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Income Taxes
 12 Months Ended
Dec. 31, 2023
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,
202320222021
(Dollars in thousands)
Consolidated statements of operations:
Current income taxes$16,998 $20,209 $332 
Deferred income taxes68,135 490,926 149,431 
Total income tax expense included in consolidated statements of operations85,133 511,135 149,763 
Stockholders' equity:
Expense (benefit) relating to:
Changes in other comprehensive income203,640 (1,843,635)207,353 
Total income tax expense included in consolidated financial statements$288,773 $(1,332,500)$357,116 
Income tax expense in the consolidated statements of operations differed from the amount computed at the applicable statutory federal income tax rates of 21% for the years ended December 31, 2023, 2022, and 2021 as follows:
Year Ended December 31,
202320222021
(Dollars in thousands)
Income before income taxes$297,052 $2,431,712 $702,786 
Income tax expense on income before income taxes$62,381 $510,660 $147,585 
Tax effect of:
State income taxes2,570 2,564 5,239 
Tax exempt net investment income(632)(4,065)(4,715)
Non-deductible compensation
20,393 1,182 1,062 
Other421 794 592 
Income tax expense$85,133 $511,135 $149,763 
Effective tax rate28.7 %21.0 %21.3 %
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, 2023 and 2022, are as follows:
December 31,
20232022
(Dollars in thousands)
Deferred income tax assets:
Net unrealized losses on available for sale fixed maturity securities$788,236 $1,063,441 
Investment income items425,940 — 
Amounts due reinsurer1,208,471 1,030,759 
Other policyholder funds— 358 
Deferred compensation1,521 3,866 
Share-based compensation2,828 422 
Net operating loss carryforwards106,502 50,913 
Capital loss carryforwards
38,916 — 
Other15,835 71,417 
Gross deferred tax assets2,588,249 2,221,176 
Deferred income tax liabilities:
Deferred policy acquisition costs and deferred sales inducements(1,095,569)(976,103)
Derivative instruments(217,220)(145,785)
Policy benefit reserves(1,114,394)(612,454)
Investment income items— (28,778)
Other(8,414)(19,622)
Gross deferred tax liabilities(2,435,597)(1,782,742)
Net deferred income tax asset
$152,652 $438,434 
Included in 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. We have the intent and ability to hold these securities to maturity or recovery of value, whichever is sooner. 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, 2023 and 2022.
There were no material income tax contingencies requiring recognition in our consolidated financial statements as of December 31, 2023. Our tax returns are subject to audit by various federal, state and local tax authorities. The Company's income tax returns are subject to examination by the IRS and state tax authorities, generally for three years after they are due or filed, whichever is later. Tax years ended before December 31, 2019 are no longer open to examination by the IRS.
At December 31, 2023 and 2022, we had federal net operating losses of $506.8 million and $170.5 million, respectively, primarily related to a reinsurance transaction that occurred in 2023. The federal net operating losses are carried forward indefinitely. Additionally, at December 31, 2023 and 2022, we had $185.3 million and $45.7 million, respectively, of capital loss carryforwards for federal income tax purposes that can be carried forward for five years.