# Primerica, Inc.: Form 10-Q for the period ended Sep 30, 2023

- Company: [Primerica, Inc.](/companies/pri.md) (CIK 1475922)
- Form: 10-Q
- Filed: 2023-11-08
- Accepted by EDGAR: Nov 8, 2023, 13:55 ET
- Period: 2023-09-30
- Accession: 0000950170-23-060945
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1475922/000095017023060945/pri-20230930.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1475922/000095017023060945/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2023-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2023-07-01 to 2023-09-30 | $710.9m | us-gaap:Revenues |
| Revenue | 9 months, 2023-01-01 to 2023-09-30 | $2.09bn | us-gaap:Revenues |
| Cost of revenue | 3 months, 2023-07-01 to 2023-09-30 | $12.6m | us-gaap:CostOfGoodsAndServicesSold |
| Cost of revenue | 9 months, 2023-01-01 to 2023-09-30 | $40.2m | us-gaap:CostOfGoodsAndServicesSold |
| Interest expense | 3 months, 2023-07-01 to 2023-09-30 | $6.6m | us-gaap:InterestExpense |
| Interest expense | 9 months, 2023-01-01 to 2023-09-30 | $20.0m | us-gaap:InterestExpense |
| Income tax | 3 months, 2023-07-01 to 2023-09-30 | $46.7m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2023-01-01 to 2023-09-30 | $130.0m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2023-07-01 to 2023-09-30 | $152.1m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2023-01-01 to 2023-09-30 | $424.7m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2023-07-01 to 2023-09-30 | $4.23 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2023-01-01 to 2023-09-30 | $11.65 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2023-07-01 to 2023-09-30 | $4.23 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2023-01-01 to 2023-09-30 | $11.67 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2023-07-01 to 2023-09-30 | 35,822,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2023-01-01 to 2023-09-30 | 36,302,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2023-01-01 to 2023-09-30 | $451.5m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Dividends paid | 9 months, 2023-01-01 to 2023-09-30 | $70.8m | us-gaap:PaymentsOfDividendsCommonStock |
| Share repurchases | 9 months, 2023-01-01 to 2023-09-30 | $302.5m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2023-09-30 | $468.8m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Total assets | at 2023-09-30 | $14.43bn | us-gaap:Assets |
| Total liabilities | at 2023-09-30 | $12.12bn | us-gaap:Liabilities |
| Shareholders' equity | at 2023-09-30 | $2.31bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 121,572 characters.

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 period from December 31, 2022 to September 30, 2023. As a result, the following discussion should be read in conjunction with MD&A and the consolidated financial statements and notes thereto that are included in our Annual Report on Form 10-K for the year ended December 31, 2022 (“2022 Annual 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 under the heading “Risk Factors” in the 2022 Annual Report and in Item 1A of this Report. Actual results may differ materially from those contained in any forward-looking statements.

This MD&A is divided into the following sections:

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

### Business Overview

We are a leading provider of financial products and services to middle-income households in the United States and Canada primarily 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, Medicare-related insurance products and other financial products, which we distribute primarily on behalf of third parties. We have three primary operating segments, Term Life Insurance, Investment and Savings Products, and Senior Health, and a fourth segment, Corporate and Other Distributed Products.

The Company adopted Accounting Standards Update No. 2018-12, Financial Services—Insurance (Topic 944)—Targeted Improvements to the Accounting for Long-Duration Contracts (“LDTI”) on January 1, 2023. The amendments in LDTI changed accounting guidance for insurance companies that issue long-duration contracts, such as term life insurance and segregated funds products. All prior period financial information has been restated as of January 1, 2021 (the “Transition Date”). See Note 1 (Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies) to our condensed consolidated financial statements included elsewhere in this report for more information about the adoption of LDTI.

***Term Life Insurance.*** We distribute the term life insurance products that we underwrite through our three issuing life insurance company subsidiaries: Primerica Life Insurance Company (“Primerica Life”), National Benefit Life Insurance Company (“NBLIC”), and Primerica Life Insurance Company of Canada (“Primerica Life Canada”). Policies remain in-force until the expiration of the coverage period or until the policyholder ceases to make premium payments. 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. Initial policy term periods are between 10 and 35 years. While premiums typically remain level during the initial term period, our claim obligations generally increase as our policyholders age. In addition, we incur significant upfront costs in acquiring new insurance business.

***Investment and Savings Products.*** In the United States, we distribute mutual funds, managed investments, variable annuity, and fixed annuity products of several third-party companies. We provide investment advisory and administrative services for client assets invested in our managed investments program. We also perform distinct transfer agent recordkeeping services and non-bank custodial services for investors purchasing certain mutual funds we distribute. In Canada, we offer mutual funds of other companies and segregated funds, which are underwritten by Primerica Life Canada.

***Senior Health.*** In the United States, we distribute Medicare-related insurance products to eligible Medicare participants and enroll eligible Medicare participants in coverage utilizing licensed health insurance agents through our e-TeleQuote Insurance, Inc. subsidiary ("e-TeleQuote"). The health insurance products we distribute are underwritten and administered by third-party health insurance carriers and primarily consist of Medicare Advantage enrollments. Contract acquisition costs are incurred upfront when policy applications are approved and include costs associated with generating or acquiring leads, as well as fees paid to Primerica Senior Health certified independent sales representatives, and compensation, licensing, and training costs incurred for e-TeleQuote’s workforce of licensed health insurance agents. e-TeleQuote’s licensed health insurance agents are employees of the Company. We receive compensation from the third-party health insurance carriers in the form of initial commissions when eligible Medicare participants are enrolled and renewal commissions upon the anniversary of the effective date, for as long as policies remain in-force.

***Corporate and Other Distributed Products.*** The Corporate and Other Distributed Products segment consists primarily of revenues and expenses related to other distributed products, including closed blocks of various insurance products underwritten by NBLIC, prepaid legal services, mortgage originations, and other financial products. These products, except for closed blocks of various insurance products underwritten by NBLIC, are distributed pursuant to distribution arrangements with third-party companies through the independent sales force. Net investment income earned on cash, cash equivalents, and our invested asset portfolio is recorded in the Corporate and Other Distributed Products segment. Interest expense incurred by the Company is attributed to the Corporate and Other Distributed Products segment.

### Business Trends and Conditions

The relative strength and stability of 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 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, which can drive or dampen recruiting. Consumer spending and borrowing levels affect how consumers evaluate their savings and debt management plans. In addition, interest rates and equity market returns impact consumer demand for the savings and investment 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.

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 result of our business for all amounts translated and reported in U.S. dollars.

Significant volatility in capital markets in recent periods has continued to impact our business. Volatility in capital markets has influenced product sales and client asset values that drive revenue in the Investment and Savings Products segment. In addition, the sharp rise in market interest rates during 2022 and further rate increases in 2023 have driven unrealized losses in our investment portfolio. We have not recognized losses caused by interest rate volatility in the income statement 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. Increased 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.

Inflation remained elevated from historical levels during the nine months ended September 30, 2023, which led to an increased cost of living for middle-income families. Continued elevated cost of living could impact demand for our products.

Certain year-over-year comparisons are impacted by the effects of the COVID-19 pandemic (“COVID-19”). Results during the first quarter of 2022 reflected the continued effects of COVID-19, namely strong policyholder persistency and elevated claims activity in our Term Life Insurance segment. Results subsequent to the first quarter of 2022 do not reflect elevated COVID-19 impacts.

The effects of these trends and conditions on our quarterly results 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:

|  | Three months ended September 30, 2023 | 2022 | Nine months ended September 30, 2023 | 2022 |
| --- | ---: | ---: | ---: | ---: |
| New recruits | 92,269 | 127,788 | 271,933 | 282,710 |
| New life-licensed independent sales representatives | 12,311 | 12,518 | 36,067 | 34,030 |

The number of new recruits decreased during the three and nine months ended September 30, 2023 compared to the same periods in 2022 as a result of the special recruiting incentives that were offered in July 2022 in connection with our biennial convention. Recruiting activity in 2023 was strong without the benefit of significant recruiting incentives as the Company continues to see a high degree of interest from people who are attracted to the flexibility of its business opportunity.

New life-licensed sales representatives during the three months ended September 30, 2023 were in line with the same period in 2022. New life-licensing activity was strong during the current period while the three months ended September 30, 2022 benefited from the impact of the recruiting incentives offered in July 2022 at the biennial convention. New life-licensed sales representatives increased during the nine months ended September 30, 2023 compared to the same period in 2022 primarily due to strong life-licensing activity experienced throughout 2023. The strong life-licensing activity realized in 2023 is primarily driven by the heightened emphasis placed by the Company and independent sales force leaders on licensing rates and the continued benefits of improvements to the licensing process, which include new licensing progress-tracking tools and an increased number of in-person licensing classes.

The size of the life-licensed independent sales force was as follows:

|  | September 30, 2023 | September 30, 2022 |
| --- | ---: | ---: |
| Life-licensed independent sales representatives, at period end | 139,053 | 134,313 |

The number of life-licensed independent sales representatives grew to 139,053 as of September 30, 2023 and reflects strong recruiting and improvements to the licensing process as discussed above.

### 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 (historically between 0.20 and 0.24 as adjusted(1)), were as follows:

|  | Three months ended September 30, 2023 | 2022 | Adjusted 2022 | Nine months ended September 30, 2023 | 2022 | Adjusted 2022 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Average number of life-licensed independent sales representatives | 138,388 | 132,823 | 132,823 | 136,912 | 131,187 | 131,187 |
| Number of new policies issued (1) | 88,589 | 71,104 | 81,372 | 270,103 | 219,374 | 253,738 |
| Average monthly rate of new policies issued per life-licensed independent sales representative(1) | 0.21 | 0.18 | 0.20 | 0.22 | 0.19 | 0.22 |

(1) The previously reported number of new policies issued and average monthly rate of new policies issued per life-licensed independent sales representatives has been adjusted for the three and nine months ended September 30, 2022 for comparability purposes as a result of our new term life insurance products introduced in October 2022, which modified how policies are structured in relation to individual lives. Historically, two adult lives could be covered under a single policy by adding a spouse rider. To better align risk and pricing in our new life insurance products, we eliminated this rider and now sell a separate policy for each insured life. Results for the three and nine months ended September 30, 2023 reflect additional policies issued to reflect the former spouse rider with a separate policy in the new life insurance products. To make year-over year comparisons more consistent, we have provided estimates for the three and nine months ended September 30, 2022.

Average number of life-licensed independent sales representatives increased for the three and nine months ended September 30, 2023 from the same periods in 2022 as a result of strong recruiting and improvements to the licensing process as discussed above.

New policies issued during the three and nine months ended September 30, 2023 increased compared to the same periods in 2022 as a result of continued growth in the number of life-licensed independent sales representatives and the customer appeal of our new term life insurance products that were introduced in late 2022.

Productivity in the three and nine months ended September 30, 2023, measured by the average monthly rate of new policies issued per life-licensed independent sales representative, was in line with our historical range.

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

*(Dollars in millions)*

|  | Three months ended September 30, 2023 | % of beginning balance | 2022 | % of beginning balance | Nine months ended September 30, 2023 | % of beginning balance | 2022 | % of beginning balance |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Face amount in force, beginning of period | $934,867 |  | $914,438 |  | $916,808 |  | $903,404 |  |
| Net change in face amount: |  |  |  |  |  |  |  |  |
| Issued face amount | 29,452 | 3% | 26,049 | 3% | 89,779 | 10% | 78,472 | 9% |
| Terminations | (24,143) | (3)% | (21,033) | (2)% | (68,936) | (8)% | (60,117) | (7)% |
| Foreign currency | (2,320) | \* | (6,669) | (1)% | 205 | \* | (8,974) | (1)% |
| Net change in face amount | 2,989 | \* | (1,653) | \* | 21,048 | 2% | 9,381 | 1% |
| Face amount in force, end of period | $937,856 |  | $912,785 |  | $937,856 |  | $912,785 |  |

\* Less than 1%.

The face amount of term life policies in-force increased for the three and nine months ended September 30, 2023 as the level of face amount issued continued to exceed the face amount terminated. Issued face amount during the three and nine months ended September 30, 2023 increased due to an increase in both the number of new policies issued and higher average face amounts per life insured. Policy terminations were elevated across many policy durations during the three and nine months ended September 30, 2023 with the higher cost of living likely a key contributing factor. The early part of the nine month period ending September 30, 2022 was the last period that reflected the benefit of the higher persistency experienced during the height of the COVID-19 pandemic.

### Investment and Savings Product Sales, Asset Values and Accounts/Positions.

Investment and savings product sales were as follows:

*(Dollars in millions)*

| Product sales: | Three months ended September 30, 2023 | 2022 | Change $% |  | Nine months ended September 30, 2023 | 2022 | Change $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| U.S. retail mutual funds | $957 | $931 | $26 | 3% | $2,928 | $3,380 | $(452) | (13)% |
| Canada retail mutual funds - with upfront sales commissions | 110 | 112 | (2) | (2)% | 366 | 801 | (435) | (54)% |
| Annuities and other | 702 | 598 | 104 | 17% | 2,077 | 2,012 | 65 | 3% |
| Total sales-based revenue generating product sales | 1,769 | 1,641 | 128 | 8% | 5,371 | 6,193 | (822) | (13)% |
| Managed investments | 236 | 320 | (84) | (26)% | 859 | 1,225 | (366) | (30)% |
| Canada retail mutual funds - no upfront sales commissions | 152 | 158 | (6) | (4)% | 529 | 160 | 369 | 231% |
| Segregated funds | 17 | 42 | (25) | (59)% | 97 | 338 | (241) | (71)% |
| Total product sales | $2,174 | $2,161 | $13 | \* | $6,856 | $7,916 | $(1,060) | (13)% |

\* Less than 1%.

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

*(Dollars in millions)*

|  | Three months ended September 30, 2023 | % of beginning balance | 2022 | % of beginning balance | Nine months ended September 30, 2023 | % of beginning balance | 2022 | % of beginning balance |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Asset values, beginning of period | $91,646 |  | $82,291 |  | $83,949 |  | $97,312 |  |
| Net change in asset values: |  |  |  |  |  |  |  |  |
| Inflows | 2,174 | 2% | 2,161 | 3% | 6,856 | 8% | 7,916 | 8% |
| Redemptions | (1,982) | (2)% | (1,447) | (2)% | (5,479) | (7)% | (5,144) | (5)% |
| Net flows | 192 | \* | 714 | \* | 1,377 | 2% | 2,772 | 3% |
| Change in fair value, net | (3,094) | (3)% | (3,466) | (4)% | 3,088 | 4% | (20,243) | (21)% |
| Foreign currency, net | (303) | \* | (802) | \* | 27 | \* | (1,104) | (1)% |
| Net change in asset values | (3,205) | (3)% | (3,554) | (4)% | 4,492 | 5% | (18,575) | (19)% |
| Asset values, end of period | $88,441 |  | $78,737 |  | $88,441 |  | $78,737 |  |

\* Less than 1%.

Average client asset values were as follows:

*(Dollars in millions)*

| Average client asset values: | Three months ended September 30, 2023 | 2022 | Change $% |  | Nine months ended September 30, 2023 | 2022 | Change $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | --- |
| Retail mutual funds | $56,565 | $51,171 | $5,394 | 11% | $54,933 | $54,709 | $224 | \* |
| Annuities and other | 24,792 | 22,965 | 1,827 | 8% | 24,116 | 24,314 | (198) | \* |
| Managed investments | 7,850 | 6,817 | 1,033 | 15% | 7,600 | 6,951 | 649 | 9% |
| Segregated funds | 2,298 | 2,368 | (70) | (3)% | 2,317 | 2,532 | (215) | (9)% |
| Total average client asset values | $91,505 | $83,321 | $8,184 | 10% | $88,966 | $88,506 | $460 | \* |

\* Less than 1%.

Average number of fee-generating positions was as follows:

*(Positions in thousands)*

| Average number of fee-generating positions (1): | Three months ended September 30, 2023 | 2022 | Change Positions% |  | Nine months ended September 30, 2023 | 2022 | Change Positions% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Recordkeeping and custodial | 2,342 | 2,295 | 47 | 2% | 2,330 | 2,272 | 58 | 3% |
| Recordkeeping only | 839 | 820 | 19 | 2% | 834 | 810 | 24 | 3% |
| Total average number of fee-generating positions | 3,181 | 3,115 | 66 | 2% | 3,164 | 3,082 | 82 | 3% |

(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.

### Changes in Investment and Savings Product Sales, Asset Values and Accounts/Positions During the Three Months Ended September 30, 2023

*Product sales.* Investment and savings product sales were flat during the three months ended September 30, 2023 compared to the three months ended September 30, 2022. Sales of variable annuities increased during the three month period in 2023 as investor demand for the guarantee features these products offer increased due to recent market volatility. Offsetting this increase were lower sales of products without upfront revenue including managed accounts and segregated funds. Managed accounts product sales decreased during the three month period in 2023 versus the three month period in 2022 due to a temporary disruption caused by the transition of our managed accounts platform to a different third-party clearing broker during the third quarter of 2023. Segregated funds product sales were lower in the 2023 period compared with the 2022 period due to regulatory restrictions on fees charged for these products that went into effect in Canada. Refer to the Regulatory Changes subsection below for additional information regarding restrictions on segregated funds compensation models in Canada.

*Rollforward of client asset values.* Ending client asset values decreased during the three months ended September 30, 2023 and the three months ended September 30, 2022 primarily due to negative equity market performance during each period. Net flows remained positive during the third quarter of 2023 but were lower than net flows during the third quarter of 2022. A large driver of the reduction in net flows in the 2023 period versus the 2022 period was the transition of the clearing broker-dealer used by our managed accounts platform. We successfully retained 98% of the client account balances during the transition; the remaining portion of client account balances that were not retained are reflected as redemptions during the 2023 period. We estimate the net redemptions associated with the transition to be approximately $150 million of client assets.

*Average client asset values.* Average client asset values increased for the three months ended September 30, 2023 compared to the three months ended September 30, 2022. The increase was driven by the factors described in the rollforward of client asset values combined with the timing and changes in market conditions that affected the balance of client assets during each period. In the three months ended September 30, 2023, higher beginning of period client asset values led to the year-over-year increase in average client asset values.

*Average number of fee-generating positions.* The average number of fee-generating positions increased during the three months ended September 30, 2023 compared to the three months ended September 30, 2022 primarily due to the 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.

### Changes in Investment and Savings Product Sales, Asset Values and Accounts/Positions During the Nine Months Ended September 30, 2023

*Product sales.* Investment and savings product sales decreased during the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. Specifically, lower year-over-year product sales during the first half of 2023 led to the decline. The impact of market volatility, the higher cost of living, and the availability of high yield money market and savings account alternatives likely drove the year-over-year reduction in demand for U.S. mutual funds during the first half of 2023. By comparison, product sales in the early part of 2022 reflected strong demand that followed positive equity market returns. The majority of Canadian mutual fund product sales shifted to a no upfront sales commission model in 2023 compared to an upfront sales commission model in early 2022 as a result of the introduction of our new principal distributor Canadian mutual fund product in July 2022. The principal distributor model results in higher asset-based trail commission revenues over time in lieu of upfront compensation at the time of sale. In addition, decreased managed accounts product sales and Canadian segregated funds product sales, due to the factors discussed in the three-month comparison, contributed to the year-over-year decline in product sales.

*Rollforward of client asset values.* Ending client asset values increased during the nine months ended September 30, 2023 compared to a decrease during the nine months ended September 30, 2022 primarily due to the difference in market performance during each respective period. Net flows remained positive during the nine month period in 2023 but were lower than net flows during the nine month period in 2022.

*Average client asset values.* Average client asset values were relatively flat for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. The slight change was driven by the factors described in the rollforward of client asset values combined with the timing and changes in market conditions that affected the balance of client assets during each period.

*Average number of fee-generating positions.* The average number of fee-generating positions increased during the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 primarily due to the same factors described in the three month comparison.

### Senior Health Key Performance Indicators.

### Submitted Policies, Approved Policies and Policies Sourced by Primerica Independent Sales Representatives

*Submitted policies.* Submitted policies represent the number of completed applications that, with respect to each application, the applicant has authorized e-TeleQuote to submit to the health insurance carrier. The applicant may need to take additional action, including providing subsequent information, before the application is reviewed by the health insurance carrier.

*Approved policies.* Approved policies represent an estimate of submitted policies approved by the health insurance carriers for the identified product during the indicated period. Not all approved policies will go in force. In general, the relationship between submitted policies and approved policies has been seasonally consistent. Therefore, factors impacting the number of submitted policies generally impact the number of approved policies.

*Policies sourced by Primerica independent sales representatives.* Primerica independent sales representatives are certified to refer eligible Medicare participants to e-TeleQuote licensed health insurance agents for potential enrollment in policies distributed by e-TeleQuote after completion of a brief certification course offered by Primerica.

The number of submitted policies by e-TeleQuote sourced from Primerica independent sales representatives measures the number of Senior Health policies submitted by e-TeleQuote to its third-party health insurance carriers that originated through the Primerica independent sales force.

The number of Senior Health submitted policies, approved policies, and submitted policies sourced by Primerica independent sales representatives were as follows:

|  | Three months ended September 30, 2023 | 2022 | Nine months ended September 30, 2023 | 2022 |
| --- | ---: | ---: | ---: | ---: |
| Number of Senior Health submitted policies | 10,718 | 16,095 | 44,429 | 61,978 |
| Number of Senior Health approved policies | 9,948 | 14,862 | 41,276 | 56,381 |
| Submitted policies sourced by Primerica independent sales representatives | 1,549 | 1,016 | 5,329 | 2,835 |

The Senior Health segment experiences notable seasonality with the strongest demand occurring in the fourth quarter due to the Medicare Annual Election Period (“AEP”) from October 15th to December 7th. We also experience seasonally higher demand in the first quarter due to the Medicare Open Enrollment Period (“OEP”) from January 1st to March 31st, which allows individuals to switch Medicare Advantage plans. Meanwhile, the second and third quarters experience seasonally lower demand as the focus for submitted policies is limited to participants that are dual eligible (Medicare and Medicaid), qualify for a special enrollment period, recently aged into Medicare or are enrolling off of an employer-sponsored plan, and other less common situations.

During the three months ended September 30, 2023, the number of submitted and approved policies decreased compared with the three months ended September 30, 2022 due to multiple factors. A decline in the number of tenured e-TeleQuote licensed health insurance agents and an increase in newly-hired agents resulted in lower productivity. Additionally, the Company adopted a new sales platform that adversely impacted productivity due to the transition in the third quarter of 2023. The number of submitted and approved policies also decreased during the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 primarily due to the Company’s efforts to control growth in favor of developing more efficient lead procurement and conversion.

For the three and nine months ended September 30, 2023, the number of submitted policies sourced by Primerica independent sales representatives increased compared to the same periods in 2022 primarily due to the increasing maturity of the Primerica referral program that has achieved greater participation by Primerica independent sales representatives.

### Lifetime Value of Commissions and Contract Acquisition Costs

*Lifetime value of commissions (“LTV”).* LTV represents the cumulative total of commissions and administrative fees estimated to be collected over the expected life of a policy for policies approved during the period. For more information on LTV, refer to Note 18 (Revenue from Contracts with Customers) of our consolidated financial statements within our 2022 Annual Report and the Factors Affecting our Results – Senior Health Segment section of MD&A included elsewhere in this report.

*Contract acquisition costs (“CAC”).* CAC represents the total direct costs incurred to acquire approved policies. CAC are primarily comprised of the costs associated with generating or acquiring leads, including fees paid to Primerica Senior Health certified independent sales representatives, as well as compensation, licensing, and training costs associated with our team of e-TeleQuote licensed health insurance agents. The number of e-TeleQuote licensed health insurance agents, agent tenure, attrition rate and productivity all impact CAC. Other than costs incurred to assist beneficiaries who are switching plans with the same carrier, we incur the entire cost of approved policies prior to enrollment and prior to receiving our first commission-related payment.

Per policy metrics for LTV and CAC measure our ability to profitably distribute Senior Health insurance products.

The LTV per approved policy, CAC per approved policy, and ratio of LTV to CAC per approved policy were as follows:

|  | Three months ended September 30, 2023 | 2022 | Nine months ended September 30, 2023 | 2022 |
| --- | ---: | ---: | ---: | ---: |
| LTV per approved policy during the period | $911 | 868 | $877 | 850 |
| CAC per approved policy during the period | $1,263 | 905 | $973 | 949 |
| LTV/CAC per approved policy | 0.72 | 0.96 | 0.90 | 0.90 |

LTV per approved policy reflects current estimates for renewal rates, policy retention and chargeback activity taking into consideration the most recent experience through September 30, 2023. LTV per approved policy increased during the three and nine months ended September 30, 2023 compared to the three and nine months ended September 30, 2022 primarily due to higher commission rates from annual rate increases and stabilizing policy churn.

The increase in CAC per approved policy during the three months ended September 30, 2023 compared to the three months ended September 30, 2022 was primarily driven by increased costs to hire, train, and license e-TeleQuote health insurance agents as we hired more new agents in 2023 to prepare for the upcoming AEP and OEP. As the third quarter is a seasonally low volume sales quarter, the increase in agent-related costs without a corresponding increase in approved policies drove up the CAC per approved policy. In addition, increased time spent training agents on a new sales platform and inefficiencies experienced in our lead routing strategy contributed to higher CAC per approved policy. For the nine months ended September 30, 2023, CAC per approved policy increased modestly compared with the nine months ended September 30, 2022 as the higher CAC per approved policy in the third quarter was mostly offset by lower CAC per approved policy in the first two quarters due to the Company's efforts to control growth in favor of developing more efficient lead procurement and conversion.

### Regulatory Changes.

*Worker classification standards.* In the U.S., we anticipate a forthcoming rule from the Department of Labor (“DOL”) pertaining to worker classification. In January 2021, the DOL under the prior presidential administration issued a rulemaking interpreting the “economic realities” worker classification standard applicable to the Fair Labor Standards Act (“FLSA”). In October 2022, the DOL under the current presidential administration proposed a new rule that would rescind the 2021 rule and replace it with its own interpretation of the “economic realities” standard under the FLSA. The DOL recently finalized its proposed rule and it is currently being reviewed by the Office of Management and Budget before it is released publicly. Other federal and state legislative and regulatory proposals regarding worker classification have also come under consideration. It is difficult to predict what the outcome of worker classification activity may be. Changes to worker classification laws could impact our business as sales representatives (other than those hired by e-TeleQuote) are independent contractors.

*Fiduciary standards for investment recommendations.* In October 2023, the DOL proposed a fiduciary rule package (“DOL Fiduciary Proposal”) that would revise the fiduciary definition and amend certain prohibited transaction exemptions relied on by fiduciaries subject to the Employee Retirement Income Security Act of 1974 for the receipt of compensation. In response to prior rulemakings and guidance, our business already utilizes the DOL’s prohibited transaction exemption established in 2020 for fiduciary recommendations. As a proposed rulemaking package, the DOL Fiduciary Proposal will be subject to public comments and challenges. While its final outcome is uncertain, we anticipate that if the DOL Fiduciary Proposal were finalized as proposed then we would not have to make substantial adjustments to our Investment and Savings Products business operations.

*Restrictions on compensation models in Canada.* During 2022, in response to regulatory changes in Canada, we developed a set of mutual fund products with two third-party mutual fund companies that are sold exclusively by our independent sales representatives (the “Principal Distributor funds”). The revenue we receive is primarily in the form of asset-based distribution fees from the mutual fund companies and asset-based service fees that are charged to investors. In turn, the primary compensation we offer independent sales representatives is the option of an upfront sales commission or higher asset-based commissions over time. Although we received the requisite approval, the organization of provincial and territorial securities commissions throughout Canada (collectively referred to as the “Canadian Securities Administrators” or “CSA”) has indicated that it intends to closely examine the model, including potentially through a public consultation on sales practices, and may require undertakings or consider future amendments that would require modifications to the model, including with respect to its upfront commission features. At this time, we cannot quantify the financial impact, if any, of future changes to our business that may be necessary if our Principal Distributor funds model is required to be modified or discontinued. During the nine months ended September 30, 2023, Canadian mutual funds represented approximately 13% of both our total investment and savings product sales and our average client asset values.

As mandated by insurance regulators in Canada, a cessation of deferred sales charges on segregated fund contracts entered into after May 31, 2023 went into effect as previously announced. 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 this continued use. Our Canadian segregated funds products were primarily sold on a deferred sales charge basis and we paid upfront commissions to the independent sales representatives for the sale of these products. As we anticipated, we experienced a decline in segregated funds product sales beginning in June 2023. Without further clarity from regulators on allowable segregated funds compensation practices, we are unable to evaluate and introduce new compensation practices for the sale of our segregated funds or similar products we could potentially distribute on behalf of third parties. We earn revenue from Canadian segregated funds products based on a percentage of client assets under management. During the nine months ended September 30, 2023, Canadian segregated funds represented approximately 1% of our total investment and savings product sales and approximately 3% of our average client asset values.

### 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 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.

Historically, we have found that while sales volume of term life insurance products between fiscal periods may vary based on a variety of factors, the productivity of sales representatives generally remains within a range (i.e., an average monthly rate of new policies issued per life-licensed independent sales representative between 0.20 and 0.24). 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.

Actuarial assumptions. The actuarial assumptions that underlie our reserves are based upon our best estimates of mortality, persistency, and disability. 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 9 (Future Policy Benefits) for more information on LFPB. The variances are also reflected in the projection of future face amount that is the basis for amortizing 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 deferred policy acquisition costs (“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 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 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 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 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 underlying reinsurance recoverables that are an offset to the LFPB.
- *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 presently intend to continue ceding approximately 90% of our U.S. and Canadian mortality risk on new business.

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

***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 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 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 the segregated funds for which we serve as investment manager. 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. While our investment and savings products all provide similar long-term economic returns to the Company, 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 such sales occur than sales of other investment products that either generate lower upfront revenues or, in the case of managed investments and segregated funds, no upfront revenues;
- sales of a higher proportion of managed investments, Canadian mutual funds, and segregated funds products 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 upfront 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.

***Senior Health Segment.*** The Senior Health segment results are primarily driven by approved policies, LTV per approved policy and tail revenue adjustments, CAC per approved policy, and other revenue.

Approved policies. Approved policies represent an estimate of submitted policies approved by the health insurance carriers for the identified product during the indicated period. Not all approved policies will go in force. In general, the relationship between submitted policies and approved policies has been seasonally consistent. Therefore, factors impacting the number of submitted policies generally impact the number of approved policies. Revenue is primarily generated from approved policies and LTVs are recorded when the enrollment is approved by the applicable health insurance carrier. Medicare Advantage plans make up the substantial portion of the approved policies we distribute. The number of approved policies is influenced by the following:

- the size and growth of the population of senior citizens in the United States;
- the appeal of government-funded Medicare Advantage plans that provide privately administered healthcare coverage with enhanced benefits relative to traditional Medicare;
- our ability to generate and obtain leads for our team of e-TeleQuote licensed health insurance agents;
- our ability to staff and train our team of e-TeleQuote licensed health insurance agents to manage leads and help eligible Medicare participants through the enrollment process; and
- our health insurance carrier relationships that allow us to offer plans that most appropriately meet eligible Medicare participants’ needs.

LTV per approved policy and tail revenue adjustments. When a policy is approved by the health insurance carrier, commission revenue is recognized based on an estimated LTV per approved policy. LTV per approved policy is the cumulative total of commissions estimated to be collected over the expected life of a policy, subject to constraints applied in accordance with our revenue recognition policy. Specifically, LTV per approved policy is equal to the sum of the initial commissions, less an estimate of chargebacks for paid policies that are disenrolled during the first policy year, plus forecasted renewal commissions. This estimate is driven by several factors including, but not limited to, commission rates from carriers, expected policy turnover, emerging chargeback activity and applied constraints. These factors may result in varying values from period to period.

We recognize adjustments to revenue outside of LTV for approved policies from prior periods when our cash collections are, or are expected to be, different from the estimated constrained LTVs, which we refer to as tail revenue adjustments. The recognition of tail revenue adjustments results from a change in the estimate of expected cash collections when actual cash collections or communicated rate increases have indicated a trend that is different from the estimated constrained LTV. Tail revenue adjustments can be positive or negative and we recognize positive adjustments to revenue when we do not believe it is probable that a significant reversal of cumulative revenue will occur.

CAC per approved policy. Results are also driven by the costs of acquisition, which is defined as the total direct costs incurred per approved policy. Our costs of acquisition are primarily comprised of the cost to generate and acquire leads, including fees paid to Primerica Senior Health certified independent sales representatives, and the labor, benefits, bonus compensation, licensing and training costs associated with our team of e-TeleQuote licensed health insurance agents. Other than costs incurred to assist beneficiaries with switching plans within the same carrier, we incur our entire cost of approved policies prior to enrollment and prior to receiving our first commission related payment. Factors that impact our costs of acquisition per approved policy include:

- the market price of externally-generated leads;
- our ability to efficiently procure internally-generated leads; and
- the productivity of our e-TeleQuote licensed health insurance agents in converting procured leads into approved policies.

Other revenue. Other revenue recognized in the Senior Health segment includes marketing development revenues received for providing marketing services to certain health insurance carriers. Marketing development revenue provides additional revenue to deliver approved policies and are based on meeting agreed-upon objectives with certain health insurance carriers. Marketing development revenue serves to offset contract acquisition costs associated with the distribution of approved policies. Agreements for marketing development revenue are generally short-term in nature and can vary from period to period.

***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 NBLIC.

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, Investment and Savings Products, or Senior Health segments), interest expense on notes payable, redundant reserve financing transactions and our revolving credit facility (“Revolving Credit Facility”), as well as realized 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”), redundant reserve financing transactions, our Revolving Credit Facility, and our common stock. See Note 10 (Stockholders’ Equity), Note 13 (Commitments and Contingent Liabilities), and Note 15 (Debt) to our unaudited condensed 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. See Item 7A. Quantitative and Qualitative Disclosures About Market Risk – Canadian Currency Risk included in our 2022 Annual Report and Note 2 (Segment and Geographical Information) to our unaudited condensed 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.

### Critical Accounting Estimates

We prepare our financial statements in accordance with 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 in our 2022 Annual Report. The most significant items on our unaudited condensed 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, renewal commissions receivable, goodwill 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.

### Accounting Policy Changes.

During the nine months ended September 30, 2023, there were changes in accounting methodology for Deferred Policy Acquisition Costs and Future Policy Benefit Reserves and Reinsurance that we have identified as critical accounting estimates. These changes were necessitated by the adoption of LDTI. See Note 1 (Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies), Note 6 (Deferred Policy Acquisition Costs), and Note 9 (Future Policy Benefits) to our condensed consolidated financial statements included elsewhere in this report. For additional information regarding our other critical accounting estimates, see the Critical Accounting Estimates section of MD&A included in our 2022 Annual Report.

### Results of Operations

***Primerica, Inc. and Subsidiaries Results.*** Our results of operations were as follows:

*(Dollars in thousands)*

| Revenues: | Three months ended September 30, 2023 | 2022 | Change $% |  | Nine months ended September 30, 2023 | 2022 | Change $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Direct premiums | $831,681 | $810,079 | $21,602 | 3% | $2,477,850 | $2,417,639 | $60,211 | 2% |
| Ceded premiums | (411,015) | (404,870) | 6,145 | 2% | (1,241,629) | (1,223,804) | 17,825 | 1% |
| Net premiums | 420,666 | 405,209 | 15,457 | 4% | 1,236,221 | 1,193,835 | 42,386 | 4% |
| Commissions and fees | 238,902 | 225,468 | 13,434 | 6% | 703,579 | 717,956 | (14,377) | (2)% |
| Investment income net of investment expenses | 51,036 | 40,629 | 10,407 | 26% | 147,540 | 112,148 | 35,392 | 32% |
| Interest expense on surplus note | (16,306) | (16,283) | 23 | \* | (49,348) | (47,613) | 1,735 | 4% |
| Net investment income | 34,730 | 24,346 | 10,384 | 43% | 98,192 | 64,535 | 33,657 | 52% |
| Realized investment gains (losses) | (3) | 292 | (295) | \* | (650) | 924 | (1,574) | \* |
| Other investment gains (losses) | (1,792) | (2,991) | 1,199 | \* | (6,080) | (4,765) | (1,315) | \* |
| Investment gains (losses) | (1,795) | (2,699) | 904 | \* | (6,730) | (3,841) | (2,889) | \* |
| Other, net | 18,429 | 20,965 | (2,536) | (12)% | 58,091 | 60,709 | (2,618) | (4)% |
| Total revenues | 710,932 | 673,289 | 37,643 | 6% | 2,089,353 | 2,033,194 | 56,159 | 3% |
| Benefits and expenses: |  |  |  |  |  |  |  |  |
| Benefits and claims | 162,062 | 159,396 | 2,666 | 2% | 474,240 | 471,349 | 2,891 | \* |
| Future policy benefits remeasurement (gain) loss | 179 | 1,514 | (1,335) | \* | (1,129) | 668 | (1,797) | \* |
| Amortization of DAC | 69,405 | 66,077 | 3,328 | 5% | 205,438 | 194,761 | 10,677 | 5% |
| Sales commissions | 116,200 | 105,915 | 10,285 | 10% | 340,697 | 359,602 | (18,905) | (5)% |
| Insurance expenses | 57,821 | 57,552 | 269 | \* | 178,039 | 176,521 | 1,518 | \* |
| Insurance commissions | 7,911 | 7,666 | 245 | 3% | 25,192 | 22,982 | 2,210 | 10% |
| Contract acquisition costs | 12,568 | 13,446 | (878) | (7)% | 40,154 | 53,479 | (13,325) | (25)% |
| Interest expense | 6,632 | 6,802 | (170) | (2)% | 20,008 | 20,469 | (461) | (2)% |
| Goodwill impairment loss | - | 60,000 | (60,000) | \* | - | 60,000 | (60,000) | \* |
| Other operating expenses | 79,353 | 73,791 | 5,562 | 8% | 252,075 | 239,952 | 12,123 | 5% |
| Total benefits and expenses | 512,131 | 552,159 | (40,028) | (7)% | 1,534,714 | 1,599,783 | (65,069) | (4)% |
| Income before income taxes | 198,801 | 121,130 | 77,671 | 64% | 554,639 | 433,411 | 121,228 | 28% |
| Income taxes | 46,738 | 41,569 | 5,169 | 12% | 129,973 | 113,102 | 16,871 | 15% |
| Net income | 152,063 | 79,561 | 72,502 | 91% | 424,666 | 320,309 | 104,357 | 33% |
| Net income (loss) attributable to noncontrolling interests | - | - | - | \* | - | (5,038) | 5,038 | \* |
| Net income attributable to Primerica, Inc. | $152,063 | $79,561 | $72,502 | 91% | $424,666 | $325,347 | $99,319 | 31% |

\* Less than 1% or not meaningful.

### Results for the Three Months Ended September 30, 2023

*Total revenues.* Total revenues increased during the three months ended September 30, 2023 compared to the same period in 2022 due to increases in net premiums earned in our Term Life Insurance segment, commissions and fees earned in our Investment and Savings Products segment, and net investment income earned 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 decreased during the three months ended September 30, 2023 compared to the three months ended September 30, 2022 largely due to a non-cash goodwill impairment charge of $60.0 million recorded in our Senior Health segment during the three months ended September 30, 2022. Partially offsetting the decrease in total benefits and expenses were higher sales commissions expenses in our Investment and Savings Products segment as a result of an increase in commissions and fees revenue and higher other operating expenses during the three months ended September 30, 2023. The year-over-year increase in other operating expenses was primarily due to increased employee-related costs and growth-related costs. These movements are discussed in further detail in the Segment Results section below.

*Income taxes.* Our effective income tax rate decreased for the three months ended September 30, 2023 to 23.5% compared with 34.3% for the three months ended September 30, 2022. Excluding the non-cash, non-deductible goodwill impairment charge in 2022, the effective income tax rate was 22.9% in 2022. The year-over-year increase in the effective tax rate excluding the goodwill impairment charge was primarily due to higher state income taxes in 2023.

*Total revenues.* Total revenues increased during the nine months ended September 30, 2023 compared to the same period in 2022 due to increases in net premiums earned in our Term Life Insurance segment, asset-based commissions and fees earned in our Investment and Savings Products segment, and net investment income earned in our Corporate and Other Distributed Products segment. Partially offsetting these increases in total revenues were lower sales-based commissions and fees earned in our Investment and Savings Products segment. These movements are further discussed in detail in the Segment Results sections below.

*Total benefits and expenses.* Total benefits and expenses decreased during the nine months ended September 30, 2023 compared to the same period in 2022 largely due to a non-cash goodwill impairment charge of $60.0 million recorded in our Senior Health segment during the nine months ended September 30, 2022, lower sales-based commissions expenses in our Investment and Savings Products segment, and lower contract acquisition costs in our Senior Health segment. Partially offsetting the decrease in total benefits and expenses were increases in asset-based sales commissions expenses in our Investment and Savings Products segment, and other operating expenses during the nine months ended September 30, 2023. The year-over-year increase in other operating expenses was due to increased technology spending as well as higher employee-related and growth-related costs. These movements are discussed in further detail in the Segment Results section below.

*Income taxes.* Our effective income tax rate decreased for the nine months ended September 30, 2023 to 23.4%, compared with 26.1% for the nine months ended September 30, 2022. Excluding the non-cash, non-deductible goodwill impairment charge in 2022, the effective income tax rate was 22.9% in 2022. The year-over-year increase in the effective tax rate excluding the goodwill impairment charge was primarily due to higher state income taxes in 2023.

For additional information, see the Segment Results discussions below.

### Segment Results

***Term Life Insurance Segment Results.*** Our results for the Term Life Insurance segment were as follows:

*(Dollars in thousands)*

| Revenues: | Three months ended September 30, 2023 | 2022 | Change $% |  | Nine months ended September 30, 2023 | 2022 | Change $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Direct premiums | $826,665 | $804,586 | $22,079 | 3% | $2,462,842 | $2,401,293 | $61,549 | 3% |
| Ceded premiums | (409,801) | (403,416) | 6,385 | 2% | (1,237,548) | (1,219,268) | 18,280 | 1% |
| Net premiums | 416,864 | 401,170 | 15,694 | 4% | 1,225,294 | 1,182,025 | 43,269 | 4% |
| Other, net | 11,908 | 13,419 | (1,511) | (11)% | 36,421 | 37,969 | (1,548) | (4)% |
| Total revenues | 428,772 | 414,589 | 14,183 | 3% | 1,261,715 | 1,219,994 | 41,721 | 3% |
| Benefits and expenses: |  |  |  |  |  |  |  |  |
| Benefits and claims | 158,508 | 156,587 | 1,921 | 1% | 461,303 | 462,915 | (1,612) | \* |
| Future policy benefits remeasurement (gain) loss | 251 | 1,598 | (1,347) | \* | (26) | 555 | (581) | \* |
| Amortization of DAC | 67,720 | 64,262 | 3,458 | 5% | 199,792 | 189,431 | 10,361 | 5% |
| Insurance expenses | 56,698 | 56,471 | 227 | \* | 174,310 | 173,072 | 1,238 | \* |
| Insurance commissions | 4,373 | 3,964 | 409 | 10% | 14,459 | 11,612 | 2,847 | 25% |
| Total benefits and expenses | 287,550 | 282,882 | 4,668 | 2% | 849,838 | 837,585 | 12,253 | 1% |
| Income before income taxes | $141,222 | $131,707 | $9,515 | 7% | $411,877 | $382,409 | $29,468 | 8% |

\* Less than 1% or not meaningful.

### Results for the Three Months Ended September 30, 2023

*Net premiums.* Direct premiums increased during the three months ended September 30, 2023 compared to the three months ended September 30, 2022 largely due to the layering effect of new policy sales that contributed to growth in the in-force book of business. This was partially offset by an increase in ceded premiums, which includes $14.4 million in higher non-level YRT reinsurance ceded premiums as business not subject to the IPO coinsurance transactions ages, reduced by $8.1 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 were generally flat during the three months ended September 30, 2023 compared to the three months ended September 30, 2022. Direct benefits and claims increased with the growth in the business but were offset by an increase in ceded benefit reserves from YRT reinsurance. YRT reinsurance ceded benefit reserves will fluctuate based on the specifics of premiums ceded and claims incurred during each period. Claims during the three month period in 2023 were slightly lower than the three month period in 2022.

*Future policy benefits remeasurement (gain) loss.* Future policy benefits remeasurement loss decreased slightly during the three months ended September 30, 2023 compared to the three months ended September 30, 2022 due to differences in experience variances that occurred in each respective period. The portion of experience variances recognized in net income during each period will increase as we move further away from the Transition Date of LDTI.

*Amortization of DAC.* The amortization of DAC increased during the three months ended September 30, 2023 compared to the three months ended September 30, 2022 primarily due to continued growth in the in-force book of business.

*Insurance expenses.* Insurance expenses increased slightly during the three months ended September 30, 2023 compared to the three months ended September 30, 2022. Higher growth-related costs and employee-related costs in the three month period in 2023 were largely offset by comparatively lower net costs incurred for licensing activities.

*Insurance commissions.* Insurance commissions increased during the three months ended September 30, 2023 compared to the three months ended September 30, 2022 as a result of higher non-deferrable sales force promotional activities.

*Net premiums.* Direct premiums increased during the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 largely due to the layering effect of new policy sales that contributed to growth in the in-force book of business. This was partially offset by an increase in ceded premiums, which includes $47.0 million in higher non-level YRT reinsurance ceded premiums as business not subject to the IPO coinsurance transactions ages, reduced by $28.7 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 decreased slightly during the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. Direct benefits and claims increased with the growth in the business but were more than offset by an increase in ceded benefit reserves due to YRT reinsurance. YRT reinsurance ceded benefit reserves will fluctuate based on the specifics of premiums ceded and claims incurred during each period. Claims were lower during the nine month period in 2023 as the comparable period in 2022 reflected lingering excess claims from the COVID-19 pandemic.

*Future policy benefits remeasurement (gain) loss.* Future policy benefits remeasurement (gain) loss changed slightly during the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 due to differences in experience variances that occurred in each respective period. The portion of experience variances recognized in net income during each period will increase as we move further away from the Transition Date of LDTI.

*Amortization of DAC.* The amortization of DAC increased during the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 due to the same factors as described in the three month comparison.

*Insurance expenses.* Insurance expenses increased slightly during the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. Higher growth-related, employee-related, and technology costs in the nine month period in 2023 were largely offset by comparatively lower expenses versus the prior year period due to costs incurred for the biennial convention held in 2022.

*Insurance commissions.* Insurance commissions increased during the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 due to the same factors as described in the three month comparison.

***Investment and Savings Products Segment Results.*** Investment and Savings Products segment results were as follows:

*(Dollars in thousands)*

| Revenues: Commissions and fees: | Three months ended September 30, 2023 | 2022 | Change $% |  | Nine months ended September 30, 2023 | 2022 | Change $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Sales-based revenues | $72,996 | $67,962 | $5,034 | 7% | $220,343 | $259,905 | $(39,562) | (15)% |
| Asset-based revenues | 119,413 | 107,483 | 11,930 | 11% | 344,652 | 328,696 | 15,956 | 5% |
| Account-based revenues | 23,344 | 22,910 | 434 | 2% | 69,229 | 67,043 | 2,186 | 3% |
| Other, net | 3,145 | 3,342 | (197) | (6)% | 9,385 | 9,508 | (123) | (1)% |
| Total revenues | 218,898 | 201,697 | 17,201 | 9% | 643,609 | 665,152 | (21,543) | (3)% |
| Expenses: |  |  |  |  |  |  |  |  |
| Amortization of DAC | 1,311 | 1,378 | (67) | (5)% | 4,212 | 4,245 | (33) | \* |
| Insurance commissions | 3,321 | 3,419 | (98) | (3)% | 9,902 | 10,514 | (612) | (6)% |
| Sales commissions: |  |  |  |  |  |  |  |  |
| Sales-based | 52,343 | 48,775 | 3,568 | 7% | 158,425 | 186,784 | (28,359) | (15)% |
| Asset-based | 58,793 | 51,549 | 7,244 | 14% | 168,154 | 155,791 | 12,363 | 8% |
| Other operating expenses | 38,757 | 37,355 | 1,402 | 4% | 122,852 | 118,540 | 4,312 | 4% |
| Total expenses | 154,525 | 142,476 | 12,049 | 8% | 463,545 | 475,874 | (12,329) | (3)% |
| Income before income taxes | $64,373 | $59,221 | $5,152 | 9% | $180,064 | $189,278 | $(9,214) | (5)% |

\* Less than 1% or not meaningful.

### Results for the Three Months Ended September 30, 2023

*Commissions and fees.* Commissions and fees increased during the three months ended September 30, 2023 compared to the three months ended September 30, 2022 driven by higher asset-based and sales-based revenues. Higher asset-based revenues were driven by an increase in average client assets in 2023 versus the prior year period. The increase in sales-based revenue was largely the result of higher product sales for variable annuities and the favorable year-over-year comparison for U.S. mutual fund product sales.

*Sales commissions.* The increase in sales-based commissions for the three months ended September 30, 2023 compared to the three months ended September 30, 2022 was generally in line with the increase in sales-based revenue. Asset-based commissions were up for the three months ended September 30, 2023 and were consistent with the movement in asset-based revenues when excluding Canadian segregated funds revenue. Asset-based expenses for our Canadian segregated funds are reflected within insurance commissions and amortization of DAC.

*Other operating expenses.* Other operating expenses for the three months ended September 30, 2023 were higher compared to the three months ended September 30, 2022 primarily due to increased employee-related costs.

*Commissions and fees.* Commissions and fees decreased during the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. Sales-based revenues declined during the nine months ended September 30, 2023 likely due to the adverse impact on revenue-generating product sales from the high cost of living and the availability of high yield money market and savings account alternatives in the first half of 2023. Another contributing factor to the decrease in sales-based revenues was the discontinuation of most upfront sales-based revenue on the sale of Canadian mutual funds, which are now sold under the principal distributor model. The principal distributor funds we now distribute in Canada primarily shift the revenue we earn to asset-based that is recognized over time. Partially offsetting the decrease were higher asset-based revenues during the nine months ended September 30, 2023 versus the nine months ended September 30, 2022. The year-over-year increase in asset-based revenues was higher than the year-over-year increase in average client asset values due to a positive mix shift to asset-based products that earn higher fees, including managed accounts and Canadian mutual funds under the new principal distributor model.

*Sales commissions.* The decrease in sales-based commissions for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 was in line with the decrease in sales-based revenue. Asset-based commissions were up for the three months ended September 30, 2023 and were consistent with the movement in asset-based revenues when excluding Canadian segregated funds revenue. Asset-based expenses for our Canadian segregated funds are reflected within insurance commissions and amortization of DAC.

*Other operating expenses.* Other operating expenses for the nine months ended September 30, 2023 were higher compared to the nine months ended September 30, 2022 due to increased employee-related and technology costs.

***Senior Health Segment Results.*** Senior Health segment results were as follows:

*(Dollars in thousands)*

| Revenues: | Three months ended September 30, 2023 | 2022 | Change $% |  | Nine months ended September 30, 2023 | 2022 | Change $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Commissions and fees (1) | $11,388 | $14,601 | $(3,213) | (22)% | $38,514 | $25,222 | $13,292 | 53% |
| Other, net | 2,048 | 2,583 | (535) | (21)% | 8,522 | 9,606 | (1,084) | (11)% |
| Total revenues | 13,436 | 17,184 | (3,748) | (22)% | 47,036 | 34,828 | 12,208 | 35% |
| Benefits and expenses: |  |  |  |  |  |  |  |  |
| Contract acquisition costs | 12,568 | 13,446 | (878) | (7)% | 40,154 | 53,479 | (13,325) | (25)% |
| Goodwill impairment loss | - | 60,000 | (60,000) | \* | - | 60,000 | (60,000) | \* |
| Other operating expenses | 8,451 | 7,461 | 990 | 13% | 24,259 | 24,308 | (49) | \* |
| Total benefits and expenses | 21,019 | 80,907 | (59,888) | (74)% | 64,413 | 137,787 | (73,374) | (53)% |
| Loss before income taxes | $(7,583) | $(63,723) | $56,140 | 88% | $(17,377) | $(102,959) | $85,582 | 83% |

(1) Includes a positive tail revenue adjustment of $2.3 million for the three and nine months ended September 30, 2023 and a positive tail revenue adjustment of $1.7 million and a negative tail revenue adjustment ($22.7) million for the three and nine months ended September 30, 2022, respectively.

### Results for the Three Months Ended September 30, 2023

*Commissions and fees.* Excluding the impact of tail revenue adjustments, commissions and fees decreased during the three months ended September 30, 2023 compared to the three months ended September 30, 2022 primarily due to lower approved policy sales volumes in the current year given the reduction in tenured e-TeleQuote licensed health insurance agents.

*Other, net.* Other, net decreased during the three months ended September 30, 2023 compared to the three months ended September 30, 2022 primarily due to a decrease in revenue earned for providing agreed-upon marketing services to health insurance carriers during the three month period in 2023.

*Contract acquisition costs.* CAC decreased during the three months ended September 30, 2023 compared to the three months ended September 30, 2022 as a result of lower approved policy sales volumes partially offset by higher per unit costs.

*Goodwill impairment loss.* There was no goodwill impairment charge recognized during the three months ended September 30, 2023 compared to a $60.0 million non-cash goodwill impairment charge recognized during the three months ended September 30, 2022. The charge represented the excess of the Senior Health reporting unit’s carrying value over its estimated fair value as of July 1, 2022. Refer to Note 18 (Goodwill) to our condensed consolidated financial statements included elsewhere in this report for more information.

*Other operating expenses.* Other operating expenses during the three months ended September 30, 2023 increased compared to the three months ended September 30, 2022 primarily due to higher employee-related costs.

*Commissions and fees.* Excluding the impact of tail revenue adjustments, commissions and fees decreased during the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 primarily due to lower approved policy sales volumes as noted above during the third quarter of 2023 as well as the Company’s efforts to control growth in favor of developing more efficient lead procurement and conversion. There was a positive tail revenue adjustment of $2.3 million recorded during the nine months ended September 30, 2023 due to higher commission rates and stable policy churn compared to a negative tail revenue adjustment of $22.7 million recorded during the nine months ended September 30, 2022 as a result of higher than expected policy churn for policies approved in prior periods.

*Other, net.* Other, net decreased during the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 primarily due to a decrease in revenue earned for providing agreed-upon marketing services to health insurance carriers during the nine month period in 2023.

*Contract acquisition costs.* CAC decreased during the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 largely due to lower approved policy volumes.

*Goodwill impairment loss.* Goodwill impairment loss decreased during the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 due to the same factors as described in the three month comparison.

*Other operating expenses.* Other operating expenses during the nine months ended September 30, 2023 did not change significantly compared to the nine months ended September 30, 2022.

***Corporate and Other Distributed Products Segment Results.*** Corporate and Other Distributed Products segment results were as follows:

*(Dollars in thousands)*

| Revenues: | Three months ended September 30, 2023 | 2022 | Change $% |  | Nine months ended September 30, 2023 | 2022 | Change $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Direct premiums | $5,016 | $5,493 | $(477) | (9)% | $15,008 | $16,346 | $(1,338) | (8)% |
| Ceded premiums | (1,214) | (1,454) | (240) | (17)% | (4,081) | (4,536) | (455) | (10)% |
| Net premiums | 3,802 | 4,039 | (237) | (6)% | 10,927 | 11,810 | (883) | (7)% |
| Commissions and fees | 11,761 | 12,512 | (751) | (6)% | 30,841 | 37,090 | (6,249) | (17)% |
| Investment income net of investment expenses | 51,036 | 40,629 | 10,407 | 26% | 147,540 | 112,148 | 35,392 | 32% |
| Interest expense on surplus note | (16,306) | (16,283) | 23 | \* | (49,348) | (47,613) | 1,735 | 4% |
| Net investment income | 34,730 | 24,346 | 10,384 | 43% | 98,192 | 64,535 | 33,657 | 52% |
| Realized investment gains (losses) | (3) | 292 | (295) | \* | (650) | 924 | (1,574) | \* |
| Other investment gains (losses) | (1,792) | (2,991) | 1,199 | \* | (6,080) | (4,765) | (1,315) | \* |
| Investment gains (losses) | (1,795) | (2,699) | 904 | \* | (6,730) | (3,841) | (2,889) | \* |
| Other, net | 1,328 | 1,621 | (293) | (18)% | 3,763 | 3,626 | 137 | 4% |
| Total revenues | 49,826 | 39,819 | 10,007 | 25% | 136,993 | 113,220 | 23,773 | 21% |
| Benefits and expenses: |  |  |  |  |  |  |  |  |
| Benefits and claims | 3,554 | 2,809 | 745 | 27% | 12,937 | 8,434 | 4,503 | 53% |
| Future policy benefits remeasurement (gain) loss | (72) | (84) | 12 | \* | (1,103) | 113 | (1,216) | \* |
| Amortization of DAC | 374 | 437 | (63) | (14)% | 1,434 | 1,085 | 349 | 32% |
| Insurance expenses | 1,123 | 1,081 | 42 | 4% | 3,729 | 3,449 | 280 | 8% |
| Insurance commissions | 217 | 283 | (66) | (23)% | 831 | 856 | (25) | (3)% |
| Sales commissions | 5,064 | 5,591 | (527) | (9)% | 14,118 | 17,027 | (2,909) | (17)% |
| Interest expense | 6,632 | 6,802 | (170) | (2)% | 20,008 | 20,469 | (461) | (2)% |
| Other operating expenses | 32,145 | 28,975 | 3,170 | 11% | 104,964 | 97,104 | 7,860 | 8% |
| Total benefits and expenses | 49,037 | 45,894 | 3,143 | 7% | 156,918 | 148,537 | 8,381 | 6% |
| Income (loss) before income taxes | $789 | $(6,075) | $(6,864) | (113)% | $(19,925) | $(35,317) | $(15,392) | (44)% |

\* Less than 1% or not meaningful.

### Results for the Three Months Ended September 30, 2023

*Total revenues.* Total revenues increased during the three months ended September 30, 2023 compared to the three months ended September 30, 2022 primarily due to higher net investment income. Net investment income increased $6.0 million from higher yields in the invested asset portfolio, a $1.5 million higher total return on the deposit asset backing our 10% coinsurance agreement and $2.6 million from a larger invested asset portfolio compared to the same period in the prior year. Investment income net of investment expenses includes interest earned on our held-to-maturity asset, which is offset by interest expense on the surplus note (“Surplus Note”), thereby eliminating any impact on net investment income. Amounts recognized for each line item will remain offsetting and will fluctuate from period to period along with the principal amounts of the held-to-maturity asset and the Surplus Note based on the balance of reserves being contractually supported under a redundant reserve financing transaction used by Vidalia Re, Inc. (“Vidalia Re”). For more information on the Surplus Note, see Note 3 (Investments) and Note 15 (Debt) to our unaudited condensed consolidated financial statements included elsewhere in this report.

Investment gains (losses) decreased during the three months ended September 30, 2023 compared to the three months ended September 30, 2022 primarily due to a lower mark-to-market loss adjustment on equity securities in the 2023 period.

*Total benefits and expenses.* Total benefits and expenses increased during the three months ended September 30, 2023 compared to the three months ended September 30, 2022 due to higher employee-related and technology costs recognized in other operating expenses.

*Total revenues.* Total revenues increased during the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 primarily due to higher net investment income. Net investment income increased $18.4 million from higher yields in the invested asset portfolio, a $7.5 million higher total return on the deposit asset backing our 10% coinsurance agreement and $6.6 million from a larger invested asset portfolio compared to the same period in the prior year. Investment income net of investment expenses includes interest earned on our held-to-maturity asset, which was offset by interest expense on the Surplus Note, thereby eliminating any impact on net investment income. Amounts recognized for each line item will remain offsetting and will fluctuate from period to period along with the principal amounts of the held-to-maturity asset and the Surplus Note based on the balance of reserves being contractually supported under a redundant reserve financing transaction used by Vidalia Re. For more information on the Surplus Note, see Note 3 (Investments) and Note 15 (Debt) to our unaudited condensed consolidated financial statements included elsewhere in this report.

Investment gains (losses) increased during the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 primarily due to a $2.2 million credit loss recognized for debt securities associated with a specific issuer that we had designated our intent to sell, partially offset by a $0.4 million gain from the subsequent sale of these securities. In addition, we recognized a $3.9 million negative mark-to-market adjustment on equity securities held within our investment portfolio during the nine months ended September 30, 2023 compared to a $4.7 million negative mark-to-market adjustment during the nine months ended September 30, 2022.

Commissions and fees earned from our mortgage distribution business were lower during the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 primarily attributable to our mortgage distribution business as higher mortgage interest rates reduced demand for mortgage products.

*Total benefits and expenses.* Total benefits and expenses increased during the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 due to the recognition of a credit loss for the remaining ceded reserves on a closed block of non-term life insurance business from an insolvent reinsurer that was ordered into liquidation. Also contributing to the increase in benefits and expenses were higher employee-related costs, technology, and legal expenses recognized in other operating expenses. The decrease in sales commissions for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 was in line with the decrease in commissions and fees revenue.

### 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 September 30, 2023, 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.

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, a special purpose financial captive insurance company and wholly owned subsidiary of Primerica Life. For more information on the LLC Note, see Note 3 (Investments) to our unaudited condensed 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 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:

| Average rating of our fixed-maturity portfolio Average duration of our fixed-maturity portfolio | September 30, 2023 A 4.6 years | December 31, 2022 A 4.7 years |
| --- | ---: | ---: |
| Average book yield of our fixed-maturity portfolio | 3.79% | 3.44% |

The distribution of fixed-maturity securities in our investment portfolio (excluding our held-to-maturity security and short-term investments) by rating, including those classified as trading securities, were as follows:

*(Dollars in thousands)*

|  | September 30, 2023 Amortized cost (1)% |  | December 31, 2022 Amortized cost (1)% |  |
| --- | ---: | ---: | ---: | ---: |
| AAA | $561,343 | 19% | $606,982 | 22% |
| AA | 421,545 | 14% | 321,450 | 11% |
| A | 730,596 | 25% | 688,936 | 25% |
| BBB | 1,172,065 | 40% | 1,120,096 | 40% |
| Below investment grade | 57,000 | 2% | 67,450 | 2% |
| Not rated | 7,430 | \* | 199 | \* |
| Total | $2,949,979 | 100% | $2,805,113 | 100% |

(1) Includes trading securities at fair 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:

*(Dollars in thousands)*

| Issuer | September 30, 2023 Fair value | Amortized cost (1) | Unrealized gain (loss) | Credit rating |
| --- | ---: | ---: | ---: | --- |
| Government of Canada | $18,301 | $19,935 | $(1,634) | AAA |
| Wells Fargo & Co | 14,641 | 14,772 | (131) | BBB+ |
| Province of Quebec Canada | 14,026 | 15,258 | (1,232) | AA- |
| Province of Alberta Canada | 13,863 | 15,833 | (1,970) | A+ |
| Province of Ontario Canada | 13,299 | 14,457 | (1,158) | A+ |
| Bank of America Corp | 12,783 | 13,243 | (460) | A- |
| Ontario Teachers' Pension Plan | 12,177 | 14,342 | (2,165) | AA+ |
| ONEOK Inc. | 11,166 | 12,399 | (1,233) | BBB |
| Manulife Financial Corp | 10,426 | 11,612 | (1,186) | A |
| Berkshire Hathaway Inc. | 10,278 | 10,690 | (412) | AA |
| Total – ten largest holdings | $130,960 | $142,541 | $(11,581) |  |
| Total – fixed-maturity securities | $2,607,160 | $2,949,979 |  |  |
| Percent of total fixed-maturity securities | 5% | 5% |  |  |

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

For additional information on our invested asset portfolio, see Note 3 (Investments) to our unaudited condensed 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 notes payable, general operating expenses, and income taxes, as well as repurchases of shares of our common stock outstanding. As of September 30, 2023, the Parent Company had cash and invested assets of $336.9 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, Medicare-related insurance plans 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 sales force, contract acquisition costs, 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 upfront 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 in fixed-maturity and equity 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.

e-TeleQuote is a senior health insurance distributor of Medicare-related insurance plans. e-TeleQuote collects cash receipts over a number of years after selling a plan, while the cash outflow for commission expense and other acquisition costs to sell the plans are generally recognized at the time of enrollment. Therefore, in periods of growth, net cash flows at e-TeleQuote are expected to be negative, which may require the Parent Company to provide working capital to e-TeleQuote. During the nine months ended September 30, 2023, the Parent Company did not provide funding to e-TeleQuote as e-TeleQuote generated sufficient cash to fund its operations.

Historically, cash flows generated by our businesses, primarily from our existing block of term life 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:

*(In thousands)*

|  | Nine months ended September 30, 2023 | 2022 | Change $ |
| --- | ---: | ---: | ---: |
| Net cash provided by (used in) operating activities | $451,459 | $551,278 | $(99,819) |
| Net cash provided by (used in) investing activities | (87,805) | (96,791) | 8,986 |
| Net cash provided by (used in) financing activities | (383,799) | (405,296) | 21,497 |
| Effect of foreign exchange rate changes on cash | (333) | (3,667) | 3,334 |
| Change in cash and cash equivalents | $(20,478) | $45,524 | $(66,002) |

Operating Activities. The largest factor contributing to the decrease in cash provided by operating activities during the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 was the timing of cash payments received from reinsurers in the prior year period. At the beginning of 2022, there was a large balance of ceded claims due from reinsurers from claims paid during the height of the COVID-19 pandemic, which were collected during the nine months ended September 30, 2022. Also contributing to the decrease were timing differences of purchases and maturities of trading securities and higher tax remittances due to the timing of temporary differences in taxable income.

Investing Activities. Cash used in investing activities decreased during the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 primarily due to fluctuations in the timing of maturities and reinvestments of debt securities held in our available-for-sale investment portfolio. In both periods, cash provided by operating activities was used to fund investment purchases that increased the size of our invested asset portfolio.

Financing Activities. Cash flows used in financing activities decreased during the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. The timing of share repurchases in 2023 was the largest factor contributing to the year-over-year decline in cash used in financing activities. In addition, the Company paid amounts due on a note issued to the sellers of e-TeleQuote during 2022, which contributed to the year-over-year decrease in cash used in financing activities.

***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 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 September 30, 2023, 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 September 30, 2023, Primerica Life Canada was in compliance with Canada's minimum capital requirements as defined by OSFI.

***Redundant Reserve Financings.*** The Model Regulation entitled 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 Peach Re, Inc. (“Peach Re”) and Vidalia Re as special purpose financial captive insurance companies and wholly owned subsidiaries of Primerica Life. Primerica Life has ceded certain term life policies issued prior to 2011 to Peach Re as part of a Regulation XXX redundant reserve financing transaction and has ceded certain term life 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”). These redundant reserve financing transactions allow us to more efficiently manage and deploy our capital.

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 date. See Note 4 (Investments), Note 10 (Debt) and Note 16 (Commitments and Contingent Liabilities) to our consolidated financial statements within our 2022 Annual Report for more information on these redundant reserve financing transactions.

***Notes Payable.*** The Company has $600.0 million of publicly-traded Senior Notes outstanding issued at a price of 99.550% 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 September 30, 2023. No events of default occurred during the three and nine months ended September 30, 2023.

***Rating Agencies.*** There have been no changes to Primerica, Inc.’s Senior Notes ratings or Primerica Life’s financial strength ratings since December 31, 2022.

***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 15 (Debt) to our unaudited condensed consolidated financial statements included elsewhere in this report.

***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 September 30, 2023.

***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 contains language that allows for the Company and the lenders to agree on a comparable or successor reference rate in the event SOFR is no longer available. 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 that remains undrawn. During the three and nine months ended September 30, 2023, 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 during the three and nine months ended September 30, 2023.

***Contractual Obligations Update.*** There have been no material changes in contractual obligations from those disclosed in the 2022 Annual Report.

### 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. These forward-looking statements involve external risks and uncertainties, including, but not limited to, those described under the section entitled “Risk Factors” included herein.

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 include, among others:

### 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.
- Certain laws and regulations could apply to our independent contractor distribution model, which could require us to modify our distribution structure.
- There may be adverse consequences if the classification of our independent contractor sales representatives is changed.
- 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 if our actual experience differs from our expectations regarding mortality or persistency.
- 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 Investments 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 our funds, annuities or managers is significantly altered or terminated or there is a shift in

the business mix, our business could be materially adversely affected.

- Violations of, or non-compliance with, laws and regulations of the securities business could expose us to material liabilities.
- If heightened standards of conduct or more stringent licensing requirements (such as those adopted by the Securities and Exchange Commission) and the Department of Labor, state legislatures or regulators or Canadian securities regulators, are imposed on us or the independent sales representatives, or selling compensation is reduced as a result of new legislation or regulations, it could have a material adverse effect on our business.
- 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 affect on our business.

### Risks Related to e-TeleQuote’s Senior Health Insurance Distribution Business

- Due to our limited history with e-TeleQuote Insurance, Inc. (“e-TeleQuote”), we may not be able to execute an effective business strategy, which could adversely affect our business.
- e-TeleQuote is highly regulated and subject to compliance requirements of the U.S. government’s Centers for Medicare and Medicaid Services and those of its carrier partners. Non-compliance with, or violations of, such requirements may harm its business, which could have a material adverse effect on our business.
- e-TeleQuote generates leads that are internally sourced from marketing initiatives and receives referrals from Primerica

independent sales representatives. It also receives leads externally acquired from third-party vendors. e-TeleQuote’s business may be harmed if it cannot continue to acquire or generate leads on commercially viable terms, if it is unable to convert leads to sales at acceptable rates, if Primerica independent sales representatives do not introduce consumers to e-TeleQuote, or if policyholder retention is lower than assumed, any of which could adversely impact our business.

- If e-TeleQuote’s ability to enroll individuals during the Medicare annual election period is impeded, its business may be harmed,

which could adversely impact our business.

- e-TeleQuote’s business is dependent on key carrier partners. The loss of a key carrier partner, or the modification of commission

rates or underwriting practices with a key carrier partner, could harm its business which could adversely impact our business.

### Risks Related to Our Mortgage Distribution Business

- Licensing requirements will impact the size of the mortgage loan sales force, which could adversely affect our mortgage

distribution business.

- Our mortgage distribution business is highly regulated and subject to various 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 distribute 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.

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

- The effects of economic down cycles, issues affecting the national and/or global economy or global geopolitical event(s) 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.
- The current legislative and regulatory climate with regard to privacy and cybersecurity could adversely affect our business.
- Any failure to protect the confidentiality of client information could adversely affect our reputation and have a material adverse

effect on our business.

- e-TeleQuote’s security measures are designed to protect against breaches of security and other interference with its systems and

networks operate independently from Primerica’s systems. If e-TeleQuote is subject to cyber-attacks or security breaches or is

otherwise unable to safeguard the security and privacy of confidential data e-TeleQuote’s business may be harmed, 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.

- 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

- We are subject to various federal, state and provincial laws and regulations in the U.S. and Canada, changes in which may require

us to alter our business practices and could materially adversely affect our business.

- The current legislative and regulatory climate with regard to financial services could adversely affect our business.
- Medicare Advantage is a product legislated and regulated by the U.S. government. If the enabling legislation and regulation or

implementing guidance issued by CMS changes, e-TeleQuote’s business may be harmed, which could have a material adverse

effect on 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.

- 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 results and impair our ability to implement our business strategy.

- 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.

- We may be materially adversely affected by currency fluctuations.
- Any acquisition of or investment in businesses that we may undertake that does not perform as we expect or that is difficult for us

to integrate could materially adversely impact our business.

- The market price of our common stock may fluctuate.

Developments in any of these areas 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.

The foregoing list of risks and uncertainties may not contain 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.

## Market risk

As filed, 283 characters.

There have been no material changes in our exposures to market risk since December 31, 2022. For details on the Company’s interest rate, foreign currency exchange, and credit risks, see “Item 7A. Quantitative and Qualitative Information About Market Risks” in our 2022 Annual Report.

## Controls and procedures

As filed, 1,063 characters.

### 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 quarter ended September 30, 2023 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Filed Nov 8, 2023.
Source: SEC EDGAR, the filing index for accession 0000950170-23-060945. Last ingested by Listed: Oct 24, 2026, 15:12 ET. No prices; not investment advice.