Federal Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

The following table summarizes the components of federal income tax expense (benefit) for the years ended:


	December 31,
(in millions)	2018			2017			2016
Current tax (benefit) expense¹	$	(21	)	$	(177	)	$	61
Deferred tax expense (benefit)¹		232			(231	)		65

Total federal income tax expense (benefit)	$	211		$	(408	)	$	126

1	Includes reclassification of AMT credit carryforwards from deferred tax assets to an income tax receivable as a result of the Tax Cuts and Jobs Act for the year ended December 31, 2017.

Summary of Amount Computed by Applying U.S. Federal Income Tax Rate to Income

The following table summarizes how the total federal income tax expense (benefit) differs from the amount computed by applying the U.S. federal income tax rate to net income for the years ended:


	December 31,
	2018						2017						2016
(in millions)	Amount			%			Amount			%			Amount			%
Income before federal income taxes and noncontrolling interests	$	1,448					$	901					$	904
Rate reconciliation:
Computed (expected tax expense)	$	304			21	%	$	315			35	%	$	316			35	%
Dividends received deduction		(45	)		(3	)%		(128	)		(14	)%		(144	)		(16	)%
Tax credits		(54	)		(4	)%		(90	)		(10	)%		(81	)		(9	)%
Impact of enacted tax law changes¹		(28	)		(2	)%		(530	)		(59	)%		—			—	%
Other, net		34			3	%		25			3	%		35			4	%

Total federal income tax expense (benefit)	$	211			15	%	$	(408	)		(45	)%	$	126			14	%

Includes the waived $11 million of government sequestration fees and $17 million of tax benefits related to the Tax Cuts and Jobs Act for the year ended December 31, 2018. Includes the remeasurement of deferred tax assets and liabilities of $(541) million and government sequestration fees of $11 million as a result of the Act for the year ended December 31, 2017.

Net Deferred Tax Liability

The following table summarizes the tax effects of temporary differences that gave rise to significant components of the net deferred tax liability included in other liabilities in the consolidated balance sheets, as of the dates indicated:


	December 31,
(in millions)	2018			2017
Deferred tax assets
Future policy benefits and claims	$	544		$	781
Tax credit carryforwards		387			350
Other		239			280

Gross deferred tax assets	$	1,170		$	1,411
Valuation allowance		(22	)		(10	)

Gross deferred tax assets, net of valuation allowance	$	1,148		$	1,401

Deferred tax liabilities
Deferred policy acquisition costs	$	1,186		$	971
Available-for-sale securities		54			589
Other		211			311

Gross deferred tax liabilities	$	1,451		$	1,871

Net deferred tax liability	$	303		$	470

Uncertain Tax Positions

The following table is a rollforward of the beginning and ending uncertain tax positions, including permanent and temporary differences, but excluding interest and penalties:


(in millions)	2018			2017			2016
Balance at beginning of period	$	10		$	36		$	36
Additions for current year tax positions		—			2			1
Additions for prior year tax positions		(1	)		—			1
Reductions for prior years’ tax positions		—			(28	)		(2	)

Balance at end of period	$	9		$	10		$	36