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Primerica

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Primerica, Inc.
TypePublic
Industry
FoundedFebruary 10, 1977; 44 years ago (1977-02-10)
HeadquartersDuluth, Georgia, United States
Key people
  • D. Richard Williams
  • (Chairman of the Board)
  • Glenn J. Williams
  • (CEO)
  • Alison S. Rand
  • (Executive VP & CFO)
Products
RevenueIncrease US$ 1.69 billion (2017)
Increase US$ 408.01 million (2017)
Increase US$ 350.26 million (2017)
Total assetsIncrease US$ 12.46 billion (2017)
Total equityIncrease US$ 1.42 billion (2017)
Number of employees
  • 2,104 (Full-time; 2017)
  • 614 (On-call; 2017)
WebsitePrimerica.com
Footnotes / references
[1][2]
A Primerica building in Hillsboro, Oregon.

Primerica, Inc. (NYSE: PRI) provides insurance, investment and financial services to middle income families in the United States and Canada.[3] It has been described as a multi-level marketing company.[4][5][6][7] Primerica's headquarters are located in Duluth, Georgia.[8]

History

A.L. Williams & Associates (A.L. Williams), the progenitor of Primerica, was founded in 1977 by Arthur L. Williams Jr.[citation needed]

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.[citation needed]

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.[9]

In December 1988, Sanford Weill's Commercial Credit acquired Primerica Corporation for $1.54 billion, retaining the Primerica name.[10][11] On February 6, 1989, Primerica Corporation began trading on the New York Stock Exchange.[12][citation needed]

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.[13][citation needed]

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.[14][15][16] In 1998, Primerica had net income of $398 million on net sales of $1.65 billion.[17]

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.[18] 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.[19]

In 1998, Travelers Group and banking giant Citicorp merged creating Citigroup (NYSEC). Primerica and its affiliates continued to operate as subsidiaries of Citigroup, although the Travelers insurance business was spun off in 2002.[20]

Citigroup attempted to sell Primerica in 2008,[21] having received several bids from life insurance companies and private equity firms interested in buying.[22][23] At the time the market value of the company was estimated to be $7 billion, roughly 15 times its annual earnings.[24] 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.[25]

Initial public offering

On November 5, 2009 Citi announced that it intended to spin off Primerica through an initial public offering.[26] The first trading occurred on April 1, 2010, priced at $15 a share the day before trading.[27] Citi raised 27 percent or $320 million through the IPO.[28][29][30][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.[31] 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.[32]

Primerica was listed by Forbes as one of "Americas 50 Most Trustworthy Financial Companies" in 2015.[33]

Products and business model

A Primerica convention in 2007.

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.[4][34]

The company primarily sells term life insurance,[1] as well as other financial services including auto and home insurance, mutual funds, and credit monitoring.[35][citation needed]

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.[4] As of September 2017, the company reported having 124,436 independent representatives.[citation needed]

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.[36]

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.[37][38]

See also

References

  1. ^ a b "Company Overview"
  2. ^ "US SEC: Form 10-K Primerica, Inc". U.S. Securities and Exchange Commission. Retrieved March 1, 2018.
  3. ^ 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
  4. ^ a b c Veneziani, Vince (April 1, 2010). "Meet Primerica, The New Wall Street IPO That's Really A Multi-Level Marketing Scheme". Business Insider.
  5. ^ Chittum, Ryan (March 9, 2012). "200 Years of Citi: An alternate history". Columbia Journalism Review. Retrieved November 7, 2018.
  6. ^ Celarier, Michelle (May 9, 2016). "Herbalife's Endgame". Slate. Retrieved September 24, 2017.
  7. ^ Carter, Zach (August 24, 2015). "Senate Republicans Think Herbalife Is A Good Model For Your Retirement Savings". Huffington Post. Retrieved September 24, 2017.
  8. ^ "Primerica opens 4th St. Cloud-area office". St. Cloud Times. Retrieved September 17, 2018.
  9. ^ "American Can Picks a Name". The New York Times. March 7, 1987. Retrieved January 26, 2008.
  10. ^ "Commercial Credit Agrees to Purchase Primerica for $1.7 Billion in Cash, Stock". Los Angeles Times. August 30, 1988. Retrieved March 4, 2021.
  11. ^ Vise, David A. (August 30, 1988). "COMMERCIAL CREDIT GROUP TO BUY PRIMERICA CORP". Washington Post. ISSN 0190-8286. Retrieved March 4, 2021.
  12. ^ SEC. "Travelers Inc 1994 Annual Report 10-K". SEC.report. Retrieved March 4, 2021.
  13. ^ Forbes. Forbes Incorporated. 1991.
  14. ^ "Plumeri next Willis CEO; Former Citigroup executive to succeed Reeve". Business Insurance. October 2, 2000. Archived from the original on September 10, 2012. Retrieved July 15, 2010.
  15. ^ "Willis chief discusses changes in financial services.(Willis Group Ltd. CEO Joseph J. Plumeri)(Interview)". Business Insurance. January 15, 2001. Retrieved July 15, 2010.[dead link]
  16. ^ "Joseph J. Plumeri Profile". Forbes. Archived from the original on October 31, 2010. Retrieved July 15, 2010.
  17. ^ Nash, Jeff (April 19, 1999). "The Chief Preacher: Joe Plumeri – Citibank Finds Sales Religion". Investment News. Retrieved July 16, 2010.
  18. ^ "Primerica Financial Services to Offer Legal Plans Through Pre-paid Legal Services, Inc". Business Wire. December 19, 1997. Retrieved August 20, 2007.
  19. ^ SEC Release No.40269 - July 28, 1998
  20. ^ Williams, Art; Karen Kassel Hutto (June 2006). Coach. Atlanta, Georgia: Art Williams Productions. ISBN 0-9786266-0-5.
  21. ^ Fineman, Josh (January 15, 2009). "Primerica Said to Drop Citigroup References on Cards, Brochures". Bloomberg. Retrieved January 18, 2009.
  22. ^ Bansal, Paritosh (June 6, 2008). "Citi gets initial bids for Primerica unit: sources". Reuters UK. Retrieved June 15, 2008.
  23. ^ "Primerica prepares to be taken off Citi's map". TheDeal.com. June 6, 2008. Retrieved June 15, 2008.[permanent dead link]
  24. ^ Wahba, Phil (September 5, 2008). "Citi could sell Primerica, Texas business: Ladenburg's Bove". Reuters. Retrieved October 26, 2010.
  25. ^ Magpily, Gerald (December 11, 2008). "Primerica sale is a bust for Citi". TheDeal.com. Archived from the original on May 3, 2009. Retrieved January 3, 2009.
  26. ^ Barr, Alistair (November 5, 2009). "Citigroup files for IPO of Primerica unit". MarketWatch. Retrieved November 15, 2009.
  27. ^ Sweet, Ken (April 1, 2010). "Primerca's IPO Prices at $15/Share; Stock Surging". Fox Business Network. Archived from the original on April 3, 2010. Retrieved April 1, 2010.
  28. ^ Tsang, Michael (March 31, 2010). "Primerica Raises $320 Million in IPO Selling Shares Above Range". Bloomberg. Retrieved April 1, 2010.
  29. ^ Baldwin, Maria Aspan, Clare. "Citi spinoff Primerica soars on hopes for economy". U.S. Retrieved March 4, 2021.
  30. ^ Tsang, Michael (April 1, 2010). "Primerica Jumps on First Day After $320 Million IPO (Update3)". BusinessWeek. Archived from the original on April 3, 2010. Retrieved April 1, 2010.
  31. ^ "Citigroup To Sell Stake In Primerica". BusinessWeek. March 17, 2010. Retrieved April 1, 2010.
  32. ^ "Primerica Announces "Refounding" IPO Process is Complete". Barron's Online. Retrieved January 4, 2012.
  33. ^ Dill, Kathryn. "America's 50 Most Trustworthy Financial Companies". www.forbes.com. Retrieved August 3, 2015.
  34. ^ "Primerica MLM: Making Network Marketing Simple". www.amazon.com. Retrieved March 4, 2021.
  35. ^ Gara, Antoine. "The Best Insurance Companies In Every State 2021". Forbes. Retrieved March 4, 2021.
  36. ^ Kass, Arielle. "Primerica hopes to settle complaints". ajc. Retrieved March 4, 2021.
  37. ^ Tan, Tiffany (May 31, 2017). "Financial adviser scammed friends, fellow churchgoers". Rapid City Journal. Retrieved November 18, 2018.
  38. ^ 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.

Sources

External links