Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Components of Current and Deferred Income Tax Expense (Benefit)

The components of current and deferred income tax expense (benefit) are as follows:

	Year Ended December 31,
In thousands	2012			2011		2010
Current income tax expense (benefit):
Federal and foreign	$	39,242		$	573	$	11,965
State and local		146			340		97
Subtotal		39,388			913		12,062
Deferred income tax expense (benefit):
Federal and foreign		(11,414	)		6,224		17,189
State and local		—			—		—
Subtotal		(11,414	)		6,224		17,189
Total income tax expense (benefit)	$	27,974		$	7,137	$	29,251

Reconciliation of Total Income Taxes Applicable to Pre-Tax Operating Income and Amounts Computed by Applying Federal Statutory Income Tax Rate to Pre-Tax Operating Income

A reconciliation of total income taxes applicable to pre-tax operating income and the amounts computed by applying the federal statutory income tax rate to the pre-tax operating income were as follows:

	Year Ended December 31,
In thousands	2012					2011					2010
Computed expected tax expense	$	32,109		35.0	%	$	11,457		35.0	%	$	34,590		35.0	%
Tax-exempt interest		(4,443	)	-4.8	%		(4,437	)	-13.6	%		(5,992	)	-6.1	%
Dividends received deduction		(799	)	-0.9	%		(1,065	)	-3.3	%		(718	)	-0.7	%
Proration		786		0.9	%		825		2.5	%		1,006		1.0	%
Current state and local income taxes, net of federal income tax		95		0.1	%		221		0.7	%		63		0.1	%
Other		226		0.2	%		136		0.5	%		302		0.3	%
Actual tax expense and rate	$	27,974		30.5	%	$	7,137		21.8	%	$	29,251		29.6	%

Tax Effects of Temporary Differences That Give Rise to Federal, Foreign, State and Local Deferred Tax Assets and Deferred Tax Liabilities

The tax effects of temporary differences that give rise to federal, foreign, state and local deferred tax assets and deferred tax liabilities were as follows:

	December 31,
In thousands	2012			2011
Deferred tax assets:
Loss reserve discount	$	29,687		$	31,687
Unearned premiums		22,860			19,253
Compensation related		5,285			2,695
State and local net deferred tax assets		499			242
Other		4,245			664
Total gross deferred tax assets		62,576			54,541
Less: Valuation allowance		(499	)		(242	)
Total deferred tax assets		62,077			54,299
Deferred tax liabilities:
Deferred acquisition costs		(16,903	)		(16,939	)
Net unrealized gains on securities		(36,200	)		(32,782	)
Other		(5,758	)		(10,869	)
Total deferred tax liabilities		(58,861	)		(60,590	)
Net deferred income tax asset (liability)	$	3,216		$	(6,291	)