Income Taxes (Tables)

12 Months Ended

Dec. 31, 2011

Income tax expense (benefit) consists of the following (in millions):


	Federal			State and Foreign			Total
2011
Current	$	45.8		$	1.6		$	47.4
Deferred		0.3			(0.2	)		0.1

	$	46.1		$	1.4		$	47.5

2010
Current	$	63.9		$	2.6		$	66.5
Deferred		11.3			1.1			12.4

	$	75.2		$	3.7		$	78.9

2009
Current	$	123.3		$	2.4		$	125.7
Deferred		(1.1	)		(0.2	)		(1.3	)

	$	122.2		$	2.2		$	124.4

Difference between Federal Income Tax Rate and Effective Income Tax Rate

The difference between the federal income tax rate and the effective income tax rate is as follows:


	2011			2010			2009
Federal income tax rate		35.0	%		35.0	%		35.0	%
Foreign tax credit and other adjustments		(0.9	)		(1.7	)		—
Income subject to dividends-received deduction		(4.0	)		(1.8	)		(0.8	)
Tax-exempt interest		(5.7	)		(4.3	)		(3.5	)
State taxes, net of federal tax benefit		0.4			1.0			0.4
Other, net		0.1			0.2			0.4

Effective income tax rate		24.9	%		28.4	%		31.5	%

Tax Effects of Temporary Differences that Give Rise to Significant Portions of Deferred Tax Assets and Deferred Tax Liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of December 31, 2011 and 2010 are as follows (in millions):


	2011			2010
*Deferred tax assets*
State net operating loss carry forward	$	15.2		$	15.2
Reserves for capitalized real estate		4.0			3.7
Expenses deducted for tax purposes when paid		1.8			1.9
Other than temporary impairment		10.5			21.7
Property and casualty loss reserves		58.9			62.6
Unearned premium reserves		28.8			26.8
Compensation accruals		71.7			70.4
Other		30.4			14.2

Gross deferred tax assets before valuation allowance	$	221.3		$	216.5

Valuation allowance		(15.2	)		(15.0	)

Gross deferred tax assets	$	206.1		$	201.5

*Deferred tax liabilities*
Unrealized gain on investments	$	81.9		$	84.8
Tax over book depreciation		4.1			1.1
Deferred gains		2.4			2.5
Deferred acquisition costs		25.1			24.0
Purchase accounting adjustments		3.8			4.1
Other		7.8			7.9

Gross deferred tax liabilities	$	125.1		$	124.4

Net deferred tax assets	$	81.0		$	77.1