v3.25.1
Income Taxes
 3 Months Ended
Mar. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company is incorporated under the laws of the United States. We have subsidiaries based in the U.S. that are subject to U.S. tax laws. Under current law, these subsidiaries are taxed at the applicable corporate tax rates. Beginning January 1, 2024, our U.S. subsidiaries file a consolidated U.S. federal income tax return with BAMR US Holdings LLC, a subsidiary of Brookfield Wealth Solutions Ltd.
We also have operations in Italy and United Kingdom which are subject to income taxes imposed by the jurisdiction in which they operate. Furthermore, we have an operation in Barbados which is not subject to income tax under the laws of that country.
On August 16, 2022, U.S. legislation referred to as the Inflation Reduction Act of 2022 was enacted. This legislation enacted a new Corporate Alternative Minimum Tax (“CAMT”) and Excise Tax on Repurchases of Corporate Stock. The Company has determined as of the period ended March 31, 2025, that it is subject to CAMT. The recognition of applicable CAMT is reported on a consolidated basis with Brookfield Wealth Solutions Ltd. The Company is not subject to Excise Tax on Repurchases of Corporate Stock.
Our expected income tax provision computed on pre-tax income (loss) at the weighted average tax rate has been calculated as the sum of the pre-tax income (loss) in each jurisdiction multiplied by that jurisdiction’s applicable statutory tax rate. For the three months ended March 31, 2025 and 2024, pre-tax income (loss) attributable to our operations and the corresponding operations’ effective tax rates were as follows: 
For the Three Months Ended March 31,
20252024
(in millions)Pre-Tax
Income (Loss)		Effective
Tax Rate		Pre-Tax
Income (Loss)		Effective
Tax Rate
United States$38.9 21.3 %$28.0 5.5 %
United Kingdom— 
(1)
— %— — %
Italy(0.4)

— %(0.8)

(4.7)%
Pre-tax income (loss)$38.5 21.6 %$27.2 5.8 %
(1) Pre-tax income (loss) for the respective year was less than $0.1 million.
A reconciliation of the difference between the provision (benefit) for income taxes and the expected tax provision (benefit) at the weighted average tax rate is as follows:
For the Three Months Ended March 31,
(in millions)20252024
Income tax provision (benefit) at expected rate$8.1 $5.7 
Tax effect of:
Nontaxable investment income(0.1)— 
Withholding taxes0.1 — 
Change in valuation allowance(1.3)— 
Prior period adjustment1.2 (4.4)
Other0.3 0.3 
Income tax provision (benefit)$8.3 $1.6 
Our gross deferred tax assets are supported by taxes paid in previous periods, reversal of taxable temporary differences and recognition of future taxable income. Management regularly evaluates the recoverability of the deferred tax assets and makes any necessary adjustments to them based upon any changes in management’s expectations of future taxable income. Realization of deferred tax assets is dependent upon our generation of future taxable income sufficient to recover tax benefits that cannot be recovered from taxes paid in the carryback period, generally for our U.S. property and casualty insurers two years for net operating losses and for all our U.S. subsidiaries three years for capital losses. If a company determines that any of its deferred tax assets will not result in future tax benefits, a valuation allowance must be established for the portion of these assets that are not expected to be realized. For three months ended March 31, 2025, the net change in valuation allowance for deferred tax assets was a decrease of $1.3 million related to the reduction of net operating loss carryforwards incurred in the United Kingdom. Existing valuation allowances pertain to Internal Revenue Code Section 382 limited net operating loss carryforwards within the United States and cumulative losses incurred in the United Kingdom and Italy. Based upon a review of all positive and negative evidence, our management concluded that it is more-likely-than-not that $79.3 million of our deferred tax assets will be realized. Should our future income deviate from our present income estimates, the Company’s realization assessment may differ from our current conclusion.
For any uncertain tax positions not meeting the “more-likely-than-not” recognition threshold, accounting standards require recognition, measurement and disclosure in the Company’s Condensed Consolidated Financial Statements. The Company does not have any recognized uncertain tax positions for federal or state income tax liability for the three months ended March 31, 2025.
Furthermore, there are no interest or penalties recorded for federal or state income tax liability for the three months ended March 31, 2025.
Our U.S. subsidiaries are no longer subject to U.S. federal and state income tax examinations by tax authorities for years before 2021. Our U.K. subsidiary is no longer subject to U.K. income tax examinations by His Majesty’s Revenue and Customs for years before 2023. Our Ireland subsidiary is no longer subject to Ireland income tax examinations by tax authorities for years before 2020. Our Italy subsidiary is no longer subject to Italy income tax examinations by tax authorities for years before 2019.