Income Taxes	9 Months Ended
Sep. 30, 2013
Income Taxes [Abstract]
Income Taxes	Note 15 ― Income Taxes A. Income Tax Expense In the third quarter of 2013, the Internal Revenue Service (IRS) completed its examination of the Company's 2009 and 2010 consolidated federal income tax returns, resulting in an increase to shareholders' net income of $18 million ($19 million reported as a reduction of income tax expense, partially offset by a $1 million pre-tax charge). Shareholders' net income for the third quarter of 2013 also increased by $13 million due to the recognition of tax benefits related to certain of the Company's foreign operations. The Company permanently reinvests the undistributed earnings of certain foreign operations overseas. As a result, income taxes are provided on the earnings of these operations using the respective foreign jurisdictions' tax rates, as compared to the higher U.S. statutory tax rate. In the first quarter of 2012, the Company began computing income taxes attributable to its China and Indonesia operations using this method. The Company continues to evaluate the permanent reinvestment of earnings for additional foreign jurisdictions. The permanent reinvestment of foreign operation earnings resulted in an increase to shareholders' net income of $28 million for the nine months ended September 30, 2013 and $29 million for the nine months ended September 30, 2012, including $13 million resulting from the first quarter 2012 implementation for the Company's China and Indonesia operations. The Company has accumulated permanently reinvested foreign earnings of $862 million and cumulative unrecognized deferred tax liabilities of $145 million through September 30, 2013. B. Unrecognized Tax Benefits Unrecognized tax benefits decreased for the nine months ended September 30, 2013 by $32 million of which $13 million increased shareholders' net income. Most of the decrease was attributable to completion of the previously referenced IRS examination. The Company has determined that it is reasonably possible that there could be a significant increase in the level of unrecognized tax benefits within the next twelve months due to ongoing IRS related matters as discussed further below. Any such increases are not expected to have a material impact on shareholders' net income as they would relate to the timing of income tax deductions. C. Other Tax Matters The Company's long-standing dispute with the IRS for tax years 2004 through 2006, regarding the appropriate reserve methodology for certain reinsurance contracts, has been finally resolved. On February 28, 2013, the United States Tax Court entered its decision on this matter for the 2004 tax year, finding the Company had an overpayment of federal income tax for the period. The refund was received on June 24, 2013. On January 9, 2013, the United States Tax Court entered its decision on this matter for the 2005 and 2006 tax years, finding that the Company had no additional tax liability for these years. An IRS examination of the Company's 2009 and 2010 tax years has been completed. Two issues could not be resolved at the examination level related to the timing of income tax deductions. On October 23, 2013, the Company filed a formal protest challenging the IRS positions on the two disputed matters. The Company will now attempt to resolve these matters through the administrative appeals process.

Income Taxes

9 Months Ended

Sep. 30, 2013

Note 15 ― Income Taxes

A. Income Tax Expense

In the third quarter of 2013, the Internal Revenue Service (IRS) completed its examination of the Company's 2009 and 2010 consolidated federal income tax returns, resulting in an increase to shareholders' net income of $18 million ($19 million reported as a reduction of income tax expense, partially offset by a $1 million pre-tax charge). Shareholders' net income for the third quarter of 2013 also increased by $13 million due to the recognition of tax benefits related to certain of the Company's foreign operations.

The Company permanently reinvests the undistributed earnings of certain foreign operations overseas. As a result, income taxes are provided on the earnings of these operations using the respective foreign jurisdictions' tax rates, as compared to the higher U.S. statutory tax rate. In the first quarter of 2012, the Company began computing income taxes attributable to its China and Indonesia operations using this method. The Company continues to evaluate the permanent reinvestment of earnings for additional foreign jurisdictions.

The permanent reinvestment of foreign operation earnings resulted in an increase to shareholders' net income of $28 million for the nine months ended September 30, 2013 and $29 million for the nine months ended September 30, 2012, including $13 million resulting from the first quarter 2012 implementation for the Company's China and Indonesia operations. The Company has accumulated permanently reinvested foreign earnings of $862 million and cumulative unrecognized deferred tax liabilities of $145 million through September 30, 2013.

B. Unrecognized Tax Benefits

Unrecognized tax benefits decreased for the nine months ended September 30, 2013 by $32 million of which $13 million increased shareholders' net income. Most of the decrease was attributable to completion of the previously referenced IRS examination. The Company has determined that it is reasonably possible that there could be a significant increase in the level of unrecognized tax benefits within the next twelve months due to ongoing IRS related matters as discussed further below. Any such increases are not expected to have a material impact on shareholders' net income as they would relate to the timing of income tax deductions.

C. Other Tax Matters

The Company's long-standing dispute with the IRS for tax years 2004 through 2006, regarding the appropriate reserve methodology for certain reinsurance contracts, has been finally resolved. On February 28, 2013, the United States Tax Court entered its decision on this matter for the 2004 tax year, finding the Company had an overpayment of federal income tax for the period. The refund was received on June 24, 2013. On January 9, 2013, the United States Tax Court entered its decision on this matter for the 2005 and 2006 tax years, finding that the Company had no additional tax liability for these years.

An IRS examination of the Company's 2009 and 2010 tax years has been completed. Two issues could not be resolved at the examination level related to the timing of income tax deductions. On October 23, 2013, the Company filed a formal protest challenging the IRS positions on the two disputed matters. The Company will now attempt to resolve these matters through the administrative appeals process.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

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+ Details