Primerica Financial Services
Primerica Financial Services, a wholly owned subsidiary of Citigroup , is a General Agency with a business model that includes some features of multi-level marketing [1]. Its company headquarters are 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] It is one of a few major mortgage providers to offer Simple Daily Interest mortages which reduce the cost of a mortgage for people who regularly pre-pay or pay bi-weekly. In August 2007 Primerica and Answer Financial introduced Primerica Secure
Contents:
1 History
1.1 2007 Convention
2 Ratings and Awards
3 Criticism
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), whose 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 :
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
Primerica held its 30th Anniversary Convention August 1 , 2007 through August 4 , 2007 in Atlanta , Georgia in the Georgia Dome and the Georgia World Congress Center .[8] An estimated 60,000 representatives attended.[9][10] Primerica Secure was introduced at the event, as well as the newest term life insurance product Custom Advantage. Notable speakers included former Chairman & CEO of Citigroup Charles Prince , founder of Pre-Paid Legal Services, Inc. Harland Stonecipher , as well as Georgia Governor Sonny Perdue .[11]
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 .[12] Standard & Poor's has the company rated AA as "Very Strong."[13] Recently the Insurance Marketplace Standards Association
In 2005[15] Primerica representatives were able to begin submitting life insurance applications electronically through the TurboApps[16] application developed by the Primerica Field Technology team via Palm handheld devices.[17] 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.[18] 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.[19]
Criticism
There have been complaints that some representatives and their respective office branches have hired new members through deceptive job interviews. 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.
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