Commitments and Contingencies

9 Months Ended

Sep. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Operating Leases

All leases are office space leases and are classified as operating leases that expire through 2031. Some of our office leases include the option to extend for up to 5 years or less at management’s discretion. Such extension options were not included in the measurement of the lease liability. Below is a summary of our right of use asset and lease liability as of September 30, 2021:

	As of
	September 30, 2021
Right of use asset - Operating leases	$	24,838
Operating lease liability	$	30,407
Weighted-average remaining lease term (years)	7.0
Weighted-average discount rate (1)	7.5		%

(1)    Discount rate was determined by applying available market rates to lease obligations based upon their term.

As of September 30, 2021, the approximate aggregate minimum future lease payments required for our lease liability over the remaining lease periods are as follows:

	September 30, 2021
Remainder of 2021	$	2,195
2022	7,855
2023	7,074
2024	6,170
2025	5,557
2026 and thereafter	18,645
Total minimum payments	47,496
Less: liabilities held for sale	(650)
Less: present value adjustment	(16,439)
Total	$	30,407

The following table presents rent expense for the Company’s office leases recorded on the condensed consolidated statements of operations for the following periods:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Rent expense for office leases (1)	$	2,074	$	959	$	6,520	$	5,196

(1)     Includes lease expense of $134 for the three months ended September 30, 2020, and $306 and $374 for the nine months ended September 30, 2021 and 2020, respectively, for assets held for sale.

Litigation

The Company is a defendant in Mullins v. Southern Financial Life Insurance Co., which was filed in February 2006, in the Pike County Circuit Court, in the Commonwealth of Kentucky. A class was certified in June 2010. At issue is the duration or term of coverage under certain disability and life credit insurance policies. The action alleges violations of the Consumer Protection Act and certain insurance statutes, as well as common law fraud and seeks compensatory and punitive damages, attorney fees and interest. To date, the court has not awarded sanctions in connection with Plaintiffs’ April 2012 Motion for Sanctions. In July 2021, the court entered an Order granting Plaintiffs’ Motion for Partial Summary Judgment as to certain disability policies, which the Company intends to challenge. No trial or additional hearings are currently scheduled.

The Company considers such litigation customary in the insurance industry. In management's opinion, based on information

available at this time, the ultimate resolution of such litigation, which it is vigorously defending, should not be materially adverse to the financial position of the Company. It should be noted that large punitive damage awards, bearing little relation to actual damages sustained by plaintiffs, have been awarded in certain states against other companies in the credit insurance business. At this time, the Company cannot estimate a range of loss that is reasonably possible.

The Company and its subsidiaries are parties to other legal proceedings in the ordinary course of business. Although the Company’s legal and financial liability with respect to such proceedings cannot be estimated with certainty, the Company does not believe that these proceedings, either individually or in the aggregate, are likely to have a material adverse effect on the Company’s financial position.