INCOME TAXES

The actual income tax expense (benefit) for the three months ended March 31, 2018 and 2017 differed from the “expected” income tax expense (benefit) for those periods (computed by applying the United States federal corporate tax rates of 21 percent during 2018 and 35 percent during 2017 to income (loss) before income tax) as follows:



	Three months ended March 31,
($ in thousands)	2018			2017
Computed "expected" income tax expense (benefit)	$	(111	)	$	2,954
Increases (decreases) in tax resulting from:
Tax-exempt interest income	(310		)	(705		)
Dividends received deduction	(123		)	(306		)
Proration of tax-exempt interest and dividends received deduction	108			152
Other, net	(16		)	(459		)
Total income tax expense (benefit)	$	(452	)	$	1,636

Pursuant to Staff Accounting Bulletin No. 118 issued by the Securities Exchange Commission, the Company made reasonable estimates of the effects the Tax Cuts and Jobs Act of 2017 (TCJA) had on deferred income tax assets and liabilities at December 31, 2017. For items where the Company could not make a reasonable estimate, primarily loss reserve discounting, the Company used existing accounting guidance and the provisions of the tax laws that were in place prior to the enactment. Beginning in the first quarter of 2018, the Company is using estimated industry discount factors until further guidance and updated discount factors are released by the Internal Revenue Service (IRS). The Company continues to gather information to provide a more precise re-measurement of deferred income tax assets and liabilities, and expects to complete its analysis of the effects of the TCJA within a year of the enactment date.

The Company had no provision for uncertain income tax positions at March 31, 2018 or December 31, 2017. The Company recognized no interest expense or other penalties related to U.S. federal or state income taxes during the three months ended March 31, 2018 or 2017. 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 2014.