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Federal Income Taxes
 12 Months Ended
Dec. 31, 2012
Income Tax Disclosure [Abstract]  
Federal Income Taxes
Federal Income Taxes
(a) A reconciliation of federal income tax on income at the corporate rate to the effective tax rate is as follows:
($ in thousands)
 
2012
 
2011
 
2010
Tax at statutory rate of 35%
 
$
13,172

 
3,990

 
29,453

Tax-advantaged interest
 
(13,285
)
 
(14,381
)
 
(15,992
)
Dividends received deduction
 
(1,260
)
 
(870
)
 
(357
)
Nonqualified deferred compensation
 
(262
)
 
7

 
(273
)
Amortization of intangible assets
 
687

 
—

 
—

Other
 
620

 
(29
)
 
572

Federal income tax (benefit) expense from continuing operations
 
$
(328
)
 
(11,283
)
 
13,403


 
(b) The tax effects of the significant temporary differences that give rise to deferred tax assets and liabilities are as follows:
($ in thousands)
 
2012
 
2011
Deferred tax assets:
 
 

 
 

Net loss reserve discounting
 
$
97,561

 
99,768

Net unearned premiums
 
58,981

 
53,191

Employee benefits
 
39,752

 
33,100

Long-term incentive compensation plans
 
10,078

 
8,471

Temporary investment write-downs
 
8,236

 
13,251

Net operating loss
 
12,120

 
4,183

Tax credits
 
14,150

 
10,938

Other
 
9,056

 
7,638

Total deferred tax assets
 
249,934

 
230,540

Deferred tax liabilities:
 
 

 
 

Deferred policy acquisition costs
 
53,187

 
46,729

Unrealized gains on investment securities
 
67,501

 
53,996

Other investment-related items, net
 
2,488

 
4,034

Accelerated depreciation and amortization
 
7,622

 
6,295

Total deferred tax liabilities
 
130,798

 
111,054

Net deferred federal income tax asset
 
$
119,136

 
119,486


 
After considering all evidence, both positive and negative, with respect to our federal tax loss carryback availability, expected levels of pre-tax financial statement income, and federal taxable income, we believe it is more likely than not that the existing deductible temporary differences will reverse during periods in which we generate net federal taxable income or have adequate federal carryback availability. As a result, we have no valuation allowance recognized for federal deferred tax assets at December 31, 2012 and 2011. The carryforward availability of our net operating loss will begin to expire in 2027 with the remainder expiring through 2031. Our alternative minimum tax credits, which are available to offset future regular taxable income, can be carried forward for an unlimited period of time.
 
Stockholders' equity reflects tax benefits related to compensation expense deductions for share-based compensation awards of $17.7 million at December 31, 2012, $16.6 million at December 31, 2011, and $16.7 million at December 31, 2010.
 
We have analyzed our tax positions in all open tax years, which as of December 31, 2012 were 2007 through 2011. The Internal Revenue Service (“IRS”) is currently conducting a limited scope examination of these open tax years. Based on our analysis, we do not have unrecognized tax expense or benefits as of December 31, 2012. In addition, we believe our tax positions will more likely than not be sustained upon examination, including related appeals or litigation. In the event we had a tax position that did not meet the more likely than not criteria, any tax, interest, and penalties incurred related to such a position would be reflected in "Total federal income tax expense (benefit)" on our Consolidated Statements of Income.