Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The provision for income taxes consists of the following for the years ended December 31:

(in thousands)
	2022		2021		2020
Current income tax expense	$	68,415	$	80,398	$	80,373
Deferred income tax expense (benefit)	9,468		(1,854)		(5,162)
Income tax expense	$	77,883	$	78,544	$	75,211

A reconciliation of the provision for income taxes, with amounts determined by applying the statutory federal income tax rate to pre-tax income, is as follows for the years ended December 31:

(in thousands)
	2022		2021		2020
Income tax at statutory rate	$	79,055	$	79,045	$	77,388
Other, net	(1,172)		(501)		(2,177)
Income tax expense	$	77,883	$	78,544	$	75,211

Temporary differences and carry-forwards, which give rise to deferred tax assets and liabilities, are as follows as of December 31:

(in thousands)
	2022		2021
Deferred tax assets:
Other employee benefits	$	16,358	$	15,273
Unrealized losses on investments	15,403		—
Deferred revenue	3,710		3,963
Allowance for management fee returned on cancelled policies	3,405		3,330
Pension and other postretirement benefits	—		21,545
Other	3,902		3,484
Total deferred tax assets	42,778		47,595
Deferred tax liabilities:
Depreciation	37,682		35,204
Pension and other postretirement benefits	15,473		—
Prepaid expenses	1,731		2,458
Unrealized gains on investments	—		8,713
Other	1,967		1,075
Total deferred tax liabilities	56,853		47,450
Net deferred tax (liability) asset	$	(14,075)	$	145

If we determine that any of our deferred tax assets will not result in future tax benefits, a valuation allowance must be established for the portion of the assets that are not expected to be realized. We had no valuation allowance recorded at December 31, 2022 or 2021.

We do not have any unrecognized tax benefit that, if recognized, would affect our effective tax rate as of December 31, 2022 and 2021. Any interest expense related to uncertain tax positions would be recognized in income tax expense.

Tax years ending December 31, 2021, 2020 and 2019 remain open to IRS examination. We are not currently under IRS audit, nor have we been notified of an upcoming IRS audit.

We are the attorney-in-fact for the subscribers (policyholders) at the Exchange, a reciprocal insurance exchange.  In that capacity, we provide all services and facilities necessary to conduct the Exchange's insurance business.  Indemnity and the Exchange together constitute a single insurance business.  Consequently, we are not subject to state corporate income or franchise taxes in states where the Exchange conducts its business and the states collect premium tax in lieu of corporate income or franchise tax, as a result of the Exchange's remittance of premium taxes in those states.