Commitments and Contingencies

12 Months Ended

Dec. 31, 2012

Commitments and Contingencies [Abstract]

Commitments and Contingencies

17. 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 (in thousands) the fair value of the annuities at December 31, 2012, that the Company has purchased to satisfy its obligations. The A.M. Best Company rating is shown parenthetically.

Life Insurance Company	Statement Value of Annuities Exceeding 1% of Statutory  Surplus
American General Life Insurance (A)	$	19,930
Pacific Life and Annuity Company (A+)		15,451
New York Life Insurance Company (A++)		12,436
Metropolitan Life Insurance Company (A+)		11,826
John Hancock Life Insurance Company USA (A+)		7,370
Aviva Life Insurance Company (A)		7,085
Genworth Life Insurance Company (A)		5,246
Liberty Life Assurance Company of Boston (A)		4,733
Other		11,835
	$	95,912

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 leases equipment and office space under noncancelable operating leases. At December 31, 2012, future minimum lease payments are as follows (in thousands):

2013	$	126
2014		50
2015		11
	$	187

Rental expense was $237,000 in 2012, $293,000 in 2011 and $475,000 in 2010.