Stockholders' Equity and Statutory Accounting Practices

12 Months Ended

Dec. 31, 2025

Stockholders' Equity and Statutory Accounting Practices [Abstract]

Stockholders' Equity And Statutory Accounting Practices

Stockholders’ Equity and Statutory Accounting Practices

Common Stock Dividends

There are no restrictions on the retained earnings or net income of CNAF with regard to payment of dividends to its stockholders. However, given the holding company nature of CNAF, its ability to pay a dividend is dependent on the receipt of dividends from its subsidiaries, particularly CCC, which directly or indirectly owns the vast majority of all significant subsidiaries. See the Statutory Accounting Practices section below for a discussion of the regulatory restrictions on CCC's availability to pay dividends.

CNAF's ability to pay dividends may be indirectly limited by the minimum consolidated net worth covenant in the Company's line of credit agreement. See Note I to the Consolidated Financial Statements for further discussion of the Company's debt obligations.

Common Stock Repurchases

The Company's Board of Directors has approved an authorization to purchase, in the open market or through privately negotiated transactions, our outstanding common stock, as our management deems appropriate. The Company repurchased 700,000 and 450,000 shares of CNAF common stock at an aggregate cost of $34 million and $20 million during the years ended December 31, 2025 and 2024.

Stock-Based Compensation

The Company issued 527,066 and 413,224 shares of CNAF common stock to settle employee stock-based compensation awards under the CNAF Incentive Compensation Plan during the years ended December 31, 2025 and 2024.

Accumulated Other Comprehensive Income (Loss)

The tables below display the changes in Accumulated other comprehensive income (loss) by component.

(In millions)	Net unrealized gains (losses) on investments with an allowance for credit losses		Net unrealized gains (losses) on other investments		Pension and postretirement benefits		Cumulative impact of changes in discount rates used to measure long duration contracts		Cumulative foreign currency translation adjustment		Total
Balance as of January 1, 2025	$	(13)	$	(1,876)	$	(191)	$	353	$	(264)	$	(1,991)
Other comprehensive income (loss) before reclassifications	(22)		842		17		(161)		143		819
Amounts reclassified from accumulated other comprehensive income (loss) net of tax (expense) benefit of $5, $12, $1, $—, $— and $18	(20)		(46)		(8)		—		—		(74)
Other comprehensive income (loss) net of tax (expense) benefit of $—, $(238), $(6), $43, $— and $(201)	(2)		888		25		(161)		143		893
Balance as of December 31, 2025	$	(15)	$	(988)	$	(166)	$	192	$	(121)	$	(1,098)

(In millions)	Net unrealized gains (losses) on investments with an allowance for credit losses		Net unrealized gains (losses) on other investments		Pension and postretirement benefits		Cumulative impact of changes in discount rates used to measure long duration contracts		Cumulative foreign currency translation adjustment		Total
Balance as of January 1, 2024	$	(12)	$	(1,613)	$	(525)	$	(359)	$	(163)	$	(2,672)
Other comprehensive income (loss) before reclassifications	(34)		(310)		17		712		(101)		284
Amounts reclassified from accumulated other comprehensive income (loss) net of tax (expense) benefit of $9, $13, $84, $—, $— and $106	(33)		(47)		(317)		—		—		(397)
Other comprehensive income (loss) net of tax (expense) benefit of $—, $68, $(89), $(189), $— and $(210)	(1)		(263)		334		712		(101)		681
Balance as of December 31, 2024	$	(13)	$	(1,876)	$	(191)	$	353	$	(264)	$	(1,991)

(In millions)	Net unrealized gains (losses) on investments with an allowance for credit losses		Net unrealized gains (losses) on other investments		Pension and postretirement benefits		Cumulative impact of changes in discount rates used to measure long duration contracts		Cumulative foreign currency translation adjustment		Total
Balance as of January 1, 2023	$	(7)	$	(2,738)	$	(591)	$	(41)	$	(221)	$	(3,598)
Other comprehensive income (loss) before reclassifications	(24)		1,072		39		(318)		58		827
Amounts reclassified from accumulated other comprehensive income (loss) net of tax (expense) benefit of $5, $14, $7, $—, $— and $26	(19)		(53)		(27)		—		—		(99)
Other comprehensive income (loss) net of tax (expense) benefit of $1, $(304), $(17), $85, $— and $(235)	(5)		1,125		66		(318)		58		926
Balance as of December 31, 2023	$	(12)	$	(1,613)	$	(525)	$	(359)	$	(163)	$	(2,672)

Amounts reclassified from Accumulated other comprehensive income (loss) shown above are reported in Net income (loss) as follows:

Component of AOCI	Consolidated Statements of Operations Line Item Affected by Reclassifications
Net unrealized gains (losses) on investments with an allowance for credit losses and Net unrealized gains (losses) on other investments	Net investment gains (losses)
Pension and postretirement benefits	Other operating expenses and Insurance claims and policyholders' benefits

Statutory Accounting Practices

CNAF's insurance subsidiaries are domiciled in various jurisdictions. These subsidiaries prepare statutory financial statements in accordance with accounting practices prescribed or permitted by the respective jurisdictions' insurance regulators. Domestic prescribed statutory accounting practices are set forth in a variety of publications of the National Association of Insurance Commissioners (NAIC) as well as state laws, regulations and general administrative rules. These statutory accounting principles vary in certain respects from GAAP. In converting from statutory accounting principles to GAAP, the more significant adjustments include deferral of policy acquisition costs and the inclusion of net unrealized holding gains or losses in stockholders' equity relating to certain fixed maturity securities.

The Company has a prescribed practice as it relates to the accounting under Statement of Statutory Accounting Principles No. 62, Property and Casualty Reinsurance, paragraphs 87 and 88 in conjunction with the 2010 LPT with NICO which is further discussed in Note E to the Consolidated Financial Statements. The prescribed practice allows the Company to aggregate all third-party A&EP reinsurance balances administered by NICO in Schedule F and to utilize the LPT as collateral for the underlying third-party reinsurance balances for purposes of calculating the statutory reinsurance penalty.

This prescribed practice increased statutory capital and surplus by $45 million and $55 million at December 31, 2025 and 2024.

The payment of dividends by CNAF's insurance subsidiaries without prior approval of the insurance department of each subsidiary's domiciliary jurisdiction is generally limited by formula. Dividends in excess of these amounts are subject to prior approval by the respective insurance regulator.

Dividends from CCC are subject to the insurance holding company laws of the State of Illinois, the domiciliary state of CCC. Under these laws, ordinary dividends, or dividends that do not require prior approval by the Illinois Department of Insurance (the Department), are determined based on the greater of the prior year's statutory net income or 10% of statutory surplus as of the end of the prior year, as well as the timing and amount of dividends paid in the preceding twelve months. Additionally, ordinary dividends may only be paid from earned surplus, which is calculated by removing unrealized gains from unassigned surplus. As of December 31, 2025, CCC is in a positive earned surplus position. The maximum allowable dividend CCC could pay during 2026 that would not be subject to the Department's prior approval is $1,266 million, less dividends paid during the preceding twelve months measured at that point in time. CCC paid dividends of $1,115 million in 2025. The actual level of dividends paid in any year is determined after an assessment of available dividend capacity, holding company liquidity and cash needs as well as the impact the dividends will have on the statutory surplus of the applicable insurance company.

Combined statutory capital and surplus and statutory net income (loss) for the Combined Continental Casualty Companies are presented in the table below, determined in accordance with accounting practices prescribed or permitted by insurance and/or other regulatory authorities.

	Statutory Capital and Surplus					Statutory Net Income (Loss)
	December 31					Years ended December 31
(In millions)	2025(1)			2024		2025(1)		2024(2)		2023
Combined Continental Casualty Companies	$	11,578	1	$	11,165	$	1,258	$	713	$	1,172

(1) Information derived from the statutory-basis financial statements to be filed with insurance regulators.

(2) Includes a $293 million after-tax loss from pension settlement transactions. Pension settlement transactions are further discussed in Note J to the Consolidated Financial Statements included under Item 8.

CNAF's domestic insurance subsidiaries are subject to risk-based capital (RBC) requirements. RBC is a method developed by the NAIC to determine the minimum amount of statutory capital appropriate for an insurance company to support its overall business operations in consideration of its size and risk profile. The formula for determining the amount of RBC specifies various factors, weighted based on the perceived degree of risk, which are applied to certain financial balances and financial activity. The adequacy of a company's actual capital is evaluated by a comparison to the RBC results, as determined by the formula. Companies below minimum RBC requirements are classified within certain levels, each of which requires specified corrective action.

The statutory capital and surplus presented above for CCC as of December 31, 2025 and 2024 was significantly above the level at which any RBC regulatory action would occur. The statutory capital and surplus of the Company's foreign insurance subsidiaries, which is not significant to the overall statutory capital and surplus, also met or exceeded their respective regulatory and other capital requirements.