Primerica Financial Services, Inc.

Primerica Financial Services
Type	Subsidiary
Founded	February 10, 1977
Headquarters	3120 Breckinridge Blvd. Duluth, GA 30099-0001 1-770-381-1000
Key people	John Addison, Co-CEO Rick Williams, Co-CEO and COO Glenn Williams, President
Industry	Financial Services
Products	Life Insurance Mutual Funds Variable Annuities Loans Long-Term Care Insurance Legal Services Car insurance Homeowners Insurance
Employees	2,200 (2007)
Parent	Citigroup
Slogan	"Help families become debt free and financially independent"
Website	www.primerica.com

Primerica Financial Services, a wholly owned subsidiary of Citigroup, is a multi-level marketing^[1] company headquartered in Duluth, Georgia. It is the largest financial services marketing organization in North America, with more than 100,000 licensed independent representatives, of which 26,000 agents are NASD securities licensed through PFS Investments, Inc., Primerica's securities broker-dealer affiliate.^[2] The company provides financial products and services, including term life insurance, mutual funds, variable annuities, loans, long-term care insurance and pre-paid legal services, to over 6 million clients.^[2] In August 2007 Primerica and Answer Financial introduced Primerica Secure, an auto and homeowner's insurance referral program to help families get the best quotes from today's competitive industry. Primerica conducts business principally in the US and Canada. In 2000 the company expanded overseas to begin operating in Spain as CitiSoluciones.^[3]

History

Founded in 1977 by Arthur L. Williams, Jr., the company, then named A. L. Williams, 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 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, The Massachusetts Indemnity and Life Insurance Company (MILICO), who's parent was PennCorp. 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 called 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. That same year Gerry Tsai, Chairman & CEO of cash cow American Can Company, acquired and merged with MILICO's parent company PennCorp. American Can later was renamed Primerica Corporation.

In 1985 ALWC begin the procedure to open business in Canada. After encountering legal and cultural roadblocks of expanding outside the United States, ALWC finally began selling insurance products of Pennsylvania Life Insurance Company, a Primerica subsidiary, in Canada in 1986.

On November 30, 1988 ALWC acquired MILICO from Primerica Corporation through a stock merger acquisition for 44.58 million shares of ALWC stock, making Primerica Corporation the majority shareholder of ALWC. In December of 1988, Sandy Weill's Commercial Credit acquired Primerica Corporation for $1.54 billion, retaining the Primerica name. At this time, the major businesses under Primerica Corporation included A.L. Williams, Smith Barney and Commercial Credit. On February 6, 1989 Primerica Corporation began trading on the New York Stock Exchange.

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.^[4]

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.^[5]

In 1998, Travelers Group and banking giant Citicorp 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, Smith Barney, and Banamex.

Long time veteran executives John Addison and Rick Williams, quoted by Art Williams in his book Coach as "two true sons of A.L. Williams,"^[6] were appointed co-CEOs in 1999, with Glen Williams promoted to President in 2005.^[7]

2007 Convention

Official Atlanta Convention & Travel Bureau promotional banner for the Primerica 2007 Convention

60,000 representatives attend the 2007 convention at the Georgia Dome

Primerica held its 30th Anniversary Convention August 1-4, 2007 in Atlanta, Georgia at the Georgia Dome and the Georgia World Congress Center.^[8] An estimated 60,000 representatives attended.[1] [2] Primerica Secure was introduced at the event, as well as the newest term life insurance product Custom Advantage. Notable speakers included Charles Prince, Chairman & CEO of Citigroup, founder of Pre-Paid Legal Services, Inc. Harland Stonecipher, as well as Georgia Governor Sonny Perdue.

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.^[9] Standard & Poor's has the company rated AA as "Very Strong."^[10] 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."^[11]

In 2005^[12] Primerica representatives were able to begin submitting life insurance applications electronically through the TurboApps^[13] application developed by the Primerica Field Technology team via Palm handheld devices.^[14] Clients have the opportunity to get insurance quotes on the spot and complete the life application paperless. This effectively sped up the underwriting process for Primerica Life and increased the amount of policies processed and insurance face amount put into force on a monthly basis.^[15] In 2007 that electronic application process was extended to include the $.M.A.R.T. loan program offered through Primerica's sister company CitiCorp Trust Bank.

For the fourth time in a row in 2007, Primerica has been awarded the Dalbar Service Award by 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.^[16]

Criticism

There have been complaints that some representatives and their respective office branches have hired new members through deceptive job interviews. Primerica home office policies prohibit such methods and require strict compliance guidelines relating to all aspects of recruiting new representatives. Recently a few consumer complaint websites, notably Ripoff Report, have reversed their former negative stance on the company's business practice and given the company a positive rating after verifying claims that were speculative. ^{[17] [18]}

External links

• Primerica Financial Services
• Citigroup Parent Company

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
• Williams, Art; Karen Kassel Hutto (June 2006). Coach. Atlanta, Georgia: Art Williams Productions. ISBN 0-9786266-0-5. 
• News Blaze article: IMSA rates Primerica Life Insurance company for ethical and excellent service, viewed August 20, 2007

References

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