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Income Taxes Level 1 (Notes)
 12 Months Ended
Dec. 31, 2012
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]
Income Taxes
We file consolidated federal income tax returns that include all of our wholly-owned subsidiaries except Eagle Life which must file a separate federal income tax return for 2009–2013 under applicable federal income tax guidelines. Our income tax expense as presented in the consolidated financial statements is summarized as follows:
 
Year Ended December 31,
 
2012
 
2011
 
2010
 
(Dollars in thousands)
Consolidated statements of operations:
 
 
 
 
 
Current income taxes
$
80,527

 
$
127,535

 
$
140,381

Deferred income taxes (benefits)
(52,336
)
 
(80,869
)
 
(118,048
)
Total income tax expense included in consolidated statements of operations
28,191

 
46,666

 
22,333

Stockholders' equity:
 
 
 
 
 
Expense (benefit) relating to:
 
 
 
 
 
Change in net unrealized investment losses
123,620

 
202,143

 
60,456

Share-based compensation
(392
)
 
(1,061
)
 
(480
)
Total income tax expense included in consolidated financial statements
$
151,419

 
$
247,748

 
$
82,309


Income tax expense in the consolidated statements of operations differed from the amount computed at the applicable statutory federal income tax rate of 35% as follows:
 
Year Ended December 31,
 
2012
 
2011
 
2010
 
(Dollars in thousands)
Income before income taxes
$
85,989

 
$
132,914

 
$
65,266

 
 
 
 
 
 
Income tax expense on income before income taxes
$
30,096

 
$
46,520

 
$
22,843

Tax effect of:
 
 
 
 
 
Tax exempt net investment income
(1,876
)
 
—

 
—

Other
(29
)
 
146

 
(510
)
Income tax expense
$
28,191

 
$
46,666

 
$
22,333

Effective tax rate
32.8
%
 
35.1
%
 
34.2
%

Deferred income tax assets or liabilities are established for temporary differences between the financial reporting amounts and tax bases of assets and liabilities that will result in deductible or taxable amounts, respectively, in future years. The tax effects of temporary differences that give rise to the deferred tax assets and liabilities at December 31, 2012 and 2011, are as follows:
 
December 31,
 
2012
 
2011
 
(Dollars in thousands)
Deferred income tax assets:
 
 
 
Policy benefit reserves
$
1,698,831

 
$
1,472,653

Other than temporary impairments
8,177

 
9,072

Derivative instruments
—

 
21,429

Other policyholder funds
10,860

 
9,946

Litigation settlement accrual
7,351

 
—

Deferred compensation
14,659

 
15,576

Net operating loss carryforwards
16,783

 
14,818

Other
7,192

 
6,351

Gross deferred tax assets
1,763,853

 
1,549,845

Deferred income tax liabilities:
 
 
 
Deferred policy acquisition costs and deferred sales inducements
(1,425,266
)
 
(1,266,042
)
Net unrealized gains on available for sale fixed maturity and equity securities
(357,686
)
 
(234,066
)
Convertible senior notes
(6,665
)
 
(10,917
)
Derivative instruments
(18,280
)
 
—

Investment income items
(2,588
)
 
(4,315
)
Other
(2,671
)
 
(12,524
)
Gross deferred tax liabilities
(1,813,156
)
 
(1,527,864
)
Net deferred income tax (liability) asset
$
(49,303
)
 
$
21,981


The total deferred income tax asset includes other than temporary impairments on investments. The other than temporary impairments will not be available for utilization for tax purposes until the securities are either sold at a loss or deemed completely worthless. The other than temporary impairments totaled $23.4 million and $26.0 million as of December 31, 2012 and 2011, respectively.
Included in the deferred income taxes is the expected income tax benefit attributable to unrealized losses on available for sale fixed maturity securities. There is no valuation allowance provided for the deferred income tax asset attributable to unrealized losses on available for sale fixed maturity securities. Management expects that the passage of time will result in the reversal of these unrealized losses due to the fair value increasing as these securities near maturity. Management has the intent and ability to hold these securities to maturity because we generate adequate cash flow from new business to fund all foreseeable cash flow needs and do not believe it would ever be necessary to liquidate these securities at a loss to meet cash flow needs. For deferred income taxes related to unrealized losses on equity securities, we had sufficient future taxable income from capital gain sources to support the realizability of the deferred income tax asset.
Realization of our deferred income tax assets is more likely than not based on expectations as to our future taxable income and considering all other available evidence, both positive and negative. Therefore, no valuation allowance against deferred income tax assets has been established as of December 31, 2012 and 2011.
There were no material income tax contingencies requiring recognition in our consolidated financial statements as of December 31, 2012. We are no longer subject to income tax examinations by tax authorities for years prior to 2008.
At December 31, 2012, we had non-life net operating loss carryforwards for federal income tax purposes totaling $23.4 million which expire beginning in 2018 through 2032.