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Income Taxes (Tables) - USD ($) $ in Thousands | 12 Months Ended
--- | ---
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016
Income Tax Contingency [Line Items] |  |  |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | ignificant components of the Company’s net deferred tax liabilities as of December 31 are as follows:
(in thousands) | 2018 |  | 2017
Non-current deferred tax liabilities: |  |  |
Intangible assets | $ | 334,200 |  |  | $ | 306,351 |
Fixed assets | 4,929 |  |  | 2,723 |
Impact of adoption of ASC 606 revenue recognition | 29,729 |  |  | — |
Net unrealized holding (loss)/gain on available-for-sale securities | (78 | ) |  | (6 | )
Total non-current deferred tax liabilities | 368,780 |  |  | 309,068 |
Non-current deferred tax assets: |  |  |
Deferred compensation | 41,293 |  |  | 36,701 |
Accruals and reserves | 10,455 |  |  | 7,534 |
Deferred profit-sharing contingent commissions | — |  |  | 7,107 |
Net operating loss carryforwards | 2,196 |  |  | 2,434 |
Valuation allowance for deferred tax assets | (896 | ) |  | (893 | )
Total non-current deferred tax assets | 53,048 |  |  | 52,883 |
Net non-current deferred tax liability | $ | 315,732 |  |  | $ | 256,185 |
Income Tax Disclosure [Text Block] | Income Taxes On December 22, 2017, the U.S. government enacted the Tax Cuts and Jobs Act of 2017 (the “Tax Reform Act”). The Tax Reform Act makes changes to the U.S. tax code that affected our income tax rate in 2017. The Tax Reform Act reduces the U.S. federal corporate income tax rate from 35.0% to 21.0% and requires companies to pay a one-time transition tax on certain unrepatriated earnings from foreign subsidiaries. The Tax Reform Act also establishes new tax laws that became effective January 1, 2018. ASC 740 requires a company to record the effects of a tax law change in the period of enactment, however, shortly after the enactment of the Tax Reform Act, the SEC staff issued SAB 118, which allows a company to record a provisional amount when it does not have the necessary information available, prepared, or analyzed in reasonable detail to complete its accounting for the change in the tax law. The measurement period ends when the company has obtained, prepared and analyzed the information necessary to finalize its accounting, but cannot extend beyond one year. For 2017, we made a reasonable estimate of the impact of the Tax Reform Act and recorded a one-time credit in our 2017 income tax expense of $120.9 million, which reflects an estimated reduction in our deferred income tax liabilities of $124.2 million as a result of the maximum federal rate decreasing to 21.0% from 35.0%, which was partially offset by an estimated increase in income tax payable in the amount of $3.3 million as a result of the transition tax on cash and cash equivalent balances related to untaxed accumulated earnings associated with our international operations. During 2018, we made a credit adjustment to the transition tax on untaxed international operations in the amount of $1.6 million. This adjustment was a reduction of income tax expense for 2018 as a result of updated calculations based on the Company’s tax filings for the 2017 year end. As of December 31, 2018, management does not expect any further changes to the amounts previously recorded and adjusted under SAB 118. Significant components of the provision for income taxes for the years ended December 31 are as follows:
(in thousands) | 2018 |  | 2017 |  | 2016
Current: |  |  |  |  |
Federal | $ | 77,694 |  |  | $ | 129,954 |  |  | $ | 126,145 |
State | 25,096 |  |  | 21,392 |  |  | 21,110 |
Foreign | 409 |  |  | 929 |  |  | 590 |
Total current provision | 103,199 |  |  | 152,275 |  |  | 147,845 |
Deferred: |  |  |  |  |
Federal | 8,483 |  |  | 18,999 |  |  | 15,551 |
State | 6,519 |  |  | 2,984 |  |  | 2,612 |
Foreign | 6 |  |  | — |  |  | — |
Tax Reform Act deferred tax revaluation | — |  |  | (124,166 | ) |  | — |
Total deferred provision | 15,008 |  |  | (102,183 | ) |  | 18,163 |
Total tax provision | $ | 118,207 |  |  | $ | 50,092 |  |  | $ | 166,008 |
A reconciliation of the differences between the effective tax rate and the federal statutory tax rate for the years ended December 31 is as follows:
| 2018 |  | 2017 |  | 2016
Federal statutory tax rate | 21.0% |  | 35.0% |  | 35.0%
State income taxes, net of federal income tax benefit | 5.7 |  | 3.8 |  | 3.9
Non-deductible employee stock purchase plan expense | 0.2 |  | 0.3 |  | 0.3
Non-deductible meals and entertainment | 0.3 |  | 0.3 |  | 0.3
Non-deductible officers’ compensation | 0.3 |  | — |  | —
Tax Reform Act deferred tax revaluation and transition tax impact | (0.3) |  | (26.9) |  | —
Other, net | (1.6) |  | (1.4) |  | (0.3)
Effective tax rate | 25.6% |  | 11.1% |  | 39.2%
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for income tax reporting purposes. Significant components of the Company’s net deferred tax liabilities as of December 31 are as follows:
(in thousands) | 2018 |  | 2017
Non-current deferred tax liabilities: |  |  |
Intangible assets | $ | 334,200 |  |  | $ | 306,351 |
Fixed assets | 4,929 |  |  | 2,723 |
Impact of adoption of ASC 606 revenue recognition | 29,729 |  |  | — |
Net unrealized holding (loss)/gain on available-for-sale securities | (78 | ) |  | (6 | )
Total non-current deferred tax liabilities | 368,780 |  |  | 309,068 |
Non-current deferred tax assets: |  |  |
Deferred compensation | 41,293 |  |  | 36,701 |
Accruals and reserves | 10,455 |  |  | 7,534 |
Deferred profit-sharing contingent commissions | — |  |  | 7,107 |
Net operating loss carryforwards | 2,196 |  |  | 2,434 |
Valuation allowance for deferred tax assets | (896 | ) |  | (893 | )
Total non-current deferred tax assets | 53,048 |  |  | 52,883 |
Net non-current deferred tax liability | $ | 315,732 |  |  | $ | 256,185 |
Income taxes paid in 2018, 2017 and 2016 were $110.6 million, $152.0 million and $143.1 million, respectively. At December 31, 2018, the Company had net operating loss carryforwards of $0.1 million and $42.5 million for federal and state income tax reporting purposes, respectively, portions of which expire in the years 2019 through 2038. The federal carryforward is derived from insurance operations acquired by the Company in 2001. The state carryforward amount is derived from the operating results of certain subsidiaries and from the 2013 stock acquisition of Beecher Carlson Holdings, Inc. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
(in thousands) | 2018 |  | 2017 |  | 2016
Unrecognized tax benefits balance at January 1 | $ | 1,694 |  |  | $ | 750 |  |  | $ | 584 |
Gross increases for tax positions of prior years | 594 |  |  | 1,070 |  |  | 412 |
Gross decreases for tax positions of prior years | (5 | ) |  | — |  |  | (41 | )
Settlements | (644 | ) |  | (126 | ) |  | (205 | )
Unrecognized tax benefits balance at December 31 | $ | 1,639 |  |  | $ | 1,694 |  |  | $ | 750 |
The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2018, 2017 and 2016 the Company had $197,205, $228,608 and $86,191 of accrued interest and penalties related to uncertain tax positions, respectively. The total amount of unrecognized tax benefits that would affect the Company’s effective tax rate if recognized was $1.6 million as of December 31, 2018, $1.7 million as of December 31, 2017 and $0.8 million as of December 31, 2016. The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months. As a result of a 2006 Internal Revenue Service (“IRS”) audit, the Company agreed to accrue at each December 31, for tax purposes only, a known amount of profit-sharing contingent commissions represented by the actual amount of profit-sharing contingent commissions received in the first quarter of the related year, with a true-up adjustment to the actual amount received by the end of the following March. Since this method for tax purposes differed from the method used for book purposes, it resulted in a current deferred tax asset as of December 31, 2017 and 2016. As of January 1, 2018, pursuant to ASU 606, Revenue Recognition, the deferred tax asset was removed and was included in the Company’s overall beginning retained earnings adjustment per ASC 606. The Company will now follow book treatment for accrued profit-sharing contingent commissions. The Company is subject to taxation in the United States and various state jurisdictions. The Company is also subject to taxation in the United Kingdom. In the United States, federal returns for fiscal years 2014 through 2018 remain open and subject to examination by the IRS. The Company files and remits state income taxes in various states where the Company has determined it is required to file state income taxes. The Company’s filings with those states remain open for audit for the fiscal years 2012 through 2018. In the United Kingdom, the Company’s filings remain open for audit for the fiscal years 2017 and 2018. During 2017, the Company settled the previously disclosed IRS income tax audit of The Wright Insurance Group for the short period ended May 1, 2014. Pursuant to the agreement in which the Company acquired The Wright Insurance Group, the Company was fully indemnified for all audit-related assessments. During 2018, the Company settled the previously disclosed State of Massachusetts income tax audit for the fiscal year 2013 through 2014. In addition, the Company is currently under audit in the states of Colorado, Illinois, Kansas, Massachusetts and New York for the fiscal years 2015 through 2017. In general, it is our practice and intention to reinvest the earnings of our non-U.S. subsidiaries in those operations. |  |
Summary of Income Tax Contingencies [Table Text Block] | $ 15,008 | $ (102,183) | $ 18,163
Summary of Positions for which Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Table Text Block] | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
(in thousands) | 2018 |  | 2017 |  | 2016
Unrecognized tax benefits balance at January 1 | $ | 1,694 |  |  | $ | 750 |  |  | $ | 584 |
Gross increases for tax positions of prior years | 594 |  |  | 1,070 |  |  | 412 |
Gross decreases for tax positions of prior years | (5 | ) |  | — |  |  | (41 | )
Settlements | (644 | ) |  | (126 | ) |  | (205 | )
Unrecognized tax benefits balance at December 31 | $ | 1,639 |  |  | $ | 1,694 |  |  | $ | 750 |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | Significant components of the provision for income taxes for the years ended December 31 are as follows:
(in thousands) | 2018 |  | 2017 |  | 2016
Current: |  |  |  |  |
Federal | $ | 77,694 |  |  | $ | 129,954 |  |  | $ | 126,145 |
State | 25,096 |  |  | 21,392 |  |  | 21,110 |
Foreign | 409 |  |  | 929 |  |  | 590 |
Total current provision | 103,199 |  |  | 152,275 |  |  | 147,845 |
Deferred: |  |  |  |  |
Federal | 8,483 |  |  | 18,999 |  |  | 15,551 |
State | 6,519 |  |  | 2,984 |  |  | 2,612 |
Foreign | 6 |  |  | — |  |  | — |
Tax Reform Act deferred tax revaluation | — |  |  | (124,166 | ) |  | — |
Total deferred provision | 15,008 |  |  | (102,183 | ) |  | 18,163 |
Total tax provision | $ | 118,207 |  |  | $ | 50,092 |  |  | $ | 166,008 |

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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- Definition Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32639-109319 + Details
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