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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2025

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-34680

img159280153_0.jpg

Primerica, Inc.

(Exact name of registrant as specified in its charter)

Delaware

27-1204330

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

 

1 Primerica Parkway

Duluth, Georgia

30099

(Address of principal executive offices)

(ZIP Code)

Registrant’s telephone number, including area code: (770) 381-1000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock

 

PRI

 

New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☒ Yes ☐ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ Yes ☒ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

 

☒

Accelerated filer

☐

 

 

 

 

Non-accelerated filer

☐

Smaller 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 period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

The aggregate market value of the voting common equity held by non-affiliates of the registrant as of June 30, 2025, was $8,880,345,744. The number of shares of the registrant’s Common Stock outstanding at January 31, 2026, with $0.01 par value, was 31,659,906.

Documents Incorporated By Reference

Certain information contained in the Proxy Statement for the Company’s Annual Meeting of Stockholders to be held on May 21, 2026 is incorporated by reference into Part III hereof.

 

i

 

TABLE OF CONTENTS

Page

 

Cautionary Statement Concerning Forward-Looking Statements

iii

 

 

Risk Factors Summary

iii

 

 

 

 

 

PART I

1

Item 1.

Business

1

Item 1A.

Risk Factors

23

Item 1B.

Unresolved Staff Comments

38

Item 1C.

 

Cybersecurity

 

38

Item 2.

Properties

39

Item 3.

Legal Proceedings

39

Item 4.

Mine Safety Disclosures

39

Item X.

Information About Our Executive Officers and Certain Significant Employees

40

 

 

 

PART II

43

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

43

Item 6.

 

[Reserved]

44

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

45

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

63

Item 8.

Financial Statements and Supplementary Data

66

Item 9.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

108

Item 9A.

Controls and Procedures

108

Item 9B.

Other Information

110

Item 9C.

 

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

110

 

 

 

PART III

 

Item 10.

Directors, Executive Officers and Corporate Governance

111

Item 11.

Executive Compensation

111

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

112

Item 13.

Certain Relationships and Related Transactions, and Director Independence

112

Item 14.

Principal Accountant Fees and Services

112

 

 

 

PART IV

113

Item 15.

Exhibits, Financial Statement Schedules

113

Item 16.

 

Form 10-K Summary

125

Signatures

126

 

 

 

ii

 

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

Investors are cautioned that certain statements contained in this report as well as some statements in periodic press releases and some oral statements made by our officials during our presentations are “forward-looking” statements. Forward-looking statements include, without limitation, any statement that may project, indicate or imply future results, events, performance or achievements, and may contain the words “expect”, “intend”, “plan”, “anticipate”, “estimate”, “believe”, “will be”, “will continue”, “will likely result”, and similar expressions, or future conditional verbs such as “may”, “will”, “should”, “would”, and “could”. In addition, any statement concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies or prospects, and possible actions taken by us or our subsidiaries are also forward-looking statements.

Forward-looking statements are based on current expectations and projections about future events and are inherently subject to a variety of risks and uncertainties, many of which are beyond the control of our management team. All forward-looking statements in this report and subsequent written and oral forward-looking statements attributable to us, or to persons acting on our behalf, are expressly qualified in their entirety by these risks and uncertainties. These risks and uncertainties are described under “Item IA. Risk Factors” and summarized below under “Risk Factors Summary.”

Developments in any of the areas addressed in these risks or uncertainties could cause actual results to differ materially from those anticipated or projected or cause a significant reduction in the market price of our common stock. Further, the risks and uncertainties described under “Item IA. Risk Factors” and summarized below under “Risk Factors Summary” may not include all of the risks and uncertainties that could affect us. In addition, in light of these risks and uncertainties, the matters referred to in the forward-looking statements contained in this report may not in fact occur. Accordingly, undue reliance should not be placed on these statements. We undertake no obligation to publicly update or revise any forward-looking statements as a result of new information, future events or otherwise, except as otherwise required by law.

 

Risk factors summary

 

The following is a summary of the risks and uncertainties that could have a material adverse effect on our business. See “Item 1A. Risk Factors” for additional information regarding these risks and uncertainties.

Risks Related to Our Distribution Structure

•
Our failure to continue to attract new recruits, retain independent sales representatives or license or maintain the licensing of independent sales representatives would materially adversely affect our business.
•
A number of laws and regulations could apply to our independent contractor distribution model, which could require us to modify our distribution structure.
•
There may be adverse tax, legal or financial consequences if the classification of the independent contractor sales representatives is changed.
•
The Company’s or the independent sales representatives’ violation of, or non-compliance with, laws and regulations and related claims and proceedings could expose us to material liabilities.

Risks Related to Our Insurance Business and Reinsurance

•
Our life insurance business may face significant losses or volatility if our actual experience differs from our expectations regarding mortality, reinsurance, persistency, or disability.
•
Our life insurance business is highly regulated, and statutory and regulatory changes may materially adversely affect our business.
•
A decline in the regulatory capital ratios of our insurance subsidiaries could result in increased scrutiny by insurance regulators and ratings agencies and have a material adverse effect on our business.
•
A significant ratings downgrade by a ratings organization could materially adversely affect our business.
•
The failure by any of our reinsurers or reserve financing counterparties to perform its obligations to us could have a material adverse effect on our business.

Risks Related to Our Investment and Savings Products Business

•
Our Investment and Savings Products segment is heavily dependent on a limited platform of mutual fund and annuity products offered by a relatively small number of companies and managers. If these products fail to remain competitive with other investment options, our business could be materially adversely affected.
•
If our relationship with one or more of the manufacturers of the funds and annuities we distribute or investment managers we make available is significantly altered or terminated or there is a shift in the business mix, our business could be materially adversely affected.
•
The Company’s, or the securities-licensed independent sales representatives’ violations of, or non-compliance with, laws and regulations of the securities business could expose us to material liabilities.
•
If heightened standards of conduct are imposed on us or the independent sales representatives by federal, state or provincial authorities, or selling compensation is reduced as a result of new legislation or regulations, it could have a material adverse effect on our business.

iii

 

•
If our suitability policies and procedures, or our policies and procedures for compliance with federal, state or provincial regulations governing standards of care, were deemed inadequate, it could have a material adverse effect on our business.
•
Non-compliance with applicable regulations could lead to revocation of our subsidiary’s status as a non-bank custodian, which could have a material adverse effect on our business.

 

Risks Related to Our Mortgage Brokerage Business

•
Licensing requirements will impact the size of the mortgage loan independent sales force, which could adversely affect our mortgage brokerage business.
•
Our U.S. mortgage brokerage and Canadian mortgage referral business is highly regulated and subject to various federal, state and provincial laws and regulations in the U.S. and Canada. Changes in, non-compliance with, or violations of, such laws and regulations could affect the cost or our ability to distribute our products and could adversely affect our business.
•
In the U.S., we broker mortgage loans based on contractual agreements with a very limited number of mortgage lenders. A significant change to or disruption in the mortgage lenders’ mortgage businesses or an inability of the mortgage lenders to satisfy their contractual obligations to us could adversely affect our business.
•
Our U.S. mortgage brokerage business is impacted by U.S. mortgage interest rates. Changes in prevailing mortgage interest rates or U.S. monetary policies that affect mortgage interest rates could adversely affect our business.

Risks Related to Economic Downcycles, Public Health Crises or Catastrophes, and Disasters

•
The effects of economic downcycles, issues affecting the national, regional and/or global economy or geopolitical event(s), or any combination thereof, could impact the cost of living for our middle-income clients and could materially adversely affect our business.
•
Major public health pandemics, epidemics or outbreaks (such as the COVID-19 pandemic) or other catastrophic events, have impacted and could again materially adversely impact our business.
•
In the event of a disaster, our business continuity plan may not be sufficient, which could have a material adverse effect on our business.

Risks Related to Information Technology and Cybersecurity

•
If one of our, or a third-party partner’s, significant information technology systems fails, if its security is compromised, or if the Internet becomes disabled or unavailable, our business may be materially adversely affected.
•
Any failure to protect the confidentiality of client information could adversely affect our reputation and have a material adverse effect on our business.
•
The current legislative and regulatory climate with regard to privacy and cybersecurity could adversely affect our business.
•
The development and use of artificial intelligence present risks and challenges that could materially adversely affect our business.
•
We regularly undertake business initiatives to enhance our technology, products, and services. The efficiency and success of these initiatives may vary significantly and may cause unanticipated costs, errors, or disruptions which could have a material adverse effect on our business.

Financial Risks Affecting Our Business

•
Credit deterioration in, and the effects of interest rate fluctuations on, our invested asset portfolio and other assets that are subject to changes in credit quality and interest rates could materially adversely affect our business.
•
Valuation of our investments and the determination of expected credit losses when the fair value of our available-for-sale invested assets is below amortized cost are both based on estimates that may prove to be incorrect, which could adversely affect our financial condition and results of operations.
•
Changes in accounting standards can be difficult to predict and could adversely impact how we record and report our financial condition and results of operations.
•
The inability of our subsidiaries to pay dividends or make distributions or other payments to us in sufficient amounts would impede our ability to meet our obligations and return capital to our stockholders.

Risks Related to Legislative and Regulatory Changes and Government Policy Uncertainty

•
We are subject to various federal, state and provincial laws and regulations in the U.S. and Canada, as well as executive branch actions, orders and policies, judicial rulings and decisions by public officials, any of which may require us to alter our business practices and could materially adversely affect our business.
•
Uncertainty in the legislative and regulatory climate with regard to financial services may adversely affect our business.
•
The current regulatory climate with regard to climate change may adversely affect our business.

General Risk Factors

•
Litigation and regulatory investigations and actions may result in financial losses and harm our reputation.
•
A significant change in the competitive environment in which we operate could negatively affect our ability to maintain or increase our market share and profitability.

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•
Our continued success requires a high-performing and stable team of employees across all levels, and the loss of key employees could negatively affect our financial condition and impair our ability to implement our business strategy.
•
We may not be able to effectively execute our corporate strategy, which could have a material adverse effect on our business.
•
We may be materially adversely affected by currency fluctuations in the United States dollar versus the Canadian dollar.
•
The market price of our common stock may fluctuate.

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PART I

ITEM 1. BUSINESS.

Primerica, Inc. (“Primerica” or the “Parent Company” and, together with its direct and indirect subsidiaries, “we”, “us” or the “Company”) is a leading provider of financial products and services to middle-income households in the United States and Canada with 151,524 life insurance-licensed sales representatives as of December 31, 2025. These independent licensed representatives (“independent sales representatives” or “independent sales force”) assist our clients in meeting their needs for term life insurance, which we underwrite, and mutual funds, annuities, managed investments, and other financial products, which we distribute primarily on behalf of third parties. We insured over 5.5 million lives and had approximately 3.1 million client investment accounts as of December 31, 2025. Our business model uniquely positions us to reach underserved middle-income consumers in a cost-effective manner and has proven itself in both favorable and challenging economic environments.

Our purpose is to create financially independent families. Our strategic vision, in support of this purpose, is to build unparalleled financial services distribution capabilities that enable our clients, independent sales force, home office associates and stockholders to achieve their financial goals. The guiding principles that underlie our strategic vision are serving middle-income families, maximizing the success of the independent sales force, preserving and strengthening our culture, and protecting our business model.

Our strategic plan includes the following growth pillars:

•
Understand and solve the financial challenges faced by current and prospective clients;
•
Enable leaders in the independent sales force to grow their teams and build new leaders, expanding our distribution capabilities across business lines;
•
Expand representative and client digital experiences to create connected conversations;
•
Deepen our talent pool to ensure our success, now and in the future; and
•
Proactively ensure the Company’s image accurately reflects who we are.

We believe there is significant opportunity to meet the increasing array of financial services needs of our clients. We intend to leverage the independent sales force to meet such client needs, which will drive long-term value for all of our stakeholders.

Corporate Structure

We conduct our core business activities in the United States through three principal entities, all of which are direct or indirect wholly owned subsidiaries of the Parent Company:

•
Primerica Financial Services, LLC (“PFS”), our general agency and marketing company;
•
Primerica Life Insurance Company (“Primerica Life”), our principal life insurance underwriting company; and
•
PFS Investments Inc. (“PFS Investments”), our principal investment and savings products company, broker-dealer and registered investment adviser.

 

Primerica Life is domiciled in Tennessee, and its wholly owned subsidiary, National Benefit Life Insurance Company (“NBLIC”), is a New York-domiciled life insurance underwriting company.

We conduct our core business activities in Canada through three principal entities, all of which are indirect wholly owned subsidiaries of the Parent Company:

•
Primerica Life Insurance Company of Canada (“Primerica Life Canada”), our Canadian life insurance underwriting company;
•
PFSL Investments Canada Ltd. (“PFSL Investments Canada”), our Canadian licensed mutual fund dealer; and
•
PFSL Fund Management Ltd. (“PFSL Fund Management”), our Canadian investment funds manager.

Primerica was incorporated in the United States as a Delaware corporation in October 2009 to serve as a holding company for the Primerica businesses. Our businesses were transferred to us by Citigroup, Inc. on April 1, 2010 in a reorganization pursuant to which we completed an initial public offering in April 2010 (the “IPO”). On March 31, 2010, we entered into certain coinsurance transactions to cede between 80% and 90% of the risks and rewards of our term life insurance policies that were in force at year-end 2009. We administer pre-IPO policies subject to these coinsurance agreements.

Fee-Based and Complementary Nature of Primary Business Segments

We use three operating segments to organize, evaluate and manage our business: Term Life Insurance; Investment and Savings Products; and Corporate and Other Distributed Products. The complementary nature of our two primary operating segments: Term Life Insurance and Investment and Savings Products, reflects the different ways each responds to macroeconomic factors and client needs. Clients purchasing a life insurance policy are typically in their mid-30s, have modest savings, and are often more sensitive to

1

 

cost-of-living pressures. In contrast, clients purchasing investment products range from those just starting to save for the future to those who have accumulated significant assets over time.

The financial results of our Term Life Insurance segment benefit from the stability of a large in-force block of life insurance policies, with a substantial portion of revenues generated from recurring premiums. Since we reinsure up to 90% of the mortality risk of our existing life insurance policies, claims expense is largely fixed. This reduces earnings volatility and results in revenues that exhibit characteristics similar to those of a fee-based model; resembling commissions and substantially eliminating traditional insurance underwriting mortality risk. The financial results of our Investment and Savings Products segment benefit from clients’ long-term investment focus and the expected intergenerational transfer of wealth, which should continue to favorably impact demand for the mutual funds, annuity products and management investments we distribute. Revenues in this segment are entirely fee-based, which include sales commissions and investment advisory and administrative service fees.

Collectively, our revenue streams, which are either fee-based or exhibit characteristics similar to fee-based revenues, generate substantial cash flow and contribute to strong returns on invested capital.

Our Clients

Our clients are generally middle-income consumers, which we define as households with $30,000 to $130,000 of annual income. According to the 2024 U.S. Census Bureau Current Population Survey, the latest period for which data is available, approximately 52% of U.S. households fall in this range. We believe that we understand the financial needs of the middle-income segment:

•
Many have inadequate or no life insurance coverage. Individual life insurance sales in the United States declined from 12.9 million policy sales in 1975 to 9.3 million policy sales in 2024, the latest period for which data is available, according to Life Insurance Marketing and Research Association, a worldwide association of insurance and financial services companies. We believe that term life insurance, which we have provided to middle-income clients for nearly 50 years, is generally the best option for them to meet their life insurance needs.
•
Many need help investing and saving for retirement and other personal goals. Many middle-income families find it challenging to invest and save for retirement and other personal needs. By developing personalized savings programs for our clients using our proprietary Financial Needs Analysis tool (“FNA”) and offering a wide range of mutual funds, annuities, managed investments and segregated fund products sponsored and managed by established firms, independent sales representatives are well equipped to help clients develop long-term savings plans to address their financial needs. We allow our clients to establish monthly contributions to investment savings plans with as little as $25 per month.
•
Many need to reduce their debt. Many middle-income families have numerous debt obligations from credit cards, auto loans, and home mortgages. We help our clients address these financial burdens by providing personalized and client-driven debt resolution techniques.
•
Many prefer to meet face-to-face when considering financial products. Historically, many middle-income consumers have indicated a preference to meet face-to-face when considering financial products or services. As such, we have designed our distribution model to address this preference in a cost-effective manner through a network of more than 151,000 life insurance-licensed independent sales representatives who meet with clients in person or using remote communication tools based on client preference.
•
Many are looking to finance the purchase of a home or refinance an existing mortgage. Most middle-income consumers need mortgages to finance the purchase of a home. In addition, through refinancing a mortgage loan, clients may be able to change the term of their loan, access home equity for cash, home improvements and/or debt consolidation and in limited circumstances lower their interest rate.

Our Distribution Model

Our distribution model is a modified traditional insurance agency model designed to reach and serve middle-income consumers efficiently through the independent sales force.

Our distribution model is designed to:

•
Address our clients’ financial needs. Independent sales representatives use our proprietary FNA tool and an educational approach to demonstrate how our product offerings can provide financial protection and help our clients save for retirement and other needs, and manage their debt. Typically, our clients are the friends, family members and personal acquaintances of the independent sales representatives. Meetings are generally held in informal, face-to-face settings either in person or through remote communication tools, usually while clients are in their homes.
•
Provide a business opportunity. We provide an entrepreneurial business opportunity for individuals to distribute financial products. Low entry fees as well as the ability to select their own schedules and time commitments allow independent sales representatives to supplement their income by starting their own businesses without leaving their current jobs. Our unique compensation structure, technology, sales support and back-office processing are designed to enable independent sales representatives to successfully grow their businesses.

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Key characteristics of our unique distribution model include:

•
Independent entrepreneurs: Independent sales representatives are independent contractors building and operating their own businesses. This approach means that independent sales representatives are entrepreneurs who take responsibility for selling products, recruiting and developing other independent sales representatives, setting their own schedules and managing and paying the administrative expenses associated with their sales activities.
•
Highly accessible and low cost to entry: By offering a flexible time commitment opportunity, we are able to attract a significant number of recruits who desire to earn supplemental income and generally concentrate on smaller-sized transactions typical of middle-income consumers. Independent sales representatives are able to start their businesses with low fees, for which they receive technological support, pre-licensing training and access to licensing examination preparation programs. Independent sales representatives sell or refer products directly to consumers, and therefore our business opportunity does not require recruits to purchase and resell our products. Most independent sales representatives begin selling products on a part-time basis, which enables them to hold jobs while exploring an entrepreneurial business opportunity with us.
•
Sales force leadership: An independent sales representative who has built a successful organization and has obtained his or her life insurance and securities licenses can achieve the sales designation of Regional Vice President (“RVP”), which qualifies him or her for a higher commission schedule. RVPs are independent contractors who open and operate offices for their sales organizations and devote their full-time attention to their businesses. RVPs also support and monitor the independent sales representatives, on whose sales they earn commissions, in achieving compliance with applicable regulatory requirements. RVPs’ efforts to expand their businesses are a primary driver of our success.
•
Innovative compensation structure: We have developed an innovative system for compensating the independent sales force that is contingent upon product sales. We advance to independent sales representatives a significant portion of their insurance commissions, which are subject to chargebacks, upon their submission of an insurance application and the first month’s premium payment. In addition to being a source of motivation, this advance provides independent sales representatives with immediate cash flow to offset their costs. Monthly production bonuses are also paid to RVPs whose sales organizations meet certain sales levels. With compensation tied to sales activity, our approach accommodates varying degrees of individual productivity, which allows us to effectively use a large group of part-time independent sales representatives while providing a variable cost structure. In addition, we incentivize RVPs with quarterly stock awards based largely on sales production (“agent equity awards”), which aligns their interests with those of our stockholders.
•
Large, warm market-based sales force: Members of the independent sales force typically start their Primerica businesses by serving their friends, family members and personal acquaintances through individually driven networking activities. We believe that this warm market approach is an effective way to distribute our product offerings because it facilitates face-to-face interaction initiated by a trusted acquaintance of the prospective client, which is difficult to replicate using other distribution approaches. Due to the large size of the independent sales force and the active recruiting of new independent sales representatives, the independent sales force is able to continually access an expanding base of prospective clients without engaging costly media channels.
•
Motivational culture: In addition to the motivation for independent sales representatives to achieve financial success, we seek to create a culture that inspires and rewards independent sales representatives for their personal successes and those of their sales organizations through independent sales force recognition events and contests. We also use Intranet-streamed broadcasts and local, regional and national meetings to inform and teach independent sales representatives, as well as facilitate camaraderie and the exchange of ideas across the independent sales force. These initiatives encourage and empower independent sales representatives to develop their own successful sales organizations.
•
Inclusive culture: Building and maintaining a diverse independent sales force is important to us because we believe the independent sales force reflects the middle-income communities we serve. As the communities we serve become more diverse, the independent sales force does as well.

Structure and Scalability of the Independent Sales Force

New independent sales representatives are recruited by existing independent sales representatives. When these new recruits become independent sales representatives, they become part of the sales organization of the independent sales representative who recruited them as well as the sales organizations to which the recruiting independent sales representative belongs. We encourage independent sales representatives to bring in new recruits to build their own sales organizations, enabling the Company to reach more middle-income families.

RVPs establish and maintain their own offices, which we refer to as field offices. Additionally, as independent entrepreneurs, they are responsible for, and have control over, the costs of their administrative staff, marketing materials, travel, training and certain recognition events for the independent sales representatives in their respective sales organizations. Field offices provide a location for independent sales representatives to conduct recruiting meetings, training events and sales-related meetings, disseminate our Intranet-streamed broadcasts, conduct compliance functions, and house field office business records. Some business locations house more than one field office. At December 31, 2025, approximately 6,000 field offices in 3,200 locations were managed by independent sales representatives that served as RVPs. Independent sales representatives also leverage remote communication tools to conduct field office meetings. RVPs play a major role in training, motivating and monitoring their independent sales force organizations.

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Because the independent sales representative’s compensation grows with the productivity of his or her sales organization, our distribution model provides financial rewards to independent sales representatives who successfully develop, support and monitor productive independent sales representatives. In addition to our commission structure, we offer the Primerica Ownership Program. This program provides qualifying RVPs a contractual right, upon meeting certain criteria, to transfer their Primerica businesses to another RVP or a qualifying family member at such time as they desire. Furthermore, we have developed proprietary tools and technology, which we make available to the independent sales representatives, to enable RVPs to reduce the time spent on administrative responsibilities associated with their sales organizations so they can devote more time to the sales, recruiting and training activities that drive our growth. We believe that our tools and technology, coupled with our sales compensation programs, further incentivize independent sales representatives to become RVPs.

Both the structure of the independent sales force and the capacity of our support capabilities provide us with a high degree of scalability as we grow our business. Our support systems and technology are capable of supporting a large independent sales force and a high volume of transactions. In addition, by sharing training and compliance activities with RVPs, we are able to grow the Company without incurring proportionate overhead expenses.

Recruitment of Independent Sales Representatives

The recruitment of independent sales representatives is undertaken by existing independent sales representatives, who identify prospects and share with them the benefits of associating with our organization. Independent sales representatives showcase the Company as dynamic and capable of improving the lives of middle-income families.

After the initial contact, independent sales representatives typically invite prospective recruits to an opportunity meeting, conducted in person or through remote communication tools, which is conducted by an RVP. The objective of an opportunity meeting is to inform prospective recruits about our mission and their opportunity to start their own businesses by becoming independent sales representatives. At the conclusion of each opportunity meeting, attendees who are interested are asked to complete an application and pay a nominal fee to commence their pre-licensing training and licensing examination preparation programs and, depending on the state or province, to cover their licensing exam registration costs, which are generally paid by the Company. Recruits are not obligated to purchase any of the products we offer in order to become independent sales representatives, though they may elect to make such purchases.

Recruits may become our clients or provide us with access to their friends, family members and personal acquaintances. We continually work to improve our systematic approach to recruiting and training new independent sales representatives.

Similar to other distribution systems that rely upon part-time independent sales representatives and typical of the life insurance industry in general, we experience wide disparities in the productivity of individual independent sales representatives. Many new recruits do not get licensed, often due to the time commitment required to obtain licenses and various regulatory and licensing hurdles. Many licensed independent sales representatives are only marginally active, as there are no minimum life insurance production requirements. We plan for this disparate level of productivity and view a continuous recruiting cycle as a key component of our distribution model. Our distribution model is designed to address the varying productivity associated with independent sales representatives by paying production-based compensation, emphasizing recruiting, and developing initiatives to address barriers to licensing new recruits. By providing commissions to independent sales representatives on the sales generated by their sales organization, our compensation structure aligns the interests of independent sales representatives with our interests in recruiting new representatives and creating sustainable sales production.

The following table provides information on new recruits and life insurance-licensed independent sales representatives:

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

Number of new recruits

 

 

358,316

 

 

 

445,425

 

 

 

361,925

 

Number of newly life insurance-licensed independent sales representatives

 

 

48,722

 

 

 

56,320

 

 

 

49,096

 

Number of life insurance-licensed independent sales representatives, at period end

 

 

151,524

 

 

 

151,611

 

 

 

141,572

 

Average number of life insurance-licensed independent sales representatives during period

 

 

152,117

 

 

 

145,975

 

 

 

137,760

 

We define new recruits as individuals who have submitted an independent business application to become independent sales representatives together with payment of the nominal fee to commence their pre-licensing training. Certain recruits may not meet the compliance standards to become an independent sales representative, and others elect to withdraw prior to becoming actively engaged.

On average, it takes approximately three months for independent sales representatives to complete the necessary applications and pre-licensing coursework and to pass the applicable state or provincial examinations to obtain a license to sell term life insurance products. As a result, individuals recruited to become independent sales representatives within a given fiscal period may not become licensed independent sales representatives or meet compliance standards until a subsequent period.

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Sales Force Motivation, Training, Communication and Sales Support Tools

Motivating, training and communicating with the independent sales force, as well as sales support tools, are critical to our success and that of the independent sales force.

Motivation. Through our proven system of sales force recognition events, contests and communications, we provide incentives that motivate the independent sales force. Motivation is driven largely by independent sales representatives’ desire to achieve higher levels of financial success by building their own businesses. The opportunity to help underserved middle-income households address financial challenges is also a source of motivation for many independent sales representatives.

While the RVPs are responsible for motivating the independent sales representatives in their own organizations, we provide a system that motivates independent sales representatives to succeed in their businesses by:

•
compensating independent sales representatives for product sales or referrals made by them and their sales organizations;
•
training independent sales representatives on financial fundamentals so they can confidently and effectively assist our clients;
•
reducing the administrative burden on the independent sales force, which allows them to devote more of their time to building a sales organization and selling products;
•
creating a culture in which independent sales representatives are encouraged to achieve goals through the recognition of their sales and recruiting achievements, as well as those of their sales organizations; and
•
conducting numerous local, regional and national meetings to help inform and motivate the independent sales force.

 

In 2024, we hosted our biennial international convention, which was attended by approximately 40,000 people, at the Mercedes-Benz Stadium in Atlanta, Georgia. New recruits and independent sales representatives who attend our convention and associated meetings do so at their own expense, which we believe further demonstrates their commitment to our organization and mission. In lieu of a biennial international convention in 2026, we will hold five regional summits in the U.S. and Canada in 2026 and then host our next international convention in July 2027 at the Mercedes-Benz Stadium, which aligns with the Company’s 50th anniversary.

 

Training, Communication and Sales Support Tools. Primerica Online (“POL”), delivered through a secure Intranet website and a cross-platform mobile application (“Primerica App”), is our primary tool designed to support independent sales representatives and assist them in building their own businesses. We provide independent sales representatives with communication, training, and sales support tools on POL that allow both new and experienced independent sales representatives to offer financial information and products to our clients. POL provides independent sales representatives with access to various business tracking and management tools, licensing support tools, product-specific training, and sales procedures and tools. Additionally, POL provides access to internal training programs and videos covering sales, management skills, business ownership, and compliance. We also use POL to provide real-time recognition of independent sales representatives’ successes and scoreboards for independent sales force production, contests, and leadership trips. In addition, POL is a gateway to our product providers and product support. Subscribers generally pay a small monthly fee to subscribe to POL, which helps cover the cost of developing new resources and maintaining this support system. A limited version of POL that provides access to Primerica e-mail, compliance and compensation information, newsletters and bulletins is available at no cost to the independent sales force.

The primary features and tools available on POL include:

•
Training and Licensing Tools: POL provides independent sales representatives with access to study tools for life insurance and securities licensing examinations such as pre-licensing study materials, on-demand videos, personalized licensing study plans, exam simulators, progress tracking, and exam and license registration. POL also provides training materials and access to online certification programs to sell or refer certain other distributed products.
•
Communication Tools: POL provides access to marketing materials for our product offerings, Company news and events, live streaming shows, on-demand videos, home office bulletins, Primerica e-mail, contact lists, and a hosted professional business website for independent sales representatives. We broadcast and deliver video content on POL through our own digital video channel, PFN TV. We create original broadcasts and videos that enable home office management to provide business updates to the independent sales force as well as training and motivational presentations. We broadcast live programs hosted by the home office management and selected RVPs that focus on new developments and provide motivational messages to the independent sales force. We also broadcast training-oriented programs to the independent sales force on a weekly basis and profile successful independent sales representatives, allowing these individuals to educate and train other independent sales representatives by sharing their methods for success.
•
Sales Support and Client Management Tools offered through POL:
Our Financial Needs Analysis: Our FNA is a proprietary, needs-based analysis tool. The FNA gives independent sales representatives the ability to collect and synthesize client financial data and develop a financial analysis for the client that is easily understood. The FNA helps our clients understand their financial needs in the areas of debt, financial protection, and savings as well as introduces prudent financial concepts, such as regular saving and accelerating the repayment of high cost credit card debt, to help them reach their financial goals. The FNA also provides clients with a snapshot of their current financial position and identifies their life insurance, savings and debt resolution needs.
Our Point-of-Sale Application Tool: Our point-of-sale technology, TurboApps, streamlines the application process for our insurance and investment products. These applications automatically populate client information from the FNA and other external sources to eliminate redundant data collection and provide real-time feedback to eliminate incomplete

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and illegible applications. Integrated with our paperless field office management system described below and with our home office systems, TurboApps allows RVPs and us to realize the efficiencies of straight-through-processing of application data and other information collected on independent sales representatives’ mobile devices, which results in expedited processing of product sales. TurboApps also features EZ-Key, which is a tool that helps independent sales representatives guide clients through the investment decision process and ultimately provides investment alternatives based on the client’s individual situation. TurboApps is available on the independent sales representatives’ portal, POL, and our mobile platform, the Primerica App.
Primerica App: Our mobile Primerica App platform has been adopted broadly and provides the independent sales force with access to the critical components needed to start, build and maintain their businesses. We continually enhance and expand the scope and resources available on this strategic platform.
Virtual Base Shop: In an effort to ease the administrative burden on RVPs and simplify independent sales force operations, we make available to RVPs a secure Intranet-based paperless field office management system as part of the POL subscription. This virtual office is designed to automate the RVP’s administrative responsibilities and can be accessed by subscribing independent sales representatives in an RVP’s immediate sales organization, which we refer to as his or her base shop.
Shareholder Account Manager (“SAM”): SAM is a web-based tool, accessed through our transfer agent recordkeeping platform, that allows securities-licensed independent sales representatives to service client investments in mutual funds.
Client Relationship Manager (“CRM”): Our CRM tool allows independent sales representatives and their RVPs to organize client information, such as personal contact information, product relationships, account details, notes, appointments, follow-ups, and marketing campaigns, in one place to enable fast and convenient access.
Primerica Social: We offer a social media automation tool that provides independent sales representatives with pre-approved social media posts that can be shared on their social media accounts.

In addition, our publications department produces materials to support, motivate and inform the independent sales force. We make available, at prices that do not exceed our cost of production, recruiting materials, sales brochures, business cards and stationery and provide communications services that include web design, print presentations, graphic design and script writing. We also produce a weekly mailing that includes materials promoting our current incentives as well as the latest news about our product offerings.

Performance-Based Compensation Structure

Our commission structure is rooted in our origin as an insurance agency. Sales representatives, who are independent contractors, can receive compensation in multiple ways, including:

•
sales commissions and fees based on their personal sales, referrals and client assets under management;
•
sales commissions and fees based on their sales organizations’ sales, referrals and client assets under management; and
•
bonuses and other compensation, including agent equity awards, generated by their own sales performance, the aggregate sales performance of their sales organizations and other criteria.

Our compensation structure pays commissions to the independent sales representative who sells the product and to several representatives above the selling representative within his or her sales organization.

With respect to term life insurance sales, commissions are calculated based on the total first-year premium (excluding the policy fee) for all policies and riders. To motivate the independent sales force, we compensate independent sales representatives for term life insurance product sales as quickly as possible. We advance a majority of the insurance commission upon the submission of a completed application and the first month’s premium payment. As the client makes his or her premium payments, the commission is earned by the independent sales representative and the commission advance is recovered by the Company. If premium payments are not made by the client and the policy terminates, any outstanding advance commission is charged back to the independent sales representative. The chargeback, which only occurs in the first year of a policy, equals that portion of the advance that was made, but not earned, by the independent sales representative because the client did not pay the full premium for the period of time for which the advance was made to the independent sales representative. Chargebacks, which occur in the normal course of business, may be recovered by reducing any cash amounts otherwise payable by the Company to the independent sales representative.

Independent sales representatives and representatives above them in their sales organizations are contractually obligated to repay us any commission advances that are ultimately not earned due to the underlying policy lapsing prior to the full commission being earned. Additionally, we hold back a portion of the commissions earned by independent sales representatives as a reserve out of which we may recover chargebacks. The amounts held back are referred to as deferred compensation account commissions (“DCA commissions”). DCA commissions are available to reduce amounts owed to the Company by independent sales representatives and they provide an independent sales representative with a cushion against the chargeback obligations of representatives in their sales organization. DCA commissions, unless applied to amounts owed, are ultimately released to independent sales representatives.

We pay most term life insurance commissions during the first policy year. One of our term riders provides for coverage increases after the first year. For such riders, we pay first-year and renewal commissions only for premium increases related to the increased

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coverage. Additionally, we pay renewal commissions on some older in-force policies. At the end of a policy’s level premium paying period, we pay commissions on policy exchanges and bonuses on some policy exchanges and continuations.

We also pay bonuses as a percentage of premiums to RVPs with respect to sales of term life insurance policies and riders, up to a maximum premium. Bonuses are paid to RVPs for achieving specified production levels.

For U.S. mutual funds (non-managed investments) and annuity products, commissions are paid both on the sale and on the value of assets under management. Commissions are calculated based on the dealer reallowance and trail compensation actually paid to us. For managed investment products, fees earned are based on the assets under management and represent the fee we receive as compensation for as long as we retain the account. In Canada, our primary mutual fund offering consists of a series of mutual funds whereby independent sales representatives who earn monthly fees based on client asset values (the “asset-based fees”) have the option of receiving up-front compensation from PFSL Investments Canada based on the amount invested with reduced asset-based fees for a period of five years, and they are able to negotiate with an investor to earn a front-end load sales commission. If independent sales representatives choose to receive up-front compensation from PFSL Investments Canada, they are subject to a chargeback of the up-front compensation on a declining scale if the investor redeems some or all of the investment within five years.

We also pay the independent sales force for mortgage originations, sales of prepaid legal services subscriptions, and referrals for other distributed products. Mortgage originations compensation paid to the independent sales force is earned for each closed mortgage loan based on a percentage of the loan amount, subject to regulatory maximums. Prepaid legal services commissions paid to the independent sales force are earned in fixed amounts on a monthly basis as long as the prepaid legal service subscription remains active. Compensation related to other distributed products is calculated based on the type of product sold or referred.

In addition to these methods of compensation, RVPs can earn quarterly agent equity awards based largely on sales production.

Sales Force Licensing and Support

The states, provinces and territories in which independent sales representatives operate generally require them to obtain and maintain licenses to sell our insurance and securities products, which requires them to pass applicable examinations. Independent sales representatives may also be required to maintain licenses to sell certain of our other distributed products. To encourage new recruits to obtain their life insurance licenses, we either pay directly or reimburse the independent sales representative for certain licensing-related fees and expenses once he or she passes the applicable exam and obtains the applicable life insurance license. In addition, new recruits are eligible to earn compensation if they participate in field training observations with experienced independent sales representatives and complete the licensing process within a specified timeframe. To sell insurance products, independent sales representatives must be licensed by their resident state, province or territory and by any other state, province or territory in which they do business. In most states, independent sales representatives must also be appointed by our applicable insurance subsidiary. Our in-house life insurance licensing program offers new recruits a significant number of classroom life insurance pre-licensing courses to meet applicable state and provincial licensing requirements and prepares recruits to pass applicable licensing exams.

To sell mutual funds and variable annuity products, U.S. independent sales representatives must be registered with the Financial Industry Regulatory Authority (“FINRA”) and hold the appropriate license(s) designated by each state in which they sell securities products, as well as be appointed by the annuity underwriter in the states in which they market annuity products. Independent sales representatives must meet all state and federal regulatory requirements and be designated as an investment advisor representative in order to sell our managed investment products. We contract with third-party training firms to conduct securities license exam preparation for independent sales representatives, and we also offer supplemental training tools.

Canadian independent sales representatives selling mutual fund products are required to be registered by the securities regulators in the provinces and territories in which they sell mutual fund products. Canadian independent sales representatives who are licensed to sell our insurance products do not need any further licensing to sell our segregated funds products.

To offer mortgage loan products in the United States, independent sales representatives must be individually licensed as mortgage loan originators by the states in which they do business and, in some states, they must also be individually licensed as mortgage brokers.

For sales of our other distributed products, appropriate state, provincial and territorial licensing may be required.

Supervision and Compliance

To ensure compliance with various federal, state, provincial and territorial legal requirements, we and the RVPs share responsibility for maintaining an overall compliance program that involves compliance training and supporting, as well as monitoring, the activities of independent sales representatives. We work with the RVPs to develop and maintain appropriate compliance procedures and systems.

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Generally, in the United States RVPs must obtain a principal license (FINRA Series 26) and in Canada RVPs must be registered as a Branch Manager, and, as a result, RVPs assume additional regulatory supervisory responsibility over the activities of their sales organizations. Additional supervision is provided by designated principal-licensed home office personnel, referred to as Regional Securities Principals (“RSP”). RSPs are required to supervise and monitor activity across all product lines and report any compliance issues they observe to our Compliance Department. In addition, our Compliance Department regularly runs surveillance reports designed to monitor the activity of the independent sales force and investigates any unusual or suspicious activity identified during these reviews or during periodic inspections of RVP offices.

All independent sales representatives are required to participate in our annual compliance meeting, a program administered by our senior management and our legal and compliance staff. We provide a compliance training overview across all product lines and require the completion of compliance attestations by each licensed independent sales representative for each product he or she offers. Additionally, independent sales representatives receive periodic compliance communications, both in writing and through videos, regarding new compliance developments and business issues of significance.

Our Field Audit Department regularly conducts audits of all independent sales representative offices on a risk-based approach, including scheduled and no-notice audits when feasible. Our Field Audit Department reviews regulatory-required records that are not maintained at our home office. Any compliance deficiencies noted in the audit must be corrected, and we carefully monitor all corrective action. Audit deficiencies are addressed through reprimands, probations and contract terminations.

Our Product Offerings

Reflecting our philosophy of helping middle-income clients with their financial services needs and ensuring compatibility with our distribution model, our product offerings generally meet the following criteria:

•
Consistent with sound individual finance principles: Products must be consistent with good personal finance principles for middle-income consumers, such as financial protection, encouraging long-term savings and reducing debt.
•
Designed to support multiple client goals: Products are designed to address and support a broad range of financial goals rather than compete with or cannibalize each other. For example, term life insurance does not compete with mutual funds because term life insurance has no cash value or investment element.
•
Ongoing needs based: Products are generally designed to meet the ongoing financial needs of many middle-income consumers. This long-term approach bolsters our relationship with our clients by allowing us to continue to serve them as their financial needs evolve.

We use three operating segments to organize, evaluate and manage our business: Term Life Insurance; Investment and Savings Products; and Corporate and Other Distributed Products.

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The following table provides information on our principal product offerings and the principal sources thereof by operating segment as of December 31, 2025.

 

Operating Segment

 

Principal Product Offerings

 

Principal Sources of Products
(Applicable Geographic Territory)

Term Life Insurance

 

Term Life Insurance

 

Primerica Life (U.S. (except New York) and certain territories)

 

 

 

 

NBLIC (New York)

 

 

 

 

Primerica Life Canada (Canada)

Investment and Savings Products

 

Mutual Funds and Certain Retirement Plans,
   including Employer Sponsored Retirement
   Plans

 

American Century Investments (U.S.)

 

 

 

 

American Funds (U.S.)

 

 

 

 

Equitable Distributors, LLC (U.S.)

 

 

 

 

Nuveen, LLC (U.S.)

 

 

 

 

VOYA Financial, Inc. (U.S.)

 

 

 

 

Fidelity Investments (U.S.)

 

 

 

 

Franklin Templeton Investments (U.S.)

 

 

 

 

Invesco (U.S.)

 

 

 

 

AGF Investments (Canada)

 

 

 

 

Mackenzie Investments (Canada)

 

 

 

 

Other fund companies and plan administrator
   providers

 

 

Managed Investments

 

PFS Investments (dba Primerica Advisors) (as a program sponsor) (U.S.)

 

 

Variable Annuities

 

Corebridge Financial, Inc. (U.S.)

 

 

 

 

Brighthouse Financial, Inc. (U.S.)

 

 

 

 

Equitable Distributors, LLC (U.S.)

 

 

 

 

Lincoln National Corporation (U.S.)

 

 

Fixed Indexed Annuities

 

Corebridge Financial, Inc. (U.S.)

 

 

 

 

Lincoln National Corporation (U.S.)

 

 

 

 

Trans-Oceanic Life Insurance Company (Puerto
   Rico)

 

 

 

 

Universal Life Insurance Company (Puerto Rico)

 

 

Fixed Annuities

 

Corebridge Financial, Inc. (U.S.)

 

 

 

 

Trans-Oceanic Life Insurance Company (Puerto
   Rico)

 

 

 

 

Universal Life Insurance Company (Puerto Rico)

 

 

Segregated Funds underwritten by Primerica

 

Primerica Life Canada (Canada)

 

 

Segregated Funds underwritten by a third-party

 

The Canada Life Assurance Company (Canada)

Corporate and Other Distributed
   Products

 

Mortgage Loans (1)(2)

 

Rocket Mortgage, LLC (U.S.)

 

 

 

 

Spring EQ LLC (U.S.)

 

 

 

 

8Twelve Mortgage Corp. (Canada)

 

 

Prepaid Legal Services

 

Pre-Paid Legal Services, Inc. (U.S. and Canada)

 

 

ID Theft Defense

 

Pre-Paid Legal Services, Inc. (U.S. and Canada)

 

 

Supplemental Health and Accidental Death &
   Disability Insurance

 

The Edge Benefits Inc. and its affiliates (Canada)

 

 

Auto and Homeowners’ Insurance (3)

 

Various insurance companies, as offered through
   Answer Financial, Inc. (U.S.)

 

 

 

 

SurexDirect.com Ltd. (Canada)

 

 

Home Automation Solutions

 

Vivint, Inc. (U.S.)

 

(1)
In the U.S., mortgage loans are made by Rocket Mortgage, LLC and Spring EQ LLC. In Canada, representatives refer mortgage loans to 8Twelve Mortgage Corp.
(2)
In Canada, referrals only.
(3)
In the U.S. and Canada, referrals only.

Term Life Insurance

Through our three life insurance subsidiaries – Primerica Life, NBLIC and Primerica Life Canada – we offer term life insurance to clients in the United States, its territories, and Canada. We are a leading provider of individual term life insurance in the United States.

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We believe that term life insurance is generally a better alternative for middle-income clients than cash value life insurance. Term life insurance provides a guaranteed death benefit if the insured dies during the fixed coverage period of an in-force policy, thereby providing financial protection for his or her named beneficiaries in return for the periodic payment of premiums. Term life insurance products, which are sometimes referred to as pure protection products, have no savings or investment features. By buying term life insurance rather than cash value life insurance, a policyholder pays a lower premium over the level term period and, as a result, may have funds available to invest for retirement and other needs. We also believe that a person’s need for life insurance is inversely proportional to that person’s need for retirement savings, a concept we refer to as the theory of decreasing responsibility. Young adults with children, new mortgages and other obligations need to buy higher amounts of insurance to protect their family from the loss of future income resulting from the death of a primary earner. With its lower premium over the level term period, term life insurance lets young families buy more coverage for their premium dollar when their needs are greatest and still have the ability to have funds for their retirement and other savings goals.

We design our term life insurance products to be easily understood by, and meet the needs of, our clients. Clients purchasing our term life insurance products generally seek stable, longer-term income protection products for themselves and their families. In response to this demand, we offer term life insurance products with initial level-premium coverage periods that range from 10 to 35 years and a wide range of coverage face amounts. Policies remain in-force until expiration of the coverage period or until the policyholder ceases to make premium payments and terminates the policy. Our in-force term life insurance policies have level premiums for the stated term period. As such, the policyholder pays the same amount each year. After the initial policy term, the policyholder has the option to continue coverage by renewing or exchanging his or her contract. Both options result in higher premiums due to the policyholder’s more advanced age.

We introduced our new generation of life insurance products in all jurisdictions in October 2022, except New York where we launched these products in September 2025. The Primerica PowerTerm (“PowerTerm”) product is our rapid issue term life insurance product that provides for face amounts of up to $300,000 (local currency). PowerTerm allows an independent sales representative to submit an application via TurboApps, during which the Company collects information compliant with the Fair Credit Reporting Act (“FCRA”) from external data sources to inform the underwriting process. The Company uses this data and the client’s responses to application questions to determine any additional underwriting requirements. Results of these processes are reported in real time to our underwriting system, which then determines whether or not we can rapidly issue a policy.

We also offer our Primerica PrecisionTerm (“PrecisionTerm”) product, which is our traditionally underwritten term life insurance product for face amounts in excess of $150,000 (local currency). PrecisionTerm allows an independent sales representative to submit an application via TurboApps. The Company then collects information from external data sources that are traditional in nature, excluding credit scores. Most applicants are required to undergo traditional paramedical testing requirements to complete the underwriting process; however, certain applicants may have testing waived based on application and external data information. Policies with face amounts less than or equal to $300,000 and greater than $150,000 may be issued as either PowerTerm or PrecisionTerm products depending on the underwriting method the insured prefers.

 

The average face amount of our in-force policies issued in 2025 was approximately $252,900. The following table sets forth the number of term life insurance policies issued:

 

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

Life insurance issued:

 

 

 

 

 

 

 

 

 

Number of policies issued

 

 

331,787

 

 

 

370,396

 

 

 

358,860

 

 

The following table sets forth selected information regarding our term life insurance product portfolio:

 

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

Life insurance issued:

 

 

 

 

 

 

 

 

 

Face amount issued (in millions)

 

$

111,882

 

$

122,233

 

$

119,102

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

Life insurance in force:

 

 

 

 

 

 

 

 

 

Number of policies in force

 

 

3,010,563

 

 

3,003,909

 

 

2,959,006

 

Face amount in force (in millions)

 

$

967,612

 

$

953,583

 

$

944,609

 

 

Pricing and Underwriting. We believe that effective pricing and underwriting are significant drivers of the profitability of our life insurance business and we have established our pricing assumptions to be consistent with our underwriting practices. We set pricing

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assumptions for expected claims, lapses and expenses based on our experience and other factors, while also considering the competitive environment. These other factors include:

•
expected changes from relevant experience due to changes in circumstances, such as (i) revised underwriting procedures affecting future mortality and reinsurance rates, (ii) new product features, and (iii) revised administrative programs affecting sales levels, expenses, and client continuation or termination of policies; and
•
observed trends in experience that we expect to continue, such as general mortality changes in the general population and better or worse policy persistency (the period over which a policy remains in force) due to changing economic conditions.

Under our current underwriting guidelines, we individually assess each insurable adult applicant and place each applicant into one of ten risk classifications that has specific criteria based on current health, medical history, and other risk factors. We may decline an applicant’s request for coverage if his or her health or activities create unacceptable risks. Our PowerTerm and PrecisionTerm products cover one adult life per policy.

Independent sales representatives ask applicants a series of questions regarding the applicant’s medical history and other risk factors. We may also consider information about the applicant from FCRA compliant third-party sources. If we believe that further information regarding an applicant’s medical history is necessary, we use a third-party provider and its trained personnel to contact the applicant to obtain a more detailed medical history. The report resulting from this process is electronically transmitted to us and is evaluated in our underwriting process. Paramedical requirements may also be required.

To accommodate the significant volume of insurance business that we process, we and the independent sales force use specialized technology. We offer independent sales representatives an electronic life insurance application that supports our term life insurance products. Almost all of the life insurance applications we received in 2025 were submitted electronically via TurboApps. Independent sales representatives may utilize video collaboration tools to assist with the completion of the life insurance application and submit completed applications through TurboApps. Our PowerTerm and PrecisionTerm electronic life insurance applications have technology to streamline the application process and deliver a superior experience by using industry-standard security, identity verification (in the U.S. only), precise and real-time underwriting to speed up processing time and reduce errors in submitted applications. Electronic disclosure delivery and digital client signatures through third-party technology, seamless banking information importation, and simple policy language provide a convenient client experience.

Claims Management. Claims fall into three categories: death, waiver of premium (applicable to disabled policyholders who purchased this benefit for which we agree to waive life insurance premiums during a qualifying disability), or terminal illness. The claim may be reported by an independent sales representative, a beneficiary or, in the case of qualifying disability or terminal illness, the policyholder. Our insurance subsidiaries processed over 17,000 life insurance death benefit claims in 2025 on policies underwritten by us and sold by independent sales representatives. Following are the benefits paid by us for each category of claim:

 

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(In thousands)

 

Death

 

$

1,764,049

 

$

1,793,402

 

$

1,779,822

 

Waiver of premium

 

 

65,191

 

 

61,816

 

 

57,737

 

Terminal illness (1)

 

 

20,674

 

 

20,510

 

 

16,433

 

 

(1)
We consider claims paid for terminal illness to be loans made to the policyholder that are repaid to us from the death benefit upon the death of the insured.

In the United States, after coverage has been in force for two years, we may not contest the policy for misrepresentations in the application. The contestability period for suicide of the insured is one to two years depending on state regulation. In Canada, we have a similar two-year contestability period, but we are permitted to contest insurance fraud at any time. As a matter of policy, we do not contest any coverage issued by Primerica Life to replace the face amount of another insurance company’s individual coverage to the extent the replaced coverage would not be contestable by the replaced company. We believe this approach helps independent sales representatives sell replacement policies, as it reassures clients that claims made under their replacement policies are not more likely to be contested as to the face amount replaced. Through our claims administration system, we record, process and pay the appropriate benefit for any reported claim. Our claims system is used by our home office claims adjusters to order medical and investigative reports from third-party providers, calculate amounts due to the beneficiary (including interest), and report payments to the appropriate reinsurance providers.

Primerica Life and NBLIC regularly consult the Social Security Administration’s Death Master File in accordance with applicable state requirements. These processes help identify potential deceased insureds for whom claims have not been presented in the normal course of business. If unreported deaths are identified, Primerica Life and NBLIC attempt to determine if a valid claim exists, to locate beneficiaries, and to pay benefits accordingly.

Reinsurance. We use reinsurance primarily to reduce the volatility risk with respect to mortality. Since 1994, we have reinsured death benefits in the United States on a first dollar quota share yearly renewable term basis. Since 2012, we have reinsured death benefits in

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Canada on a first dollar quota share yearly renewable term basis. We pay premiums to each reinsurer based on rates in the applicable agreement.

We generally reinsure between 80% and 90% of the mortality risk for all term life insurance policies, excluding coverage under certain riders. We reinsure substandard cases in limited circumstances based on the extensive experience some of our reinsurers have with substandard cases. A substandard case has a level of risk that is acceptable to us, but at higher premium rates than a standard case because of the health, habits or occupation of the applicant.

While most of our reinsurance agreements have indefinite terms, both we and our reinsurers are entitled to discontinue any reinsurance agreement as to future policies by giving advance notice of 90 days to the other party. Each reinsurer’s ability to terminate coverage for existing policies is limited to circumstances such as a material breach of contract or nonpayment of premiums by us. Each reinsurer has the right to increase rates with certain restrictions. If a reinsurer increases rates, we have the right to immediately recapture the business. Either party may offset any balance due from the other party. For additional information on our reinsurance, see Note 1 (Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies) and Note 7 (Reinsurance) to our consolidated financial statements included elsewhere in this report.

Financial Strength Ratings. Ratings with respect to financial strength are an important factor in establishing our competitive position and maintaining public confidence in us and our ability to market products. Ratings organizations review the financial performance and condition of most insurers and provide opinions regarding financial strength, operating performance and ability to meet obligations to policyholders. For additional information, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Financial Ratings.”

Investment and Savings Products

We believe that many middle-income families have significant unmet retirement and savings needs. Independent sales representatives help our clients understand their current financial situations and how they can use time-tested financial principles, such as prioritizing personal savings, to reach their savings goals. Our product offerings include saving and investment vehicles that seek to meet the needs of clients in all stages of life.

Through PFS, PFS Investments, Primerica Life Canada, PFSL Investments Canada, and licensed independent sales representatives, we distribute and sell to our clients a variety of investment products: mutual funds; managed investments; variable, index-linked, fixed and fixed indexed annuities; and segregated funds. As of December 31, 2025, approximately 25,620 independent sales representatives were licensed to distribute mutual funds in the United States (including Puerto Rico) and Canada. As of December 31, 2025, approximately 13,655 independent sales representatives were licensed and appointed to distribute annuities in the United States and approximately 11,136 independent sales representatives were licensed to sell segregated funds in Canada.

Mutual Funds. In the United States, licensed independent sales representatives distribute mutual funds primarily from selected asset management firms that are on our proprietary platform. The selected firms have diversified product offerings, including domestic and international equity, fixed-income and money market funds. Each firm continually evaluates its fund offerings and adds new funds on a regular basis. Additionally, their product offerings reflect diversified asset classes and varied investment styles. We believe that these selected asset management firms provide funds that meet the investment needs of our clients.

During 2025, Franklin Templeton, Invesco, American Funds and Fidelity collectively accounted for approximately 99% of our mutual fund sales in the United States. Franklin Templeton and Invesco each have large wholesaling teams that support the independent sales force in distributing their mutual fund products. Our selling agreements with these firms all have indefinite terms and provide for termination at will.

A wholly owned indirect subsidiary of the Parent Company and affiliate of PFS Investments, Primerica Shareholder Services, Inc. (“PSS”), provides transfer agent recordkeeping services to investors who purchase shares of mutual funds offered by certain of our fund families through PFS Investments. In exchange for these services, PSS receives recordkeeping and account maintenance fees from the applicable fund company. PSS has retained BNY Mellon Asset Servicing to perform the necessary transfer agent recordkeeping services for these accounts on its proprietary SuRPAS system. PFS Investments serves as the Internal Revenue Service (“IRS”) approved non-bank custodian for customers that open individual retirement accounts (“IRAs”) (or certain other retirement accounts) with PFS Investments and invest in shares of mutual funds offered by certain of our fund families. For these services, PFS Investments receives an annual custodian fee.

In Canada, PFSL Investments Canada serves as the exclusive principal distributor for two families of mutual funds (the “PD Funds”) that are managed by well-established, unrelated investment fund managers. The PD Funds are: (i) the AGF Platform Funds, which consist of a range of mutual funds managed by AGF Investments Inc. (“AGF”); and (ii) the Mackenzie FuturePath Funds, which consist of a range of mutual funds managed by Mackenzie Financial Corporation. PFSL Investments Canada has an exclusive right to distribute the PD Funds and, as a principal distributor, it markets the PD Funds through its representatives. Like our U.S. fund family, the PD Funds asset management partners we have chosen in Canada have a diversified offering of equity, fixed-income and money

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market funds, including domestic and international funds with a variety of investment styles. Our model of offering PD Funds from more than one investment fund manager continues to be examined by Canadian regulators and may be modified.

In addition to the PD Funds, under limited circumstances, PFSL Investments Canada can offer investments in mutual funds that it marketed prior to the launch of the PD Funds, which include the Primerica-branded Concert™ Series funds and other non-proprietary funds (collectively, the “Legacy Canada Mutual Funds”). PFSL Fund Management is the Investment Fund Manager of the Concert™ Series funds. These limited circumstances primarily consist of pre-authorized purchases made pursuant to a systematic investment plan for clients already invested in these funds. Our Concert™ Series funds consist of six different asset allocation funds and a money market fund with varying investment objectives. Each Concert™ Series fund is a fund of funds that allocates fund assets among equity, income and money market mutual funds of AGF. The asset allocation within each Concert™ Series fund is determined on an advisory contract basis by a third-party investment advisor.

A key part of our investment philosophy for our clients is the long-term benefits of dollar cost averaging through systematic investing. To accomplish this, we assist our clients by facilitating monthly contributions to their investment accounts by bank drafts against their checking accounts for as little as $25 per month. During the year ended December 31, 2025, average client assets held in individual retirement accounts in the United States and Canada accounted for an estimated 74% and 62%, respectively, of total average client account assets. The Canadian counterpart to IRAs in the United States are Registered Retirement Savings Plans (“RRSPs”). RRSPs and IRAs behave similarly, providing tax advantaged treatment and enabling clients to earn income on a tax-deferred basis. Our high concentration of retirement plan accounts and our systematic savings philosophy are beneficial to us as these accounts tend to have lower redemption rates than the industry and, therefore, generate more recurring asset-based revenues.

In the United States, we also offer Employer Sponsored Retirement Plans (“ESRP”), such as 401(k) plans, primarily to small and medium-sized businesses. The ESRPs we distribute are offered by a limited number of third-party providers, including American Funds Distributors, Inc., Equitable Distributors, LLC and VOYA Financial, Inc., which together account for most of our ESRP business. In addition, we distribute 457(b) plans to governmental entities. Our licensed independent sales representatives generally provide educational and administrative services with respect to ESRPs, which include helping our ESRP clients understand the benefits of offering a tax-deferred retirement plan and assisting their employees to realize the need to save for retirement and the benefits of doing so in an ESRP.

Managed Investments. PFS Investments (dba Primerica Advisors) is a registered investment advisor in the United States, and it offers a managed investments program, Primerica Advisors Lifetime Investment Program (the “Lifetime Investment Program”), which we launched in 2017. The Lifetime Investment Program is a robust advisory offering designed for clients who have at least $25,000 of investable assets. It provides our customers access to investment models designed and managed by several unaffiliated investment advisers. PFS Investments, as sponsor and portfolio manager of the program, evaluates models for inclusion in the program and conducts ongoing due diligence of the models and unaffiliated investment advisers made available through the program. As of December 31, 2025, we used 12 unaffiliated investment advisers. Primerica Brokerage Services, Inc. (“PBSI”), a wholly owned affiliate of Primerica, is the introducing broker-dealer for customer accounts managed through the Lifetime Investment Program. Pershing LLC (“Pershing”), an unaffiliated clearing firm, provides custody, trade execution, clearing, settlement and related services through a fully disclosed clearing agreement with PBSI.

Variable Annuities. U.S. securities licensed independent sales representatives distribute variable annuities issued by American General Life Insurance Company and its affiliates (“Corebridge”), Equitable Financial Life Insurance Company (“Equitable Life”), Lincoln National Life Insurance Company and its affiliates (“Lincoln National”) and Brighthouse Life Insurance Company (“Brighthouse Life”). Variable annuities are insurance products that enable our clients to invest in accounts with attributes similar to mutual funds, but also have benefits not found in mutual funds, including death benefits that protect beneficiaries from losses due to a market downturn and income benefits that guarantee future income payments for the life of the policyholder(s). We also offer index-linked annuities issued by Equitable Life, Brighthouse Life and Lincoln National. Index-linked annuities are insurance contracts that provide investors with potential growth, subject to a cap, and partial downside protection against losses. Gains and losses are measured over a fixed period, typically three to six years, based on the performance of a securities index. Although linked to an index, an investment in these contracts does not involve ownership of any underlying portfolio securities by the client. Each of these companies bears the insurance risk on its variable annuities and index-linked variable annuities that we distribute.

Fixed Indexed Annuities. We offer fixed indexed annuity products in the U.S. through Corebridge, Lincoln National, Trans-Oceanic Life Insurance Company (Puerto Rico) (“Trans-Oceanic Life”), and Universal Life Insurance Company (Puerto Rico) (“Universal Life”). These products combine safety of principal and guaranteed rates of return with additional investment options tied to equity market indices that allow for returns that move based on the performance of an index. We believe these and other fixed annuity products give both life and securities representatives more ways to assist our clients with their retirement planning needs.

Fixed Annuities. In Puerto Rico, we currently offer two fixed annuity products: a fixed annuity and a fixed bonus annuity underwritten by Corebridge, Trans-Oceanic Life, and Universal Life. These products provide guarantees against loss with several income options.

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Segregated Funds. In response to Canadian regulatory changes, we signed an agreement with The Canada Life Assurance Company (“Canada Life”), a third-party insurance company, to distribute segregated fund contracts underwritten by Canada Life. In 2025, we rolled out our distribution of these contracts as our primary segregated fund product offering.

In Canada, we have underwritten segregated fund products, branded as our Common Sense FundsTM, that have some of the characteristics of our variable annuity products distributed in the United States. Our Common Sense FundsTM are underwritten by Primerica Life Canada and offer our clients the ability to participate in a diversified managed investments program that can be opened for as little as $25. While the assets and corresponding liability (reserves) are recognized on our consolidated balance sheets, the assets are held in separate accounts for the benefit of the segregated fund contract owners and are not commingled with the general assets of the Company. As a result of Canadian regulatory changes that became effective in June 2023, sales of segregated funds products underwritten by Primerica Life Canada have significantly decreased.

There are three fund products within our Common Sense FundsTM segregated funds: the Asset Builder Funds, the Strategic Retirement Income Fund (“SRIF”), and a money market fund known as the Cash Management Fund. The investment objective of Asset Builder Funds is long-term capital appreciation combined with some guarantee of principal. Unlike mutual funds, our Asset Builder Funds product guarantees clients at least 75% of their net contributions (net of withdrawals) at the earlier of the date of their death or at the Asset Builder Funds’ maturity date, which is selected by the client. The portfolio consists of both equities and fixed-income securities with the equity component consisting of a pool of primarily large cap Canadian and U.S. equities and the fixed-income component consisting of Canadian federal government zero coupon treasuries and government-backed floating rate notes. The portion of the Asset Builder Funds’ portfolio allocated to zero coupon treasuries are held in sufficient quantity to satisfy the guarantees payable at the maturity date of each Asset Builder Fund. As a result, our potential loss exposure is very low as it comes from the guarantees payable upon the death of the client prior to the maturity date.

The investment objective of the SRIF is to provide income during retirement plus the opportunity for modest capital appreciation. The SRIF product guarantees clients 75% of their net contributions (net of withdrawals) at the earlier of the date of their death or age 100. The portfolio consists of both equities and fixed-income securities, with the equities consisting of a pool of primarily large cap Canadian and U.S. equities that are capped at 25% of the portfolio. The balance is a fixed-income portfolio consisting of investment-grade government and corporate bonds. The high quality of the investments and the percentage cap on equities results in a relatively low potential loss exposure. All accounts in the SRIF are held as Registered Retirement Income Funds which carry government-mandated minimum annual withdrawals. Similar to the Asset Builder Funds, our potential exposure for loss associated with the SRIF is very low because its investment allocations are conservatively aligned with the risks of the client contracts.

The Cash Management Fund invests in government guaranteed short-term bonds and short-term commercial and bank papers, with the principal investment objective being the provision of interest income while maintaining liquidity and preserving capital.

With the guarantee level at 75% and in light of the time until the scheduled maturity of our Common Sense FundsTM segregated funds contracts, we currently do not believe it is necessary to allocate any corporate capital as reserves for segregated fund contract benefits.

Investment and Savings Products Revenue. In the United States, we earn fee revenue from our Investment and Savings Products business in three ways: up front commissions and payments earned on the sale of such products; trailing fees and payments earned based upon client asset values; and account-based revenue. On the sale of mutual funds (not including managed investments) and annuities, we earn a dealer re-allowance or commission on new purchases as well as trail commissions on the assets held in our clients’ accounts. We also receive marketing and distribution fees from most of our mutual fund and annuity providers and asset managers participating in the Lifetime Investment Program. These payments are typically a percentage of sales or a percentage of the clients’ total asset values, or a combination of both. For investments in the Lifetime Investment Program, we receive asset-based fees as compensation for the investment advisory and other administrative services we provide to investors.

As the IRS-approved non-bank custodian for certain funds noted above, PFS Investments receives an annual custodian fee on a per-account basis. As explained above, PSS receives transfer agent recordkeeping fees for the services it provides to the fund families noted above in the “Mutual Funds” section. Recordkeeping fees are received on a per-position basis, so that accounts with multiple fund positions generate a recordkeeping fee for each position.

Because the total amount of these fees fluctuates with the number of such accounts and positions within those accounts, the opening or closing of accounts has a direct impact on our revenues. From time to time, the fund companies for which we provide these services request that accounts or positions with small balances be closed.

In Canada, we earn revenue from the distribution of PD Funds primarily in the form of fees paid based upon client asset values, which include dealer services fees that are paid monthly to us by clients and principal distributor fees which are paid to us on a periodic basis by the PD Funds asset managers. PFSL Investments Canada also earns revenue from sales-based up-front commissions on PD Funds if such commissions are negotiated between investors and PFSL Investments Canada independent sales representatives. PFSL Investments Canada may also earn annual account maintenance fees for PD Funds client accounts under certain conditions. PFSL Investments Canada continues to earn revenue from Legacy Canada Mutual Funds in the form of up-front commissions on mutual fund sales (only if negotiated between the independent sales representative and the investor) and fees based upon client asset values.

14

 

For segregated fund products underwritten by Primerica Life Canada, we earn revenue primarily from fees based upon client asset values in the form of investment advisory fees. For segregated fund contracts underwritten by Canada Life, we receive an ongoing trail commission as well as a revenue share based on the value of the assets in the segregated fund contracts. We may also earn deferred sales charges for early withdrawals at an annual declining rate within seven years of an investor’s contribution date for segregated funds contracts underwritten by Primerica Life Canada and entered into prior to June 2023. We may also earn revenue from sales-based up-front commissions paid by the investor (if such commissions are negotiated between investors and the independent sales representatives) or from sales-based up-front commissions paid by Canada Life (subject to chargeback upon early withdrawal by the investor).

Other Distributed Products

In the United States, we distribute other products, including mortgage loans through mortgage-licensed loan originators, prepaid legal services, auto and homeowners’ insurance referrals and home automation solutions. In Canada, we offer mortgage loan referrals, auto and homeowners’ insurance referrals and insurance offerings for small businesses. While some of these products are Primerica-branded, all of them are underwritten or otherwise provided by a third party.

We have a contractual arrangement with Rocket Mortgage, LLC (“Rocket Mortgage”), a mortgage lender, whereby Primerica Mortgage, LLC (“Primerica Mortgage”), a state-licensed mortgage broker, offers refinance mortgages, purchase-money, and second mortgages through its mortgage loan originator licensed representatives. We also have a program with Spring EQ LLC, a mortgage lender, whereby Primerica Mortgage offers second mortgages and home equity lines of credit through its mortgage loan originator licensed representatives. In 2025, we continued to expand our mortgage program into new states.

We receive compensation from the mortgage lenders for each closed loan based on a fixed percentage of the loan amount (subject to regulatory maximums) for mortgage brokering services provided and pay compensation to the representatives for services rendered, also based on a fixed percentage of the loan amount.

We offer our U.S. and Canadian clients a Primerica-branded prepaid legal services program on a subscription basis that is underwritten and provided by Pre-Paid Legal Services, Inc. The prepaid legal services program offers a network of attorneys in all states, and certain provinces and territories, to assist subscribers with legal matters such as drafting wills, living wills and powers of attorney, trial defense and motor vehicle-related matters. We receive commissions based on sales and renewals of these subscriptions and pay compensation to the representatives based on commissions we collect.

We have a contractual arrangement with Answer Financial, Inc. (“Answer Financial”), an independent insurance agency, whereby U.S. independent sales representatives refer clients to Answer Financial to receive multiple, competitive auto and homeowners’ insurance quotes. Answer Financial’s comparative quote process allows clients to easily identify the underwriter that is most competitively priced for their type of risk. We receive commissions based on completed auto and homeowners’ placement of insurance and policy renewals and pay independent sales representatives a flat referral fee for each completed application and policy renewal.

We have a contractual arrangement with Vivint, Inc. (“Vivint”), a company that offers homeowners in the U.S. a comprehensive suite of products and services to protect and remotely control, monitor and manage their homes using any Internet-connected smart device. We receive commissions based on referrals that result in a subscription to Vivint’s home services and pay independent sales representatives a referral fee for each such subscription.

In the Canadian provinces of Alberta, Ontario and British Columbia (with respect to homeowners’ insurance only), we have an arrangement with SurexDirect.com Ltd. (“Surex Direct”), an independent insurance agency, whereby independent sales representatives refer clients to Surex Direct to receive multiple, competitive auto, commercial, and homeowners’ insurance quotes. Surex Direct’s comparative quote process allows clients to easily identify the underwriter that is most competitively priced for their type of risk. We receive referrals based on completed auto, commercial, and homeowners’ placement of insurance and policy renewals and pay independent sales representatives a flat referral fee for each completed application and policy renewal.

In Canada, we have a referral program for mortgage loan products offered by third-party lender 8Twelve Mortgage Corp. Due to regulatory requirements, independent sales representatives in Canada only refer clients to the lender and are not involved in the loan application and closing process. We receive referral fees based on the funded loan amount and, in turn, pay a commission to independent sales representatives.

In Canada, we offer insurance products, including supplemental medical and dental, accidental death, and disability, to small businesses. These insurance products are underwritten and provided by The Edge Benefits Inc. and its affiliates. We receive a commission based on sales and renewals of these policies.

Regulation

Our business is subject to extensive laws and governmental regulations, including administrative determinations, court decisions and similar constraints. The purpose of the laws and regulations affecting our business is primarily to protect our clients and other

15

 

consumers. Many of the laws and regulations to which we are subject are regularly re-examined, and existing or future laws and regulations may become more restrictive or otherwise adversely affect our operations.

Regulatory authorities periodically make inquiries regarding compliance by us and our subsidiaries with insurance, securities, mortgage and other laws and regulations regarding the conduct of our insurance, securities, and mortgage businesses. At any given time, a number of financial or market conduct examinations of our subsidiaries may be ongoing. We cooperate with such inquiries and take corrective action when warranted.

Regulation of Our Insurance Business. Primerica Life, as a Tennessee-domiciled insurer, is regulated by the Tennessee Department of Commerce and Insurance and is licensed to transact business in the United States (except New York), and most U.S. territories. NBLIC, as a New York-domiciled life insurance underwriting company and a wholly owned subsidiary of Primerica Life, is regulated by the New York State Department of Financial Services and is licensed to transact business in all 50 U.S. states, the District of Columbia and the U.S. Virgin Islands.

State insurance laws and regulations regulate all aspects of our U.S. insurance business. Such regulation is vested in state agencies having broad administrative and, in some instances, discretionary power dealing with many aspects of our business, which may include, among other things, premium rates and increases thereto, reserve requirements, marketing practices, advertising, privacy, policy forms, algorithmic underwriting, grace periods, reinsurance reserve requirements, acquisitions, mergers, and capital adequacy.

Our U.S. insurance subsidiaries are required to file certain annual, quarterly and periodic reports with the supervisory agencies in the jurisdictions in which they do business, and their business and accounts are subject to examination by such agencies at any time. These examinations generally are conducted under National Association of Insurance Commissioners (“NAIC”) guidelines. Under the rules of these jurisdictions, insurance companies are examined periodically (generally every three to five years) by one or more of the supervisory agencies on behalf of the states in which they do business. Our most recently completed examinations of the financial condition and affairs of Primerica Life and NBLIC, as well as Vidalia Re, Inc. (“Vidalia Re”), a special purpose financial captive insurance company and wholly owned subsidiary of Primerica Life, performed by the respective domiciliary state insurance departments for the fiscal years ended December 31, 2015 through December 31, 2019, were completed during 2021 with no material findings or recommendations noted. As of December 31, 2025, Primerica Life, NBLIC, and Vidalia Re were undergoing regularly scheduled financial condition examinations for the fiscal years ended December 31, 2020 through December 31, 2024 by the respective domiciliary state insurance departments.

Primerica Life Canada is federally incorporated and provincially licensed and is required to file periodic reports with Canadian regulatory agencies. It transacts business in all Canadian provinces and territories. Primerica Life Canada is regulated federally by the Office of the Superintendent of Financial Institutions Canada (“OSFI”) and provincially by the Superintendents of Insurance for each province and territory. Canadian federal and provincial insurance laws regulate all aspects of our Canadian insurance business. OSFI regulates insurers’ corporate governance, financial and prudential oversight, and regulatory compliance, while provincial and territorial regulators oversee insurers’ market conduct practices and related compliance.

Primerica Life Canada files quarterly and annual financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”) and other locally accepted standards with OSFI in compliance with legal and regulatory requirements. OSFI conducts periodic detailed examinations of insurers’ business and financial practices, including the control environment, internal and external auditing and capital adequacy, surpluses and related testing, legislative compliance and appointed actuary requirements. These examinations also address regulatory compliance with anti-money laundering practices, outsourcing, related-party transactions, privacy and corporate governance. Provincial regulators conduct periodic market conduct examinations of insurers doing business in their jurisdictions.

In addition to federal and provincial oversight, Primerica Life Canada is also subject to the guidelines set out by the Canadian Life and Health Insurance Association (“CLHIA”). CLHIA is an industry association that works closely with federal and provincial regulators to establish market conduct guidelines and sound business and financial practices addressing matters such as independent sales representative suitability and screening, insurance illustrations and partially guaranteed savings products.

The laws and regulations governing our U.S. and Canadian insurance businesses include numerous provisions governing the marketplace activities of insurers, including policy filings, payment of insurance commissions, disclosures, advertising, product replacement, sales and underwriting practices and complaints and claims handling. The state insurance regulatory authorities in the United States and the federal and provincial regulators in Canada generally enforce these provisions through periodic market conduct examinations.

In addition, most U.S. states and Canadian provinces and territories, as well as the Canadian federal government, have laws and regulations governing the financial condition of insurers, including standards of solvency, types and concentration of investments, establishment and maintenance of reserves, reinsurance and requirements of capital adequacy. As discussed previously, U.S. state insurance law and Canadian provincial insurance law also require certain licensing of insurers and their agents.

Insurance Holding Company Regulation; Limitations on Dividends. The states in which our U.S. insurance subsidiaries are domiciled have enacted legislation and adopted regulations regarding insurance holding company systems. These laws require registration of,

16

 

and periodic reporting by, insurance companies domiciled within the jurisdiction that control, or are controlled by, other corporations or persons so as to constitute an insurance holding company system. These laws also affect the acquisition of control of insurance companies as well as transactions between insurance companies and companies controlling them.

The Parent Company is a holding company that has no significant operations. Our primary asset is the capital stock of our subsidiaries, and our primary liability is $600.0 million in principal amount of senior unsecured notes (the “Senior Notes”). As a result, we depend on dividends or other distributions from our insurance and other subsidiaries as the principal source of cash to meet our obligations, including the payment of interest on, and repayment of, principal of any debt obligations.

The states in which our U.S. insurance subsidiaries are domiciled impose certain restrictions on our insurance subsidiaries’ ability to pay dividends to us. In Canada, dividends can be paid subject to the paying insurance company’s continuing compliance with regulatory requirements and upon notice to OSFI. We determine the dividend capacity of our insurance subsidiaries using statutory accounting principles (“SAP”) promulgated by the NAIC and each subsidiary’s domiciliary state in the United States and using IFRS in Canada.

The following table sets forth the amount of cash and distributions paid or payable by our direct insurance subsidiaries:

 

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(In thousands)

 

Primerica Life

 

$

271,700

 

$

290,000

 

$

330,000

 

Primerica Life Canada

 

 

45,256

 

 

21,759

 

 

22,348

 

 

For additional information on dividend capacity and restrictions, see Note 17 (Statutory Accounting and Dividend Restrictions) to our consolidated financial statements included elsewhere in this report.

Policy and Contract Reserve Sufficiency Analysis. Under the laws and regulations of their jurisdictions of domicile, our U.S. insurance subsidiaries are required to conduct annual analyses of the sufficiency of their life insurance statutory reserves. In addition, other U.S. jurisdictions in which our U.S. subsidiaries are licensed may have certain reserve requirements that differ from those of their domiciliary jurisdictions. In each case, a qualified actuary must submit an opinion that states that the aggregate statutory reserves, when considered in light of the assets held with respect to such reserves, make good and sufficient provision for the associated contractual obligations and related expenses of the insurer. If such an opinion cannot be provided, then the affected insurer must set up additional reserves by moving funds from surplus. Our U.S. insurance subsidiaries most recently submitted these opinions without qualification to applicable insurance regulatory authorities.

Primerica Life Canada is also required to conduct regular analyses of the sufficiency of its life insurance statutory reserves. Life insurance reserving and reporting requirements are completed by Primerica Life Canada’s appointed actuary. Materials provided by the appointed actuary are filed with OSFI as part of our annual filing and are subject to OSFI’s review. Based upon this review, OSFI may institute remedial action against Primerica Life Canada as OSFI deems necessary. Primerica Life Canada has not been subject to any such remediation or enforcement by OSFI.

Surplus and Capital Requirements. U.S. insurance regulators have the discretionary authority, in connection with the ongoing licensing of our U.S. insurance subsidiaries, to limit or prohibit the ability of an insurer to issue new policies if, in the regulators’ judgment, the insurer is not maintaining a minimum amount of surplus or is in hazardous financial condition. Insurance regulators may also limit the ability of an insurer to issue new life insurance policies and annuity contracts above an amount based upon the face amount and premiums of policies of a similar type issued in the prior year. We do not believe that the current or anticipated levels of statutory surplus of our U.S. insurance subsidiaries present a material risk that any such regulator would limit the amount of new policies that our U.S. insurance subsidiaries may issue.

The NAIC has established risk-based capital (“RBC”) standards for U.S. life insurance companies, as well as a risk-based capital model act (the “RBC Model Act”) that has been adopted by the state insurance regulatory authorities. The RBC Model Act provides that life insurance companies must submit an annual RBC report to state regulators regarding their RBC based upon four categories of risk: asset risk; insurance risk; interest rate risk; and business risk. For each category, the capital requirement is determined by applying factors that vary based upon the degree of risk to various asset, premium and policy benefit reserve items. The formula is intended to be used by insurance regulators as an early warning tool to identify possible weakly capitalized companies for purposes of initiating further regulatory action. If an insurer’s RBC falls below specified levels, then the insurer would be subject to different degrees of regulatory action depending upon the level. These actions range from requiring the insurer to propose actions to correct the capital deficiency to placing the insurer under regulatory control.

In Canada, OSFI has authority to request an insurer to enter into a prudential agreement implementing measures to maintain or improve the insurer’s safety and soundness. OSFI also may issue orders to an insurer directing it to refrain from unsafe or unsound practices or to take action to remedy financial concerns. OSFI has neither requested that Primerica Life Canada enter into any prudential agreement nor issued any order against Primerica Life Canada.

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In Canada, OSFI requires federally-regulated life insurance companies to maintain adequate capital in accordance with regulatory Capital Guidelines. The Capital Guidelines define and establish criteria and limits for determining an insurer’s required capital to support defined risks and the amount of qualifying regulatory available capital. In addition, OSFI requires companies to set internal target levels of capital sufficient to provide for all risks of the insurer, including risks specified in OSFI’s Capital Guidelines.

NAIC Pronouncements and Reviews. The NAIC promulgates model insurance laws and regulations for adoption by the states in order to standardize insurance industry accounting and reporting guidance. Although many state regulations emanate from NAIC model statutes and pronouncements, SAP continue to be established by individual state laws, regulations and permitted practices. Certain changes to NAIC model statutes and pronouncements, particularly as they affect accounting issues, may take effect automatically without affirmative action by a given state. With respect to some financial regulations and guidelines, non-domiciliary states sometimes defer to the interpretation of the insurance department of the state of domicile. However, neither the action of the domiciliary state nor the action of the NAIC is binding on a non-domiciliary state. Accordingly, a non-domiciliary state could choose to follow a different interpretation.

The NAIC has established guidelines to assess the financial strength of insurance companies for U.S. state regulatory purposes. The NAIC conducts annual reviews of the financial data of insurance companies primarily through the application of certain financial ratios prepared on a statutory basis. The annual statements are submitted to state insurance departments to assist them in monitoring insurance companies in their states.

Statutory Accounting Principles. SAP is a basis of accounting developed by U.S. insurance regulators to monitor and regulate the solvency of insurance companies. In developing SAP, insurance regulators were primarily concerned with evaluating an insurer’s ability to pay all of its current and future obligations to policyholders. As a result, statutory accounting focuses on conservatively valuing the assets and liabilities of insurers, generally in accordance with standards specified by the insurer’s domiciliary jurisdiction. Uniform statutory accounting practices are established by the NAIC and generally adopted by regulators in the various U.S. jurisdictions. These accounting principles and related regulations determine, among other things, the amounts our insurance subsidiaries may ultimately pay to us as dividends, and they differ in many instances from U.S. generally accepted accounting principles (“U.S. GAAP”), which are designed to measure a business on a going-concern basis. Under U.S. GAAP, incremental direct costs of successful policy acquisitions are capitalized when incurred and then amortized over the life of the associated policies. The valuation of assets and liabilities under U.S. GAAP is based in part upon best estimate assumptions made by the insurer. U.S. GAAP-basis stockholders’ equity represents the ownership interest in the U.S. GAAP-measured net assets held by stockholders. As a result, the values for assets, liabilities and equity reflected in financial statements prepared in accordance with U.S. GAAP will be different from those reflected in financial statements prepared under SAP.

State Insurance Guaranty Funds Laws. Under most state insurance guaranty fund laws, insurance companies doing business therein can be assessed up to prescribed limits for policyholder losses incurred by insolvent companies. Most insurance guaranty fund laws currently provide that an assessment may be excused or deferred if it would threaten an insurer’s own financial strength. In addition, assessments may be partially offset by credits against future state premium taxes.

Other Regulatory Changes. From time to time, various jurisdictions make changes to the state or provincial licensing examination process that may make it more difficult for independent sales representatives to obtain their life insurance licenses. In addition, certain jurisdictions have passed laws or proposed regulations that require insurers and insurance agents in the sale of life insurance, including term life insurance and annuities, to disclose conflicts of interest to consumers or meet standards of care requiring that their advice be in the customer’s best interest. The impact on our business and the level of resources necessary to conform to such new regulations will vary depending on the extent of changes required and the jurisdictions that adopt such regulations.

Regulation of Our Investment and Savings Products Business. PFS Investments is registered with, and regulated by, FINRA and the Securities and Exchange Commission (“SEC”) as a broker-dealer. PFS Investments operates as an introducing broker-dealer, which does not hold client accounts. As an investment adviser, PFS Investments is registered with and regulated by the SEC and markets its advisory services under the name Primerica Advisors. PFS Investments also is subject to regulation by the Department of Labor (“DOL”) with respect to certain retirement plans, and by state securities agencies.

PFS Investments is registered in all 50 U.S. states and certain territories. All aspects of PFS Investments’ business are regulated, including sales methods and charges, trade practices, the use and safeguarding of customer securities, capital structure, recordkeeping, data protection, conduct and supervision of registered representatives.

PFS Investments is required to file quarterly reports as well as annual audited financial statements with the SEC pursuant to Section 17 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 17a-5 thereunder. PFS Investments is subject to minimum net capital requirements, as mandated by Rule 15c3‑1 of the Exchange Act.

In the United States, clients acquire securities products from PFS Investments in either a brokerage or advisory relationship. In a brokerage relationship, a PFS Investments registered representative making recommendations is subject to a “best interest” standard under SEC regulations and FINRA rules and, in some cases, state rules. PFS Investments markets mutual funds and variable annuities on a brokerage basis. In an advisory relationship, namely our managed investment offerings, PFS Investments and its investment advisory representative have a fiduciary obligation to the client and conduct ongoing monitoring of the client’s investments. PFS

18

 

Investments’ independent sales representatives making recommendations with respect to retirement accounts also may have fiduciary obligations under DOL regulations.

 

In its capacity as a non-bank IRA custodian, PFS Investments is regulated by the IRS.

 

PBSI is registered with, and regulated by, FINRA and the SEC, and is registered in all 50 U.S. states and certain territories. PBSI operates as the introducing broker-dealer for the accounts managed through the Lifetime Investment Program and does not hold customer accounts. PBSI introduces all accounts to Pershing, an unaffiliated clearing firm that provides order execution, custody, clearing, settlement and related services to PBSI’s customers. PBSI is required to file quarterly reports as well as annual audited financial statements with the SEC pursuant to Section 17 of the Exchange Act, and Rule 17a-5 thereunder. PBSI is subject to minimum net capital requirements as mandated by Rule 15c3‑1 of the Exchange Act.

PSS is registered with the SEC as a transfer agent and, accordingly, is subject to SEC rules and examinations. Acting in this capacity, PSS provides certain shareholder services to mutual fund accounts held on the PSS platform.

PFSL Investments Canada is a mutual fund dealer registered with and regulated by the Canadian Investment Regulatory Organization (“CIRO”), the national self-regulatory organization that overseas all investment dealers, mutual fund dealers and trading activity on Canada’s debt and equity marketplaces. PFSL Investments Canada is also registered with provincial and territorial securities commissions throughout Canada (collectively referred to as the Canadian Securities Administrators (“CSA”)). As a registered mutual fund dealer, PFSL Investments Canada performs the suitability review of mutual fund investment recommendations, and like our U.S. broker-dealers, it does not hold client accounts. PFSL Investments Canada is subject to the rules and regulations established by the CSA for the sale of securities, which include standards of conduct for the firm and its independent sales representatives.

PFSL Investments Canada is required to file monthly and annual financial statements and reports with CIRO that are prepared to comply with the prescribed CIRO reporting requirements. CIRO has established a risk adjusted capital standard for mutual fund dealers. Its formula is designed to provide advance warning of a member encountering difficulties. If a mutual fund dealer falls below specified levels, then restrictions would apply until rectified, including not being able to act on certain matters without prior written consent from CIRO.

The independent sales representatives in Canada are required to be registered in the provinces and territories in which they do business, including regulation by the Autorité des marchés financiers in Quebec, and are also subject to regulation by CIRO. These regulators have broad administrative powers, including the power to limit or restrict the conduct of our business and impose censures or fines for failure to comply with the law or regulations.

PFSL Fund Management in Canada is registered as an Investment Fund Manager in connection with our Concert™ Series mutual funds and is regulated by provincial securities commissions.

PFSL Fund Management is required to file quarterly and annual financial statements with the Ontario Securities Commission (“OSC”) prepared to meet the requirements of National Instrument 31-103, Registration Requirements, Exemptions and Ongoing Registrant Obligations, based on the financial reporting framework specified in National Instrument 52-107, Acceptable Accounting Principles and Auditing Standards. PFSL Fund Management is required to maintain a minimum level of capital and file its quarterly and annual calculation of excess working capital with the OSC. As an Investment Fund Manager, PFSL Fund Management is required to file periodic reports with provincial and territorial securities commissions throughout Canada for its Concert™ Series mutual funds. Such reports include semi-annual and annual financial statements prepared in accordance with IFRS.

Segregated funds underwritten by Primerica Life Canada are separate accounts of Primerica Life Canada, are regulated by OSFI, and are included as part of the quarterly and annual financial statement filings for Primerica Life Canada. In addition, these segregated funds are subject to the guidelines set out by the CLHIA.

Regulation of Our Mortgage Brokerage Business. In the United States, state mortgage banking, brokering and lending laws regulate our mortgage brokerage business. Primerica Mortgage is regulated in the U.S. at the state and local level by state banking commissioners and other equivalent regulators and at the federal level principally by the Consumer Financial Protection Bureau. Our mortgage brokerage business must comply with the laws, rules and regulations, as well as judicial and administrative decisions, in all of the jurisdictions in which we are licensed to offer mortgage loans, as well as an extensive body of federal laws and regulations. These state and federal laws and regulations address the type of loan products that can be offered to consumers through predatory lending and high cost loan laws and the type of licenses that must be obtained by individuals and entities seeking to solicit mortgage loan applications from consumers. As a mortgage broker licensee, Primerica Mortgage is subject to periodic examinations by regulators.

To offer mortgage loan products, Primerica Mortgage must hold an active mortgage company license in each state in which mortgage products are offered. Independent sales representatives engaged in the mortgage loan brokerage business must also be individually licensed as mortgage loan originators (and in some states also licensed as mortgage brokers) by each state in which they do business and be sponsored in the Nationwide Multistate Licensing System to conduct mortgage loan brokerage business exclusively on behalf of Primerica Mortgage.

19

 

In addition, our mortgage brokerage business is subject to various other federal laws, including the Truth In Lending Act and its implementing regulation, Regulation Z, the Equal Credit Opportunity Act and its implementing regulation, Regulation B, the Fair Housing Act and the Home Ownership Equity Protection Act. We are also subject to the Real Estate Settlement Procedures Act and its implementing regulation, Regulation X, which requires timely disclosures related to the nature and costs of real estate settlement amounts and, along with the Truth In Lending Act and its implementing regulation, Regulation Z, limits those costs, compensation, and incentives to amounts unrelated to the terms of a mortgage loan and reasonably related to the services performed. We are also subject to the Dodd-Frank Wall Street Reform and Consumer Protection Act and its implementing regulations.

In Canada, our loan activities are more limited and the independent sales representatives only provide mortgage loan referrals to 8Twelve Mortgage Corp. The independent sales representatives are not required to obtain mortgage loan licensure from any regulatory entity to make these referrals.

Other Laws and Regulations. Our business is subject to a number of additional laws and regulations.

The USA Patriot Act of 2001 (the “Patriot Act”) contains anti-money laundering and financial transparency laws and mandates the implementation of various regulations applicable to broker-dealers and other financial services companies, including insurance companies. The Patriot Act seeks to promote cooperation among financial institutions, regulators and law enforcement entities in identifying parties that may be involved in terrorism or money laundering.

U.S. federal and state laws and regulations require financial institutions, including insurance companies, to protect the security and confidentiality of consumer financial information and to notify consumers about their policies and practices relating to their collection and disclosure of consumer information and their policies relating to protecting the security and confidentiality of that information. Similarly, federal and state laws and regulations also govern the disclosure and security of consumer health information. In particular, regulations promulgated by the U.S. Department of Health and Human Services regulate the disclosure and use of protected health information by health insurers and others (including certain life insurers), the physical and procedural safeguards employed to protect the security of that information and the electronic storage and transmission of such information. Congress and state legislatures are expected to consider additional legislation relating to privacy and other aspects of consumer information.

The Federal Trade Commission, through the Federal Trade Commission Act, is responsible for protecting consumers and competition by preventing anticompetitive, deceptive, and unfair business practices. This includes regulation of deceptive trade practices such as pyramiding and unsubstantiated earnings or lifestyle claims in advertisements, including on social media.

The Gramm-Leach-Bliley Act (“GLBA”) regulates the use and disclosure of certain data that we collect from consumers, and it requires us to provide consumers with notice regarding how their nonpublic personal health and financial information is used and the opportunity to “opt out” of certain disclosures before sharing such information with third parties. GLBA generally requires safeguards for the protection of personal information.

The Telephone Consumer Protection Act of 1991 restricts telemarketing and the solicitation of customers without proper consent.

The Financial Consumer Agency of Canada (“FCAC”), a Canadian federal regulatory body, is responsible for ensuring that federally regulated financial institutions, which include Primerica Life Canada, comply with federal consumer protection laws and regulations, voluntary codes of conduct and their own public commitments. The Financial Transactions and Reports Analysis Centre of Canada is Canada’s financial intelligence unit. Its mandate includes ensuring that entities subject to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act comply with reporting, recordkeeping and other obligations under that act. We are also subject to privacy laws under the jurisdiction of federal and provincial privacy commissioners and the consumer complaints provisions of federal insurance laws under the mandate of the FCAC, which requires insurers to belong to a complaints ombud-service and file a copy of their complaints handling policy with the FCAC.

Competition

We operate in a highly competitive environment with respect to the sale of financial products and the retention of the more productive members of the independent sales force. Competitors with respect to our term life insurance products consist both of stock and mutual insurance companies, as well as other financial intermediaries. Competitive factors affecting the sale of life insurance products include the level of premium rates, benefit features, risk selection practices, compensation of independent sales representatives and financial strength ratings from ratings agencies such as A.M. Best.

In offering our securities products, independent sales representatives compete with a range of other advisers, broker-dealers and direct channels, including wirehouses, regional broker-dealers, independent broker-dealers, insurers, banks, asset managers, registered investment advisers, mutual fund companies and other direct distributors. The mutual funds that we offer face competition from other mutual fund families and alternative investment products, such as exchange-traded funds, while our managed investment programs compete with other fee-based advisory services offered by financial services firms. Our annuity products compete with products from numerous other companies. Competitive factors affecting the sale of annuity products include price, product features, investment performance, commission structure, perceived financial strength, claims-paying ratings, service and distribution capabilities.

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Privacy and Information Security

Our business prioritizes maintaining a secure, confidential environment for our clients, employees and other partners’ information. We have built sophisticated information technology platforms to support our clients and operations and the independent sales force. Our data center houses an enterprise-class IBM mainframe as well as modern distributed and cloud technology infrastructure. Our business applications, many of which are proprietary, are supported by application developers and data center staff.

Primerica’s information security teams provide services, including project consulting, threat management, application and infrastructure assessments, secure configuration management, and information security administration. Additionally, we support advanced business continuity and disaster recovery capabilities.

For a discussion of the Company’s risk management, strategy, and governance related to cybersecurity, see “Item 1C. Cybersecurity”, which is incorporated herein by reference.

Human Capital Management

Employees

General. The following table provides information about our 2,833 employees as of December 31, 2025.

 

 

U.S.

 

 

Canada

 

Full-time employees

 

 

2,014

 

 

 

287

 

Part-time employees

 

 

16

 

 

 

-

 

On-call and temporary employees (1)

 

 

500

 

 

 

16

 

Total

 

 

2,530

 

 

 

303

 

 

(1)
Represents employees who provided services on an as-needed or temporary basis.

The following table provides information about the diversity of our U.S. employees(1) at December 31, 2025:

 

 

Female

 

 

Male

 

 

Asian/Pacific Islander

 

 

Black or African American

 

 

Hispanic or Latino

 

 

Other (6)

 

 

White

 

Executive Management (2)

 

 

52.4

%

 

 

47.6

%

 

 

6.0

%

 

 

11.9

%

 

 

2.4

%

 

 

0.0

%

 

 

79.7

%

Non-Executive Management (3)

 

 

60.9

%

 

 

39.1

%

 

 

5.7

%

 

 

24.4

%

 

 

9.3

%

 

 

0.0

%

 

 

60.6

%

Professionals (4)

 

 

54.9

%

 

 

45.1

%

 

 

18.3

%

 

 

25.6

%

 

 

8.4

%

 

 

2.2

%

 

 

45.5

%

All Other Employees (5)

 

 

69.0

%

 

 

31.0

%

 

 

5.4

%

 

 

36.9

%

 

 

16.6

%

 

 

4.4

%

 

 

36.7

%

 

 

 

62.8

%

 

 

37.2

%

 

 

9.4

%

 

 

30.7

%

 

 

12.5

%

 

 

2.9

%

 

 

44.5

%

 

(1)
Reflects U.S. employees only as comparable data is not required by law to be collected in Canada.
(2)
Includes Primerica employees at the Senior Vice President level and above.
(3)
Includes Primerica employees at the Assistant Vice President and Vice President levels, and non-Assistant Vice President managers.
(4)
All remaining exempt (as defined by the Fair Labor Standards Act) employees.
(5)
All remaining non-exempt employees.
(6)
Includes employees with two or more races and employees who choose not to disclose their race.

 

The Corporate Governance Committee (the “Corporate Governance Committee”) of our Board of Directors (the “Board of Directors” or “Board”) has responsibility for oversight of our human capital management initiatives. Our Chief People Officer is responsible for the development and implementation of our human capital management strategy. Identifying, developing, and fostering a diverse workforce is at the center of our efforts to ensure that all employees have opportunities that allow them to learn, grow and thrive at Primerica.

Primerica prides itself on having a collaborative culture with our employees. As such, none of our employees are members of any labor union, and we have never experienced any business interruption as a result of any labor disputes. For a more detailed description of our employee initiatives, see our 2025 Corporate Sustainability Report (available at https://investors.primerica.com), which is not incorporated by reference into this report or any filings with the SEC into which this report is incorporated by reference.

Talent Development. A core strength is that many of our employees, including our executives, have been with Primerica for over 20 years. The result of this longevity and loyalty is that many of our long-term executives and employees will reach retirement age over the coming years. Executive management continues to be focused on enhancing succession planning and talent pipeline identification and development both through the hiring of external talent and internal programs. The Corporate Governance Committee has responsibility for oversight of our talent development strategy. The Corporate Governance Committee meets regularly with our Chief People Officer and endeavors to interact regularly with rising talent.

Compensation and Total Rewards. Primerica’s compensation philosophy is designed to attract, retain and motivate highly competent employees at all levels through compensation programs and practices. For 2025, approximately 740 of our employees participated in

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an annual incentive program that reflects both corporate performance and individual achievement. Incentive awards to officers are paid in both cash and equity (with a higher proportion being paid in equity for higher level officers) while Assistant Vice Presidents, managers, and senior level professionals receive all of their incentive awards in cash. All other employees can qualify for cash bonuses based on individual achievement.

Among other things, our employee benefits package includes health and dental insurance, various paid-leave options, parental leave, a robust employee assistance program, and a 401(k) retirement savings plan with a generous company match.

Employee Engagement and Wellness. Employees are highly satisfied at Primerica, as evidenced by our employee retention rate in 2025 of 91%. Further, we were recognized as a regional Top Workplace by the Atlanta Journal-Constitution for twelve consecutive years from 2014 through 2025. From 2021 through 2025, we were also nationally recognized as a Top Workplace USA by the employee engagement service partner that conducted the regional survey. In 2024 and 2025, we were recognized by Newsweek as one of America’s Greatest Workplaces and one of America’s Greatest Workplaces for Diversity. In 2024, Newsweek also recognized us as one of America’s Greatest Workplaces for Women. Forbes awarded us one of America’s Best Midsize Employers in 2024 and 2025. From 2019 through 2025, we were recognized by Forbes as a Best Employer for Women, and we were named to the Bloomberg Gender Equality Index from 2020 through 2023. In 2026 and for the first time, we were named by Forbes as one of Canada’s Best Employers. In order to monitor employee satisfaction, we conduct annual employee surveys and provide detailed results to managers and our Board of Directors. Changes to policies, programs, and benefits packages are made based on this feedback. In addition, each year we hold a town hall meeting at our U.S. headquarters in Duluth, Georgia that is broadcast virtually to all of our workplace locations. A town hall meeting is also held annually at our Canadian headquarters for our employees in Canada. At both town hall meetings, employees hear updates on the Company’s performance and strategic direction, as well as information on benefits enhancements, policy changes, and other workplace topics. Employees have the opportunity to ask questions of senior management and are encouraged to raise issues of concern and offer suggestions for improvement.

Independent Contractors. A description of the independent sales force is included elsewhere in this section. See “— Our Distribution Model”, “— Recruitment of Independent Sales Representatives”, “— Sales Force Motivation, Training, Communication and Sales Support Tools” “— Performance-Based Compensation Structure” and “— Supervision and Compliance.” The independent sales force is extremely diverse, as it reflects the communities in which the independent sales representatives live and work. Further, the independent sales force utilizes strategic market groups to encourage professional and personal growth and development, including Women in Primerica, the African American Leadership Council, the Hispanic American Leadership Council and the Asian-Pacific and Islanders Leadership Council, which we refer to as our Strategic Markets. These groups provide opportunities for networking and mentorship, sales and business management training and deep learning opportunities customized for these respective market segments. For a more detailed description of sales force initiatives, see our 2025 Corporate Sustainability Report on our investor relations website (https://investors.primerica.com), which is not incorporated by reference into this report or any filings with the SEC into which this report is incorporated by reference.

Board of Directors. We strive to offer an inclusive business environment that benefits from diversity of opinions, skills, backgrounds and personal experiences. This also holds true for our Board, which is comprised of individuals from an array of backgrounds and with different areas of expertise that best serves our business and the middle-income market. Pursuant to our Corporate Governance Guidelines, we seek the most qualified individuals for our Board who can enhance discussion and decision-making processes and improve oversight of the Company’s business, strategy and governance. The Board believes that diverse ideas drive better client solutions, innovation and business results. Our Corporate Governance Guidelines are available on our investor relations website (https://investors.primerica.com).

Available Information

We make available free of charge on our investor relations website (https://investors.primerica.com) our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, exhibits and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable upon filing such information with, or furnishing it to, the SEC. The Company’s reports are also available on the SEC’s website (www.sec.gov). The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, at www.sec.gov. We routinely post financial and other information, including information about our corporate responsibility and sustainability efforts on the investor relations page of our corporate website (https://investors.primerica.com). Information included on any Company websites is not incorporated by reference into this report or any other filings with the SEC into which this report is incorporated by reference.

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ITEM 1A. RISK FACTORS.

 

Risks Related to Our Distribution Structure

 

Our failure to continue to attract new recruits, retain independent sales representatives or license or maintain the licensing of independent sales representatives would materially adversely affect our business, financial condition and results of operations.

New independent sales representatives provide us with access to new clients, enable us to increase sales and provide the next generation of successful independent sales representatives. As is typical with distribution businesses, we experience a high rate of turnover among part-time independent sales representatives, which requires us to attract, retain and motivate a large number of independent sales representatives. Recruiting is performed by current independent sales representatives, and the effectiveness of recruiting is generally dependent upon our reputation as a provider of a rewarding and potentially lucrative income opportunity, as well as the general competitive and economic environment. Whether recruits are motivated to complete their training and licensing requirements and commit to selling our products depends in part on the effectiveness of our compensation and promotional programs, as well as the competitiveness of such programs compared with other companies, including other part-time business opportunities and the recruits’ desire to help middle-income families in their communities.

If our new business opportunity and the products we distribute do not generate sufficient interest to attract new recruits, motivate them to become licensed independent sales representatives and maintain their licenses, and incentivize them to sell our products and recruit other new independent sales representatives, our business would be materially adversely affected.

Certain Regional Vice Presidents (“RVPs”) have large sales organizations. These RVPs are responsible for attracting, motivating, supporting and assisting the independent sales representatives in their sales organizations. The loss of key RVPs together with substantial numbers of independent sales representatives from their related sales organizations for any reason could adversely affect our business and could impact our recruitment of new independent sales representatives.

Like many other companies with large independent sales organizations, we have written agreements with independent sales representatives that define the contractual terms of the relationships both during and after their affiliations with the Company. From time to time, current and former independent sales representatives violate these agreements, and the Company takes steps to enforce them. If former or current independent sales representatives are successful in legally challenging our written agreements, then our business could be adversely impacted.

Furthermore, if we or any other businesses with a similar distribution structure engage in practices resulting in increased negative public attention for our business model, the resulting reputational challenges could adversely affect our ability to attract new recruits. Companies such as ours that distribute through independent agents to sell directly to customers have been and may continue to be the subject of negative commentary on website postings, social media and other media. This negative commentary can spread inaccurate or incomplete information about distribution companies in general or the Company in particular, which can make our recruiting more difficult.

From time to time, various jurisdictions make changes to the state or provincial licensing examination process that may make it more difficult for independent sales representatives to obtain or retain their life insurance and/or securities licenses. For example, the Financial Industry Regulatory Authority (“FINRA”) changed the continuing education (“CE”) regulatory requirement from a three-year period to an annual requirement for securities-licensed representatives. In addition, the North American Securities Administrators Association approved a model rule for participating states that imposes a CE requirement for investment adviser representatives. Such changes place an increased burden on independent sales representatives to maintain their securities licenses, which could negatively impact the size of the active securities sales force in the event that representatives do not complete the applicable CE requirements on a timely basis.

 

A number of laws and regulations could apply to our independent contractor distribution model, which could require us to modify our distribution structure.

We have not been, and are not currently, subject to business opportunity laws because the amounts paid by the new independent sales representatives to us: (i) are less than the minimum thresholds set by many state statutes and (ii) are not fees paid for the right to participate in a business, but rather are for bona fide expenses such as state-required insurance examinations and pre-licensing training. We have not been, and are not currently, subject to franchise laws for similar reasons. However, there is a risk that a governmental agency or court could disagree with our assessment or that these laws and regulations could change. In addition, we do not believe that the Federal Trade Commission’s (“FTC”) current Business Opportunity Rule applies to the Company. On January 13, 2025, the FTC announced proposed amendments to the Business Opportunity Rule that would expand the rule but also would exempt

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models like ours from its scope. Nonetheless, the rule ultimately could be amended or interpreted in a manner inconsistent with our current interpretation. Becoming subject to business opportunity or franchise laws or regulations could require us to provide additional disclosures and regulate the manner in which we recruit independent sales representatives that may increase the expense of, or adversely impact our recruitment of, new independent sales representatives.

There are various laws and regulations, including laws of general application such as the Federal Trade Commission Act (“FTC Act”), which prohibit fraudulent or deceptive practices, including but not limited to, pyramid schemes and misrepresentations regarding distributors’ earnings potential. The FTC has exercised its Penalty Offense Authority found in Section 5(m)1(B) of the FTC Act by issuing Notices of Penalty Offenses as a reminder of the law on earnings claims and as a deterrence against violations. The application of these laws and regulations to a given set of business practices is inherently fact-based and, therefore, is subject to interpretation by applicable enforcement authorities. Although we believe that our business practices comply with applicable laws and regulations, there is a risk that a governmental agency or court could disagree with our assessment, or that these laws and regulations could change in actuality or in application, which could require us to restructure our operations or result in regulatory fines, penalties or other costs, or reputational harm, or could otherwise adversely affect our business, financial condition and results of operations. Additionally, if an earnings claims rule like that proposed by the FTC were to become final, it could have an adverse impact on our recruitment and sales.

 

Various unfair and deceptive trade practices laws and regulations could potentially be invoked to challenge aspects of our recruiting of independent sales representatives. In particular, we and the independent sales representatives use promotional materials in recruiting that describe the potential business opportunity of becoming an independent sales representative and information with respect to earnings and lifestyle statements. These materials and statements made by us or the independent sales representatives may be deemed to be unfair, deceptive, or misleading under the FTC Act or other federal, state and provincial laws or regulations and could result in regulatory fines, penalties or other costs, or reputational harm. Being out of compliance with the aforementioned laws and regulations could require changes to the recruiting of independent sales representatives, which could have a materially adverse effect on our business, financial condition and results of operations.

There may be adverse tax, legal or financial consequences if the classification of the independent contractor sales representatives is changed.

Sales representatives are independent contractors who operate their own businesses. Although we believe that we have properly classified these sales representatives as independent contractors, there is a risk that the Internal Revenue Service (“IRS”), the Department of Labor (“DOL”), the Canada Revenue Agency, a court or other authority will take a different view. Furthermore, the tests governing the determination of whether an individual is considered to be an independent contractor or an employee are fact-sensitive and vary from jurisdiction to jurisdiction. Laws and regulations that govern the status and classification of independent sales representatives are subject to change or interpretation.

The classification of workers as independent contractors continues to be the subject of increasing federal, state and provincial legislative, regulatory and judicial interest. Legislative and regulatory proposals have been introduced by federal and state authorities, and judicial decisions have been made, that call for or result in greater scrutiny of independent contractor classifications. It is difficult to predict what the outcome of worker classification activity may be. Changes to worker classifications could have a material adverse impact on our business, financial condition and results of operations because sales representatives are independent contractors.

If there is an adverse determination with respect to the classification of some or all of the independent contractors by a court or governmental agency, we could incur significant costs complying with such laws and regulations, including tax withholding, social security payments, retirement plan contributions and recordkeeping, employee benefits, payment of wages or modification of our business model, any of which could have a material adverse effect on our business, financial condition and results of operations. In addition, there is the risk that we may be subject to significant monetary liabilities arising from fines or judgments as a result of any such actual or alleged non-compliance with federal, state, or provincial laws.

The Company’s or the independent sales representatives’ violation of, or non-compliance with, laws and regulations and related claims and proceedings could expose us to material liabilities.

Extensive federal, state, provincial and territorial laws regulate our product offerings, imposing certain requirements that independent sales representatives must follow in dealing with clients. Instances of non-compliance or violations on the part of the independent sales representatives could have a material adverse effect on our business, financial condition and results of operations.

In addition to imposing requirements on independent sales representatives when dealing with clients, federal, state, provincial and territorial laws and regulations generally require us to maintain a system of controls and supervision reasonably designed to ensure that independent sales representatives comply with the requirements to which they are subject. We have policies, procedures and controls to comply with these laws and regulations. Further, at any given time, we may have pending state, federal or provincial examinations or inquiries of our investment and savings products, insurance, mortgage, and other businesses. However, despite these

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compliance and supervisory efforts, the breadth of our operations and the broad regulatory requirements could result in oversight failures and instances of non-compliance or violations on the part of the Company or independent sales representatives.

From time to time, we are subject to private litigation as a result of alleged misconduct by independent sales representatives. Non-compliance with or violations of laws or regulations could result in adverse findings in either examinations or litigation and could subject us to sanctions, monetary liabilities, restrictions on or the loss of the operation of our business, or reputational harm, any of which could have a material adverse effect on our business, financial condition and results of operations.

Risks Related to Our Insurance Business and Reinsurance

Our life insurance business may face significant losses or volatility if our actual experience differs from our expectations regarding mortality, reinsurance, persistency, or disability.

We set prices for life insurance policies based upon expected claim payment patterns derived from assumptions we make about the mortality rates, or likelihood of death, of our policyholders in any given year. The long-term profitability of these products depends upon how our actual mortality rates compare to our pricing assumptions. For example, if mortality rates are higher than those assumed in our pricing assumptions, we could be required to make more death benefit payments under our life insurance policies or to make such payments sooner than we had projected, which may decrease the profitability of our term life insurance products.

 

We reinsure 90% of our mortality risk on new business. Interest in reinsuring our mortality risk could diminish if there is increased volatility in the reinsurance market and/or a change in the perceived value of reinsuring Primerica’s business. As a result, in the future we may not be able to access reinsurance on new business and we could be forced to reinsure a smaller percentage of our mortality risk, or to reinsure the same percentage but at costs greater than we have historically paid.

The prices and expected future profitability of our life insurance products are also based, in part, upon assumptions related to persistency. Actual persistency that is lower than our persistency assumptions could have an adverse effect on profitability, especially in the early years of a policy, primarily because we may not collect sufficient revenue to cover our acquisition costs. Actual persistency that is higher than our persistency assumptions could have an adverse effect on profitability in the later years of a block of policies because the anticipated claims experience is higher in these later years. We are precluded from adjusting premiums on our in-force business during the initial term of the policies, and our ability to adjust premiums on in-force business after the initial policy term is limited to the maximum premium rates in the policy.

 

Our profitability is also affected by the extent actual disability rates underlying our waiver benefits, including recovery rates for individuals currently disabled, differ from actuarial assumptions. The waiver benefit is secondary to the death benefit coverage provided. However, the waiver benefit is not reinsured and material changes in assumptions compared to expectations can have a disproportionate impact on our financial results.

Our life insurance business is highly regulated, and statutory and regulatory changes may materially adversely affect our business, financial condition and results of operations.

Life insurance statutes and regulations are generally designed to protect the interests of the public and policyholders. Those interests may conflict with the interests of our stockholders. Currently, in the United States, the power to regulate insurance resides almost exclusively with the states, which grant state insurance regulators broad powers to regulate almost all aspects of our insurance business. Much of this state regulation follows model statutes or regulations developed or amended by the National Association of Insurance Commissioners (“NAIC”), which is composed of the insurance commissioners of each U.S. jurisdiction. The NAIC re-examines and amends existing model laws and regulations (including holding company regulations), in addition to determining whether new ones are needed.

The Federal Insurance Office is authorized to, among other things, study methods to modernize and improve insurance regulation. We cannot predict with certainty whether, or in what form, reforms will be enacted and, if so, whether the enacted reforms will materially affect our business. Changes in federal statutes, financial services regulation and federal taxation, in addition to changes to state statutes and regulations, may be more restrictive than current requirements or may result in higher costs, and could materially adversely affect our business, financial condition and results of operations.

All U.S. states have adopted rules requiring insurance producers to act in the “best interest” of consumers when recommending an annuity. The New York Department of Financial Services’ “best interest” rules apply to both life insurance and annuities. These rules impose a higher standard of care than previously required, as well as enhanced disclosures and other obligations with respect to recommendations, which may increase our regulatory or litigation risk.

25

 

Federal and provincial insurance laws regulate all aspects of our Canadian insurance business. Changes to federal or provincial statutes and regulations may be more restrictive than current requirements or may result in higher costs, which could materially adversely affect our business, financial condition and results of operations. If the Office of the Superintendent of Financial Institutions (“OSFI”) determines that our corporate actions do not comply with applicable Canadian law, Primerica Life Insurance Company of Canada (“Primerica Life Canada”) could face sanctions or fines and be subject to increased capital requirements or other requirements.

The Minister of Finance (Canada) approved our indirect acquisition of Primerica Life Canada in 2010 with the expectation that we will provide ongoing financial, managerial or operational support to this subsidiary as necessary. If OSFI determines Primerica Life Canada is not receiving adequate support from the Parent Company under applicable Canadian law, Primerica Life Canada may be subject to increased capital requirements or other requirements deemed appropriate by OSFI.

If there are extraordinary changes to U.S. or Canadian statutory or regulatory requirements, we may be unable to fully comply with or maintain all required insurance licenses and approvals. As a result, the regulatory authorities could preclude or temporarily suspend us from conducting some or all of our insurance activities or impose fines or penalties on us, which could materially adversely affect our business, financial condition and results of operations. We cannot predict with certainty the effect any proposed or future legislation or regulatory initiatives may have on the conduct of our business.

A decline in the regulatory capital ratios of our insurance subsidiaries could result in increased scrutiny by insurance regulators and ratings agencies and have a material adverse effect on our business, financial condition and results of operations.

Each of our U.S. insurance subsidiaries is subject to risk-based capital (“RBC”) standards (imposed under the laws of its respective jurisdiction of domicile). The RBC formula for U.S. life insurance companies generally establishes capital requirements relating to asset, insurance, interest rate and business risks. Our U.S. insurance subsidiaries are required to report RBC calculations annually to the applicable state department of insurance and the NAIC. Our Canadian life insurance subsidiary is subject to the Life Insurance Capital Adequacy Test Guideline (“LICAT”) and is required to provide its capital ratio calculations to the Canadian regulators. The capitalization of our insurance subsidiaries is maintained at levels in excess of the effective minimum requirements of the NAIC in the United States and OSFI in Canada. In any particular year, statutory capital and surplus amounts and RBC and LICAT ratios may increase or decrease depending on a variety of factors, many of which are outside of our control.

Our financial strength and credit ratings are significantly influenced by the statutory surplus amounts and RBC and LICAT ratios of our insurance company subsidiaries. Ratings agencies may change their internal models, effectively increasing or decreasing the amount of statutory capital our insurance subsidiaries must hold to maintain their current ratings. Ratings agencies also may downgrade the ratings of securities held in our insurance subsidiaries’ portfolios, which could result in a reduction of our insurance subsidiaries’ statutory capital and surplus and RBC. Our insurance subsidiaries may need additional capital and, if needed, we may not be able to provide it to maintain the targeted RBC and LICAT levels to support their business operations, either of which may impact our financial strength and credit ratings.

The failure of any of our insurance subsidiaries to meet its applicable RBC and LICAT requirements or minimum capital and surplus requirements could subject it to further examination or corrective action imposed by insurance regulators, including limitations on its ability to write additional business, supervision by regulators or seizure or liquidation. Any corrective action imposed could have a material adverse effect on our business, financial condition and results of operations. A decline in RBC or LICAT also limits the ability of our insurance subsidiaries to pay dividends or make distributions and could be a factor in causing ratings agencies to downgrade the financial strength ratings of our insurance subsidiaries. Such downgrades would have an adverse effect on our ability to write new insurance policies and, therefore, could have a material adverse effect on our business, financial condition and results of operations.

A significant ratings downgrade by a ratings organization could materially adversely affect our business, financial condition and results of operations.

Each of our non-captive life insurance subsidiaries has been assigned a financial strength rating by A.M. Best. Primerica Life currently also has an insurer financial strength rating from each of Standard & Poor’s (“S&P”) and Moody’s.

The financial strength ratings of our rated insurance subsidiaries are subject to periodic review using, among other things, the ratings agencies’ proprietary capital adequacy models and are subject to revision or withdrawal at any time. Insurance financial strength ratings are directed toward the concerns of policyholders and are not intended for the protection of stockholders or as a recommendation to buy, hold or sell securities. Our financial strength ratings will affect our competitive position relative to other insurance companies. If the financial strength ratings of our insurance subsidiaries fall below certain levels, some of our policyholders may move their business to our competitors. In addition, the models used by ratings agencies to determine financial strength are different from the capital requirements set by insurance regulators.

26

 

Ratings organizations review the financial performance and financial conditions of insurance companies and provide opinions regarding financial strength, operating performance and ability to meet obligations to policyholders. A significant downgrade in the financial strength ratings of any of our insurance subsidiaries, or the announced potential for a downgrade, could have a material adverse effect on our business, financial condition and results of operations.

If the rating agencies or regulators change their approach to financial strength ratings and statutory capital requirements, we may need to take action to maintain current ratings and capital adequacy ratios, which could have a material adverse effect on our business, financial condition and results of operations.

The Parent Company currently has investment grade credit ratings from S&P, Moody’s, and A.M. Best. These ratings are indicators of a debt issuer’s ability to meet the terms of debt obligations and are important factors in its ability to access liquidity in the debt markets. A rating downgrade by a rating agency can occur at any time if the rating agency perceives an adverse change in our financial condition, results of operations or ability to service debt. If such a downgrade occurs, it could have a material adverse effect on our financial condition and results of operations in many ways, including adversely limiting our access to capital in the unsecured debt market and potentially increasing the cost of such debt.

The failure by any of our reinsurers or reserve financing counterparties to perform its obligations to us could have a material adverse effect on our business, financial condition and results of operations.

We rely on reinsurance in the United States and Canada to diversify our risk and to manage our loss exposure to mortality risk. Reinsurance does not relieve us of our direct liability to our policyholders, even when the reinsurer is liable to us. We, as the insurer, are required to pay the full amount of death benefits even in circumstances where we are entitled to receive payments from the reinsurer. Our reinsurers may be unable to pay the amounts they owe us on a timely basis or at all. Further, reinsurers might refuse or fail to pay losses that we cede to them or might delay payment. Since death benefit claims may be paid long after a policy is issued, we bear credit risk with respect to our reinsurers. The creditworthiness of our reinsurers may change before we can recover amounts to which we are entitled. Any such failure to pay by our reinsurers could have a material adverse effect on our business, financial condition and results of operations.

We also have in place coinsurance agreements that we originally entered into at the time of our initial public offering (the “IPO”) in 2010, pursuant to which we ceded between 80% and 90% of the risks and rewards of our term life insurance policies that were in force at year-end 2009. Under this arrangement, our existing reinsurance agreements remain in place. Each coinsurer entered into trust agreements with our respective insurance subsidiaries and a trustee pursuant to which the coinsurer placed assets (primarily fixed-income securities and U.S. Treasury securities) in trust for such subsidiary’s benefit to secure the coinsurer’s obligations to such subsidiary. Each such coinsurance agreement requires the relevant coinsurer to maintain assets in trust, the amount of which will not be less than the amount of the statutory reserves for the coinsured liabilities. In Canada, the IPO coinsurer must hold pledged assets in an amount sufficient for us to take credit for reinsurance in a Canadian financial institution, not affiliated with the IPO coinsurer. Our Canadian insurance company has an enforceable security interest that has priority over any other security interest for the pledged assets. Furthermore, our insurance subsidiaries have the right to recapture the business upon the occurrence of an event of default under their respective coinsurance agreement subject to any applicable cure periods. While any such recapture would be at no cost to us, such recapture would result in a substantial increase in our insurance exposure and require us to be fully responsible for the management of the assets set aside to support statutory reserves. The type of assets we might obtain as a result of a recapture may not be as liquid as our current invested asset portfolio and could result in an unfavorable impact on our risk profile.

There is no assurance that the relevant coinsurer will pay the coinsurance obligations owed to us now or in the future or that it will pay these obligations on a timely basis. If any of the coinsurers becomes insolvent and the trust account to support the obligations of such coinsurer is insufficient to pay such coinsurer’s obligations to us and we fail to enforce our right to recapture the business, it could have a material adverse effect on our business, financial condition and results of operations.

We finance redundant statutory reserves of certain issue years of our term life insurance business. Under this transaction, we pay a fee to a financial counterparty for its commitment to support redundant reserves and provide corresponding statutory reinsurance credit, allowing us to more efficiently manage our capital. If the financial strength of this counterparty was significantly impaired to the extent that its support of our redundant reserves could no longer be relied upon, it could have a material adverse effect on our business, financial condition, and results of operations.

Risks Related to Our Investment and Savings Products Business

Our Investment and Savings Products segment is heavily dependent on a limited platform of mutual fund and annuity products offered by a relatively small number of companies and managers. If these products fail to remain competitive with other investment options, our business, financial condition and results of operations could be materially adversely affected.

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We offer mutual funds and annuities through our U.S. retail broker-dealer, but not exchange traded funds, individual stocks and bonds, or alternative investments. Our advisory program in the U.S. offers a wider menu of investment types; however, fewer of the independent sales representatives are eligible to offer the program. Our current investment products in Canada consist of two families of mutual funds that include a diversified offering of equity, fixed-income and money market funds. Because of these limitations, our business could be materially adversely impacted if consumer demand were to shift toward products we do not offer. In addition, if any of our investment and savings products fail to achieve satisfactory investment performance, our clients may seek higher yielding or lower cost investment options, and we could experience higher redemption rates.

If our relationship with one or more of the manufacturers of the funds and annuities we distribute or investment managers we make available is significantly altered or terminated or there is a shift in the business mix, our business, financial condition and results of operations could be materially adversely affected.

We receive revenue and other marketing and support fees from the manufacturers of the investment and savings products we distribute and the investment managers we make available. We earn a significant portion of our earnings through our relationships with a small group of mutual fund and annuity companies. A decision by one or more of these companies to alter or discontinue their current arrangements or product offerings with us, or a change in law or regulation that compels us to alter or discontinue such arrangements, could materially adversely affect our business, financial condition and results of operations.

In addition, we derive a growing portion of our earnings through our asset-based advisory platform. A shift in the business mix of new investments across our products and platforms could materially impact cash flows to our business, financial condition and results of operations.

In addition to sales commissions and asset-based compensation, a portion of our earnings from investment and savings products comes from recordkeeping services that we provide to mutual fund companies and from fees earned for custodial services that we provide to clients with retirement plan accounts in the funds of these mutual fund companies.

A decision by one or more of our fund companies, annuities companies, or managers to alter or discontinue their current arrangements with us, or a change in law or regulation that compels us to alter or discontinue such arrangements, would materially adversely affect our business, financial condition and results of operations.

The Company’s or the securities-licensed independent sales representatives’ violations of, or non-compliance with, laws and regulations of the securities business could expose us to material liabilities.

Our subsidiary broker-dealers, Primerica Brokerage Services, Inc. and PFS Investments Inc. (“PFS Investments”), and the independent sales representatives, are subject to federal and state regulation of the securities business. PFS Investments is additionally a registered investment adviser and its investment adviser representatives likewise are held to a high standard of conduct. Our subsidiary, Primerica Shareholder Services, Inc. (“PSS”), is a registered transfer agent engaged in the recordkeeping business and is subject to regulation by the Securities and Exchange Commission (“SEC”). Violations of, or non-compliance with, laws or regulations applicable to the activities of PFS Investments or PSS, or violations by a third party with which PFS Investments or PSS contracts, could subject us to regulatory actions and/or litigation. Such events could result in the imposition of cease and desist orders, fines or censures, restitution to clients, suspension or revocation of SEC registration, suspension or expulsion from FINRA, reputational damage and legal expense, any of which could materially adversely affect our business, financial condition and results of operations.

Our Canadian broker-dealer subsidiary, PFSL Investments Canada Ltd. (“PFSL Investments Canada”) and the independent sales representatives are subject to the securities laws of the provinces and territories of Canada in which we sell our mutual fund products and to the rules of the Canadian Investment Regulatory Organization (“CIRO”), the self-regulatory organization governing mutual fund dealers (except in the province of Quebec, the Autorité des Marchés Financiers (“AMF”)). PFSL Investments Canada is subject to periodic review by both the CIRO and the provincial and territorial securities commissions to assess its compliance with, among other things, applicable capital requirements and sales practices and procedures. These regulators have broad administrative powers and may impose sanctions that could materially adversely affect our business, financial condition and results of operations.

If heightened standards of conduct are imposed on us or the independent sales representatives by federal, state or provincial authorities, or selling compensation is reduced as a result of new legislation or regulations, it could have a material adverse effect on our business, financial condition and results of operations.

The U.S. independent sales representatives are subject to federal and state regulation as well as state licensing requirements. PFS Investments, which is regulated as a broker-dealer and registered investment adviser, and U.S. independent sales representatives are currently subject to general anti-fraud limitations under the Securities Exchange Act of 1934, as amended, the Investment Advisers Act of 1940 (the “Investment Advisers Act”) and SEC rules and regulations, as well as other conduct standards prescribed by the FINRA. These standards generally require that broker-dealers, investment advisers, and their sales representatives disclose and

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mitigate conflicts of interest that might affect the advice or recommendations they provide and require them to make investment recommendations in the best interest of customers. In 2019, the SEC adopted rules addressing the standards of conduct applicable to broker-dealers and their associated persons (collectively, “Reg BI”). Among other things, Reg BI created a “best interest” standard of conduct similar to the fiduciary standard applicable to investment advisers. In addition, the DOL has issued, and may continue to issue, proposals that regulate fiduciary status and related fiduciary requirements. Reg BI and DOL regulations impose higher standards of care and enhanced obligations that increase regulatory and litigation risk to our business.

In addition to federal regulators, certain states have proposed or passed laws or proposed or issued regulations requiring investment advisers, broker-dealers, and/or insurance agents to meet fiduciary standards or standards of care that their advice be in the customer’s best interest, and to mitigate and disclose conflicts of interest to consumers of investment and insurance products. The severity of the impact that such state laws or regulations could have on our business vary from state to state depending on the content of the legislation or regulation and how it would be applied by state regulators and interpreted by the courts. Therefore, such laws or regulations could disrupt our brokerage business in the relevant state. We cannot quantify the financial impact, if any, of any changes to our business that may be necessary in order to comply with such laws or regulations at this time.

In 2022, in response to the regulatory ban on the compensation model we primarily used in Canada, we began to offer through the independent sales representatives, a unique and exclusive range of funds under Principal Distributor agreements with two third-party mutual fund companies (the “Principal Distributor model”).

While we received regulatory approval for the Principal Distributor model in 2022, we were advised at the time of approval that the Canadian Securities Administrators intends to closely re-examine the Principal Distributor provisions of National Instrument 81-105, through a public Request for Comment that was released on November 28, 2024. The Request for Comment proposes banning multiple fund manager relationships with one principal distributor, an arrangement we have in our Canadian mutual fund business. If this proposal is adopted and we are not granted an exemption, then we could be required to restructure our Principal Distributor model for the sale of mutual funds, or discontinue use, which could have a material adverse effect on our investment advisory business in Canada.

The Canadian Council of Insurance Regulators mandated a cessation of deferred sales charges on segregated fund contracts entered into after May 31, 2023. Deferred sales charges will continue to be allowed on subsequent deposits of existing segregated funds contracts for a period of time; however, insurance regulators will be further evaluating whether to allow its continued use. As we anticipated, we experienced a decline in segregated funds product sales beginning in June 2023.

 

We began distributing segregated funds on behalf of a third party on a limited basis in January 2025 with a full rollout in December 2025. On November 19, 2025, the Canadian Council of Insurance Regulators and Canadian Insurance Services Regulatory Organizations issued new Segregated Funds Guidance, which continues to allow existing compensation models but with additional requirements around their usage. We are assessing the impact of these requirements.

Heightened standards of conduct or restrictions on compensation as a result of any of the above items or other similar proposed rules or regulations could also increase the compliance and regulatory burdens on the independent sales representatives and could lead to increased litigation and regulatory risks, changes to our business model, a decrease in the number of licensed independent sales representatives and a reduction in the products we offer to our clients, any of which could have a material adverse effect on our business, financial condition and results of operations.

If our suitability policies and procedures, or our policies and procedures for compliance with federal, state or provincial regulations governing standards of care, were deemed inadequate, it could have a material adverse effect on our business, financial condition and results of operations.

We review the account applications that we receive for our investment and savings products for suitability, for compliance with Reg BI, the Investment Advisers Act, the DOL regulations, in Canada the Fair Treatment of Customers and the Client Focused Reforms, and for compliance with other federal, state or provincial regulations governing standards of care, as applicable. We believe that the policies and procedures we implement to help independent sales representatives assist clients in making investment choices are reasonably designed to achieve compliance with applicable securities laws and regulations and to satisfy other applicable federal, state, and provincial standards of care. Nonetheless, it is possible that the SEC, FINRA, the DOL, the IRS, state securities and insurance regulators, CIRO or AMF may not agree. Further, we could be subject to regulatory actions or private litigation, which could materially adversely affect our business, financial condition and results of operations.

The support tools we make available to the independent sales force are designed to educate potential and existing clients, help identify their financial needs, generally introduce the potential benefits of our product offerings, and identify suitable investment products. The tools themselves or the assumptions and methods of analyses embedded in them could be challenged and subject us to regulatory

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action by the SEC, the DOL, FINRA or other regulators, or private litigation, which could materially adversely affect our business, financial condition and results of operations.

Non-compliance with applicable regulations could lead to revocation of our subsidiary’s status as a non-bank custodian, which could have a material adverse effect on our business, financial condition and results of operations.

PFS Investments is a non-bank custodian of retirement accounts, as permitted under Treasury Regulation 1.408-2. A non-bank custodian is an entity that is not a bank and that is permitted by the IRS to act as a custodian for retirement plan account assets of our clients. The IRS retains authority to revoke or suspend that status if it finds that PFS Investments is unwilling or unable to administer retirement accounts in a manner consistent with the requirements of the applicable regulations. Revocation of PFS Investments’ non-bank custodian status would affect its ability to earn revenue for providing such services and, consequently, could materially adversely affect our business, financial condition and results of operations.

Risks Related to Our Mortgage Brokerage Business

Licensing requirements will impact the size of the mortgage loan independent sales force, which could adversely affect our mortgage brokerage business.

To offer mortgage loan products, independent sales representatives must be individually licensed as mortgage loan originators by the states in which they do business and, in some states, they must also be individually licensed as mortgage brokers. These licensing requirements include enrollment in the Nationwide Multistate Licensing System, application to state regulators for individual licenses, a minimum of 20 hours of pre-licensing education, an annual minimum of eight hours of CE, and the successful completion of both national and state tests or a national test with uniform state content. Compliance with these licensing regimes (including passing the applicable exam, background checks and credit checks) often is a barrier for independent sales representatives. Primerica Mortgage, LLC (“Primerica Mortgage”) must also be licensed at the company level as a mortgage broker (or equivalent) and, in almost all states, representatives’ offices must be licensed as branch offices. To offer mortgage loans in a state, independent sales representatives, offices, and Primerica Mortgage must be licensed as required by state law. These licenses must be renewed on an annual basis. Failure, or the inability due to state restrictions, of independent sales representatives to obtain the required licenses and comply with ongoing licensing requirements would adversely affect the size of the mortgage loan sales force, which could adversely affect our mortgage brokerage business.

Our U.S. mortgage brokerage and Canadian mortgage referral business is highly regulated and subject to various federal, state and provincial laws and regulations in the U.S. and Canada. Changes in, non-compliance with, or violations of, such laws and regulations could affect the cost or our ability to distribute our products and could adversely affect our business, financial condition and results of operations.

Our U.S. mortgage brokerage business is subject to a wide array of laws at the federal, state, and local levels and regulators, including the Consumer Financial Protection Bureau, state mortgage and licensing regulators, state attorneys general, state and local consumer protection offices, the FTC, the Department of Housing and Urban Development, and the Department of Justice. Each of these authorities may examine, supervise, investigate, and enforce applicable laws, regulations and policies. Federal law and regulations impose prohibitions and restrictions on the manner and amount of compensation paid and incentives offered in connection with a mortgage loan transaction and establish a federal ability to repay standard for all mortgage loans. Other laws could have the effect of limiting the availability of certain loan products in the market and adversely impact the range of products offered and the volume of loan business.

Additionally, we must comply with various state and local laws and policies concerning the lender, compensation and incentives, fair lending, supervision, the provision of consumer disclosures, net branching, predatory lending and high cost loans and recordkeeping. Differing interpretations of, changes in, or violations of, any of these laws or regulations could subject us to damages, fines, or sanctions and could affect the cost or our ability to distribute our products, which could materially adversely affect our business, financial condition, and results of operations. Remediation for noncompliance with federal, state or local laws could be costly and significant fines may be incurred. Failure to comply with applicable laws could result in potential litigation liability. Further, the lender must comply with applicable federal, state, and local laws and regulations, and any noncompliance by such lender may adversely impact our U.S. mortgage brokerage business.

In Canada, independent sales representatives offer mortgage loans on a referral basis only. Various provincial mortgage brokerage laws strictly prescribe the requirements applicable to a mortgage referral program in order for individuals who make the referrals to be exempt from the requirement to be licensed as mortgage brokers. Differing interpretations of, changes in, or violations of, any of the applicable exemptions under mortgage brokerage laws could subject us to damages, fines or sanctions and could have a material adverse effect on our ability to offer mortgage loan referrals in Canada. In addition, independent sales representatives selling mutual funds must comply with the disclosure requirements of CIRO and applicable securities laws governing mortgage referral

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arrangements. Failure to comply with such disclosure requirements could result in regulatory sanctions, which could have an adverse effect on our ability to offer mortgage loan referrals in Canada.

In the United States, we broker mortgage loans based on contractual agreements with a very limited number of mortgage lenders. A significant change to or disruption in the mortgage lenders’ mortgage businesses or an inability of the mortgage lenders to satisfy their contractual obligations to us could adversely affect our business, financial condition and results of operations.

Through a contractual agreement with Rocket Mortgage, LLC, Primerica Mortgage offers mortgage loans through the independent sales representatives who are licensed as mortgage loan originators. Primerica Mortgage also offers, through its mortgage loan originators, second mortgages and home equity lines of credit based on a contractual agreement with Spring EQ, LLC. A significant change to or disruption in the lenders’ businesses or their inability to satisfy their contractual obligations to Primerica Mortgage could have an adverse impact on our business, financial condition and results of operations.

 

Our U.S. mortgage brokerage business is impacted by U.S. mortgage interest rates. Changes in prevailing mortgage interest rates or U.S. monetary policies that affect mortgage interest rates could adversely affect our business, financial condition and results of operations.

 

The U.S. Federal Reserve, which serves as the primary driver of U.S. monetary policies impacting mortgage interest rates, implemented multiple interest rate increases over recent years to address continued elevated inflation. Although the U.S. Federal Reserve implemented moderate interest rate decreases in 2024 and 2025, mortgage interest rates remain elevated. Elevated mortgage interest rates lowered the demand for refinance mortgages and purchase-money mortgages offered by Primerica Mortgage. Continued elevated mortgage interest rates relative to recent market rates could continue to impact consumer demand for refinance mortgages and purchase-money mortgages, which could have an adverse impact on our mortgage brokerage business in the U.S.

Risks Related to Economic Downcycles, Public Health Crises or Catastrophes, and Disasters

The effects of economic downcycles, issues affecting the national, regional and/or global economy or geopolitical event(s), or any combination thereof, could impact the cost of living for our middle-income clients and could materially adversely affect our business, financial condition and results of operations.

Our business, financial condition and results of operations may be materially adversely affected by economic downturns in the United States and Canada, as well as issues in the national, regional and/or global economy such as elevated inflation resulting in a higher cost of living that may have repercussions on our markets. Economic downturns can result from a multitude of reasons and are often characterized by conditions such as elevated inflation and higher cost of living, declines in capital markets, higher unemployment, lower household income, lower valuation of retirement savings accounts, lower corporate earnings, lower business investment and/or lower consumer spending. These conditions can impact the disposable income of middle-income consumers, which can influence their spending and investment decisions. With respect to our term life insurance business, we may continue to experience an elevated incidence of lapses or surrenders of term life insurance policies, which adversely impacts the amount of insurance premiums we collect. Consumer spending and borrowing levels affect how consumers evaluate their savings and debt management plans. Factors that significantly impact consumer demand for the savings and investment products we distribute include interest rates, equity market returns and our customers’ perception of the strength of the capital markets. Better returns from interest rates relative to the performance of the equity markets and the perceived attractiveness of investing in equity markets versus other investments, such as U.S. Treasury bills and money market funds, could adversely impact consumer demand for the mutual funds, annuities, and managed accounts we distribute. Continued elevated producer prices have caused and may continue to cause higher labor costs and increased vendor and supplier costs. Economic conditions, including continued elevated producer prices have impacted and may continue to impact prospective recruits’ perceptions of the business opportunity that becoming an independent sales representative offers, which can drive or dampen recruiting.

Our investment and savings products business is sensitive to the performance of the equity markets. A protracted long-term downturn in equity market performance brought about by an economic downturn and/or geopolitical event(s) could adversely affect new sales and cause clients to liquidate mutual funds and other investments sold by independent sales representatives. This could cause a decrease in the asset value of client accounts which reduce our trailing commission revenues. Further, volatility or downturns in equity markets could dampen purchases of the investment products that we distribute and could have a material adverse effect on our business, including our ability to recruit and retain independent sales representatives. In addition, disruptions in credit markets caused by an economic downturn could result in a decline in the fair value of our fixed-maturity invested asset portfolio as well as increased credit losses on these invested assets.

Major public health pandemics, epidemics or outbreaks (such as the COVID-19 pandemic) or other catastrophic events, have impacted and could again materially adversely impact our business, financial condition and results of operations.

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Our operations are exposed to the risk of major public health pandemics, epidemics or outbreaks (a “major public health crisis”), such as the COVID-19 pandemic, or other catastrophic events (“catastrophic events”), which, among other things, has caused and could again cause a large number of premature deaths of our insureds. Although we have ceded a significant majority of our mortality risk to reinsurers, a major public health crisis or catastrophic event could cause: (i) substantial volatility in our financial results for a period of time; (ii) material harm to the financial condition of our reinsurers; (iii) increases in the probability of default on reinsurance recoverables; (iv) decreases in the availability of reinsurance on new business; or (v) increases in reinsurance costs on new business and/or rates during the post-level term period. In addition, most of the jurisdictions in which our insurance subsidiaries are licensed to transact business require life insurers to participate in guaranty associations, which raise funds to pay contractual benefits owed pursuant to insurance policies issued by impaired, insolvent or failed issuers. A major public health crisis or catastrophic event could require extraordinary assessments on our insurance companies, which could have a material adverse effect on our business, financial condition and results of operations.

A major public health crisis or catastrophic event has impacted and could again negatively impact our ability to attract new recruits, train and license the independent sales force, and incentivize the independent sales force to sell our products. If a significant number of independent sales representatives were to be impacted by a major public health crisis or catastrophic event, it could have a material adverse effect on recruiting, licensing, and our ability to write new business. A major public health crisis or catastrophic event could again cause significant volatility in global financial markets and disrupt the economy and the demand for the term life insurance, investment and savings, and other financial products that we distribute. Our investment portfolio and the valuations of invested assets we hold could also be materially adversely affected.

In the event of a disaster, our business continuity plan may not be sufficient, which could have a material adverse effect on our business, financial condition and results of operations.

Our infrastructure supports a combination of local and remote recovery solutions for business resumption in the event of a disaster, including a security incident. Our Canadian and U.S. operations utilize a data center located in our main campus in Duluth, Georgia. In the event of either a main campus destruction or the inability to access our data center or main campus in Duluth, Georgia, our business recovery plan provides for our employees to perform their work functions via a dedicated business backup/recovery site located about 20 miles from our main campus or by remote access from an employee’s home. However, in the event of main campus destruction, our business recovery plan may be inadequate, and our employees and the independent sales representatives may be unable to carry out their work immediately, which could have a material adverse effect on our business, financial condition and results of operations.

Risks Related to Information Technology and Cybersecurity

If one of our, or a third-party partner’s, significant information technology systems fails, if its security is compromised, or if the Internet becomes disabled or unavailable, our business, financial condition and results of operations may be materially adversely affected.

Our business is highly dependent upon the effective operation of our information technology systems and third-party technology systems, networks and clouds to record, process, transmit and store information, including sensitive customer and proprietary information. We rely on these systems throughout our business for a variety of functions including to conduct many of our business activities and transactions with customers, independent sales representatives, vendors and other third parties, to prepare our financial statements and to communicate with our Board of Directors. Further, our information technology systems and applications run a variety of third-party and proprietary software intended to support the independent sales force. Our business also relies on the use by employees, independent sales representatives and other third parties of electronic mobile devices, such as laptops, tablets and smartphones, which are particularly vulnerable to loss and theft.

Maintaining the integrity of these systems and networks is critical to the success of our business operations, including the retention of independent sales representatives and customers, and to the protection of our proprietary information and our customers’ confidential and personal information. We could experience a failure of one or more of these systems or could fail to complete all necessary data reconciliation or other conversion controls when implementing new software systems. In addition, despite the implementation of security and back-up measures, our information technology systems may be vulnerable to physical or electronic intrusions, viruses or other attacks, programming errors and similar disruptions.

We are subject to international, federal, state, and provincial regulations, and in some cases contractual obligations, that require us to establish and maintain policies and procedures designed to protect sensitive customer, employee, independent sales representative and third-party information. We have implemented and maintain security measures, including industry-standard commercial technology, designed to protect against breaches of security and other interference with our systems and networks resulting from attacks by third parties, including hackers, and from employee or independent sales representative error or malfeasance. We continually assess our ability to monitor, respond to, and recover from such threats. In accordance with these laws and our security practices, we also require third-party vendors, who in the provision of services to us are provided with or process information pertaining to our business or our

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customers, to meet certain information security standards. Despite the measures we have taken and may in the future take to address and mitigate cybersecurity and technology risks, we cannot assure that our systems and networks will not be subject to breaches or interference. Any such breaches or interference by third parties or by independent sales representatives or employees that may occur in the future, including the failure of any one of these systems for any reason, could cause significant interruptions to our operations, which could have a material adverse effect on our business, financial condition and results of operations.

Anyone who is able to circumvent our security measures and penetrate our information technology systems could access, view, misappropriate, alter, or delete information in the systems, including personally-identifiable client information, health information, and proprietary business information. In addition, an increasing number of regulators require that regulators and clients be notified if a security breach results in the disclosure of personally-identifiable client information or health information, which could exacerbate the harm to our business, financial condition or results of operations. We cannot be certain that advances in criminal capabilities, discovery of new vulnerabilities, attempts to exploit vulnerabilities in our systems, data thefts, physical system, network or cloud break-ins or inappropriate access, or other developments will not compromise or breach the technology or other security measures protecting the networks and systems used in connection with our business.

Operating system failures, ineffective system implementation, loss of the Internet or the compromise of security with respect to internal, external or third-party operating systems or electronic devices could subject us to significant civil and criminal liability, harm our reputation, interrupt our business operations, deter people from purchasing our products, require us to incur significant technical, legal and other expenses, and adversely affect our internal control over financial reporting, business, financial condition, or results of operations.

Any failure to protect the confidentiality of client information could adversely affect our reputation and have a material adverse effect on our business, financial condition and results of operations.

Various government bodies have established rules protecting the privacy and security of personal information, which vary significantly from jurisdiction to jurisdiction. Many independent sales representatives, employees, and third-party service providers have access to, and routinely process, personal information of clients on paper and on personal and Company-owned hardware, the cloud and mobile devices through a variety of media, including the Internet and software applications. We rely on internal processes and controls to protect the confidentiality of client information that is accessible to, or in the possession of, our Company, our employees and the independent sales representatives. If: (i) an independent sales representative, employee, or third-party service provider intentionally or unintentionally discloses or misappropriates confidential client information; (ii) our data is the subject of a cybersecurity attack; (iii) we fail to maintain adequate internal controls; or (iv) independent sales representatives, employees or third-party service providers fail to comply with our policies and procedures, then misappropriation or intentional or unintentional inappropriate disclosure or misuse of client information could occur. Such internal control inadequacies or non-compliance could materially damage our reputation or lead to civil or criminal penalties, which could have a material adverse effect on our business, financial condition and results of operations.

The current legislative and regulatory climate with regard to privacy and cybersecurity could adversely affect our business, financial condition, and results of operations.

Various international, federal and state legislative and regulatory bodies are considering or have considered, proposed, or adopted new standards and rules regarding protection of personally-identifiable information. All 50 U.S. states and Canada have breach notification requirements. New York State Department of Financial Services’ Cybersecurity Requirements for Financial Services Companies (“NYDFS Cybersecurity Requirements”) require covered financial services institutions to implement a cybersecurity program with policies and controls designed to protect information systems and data. The NAIC has adopted the Insurance Data Security Model Law (“Model Law”), which among other things, requires insurers and insurance producers to develop and maintain a written information security program, conduct risk assessments, and assess the data security practices of third-party service providers. The Model Law, which has some similarities as well as differences from the NYDFS Cybersecurity Requirements, has been adopted by a significant number of states. The SEC’s Regulation S-P imposes cybersecurity requirements on covered entities regarding policies and procedures, incident response and notification procedures, and cybersecurity risk management. In addition, various regulators and legislators are proposing, have proposed, and have passed more stringent privacy requirements, including the California Consumer Privacy Act of 2018, its updates in the California Privacy Rights Act of 2023, and related regulations (“CCPA”). The CCPA is designed to give consumers more control over their personal data and imposes strict liability for security incidents under certain circumstances.

Such laws or regulations could require us to implement new technologies or revise and maintain policies and procedures designed to protect sensitive customer, employee, independent sales representative and third-party information. Being subject to, or out of compliance with, the aforementioned laws and regulations could result in material costs, fines, penalties or litigation, which could materially adversely affect our business, financial condition and results of operations.

 

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The development and use of artificial intelligence present risks and challenges that could materially adversely affect our business, financial condition and results of operations.

We, our third-party service providers, or competitors, may develop or incorporate artificial intelligence (“AI”) technology in certain business processes, products or services. AI technologies are complex and rapidly evolving. The regulatory environment related to AI is also uncertain and evolving, which could require changes in our potential use and implementation of AI technologies and could increase compliance costs and the risk of non-compliance. AI technologies used by us or our third-party service providers could result in inaccurate information. More rapid adoption of AI by our competitors resulting in more cost-effective technologies and/or products could result in a change in the competitive environment in which we operate that could negatively affect our ability to maintain or increase our market share or profitability.

Additionally, our or our third-party service providers’ use of AI technologies could increase the risk of loss or inadvertent sharing of consumer or proprietary data, which could increase the risk of related information and security and privacy incidents, regulatory actions and/or consumer litigation. Likewise, malefactors are also increasingly using AI to target individuals to gain access to consumer accounts, such as through “deep fakes” and impersonations. AI may also be used to increase the frequency and severity of cybersecurity attacks against us or our third-party service providers. An increase in any of these wrongdoings may adversely impact our business, financial condition and results of operations.

 

We regularly undertake business initiatives to enhance our technology, products, and services. The efficiency and success of these initiatives may vary significantly and may cause unanticipated costs, errors, or disruptions which could have a material adverse effect on our business, financial condition and results of operations.

We regularly evaluate and undertake business initiatives to improve and support our competitiveness and grow our business. Business initiatives that we are currently developing or executing, for example, include enhancements to information technology, our client relationship manager tool, updates to our client and independent sales representative-facing software tools and applications, implementation of AI technologies to improve efficiencies and streamlining of our communications systems. Our ability to implement these initiatives often may be dependent on our capacity to integrate, develop, or invest in new systems and technologies as well as to evolve existing methods and tools. The execution of these initiatives also may depend on our ability to change vendors, and implementation of certain initiatives may be dependent on third parties. In addition, these initiatives may take longer than anticipated to implement, and our ability to execute these initiatives in a timely manner may impact the outcomes. Likewise, technological and other changes made in connection with initiatives, either by Primerica or changes by our partners, may result in increased or unanticipated costs, inadvertent data disclosures, operating errors, disruptions to our business, or may present other unanticipated technical or operational hurdles. The expansion, or changes of services, or changes of vendors may involve client, regulatory and other third-party data use, storage and security challenges, as well as other regulatory compliance, business continuity and other considerations. As a result, we may not achieve some or all of the anticipated benefits or other intended results associated with these initiatives, which could have a material adverse effect on our business, financial condition and results of operations.

 

Financial Risks Affecting Our Business

Credit deterioration in, and the effects of interest rate fluctuations on, our invested asset portfolio and other assets that are subject to changes in credit quality and interest rates could materially adversely affect our business, financial condition and results of operations.

A large percentage of our invested asset portfolio is invested in fixed-income securities. As a result, credit deterioration and interest rate fluctuations could materially affect the value of and earnings generated by our invested asset portfolio. During periods of declining market interest rates, we must invest the cash we receive as interest, return of principal on our investments and cash from operations in lower-yielding, high-grade instruments or in lower-credit instruments to maintain comparable returns. Issuers of fixed-income securities could also decide to prepay their obligations to borrow at lower market rates, which would increase our reinvestment risk. If interest rates generally increase, the fair value of our fixed rate income portfolio decreases. Additionally, if the fair value of any security in our invested asset portfolio decreases, we may realize losses if we deem the value of the security to be impaired due to a credit loss. To the extent that any fluctuations in fair value or interest rates are significant or we recognize impairments that are material, it could have a material adverse effect on our business, financial condition and results of operations.

Valuation of our investments and the determination of expected credit losses when the fair value of our available-for-sale invested assets is below amortized cost are both based on estimates that may prove to be incorrect, which could adversely affect our financial condition and results of operations.

Our portfolio of invested assets primarily consists of fixed-maturity securities that are classified as available-for-sale. When the fair value of any of our available-for-sale invested assets declines below amortized cost, an impairment exists and we recognize a loss in either our consolidated statement of income or in other comprehensive income based on our assessment of expected credit losses. The

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determination of the fair value of certain invested assets, particularly those that do not trade on a regular basis, requires an assessment of available data and the use of assumptions and estimates. Once it is determined that the fair value of an available-for-sale security is below its carrying value, we first determine if we intend to sell or will more likely than not be required to sell the security before the expected recovery of its amortized cost. If we intend to sell or will more likely than not be required to sell the security, then we recognize the impairment as a credit loss in our consolidated statement of income by writing down the security’s amortized cost to its fair value. If we do not intend to sell or it is not more likely than not that we will be required to sell the security before the expected recovery of its amortized cost, we recognize the portion of the impairment that is due to a credit loss, if any, in our consolidated statement of income through an allowance. The portion of the impairment that is due to factors other than a credit loss is recognized in other comprehensive income in the consolidated statement of comprehensive income as an unrealized loss. The determination of whether an impairment is due to credit factors is subjective and involves a variety of assumptions and estimates.

There are various risks and uncertainties associated with determining whether an impairment is due to credit factors when the fair value of available-for-sale securities declines below amortized cost. To the extent that we are incorrect in our determination of the fair value of our investment securities or our determination of whether an impairment is due to credit factors for available-for-sale securities, we may realize losses that never actually materialize and are subsequently reversed, or we may fail to recognize losses within the appropriate reporting period.

 

Changes in accounting standards can be difficult to predict and could adversely impact how we record and report our financial condition and results of operations.

Our accounting policies and methods are fundamental to how we record and report our financial condition and results of operations. United States generally accepted accounting principles (“U.S. GAAP”) is a continuously evolving set of financial accounting and reporting standards that governs the preparation of our financial statements. Changes to U.S. GAAP can be difficult to implement and can materially impact how we record and report our financial condition and results of operations. Future financial reporting standard changes by the Financial Accounting Standards Board and the SEC could adversely impact our ability to maintain effective control over financial reporting given the changes that are needed to adopt such standards.

Additionally, the Company’s insurance company subsidiaries prepare statutory financial statements in accordance with accounting principles designated by regulators in the jurisdictions in which they are domiciled. The financial statements of our U.S. insurance subsidiaries are prepared in accordance with statutory accounting principles (“SAP”) prescribed or permitted by state insurance departments and the NAIC. SAP, including actuarial methodologies for estimating reserves, are subject to continuous evaluation by the NAIC and state insurance departments. Similarly, our Canadian life insurance subsidiary is required to prepare statutory financial statements in accordance with International Financial Reporting Standards, as prescribed by the OSFI in Canada. The statutory financial statements of our insurance company subsidiaries are used to determine dividend capacity and risk-based capital and are monitored closely by regulators. Changes in accounting standards and interpretations of those standards could adversely impact our insurance companies’ ability to pay dividends to the Parent Company and comply with the financial statement requirements stipulated by the applicable insurance regulators.

The inability of our subsidiaries to pay dividends or make distributions or other payments to us in sufficient amounts would impede our ability to meet our obligations and return capital to our stockholders.

Operations of the Company are conducted by its subsidiaries. As such, Primerica, Inc. is a holding company that has no significant operations. Our primary asset is the capital stock of our subsidiaries and our primary liability is our senior unsecured notes (the “Senior Notes”). We rely primarily on dividends and other payments from our subsidiaries to meet our operating costs, other corporate expenses, and Senior Notes obligations, as well as to return capital to our stockholders. The ability of our subsidiaries to pay dividends to us depends on their earnings, covenants contained in existing and future financing or other agreements and on regulatory restrictions. The ability of our insurance subsidiaries to pay dividends will further depend on their statutory income and surplus. If the cash we receive from our subsidiaries is insufficient for us to fund our obligations or if a subsidiary is unable to pay dividends to us, we may be required to raise cash through the incurrence of debt, the issuance of equity or the sale of assets. However, given the risk of volatility in the capital markets, there is no assurance that we would be able to raise cash by these means.

The jurisdictions in which our insurance subsidiaries are domiciled impose certain restrictions on their ability to pay dividends to us. In the United States, these restrictions are based, in part, on the prior year’s statutory income and surplus. In general, dividends up to specified levels are considered ordinary and may be paid without prior approval. Dividends in larger amounts are subject to approval by the insurance commissioner of the state of domicile. In Canada, dividends can be paid, subject to the paying insurance company continuing to meet the regulatory requirements for capital adequacy and liquidity and upon 15 days’ minimum notice to OSFI. More stringent restrictions could be adopted from time to time by jurisdictions in which our insurance subsidiaries are domiciled, and such restrictions could have the effect, under certain circumstances, of significantly reducing dividends or other amounts payable to us by our subsidiaries without prior approval by regulatory authorities. In addition, in the future, we may become subject to debt covenants or other agreements that limit our ability to return capital to our stockholders. The ability of our insurance subsidiaries to pay dividends to us is also limited by our need to maintain the financial strength ratings of our subsidiaries assigned by the ratings agencies.

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If any of our subsidiaries were to become insolvent, liquidate, or otherwise reorganize, we, as sole stockholder, will have no right to proceed against the assets of that subsidiary. Furthermore, with respect to our insurance subsidiaries, we, as sole stockholder, will have no right to cause the liquidation, bankruptcy, or winding-up of the subsidiary under the applicable liquidation, bankruptcy or winding-up laws, although, in Canada, we could apply for permission to cause liquidation. The applicable insurance laws of the jurisdictions in which each of our insurance subsidiaries is domiciled would govern any proceedings relating to that subsidiary. The insurance authority of that jurisdiction would act as a liquidator or rehabilitator for the subsidiary. Both creditors of the subsidiary and policyholders (if an insurance subsidiary) would be entitled to payment in full from the subsidiary’s assets before we, as the sole stockholder, would be entitled to receive any distribution from the subsidiary.

If the ability of our insurance or non-insurance subsidiaries to pay dividends or make other distributions or payments to us is materially restricted by regulatory requirements, bankruptcy, or insolvency, or our need to maintain our financial strength ratings, or is limited due to operating results or other factors, it could materially adversely affect our ability to fund our obligations and return capital to our stockholders.

Risks Related to Legislative and Regulatory Changes and Government Policy Uncertainty

We are subject to various federal, state and provincial laws and regulations in the United States and Canada, as well as executive branch actions, orders and policies, judicial rulings and decisions by public officials, any of which may require us to alter our business practices and could materially adversely affect our business, financial condition and results of operations.

 

Our business is subject to many laws, regulations and government policies that could relate to, among other things, consumer protection, fair credit reporting, financial privacy, consumer fraud, anti-money laundering, worker classification standards, worker eligibility, corporate taxation, artificial intelligence or algorithmic underwriting, and transactions with certain countries. These laws and regulations often are subject to the political climate.

 

Changes in any of these laws, regulations or government policies may require additional compliance procedures, which could have a material adverse effect on our business, financial condition, and results of operations.

Uncertainty in the legislative and regulatory climate with regard to financial services may adversely affect our business, financial condition, and results of operations.

The volume and purpose of legislative, regulatory and executive activity related to financial services and the level of enforcement actions and investigations by federal, state and provincial authorities may vary based on the political climate. Legislative, regulatory and enforcement activity at the federal level, whether considerable or not, may contribute to heightened activity at the state and provincial level. In addition, volatility in the objective and permanency of laws and regulations may lead to uncertainty. If we or the independent sales representatives become subject to new requirements or regulations or experience voluminous changes in laws, it could result in increased litigation, regulatory risks, changes to our business model, a decrease in the number of securities-licensed representatives, increased compliance costs, or a reduction in the products we offer to our clients or the profits we earn, which could have a material adverse effect on our business, financial condition and results of operations.

Regulators could also adopt laws or interpret existing laws in a way that would require retroactive changes to our business, accounting practices, or redundant reserve financing structure. Any such retroactive changes could have a material adverse effect on our business, financial condition and results of operations.

The current regulatory climate with regard to climate change may adversely affect our business, financial condition, and results of operations.

Activity by federal, state and provincial regulators relating to the possible impacts of climate change on companies and their constituents has resulted in heightened legislative and regulatory activity at the federal, state and provincial levels.

For example, on October 7, 2023, California enacted The Climate Corporate Accountability Act (“SB 253”) and The Climate-Related Financial Risk Act (“SB 261”), which impose extensive new climate-related reporting requirements on any U.S. business entity with annual revenues over $1 billion and $500 million (for SB 253 and SB 261, respectively) doing business in California. SB 253 requires disclosure of Scope 1 and 2 greenhouse gas (“GHG”) emissions beginning in 2026 and Scope 3 GHG emissions beginning in 2027. SB 261 requires covered entities to biennially report on climate-related financial risk and measures adopted to reduce and adapt to such risk; however, the Company is exempt from SB 261 because it already completes the Climate Risk Disclosure Survey, an annual survey administered by the California Department of Insurance. On September 27, 2024, California enacted Senate Bill 219 (“SB 219”), amending SB 253 and SB 261 by, among other things, (i) extending the deadline for the California Air Resources Board (“CARB”) to implement regulations from January 1, 2025 to July 1, 2025; (ii) authorizing reporting entities to consolidate emissions disclosures at the parent company level; and (iii) granting CARB discretion to set Scope 3 GHG emissions disclosure in 2027. Regulations from CARB pursuant to SB 219 are expected to be released in the first quarter of 2026.

36

 

 

In addition, on March 7, 2023, OSFI issued its final Guideline B-15, which sets out expectations for the management and disclosure of climate-related risks for federally regulated financial institutions in Canada, including public disclosure of Scope 1 and 2 GHG emissions no later than 180 days after the fiscal year ended December 31, 2025 and Scope 3 GHG emissions no later than 180 days after the fiscal year ending December 31, 2028. Guideline B-15 also includes OSFI’s expectation that applicable entities conduct internal and standardized climate scenario analyses and report the results to OSFI periodically.

 

Compliance with SB 253, SB 219, Guideline B-15 and any other climate disclosure rules applicable to the Company may require significant assistance from third-party vendor(s). Factors that could adversely impact our ability to comply with any new climate disclosure rules include, but are not limited to, failure to secure the assistance of a third-party vendor(s), inability to gather the requisite data in a timely manner or at all, and/or significant associated financial costs.

General Risk Factors

Litigation and regulatory investigations and actions may result in financial losses and harm our reputation.

We face a risk of litigation and regulatory investigations and actions in the ordinary course of operating our businesses. From time to time, we are subject to private litigation as a result of alleged independent sales representative misconduct or alleged failure of the Company to follow applicable insurance, securities or other laws or regulations. If we become subject to any such litigation, the associated legal expense and any judgment or settlement of the claims could have a material adverse effect on our business, financial condition and results of operations.

We are also routinely subject to regulatory inquiries, such as information requests, subpoenas and books and record examinations, from state, provincial and federal regulators and other authorities and from time to time, regulatory investigations as a result of alleged independent sales representative misconduct or alleged failure of the Company to follow applicable laws or regulations. A substantial legal liability or a significant regulatory action against us could have a material adverse effect on our business, financial condition and results of operations.

Moreover, even if we ultimately prevail in any litigation, regulatory action or investigation, we could suffer significant reputational harm and we could incur significant legal expenses, either of which could have a material adverse effect on our business, financial condition and results of operations. In addition, increased regulatory scrutiny and any resulting investigations or proceedings could result in new legal precedents and industry-wide regulations or practices that could materially adversely affect our business, financial condition and results of operations.

A significant change in the competitive environment in which we operate could negatively affect our ability to maintain or increase our market share and profitability.

We face competition in all of our business lines. Our competitors include financial services companies, banks, investment management firms, broker-dealers, registered investment advisers, insurance companies, insurance brokers, direct sales companies, and technology companies. In many of our product offerings, we face competition from competitors that may have greater market share or breadth of distribution, offer a broader range of products, services or features, assume a greater level of risk, have lower profitability expectations, have lower fee and expense ratios, have higher financial strength ratings, offer more robust digital tools and self-service capabilities than we do or made use of emerging technologies, including AI, more fully or rapidly than us. More recently, significant capital has been invested in direct-to-consumer offerings, including wealth management, retirement and life insurance products. In addition, regulatory changes and competitive factors are leading to innovations in product offerings and compensation structures. To the extent these entrants create a significant change in the competitive environment, our ability to maintain or increase our market share and profitability could be materially adversely affected.

Primerica’s continued success requires a high-performing and stable team of employees across all levels, and the loss of key employees could negatively affect our financial condition and impair our ability to implement our business strategy.

In addition to intense competition for talent, workforce dynamics are constantly evolving. A disproportionate loss of staff can negatively impact morale, productivity and service levels. If the Company does not manage these changing workforce dynamics effectively, leading to prolonged employee attrition, or reasonable security measures with respect to senior management when traveling on behalf of the Company fail, it could materially adversely affect the Company’s financial condition, results of operations, and inhibit our long-term business strategy.

Further, our success substantially depends on our ability to attract and retain members of our senior management team. The efforts, level of engagement, and leadership of our senior managers have been, and will continue to be, critical to our success. The Company anticipates a steady pace of retirements within our senior management team in the years to come. While our senior management talent

37

 

and succession plans and processes are reviewed and updated routinely, the loss of service of members of our senior management team for any reason and without adequate succession planning and talent management could reduce our ability to successfully motivate the independent sales representatives or implement our business plan, which could have a material adverse effect on our business, financial condition and results of operations. Although our executive officers have entered into employment agreements with us, there is no assurance that they will complete the term of their employment agreements or that such agreements will be renewed.

We may not be able to effectively execute our corporate strategy, which could have a material adverse effect on our business, financial condition and results of operations.

 

Our mission to create financially independent families has remained unchanged. In early 2025, we updated our corporate strategy to re-align our mission, strategic vision, guiding principles and growth pillars to help us continue to deliver on our mission. An inability to effectively execute our corporate strategy could have a material adverse effect on our business, financial condition and results of operations.

We may be materially adversely affected by currency fluctuations in the United States dollar versus the Canadian dollar.

The Canadian dollar is the functional currency for our Canadian subsidiaries and our financial results, reported in U.S. dollars, are affected by changes in the currency exchange rate. The assets, liabilities, revenues, and expenses of our Canadian subsidiaries are generally all denominated in Canadian dollars. However, the Canadian dollar financial statements of our Canadian subsidiaries are translated into U.S. dollars in our consolidated financial statements included elsewhere in this report. Therefore, significant exchange rate fluctuations between the U.S. dollar and the Canadian dollar could have a material adverse effect on our financial condition and results of operations. A weaker Canadian dollar relative to the U.S. dollar would result in lower levels of reported revenues, expenses, net income, assets, liabilities and accumulated other comprehensive income as translated in our U.S. dollar reporting currency financial statements. In addition, our net investment in our Canadian subsidiaries is significantly affected by fluctuations in the exchange rate between the U.S. dollar and the Canadian dollar.

The market price of our common stock may fluctuate.

The stock market in general, and the market for companies in the financial services industry in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Also, broad market and industry factors may negatively affect the market price of our common stock, regardless of our actual operating performance. Our stock could be subject to wide fluctuations in price in response to various factors, many of which are beyond our control.

 

ITEM 1B. UNRESOLVED STAFF COMMENTS.

Not applicable.

 

ITEM 1C. CYBERSECURITY.

 

Risk Management and Strategy

Primerica has processes in place aimed at assessing, identifying, and managing material risks from cybersecurity threats which are integrated into Primerica’s enterprise risk management system. Primerica’s enterprise risk management and internal audit functions conduct regular assessments and audits of risks from cybersecurity threats and report the results to the Board of Directors at least quarterly. The Board considers cybersecurity risk as part of its business strategy, risk management, and financial oversight.

 

Primerica institutes a three-lines-of-defense model for information security risk assurance, in which management owns the risk, our enterprise risk management team assesses the risk and oversees compliance with internal guidelines and policies, and our internal audit team reviews the effectiveness of the first two lines of defense. Management works with external assessors, consultants, auditors, and other third parties from time to time in conducting maturity and technical assessments.

 

Primerica has processes in place to oversee and identify material risks from cybersecurity threats associated with its use of third-party service providers. The Company maintains a policy governing information security, which includes risk assessment policies and procedures relating to third-party vendors, as well as a data loss prevention policy. The Company’s policies address technical requirements needed to protect the environments in which data is processed, as well as how it is maintained, governed, and protected. Primerica also imposes mandatory privacy and information security controls and data security protection requirements on the independent sales force. We train all regular employees in information security and privacy-related risks and we perform regular tests to determine whether our employees can recognize phishing emails. Similarly, our annual compliance training for the independent sales representatives includes training on maintaining data security and privacy.

38

 

 

We have an incident response plan designed to help us monitor the prevention, detection, mitigation, and remediation of information security incidents. The incident response plan documents the roles and responsibilities of Primerica personnel in responding to information security incidents, including the process by which our Chief Information Security Officer, our Chief Information Officer, senior management, and the Board is informed about such incidents.

Our Chief Information Security Officer leads the Company’s Incident Advisory Committee (“IAC”), which is notified in the event of high or medium severity incidents. The IAC includes representatives from information technology, legal, and often the impacted business unit. The Incident Response Team (“IRT”) consists of the IAC and a larger group of managers that is typically notified of more significant incidents. The IRT reports findings to management and the Board as necessary. Each IRT member has specific responsibilities related to his or her function at the Company. On a semi-annual basis, the IRT undertakes facilitator-led trainings and simulations of information security incidents.

The Company is not aware that it has experienced any cybersecurity threats or incidents that have materially adversely affected or are reasonably likely to materially adversely affect the Company and its business strategy, results of operations and/or financial condition. For a discussion of risks to the Company related to cybersecurity threats, see “Item 1A. Risk Factors – Risks Related to Information Technology and Cybersecurity”, which is incorporated herein by reference.

Governance

The Board of Directors has responsibility for oversight of risks from cybersecurity threats. The Board receives a quarterly report from our Chief Information Officer and Chief Information Security Officer on risks from cybersecurity threats and, under the Company’s incident reporting plan, the Board is informed by management of certain cybersecurity incidents as appropriate.

 

Primerica’s senior executive leadership is actively involved in managing material risks from cybersecurity threats. Primerica’s cybersecurity operations risk steering group is chaired by our Chief Insurance Officer and holds quarterly meetings. It includes key executives from the Company’s technology, security, privacy, and legal teams, coordinates corporate security initiatives and provides high-level guidance on technology-and security-related issues. Our Chief Information Security Officer has responsibility for assessing and managing the Company’s material risks from cybersecurity threats. Our Chief Information Security Officer has served in various roles in information technology and information security for 37 years, including serving as the Company’s Chief Information Security Officer for over 25 years.

ITEM 2. PROPERTIES.

Our executive offices and business operations are housed primarily at our home office facility located in Duluth, Georgia. Our home office facility consists of approximately 345,000 square feet of general office space where our primary business operations are maintained including our information technology infrastructure and our media production studios. The lease for this building is scheduled to expire on December 31, 2035. This office space is used by all of our operating segments.

We also maintain a regional head office location for our Canadian operations in Mississauga, Ontario. Our Canadian head office location consists of general office space under a lease expiring in October 2030. This office space is used by all of our operating segments.

We lease general office space for our NBLIC subsidiary in Long Island City, New York under a lease expiring in March 2030. This office space is primarily used by the Corporate and Other Distributed Products segment.

We believe that our existing facilities in the U.S. and Canada are adequate for our current requirements and for our operations for the foreseeable future.

 

ITEM 3. LEGAL PROCEEDINGS.

We are involved from time to time in legal disputes, regulatory inquiries and arbitration proceedings in the normal course of business. Additional information regarding certain legal proceedings to which we are a party is described under “Contingent Liabilities” in Note 18 (Commitments and Contingent Liabilities) to our consolidated financial statements included elsewhere in this report, and such information is incorporated herein by reference. As of the date of this report, we do not believe any pending legal proceeding to which Primerica or any of its subsidiaries is a party is required to be disclosed pursuant to this item.

 

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

39

 

ITEM X. INFORMATION ABOUT OUR EXECUTIVE OFFICERS AND CERTAIN SIGNIFICANT EMPLOYEES

 

The name, age at February 27, 2026, and position of each of our executive officers and certain significant employees are presented below. These officers comprise our senior management team.

 

Name

 

Age

 

Position

Executive Officers:

 

 

 

 

Glenn J. Williams

 

66

 

Chief Executive Officer

Peter W. Schneider

 

69

 

President

Tracy X. Tan

 

55

 

Executive Vice President and Chief Financial Officer

Certain Significant Employees:

John A. Adams

 

67

 

Executive Vice President; Chief Executive Officer of Primerica Life Insurance Company of Canada

Michael C. Adams

 

69

 

Executive Vice President, Special Strategic Projects

Lisa A. Brown

 

56

 

Executive Vice President and Chief People Officer

Nicholas E. Craven

 

41

 

Executive Vice President and Chief Insurance Officer

Stacey K. Geer

 

59

 

Executive Vice President, Deputy General Counsel, Chief Governance and Risk Officer, and Corporate Secretary

Kathryn E. Kieser

 

56

 

Executive Vice President and Chief Reputation Officer

Rosie Orlando

 

59

 

Executive Vice President; President of Primerica Life Insurance Company of Canada

Robert H. Peterman, Jr.

 

60

 

Executive Vice President and Chief Operating Officer

Paul E. Regard

 

53

 

Executive Vice President; Chief Executive Officer of PFS Investments Inc.

Brett A. Rogers

 

60

 

Executive Vice President and General Counsel

Julie A. Seman

 

56

 

Executive Vice President and Chief Marketing and Innovation Officer

Dale A.M. Tuck

 

53

 

Executive Vice President and Chief Information Technology Officer

 

Set forth below is biographical information concerning our executive officers, who were elected by our Board of Directors and serve subject to their respective employment agreements.

Glenn J. Williams has served as Chief Executive Officer since April 2015. He served as President from 2005 through March 2015. Previously, he served as Executive Vice President of Field and Product Marketing for international operations from 2000 to 2005, as President and Chief Executive Officer of Primerica Canada from 1996 to 2000, and in roles of increasing responsibility as part of Primerica’s international expansion team in Canada from 1985 to 2000. He began his career with Primerica in 1981 as a member of the Company’s independent sales force and joined the home office team in 1983. Mr. Williams earned his B.S. degree in Education from Baptist University of America. He has served on the board of trustees for the Georgia Baptist Foundation since October 2024 and from 2019 to 2023.

Peter W. Schneider has served as President since April 2015. He served as Executive Vice President, General Counsel, and Chief Administrative Officer from 2000 to April 2015 and as Corporate Secretary from 2000 through January 2014. He began his professional career as an Associate at the law firm of Paul, Weiss, Rifkind, Wharton & Garrison and worked as a Partner at the law firm of Rogers & Hardin LLP in Atlanta, Georgia from 1988 to 2000. Mr. Schneider earned both his B.S. degree in political science and industrial relations and his J.D. from the University of North Carolina at Chapel Hill. He serves on the Advisory Council of the Securities Industry and Financial Markets Association (SIFMA), the board of directors of Camp John W. Hanes (YMCA), the board of visitors of the University of North Carolina at Chapel Hill and the National Commission of the Anti-Defamation League.

Tracy X. Tan has served as Executive Vice President and Chief Financial Officer since December 2023. She joined Primerica in October 2023 as Executive Vice President, Finance and was designated at that time as the next Chief Financial Officer. In this role, she serves as a key spokesperson with the investor and analyst communities and focuses on the Company’s economic and business strategy, while driving value creation for all stakeholders through innovation and financial management. Ms. Tan oversees all aspects of the Company’s finance function and Enterprise Transformation Office, including planning and analysis, controllership, investor relations, treasury, tax, and capital markets. Prior to joining Primerica, from 2018 to October 2023, Ms. Tan served as Chief Financial Officer (CFO) of Strategic Link Consulting, a fintech enterprise. From 2015 to 2018, Ms. Tan was Senior Vice President and CFO for Assurant Global Housing, a subsidiary of Assurant, Inc. From 2013 to 2015, she served as Vice President (VP) of Finance and Divisional CFO for Novelis North America in Novelis Inc. From 2005 to 2013, she was VP and Divisional CFO for the Electrical and Industrial Divisions of Southwire Company. Ms. Tan began her career at General Electric Company in 1996, where she held various roles with increasing responsibilities across four industries, including as VP and CFO for GE Intelligent Platform Embedded Systems from 2003 to 2005. Ms. Tan has an M.B.A. degree from Bowling Green State University. She is also an alumna of GE’s Experienced Financial Leadership Program and Financial Management Program.

Set forth below is biographical information concerning certain significant employees, who were elected as officers by our Board of Directors.

40

 

John A. Adams has served as Executive Vice President of Primerica, Inc. since May 2018 and as the Chief Executive Officer of Primerica Life Insurance Company of Canada (PLICC) since 2003. He previously served Primerica Life Canada as Chief Financial Officer and before that as Vice President of Finance. Before joining Primerica, Mr. Adams served as the Director of Finance of a major Canadian university and Treasurer of an insurance group of companies. He began his career in 1980 with KPMG LLP. He graduated from Trinity College at the University of Toronto with a Bachelor of Commerce degree and is a Chartered Accountant and Chartered Professional Accountant. Mr. Adams provides industry leadership as Board Chairman of the Federation of Independent Dealers (FID) since January 2026, having served as a board member of FID since 2022. He previously served as a board member of the Securities and Investment Management Association (SIMA) from 2005 to 2025 and as SIMA’s Board Chairman from 2015 to 2017.

Michael C. Adams has served as Executive Vice President, Special Strategic Projects of Primerica, Inc. since October 2024. He previously served as Executive Vice President and Chief Business Technology Officer from May 2021 to October 2024 and was responsible for business technology since 1988. He was Co-Head of Business Technology from 2017 to May 2021 and served in various capacities at the Company since 1980. Mr. Adams earned his B.A. degree in business and economics from Hendrix College in 1978.

Lisa A. Brown has served as Executive Vice President and Chief People Officer of Primerica, Inc. since October 2024. She previously served as Chief Administrative Officer from October 2020 to October 2024. In her current role, Ms. Brown leads the Company’s Human Resources (HR) and Talent Management functions, driving its people strategy, organizational culture, leadership development, and talent continuity strategies. She also provides executive oversight of workplace culture and inclusion initiatives and manages the engagement strategy of the Company’s Strategic Markets business groups that support the Company’s independent sales force leaders. Prior to joining Primerica, Ms. Brown spent over 21 years at Delta Air Lines where she held leadership roles in Human Resources. Her experience includes leading enterprise-wide talent development initiatives, overseeing HR operations for Delta Airlines’ subsidiaries, and serving as the senior HR executive for multiple customer-facing organizations. Ms. Brown holds a B.S. degree in Human Resources Administration from Michigan State University and a M.B.A. from Kennesaw State University. In addition to being an active member of Delta Sigma Theta Sorority, Inc., she serves on the Broad College of Business Advisory Board at Michigan State University and serves on the board of Junior Achievement of Georgia.

Nicholas E. Craven has served as Executive Vice President and Chief Insurance Officer of Primerica, Inc. since October 2024. In this role, he oversees the operations of Primerica Life Insurance Company (PLIC) as well as agent life insurance licensing, data analytics and technology company wide. Previously, he served as President of PLIC from April 2021 through December 2024 and as Senior Vice President and Chief Information Officer of PLIC from August 2018 to April 2021. Prior to joining Primerica, he advanced through various consulting roles of increasing seniority at Ernst & Young, LLP from 2013 to 2018. Mr. Craven has a Bachelor of Business Administration from Georgia State University.

Stacey K. Geer has served as Executive Vice President, Deputy General Counsel, Chief Governance Officer and Corporate Secretary of Primerica, Inc. since March 2015. She was named the Company’s Chief Risk Officer in May 2024. In these capacities, she has responsibility for all corporate governance matters, including matters relating to the board of directors, SEC disclosure, financings and company equity, mergers and acquisitions and sustainability, and she also supervises certain of the Company’s non-governance related legal functions. Ms. Geer joined Primerica in February 2010. Prior to joining Primerica, Ms. Geer served as Deputy General Counsel of Mueller Water Products, Inc. from 2007 to February 2010, as the Chief Securities Counsel of BellSouth Corporation from 2001 to 2007, and as a Partner at King & Spalding in Atlanta, Georgia from 2000 to 2001. Ms. Geer received a B.S degree in Economics from The Wharton School of the University of Pennsylvania and a J.D. from the UCLA School of Law.

Kathryn E. Kieser has served as Executive Vice President and Chief Reputation Officer of Primerica, Inc. and President and Chair of the Primerica Foundation since January 2019, leading public relations, social media, search and generative engine optimization, enterprise research and philanthropy. Previously, she served as Executive Vice President of Investor Relations from April 2010 to December 2018. Ms. Kieser joined Primerica in October 1995 and has held many positions over her career including Vice President of Sales and Product Marketing, Senior Vice President of Auto and Homeowners Insurance, and Chief Marketing Officer for Primerica Life Insurance Company (PLIC). Ms. Kieser earned her B.S. degree in Business Administration from Auburn University and a Master of Science degree from Georgia State University. She serves on the boards of directors for the Gwinnett Chamber of Commerce and the Community Foundation for Northeast Georgia and on the board of advisors for the Metro Atlanta Chamber of Commerce.

Rosie Orlando has served as Executive Vice President of Primerica, Inc. since October 2024 and as President of Primerica Life Insurance Company of Canada (PLICC) since November 2022. She previously served as Executive Vice President and Chief Operating Officer of PLICC from February 2006 to November 2022, Senior Vice President, Training and Development from January 2022 to February 2006 and in various roles since joining the Company in 1992. Ms. Orlando obtained her B.A. from York University in Toronto.

41

 

Robert H. Peterman, Jr. has served as Executive Vice President and Chief Operating Officer of Primerica, Inc. since October 2024. He previously served as Executive Vice President and Chief Distribution Officer from March 2023 to October 2024 and as Executive Vice President and Chief Marketing Officer from 2018 to March 2023. He served as President of Primerica Distribution from 2013 to 2018, where he was responsible for recruiting, licensing, licensing education, field compensation, field equity, and decision support. In 2005, he became Executive Vice President and was given responsibility for the Company’s Grow the Sales Force initiative. He also served as Chief Executive Officer of Primerica’s National Benefit Life Insurance Company from 2017 to 2018. Mr. Peterman joined the Company in 1984 and has served in many varying roles throughout the business.

Paul E. Regard has served as Executive Vice President of Primerica, Inc. since October 2024 and as Chief Executive Officer and President of PFS Investments Inc. since October 2023. Since joining Primerica in September 2015, he has held various roles in the Company’s securities business, including building and launching the Company’s managed account platform. Before joining Primerica, Mr. Regard was a Director at The Bank of New York Mellon Corporation (BNY Mellon) from 2008 to 2013 where he helped develop BNY Mellon’s asset management business for Asian financial intermediaries. Mr. Regard has a B.S. in Finance from the University of Notre Dame.

Brett “Ben” A. Rogers has served as Executive Vice President and General Counsel since May 2019. Previously, he was a Partner at Rogers & Hardin LLP in Atlanta, Georgia, where he represented Primerica as outside counsel for more than 20 years. At Rogers & Hardin LLP, his practice focused on complex business matters, including securities litigation, arbitration, and general commercial litigation. Mr. Rogers received a B.A. degree from Dickinson College and his J.D. with honors from Florida State University.

Julie A. Seman has served as Executive Vice President and Chief Marketing and Innovation Officer since March 2023, responsible for the marketing of our Life, Investment and Savings, and Legal Protection products, Digital & Field Distribution and Meetings & Conventions. She previously served as Executive Vice President and Chief Marketing Officer of Field Distribution, Digital Distribution, Primerica Life, Client Solutions, and Strategic Markets from May 2018 to March 2023. Since 2014 she has been responsible for sales force growth and increased product distribution through the training and development of financial services representatives in the United States, Canada, Puerto Rico and Guam. In addition, Ms. Seman previously supported Primerica’s Strategic Markets, which include African American, Asian Pacific Islander, Hispanic, Partnership and Women with a focus on personal financial education and entrepreneurship. Prior thereto, she was Senior Vice President of Client Solutions from 2010 to 2014 where she supervised all front-end products and oversaw field communication tools. Ms. Seman joined the Company in 1998 and has served in many roles with increasing responsibility. Ms. Seman received her B.S. degree in Business Management from Southern Illinois University.

Dale A.M. Tuck has served as Executive Vice President and Chief Information Technology Officer of Primerica, Inc. since October 2024. Since September 2020, he has served as Executive Vice President of Primerica Life Insurance Company (PLIC) and since October 2024 as Chief Information Technology Officer, overseeing information technology initiatives across the Company. He served as Senior Vice President, Technology Strategy and Governance from February 2019 to September 2020. Prior to joining Primerica, Mr. Tuck served as Head of Digital Business at Neudesic, an IBM company, from 2018 to February 2019 and in various roles throughout his nearly 20 year technology-related career. He obtained a Higher Diploma (HD) in Marketing Management from the Institute of Marketing Management in Durban, South Africa and a Masters in Business Administration from the University of Manchester in the United Kingdom.

 

42

 

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Market Information

Our common stock is listed for trading on the New York Stock Exchange (“NYSE”) under the symbol “PRI.”

Holders

As of January 31, 2026, we had 332 holders of record of our common stock.

Dividends

In the first quarter of 2026, we declared a quarterly dividend to stockholders of $1.20 per share. We currently expect to continue to pay comparable quarterly cash dividends to holders of our common stock. Our payment of cash dividends is at the discretion of our Board of Directors in accordance with applicable law after taking into account various factors, including our financial condition, operating results, current and anticipated cash needs and plans for growth. Under Delaware law, we can only pay dividends either out of surplus or out of the current or the immediately preceding year’s earnings. Therefore, no assurance is given that we will continue to pay any dividends to our common stockholders, or as to the amount of any such dividends.

Issuer Purchases of Equity Securities

Depending on market conditions, shares of our common stock may be repurchased from time to time at prevailing market prices through open market or privately negotiated transactions.

The Parent Company has no obligation to repurchase any shares. Subject to applicable corporate and securities laws, repurchases may be made at such times and in such amounts as management deems appropriate. Repurchases under a publicly announced program can be discontinued at any time if management believes additional repurchases are not warranted.

During the quarter ended December 31, 2025, we repurchased shares of our common stock as follows:

 

Period

 

Total number of shares purchased (1)

 

 

Average price paid per share (1)

 

 

Total number of shares purchased as part of publicly announced plans or programs (2)

 

 

Approximate dollar value of shares that may yet be purchased under the plans or programs (2)(3)

 

October 1 - 31, 2025

 

 

175,518

 

 

$

268.65

 

 

 

173,150

 

 

$

27,467,878

 

November 1 - 30, 2025

 

 

107,173

 

 

 

256.55

 

 

 

107,064

 

 

 

475,000,000

 

December 1 - 31, 2025

 

 

-

 

 

 

-

 

 

 

-

 

 

 

475,000,000

 

     Total

 

 

282,691

 

 

$

264.07

 

 

 

280,214

 

 

 

475,000,000

 

(1)
Consists of repurchases of (a) 2,477 shares of common stock at an average price of $276.12 arising from share-based compensation tax withholdings and (b) open market repurchases of shares of common stock under the share repurchase program approved by our Board of Directors.
(2)
On November 14, 2024, our Board of Directors authorized, and the Company announced, a share repurchase program for purchases of up to $450.0 million of our outstanding common stock from November 14, 2024 through December, 31, 2025. This share repurchase program expired on December, 31, 2025 in accordance with its terms.
(3)
On November 19, 2025, our Board of Directors authorized, and the Company announced, a share repurchase program for purchases of up to $475.0 million of our outstanding common stock from November 19, 2025 through December, 31, 2026.

 

For more information on our share repurchases, see Note 14 (Stockholders’ Equity) to our consolidated financial statements included elsewhere in this report.

Stock Performance Table (1)

The following graph compares the performance of our common stock to the S&P MidCap 400 Index and the S&P 500 Insurance Index by assuming $100 was invested in each investment option as of December 31, 2020 and the reinvestment of all dividends. The S&P MidCap 400 Index measures the performance of the United States middle market capitalization (“or mid-cap”) equities sector.

43

 

The S&P 500 Insurance Index is a capitalization-weighted index of domestic equities of insurance companies traded on the NYSE and NASDAQ. Our common stock is included in the S&P MidCap 400 index.

img159280153_1.gif

 

 

 

 

 

Period Ended

 

Index

 

12/31/2020

 

12/31/2021

 

12/31/2022

 

12/31/2023

 

12/31/2024

 

12/31/2025

 

Primerica, Inc.

 

$

100.00

 

$

115.87

 

$

109.00

 

$

160.32

 

$

214.21

 

$

207.06

 

S&P 500 Insurance

 

 

100.00

 

 

132.12

 

 

145.50

 

 

158.98

 

 

201.62

 

 

209.86

 

S&P MidCap 400

 

 

100.00

 

 

124.76

 

 

108.47

 

 

126.30

 

 

143.89

 

 

154.68

 

(1)
The stock performance table is not deemed “soliciting material” or subject to Section 18 of the Exchange Act.

 

ITEM 6. [RESERVED]

Not applicable.

 

 

44

 

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to inform the reader about matters affecting the financial condition and results of operations of Primerica, Inc. (the “Parent Company”) and its subsidiaries (collectively, “we”, “us” or the “Company”) for the three-year period ended December 31, 2025. As a result, the following discussion should be read in conjunction with the consolidated financial statements and accompanying notes that are included elsewhere in this report. This discussion contains forward-looking statements that constitute our plans, estimates and beliefs. These forward-looking statements involve numerous risks and uncertainties, including, but not limited to, those discussed in “Item 1A. Risk Factors”. Actual results may differ materially from those contained in any forward-looking statements.

This section generally discusses 2025 and 2024 items and comparisons between 2025 and 2024 results. We also present 2023 items and comparisons between 2024 and 2023 results in this section. However, discussions of comparisons between 2024 and 2023 are not included in this section but rather can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the Securities and Exchange Commission on February 28, 2025 (the “2024 MD&A”).

This MD&A is divided into the following sections:

•
Business Trends and Conditions
•
Factors Affecting Our Results
•
Critical Accounting Estimates
•
Results of Operations
•
Financial Condition
•
Liquidity and Capital Resources

The Company previously reported a Senior Health segment, which consisted of e-TeleQuote Insurance, Inc. and subsidiaries, a marketer of Medicare-related insurance products underwritten by third-party health insurance carriers to eligible Medicare beneficiaries (the “Senior Health business”) that was disposed of as of September 30, 2024, and is now reported in discontinued operations for all periods presented. Refer to Note 2 (Discontinued Operations) to our consolidated financial statements included elsewhere in this report for further details.

Business Trends and Conditions

The relative strength and stability of the financial markets and economies in the United States and Canada affect our growth and profitability. Our business is, and we expect will continue to be, influenced by a number of industry-wide and product-specific trends and conditions. Economic conditions, including unemployment levels, inflation and consumer confidence, influence investment and spending decisions by middle-income consumers, who are generally our primary clients. These conditions and factors also impact prospective recruits’ perceptions of the business opportunity that becoming an independent sales representative offers. Consumer spending and borrowing levels affect how consumers evaluate their savings and debt management plans. In addition, equity market returns and interest rates impact consumer demand for the investment and savings products we distribute. Our customers’ perception of the strength of the capital markets may also influence their decisions to invest in the investment and savings products we distribute. We believe the economic conditions impacting middle-income households underscore their increasing need for our financial education, products and services to assist them in reaching the long-term goal of becoming financially independent.

The financial and distribution results of our operations in Canada, as reported in U.S. dollars, are affected by changes in the currency exchange rate. As a result, changes in the Canadian dollar exchange rate may significantly affect the results of our business for all amounts translated and reported in U.S. dollars.

The cumulative impact of inflation in recent years has led to an elevated cost of living for middle-income families, which we believe has adversely impacted persistency for term life insurance policies. Policy lapse rates of term life insurance products remained above long-term historical levels in 2025 but have been steady in the aggregate of all policy durations compared to the prior year. In addition, continued economic uncertainty in 2025 has had an impact on consumer behavior. The continuation of these cost of living pressures as well as economic uncertainty could adversely impact demand for our products.

Meanwhile, strong equity market performance in recent periods, favorable demographic trends, and expanded product offerings have provided significant momentum for our Investment and Savings Products business. Positive equity market performance in 2023 through 2025 has beneficially influenced product sales and client asset values that drive revenue in the Investment and Savings Products segment. In addition, demand for our investment and savings products has been positively impacted by favorable demographic trends as a generation of clients approaching retirement seek annuity solutions that provide income stability and protection, as well as by increased interest in the investment advisory services and broader product offerings through our managed accounts program.

45

 

The rise in market interest rates in 2022 and further rate increases in 2023 have largely driven the unrealized losses that have accumulated in our investment portfolio, although these unrealized losses have declined as interest rates edged lower in 2025. We have not recognized losses caused by interest rate volatility in the income statement for securities where we have no present intention to dispose of them and we have the ability to hold these investments until maturity or a market price recovery. Elevated interest rates have also led to increases in net investment income as we are able to earn higher returns on our new debt securities purchases and cash balances.

The effects of these trends and conditions are discussed below, in the Results of Operations and Financial Condition sections.

Size of the Independent Sales Force. Our ability to increase the size of the independent sales force (“independent sales representatives” or “independent sales force”) is largely based on the success of the independent sales force’s recruiting efforts as well as training and motivating recruits to get licensed to sell life insurance. We believe that recruitment and licensing levels are important to independent sales force trends, and growth in recruiting and licensing is usually indicative of future growth in the overall size of the independent sales force. Recruiting changes do not always result in commensurate changes in the size of the licensed independent sales force because new recruits may obtain the requisite licenses at rates above or below historical levels.

Details on recruiting and life-licensed independent sales representative activity were as follows:

 

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

New recruits

 

 

358,316

 

 

 

445,425

 

 

 

361,925

 

New life-licensed independent sales representatives

 

 

48,722

 

 

 

56,320

 

 

 

49,096

 

Life-licensed independent sales representatives, at period end

 

 

151,524

 

 

 

151,611

 

 

 

141,572

 

The number of new recruits decreased in 2025 compared to 2024, partly driven by the comparison to 2024, which included exceptionally strong activity, but the number of new recruits in 2025 remains in line with historical activity. Approximately 81,000 individuals were recruited as a result of special incentives that were in place following our biennial convention in the third quarter of 2024.

New life-licensed independent sales representatives decreased in 2025 compared to 2024 likely influenced by the same year-over-year dynamics that impacted the decline in number of new recruits. Despite the year-over-year decline, the number of new life-licensed representatives in 2025 remained comparable to historical levels.

The number of life-licensed independent sales representatives remained relatively flat during 2025 compared to 2024 as agent licensing activity was consistent with agent non-renewals.

Term Life Insurance Product Sales and Face Amount In Force. The average number of life-licensed independent sales representatives and the number of term life insurance policies issued, as well as the average monthly rate of new policies issued per life-licensed independent sales representative, were as follows:

 

 

 

Year ended December 31,

 

 

 

 

2025

 

 

2024

 

 

2023

 

 

Average number of life-licensed independent sales representatives

 

 

152,117

 

 

 

145,975

 

 

 

137,760

 

 

Number of new policies issued

 

 

331,787

 

 

 

370,396

 

 

 

358,860

 

 

Average monthly rate of new policies issued per life-licensed
   independent sales representative

 

 

0.18

 

 

 

0.21

 

 

 

0.22

 

 

 

The average number of life-licensed independent sales representatives increased in 2025 compared to 2024 as a result of the cumulative impact of strong recruiting and licensing activity throughout 2024 that drove higher independent sales force counts at the beginning of and throughout 2025 compared to 2024.

New policies issued decreased in 2025 compared to 2024. Factors that may have contributed to the decline include economic uncertainty among middle income households and challenging comparisons to the outsized life policy sales production noted in the prior year.

Productivity in 2025 measured by the average monthly rate of new policies issued per life-licensed independent sales representative decreased from 2024. The combination of lower life insurance policy sales as discussed above and growth in the size of the independent sales force since the beginning of 2024 contributed to lower productivity.

46

 

The changes in the face amount of our in-force book of term life insurance policies were as follows:

 

 

 

Year ended December 31,

 

 

2025

 

 

% of beginning balance

 

 

2024

 

 

% of beginning balance

 

 

2023

 

 

% of beginning balance

 

 

 

(Dollars in millions)

Face amount in-force, beginning of period

 

$

953,583

 

 

 

 

 

$

944,609

 

 

 

 

 

$

916,808

 

 

 

 

 

Net change in face amount:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issued face amount

 

 

111,882

 

 

 

12

%

 

 

122,233

 

 

 

13

%

 

 

119,102

 

 

 

13

%

 

Terminations

 

 

(103,104

)

 

 

(11

)%

 

 

(103,872

)

 

 

(11

)%

 

 

(94,230

)

 

 

(10

)%

 

Foreign currency

 

 

5,251

 

 

*

 

 

 

(9,387

)

 

*

 

 

 

2,929

 

 

*

 

 

Net change in face amount

 

 

14,029

 

 

 

1

%

 

 

8,974

 

 

*

 

 

 

27,801

 

 

 

3

%

 

Face amount in-force, end of period

 

$

967,612

 

 

 

 

 

$

953,583

 

 

 

 

 

$

944,609

 

 

 

 

 

 

* Less than 1%.

The face amount of term life insurance policies in-force increased from 2024 to 2025 as the face amount issued continued to exceed the face amount terminated. Issued face amount decreased during 2025 compared to 2024 primarily due to the decrease in the number of new term life insurance policies issued as discussed above. Policy terminations remained relatively flat during 2025 compared to 2024. During 2025, the strengthening of the Canadian dollar relative to the U.S. dollar contributed to the increase in face amount.

Our average issued face amount per new policy was approximately $252,900 in 2025, down slightly compared to $255,200 in 2024.

Investment and Savings Product Sales, Asset Values and Accounts/Positions. Investment and savings product sales were as follows:

 

 

 

Year ended December 31,

 

 

2025 vs. 2024 change

 

 

2024 vs. 2023 change

 

 

 

2025

 

 

2024

 

 

2023

 

 

$

 

 

%

 

 

$

 

 

%

 

 

(Dollars in millions)

 

Product sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. retail mutual funds

 

$

5,183

 

 

$

4,795

 

 

$

3,898

 

 

$

388

 

 

 

8

%

 

$

897

 

 

 

23

%

Canada retail mutual funds - with up-front sales commissions

 

 

788

 

 

 

665

 

 

 

478

 

 

$

123

 

 

 

18

%

 

$

187

 

 

 

39

%

Annuities and other

 

 

5,080

 

 

 

3,968

 

 

 

2,818

 

 

 

1,112

 

 

 

28

%

 

 

1,150

 

 

 

41

%

Total sales-based revenue generating product sales

 

 

11,051

 

 

 

9,428

 

 

 

7,194

 

 

 

1,623

 

 

 

17

%

 

 

2,234

 

 

 

31

%

Managed investments

 

 

2,771

 

 

 

1,787

 

 

 

1,212

 

 

 

984

 

 

 

55

%

 

 

575

 

 

 

47

%

Canada retail mutual funds - no up-front sales commissions

 

 

1,021

 

 

 

798

 

 

 

691

 

 

 

223

 

 

 

28

%

 

 

107

 

 

 

15

%

Segregated funds

 

 

87

 

 

 

66

 

 

 

115

 

 

 

21

 

 

 

32

%

 

 

(49

)

 

 

(43

)%

Total product sales

 

$

14,930

 

 

$

12,079

 

 

$

9,212

 

 

$

2,851

 

 

 

24

%

 

$

2,867

 

 

 

31

%

 

 

The rollforward of asset values in client accounts was as follows:

 

 

 

Year ended December 31,

 

 

2025

 

 

% of beginning balance

 

2024

 

 

% of beginning balance

 

2023

 

 

% of beginning balance

 

 

(Dollars in millions)

Asset values, beginning of period

 

$

112,082

 

 

 

 

 

 

$

96,735

 

 

 

 

 

 

$

83,949

 

 

 

 

 

Net change in asset values:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Inflows

 

 

14,930

 

 

 

13

%

 

 

 

12,079

 

 

 

12

%

 

 

 

9,212

 

 

 

11

%

 

Redemptions (1)

 

 

(13,213

)

 

 

(12

)%

 

 

 

(11,005

)

 

 

(11

)%

 

 

 

(8,354

)

 

 

(10

)%

 

Net flows (1)

 

 

1,717

 

 

 

2

%

 

 

 

1,074

 

 

 

1

%

 

 

 

858

 

 

 

1

%

 

Change in fair value, net (1)

 

 

14,272

 

 

 

13

%

 

 

 

15,647

 

 

 

16

%

 

 

 

11,556

 

 

 

14

%

 

Foreign currency, net

 

 

821

 

 

*

 

 

 

 

(1,374

)

 

 

(1

)%

 

 

 

372

 

 

*

 

 

Net change in asset values

 

 

16,810

 

 

 

15

%

 

 

 

15,347

 

 

 

16

%

 

 

 

12,786

 

 

 

15

%

 

Asset values, end of period

 

$

128,892

 

 

 

 

 

 

$

112,082

 

 

 

 

 

 

$

96,735

 

 

 

 

 

 

(1)
The previously reported statistical information of redemptions, net flows and change in fair value, net for the years ended December 31, 2024 and December 31, 2023 have been restated to reflect a correction in our methodology for presenting redemptions and calculating the change in market value for Canadian mutual fund client assets. This restatement has no impact on our financial statements, results of operations, product sales, nor average and ending client asset values during the relevant periods. In addition, we have assessed the qualitative impact of this correction as immaterial, most notably due to the immaterial impact that higher projections of future client asset redemptions would have on future earnings estimates. Redemptions, net flows, and change in fair value, net were previously reported as $(10,207) million, $1,872 million, and $14,849 million, respectively, for the year ended December 31, 2024, and $(7,663) million, $1,549 million, and $10,865 million, respectively, for the year ended December 31, 2023.

47

 

* Less than 1%.

 

Average client asset values were as follows:

 

 

Year ended December 31,

 

 

2025 vs. 2024 change

 

 

2024 vs. 2023 change

 

 

 

2025

 

 

2024

 

 

2023

 

 

$

 

 

%

 

 

$

 

 

%

 

 

(Dollars in millions)

 

Average client asset values:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. retail mutual funds

 

$

56,918

 

 

$

51,731

 

 

$

43,673

 

 

$

5,187

 

 

 

10

%

 

$

8,058

 

 

 

18

%

Canada retail mutual funds

 

 

15,846

 

 

 

13,627

 

 

 

11,613

 

 

 

2,219

 

 

 

16

%

 

 

2,014

 

 

 

17

%

Annuities and other

 

 

31,419

 

 

 

28,218

 

 

 

24,229

 

 

 

3,201

 

 

 

11

%

 

 

3,989

 

 

 

16

%

Managed investments

 

 

13,133

 

 

 

9,852

 

 

 

7,663

 

 

 

3,281

 

 

 

33

%

 

 

2,189

 

 

 

29

%

Segregated funds

 

 

2,255

 

 

 

2,314

 

 

 

2,295

 

 

 

(59

)

 

 

(3

)%

 

 

19

 

 

*

 

Total average client asset values

 

$

119,571

 

 

$

105,742

 

 

$

89,473

 

 

$

13,829

 

 

 

13

%

 

$

16,269

 

 

 

18

%

 

* Less than 1%.

 

Average number of fee-generating positions was as follows:

 

 

Year ended December 31,

 

 

2025 vs. 2024 change

 

 

2024 vs. 2023 change

 

 

 

2025

 

 

2024

 

 

2023

 

 

Positions

 

 

%

 

 

Positions

 

 

%

 

 

(Positions in thousands)

 

Average number of fee-generating
   positions (1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recordkeeping and custodial

 

 

2,441

 

 

 

2,384

 

 

 

2,335

 

 

 

57

 

 

 

2

%

 

 

49

 

 

 

2

%

Recordkeeping only

 

 

898

 

 

 

861

 

 

 

836

 

 

 

37

 

 

 

4

%

 

 

25

 

 

 

3

%

Total average number of fee-
   generating positions

 

 

3,339

 

 

 

3,245

 

 

 

3,171

 

 

 

94

 

 

 

3

%

 

 

74

 

 

 

2

%

 

 

(1)
We receive transfer agent recordkeeping fees by mutual fund positions. An individual client account may include multiple mutual fund positions. We may also receive fees, which are earned on a per account basis, for custodial services that we provide to clients with retirement plan accounts that hold positions in these mutual funds.

Product sales. Investment and savings product sales increased in 2025 from 2024, primarily due to sustained positive investor sentiment that followed generally strong equity market performance in 2023 through 2025. In particular, variable annuity product sales continued to grow as the guarantees offered by these products became more appealing to investors given strong equity market performance, expanded product offerings, and elevated interest rates leading up to and continuing through 2025. In addition, the increase in product sales for managed investments resulted from continued strength in investor demand for these products as well as the expansion of investment strategies offered on our platform. These trends have been further aided by the growing population of investors that are reaching retirement age and seeking the protection provided by annuity products as well as the investment advisory services and broader products offered through our managed accounts program.

Rollforward of client asset values. Client asset values increased in 2025 from 2024 primarily due to strong equity market performance. Positive net flows and movement in the foreign exchange rate as the Canadian dollar strengthened relative to the U.S. dollar also contributed to the increase in client asset values during 2025.

Average client asset values. Average client asset values increased in 2025 compared to 2024 primarily driven by the cumulative effect of strong market performance and net client inflows.

Average number of fee-generating positions. The average number of fee-generating positions was higher in 2025 compared to 2024 primarily due to the continued cumulative effect of retail mutual fund sales in recent periods that led to an increase in the number of retail mutual fund positions serviced on our transfer agent recordkeeping platform.

 

Factors Affecting Our Results

Term Life Insurance Segment. The Term Life Insurance segment results are primarily driven by sales volumes, how closely actual experience matches our actuarial assumptions, terms and use of reinsurance, and expenses.

Sales and policies in-force. Sales of term life insurance policies and the size and characteristics of our in-force book of policies are vital to our results over the long term. Premium revenue is recognized as it is earned over the term of the policy. However, because we incur significant cash outflows at or about the time policies are issued, including the payment of sales commissions and underwriting costs, changes in life insurance sales volume in a period will have a more immediate impact on our cash flows than on revenue.

We have found that sales volume of term life insurance products between fiscal periods may vary based on the productivity of independent sales representatives. Accordingly, the volume of term life insurance products sales will fluctuate in the short term, but over the longer term, our sales volume generally correlates to the size of the independent sales force.

48

 

Actuarial assumptions. The actuarial assumptions that underlie our reserves are based upon our best estimates of mortality, persistency, disability, and interest rates. Our results will be affected to the extent there is a variance between our actuarial assumptions and actual experience. These variances will be reflected in our financial results by unlocking assumptions and cash flows underlying the liability for future policy benefits (“LFPB”) and ceded reserves that are part of the reinsurance recoverables. See Note 11 (Future Policy Benefits) to our consolidated financial statements included elsewhere in this report for more information on LFPB. The variances are also reflected in the projection of future face amount that is the basis for amortizing deferred policy acquisition costs (“DAC”).

•
Persistency. Persistency is a measure of how long our insurance policies stay in-force. As a general matter, persistency that is lower than our actuarial assumptions adversely affects our results over the long term because we lose the recurring revenue stream associated with the policies that lapse. In general, persistency differences have a minimal impact on our financial results from period to period since DAC is generally amortized on a straight-line basis and the unlocking of the LFPB adjusts both expected net premiums and expected future policy benefits and spreads any variances over the remaining contract period.
•
Mortality. Our profitability will fluctuate to the extent actual mortality rates differ from actuarial assumptions. We mitigate a significant portion of our mortality exposure through reinsurance. Long term mortality variances that result in an assumption change may have a significant impact on our financial results.
•
Disability. Our profitability will fluctuate to the extent actual disability rates underlying our waiver of premium benefits, including recovery rates for individuals currently disabled, differ from actuarial assumptions. The waiver of premium benefit is secondary to the death benefit coverage provided. However, the waiver of premium benefit is not reinsured on a yearly renewable term (“YRT”) basis and material changes in assumptions compared to expectations can have a disproportionate impact on our financial results.
•
Interest Rates. We use a locked-in assumption for future interest rates for reserves underlying our segment results. Policies issued prior to the January 1, 2021 transition date of the Company’s adoption of Accounting Standards Update No. 2018-12, Financial Services—Insurance (Topic 944) — Targeted Improvements to the Accounting for Long-Duration Contracts (the “Transition Date”) use an interest rate that reflects the portfolio’s current reinvestment rate while policies issued on or after the Transition Date use an upper-medium grade fixed income instrument yield during the period of issue.

Reinsurance. We use reinsurance extensively, which has a significant effect on our results of operations. We have generally reinsured between 80% and 90% of the mortality risk on term life insurance (excluding coverage under certain riders) on a quota share YRT basis. To the extent actual mortality experience is more or less favorable than the contractual rate, the reinsurer will earn incremental profits or bear the incremental cost, as applicable. In contrast to coinsurance, which is intended to eliminate all risks (other than counterparty risk of the reinsurer) and rewards associated with a specified percentage of the block of policies subject to the reinsurance arrangement, the YRT reinsurance arrangements we enter into are intended only to reduce volatility associated with variances between estimated and actual mortality rates.

In 2010, as part of our corporate reorganization and the initial public offering of our common stock, we entered into significant coinsurance transactions (the “IPO coinsurance transactions”) with entities then affiliated with Citigroup, Inc. (collectively, the “IPO coinsurers”) and ceded between 80% and 90% of the risks and rewards of term life insurance policies that were in-force at year-end 2009. We administer all such policies subject to these coinsurance agreements. Policies reaching the end of their initial level term period are no longer ceded under the IPO coinsurance transactions.

The effect of our reinsurance arrangements on ceded premiums and benefits and expenses on our consolidated statements of income follows:

•
Ceded premiums. Ceded premiums are the premiums we pay to reinsurers. These amounts are deducted from the direct premiums we earn to calculate our net premium revenues. Similar to direct premium revenues, ceded coinsurance premiums remain level over the initial term of the insurance policy. Ceded YRT premiums increase over the period that the policy has been in-force. Accordingly, ceded YRT premiums generally constitute an increasing percentage of direct premiums over the policy term.
•
Benefits and claims. Benefits and claims include incurred claim amounts and changes in future policy benefit reserves. Reinsurance reduces incurred claims in direct proportion to the percentage ceded, and reinsurance cash flows are reflected in the ceded reserves included in reinsurance recoverables. Changes in ceded reserves offset changes in future policy benefit reserves.
•
Insurance expenses. Insurance expenses are reduced by the allowances received from coinsurance. There is no impact on insurance expenses associated with our YRT contracts.

We may alter our reinsurance practices at any time due to the unavailability of YRT reinsurance at attractive rates or the availability of alternatives to reduce our risk exposure. We intend to continue ceding approximately 90% of our mortality risk on new business.

Expenses. Results are also affected by variances in client acquisition, maintenance and administration expense levels.

49

 

Investment and Savings Products Segment. The Investment and Savings Products segment results are primarily driven by sales, the value of assets in client accounts for which we earn ongoing management, marketing and support, and distribution fees, and the number of transfer agent recordkeeping positions and non-bank custodial fee-generating accounts we administer.

Sales. We earn commissions and fees, such as dealer re-allowances and marketing and distribution fees, based on sales of mutual fund products and annuities in the United States and sales of certain mutual fund products in Canada. Sales of investment and savings products are influenced by the overall demand for investment and savings products in the United States and Canada, as well as by the size and productivity of the independent sales force. We generally experience seasonality in the Investment and Savings Products segment results due to our high concentration of sales of retirement account products. These accounts are typically funded in February through April, coincident with our clients’ tax return preparation season. While we believe the size of the independent sales force is a factor in driving sales volume in this segment, there are a number of other variables, such as economic and market conditions, which may have a significantly greater effect on sales volume in any given fiscal period.

Asset values in client accounts. We earn marketing and distribution fees (trail commissions or, with respect to U.S. mutual funds, 12b-1 fees) on mutual fund and annuity assets in the United States and Canada. In the United States, we also earn investment advisory and administrative fees and marketing support fees on assets in managed investments. In Canada, we earn marketing, distribution, and shareholder services fees on mutual fund assets for which we serve as the principal distributor and management fees on our legacy segregated funds. Asset values are influenced by new product sales, ongoing contributions to existing accounts, redemptions and the change in market values in existing accounts. While we offer a wide variety of asset classes and investment styles, our clients’ accounts are primarily invested in equity funds. Volatility in equity markets will impact the value of assets in client accounts and, as a result, the revenue we earn on those assets.

Positions. We earn transfer agent recordkeeping fees for administrative functions we perform on behalf of several of our mutual fund providers. An individual client account may include multiple fund positions for which we earn transfer agent recordkeeping fees. We may also receive fees earned for non-bank custodial services that we provide to clients with retirement plan accounts.

Sales mix. Our results in a given fiscal period will be affected by changes in the overall mix of products within these categories. Examples of changes in the sales mix that influence our results include the following:

•
sales of annuity products in the United States will generate higher revenues in the period when such sales occur compared to sales of other investment products that either generate lower up-front revenues or, in the case of managed investments, no up-front revenues;
•
sales of a higher proportion of managed investments and Canadian mutual funds will spread the revenues generated over time because we earn higher revenues based on assets under management for these accounts each period as opposed to earning up-front revenues based on product sales; and
•
sales of a higher proportion of mutual fund products sold in the United States will impact the timing and amount of revenue we earn given the distinct transfer agent recordkeeping and non-bank custodial services we provide for certain mutual fund products we distribute.

 

Corporate and Other Distributed Products Segment. We earn revenues and pay commissions and referral fees within the Corporate and Other Distributed Products segment for mortgage loan originations, prepaid legal services, auto and homeowners’ insurance referrals, and other financial products, all of which are originated by third parties. The Corporate and Other Distributed Products segment also includes in-force policies from several discontinued lines of insurance underwritten by National Benefit Life Insurance Company (“NBLIC”).

The Corporate and Other Distributed Products segment includes net investment income recognized by the Company. Net investment income is impacted by the size and performance of our invested asset portfolio, which can be influenced by interest rates, credit spreads, and the mix of invested assets. Net investment income also is influenced by short-term interest rates and the amount of cash and cash equivalents on hand.

The Corporate and Other Distributed Products segment also includes corporate income and expenses not allocated to our other segments, general and administrative expenses (other than expenses that are allocated to the Term Life Insurance and Investment and Savings Products segments), interest expense on notes payable, a redundant reserve financing transaction and our revolving credit facility (“Revolving Credit Facility”), as well as recognized gains and losses on our invested asset portfolio.

Capital Structure. Our financial results are affected by our capital structure, which includes our senior unsecured notes (the “Senior Notes”), a redundant reserve financing transaction, our Revolving Credit Facility, and our common stock. See Note 12 (Debt), Note 14 (Stockholders’ Equity) and Note 18 (Commitments and Contingent Liabilities) to our consolidated financial statements included elsewhere in this report for more information on changes in our capital structure.

Foreign Currency. The Canadian dollar is the functional currency for our Canadian subsidiaries, and our consolidated financial results, reported in U.S. dollars, are affected by changes in the currency exchange rate. As such, the translated amount of revenues, expenses, assets and liabilities attributable to our Canadian subsidiaries will be higher or lower in periods where the Canadian dollar appreciates or weakens relative to the U.S. dollar, respectively.

50

 

The year-end exchange rates (U.S. dollar per Canadian dollar) used by the Company to translate our Canadian dollar functional currency assets and liabilities into U.S. dollars increased by 5% in 2025 from 2024. However, the average exchange rates used by the Company in 2025 to translate our Canadian dollar functional currency revenues and expenses into U.S. dollars decreased modestly, by 2% compared to 2024.

See the Results of Operations section, the Financial Condition section, and “Quantitative and Qualitative Disclosures About Market Risk – Canadian Currency Risk” and Note 4 (Segment and Geographical Information) to our consolidated financial statements included elsewhere in this report for more information on our Canadian subsidiaries and the impact of foreign currency on our financial results.

Income Taxes. The profitability of the Company and its subsidiaries is affected by income taxes assessed by federal, state, and U.S. territorial jurisdictions in the U.S. and federal and provincial jurisdictions in Canada. Changes in tax legislation may impact the measurement of our deferred tax assets and liabilities and the amount of income tax expense we incur.

Critical Accounting Estimates

We prepare our financial statements in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). These principles are established primarily by the Financial Accounting Standards Board. The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions based on currently available information when recording transactions resulting from business operations. Our significant accounting policies are described in Note 1 (Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies) to our consolidated financial statements included elsewhere in this report. The most significant items in our consolidated balance sheets are based on fair value determinations, accounting estimates and actuarial determinations, which are susceptible to changes in future periods and could affect our results of operations and financial position.

The estimates that we deem to be most critical to an understanding of our results of operations and financial position are those related to DAC, future policy benefit reserves and corresponding amounts recoverable from reinsurers, income taxes, and the valuation of investments. The preparation and evaluation of these critical accounting estimates involve the use of various assumptions developed from management’s analyses and judgments. Subsequent experience or use of other assumptions could produce significantly different results.

Deferred Policy Acquisition Costs. We defer incremental direct costs of successful contract acquisitions that result directly from and are essential to the contract transaction(s) and that would not have been incurred had the contract transaction(s) not occurred. These costs include commissions and policy issue expenses. Deferrable Term Life Insurance policy acquisition costs are amortized on a constant-level basis over the expected term of the contracts using face amount as the unit of measure. Interest is not accrued on unamortized DAC balances, and DAC is not subject to impairment testing. Contracts are grouped by cohorts consistent with the grouping used in estimating the LFPB. The cohorts are defined by the legal entity that issued the policy and the year the policy was issued.

Assumptions of face amounts used to amortize DAC for term life insurance policies, including persistency and mortality, are consistent with the assumptions used in estimating the LFPB. Changes in persistency would have the most notable impact on DAC amortization; however, the differences primarily affect DAC amortization on a go-forward basis. If annual lapse rate assumptions at each policy duration were 5% higher during 2025, we would have recognized approximately $10 million of additional amortization of DAC expense for 2025, before the impact of tax, and the rate of DAC amortization would increase in future years. Conversely, if annual lapse rate assumptions were 5% lower during 2025, we would have recognized approximately $10 million of lower DAC amortization for 2025, before the impact of tax, and the rate of DAC amortization would decrease in future years. We believe that a plus or minus 5% annual lapse rate change is a reasonably possible variation. Changes in persistency assumptions also impact the balance of future policy benefit reserves and reinsurance recoverables as discussed below.

For additional information on DAC, see Note 1 (Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies) and Note 8 (Deferred Policy Acquisition Costs) to our consolidated financial statements included elsewhere in this report.

Future Policy Benefit Reserves and Reinsurance. Liabilities for future policy benefits on our term life insurance products are reserves established for death claims, waiver of premium benefits, and claim settlement expenses. The LFPB is calculated as the present value of expected future benefits less the present value of expected future net premiums receivable under the contracts. Net premiums are defined as the portion of policyholder gross premiums that are needed to pay for all benefits.

The assumptions underlying the LFPB include mortality, persistency, discount rates, disability rates, and other assumptions that reflect our best estimate based on our historical experience and modified, as necessary, to reflect non-recurring and/or anticipated trends.

The LFPB is estimated by grouping insurance policies into cohorts. Policy cohorts for the Term Life Insurance segment are based on the legal entity that issued the policy and the year the policy was issued.

The cash flows and assumptions underlying the LFPB are unlocked each quarter to reflect differences between actual and expected experience. In general, assumption changes, such as mortality, lapse and disability, to the extent necessary, are expected to only occur during the third quarter when we update our experience studies. However, they may occur at any time based on emerging experience.

51

 

The impact of unlocking assumptions, such as mortality, lapse and disability, will be partly reflected in the current period and partly spread to future periods based on the remaining duration of the impacted cohort(s). The catch-up is retroactive back to the later of the Transition Date or issue date, after reinsurance recoverables and is recognized as a remeasurement gain or loss in the consolidated statements of income.

The ceded policy reserve balances included in reinsurance recoverables are calculated in the same manner as the LFPB by cohort and apply best estimate assumptions and quarterly unlocking.

The Company uses discount rates applied by country to align with local currency cash flows. Discount rates consist of yield curves that are developed using Bloomberg’s Evaluated Pricing Product based on senior unsecured fixed rate bonds ratings of A+, A, or A-. The discount rate assumption is updated quarterly, and the impact of remeasuring the net LFPB, after reinsurance recoverables from changes in the locked-in discount rate assumption is reflected in other comprehensive income (loss) in the consolidated statements of comprehensive income (loss).

The LFPB is necessarily based on estimates, assumptions and our analysis of historical experience. Factors that could cause prospective assumptions to be different from historical experience include but are not limited to changes to our term life insurance product series, economic and societal trends, new pharmaceutical drugs, and the impact of regulatory changes. The assumptions and estimates underlying the LFPB require significant judgment, and therefore, are inherently uncertain. The following table provides illustrated net impact of changes in assumptions affecting both the LFPB and reinsurance recoverables that we believe are reasonably possible, before the impact of tax:

 

Assumption

 

Sensitivity assumption change

 

Estimated impact at December 31, 2025

Lapse

 

5% decrease / 5% increase

 

($51 million) / $51 million (1)

Mortality

 

5% increase / 5% decrease

 

($52 million) / $52 million (1)

Disability

 

5% increase / 5% decrease

 

($20 million) / $20 million (1)

Discount rate

 

100 bps decrease / 100 bps increase

 

($695 million) / $554 million (2)

 

(1) Changes in lapse, mortality and disability affect future policy benefits remeasurement (gain) loss on the consolidated statements of income. Estimated impacts show the (decrease) / increase in income before income taxes. The assumption change sensitivities shown are based on a consistent percentage change across all policy durations.

(2) Changes in discount rate affect the effect of change in discount rate assumptions on the liability for future policy benefits on the consolidated statements of comprehensive income (loss). Estimated impacts show the (decrease) / increase in accumulated other comprehensive income (loss) before income taxes. The assumption change is based on a parallel shift in the discount rate curve.

 

As discussed above, changes in lapse, mortality, and disability assumptions would also affect the net premium ratio used to recognize benefits expenses in future periods.

 

For additional information on future policy benefits, reinsurance and the impact to accumulated other comprehensive income (loss) see Note 1 (Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies), Note 7 (Reinsurance), and Note 11 (Future Policy Benefits) to our consolidated financial statements included elsewhere in this report.

Income Taxes. We account for income taxes using the asset and liability method. We recognize deferred tax assets and liabilities for the future tax consequences attributable to (i) temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and (ii) operating loss and tax credit carryforwards. Deferred tax assets are recognized subject to management’s judgment that realization is more likely than not applicable to the periods in which we expect the temporary difference will reverse. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

In light of the multiple tax jurisdictions in which we operate, our tax returns are subject to routine audit by the Internal Revenue Service and other taxation authorities. These audits at times may produce alternative views regarding particular tax positions taken in the year(s) of review. As a result, the Company records uncertain tax positions, which require recognition at the time when it is deemed more likely than not that the position in question will be upheld. Although management believes that the judgment and estimates involved are reasonable and that the necessary provisions have been recorded, changes in circumstances or unexpected events could adversely affect our financial position, results of operations, and cash flows.

For additional information on income taxes, see Note 1 (Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies) and Note 13 (Income Taxes) to our consolidated financial statements included elsewhere in this report.

Invested Assets. We hold primarily fixed-maturity securities, including bonds and redeemable preferred stocks. We have classified these invested assets as available-for-sale, except for the securities of our U.S. broker-dealer subsidiaries, which we have classified as trading securities. We also hold a credit-enhanced note, which we classified as a held-to-maturity security that was issued in exchange for a surplus note (the “Surplus Note”) with an equal principal amount as part of a redundant reserve financing transaction. All of these securities are carried at fair value, except for the held-to-maturity security, which is carried at amortized cost. Unrealized gains and losses on available-for-sale securities are included as a separate component of other comprehensive income (loss) in our consolidated statements of comprehensive income (loss).

52

 

We also hold equity securities, including common and non-redeemable preferred stock. These equity securities are measured at fair value, and changes in unrealized gains and losses are recognized in net income. Changes in fair value of trading securities are included in net income in our consolidated statements of income in the period in which the change occurred.

Fair value. Fair value is the price that would be received upon the sale of an asset in an orderly transaction between market participants at the measurement date. Fair value measurements are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our view of market assumptions in the absence of observable market information. We classify and disclose all invested assets carried at fair value in one of the three fair value measurement hierarchy categories prescribed by U.S. GAAP.

As of each reporting period, we classify all invested assets in their entirety based on the lowest level of input that is significant to the fair value measurement. Significant levels of estimation and judgment are required to determine the fair value of certain of our investments. The factors influencing these estimations and judgments are subject to change in subsequent reporting periods.

Credit losses for available-for-sale fixed-maturity securities. For available-for-sale securities in an unrealized loss position that we intend to sell or would more likely than not be required to sell before the expected recovery of the amortized cost basis, we recognize the impairment as a credit loss in our consolidated statements of income by writing down the amortized cost basis to the fair value. For available-for-sale securities in an unrealized loss position that we do not intend to sell or it is not more likely than not that we will be required to sell before the expected recovery of the amortized cost basis, we recognize the portion of the impairment that is due to a credit loss in our consolidated statements of income through an allowance for credit losses. We reverse credit losses previously recognized in the allowance for credit losses in situations where the estimate of credit losses on those securities has declined. We do not consider the length of time an available-for-sale security has been in an unrealized loss position when estimating credit losses.

Analyses that we perform to determine whether an impairment is due to a credit loss or other factors involve the use of estimates, assumptions, and subjectivity. We evaluate a number of quantitative and qualitative factors when determining the credit loss on individual securities, including issuer-specific risks as well as relevant macroeconomic risks. If these factors or future events change, we could experience material credit losses recognized in our consolidated statements of income for available-for-sale securities in future periods, which could adversely affect our financial condition, results of operations and the size and quality of our invested assets portfolio.

For additional information on our invested assets, see Note 1 (Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies), Note 5 (Investments) and Note 6 (Fair Value of Financial Instruments) to our consolidated financial statements included elsewhere in this report.

 

Results of Operations

Revenues. Our revenues consist of the following:

•
Net premiums. Reflects direct premiums payable by our policyholders on our in-force insurance policies, primarily term life insurance, net of reinsurance premiums that we pay to reinsurers.
•
Commissions and fees. Consists primarily of dealer re-allowances earned on the sales of investment and savings products, trail commissions and management fees based on the asset values of client accounts, marketing and distribution fees from product originators, fees for non-bank custodial services rendered in our capacity as nominee on client retirement accounts funded by mutual funds on our servicing platform, transfer agent recordkeeping fees for mutual funds on our servicing platform, and fees associated with the sale of other distributed products.
•
Net investment income. Represents income, net of investment-related expenses, generated on cash, cash equivalents, and our invested asset portfolio, which consists primarily of interest income earned on fixed-maturity investments. Investment income recorded on our held-to-maturity invested asset and the offsetting interest expense recorded for our Surplus Note are included in net investment income.
•
Investment gains (losses). Primarily reflects the difference between amortized cost and amounts realized on the sale of available-for-sale securities, credit losses recognized on available-for-sale securities and changes in the fair value of equity securities.
•
Other, net. Reflects revenues generated from the fees charged for access to Primerica Online (“POL”), our primary independent sales force support tool, as well as revenues from the sale of other miscellaneous items.

Benefits and Expenses. Our operating expenses consist of the following:

•
Benefits and claims. Reflects the benefits and claims payable on insurance policies, changes in our reserves for future policy claims and reserves for other benefits payable, net of reinsurance.
•
Future policy benefits remeasurement (gain) loss. Represents the impact on the starting LFPB, net of reinsurance recoverables, from unlocking current period cash flows and assumptions. It reflects the catch-up on the net liability that is retroactive back to the later of the Transition Date or issue date up to the current reporting date.
•
Amortization of DAC. Represents the amortization of capitalized costs directly associated with the sale of an insurance policy or segregated fund, including sales commissions, medical examination and other underwriting costs, and other eligible policy issuance costs.

53

 

•
Sales commissions. Represents commissions to the independent sales representatives in connection with the sale of investment and savings products, and products other than insurance products.
•
Insurance expenses. Reflects non-capitalized insurance expenses, including employee compensation, technology and communication costs, insurance independent sales force-related costs, printing, postage and distribution of insurance sales materials, outsourcing and professional fees, premium taxes, and other corporate and administrative fees and expenses related to our insurance operations. Insurance expenses also include both indirect policy issuance costs and costs associated with unsuccessful efforts to acquire new policies.
•
Insurance commissions. Reflects sales commissions with respect to insurance products that are not eligible for deferral.
•
Interest expense. Reflects interest on our note payable, any interest and the commitment fee on our Revolving Credit Facility, fees paid for the credit enhancement feature on our held-to-maturity invested asset, and a finance charge incurred pursuant to one of our coinsurance agreements with an IPO coinsurer.
•
Other operating expenses. Consists primarily of employee compensation, technology and communication costs, various independent sales force-related costs, non-bank custodial and transfer agent recordkeeping administrative costs, outsourcing and professional fees, and other corporate and administrative fees and expenses.

Insurance expenses and other operating expenses directly attributable to the Term Life Insurance and Investment and Savings Products segments are recorded directly to the applicable segment. We allocate certain other revenue and operating expenses that are not directly attributable to a specific operating segment using methods expected to reasonably measure the benefit received by each reporting segment. Such methods include recorded usage, revenue distribution, and independent sales force representative distribution. These allocated items include fees charged for access to POL and costs incurred for technology, independent sales force support, occupancy and other general and administrative costs. Costs that are not directly charged or allocated to our two primary operating segments are included in the Corporate and Other Distributed Products segment.

54

 

Primerica, Inc. and Subsidiaries Results. Our results of operations for the years ended December 31, 2025, 2024, and 2023 were as follows:

 

 

 

 

 

 

 

 

 

 

 

2025 vs. 2024

 

 

2024 vs. 2023

 

 

 

Year ended December 31,

 

 

change

 

 

change

 

 

 

2025

 

 

2024

 

 

2023

 

 

$

 

 

%

 

 

$

 

 

%

 

 

 

(Dollars in thousands)

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct premiums

 

$

3,462,780

 

 

$

3,393,604

 

 

$

3,312,125

 

 

$

69,176

 

 

 

2

%

 

$

81,479

 

 

 

2

%

Ceded premiums

 

 

(1,678,877

)

 

 

(1,664,433

)

 

 

(1,651,811

)

 

 

14,444

 

 

*

 

 

 

12,622

 

 

*

 

Net premiums

 

 

1,783,903

 

 

 

1,729,171

 

 

 

1,660,314

 

 

 

54,732

 

 

 

3

%

 

 

68,857

 

 

 

4

%

Commissions and fees

 

 

1,275,864

 

 

 

1,082,889

 

 

 

892,853

 

 

 

192,975

 

 

 

18

%

 

 

190,036

 

 

 

21

%

Investment income net of investment expenses

 

 

225,195

 

 

 

218,153

 

 

 

201,311

 

 

 

7,042

 

 

 

3

%

 

 

16,842

 

 

 

8

%

Interest expense on surplus note

 

 

(58,043

)

 

 

(62,652

)

 

 

(65,474

)

 

 

(4,609

)

 

 

(7

)%

 

 

(2,822

)

 

 

(4

)%

Net investment income

 

 

167,152

 

 

 

155,501

 

 

 

135,837

 

 

 

11,651

 

 

 

7

%

 

 

19,664

 

 

 

14

%

Realized investment gains (losses)

 

 

(2,037

)

 

 

1,015

 

 

 

(645

)

 

 

(3,052

)

 

*

 

 

 

1,660

 

 

*

 

Other investment gains (losses)

 

 

1,221

 

 

 

1,221

 

 

 

(5,251

)

 

 

-

 

 

*

 

 

 

6,472

 

 

*

 

Investment gains (losses)

 

 

(816

)

 

 

2,236

 

 

 

(5,896

)

 

 

(3,052

)

 

*

 

 

 

8,132

 

 

*

 

Other, net

 

 

65,610

 

 

 

119,346

 

 

 

65,399

 

 

 

(53,736

)

 

*

 

 

 

53,947

 

 

*

 

Total revenues

 

 

3,291,713

 

 

 

3,089,143

 

 

 

2,748,507

 

 

 

202,570

 

 

 

7

%

 

 

340,636

 

 

 

12

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Benefits and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Benefits and claims

 

 

665,927

 

 

 

648,163

 

 

 

642,979

 

 

 

17,764

 

 

 

3

%

 

 

5,184

 

 

*

 

Future policy benefits remeasurement (gain) loss

 

 

(37,389

)

 

 

(25,920

)

 

 

(384

)

 

 

(11,469

)

 

*

 

 

 

(25,536

)

 

*

 

Amortization of DAC

 

 

322,903

 

 

 

298,136

 

 

 

275,816

 

 

 

24,767

 

 

 

8

%

 

 

22,320

 

 

 

8

%

Sales commissions

 

 

686,920

 

 

 

573,249

 

 

 

457,444

 

 

 

113,671

 

 

 

20

%

 

 

115,805

 

 

 

25

%

Insurance expenses

 

 

263,467

 

 

 

255,619

 

 

 

235,460

 

 

 

7,848

 

 

 

3

%

 

 

20,159

 

 

 

9

%

Insurance commissions

 

 

22,995

 

 

 

32,008

 

 

 

34,222

 

 

 

(9,013

)

 

 

(28

)%

 

 

(2,214

)

 

 

(6

)%

Interest expense

 

 

23,958

 

 

 

25,034

 

 

 

26,594

 

 

 

(1,076

)

 

 

(4

)%

 

 

(1,560

)

 

 

(6

)%

Other operating expenses

 

 

368,368

 

 

 

343,607

 

 

 

304,638

 

 

 

24,761

 

 

 

7

%

 

 

38,969

 

 

 

13

%

Total benefits and expenses

 

 

2,317,149

 

 

 

2,149,896

 

 

 

1,976,769

 

 

 

167,253

 

 

 

8

%

 

 

173,127

 

 

 

9

%

Income from continuing operations before income taxes

 

 

974,564

 

 

 

939,247

 

 

 

771,738

 

 

 

35,317

 

 

 

4

%

 

 

167,509

 

 

 

22

%

Income taxes from continuing operations

 

 

223,330

 

 

 

219,118

 

 

 

180,556

 

 

 

4,212

 

 

 

2

%

 

 

38,562

 

 

 

21

%

             Income from continuing operations

 

 

751,234

 

 

 

720,129

 

 

 

591,182

 

 

 

31,105

 

 

 

4

%

 

 

128,947

 

 

 

22

%

Loss from discontinued operations, net of income taxes

 

 

-

 

 

 

(249,611

)

 

 

(14,581

)

 

 

(249,611

)

 

*

 

 

 

235,030

 

 

*

 

   Net income

 

$

751,234

 

 

$

470,518

 

 

$

576,601

 

 

$

280,716

 

 

 

60

%

 

$

(106,083

)

 

 

(18

)%

 

* Less than 1% or not meaningful

Total revenues. Total revenues increased in 2025 from 2024 primarily due to increases in commissions and fees earned in our Investment and Savings Products segment, net premiums in our Term Life Insurance segment, and net investment income in our Corporate and Other Distributed Products segment. This increase was partially offset by a one-time $50.0 million gain recognized within Other, net revenue in 2024 related to payments received under a Representation and Warranty insurance policy in our Corporate and Other Distributed Products segment. These movements are further discussed in detail in the Segment Results sections below.

Total benefits and expenses. Total benefits and expenses increased in 2025 from 2024 largely due to higher sales commissions in our Investment and Savings Products segment. Also contributing to the year-over-year increase were higher amortization of DAC and benefits and claims in our Term Life Insurance segment. Insurance and other operating expenses increased in 2025 compared to 2024 primarily due to higher employee-related costs, growth-related costs and technology investments. Further discussion related to benefits and expenses movements are discussed in detail in the Segment Results section below.

Income taxes. Our effective income tax rate was 22.9% in 2025 compared to our effective income tax rate from continuing operations of 23.3% in 2024. The decrease in the effective tax rate in 2025 was primarily driven by the deduction of purchased transferable federal income tax credits in 2025. Refer to Note 13 (Income Taxes) to our consolidated financial statements included elsewhere in this report for further details.

Loss from discontinued operations, net of income taxes. Loss from discontinued operations, net of income taxes relates to the Senior Health business, which was disposed of as of September 30, 2024 and is reported in discontinued operations for 2024 and 2023. Refer to Note 2 (Discontinued Operations) to our consolidated financial statements included elsewhere in this report for further details.

55

 

For additional information, see the discussions of results of operations by segment below.

Term Life Insurance Segment. Our results for the Term Life Insurance segment for the years ended December 31, 2025, 2024, and 2023 were as follows:

 

 

 

 

 

 

 

 

 

 

 

2025 vs. 2024

 

 

2024 vs. 2023

 

 

 

Year ended December 31,

 

 

change

 

 

change

 

 

 

2025

 

 

2024

 

 

2023

 

 

$

 

 

%

 

 

$

 

 

%

 

 

 

(Dollars in thousands)

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct premiums

 

$

3,445,535

 

 

$

3,375,282

 

 

$

3,292,760

 

 

$

70,253

 

 

 

2

%

 

$

82,522

 

 

 

3

%

Ceded premiums

 

 

(1,673,848

)

 

 

(1,659,348

)

 

 

(1,648,004

)

 

 

14,500

 

 

*

 

 

 

11,344

 

 

*

 

Net premiums

 

 

1,771,687

 

 

 

1,715,934

 

 

 

1,644,756

 

 

 

55,753

 

 

 

3

%

 

 

71,178

 

 

 

4

%

Other, net

 

 

48,122

 

 

 

52,306

 

 

 

48,286

 

 

 

(4,184

)

 

 

(8

)%

 

 

4,020

 

 

 

8

%

Total revenues

 

 

1,819,809

 

 

 

1,768,240

 

 

 

1,693,042

 

 

 

51,569

 

 

 

3

%

 

 

75,198

 

 

 

4

%

Benefits and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Benefits and claims

 

 

651,544

 

 

 

635,354

 

 

 

622,084

 

 

 

16,190

 

 

 

3

%

 

 

13,270

 

 

 

2

%

Future policy benefits remeasurement (gain) loss

 

 

(37,726

)

 

 

(31,265

)

 

 

(213

)

 

 

(6,461

)

 

*

 

 

 

(31,052

)

 

*

 

Amortization of DAC

 

 

316,411

 

 

 

291,488

 

 

 

268,803

 

 

 

24,923

 

 

 

9

%

 

 

22,685

 

 

 

8

%

Insurance expenses

 

 

258,885

 

 

 

250,957

 

 

 

230,390

 

 

 

7,928

 

 

 

3

%

 

 

20,567

 

 

 

9

%

Insurance commissions

 

 

9,635

 

 

 

17,664

 

 

 

19,814

 

 

 

(8,029

)

 

 

(45

)%

 

 

(2,150

)

 

 

(11

)%

Total benefits and expenses

 

 

1,198,749

 

 

 

1,164,198

 

 

 

1,140,878

 

 

 

34,551

 

 

 

3

%

 

 

23,320

 

 

 

2

%

Income before income taxes

 

$

621,060

 

 

$

604,042

 

 

$

552,164

 

 

$

17,018

 

 

 

3

%

 

$

51,878

 

 

 

9

%

 

 

* Less than 1% or not meaningful

Net premiums. Direct premiums increased in 2025 from 2024 largely due to the layering effect of new policy sales that contributed to growth in the in-force book of business. This increase was partially offset by an increase in ceded premiums, which includes $27.6 million in higher non-level YRT reinsurance ceded premiums as business not subject to the IPO coinsurance transactions ages, reduced by $13.1 million in lower coinsurance ceded premiums due to the run-off of business subject to the IPO coinsurance transactions.

Benefits and claims. Benefits and claims increased during 2025 compared to 2024. Direct benefits and claims increased with the growth of the business.

Future policy benefits remeasurement (gain) loss. Future policy benefits remeasurement gain increased during 2025 compared to 2024 and represents the impact of long-term assumption changes made during the third quarters of 2025 and 2024 in connection with the annual assumption reviews as well as differences in experience variances that occurred in each year. The remeasurement gain recognized in 2025 is due to realized experience variances and an assumption change largely related to a reduction of expected mortality benefits while the remeasurement gain recognized in 2024 was primarily related to a reduction of the expected cost of waiver of premium benefits. Refer to Note 11 (Future Policy Benefits) to our consolidated financial statements included elsewhere in this report for further details.

Amortization of DAC. Amortization of DAC increased in 2025 from 2024 primarily due to continued growth in the in-force book of business.

Insurance expenses. Insurance expenses increased during 2025 compared to 2024 largely due to higher costs resulting from growth-related expenses in the business.

Insurance commissions. Insurance commissions decreased in 2025 from 2024 as a result of lower non-deferrable commissions impacted by lower policy sales activity as well as a small change in the dollar value of commissions deferred that was made beginning in the second quarter of 2024.

56

 

Investment and Savings Products Segment. Our results of operations for the Investment and Savings Products segment for the years ended December 31, 2025, 2024, and 2023 were as follows:

 

 

 

 

 

 

 

 

 

 

 

2025 vs. 2024

 

 

2024 vs. 2023

 

 

 

Year ended December 31,

 

 

change

 

 

change

 

 

 

2025

 

 

2024

 

 

2023

 

 

$

 

 

%

 

 

$

 

 

%

 

 

 

(Dollars in thousands)

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commissions and fees:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales-based revenues

 

$

477,146

 

 

$

394,432

 

 

$

296,617

 

 

$

82,714

 

 

 

21

%

 

$

97,815

 

 

 

33

%

Asset-based revenues

 

 

660,443

 

 

 

553,555

 

 

 

462,955

 

 

 

106,888

 

 

 

19

%

 

 

90,600

 

 

 

20

%

Account-based revenues

 

 

97,355

 

 

 

95,272

 

 

 

93,189

 

 

 

2,083

 

 

 

2

%

 

 

2,083

 

 

 

2

%

Other, net

 

 

13,288

 

 

 

13,483

 

 

 

12,504

 

 

 

(195

)

 

 

(1

)%

 

 

979

 

 

 

8

%

Total revenues

 

 

1,248,232

 

 

 

1,056,742

 

 

 

865,265

 

 

 

191,490

 

 

 

18

%

 

 

191,477

 

 

 

22

%

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of DAC

 

 

5,381

 

 

 

5,443

 

 

 

5,479

 

 

 

(62

)

 

 

(1

)%

 

 

(36

)

 

*

 

Insurance commissions

 

 

13,755

 

 

 

13,638

 

 

 

13,148

 

 

 

117

 

 

*

 

 

 

490

 

 

 

4

%

Sales commissions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales-based

 

 

332,630

 

 

 

275,582

 

 

 

212,482

 

 

 

57,048

 

 

 

21

%

 

 

63,100

 

 

 

30

%

Asset-based

 

 

334,840

 

 

 

278,042

 

 

 

226,542

 

 

 

56,798

 

 

 

20

%

 

 

51,500

 

 

 

23

%

Other operating expenses

 

 

206,103

 

 

 

181,792

 

 

 

164,788

 

 

 

24,311

 

 

 

13

%

 

 

17,004

 

 

 

10

%

Total expenses

 

 

892,709

 

 

 

754,497

 

 

 

622,439

 

 

 

138,212

 

 

 

18

%

 

 

132,058

 

 

 

21

%

Income before income taxes

 

$

355,523

 

 

$

302,245

 

 

$

242,826

 

 

$

53,278

 

 

 

18

%

 

$

59,419

 

 

 

24

%

 

 

* Less than 1% or not meaningful

Commissions and fees. Commissions and fees increased during 2025 compared to 2024 primarily driven by higher asset-based and sales-based revenues. Higher asset-based revenues were driven by an increase in average client assets in 2025 compared to 2024 as well as a higher mix of assets under management that earn higher asset-based commissions, namely managed investments and Canadian mutual funds sold under the principal distributor model. The increase in sales-based revenue was largely the result of continued growth in product sales for variable annuities. and U.S. retail mutual funds.

Sales commissions. The increases in sales-based and asset-based commissions in 2025 from 2024 were generally in line with the increases in sales-based revenues and asset-based revenues, respectively.

Other operating expenses. Other operating expenses increased in 2025 from 2024 largely due to higher variable growth-related costs, continued investments in technology and infrastructure and higher employee compensation.

57

 

Corporate and Other Distributed Products Segment. Our results of operations for the Corporate and Other Distributed Products segment for the years ended December 31, 2025, 2024, and 2023 were as follows:

 

 

 

 

 

 

 

 

 

 

 

2025 vs. 2024

 

 

2024 vs. 2023

 

 

 

Year ended December 31,

 

 

change

 

 

change

 

 

 

2025

 

 

2024

 

 

2023

 

 

$

 

 

%

 

 

$

 

 

%

 

 

 

(Dollars in thousands)

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct premiums

 

$

17,245

 

 

$

18,322

 

 

$

19,365

 

 

$

(1,077

)

 

 

(6

)%

 

$

(1,043

)

 

 

(5

)%

Ceded premiums

 

 

(5,029

)

 

 

(5,085

)

 

 

(3,807

)

 

 

(56

)

 

 

(1

)%

 

 

1,278

 

 

 

34

%

Net premiums

 

 

12,216

 

 

 

13,237

 

 

 

15,558

 

 

 

(1,021

)

 

 

(8

)%

 

 

(2,321

)

 

 

(15

)%

Commissions and fees

 

 

40,920

 

 

 

39,630

 

 

 

40,092

 

 

 

1,290

 

 

 

3

%

 

 

(462

)

 

 

(1

)%

Investment income net of investment expenses

 

 

225,195

 

 

 

218,153

 

 

 

201,311

 

 

 

7,042

 

 

 

3

%

 

 

16,842

 

 

 

8

%

Interest expense on surplus note

 

 

(58,043

)

 

 

(62,652

)

 

 

(65,474

)

 

 

(4,609

)

 

 

(7

)%

 

 

(2,822

)

 

 

(4

)%

Net investment income

 

 

167,152

 

 

 

155,501

 

 

 

135,837

 

 

 

11,651

 

 

 

7

%

 

 

19,664

 

 

 

14

%

Realized investment gains (losses)

 

 

(2,037

)

 

 

1,015

 

 

 

(645

)

 

 

(3,052

)

 

*

 

 

 

1,660

 

 

*

 

Other investment gains (losses)

 

 

1,221

 

 

 

1,221

 

 

 

(5,251

)

 

 

-

 

 

*

 

 

 

6,472

 

 

*

 

Investment gains (losses)

 

 

(816

)

 

 

2,236

 

 

 

(5,896

)

 

 

(3,052

)

 

*

 

 

 

8,132

 

 

*

 

Other, net

 

 

4,200

 

 

 

53,557

 

 

 

4,609

 

 

 

(49,357

)

 

*

 

 

 

48,948

 

 

*

 

Total revenues

 

 

223,672

 

 

 

264,161

 

 

 

190,200

 

 

 

(40,489

)

 

 

(15

)%

 

 

73,961

 

 

 

39

%

Benefits and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Benefits and claims

 

 

14,383

 

 

 

12,809

 

 

 

20,895

 

 

 

1,574

 

 

 

12

%

 

 

(8,086

)

 

 

(39

)%

Future policy benefits remeasurement (gain) loss

 

 

337

 

 

 

5,345

 

 

 

(171

)

 

 

(5,008

)

 

*

 

 

 

5,516

 

 

*

 

Amortization of DAC

 

 

1,111

 

 

 

1,205

 

 

 

1,534

 

 

 

(94

)

 

 

(8

)%

 

 

(329

)

 

 

(21

)%

Insurance expenses

 

 

4,582

 

 

 

4,662

 

 

 

5,070

 

 

 

(80

)

 

 

(2

)%

 

 

(408

)

 

 

(8

)%

Insurance commissions

 

 

(395

)

 

 

706

 

 

 

1,260

 

 

 

(1,101

)

 

*

 

 

 

(554

)

 

 

(44

)%

Sales commissions

 

 

19,450

 

 

 

19,625

 

 

 

18,420

 

 

 

(175

)

 

*

 

 

 

1,205

 

 

 

7

%

Interest expense

 

 

23,958

 

 

 

25,034

 

 

 

26,594

 

 

 

(1,076

)

 

 

(4

)%

 

 

(1,560

)

 

 

(6

)%

Other operating expenses

 

 

162,265

 

 

 

161,815

 

 

 

139,850

 

 

 

450

 

 

*

 

 

 

21,965

 

 

 

16

%

Total benefits and expenses

 

 

225,691

 

 

 

231,201

 

 

 

213,452

 

 

 

(5,510

)

 

 

(2

)%

 

 

17,749

 

 

 

8

%

Income (loss) before income taxes

 

$

(2,019

)

 

$

32,960

 

 

$

(23,252

)

 

$

(34,979

)

 

*

 

 

$

56,212

 

 

*

 

 

 

* Less than 1% or not meaningful

 

Total revenues. Total revenues decreased in 2025 from 2024 primarily due to a $50.0 million gain recognized in 2024 within Other, net revenue related to payments received under a Representation and Warranty insurance policy as discussed further in Note 4 (Segment and Geographical Information) to our consolidated financial statements included elsewhere in this report. Also contributing to the revenue decline was an increase of investment losses, largely the result of recognition of $2.0 million of investment losses in 2025 related to the tender of bonds from a certain issuer that allowed us to reinvest the proceeds at current market interest rates rather than accept replacement bonds from the issuer at less favorable terms. The decrease in revenues was partially offset by higher net investment income primarily due to continued growth of the invested asset portfolio in 2025.

Total benefits and expenses. Total benefits and expenses decreased in 2025 from 2024 primarily due to a future policy benefits remeasurement loss in the third quarter of 2024 recorded in connection with the refinement of assumptions on a closed block of non-term life insurance. Within other operating expenses, higher employee-related costs were largely offset by decreases in various other expenses.

Financial Condition

Investments. Our insurance business is primarily focused on selling term life insurance, which does not include an investment component for the policyholder. The invested asset portfolio funded by premiums from our term life insurance business does not involve the substantial asset accumulations and spread requirements that exist with other non-term life insurance products. As a result, the profitability of our term life insurance business is not as sensitive to the impact that interest rates have on our invested asset portfolio and investment income as the profitability of other companies that distribute non-term life insurance products.

We follow a conservative investment strategy designed to emphasize the preservation of our invested assets and provide adequate liquidity for the prompt payment of claims. To meet business needs and mitigate risks, our investment guidelines provide restrictions on our portfolio’s composition, including limits on asset type, per issuer limits, credit quality limits, portfolio duration, limits on the amount of investments in approved countries and permissible security types. We also manage and monitor our allocation of investments to limit the accumulation of any disproportionate concentrations of risk among industry sectors or issuer countries outside of the U.S. and Canada. In addition, as of December 31, 2025, we did not hold any country of issuer concentrations outside of the U.S. or Canada that represented more than 5% of the fair value of our available-for-sale invested asset portfolio or any industry concentrations of corporate bonds that represented more than 10% of the fair value of our available-for-sale invested asset portfolio.

58

 

We invest a portion of our portfolio in assets denominated in Canadian dollars to support our Canadian operations. Additionally, to ensure adequate liquidity for payment of claims, we take into account the maturity and duration of our invested asset portfolio and our general liability profile.

We also hold within our invested asset portfolio a credit enhanced note (“LLC Note”) issued by a limited liability company owned by a third-party service provider which is classified as a held-to-maturity security. The LLC Note, which is scheduled to mature on December 31, 2030, was obtained in exchange for the Surplus Note of equal principal amount issued by Vidalia Re, Inc., a special purpose financial captive insurance company and wholly owned subsidiary of Primerica Life Insurance Company (“Primerica Life”). For more information on the LLC Note, see Note 5 (Investments) to our consolidated financial statements included elsewhere in this report.

We have an investment committee composed of members of our senior management team that is responsible for establishing and maintaining our investment guidelines and supervising our investment activity. Our investment committee regularly monitors our overall investment results and our compliance with our investment objectives and guidelines. We use a third-party investment advisor to assist us in the management of our investing activities. Our investment advisor reports to our investment committee.

Our invested asset portfolio is subject to a variety of risks, including risks related to general economic conditions, market volatility, interest rate fluctuations, liquidity risk and credit and default risk. Investment guideline restrictions have been established to minimize the effect of these risks but may not always be effective due to factors beyond our control. Interest rates and credit spreads are highly sensitive to many factors, including governmental monetary policies, domestic and international economic and political conditions and other factors beyond our control. A significant increase in interest rates or credit spreads could result in significant unrealized losses in the value of our invested asset portfolio. We believe that fluctuations caused by movement in interest rates and credit spreads generally have little bearing on the recoverability of our investments as we have the ability to hold these investments until maturity or a market price recovery and we have no present intention to dispose of them.

Details on asset mix (excluding our held-to-maturity security) were as follows:

 

 

 

December 31, 2025

 

December 31, 2024

 

 

Fair value

 

Cost or amortized cost

 

Fair value

 

Cost or amortized cost

U.S. government and agencies

 

*

 

*

 

*

 

*

Foreign government

 

4%

 

4%

 

5%

 

4%

States and political subdivisions

 

3%

 

3%

 

3%

 

3%

Corporates

 

49%

 

49%

 

49%

 

50%

Mortgage- and asset-backed securities

 

24%

 

25%

 

23%

 

24%

Equity securities

 

*

 

*

 

1%

 

1%

Trading securities

 

*

 

*

 

*

 

*

Cash and cash equivalents

 

19%

 

18%

 

19%

 

18%

Total

 

100%

 

100%

 

100%

 

100%

 

* Less than 1%.

The composition and duration of our portfolio will vary depending on several factors, including the yield curve and our opinion of the relative value among various asset classes. The relative composition of our asset portfolio did not change significantly from 2024 to 2025. The year-end average rating, duration and book yield of our fixed-maturity portfolio (excluding our held-to-maturity security) were as follows:

 

 

December 31, 2025

 

December 31, 2024

Average rating of our fixed-maturity portfolio

 

A

 

A

Average duration of our fixed-maturity portfolio

 

5.2 years

 

5.1 years

Average book yield of our fixed-maturity portfolio

 

4.30%

 

4.14%

 

59

 

The increase in the average book yield of our fixed-maturity portfolio as of December 31, 2025 reflects higher reinvestment rates compared to the yield on maturing investments during 2025.

Ratings for our investments in fixed-maturity securities are determined using Nationally Recognized Statistical Rating Organizations designations and/or equivalent ratings. The distribution of our investments in fixed-maturity securities (excluding our held-to-maturity security) by rating, including those classified as trading securities, were as follows:

 

 

 

December 31, 2025

 

 

December 31, 2024

 

 

 

Amortized cost (1)

 

 

%

 

 

Amortized cost (1)

 

 

%

 

 

 

(Dollars in thousands)

 

AAA

 

$

666,842

 

 

 

20

%

 

$

615,348

 

 

 

20

%

AA

 

 

503,652

 

 

 

15

%

 

 

414,052

 

 

 

13

%

A

 

 

805,885

 

 

 

24

%

 

 

770,616

 

 

 

24

%

BBB

 

 

1,377,969

 

 

 

40

%

 

 

1,315,973

 

 

 

42

%

Below investment grade

 

 

36,627

 

 

 

1

%

 

 

36,548

 

 

 

1

%

Not rated

 

 

444

 

 

*

 

 

 

2,957

 

 

*

 

Total

 

$

3,391,419

 

 

 

100

%

 

$

3,155,494

 

 

 

100

%

(1)
Includes trading securities at carrying value and available-for-sale securities (excluding short-term investments) at amortized cost.

* Less than 1%.

The ten largest holdings within our fixed-maturity securities invested asset portfolio (excluding our held-to-maturity security and short-term investments) were as follows:

 

 

 

December 31, 2025

Issuer

 

Fair value

 

 

Amortized cost (1)

 

 

Unrealized gain (loss)

 

 

Credit rating

 

 

(Dollars in thousands)

 ONEOK Inc

 

$

15,207

 

 

$

15,447

 

 

$

(240

)

 

BBB

 Province of Alberta Canada

 

 

14,817

 

 

 

15,408

 

 

 

(591

)

 

AA-

 Province of Ontario Canada

 

 

13,865

 

 

 

14,109

 

 

 

(244

)

 

A+

 Realty Income Corp

 

 

13,719

 

 

 

13,973

 

 

 

(254

)

 

A-

 Manulife Financial Corp

 

 

13,173

 

 

 

13,456

 

 

 

(283

)

 

A

 Boeing Co

 

 

12,903

 

 

 

12,414

 

 

 

489

 

 

BBB-

 Province of Quebec Canada

 

 

12,443

 

 

 

12,697

 

 

 

(254

)

 

AA-

 Morgan Stanley

 

 

12,308

 

 

 

12,220

 

 

 

88

 

 

BBB+

 Province of British Columbia Canada

 

 

12,036

 

 

 

12,383

 

 

 

(347

)

 

A+

 Province of New Brunswick Canada

 

 

11,717

 

 

 

12,246

 

 

 

(529

)

 

A+

Total – ten largest holdings

 

$

132,188

 

 

$

134,353

 

 

$

(2,165

)

 

 

Total – fixed-maturity securities

 

$

3,278,047

 

 

$

3,391,419

 

 

 

 

 

 

Percent of total fixed-maturity securities

 

 

4

%

 

 

4

%

 

 

 

 

 

 

(1)
Includes trading securities at carrying value and available-for-sale securities at amortized cost.

For additional information on our invested asset portfolio, see Note 5 (Investments) and Note 6 (Fair Value of Financial Instruments) to our consolidated financial statements included elsewhere in this report.

Other Significant Assets and Liabilities. The balances of and changes in other significant assets and liabilities were as follows:

 

 

 

December 31,

 

 

Change

 

 

 

2025

 

 

2024

 

 

$

 

 

%

 

 

 

(Dollars in thousands)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Reinsurance recoverables

 

$

2,564,952

 

 

$

2,744,165

 

 

$

(179,213

)

 

 

(7

)%

Deferred policy acquisition costs, net

 

 

3,915,998

 

 

 

3,680,430

 

 

 

235,568

 

 

 

6

%

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Future policy benefits

 

$

6,818,179

 

 

$

6,503,064

 

 

$

315,115

 

 

 

5

%

 

Reinsurance recoverables. Reinsurance recoverables reflects future policy benefit reserves and claim reserves ceded to reinsurers, including the IPO coinsurers. Reinsurance recoverables as of December 31, 2025 decreased compared with December 31, 2024, primarily due to the continued runoff of the IPO book of business.

Deferred policy acquisition costs, net. The increase in DAC was primarily a result of the cumulative impact of incremental commissions and expenses deferred as a result of new business in 2025 not subject to the IPO coinsurance agreements.

Future policy benefits. The increase in future policy benefits was primarily driven by continued growth in the business and the decrease in market observable interest rates at year-end that are used to discount the present value of the estimated future cash flows included in the liability for future policy benefits.

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For additional information, see the notes to our consolidated financial statements included elsewhere in this report.

Liquidity and Capital Resources

Dividends and other payments to the Parent Company from its subsidiaries are our principal sources of cash. The amount of dividends paid by the subsidiaries is dependent on their capital needs to fund future growth and applicable regulatory restrictions. The primary uses of funds by the Parent Company include the payments of stockholder dividends, interest on note payable, general operating expenses, and income taxes, as well as repurchases of shares of our common stock outstanding. During 2025, our life insurance underwriting companies declared and paid ordinary dividends of $317.0 million to the Parent Company. See Note 17 (Statutory Accounting and Dividend Restrictions) to our consolidated financial statements included elsewhere in this report for more information on insurance subsidiary dividends and statutory restrictions. In addition, in 2025 our non-life insurance subsidiaries declared and paid dividends of $239.1 million to the Parent Company. At December 31, 2025, the Parent Company had cash and invested assets of $521.1 million.

The Parent Company’s subsidiaries generate operating cash flows primarily from term life insurance premiums (net of premiums ceded to reinsurers), income from invested assets, commissions and fees collected from the distribution of investment and savings products, as well as other financial products. The subsidiaries’ principal operating cash outflows include the payment of insurance claims and benefits (net of ceded claims recovered from reinsurers), commissions to the independent sales force, insurance and other operating expenses, interest expense for future policy benefit reserves financing transactions, and income taxes.

The distribution and underwriting of term life insurance requires up-front cash outlays at the time the policy is issued as we pay a substantial majority of the sales commission during the first year following the sale of a policy and incur costs for underwriting activities at the inception of a policy’s term. During the early years of a policy’s term, we generally receive level term premiums in excess of claims paid. We invest the excess cash generated during earlier policy years primarily in fixed-maturity securities held in support of future policy benefit reserves. In later policy years, cash received from the maturity or sale of invested assets is used to pay claims in excess of level term premiums received.

Historically, cash flows generated by our businesses, primarily from our existing block of term life insurance policies and our investment and savings products, have provided us with sufficient liquidity to meet our operating requirements. We anticipate that cash flows from our businesses will continue to provide sufficient operating liquidity over the next 12 months.

If necessary, we could seek to enhance our liquidity position or capital structure through sales of our available-for-sale investment portfolio, changes in the timing or amount of share repurchases, borrowings against our Revolving Credit Facility, or some combination of these sources. Additionally, we believe that cash flows from our businesses and potential sources of funding will sufficiently support our long-term liquidity needs.

Cash Flows. The components of the changes in cash and cash equivalents were as follows:

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(In thousands)

 

Net cash provided by (used in) operating activities

 

$

901,178

 

 

$

862,088

 

 

$

692,517

 

Net cash provided by (used in) investing activities

 

 

(235,568

)

 

 

(232,250

)

 

 

(90,051

)

Net cash provided by (used in) financing activities

 

 

(599,637

)

 

 

(551,141

)

 

 

(479,621

)

Effect of foreign exchange rate changes on cash

 

 

2,433

 

 

 

(4,024

)

 

 

1,063

 

Change in cash and cash equivalents

 

$

68,406

 

 

$

74,673

 

 

$

123,908

 

Operating Activities. Cash provided by operating activities increased in 2025 from 2024 largely due to higher earnings from our Investment and Savings Products segment, higher net premiums in excess of net claims paid in our Term Life Insurance segment and lower cash outflows for policy acquisition costs in our Term Life Insurance segment. Partially offsetting the year-over-year increase in cash inflows is higher income tax remittances in 2025 primarily due to higher pre-tax income and differences in the timing of purchases, maturities, and sales of financial instruments classified as trading securities, which are classified as cash flows from operating activities.

Investing Activities. Cash used in investing activities remained relatively flat in 2025 compared to 2024 primarily due to the impact of the $50.0 million received under a Representation and Warranty insurance policy in 2024, largely offset by fluctuations in the timing of maturities, sales and reinvestments of debt securities held in our available-for-sale investment portfolio and the $21.4 million of cash included in the disposal of the Senior Health business in 2024.

Financing Activities. Cash used in financing activities increased in 2025 from 2024 primarily due to an increase in our share repurchase program and higher per share stockholder dividend payments.

Risk-Based Capital (“RBC”). The National Association of Insurance Commissioners (“NAIC”) has established RBC standards for U.S. life insurers, as well as a risk-based capital model act (the “RBC Model Act”) that has been adopted by the insurance regulatory

61

 

authorities. The RBC Model Act requires that life insurers annually submit a report to state regulators regarding their RBC based upon four categories of risk: asset risk; insurance risk; interest rate risk and business risk. The capital requirement for each is determined by applying factors that vary based upon the degree of risk to various asset, premiums and policy benefit reserve items. The formula is an early warning tool to identify possible weakly capitalized companies for purposes of initiating further regulatory action.

As of December 31, 2025, our U.S. life insurance subsidiaries maintained statutory capital and surplus substantially in excess of the applicable regulatory requirements and remain well positioned to support existing operations and fund future growth.

In Canada, an insurer’s minimum capital requirement is overseen by the Office of the Superintendent of Financial Institutions (“OSFI”) and determined as the sum of the capital requirements for six categories of risk: asset default risk, mortality/morbidity/lapse/expense risks, changes in interest rate environment risk, operational risk, segregated funds risk and foreign exchange risk. As of December 31, 2025, Primerica Life Insurance Company of Canada was in compliance with Canada’s minimum capital requirements as defined by OSFI.

For more information regarding statutory capital requirements and dividend capacities of our insurance subsidiaries, see Note 17 (Statutory Accounting and Dividend Restrictions) to our consolidated financial statements included elsewhere in this report.

Redundant Reserve Financing. The Model Regulation titled Valuation of Life Insurance Policies, commonly known as Regulation XXX, requires insurers to carry statutory policy benefit reserves for term life insurance policies with long-term premium guarantees which are often significantly in excess of the future policy benefit reserves that insurers deem necessary to satisfy claim obligations (“redundant policy benefit reserves”). Accordingly, many insurance companies have sought ways to reduce their capital needs by financing redundant policy benefit reserves through bank financing, reinsurance arrangements and other financing transactions.

We have established Vidalia Re as a special purpose financial captive insurance company and wholly owned subsidiary of Primerica Life. Primerica Life has ceded certain term life insurance policies issued in 2011 through 2017 to Vidalia Re as part of a Regulation XXX redundant reserve financing transaction (the “Vidalia Re Redundant Reserve Financing Transaction”). This redundant reserve financing transaction allows us to more efficiently manage and deploy our capital. See Note 17 (Statutory Accounting and Dividend Restrictions) and Note 18 (Commitments and Contingent Liabilities) to our consolidated financial statements included elsewhere in this report for more information.

The NAIC has adopted a model regulation for determining reserves using a principle-based approach (“principle-based reserves” or “PBR”), which is designed to reflect each insurer’s own experience in calculating reserves and move away from a single prescriptive reserving formula. Primerica Life adopted PBR as of January 1, 2018 and NBLIC adopted the New York amended version of PBR effective January 1, 2021. PBR significantly reduced the redundant statutory policy benefit reserve requirements while still ensuring adequate liabilities are held. The regulation only applies for business issued after the effective dates. See Note 5 (Investments), Note 12 (Debt) and Note 18 (Commitments and Contingent Liabilities) to our consolidated financial statements included elsewhere in this report for more information on the redundant reserve financing transaction.

Note Payable. The Company has $600.0 million of publicly-traded Senior Notes outstanding issued at a price of 99.55% with an annual interest rate of 2.80%, payable semi-annually in arrears on May 19 and November 19. The Senior Notes are scheduled to mature on November 19, 2031. We were in compliance with the covenants of the Senior Notes as of December 31, 2025. No events of default occurred during the year ended December 31, 2025.

Financial Ratings. As of December 31, 2025, the investment grade credit ratings for our Senior Notes were as follows:

Agency

 

Senior Notes rating

Moody’s

 

Baa1, stable outlook

Standard & Poor’s

 

A-, stable outlook

A.M. Best Company

 

a-, stable outlook

As of December 31, 2025, Primerica Life’s financial strength ratings were as follows:

Agency

 

Financial strength rating

Moody’s

 

A1, stable outlook

Standard & Poor’s

 

AA-, stable outlook

A.M. Best Company

 

A+, stable outlook

Securities Lending. We participate in securities lending transactions with brokers to increase investment income with minimal risk. See Note 5 (Investments) to our consolidated financial statements included elsewhere in this report for additional information.

Surplus Note. Vidalia Re issued a Surplus Note in exchange for the LLC Note as a part of the Vidalia Re Redundant Reserve Financing Transaction. The Surplus Note has a principal amount equal to the LLC Note and is scheduled to mature on December 31, 2030. For more information on the Surplus Note, see Note 12 (Debt) to our consolidated financial statements included elsewhere in this report.

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Off-Balance Sheet Arrangements. We have no transactions, agreements or other contractual arrangements to which an entity unconsolidated with the Company is a party, under which the Company maintains any off-balance sheet obligations or guarantees as of December 31, 2025.

Credit Facility Agreement. We maintain an unsecured $200.0 million Revolving Credit Facility with a syndicate of commercial banks that has a scheduled termination date of June 22, 2026. Amounts outstanding under the Revolving Credit Facility bear interest at a periodic rate equal to the Secured Overnight Financing Rate (“SOFR”) rate loan or the base rate, plus in either case an applicable margin. The Revolving Credit Facility also permits the issuance of letters of credit. The applicable margins are based on our debt rating with such margins for SOFR rate loans and letters of credit ranging from 1.000% to 1.625% per annum and for base rate loans ranging from 0.000% to 0.625% per annum. Under the Revolving Credit Facility, we incur a commitment fee that is payable quarterly in arrears and is determined by our debt rating. This commitment fee ranges from 0.100% to 0.225% per annum of the aggregate $200.0 million commitment of the lenders under the Revolving Credit Facility. As of December 31, 2025, no amounts were outstanding under the Revolving Credit Facility and we were in compliance with its covenants. Furthermore, no events of default occurred under the Revolving Credit Facility in 2025.

Contractual Obligations. Our material cash requirements from known contractual and other obligations primarily consist of following:

Future Policy Benefits. Our liability for future policy benefits, which is presented in the consolidated balance sheets and Note 11 (Future Policy Benefits) to our consolidated financial statements included elsewhere in this report, represents the present value of expected future benefits less the present value of expected future net premiums receivable under the contracts. Net premiums are defined as the portion of the gross premiums received from policyholders that are needed to pay for all benefits. These benefit payments are contingent on policyholders continuing to renew their policies and make their premium payments. We expect to fully fund the obligations for future policy benefits from cash flows from general account invested assets, claims reimbursed by reinsurers, and from future premiums.

Policy Claims. Policy claims, which is presented in the consolidated balance sheets and Note 10 (Policy Claims and Other Benefits Payable) to our consolidated financial statements included elsewhere in this report, represents claims and benefits that have been incurred but not paid to policyholders and are assumed to be due within a year.

Other Policyholder Funds. Other policyholder funds, which is presented in the consolidated balance sheets, primarily represent claim payments left on deposit with us that are payable on demand.

Note Payable and Interest Obligations. We have debt obligations for the principal balance of our Senior Notes, which is presented in the consolidated balance sheets and described further in Note 12 (Debt) to our consolidated financial statements included elsewhere in the report. We also maintain interest obligations for interest on our Senior Notes, the commitment fee on our Revolving Credit Facility, fees paid for the credit enhancement feature on the LLC Note and a finance charge incurred pursuant to one of our IPO coinsurance agreements as of December 31, 2025. We do not expect the principal or interest on the Surplus Note will result in any cash requirements as the payments due for these items are contractually offset by the principal and interest on the LLC Note as long as we hold the LLC Note. The Company asserts its positive intent and ability to hold the LLC Note until maturity.

Lease Obligations. Our lease obligations primarily represent payments for operating leases related to office space. For additional information on leases see Note 21 (Leases) to our consolidated financial statements included elsewhere in this report.

For additional information concerning our commitments and contingencies, see Note 18 (Commitments and Contingent Liabilities) to our consolidated financial statements included elsewhere in this report.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Market risk is the risk of the loss of fair value resulting from adverse changes in market rates and prices, such as interest rates and foreign currency exchange rates. Market risk is directly influenced by the volatility and liquidity in the markets in which the related underlying financial instruments are traded. Sensitivity analysis measures the impact of hypothetical changes in interest rates, foreign exchange rates and other market rates or prices on the profitability of market-sensitive financial instruments.

The following discussion about the potential effects of changes in interest rates and Canadian currency exchange rates is based on shock-tests, which model the effects of interest rate and Canadian exchange rate shifts on our financial condition and results of operations. Although we believe shock tests provide the most meaningful analysis permitted by the rules and regulations of the SEC, they are constrained by several factors, including the necessity to conduct the analysis based on a single point in time and by their inability to include the extraordinarily complex market reactions that normally would arise from the market shifts modeled. Although the following results of shock tests for changes in interest rates and Canadian currency exchange rates may have some limited use as benchmarks, they should not be viewed as forecasts. These disclosures also are selective in nature and address, in the case of interest rates, only the potential direct impact on our financial instruments and, in the case of Canadian currency exchange rates, the potential translation impact on net income from our Canadian subsidiaries. They do not include a variety of other potential factors that could affect our business as a result of these changes in interest rates and Canadian currency exchange rates.

63

 

Interest Rate Risk. The fair value of the fixed-maturity securities (excluding the held-to-maturity security) in our invested asset portfolio as of December 31, 2025 and 2024 was $3.3 billion and $2.9 billion, respectively. One of the primary market risks for this portion of our invested asset portfolio is interest rate risk. One means of assessing the exposure of our fixed-maturity securities portfolios to interest rate changes is a duration-based analysis that measures the potential changes in market value resulting from a hypothetical change in interest rates of 100 basis points across all maturities. This model is sometimes referred to as a parallel shift in the yield curve. Under this model, with all other factors constant and assuming no offsetting change in the value of our liabilities, we estimated that such an increase in interest rates would cause the fair value of our fixed-maturity securities portfolios to decline by $147.0 million, or 4%, based on our actual securities positions as of December 31, 2025. For comparative purposes, the same increase in rates would have caused the fair value of our fixed-maturity securities portfolios to decline by $130.3 million, or 4%, based on our actual securities positions as of December 31, 2024.

Canadian Currency Risk. We also have exposure to foreign currency exchange risk to the extent we conduct business in Canada. A strong Canadian dollar relative to the U.S. dollar results in higher levels of reported revenues, expenses, net income, assets, liabilities, and accumulated comprehensive income (loss) in our U.S. dollar financial statements, and a weaker Canadian dollar would have the opposite effect. Generally, our Canadian dollar-denominated assets are held in support of our Canadian dollar-denominated liabilities. For the year ended December 31, 2025, 13% of our revenues, excluding realized investment gains, and 14% of income from continuing operations before income taxes were generated by our Canadian operations. For the year ended December 31, 2024, 13% of our revenues, excluding realized investment gains, and 13% of income from continuing operations before income taxes were generated by our Canadian operations.

One means of assessing exposure to changes in Canadian currency exchange rates is to model the effects on reported income using a sensitivity analysis. We analyzed our Canadian currency exposure for the years ended December 31, 2025 and 2024. Net exposure was measured assuming a 10% decrease in the value of the Canadian dollar relative to the U.S. dollar for each year. We estimated that such a decrease would decrease our income from continuing operations before income taxes by $13.6 million for the year ended December 31, 2025. For comparative purposes, a similar 10% decrease would have decreased our income from continuing operations before income taxes by $12.3 million for the year ended December 31, 2024.

Our investment in the net assets of our Canadian operations is also subject to Canadian currency risk. If we were to assume a 10% decrease in Canadian currency exchange rates compared to the U.S. dollar, the translated value of our net investment in our Canadian subsidiaries in U.S. dollars would decrease by $40.8 million based on net assets as of December 31, 2025. For comparative purposes, a similar decrease in Canadian currency exchange rates compared to the U.S. dollar would have caused the translated value of our net investment in our Canadian subsidiaries in U.S. dollars to decline by $35.1 million based on net assets as of December 31, 2024. Historically, we have not hedged this exposure, although we may elect to do so in future periods. The impact of translating the balance of net assets of our Canadian operations is recorded in our consolidated balance sheets within the accumulated other comprehensive income (loss) component of stockholders’ equity.

Credit Risk. We extensively use reinsurance in the United States to diversify our insurance and underwriting risk and to manage our loss exposure to mortality risk. Reinsurance does not relieve us of our direct liability to our policyholders. Due to factors such as insolvency, adverse underwriting results or inadequate investment returns, our reinsurers may not be able to pay the amounts they owe us on a timely basis or at all. Further, reinsurers might refuse or fail to pay losses that we cede to them or might delay payment. To limit our exposure with any one reinsurer, we monitor the concentration of credit risk we have with our reinsurance counterparties, as well as their financial condition. We manage this reinsurer credit risk through analysis and monitoring of the credit-worthiness of each of our reinsurance partners to minimize collection issues. Also, for reinsurance contracts with unauthorized reinsurers, we require collateral such as letters of credit. For information on our reinsurance exposure and reinsurers, see Note 7 (Reinsurance) to our consolidated financial statements included elsewhere in this report.

Concurrent with the execution of the Vidalia Re Redundant Reserve Financing Transaction between Vidalia Re and Primerica Life, Vidalia Re entered into a Surplus Note Purchase Agreement (the “Surplus Note Purchase Agreement”) with Hannover Life Reassurance Company of America and certain of its affiliates (collectively, “Hannover Re”) and a newly-formed limited liability company (the “LLC”) owned by a third-party service provider. Under the Surplus Note Purchase Agreement, Vidalia Re issued the Surplus Note to the LLC in exchange for the LLC Note of equal principal amount. The Company assumes credit risk associated with a credit enhancement feature provided by Hannover Re, which bears the obligation to absorb the LLC’s losses in the event of a Surplus Note default in exchange for a fee.

For information on the Surplus Note Purchase Agreement, see Note 5 (Investments) and Note 12 (Debt) to our consolidated financial statements included elsewhere in this report.

We also bear credit risk on our investment portfolio related to the uncertainty associated with the continued ability of an obligor to make timely payments of principal and interest. In an effort to meet business needs and mitigate credit and other portfolio risks, we established investment guidelines that provide restrictions on our portfolio’s composition, including limits on asset type, per issuer limits, credit quality limits, portfolio duration, limits on the amount of investments in approved countries and permissible security

64

 

types. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Financial Condition” for details on our investment portfolio, including investment strategy, asset mix and credit ratings.

 

65

 

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

 

Report of Independent Registered Public Accounting Firm

 

To the Stockholders and Board of Directors
Primerica, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Primerica, Inc. and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes and financial statement schedules I, II, III, and IV (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 27, 2026 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Liability for future policy benefits for term life insurance contracts

As described in Notes 1 and 11 to the consolidated financial statements, the liability for future policy benefits is measured as the present value of expected future benefits less the present value of expected future net premiums receivable under the contracts. The cash flow assumptions underlying the liability for future policy benefits include mortality, persistency, and disability rates. The cash flow assumptions used to measure the liability for future policy benefits are reviewed at least annually and updated as necessary. As of December 31, 2025, the liability for future policy benefits was $6,818 million, which included the liability for future policy benefits for term life insurance contracts of $6,615 million.

We identified the evaluation of the liability for future policy benefits for term life insurance contracts as a critical audit matter. Specifically, the evaluation of the mortality, persistency, and disability rate cash flow assumptions (collectively,

66

 

key assumptions) used in estimating the liability for future policy benefits for term life insurance contracts required subjective auditor judgment and specialized skills and knowledge.

 

The following are the primary procedures we performed to address this critical audit matter. With the assistance of actuarial professionals with specialized skills and knowledge, we evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s process for estimating the liability for future policy benefits for term life insurance contracts. This included controls related to the actuarial methodologies and the key assumptions. We also involved actuarial professionals with specialized skills and knowledge, who assisted in:

•
assessing the actuarial methodologies used to estimate the liability for future policy benefits for term life insurance contracts for consistency with generally accepted actuarial methodologies
•
evaluating the Company’s key assumptions by comparing them to the Company’s relevant historical experience data and anticipated trends
•
recalculating the projected cash flows for a selection of term life insurance contracts and comparing the results to the Company’s estimates.

 

/s/ KPMG LLP

 

We have served as the Company’s auditor since 2007.

Atlanta, Georgia

February 27, 2026

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PRIMERICA, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

 

 

December 31, 2025

 

 

December 31, 2024

 

 

 

(In thousands, except per-share amounts)

 

Assets:

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

Fixed-maturity securities available-for-sale, at fair value (amortized cost: $3,378,618 in 2025
   and $3,152,483 in 2024)

 

$

3,265,246

 

 

$

2,946,126

 

Fixed-maturity security held-to-maturity, at amortized cost (fair value: $1,153,047 in 2025 and
   $1,227,428 in 2024)

 

 

1,175,380

 

 

 

1,303,880

 

Equity securities, at fair value (historical cost: $20,501 in 2025 and $22,935 in 2024)

 

 

26,433

 

 

 

27,144

 

Trading securities, at fair value (cost: $13,084 in 2025 and $3,562 in 2024)

 

 

12,801

 

 

 

3,011

 

Policy loans and other invested assets

 

 

56,233

 

 

 

50,881

 

Total investments

 

 

4,536,093

 

 

 

4,331,042

 

Cash and cash equivalents

 

 

756,227

 

 

 

687,821

 

Accrued investment income

 

 

30,122

 

 

 

28,100

 

Reinsurance recoverables

 

 

2,564,952

 

 

 

2,744,165

 

Deferred policy acquisition costs, net

 

 

3,915,998

 

 

 

3,680,430

 

Agent balances, due premiums and other receivables

 

 

275,171

 

 

 

282,607

 

Intangible asset

 

 

45,275

 

 

 

45,275

 

Income tax receivable

 

 

45,265

 

 

 

-

 

Deferred income taxes

 

 

132,037

 

 

 

122,664

 

Operating lease right-of-use assets

 

 

41,900

 

 

 

47,023

 

Other assets

 

 

387,776

 

 

 

403,608

 

Separate account assets

 

 

2,281,520

 

 

 

2,209,287

 

Total assets

 

$

15,012,336

 

 

$

14,582,022

 

 

 

 

 

 

 

 

Liabilities and stockholders’ equity:

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Future policy benefits

 

$

6,818,179

 

 

$

6,503,064

 

Unearned and advance premiums

 

 

15,521

 

 

 

15,606

 

Policy claims and other benefits payable

 

 

495,356

 

 

 

488,350

 

Other policyholders’ funds

 

 

356,427

 

 

 

402,323

 

Note payable

 

 

595,315

 

 

 

594,512

 

Surplus note

 

 

1,175,119

 

 

 

1,303,556

 

Income tax payable

 

 

119,654

 

 

 

57,987

 

Deferred income taxes

 

 

28,306

 

 

 

57,624

 

Operating lease liabilities

 

 

49,565

 

 

 

55,478

 

Other liabilities

 

 

546,596

 

 

 

549,160

 

Payable under securities lending

 

 

84,876

 

 

 

86,034

 

Separate account liabilities

 

 

2,281,520

 

 

 

2,209,287

 

Commitments and contingent liabilities (see Commitments and Contingent Liabilities note)

 

 

 

 

 

 

Total liabilities

 

 

12,566,434

 

 

 

12,322,981

 

Stockholders’ equity:

 

 

 

 

 

 

Common stock ($0.01 par value; authorized 500,000 shares in 2025 and 2024; issued and
   outstanding 31,810 shares in 2025 and 33,368 shares in 2024)

 

 

318

 

 

 

334

 

Paid-in capital

 

 

-

 

 

 

-

 

Retained earnings

 

 

2,416,149

 

 

 

2,231,483

 

Accumulated other comprehensive income (loss), net of income tax:

 

 

 

 

 

 

Effect of change in discount rate assumptions on the liability for future policy benefits

 

 

134,594

 

 

 

224,833

 

Unrealized foreign currency translation gains (losses)

 

 

(15,836

)

 

 

(34,767

)

Net unrealized investment gains (losses) on available-for-sale securities

 

 

(89,323

)

 

 

(162,842

)

Total stockholders’ equity

 

 

2,445,902

 

 

 

2,259,041

 

Total liabilities and stockholders’ equity

 

$

15,012,336

 

 

$

14,582,022

 

 

 

 

 

 

 

 

 

See accompanying notes to consolidated financial statements.

68

 

PRIMERICA, INC. AND SUBSIDIARIES

Consolidated Statements of Income

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(In thousands, except per-share amounts)

 

Revenues:

 

 

 

 

 

 

 

 

 

Direct premiums

 

$

3,462,780

 

 

$

3,393,604

 

 

$

3,312,125

 

Ceded premiums

 

 

(1,678,877

)

 

 

(1,664,433

)

 

 

(1,651,811

)

Net premiums

 

 

1,783,903

 

 

 

1,729,171

 

 

 

1,660,314

 

Commissions and fees

 

 

1,275,864

 

 

 

1,082,889

 

 

 

892,853

 

Investment income net of investment
   expenses

 

 

225,195

 

 

 

218,153

 

 

 

201,311

 

Interest expense on surplus note

 

 

(58,043

)

 

 

(62,652

)

 

 

(65,474

)

Net investment income

 

 

167,152

 

 

 

155,501

 

 

 

135,837

 

Realized investment gains (losses)

 

 

(2,037

)

 

 

1,015

 

 

 

(645

)

Other investment gains (losses)

 

 

1,221

 

 

 

1,221

 

 

 

(5,251

)

Investment gains (losses)

 

 

(816

)

 

 

2,236

 

 

 

(5,896

)

Other, net

 

 

65,610

 

 

 

119,346

 

 

 

65,399

 

Total revenues

 

 

3,291,713

 

 

 

3,089,143

 

 

 

2,748,507

 

 

 

 

 

 

 

 

 

 

 

Benefits and expenses:

 

 

 

 

 

 

 

 

 

Benefits and claims

 

 

665,927

 

 

 

648,163

 

 

 

642,979

 

Future policy benefits remeasurement (gain) loss

 

 

(37,389

)

 

 

(25,920

)

 

 

(384

)

Amortization of deferred policy acquisition costs

 

 

322,903

 

 

 

298,136

 

 

 

275,816

 

Sales commissions

 

 

686,920

 

 

 

573,249

 

 

 

457,444

 

Insurance expenses

 

 

263,467

 

 

 

255,619

 

 

 

235,460

 

Insurance commissions

 

 

22,995

 

 

 

32,008

 

 

 

34,222

 

Interest expense

 

 

23,958

 

 

 

25,034

 

 

 

26,594

 

Other operating expenses

 

 

368,368

 

 

 

343,607

 

 

 

304,638

 

Total benefits and expenses

 

 

2,317,149

 

 

 

2,149,896

 

 

 

1,976,769

 

Income from continuing operations
   before income taxes

 

 

974,564

 

 

 

939,247

 

 

 

771,738

 

Income taxes from continuing operations

 

 

223,330

 

 

 

219,118

 

 

 

180,556

 

    Income from continuing operations

 

 

751,234

 

 

 

720,129

 

 

 

591,182

 

Loss from discontinued operations, net of
   income taxes

 

 

-

 

 

 

(249,611

)

 

 

(14,581

)

   Net income

 

$

751,234

 

 

$

470,518

 

 

$

576,601

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share attributable to common stockholders:

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

22.95

 

 

$

21.02

 

 

$

16.37

 

Discontinued operations

 

 

-

 

 

 

(7.29

)

 

 

(0.40

)

Basic earnings per share attributable to common stockholders

 

$

22.95

 

 

$

13.73

 

 

$

15.97

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share attributable to common stockholders:

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

22.91

 

 

$

20.99

 

 

$

16.34

 

Discontinued operations

 

 

-

 

 

 

(7.28

)

 

 

(0.40

)

Diluted earnings per share attributable to common stockholders

 

$

22.91

 

 

$

13.71

 

 

$

15.94

 

 

 

 

 

 

 

 

 

 

 

Weighted-average shares used in computing earnings
   per share:

 

 

 

 

 

 

 

 

 

Basic

 

 

32,632

 

 

 

34,142

 

 

 

35,954

 

Diluted

 

 

32,680

 

 

 

34,199

 

 

 

36,027

 

.

See accompanying notes to consolidated financial statements.

 

69

 

PRIMERICA, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Loss)

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(In thousands)

 

Net income

 

$

751,234

 

 

$

470,518

 

 

$

576,601

 

Other comprehensive income (loss) before income taxes:

 

 

 

 

 

 

 

 

 

Unrealized investment gains (losses) on available-for-sale securities:

 

 

 

 

 

 

 

 

 

Change in unrealized holding gains (losses) on available-for-sale securities

 

 

90,980

 

 

 

9,950

 

 

 

87,390

 

Reclassification adjustment for investment (gains) losses included in net income

 

 

2,005

 

 

 

(562

)

 

 

2,811

 

Effect of change in discount rate assumptions on the liability for future policy
   benefits

 

 

(113,258

)

 

 

334,035

 

 

 

(216,301

)

Foreign currency translation adjustments:

 

 

 

 

 

 

 

 

 

Change in unrealized foreign currency translation gains (losses)

 

 

18,931

 

 

 

(32,532

)

 

 

10,044

 

Total other comprehensive income (loss) before income taxes

 

 

(1,342

)

 

 

310,891

 

 

 

(116,056

)

Income tax expense (benefit) related to items of other comprehensive income (loss)

 

 

(3,553

)

 

 

72,338

 

 

 

(27,458

)

Other comprehensive income (loss), net of income taxes

 

 

2,211

 

 

 

238,553

 

 

 

(88,598

)

Total comprehensive income (loss)

 

$

753,445

 

 

$

709,071

 

 

$

488,003

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to consolidated financial statements.

 

70

 

PRIMERICA, INC. AND SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(In thousands, except per-share amounts)

 

Equity

 

 

 

 

 

 

 

 

 

Common stock:

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

334

 

 

$

350

 

 

$

368

 

Repurchases of common stock

 

 

(17

)

 

 

(18

)

 

 

(21

)

Net issuance of common stock

 

 

1

 

 

 

2

 

 

 

3

 

Balance, end of period

 

 

318

 

 

 

334

 

 

 

350

 

 

 

 

 

 

 

 

 

 

 

Paid-in capital:

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

 

-

 

 

 

-

 

 

 

-

 

Share-based compensation

 

 

33,085

 

 

 

35,408

 

 

 

32,130

 

Net issuance of common stock

 

 

(1

)

 

 

(2

)

 

 

(3

)

Repurchases of common stock

 

 

(33,084

)

 

 

(35,406

)

 

 

(32,127

)

Balance, end of period

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

Retained earnings:

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

 

2,231,483

 

 

 

2,276,946

 

 

 

2,153,617

 

Net income

 

 

751,234

 

 

 

470,518

 

 

 

576,601

 

Dividends

 

 

(136,052

)

 

 

(112,814

)

 

 

(93,715

)

Repurchases of common stock

 

 

(430,516

)

 

 

(403,167

)

 

 

(359,557

)

Balance, end of period

 

 

2,416,149

 

 

 

2,231,483

 

 

 

2,276,946

 

 

 

 

 

 

 

 

 

 

 

Accumulated other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

 

27,224

 

 

 

(211,329

)

 

 

(122,731

)

Effect of change in discount rate assumptions on the liability for future policy benefits, net of income taxes

 

 

(90,239

)

 

 

263,919

 

 

 

(169,502

)

Change in foreign currency translation adjustment, net of income taxes

 

 

18,931

 

 

 

(32,532

)

 

 

10,044

 

Change in net unrealized investment gains (losses) during the period, net of income taxes

 

 

73,519

 

 

 

7,166

 

 

 

70,860

 

Balance, end of period

 

 

29,435

 

 

 

27,224

 

 

 

(211,329

)

Total stockholders’ equity

 

$

2,445,902

 

 

$

2,259,041

 

 

$

2,065,967

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per share

 

$

4.16

 

 

$

3.30

 

 

$

2.60

 

 

See accompanying notes to consolidated financial statements.

 

71

 

PRIMERICA, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(In thousands)

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

Net income

 

$

751,234

 

 

$

470,518

 

 

$

576,601

 

Adjustments to reconcile net income to cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

 

Change in future policy benefits and other policy liabilities

 

 

95,227

 

 

 

144,269

 

 

 

102,540

 

Deferral of policy acquisition costs

 

 

(535,014

)

 

 

(547,595

)

 

 

(514,970

)

Amortization of deferred policy acquisition costs

 

 

322,903

 

 

 

298,136

 

 

 

275,816

 

Deferred tax provision

 

 

(29,553

)

 

 

(110,597

)

 

 

(43,380

)

Change in income taxes

 

 

17,403

 

 

 

46,567

 

 

 

(8,842

)

Investment (gains) losses

 

 

816

 

 

 

(2,236

)

 

 

5,896

 

Accretion and amortization of investments

 

 

(3,374

)

 

 

(3,384

)

 

 

(2,034

)

Depreciation and amortization

 

 

19,253

 

 

 

23,401

 

 

 

31,964

 

Change in reinsurance recoverables

 

 

231,799

 

 

 

190,953

 

 

 

237,328

 

Change in agent balances, due premiums and other receivables

 

 

7,437

 

 

 

(12,299

)

 

 

(18,761

)

Change in renewal commissions receivable

 

 

3,758

 

 

 

22,675

 

 

 

9,785

 

Trading securities sold, matured, or called (acquired), net

 

 

(9,540

)

 

 

15,308

 

 

 

(14,552

)

Share-based compensation

 

 

24,600

 

 

 

25,075

 

 

 

18,911

 

Impairment of goodwill and other long-lived assets

 

 

-

 

 

 

253,607

 

 

 

-

 

Gain on insurance proceeds received from acquisition representation and warranty policy

 

 

-

 

 

 

(50,000

)

 

 

-

 

Loss on disposal of discontinued operations, excluding income tax benefit

 

 

-

 

 

 

95,787

 

 

 

-

 

Change in other operating assets and liabilities, net

 

 

4,229

 

 

 

1,903

 

 

 

36,215

 

Net cash provided by (used in) operating activities

 

 

901,178

 

 

 

862,088

 

 

 

692,517

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

Available-for-sale investments sold, matured or called:

 

 

 

 

 

 

 

 

 

Fixed-maturity securities — sold

 

 

24,735

 

 

 

7,363

 

 

 

19,230

 

Fixed-maturity securities — matured or called

 

 

454,306

 

 

 

420,742

 

 

 

263,443

 

Short-term investments — sold

 

 

-

 

 

 

-

 

 

 

28,799

 

Short-term investments — matured or called

 

 

-

 

 

 

268

 

 

 

61,782

 

Equity securities — sold

 

 

26

 

 

 

-

 

 

 

3,051

 

Equity securities — matured or called

 

 

1,829

 

 

 

4,375

 

 

 

-

 

Available-for-sale investments acquired:

 

 

 

 

 

 

 

 

 

Fixed-maturity securities

 

 

(690,184

)

 

 

(664,178

)

 

 

(412,262

)

Short-term investments

 

 

-

 

 

 

-

 

 

 

(19,767

)

Equity securities — acquired

 

 

(228

)

 

 

(211

)

 

 

(430

)

Purchases of property and equipment and other investing activities, net

 

 

(26,052

)

 

 

(29,228

)

 

 

(33,897

)

Cash collateral received (returned) on loaned securities, net

 

 

(1,158

)

 

 

(13,751

)

 

 

(1,153

)

Sales (purchases) of short-term investments using securities lending collateral, net

 

 

1,158

 

 

 

13,751

 

 

 

1,153

 

Insurance proceeds received from acquisition representation and warranty policy

 

 

-

 

 

 

50,000

 

 

 

-

 

Disposal of cash in discontinued operations

 

 

-

 

 

 

(21,381

)

 

 

-

 

Net cash provided by (used in) investing activities

 

 

(235,568

)

 

 

(232,250

)

 

 

(90,051

)

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

Dividends paid

 

 

(136,052

)

 

 

(112,814

)

 

 

(93,715

)

Common stock repurchased

 

 

(450,033

)

 

 

(425,035

)

 

 

(375,062

)

Excise tax paid on common stock repurchased

 

 

(3,910

)

 

 

(3,390

)

 

 

-

 

Tax withholdings on share-based compensation

 

 

(9,380

)

 

 

(9,646

)

 

 

(10,579

)

Finance leases

 

 

(262

)

 

 

(256

)

 

 

(265

)

Net cash provided by (used in) financing activities

 

 

(599,637

)

 

 

(551,141

)

 

 

(479,621

)

Effect of foreign exchange rate changes on cash

 

 

2,433

 

 

 

(4,024

)

 

 

1,063

 

Change in cash and cash equivalents

 

 

68,406

 

 

 

74,673

 

 

 

123,908

 

Cash and cash equivalents, beginning of period

 

 

687,821

 

 

 

613,148

 

 

 

489,240

 

Cash and cash equivalents, end of period

 

$

756,227

 

 

$

687,821

 

 

$

613,148

 

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

 

Interest paid

 

$

23,112

 

 

$

24,224

 

 

$

27,279

 

See accompanying notes to consolidated financial statements.

72

 

PRIMERICA, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(1) Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies

Description of Business. Primerica, Inc. (the “Parent Company”), together with its subsidiaries (collectively, “we”, “us” or the “Company”), is a leading provider of financial products and services to middle-income households in the United States and Canada through a network of independent contractor sales representatives (“independent sales representatives” or “independent sales force”). We assist our clients in meeting their needs for term life insurance, which we underwrite, and mutual funds, annuities, managed investments and other financial products, which we distribute primarily on behalf of third parties. Our primary subsidiaries include the following entities: Primerica Financial Services, LLC (“PFS”), a general agency and marketing company; Primerica Life Insurance Company (“Primerica Life”), our principal life insurance company; Primerica Financial Services (Canada) Ltd., a holding company for our Canadian operations, which includes Primerica Life Insurance Company of Canada (“Primerica Life Canada”) and PFSL Investments Canada Ltd.; and PFS Investments Inc. (“PFS Investments”), an investment products company and broker-dealer. Primerica Life, domiciled in Tennessee, owns National Benefit Life Insurance Company (“NBLIC”), a New York insurance company. Vidalia Re, Inc. (“Vidalia Re”) is a special purpose financial captive insurance company and wholly owned subsidiary of Primerica Life. Vidalia Re has entered into a separate coinsurance agreement with Primerica Life whereby Primerica Life has ceded certain level-premium term life insurance policies to Vidalia Re (the “Vidalia Re Coinsurance Agreement”).

Basis of Presentation. We prepare our financial statements in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). These principles are established primarily by the Financial Accounting Standards Board (“FASB”).

Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect financial statement balances, revenues and expenses and cash flows, as well as the disclosure of contingent assets and liabilities. Management considers available facts and knowledge of existing circumstances when establishing the estimates included in our financial statements. The most significant items that involve a greater degree of accounting estimates and actuarial determinations subject to change in the future are the valuation of investments, deferred policy acquisition costs (“DAC”), liability for future policy benefits (“LFPB”) and corresponding amounts recoverable from reinsurers, and income taxes. Estimates for these and other items are subject to change and are reassessed by management in accordance with U.S. GAAP. Actual results could differ from those estimates.

Consolidation. The accompanying consolidated financial statements include the accounts of the Company and those entities required to be consolidated under U.S. GAAP. All material intercompany profits, transactions, and balances among the consolidated entities have been eliminated.

Reclassifications. Certain reclassifications have been made to prior period amounts to conform to current period reporting classifications. These reclassifications had no impact on net income or total stockholders’ equity.

Foreign Currency Translation. Assets and liabilities of our Canadian subsidiaries are translated into U.S. dollars using year-end exchange rates, and the translation adjustments are reported in other comprehensive income (loss). Revenues and expenses of our Canadian subsidiaries are translated monthly at amounts that approximate weighted-average exchange rates.

Investments. Investments are reported on the following bases:

•
Available-for-sale (“AFS”) fixed-maturity securities, including bonds and redeemable preferred stocks, are carried at fair value.
•
Our held-to-maturity fixed-maturity security is carried at amortized cost.
•
Equity securities, including common and nonredeemable preferred stocks, are carried at fair value. Changes in fair value of equity securities are included in realized investment gains (losses) in the period in which the change occurred.
•
Trading securities, which primarily consist of bonds held by PFS Investments, are carried at fair value. Changes in fair value of trading securities are included in realized investment gains (losses) in the period in which the change occurred.
•
Policy loans are carried at unpaid principal balances, which approximate fair value.

Investment transactions are recorded on a trade-date basis. We use the specific-identification method to determine the realized gains or losses from securities transactions and report the investment gains or losses in the accompanying consolidated statements of income.

Unrealized gains and losses on AFS securities are included as a separate component of other comprehensive income (loss), except for credit loss impairment discussed below.

73

 

For an AFS security with an amortized cost that exceeds its fair value, we first determine if we intend to sell or will more likely than not be required to sell the security before the expected recovery of its amortized cost. If we intend to sell or will more likely than not be required to sell the security, then we recognize the impairment as a credit loss in our consolidated statements of income by writing down the security’s amortized cost to its fair value. If we do not intend to sell or it is not more likely than not that we will be required to sell the security before the expected recovery of its amortized cost, we recognize the portion of the impairment that is due to a credit loss, if any, in our consolidated statements of income through an allowance. The portion of the impairment that is due to factors other than a credit loss is recognized in other comprehensive income (loss) in the consolidated statements of comprehensive income (loss) as an unrealized loss. Credit losses recognized in the allowance for credit losses are reversed in situations where the estimate of credit losses on those securities has declined. When determining whether an impairment is due to a credit loss or other factors, we determine the extent to which we do not expect to recover the security’s amortized cost and record such amount, if any, as a credit loss. Factors we consider in determining whether the security’s decline in fair value is below amortized cost due to a credit loss include the magnitude of the security’s decline in fair value below its amortized cost, the financial condition, long and near-term prospects for the issuer, industry conditions and trends, rating agency actions, the payment structure of the security, likelihood of the recoverability of principal and interest, and our ability and intent to hold the security for a period of time sufficient to allow for the anticipated recovery of its amortized cost. In assessing our ability and intent to hold the security for a period of time to allow for the anticipated recovery of its amortized cost, we also consider our anticipated sources of cash to fund operating activities and share repurchases. If we do not anticipate recovering a security’s amortized cost basis, we estimate the present value of the security’s expected cash flows and recognize the difference from amortized cost (using fair value as a floor) as a credit loss.

Interest income on fixed-maturity securities is recorded when earned by determining the effective yield, which gives consideration to amortization of premiums, accretion of discounts, and any previous credit losses. Dividend income on equity securities is recorded when declared. These amounts are included in net investment income in the accompanying consolidated statements of income.

Included within fixed-maturity securities are loan-backed and asset-backed securities. Amortization of the premium or accretion of the discount uses the retrospective method. The effective yield used to determine amortization/accretion is calculated based on actual and historical projected future cash flows and updated quarterly.

Cash and Cash Equivalents. Cash and cash equivalents include cash on hand, money market instruments, and all other highly liquid investments purchased with an original or remaining maturity of three months or less at the date of acquisition.

Reinsurance. We use reinsurance extensively, utilizing yearly renewable term (“YRT”) and coinsurance agreements. Under YRT agreements, we reinsure only the mortality risk, while under coinsurance, we reinsure a proportionate part of all risks arising under the reinsured policy. Under coinsurance, the reinsurer receives a proportionate part of the premiums, less commission allowances, and is liable for a corresponding part of all benefit payments.

All reinsurance contracts in effect for the three-year period ended December 31, 2025 transfer a reasonable possibility of substantial loss to the reinsurer or are accounted for under the deposit method of accounting.

Ceded premiums are treated as a reduction to direct premiums and are recognized when due to the assuming company. Ceded claims are treated as a reduction to direct benefits and are recognized when the claim is incurred on a direct basis. Ceded policy benefit reserve changes are also treated as a reduction to benefits and claims expense and are recognized during the applicable financial reporting period.

Reinsurance premiums, commissions, expense reimbursements and ceded policy benefit reserves related to reinsured long-duration contracts are accounted for over the life of the underlying contracts using assumptions consistent with those used to account for the underlying policies. Amounts recoverable from reinsurers are estimated in a manner consistent with the claim liabilities and the LFPB associated with reinsured policies. Ceded policy benefit reserves and claims liabilities relating to insurance ceded are shown as reinsurance recoverables on the consolidated balance sheets.

We analyze and monitor the credit-worthiness of each of our reinsurance partners to minimize collection issues. For reinsurance contracts with unauthorized reinsurers, we require collateral such as letters of credit.

To the extent we receive ceding allowances to cover policy and claims administration under reinsurance contracts, these allowances are treated as a reduction to insurance commissions and expenses and are recognized when due from the assuming company. To the extent we receive ceding allowances reimbursing commissions that would otherwise be deferred, the amount of commissions deferrable will be reduced. The corresponding DAC balances are reduced on a pro rata basis by the portion of the business reinsured with reinsurance agreements that meet risk transfer provisions. The reduced DAC will result in a corresponding reduction of amortization expense.

We estimate and recognize lifetime expected credit losses for reinsurance recoverables. In estimating the allowance for expected credit losses for reinsurance recoverables, we factor in the underlying collateral for reinsurance agreements where available. Specifically, for reinsurers with underlying trust assets, we compare the reinsurance recoverables balance to the underlying trust assets that mitigate the potential exposure to credit losses. We also analyze the financial condition of the reinsurers, as determined by third-party rating agencies, to determine the probability of default for the reinsurers. We then utilize a third-party credit default study to calculate an

74

 

expected credit loss given default rate and recovery rate. The probability of default and loss given default rates are then applied to the reinsurers’ recoverable balances, while also factoring in any third-party letters of credit that support the reinsurance agreement, in order to calculate our allowance for credit losses.

DAC. We defer incremental direct costs of successful contract acquisitions that result from and are essential to the contract transaction(s) and that would not have been incurred had the contract transaction(s) not occurred. These deferred policy acquisition costs mainly include commissions, underwriting costs and certain other policy issuance expenses associated with successful contract acquisitions and renewals. All other acquisition-related costs, including unsuccessful acquisition and renewal efforts, are charged to expense as incurred. Also, administrative costs, rent, depreciation, occupancy, equipment, and all other general overhead costs are considered indirect costs and are charged to expense as incurred.

DAC for term life insurance policies is amortized on a constant-level basis over the expected term of the contracts using face amount as the unit of measure. Contracts are grouped by cohorts consistent with the grouping used in estimating the LFPB. The cohorts are defined by the legal entity that issued the policy and the year the policy was issued. Assumptions of face amounts used to amortize DAC for term life insurance policies, including persistency and mortality, are consistent with the assumptions used in estimating the LFPB.

DAC for Canadian segregated funds is amortized on a constant-level basis over the expected term of the contracts using policy count as the unit of measure. Contracts are grouped by cohorts based on the issue year of the policy.

Interest is not accrued on unamortized DAC balances, and DAC is not subject to impairment testing.

Intangible Asset. We have an indefinite-lived intangible asset on our consolidated balance sheets related to the 1989 purchase of the right to contract with the independent sales force. This asset represents the core distribution model of our business, which is our primary competitive advantage to profitably distribute term life insurance and investment and savings products on a significant scale, and as such, is considered to have an indefinite life. Any intangible asset that is deemed to have an indefinite useful life is not amortized but is subject to an annual impairment test. An impairment exists if the carrying value of the indefinite-lived intangible asset exceeds its fair value. This indefinite-lived intangible asset is supported by a significant portion of the discounted cash flows of our future business. We assessed this asset for impairment as of its annual assessment date, October 1, 2025, and determined that no impairment had occurred.

Property and Equipment. Property and equipment, which are included in other assets, are stated at cost, less accumulated depreciation. Depreciation is recognized on a straight-line basis over the asset’s estimated useful life, which is estimated as follows:

 

 

 

Estimated Useful Life

Data processing equipment and software

 

3 to 7 years

Leasehold improvements

 

Lesser of 15 years or remaining life of lease

Furniture and other equipment

 

5 to 15 years

 

Depreciation expense is included in other operating expenses in the consolidated statements of income. Depreciation expense was $19.3 million, $18.2 million, and $21.0 million for the years ended December 31, 2025, 2024, and 2023, respectively.

Property and equipment balances were as follows:

 

 

 

December 31,

 

 

 

2025

 

 

2024

 

 

 

(In thousands)

 

Data processing equipment and software

 

$

148,161

 

 

$

135,251

 

Leasehold improvements

 

 

20,071

 

 

 

18,965

 

Other, principally furniture and equipment

 

 

47,578

 

 

 

44,566

 

 

 

 

215,810

 

 

 

198,782

 

Accumulated depreciation

 

 

(176,039

)

 

 

(158,084

)

Net property and equipment

 

$

39,771

 

 

$

40,698

 

Separate Accounts. The separate accounts are primarily composed of contracts issued by the Company through its subsidiary, Primerica Life Canada, pursuant to the Insurance Companies Act (Canada). The Insurance Companies Act authorizes Primerica Life Canada to establish the separate accounts.

The separate accounts are represented by individual variable insurance contracts. Purchasers of variable insurance contracts issued by Primerica Life Canada have a direct claim to the benefits of the contract that entitles the holder to units in one or more investment funds (the “Funds”) maintained by Primerica Life Canada. The Funds invest in assets that are held for the benefit of the owners of the contracts. The Funds’ assets are administered by Primerica Life Canada and are held separate and apart from the general assets of the Company. The liabilities reflect the variable insurance contract holders’ interests in the Funds’ net assets based upon actual investment

75

 

performance of the respective Funds. Separate accounts operating results relating to contract holders’ interests are excluded from our consolidated statements of income.

These Funds primarily consist of a series of branded investment funds known as the Asset Builder Funds, a registered retirement fund known as the Strategic Retirement Income Fund (“SRIF”), and a money market fund known as the Cash Management Fund. The principal investment objective of the Asset Builder Funds is to achieve long-term growth while preserving capital. The principal objective of the SRIF is to provide a stream of investment income during retirement plus the opportunity for modest capital appreciation. The Asset Builder Funds and the SRIF use diversified portfolios of predominantly publicly-traded large cap Canadian and U.S. stocks, investment-grade corporate bonds, and Government of Canada bonds to achieve their objectives. The Cash Management Fund invests in government guaranteed short-term bonds and short-term commercial and bank papers, with the principal investment objective being the provision of interest income while maintaining liquidity and preserving capital.

Under these contract offerings, benefit payments to contract holders or their designated beneficiaries are only due upon death of the annuitant or upon reaching a specific maturity date. Benefit payments are based on the value of the contract holder’s units in the portfolio at the payment date, but are guaranteed to be no less than 75% of the contract holder’s contribution, adjusted for withdrawals. Account values are not guaranteed for withdrawn units if contract holders make withdrawals prior to the maturity dates. Maturity dates for contracts investing in the Asset Builder Funds and Cash Management Fund vary by contract and range from 10 years from the contract issuance date to December 31, 2070. Contracts investing in the SRIF mature when the policyholder reaches age 100, which is a minimum of 20 years after issue. The SRIF is designed to provide periodic retirement income payments and as such, regular withdrawals, subject to legislated minimums, are anticipated. The cumulative effects of the periodic withdrawals are expected to substantially reduce both account and minimum guaranteed values prior to maturity.

Both the asset and the liability for the separate accounts reflect the net value of the underlying assets in the portfolio as of the reporting date. Primerica Life Canada’s exposure to losses under the guarantee at the time of account maturity is limited to contract holder accounts that have declined in value more than 25%, adjusted for withdrawals since the contribution date, prior to maturity. As maturity dates are of a long-term nature, the likelihood that guarantee payments will be required at any given point is very small. Additionally, the portfolios consist of a very large number of individual contracts, further spreading the risk related to the guarantee. The length of the contract terms provides significant opportunity for the underlying portfolios to recover any short-term losses prior to maturity or the death of the contract holder. The Company has estimated the fair value associated with the market risk benefits provided by these limited guarantees to be immaterial. Furthermore, the Funds’ investment allocations are aligned with the maturity risks of the related contracts and include investments in Government Strip Bonds and floating-rate notes.

Liability for Future Policy Benefits. The LFPB on traditional life insurance products is established for future policy benefits, which includes death benefits, waiver of premium benefits and claim settlement expenses. The LFPB is calculated as the present value of expected future benefits less the present value of expected future net premiums receivable under the contracts. Net premiums are defined as the portion of the gross premiums received from policyholders that are needed to pay for all benefits.

The assumptions underlying the LFPB include mortality, persistency, disability rates, and other assumptions that reflect our best estimate based on our historical experience and modified, as necessary, to reflect non-recurring and/or anticipated trends.

The LFPB is estimated by grouping insurance policies into cohorts. Policy cohorts for the Term Life Insurance segment are based on the legal entity that issued the policy and the year the policy was issued.

The cash flows and assumptions underlying the LFPB are unlocked each quarter to reflect differences between actual and expected experience. In general, assumption changes, to the extent necessary, are expected to only occur during the third quarter when we update our experience studies. However, they may occur at any time based on emerging experience.

The impact of unlocking will be partly reflected in the current period and partly spread to future periods based on the remaining duration of the impacted cohort(s). The catch-up is retroactive back to the later of the January 1, 2021 transition date of the Company’s adoption of Accounting Standards Update No. 2018-12, Financial Services—Insurance (Topic 944) — Targeted Improvements to the Accounting for Long-Duration Contracts (the “Transition Date”) or issue date, after reinsurance recoverables and is recognized as a remeasurement gain or loss as a separate component of benefits and claims expense in the consolidated statements of income.

The ceded reserve balances included in reinsurance recoverables are calculated in the same manner as the LFPB by cohort and apply best estimate assumptions and quarterly unlocking.

The Company uses discount rates applied by country to align with local currency cash flows. Discount rates consist of yield curves that are developed using Bloomberg’s Evaluated Pricing Product based on senior unsecured fixed rate bonds ratings of A+, A or A-. The discount rate assumption is updated quarterly and the impact of remeasuring the net LFPB, after reinsurance recoverables from changes in the locked-in discount rate assumption is reflected in other comprehensive income (loss) in the consolidated statements of comprehensive income (loss).

76

 

The LFPB we establish is necessarily based on estimates, assumptions and our analysis of historical experience. Factors that could cause prospective assumptions to be different from historical experience include but are not limited to our term life product series, economic and societal trends, new pharmaceutical drugs, and the impact of regulatory changes. Our results depend upon the extent to which our actual experience is consistent with the assumptions we use in determining the LFPB. The assumptions and estimates underlying the LFPB require significant judgment and, therefore, are inherently uncertain.

Unearned and Advance Premiums. Unearned and advance premiums primarily consist of premiums received from policyholders in advance of the premiums due date. Unearned and advance premiums are deferred upon collection and recognized as premiums revenue upon the premium due date.

Other Policyholders’ Funds. Other policyholders’ funds primarily represent claim payments left on deposit with us.

Litigation. The Company is involved from time-to-time in legal disputes, regulatory inquiries and arbitration proceedings in the normal course of business. Contingent litigation-related losses are recognized when probable and can be reasonably estimated. Legal costs, such as attorneys’ fees and other litigation-related expenses that are incurred in connection with resolving litigation are expensed as incurred. These disputes are subject to uncertainties, including indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation. Due to the difficulty of estimating costs of litigation, actual costs may be substantially higher or lower than any amounts reserved.

Income Taxes. We are subject to the income tax laws of the United States, its states, municipalities, and certain unincorporated territories, as well as foreign jurisdictions, most notably Canada. These tax laws can be complex and subject to different interpretations by the taxpayer and the relevant governmental taxing authorities. In establishing a provision for income tax expense, we must make judgments and interpretations about the applicability of these tax laws. We also must make estimates about the future impact certain items will have on taxable income in the various tax jurisdictions, both domestic and foreign.

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of acquired assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are recognized subject to management’s judgment that realization is more likely than not applicable to the periods in which we expect the temporary difference will reverse.

Premium Revenues. Traditional life insurance products consist principally of those products with fixed and guaranteed premiums and benefits, and are primarily related to term products. Premiums are recognized as revenues when due.

 

Commissions and Fees. We receive commissions and fees revenue from the sale of various non-life insurance products. Commissions revenue is generally received on the sale of mutual funds and annuities. We also receive trail commissions revenue from mutual fund and annuity products based on the net asset value of shares sold by us. We, in turn, pay sales commissions to the independent sales force. We also receive investment advisory and administrative fees based on the average daily net asset value of client assets held in managed investments programs and contracts related to separate account assets issued by Primerica Life Canada. We, in turn, pay asset-based commissions to the independent sales force. We earn recordkeeping fees for transfer agent recordkeeping services that we perform on behalf of several of our mutual fund providers and custodial fees for services performed as a non-bank custodian of our clients’ retirement plan accounts. See Note 20 (Revenue from Contracts with Customers) for details related to our commissions and fees revenue recognition policies.

Benefits and Expenses. Benefit and expense items are charged to income in the period in which they are incurred. Both the change in policyholder liabilities, which is included in benefits and claims, and the amortization of deferred policy acquisition costs will vary with policyholder persistency.

Share-Based Transactions. For employee and director share-based compensation awards, we determine a grant date fair value based on the price of our publicly-traded common stock and recognize the related compensation expense, adjusted for actual forfeitures, in the consolidated statements of income on a straight-line basis over the requisite service period for the entire award. For non-employee share-based compensation, we recognize the impact during the period of performance, and the fair value of the award is measured as of the grant date, which generally occurs in the same quarter as the service period. To the extent non-employee share-based compensation is an incremental direct cost of successful acquisitions or renewals of life insurance policies that result directly from and are essential to the policy acquisition(s) and would not have been incurred had the policy acquisition(s) not occurred, we defer and amortize the fair value of the awards in the same manner as other deferred policy acquisition costs.

Earnings Per Share (“EPS”). The Company has outstanding equity awards that consist of restricted stock units (“RSUs”) and performance-based stock units (“PSUs”). The RSUs maintain non-forfeitable dividend rights that result in dividend payment obligations on a one-to-one ratio with common shares for any future dividend declarations. Unvested RSUs are deemed participating securities for purposes of calculating EPS as they maintain dividend rights.

See Note 15 (Earnings Per Share) for details related to the calculations of our basic and diluted EPS using the two-class method.

77

 

New Accounting Standards Adopted in the Current Year.

 

Accounting standard

Adoption date

Description

Effects on the financial statements

Income Taxes (Topic 740)—Improvements to Income Tax Disclosures

ASU 2023-09

 

Annual periods beginning after December 15, 2024. Early adoption is permitted. Prospective transition, although retrospective transition is permitted.

 

In December 2023, the FASB issued the ASU to increase income tax transparency through improvements primarily related to the existing rate reconciliation and income taxes paid disclosures. The amendments require (1) consistent categories and greater disaggregation of information in the rate reconciliation; and (2) income taxes paid disaggregated by jurisdiction.

 

The ASU also removes certain disclosure requirements, such as reasonably possible significant changes in the total amount of unrecognized tax benefits within 12 months of the reporting date.

 

 

The Company adopted this ASU on a retrospective basis. The Company’s revised disclosures in accordance with the new standard are primarily included in Note 13 (Income Taxes).

 

New Accounting Standards Not Yet Adopted.

 

Accounting standard

Adoption date

Description

Effects on the financial statements

Disaggregation of Income Statement Expenses

ASU 2024-03

Annual periods beginning after December 15, 2026. Early adoption is permitted. Amendments should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date or (2) retrospectively to any or all prior periods presented.

In November 2024, the FASB issued the ASU to increase disclosures about types of expenses incurred by companies. The amendments require disaggregating expense information about prescribed categories in tabular format and qualitative description of amounts not separately disaggregated.

We do not believe the adoption of the standard will have a material impact on our consolidated financial statements but it will increase the amount of expense information provided by the Company. We anticipate providing further disclosures in accordance with the new standard in our annual 2027 financial statements.

 

Recently-issued accounting guidance not discussed above is not applicable, is immaterial to our consolidated financial statements, or did not or is not expected to have a material impact on our business.

(2) Discontinued Operations

The Company reports the results of operations of a business as discontinued operations if (i) the business has been disposed of or is classified as held for sale; (ii) the disposal of the business represents a strategic shift that will have a major impact on the Company’s operations and financial results; (iii) the operations and cash flows of the business have been or will be eliminated from the ongoing operations of the Company as a result of the disposal; and (iv) the Company will not have any significant continuing involvement in the operations of the business after the disposal. The results of discontinued operations are reported in net income from discontinued operations in the consolidated statements of income for all periods presented, commencing in the period in which the business is either disposed of or is classified as held for sale, including any gain or loss recognized on closing or adjustment of the carrying amount to fair value less costs to sell, as applicable. Assets and liabilities related to a business which meets the criteria for discontinued operations are segregated in the consolidated balance sheets for the current and prior periods.

On September 30, 2024, the Company abandoned its ownership in e-TeleQuote Insurance, Inc. and subsidiaries (collectively, “e-TeleQuote”), a marketer of Medicare-related insurance products underwritten by third-party health insurance carriers to eligible Medicare beneficiaries (the “Senior Health business”), by irrevocably and permanently surrendering and relinquishing all rights in

78

 

e-TeleQuote to an independent third party without receipt of consideration and with no continuing involvement in its management or operations.

The Company determined that the disposal represented a strategic shift that would have a major impact on the Company’s operations and financial results. The disposal represented a strategic shift as the Senior Health business had been designated as a separate operating segment, and the Board of Directors (the “Board”) and management recognized that its previously expected impact on the Company’s operations and financial results would not be realized. Accordingly, the results of operations for the Senior Health business have been reported in discontinued operations for all periods presented in our consolidated statements of income. We had no assets or liabilities remaining from the Senior Health business on our consolidated balance sheets by December 31, 2024. Prior year Senior Health-related balances in the notes to the consolidated financial statements do not include balances and activities related to the discontinued operations except as otherwise noted.

We recognized an after-tax net gain on disposal of $2.0 million, which was comprised of the $95.8 million write-off of e-TeleQuote’s assets and liabilities as of the abandonment date and the recognition of a $97.8 million income tax benefit.

The major classes of line items constituting discontinued operations in the consolidated statements of income were as follows:

 

 

Year ended December 31,

 

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

 

(In thousands)

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

Commissions and fees

 

$

-

 

 

$

30,550

 

 

$

57,563

 

 

Other, net

 

 

-

 

 

 

2,056

 

 

 

9,621

 

 

Total revenues

 

 

-

 

 

 

32,606

 

 

 

67,184

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

 

Contract acquisition costs

 

 

-

 

 

 

45,594

 

 

 

55,233

 

 

Impairment of goodwill and other long-lived assets

 

 

-

 

 

 

253,607

 

 

 

-

 

 

Loss on disposition

 

 

-

 

 

 

95,787

 

 

 

-

 

 

Other operating expenses

 

 

-

 

 

 

31,956

 

 

 

32,009

 

 

Total expenses

 

 

-

 

 

 

426,944

 

 

 

87,242

 

 

Loss before income taxes

 

 

-

 

 

 

(394,338

)

 

 

(20,058

)

 

Income tax benefit

 

 

-

 

 

 

144,727

 

 

 

5,477

 

 

   Loss from discontinued operations, net of income taxes

 

$

-

 

 

$

(249,611

)

 

$

(14,581

)

 

 

Income tax benefit from discontinued operations is different from the amount determined by multiplying loss from discontinued operations before income taxes by the U.S. statutory federal tax rate of 21% for the years ended December 31, 2024 and 2023. The reconciliation for such difference follows:

 

 

 

Year ended December 31,

 

 

 

2024

 

 

2023

 

 

 

Amount

 

 

Percentage

 

 

Amount

 

 

Percentage

 

 

 

(Dollars in thousands)

 

Computed tax expense

 

$

(82,811

)

 

 

21.0

%

 

$

(4,212

)

 

 

21.0

%

State income taxes

 

 

(11,227

)

 

 

2.8

%

 

 

(1,187

)

 

 

5.9

%

Write-off of net assets upon disposal

 

 

20,115

 

 

 

(5.1

)%

 

 

-

 

 

 

—

%

Goodwill impairment loss

 

 

26,818

 

 

 

(6.8

)%

 

 

-

 

 

 

—

%

Tax benefit of abandonment

 

 

(97,786

)

 

 

24.8

%

 

 

-

 

 

 

—

%

Other

 

 

164

 

 

 

—

%

 

 

(78

)

 

0.4%

 

Total tax benefit / effective
    rate from discontinuing
   operations

 

$

(144,727

)

 

 

36.7

%

 

$

(5,477

)

 

 

27.3

%

Total operating and investing cash flows of the discontinued operations were as follows, which excludes the Company’s use of $31.8 million and $59.4 million during the years ended December 31, 2025 and 2024, respectively, of the total income tax benefit recognized on disposal to offset federal income tax payments:

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(In thousands)

 

Net cash provided by (used in) operating activities

 

$

-

 

 

$

(5,663

)

 

$

8,372

 

Net cash provided by (used in) investing activities

 

$

-

 

 

$

(21,515

)

 

$

(331

)

 

79

 

 

(3) Other Comprehensive Income (Loss)

The components of other comprehensive income (loss) (“OCI”), including the income tax expense or benefit allocated to each component, were as follows:

 

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(In thousands)

 

Foreign currency translation adjustments:

 

 

 

 

 

 

 

 

 

Change in unrealized foreign currency translation gains (losses)
   before income taxes

 

$

18,931

 

 

$

(32,532

)

 

$

10,044

 

Income tax expense (benefit) on unrealized foreign currency
  translation gains (losses)

 

 

-

 

 

 

-

 

 

 

-

 

Change in unrealized foreign currency translation gains
  (losses), net of income taxes

 

$

18,931

 

 

$

(32,532

)

 

$

10,044

 

Unrealized gain (losses) on available-for-sale securities:

 

 

 

 

 

 

 

 

 

Change in unrealized holding gains (losses) arising during
   period before income taxes

 

$

90,980

 

 

$

9,950

 

 

$

87,390

 

Income tax expense (benefit) on unrealized holding gains
  (losses) arising during period

 

 

19,045

 

 

 

2,340

 

 

 

18,751

 

Change in unrealized holding gains (losses) on available-for-sale
  securities arising during period, net of income taxes

 

 

71,935

 

 

 

7,610

 

 

 

68,639

 

 

 

 

 

 

 

 

 

 

 

Reclassification from accumulated OCI to net income for (gains)
  losses realized on available-for-sale securities

 

 

2,005

 

 

 

(562

)

 

 

2,811

 

Income tax (expense) benefit on (gains) losses reclassified from
  accumulated OCI to net income

 

 

421

 

 

 

(118

)

 

 

590

 

Reclassification from accumulated OCI to net income for (gains)
  losses realized on available-for-sale securities, net of income
  taxes

 

 

1,584

 

 

 

(444

)

 

 

2,221

 

Change in unrealized gains (losses) on available-for-sale
  securities, net of income taxes and reclassification adjustment

 

$

73,519

 

 

$

7,166

 

 

$

70,860

 

Effect of change in discount rate assumptions on the LFPB:

 

 

 

 

 

 

 

 

 

Change in effect in discount rate assumptions on the LFPB before income taxes

 

$

(113,258

)

 

$

334,035

 

 

$

(216,301

)

Income tax expense (benefit) on the effect of change in discount rate

 

 

 

 

 

 

 

 

 

 assumptions on the LFPB from accumulated OCI to net income

 

 

(23,019

)

 

 

70,116

 

 

 

(46,799

)

Change in effect in discount rate assumptions on the LFPB, net of income taxes

 

$

(90,239

)

 

$

263,919

 

 

$

(169,502

)

 

(4) Segment and Geographical Information

Segments. We have two primary operating segments — Term Life Insurance and Investment and Savings Products. The Term Life Insurance segment includes underwriting profits on our in-force book of term life insurance policies, net of reinsurance, which are underwritten by our life insurance company subsidiaries. The Investment and Savings Products segment includes retail and managed mutual funds and annuities distributed through licensed broker-dealer subsidiaries and includes segregated funds, an insurance savings product that we have underwritten in Canada through Primerica Life Canada. In the United States, we distribute mutual fund and annuity products of several third-party companies. We also earn fees for transfer agent recordkeeping functions and non-bank custodial services that we provide for certain mutual funds products we distribute. In Canada, we primarily offer a suite of mutual fund products, for which we serve as the principal distributor, managed by two well-known mutual fund companies. The Company previously reported a Senior Health segment, which consisted of the Senior Health business that was disposed of as of September 30, 2024, and is now reported in discontinued operations. Refer to Note 2 (Discontinued Operations) for additional information on the disposal.

We also have a Corporate and Other Distributed Products segment, which consists primarily of revenues and expenses related to several discontinued lines of insurance other than our core term life insurance products and the distribution of various other financial products generally underwritten or offered by third-party providers. The Company’s net investment income, interest expense incurred by the Company, and gains and losses on our invested asset portfolio are attributed entirely to the Corporate and Other Distributed Products segment.

The Company’s chief operating decision maker (“CODM”) is a function that allocates the Company’s resources and assesses the performance of the Company’s segments. We have defined the Company’s CODM as the combined function of its Chief Executive Officer and its Chief Financial Officer. The CODM uses segment net income (loss) before income taxes to evaluate segment performance and in deciding how to allocate resources. The CODM does not use a measure of segment assets to evaluate segment performance or in deciding how to allocate resources. The CODM’s evaluation of segment performance occurs on a monthly basis, and the decision of how to allocate resources occurs primarily during the periodic budget and forecasting process. The CODM

80

 

considers budget-to-actual variances and variances compared to the same period in the prior year when making decisions about allocating capital and personnel to the segments.

Income (loss) before income taxes by segment, including significant expense categories, was as follows:

 

 

 

 

 

 

 

 

 

 

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(In thousands)

 

Term Life Insurance segment:

 

 

 

 

 

 

 

 

 

Total revenues

 

$

1,819,809

 

 

$

1,768,240

 

 

$

1,693,042

 

Benefits and expenses:

 

 

 

 

 

 

 

 

 

Benefits and claims

 

 

651,544

 

 

 

635,354

 

 

 

622,084

 

Future policy benefits remeasurement (gain) loss

 

 

(37,726

)

 

 

(31,265

)

 

 

(213

)

Amortization of DAC

 

 

316,411

 

 

 

291,488

 

 

 

268,803

 

Insurance expenses

 

 

258,885

 

 

 

250,957

 

 

 

230,390

 

Insurance commissions

 

 

9,635

 

 

 

17,664

 

 

 

19,814

 

Total benefits and expenses

 

 

1,198,749

 

 

 

1,164,198

 

 

 

1,140,878

 

Income before income taxes

 

$

621,060

 

 

$

604,042

 

 

$

552,164

 

 

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(In thousands)

 

Investment and Savings Products segment:

 

 

 

 

 

 

 

 

 

Total revenues

 

$

1,248,232

 

 

$

1,056,742

 

 

$

865,265

 

Expenses:

 

 

 

 

 

 

 

 

 

Amortization of DAC

 

 

5,381

 

 

 

5,443

 

 

 

5,479

 

Insurance commissions

 

 

13,755

 

 

 

13,638

 

 

 

13,148

 

Sales commissions:

 

 

 

 

 

 

 

 

 

Sales-based

 

 

332,630

 

 

 

275,582

 

 

 

212,482

 

Asset-based

 

 

334,840

 

 

 

278,042

 

 

 

226,542

 

Other operating expenses:

 

 

 

 

 

 

 

 

 

Fees based on client asset values

 

 

47,408

 

 

 

40,260

 

 

 

32,886

 

Fees based on fee-generating positions

 

 

44,309

 

 

 

42,839

 

 

 

41,483

 

Other expenses

 

 

114,386

 

 

 

98,693

 

 

 

90,419

 

Total expenses

 

 

892,709

 

 

 

754,497

 

 

 

622,439

 

Income before income taxes

 

$

355,523

 

 

$

302,245

 

 

$

242,826

 

 

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(In thousands)

 

Corporate and Other Distributed Products segment:

 

 

 

 

 

 

 

 

 

Total revenues

 

$

223,672

 

 

$

264,161

 

 

$

190,200

 

Benefits and expenses:

 

 

 

 

 

 

 

 

 

Benefits and claims

 

 

14,383

 

 

 

12,809

 

 

 

20,895

 

Future policy benefits remeasurement (gain) loss

 

 

337

 

 

 

5,345

 

 

 

(171

)

Amortization of DAC

 

 

1,111

 

 

 

1,205

 

 

 

1,534

 

Insurance expenses

 

 

4,582

 

 

 

4,662

 

 

 

5,070

 

Insurance commissions

 

 

(395

)

 

 

706

 

 

 

1,260

 

Sales commissions

 

 

19,450

 

 

 

19,625

 

 

 

18,420

 

Interest expense

 

 

23,958

 

 

 

25,034

 

 

 

26,594

 

Other operating expenses

 

 

162,265

 

 

 

161,815

 

 

 

139,850

 

Total benefits and expenses

 

 

225,691

 

 

 

231,201

 

 

 

213,452

 

Income (loss) before income taxes

 

$

(2,019

)

 

$

32,960

 

 

$

(23,252

)

 

 

81

 

The following table reconciles segment revenues to total revenues in the consolidated statements of income:

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(In thousands)

 

Revenues:

 

 

 

 

 

 

 

 

 

Term Life Insurance segment

 

$

1,819,809

 

 

$

1,768,240

 

 

$

1,693,042

 

Investment and Savings Products segment

 

 

1,248,232

 

 

 

1,056,742

 

 

 

865,265

 

Corporate and Other Distributed Products segment

 

 

223,672

 

 

 

264,161

 

 

 

190,200

 

Total revenues

 

$

3,291,713

 

 

$

3,089,143

 

 

$

2,748,507

 

The following table reconciles segment income (loss) before income taxes to income from continuing operations before income taxes in the consolidated statements of income:

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(In thousands)

 

Income (loss) from continuing operations before income taxes:

 

 

 

 

 

 

 

 

 

Term Life Insurance segment

 

$

621,060

 

 

$

604,042

 

 

$

552,164

 

Investment and Savings Products segment

 

 

355,523

 

 

 

302,245

 

 

 

242,826

 

Corporate and Other Distributed Products segment

 

 

(2,019

)

 

 

32,960

 

 

 

(23,252

)

Total income from continuing operations before income taxes

 

$

974,564

 

 

$

939,247

 

 

$

771,738

 

 

In April 2024, the Company executed agreements providing for the receipt of proceeds from certain claims filed by the Company under a Representation and Warranty insurance policy negotiated and purchased in connection with the acquisition of e-TeleQuote on July 1, 2021. The claims made by the Company involved breaches of certain representations and warranties relating to the pre-acquisition financial statements made by the sellers of e-TeleQuote in connection with the acquisition. The Company recognized a gain during the year ended December 31, 2024 of $50.0 million, which is equal to the aggregate proceeds received in May 2024 from the third-party insurers under the policy, reflecting the full coverage under the policy. The Company recognized this gain in Corporate and Other Distributed Products segment revenues as it resulted from a corporate investment decision to purchase the insurance policy. On a consolidated basis, this gain is included in Other, net revenue in the accompanying consolidated statements of income.

The Company recorded corporate restructuring charges of $2.8 million for the year ended December 31, 2024 associated with the decision to exit the Senior Health business, which are included in the Corporate and Other Distributed Products segment’s Other operating expenses. There were no corporate restructuring charges recorded during the years ended December 31, 2025 or 2023.

 

Insurance expenses and other operating expenses directly attributable to the Term Life Insurance and Investment and Savings Products segments are recorded directly to the applicable segment. Other operating expenses consists primarily of employee compensation, technology and communications costs, various independent sales force-related costs, non-bank custodial and transfer agent recordkeeping administrative costs, outsourcing and professional fees, and other corporate and administrative fees and expenses. We allocate certain other revenue and operating expenses that are not directly attributable to a specific operating segment using methods expected to reasonably measure the benefit received by each reporting segment. Such methods include recorded usage, revenue distribution, and independent sales force representative distribution. These allocated items include fees charged for access to Primerica Online (“POL”) and costs incurred for technology, independent sales force support, occupancy and other general and administrative costs. Costs that are not directly charged or allocated to our two primary operating segments are included in the Corporate and Other Distributed Products segment.

Geographical Information. Results of operations by country and long-lived assets — primarily tangible assets reported in other assets in our consolidated balance sheets — from continuing operations were as follows:

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(In thousands)

 

Revenues by country:

 

 

 

 

 

 

 

 

 

United States

 

$

2,850,954

 

 

$

2,694,323

 

 

$

2,396,774

 

Canada

 

 

440,759

 

 

 

394,820

 

 

 

351,733

 

Total revenues

 

$

3,291,713

 

 

$

3,089,143

 

 

$

2,748,507

 

 

 

 

December 31, 2025

 

 

December 31, 2024

 

 

 

(In thousands)

 

Long-lived assets by country:

 

 

 

 

 

 

United States

 

$

37,712

 

 

$

38,064

 

Canada

 

 

2,059

 

 

 

2,634

 

Total long-lived assets

 

$

39,771

 

 

$

40,698

 

 

82

 

(5) Investments

AFS Securities. The amortized cost, gross unrealized gains and losses, and fair value of AFS fixed-maturity securities were as follows:

 

 

 

December 31, 2025

 

 

 

Amortized cost

 

 

Gross unrealized gains

 

 

Gross unrealized losses

 

 

Fair value

 

 

 

(In thousands)

 

Securities available-for-sale, carried at fair value:

 

 

 

 

 

 

 

 

 

 

 

 

Fixed-maturity securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agencies

 

$

9,814

 

 

$

65

 

 

$

(137

)

 

$

9,742

 

Foreign government

 

 

173,732

 

 

 

1,587

 

 

 

(6,286

)

 

 

169,033

 

States and political subdivisions

 

 

136,996

 

 

 

953

 

 

 

(11,017

)

 

 

126,932

 

Corporates

 

 

2,042,691

 

 

 

27,386

 

 

 

(74,204

)

 

 

1,995,873

 

Residential mortgage-backed securities

 

 

687,149

 

 

 

5,892

 

 

 

(47,176

)

 

 

645,865

 

Commercial mortgage-backed securities

 

 

92,035

 

 

 

120

 

 

 

(7,123

)

 

 

85,032

 

Other asset-backed securities

 

 

236,201

 

 

 

816

 

 

 

(4,248

)

 

 

232,769

 

Total fixed-maturity securities

 

$

3,378,618

 

 

$

36,819

 

 

$

(150,191

)

 

$

3,265,246

 

 

 

 

December 31, 2024

 

 

 

Amortized cost

 

 

Gross unrealized gains

 

 

Gross unrealized losses

 

 

Fair value

 

 

 

(In thousands)

 

Securities available-for-sale, carried at fair value:

 

 

 

 

 

 

 

 

 

 

 

 

Fixed-maturity securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agencies

 

$

9,822

 

 

$

7

 

 

$

(326

)

 

$

9,503

 

Foreign government

 

 

171,033

 

 

 

1,597

 

 

 

(6,206

)

 

 

166,424

 

States and political subdivisions

 

 

128,359

 

 

 

96

 

 

 

(14,886

)

 

 

113,569

 

Corporates

 

 

1,929,350

 

 

 

11,853

 

 

 

(116,095

)

 

 

1,825,108

 

Residential mortgage-backed securities

 

 

552,611

 

 

 

536

 

 

 

(66,590

)

 

 

486,557

 

Commercial mortgage-backed securities

 

 

110,426

 

 

 

87

 

 

 

(11,068

)

 

 

99,445

 

Other asset-backed securities

 

 

250,882

 

 

 

1,396

 

 

 

(6,758

)

 

 

245,520

 

Total fixed-maturity securities

 

$

3,152,483

 

 

$

15,572

 

 

$

(221,929

)

 

$

2,946,126

 

All of our AFS mortgage- and asset-backed securities represent beneficial interests in variable interest entities (“VIEs”). We are not the primary beneficiary of these VIEs because we do not have the power to direct the activities that most significantly impact the entities’ economic performance. The maximum exposure to loss as a result of our involvement in these VIEs equals the carrying value of the securities.

The scheduled maturity distribution of the AFS fixed-maturity securities portfolio as of December 31, 2025 was as follows:

 

 

 

Amortized cost

 

 

Fair value

 

 

 

(In thousands)

 

Due in one year or less

 

$

250,584

 

 

$

250,086

 

Due after one year through five years

 

 

820,102

 

 

 

813,822

 

Due after five years through 10 years

 

 

724,470

 

 

 

701,884

 

Due after 10 years

 

 

568,077

 

 

 

535,788

 

 

 

 

2,363,233

 

 

 

2,301,580

 

Mortgage- and asset-backed securities

 

 

1,015,385

 

 

 

963,666

 

  Total AFS fixed-maturity securities

 

$

3,378,618

 

 

$

3,265,246

 

 

Expected maturities may differ from scheduled contractual maturities because issuers of securities may have the right to call or prepay obligations with or without call or prepayment penalties.

 

Held-to-maturity Security. Concurrent with the execution of the Vidalia Re Coinsurance Agreement, Vidalia Re entered into a Surplus Note Purchase Agreement (the “Surplus Note Purchase Agreement”) with Hannover Life Reassurance Company of America and certain of its affiliates (collectively, “Hannover Re”) and a newly formed limited liability company (the “LLC”) owned by a third- party service provider. Under the Surplus Note Purchase Agreement, Vidalia Re issued a surplus note (the “Surplus Note”) to the LLC in exchange for a credit enhanced note from the LLC with an equal principal amount (the “LLC Note”). The principal amounts of the Surplus Note and the LLC Note have reached their peaks and are expected to decrease over time to coincide with the amount of policy reserves contractually supported under the Vidalia Re Coinsurance Agreement. Both the Surplus Note and the LLC Note mature on December 31, 2030 and bear interest at an annual interest rate of 4.50%. The LLC Note is guaranteed by Hannover Re through a credit enhancement feature in exchange for a fee, which is reflected in interest expense in our consolidated statements of income.

The LLC is a VIE as its owner does not have an equity investment at risk that is sufficient to permit the LLC to finance its activities without Vidalia Re or Hannover Re. The Parent Company, Primerica Life, and Vidalia Re share the power to direct the activities of

83

 

the LLC with Hannover Re, but they do not have the obligation to absorb losses or the right to receive any residual returns related to the LLC’s primary risks or sources of variability. Through the credit enhancement feature, Hannover Re is the ultimate risk taker in this transaction and bears the obligation to absorb the LLC’s losses in the event of a Surplus Note default in exchange for the fee. Accordingly, the Company is not the primary beneficiary of the LLC and does not consolidate the LLC within its consolidated financial statements. Hannover Re’s financial strength rating by A.M. Best was A+ as of December 31, 2025.

The LLC Note is classified as a held-to-maturity debt security in the Company’s invested asset portfolio as we have the positive intent and ability to hold the security until maturity. As of December 31, 2025, the LLC Note had an estimated unrealized holding loss of $22.3 million based on its amortized cost and estimated fair value. The estimated fair value of the LLC Note is expected to be at least equal to the estimated fair value of the offsetting Surplus Note. See Note 6 (Fair Value of Financial Instruments) for information on the fair value of our financial instruments and see Note 12 (Debt) for more information on the Surplus Note.

As of December 31, 2025, no credit losses have been recognized on the LLC Note.

Investments on Deposit with Governmental Authorities. As required by law, we have investments on deposit with governmental authorities and banks for the protection of policyholders. The fair value of investments on deposit was $8.2 million and $8.0 million as of December 31, 2025 and 2024, respectively.

Securities Lending Transactions. We participate in securities lending transactions with broker-dealers and other financial institutions to increase investment income with minimal risk. We require minimum collateral on securities loaned equal to 102% of the fair value of the loaned securities. We accept collateral in the form of securities, which we are not able to sell or encumber, and to the extent the collateral declines in value below 100%, we require additional collateral from the borrower. Any securities collateral received is not reflected on our consolidated balance sheets. We also accept collateral in the form of cash, all of which we reinvest. For loans involving unrestricted cash collateral, the collateral is reported as an asset with a corresponding liability representing our obligation to return the collateral. We continue to carry the loaned securities as invested assets in our consolidated balance sheets during the terms of the loans, and we do not report them as sales. Cash collateral received and reinvested was $84.9 million and $86.0 million as of December 31, 2025 and 2024, respectively.

Net Investment Income. The components of net investment income were as follows:

 

 

 

Year ended December 31,

 

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

 

(In thousands)

Fixed-maturity securities (available-for-sale)

 

$

139,207

 

 

$

125,411

 

 

$

108,762

 

 

Fixed-maturity security (held-to-maturity)

 

 

58,043

 

 

 

62,652

 

 

 

65,474

 

 

Equity securities

 

 

1,268

 

 

 

1,363

 

 

 

1,523

 

 

Policy loans and other invested assets

 

 

2,743

 

 

 

1,545

 

 

 

1,297

 

 

Cash, cash equivalents and short-term investments

 

 

24,884

 

 

 

25,901

 

 

 

23,601

 

 

Total return on deposit asset underlying 10% coinsurance
  agreement (1)

 

 

7,331

 

 

 

9,695

 

 

 

9,338

 

 

  Gross investment income

 

 

233,476

 

 

 

226,567

 

 

 

209,995

 

 

Investment expenses

 

 

(8,281

)

 

 

(8,414

)

 

 

(8,684

)

 

   Investment income net of investment expenses

 

 

225,195

 

 

 

218,153

 

 

 

201,311

 

 

Interest expense on surplus note

 

 

(58,043

)

 

 

(62,652

)

 

 

(65,474

)

 

    Net investment income

 

$

167,152

 

 

$

155,501

 

 

$

135,837

 

 

 

(1)
Includes $0.6 million, $1.0 million, and $(0.4) million of net gains (losses) recognized for the change in fair value of the deposit asset underlying the 10% coinsurance agreement for the years ended December 31, 2025, 2024, and 2023, respectively.

84

 

The components of investment gains (losses), as well as details on gross realized investment gains (losses) and other investment gains (losses) were as follows:

 

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(In thousands)

 

Realized investment gains (losses):

 

 

 

 

 

 

 

 

 

Gross gains from sales of available-for-sale fixed maturity securities

 

$

880

 

 

$

1,253

 

 

$

504

 

Gross losses from sales of available-for-sale fixed maturity securities

 

 

(2,141

)

 

 

(238

)

 

 

(1,149

)

Gross losses from sales of equity securities

 

 

(776

)

 

 

-

 

 

 

-

 

Net realized investment gains (losses):

 

 

(2,037

)

 

 

1,015

 

 

 

(645

)

Other investment gains (losses):

 

 

 

 

 

 

 

 

 

Credit losses impairment of available-for-sale securities

 

 

(744

)

 

 

(453

)

 

 

(2,166

)

Market gains (losses) recognized in net income during the period on equity securities

 

 

1,661

 

 

 

1,629

 

 

 

(3,137

)

Gains (losses) from equity method investments

 

 

252

 

 

 

19

 

 

 

12

 

Gains (losses) from bifurcated options

 

 

31

 

 

 

-

 

 

 

13

 

Gains (losses) on trading securities

 

 

21

 

 

 

26

 

 

 

27

 

Other investment gains (losses):

 

 

1,221

 

 

 

1,221

 

 

 

(5,251

)

Investment gains (losses)

 

$

(816

)

 

$

2,236

 

 

$

(5,896

)

 

The proceeds from sales or other redemptions of AFS securities were as follows:

 

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(In thousands)

 

Proceeds from sales or other redemptions

 

$

479,041

 

 

$

428,373

 

 

$

373,254

 

 

 

Accrued Interest. Accrued interest is recorded in accordance with the contractual interest schedule of the underlying security. In the event of default, the Company’s policy is to no longer accrue interest on these securities and to write off any remaining accrued interest. As a result, the Company has made the policy election to not record an allowance for credit losses on accrued interest.

 

Credit Losses for AFS Fixed-maturity Securities. The following tables summarize all AFS securities in an unrealized loss position for which an allowance for credit losses has not been recorded as of December 31, 2025 and 2024, aggregated by major security type and by length of time such securities have continuously been in an unrealized loss position:

 

 

 

December 31, 2025

 

 

 

Less than 12 months

12 months or longer

 

 

 

Fair value

 

 

Unrealized losses

 

 

Fair value

 

 

Unrealized losses

 

 

 

(In thousands)

 

Fixed-maturity securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agencies

 

$

-

 

 

$

-

 

 

$

5,867

 

 

$

(137

)

Foreign government

 

 

41,809

 

 

 

(1,307

)

 

 

59,087

 

 

 

(4,979

)

States and political subdivisions

 

 

6,321

 

 

 

(159

)

 

 

98,912

 

 

 

(10,858

)

Corporates

 

 

233,831

 

 

 

(3,593

)

 

 

901,906

 

 

 

(70,611

)

Residential mortgage-backed securities

 

 

72,537

 

 

 

(463

)

 

 

316,741

 

 

 

(46,713

)

Commercial mortgage-backed securities

 

 

2,471

 

 

 

(26

)

 

 

71,490

 

 

 

(7,097

)

Other asset-backed securities

 

 

24,950

 

 

 

(485

)

 

 

88,159

 

 

 

(3,763

)

Total fixed-maturity securities

 

$

381,919

 

 

$

(6,033

)

 

$

1,542,162

 

 

$

(144,158

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2024

 

 

 

Less than 12 months

12 months or longer

 

 

 

Fair value

 

 

Unrealized losses

 

 

Fair value

 

 

Unrealized losses

 

 

 

(In thousands)

 

Fixed-maturity securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agencies

 

$

3,529

 

 

$

(19

)

 

$

5,660

 

 

$

(307

)

Foreign government

 

 

15,044

 

 

 

(139

)

 

 

83,923

 

 

 

(6,067

)

States and political subdivisions

 

 

9,933

 

 

 

(350

)

 

 

99,389

 

 

 

(14,536

)

Corporates

 

 

398,232

 

 

 

(9,422

)

 

 

1,000,264

 

 

 

(106,673

)

Residential mortgage-backed securities

 

 

106,276

 

 

 

(2,605

)

 

 

327,850

 

 

 

(63,985

)

Commercial mortgage-backed securities

 

 

2,005

 

 

 

(1

)

 

 

89,876

 

 

 

(11,067

)

Other asset-backed securities

 

 

15,086

 

 

 

(81

)

 

 

114,077

 

 

 

(6,677

)

Total fixed-maturity securities

 

$

550,105

 

 

$

(12,617

)

 

$

1,721,039

 

 

$

(209,312

)

 

85

 

The amortized cost of AFS securities with a cost basis in excess of their fair values were $2,074.3 million and $2,493.1 million as of December 31, 2025 and 2024, respectively.

The allowance for credit losses was $0.7 million as of December 31, 2025. No allowance for credit losses was recorded as of December 31, 2024. Substantially all of the unrealized losses were the result of change in market interest rates compared to the date the securities were acquired rather than the credit quality of the securities, and we have no present intention to dispose of them.

For the years ended December 31, 2025, 2024, and 2023, we recorded $0.7 million, $0.5 million, and $2.2 million, respectively, for credit (gains) losses in the consolidated statements of income on AFS securities. We recognize credit losses on securities due to: (i) our intent to sell them (unless the securities are sold and the loss is realized during the same quarter when we designate the securities as intend to sell); (ii) adverse credit events indicating that we will not receive the security’s contractual cash flows when contractually due, such as news of an impending filing for bankruptcy; (iii) analyses of the issuer’s most recent financial statements or other information indicating that significant liquidity deficiencies, significant losses and large declines in capitalization exist; and (iv) analyses of rating agency information for issuances with severe ratings downgrades indicating a significant increase in the possibility of default.

 

The rollforward of the allowance for credit losses on AFS securities was as follows:

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(In thousands)

 

Allowance for credit losses, beginning of period

 

$

-

 

 

$

-

 

 

$

-

 

Additions to the allowance for credit losses on securities for which credit losses were
  not previously recorded

 

 

866

 

 

 

-

 

 

 

-

 

Additional increases (decreases) to the allowance for credit losses on securities that
  had an allowance recorded in a previous period (i.e., quarter)

 

 

(122

)

 

 

-

 

 

 

-

 

Write-offs charged against the allowance, if any

 

 

-

 

 

 

-

 

 

 

-

 

Allowance for credit losses, end of period

 

$

744

 

 

$

-

 

 

$

-

 

Derivatives. We have a deferred loss related to closed forward contracts, which were settled several years ago, that were used to mitigate our exposure to foreign currency exchange rates that resulted from the net investment in our Canadian operations. The amount of deferred loss included in accumulated other comprehensive income (loss) was $26.4 million as of each of December 31, 2025 and 2024. These deferred losses will not be recognized until such time as we sell or substantially liquidate our Canadian operations, although we have no such intention.

(6) Fair Value of Financial Instruments

Fair value is the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Invested assets recorded at fair value are measured and classified in accordance with a three-tier fair value hierarchy based on observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our view of market assumptions in the absence of observable market information. We classify and disclose all invested assets carried at fair value in one of the following three levels:

•
Level 1. Quoted prices for identical instruments in active markets. Level 1 consists of financial instruments whose value is based on quoted market prices in active markets, such as cash, cash equivalents in money market funds, exchange-traded common stocks and actively traded mutual fund investments;
•
Level 2. Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets. Level 2 includes those financial instruments that are valued using industry-standard pricing methodologies, models or other valuation methodologies. Various inputs are considered in deriving the fair value of the underlying financial instrument, including interest rate and yield curves, credit spread, and foreign exchange rates. All significant inputs are observable, or derived from observable information in the marketplace or are supported by observable levels at which transactions are executed in the marketplace. Financial instruments in this category could include: cash equivalents and short-term investments in U.S. treasury securities; certain public and private corporate fixed-maturity and equity securities; government or agency securities; and certain mortgage- and asset-backed securities; and
•
Level 3. Valuations derived from valuation techniques in which one or more significant inputs are unobservable. Level 3 consists of financial instruments whose fair value is estimated based on industry-standard pricing methodologies and models using significant inputs not based on, nor corroborated by, readily available market information. Valuations for this category primarily consist of non-binding broker quotes. Financial instruments in this category could include less liquid mortgage- and asset-backed securities and equity securities.

As of each reporting period, all assets and liabilities recorded at fair value are classified in their entirety based on the lowest level of input (Level 3 being the lowest in the hierarchy) that is significant to the fair value measurement. Significant levels of estimation and

86

 

judgment are required to determine the fair value of certain of our investments. The factors influencing these estimations and judgments are subject to change in subsequent reporting periods.

The estimated fair value and hierarchy classifications for assets and liabilities that are measured at fair value on a recurring basis were as follows:

 

 

 

December 31, 2025

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

 

 

(In thousands)

 

Fair value assets:

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale fixed-maturity securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agencies

 

$

-

 

 

$

9,742

 

 

$

-

 

 

$

9,742

 

Foreign government

 

 

-

 

 

 

169,033

 

 

 

-

 

 

 

169,033

 

States and political subdivisions

 

 

-

 

 

 

126,932

 

 

 

-

 

 

 

126,932

 

Corporates

 

 

3,748

 

 

 

1,992,125

 

 

 

-

 

 

 

1,995,873

 

Mortgage-and asset-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage-backed securities

 

 

-

 

 

 

645,865

 

 

 

-

 

 

 

645,865

 

Commercial mortgage-backed securities

 

 

-

 

 

 

83,456

 

 

 

1,576

 

 

 

85,032

 

Other asset-backed securities

 

 

-

 

 

 

232,769

 

 

 

-

 

 

 

232,769

 

Total available-for-sale fixed-maturity securities

 

 

3,748

 

 

 

3,259,922

 

 

 

1,576

 

 

 

3,265,246

 

Equity securities

 

 

26,433

 

 

 

-

 

 

 

-

 

 

 

26,433

 

Trading securities

 

 

-

 

 

 

12,801

 

 

 

-

 

 

 

12,801

 

Cash and cash equivalents

 

 

756,227

 

 

 

-

 

 

 

-

 

 

 

756,227

 

Separate accounts

 

 

-

 

 

 

2,281,520

 

 

 

-

 

 

 

2,281,520

 

Total fair value assets

 

$

786,408

 

 

$

5,554,243

 

 

$

1,576

 

 

$

6,342,227

 

Fair value liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Separate accounts

 

$

-

 

 

$

2,281,520

 

 

$

-

 

 

$

2,281,520

 

Total fair value liabilities

 

$

-

 

 

$

2,281,520

 

 

$

-

 

 

$

2,281,520

 

 

 

December 31, 2024

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

 

 

(In thousands)

 

Fair value assets:

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale fixed-maturity securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agencies

 

$

-

 

 

$

9,503

 

 

$

-

 

 

$

9,503

 

Foreign government

 

 

-

 

 

 

166,424

 

 

 

-

 

 

 

166,424

 

States and political subdivisions

 

 

-

 

 

 

113,569

 

 

 

-

 

 

 

113,569

 

Corporates

 

 

3,787

 

 

 

1,821,321

 

 

 

-

 

 

 

1,825,108

 

Mortgage-and asset-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage-backed securities

 

 

-

 

 

 

486,557

 

 

 

-

 

 

 

486,557

 

Commercial mortgage-backed securities

 

 

-

 

 

 

99,445

 

 

 

-

 

 

 

99,445

 

Other asset-backed securities

 

 

-

 

 

 

245,520

 

 

 

-

 

 

 

245,520

 

Total available-for-sale securities

 

 

3,787

 

 

 

2,942,339

 

 

 

-

 

 

 

2,946,126

 

Equity securities

 

 

24,598

 

 

 

1,003

 

 

 

1,543

 

 

 

27,144

 

Trading securities

 

 

-

 

 

 

3,011

 

 

 

-

 

 

 

3,011

 

Cash and cash equivalents

 

 

687,821

 

 

 

-

 

 

 

-

 

 

 

687,821

 

Separate accounts

 

 

-

 

 

 

2,209,287

 

 

 

-

 

 

 

2,209,287

 

Total fair value assets

 

$

716,206

 

 

$

5,155,640

 

 

$

1,543

 

 

$

5,873,389

 

Fair value liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Separate accounts

 

$

-

 

 

$

2,209,287

 

 

$

-

 

 

$

2,209,287

 

Total fair value liabilities

 

$

-

 

 

$

2,209,287

 

 

$

-

 

 

$

2,209,287

 

 

In estimating fair value of our investments, we use a third-party pricing service for approximately all of our securities that are measured at fair value on a recurring basis. The remaining securities are primarily thinly traded securities, such as private placements, and are valued using models based on observable inputs on public corporate spreads having similar characteristics (e.g., sector, average life and quality rating), liquidity and yield based on quality rating, average life and U.S. Treasury yields. All observable data inputs are corroborated by independent third-party data. We also corroborate pricing information provided by our third-party pricing service by performing a review of selected securities. Our review activities include: obtaining detailed information about the assumptions, inputs and methodologies used in pricing the security; documenting this information; and corroborating it by comparison to independently obtained prices and/or independently developed pricing methodologies.

Furthermore, we perform internal reasonableness assessments on fair value determinations within our portfolio throughout the year and as of year-end, including pricing variance analyses and comparisons to alternative pricing sources and benchmark returns. If a fair

87

 

value appears unusual relative to these assessments, we will re-examine the inputs and may challenge a fair value assessment made by the pricing service. If there is a known pricing error, we will request a reassessment by the pricing service. If the pricing service is unable to perform the reassessment on a timely basis, we will determine the appropriate price by requesting a reassessment from an alternative pricing service or other qualified source as necessary. We do not adjust quotes or prices except in a rare circumstance to resolve a known error.

Because many fixed-maturity securities do not trade on a daily basis, third-party pricing services generally determine fair value using industry-standard methodologies, which vary by asset class. For corporates, governments, and agency securities, these methodologies include developing prices by incorporating available market information such as U.S. Treasury curves, benchmarking of similar securities including new issues, sector groupings, quotes from market participants and matrix pricing. Observable information is compiled and integrates relevant credit information, perceived market movements and sector news. Additionally, security prices are periodically back-tested to validate and/or refine models as conditions warrant. Market indicators and industry and economic events are also monitored as triggers to obtain additional data. For certain structured securities (such as mortgage- and asset-backed securities) with limited trading activity, third-party pricing services generally use industry-standard pricing methodologies that incorporate market information, such as index prices or discounting expected future cash flows based on underlying collateral, and quotes from market participants, to estimate fair value. If one or more of these input measures are not deemed observable for a particular security, the security will be classified as Level 3 in the fair value hierarchy.

Where specific market information is unavailable for certain securities, pricing models produce estimates of fair value primarily using Level 2 inputs along with certain Level 3 inputs. These models include matrix pricing. The pricing matrix uses current U.S. Treasury rates and credit spreads received from third-party sources to estimate fair value. The credit spreads incorporate the issuer’s industry- or issuer-specific credit characteristics and the security’s time to maturity, if warranted. Remaining unpriced securities are valued using an estimate of fair value based on indicative market prices that include significant unobservable inputs not based on, nor corroborated by, market information, including the utilization of non-binding broker quotes.

The roll-forward of the Level 3 assets measured at fair value on a recurring basis was as follows:

 

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

 

(In thousands)

 

Level 3 assets, beginning of period

 

$

1,543

 

 

$

2,144

 

Net unrealized gains (losses) included in other
comprehensive income (loss)

 

 

-

 

 

 

4

 

Investment gains (losses) and accretion (amortization)
   recognized in earnings

 

 

(714

)

 

 

(101

)

Sales

 

 

(829

)

 

 

-

 

Transfers into Level 3

 

 

1,576

 

 

 

-

 

Transfers out of Level 3

 

 

-

 

 

 

(504

)

Level 3 assets, end of period

 

$

1,576

 

 

$

1,543

 

 

We obtain independent pricing quotes based on observable inputs as of the end of the reporting period for all securities in Level 2. Those inputs include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, market bids/offers, quoted prices for similar instruments in markets that are not active, and other relevant data. We monitor these inputs for market indicators, industry and economic events. There were no material transfers between Level 1 and Level 3 during the years ended December 31, 2025 and 2024.

The carrying values and estimated fair values of our financial instruments were as follows:

 

 

 

December 31, 2025

 

 

December 31, 2024

 

 

 

Carrying value

 

 

Estimated fair value

 

 

Carrying value

 

 

Estimated fair value

 

 

 

(In thousands)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Fixed-maturity securities (available-for-sale)

 

$

3,265,246

 

 

$

3,265,246

 

 

$

2,946,126

 

 

$

2,946,126

 

Fixed-maturity security (held-to-maturity) (1)

 

 

1,175,380

 

 

 

1,153,047

 

 

 

1,303,880

 

 

 

1,227,428

 

Equity securities

 

 

26,433

 

 

 

26,433

 

 

 

27,144

 

 

 

27,144

 

Trading securities

 

 

12,801

 

 

 

12,801

 

 

 

3,011

 

 

 

3,011

 

Policy loans (1)

 

 

47,583

 

 

 

47,583

 

 

 

40,884

 

 

 

40,884

 

Deposit asset underlying 10% coinsurance agreement (1)

 

 

131,418

 

 

 

131,418

 

 

 

158,913

 

 

 

158,913

 

Separate accounts

 

 

2,281,520

 

 

 

2,281,520

 

 

 

2,209,287

 

 

 

2,209,287

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Note payable (2) (3)

 

 

595,315

 

 

 

543,461

 

 

 

594,512

 

 

 

513,862

 

Surplus note (1) (2)

 

 

1,175,119

 

 

 

1,150,995

 

 

 

1,303,556

 

 

 

1,225,708

 

Separate accounts

 

 

2,281,520

 

 

 

2,281,520

 

 

 

2,209,287

 

 

 

2,209,287

 

 

88

 

(1)
Classified as a Level 3 fair value measurement.
(2)
Carrying value amounts shown are net of unamortized issuance costs.
(3)
Classified as a Level 2 fair value measurement.

 

The fair values of financial instruments presented above are estimates of the fair values at a specific point in time using various sources and methods, including market quotations and a complex matrix system that takes into account issuer sector, quality, and spreads in the current marketplace.

Financial Instruments Recognized at Fair Value in the Balance Sheets. Estimated fair values of investments in AFS securities are principally a function of current spreads and interest rates that are corroborated by independent third-party data. Therefore, the fair values presented are indicative of amounts we could realize or settle at the respective balance sheet date. We do not necessarily intend to dispose of or liquidate such instruments prior to maturity. Trading securities and equity securities, including common and nonredeemable preferred stocks, are carried at fair value. Segregated funds in separate accounts are carried at the underlying value of the variable insurance contracts, which is fair value.

The carrying amounts for cash and cash equivalents, trade receivables, accrued investment income, accounts payable, cash collateral and payables for security transactions approximate their fair values due to the short-term nature of these instruments. Consequently, such financial instruments are not included in the above table.

(7) Reinsurance

We use reinsurance extensively, which has a significant effect on our results of operations. Reinsurance arrangements do not relieve us of our primary obligation to the policyholder. Our reinsurance contracts typically do not have a fixed term. In general, the reinsurers’ ability to terminate coverage for existing cessions is limited to such circumstances as material breach of contract or nonpayment of premiums by the ceding company. Our reinsurance contracts generally contain provisions intended to provide the ceding company with the ability to cede future business on a basis consistent with historical terms. However, either party may terminate any of the contracts with respect to the future business upon appropriate notice to the other party. Generally, the reinsurance contracts do not limit the overall amount of the loss that can be incurred by the reinsurer.

Our policy is to limit the amount of life insurance retained on the life of any one person to $1 million. To limit our exposure with any one reinsurer, we monitor the concentration of credit risk we have with our reinsurance counterparties, as well as their financial condition.

Reinsurance recoverables represents ceded policy benefit reserve balances, ceded claim liabilities, and ceded claims paid that have not been reimbursed. The amounts of ceded claim liabilities included in reinsurance recoverables that we paid and which are recoverable from those reinsurers were $43.3 million and $39.1 million as of December 31, 2025 and 2024, respectively. Benefits and claims ceded to reinsurers for 2025, 2024, and 2023 were $1,368.9 million, $1,439.4 million, and $1,376.4 million, respectively.

In connection with our corporate reorganization that included an initial public offering (“IPO”) of our common stock by Citigroup, Inc. (“Citigroup”), Primerica Life, Primerica Life Canada and NBLIC entered into significant coinsurance transactions (the “IPO coinsurance agreements”) on March 30, 2010 with three insurance companies then affiliated with Citigroup (collectively, the “IPO coinsurers”). Under the IPO coinsurance agreements, we ceded between 80% and 90% of the risks and rewards of our term life insurance policies in force at year-end 2009. Because these agreements were part of a business reorganization among entities under common control, they did not generate any deferred gain or loss upon their execution. Concurrent with signing these agreements, we transferred the corresponding account balances in respect of the coinsured policies along with the assets to support the statutory liabilities assumed by the IPO coinsurers. Each of the account balances transferred were at book value with no gain or loss recorded in net income. Beginning in 2017, policies reaching the end of their initial term period are no longer ceded under the IPO coinsurance transactions, but the existing YRT reinsurance already in place prior to the IPO will continue.

Three of the IPO coinsurance agreements satisfy U.S. GAAP risk transfer rules. Under these agreements, we ceded between 80% and 90% of our term life future policy benefit reserves, and we transferred a corresponding amount of assets to the IPO coinsurers. These transactions did not impact our future policy benefit reserves. As such, we have recorded an asset for the same amount of risk transferred in reinsurance recoverables. We also reduced DAC by a corresponding amount, which reduces future amortization expenses. In addition, we are transferring between 80% and 90% of all future premiums and benefits and claims associated with these policies to the corresponding reinsurance entities. We receive ongoing ceding allowances, which are reflected as a reduction to insurance expenses, to cover policy and claims administration expenses as well as certain corporate overhead charges under each of these reinsurance contracts.

In a fourth IPO coinsurance agreement, which we refer to as the 10% Coinsurance Agreement, we ceded to Prime Reinsurance Company (“Prime Re”), an affiliate of Citigroup, 10% of our U.S. (except New York) term life insurance business in force at year-end 2009 subject to an experience refund provision. As the 10% Coinsurance Agreement included an experience refund provision, it did not satisfy U.S. GAAP risk transfer rules. As a result, we accounted for this contract using deposit method accounting and recognized a deposit asset in other assets on our consolidated balance sheets for assets backing the economic reserves of the policies subject to the

89

 

agreement. The deposit asset held in support of this agreement was $131.4 million and $158.9 million at December 31, 2025 and 2024, respectively. We made contributions to the deposit asset during the life of the agreement to fulfill our responsibility of funding the economic reserves. The statutory reserves financed through Prime Re under the 10% Coinsurance Agreement no longer exceeded the economic reserves and the Company no longer incurs a finance charge. During 2025, the cumulative experience refund provision was settled by reductions in the deposit asset over the normal course of the 10% Coinsurance Agreement. Therefore, the Company and Prime Re agreed to terminate the 10% Coinsurance Agreement effective January 1, 2026. Upon termination of the 10% Coinsurance Agreement, the Company received cash equal to the carrying value of the deposit asset and thus did not recognize any gain or loss. Prior to the termination of the 10% Coinsurance Agreement, the market return on the deposit asset was reflected in net investment income as disclosed in Note 5 (Investments).

Details on in-force life insurance were as follows:

 

 

 

December 31, 2025

 

 

December 31, 2024

 

 

 

(Dollars in thousands)

 

Direct life insurance in-force

 

$

969,529,768

 

 

$

955,610,523

 

Amounts ceded to other companies

 

 

(827,832,374

)

 

 

(817,825,296

)

Net life insurance in-force

 

$

141,697,394

 

 

$

137,785,227

 

Percentage of reinsured life insurance in-force

 

 

85

%

 

 

86

%

 

The Company allocated reinsurance recoverables estimated at the cohort level to individual reinsurers for disclosure purposes. Reinsurance recoverables estimated by reinsurer and the financial strength ratings of those reinsurers were as follows:

 

 

 

 

December 31, 2025

 

December 31, 2024

 

 

Reinsurance recoverables

 

 

A.M. Best rating

 

Reinsurance recoverables

 

 

A.M. Best rating

 

 

(In thousands)

Swiss Re Life & Health America Inc. (IPO coinsurance) (1)

 

$

1,976,512

 

 

A+

 

$

2,074,945

 

 

A+

Munich Re of Malta (1) (2)

 

 

200,362

 

 

NR

 

 

210,822

 

 

NR

American Health and Life Insurance Company (1)

 

 

121,666

 

 

B++

 

 

127,601

 

 

B++

SCOR Global Life Reinsurance Companies (3)

 

 

119,615

 

 

A

 

 

148,899

 

 

A

Swiss Re Life & Health America Inc. (4)

 

 

44,726

 

 

A+

 

 

43,826

 

 

A+

RGA Reinsurance Company

 

 

40,043

 

 

A+

 

 

44,132

 

 

A+

Korean Reinsurance Company

 

 

30,372

 

 

A

 

 

40,781

 

 

A

Munich American Reassurance Company

 

 

25,306

 

 

A+

 

 

36,487

 

 

A+

All other reinsurers

 

 

7,845

 

 

-

 

 

17,887

 

 

-

Allowance for credit losses

 

 

(1,495

)

 

 

 

 

(1,215

)

 

 

Reinsurance recoverables

 

$

2,564,952

 

 

 

 

$

2,744,165

 

 

 

 

NR – not rated by A.M. Best

(1) Reinsurance recoverables include balances ceded under coinsurance transactions of term life insurance policies that were in force as of December 31, 2009.

Amounts shown are net of their share of the reinsurance recoverable from other reinsurers. Arrangements with these reinsurers include collateral trust agreements

held in support of reinsurance recoverables.

(2) Entity is rated AA by S&P as of December 31, 2025.

(3) Includes amounts ceded to Transamerica Reinsurance Companies and fully retroceded to SCOR Global Life Reinsurance Companies.

(4) Includes amounts ceded to Lincoln National Life Insurance and fully retroceded to Swiss Re Life & Health America Inc.

Certain reinsurers with which we do business receive group ratings. Individually, those reinsurers are SCOR Global Life Americas Reinsurance Company, SCOR Global Life U.S.A. Reinsurance Company, SCOR Global Life Re Insurance Company of Delaware, and SCOR Global Life of Canada.

The IPO coinsurance agreements include provisions to ensure that Primerica Life, Primerica Life Canada and NBLIC receive full regulatory credit for the reinsurance treaties. Under these agreements, the ceded business can be recaptured with no fee in the event the IPO coinsurers do not comply with the various safeguard provisions in their respective IPO coinsurance agreements.

The rollforward of the allowance for credit losses (“ACL”) on reinsurance recoverables for the years ended December 31, 2025, 2024, and 2023 were as follows:

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(In thousands)

 

Balance, beginning of period

 

$

1,215

 

 

$

1,120

 

 

$

2,936

 

Current period provision for expected credit losses

 

 

280

 

 

 

95

 

 

 

3,703

 

Writeoffs charged against the ACL, if any

 

 

-

 

 

 

-

 

 

 

(5,519

)

   Balance, at the end of period

 

$

1,495

 

 

$

1,215

 

 

$

1,120

 

 

90

 

(8) Deferred Policy Acquisition Costs

The balances and activity in DAC were as follows:

 

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

 

(In thousands)

 

 

 

Term Life Insurance

 

 

Segregated Funds (Canada)

 

 

Term Life Insurance

 

 

Segregated Funds (Canada)

 

DAC balance, beginning of period

 

$

3,608,599

 

 

$

55,303

 

 

$

3,366,281

 

 

$

63,029

 

Capitalization

 

 

540,952

 

 

 

2,547

 

 

 

555,162

 

 

 

2,959

 

Amortization

 

 

(316,411

)

 

 

(5,381

)

 

 

(291,488

)

 

 

(5,443

)

Foreign exchange translation and other

 

 

12,302

 

 

 

2,670

 

 

 

(21,356

)

 

 

(5,242

)

DAC balance, end of period

 

$

3,845,442

 

 

$

55,139

 

 

$

3,608,599

 

 

$

55,303

 

 

Reconciliation of DAC by product was as follows:

 

 

December 31, 2025

 

 

December 31, 2024

 

 

 

(In thousands)

 

Term Life Insurance

 

$

3,845,442

 

 

$

3,608,599

 

Segregated Funds (Canada)

 

 

55,139

 

 

 

55,303

 

Other

 

 

15,417

 

 

 

16,528

 

Total DAC, net

 

$

3,915,998

 

 

$

3,680,430

 

 

There were no material changes to the judgments, assumptions and methods used to amortize DAC during the years ended December 31, 2025 and 2024.

 

(9) Separate Accounts

The following table represents the fair value of assets supporting separate accounts by major investment category:

 

 

 

December 31, 2025

 

 

December 31, 2024

 

 

 

(In thousands)

 

Fixed-income securities

 

$

620,931

 

 

$

708,225

 

Equity securities

 

 

1,595,934

 

 

 

1,490,628

 

Cash and cash equivalents

 

 

69,952

 

 

 

46,764

 

Due to/from funds

 

 

(5,318

)

 

 

(36,350

)

Other

 

 

21

 

 

 

20

 

Total separate account assets

 

$

2,281,520

 

 

$

2,209,287

 

 

The following table represents the balances of and changes in separate account liabilities:

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

 

(In thousands)

 

Separate account liabilities balance, beginning of period

 

$

2,209,287

 

 

$

2,395,842

 

Premiums, deposits and transfers

 

 

174,693

 

 

 

147,995

 

Surrenders, withdrawals and transfers

 

 

(424,337

)

 

 

(378,126

)

Investment performance

 

 

273,108

 

 

 

300,545

 

Management fees and other charges

 

 

(59,942

)

 

 

(57,734

)

Foreign exchange translation

 

 

108,711

 

 

 

(199,235

)

Separate account liabilities balance, end of period

 

$

2,281,520

 

 

$

2,209,287

 

Cash surrender value

 

$

2,250,638

 

 

$

2,173,070

 

 

The cash surrender value represents the amount of the contract holders’ account balance distributable at the balance sheet date less the Company’s estimate of the deferred sales charges that would be assessed if the policyholders redeemed their contracts at the balance sheet date. This estimate requires the Company to make certain assumptions regarding the underlying account balances by contribution year and application of the contractually defined deferred sales charges that would be applicable to each contribution year.

 

91

 

(10) Policy Claims and Other Benefits Payable

Changes in policy claims and other benefits payable were as follows:

 

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

 

(In thousands)

 

Policy claims and other benefits payable, beginning of period

 

$

488,350

 

 

$

513,803

 

Less reinsured policy claims and other benefits payable

 

 

518,210

 

 

 

533,862

 

Net balance, beginning of period

 

 

(29,860

)

 

 

(20,059

)

Incurred related to current year

 

 

257,563

 

 

 

250,699

 

Incurred related to prior years (1)

 

 

(485

)

 

 

(3,477

)

Total incurred

 

 

257,078

 

 

 

247,222

 

Claims paid related to current year, net of reinsured policy claims received

 

 

(307,047

)

 

 

(295,148

)

Reinsured policy claims received related to prior years, net of claims paid

 

 

44,993

 

 

 

38,746

 

Total paid

 

 

(262,054

)

 

 

(256,402

)

Foreign currency translation

 

 

256

 

 

 

(621

)

Net balance, end of period

 

 

(34,580

)

 

 

(29,860

)

Add reinsured policy claims and other benefits payable

 

 

529,936

 

 

 

518,210

 

Balance, end of period

 

$

495,356

 

 

$

488,350

 

 

(1)
Includes the difference between our estimate of claims incurred but not yet reported at year end and the actual incurred claims reported after year end.

 

The liability for policy claims and other benefits payable on traditional life insurance products includes estimated unpaid claims that have been reported to us and claims incurred but not yet reported. We estimate claims incurred but not yet reported based on our historical claims activity, adjusted for any current trends and conditions, and reported lag time experience.

92

 

(11) Future Policy Benefits

 

The following tables summarize balances and changes in the present value of expected net premiums and the present value of expected future policy benefits underlying the LFPB:

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

 

(Dollars in thousands)

 

Present Value of Expected Net Premiums

 

Term Life Insurance

 

Balance at then current discount rate, beginning of period

 

$

13,854,794

 

 

$

13,977,353

 

Balance at original discount rate, beginning of period

 

 

14,233,996

 

 

 

14,012,553

 

     Effect of changes in cash flow assumptions

 

 

(354,521

)

 

 

(74,233

)

     Effect of actual variances from expected experience

 

 

(384,313

)

 

 

(373,646

)

Adjusted balance, beginning of period

 

 

13,495,162

 

 

 

13,564,674

 

     Issuances

 

 

1,651,384

 

 

 

1,884,054

 

     Interest accrual at original discount rate

 

 

627,419

 

 

 

608,588

 

     Net premiums collected

 

 

(1,770,529

)

 

 

(1,733,262

)

     Foreign currency translation

 

 

47,642

 

 

 

(90,058

)

Expected net premiums at original discount rate, end of period

 

 

14,051,078

 

 

 

14,233,996

 

     Effect of changes in discount rate assumptions

 

 

16,126

 

 

 

(379,202

)

Expected net premiums at then current discount rate, end of period

 

$

14,067,204

 

 

$

13,854,794

 

 

 

 

 

 

 

 

Present Value of Expected Future Policy Benefits

 

 

 

 

 

 

Balance at then current discount rate, beginning of period

 

$

20,155,487

 

 

$

20,508,435

 

Balance at original discount rate, beginning of period

 

 

20,763,900

 

 

 

20,391,694

 

     Effect of changes in cash flow assumptions

 

 

(436,663

)

 

 

(83,975

)

     Effect of actual variances from expected experience

 

 

(426,822

)

 

 

(386,512

)

Adjusted balance, beginning of period

 

 

19,900,415

 

 

 

19,921,207

 

     Issuances

 

 

1,655,501

 

 

 

1,892,529

 

     Interest accrual at original discount rate

 

 

958,540

 

 

 

929,078

 

     Benefit payments

 

 

(1,846,085

)

 

 

(1,841,162

)

     Foreign currency translation

 

 

73,689

 

 

 

(137,752

)

Expected future policy benefits at original discount rate, end of period

 

 

20,742,060

 

 

 

20,763,900

 

     Effect of changes in discount rate assumptions

 

 

(60,355

)

 

 

(608,413

)

Expected future policy benefits at then current discount rate, end of period

 

$

20,681,705

 

 

$

20,155,487

 

 

 

 

 

 

 

 

LFPB

 

$

6,614,501

 

 

$

6,300,693

 

Less: reinsurance recoverables

 

 

2,550,187

 

 

 

2,729,022

 

Net LFPB, after reinsurance recoverables

 

$

4,064,314

 

 

$

3,571,671

 

 

 

 

 

 

 

 

Weighted-average duration of net LFPB (in years)

 

 

8.3

 

 

 

8.0

 

 

During the years ended December 31, 2025 and 2024, we recognized remeasurement gains of approximately $38 million and $31 million, respectively, for the Term Life Insurance segment, with corresponding decreases to the LFPB, net of reinsurance. The remeasurement gains for the Term Life Insurance segment reflected changes to the actuarial cash flow assumptions underlying the LFPB estimate, net of reinsurance, based on our annual assumption reviews of approximately $18 million and $28 million for the years ended December 31, 2025 and 2024, respectively, and realized experience variances of approximately $20 million and $3 million during the years ended December 31, 2025 and 2024, respectively.

Our 2025 annual actuarial assumption review was performed during the third quarter of 2025 and included analyzing experience studies based on the Company’s own data and comparing actual to expected cash flow variances by policy cohort. Actuarial judgment was also used since prior historical experience may not fully reflect future expected experience.

We have generally observed lower actual mortality experience compared to the actuarial assumptions in our Term Life Insurance segment since mid-2022. We believe part of the favorable experience is a pull-forward effect where certain deaths accelerated during the pandemic resulting in a future period of lower mortality. However, the level of our favorable mortality has not subsided, which indicates that certain mortality assumptions may be higher than necessary. As such, we decreased our mortality assumption for level premium term life insurance policies sold in Canada, along with a portion of policies sold in both the U.S. and Canada that continue or exchange their policies after the end of the level premium term period. The decrease in the mortality assumption was the largest contributor to the remeasurement gain recognized for LFPB assumption changes during the year ended December 31, 2025. We did not make any changes to our mortality assumptions during the year ended December 31, 2024.

 

93

 

Since 2023, we have also generally observed higher lapse rates compared to our actuarial assumption for policies sold in the U.S. that are within the level premium term period. During our 2024 assumption review, we made changes to our early duration lapse rate assumption for U.S. cohorts to partially reflect recent lapse experience. In the 2025 assumption review, in accordance with our best estimates, we did not make further changes to these lapse assumptions. We believe elevated lapses are temporary due to current economic conditions, and that lapse rates will gradually return to our historical normalized levels. If our lapse experience does not revert back to our best estimate assumptions as forecasted, we could recognize experience variances and/or have an assumption change in subsequent periods. We will continue to monitor emerging experience against our actuarial assumption each quarter to assess its appropriateness. During the year ended December 31, 2025, the remeasurement gain recognized for experience variances noted above were primarily attributable to both higher policy lapse rates and lower mortality.

Prior to 2025, we observed lower incidence rates compared to our assumptions for the waiver of premium benefit offered as an optional supplemental rider on our term life insurance policies that waives the policyholder’s insurance premiums during a qualifying disability since the pandemic. As a result, an assumption change was made during our annual review in 2024 to reflect this experience and resulted in the largest component of the remeasurement gain recognized during the year ended December 31, 2024 noted above. During our 2025 assumption review, we did not observe any significant variances between recent waiver of premium disability claims when compared with the assumption changes that were made in 2024. As such, no further changes were considered necessary to the disability claims assumptions used in the LFPB during the 2025 period.

We also performed our 2025 annual review of LFPB assumptions for our closed block of non-term life insurance included in the Corporate and Other Distributed Products segment during the third quarter of 2025. Based on this review, we recognized a remeasurement loss of less than $1 million during the year ended December 31, 2025. Comparatively, we recognized a remeasurement loss of approximately $5 million during the year ended December 31, 2024 as a result of our 2024 annual assumption review of LFPB assumptions in the Corporate and Other Distributed Products segment.

Discount rates, while a material assumption to our LFPB, are not part of the assumption-setting process since they are updated quarterly based on observable rates. There have been no changes with the compilation of data sources used for this input.

Losses recognized as a result of capping the net premium ratio at 100% were immaterial during the years ended December 31, 2025 and 2024.

The following table reconciles the LFPB to the consolidated balance sheets:

 

 

December 31, 2025

 

 

December 31, 2024

 

 

 

(In thousands)

 

Term Life Insurance

 

$

6,614,501

 

 

$

6,300,693

 

Other

 

 

203,678

 

 

 

202,371

 

Total

 

$

6,818,179

 

 

$

6,503,064

 

 

The following table reconciles the reinsurance recoverables to the consolidated balance sheets:

 

 

December 31, 2025

 

 

December 31, 2024

 

 

 

(In thousands)

 

Term Life Insurance

 

$

2,550,187

 

 

$

2,729,022

 

Other

 

 

14,765

 

 

 

15,143

 

Total

 

$

2,564,952

 

 

$

2,744,165

 

 

The amount of discounted (using the then current discount rate) and undiscounted expected gross premiums and expected future benefit payments were as follows:

 

December 31, 2025

 

 

December 31, 2024

 

 

(In thousands)

 

Term Life Insurance

 

 

 

Undiscounted

 

 

Discounted

 

 

Undiscounted

 

 

Discounted

 

Expected future benefit payments

$

34,009,893

 

 

$

20,681,706

 

 

$

33,966,483

 

 

$

20,155,489

 

Expected future gross premiums

$

39,384,920

 

 

$

27,195,943

 

 

$

39,389,917

 

 

$

26,414,010

 

 

The amount of revenue and interest recognized in our consolidated statements of income were as follows:

 

Year ended December 31,

 

 

2025

 

 

2024

 

 

2023

 

 

(In thousands)

 

Term Life Insurance

 

 

 

 

 

Gross premiums

$

3,445,535

 

 

$

3,375,282

 

 

$

3,292,760

 

Interest accretion (expense)

$

(331,121

)

 

$

(320,490

)

 

$

(311,921

)

 

94

 

The weighted-average discount rates were as follows:

 

December 31, 2025

 

 

December 31, 2024

 

Term Life Insurance

 

 

Original discount rate

 

5.00

%

 

 

4.95

%

Current discount rate

 

5.72

%

 

 

5.69

%

 

There were no changes to the methods used to determine the discount rates during the years ended December 31, 2025 and 2024.

(12) Debt

Note Payable. Note payable consisted of the following:

 

 

 

December 31, 2025

 

 

December 31, 2024

 

 

 

(In thousands)

 

2.80% Senior Notes, due November 19, 2031

 

$

600,000

 

 

$

600,000

 

Unamortized issuance discount on note payable

 

 

(1,575

)

 

 

(1,845

)

Total note payable (1)

 

$

598,425

 

 

$

598,155

 

 

(1)
Excludes unamortized debt issuance costs.

 

As of December 31, 2025, we had outstanding $600.0 million in principal amount of publicly-traded, senior unsecured notes (the “Senior Notes”). The Senior Notes were issued in November 2021 at a price of 99.55% of the principal amount with an annual interest rate of 2.80%, payable semi-annually in arrears on May 19 and November 19, and are scheduled to mature on November 19, 2031. As of December 31, 2025, we were in compliance with the covenants of the Senior Notes. No events of default occurred on the Senior Notes during the year ended December 31, 2025.

As unsecured senior obligations, the Senior Notes rank equally in right of payment with all existing and future unsubordinated indebtedness and senior to all existing and future subordinated indebtedness of the Parent Company. The Senior Notes are structurally subordinated in right of payment to all existing and future liabilities of our subsidiaries. In addition, the Senior Notes contain covenants that restrict our ability to, among other things, create or incur any indebtedness that is secured by a lien on the capital stock of certain of our subsidiaries, and merge, consolidate or sell all or substantially all of our properties and assets.

Surplus Note. As of December 31, 2025, the principal amount outstanding on the Surplus Note issued by Vidalia Re was $1.2 billion, which is equal to the principal amount of the LLC Note. The principal amounts of the Surplus Note and the LLC Note have reached their peaks and are expected to decrease over time to coincide with the amount of policy reserves being contractually supported under the Vidalia Re Coinsurance Agreement. Both the LLC Note and the Surplus Note mature on December 31, 2030 and bear interest at an annual interest rate of 4.50%. This financing arrangement is non-recourse to the Parent Company and Primerica Life, meaning that neither of these companies has guaranteed the Surplus Note or is otherwise liable for reimbursement for any payments triggered by the LLC Note’s credit enhancement feature. The Parent Company has agreed to support Vidalia Re’s obligation to pay the credit enhancement fee incurred on the LLC Note. See Note 5 (Investments) for more information on the LLC Note.

95

 

Revolving Credit Facility. On June 22, 2021, we amended and restated our unsecured $200.0 million revolving credit facility (“Revolving Credit Facility”) with a syndicate of commercial banks. The Revolving Credit Facility has a scheduled termination date of June 22, 2026. Amounts outstanding under the Revolving Credit Facility are borrowed, at our discretion, on the basis of either a Secured Overnight Financing Rate (“SOFR”) rate loan, or a base rate loan. SOFR rate loans bear interest at a periodic rate equal to one-, three-, or six-month Adjusted Term SOFR, plus an applicable margin. Base rate loans bear interest at the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50% and (c) one-month Adjusted Term SOFR plus 1.00%, plus an applicable margin. The Revolving Credit Facility also permits the issuance of letters of credit. The applicable margins are based on our debt rating with such margins for SOFR rate loans and letters of credit ranging from 1.00% to 1.625% per annum and for base rate loans ranging from 0.00% to 0.625% per annum. Under the Revolving Credit Facility, we incur a commitment fee that is payable quarterly in arrears and is determined by our debt rating. This commitment fee ranges from 0.10% to 0.225% per annum of the aggregate amount of the $200.0 million commitment of the lenders under the Revolving Credit Facility that remains undrawn. During the year ended December 31, 2025, no amounts were drawn under the Revolving Credit Facility. As of December 31, 2025, we were in compliance with the covenants of the Revolving Credit Facility. Furthermore, no events of default occurred under the Revolving Credit Facility during the year ended December 31, 2025.

(13) Income Taxes

 

Income from continuing operations before income taxes and income taxes from continuing operations.

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(In thousands)

 

Income from continuing operations before income taxes:

 

 

 

 

 

 

 

 

 

United States

 

$

834,380

 

 

$

812,071

 

 

$

664,740

 

Foreign

 

 

140,184

 

 

 

127,176

 

 

 

106,998

 

Total income from continuing operations before income taxes

 

$

974,564

 

 

$

939,247

 

 

$

771,738

 

 

 

 

 

 

 

 

 

 

 

Income taxes from continuing operations:

 

 

 

 

 

 

 

 

 

Current tax expense:

 

 

 

 

 

 

 

 

 

  United States federal

 

$

193,161

 

 

$

198,272

 

 

$

176,412

 

  United States state and local

 

 

12,369

 

 

 

9,167

 

 

 

8,526

 

  Foreign

 

 

47,353

 

 

 

43,484

 

 

 

40,646

 

Total current tax expense

 

$

252,883

 

 

$

250,923

 

 

$

225,584

 

Deferred tax expense (benefit):

 

 

 

 

 

 

 

 

 

  United States federal

 

$

(21,685

)

 

$

(34,770

)

 

$

(33,699

)

  United States state and local

 

 

431

 

 

 

11,031

 

 

 

(11

)

  Foreign

 

 

(8,299

)

 

 

(8,066

)

 

 

(11,318

)

Total deferred expense (benefit)

 

$

(29,553

)

 

$

(31,805

)

 

$

(45,028

)

Total income taxes from continuing operations:

 

 

 

 

 

 

 

 

 

  United States federal

 

$

171,476

 

 

$

163,502

 

 

$

142,713

 

  United States state and local

 

 

12,800

 

 

 

20,198

 

 

 

8,515

 

  Foreign

 

 

39,054

 

 

 

35,418

 

 

 

29,328

 

Total income taxes from continuing operations

 

$

223,330

 

 

$

219,118

 

 

$

180,556

 

 

 

 

 

 

 

 

 

 

 

 

96

 

Effective tax rate reconciliation. Income taxes from continuing operations differs from the amount determined by multiplying income from continuing operations before income taxes by the U.S. statutory federal tax rate of 21% for the years ended December 31, 2025, 2024 and 2023. The reconciliation for such differences follows:

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

Amount

 

 

Percentage

 

 

Amount

 

 

Percentage

 

 

Amount

 

 

Percentage

 

 

 

(Dollars in thousands)

 

Computed U.S. federal statutory income tax

 

$

204,658

 

 

 

21.0

%

 

$

197,242

 

 

 

21.0

%

 

$

162,066

 

 

 

21.0

%

Domestic federal tax effects:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Tax credits

 

 

(7,417

)

 

 

(0.8

)%

 

 

(76

)

 

*

 

 

 

(138

)

 

*

 

  Nontaxable or nondeductible items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Gain on insurance proceeds (1)

 

 

-

 

 

 

—

%

 

 

(10,500

)

 

 

(1.1

)%

 

 

-

 

 

 

—

%

    Other

 

 

3,499

 

 

 

0.4

%

 

 

2,193

 

 

 

0.2

%

 

 

1,495

 

 

 

0.2

%

      Total nontaxable or nondeductible items

 

 

3,499

 

 

 

0.4

%

 

 

(8,307

)

 

 

(0.9

)%

 

 

1,495

 

 

 

0.2

%

  Effects of cross-border tax laws

 

 

(795

)

 

 

(0.1

)%

 

 

(754

)

 

 

(0.1

)%

 

 

(324

)

 

 

(0.1

)%

Domestic state and local income taxes, net of federal
  income tax effect (2)

 

 

8,620

 

 

 

0.9

%

 

 

20,213

 

 

 

2.1

%

 

 

10,450

 

 

 

1.4

%

Foreign tax effects:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Canada

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Provincial taxes (3)

 

 

15,509

 

 

 

1.6

%

 

 

14,040

 

 

 

1.5

%

 

 

12,007

 

 

 

1.6

%

     Other

 

 

(2,325

)

 

 

(0.2

)%

 

 

(3,006

)

 

 

(0.3

)%

 

 

(2,239

)

 

 

(0.3

)%

  U.S. territorial jurisdictions

 

 

932

 

 

 

0.1

%

 

 

819

 

 

 

0.1

%

 

 

332

 

 

*

 

      Total foreign tax effects

 

 

14,116

 

 

 

1.5

%

 

 

11,853

 

 

 

1.3

%

 

 

10,100

 

 

 

1.3

%

Worldwide changes in prior year unrecognized tax benefits

 

 

649

 

 

*

 

 

 

(1,053

)

 

 

(0.1

)%

 

 

(3,093

)

 

 

(0.4

)%

        Total income taxes from continuing
          operations/effective tax rate from
          continuing operations

 

$

223,330

 

 

 

22.9

%

 

$

219,118

 

 

 

23.3

%

 

$

180,556

 

 

 

23.4

%

(1) In 2024, the gain on insurance proceeds was nontaxable. See Note 4 (Segment and Geographical Information) for more details related to this gain.

(2) In 2025, domestic state and local income taxes, net of federal income tax effect (“state and local income taxes”) in Florida and Georgia comprise the majority (greater than 50%) of the tax effect in this category. In 2024, state and local income taxes in Florida and Minnesota comprise the majority (greater than 50%) of the tax effect in this category. State and local income tax expense in 2024 includes the recognition of a valuation allowance of $11.1 million for net operating losses from e-TeleQuote that the Company determined would not be realized. U.S. GAAP requires a change in a valuation allowance resulting from the change in judgment about the realizability of a deferred tax asset to be presented in income tax expense from continuing operations. In 2023, state and local income taxes in California and Florida comprise the majority (greater than 50%) of the tax effect in this category.

(3) Includes all provincial income taxes.

*Less than 0.1%.

Deferred tax assets and liabilities. The main components of deferred income tax assets and liabilities were as follows:

 

 

December 31,

 

 

 

2025

 

 

2024

 

 

 

(In thousands)

 

Deferred tax assets:

 

 

 

 

 

 

Future policy benefit reserves and unpaid policy claims

 

$

581,690

 

 

$

473,121

 

Net operating losses

 

 

9,044

 

 

 

41,267

 

Investments

 

 

19,167

 

 

 

39,703

 

Future deductible liabilities

 

 

25,178

 

 

 

25,477

 

Foreign tax credits

 

 

14,360

 

 

 

20,002

 

Other

 

 

27,379

 

 

 

25,450

 

Total deferred tax assets before valuation allowance

 

 

676,818

 

 

 

625,020

 

Valuation allowance on foreign tax credits

 

 

(14,360

)

 

 

(20,002

)

Total deferred tax assets after valuation allowance

 

$

662,458

 

 

$

605,018

 

 

 

 

 

 

 

 

Deferred tax liabilities:

 

 

 

 

 

 

Deferred policy acquisition costs

 

$

(489,801

)

 

$

(463,921

)

Reinsurance deposit asset

 

 

(27,598

)

 

 

(33,372

)

Other

 

 

(41,328

)

 

 

(42,685

)

Total deferred tax liabilities

 

 

(558,727

)

 

 

(539,978

)

Net deferred tax assets (liabilities)

 

$

103,731

 

 

$

65,040

 

The majority of total deferred tax assets are attributable to future policy benefit reserves and unpaid policy claims, which represents the difference between the financial statement carrying value and tax basis for LFPB and policy claims and other benefits payable. The tax basis for future policy benefit reserves and unpaid policy claims is actuarially determined in accordance with guidelines set forth in the respective jurisdictional tax codes in the U.S. and Canada. The majority of total deferred tax liabilities are attributable to

97

 

DAC, which represents the difference between the policy acquisition costs capitalized for U.S. GAAP purposes and those capitalized for tax purposes, as well as the difference in the resulting amortization methods.

The Company has state net operating losses resulting in a net deferred tax asset of $9.0 million as of December 31, 2025. Approximately one-third of the state net operating losses are available for use through 2037 and approximately two-thirds have an indefinite life. The Company has no other material net operating losses.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, carryback and carryforward periods, and tax planning strategies in making this assessment. As of December 31, 2025, management identified excess foreign tax credits of approximately $14.4 million that could not be used to offset the mandatory deemed repatriation of foreign earnings tax stipulated by the Tax Cuts and Jobs Act of 2017 and believes it will not be able to utilize these foreign tax credits in the future. Therefore, the Company established a deferred tax asset for these foreign tax credits with a corresponding full valuation allowance. The remaining foreign tax credits are scheduled to expire partially in 2026 and the remainder in 2027. With the exception of these foreign tax credits, management believes that it is more likely than not that the results of future operations will generate sufficient taxable income to realize its deferred tax assets. Therefore, there were no other significant deferred tax asset valuation allowances as of December 31, 2025 or 2024. The Company has no other material tax credit carryforwards.

Income taxes paid. The components of income taxes paid were as follows:

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(In thousands)

 

United States federal

 

$

179,659

 

 

$

90,468

 

 

$

165,204

 

United States state and local (1)

 

 

6,912

 

 

 

6,710

 

 

 

8,030

 

Foreign

 

 

 

 

 

 

 

 

 

Canada (2)

 

 

43,747

 

 

 

36,888

 

 

 

48,915

 

Other

 

 

5,749

 

 

 

6,186

 

 

 

5,122

 

Total foreign

 

 

49,496

 

 

 

43,074

 

 

 

54,037

 

  Total income taxes paid

 

$

236,067

 

 

$

140,252

 

 

$

227,271

 

 

(1) No individual state or local jurisdiction income taxes paid were greater than or equal to 5% of the total income taxes paid for 2025, 2024, or 2023.

(2) The Canada jurisdiction includes payments to Canada Revenue Agency (“CRA”) for federal and CRA-agreeing provincial income taxes.

Controlled foreign corporations. The Company has direct ownership of a group of controlled foreign corporations. The tax effects of controlled foreign corporations other than in Canada were not material. We have not made a permanent reinvestment assertion for any unremitted earnings in Canada; therefore, we have recorded a deferred tax liability to account for Canadian withholding taxes that will occur upon repatriation of such earnings and we continue to record deferred tax liabilities to account for Canadian withholding taxes as earnings are recognized.

The Company has no intentions to sell or substantially liquidate our Canadian operations and, therefore, has not provided for any additional outside basis difference for the amount of book basis in excess of tax basis in its Canadian subsidiaries. In addition, it is not practicable to determine the amount of the unrecognized deferred tax liability related to any additional outside basis difference in these entities.

Unrecognized tax benefits. The total amount of unrecognized benefits on uncertain tax positions that, if recognized, would affect our effective tax rate was approximately $24.4 million and $20.2 million as of December 31, 2025 and 2024, respectively. We recognize interest expense related to unrecognized tax benefits in tax expense net of federal income tax. The total amount of accrued interest and penalties in the consolidated balance sheets was $6.0 million and $4.3 million as of December 31, 2025 and 2024, respectively. Additionally, we recognized $1.4 million, $0.4 million, and $0.4 million of interest expense related to unrecognized tax benefits in the consolidated statements of income for the years ended December 31, 2025, 2024, and 2023, respectively.

A reconciliation of the change in the unrecognized income tax benefit for the years ended December 31, 2025, 2024, and 2023 is as follows:

 

 

 

December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(In thousands)

 

Unrecognized tax benefits, beginning of period

 

$

20,954

 

 

$

19,362

 

 

$

20,180

 

Change in prior period unrecognized tax benefits

 

 

705

 

 

 

(72

)

 

 

(2,327

)

Change in current period unrecognized tax benefits

 

 

4,449

 

 

 

4,128

 

 

 

3,551

 

Reductions as a result of settlements with taxing authorities

 

 

-

 

 

 

(453

)

 

 

-

 

Reductions as a result of a lapse in statute of limitations

 

 

(1,668

)

 

 

(2,011

)

 

 

(2,042

)

Unrecognized tax benefits, end of period

 

$

24,440

 

 

$

20,954

 

 

$

19,362

 

 

We have an immaterial amount of penalties included in calculating our provision for income taxes.

98

 

The major tax jurisdictions in which we operate are the United States and Canada. We are currently open to audit by the Internal Revenue Service for the tax years ended December 31, 2022 and thereafter for federal income tax purposes. We are currently open to audit in Canada for tax years ended December 31, 2021 and thereafter for federal and provincial income tax purposes.

Qualified investment tax credit projects. We have investments in various limited partnerships that sponsor qualified affordable housing projects, which meet the definition of a VIE. We are not the primary beneficiary of these VIEs because we do not have the power to direct the activities that most significantly impact the entities’ economic performance. The maximum exposure to loss as a result of our involvement in these VIEs equals the carrying value of the investments. The primary economic purpose of these investments is to achieve a satisfactory return on capital through the receipt of tax credits. Our qualified affordable housing project investments are accounted for using the proportional amortization method of accounting. During the years ended December 31, 2025, 2024, and 2023 the amount of income tax benefits recognized from these investments was insignificant.

Our investment in qualified affordable housing projects was $8.7 million and $9.8 million as of December 31, 2025 and 2024, respectively, and is included within policy loans and other invested assets on our consolidated balance sheets. Additionally, unfunded commitments to provide additional capital to investees in qualified affordable housing projects was $1.3 million and $4.4 million as of December 31, 2025 and 2024, respectively, and are included within other liabilities on our consolidated balance sheets. Substantially all of the unfunded commitments as of December 31, 2025 are expected to be paid out within the next one to two years.

Purchased tax credits. The Company purchased transferable federal income tax credits generated from a solar energy facility and battery storage system (the “Facilities”) that was placed in service during the fourth quarter of 2025. The cost of the income tax credits was $93.0 million, and the Company reduced its 2025 estimated federal income tax liability by $100.0 million. The cost of the income tax credits is included in income tax payable on the consolidated balance sheet as of December 31, 2025, and we settled the payment with the seller in January 2026. The net impact of these income tax credits is reflected in the effective tax rate reconciliation table above for the year ended December 31, 2025. As of December 31, 2025, we do not have any commitments to purchase additional income tax credits.

(14) Stockholders’ Equity

The following table shows changes in the number of shares of our outstanding common stock:

 

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(In thousands)

 

Common stock, beginning of period

 

 

33,368

 

 

 

34,996

 

 

 

36,824

 

Shares of common stock issued upon exercise of stock options

 

 

-

 

 

 

-

 

 

 

60

 

Shares of common stock issued when sales restrictions on RSUs lapsed and PSUs were earned

 

 

137

 

 

 

178

 

 

 

207

 

Common stock retired

 

 

(1,695

)

 

 

(1,806

)

 

 

(2,095

)

Common stock, end of period

 

 

31,810

 

 

 

33,368

 

 

 

34,996

 

 

The above table excludes RSUs, director deferred shares, and PSUs, which do not have voting rights. As sales restrictions on RSUs lapse and PSUs are earned, we issue common shares with voting rights. As of December 31, 2025, we had a total of 202,993 RSUs and director deferred shares outstanding and 44,548 PSUs outstanding. The PSU outstanding balance is based on the number of PSUs granted pursuant to the award agreements; however, the actual number of common shares earned could be higher or lower based on actual versus targeted performance. See Note 16 (Share-Based Transactions) for a discussion of the PSU award structure.

On November 14, 2024, our Board authorized a share repurchase program for up to $450.0 million of our outstanding common stock for purchases from November 14, 2024 through December, 31, 2025 (the “Share Repurchase Program”). Under the Share Repurchase Program, we repurchased 1,662,149 shares of our common stock in the open market for an aggregate purchase price of $450.0 million through December 31, 2025. There is no remaining authority under the Share Repurchase Program as of December 31, 2025. On November 19, 2025, our Board authorized a new $475.0 million share repurchase program (the “New Share Repurchase Program”) to occur from November 19, 2025 through December, 31, 2026. We did not repurchase any shares under the New Share Repurchase Program in 2025.

(15) Earnings Per Share

The Company has outstanding common stock and equity awards that consist of RSUs and PSUs. All outstanding stock options were exercised during the year ended December 31, 2023. The RSUs maintain non-forfeitable dividend rights that result in dividend payment obligations on a one-to-one ratio with common shares for any future dividend declarations.

Unvested RSUs are deemed participating securities for purposes of calculating EPS as they maintain dividend rights. We calculate EPS using the two-class method. Under the two-class method, we allocate earnings to common shares and vested RSUs outstanding for the period. Earnings attributable to unvested participating securities, along with the corresponding share counts, are excluded from EPS as reflected in our consolidated statements of income.

99

 

In calculating basic EPS, we deduct from net income any dividends and undistributed earnings allocated to unvested RSUs and then divide the result by the weighted-average number of common shares and vested RSUs outstanding for the period.

We determine the potential dilutive effect of PSUs and stock options outstanding (“contingently-issuable shares”) on EPS using the treasury-stock method. Under this method, we determine the proceeds that would be received from the issuance of the contingently- issuable shares if the end of the reporting period were the end of the contingency period. The proceeds from the contingently-issuable shares include the remaining unrecognized compensation expense of the awards and the cash received for the exercise price on stock options. We then use the average market price of our common shares during the period the contingently-issuable shares were outstanding to determine how many shares we could repurchase with the proceeds raised from the issuance of the contingently-issuable shares. The net incremental share count issued represents the potential dilutive securities. We then reallocate earnings to common shares and vested RSUs by incorporating the increased fully-diluted share count to determine diluted EPS.

The calculation of basic and diluted EPS was as follows:

 

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(In thousands, except per-share amounts)

 

Basic EPS:

 

 

 

 

 

 

 

 

 

Numerator (continuing operations):

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

751,234

 

 

$

720,129

 

 

$

591,182

 

Income attributable to unvested participating securities

 

 

(2,446

)

 

 

(2,443

)

 

 

(2,535

)

Income from continuing operations used in calculating basic EPS

 

$

748,788

 

 

$

717,686

 

 

$

588,647

 

Numerator (discontinued operations):

 

 

 

 

 

 

 

 

 

Loss from discontinued operations

 

$

-

 

 

$

(249,611

)

 

$

(14,581

)

Loss attributable to unvested participating securities

 

 

-

 

 

 

701

 

 

 

53

 

Loss from discontinued operations used in calculating
   basic EPS

 

$

-

 

 

$

(248,910

)

 

$

(14,528

)

Denominator:

 

 

 

 

 

 

 

 

 

Weighted-average vested shares

 

 

32,632

 

 

 

34,142

 

 

 

35,954

 

Basic EPS from continuing operations

 

$

22.95

 

 

$

21.02

 

 

$

16.37

 

Basic EPS from discontinued operations

 

 

-

 

 

 

(7.29

)

 

 

(0.40

)

   Basic EPS

 

$

22.95

 

 

$

13.73

 

 

$

15.97

 

 

 

 

 

 

 

 

 

 

 

Diluted EPS:

 

 

 

 

 

 

 

 

 

Numerator (continuing operations):

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

751,234

 

 

$

720,129

 

 

$

591,182

 

Income attributable to unvested participating securities

 

 

(2,443

)

 

 

(2,440

)

 

 

(2,531

)

Income from continuing operations used in calculating diluted EPS

 

$

748,791

 

 

$

717,689

 

 

$

588,651

 

Numerator (discontinued operations):

 

 

 

 

 

 

 

 

 

Loss from discontinued operations

 

$

-

 

 

$

(249,611

)

 

$

(14,581

)

Loss attributable to unvested participating securities

 

 

-

 

 

 

701

 

 

 

52

 

Loss from discontinued operations used in calculating diluted EPS

 

$

-

 

 

$

(248,910

)

 

$

(14,529

)

Denominator:

 

 

 

 

 

 

 

 

 

Weighted-average vested shares

 

 

32,632

 

 

 

34,142

 

 

 

35,954

 

Dilutive effect of incremental shares to be issued for
   contingently-issuable shares

 

 

48

 

 

 

57

 

 

 

73

 

Weighted-average shares used in calculating diluted EPS

 

 

32,680

 

 

 

34,199

 

 

 

36,027

 

Diluted EPS from continuing operations

 

$

22.91

 

 

$

20.99

 

 

$

16.34

 

Diluted EPS from discontinued operations

 

 

-

 

 

 

(7.28

)

 

 

(0.40

)

    Diluted EPS

 

$

22.91

 

 

$

13.71

 

 

$

15.94

 

 

(16) Share-Based Transactions

The Company has outstanding equity awards under the Primerica, Inc. 2020 Omnibus Incentive Plan (the “OIP”), which was approved by the Company’s stockholders on May 13, 2020. The OIP provides for the issuance of equity awards, including stock options, stock appreciation rights, restricted stock, deferred stock, RSUs, PSUs, and stock payment awards, as well as cash-based awards. In addition to time-based vesting requirements, awards granted under the OIP may also be subject to specified performance criteria. Under the OIP, the Company issues equity awards to our management (officers and other key employees), non-employees who serve on our Board, and independent sales force leaders. As of December 31, 2025, we had 1.0 million shares available for future grants under the 2020 OIP.

Employee and Director Share-Based Compensation. As of December 31, 2025, the Company had outstanding RSUs and PSUs issued to our management (officers and other key employees), as well as RSUs issued to our directors, under the OIP.

100

 

RSUs.

•
RSUs granted to management generally have time-based vesting requirements with equal and annual graded vesting over approximately three years subsequent to the grant date, but also generally vest upon voluntary termination of employment by any employee who is “retirement eligible” as of his or her termination date. The substantive service conditions in order to be retirement eligible require that an employee must be at least 55 years old and his or her age plus years of service with the Company must equal at least 75.
•
RSUs granted to directors have time-based vesting requirements with equal and quarterly graded vesting over four quarters subsequent to the grant date.
•
In addition, certain directors elected to defer their cash and/or equity retainers into deferred RSUs, which vest immediately (for cash deferrals) or, if applicable, on the dates the RSUs would have vested.

All of our outstanding employee and director RSU awards are eligible for dividend equivalents regardless of vesting status.

We recognized expense and tax benefit offsets as follows for employee and director RSU share-based compensation (inclusive of discontinued operations):

 

 

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(In thousands)

 

Total equity awards expense recognized

 

$

13,972

 

 

$

16,733

 

 

$

11,854

 

Tax benefit associated with total employee and director
  share-based compensation

 

 

1,788

 

 

 

2,263

 

 

 

1,874

 

 

The following table summarizes employee and director RSU activity, which excludes director deferred shares, during the years ended December 31, 2025, 2024, and 2023 (inclusive of discontinued operations).

 

 

 

Shares

 

 

Weighted-average measurement-date fair value per share

 

 

 

(Shares in thousands)

 

Unvested employee and director RSUs, December 31, 2022

 

 

173

 

 

$

131.78

 

Granted

 

 

67

 

 

 

185.71

 

Forfeited

 

 

(3

)

 

 

155.49

 

Vested

 

 

(91

)

 

 

132.72

 

Unvested employee and director RSUs, December 31, 2023

 

 

146

 

 

 

155.63

 

Granted

 

 

65

 

 

 

247.36

 

Forfeited

 

 

(3

)

 

 

182.99

 

Vested

 

 

(99

)

 

 

159.99

 

Unvested employee and director RSUs, December 31, 2024

 

 

109

 

 

 

205.46

 

Granted

 

 

54

 

 

 

282.70

 

Forfeited

 

*

 

 

 

263.33

 

Vested

 

 

(66

)

 

 

190.84

 

Unvested employee and director RSUs, December 31, 2025

 

 

97

 

 

 

258.22

 

 

* Less than 1 thousand shares.

 

As of December 31, 2025, total compensation cost not yet recognized in our consolidated financial statements related to employee and director RSU awards with time-based vesting conditions yet to be reached was $5.8 million, and the weighted-average period over which cost will be recognized was 0.8 years.

PSUs.

The Company issued PSUs to certain of its executive officers under the OIP as part of their annual equity compensation. To date, PSU awards have included a performance target of a specified average annual Return on Adjusted Equity (“ROAE”) and EPS growth (starting with the 2020 award) for the Company over a three-year performance period, as well as a threshold ROAE and EPS growth below which no shares would be earned and an ROAE and EPS growth metric at which the maximum number of shares can be earned. Awards are earned two months after the performance period ends. Depending on the ROAE and EPS growth, if applicable, achieved within the specified range, recipients may receive shares of common stock equal to between 0% and 150% of the number of PSUs granted. In addition, PSUs accrue forfeitable dividend equivalents, which are also paid out based on the number of shares earned.

PSU awards provide for vesting upon the voluntary termination of employment by any employee who is “retirement eligible” as of his or her termination date. The number of shares that will be earned for a retirement-eligible employee is equal to the amount calculated using the Company’s actual performance metrics for the entire performance period, even if that employee retires prior to the completion of the performance period.

101

 

In connection with our granting of PSU awards, we recognized expense and tax benefit offsets as follows:

 

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(In thousands)

 

Total employee PSU award expense

 

$

5,986

 

 

$

3,563

 

 

$

2,565

 

Tax benefit associated with total employee PSU award expense

 

 

137

 

 

 

-

 

 

 

-

 

 

The following table summarizes PSU activity during the years ended December 31, 2025, 2024, and 2023.

 

 

 

Shares

 

 

Weighted-average measurement-date fair value per share

 

 

 

(Shares in thousands)

 

Unvested employee PSUs, December 31, 2022 (1)

 

 

74

 

 

$

130.97

 

Granted

 

 

17

 

 

 

185.24

 

Forfeited

 

 

-

 

 

 

-

 

Performance Adjustment

 

 

(5

)

 

 

121.42

 

Vested

 

 

(21

)

 

 

121.42

 

Unvested employee PSUs, December 31, 2023 (1)

 

 

65

 

 

 

148.94

 

Granted

 

 

15

 

 

 

244.89

 

Forfeited

 

 

-

 

 

 

-

 

Performance Adjustment

 

 

(6

)

 

 

143.04

 

Vested

 

 

(15

)

 

 

143.04

 

Unvested employee PSUs, December 31, 2024 (1)

 

 

59

 

 

 

175.70

 

Granted

 

 

12

 

 

 

284.14

 

Forfeited

 

 

-

 

 

 

-

 

Performance Adjustment

 

 

2

 

 

 

130.30

 

Vested

 

 

(29

)

 

 

130.30

 

Unvested employee PSUs, December 31, 2025 (1)

 

 

44

 

 

 

232.87

 

 

(1)
The 2023 PSU awards outstanding were based on the actual performance for the 2023 to 2025 performance period. As a result of the performance achieved during the performance period, recipients received an aggregate of 25,451 shares of common stock on the vesting date of March 1, 2026, reflecting a payout rate of 148.5%. The 2024 PSU awards outstanding are based on target. Depending upon the performance achieved during the performance period, recipients may receive between 0 and 22,508 shares of common stock. The 2025 PSU awards outstanding are based on target. Depending upon the performance achieved during the performance period, recipients may receive between 0 and 18,606 shares of common stock.

As of December 31, 2025 the Company had $0.7 million of unrecognized compensation related to PSU awards.

Stock Options. From 2013 to 2016, the Company issued stock options to certain of its executive officers under the OIP as part of their annual equity compensation. Stock options were granted with an exercise price equal to the fair market value of our common stock on the grant date, and they would expire 10 years from the date of grant. These options had time-based restrictions with equal and annual graded vesting over a three-year period. We did not issue any stock options and we did not have any compensation expense or related tax benefits for stock option awards during the years ended December 31, 2025, 2024 or 2023. All remaining stock options representing approximately 60,000 shares were exercised with a weighted average exercise price of $44.62 during the year ended December 31, 2023. The intrinsic value of the options exercised during the year ended December 31, 2023 was $8.6 million, and the value of issued shares withheld to satisfy option exercise price was $2.7 million.

Non-Employee Share-Based Compensation. Non-employee share-based transactions relate to the granting of RSUs to members of the independent sales force (“agent equity awards”). Agent equity awards are generally granted as a part of quarterly contests for successful life insurance policy acquisitions and for sales of investment and savings products for which the grant and the service period occur within the same quarterly reporting period.

The following table summarizes non-employee RSU activity during the years ended December 31, 2025, 2024, and 2023:

 

 

 

Shares

 

 

Weighted-average measurement-date fair value per share

 

 

 

(Shares in thousands)

 

Unvested non-employee RSUs, December 31, 2022

 

 

32

 

 

$

141.60

 

Granted

 

 

79

 

 

 

189.64

 

Vested

 

 

(86

)

 

 

167.07

 

Unvested non-employee RSUs, December 31, 2023

 

 

25

 

 

 

205.67

 

Granted

 

 

59

 

 

 

255.05

 

Vested

 

 

(68

)

 

 

232.49

 

Unvested non-employee RSUs, December 31, 2024

 

 

16

 

 

 

271.72

 

Granted

 

 

42

 

 

 

272.75

 

Vested

 

 

(45

)

 

 

275.49

 

Unvested non-employee RSUs, December 31, 2025

 

 

13

 

 

 

262.16

 

 

102

 

Agent equity awards are measured using the fair market value at the grant date and vest during the service period, which generally occur within the same quarterly reporting period.

 

To the extent that these awards are an incremental direct cost of successful acquisitions of life insurance policies that result directly from and are essential to the policy acquisition(s) and would not have been incurred had the policy acquisition(s) not occurred, we defer and amortize the fair value of the awards in the same manner as other deferred policy acquisition costs. All agent equity awards that are not directly related to the acquisition of life insurance policies are recognized as expense in the quarter earned.

Details on the granting and valuation of these awards were as follows:

 

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(In thousands)

 

Quarterly incentive awards expense recognized currently

 

$

4,642

 

 

$

4,778

 

 

$

4,492

 

Quarterly incentive awards expense deferred

 

 

8,485

 

 

 

10,334

 

 

 

10,546

 

Tax benefit associated with incentive awards

 

 

2,487

 

 

 

2,939

 

 

 

2,965

 

 

As of December 31, 2025, all agent equity awards were fully vested with the exception of approximately 13,354 shares that vested on January 1, 2026.

 

The following table summarizes non-cash share-based compensation expense by segment included in income from continuing operations:

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(In thousands)

 

Term Life Insurance segment

 

$

3,224

 

 

$

4,974

 

 

$

4,285

 

Investment and Savings Products segment

 

 

3,333

 

 

 

3,171

 

 

 

2,927

 

Corporate and Other Distributed Products segment

 

 

18,043

 

 

 

15,390

 

 

 

11,031

 

Total non-cash share-based compensation expense

 

$

24,600

 

 

$

23,535

 

 

$

18,243

 

 

(17) Statutory Accounting and Dividend Restrictions

U.S. Insurance Subsidiaries. Our two underwriting U.S. insurance subsidiaries are Primerica Life and NBLIC. Primerica Life wholly owns Vidalia Re and ceded certain level-premium term life insurance policies to Vidalia Re through the Vidalia Re Coinsurance Agreement.

Our U.S. insurance subsidiaries are required to report their results of operations and financial position to state authorities on the basis of statutory accounting practices prescribed or permitted by such authorities and the National Association of Insurance Commissioners (“NAIC”), which is a comprehensive basis of accounting other than U.S. GAAP. Prescribed statutory accounting practices include a variety of publications of the NAIC, as well as state laws, regulations and general administrative rules. Permitted statutory accounting practices encompass all accounting practices not so prescribed. The Company’s principal life insurance company, Primerica Life, prepares its statutory financial statements on the basis of accounting practices prescribed or permitted by the NAIC and the Tennessee Department of Commerce and Insurance (“Tennessee DOCI”) and includes the statutory financial statements of its wholly owned insurance subsidiaries, NBLIC and Vidalia Re. NBLIC’s statutory financial statements are prepared on the basis of accounting practices prescribed or permitted by the NAIC or the New York State Department of Financial Services, while the statutory financial statements of Vidalia Re are prepared on the basis of accounting practices prescribed or permitted by the NAIC and the Vermont Department of Financial Regulation. Our U.S. insurance subsidiaries’ ability to pay dividends to their parent is subject to and limited by the various laws and regulations of their respective states. There are no regulatory restrictions on the ability of the Parent Company to pay dividends (other than limitations under the Delaware General Corporation Law that provide that dividends on common stock shall be declared by the Board out of surplus or, if there is no surplus, out of net profits for the fiscal year in which the dividend is declared and/or the preceding prior fiscal year).

Primerica Life’s statutory ordinary dividend capacity is based on the greater of: (1) the previous year’s statutory net gain from operations (excluding pro rata distributions of any class of the insurer’s own securities) or (2) 10% of the previous year-end statutory surplus (net of capital stock). Dividends that, together with the amount of other distributions or dividends made within the preceding 12 months, exceed this statutory limitation are referred to as extraordinary dividends and require advance notice to the Tennessee DOCI, and are subject to potential disapproval. Dividends paid from other than statutory unassigned surplus require approval of the commissioner of the Tennessee DOCI.

 

Primerica Life’s statutory capital and surplus as of December 31, 2025 and 2024 were as follows:

 

 

December 31, 2025

 

 

December 31, 2024

 

 

 

(In thousands)

 

Statutory capital and surplus

 

$

807,990

 

 

$

763,694

 

 

103

 

 

Primerica Life’s statutory net gain from operations was $362.0 million, $271.8 million, and $290.3 million for 2025, 2024, and 2023, respectively. Primerica Life made no pro rata distributions of any class of its own securities during 2025. During 2025, Primerica Life paid ordinary dividends of $271.7 million to the Parent Company. As of January 1, 2026, the amount of dividends Primerica Life could pay from statutory unassigned surplus without prior approval of the commissioner of the Tennessee DOCI was $310.3 million, which is limited by the amount of statutory unassigned surplus on that date.

Canadian Insurance Subsidiary. Primerica Life Canada is incorporated under the provisions of the Canada Business Corporations Act and is a domiciled Canadian Company subject to regulation under the Insurance Companies Act (Canada) by the Office of the Superintendent of Financial Institutions in Canada (“OSFI”) and by Provincial Superintendents of Financial Institutions/Insurance in those provinces in which Primerica Life Canada is licensed. The statutory financial statements of Primerica Life Canada reported to OSFI are prepared in accordance with International Financial Reporting Standards.

Primerica Life Canada’s capacity to pay ordinary dividends to its parent is limited by OSFI regulations to the extent that its capital exceeds internal capital targets. OSFI requires companies to set internal target levels of capital sufficient to provide for all the risks of the insurer, including risks specified in OSFI’s capital guidelines. As of December 31, 2025 and 2024, Primerica Life Canada’s statutory capital and surplus satisfied regulatory requirements and was $903.3 million and $696.2 million, respectively.

In Canada, dividends can typically be paid subject to the paying insurance company continuing to have adequate capital and forms of liquidity as defined by OSFI following the dividend payment and upon 15 days minimum notice to OSFI. Primerica Life Canada’s dividend capacity at January 1, 2026 was estimated to be $215.7 million, which was calculated based on satisfying the Company’s internal capital targets. During 2025, Primerica Life Canada paid ordinary dividends of $45.3 million to its parent company.

(18) Commitments and Contingent Liabilities

The Company is involved from time-to-time in legal disputes, regulatory inquiries and arbitration proceedings in the normal course of business. These disputes are subject to uncertainties, including the large and/or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation. As such, the Company is unable to estimate the possible loss or range of loss that may result from these matters unless otherwise indicated.

(19) Benefit Plans

We sponsor defined contribution plans for the benefit of our employees. The expense associated with these plans was approximately $12.8 million, $12.0 million, and $11.1 million in 2025, 2024, and 2023, respectively.

(20) Revenue from Contracts with Customers

Our revenues from contracts with customers primarily include:

•
Commissions and fees earned for the marketing and distribution of investment and savings products managed and/or underwritten by mutual fund companies, annuity providers, and other asset managers. For purposes of revenue recognition, mutual fund companies, annuity providers, and other asset managers are considered the customers in marketing and distribution arrangements;
•
Fees earned for investment advisory and administrative services within our managed investments program and shareholder service fees earned in Canada for mutual funds for which we serve as principal distributor;
•
Account-based fees for transfer agent recordkeeping functions and non-bank custodial services;
•
Fees associated with mortgage distribution and the distribution of other third-party financial products; and
•
Other revenue from the sale of miscellaneous products and services including monthly subscription fees from the independent sales representatives for access to POL, our primary independent sales force support tool.

Premiums from insurance contracts we underwrite, fees received from segregated funds insurance contracts we underwrite, and income earned on our invested assets are excluded from the definition of revenues from contracts with customers in accordance with U.S. GAAP.

104

 

The disaggregation of our revenues from contracts with customers were as follows:

 

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(In thousands)

 

Term Life Insurance segment revenues:

 

 

 

 

 

 

 

 

 

  Other, net

 

$

48,122

 

 

$

52,306

 

 

$

48,286

 

    Total segment revenues from contracts with customers

 

 

48,122

 

 

 

52,306

 

 

 

48,286

 

  Revenues from sources other than contracts with customers

 

 

1,771,687

 

 

 

1,715,934

 

 

 

1,644,756

 

      Total Term Life Insurance segment revenues

 

$

1,819,809

 

 

$

1,768,240

 

 

$

1,693,042

 

 

 

 

 

 

 

 

 

 

 

Investment and Savings Products segment revenues:

 

 

 

 

 

 

 

 

 

  Commissions and fees:

 

 

 

 

 

 

 

 

 

    Sales-based revenues

 

$

477,146

 

 

$

394,432

 

 

$

296,617

 

    Asset-based revenues

 

 

607,617

 

 

 

498,948

 

 

 

408,327

 

    Account-based revenues

 

 

97,355

 

 

 

95,272

 

 

 

93,189

 

  Other, net

 

 

13,288

 

 

 

13,483

 

 

 

12,504

 

      Total segment revenues from contracts with customers

 

 

1,195,406

 

 

 

1,002,135

 

 

 

810,637

 

  Revenues from sources other than contracts
    with customers (segregated funds)

 

 

52,826

 

 

 

54,607

 

 

 

54,628

 

        Total Investment and Savings Products segment revenues

 

$

1,248,232

 

 

$

1,056,742

 

 

$

865,265

 

 

 

 

 

 

 

 

 

 

 

Corporate and Other Distributed Products segment revenues:

 

 

 

 

 

 

 

 

 

  Commissions and fees

 

$

40,920

 

 

$

39,630

 

 

$

40,092

 

  Other, net

 

 

4,200

 

 

 

3,557

 

 

 

4,609

 

    Total segment revenues from contracts with customers

 

 

45,120

 

 

 

43,187

 

 

 

44,701

 

  Revenues from sources other than contracts with customers

 

 

178,552

 

 

 

220,974

 

 

 

145,499

 

        Total Corporate and Other Distributed Products segment revenues

 

$

223,672

 

 

$

264,161

 

 

$

190,200

 

 

We recognize revenue upon the satisfaction of the related performance obligation, unless the transaction price includes variable consideration that is constrained; in such case, we recognize revenue when the uncertainty associated with the constrained amount is subsequently resolved. Variable consideration is not treated as constrained to the extent it is probable that no significant reversal in the amount of cumulative revenue recognized will occur when the uncertainty associated with the variable consideration is resolved. We have no material obligations for refunds of commission and fees on contracts with customers subsequent to completion of our performance obligation.

Investment and Savings Products Marketing and Distribution Services. We receive commissions and fees from mutual fund companies, annuity providers, and other asset managers for the marketing and distribution by the licensed independent sales representatives of investment and savings products managed and/or underwritten by such companies and providers. We recognize the sales-based marketing and distribution revenue received from such companies and providers at the point in time our performance obligation to them is satisfied, which is the trade date. The sales-based commissions from such companies and providers are known and are due at the same time our performance obligation to such companies and providers is satisfied. We also receive ongoing asset-based commissions from such companies and providers each reporting period based on client asset values. We do not recognize revenue for asset-based marketing and distribution commissions until the end of each subsequent reporting period when the amount becomes known and due from such companies or providers as this revenue represents variable consideration that is fully constrained at the point in time our distinct performance obligation to such companies and providers is satisfied. We consider variable consideration in the form of asset-based marketing and distribution commissions to be fully constrained as the amounts we will be entitled to collect are highly uncertain and susceptible to factors outside of our control. Such factors include the market values of assets under management and the length of time investors hold their accounts. Asset-based marketing and distribution commissions recognized during the current period are almost exclusively attributable to distinct performance obligations satisfied to such fund companies and providers in previous periods.

Investment Advisory and Administrative Services. We provide investment advisory and administrative services over time to investors in the managed investments program we offer. We recognize revenue as our performance obligation is satisfied over time for daily investment advisory and administrative services that are substantially the same and have the same pattern of delivery. Fees for these services, which are based on a percentage of client assets in the managed investments program, become known and are charged to investors during the same reporting period in which the daily investment advisory and administrative services are performed.

 

Shareholder Services. We provide shareholder services over time to investors in the mutual funds in which we serve as the principal distributor in Canada. We recognize revenue as our performance obligation is satisfied over time for shareholder services that are substantially the same and have the same pattern of delivery. Fees for these services, which are based on a percentage of client assets

105

 

in the mutual funds, become known and are charged to investors during the same reporting period in which the shareholder services are performed.

Account-based Services. We provide distinct transfer agent recordkeeping services for certain mutual funds we distribute and non-bank custodial services to investors purchasing investment products we distribute through qualified retirement accounts in the United States. Fees charged for these account-based services consist primarily of a stated fee for each investment position or each qualified retirement account. Generally, our performance obligation for each account-based service arrangement is satisfied over time and is substantially the same with the same pattern of delivery. We recognize revenue to which we are entitled for each investment position or each qualified account over time based on the time-based pro-rata amount earned each reporting period.

Distribution of Other Third-party Financial Products. We distribute various other financial products on behalf of third parties to consumers. We receive up-front commissions and/or renewal commissions from product providers for sales of other financial product sales we have arranged. We recognize revenue at the point in time our performance obligation to product providers is satisfied, which is generally on the date the financial product is purchased by the consumer from the product provider. For certain financial products, most notably prepaid legal subscriptions and auto and homeowners’ insurance referrals, we receive ongoing renewal commissions that coincide with recurring payments received by product providers from active subscribers or policyholders. Ongoing renewal commissions represent variable consideration that will not be resolved until after the reporting period in which our performance obligation has been satisfied. We estimate variable consideration in the transaction price for these financial products (with the exception of miscellaneous products for which we expect nominal ongoing commissions) as the expected amount of commissions to be received over the life of the subscription or referred policy and apply a constraint so that it is probable that a subsequent change in estimate will not result in a significant revenue reversal. Management judgment primarily is required to determine the average life of a subscription or referred policy, which we establish based on historical information. We recognize variable consideration in excess of the amount constrained in subsequent reporting periods when the uncertainty is resolved and the excess amounts are due from the product providers.

Revenue for Other Services. We recognize revenue from the sale of other miscellaneous products and services, including monthly subscription fees from the independent sales representatives for access to POL, upon the transfer of the promised product or service. For POL subscriptions, we satisfy our performance obligation by providing subscribers access to the promised services over time during each monthly subscription period. Revenue recognized from the sale of other miscellaneous products and services becomes known and charged at the same time we satisfy the corresponding performance obligation.

Renewal Commissions Receivable. For revenue associated with ongoing renewal commissions in the Corporate and Other Distributed Products segment, we record a renewal commission receivable contract asset for the amount of ongoing renewal commissions we anticipate collecting in reporting periods subsequent to the satisfaction of the performance obligation, less amounts that are constrained in Other assets in the accompanying consolidated balance sheets. The renewal commissions receivable is reduced for commissions that are billed and become due receivables from product providers during the reporting period.

Activity in the renewal commissions receivable account was as follows:

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(In thousands)

 

Balance, beginning of period

 

$

58,079

 

 

$

61,372

 

 

$

60,644

 

Commissions revenue

 

 

21,069

 

 

 

21,955

 

 

 

25,188

 

Less: collections

 

 

(24,827

)

 

 

(25,248

)

 

 

(24,460

)

Balance, at the end of period

 

$

54,321

 

 

$

58,079

 

 

$

61,372

 

 

Incremental costs to obtain or fulfill contracts, most notably sales commissions to the independent sales representatives, are not incurred prior to the recognition of the related revenue. Therefore, we have no assets recognized for incremental costs to obtain or fulfill contracts.

(21) Leases

We have operating leases for office space and other real estate and finance leases of office equipment. In aggregate, our leases have remaining lease terms of less than 1 year to 10 years, some of which include options to extend the leases for up to 10 years, and some of which include options to terminate the leases within 2 years, exercisable at the Company’s discretion. Operating lease right-of-use assets and operating lease liabilities are presented separately in our consolidated balance sheets. As of December 31, 2025 and December 31, 2024, finance lease right-of-use assets of $1.0 million and $1.0 million, respectively, and finance lease liabilities of $1.0 million and $1.0 million, respectively, were recorded within Other assets and Other liabilities within our consolidated balance sheets. The Company determines its lease liabilities, which are measured at the present value of future lease payments, using the Company’s incremental secured borrowing rate at the lease commencement date that is commensurate with the term of the underlying lease or the rate implicit in the lease if readily determinable.

106

 

The components of lease expense were as follows:

 

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(In thousands)

 

Operating lease cost

 

 

 

 

 

 

 

 

 

Operating lease cost

 

$

7,171

 

 

$

7,463

 

 

$

7,548

 

Variable lease cost (includes taxes, common area maintenance and insurance)

 

 

836

 

 

 

969

 

 

 

866

 

Finance lease cost

 

 

 

 

 

 

 

 

 

Depreciation of finance lease assets

 

 

274

 

 

 

263

 

 

 

258

 

Interest on lease liabilities

 

 

47

 

 

 

38

 

 

 

37

 

Total lease cost

 

$

8,328

 

 

$

8,733

 

 

$

8,709

 

 

Other information related to leases was as follows:

 

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(In thousands)

 

Supplemental Cash Flows Information

 

 

 

 

 

 

 

 

 

Cash paid for amounts included in the measurement of lease liabilities:

 

 

 

 

 

 

 

 

 

    Operating cash flows used in operating leases (1)

 

$

8,145

 

 

$

6,294

 

 

$

5,609

 

    Operating cash flows used in finance leases (1)

 

 

47

 

 

 

37

 

 

 

37

 

    Financing cash flows used in finance leases

 

 

262

 

 

 

256

 

 

 

265

 

 

(1)
Included in change in other operating assets and liabilities, net in the accompanying consolidated statements of cash flows.

 

 

 

December 31, 2025

 

 

December 31, 2024

 

 

 

 

 

Weighted Average Remaining Lease Term

 

 

 

 

 

 

Operating leases

 

9 years

 

 

10 years

 

Finance leases

 

4 years

 

 

4 years

 

 

 

 

 

 

 

 

Weighted Average Discount Rate

 

 

 

 

 

 

Operating leases

 

 

4.9

%

 

 

4.9

%

Finance leases

 

 

5.3

%

 

 

4.9

%

 

Future minimum lease payments under non-cancellable leases were as follows:

 

 

Operating Leases

 

 

Finance Leases

 

Year Ended December 31,

 

(In thousands)

 

2026

 

$

7,408

 

 

$

283

 

2027

 

 

7,298

 

 

 

281

 

2028

 

 

5,183

 

 

 

281

 

2029

 

 

4,584

 

 

 

194

 

2030

 

 

6,979

 

 

 

71

 

Thereafter

 

 

31,083

 

 

 

-

 

Total minimum rental commitments for operating leases

 

 

62,535

 

 

 

1,110

 

Less imputed interest

 

 

12,970

 

 

 

109

 

Total lease liabilities

 

$

49,565

 

 

$

1,001

 

 

107

 

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

There have been no changes in, or disagreements with, accountants on accounting and financial disclosure matters during the years ended December 31, 2025 and 2024.

ITEM 9A. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of the end of the period covered by this report (the “Evaluation Date”). Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures are effective.

Changes in Internal Control Over Financial Reporting

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fourth quarter of 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Management’s Annual Report On Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. With the participation of the Chief Executive Officer and the Chief Financial Officer, our management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework and criteria established in Internal Control—Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management has concluded that our internal control over financial reporting was effective as of December 31, 2025.

Our independent auditor, KPMG LLP, an independent registered public accounting firm, has issued an attestation report on the effectiveness of our internal control over financial reporting. This attestation report appears below.

108

 

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors
Primerica, Inc.:

Opinion on Internal Control Over Financial Reporting

We have audited Primerica, Inc. and subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes and financial statement schedules I, II, III, and IV (collectively, the consolidated financial statements), and our report dated February 27, 2026 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ KPMG LLP

Atlanta, Georgia

February 27, 2026

109

 

ITEM 9B. OTHER INFORMATION.

 

Trading Plans

 

During the quarter ended December 31, 2025, none of our directors or executive officers adopted, modified or terminated any “Rule 10b5-1 trading arrangement” or any “non-Rule 10b5-1 trading arrangement,” as defined in Item 408 of Regulation S-K, except the following:

 

•
On December 9, 2025, Peter Schneider, the Company’s President, adopted a Rule 10b5-1 trading arrangement that provides for the sale of an aggregate of up to 7,200 shares of the Company’s common stock between March 10, 2026 and November 23, 2026.

 

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.

Not applicable.

 

110

 

PART III

Pursuant to General Instruction G to Form 10-K and as described below, portions of Items 10 through 14 of this report are incorporated by reference from the Company’s definitive Proxy Statement relating to the Company’s 2026 Annual Meeting of Stockholders to be held on May 21, 2026 (the “Proxy Statement”), which will be filed with the SEC within 120 days of December 31, 2025, pursuant to Regulation 14A under the Exchange Act. The Report of the Audit Committee of our Board of Directors and the Report of the Compensation Committee of our Board of Directors to be included in the Proxy Statement shall be deemed to be furnished in this report and shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, as a result of such furnishing.

Our website address is www.primerica.com. You may obtain free electronic copies of our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports from the investors section of our website. These reports are available on our website as soon as reasonably practicable after we electronically file them with the SEC. These reports should also be available through the SEC’s website at www.sec.gov.

We have adopted Corporate Governance Guidelines. Our Corporate Governance Guidelines and the charters of our Board committees are available in the corporate governance subsection of the investor relations section of our website, www.primerica.com, and are also available in print upon written request to the Corporate Secretary, Primerica, Inc., 1 Primerica Parkway, Duluth, GA 30099.

Item 10. Directors, Executive Officers and Corporate Governance.

For a list of executive officers, see “Part I, Item X. Information About Our Executive Officers and Certain Significant Employees”, included elsewhere in this report.

 

We have adopted a written Code of Conduct that applies to directors, officers and employees, including a separate code that applies to only our principal executive officers and senior financial officers in accordance with Section 406 of the Sarbanes-Oxley Act of 2002 and the rules of the SEC promulgated thereunder. Our Code of Conduct is available in the corporate governance subsection of the investor relations section of our website, www.primerica.com, and is available in print upon written request to the Corporate Secretary, Primerica, Inc., 1 Primerica Parkway, Duluth, GA 30099. In the event that we make changes in, or provide waivers from, the provisions of our Code of Conduct that the SEC requires us to disclose, we will disclose these events in the corporate governance section of our website.

 

We have also adopted an Insider Trading Policy that governs the purchase, sale and/or other dispositions of our securities by our directors, officers and employees, and the Company itself, and that is reasonably designed to promote compliance with insider trading laws, rules and regulations, as well as the exchange listing standards applicable to us. In addition, our Insider Trading Policy expressly bans ownership by all employees and directors of financial instruments or participation in investment strategies that hedge the economic risk of owning our common stock. We also prohibit officers and directors from pledging the Company’s securities as collateral for loans. A copy of our Insider Trading Policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K.

 

Except for the information above and the information set forth in “Part I, Item X. Information About Our Executive Officers and Certain Significant Employees”, the information required by this item will be contained under the following headings in the Proxy Statement and is incorporated herein by reference:

•
Matters to be Voted on — Proposal 1: Election of Directors;
•
Governance — Director Independence;
•
Governance — Sustainability Matters — Upholding Strong Governance — Integrity at Work;
•
Board of Directors — Board Members;
•
Board of Directors — Directors Qualifications;
•
Board of Directors — Board Committees;
•
Stock Ownership — Delinquent Section 16(a) Reports;
•
Executive Compensation — Employment Agreements;
•
Audit Matters — Audit Committee Report; and
•
Related Party Transactions.

Item 11. Executive Compensation.

The information required by this item will be contained under the following headings in the Proxy Statement and is incorporated herein by reference:

•
Board of Directors — Board Committees — Compensation Committee;
•
Board of Directors — Director Compensation; and

111

 

•
Executive Compensation (excluding the information under the subheading Pay Versus Performance (PVP)).

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Securities Authorized for Issuance Under Equity Compensation Plans

We have two compensation plans under which our equity securities are authorized for issuance. The Primerica, Inc. 2020 Omnibus Incentive Plan was approved by our stockholders in May 2020. The Primerica, Inc. Stock Purchase Plan for Agents and Employees was approved by our sole stockholder in March 2010. The following table sets forth certain information relating to these equity compensation plans at December 31, 2025.

 

 

 

Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights

 

 

 

Weighted average
exercise price of
outstanding options,
warrants and rights

 

 

 

Number of securities
remaining available
for future issuance

 

 

Equity compensation plans approved by stockholders:

 

 

 

 

 

 

 

 

 

 

 

Primerica, Inc. Second Amended and Restated 2020 Omnibus
   Incentive Plan

 

154,368

 

(1)

 

$

-

 

(2)

 

 

1,002,705

 

(3)

Primerica, Inc. Stock Purchase Plan for Agents and
   Employees

 

-

 

 

 

 

-

 

 

 

 

1,580,596

 

(4)

Total

 

154,368

 

 

 

$

-

 

 

 

 

2,583,301

 

 

Equity compensation plans not approved by stockholders

n/a

 

 

 

n/a

 

 

 

n/a

 

 

 

(1)
Consists of 109,820 shares of our common stock to be issued in connection with unvested restricted stock units. Also includes 44,548 shares of our common stock to be issued to certain executive officers in connection with outstanding performance-based stock units if the Company achieves the targeted level of performance specified in the award agreement over a three-year period. Based on the actual return on adjusted equity and earnings per share growth (if applicable) achieved within the three-year performance period ended December 31, 2025, recipients of the 2023 performance-based stock unit awards will receive 25,451 shares of our common stock compared with the targeted 17,139 shares on the vesting date of March 1, 2026. See Note 14 (Stockholders’ Equity) and Note 16 (Share-Based Transactions) to our consolidated financial statements included elsewhere in this report for more information on the equity awards outstanding.
(2)
At December 31, 2025, there were no outstanding stock options under our equity compensation plans.
(3)
The number of shares of our common stock available for future issuance is 2,442,102 less the cumulative number of awards granted under the plan plus the cumulative number of awards canceled under the plan.
(4)
Represents shares of our common stock, which have already been issued and are outstanding, available to be purchased by employees and agents under the plan. The number of outstanding shares of our common stock available to be purchased is 2,500,000 less the cumulative number of outstanding shares purchased to date under the plan.

 

Other information required by this item will be contained under the following headings in the Proxy Statement and is incorporated

herein by reference:

•
Stock Ownership — Directors and Executive Officers; and
•
Stock Ownership — Principal Stockholders.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

The information required by this item will be contained under the following headings in the Proxy Statement and is incorporated herein by reference:

•
Introductory paragraph to Governance;
•
Governance — Director Independence;
•
Board of Directors — Board Committees; and
•
Related Party Transactions.

Item 14. Principal Accountant Fees and Services.

The information required by this item will be contained under the following headings in the Proxy Statement and is incorporated herein by reference:

•
Matters to be Voted on — Proposal 3: Ratification of the Appointment of KPMG LLP as Our Independent Registered Public Accounting Firm;
•
Board of Directors — Board Committees — Audit Committee; and
•
Audit Matters — Fees and Services of KPMG.

112

 

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

(a) 1. FINANCIAL STATEMENTS

Included in Part II, Item 8, of this report:

Primerica, Inc.:

 

Report of Independent Registered Public Accounting Firm (KPMG LLP, Atlanta, GA, Auditor Firm ID: 185)

 

66

Consolidated Balance Sheets as of December 31, 2025 and 2024

 

68

Consolidated Statements of Income for each of the years in the three-year period ended December 31, 2025

 

69

Consolidated Statements of Comprehensive Income (Loss) for each of the years in the three-year period ended
December 31, 2025

 

70

Consolidated Statements of Stockholders’ Equity for each of the years in the three-year period ended
December 31, 2025

 

71

Consolidated Statements of Cash Flows for each of the years in the three-year period ended December 31, 2025

 

72

Notes to Consolidated Financial Statements

 

73

 

2. FINANCIAL STATEMENT SCHEDULES

Included in Part IV of this report:

 

Schedule I — Consolidated Summary of Investments — Other than Investments in Related Parties as of December 31, 2025

 

117

Schedule II — Condensed Financial Information of Registrant as of December 31, 2025 and 2024, and for each of the years in the three-year period ended December 31, 2025

 

118

Schedule III — Supplementary Insurance Information as of December 31, 2025 and 2024 and for each of the years in the three-year period ended December 31, 2025

 

124

Schedule IV — Reinsurance for each of the years in the three-year period ended December 31, 2025

 

125

 

3. EXHIBIT INDEX –

An “Exhibit Index” has been filed as part of this report beginning on the following page and is incorporated herein by reference.

Schedules other than those listed above are omitted because they are not required, are not material, are not applicable, or the required information is shown in the financial statements or notes thereto.

(b) Exhibit Index.

The agreements included as exhibits to this report are included to provide information regarding the terms of these agreements and are not intended to provide any other factual or disclosure information about the Company or its subsidiaries, our business or the other parties to these agreements. These agreements may contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and:

•
should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;
•
may have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;
•
may apply standards of materiality in a way that is different from what may be viewed as material to our investors; and
•
were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time, and should not be relied upon by investors.

 

Exhibit Number

 

Description

 

Reference

3.1

Amended and Restated Certificate of Incorporation of the Registrant.

 

Incorporated by reference to Exhibit 3.1 to Primerica's Current Report on Form 8-K filed May 24, 2013 (Commission File No. 001-34680).

 

113

 

 

 

 

 

 

3.2

 

Fourth Amended and Restated By-laws of Primerica, Inc.

 

Filed with the Securities and Exchange Commission as part of this Annual Report.

 

 

4.1

Indenture, dated July 16, 2012, between the Registrant and Computershare Trust Company N.A., as successor to Wells Fargo Bank, National Association, as trustee.

Incorporated by reference to Exhibit 4.1 to Primerica’s Current Report on Form 8-K filed July 16, 2012 (Commission File No. 001-34680).

4.2

 

First Supplemental Indenture, dated July 16, 2012, between the Registrant and Computershare Trust Company N.A., as successor to Wells Fargo Bank, National Association, as trustee.

 

Incorporated by reference to Exhibit 4.2 to Primerica’s Current Report on Form 8-K filed November 19, 2021 (Commission File No. 001-34680).

4.3

Second Supplemental Indenture, dated as of November 19, 2021, between the Registrant and Computershare Trust Company N.A., as successor to Wells Fargo Bank, National Association, as trustee.

Incorporated by reference to Exhibit 4.2 to Primerica’s Current Report on Form 8-K filed November 19, 2021 (Commission File No. 001-34680).

4.4

 

Form of 2.800% Senior Notes due 2031 (No. R-1).

 

Incorporated by reference to Exhibit 4.3 to Primerica’s Current Report on Form 8-K filed November 19, 2021 (Commission File No. 001-34680).

 

4.5

Form of 2.800% Senior Notes due 2031 (No. R-2).

Incorporated by reference to Exhibit 4.4 to Primerica’s Current Report on Form 8-K filed November 19, 2021 (Commission File No. 001-34680).

4.6

 

Description of Registrant’s Securities.

 

Filed with the Securities and Exchange Commission as part of this Annual Report.

 

 

10.1

Amended and Restated Credit Agreement, dated as of June 22, 2021 between the Registrant, the Lenders referred to therein, and Wells Fargo Bank, National Association.

Incorporated by reference to Exhibit 10.1 to Primerica’s Current Report on Form 8-K filed June 24, 2021 (Commission File No. 001-34680).

10.2

 

Assignment, Transfer and Novation Agreement dated as of June 23, 2022 between Primerica Life Insurance Company, Pecan Re and Swiss Re Life and Health America Inc.

 

 

Incorporated by reference to Exhibit 10.1 to Primerica’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 (Commission File No. 001-34680).

10.3

Second Amended and Restated 80% Coinsurance Agreement dated as of June 23, 2022 between Primerica Life Insurance Company and Swiss Re Life and Health America Inc.

 

Incorporated by reference to Exhibit 10.2 to Primerica’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 (Commission File No. 001-34680).

 

10.4

 

Reinsurance Trust Agreement dated as of June 23, 2022 between Swiss Re Life and Health America Inc., as Grantor, and Primerica Life Insurance Company, as Beneficiary, and The Bank of New York Mellon, as Trustee.

 

Incorporated by reference to Exhibit 10.3 to Primerica’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 (Commission File No. 001-34680).

 

10.5

90% Coinsurance Agreement dated March 31, 2010 by and between National Benefit Life Insurance Company and American Health and Life Insurance Company.

Incorporated by reference to Exhibit 10.11 to Primerica’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 (Commission File No. 001-34680).

10.6

 

Reinsurance Trust Agreement dated November 23, 2020 among National Benefit Life Insurance Company, American Health and Life Insurance Company, and JP Morgan Chase Bank, N.A.

 

Incorporated by reference to Exhibit 10.15 to Primerica’s Annual Report on Form 10-K for the year ended December 31, 2020 (Commission File No. 001-34680).

10.7

Coinsurance Agreement dated March 31, 2010 by and between Primerica Life Insurance Company of Canada and Financial Reassurance Company 2010, Ltd. (currently known as Munich Re Life Insurance Company of Vermont).

Incorporated by reference to Exhibit 10.13 to Primerica’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 (Commission File No. 001-34680).

10.8

 

Coinsurance Amending Agreement dated as of December 31, 2011 among Primerica Life Insurance Company of Canada and Financial Reassurance Company 2010, Ltd. (currently known as Munich Re Life Insurance Company of Vermont).

 

Incorporated by reference to Exhibit 10.19 to Primerica’s Annual Report on Form 10-K for the year ended December 31, 2016 (Commission File No. 001-34680).

114

 

10.9

Coinsurance Amending Agreement dated as of October 20, 2016 among Primerica Life Insurance Company of Canada, Munich Re Life Insurance Company of Vermont (formerly known as Financial Reassurance Company 2010, Ltd.) and Munich-American Holding Corporation.

Incorporated by reference to Exhibit 10.20 to Primerica’s Annual Report on Form 10-K for the year ended December 31, 2016 (Commission File No. 001-34680).

10.10

 

Coinsurance Agreement Novation Amendment dated as of December 15, 2016 among Primerica Life Insurance Company of Canada, Munich Re Life Insurance Company of Vermont and Munich Re of Malta P.L.C.

 

 

Incorporated by reference to Exhibit 10.19 to Primerica’s Annual Report on Form 10-K for the year ended December 31, 2019 (Commission File No. 001-34680).

10.11

Coinsurance Amending Agreement dated as of January 1, 2018 among Primerica Life Insurance Company of Canada and Munich Re of Malta P.L.C.

 

Incorporated by reference to Exhibit 10.20 to Primerica’s Annual Report on Form 10-K for the year ended December 31, 2019 (Commission File No. 001-34680).

10.12

 

Monitoring and Reporting Agreement dated as of March 31, 2016 by and among Primerica Life Insurance Company and Pecan Re Inc.

 

Incorporated by reference to Exhibit 10.21 to Primerica’s Annual Report on Form 10-K for the year ended December 31, 2016 (Commission File No. 001-34680).

10.13*

Primerica, Inc. Stock Purchase Plan for Agents and Employees.

Incorporated by reference to Exhibit 10.45 to Primerica’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 (Commission File No. 001-34680).

10.14*

 

Primerica, Inc. 2020 Omnibus Incentive Plan.

 

Incorporated by reference to Exhibit 10.1 to Primerica’s Registration Statement on Form S-8 filed (Commission File No. 333-238268)

10.15*

Form of Primerica, Inc. Performance Stock Unit Award Agreement under the Primerica, Inc. 2020 Omnibus Incentive Plan (2023 awards).

 

Incorporated by reference to Exhibit 10.27 to Primerica’s Annual Report on Form 10-K for the year ended December 31, 2023 filed on February 28, 2024 (Commission File No. 001-34680).

 

10.16*

 

Form of Primerica, Inc. Performance Stock Award Agreement under the Primerica, Inc. 2020 Omnibus Incentive Plan (2024 awards).

 

 

Incorporated by reference to Exhibit 10.27 to Primerica’s Annual Report on Form 10-K for the year ended December 31, 2024 filed on February 28, 2025 (Commission File No. 001-34680).

 

10.17*

Form of Primerica, Inc. Performance Stock Award Agreement under the Primerica, Inc. 2020 Omnibus Incentive Plan (2025 awards).

Filed with the Securities and Exchange Commission as part of this Annual Report.

10.18*

 

Form of Executive Team Restricted Stock Unit Award Agreement under the Primerica, Inc. 2020 Omnibus Incentive Plan (2023 Executive Officer awards).

 

 

Incorporated by reference to Exhibit 10.30 to Primerica’s Annual Report on Form 10-K for the year ended December 31, 2023 filed on February 28, 2024 (Commission File No. 001-34680).

 

10.19*

Form of Executive Team Restricted Stock Unit Award Agreement under the Primerica, Inc. 2020 Omnibus Incentive Plan (2024 Executive Officer awards).

 

 

Incorporated by reference to Exhibit 10.30 to Primerica’s Annual Report on Form 10-K for the year ended December 31, 2024 filed on February 28, 2025 (Commission File No. 001-34680).

 

10.20*

 

Form of Leadership Team Restricted Stock Unit Award Agreement under the Primerica, Inc. 2020 Omnibus Incentive Plan (2025 Executive Officer awards).

 

Filed with the Securities and Exchange Commission as part of this Annual Report.

10.21*

Restricted Stock Unit Award Agreement, dated as of October 16, 2023, between Primerica, Inc. and Ms. Tracy X. Tan.

Incorporated by reference to Exhibit 10.2 to Primerica’s Current Report on Form 8-K filed on September 14, 2023 (Commission File No. 001-34680).

10.22*

 

Restricted Stock Unit Award Agreement, dated as of December 12, 2024, between Primerica, Inc. and Mr. Glenn J. Williams.

 

 

 

Incorporated by reference to Exhibit 10.32 to Primerica’s Annual Report on Form 10-K for the year ended December 31, 2024 filed on February 28, 2025 (Commission File No. 001-34680).

 

10.23*

Form of Director Restricted Stock Unit Award Agreement under the Primerica, Inc. 2020 Omnibus Incentive Plan (2025 awards).

 

Filed with the Securities and Exchange Commission as part of this Annual Report.

 

115

 

10.24*

 

Form of Indemnification Agreement for Directors and Officers.

 

Incorporated by reference to Exhibit 10.48 to Primerica’s Registration Statement on Form S-1 (File No. 333-162918).

10.25*

Amended and Restated Employment Agreement, dated as of January 2, 2015, between the Registrant and Mr. Glenn J. Williams.

 

Incorporated by reference to Exhibit 99.4 to Primerica’s Current Report on Form 8-K filed January 5, 2015 (Commission File No. 001-34680).

10.26*

 

Amended and Restated Employment Agreement, dated as of January 2, 2015, between the Registrant and Mr. Peter W. Schneider.

 

Incorporated by reference to Exhibit 99.5 to Primerica’s Current Report on Form 8-K filed January 5, 2015 (Commission File No. 001-34680).

10.27*

Amendment dated as of November 17, 2015 to the Amended and Restated Employment Agreement, dated as of January 2, 2015, between the Registrant and Mr. Peter W. Schneider.

 

Incorporated by reference to Exhibit 10.30 to Primerica’s Annual Report on Form 10-K for the year ended December 31, 2015 (Commission File No. 001-34680).

10.28*

 

Employment Agreement, dated as of September 13, 2023, between Primerica, Inc. and Ms. Tracy X. Tan.

 

Incorporated by reference to Exhibit 10.1 to Primerica’s Current Report on Form 8-K filed on September 14, 2023 (Commission File No. 001-34680).

10.29*

Nonemployee Directors’ Deferred Compensation Plan, effective as of January 1, 2011, adopted on November 10, 2010.

 

Incorporated by reference to Exhibit 10.31 to Primerica’s Annual Report on Form 10-K for the year ended December 31, 2010 (Commission File No. 001-34680).

19.1

 

Primerica, Inc. Insider Trading Policy.

 

Incorporated by reference to Exhibit 19.1 to Primerica’s Annual Report on Form 10-K for the year ended December 31, 2024 filed on February 28, 2025 (Commission File No. 001-34680).

 

21.1

Subsidiaries of the Registrant.

Filed with the Securities and Exchange Commission as part of this Annual Report.

23.1

 

Consent of KPMG LLP.

 

Filed with the Securities and Exchange Commission as part of this Annual Report.

31.1

Rule 13a-14(a)/15d-14(a) Certification, executed by Glenn J. Williams, Chief Executive Officer.

Filed with the Securities and Exchange Commission as part of this Annual Report.

31.2

 

Rule 13a-14(a)/15d-14(a) Certification, executed by Tracy X. Tan, Executive Vice President and Chief Financial Officer.

 

Filed with the Securities and Exchange Commission as part of this Annual Report.

32.1

Certifications required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350), executed by Glenn J. Williams, Chief Executive Officer, and Tracy X. Tan, Executive Vice President and Chief Financial Officer.

Filed with the Securities and Exchange Commission as part of this Annual Report.

97.1

 

Primerica, Inc. Incentive Compensation Recovery Policy.

 

Incorporated by reference to Exhibit 97.1 to Primerica’s Annual Report on Form 10-K for the year ended December 31, 2023 (Commission File No. 001-34680).

101.INS

Inline XBRL Instance Document

The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH

Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents

 

104

Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101).

* Identifies a management contract or compensatory plan or arrangement.

 

116

 

 

(c) Financial Statement Schedules.

 

Schedule I

Consolidated Summary of Investments — Other Than Investments in Related Parties

PRIMERICA, INC.

 

 

 

December 31, 2025

 

Type of Investment

 

Cost

 

 

Fair value

 

 

Amount at which shown in the balance sheet

 

 

 

(In thousands)

 

Fixed maturities:

 

 

 

 

 

 

 

 

 

Bonds (1):

 

 

 

 

 

 

 

 

 

United States government and government agencies and authorities

 

$

162,796

 

 

$

161,814

 

 

$

161,814

 

States, municipalities, and political subdivisions

 

 

136,996

 

 

 

126,932

 

 

 

126,932

 

Foreign governments

 

 

173,732

 

 

 

169,033

 

 

 

169,033

 

Public utilities

 

 

395,137

 

 

 

386,671

 

 

 

386,671

 

All other corporate bonds (1)

 

 

3,693,972

 

 

 

3,582,695

 

 

 

3,605,028

 

Certificates of deposit

 

 

201

 

 

 

201

 

 

 

201

 

Redeemable preferred stocks

 

 

4,248

 

 

 

3,748

 

 

 

3,748

 

Total fixed maturities

 

 

4,567,082

 

 

 

4,431,094

 

 

 

4,453,427

 

 

 

 

 

 

 

 

 

 

 

Equity securities:

 

 

 

 

 

 

 

 

 

Common stocks:

 

 

 

 

 

 

 

 

 

Public utilities

 

 

6,469

 

 

 

10,512

 

 

 

10,512

 

Banks, trusts and insurance companies

 

 

6,667

 

 

 

7,581

 

 

 

7,581

 

Industrial, miscellaneous and all other

 

 

3,011

 

 

 

4,866

 

 

 

4,866

 

Nonredeemable preferred stocks

 

 

4,354

 

 

 

3,474

 

 

 

3,474

 

Total equity securities

 

 

20,501

 

 

 

26,433

 

 

 

26,433

 

Policy loans and other invested assets

 

 

56,233

 

 

 

56,233

 

 

 

56,233

 

Total investments

 

$

4,643,816

 

 

$

4,513,760

 

 

$

4,536,093

 

(1)
The amount shown on the consolidated balance sheet does not match the amortized cost or cost or fair value for “All other corporate bonds” due to our held-to-maturity security, which is carried at cost on the consolidated balance sheet and all other fixed maturities are carried at fair value.

See the report of independent registered public accounting firm.

117

 

Schedule II

Condensed Financial Information of Registrant

PRIMERICA, INC. (Parent Only)

Condensed Balance Sheets

 

 

 

December 31,

 

 

 

2025

 

 

2024

 

 

 

(In thousands)

 

Assets

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

Fixed-maturity securities available-for-sale, at fair value (amortized cost:
   $167,384 in 2025 and $142,939 in 2024)

 

$

166,110

 

 

$

140,336

 

Other investments

 

 

-

 

 

 

191

 

Total investments

 

 

166,110

 

 

 

140,527

 

Cash and cash equivalents

 

 

355,011

 

 

 

356,257

 

Due from affiliates*

 

 

4,555

 

 

 

5,224

 

Other receivables

 

 

1,800

 

 

 

1,706

 

Income tax receivable*

 

 

124,470

 

 

 

-

 

Deferred income taxes

 

 

11,446

 

 

 

36,350

 

Investment in subsidiaries*

 

 

2,559,361

 

 

 

2,343,805

 

Other assets

 

 

854

 

 

 

807

 

Total assets

 

$

3,223,607

 

 

$

2,884,676

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Note payable

 

$

595,315

 

 

$

594,512

 

Loan from affiliate*

 

 

70,000

 

 

 

-

 

Income tax payable

 

 

93,000

 

 

 

21,361

 

Deferred income taxes

 

 

8,410

 

 

 

-

 

Due to affiliates*

 

 

1,555

 

 

 

-

 

Interest payable

 

 

1,913

 

 

 

1,913

 

Other liabilities

 

 

7,512

 

 

 

7,849

 

Commitments and contingent liabilities (see Note G)

 

 

 

 

 

 

Total liabilities

 

 

777,705

 

 

 

625,635

 

 

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

 

 

 

Equity attributable to Primerica, Inc.:

 

 

 

 

 

 

Common stock ($0.01 par value; authorized 500,000 in 2025 and 2024; issued and
   outstanding 31,810 shares in 2025 and 33,368 shares in 2024)

 

 

318

 

 

 

334

 

Paid-in capital

 

 

-

 

 

 

-

 

Retained earnings

 

 

2,416,149

 

 

 

2,231,483

 

Accumulated other comprehensive income (loss), net of income tax

 

 

29,435

 

 

 

27,224

 

Total stockholders’ equity

 

 

2,445,902

 

 

 

2,259,041

 

Total liabilities and stockholders’ equity

 

$

3,223,607

 

 

$

2,884,676

 

* Eliminated in consolidation.

 

See the accompanying notes to condensed financial statements.

See the report of independent registered public accounting firm.

118

 

Schedule II

Condensed Financial Information of Registrant

PRIMERICA, INC. (Parent Only)

Condensed Statements of Income

 

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(In thousands)

 

Revenues:

 

 

 

 

 

 

 

 

 

Dividends from subsidiaries*

 

$

556,052

 

 

$

520,168

 

 

$

555,578

 

Net investment income

 

 

14,673

 

 

 

15,440

 

 

 

12,730

 

Realized investment gains (losses)

 

 

33

 

 

 

85

 

 

 

84

 

Other investment gains (losses)

 

 

252

 

 

 

19

 

 

 

235

 

Investment gains (losses), including credit losses

 

 

285

 

 

 

104

 

 

 

319

 

Other

 

 

-

 

 

 

50,000

 

 

 

-

 

Total revenues

 

 

571,010

 

 

 

585,712

 

 

 

568,627

 

Expenses:

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

18,327

 

 

 

18,043

 

 

 

18,041

 

Other operating expenses

 

 

21,968

 

 

 

21,322

 

 

 

14,858

 

Total expenses

 

 

40,295

 

 

 

39,365

 

 

 

32,899

 

Income from continuing operations before income taxes
   and before equity in undistributed earnings of subsidiaries

 

 

530,715

 

 

 

546,347

 

 

 

535,728

 

Income taxes from continuing operations before equity in undistributed
   earnings of subsidiaries

 

 

(8,724

)

 

 

(1,539

)

 

 

(2,818

)

Income from continuing operations before equity in
   undistributed earnings of subsidiaries

 

 

539,439

 

 

 

547,886

 

 

 

538,546

 

Equity in undistributed earnings of subsidiaries*

 

 

211,795

 

 

 

172,243

 

 

 

52,636

 

Income from continuing operations

 

 

751,234

 

 

 

720,129

 

 

 

591,182

 

Loss from discontinued operations, net of income taxes

 

 

-

 

 

 

(249,611

)

 

 

(14,581

)

Net income

 

$

751,234

 

 

$

470,518

 

 

$

576,601

 

* Eliminated in consolidation.

 

See the accompanying notes to condensed financial statements.

See the report of independent registered public accounting firm.

119

 

Schedule II

Condensed Financial Information of Registrant

PRIMERICA, INC. (Parent Only)

Condensed Statements of Comprehensive Income (Loss)

 

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(In thousands)

 

Net income

 

$

751,234

 

 

$

470,518

 

 

$

576,601

 

Other comprehensive income (loss) before income taxes:

 

 

 

 

 

 

 

 

 

Unrealized investment gains (losses):

 

 

 

 

 

 

 

 

 

Equity in unrealized holding gains (losses) on investment securities
   held by subsidiaries

 

 

72,469

 

 

 

6,866

 

 

 

69,663

 

Change in unrealized holding gains (losses) on investment securities

 

 

1,362

 

 

 

465

 

 

 

1,600

 

Reclassification adjustment for realized investment (gains) losses
   included in net income

 

 

(33

)

 

 

(85

)

 

 

(84

)

Equity in effect of change in discount rate assumptions on the liability for
   future policy benefit of subsidiaries

 

 

(90,239

)

 

 

263,919

 

 

 

(169,502

)

Foreign currency translation adjustments:

 

 

 

 

 

 

 

 

 

Equity in unrealized foreign currency translation gains (losses) of subsidiaries

 

 

18,931

 

 

 

(32,532

)

 

 

10,044

 

Total other comprehensive income (loss) before income taxes

 

 

2,490

 

 

 

238,633

 

 

 

(88,279

)

Income tax expense (benefit) related to items of other comprehensive
   income (loss)

 

 

279

 

 

 

80

 

 

 

319

 

Other comprehensive income (loss), net of income taxes

 

 

2,211

 

 

 

238,553

 

 

 

(88,598

)

Total comprehensive income (loss)

 

$

753,445

 

 

$

709,071

 

 

$

488,003

 

 

See the accompanying notes to condensed financial statements.

See the report of independent registered public accounting firm.

120

 

Schedule II

Condensed Financial Information of Registrant

PRIMERICA, INC. (Parent Only)

Condensed Statements of Cash Flows

 

 

 

Year ended December 31,

 

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

 

(In thousands)

 

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

Net income

 

$

751,234

 

 

$

470,518

 

 

$

576,601

 

 

Adjustments to reconcile net income to cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

 

 

Equity in undistributed earnings of subsidiaries* (1)

 

 

(218,394

)

 

 

110,303

 

 

 

(108,798

)

 

Deferred tax provision

 

 

33,035

 

 

 

(35,209

)

 

 

5,496

 

 

Change in income taxes

 

 

(52,831

)

 

 

38,081

 

 

 

5,840

 

 

Investment (gains) losses

 

 

(285

)

 

 

(104

)

 

 

(319

)

 

Accretion and amortization of investments

 

 

(887

)

 

 

(2,185

)

 

 

(2,201

)

 

Share-based compensation

 

 

4,626

 

 

 

2,636

 

 

 

1,195

 

 

Change in due to/from affiliates*

 

 

2,225

 

 

 

(634

)

 

 

5,235

 

 

Gain on insurance proceeds received from acquisition representation and warranty policy

 

 

-

 

 

 

(50,000

)

 

 

-

 

 

Change in other operating assets and liabilities, net

 

 

332

 

 

 

3,938

 

 

 

1,334

 

 

Net cash provided by (used in) operating activities

 

 

519,055

 

 

 

537,344

 

 

 

484,383

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

Available-for-sale investments matured or called:

 

 

 

 

 

 

 

 

 

 

Fixed-maturity securities — matured or called

 

 

200,185

 

 

 

176,483

 

 

 

93,092

 

 

Short-term investments — matured or called

 

 

-

 

 

 

-

 

 

 

60,008

 

 

Equity securities — sold

 

 

-

 

 

 

-

 

 

 

3,051

 

 

Available-for-sale investments acquired:

 

 

 

 

 

 

 

 

 

 

Fixed-maturity securities (1)

 

 

(191,554

)

 

 

(77,249

)

 

 

(53,539

)

 

Short-term investments

 

 

-

 

 

 

-

 

 

 

(19,496

)

 

Equity securities acquired

 

 

-

 

 

 

-

 

 

 

(236

)

 

Insurance proceeds received from acquisition representation and warranty policy

 

 

-

 

 

 

50,000

 

 

 

-

 

 

Disposal of cash in discontinued operations

 

 

-

 

 

 

(2,768

)

 

 

-

 

 

Other investing activities

 

 

443

 

 

 

(5,811

)

 

 

(16,226

)

 

Net cash provided by (used in) investing activities

 

 

9,074

 

 

 

140,655

 

 

 

66,654

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

Dividends paid

 

 

(136,052

)

 

 

(112,814

)

 

 

(93,715

)

 

Common stock repurchased

 

 

(450,033

)

 

 

(425,035

)

 

 

(375,062

)

 

Excise tax paid on common stock repurchased

 

 

(3,910

)

 

 

(3,390

)

 

 

-

 

 

Proceeds from affiliate loan*

 

 

70,000

 

 

 

-

 

 

 

-

 

 

Tax withholdings on share-based compensation

 

 

(9,380

)

 

 

(9,646

)

 

 

(10,579

)

 

Net cash provided by (used in) financing activities

 

 

(529,375

)

 

 

(550,885

)

 

 

(479,356

)

 

Change in cash and cash equivalents

 

 

(1,246

)

 

 

127,114

 

 

 

71,681

 

 

Cash and cash equivalents, beginning of period

 

 

356,257

 

 

 

229,143

 

 

 

157,462

 

 

Cash and cash equivalents, end of period

 

$

355,011

 

 

$

356,257

 

 

$

229,143

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplement disclosures:

 

 

 

 

 

 

 

 

 

 

Interest paid

 

$

17,054

 

 

$

17,054

 

 

$

17,053

 

 

* Eliminated in consolidation.

(1)
Does not include $32.2 million, $84.9 million, and $81.4 million of fixed-maturity securities transferred from subsidiaries in the form of noncash dividend for the years ended December 31, 2025, 2024 and 2023, respectively.

 

See the accompanying notes to condensed financial statements.

See the report of independent registered public accounting firm.

121

 

Schedule II

Condensed Financial Information of Registrant

PRIMERICA, INC. (Parent Only)

Notes to Condensed Financial Statements

 

(A) Description of Business

Primerica, Inc. (“we”, “us” or the “Company”) is a holding company with our primary asset being the capital stock of our wholly owned operating subsidiaries, and our primary liability being $600.0 million in principal amount of senior unsecured notes issued in a public offering in 2021 (the “Senior Notes”). Our subsidiaries assist clients in meeting their needs for term life insurance, which our insurance subsidiaries underwrite, and mutual funds, annuities, managed investments and other financial products, which our subsidiaries distribute primarily on behalf of third parties. Our primary subsidiaries include the following entities: Primerica Financial Services, LLC, a general agency and marketing company; Primerica Life Insurance Company (“Primerica Life”), our principal life insurance company; PFS Investments Inc., an investment products company and broker-dealer; and Primerica Financial Services (Canada) Ltd., a holding company for our Canadian operations, which includes Primerica Life Insurance Company of Canada and PFSL Investments Canada Ltd. Primerica Life, domiciled in Tennessee, owns National Benefit Life Insurance Company, a New York insurance company. In addition, we established Vidalia Re, Inc. (“Vidalia Re”) as a special purpose financial captive insurance company domiciled in Vermont and a wholly owned subsidiary of Primerica Life.

On September 30, 2024, the Company’s wholly owned subsidiary, Primerica Health, Inc. abandoned its ownership in e-TeleQuote Insurance, Inc. and subsidiaries (collectively, “e-TeleQuote”), a marketer of Medicare-related insurance products underwritten by third-party health insurance carriers to eligible Medicare beneficiaries (the “Senior Health business”), by irrevocably and permanently surrendering and relinquishing all rights in e-TeleQuote to an independent third party without receipt of consideration and with no continuing involvement in its management or operations.

The Company determined that the disposal represented a strategic shift that would have a major impact on the Company’s operations and financial results. The disposal represented a strategic shift as the Senior Health business had been designated as a separate operating segment, and the Board of Directors (“Board”) and management recognized that its previously expected impact on the Company’s operations and financial results would not be realized. Accordingly, the results of operations for the Senior Health business have been reported in discontinued operations for all periods presented in our condensed consolidated statements of income. We had no assets or liabilities remaining from the Senior Health business on our condensed consolidated balance sheets by December 31, 2024.

(B) Basis of Presentation

These condensed financial statements reflect the results of operations, financial position and cash flows for the Company. We prepare our financial statements in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). These principles are established primarily by the Financial Accounting Standards Board. The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect financial statement balances, revenues and expenses and cash flows, as well as the disclosure of contingent assets and liabilities. Management considers available facts and knowledge of existing circumstances when establishing the estimates included in our financial statements.

The most significant item that involves a greater degree of accounting estimates subject to change in the future is the determination of our investments in subsidiaries. Estimates for this and other items are subject to change and are reassessed by management in accordance with U.S. GAAP. Actual results could differ from those estimates.

The accompanying condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto of Primerica, Inc. and subsidiaries included in Part II, Item 8 of this report.

(C) Note Payable

 

As of December 31, 2025, we had $600.0 million in principal amount of publicly-traded, senior unsecured notes (the “Senior Notes”). The Senior Notes were issued in November 2021 at a price of 99.55% of the principal amount with an annual interest rate of 2.80%, payable semi-annually in arrears on May 19 and November 19, and are scheduled to mature on November 19, 2031. As of December 31, 2025, we were in compliance with the covenants of the Senior Notes. No events of default occurred on the Senior Notes during the year ended December 31, 2025.

 

As unsecured senior obligations, the Senior Notes rank equally in right of payment with all existing and future unsubordinated indebtedness and senior to all existing and future subordinated indebtedness of the Company. The Senior Notes are structurally subordinated in right of payment to all existing and future liabilities of our subsidiaries. In addition, the Senior Notes contain

122

 

covenants that restrict our ability to, among other things, create or incur any indebtedness that is secured by a lien on the capital stock of certain of our subsidiaries, and merge, consolidate or sell all or substantially all of our properties and assets.

(D) Loan from Affiliate

 

In November 2025, we entered into a $70.0 million revolving line of credit agreement (“Affiliate Credit Facility”) with Primerica Life as lender. The Affiliate Credit Facility has a scheduled termination date of January 1, 2028. Amounts outstanding under the Affiliate Credit Facility are borrowed, at our discretion, at a rate equal to 4.0% annually on principal amounts for the period outstanding. Amounts may be drawn and paid down without penalty. During the year ended December 31, 2025, we drew $70.0 million and, as of December 31, 2025, we had $70.0 million in principal amount due. The balance of the loan from affiliate is fully offset by the corresponding loan receivable held by our Primerica Life subsidiary that is included in investments in subsidiaries in the accompanying condensed balance sheet at December 31, 2025.

(E) Revolving Credit Facility

 

On June 22, 2021, we amended and restated our unsecured $200.0 million revolving credit facility (“Revolving Credit Facility”) with a syndicate of commercial banks. The Revolving Credit Facility has a scheduled termination date of June 22, 2026. Amounts outstanding under the Revolving Credit Facility are borrowed, at our discretion, on the basis of either a Secured Overnight Financing Rate (“SOFR”) rate loan, or a base rate loan. SOFR rate loans bear interest at a periodic rate equal to one-, three-, or six-month Adjusted Term SOFR, plus an applicable margin. Base rate loans bear interest at the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50% and (c) one-month Adjusted Term SOFR plus 1.00%, plus an applicable margin. The Revolving Credit Facility also permits the issuance of letters of credit. The applicable margins are based on our debt rating with such margins for SOFR rate loans and letters of credit ranging from 1.00% to 1.625% per annum and for base rate loans ranging from 0.00% to 0.625% per annum. Under the Revolving Credit Facility, we incur a commitment fee that is payable quarterly in arrears and is determined by our debt rating. This commitment fee ranges from 0.10% to 0.225% per annum of the aggregate amount of the $200.0 million commitment of the lenders under the Revolving Credit Facility that remains undrawn. During the year ended December 31, 2024, no amounts were drawn under the Revolving Credit Facility. As of December 31, 2025, we were in compliance with the covenants of the Revolving Credit Facility. Furthermore, no events of default occurred under the Revolving Credit Facility during the year ended December 31, 2025.

(F) Dividends

For the years ended December 31, 2025, 2024, and 2023, the Company received dividends from our non-life insurance subsidiaries of $239.1 million, $208.4 million, and $203.2 million, respectively. For the years ended December 31, 2025, 2024, and 2023, the Company received dividends from our life insurance subsidiaries of $317.0 million, $311.8 million, and $352.3 million, respectively.

(G) Commitments and Contingent Liabilities

 

Vidalia Re has entered into a coinsurance agreement with Primerica Life whereby Primerica Life has ceded certain level-premium term life insurance policies to Vidalia Re. In conjunction with the coinsurance agreement, we have a capital maintenance agreement with Vidalia Re. The capital maintenance agreement may require us at times to make capital contributions to Vidalia Re to ensure that its regulatory account, as defined in the coinsurance agreement with Primerica Life, will not be less than $20.0 million for the financial captive insurance company. The regulatory account will only be used to satisfy obligations under its coinsurance agreement after all other available assets have been used, including its held-to-maturity security ultimately guaranteed by Hannover Life Reassurance Company of America.

 

The Company is involved from time-to-time in legal disputes, regulatory inquiries and arbitration proceedings in the normal course of business. These disputes are subject to uncertainties, including large and/or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation. As such, the Company is unable to estimate the possible loss or range of loss that may result from these matters.

123

 

Schedule III

Supplementary Insurance Information

PRIMERICA, INC.

 

 

 

Deferred policy acquisition costs

 

 

Future policy benefits

 

 

Unearned and advance premiums

 

 

Policy claims and other benefits payable

 

 

Separate account liabilities

 

 

 

(In thousands)

 

December 31, 2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Term Life Insurance

 

$

3,845,442

 

 

$

6,614,501

 

 

$

15,238

 

 

$

485,331

 

 

$

-

 

Investment and Savings Products

 

 

55,139

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,281,498

 

Corporate and Other Distributed Products

 

 

15,417

 

 

 

203,678

 

 

 

283

 

 

 

10,025

 

 

 

22

 

Total

 

$

3,915,998

 

 

$

6,818,179

 

 

$

15,521

 

 

$

495,356

 

 

$

2,281,520

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Term Life Insurance

 

$

3,608,599

 

 

$

6,300,693

 

 

$

15,277

 

 

$

478,857

 

 

$

-

 

Investment and Savings Products

 

 

55,303

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,209,266

 

Corporate and Other Distributed Products

 

 

16,528

 

 

 

202,371

 

 

 

329

 

 

 

9,493

 

 

 

21

 

Total

 

$

3,680,430

 

 

$

6,503,064

 

 

$

15,606

 

 

$

488,350

 

 

$

2,209,287

 

 

See the report of independent registered public accounting firm.

 

 

 

 

Premium revenue

 

 

Net investment income

 

 

Benefits and claims

 

 

Amortization of deferred policy acquisition costs

 

 

Other operating expenses

 

 

Premiums written

 

 

 

(In thousands)

 

Year ended December 31, 2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Term Life Insurance

 

$

1,771,687

 

 

$

-

 

 

$

651,544

 

 

$

316,411

 

 

$

230,794

 

 

$

-

 

Investment and Savings Products

 

 

-

 

 

 

-

 

 

 

-

 

 

 

5,381

 

 

 

887,328

 

 

 

-

 

Corporate and Other Distributed Products

 

 

12,216

 

 

 

167,152

 

 

 

14,383

 

 

 

1,111

 

 

 

210,197

 

 

 

459

 

Total

 

$

1,783,903

 

 

$

167,152

 

 

$

665,927

 

 

$

322,903

 

 

$

1,328,319

 

 

$

459

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year ended December 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Term Life Insurance

 

$

1,715,934

 

 

$

-

 

 

$

635,354

 

 

$

291,488

 

 

$

237,356

 

 

$

-

 

Investment and Savings Products

 

 

-

 

 

 

-

 

 

 

-

 

 

 

5,443

 

 

 

749,054

 

 

 

-

 

Corporate and Other Distributed Products

 

 

13,237

 

 

 

155,501

 

 

 

12,809

 

 

 

1,205

 

 

 

217,187

 

 

 

526

 

Total

 

$

1,729,171

 

 

$

155,501

 

 

$

648,163

 

 

$

298,136

 

 

$

1,203,597

 

 

$

526

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year ended December 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Term Life Insurance

 

$

1,644,756

 

 

$

-

 

 

$

622,084

 

 

$

268,803

 

 

$

249,991

 

 

$

-

 

Investment and Savings Products

 

 

-

 

 

 

-

 

 

 

-

 

 

 

5,479

 

 

 

616,960

 

 

 

-

 

Corporate and Other Distributed Products

 

 

15,558

 

 

 

135,837

 

 

 

20,895

 

 

 

1,534

 

 

 

191,023

 

 

 

557

 

Total

 

$

1,660,314

 

 

$

135,837

 

 

$

642,979

 

 

$

275,816

 

 

$

1,057,974

 

 

$

557

 

 

See the report of independent registered public accounting firm.

124

 

Schedule IV

Reinsurance

PRIMERICA, INC.

 

 

 

Year ended December 31, 2025

 

 

 

Gross amount

 

 

Ceded to other companies

 

 

Assumed from other companies

 

 

Net amount

 

 

Percentage of amount assumed to net

 

 

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Life insurance in force

 

$

969,529,768

 

 

$

827,832,374

 

 

$

-

 

 

$

141,697,394

 

 

 

—

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Premiums:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Life insurance

 

$

3,462,282

 

 

$

1,678,874

 

 

$

-

 

 

$

1,783,408

 

 

 

—

%

Accident and health insurance

 

 

498

 

 

 

3

 

 

 

-

 

 

 

495

 

 

 

—

%

Total premiums

 

$

3,462,780

 

 

$

1,678,877

 

 

$

-

 

 

$

1,783,903

 

 

 

—

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year ended December 31, 2024

 

 

 

Gross amount

 

 

Ceded to other companies

 

 

Assumed from other companies

 

 

Net amount

 

 

Percentage of amount assumed to net

 

 

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Life insurance in force

 

$

955,610,523

 

 

$

817,825,296

 

 

$

-

 

 

$

137,785,227

 

 

 

—

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Premiums:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Life insurance

 

$

3,393,055

 

 

$

1,664,433

 

 

$

-

 

 

$

1,728,622

 

 

 

—

%

Accident and health insurance

 

 

549

 

 

 

-

 

 

 

-

 

 

 

549

 

 

 

—

%

Total premiums

 

$

3,393,604

 

 

$

1,664,433

 

 

$

-

 

 

$

1,729,171

 

 

 

—

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year ended December 31, 2023

 

 

 

Gross amount

 

 

Ceded to other companies

 

 

Assumed from other companies

 

 

Net amount

 

 

Percentage of amount assumed to net

 

 

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Life insurance in force

 

$

946,756,416

 

 

$

810,145,801

 

 

$

-

 

 

$

136,610,615

 

 

 

—

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Premiums:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Life insurance

 

$

3,311,541

 

 

$

1,651,811

 

 

$

-

 

 

$

1,659,730

 

 

 

—

%

Accident and health insurance

 

 

584

 

 

 

-

 

 

 

-

 

 

 

584

 

 

 

—

%

Total premiums

 

$

3,312,125

 

 

$

1,651,811

 

 

$

-

 

 

$

1,660,314

 

 

 

—

%

 

See the report of independent registered public accounting firm.

 

ITEM 16. FORM 10-K SUMMARY.

Not applicable.

 

125

 

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Primerica, Inc.

By:

/s/ Tracy X. Tan

 

February 27, 2026

 

Tracy X. Tan

 

Executive Vice President and

 

Chief Financial Officer

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

/s/ D. Richard Williams

Chairman of the Board

February 27, 2026

 

D. Richard Williams

/s/ Glenn J. Williams

Chief Executive Officer (Principal Executive Officer) and Director

February 27, 2026

 

Glenn J. Williams

/s/ Tracy X. Tan

Executive Vice President and Chief Financial Officer (Principal Financial Officer)

February 27, 2026

 

Tracy X. Tan

 

 

 

 

/s/ Nicholas A. Jendusa

Executive Vice President and Chief Accounting Officer (Principal Accounting Officer)

 

February 27, 2026

 

 

 

Nicholas A. Jendusa

 

 

 

 /s/ John A. Addison, Jr.

 Director

February 27, 2026

 

 John A. Addison, Jr.

/s/ Joel M. Babbit

Director

February 27, 2026

 

Joel M. Babbit

/s/ Amber L. Cottle

Director

February 27, 2026

 

Amber L. Cottle

/s/ Gary L. Crittenden

Director

February 27, 2026

 

Gary L. Crittenden

/s/ Cynthia N. Day

Director

February 27, 2026

 

Cynthia N. Day

/s/ Sanjeev Dheer

Director

February 27, 2026

 

Sanjeev Dheer

 

/s/ Beatriz R. Perez

Director

February 27, 2026

 

Beatriz R. Perez

126

 

/s/ Darryl L. Wilson

Director

February 27, 2026

 

Darryl L. Wilson

/s/ Barbara A. Yastine

Director

February 27, 2026

 

Barbara A. Yastine

 

 

 

 

 

127

EXHIBIT 3.2

FOURTH AMENDED AND RESTATED
BY-LAWS

OF

PRIMERICA, INC.

A Delaware corporation

 

Effective February 20, 2026

 

Table of Contents

 

Page

 

ARTICLE I

OFFICES

Section 1. Registered Office 4

Section 2. Other Offices 4

ARTICLE II

MEETINGS OF STOCKHOLDERS

Section 1. Place of Meetings 4

Section 2. Annual Meetings 4

Section 3. Special Meetings 5

Section 4. Notice 8

Section 5. Nature of Business at Meetings of Stockholders 8

Section 6. Nomination of Directors 10

Section 7. Proxy Access 14

Section 8. Adjournments 22

Section 9. Quorum 23

Section 10. Voting 23

Section 11. Proxies 23

Section 12. Consent of Stockholders in Lieu of Meeting 24

Section 13. List of Stockholders Entitled to Vote 25

Section 14. Record Date 25

Section 15. Stock Ledger 26

Section 16. Conduct of Meetings 26

Section 17. Inspectors of Election 27

ARTICLE III

DIRECTORS

Section 1. Election of Directors 27

Section 2. Vacancies 28

Section 3. Duties and Powers 28

Section 4. Chairman of the Board of Directors 28

Section 5. Lead Independent Director 29

Section 6. Meetings 29

Section 7. Organization 29

Section 8. Resignations and Removals of Directors 30

Section 9. Quorum 30

Section 10. Actions of the Board by Written Consent 30

Section 11. Meetings by Means of Conference Telephone 30

 

-i-

 

 

Table of Contents

(continued)

Page

 

Section 12. Committees 31

Section 13. Compensation 31

ARTICLE IV

OFFICERS

Section 1. General 32

Section 2. Election 32

Section 3. Voting Securities Owned by the Corporation 32

Section 4. Chief Executive Officer 32

Section 5. President 33

Section 6. Vice Presidents 33

Section 7. Corporate Secretary 34

Section 8. Treasurer 34

Section 9. Assistant Corporate Secretaries 34

Section 10. Assistant Treasurers 35

Section 11. Other Officers 35

Section 12. Duties of Officers 35

ARTICLE V

STOCK

Section 1. Shares of Stock 35

Section 2. Lost Certificates 36

Section 3. Transfers 36

Section 4. Signatures 36

Section 5. Dividend Record Date 36

Section 6. Record Owners 37

Section 7. Transfer and Registry Agents 37

ARTICLE VI

NOTICES

Section 1. Notices 37

Section 2. Waivers of Notice 38

ARTICLE VII

GENERAL PROVISIONS

Section 1. Dividends 38

 

-ii-

 

 

Table of Contents

(continued)

Page

 

Section 2. Disbursements 38

Section 3. Fiscal Year 38

Section 4. Corporate Seal 39

Section 5. Facsimile Signatures 39

ARTICLE VIII

INDEMNIFICATION

Section 1. Power to Indemnify in Actions, Suits or Proceedings other than Those by or in the Right of the Corporation 39

Section 2. Power to Indemnify in Actions, Suits or Proceedings by or in the Right of the Corporation 39

Section 3. Authorization of Indemnification 40

Section 4. Good Faith Defined 40

Section 5. Indemnification by a Court 40

Section 6. Expenses Payable in Advance 41

Section 7. Nonexclusivity of Indemnification and Advancement of Expenses 41

Section 8. Insurance 41

Section 9. Certain Definitions 42

Section 10. Survival of Indemnification and Advancement of Expenses 42

Section 11. Limitation on Indemnification 42

Section 12. Indemnification of Employees and Agents 42

ARTICLE IX

AMENDMENTS

Section 1. Amendments 43

Section 2. Entire Board of Directors 43

 

 

 

-iii-

 

 

 

FOURTH AMENDED AND RESTATED BY-LAWS

OF

PRIMERICA, INC.

(hereinafter called the “Corporation”)

 

ARTICLE I


OFFICES
Section 1.
Registered Office.

The registered office of the Corporation shall be in the City of Wilmington, County of New Castle, State of Delaware.

Section 2.
Other Offices.

The Corporation may also have offices at such other places, both within and without the State of Delaware, as the Board of Directors may from time to time determine.

ARTICLE II


MEETINGS OF STOCKHOLDERS
Section 1.
Place of Meetings.

Meetings of the stockholders for the election of directors or for any other purpose shall be held at such time and place, either within or without the State of Delaware, as shall be designated from time to time by the Board of Directors. The Board of Directors may, in its sole discretion, determine that a meeting of the stockholders shall not be held at any place, but may instead be held solely by means of remote communication in the manner authorized by the General Corporation Law of the State of Delaware (the “GCL”).

Section 2.
Annual Meetings.

The annual meeting of stockholders (each, an “Annual Meeting”) for the election of directors shall be held on such date and at such time as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting. Any other proper business may be transacted at the Annual Meeting.

Section 3.
Special Meetings.
(a)
General.

4

 

 

(i)
Except as otherwise required by law or by the certificate of incorporation of the Corporation, as amended and restated from time to time (the “Certificate of Incorporation”), special meetings of stockholders (each, a “Special Meeting”) may be called, for any purpose or purposes, by any of: (A) the Chairman of the Board of Directors; (B) the Chief Executive Officer; or (C) any officer of the Corporation at the request in writing of (1) the Board of Directors or (2) a committee of the Board of Directors that has been duly designated by the Board of Directors and whose powers and authority include the power to call such meetings. For the avoidance of doubt, the Board of Directors shall be permitted to submit matters to the stockholders at any Special Meeting requested by the stockholders pursuant to ‎Section 3(b) of this Section II.
(ii)
At a Special Meeting, only such business shall be conducted as shall be specified in the notice of meeting (or any supplement thereto).
(b)
Special Meeting Requested by Stockholders.
(i)
Subject to compliance with this Section 3(b) of this Article II and any other applicable provisions of these By-Laws, a Special Meeting shall be called by the Board of Directors upon written request to the Corporate Secretary (each, a “Special Meeting Request”), of one or more stockholders of record of shares of stock of the Corporation who “own” (as defined in Section 7(c)(iv) of this Article II), or if such Special Meeting Request is made by such stockholder on behalf of one or more beneficial owners, such beneficial owners who own, in the aggregate not less than a majority of the voting power of all the shares of stock of the Corporation entitled to vote on the matter or matters to be brought before the proposed special meeting (the “Requisite Percentage”) as of the date the Special Meeting Request is delivered to the Corporate Secretary and for the twelve (12) months preceding such date.
(ii)
A Special Meeting Request: (A) must be signed and dated by each stockholder of record of shares of stock of the Corporation, or a duly authorized agent of such stockholder, requesting the Special Meeting (each, a “Requesting Stockholder”); (B) must be delivered to or mailed and received by the Corporate Secretary at the principal executive offices of the Corporation; and (C) must comply with this Section 3(b) of this Article II and, as applicable, Section 5 of this Article II (in connection with any business other than nominations for election to the Board of Directors) and Section 6 of this Article II (in connection with nominations for election to the Board of Directors).
(iii)
A Special Meeting Request shall include: (A) a statement of the specific purpose or purposes of, and the matters proposed to be acted on at, the Special Meeting (including, as to each matter that the Requesting Stockholders seek to bring before the Special Meeting, a brief description of such matter, the specific text of any resolutions or actions proposed for consideration and, if such business includes a proposal to amend the Certificate of Incorporation or these By-Laws, the specific language of the proposed amendment), the reasons for conducting such business at the Special Meeting and any material interest that the Requesting Stockholders and the beneficial owners, if any, on whose behalf the Special Meeting Request is made, have in the proposal or business; (B) all the information required to be set forth in a stockholder’s notice under Section 5 of this Article II (in connection with business other than nominations for election to the Board of Directors) and under Section 6 of this Article II (in connection with nominations for election to the Board of Directors), as applicable, which information the Requesting Stockholders

5

 

 

are obligated to update and supplement in accordance with the provisions of Section 5 of this Article II and Section 6 of this Article II, as applicable, as if a stockholder’s notice thereunder; (C) an acknowledgement by the Requesting Stockholders and the beneficial owners, if any, on whose behalf the Special Meeting Request is made, that (1) a disposition of shares of the Corporation’s stock owned of record or beneficially as of the date on which the Special Meeting Request in respect of such shares is delivered to the Corporate Secretary that is made at any time prior to the Special Meeting shall constitute and be deemed a revocation of such Special Meeting Request with respect to such disposed shares, and an agreement by the Requesting Stockholders and such beneficial owners to notify the Corporation promptly upon any such disposition, and (2) the Special Meeting Request shall be deemed to be revoked, and any Special Meeting scheduled in response may be canceled, if the shares of the Corporation’s stock owned by the Requesting Stockholders and the beneficial owners, if any, on whose behalf the Special Meeting Request is made do not represent ownership of at least the Requisite Percentage at all times between the date on which the Special Meeting Request is received by the Corporate Secretary and the date of such Special Meeting; and (D) documentary evidence that the Requesting Stockholders or the beneficial owners, if any, on whose behalf the Special Meeting Request is being made own the Requisite Percentage as of the date of such written request to the Corporate Secretary and have owned the Requisite Percentage for the twelve (12) months preceding such date; provided, however, that if the Requesting Stockholders are not the beneficial owners of the shares representing the Requisite Percentage, then to be valid, the Special Meeting Request must also include documentary evidence (or, if not simultaneously provided with any Special Meeting Request, such documentary evidence must be delivered to the Corporate Secretary within ten (10) days after the date on which such Special Meeting Request is delivered to the Corporate Secretary) that the beneficial owners on whose behalf the Special Meeting Request is being made own the Requisite Percentage as of the date on which such Special Meeting Request is delivered to the Corporate Secretary and for such twelve (12)-month period. In addition, the Requesting Stockholders and the beneficial owners, if any, on whose behalf the Special Meeting Request is being made, shall promptly provide any other information reasonably requested by the Corporation.
(iv)
Special Meetings shall be held on such date, time and place, if any, within or without the State of Delaware, as may be designated by the Board of Directors; provided, however, that in the case of a Special Meeting requested by stockholders, the date of any such Special Meeting shall not be more than ninety (90) days after the date that a Special Meeting Request that satisfies the requirements of these By-Laws is received by the Corporate Secretary. The Board of Directors shall also set a record date for the determination of stockholders entitled to vote at a Special Meeting requested by stockholders in the manner set forth in Section 2.14 of this Article II. Each Requesting Stockholder and the beneficial owners, if any, on whose behalf the Special Meeting Request is being made, are required to update, and deliver to the Corporate Secretary at the principal executive offices of the Corporation, the documentary evidence required by Section 3(b)(iii)(D) of this Article II as of a date within ten (10) days after such record date for, and as of a date within three (3) business days before the date of, such Special Meeting. The Board of Directors may adjourn, postpone, reschedule or, if in accordance with these By-Laws, cancel any Special Meeting requested by stockholders that is previously scheduled pursuant to this Section 3(b) of this Article II.
(v)
Notwithstanding the foregoing provisions of this Section 3(b) of this Article II, the Board of Directors shall not be required to call a Special Meeting requested by stockholders,

6

 

 

and such a Special Meeting shall not be held, if: (A) the Special Meeting Request does not comply with this Section 3(b) of this Article II and each other applicable requirement of these By-Laws; (B) the Special Meeting Request relates to an item of business that is not a proper subject for stockholder action under applicable law, the Certificate of Incorporation or these By-Laws; (C) the Special Meeting Request is received by the Corporate Secretary during the period commencing ninety (90) days prior to the first anniversary of the date of the immediately preceding Annual Meeting and ending on the date of the next Annual Meeting; (D) an Annual Meeting or Special Meeting that included an identical or substantially similar item of business (“Similar Business”) was held not more than one-hundred twenty (120) days before the date the that the Special Meeting Request was received by the Corporate Secretary; (E) the Board of Directors has called or calls for an Annual Meeting or a Special Meeting to be held within ninety (90) days after the date that the Special Meeting Request is received by the Corporate Secretary and the business to be conducted at such meeting includes the Similar Business; (F) the Special Meeting Request was made in a manner that involved a violation of Regulation 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations promulgated thereunder, or other applicable law; or (G) any information submitted pursuant to this Section 3(b) of this Article II by or on behalf of any Requesting Stockholder or beneficial owner is inaccurate in any material respect. For purposes of this Section 3(b) of this Article II, the nomination, election or removal of directors shall be deemed to be Similar Business with respect to all items of business involving the nomination, election or removal of directors, changing the size of the Board of Directors and filling of vacancies and/or newly created directorships resulting from any increase in the authorized number of directors. The Board of Directors shall determine in good faith whether the requirements set forth in this Section 3(b) of this Article II have been satisfied.
(vi)
In determining whether a Special Meeting has been requested by the stockholders of record of shares of stock of the Corporation representing in the aggregate at least the Requisite Percentage, multiple Special Meeting Requests delivered to the Corporate Secretary will be considered together only if: (A) each Special Meeting Request identifies substantially the same purpose or purposes of the Special Meeting and substantially the same matters proposed to be acted on at the Special Meeting (in each case as determined in good faith by the Board of Directors); and (B) such Special Meeting Requests have been dated and delivered to the Corporate Secretary within thirty (30) days of the earliest dated Special Meeting Request identifying substantially the same purpose or purposes.
(vii)
A Requesting Stockholder may revoke a request for a Special Meeting at any time by written revocation delivered to the Corporate Secretary at the principal executive offices of the Corporation and if, following such revocation or any deemed revocation of a Special Meeting Request as contemplated by Section 3(b)(iii)(C) of this Article II, there are outstanding un-revoked requests from Requesting Stockholders holding less than the Requisite Percentage, then the Board of Directors may choose not to call, or may cancel the Special Meeting, with respect to the business to be conducted pursuant to the Special Meeting Request, in each case in the sole and final discretion of the Board of Directors. If none of the Requesting Stockholders appears or sends a duly authorized agent to present the business to be presented for consideration that was specified in the relevant Special Meeting Request, then the Corporation need not present such business for a vote at such Special Meeting regardless of whether proxies have been solicited with respect to such matters.

7

 

 

(viii)
Business conducted at a Special Meeting requested by stockholders pursuant to this Section 3(b) of this Article II shall be limited to matters described in the applicable Special Meeting Request and set forth in the notice of such Special Meeting; provided, however, that the Board of Directors shall have the authority in its sole and final discretion to submit additional matters in the notice for such Special Meeting and to cause other business to be transacted at such Special Meeting.
Section 4.
Notice.

A written notice of any meeting of stockholders shall be given which shall state the place, if any, date and hour of the meeting, the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting, and, in the case of a Special Meeting, the purpose or purposes for which the meeting is called. Unless otherwise required by law, written notice of any meeting shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to notice of and to vote at such meeting.

Section 5.
Nature of Business at Meetings of Stockholders.

Only such business (other than nominations for election to the Board of Directors, which must comply with Section 6 of this Article II and, if applicable, Section 7 of this Article II) may be transacted at an Annual Meeting or Special Meeting as is (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors (or any duly authorized committee thereof), (b) otherwise properly brought before the Annual Meeting or Special Meeting by or at the direction of the Board of Directors (or any duly authorized committee thereof), or (c) otherwise properly brought before the Annual Meeting or Special Meeting by any stockholder of the Corporation (i) who was a stockholder of record on the date of the giving of the notice provided for in this Section 5 of this Article II and on the date of such Annual Meeting or Special Meeting, (ii) who is entitled to vote at such Annual Meeting or Special Meeting and (iii) who complies with the notice procedures set forth in this Section 5 of this Article II.

Notwithstanding the foregoing, at a Special Meeting, only such business shall be conducted as shall be specified in the notice of meeting (or any supplement thereto).

In addition to any other applicable requirements, for business to be properly brought before an Annual Meeting or Special Meeting by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Corporate Secretary of the Corporation.

To be timely, a stockholder's notice of business (other than a Special Meeting Request for a Special Meeting pursuant to Section 3(b) of this Article II and other than nominations of persons for election to the Board of Directors, which must be made in compliance with and is governed by Section 6 of this Article II and, if applicable, Section 7 of this Article II) to the Corporate Secretary must be delivered to or mailed and received by the Corporate Secretary at the principal executive offices of the Corporation in the case of (a) an Annual Meeting, not less than ninety (90) days nor more than one hundred twenty (120) days prior to the anniversary date of the immediately preceding Annual Meeting; provided, however, that in the event that the Annual Meeting is called for a date that is not within thirty (30) days before or after such anniversary date, notice by the

8

 

 

stockholder in order to be timely must be so received not later than the close of business on the tenth (10th) day following the day on which such notice of the date of the Annual Meeting was mailed or such public disclosure of the date of the Annual Meeting was made, whichever first occurs; and (b) a Special Meeting, not less than ninety (90) days prior to the date on which the Special Meeting is proposed to be held. In no event shall the adjournment or postponement of an Annual Meeting or Special Meeting, or the public announcement of such an adjournment or postponement, commence a new time period (or extend any time period) for the giving of a stockholder's notice as described above.

To be in proper written form, a stockholder’s notice to the Corporate Secretary (including a Special Meeting Request for a Special Meeting pursuant to Section 3(b) of this Article II) must set forth the following information: (a) as to each matter such stockholder proposes to bring before the Annual Meeting or Special Meeting, a brief description of the business desired to be brought before the Annual Meeting or Special Meeting (including the specific text of any resolutions or actions proposed for consideration and if such business includes a proposal to amend the Certificate of Incorporation or these By-Laws, the specific language of the proposed amendment) and the reasons for conducting such business at the Annual Meeting or Special Meeting, and (b) as to the stockholder giving notice and the beneficial owner, if any, on whose behalf the proposal is being made, (i) the name and address of such person, as they appear on the Corporation's books (and, if different from the Corporation's books, the name and residence address of such person), (ii) (A) the class or series and number of all shares of stock of the Corporation which are owned beneficially or of record by such person and any affiliates or associates of such person, (B) the name and address of each nominee holder of shares of all stock of the Corporation owned beneficially, but not of record, by such person or any affiliates or associates of such person, and the number of such shares of stock of the Corporation held by each such nominee holder, (C) whether and the extent to which any derivative instrument, swap, option, warrant, short interest, hedge or profit interest or other transaction has been entered into by or on behalf of such person, or any affiliates or associates of such person, with respect to stock of the Corporation and (D) whether and the extent to which any other transaction, agreement, arrangement or understanding (including any short position or any borrowing or lending of shares of stock of the Corporation) has been made by or on behalf of such person, or any affiliates or associates of such person, the effect or intent of any of the foregoing being to mitigate loss to, or to manage risk or benefit of stock price changes for, such person, or any affiliates or associates of such person, or to increase or decrease the voting power or pecuniary or economic interest of such person, or any affiliates or associates of such person, with respect to stock of the Corporation; (iii) a description of all agreements, arrangements or understandings (whether written or oral and including financial transactions and direct or indirect compensation) between or among such person, or any affiliates or associates of such person, and any other person or persons (including their names) in connection with the proposal of such business and any material interest of such person or any affiliates or associates of such person, in such business, including any anticipated benefit therefrom to such person, or any affiliates or associates of such person, (iv) a representation that the stockholder giving notice intends to appear in person or by proxy at the Annual Meeting or Special Meeting to bring such business before the meeting; and (v) any other information relating to such person or any affiliates or associates of such person that would be required to be disclosed in a proxy statement or other filing required to be made in connection with the solicitation of proxies or consents (even if a solicitation is not involved) by such person with respect to the proposed

9

 

 

business to be brought by such person before the Annual Meeting pursuant to Section 14 of the Exchange Act, and the rules and regulations promulgated thereunder.

A stockholder providing notice of business proposed to be brought before an Annual Meeting or Special Meeting (including, with respect to a Special Meeting, a Requesting Stockholder submitting a Special Meeting Request pursuant to Section 3(b) of this Article II) shall further update and supplement such notice, if necessary, so that the information provided or required to be provided in such notice pursuant to this Section 5 of this Article II shall be true and correct as of the record date for determining the stockholders entitled to receive notice of the Annual Meeting or Special Meeting and such update and supplement shall be delivered to or be mailed and received by the Corporate Secretary at the principal executive offices of the Corporation not later than five (5) business days after the record date for determining the stockholders entitled to receive notice of the Annual Meeting or Special Meeting (in the case of the update and supplement required to be made as of the record date), and not later than eight (8) business days prior to the date for the Annual Meeting or Special Meeting or any adjournment or postponement thereof.

No business shall be conducted at the Annual Meeting or Special Meeting, except business brought before the Annual Meeting or Special Meeting in accordance with the procedures set forth in this Section 5 of this Article II; provided, however, that, once business has been properly brought before the Annual Meeting or Special Meeting in accordance with such procedures, nothing in this Section 5 of this Article II shall be deemed to preclude discussion by any stockholder of any such business. If the chairman of an Annual Meeting or Special Meeting determines that business was not properly brought before the meeting in accordance with the foregoing procedures, the chairman shall declare to the meeting that the business was not properly brought before the meeting and such business shall not be transacted.

Nothing contained in this Section 5 of this Article II shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act (or any successor provision of law). In addition to any requirements set forth herein, stockholders must comply with the requirements of the Exchange Act and the rules and regulations promulgated thereunder.

Section 6.
Nomination of Directors.

Except as provided in the Certificate of Incorporation, only persons who are nominated in accordance with the procedures set forth in this Section 6 of this Article II and, if applicable, Section 7 of this Article II shall be eligible for election as directors of the Corporation. Nominations of persons for election to the Board of Directors may be made at any Annual Meeting: (a) by or at the direction of the Board of Directors (or any duly authorized committee thereof); (b) by any stockholder of the Corporation: (i) who was a stockholder of record on the date of the giving of the notice provided for in this Section 6 of this Article II and on the date of such Annual Meeting, (ii) who is entitled to vote at such Annual Meeting, and (iii) who complies with the notice procedures set forth in this Section 6 of this Article II; or (c) in the case of stockholder nominations of persons for election to the Board of Directors to be included in the Corporation’s proxy statement for such Annual Meeting, by any Eligible Holder (as defined in Section 7(c) of this Article II) who satisfies the requirements set forth in Section 7 of this Article II. For nominations

10

 

 

of persons for election to the Board of Directors to be properly brought before an Annual Meeting by a stockholder pursuant to clause (c) of this paragraph, the stockholder must have given timely notice thereof in writing to the Corporate Secretary in accordance with Section 7 of this Article II and all other requirements of Section 7 of this Article II must be satisfied.

Nominations of persons for election to the Board of Directors may be made at any Special Meeting called for the purpose of electing directors: (a) by or at the direction of the Board of Directors (or any duly authorized committee thereof); or (b) by any stockholder of the Corporation: (i) who was a stockholder of record on the date of the giving of the notice provided for in this Section 6 of this Article II and on the date of such Special Meeting, (ii) who is entitled to vote at such Special Meeting, and (iii) who complies with the notice procedures set forth in this Section 6 of this Article II. Nominations of persons for election to the Board of Directors may be made by stockholders at any Special Meeting called in accordance with Section 3.3(b) of this Article II if the nominees are named in the Special Meeting Request for such Special Meeting and the requirements of Section 3.3(b) of this Article II have been satisfied in connection therewith.

Without qualification, in addition to a stockholder complying with the requirements of Rule 14a-19 under the Exchange Act and any other applicable requirements, for a nomination to be made by a stockholder pursuant to this Section 6 of this Article II, such stockholder must have given timely notice thereof in proper written form to the Corporate Secretary of the Corporation as required by this Section 6 of this Article II.

To be timely, a stockholder's notice to the Corporate Secretary (other than a Special Meeting Request for a Special Meeting pursuant to Section 3(b) of this Article II) must be delivered to or mailed and received at the principal executive offices of the Corporation in the case of (a) an Annual Meeting, not less than ninety (90) days nor more than one hundred twenty (120) days prior to the anniversary date of the immediately preceding Annual Meeting; provided, however, that in the event that the Annual Meeting is called for a date that is not within thirty (30) days before or after such anniversary date, notice by the stockholder in order to be timely must be so received not later than the close of business on the tenth (10th) day following the day on which such notice of the date of the Annual Meeting was mailed or such public disclosure of the date of the Annual Meeting was made, whichever first occurs; and (b) a Special Meeting called for the purpose of electing directors, not later than the close of business on the tenth (10th) day following the day on which notice of the date of the Special Meeting was mailed or public disclosure of the date of the Special Meeting and of the nominees proposed by the Board of Directors to be elected at such Special Meeting was made, whichever first occurs. In no event shall the adjournment or postponement of an Annual Meeting or a Special Meeting called for the purpose of electing directors, or the public announcement of such an adjournment or postponement, commence a new time period (or extend any time period) for the giving of a stockholder's notice as described above.

To be in proper written form, a stockholder’s notice to the Corporate Secretary (including a Special Meeting Request for a Special Meeting pursuant to Section 3(b) of this Article II) must set forth the following information: (a) as to each person whom the stockholder proposes to nominate for election as a director (i) the name, age, business address and residence address of such person, (ii) the principal occupation or employment of such person, (iii) (A) the class or series and number of all shares of stock of the Corporation which are owned beneficially or of record by such person and any affiliates or associates of such person, (B) the name of each nominee holder

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of shares of all stock of the Corporation owned beneficially, but not of record, by such person or any affiliates or associates of such person, and the number of such shares of stock of the Corporation held by each such nominee holder, (C) whether and the extent to which any derivative instrument, swap, option, warrant, short interest, hedge or profit interest or other transaction has been entered into by or on behalf of such person, or any affiliates or associates of such person, with respect to stock of the Corporation and (D) whether and the extent to which any other transaction, agreement, arrangement or understanding (including any short position or any borrowing or lending of shares of stock of the Corporation) has been made by or on behalf of such person, or any affiliates or associates of such person, the effect or intent of any of the foregoing being to mitigate loss to, or to manage risk or benefit of stock price changes for, such person, or any affiliates or associates of such person, or to increase or decrease the voting power or pecuniary or economic interest of such person, or any affiliates or associates of such person, with respect to stock of the Corporation; and (iv) any other information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies or consents for a contested election of directors (even if an election contest or proxy solicitation is not involved) pursuant to Section 14 of the Exchange Act (or any successor provision of law), and the rules and regulations promulgated thereunder; and (b) as to the stockholder giving the notice, and the beneficial owner, if any, on whose behalf the nomination is being made, (i) the name and record address of such person, as they appear on the Corporation's books (and, if different from the Corporation's books, the name and residence address of such person); (ii) (A) the class or series and number of all shares of stock of the Corporation which are owned beneficially or of record by such person and any affiliates or associates of such person, (B) the name and address of each nominee holder of shares of the Corporation owned beneficially but not of record by such person or any affiliates or associates of such person, and the number of shares of stock of the Corporation held by each such nominee holder, (C) whether and the extent to which any derivative instrument, swap, option, warrant, short interest, hedge or profit interest or other transaction has been entered into by or on behalf of such person, or any affiliates or associates of such person, with respect to stock of the Corporation and (D) whether and the extent to which any other transaction, agreement, arrangement or understanding (including any short position or any borrowing or lending of shares of stock of the Corporation) has been made by or on behalf of such person, or any affiliates or associates of such person, the effect or intent of any of the foregoing being to mitigate loss to, or to manage risk or benefit of stock price changes for, such person, or any affiliates or associates of such person, or to increase or decrease the voting power or pecuniary or economic interest of such person, or any affiliates or associates of such person, with respect to stock of the Corporation; (iii) a description of all agreements, arrangements or understandings (whether written or oral and including financial transactions and direct or indirect compensation) between such person, or any affiliates or associates of such person, and any proposed nominee or any other person or persons (including their names) pursuant to which the nomination(s) are being made by such person, and any material interest of such person, or any affiliates or associates of such person, in such nomination, including any anticipated benefit therefrom to such person, or any affiliates or associates of such person; (iv) a representation that the stockholder giving notice intends to appear in person or by proxy at the Annual Meeting or Special Meeting to nominate the persons named in its notice; (v) a representation whether such stockholder or beneficial owner intends or is part of a group which intends to solicit proxies or votes in support of any director nominees other than the Corporation’s nominees in accordance with Rule 14a-19 under the Exchange Act; and (vi) any other information relating to such person that would be required to be

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disclosed in a proxy statement or other filings required to be made in connection with the solicitation of proxies for a contested election of directors (even if an election contest or proxy contest is not involved) pursuant to Section 14 of the Exchange Act (or any successor provision of law), and the rules and regulations promulgated thereunder. Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee, to be included in the proxy materials relating to the applicable meeting of stockholders and to serve as a director if elected.

A stockholder providing notice of any nomination proposed to be made at an Annual Meeting or Special Meeting (including, with respect to a Special Meeting, a Requesting Stockholder submitting a Special Meeting Request pursuant to Section 3(b) of this Article II ) shall further update and supplement such notice (including such Special Meeting Request), if necessary, so that the information provided or required to be provided in such notice pursuant to this Section 6 of this Article II shall be true and correct as of the record date for determining the stockholders entitled to receive notice of the Annual Meeting or Special Meeting, and such update and supplement shall be delivered to or be mailed and received by the Corporate Secretary at the principal executive offices of the Corporation not later than five (5) business days after the record date for determining the stockholders entitled to receive notice of such Annual Meeting or Special Meeting (in the case of the update and supplement required to be made as of the record date), and not later than eight (8) business days prior to the date of such Annual Meeting or Special Meeting, or any adjournment or postponement thereof.

Notwithstanding anything to the contrary in these By-Laws, unless otherwise required by law, if any stockholder: (a) provides notice pursuant to Rule 14a-19(b) under the Exchange Act with respect to any proposed nominee for election to the Board of Directors, and (b) subsequently fails to comply with the requirements of Rule 14a-19(a)(2) or Rule 14a-19(a)(3) under the Exchange Act (or fails to timely provide reasonable evidence sufficient to satisfy the Corporation that such person has met the requirements of Rule 14a-19(a)(3) under the Exchange Act in accordance with the following sentence), then the nomination of each such proposed nominee shall be disregarded, notwithstanding that proxies or votes in respect of the election of such proposed nominees may have been received by the Corporation (which proxies and votes shall be disregarded). If any stockholder provides notice pursuant to Rule 14a-19(b) under the Exchange Act, such person shall deliver to the Corporation, no later than five (5) business days prior to the applicable meeting of stockholders, reasonable evidence that such person has met the requirements of Rule 14a-19(a)(3) under the Exchange Act.

No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth in this Section 6 of this Article II and, if applicable, Section 7 of this Article II. If the Chairman of the meeting determines that a nomination was not made in accordance with the foregoing procedures, the Chairman shall declare to the meeting that the nomination was defective and such defective nomination shall be disregarded.

Notwithstanding any provision of this Section 6 of this Article II to the contrary, if the number of directors to be elected to the Board of Directors is increased and there is no public announcement naming all of the nominees for director or specifying the size of the increased Board of Directors made by the Corporation at least 100 days prior to the anniversary date of the immediately preceding Annual Meeting, a stockholder's notice to the Corporate Secretary required

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by this Section 6 of this Article II shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to or mailed and received at the principal executive offices of the Corporation not later than the close of business on the tenth (10th) day following the day on which such public announcement is first made by the Corporation.

Section 7.
Proxy Access.
(a)
Inclusion of Nominees in Proxy Statement. Subject to the provisions of this Section 7 of this Article II, if expressly requested in the relevant Proxy Access Notice (as defined in Section 7(d) of this Article II), the Corporation shall include in its proxy statement for any Annual Meeting (but not any Special Meeting):
(i)
the names of any person or persons nominated for election (each, a “Nominee”), which shall also be included on the Corporation’s form of proxy and ballot, by any Eligible Holder or group of up to twenty (20) Eligible Holders that has (individually and collectively, in the case of a group) satisfied, as determined by the Board of Directors, all applicable conditions and complied with all applicable procedures set forth in this Section 7 of this Article II (such Eligible Holder or group of Eligible Holders being a “Nominating Stockholder”);
(ii)
disclosure about each Nominee and the Nominating Stockholder as required under the rules of the Securities and Exchange Commission (“SEC”) or other applicable law to be included in the proxy statement;
(iii)
any statement included by the Nominating Stockholder in the Proxy Access Notice for inclusion in the proxy statement in support of each Nominee’s election to the Board of Directors (subject, without limitation, to Section 7(e)(ii) of this Article II), if such statement does not exceed 500 words and fully complies with Section 14 of the Exchange Act and the rules and regulations thereunder, including Rule 14a-9 under the Exchange Act (or any successor rule) (the “Supporting Statement”); and
(iv)
any other information that the Corporation or the Board of Directors determines, in its discretion, to include in the proxy statement relating to the nomination of each Nominee, including any statement in opposition to the nomination, any of the information provided pursuant to this Section 7 of this Article II and any solicitation materials or related information with respect to a Nominee.
(b)
Maximum Number of Nominees.
(i)
The Corporation shall not be required to include in the proxy statement for an Annual Meeting more Nominees than that number of directors constituting the greater of: (A) two (2) or (B) twenty percent (20%) of the total number of directors of the Corporation on the last day on which a Proxy Access Notice may be submitted pursuant to this Section 7 of this Article II (rounded down to the nearest whole number) (the “Maximum Number”). The Maximum Number for a particular Annual Meeting shall be reduced by: (1) the number of Nominees who are subsequently withdrawn or who the Board of Directors itself decides to nominate for election at such Annual Meeting (including any person who is or will be nominated by the Board of Directors pursuant to any agreement or understanding with one or more stockholders to avoid such person being formally proposed as a Nominee); and (2) the number of incumbent directors who had been

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Nominees under this Section 7 of this Article II with respect to any of the preceding two (2) Annual Meetings and whose reelection at the upcoming Annual Meeting is being recommended by the Board of Directors (including any person who was nominated by the Board of Directors pursuant to any agreement or understanding with one or more stockholders to avoid such person being formally proposed as a Nominee). In the event that one or more vacancies for any reason occurs on the Board of Directors after the deadline for submitting a Proxy Access Notice as set forth in Section 7(d) of this Article II but before the date of the Annual Meeting, and the Board of Directors resolves to reduce the size of the Board of Directors in connection therewith, the Maximum Number shall be calculated based on the number of directors in office as so reduced.
(ii)
If the number of Nominees pursuant to this Section 7 of this Article II for any Annual Meeting exceeds the Maximum Number then, promptly upon notice from the Corporation, each Nominating Stockholder will select one Nominee for inclusion in the proxy statement until the Maximum Number is reached, going in order of the size (largest to smallest) of the ownership position as disclosed in each Nominating Stockholder’s Proxy Access Notice, with the process repeated if the Maximum Number is not reached after each Nominating Stockholder has selected one Nominee. If, after the deadline for submitting a Proxy Access Notice as set forth in Section 7(d) of this Article II, a Nominating Stockholder or a Nominee ceases to satisfy the eligibility requirements set forth in this Section 7 of this Article II, a Nominating Stockholder withdraws its nomination or a Nominee becomes unwilling to serve on the Board of Directors, whether before or after the mailing or other distribution of the definitive proxy statement, then the nomination shall be disregarded, and the Corporation: (A) shall not be required to include in its proxy statement or on any ballot or form of proxy the disregarded Nominee or any successor or replacement Nominee proposed by the Nominating Stockholder or by any other Nominating Stockholder and (B) may otherwise communicate to its stockholders, including by amending or supplementing its proxy statement or ballot or form of proxy, that a Nominee will not be included as a nominee in the proxy statement or on any ballot or form of proxy and will not be voted on at the Annual Meeting.
(c)
Eligibility of Nominating Stockholder.
(i)
An “Eligible Holder” is a person who has either (A) been a record holder of the shares of common stock of the Corporation used to satisfy the eligibility requirements in this Section 7(c) of this Article II continuously for the three-year period specified in Section 7(c)(ii) of this Article II or (B) provides to the Corporate Secretary, within the time period referred to in Section 7(d), evidence of continuous ownership of such shares for such three-year period from one or more securities intermediaries in a form that satisfies the requirements as established by the SEC for a stockholder proposal under Rule 14a-8 under the Exchange Act (or any successor rule).
(ii)
An Eligible Holder or group of up to twenty (20) Eligible Holders may submit a nomination in accordance with this Section 7 of this Article II only if the person or group (in the aggregate) has continuously owned at least the Minimum Number (as defined in Section 7(c)(iii) of this Article II) of shares of the common stock of the Corporation throughout the three-year period preceding and including the date of submission of the Proxy Access Notice, and continues to own at least the Minimum Number through the date of the Annual Meeting. Two or more funds that are (A) under common management and investment control, (B) under common management and funded primarily by a single employer or (C) a “group of investment companies,”

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as such term is defined in Section 12(d)(1)(G)(ii) of the Investment Company Act of 1940, as amended, shall be treated as one (1) Eligible Holder if such Eligible Holder shall provide together with the Proxy Access Notice documentation reasonably satisfactory to the Corporation that demonstrates that the funds meet the criteria set forth in clauses (A), (B) or (C) of this Section 7(c)(ii) of this Article II. For the avoidance of doubt, in the event of a nomination by a group of Eligible Holders, any and all requirements and obligations for an individual Eligible Holder that are set forth in this Section 7 of this Article II, including the minimum holding period, shall apply to each member of such group; provided, however, that the Minimum Number shall apply to the ownership of the group in the aggregate. Should any stockholder cease to satisfy the eligibility requirements in this Section 7 of this Article II or withdraw from a group of Eligible Holders at any time prior to the Annual Meeting, the group of Eligible Stockholders shall only be deemed to own the shares held by the remaining members of the group.
(iii)
The “Minimum Number” of shares of common stock of the Corporation means three percent (3%) of the number of outstanding shares of common stock of the Corporation as of the most recent date for which such amount is given in any filing by the Corporation with the SEC prior to the submission of the Proxy Access Notice.
(iv)
For purposes of Section 3(b) of this Article II and this Section 7 of this Article II, a Requesting Stockholder (including, for purposes of this Section 7(c)(iv) of this Article II, any beneficial owner on whose behalf the Requesting Stockholder makes a Special Meeting Request) or an Eligible Holder “owns” only those outstanding shares of the Corporation as to which the Requesting Stockholder or Eligible Holder possesses both:
(A)
the full voting and investment rights pertaining to the shares; and
(B)
the full economic interest in (including the opportunity for profit and risk of loss on) such shares;

provided that the number of shares calculated in accordance with clauses (A) and (B) above shall not include any shares: (1) purchased or sold by such Requesting Holder or Eligible Holder or any of its affiliates in any transaction that has not been settled or closed, (2) sold short by such Requesting Stockholder or Eligible Holder, (3) borrowed by such Requesting Stockholder or Eligible Holder or any of its affiliates for any purpose or purchased by such Requesting Stockholder or Eligible Holder or any of its affiliates pursuant to an agreement to resell or subject to any other obligation to resell to another person, or (4) subject to any option, warrant, forward contract, swap, contract of sale, other derivative or similar agreement entered into by such Requesting Stockholder or Eligible Holder or any of its affiliates, whether any such instrument or agreement is to be settled with shares or with cash based on the notional amount or value of outstanding shares of the Corporation, in any such case which instrument or agreement has, or is intended to have, the purpose or effect of: (x) reducing in any manner, to any extent or at any time in the future, such Requesting Stockholder’s or Eligible Holder’s or any of its affiliates’ full right to vote or direct the voting of any such shares, and/or (y) hedging, offsetting, or altering to any degree, gain or loss arising from the full economic ownership of such shares by such Requesting Stockholder or Eligible Holder or any of its affiliates.

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A Requesting Stockholder or an Eligible Holder “owns” shares held in the name of a nominee or other intermediary so long as the Requesting Stockholder or Eligible Holder, as applicable, retains the right to instruct how the shares are voted with respect to the election of directors and possesses the full economic interest in the shares. A Requesting Stockholder’s or an Eligible Holder’s ownership of shares shall be deemed to continue during any period in which the Requesting Stockholder or Eligible Holder, as applicable, has delegated any voting power by means of a proxy, power of attorney, or other similar instrument or arrangement that is revocable at any time by the Requesting Stockholder or Eligible Holder, as applicable. A Requesting Stockholder’s or an Eligible Holder’s ownership of shares shall be deemed to continue during any period in which the Requesting Stockholder or Eligible Holder, as applicable, has loaned such shares provided that the Requesting Stockholder or Eligible Holder, as applicable, has the power to recall such loaned shares on five (5) business days’ notice, promptly recalls such loaned shares upon being notified by the Corporation that any of its Nominees will be included in the Corporation’s proxy materials and continues to own such shares through the date of the Annual Meeting. The terms “owned,” “owning” and other variations of the word “own” shall have correlative meanings. Whether outstanding shares are “owned” for these purposes shall be determined by the Board of Directors.

(v)
No Eligible Holder shall be permitted to be in more than one group constituting a Nominating Stockholder, and if any Eligible Holder appears as a member of more than one group, it shall be deemed to be a member of the group that has the largest ownership position as reflected in the Proxy Access Notice.
(d)
Proxy Access Notice. To nominate a Nominee, the Nominating Stockholder must, no earlier than one hundred fifty (150) calendar days and no later than one hundred twenty (120) calendar days before the anniversary of the date that the Corporation mailed its proxy statement for the prior year’s Annual Meeting, submit to the Corporate Secretary at the principal executive office of the Corporation all of the following information and documents (collectively, the “Proxy Access Notice”); provided, however, that if (and only if) the Annual Meeting is not scheduled to be held within a period that commences thirty (30) days before such anniversary date and ends thirty (30) days after such anniversary date (an Annual Meeting date outside such period being referred to in these By-Laws as an “Other Meeting Date”), the Proxy Access Notice shall be given in the manner provided herein by the later of the close of business on the date that is one hundred eighty (180) days prior to such Other Meeting Date or the tenth (10th) day following the date such Other Meeting Date is first publicly announced or disclosed:
(i)
A Schedule 14N (or any successor form) relating to each Nominee, completed and filed with the SEC by the Nominating Stockholder, as applicable, in accordance with SEC rules;
(ii)
A written notice of the nomination of each Nominee that includes the following additional information, agreements, representations and warranties by the Nominating Stockholder (including each group member):
(A)
the information, representations and agreements required by Section 6 of this Article II with respect to the nomination of directors pursuant to Section 6 of this Article II;

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(B)
the details of any relationship that existed within the past three (3) years and that would have been described pursuant to Item 6(e) of Schedule 14N (or any successor item) if it existed on the date of submission of the Schedule 14N;
(C)
a representation and warranty that the Nominating Stockholder acquired the securities of the Corporation in the ordinary course of business and did not acquire, and is not holding, securities of the Corporation for the purpose or with the effect of influencing or changing control of the Corporation;
(D)
a representation and warranty that each Nominee’s candidacy or, if elected, membership on the Board of Directors would not violate the Certificate of Incorporation, these By-Laws or any applicable state or federal law or the rules of any stock exchange on which the shares of common stock of the Corporation are traded;
(E)
a representation and warranty that each Nominee:
(1)
(x) does not have any direct or indirect relationship with the Corporation that would cause the Nominee to be considered not independent pursuant to the Corporation’s Corporate Governance Principles and (y) otherwise qualifies as independent under the rules of the primary stock exchange on which the shares of common stock of the Corporation are traded;
(2)
meets the audit committee and compensation committee independence requirements under the rules of the primary stock exchange on which the shares of common stock of the Corporation are traded;
(3)
is a “non-employee director” for the purposes of Rule 16b-3 under the Exchange Act (or any successor rule); and
(4)
is not and has not been subject to any event specified in Rule 506(d)(1) of Regulation D (or any successor rule) under the Securities Act of 1933, as amended, or Item 401(f) of Regulation S-K (or any successor rule) under the Exchange Act, without reference to whether the event is material to an evaluation of the ability or integrity of such Nominee; and
(F)
a representation and warranty that the Nominating Stockholder satisfies the eligibility requirements set forth in Section 7(c) of this Article II and has provided evidence of ownership to the extent required by Section 7(c)(i) of this Article II;
(G)
a representation and warranty that the Nominating Stockholder intends to continue to satisfy the eligibility requirements described in Section 7(c) of this Article II through the date of the Annual Meeting;
(H)
details of any position of a Nominee as an officer or director of any competitor (that is, any entity that produces products or provides services that compete with or are alternatives to the products produced or services provided by the Corporation or its affiliates) of the Corporation, within the three (3) years preceding the submission of the Proxy Access Notice;

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(I)
the details of any compensatory, payment or other financial agreement, arrangement or understanding with any person or entity in connection with service or action as a director of the Corporation and details of any agreement, arrangement or understanding with any person or entity as to how such Nominee would vote or act on any issue or question as a director (a “Voting Commitment”);
(J)
a representation and warranty that the Nominating Stockholder will not engage in a “solicitation” within the meaning of Rule 14a-1(l) under the Exchange Act (without reference to the exception in Section 14a-1(l)(2)(iv) under the Exchange Act) (or any successor rules) with respect to the Annual Meeting, other than with respect to a Nominee or any nominee of the Board of Directors;
(K)
a representation and warranty that the Nominating Stockholder will not use any proxy card other than the Corporation’s proxy card in soliciting stockholders in connection with the election of a Nominee at the Annual Meeting;
(L)
if desired, a Supporting Statement; and
(M)
in the case of a nomination by a group, the designation by all group members of one group member that is authorized to act on behalf of all group members with respect to matters relating to the nomination, including withdrawal of the nomination; and
(iii)
An executed agreement pursuant to which the Nominating Stockholder (including each group member signing on behalf of itself) agrees:
(A)
to comply with all applicable laws, rules and regulations in connection with the nomination, solicitation and election;
(B)
to file any written solicitation or other communication with the stockholders of the Corporation relating to one or more of the Corporation’s directors or director nominees or any Nominee with the SEC, regardless of whether any such filing is required under rule or regulation or whether any exemption from filing is available for such materials under any rule or regulation;
(C)
to assume all liability stemming from an action, suit or proceeding concerning any actual or alleged legal or regulatory violation arising out of any communication by the Nominating Stockholder or any of its Nominees with the Corporation, its stockholders or any other person in connection with the nomination or election of directors, including the Proxy Access Notice;
(D)
to indemnify and hold harmless (jointly with all other group members, in the case of a group member) the Corporation and each of its directors, officers and employees individually against any liability, loss, damages, expenses or other costs (including attorneys’ fees) incurred in connection with any threatened or pending action, suit or proceeding, whether legal, administrative or investigative, against the Corporation or any of its directors, officers or employees arising out of or relating to a failure or alleged failure of the Nominating Stockholder or any of its Nominees to comply with, or any breach

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or alleged breach of, its or their obligations, agreements or representations under this Section 7 of this Article II; and
(E)
in the event that any information included in the Proxy Access Notice, or any other communication by the Nominating Stockholder (including with respect to any group member), with the Corporation, its stockholders or any other person in connection with the nomination or election ceases to be true and accurate in all material respects (or omits a material fact necessary to make the statements made not misleading), or that the Nominating Stockholder (including any group member) has failed to continue to satisfy the eligibility requirements described in Section 7(c) of this Article II, to promptly (and in any event within 48 hours of discovering such misstatement, omission or failure) notify the Corporation and any other recipient of such communication of (1) the misstatement or omission in such previously provided information and of the information that is required to correct the misstatement or omission or (2) such failure; and
(iv)
An executed agreement by each Nominee:
(A)
to provide to the Corporation such other information and certifications, including completion of the Corporation’s director questionnaire, as it may reasonably request;
(B)
at the reasonable request of the Corporate Governance Committee of the Board of Directors, to meet with the Corporate Governance Committee to discuss matters relating to the nomination of such Nominee to the Board of Directors, including the information provided by such Nominee to the Corporation in connection with his or her nomination and such Nominee’s eligibility to serve as a member of the Board of Directors;
(C)
that such Nominee has read and agrees, if elected, to serve as a member of the Board of Directors, to adhere to the Corporation’s Code of Conduct, Insider Trading Policy, Corporate Governance Principles and any other rule, regulation, policy or standard of conduct applicable to directors; and
(D)
that such Nominee is not and will not become a party to (1) any compensatory, payment or other financial agreement, arrangement or understanding with any person or entity in connection with his or her nomination, service or action as a director of the Corporation that has not been disclosed to the Corporation, (2) any Voting Commitment that has not been disclosed to the Corporation, or (3) any Voting Commitment that could limit or interfere with such Nominee’s ability to comply, if elected as a director of the Corporation, with its fiduciary duties under applicable law.

The information and documents required by this Section 7(d) of this Article II to be provided by the Nominating Stockholder shall be: (i) provided with respect to and executed by each group member, in the case of information applicable to group members; and (ii) provided with respect to the persons specified in Instruction 1 to Items 6(c) and (d) of Schedule 14N (or any successor items) in the case of a Nominating Stockholder or group member that is an entity. The Proxy Access Notice shall be deemed submitted on the date on which all the information and

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documents referred to in this Section 7(d) of this Article II (other than such information and documents contemplated to be provided after the date the Proxy Access Notice is provided) have been delivered to or, if sent by mail, received by the Corporate Secretary.

(e)
Exceptions.
(i)
Notwithstanding anything to the contrary contained in this Section 7 of this Article II, the Corporation may omit from its proxy statement any Nominee and any information concerning such Nominee (including a Nominating Stockholder’s Supporting Statement) and no vote on such Nominee will occur (notwithstanding that proxies in respect of such vote may have been received by the Corporation), and the Nominating Stockholder may not, after the last day on which a Proxy Access Notice would be timely, cure in any way any defect preventing the nomination of such Nominee, if:
(A)
the Corporation receives a notice pursuant to clause (b) of the first paragraph of Section 6 of this Article II that a stockholder intends to nominate a candidate for director at the Annual Meeting, whether or not such notice is subsequently withdrawn or made the subject of a settlement with the Corporation;
(B)
the Nominating Stockholder or the designated lead group member, as applicable, or any qualified representative thereof, does not appear at the Annual Meeting to present the nomination submitted pursuant to this Section 7 of this Article II, the Nominating Stockholder withdraws its nomination or the Chairman of the Annual Meeting declares that such nomination was not made in accordance with the procedures prescribed by this Section 7 of this Article II and shall therefore be disregarded;
(C)
the Board of Directors determines that such Nominee’s nomination or election to the Board of Directors would result in the Corporation violating or failing to be in compliance with the Certificate of Incorporation, these By-Laws or any applicable law, rule or regulation to which the Corporation is subject, including any rules or regulations of the primary stock exchange on which the common stock of the Corporation is traded;
(D)
such Nominee was nominated for election to the Board of Directors pursuant to this Section 7 of this Article II at one of the Corporation’s two (2) preceding Annual Meetings and (1) its nomination was withdrawn, (2) such Nominee became ineligible to serve as a Nominee or as a director, or (3) such Nominee received a vote of less than twenty-five percent (25%) of the shares of common stock of the Corporation entitled to vote for such Nominee;
(E)
such Nominee has been, within the past three (3) years, an officer or director of a competitor, as defined for purposes of Section 8 of the Clayton Antitrust Act of 1914, as amended; or
(F)
(1) the Nominating Stockholder fails to continue to satisfy the eligibility requirements described in Section 7(c) of this Article II, (2) any of the representations and warranties made in the Proxy Access Notice ceases to be true and accurate in all material respects (or omits a material fact necessary to make the statements

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made not misleading), (3) such Nominee becomes unwilling or unable to serve on the Board of Directors, or (4) the Nominating Stockholder or such Nominee materially violates or breaches any of the obligations, agreements, representations or warranties of the Nominating Stockholder or such Nominee under this Section 7 of this Article II.
(ii)
Notwithstanding anything to the contrary contained in this Section 7 of Article II, the Corporation may omit from its proxy statement, or may supplement or correct, any information, including all or any portion of the Supporting Statement or any other statement in support of a Nominee included in the Proxy Access Notice, if the Board of Directors determines that:
(A)
such information is not true in all material respects or omits a material statement necessary to make the statements made not misleading;
(B)
such information directly or indirectly impugns the character, integrity or personal reputation of, or directly or indirectly makes charges concerning improper, illegal or immoral conduct or associations, without factual foundation, with respect to, any person; or
(C)
the inclusion of such information in the proxy statement would otherwise violate the SEC proxy rules or any other applicable law, rule or regulation.

The Corporation may solicit against, and include in the proxy statement its own statement relating to, any Nominee.

(f)
Exclusive Method. Except for a nomination made in compliance with Section 6 of this Article II and Rule 14a-19 promulgated under the Exchange Act, this Section 7 of this Article II shall be the exclusive method for stockholders to include nominees for election to the Board of Directors in the Corporation’s proxy materials.
Section 8.
Adjournments.

Any meeting of the stockholders may be adjourned from time to time, to reconvene at the same or some other place or solely by means of remote communications, and notice need not be given of any such adjourned meeting if the time and place, if any, thereof and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting are: (a) announced at the meeting at which the adjournment is taken; or (b) displayed, during the time scheduled for the meeting, on the same electronic network used to enable stockholders and proxy holders to participate in the meeting by means of remote communication. At the adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, notice of the adjourned meeting in accordance with the requirements of Section 4 of this Article II shall be given to each stockholder of record entitled to notice of and to vote at the meeting.

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Section 9.
Quorum.

Unless otherwise required by law, the Certificate of Incorporation, these By-Laws or any rule of any stock exchange on which the Corporation's shares are listed and traded, the holders of a majority of the Corporation's capital stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business. A quorum, once established, shall not be broken by the withdrawal of enough votes to leave less than a quorum. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the chairman of such meeting shall have power to adjourn the meeting from time to time, in the manner provided in Section 8 of this Article II, until a quorum shall be present or represented.

Section 10.
Voting.

Unless otherwise required by law, the Certificate of Incorporation, these By-Laws, or any rules of any stock exchange on which the Corporation's shares are listed and traded, any question brought before any meeting of the stockholders, other than the election of directors, shall be decided by the affirmative vote of the holders of a majority of the total number of shares of the Corporation's capital stock represented at the meeting and entitled to vote on such question, voting as a single class. Unless otherwise provided in the Certificate of Incorporation and subject to Section 14(a) of this Article II, each stockholder represented at a meeting of the stockholders shall be entitled to cast one (1) vote for each share of the capital stock entitled to vote thereat held by such stockholder. Such votes may be cast in person or by proxy as provided in Section 11 of this Article II. The Board of Directors, in its discretion, or the officer of the Corporation presiding at a meeting of the stockholders, in such officer's discretion, may require that any votes cast at such meeting shall be cast by written ballot.

Section 11.
Proxies.

Each stockholder entitled to vote at a meeting of the stockholders or, as provided herein, to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder as proxy, but no such proxy shall be voted upon after three years from its date, unless such proxy provides for a longer period. Without limiting the manner in which a stockholder may authorize another person or persons to act for such stockholder as proxy, the following shall constitute a valid means by which a stockholder may grant such authority:

(i) A stockholder may execute a writing authorizing another person or persons to act for such stockholder as proxy. Execution may be accomplished by the stockholder or such stockholder's authorized officer, director, employee or agent signing such writing or causing such person's signature to be affixed to such writing by any reasonable means, including, but not limited to, by facsimile signature.

(ii) A stockholder may authorize another person or persons to act for such stockholder as proxy by transmitting or authorizing the transmission of a telegram, cablegram or other means of electronic transmission to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or like agent duly authorized by the person

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who will be the holder of the proxy to receive such transmission, provided that any such telegram, cablegram or other means of electronic transmission must either set forth or be submitted with information from which it can be determined that the telegram, cablegram or other electronic transmission was authorized by the stockholder. If it is determined that such telegrams, cablegrams or other electronic transmissions are valid, the inspectors or, if there are no inspectors, such other persons making that determination shall specify the information on which they relied.

Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission authorizing another person or persons to act as proxy for a stockholder may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used; provided, however, that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission. Any stockholder directly or indirectly soliciting proxies from other stockholders must use a proxy card color other than white, which shall be reserved for the exclusive use by the Board of Directors.

Section 12.
Consent of Stockholders in Lieu of Meeting.

Unless otherwise provided in the Certificate of Incorporation, any action required or permitted to be taken at any Annual Meeting or Special Meeting of the Corporation may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of the stockholders are recorded. Delivery made to the Corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. Every written consent shall bear the date of signature of each stockholder who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within sixty (60) days of the earliest dated consent delivered in the manner required by this Section 12 of this Article II to the Corporation, written consents signed by a sufficient number of holders to take action are delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of the stockholders are recorded. A telegram, cablegram or other electronic transmission consenting to an action to be taken and transmitted by a stockholder or proxyholder, or by a person or persons authorized to act for a stockholder or proxyholder, shall be deemed to be written, signed and dated for the purposes of this Section 12 of this Article II, provided that any such telegram, cablegram or other electronic transmission sets forth or is delivered with information from which the Corporation can determine (i) that the telegram, cablegram or other electronic transmission was transmitted by the stockholder or proxyholder or by a person or persons authorized to act for the stockholder or proxyholder and (ii) the date on which such stockholder or proxyholder or authorized person or persons transmitted such telegram, cablegram or electronic transmission. The date on which such telegram, cablegram or electronic transmission is transmitted shall be deemed to be the date on which such consent was signed. No consent given by telegram, cablegram or other electronic transmission shall be deemed to have been delivered until such consent is reproduced in paper form and until such paper form shall be

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delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of the stockholders are recorded. Delivery made to the Corporation's registered office shall be made by hand or by certified or registered mail, return receipt requested. Any copy, facsimile or other reliable reproduction of a consent in writing may be substituted or used in lieu of the original writing for any and all purposes for which the original writing could be used, provided that such copy, facsimile or other reproduction shall be a complete reproduction of the entire original writing. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of holders to take the action were delivered to the Corporation as provided above in this Section 12 of this Article II.

Section 13.
List of Stockholders Entitled to Vote.

The officer of the Corporation who has charge of the stock ledger of the Corporation shall prepare and make, at least ten (10) days before every meeting of the stockholders, a complete list of the stockholders entitled to vote at the meeting (provided, however, if the record date for determining the stockholders entitled to vote is less than ten (10) days before the meeting date, the list shall reflect stockholders entitled to vote as of the tenth (10th) day before the meeting date), arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (ii) during ordinary business hours, at the principal place of business of the Corporation. In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation.

Section 14.
Record Date.
(a)
In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of the stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of the stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of the stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders

25

 

 

entitled to vote in accordance with the foregoing provisions of this Section 14 of this Article II at the adjourned meeting.
(b)
In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. If no record date has been fixed by the Board of Directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by applicable law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of the stockholders are recorded. Delivery made to the Corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by applicable law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.
Section 15.
Stock Ledger.

The stock ledger of the Corporation shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by Section 13 of this Article II or the books of the Corporation, or to vote in person or by proxy at any meeting of the stockholders.

Section 16.
Conduct of Meetings.

The Board of Directors of the Corporation may adopt by resolution such rules and regulations for the conduct of any meeting of the stockholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board of Directors, the chairman of any meeting of the stockholders shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board of Directors or prescribed by the chairman of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) the determination of when the polls shall open and close for any given matter to be voted on at the meeting; (iii) rules and procedures for maintaining order at the meeting and the safety of those present; (iv) limitations on attendance at or participation in the meeting to stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as the chairman of the meeting shall determine; (v) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (vi) limitations on the time allotted to questions or comments by participants.

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Section 17.
Inspectors of Election.

In advance of any meeting of the stockholders, the Board of Directors, by resolution, the Chairman of the Board of Directors, the Chief Executive Officer or the President shall appoint one or more inspectors to act at the meeting and make a written report thereof. One or more other persons may be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of the stockholders, the chairman of the meeting shall appoint one or more inspectors to act at the meeting. Unless otherwise required by applicable law, inspectors may be officers, employees or agents of the Corporation. Each inspector, before entering upon the discharge of the duties of inspector, shall take and sign an oath to faithfully execute the duties of inspector with strict impartiality and according to the best of such inspector's ability. The inspector shall have the duties prescribed by law and shall take charge of the polls and, when the vote is completed, shall make a certificate of the result of the vote taken and of such other facts as may be required by applicable law.

ARTICLE III


DIRECTORS
Section 1.
Election of Directors.

Each director shall be elected at each annual meeting of stockholders for a term expiring at the next annual meeting of stockholders. Except as provided in the Certificate of Incorporation and in Section 2 of this Article III, each director shall be elected by the vote of the majority of the votes cast with respect to that director’s election at any meeting for the election of directors at which a quorum is present; provided, however, that the directors shall be elected by the vote of a plurality of votes cast in connection with the election of directors at any meeting of stockholders with respect to which (i) the Secretary of the Corporation receives a notice that a stockholder has nominated a person for election to the Board of Directors in compliance with the requirements for stockholder nominees for director set forth in Article II, Section 6 of these By-Laws or set forth in Article II, Section 8 of these By-Laws, and (ii) such nomination has not been withdrawn by such stockholder on or prior to the tenth day preceding the date the Corporation first mails its notice of meeting for such meeting to the stockholders. For purposes of this Section, a majority of the votes cast means that the number of shares voted “for” a nominee’s election must exceed the votes cast “against” such nominee’s election.

If a nominee for director is not elected and the nominee is an incumbent director, the director shall promptly tender his or her resignation to the Board of Directors, subject to acceptance by the Board of Directors. The Corporate Governance Committee of the Board of Directors will make a recommendation to the Board of Directors as to whether to accept or reject the tendered resignation, or whether other action should be taken. The Board of Directors will act on the tendered resignation, taking into account the Corporate Governance Committee’s recommendation, and publicly disclose (by press release, a filing with the SEC, or other broadly disseminated means of communication) its decision regarding the tendered resignation and the rationale behind the decision within 90 days from the date of the certification of the election results. The Corporate Governance Committee in making its recommendation and the Board of Directors in making its decision may each consider any factors or other information that they consider

27

 

 

appropriate and relevant. The director who tenders his or her resignation will not participate in the recommendation of the Corporate Governance Committee or the decision of the Board of Directors with respect to his or her resignation or in any deliberations related thereto.

If a director’s resignation is accepted by the Board of Directors pursuant to this By-Law, or if a nominee for director is not elected and the nominee is not an incumbent director, then the Board of Directors, in its sole discretion, may fill the resulting vacancy pursuant to the provisions of Article III, Section 2 of these By-Laws or may decrease the size of the Board of Directors pursuant to the provisions of Article Fifth, Section B of the Certificate of Incorporation. If a director’s resignation is not accepted by the Board of Directors pursuant to this By-Law, such director will continue to serve until such director’s successor shall have been duly elected and qualified or his or her earlier resignation or removal.

Section 2.
Vacancies.

Subject to the provisions of the Certificate of Incorporation and subject to the rights, if any, of the holders of shares of preferred stock then outstanding, any vacancy on the Board of Directors that results from an increase in the number of directors may be filled by a majority of the Board of Directors then in office, provided that a quorum is present, and any other vacancy occurring on the Board of Directors may be filled by a majority of the Board of Directors then in office, even if less than a quorum, or by a sole remaining director. Any director elected to fill a vacancy not resulting from an increase in the number of directors shall have the same remaining term as that of his or her predecessor.

Section 3.
Duties and Powers.

The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these By-Laws required to be exercised or done by the stockholders.

Section 4.
Chairman of the Board of Directors.

The Chairman of the Board of Directors shall be appointed by the Board of Directors. The Chairman of the Board of Directors, if there be one, shall preside at all meetings of the stockholders and of the Board of Directors. Except where by law the signature of the President is required, the Chairman of the Board of Directors shall possess the same power as the President to sign all contracts, certificates and other instruments of the Corporation which may be authorized by the Board of Directors. During the absence or disability of the President, the Chairman of the Board of Directors shall exercise all the powers and discharge all the duties of the President. The Chairman of the Board of Directors shall also perform such other duties and may exercise such other powers as may from time to time be assigned by these By-Laws or by the Board of Directors.

Section 5.
Lead Independent Director.

The Lead Independent Director shall be appointed by the Board of Directors. The Lead Independent Director shall consult with the Chairman of the Board of Directors regarding the agenda for meetings of the Board of Directors, schedule and prepare agendas for meetings of

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independent directors, preside over meetings of independent directors and executive sessions of meetings of the Board of Directors in which management directors are excluded. The Lead Independent Director shall act as principal liaison between independent directors and the Chairman of the Board of Directors on sensitive issues and raise issues with management on behalf of the independent directors when appropriate. The Lead Independent Director shall also perform such other duties and may exercise such other powers as may from time to time be assigned by these By-Laws or by the Board of Directors.

Section 6.
Meetings.

The Board of Directors and any committee thereof may hold meetings, both regular and special, either within or without the State of Delaware. Regular meetings of the Board of Directors or any committee thereof may be held without notice at such time and at such place as may from time to time be determined by the Board of Directors or such committee, respectively. Special meetings of the Board of Directors may be called by the Chairman, if there be one, the Chief Executive Officer, or by a majority of the directors then serving on the Board of Directors. Special meetings of any committee of the Board of Directors may be called by the chairman of such committee, if there be one, the Chief Executive Officer, or any director serving on such committee. Notice thereof stating the place, date and time of the meeting shall be given to each director (or, in the case of a committee, to each member of such committee) by whom it is not waived either by mail not less than forty-eight (48) hours before the date of the meeting, by telephone, telegram or electronic means on twenty-four (24) hours' notice, or on such shorter notice as the person or persons calling such meeting may deem necessary or appropriate in the circumstances.

Section 7.
Organization.

At each meeting of the Board of Directors or any committee thereof, the Chairman of the Board of Directors or the chairman of such committee, as the case may be, or, in his or her absence or if there be none, a director chosen by a majority of the directors present, shall act as chairman. Except as provided below, the Corporate Secretary of the Corporation shall act as secretary at each meeting of the Board of Directors and of each committee thereof. In case the Corporate Secretary shall be absent from any meeting of the Board of Directors or of any committee thereof, an Assistant Corporate Secretary shall perform the duties of secretary at such meeting; and in the absence from any such meeting of the Corporate Secretary and all the Assistant Corporate Secretaries, the chairman of the meeting may appoint any person to act as secretary of the meeting. Notwithstanding the foregoing, the members of each committee of the Board of Directors may appoint any person to act as secretary of any meeting of such committee and the Corporate Secretary or any Assistant Corporate Secretary of the Corporation may, but need not if such committee so elects, serve in such capacity.

Section 8.
Resignations and Removals of Directors.

Any director of the Corporation may resign from the Board of Directors or any committee thereof at any time, by giving notice in writing or by electronic transmission to the Chairman of the Board of Directors, if there be one, the Chief Executive Officer, the President or the Corporate Secretary of the Corporation and, in the case of a committee, to the chairman of such committee, if there be one. Such resignation shall take effect at the time therein specified or, if no time is

29

 

 

specified, immediately; and, unless otherwise specified in such notice, the acceptance of such resignation shall not be necessary to make it effective. Except as provided in the Certificate of Incorporation and as otherwise required by applicable law and subject to the rights, if any, of the holders of shares of preferred stock then outstanding, any director or the entire Board of Directors may be removed from office at any time, with or without cause, at a duly called meeting of stockholders at which a quorum is present and only by the affirmative vote of at least a majority of the votes entitled to be cast thereon by holders of the then outstanding capital stock of the Corporation. Any director serving on a committee of the Board of Directors may be removed from such committee at any time by the Board of Directors.

Section 9.
Quorum.

Except as otherwise required by law, or the Certificate of Incorporation or the rules and regulations of any securities exchange or quotation system on which the Corporation's securities are listed or quoted for trading, at all meetings of the Board of Directors or any committee thereof, a majority of the entire Board of Directors or a majority of the directors constituting such committee, as the case may be, shall constitute a quorum for the transaction of business and the act of a majority of the directors or committee members present at any meeting at which there is a quorum shall be the act of the Board of Directors or such committee, as applicable. If a quorum shall not be present at any meeting of the Board of Directors or any committee thereof, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting of the time and place of the adjourned meeting, until a quorum shall be present.

Section 10.
Actions of the Board by Written Consent.

Unless otherwise provided in the Certificate of Incorporation or these By-Laws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all the members of the Board of Directors or such committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board of Directors or such committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

Section 11.
Meetings by Means of Conference Telephone.

Unless otherwise provided in the Certificate of Incorporation or these By-Laws, members of the Board of Directors of the Corporation, or any committee thereof, may participate in a meeting of the Board of Directors or such committee by means of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this Section 11 of this Article III shall constitute presence in person at such meeting.

Section 12.
Committees.

The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. Each member of a committee must meet the

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requirements for membership, if any, imposed by applicable law and the rules and regulations of any securities exchange or quotation system on which the securities of the Corporation are listed or quoted for trading. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of any such committee. Subject to the rules and regulations of any securities exchange or quotation system on which the securities of the Corporation are listed or quoted for trading, in the absence or disqualification of a member of a committee, and in the absence of a designation by the Board of Directors of an alternate member to replace the absent or disqualified member, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another qualified member of the Board of Directors to act at the meeting in the place of any absent or disqualified member. Any committee, to the extent permitted by law and provided in the resolution establishing such committee, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it. Each committee shall keep regular minutes and report to the Board of Directors when required. Notwithstanding anything to the contrary contained in this Article III, the resolution of the Board of Directors establishing any committee of the Board of Directors and/or the charter of any such committee may establish requirements or procedures relating to the governance and/or operation of such committee that are different from, or in addition to, those set forth in these By-Laws and, to the extent that there is any inconsistency between these By-Laws and any such resolution or charter, the terms of such resolution or charter shall be controlling.

Section 13.
Compensation.

The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary for service as director, payable in cash or securities. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for service as committee members.

ARTICLE IV


OFFICERS
Section 1.
General.

Subject to the provisions of the Certificate of Incorporation, the officers of the Corporation shall be chosen by the Board of Directors and shall be the Chief Executive Officer, the President, a Corporate Secretary and a Treasurer. The Board of Directors shall designate one independent director to serve as lead independent director (the “Lead Independent Director”). The Board of Directors, in its discretion, also may choose a Chairman of the Board of Directors (who must be a director), and, subject to the provisions of the Certificate of Incorporation, one or more Vice Presidents, Assistant Corporate Secretaries, Assistant Treasurers and other officers. Any number of offices may be held by the same person, unless otherwise prohibited by law, the Certificate of Incorporation or these By-Laws. The officers of the Corporation need not be stockholders of the

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Corporation nor, except in the case of the Chairman of the Board of Directors, need such officers be directors of the Corporation.

Section 2.
Election.

The Board of Directors, at its first meeting held after each Annual Meeting (or action by written consent of stockholders in lieu of the Annual Meeting if permitted by the Certificate of Incorporation), shall elect the officers of the Corporation who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors; and each officer of the Corporation shall hold office until such officer's successor is elected and qualified, or until such officer's earlier death, resignation or removal. Any officer elected by the Board of Directors may be removed at any time by the Board of Directors. Any vacancy occurring in any office of the Corporation shall be filled by the Board of Directors. The salaries of all officers of the Corporation shall be fixed by the Board of Directors.

Section 3.
Voting Securities Owned by the Corporation.

Powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities owned by the Corporation may be executed in the name of and on behalf of the Corporation by the Chief Executive Officer, the President or any Vice President or any other officer authorized to do so by the Board of Directors and any such officer may, in the name of and on behalf of the Corporation, take all such action as any such officer may deem advisable to vote in person or by proxy at any meeting of security holders of any corporation in which the Corporation may own securities and at any such meeting shall possess and may exercise any and all rights and power incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed if present. The Board of Directors may, by resolution, from time to time confer like powers upon any other person or persons.

Section 4.
Chief Executive Officer.

The Chief Executive Officer shall, subject to the control of the Board of Directors and the Chairman of the Board of Directors, if there be one, have general supervision of the business and affairs of the Corporation and of its several officers and shall see that all orders and resolutions of the Board of Directors are carried into effect. The Chief Executive Officer shall have the power to execute, by and on behalf of the Corporation, all deeds, bonds, mortgages, contracts and other instruments of the Corporation requiring a seal, under the seal of the Corporation, except where required or permitted by law to be otherwise signed and executed and except that the other officers of the Corporation may sign and execute documents when so authorized by these By-Laws, the Board of Directors or the Chief Executive Officer. In the absence or disability of the Chairman of the Board of Directors, or if there be none, the Chief Executive Officer shall preside at all meetings of the stockholders and, provided that the Chief Executive Officer is also a director, at all meetings of the Board of Directors. The Chief Executive Officer shall also perform such other duties and may exercise such other powers as may from time to time be assigned to such officer by these By-Laws or by the Board of Directors.

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Section 5.
President.

The President shall, subject to the control of the Board of Directors, the Chairman of the Board of Directors, if there be one, and the Chief Executive Officer, have general supervision of the business and affairs of the Corporation. The President shall have the power to execute all bonds, mortgages, contracts and other instruments of the Corporation requiring a seal, under the seal of the Corporation, except where required or permitted by law to be otherwise signed and executed and except that the other officers of the Corporation may sign and execute documents when so authorized by these By-Laws, the Board of Directors or the Chief Executive Officer. In general, the President shall perform all duties incident to the office of President and such other duties as may from time to time be assigned to the President by these By-Laws and the Board of Directors, the Chairman of the Board of Directors, if there be one, or the Chief Executive Officer. In the absence or disability of the Chairman of the Board of Directors and the Chief Executive Officer, the President shall preside at all meetings of the stockholders and, provided the President is also a director, at all meetings of the Board of Directors. In the event of the inability or refusal of the Chief Executive Officer to act, the Board of Directors may designate the President to perform the duties of the Chief Executive Officer, and, when so acting, the President shall have all the powers of and be subject to all the restrictions upon the Chief Executive Officer.

Section 6.
Vice Presidents.

At the request of the Chief Executive Officer or the President or in the President's absence or in the event of the President's inability or refusal to act (and if there be no Chairman of the Board of Directors), the Vice President, or the Vice Presidents if there are more than one (in the order designated by the Board of Directors), shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. Each Vice President shall perform such other duties and have such other powers as the Board of Directors, the Chief Executive Officer or the President from time to time may prescribe. If there be no Chairman of the Board of Directors, no Chief Executive Officer and no Vice President, the Board of Directors shall designate the officer of the Corporation who, in the absence of the President or in the event of the inability or refusal of the President to act, shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President.

Section 7.
Corporate Secretary.

The Corporate Secretary shall attend all meetings of the Board of Directors and all meetings of the stockholders and record all the proceedings thereat in a book or books to be kept for that purpose; the Corporate Secretary shall also perform like duties for committees of the Board of Directors when required. The Corporate Secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors, the Chairman of the Board of Directors, the Chief Executive Officer or the President, under whose supervision the Corporate Secretary shall be. If the Corporate Secretary shall be unable or shall refuse to cause to be given notice of all meetings of the stockholders and special meetings of the Board of Directors, and if there be no Assistant Corporate Secretary, then either the Board of Directors, the Chief Executive Officer or the President may choose another officer to cause such notice to be given. The

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Corporate Secretary shall have custody of the seal of the Corporation and the Corporate Secretary or any Assistant Corporate Secretary, if there be one, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by the signature of the Corporate Secretary or by the signature of any such Assistant Corporate Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest to the affixing by such officer's signature. The Corporate Secretary shall see that all books, reports, statements, certificates and other documents and records required by law to be kept or filed are properly kept or filed, as the case may be.

Section 8.
Treasurer.

The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the Chief Executive Officer, the President and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all transactions as Treasurer and of the financial condition of the Corporation. If required by the Board of Directors, the Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of the office of the Treasurer and for the restoration to the Corporation, in case of the Treasurer's death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in the Treasurer's possession or under the Treasurer's control belonging to the Corporation.

Section 9.
Assistant Corporate Secretaries.

Assistant Corporate Secretaries, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors, the Chief Executive Officer, the President, any Vice President, if there be one, or the Corporate Secretary, and in the absence of the Corporate Secretary or in the event of the Corporate Secretary's inability or refusal to act, shall perform the duties of the Corporate Secretary, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Corporate Secretary.

Section 10.
Assistant Treasurers.

Assistant Treasurers, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors, the Chief Executive Officer, the President, any Vice President, if there be one, or the Treasurer, and in the absence of the Treasurer or in the event of the Treasurer's inability or refusal to act, shall perform the duties of the Treasurer, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Treasurer. If required by the Board of Directors, an Assistant Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of the office of Assistant Treasurer and for the restoration to the Corporation, in case of the Assistant Treasurer's death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of

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whatever kind in the Assistant Treasurer's possession or under the Assistant Treasurer's control belonging to the Corporation.

Section 11.
Other Officers.

Subject to the provisions of the Certificate of Incorporation, such other officers as the Board of Directors may choose shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors. The Board of Directors may delegate to any other officer of the Corporation the power to choose such other officers and to prescribe their respective duties and powers.

Section 12.
Duties of Officers.

In addition to the duties specifically enumerated in these By-Laws, all officers and assistant officers of the Corporation shall perform such other duties as may be assigned to them from time to time by the Board of Directors or by their superior officers. The Board of Directors may change the powers or duties of any officer or assistant officer or delegate the same to any other officer, assistant officer or person.

ARTICLE V


STOCK
Section 1.
Shares of Stock.

The shares of capital stock of the Corporation shall be represented by certificates, unless and until the Board of Directors adopts a resolution permitting shares to be uncertificated. Notwithstanding the adoption of any such resolution providing for uncertificated shares, every holder of capital stock of the Corporation theretofore represented by certificates and, upon request, every holder of uncertificated shares, shall be entitled to have a certificate for shares of capital stock of the Corporation signed by, or in the name of the Corporation by, (a) the Chairman of the Board of Directors, the President or any Vice President, and (b) the Treasurer, any Assistant Treasurer, the Corporate Secretary or any Assistant Corporate Secretary, certifying the number of shares owned by such stockholder in the Corporation.

Section 2.
Lost Certificates.

The Board of Directors may direct a new certificate or uncertificated shares be issued in place of any certificate theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issuance of a new certificate or uncertificated shares, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate, or such owner's legal representative, to advertise the same in such manner as the Board of Directors shall require and/or to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate or the issuance of such new certificate or uncertificated shares.

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Section 3.
Transfers.

Stock of the Corporation shall be transferable in the manner prescribed by applicable law and in these By-Laws. Transfers of stock shall be made on the books of the Corporation, and in the case of certificated shares of stock, only by the person named in the certificate or by such person's attorney lawfully constituted in writing and upon the surrender of the certificate therefor, properly endorsed for transfer and payment of all necessary transfer taxes; or, in the case of uncertificated shares of stock, upon receipt of proper transfer instructions from the registered holder of the shares or by such person's attorney lawfully constituted in writing, and upon payment of all necessary transfer taxes and compliance with appropriate procedures for transferring shares in uncertificated form; provided, however, that such surrender and endorsement, compliance or payment of taxes shall not be required in any case in which the officers of the Corporation shall determine to waive such requirement. With respect to certificated shares of stock, every certificate exchanged, returned or surrendered to the Corporation shall be marked “Cancelled,” with the date of cancellation, by the Corporate Secretary or Assistant Corporate Secretary of the Corporation or the transfer agent thereof. No transfer of stock shall be valid as against the Corporation for any purpose until it shall have been entered in the stock records of the Corporation by an entry showing from and to whom transferred.

Section 4.
Signatures.

Any or all of the signatures on a certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.

Section 5.
Dividend Record Date.

In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall not be more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

Section 6.
Record Owners.

The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise required by law.

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Section 7.
Transfer and Registry Agents.

The Corporation may from time to time maintain one or more transfer offices or agencies and registry offices or agencies at such place or places as may be determined from time to time by the Board of Directors.

ARTICLE VI


NOTICES
Section 1.
Notices.

Whenever written notice is required by law, the Certificate of Incorporation or these By-Laws, to be given to any director, member of a committee or stockholder, such notice may be given by mail, addressed to such director, member of a committee or stockholder, at such person's address as it appears on the records of the Corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Without limiting the manner by which notice otherwise may be given effectively to stockholders, any notice to stockholders given by the Corporation under applicable law, the Certificate of Incorporation or these By-Laws shall be effective if given by a form of electronic transmission if consented to by the stockholder to whom the notice is given. Any such consent shall be revocable by the stockholder by written notice to the Corporation. Any such consent shall be deemed to be revoked if (i) the Corporation is unable to deliver by electronic transmission two (2) consecutive notices by the Corporation in accordance with such consent and (ii) such inability becomes known to the Corporate Secretary or Assistant Corporate Secretary of the Corporation or to the transfer agent, or other person responsible for the giving of notice; provided, however, that the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action. Notice given by electronic transmission, as described above, shall be deemed given: (i) if by facsimile telecommunication, when directed to a number at which the stockholder has consented to receive notice; (ii) if by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice; (iii) if by a posting on an electronic network, together with separate notice to the stockholder of such specific posting, upon the later of (A) such posting and (B) the giving of such separate notice; and (iv) if by any other form of electronic transmission, when directed to the stockholder. Notice to directors or committee members may be given personally or by telegram, telex, cable or by means of electronic transmission.

Section 2.
Waivers of Notice.

Whenever any notice is required by applicable law, the Certificate of Incorporation or these By-Laws, to be given to any director, member of a committee or stockholder, a waiver thereof in writing, signed by the person or persons entitled to notice, or a waiver by electronic transmission by the person or persons entitled to notice, whether before or after the time stated therein, shall be deemed equivalent thereto. Attendance of a person at a meeting, present in person or represented by proxy, shall constitute a waiver of notice of such meeting, except where the person attends the meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be

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transacted at, nor the purpose of, any Annual Meeting or Special Meeting or any regular or special meeting of the directors or members of a committee of directors need be specified in any written waiver of notice unless so required by law, the Certificate of Incorporation or these By-Laws.

ARTICLE VII


GENERAL PROVISIONS
Section 1.
Dividends.

Subject to the requirements of the GCL and the provisions of the Certificate of Incorporation, dividends upon the capital stock of the Corporation may be declared by the Board of Directors at any regular or special meeting of the Board of Directors (or any action by written consent in lieu thereof in accordance with Section 8 of Article III hereof), and may be paid in cash, in property, or in shares of the Corporation's capital stock. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board of Directors from time to time, in its absolute discretion, deems proper as a reserve or reserves to meet contingencies, or for purchasing any of the shares of capital stock, warrants, rights, options, bonds, debentures, notes, scrip or other securities or evidences of indebtedness of the Corporation, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for any proper purpose, and the Board of Directors may modify or abolish any such reserve.

Section 2.
Disbursements.

All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.

Section 3.
Fiscal Year.

The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors.

Section 4.
Corporate Seal.

The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words “Corporate Seal, Delaware”. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

Section 5.
Facsimile Signatures.

In addition to the provisions for use of facsimile signatures elsewhere specifically authorized in these By-Laws, facsimile signatures of any office or officers of the Corporation may be used whenever and as authorized by the Board of Directors or a committee thereof.

ARTICLE VIII


INDEMNIFICATION

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Section 1.
Power to Indemnify in Actions, Suits or Proceedings other than Those by or in the Right of the Corporation.

Subject to Section 3 of this Article VIII, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation), by reason of the fact that such person is or was a director or officer of the Corporation, or is or was a director or officer of the Corporation serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person's conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that such person's conduct was unlawful.

Section 2.
Power to Indemnify in Actions, Suits or Proceedings by or in the Right of the Corporation.

Subject to Section 3 of this Article VIII, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such person is or was a director or officer of the Corporation, or is or was a director or officer of the Corporation serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of the State of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.

Section 3.
Authorization of Indemnification.

Any indemnification under this Article VIII (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the present or former director or officer is proper in the circumstances because such person has met the applicable standard of conduct set forth in Section 1 or Section 2 of this Article VIII, as the case may be. Such determination shall be made, with respect to a person who is a director or

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officer at the time of such determination, (i) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (ii) by a committee of such directors designated by a majority vote of such directors, even though less than a quorum, or (iii) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion or (iv) by the stockholders. Such determination shall be made, with respect to former directors and officers, by any person or persons having the authority to act on the matter on behalf of the Corporation. To the extent, however, that a present or former director or officer of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding described above, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection therewith, without the necessity of authorization in the specific case.

Section 4.
Good Faith Defined.

For purposes of any determination under Section 3 of this Article VIII, a person shall be deemed to have acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal action or proceeding, to have had no reasonable cause to believe such person's conduct was unlawful, if such person's action is based on the records or books of account of the Corporation or another enterprise, or on information supplied to such person by the officers of the Corporation or another enterprise in the course of their duties, or on the advice of legal counsel for the Corporation or another enterprise or on information or records given or reports made to the Corporation or another enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Corporation or another enterprise. The provisions of this Section 4 of this Article VIII shall not be deemed to be exclusive or to limit in any way the circumstances in which a person may be deemed to have met the applicable standard of conduct set forth in Section 1 or Section 2 of this Article VIII, as the case may be.

Section 5.
Indemnification by a Court.

Notwithstanding any contrary determination in the specific case under Section 3 of this Article VIII, and notwithstanding the absence of any determination thereunder, any director or officer may apply to the Court of Chancery of the State of Delaware or any other court of competent jurisdiction in the State of Delaware for indemnification to the extent otherwise permissible under Section 1 or Section 2 of this Article VIII. The basis of such indemnification by a court shall be a determination by such court that indemnification of the director or officer is proper in the circumstances because such person has met the applicable standard of conduct set forth in Section 1 or Section 2 of this Article VIII, as the case may be. Neither a contrary determination in the specific case under Section 3 of this Article VIII nor the absence of any determination thereunder shall be a defense to such application or create a presumption that the director or officer seeking indemnification has not met any applicable standard of conduct. Notice of any application for indemnification pursuant to this Section 5 of this Article VIII shall be given to the Corporation promptly upon the filing of such application. If successful, in whole or in part, the director or officer seeking indemnification shall also be entitled to be paid the expense of prosecuting such application.

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Section 6.
Expenses Payable in Advance.

Expenses (including attorneys' fees) incurred by a director or officer in defending any civil, criminal, administrative or investigative action, suit or proceeding shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation as authorized in this Article VIII. Such expenses (including attorneys' fees) incurred by former directors and officers or other employees and agents may be so paid upon such terms and conditions, if any, as the Corporation deems appropriate.

Section 7.
Nonexclusivity of Indemnification and Advancement of Expenses.

The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VIII shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under the Certificate of Incorporation, these By-Laws, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person's official capacity and as to action in another capacity while holding such office, it being the policy of the Corporation that indemnification of the persons specified in Section 1 and Section 2 of this Article VIII shall be made to the fullest extent permitted by law. The provisions of this Article VIII shall not be deemed to preclude the indemnification of any person who is not specified in Section 1 or Section 2 of this Article VIII but whom the Corporation has the power or obligation to indemnify under the provisions of the GCL, or otherwise.

Section 8.
Insurance.

The Corporation may purchase and maintain insurance on behalf of any person who is or was a director or officer of the Corporation, or is or was a director or officer of the Corporation serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the Corporation would have the power or the obligation to indemnify such person against such liability under the provisions of this Article VIII.

Section 9.
Certain Definitions.

For purposes of this Article VIII, references to “the Corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors or officers, so that any person who is or was a director or officer of such constituent corporation, or is or was a director or officer of such constituent corporation serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article VIII with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. The term “another enterprise” as used in this Article VIII shall

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mean any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise of which such person is or was serving at the request of the Corporation as a director, officer, employee or agent. For purposes of this Article VIII, references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the Corporation” shall include any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director or officer with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation” as referred to in this Article VIII.

Section 10.
Survival of Indemnification and Advancement of Expenses.

The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VIII shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person.

Section 11.
Limitation on Indemnification.

Notwithstanding anything contained in this Article VIII to the contrary, except for proceedings to enforce rights to indemnification (which shall be governed by Section 5 of this Article VIII), the Corporation shall not be obligated to indemnify any director or officer (or his or her heirs, executors or personal or legal representatives) or advance expenses in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized or consented to by the Board of Directors of the Corporation.

Section 12.
Indemnification of Employees and Agents.

The Corporation may, to the extent authorized from time to time by the Board of Directors and subject to the Certificate of Incorporation and any agreement between the Corporation and any officer or director of the Corporation, provide rights to indemnification and to the advancement of expenses to employees and agents of the Corporation similar to those conferred in this Article VIII to directors and officers of the Corporation.

ARTICLE IX


AMENDMENTS
Section 1.
Amendments.

These By-Laws may be amended, altered or repealed, in whole or in part, or new By-Laws may be adopted by the stockholders or by the Board of Directors; provided, however, that notice of such amendment, alteration or repeal, or adoption of new By-Laws, be contained in the notice of such meeting of the stockholders or Board of Directors, as the case may be. Any such amendment, alteration, repeal or adoption must be approved by sixty-six and two third percent (66 2/3%) of the entire Board of Directors then in office or the affirmative vote of at least eighty

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percent (80%) of the votes entitled to be cast thereon by the holders of the then outstanding capital stock of the Corporation.

Section 2.
Entire Board of Directors.

As used in this Article IX and in these By-Laws generally, the term “entire Board of Directors” means the total number of directors which the Corporation would have if there were no vacancies.

* * *

Originally adopted as of: March 31, 2010

Last Amended as of: February 20, 2026

 

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EXHIBIT 4.6

DESCRIPTION OF REGISTRANT’S SECURITIES

REGISTERED PURSUANT TO SECTION 12 OF THE

SECURITIES EXCHANGE ACT OF 1934

 

The following description sets forth certain material terms and provisions of the securities of Primerica, Inc. (the “company,” “we,” “us” and “our”) that are registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). This description also summarizes relevant provisions of Delaware General Corporation Law (the “DGCL”). The following summary does not purport to be complete and is subject to, and is qualified in its entirety by reference to, the applicable provisions of the DGCL and our certificate of incorporation and our by-laws, copies of which are incorporated by reference as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.4 is a part. We encourage you to read our certificate of incorporation, our by-laws and the applicable provisions of the DGCL for additional information.

Authorized Shares of Capital Stock

 

Our authorized capital stock consists of 500,000,000 shares of common stock, par value $0.01 per share, comprised of a series of voting common stock and a series of non-voting common stock, and 10,000,000 shares of preferred stock, par value $0.01 per share. The outstanding shares of our common stock are fully paid and non-assessable.

 

Common Stock

 

Voting Rights. Holders of our voting common stock are entitled to one vote per share on all matters submitted to a vote of stockholders. Holders of our non-voting common stock are not entitled to vote on any matter, except as required by law or to amend, alter or repeal the provisions of our certificate of incorporation providing for the preferences, limitations and rights of the non-voting common stock. Holders of our common stock do not have cumulative voting rights.

 

Dividend Rights. Holders of our voting common stock and non-voting common stock rank equally with respect to payment of dividends, as may be declared by our board of directors out of funds legally available for the payment of those dividends.

 

Rights Upon Liquidation. Upon the liquidation, dissolution or winding up of our company, the holders of our voting common stock and non-voting common stock will rank equally and will be entitled to receive their ratable share of our net assets available after payment of all debts and other liabilities, subject to the prior rights of any outstanding preferred stock.

 

Other Rights and Procedures. Holders of our voting common stock and non-voting common stock have no preemptive, subscription or redemption rights.

 

Listing. Our common stock has been approved for listing on the NYSE under the symbol “PRI”.

 

Transfer Agent and Registrar. The Transfer Agent and Registrar for our voting common stock and non-voting common stock is Computershare Inc.

 

 

 

Preferred Stock

Our board of directors has the authority, without any further vote or action by the stockholders, to issue preferred stock in one or more series and to fix the preferences, limitations and rights of the shares of each series, including:

•
dividend rates;
•
conversion rights;
•
voting rights;
•
terms of redemption and liquidation preferences; and
•
the number of shares constituting each series.

Board of Directors

Our board of directors is not classified. Our certificate of incorporation provides that our board of directors shall consist of not less than three or more than fifteen members, the exact number of which shall be fixed from time to time by resolution adopted by the affirmative vote of a majority of the entire board of directors which we would have if there were no vacancies at the time such resolution is adopted. This range cannot be altered without stockholder approval.

Anti-Takeover Effect of Provisions of Our Certificate of Incorporation and By-laws and of Delaware Law

The rights of our stockholders and related matters are governed by the DGCL, our certificate of incorporation and by-laws, certain provisions of which may discourage or make more difficult a takeover attempt that a stockholder might consider in his or her best interest by means of a tender offer or proxy contest or removal of our incumbent officers or directors. These provisions may also adversely affect prevailing market prices for our common stock. However, we believe that these provisions will discourage coercive takeover practices and inadequate takeover bids and will encourage persons seeking to acquire control of our company to first negotiate with our board of directors. We further believe that the benefits provided by our ability to negotiate with the proponent of an unsolicited proposal outweigh the disadvantage of discouraging those proposals and that negotiation of an unsolicited proposal could result in an improvement of its terms.

 

Certificate of Incorporation and By-law Provisions

 

Stockholder Action by Written Consent; Special Meetings. Our certificate of incorporation permits stockholders to take action by the written consent of holders of all of our shares in lieu of an annual or special meeting. Otherwise, stockholders will only be able to take action at an annual or special meeting called in accordance with our by-laws.

 

Our by-laws provide that, except as otherwise required by law or by our certificate of incorporation, special meetings of stockholders may be called, for any purpose or purposes, by any of: (i) the chairman of the board of directors; (ii) the chief executive officer; or (iii) any officer of the company at the request in writing of (a) our board of directors or (b) a committee of our board of directors that has been duly designated by our board of directors and whose powers and authority include the power to call such meetings. Subject to certain exceptions set forth in our by-laws, a special meeting of stockholders shall be called by our board of directors upon the written request of one or more stockholders of record who own (or if, such request is made by stockholders of record on behalf of one or more beneficial owners, such

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beneficial owners who own), in the aggregate, not less than a majority of the voting power of all the company’s shares entitled to vote on the matters to be brought before the proposed special meeting as of the date the special meeting request is delivered to the company and for the 12 months preceding such date. A stockholder seeking to request a special meeting of stockholders must satisfy the informational and procedural requirements specified in our by-laws.

 

Advance Notice Requirements for Stockholder Nominations and Other Proposals. Our by-laws provide advance notice requirements, including requirements regarding the form and content of a stockholder’s notice, for stockholders seeking to nominate persons for election to our board of directors at a meeting of stockholders or seeking to bring other business before such a meeting. A stockholder seeking to do either of the foregoing must satisfy the requirements specified in our by-laws.

 

Proxy Access. Under our by-laws, a stockholder (or group of no more than 20 stockholders) who has owned at least 3% of our common stock for at least three years may nominate persons for election to our board of directors and have the nominees included in our proxy materials for an annual meeting. The maximum number of stockholder nominees that will be included in our proxy materials for an annual meeting is the greater of two or 20% of directors to be elected. A stockholder seeking to utilize the proxy access provisions in our by-laws must satisfy the requirements specified in our by-laws.

 

Undesignated Preferred Stock. The authority possessed by our board of directors to issue preferred stock with voting or other rights or preferences could be potentially used to discourage attempts by third parties to obtain control of us through a merger, tender offer, proxy contest or otherwise by making such attempts more difficult or more costly. The provision in our certificate of incorporation authorizing such preferred stock may have the effect of deferring hostile takeovers or delaying changes of control of our management.

 

Amendment of the By-laws. Our certificate of incorporation provides that our by-laws may be amended, altered, repealed or adopted by: (i) the affirmative vote of at least 66 2/3% of our entire board of directors; or (ii) by the affirmative vote of at least 80% of the votes entitled to be cast thereon by the holders of our then outstanding capital stock. Our certificate of incorporation provides that, notwithstanding any other provision thereof (and in addition to any other vote that may be required by law), the affirmative vote of at least 80% of the votes entitled to be cast thereon by the holders of our then outstanding capital stock is required to amend, alter, repeal or adopt any provision of our certificate of incorporation inconsistent with the purpose and intent of the provisions described in this paragraph.

 

Delaware Law

 

As a Delaware corporation, we are subject to the restrictions under Section 203 of the DGCL regarding corporate takeovers. In general, Section 203 prohibits a publicly-held Delaware corporation from engaging, under certain circumstances, in a business combination with an interested stockholder for a period of three years following the date the person became an interested stockholder, unless:

 

•
prior to the date of the transaction, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;

 

•
upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time such transaction commenced, excluding, for purposes of determining the number of shares outstanding, (1) shares owned by persons who are directors and also officers of the corporation and (2) shares owned by employee stock plans in which employee participants

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do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

 

•
on or subsequent to the date of the transaction, the business combination is approved by the board of directors of the corporation and authorized at an annual or special meeting of stockholders by the affirmative vote of at least 66 2/3% of the outstanding voting stock which is not wholly owned by the interested stockholder.

 

In this context, a business combination includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. An interested stockholder is a person who, together with affiliates and associates, owns or, within three years prior to the determination of interested stockholder status owned, 15% or more of a corporation’s outstanding voting stock.

 

A Delaware corporation may “opt out” of Section 203 with an express provision in its original certificate of incorporation or an express provision in its certificate of incorporation or bylaws resulting from amendments approved by holders of at least a majority of the corporation’s outstanding voting shares. We have not elected to “opt out” of Section 203. However, we may elect to “opt out” of Section 203 by an amendment to our certificate of incorporation or by-laws.

Insurance Regulations Concerning Change of Control

 

Many state insurance regulatory laws intended primarily for the protection of policyholders contain provisions that require advance approval by state agencies of any change in control of an insurance company or insurance holding company that is domiciled or, in some cases, having such substantial business that it is deemed to be commercially domiciled in that state. Moreover, under Canadian federal insurance law, the consent of the Minister of Finance is required in order for anyone to acquire direct or indirect control, including control in fact, of an insurance company, or to acquire, directly or through any controlled entity or entities, a significant interest (i.e., more than 10%) of any class of its shares.

Limitation of Liability of Directors

 

Our certificate of incorporation provides that none of our directors shall be liable to us or our stockholders for monetary damages for any breach of fiduciary duty as a director, except to the extent otherwise required by the DGCL. The effect of this provision is to eliminate our rights, and our stockholders’ rights, to recover monetary damages against a director for breach of a fiduciary duty of care as a director. This provision does not limit or eliminate our right, or the right of any stockholder, to seek non-monetary relief, such as an injunction or rescission in the event of a breach of a director’s duty of care. In addition, our certificate of incorporation provides that if the DGCL is amended to authorize the further elimination or limitation of the liability of a director, then the liability of the directors shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended. These provisions will not alter the liability of directors under federal or state securities laws. Our certificate of incorporation also includes provisions for the indemnification of our directors and officers to the fullest extent permitted by Section 145 of the DGCL. Further, we have entered into indemnification agreements with our directors and executive officers which require us, among other things, to indemnify them against certain liabilities which may arise by reason of their status or service as a director or officer and to advance to them expenses, subject to reimbursement to us if it is determined that they are not entitled to indemnification. We also have obtained director and officer liability insurance.

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Choice of Forum

 

Our certificate of incorporation provides that, unless the company (through approval of the board of directors) consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (i) any actual or purported derivative action or proceeding brought on our behalf; (ii) any action asserting a claim of breach of a fiduciary duty owed by any director or officer to us or our stockholders; (iii) any action asserting a claim arising pursuant to any provision of the DGCL; or (iv) any action asserting a claim governed by the internal affairs doctrine.

 

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EXHIBIT 10.17

PRIMERICA, INC.

PERFORMANCE STOCK UNIT

AWARD AGREEMENT

Primerica, Inc. (“Primerica”) hereby grants to [NAME] (the “Participant”) performance-based Stock Units pursuant to the Primerica, Inc. 2020 Omnibus Incentive Plan (the “Plan”), subject to the conditions and restrictions detailed below (the “Performance Stock Units”). Terms applicable to the Performance Stock Units are contained in the Plan and in this Performance Stock Unit Award Agreement (the “Agreement”). Capitalized terms not defined herein shall have the meaning assigned to such terms in the Plan.

1.
Grant of Performance Stock Units.

Grant Date:

February 14, 2025

Target Number of Performance Stock Units:

[# UNITS]

Performance Goals:

Set forth in Exhibit A

Performance Period:

Three-year period beginning January 1, 2025 and ending on December 31, 2027

Vesting Date:

March 1, 2028

Payment Date:

March 1, 2028

 

2.
Performance Stock Units. The target number of Performance Stock Units subject to this Agreement is set forth in Section 1 (the “Target Award”). Primerica will maintain an account (the “Performance Stock Unit Account”) on its books in the name of the Participant which shall reflect such number of Performance Stock Units awarded to the Participant. Depending on Primerica’s level of achievement of the performance goals set forth in Exhibit A to this Agreement (the “Performance Goals”) for the performance period specified in Section 1 (the “Performance Period”), the Participant may earn a number of Performance Stock Units between 0% to 150% of the Target Award. Each Performance Stock Unit, to the extent earned and/or vested under the terms of this Agreement, represents an unfunded, unsecured promise by Primerica to deliver to the Participant one share of Primerica’s common stock, par value $.01 per share (“Common Stock”), and to pay to the Participant in cash an amount equal to the amount of the dividends paid by Primerica on one share of Common Stock from the Grant Date through the payment date set forth in Section 1 (the “Payment Date”), or through the Participant’s earlier employment termination date in certain circumstances as set forth in Section 5 below, subject to the terms and conditions contained in this Agreement and the Plan.
3.
Earning, Vesting and Delivery of Performance Stock Units. After the end of the Performance Period, the degree of Primerica’s achievement of the Performance Goals for the

Performance Stock Unit Award Agreement

Approved as of February 14, 2025

 

Performance Period shall be calculated and certified by the Compensation Committee of the Board of Directors and used to determine the number of Performance Stock Units earned. The earned Performance Stock Units shall become vested on the vesting date set forth in Section 1 (the “Vesting Date”), subject to earlier vesting in certain circumstances as set forth in Section 5 below. The Performance Stock Units so earned and vested shall be settled by delivery within 60 days following the Payment Date of one share of Common Stock for each such earned Performance Stock Unit and payment of the related dividend equivalent amount described in Section 4. Delivery of shares of Common Stock, and cash payment of related dividend equivalent amounts, by Primerica as described in this Section 3 shall discharge it of all of its duties and obligations under this Agreement and the Plan with respect to the Performance Stock Units.
4.
Dividend Equivalents. Upon the payment of a cash dividend on the Common Stock by Primerica during the period from the Grant Date of the Participant’s Performance Stock Units through the Payment Date, or through the Participant’s earlier employment termination date in certain circumstances as set forth in Section 5 below, Primerica shall credit the Performance Stock Unit Account of the Participant with an amount equal in value to the dividends that the Participant would have received had the Participant been the actual owner of the number of shares of Common Stock represented by the Performance Stock Units in the Participant’s Performance Stock Unit Account on that date. After the end of the Performance Period, the amount in such Performance Stock Unit Account attributable to such dividend equivalents shall be adjusted, based on the degree of Primerica’s achievement of the Performance Goals for the Performance Period, in the same percentage used to determine the number of earned Performance Stock Units. Such amount shall become vested on the Vesting Date and shall be paid to the Participant in cash on the Payment Date, subject to earlier vesting and/or payment in certain circumstances as set forth in Section 5 below.
5.
Termination of Employment. In connection with a termination of the Participant’s employment before the Vesting Date, the Participant’s Performance Stock Units shall be treated as follows:
(a)
Voluntary Resignation; Termination by Primerica for Cause. If the Participant voluntarily terminates employment with Primerica (other than upon a Retirement as described in Section 5(c)) or if Primerica terminates the Participant’s employment for Cause, vesting of the Performance Stock Units, and any related dividend equivalent amounts described in Section 4, will cease on the date the Participant’s employment is so terminated, the Performance Stock Units, and related dividend equivalent amounts, will be cancelled and the Participant shall have no further rights of any kind with respect to any Performance Stock Units under this Agreement.
(b)
Certain Other Terminations. If either (i) the Participant’s employment is terminated by Primerica for any reason other than (A) for Cause (as described in Section 5(a)), (B) in connection with a Change of Control (as described in Section 5(d)), or (C) in connection with the Participant’s disability (as described in Section 5(e)), or (ii) the Participant terminates employment with Primerica with Good Reason (as defined below) other than in connection with a Change of Control (as described in Section 5(d)), the Participant’s Performance Stock Units, and related dividend equivalent amounts described in Section 4, will be deemed to have vested on such employment termination date, contingent on satisfaction by Primerica of the Performance Goals.

Performance Stock Unit Award Agreement

Approved as of February 14, 2025

2

 

After the end of the Performance Period, the number of the Participant’s Performance Stock Units earned will be determined based on satisfaction of the Performance Goals over the Performance Period. Such amount of earned Performance Stock Units, and related dividend equivalent amounts, will be settled by delivery of one share of Common Stock for each such earned Performance Stock Unit, and payment in cash of any earned dividend equivalent amounts, within 60 days following the Payment Date. For purposes of this Agreement, the Participant may terminate employment with Good Reason if (1) an event or circumstance set forth in clauses (w), (x), (y) or (z) of this subsection (b) shall have occurred and the Participant provides Primerica with written notice thereof within 90 days after the occurrence or existence of such event or circumstance, which notice shall specifically identify the event or circumstance that the Participant believes constitutes Good Reason, (2) Primerica fails to correct the circumstance or event so identified within 30 days after the receipt of such notice (the “Cure Period”), and (3) the Participant resigns within 30 days after the Cure Period. For purposes of this Agreement, “Good Reason” means, in the absence of the Participant’s written consent, the occurrence of any of the following:

(w) a material diminution by Primerica in the Participant’s annual base salary or a material diminution in the Participant’s target annual bonus opportunity as a percentage of the Participant’s annual base salary, unless replaced by one or more other bonus or incentive opportunities with a comparable aggregate bonus and incentive opportunity;

(x) a material diminution in the Participant’s authority, duties or responsibilities, provided that a change in the Participant’s reporting relationship (in the absence of any other change which may constitute a material diminution in the Participant’s authority, duties or responsibilities) shall not constitute “Good Reason”;

(y) Primerica requiring the Participant’s principal business location to be at any office or location more than 50 miles from the Participant’s principal business location as of immediately prior to such relocation (other than to an office or location closer to the Participant’s home residence); or

(z) any material breach of this Agreement by Primerica.

(c)
Retirement. If the Participant (i) voluntarily terminates employment with Primerica after having attained at least the age of 55 and with the sum of the Participant’s age (in whole years) plus the Participant’s Years of Service (as defined below) equaling 75 or more on the date of such termination; (ii) notice has been provided to the Chief Executive Officer (the “CEO”) of Primerica (or to the Chairman of the Board in the event it relates to the CEO’s retirement) at least six months prior to the individual’s proposed retirement date; and (iii) adequate transition cooperation has been provided up until the last day of employment as determined in the sole discretion of the CEO (or the Chairman of the Board in the event it relates to the CEO’s retirement) (a “Retirement”), then the Participant’s Performance Stock Units, and related dividend equivalent amounts described in Section 4, will be deemed to have vested as of the date of the Participant’s Retirement, contingent on satisfaction by Primerica of the Performance Goals. After the end of the Performance Period, the number of the Participant’s Performance Stock Units earned will be determined based on satisfaction of the Performance Goals over the Performance Period. Such amount of earned Performance Stock Units, and related dividend equivalent amounts, will be

Performance Stock Unit Award Agreement

Approved as of February 14, 2025

3

 

settled by delivery of one share of Common Stock for each such earned Performance Stock Unit, and payment in cash of any earned dividend equivalent amounts, within 60 days following the Payment Date. For purposes of this Agreement, the term “Years of Service” shall mean the total number of years the Participant’s period of service to Primerica and any Subsidiary as of the date the Participant terminates employment.
(d)
Change of Control. If, in the event of a Change of Control, either (i) the Participant’s employment is terminated by Primerica (or a successor entity) other than for Cause, or (ii) the Participant terminates employment with Primerica (or a successor entity) with Good Reason, at any time during the period that begins on the date 6 months before the date of such Change of Control and ends on the date 24 months after the date of such Change of Control, the number of the Performance Stock Units in the Participant’s Target Award (as the same may be adjusted in connection with the Change of Control transaction per the terms of the Plan), and the related dividend equivalent amounts described in Section 4, will be deemed to have vested on such employment termination date. Such vested Performance Stock Units, and related dividend equivalent amounts, will be settled within 60 days following the date the Participant’s employment is so terminated or, for a Participant whose employment terminates during the 6-month period preceding the Change of Control, within 60 days following the date of the Change of Control, by delivery of one share of Common Stock for each such vested Performance Stock Unit (as the same may be adjusted in connection with the Change of Control transaction per the terms of the Plan) and payment of the related dividend equivalent amount described in Section 4.
(e)
Disability. If the Participant’s employment is terminated by Primerica following completion of the Participant’s approved disability leave pursuant to the applicable Primerica disability policy, the number of the Performance Stock Units in the Participant’s Target Award, and the related dividend equivalent amounts described in Section 4, will be deemed to have vested on such employment termination date. Such vested Performance Stock Units, and related dividend equivalent amounts, will be settled within 60 days following the date the Participant’s employment is so terminated by delivery of one share of Common Stock for each such vested Performance Stock Unit and payment of the related dividend equivalent amount described in Section 4.
(f)
Death. If the Participant’s employment is terminated upon the Participant’s death, the number of the Performance Stock Units in the Participant’s Target Award, and related dividend equivalent amounts described in Section 4, will be deemed to have vested on the date of the Participant’s death. Such vested Performance Stock Units, and related dividend equivalent amounts, will be settled within 60 days following the date of the Participant’s death by delivery of one share of Common Stock for each such vested Performance Stock Unit and payment of the dividend equivalent amount described in Section 4, to the personal representative of the Participant’s estate or recipient thereunder pursuant to the terms of the Participant’s will or the applicable laws of descent and distribution. Notwithstanding the provisions of Sections 5(b) and 5(c), if following a termination described in Section 5(b) or a Retirement described in Section 5(c), a Participant dies prior to the end of the Performance Period, settlement of such Participant’s Performance Stock Units will be made under the terms described in this Section 5(f).
(g)
Settlement. Delivery of shares of Common Stock, and cash payment of related dividend equivalent amounts, by Primerica as described in this Section 5 shall discharge it

Performance Stock Unit Award Agreement

Approved as of February 14, 2025

4

 

of all of its duties and obligations under this Agreement and the Plan with respect to the Performance Stock Units.
(h)
Release Agreement. Notwithstanding the foregoing, payment with respect to the Participant’s Performance Stock Units following termination of employment as described in subsections (b), (c), (d) or (e) above shall be subject to and conditioned upon the Participant having executed a waiver of claims and general release of Primerica, in a form reasonably acceptable to Primerica, and for which any revocation rights have expired. If a Participant fails or refuses to execute such a waiver of claims and general release, or timely revokes a previously executed waiver of claims and general release, before the Payment Date, such amounts will not vest as described in subsections (b), (c), (d) or (e) above, as the case may be, and the Performance Stock Units will be cancelled, and the Participant shall have no further rights with respect to such Performance Stock Units.
6.
Stockholder Rights. The grant of Performance Stock Units does not entitle the Participant to any rights of a stockholder of Common Stock, including dividends or voting rights, until such time as the Performance Stock Units are settled in Common Stock.
7.
Nontransferable. As provided by the terms of the Plan, no rights granted under this Agreement, nor any shares of Common Stock issuable pursuant to this Agreement, shall be transferable or assignable by the Participant (or by any other person), other than by will or by the laws of descent and distribution, and they may not be pledged or hypothecated in any way, prior to the issuance and delivery of the shares of Common Stock pursuant to this Agreement. Any attempted transfer, assignment, pledge or other disposition contrary to the provisions of the Plan and this Agreement shall be null and void and without legal effect.
8.
Consent to Electronic Delivery. In lieu of receiving documents in paper format, by receipt of the Performance Stock Units, the Participant consents, to the fullest extent permitted by law, to electronic delivery of any documents that Primerica may be required to deliver (including, but not limited to, stock certificates, prospectuses, prospectus supplements, grant or award notifications and agreements and all other forms or communications) in connection with the Performance Stock Units. Electronic delivery of a document to the Participant may be via a Primerica e-mail system or by reference to a location on an Internet site to which the Participant has access.
9.
Tax Withholding. The Participant shall be responsible for any applicable taxes and penalties, and any interest that accrues thereon, incurred in connection with the Performance Stock Units, including the payment of any dividends with respect thereto. Primerica or a Subsidiary employing the Participant has the authority and the right to deduct or withhold, or require the Participant to remit to the employer, an amount sufficient to satisfy withholding requirements with respect to applicable federal, state, local, foreign or other governmental taxes or charges (including, without limitation, income, payroll and excise taxes) and to take such other action as may be necessary to satisfy any such withholding obligations.
10.
Compliance with EESA. To the extent that the Participant and the Performance Stock Units are subject to Section 111 of the Emergency Economic Stabilization Act of 2008, as amended, and any regulations, guidance or interpretations that may from time to time be

Performance Stock Unit Award Agreement

Approved as of February 14, 2025

5

 

promulgated thereunder (“EESA”), then any payment of any kind provided for by, or accrued with respect to, the Performance Stock Units must comply with EESA, and the Agreement and the Plan will be interpreted or reformed to so comply. If requested by Primerica, the Participant will grant to the U.S. Treasury Department (or other body of the U.S. government) and to Primerica a waiver in a form acceptable to the U.S. Treasury Department (or other body) and Primerica releasing the U.S. Treasury Department (or other body) and Primerica from any claims that the Participant may otherwise have as a result of the issuance of any regulations, guidance or interpretations that adversely modify the terms of the Performance Stock Units that would not otherwise comply with the executive compensation and corporate governance requirements of EESA or any securities purchase agreement or other agreement entered into between Primerica or its affiliates and the U.S. Treasury Department (or other body) pursuant to EESA.
11.
Entire Agreement. The Agreement and the Plan constitute the entire understanding between Primerica and the Participant regarding the Performance Stock Units and supersede all previous written, oral, or implied understandings between the parties hereto about the subject matter hereof.
12.
No Right to Employment. Nothing contained herein, in the Plan, or in any prospectus shall confer upon the Participant any rights to continued employment or employment in any particular position, at any specific rate of compensation, or for any particular period of time.
13.
Arbitration. Any disputes related to the Performance Stock Units shall be resolved by arbitration in accordance with Primerica’s arbitration policies. In the absence of an effective arbitration policy, the Participant acknowledges and agrees that any dispute related to the Performance Stock Units shall be submitted to arbitration in accordance with the Commercial Rules of the American Arbitration Association, if so elected by Primerica in its sole discretion.
14.
Conflict. In the event of a conflict between the Agreement and the Plan, the Plan shall control.
15.
Governing Law. The Agreement shall be construed in accordance with and governed by the laws of the State of Delaware.
16.
Internal Revenue Code Section 409A. The intent of the parties is that the payments and benefits under this Agreement comply with Section 409A of the Internal Revenue Code of 1986, as amended, and regulations and other official guidance issued thereunder (“Code Section 409A”), to the extent subject thereto and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted and be administered to be in compliance with Code Section 409A. Consistent with such intent, references to the Participant’s termination of employment or words of similar import as used in this Agreement shall mean the Participant’s “separation from service” as such term is used in Code Section 409A. In the case of a Participant who is a “specified employee” (as such term is used in Code Section 409A), amounts payable upon the Participant’s separation from service shall be, to the extent required under Code Section 409A, made on the date that is six (6) months following the date of the Participant’s employment termination (or, if earlier, the date of the Participant’s death). Each installment or other payment under this Agreement shall be treated as a separate payment for purposes of Code Section 409A. To the extent that payments and benefits under this Agreement are nonqualified deferred compensation subject to Code Section

Performance Stock Unit Award Agreement

Approved as of February 14, 2025

6

 

409A and are contingent upon the Participant’s taking any employment-related action, including without limitation execution (and nonrevocation) of another agreement, such as a release agreement, and the period within which such action(s) may be taken by the Participant would begin in one calendar year and expire in the following calendar year, then such amounts or benefits shall be paid in such following calendar year.
17.
Successors and Assigns. This Agreement shall be binding on all successors and assigns of the Participant, including, without limitation, the estate of the Participant and the executor, administrator or trustee of such estate, or any receiver or trustee in bankruptcy or representative of the Participant’s creditors. This Agreement shall be binding on Primerica and its successors and assigns.
18.
Reimbursement or Cancellation of Certain Awards. The Performance Stock Units will be subject to repayment by the Participant to Primerica (i) to the extent set forth in the Plan and (ii) to the extent the Participant is, or in the future becomes, subject to (a) any other Primerica or affiliate “clawback” or recoupment policy that is adopted to comply with the requirements of any applicable laws, rules or regulations, or otherwise or (b) any applicable laws which impose mandatory recoupment, under circumstances set forth in such applicable laws. Further, in the event that the Committee determines that the Performance Stock Units would not have been granted, vested or paid absent fraud or misconduct of the Participant, the Committee, in its discretion, shall take such action as it deems necessary or appropriate to address the fraud or misconduct. Such actions may include, without limitation and to the extent permitted by applicable law, in appropriate cases, causing the partial or full cancellation of any Performance Stock Units granted to the Participant or requiring partial or full repayment of the value of the Common Stock acquired on settlement of the Performance Stock Units, in each case as the Committee determines to be in the best interests of Primerica.

 

Performance Stock Unit Award Agreement

Approved as of February 14, 2025

7

EXHIBIT 10.17

EXHIBIT A

 

Performance Goals and Payout Matrix

 

 

Threshold

Target

Maximum

Payout Factor

(50%)

(100%)

(150%)

 

 

 

 

ROAE Performance Range:

90% of Target

100% of Target

110% of Target

     Average Operating ROAE from 2025-2027

27.0%

30.0%

33.0%

 

 

 

 

EPS Growth Performance Range:

70% of Target

100% of Target

130% of Target

     Average Annual EPS Growth from 2025-2027

4.9%

7.0%

9.1%

 

Performance Stock Unit Award Agreement

Approved as of February 14, 2025

EXHIBIT 10.20

PRIMERICA, INC.

LEADERSHIP TEAM RESTRICTED STOCK UNIT

AWARD AGREEMENT

Primerica, Inc. (“Primerica”) hereby grants to [NAME] (the “Participant”) Stock Units (the “Restricted Stock Units”) pursuant to the Primerica, Inc. 2020 Omnibus Incentive Plan (the “Plan”), subject to the conditions and restrictions detailed in the Plan and in this Employee Restricted Stock Unit Award Agreement (the “Award Agreement”). Terms applicable to the Restricted Stock Units are contained in the Plan and in this Award Agreement (the “Agreement”). Capitalized terms not defined herein shall have the meaning assigned to such terms in the Plan.

1.
Grant of Restricted Stock Units.

Grant Date:

February 14, 2025

Number of Restricted Stock Units:

[# UNITS]

Vesting Dates (one-third of the
Restricted Stock Units vest
on each Vesting Date):

March 1, 2026

March 1, 2027

March 1, 2028

Payment Dates:

Each Vesting Date

 

2.
Vesting and Delivery. Each Restricted Stock Unit represents an unfunded, unsecured promise by Primerica to deliver one share of Primerica’s common stock, par value $.01 per share (“Common Stock”), subject to the terms and conditions contained in this Agreement and the Plan. The Restricted Stock Units shall, except as provided in Section 3 below, become vested on the Vesting Dates set forth in Section 1, and the Restricted Stock Units so vesting shall be settled by delivery of shares of Common Stock as of the Payment Date with respect to each such Vesting Date. Such delivery of shares of Common Stock by Primerica shall discharge it of all of its duties and obligations under this Agreement and the Plan with respect to such vested Restricted Stock Units.
3.
Termination of Employment. Notwithstanding anything to the contrary herein, upon a termination of the Participant’s employment, the Restricted Stock Units shall be treated as follows:
(a)
Voluntary Resignation; Termination by Primerica for Cause. If the Participant voluntarily terminates employment with Primerica (other than upon a Retirement as described in Section 3(c)) or if Primerica terminates the Participant’s employment for Cause, vesting of the Restricted Stock Units will cease on the date the Participant’s employment is so terminated, the unvested portion of the Restricted Stock Units (if any) will be canceled and the Participant shall have no further rights of any kind with respect to any unvested Restricted Stock Units. For purposes of this Section 3, all references to “Primerica” shall include direct and indirect subsidiaries of Primerica (each, a “Subsidiary”).
(b)
Termination by Primerica Other than for Cause. If the Participant’s employment is terminated by Primerica for any reason other than Cause (including without

Leadership Team Restricted Stock Unit Award Agreement

Approved as of February 13, 2025

 

limitation following completion of the Participant’s approved disability leave pursuant to the Primerica disability policy (the “Disability Policy”), the unvested portion of the Restricted Stock Units (if any) will vest as of the termination date.
(c)
Retirement. If the Participant (i) voluntarily terminates employment with Primerica after having attained at least the age of 55 and with the sum of the Participant’s age (in whole years) plus the Participant’s Years of Service (as defined below) equaling 75 or more on the date of such termination; (ii) notice has been provided to the Chief Executive Officer (the “CEO”) of Primerica (or to the Chairman of the Board in the event it relates to the CEO’s retirement) at least six months prior to the individual’s proposed retirement date; and (iii) adequate transition cooperation has been provided up until the last day of employment as determined in the sole discretion of the CEO (or the Chairman of the Board in the event it relates to the CEO’s retirement) (a “Retirement”), then the unvested portion of the Restricted Stock Units (if any) will vest as of the date of the Participant’s Retirement. For purposes of this Agreement, the term “Years of Service” shall mean the total number of years the Participant’s period of service to Primerica and any Subsidiary as of the date the Participant terminates employment.
(d)
Death. If the Participant’s employment is terminated upon the Participant’s death, the unvested portion of the Restricted Stock Units (if any) will vest as of the termination date.
(e)
Payment Date. In the event of the Participant’s termination of employment as described in subsection (b), (c) or (d) of this Section 3, any previously unpaid Restricted Stock Units shall be settled by delivery to the Participant of shares of Common Stock on the sixtieth (60th) day following the Participant’s termination of employment; provided that, to the extent necessary to comply with Code Section 409A (as defined in Section 14 below), in the case of a Participant who is a “specified employee” (as such term is used in Code Section 409A), such payment shall be made on the date that is six (6) months following the date of the Participant’s employment termination (or, if earlier, the date of the Participant’s death). Delivery of shares of Common Stock by Primerica shall discharge it of all of its duties and obligations under this Agreement and the Plan with respect to the Participant’s Restricted Stock Units.
(f)
Release Agreement. Notwithstanding the foregoing, payment of the Participant’s previously unvested Restricted Stock Units upon termination of employment as described in subsection (b) or (c) above shall be subject to and conditioned upon the Participant having executed a waiver of claims and general release of Primerica, in a form reasonably acceptable to Primerica, and for which any revocation rights have expired, before the end of the sixty (60) day period described in subsection (e). If a Participant fails or refuses to execute such a waiver of claims and general release, or timely revokes a previously executed waiver of claims and general release, before the end of such sixty (60) day period, such amounts will not vest as described in subsection (b) or (c) above, and the unvested portion of the Restricted Stock Units will be cancelled, and the Participant shall have no further rights with respect to any unvested Restricted Stock Units.
4.
Stockholder Rights. The grant of Restricted Stock Units does not entitle the Participant to any rights of a stockholder of Common Stock, including dividends or voting rights, until such time as the Restricted Stock Units are settled in Common Stock. However, prior to the

2

Leadership Team Restricted Stock Unit Award Agreement

Approved as of February 13, 2025

 

delivery of the shares of Common Stock, for so long as the Participant remains actively employed by Primerica or a Subsidiary, the Participant shall have the right to receive dividend equivalent payments in an amount equal to all dividends or other distributions payable with respect to the equivalent number of shares of Common Stock, which shall be payable at such time as the dividends and other distributions are payable to Primerica shareholders.
5.
Nontransferable. As provided by the terms of the Plan, no rights granted under this Agreement, nor any shares of Common Stock issuable pursuant to this Agreement, shall be transferable or assignable by the Participant (or by any other person), other than by will or by the laws of descent and distribution, and they may not be pledged or hypothecated in any way, prior to the issuance and delivery of the shares of Common Stock pursuant to this Agreement. Any attempted transfer, assignment, pledge or other disposition contrary to the provisions of the Plan and this Agreement shall be null and void and without legal effect.
6.
Consent to Electronic Delivery. In lieu of receiving documents in paper format, by receipt of the Restricted Stock Units, the Participant consents, to the fullest extent permitted by law, to electronic delivery of any documents that Primerica may be required to deliver (including, but not limited to, stock certificates, prospectuses, prospectus supplements, grant or award notifications and agreements and all other forms or communications) in connection with the Restricted Stock Units. Electronic delivery of a document to the Participant may be via a Primerica e-mail system or by reference to a location on an Internet site to which the Participant has access.
7.
Tax Withholding. The Participant shall be responsible for any applicable taxes and penalties, and any interest that accrues thereon, incurred in connection with the Restricted Stock Units, including the payment of any dividends with respect thereto. Primerica or a Subsidiary employing the Participant has the authority and the right to deduct or withhold, or require the Participant to remit to the employer, an amount sufficient to satisfy withholding requirements with respect to applicable federal, state, local, foreign or other governmental taxes or charges (including, without limitation, income, payroll and excise taxes) and to take such other action as may be necessary to satisfy any such withholding obligations.
8.
Compliance with EESA. To the extent that the Participant and the Restricted Stock Units are subject to Section 111 of the Emergency Economic Stabilization Act of 2008, as amended, and any regulations, guidance or interpretations that may from time to time be promulgated thereunder (“EESA”), then any payment of any kind provided for by, or accrued with respect to, the Restricted Stock Units must comply with EESA, and the Agreement and the Plan will be interpreted or reformed to so comply. If requested by Primerica, the Participant will grant to the U.S. Treasury Department (or other body of the U.S. government) and to Primerica a waiver in a form acceptable to the U.S. Treasury Department (or other body) and Primerica releasing the U.S. Treasury Department (or other body) and Primerica from any claims that the Participant may otherwise have as a result of the issuance of any regulations, guidance or interpretations that adversely modify the terms of the Restricted Stock Units that would not otherwise comply with the executive compensation and corporate governance requirements of EESA or any securities purchase agreement or other agreement entered into between Primerica or its affiliates and the U.S. Treasury Department (or other body) pursuant to EESA.

3

Leadership Team Restricted Stock Unit Award Agreement

Approved as of February 13, 2025

 

9.
Entire Agreement. The Agreement and the Plan constitute the entire understanding between Primerica and the Participant regarding the Restricted Stock Units and supersede all previous written, oral, or implied understandings between the parties hereto about the subject matter hereof.
10.
No Right to Employment. Nothing contained herein, in the Plan, or in any prospectus shall confer upon the Participant any rights to continued employment or employment in any particular position, at any specific rate of compensation, or for any particular period of time.
11.
Arbitration. Any disputes related to the Restricted Stock Units shall be resolved by arbitration in accordance with Primerica’s arbitration policies. In the absence of an effective arbitration policy, the Participant acknowledges and agrees that any dispute related to the Restricted Stock Units shall be submitted to arbitration in accordance with the Commercial Rules of the American Arbitration Association, if so elected by Primerica in its sole discretion. Nothing contained herein shall limit Primerica’s right to obtain injunctive relief in a court of law in aid of arbitration, including in connection with a violation of Section 16 below.
12.
Conflict. In the event of a conflict between the Agreement and the Plan, the Plan shall control.
13.
Governing Law. The Agreement shall be construed in accordance with and governed by the laws of the State of Delaware.
14.
Internal Revenue Code Section 409A. The intent of the parties is that the payments and benefits under this Agreement comply with Section 409A of the Internal Revenue Code of 1986, as amended, and regulations and other official guidance issued thereunder (“Code Section 409A”), to the extent subject thereto and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted and be administered to be in compliance with Code Section 409A. References to the Participant’s termination of employment or words of similar import as used in this Agreement shall mean the Participant’s “separation from service” as such term is used in Code Section 409A. Each installment or other payment under this Agreement shall be treated as a separate payment for purposes of Code Section 409A. To the extent that payments and benefits under this Agreement are nonqualified deferred compensation subject to Code Section 409A and are contingent upon the Participant’s taking any employment-related action, including without limitation execution (and nonrevocation) of another agreement, such as a release agreement, and the period within which such action(s) may be taken by the Participant would begin in one calendar year and expire in the following calendar year, then such amounts or benefits shall be paid in such following calendar year.
15.
Successors and Assigns. This Agreement shall be binding on all successors and assigns of the Participant, including, without limitation, the estate of the Participant and the executor, administrator or trustee of such estate, or any receiver or trustee in bankruptcy or representative of the Participant’s creditors. This Agreement shall be binding on Primerica and its successors and assigns.
16.
Non-Solicitation of Employees and Independent Contractors. In consideration of the grant of the Restricted Stock Units, Participant agrees that, during the term of Participant’s

4

Leadership Team Restricted Stock Unit Award Agreement

Approved as of February 13, 2025

 

employment with Primerica or any of its subsidiaries or affiliates (the “Company”) and for a period of two (2) years following the termination of that employment, Participant shall not, within the United States or Canada, directly or indirectly solicit any employees, independent contractors or other agents of the Company to end their relationship with the Company and/or to become employees, independent contractors or agents of any other person or entity engaged in the sale of the same or similar products or services as the Company. Following the Participant’s separation of employment from the Company, this non-solicitation covenant shall only apply to employees, independent contractors or agents with whom the Participant had Material Contact during the last twenty-four (24) months of Participant’s employment with the Company. Material Contact is defined as: (a) Participant having direct contact with the employee, independent contractor, or agent in connection with Participant’s performance of Company job duties; (b) Participant coordinating or supervising the work of the employee, independent contractor, or agent on behalf of the Company; and/or (c) Participant obtaining confidential information about the employee, independent contractor or agent in the ordinary course of Company business. Participant acknowledges and agrees that Primerica’s remedies at law for a breach or threatened breach of this Section 16 may be inadequate, and agrees that in the event of a breach or threatened breach of those provisions, Primerica (without posting any bond) will be entitled to obtain equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction, or any other equitable remedy that may then be available.
17.
Reimbursement or Cancellation of Certain Awards. The Restricted Stock Units will be subject to repayment by the Participant to Primerica (i) to the extent set forth in the Plan and (ii) to the extent the Participant is, or in the future becomes, subject to (a) any other Primerica or affiliate “clawback” or recoupment policy that is adopted to comply with the requirements of any applicable laws, rules or regulations, or otherwise or (b) any applicable laws which impose mandatory recoupment, under circumstances set forth in such applicable laws. Further, in the event that the Committee determines that the Restricted Stock Units would not have been granted, vested or paid absent fraud or misconduct of the Participant, the Committee, in its discretion, shall take such action as it deems necessary or appropriate to address the fraud or misconduct. Such actions may include, without limitation and to the extent permitted by applicable law, in appropriate cases, causing the partial or full cancellation of any Restricted Stock Units granted to the Participant or requiring partial or full repayment of the value of the Common Stock acquired on settlement of the Restricted Stock Units, in each case as the Committee determines to be in the best interests of Primerica.

5

Leadership Team Restricted Stock Unit Award Agreement

Approved as of February 13, 2025

EXHIBIT 10.23

PRIMERICA, INC.

RESTRICTED STOCK UNIT AWARD AGREEMENT

Primerica, Inc. (“Primerica”) hereby grants to [NAME] (the “Participant”) Stock Units pursuant to the Primerica, Inc. 2020 Omnibus Incentive Plan (the “Plan”), subject to the conditions and restrictions detailed below (the “Restricted Stock Units”). Terms applicable to the Restricted Stock Units are contained in the Plan and in this Restricted Stock Unit Award Agreement (the “Agreement”). Capitalized terms not defined herein shall have the meaning assigned to such terms in the Plan.

1.
Grant of Restricted Stock Units.

Grant Date:

May 14, 2025

Number of Restricted Stock Units:

[# SHARES]

Vesting Dates:

25% on each of August 14, 2025, November 14, 2025, February 14, 2026 and May 14, 2026

Delivery Date:

On each vesting date
2.
Vesting and Delivery. Each Restricted Stock Unit represents an unfunded, unsecured promise by Primerica to deliver one share of Primerica’s common stock, par value $.01 per share (“Common Stock”), subject to the terms and conditions contained in this Agreement and the Plan. The Restricted Stock Units shall, except as set forth in Sections 3(a) and (b) below, become vested on the Vesting Dates set forth in Section 1 and be settled by delivery of shares of Common Stock on the Delivery Date set forth in Section 1. Primerica’s delivery of the number of shares of Common Stock equal to the number of the Participant’s vested Restricted Stock Units shall discharge all of its duties and obligations under this Agreement.
3.
Termination of Service. Notwithstanding anything to the contrary herein, upon a termination of the Participant’s service as a member of the Board of Directors of Primerica (the “Board”), the Restricted Stock Units shall be treated as follows:
(a)
Termination Other Than For Death or Disability. If the Participant’s service on the Board terminates for any reason other than because of the Participant’s death or Disability, then vesting of the Restricted Stock Units will cease on the date the Participant’s service is so terminated, the unvested portion of the Restricted Stock Units (if any) will be canceled and the Participant shall have no further rights of any kind with respect to any unvested Restricted Stock Units.
(b)
Death or Disability. If the Participant’s service on the Board is terminated upon the Participant’s death or Disability, the unvested portion of the Restricted Stock Units (if any) will vest as of the termination date. For purposes of the Agreement, “Disability” means that the Participant is unable to engage in any substantial gainful activity by reason of any medically

Outside Director RSU Award Agreement

Approved as of November 12, 2024

 

 

determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months.
4.
Stockholder Rights. The grant of Restricted Stock Units does not entitle the Participant to any rights of a stockholder of Common Stock, including dividends or voting rights, until such time as the Restricted Stock Units are settled in Common Stock. However, prior to the delivery of the shares of Common Stock, the Participant shall have the right to receive dividend equivalent payments in an amount equal to all dividends or other distributions payable with respect to the equivalent number of shares of Common Stock (which shall be payable at such time as the dividends and other distributions are payable to Primerica shareholders).
5.
Nontransferable. As provided by the terms of the Plan, no rights granted under this Agreement, nor any shares of Common Stock issuable pursuant to this Agreement, shall be transferable or assignable by the Participant (or by any other person), other than by will or by the laws of descent and distribution, and they may not be pledged or hypothecated in any way, prior to the issuance and delivery of the shares of Common Stock pursuant to this Agreement. Any attempted transfer, assignment, pledge or other disposition contrary to the provisions of the Plan and this Agreement shall be null and void and without legal effect.
6.
Consent to Electronic Delivery. In lieu of receiving documents in paper format, by receipt of the Restricted Stock Units, the Participant consents, to the fullest extent permitted by law, to electronic delivery of any documents that Primerica may be required to deliver (including, but not limited to, stock certificates, prospectuses, prospectus supplements, grant or award notifications and agreements and all other forms or communications) in connection with the Restricted Stock Units. Electronic delivery of a document to the Participant may be via a Primerica e-mail system or by reference to a location on an Internet site to which the Participant has access.
7.
Tax Withholding. No withholding or deduction for any taxes shall be made by Primerica in respect of the Restricted Stock Units. The Participant shall be solely responsible for the payment of any federal, state, local or other taxes, including but not limited to, estimated taxes and self-employment taxes, as well as any interest or penalties that may be assessed, imposed or incurred, as a result of the compensation paid under the Agreement.
8.
Compliance with EESA. To the extent that the Participant and the Restricted Stock Units are subject to Section 111 of the Emergency Economic Stabilization Act of 2008, as amended, and any regulations, guidance or interpretations that may from time to time be promulgated thereunder (“EESA”), then any payment of any kind provided for by, or accrued with respect to, the Restricted Stock Units must comply with EESA, and the Agreement and the Plan will be interpreted or reformed to so comply. If requested by Primerica, the Participant will grant to the U.S. Treasury Department (or other body of the U.S. government) and to Primerica a waiver in a form acceptable to the U.S. Treasury Department (or other body) and Primerica releasing the U.S. Treasury Department (or other body) and Primerica from any claims that the Participant may otherwise have as a result of the issuance of any regulations, guidance or interpretations that adversely modify the terms of the Restricted Stock Units that would not otherwise comply with the executive compensation and corporate governance requirements of

 

2

Outside Director RSU Award Agreement

Approved as of November 12, 2024

 

EESA or any securities purchase agreement or other agreement entered into between Primerica or its affiliates and the U.S. Treasury Department (or other body) pursuant to EESA.
9.
Entire Agreement. The Agreement and the Plan constitute the entire understanding between Primerica and the Participant regarding the Restricted Stock Units and supersede all previous written, oral, or implied understandings between the parties hereto about the subject matter hereof.
10.
No Right to Continued Service. Nothing contained herein, in the Plan, or in any prospectus shall confer upon the Participant any rights to continued service on the Board, at any specific rate of compensation, or for any particular period of time.
11.
Arbitration. Any disputes related to the Restricted Stock Units shall be resolved by arbitration in accordance with Primerica’s arbitration policies. In the absence of an effective arbitration policy, the Participant acknowledges and agrees that any dispute related to the Restricted Stock Units shall be submitted to arbitration in accordance with the Commercial Rules of the American Arbitration Association, if so elected by Primerica in its sole discretion.
12.
Conflict. In the event of a conflict between the Agreement and the Plan, the Plan shall control.
13.
Governing Law. The Agreement shall be construed in accordance with and governed by the laws of the State of Delaware.
14.
Internal Revenue Code Section 409A. The intent of the parties is that the payments and benefits under this Agreement comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and regulations and other official guidance issued thereunder (“Section 409A”), to the extent subject thereto and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted and be administered to be in compliance with Section 409A. References to the Participant’s termination of service as a member of the Board or words of similar import as used in this Agreement shall mean the Participant’s “separation from service” as such term is used in Section 409A.
15.
Successors and Assigns. This Agreement shall be binding on all successors and assigns of the Participant, including, without limitation, the estate of the Participant and the executor, administrator or trustee of such estate, or any receiver or trustee in bankruptcy or representative of the Participant’s creditors. This Agreement shall be binding on Primerica and its successors and assigns.

 

3

Outside Director RSU Award Agreement

Approved as of November 12, 2024

EXHIBIT 21.1

Subsidiaries of the Registrant

 

 

 

Name

Jurisdiction of Incorporation or Organization

Primerica Life Insurance Company

Tennessee

Primerica Financial Services, LLC

Nevada

PFS Investments Inc.

Georgia

Primerica Shareholder Services, Inc.

 

Delaware

Primerica Brokerage Services, Inc.

 

Georgia

Primerica Financial Services (Canada) Ltd.

Canada

Primerica Life Insurance Company of Canada

Canada

PFSL Investments Canada Ltd.

 

Canada

PFSL Fund Management Ltd

 

Canada

National Benefit Life Insurance Company

New York

Vidalia Re, Inc.

Vermont

Primerica Mortgage, LLC

Delaware

 

 

 

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the registration statements (Nos. 333-165834, 333-176508, 333-220011, and 333-238268) on Form S-8 and (No. 333-285487) on Form S-3 of our reports dated February 27, 2026, with respect to the consolidated financial statements of Primerica, Inc. and the effectiveness of internal control over financial reporting.

/s/ KPMG LLP

Atlanta, Georgia
February 27, 2026

 

 

EXHIBIT 31.1

Certification of Chief Executive Officer

I, Glenn J. Williams, Chief Executive Officer of Primerica, Inc., certify that:

1.
I have reviewed this annual report on Form 10-K of Primerica, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

Date:

February 27, 2026

 

/s/ Glenn J. Williams

 

 

 

Glenn J. Williams

 

 

 

Chief Executive Officer

 

 

EXHIBIT 31.2

Certification of Chief Financial Officer

I, Tracy X. Tan, Executive Vice President and Chief Financial Officer of Primerica, Inc., certify that:

1.
I have reviewed this annual report on Form 10-K of Primerica, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

Date:

February 27, 2026

 

/s/ Tracy X. Tan

 

 

 

Tracy X. Tan

 

 

 

Executive Vice President and

Chief Financial Officer

 

 

 

 

 

 

EXHIBIT 32.1

Certification of CEOs and CFO Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the annual report on Form 10-K of Primerica, Inc. (the “Company”) for the period ended December 31, 2025, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Glenn J. Williams, as Chief Executive Officer of the Company, and I, Tracy X. Tan, as Executive Vice President and Chief Financial Officer of the Company, each hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)
To my knowledge, the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

 

 

 

/s/ Glenn J. Williams

Name:

 

Glenn J. Williams

Title:

 

Chief Executive Officer

Date:

 

February 27, 2026

 

 

/s/ Tracy X. Tan

Name:

 

Tracy X. Tan

Title:

 

Executive Vice President and Chief Financial Officer

Date:

 

February 27, 2026