Commitments and contingencies

Legal Proceedings

Sirius Group, and the insurance and reinsurance industry in general, are routinely subject to claims related litigation and arbitration in the normal course of business, as well as litigation and arbitration that do not arise from, or are directly related to, claims activity. Sirius Group estimates of the costs of settling matters routinely encountered in claims activity are reflected in the reserves for unpaid loss and LAE. (See Note 5.)

Sirius Group considers the requirements of ASC 450, Contingencies ("ASC 450"), when evaluating its exposure to non-claims related litigation and arbitration. ASC 450 requires that accruals be established for litigation and arbitration if it is probable that a loss has been incurred and it can be reasonably estimated. ASC 450 also requires that litigation and arbitration be disclosed if it is probable that a loss has been incurred or it there is a reasonable possibility that a loss may have been incurred. Management has considered all pending and/or threatened non-claims related litigation and has not identified any matters triggering disclosure under ASC 450.

Leases

Sirius Group leases office space and equipment under various noncancelable operating lease agreements. The average life of the office leases is 7 years and the equipment leases is 3 years.

During the three months ended March 31, 2020 and March 31, 2019, Sirius Group recognized operating lease expense of $3.0 million and $2.6 million, respectively, including property taxes and routine maintenance expense as well as rental expenses related to short term leases. As of March 31, 2020 and December 31, 2019, Sirius Group had $26.1 million and $27.4 million of operating lease right-of-use assets, respectively, included in Other assets. As of March 31, 2020 and December 31, 2019, Sirius Group had $27.8 million and $29.3 million of operating lease liability, respectively, included in Other liabilities.

The following table presents the lease balances within the Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019:



(millions)	Balance Sheet Classification	March 31, 2020		December 31, 2019
Operating lease right-of-use assets	Other assets		$26.1		$27.4
Current lease liabilities	Other liabilities		$7.6		$8.3
Non-current lease liabilities	Other liabilities		$20.2		$21.0

The following table presents weighted average remaining lease term and weighted average discount rate as of March 31, 2020:



Weighted average lease term (years) as at March 31, 2020
Leased offices	7 years
Leased equipment	3 years
Weighted average discount rate:
Leased offices	3.6	%
Leased equipment	3.4	%

The following table presents future annual minimum rental payments required under non-cancellable leases and the present value discount to arrive at total lease liability as of March 31, 2020:



(Millions)	Future Payments
2020	$	6.5
2021	8.1
2022	7.2
2023	4.7
2024	2.3
2025 and after	1.1
Total future annual minimum rental payments as of March 31, 2020	29.9
Less: present value discount	(2.1		)
Total lease liability as of March 31, 2020	$	27.8

As of March 31, 2020, the Company's future operating lease obligations that have not yet commenced are immaterial.