SC 13E3/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 13E-3

(Amendment No. 1)

(Rule 13e-100)

Rule 13e-3 Transaction Statement
under Section 13(e) of the Securities Exchange Act of 1934

CNA SURETY CORPORATION

Name of Subject Company (issuer)

SURETY ACQUISITION CORPORATION
a wholly-owned subsidiary of

CONTINENTAL CASUALTY COMPANY
a wholly-owned subsidiary of

THE CONTINENTAL CORPORATION
a wholly owned subsidiary of

CNA FINANCIAL CORPORATION
a majority-owned subsidiary of

LOEWS CORPORATION

CNA SURETY CORPORATION (issuer)

(Names of Filing Persons (other person(s))

Common Stock, $0.01 Par Value Per Share

(Title of Class of Securities)

12612L1008

(CUSIP Number of Class of Securities)

Jonathan D. Kantor, Esq.
Executive Vice President, General Counsel and Secretary
CNA Financial Corporation
333 South Wabash Avenue
Chicago, Illinois 60604-4107
(312) 822-5000

(Name, address, and telephone numbers of person authorized to receive notices and communications on behalf of filing persons)

With copies to:

Gary Horowitz	Rosemary Quinn	Mark D. Gerstein
Simpson Thacher & Bartlett LLP	CNA Surety Corporation	Timothy P. FitzSimons
425 Lexington Avenue	333 S. Wabash Avenue, 41st Floor	Latham & Watkins LLP
New York, New York 10017-3954	Chicago, Illinois 60604	233 South Wacker Drive, Suite 5800
(212) 455-2000	(312) 822-5000	Chicago, Illinois 60606
		(312) 876-7700

This statement is filed in connection with (check the appropriate box):

a.	o	The filing of solicitation materials or an information statement subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the Securities Exchange Act of 1934.
b.	o	The filing of a registration statement under the Securities Act of 1933.
c.	þ	A tender offer.
d.	o	None of the above.

Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies: o

Check the following box if the filing is a final amendment reporting the results of the transaction: o

Calculation of Filing Fee

TRANSACTION VALUATION*	AMOUNT OF FILING FEE**
$466,255, 011	$54,132.21

*

Estimated for purposes of calculating the amount of the filing fee only. The calculation assumes the purchase of all outstanding shares of common stock, par value $0.01 per share (the “Shares”), of CNA Surety Corporation, a Delaware corporation, other than Shares owned by CNA Financial Corporation (“CNA Financial”) and its subsidiaries, at a purchase price of $26.55 per Share, net to the seller in cash. As of May 6, 2011, there were 44,986,541 Shares outstanding, of which 27,425,147 Shares are owned by subsidiaries of CNA Financial. As a result, this calculation assumes the purchase of 17,561,394 Shares.

**

The amount of the filing fee is calculated in accordance with Rule 0—11 of the Securities Exchange Act of 1934, as amended, by multiplying the transaction value by 0.00011610.

þ Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.

Amount Previously Paid: $54,132.21	Filing Party: CNA Financial Corporation
Form or Registration No.: Schedule TO	Date Filed: May 11, 2011

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THIS TRANSACTION, PASSED UPON THE MERITS OR FAIRNESS OF THIS TRANSACTION, OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THIS SCHEDULE 13E-3. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

INTRODUCTION

     This Amendment No. 1 to Schedule 13E-3 Transaction Statement amends and supplements the Transaction Statement on Schedule 13E-3, together with the exhibits hereto (as so amended and supplemented, the “Schedule 13E-3” or the “Transaction Statement”) filed on May 11, 2011 by (1) CNA Financial Corporation, a Delaware corporation (“CNA Financial”), (2) The Continental Corporation, a New York corporation and a direct wholly-owned subsidiary of CNA Financial (“TCC”), (3) Continental Casualty Corporation, an Illinois insurance company and a direct wholly-owned subsidiary of TCC (“CCC”), (4) Surety Acquisition Corporation (“Purchaser” ), a Delaware corporation and a direct wholly-owned subsidiary of CCC, (5) Loews Corporation, a Delaware corporation and the owner of approximately 90% of the outstanding shares of common stock of CNA Financial (“Loews”) and (6) CNA Surety Corporation, a Delaware corporation (“CNA Surety”) (collectively, the “Filing Persons”). This Transaction Statement relates to the tender offer by Purchaser to purchase all the outstanding shares of common stock, par value $0.01 per share (the “Shares”), of CNA Surety, other than Shares owned by CNA Financial and its subsidiaries, at a purchase price of $26.55 per Share, net to the seller in cash, without interest and less any applicable withholding of taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated May 11, 2011 (as may be amended or supplemented from time to time, the “Offer to Purchase”), and the related Letter of Transmittal (as may be amended or supplemented from time to time, the “Letter of Transmittal”) (which, as amended or supplemented from time to time, together constitute the “Offer”).

     Under the rules governing “going private” transactions, CNA Financial, Purchaser, TCC, CCC, Loews and CNA Surety are deemed to be engaged in a “going private” transaction and are therefore required to, among other things, express their reasons for the transactions described in the Offer to Purchase, a copy of which is filed as Exhibit (a)(1)(i) of the Schedule TO dated May 11, 2011 and their views as to the fairness of the transactions to CNA Surety’s unaffiliated stockholders. The Filing Persons make the statements in this Transaction Statement, solely for the purpose of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act.

     The information contained in the Solicitation/Recommendation Statement on Schedule 14D-9 filed by CNA Surety with the Securities and Exchange Commission (“SEC”) on May 11, 2011, as amended and supplemented by Amendments No. 1 through 4 (as so amended and supplemented, the “Schedule 14D-9”), copies of which are attached hereto as Exhibits (a)(1)(viii) to (a)(1)(xii), respectively, and the information contained in the Tender Offer Statement filed on Schedule TO with the SEC on May 11, 2011, as amended and supplemented by Amendments No. 1 through 3 (as so amended and supplemented, the “Schedule TO”), copies of which are attached hereto as Exhibits (a)(1)(xiii) to (a)(1)(xvi), respectively, is incorporated by reference, and the responses to each item in this Schedule 13E-3 are qualified in their entirety by the information contained in the Schedule 14D-9 and the Schedule TO. All information contained or incorporated by reference in this Transaction Statement concerning any of the Filing Persons has been provided by such Filing Person and none of the Filing Persons takes responsibility for the accuracy of any information not supplied by such Filing Person.

Item 16. Exhibits

     Item 16 of the Schedule 13E-3 is hereby amended and restated in its entirety to read as follows:

ITEM 16. EXHIBITS.

Exhibit No.	Description
(a)(1)(i)	Offer to Purchase, dated May 11, 2011 (incorporated by reference to Exhibit (a)(1)(i) of the Schedule TO filed on May 11, 2011).
(a)(1)(ii)	Letter of Transmittal (incorporated by reference to Exhibit (a)(1)(ii) of the Schedule TO filed on May 11, 2011).
(a)(1)(iii)	Notice of Guaranteed Delivery (incorporated by reference to Exhibit (a)(1)(iii) of the Schedule TO filed on May 11, 2011).

Exhibit No.	Description
(a)(1)(iv)	Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees (incorporated by reference to Exhibit (a)(1)(iv) of the Schedule TO filed on May 11, 2011).
(a)(1)(v)	Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees (incorporated by reference to Exhibit (a)(1)(v) of the Schedule TO filed on May 11, 2011).
(a)(1)(vi)	Summary Advertisement published in The New York Times on May 11, 2011 (incorporated by reference to Exhibit (a)(1)(vi) to the Schedule TO filed on May 11, 2011).
(a)(1)(vii)	Letter from the Special Committee to CNA Surety’s stockholders, dated May 11, 2011 (incorporated by reference to Exhibit (a)(1)(vii) to the Schedule 14D-9 on May 11, 2011).
(a)(1)(viii)	Solicitation/Recommendation Statement on Schedule 14D-9, dated May 11, 2011 (incorporated by reference to the Schedule 14D-9 filed on May 11, 2011).
(a)(1)(ix)	Solicitation/Recommendation Statement (Amendment No. 1) on Schedule 14D-9, dated May 16, 2011 (incorporated by reference to the Schedule 14D-9 (Amendment No. 1) filed on May 16, 2011).
(a)(1)(x)	Solicitation/Recommendation Statement (Amendment No. 2) on Schedule 14D-9, dated May 17, 2011 (incorporated by reference to the Schedule 14D-9 (Amendment No. 2) filed on May 17, 2011).
(a)(1)(xi)	Solicitation/Recommendation Statement (Amendment No. 3) on Schedule 14D-9, dated May 27, 2011 (incorporated by reference to the Schedule 14D-9 (Amendment No. 3) filed on May 27, 2011).
(a)(1)(xii)	Solicitation/Recommendation Statement (Amendment No. 4) on Schedule 14D-9, dated June 3, 2011 (incorporated by reference to the Schedule 14D-9 (Amendment No. 4) filed on June 3, 2011).
(a)(1)(xiii)	Tender Offer Statement on Schedule TO, dated May 11, 2011 (incorporated by reference to the Schedule TO filed on May 11, 2011).
(a)(1)(xiv)	Tender Offer Statement (Amendment No. 1) on Schedule TO, dated May 17, 2011 (incorporated by reference to the Schedule TO (Amendment No. 1) filed on May 17, 2011).
(a)(1)(xv)	Tender Offer Statement (Amendment No. 2) on Schedule TO, dated May 27, 2011 (incorporated by reference to the Schedule TO (Amendment No. 2) filed on May 27, 2011).
(a)(1)(xvi)	Tender Offer Statement (Amendment No. 3) on Schedule TO, dated June 3, 2011 (incorporated by reference to the Schedule TO (Amendment No. 3) filed on June 3, 2011).
(a)(5)(i)	Joint Press Release, issued by CNA Financial and CNA Surety, dated May 11, 2011 (incorporated by reference to Exhibit (a)(5)(i) to the Schedule TO filed on May 11, 2011).
(a)(5)(ii)	Joint Press Release, issued by CNA Financial and CNA Surety, dated April 21, 2011 (incorporated by reference to Exhibit 99.1 to CNA Surety’s Current Report on Form 8-K filed by CNA Surety on April 21, 2011).
(a)(5)(iii)	Information Statement Pursuant to Section 14(f) of the Exchange Act on Rule 14f-1 thereunder (incorporated by reference to Annex I to the Schedule 14D-9 filed on May 11, 2011).
(b)	None.

Exhibit No.	Description
(c)(1)*	Presentation of J.P. Morgan to the CNA Financial board of directors, dated October 27, 2010.
(c)(2)*	Presentation of J.P. Morgan to the CNA Financial board of directors, dated October 28, 2010.
(c)(3)*	Presentation of J.P. Morgan to management of CNA Financial, inadvertently dated March 10, 2010 rather than March 10, 2011, which was the date on which the presentation was discussed.
(c)(4)*	Presentation of J.P. Morgan to management of Loews and CNA Financial, dated March 17, 2011.
(c)(5)*	Presentation of J.P. Morgan to Goldman, Sachs & Co., dated March 18, 2011.
(c)(6)*	Presentation of J.P. Morgan to the CNA Financial board of directors, dated April 20, 2011.
(c)(7)*	Presentation by Goldman, Sachs & Co. to the Special Committee, dated December 20, 2010.
(c)(8)*	Presentation by Goldman, Sachs & Co. to the Special Committee, dated January 24, 2011.
(c)(9)*	Follow-Up Discussion Materials presented by Goldman, Sachs & Co. to the Special Committee, dated March 21, 2011.
(c)(10)*	Presentation by Goldman, Sachs & Co. to the Special Committee, dated April 20, 2011.
(c)(11)	Opinion of Goldman, Sachs & Co. to the Special Committee, dated April 20, 2011 (incorporated by reference to Annex II to the Schedule 14D-9 on May 11, 2011).
(c)(12)*	Estimate of Unpaid Loss and Loss Adjustment Expenses as of December 31, 2010, prepared by Milliman, Inc., dated January 21, 2011.
(d)(1)	Agreement and Plan of Merger, dated as of April 20, 2011, by and among CNA Financial, CNA Surety and Purchaser (incorporated by reference to Exhibit 2.1 to the Form 8-K filed by CNA Surety on April 21, 2011).
(f)	Section 262 of the Delaware General Corporation Law (incorporated by reference to Schedule C of the Schedule TO filed on May 11, 2011).
(g)	None.

* Previously filed with the Transaction Statement on Schedule 13E-3 filed on May 11, 2011.

SIGNATURE

     After due inquiry and to the best of my knowledge and belief, I certify that the information in this statement is true, complete and correct.

Dated: June 3, 2011
	CNA FINANCIAL CORPORATION
	By:	/s/ Jonathan D. Kantor
		Name:	Jonathan D. Kantor
		Title:	Executive Vice President, General Counsel and Secretary
	SURETY ACQUISITION CORPORATION
	By:	/s/ Jonathan D. Kantor
		Name:	Jonathan D. Kantor
		Title:	Executive Vice President, General Counsel and Secretary
	CONTINENTAL CASUALTY COMPANY
	By:	/s/ Jonathan D. Kantor
		Name:	Jonathan D. Kantor
		Title:	Executive Vice President, General Counsel and Secretary
	THE CONTINENTAL CORPORATION
	By:	/s/ Jonathan D. Kantor
		Name:	Jonathan D. Kantor
		Title:	Executive Vice President, General Counsel and Secretary

LOEWS CORPORATION
By:	/s/ Gary W. Garson
	Name:	Gary W. Garson
	Title:	Senior Vice President, General Counsel and Secretary
CNA SURETY CORPORATION
By:	/s/ John F. Welch
	Name:	John F. Welch
	Title:	President and Chief Executive Officer

CORRESP

June 3, 2011

VIA EDGAR AND
FACSIMILE

Mellissa Campbell Duru
Securities and Exchange Commission
Division of Corporation Finance
Office of Mergers and Acquisitions
100 F Street, NE
Washington, D.C. 20549-0303

Re:	CNA Surety Corporation Schedule TO-T/A filed by Surety Acquisition Corporation, Continental Casualty Company and The Continental Corporation (the “CNA Group”) Filed May 27, 2011 File No. 005-51709
	Schedule 13e-3 filed by the CNA Group and CNA Surety Corporation and Loews Corporation Filed May 11, 2011 File No. 005-51709

Dear Ms. Duru:

     On behalf of the CNA Group and Loews Corporation (“Loews”) we are providing the following responses to the comments contained in the comment letter of the staff of the Securities and Exchange Commission (the “Commission”), dated June 1, 2011, relating to the Schedule TO-T/A filed by the CNA Group on May 27, 2011 and the Schedule 13E-3 filed by the CNA Group, CNA Surety Corporation (“CNA Surety”) and Loews on May 11, 2011 in connection with Surety Acquisition Corporation’s offer to purchase all of the outstanding shares of CNA Surety not currently owned by CNA Financial Corporation (“CNA Financial”) or any of its subsidiaries. For convenience of reference, we have set forth the text of the staff’s comments below in bold. Capitalized terms used and not defined

Securities and Exchange Commission
June 3, 2011
Page 2

herein have the meanings assigned to such terms in the Offer to Purchase filed as Exhibit (a)(1)(i) to the Schedule TO-T.

In response to the staff’s comments, the CNA Group is transmitting via EDGAR for filing Amendment No. 3 to the Schedule TO-T and the CNA Group, Loews and CNA Surety are transmitting Amendment No. 1 to the Schedule 13E-3.

Schedule 13e-3

1. The Schedule 13e-3 does not incorporate the most recently filed amendments to Schedule TO. Please file an amendment to Schedule 13e-3 to incorporate the amended disclosure documents each time updated information is included in an amended Schedule TO.

In response to the staff’s comments, the CNA Group, Loews and CNA Surety are transmitting via EDGAR Amendment No. 1 to the Schedule 13E-3. The CNA Group and Loews also acknowledge the staff’s request that an amendment to the Schedule 13E-3 be filed each time updated information is included in an amended Schedule TO and confirm that further amendments to the Schedule 13E-3 will be filed in the event that updated information is subsequently included in an amended Schedule TO.

2. We note your response to prior comment 1. As done in your response, revise to clarify in your next amendment that the exhibit is incorrectly dated but consists of the same materials referenced in the Offer to Purchase.

In response to the staff’s comments, the disclosure under Item 16 of the Schedule 13E-3 and the disclosure on page 15 of the Offer to Purchase has been revised.

3. In your response to prior comment 3 and in the Offer to Purchase, you include ambiguous statements regarding the status of Loews as a filing person for Schedule 13e-3. By virtue of Loews filing the Schedule 13e-3, it has acknowledged its status as a filing person. As such, it is inappropriate to imply in your disclosure that Loews could “arguably be considered” or “in the case of Loews,... may be required” to comply with the disclosure requirements set forth in Rule 13e-3. Revise to clarify without qualification throughout that Loews is a filing person for purposes of Schedule 13e-3.

In response to the staff’s comments, the disclosure on page 6 of the Offer to Purchase under the heading “Introduction”, the disclosure on page 13 of the Offer to Purchase under the heading “Purpose of and Reasons for the Offer; Plans for CNA Surety After the Offer and the Merger” and the disclosure on page 14 of the Offer to Purchase under the heading “Position of the CNA Financial Group Regarding Fairness of the Offer and the Merger” has been revised.

Securities and Exchange Commission
June 3, 2011
Page 3

Exhibit (a)(1)(i)
Special Factors, page 9
Background, page 9

4. We partially reissue prior comment 3. In your response to prior comment 2, you indicate that management of CNA Financial also discussed the offer with, and provided updates to, the management of Loews. Revise the background discussion to provide details regarding when these discussions occurred, the material items discussed relating to the terms of the transaction or alternatives being considered and the persons (including any advisors) who were present.

In response to the staff’s comments, the disclosure on pages 9, 11 and 12 of the Offer to Purchase under the heading “Background” has been revised.

5. We partially reissue prior comment 3. Please revise to discuss the benchmarking analysis provided to CNA Financial Group by its financial advisor. We note that required disclosure of the background leading up to the transaction, inclusive of the reasons for engaging in the going private transaction is a separate and distinct requirement from the disclosure requirement regarding the fairness of the transaction. Please separately address how CNA Financial Group considered the benchmarking presentation. Refer generally to Item 7 of Schedule 13e-3 and corresponding Item 1013 (b) and (c) of Regulation M-A.

In response to the staff’s comments, the disclosure on page 11 of the Offer to Purchase under the heading “Background” has been revised.

Position of the CNA Financial Group..., page 14

6. We partially reissue prior comment 5. Further to our comment 3 above regarding the removal of qualifying and ambiguous language, please revise the SCH TO-T/A to state, without qualification, why each filing party is undertaking the going private transaction at this time. In this regard, we note the ambiguous language in the amended Schedule TO filed on May 27, 2011 under the third revision.

In response to the staff’s comments, the disclosure on page 13 of the Offer to Purchase under the heading “Purpose of and Reasons for the Offer; Plans for CNA Surety After the Offer and the Merger” has been revised.

7. We partially reissue prior comments 7 and 9. Please revise to clarify that the CNA Financial Group expressly adopts the analyses in the Schedule 14D-9, as amended. We remind you that if the analyses adopted by CNA Financial Group does not address certain factor(s) listed in Instruction 2 to Item 1014 that were considered by CNA Financial Group, then CNA Financial Group is required to

Securities and Exchange Commission
June 3, 2011
Page 4

provide a reasonably detailed discussion of its own consideration of such factor(s). For example, although the Special Committee’s analyses did not consider the going concern value of CNA Surety, you disclose that CNA Financial Group assessed the fairness of the transaction in relation to “the going-concern value of CNA Surety on a stand-alone basis.” Revise to provide a reasonably detailed discussion of this factor given its apparent relevance to the CNA Financial Group.

In response to the staff’s comments, the disclosure on page 15 of the Offer to Purchase under the heading “Position of the CNA Financial Group Regarding Fairness of the Offer and the Merger” has been revised.

8. We reissue prior comment 10. Please disclose the ratio of earnings to fixed charges as required by Item 1010 (c) of Regulation M-A. Please note that the cross reference to which you refer in your response does not eliminate the disclosure requirements specified in Schedule 13e-3.

In response to the staff’s comments, the disclosure on page 49 of the Offer to Purchase under the heading “Selected Financial Information” has been revised.

* * * * * * * *

Attached hereto as Exhibit A is the written acknowledgement requested by the staff.

Please call Gary Horowitz at (212) 455-7113 or Christopher May at (212) 455-7572 with any additional questions you may have or if you wish to discuss the above responses.

Very truly yours,

/s/ Gary Horowitz

Gary Horowitz

cc: Jonathan Kantor, Esq.
Stathy Darcy, Esq.

EXHIBIT A

ACKNOWLEDGEMENT

     Each of the undersigned acknowledges that:

• it is responsible for the adequacy and accuracy of the disclosure in the filings;

• staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filings; and

• it may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

SURETY ACQUISITION CORPORATION
By:	/s/ Jonathan D. Kantor Jonathan D. Kantor
	Executive Vice President, General Counsel and Secretary
CNA FINANCIAL CORPORATION
By:	/s/ Jonathan D. Kantor Jonathan D. Kantor
	Executive Vice President, General Counsel and Secretary
CONTINENTAL CASUALTY COMPANY
By:	/s/ Jonathan D. Kantor Jonathan D. Kantor
	Executive Vice President, General Counsel and Secretary
THE CONTINENTAL CORPORATION
By:	/s/ Jonathan D. Kantor Jonathan D. Kantor
	Executive Vice President, General Counsel and Secretary
LOEWS CORPORATION
By:	/s/ Gary W. Garson Gary W. Garson
	Senior Vice President, General Counsel and Secretary