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Income Tax | 12 Months Ended
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Dec. 31, 2016
Income Tax Disclosure [Abstract] |
Income Tax | INCOME TAX Pre-tax income for the years ended December 31, 2016, 2015 and 2014 consists of the following (dollars in thousands):
|  | 2016 |  | 2015 |  | 2014
Pre-tax income - U.S. |  | $ | 758,496 |  |  | $ | 493,328 |  |  | $ | 768,857 |
Pre-tax income - foreign |  | 285,450 |  |  | 251,467 |  |  | 239,676 |
Total pre-tax income |  | $ | 1,043,946 |  |  | $ | 744,795 |  |  | $ | 1,008,533 |
The provision for income tax expense for the years ended December 31, 2016, 2015 and 2014 consists of the following (dollars in thousands):
|  | 2016 |  | 2015 |  | 2014
Current income tax expense (benefit): |  |  |  |  |  |
U.S. |  | $ | 1,020 |  |  | $ | 1,588 |  |  | $ | 18,495 |
Foreign |  | 47,706 |  |  | 92,045 |  |  | 135,260 |
Total current |  | 48,726 |  |  | 93,633 |  |  | 153,755 |
Deferred income tax expense (benefit): |  |  |  |  |  |
U.S. |  | 273,928 |  |  | 193,204 |  |  | 242,694 |
Foreign |  | 19,849 |  |  | (44,208 | ) |  | (71,963 | )
Total deferred |  | 293,777 |  |  | 148,996 |  |  | 170,731 |
Total provision for income taxes |  | $ | 342,503 |  |  | $ | 242,629 |  |  | $ | 324,486 |
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, 2016, 2015 and 2014 (dollars in thousands):
|  | 2016 |  | 2015 |  | 2014
Tax provision at U.S. statutory rate |  | $ | 365,381 |  |  | $ | 260,678 |  |  | $ | 352,987 |
Increase (decrease) in income taxes resulting from: |  |  |  |  |  |
Foreign tax rate differing from U.S. tax rate |  | (13,974 | ) |  | (9,950 | ) |  | (12,483 | )
Differences in tax basis in foreign jurisdictions |  | (17,770 | ) |  | (32,472 | ) |  | (8,256 | )
Deferred tax valuation allowance |  | 10,963 |  |  | 19,157 |  |  | 2,076 |
Amounts related to tax audit contingencies |  | 111 |  |  | 88 |  |  | (9,083 | )
Corporate rate changes - other |  | — |  |  | — |  |  | 280 |
Subpart F |  | 1,783 |  |  | 3,473 |  |  | 6,132 |
Foreign tax credits |  | (1,683 | ) |  | (1,936 | ) |  | (1,045 | )
Return to provision adjustments |  | (1,473 | ) |  | 1,482 |  |  | (8,123 | )
Other, net |  | (835 | ) |  | 2,109 |  |  | 2,001 |
Total provision for income taxes |  | $ | 342,503 |  |  | $ | 242,629 |  |  | $ | 324,486 |
Effective tax rate |  | 32.8 | % |  | 32.6 | % |  | 32.2 | %
Total income taxes for the years ended December 31, 2016, 2015 and 2014 were as follows (dollars in thousands):
|  | 2016 |  | 2015 |  | 2014
Provision for income taxes |  | $ | 342,503 |  |  | $ | 242,629 |  |  | $ | 324,486 |
Income tax from OCI and additional paid-in-capital: |  |  |  |  |  |
Net unrealized holding gain (loss) on debt and equity securities recognized for financial reporting purposes |  | 157,929 |  |  | (339,889 | ) |  | 348,697 |
Exercise of stock options |  | (162 | ) |  | (2,963 | ) |  | 3,011 |
Foreign currency translation |  | 21,081 |  |  | 16,478 |  |  | 22,998 |
Unrealized pension and post retirement |  | 1,772 |  |  | 1,726 |  |  | (14,770 | )
Total income taxes provided |  | $ | 523,123 |  |  | $ | (82,019 | ) |  | $ | 684,422 |
The tax effects of temporary differences that give rise to significant portions of the deferred income tax asset and liabilities at December 31, 2016 and 2015, are presented in the following tables (dollars in thousands):
|  | 2016 |  | 2015
Deferred income tax assets: |  |  |  |
Nondeductible accruals |  | $ | 125,879 |  |  | $ | 116,106 |
Differences between tax and financial reporting amounts concerning certain reinsurance transactions |  | 87,688 |  |  | 63,543 |
Differences in the tax basis of cash and invested assets |  | 775 |  |  | 5,931 |
Investment income differences |  | 35,192 |  |  | — |
Deferred acquisition costs capitalized for tax |  | 143,003 |  |  | 131,714 |
Net operating loss carryforward |  | 325,806 |  |  | 524,501 |
Capital loss and tax credit carryforwards |  | 101,223 |  |  | 77,888 |
Subtotal |  | 819,566 |  |  | 919,683 |
Valuation allowance |  | (133,354 | ) |  | (127,132 | )
Total deferred income tax assets |  | 686,212 |  |  | 792,551 |
Deferred income tax liabilities: |  |  |  |
Deferred acquisition costs capitalized for financial reporting |  | 1,013,642 |  |  | 1,011,753 |
Differences between tax and financial reporting amounts concerning certain reinsurance transactions |  | 1,773,929 |  |  | 1,509,211 |
Differences in the tax basis of cash and invested assets |  | 505,841 |  |  | 336,870 |
Investment income differences |  | 5,635 |  |  | 14,654 |
Differences in foreign currency translation |  | 91,067 |  |  | 81,492 |
Prepaid expenses |  | — |  |  | 1,014 |
Total deferred income tax liabilities |  | 3,390,114 |  |  | 2,954,994 |
Net deferred income tax liabilities |  | $ | 2,703,902 |  |  | $ | 2,162,443 |
Balance sheet presentation of net deferred income tax liabilities: |  |  |  |
Included in other assets |  | $ | 66,738 |  |  | $ | 55,885 |
Included in deferred income taxes |  | 2,770,640 |  |  | 2,218,328 |
Net deferred income tax liabilities |  | $ | 2,703,902 |  |  | $ | 2,162,443 |
As of December 31, 2016, a valuation allowance for deferred tax assets of approximately $133.4 million was provided on the total deferred tax assets in certain jurisdictions. The valuation allowance is primarily related to numerous branches and legal entities for which there is no history of earnings in recent years. Further there is a partial valuation allowance on RGA Reinsurance Company of South Africa, Limited (“RGA South Africa”), RGA Reinsurance Company of Australia Limited (“RGA Australia”) and Aurora National net operating losses as well as RGA International Reinsurance Company dac (“RGA International”) foreign tax credit. As of December 31, 2015, a valuation allowance for deferred tax assets of approximately $127.1 million was provided on the total deferred tax assets. The valuation allowance is primarily related to numerous branches and legal entities for which there is no history of earnings in recent years. Further there is a partial valuation allowance on RGA South Africa and RGA Australia’s net operating losses, RGA International’s foreign tax credit and on RGA’s deferred tax asset related to share expense for foreign entities. 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 tax asset will not be utilized. The earnings of substantially all of the Company’s foreign subsidiaries have been permanently 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, 2016 and 2015, the financial reporting basis in excess of the tax basis for which no deferred taxes have been recognized was approximately $1,147.2 million and $992.9 million, respectively. During 2016, 2015 and 2014, the Company received federal and foreign income tax refunds of approximately $6.9 million, $136.8 million and $9.3 million, respectively. The Company made cash income tax payments of approximately $68.0 million, $178.4 million and $79.6 million in 2016, 2015 and 2014, respectively. At December 31, 2016 and 2015, the Company recognized gross deferred tax assets associated with net operating losses of approximately $1,353.6 million and $1,771.0 million, respectively. The earliest expiration date for any significant net operating losses that do not have a valuation allowance is 2028, during which $50.3 million of net operating losses would expire if not utilized. The remaining net operating losses have either a valuation allowance or indefinite carryforward periods. At December 31, 2016 and 2015, the Company also recognized a deferred tax asset associated with tax credits of $100.9 million and $77.5 million, respectively. The earliest expiration date for the tax credits is 2023 during which $19.7 million would expire if not utilized. However, these net operating losses and tax credits, other than the net operating losses and tax credits 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 the Company 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. The Company is no longer subject to U.S. federal income tax examinations by tax authorities for years prior to 2011 and with a few exceptions, the Company is no longer subject to state and foreign income tax examinations by tax authorities for years prior to 2010. As of December 31, 2016, the Company’s total amount of unrecognized tax benefits was $297.3 million and the total amount of unrecognized tax benefits that would affect the effective tax rate, if recognized, was $30.3 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, 2016, 2015 and 2014, is as follows (dollars in thousands):
|  | Total Unrecognized Tax Benefits
|  | 2016 |  | 2015 |  | 2014
Beginning balance, January 1 |  | $ | 296,213 |  |  | $ | 274,661 |  |  | $ | 279,801 |
Additions for tax positions of prior years |  | 226,720 |  |  | 26,170 |  |  | 17,431 |
Reductions for tax positions of prior years |  | (229,719 | ) |  | (7,820 | ) |  | (26,001 | )
Additions for tax positions of current year |  | 4,186 |  |  | 3,396 |  |  | 3,430 |
Settlements with tax authorities |  | (110 | ) |  | (194 | ) |  | — |
Ending balance, December 31 |  | $ | 297,290 |  |  | $ | 296,213 |  |  | $ | 274,661 |
The Company recognized interest expense (benefit) associated with uncertain tax positions in 2016, 2015 and 2014 of $(8.4) million, $8.2 million and $(36.6) million, respectively. Additionally, the Company recognized penalties of $0.3 million for 2016. As of December 31, 2016 and 2015, the Company had $20.4 million and $28.8 million, respectively, of accrued interest related to unrecognized tax benefits.

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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 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 2: 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=65882285&loc=d3e32559-109319 Reference 3: 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=65882285&loc=d3e32718-109319 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=65882285&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=65882285&loc=d3e32537-109319 + Details
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