Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of Components of Income Tax Expense (Benefit)

The following table summarizes the provision for income taxes:



	Year Ended December 31,
	2019			2018			2017
Federal:
Current	$	58		$	(1,510	)	$	(1,147	)
Deferred	(4,520		)	(1,240		)	(9,911		)
Benefit for Federal income tax expense	(4,462		)	(2,750		)	(11,058		)

State:
Current	1,100			(654		)	496
Deferred	241			(1,229		)	1,327
Provision (benefit) for State income tax expense	1,341			(1,883		)	1,823
Benefit for income taxes	$	(3,121	)	$	(4,633	)	$	(9,235	)

Tax Expense Reconciliation

The actual income tax expense differs from the expected income tax expense computed by applying the combined applicable effective federal and state tax rates to income before the provision for income taxes as follows:



	Year Ended December 31,
	2019			2018			2017
Expected income tax expense at federal rate	$	(6,847	)	$	(875	)	$	319
State tax expense, net of federal deduction benefit	(882		)	(1,205		)	366
Dividend received deduction	(195		)	(170		)	(294		)
Other permanent items	1,349			564			128
Prior period accrual adjustment	3,415			(1,391		)	(2,263		)
Municipal tax-exempt interest	(587		)	(735		)	(1,398		)
Valuation allowance	989			—			—
Change in enacted tax rate⁽¹⁾	—			—			(6,777		)
Change in special loss discount account	—			(821		)	—
Other, net	(363		)	—			684
Reported income tax expense (benefit)	$	(3,121	)	$	(4,633	)	$	(9,235	)

⁽¹⁾ Pursuant to the recently enacted 2017 Tax Act legislation.

Schedule of Deferred Tax Assets and Liabilities

The table below summarizes the significant components of our net deferred tax liability:



	December 31,
	2019			2018
Deferred tax assets:
Unearned premiums	$	19,482		$	19,661
Unrealized loss	—			2,145
Tax-related discount on loss reserve	2,300			2,055
Dual consolidated loss carryforward	2,181			—
Net operating loss carryforward	8,709			—
Other	1,451			999
Total pre-allowance deferred tax assets	34,123			24,860
Valuation allowance	(989		)	—
Total deferred tax assets	33,134			24,860
Deferred tax liabilities:
Deferred acquisitions costs	(27,939		)	(26,966		)
Unrealized gain	(10,484		)	—
Intangible assets	(5,631		)	(7,397		)
Prepaid expenses	(762		)	(665		)
Investments	(152		)	(221		)
Fixed assets	(2,728		)	(1,864		)
Total deferred tax liabilities	(47,696		)	(37,113		)
Net deferred tax liability	$	(14,562	)	$	(12,253	)