INCOME TAXES

Temporary differences between the consolidated financial statement carrying amount and tax basis of assets and liabilities that give rise to significant portions of the deferred income tax asset (liability) at December 31, 2014 and 2013 are as follows:



	December 31,
	2014			2013
Loss reserve discounting	$	15,681		$	17,690
Unearned premium reserve limitation	15,648			14,764
Other policyholders' funds payable	3,553			2,972
Other, net	1,145			1,761
Total deferred income tax asset	36,027			37,187
Net unrealized holding gains on investment securities	(42,195		)	(26,049		)
Deferred policy acquisition costs	(13,770		)	(13,227		)
Retirement benefits	(5,712		)	(8,234		)
Other, net	(3,004		)	(2,499		)
Total deferred income tax liability	(64,681		)	(50,009		)
Net deferred income tax liability	$	(28,654	)	$	(12,822	)

Based upon anticipated future taxable income and consideration of all other available evidence, management believes that it is “more likely than not” that the Company’s deferred income tax assets will be realized.

The actual income tax expense for the years ended December 31, 2014, 2013 and 2012 differed from the “expected” income tax expense for those years (computed by applying the United States federal corporate tax rate of 35 percent to income before income tax expense) as follows:



	Year ended December 31,
	2014			2013			2012
Computed "expected" income tax expense	$	14,318		$	21,298		$	18,072
Increases (decreases) in tax resulting from:
Tax-exempt interest income	(3,285		)	(3,828		)	(4,433		)
Dividends received deduction	(828		)	(876		)	(723		)
Proration of tax-exempt interest and dividends received deduction	617			706			773
Other, net	93			34			(22		)
Total income tax expense	$	10,915		$	17,334		$	13,667

Comprehensive income tax expense included in the consolidated financial statements for the years ended December 31, 2014, 2013 and 2012 is as follows:



	Year ended December 31,
	2014			2013			2012
Income tax expense (benefit) on:
Operations	$	10,915		$	17,334		$	13,667
Change in unrealized holding gains on investment securities	16,146			(11,539		)	10,043
Change in funded status of retirement benefit plans:
Pension plans	(2,619		)	5,498			598
Postretirement benefit plans	(1,330		)	12,103			350
Comprehensive income tax expense	$	23,112		$	23,396		$	24,658

The Company had no provision for uncertain income tax positions at December 31, 2014 or 2013. The Company recognized $1 and $3 of interest income related to U.S. federal income taxes during 2014 and 2012, respectively. The Company did not recognize any interest expense or other penalties related to U.S. federal or state income taxes during 2014, 2013 or 2012. It is the Company’s accounting policy to reflect income tax penalties as other expense, and interest as interest expense.

The Company files a U.S. federal income tax return, along with various state income tax returns. The Company is no longer subject to U.S. federal and state income tax examinations by tax authorities for years before 2011. The Company's 2011 income tax return has been audited and no adjustments were proposed.