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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 1934




                               DECEMBER 27, 1996
                                (Date of Report)




                             CAPSURE HOLDINGS CORP.
             (Exact name of Registrant as specified in its charter)




                                     0-3565
                             (Commission File No.)




               DELAWARE                               34-1010356
    (State or other jurisdiction)          (IRS Employer Identification No.)


TWO NORTH RIVERSIDE PLAZA, CHICAGO, ILLINOIS               60606
(Address of principal executive offices)                (Zip code)



                                 (312) 879-1900
               (Registrant's telephone number, include area code)



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ITEM 5. OTHER EVENTS

On December 19, 1996, Capsure Holdings Corp. ("Capsure") and CNA Financial
Corporation entered into a definitive Reorganization Agreement pursuant to
which Capsure will merge with and into a wholly owned subsidiary of CNA Surety
Corporation.  CNA Financial Corporation, through its subsidiaries, will be the
majority shareholder of CNA Surety Corporation, owning 61.75 percent of the
shares.  The remaining shares will be issued to the existing Capsure
shareholders (a portion of these shares will be held as options for the
existing holders of Capsure options) in a tax-free exchange for their Capsure
shares on a one-for-one basis and are expected to be traded on the New York
Stock Exchange.  Samuel Zell, Capsure's largest shareholder with a 26.2 percent
ownership interest, has agreed to vote his shares in favor of the merger.  The
agreement and the transactions contemplated thereby are subject to several
conditions, including ratification by the affirmative vote of Capsure
shareholders and approval by governmental and insurance regulatory authorities.



ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS

        (c)   Exhibits

              2    Reorganization Agreement dated as of December 19, 1996 among
                   Capsure Holdings Corp, Continental Casualty Company, CNA
                   Surety Corporation, Surety Acquisition Company and certain
                   affiliates of Continental Casualty Corporation.

              28   Press Release issued jointly by CNA Financial Corporation and
                   Capsure Holdings Corp., dated December 19, 1996.







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                                   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.





                                          CAPSURE HOLDINGS CORP.




                                          By: /s/ John S. Heneghan
                                              -----------------------------
                                              John S. Heneghan
                                              Vice President and Controller










Dated:   December 27, 1996




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