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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Components of Income Tax Expense (Benefit), Continuing Operations [Abstract]

Components Of Income Tax Expense

The provision for income tax expense consists of the following components:

	Year Ended December 31,
	2012				2011				2010
	(Amounts in thousands)
Federal
Current	$	9,340			$	31,390			$	23,699
Deferred	6,238				20,518				9,964
	$	15,578			$	51,908			$	33,663
State
Current	$	2,079			$	2,934			$	(3,225	)
Deferred	742				(907		)		(246		)
	$	2,821			$	2,027			$	(3,471	)
Total
Current	$	11,419			$	34,324			$	20,474
Deferred	6,980				19,611				9,718
Total	$	18,399			$	53,935			$	30,192

Reconciliation Of Income Taxes

The income tax provision reflected in the consolidated statements of operations is reconciled to the federal income tax on income before income taxes based on a statutory rate of 35% as shown in the table below:

	Year Ended December 31,
	2012				2011				2010
	(Amounts in thousands)
Computed tax expense at 35%	$	47,359			$	85,785			$	63,837
Tax-exempt interest income	(27,789		)		(31,414		)		(33,966		)
Dividends received deduction	(1,482		)		(1,704		)		(1,463		)
State tax expense (benefit)	1,918				1,299				(3,580		)
Other, net	(1,607		)		(31		)		5,364
Income tax expense	$	18,399			$	53,935			$	30,192

Deferred Tax Assets And Liabilities

Significant components of the Company’s net deferred tax assets and liabilities are as follows:

	December 31,
	2012				2011
	(Amounts in thousands)
Deferred tax assets:
20% of net unearned premium	$	66,353			$	61,039
Capital loss carryforward	0				7,108
Discounting of loss reserves and salvage and subrogation recoverable for tax purposes	15,019				15,034
Write-down of impaired investments	1,723				4,638
Tax credit carryforward	37,557				20,060
Expense accruals	10,910				11,632
Other deferred tax assets	4,860				3,568
Total gross deferred tax assets	136,422				123,079
Deferred tax liabilities:
Deferred acquisition costs	(65,069		)		(60,000		)
Tax liability on net unrealized gain on securities carried at fair value	(48,483		)		(31,997		)
Tax depreciation in excess of book depreciation	(10,191		)		(15,164		)
Undistributed earnings of insurance subsidiaries	(4,499		)		(3,962		)
Tax amortization in excess of book amortization	(914		)		(442		)
Other deferred tax liabilities	(7,711		)		(5,003		)
Total gross deferred tax liabilities	(136,867		)		(116,568		)
Net deferred tax (liabilities) assets	$	(445	)		$	6,511

Summary Of Unrecognized Tax Benefits

A reconciliation of the beginning and ending balances of unrecognized tax benefits is as follows:

	2012				2011
	(Amounts in thousands)
Balance at January 1	$	4,567			$	3,823
Additions based on tax positions related to:
Current year	330				1,011
Prior years	1,539				0
Reductions based on tax positions related to prior years	(308		)		(267		)
Reductions as a result of as lapse of the applicable statute of limitations	(202		)		0
Balance at December 31	$	5,926			$	4,567

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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

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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 740

-SubTopic 10

-Section 50

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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 740

-SubTopic 10

-Section 50

-Paragraph 12

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- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

+ 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



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-Publisher FASB

-Name FASB Interpretation (FIN)

-Number 48

-Paragraph 21

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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