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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Summary of income tax assets and liabilities

The income tax assets and liabilities included in Other assets and Other liabilities, respectively, in the Consolidated Balance Sheets were as follows:


($ in thousands)	December 31,
	2020		2019
Income tax (asset) liability
Current	$	(12,631)	$	(12,184)
Deferred	206,650		160,624

Summary of deferred tax assets and liabilities

The "temporary differences" that gave rise to the deferred tax balances were as follows:


($ in thousands)	December 31,
	2020		2019
Deferred tax assets
Unearned premium reserve reduction	$	11,488	$	12,103
Compensation accruals	9,487		8,866
Reinsurance commissions	—		6,804
Impaired securities	2,127		1,245
Other comprehensive income - net funded status of benefit plans	2,981		2,875
Discounting of unpaid claims and claim expense tax reserves	2,548		2,530
Net operating loss carryforwards	—		3,803
Postretirement benefits other than pensions	270		285
Total gross deferred tax assets	28,901		38,511
Deferred tax liabilities
Other comprehensive income - net unrealized gains on securities	124,715		74,645
Deferred policy acquisition costs	36,347		49,326
Life insurance future policy benefit reserve	26,725		38,210
Life insurance future policy benefit reserve (transitional rule)	10,651		12,786
Discounting of unpaid claims and claim expense tax reserves (transitional rule)	789		947
Investment related adjustments	34,155		15,718
Intangibles	210		2,021
Other, net	1,959		5,482
Total gross deferred tax liabilities	235,551		199,135
Net deferred tax liability	$	206,650	$	160,624

Income taxes expenses

The components of the provision for income tax expense (benefit) were as follows:


($ in thousands)	Years Ended December 31,
	2020		2019		2018
Current	$	16,880	$	31,518	$	4,152
Deferred	9,388		20,488		(2,958)
Total income tax expense	$	26,268	$	52,006	$	1,194

Income taxes expenses reconciliation

Income tax expense for the following periods differed from the expected tax computed by applying the federal corporate tax rate of 21% for 2020, 2019 and 2018 to income before income taxes as follows:


($ in thousands)	Years Ended December 31,
	2020		2019		2018
Expected federal tax on income	$	33,512	$	49,654	$	4,103
Add (deduct) tax effects of:
Tax-exempt interest	(4,203)		(4,159)		(3,726)
Dividend received deduction	(1,475)		(1,392)		(412)
Goodwill impairment	187		5,885		—
CARES Act net operating loss carryback	(2,792)		—		—
Employee share-based compensation	(541)		272		(1,134)
Compensation deduction limitation	663		680		1,754
Prior year adjustments	(219)		(716)		300
Other, net	1,136		1,782		309
Income tax expense provided on income	$	26,268	$	52,006	$	1,194

Unrecognized tax benefits, excluding interest and penalties

A reconciliation of the beginning and ending amounts of unrecognized tax benefits, excluding interest and penalties, is as follows:


($ in thousands)	Years Ended December 31,
	2020		2019		2018
Balance as of the beginning of the year	$	1,966	$	1,734	$	1,790
Increases related to prior year tax positions	205		109		—
Decreases related to prior year tax positions	—		—		(152)
Increases related to current year tax positions	151		123		96
Settlements	—		—		—
Lapse of statute	—		—		—
Balance as of the end of the year	$	2,322	$	1,966	$	1,734