8. Life Settlement Contracts, at Fair Market Value
Information about life settlement contracts, all of which are reported at fair value at December 31, 2013 and included in other assets in the Company’s consolidated balance sheets, based on estimated remaining life expectancy for each of the next five succeeding years and in the aggregate, at December 31, 2013 was as follows:
|
Period ending |
|
Number of |
|
|
|
|
| ||
|
December 31, |
|
Contracts |
|
Carrying Value |
|
Face Value |
| ||
|
|
|
|
|
(Dollars in thousands) |
| ||||
|
Year ending 2014 |
|
- |
|
$ |
- |
|
$ |
- |
|
|
Year ending 2015 |
|
1 |
|
- |
|
500 |
| ||
|
Year ending 2016 |
|
- |
|
- |
|
- |
| ||
|
Year ending 2017 |
|
- |
|
- |
|
- |
| ||
|
Year ending 2018 |
|
- |
|
- |
|
- |
| ||
|
Thereafter |
|
26 |
|
- |
|
8,044 |
| ||
|
Total |
|
27 |
|
$ |
- |
|
$ |
8,544 |
|
Key assumptions in measuring the fair value of life settlement contracts were as follows:
|
|
|
December 31, 2013 |
|
December 31, 2012 |
|
|
Discount Rate |
|
18.50% |
|
18.50% |
|
|
Life expectancies range (months) |
|
14 to 250 |
|
16 to 260 |
|
|
Average life expectancy (months) |
|
148 |
|
147 |
|
The Company is required to pay certain life insurance premiums to keep the life settlement contracts in force. Premiums are required to be paid throughout the life of the insured. At December 31, 2013, the anticipated amount of life insurance premiums to be paid by the Company for the next 5 years was as follows:
|
Year Ended |
|
Amount |
| |
|
|
|
(Dollars in thousands) |
| |
|
2014 |
|
$ |
359 |
|
|
2015 |
|
218 |
| |
|
2016 |
|
191 |
| |
|
2017 |
|
204 |
| |
|
2018 |
|
221 |
| |
|
|
|
$ |
1,193 |
|
The Company recorded fair market value losses in the amount of $0, $1.5 million and $1.1 million for the years ended December 31, 2013, 2012 and 2011, respectively. There were no encumbrances on life settlement contracts as of December 31, 2013 and 2012.