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Commitments and Contingencies | 12 Months Ended
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Dec. 31, 2015
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies |
16. | 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, 2015, 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 |
Metropolitan Life Insurance Company (A+) |  | $ | 16,279 |
Pacific Life and Annuity Company (A+) |  |  | 15,739 |
American General Life Insurance (A) |  |  | 15,364 |
New York Life Insurance Company (A++) |  |  | 11,303 |
John Hancock Life Insurance Company USA (A+) |  |  | 7,596 |
Athene Annuity and Life Assurance Company (A-) |  |  | 6,133 |
Liberty Life Assurance Company of Boston (A) |  |  | 3,837 |
Other |  |  | 19,441 |
|  | $ | 95,692 |
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, 2015, future minimum lease payments are as follows (in thousands):
2016 |  | $ | 152 |
2017 |  |  | 114 |
2018 |  |  | 68 |
2019 |  |  | 6 |
|  | $ | 340 |
Rental expense was $0.2 million in 2015, 2014 and 2013. In February 2015, the Company was notified of an adverse verdict against its subsidiary, American Interstate Insurance Company, related to a 2009 workers’ compensation claim in the State of Iowa. The verdict was for $25.3 million, of which $0.3 million was for actual damages and $25.0 million was awarded for punitive damages. American Interstate is appealing both the verdict and the damage awards. The Company has posted an appeal bond in the amount of $27.8 million, as required by law. The Company maintains reinsurance against catastrophic losses, including court ordered judgments. The Company presently believes that this reserve amount, together with its reinsurance coverage, is adequate to satisfy this claim. As of December 31, 2015, the Company’s total reserve for the claim was $2.5 million. The $2.5 million reserve does not include payments that the Company has previously paid in this case. The expenses, plus the $2.5 million reserve, total $5.4 million. The Company’s retention is $5.0 million before its reinsurance providers are obligated to reimburse the Company for additional costs.

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