
fixed at the time the Purchase Contracts are issued or may be
determined by reference to a specific formula set forth in the
Purchase Contracts. The Purchase Contracts may be issued
separately or as a part of units (&#147;Purchase Units&#148;)
consisting of a Purchase Contract and either (x)&nbsp;Debt
Securities or Junior Debt Securities, (y)&nbsp;debt obligations
of third parties, including U.S.&nbsp;Treasury securities, or
(z)&nbsp;Preferred Securities of a CNA Capital Trust, securing
the holder&#146;s obligations to purchase the applicable
securities under the Purchase Contracts. The Purchase Contracts
may require CNAF to make periodic payments to the holders of the
Purchase Units or vice versa, and such payments may be unsecured
or prefunded on some basis. The Purchase Contracts may require
holders to secure their obligations thereunder in a specified
manner and in certain circumstances CNAF may deliver newly
issued prepaid purchase contracts (&#147;Prepaid
Securities&#148;) upon release to a holder of any collateral
securing such holder&#146;s obligations under the original
Purchase Contract.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The applicable prospectus supplement will
describe the terms of any Purchase Contracts or Purchase Units
and, if applicable, Prepaid Securities. The description in the
prospectus supplement will not purport to be complete and will
be qualified in its entirety by reference to the Purchase
Contracts, the collateral arrangements and depositary
arrangements, if applicable, relating to such Purchase Contracts
or Purchase Units and, if applicable, the Prepaid Securities and
the document pursuant to which such Prepaid Securities will be
issued.
</FONT>

<P align="center">
<B><FONT size="2">RELATIONSHIP AMONG THE PREFERRED
SECURITIES,</FONT></B>

<DIV align="center">
<B><FONT size="2">THE CORRESPONDING JUNIOR DEBT
SECURITIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">AND THE GUARANTEES</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">Full and Unconditional Guarantee</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Payments of Distributions and other amounts due
on the Preferred Securities (to the extent the CNA Capital Trust
has funds available for the payment of such Distributions) are
irrevocably guaranteed by CNAF as and to the extent set forth
under &#147;Description of Guarantees.&#148; Taken together,
CNAF&#146;s obligations under each series of Junior Debt
Securities, the Junior Indenture, the related Trust Agreement,
the related Expense Agreement, and the related Guarantee
provide, in the aggregate, a full, irrevocable and unconditional
guarantee of payments of Distributions and other amounts due on
the related series of Preferred Securities. No single document
standing alone or operating in conjunction with fewer than all
of the other documents constitutes such guarantee. It is only
the combined operation of these documents that has the effect of
providing a full, irrevocable and unconditional guarantee of the
CNA Capital Trust&#146;s obligations under the Preferred
Securities. If and to the extent that CNAF does not make
payments on any series of Corresponding Junior Debt Securities,
such CNA Capital Trust will not pay Distributions or other
amounts due on its Preferred Securities. The Guarantees do not
cover any payment when the related CNA Capital Trust does not
have sufficient funds therefor. In such event, the remedy of a
holder of a series of Preferred Securities is to institute a
legal proceeding directly against CNAF
</FONT>

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<DIV align="left">
<FONT size="2">for enforcement of such payment to such holder.
The obligations of CNAF under each Guarantee are subordinate and
junior in right of payment to all Senior Debt of CNAF.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Sufficiency of Payments</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As long as payments of interest and other
payments are made when due on each series of Corresponding
Junior Debt Securities, such payments will be sufficient to
cover Distributions and other payments due on the related
Preferred Securities, primarily because (i)&nbsp;the aggregate
principal amount of each series of Corresponding Junior Debt
Securities will be equal to the sum of the aggregate liquidation
amount of the Related Preferred Securities and related Common
Securities; (ii)&nbsp;the interest rate and interest and other
payment dates on each series of Corresponding Junior Debt
Securities will match the Distribution rate and Distribution and
other payment dates for the related Preferred Securities;
(iii)&nbsp;CNAF shall pay for all and any costs, expenses and
liabilities of such CNA Capital Trust except the CNA Capital
Trust&#146;s obligations to holders of its Preferred Securities
under such Preferred Securities; and (iv)&nbsp;each Trust
Agreement further provides that the CNA Capital Trust will not
engage in any activity that is not consistent with the limited
purposes of such CNA Capital Trust.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Notwithstanding anything to the contrary in the
Junior Indenture, CNAF has the right to set-off any payment it
is otherwise required to make thereunder to the extent CNAF has
theretofore made, or is concurrently on the date of such payment
making, a payment under the related Guarantee.
</FONT>

<P align="left">
<B><FONT size="2">Enforcement Rights of Holders of Preferred
Securities</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A holder of any related Preferred Security may
institute a legal proceeding directly against CNAF to enforce
its rights under the related Guarantee without first instituting
a legal proceeding against the Guarantee Trustee, the related
CNA Capital Trust or any other person or entity.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A default or event of default under any Senior
Debt of CNAF would not constitute a default or Event of Default.
However, in the event of payment defaults under, or acceleration
of, Senior Debt of CNAF, the subordination provisions of the
Junior Indenture provide that no payments may be made in respect
of the Corresponding Junior Debt Securities until such Senior
Debt has been paid in full or any payment default thereunder has
been cured or waived. Failure to make required payments on any
series of Corresponding Junior Debt Securities would constitute
a Junior Debt Related Event of Default and permit Direct Actions
by the holders of Preferred Securities against CNAF to collect
upon the corresponding Junior Debt Securities.
</FONT>

<P align="left">
<B><FONT size="2">Limited Purpose of CNA Capital
Trusts</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each CNA Capital Trust&#146;s Preferred
Securities evidence a beneficial interest in such CNA Capital
Trust, and each CNA Capital Trust exists for the sole purpose of
issuing its Preferred Securities and Common Securities and
investing the proceeds thereof in Corresponding Junior Debt
Securities. A principal difference between the rights of a
holder of a Preferred Security and a holder of a Corresponding
Junior Debt Security is that a holder of a Corresponding Junior
Debt Security is entitled to receive from CNAF the principal
amount of and interest accrued on Corresponding Junior Debt
Securities held, while a holder of Preferred Securities is
entitled to receive payment of Distributions and the Redemption
Price from such CNA Capital Trust (or from CNAF under the
applicable Guarantee) if and to the extent such CNA Capital
Trust has funds available for such payment.
</FONT>

<P align="left">
<B><FONT size="2">Rights Upon Termination</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon any voluntary or involuntary termination,
winding-up or liquidation of any CNA Capital Trust involving the
liquidation of the Corresponding Junior Debt Securities, the
holders of the related Preferred Securities will be entitled to
receive, out of assets held by such CNA Capital
</FONT>

<P align="center"><FONT size="2">52
</FONT>

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<DIV align="left">
<FONT size="2">Trust, the Liquidation Distribution in cash. See
&#147;Description of Preferred Securities &#151; Liquidation
Distribution Upon Termination.&#148; Upon any voluntary or
involuntary liquidation or bankruptcy of CNAF, the Property
Trustee, as holder of the Corresponding Junior Debt Securities,
would be a subordinated creditor of CNAF, subordinated in right
of payment to all Senior Debt, but entitled to receive payment
in full of principal and interest, before any stockholders of
CNAF receive payments or distributions. Since CNAF is the
guarantor under each Guarantee and has agreed to pay for all
costs, expenses and liabilities of each CNA Capital Trust (other
than the CNA Capital Trust&#146;s obligations to the holders of
its Preferred Securities), the positions of a holder of such
Preferred Securities and a holder of such Corresponding Junior
Debt Securities relative to other creditors and to stockholders
of CNAF in the event of liquidation or bankruptcy of CNAF are
expected to be substantially the same.
</FONT>
</DIV>

<P align="center">
<B><FONT size="2">PLAN OF DISTRIBUTION</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">CNAF and/or any CNA Capital Trust may sell any of
the Offered Securities in any one or more of the following ways
from time to time: (i)&nbsp;through agents; (ii)&nbsp;to or
through underwriters; (iii)&nbsp;through dealers; or (iv)
directly to purchasers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The prospectus supplement with respect to the
Offered Securities will set forth the terms of the offering of
the Offered Securities, including the name or names of any
underwriters, dealers or agents; the purchase price of the
Offered Securities and the proceeds to CNAF and/or a CNA Capital
Trust from such sale; any underwriting discounts and commissions
or agency fees and other items constituting underwriters&#146;
or agents&#146; compensation; any initial public offering price
and any discounts or concessions allowed or reallowed or paid to
dealers and any securities exchange on which such Offered
Securities may be listed. Any initial public offering price,
discounts or concessions allowed or reallowed or paid to dealers
may be changed from time to time.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The distribution of the Offered Securities may be
effected from time to time in one or more transactions at a
fixed price or prices, which may be changed, at market prices
prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Offers to purchase Offered Securities may be
solicited by agents designated by CNAF from time to time. Any
such agent involved in the offer or sale of the Offered
Securities in respect of which this prospectus is delivered will
be named, and any commissions payable by CNAF and/or the
applicable CNA Capital Trust to such agent will be described, in
the applicable prospectus supplement. Unless otherwise indicated
in such prospectus supplement, any such agent will be acting on
a reasonable best efforts basis for the period of its
appointment. Any such agent may be deemed to be an underwriter,
as that term is defined in the Securities Act, of the Offered
Securities so offered and sold.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If Offered Securities are sold by means of an
underwritten offering, CNAF and/or the applicable CNA Capital
Trust will execute an underwriting agreement with an underwriter
or underwriters at the time an agreement for such sale is
reached, and the names of the specific managing underwriter or
underwriters, as well as any other underwriters, and the terms
of the transaction, including commissions, discounts and any
other compensation of the underwriters and dealers, if any, will
be set forth in the prospectus supplement which will be used by
the underwriters to make resales of the Offered Securities in
respect of which this prospectus is delivered to the public. If
underwriters are used in the sale of the Offered Securities in
respect of which this prospectus is delivered, the Offered
Securities will be acquired by the underwriters for their own
account and may be resold from time to time in one or more
transactions, including negotiated transactions, at fixed public
offering prices or at varying prices determined by the
underwriter at the time of sale. Offered Securities may be
offered to the public either through underwriting syndicates
represented by managing underwriters or directly by the managing
underwriters. If any underwriter or underwriters are used in the
sale of the Offered Securities,
</FONT>

<P align="center"><FONT size="2">53
</FONT>

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<DIV align="left">
<FONT size="2">unless otherwise indicated in the prospectus
supplement, the underwriting agreement will provide that the
obligations of the underwriters are subject to certain
conditions precedent and that the underwriters with respect to a
sale of Offered Securities will be obligated to purchase all
such Offered Securities of a series if any are purchased.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a dealer is used in the sales of the Offered
Securities in respect of which this prospectus is delivered,
CNAF and/or the applicable CNA Capital Trust will sell such
Offered Securities to the dealer as principal. The dealer may
then resell such Offered Securities to the public at varying
prices to be determined by such dealer at the time of resale.
Any such dealer may be deemed to be an underwriter, as such term
is defined in the Securities Act, of the Offered Securities so
offered and sold. The name of the dealer and the terms of the
transaction will be set forth in the prospectus supplement
relating thereto.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Offers to purchase Offered Securities may be
solicited directly by CNAF and/or the applicable CNA Capital
Trust and the sale thereof may be made by CNAF and/or the
applicable CNA Capital Trust directly to institutional investors
or others, who may be deemed to be underwriters within the
meaning of the Securities Act with respect to any resale
thereof. The terms of any such sales will be described in the
prospectus supplement relating thereto.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Agents, underwriters and dealers may be entitled
under relevant agreements to indemnification or contribution by
CNAF and/or the applicable CNA Capital Trust against certain
liabilities, including liabilities under the Securities Act.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Agents, underwriters and dealers may be customers
of, engage in transactions with or perform services for CNAF and
its subsidiaries in the ordinary course of business.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Offered Securities may also be offered and sold,
if so indicated in the applicable prospectus supplement, in
connection with a remarketing upon their purchase, in accordance
with a redemption or repayment pursuant to their terms, or
otherwise, by one or more firms (&#147;remarketing firms&#148;),
acting as principals for their own accounts or as agents for
CNAF and/or the applicable CNA Capital Trust. Any remarketing
firm will be identified and the terms of its agreement, if any,
with its compensation will be described in the applicable
prospectus supplement. Remarketing firms may be deemed to be
underwriters, as such term is defined in the Securities Act, in
connection with the Offered Securities remarketed thereby.
Remarketing firms may be entitled under agreements which may be
entered into with CNAF and/or the applicable CNA Capital Trust
to indemnification or contribution by CNAF and/or the applicable
CNA Capital Trust against certain civil liabilities, including
liabilities under the Securities Act, and may be customers of,
engage in transactions with or perform services for CNAF and its
subsidiaries in the ordinary course of business.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If so indicated in the applicable prospectus
supplement, CNAF and/or the applicable CNA Capital Trust may
authorize agents, underwriters or dealers to solicit offers by
certain types of institutions to purchase Offered Securities
from CNAF and/or the applicable CNA Capital Trust at the public
offering prices set forth in the applicable prospectus
supplement pursuant to delayed delivery contracts providing for
payment and delivery on a specified date or dates in the future.
A commission indicated in the applicable prospectus supplement
will be paid to underwriters, dealers and agents soliciting
purchases of Offered Securities pursuant to any such delayed
delivery contracts accepted by CNAF and/or the applicable CNA
Capital Trust.
</FONT>

<P align="center">
<B><FONT size="2">VALIDITY OF SECURITIES</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless otherwise indicated in the applicable
prospectus supplement, certain legal matters will be passed upon
for CNAF by Jonathan D. Kantor, Esq., Executive Vice President,
Secretary and General Counsel of CNAF.
</FONT>

<P align="center"><FONT size="2">54
</FONT>

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<P align="center">
<B><FONT size="2">EXPERTS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The consolidated financial statements and the
related consolidated financial statement schedules incorporated
by reference in this prospectus from CNAF&#146;s Annual Report
on Form&nbsp;10-K for the year ended December&nbsp;31, 2000 have
been audited by Deloitte &#38; Touche LLP, independent auditors,
as stated in their reports (which express an unqualified opinion
and include an explanatory paragraph as to an accounting change)
which have been incorporated herein by reference and have been
so incorporated in reliance upon the reports of such firm given
upon their authority as experts in accounting and auditing.
</FONT>

<P align="center"><FONT size="2">55
</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>

<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>

<P align="center">
<B><FONT size="4">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B>

<P align="center">
<IMG src="c89899b5n8989977.gif" alt="(CNA LOGO)">

<P align="center">
<B><FONT size="4">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%&nbsp;Notes
due 2014</FONT></B>

<P align="center">
<HR size="1" width="55%" align="center" noshade>

<P align="center">
<B><FONT size="2">PROSPECTUS SUPPLEMENT</FONT></B>

<P align="center">
<HR size="1" width="55%" align="center" noshade>

<P align="center">
<B><FONT size="4">Merrill Lynch&nbsp;&#38; Co.</FONT></B>

<DIV align="center">
<B><FONT size="4">Morgan Stanley</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="4">Lehman Brothers</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="4">UBS Investment Bank</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">December&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2004</FONT></B>

<P align="left">
<HR size="1" width="100%" align="left" noshade>

<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>
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