Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

Reconciliation of the change in the amount of unrecognized tax benefits

The reconciliation of the change in the amount of unrecognized tax benefits for the years ended December 31 is as follows:



($ in millions)	2016		2015		2014
Balance – beginning of year	$	7	$	—	$	—
Increase for tax positions taken in a prior year	—		4		—
Decrease for tax positions taken in a prior year	—		—		—
Increase for tax positions taken in the current year	3		3		—
Decrease for tax positions taken in the current year	—		—		—
Decrease for settlements	—		—		—
Reductions due to lapse of statute of limitations	—		—		—
Balance – end of year	$	10	$	7	$	—

Components of the deferred income tax assets and liabilities

The components of the deferred income tax assets and liabilities as of December 31 are as follows:



($ in millions)	2016			2015
Deferred assets
Unearned premium reserves	$	819		$	796
Pension	294			236
Accrued compensation	203			189
Discount on loss reserves	188			203
Difference in tax bases of invested assets	78			202
Other postretirement benefits	64			76
Other assets	118			137
Total deferred assets	1,764			1,839
Deferred liabilities
DAC	(1,211		)	(1,157		)
Unrealized net capital gains	(529		)	(303		)
Life and annuity reserves	(324		)	(260		)
Other liabilities	(187		)	(209		)
Total deferred liabilities	(2,251		)	(1,929		)
Net deferred liability	$	(487	)	$	(90	)

Components of income tax expense

The components of income tax expense for the years ended December 31 are as follows:



($ in millions)	2016		2015		2014
Current	$	654	$	1,033	$	1,123
Deferred	223		78		263
Total income tax expense	$	877	$	1,111	$	1,386

Reconciliation of the statutory federal income tax rate to the effective income tax rate on income from operations

A reconciliation of the statutory federal income tax rate to the effective income tax rate on income from operations for the years ended December 31 is as follows:



	2016		2015		2014
Statutory federal income tax rate	35.0	%	35.0	%	35.0	%
Tax-exempt income	(1.2	)	(1.0	)	(0.9	)
Tax credits	(1.2	)	(0.9	)	(0.7	)
Sale of subsidiary	—		—		(0.9	)
Other ⁽¹⁾	(0.7	)	0.8		0.2
Effective income tax rate	31.9	%	33.9	%	32.7	%

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⁽¹⁾	Includes $45 million of income tax expense related to the change in accounting guidance for investments in qualified affordable housing projects adopted in 2015.