Primerica Inc (PRI)

[daretodream]

With coffers full, Primerica eyes first post-Citi buybacks
REUTERS — 08/05/11
By Rachel Chitra

BANGALORE (Reuters) - A little over a year after spinning
off from Citigroup (Symbol : C/WS/) , Primerica (Symbol :
PRI) is considering a first share buy-back program, as one
of the biggest U.S. term life insurers wants to put its
excess capital to use, executives said.

Primerica (Symbol : PRI), which has one of the best capital
ratios among U.S. life insurers, had a risk-based capital
(RBC) ratio above 600 percent at end-June, and plans to use
Triple X reserve financing to put some of that excess to
work.

High-quality life insurers generally have around twice the
minimum RBC level of about 200 percent set by state
regulators.

"For the excess capital, we're looking at a Triple X
transaction in 2011, if it makes sense. We don't have an
acquisition plan, so we'd be doing share buy-backs," co-CEO
Rick Williams said in a telephone interview.

"If we go ahead with a Triple X, we'd have $300-$350
million we can use for buy-backs."

Insurers can use Triple X reserve financing as a way to
meet regulatory capital requirements by methods like
holding letters of credit or by securitization. Since the
financial crisis dried up capital market alternatives,
insurers now prefer to hold letters of credit than go for
securitization.

With those letters, insurers can divert capital that is
idling in reserve, to fund other activities such as buy-
backs.

Primerica (Symbol : PRI) on Tuesday posted a quarterly
profit that beat Wall Street expectations on higher sales
of its term life insurance policies and investment and
savings products.