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                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

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                                    FORM 8-K


                                 CURRENT REPORT
                     PURSUANT TO SECTION 13 OR 15 (d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934



Date of report (Date of earliest event reported)          October 1, 1999


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                            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)

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Item 5. Other Events.

On October 1, 1999, certain subsidiaries of CNA Financial Corporation's
(CNA or the Company) completed a previously announced transaction with The
Allstate Corporation (Allstate) involving CNA's personal lines insurance
business. As a result of the transaction, CNA received $139.5 million in cash
which consisted of i) $120 million in premiums for the reinsurance of the CNA
personal insurance business by Allstate and ii) $19.5 million for an option
exercisable during 2002 to purchase common stock of five CNAF subsidiaries.

CNA will be primarily liable for personal insurance policies generated by the
current CNA personal lines agents until the Allstate insurance companies meet
regulatory qualifications to write such policies. The qualification process is
expected to be substantially concluded on or before December 31, 2002. The
policies written by CNA will be reinsured by Allstate companies. Prior to 2002,
the Company will concentrate CNA's remaining personal lines insurance business
in the optioned companies.

CNA will continue to have an ongoing interest in the profitability of CNA's
personal lines insurance business and the related successor business
through a $75 million equity linked note (attached hereto as Exhibit 10.8).
In addition, the Company has licensed the "CNA Personal Insurance"
trademark and personal insurance distribution system to Allstate for use in
Allstate's personal insurance agency business for a period of five years.
CNA will receive a royalty fee based on the business volume of personal
insurance policies sold through the CNA agents and on some related business
for a period of six years.

CNA believes there will be no material effect on its operating earnings in 1999
and 2000 as a result of this transaction.

Item 7.  Exhibits.

Exhibit  10.7      Asset Purchase and Investment Agreement

Exhibit  10.8      Equity-Linked Note

                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                 CNA FINANCIAL CORPORATION


Date:   October 19, 1999                     By:  S/ROBERT V. DEUTSCH
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                                                  Robert V. Deutsch
                                                  Senior Vice President and
                                                  Chief Financial Officer