Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Summary of income tax assets and liabilities

The income tax assets and liabilities included in Other assets and Other liabilities, respectively, in the Consolidated Balance Sheets were as follows:



($ in thousands)	December 31,
	2019			2018
Income tax (asset) liability
Current	$	(12,184	)	$	(20,793	)
Deferred	160,624			103,686

Summary of deferred tax assets and liabilities

The "temporary differences" that gave rise to the deferred tax balances were as follows:



($ in thousands)	December 31,
	2019		2018
Deferred tax assets
Unearned premium reserve reduction	$	12,103	$	12,112
Compensation accruals	8,866		6,866
Reinsurance commissions	6,804		—
Impaired securities	1,245		1,295
Other comprehensive income - net funded status of benefit plans	2,875		3,254
Discounting of unpaid claims and claim expense tax reserves	2,530		2,772
Postretirement benefits other than pensions	285		302
Charitable contributions carryforwards	—		89
Net operating loss carryforwards	3,803		10,969
Total gross deferred tax assets	38,511		37,659
Deferred tax liabilities
Other comprehensive income - net unrealized gains on securities	74,645		32,897
Deferred policy acquisition costs	49,326		60,330
Life insurance future policy benefit reserve	38,210		9,304
Life insurance future policy benefit reserve (transitional rule)	12,786		14,910
Discounting of unpaid claims and claim expense tax reserves (transitional rule)	947		1,203
Investment related adjustments	15,718		17,531
Intangibles	2,021		2,557
Other, net	5,482		2,613
Total gross deferred tax liabilities	199,135		141,345
Net deferred tax liability	$	160,624	$	103,686

Summary of loss carryforwards and credits

At December 31, 2019, the Company had available the following carryforwards or credits.

Income taxes expenses

The components of the provision for income tax expense (benefit) were as follows:



($ in thousands)	Years Ended December 31,
	2019		2018			2017
Current	$	31,518	$	4,152		$	3,813
Deferred	20,488		(2,958		)	(84,585		)
Total income tax expense (benefit)	$	52,006	$	1,194		$	(80,772	)

Income taxes expenses reconciliation

Income tax expense for the following periods differed from the expected tax computed by applying the federal corporate tax rate of 21% for 2019 and 2018 and 35% for 2017 to income before income taxes as follows:



($ in thousands)	Years Ended December 31,
	2019			2018			2017
Expected federal tax on income	$	49,654		$	4,103		$	31,041
Add (deduct) tax effects of:
Tax-exempt interest	(4,159		)	(3,726		)	(5,335		)
Dividend received deduction	(1,392		)	(412		)	(4,810		)
Goodwill impairment	5,885			—			—
Tax Act DTL re-measurement	—			—			(98,988		)
Employee share-based compensation	272			(1,134		)	(3,258		)
Compensation deduction limitation	680			1,754			326
Prior year adjustments	(716		)	300			(293		)
Other, net	1,782			309			545
Income tax expense (benefit) provided on income	$	52,006		$	1,194		$	(80,772	)

Unrecognized tax benefits, excluding interest and penalties

A reconciliation of the beginning and ending amounts of unrecognized tax benefits, excluding interest and penalties, is as follows:



($ in thousands)	Years Ended December 31,
	2019		2018			2017
Balance as of the beginning of the year	$	1,734	$	1,790		$	1,594
Increases related to prior year tax positions	109		—			101
Decreases related to prior year tax positions	—		(152		)	—
Increases related to current year tax positions	123		96			422
Settlements	—		—			—
Lapse of statute	—		—			(327		)
Balance as of the end of the year	$	1,966	$	1,734		$	1,790

($ in thousands)

Pretax Amount

Expiration Year

Operating loss carryforwards

Operating loss carryforwards

Indefinite