Phoenix to Acquire Variable Life and Annuity Business from CNA.

Business Editors

The Phoenix Companies, Inc. (NYSE: PNX) and CNA Financial Corporation (NYSE: CNA) today announced a binding agreement for Phoenix to acquire the variable life and variable annuity business of Valley Forge Life Insurance Company (VFL) through a coinsurance arrangement.

The business comprises more than 12,600 contracts with a total account value of approximately $624 million as of March 31, 2002. PHL Variable Insurance Company, a subsidiary of The Phoenix Companies, Inc., will acquire 100 percent of the economic interest in the business through coinsurance, and expects to enter into an administrative service agreement with VFL.

The transaction is planned to be effective July 1, 2002, and, subject to regulatory approval, is expected to close within the third quarter. VFL intends to continue to administer the contracts during a transition period after the closing. Further terms of the transaction were not disclosed. The transaction is not expected to result in a material gain or loss to CNA.

"This acquisition is in keeping with our strategy to add scale to our core life and annuity operations through organic growth and strategic, accretive acquisitions," said Dona D. Young, Phoenix president and chief operating officer.

"We are very pleased to have Phoenix acquire our variable life and variable annuity businesses," said David Stone, senior vice president of CNA Retirement Services. "As we previously announced last December, the sale of this business allows us to focus more on our core business strategies within CNA's Life and Group Operations. We are proud of our variable business staff members, who have continued to exhibit strong dedication and professionalism as well as high-quality service to our customers throughout this process."

The Phoenix Companies, Inc. (NYSE: PNX) is a leading provider of wealth management products and services to individuals and institutions. Through a variety of advisors and financial services firms, Phoenix helps the affluent and high net worth accumulate, preserve and transfer their wealth with an innovative portfolio of life insurance, annuity and investment management products and services. With a history dating to 1851, The Phoenix Companies, Inc. has two principal operating subsidiaries, Phoenix Life Insurance Company and Phoenix Investment Partners, Ltd., and offers trust services through another subsidiary, Phoenix National Trust Company. Phoenix has corporate offices in Hartford, Conn. For more information on Phoenix, visit www.phoenixwm.com.

CNA is a leading insurance organization offering a broad range of insurance products and insurance-related services in the property-casualty, life, group and reinsurance markets. Visit CNA at www.cna.com. CNA is a registered service mark, trade name and domain name of CNA Financial Corporation.

Forward-Looking Statement

The statements contained in this press release, which are not historical facts, are forward-looking statements. When included in this press release, the words "believes," "expects," "intends," "anticipates," "estimates," "may," "should" and analogous expressions are intended to identify forward-looking statements. Forward-looking statements include the expectations of CNA and/or Phoenix (collectively the "Companies") concerning their respective revenues, earnings, expenses and investment activities, and the Companies' proposed actions in response to trends in their respective businesses.

Such statements are subject to a variety of inherent risks and uncertainties. These risks and uncertainties could cause actual results to differ materially from those projected. Such risks and uncertainties include, among others: general economic and business conditions; changes in financial markets such as fluctuations in interest rates, credit conditions and currency, commodity and stock prices; the effects of the Enron bankruptcy on energy and capital markets; changes in foreign or domestic political, social and economic conditions, including the possible occurrence of terrorist attacks; regulatory initiatives and compliance with governmental regulations, judicial decisions and rulings; regulatory limitations and restrictions upon the Companies and their respective insurance subsidiaries, including but not limited to restrictions upon the ability of such subsidiaries to pay dividends to their respective parent Companies to meet debt payment obligations; the impact of competitive products, policies and pricing and the competitive environments in which the Companies operate; product and policy availability and demand and market responses, including the effect of the absence of applicable terrorism legislation on coverages; development of claims and the impact on loss reserves; the performance of reinsurance companies under reinsurance contracts with the Companies respectively; results of financing efforts; changes in the Companies' composition of their respective operating segments; the sufficiency of the Companies' respective loss reserves and the possibility of future increases in reserves; the possibility of changes in the Companies' respective ratings by ratings agencies and changes in rating agency policies and practices; the actual closing of contemplated transactions and agreements; and various other matters and risks (many of which are beyond the Companies' individual or collective control) detailed in the Companies' respective Securities and Exchange Commission filings.

These forward-looking statements speak only as of the date of this press release. The Companies expressly disclaim any obligation or undertaking to release any updates or revisions to any forward-looking statement contained in this press release to reflect any change in the Companies' respective or mutual expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based.