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Income Taxes | 12 Months Ended
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Dec. 31, 2011
Income Taxes [Abstract] |
Income Taxes | NOTE 7 - Income Taxes The income tax assets and liabilities included in Other Assets and Other Liabilities, respectively, in the Consolidated Balance Sheets as of December 31, 2011 and 2010 were as follows:
|  | December 31, |
|  | 2011 |  |  | 2010 |
Income tax (asset) liability |  |  |  |  |  |  |  |
Current |  | $ | (5,857 | ) |  | $ | (19,321 | )
Deferred |  |  | 221,422 |  |  |  | 131,076 |
Deferred tax assets and liabilities are recognized for all future tax consequences attributable to "temporary differences" between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. There are no deferred tax liabilities that have not been recognized. The "temporary differences" that gave rise to the deferred tax balances as of December 31, 2011 and 2010 were as follows:
|  | December 31, |
|  | 2011 |  |  | 2010 |
Deferred tax assets |  |  |  |  |  |  |  |
Unearned premium reserve reduction |  | $ | 14,336 |  |  | $ | 14,292 |
Other comprehensive income – net funded status of pension and other postretirement benefit obligations |  |  | 8,798 |  |  |  | 7,083 |
Unutilized net operating loss carryforward |  |  | 8,394 |  |  |  | 112 |
Compensation accruals |  |  | 8,304 |  |  |  | 10,170 |
Impaired securities |  |  | 5,410 |  |  |  | 6,715 |
Discounting of unpaid claims and claim expenses tax reserves |  |  | 5,388 |  |  |  | 5,740 |
Postretirement benefits other than pension |  |  | 2,743 |  |  |  | 2,766 |
Other, net |  |  | - |  |  |  | 410 |
Total gross deferred tax assets |  |  | 53,373 |  |  |  | 47,288 |
Deferred tax liabilities |  |  |  |  |  |  |  |
Other comprehensive income – net unrealized gains on fixed maturities and equity securities |  |  | 154,406 |  |  |  | 64,975 |
Deferred policy acquisition costs |  |  | 85,356 |  |  |  | 87,476 |
Life insurance future policy benefit reserve revaluation |  |  | 15,704 |  |  |  | 11,824 |
Investment related adjustments |  |  | 13,984 |  |  |  | 9,827 |
Intangible assets |  |  | 4,262 |  |  |  | 4,262 |
Other, net |  |  | 1,083 |  |  |  | - |
Total gross deferred tax liabilities |  |  | 274,795 |  |  |  | 178,364 |
Net deferred tax liability |  | $ | 221,422 |  |  | $ | 131,076 |
The Company evaluated sources and character of income, including historical earnings, loss carryback potential, taxable income from future reversals of existing taxable temporary differences, future taxable income exclusive of reversing temporary differences, and taxable income from prudent and feasible tax-planning strategies. Although realization of deferred tax assets is not assured, the Company believes it is more-likely-than-not that gross deferred tax assets will be fully realized and that a valuation allowance with respect to the realization of the total gross deferred tax assets was not necessary as of December 31, 2011 and 2010. At December 31, 2011, the Company had available the following loss carryforwards:
|  | Pretax Amount |  |  | Expiration Years |
Operating loss carryforwards |  |  | $ 23,982 |  |  |  | 2030 - 2031 |
Charitable contributions carryforwards |  |  | 613 |  |  |  | 2013 - 2015 |
The components of income tax expense were as follows:
|  | Year Ended December 31, |
|  | 2011 |  |  | 2010 |  |  | 2009 |
Current |  | $ | 18,211 |  |  | $ | 13,609 |  |  | $ | 11,025 |
Deferred |  |  | 6,187 |  |  |  | 16,820 |  |  |  | 18,996 |
Total income tax expense |  | $ | 24,398 |  |  | $ | 30,429 |  |  | $ | 30,021 |
Income tax expense for the following periods differed from the expected tax computed by applying the federal corporate tax rate of 35% to income before income taxes as follows:
|  | Year Ended December 31, |
|  | 2011 |  |  | 2010 |  |  | 2009 |
Expected federal tax on income |  | $ | 33,207 |  |  | $ | 38,952 |  |  | $ | 36,228 |
Add (deduct) tax effects of: |  |  |  |  |  |  |  |  |  |  |  |
Tax-exempt interest |  |  | (7,072 | ) |  |  | (7,034 | ) |  |  | (6,497 | )
Dividend received deduction |  |  | (2,010 | ) |  |  | (1,660 | ) |  |  | (1,173 | )
Resolution of contingent tax liabilities |  |  | - |  |  |  | (1,429 | ) |  |  | - |
Other, net |  |  | 273 |  |  |  | 1,600 |  |  |  | 1,463 |
Income tax expense provided on income |  | $ | 24,398 |  |  | $ | 30,429 |  |  | $ | 30,021 |
At December 31, 2011, the Company had federal income tax returns for the 2007 through 2011 tax years open and subject to adjustment upon examination by taxing authorities. In 2011, the Internal Revenue Service ("IRS") completed an examination of tax years through 2009 resulting in additional tax expense of $22. In the second quarter of 2010, the IRS published guidance regarding Separate Account (variable annuity) dividend received deductions for life insurance companies in which they advised (1) they would concede appeals related to the issue and not raise the issue on audit unless the taxpayer changed its methodology for computing the deduction, and (2) any changes in law regarding this deduction would be effective prospectively. As a result, the Company believes this issue is no longer an uncertain tax position and recorded a reduction of $1,429 in the uncertain tax position liability related to the separate account dividend received deduction in 2010. The Company recognizes tax benefits from tax return positions only if it is more likely than not the position will be sustainable, upon examination, on its technical merits and any relevant administrative practices or precedents. As a result, the Company applies a more-likely-than-not recognition threshold for all tax uncertainties. The Company records liabilities for uncertain tax filing positions where it is more-likely-than-not that the position will not be sustainable upon audit by taxing authorities. These liabilities are reevaluated routinely and are adjusted appropriately based upon changes in facts or law. The Company has no unrecorded liabilities from uncertain tax filing positions. A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, is as follows:
|  | Year Ended December 31,
|  | 2011 |  | 2010
Balance as of the beginning of the year |  | $ 38 |  | $ 1,435
Additions based on tax positions related to the current year |  | - |  | -
Settlements in tax positions for prior years |  | (38) |  | (1,397)
Balance as of the end of the year |  | $ - |  | $ 38
All of the liability for unrecognized tax benefits would affect the effective tax rate if recognized. There are no positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease within the next 12 months. The Company classifies all tax related interest and penalties as income tax expense. For the year ended December 31, 2011, the Company released previous provisions for interest and penalties resulting in a benefit of $279 ($181 net of tax benefits). For the years ended December 31, 2010 and 2009, the expense for interest and penalties was $27 ($16 net of tax benefits) and $94 ($62 net of tax benefits), respectively. The Company has recorded $3 and $284 in liabilities for tax related interest and penalties on its Consolidated Balance Sheets as of December 31, 2011 and 2010, respectively.

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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 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -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. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -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. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 5: 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 Reference 6: 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 7: 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 8: 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=6881521&loc=d3e23780-122690 + Details
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