Income Taxes

The provision for income taxes is comprised of the following:



	Year Ended December 31,
	2014		2013			2012
Current	$	80,859	$	82,878		$	89,934
Deferred	75,044		(24,087		)	45,371
Total income tax provision	$	155,903	$	58,791		$	135,305

The following table presents a reconciliation between the statutory federal income tax rate and the Company’s effective federal income tax rate:



	Year Ended December 31,
	2014		2013		2012
Statutory federal income tax rate	35.0	%	35.0	%	35.0	%
Income tax effect of:
Investment income not subject to federal tax	(1.8	)%	(4.6	)%	(2.3	)%
Tax credits	(0.3	)%	(2.0	)%	(1.3	)%
State income taxes, net of federal benefit	1.0	%	3.3	%	1.2	%
Income tax contingency provisions	(1.2	)%	(0.4	)%	—	%
Other, net	0.2	%	—	%	3.6	%
Effective federal income tax rate	32.9	%	31.3	%	36.2	%

A reconciliation of unrecognized tax benefits is as follows:



	Year Ended December 31,
	2014			2013			2012
Balance, beginning of year	$	21,154		$	25,850		$	32,123
Additions to tax positions in the current year	13,931			—			6,230
Additions to tax positions in the prior year	—			1,497			420
Reductions to tax positions in the prior year	—			(180		)	(10,219		)
Reductions to tax positions from statutes expiring	(8,195		)	(6,013		)	(2,704		)
Balance, end of year	$	26,890		$	21,154		$	25,850

Included in the unrecognized tax benefits of $26,890 at December 31, 2014 was $545 of tax benefits that, if recognized, would impact the annual effective tax rate. The Company anticipates additional increases in its unrecognized tax benefits of $6,000 to $7,000 in the next twelve months, primarily due to changes in the composition of the consolidated group.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits in current income tax expense. The Company recognized approximately $(2,916), $(286) and $208 in interest and penalties related to the uncertain tax positions during the years ended December 31, 2014, 2013 and 2012, respectively. The Company had approximately $1,210 and $4,126 accrued for the payment of interest and penalties at December 31, 2014 and 2013, respectively.

The Company files income tax returns in the U.S. federal jurisdiction and various states. With few exceptions, the Company is no longer subject to U.S. federal income tax examinations by tax authorities for years 2010 and prior. Tax years 2011 through 2013 are open to federal examination by the I.R.S. The Company does not expect significant increases or decreases to unrecognized tax benefits relating to federal, state or local audits.

Deferred income taxes represent the tax effect of the differences between the book and tax bases of assets and liabilities. The tax effect of temporary differences, which give rise to the deferred tax assets and liabilities, is as follows:



	December 31,
	2014				2013
	Deferred		Deferred		Deferred		Deferred
	tax asset		tax liability		tax asset		tax liability
Policyholder reserves	$	—	$	255,926	$	—	$	253,738
Deferred acquisition costs	2,467		—		1,008		—
Investment assets	—		426,477		—		203,363
Policyholder dividends	10,002		—		11,479		—
Net operating loss carryforward	122,177		—		172,414		—
Pension plan accrued benefit liability	84,351		—		53,937		—
Goodwill	—		26,022		—		25,563
Experience rated refunds	13,431		—		5,509		—
Tax credits	149,516		—		131,052		—
Other	11,865		—		416		—
Total deferred taxes	$	393,809	$	708,425	$	375,815	$	482,664

The deferred tax liability amounts presented for investment assets above include $381,838 and $209,434 related to the net unrealized losses (gains) on the Company’s investments, which are classified as available-for-sale at December 31, 2014 and 2013, respectively.

The Company, together with certain of its subsidiaries, and Lifeco U.S. have entered into an income tax allocation agreement whereby Lifeco U.S. files a consolidated federal income tax return. Under the agreement, these companies are responsible for and will receive the benefits of any income tax liability or benefit computed on a separate tax return basis.

The Company has federal net operating loss carry forwards generated by a subsidiary that is included in the Lifeco U.S. consolidated federal income tax return. As of December 31, 2014, the subsidiary had net operating loss carry forwards expiring as follows:



Year	Amount
2021	$	51,677
2022	136,796
2023	81,693
2028	3,390
Total	$	273,556

During the years ended December 31, 2014, 2013 and 2012, the Company generated $15,506, $25,013 and $30,965 of Guaranteed Federal Low Income Housing tax credit carryforwards, respectively. As of December 31, 2014, the total credit carryforward for Low Income Housing is $140,055. These credits will begin to expire in 2030.

Included in due from parent and affiliates at December 31, 2014 and 2013 is $13,400 and $65,186, respectively, of income taxes receivable primarily from Lifeco U.S. related to the consolidated income tax return filed by the Company and certain subsidiaries.

Included in the consolidated balance sheets at December 31, 2014 and 2013 is $7,176 and $7,736, respectively, of income taxes receivable in other assets primarily related to the separate state income tax returns filed by certain subsidiaries.