14.

Statutory Accounting Information (unaudited)

Insurance companies use statutory accounting practices (SAP) as prescribed by regulatory authorities. The primary differences between SAP and GAAP include the valuation of unrealized investment gains and losses, expensing of policy acquisition costs, actuarial assumptions for life insurance reserves and deferred income taxes based on differences in statutory and taxable income.

Statutory net income and capital and surplus are determined in accordance with SAP prescribed or permitted by insurance regulatory authorities for five legal entities, our insurance subsidiary and its four insurance subsidiaries. Statutory capital and surplus for our insurance subsidiary, The Cincinnati Insurance Company, includes capital and surplus of its four insurance subsidiaries. The statutory net income and statutory surplus are presented below:

	SAP Net Income (Loss)								Capital and Surplus
	Years ended December 31,								At December 31,
(In millions)	2011			2010		2009			2011		2010
The Cincinnati Insurance Company	$	120		$	318	$	339		$	3,747	$	3,777
The Cincinnati Casualty Company		15			10		29			280		269
The Cincinnati Indemnity Company		2			2		8			73		70
The Cincinnati Specialty Underwriters Insurance Company		11			1		(7	)		186		172
The Cincinnati Life Insurance Company		(13	)		15		15			281		303