Primerica Inc. (PRI) 2021年年度報告「NYSE」.pdf

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1、2021 ANNUAL REPORTGAAP 2021 2020 Change5 Total Revenues$2,709.7$2,217.5 22%Net Income Attributable to Primerica,Inc.$373.4$386.2-3%Stockholders Equity$2,082.5$1,835.9 13%Diluted Earnings Per Share1$9.38$9.57-2%Book Value Per Share1$52.90$46.71 13%Term Life Net Premiums$1,490.2$1,309.7 14%End of Peri

2、od Client Asset Value($in billions)$97.3$81.5 19%Weighted Average Shares Used to Calculate Diluted EPS 39.7 40.2-1%Common Shares Repurchased 0.1 2.2 nm End of Period Share Count2 39.4 39.3 0%Cash Dividends Declared Per Common Share$1.88$1.60 18%Market Price Per Share at Year End$153.27$133.93 14%Tot

3、al Stockholder Return 16%4%nm Debt-to-Capital3 22.6%16.9%nm Operating4 2021 2020 Change5 Adjusted Operating Revenues$2,706.4$2,224.5 22%Adjusted Net Operating Income$462.2$391.6 18%Diluted Adjusted Operating Income Per Share1$11.61$9.70 20%Adjusted Net Operating Income Return on 24.3%24.7%nm Adjuste

4、d Stockholders Equity 1.Percent change in per share calculations is calculated prior to rounding per share amounts 2.Share count reflects outstanding common shares and excludes restricted stock units(RSUs)3.Debt-to-capital is that of the parent company only.Capital in the debt-to-capital ratio inclu

5、des stockholders equity and notes payable 4.A reconciliation of GAAP results to operating results can be found on our website at https:/ 5.Certain variances are noted as“nm”to indicate not meaningfulOn the cover:Diversity,Equality and Inclusion are important aspects of the culture at Primerica.FINAN

6、CIAL HIGHLIGHTS($in millions,except per share amounts or as otherwise indicated.)Dear Fellow Stockholders,Over the last 45 years,Primerica has become a major provider of financial solutions,helping middle-income families address financial challenges with valuable,personalized education and guidance.

7、Without Primericas independent life and mutual fund-licensed representatives,many families would not receive this much needed assistance as other providers continue to shift their focus toward more affluent markets.The pandemic continues to reveal the gaps in financial planning for middle-income fam

8、ilies and the importance of protecting families from unanticipated loss.This new level of awareness created unprecedented demand for Primericas products and,after setting records in 2020,we continued to see strong demand for life insurance in 2021.Additionally,strong equity markets and a greater foc

9、us on the future led to record sales and asset levels in our investment and savings business as clients prepare for possible financial disruption.At the same time,interest in our entrepreneurial business opportunity remained elevated,fueled by the appeal of alternative career paths driven by what ha

10、s become known as the“great resignation”.The pandemic has also created many challenges in the state and provincial licensing processes,which continue to negatively impact new recruits who are working toward becoming life-licensed.A key pillar of our corporate strategy is to broaden and strengthen ou

11、r product portfolio.We continue to execute on our plan with the recent addition of two product lines:Mortgages and Senior Health.This expansion allows us to serve a broader range of clients throughout more phases of their lives.It also expands the sales forces business opportunity while diversifying

12、 Primericas income streams and exposure to market cycles.As we expand our product offering,we plan to continue enhancing our existing products and introducing a series of new technology initiatives that will help us better serve clients.Today,we have nearly 130,000 independent life insurance license

13、d representatives and 2,200 Primerica employees working together to support our clients.The acquisition of e-TeleQuote Insurance,Inc.has added 700 more individuals to our team.More than ever,we are steadfast in our mission to create financially independent families and we remain well positioned to m

14、eet the needs of our clients.Our three-ring logo symbolizes Primericas commitment to our clients,our sales force and our company,which includes employees and stockholders.SIZE OF LIFE-LICENSED SALES FORCE(END OF PERIOD)20202021201920182017126,121130,736130,522134,907*129,515*2020 included 3,597 temp

15、orary licenses and 2,508 licenses with extended renewal dates that we did not expect to become permanent.KEY ACHIEVEMENTS349,374 NEW REPRESENTATIVES RECRUITED$109 BILLION OF NEW FACE AMOUNT ISSUED39,622 NEW LIFE LICENSES$900 BILLION OF TERM FACE AMOUNT IN FORCE129,515 LIFE-LICENSED REPRESENTATIVES A

16、T YEAR-END$11.7 BILLION OF INVESTMENT&SAVINGS PRODUCTS SOLD26,286 MUTUAL FUND-LICENSED REPRESENTATIVES AT YEAR-END$97 BILLION OF CLIENT ASSETS UNDER MANAGEMENT AT YEAR-END323,855 ISSUED TERM LIFE POLICIES$1.2 BILLION IN CLOSED U.S MORTGAGE VOLUME BROKEREDCompound annualized growth,or CAGR,compares 2

17、021 year-end results to pre-pandemic 2019 results.11%CAGR 7%CAGR 1%CAGR 17%CAGR 6%CAGR NEW DATA6%CAGR 6%CAGR 25%CAGR UNCHANGEDThe Power of our DistributionMany members of our sales force are deeply rooted in their communities,providing the connections that allow them to effectively serve our target

18、market:families with annual income between$30,000 and$100,000.Despite constituting the largest population segment in the U.S.and Canada,these families are generally underserved.Our sale forces leadership and education-based approach is crucial to motivating clients to take action.Their diversity fur

19、ther positions us for success,allowing representatives to bring their unique perspectives to clients of all ages and cultural backgrounds.After nearly two years of navigating through the challenges posed by the COVID pandemic,the entrepreneurial passion of our sales force is more evident than ever.T

20、hey have successfully pivoted from meeting clients across the kitchen table to a hybrid in-person/virtual model,allowing them not only to increase their reach and efficiency,but also showcase the attractiveness of our business opportunity.Strategic Expansion to Continue Meeting the Needs of Middle-I

21、ncome FamiliesWe offer a suite of products that is easy to understand,including term life insurance,issued by our life insurance subsidiaries.We also offer other financial solutions,including savings,referral programs for auto and home insurance,mortgages and senior health managed by well-known thir

22、d-party partners.For several years,Primerica has been the second largest issuer of term life insurance coverage in North America,and we are rapidly closing in on$1 trillion of individual life insurance coverage in force.We are confident that our core life insurance and investment products businesses

23、 are well positioned for continued organic growth.In 2019,we added a new mortgage program to further help our clients with their financial needs.Since then,we have continued to look for opportunities to strategically expand our presence and currently operate in 17 states.In July 2021,we completed th

24、e acquisition of e-TeleQuote Insurance,Inc.,a senior health DILUTED EARNINGS PER SHAREATTRIBUTABLE TO PRIMERICA,INC.NET INCOME ATTRIBUTABLE TO PRIMERICA,INC.($IN MILLIONS)2020202020212021201920192018201820172017$7.61$350$7.33$324$8.62$366$9.57$386$9.38$373broker focused on the Medicare business.Seni

25、ors comprise one of the fastest growing demographics with approximately 10,000 people in the United States turning 65 every day.The introduction of these products positions Primerica sales representatives to inform their clients about a broader array of financial solutions.We also plan to continue e

26、nhancing our existing products and introduce a series of new technology initiatives that will help us better serve clients.Our Responsibility as Corporate CitizensWe believe that adopting sound,sustainable business practices will reinforce our reputation for“doing whats right”in the communities we s

27、erve.We are also committed to“doing whats right”inside the halls of our company.We value and promote diversity at all levels of our organization.We foster an environment of continuous learning through ongoing diversity,equality and inclusion training experiences.Teammates can also collaborate and fe

28、el a sense of belonging through recently launched employee resource groups.In recognition of our efforts to create a culture that fosters equality and inclusion,Primerica was once again named to Forbes list of Americas Best Employers for Women.In early 2022,Primerica was named to the Bloomberg Gende

29、r-Equality Index(GEI)for the third year in a row.Our mission of enabling families to live financially independent lives Our representatives come from all walks of life and are committed to doing whats right for their clients and the communities they serve.is deeply rooted in the social component of

30、our environmental,social and governance framework,commonly referred to as ESG.Environmentally,we are committed to thoughtfully reducing the impact of climate change on our business while limiting our impact on the environment through various energy efficiencies and recycling programs.We further seek

31、 to create value for our clients and communities through a strong ethics,governance and compliance regime.I invite you to read our 2021 Corporate Sustainability Report,which is posted on the governance section of our investor relations website,to learn more about our ESG efforts.Creating Long-Term S

32、tockholder ValueOur commitment to delivering value for clients,sales force,employees and stockholders is as strong as ever.Our 2021 financial results reflect our progress toward that end with adjusted operating revenue growth of 22%and diluted adjusted EPS growth of 20%year-over-year.Our balance she

33、et remains conservatively positioned with a high-quality investment portfolio,modest leverage and ample holding company liquidity.Over the last five years,Primericas investors have been rewarded with total stockholder return of 134%,strongly outperforming the S&P 500 insurance index total return of

34、76%.More than ever,Primerica is well prepared to meet the needs of middle-income families with unparalleled distribution,technology-enabled client engagement and simple product solutions for every stage of life.Ending AssetsIn ForceINVESTMENT&SAVINGS PRODUCTS SALES AND CLIENT ASSET VALUES($IN BILLIO

35、NS)TERM LIFE INSURANCE FACE AMOUNT($IN BILLIONS)2020202020212021201920192018201820172017SalesIssued$61.2$763.8$97.3$903.4$6.2$7.0$7.5$7.8$11.7$95.6$95.2$94.0$108.5$109.4134%201620172018201920202021TOTAL STOCKHOLDER RETURN Primerica,Inc.S&P 500 Insurance Index76%GLENN J.WILLIAMSCHIEF EXECUTIVE OFFICE

36、RThank you for your continuing commitment to Primerica.LEFT TO RIGHT:John A.Addison,Jr.,Gary L.Crittenden,Beatriz R.Perez,Joel M.Babbit,Glenn J.Williams,P.George Benson,Cynthia N.Day,C.Saxby Chambliss,Barbara A.Yastine,D.Richard Williams,Sanjeev DheerBOARD OF DIRECTORSUNITED STATESSECURITIES AND EXC

37、HANGE COMMISSIONWashington,D.C.20549FORM 10-K(Mark One)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31,2021ORTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period fromt

38、oCommission File Number:001-34680Primerica,Inc.(Exact name of registrant as specified in its charter)Delaware27-1204330(State or other jurisdiction of incorporation or organization)(I.R.S.Employer Identification No.)1 Primerica ParkwayDuluth,Georgia30099(Address of principal executive offices)(ZIP C

39、ode)Registrants telephone number,including area code:(770)381-1000Securities registered pursuant to Section 12(b)of the Act:Title of each classTrading Symbol(s)Name of each exchange on which registeredCommon StockPRINew York Stock ExchangeSecurities registered pursuant to Section 12(g)of the Act:Non

40、eIndicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the SecuritiesAct.Yes NoIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d)of theAct.Yes NoIndicate by check mark whether the registrant(1)

41、has filed all reports required to be filed by Section 13 or 15(d)of theSecurities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required tofile such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes NoIndicat

42、e by check mark whether the registrant has submitted electronically every Interactive Data File required to be submittedpursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter periodthat the registrant was required to submit such files).Yes N

43、oIndicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smallerreporting company,or an emerging growth company.See the definitions of“large accelerated filer,”“accelerated filer,”“smaller reporting company,”and“emerging growth compan

44、y”in Rule 12b-2 of the Exchange Act.Large accelerated filer Accelerated filerNon-accelerated filerSmaller reporting company Emerging growth company If an emerging growth company,indicate by check mark if the registrant has elected not to use the extended transition periodfor complying with any new o

45、r revised financial accounting standards provided pursuant to Section 13(a)of the ExchangeAct.Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of theeffectiveness of its internal control over financial reporting under Section 404(b)of

46、the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accounting firm that prepared or issued its audit report.Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the ExchangeAct).Yes NoThe aggregate market value of the voting common equity held by

47、non-affiliates of the registrant as of June 30,2021,was$6,014,884,680.The number of shares of the registrants Common Stock outstanding at January 31,2022,with$0.01 par value,was 39,243,822.Documents Incorporated By ReferenceCertain information contained in the Proxy Statement for the Companys Annual

48、 Meeting of Stockholders to be held onMay 11,2022 is incorporated by reference into Part III hereof.TABLE OF CONTENTSPageCautionary Statement Concerning Forward-Looking StatementsiRisk Factors SummaryiiPART I1Item 1.Business1Item 1A.Risk Factors35Item 1B.Unresolved Staff Comments60Item 2.Properties6

49、0Item 3.Legal Proceedings61Item 4.Mine Safety Disclosures61Item X.Information About Our Executive Officers and Certain Significant Employees62PART II66Item 5.Market for Registrants Common Equity,Related Stockholder Matters and IssuerPurchases of Equity Securities66Item 6.Reserved67Item 7.Managements

50、 Discussion and Analysis of Financial Condition and Results ofOperations68Item 7A.Quantitative and Qualitative Disclosures About Market Risk103Item 8.Financial Statements and Supplementary Data106Item 9.Changes in and Disagreements With Accountants on Accounting and FinancialDisclosure171Item 9A.Con

51、trols and Procedures171Item 9B.Other Information173Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections173PART III174Item 10.Directors,Executive Officers and Corporate Governance174Item 11.Executive Compensation175Item 12.Security Ownership of Certain Beneficial Owners and Man

52、agement and RelatedStockholder Matters175Item 13.Certain Relationships and Related Transactions,and Director Independence176Item 14.Principal Accounting Fees and Services176PART IV177Item 15.Exhibits,Financial Statement Schedules177Item 16.Form 10-K Summary195Signatures196CAUTIONARY STATEMENT CONCER

53、NINGFORWARD-LOOKING STATEMENTSInvestors are cautioned that certain statementscontained in this report as well as somestatements in periodic press releases and someoral statements made by our officials during ourpresentations are“forward-looking”statements.Forward-looking statements include,withoutli

54、mitation,any statement that may project,indicate or imply future results,events,performance or achievements,and may containthe words“expect”,“intend”,“plan”,“anticipate”,“estimate”,“believe”,“will be”,“will continue”,“will likely result”,and similar expressions,orfuture conditional verbs such as“may

55、”,“will”,“should”,“would”,and“could”.In addition,anystatement concerning future financialperformance(including future revenues,earnings or growth rates),ongoing businessstrategies or prospects,and possible actionstaken by us or our subsidiaries are also forward-looking statements.Forward-looking sta

56、tements are based oncurrent expectations and projections aboutfuture events and are inherently subject to avariety of risks and uncertainties,many of whichare beyond the control of our managementteam.All forward-looking statements in thisreport and subsequent written and oral forward-looking stateme

57、nts attributable to us,or topersons acting on our behalf,are expresslyqualified in their entirety by these risks anduncertainties.These risks and uncertainties aredescribed under“Item IA.Risk Factors”andsummarized below under“Risk FactorsSummary.”Developments in any of the areas addressed inthese ri

58、sks or uncertainties could cause actualresults to differ materially from those anticipatedor projected or cause a significant reduction inthe market price of our common stock.Further,the risks and uncertainties described under ItemIA.“Risk Factors”and summarized below under“Risk Factors Summary”may

59、not include all ofthe risks and uncertainties that could affect us.Inaddition,in light of these risks and uncertainties,the matters referred to in the forward-lookingstatements contained in this report may not infact occur.Accordingly,undue reliance shouldnot be placed on these statements.Weundertak

60、e no obligation to publicly update orrevise any forward-looking statements as aresult of new information,future events orotherwise,except as otherwise required by law.Primerica 2021 Annual ReportiRISK FACTORS SUMMARYThe following is a summary of the risks anduncertainties that could have a material

61、adverseeffect on our business,financial condition andresults of operations.We encourage you tocarefully review the risk factors contained in“Item 1A.Risk Factors”in their entirety foradditional information regarding these risks anduncertainties.Risks Related to Our DistributionStructureOur failure t

62、o continue to attract newrecruits,retain independent salesrepresentatives or license or maintain thelicensing of independent salesrepresentatives would materially adverselyaffect our business,financial condition andresults of operations.There are a number of laws and regulationsthat could apply to o

63、ur independentcontractor distribution model,which couldrequire us to modify our distributionstructure.There may be adverse tax,legal or financialconsequences if the independent contractorstatus of independent sales representativesis overturned.The Companys,the independent salesrepresentatives,or the

64、 licensed healthinsurance agents violation of,or non-compliance with,laws and regulations andrelated claims and proceedings couldexpose us to material liabilities.Any failure to protect the confidentiality ofclient information could adversely affect ourreputation and have a material adverseeffect on

65、 our business,financial conditionand results of operations.Risks Related to Our Insurance Businessand ReinsuranceOur life insurance business may facesignificant losses if our actual experiencediffers from our expectations regardingmortality or persistency.Our life insurance business is highlyregulat

66、ed,and statutory and regulatorychanges may materially adversely affect ourbusiness,financial condition and results ofoperations.A decline in the regulatory capital ratios ofour insurance subsidiaries could result inincreased scrutiny by insurance regulatorsand ratings agencies and have a materialadv

67、erse effect on our business,financialcondition and results of operations.A significant ratings downgrade by a ratingsorganization could materially adverselyaffect our business,financial condition andresults of operations.The failure by any of our reinsurers orreserve financing counterparties to perf

68、ormits obligations to us could have a materialadverse effect on our business,financialcondition and results of operations.Risks Related to Our Investments andSavings Products BusinessOur Investment and Savings Productssegment is heavily dependent on mutualfund and annuity products offered by arelati

69、vely small number of companies,and,if these products fail to remain competitivewith other investment options or we loseour relationship with one or more of thesecompanies,our business,financial conditionand results of operations may be materiallyadversely affected.The Companys or the securities-lice

70、nsedindependent sales representativesviolations of,or non-compliance with,lawsand regulations could expose us to materialliabilities.If heightened standards of conduct or morestringent licensing requirements,such asthose adopted by the Securities andiiPrimerica 2021 Annual ReportRISK FACTORS SUMMARY

71、Exchange Commission(“SEC”)and thoseproposed or adopted by the Department ofLabor(“DOL”),state legislatures orregulators or Canadian securities regulators,are imposed on us or the independent salesrepresentatives,or selling compensation isreduced as a result of new legislation orregulations,it could

72、have a material adverseeffect on our business,financial conditionand results of operations.If our suitability policies and procedures,orour policies and procedures for compliancewith federal,state or provincial regulationsgoverning standards of care,were deemedinadequate,it could have a material adv

73、erseeffect on our business,financial conditionand results of operations.Non-compliance with applicable regulationscould lead to revocation of our subsidiarysstatus as a non-bank custodian.Risks Related to Our MortgageDistribution BusinessLicensing requirements will impact the sizeof the mortgage loa

74、n sales force.Our mortgage distribution business is highlyregulated and subject to various federal,state and provincial laws and regulations inthe U.S.and Canada.Changes in,non-compliance with,or violations of,such lawsand regulations could affect the cost or ourability to distribute our products an

75、d couldmaterially adversely affect our business,financial condition and results of operations.Risks Related to e-TeleQuotes SeniorHealth Insurance Distribution BusinessDue to our very limited history withe-TeleQuote Insurance,Inc.(“e-TeleQuote”),we cannot be certain that its businessstrategy will be

76、 successful or that we willsuccessfully address the risks below or anyother risks not now known to us that maybecome material.e-TeleQuote is highly regulated and subjectto compliance requirements of the UnitedStates governments Centers for Medicareand Medicaid Services(“CMS”)and those ofits carrier

77、partners.Non-compliance with,orviolations of,such requirements may harmits business,which could have a materialadverse effect on our business,financialcondition and results of operations.e-TeleQuote receives leads that areexternally acquired from third-party vendorsand internally generated from mark

78、etinginitiatives and receives referrals fromPrimerica independent sales representatives.e-TeleQuotes business may be harmed if itcannot continue to acquire or generateleads on commercially viable terms,if it isunable to convert leads to sales atacceptable rates,if Primerica independentsales represen

79、tatives do not introduceconsumers to e-TeleQuote,or ifpolicyholder retention is lower thanassumed,any of which could adverselyimpact our business.If e-TeleQuotes ability to enroll individualsduring the Medicare annual election periodis impeded,its business may be harmedwhich could adversely impact o

80、ur business,financial condition and results of operations.e-TeleQuotes business is dependent on keycarrier partners.The loss of a key carrierpartner,or the modification of commissionrates or underwriting practices with a keycarrier partner,could harm its businesswhich could adversely impact our busi

81、ness,financial condition and results of operations.Risks Related to Economic Downcycles,Public Health Crises or Catastrophes,and DisasterThe effects of economic down cycles,issuesaffecting the national and/or globaleconomy or global geopolitical event(s)could materially adversely affect ourbusiness,

82、financial condition and results ofoperations.Primerica 2021 Annual ReportiiiRISK FACTORS SUMMARYMajor public health pandemics,epidemicsor outbreaks,such as,the COVID-19pandemic,or other catastrophic events,could materially adversely impact ourbusiness,financial condition and results ofoperations.In

83、the event of a disaster,our businesscontinuity plan may not be sufficient,whichcould have a material adverse effect on ourbusiness,financial condition and results ofoperations.Risks Related to InformationTechnology and CybersecurityIf one of our,or a third-party partners,significant information tech

84、nology systemsfails,if its security is compromised,or if theInternet becomes disabled or unavailable,our business,financial condition and resultsof operations may be materially adverselyaffected.The current legislative and regulatoryclimate with regard to privacy andcybersecurity may adversely affec

85、t ourbusiness,financial condition,and results ofoperations.e-TeleQuotes security measures designedto protect against breaches of security andother interference with its systems andnetworks are not fully mature.Ife-TeleQuote is subject to cyber-attacks orsecurity breaches or is otherwise unable tosaf

86、eguard the security and privacy ofconfidential data,including personal healthinformation,e-TeleQuotes business may beharmed,which could have a materialadverse effect on our business,financialcondition and results of operations.Financial Risks Affecting Our BusinessCredit deterioration in,and the eff

87、ects ofinterest rate fluctuations on our investedasset portfolio and other assets that aresubject to changes in credit quality andinterest rates could materially adverselyaffect our business,financial condition andresults of operations.Valuation of our investments and thedetermination of expected cr

88、edit losseswhen the fair value of our available-for-saleinvested assets is below amortized cost areboth based on estimates that may prove tobe incorrect.Changes in accounting standards can bedifficult to predict and could adverselyimpact how we record and report ourfinancial condition and results of

89、 operations.The inability of our subsidiaries to paydividends or make distributions or otherpayments to us in sufficient amounts wouldimpede our ability to meet our obligationsand return capital to our stockholders.Risks Related to Legislative andRegulatory ChangesWe are subject to various federal,s

90、tate andprovincial laws and regulations in the UnitedStates and Canada,changes in which mayrequire us to alter our business practicesand could materially adversely affect ourbusiness,financial condition and results ofoperations.The current legislative and regulatoryclimate with regard to financial s

91、ervices mayadversely affect our business,financialcondition,and results of operations.Medicare Advantage is a product legislatedand regulated by the United Statesgovernment.If the enabling legislation andregulation or implementing guidance issuedby CMS change,e-TeleQuotes businessmay be harmed,which

92、 could have amaterial adverse effect on our business,financial condition and results of operations.General Risk FactorsLitigation and regulatory investigations andactions may result in financial losses andharm our reputation.A significant change in the competitiveenvironment in which we operate coul

93、dnegatively affect our ability to maintain orincrease our market share and profitability.ivPrimerica 2021 Annual ReportRISK FACTORS SUMMARYThe loss of key employees could negativelyaffect our financial results and impair ourability to implement our business strategy.Prohibitions on our ability to es

94、tablish ourown COVID-19 protocols or governmentimposed COVID-19 vaccine mandates couldhave a material adverse impact on ourbusiness and results of operations.We may be materially adversely affected bycurrency fluctuations in the United Statesdollar versus the Canadian dollar.Any acquisition of or in

95、vestment inbusinesses that we may undertake that doesnot perform as we expect or that is difficultfor us to integrate could materiallyadversely impact our business,financialcondition and results of operations.The market price of our common stock mayfluctuate.Primerica 2021 Annual ReportvPART IITEM 1

96、.BUSINESS.Primerica,Inc.(“Primerica”,“we”,“us”or the“Parent Company”)is a leading provider offinancial products to middle-income householdsin the United States and Canada with 129,515life insurance-licensed sales representatives as ofDecember 31,2021.These independent licensedrepresentatives(“indepe

97、ndent salesrepresentatives”or“independent sales force”)assist our clients in meeting their needs for termlife insurance,which we underwrite,and mutualfunds,annuities,managed investments andother financial products,which we distributeprimarily on behalf of third parties.We insuredover 5.7 million liv

98、es and had approximately2.7 million client investment accounts as ofDecember 31,2021.In 2020,we ranked as the#2 issuer of term life insurance face amount inthe United States according to rankings.Ourbusiness model uniquely positions us to reachunderserved middle-income consumers in acost-effective m

99、anner and has proven itself inboth favorable and challenging economicenvironments.Our mission is to serve middle-income familiesby helping them make informed financialdecisions and providing them with a strategyand tools to gain financial independence.Ourdistribution model is designed to:Address our

100、 clients financialneeds.Independent sales representativesprimarily use our proprietary financial needsanalysis tool(“FNA”)and an educationalapproach to demonstrate how our productofferings can provide financial protectionfor our clients families,save for theirretirement and other needs,and managethe

101、ir debt.Typically,our clients are thefriends,family members and personalacquaintances of the sales representatives.Meetings are generally held in informal,face-to-face settings either in person orthrough remote communication tools,usually while clients are in their homes.Provide a business opportuni

102、ty.Weprovide an entrepreneurial businessopportunity for individuals to distributefinancial products.Low entry fees as well asthe ability to select their own schedules andtime commitments allow independent salesrepresentatives to supplement their incomeby starting their own businesses withoutleaving

103、their current jobs.Our uniquecompensation structure,technology,salessupport and back-office processing aredesigned to enable independent salesrepresentatives to successfully grow theirbusinesses.We believe there is significant opportunity tomeet the increasing array of financial servicesneeds of our

104、 clients.We intend to leverage theindependent sales force to meet such clientneeds,which will drive long-term value for all ofour stakeholders.Our strategy is organizedacross four primary areas:Maximizing independent sales force growth,leadership and productivity;Broadening and strengthening ourprot

105、ection product portfolio;Providing offerings that enhance ourInvestment and Savings Products(“ISP”)business;andDeveloping digital capabilities to deepenour client relationships.In 2021,we executed on our strategy to broadenour protection product portfolio by acquiring80%of e-TeleQuote Insurance,Inc.

106、andsubsidiaries(collectively,“e-TeleQuote”)throughour recently formed subsidiary,Primerica Health,Inc.(“Primerica Health”).e-TeleQuote marketsMedicare-related insurance productsunderwritten by third-party health insurancecarriers to eligible Medicare participants throughits licensed health insurance

107、 agents.Refer toNote 20(Acquisition)to our consolidatedfinancial statements included elsewhere in thisreport for more information regarding theacquisition of e-TeleQuote.Primerica 2021 Annual Report1ITEM 1.BUSINESSCorporate StructureWe conduct our core business activities in theUnited States through

108、 four principal entities,allof which are direct or indirect wholly or majorityowned subsidiaries of the Parent Company:Primerica Financial Services,LLC(“PFS”),ourgeneral agency and marketing company;Primerica Life Insurance Company(“Primerica Life”),our principal life insuranceunderwriting company;P

109、FS Investments Inc.(“PFS Investments”),our investment and savings productscompany,broker-dealer and registeredinvestment advisor;ande-TeleQuote,a distributor of Medicare-related insurance products underwritten bythird-party health insurance carriers.Primerica Life is domiciled in Tennessee,and itswh

110、olly owned subsidiary,National Benefit LifeInsurance Company(“NBLIC”),is a NewYork-domiciled life insurance underwritingcompany.We conduct our core business activities inCanada through three principal entities,all ofwhich are indirect wholly owned subsidiaries ofthe Parent Company:Primerica Life Ins

111、urance Company ofCanada(“Primerica Life Canada”),ourCanadian life insurance underwritingcompany;PFSL Investments Canada Ltd.(“PFSLInvestments Canada”),our Canadianlicensed mutual fund dealer;andPFSL Fund Management Ltd.(“PFSL FundManagement”),our Canadian investmentfunds manager.Primerica was incorp

112、orated in the United Statesas a Delaware corporation in October 2009 toserve as a holding company for the Primericabusinesses(collectively,the“Company”).Exceptfor e-TeleQuote,our businesses(which prior toApril 1,2010 were wholly owned indirectsubsidiaries of Citigroup Inc.(“Citigroup”),weretransferr

113、ed to us by Citigroup on April 1,2010 ina reorganization pursuant to which wecompleted an initial public offering in April 2010(the“IPO”).On March 31,2010,we entered intocertain coinsurance transactions to cedebetween 80%and 90%of the risks and rewardsof our term life insurance policies that were in

114、force at year-end 2009.We administer allpolicies subject to these coinsuranceagreements.Our ClientsOur clients are generally middle-incomeconsumers,which we define as households with$30,000 to$100,000 of annual income.According to the 2021 U.S.Census BureauCurrent Population Survey,the latest period

115、 forwhich data is available,almost 50%of U.S.households fall in this range.We believe that weunderstand the financial needs of the middle-income segment,which include:Many have inadequate or no life insurancecoverage.Individual life insurance sales inthe United States declined from 12.9 millionpolic

116、y sales in 1975 to 9.8 million policysales in 2020,the latest period for whichdata is available,according to LIMRA,aworldwide association of insurance andfinancial services companies.We believethat term life insurance,which we haveprovided to middle-income clients for manyyears,is generally the best

117、 option for themto meet their life insurance needs.Many need help saving for retirement andother personal goals.Many middle-income families find it challenging to savefor retirement and other personal goals.Bydeveloping personalized savings programsfor our clients using our proprietary FNAand offeri

118、ng a wide range of mutual funds,annuities,managed investments andsegregated fund products sponsored andmanaged by established firms,independentsales representatives are well equipped tohelp clients develop long-term savingsplans to address their financial needs.Weallow our clients to establish month

119、lycontributions to investment savings planswith as little as$25 per month.2ITEM 1.BUSINESSMany need to reduce their debt.Manymiddle-income families have numerousdebt obligations from credit cards,autoloans,and home mortgages.We help ourclients address these financial burdens byproviding personalized

120、 and client-drivendebt resolution techniques.Many prefer to meet face-to-face whenconsidering financial products.Historically,many middle-income consumers haveindicated a preference to meet face-to-facewhen considering financial products orservices.As such,we have designed ourdistribution model to a

121、ddress thispreference in a cost-effective mannerthrough a network of more than 129,000 lifeinsurance-licensed independent salesrepresentatives.Due to the COVID-19pandemic,in-person meetings with clientswere limited during 2021.Our lifeinsurance-licensed independent salesrepresentatives have pivoted

122、to the use ofremote communication tools to readilymeet our clients desire for digital face-to-face meetings.Many need Medicare coverage as they reachthe age of eligibility.In 2021,there wereapproximately 62.7 million eligible Medicarebeneficiaries in the United States accordingto Kaiser Family Found

123、ation.The number ofsenior citizens above the age of 65continues to increase.According to theUnited States Census Bureau,approximately10,000 individuals turn 65 on a daily basis.As a result,the number of Medicare eligibleparticipants is expected to continue to growsignificantly.Many are looking to fi

124、nance the purchase ofa home or refinance an existingmortgage.Through refinancing amortgage loan,clients may be able tochange their interest rate or the term of theloan,obtain cash and/or consolidate debt.Our Distribution ModelOur distribution model is a modified traditionalinsurance agency model des

125、igned to reach andserve middle-income consumers efficientlythrough the independent sales force.Keycharacteristics of our unique distribution modelinclude:Independent entrepreneurs:Independentsales representatives are independentcontractors building and operating theirown businesses.This approach mea

126、ns thatindependent sales representatives areentrepreneurs who take responsibility forselling products,recruiting and developingother independent sales representatives,setting their own schedules and managingand paying the administrative expensesassociated with their sales activities.Low barriers to

127、entry:By offering a flexibletime commitment opportunity,we are ableto attract a significant number of recruitswho desire to earn supplemental incomeand generally concentrate on smaller-sizedtransactions typical of middle-incomeconsumers.Independent salesrepresentatives are able to start theirbusines

128、ses for low fees,for which theyreceive technological support,pre-licensingtraining and access to licensing examinationpreparation programs.Independent salesrepresentatives sell or refer productsdirectly to consumers,and therefore ourbusiness opportunity does not requirerecruits to purchase and resel

129、l our products.Most independent sales representativesbegin selling products on a part-time basis,which enables them to hold jobs whileexploring an entrepreneurial businessopportunity with us.Sales force leadership:An independentsales representative who has built asuccessful organization and has obta

130、inedhis or her life insurance and securitieslicenses can achieve the sales designation ofRegional Vice President(“RVP”),whichqualifies him or her for a higher commissionschedule.RVPs are independent contractorswho open and operate offices for their salesorganizations and devote their full-timeattent

131、ion to their businesses.RVPs alsosupport and monitor the independent salesPrimerica 2021 Annual Report3ITEM 1.BUSINESSrepresentatives,on whose sales they earncommissions,in achieving compliance withapplicable regulatory requirements.RVPsefforts to expand their businesses are aprimary driver of our s

132、uccess.Innovative compensation structure:Wehave developed an innovative system forcompensating the independent sales forcethat is contingent upon product sales.Weadvance to independent salesrepresentatives a significant portion of theirinsurance commissions,which are subject tochargebacks,upon their

133、 submission of aninsurance application and the first monthspremium payment.In addition to being asource of motivation,this advance providesindependent sales representatives withimmediate cash flow to offset their costs.Monthly production bonuses are also paidto RVPs whose sales organizations meetcer

134、tain sales levels.With compensationtied to sales activity,our approachaccommodates varying degrees ofindividual productivity,which allows us toeffectively use a large group of part-timeindependent sales representatives whileproviding a variable cost structure.Inaddition,we incentivize RVPs with quar

135、terlystock awards based largely on salesproduction(“agent equity awards”),whichaligns their interests with those of ourstockholders.Large,dynamic sales force:Members ofthe independent sales force primarily servetheir friends,family members and personalacquaintances through individually drivennetwork

136、ing activities.We believe that thiswarm market approach is an effective wayto distribute our product offerings becauseit facilitates face-to-face interaction initiatedby a trusted acquaintance of theprospective client,which is difficult toreplicate using other distributionapproaches.Due to the large

137、 size of theindependent sales force and the activerecruiting of new independent salesrepresentatives,the independent sales forceis able to continually access an expandingbase of prospective clients withoutengaging costly media channels.Motivational culture:In addition to themotivation for independen

138、t salesrepresentatives to achieve financial success,we seek to create a culture that inspires andrewards independent sales representativesfor their personal successes and those oftheir sales organizations throughindependent sales force recognition eventsand contests.We also use Intranet-streamed bro

139、adcasts and local,regional andnational meetings to inform and teachindependent sales representatives,as wellas facilitate camaraderie and the exchangeof ideas across the independent sales force.These initiatives encourage and empowerindependent sales representatives todevelop their own successful sa

140、lesorganizations.Inclusive culture:Building and maintainingan ethnically and demographically diverseindependent sales force is important to us,as we believe the independent sales forcereflects the middle market communities weserve.As the communities we serve becomemore diverse,the independent sales

141、forcedoes as well.Structure and Scalability of theIndependent Sales ForceNew independent sales representatives arerecruited by existing independent salesrepresentatives.When these new recruitsbecome independent sales representatives,theybecome part of the sales organization of theindependent sales r

142、epresentative who recruitedthem as well as the sales organizations to whichthe recruiting independent sales representativebelongs.We encourage independent salesrepresentatives to bring in new recruits to buildtheir own sales organizations,enabling theCompany to reach more middle-income families.RVPs

143、 establish and maintain their own offices,which we refer to as field offices.Additionally,they are responsible for funding the costs of4ITEM 1.BUSINESStheir administrative staff,marketing materials,travel,training and certain recognition events forthe independent sales representatives in theirrespec

144、tive sales organizations.Field officesprovide a location for independent salesrepresentatives to conduct recruiting meetings,training events and sales-related meetings,disseminate our Intranet-streamed broadcasts,conduct compliance functions,and house fieldoffice business records.Some business locat

145、ionshouse more than one field office.At December31,2021,approximately 5,900 field offices in3,100 locations were managed by independentsales representatives that served as RVPs.Sincethe onset of the COVID-19 pandemic,many in-person meetings and functions of field officeshave been performed using rem

146、otecommunication tools.RVPs play a major role intraining,motivating and monitoring theirindependent sales force organization.Because the independent sales representativescompensation grows with the productivity of hisor her sales organization,our distribution modelprovides financial rewards to indep

147、endent salesrepresentatives who successfully develop,support and monitor productive independentsales representatives.In addition to ourcommission structure,we offer the PrimericaOwnership Program.This program providesqualifying RVPs a contractual right,uponmeeting certain criteria,to transfer theirP

148、rimerica businesses to another RVP or aqualifying family member at such time as theydesire.Furthermore,we have developedproprietary tools and technology to enable RVPsto reduce the time spent on administrativeresponsibilities associated with their salesorganizations so they can devote more time toth

149、e sales,recruiting and training activities thatdrive our growth.We believe that our tools andtechnology,coupled with our salescompensation programs,further incentivizeindependent sales representatives to becomeRVPs.Both the structure of the independent salesforce and the capacity of our supportcapab

150、ilities provide us with a high degree ofscalability as we grow our business.Our supportsystems and technology are capable ofsupporting a large independent sales force anda high volume of transactions.In addition,bysharing training and compliance activities withRVPs,we are able to grow the Company wi

151、thoutincurring proportionate overhead expenses.Recruitment of Independent SalesRepresentativesThe recruitment of independent salesrepresentatives is undertaken by existingindependent sales representatives,who identifyprospects and share with them the benefits ofassociating with our organization.Inde

152、pendentsales representatives showcase the Company asdynamic and capable of improving the lives ofmiddle-income families.After the initial contact,prospective recruitstypically are invited to an opportunity meeting,conducted in person or through remotecommunication tools,which is conducted by anRVP.T

153、he objective of an opportunity meeting isto inform prospective recruits about our missionand their opportunity to start their ownbusinesses by becoming independent salesrepresentatives.At the conclusion of eachopportunity meeting,attendees who areinterested are asked to complete an applicationand pa

154、y a nominal fee to commence their pre-licensing training and licensing examinationpreparation programs and,depending on thestate or province,to cover their licensing examregistration costs,which are provided by theCompany generally at no additional charge.Recruits are not obligated to purchase any o

155、f theproducts we offer in order to becomeindependent sales representatives,though theymay elect to make such purchases.Recruits may become our clients or provide uswith access to their friends,family members andpersonal acquaintances.As a result,wecontinually work to improve our systematicapproach t

156、o recruiting and training newindependent sales representatives.Similar to other distribution systems that relyupon part-time independent salesrepresentatives and typical of the life insuranceindustry in general,we experience widePrimerica 2021 Annual Report5ITEM 1.BUSINESSdisparities in the producti

157、vity of individualindependent sales representatives.Many newrecruits do not get licensed,often due to thetime commitment required to obtain licensesand various regulatory and licensing hurdles.Many licensed independent sales representativesare only marginally active,as there are nominimum life insur

158、ance productionrequirements.As a result,we plan for thisdisparate level of productivity and view acontinuous recruiting cycle as a key componentof our distribution model.Our distributionmodel is designed to address the varyingproductivity associated with independent salesrepresentatives by paying pr

159、oduction-basedcompensation,emphasizing recruiting,anddeveloping initiatives to address barriers tolicensing new recruits.By providing commissionsto independent sales representatives on thesales generated by their sales organization,ourcompensation structure aligns the interests ofindependent sales r

160、epresentatives with ourinterests in recruiting new representatives andcreating sustainable sales production.The following table provides information on newrecruits and life insurance-licensed independentsales representatives:Year ended December 31,202120202019Number of new recruits349,374400,345282,

161、207Number of newly life insurance-licensed independent salesrepresentatives39,62248,10644,739Number of life insurance-licensed independent sales representatives,atperiod end129,515134,907(1)130,522Average number of life insurance-licensed independent salesrepresentatives during period131,315133,3021

162、30,370(1)Number of life insurance-licensed independent sales representatives,at December 31,2020 includes 3,597 temporarylicenses that were issued in response to the COVID-19 pandemic and 2,508 licenses that were extended due to theCOVID-19 pandemic.We define new recruits as individuals who havesubm

163、itted an independent business applicationto become independent sales representativestogether with payment of the nominal fee tocommence their pre-licensing training.Certainrecruits may not meet the compliance standardsto become an independent sales representative,and others elect to withdraw prior t

164、o becomingactively engaged.On average,it takes approximately three monthsfor independent sales representatives tocomplete the necessary applications and pre-licensing coursework and to pass the applicablestate or provincial examinations to obtain alicense to sell our term life insurance products.Cha

165、llenges associated with the COVID-19pandemic led to a temporary suspension ofin-person licensing preparation classes and thetemporary closing of examinations centers,bothof which led to representatives taking additionaltime to complete the licensing process in 2021.As a result,individuals recruited

166、to becomeindependent sales representatives within a givenfiscal period may not become licensedindependent sales representatives or meetcompliance standards until a subsequent period.Sales Force Motivation,Training,Communication and Sales SupportToolsMotivating,training and communicating with theinde

167、pendent sales force are critical to oursuccess and that of the independent sales force.Motivation.Through our proven system ofsales force recognition events,contests andcommunications,we provide incentives thatdrive our results.Motivation is driven largely byindependent sales representatives desire

168、toachieve higher levels of financial success bybuilding their own businesses.The opportunity6ITEM 1.BUSINESSto help underserved middle-income householdsaddress financial challenges is also a source ofmotivation for many independent salesrepresentatives.We motivate independent sales representativesto

169、 succeed in their businesses by:compensating independent salesrepresentatives for product sales or referralsmade by them and their sales organizations;training independent sales representativeson financial fundamentals so they canconfidently and effectively assist our clients;reducing the administra

170、tive burden on theindependent sales force,which allows themto devote more of their time to building asales organization and selling products;creating a culture in which independentsales representatives are encouraged toachieve goals through the recognition oftheir sales and recruiting achievements,a

171、swell as those of their sales organizations;andconducting numerous local,regional andnational meetings to help inform andmotivate the independent sales force.We have historically hosted a biennialinternational convention.In previous years,tensof thousands of independent salesrepresentatives,includin

172、g new recruits,haveattended our conventions and associatedmeetings at their own expense,which we believefurther demonstrates their commitment to ourorganization and mission.We plan to host ournext international convention and associatedmeetings in June 2022 at the Mercedes-BenzStadium in Atlanta,Geo

173、rgia.Training,Communication and Sales SupportTools.Primerica Online(“POL”),deliveredthrough a secure Intranet website and a cross-platform mobile application(“Primerica App”),isour primary tool designed to supportindependent sales representatives and assistthem in building their own businesses.Wepro

174、vide independent sales representatives withcommunication,training,and sales support toolson POL that allow both new and experiencedsales representatives to offer financialinformation and products to our clients.POLprovides independent sales representatives withaccess to various business tracking and

175、management tools,licensing support tools,product-specific training,and sales proceduresand tools.Additionally,POL provides access tointernal training programs and videos coveringsales,management skills,business ownership,and compliance.We also use POL to providereal-time recognition of independent s

176、alesrepresentatives successes and scoreboards forindependent sales force production,contests,and incentive trips.In addition,POL is a gatewayto our product providers and product support.Subscribers generally pay a small monthly fee tosubscribe to POL,which helps cover the cost ofdeveloping new resou

177、rces and maintaining thissupport system.A limited version of POL thatprovides access to Primerica e-mail,complianceand compensation information,newsletters andbulletins is available at no cost.The primary features and tools available on POLinclude:Training and Licensing Tools:POLprovides independent

178、 sales representativeswith access to study tools for life insuranceand securities licensing examinations suchas pre-licensing study materials,on-demandvideos,personalized licensing study plans,exam simulators,progress tracking,andexam and license registration.POL alsoprovides training materials and

179、access toobtain online certifications to sell certainother distributed products.Communication Tools:POL providesaccess to marketing materials for ourproduct offerings,Company news andevents,live streaming shows,on-demandvideos,home office bulletins,Primerica e-mail,contact lists,and a hosted profess

180、ionalbusiness website for independent salesrepresentatives.We broadcast and delivervideo content on POL through our owndigital video channel,PFN TV.We createoriginal broadcasts and videos that enablehome office management to providebusiness updates to the independent salesPrimerica 2021 Annual Repor

181、t7ITEM 1.BUSINESSforce as well as training and motivationalpresentations.We broadcast live programshosted by home office management andselected RVPs that focus on newdevelopments and provide motivationalmessages to the independent sales force.We also broadcast training-orientedprograms to the indepe

182、ndent sales force ona weekly basis and profile successfulindependent sales representatives,allowingthese individuals to educate and train otherindependent sales representatives bysharing their methods for success.SalesSupport and Client Management Toolsoffered through POL:Our Financial Needs Analysi

183、s:Our FNAis a proprietary,needs-based analysistool.The FNA gives independent salesrepresentatives the ability to collect andsynthesize client financial data anddevelop a financial analysis for the clientthat is easily understood.The FNA helpsour clients understand their financialneeds in the areas o

184、f debt,financialprotection,and savings as well asintroduces prudent financial concepts,such as regular saving and acceleratingthe repayment of high cost credit carddebt,to help them reach their financialgoals.The FNA also provides clients witha snapshot of their current financialposition and identif

185、ies their lifeinsurance,savings and debt resolutionneeds.Our Point-of-Sale Application Tool:Ourpoint-of-sale technology,TurboApps,streamlines the application process forour insurance and investment products.These applications automaticallypopulate client information from theFNA to eliminate redundan

186、t datacollection and provide real-timefeedback to eliminate incomplete andillegible applications.Integrated with ourpaperless field office managementsystem described below and with ourhome office systems,TurboApps allowsRVPs and us to realize the efficiencies ofstraight-through-processing ofapplicat

187、ion data and other informationcollected on independent salesrepresentatives mobile devices,whichresults in expedited processing ofproduct sales.TurboApps also featuresEZ-Key,which is a tool that helpsindependent sales representatives guideclients through the investment decisionprocess and ultimately

188、 providesinvestment alternatives based on theclients individual situation.TurboApps isavailable on the independent salesrepresentatives portal,POL and ourmobile platform,the Primerica App.Primerica App:The mobile PrimericaApp platform has experienced broadadoption and provides the independentsales f

189、orce with access to the criticalcomponents needed to start,build andmaintain their businesses.Wecontinually enhance and expand thescope and resources available in thisstrategic platform.Virtual Base Shop:In an effort to easethe administrative burden on RVPs andsimplify independent sales forceoperati

190、ons,we make available to RVPs asecure Intranet-based paperless fieldoffice management system as part of thePOL subscription.This virtual office isdesigned to automate the RVPsadministrative responsibilities and canbe accessed by subscribing independentsales representatives in an RVPsimmediate sales

191、organization,which werefer to as his or her base shop.Shareholder Account Manager(“SAM”):SAM is a web-based tool thatallows securities-licensed independentsales representatives to service clientinvestments in mutual funds accessedthrough our transfer agentrecordkeeping platform.Client Relationship M

192、anager(“CRM”):Our CRM tool allowsindependent sales representatives andtheir RVPs to organize client information,such as personal contact information,8ITEM 1.BUSINESSproduct relationships,account details,notes,appointments,follow-ups,andmarketing campaigns,in one place toenable fast and convenient ac

193、cess formanaging client relationships.In addition,our publications departmentproduces materials to support,motivate andinform the independent sales force.We sellrecruiting materials,sales brochures,businesscards and stationery and providecommunications services that include webdesign,print presentat

194、ions,graphic design andscript writing.We also produce a weekly mailingthat includes materials promoting our currentincentives,as well as the latest news about ourproduct offerings.Performance-Based CompensationStructureOur commission structure is rooted in our originas an insurance agency.Sales repr

195、esentatives,who are independent contractors,can receivecompensation in multiple ways,including:sales commissions and fees based on theirpersonal sales,referrals,and client assetsunder management;sales commissions based on sales andreferrals by independent salesrepresentatives in their sales organiza

196、tionsand fees based on client assets undermanagement in their sales organizations;andbonuses and other compensation,includingagent equity awards,generated by theirown sales performance,the aggregate salesperformance of their sales organizationsand other criteria.Our compensation structure pays commi

197、ssionsto the independent sales representative whosells the product and to several representativesabove the selling representative within theirsales organization.With respect to term life insurance sales,commissions are calculated based on the totalfirst-year premium(excluding the policy fee)forall p

198、olicies and riders.To motivate theindependent sales force,we compensateindependent sales representatives for term lifeinsurance product sales as quickly as possible.We advance a majority of the insurancecommission upon the submission of acompleted application and the first monthspremium payment.As t

199、he client makes his or herpremium payments,the commission is earnedby the independent sales representative and thecommission advance is recovered by theCompany.If premium payments are not madeby the client and the policy terminates,anyoutstanding advance commission is chargedback to the independent

200、sales representative.The chargeback,which only occurs in the firstyear of a policy,equals that portion of theadvance that was made,but not earned,by theindependent sales representative because theclient did not pay the full premium for theperiod of time for which the advance was madeto the independe

201、nt sales representative.Chargebacks,which occur in the normal courseof business,may be recovered by reducing anycash amounts otherwise payable by theCompany to the independent salesrepresentative.Independent sales representatives andrepresentatives above them in their salesorganizations are contract

202、ually obligated torepay us any commission advances that areultimately not earned due to the underlyingpolicy lapsing prior to the full commission beingearned.Additionally,we hold back a portion ofthe commissions earned by independent salesrepresentatives as a reserve out of which we mayrecover charg

203、ebacks.The amounts held back arereferred to as deferred compensation accountcommissions(“DCA commissions”).DCAcommissions are available to reduce amountsowed to the Company by independent salesrepresentatives and they provide anindependent sales representative with a cushionagainst the chargeback ob

204、ligations ofrepresentatives in their sales organization.DCAcommissions,unless applied to amounts owed,are ultimately released to independent salesrepresentatives.Primerica 2021 Annual Report9ITEM 1.BUSINESSWe pay most term life insurance commissionsduring the first policy year.One of our termriders

205、provides for coverage increases after thefirst year.For such riders,we pay first-year andrenewal commissions only for premiumincreases related to the increased coverage.Additionally,we pay renewal commissions onsome older in-force policies.At the end of apolicys level premium paying period,we paycom

206、missions on policy exchanges and bonuseson some policy exchanges and continuations.We also pay bonuses as a percentage ofpremiums to RVPs with respect to sales of termlife policies and riders,up to a maximumpremium.Bonuses are paid to RVPs forachieving specified production levels.For most mutual fun

207、ds(non-managedinvestments)and annuity products,commissionsare paid both on the sale and on the value ofassets under management.Commissions arecalculated based on the dealer reallowance andtrail compensation actually paid to us.Formanaged investment products,fees earned arebased on the assets under m

208、anagement andrepresent the fee we receive as compensationfor as long as we retain the account.For ourCanadian segregated fund investment products,we pay independent sales representatives a salescommission based on the amount invested anda monthly fee based on clients asset values.Primerica compensat

209、es Primerica Senior Healthcertified independent sales representatives withfees for services provided,including educationand related services associated with introducingseniors to e-TeleQuote.We also pay the independent sales force withrespect to mortgage originations,sales ofprepaid legal services s

210、ubscriptions,and referralsfor customers purchasing other distributedproducts.Mortgage originations compensationpaid to the independent sales force is earned foreach closed mortgage loan based on apercentage of the loan amount.Prepaid legalservices commissions paid to the independentsales force are e

211、arned in fixed amounts on amonthly basis as long as the prepaid legalservice subscription remains active.Commissionsrelated to other distributed products arecalculated based on the type of product sold orreferred.In addition to these methods of compensation,RVPs can earn quarterly agent equity award

212、sbased largely on sales production.Sales Force Licensing and SupportThe states,provinces and territories in whichindependent sales representatives operategenerally require them to obtain and maintainlicenses to sell our insurance and securitiesproducts,which requires them to pass applicableexaminati

213、ons.Independent sales representativesmay also be required to maintain licenses to sellcertain of our other distributed products.Toencourage new recruits to obtain their lifeinsurance licenses,we either pay directly orreimburse the independent sales representativefor certain licensing-related fees an

214、d expensesonce he or she passes the applicable exam andobtains the applicable life insurance license.Inaddition,new recruits are eligible to earncompensation if they participate in field trainingobservations with experienced independentsales representatives and complete the licensingprocess within a

215、 specified timeframe.To sellinsurance products,independent salesrepresentatives must be licensed by theirresident state,province or territory and by anyother state,province or territory in which theydo business.In most states,independent salesrepresentatives must also be appointed by ourapplicable i

216、nsurance subsidiary.Our in-houselife insurance licensing program offers newrecruits a significant number of classroom lifeinsurance pre-licensing courses to meetapplicable state and provincial licensingrequirements and prepares recruits to passapplicable licensing exams.To sell mutual funds and vari

217、able annuityproducts,U.S.sales representatives must beregistered with the Financial Industry RegulatoryAuthority(“FINRA”)and hold the appropriatelicense(s)designated by each state in which theysell securities products,as well as be appointedby the annuity underwriter in the states in which10ITEM 1.B

218、USINESSthey market annuity products.Salesrepresentatives must meet all state and federalregulatory requirements and be designated asan investment advisor representative in order tosell our managed investment products.Wecontract with third-party training firms toconduct securities license exam prepar

219、ation forsales representatives,and we also offersupplemental training tools.Canadian independent sales representativesselling mutual fund products are required to beregistered by the securities regulators in theprovinces and territories in which they sellmutual fund products.Canadian independentsale

220、s representatives who are licensed to sell ourinsurance products do not need any furtherlicensing to sell our segregated funds products.In most states,Primericas independent salesrepresentatives can become Senior Healthcertified by completing an internal training andcertification process.Upon comple

221、tion of thecertification process,Primericas independentsales representatives may educate eligibleparticipants about senior health,refer them toan e-TeleQuote licensed health insurance agentand provide certain other related services.To offer mortgage loan products in the UnitedStates,independent sale

222、s representatives mustbe individually licensed as mortgage loanoriginators by the states in which they dobusiness and,in some states,they must also beindividually licensed as mortgage brokers.For sales of our other distributed products,appropriate state,provincial and territoriallicensing may be req

223、uired.Supervision and ComplianceTo ensure compliance with various federal,state,provincial and territorial legal requirements,weand the RVPs share responsibility formaintaining an overall compliance program thatinvolves compliance training and supporting aswell as monitoring the activities of indepe

224、ndentsales representatives.We work with the RVPs todevelop and maintain appropriate complianceprocedures and systems.Generally,RVPs must obtain a principal license(FINRA Series 26 in the United States and BranchManager license in Canada),and,as a result,they assume additional regulatory responsibili

225、tyover the activities of their sales organizations.Additional supervision is provided by designatedprincipal-licensed home office personnel,referred to as Regional Securities Principals(“RSPs”).RSPs are required to supervise andmonitor activity across all product lines andreport any compliance issue

226、s they observe toour Compliance Department.In addition,ourCompliance Department regularly runssurveillance reports designed to monitor theactivity of the independent sales force andinvestigates any unusual or suspicious activityidentified during these reviews or duringperiodic inspections of RVP off

227、ices.All independent sales representatives arerequired to participate,in person or throughremote communication tools,in our annualcompliance meeting,a program administered byour senior management and our legal andcompliance staff.We provide a compliancetraining overview across all product lines andr

228、equire the completion of compliance checklistsby each licensed independent salesrepresentative for each product he or she offers.Additionally,independent sales representativesreceive periodic compliance communications,both in writing and through videos,regardingnew compliance developments and busine

229、ssissues of significance.Our Field Audit Department regularly conductsaudits of all sales representative offices,including scheduled and no-notice audits whenfeasible.Our Field Audit Department reviewsregulatory-required records that are notmaintained at our home office.Any compliancedeficiencies no

230、ted in the audit must becorrected,and we carefully monitor all correctiveaction.Audit deficiencies are addressed throughreprimands,probations and contractterminations.Senior Health DistributionIn the United States,our subsidiary e-TeleQuotedistributes Medicare-related insurance productsPrimerica 202

231、1 Annual Report11ITEM 1.BUSINESSto eligible Medicare participants and enrollsthem in coverage utilizing e-TeleQuotes team oflicensed health insurance agents.e-TeleQuoteslicensed health insurance agents are employeesof the Company.These licensed health insuranceagents utilize e-TeleQuotes proprietary

232、technology,including telephony,relationshipmanagement,lead analytics,and plancomparison tools,to enroll participants ineligible Medicare plans.e-TeleQuotes licensed health insurance agentsare full-time employees who are motivatedthrough compensation systems that trackperformance and reward them acco

233、rdingly.Thiscompensation system includes an hourly wageplus an incentive compensation componentdepending on the individual sales performanceand key performance indicators,which includepolicy retention.We provide sales supportthrough the sourcing and screening of leads,allowing our agents to maximize

234、 time spent withpotential enrollees,as well as throughproprietary technology that providesrelationship management,lead analytics,andplan comparisons for licensed health insuranceagents to facilitate the enrollment of participantsin eligible Medicare plans.e-TeleQuote managesthe licensing,certificati

235、on and training processthrough its dedicated health insurance licensingteam and technology platform for regulatoryadherence.Continuing education is providedannually to ensure that our licensed healthinsurance agents are up to date with carrierupdates,compliance and technology.In order to market Medi

236、care insurance products,e-TeleQuotes licensed health insurance agentsare required to hold a state issued license tomarket health insurance products within thatstate.Each agent holds a resident license fromthe state in which they are based and acquiresnon-resident licenses for each of the other state

237、sin which they conduct business.In order toobtain an initial resident license,prospectivee-TeleQuote licensed health insurance agentsare required to complete online or classroomtraining and pass a comprehensive statelicensing exam covering health insuranceproduct features and benefits,risk managemen

238、tand health insurance regulations.Non-residentlicenses are issued by states on the basis ofreciprocity as long as the agent is in goodstanding with their resident state,as well asupon payment of a license fee.Once licensed to sell health insurance by thestate agencies,e-TeleQuotes licensed healthins

239、urance agents need to be certified annuallyby each carrier to sell their products.State lawmay also require agents to be appointed byeach carrier as the carriers agent.Suchcertification involves online classes and testingfor subject matters like the basics of Medicare,fee-for-service plan eligibilit

240、y and benefits,different types of plans,enrollment processesand requirements,marketing compliance,anti-money laundering,fraud,waste and abusedetection and reporting.The certificationprocess can take up to 40 hours of classes andtesting before an agent will be allowed to sellMedicare plans.e-TeleQuot

241、e has developed an internalregulatory compliance system that tracksrequirements for agent licensing,agentcontinuing education,agent appointment bycarrier,carrier mandated certifications andCenters for Medicare and Medicaid Services(“CMS”)mandated certifications.e-TeleQuotescompliance officer manages

242、,implements,andoversees all aspects of agent compliance,including the quality assurance testing of salescalls.Our Product OfferingsReflecting our philosophy of helping middle-income clients with their financial services needsand ensuring compatibility with our distributionmodel,our product offerings

243、 generally meet thefollowing criteria:Consistent with sound individual financeprinciples:Products must be consistentwith good personal finance principles formiddle-income consumers,such as financialprotection,encouraging long-term savingsand reducing debt.Designed to support multiple clientgoals:Pro

244、ducts are designed to addressand support a broad range of financial12ITEM 1.BUSINESSgoals rather than compete with orcannibalize each other.For example,termlife insurance does not compete withmutual funds because term life insurancehas no cash value or investment element.Ongoing needs based:Products

245、 aregenerally designed to memuet the ongoingfinancial needs of many middle-incomeconsumers.This long-term approachbolsters our relationship with our clients byallowing us to continue to serve them astheir financial needs evolve.We use four operating segments to organize,evaluate and manage our busin

246、ess:Term LifeInsurance;Investment and Savings Products;Senior Health;and Corporate and OtherDistributed Products.The following table provides information on ourprincipal product offerings and the principalsources thereof by operating segment as ofDecember 31,2021.Operating SegmentPrincipal Product O

247、fferingsPrincipal Sources of Products(Applicable Geographic Territory)Term Life InsuranceTerm Life InsurancePrimerica Life(U.S.(except New York),theDistrict of Columbia and certain territories)NBLIC(New York)Primerica Life Canada(Canada)Investment and SavingsProductsMutual Funds and CertainRetiremen

248、t PlansAmerican Century Investments(U.S.)American Funds(U.S.)Equitable Distributors,LLC(U.S.)Franklin Templeton Investments(U.S.andCanada)VOYA Financial,Inc.(U.S.)Invesco(U.S.and Canada)AGF Investments(Canada)PFSL Fund Management Ltd.(Canada)Mackenzie Investments(Canada)Fidelity Investments(U.S.and

249、Canada)Managed InvestmentsPFS Investments(dba Primerica Advisors)(as aprogram sponsor)(U.S.)Variable AnnuitiesAmerican General Life Insurance Company andits affiliates(U.S.)Equitable Distributors,LLC(U.S.)Brighthouse Financial,Inc.(U.S.)Lincoln National Life Insurance Company andits affiliates(U.S.)

250、Fixed Indexed AnnuitiesAmerican General Life Insurance Company andits affiliates(U.S.)Lincoln National Life Insurance Company andits affiliates(U.S.)Universal Life Insurance Company(Puerto Rico)Fixed AnnuitiesUniversal Life Insurance Company(Puerto Rico)Employer SponsoredRetirement PlansAmerican Fun

251、ds(U.S.)Equitable Distributors,LLC(U.S.)VOYA Financial,Inc.(U.S.)Segregated FundsPrimerica Life Canada(Canada)Senior HealthMedicare Advantage andMedicare SupplementHumana,Inc.(U.S.)UnitedHealth Group,Inc.(U.S.)Cigna,Inc.(U.S.)Mutual of Omaha(U.S.)Centene Corporation(U.S.)Anthem,Inc.(U.S.)Primerica 2

252、021 Annual Report13ITEM 1.BUSINESSOperating SegmentPrincipal Product OfferingsPrincipal Sources of Products(Applicable Geographic Territory)Corporate and OtherDistributed ProductsMortgage Loans(1)(2)Rocket Mortgage,LLC(U.S.)Edison Financial ULC(Canada)8Twelve Mortgage Corp.(Canada)Prepaid Legal Serv

253、icesLegalShield(U.S.and Canada)ID Theft DefenseLegalShield(U.S.and Canada)Supplemental Health andAccidental Death&Disability InsuranceThe Edge Benefits Inc.and its affiliates(Canada)Auto and HomeownersInsurance(2)Various insurance companies,as offeredthrough Answer Financial,Inc.(U.S.)SurexD Ltd.(Ca

254、nada)Home AutomationSolutions(2)Vivint,Inc.(U.S.)and Vivint Canada,Inc.(Canada)(1)In the U.S.,mortgage loans are made by Rocket Mortgage,LLC.In Canada,representatives refer mortgage loans to EdisonFinancial ULC(a subsidiary of Rocket Companies,Inc.)and 8Twelve Mortgage Corp.(2)In Canada,referrals on

255、ly.Term Life InsuranceThrough our three life insurance subsidiaries Primerica Life,NBLIC and Primerica Life Canada we offer term life insurance to clients in theUnited States,its territories,the District ofColumbia and Canada.In 2020,the latest periodfor which data is available from LIMRA,weranked a

256、s a leading provider of individual termlife insurance in the United States.We believe that term life insurance is generally abetter alternative for middle-income clients thancash value life insurance.Term life insuranceprovides a guaranteed death benefit if theinsured dies during the fixed coverage

257、period ofan in-force policy,thereby providing financialprotection for his or her named beneficiaries inreturn for the periodic payment of premiums.Term insurance products,which are sometimesreferred to as pure protection products,have nosavings or investment features.By buying termlife insurance rat

258、her than cash value lifeinsurance,a policyholder initially pays a lowerpremium and,as a result,may have fundsavailable to invest for retirement and otherneeds.We also believe that a persons need forlife insurance is inversely proportional to thatpersons need for retirement savings,a conceptwe refer

259、to as the theory of decreasingresponsibility.Young adults with children,newmortgages and other obligations need to buyhigher amounts of insurance to protect theirfamily from the loss of future income resultingfrom the death of a primary bread winner.Withits lower initial premium,term life insurance

260、letsyoung families buy more coverage for theirpremium dollar when their needs are greatestand still have the ability to have funds for theirretirement and other savings goals.We design our term life insurance products tobe easily understood by,and meet the needs of,our clients.Clients purchasing our

261、 term lifeinsurance products generally seek stable,longer-term income protection products for themselvesand their families.In response to this demand,we offer term life insurance products with initiallevel-premium coverage periods that range from10 to 35 years and a wide range of coverageface amount

262、s.Policies remain in force untilexpiration or until the policyholder ceases tomake premium payments and terminates thepolicy.Our in-force term life insurance policieshave level premiums for the stated term period.As such,the policyholder pays the same amounteach year.After the initial policy term,th

263、epolicyholder has the option to continuecoverage or by renewing or converting theircontract.Both options result in higher premiumsdue to the policyholders attained age.14ITEM 1.BUSINESSOne of the innovative term life insuranceproducts that we offer is TermNow,our rapidissue term life product that pr

264、ovides for faceamounts of up to$300,000(local currency).TermNow allows an independent salesrepresentative to submit an application viaTurboApps and,with the clients permission,allows the Company to access databases,including Medical Information Bureau(“MIB”)data in the United States and Canada andpr

265、escription drug,clinical lab,motor vehicle,andcriminal records in the United States,as part ofthe underwriting process.The Company usesthis data and the clients responses toapplication questions to determine anyadditional underwriting requirements.Results ofthese processes are reported in real time

266、to ourunderwriting system,which then determineswhether or not we can rapidly issue a policy.The average face amount of our in-force policiesissued in 2021 was approximately$251,500.Thefollowing table sets forth selected informationregarding our term life insurance productportfolio:Year ended Decembe

267、r 31,202120202019Life insurance issued:Number of policies issued323,855352,868287,809Face amount issued(in millions)$108,521$109,436$93,994December 31,202120202019Life insurance in force:Number of policies in force2,885,9632,787,9922,641,483Face amount in force(in millions)$903,404$858,818$808,262Pr

268、icing and Underwriting.We believe thateffective pricing and underwriting are significantdrivers of the profitability of our life insurancebusiness and we have established our pricingassumptions to be consistent with ourunderwriting practices.We set pricingassumptions for expected claims,lapses andex

269、penses based on our experience and otherfactors while also considering the competitiveenvironment.These other factors include:expected changes from relevant experiencedue to changes in circumstances,such as(i)revised underwriting procedures affectingfuture mortality and reinsurance rates,(ii)new pro

270、duct features,and(iii)revisedadministrative programs affecting saleslevels,expenses,and client continuation ortermination of policies;andobserved trends in experience that weexpect to continue,such as generalmortality changes in the general populationand better or worse policy persistency(theperiod

271、over which a policy remains in force)due to changing economic conditions.Under our current underwriting guidelines,weindividually assess each insurable adult applicantand place each applicant into a risk classificationbased on current health,medical history,andother risk factors.Each classification(

272、generallypreferred plus,preferred,non-tobacco andtobacco)has specific criteria.We may decline anapplicants request for coverage if his or herhealth or activities create unacceptable risks.Independent sales representatives ask applicantsa series of questions regarding the applicantsmedical history.We

273、 may also considerinformation about the applicant from third-partysources,such as the MIB,prescription drugdatabases,motor vehicle records and physicianstatements.If we believe that further informationregarding an applicants medical history isnecessary,we use a third-party provider and itstrained pe

274、rsonnel to contact the applicant bytelephone to obtain a more detailed medicalPrimerica 2021 Annual Report15ITEM 1.BUSINESShistory.The report resulting from this process iselectronically transmitted to us and is evaluatedin our underwriting process.Paramedicalrequirements are also normally required

275、onapplicants applying for Custom Advantage,ourtraditionally-underwritten term life product.To accommodate the significant volume ofinsurance business that we process,we and theindependent sales force use specializedtechnology.We offer independent salesrepresentatives an electronic life insuranceappl

276、ication that supports term life insuranceproducts.Approximately 97%of the lifeinsurance applications we received in 2021 weresubmitted electronically via TurboApps.Independent sales representatives may utilizevideo collaboration tools to assist with thecompletion of the life insurance application an

277、dsubmit completed applications throughTurboApps.The majority of applicationscompleted in 2021 resulted from remotemeetings with applicants.Our electronic lifeinsurance application reduces errors insubmitted applications,collects the applicantselectronic signatures and populates the RVPssales log.Onc

278、e an application is complete,thepertinent application data is uploaded to our lifeinsurance administrative systems,which managethe underwriting process by electronicallyanalyzing data,recommending underwritingdecisions,identifying requirements for higherface amounts or older ages and communicatingwi

279、th the independent sales representative andthird-party service providers.Claims Management.Our insurancesubsidiaries processed over 22,300 life insurancebenefit claims in 2021 on policies underwrittenby us and sold by independent salesrepresentatives.In 2021,we continued toexperience elevated claims

280、 volumes due topremature deaths of our insureds caused by theCOVID-19 pandemic.For additional informationregarding the impact of COVID-19 on our claimsexpense,the related reinsurance effects,andpolicyholder persistency,see“Item 7.Managements Discussion and Analysis ofFinancial Condition and Results

281、of Operations”included elsewhere in this report.Claims fall into three categories:death,waiver ofpremium(applicable to disabled policyholderswho purchased this benefit for which we agreeto waive life insurance premiums during aqualifying disability),or terminal illness.Theclaim may be reported by an

282、 independent salesrepresentative,a beneficiary or,in the case ofqualifying disability or terminal illness,thepolicyholder.Following are the benefits paid byus for each category of claim:Year ended December 31,202120202019(In thousands)Death$2,245,614$1,676,017$1,447,375Waiver ofpremium54,46551,82349

283、,712Terminalillness(1)11,63511,50114,584(1)We consider claims paid for terminal illness to be loansmade to the policyholder that are repaid to us from thedeath benefit upon the death of the insured.In the United States,after coverage has been inforce for two years,we may not contest thepolicy for mi

284、srepresentations in the application.The contestability period for suicide of theinsured is one to two years depending on stateregulation.In Canada,we have a similartwo-year contestability period,but we arepermitted to contest insurance fraud at any time.As a matter of policy,we do not contest anycov

285、erage issued by us to replace the faceamount of another insurance companysindividual coverage to the extent the replacedcoverage would not be contestable by thereplaced company.We believe this approachhelps independent sales representatives sellreplacement policies,as it reassures clients thatclaims

286、 made under their replacement policiesare not more likely to be contested as to theface amount replaced.Through our claimsadministration system,we record,process andpay the appropriate benefit for any reportedclaim.Our claims system is used by our homeoffice claims adjusters to order medical andinve

287、stigative reports from third-party providers,calculate amounts due to the beneficiary(including interest),and report payments to theappropriate reinsurance providers.16ITEM 1.BUSINESSPrimerica Life and NBLIC regularly consult theSocial Security Administrations Death MasterFile in accordance with app

288、licable staterequirements.These processes help identifypotential deceased insureds for whom claimshave not been presented in the normal course ofbusiness.If unreported deaths are identified,Primerica Life and NBLIC attempt to determine ifa valid claim exists,to locate beneficiaries,andto pay benefit

289、s accordingly.Reinsurance.We use reinsurance primarily toreduce the volatility risk with respect tomortality.Since 1994,we have reinsured deathbenefits in the United States on a first dollarquota share yearly renewable term basis.Since2012,we have reinsured death benefits inCanada on a first dollar

290、quota share yearlyrenewable term basis.We pay premiums to eachreinsurer based on rates in the applicableagreement.We generally reinsure between 80%and 90%ofthe mortality risk for all term life insurancepolicies,excluding coverage under certain riders.We also reinsure substandard cases on afacultativ

291、e basis to capitalize on the extensiveexperience some of our reinsurers have withsubstandard cases.A substandard case has alevel of risk that is acceptable to us,but athigher premium rates than a standard casebecause of the health,habits or occupation ofthe applicant.While most of our reinsurance ag

292、reements haveindefinite terms,both we and our reinsurers areentitled to discontinue any reinsuranceagreement as to future policies by givingadvance notice of 90 days to the other.Eachreinsurers ability to terminate coverage forexisting policies is limited to circumstances suchas a material breach of

293、 contract or nonpaymentof premiums by us.Each reinsurer has the rightto increase rates with certain restrictions.If areinsurer increases rates,we have the right toimmediately recapture the business.Either partymay offset any balance due from the other party.For additional information on our reinsura

294、nce,see Note 1(Description of Business,Basis ofPresentation,and Summary of SignificantAccounting Policies)and Note 6(Reinsurance)toour consolidated financial statements includedelsewhere in this report.Financial Strength Ratings.Ratings withrespect to financial strength are an importantfactor in est

295、ablishing our competitive positionand maintaining public confidence in us and ourability to market products.Ratings organizationsreview the financial performance and conditionof most insurers and provide opinions regardingfinancial strength,operating performance andability to meet obligations to pol

296、icyholders.Foradditional information,see“Item 7.Managements Discussion and Analysis ofFinancial Condition and Results of Operations Liquidity and Capital Resources FinancialRatings.”Investment and Savings ProductsWe believe that many middle-income familieshave significant unmet retirement and saving

297、sneeds.Independent sales representatives helpour clients understand their current financialsituations and how they can use time-testedfinancial principles,such as prioritizing personalsavings,to reach their savings goals.Ourproduct offerings include saving and investmentvehicles that seek to meet th

298、e needs of clients inall stages of life.Through PFS,PFS Investments,Primerica LifeCanada,PFSL Investments Canada,and licensedsales representatives,we distribute and sell toour clients a variety of mutual funds,managedinvestments,variable,index-linked,and fixedannuities,fixed indexed annuities andseg

299、regated funds.As of December 31,2021,approximately 26,286 sales representatives werelicensed to distribute mutual funds in the UnitedStates(including Puerto Rico)and Canada.As ofDecember 31,2021,approximately 13,775 salesrepresentatives were licensed and appointed todistribute annuities in the Unite

300、d States andapproximately 11,503 sales representatives werelicensed to sell segregated funds in Canada.Mutual Funds.In 2021,in the United States,licensed sales representatives primarily distributemutual funds from the following select assetmanagement firms:Franklin Templeton,Invesco,Primerica 2021 A

301、nnual Report17ITEM 1.BUSINESSFidelity,American Funds,and American CenturyInvestments.These firms have diversifiedproduct offerings,including domestic andinternational equity,fixed-income and moneymarket funds.Each firm continually evaluates itsfund offerings and adds new funds on a regularbasis.Addi

302、tionally,their product offerings reflectdiversified asset classes and varied investmentstyles.We have selling agreements with anumber of other fund companies,and webelieve that,collectively,these assetmanagement firms provide funds that meet theinvestment needs of our clients.During 2021,Franklin Te

303、mpleton,Invesco,American Funds and Fidelity accounted forapproximately 98%of our mutual fund sales inthe United States.Franklin Templeton andInvesco each have large wholesaling teams thatsupport the sales force in distributing theirmutual fund products.Our selling agreementswith these firms all have

304、 indefinite terms andprovide for termination at will.A wholly owned indirect subsidiary of the ParentCompany and affiliate of PFS Investments,Primerica Shareholder Services,Inc.(“PSS”),provides transfer agent recordkeeping servicesto investors who purchase shares of mutualfunds offered by certain of

305、 our fund familiesthrough PFS Investments.In exchange for theseservices,PSS receives recordkeeping andaccount maintenance fees from the applicablefund company.PSS has retained BNY MellonAsset Servicing to perform the necessary transferagent recordkeeping services for these accountson its proprietary

306、 SuRPAS system.PFSInvestments serves as the Internal RevenueService(“IRS”)approved non-bank custodian forcustomers that open individual retirementaccounts(“IRAs”)(or certain other retirementaccounts)with PFS Investments and invest inshares of mutual funds offered by certain of ourfund families.For t

307、hese services,PFS Investmentsreceives an annual custodian fee.In Canada,sales representatives offer Primerica-branded ConcertTMSeries funds,whichaccounted for approximately 17%of ourCanadian mutual fund product sales in 2021.Our ConcertTMSeries funds consist of fivedifferent asset allocation funds a

308、nd a moneymarket fund with varying investment objectives.Each ConcertSeries fund is a money marketfund and a fund of funds that allocates fundassets among equity,income and money marketmutual funds of AGF Investments,a leadingasset management firm in Canada.The assetallocation within each ConcertSer

309、ies fund isdetermined on an advisory contract basis byLifeWorks Investment Management Ltd.Theprincipal non-proprietary funds that we offer ourclients in Canada are funds of AGF Investments,Fidelity Investments,Mackenzie Investments andInvesco.Sales of these non-proprietary fundsaccounted for approxi

310、mately 82%of mutualfund product sales in Canada in 2021.Like ourU.S.fund family list,the asset managementpartners we have chosen in Canada have adiversified offering of equity,fixed-income andmoney market funds,including domestic andinternational funds with a variety of investmentstyles.As a result

311、of certain Canadian regulatorychanges that will be effective in June 2022,wewill be modifying our investments businessmodel in Canada.For further details of theseregulatory changes,refer to the“RegulatoryChanges”section in“Item 7.ManagementsDiscussion and Analysis of Financial Conditionand Results o

312、f Operations”.A key part of our investment philosophy for ourclients is the long-term benefits of dollar costaveraging through systematic investing.Toaccomplish this,we assist our clients byfacilitating monthly contributions to theirinvestment account by bank draft against theirchecking accounts for

313、 as little as$25 per month.During the year ended December 31,2021,average client assets held in individualretirement accounts in the United States andCanada accounted for an estimated 74%and66%of total average client account assets,respectively.The Canadian counterpart to ourIRAs are Registered Reti

314、rement Savings Plans(“RRSPs”).RRSPs and IRAs behave similarly,providing up-front tax deductions oncontributions and enabling clients to earnincome on a tax-deferred basis.Our highconcentration of retirement plan accounts andour systematic savings philosophy are beneficial18ITEM 1.BUSINESSto us as th

315、ese accounts tend to have lowerredemption rates than the industry and,therefore,generate more recurring asset-basedrevenues.Managed Investments.PFS Investments(dbaPFS Advisors)is a registered investment advisorin the United States,and it offers a managedinvestments program,Primerica AdvisorsLifetime

316、 Investment Platform(the“LifetimeInvestment Platform”),which we launched in2017.The Lifetime Investment Platform is arobust advisory offering designed for clientswho have at least$25,000 of investable assets.Itprovides our customers access to mutual fundand exchange-traded fund investment modelsdesi

317、gned and managed by several unaffiliatedinvestment advisers.PFS Investments,as sponsorand portfolio manager of the program,evaluatesmodels for inclusion in the program andconducts ongoing due diligence of the modelsand unaffiliated investment advisers madeavailable through the program.As of December

318、31,2021,there were 11 unaffiliated investmentadvisers.TD Ameritrade Institutional,anunaffiliated broker-dealer,provides custody,trade execution,clearing,settlement and otherservices for customer assets invested throughthe Lifetime Investment Platform.Variable Annuities.U.S.securities licensedsales r

319、epresentatives also distribute variableannuities issued by American General LifeInsurance Company and its affiliates(“AIG”),Equitable Financial Life Insurance Company(“Equitable Life”),Lincoln National Life InsuranceCompany and its affiliates(“Lincoln National”),and Brighthouse Life Insurance Compan

320、y(“Brighthouse Life”).Variable annuities areinsurance products that enable our clients toinvest in accounts with attributes similar tomutual funds,but also have benefits not foundin mutual funds,including death benefits thatprotect beneficiaries from losses due to a marketdownturn and income benefit

321、s that guaranteefuture income payments for the life of thepolicyholder(s).We also offer index-linkedannuities issued by Equitable Life,BrighthouseLife,and Lincoln National.Index-linked annuitiesare insurance contracts that provide investorswith potential growth,subject to a cap,andpartial downside p

322、rotection against losses.Gainsand losses are measured over a fixed period,typically three to six years,based on theperformance of a securities index.Althoughlinked to an index,an investment in thesecontracts does not involve ownership of anyunderlying portfolio securities by the client.Eachof these

323、companies bears the insurance risk onits variable annuities and index-linked variableannuities that we distribute.Fixed Indexed Annuities.We offer fixedindexed annuity products in the U.S.throughLincoln National,AIG,and Universal LifeInsurance Company(“Universal Life”)(PuertoRico).These products com

324、bine safety ofprincipal and guaranteed rates of return withadditional investment options tied to equitymarket indices that allow for returns that movebased on the performance of an index.Webelieve these and other fixed annuity productsgive both life and securities representativesmore ways to assist

325、our clients with theirretirement planning needs.Fixed Annuities.In Puerto Rico,we currentlyoffer two annuity products:a fixed annuity and afixed bonus annuity underwritten by UniversalLife.These products provide guarantees againstloss with several income options.Employer Sponsored Retirement Plans.I

326、nthe United States,we also offer EmployerSponsored Retirement Plans(“ESRPs”),such as401(k)plans,primarily to small and medium-sized businesses.The ESRPs we distribute areoffered by a limited number of third-partyproviders,including American FundsDistributors,Inc.(“American Funds”),EquitableDistribut

327、ors,LLC,and VOYA Financial,Inc.,whichtogether account for most of our ESRP business.In addition,we distribute 457(b)plans togovernmental entities.Our licensedrepresentatives generally provide educationaland administrative services with respect toESRPs,which includes helping our ESRP clientsunderstan

328、d the benefits of offering a tax-deferred retirement plan and assisting theiremployees realize the need to save forretirement and the benefits of doing so in anESRP.Primerica 2021 Annual Report19ITEM 1.BUSINESSSegregated Funds.In Canada,we offersegregated fund products,branded as ourCommon Sense Fun

329、dsTM,that have some of thecharacteristics of our variable annuity productsdistributed in the United States.Our CommonSense FundsTM are underwritten by PrimericaLife Canada and offer our clients the ability toparticipate in a diversified managed investmentsprogram that can be opened for as little as$

330、25.While the assets and corresponding liability(reserves)are recognized on our consolidatedbalance sheets,the assets are held in separateaccounts for the benefit of the segregated fundcontract owners and are not commingled withthe general assets of the Company.There are three fund products within ou

331、rsegregated funds offerings:the Asset BuilderFunds,the Strategic Retirement Income Fund(“SRIF”),and a money market fund known as theCash Management Fund.The investmentobjective of Asset Builder Funds is long-termcapital appreciation combined with someguarantee of principal.Unlike mutual funds,ourAss

332、et Builder Funds product guarantees clientsat least 75%of their net contributions(net ofwithdrawals)at the earlier of the date of theirdeath or at the Asset Builder Funds maturitydate,which is selected by the client.Theportfolio consists of both equities and fixed-income securities with the equity c

333、omponentconsisting of a pool of primarily large capCanadian and U.S.equities and the fixed-incomecomponent consisting of Canadian federalgovernment zero coupon treasuries andgovernment-backed floating rate notes.Theportion of the Asset Builder Funds portfolioallocated to zero coupon treasuries are held insufficient quantity to satisfy the guaranteespayable at the maturity date of each AssetBuilder