Commitments and Contingencies

12 Months Ended

Dec. 31, 2021

Commitments and Contingencies [Abstract]

Commitments and Contingencies Disclosure

Commitments and Contingencies

Leases

At December 31, 2021, the Company's operating leases have remaining terms of 1 year to 7 years, with options to extend up to 10 years with no termination provision. The Company's finance leases have an option to terminate after 1 year.

As a result of the effectiveness of our work-from-home transition, in 2021 and 2020 we reduced our real estate footprint by closing and vacating certain of our offices. Whereas we believe that our existing office space is adequate for our current needs, we will continue to evaluate our office needs and may further reduce our real estate footprint in the future. As a result, during the year ended December 31, 2020, the Company recorded charges of $0.8 million related to the abandonment of certain operating leases, which is recognized in Other expenses in the Company's Consolidated Statements of Comprehensive Income.

Components of lease expense were as follows:

	Years Ended December 31,
	2021		2020
	(in millions)
Operating lease expense	$	4.1	$	5.1
Finance lease expense	0.2		0.2
Total lease expense	$	4.3	$	5.3

As of December 31, 2021, the weighted average remaining lease term for operating leases was 5.3 years and for finance leases was 3.8 years. The weighted average discount rate was 2.2% and 7.7% for operating and finance leases, respectively.

Maturities of lease liabilities were as follows:

Year	Operating Leases		Finance Leases
	(in millions)
2022	$	3.3	$	0.1
2023	3.3		0.2
2024	3.2		0.1
2025	3.1		0.1
2026	2.8		—
Thereafter	1.9		—
Total lease payments	17.6		0.5
Less: imputed interest	(1.0)		—
Total	$	16.6	$	0.5

Supplemental balance sheet information related to leases was as follows:

	As of December 31,
	2021		2020
	(in millions)
Operating leases:
Operating lease right-of-use asset	$	14.2	17.4
Operating lease liability	16.6		19.9
Finance leases:
Property and equipment, gross	0.8		0.8
Accumulated depreciation	(0.3)		(0.4)
Property and equipment, net	0.5		0.4
Other liabilities	$	0.5	$	0.4

Supplemental cash flow information related to leases was as follows:

	Years Ended December 31,
	2021		2020
	(in millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used for operating leases	$	4.1	5.1
Financing cash flows used for finance leases	0.1		0.2

Contingencies Surrounding Insurance Assessments

Each of the states where the Company's insurance subsidiaries are licensed to transact business require property and casualty insurers that write business within the respective state to pay various insurance assessments. The Company accrues a liability for estimated insurance assessments as direct premiums are written, losses are recorded, or as other events occur, depending on the relevant laws and regulations of a particular state. The Company defers such costs to the extent they are associated with unearned premium and recognizes them as an expense as such premiums are earned. The Company had an accrued liability for guaranty fund assessments, second injury funds assessments, and other insurance assessments totaling $10.1 million and $18.4 million as of December 31, 2021 and 2020, respectively. These liabilities are generally expected to be paid over periods from less than one year to, in some instances, the duration of the outstanding claims, based on individual state's laws and regulations. The Company also recorded an asset of $19.9 million and $18.7 million, as of December 31, 2021 and 2020, respectively, for remitted, estimated policy charges anticipated to be recouped from policyholders. This asset also includes state assessments that may be recovered through a reduction in future premium taxes. These assets are expected to be realized over one to ten year periods in accordance with their type and each individual state's laws and regulations.

Unfunded Investment Commitments

As of December 31, 2021 and 2020, the Company had unfunded commitments to invest $46.4 million and $63.8 million, respectively, into private equity limited partnerships. See Note 4.