Income Taxes (Tables)

9 Months Ended

Sep. 30, 2012

Income Tax Expense (Benefit)

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

	Federal			State			Foreign			Total
Nine months ended September 30, 2012
Current	$	154.3		$	1.1		$	(0.3	)	$	155.1
Deferred		(43.6	)		0.2			—			(43.4	)
	$	110.7		$	1.3		$	(0.3	)	$	111.7
Nine months ended September 30, 2011
Current	$	21.8		$	1.2		$	0.2		$	23.2
Deferred		8.4			(0.3	)		—			8.1
	$	30.2		$	0.9		$	0.2		$	31.3

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

The tax effects of temporary differences that give rise to the deferred tax assets and deferred tax liabilities as of September 30, 2012 and December 31, 2011 are as follows (in millions):

	As of September 30, 2012			As of December 31, 2011
Deferred tax assets:
Loss and LAE reserves	$	367.6		$	58.9
Minimum tax credit carry forward		179.5			—
Compensation accruals		106.2			71.7
Unearned premiums		115.1			28.8
OTTI losses		8.5			10.5
Foreign tax credit carry forward		41.8			—
State net operating loss carry forward		15.2			15.2
Other		63.2			36.2
Gross deferred tax assets before valuation allowance		897.1			221.3
Valuation allowance		(15.2	)		(15.2	)
Gross deferred tax assets		881.9			206.1
Deferred tax liabilities:
Net unrealized gains on investments		166.0			81.9
Deferred acquisition costs		100.0			25.1
Purchase accounting adjustments		144.0			3.8
Other		22.6			14.3
Gross deferred tax liabilities		432.6			125.1
Net deferred tax assets	$	449.3		$	81.0

Tax Year Returns that Remain Subject to Examination by Major Tax Jurisdiction

The following table lists the tax years of Alleghany and Transatlantic tax returns that remain subject to examination by major tax jurisdiction as of September 30, 2012:

Major Tax Jurisdiction	Open Tax Years
Australia	2008-2011
Canada	2008-2011
France	2009-2011
Japan	2010-2011
Switzerland	2011
United Kingdom	2009-2011
United States	2009-2011