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Income Taxes | 12 Months Ended
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Dec. 31, 2016
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes We file consolidated federal income tax returns that include all of our wholly-owned subsidiaries. Our income tax expense as presented in the consolidated financial statements is summarized as follows:
| Year Ended December 31,
| 2016 |  | 2015 |  | 2014
| (Dollars in thousands)
Consolidated statements of operations: |  |  |  |  |
Current income taxes | $ | 57,412 |  |  | $ | 75,568 |  |  | $ | 116,545 |
Deferred income taxes (benefits) | (10,408 | ) |  | 41,916 |  |  | (46,504 | )
Total income tax expense included in consolidated statements of operations | 47,004 |  |  | 117,484 |  |  | 70,041 |
Stockholders' equity: |  |  |  |  |
Expense (benefit) relating to: |  |  |  |  |
Change in net unrealized investment losses | 74,471 |  |  | (279,860 | ) |  | 363,572 |
Share-based compensation | (527 | ) |  | (3,649 | ) |  | (5,716 | )
Extinguishment of convertible debt | — |  |  | — |  |  | (9,284 | )
Total income tax expense (benefit) included in consolidated financial statements | $ | 120,948 |  |  | $ | (166,025 | ) |  | $ | 418,613 |
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,
| 2016 |  | 2015 |  | 2014
| (Dollars in thousands)
Income before income taxes | $ | 130,247 |  |  | $ | 337,314 |  |  | $ | 196,064 |
Income tax expense on income before income taxes | $ | 45,586 |  |  | $ | 118,060 |  |  | $ | 68,622 |
Tax effect of: |  |  |  |  |
State income taxes | 2,559 |  |  | 2,924 |  |  | 1,145 |
Tax exempt net investment income | (2,167 | ) |  | (3,834 | ) |  | (3,669 | )
Extinguishment of convertible debt | — |  |  | — |  |  | 4,202 |
Other | 1,026 |  |  | 334 |  |  | (259 | )
Income tax expense | $ | 47,004 |  |  | $ | 117,484 |  |  | $ | 70,041 |
Effective tax rate | 36.1 | % |  | 34.8 | % |  | 35.7 | %
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, 2016 and 2015, are as follows:
| December 31,
| 2016 |  | 2015
| (Dollars in thousands)
Deferred income tax assets: |  |  |
Policy benefit reserves | $ | 2,354,786 |  |  | $ | 2,092,731 |
Other than temporary impairments | 15,681 |  |  | 7,801 |
Derivative instruments | — |  |  | 91,638 |
Amounts due reinsurer | 1,321 |  |  | — |
Other policyholder funds | 6,474 |  |  | 6,861 |
Litigation settlement accrual | 1,709 |  |  | 7,100 |
Deferred compensation | 7,963 |  |  | 8,346 |
Share-based compensation | 5,407 |  |  | 5,286 |
Net operating loss carryforwards | 3,745 |  |  | 6,637 |
Other | 9,658 |  |  | 8,031 |
Gross deferred tax assets | 2,406,744 |  |  | 2,234,431 |
Deferred income tax liabilities: |  |  |
Deferred policy acquisition costs and deferred sales inducements | (1,951,333 | ) |  | (1,860,722 | )
Net unrealized gains on available for sale fixed maturity and equity securities | (170,925 | ) |  | (96,454 | )
Derivative instruments | (75,405 | ) |  | — |
Amounts due reinsurer | — |  |  | (9,677 | )
Investment income items | (39,118 | ) |  | (32,466 | )
Other | (1,385 | ) |  | (2,429 | )
Gross deferred tax liabilities | (2,238,166 | ) |  | (2,001,748 | )
Net deferred income tax asset | $ | 168,578 |  |  | $ | 232,683 |
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. We have 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 be necessary to liquidate these securities at a loss to meet cash flow needs. 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, 2016 and 2015. There were no material income tax contingencies requiring recognition in our consolidated financial statements as of December 31, 2016. We are no longer subject to income tax examinations by tax authorities for years prior to 2012. At December 31, 2016, we have no non-life net operating loss carryforwards remaining for federal income tax purposes.

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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 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: 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=65882285&loc=d3e32559-109319 Reference 3: 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=65882285&loc=d3e32718-109319 Reference 4: 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=65882285&loc=d3e32639-109319 Reference 5: 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=65882285&loc=d3e32537-109319 + Details
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