Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

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,
	2018			2017			2016
	(in thousands)
Current tax expense (benefit):
U.S. Federal	$	36,739		$	(52,502	)	$	(99,443	)
State and local	0			0			49
Total	36,739			(52,502		)	(99,394		)
Deferred tax expense (benefit):
U.S. Federal	(89,380		)	(104,326		)	30,902
Total	(89,380		)	(104,326		)	30,902
Total income tax expense (benefit)	(52,641		)	(156,828		)	(68,492		)
Total income tax expense (benefit) reported in equity related to:
Other comprehensive income (loss)	(55,174		)	43,372			3,322
Additional paid-in capital	0			824			587
Total income tax expense (benefit)	$	(107,815	)	$	(112,632	)	$	(64,583	)

Schedule of Effective Income Tax Rate Reconciliation

The differences between income taxes expected at the U.S. federal statutory income tax rate of 21% and applicable for 2018 and 35% applicable for the periods prior to 2018, and the reported income tax expense (benefit) are summarized as follows:



	Year Ended December 31,
	2018			2017			2016
	(in thousands)
Expected federal income tax expense	$	12,136		$	60,007		$	117,849
Non-taxable investment income	(49,845		)	(157,408		)	(146,324		)
Tax credits	(40,272		)	(29,506		)	(30,916		)
Domestic production activities deduction, net	0			(10,447		)	(9,488		)
Changes in tax law	3,618			(20,165		)	0
Settlements with taxing authorities	20,984			0			0
Other	738			691			387
Reported income tax expense (benefit)	$	(52,641	)	$	(156,828	)	$	(68,492	)
Effective tax rate	(91.1		)%	(91.5		)%	(20.3		)%

Schedule of Deferred Tax Assets and Liabilities



	As of December 31,
	2018		2017
	(in thousands)
Deferred tax assets:
Insurance reserves	$	245,488	$	171,504
Investments	8,283		0
Other	1,897		0
Deferred tax assets	255,668		171,504
Deferred tax liabilities:
Deferred policy acquisition costs	55,030		39,501
Net unrealized gains on securities	0		61,294
Investments	95,294		100,269
Other	0		7,944
Deferred tax liabilities	150,324		209,008
Net deferred tax asset (liability)	$	105,344	$	(37,504	)

Unrecognized Tax Benefits Reconciliation

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



	2018			2017		2016
	(in thousands)
Balance at January 1,	$	30,196		$	9,488	$	0
Increases in unrecognized tax benefits-prior years	0			12,373		4,744
(Decreases) in unrecognized tax benefits-prior years	0			0		0
Increases in unrecognized tax benefits-current year	0			8,335		4,744
(Decreases) in unrecognized tax benefits-current year	0			0		0
Settlements with taxing authorities	(30,196		)	0		0
Balance at December 31,	$	0		$	30,196	$	9,488
Unrecognized tax benefits that, if recognized, would favorably impact the effective rate	$	0		$	30,196	$	9,488