INCOME TAXES (TABLES)

12 Months Ended

Dec. 31, 2016

Income Tax Disclosure [Abstract]

SCHEDULE OF INCOME TAX EXPENSE AND NET TAX ASSETS

The following table provides an analysis of our income tax expense and net tax assets:

Year ended December 31,	2016			2015			2014
Current income tax expense
U.S.	$	606		$	4,927		$	8,411
Europe	7,451			144			16,582
Other	—			5			1
Deferred income tax expense (benefit)
U.S.	(1,829		)	(267		)	1,313
Europe	112			(1,781		)	(399		)
Other	—			—			—
Total income tax expense	$	6,340		$	3,028		$	25,908
Net current tax receivables (payables)	$	3,540		$	(69	)	$	(11,203	)
Net deferred tax assets	103,313			104,762			89,405
Net tax assets	$	106,853		$	104,693		$	78,202

SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES

The significant components of our deferred tax assets and liabilities were as follows:

At December 31,	2016			2015
Deferred tax assets:
Discounting of loss reserves	$	47,258		$	50,928
Unearned premiums	41,797			40,861
Net unrealized losses on investments	—			2,161
Operating and capital loss carryforwards	43,687			36,080
Accruals not currently deductible	59,098			58,042
Other investment adjustments and impairments	84			917
Tax credits	10,139			12,961
Other deferred tax assets	3,684			2,261
Deferred tax assets before valuation allowance	205,747			204,211
Valuation allowance	(41,100		)	(40,331		)
Deferred tax assets net of valuation allowance	164,647			163,880
Deferred tax liabilities:
Deferred acquisition costs	(45,788		)	(41,170		)
Net unrealized gains on investments	(1,168		)	—
Amortization of intangible assets and goodwill	(13,096		)	(11,972		)
Equalization reserves	—			(4,493		)
Other deferred tax liabilities	(1,282		)	(1,483		)
Deferred tax liabilities	(61,334		)	(59,118		)
Net deferred tax assets	$	103,313		$	104,762

SUMMARY OF TAX CREDITS

Below is a summary of our total operating and capital loss carryforwards and tax credits:

At December 31,	2016		2015
Operating and Capital Loss Carryforwards(1)
Singapore (branch) operating loss carryforward	$	83,532	$	102,430
Australia (branch) operating loss carryforward	147,193		121,575
Australia capital loss carryforward	4,207		4,207
United Kingdom operating loss carryforward	19,306		22,002
Switzerland (branch) operating loss carryforward	—		378
Ireland operating loss carryforward	—		3,258
Ireland capital loss carryforward	716		716
U.S. operating loss carryforward	14,221		—
Tax Credits(1)
Ireland foreign tax credit	$	3,298	$	6,073
U.S. alternative minimum tax credit	6,840		6,888

(1) All operating and capital loss carryforwards and tax credits can be carried forward indefinitely with the exception of the U.S. net operating loss which will expire in 2036.

SUMMARY OF OPERATING AND CAPITAL LOSS CARRYFORWARDS

Below is a summary of our total operating and capital loss carryforwards and tax credits:

At December 31,	2016		2015
Operating and Capital Loss Carryforwards(1)
Singapore (branch) operating loss carryforward	$	83,532	$	102,430
Australia (branch) operating loss carryforward	147,193		121,575
Australia capital loss carryforward	4,207		4,207
United Kingdom operating loss carryforward	19,306		22,002
Switzerland (branch) operating loss carryforward	—		378
Ireland operating loss carryforward	—		3,258
Ireland capital loss carryforward	716		716
U.S. operating loss carryforward	14,221		—
Tax Credits(1)
Ireland foreign tax credit	$	3,298	$	6,073
U.S. alternative minimum tax credit	6,840		6,888

(1) All operating and capital loss carryforwards and tax credits can be carried forward indefinitely with the exception of the U.S. net operating loss which will expire in 2036.

VALUATION ALLOWANCE ROLL FORWARD

The following table provides an analysis of the movement in our valuation allowance:

At December 31,	2016			2015
Income tax expense:
Valuation allowance - beginning of year	$	40,331		$	34,865
Operating loss carryforwards	3,857			6,809
Foreign tax credit	(2,775		)	(1,573		)
Australian CTA and accruals and other foreign rate differentials	(313		)	1,001
Change in investment-related items	—			(771		)
Valuation allowance - end of year	$	41,100		$	40,331

EFFECTIVE TAX RATE RECONCILIATION

The following table presents the distribution of income before income taxes between domestic and foreign jurisdictions as well as a reconciliation of the actual income tax rate to the amount computed by applying the effective tax rate of 0% under Bermuda law to income before income taxes:

Year ended December 31,	2016			2015			2014
Income before income taxes
Bermuda (domestic)	$	469,306		$	652,235		$	690,517
Foreign	50,402			(7,576		)	139,955
Total income before income taxes	$	519,708		$	644,659		$	830,472
Reconciliation of effective tax rate (% of income before income taxes)
Expected tax rate	0.0		%	0.0		%	0.0		%
Foreign taxes at local expected rates:
U.S.	(0.6		)%	0.8		%	1.8		%
Europe	1.5		%	(0.2		)%	1.5		%
Other	—		%	(0.3		)%	—		%
Valuation allowance	0.2		%	1.2		%	1.1		%
Net tax exempt income	(0.2		)%	(0.1		)%	(0.7		)%
Other	0.3		%	(0.9		)%	(0.6		)%
Actual tax rate	1.2		%	0.5		%	3.1		%