Unum 2014 Annual Report Download - page 160

158 UNUM • 2014 ANNUAL REPORT
Notes To Consolidated Financial Statements
Note 14. Commitments and Contingent Liabilities
Commitments
We have noncancelable lease obligations on certain office space and equipment. As of December 31, 2014, the aggregate net
minimum lease payments were $227.1 million payable as follows: $40.2 million in 2015, $39.6 million in 2016, $36.0 million in 2017,
$18.8 million in 2018, $16.9 million in 2019, and $75.6 million thereafter. Rental expense for the years ended December 31, 2014,
2013, and 2012 was $44.2 million, $44.1 million, and $41.6 million, respectively.
At December 31, 2014, we had unfunded commitments of $238.4 million for certain of our investments. The commitments are not
legally binding and may or may not be funded during the term of the investments.
Contingent Liabilities
We are a defendant in a number of litigation matters. In some of these matters, no specified amount is sought. In others, very large
or indeterminate amounts, including punitive and treble damages, are asserted. There is a wide variation of pleading practice permitted in
the United States courts with respect to requests for monetary damages, including some courts in which no specified amount is required
and others which allow the plaintiff to state only that the amount sought is sufficient to invoke the jurisdiction of that court. Further, some
jurisdictions permit plaintiffs to allege damages well in excess of reasonably possible verdicts. Based on our extensive experience and
that of others in the industry with respect to litigating or resolving claims through settlement over an extended period of time, we believe
that the monetary damages asserted in a lawsuit or claim bear little relation to the merits of the case, or the likely disposition value.
Therefore, the specific monetary relief sought is not stated.
Unless indicated otherwise in the descriptions below, reserves have not been established for litigation and contingencies. An estimated
loss is accrued when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.
Claims Handling Matters
We and our insurance subsidiaries, in the ordinary course of our business, are engaged in claim litigation where disputes arise as
a result of a denial or termination of benefits. Most typically these lawsuits are filed on behalf of a single claimant or policyholder, and in
some of these individual actions punitive damages are sought, such as claims alleging bad faith in the handling of insurance claims. For our
general claim litigation, we maintain reserves based on experience to satisfy judgments and settlements in the normal course. We expect
that the ultimate liability, if any, with respect to general claim litigation, after consideration of the reserves maintained, will not be material
to our consolidated financial condition. Nevertheless, given the inherent unpredictability of litigation, it is possible that an adverse outcome
in certain claim litigation involving punitive damages could, from time to time, have a material adverse effect on our consolidated results
of operations in a period, depending on the results of operations for the particular period.
From time to time class action allegations are pursued where the claimant or policyholder purports to represent a larger number
of individuals who are similarly situated. Since each insurance claim is evaluated based on its own merits, there is rarely a single act or
series of actions which can properly be addressed by a class action. Nevertheless, we monitor these cases closely and defend ourselves
appropriately where these allegations are made.