Primerica

Primerica Financial Services

File:Primerica logo.png
Company type	Subsidiary
Industry	Financial Services
Founded	February 10, 1977
Headquarters	3120 Breckinridge Blvd. Duluth, GA 30099-0001 (770) 381-1000
Key people	John Addison, Co-CEO Rick Williams, Co-CEO and COO Glenn Williams, President
Products	Life Insurance Mutual Funds Variable Annuities Loans Mortgages Long-Term Care Insurance Legal Services Car insurance Homeowners Insurance
Number of employees	2,200 (2007)
Parent	Citigroup
Website	www.primerica.com

Primerica Financial Services, a wholly owned subsidiary of Citigroup, headquartered in Duluth, Georgia. It is the largest financial services organization in North America, with more than 100,000 licensed independent representatives, of which 26,000 agents are FINRA securities licensed through PFS Investments, Inc., Primerica's securities broker-dealer affiliate. The company provides financial products and services through its affiliates that include term life insurance, mutual funds, variable annuities, loans, long-term care insurance and pre-paid legal services, to over 6 million clients. Its mortgage lender Citicorp Trust Bank, fsb is one of a few major mortgage providers to offer Simple Daily Interest mortages through its $.M.A.R.T Loans, which reduce the cost of a mortgage for people who regularly pre-pay or pay bi-weekly by recalculating interest based on the remaining balance everytime a payment is made. In August 2007 Primerica and Answer Financial introduced Primerica Secure, an auto and homeowner's insurance referral program to get today's most competitive quotes in the market among dozens of insurance carriers. Primerica conducts business principally in the US and Canada. In 2000 the company expanded overseas to begin operating in Spain as CitiSoluciones. It is a former component of the Dow Jones Industrial Average, having been replaced in 1991 by J.P. Morgan.

History

Founded in 1977 by Arthur L. Williams, Jr. as A. L. Williams & Associates, the company established a market niche by mass-marketing the concept of “Buy term and invest the difference.” With “BTID,” the company advised its mostly middle-income client base to purchase sufficient protection with term life insurance and systematically save and invest in separate investment vehicles, such as mutual fund IRAs. A.L. Williams was initially established as privately held general agency, at first selling term life insurance policies underwritten by Financial Assurance, Inc. (FIA)

The company expanded, outgrowing the capacity of FIA to process its business. In 1980, A.L. Williams entered into a contract with a larger underwriter of life insurance, Boston-based Massachusetts Indemnity and Life Insurance Company (MILICO), whose parent was PennCorp Financial Services, based in Santa Monica. To support A.L. Williams, headquartered in Atlanta, MILICO established a regional office in that city. In 1981, the company established First American National Corporation (later called 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 $27 million 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.

Travelers & Citigroup

In November of 1989, Primerica purchased the remaining 30% of ALWC that it did not previously own, and also purchased the privately held General Agent, A.L. Williams, Inc. In 1991, Primerica Corporation changed the name of A.L. Williams to Primerica Financial Services. The following year MILICO, Primerica's life insurance underwriter, changed its name to Primerica Life Insurance Company, and its broker-dealer FANS changed to PFS Investments, Inc.

Primerica Corporation, in December of 1993, acquired the remaining 73% of 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, Travelers Life and Annuity, Travelers Property/Casualty, Commercial Credit and other financial businesses.

In December 1997, Primerica announced it was going to begin offering pre-paid legal through Pre-Paid Legal Services, Inc., at the time both subsidiaries of Travelers Group, Inc.

In 1998, the US Securities and Exchange Commission censured and fined PFS Investments Inc., the securities arm for Primerica, for failure to properly supervise a group of registered representatives in Dearborn, Michigan. PFS Investments Inc. 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 ruling of the SEC, PFS Investments Inc. voluntarily hired an independent consultant to review their supervisory, compliance, policies and procedures, to prevent and detect violations of the federal securities laws. By the date of the ruling, PFS Investments had complied with the final recommendations made by the independent consultant.

In 1998, Travelers Group and banking giant Citicorp Trust Bank, fsb merged creating Citigroup (NYSE:C). Primerica and its affiliates continue to operate as subsidiaries of Citigroup, although the Travelers insurance business was spun off in 2002. Along with Primerica, other major brand names under Citigroup include Citibank, CitiFinancial, Citicorp Trust Bank, Smith Barney, and Banamex.

Ratings and Awards

Primerica's life insurance underwriter Primerica Life Insurance Company and its subsidiary National Benefit Life, based in the state of New York, have been rated A+ as "Superior" by A. M. Best as of November 2006. Standard & Poor's has the company rated AA as "Very Strong." Recently the Insurance Marketplace Standards Association, a non-profit organization based out of Bethesda, MD with the intent to create ethical standards for the insurance industry, has renewed qualification for Primerica Life and National Benefit Life for high standards and quality business, "continuing dedication to ethical business practices."

In 2007, Primerica received its fourth Dalbar Service Award from Dalbar, Inc., a client service rating organization focused on raising the standards of customer satisfaction and quality in the financial services industry, for Primerica's excellent customer service in mutual funds.

Criticisms of Primerica

Allegations that Primerica exists primarily to gather new recruits rather than provide financial services are common. The company resembles a Multi-Level Marketing scheme in almost every way, except that no money is exchanged between individudals within the company. Primerica mandates s $199 fee to "help pay for state licensing" and does not offer clear accounting of where these fees go. Some former agents allege that the required initial $199 fee was covertly charged to them. Also, some former agents have reported that they made little or no money at all with the company, and that the company is about recruiting more than offering financial services. According to one account, a Primerica agent admitted that the recruitment is the primary method for earning income within the company.

The recruiting system of the company is also part of the criticism regarding Primerica Financial Services. The interviews take the form of an orientation session on the company, and some have reported that questions about the company were not answered or were turned by the Regional Manager as an invitation to other meetings, where questions were still not answered.

There have been complaints that some office branches may not screen new applicants throughly. However, like all financial firms, each applicant must be fingerprinted and have a national background check. They must also have no felonies, attend recognized licensing classes and pass state and national licensing requirements before they may earn any commissions. After licensing, they must also maintain the licenses through regular state and federal continuing education standards. The failure to achieve these sometime difficult and time consuming requirements will result in no earnings by the applicant. Primerica reimburses applicants for the successful completion of the State Life and Federal Securities licenses.

It's also been noted that Primerica corporate headquarters removes criticism from the Primerica article on Wikipedia. [1]

External links

• Primerica Financial Services
• Citigroup Parent Company
• Citigroup Family Tree History
• Primerica at Rip Off Report

Sources

• Primerica Financial Services Citigroup.com, viewed August 1, 2007
• New Georgia Encyclopedia NGE, viewed November 7, 2006
• Citigroup Corporate History Citigroup.com, viewed August 1, 2007
• News Blaze article: IMSA rates Primerica Life Insurance company for ethical and excellent service, viewed August 20, 2007