Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Components of Income Tax Expense (Benefit), Continuing Operations [Abstract]

Components Of Income Tax Expense

The income tax expense (benefit) consisted of the following components:

	Year Ended December 31,
	2017			2016			2015
	(Amounts in thousands)
Federal
Current	$	10,898		$	17,444		$	21,942
Deferred	10,934			(21,947		)	(25,594		)
	$	21,832		$	(4,503	)	$	(3,652	)
State
Current	$	955		$	2,239		$	943
Deferred	(579		)	(56		)	(1,203		)
	$	376		$	2,183		$	(260	)
Total
Current	$	11,853		$	19,683		$	22,885
Deferred	10,355			(22,003		)	(26,797		)
Total	$	22,208		$	(2,320	)	$	(3,912	)

Reconciliation Of Income Taxes

35%. Additionally, the Company recorded a provisional 6.6% sequestration reduction to its alternative minimum tax (“AMT”) credit resulting from repeal of the corporate AMT and reclassification of AMT credit carryforwards to current taxes receivable as a refundable credit. These adjustments resulted in a net tax benefit of approximately $7.4 million, which is reflected in net income for the twelve months ended December 31, 2017.

In computing taxable income, property and casualty insurers reduce underwriting income by losses and loss adjustment expenses incurred. The amount of the deduction for losses incurred associated with unpaid losses is discounted at the interest rates and for the loss payment patterns prescribed by the U.S. Treasury. The Act changes the prescribed interest rates to rates based on corporate bond yield curves and extends the applicable time periods for the loss payment pattern. These changes are effective for tax years beginning after 2017 and are subject to a transition rule that spreads the additional tax payments from the amount determined by applying these changes versus the previous calculated amount over the subsequent eight years beginning in 2018. The changes included in the Act related to discounting of unpaid losses are broad and complex. The Securities Exchange Commission has issued rules that would allow for a measurement period of up to one year after the enactment date of the Act to finalize the recording of the related tax impacts. The transitional impact of the Act will be finalized and recorded by the measurement period.

The following table presents a reconciliation of the tax expense based on the statutory rate to the Company's actual tax expense (benefit) in the consolidated statements of operations:

	Year Ended December 31,
	2017			2016			2015
	(Amounts in thousands)
Computed tax expense at 35%	$	58,480		$	24,753		$	24,699
Tax-exempt interest income	(26,038		)	(26,197		)	(26,993		)
Dividends received deduction	(2,296		)	(2,303		)	(1,613		)
State tax expense	158			1,907			(287		)
Nondeductible expenses	348			303			575
Cumulative impact from change in tax rate	(11,449		)	—			—
Reduction of AMT credit carryforward due to sequestration	4,088			—			—
Other, net	(1,083		)	(783		)	(293		)
Income tax expense (benefit)	$	22,208		$	(2,320	)	$	(3,912	)

Deferred Tax Assets And Liabilities

The following table presents the significant components of the Company’s net deferred tax assets and liabilities:

	December 31,
	2017			2016
	(Amounts in thousands)
Deferred tax assets:
20% of net unearned premiums	$	47,110		$	77,104
Discounting of loss reserves and salvage and subrogation recoverable for tax purposes	6,451			9,864
Write-down of impaired investments	387			726
Tax credit carryforwards	230			47,238
Expense accruals	6,192			11,090
Other deferred tax assets	3,174			8,828
Total gross deferred tax assets	63,544			154,850
Deferred tax liabilities:
Deferred policy acquisition costs	(41,612		)	(70,289		)
Tax liability on net unrealized gain on securities carried at fair value	(27,574		)	(15,612		)
Tax depreciation in excess of book depreciation	(5,686		)	(10,446		)
Undistributed earnings of insurance subsidiaries	(3,907		)	(3,985		)
Tax amortization in excess of book amortization	(2,280		)	(3,030		)
Other deferred tax liabilities	(5,417		)	(6,211		)
Total gross deferred tax liabilities	(86,476		)	(109,573		)
Net deferred tax (liabilities) assets	$	(22,932	)	$	45,277

Summary Of Unrecognized Tax Benefits

The following table presents a reconciliation of the beginning and ending balances of unrecognized tax benefits:

	December 31,
	2017			2016
	(Amounts in thousands)
Balance at January 1	$	12,954		$	12,165
Additions (reductions) based on tax positions related to:
Current year	85			688
Prior years	(3,365		)	101
Additions (reductions) as a result of lapse of the applicable statute of limitations	—			—
Balance at December 31	$	9,674		$	12,954