Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Schedule of Components of Income Tax Expense (Benefit)

The following schedule discloses significant components of income tax expense (benefit) for each year presented:



	Year Ended December 31,
	2017			2016			2015
	(in thousands)
Current tax expense (benefit):
U.S. Federal	$	(52,501	)	$	(99,443	)	$	105,992
State and local	0			49			129
Total	(52,501		)	(99,394		)	106,121
Deferred tax expense (benefit):
U.S. Federal	(102,153		)	25,525			(116,762		)
Total	(102,153		)	25,525			(116,762		)
Total income tax expense (benefit)	(154,654		)	(73,869		)	(10,641		)
Total income tax expense (benefit) reported in equity related to:
Other comprehensive income (loss)	43,372			3,322			(61,322		)
Additional paid-in capital	824			587			(6,560		)
Total income tax expense (benefit)	$	(110,458	)	$	(69,960	)	$	(78,523	)

Schedule of Effective Income Tax Rate Reconciliation

The differences between income taxes expected at the U.S. federal statutory income tax rate of 35% and the reported income tax expense (benefit) are summarized as follows:



	Year Ended December 31,
	2017			2016			2015
	(in thousands)
Expected federal income tax expense	$	59,591		$	112,472		$	174,077
Non-taxable investment income	(157,408		)	(146,324		)	(161,407		)
Tax credits	(29,506		)	(30,916		)	(24,232		)
Domestic production activities deduction, net	(10,448		)	(9,488		)	0
Changes in tax law	(17,576		)	0			0
Other	693			387			921
Reported income tax expense (benefit)	$	(154,654	)	$	(73,869	)	$	(10,641	)
Effective tax rate	(90.8		)%	(22.9		)%	(2.1		)%

Schedule of Deferred Tax Assets and Liabilities



	As of December 31,
	2017			2016
	(in thousands)
Deferred tax assets:
Insurance reserves	$	171,504		$	148,115
Other	0			1,966
Deferred tax assets	171,504			150,081
Deferred tax liabilities:
Deferred policy acquisition costs	39,501			45,405
Net unrealized gains on securities	61,294			24,949
Investments	96,385			171,303
Other	7,944			0
Deferred tax liabilities	205,124			241,657
Net deferred tax asset (liability)	$	(33,620	)	$	(91,576	)

Unrecognized Tax Benefits Reconciliation

The following table reconciles the total amount of unrecognized tax benefits at the beginning and end of the periods indicated.



	2017		2016		2015
	(in thousands)
Balance at January 1,	$	9,488	$	0	$	0
Increases in unrecognized tax benefits-prior years	12,373		4,744		0
(Decreases) in unrecognized tax benefits-prior years	0		0		0
Increases in unrecognized tax benefits-current year	8,335		4,744		0
(Decreases) in unrecognized tax benefits-current year	0		0		0
Settlements with taxing authorities	0		0		0
Balance at December 31,	$	30,196	$	9,488	$	0
Unrecognized tax benefits that, if recognized, would favorably impact the effective rate	$	30,196	$	9,488	$	0