(14) Investment in Life Settlements (Life Insurance Policies)

During the six months ended June 30, 2011 and 2010, the Company acquired certain life insurance policies as a result of certain of the Company's borrowers defaulting on premium finance loans and relinquishing the underlying policy to the Company in exchange for being released from further obligations under the loan. During the three months and six months ended June 30, 2011, the Company also purchased life insurance policies in the life settlement and secondary markets. The Company elected to account for these policies using the fair value method. The fair value is determined on a discounted cash flow basis, incorporating current life expectancy assumptions. The discount rate incorporates current information about market interest rates, the credit exposure to the insurance company that issued the life settlement contracts and the Company's estimate of the risk premium an investor in the policy would require.

The Company recorded an unrealized change in fair value gains of approximately $17.7 million and $1,000 during the three months ended June 30, 2011 and 2010, respectively and a gain of approximately $28.9 million and a loss of approximately $201,000 during the six months ended June 30, 2011 and 2010, respectively, which was recorded at the time of foreclosure or acquisition related to recording the policies acquired at the transaction price and the remeasuring at fair value which is included in unrealized change in fair value of life settlements in the accompanying consolidated and combined statement of operations.

The following table describes the Company's investment in life settlements as of June 30, 2011 based on remaining life expectancy for the next 5 years and thereafter (dollars in thousands):


	Number of
	Life Settlement		Fair		Face
Remaining Life Expectancy (In Years)	Contracts		Value		Value

0 — 1		—	$	—	$	—
1 — 2		—		—		—
2 — 3		1		925		2,000
3 — 4		1		812		2,200
4 — 5		2		3,957		9,000
Thereafter		114		68,984		551,846

Total		118	$	74,678	$	565,046

Of the 118 policies held as of June 30, 2011, 76 of these policies previously had lender protection insurance related to their premium finance loans prior to being classified as investments in life settlements.

Estimated premiums to be paid for each of the five succeeding fiscal years and thereafter, to keep the life insurance policies in force as of June 30, 2011, are as follows (in thousands):


Twelve Months Ended June 30,
2011		14,327
2012		13,984
2013		13,128
2014		12,643
2015		13,033
Thereafter		174,441

	$	241,556

The amount of $241.6 million noted above represents the total future premium payments required to keep the life insurance policies in force during the life expectancies of all the underlying insured lives. The Company expects to use proceeds of death benefits from expected mortalities during these periods to make ongoing premium payments on the remaining in-force policies. The Company estimates that death benefit proceeds received will exceed premiums to be paid during 2014 and each year thereafter.