Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

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,
	2020		2019		2018
	(Amounts in thousands)
Federal
Current	$	69,554	$	18,109	$	14,190
Deferred	12,340		40,413		(39,244)
	$	81,894	$	58,522	$	(25,054)
State
Current	$	1,172	$	(1,430)	$	1,982
Deferred	828		890		(1,815)
	$	2,000	$	(540)	$	167
Total
Current	$	70,726	$	16,679	$	16,172
Deferred	13,168		41,303		(41,059)
Total	$	83,894	$	57,982	$	(24,887)

Reconciliation Of Income Taxes

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

	Year Ended December 31,
	2020		2019		2018
	(Amounts in thousands)
Computed tax expense (benefit) at 21%	$	96,285	$	79,394	$	(6,429)
Tax-exempt interest income	(12,270)		(12,909)		(13,507)
Dividends received deduction	(1,335)		(1,276)		(1,082)
State tax (benefit) expense	1,678		(869)		439
Nondeductible expenses	983		526		390
Change in federal tax contingency reserve	—		(2,588)		—
Reversal of AMT credit reduction (1)	—		—		(4,088)
Other, net	(1,447)		(4,296)		(610)
Income tax expense (benefit)	$	83,894	$	57,982	$	(24,887)

__________ 

(1) As a result of a determination made by the Office of Management and Budget in 2018, the Company reversed the previously recorded provisional 6.6% sequestration reduction to its alternative minimum tax (“AMT”) credit, which originally resulted from repeal of the corporate AMT and reclassification of AMT credit carryforwards to current taxes receivable as a refundable credit.

Deferred Tax Assets And Liabilities

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

	December 31,
	2020		2019
	(Amounts in thousands)
Deferred tax assets:
20% of net unearned premiums	$	61,067	$	58,448
Discounting of loss reserves and salvage and subrogation recoverable for tax purposes	15,090		12,769
Write-down of impaired investments	293		314
Expense accruals	14,432		8,099
Other deferred tax assets	6,401		3,348
Total gross deferred tax assets	97,283		82,978
Deferred tax liabilities:
Deferred policy acquisition costs	(51,869)		(48,964)
Tax liability on net unrealized gain on securities carried at fair value	(56,531)		(41,273)
Tax depreciation in excess of book depreciation	(12,632)		(8,105)
Undistributed earnings of insurance subsidiaries	(3,382)		(2,855)
Tax amortization in excess of book amortization	(4,666)		(3,264)
Other deferred tax liabilities	(9,335)		(6,481)
Total gross deferred tax liabilities	(138,415)		(110,942)
Net deferred tax liabilities	$	(41,132)	$	(27,964)

Summary Of Unrecognized Tax Benefits

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

	December 31,
	2020		2019
	(Amounts in thousands)
Balance at January 1	$	6,051	$	10,615
Additions (reductions) based on tax positions related to:
Current year	—		—
Prior years	(1,417)		(4,564)
Balance at December 31	$	4,634	$	6,051