Income Taxes

6 Months Ended

Jun. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

For interim periods, ProAssurance generally utilizes the estimated annual effective tax rate method under which the Company determines its provision (benefit) for income taxes based on the current estimate of its annual effective tax rate. If application of the estimated annual effective tax rate method is impractical and does not provide a reliable estimate of the annual effective tax rate, the Company would utilize the discrete effective tax rate method. For the three and six months ended June 30, 2024 and 2023, the Company utilized the estimated annual effective tax rate method. Under this method, items which are unusual, infrequent, or that cannot be reliably estimated are considered in the effective tax rate in the period in which the item is included in income, and are referred to as discrete items. For the three and six months ended June 30, 2024 and 2023, the provision for income taxes is different from that which would be obtained by applying the statutory federal income tax rate to income (loss) before income taxes primarily due to the decrease in the contingent consideration liability related to the NORCAL acquisition, all of which was non-taxable. See further discussion on the Company's contingent consideration in Note 2 and Note 6.

ProAssurance had a liability for U.S. federal and U.K. income taxes carried as a part of other liabilities of $3.6 million as of June 30, 2024 and $4.0 million as of December 31, 2023. At June 30, 2024 and December 31, 2023, the liability for unrecognized tax benefits, which is included in the total liability for U.S. federal and U.K. income taxes, was $5.5 million and $5.3 million, respectively, which included an accrued liability for interest of approximately $0.7 million and $0.5 million, respectively.