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Income Tax
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Tax Disclosure
Total income tax expense (benefit) is allocated as follows:
Year Ended December 31
202320222021
(in millions of dollars)
Net Income$356.3 $342.8 $279.6 
Stockholders' Equity - Accumulated Other Comprehensive Income (Loss)
Change in Net Unrealized Gain (Loss) on Securities
300.6 (1,890.8)(346.9)
Change in the Effect of Discount Rate Assumptions on the Liability for Future Policy and Contract Benefits, Net of Reinsurance
(256.5)2,385.1 622.8 
Change in Net Gain (Loss) on Hedges(17.0)(19.2)(9.8)
Change in Foreign Currency Translation Adjustment0.9 (0.1)4.2 
Change in Unrecognized Pension and Postretirement Benefit Costs(2.7)18.9 42.1 
Total$381.6 $836.7 $592.0 

A reconciliation of the income tax provision at the U.S. federal statutory rate to the income tax rate as reported in our consolidated statements of income is as follows:
Year Ended December 31
202320222021
Statutory Income Tax21.0 %21.0 %21.0 %
Policyholder Reserves(0.6)(1.7)2.0 
Other Items, Net1.3 0.3 (0.8)
Effective Tax21.7 %19.6 %22.2 %

Our net deferred tax asset consists of the following.
December 31
20232022
(in millions of dollars)
Deferred Tax Asset
Invested Assets$354.5 $664.9 
   Reserves462.6 116.4 
   Employee Benefits161.9 158.3 
   Other35.8 34.4 
Gross Deferred Tax Asset1,014.8 974.0 
   Less: Valuation Allowance11.0 10.3 
Net Deferred Tax Asset1,003.8 963.7 
Deferred Tax Liability
   Deferred Acquisition Costs175.1 177.7 
   Fixed Assets 36.7 48.9 
   Cost of Reinsurance119.7 131.6 
   Other49.9 44.7 
Gross Deferred Tax Liability381.4 402.9 
Net Deferred Tax Asset
$622.4 $560.8 
Our consolidated statements of income include amounts subject to both domestic and foreign taxation. The income and related tax expense (benefit) are as follows:
Year Ended December 31
202320222021
(in millions of dollars)
Income Before Tax
   Domestic$1,506.2 $1,596.8 $1,150.5 
   Foreign133.9 153.2 110.1 
   Total$1,640.1 $1,750.0 $1,260.6 
Current Tax Expense (Benefit)
   Federal$440.4 $306.5 $180.7 
   State and Local(2.5)12.7 2.6 
   Foreign14.1 154.3 29.5 
   Total452.0 473.5 212.8 
Deferred Tax Expense (Benefit)
   Federal(106.2)42.7 54.0 
   State and Local(1.5)1.1 (2.2)
   Foreign12.0 (174.5)15.0 
   Total(95.7)(130.7)66.8 
Total Tax Expense$356.3 $342.8 $279.6 

On June 10, 2021, the Finance Act 2021 was enacted, resulting in a U.K. tax increase from 19 percent to 25 percent, effective April 1, 2023, which resulted in $23.6 million of additional tax expense in operating earnings for the revaluation of our deferred tax assets and liabilities in 2021.

As of December 31, 2023, our plans for future repatriations of cash from our foreign subsidiaries can include no more than the amount of capital above that which is required by U.K. regulatory capital requirements.  The remainder of our investment in our foreign subsidiaries is indefinitely reinvested.

Our consolidated statements of income include the following changes in unrecognized tax benefits.
December 31
202320222021
(in millions of dollars)
Balance at Beginning of Year$177.4 $198.8 $219.7 
Decreases for Tax Positions Related to Prior Years(20.7)(21.0)(20.9)
Lapse of the Applicable Statute of Limitations— (0.4)— 
Balance at End of Year156.7 177.4 198.8 
Less Tax Attributable to Temporary Items Included Above(42.4)(63.5)(84.7)
Total Unrecognized Tax Benefits That if Recognized Would Affect the Effective Tax Rate$114.3 $113.9 $114.1 
In 2018, we recorded $261.1 million gross unrecognized tax benefits for a policyholder reserves position taken on our 2017 federal tax return, which if recognized, would decrease our tax expense by $112.9 million. The balances of unrecognized tax benefits for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility are $42.4 million at December 31, 2023, $63.5 million at December 31, 2022, and $84.7 million at December 31, 2021. It is reasonably possible that this item could reverse in the next 12 months following review by the IRS. We recognize interest expense and penalties, if applicable, related to unrecognized tax benefits in tax expense. We recognized $12.2 million, $7.8 million, and $5.5 million of interest expense related to unrecognized tax benefits during 2023, 2022, and 2021, respectively. The liability for net interest expense on uncertain tax positions was approximately $46.2 million, $34.0 million, and $26.2 million as of December 31, 2023, 2022, and 2021, respectively.

We file federal and state income tax returns in the United States and in foreign jurisdictions. Tax years 2013, 2016, 2017 and tax years subsequent to 2018 remain subject to examination by the IRS. All major foreign jurisdictions remain subject to examination for tax years subsequent to 2021 with the exception of Poland for which tax years subsequent to 2017 remain subject to examination. We believe sufficient provision has been made for all potential adjustments for years that are not closed by the statute of limitations in all major tax jurisdictions and that any such adjustments would not have a material adverse effect on our financial position, liquidity, or results of operations.

We file state income tax returns in nearly every state in the United States. Tax years subsequent to 2017 remain subject to examination depending on the statute of limitation established by the various states, which is generally three to four years.

As of December 31, 2023, we have no federal net operating loss or capital loss carryforwards. We have net operating loss carryforwards for state and local income tax of approximately $183.9 million, most of which is expected to expire unused between 2024 and 2043.

We record valuation allowances to reduce deferred tax assets to the amount that is more likely than not to be realized.  Our valuation allowance was $11.0 million and $10.3 million at December 31, 2023 and 2022, respectively, the majority of which related to our cumulative deferred state income tax benefits. The de minimis remaining amount of our valuation allowance relates to unrealized tax losses on buildings which we own and occupy in the U.K. We recorded an increase in our valuation allowance of $0.7 million during 2023 and a decrease of $2.4 million in 2022, primarily in other comprehensive income.

Total income taxes paid during 2023 and 2022 were $446.0 million and $375.0 million, respectively. Total income taxes refunded during 2021 were $51.0 million.