Income Taxes

12 Months Ended

Dec. 31, 2024

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)
	2024		2023		2022
Current income tax expense	$	152,939	$	116,877	$	68,415
Deferred income tax expense (benefit)	4,026		(1,002)		9,468
Income tax expense	$	156,965	$	115,875	$	77,883

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)
	2024		2023		2022
Income tax at statutory rate	$	159,029	$	118,007	$	79,055
Other, net	(2,064)		(2,132)		(1,172)
Income tax expense	$	156,965	$	115,875	$	77,883

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

(in thousands)
	2024		2023
Deferred tax assets:
Other employee benefits	$	18,409	$	17,781
Allowance for management fee returned on cancelled policies	4,647		3,571
Deferred revenue	4,181		3,756
Unrealized losses on investments	3,827		7,164
Current expected credit loss allowance	2,966		2,661
Other	4,617		3,709
Total deferred tax assets	38,647		38,642
Deferred tax liabilities:
Depreciation	27,089		31,126
Pension and other postretirement benefits	12,276		14,738
Prepaid expenses	2,013		2,001
Other	3,687		2,258
Total deferred tax liabilities	45,065		50,123
Net deferred tax liability	$	(6,418)	$	(11,481)

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, 2024 or 2023.

We do not have any unrecognized tax benefit that, if recognized, would affect our effective tax rate as of December 31, 2024 and 2023. Any interest expense related to uncertain tax positions would be recognized in income tax expense.

Tax years ending December 31, 2023, 2022 and 2021 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.