eea life settlements fund pcc limited annual report...

EEA Life Settlements Fund PCC Limited

Annual Report and Audited Consolidated Financial Statements for the year ended 31 December 2014

EEA Life Settlements Fund PCC Limited Directory Directors M A Colton (Chairman) S Burnett (appointed 8 April 2014) C Daly D Jeffreys (appointed 8 April 2014) A J Simpson S A Shaw The address for each of the directors is that of the registered office Registered Office Regency Court Glategny Esplanade St Peter Port Guernsey Manager EEA Fund Management (Guernsey) Limited PO Box 282 Regency Court Glategny Esplanade St Peter Port Guernsey GY1 3RH Administrator, Secretary and Registrar International Administration Group (Guernsey) Limited PO Box 282 Regency Court Glategny Esplanade St Peter Port Guernsey GY1 3RH Investment Adviser ViaSource Funding Group LLC 106 Allen Road Bernards Township New Jersey 07920 USA

Legal Advisers to the Fund (as to Guernsey law) Ogier Redwood House St Julian’s Avenue St Peter Port Guernsey GY1 1WA Custodian BNP Paribas Securities Services SCA, Guernsey Branch BNP Paribas House St Julian’s Avenue St Peter Port Guernsey GY1 1WA Sub Custodian RBS Citizens N.A. One Citizens Plaza RC0310 Providence R102903 USA Auditors Grant Thornton Limited Lefebvre House Lefebvre Street St Peter Port Guernsey GY1 3TF

EEA Life Settlements Fund PCC Limited Annual Report and Audited Consolidated Financial Statements for the year ended 31 December 2014

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Investment adviser’s report ViaSource Funding Group, LLC (“ViaSource”) is the investment adviser to EEA Life Settlements Fund PCC Limited (the “Fund”), selecting and managing a pool of policies that meet the purchasing criteria outlined in the prospectus. The purchasing criteria were designed to provide a pool of policies that are diversified among insurers, insureds and illnesses, from creditworthy insurance companies and are accurately underwritten for life expectancy. Prior to purchase all policies are certified by Mills, Potoczak and Company, who act as servicing agent, as to meeting the purchasing criteria. The cash reserves and policies purchased are held in the Trust Department of RBS Citizens N.A. and therefore are not part of the assets of the bank. In addition, ViaSource’s team of medical professionals tracks the progress of the insureds. The Fund has purchased a total of 926 policies from 108 different insurers and 729 separate insureds with a total net death benefit of $1.87 billion. The weighted average current insureds were 86 years old at year end. Revised Life Expectancies As of June 30. 2013 the Board of Directors revised the life expectancy of remaining policies (note 1) which extended the weighted average life expectancy remaining by 28 months. 504 of the policies with a combined Death Benefit of US$732.8 million have matured since inception. The policies that matured did so at 77%(1) of their projected life expectancy and represented 39% of the total Net Death Benefit of policies purchased and 54% of the number of policies purchased. The 413 policies outstanding as of 31 December 2014 had a total net death benefit of US$1.12 billion and an average Face Value of US$2.72 million. The majority 68% of the active fund are comprised of policies with death benefits of $5.0 million or greater. These policies had a weighted average remaining months to LE of 41.0 months. Policies are issued by 79 insurance companies with a weighted average rating of A+. Revised Valuation Method As of December 31, 2014 the Fund appointed an independent third party to determine the value of the policies outstanding. The third party utilizes an actuarial present value model which adjusts the life expectancies obtained from the independent life expectancy providers and applies a discount rates based upon their experience with the independent life expectancy provider. Their adjusted weighted average remaining Life Expectancy is 48.6 months. Current Market Overview The insurance market in the United States is estimated by several research groups to be in excess of US$21 trillion with over US$1 trillion of policies lapsing without value to the policyholders annually. The policies purchased by the life settlement industry are estimated to be approximately US$10 billion annually. The market for selling policies to third parties is relatively new in the United States with most individuals not aware of the ability to sell their policy. Therefore, the potential growth for the market is tremendous as more individuals become aware of the product. Currently, financial institutions including security firms, banks and hedge funds are purchasing policies in the market with life expectancies greater than 4 years and varying other criteria including minimum age of insureds. Most firms utilise actuarial models where policies purchased are evaluated on a pool basis with actuarial and probability assumptions allied to the policies to determine the projected return and cash flows from the pools. ViaSource Funding Group LLC June 2015 The percentage of life expectancy represents prior to July 2013 refers to the expected maturity date based on the life expectancy estimates obtained from independent life expectancy providers at the time of purchase. From July 2013 onwards, the expected maturity date is based on the life expectancy estimates obtained from a life expectancy provider in 2013.


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Directors’ Report The Directors present their annual report and the audited consolidated financial statements of EEA Life Settlements Fund PCC Limited (“Company” or “Fund”) and its subsidiaries (collectively the “Group”) for the year ended 31 December 2014. Business activities The Company was registered in Guernsey on 20 June 2005 under The Companies (Guernsey) Law, 2008. The Group’s investment objective is to acquire and trade the property interest in a diversified portfolio of outstanding life insurance policies issued primarily in the United States. Authorisation The Company has been authorised by the Guernsey Financial Services Commission (“the Commission”) under The Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended, as a Class B Scheme as defined in The Collective Investment Schemes (Class B) Rules 1990. The Commission has issued The Authorised Collective Investment Schemes (Class B) Rules 2013 which came into operation on 2 January 2014 and revised the old rules. Each of the Company’s active Cells was listed on the Channel Islands Securities Exchange. The listing was suspended on 30 November 2011 and cancelled on 30 June 2014. At 31 December 2014, there were twenty eight cells in operation:

USD Fund Class X Cell (the “Dollar X Cont Cell”), USD Fund Class X Run-Off Cell (the “Dollar X Run-Off Cell”), USD Fund Dist Cell (the “Dollar Dist Cont Cell”), USD Fund Dist Run-Off Cell (the “Dollar Dist Run-Off Cell”), USD Fund Acc Cell (the “Dollar Acc Cont Cell”), USD Fund Acc Run-Off Cell (the “Dollar Acc Run-Off Cell”), USD Fund Class I Run-Off Cell (the “Dollar I Run-Off Cell”), Euro Fund Class X Cell (the ”Euro X Cont Cell”), Euro Fund Class X Run-Off Cell (the ”Euro X Run-Off Cell”), Euro Fund Dist Cell (the ”Euro Dist Cont Cell”), Euro Fund Dist Run-Off Cell (the ”Euro Dist Run-Off Cell”), Euro Fund Acc Cell (the “Euro Acc Cont Cell”), Euro Fund Acc Run-Off Cell (the “Euro Acc Run-Off Cell”), Euro Fund Class Y Run-Off Cell (the ”Euro Y Run-Off Cell”) Swedish Krona Fund Class X Cell (the ”SEK X Cont Cell”) Swedish Krona Fund Class X Run-Off Cell (the ”SEK X Run-Off Cell”) Sterling Fund Class X Cell (the “Sterling X Cont Cell”), Sterling Fund Class X Run-Off Cell (the “Sterling X Run-Off Cell”), Sterling Fund Dist Cell (the “Sterling Dist Cont Cell”), Sterling Fund Dist Run-Off Cell (the “Sterling Dist Run-Off Cell”), Sterling Fund Acc Cell (the “Sterling Acc Cont Cell”), Sterling Fund Acc Run-Off Cell (the “Sterling Acc Run-Off Cell”), Meteor Senior Life Settlements Sterling Fund (the “Meteor Cont Cell”), Meteor Senior Life Settlements Sterling Fund Run-Off (the “Meteor Run-Off Cell”), Meteor Senior Life Settlements Sterling Fund II (the “Meteor II Cont Cell”), Meteor Senior Life Settlements Sterling Fund II Run-Off (the “Meteor II Run-Off Cell”), WAY Life Settlements Fund Cell (the “WAY Cont Cell”), and WAY Life Settlements Fund Run-Off Cell (the “WAY Run-Off Cell”).


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Directors’ Report (continued) Group structure The Group’s investments in life policies are held by EEA Life Settlements Inc, a corporation registered in Delaware, USA, which is a wholly owned subsidiary of EEA Life Settlements Master Fund II Limited (“Master Fund II”), a company registered in Guernsey. EEA Life Settlements Master Fund Limited (“Master Fund”) and Master Fund II are wholly owned subsidiaries of EEA Life Settlement Holdings Limited, a company registered in Guernsey. The Cells invest in EEA Life Settlement Holdings Limited. Results and dividends The results for the year are set out in the Consolidated Statement of Comprehensive Income on page 9. There were no distributions paid by the Company during the years ended 31 December 2014 and 2013. Directors The Directors of the Company who served during the year and to date are as stated on page 1. Directors’ interests The Directors, except Alison Simpson, have no disclosable interests in the shares of the Company. Alison Simpson holds an interest of 726 (2013: 726) shares in the Company’s Sterling Acc Cell at 31 December 2014. Alison Simpson is a Director of the Administrator, Secretary and Registrar of the Company, International Administration Group (Guernsey) Limited. Chris Daly is Managing Director of ViaSource Funding Group LLC, which is the Investment Adviser. Simon Shaw is the Chairman and principal shareholder of EEA Fund Management Limited and a director of EEA Fund Management (Guernsey) Limited. Restructuring and going concern The Board proposed a restructuring of the Fund which was approved by shareholders at the 17 October 2013 EGM and Class Meeting. Implementation of the restructuring gained the necessary regulatory approvals by the Guernsey Financial Services Commission and the dealing suspension, which had been in place since 30 November 2011, was lifted on 1 January 2014. The restructured Fund includes (i) a continuation fund with additional dealing restrictions, and (ii) a run-off vehicle with periodic distributions as policies mature and proceeds are received. The continuation fund continues to invest in the Fund’s current portfolio of assets and investments and also any future investments made by the Fund using the pro rata share of proceeds received on maturities/realisations attributable to continuing shares, such future investments to be made via the Fund investing in units issued by a newly established Irish unit trust fund. For option (ii) shares were re-designated on a one-for-one basis for participating redeemable preference shares in a newly created run-off cell. Cash distributions will be made from that run-off cell’s pro rata share of the proceeds received on maturities/realisations of investments. It is intended, that in the future there will be an opportunity where new investors are sourced who are willing to purchase shares from run-off investors at a discount to net asset value. New investors will then have an option to acquire shares in a cell of the continuation fund. The Fund has sufficient available cash to meet premium and other obligations for the foreseeable future. In addition, the lock–in and redemption gate provisions within the restructuring arrangements are sufficient to ensure the Fund’s continued ability to do so. The Fund therefore continues to adopt the going concern basis in preparing the consolidated financial statements.


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Directors’ Report (continued) Format of report and audited consolidated financial statements These consolidated financial statements show the results and state of affairs of the Group as a whole which includes the Cells, the Master Fund, Master Fund II, EEA Life Settlement Holdings Limited and EEA Life Settlements Inc as at 31 December 2014. The financial statements of the individual cells are available on request from International Administration Group (Guernsey) Limited. Directors’ responsibilities The Directors are responsible for preparing consolidated financial statements for each accounting period which show a true and fair view of the state of affairs of the Group and its results of operations for the year. In preparing these consolidated financial statements the Directors are required to:

select suitable accounting policies and then apply them consistently;

make judgements and estimates that are reasonable and prudent;

state whether applicable accounting standards have been followed subject to any material departures as disclosed in the consolidated financial statements; and

prepare the consolidated financial statements on the going concern basis unless it is

inappropriate to presume that the Group will continue in business. The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Group and to enable them to ensure that the consolidated financial statements comply with The Companies (Guernsey) Law, 2008, and The Authorised Collective Investment Schemes (Class B) Rules 2013. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud, error and non compliance with law or regulation. So far as each of the directors is aware, there is no relevant audit information of which the Group’s auditor is unaware, and each has taken all the steps he/she ought to have taken as a director to make himself/herself aware of any relevant audit information and to establish that the Group’s auditor is aware of that information. Auditors Grant Thornton Limited have indicated their willingness to continue in office. A resolution to re-appoint Grant Thornton Limited will be proposed at the forthcoming Annual General Meeting. David Jeffreys Director

18 June 2015


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Independent Auditor’s Report To the Members of EEA Life Settlements Fund PCC Limited We have audited the consolidated financial statements of EEA Life Settlements Fund PCC Limited (the “Group”) for the year ended 31 December 2014 which comprise the Consolidated Statement of Comprehensive Income, Consolidated Statement of Changes in Net Assets Attributable to Holders of Participating Shares, Consolidated Statement of Financial Position, Consolidated Statement of Cash Flows and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board. This report is made solely to the Group’s members, as a body, in accordance with Section 262 of The Companies (Guernsey) Law, 2008 and Paragraph 4.02(3) of The Authorised Collective Investment Schemes (Class B) Rules 2013. Our audit work has been undertaken so that we might state to the Group’s members those matters we are required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Group and the Group’s members as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of directors and auditors As explained more fully in the Directors’ Responsibilities Statement on page 5, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable legal and regulatory requirements and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors. Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Group’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the annual report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report. Opinion on financial statements In our opinion, the financial statements:

give a true and fair view of the state of the Group’s affairs as at 31 December 2014 and of its loss for the year then ended;

have been properly prepared in accordance with IFRSs as issued by the IASB; and have been prepared in accordance with the requirements of The Companies (Guernsey)

Law, 2008.


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Independent Auditor’s Report (continued) Emphasis of matter – Investment Valuation In forming our opinion, we have considered the adequacy of the disclosures made in Note 1 in the financial statements concerning the uncertainty relating to the carrying value of the investments in life insurance policies included in the Consolidated Statement of Financial Position. As explained in Note 1, the investments are carried at fair value, determined using methodologies which involve judgments and estimates by the directors. These investments are not quoted in an active market and the value at which they will be realised is uncertain. Any adjustment to the carrying value of investments in the Consolidated Statement of Financial Position would have a corresponding impact on the Consolidated Statement of Comprehensive Income. Our opinion is not qualified in this respect. Matters on which we are required to report by exception We have nothing to report in respect of the following: Under The Companies (Guernsey) Law, 2008 we are required to report to you, if in our opinion:

proper accounting records have not been kept by the Group; or the financial statements are not in agreement with the accounting records; or we have not obtained all the information and explanations, which to the best of our

knowledge and belief, are necessary for the purposes of our audit. Grant Thornton Limited Chartered Accountants St Peter Port, Guernsey, Channel Islands 19 June 2015


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Report of the Custodian To the Members of EEA Life Settlements Fund PCC Limited We state that in our opinion, EEA Fund Management (Guernsey) Limited (the “Manager”), has managed EEA Life Settlements Fund PCC Limited (the “Company”): a) in accordance with the limitations imposed on the investment and borrowing powers of the

Company by the principal documents, by the scheme particulars and by the Protection of Investors (Bailiwick of Guernsey) Law,1987; and

b) in accordance with the provisions of the principal documents and The Authorised Collective Investment Schemes (Class B) Rules 2013.

During 2013, we tendered our resignation as Custodian of the Company and this was communicated to shareholders in the Company's Restructuring Proposal. Pursuant to section 4.06 (1) of The Authorised Collective Investment Schemes (Class B) Rules 2013, we are obliged to continue in our role as Custodian of the Company until the Manager appoints a suitable replacement. BNP Paribas Securities Services SCA, Guernsey Branch 18 June 2015


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Consolidated Statement of Comprehensive Income for the year ended 31 December 2014

2014 2013

Note US$000 US$000

Income 3 201 156

Net (losses)/gains on investments 4 (140,584) 48,613 ________ ________

Total (loss)/income (140,383) 48,769

Expenses 5 (17,500) (16,461) ________ ________

Net (loss)/income before and after distributions 6 (157,883) 32,308

Taxation 7 1,401 (6,166) ________ ________

(Loss)/profit from operating activities and change in net assets attributable to holders of participating shares

(156,482)

26,142

Other comprehensive (loss)/income - movement in currency translation reserve

(2,985)

706 ________ ________

Total comprehensive (loss)/income

(159,467) 26,848 ════════ ════════

The above results relate to the continuing operations of the Group.

Consolidated Statement of Changes in Net Assets Attributable to Holders of Participating Shares for the year ended 31 December 2014

2014 2013 Note US$000 US$000

Net assets attributable to holders of participating shares at beginning of the year

790,468

763,620

________ ________

Amounts receivable on issues 12 188 - Amounts payable on redemptions 12 (13,790) - ________ ________

(13,602) - ________ ________

(Loss)/profit from operating activities and change in net assets attributable to holders of participating shares

(156,482)

26,142

Other comprehensive (loss)/income - movement in currency translation reserve

(2,985)

706

________ ________

Net assets attributable to holders of participating shares at end of the year

12 617,399

790,468

════════ ════════

The notes on pages 12 to 39 form an integral part of these financial statements.


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Consolidated Statement of Financial Position as at 31 December 2014

2014 2013 Note US$000 US$000 Assets

Non-current assets Investments at fair value through profit or loss 8 471,439 684,956

________ ________

Current assets Tax recoverable 7 4,908 3,507 Debtors 9 21,101 13,645 Cash and cash equivalents 15 122,090 91,672

________ ________

148,099 108,824 ________ ________

Total assets 619,538 793,780

Liabilities

Current liabilities

Creditors 10 (2,139) (3,312)

________ ________ Net assets attributable to holders of management and participating shares

617,399

790,468

════════ ════════

Attributable to holders of: Management shares 11 - - Participating shares 12 617,399 790,468

The financial statements on pages 9 to 39 were approved by the Board of Directors on 18 June 2015 and signed on its behalf by: David Jeffreys Director



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Consolidated Statement of Cash Flows for the year ended 31 December 2014

2014 2013 Note US$000 US$000

Operating activities

Bank interest received 198 155 Expenses paid (18,673) (17,126)

________ ________

Net cash outflow from operating activities 14 (18,475) (16,971) ________ ________

Investing activities Payment of premiums (70,015) (73,044) Proceeds from maturity/disposal of investments 135,495 122,091

________ ________

Net cash inflow from investing activities 65,480 49,047 ________ ________

Financing activities

Issue of participating shares 188 - Redemption of participating shares (13,790) -

________ ________

Net cash outflow from financing activities (13,602) - ________ ________

Tax paid - (6,745)

________ ________

Increase in cash and cash equivalents 33,403 25,331 ════════ ════════

Reconciliation of net cash flow to movements in cash and cash equivalents

Cash and cash equivalents at start of year 91,672 65,635

Increase in cash and cash equivalents 33,403 25,331 Currency translation differences (2,985) 706

________ ________

Cash and cash equivalents at end of year 15 122,090 91,672 ════════ ════════


EEA Life Settlements Fund PCC Limited Annual Report and Audited Consolidated Financial Statements for the year ended 31 December 2014 Notes to the consolidated financial statements for the year ended 31 December 2014

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1. Organisation and Principal Accounting Policies Introduction EEA Life Settlements Fund PCC Limited (“Company” or “Fund”) was incorporated on 20 June 2005 in Guernsey and authorised under The Authorised Collective Investment Schemes (Class B) Rules 2013. The Company issued its first shares on 10 November 2005 and commenced active operations on that day. The investment objective of the Company is described in note 16. The Company has no employees. The listing on the Channel Islands Stock Exchange of the Company and its Cells was suspended on 30 November 2011 and was cancelled on 30 June 2014. On 1 January 2014, a Run-Off Cell was created for each active cell and Euro Y and Dollar I Cells were closed. The Company is divided into twenty eight active cells: the Dollar X Cont Cell, the Dollar X Run-Off Cell, the Dollar Dist Cont Cell, the Dollar Dist Run-Off Cell, the Dollar I Run-Off Cell, the Dollar Acc Cont Cell, the Dollar Acc Run-Off Cell, the Euro X Cont Cell, the Euro X Run-Off Cell, the Euro Dist Cont Cell, the Euro Dist Run-Off Cell, the Euro Acc Cont Cell, the Euro Acc Run-Off Cell, the Euro Y Run-Off Cell, the SEK X Cont Cell, the SEK X Run-Off Cell, the Sterling X Cont Cell, the Sterling X Run-Off Cell, the Sterling Dist Cont Cell, the Sterling Dist Run-Off Cell, the Sterling Acc Cont Cell, the Sterling Acc Run-Off Cell, the Meteor Cont Cell, the Meteor Run-Off Cell, the Meteor II Cont Cell, the Meteor II Run-Off Cell, the WAY Cont Cell and the WAY Run-Off Cell (collectively the “Cells”). Group structure The Group’s investments in life policies are held by EEA Life Settlements Inc, a corporation registered in Delaware, USA, which is a wholly owned subsidiary of EEA Life Settlements Master Fund II Limited (“Master Fund II”), a company registered in Guernsey. EEA Life Settlements Master Fund Limited (“Master Fund”) and Master Fund II are wholly owned subsidiaries of EEA Life Settlement Holdings Limited, a company registered in Guernsey. The Cells invest in EEA Life Settlement Holdings Limited. Restructuring and going concern The restructuring of the Fund was approved by shareholders at the 17 October 2013 EGM and Class Meeting. Implementation of the restructuring gained the necessary regulatory approvals by the Guernsey Financial Services Commission and the dealing suspension was lifted on 1 January 2014. The restructured Fund includes (i) a continuation fund with additional dealing restrictions, and (ii) a run-off vehicle with periodic distributions as policies mature and proceeds are received. The continuation fund continues to invest in the Fund’s current portfolio of assets and investments and also any future investments made by the Fund using the pro rata share of proceeds received on maturities/realisations attributable to continuing shares, such future investments to be made via the Fund investing in units issued by a newly established Irish unit trust fund. For option (ii), shares were re-designated on a one-for-one basis for participating redeemable preference shares in a newly created run-off cell. Cash distributions will be made from that run-off cell’s pro rata share of the proceeds received on maturities/realisations of investments. It is intended, that in the future there will be an opportunity where new investors are sourced who are willing to purchase shares from run-off investors at a discount to net asset value. New investors will then have an option to acquire shares in a cell of the continuation fund.


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1. Organisation and Principal Accounting Policies (continued) The Group has sufficient available cash to meet premium and other obligations for the foreseeable future. In addition the lock–in and redemption gate provisions within the restructuring arrangements are sufficient to ensure the Group’s continued ability to do so. The Group therefore continues to adopt the going concern basis in preparing the consolidated and cellular financial statements. Basis of accounting The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and interpretations issued by the International Accounting Standards Board (IASB). IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and the reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about the carrying values of assets that are not apparent from other sources. Actual results may differ from these estimates. The consolidated financial statements are presented in United States Dollars and are rounded to the nearest US$000 unless otherwise indicated. Basis of preparation The consolidated financial statements have been prepared under the historical cost convention except for the measurement of investments which are designated as fair value through profit or loss. The consolidated financial statements are presented in US Dollars (presentational currency of the Group) and not Sterling, the local currency of Guernsey, since the majority of the Group’s assets are denominated in US Dollars. Standards, amendments and interpretations effective during the year The following standards, amendments and interpretations were applicable for the first time this year (all effective 1 January 2014) but had no impact on the financial position or performance for the Company:

Amendments to IFRS 10 ‘Consolidated Financial Statements’ and IFRS 12 ‘Disclosure of Interests in Other Entities’ on consolidation for investment entities

Amendments to IAS 39 ‘Financial Instruments: Recognition and Measurements’ on novation of derivatives and continuation of hedge accounting

Amendments to ‘IAS 32: Financial Instruments: Presentation’ relating to the offsetting of assets and liabilities

Standards, amendments and interpretations to existing standards that are not yet effective and have not been adopted early by the Group At the date of authorisation of these financial statements, certain new standards, and amendments to existing standards have been published by the IASB that are not yet effective, and have not been adopted early by the Group. Information on those expected to be relevant to the Group’s financial statements is provided below. The directors anticipate that all relevant pronouncements will be adopted in the Group’s accounting policies for the first period beginning after the effective date of the pronouncement. New standards, interpretations and amendments not either adopted or listed below are not expected to have a material impact on the Group’s financial statements. The IASB has issued the following standards with an effective date after the date of these financial statements:


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1. Organisation and Principal Accounting Policies (continued) IFRS 9 ‘Financial Instruments’ (2014) The IASB recently released IFRS 9 ‘Financial Instruments’ (2014), representing the completion of its project to replace IAS 39 ‘Financial Instruments: Recognition and Measurement’. The new standard introduces extensive changes to IAS 39’s guidance on the classification and measurement of financial assets and introduces a new ‘expected credit loss’ model for the impairment of financial assets. IFRS 9 also provides new guidance on the application of hedge accounting. The directors have yet to assess the impact of IFRS 9 on these consolidated financial statements. The new standard is required to be applied for annual reporting periods beginning on or after 1 January 2018. IFRS 15 ‘Revenue from Contracts with Customers’ IFRS 15 presents new requirements for the recognition of revenue, replacing IAS 18 ‘Revenue’, IAS 11 ‘Construction Contracts’, and several revenue-related Interpretations. The new standard establishes a control-based revenue recognition model and provides additional guidance in many areas not covered in detail under existing IFRSs, including how to account for arrangements with multiple performance obligations, variable pricing, customer refund rights, supplier repurchase options, and other common complexities. IFRS 15 is effective for reporting periods beginning on or after 1 January 2017. The directors have not yet assessed the impact of IFRS 15 on these consolidated financial statements. Basis of consolidation The consolidated financial statements include the financial statements of the parent company and its wholly owned subsidiaries, the Master Fund, Master Fund II, EEA Life Settlements Holdings Limited and EEA Life Settlements Inc. The parent company controls a subsidiary if it is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over its subsidiary. All subsidiaries have a reporting date of 31 December. The financial statements of the Group represent the aggregation of the results and financial position of each of the individual cells and subsidiaries adjusted for the elimination of intra-group transactions and balances. The aggregated financial position of the Company also includes the non-cellular assets and share capital of €100. Foreign currency translation Foreign currency assets and liabilities for each cell are translated into the functional currency, which may differ from cell to cell, being the currency in which the shares in each cell are issued, at the rate of exchange ruling at the reporting date. Transactions in foreign currencies are translated at the rate of exchange ruling at the date of the transaction. Gains and losses arising on revaluation of foreign currency assets and liabilities are recorded in the Consolidated Statement of Comprehensive Income. For the purpose of the Group financial statements, cellular assets and liabilities are translated into the presentation currency (US Dollars) at the rate of exchange ruling at the reporting date. Exchange differences arising on preparation of the Group’s financial statements from the financial statements of Cells maintained in currencies other than US Dollars are recognised in other comprehensive income and are taken to the currency translation reserve. These exchange differences do not affect the value of each Cell. Income recognition Bank interest is accounted for on an accruals basis.


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1. Organisation and Principal Accounting Policies (continued) Expenditure Expenses are accounted for on an accruals basis. Financial instruments a. Recognition and initial measurement Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial instrument and are measured initially at fair value adjusted for transaction costs, except for those carried at fair value through profit or loss which are measured initially at fair value. Subsequent measurement of financial assets and financial liabilities is described below. b. Classification and subsequent measurement of financial assets For the purpose of subsequent measurement financial assets, other than those designated and effective as hedging instruments, are classified into the following categories upon initial recognition:

loans and receivables financial assets at fair value through profit or loss (FVTPL)

(i) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial recognition, these are measured at amortised cost using the effective interest method, less provision for impairment. The Group’s cash and cash equivalents and debtor accounts fall into this category of financial instruments. Individually significant receivables are considered for impairment when they are past due or when other objective evidence is received that a specific counterparty will default. (ii) Financial assets at FVTPL Financial assets at FVTPL include financial assets that are either classified as held for trading or that meet certain conditions and are designated at FVTPL upon initial recognition. All derivative financial instruments fall into this category, except for those designated and effective as hedging instruments. Assets in this category are measured at fair value with gains or losses recognised in profit or loss. The fair values of financial assets in this category are determined by reference to active market transactions or using a valuation technique where no active market exists. Investments in life policies are classified into this category. c. Classification and subsequent measurement of financial liabilities Financial liabilities are measured subsequently at amortised cost using the effective interest method, except for financial liabilities held for trading or designated at FVTPL, that are carried subsequently at fair value with gains or losses recognised in profit or loss. All derivative financial instruments that are not designated and effective as hedging instruments are accounted for at FVTPL. The Group’s financial liabilities include trade and other payables and participating shares of the Continuing Cells.


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1. Organisation and Principal Accounting Policies (continued) d. Derecognition Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and all substantial risks and rewards are transferred (e.g. investment in life policies reach maturity). A financial liability is derecognised when it is extinguished, discharged, cancelled or expires. Investments in life policies Investments are classified as “fair value through profit or loss”. These financial assets are so designated on the basis that they are part of a group of financial assets which are managed and have their performance evaluated on a fair value basis. Investments are initially recognised at the fair value of the consideration given excluding transaction costs. The Directors consider that there is sufficient market data available as a result of a recovery in the life settlements market and a notable increase in transaction data to use market based discount rates in the valuation process with effect from 31 December 2014 rather than using the past mortality experience of the Fund’s policies. The Board has therefore appointed Maple Life Analytics LLC, as an independent valuation agent to the Fund. From 31 December 2014, the life insurance policies are valued on the basis of their estimated present value, taking into account anticipated future death benefits less anticipated future premiums. Each set of cash flows is discounted using the latest life expectancy estimates and a market discount rate, which in part reflects the annual return the market expects when buying policies and also the confidence the market has in the accuracy of the life expectancy estimates provided by the life expectancy provider. As a result, the market discount rate may vary depending on the life expectancy provider. The average discount rate used in respect of the 31 December 2014 valuation is approximately 18%. In the comparative accounting period, the methodology for valuation of the life insurance policies took into account the past mortality experience of the Fund’s policies but recognised that there are insufficient data to reach statistically reliable conclusions. The valuation therefore used the actuarial concept of “credibility” where a statistically reliable valuation would have “full credibility”, while a “zero credibility” valuation would be one which takes no account of the Fund’s mortality experience. These terms are used further below. Following a review of estimated life expectancies (“LEs”) carried out by a third party expert during 2013, the Directors decided with effect from 30 June 2013 to adopt the revised LEs for those policies subject to that review. Where policies had not been so reviewed, 33 months were added to the original LEs, being a typical adjustment recorded to those LEs which had been reviewed. For the purposes of calculating the valuation used in the financial statements as at 31 December 2012, the aforementioned adjustments were deemed to accrue on a straight line basis over the period from 31 December 2011 to 30 June 2013. In addition, where a policy had passed its LE, the Investment Adviser has re-assessed the policy and determined an updated LE. In order to arrive at the valuation used in the 31 December 2013 financial statements, two values were calculated and then adjusted as described further below: 1. Zero credibility valuation

A zero credibility valuation is a valuation based on discounted cash flows whereby the date of death was expected to be at LE.


Page 17

1. Organisation and Principal Accounting Policies (continued)

A discount rate was determined from the internal rate of return from policies purchased over recent years. These rates were high relative to the risk-free rate and relatively stable, implying that the market valued these contracts as “high risk” and not on a basis relative to interest rates for liquid securities. Based on consideration of these points, a rate of 19% pa was used to discount the cash flows. For policies which had passed their date of death implied by the LE estimate, the calculation used the updated LE determined by the Investment Adviser.

2. Full credibility valuation A full credibility valuation is a valuation based on an industry standard actuarial methodology. This methodology uses the revised LE together with published mortality tables to produce a probability distribution for the date of death. For the valuation at 31 December 2013, a discount rate of 8.00% was used. This was derived by taking the residual mortality risk as broadly equivalent to the credit risk on junk bonds. Reference was made to the Bank of America Merrill Lynch US High Yield Index which had a rate of 6.39%. An illiquidity premium of 1.5% was considered reasonable and added to arrive at 8.00%.

The Directors then attributed a relative credibility to each valuation determined by reference to industry guidance and practice on credibility as applied to the circumstances of the Fund. Based on actuarial industry guidance, the full credibility valuation had a credibility weighting of 61% as at 31 December 2013. The balance of 39% was used as the credibility weighting for the zero credibility valuation for the valuation at 31 December 2013. The resulting weighted values were then added together to arrive at the valuation at 31 December 2013 used in the financial statements. Realised gains and losses on the disposal or maturity of investments are calculated by reference to the net proceeds received on disposal or maturity and the actual cost, which comprises initial consideration and premiums, attributable to those investments. Profits and losses on investments are included in comprehensive income. Formation and reorganisation expenses Expenses incurred in the formation of the Company and the restructurings of the Group on 1 September 2006, 1 March 2010 and 1 January 2014 have been taken to the Consolidated Statement of Comprehensive Income as incurred. For the purposes of the calculation of the Dealing Price the formation and restructuring expenses are amortised over five years. Income Taxes Tax income/expense recognised in profit or loss comprises the sum of deferred tax and current tax not recognised in other comprehensive income or directly in net assets attributable to holders of management and participating shares. Current income tax assets and/or liabilities comprise those obligations to, or claims from, fiscal authorities relating to the current or prior reporting periods, that are unpaid at the reporting date. Current tax is payable on taxable profit, which differs from profit or loss in the financial statements. Calculation of current tax is based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period.


Page 18

1. Organisation and Principal Accounting Policies (continued) Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Deferred tax is charged or credited in the income statement. Participating shares A financial instrument that provides for redemption on a specific date or at the option of the holder meets the definition of a financial liability if the issuer has an obligation to transfer financial assets to the holder of the share. Accordingly the participating shares of the continuing cells have been classified as financial liabilities in accordance with IAS 32. The participating shares of the run-off cells may only be redeemed at the absolute discretion of the Directors and are accordingly classified as equity. Cash and cash equivalents Cash and cash equivalents are defined as cash in hand, demand deposits and highly liquid investments readily convertible within three months from the date of acquisition or less to known amounts of cash and subject to insignificant risk of changes in value. Distributions to shareholders Distributions to shareholders are recognised in the Consolidated Statement of Comprehensive Income as finance costs because the participating shares are classified as financial liabilities. Use of judgements and estimates In the process of applying the Group’s accounting policies, the Directors are required to make certain judgements and estimates to arrive at fair value for its assets and liabilities. Significant areas requiring the Directors’ judgement include taxation (see note 6) and the fair value of investments. In calculating the fair value of investments, key estimates include the life expectancy of insureds and the discount rate applied to future cash flows. In light of the judgements applied, disclosures are provided in note 16 which show the impact on the value of investments using different assumptions for life expectancy and discount rates. 2. Material Agreements a) Management fee

The Manager is entitled to receive a fee from the Cells at the rate of 1.5% per annum (Way Cell - 1.95%, Dollar I Cell - 1%) of the Net Asset Value of the Cells, calculated in line with the method set out in the prospectus. The fee is calculated at the end of each month and is payable quarterly in arrears. A new management agreement dated 31 December 2013 extended the existing arrangements to the new run-off cells with effect from 1 January 2014.

b) Performance fee

During the year the Manager and the Investment Adviser were entitled to receive a performance fee at the end of each performance period (a “Performance Period”) where the performance during the period exceeds the hurdle (the “Hurdle”). The excess of the Cell’s performance over the Hurdle is payable 37.5% to the Manager and 37.5% to the Investment Adviser (Dollar I Cell - 20% of net increase in the Dealing NAV adjusted for subscriptions and redemptions). A Performance Period was the six month period ending on 30 June or 31 December and the Hurdle is 8% per annum. The basis of the calculation is the Net Asset Value of the Cells in line with the method set out in the prospectus.


Page 19

2. Material Agreements (continued)

Following the restructuring the fee basis was modified such that it is calculated at a Cell level at the existing percentage rates, on the excess of the proceeds of maturities of policies (net of premiums paid), over and above a hurdle rate of 8% per annum from their value at 30 June 2012. The fee will not become payable until the final policy matures or is realised. Any fees accrued under prior existing arrangements were waived under the new management agreement. No performance fees were paid during the year.

c) Acquisition fee The Investment Adviser is entitled to receive an acquisition fee of 1% of the purchase price in the case of life policies purchased.

d) Custodian fee

The Custodian was entitled to receive a fee at the rate of £96,000 per annum until 31 March 2014 and at a rate of £392,000 per annum thereafter (2013: £7,000 per Cell) subject to a minimum of £70,000 per annum. In addition, the Custodian is entitled to be reimbursed for any out of pocket expenses together with any sub-custodian fees.

e) Administration fee The Administrator is entitled to receive fees at a rate of 0.15% per annum of the Net Asset Value of the Master Fund II up to US$50 million and 0.1% per annum of its Net Asset Value thereafter. The fee is subject to a minimum of £1,000 per month per funded Cell. The Administrator is also entitled to be reimbursed for all out-of-pocket expenses in connection with the carrying out of its duties. For acting as registrar, the Administrator receives fees from each Cell based on the number of investor transactions and the number of registered shareholders.

f) Sub-Custodian fee

The Sub-Custodian is entitled to charge EEA Life Settlements Inc a fixed annual fee of US$75,000 payable monthly in arrears and the reimbursement of all out-of-pocket expenses.

g) Servicing Agent fee The Servicing Agent is entitled to charge a one time review fee of US$570 (2013: US$450) per policy. In addition, there is an annual standing charge of US$5,000 (2013: US$300 per policy), payable quarterly in advance, subject to a minimum of US$2,000 (2013: US$1,500) per month. In addition, as a calculation agent, the Servicing Agent charges an annual fee of US$450 per policy.

h) Distribution fee/marketing expense The Manager is entitled to receive a distribution fee of up to 5% from the Dollar X, Euro X, Sterling X and SEK X Cells of the total amount subscribed by an investor and may rebate any part of the fee back to the investor for further subscriptions into the relevant Cell. Distribution fees are accounted for on an accruals basis net of rebates. No marketing expenses and rebates were recognised during 2014 and 2013.

i) Investment Advisory fee Commencing 2014, the investment adviser is entitled to receive 0.1% of the Net Asset Value of each Cell attributable to investments in life policies in addition to US$100 per month per policy held payable by EEA Life Settlements Inc monthly in arrears.


Page 20

3. Income

2014 2013 US$000 US$000 Bank interest income 201 156 ════════ ═══════

4. Net (losses)/gains on investments

2014 2013 US$000 US$000 Proceeds from maturity of investments 142,948 129,794 Cost of investments matured (109,402) (82,680) ________ ________

Realised gains on investments 33,546 47,114

Movement in unrealised gains and losses on revaluation of investments

(174,130) 1,499

________ ________

Net (losses)/gains on investments during the year (140,584) 48,613 ════════ ════════

5. Expenses

2014 2013 US$000 US$000 Performance fee (note 2b) - (116)Management fee (note 2a) 12,401 13,697 Administration fee (note 2e) 1,273 1,124 Investment advisory fee (note 2i) 1,393 675 General expenses * 787 546 Sub-custodian fee (note 2f) 75 (151)Audit fee 216 61 Servicing agent fee (note 2g) 56 68 Custodian fee (note 2d) 571 176 Legal fees 413 10 Directors’ fees ** (note 17) 315 371 ________ ________

17,500 16,461 ════════ ════════

* Includes US$29,511 (£17,500) in respect of fees paid to BWCI Limited for the mortality

investigation. ** Directors’ fees include US$ 208,000 (2013: US$325,000) in respect of consultancy fees. 6. Distributions No distributions were declared and paid during the years ended 31 December 2014 or 2013.


Page 21

7. Taxation The Company has obtained exemption from Guernsey Income Tax under The Income Tax (Exempt Bodies) (Guernsey) Ordinance, 1989 and accordingly is subject to an annual fee of £600. EEA Life Settlements Inc is subject to US taxation at 35% on the profits arising in that company.

2014 2013 US$000 US$000 Net (loss)/income before distributions and taxation (157,883) 32,308 ════════ ════════

Taxation at 35%/34% (55,259) 10,985 Adjustment for non taxable items 53,858 (4,819) ________ ________

Tax (credit)/charge (1,401) 6,166 ════════ ════════

Current tax (1,401) 6,166 Deferred tax - - ________ ________

(1,401) 6,166 ════════ ════════

Current tax comprises : Tax on current year income (1,321) 6,166 Adjustment in respect of prior year (80) - ________ ________

(1,401) 6,166 ════════ ════════

Deferred taxes arise from unrealised gains and losses on life policies and unrelieved allowable expenses. As at 31 December 2014, the Group calculated a deferred tax asset of US$115,556,000 (2013: US$63,245,000) which has not been recognised as it is not probable that future taxable profits will be available against which the deferred tax asset can be utilised to their full extent. 8. Investments

2014 2013 US$000 US$000

Fair value at beginning of year 684,956 693,093

Additions (premiums) 70,015 73,044 Proceeds from maturity of investments (142,948) (129,794)Realised gains 33,546 47,114 Movement in unrealised gain on revaluation of investments (174,130) 1,499 ________ ________

Fair value at end of year 471,439 684,956 ════════ ════════


Page 22

8. Investments (continued) Fair value measurements for the Group are based on Level 3 inputs of the three-level hierarchy system which indicates significant inputs for the asset or liability that are not based on observable market data (unobservable inputs). The valuation basis for the investments in life insurance policies is explained in notes 1 and 16. There were no transfers into or out of level 3 classification during the year or prior year. The valuation is carried out by Maple Life Analytics LLC (previously ViaSource Funding Group LLC) with detailed consultation with and review by the Directors as described on page 16. 9. Debtors

2014 2013 US$000 US$000 Investment maturity proceeds receivable 21,088 13,635 Bank interest receivable 13 10 ________ ________

21,101 13,645 ════════ ════════

10. Creditors

2014 2013 US$000 US$000 Management fee 835 2,118 Sub custodian fee 13 12 Audit fee 123 130 Administration fee 180 75 Other expenses 156 79 Restructuring expenses 381 793 Investment advisory fee 196 - Custodian fee 203 14 Service agent fee 11 17 Directors’ fee 41 74 ________ ________

2,139 3,312 ════════ ════════


Page 23

11. Management shares, Participating Shares and Share Premium The authorised shares of the Company are as follows: 2014 & 2013 US$ Authorised 100 Management Shares of €1.00 each 122 Unlimited number of Participating Shares of no par value - _____

122 ════

When the Company was established, the Management Shares were created in order to comply with the then applicable Guernsey Law under which the Participating Shares in issue must be issued with preference over an alternative class of capital. The Management Shares in issue must be issued to the Manager and its representatives. The Management Shares are not redeemable and do not carry any right to vote (except in relation to a resolution to voluntarily wind up the Company or unless there are no Participating Shares in issue in which case each Management Share carries one vote) or to dividends. Assets not attributable to any particular Cell will constitute the non-cellular assets of the Company for the purposes of the Law. In a winding-up the surplus of any such assets shall be distributed among the holders of Management Shares pro rata to their respective holdings up to the nominal value paid up in the Management Shares. Participating Shares may normally be issued and redeemed at prices based on the value of the Company’s net assets in accordance with the Articles of Association and the Scheme Particulars. Participating Shares carry the right to vote at general meetings of the Company and to receive dividends. Holders of Participating Shares are entitled to their pro rata share of the Company’s surplus assets after the return of paid up capital on the Management Shares. However, following a meeting on 30 November 2011 and in accordance with Article 34 of the Articles of Association, the Board declared an immediate suspension of the valuation of the net asset value of all classes of participating shares in each cell of the Fund and of the issue, sale, purchase, redemption or conversion of shares of each class. This followed the issue of the UK Financial Services Authority (FSA) draft guidance on Traded Life Policy Investments on 28 November 2011 which led to cancelled subscriptions and above normal redemption levels. The liquidity levels of the Fund were insufficient to satisfy the redemption requests in full. The dealing suspension was lifted on 1 January 2014 and restructuring of the Fund was implemented whereby Continuing and Run-Off cells were created. For the avoidance of doubt, the whole of the share capital and share premium account is distributable subject to meeting the solvency test criteria and any restrictions in the Articles of Association of the Company. The Continuing Cells are closed to subscriptions. Participating Shares are subject to a lock-up period (23 months from 1 January 2014) unless the Directors in their absolute discretion determine otherwise either generally or in any particular case. The Run-Off Cells are closed to subscriptions. Participating Shares in the Run-Off Cells may not be redeemed at the option of the shareholder.


Page 24

11. Management shares, Participating Shares and Share Premium (continued) Issued share capital

Management shares Number of shares

Balance at 31 December 2013 & 2014 100 ═══════ There were no issues or redemptions during the year ended 31 December 2013. The issues and redemptions for the year ended 31 December 2014 are set out below: Issued share capital

Participating Shares Number of shares

Dollar X Cont Cell

Dollar X Run-Off Cell

Dollar Dist Cont Cell

Dollar Dist Run-Off Cell

Balance at 31 December 2013 516,452 - 70,565 - Transfer to Run-Off Cell (270,437) 270,437 (39,998) 39,998 Issued during the year 8 - 43 - Redeemed during the year - (7,842) - (1,158) _______ _______ _______ _______

Balance at 31 December 2014 246,023 262,595 30,610 38,840 ═══════ ═══════ ═══════ ═══════

Dollar I

Cont Cell Dollar I

Run-Off Cell Dollar Acc Cont Cell

Dollar Acc Run-Off Cell

Balance at 31 December 2013 135,547 - 47,772 - Transfer to Run-Off Cell (135,547) 135,547 (18,294) 18,294 Issued during the year - - 67 - Redeemed during the year - (3,922) - (530) _______ _______ _______ _______

Balance at 31 December 2014 - 131,625 29,545 17,764 ═══════ ═══════ ═══════ ═══════

Euro X

Cont Cell Euro X

Run-Off Cell Euro Dist Cont Cell

Euro Dist Run-Off Cell

Balance at 31 December 2013 304,424 - 35,268 - Transfer to Run-Off Cell (119,315) 119,315 (22,973) 22,973 Issued during the year 6 - - - Redeemed during the year - (3,460) - (663) _______ _______ _______ _______

Balance at 31 December 2014 185,115 115,855 12,295 22,310 ═══════ ═══════ ═══════ ═══════

Euro Acc

Cont Cell Euro Acc

Run-Off Cell Euro Y

Cont Cell Euro Y

Run-Off Cell

Balance at 31 December 2013 18,962 - 14,463 - Transfer to Run-Off Cell (3,779) 3,779 (14,463) 14,463 Redeemed during the year - (109) - (418) _______ _______ _______ _______

Balance at 31 December 2014 15,183 3,670 - 14,045 ═══════ ═══════ ═══════ ═══════


Page 25

11. Management shares, Participating Shares and Share Premium (continued) SEK X

Cont Cell SEK X

Run-Off Cell Sterling X Cont Cell

Sterling X Run-Off Cell

Balance at 31 December 2013 460,763 - 997,420 - Transfer to Run-Off Cell (253,762) 253,762 (489,759) 489,759 Issued during the year - - 195 - Redeemed during the year - (7,396) - (14,222) _______ _______ _______ _______

Balance at 31 December 2014 207,001 246,366 507,856 475,537 ═══════ ═══════ ═══════ ═══════ Sterling Dist

Cont Cell Sterling DistRun-Off Cell

Sterling Acc Cont Cell

Sterling Acc Run-Off Cell

Balance at 31 December 2013 341,725 - 1,544,605 - Transfer to Run-Off Cell (214,664) 214,664 (998,380) 998,380 Issued during the year 98 - 604 - Redeemed during the year - (6,222) - (28,937) _______ _______ _______ _______

Balance at 31 December 2014 127,159 208,442 546,829 969,443 ═══════ ═══════ ═══════ ═══════ Meteor

Cont Cell Meteor

Run-Off Cell Meteor II Cont Cell

Meteor II Run-Off Cell

Balance at 31 December 2013 235,126 - 155,166 - Transfer to Run-Off Cell (155,593) 155,593 (83,089) 83,089 Redeemed during the year - (4,512) - (2,412) _______ _______ _______ _______

Balance at 31 December 2014 79,533 151,081 72,077 80,677 ═══════ ═══════ ═══════ ═══════ WAY

Cont Cell WAY

Run-Off Cell

Balance at 31 December 2013 42,325 - Transfer to Run-Off Cell (37,106) 37,106 Redeemed during the year - (1,076) _______ _______

Balance at 31 December 2014 5,219 36,030 ═══════ ═══════


Page 26

12. Net assets attributable to holders of participating shares

Share

premium and capital

Net losses from

operating activities

Currency translation

reserve US$000 US$000 US$000 Balance at 31 December 2013 803,688 (11,706) (1,514)Issues of participating shares 188 - - Redemptions of participating shares (13,790) - - Net losses from operating activities - (156,482) - Transfer to/from reserve 807 (807) - Movement in currency translation reserve - - (2,985) _______ _______ _______

Net assets attributable to holders of participating shares 790,893

(168,995) (4,499)

═══════ ═══════ ═══════

2014 2013 US$000 US$000 Share premium and capital 790,893 803,688 Net losses from operating activities (168,995) (11,706)Currency translation reserve (4,499) (1,514) _______ _______

Net assets attributable to holders of participating shares 617,399 790,468 ═══════ ═══════

13. (Loss)/earnings per share Basic and diluted earnings per share have been calculated by dividing the net profit/(loss) for the year attributable to participating shareholders by the weighted average number of participating shares in issue during the year. In accordance with the Company’s accounting policies, distributions paid to shareholders are treated as an expense of the relevant Cell for the purposes of calculating the net profit/(loss) attributable to shareholders.

Dollar X Cont Cell Dollar X Run-Off Cell

2014 2013 2014 US$000 US$000 US$000

Net (loss)/profit attributable to shareholders (4,629) 2,403

(9,607)

Weighted average number of shares in issue 246,020 516,452

267,773

Basic and diluted (loss)/earnings per participating share US$(18.82) US$4.65

US$(35.88)


Page 27

13. (Loss)/earnings per share (continued)

Dollar Dist Cont Cell Dollar Dist Run-Off Cell

2014 2013 2014 US$000 US$000 US$000

Net (loss)/profit attributable to shareholders (333) 205

(905)


39,605


US$(22.85)

Dollar I Cell Dollar I Run-Off Cell

2014 2013 2014 US$000 US$000 US$000

Net profit/(loss) attributable to shareholders 854 682

(3,729)


134,214

Basic and diluted earnings/(loss) per participating share US$6.30 US$5.03

US$(27.78)

Dollar Acc Cont Cell Dollar Acc Run-Off Cell

2014 2013 2014 US$000 US$000 US$000


(474)


18,114


US$(26.17)

Euro X Cont Cell Euro X Run-Off Cell

2014 2013 2014 €000 €000 €000

Net loss attributable to shareholders (1,304) (427)

(2,205)


118,140

Basic and diluted loss per participating share €(7.04) €(1.40)

€(18.66)


Page 28


Euro Dist Cont Cell Euro Dist Run-Off Cell

2014 2013 2014 €000 €000 €000

Net profit/(loss) attributable to shareholders 12 (33)

(290)


22,748

Basic and diluted earnings/(loss) per participating share €0.98 €(0.94)

€(12.75)

Euro Acc Cont Cell Euro Acc Run-Off Cell

2014 2013 2014 €000 €000 €000

Net loss attributable to shareholders (105) (20)

(51)


3,742

Basic and diluted loss per participating share €(6.92) €(1.05)

€(13.63)

Euro Y Cell Euro Y Run-Off Cell

2014 2013 2014 €000 €000 €000

Net profit/(loss) attributable to shareholders 66 (13)

(175)


14,321

Basic and diluted earnings/(loss) per participating share €4.56 €(0.90)

€(12.22)

SEK X Cont Cell SEK X Run-Off Cell

2014 2013 2014 SEK000 SEK000 SEK000


(1,749)


251,249

Basic and diluted earnings/(loss) per participating share SEK2.27 SEK1.12

SEK(6.96)


Page 29


Sterling X Cont Cell Sterling X Run-Off Cell

2014 2013 2014 £000 £000 £000


(11,429)


484,928

Basic and diluted (loss)/earnings per participating share £(10.81) £1.61

£(23.57)

Sterling Dist Cont Cell Sterling Dist Run-Off Cell

2014 2013 2014 £000 £000 £000


(3,752)


212,550


£(17.65)

Sterling Acc Cont Cell Sterling Acc Run-Off Cell

2014 2013 2014 £000 £000 £000


(26,158)

Weighted average number of shares in issue 546,642 1,544,605

988,549


£(26.46)

Meteor Cont Cell Meteor Run-Off Cell

2014 2013 2014 £000 £000 £000


(3,675)


154,060


£(23.85)


Page 30


Meteor II Cont Cell Meteor II Run-Off Cell

2014 2013 2014 £000 £000 £000


(1,790)


82,269


£(21.76)

WAY Cont Cell WAY Cont Cell

2014 2013 2014 £000 £000 £000


(804)


36,740

Basic and diluted earnings/(loss) per participating share £25.29 £0.80

£(21.88)

14. Net cash outflow from operating activities

2014 2013 US$000 US$000 Reconciliation of net loss before investment result to net cash outflow from operating activities

Income 201 156Expenses (17,500) (16,461) ________ ________

Net loss before investment result (17,299) (16,305)

Adjustments for non cash items: Increase in debtors (3) (1)Decrease in creditors (1,173) (665) ________ ________

Net cash outflow from operating activities (18,475) (16,971) ════════ ════════

15. Cash and cash equivalents

2014 2013 US$000 US$000 Cash and cash equivalents at end of year comprise: Cash 122,090 91,672 ════════ ════════


Page 31

16. Risk Profile The Group’s investment objective is to acquire and trade the property interest in outstanding life insurance policies issued primarily in the United States. The Group seeks to achieve medium to long term capital growth. The Group’s material financial instruments comprise:

life insurance policies held in accordance with the Group’s investment objectives as set out above, and

cash that arise directly from the Group’s operations. The investment policy is to invest in a diversified portfolio of insurance policies. When choosing and pricing policies the Manager takes into account the life expectancy, the health and the age of the insured, the amount of the premiums needed to keep the policy in force, the rating of the issuing insurance Group and the amount of the death benefit. The Manager aims to achieve a net annual return of 8% or above through a diversified portfolio of investments, accurate life expectancy estimation and careful pricing. The Manager has appointed the Investment Adviser to source and procure the life policies and provide tracking services. Tracking involves appointing medical professionals to contact the care providers of the insureds every three months to determine their current health status and reporting to the Manager on a quarterly basis. The main investment restrictions are:

not to purchase a policy which is issued by an insurance company rated less than ‘B’ by one of the major rating agencies

not to purchase a policy which has not yet passed the suicide and contestability period not to purchase policies held by insureds diagnosed with the same illness the aggregate

face value of which is more than 20 per cent of the total face value of policies held not to purchase policies from a single insurance company to an aggregate face value of

more than 20 per cent of the total face value of all policies held not to purchase policies from an insured whose life expectancy is more than 96 months

from the date of purchase not to purchase a policy the face value of which represents more than 3.5% of the total

face value of all policies held not to purchase policies from a non United States resident not to purchase a term life policy, the remaining term at the time of the purchase of which

is less than 10 years if the life expectancy of the insured is 4 years, or 9 years if the life expectancy of the insured is 3 years or less

invest in foreign exchange forward contracts, futures contracts and options for the purpose of hedging of the investments only

not to invest more than 10% of its net asset value in other collective investment schemes not to borrow more than 10% of its net assets for any purpose.

Financial risk management and policies The main risks arising from the Group’s investment in a diversified portfolio of life insurance policies are longevity risk (i.e. the risk that insured lives live longer than expected), market risk, credit risk and liquidity risk. The Board regularly reviews and agrees policies for managing these risks and these are summarised below.


Page 32

16. Risk Profile (continued) Longevity risk Longevity risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because estimates of the remaining life of the insured lives are incorrect. This risk can be separated into systematic lives risk and specific lives risk as follows: 1. Systematic lives risk – the population as a whole starts to live longer (or the population of

lives whose life insurance policies have been traded in the market start to live longer). 2. Specific lives risk – the specific lives purchased by the Group live longer than expected.

This may be due to particularly poor experience for the types of lives purchased by the Group or that certain types of lives respond particularly well to treatment.

Assumptions are made about the remaining life expectancy of each life based on the methodology described in note 1. There is a risk that the actual experience may unfold in a different way from the assumptions or that new evidence emerges requiring a significant change to the assumptions. As described in note 1, a third party review of life expectancies was undertaken during 2013 and there is a rolling programme of life expectancy reviews conducted by third party providers. The results of these reviews are communicated to the Board by the Investment Adviser and where appropriate reflected in the valuations. If the assumptions were changed the valuation of these investments could significantly differ from that shown in the financial statements. EEA Life Settlements Inc currently holds 413 life settlement assets valued at US$471 million at 31 December 2014 (2013: 517 policies valued at US$685 million). Within the financial statements, the longevity risk is captured within a relatively high discount rate compared to vanilla financial instruments. The table below illustrates how the valuation changes should these assumptions be altered. The following are shown: a) The valuation included in the financial statements calculated on the assumptions for risk

discount rate and average LEs. b) How the valuation varies should the risk discount rates be increased or reduced by 100

bps with the average LEs unchanged. c) How this value varies should the average LEs increase by 1 year or 2 years with the risk

discount rate unchanged. d) How the valuation varies should the percentage credibility applied to the discounted cash

flow basis (DCF) as compared with the adjusted LE actuarial basis increase or decrease by 5%.

2014

US$0002013

US$000 a) Valuation included in financial statements* 471,439 684,956 b) Valuation if adjust discount rate + 100 bps 459,878 666,324 Valuation if adjust discount rate - 100 bps 483,629 704,644 c) Valuation + 1 year to valuation (a) LE 354,693 533,842 Valuation + 2 years to valuation (a) LE 255,511 401,833 d) Valuation +5% credibility to DCF basis - 674,625 Valuation -5% credibility to DCF basis - 695,287 *Calculated using discount rates on average of 18% (2013: 8% to 19%).


Page 33

16. Risk Profile (continued) Systematic lives risk There are two parts to this risk: (i) Underwriters’ estimations of life expectancy are incorrect (ii) Systematic improvements in mortality due to medical advancements. All life settlements are underwritten individually, and different life expectancies and uplift factors (the relative increase in mortality required for the life) are determined for each life. The underwriter produces an underwriting report including the life expectancy (LE). The LE can broadly be considered to be the age on which around 50% of lives are expected to die, or the average date that a life might die. If the life lives longer than the underwriter expected, the valuation will decrease. This is because profits arising from death benefit are being realised later and total future premiums are underestimated. The reverse is true if the life dies before the underwriter expected. As seen from the table above, the valuation is highly sensitive to mortality changes. The second risk is that medical advancements will improve mortality significantly, resulting in profit being delayed and reduced. Specific lives risk There is a risk that the underlying lives with acute diseases respond well to treatment which gives rise to the impairment going into remission. If this happens on a large number of lives, the overall LE of the portfolio could be extended and the value of the policies will reduce. Similarly, there is a risk that the policies purchased by the Group happen to experience particularly poor experience for other reasons (e.g. poor underwriting). Risk discount rate The “risk premium” is added to the risk free rate in order to calculate the risk discount rate used to discount future cash flows. It allows for the risks inherent in the cash flows. From the table it can be seen that the valuation is sensitive to changes in the risk discount rate. In respect of the 2013 valuations, a discount rate based on the internal rate of return for purchased policies in recent years was used for the discounted cash flow valuation. A lower discount rate was used for the actuarial adjusted LE valuation reflecting the lower residual mortality risk following the LE adjustments. Market risk Market risk comprises foreign currency risk and interest rate risk. Market price risk arises mainly from uncertainty about future prices of financial instruments held. It is the intention of the Group to hold its investments until maturity. In the event that the Group wishes to sell an investment, there is a limited secondary market for such investments. Although the carrying value of investments as at period end is the best estimate of their fair value, it is possible, particularly as a consequence of the impact of past regulatory intervention, that the Group may, on sale, not be able to achieve the fair value used for the purpose of valuing investments in these financial statements particularly in view of the number of policies to be sold as compared with current market volumes.


Page 34

16. Risk Profile (continued) Foreign currency risk Each of the Cells invests entirely in the shares of the EEA Life Settlements Holdings Limited with the effect that each cell is exposed to the currency risks of the underlying investments which are denominated in US Dollars. The non-US Cells did not enter into any hedging arrangements in 2014 or 2013 and therefore are exposed to currency risks arising from fluctuations in the US Dollar. At 31 December 2014, the Group’s net currency exposure in investments and net current assets can be analysed as follows:

Investments Net current

assets

Total US$000 US$000 US$000 US Dollar 471,439 117,291 588,730 Sterling - 25,381 25,381 Euro - 2,380 2,380 SEK - 908 908 _________ _________ _________

471,439 145,960 617,399 ═════════ ═════════ ═════════ At 31 December 2013, the Group’s net currency exposure in investments and net current assets can be analysed as follows:

Investments Net current

assets

Total US$000 US$000 US$000 US Dollar 684,956 69,744 754,700 Sterling - 31,732 31,732 Euro - 2,856 2,856 SEK - 1,180 1,180 _________ _________ _________

684,956 105,512 790,468 ═════════ ═════════ ═════════ Interest rate risk Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s exposure to market risk for changes in interest rates relates primarily to the Group’s cash. All cash bears interest at floating rates. The following table sets out the Group’s exposure to interest rate risk at 31 December: 2014 2013 US$000 US$000

Non-interest bearing 495,309 698,796Interest bearing – floating rate 122,090 91,672 _________ _________

Total Net Assets 617,399 790,468 ═════════ ═════════

The interest bearing floating rate assets are denominated in US Dollars. If the US Dollar interest rates increased/decreased by 50 basis points the net income and net assets would increase/decrease by US$610,000 (2013: US$458,000).


Page 35

16. Risk Profile (continued) Credit risk Credit risk is the risk that an issuer or counterparty will be unable or unwilling to meet a commitment that it has entered into with the Group. To mitigate this risk the Group aims to build a diversified portfolio of policies and adopts restrictions on the security rating of the insurance companies issuing the policies and the exposure of the Group to any one insurance company. At 31 December 2014, 95% (2013: 95%) of policies were with insurance companies with a rating of ‘A’ or above, with 1% (2013: 1%) being rated ‘A-‘ and 4% (2013: 4%) ‘B’, ‘B+’ or ‘B++’. Substantially all cash balances are held with RBS Citizens N.A., the sub-custodian, which has a good credit rating (A-1) and with BNP Paribas Securities Services (A) and, in the opinion of the directors, does not represent a significant credit risk. The carrying amounts of financial assets best represent the maximum credit risk exposure at the end of the reporting period. Liquidity risk Liquidity risk is the risk that the Group will encounter in realising assets or otherwise raising funds to meet its financial commitments. The Investment Adviser seeks to select life insurance policies which are expected to mature within a reasonable timeframe. There is minimal or no return on such policies until maturity. There is a secondary market for the life insurance policies but it is not highly regulated or developed and there is no certainty the market will be active. Therefore, there can be no assurance that the liquidity of the investments will always be sufficient to meet redemption requests as and when made. The Fund was suspended on 30 November 2011 due to the level of redemptions exceeding liquidity levels and remained suspended until 31 December 2013. The suspension was lifted on 1 January 2014. Under the restructuring arrangements Participating Shares in the Continuing Cells are subject to a 23 month lock-up period (from 1 January 2014), unless the directors in their absolute discretion determine otherwise either generally or in any particular case. During the lock-up period, provided a Cell holds available cash in excess of 10% of the Cell’s then Net Asset value holders may be permitted to redeem up to 5% of their then aggregate holding at the end of each calendar year. After the expiry of the lock-up period, shares will be redeemable at the option of the Shareholder on a quarterly basis. In the event that redemption requests for shares in a Cell exceed the available cash held by a Cell or 10% of the Net Asset Value of the Cell, the Directors shall be entitled at their absolute discretion to refuse to redeem such shares. The Run-Off Cells are closed to subscriptions and Participating Shares in a Run-Off Cell may not be redeemed at the option of the Shareholder. The Fund also needs to maintain sufficient resources to fund the ongoing premiums of the policies in order to keep the policies in force. Following the re-structuring a buffer of 24 months’ premium is targeted to ensure that the Fund has sufficient resources to meet the premium obligations. The expected premiums for 2015 are approximately US$59 million as compared with expected receipts from maturities of approximately US$152 million. Maturities in subsequent years are expected to more than cover the contemporaneous premium cost.


Page 36

16. Risk Profile (continued) The estimated maturity profile of the fair value of the insurance policies held is set out below: 2014 2013 US$000 US$000 0 to 3 months 3,426 5,1973 to 12 months 79,833 124,4091 to 2 years 112,748 233,3022 to 5 years 212,396 290,690More than 5 years 63,036 31,358 _________ _________

471,439 684,956 ═════════ ═════════

All liabilities other than Participating Shares are due on demand. Management of capital The Manager manages the capital of the Fund in accordance with the Fund’s investment objectives and policies. The capital of the Fund consists of proceeds from the issue of Participating Shares and the reserve accounts and is disclosed in note 12. Following a meeting on 30 November 2011 the Board declared an immediate suspension of the valuation of the net asset value of all classes of participating shares in each cell of the Fund and of the issue, sale, purchase, redemption or conversion of shares of each class. The Fund continued to be suspended until the restructuring was completed, effective 1 January 2014. There are lock-in and redemption gate provisions in place under the restructuring arrangements to ensure that the Company can retain sufficient available cash to meet premium and other obligations for the foreseeable future. The Fund does not have any externally imposed capital requirements. Fair value measurement The financial assets measured at fair value are disclosed using a fair value hierarchy that is based on the observability of significant inputs used in making the fair value measurements, as follows:- Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 – Those involving inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices). Level 3 – Those inputs for the asset or liability that are not based on observable market data (unobservable inputs). All the Fund’s investments are carried at fair value at the end of the reporting period. The fair value of the financial instruments can be readily determined within a reasonable range of estimates. For certain financial instruments including debtors and creditors the carrying value approximates to fair value due to the immediate or short term nature of those financial instruments. The fair value used in these financial statements for the value of life policies may not be the value which would be achieved on sale of those policies. The fair value of life insurance policies held is estimated using a valuation technique sensitive to valuation assumptions that are not supported by observable market prices such as the life expectancy of the assured. The valuation is carried out by Maple Life Analytics LLC (previously by ViaSource Funding Group LLC) with detailed consultation with and review by the Directors.


Page 37

16. Risk Profile (continued) The Group uses different valuation policies for the calculation of Dealing Prices in accordance with the terms of the Scheme Particulars. The Directors are of the opinion that the valuation method set out in the Scheme Particulars is more appropriate for the purposes of share dealing in view of the characteristics of the portfolio and income and expenses and that the underlying assumptions were reasonable and appropriate based on the information available to the Directors at the time of the valuation. The following are the other different policies used in the calculation of the Dealing Prices: a) Marketing expenses which are charged on each subscription of the fund are amortised

over five years from the date of subscription. b) Distributions (if any) are accrued. During the period of the suspension it was not possible to redeem or subscribe for shares at the dealing price and accordingly the valuation of each cell’s investment in EEA Life Settlement Holdings Limited was based on its proportionate share of the International Financial Reporting Standards (“IFRS”) value of EEA Life Settlement Holdings Limited rather than, prior to the suspension, the dealing price. Following the change in valuation methodology from 31 December 2014 as described on page 16, the IFRS value equates to the dealing price. However, these financial statements adjust for certain policies which matured in 2014 but the Company was not notified until after the date the year end dealing price was issued. At 31 December 2013, the value of the underlying policies for dealing purposes and the value for the purposes of the financial statements were different resulting in a difference in the unit value. It became appropriate to reflect the Fund’s accumulating mortality experience in the IFRS valuation. This resulted in an adjustment to the NAV of US$48 million. Valuation of policies 2014 2013 US$000 US$000 NAV 473,835 733,165Discount rate and methodology difference - (48,209)Maturities notified after NAV valuation date * (2,396) - _________ _________

Valuation of policies per financial statements 471,439 684,956 ═════════ ═════════

* These policies matured for US$9,106,000. As at 31 December 2013, the policies were valued for NAV purposes per the scheme particulars at the cost of purchasing the policies plus the attributable proportion of estimated future profits. Estimated profit for a life policy was calculated by subtracting the acquisition and estimated servicing and other costs of each policy, including estimated tax charge, from the policy’s net death benefit, and was amortised over the estimated remaining life of the policy on a straight line basis. Acquisition and servicing and other costs included those charged by the Investment Adviser and Sub-Custodian, estimated future premiums payable on each life policy and any estimated costs, including taxation, associated with its maturity.


Page 38

16. Risk Profile (continued) For the period prior to June 2013, the estimated remaining life of the life policy was calculated by taking an average of the projected future life expectancy of each insured as certified by two independent medical professionals and adding thereto an additional period as considered appropriate by the Directors in consultation with the Investment Adviser, being 12 months. With effect from June 2013, the estimated remaining life of the life policy was calculated by reference to a review of LEs conducted by a third party expert and adding thereto an additional period equivalent to the life of the relevant policy (i.e. estimated life expectancy for valuation purposes is double the expert’s estimate of life expectancy). Where a policy was not specifically reviewed, 33 months were added to the original LEs, being a typical adjustment to those LEs which had been reviewed. For financial statement purposes, the policies were valued as described in note 1. 17. Related party transactions Transactions with related parties are based on terms equivalent to those that prevail in an arm’s length transaction. Management and performance fees payable to the Manager and amounts outstanding at the end of the year are disclosed in notes 5 and 10. Management shares held by the Manager are disclosed in note 11. Investment advisory fees payable to the Investment Adviser and amounts outstanding at the end of the year are disclosed in notes 5 and 10. Administration fees payable to International Administration Group (Guernsey) Limited and amounts outstanding at the end of the year are disclosed in notes 5 and 10. Directors’ fees incurred for the year are disclosed in note 5 and amounts outstanding at the end of the year are disclosed in note 10. The Directors, except Alison Simpson, have no disclosable interests in the shares of the Company. Alison Simpson holds an interest of 726 (2013: 726) shares in the Company’s Sterling Acc Cell at 31 December 2014. Alison Simpson is a Director of the Administrator, Secretary and Registrar of the Company, International Administration Group (Guernsey) Limited. Chris Daly is Managing Director of ViaSource Funding Group LLC, which is the Investment Adviser. Simon Shaw is the Chairman and principal shareholder of EEA Fund Management Limited and a director of EEA Fund Management (Guernsey) Limited. He is also the principal shareholder of EEA Holdings Limited, the parent company of EEA Fund Management Limited and EEA Fund Management (Guernsey) Limited. There is no ultimate or immediate controlling or holding party.


Page 39

18. Commitments In order to maintain the cover the Company is committed to pay premiums on the life insurance policies acquired which are expected to amount to US$282 million (2013: US$240 million) based on estimated life expectancies of the insured calculated consistent with the valuation methodology. 19. Post Balance Sheet Events In an amendment to the management agreement dated 29 April 2015, it was agreed that with effect from 1 May 2015 the Manager shall no longer be entitled to a performance fee. In an amendment to the administration agreement dated 29 April 2015, it was agreed that with effect from 1 May 2015 the administration fee payable to the Administrator in respect of each Cell shall be paid by the Manager. The transaction fees and reimbursement of out-of-pocket expenses payable to the Administrator shall remain payable by the relevant Cell.


Page 40

Schedule of Investments as at 31 December 2014

File number Insurance company Net death

benefitFair

value % of net

assets

US$000 US$000 %

17801C TransAmerica 21 2 0.00

442 Conseco Life 40 12 0.00

17226A American United Life 61 28 0.00

19454 Northwestern Mutual Life 63 1 0.00

15432C TransAmerica Occ. 67 29 0.00

17801A US Financial Life 70 14 0.00

15432D TransAmerica Occ. 72 32 0.01

15327 American General Life 78 5 0.00

15432B TransAmerica Occ. 84 37 0.01

15009 AXA 88 15 0.00

15213 Unum Life Ins Company of America 88 43 0.01

17801B US Financial Life 93 15 0.00

19172 Reassure America Life 95 38 0.01

11713 Primerica 100 5 0.00

15466 MetLife 100 41 0.01

15517 Alfa Life 100 30 0.00

15809 USAA Life 100 41 0.01

19465 Jackson National 100 58 0.01

19704 Wilton Reassurance Life 100 22 0.00

19822 State Farm Life 100 43 0.01

20471 Lincoln Benefit 100 26 0.00

20739 Allianz Life 100 37 0.01

24265 Protective Life Ins 100 80 0.01

12698B Conseco Life 100 68 0.01

13892B Primerica 100 60 0.01

14218C Reliastar 100 59 0.01

9950A MetLife 100 36 0.01

15807 Farmers New World 103 35 0.01

24521 Reliastar 115 7 0.00

18053 Sun Life Assurance 138 33 0.01

12034 US Financial Life 150 20 0.00

15805 Lincoln Financial 150 51 0.01

21455 Aviva Life Insurance Co 150 92 0.01

14280B ING 150 87 0.01

17226C First Penn-Pacific Life 150 78 0.01

2313 Transamerica 161 94 0.02

982C Transamerica 180 100 0.02


Page 41



benefitFair

value % of net

assets

US$000 US$000 %

17226B American United Life 181 90 0.01

9950B State Farm Life 192 65 0.01

11996 US Financial Life 200 55 0.01

15884 Transamerica 200 19 0.00

16162 Union Central Life 200 163 0.03


12131D Prudential 200 129 0.02

12131H Protective Life Ins 200 85 0.01

13531B Beneficial Life Insurance Company 200 (58) (0.01)

14475 ING ReliaStar Life 218 93 0.02

20539 Jackson National 225 41 0.01

13631A Americo Financial 225 127 0.02

15461 MetLife 226 (13) 0.00

7891B William Penn 244 134 0.02

5042 MetLife 250 152 0.02

11548 Jefferson Pilot 250 76 0.01

12035 CIGNA 250 (108) (0.02)


14692 West Coast Life 250 40 0.01

14958 Genworth 250 43 0.01


16336 Banner Life 250 (11) 0.00

16446 Surety Life 250 145 0.02

17313 TransAmerica 250 49 0.01



22606 MetLife 250 87 0.01

14692B West Coast Life 250 35 0.01

16216A Aviva Life Insurance Co 250 172 0.03

16216B American General Life 250 173 0.03

16560B Provident Life 250 186 0.03

18493A Penn Mutual 250 (28) 0.00

18493C Penn Mutual 250 (26) 0.00

23760B Lincoln National 250 106 0.02

12874 Life Investors Co of America 275 198 0.03

10065 Lincoln Benefit 279 94 0.02

14746 MetLife 288 148 0.02


Page 42



benefitFair

value % of net

assets

US$000 US$000 %

13962 National Benefit Life 300 1 0.00


13631B Aviva Life Insurance Co 300 194 0.03

14218A ING 300 181 0.03

12516 Great American Life 309 143 0.02

15815 USAA Life 325 147 0.02

20471D John Hancock 325 66 0.01


19203 Minnesota Life 350 (88) (0.01)

20209A Lincoln Benefit 350 82 0.01

7095C William Penn 350 216 0.03

8343 FEGLI 372 (8) 0.00

19605 ING 378 85 0.01

16680B Hartford Life & Annuity 397 84 0.01


15239 New York Life 400 126 0.02

19800 MetLife 400 231 0.04

20857 Transamerica 400 251 0.04

23195 Western Reserve Life 400 203 0.03

11707B Transamerica 400 155 0.03

12698A Conseco Life 400 273 0.04


23759 Prudential 470 73 0.01

15195C Transamerica 490 62 0.01


8515 Jefferson Pilot 500 106 0.02

10864 RiverSource Life Insurance 500 266 0.04

11980 Mass Mutual 500 (58) (0.01)

12843 Banner Life 500 159 0.03

13846 Security Life of Denver 500 80 0.01

16322 Principal Financial Group 500 165 0.03



19356 State Farm Life 500 50 0.01

19828 Transamerica 500 208 0.03




Page 43



benefitFair

value % of net

assets

US$000 US$000 %

21371 West Coast Life 500 176 0.03

22894 Phoenix 500 288 0.05

23905 Allstate Life 500 228 0.04

24859 West Coast Life 500 337 0.05



11707A TransAmerica Occ. 500 215 0.03

12131C United of Omaha 500 287 0.05

12131E Aviva Life Insurance Co 500 370 0.06

12131F Aviva Life Insurance Co 500 370 0.06

13400C ING 500 (507) (0.08)

14148A Principal Financial Group 500 5 0.00

14266A Banner Life 500 139 0.02

14266B Genworth 500 124 0.02

14491B Sun Life Assurance 500 73 0.01

14797B Pacific Life 500 379 0.06

15283B Lincoln Financial 500 375 0.06

15415A American Family Life 500 (14) 0.00

20085B ING 500 285 0.05

23760A Lincoln National 500 226 0.04

2687A-2688A Indianapolis Life 500 252 0.04

7969 Midland National 516 28 0.00

13892A American General Life 550 311 0.05



18721 TransAmerica 600 60 0.01

13277 Commonwealth Annuity 615 153 0.02


17745A General American Life 625 408 0.07

1280C Jefferson Pilot 663 444 0.07

5123 John Hancock 677 531 0.09

13192 John Hancock 700 329 0.05

13240 West Coast Life 700 76 0.01

17320 AXA 700 369 0.06

16392A Mass Mutual 700 (66) (0.01)

16392B Mass Mutual 700 13 0.00

8530A Guardian 700 156 0.03


Page 44



benefitFair

value % of net

assets

US$000 US$000 %

18876 Pacific Life 710 396 0.06

19239 Federated Life 733 346 0.06

15306 New England Financial 750 423 0.07

19094 Mass Mutual 750 213 0.03

19182 West Coast Life 750 437 0.0723583A-23584A Transamerica 750 436 0.07

5543D-5544D TransAmerica 750 285 0.05

1415B Pacific Life 759 298 0.05

10985 TransAmerica Occ. 800 441 0.07


971C MetLife 850 201 0.03

971D Lincoln Financial 850 (688) (0.11)

19571 North American Company 875 342 0.06

17515B Lincoln National 896 34 0.01

16328 American General Life 900 (33) (0.01)

7080I Penn Mutual 900 233 0.04

9052 Midland National 1,000 649 0.11

9069 MONY Life Insurance 1,000 (27) 0.00

11478 John Hancock 1,000 480 0.08

14917 American General Life 1,000 651 0.11

15806 Pacific Life 1,000 719 0.12


17241 Genworth 1,000 73 0.01

17248 Protective Life Ins 1,000 328 0.05

18737 Transamerica 1,000 368 0.06

20110 Northwestern Mutual Life 1,000 471 0.08

20339 Companion 1,000 671 0.11

21681 Genworth 1,000 713 0.12

23670 Thrivent Financial 1,000 574 0.09

24873 John Hancock 1,000 684 0.11

25245 John Hancock 1,000 405 0.07

10476D Allianz Life 1,000 761 0.12

10476G Companion 1,000 696 0.11

11634A Bankers Life 1,000 498 0.08

11671A MONY Life Insurance 1,000 730 0.12

12131A Continental Assurance Company 1,000 663 0.11

14299A Midland National 1,000 365 0.06


Page 45



benefitFair

value % of net

assets

US$000 US$000 %

14299B Lincoln National 1,000 304 0.05

14471A Lincoln National 1,000 158 0.03

14471B Protective Life Ins 1,000 288 0.05

14491A Sun Life Assurance 1,000 144 0.02

15195B Phoenix 1,000 34 0.01

15415B Phoenix 1,000 23 0.00

15624B Phoenix 1,000 (103) (0.02)

16560C Provident Life 1,000 653 0.11

17251A Banner Life 1,000 119 0.02

17251B Banner Life 1,000 119 0.02

17846B Lincoln Life & Annuity 1,000 181 0.03

18385-18387 John Hancock 1,000 737 0.1218385B-18387B John Hancock 1,000 721 0.12

18570C United of Omaha 1,000 451 0.07

18570D United of Omaha 1,000 451 0.07

18570E United of Omaha 1,000 451 0.07

19780A Lincoln National 1,000 306 0.05

20209D Transamerica 1,000 165 0.03

20234B New York Life 1,000 481 0.08

20781A John Hancock 1,000 562 0.09

20811A New York Life 1,000 194 0.03

20811B Lincoln Benefit 1,000 (621) (0.10)

22384A West Coast Life 1,000 414 0.07

22384B West Coast Life 1,000 414 0.07

2687B Aviva Life Insurance Co 1,000 254 0.04

3884-3885 US Life of NY 1,000 524 0.08

15890-15892 AXA 1,039 241 0.04

15385 Banner Life 1,100 291 0.05

11313 North American Company 1,200 508 0.08

23529 Lincoln National 1,200 388 0.06

14278 Prudential 1,226 216 0.03

14342 ING ReliaStar Life 1,250 447 0.07

24517 MONY Life Insurance 1,250 295 0.05

24993 John Hancock 1,250 521 0.08

5543C-5544C TransAmerica 1,250 479 0.08

20711-20713 West Coast Life 1,300 156 0.03

19074B Reassure America Life 1,302 (117) (0.02)


Page 46



benefitFair

value % of net

assets

US$000 US$000 %

22456 John Hancock 1,373 986 0.16

21381A John Hancock 1,429 606 0.10

7891A New England Financial 1,473 779 0.13

21381B John Hancock 1,476 634 0.10

3143 Mass Mutual 1,500 429 0.07

8215 Hartford Life & Annuity 1,500 (84) (0.01)

14887 Lincoln Benefit 1,500 396 0.06

15229 Lincoln Benefit 1,500 3 0.00

16426 Lincoln Financial 1,500 643 0.10

18037 Northwestern Mutual Life 1,500 353 0.06

21809 Banner Life 1,500 527 0.09

22493 Security Life of Denver 1,500 408 0.07

21181B Lincoln Benefit 1,500 542 0.09

14340 ING ReliaStar Life 1,600 549 0.09

20027-20029 Mass Mutual 1,650 625 0.10

19467A Penn Mutual 1,800 263 0.04

10551 TransAmerica Occ. 2,000 804 0.13



14158 John Hancock 2,000 214 0.03

16121 AXA 2,000 843 0.14

16306 TransAmerica 2,000 223 0.04

23433 Principal Financial Group 2,000 1,192 0.19

10914B New York Life 2,000 84 0.01

11671B MONY Life Insurance 2,000 1,455 0.24

14158B Transamerica 2,000 66 0.01

14162A American General Life 2,000 1,149 0.19

14234A American General Life 2,000 998 0.16

15371D Penn Mutual 2,000 90 0.01

15624A American General Life 2,000 138 0.02

16560A Provident Life 2,000 1,007 0.16


18872C Hartford Life & Annuity 2,000 1,099 0.18

21181A Lincoln Benefit 2,000 530 0.09

23293A Conseco Life 2,000 977 0.16

23293B Conseco Life 2,000 974 0.16

5543B-5544B TransAmerica 2,000 729 0.12


Page 47



benefitFair

value % of net

assets

US$000 US$000 %

9316B Lincoln Benefit 2,000 331 0.05

23574A Aviva Life Insurance Co 2,100 1,272 0.21

15564 Security Life of Denver 2,299 835 0.14

15098 American General Life 2,341 1,310 0.21

18872B Guardian 2,390 1,250 0.20

23574C Aviva Life Insurance Co 2,400 1,459 0.24



19083 Lincoln National 2,500 1,642 0.27

13561B American General Life 2,500 552 0.09


18264C Lincoln National 2,500 922 0.15

20314B Transamerica 2,500 798 0.13

20781C John Hancock 2,500 1,493 0.24

23574B Aviva Life Insurance Co 2,600 1,579 0.26

7080C MetLife 2,900 1,082 0.18

15362 Sun Life Assurance 2,934 1,307 0.21

20144 American National 2,950 872 0.14

7264 Prudential 3,000 828 0.13

13110 Protective Life Ins 3,000 36 0.01

11127B MetLife 3,000 1,133 0.18

14234B American General Life 3,000 1,394 0.23

15215B Pacific Life 3,000 2,306 0.37

17846C John Hancock 3,000 814 0.13

18295A Mass Mutual 3,000 1,882 0.30

20811C Penn Mutual 3,000 680 0.11

9316D American General Life 3,000 285 0.05

17980B Lincoln Benefit 3,125 1,962 0.32

20651C John Hancock 3,200 1,142 0.18

20651D John Hancock 3,250 1,172 0.19

20651A John Hancock 3,300 1,202 0.19


14345 Transamerica 3,600 851 0.14

7490B John Hancock 3,800 2,808 0.45


16450 North American Company 4,000 (327) (0.05)

19317 TransAmerica 4,000 2,795 0.45


Page 48



benefitFair

value % of net

assets

US$000 US$000 %

10570C John Hancock 4,000 2,196 0.36

12740B AXA 4,000 1,991 0.32

15371B Pacific Life 4,000 473 0.08

15538C AXA 4,000 2,526 0.41

7284B MetLife 4,000 1,123 0.18

14765 John Hancock 4,100 (1,505) (0.24)

22412 Transamerica 4,100 3,017 0.49

14765B John Hancock 4,100 2,199 0.36

20651E John Hancock 4,150 1,674 0.27

18866 TransAmerica 4,540 1,249 0.20

1393B-1394B West Coast Life 4,600 1,624 0.26

20651B John Hancock 4,600 1,716 0.28


7080D New York Life 4,900 1,795 0.29

7080E Pacific Life 4,900 1,631 0.26

7080K Lincoln Benefit 4,900 2,248 0.35

11538 John Hancock 5,000 3,734 0.60

14061 Phoenix 5,000 1,341 0.22


14721 Nationwide 5,000 497 0.08

15215 Pacific Life 5,000 3,376 0.55


17378 John Hancock 5,000 3,508 0.57

20170 John Hancock 5,000 2,389 0.39

21709 AXA 5,000 2,727 0.44


22897 AXA 5,000 2,444 0.40


10570B John Hancock 5,000 2,409 0.39

11418A Columbus Life 5,000 1,002 0.1611418C-17447C Lincoln National 5,000 499 0.08

12517D AXA 5,000 4,245 0.69

13173B John Hancock 5,000 1,876 0.30



14919A American General Life 5,000 1,276 0.21



Page 49



benefitFair

value % of net

assets

US$000 US$000 %

15371A Lincoln Financial 5,000 955 0.15

17037C American General Life 5,000 1,905 0.31

17987C Lincoln National 5,000 1,115 0.18

18295G John Hancock 5,000 3,228 0.52

18699B MetLife 5,000 1,049 0.17


18984C Lincoln Benefit 5,000 2,197 0.36

18984D TransAmerica 5,000 1,975 0.32

18984E Prudential 5,000 1,847 0.30

19080B Union Central Life 5,000 1,197 0.19

19267B TransAmerica Occ. 5,000 2,267 0.37

19433B Sun Life Assurance 5,000 2,037 0.33

19677D AXA 5,000 2,795 0.45

19877A John Hancock 5,000 1,240 0.20

19877B John Hancock 5,000 1,173 0.19

20209B John Hancock 5,000 640 0.10

20255D AXA 5,000 2,775 0.45


23574D American General Life 5,000 2,965 0.48

3612B Lincoln Benefit 5,000 2,347 0.38

3612D Lincoln Financial 5,000 1,895 0.31

3939B Lincoln National 5,000 1,496 0.24

5166C AXA 5,000 (660) (0.11)


9821B John Hancock 5,000 2,627 0.43

14033 Transamerica 5,253 2,915 0.47

18507 ING 6,000 3,951 0.64

19130 Phoenix 6,000 2,414 0.39

19677 Pacific Life 6,000 3,145 0.51

18570B Sun Life Assurance 6,000 3,050 0.49

18723D ING ReliaStar Life 6,000 2,108 0.34

18723E Union Central Life 6,000 1,927 0.31



19136 John Hancock 7,000 3,211 0.52

9516B John Hancock 7,000 3,844 0.62



Page 50



benefitFair

value % of net

assets

US$000 US$000 %

14996 John Hancock 7,500 3,774 0.61

14026C John Hancock 7,500 4,160 0.67

14607B John Hancock 7,500 3,775 0.61

24359 Lincoln Financial 7,650 5,966 0.97

15536C Mass Mutual 8,000 4,242 0.69

15536D Mass Mutual 8,000 4,264 0.69

18295D AXA 8,000 5,142 0.83

18872A Prudential 8,000 4,263 0.69

5390C TransAmerica Occ. 8,000 1,531 0.25

20811D Pacific Life 8,750 1,154 0.19

9555D The Hartford 8,800 5,499 0.89

19433 American National 9,000 3,730 0.60

19887A American National 9,000 3,363 0.54

2951E John Hancock 9,300 6,867 1.11




19080 American National 10,000 2,347 0.38


19376 Phoenix 10,000 6,013 0.97


17042F AXA 10,000 5,293 0.86


17608B AXA 10,000 6,213 1.01

17923B Lincoln Financial 10,000 3,955 0.64

18295E AXA 10,000 6,416 1.04

18505C American National 10,000 4,689 0.76

18518B AXA 10,000 4,971 0.81

18893A Lincoln Life & Annuity 10,000 2,771 0.45

18893B Lincoln Life & Annuity 10,000 2,991 0.48

19267D Lincoln Benefit 10,000 5,014 0.81


19887B Lincoln National 10,000 3,886 0.63

21351A John Hancock 10,000 2,401 0.39

22990B Phoenix 10,000 7,404 1.20

23543A Prudential 10,000 937 0.15

24741-24743 West Coast Life 10,000 4,956 0.80


Page 51



benefitFair

value % of net

assets

US$000 US$000 %

22306 John Hancock 15,000 7,074 1.15

19433C Lincoln Financial 15,000 5,528 0.90

15506H John Hancock 16,000 2,391 0.39


17181E Transamerica 20,000 6,162 1.00

21515 Security Life of Denver 22,000 8,764 1.42

Total investments 1,124,757 471,439 76.36

Other net assets 145,960 23.64

Total assets 617,399 100.00


Page 52

Significant investment transactions All additions to investments during the year were payments of premiums. The maturities are detailed below:

File number Insurance company Maturity

proceeds

US$000

17163 John Hancock 10,786

24147 Lincoln Financial 10,179

17087D ING 10,025

18719E AXA 7,142


12317B Lincoln National 5,047

15289B ING 5,000

20923D Sun Life Assurance 4,370

14478B AXA 4,000

11843 Lincoln Benefit 3,993

20923B John Hancock 3,905

3734 TransAmerica Occ. 3,504

15528E Lincoln National 3,468


11100B Continental Assurance Company 2,784

11100A Continental Assurance Company 2,752

13078 TransAmerica Occ. 2,532

14334 Transamerica 2,514


17603 Lincoln National 2,037

9874D Indianapolis Life 2,012

15289D Penn Mutual 2,000

20975 Pacific Life 1,838


18994E American General Life 1,422

2165A West Coast Life 1,168

2165D Pacific Life 1,125

2165C Aviva Life Insurance Co 1,124

15375 Union Central Life 1,023

20515 Banner Life 1,020


13183A Pacific Life 1,010

9874E Aviva Life Insurance Co 1,006

9734 American General Life 1,006

6106C MONY Life Insurance 1,005

18223A John Hancock 1,002


Page 53

Significant investment transactions


proceeds


12063D Lincoln Life & Annuity 1,002

14885A American General Life 1,001

14885B American General Life 1,001

18994A American General Life 1,001

3449 ING 1,001

14478A AXA 1,000

14925A United of Omaha 1,000

12493B TransAmerica Occ. 1,000

2372B-2245B West Coast Life 950

15345 ING 763

10449 Lincoln Financial 707

11596A United of Omaha 700

11596B United of Omaha 700

18738 Genworth 605

15179B Reassure America Life 603

17984 Sun Life Assurance 570

6137C Reassure America Life 567

2372 Columbus Life 522

9874B Reliastar 504

13183C Conseco Life 504

9874A Reassure America Life 502

9874C Prudential 501

12713 Conseco Life 500

16300 Allianz Life 500

2202B FEGLI 471

18994B ING 443

14600 ING 427

13630 Canada Life 412

14925B United of Omaha 400

14705 Banner Life 400

6137D Reassure America Life 303

13543 Midland National 300

14805 Lincoln National 255

14347 Lincoln Financial 254

18230 Nationwide 253

18994D General American Life 253

24163 American General Life 250

23907 Wilton Reassurance Life 250


Page 54

Significant investment transactions


proceeds

17877B General American Life 250

14297 Jackson National 225

14492 Lincoln National 205

7452A Genworth 200

7452C Genworth 200

7452D Genworth 200

7452E Genworth 200

7452F Genworth 200

7452G Genworth 200

7452H Genworth 200

7452I Genworth 200

7452J Genworth 200

7452K Genworth 200

7452L Genworth 200

7452M Genworth 200

7452N Genworth 200

7452O Genworth 200

20146 General American Life 200

15780A Conseco Life 152

15093 Protective Life Ins 151

25085B Genworth 150

1178B Transamerica 127

25085A Northwestern Mutual Life 101

14492B Jackson National 100

23727 Primerica 100

1928 Reassure America Life -

4409C William Penn -

3937 William Penn -

2806 Commonwealth Annuity -Additional receipts from prior year maturities 463

Total maturities 142,948

eea life settlements fund pcc limited annual report...

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