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Income Tax | 12 Months Ended
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Dec. 31, 2025
Income Tax Disclosure [Abstract] |
Income Tax Disclosure | Total income tax expense (benefit) is allocated as follows:
| Year Ended December 31
| 2025 |  | 2024 |  | 2023
| (in millions of dollars)
Net Income | $ | 195.0 |  |  | $ | 472.2 |  |  | $ | 356.3 |
Stockholders' Equity - Accumulated Other Comprehensive Income (Loss) |  |  |  |  |
Change in Net Unrealized Gain (Loss) on Securities | 200.4 |  |  | (226.6) |  |  | 300.6 |
Change in the Effect of Discount Rate Assumptions on the Liability for Future Policy and Contract Benefits, Net of Reinsurance | (66.2) |  |  | 488.9 |  |  | (256.5) |
Change in Net Loss on Derivatives | (3.1) |  |  | (51.5) |  |  | (17.0) |
Change in Foreign Currency Translation Adjustment | 0.1 |  |  | 1.1 |  |  | 0.9 |
Change in Unrecognized Pension and Postretirement Benefit Costs | 35.6 |  |  | 12.0 |  |  | (2.7) |
Total | $ | 361.8 |  |  | $ | 696.1 |  |  | $ | 381.6 |
A reconciliation of the income tax provision at the U.S. federal statutory rate to the income tax rate as reported in our consolidated statements of income is presented below. Certain prior period amounts have been reclassified to conform to the current period presentation.
(in millions of dollars, except rates) |  |  |  |  |  |  |  |
| Year Ended December 31
| 2025 |  | 2024 |  | 2023
| Amount | Percent |  | Amount | Percent |  | Amount | Percent
U.S. federal statutory rate | $ | 196.0 |  | 21.0 | % |  | $ | 472.8 |  | 21.0 | % |  | $ | 344.4 |  | 21.0 | %
State and local income tax, net of federal income tax effect 1 | 1.8 |  | 0.2 |  |  | (7.3) |  | (0.3) |  |  | (3.5) |  | (0.2) |
Foreign tax effects | 0.1 |  | — |  |  | 2.8 |  | 0.1 |  |  | (2.0) |  | (0.1) |
Effect of cross-border tax laws | 3.5 |  | 0.4 |  |  | (0.9) |  | — |  |  | 8.4 |  | 0.5 |
Tax credits | (10.4) |  | (1.1) |  |  | (2.1) |  | (0.1) |  |  | (2.3) |  | (0.1) |
Nontaxable or nondeductible items | (4.8) |  | (0.5) |  |  | (3.9) |  | (0.2) |  |  | (1.5) |  | (0.1) |
Other Adjustments |  |  |  |  |  |  |  |
Interest on Unrecognized Tax Benefits | 11.2 |  | 1.2 |  |  | 13.2 |  | 0.6 |  |  | 12.2 |  | 0.7 |
Other | (2.4) |  | (0.3) |  |  | (2.4) |  | (0.1) |  |  | 0.6 |  | — |
Effective Tax Rate | $ | 195.0 |  | 20.9 | % |  | $ | 472.2 |  | 21.0 | % |  | $ | 356.3 |  | 21.7 | %
1 State taxes in Minnesota, California, and New York made up the majority (greater than 50 percent) of the tax effect in this category for 2025. State taxes in Maine made up the majority (greater than 50 percent) of the tax effect in this category for 2024 and 2023. Our net deferred tax asset consists of the following. Certain prior year amounts have been reclassified to conform to current presentation.
| December 31
| 2025 |  | 2024
| (in millions of dollars)
Deferred Tax Asset |  |  |
Invested Assets | $ | 379.3 |  |  | $ | 593.2 |
Employee Benefits | 132.3 |  |  | 146.3 |
Minimum Tax Credit Carryforward | 101.2 |  |  | — |
Other | 53.2 |  |  | 36.8 |
Gross Deferred Tax Asset | 666.0 |  |  | 776.3 |
Less: Valuation Allowance | 11.5 |  |  | 12.1 |
Net Deferred Tax Asset | 654.5 |  |  | 764.2 |
Deferred Tax Liability |  |  |
Deferred Acquisition Costs | 217.3 |  |  | 167.0 |
Fixed Assets | 40.1 |  |  | 13.8 |
Reserves | 67.2 |  |  | 85.9 |
Cost of Reinsurance | 234.8 |  |  | 110.4 |
Other | 54.4 |  |  | 48.4 |
Gross Deferred Tax Liability | 613.8 |  |  | 425.5 |
Net Deferred Tax Asset | $ | 40.7 |  |  | $ | 338.7 |
Our consolidated statements of income include amounts subject to both domestic and foreign taxation. The income and related tax expense (benefit) are as follows:
| Year Ended December 31
| 2025 |  | 2024 |  | 2023
| (in millions of dollars)
Income Before Tax |  |  |  |  |
Domestic | $ | 803.7 |  |  | $ | 2,129.5 |  |  | $ | 1,506.2 |
Foreign | 129.8 |  |  | 121.8 |  |  | 133.9 |
Total | $ | 933.5 |  |  | $ | 2,251.3 |  |  | $ | 1,640.1 |
Current Tax Expense (Benefit) |  |  |  |  |
Federal | $ | 53.6 |  |  | $ | 393.1 |  |  | $ | 440.4 |
State and Local | 1.1 |  |  | (8.5) |  |  | (2.5) |
Foreign | 17.0 |  |  | 47.5 |  |  | 14.1 |
Total | 71.7 |  |  | 432.1 |  |  | 452.0 |
Deferred Tax Expense (Benefit) |  |  |  |  |
Federal | 112.0 |  |  | 59.8 |  |  | (106.2) |
State and Local | 0.9 |  |  | (0.6) |  |  | (1.5) |
Foreign | 10.4 |  |  | (19.1) |  |  | 12.0 |
Total | 123.3 |  |  | 40.1 |  |  | (95.7) |
Total Tax Expense | $ | 195.0 |  |  | $ | 472.2 |  |  | $ | 356.3 |
On June 10, 2021, the Finance Act 2021 was enacted, resulting in a U.K. tax increase from 19 percent to 25 percent, effective April 1, 2023. As of December 31, 2025, our plans for future repatriations of cash from our foreign subsidiaries can include no more than the amount of capital above that which is required by foreign regulatory capital requirements. The remainder of our investment in our foreign subsidiaries is indefinitely reinvested. Our consolidated statements of income include the following changes in unrecognized tax benefits.
| December 31
| 2025 |  | 2024 |  | 2023
| (in millions of dollars)
Balance at Beginning of Year | $ | 136.0 |  |  | $ | 156.7 |  |  | $ | 177.4 |
Decreases for Tax Positions Related to Prior Years | (20.7) |  |  | (20.7) |  |  | (20.7) |
Balance at End of Year | 115.3 |  |  | 136.0 |  |  | 156.7 |
Less Tax Attributable to Temporary Items Included Above | — |  |  | (21.2) |  |  | (42.4) |
Total Unrecognized Tax Benefits That if Recognized Would Affect the Effective Tax Rate | $ | 115.3 |  |  | $ | 114.8 |  |  | $ | 114.3 |
In 2018, we recorded $261.1 million gross unrecognized tax benefits for a policyholder reserves position taken on our 2017 federal tax return, which if recognized, would decrease our tax expense by $112.9 million. With respect to unrecognized tax benefits for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility, we did not have a balance at December 31, 2025, and had balances of $21.2 million and $42.4 million at December 31, 2024 and 2023, respectively. We recognize interest expense and penalties, if applicable, related to unrecognized tax benefits in tax expense. We recognized $11.2 million, $13.2 million, and $12.2 million of interest expense related to unrecognized tax benefits during 2025, 2024, and 2023, respectively. The liability for net interest expense on uncertain tax positions was approximately $70.6 million, $59.4 million, and $46.2 million as of December 31, 2025, 2024, and 2023, respectively. We file federal and state income tax returns in the United States and in foreign jurisdictions. Tax year 2017 and tax years subsequent to 2018 remain subject to examination by the IRS. All major foreign jurisdictions remain subject to examination for tax years subsequent to 2023 with the exception of Poland for which tax years subsequent to 2019 remain subject to examination. We believe sufficient provision has been made for all potential adjustments for years that are not closed by the statute of limitations in all major tax jurisdictions and that any such adjustments would not have a material adverse effect on our financial position, liquidity, or results of operations. We file state income tax returns in nearly every state in the United States. Tax years subsequent to 2020 remain subject to examination depending on the statute of limitation established by the various states, which is generally three to four years. As of December 31, 2025, we have a minimum tax credit (MTC) carryforward of $101.2 million, a federal net operating loss carryforward of $61.2 million, and capital loss carryforwards of $135.2 million. The MTC carryforward and federal net operating loss carryforward have an indefinite life, and the capital loss carryforwards will begin to expire in 2029. We have net operating loss carryforwards for state and local income tax of approximately $186.7 million, most of which is expected to expire unused between 2026 and 2045. We record valuation allowances to reduce deferred tax assets to the amount that is more likely than not to be realized. Our valuation allowance was $11.5 million and $12.1 million at December 31, 2025 and 2024, respectively, the majority of which related to our cumulative deferred state income tax benefits. The de minimis remaining amount of our valuation allowance relates to unrealized tax losses on buildings which we own and occupy in the U.K. We recorded a decrease in our valuation allowance of $0.6 million during 2025 and increase of $1.1 million in 2024, primarily in other comprehensive income. Total income taxes paid in 2025 were $93.7 million, consisting of $78.2 million in U.S. federal income taxes, which excludes payments related to transferable tax credits, $1.6 million received in state income taxes, and $17.1 million paid in foreign income taxes, of which $15.9 million was related to U.K. taxes. Total income taxes paid in 2024 were $376.0 million, consisting of $377.0 million in U.S. federal income tax, which excludes payments related to transferable tax credits, $9.4 million received in state income taxes, and $8.4 million paid in foreign income taxes. Total income taxes paid in 2023 were $446.0 million, consisting of $402.3 million in U.S. federal income tax, $7.0 million in state income taxes, and $36.7 million in foreign income taxes, of which $34.4 million was related to U.K. taxes.

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