Income Taxes

6 Months Ended

Jun. 30, 2017

Income Taxes [Abstract]

Income Taxes

Note 15― Income Taxes

A. Income Tax Expense

The consolidated effective tax ratedecreased to 30.7% for thesix months endedJune 30, 2017compared with 37.7% for the six months ended2016.The significantly lower effective tax rate for 2017 was attributable to the one year moratorium on the non-deductible health insurance industry tax and recognizing an incremental tax benefit associated with merger-related costs. See Note 3 for additional details regarding merger-related costs.

The Company maintains a capital management strategy to retain overseas a significant portion of the earnings from its foreign operations. As of June 30, 2017, undistributed earnings were approximately $2.8billion. These undistributed earnings are deployed outside of the U.S. predominantly in support of the liquidity and regulatory capital requirements of our foreign operations. The Company does not intend to repatriate these earnings to the U.S. and as a result, income taxes are provided using the respective foreign jurisdictions’ tax rate.If the Company had intended to repatriate these foreign earnings to the U.S., the Company’s Consolidated Balance Sheets would have included an additional $390 million of deferred tax liabilities as of June 30, 2017.

B. Unrecognized Tax Benefits

Changes in unrecognized tax benefits were immaterial for the six months endedJune 30, 2017.