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===============================================================================                       SECURITIES AND EXCHANGE COMMISSION                             Washington, D.C. 20549                      -------------------------------------                                    FORM 8-K                                 CURRENT REPORT                     PURSUANT TO SECTION 13 OR 15 (d) OF THE                         SECURITIES EXCHANGE ACT OF 1934Date of report (Date of earliest event reported)          June 9, 1999                      -------------------------------------                            CNA FINANCIAL CORPORATION            (Exact Name of Registrant as Specified in Charter)          Delaware                  1-5823                36-6169860(State or Other Jurisdiction      (Commission           (IRS Employer      of Incorporation)          File Number)        Identification No.) CNA Plaza, Chicago, Illinois                               60685(Address of Principal Executive Offices)                  (Zip Code)Registrant's telephone number, including area code       (312) 822-5000          (Former Name or Former Address, if Changed Since Last Report)===============================================================================
Item 5.           Other EventsExhibit No.       Description-----------       ------------99.01             On June 9, 1999, CNA Financial Corporation issued a press                  release announcing that it is selling its personal lines                  business to Allstate.  A copy of the press release is attached                  hereto as Exhibit 99.01 and is incorporated herein by                  reference.
                                   SIGNATURESPursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  theregistrant  has duly  caused  this  report  to be  signed  on its  behalf by theundersigned thereunto duly authorized.                                       CNA FINANCIAL CORPORATIONDate:   June 10, 1999                      By:  S/W. JAMES MACGINNITIE        -------------                           -----------------------------                                                W. James MacGinnitie                                                Senior Vice President and                                                Chief Financial Officer

Exhibit 99.01CNACNA PlazaChicago, IL  60685Media:Clark Walter312-822-1454Analysts:Deborah Kamp312-822-7752-------------------------------------------------------------------------------NEWS                                                          For Immediate ReleaseCNA to Sell Personal Lines Business to AllstateChicago,  IL June, 9, 1999 - CNA, a leading insurance group,  today announced itis selling its personal lines  business to Allstate.  Allstate will set up a newentity,  to be called  CNA  Personal  Insurance,  to manage  the  business  as aseparate  independent agent company.  The new $1.7 billion company will continueto sell CNA  personal  lines  products  through  the  3,800  independent  agentslicensed  to sell CNA  products.  CNA will have an ongoing  interest  in the newcompany  through  a $75  million  10-year  equity-linked  note.  CNA will have aspecial  advisor  to the  board of CNA  Personal  Insurance  and will  receive aroyalty fee for six years.CNA Insurance  Chairman and Chief Executive Officer Bernard L. Hengesbaugh said,"This transaction offers a winning combination for our stockholders,  our agentsand their customers, and our employees."For our  investors,  we've been clear that our strategy is to sharpen our focusin those businesses where we are now or where we can become a market leader.  Asa result of this transaction,  we can redeploy and refocus the company's capitalto help maximize CNA's rates of return."For our agents and their  customers,  CNA  Personal  Insurance  will be able toprovide  an  expanded  product  line with  more  competitive  price and  servicefeatures than would be possible by CNA alone.  And for our  employees,  this newbusiness  offers an  opportunity  to be associated  with a personal lines marketleader."Hengesbaugh  emphasized that the new organization  will create maximum financialvalue to the  extent  that it  benefits  agents  and  their  customers.  "CNA iscommitted to working  closely with the  management of CNA Personal  Insurance toassure a smooth transition," he said.                                     -more-
                                       -2-"We are pleased that all 2,000 of our Personal Insurance employees will transferto the new business," he said. "That means our agents will continue to work withthe people they have come to know and trust."The CNA personal  lines  management  team will stay largely in place.  Ernest A.Lausier,  currently president of CNA's personal lines business, will continue ina leadership role along with Doug Reynolds,  currently  assistant vice presidentof Deerbrook Insurance, an Allstate subsidiary.Edward M. Liddy,  Allstate's  chairman,  president and chief executive  officer,said in a news  release  issued  today by Allstate,  "The total  personal  linesinsurance market is over $130 billion, and we already have $20 billion in annualpremium revenue. In today's market place we have to listen to the customer,  andprovide our product  where and how the  customer  wants it. We are going to growthe number of channels we use to meet the needs of our customers,  and we intendto be the market leader in every channel in which we compete."Under the terms of the agreement,  Allstate will acquire the operations of CNA'spersonal  lines  business  including the reserves and the renewal  rights to newbusiness.  CNA will receive from Allstate cash of approximately  $140 million atthe time of closing as well as a royalty  fee tied to new and  renewal  premiumswritten  through the  newly-created  distribution  channel.  The personal lines'surplus  will  remain  with CNA.  CNA has  estimated  the  transaction  value atapproximately 1.2x - 1.3x of personal lines' allocated book value."We have an important  stake in the success of this  transaction  and we will doeverything in our power to ensure that it succeeds," said Hengesbaugh.The transaction is expected to close by the fourth  quarter.  CNA believes therewill be no  material  effect  on its  operating  earnings  in 1999 and 2000 as aresult of this transaction.CNA  Financial  Corporation  (NYSE:  CNA) and its  subsidiaries  (CNA)  had 1998revenues of $17.1 billion.  CNA ranks among the top 10 U.S. insurance groups andserves  individuals and businesses with a broad range of insurance  products andinsurance-related  services.  CNA products  and  services  are marketed  throughmultiple distribution channels,  including independent agents, brokers,  generalagents and direct sales.Since 1897, CNA has built on a foundation of financial  strength,  stability andcommitment to customers and business  partners.  Visit CNA at www.cna.com on theWorld Wide Web. CNA is a registered  service mark, trade name and domain name ofCNA Financial Corporation.                                       ###
FORWARD LOOKING STATEMENTThe statements contained in this press release,  which are not historical facts,are forward-looking  statements.  When included in this press release, the words"believe,"  "expects,"  "intends,"  "anticipates,"  "estimates,"  and  analogousexpressions are intended to identify forward-looking statements. Such statementsinherently are subject to a variety of risks and uncertainties  that could causeactual  results  to differ  materially  from  those  projected.  Such  risks anduncertainties  include,  among  others,  the  impact  of  competitive  products,policies  and  pricing;   product  and  policy  demand  and  market   responses;development  of claims  and the  effect on loss  reserves;  the  performance  ofreinsurance companies under reinsurance contracts with CNA, general economic andbusiness  conditions;  changes in  financial  markets  (interest  rate,  credit,currency,  commodities and stocks);  changes in foreign,  political,  social andeconomic  conditions;  regulatory  initiatives and compliance with  governmentalregulations;  judicial decisions and rulings;  the effect on CNA with regards tothird party corrective actions on Year 2000 compliance; changes in rating agencypolicies  and  practices;  the results of  financing  efforts;  changes in CNA'scomposition  of  operating   segments;   the  actual  closing  of   contemplatedtransactions  and  agreements and various other matters and risks (many of whichare beyond CNA's control)  detailed in CNA's Securities and Exchange  Commissionfilings.  These  forward-looking  statements  speak  only as of the date of thispress release.  CNA expressly disclaims any obligation or undertaking to releasepublicly  any updates or revisions to any  forward-looking  statement  containedherein to reflect any change in CNA's  expectations  with regard  thereto or anychange in events, conditions or circumstances on which any statement is based.NOTE: A conference  call for the investment  community will be held from 10 a.m.to 10:45 a.m. CDT today. On the conference call will be Bernard L.  Hengesbaugh,chairman and chief executive officer of CNA. Participants can access the call bydialing 800-390-9847.  The call is available to the media, but questions will berestricted  to the  investment  community.  A taped  replay  of the call will beavailable,  beginning one hour after the call ends, until 5 p.m. EST on June 16,1999, by dialing 800-395-2178.                                      # # #