Commitments and Contingencies

12 Months Ended

Dec. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

16.Commitments and Contingencies

The Company is a party to various legal actions arising principally from claims made under insurance policies and contracts. Those actions are considered by the Company in estimating reserves for loss and loss adjustment expenses. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s consolidated financial position or results of operations.

The Company provides workers’ compensation insurance in several states that maintain second-injury funds. Incurred losses on qualifying claims that exceed certain amounts may be recovered from these state funds. There is no assurance that the applicable states will continue to provide funding under these programs.

The Company manages risk on certain long-duration claims by settling these claims through the purchase of annuities from unaffiliated carriers. In the event these carriers are unable to meet their obligations under these contracts, the Company could be liable

to the claimants. The following table summarizes the fair value of the annuities at December 31, 2023, that the Company has purchased to satisfy its obligations.

Life Insurance Company	A.M. Best Rating	Statement Value of Annuities Exceeding 1% of Statutory Surplus
		(in thousands)
Pacific Life Insurance Company	A+	$	20,961
Metropolitan Tower Life Insurance Company	A+		15,173
American General Life Insurance Company	A		14,171
United of Omaha Life Insurance Company	A+		10,316
Brighthouse Financial Life Insurance Company	A		9,039
New York Life Insurance Company	A++		8,271
Berkshire Hathaway Life Insurance Company of Nebraska	A++		7,226
John Hancock Life Insurance Company	A+		5,569
Athene Annuity and Life Company	A		3,644
Protective Life Insurance Company	A+		3,514
Wilton Reassurance Company	A+		2,971
Other			6,041
		$	106,896

Substantially all of the annuities are issued or guaranteed by life insurance companies that have an A.M. Best Company rating of “A” (Excellent) or better.

The Company has operating and finance leases for office space and equipment. Our leases have remaining lease terms of one month to 47 months, some of which include options to extend the leases for up to five years.

The components of lease expense were as follows:

	Year Ended December 31,
	2023		2022
	(in thousands)
Operating lease cost	$	108	$	103
Finance lease cost:
Amortization of right-of-use assets		320		193
Interest on lease liabilities		8		9
Total finance lease cost	$	328	$	202

Supplemental cash flow information related to leases was as follows:

	Year Ended December 31,
	2023			2022
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	(77	)	$	(87	)
Operating cash flows from finance leases		8			9
Financing cash flows from finance leases		91			58

Right-of-use assets obtained in the exchange for the lease obligations were as follows:

	December 31,
	2023		2022
	(in thousands)
Operating leases	$	26	$	45
Finance leases		99		122

Supplemental balance sheet information related to leases was as follows:

	December 31, 2023			December 31, 2022			Balance Sheet Classification
	(in thousands)
Operating leases:
Operating lease right-of-use assets	$	29		$	106		Other assets
Operating lease liabilities	$	29		$	106		Accounts payable and other liabilities
Finance leases:
Finance lease right-of-use assets	$	462		$	362
Finance lease accumulated amortization    right-of-use assets		(320	)		(193	)
Property and equipment, net	$	142		$	169		Property and equipment, net
Finance lease liabilities	$	238		$	230		Accounts payable and other liabilities

	December 31,
	2023				2022
Weighted average remaining lease term:
Operating leases		0.7		years		1.2		years
Finance leases		2.9		years		3.0		years
Weighted average discount rate:
Operating leases		6.66	%			1.59	%
Finance leases		5.52	%			3.33	%

The following is a maturity analysis of the annual undiscounted cash flows of the operating and finance lease liabilities as of December 31, 2023:

	Operating Leases		Finance Leases
	(in thousands)
2024	$	29	$	97
2025		1		93
2026		—		49
2027		—		22
2028		—		—
Total lease payments		30		261
Less imputed interest		1		23
Total	$	29	$	238

Rental expense was $0.1 million in 2023, $0.1 million in 2022 and $0.2 million in 2021.