United States securities and exchange commission logo
December 23, 2020
Albert J. Miralles
Executive Vice President and Chief Financial Officer
CNA Financial Corporation
151 N. Franklin
Chicago, Illinois 60606
Re: CNA Financial
Corporation
Form 10-K for the
Fiscal Year Ended December 31, 2019
Filed February 11,
2020
File No. 001-05823
Dear Mr. Miralles:
We have reviewed your filing and have the following comments. In
some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within 10 business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K for the Fiscal Year Ended December 31, 2019
Notes to Consolidated Financial Statements
Note A: Summary of Significant Accounting Policies
Investments, page 63
1. We note your July 24,
2009 response to comment 2 of our June 22, 2009 letter
acknowledging the
significance of high credit quality designation in the guidance now
codified in ASC
325-40-35-4 (and since the adoption of ASU 2016-13 in ASC 325-40-35-
4C). Your policy
disclosure in the third paragraph of this section is unclear as to how you
account for changes in
prepayment estimates but appears to imply use of the retrospective
method which only
applies to asset-backed securities of high credit quality. Given that it
is apparent from your
December 31, 2019 Supplemental Financial Information furnished
as Exhibit 99.2 to your
February 10, 2020 Form 10-K that about $3.2 billion of your total
asset-backed securities
investments of $8.8 billion, or 37% are rated below AA and
therefore not of high
credit quality, please provide us proposed revised disclosure to be
Albert J. Miralles
CNA Financial Corporation
December 23, 2020
Page 2
included in future filings that clarifies how you account for changes
in prepayment
estimates for your asset-backed securities. Otherwise, tell us how
your current policy
disclosure and accounting complies with the guidance referenced above.
Note B: Investments, page 68
2. In the risk factor on page 70 of your September 30, 2020 Form 10-Q you
identify the
energy, retail, travel, entertainment and real estate industries as
being heavily impacted by
the COVID-19 pandemic. You also indicate that your municipal bond
portfolio is subject
to risks of default by state and local governments and agencies that
are under increased
strain related to the pandemic. Finally, you disclose that these
significant financial market
disruptions may have a material impact on your business, results of
operations and
financial condition. Please tell us the following:
Your current investment portfolio exposure to each of the
industries identified above;
Your consideration for disclosing in your upcoming 2020 Form 10-K
the
concentration information in your investment portfolio for these
industries and your
municipal bond portfolio as stipulated in ASC 825-10-50-20 and
50-21; and
If your investment portfolio concentrations do not meet the
disclosure threshold in
the guidance identified in the preceding bullet, your
consideration for otherwise
disclosing in Management's Discussion and Analysis in your
upcoming 2020 Form
10-K more information about the composition of your investment
portfolio so that
investors can better assess the underlying risks given the
significant financial market
disruptions you identify.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Mark Brunhofer at (202) 551-3638 or Bonnie Baynes at
(202) 551-
4924 if you have any questions.
FirstName LastNameAlbert J. Miralles Sincerely,
Comapany NameCNA Financial Corporation
Division of
Corporation Finance
December 23, 2020 Page 2 Office of
Finance
FirstName LastName