XML 106 R17.htm IDEA: XBRL DOCUMENT
v2.4.0.8

Income Tax | 12 Months Ended
--- | ---
Dec. 31, 2013
Income Tax Disclosure [Abstract] |
Income Tax | INCOME TAX Pre-tax income for the years ended December 31, 2013, 2012 and 2011 consists of the following (dollars in thousands):
|  | 2013 |  | 2012 |  | 2011
Pre-tax income - U.S. |  | $ | 473,223 |  |  | $ | 644,219 |  |  | $ | 400,278 |
Pre-tax income - foreign |  | 162,031 |  |  | 275,004 |  |  | 363,293 |
Total pre-tax income |  | $ | 635,254 |  |  | $ | 919,223 |  |  | $ | 763,571 |
The provision for income tax expense for the years ended December 31, 2013, 2012 and 2011 consists of the following (dollars in thousands):
|  | 2013 |  | 2012 |  | 2011
Current income tax expense (benefit): |  |  |  |  |  |
U.S. |  | $ | (48,831 | ) |  | $ | 52,378 |  |  | $ | (1,606 | )
Foreign |  | 34,470 |  |  | 36,840 |  |  | 50,138 |
Total current |  | (14,361 | ) |  | 89,218 |  |  | 48,532 |
Deferred income tax expense (benefit): |  |  |  |  |  |
U.S. |  | 226,771 |  |  | 183,929 |  |  | 155,896 |
Foreign |  | 4,007 |  |  | 14,183 |  |  | 13,098 |
Total deferred |  | 230,778 |  |  | 198,112 |  |  | 168,994 |
Total provision for income taxes |  | $ | 216,417 |  |  | $ | 287,330 |  |  | $ | 217,526 |
Provision for income tax expense differed from the amounts computed by applying the U.S. federal income tax statutory rate of 35% to pre-tax income as a result of the following for the years ended December 31, 2013, 2012 and 2011 (dollars in thousands):
|  | 2013 |  | 2012 |  | 2011
Tax provision at U.S. statutory rate |  | $ | 222,339 |  |  | $ | 321,728 |  |  | $ | 267,250 |
Increase (decrease) in income taxes resulting from: |  |  |  |  |  |
Foreign tax rate differing from U.S. tax rate |  | (8,032 | ) |  | (14,705 | ) |  | (9,681 | )
Differences in tax basis in foreign jurisdictions |  | (26,484 | ) |  | (21,086 | ) |  | (11,584 | )
Deferred tax valuation allowance |  | 26,507 |  |  | 635 |  |  | 4,147 |
Amounts related to tax audit contingencies |  | 9,034 |  |  | 2,260 |  |  | 5,562 |
Corporate rate changes - Canada |  | (414 | ) |  | 1,374 |  |  | (40,593 | )
Corporate rate changes - other |  | (1,184 | ) |  | (1,070 | ) |  | (1,933 | )
Subpart F |  | 8,255 |  |  | 13,571 |  |  | 9,340 |
Foreign tax credits |  | (1,786 | ) |  | (7,808 | ) |  | (3,546 | )
Return to provision adjustments |  | (12,465 | ) |  | (7,351 | ) |  | (1,863 | )
Other, net |  | 647 |  |  | (218 | ) |  | 427 |
Total provision for income taxes |  | $ | 216,417 |  |  | $ | 287,330 |  |  | $ | 217,526 |
Effective tax rate |  | 34.1 | % |  | 31.3 | % |  | 28.5 | %
The American Taxpayer Relief Act of 2012 (the “Act”) was signed into law on January 2, 2013. The Act retroactively restored several expired business tax provisions, including the active financing exception. Because a change in tax law is reflected in operations in the period of enactment, the retroactive effect of the Act on the Company’s U.S. federal taxes for 2012 of a benefit of $1.0 million was recognized in 2013. In 2011, the Company recognized an income tax benefit associated with previously enacted reductions in federal statutory tax rates and adjustments to various provincial statutory tax rates in Canada. This 2007 tax rate change enactment included phased in effective dates through 2012. These adjustments in tax rates should have been recognized beginning in 2007, when the Canadian tax legislation was enacted. The Company recorded a cumulative tax benefit adjustment of $30.7 million in 2011 in “Provision for income taxes” to correct the deferred tax liabilities that were not properly recorded. If the impact of the tax rates had been recorded in the prior years, the Company estimates that it would have recognized approximately $3.0 million, $6.0 million, $9.0 million and $12.0 million of tax benefit in the years ended 2007, 2008, 2009 and 2010, respectively. Total income taxes for the years ended December 31, 2013, 2012 and 2011 were as follows (dollars in thousands):
|  | 2013 |  | 2012 |  | 2011
Provision for income taxes |  | $ | 216,417 |  |  | $ | 287,330 |  |  | $ | 217,526 |
Income tax from OCI and additional paid-in-capital: |  |  |  |  |  |
Net unrealized holding gain (loss) on debt and equity securities recognized for financial reporting purposes |  | (467,454 | ) |  | 246,682 |  |  | 275,975 |
Exercise of stock options |  | (3,125 | ) |  | (2,902 | ) |  | (4,934 | )
Foreign currency translation |  | 12,330 |  |  | (921 | ) |  | 1,579 |
Unrealized pension and post retirement |  | 7,640 |  |  | (2,779 | ) |  | (8,581 | )
Total income taxes provided |  | $ | (234,192 | ) |  | $ | 527,410 |  |  | $ | 481,565 |
The tax effects of temporary differences that give rise to significant portions of the deferred income tax asset and liabilities at December 31, 2013 and 2012, are presented in the following tables (dollars in thousands):
|  | 2013 |  | 2012
Deferred income tax assets: |  |  |  |
Nondeductible accruals |  | $ | 106,587 |  |  | $ | 77,116 |
Differences between tax and financial reporting amounts concerning certain reinsurance transactions |  | 59,942 |  |  | 17,054 |
Differences in the tax basis of cash and invested assets |  | 2,106 |  |  | — |
Investment income differences |  | 108,462 |  |  | 109,275 |
Deferred acquisition costs capitalized for tax |  | 90,187 |  |  | 91,886 |
Net operating loss carryforward |  | 252,192 |  |  | 159,821 |
Differences in foreign currency translation |  | — |  |  | 621 |
Capital loss and tax credit carryforwards |  | 2,356 |  |  | 23,595 |
Subtotal |  | 621,832 |  |  | 479,368 |
Valuation allowance |  | (102,228 | ) |  | (10,100 | )
Total deferred income tax assets |  | 519,604 |  |  | 469,268 |
Deferred income tax liabilities: |  |  |  |
Deferred acquisition costs capitalized for financial reporting |  | 1,066,351 |  |  | 1,082,394 |
Differences between tax and financial reporting amounts concerning certain reinsurance transactions |  | 906,197 |  |  | 637,002 |
Differences in the tax basis of cash and invested assets |  | 310,332 |  |  | 832,940 |
Investment income differences |  | 12,959 |  |  | 12,719 |
Differences in foreign currency translation |  | 19,704 |  |  | — |
Total deferred income tax liabilities |  | 2,315,543 |  |  | 2,565,055 |
Net deferred income tax liabilities |  | $ | 1,795,939 |  |  | $ | 2,095,787 |
Balance sheet presentation of net deferred income tax liabilities: |  |  |  |
Included in other assets |  | $ | 41,638 |  |  | $ | 24,714 |
Included in deferred income taxes |  | 1,837,577 |  |  | 2,120,501 |
Net deferred income tax liabilities |  | $ | 1,795,939 |  |  | $ | 2,095,787 |
As of December 31, 2013, a valuation allowance for deferred tax assets of approximately $102.2 million was provided on the total deferred tax assets of RGA Holdings Limited, RGA Technology Partners, Inc. ("RTP") Canadian Branch, RTP UK Branch, RGA International German Branch, RGA International Netherlands Branch, RGA International Poland Branch, Leidsche Verzekering Maatschappij N.V., RGA Reinsurance Company New Zealand Branch, RGA Reinsurance Company of Australia New Zealand Branch, RGA Capital Limited (U.K.), a portion of RGA Reinsurance Company of Australia's deferred tax assets and on RGA's deferred tax asset related to share expense for foreign entities. As of December 31, 2012 a valuation allowance for deferred tax assets of approximately $10.1 million was provided on the total deferred tax assets of RGA Holdings Limited, RTP Canadian Branch, RTP UK Branch, RGA International German Branch, RGA International Netherlands Branch, RGA International Poland Branch, and on RGA's deferred tax asset related to share expense for foreign entities. Of the total valuation allowance, $25.9 million if released will not result in a benefit to operations because the branches are taxed in multiple countries. Any dual tax is reduced through a foreign tax credit and dual loss utilization is prohibited by the dual consolidated loss rules. The Company utilizes valuation allowances when it believes, based on the weight of the available evidence, that it is more likely than not that the deferred income taxes will not be realized. The earnings of substantially all of the Company’s foreign subsidiaries have been indefinitely reinvested in foreign operations. A provision of $4.2 million has been made for U.S. taxes on repatriation. No other provision has been made for U.S. tax or foreign withholding taxes that may be applicable upon any repatriation or sale. The determination of the unrecognized deferred tax liability for temporary differences related to investments in the Company’s foreign subsidiaries is not practicable. At December 31, 2013 and 2012, the financial reporting basis in excess of the tax basis for which no deferred taxes have been recognized was approximately $1,154.4 million and $663.9 million, respectively. During 2013, 2012 and 2011, the Company received federal and foreign income tax refunds of approximately $2.6 million, $16.2 million and $11.1 million, respectively. The Company made cash income tax payments of approximately $113.4 million, $113.2 million and $140.1 million in 2013, 2012 and 2011, respectively. At December 31, 2013 and 2012, the Company recognized gross deferred tax assets associated with net operating losses of approximately $916.4 million and $555.4 million, respectively, $419.2 million of which will begin to expire in 2025. The remaining net operating losses have either a valuation allowance or indefinite carryforward periods. However, these net operating losses, other than the net operating losses for which there is a valuation allowance, are expected to be utilized in the normal course of business during the period allowed for carryforwards and in any event, are not expected to be lost, due to the application of tax planning strategies that management would utilize. The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The Company is under continuous examination by the Internal Revenue Service and is subject to audit by taxing authorities in other foreign jurisdictions in which the Company has significant business operations. The income tax years under examination vary by jurisdiction. With a few exceptions, the Company is no longer subject to U.S. federal, state and foreign tax examinations by tax authorities for years prior to 2006. As of December 31, 2013, the Company’s total amount of unrecognized tax benefits was $279.8 million and the total amount of unrecognized tax benefits that would affect the effective tax rate, if recognized, was $40.0 million. Management believes there will be no material impact to the Company’s effective tax rate related to unrecognized tax benefits over the next 12 months. A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2013, 2012 and 2011, is as follows (dollars in thousands):
|  | Total Unrecognized Tax Benefits
|  | 2013 |  | 2012 |  | 2011
Beginning balance, January 1 |  | $ | 245,636 |  |  | $ | 194,260 |  |  | $ | 182,354 |
Additions for tax positions of prior years |  | 41,228 |  |  | 47,438 |  |  | 7,968 |
Reductions for tax positions of prior years |  | (10,401 | ) |  | — |  |  | — |
Additions for tax positions of current year |  | 3,338 |  |  | 3,938 |  |  | 3,938 |
Ending balance, December 31 |  | $ | 279,801 |  |  | $ | 245,636 |  |  | $ | 194,260 |
The Company recognized interest expense associated with uncertain tax positions in 2013, 2012 and 2011 of $7.6 million , $9.9 million and $7.1 million, respectively. As of December 31, 2013 and 2012, the Company had $57.3 million and $49.6 million, respectively, of accrued interest related to unrecognized tax benefits.

X
- Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: 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=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration