Income Taxes

12 Months Ended

Dec. 31, 2023

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)
	2023		2022		2021
Current income tax expense	$	116,877	$	68,415	$	80,398
Deferred income tax (benefit) expense	(1,002)		9,468		(1,854)
Income tax expense	$	115,875	$	77,883	$	78,544

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)
	2023		2022		2021
Income tax at statutory rate	$	118,007	$	79,055	$	79,045
Other, net	(2,132)		(1,172)		(501)
Income tax expense	$	115,875	$	77,883	$	78,544

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

(in thousands)
	2023		2022
Deferred tax assets:
Other employee benefits	$	17,781	$	16,358
Unrealized losses on investments	7,164		15,403
Deferred revenue	3,756		3,710
Allowance for management fee returned on cancelled policies	3,571		3,405
Current expected credit loss allowance (1)	2,661		1,112
Other (1)	3,709		2,790
Total deferred tax assets	38,642		42,778
Deferred tax liabilities:
Depreciation	31,126		37,682
Pension and other postretirement benefits	14,738		15,473
Prepaid expenses	2,001		1,731
Other	2,258		1,967
Total deferred tax liabilities	50,123		56,853
Net deferred tax liability	$	(11,481)	$	(14,075)

(1) 2022 amounts have been reclassified to conform to the current period presentation.

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, 2023 or 2022.

We do not have any unrecognized tax benefit that, if recognized, would affect our effective tax rate as of December 31, 2023 and 2022. Any interest expense related to uncertain tax positions would be recognized in income tax expense.

Tax years ending December 31, 2022, 2021 and 2020 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.