Income taxes (Tables)

12 Months Ended

Dec. 31, 2011

Income taxes [Abstract]

Net deferred tax assets and liabilities

Net deferred tax assets and liabilities as of December 31, 2011 and 2010 are as follows:

	2011			2010
	(In thousands)
Total deferred tax assets	$	683,645		$	651,568
Total deferred tax liabilities		(86,490	)		(249,989	)
Net deferred tax asset before valuation allowance		597,155			401,579
Valuation allowance		(608,761	)		(410,333	)
Net deferred tax liability	$	(11,606	)	$	(8,754	)

Components of the net deferred tax liability

The components of the net deferred tax liability as of December 31, 2011 and 2010 are as follows:

	2011			2010
	(In thousands)
Convertible debentures	$	(15,785	)	$	(25,864	)
Net operating loss		506,614			432,827
Loss reserves		60,478			85,425
Unrealized (appreciation) depreciation in investments		(42,009	)		(31,379	)
Mortgage investments		18,944			17,934
Deferred compensation		17,447			19,080
Investments in joint ventures		(3,018	)		(165,598	)
Premium deficiency reserves		47,186			62,638
Loss due to "other than temporary" impairments		11,068			14,160
Other, net		(3,770	)		(7,644	)
Net deferred tax asset before valuation allowance		597,155			401,579
Valuation allowance		(608,761	)		(410,333	)
Net deferred tax liability	$	(11,606	)	$	(8,754	)

Tax provision (benefit)

The effect of the change in valuation allowance on the benefit from income taxes was as follows:

	2011			2010			2009
	(In thousands)
Benefit from income taxes	$	(196,835	)	$	(145,334	)	$	(681,266	)
Change in valuation allowance		198,428			149,669			238,490
Tax provision (benefit)	$	1,593		$	4,335		$	(442,776	)

Components of the provision for (benefit from) income taxes

The following summarizes the components of the provision for (benefit from) income taxes:

	2011			2010			2009
	(In thousands)
Current	$	598		$	1,618		$	(621,170	)
Deferred		(945	)		(19	)		175,194
Other		1,940			2,736			3,200
Provision for (benefit from) income taxes	$	1,593		$	4,335		$	(442,776	)

Reconciliation of federal statutory income tax rate

The reconciliation of the federal statutory income tax benefit rate to the effective income tax (benefit) rate is as follows:

	2011			2010			2009
Federal statutory income tax benefit rate		(35.0	) %		(35.0	) %		(35.0	) %
Valuation allowance		41.0			41.6			13.5
Tax exempt municipal bond interest		(5.4	)		(10.5	)		(3.6	)
Other, net		(0.3	)		5.1			-
Effective income tax (benefit) rate		0.3	%		1.2	%		(25.1	) %

Reconciliation of unrecognized tax benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	Unrecognized tax benefits
	2011		2010		2009
	(In thousands)
Balance at beginning of year	$	109,282	$	91,117	$	87,965
Additions based on tax positions related to the current year		-		-		258
Additions for tax positions of prior years		798		18,165		2,894
Reductions for tax positions of prior years		-		-		-
Settlements		-		-		-
Balance at end of year	$	110,080	$	109,282	$	91,117