Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Income Taxes [Abstract]

Net deferred tax assets and liabilities

Net deferred tax assets and liabilities as of December 31, 2012 and 2011 are as follows:

	2012			2011
	(In thousands)
Total deferred tax assets	$	997,784		$	683,645
Total deferred tax liabilities		(44,350	)		(86,490	)
Net deferred tax asset before valuation allowance		953,434			597,155
Valuation allowance		(965,987	)		(608,761	)
Net deferred tax liability	$	(12,553	)	$	(11,606	)

Components of the net deferred tax liability

The components of the net deferred tax liability as of December 31, 2012 and 2011 are as follows:

	2012			2011
	(In thousands)
Convertible debentures	$	(3,470	)	$	(15,785	)
Net operating loss		866,700			506,614
Loss reserves		55,615			60,478
Unrealized (appreciation) depreciation in investments		(14,448	)		(42,009	)
Mortgage investments		14,602			18,944
Deferred compensation		13,288			17,447
Premium deficiency reserves		25,823			47,186
Loss due to "other than temporary" impairments		1,088			11,068
Other, net		(5,764	)		(6,788	)
Net deferred tax asset before valuation allowance		953,434			597,155
Valuation allowance		(965,987	)		(608,761	)
Net deferred tax liability	$	(12,553	)	$	(11,606	)

Tax provision (benefit)

The effect of the change in valuation allowance on the benefit from income taxes was as follows:

	2012			2011			2010
	(In thousands)
Benefit from income taxes	$	(330,740	)	$	(196,835	)	$	(145,334	)
Change in valuation allowance		329,175			198,428			149,669
(Benefit from) provision for income taxes	$	(1,565	)	$	1,593		$	4,335

Components of the provision for (benefit from) income taxes

The following summarizes the components of the (benefit from) provision for income taxes:

	2012			2011			2010
	(In thousands)
Current	$	(4,251	)	$	598		$	1,618
Deferred		90			(945	)		(19	)
Other		2,596			1,940			2,736
(Benefit from) provision for income taxes	$	(1,565	)	$	1,593		$	4,335

Reconciliation of federal statutory income tax rate

The reconciliation of the federal statutory income tax benefit rate to the effective income tax (benefit) rate is as follows:

	2012		2011			2010
Federal statutory income tax benefit rate	(35.0)	%		(35.0)	%		(35.0)	%
Valuation allowance	35.4			41.0			41.6
Tax exempt municipal bond interest	(0.8)			(5.4)			(10.5)
Other, net	0.2			(0.3)			5.1
Effective income tax (benefit) rate	(0.2)	%		0.3	%		1.2	%

Reconciliation of unrecognized tax benefits

Under current guidance, when evaluating a tax position for recognition and measurement, an entity shall presume that the tax position will be examined by the relevant taxing authority that has full knowledge of all relevant information. The interpretation adopts a benefit recognition model with a two-step approach, a more-likely-than-not threshold for recognition and derecognition, and a measurement attribute that is the greatest amount of benefit that is cumulatively greater than 50% likely of being realized. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	Unrecognized tax benefits
	2012			2011		2010
				(In thousands)
Balance at beginning of year	$	110,080		$	109,282	$	91,117
Additions based on tax positions related to the current year		-			-		-
Additions for tax positions of prior years		511			798		18,165
Reductions for tax positions of prior years		(4,041	)		-		-
Settlements		(2,000	)		-		-
Balance at end of year	$	104,550		$	110,080	$	109,282