Commitments and Contingencies

6 Months Ended

Jun. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

Litigation

We are involved in claims-related legal actions arising in the ordinary course of business. We accrue amounts resulting from claims-related legal actions in unpaid losses and LAE during the period that we determine an unfavorable outcome becomes probable and we can estimate the amounts. Management makes revisions to our estimates based on its analysis of subsequent information that we receive regarding various factors, including: (i) per claim information; (ii) company and industry historical loss experience; (iii) judicial decisions and legal developments in the awarding of damages; and (iv) trends in general economic conditions, including the effects of inflation.

At June 30, 2020, we were not involved in any material non-claims-related legal actions.

Commitments to fund partnership investments

We have fully funded three limited partnership investments and have committed to fund our remaining four limited partnership investments. The amount of unfunded commitments was $2,161,000 and $2,201,000 at June 30, 2020 and December 31, 2019, respectively.

Leases

We, as lessee, have entered into leases of commercial office space of various term lengths. In addition to office space, we lease office equipment and a parking lot under operating leases and vehicles under finance leases.

The classification of operating and finance lease asset and liability balances within the Unaudited Condensed Consolidated Balance Sheets was as follows:



	Financial Statement Line	June 30, 2020		December 31, 2019
Assets
Operating lease assets	Other assets	$	2,225	$	335
Financing lease assets	Property and equipment, net	1,431		1,263
Total lease assets		$	3,656	$	1,598

Liabilities
Operating lease liabilities	Operating lease liability	$	2,369	$	324
Financing lease liabilities	Other liabilities	42		34
Total lease liabilities		$	2,411	$	358

The components of lease expenses were as follows:



	Three Months Ended					Six Months Ended
	June 30, 2020			June 30, 2019		June 30, 2020		June 30, 2019
Operating lease expense	$	168		$	48	$	295	$	91
Financing lease expense:
Amortization of leased assets	176			89		327		146
Interest on lease liabilities	1		1	—		1		—
Short-term lease expense	—			47		—		124
Net lease expense	$	345		$	184	$	623	$	361

At June 30, 2020, future minimum gross lease payments relating to these non-cancellable operating and finance lease agreements were as follows:



	Operating Leases			Finance Leases			Total
Remaining in 2020	$	313		$	11		$	324
2021	606			22			628
2022	532			12			544
2023	517			2			519
2024	528			—			528
Thereafter	1,373			—			1,373
Total undiscounted future minimum lease payments	3,869			47			3,916
Less: Imputed interest	(1,500		)	(5		)	(1,505		)
Present value of lease liabilities	$	2,369		$	42		$	2,411

Weighted average remaining lease term and discount rate related to operating and finance leases were as follows:



	June 30, 2020		December 31, 2019
Weighted average remaining lease term (months)
Operating leases	72		176
Financing leases	27		28

Weighted average discount rate
Operating leases	3.57	%	4.00	%
Financing leases	3.27	%	3.27	%

Other cash and non-cash related activities were as follows:



	Three Months Ended				Six Months Ended
	June 30, 2020		June 30, 2019		June 30, 2020		June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities
Investing cash flows from financing leases	$	281	$	116	$	478	$	477

Right-of-use assets obtained in exchange for new operating lease liabilities	—		—		2,136		—
Right-of-use assets obtained in exchange for new financing lease liabilities	291		119		494		490

See Note 9 of these Notes to Unaudited Condensed Consolidated Financial Statements for information regarding commitments related to long-term debt, and Note 11 of these Notes to Unaudited Condensed Consolidated Financial Statements for information regarding commitments related to regulatory actions.