Long and Short-Term Debt

6 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

Long and Short-Term Debt

Note 8 – Long and Short-Term Debt

Beginning in the fourth quarter of 2017, Fidelity Life changed the commission structure related to Efinancial’s sale of the RAPIDecision® Life to pay annual level commissions over the life of the product instead of up-front, or first-year-only commissions. This change reduced Fidelity Life’s surplus strain associated with issuing RAPIDecision® Life business by spreading its statutory commission expenses over the life of the policy instead of incurring it all in the policy year of issue. In order to help provide liquidity for Efinancial through the receipt of larger first-year-only commissions, Fidelity Life and Efinancial entered into a financing arrangement with Hannover Life under which, on a monthly basis, Hannover Life advances to Efinancial amounts approximately equal to the first-year-only commissions on Fidelity Life RAPIDecision® Life business sold through Efinancial. In exchange, Efinancial assigns to Hannover Life its right to all future levelized commission payments on the business due from Fidelity Life, and Fidelity Life pays to Hannover Life the level commissions over the life of the contract. The 2017 arrangement was amended in 2021 and Fidelity Life was removed from any obligation under this prior arrangement. On March 31, 2022, Efinancial entered into a new commission financing arrangement and is taking new advances on this financing arrangement. Efinancial’s ability to receive advances under this arrangement will terminate when the aggregate amount advanced under the arrangement equals or exceeds $36.0 million. At June 30, 2022 and December 31, 2021, the Company had a net advance of $27,827 and $21,937, respectively, under this arrangement. At June 30, 2022, the Company expects to pay back the aggregate amounts as presented in the following table.

	June 30, 2022
Due in one year or less	$	5,916
Due after one year through two years		4,263
Due after two years through three years		3,972
Due after three years through four years		3,754
Due after four years through five years		3,531
Due after five years		25,476
Less discount		(13,915	)
Total long/short-term debt	$	32,997