NOTES TO CONSOLIDATED FINANCIAL STATEMENTS These conditions generally include unusual or remote circum- stances, such as change in control, insolvency, nonperformance under a treaty, or loss of reinsurance license of such subsidiary. $605.8 million were held in trust to satisfy collateral requirements for reinsurance business for the benefit of certain subsidiaries of the company at December 31, 2003. Additionally, securities with an amortized cost of $1,453.8 million, as of December 31, 2003, were held in trust to satisfy collateral requirements under certain third-party reinsurance treaties. Additionally, under certain condi- tions, RGA may be obligated to move reinsurance from one RGA subsidiary company to another or make payments under the treaty. The following reflects the amounts of policy acquisition costs NOTE 8 DEFERRED POLICY ACQUISITION COSTS 65 THIS IS RGA. 2003 ANNUAL REPORT YEARS ENDED DECEMBER 31, 2003 2002 2001 Current income tax expense (benefit) $ 27,347 $ (14,412) $ 49,738 Deferred income tax expense (benefit) 46,313 57,221 (31,866) Foreign current tax expense 2,048 6,134 9,412 Foreign deferred tax expense (benefit) 17,583 16,572 (1,035) Provision for income taxes $ 93,291 $ 65,515 $ 26,249 Provision for income tax expense differed from the amounts computed by applying the U.S. federal income tax statutory rate of 35% to  pre-tax income as a result of the following (in thousands): Some reinsurance agreements involve reimbursing the ceding  company reinsurance agreement, and are capitalized to the extent deemed recoverable from the future premiums and amortized against future profits of the business. This type of agreement presents a risk to the extent that the business lapses faster than originally anticipated resulting in future profits being insufficient to recover the The provision for income tax expense attributable to income from continuing operations consists of the following (in thousands): NOTE 9 INCOME TAX YEARS ENDED DECEMBER 31, 2003 2002 2001 Deferred policy acquisition costs: Assumed $1,835,923 $1,162,256 $ 860,971 Retroceded (78,827) (77,320) (60,652) Net $1,757,096 $1,084,936 $ 800,319 YEARS ENDED DECEMBER 31, 2003 2002 2001 Beginning of year $1,084,936 $ 800,319 $ 621,475 Capitalized Assumed 1,045,932 615,431 469,734 Retroceded (23,772) (23,001) (13,893) Amortized Assumed (343,368) (314,146) (301,549) Allocated to change in value of embedded derivatives  (28,897) – – Retroceded 22,265 6,333 24,552 End of year $1,757,096 $1,084,936 $ 800,319 deferred and amortized (in thousands):