Income Taxes

6 Months Ended

Jun. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

The effective tax rate for the three and six months ended June 30, 2024, was 21.6% and 21.0%, respectively, compared to 20.7% and 19.9% for the same periods last year, with the change primarily due to our permanent tax differences having a lower impact on our effective rate due to increased profitability in the current year.

Deferred tax assets and liabilities are recorded based on the difference between the financial statement and tax bases of assets and liabilities at the enacted tax rates. We review our deferred tax assets regularly for recoverability. At June 30, 2024 and 2023, and December 31, 2023, we determined that we did not need a valuation allowance on our gross deferred tax assets. Although realization of the deferred tax assets is not assured, management believes that it is more likely than not the deferred tax assets will be realized based on our expectation that we will be able to fully utilize the deductions that are ultimately recognized for tax purposes. At June 30, 2024 and 2023, and December 31, 2023, the

net deferred tax asset includes a gross deferred tax asset of $453.9 million, $703.7 million, and $427.3 million, respectively, related to unrealized losses on fixed-maturity securities. We believe this deferred tax asset will be realized based on the existence of current temporary differences related to unrealized gains in our equity portfolio, and prior year capital gains.

We had net current income taxes payable of $9.0 million and $311.8 million at June 30, 2024 and December 31, 2023, respectively, which were reported in accounts payable, accrued expenses, and other liabilities, compared to recoverable income taxes of $44.0 million at June 30, 2023, which were reported in other assets on our consolidated balance sheets. The balance may fluctuate between an asset and a liability from period to period due to normal timing differences.

At June 30, 2024 and 2023, and December 31, 2023, we had no reserves for uncertain tax positions.