ASSURANT INC

27. Commitments and Contingencies

Leases

The Company and its subsidiaries lease office space and equipment under operating lease arrangements. Certain facility leases contain escalation clauses based on increases in the lessors’ operating expenses.

As of December 31, 2023 and 2022, the lease liability was $35.3 million and $39.7 million, respectively, included inaccounts payable and other liabilities in the consolidated balance sheets. As of December 31, 2023 and 2022, the right-of-use asset was $23.0 million and $29.6 million, respectively, included inother assets in the consolidated balance sheets. For the years ended December 31, 2023, 2022 and 2021 the operating lease cost recognized for leases with terms in excess of 12 months was $19.0 million, $18.1 million and $23.1 million respectively, and related cash outflows reducing the lease liability were $19.4 million, $19.3 million and $23.8 million, respectively. As of December 31, 2023, the weighted average remaining lease term and discount rate was 5.0 years and 5.0%, respectively. As of December 31, 2022, the weighted average remaining lease term and discount rate was 5.6 years and 4.4%, respectively. For the years ended December 31, 2023, 2022 and 2021 the short-term lease cost recognized for leases with terms of 12 months or less was $1.1 million, $1.5 million and $2.9 million, respectively.

At December 31, 2023, the lease liability by maturity is as follows:

Letters of Credit

In the normal course of business, letters of credit are issued for various purposes. These letters of credit are supported by commitments under which the Company is required to indemnify the financial institution issuing the letter of credit if the letter of credit is drawn. The Company had $2.9 million and $2.7 million of letters of credit outstanding as of December 31, 2023 and 2022, respectively.

Legal and Regulatory Matters

The Company is involved in a variety of litigation and legal and regulatory proceedings relating to its current and past business operations and, from time to time, it may become involved in other such actions. The Company continues to defend itself vigorously in these proceedings. The Company has participated and may participate in settlements on terms that the Company considers reasonable.

The Company has established an accrued liability for certain legal and regulatory proceedings. The possible loss or range of loss resulting from such litigation and regulatory proceedings, if any, in excess of the amounts accrued is inherently unpredictable and uncertain. Consequently, no reasonable estimate can be made of any possible loss or range of loss in excess of the accrual. Although the Company cannot predict the outcome of any pending legal or regulatory proceeding, or the potential losses, fines, penalties or equitable relief, if any, that may result, it is possible that such outcome could have a material adverse effect on the Company’s consolidated results of operations or cash flows for an individual reporting period. However, on the basis of currently available information, management does not believe that the pending matters are likely to have a material adverse effect, individually or in the aggregate, on the Company’s financial condition.