20. STATUTORY FINANCIAL INFORMATION

The Company's insurance subsidiaries are required to file annual statements with state regulatory authorities prepared on an accounting basis prescribed or permitted by such authorities (statutory basis), as codified by the National Association of Insurance Commissioners. Statutory surplus differs from shareholders' equity reported in accordance with generally accepted accounting principles primarily because policy acquisition costs are expensed when incurred, the recognition of deferred tax assets is based on different recoverability assumptions and postretirement benefit costs are based on different assumptions and reflect a different method of adoption. Additionally, prior to the sale of FAFLIC on January 2, 2009, statutory surplus for FAFLIC differed as a result of life insurance reserves being based on different assumptions and statutory accounting principles requiring asset valuation and interest maintenance reserves for life insurance companies.

The following table provides statutory net income and surplus as of the periods indicated:


	2010		2009		2008
(In millions)
Statutory Net Income
Property and Casualty Companies - Combined	$	101.7	$	187.4	$	142.5
First Allmerica Financial Life Insurance Company		—		—		33.1
Statutory Surplus
Property and Casualty Companies - Combined	$	1,747.3	$	1,741.6	$	1,600.7
First Allmerica Financial Life Insurance Company		—		—		113.7