Continental Assurance Company

(3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):

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

You are hereby notified that, pursuant to the regulations for government of Continental Assurance Company Separate Account (B), the 2006 Annual Meeting of its Participants will be held in Room 204S, CNA Center, 333 South Wabash Avenue, Chicago, Illinois, on April 28, 2006, at 10:00 A.M., Chicago Time, for the following purposes:

Only Participants of record at the close of business on both February 23, 2006 and on the date of the meeting are entitled to notice of and to vote at the meeting.

It is important that as many Participants as practicable be represented at the meeting. Consequently, whether or not you expect to be present, you are requested to date and sign the enclosed Proxy and return it promptly.

The accompanying Proxy is solicited on behalf of the Committee of Continental Assurance Company Separate Account (B) (“Separate Account(B)”) to be voted at the 2006 Annual Meeting of Participants in Separate Account(B) (“Participants”) to be held on April 28, 2006, at 10:00 A.M., Chicago Time, in Room 204S, CNA Center, 333 South Wabash Avenue, Chicago, Illinois, and at any and all adjournments thereof (the “Annual Meeting”). Proxies will be voted as specified. However, if no contrary specifications are made in a proxy, it will be voted for proposals 1, 2 and 3 hereinafter set forth. Abstentions are considered as shares present and entitled to vote and therefore have the same legal effect as a vote against a matter presented at the meeting. Each Proxy may be revoked at any time before its exercise by the execution of a subsequent Proxy and the delivery thereof to the Secretary of the Committee at CNA Center, Chicago, IL 60685 or by written notice to the Secretary of the Committee at the CNA Center, Chicago, IL 60685 address, and any Participant attending the meeting may vote in person whether or not he has previously executed a Proxy.

This Proxy Statement and the Proxy were first sent to the Participants of Separate Account (B) on or about March 1, 2006. This solicitation is being made by use of the mails, but further solicitations may be made by mail, telephone, telecopier or personal interview. The cost of soliciting Proxies will be paid by the investment adviser to Separate Account (B), Continental Assurance Company (“CAC”), CNA Center, Chicago, Illinois 60685, as one of the items of expense for which CAC receives a monthly service fee (at the annual rate of 0.33% of the average daily net asset value of Separate Account (B)) from Separate Account (B) pursuant to CAC’s Investment Advisory Agreement with Separate Account (B). See “Approval of the Continuation of the Investment Advisory Agreement with Continental Assurance Company”.

There are 1,712,588 votes eligible to be cast by the Participants. Each Participant who is a Participant on both February 23, 2006 (at the close of business) and on the date of the Annual Meeting is entitled to vote at the Annual Meeting. A Participant is entitled to cast the number of votes equal to (1) if not retired, the number of accumulation units held by such Participant under the particular contract concerned, or (2) if retired, a number equal to the monetary value of the actuarial reserve maintained by CAC in Separate Account (B) for the annuity of that Participant divided by the monetary value of an accumulation unit.

Separate Account (B)’s 2005 annual report is included in this mailing. Any Participant who desires additional copies may obtain them without charge upon written request to the Secretary of the Committee at the above address or by calling the above phone number.

Participant proposals for inclusion in proxy materials for the 2007 Annual Meeting of Participants should be addressed to the Secretary of the Committee at the above address, and must be received by December 15, 2006. If a Participant intends to present a proposal at the 2007 Annual Meeting of Participants but does not seek inclusion of that proposal in Separate Account (B)’s proxy statement for that meeting, the proxy holders for that meeting will be entitled to exercise discretionary authority on that proposal if Separate Account (B) has not received notice of the proposal by January 25, 2007. If notice of any such proposal is timely received, the proxy

holders may exercise discretionary authority with respect to such proposal only to the extent permitted by the regulations of the Securities and Exchange Commission.

The regulations for government of Separate Account (B) provide for a Committee of five members, to be elected annually by ballot at the Annual Meeting of Participants to serve until the next Annual Meeting of Participants or until their successors have been elected and qualified. The persons named on the enclosed Proxy are committed to cast the votes represented by the proxies given to them for the five nominees hereinafter named, (Messrs. Fox, Hemme and Wrenn and Mmes. McGirr and Nielsen are now serving as Committee Members), if no contrary instruction is indicated in the Proxy. In order for such nominees to be elected, they must receive the affirmative votes of Participants eligible to cast at least a majority of the votes which may be cast by Participants present at the Annual Meeting in person or by proxy. All of the nominees listed below have consented to serve if elected. The Committee presently knows of no reason why any of the nominees listed below will be unable to serve if elected. If any one or more nominees become unavailable to serve as Committee Members, the persons named in the Proxy will vote for such persons as the present Committee may select. The following information is furnished with respect to the five persons nominated for election as Committee Members, none of whom is a Participant in Separate Account (B):

Given the size of Separate Account (B), the Committee does not have a standing Nominating Committee or a Nominating Charter. The Committee believes the disinterested Committee Members are capable of performing the functions of the Nominating Committee and, therefore, perform such functions. The disinterested Committee Member consider nominations for Committee Members from Participants, as well as other Committee Members, and any other sources it deems reasonable. The disinterested Committee Members, to serve the best interests of the participants, carefully review the qualifications of each nominee and determine which nominees should be submitted to a vote of the participants at the Annual Meeting. Participants may nominate Committee Members by submitting nominations to the Secretary of the Committee at the address set forth on the top of page 1. Messrs. Fox and Wrenn and Ms. Nielsen serve as members of the Audit Committee. The Audit Committee is responsible for administering Separate Account (B)’s policies in matters of accounting and control in its oversight of

Separate Account (B)’s financial reporting process. The Audit Committee meets with the independent registered public accounting firm at least annually to review the financial statements and the independent registered public accounting firm’s opinion as to its conformity with accounting principles generally accepted in the United States of America. In addition, the Audit Committee considers the independence of and hires the independent registered public accounting firm. The Audit Committee performs its duties in accordance with the Audit Charter.

The Committee held four meetings in 2005. Each current Committee Member attended 100% of such meetings. While there is no formal policy regarding attendance at the Annual Meeting of Participants, each current Committee Member attended the Annual Meeting of Participants held on April 22, 2005.

Communications to the Committee, including nominations for Committee Members, should be addressed to the Secretary of the Committee at the address set forth on the top of page 1. The Secretary of the Committee will relay all communications to the Committee Members by the next upcoming meeting of the Committee.

No nominee to serve as a Committee Member has served as an officer of Separate Account (B) or CAC or had any other material interest in or relationship with, or purchased securities from, Separate Account (B), CAC or any of their respective affiliates during the past five years, except as noted above in the table listing the nominees for election as Committee Members of Separate Account (B).

No Committee Member or officer receives any remuneration from Separate Account (B). CAC pays Committee Members a fee for their service. The Committee Member’s fee is currently $10,000 per annum. CAC also reimburses Committee Members for expenses incurred in attending meetings of the Committee. However, no payments of fees or expenses are made to any Committee Member who is an officer or employee of or special consultant to CAC, CNA Financial or any of their affiliated companies. Therefore, neither Mr. Hemme nor Ms. McGirr has received or will receive any such payments. During 2005, no reimbursements were made for expenses incurred by Committee Members.

The payment of fees to Committee Members is one of the items of expense for which CAC receives a monthly investment advisory fee (at the annual rate of 0.5% of the average daily net asset value of Separate Account (B)) from Separate Account (B) pursuant to CAC’s Investment Advisory Agreement with Separate Account (B). See “Approval of the Continuation of the Investment Advisory Agreement with Continental Assurance Company”.

The following table sets forth information regarding the compensation of all Committee Members of Separate Account (B) for services rendered in 2005 to Separate Account (B) and to funds deemed to be included in the same fund complex as Separate Account (B). A “fund complex” for this purpose means any two or more funds that hold themselves out to investors as related companies or that have a common or related investment adviser.

Separate Account (B) has three executive officers: Lynne Gugenheim, Dennis R. Hemme, and Marilou R. McGirr. Ms. Gugenheim is 46 years old and has been Secretary of the Committee since April 1995. Since March 2000, she has been Senior Vice President and Deputy General Counsel of CAC and Casualty. From January 1996 to March 2000, she was Vice President and Associate General Counsel of CAC and Casualty. Information regarding Mr. Hemme and Ms. McGirr is contained in the table on pages 2 and 3 of this Proxy Statement. The officers of Separate Account (B) are elected annually for terms of one year or until their respective successors are elected and qualified.

At a meeting held for such purpose on January 30, 2006, the Committee, including a majority of the members who are not “interested persons” (as defined in Section 2(a)(19) of the 1940 Act) of Separate Account (B) or CAC, by votes cast in person, approved the continuation of the Restated and Amended Investment Advisory Agreement, dated May 1, 1981 (the “Advisory Agreement”), between CAC and Separate Account (B) for the current year and decided, as a matter of policy, to submit such continuation to a vote of the Participants. The Participants approved the continuation of the Advisory Agreement for calendar year 2005 at the Annual Meeting of Participants on April 22, 2005.

For the Advisory Agreement to remain in effect, it must be approved by a majority of the outstanding voting securities of Separate Account (B). A majority, for such purposes, means the lesser of (a) 67% of the votes which may be cast by the Participants of Separate Account (B) present at a meeting in person or by proxy if Participants holding more than 50% of the votes which may be cast by all Participants are present in person or by proxy, or (b) more than 50% of the votes which may be cast by all Participants.

A copy of the Advisory Agreement is attached hereto as Exhibit A. If approved by a majority (as defined above) at the Annual Meeting, the Advisory Agreement will continue from year to year thereafter so long as such continuance is specifically approved at least annually by (1) the Committee or the vote of a majority (as defined above) of the outstanding voting securities of Separate Account (B) or (2) the vote of a majority of the Committee Members who are not “interested persons” (as defined in Section 2(a)(19) of the 1940 Act) of Separate Account (B) or CAC cast in person at a meeting called for the purpose of voting upon such approval.

The Advisory Agreement, by law, will terminate automatically in the event of its assignment. In addition, it is terminable at any time, without penalty, by the Committee or by the vote of a majority (as defined above) of the outstanding voting securities of Separate Account (B) on 60 days’ written notice to CAC or by CAC on 60 days’ written notice to Separate Account (B).

CAC is a wholly-owned subsidiary of Casualty, which, in turn, is a wholly-owned subsidiary of The Continental Corporation, a New York corporation, which, in turn, is a wholly owned subsidiary of CNA Financial. CAC is a stock life insurance company organized under the Illinois Insurance Code in 1911 and is an investment adviser registered under the Investment Advisers Act of 1940. As of December 31, 2005, CAC reported in its consolidated financial statements total assets of approximately $5.1 billion and equity of approximately $0.6 billion. CAC operates four other separate accounts which had total assets aggregating approximately $2.4 billion as of December 31, 2005. CAC is also the administrator for Separate Account (B).

Loews Corporation, a Delaware corporation, 667 Madison Avenue, New York, New York 10021-8087, with interests in insurance, hotels, watches and other timing devices, drilling rigs and tobacco, owned approximately 91% of the outstanding voting stock of CNA Financial.

Pursuant to the Advisory Agreement, the Company provides Separate Account (B) with an investment program. The investment program complies with the investment objectives, policies and restrictions of Separate Account (B) and, in carrying out such program, CAC makes the investment decisions of Separate Account (B) and is responsible for the investment and reinvestment of Separate Account (B)’s assets. CAC performs research, statistical analysis and continuous supervision of Separate Account (B)’s investment portfolio, and CAC also furnishes office space for Separate Account (B) and pays the compensation of the Committee Members not employed by CAC (as set forth in the chart on page 3) and the salaries of the Committee Members who are employed by CAC. In return for its advisory services, Separate Account (B) pays CAC a fee at an annual rate of 0.5% of the average daily net asset value of Separate Account (B). Fees were accrued to CAC from Separate Account (B) during the past three years as follows: 2005, $241,836; 2004, $410,892 and 2003, $524,266. Although the fee is payable monthly, to date CAC has, with its consent, been paid quarterly. Separate Account (B)’s net assets on December 31, 2005, 2004 and 2003 were $42,248,005, $52,837,540 and $110,781,711, respectively. The Advisory Agreement does not require employees of CAC to devote their exclusive efforts to Separate Account (B)’s business, and it is expected that they will provide investment management services for CAC’s other accounts and for CNA Financial and its affiliates.

CAC performs various services for Separate Account (B) in addition to those described above related to Separate Account (B)’s investment program (as set forth in Section 2 of the Advisory Agreement). As partial compensation for such services, a service fee is paid by Separate Account (B) to CAC. Under the Advisory Agreement, the service fee is paid at the annual rate of 0.33% of the average daily net asset value of Separate Account (B). The service fee is payable at the established rate regardless of the actual amount of such expenses incurred; therefore, if such expenses are less than the fee, the difference accrues to CAC as a profit and if such expenses are more than the fee, the difference accrues to CAC as a loss. For 2005, 2004 and 2003, the total service fees were $159,612, $271,188 and $346,016, respectively. Although the fee is payable monthly, to date CAC has, with its consent, been paid quarterly.

If the continuation of the Advisory Agreement is approved by the Participants of Separate Account (B), the Advisory Agreement will continue in effect. If the continuation of the Advisory Agreement is not approved by the Participants of Separate Account (B), the assets of Separate Account (B) will be liquidated.

Before approving the continuation of the Advisory Agreement, the Committee Members of Separate Account (B) reviewed the material factors relating to its evaluation of CAC and the Advisory Agreement.

The Committee Members examined the performance of Separate Account (B) in relation to its unit value over various periods of time and in comparison to other comparable separate accounts and the Standard & Poor’s 500 composite index (with dividend reinvestment). The Committee Members noted that Separate Account (B) had outperformed the S&P 500/Citigroup Growth Index^® (formerly known as the S&P 500/Barra Growth Index^®) for calendar years 2004 and 2005. In addition, the Committee Members reviewed the list of and cost for services provided by CAC and compared them to services and costs of investment advisers of other separate accounts of various sizes, determining that CAC’s services and costs compared favorably to the other separate accounts. The Committee Members also noted that CAC receives research services from brokerage firms at no additional cost to CAC or Separate Account (B). The Committee Members decided that Separate Account (B) benefits from its association with CAC by having these services available to be used by CAC in its management of Separate Account (B)’s portfolio as well as CAC’s other accounts. The Committee Members also considered the fact that CAC is in run-off and the effect that this would have on its ability to advise Separate Account (B) effectively. The Committee Members noted that the net assets of Separate Account (B) were expected to decrease over the upcoming years. The Committee noted that since Separate Account (B) is not expected to increase its net asset size and was the only fund that CAC advised, Separate Account (B) could potentially obtain some economies of scale with another advisor that managed multiple funds. The Committee Members pointed out that CAC had a favorable history and relationship with Separate Account (B), a good reputation, and strong qualifications of CAC’s personnel, and that other advisors may not be willing or able to provide the same level of services CAC currently provides at the same or a more favorable rate. The Committee Members also took note of the fact that the participants overwhelmingly voted to approve the Advisory Agreement with CAC at the prior year’s Annual Meeting of Participants. At the conclusion of its review of these factors, the Committee Members approved the continuation of the Advisory Agreement on its present terms and conditions. The Committee Members unanimously recommend that the Participants of Separate Account (B) vote FOR approval of this proposal.

The rate of portfolio turnover for Separate Account (B) during the past three years has been as follows: 2005, 48%; 2004, 52% and 2003, 57%. Separate Account (B) paid brokerage fees and commissions in connection with portfolio transactions in the following aggregate amounts during the past three years: 2005, $104,782; 2004, $257,130 and 2003, $367,881. In selecting brokers to execute portfolio transactions, CAC’s primary criterion is the expected ability of such brokers to make the best possible execution of orders. If several brokers are expected to be able to provide equally good execution, preference is given to those brokers who provide statistical research, assistance in pricing portfolio securities, or other services. Commissions on all transactions are negotiated, and the primary basis of the commission agreed to by CAC is the quality of execution. Research services, to the extent provided to CAC, may be used by CAC in servicing its other accounts, and not all such services are used in connection with Separate Account (B).

In connection with the purchase and sale of portfolio securities for Separate Account (B), CAC does not bunch orders for such transactions with orders for other accounts under the management of CAC, CNA Financial or other subsidiaries of CNA Financial or Loews.

Under a separate agreement with Separate Account (B), CNA Investor Services, Inc. (“Investor Services”), an affiliate of CAC, acts as principal underwriter. CAC pays Investor Services an annual fee of $5,000 to perform underwriting services for Separate Account (B). Under a separate agreement with Separate Account (B), CAC performs all administrative functions relative to Separate Account (B) and the variable annuity contracts of Separate Account (B). The amounts earned by CAC for sales and administrative functions rendered to Separate Account (B) for each of the years 2005, 2004 and 2003 were $4,364, $5,730 and $6,612, respectively. The agreement covering sales and administrative services does not cover the services covered by the Advisory Agreement.

CAC and Separate Account (B) are parties to an agreement under which Separate Account (B) receives credit from CAC in the form of a reduction of the investment advisory fee to the extent that services of Investor Services (the successor by merger to CNA Securities Corp. and a member of the National Association of Securities Dealers, Inc.) are utilized in connection with Separate Account (B)’s portfolio transactions. In 1975, the securities laws were amended to abolish fixed brokerage commissions on securities transactions. Prior to such changes, it was mutually advantageous to Separate Account (B) and to CNA Securities Corp. for the services of CNA Securities Corp. to be utilized in connections with certain of Separate Account (B)’s portfolio transactions. The advantage of such arrangement was reduced significantly by the above-mentioned changes in the securities laws. Separate Account (B) had no portfolio transactions with Investor Services during 2005, 2004 and 2003.

The JPMorgan Trust Company, N.A. acts as custodian for Separate Account (B). The custodian performs no managerial or policy making functions for Separate Account (B).

The names, addresses and principal occupations of the directors and executive officers of CAC are as follows:

3. Ratification of Selection of Independent Registered Public Accounting Firm

The Audit Committee is responsible for administering Separate Account (B)’s policies in matters of accounting and control in its oversight of Separate Account (B)’s financial reporting process. CAC is responsible for the preparation, presentation and integrity of Separate Account (B)’s financial statements, Separate Account (B)’s accounting and financial reporting principles and internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. The independent registered public accounting firm is responsible for auditing Separate Account (B)’s financial statements and expressing an opinion as to their conformity with accounting principles generally accepted in the United States of America. The Audit Committee met one time in 2005.

In the performance of its oversight function, the Audit Committee has considered and discussed the audited financial statements with management and the independent registered public accounting firm. The Audit Committee has also discussed with the independent registered public accounting firm the matters required to be

discussed by Statement on Auditing Standards No. 61, Communication with Audit Committees, as currently in effect. Finally, the Audit Committee has received the written disclosures and the letter from the independent registered public accounting firm required by Independence Standards Board Standard No. 1, as currently in effect, has also received written confirmations from management with respect to non-audit services provided by the independent registered public accounting firm and has considered whether the provision of such services by the independent registered public accounting firm to Separate Account (B) is compatible with maintaining the independent registered public accounting firm’s independence. The Audit Committee has discussed with the independent registered public accounting firm the independent registered public accounting firm’s independence.

The members of the Audit Committee are not professionally engaged in the practice of auditing or accounting and are not experts in the fields of accounting or auditing, including in respect of the independent registered public accounting firm’s independence. Members of the Audit Committee rely without independent verification on the information provided to them and on the representations made by management and the independent registered public accounting firm. Accordingly, the Audit Committee’s oversight does not provide an independent basis to determine that management has maintained appropriate accounting and financial reporting principles or appropriate internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. Furthermore, the Audit Committee’s considerations and discussions referred to above do not assure that the audit of Separate Account (B)’s financial statements has been carried out in accordance with the standards of the Public Company Accounting Oversight Board (United States), that the financial statements are presented in accordance with accounting principles generally accepted in the United States of America or that Separate Account (B)’s independent registered public accounting firm is in fact “independent”.

Based upon the reports and discussions described in this report, and subject to the limitations on the role and responsibilities of the Audit Committee referred to above, the Audit Committee recommended that the audited financial statements be included in Separate Account (B)’s Annual Report for the year ended December 31, 2005 filed with the Securities and Exchange Commission.

At a meeting held on February 15, 2006, the Audit Committee selected Deloitte & Touche LLP as the independent registered public accounting firm for Separate Account (B) for the fiscal year ending December 31, 2006. Although not required by the 1940 Act, the Audit Committee submits such selection to the Participants for ratification or rejection at the Annual Meeting. Ratification requires the affirmative votes of Participants eligible to cast at least a majority of the votes which may be cast by Participants present at the meeting in person or by proxy. Deloitte & Touche LLP also served as independent registered public accounting firm for Separate Account (B) for the fiscal years of Separate Account (B) ended December 31, 2005 and 2004. Deloitte & Touche LLP are the independent registered public accounting firm for CAC and for CNA Financial and Loews. It has no other relationship, financial or otherwise, with Separate Account (B) or CAC. Representatives of Deloitte & Touche LLP are expected to be present at the Annual Meeting with the opportunity to make a statement if they desire to do so, and such representatives will be available to respond to appropriate questions.

The aggregate fees, including expenses reimbursed, billed by Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates (collectively, “Deloitte”), which includes Deloitte Consulting, for professional services rendered for the audit of Separate Account (B)’s annual financial statements

for the fiscal years ended December 31, 2005 and 2004 were $34,000 and $26,000, respectively. The aggregate fees billed for the audit of CAC and other entities under common control with CAC that provide ongoing services to Separate Account (B) for annual financial statements for the fiscal years ended December 31, 2005 and 2004 and for the reviews of the financial statements included in the Company’s Quarterly Reports on Form 10-Q were $12.1 million and $12.3 million, respectively.

There were no fees, including expenses reimbursed, billed by Deloitte for Audit-Related services for fiscal years ended December 31, 2005 and 2004 for Separate Account (B). The aggregate fees billed for Audit-Related services for CAC and other entities under common control with CAC that provide ongoing services to Separate Account (B) for the fiscal years ended December 31, 2005 and 2004 were $0.3 million and $1.4 million, respectively. These fees generally include fees for consents and comfort letters, audits of employee benefit plans, accounting consultations, Sarbanes Oxley Act Section 404 advisory services, and SEC related matters.

There were no fees, including expenses reimbursed, billed by Deloitte for Tax services for fiscal years ended December 31, 2005 and 2004 for Separate Account (B). The aggregate fees billed for CAC and other entities under common control with CAC that provide ongoing services to Separate Account (B) for Tax services for the fiscal years ended December 31, 2005 and 2004 were $0.1 million and $0.2 million, respectively. These fees generally include fees for the preparation of expatriate tax returns.

There were no other fees, including expenses reimbursed, billed by Deloitte for professional services rendered for fiscal years ended December 31, 2005 and 2004 for Separate Account (B) other than the services described above under “Audit Fees.” The aggregate fees for CAC and other entities under common control with CAC that provide ongoing services to Separate Account (B) for services not included above were $0 and $0.5 million, respectively, for the fiscal years ended December 31, 2005 and 2004, including fees billed by Deloitte Consulting. These fees generally include fees for human capital advisory services, risk consulting services and other consulting or advisory services.

Certain fees for 2004 have been adjusted to reflect additional amounts for audit and audit related services performed and billed subsequent to the issuance of the 2004 Proxy Statement.

The Audit Committee has established a pre-approval policy with regard to auditing services and permitted non-audit services (including the fees and terms thereof) to be performed for Separate Account (B) by its independent registered public accountants, subject to certain de minimis exceptions for non-audit services which are approved by the Audit Committee prior to the completion of the audit. Under this policy, the Audit Committee annually pre-approves certain limited, specified recurring services which may be provided by Deloitte & Touche LLP. All other engagements for services to be performed by Deloitte & Touche LLP for Separate Account (B) must be separately pre-approved by the Audit Committee. The Audit Committee may also form and delegate authority to subcommittees consisting of one or more members when appropriate, including the authority to grant pre-approvals of audit and permitted non-audit services, provided that decisions of such subcommittee to grant pre-approvals shall be presented to the full Audit Committee at its next scheduled meeting.

All of the fees set forth above related to Separate Account (B) have been approved by the Audit Committee in accordance with its approval procedures.

As of the date of this Proxy Statement, the Committee does not know of any other business to come before the meeting. However, if any matters other than those referred to above come before the meeting, the persons named in the Proxy will vote thereon in accordance with their best judgment.

RESTATED AND AMENDED AGREEMENT made this 1st day of May, 1981 by and between CONTINENTAL ASSURANCE COMPANY SEPARATE ACCOUNT (B) (the “Separate Account”) and CONTINENTAL ASSURANCE COMPANY (the “Company”).

1. The Company will furnish the Separate Account with investment advisory services, statistical services, research facilities and services, will supervise the composition of the Separate Account’s portfolio continuously and will effect such changes therein as the Company deems advisable, including the nature, timing and manner of effectuating such changes. The Company, at its own expense, shall furnish office space to the Separate Account and shall pay the salaries and fees of Officers and Committee Members of the Separate Account. The compensation for those services shall be an investment advisory fee payable monthly, computed at the annual rate of 1/2 of 1% of the average daily net asset value of the Separate Account.

2. The Company shall bear the following expenses of the Separate Account and shall be compensated as provided below:

(a) All costs and expenses incident to compliance with federal and state regulations applicable to any public offering of Investment Units of the Separate Account, for cash or otherwise, including those relating to the registration of Investment Units under the Securities Act of 1933, as amended, the qualification of Investment Units under state securities laws, the printing or other reproduction and distribution of any registration statement (and all amendments thereto) under the Securities Act of 1933, as amended, the preliminary and final prospectuses included therein (to the extent such prospectuses are distributed to persons who, at the time of the distribution of such prospectuses, are participants in the Separate Account) and any other necessary documents required by federal and state regulations applicable to any such public offering;

(b) All fees involved in registering and maintaining registrations of the Separate Account and of its Investment Units with the Securities and Exchange Commission under the Investment Company Act of 1940, as amended;

(c) All charges and expenses of any custodian appointed by the Separate Account for the safekeeping of its cash, portfolio securities and other property, other than fees and expenses relating to the lending of portfolio securities;

(e) All expenses of meetings of the participants and of the Committee and of preparing, printing and mailing proxy statements and quarterly, semi-annual and annual reports to participants;

(f) All charges and expenses of legal counsel in connection with matters relating to the Separate Account, including without limitation, legal services rendered in connection with the Separate Account’s registrations and qualifications of securities under federal, state and other laws;

(g) All the expenses of keeping the general accounts and records of the Separate Account; and

(h) All postage expenses of the Separate Account (other than those relating to the mailing of prospectuses to persons who, at the time of such mailing, are not participants in the Separate Account and to the mailing of sales literature).

As compensation for bearing the expenses set forth in this paragraph, the Company shall be paid a monthly service fee by the Separate Account, computed at the annual rate of 0.33 of 1% of the average daily net asset value of the Separate Account.

3. The Company shall bear, without compensation, the following expenses of the Separate Account:

(a) All costs and expenses relating to the printing or other reproduction and distribution of preliminary and final prospectuses to persons who, at the time of the distribution of such prospectuses, are not participants in the Separate Account;

(b) All costs and expenses relating to the advertising of Investment Units of the Separate Account, including without limitation, the overhead allocated to the supervision of brokers and dealers selling Investment Units and the printing and mailing of sales literature;

(c) All costs and expenses relating to the printing or other reproduction and distribution of any underwriting documents incident to a public offering of Investment Units of the Separate Account, and review by the National Association of Securities Dealers, Inc. of any underwriting arrangement; and

(d) All other expenses primarily intended to result in the sale of Investment Units of the Separate Account.

4. Notwithstanding the provisions of Section 1 hereof, the Separate Account shall pay all fees and expenses attributable to the lending of its portfolio securities.

5. This Agreement shall not be materially amended without the affirmative vote or written consent of the holders of a majority of the outstanding Investment Units of the Separate Account.

6. This Agreement may be terminated at any time by either party, without the payment of any penalty, on sixty days written notice. Such action may be taken by the Company or by either the Committee of the Separate Account or the holders of a majority of its outstanding Investment Units.

8. This Agreement shall become effective at the close of business on May 1, 1981 and shall continue in force for one year from such date and indefinitely thereafter, but only so long as the continuance after such year shall be specifically approved at least annually by the vote of a majority of the members of the Committee of the Separate Account who are not parties to the Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval.

IN WITNESS WHEREOF, the Separate Account and the Company have caused this Agreement to be duly executed the day and year above written.


CONTINENTAL ASSURANCE COMPANY
SEPARATE ACCOUNT (B)

By:		DONALD C. RYCROFT
		Chairman


CONTINENTAL ASSURANCE COMPANY

By:		DONALD C. RYCROFT
		Vice President

PROXY SOLICITED BY THE COMMITTEE FOR THE ANNUAL MEETING OF PARTICIPANTS, APRIL 28, 2006

Lynne Gugenheim, Dennis R. Hemme, and Marilou R. McGirr or any of them (the “Proxies”), with full power of substitution, are hereby authorized to represent the undersigned and cast the votes of the undersigned as fully as the undersigned could do if personally present at the 2006 Annual Meeting of Participants of Continental Assurance Company Separate Account (B) to be held in Room 204S, CNA Center, 333 South Wabash Avenue, Chicago, Illinois at 10:00 A.M. Chicago Time on April 28, 2006 and at any and all adjournments thereof, upon the following matters:

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED PARTICIPANT. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3.

To date, a signed proxy card has not been received from you for the Annual Meeting of Participants to be held on April 28, 2006. As it is important that as many Participants as possible cast their votes, a duplicate proxy notice has been printed on the reverse side and a return envelope has been enclosed.

If you would like a duplicate copy of the proxy statement, please call (800) 351-3001.


¨	Preliminary proxy statement	¨	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

x	Definitive proxy statement

¨	Definitive additional materials

¨	Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12 Continental Assurance Company Separate Account (B)



x		No fee required.

¨		Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1)		Title of each class of securities to which transaction applies:


Name, Address and Age	Position(s) Held with Fund	Term of Office and Length of Time Served	Principal Occupation(s) During the Last 5 years	Number of Portfolios in Fund Complex Overseen by Director or Nominee for Director	Other Directorships Held by Director or Nominee
Disinterested Committee Members

Richard T. Fox CNA Center Chicago, Illinois 60685 Age - 68	Committee Member	One Year Nineteen Years	Financial Consultant	One	None

Petrine J. Nielsen CNA Center Chicago, Illinois 60685 Age - 65	Committee Member	One Year Two Years	Retired since June 2003; Senior Vice President of Computershare, Inc. from April 2000 until June 2003; prior thereto Senior Vice President of Harris Trust and Savings Bank.	One	None

Peter J. Wrenn CNA Center Chicago, Illinois 60685 Age - 70	Committee Member	One Year Eighteen Years	Chairman and Treasurer of Hudson Technology, Inc. (tooling and manufacturing) since January 2004; prior thereto President of Hudson Technology, Inc.	One	None


Name, Address and Age	Position(s) Held with Fund	Term of Office and Length of Time Served	Principal Occupation(s) During the Last 5 years	Number of Portfolios in Fund Complex Overseen by Director or Nominee for Director	Other Directorships Held by Director or Nominee
Interested Committee Members and Executive Officers*

Dennis R. Hemme CNA Center Chicago, Illinois 60685 Age - 51	Committee Member and Chairman	One Year Three Years	Vice President and Treasurer of CAC and Continental Casualty Company (“Casualty”) since September 2003; prior thereto; Assistant Vice President of CAC and Casualty.	One	None

Marilou R. McGirr CNA Center Chicago, Illinois 60685 Age - 52	Committee Member and Portfolio Manager	One Year Eight Years	Vice President and Assistant Treasurer of CAC and Casualty since September 2003; prior thereto; Vice President of CAC and Casualty; Portfolio Manager of Separate Account (B) since September 2002.	One	None


Compensation Table

Name of person, position	Aggregate compensation from fund	Pension or retirement benefits accrued as part of fund expenses	Estimated Annual benefits upon retirement	Total compensation from fund and fund complex paid to directors
Richard T. Fox, Committee Member	$10,000	None	None	$10,000
Dennis R. Hemme, Committee Member*	None	None	None	None
Marilou R. McGirr, Committee Member*	None	None	None	None
Petrine J. Nielsen, Committee Member	$10,000	None	None	$10,000
Peter J. Wrenn, Committee Member	$10,000	None	None	$10,000



(2)		Aggregate number of securities to which transaction applies:


Name of Director or Nominee	Dollar Range of Equity Securities in the Fund	Aggregate Dollar Range of Equity Securities in All Funds Overseen or to be Overseen by Director or Nominee in Family

Disinterested Committee Members

Richard T. Fox	$0	$0
Petrine J. Nielsen	$0	$0
Peter J. Wrenn	$0	$0

Interested Committee Members and Executive Officers*
Dennis R. Hemme	$0	$0
Marilou R. McGirr	$0	$0


Name and Address	Principal Occupation	Director Since

Stephen W. Lilienthal. CNA Center Chicago, Illinois 60685	Chairman, Chief Executive Officer & President	2001

James R. Lewis CNA Center Chicago, Illinois 60685	President & Chief Executive Officer, Property & Casualty Operations	2004

Thomas Pontarelli. CNA Center Chicago, Illinois 60685	Executive Vice President, Chief Administration Officer	2000

Jonathan D. Kantor CNA Center Chicago, Illinois 60685	Executive Vice President, General Counsel & Corporate Secretary	1999

Michael Fusco CNA Center Chicago, Illinois 60685	Executive Vice President, Chief Actuary	NA

Peter W. Wilson CNA Center Chicago, Illinois 60685	Executive Vice President, Global Specialty Lines	NA

John P. Golden CNA Center Chicago, Illinois 60685	Executive Vice President, Information Technology & Business Processing	NA

D. Craig Mense. CNA Center Chicago, Illinois 60685	Executive Vice President & Chief Financial Officer	2004

Lori S. Komstadius CNA Center Chicago, Illinois 60685	Executive Vice President, Human Resources	NA

Janet D. Frank CNA Center Chicago, Illinois 60685	Executive Vice President, Field Operations	NA


Dated ____________________________, 2006				Please sign exactly as name appears below. When ownership is by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by President or other authorized officer. If a partnership, please sign in partnership name by authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY, USING THE ENCLOSED ENVELOPE.

				Signature


				Signature, if owned jointly


(INSTRUCTION:		To withhold authority to vote for one or more of the individual nominees, write the nominee’s name on the line provided below)



(4)		Proposed maximum aggregate value of transaction:



(5)		Total fee paid:



(1)		Amount previously paid:



(3)		Filing party: