Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Income Tax Expense (Benefit)

Income tax expense (benefit) consists of the following:

	Federal		State			Foreign		Total
	($ in millions)
Year ended December 31, 2015
Current	$	93.3	$	3.1		$	50.0	$	146.4
Deferred		49.2		(0.4	)		-		48.8
	$	142.5	$	2.7		$	50.0	$	195.2
Year ended December 31, 2014
Current	$	115.4	$	4.9		$	118.2	$	238.5
Deferred		12.9		0.4			-		13.3
	$	128.3	$	5.3		$	118.2	$	251.8
Year ended December 31, 2013
Current	$	68.4	$	4.6		$	62.7	$	135.7
Deferred		90.4		(0.2	)		-		90.2
	$	158.8	$	4.4		$	62.7	$	225.9

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:

	Year Ended December 31,
	2015		2014		2013
Federal income tax rate		35.0 %		35.0 %		35.0 %
Foreign tax credit and other adjustments		(0.4)		-		(0.5)
Income subject to dividends-received deduction		(1.6)		(1.3)		(0.9)
Tax-exempt interest		(6.8)		(6.5)		(8.1)
State taxes, net of federal tax benefit		0.2		0.4		0.3
Prior period adjustment		(0.2)		0.1		0.6
Other, net		(0.4)		(0.7)		-
Effective tax rate		25.8 %		27.0 %		26.4 %

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 the deferred tax assets and deferred tax liabilities as of December 31, 2015 and 2014 are as follows:

	As of December 31,
	2015		2014
	($ in millions)
Deferred tax assets:
Loss and LAE reserves		$ 242.7		$ 288.9
Minimum tax credit carry forward		110.2		146.3
Compensation accruals		161.9		149.6
Unearned premiums		134.0		116.6
OTTI losses		21.9		20.8
Foreign tax credit carry forward		-		8.4
State net operating loss carry forward		17.9		16.6
Other		167.2		139.9
Gross deferred tax assets before valuation allowance		855.8		887.1
Valuation allowance		(17.9)		(16.6)
Gross deferred tax assets		837.9		870.5
Deferred tax liabilities:
Net unrealized gains on investments		120.8		239.1
Deferred acquisition costs		146.8		123.6
Purchase accounting adjustments		43.8		60.1
Other		58.1		58.1
Gross deferred tax liabilities		369.5		480.9
Net deferred tax assets		$ 468.4		$ 389.6

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

The following table lists the tax years of Alleghany and TransRe tax returns that remain subject to examination by major tax jurisdictions as of December 31, 2015

Major Tax Jurisdiction	Open Tax Years
Australia	2011-2014
Canada	2011-2014
France	2009-2010 and 2012-2014
Germany	2013-2014
Hong Kong	2014
Japan	2010-2014
Switzerland	2014
U.K	2013-2014
U.S.	2007-2014