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 the fair value of the annuities at December 31, 2024, that the Company has purchased to satisfy its obligations.


Life Insurance Company	A.M. Best Rating	Statement Value of Annuities Exceeding 1% of Statutory Surplus
		(in thousands)
Pacific Life Insurance Company	A+	$	24,059
Metropolitan Tower Life Insurance Company	A+		18,237
American General Life Insurance Company	A		13,752
United of Omaha Life Insurance Company	A+		10,345
Brighthouse Financial Life Insurance Company	A		8,746
New York Life Insurance Company	A++		7,122
Berkshire Hathaway Life Insurance Company of Nebraska	A++		7,107
John Hancock Life Insurance Company	A+		5,278
Athene Annuity and Life Company	A+		3,556
Wilton Reassurance Company	A+		2,816
Protective Life Insurance Company	A+		2,686
Other			6,035
		$	109,739

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 has operating and finance leases for office space and equipment. Our leases have remaining lease terms of one month to 49 months, some of which include options to extend the leases for up to five years.

The components of lease expense were as follows:


	Year Ended December 31,
	2024		2023
	(in thousands)
Operating lease cost	$	101	$	108
Finance lease cost:
Amortization of right-of-use assets		398		320
Interest on lease liabilities		11		8
Total finance lease cost	$	409	$	328

Supplemental cash flow information related to leases was as follows:


	Year Ended December 31,
	2024		2023
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	247	$	(77	)
Operating cash flows from finance leases		11		8
Financing cash flows from finance leases		85		91

Right-of-use assets obtained in the exchange for the lease obligations were as follows:


	December 31,
	2024		2023
	(in thousands)
Operating leases	$	325	$	26
Finance leases		—		99

Supplemental balance sheet information related to leases was as follows:


	December 31, 2024			December 31, 2023			Balance Sheet Classification
	(in thousands)
Operating leases:
Operating lease right-of-use assets	$	276		$	29		Other assets

Operating lease liabilities	$	276		$	29		Accounts payable and other liabilities

Finance leases:
Finance lease right-of-use assets	$	462		$	462
Finance lease accumulated amortization right-of-use assets		(398	)		(320	)
Property and equipment, net	$	64		$	142		Property and equipment, net

Finance lease liabilities	$	152		$	238		Accounts payable and other liabilities


	December 31,
	2024				2023
Weighted average remaining lease term:
Operating leases		3.8		years		0.7		years
Finance leases		2.1		years		2.9		years
Weighted average discount rate:
Operating leases		8.45	%			6.66	%
Finance leases		5.89	%			5.52	%

The following is a maturity analysis of the annual undiscounted cash flows of the operating and finance lease liabilities as of December 31, 2024:


	Operating Leases		Finance Leases
	(in thousands)
2025	$	88	$	93
2026		83		49
2027		73		22
2028		75		—
2029		6		—
Total lease payments		325		164
Less imputed interest		49		12
Total	$	276	$	152

Rental expense was $0.1 million in 2024, and $0.1 million in both 2023 and 2022.