Primerica, Inc. (NYSE: PRI) provides insurance, investment and financial services to middle income families in the United States and Canada. It has been described as a multi-level marketing company. Primerica's headquarters are located in Duluth, Georgia.
|Founded||February 10, 1977|
|Headquarters||Duluth, Georgia, United States|
|Revenue||US$ 1.69 billion (2017)|
|US$ 408.01 million (2017)|
|US$ 350.26 million (2017)|
|Total assets||US$ 12.46 billion (2017)|
|Total equity||US$ 1.42 billion (2017)|
Number of employees
|Footnotes / references|
In 1980, A.L. Williams entered into a contract with Boston-based Massachusetts Indemnity and Life Insurance Company (MILICO), a larger underwriter of life insurance and a subsidiary of Santa Monica-based PennCorp Financial Services. In 1981, the company established First American National Corporation (later renamed The A.L. Williams Corporation) as a holding company for First American Life Insurance (later renamed A.L. Williams Life Insurance Company) and First American National Securities (later renamed PFS Investments, Inc). In 1982, The A.L. Williams Corporation (ALWC) underwrote a public stock offering, listed in the Over the Counter (OTC) market under the symbol ALWC. In 1983, the company became listed on the NASDAQ exchange under the same symbol.
In 1980, A.L. Williams entered into a contract with Boston-based Massachusetts Indemnity and Life Insurance Company (MILICO), a larger underwriter of life insurance and a subsidiary of Santa Monica-based PennCorp Financial Services.
PennCorp finalized a merger agreement with American Can Company in 1983, and became its subsidiary along with MILICO. In 1986 Triangle Industries bought American Can's packaging division and the rights to the company's name, and in 1987 American Can changed its name to Primerica Corporation.
In December 1988, Sanford Weill's Commercial Credit acquired Primerica Corporation for $1.54 billion, retaining the Primerica name. On February 6, 1989, Primerica Corporation began trading on the New York Stock Exchange.
Throughout the next ten years, Primerica Corporation's affiliated companies A.L Williams, MILICO, and FANS changed their names to Primerica Financial Services, Primerica Life Insurance Company, and Primerica Financial Services Investments, respectively.
In December 1993, Primerica fully acquired Travelers Insurance Corporation and adopted the name Travelers Inc., which was changed to Travelers Group the following year. Travelers Group included Primerica Financial Services, Smith Barney, and other financial businesses. Joe Plumeri was Chairman and CEO of Primerica Financial Services from 1995 to 1999. In 1998, Primerica had net income of $398 million on net sales of $1.65 billion.
In December 1997, Primerica announced it was going to begin offering pre-paid legal through Pre-Paid Legal Services, Inc., at the time a subsidiary of Travelers Group, Inc. In 1998, the U.S. Securities and Exchange Commission (SEC) censured and fined PFS Investments Inc., the securities arm for Primerica, for failure to properly supervise a group of registered representatives in Dearborn, Michigan. The SEC found that PFS Investments Inc. had failed to have in place effective policies and procedures to follow up adequately on three complaints received about the Dearborn registered representatives, "selling away" activities. Prior to the SEC's ruling, PFS Investments Inc. hired an independent consultant to review its supervisory and compliance policies and procedures to prevent and detect violations of the federal securities laws. By the date of the ruling, PFS Investments reported it had complied with the final recommendations made by the independent consultant.
In 1998, Travelers Group and banking giant Citicorp merged creating Citigroup (NYSE: C). Primerica and its affiliates continued to operate as subsidiaries of Citigroup, although the Travelers insurance business was spun off in 2002.
Citigroup attempted to sell Primerica in 2008, having received several bids from life insurance companies and private equity firms interested in buying. At the time the market value of the company was estimated to be $7 billion, roughly 15 times its annual earnings. Initially, a sale to JC Flowers & Co. LLC and Protective Life Corp was underway until the deal was canceled last minute for publicly undisclosed reasons.
Initial public offering
On November 5, 2009 Citi announced that it intended to spin off Primerica through an initial public offering. The first trading occurred on April 1, 2010, priced at $15 a share the day before trading. Citi raised 27 percent or $320 million through the IPO.[better source needed]
In a separate offering, private equity firm Warburg Pincus bought 17.2 million shares, resulting in a 23 percent stake in Primerica, and up to 33 percent if Warburg decided to exercise warrants to purchase an additional 4.3 million shares from Citi. On December 19, 2011, Citigroup sold its remaining equity stake in Primerica (approximately 8 million shares of Primerica's common stock), completing the separation from Citi.
Products and business model
Primerica, Inc. is an insurance and financial services company that uses what has been described as a multi-level marketing strategy, using eleven tiers of representatives and recruiters to sell financial products and services for commission.
In 2010, Primerica was reported to have over 100,000 representatives selling the company's financial products, with individual earnings averaging $5,156 per year. As of September 2017, the company reported having 124,436 independent representatives.
In 2012, Primerica was the target of multiple lawsuits alleging that the company's representatives sought to profit by earning commissions after convincing Florida firefighters, teachers, and other public workers to divest from safe government-secured retirement investments to inappropriate high-risk retirement products offered by Primerica. In January, 2014, the company set aside $15.4 million to settle allegations involving 238 cases.
In 2017, registered investment adviser Mike Lundy, a representative of Primerica and manager of its Rapid City, SD office, was sentenced to 5 years in federal prison after pleading guilty to wire fraud and filing a false tax return. Lundy was ordered by the court to pay back $1.3 million owed to the victims and to pay taxes owed to the Internal Revenue Service.
- "Company Overview"
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- Primerica Financial Services, Inc (May 27, 2008). "Project No. R511993. Comment of Primerica Financial Services, Inc. on the revised notice of proposed rulemaking on the Business Opportunity Rule R511993" (PDF). Federal Trade Commission. pp. 3–4, 12. Retrieved January 18, 2016.
Primerica suggests three modifications to the RPBOR, to better assure that the regulatory language actually achieves the clear intent of the Revised Notice that the Rule exclude multi-level marketing opportunities like those offered by Primerica and by many members of the Direct Selling Association...This will exclude most or all multi-level marketing companies, since most of them (like Primerica) prohibit upline agents from imposing fees on their downlines
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- SEC Release No.40269 - July 28, 1998
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- Tiffany Tan Journal Staff (February 21, 2017). "Ex-investment adviser admits pocketing millions in client money". Rapid City Journal Media Group. Retrieved March 26, 2019.
- Official website
- Business data for Primerica, Inc.: