XML 25 R9.htm IDEA: XBRL DOCUMENT

Life Insurance Policies

3 Months Ended

Mar. 31, 2020

As of March 31, 2020, the Trust owns an interest in 2,870 policies of which 470 are life settlement policies and 2,400 are viaticals (the “PHT Portfolio”). The PHT Portfolio’s aggregate face value is approximately $1.1 billion as of March 31, 2020 of which $0.9 billion is attributable to life settlements and $0.2 billion is attributable to viaticals. The PHT Portfolio’s aggregate fair value is $178.8 million as of March 31, 2020 of which $174.0 million is attributable to life settlements and $4.8 million is attributable to viaticals.

As of December 31, 2019, the Trust owned an interest in 2,896 policies of which 483 are life settlement policies and 2,413 are viaticals. The PHT Portfolio’s aggregate face value was approximately $1.1 billion as of December 31, 2019 of which $0.9 billion was attributable to life settlements and $0.2 billion was attributable to viaticals. The PHT Portfolio’s aggregate fair value was estimated at $172.2 million as of December 31, 2019 of which $168.7 million was attributable to life settlements and $3.5 million was attributable to viaticals.

Life expectancy reflects the probable number of years remaining in the life of a class of persons determined statistically, affected by such factors as heredity, physical condition, nutrition, and occupation. It is not an estimate or an indication of the actual expected maturity date or indication of the timing of expected cash flows from death benefits. See: Note 6 – Fair Value Measurements, below for a more detailed discussion of this change in estimating the insureds’ longevity. The following tables summarize the Trust's life insurance policies grouped by remaining life expectancy as of March 31, 2020 and December 31, 2019:

As of March 31, 2020:


Remaining Life Expectancy (Years)	Number of Life Insurance Policies	Face Value		Fair Value
0-1	—	$	—	$	—
1-2	1	46,395		33,134
2-3	7	6,641,466		2,144,809
3-4	74	96,706,937		24,381,542
4-5	193	421,423,814		87,342,134
Thereafter	2,595	599,760,266		64,920,725
	2,870	$	1,124,578,878	$	178,822,344

As of December 31, 2019:


Remaining Life Expectancy (Years)	Number of Life Insurance Policies	Face Value		Fair Value
0-1	—	$	—	$	—
1-2	1	46,395		32,546
2-3	5	4,956,008		1,243,470
3-4	79	106,480,951		26,699,382
4-5	194	401,541,262		81,093,500
Thereafter	2,617	616,520,712		63,173,836
	2,896	$	1,129,545,328	$	172,242,734

Estimated premiums to be paid by the Trust for its portfolio during each of the five succeeding calendar years and thereafter as of March 31, 2020, are as follows:


2020	$	49,279,936
2021	67,254,447
2022	63,434,679
2023	58,438,802
2024	50,742,670
Thereafter	192,225,170

Total	$	481,375,704

The Trust is required to pay premiums to keep its portion of life insurance policies in force. The estimated total future premium payments could increase or decrease significantly to the extent that insurance carriers increase the cost of insurance on their issued policies or that actual mortalities of insureds differ from the estimated life expectancies. Additionally, as the continuing fractional holders default on their future premium obligations, the Trust’s premium liability will increase.

The Plan requires that the continuing fractional holders pay premium calls within 60 days of the day the Trust sends an invoice. The failure of a continuing fractional holder to timely pay a premium call on a position results in a premium default with respect to that position.

The Trust anticipates funding the estimated premium payments from maturities of life insurance policies. It also maintains premium reserves and access to lines of credit.

- Definition

The entire disclosure for life settlement contracts including the accounting policy for life settlement contracts and the classification of cash receipts and cash disbursements in the statement of cash flows and, as applicable, for (1) life settlement contracts accounted for under the investment method based on the remaining life expectancy for each of the first five succeeding years from the date of the statement of financial position and thereafter, as well as in the aggregate: (a) the number of life settlement contracts, (b) the carrying value of the life settlement contracts, and (c) the face value (death benefits) of the life insurance policies underlying the contracts, (d) the life insurance premiums anticipated to be paid for each of the five succeeding fiscal years to keep the life settlement contracts in force as of the date of the most recent statement of financial position presented, (e) the nature of the information that causes the Entity to change its expectations on the timing of the realization of proceeds from the investments in life settlement contracts and the related effect on the timing of the realization of proceeds from the life settlement contracts and for (2) life settlement contracts accounted for under the fair value method, disclosure would include, based on remaining life expectancy for each of the first five succeeding years from the date of the statement of financial position and thereafter, as well as in the aggregate: (a) the number of life settlement contracts, (b) the carrying value of the life settlement contracts, (c) the face value (death benefits) of the life insurance policies underlying the contracts, (d) the reasons for changes in the Entity's expectation of the timing of the realization of the investments in life settlement contracts, and (e) (i) the gains or losses recognized during the period on investments sold during the period and (ii) the unrealized gains or losses recognized during the period on investments that are still held at the date of the statement of financial position.

+ References + Details