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Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Loews Corporation and its eligible subsidiaries file a consolidated federal income tax return. Loews Corporation has entered into a separate tax allocation agreement with CNA, a majority-owned subsidiary in which its ownership exceeds 80%. The agreement provides that Loews Corporation will: (i) pay to CNA the amount, if any, by which Loews Corporation’s consolidated federal income tax is reduced by virtue of inclusion of CNA in Loews Corporation’s return or (ii) be paid by CNA an amount, if any, equal to the federal income tax that would have been payable by CNA if it had filed a separate consolidated return. The agreement may be canceled by either of the parties upon thirty days written notice.

For 2019 through 2021, the Company participates in the Internal Revenue Service (“IRS”) Compliance Assurance Process (“CAP”), which is a voluntary program for large corporations. Under CAP, the IRS conducted a real-time audit and worked contemporaneously with the Company to resolve any issues prior to the filing of the 2019 tax return. The 2019 examination is completed. For 2020 and 2021, the Company was selected to participate in the phase of CAP reserved for taxpayers whose risk of noncompliance does not support use of IRS resources. The Company believes that participation in CAP should reduce tax-related uncertainties, if any. Although the outcome of tax audits is always uncertain, the Company believes that any adjustments resulting from audits will not have a material impact on its results of operations, financial position or cash flows. The Company and/or its subsidiaries also file income tax returns in various state, local and foreign jurisdictions. These returns, with few exceptions, are no longer subject to examination by the various taxing authorities before 2017.
The current and deferred components of income tax expense (benefit) are as follows:

Year Ended December 31
202120202019
(In millions)   
    
Income tax expense (benefit):   
Federal:   
Current$239 $43 $108 
Deferred197 (260)47 
State and city:
Current13 1 18 
Deferred13 13 22 
Foreign17 30 53 
Total$479 $(173)$248 

The components of U.S. and foreign income before income tax and a reconciliation between the federal income tax expense at statutory rates and the actual income tax expense (benefit) is as follows:

Year Ended December 31
202120202019
(In millions)   
    
Income (loss) before income tax:   
U.S.$2,058 $(768)$1,145 
Foreign124 (696)(26)
Total$2,182 $(1,464)$1,119 
 
Income tax expense (benefit) at statutory rate$458 $(307)$235 
Increase (decrease) in income tax expense (benefit) resulting from:
Effect of the 2017 tax act(14)
Exempt investment income(48)(49)(50)
Foreign related tax differential(2)63 (55)
Taxes related to domestic affiliate40 (15)
Valuation allowance1 55 12 
Unrecognized tax positions, settlements and adjustments relating to prior years68 97 
State taxes24 4 37 
Other6 (7)1 
Income tax expense (benefit)$479 $(173)$248 

As of December 31, 2021, no deferred taxes are required on the undistributed earnings of subsidiaries subject to tax.
A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding tax carryforwards and interest and penalties, is as follows:

Year Ended December 31
202120202019
(In millions)   
    
Balance at January 1$2 $121 $58 
Additions for tax positions related to the current year68 86 
Additions for tax positions related to a prior year2 
Reductions for tax positions related to a prior year(23)
Lapse of statute of limitations(2)
Reduction due to deconsolidation of subsidiaries(2)(187)
Balance at December 31
$— $2 $121 

As of December 31, 2021, there were no unrecognized tax benefits or related accrued interest and penalties that would affect the effective tax rate if recognized.

Accrued interest related to unrecognized tax benefits and tax refund claims is recognized in Income tax expense (benefit) on the Consolidated Statements of Operations. Penalties are recognized in Income tax expense (benefit) on the Consolidated Statements of Operations. No interest expense (benefit) and no penalties were recorded for the year ended December 31, 2021, and amounts recorded were insignificant for the years ended December 31, 2020 and 2019.
The following table summarizes deferred tax assets and liabilities:

December 3120212020
(In millions)  
   
Deferred tax assets:  
Insurance reserves:  
Property and casualty claim and claim adjustment expense reserves$173 $157 
Unearned premium reserves193 174 
Receivables11 11 
Employee benefits111 197 
Deferred retroactive reinsurance benefit90 83 
Net operating loss carryforwards29 13 
Tax credit carryforwards4 11 
Basis differential in investment in subsidiary8 8 
Other180 189 
Total deferred tax assets799 843 
Valuation allowance(15)(13)
Net deferred tax assets784 830 
   
Deferred tax liabilities:  
Deferred acquisition costs(99)(93)
Net unrealized gains(275)(441)
Property, plant and equipment(751)(721)
Basis differential in investment in subsidiary(503)(432)
Other liabilities(190)(165)
Total deferred tax liabilities(1,818)(1,852)
 
Net deferred tax liabilities (a)
$(1,034)$(1,022)

(a)Includes $45 and $43 of deferred tax assets reflected in Other assets in the Consolidated Balance Sheets at December 31, 2021 and 2020.

Net operating loss carryforwards in foreign tax jurisdictions of $29 million and foreign tax credit carryforwards of $4 million have no expiration.

Although realization of deferred tax assets is not assured, management believes it is more likely than not that the recognized deferred tax assets will be realized through recoupment of ordinary and capital taxes paid in prior carryback years and through future earnings, reversal of existing temporary differences and available tax planning strategies. Due to the mix of state tax jurisdictions in which our subsidiaries operate, as of December 31, 2021, a valuation allowance of $15 million was recorded related primarily to state net operating losses.