Income Taxes

The provision for income taxes is comprised of the following:



	Year Ended December 31,
	2016		2015		2014
Current	$	32,031	$	76,842	$	80,859
Deferred	53,481		21,682		75,044
Total income tax provision	$	85,512	$	98,524	$	155,903

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,
	2016		2015		2014
Statutory federal income tax rate	35.0	%	35.0	%	35.0	%
Income tax effect of:
Investment income not subject to federal tax	(3.0	)%	(3.0	)%	(1.8	)%
Tax credits	(6.9	)%	(0.2	)%	(0.3	)%
State income taxes, net of federal benefit	2.3	%	3.2	%	1.0	%
Income tax contingency provisions	—	%	—	%	(1.2	)%
Other, net	(0.4	)%	(0.9	)%	0.2	%
Effective federal income tax rate	27.0	%	34.1	%	32.9	%

A reconciliation of unrecognized tax benefits is as follows:



	Year Ended December 31,
	2016			2015			2014
Balance, beginning of year	$	23,093		$	26,890		$	21,154
Additions to tax positions in the current year	—			1,383			13,931
Additions to tax positions in the prior year	1,902			50			—
Reductions to tax positions from statutes expiring	(7,727		)	(5,230		)	(8,195		)
Balance, end of year	$	17,268		$	23,093		$	26,890

There were no tax benefits included in the unrecognized tax benefits of $17,268 at December 31, 2016, that would impact the annual effective tax rate. The Company does not anticipate material changes to its unrecognized tax benefits in the next twelve months.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits in current income tax expense. The Company recognized decreases of $153, $193, and $2,916 in interest and penalties related to the uncertain tax positions during the years ended December 31, 2016, 2015, and 2014, respectively. The Company had approximately $864 and $1,017 accrued for the payment of interest and penalties at December 31, 2016, and 2015, 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 2012 and prior. Tax years 2013 through 2015 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,
	2016				2015
	Deferred		Deferred		Deferred		Deferred
	tax asset		tax liability		tax asset		tax liability
Policyholder reserves	$	—	$	278,632	$	—	$	262,822
Deferred acquisition costs	—		28,071		—		8,533
Investment assets	—		233,583		—		221,303
Policyholder dividends	8,583		—		8,919		—
Net operating loss carryforward	96,693		—		113,637		—
Pension plan accrued benefit liability	83,562		—		79,945		—
Goodwill	—		35,306		—		33,034
Experience rated refunds	6,654		—		12,673		—
Tax credits	168,597		—		154,017		—
Other	19,592		—		19,385		—
Total deferred taxes	$	383,681	$	575,592	$	388,576	$	525,692

The deferred tax liability amounts presented for investment assets above include $172,405 and $171,780 related to the net unrealized losses (gains) on the Company’s investments, which are classified as available-for-sale at December 31, 2016, and 2015, 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.

As of December 31, 2016, the subsidiary had net operating loss carry forwards expiring as follows:



Year	Amount
2021	$	5,977
2022	136,796
2023	81,693
2028	2,215
Total	$	226,681

During the years ended December 31, 2016, 2015, and 2014, the Company generated $215, $3,295, and $15,506 of Guaranteed Federal Low Income Housing tax credit carryforwards, respectively. As of December 31, 2016, the total credit carryforward for Low Income Housing is $143,105. These credits will begin to expire in 2030.

The Company generated $4,286 of foreign tax credit carryforwards during the year ended December 31, 2016. During the years ended December 31, 2010 through December 31, 2015, the Company generated credit carryforwards of $21,025. The Company determined in 2016 that it will amend its prior year previously filed federal income tax returns in order to elect to claim foreign tax credits in lieu of foreign tax expense. These credits will begin to expire in 2020.

Included in due from parent and affiliates at December 31, 2016, and 2015 is $35,093 and $11,790, 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, 2016, and 2015 is $7,819 and $7,721, respectively, of income taxes receivable in other assets primarily related to the separate state income tax returns filed by certain subsidiaries.