CNA Financial Corp. reported a 2005 fourth-quarter loss of $217million, compared with earnings of $303 million in the comparable2004 period.

The Chicago-based company also announced a restatement offinancial earnings in the 2001-2004 period to correct accountingfor businesses reported as discontinued operations. The restatementwill reduce shareholders' equity as of Dec. 2004 by $204million.

The fourth-quarter loss stems in part from a net loss of $223million from commutations of significant finite reinsurancecontracts and other adverse development of $139 million.

In addition, $37 million of catastrophe losses related primarilyto Hurricane Wilma also contributed to the red ink.

The p-c combined ratio for the quarter was 101.4 before the 20points added from the commutation and other losses.

For the full year, the company reported net income of $264million, compared with restated net income of $425 million for2004. The 2005 combined ratio was 98.4 before 11 points were addedfor commutations and catastrophe costs.

Stephen Lillienthal, company chief executive officer, said thebelow 100 combined ratio for the year, excluding the specialcharges, represents disciplined underwriting. “Going forward, theearnings power of our business will be much more evident now thatwe have removed the drag of commuted reinsurance contracts,” hesaid.