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Federal Income Taxes
3 Months Ended
Mar. 31, 2020
Federal Income Taxes [Abstract]  
Federal Income Taxes

6. Federal Income Taxes

The effective tax rate is the ratio of tax expense (benefit) over pre-tax income (loss). The effective tax rate was -53% and 6% for the three months ended March 31, 2020 and 2019, respectively. The effective tax rate on pre-tax income is typically lower than the prevailing corporate federal income tax rate of 21% due to benefits from preferential tax items including the separate accounts dividends-received deduction and tax credits. The current quarter’s effective tax rate was lower than the comparable quarter in the prior year primarily as a result of the effects of preferential tax items being additive to the tax benefit at 21% on unfavorable variable annuity net derivative results, resulting in a calculated tax benefit on pre-tax income and an associated negative tax rate.