Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Income Taxes [Abstract]

Differences between our effective tax rate for financial statement purposes and the Federal Statutory rate

	2014			2013			2012
Statutory tax rate		35.0	%		35.0	%		35.0	%
Federal tax at statutory rate	$	231,643		$	200,448		$	194,049
Nontaxable municipal bond interest and dividend received deduction		(35,166)			(34,734)			(31,939)
State income taxes, net of federal tax benefit		2,135			2,097			3,619
Foreign income taxes		42,093			42,691			40,703
Foreign tax credit		(42,093)			(42,691)			(40,703)
Uncertain tax positions (net of federal tax benefit on state
positions: $223 in 2014, $340 in 2013 and $719 in 2012)		1,091			518			878
Other, net		3,790			(2,816)			(3,420)
Income tax expense	$	203,493		$	165,513		$	163,187
Effective tax rate		30.7	%		28.9	%		29.4	%

The components of income tax expense

		2014		2013		2012
Federal current		$	126,442	$	117,933	$	94,493
Federal deferred			30,359		804		20,827
	Total federal		156,801		118,737		115,320
State current			1,740		2,649		2,570
State deferred			1,545		578		2,997
	Total state		3,285		3,227		5,567
Foreign current			35,243		37,978		34,678
Foreign deferred			6,850		4,713		6,025
	Total foreign		42,093		42,691		40,703
Uncertain tax positions			1,314		858		1,597
	Income tax expense	$	203,493	$	165,513	$	163,187

Composition of deferred tax assets and liabilities

		2014		2013
Excess of financial statement unearned premium over tax		$	30,225	$	26,821
Discounting of loss reserves, net of salvage and subrogation			40,046		50,481
Excess of financial statement accrued expenses over tax			20,103		18,920
Allowance for bad debts, not deductible for tax			2,427		3,146
Stock-based compensation expense in excess of deduction for tax			8,919		5,163
Financial statement loss for Lloyd’s syndicates in excess of deduction for tax			-		351
Federal tax net operating loss carryforwards			2,983		3,202
State tax net operating loss carryforwards			441		181
Foreign tax net operating loss carryforwards			20,008		22,605
Federal benefit of state uncertain tax positions			1,705		1,482
Valuation allowance			(25,050)		(27,430)
	Total deferred tax assets		101,807		104,922
Unrealized gain on increase in value of securities			91,515		52,424
Deferred policy acquisition costs, net of ceding commissions, deductible for tax			15,764		14,570
Amortizable goodwill for tax			123,017		110,064
Financial statement income for Lloyd’s syndicates in excess of taxable income			7,143		-
Book basis in net assets of foreign subsidiaries in excess of tax basis			23,075		2,414
Depreciation and other items			12,676		14,458
	Total deferred tax liabilities		273,190		193,930
	Net deferred tax liability	$	(171,383)	$	(89,008)

Changes in the valuation allowance

		2014		2013		2012
Balance at beginning of year		$	27,430	$	9,187	$	7,983
State net operating loss carryforwards			260		(2,228)		(651)
Foreign net operating loss carryforwards			(3,232)		20,207		296
Other			592		264		1,559
	Balance at December 31	$	25,050	$	27,430	$	9,187

Changes in our liability for unrecognized gross tax benefits

		2014		2013		2012
Balance at beginning of year		$	5,003	$	4,129	$	2,522
Gross increases
Tax position of current year			593		632		145
Tax positions of prior years			825		506		2,988
Gross decreases
Statute expirations			(151)		(264)		(713)
Settlements			-		-		(404)
Tax positions of prior years			-		-		(409)
	Balance at December 31	$	6,270	$	5,003	$	4,129