<PAGE>
                                                                    EXHIBIT 4.16

================================================================================

                               GUARANTEE AGREEMENT

                                     BETWEEN

                            CNA FINANCIAL CORPORATION
                                 (AS GUARANTOR)

                                       AND

                J. P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION
                                  (AS TRUSTEE)

                                   DATED AS OF

                              _________ ___, _____

================================================================================
<PAGE>
                             CROSS-REFERENCE TABLE*

<TABLE>
<CAPTION>
TRUST INDENTURE ACT                                               SECTION OF
OF 1939, AS AMENDED                                          GUARANTEE AGREEMENT
-------------------                                          -------------------
<S>                                                          <C>
310(a)....................................................             4.1(a)
310(b)....................................................       4.1(c), 2.8
310(c)....................................................      Inapplicable
311(a)....................................................             2.2(b)
311(b)....................................................             2.2(b)
312(a)....................................................             2.2(a)
312(b)....................................................             2.2(b)
313.......................................................               2.3
314(a)....................................................               2.4
314(b)....................................................      Inapplicable
314(c)....................................................               2.5
314(d)....................................................      Inapplicable
314(e)....................................................     1.1, 2.5, 3.2
314(f)....................................................          2.1, 3.2
315(a)....................................................             3.1(d)
315(b)....................................................               2.7
315(c)....................................................               3.1
315(d)....................................................             3.1(d)
316(a)....................................................     1.1, 2.6, 5.4
316(b)....................................................               5.3
316(c)....................................................               8.2
317(a)....................................................      Inapplicable
317(b)....................................................      Inapplicable
318(a)....................................................             2.1(b)
318(b)....................................................               2.1
318(c)....................................................             2.1(a)
</TABLE>

*    This Cross-Reference Table does not constitute part of the Guarantee
     Agreement and shall not affect the interpretation of any of its terms or
     provisions.


                                        i
<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
ARTICLE I. DEFINITIONS...................................................     1
   Section 1.1 Definitions...............................................     1

ARTICLE II. TRUST INDENTURE ACT..........................................     4
   Section 2.1 Trust Indenture Act; Application..........................     4
   Section 2.2 List of Holders...........................................     5
   Section 2.3 Reports by the Guarantee Trustee..........................     5
   Section 2.4 Periodic Reports to the Guarantee Trustee.................     5
   Section 2.5 Evidence of Compliance with Conditions Precedent..........     5
   Section 2.6 Events of Default; Waiver.................................     5
   Section 2.7 Event of Default; Notice..................................     6
   Section 2.8 Conflicting Interests.....................................     6

ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE..........     6
   Section 3.1 Powers and Duties of the Guarantee Trustee................     6
   Section 3.2 Certain Rights of Guarantee Trustee.......................     8
   Section 3.3 Indemnity.................................................     9

ARTICLE IV. GUARANTEE TRUSTEE............................................    10
   Section 4.1 Guarantee Trustee: Eligibility............................    10
   Section 4.2 Appointment, Removal and Resignation of the Guarantee
               Trustee...................................................    10

ARTICLE V. GUARANTEE.....................................................    11
   Section 5.1 Guarantee.................................................    11
   Section 5.2 Waiver of Notice and Demand...............................    11
   Section 5.3 Obligations Not Affected..................................    11
   Section 5.4 Rights of Holders.........................................    12
   Section 5.5 Guarantee of Payment......................................    12
   Section 5.6 Subrogation...............................................    12
   Section 5.7 Independent Obligations...................................    13

ARTICLE VI. COVENANTS AND SUBORDINATION..................................    13
   Section 6.1 Subordination.............................................    13
   Section 6.2 Ranking Relative to Other Securities......................    13

ARTICLE VII. TERMINATION.................................................    13
   Section 7.1 Termination...............................................    13

ARTICLE VIII. MISCELLANEOUS..............................................    14
   Section 8.1 Successors and Assigns....................................    14
   Section 8.2 Amendments................................................    14
</TABLE>


                                       ii
<PAGE>
<TABLE>
<S>                                                                          <C>
   Section 8.3 Notices...................................................    14
   Section 8.4 Benefit...................................................    15
   Section 8.5 Interpretation............................................    15
   Section 8.6 Governing Law.............................................    16
</TABLE>


                                       iii
<PAGE>
                               GUARANTEE AGREEMENT

     This GUARANTEE AGREEMENT, dated as of ____________, ____, is executed and
delivered by CNA FINANCIAL CORPORATION, a Delaware corporation (the
"Guarantor"), having its principal office at CNA Center, Chicago, Illinois
60685, and J. P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION, a national banking
association, as trustee (the "Guarantee Trustee"), for the benefit of the
Holders (as defined herein) from time to time of the Preferred Securities (as
defined herein) of CNA Financial Capital [__], a Delaware statutory business
trust (the "Issuer").

     WHEREAS, pursuant to a Second Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of ____________, ____, among the Issuer Trustees
named therein, the Guarantor, as Depositor, and the Holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing $________ aggregate liquidation amount of its ____% Preferred
Securities, Series ____ (liquidation amount $________ per security) (the
"Preferred Securities") having such terms as are set forth in the Trust
Agreement;

     WHEREAS, the Preferred Securities will be issued by the Issuer and the
proceeds thereof, together with the proceeds from the issuance of the Issuer's
Common Securities (as defined below), will be used to purchase the Junior Debt
Securities (as defined in the Trust Agreement) of the Guarantor, which will be
deposited with J. P. Morgan Trust Company, National Association, as Property
Trustee under the Trust Agreement, as trust assets; and

     WHEREAS, as incentive for the Holders to purchase Preferred Securities, the
Guarantor desires irrevocably and unconditionally to agree, to the extent set
forth herein, to pay to the Holders of the Preferred Securities the Guarantee
Payments (as defined herein) and to make certain other payments on the terms and
conditions set forth herein.

     NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Guarantee Agreement and
pursuant to Section 5.1 hereof extends the Guarantee for the benefit of the
Holders from time to time of the Preferred Securities.

                             ARTICLE I. DEFINITIONS

SECTION 1.1 DEFINITIONS.

     As used in this Guarantee Agreement, the terms set forth below shall,
unless the context otherwise requires, have the following meanings. Capitalized
or otherwise defined terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Trust Agreement as in effect on the date
hereof.

     "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person, provided, however, that an Affiliate of the
Guarantor shall not be an Affiliate of the Issuer. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
<PAGE>
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.

     "Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.

     "Debt" means, with respect to any Person, whether recourse is to all or a
portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person; (vi) all
indebtedness of such Person whether incurred on or prior to the date hereof or
thereafter incurred, for claims in respect of derivative products, including
interest rate, foreign exchange rate and commodity forward contracts, futures
contracts, options and swaps and similar arrangements; and (vii) every
obligation of the type referred to in clauses (i) through (vi) of another Person
and all dividends of another Person the payment of which, in either case, such
Person has guaranteed or is responsible or liable for, directly or indirectly,
as obligor or otherwise.

     "Event of Default" means a default by the Guarantor on any Guarantee
Payment or other obligations under this Guarantee Agreement; provided, however,
that, except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received notice of default and shall not have cured such
default within 60 days after receipt of such notice.

     "Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the Preferred Securities, to the extent not paid or
made by or on behalf of the Issuer: (i) any accumulated and unpaid Distributions
(as defined in the Trust Agreement) required to be paid on the Preferred
Securities, to the extent the Issuer shall have funds on hand legally available
therefor at such time, (ii) the redemption price, including all accumulated and
unpaid Distributions to the date of redemption (the "Redemption Price"), with
respect to the Preferred Securities called for redemption by the Issuer, to the
extent the Issuer shall have funds on hand legally available therefor at such
time, and (iii) upon a voluntary or involuntary termination, winding-up or
liquidation of the Issuer, unless Junior Debt Securities are distributed to the
Holders or the Preferred Securities are otherwise exchanged or are redeemed in
accordance with their terms, the lesser of (a) the aggregate of the liquidation
amount of $ per Preferred Security plus accumulated and unpaid Distributions on
the Preferred Securities to the date of payment to the extent the Issuer shall
have funds on hand legally available to make such payment, at such time and (b)
the amount of assets of the Issuer remaining available for distribution to
Holders after satisfaction of liabilities to creditors of the Issuer as required
by applicable law (in either case, the "Liquidation Distribution").

     "Guarantee Trustee" means J. P. Morgan Trust Company, National Association,
until a Successor Guarantee Trustee (as defined below) has been appointed and
has accepted such


                                       2
<PAGE>
appointment pursuant to the terms of this Guarantee Agreement and thereafter
means each such Successor Guarantee Trustee.

     "Holder" means any Person in whose name a Preferred Security is registered
on the books and records of the Issuer; provided, however, that in determining
whether the Holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Subsidiary of the Guarantor.

     "Junior Indenture" means the Junior Subordinated Indenture dated as of
____________, ____, as supplemented and amended between CNA Financial
Corporation, as issuer of debt securities thereunder, and J. P. Morgan Trust
Company, National Association, as trustee.

     "List of Holders" has the meaning specified in Section 2.2(a).

     "Majority in liquidation amount of the Preferred Securities" means, except
as provided by the Trust Indenture Act, a vote by the Holder(s), voting
separately as a class, of more than 50% of the aggregate liquidation amount of
all then outstanding Preferred Securities issued by the Issuer, excluding any
Preferred Securities held by the Issuer, the Guarantor or any Subsidiary of the
Guarantor.

     "Officers' Certificate" means, with respect to any Person, a certificate
signed by the Chairman and Chief Executive Officer, President or any Senior Vice
President or Group Vice President, and by the Treasurer, and Associate
Treasurer, an Assistant Treasurer, the Controller, the Secretary or an Assistant
Secretary of such Person, and delivered to the Guarantee Trustee. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee Agreement shall include:

     (a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;

     (b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;

     (c) a statement that each officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and

     (d) a statement as to whether, in the opinion of each officer, such
condition or covenant has been complied with.

     "Other CNA Capital Trusts" means CNA Financial Capital [I][II], CNA
Financial Capital [II][III] and other similar trusts established by the
Guarantor.

     "Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.


                                       3
<PAGE>
     "Responsible Officer" means, with respect to the Guarantee Trustee, any
Senior Vice President, any Vice President, any Assistant Vice President, the
Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, any
Trust Officer or Assistant Trust Officer or any other officer of the Corporate
Trust Department of the above-designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.

     "Senior Debt" means the principal of (and premium, if any) and interest, if
any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Guarantor whether or not such
claim for post-petition interest is allowed in such proceeding), on Debt,
whether incurred on or prior to the date of this Guarantee or thereafter
incurred including, without limitation, Debt issued pursuant to the Senior Debt
Indenture between CNA Financial Corporation and The First National Bank of
Chicago, the First Supplemental Indenture of the Senior Debt Indenture between
CNA Financial Corporation and The First National Bank of Chicago, the Second
Supplemental Indenture of the Senior Debt Indenture between CNA Financial
Corporation and J. P. Morgan Trust Company, National Association (formerly known
as The First National Bank of Chicago), and the Subordinated Indenture between
CNA Financial Corporation and J. P. Morgan Trust Company, National Association,
unless, in the instrument creating or evidencing the same or pursuant to which
the same is outstanding, it is provided that such obligations are pari passu or
are not superior in right of payment to the Guarantee or to other Debt which is
pari passu with, or subordinated to, the Guarantee; provided, however, that
Senior Debt shall not be deemed to include (a) any Debt of the Guarantor which
when incurred and without respect to any election under Section 1111(b) of the
Bankruptcy Reform Act of 1978, was without recourse to the Guarantor, (b) any
Debt of the Guarantor to any of its Subsidiaries, (c) Debt to any employee of
the Guarantor, (d) any liability for taxes, (e) Debt or other monetary
obligations to trade creditors created or assumed by the Guarantor or any of its
Subsidiaries in the ordinary course of business in connection with the obtaining
of goods, materials or services and (f) Debt issued under the Junior Indenture
and (g) the Guarantee.

     "Subsidiary" means a Person more than 50% of the outstanding voting stock
of which is owned, directly or indirectly, by CNAF or by one or more other
Subsidiaries, or by CNAF and one or more other Subsidiaries. For purposes of
this definition, "voting stock" means stock or other equity interests which
ordinarily has voting power for the election of directors, trustees or managers,
whether at all times or only so long as no senior class of stock has such voting
power by reason of any contingency.

     "Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.

     "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.

                         ARTICLE II. TRUST INDENTURE ACT

SECTION 2.1 TRUST INDENTURE ACT; APPLICATION.


                                       4
<PAGE>
     (a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions.

     (b) If and to the extent that any provision of this Guarantee Agreement
limits, qualifies or conflicts with the duties imposed by Sections 310 to 318,
inclusive, of the Trust Indenture Act, such imposed duties shall control.

SECTION 2.2 LIST OF HOLDERS.

     (a) The Guarantor shall furnish or cause to be furnished to the Guarantee
Trustee (a) semiannually, on or before January 15 and July 15 of each year, a
list, in such form as the Guarantee Trustee may reasonably require, of the names
and addresses of the Holders ("List of Holders") as of a date not more than 15
days prior to the delivery thereof, and (b) at such other times as the Guarantee
Trustee may request in writing, within 30 days after the receipt by the
Guarantor of any such request, a List of Holders as of a date not more than 15
days prior to the time such list is furnished, in each case to the extent such
information is in the possession or control of the Guarantor and is not
identical to a previously supplied list of Holders or has not otherwise been
received by the Guarantee Trustee in its capacity as such. The Guarantee Trustee
may destroy any List of Holders previously given to it on receipt of a new List
of Holders.

     (b) The Guarantee Trustee shall comply with its obligations under Section
311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.

SECTION 2.3 REPORTS BY THE GUARANTEE TRUSTEE.

     Within 60 days of May 15 of each year, commencing ____________, ____, the
Guarantee Trustee shall provide to the Holders such reports as are required by
Section 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Guarantee Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.

SECTION 2.4 PERIODIC REPORTS TO THE GUARANTEE TRUSTEE.

     The Guarantor shall provide to the Guarantee Trustee and the Holders such
documents, reports and information, if any, if and as required by Section 314 of
the Trust Indenture Act and the compliance certificate required by Section 314
of the Trust Indenture Act, in the form, in the manner and at the times required
by Section 314 of the Trust Indenture Act.

SECTION 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.

     The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with such conditions precedent, if any, provided for in this
Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.

SECTION 2.6 EVENTS OF DEFAULT; WAIVER.


                                       5
<PAGE>
     The Holders of a Majority in liquidation amount of the Preferred Securities
may, by vote, on behalf of the Holders, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this Guarantee Agreement, but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right
consequent therefrom.

SECTION 2.7 EVENT OF DEFAULT; NOTICE.

     (a) The Guarantee Trustee shall, within 90 days after the occurrence of an
Event of Default, transmit by mail, first class postage prepaid, to the Holders
notices of all Events of Default known to the Guarantee Trustee, unless such
Events of Default have been cured before the giving of such notice, provided,
that, except in the case of a default in the payment of a Guarantee Payment, the
Guarantee Trustee shall be protected in withholding such notice if and so long
as the Board of Directors, the executive committee or a trust committee of
directors and/or Responsible Officers of the Guarantee Trustee in good faith
determines that the withholding of such notice is in the best interests of the
Holders.

     (b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless the Guarantee Trustee shall have received written
notice, or a Responsible Officer charged with the administration of this
Guarantee Agreement shall have obtained written notice, of such Event of
Default.

SECTION 2.8 CONFLICTING INTERESTS.

     The Trust Agreements and the Guarantee Agreement for each of the other CNA
Capital Trusts shall be deemed to be specifically described in this Guarantee
Agreement for the purposes of clause (i) of the first proviso contained in
Section 310(b) of the Trust Indenture Act.

         ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

SECTION 3.1 POWERS AND DUTIES OF THE GUARANTEE TRUSTEE.

     (a) This Guarantee Agreement shall be held by the Guarantee Trustee for the
benefit of the Holders, and the Guarantee Trustee shall not transfer this
Guarantee Agreement to any Person except a Holder exercising his or her rights
pursuant to clause (iv) of Section 5.4 or to a Successor Guarantee Trustee on
acceptance by such Successor Guarantee Trustee of its appointment to act as
Successor Guarantee Trustee. The right, title and interest of the Guarantee
Trustee shall automatically vest in any Successor Guarantee Trustee, upon
acceptance by such Successor Guarantee Trustee of its appointment hereunder, and
such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.

     (b) If an Event of Default has occurred and is continuing, the Guarantee
Trustee shall enforce this Guarantee Agreement for the benefit of the Holders.

     (c) The Guarantee Trustee, before the occurrence of any Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform only such


                                       6
<PAGE>
duties as are specifically set forth in this Guarantee Agreement, and no implied
covenants shall be read into this Guarantee Agreement against the Guarantee
Trustee. In case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.6), the Guarantee Trustee shall exercise such of
the rights and powers vested in it by this Guarantee Agreement, and use the same
degree of care and skill in its exercise thereof, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.

     (d) No provision of this Guarantee Agreement shall be construed to relieve
the Guarantee Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:

          (i)  prior to the occurrence of any Event of Default and after the
               curing or waiving of all such Events of Default that may have
               occurred:

               (A)  the duties and obligations of the Guarantee Trustee shall be
                    determined solely by the express provisions of this
                    Guarantee Agreement, and the Guarantee Trustee shall not be
                    liable except for the performance of such duties and
                    obligations as are specifically set forth in this Guarantee
                    Agreement; and

               (B)  in the absence of bad faith on the part of the Guarantee
                    Trustee, the Guarantee Trustee may conclusively rely, as to
                    the truth of the statements and the correctness of the
                    opinions expressed therein, upon any certificates or
                    opinions furnished to the Guarantee Trustee and conforming
                    to the requirements of this Guarantee Agreement; but in the
                    case of any such certificates or opinions that by any
                    provision hereof or of the Trust Indenture Act are
                    specifically required to be furnished to the Guarantee
                    Trustee, the Guarantee Trustee shall be under a duty to
                    examine the same to determine whether or not they conform to
                    the requirements of this Guarantee Agreement;

          (ii) the Guarantee Trustee shall not be liable for any error of
               judgment made in good faith by a Responsible Officer of the
               Guarantee Trustee, unless it shall be proved that the Guarantee
               Trustee was negligent in ascertaining the pertinent facts upon
               which such judgment was made;

          (iii) the Guarantee Trustee shall not be liable with respect to any
               action taken or omitted to be taken by it in good faith in
               accordance with the direction of the Holders of a Majority in
               liquidation amount of the Preferred Securities relating to the
               time, method and place of conducting any proceeding for any
               remedy available to the Guarantee Trustee, or exercising any
               trust or power conferred upon the Guarantee Trustee under this
               Guarantee Agreement; and

          (iv) no provision of this Guarantee Agreement shall require the
               Guarantee Trustee to expend or risk its own funds or otherwise
               incur personal


                                       7
<PAGE>
               financial liability in the performance of any of its duties or in
               the exercise of any of its rights or powers, if the Guarantee
               Trustee shall have reasonable grounds for believing that the
               repayment of such funds or liability is not reasonably assured to
               it under the terms of this Guarantee Agreement or reasonable
               indemnity against such risk or liability is not reasonably
               assured to it.

SECTION 3.2 CERTAIN RIGHTS OF GUARANTEE TRUSTEE.

     (a)  Subject to the provisions of Section 3.1:

          (i)  the Guarantee Trustee may rely and shall be fully protected in
               acting or refraining from acting upon any resolution,
               certificate, statement, instrument, opinion, report, notice,
               request, direction, consent, order, bond, debenture, note, other
               evidence of indebtedness or other paper or document reasonably
               believed by it to be genuine and to have been signed, sent or
               presented by the proper party or parties;

          (ii) any direction or act of the Guarantor contemplated by this
               Guarantee Agreement shall be sufficiently evidenced by an
               Officers' Certificate unless otherwise prescribed herein;

          (iii) whenever, in the administration of this Guarantee Agreement, the
               Guarantee Trustee shall deem it desirable that a matter be proved
               or established before taking, suffering or omitting to take any
               action hereunder, the Guarantee Trustee (unless other evidence is
               herein specifically prescribed) may, in the absence of bad faith
               on its part, request and rely upon an Officers' Certificate
               which, upon receipt of such request from the Guarantee Trustee,
               shall be promptly delivered by the Guarantor;

          (iv) the Guarantee Trustee may consult with legal counsel, and the
               written advice or opinion of such legal counsel with respect to
               legal matters shall be full and complete authorization and
               protection in respect of any action taken, suffered or omitted to
               be taken by it hereunder in good faith and in accordance with
               such advice or opinion; and such legal counsel may be legal
               counsel to the Guarantor or any of its Affiliates and may be one
               of its employees; and the Guarantee Trustee shall have the right
               at any time to seek instructions concerning the administration of
               this Guarantee Agreement from any court of competent
               jurisdiction;

          (v)  the Guarantee Trustee shall be under no obligation to exercise
               any of the rights or powers vested in it by this Guarantee
               Agreement at the request or direction of any Holder, unless such
               Holder shall have provided to the Guarantee Trustee such adequate
               security and indemnity as would satisfy a reasonable person in
               the position of the Guarantee Trustee against the costs, expenses
               (including attorneys' fees and expenses) and liabilities that
               might be incurred by it in complying with such request or
               direction,


                                       8
<PAGE>
               including such reasonable advances as may be requested by the
               Guarantee Trustee; provided that, nothing contained in this
               Section 3.2(a)(v) shall be taken to relieve the Guarantee
               Trustee, upon the occurrence of an Event of Default, of its
               obligation to exercise the rights and powers vested in it by this
               Guarantee Agreement;

          (vi) the Guarantee Trustee shall not be bound to make any
               investigation into the facts or matters stated in any resolution,
               certificate, statement, instrument, opinion, report, notice,
               request, direction, consent, order, bond, debenture, note, other
               evidence of indebtedness or other paper or document, but the
               Guarantee Trustee, in its discretion, may make such further
               inquiry or investigation into such facts or matters as it may see
               fit;

          (vii) the Guarantee Trustee may execute any of the trusts or powers
               hereunder or perform any duties hereunder either directly or by
               or through its agents or attorneys, and the Guarantee Trustee
               shall not be responsible for any misconduct or negligence on the
               part of any such agent or attorney appointed with due care by it
               hereunder; and

          (viii) whenever in the administration of this Guarantee Agreement the
               Guarantee Trustee shall deem it desirable to receive instructions
               with respect to enforcing any remedy or right or taking any other
               action hereunder, the Guarantee Trustee (A) may request
               instructions from the Holders of a Majority in liquidation amount
               of the Preferred Securities, (B) may refrain from enforcing such
               remedy or right or taking such other action until such
               instructions are received, and (C) shall be protected in acting
               in accordance with such instructions.

     (b) No provision of this Guarantee Agreement shall be deemed to impose any
duty or obligation on the Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.

SECTION 3.3 INDEMNITY.

     The Guarantor agrees to indemnify the Guarantee Trustee for, and to hold it
harmless against, any loss, liability or expense incurred without negligence or
bad faith on the part of the Guarantee Trustee, arising out of or in connection
with the acceptance or administration of this Guarantee Agreement, including the
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The Guarantee Trustee will not claim or exact any lien or charge on
any Guarantee Payments as a result of any amount due to it under this Guarantee
Agreement.


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<PAGE>
     The provisions of this Section 3.3 shall survive the termination of the
Guarantee Agreement or the resignation or removal of the Guarantee Trustee.

                          ARTICLE IV. GUARANTEE TRUSTEE

SECTION 4.1 GUARANTEE TRUSTEE: ELIGIBILITY.

     (a) There shall at all times be a Guarantee Trustee which shall:

          (i)  not be an Affiliate of the Guarantor; and

          (ii) be a Person that is eligible pursuant to the Trust Indenture Act
               to act as such and has a combined capital and surplus of at least
               $50,000,000, and shall be a corporation meeting the requirements
               of Section 310(a) of the Trust Indenture Act. If such corporation
               publishes reports of condition at least annually, pursuant to law
               or to the requirements of the supervising or examining authority,
               then, for the purposes of this Section and to the extent
               permitted by the Trust Indenture Act, the combined capital and
               surplus of such corporation shall be deemed to be its combined
               capital and surplus as set forth in its most recent report of
               condition so published.

     (b) If at any time the Guarantee Trustee shall cease to be eligible to so
act under Section 4.1(a), the Guarantee Trustee shall immediately resign in the
manner and with the effect set out in Section 4.2(c).

     (c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.

SECTION 4.2 APPOINTMENT, REMOVAL AND RESIGNATION OF THE GUARANTEE TRUSTEE.

     (a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed or
removed without cause at any time by the Guarantor except during an Event of
Default.

     (b) The Guarantee Trustee shall not be removed until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Guarantee Trustee and delivered to the
Guarantee Trustee and the Guarantor.

     (c) The Guarantee Trustee appointed hereunder shall hold office until a
Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.


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<PAGE>
     (d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.

                              ARTICLE V. GUARANTEE

SECTION 5.1 GUARANTEE.

     The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by or on behalf of the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim which the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.

SECTION 5.2 WAIVER OF NOTICE AND DEMAND.

     The Guarantor hereby waives notice of acceptance of the Guarantee Agreement
and of any liability to which it applies or may apply, presentment, demand for
payment, any right to require a proceeding first against the Guarantee Trustee,
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.

SECTION 5.3 OBLIGATIONS NOT AFFECTED.

     The obligations, covenants, agreements and duties of the Guarantor under
this Guarantee Agreement shall in no way be affected or impaired by reason of
the happening from time to time of any of the following:

     (a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;

     (b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions (other than an extension of time for payment of
Distributions that results from the deferral of any interest payment period on
the Junior Debt Securities as so provided in the Junior Indenture), Redemption
Price, Liquidation Distribution or any other sums payable under the terms of the
Preferred Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Preferred
Securities;

     (c) any failure, omission, delay or lack of diligence on the part of the
Holders, the Property Trustee or the Guarantee Trustee to enforce, assert or
exercise any right, privilege, power or remedy conferred on the Holders, the
Property Trustee or the Guarantee Trustee pursuant to the terms of the Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;


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<PAGE>
     (d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;

     (e) any invalidity of, or defect or deficiency in, the Preferred
Securities;

     (f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or

     (g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor;

it being the intent of this Section 5.3 that the obligations of the Guarantor
hereunder shall be absolute and unconditional under any and all circumstances.

     There shall be no obligation of the Holders to give notice to, or obtain
the consent of, the Guarantor with respect to the happening of any of the
foregoing.

SECTION 5.4 RIGHTS OF HOLDERS.

     The Guarantor expressly acknowledges that: (i) this Guarantee Agreement
will be deposited with the Guarantee Trustee to be held for the benefit of the
Holders; (ii) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iii) the Holders of a Majority in
liquidation amount of the Preferred Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Guarantee Trustee in respect of this Guarantee Agreement or exercising any
trust or power conferred upon the Guarantee Trustee under this Guarantee
Agreement; and (iv) any Holder may institute a legal proceeding directly against
the Guarantor to enforce its rights under this Guarantee Agreement, without
first instituting a legal proceeding against the Guarantee Trustee, the Issuer
or any other Person.

SECTION 5.5 GUARANTEE OF PAYMENT

     This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment of
the Guarantee Payments in full (without duplication of amounts theretofore paid
by the Issuer) or as otherwise specified in Section 7.1 hereof.

SECTION 5.6 SUBROGATION.

     The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Issuer in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement and shall have the right to waive
payment by the Issuer pursuant to Section 5.1; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this Guarantee Agreement, if, at the time of any
such payment, any amounts are due and unpaid


                                       12
<PAGE>
under this Guarantee Agreement. If any amount shall be paid to the Guarantor in
violation of the preceding sentence, the Guarantor agrees to hold such amount in
trust for the Holders and to pay over such amount to the Holders.

SECTION 5.7 INDEPENDENT OBLIGATIONS.

     The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer with respect to the Preferred Securities and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Guarantee Agreement
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.

                     ARTICLE VI. COVENANTS AND SUBORDINATION

SECTION 6.1 SUBORDINATION.

     This Guarantee Agreement shall constitute an unsecured obligation of the
Guarantor and shall rank subordinate and junior in right of payment to all
Senior Debt of the Guarantor, it being understood that the terms of Article XIII
of the Junior Indenture shall apply to the obligation of the Guarantor under
this Guarantee Agreement as if set forth herein in full.

SECTION 6.2 RANKING RELATIVE TO OTHER SECURITIES.

     This Guarantee Agreement shall rank (i) pari passu with any Debt other than
Senior Debt, with any guarantee agreements issued by the Guarantor on behalf of
the holders of preferred securities issued by the Other CNA Capital Trusts and
with the most senior preferred stock of the Guarantor and any guarantee issued
in respect of such preferred stock or preferred stock or interests of any
Affiliate of the Guarantor and (ii) senior to the common stock of the Guarantor
and, to the extent set forth therein, guarantee agreements issued by the
Guarantor on behalf of the holders of common securities of the Issuer and the
Other CNA Capital Trusts.

                            ARTICLE VII. TERMINATION

SECTION 7.1 TERMINATION.

     This Guarantee Agreement shall terminate and be of no further force and
effect upon (i) full payment of the Redemption Price of all Preferred Securities
or the termination, winding-up or liquidation of the Issuer, immediately
following the distribution of Junior Debt Securities to the Holders in exchange
for all of the Preferred Securities or the full payment of the amounts payable
in accordance with the Trust Agreement. Notwithstanding the foregoing, this
Guarantee Agreement will continue to be effective or will be reinstated, as the
case may be, if at any time any Holder must restore payment of any sums paid
with respect to Preferred Securities or this Guarantee Agreement.


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<PAGE>
                           ARTICLE VIII. MISCELLANEOUS

SECTION 8.1 SUCCESSORS AND ASSIGNS.

     All guarantees and agreements contained in this Guarantee Agreement shall
bind the successors, assigns, receivers, trustees and representatives of the
Guarantor and shall inure to the benefit of the Holders of the Preferred
Securities then outstanding. Except in connection with a consolidation, merger,
sale, transfer, conveyance or lease involving the Guarantor or its properties
and assets that is permitted under Article VIII of the Junior Indenture and
pursuant to which the Person formed by or surviving such consolidation or merger
or to which such sale, transfer, conveyance or lease shall have been made, if
other than the Guarantor, expressly agrees in writing to perform the Guarantor's
obligations hereunder, the Guarantor shall not assign its obligations hereunder.

SECTION 8.2 AMENDMENTS.

     Except with respect to any changes which do not adversely affect the rights
of the Holders in any material respect (in which case no consent of the Holders
will be required), this Guarantee Agreement may only be amended with the prior
approval of the Holders of a Majority in liquidation amount of all the
outstanding Preferred Securities. The provisions of Article VI of the Trust
Agreement concerning meetings of the Holders shall apply to the giving of such
approval.

SECTION 8.3 NOTICES.

     Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied or mailed by first class mail as follows:

     (a) if given to the Guarantor, to the address set forth below or such other
address as the Guarantor may give notice to the Holders:

               CNA Financial Corporation
               CNA Center
               Chicago, Illinois  60685
               Facsimile No.: (312) _____________
               Attention: _______________________

     (b) if given to the Issuer, in care of the Guarantee Trustee, at the
Issuer's (and the Guarantee Trustee's) address set forth below or such other
address as the Guarantee Trustee on behalf of the Issuer may give notice to the
Holders:

               CNA Financial Capital [__]
               c/o CNA Financial Corporation
               CNA Center
               Chicago, Illinois  60685
               Facsimile No.: (312) _____________
               Attention: _______________________


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<PAGE>
               with a copy to:

               J. P. Morgan Trust Company, National Association
               55 West Monroe Street, 15th Floor
               Chicago, Illinois 60602
               Facsimile No.:
               Attention: Institutional Trust Services

     (c) if given to any Holder, at the address set forth on the books and
records of the Issuer.

     All notices hereunder shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.

SECTION 8.4 BENEFIT.

     This Guarantee Agreement is solely for the benefit of the Holders of the
Preferred Securities and is not separately transferable from the Preferred
Securities.

SECTION 8.5 INTERPRETATION.

     In this Guarantee Agreement, unless the context otherwise requires:

     (a) capitalized terms used in this Guarantee Agreement but not defined in
the preamble hereto have the respective meanings assigned to them in Section
1.1;

     (b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;

     (c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or amended
from time to time;

     (d) all references in this Guarantee Agreement to Articles and Sections are
to Articles and Sections of this Guarantee Agreement unless otherwise specified;

     (e) a term defined in the Trust Indenture Act has the same meaning when
used in this Guarantee Agreement unless otherwise defined in this Guarantee
Agreement or unless the context otherwise requires;

     (f) a reference to the singular includes the plural and vice versa; and

     (g) the masculine, feminine or neuter genders used herein shall include the
masculine, feminine and neuter genders.


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<PAGE>
SECTION 8.6 GOVERNING LAW.

     THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
CONFLICT OF LAW PRINCIPLES THEREOF.

     This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.

     THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.

                                        CNA Financial Corporation


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                        J. P. Morgan Trust Company,
                                        National Association, as
                                        Guarantee Trustee


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


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