Income Taxes (Tables)

3 Months Ended

Mar. 31, 2020

A reconciliation between the U.S. corporate income tax rate and the effective income tax rate is as follows:


Three Months Ended March 31,	2020						2019
(In thousands, except for %)	Amount		%		Amount		%
Federal income tax expense:
Expected tax expense (benefit)	$	(469)	21.0	%	$	422	21.0	%

Foreign income tax rate differential	(550)		24.6	%	85		4.2	%


Tax-exempt interest and dividends-received deduction	(40)		1.8	%	—		—	%

Annualized effective tax rate adjustment	617		(27.6)	%	3,319		165.3	%
Adjustment of prior year taxes	(5)		0.2	%	—		—	%

Effect of uncertain tax position	1,015		(45.4)	%	1,192		59.4	%

CICA Ltd. Subpart F income	675		(30.2)	%	711		35.3	%

Other	106		(4.7)	%	81		4.1	%
Total federal income tax expense	$	1,349	(60.3)	%	$	5,810	289.3	%

Income tax expense consists of:


Three Months Ended March 31,	2020		2019
(In thousands)
Federal income tax expense:
Current	$	1,629	5,671
Deferred	(280)		139
Total federal income tax expense	$	1,349	5,810

The components of deferred federal income taxes are as follows:


Net Deferred Tax Asset (Liability) (In thousands)	March 31, 2020		December 31, 2019
Deferred tax assets:
Future policy benefit reserves	$	2,716	2,641
Net operating and capital loss carryforwards	38		230

Investments	703		702
Deferred intercompany loss	3,234		3,539


Lease liability	183		238
Other	854		700
Total gross deferred tax assets	7,728		8,050


Deferred tax liabilities:
Deferred policy acquisition costs, cost of insurance acquired and intangible assets	(8,403)		(8,417)
Unrealized gains on investments available-for-sale	(4,149)		(7,300)

Tax reserves transition liability	(4,297)		(4,483)
Right of use lease asset	(183)		(238)
Other	(38)		(40)
Total gross deferred tax liabilities	(17,070)		(20,478)
Net deferred tax liability	$	(9,342)	(12,428)