Note 14 - Income Taxes Level 3 (Tables)

12 Months Ended

Dec. 31, 2011

Components of Income Tax Provision [Abstract]

Schedule of Components of Income Tax Expense [Table Text Block]

The components of our consolidated income tax provision (benefit) are as follows:



	Year Ended December 31
(In thousands)	2011		2010			2009
Current	$	59,604	$	(155,219	)	$	(39,057	)
Deferred	6,758		381,408			(55,344		)
Total income tax provision (benefit)	$	66,362	$	226,189		$	(94,401	)

Reconciliation of Taxes at Statutory Rate to Provision (Benefit) for Income Taxes [Table Text Block]

The reconciliation of taxes computed at the statutory tax rate of 35% for 2011, 2010 and 2009 to the provision (benefit) for income taxes is as follows:



	Year Ended December 31
(In thousands)	2011			2010			2009
Provision (benefit) for income taxes computed at the statutory tax rate	$	128,979		$	(552,887	)	$	(84,798	)
Change in tax resulting from:
Tax-exempt municipal bond interest and dividends received deduction (net of proration)	(5,237		)	(15,592		)	(31,539		)
Foreign tax benefit	(13,496		)	(10,397		)	(4,766		)
State tax benefit	(6,224		)	(15,692		)	(7,353		)
Unrecognized tax benefits	17,860			(25,915		)	28,192
Valuation allowance	(50,582		)	844,975			6,882
Other, net	(4,938		)	1,697			(1,019		)
Provision (benefit) for income taxes	$	66,362		$	226,189		$	(94,401	)

Schedule of Components of Deferred Tax Assets and Liabilities [Table Text Block]

The significant components of our net deferred tax assets and liabilities are summarized as follows:



	December 31
(In thousands)	2011		2010
Deferred tax assets:
Accrued expenses	$	41,011	$	39,295
Unearned premiums	14,327		21,926
Premium deficiency reserves	1,275		3,758
Net operating loss	666,407		738,032
Differences in fair value of derivative and other financial instruments	—		347,772
Net unrealized loss on investments	—		15,016
Rescission premium	20,015		15,227
State net operating loss carryforward	31,825		24,499
Foreign tax credit carryforward	26,884		26,661
Depreciation	5,037		2,227
Partnership investments	64,544		—
Other	57,127		53,811
Total deferred tax assets	928,452		1,288,224
Deferred tax liabilities:
Deferred policy acquisition costs	48,969		51,916
Partnership investments	—		277,422
Convertible debt	32,091		35,164
Differences in fair value of derivative and other financial instruments	3,591		—
Net unrealized gain on investments	4,191		—
Loss reserves	9,744		9,592
Foreign currency	22		11,375
Other	16,169		23,367
Total deferred tax liabilities	114,777		408,836
Valuation allowance	797,700		851,857
Net deferred tax asset	$	15,975	$	27,531

Effect of Unrecognized Tax Benefits on Consolidated Balance Sheets and Results of Operations [Table Text Block]

The effect of unrecognized tax benefits on our consolidated balance sheets and results of operations is as follows:



(In thousands)	December 31, 2010		Increase		December 31, 2011
Unrecognized tax benefits	$	92,845	$	32,912	$	125,757
Unrecognized tax benefits that, if recognized, would affect the effective tax rate	$	44,040	$	17,861	$	61,901
Interest and penalties accrued	$	31,169	$	22,673	$	53,842
Interest and penalties charged to income tax expense					$	22,673

Summary of Income Tax Contingencies [Table Text Block]

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



	Year Ended December 31
(In thousands)	2011			2010
Balance at beginning of period	$	92,845		$	143,391
Tax positions related to the current year:
Increases	1,268			2,313
Decreases	(2,005		)	—
Tax positions related to prior years:
Increases	51,480			47,020
Decreases	(17,831		)	(54,874		)
Changes in judgment	—			(5,331		)
Lapses of applicable statute of limitation	—			(39,674		)
Balance at end of period	$	125,757		$	92,845

Summary of Income Tax Examinations [Table Text Block]

The following calendar tax years, listed by major jurisdiction, remain subject to examination:



U.S. Federal Corporation Income Tax	2000 - 2010(1)
Significant State and Local Jurisdictions (2)	1999 - 2010

_________________________

(1)

We are currently contesting proposed adjustments resulting from the examination by the IRS for the 2000 through 2007 tax years. As part of this process, we have agreed to extend all relevant statute of limitations for the assessment of tax to December 31, 2012. All such statute of limitation extensions have limited the scope of the examinations to the recognition of certain tax benefits that were generated through our investment in a portfolio of residual interests in REMICs.


(2)	Arizona, California, Florida, Georgia, New York, Ohio, Pennsylvania, Texas and New York City.

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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- Definition

Tabular disclosure of income tax examinations that an enterprise is currently subject to or that have been completed in the current period typically including a description of the examination, the jurisdiction conducting the examination, the tax year(s) under examination, the likelihood of an unfavorable settlement, the range of possible losses, the liability recorded, the increase or decrease in the liability from the prior period, and any penalties and interest that have been recorded.

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