10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2012

OR

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

For the transition period from to

Commission File Number: 001-34680

Primerica, Inc.

(Exact name of registrant as specified in its charter)

Delaware	27-1204330
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
3120 Breckinridge Boulevard Duluth, Georgia	30099
(Address of principal executive offices)	(ZIP Code)

(770) 381-1000

(Registrant’s telephone number, including area code)

Not applicable.

(Former name, former address and former fiscal year, if changed since last report)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    ý  Yes    ¨  No

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

Large accelerated filer	ý	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	As of July 31, 2012
Common Stock, $.01 Par Value	60,028,946 shares

TABLE OF CONTENTS

	Page
PART I – FINANCIAL INFORMATION	1
Item 1. Financial Statements (unaudited).	1
Condensed Consolidated Balance Sheets as of June 30, 2012 and December 31, 2011	1
Condensed Consolidated Statements of Income for the three and six months ended June 30, 2012 and 2011	2
Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2012 and 2011	3
Condensed Consolidated Statements of Stockholders’ Equity for the six months ended June 30, 2012 and 2011	4
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2012 and 2011	5
Notes to Condensed Consolidated Financial Statements	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	25
Item 3. Quantitative and Qualitative Disclosures About Market Risk.	43
Item 4. Controls and Procedures.	44
PART II – OTHER INFORMATION	45
Item 1. Legal Proceedings.	45
Item 1A. Risk Factors.	45
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	45
Item 3. Defaults Upon Senior Securities.	45
Item 4. Mine Safety Disclosures.	45
Item 5. Other Information.	45
Item 6. Exhibits.	45
Signatures	47

i

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

PRIMERICA, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

	June 30, 2012			December 31, 2011
	(unaudited)
	(In thousands, except per-share amounts)
Assets
Investments:
Fixed-maturity securities available for sale, at fair value (amortized cost: $1,663,776 in 2012 and $1,811,359 in 2011)	$	1,823,729		$	1,959,156
Equity securities available for sale, at fair value (cost: $25,033 in 2012 and $21,329 in 2011)	31,811			26,712
Trading securities, at fair value (cost: $29,262 in 2012 and $9,793 in 2011)	29,038			9,640
Policy loans	24,187			25,982
Other invested assets	14			14
Total investments	1,908,779			2,021,504
Cash and cash equivalents	108,062			136,078
Accrued investment income	20,220			21,579
Due from reinsurers	3,903,028			3,855,318
Deferred policy acquisition costs, net	990,558			904,485
Premiums and other receivables	167,746			163,845
Intangible assets, net (accumulated amortization: $59,920 in 2012 and $58,218 in 2011)	70,226			71,928
Other assets	281,818			268,485
Separate account assets	2,500,640			2,408,598
Total assets	$	9,951,077		$	9,851,820
Liabilities and Stockholders’ Equity
Liabilities:
Future policy benefits	$	4,723,359		$	4,614,860
Unearned premiums	9,476			7,022
Policy claims and other benefits payable	236,717			241,754
Other policyholders’ funds	347,763			340,766
Note payable	300,000			300,000
Income taxes	82,755			81,316
Other liabilities	329,538			381,496
Payable under securities lending	143,963			149,358
Separate account liabilities	2,500,640			2,408,598
Total liabilities	8,674,211			8,525,170
Stockholders’ equity:
Common stock of ($.01 par value. Authorized 500,000 in 2012 and 2011 and issued 59,868 shares in 2012 and 64,883 shares in 2011)	599			649
Paid-in capital	693,717			835,232
Retained earnings	426,936			344,104
Accumulated other comprehensive income, net of income tax:
Unrealized foreign currency translation gains	50,458			51,248
Net unrealized investment gains (losses):
Net unrealized investment gains not other-than-temporarily impaired	107,187			97,082
Net unrealized investment losses other-than-temporarily impaired	(2,031		)	(1,665		)
Total stockholders’ equity	1,276,866			1,326,650
Total liabilities and stockholders’ equity	$	9,951,077		$	9,851,820

See accompanying notes to condensed consolidated financial statements.

1

PRIMERICA, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income - Unaudited

	Three months ended June 30,						Six months ended June 30,
	2012			2011			2012			2011
	(In thousands, except per-share amounts)
Revenues:
Direct premiums	$	570,073		$	560,881		$	1,131,110		$	1,112,950
Ceded premiums	(415,815		)	(435,564		)	(833,978		)	(857,802		)
Net premiums	154,258			125,317			297,132			255,148
Commissions and fees	106,761			108,698			210,666			214,814
Net investment income	23,605			27,229			49,702			55,855
Realized investment gains, including other-than-temporary impairment losses	4,321			2,035			6,452			2,362
Other, net	11,580			11,816			23,174			23,268
Total revenues	300,525			275,095			587,126			551,447
Benefits and expenses:
Benefits and claims	68,925			57,272			136,858			114,907
Amortization of deferred policy acquisition costs, net	28,205			23,975			54,736			47,204
Sales commissions	51,475			50,273			101,192			100,711
Insurance expenses	24,589			26,988			47,033			42,786
Insurance commissions	6,458			9,534			14,954			18,532
Interest expense	8,506			6,998			15,416			13,995
Other operating expenses	40,446			41,590			81,551			81,591
Total benefits and expenses	228,604			216,630			451,740			419,726
Income before income taxes	71,921			58,465			135,386			131,721
Income taxes	25,741			20,845			47,450			46,830
Net income	$	46,180		$	37,620		$	87,936		$	84,891
Earnings per share:
Basic	$	0.73		$	0.50		$	1.35		$	1.12
Diluted	$	0.72		$	0.49		$	1.33		$	1.11
Weighted-average shares used in computing earnings per share:
Basic	61,531			73,457			63,332			73,067
Diluted	62,687			74,201			64,481			74,028
Supplemental disclosures:
Total impairment losses	$	(203	)	$	(66	)	$	(904	)	$	(333	)
Impairment losses recognized in other comprehensive income before income taxes	76			—			563			—
Net impairment losses recognized in earnings	(127		)	(66		)	(341		)	(333		)
Other net realized investment gains	4,448			2,101			6,793			2,695
Realized investment gains, including other-than-temporary impairment losses	$	4,321		$	2,035		$	6,452		$	2,362

See accompanying notes to condensed consolidated financial statements.

2

PRIMERICA, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income - Unaudited

	Three months ended June 30,						Six months ended June 30,
	2012			2011			2012			2011
	(In thousands)
Net income	$	46,180		$	37,620		$	87,936		$	84,891
Other comprehensive income (loss) before income taxes:
Unrealized investment gains (losses):
Change in unrealized holding gains (losses) on investment securities	3,931			16,081			21,445			12,443
Reclassification adjustment for realized investment (gains) losses included in net income	(4,640		)	(2,073		)	(6,461		)	(2,293		)
Foreign currency translation adjustments:
Change in unrealized foreign currency translation gains (losses)	(4,177		)	1,041			(869		)	3,647
Total other comprehensive income (loss) before income taxes	(4,886		)	15,049			14,115			13,797
Income tax expense (benefit) related to items of other comprehensive income (loss)	(298		)	4,903			5,166			2,825
Other comprehensive income (loss), net of income taxes	(4,588		)	10,146			8,949			10,972
Total comprehensive income	$	41,592		$	47,766		$	96,885		$	95,863

See accompanying notes to condensed consolidated financial statements.

3

PRIMERICA, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders’ Equity - Unaudited

	Six months ended June 30,
	2012			2011
	(In thousands, except per-share amounts)
Common stock:
Balance, beginning of period	$	649		$	728
Repurchases of common stock	(62		)	(2		)
Net issuance of common stock	12			10
Balance, end of period	599			736
Paid-in capital:
Balance, beginning of period	835,232			1,010,635
Share-based compensation	17,353			16,246
Net issuance of common stock	(12		)	(10		)
Repurchases of common stock	(160,817		)	(4,108		)
Net capital contributed by (to) Citi	1,961			(1,424		)
Balance, end of period	693,717			1,021,339
Retained earnings:
Balance, beginning of period	344,104			194,225
Net income	87,936			84,891
Dividends ($0.08 per share in 2012 and $0.04 per share in 2011)	(5,104		)	(3,027		)
Balance, end of period	426,936			276,089
Accumulated other comprehensive income:
Balance, beginning of period	146,665			150,940
Change in foreign currency translation adjustment, net of income tax expense (benefit) of $(79) in 2012 and $0 in 2011	(790		)	3,647
Change in net unrealized investment gains (losses) during the period, net of income taxes:
Change in net unrealized investment gains (losses) not-other-than temporarily impaired, net of income tax expense (benefit) of $5,441 in 2012 and $2,825 in 2011	10,105			7,325
Change in net unrealized investment gains (losses) other-than-temporarily impaired, net of income tax expense (benefit) of $(196) in 2012 and $0 in 2011	(366		)	—
Balance, end of period	155,614			161,912
Total stockholders’ equity	$	1,276,866		$	1,460,076

See accompanying notes to condensed consolidated financial statements.

4

PRIMERICA, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows - Unaudited

	Six months ended June 30,
	2012			2011
	(In thousands)
Cash flows from operating activities:
Net income	$	87,936		$	84,891
Adjustments to reconcile net income to cash provided by (used in) operating activities:
Change in future policy benefits and other policy liabilities	113,712			35,579
Deferral of policy acquisition costs	(141,151		)	(134,704		)
Amortization of deferred policy acquisition costs, net	54,736			47,204
Change in income taxes	431			(13,074		)
Realized investment gains, including other-than-temporary impairments	(6,452		)	(2,362		)
Accretion and amortization of investments	(304		)	(1,910		)
Depreciation and amortization	4,911			5,265
Change in due from reinsurers	(47,710		)	18,515
Change in premiums and other receivables	(3,826		)	(11,575		)
Trading securities sold (acquired), net	14,639			(13,505		)
Share-based compensation	13,196			12,061
Other, net	(77,309		)	(32,585		)
Net cash provided by (used in) operating activities	12,809			(6,200		)
Cash flows from investing activities:
Available-for-sale investments sold, matured or called:
Fixed-maturity securities - sold	213,317			36,635
Fixed-maturity securities - matured or called	124,320			230,947
Equity securities	1,246			3,026
Available-for-sale investments acquired:
Fixed-maturity securities	(209,197		)	(267,793		)
Equity securities	(3,086		)	(73		)
Other, net	148			(82		)
Cash collateral received (returned) on loaned securities, net	(5,395		)	(18,384		)
Sales (purchases) of short-term investments using securities lending collateral, net	5,395			18,384
Net cash provided by (used in) investing activities	126,748			2,660
Cash flows from financing activities:
Dividends	(5,104		)	(3,027		)
Common stock repurchased	(160,879		)	(4,110		)
Net cash provided by (used in) financing activities	(165,983		)	(7,137		)
Effect of foreign exchange rate changes on cash	(1,590		)	(1,310		)
Change in cash and cash equivalents	(28,016		)	(11,987		)
Cash and cash equivalents, beginning of period	136,078			126,038
Cash and cash equivalents, end of period	$	108,062		$	114,051

See accompanying notes to condensed consolidated financial statements.

5

PRIMERICA, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements - Unaudited

(1) Summary of Significant Accounting Policies

Description of Business. Primerica, Inc. (the "Parent Company") together with its subsidiaries (collectively, "we" or the "Company") is a leading distributor of financial products to middle income households in the United States and Canada. We assist our clients in meeting their needs for term life insurance, which we underwrite, and mutual funds, annuities and other financial products, which we distribute primarily on behalf of third parties. Our primary subsidiaries include the following entities: Primerica Financial Services, Inc., a general agency and marketing company; Primerica Life Insurance Company ("Primerica Life"), our principal life insurance company; Primerica Financial Services (Canada) Ltd., a holding company for our Canadian operations, which includes Primerica Life Insurance Company of Canada ("Primerica Life Canada"); and PFS Investments, Inc., an investment products company and broker-dealer. Primerica Life, domiciled in Massachusetts, owns National Benefit Life Insurance Company ("NBLIC"), a New York life insurance company. Each of these entities was indirectly wholly owned by Citigroup Inc. (together with its non-Primerica affiliates, "Citi") through March 31, 2010.

We capitalized Peach Re, Inc. ("Peach Re"), a special purpose financial captive insurance company and wholly owned subsidiary of Primerica Life, and Primerica Life ceded to Peach Re certain level premium term life insurance policies pursuant to a coinsurance agreement (the "Peach Re Coinsurance Agreement"), effective March 31, 2012.

Basis of Presentation. We prepare our financial statements in accordance with U.S. generally accepted accounting principles ("GAAP"). These principles are established primarily by the Financial Accounting Standards Board ("FASB"). The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect financial statement balances, revenues and expenses and cash flows as well as the disclosure of contingent assets and liabilities. Management considers available facts and knowledge of existing circumstances when establishing the estimates included in our financial statements.

The most significant items that involve a greater degree of accounting estimates and actuarial determinations subject to change in the future are the valuation of investments, deferred policy acquisition costs assets ("DAC"), future policy benefit reserves and income taxes. Estimates for these and other items are subject to change and are reassessed by management in accordance with GAAP. Actual results could differ from those estimates.

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and those entities required to be consolidated under applicable accounting standards. All material intercompany profits, transactions, and balances among the consolidated entities have been eliminated.

The accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of normal recurring accruals, which are necessary to fairly present the balance sheets as of June 30, 2012 and December 31, 2011, the statements of income and comprehensive income for the three and six months ended June 30, 2012 and 2011, and the statements of stockholders' equity and cash flows for the six months ended June 30, 2012 and 2011. Results of operations for interim periods are not necessarily indicative of results for the entire year or of the results to be expected in future periods.

These unaudited condensed consolidated financial statements have been prepared pursuant to the rules and the regulations of the Securities and Exchange Commission (the "SEC"). Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. These condensed consolidated financial statements should be read in conjunction with the consolidated and combined financial statements and notes thereto that are included in our Annual Report on Form 10-K for the year ended December 31, 2011, as modified and updated by our Current Report on Form 8-K filed with the SEC on May 8, 2012 (together, the "2011 Annual Report").

Reclassifications. Certain reclassifications have been made to prior-period amounts to conform to current-period reporting classifications. Concurrent with our January 1, 2012 adoption of ASU 2010-26, Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts ("ASU 2010-26"), certain expenses were reclassified among sales commission, insurance expenses, insurance commissions and other operating expenses. These reclassifications had no impact on net income, total stockholders’ equity or income before income taxes by segment.

Significant Accounting Policies. All significant accounting policies remain unchanged from the 2011 Annual Report.

6

New Accounting Principles.

We retrospectively adopted ASU 2010-26 in our fiscal year beginning January 1, 2012. The impact of adoption was as follows:

	(In thousands, except per-share amounts)
Reduction as of January 1, 2011:
Deferred policy acquisition costs, net	$	114,265
Stockholders' equity	74,964
Reduction as of December 31, 2011:
Deferred policy acquisition costs, net	$	146,152
Stockholders' equity	95,991
Reduction for the three months ended June 30, 2011:
Income before income taxes	$	9,696
Net income	6,403
Basic earnings per share	0.08
Diluted earnings per share	0.09
Reduction for the six months ended June 30, 2011:
Income before income taxes	$	17,585
Net income	11,599
Basic earnings per share	0.16
Diluted earnings per share	0.15

The adoption of ASU 2010-26 had no impact on our cash flows or required capital.

In accordance with ASU 2010-26, we only defer the costs of acquiring new business to the extent that they result directly from and are essential to the contract transaction(s) and would not have been incurred had the contract transaction(s) not occurred. These deferred policy acquisition costs mainly include commissions and policy issuance expenses. The recovery of such costs is dependent on the future profitability of the related policies, which, in turn, is dependent principally upon mortality, persistency, investment returns, and the expense of administering the business, as well as upon certain economic variables, such as inflation. DAC is subject to recoverability testing annually and when impairment indicators exist. We make certain assumptions regarding persistency, expenses, interest rates and claims. These assumptions may not be modified, or unlocked, unless recoverability testing deems them to be inadequate. We update assumptions for new business to reflect the most recent experience. DAC is amortized over the premium-paying period of the related policies in proportion to annual premium income. Due to the inherent uncertainties in making assumptions about future events, materially different experience from expected results in persistency could result in a material increase or decrease of DAC amortization in a particular period. All other acquisition-related costs, including unsuccessful acquisition and renewal efforts, are charged to expense as incurred. Administrative costs, rent, depreciation, occupancy, equipment, and all other general overhead costs are considered indirect costs and are charged to expense as incurred.

Deferrable acquisitions costs for Canadian segregated funds are amortized over the life of the policies in relation to historical and future estimated gross profits before amortization. The gross profits and resulting DAC amortization will vary with actual fund returns, redemptions and expenses. The adoption of ASU 2010-26 did not impact the accounting for acquisition costs related to Canadian segregated funds.

7

The balances of and activity in DAC, which reflects the retrospective adoption of ASU 2010-26 for all periods presented, were as follows:

	Six months ended June 30,
	2012			2011
	(In thousands)
DAC balance, beginning of period	$	904,485		$	738,946
Capitalization	141,151			134,704
Amortization	(54,736		)	(47,204		)
Foreign exchange and other	(342		)	7,338
DAC balance, end of period	$	990,558		$	833,784

Fair Value Measurement Amendments. In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement ("ASU 2011-04"). The primary provisions of ASU 2011-04 result in common fair value measurement and disclosure requirements for U.S. GAAP and International Financial Reporting Standards. ASU 2011-04 changes the wording used to describe the requirements for measuring fair value and for disclosing information about fair value measurement, including requiring quantitative disclosures about the unobservable inputs used in fair value measurements. The amendments in the update were applied prospectively for our fiscal year beginning January 1, 2012. This update did not result in a significant impact on our financial position or results of operations.

(2) Segment Information

We have two primary operating segments – Term Life Insurance and Investment and Savings Products. We also have a Corporate and Other Distributed Products segment. Assets by segment were as follows:

	June 30, 2012		December 31, 2011
	(In thousands)
Assets:
Term life insurance segment	$	6,241,977	$	6,009,162
Investment and savings products segment	2,692,115		2,591,137
Corporate and other distributed products segment	1,016,985		1,251,521
Total assets	$	9,951,077	$	9,851,820

The Investment and Savings Products segment includes assets held in separate accounts. Excluding separate accounts, Investment and Savings Products segment assets were as follows:

	June 30, 2012		December 31, 2011
	(In thousands)
Investment and savings products segment assets, excluding separate accounts	$	192,462	$	183,622

8

Results of operations by segment were as follows:

	Three months ended June 30,						Six months ended June 30,
	2012			2011			2012			2011
	(In thousands)
Revenues:
Term life insurance segment	$	162,732		$	131,641		$	314,536		$	268,603
Investment and savings products segment	102,967			104,586			203,101			205,432
Corporate and other distributed products segment	34,826			38,868			69,489			77,412
Total revenues	$	300,525		$	275,095		$	587,126		$	551,447
Income (loss) before income taxes:
Term life insurance segment	$	51,724		$	36,026		$	96,007		$	85,742
Investment and savings products segment	29,444			30,470			58,314			61,509
Corporate and other distributed products segment	(9,247		)	(8,031		)	(18,935		)	(15,530		)
Total income before income taxes	$	71,921		$	58,465		$	135,386		$	131,721

Results of operations by country were as follows:

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
	(In thousands)
Revenues by country:
United States	$	246,703	$	222,909	$	477,460	$	445,312
Canada	53,822		52,186		109,666		106,135
Total revenues	$	300,525	$	275,095	$	587,126	$	551,447
Income before income taxes by country:
United States	$	54,265	$	42,652	$	102,038	$	99,658
Canada	17,656		15,813		33,348		32,063
Total income before income taxes	$	71,921	$	58,465	$	135,386	$	131,721

9

(3) Investments

The period-end cost or amortized cost, gross unrealized gains and losses, and fair value of fixed-maturity and equity securities in our available-for-sale portfolio follow:

	June 30, 2012
	Cost or amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
	(In thousands)
Securities available for sale, carried at fair value:
Fixed-maturity securities:
U.S. government and agencies	$	8,981	$	888	$	—		$	9,869
Foreign government	97,414		14,118		(148		)	111,384
States and political subdivisions	27,839		3,524		(2		)	31,361
Corporates (1)	1,181,368		120,760		(3,906		)	1,298,222
Mortgage- and asset-backed securities	348,174		26,695		(1,976		)	372,893
Total fixed-maturity securities	1,663,776		165,985		(6,032		)	1,823,729
Equity securities	25,033		7,154		(376		)	31,811
Total fixed-maturity and equity securities	$	1,688,809	$	173,139	$	(6,408	)	$	1,855,540

____________________

(1) Includes $3.1 million of other-than-temporary impairment losses recognized in accumulated other comprehensive income.

	December 31, 2011
	Cost or amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
	(In thousands)
Securities available for sale, carried at fair value:
Fixed-maturity securities:
U.S. government and agencies	$	10,050	$	935	$	—		$	10,985
Foreign government	97,206		14,818		(179		)	111,845
States and political subdivisions	28,264		2,671		—			30,935
Corporates (1)	1,250,702		111,346		(7,847		)	1,354,201
Mortgage- and asset-backed securities	425,137		29,398		(3,345		)	451,190
Total fixed-maturity securities	1,811,359		159,168		(11,371		)	1,959,156
Equity securities	21,329		5,689		(306		)	26,712
Total fixed-maturity and equity securities	$	1,832,688	$	164,857	$	(11,677	)	$	1,985,868

____________________

(1) Includes $2.6 million of other-than-temporary impairment losses recognized in accumulated other comprehensive income.

Certain available-for-sale securities were sold during the three months ended June 30, 2012 to finance the repurchase of shares in April 2012 (see Note 7 for additional information).

10

The net effect on stockholders’ equity of unrealized gains and losses on available-for-sale securities was as follows:

	June 30, 2012			December 31, 2011
	(In thousands)
Net unrealized investment gains (losses) including foreign currency translation adjustment and other-than-temporary impairments:
Fixed-maturity and equity securities	$	166,731		$	153,180
Currency swaps	(23		)	96
Foreign currency translation adjustment	(4,929		)	(6,481		)
Other-than-temporary impairments	3,124			2,562
Net unrealized investment gains excluding foreign currency translation adjustment and other-than-temporary impairments	164,903			149,357
Deferred income taxes	(57,716		)	(52,275		)
Net unrealized investment gains excluding foreign currency translation adjustment and other-than-temporary impairments, net of tax	$	107,187		$	97,082

We also maintain a portfolio of fixed-maturity securities that are classified as trading securities. The carrying value of these securities was as follows:

	June 30, 2012		December 31, 2011
	(In thousands)
Fixed-maturity securities classified as trading, carried at fair value	$	29,038	$	9,640

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

As required by law, the Company has investments on deposit with governmental authorities and banks for the protection of policyholders. The fair value of investments on deposit was as follows:

	June 30, 2012		December 31, 2011
	(In thousands)
Fair value of investments on deposit with governmental authorities	$	19,309	$	19,100

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

	June 30, 2012		December 31, 2011
	(In thousands)
Securities lending collateral	$	143,963	$	149,358

11

The scheduled contractual maturity distribution of the available-for-sale fixed-maturity portfolio at June 30, 2012 follows.

	Amortized cost		Fair value
	(In thousands)
Due in one year or less	$	112,493	$	116,017
Due after one year through five years	551,201		594,914
Due after five years through 10 years	603,657		684,617
Due after 10 years	48,251		55,288
	1,315,602		1,450,836
Mortgage- and asset-backed securities	348,174		372,893
Total fixed-maturity securities	$	1,663,776	$	1,823,729

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

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

	Three months ended June 30,						Six months ended June 30,
	2012			2011			2012			2011
	(In thousands)
Fixed-maturity securities	$	23,797		$	27,462		$	49,559		$	56,474
Equity securities	244			165			467			353
Policy loans and other invested assets	261			320			611			648
Cash and cash equivalents	111			65			246			135
Market return on deposit asset underlying 10% reinsurance agreement	574			650			1,604			1,159
Gross investment income	24,987			28,662			52,487			58,769
Investment expenses	(1,382		)	(1,433		)	(2,785		)	(2,914		)
Net investment income	$	23,605		$	27,229		$	49,702		$	55,855

12

The components of net realized investment gains (losses) as well as details on gross realized investment gains and losses and proceeds from sales or other redemptions were as follows:

	Three months ended June 30,						Six months ended June 30,
	2012			2011			2012			2011
	(In thousands)
Net realized investment gains (losses):
Gross gains from sales	$	4,506		$	2,145		$	6,542		$	2,957
Gross losses from sales	(56		)	(6		)	(57		)	(331		)
Gross gains from securities transferred from available-for-sale to trading	323			—			323			—
Gross losses from securities transferred from available-for-sale to trading	(6		)	—			(6		)	—
Other-than-temporary impairment losses	(127		)	(66		)	(341		)	(333		)
Gains (losses) from bifurcated options	(319		)	(38		)	(9		)	69
Net realized investment gains (losses)	$	4,321		$	2,035		$	6,452		$	2,362
Gross realized investment gains (losses) reclassified from accumulated other comprehensive income	$	4,640		$	2,073		$	6,461		$	2,293
Proceeds from sales or other redemptions	$	196,096		$	106,848		$	338,883		$	270,608

Other-Than-Temporary Impairment. We conduct a review each quarter to identify and evaluate impaired investments that have indications of possible other-than-temporary impairment ("OTTI"). An investment in a debt or equity security is impaired if its fair value falls below its cost. Factors considered in determining whether an unrealized loss is temporary include the length of time and extent to which fair value has been below cost, the financial condition and near-term prospects for the issue, and our ability and intent to hold the investment for a period of time sufficient to allow for any anticipated recovery, which may be maturity. For additional information, see Note 3 to the consolidated and combined financial statements in our 2011 Annual Report.

Investments in fixed-maturity and equity securities with a cost basis in excess of fair value were as follows:

	June 30, 2012		December 31, 2011
	(In thousands)
Fixed-maturity and equity securities with cost basis in excess of fair value	$	126,930	$	286,718

13

The following tables summarize, for all securities in an unrealized loss position, the aggregate fair value and the gross unrealized loss by length of time such securities have continuously been in an unrealized loss position:

	June 30, 2012
	Less than 12 months						12 months or longer
	Fair value		Unrealized losses			Number of securities	Fair value		Unrealized losses			Number of securities
	(Dollars in thousands)
Fixed-maturity securities:
Foreign government	$	6,945	$	(148	)	12	$	—	$	—		0
States and political subdivisions	1,750		(2		)	3	—		—			0
Corporates	75,791		(2,282		)	125	13,030		(1,624		)	23
Mortgage- and asset-backed securities	9,878		(114		)	14	11,101		(1,862		)	22
Total fixed-maturity securities	94,364		(2,546		)		24,131		(3,486		)
Equity securities	1,314		(75		)	13	713		(301		)	12
Total fixed-maturity and equity securities	$	95,678	$	(2,621	)		$	24,844	$	(3,787	)

	December 31, 2011
	Less than 12 months						12 months or longer
	Fair value		Unrealized losses			Number of securities	Fair value		Unrealized losses			Number of securities
	(Dollars in thousands)
Fixed-maturity securities:
Foreign government	$	7,150	$	(179	)	10	$	—	$	—		0
States and political subdivisions	—		—			0	—		—			0
Corporates	188,643		(6,979		)	185	4,092		(868		)	11
Mortgage- and asset-backed securities	49,026		(478		)	60	25,280		(2,867		)	30
Total fixed-maturity securities	244,819		(7,636		)		29,372		(3,735		)
Equity securities	850		(306		)	78	—		—			0
Total fixed-maturity and equity securities	$	245,669	$	(7,942	)		$	29,372	$	(3,735	)

The amortized cost and fair value of available-for-sale fixed-maturity securities in default were as follows:

	June 30, 2012				December 31, 2011
	Amortized cost		Fair value		Amortized cost		Fair value
	(In thousands)
Fixed-maturity securities in default	$	3,704	$	4,695	$	3,983	$	5,168

14

Impairment charges recognized in earnings on available-for-sale securities were as follows:

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
	(In thousands)
Impairments on fixed-maturity securities not in default	$	126	$	63	$	340	$	324
Impairments on fixed-maturity securities in default	—		—		—		4
Impairments on equity securities	1		3		1		5
Total impairment charges	$	127	$	66	$	341	$	333

The fixed-maturity and equity securities noted above were considered to be other-than-temporarily impaired due to adverse credit events, such as news of an impending filing for bankruptcy; analyses of the issuer’s most recent financial statements or other information in which liquidity deficiencies, significant losses and large declines in capitalization were evident; or analyses of rating agency information for issuances with severe ratings downgrades that indicated a significant increase in the possibility of default.

As of June 30, 2012, the unrealized losses on our invested asset portfolio were largely caused by interest rate sensitivity and changes in credit spreads. We believe that fluctuations caused by interest rate movement have little bearing on the recoverability of our investments. Because the declines in fair value were mostly attributable to changes in interest rates and not credit quality, and because we have the ability to hold these investments until a market price recovery or maturity as well as no present intention to dispose of them, we do not consider these investments to be other-than-temporarily impaired.

Net impairment losses recognized in earnings were as follows:

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
	(In thousands)
Impairment losses related to securities which the Company does not intend to sell or more-likely-than-not will not be required to sell:
Total OTTI losses recognized	$	161	$	2	$	861	$	2
Less portion of OTTI loss recognized in accumulated other comprehensive income (loss)	76		—		563		—
Net impairment losses recognized in earnings for securities which the Company does not intend to sell or more-likely-than-not will not be required to sell before recovery	85		2		298		2
OTTI losses recognized in earnings for securities which the Company intends to sell or more-likely-than-not will be required to sell before recovery	42		64		43		331
Net impairment losses recognized in earnings	$	127	$	66	$	341	$	333

15

The roll-forward of the credit-related losses recognized in income for all fixed-maturity securities still held follows.

	Three months ended June 30,						Six months ended June 30,
	2012			2011			2012			2011
	(In thousands)
Cumulative OTTI credit losses recognized for securities still held, beginning of period	$	32,213		$	40,634		$	34,072		$	41,129
Additions for OTTI securities where no credit losses were recognized prior to the beginning of the period	10			—			10			4
Additions for OTTI securities where credit losses have been recognized prior to the beginning of the period	116			63			330			324
Reductions due to sales, maturities or calls of credit impaired securities	(911		)	(807		)	(2,984		)	(1,567		)
Cumulative OTTI credit losses recognized for securities still held, end of period	$	31,428		$	39,890		$	31,428		$	39,890

Derivatives. We use foreign currency swaps to reduce our foreign exchange risk due to direct investment in foreign currency-denominated debt securities. The aggregate notional balance and fair value of these currency swaps follow.

	June 30, 2012			December 31, 2011
	(In thousands)
Aggregate notional balance of currency swaps	$	5,878		$	5,878
Aggregate fair value of currency swaps	(1,987		)	(2,032		)

The change in fair value of these currency swaps is reflected in other comprehensive income as they effectively hedge the variability in cash flows from these foreign currency-denominated debt securities.

The embedded conversion options associated with fixed-maturity securities are bifurcated from the fixed-maturity security host contracts and separately recognized as equity securities. We recognize the change in fair value of these bifurcated conversion options in realized investment gains, including other-than-temporary impairment losses. The fair value of these bifurcated options follows.

	June 30, 2012		December 31, 2011
	(In thousands)
Aggregate fair value of embedded conversion options bifurcated from host contract	$	7,227	$	8,583

We have a deferred loss related to closed forward contracts that were used to mitigate our exposure to foreign currency exchange rates that resulted from the net investment in our Canadian operations. The amount of deferred loss included in accumulated other comprehensive income was as follows:

	June 30, 2012		December 31, 2011
	(In thousands)
Deferred loss related to closed forward contracts	$	26,385	$	26,385

While we have no current intention to do so, these deferred losses will not be recognized until such time as we sell or substantially liquidate our Canadian operations.

(4) Fair Value of Financial Instruments

Fair value is the price that would be received upon the sale of an asset in an orderly transaction between market participants at the measurement date. Fair value measurements are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect

16

our view of market assumptions in the absence of observable market information. We classify and disclose all invested assets carried at fair value in one of the following three categories:

• Level 1. Quoted prices for identical instruments in active markets. Level 1 primarily consists of financial instruments whose value is based on quoted market prices in active markets, such as exchange-traded common stocks and actively traded mutual fund investments;

• Level 2. Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 includes those financial instruments that are valued using industry-standard pricing methodologies, models or other valuation methodologies. Various inputs are considered in deriving the fair value of the underlying financial instrument, including interest rate, credit spread, and foreign exchange rates. All significant inputs are observable, or derived from observable information in the marketplace or are supported by observable levels at which transactions are executed in the marketplace. Financial instruments in this category primarily include: certain public and private corporate fixed-maturity and equity securities; government or agency securities; certain mortgage- and asset-backed securities and certain non-exchange-traded derivatives, such as currency swaps and forwards; and

• Level 3. Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Level 3 consists of financial instruments whose fair value is estimated based on industry-standard pricing methodologies and models using significant inputs not based on, nor corroborated by, readily available market information. Valuations for this category primarily consist of non-binding broker quotes. Financial instruments in this category primarily include less liquid fixed-maturity corporate securities.

As of each reporting period, all assets and liabilities recorded at fair value are classified in their entirety based on the lowest level of input (Level 3 being the lowest). Significant levels of estimation and judgment are required to determine the fair value of certain of our investments. The factors influencing these estimations and judgments are subject to change in subsequent reporting periods.

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

	June 30, 2012
	Level 1		Level 2		Level 3		Total
	(In thousands)
Fair value assets:
Fixed-maturity securities:
U.S. government and agencies	$	—	$	9,869	$	—	$	9,869
Foreign government	—		111,384		—		111,384
States and political subdivisions	—		31,361		—		31,361
Corporates	249		1,290,884		7,089		1,298,222
Mortgage- and asset-backed securities	—		369,899		2,994		372,893
Total fixed-maturity securities	249		1,813,397		10,083		1,823,729
Equity securities	24,525		7,238		48		31,811
Trading securities	—		29,038		—		29,038
Separate accounts	—		2,500,640		—		2,500,640
Total fair value assets	$	24,774	$	4,350,313	$	10,131	$	4,385,218
Fair value liabilities:
Currency swaps	$	—	$	1,987	$	—	$	1,987
Separate accounts	—		2,500,640		—		2,500,640
Total fair value liabilities	$	—	$	2,502,627	$	—	$	2,502,627

17

	December 31, 2011
	Level 1		Level 2		Level 3		Total
	(In thousands)
Fair value assets:
Fixed-maturity securities:
U.S. government and agencies	$	—	$	10,985	$	—	$	10,985
Foreign government	—		111,845		—		111,845
States and political subdivisions	—		30,935		—		30,935
Corporates	256		1,349,021		4,924		1,354,201
Mortgage- and asset-backed securities	—		449,228		1,962		451,190
Total fixed-maturity securities	256		1,952,014		6,886		1,959,156
Equity securities	18,069		8,592		51		26,712
Trading securities	—		9,640		—		9,640
Separate accounts	—		2,408,598		—		2,408,598
Total fair value assets	$	18,325	$	4,378,844	$	6,937	$	4,404,106
Fair value liabilities:
Currency swaps	$	—	$	2,032	$	—	$	2,032
Separate accounts	—		2,408,598		—		2,408,598
Total fair value liabilities	$	—	$	2,410,630	$	—	$	2,410,630

In assessing fair value of our investments, we use a third-party pricing service for approximately 94% of our securities. The remaining securities are primarily thinly traded securities valued using models based on observable inputs on public corporate spreads having similar tenors (e.g., sector, average life and quality rating) and liquidity and yield based on quality rating, average life and treasury yields. All observable data inputs are corroborated by independent third-party data. In the absence of sufficient observable inputs, we utilize non-binding broker quotes, which are reflected in our Level 3 classification as we are unable to evaluate the valuation technique(s) or significant inputs used to develop the quotes. Therefore, we do not internally develop the quantitative unobservable inputs used in measuring the fair value of Level 3 investments. However, we do corroborate pricing information provided by our third-party pricing servicing by performing a review of selected securities. Our review activities include obtaining detailed information about the assumptions, inputs and methodologies used in pricing the security; documenting this information; and corroborating it by comparison to independently obtained prices and or independently developed pricing methodologies.

Furthermore, we perform internal reasonableness assessments on fair value determinations within our portfolio throughout the month and at month-end, including pricing variance analyses and comparisons to alternative pricing sources and benchmark returns. If a fair value appears unusual relative to these assessments, we will re-examine the inputs and may challenge a fair value assessment made by the pricing service. If there is a known pricing error, we will request a reassessment by the pricing service. If the pricing service is unable to perform the reassessment on a timely basis, we will determine the appropriate price by requesting a reassessment from an alternative pricing service or other qualified source as necessary. We do not adjust quotes or prices except in a rare circumstance to resolve a known error.

Because many fixed-maturity securities do not trade on a daily basis, fair value is determined using industry-standard methodologies by applying available market information through processes such as U.S. Treasury curves, benchmarking of similar securities, sector groupings, quotes from market participants and matrix pricing. Observable information is compiled and integrates relevant credit information, perceived market movements and sector news. Additionally, security prices are periodically back-tested to validate and/or refine models as conditions warrant. Market indicators and industry and economic events are also monitored as triggers to obtain additional data. For certain structured securities with limited trading activity, industry-standard pricing methodologies use adjusted market information, such as index prices or discounting expected future cash flows, to estimate fair value. If these measures are not deemed observable for a particular security, the security will be classified as Level 3 in the fair value hierarchy.

Where specific market information is unavailable for certain securities, pricing models produce estimates of fair value primarily using Level 2 inputs along with certain Level 3 inputs. These models include matrix pricing. The

18

pricing matrix uses current treasury rates and credit spreads received from third-party sources to estimate fair value. The credit spreads incorporate the issuer’s industry- or issuer-specific credit characteristics and the security’s time to maturity, if warranted. Remaining un-priced securities are valued using an estimate of fair value based on indicative market prices that include significant unobservable inputs not based on, nor corroborated by, market information, including the utilization of non-binding broker quotes.

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

	Three months ended June 30,						Six months ended June 30,
	2012			2011			2012			2011
	(In thousands)
Level 3 assets, beginning of period	$	10,916		$	30,162		$	6,937		$	24,998
Net unrealized gains (losses) included in other comprehensive income	(504		)	(232		)	(336		)	(281		)
Net realized gains (losses) included in realized investment gains, including other-than-temporary impairment losses	45			871			(40		)	1,466
Purchases	1,117			—			2,416			4,000
Sales	—			(902		)	—			(3,823		)
Settlements	(384		)	(1,238		)	(738		)	(1,462		)
Transfers into Level 3	—			2			2,951			4,503
Transfers out of Level 3	(1,059		)	(16,398		)	(1,059		)	(17,136		)
Level 3 assets, end of period	$	10,131		$	12,265		$	10,131		$	12,265

We obtain independent pricing quotes based on observable inputs as of the end of the reporting period for all securities in Level 2. Those inputs include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, market bids/offers, quoted prices for similar instruments in markets that are not active, and other relevant data. We monitor these inputs for market indicators, industry and economic events. We recognize transfers into new levels and out of previous levels as of the end of the reporting period, including interim reporting periods, as applicable. There were no transfers between Level 1 and Level 2 during the six months ended June 30, 2012 and 2011. In addition, there were no transfers between Level 1 and Level 3 during the six months ended June 30, 2012 and 2011.

Invested assets included in the transfer from Level 2 to Level 3 during the three months ended June 30, 2011 and the six months ended June 30, 2012 and 2011 primarily were fixed-maturity investments for which we were unable to corroborate independent broker quotes with observable market data. Invested assets included in the transfer from Level 3 to Level 2 during the three and six months ended June 30, 2012 and 2011 primarily were fixed-maturity securities and fixed-maturity securities with embedded conversion options for which we were able to obtain independent pricing quotes based on observable inputs.

19

The table below is a summary of the estimated fair value for financial instruments.

	June 30, 2012				December 31, 2011
	Carrying value		Estimated fair value		Carrying value		Estimated fair value
	(In thousands)
Assets:
Fixed-maturity securities	$	1,823,729	$	1,823,729	$	1,959,156	$	1,959,156
Equity securities	31,811		31,811		26,712		26,712
Trading securities	29,038		29,038		9,640		9,640
Policy loans	24,187		24,187		25,982		25,982
Other invested assets	14		14		14		14
Deposit asset underlying 10% reinsurance agreement	75,436		75,436		59,975		59,975
Separate accounts	2,500,640		2,500,640		2,408,598		2,408,598
Liabilities:
Note payable	$	300,000	$	334,782	$	300,000	$	329,779
Currency swaps	1,987		1,987		2,032		2,032
Separate accounts	2,500,640		2,500,640		2,408,598		2,408,598

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

Recurring fair value measurements. Estimated fair values of investments in fixed-maturity securities are principally a function of current spreads and interest rates that are corroborated by independent third-party data. Therefore, the fair values presented are indicative of amounts we could realize or settle at the respective balance sheet date. We do not necessarily intend to dispose of or liquidate such instruments prior to maturity. Trading securities, which primarily consist of fixed-maturity securities, are carried at fair value. Equity securities, including common and non-redeemable preferred stocks, are carried at fair value. Currency swaps are stated at fair value. Segregated funds in separate accounts are carried at the underlying value of the variable insurance contracts, which is fair value.

Nonrecurring fair value measurements. Policy loans are carried at unpaid principal balances, which approximate fair value and are categorized as Level 3 fair value measurements. The deposit asset underlying the 10% reinsurance agreement represents the value of the assets backing the economic reserves held in support of a reinsurance agreement. The carrying value of this deposit asset approximates fair value, which is categorized as Level 3 in the fair value hierarchy. Other invested assets have a carrying value that approximates fair value and are categorized as Level 3 in the fair value hierarchy. The fair value of our note payable is a Level 2 fair value measurement and is based on observable inputs including prevailing interest rates and an estimated spread based on notes of comparable issuers and maturity.

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

20

(5) Reinsurance

Reinsurance ceded arrangements do not relieve the Company of its primary obligation to the policyholder. We monitor the concentration of credit risk we have with any reinsurer, as well as the financial condition of the reinsurers. Details on in-force life insurance follow.

	June 30, 2012			December 31, 2011
	(Dollars in thousands)
Direct life insurance in force	$	672,899,761		$	669,938,841
Amounts ceded to other companies	(598,719,363		)	(596,975,143		)
Net life insurance in force	$	74,180,398		$	72,963,698
Percentage of reinsured life insurance in force	89		%	89		%

Due from reinsurers includes ceded reserve balances and ceded claim liabilities. Reinsurance receivable and financial strength ratings by reinsurer were as follows:

	June 30, 2012			December 31, 2011
	Reinsurance receivable		A.M. Best rating	Reinsurance receivable		A.M. Best rating
	(In thousands)
Prime Reinsurance Company (1)	$	2,471,318	NR	$	2,438,723	NR
Financial Reassurance Company 2010, Ltd. (1)	338,645		NR	335,396		NR
American Health and Life Insurance Company (1)	166,687		A-	164,387		A-
Due from Citi affiliate reinsurers	2,976,650			2,938,506
Swiss Re Life & Health America Inc. (2)	254,414		A+	252,912		A+
SCOR Global Life Reinsurance Companies	148,874		A	143,409		A
Generali USA Life Reassurance Company	113,820		A-	114,774		A-
Transamerica Reinsurance Companies	101,709		A+	103,873		A+
Munich American Reassurance Company	97,543		A+	99,240		A+
Korean Reinsurance Company	82,655		A	82,755		A
RGA Reinsurance Company	69,338		A+	67,740		A+
All other reinsurers	58,025		—	52,109		—
Due from reinsurers	$	3,903,028		$	3,855,318

____________________ 

NR – not rated

(1) Amounts shown are net of their share of the reinsurance recoverable from other reinsurers.

(2) Includes amounts ceded to Lincoln National Life Insurance and 100% retroceded to Swiss Re Life & Health America Inc.

(6) Notes Payable

In April 2010, we issued to Citi a $300.0 million note (the "Citi note") as part of our corporate reorganization. The Citi note bore interest at an annual rate of 5.5%, payable semi-annually in arrears on January 15 and July 15. It was scheduled to mature on March 31, 2015. The Citi note required us to use our commercially reasonable efforts to repay the note in full at certain mutually agreeable dates, based on certain conditions. We were in compliance with the covenants of the Citi note at June 30, 2012. No events of default or defaults occurred during the six months ended June 30, 2012.

On July 16, 2012, we issued $375.0 million in principal amount of senior notes (the "Senior Notes") and used $300.0 million of the net cash proceeds to repay the Citi note in whole at a redemption price equal to 100% of the outstanding principal amount. We issued the Senior Notes at a price of 99.843% of the principal amount with an annual interest rate of 4.750%, payable semi-annually in arrears on January 15 and July 15, commencing on January 15, 2013. The Senior Notes mature on July 15, 2022.

As unsecured senior obligations, the Senior Notes rank equally in right of payment with all existing and future unsubordinated indebtedness. They will rank senior in right of payment to all existing and future subordinated indebtedness and are structurally subordinated in right of payment to all existing and future liabilities of our

21

subsidiaries. In addition, the Senior Notes contain covenants that restrict our ability to, among other things, create or incur any indebtedness that is secured by a lien on the capital stock of certain of our subsidiaries, and merge, consolidate or sell all or substantially all of our properties and assets.

(7) Stockholders’ Equity

A reconciliation of the number of shares of our common stock follows.

	Six months ended June 30,
	2012		2011
	(In thousands)
Common stock, beginning of period	64,883		72,843
Shares of restricted common stock issued, net	438		345
Shares of common stock issued upon lapse of restricted stock units ("RSUs")	712		584
Common stock retired	(6,165	)	(169	)
Common stock, end of period	59,868		73,603

The above reconciliation excludes RSUs which do not have voting rights and are subject to sale restrictions. As the restrictions lapse during the three years following the issuance of the RSUs, we will issue common shares with voting rights. As of June 30, 2012, we had a total of approximately 1.7 million RSUs outstanding. Approximately 178,000 RSUs were granted during the six months ended June 30, 2012 and approximately 246,000 RSUs were granted during the six months ended June 30, 2011.

On April 26, 2012, we repurchased 5,736,137 shares of our common stock beneficially owned by certain private equity funds managed by Warburg Pincus LLC ("Warburg Pincus") at $26.15 per share, for a total purchase price of approximately $150.0 million. The per-share purchase price was determined based on the closing price of our common stock on April 17, 2012, which was the date the agreement to repurchase the shares was executed. As of June 30, 2012, Warburg Pincus owned approximately 18% of the Company's outstanding common stock. At June 30, 2012, Warburg Pincus also owned warrants to purchase 4,103,110 additional shares of our common stock at an exercise price of $18.00 per share. These warrants expire in April 2017.

22

(8) Earnings Per Share ("EPS")

The Company has outstanding common stock, warrants, and equity awards. Both the vested and unvested equity awards maintain non-forfeitable dividend rights that result in dividend payment obligations on a one-to-one ratio with common shares for any future dividend declarations. These equity awards are deemed participating securities for purposes of calculating EPS.

As a result of issuing equity awards that are deemed participating securities, we calculate EPS using the two-class method. Under the two-class method, we allocate earnings to common shares and to fully vested equity awards. Earnings attributable to unvested equity awards, along with the corresponding share counts, are excluded from EPS as reflected in our consolidated statements of income.

In calculating basic EPS, we deduct any dividends and undistributed earnings allocated to unvested equity awards from net income and then divide the result by the weighted-average number of common shares and fully vested equity awards outstanding for the period.

We determine the potential dilutive effect of warrants on EPS using the treasury-stock method. Under this method, we utilize the exercise price to determine the amount of cash that would be available to repurchase shares if the warrants were exercised. We then use the average market price of our common shares during the reporting period to determine how many shares we could repurchase with the cash raised from the exercise. The net incremental share count issued represents the potential dilutive securities. We then reallocate earnings to common shares and fully vested equity awards incorporating the increased, fully diluted share count to determine diluted EPS.

The calculation of basic and diluted EPS follows.

	Three months ended June 30,						Six months ended June 30,
	2012			2011			2012			2011
	(In thousands, except per-share amounts)
Basic EPS
Numerator:
Net income	$	46,180		$	37,620		$	87,936		$	84,891
Income attributable to unvested participating securities	(1,111		)	(1,097		)	(2,498		)	(2,837		)
Net income used in calculating basic EPS	$	45,069		$	36,523		$	85,438		$	82,054
Denominator:
Weighted-average vested shares	61,531			73,457			63,332			73,067
Basic EPS	$	0.73		$	0.50		$	1.35		$	1.12
Diluted EPS
Numerator:
Net income	$	46,180		$	37,620		$	87,936		$	84,891
Income attributable to unvested participating securities	(1,092		)	(1,087		)	(2,457		)	(2,802		)
Net income used in calculating diluted EPS	$	45,088		$	36,533		$	85,479		$	82,089
Denominator:
Weighted-average vested shares	62,687			74,201			64,481			74,028
Diluted EPS	$	0.72		$	0.49		$	1.33		$	1.11

(9) Share-Based Transactions

The Company has outstanding equity awards under its Omnibus Incentive Plan ("OIP"). The OIP provides for the issuance of equity awards, including stock options, stock appreciation rights, restricted stock, deferred stock, RSUs, unrestricted stock as well as cash-based awards. In addition to time-based vesting requirements, awards granted

23

under the OIP also may be subject to specified performance criteria. As of June 30, 2012, we had approximately 3.9 million shares available for future grants under this plan.

All outstanding management awards have time-based vesting requirements, vesting over three years. In connection with our granting of management equity awards, we recognized expense and tax benefit offsets as follows:

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
	(In thousands)
Management equity award expense	$	4,863	$	4,280	$	9,311	$	7,705
Tax benefit associated with management equity awards	1,183		1,465		2,229		2,639

Management equity award expense reflects vesting activity related to the 2011 and 2010 management equity grants as well as management equity grants of approximately 441,900 shares awarded on February 22, 2012 at $25.45, all less a nominal forfeiture adjustment. As of June 30, 2012, total compensation cost not yet recognized in our financial statements related to management equity awards was $24.4 million, all of which was related to equity awards with time-based vesting conditions yet to be reached. We expect to recognize these amounts over a weighted-average period of approximately one year, nine months.

Our quarterly incentive awards to our sales force leaders have performance-based vesting requirements for which the grant and the service period occur within the same calendar quarter. These awards are granted in the form of RSUs that vest upon the conclusion of the quarterly contest and are subject to sale restrictions expiring over the three years subsequent to vesting. Because the awards are subject to sale restrictions following their vesting, their fair value is discounted to reflect a corresponding illiquidity discount. To the extent they are granted in connection with successful policy acquisitions, portions of these awards are deferred and amortized in the same manner as other deferred policy acquisition costs. In connection with these awards, we recognized and deferred expense as follows:

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
	(In thousands)
Quarterly incentive awards expense deferred	$	1,652	$	2,048	$	3,425	$	3,102
Quarterly incentive awards expense recognized currently	—		269		—		1,111

As of June 30, 2012, all non-employee equity awards were fully vested with the exception of approximately 70,800 shares that vested on July 2, 2012. As such, any related compensation cost not recognized as either expense or deferred acquisition costs in our financial statements as of and through June 30, 2012 is immaterial.

All of our outstanding equity awards are eligible for dividends or dividend equivalents regardless of vesting status.

(10) Commitments and Contingent Liabilities

Effective March 31, 2012, Peach Re entered into a Credit Facility Agreement with Deutsche Bank (the "Credit Facility Agreement") to support certain obligations for a portion of the reserves (commonly referred to as Regulation XXX reserves) related to level premium term life insurance policies ceded to Peach Re from Primerica Life under the Peach Re Coinsurance Agreement. In connection with this transaction, Primerica Life obtained regulatory approval for the payment of an extraordinary dividend of $150.0 million to the Parent Company, which was paid in April 2012.

Under the Credit Facility Agreement, Deutsche Bank issued a letter of credit in the initial amount of $450.0 million with a term of approximately fourteen years (the "LOC") for the benefit of Primerica Life, the direct parent of Peach Re. Subject to certain conditions, the amount of the LOC will be periodically increased up to a maximum amount of $510.0 million in 2014. Pursuant to the terms of the Credit Facility Agreement, in the event amounts are drawn under the LOC by Primerica Life, Peach Re will be obligated, subject to certain limited conditions, to reimburse Deutsche Bank for the amount of any draws and interest thereon. Peach Re has collateralized its obligations to Deutsche Bank by granting it a security interest in all of its assets with the exception of amounts held in a special account established to meet minimum asset thresholds required by state regulatory authorities.

24

In May 2011, we entered into an eight-year agreement with a third party to receive advisory services for our managed accounts product platform. In connection with this agreement, we are obligated to make asset-based fee payments (including minimum monthly payments) based on assets under management (AUM). We have made the minimum monthly payments and recognized expense accordingly of approximately $624,000 during the six months ended June 30, 2012. The minimum fee is approximately $624,000 for the remainder of 2012 and approximately $2.5 million per year in 2013 through 2018 and approximately $1.0 million in 2019. We will continue to recognize these fees as the corresponding advisory services are received.

In late 2011 and in 2012, numerous arbitration claims were filed with the Financial Industry Regulatory Association ("FINRA") against our subsidiary, PFS Investments, Inc. and certain of its registered representatives seeking unspecified damages arising from the allegation that the representatives improperly recommended that the claimants transfer their retirement benefits from the Florida Retirement System's defined benefit plan to its defined contribution plan. In addition, three lawsuits alleging the same claims have been filed against PFS Investments, Inc. and registered representatives and are pending in Palm Beach and Miami-Dade County Circuit Courts. The lawyer representing the claimants in these matters has informed us that he intends to pursue similar claims on behalf of other potential claimants and has engaged in solicitation activities directed to Florida state employees to generate interest in the cases. We believe we have meritorious defenses to the claims, and we intend to vigorously defend against them. We could, however, incur significant costs and liabilities defending and/or resolving these claims, and we are unable at this early stage to assess with confidence what effect, if any, the ultimate resolution of these claims will have on our business, financial position or results of operations.

The Company is involved from time to time in legal disputes, regulatory inquiries and arbitration proceedings in the normal course of business. These disputes are subject to uncertainties, including the large and/or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation. As such, the Company is unable to estimate the possible loss or range of loss that may result from these matters. While it is possible that an adverse outcome in certain cases could have a material adverse effect upon the Company's financial position, based on information currently known by the Company's management, in management's opinion, the outcomes of such pending investigations and legal proceedings are not likely to have such an effect.

(11) Subsequent Events

On August 6, 2012, our Board of Directors authorized a share repurchase program of up to $75.0 million of the Company's common stock. This share repurchase program may be discontinued at any time by the Board of Directors and the Company has no obligation to repurchase any amount of its common stock under the program.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to inform the reader about matters affecting the financial condition and results of operations of Primerica, Inc. (the “Parent Company”) and its subsidiaries (collectively, "we" or the “Company”) for the period from December 31, 2011 to June 30, 2012. As a result, the following discussion should be read in conjunction with MD&A and the consolidated and combined financial statements and notes thereto that are included in our Annual Report on Form 10-K for the year ended December 31, 2011, as modified and updated by our Current Report on Form 8-K filed with the SEC on May 8, 2012 (together, the "2011 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 2011 Annual 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

• Critical Accounting Estimates

• Factors Affecting Our Results

• Results of Operations

• Financial Condition

• Liquidity and Capital Resources

25

Business Overview

We are a leading distributor of financial products to middle income households in the United States and Canada. We assist our clients in meeting their needs for term life insurance, which we underwrite, and mutual funds, annuities and other financial products, which we distribute primarily on behalf of third parties. We have two primary operating segments, Term Life Insurance and Investment and Savings Products, and a third segment, Corporate and Other Distributed Products.

Term Life Insurance. We distribute the term life insurance products that we originate 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”). Our in-force term 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 are guaranteed to remain level during the initial term period (up to a maximum of 20 years in the United States), our claim obligations generally increase as our policyholders age. In addition, we incur significant upfront costs in acquiring new insurance business. Our deferral and amortization of policy acquisition costs and reserving methodology are designed to match the recognition of premium revenues with the timing of policy lapses and the payment of expected claims obligations.

Our Term Life Insurance segment results are primarily driven by sales and policies in force, accuracy of our pricing assumptions, terms and use of reinsurance, investment income, and expenses. In connection with our corporate reorganization in 2010, we entered into certain reinsurance transactions with affiliates of Citigroup Inc. (the "Citi reinsurers") and ceded between 80% and 90% of the risks and rewards of our term life insurance policies that were in force at year-end 2009 (the "Citi reinsurance transactions"). We continue to administer all policies subject to these coinsurance agreements. Subsequent to the Citi reinsurance transactions, the revenues and earnings of our Term Life Insurance segment initially declined in proportion to the amount of revenues and earnings historically associated with the book of term life insurance policies that we ceded to the Citi reinsurers. As we have added new in-force business, our revenues and earnings have grown from these initial levels. With each successive period, we expect revenue and earnings growth to decelerate as the size of our in-force book grows and incremental sales have a reduced marginal effect on the size of the then-existing in-force book.

Investment and Savings Products. We distribute mutual funds, managed accounts, annuities and segregated funds. In the United States, we distribute mutual fund and managed accounts products and variable and fixed annuity products of several third-party companies. In Canada, we offer our own Primerica-branded mutual funds, as well as mutual funds of other companies, and segregated funds, which are underwritten by Primerica Life Canada.

Results in our Investment and Savings Products segment are driven by sales of mutual funds and annuities, the value of assets in client accounts for which we earn ongoing service, distribution and advisory fees and the number of fee generating accounts for which we provide administration functions or retirement plan custodial services. While our investment and savings products all have similar long-term earnings characteristics, our results in a given fiscal period are affected by changes in the overall mix of products within these broad categories.

Corporate and Other Distributed Products. Our Corporate and Other Distributed Products segment consists primarily of revenues and expenses related to other distributed products, including various insurance products, prepaid legal services and a credit information product. These products are distributed pursuant to distribution arrangements with third parties, except for certain life and disability insurance products underwritten by NBLIC, our New York life insurance subsidiary, that are not distributed through our independent agent sales force. In addition, our Corporate and Other Distributed Products segment includes corporate income (including net investment income) and expenses not allocated to other segments, interest expense on our note payable and realized gains and losses on our invested asset portfolio.

Accounting Policy Change. Effective January 1, 2012, we adopted ASU 2010-26, Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts ("ASU 2010-26"), and no longer defer certain indirect acquisition costs or costs attributable to unsuccessful efforts of acquiring life insurance policies. We adopted this accounting policy change retrospectively and, accordingly, our historical results have been adjusted to reflect the adoption on a consistent basis across all periods presented. As a result of this accounting change, we reduced stockholders' equity as of December 31, 2011 by $96.0 million to $1.33 billion. This accounting change also reduced net income by $6.4 million to $37.6 million for the three months ended June 30, 2011 and by $11.6 million to $84.9 million for the six months ended June 30, 2011. As a result of this accounting change, basic earnings per

26

share decreased by $0.08 to $0.50 for the three months ended June 30, 2011 and by $0.16 to $1.12 for the six months ended June 30, 2011 while diluted earnings per share decreased by $0.09 to $0.49 for the three months ended June 30, 2011 and by $0.15 to $1.11 for the six months ended June 30, 2011. For additional information regarding this accounting policy change, see Note 1 to our condensed consolidated financial statements and the Critical Accounting Estimates section below.

Critical Accounting Estimates

We prepare our financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”). These principles are established primarily by the Financial Accounting Standards Board ("FASB"). The preparation of financial statements in conformity with 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 to our consolidated and combined financial statements included in our 2011 Annual Report. The most significant items on the balance sheet are based on fair value determinations, accounting estimates and actuarial determinations which are susceptible to changes in future periods and which 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 the valuation of investments, reinsurance, deferred policy acquisition costs, future policy benefit reserves, and income taxes. 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.

On January 1, 2012, we retrospectively adopted the guidance in ASU 2010-26. During the six months ended June 30, 2012, there have been no changes in the items that we have identified as critical accounting estimates. For additional information regarding critical accounting estimates, see the Critical Accounting Estimates section of MD&A included in our 2011 Annual Report.

Factors Affecting Our Results

Economic Environment.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 a Primerica sales representative offers, which can drive or dampen recruiting. Consumer spending and borrowing levels remain under pressure, as consumers take a more conservative financial posture including reevaluating their savings and debt management plans. The effects of these trends and conditions are discussed in the Results of Operations section below.

Independent Sales Force.Our ability to increase the size of our sales force is largely based on the success of our recruiting efforts and our ability to train and motivate recruits to obtain licenses to sell life insurance. We believe that recruitment levels are an important advance indicator of sales force trends, and growth in recruiting is usually indicative of future growth in the overall size of the sales force. However, because new recruits may obtain the requisite licenses at rates above or below historical levels, recruiting results do not always result in commensurate changes in the size of our licensed sales force.

Details on new recruits and life-licensed sales representative activity were as follows: 

	Three months ended June 30,		Six months ended June 30,
	2012	2011	2012	2011
New recruits	48,976	65,138	107,527	117,951
New life-licensed sales representatives	9,786	8,061	17,436	15,206

Recruiting of new representatives decreased for the three and six months ended June 30, 2012 compared with the same periods a year ago. The decrease is largely attributable to strong prior year recruiting as a result of short-term incentives announced at our June 2011 biennial sales force convention. However, new life licenses grew in both the three and six months ended June 30, 2012 versus the comparable periods in 2011. The increase in new life licenses was driven by our efforts to balance the emphasis on recruiting and licensing in both our messaging and

27

incentive programs. Results were also driven by the introduction of streamlined life-licensing processes for new recruits.

The size of our life-licensed insurance sales force was as follows: 

	June 30,	March 31,	December 31,
	2012	2012	2011
Life-licensed insurance sales representatives	90,868	89,651	91,176

The size of our life-licensed insurance sales force at June 30, 2012 was down slightly from December 31, 2011, but increased from March 31, 2012 as a result of new representative life-licensing discussed above.

Term Life Insurance Segment.Our Term Life Insurance segment results are primarily driven by sales volumes, the accuracy of our pricing assumptions, terms and use of reinsurance, investment income and expenses.

Sales and policies in force. Sales of new 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 and eligible acquisition expenses are deferred and amortized ratably with the level premiums of the underlying policies. 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 will have a more immediate effect on our cash flows.

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 our individual sales representatives remains within a relatively narrow range and, consequently, our sales volume over the longer term generally correlates to the size of our sales force.

The average number of life-licensed 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 sales representative, were as follows: 

	Three months ended June 30,		Six months ended June 30,
	2012	2011	2012	2011
Average number of life-licensed sales representatives	90,461	91,457	90,329	92,231
Number of new policies issued	60,583	59,826	116,728	111,107
Average monthly rate of new policies issued per life-licensed sales representative	.22x	.22x	.22x	.20x

Pricing assumptions. Our pricing methodology is intended to provide us with appropriate profit margins for the risks we assume. We determine pricing classifications based on the coverage sought, such as the size and term of the policy, and certain policyholder attributes, such as age and health. In addition, we utilize unisex rates for our term life insurance policies. The pricing assumptions that underlie our rates are based upon our best estimates of mortality, persistency and investment yields at the time of issuance, sales force commission rates, issue and underwriting expenses, operating expenses and the characteristics of the insureds, including sex, age, underwriting class, product and amount of coverage. Our results will be affected to the extent there is a variance between our pricing assumptions and actual experience.

• Persistency. Persistency is a measure of how long our insurance policies stay in force. As a general matter, persistency that is lower than our pricing assumptions adversely affects our results over the long term because we lose the recurring revenue stream associated with the policies that lapse. Determining the near-term effects of changes in persistency is more complicated. When persistency is lower than our pricing assumptions, we must accelerate the amortization of DAC. The resultant increase in amortization expense is offset by a corresponding release of reserves associated with lapsed policies, which causes a reduction in benefits and claims expense. The reserves associated with any given policy will change over the term of such policy. As a general matter, reserves are lowest at the inception of a policy term and rise steadily to a peak before declining to zero at the expiration of the policy term. Accordingly, depending on when the lapse occurs in relation to the overall policy term, the reduction in benefits and claims expense may be greater or less than the increase in amortization expense and, consequently, the effects on

28

earnings for a given period could be positive or negative. Persistency levels will impact results to the extent actual experience deviates from the persistency assumptions used to price our products.

• Mortality. Our profitability is affected to the extent actual mortality rates differ from those used in our pricing assumptions. We mitigate a significant portion of our mortality exposure through reinsurance. Variances between actual mortality experience and the assumptions and estimates used by our reinsurers affect the cost and potentially the availability of reinsurance.

• Investment Yields. For policies issued prior to 2010, we used a level investment yield rate which reflects yields available at that time. For policies issued in 2010 and after, we have been using an increasing interest rate assumption to reflect the historically low interest rate environment. Both DAC and the reserve liability increase with the assumed investment yield rate. Since DAC is higher than the reserve liability in the early years of a policy, a lower assumed investment yield generally will result in lower profits. In the later years, when the reserve liability is higher than DAC, a lower assumed investment yield generally will result in higher profits. These assumed investment yields, which like other pricing assumptions are locked in at issue, impact the timing but not the aggregate amount of DAC and reserve changes. Actual investment yields will impact net investment income allocated to the Term Life Insurance segment, but will not impact DAC or the reserve liability.

Reinsurance. We use reinsurance extensively, which has a significant effect on our results of operations. Since the mid-1990s, we have reinsured between 60% and 90% of the mortality risk on our U.S. term life insurance policies on a quota share yearly renewable term ("YRT") basis. In Canada, we previously utilized reinsurance arrangements similar to the U.S. in certain years and reinsured only face amounts above $500,000 in other years. However, in the first quarter of 2012, we entered into a YRT reinsurance arrangement in Canada similar to our U.S. program that reinsures 80% of the face amount for every policy sold. YRT reinsurance permits us to set future mortality at contractual rates by policy class. 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.

The effect of our reinsurance arrangements on ceded premiums and benefits and expenses on our statement 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. Coinsurance also reduces the change in future policy benefit reserves in direct proportion to the percentage ceded while YRT reinsurance does not significantly impact benefit reserves.

• Amortization of DAC. Amortization of DAC is reduced on a pro-rata basis for the coinsured business, including the business reinsured with Citi. There is no impact on amortization of DAC associated with our YRT contracts.

• Insurance expenses. Insurance expenses are reduced by the allowances received from coinsurance, including the business reinsured with Citi. 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. mortality risk on new business and approximately 80% of our Canadian mortality risk on new business.

Net investment income. Term Life Insurance segment net investment income is composed of two elements: allocated net investment income and the market return associated with the deposit asset underlying the 10%

29

reinsurance agreement we executed in connection with our corporate reorganization. Invested assets are allocated to the Term Life segment based on the book value of the invested assets necessary to meet statutory reserve requirements and our targeted capital objectives. Net investment income is also impacted by the performance of our invested asset portfolio and the market return on the deposit asset which can be affected by interest rates, credit spreads and the mix of invested assets.

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

Investment and Savings Products Segment. Our Investment and Savings Products segment results are primarily driven by sales, the value of assets in client accounts for which we earn ongoing management, service and distribution fees and the number of fee generating accounts we administer.

Sales. We earn commissions and fees, such as dealer re-allowances, and marketing and support fees, based on sales of mutual fund and managed account products and annuities. 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 our sales force. We generally experience seasonality in our 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 our 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, that 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 fees on assets in the managed accounts program. In Canada, we earn management fees on certain mutual fund assets and 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.

Accounts. We earn recordkeeping fees for administrative functions we perform on behalf of several of our retail and managed mutual fund providers and custodial fees for services as a non-bank custodian for certain of our clients’ retirement plan accounts.

Sales mix. While our investment and savings products all have similar long-term earnings characteristics, our results in a given fiscal period will be affected by changes in the overall mix of products within these broad categories. Examples of changes in the sales mix that influence our results include the following:

• sales of a higher proportion of mutual fund products of the several mutual fund families for which we act as recordkeeper will generally increase our earnings because we are entitled to recordkeeping fees on these accounts;

• 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 accounts and segregated funds, no upfront revenues;

• sales and administration of a higher proportion of mutual funds that enable us to earn marketing and support fees will increase our revenues and profitability;

• sales of a higher proportion of retirement products of several mutual fund families will tend to result in higher revenue generation due to our ability to earn custodial fees on these accounts; and

• sales of a higher proportion of managed accounts and segregated funds products will generally extend the time over which revenues can be earned because we are entitled to higher revenues based on assets under management for these accounts in lieu of upfront revenues.

Corporate and Other Distributed Products Segment.We earn revenues and pay commissions and referral fees for various other insurance products, prepaid legal services and other financial products, all of which are originated by third parties. NBLIC also underwrites a mail-order student life policy and a short-term disability benefit policy, neither of which is distributed by our sales force, and has in-force policies from several discontinued lines of insurance.

30

The Corporate and Other Distributed Products segment is affected by corporate income and expenses not allocated to our other segments, net investment income (other than net investment income allocated to our Term Life Insurance segment), general and administrative expenses (other than expenses that are allocated to our Term Life Insurance or Investment and Savings Products segments), equity awards granted to management and our sales force leaders at the time of our initial public offering, interest expense on notes payable and realized gains and losses on our invested asset portfolio.

Capital Structure. Our financial results have also been affected by changes in our capital structure that have occurred since our corporate reorganization in 2010.

Share repurchases and related financing arrangements. Effective March 31, 2012, Peach Re, Inc. ("Peach Re"), a special purpose financial captive insurance company and wholly owned subsidiary of Primerica Life, entered into a Credit Facility Agreement with Deutsche Bank (the "Credit Facility Agreement") to support certain obligations for a portion of the reserves (commonly referred to as Regulation XXX reserves) related to level premium term life insurance policies ceded to Peach Re from Primerica Life under the Peach Re Coinsurance Agreement. In connection with this transaction, Primerica Life obtained regulatory approval for the payment of an extraordinary dividend of $150.0 million to the Parent Company, which was paid in April 2012. The dividend was primarily funded by the sale of invested assets, and the proceeds were used to repurchase approximately 5.7 million shares of our common stock from private equity funds managed by Warburg Pincus LLC ("Warburg Pincus") for approximately $150.0 million in April 2012. In addition, we repurchased approximately 8.9 million shares of our common stock from Citi for approximately $200.0 million in November 2011 primarily using the proceeds from invested asset sales. We retired the common stock repurchased in each transaction, providing an accretive impact on earnings per share. The sales of invested assets used to fund the repurchases results in lower net investment income in periods following the sales.

Notes payable. In April 2010, we issued a $300.0 million note to Citi as part of our corporate reorganization (the "Citi note"). We paid interest on the Citi note at an annual rate of 5.5%. On July 16, 2012, we repaid the Citi note with a portion of the proceeds received from the issuance of senior notes with an aggregate principal amount of $375.0 million (the "Senior Notes"). We issued the Senior Notes at a price of 99.843% of the principal amount. The Senior Notes bear interest at an annual rate of 4.750%. We anticipate using the remaining proceeds for general corporate purposes, including share repurchases.

Future interest expense will be higher as the increase in the outstanding principal balance more than offsets the decrease in the stated interest rate.

31

Results of Operations

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

	Three months ended June 30,						Change					Six months ended June 30,						Change
	2012			2011			$			%		2012			2011			$			%
	(Dollars in thousands)
Revenues:
Direct premiums	$	570,073		$	560,881		$	9,192		2	%	$	1,131,110		$	1,112,950		$	18,160		2	%
Ceded premiums	(415,815		)	(435,564		)	(19,749		)	(5	)%	(833,978		)	(857,802		)	(23,824		)	(3	)%
Net premiums	154,258			125,317			28,941			23	%	297,132			255,148			41,984			16	%
Commissions and fees	106,761			108,698			(1,937		)	(2	)%	210,666			214,814			(4,148		)	(2	)%
Net investment income	23,605			27,229			(3,624		)	(13	)%	49,702			55,855			(6,153		)	(11	)%
Realized investment gains, including OTTI losses	4,321			2,035			2,286			*		6,452			2,362			4,090			*
Other, net	11,580			11,816			(236		)	(2	)%	23,174			23,268			(94		)	*
Total revenues	300,525			275,095			25,430			9	%	587,126			551,447			35,679			6	%
Benefits and expenses:
Benefits and claims	68,925			57,272			11,653			20	%	136,858			114,907			21,951			19	%
Amortization of DAC	28,205			23,975			4,230			18	%	54,736			47,204			7,532			16	%
Sales commissions	51,475			50,273			1,202			2	%	101,192			100,711			481			*
Insurance expenses	24,589			26,988			(2,399		)	(9	)%	47,033			42,786			4,247			10	%
Insurance commissions	6,458			9,534			(3,076		)	(32	)%	14,954			18,532			(3,578		)	(19	)%
Interest expense	8,506			6,998			1,508			22	%	15,416			13,995			1,421			10	%
Other operating expenses	40,446			41,590			(1,144		)	(3	)%	81,551			81,591			(40		)	*
Total benefits and expenses	228,604			216,630			11,974			6	%	451,740			419,726			32,014			8	%
Income before income taxes	71,921			58,465			13,456			23	%	135,386			131,721			3,665			3	%
Income taxes	25,741			20,845			4,896			23	%	47,450			46,830			620			1	%
Net income	$	46,180		$	37,620		$	8,560		23	%	$	87,936		$	84,891		$	3,045		4	%

____________________

* Less than 1% or not meaningful

Results for the Three and Six Months Ended June 30, 2012 and 2011

Total revenues. Growth in revenues primarily was attributable to incremental premiums on term life insurance policies issued subsequent to the Citi reinsurance transactions ("New Term"), which was partially offset by lower net investment income resulting from sales of invested assets to facilitate our $200.0 million and $150.0 million share repurchase transactions in November 2011 and April 2012, respectively. Realized investment gains were higher during 2012 as we sold invested assets to provide a portion of the funds used for the April 2012 share repurchase.

Total benefits and expenses.Total benefits and expenses increased in 2012 primarily as a result of the growth in premium-related expenses. This increase was partially offset by declines in insurance commissions and expenses reflecting higher deferrals of commissions consistent with incentive program changes as well as prior-year new product launch and convention-related expenses.

Income taxes. Our effective income tax rate of 35.8% during the three months ended June 30, 2012 was consistent with our effective income tax rate of 35.7% during the three months ended June 30, 2011. For the six months ended June 30, 2012, our effective income tax rate was 35.1%, compared with 35.6% for the six months ended June 30, 2011. The decrease in our effective income tax rate during the six months ended June 30, 2012 versus the comparable period in 2011 is primarily due to a lower effective Canadian tax rate in the first quarter of 2012.

For additional information, see the Segment Results discussions below.

32

Segment Results

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

	Three months ended June 30,						Change					Six months ended June 30,						Change
	2012			2011			$			%		2012			2011			$			%
	(Dollars in thousands)
Revenues:
Direct premiums	$	550,330		$	540,283		$	10,047		2	%	$	1,092,487		$	1,072,450		$	20,037		2	%
Ceded premiums	(412,038		)	(431,891		)	(19,853		)	(5	)%	(826,597		)	(850,544		)	(23,947		)	(3	)%
Net premiums	138,292			108,392			29,900			28	%	265,890			221,906			43,984			20	%
Allocated net investment income	16,685			15,669			1,016			6	%	33,345			31,463			1,882			6	%
Other, net	7,755			7,580			175			2	%	15,301			15,234			67			*
Total revenues	162,732			131,641			31,091			24	%	314,536			268,603			45,933			17	%
Benefits and expenses:
Benefits and claims	59,984			43,921			16,063			37	%	117,493			91,272			26,221			29	%
Amortization of DAC	22,547			19,894			2,653			13	%	46,480			40,021			6,459			16	%
Insurance commissions	2,314			5,320			(3,006		)	(57	)%	5,891			9,383			(3,492		)	(37	)%
Insurance expenses	21,782			23,607			(1,825		)	(8	)%	41,499			36,440			5,059			14	%
Interest expense	4,381			2,873			1,508			52	%	7,166			5,745			1,421			25	%
Total benefits and expenses	111,008			95,615			15,393			16	%	218,529			182,861			35,668			20	%
Income before income taxes	$	51,724		$	36,026		$	15,698		44	%	$	96,007		$	85,742		$	10,265		12	%

____________________

* Less than 1%

Results for the Three Months Ended June 30, 2012 and 2011

Net premiums. The increase in net premiums is primarily the result of growth in New Term and the corresponding impact of ceded premiums.  While ceded premiums supporting YRT reinsurance programs for New Term are less than 20% of direct premiums, ceded premiums for the block of business coinsured by Citi are more than 80% of direct premiums.  As a result, as we continue to build New Term and the block coinsured by Citi continues to run-off, net premiums will grow much faster than direct premiums. The remaining increase in net premiums was largely attributable to reprocessed reinsurance transactions. Over the normal course of business, we reprocess a small portion of our reinsurance transactions that are either misprocessed or intentionally not processed on an automated basis due to system constraints. During the three months ended June 30, 2012, the reprocessing of certain transactions resulted in an increase in net premiums that was substantially offset by a corresponding increase in benefits and claims. Persistency was consistent with the prior-year period.

Benefits and claims. Benefits and claims increased primarily due to the growth in net premiums and the reprocessing of certain transactions noted above. Incurred claims experience was consistent with the prior-year period.

Amortization of DAC. The continued growth in New Term combined with the impact of seasonally strong persistency resulted in DAC amortization increasing at a lower rate than net premiums.

Insurance commissions. The decrease in insurance commissions was largely driven by changes to our agent incentive programs that resulted in a higher portion of commissions being deferred in 2012.

Insurance expenses. Insurance expenses were lower primarily as a result of initiatives associated with the biennial sales force convention that occurred in June 2011. Results during the three months ended June 30, 2011 included expenses from new product launches and recruiting-related initiatives.

Interest expense. Interest expense increased primarily due to the redundant reserve financing executed in March 2012.

33

Results for the Six Months Ended June 30, 2012 and 2011

Net premiums. Net premium growth was primarily driven by the factors impacting net premiums as discussed above in the three-month comparison. The increase was partially offset by the impact of approximately $8.7 million of ceded premium recoveries for post-issue underwriting class upgrades recognized in the first quarter of 2011.

Benefits and claims. The increase in benefits and claims was mainly attributable to the factors discussed above in the three-month comparison.

Amortization of DAC. The increase in amortization of DAC was consistent with the increase discussed above in the three-month comparison.

Insurance expenses.  Insurance expenses increased in 2012 as higher premium-related taxes, licenses and fees and the run-off of expense allowances received under the Citi reinsurance agreements combined with prior-year favorable expense items including the release of management incentive compensation accruals. The impact of these factors were partially offset by the 2011 convention-related expenses discussed above.

Insurance commissions. The decrease in insurance commissions was primarily driven by changes to our agent incentive program discussed above in the three-month comparison.

Interest expense. The increase in interest expense was largely attributable to the redundant reserve financing as noted in the three-month comparison above.

Product Sales and Face Amount In Force

New policy sales activity was as follows: 

	Three months ended June 30,		Six months ended June 30,
	2012	2011	2012	2011
New policies issued	60,583	59,826	116,728	111,107

Higher sales of our term life insurance products primarily reflect an increase in the percentage of applications successfully issued. This increase is largely attributable to TermNow, our new rapid-issue term life insurance product, which was introduced in the third quarter of 2011. The average face amount of policies issued during the second quarter of 2012 was approximately $244,200, compared with approximately $257,800 in the second quarter of 2011. The decrease in average face amount was largely driven by higher sales of TermNow policies, which are issued at face amounts of $250,000 and below.

34

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

	Three months ended June 30,						Change					Six months ended June 30,						Change
	2012			2011			$			%		2012			2011			$			%
	(Dollars in millions)
Face amount in force, beginning of period	$	664,423		$	658,523		$	5,900		*		$	664,955		$	656,791		$	8,164		1	%
Issued face amount	18,307			18,974			(667		)	(4	)%	35,290			35,709			(419		)	(1	)%
Terminations	(14,322		)	(14,724		)	(402		)	(3	)%	(30,629		)	(31,971		)	(1,342		)	(4	)%
Foreign currency	(384		)	843			(1,227		)	*		(1,592		)	3,087			(4,679		)	*
Face amount in force, end of period	$	668,024		$	663,616		$	4,408		*		$	668,024		$	663,616		$	4,408		*

____________________

* Less than 1% or not meaningful

Issued face amount decreased during 2012 as the lower average size of policies issued was partially offset by higher policy sales of TermNow. Terminations decreased in 2012 as a result of higher persistency.

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

	Three months ended June 30,				Change					Six months ended June 30,				Change
	2012		2011		$			%		2012		2011		$			%
	(Dollars in thousands)
Revenues:
Commissions and fees:
Sales-based revenues	$	47,269	$	44,904	$	2,365		5	%	$	91,736	$	88,032	$	3,704		4	%
Asset-based revenues	43,750		45,348		(1,598		)	(4	)%	87,472		90,173		(2,701		)	(3	)%
Account-based revenues	9,494		11,811		(2,317		)	(20	)%	18,867		22,243		(3,376		)	(15	)%
Other, net	2,454		2,523		(69		)	(3	)%	5,026		4,984		42			1	%
Total revenues	102,967		104,586		(1,619		)	(2	)%	203,101		205,432		(2,331		)	(1	)%
Expenses:
Amortization of DAC	2,880		3,751		(871		)	(23	)%	6,103		6,536		(433		)	(7	)%
Insurance commissions	2,252		2,344		(92		)	(4	)%	4,401		4,484		(83		)	(2	)%
Sales commissions:
Sales-based	33,285		31,390		1,895			6	%	64,885		61,943		2,942			5	%
Asset-based	15,032		15,111		(79		)	(1	)%	29,777		30,562		(785		)	(3	)%
Other operating expenses	20,074		21,520		(1,446		)	(7	)%	39,621		40,398		(777		)	(2	)%
Total expenses	73,523		74,116		(593		)	(1	)%	144,787		143,923		864			1	%
Income before income taxes	$	29,444	$	30,470	$	(1,026	)	(3	)%	$	58,314	$	61,509	$	(3,195	)	(5	)%

35

Supplemental information on the underlying metrics that drove results follows.

	Three months ended June 30,				Change					Six months ended June 30,				Change
	2012		2011		$			%		2012		2011		$			%
	(Dollars in millions and accounts in thousands)
Product sales:
Retail mutual funds	$	590	$	604	$	(14	)	(2	)%	$	1,202	$	1,249	$	(47	)	(4	)%
Annuities and other	500		458		42			9	%	929		803		126			16	%
Total sales-based revenue generating product sales	1,090		1,062		28			3	%	2,131		2,052		79			4	%
Managed accounts	40		—		40			*		63		—		63			*
Segregated funds and other	64		74		(10		)	(14	)%	188		197		(9		)	(5	)%
Total product sales	$	1,194	$	1,136	$	58		5	%	$	2,382	$	2,249	$	133		6	%
Average client asset values:
Retail mutual funds	$	23,724	$	25,330	$	(1,606	)	(6	)%	$	23,709	$	25,106	$	(1,397	)	(6	)%
Annuities and other	8,972		8,588		384			4	%	8,845		8,415		430			5	%
Managed accounts	326		—		326			*		269		—		269			*
Segregated funds	2,527		2,545		(18		)	(1	)%	2,513		2,511		2			*
Total average client asset values	$	35,549	$	36,463	$	(914	)	(3	)%	$	35,336	$	36,032	$	(696	)	(2	)%
Average number of fee-generating accounts:
Recordkeeping accounts	2,583		2,611		(28		)	(1	)%	2,585		2,638		(53		)	(2	)%
Custodial accounts	1,948		1,940		8			*		1,947		1,953		(6		)	*

_____________________

* Not meaningful or less than 1%

Results for the Three Months Ended June 30, 2012 and 2011

Total revenues. The decrease in commissions and fees in 2012 was largely driven by lower average client asset values as well as a recordkeeping fee structure change that had a corresponding decrease to other operating expenses. These factors were partially offset by higher sales of annuity products. Lower asset-based revenues from the decline in average client asset values primarily reflected market conditions while the higher product sales were driven by new offerings of fixed-indexed annuities. While the distribution of managed accounts does not generate upfront sales-based revenues, it will contribute ongoing asset-based revenues in future periods.

Amortization of DAC. The decrease in DAC amortization on our Canadian Segregated Funds products in 2012 resulted from market returns in the invested assets underlying Canadian Segregated Funds that showed some improvement from the market losses experienced in the prior-year period.

Sales commissions. The increase in sales-based commissions in 2012 was consistent with the increase in sales-based revenue and primarily resulted from the increase in annuity sales.

Other operating expenses. Other operating expenses decreased primarily due to the impact of the recordkeeping fee structure change, which was offset by a corresponding revenue decrease with no net impact on income before income taxes.

Results for the Six Months Ended June 30, 2012 and 2011

Total revenues. The decline in commissions and fees was primarily driven by the factors discussed in the three-month comparison above. Partially offsetting the decline for the six-month period was an increase in sales from internal exchanges of variable annuities in the first quarter of 2012 versus the same period in 2011.

Amortization of DAC. The decrease in DAC amortization was primarily due to the impact from market returns in the invested assets underlying Canadian Segregated Funds in the second quarter of 2012 as noted above in the three-

36

month comparison.

Sales commissions. Sales-based commissions increased mainly due to the increases in annuity sales noted above.

Other operating expenses. The decline in operating expenses during the six months ended June 30, 2012 was largely attributable to the impact of the recordkeeping fee structure change noted above. This impact was partially offset by higher new product offering expenses in 2012 combined with the impact of the prior-year release of management incentive compensation accruals.

Asset Values in Client Accounts

Changes in asset values in client accounts were as follows:

	Three months ended June 30,						Change					Six months ended June 30,						Change
	2012			2011			$			%		2012			2011			$			%
	(Dollars in millions)
Asset values, beginning of period	$	36,279		$	36,187		$	92		*		$	33,664		$	34,869		$	(1,205	)	(3	)%
Inflows	1,194			1,136			58			5	%	2,382			2,249			133			6	%
Redemptions	(1,144		)	(1,118		)	26			2	%	(2,377		)	(2,201		)	176			8	%
Change in market value, net and other	(1,043		)	(185		)	858			*		1,617			1,102			515			47	%
Asset values, end of period	$	35,286		$	36,020		$	(734	)	(2	)%	$	35,286		$	36,019		$	(733	)	(2	)%

____________________

* Less than 1% or not meaningful

The growth in inflows was consistent with the increase in sales volume for both the quarter-to-date and year-to-date periods. However, internal exchanges for variable annuities are also included in redemptions. As a result, redemptions were also higher during the six months ended June 30, 2012. For the three months ended June 30, 2012, redemptions did not increase at the same rate as the six-month period as internal exchanges were consistent in the second quarters of 2012 and 2011.

37

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

	Three months ended June 30,						Change					Six months ended June 30,						Change
	2012			2011			$			%		2012			2011			$			%
	(Dollars in thousands)
Revenues:
Direct premiums	$	19,743		$	20,597		$	(854	)	(4	)%	$	38,623		$	40,499		$	(1,876	)	(5	)%
Ceded premiums	(3,777		)	(3,674		)	103			3	%	(7,381		)	(7,259		)	122			2	%
Net premiums	15,966			16,923			(957		)	(6	)%	31,242			33,240			(1,998		)	(6	)%
Commissions and fees	6,248			6,635			(387		)	(6	)%	12,591			14,366			(1,775		)	(12	)%
Allocated net investment income	6,920			11,560			(4,640		)	(40	)%	16,357			24,392			(8,035		)	(33	)%
Realized investment gains, including OTTI losses	4,321			2,035			2,286			*		6,452			2,362			4,090			*
Other, net	1,371			1,715			(344		)	(20	)%	2,847			3,052			(205		)	(7	)%
Total revenues	34,826			38,868			(4,042		)	(10	)%	69,489			77,412			(7,923		)	(10	)%
Benefits and expenses:
Benefits and claims	8,941			13,352			(4,411		)	(33	)%	19,365			23,636			(4,271		)	(18	)%
Amortization of DAC	2,778			330			2,448			*		2,153			647			1,506			*
Insurance commissions	1,892			1,870			22			1	%	4,662			4,664			(2		)	*
Insurance expenses	2,807			3,381			(574		)	(17	)%	5,534			6,346			(812		)	(13	)%
Sales commissions	3,158			3,772			(614		)	(16	)%	6,530			8,206			(1,676		)	(20	)%
Interest expense	4,125			4,125			—			*		8,250			8,250			—			*
Other operating expenses	20,372			20,069			303			2	%	41,930			41,193			737			2	%
Total benefits and expenses	44,073			46,899			(2,826		)	(6	)%	88,424			92,942			(4,518		)	(5	)%
Loss before income taxes	$	(9,247	)	$	(8,031	)	$	1,216		15	%	$	(18,935	)	$	(15,530	)	$	3,405		22	%

 ____________________ 

* Less than 1% or not meaningful

Results for the Three Months Ended June 30, 2012 and 2011

Total revenues. Total revenues decreased in 2012 primarily due to lower net investment income from a lower base of invested assets subsequent to share repurchases in November 2011 and April 2012. The decline also resulted from the termination of our loan business and a decline in our short-term disability product line primarily due to an increase in terminations concurrent with a premium rate increase in the beginning of 2012. These decreases were partially offset by realized investment gains from the invested assets sold in conjunction with the April 2012 share repurchase.

Total benefits and expenses. The decline in benefits and claims was largely attributable to lower claims on short-term disability products and refinements in our policy estimates for student life insurance products underwritten by NBLIC. Partially offsetting this decrease was higher DAC amortization associated with the refinements in policy estimates for the student life products.

Results for the Six Months Ended June 30, 2012 and 2011

Total revenues. The decrease in total revenues was largely attributable to the factors discussed in the three-month comparison above.

Total benefits and expenses. The decline in total benefits and expenses was primarily driven by the items noted in the three-month comparison above.

38

Financial Condition

Investments.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. 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, sector limits, credit quality limits, portfolio duration, limits on the amount of investments in approved countries and permissible security types. 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.

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 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 could result in significant losses, realized or unrealized, in the value of our invested asset portfolio.

The composition and duration of our portfolio will vary depending on several factors, including the yield curve and our opinion of the relative value among various asset classes. The average rating and average approximate duration of our fixed-maturity portfolio were as follows:

	June 30, 2012	December 31, 2011
Average rating of our fixed-maturity portfolio	A	A
Average duration of our fixed-maturity portfolio	3.6 years	3.5 years
Average book yield of our fixed-maturity portfolio	5.48%	5.52%

The distribution of our investments in fixed-maturity securities by rating follows.

	June 30, 2012			December 31, 2011
	Amortized cost		%	Amortized cost		%
	(Dollars in thousands)
AAA	$	358,513	21%	$	428,748	24%
AA	128,994		8%	150,894		8%
A	396,068		23%	431,175		24%
BBB	699,906		41%	683,818		38%
Below investment grade	108,448		6%	125,594		7%
Not rated	885		*	770		*
Total (1)	$	1,692,814	100%	$	1,820,999	100%

____________________

* Less than 1%

(1) Totals may not add due to rounding.

39

The ten largest holdings within our invested asset portfolio were as follows:

	June 30, 2012
Issuer	Cost or amortized cost			Fair  value			Unrealized gain		Credit rating
	(Dollars in thousands)
Government of Canada	$	29,976		$	32,700		$	2,724	AAA
General Electric Co	12,762			14,295			1,533		AA+
Verizon Communications Inc	11,498			13,003			1,505		A-
Bank of America Corp	11,678			12,511			833		A-
Province of Ontario Canada	9,177			11,246			2,069		AA-
Iberdrola SA	9,441			10,572			1,131		BBB+
National Rural Utilities Cooperative	7,185			10,369			3,184		A+
ProLogis Inc	9,413			10,309			896		BBB-
Time Warner Cable Inc	9,120			9,417			297		BBB
Altria Group Inc	7,417			9,282			1,865		BBB
Total – ten largest holdings	$	117,667		$	133,704		$	16,037
Total – fixed-maturity and equity securities	$	1,717,847		$	1,884,578
Percent of total fixed-maturity and equity securities	7		%	7		%

Sales of invested assets to fund our April 2012 repurchase of $150.0 million of our common stock did not result in meaningful changes to asset mix, duration or overall credit quality of our invested asset portfolio. However, it did reduce our consolidated cash and invested assets and, as a result, net investment income. Our average book yield at June 30, 2012 decreased modestly from December 31, 2012, reflecting the replacement of higher-yield invested asset maturities with lower-yield invested asset acquisitions available in the current interest rate environment. The decrease in the average book yield was partially offset as the investments sold to fund the repurchase generally had yields that were lower than the average book yield on the invested assets portfolio before the repurchase.

For additional information on our invested asset portfolio, see Note 3 to our condensed consolidated financial statements.

Liquidity and Capital Resources

Dividends and other payments to us from our subsidiaries are our principal sources of cash. Our primary uses of funds by the Parent Company include the payment of general operating expenses, the payment of dividends and the payment of interest to noteholders. At June 30, 2012, the Parent Company had cash and invested assets of approximately $63.9 million.

The liquidity requirements of our subsidiaries principally relate to the liabilities associated with their distribution and underwriting of insurance products (including the payment of claims), distribution of investment and savings products, operating expenses, income taxes and the payment of dividends. Historically, our insurance subsidiaries have used cash flow from operations associated with our in-force book of term life insurance to fund their liquidity requirements. Our insurance subsidiaries’ principal cash inflows from operating activities are derived from policyholder premiums and investment income earned on invested assets that support our statutory capital and reserves. We also derive cash inflows from the distribution of investment and savings products and other products. Our principal outflows relate to payments for ceded premiums and benefits and claims. The principal cash inflows from investment activities result from repayments of principal and investment income, while the principal outflows relate to purchases of fixed-maturity securities. We typically hold cash sufficient to fund operating flows, and invest any excess cash.

Our distribution and underwriting of term life insurance place significant demands on our liquidity, particularly when we experience growth. We pay a substantial majority of the sales commission during the first year following the sale of a policy. Our underwriting activities also require significant cash outflows at the inception of a policy’s term. However, we anticipate that cash flows from our businesses, including our existing block of term life policies and our investment and savings products, will continue to provide us with sufficient liquidity to meet our operating requirements.

In April 2012, we completed the repurchase of approximately 5.7 million shares of our common stock beneficially

40

owned by Warburg Pincus for a total purchase price of approximately $150.0 million. For additional information, see Note 7 to our condensed consolidated financial statements.

We may seek to enhance our liquidity position or capital structure through borrowings from third-party sources, sales of debt or equity securities, reserve financings or some combination of these sources.

Cash Flows.Cash flows from operating activities are affected primarily by the timing of premiums received, commissions and fees received, benefits paid, commissions paid to sales representatives, administrative and selling expenses, investment income, and cash taxes. Our principal source of cash historically has been premiums received on term life insurance policies in force.

We typically generate positive cash flows from operating activities, as premiums, net investment income, commissions and fees collected from our insurance and investment and savings products exceed benefits, commissions and operating expenses paid, and we invest the excess.

The components of the change in cash and cash equivalents were as follows:

	Six months ended June 30,						Change
	2012			2011			$
	(In thousands)
Net cash provided by (used in) operating activities	$	12,809		$	(6,200	)	$	19,009
Net cash provided by (used in) investing activities	126,748			2,660			124,088
Net cash provided by (used in) financing activities	(165,983		)	(7,137		)	(158,846		)
Effect of foreign exchange rate changes on cash	(1,590		)	(1,310		)	(280		)
Change in cash and cash equivalents	$	(28,016	)	$	(11,987	)	$	(16,029	)

Operating Activities.The change in operating cash flows compared with the prior-year period was primarily driven by the increase in reserves for future policy benefits and other policy liabilities partially offset by the timing of payments due to reinsurers in our Term Life business.

Investing Activities. The increase in investing cash flows as compared to the same period a year ago was primarily driven by proceeds from the sale of invested assets to fund the share repurchase from Warburg Pincus in April 2012.

Financing Activities. The increase in net cash used in financing activities was due to the share repurchase from Warburg Pincus and higher quarterly cash dividends in 2012.

Notes Payable. In April 2010, we issued a $300.0 million note to Citi as part of our corporate reorganization. We were in compliance with the covenants of the Citi note at June 30, 2012. No events of default or defaults occurred during the six months ended June 30, 2012.

On July 16, 2012, we issued $375.0 million in principal amount of the Senior Notes and used a portion of the net cash proceeds to repay the Citi note in whole at a redemption price equal to 100% of the outstanding principal amount plus accrued and unpaid interest as of that date. We intend to use the remainder of the net cash proceeds for general corporate purposes, including share repurchases.

We issued the Senior Notes at a price of 99.843% and an annual rate of 4.750% and interest of approximately $8.9 million is paid semi-annually on January 15 and July 15, commencing on January 15, 2013. The term of the Senior Notes ends on July 15, 2022 with a principal payment of $375.0 million due upon maturity. For additional information, see Note 6 to our condensed consolidated financial statements.

We calculate our debt-to-capital ratio by dividing total long-term debt by the sum of stockholders’ equity and total long-term debt. As of June 30, 2012, our debt-to-capital ratio was 19.0%. If the issuance of the Senior Notes and the repayment of the Citi note had both been completed as of June 30, 2012, our debt-to-capital ratio would have been 22.7%.

Rating Agencies.There have been no changes to Primerica, Inc.'s senior debt ratings or Primerica Life's financial strength ratings since December 31, 2011.

Risk-Based Capital.The NAIC has established risk-based capital (“RBC”) standards for U.S. life insurers, as well

41

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 reserve items. The formula is an early warning tool to identify possible weakly capitalized companies for purposes of initiating further regulatory action.

As of June 30, 2012, our U.S. life insurance subsidiaries had statutory capital substantially in excess of the applicable statutory requirements to support existing operations and to fund future growth.

In Canada, an insurer’s minimum capital requirement is overseen by the Office of the Superintendent of Financial Institutions Canada (“OSFI”) and determined as the sum of the capital requirements for five categories of risk: asset default risk; mortality/morbidity/lapse risks; changes in interest rate environment risk; segregated funds risk and foreign exchange risk. Primerica Life Canada is in compliance with Canada’s minimum capital requirements as of June 30, 2012, as determined by OSFI.

Short-term Borrowings.We had no short-term borrowings as of or during the six months endedJune 30, 2012.

Off-Balance Sheet Arrangements.Effective March 31, 2012, Peach Re entered into the Credit Facility Agreement with Deutsche Bank. Under the Credit Facility Agreement, a letter of credit ("LOC") was issued to support certain obligations of Peach Re for a portion of reserves (commonly referred to as Regulation XXX reserves) related to level premium term life insurance policies ceded to Peach Re from Primerica Life under a coinsurance agreement, effective as of March 31, 2012. The LOC has a term of approximately 14 years and was issued in an initial amount of $450.0 million. Subject to certain conditions, the amount of the LOC will be periodically increased to a maximum amount of $510.0 million in 2014. The annual pretax expense of the LOC is expected to range from approximately $4.8 million to $6.9 million in 2012 through 2018, $1.5 million to $4.3 million in 2019 through 2023, and to be less than $0.8 million in 2024 and 2025.

Pursuant to the terms of the Credit Facility Agreement, in the event amounts are drawn under the LOC by Primerica Life, Peach Re will be obligated, subject to certain limited conditions, to reimburse Deutsche Bank for the amount of any draw and interest thereon. The Credit Facility Agreement is non-recourse to the Parent Company and Primerica Life, meaning that neither is liable for repaying Deutsche Bank for any draws or interest thereon. Pursuant to the terms of a letter agreement with Deutsche Bank, the Parent Company has agreed to guarantee the payment of fees to Deutsche Bank under the Credit Facility Agreement. Pursuant to the Credit Facility Agreement, Peach Re has collateralized its obligations to Deutsche Bank by granting it a security interest in all of its assets with the exception of amounts held in a special account established to meet minimum asset thresholds required by state regulatory authorities.

Contractual Obligations Update. The material changes in contractual obligations from those disclosed in the 2011 Annual Report include the Credit Facility Agreement discussed above in the Off-balance Sheet Arrangements section, the issuance of the Senior Notes discussed above in the Notes Payable section, and a long-term contract entered into by the Company in June 2012 for the acquisition, licensing, and maintenance of enterprise software. The software contract, which required us to make a payment of approximately $5.7 million in June 2012, extends through December 31, 2015. The remaining payments stipulated over the term of the contract are approximately $1.4 million in 2012, $5.2 million in 2013, $5.3 million in 2014, and $4.4 million in 2015.

In May 2011, we entered into an eight-year agreement with a third party to receive advisory services for our managed accounts product platform. In connection with this agreement, we are obligated to make asset-based fee payments (including minimum monthly payments) based on assets under management (AUM). We have made the minimum monthly payments and recognized expense accordingly of approximately $624,000 during the six months ended June 30, 2012. The minimum fee is approximately $2.5 million per year in 2013 through 2018 and approximately $1.0 million in 2019. We will continue to recognize these fees as the corresponding advisory services are received.

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

42

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:

• our failure to continue to attract and license new recruits, retain sales representatives, or license or maintain the licensing of our sales representatives;

• changes to the independent contractor status of our sales representatives;

• our or our sales representatives' violation of, or non-compliance with, laws and regulations;

• our or our sales representatives' failure to protect the confidentiality of client information;

• differences between our actual experience and our expectations regarding mortality, persistency, expenses and investment yields as reflected in the pricing for our insurance policies;

• the occurrence of a catastrophic event that causes a large number of premature deaths of our insureds;

• changes in federal and state legislation and regulation, including other legislation or regulation that affects our insurance, investment product businesses;

• our failure to meet risk-based capital standards or other minimum capital or surplus requirements;

• a downgrade or potential downgrade in our insurance subsidiaries' financial strength ratings or in the investment grade credit ratings for our senior unsecured debt;

• the effects of credit deterioration and interest rate fluctuations on our invested asset portfolio;

• incorrectly valuing our investments;

• inadequate or unaffordable reinsurance or the failure of our reinsurers to perform their obligations;

• the failure of, or legal challenges to, the support tools we provide to our sales force;

• heightened standards of conduct or more stringent licensing requirements for our sales representatives;

• inadequate policies and procedures regarding suitability review of client transactions;

• the inability of our subsidiaries to pay dividends or make distributions;

• our ability to generate and maintain a sufficient amount of working capital;

• our non-compliance with the covenants of our senior unsecured debt;

• legal and regulatory investigations and actions concerning us or our sales representatives;

• the loss of key personnel;

• the failure of our information technology systems, breach of our information security or failure of our business continuity plan; and

• fluctuations in Canadian currency exchange rates.

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 and debt securities.

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 document 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.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Interest rate risk

The fair value of the fixed-maturity securities in our invested asset portfolio as of June 30, 2012 was $1.85 billion. The primary market risk for this portion of our invested asset portfolio is interest rate risk. One means of assessing

43

the exposure of our fixed-maturity securities portfolios to interest rate changes is a duration-based analysis that measures the potential changes in market value resulting from a hypothetical change in interest rates of 100 basis points across all maturities. This model is sometimes referred to as a parallel shift in the yield curve. Under this model, with all other factors constant and assuming no offsetting change in the value of our liabilities, we estimated that such an increase in interest rates would cause the market value of our fixed-maturity securities portfolios to decline by approximately $60.3 million, or 3%, based on our actual securities positions as of June 30, 2012.

Canadian currency risk

We also have exposure to foreign currency exchange risk to the extent we conduct business in Canada. For the three months and six months endedJune 30, 2012, 18% and 19%, respectively, of our revenues from operations, excluding realized investment gains, were generated by our Canadian operations. A strong Canadian dollar relative to the U.S. dollar results in higher levels of reported revenues, expenses, net income, assets, liabilities and accumulated other comprehensive income (loss) in our U.S. dollar financial statements and a weaker Canadian dollar has the opposite effect. Historically, we have not hedged this exposure, although we may elect to do so in future periods.

One means of assessing exposure to changes in Canadian currency exchange rates is to model the effects on reported income using a sensitivity analysis. We analyzed our Canadian currency exposure for the three and six months endedJune 30, 2012. Net exposure was measured assuming a 10% decrease in Canadian currency exchange rates compared to the U.S. dollar. We estimated that such a decrease would decrease our net income before income taxes for the three and six months endedJune 30, 2012 by approximately $1.8 million and $3.0 million, respectively.

ITEM 4. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Co-Chief Executive Officers 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 quarterly report (the “Evaluation Date”). Based on such evaluation, the Company’s Co-Chief Executive Officers 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 second quarter of 2012 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

44

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

We are involved from time to time in legal disputes, regulatory inquires and arbitration proceedings in the normal course of business. Additional information regarding certain legal proceedings to which we are a party is described in Note 10 to our condensed consolidated financial statements, which are included elsewhere in this report, and such information is incorporated herein by reference. As of the date of this report, we do not believe any pending legal proceeding to which Primerica or any of its subsidiaries is a party is required to be disclosed pursuant to this item.

ITEM 1A. RISK FACTORS.

The Risk Factors contained in the 2011 Annual Report are incorporated herein by reference.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

During the quarter ended June 30, 2012, we repurchased shares of our common stock as follows.

Period	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Maximum number of share that may yet be purchased under the plans or programs
April 1 - 30, 2012 (1)	6,093,084	26.10		—	—
May 1 - 31, 2012	—	—		—	—
June 1 - 30, 2012	—	—		—	—
Total	6,093,084	$	26.10	—	—

________________ 

(1) Consists of (a) repurchases of 356,947 shares at an average price per share of $25.21 surrendered to us to pay the tax withholding obligations of employees in connection with the lapsing of restrictions on restricted shares and restricted stock units and (b) repurchases from Warburg Pincus of 5,736,137 shares at $26.15 per share for a total purchase price of $150.0 million.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

Not applicable.

ITEM 6. EXHIBITS.

The agreements included as exhibits to this report are included to provide you with information regarding the terms of these agreements and are not intended to provide any other factual or disclosure information about the Company or its subsidiaries, our business or the other parties to these agreements. These agreements may contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and:

• should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;

• have been qualified by disclosures that were made to the other party in connection with the negotiation of the application agreement, which disclosures are not necessarily reflected in the agreement;

• may apply standards of materiality in a way that is different from what may be viewed as material to our investors; and

• were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.

45

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time, and should not be relied upon by investors.

Exhibit Number	Description
3.1	Restated Certificate of Incorporation of the Registrant (Incorporated by reference to Exhibit 3.1 to Primerica’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 (Commission File No. 001-34680))
3.2	Amended and Restated Bylaws of the Registrant (Incorporated by reference to Exhibit 3.2 to Primerica’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 (Commission File No. 001-34680))
4.1	Indenture, dated as of July 16, 2012, between Primerica, Inc. and Wells Fargo Bank, National Association, as trustee (Incorporated by reference to Exhibit 4.1 to Primerica's Current Report on Form 8-K dated July 11, 2012 (Commission File No. 001-34680))
4.2	First Supplemental Indenture, dated as of July 16, 2012, between Primerica, Inc. and Wells Fargo Bank, National Association, as trustee (Incorporated by reference to Exhibit 4.2 to Primerica's Current Report on Form 8-K dated July 11, 2012 (Commission File No. 001-34680))
4.3	Form of 4.750% Senior Notes due 2022 (included in Exhibit 4.2 filed herewith) (Incorporated by reference to Exhibit 4.2 to Primerica's Current Report on Form 8-K dated July 11, 2012 (Commission File No. 001-34680))
31.1	Rule 13a-14(a)/15d-14(a) Certification, executed by D. Richard Williams, Chairman of the Board and Co-Chief Executive Officer
31.2	Rule 13a-14(a)/15d-14(a) Certification, executed by John A. Addison, Chairman of Primerica Distribution and Co-Chief Executive Officer
31.3	Rule 13a-14(a)/15d-14(a) Certification, executed by Alison S. Rand, Executive Vice President and Chief Financial Officer
32.1	Certifications required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350), executed by D. Richard Williams, Chairman of the Board and Co-Chief Executive Officer, John A. Addison, Chairman of Primerica Distribution and Co-Chief Executive Officer, and Alison S. Rand, Executive Vice President and Chief Financial Officer
101.INS*	XBRL Instance Document (1)
101.SCH*	XBRL Taxonomy Extension Schema
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase
101.DEF*	XBRL Taxonomy Extension Definition Linkbase
101.LAB*	XBRL Taxonomy Extension Label Linkbase
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase

* Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections. The financial information contained in the XBRL(eXtensible Business Reporting Language)-related documents is unaudited and unreviewed.

(1) Includes the following materials contained in this Quarterly Report on Form 10-Q for the period ended June 30, 2012, formatted in XBRL: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Income, (iii) Condensed Consolidated Statements of Comprehensive Income, (iv) Condensed Consolidated Statements of Stockholders’ Equity, (v) Condensed Consolidated Statements of Cash Flows, and (vi) Notes to Condensed Consolidated Financial Statements.

46

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Primerica, Inc.
August 8, 2012	/s/ Alison S. Rand
	Alison S. Rand
	Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

47

EX-31.1

EXHIBIT 31.1

Certification of Co-Chief Executive Officer

I, D. Richard Williams, Chairman of the Board of Directors and Co-Chief Executive Officer of Primerica, Inc., certify that:

1.I have reviewed this quarterly report on Form 10-Q of Primerica, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 8, 2012	/s/ D. Richard Williams
		D. Richard Williams
		Chairman of the Board of Directors and Co-Chief Executive Officer

EXH 31.1-1

EX-31.2

EXHIBIT 31.2

Certification of Co-Chief Executive Officer

I, John A. Addison, Jr., Chairman of Primerica Distribution and Co-Chief Executive Officer of Primerica, Inc., certify that:

1.I have reviewed this quarterly report on Form 10-Q of Primerica, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 8, 2012	/s/ John A. Addison, Jr.
		John A. Addison, Jr.
		Chairman of Primerica Distribution and Co-Chief Executive Officer

EXH 31.2-1

EX-31.3

EXHIBIT 31.3

Certification of Chief Financial Officer

I, Alison S. Rand, Executive Vice President and Chief Financial Officer of Primerica, Inc., certify that:

1.I have reviewed this quarterly report on Form 10-Q of Primerica, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 8, 2012	/s/ Alison S. Rand
		Alison S. Rand
		Executive Vice President and Chief Financial Officer

EXH 31.3-1

EX-32

EXHIBIT 32.1

Certification of Co-CEOs and CFO Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the quarterly report on Form 10-Q of Primerica, Inc. (the “Company”) for the period ended June 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, D. Richard Williams, as Chairman of the Board of Directors and Co-Chief Executive Officer of the Company, I, John A. Addison, Jr., as Chairman of Primerica Distribution and Co-Chief Executive Officer of the Company, and I, Alison S. Rand, as Executive Vice President and Chief Financial Officer of the Company, each hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) To my knowledge, the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ D. Richard Williams
Name:	D. Richard Williams
Title:	Chairman of the Board of Directors and Co-Chief Executive Officer
Date:	August 8, 2012
/s/ John A. Addison, Jr.
Name:	John A. Addison, Jr.
Title:	Chairman of Primerica Distribution and Co-Chief Executive Officer
Date:	August 8, 2012
/s/ Alison S. Rand
Name:	Alison S. Rand
Title:	Executive Vice President and Chief Financial Officer
Date:	August 8, 2012

EXH 32.1-1

XML

Impairment losses (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Available-for-sale fixed-maturity securities in default, amortized cost	$ 3,704		$ 3,704		$ 3,983
Available-for-sale fixed-maturity securities in default, fair value	4,695		4,695		5,168
Impairment charges recognized in earnings	127	66	341	333
Total OTTI losses recognized	203	66	904	333
Net impairment losses	127	66	341	333
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward]
Other than Temporary Impairment, Credit Losses Recognized in Earnings, Credit Losses on Debt Securities Held	32,213	40,634	34,072	41,129
Additions for OTTI securities where no credit losses were recognized prior to the beginnings of the period	10	0	10	4
Additions for OTTI securities where credit losses have been recognized prior to the beginning of the period	116	63	330	324
Reductions due to sales, maturities or calls of credit impaired securities	(911)	(807)	(2,984)	(1,567)
Other than Temporary Impairment, Credit Losses Recognized in Earnings, Credit Losses on Debt Securities Held	31,428	39,890	31,428	39,890
Intends to sell or more-likely-than-not will be required to sell before recovery [Member]
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Impairment charges recognized in earnings	42	64	43	331
Net impairment losses	42	64	43	331
Does not intend to sell or more-likely-than-not will not be required to sell before recovery [Member]
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Impairment charges recognized in earnings	85	2	298	2
Total OTTI losses recognized	161	2	861	2
Less portion of OTTI loss recognized in accumulated other comprehensive income (loss)	76	0	563	0
Net impairment losses	85	2	298	2
Equity securities [Member]
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Impairment charges recognized in earnings	1	3	1	5
Net impairment losses	1	3	1	5
Investments in default [Member] | Fixed maturities [Member]
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Impairment charges recognized in earnings	0	0	0	4
Net impairment losses	0	0	0	4
Investments not in default [Member] | Fixed maturities [Member]
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Impairment charges recognized in earnings	126	63	340	324
Net impairment losses	$ 126	$ 63	$ 340	$ 324

XML

Earnings Per Share Earnings Per Share (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Earnings Per Share, Basic [Abstract]
Net income	$ 46,180	$ 37,620	$ 87,936	$ 84,891
Income attributable to unvested participating securities - basic	1,111	1,097	2,498	2,837
Net income used in calculating basic EPS	45,069	36,523	85,438	82,054
Weighted-average vested shares, basic (shares)	61,531	73,457	63,332	73,067
Basic earnings per share (usd per share)	$ 0.73	$ 0.50	$ 1.35	$ 1.12
Earnings Per Share, Diluted [Abstract]
Net income	46,180	37,620	87,936	84,891
Income attributable to unvested participating securities - diluted	1,092	1,087	2,457	2,802
Net income used in calculating diluted EPS	$ 45,088	$ 36,533	$ 85,479	$ 82,089
Weighted-average vested shares, diluted (shares)	62,687	74,201	64,481	74,028
Diluted earnings per share (usd per share)	$ 0.72	$ 0.49	$ 1.33	$ 1.11

XML

Notes Payable (Details) (USD $) In Millions, unless otherwise specified			0 Months Ended
	Jun. 30, 2012 Note Payable to Citi [Member]	Jul. 16, 2012 Issuance of Debt [Member] Subsequent Event [Member] Senior Notes [Member]	Jul. 16, 2012 Repayment of Debt [Member] Subsequent Event [Member] Note Payable to Citi [Member]
Notes Payable [Line Items]
Notes Payable, Principal	$ 300.0	$ 375.0
Repayment of Citi Note			$ 300.0
Redemption Price of Citi Note			100.00%
Issue Price of Senior Notes		99.843%
Interest Rate, Stated Percentage	5.50%	4.75%

XML

Results of Operations by Country (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Schedule of Operations by Country [Line Items]
Revenue by country	$ 300,525	$ 275,095	$ 587,126	$ 551,447
Income before income taxes by country	71,921	58,465	135,386	131,721
United States
Schedule of Operations by Country [Line Items]
Revenue by country	246,703	222,909	477,460	445,312
Income before income taxes by country	54,265	42,652	102,038	99,658
Canada
Schedule of Operations by Country [Line Items]
Revenue by country	53,822	52,186	109,666	106,135
Income before income taxes by country	$ 17,656	$ 15,813	$ 33,348	$ 32,063

XML

Reinsurance (Tables)

6 Months Ended

Jun. 30, 2012

Reinsurance Disclosures [Abstract]

Schedule of reinsured life insurance in force

Reinsurance ceded arrangements do not relieve the Company of its primary obligation to the policyholder. We monitor the concentration of credit risk we have with any reinsurer, as well as the financial condition of the reinsurers. Details on in-force life insurance follow.

	June 30, 2012			December 31, 2011
	(Dollars in thousands)
Direct life insurance in force	$	672,899,761		$	669,938,841
Amounts ceded to other companies	(598,719,363		)	(596,975,143		)
Net life insurance in force	$	74,180,398		$	72,963,698
Percentage of reinsured life insurance in force	89		%	89		%

Schedule of reinsurance receivables by einsurer

Due from reinsurers includes ceded reserve balances and ceded claim liabilities. Reinsurance receivable and financial strength ratings by reinsurer were as follows:

	June 30, 2012			December 31, 2011
	Reinsurance receivable		A.M. Best rating	Reinsurance receivable		A.M. Best rating
	(In thousands)
Prime Reinsurance Company (1)	$	2,471,318	NR	$	2,438,723	NR
Financial Reassurance Company 2010, Ltd. (1)	338,645		NR	335,396		NR
American Health and Life Insurance Company (1)	166,687		A-	164,387		A-
Due from Citi affiliate reinsurers	2,976,650			2,938,506
Swiss Re Life & Health America Inc. (2)	254,414		A+	252,912		A+
SCOR Global Life Reinsurance Companies	148,874		A	143,409		A
Generali USA Life Reassurance Company	113,820		A-	114,774		A-
Transamerica Reinsurance Companies	101,709		A+	103,873		A+
Munich American Reassurance Company	97,543		A+	99,240		A+
Korean Reinsurance Company	82,655		A	82,755		A
RGA Reinsurance Company	69,338		A+	67,740		A+
All other reinsurers	58,025		—	52,109		—
Due from reinsurers	$	3,903,028		$	3,855,318

____________________ 

NR – not rated

(1) Amounts shown are net of their share of the reinsurance recoverable from other reinsurers.

(2) Includes amounts ceded to Lincoln National Life Insurance and 100% retroceded to Swiss Re Life & Health America Inc.

XML

Share-Based Transactions Tables (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Management equity awards [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	$ 4,863	$ 4,280	$ 9,311	$ 7,705
Tax benefit associated with management equity awards	1,183	1,465	2,229	2,639
Quarterly incentive awards [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	0	269	0	1,111
Quarterly incentive awards expense deferred	$ 1,652	$ 2,048	$ 3,425	$ 3,102

XML

Fair Value of Financial Instruments - Level 3 Asset Category (Details) (Fair value, recurring measurements [Member], Level 3 [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Fair value, recurring measurements [Member] | Level 3 [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Roll Forward]
Level 3 assets, beginning of period	$ 10,916	$ 30,162	$ 6,937	$ 24,998
Net unrealized gains (losses) included in other comprehensive income	(504)	(232)	(336)	(281)
Net realized gains (losses) included in realized investments gains, including other-than-temporary impairment losses	45	871	(40)	1,466
Purchases	1,117	0	2,416	4,000
Sales	0	(902)	0	(3,823)
Settlements	(384)	(1,238)	(738)	(1,462)
Transfers into level 3	0	2	2,951	4,503
Transfers out of level 3	(1,059)	(16,398)	(1,059)	(17,136)
Level 3 assets, end of period	$ 10,131	$ 12,265	$ 10,131	$ 12,265

XML

Investment Income (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	$ 24,987	$ 28,662	$ 52,487	$ 58,769
Less investment expenses	(1,382)	(1,433)	(2,785)	(2,914)
Net investment income	23,605	27,229	49,702	55,855
Gross gains from sales	4,506	2,145	6,542	2,957
Gross losses from sales	(56)	(6)	(57)	(331)
Gross gains from securities transferred from available-for-sale to trading	323	0	323	0
Gross losses from securities transferred from available-for-sale to trading	(6)	0	(6)	0
Other-than-temporary impairment losses	(127)	(66)	(341)	(333)
Gains (losses) from bifurcated options	(319)	(38)	(9)	69
Net realized investment gains (losses)	4,321	2,035	6,452	2,362
Gross realized investment gains (losses) reclassified from accumulated other comprehensive income	4,640	2,073	6,461	2,293
Proceeds from sales or other redemptions	196,096	106,848	338,883	270,608
Equity securities [Member]
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Investment income	244	165	467	353
Fixed-maturity securities [Member]
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Investment income	23,797	27,462	49,559	56,474
Policy loans and other invested assets [Member]
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Investment income	261	320	611	648
Cash and cash equivalents [Member]
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Investment income	111	65	246	135
Market return on deposit asset underlying 10% insurance agreement [Member]
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Investment income	$ 574	$ 650	$ 1,604	$ 1,159

XML

Commitments and Contingent Liabilities Minimum Purchase Obligations (Details) (Managed Accounts Advisory Services Agreement [Member], USD $)	6 Months Ended
	Jun. 30, 2012
Managed Accounts Advisory Services Agreement [Member]
Unrecorded Unconditional Purchase Obligation [Line Items]
Term of unrecorded unconditional purchase obligation	eight-year
Unrecorded unconditional purchase obligation, purchases	$ 624,000
Unrecorded unconditional purchase obligation, due in remainder of fiscal year	624,000
Unrecorded unconditional purchase obligation, annual fee 2013-2018	2,500,000
Unrecorded unconditional purchase obligation, annual fee 2019	$ 1,000,000

XML

Stockholders' Equity (Details) (USD $) In Thousands, except Share data, unless otherwise specified	6 Months Ended				0 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012 Restricted Stock Units (RSUs) [Member]	Jun. 30, 2011 Restricted Stock Units (RSUs) [Member]	Apr. 26, 2012 Warburg Pincus [Member]	Jun. 30, 2012 Warburg Pincus [Member]
Increase (Decrease) in Common Stock [Roll Forward]
Common stock, beginning of period	64,883,000	72,843,000
Shares of restricted common stock issued, net	438,000	345,000
Shares of common stock issued upon lapse of restricted stock units , RSUs	712,000	584,000
Common stock repurchased and retired	6,165,000	169,000			5,736,137
Common stock, end of period	59,868,000	73,603,000
Restriction lapse period			3 years
Equity instruments other than options, nonvested			1,700,000
RSUs granted (shares)			178,000	246,000
Stock repurchased, cost per share					$ 26.15
Stock repurchased, value					$ 150,000
Noncontrolling interest percentage of ownership, after transaction						18.00%
Warrants to purchase common stock, outstanding						4,103,110
Warrants to purchase common stock, per share exercise price						18

XML

Summary of Significant Accounting Policies (Notes)

6 Months Ended

Jun. 30, 2012

Accounting Policies [Abstract]

Summary of significant accounting policies

Summary of Significant Accounting Policies

Description of Business. Primerica, Inc. (the "Parent Company") together with its subsidiaries (collectively, "we" or the "Company") is a leading distributor of financial products to middle income households in the United States and Canada. We assist our clients in meeting their needs for term life insurance, which we underwrite, and mutual funds, annuities and other financial products, which we distribute primarily on behalf of third parties. Our primary subsidiaries include the following entities: Primerica Financial Services, Inc., a general agency and marketing company; Primerica Life Insurance Company ("Primerica Life"), our principal life insurance company; Primerica Financial Services (Canada) Ltd., a holding company for our Canadian operations, which includes Primerica Life Insurance Company of Canada ("Primerica Life Canada"); and PFS Investments, Inc., an investment products company and broker-dealer. Primerica Life, domiciled in Massachusetts, owns National Benefit Life Insurance Company ("NBLIC"), a New York life insurance company. Each of these entities was indirectly wholly owned by Citigroup Inc. (together with its non-Primerica affiliates, "Citi") through March 31, 2010.

We capitalized Peach Re, Inc. ("Peach Re"), a special purpose financial captive insurance company and wholly owned subsidiary of Primerica Life, and Primerica Life ceded to Peach Re certain level premium term life insurance policies pursuant to a coinsurance agreement (the "Peach Re Coinsurance Agreement"), effective March 31, 2012.

Basis of Presentation. We prepare our financial statements in accordance with U.S. generally accepted accounting principles ("GAAP"). These principles are established primarily by the Financial Accounting Standards Board ("FASB"). The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect financial statement balances, revenues and expenses and cash flows as well as the disclosure of contingent assets and liabilities. Management considers available facts and knowledge of existing circumstances when establishing the estimates included in our financial statements.

The most significant items that involve a greater degree of accounting estimates and actuarial determinations subject to change in the future are the valuation of investments, deferred policy acquisition costs assets ("DAC"), future policy benefit reserves and income taxes. Estimates for these and other items are subject to change and are reassessed by management in accordance with GAAP. Actual results could differ from those estimates.

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and those entities required to be consolidated under applicable accounting standards. All material intercompany profits, transactions, and balances among the consolidated entities have been eliminated.

The accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of normal recurring accruals, which are necessary to fairly present the balance sheets as of June 30, 2012 and December 31, 2011, the statements of income and comprehensive income for the three and six months ended June 30, 2012 and 2011, and the statements of stockholders' equity and cash flows for the six months ended June 30, 2012 and 2011. Results of operations for interim periods are not necessarily indicative of results for the entire year or of the results to be expected in future periods.

These unaudited condensed consolidated financial statements have been prepared pursuant to the rules and the regulations of the Securities and Exchange Commission (the "SEC"). Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. These condensed consolidated financial statements should be read in conjunction with the consolidated and combined financial statements and notes thereto that are included in our Annual Report on Form 10-K for the year ended December 31, 2011, as modified and updated by our Current Report on Form 8-K filed with the SEC on May 8, 2012 (together, the "2011 Annual Report").

Reclassifications. Certain reclassifications have been made to prior-period amounts to conform to current-period reporting classifications. Concurrent with our January 1, 2012 adoption of ASU 2010-26, Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts ("ASU 2010-26"), certain expenses were reclassified among sales commission, insurance expenses, insurance commissions and other operating expenses. These reclassifications had no impact on net income, total stockholders’ equity or income before income taxes by segment.

Significant Accounting Policies. All significant accounting policies remain unchanged from the 2011 Annual Report.

New Accounting Principles.

We retrospectively adopted ASU 2010-26 in our fiscal year beginning January 1, 2012. The impact of adoption was as follows:

	(In thousands, except per-share amounts)
Reduction as of January 1, 2011:
Deferred policy acquisition costs, net	$	114,265
Stockholders' equity	74,964
Reduction as of December 31, 2011:
Deferred policy acquisition costs, net	$	146,152
Stockholders' equity	95,991
Reduction for the three months ended June 30, 2011:
Income before income taxes	$	9,696
Net income	6,403
Basic earnings per share	0.08
Diluted earnings per share	0.09
Reduction for the six months ended June 30, 2011:
Income before income taxes	$	17,585
Net income	11,599
Basic earnings per share	0.16
Diluted earnings per share	0.15

The adoption of ASU 2010-26 had no impact on our cash flows or required capital.

In accordance with ASU 2010-26, we only defer the costs of acquiring new business to the extent that they result directly from and are essential to the contract transaction(s) and would not have been incurred had the contract transaction(s) not occurred. These deferred policy acquisition costs mainly include commissions and policy issuance expenses. The recovery of such costs is dependent on the future profitability of the related policies, which, in turn, is dependent principally upon mortality, persistency, investment returns, and the expense of administering the business, as well as upon certain economic variables, such as inflation. DAC is subject to recoverability testing annually and when impairment indicators exist. We make certain assumptions regarding persistency, expenses, interest rates and claims. These assumptions may not be modified, or unlocked, unless recoverability testing deems them to be inadequate. We update assumptions for new business to reflect the most recent experience. DAC is amortized over the premium-paying period of the related policies in proportion to annual premium income. Due to the inherent uncertainties in making assumptions about future events, materially different experience from expected results in persistency could result in a material increase or decrease of DAC amortization in a particular period. All other acquisition-related costs, including unsuccessful acquisition and renewal efforts, are charged to expense as incurred. Administrative costs, rent, depreciation, occupancy, equipment, and all other general overhead costs are considered indirect costs and are charged to expense as incurred.

Deferrable acquisitions costs for Canadian segregated funds are amortized over the life of the policies in relation to historical and future estimated gross profits before amortization. The gross profits and resulting DAC amortization will vary with actual fund returns, redemptions and expenses. The adoption of ASU 2010-26 did not impact the accounting for acquisition costs related to Canadian segregated funds.

The balances of and activity in DAC, which reflects the retrospective adoption of ASU 2010-26 for all periods presented, were as follows:

	Six months ended June 30,
	2012			2011
	(In thousands)
DAC balance, beginning of period	$	904,485		$	738,946
Capitalization	141,151			134,704
Amortization	(54,736		)	(47,204		)
Foreign exchange and other	(342		)	7,338
DAC balance, end of period	$	990,558		$	833,784

Fair Value Measurement Amendments. In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement ("ASU 2011-04"). The primary provisions of ASU 2011-04 result in common fair value measurement and disclosure requirements for U.S. GAAP and International Financial Reporting Standards. ASU 2011-04 changes the wording used to describe the requirements for measuring fair value and for disclosing information about fair value measurement, including requiring quantitative disclosures about the unobservable inputs used in fair value measurements. The amendments in the update were applied prospectively for our fiscal year beginning January 1, 2012. This update did not result in a significant impact on our financial position or results of operations.

XML

Fair Value of Financial Instruments - Financial Instruments (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	$ 1,855,540	$ 1,985,868
Equity securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	31,811	26,712
Fair value, recurring measurements [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities	29,038	9,640
Separate accounts	2,500,640	2,408,598
Currency swaps	1,987	2,032
Separate accounts	2,500,640	2,408,598
Fair value, recurring measurements [Member] | Carrying value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities	29,038	9,640
Separate accounts	2,500,640	2,408,598
Separate accounts	2,500,640	2,408,598
Fair value, recurring measurements [Member] | Carrying value [Member] | Fixed-maturity securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	1,823,729	1,959,156
Fair value, recurring measurements [Member] | Carrying value [Member] | Equity securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	31,811	26,712
Fair value, recurring measurements [Member] | Carrying value [Member] | Currency swaps [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Currency swaps	1,987	2,032
Fair value, recurring measurements [Member] | Estimated fair value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities	29,038	9,640
Separate accounts	2,500,640	2,408,598
Separate accounts	2,500,640	2,408,598
Fair value, recurring measurements [Member] | Estimated fair value [Member] | Fixed-maturity securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	1,823,729	1,959,156
Fair value, recurring measurements [Member] | Estimated fair value [Member] | Equity securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	31,811	26,712
Fair value, recurring measurements [Member] | Estimated fair value [Member] | Currency swaps [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Currency swaps	1,987	2,032
Fair value, recurring measurements [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities	0	0
Separate accounts	0	0
Currency swaps	0	0
Separate accounts	0	0
Fair value, recurring measurements [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities	29,038	9,640
Separate accounts	2,500,640	2,408,598
Currency swaps	1,987	2,032
Separate accounts	2,500,640	2,408,598
Fair value, nonrecurring measurements [Member] | Estimated fair value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Policy loans	24,187	25,982
Fair value, nonrecurring measurements [Member] | Level 3 [Member] | Carrying value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Policy loans	24,187	25,982
Other invested assets	14	14
Fair value, nonrecurring measurements [Member] | Level 3 [Member] | Carrying value [Member] | Deposits [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deposit ssset underlying 10% reinsurance agreement	75,436	59,975
Fair value, nonrecurring measurements [Member] | Level 3 [Member] | Estimated fair value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other invested assets	14	14
Fair value, nonrecurring measurements [Member] | Level 3 [Member] | Estimated fair value [Member] | Deposits [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deposit ssset underlying 10% reinsurance agreement	75,436	59,975
Fair value, nonrecurring measurements [Member] | Level 2 [Member] | Carrying value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notes payable	300,000	300,000
Fair value, nonrecurring measurements [Member] | Level 2 [Member] | Estimated fair value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notes payable	$ 334,782	$ 329,779

XML

Summary of Significant Accounting Policies Table 1 (Details) (Accounting standards update 2010-26 [Member], USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2011	Dec. 31, 2011	Dec. 31, 2010
Accounting standards update 2010-26 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Deferred policy acquisition costs, net			$ 146,152	$ 114,265
Cumulative effect of change on equity or net assets			95,991	74,964
Effect of change on operating results	9,696	17,585
Effect of change on net income	$ 6,403	$ 11,599
Effect of change on basic earnings per share	$ 0.08	$ 0.16
Effect of change on diluted earnings per share	$ 0.09	$ 0.15

XML

Share-Based Transactions (Tables)

6 Months Ended

Jun. 30, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of share based compensation arrangements by share based payment award, management equity awards

All outstanding management awards have time-based vesting requirements, vesting over three years. In connection with our granting of management equity awards, we recognized expense and tax benefit offsets as follows:

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
	(In thousands)
Management equity award expense	$	4,863	$	4,280	$	9,311	$	7,705
Tax benefit associated with management equity awards	1,183		1,465		2,229		2,639

Disclosure of share based compensation arrangements by share based payment award, quarterly incentive awards

In connection with these awards, we recognized and deferred expense as follows:

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
	(In thousands)
Quarterly incentive awards expense deferred	$	1,652	$	2,048	$	3,425	$	3,102
Quarterly incentive awards expense recognized currently	—		269		—		1,111

XML

Reinsurance Schedule of Reinsured Life Insurance In Force (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Reinsurance Disclosures [Abstract]
Direct life insurance in force	$ 672,899,761	$ 669,938,841
Life insurance ceded to other companies	598,719,363	596,975,143
Net life insurance in force	$ 74,180,398	$ 72,963,698
Percentage of reinsured life insurance in force	89.00%	89.00%

XML

Summary of Significant Accounting Policies Summary of Significant Accounting Policies Table 2 (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward]
DAC balance, beginning of period			$ 904,485	$ 738,946
Capitalization			141,151	134,704
Amortization	(28,205)	(23,975)	(54,736)	(47,204)
Foreign exchange and other			(342)	7,338
DAC balance, end of period	$ 990,558	$ 833,784	$ 990,558	$ 833,784

XML

Segment Information - Assets (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	$ 9,951,077	$ 9,851,820
Term life insurance segment
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	6,241,977	6,009,162
Investment and savings products segment
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	2,692,115	2,591,137
Investment and savings products segment assets, excluding seperate accounts	192,462	183,622
Corporate and other distributed products segment
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	$ 1,016,985	$ 1,251,521

XML

Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Cash flows from operating activities:
Net income	$ 87,936	$ 84,891
Adjustments to reconcile net income to cash provided by (used in) operating activities:
Change in future policy benefits and other policy liabilities	113,712	35,579
Deferral of policy acquisition costs	(141,151)	(134,704)
Amortization of deferred policy acquisition costs, net	54,736	47,204
Change in income taxes	431	(13,074)
Realized investment gains, including other-than-temporary impairments	(6,452)	(2,362)
Accretion and amortization of investments	(304)	(1,910)
Depreciation and amortization	4,911	5,265
Change in due from reinsurers	(47,710)	18,515
Change in premiums and other receivables	(3,826)	(11,575)
Trading securities sold (acquired), net	14,639	(13,505)
Share-based compensation	13,196	12,061
Other, net	(77,309)	(32,585)
Net cash provided by (used in) operating activities	12,809	(6,200)
Available-for-sale investments sold, matured or called:
Fixed-maturity securities - sold	213,317	36,635
Fixed-maturity securities - matured or called	124,320	230,947
Equity securities	1,246	3,026
Available-for-sale investments acquired:
Fixed-maturity securities	(209,197)	(267,793)
Equity securities	(3,086)	(73)
Other, net	148	(82)
Cash collateral received (returned) on loaned securities, net	(5,395)	(18,384)
Sales (purchases) of short-term investments using securities lending collateral, net	5,395	18,384
Net cash provided by (used in) investing activities	126,748	2,660
Cash flows from financing activities:
Dividends	(5,104)	(3,027)
Common stock repurchased	(160,879)	(4,110)
Net cash used in financing activities	(165,983)	(7,137)
Effect of foreign exchange rate changes on cash	(1,590)	(1,310)
Change in cash and cash equivalents	(28,016)	(11,987)
Cash and cash equivalents, beginning of period	136,078	126,038
Cash and cash equivalents, end of period	$ 108,062	$ 114,051

XML

Segment Information - Results of Operations (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Segment Reporting Information [Line Items]
Total revenues	$ 300,525	$ 275,095	$ 587,126	$ 551,447
Income before income taxes	71,921	58,465	135,386	131,721
Term life insurance segment
Segment Reporting Information [Line Items]
Total revenues	162,732	131,641	314,536	268,603
Income before income taxes	51,724	36,026	96,007	85,742
Investment and savings products segment
Segment Reporting Information [Line Items]
Total revenues	102,967	104,586	203,101	205,432
Income before income taxes	29,444	30,470	58,314	61,509
Corporate and other distributed products segment
Segment Reporting Information [Line Items]
Total revenues	34,826	38,868	69,489	77,412
Income before income taxes	$ (9,247)	$ (8,031)	$ (18,935)	$ (15,530)

XML

Derivatives (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Investments [Abstract]
Aggregate notional balance of currency swaps	$ 5,878	$ 5,878
Aggregate fair value of currency swaps	(1,987)	(2,032)
Aggregate fair value of embedded conversion options	7,227	8,583
Deferred loss related to closed forward contracts	$ 26,385	$ 26,385

XML

Subsequent Events (Details) (Repurchase of Equity [Member], Subsequent Event [Member], USD $) In Millions, unless otherwise specified	0 Months Ended
	Aug. 06, 2012
Repurchase of Equity [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Authorized amount	$ 75.0

XML

Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Investments:
Fixed-maturity securities available for sale, at fair value	$ 1,823,729	$ 1,959,156
Equity securities available for sale, at fair value	31,811	26,712
Trading securities, at fair value	29,038	9,640
Policy loans	24,187	25,982
Other invested assets	14	14
Total investments	1,908,779	2,021,504
Cash and cash equivalents	108,062	136,078
Accrued investment income	20,220	21,579
Due from reinsurers	3,903,028	3,855,318
Deferred policy acquisition costs, net	990,558	904,485
Premiums and other receivables	167,746	163,845
Intangible assets, net	70,226	71,928
Other assets	281,818	268,485
Separate account assets	2,500,640	2,408,598
Total assets	9,951,077	9,851,820
Liabilities:
Future policy benefits	4,723,359	4,614,860
Unearned premiums	9,476	7,022
Policy claims and other benefits payable	236,717	241,754
Other policyholders’ funds	347,763	340,766
Note payable	300,000	300,000
Income taxes	82,755	81,316
Other liabilities	329,538	381,496
Payable under securities lending	143,963	149,358
Separate account liabilities	2,500,640	2,408,598
Total liabilities	8,674,211	8,525,170
Stockholders’ equity:
Common stock	599	649
Paid-in capital	693,717	835,232
Retained earnings	426,936	344,104
Accumulated other comprehensive income, net of income tax:
Unrealized foreign currency translation gains	50,458	51,248
Net unrealized investment gains (losses):
Net unrealized investment gains not other-than-temporarily impaired	107,187	97,082
Net unrealized investment losses other-than-temporarily impaired	(2,031)	(1,665)
Total stockholders’ equity	1,276,866	1,326,650
Total liabilities and stockholders’ equity	$ 9,951,077	$ 9,851,820

XML

Schedule of Reinsured Receivables by Reinsurer (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Ceded Credit Risk [Line Items]
Reinsurance receivable	$ 3,903,028	$ 3,855,318
Prime Reinsurance Company [Member]
Ceded Credit Risk [Line Items]
Reinsurance receivable	2,471,318	2,438,723
Financial Reassurance Company 2010, Ltd. [Member]
Ceded Credit Risk [Line Items]
Reinsurance receivable	338,645	335,396
American Health and Life Insurance Company [Member]
Ceded Credit Risk [Line Items]
Reinsurance receivable	166,687	164,387
Due from Citi affiliate reinsurers [Member]
Ceded Credit Risk [Line Items]
Reinsurance receivable	2,976,650	2,938,506
Swiss Re Life & Health America Inc. [Member]
Ceded Credit Risk [Line Items]
Reinsurance receivable	254,414	252,912
Reinsurance receivable retroceded, percentage	100.00%	100.00%
SCOR Global Life Reinsurance Companies [Member]
Ceded Credit Risk [Line Items]
Reinsurance receivable	148,874	143,409
Generali USA Life Reassurance Company [Member]
Ceded Credit Risk [Line Items]
Reinsurance receivable	113,820	114,774
Transamerica Reinsurance Companies [Member]
Ceded Credit Risk [Line Items]
Reinsurance receivable	101,709	103,873
Munich American Reassurance Company [Member]
Ceded Credit Risk [Line Items]
Reinsurance receivable	97,543	99,240
Korean Reinsurance Company [Member]
Ceded Credit Risk [Line Items]
Reinsurance receivable	82,655	82,755
RGA Reinsurance Company [Member]
Ceded Credit Risk [Line Items]
Reinsurance receivable	69,338	67,740
All other reinsurers [Member]
Ceded Credit Risk [Line Items]
Reinsurance receivable	$ 58,025	$ 52,109
Reinsurance receivable credit rating	0	0
External credit rating, not rated [Member] | Prime Reinsurance Company [Member]
Ceded Credit Risk [Line Items]
Reinsurance receivable credit rating	NR	NR
External credit rating, not rated [Member] | Financial Reassurance Company 2010, Ltd. [Member]
Ceded Credit Risk [Line Items]
Reinsurance receivable credit rating	NR	NR
A.M. A minus rating [Member] | American Health and Life Insurance Company [Member]
Ceded Credit Risk [Line Items]
Reinsurance receivable credit rating	A-	A-
A.M. A minus rating [Member] | Generali USA Life Reassurance Company [Member]
Ceded Credit Risk [Line Items]
Reinsurance receivable credit rating	A-	A-
A.M. A plus rating [Member] | Swiss Re Life & Health America Inc. [Member]
Ceded Credit Risk [Line Items]
Reinsurance receivable credit rating	A+	A+
A.M. A plus rating [Member] | Transamerica Reinsurance Companies [Member]
Ceded Credit Risk [Line Items]
Reinsurance receivable credit rating	A+	A+
A.M. A plus rating [Member] | Munich American Reassurance Company [Member]
Ceded Credit Risk [Line Items]
Reinsurance receivable credit rating	A+	A+
A.M. A plus rating [Member] | RGA Reinsurance Company [Member]
Ceded Credit Risk [Line Items]
Reinsurance receivable credit rating	A+	A+
A.M. A rating [Member] | SCOR Global Life Reinsurance Companies [Member]
Ceded Credit Risk [Line Items]
Reinsurance receivable credit rating	A	A
A.M. A rating [Member] | Korean Reinsurance Company [Member]
Ceded Credit Risk [Line Items]
Reinsurance receivable credit rating	A	A

XML

Condensed Consolidated Statements of Stockholders' Equity (USD $) In Thousands, unless otherwise specified	Total	Common stock [Member]	Paid-in capital [Member]	Retained earnings [Member]	Accumulated other comprehensive income [Member]
Balance, beginning of period at Dec. 31, 2010		$ 728	$ 1,010,635	$ 194,225	$ 150,940
Paid-in capital:
Share-based compensation			16,246
Net issuance of common stock		10	(10)
Repurchases of common stock		(2)	(4,108)
Net capital contributed from Citi			(1,424)
Retained earnings:
Net income	84,891			84,891
Dividends				(3,027)
Accumulated other comprehensive income:
Change in foreign currency translation adjustment, net of income tax (benefit) expense					3,647
Change in net unrealized investment gains (losses) during the period, net of income taxes:
Change in net unrealized investment gains (losses) not other-than-temporarily impaired, net of income tax expense (benefit)					7,325
Change in net unrealized investment gains (losses) other-than-temporarily impaired, net of income tax (benefit) expense					0
Balance, ending of period at Jun. 30, 2011	1,460,076	736	1,021,339	276,089	161,912
Balance, beginning of period at Dec. 31, 2011	1,326,650	649	835,232	344,104	146,665
Paid-in capital:
Share-based compensation			17,353
Net issuance of common stock		12	(12)
Repurchases of common stock		(62)	(160,817)
Net capital contributed from Citi			1,961
Retained earnings:
Net income	87,936			87,936
Dividends				(5,104)
Accumulated other comprehensive income:
Change in foreign currency translation adjustment, net of income tax (benefit) expense					(790)
Change in net unrealized investment gains (losses) during the period, net of income taxes:
Change in net unrealized investment gains (losses) not other-than-temporarily impaired, net of income tax expense (benefit)					10,105
Change in net unrealized investment gains (losses) other-than-temporarily impaired, net of income tax (benefit) expense					(366)
Balance, ending of period at Jun. 30, 2012	$ 1,276,866	$ 599	$ 693,717	$ 426,936	$ 155,614

XML

Net effect on stockholders' equity (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Investments [Abstract]
Accumulated other comprehensive income (loss), AFS Securities, before tax, including FCTA and OTTI, from fixed maturity and equity securities	$ 166,731	$ 153,180
Accumulated other comprehensive income (loss), AFS securities, before tax including FCTA and OTTI, currency swaps	(23)	96
Foreign currency translation adjustment	(4,929)	(6,481)
Other-than-temporary impairments	3,124	2,562
Net unrealized investment gains excluding foreign currency translation adjustment and other-than-temporary impairments, net of tax	164,903	149,357
Deferred income taxes	57,716	52,275
Net unrealized investment gains excluding foreign currency translation adjustment and other-than-temporary impairments, net of tax	$ 107,187	$ 97,082

XML

Segment Information (Tables)

6 Months Ended

Jun. 30, 2012

Segment Reporting [Abstract]

Reconciliation of assets from segment to consolidated

Assets by segment were as follows:

	June 30, 2012		December 31, 2011
	(In thousands)
Assets:
Term life insurance segment	$	6,241,977	$	6,009,162
Investment and savings products segment	2,692,115		2,591,137
Corporate and other distributed products segment	1,016,985		1,251,521
Total assets	$	9,951,077	$	9,851,820

Schedule of segment reporting information, assets excluding separate accounts

The Investment and Savings Products segment includes assets held in separate accounts. Excluding separate accounts, Investment and Savings Products segment assets were as follows:

	June 30, 2012		December 31, 2011
	(In thousands)
Investment and savings products segment assets, excluding separate accounts	$	192,462	$	183,622

Reconciliation of revenue from segments to consolidated

Results of operations by segment were as follows:

	Three months ended June 30,						Six months ended June 30,
	2012			2011			2012			2011
	(In thousands)
Revenues:
Term life insurance segment	$	162,732		$	131,641		$	314,536		$	268,603
Investment and savings products segment	102,967			104,586			203,101			205,432
Corporate and other distributed products segment	34,826			38,868			69,489			77,412
Total revenues	$	300,525		$	275,095		$	587,126		$	551,447
Income (loss) before income taxes:
Term life insurance segment	$	51,724		$	36,026		$	96,007		$	85,742
Investment and savings products segment	29,444			30,470			58,314			61,509
Corporate and other distributed products segment	(9,247		)	(8,031		)	(18,935		)	(15,530		)
Total income before income taxes	$	71,921		$	58,465		$	135,386		$	131,721

Schedule of operations, by geographical areas

Results of operations by country were as follows:

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
	(In thousands)
Revenues by country:
United States	$	246,703	$	222,909	$	477,460	$	445,312
Canada	53,822		52,186		109,666		106,135
Total revenues	$	300,525	$	275,095	$	587,126	$	551,447
Income before income taxes by country:
United States	$	54,265	$	42,652	$	102,038	$	99,658
Canada	17,656		15,813		33,348		32,063
Total income before income taxes	$	71,921	$	58,465	$	135,386	$	131,721

XML

Fixed maturity securities schedule (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Investments [Abstract]
Trading securities, at fair value	$ 29,038	$ 9,640
Fair value of investments on deposit with governmental authorities	19,309	19,100
Minimum collateral to loan ratio	102.00%
Additional collateral requirement	100.00%
Securities lending collateral	143,963	149,358
Due in one year or less, amortized cost	112,493
Due after one year through five years, amortized cost	551,201
Due after five years through 10 years, amortized cost	603,657
Due after 10 years, amortized cost	48,251
Total due, amortized cost	1,315,602
Mortgage and asset-backed securities, amortized cost	348,174
Total fixed-maturity securities, amortized cost	1,663,776	1,811,359
Due in one year or less, fair value	116,017
Due after one year through five years, fair value	594,914
Due after five years through 10 years, fair value	684,617
Due after 10 years, fair value	55,288
Total due, fair value	1,450,836
Mortgage and asset-backed securities, fair value	372,893
Total fixed-maturity securities, fair value	$ 1,823,729	$ 1,959,156

XML

Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2012

Fair Value Disclosures [Abstract]

Schedule of fair value assets and liabilities

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

	June 30, 2012
	Level 1		Level 2		Level 3		Total
	(In thousands)
Fair value assets:
Fixed-maturity securities:
U.S. government and agencies	$	—	$	9,869	$	—	$	9,869
Foreign government	—		111,384		—		111,384
States and political subdivisions	—		31,361		—		31,361
Corporates	249		1,290,884		7,089		1,298,222
Mortgage- and asset-backed securities	—		369,899		2,994		372,893
Total fixed-maturity securities	249		1,813,397		10,083		1,823,729
Equity securities	24,525		7,238		48		31,811
Trading securities	—		29,038		—		29,038
Separate accounts	—		2,500,640		—		2,500,640
Total fair value assets	$	24,774	$	4,350,313	$	10,131	$	4,385,218
Fair value liabilities:
Currency swaps	$	—	$	1,987	$	—	$	1,987
Separate accounts	—		2,500,640		—		2,500,640
Total fair value liabilities	$	—	$	2,502,627	$	—	$	2,502,627

	December 31, 2011
	Level 1		Level 2		Level 3		Total
	(In thousands)
Fair value assets:
Fixed-maturity securities:
U.S. government and agencies	$	—	$	10,985	$	—	$	10,985
Foreign government	—		111,845		—		111,845
States and political subdivisions	—		30,935		—		30,935
Corporates	256		1,349,021		4,924		1,354,201
Mortgage- and asset-backed securities	—		449,228		1,962		451,190
Total fixed-maturity securities	256		1,952,014		6,886		1,959,156
Equity securities	18,069		8,592		51		26,712
Trading securities	—		9,640		—		9,640
Separate accounts	—		2,408,598		—		2,408,598
Total fair value assets	$	18,325	$	4,378,844	$	6,937	$	4,404,106
Fair value liabilities:
Currency swaps	$	—	$	2,032	$	—	$	2,032
Separate accounts	—		2,408,598		—		2,408,598
Total fair value liabilities	$	—	$	2,410,630	$	—	$	2,410,630

Level 3 Assets

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

	Three months ended June 30,						Six months ended June 30,
	2012			2011			2012			2011
	(In thousands)
Level 3 assets, beginning of period	$	10,916		$	30,162		$	6,937		$	24,998
Net unrealized gains (losses) included in other comprehensive income	(504		)	(232		)	(336		)	(281		)
Net realized gains (losses) included in realized investment gains, including other-than-temporary impairment losses	45			871			(40		)	1,466
Purchases	1,117			—			2,416			4,000
Sales	—			(902		)	—			(3,823		)
Settlements	(384		)	(1,238		)	(738		)	(1,462		)
Transfers into Level 3	—			2			2,951			4,503
Transfers out of Level 3	(1,059		)	(16,398		)	(1,059		)	(17,136		)
Level 3 assets, end of period	$	10,131		$	12,265		$	10,131		$	12,265

Fair value estimates

The table below is a summary of the estimated fair value for financial instruments.

	June 30, 2012				December 31, 2011
	Carrying value		Estimated fair value		Carrying value		Estimated fair value
	(In thousands)
Assets:
Fixed-maturity securities	$	1,823,729	$	1,823,729	$	1,959,156	$	1,959,156
Equity securities	31,811		31,811		26,712		26,712
Trading securities	29,038		29,038		9,640		9,640
Policy loans	24,187		24,187		25,982		25,982
Other invested assets	14		14		14		14
Deposit asset underlying 10% reinsurance agreement	75,436		75,436		59,975		59,975
Separate accounts	2,500,640		2,500,640		2,408,598		2,408,598
Liabilities:
Note payable	$	300,000	$	334,782	$	300,000	$	329,779
Currency swaps	1,987		1,987		2,032		2,032
Separate accounts	2,500,640		2,500,640		2,408,598		2,408,598

XML

Condensed Consolidated Statements of Stockholders' Equity Parenthetical (USD $) In Thousands, except Per Share data, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Retained earnings [Member]
Retained earnings:
Dividends per share	$ 0.08	$ 0.04
Accumulated other comprehensive income [Member]
Accumulated other comprehensive income:
Change in foreign currency translation adjustment, income tax expense (benefit)	$ (79)	$ 0
Change in net unrealized investment gains (losses) not other-than-temporarily impaired, income tax expense (benefit)	5,411	2,825
Change in net unrealized investment (losses) gains other-than-temporarily impaired, income tax (benefit) expense	$ (196)	$ 0

XML

Condensed Consolidated Balance Sheets Parenthetical (USD $) In Thousands, except Per Share data, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Investments:
Fixed-maturity securities available for sale, amortized cost	$ 1,663,776	$ 1,811,359
Equity securities available for sale, cost	25,033	21,329
Trading securities, cost	29,262	9,793
Intangible assets, net
Accumulated amortization on definite-lived intangible assets	$ 59,920	$ 58,218
Stockholders’ equity:
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	500,000	500,000
Common stock, shares issued	59,868	64,883

XML

Share-Based Transactions (Notes)

6 Months Ended

Jun. 30, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-based transactions

Share-Based Transactions

The Company has outstanding equity awards under its Omnibus Incentive Plan ("OIP"). The OIP provides for the issuance of equity awards, including stock options, stock appreciation rights, restricted stock, deferred stock, RSUs, unrestricted stock as well as cash-based awards. In addition to time-based vesting requirements, awards granted under the OIP also may be subject to specified performance criteria. As of June 30, 2012, we had approximately 3.9 million shares available for future grants under this plan.

All outstanding management awards have time-based vesting requirements, vesting over three years. In connection with our granting of management equity awards, we recognized expense and tax benefit offsets as follows:

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
	(In thousands)
Management equity award expense	$	4,863	$	4,280	$	9,311	$	7,705
Tax benefit associated with management equity awards	1,183		1,465		2,229		2,639

Management equity award expense reflects vesting activity related to the 2011 and 2010 management equity grants as well as management equity grants of approximately 441,900 shares awarded on February 22, 2012 at $25.45, all less a nominal forfeiture adjustment. As of June 30, 2012, total compensation cost not yet recognized in our financial statements related to management equity awards was $24.4 million, all of which was related to equity awards with time-based vesting conditions yet to be reached. We expect to recognize these amounts over a weighted-average period of approximately one year, nine months.

Our quarterly incentive awards to our sales force leaders have performance-based vesting requirements for which the grant and the service period occur within the same calendar quarter. These awards are granted in the form of RSUs that vest upon the conclusion of the quarterly contest and are subject to sale restrictions expiring over the three years subsequent to vesting. Because the awards are subject to sale restrictions following their vesting, their fair value is discounted to reflect a corresponding illiquidity discount. To the extent they are granted in connection with successful policy acquisitions, portions of these awards are deferred and amortized in the same manner as other deferred policy acquisition costs. In connection with these awards, we recognized and deferred expense as follows:

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
	(In thousands)
Quarterly incentive awards expense deferred	$	1,652	$	2,048	$	3,425	$	3,102
Quarterly incentive awards expense recognized currently	—		269		—		1,111

As of June 30, 2012, all non-employee equity awards were fully vested with the exception of approximately 70,800 shares that vested on July 2, 2012. As such, any related compensation cost not recognized as either expense or deferred acquisition costs in our financial statements as of and through June 30, 2012 is immaterial.

All of our outstanding equity awards are eligible for dividends or dividend equivalents regardless of vesting status.

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2012	Jul. 31, 2012
Entity Information [Line Items]
Entity Registrant Name	Primerica, Inc.
Entity Central Index Key	0001475922
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Jun. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		60,028,946

XML

Commitments and Contingent Liabilities (Notes)

6 Months Ended

Jun. 30, 2012

Commitments and Contingencies Disclosure [Abstract]

Commitments and contingent liabilities

Commitments and Contingent Liabilities

Effective March 31, 2012, Peach Re entered into a Credit Facility Agreement with Deutsche Bank (the "Credit Facility Agreement") to support certain obligations for a portion of the reserves (commonly referred to as Regulation XXX reserves) related to level premium term life insurance policies ceded to Peach Re from Primerica Life under the Peach Re Coinsurance Agreement. In connection with this transaction, Primerica Life obtained regulatory approval for the payment of an extraordinary dividend of $150.0 million to the Parent Company, which was paid in April 2012.

Under the Credit Facility Agreement, Deutsche Bank issued a letter of credit in the initial amount of $450.0 million with a term of approximately fourteen years (the "LOC") for the benefit of Primerica Life, the direct parent of Peach Re. Subject to certain conditions, the amount of the LOC will be periodically increased up to a maximum amount of $510.0 million in 2014. Pursuant to the terms of the Credit Facility Agreement, in the event amounts are drawn under the LOC by Primerica Life, Peach Re will be obligated, subject to certain limited conditions, to reimburse Deutsche Bank for the amount of any draws and interest thereon. Peach Re has collateralized its obligations to Deutsche Bank by granting it a security interest in all of its assets with the exception of amounts held in a special account established to meet minimum asset thresholds required by state regulatory authorities.

In May 2011, we entered into an eight-year agreement with a third party to receive advisory services for our managed accounts product platform. In connection with this agreement, we are obligated to make asset-based fee payments (including minimum monthly payments) based on assets under management (AUM). We have made the minimum monthly payments and recognized expense accordingly of approximately $624,000 during the six months ended June 30, 2012. The minimum fee is approximately $624,000 for the remainder of 2012 and approximately $2.5 million per year in 2013 through 2018 and approximately $1.0 million in 2019. We will continue to recognize these fees as the corresponding advisory services are received.

In late 2011 and in 2012, numerous arbitration claims were filed with the Financial Industry Regulatory Association ("FINRA") against our subsidiary, PFS Investments, Inc. and certain of its registered representatives seeking unspecified damages arising from the allegation that the representatives improperly recommended that the claimants transfer their retirement benefits from the Florida Retirement System's defined benefit plan to its defined contribution plan. In addition, three lawsuits alleging the same claims have been filed against PFS Investments, Inc. and registered representatives and are pending in Palm Beach and Miami-Dade County Circuit Courts. The lawyer representing the claimants in these matters has informed us that he intends to pursue similar claims on behalf of other potential claimants and has engaged in solicitation activities directed to Florida state employees to generate interest in the cases. We believe we have meritorious defenses to the claims, and we intend to vigorously defend against them. We could, however, incur significant costs and liabilities defending and/or resolving these claims, and we are unable at this early stage to assess with confidence what effect, if any, the ultimate resolution of these claims will have on our business, financial position or results of operations.

The Company is involved from time to time in legal disputes, regulatory inquiries and arbitration proceedings in the normal course of business. These disputes are subject to uncertainties, including the large and/or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation. As such, the Company is unable to estimate the possible loss or range of loss that may result from these matters. While it is possible that an adverse outcome in certain cases could have a material adverse effect upon the Company's financial position, based on information currently known by the Company's management, in management's opinion, the outcomes of such pending investigations and legal proceedings are not likely to have such an effect.

XML

Condensed Consolidated Statements of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Revenues:
Direct premiums	$ 570,073	$ 560,881	$ 1,131,110	$ 1,112,950
Ceded premiums	(415,815)	(435,564)	(833,978)	(857,802)
Net premiums	154,258	125,317	297,132	255,148
Commissions and fees	106,761	108,698	210,666	214,814
Net investment income	23,605	27,229	49,702	55,855
Realized investment gains, including other-than-temporary impairment losses	4,321	2,035	6,452	2,362
Other, net	11,580	11,816	23,174	23,268
Total revenues	300,525	275,095	587,126	551,447
Benefits and expenses:
Benefits and claims	68,925	57,272	136,858	114,907
Amortization of deferred policy acquisition costs, net	28,205	23,975	54,736	47,204
Sales commissions	51,475	50,273	101,192	100,711
Insurance expenses	24,589	26,988	47,033	42,786
Insurance commissions	6,458	9,534	14,954	18,532
Interest expense	8,506	6,998	15,416	13,995
Other operating expenses	40,446	41,590	81,551	81,591
Total benefits and expenses	228,604	216,630	451,740	419,726
Income before income taxes	71,921	58,465	135,386	131,721
Income taxes	25,741	20,845	47,450	46,830
Net income	46,180	37,620	87,936	84,891
Earnings per share:
Basic (usd per share)	$ 0.73	$ 0.50	$ 1.35	$ 1.12
Diluted (usd per share)	$ 0.72	$ 0.49	$ 1.33	$ 1.11
Weighted-average shares used in computing earnings per share:
Basic (shares)	61,531	73,457	63,332	73,067
Diluted (shares)	62,687	74,201	64,481	74,028
Supplemental disclosures:
Total impairment losses	(203)	(66)	(904)	(333)
Impairment losses recognized in other comprehensive income before income taxes	76	0	563	0
Net impairment losses recognized in earnings	(127)	(66)	(341)	(333)
Other net realized investment gains	4,448	2,101	6,793	2,695
Realized investment gains, including other-than-temporary impairment losses	$ 4,321	$ 2,035	$ 6,452	$ 2,362

XML

Fair Value of Financial Instruments (Notes)

6 Months Ended

Jun. 30, 2012

Fair Value Disclosures [Abstract]

Financial Instruments

Fair Value of Financial Instruments

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

• Level 1. Quoted prices for identical instruments in active markets. Level 1 primarily consists of financial instruments whose value is based on quoted market prices in active markets, such as exchange-traded common stocks and actively traded mutual fund investments;

• Level 2. Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 includes those financial instruments that are valued using industry-standard pricing methodologies, models or other valuation methodologies. Various inputs are considered in deriving the fair value of the underlying financial instrument, including interest rate, credit spread, and foreign exchange rates. All significant inputs are observable, or derived from observable information in the marketplace or are supported by observable levels at which transactions are executed in the marketplace. Financial instruments in this category primarily include: certain public and private corporate fixed-maturity and equity securities; government or agency securities; certain mortgage- and asset-backed securities and certain non-exchange-traded derivatives, such as currency swaps and forwards; and

• Level 3. Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Level 3 consists of financial instruments whose fair value is estimated based on industry-standard pricing methodologies and models using significant inputs not based on, nor corroborated by, readily available market information. Valuations for this category primarily consist of non-binding broker quotes. Financial instruments in this category primarily include less liquid fixed-maturity corporate securities.

As of each reporting period, all assets and liabilities recorded at fair value are classified in their entirety based on the lowest level of input (Level 3 being the lowest). Significant levels of estimation and judgment are required to determine the fair value of certain of our investments. The factors influencing these estimations and judgments are subject to change in subsequent reporting periods.

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

	June 30, 2012
	Level 1		Level 2		Level 3		Total
	(In thousands)
Fair value assets:
Fixed-maturity securities:
U.S. government and agencies	$	—	$	9,869	$	—	$	9,869
Foreign government	—		111,384		—		111,384
States and political subdivisions	—		31,361		—		31,361
Corporates	249		1,290,884		7,089		1,298,222
Mortgage- and asset-backed securities	—		369,899		2,994		372,893
Total fixed-maturity securities	249		1,813,397		10,083		1,823,729
Equity securities	24,525		7,238		48		31,811
Trading securities	—		29,038		—		29,038
Separate accounts	—		2,500,640		—		2,500,640
Total fair value assets	$	24,774	$	4,350,313	$	10,131	$	4,385,218
Fair value liabilities:
Currency swaps	$	—	$	1,987	$	—	$	1,987
Separate accounts	—		2,500,640		—		2,500,640
Total fair value liabilities	$	—	$	2,502,627	$	—	$	2,502,627

	December 31, 2011
	Level 1		Level 2		Level 3		Total
	(In thousands)
Fair value assets:
Fixed-maturity securities:
U.S. government and agencies	$	—	$	10,985	$	—	$	10,985
Foreign government	—		111,845		—		111,845
States and political subdivisions	—		30,935		—		30,935
Corporates	256		1,349,021		4,924		1,354,201
Mortgage- and asset-backed securities	—		449,228		1,962		451,190
Total fixed-maturity securities	256		1,952,014		6,886		1,959,156
Equity securities	18,069		8,592		51		26,712
Trading securities	—		9,640		—		9,640
Separate accounts	—		2,408,598		—		2,408,598
Total fair value assets	$	18,325	$	4,378,844	$	6,937	$	4,404,106
Fair value liabilities:
Currency swaps	$	—	$	2,032	$	—	$	2,032
Separate accounts	—		2,408,598		—		2,408,598
Total fair value liabilities	$	—	$	2,410,630	$	—	$	2,410,630

In assessing fair value of our investments, we use a third-party pricing service for approximately 94% of our securities. The remaining securities are primarily thinly traded securities valued using models based on observable inputs on public corporate spreads having similar tenors (e.g., sector, average life and quality rating) and liquidity and yield based on quality rating, average life and treasury yields. All observable data inputs are corroborated by independent third-party data. In the absence of sufficient observable inputs, we utilize non-binding broker quotes, which are reflected in our Level 3 classification as we are unable to evaluate the valuation technique(s) or significant inputs used to develop the quotes. Therefore, we do not internally develop the quantitative unobservable inputs used in measuring the fair value of Level 3 investments. However, we do corroborate pricing information provided by our third-party pricing servicing by performing a review of selected securities. Our review activities include obtaining detailed information about the assumptions, inputs and methodologies used in pricing the security; documenting this information; and corroborating it by comparison to independently obtained prices and or independently developed pricing methodologies.

Furthermore, we perform internal reasonableness assessments on fair value determinations within our portfolio throughout the month and at month-end, including pricing variance analyses and comparisons to alternative pricing sources and benchmark returns. If a fair value appears unusual relative to these assessments, we will re-examine the inputs and may challenge a fair value assessment made by the pricing service. If there is a known pricing error, we will request a reassessment by the pricing service. If the pricing service is unable to perform the reassessment on a timely basis, we will determine the appropriate price by requesting a reassessment from an alternative pricing service or other qualified source as necessary. We do not adjust quotes or prices except in a rare circumstance to resolve a known error.

Because many fixed-maturity securities do not trade on a daily basis, fair value is determined using industry-standard methodologies by applying available market information through processes such as U.S. Treasury curves, benchmarking of similar securities, sector groupings, quotes from market participants and matrix pricing. Observable information is compiled and integrates relevant credit information, perceived market movements and sector news. Additionally, security prices are periodically back-tested to validate and/or refine models as conditions warrant. Market indicators and industry and economic events are also monitored as triggers to obtain additional data. For certain structured securities with limited trading activity, industry-standard pricing methodologies use adjusted market information, such as index prices or discounting expected future cash flows, to estimate fair value. If these measures are not deemed observable for a particular security, the security will be classified as Level 3 in the fair value hierarchy.

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

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

	Three months ended June 30,						Six months ended June 30,
	2012			2011			2012			2011
	(In thousands)
Level 3 assets, beginning of period	$	10,916		$	30,162		$	6,937		$	24,998
Net unrealized gains (losses) included in other comprehensive income	(504		)	(232		)	(336		)	(281		)
Net realized gains (losses) included in realized investment gains, including other-than-temporary impairment losses	45			871			(40		)	1,466
Purchases	1,117			—			2,416			4,000
Sales	—			(902		)	—			(3,823		)
Settlements	(384		)	(1,238		)	(738		)	(1,462		)
Transfers into Level 3	—			2			2,951			4,503
Transfers out of Level 3	(1,059		)	(16,398		)	(1,059		)	(17,136		)
Level 3 assets, end of period	$	10,131		$	12,265		$	10,131		$	12,265

We obtain independent pricing quotes based on observable inputs as of the end of the reporting period for all securities in Level 2. Those inputs include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, market bids/offers, quoted prices for similar instruments in markets that are not active, and other relevant data. We monitor these inputs for market indicators, industry and economic events. We recognize transfers into new levels and out of previous levels as of the end of the reporting period, including interim reporting periods, as applicable. There were no transfers between Level 1 and Level 2 during the six months ended June 30, 2012 and 2011. In addition, there were no transfers between Level 1 and Level 3 during the six months ended June 30, 2012 and 2011.

Invested assets included in the transfer from Level 2 to Level 3 during the three months ended June 30, 2011 and the six months ended June 30, 2012 and 2011 primarily were fixed-maturity investments for which we were unable to corroborate independent broker quotes with observable market data. Invested assets included in the transfer from Level 3 to Level 2 during the three and six months ended June 30, 2012 and 2011 primarily were fixed-maturity securities and fixed-maturity securities with embedded conversion options for which we were able to obtain independent pricing quotes based on observable inputs.

The table below is a summary of the estimated fair value for financial instruments.

	June 30, 2012				December 31, 2011
	Carrying value		Estimated fair value		Carrying value		Estimated fair value
	(In thousands)
Assets:
Fixed-maturity securities	$	1,823,729	$	1,823,729	$	1,959,156	$	1,959,156
Equity securities	31,811		31,811		26,712		26,712
Trading securities	29,038		29,038		9,640		9,640
Policy loans	24,187		24,187		25,982		25,982
Other invested assets	14		14		14		14
Deposit asset underlying 10% reinsurance agreement	75,436		75,436		59,975		59,975
Separate accounts	2,500,640		2,500,640		2,408,598		2,408,598
Liabilities:
Note payable	$	300,000	$	334,782	$	300,000	$	329,779
Currency swaps	1,987		1,987		2,032		2,032
Separate accounts	2,500,640		2,500,640		2,408,598		2,408,598

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

Recurring fair value measurements. Estimated fair values of investments in fixed-maturity securities are principally a function of current spreads and interest rates that are corroborated by independent third-party data. Therefore, the fair values presented are indicative of amounts we could realize or settle at the respective balance sheet date. We do not necessarily intend to dispose of or liquidate such instruments prior to maturity. Trading securities, which primarily consist of fixed-maturity securities, are carried at fair value. Equity securities, including common and non-redeemable preferred stocks, are carried at fair value. Currency swaps are stated at fair value. Segregated funds in separate accounts are carried at the underlying value of the variable insurance contracts, which is fair value.

Nonrecurring fair value measurements. Policy loans are carried at unpaid principal balances, which approximate fair value and are categorized as Level 3 fair value measurements. The deposit asset underlying the 10% reinsurance agreement represents the value of the assets backing the economic reserves held in support of a reinsurance agreement. The carrying value of this deposit asset approximates fair value, which is categorized as Level 3 in the fair value hierarchy. Other invested assets have a carrying value that approximates fair value and are categorized as Level 3 in the fair value hierarchy. The fair value of our note payable is a Level 2 fair value measurement and is based on observable inputs including prevailing interest rates and an estimated spread based on notes of comparable issuers and maturity.

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

XML

Investments (Notes)

6 Months Ended

Jun. 30, 2012

Investments [Abstract]

Investments

Investments

The period-end cost or amortized cost, gross unrealized gains and losses, and fair value of fixed-maturity and equity securities in our available-for-sale portfolio follow:

	June 30, 2012
	Cost or amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
	(In thousands)
Securities available for sale, carried at fair value:
Fixed-maturity securities:
U.S. government and agencies	$	8,981	$	888	$	—		$	9,869
Foreign government	97,414		14,118		(148		)	111,384
States and political subdivisions	27,839		3,524		(2		)	31,361
Corporates (1)	1,181,368		120,760		(3,906		)	1,298,222
Mortgage- and asset-backed securities	348,174		26,695		(1,976		)	372,893
Total fixed-maturity securities	1,663,776		165,985		(6,032		)	1,823,729
Equity securities	25,033		7,154		(376		)	31,811
Total fixed-maturity and equity securities	$	1,688,809	$	173,139	$	(6,408	)	$	1,855,540

____________________

(1) Includes $3.1 million of other-than-temporary impairment losses recognized in accumulated other comprehensive income.

	December 31, 2011
	Cost or amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
	(In thousands)
Securities available for sale, carried at fair value:
Fixed-maturity securities:
U.S. government and agencies	$	10,050	$	935	$	—		$	10,985
Foreign government	97,206		14,818		(179		)	111,845
States and political subdivisions	28,264		2,671		—			30,935
Corporates (1)	1,250,702		111,346		(7,847		)	1,354,201
Mortgage- and asset-backed securities	425,137		29,398		(3,345		)	451,190
Total fixed-maturity securities	1,811,359		159,168		(11,371		)	1,959,156
Equity securities	21,329		5,689		(306		)	26,712
Total fixed-maturity and equity securities	$	1,832,688	$	164,857	$	(11,677	)	$	1,985,868

____________________

(1) Includes $2.6 million of other-than-temporary impairment losses recognized in accumulated other comprehensive income.

Certain available-for-sale securities were sold during the three months ended June 30, 2012 to finance the repurchase of shares in April 2012 (see Note 7 for additional information).

The net effect on stockholders’ equity of unrealized gains and losses on available-for-sale securities was as follows:

	June 30, 2012			December 31, 2011
	(In thousands)
Net unrealized investment gains (losses) including foreign currency translation adjustment and other-than-temporary impairments:
Fixed-maturity and equity securities	$	166,731		$	153,180
Currency swaps	(23		)	96
Foreign currency translation adjustment	(4,929		)	(6,481		)
Other-than-temporary impairments	3,124			2,562
Net unrealized investment gains excluding foreign currency translation adjustment and other-than-temporary impairments	164,903			149,357
Deferred income taxes	(57,716		)	(52,275		)
Net unrealized investment gains excluding foreign currency translation adjustment and other-than-temporary impairments, net of tax	$	107,187		$	97,082

We also maintain a portfolio of fixed-maturity securities that are classified as trading securities. The carrying value of these securities was as follows:

	June 30, 2012		December 31, 2011
	(In thousands)
Fixed-maturity securities classified as trading, carried at fair value	$	29,038	$	9,640

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

As required by law, the Company has investments on deposit with governmental authorities and banks for the protection of policyholders. The fair value of investments on deposit was as follows:

	June 30, 2012		December 31, 2011
	(In thousands)
Fair value of investments on deposit with governmental authorities	$	19,309	$	19,100

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

	June 30, 2012		December 31, 2011
	(In thousands)
Securities lending collateral	$	143,963	$	149,358

The scheduled contractual maturity distribution of the available-for-sale fixed-maturity portfolio at June 30, 2012 follows.

	Amortized cost		Fair value
	(In thousands)
Due in one year or less	$	112,493	$	116,017
Due after one year through five years	551,201		594,914
Due after five years through 10 years	603,657		684,617
Due after 10 years	48,251		55,288
	1,315,602		1,450,836
Mortgage- and asset-backed securities	348,174		372,893
Total fixed-maturity securities	$	1,663,776	$	1,823,729

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

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

	Three months ended June 30,						Six months ended June 30,
	2012			2011			2012			2011
	(In thousands)
Fixed-maturity securities	$	23,797		$	27,462		$	49,559		$	56,474
Equity securities	244			165			467			353
Policy loans and other invested assets	261			320			611			648
Cash and cash equivalents	111			65			246			135
Market return on deposit asset underlying 10% reinsurance agreement	574			650			1,604			1,159
Gross investment income	24,987			28,662			52,487			58,769
Investment expenses	(1,382		)	(1,433		)	(2,785		)	(2,914		)
Net investment income	$	23,605		$	27,229		$	49,702		$	55,855

The components of net realized investment gains (losses) as well as details on gross realized investment gains and losses and proceeds from sales or other redemptions were as follows:

	Three months ended June 30,						Six months ended June 30,
	2012			2011			2012			2011
	(In thousands)
Net realized investment gains (losses):
Gross gains from sales	$	4,506		$	2,145		$	6,542		$	2,957
Gross losses from sales	(56		)	(6		)	(57		)	(331		)
Gross gains from securities transferred from available-for-sale to trading	323			—			323			—
Gross losses from securities transferred from available-for-sale to trading	(6		)	—			(6		)	—
Other-than-temporary impairment losses	(127		)	(66		)	(341		)	(333		)
Gains (losses) from bifurcated options	(319		)	(38		)	(9		)	69
Net realized investment gains (losses)	$	4,321		$	2,035		$	6,452		$	2,362
Gross realized investment gains (losses) reclassified from accumulated other comprehensive income	$	4,640		$	2,073		$	6,461		$	2,293
Proceeds from sales or other redemptions	$	196,096		$	106,848		$	338,883		$	270,608

Other-Than-Temporary Impairment. We conduct a review each quarter to identify and evaluate impaired investments that have indications of possible other-than-temporary impairment ("OTTI"). An investment in a debt or equity security is impaired if its fair value falls below its cost. Factors considered in determining whether an unrealized loss is temporary include the length of time and extent to which fair value has been below cost, the financial condition and near-term prospects for the issue, and our ability and intent to hold the investment for a period of time sufficient to allow for any anticipated recovery, which may be maturity. For additional information, see Note 3 to the consolidated and combined financial statements in our 2011 Annual Report.

Investments in fixed-maturity and equity securities with a cost basis in excess of fair value were as follows:

	June 30, 2012		December 31, 2011
	(In thousands)
Fixed-maturity and equity securities with cost basis in excess of fair value	$	126,930	$	286,718

The following tables summarize, for all securities in an unrealized loss position, the aggregate fair value and the gross unrealized loss by length of time such securities have continuously been in an unrealized loss position:

	June 30, 2012
	Less than 12 months						12 months or longer
	Fair value		Unrealized losses			Number of securities	Fair value		Unrealized losses			Number of securities
	(Dollars in thousands)
Fixed-maturity securities:
Foreign government	$	6,945	$	(148	)	12	$	—	$	—		0
States and political subdivisions	1,750		(2		)	3	—		—			0
Corporates	75,791		(2,282		)	125	13,030		(1,624		)	23
Mortgage- and asset-backed securities	9,878		(114		)	14	11,101		(1,862		)	22
Total fixed-maturity securities	94,364		(2,546		)		24,131		(3,486		)
Equity securities	1,314		(75		)	13	713		(301		)	12
Total fixed-maturity and equity securities	$	95,678	$	(2,621	)		$	24,844	$	(3,787	)

	December 31, 2011
	Less than 12 months						12 months or longer
	Fair value		Unrealized losses			Number of securities	Fair value		Unrealized losses			Number of securities
	(Dollars in thousands)
Fixed-maturity securities:
Foreign government	$	7,150	$	(179	)	10	$	—	$	—		0
States and political subdivisions	—		—			0	—		—			0
Corporates	188,643		(6,979		)	185	4,092		(868		)	11
Mortgage- and asset-backed securities	49,026		(478		)	60	25,280		(2,867		)	30
Total fixed-maturity securities	244,819		(7,636		)		29,372		(3,735		)
Equity securities	850		(306		)	78	—		—			0
Total fixed-maturity and equity securities	$	245,669	$	(7,942	)		$	29,372	$	(3,735	)

The amortized cost and fair value of available-for-sale fixed-maturity securities in default were as follows:

	June 30, 2012				December 31, 2011
	Amortized cost		Fair value		Amortized cost		Fair value
	(In thousands)
Fixed-maturity securities in default	$	3,704	$	4,695	$	3,983	$	5,168

Impairment charges recognized in earnings on available-for-sale securities were as follows:

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
	(In thousands)
Impairments on fixed-maturity securities not in default	$	126	$	63	$	340	$	324
Impairments on fixed-maturity securities in default	—		—		—		4
Impairments on equity securities	1		3		1		5
Total impairment charges	$	127	$	66	$	341	$	333

The fixed-maturity and equity securities noted above were considered to be other-than-temporarily impaired due to adverse credit events, such as news of an impending filing for bankruptcy; analyses of the issuer’s most recent financial statements or other information in which liquidity deficiencies, significant losses and large declines in capitalization were evident; or analyses of rating agency information for issuances with severe ratings downgrades that indicated a significant increase in the possibility of default.

As of June 30, 2012, the unrealized losses on our invested asset portfolio were largely caused by interest rate sensitivity and changes in credit spreads. We believe that fluctuations caused by interest rate movement have little bearing on the recoverability of our investments. Because the declines in fair value were mostly attributable to changes in interest rates and not credit quality, and because we have the ability to hold these investments until a market price recovery or maturity as well as no present intention to dispose of them, we do not consider these investments to be other-than-temporarily impaired.

Net impairment losses recognized in earnings were as follows:

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
	(In thousands)
Impairment losses related to securities which the Company does not intend to sell or more-likely-than-not will not be required to sell:
Total OTTI losses recognized	$	161	$	2	$	861	$	2
Less portion of OTTI loss recognized in accumulated other comprehensive income (loss)	76		—		563		—
Net impairment losses recognized in earnings for securities which the Company does not intend to sell or more-likely-than-not will not be required to sell before recovery	85		2		298		2
OTTI losses recognized in earnings for securities which the Company intends to sell or more-likely-than-not will be required to sell before recovery	42		64		43		331
Net impairment losses recognized in earnings	$	127	$	66	$	341	$	333

The roll-forward of the credit-related losses recognized in income for all fixed-maturity securities still held follows.

	Three months ended June 30,						Six months ended June 30,
	2012			2011			2012			2011
	(In thousands)
Cumulative OTTI credit losses recognized for securities still held, beginning of period	$	32,213		$	40,634		$	34,072		$	41,129
Additions for OTTI securities where no credit losses were recognized prior to the beginning of the period	10			—			10			4
Additions for OTTI securities where credit losses have been recognized prior to the beginning of the period	116			63			330			324
Reductions due to sales, maturities or calls of credit impaired securities	(911		)	(807		)	(2,984		)	(1,567		)
Cumulative OTTI credit losses recognized for securities still held, end of period	$	31,428		$	39,890		$	31,428		$	39,890

Derivatives. We use foreign currency swaps to reduce our foreign exchange risk due to direct investment in foreign currency-denominated debt securities. The aggregate notional balance and fair value of these currency swaps follow.

	June 30, 2012			December 31, 2011
	(In thousands)
Aggregate notional balance of currency swaps	$	5,878		$	5,878
Aggregate fair value of currency swaps	(1,987		)	(2,032		)

The change in fair value of these currency swaps is reflected in other comprehensive income as they effectively hedge the variability in cash flows from these foreign currency-denominated debt securities.

The embedded conversion options associated with fixed-maturity securities are bifurcated from the fixed-maturity security host contracts and separately recognized as equity securities. We recognize the change in fair value of these bifurcated conversion options in realized investment gains, including other-than-temporary impairment losses. The fair value of these bifurcated options follows.

	June 30, 2012		December 31, 2011
	(In thousands)
Aggregate fair value of embedded conversion options bifurcated from host contract	$	7,227	$	8,583

We have a deferred loss related to closed forward contracts that were used to mitigate our exposure to foreign currency exchange rates that resulted from the net investment in our Canadian operations. The amount of deferred loss included in accumulated other comprehensive income was as follows:

	June 30, 2012		December 31, 2011
	(In thousands)
Deferred loss related to closed forward contracts	$	26,385	$	26,385

While we have no current intention to do so, these deferred losses will not be recognized until such time as we sell or substantially liquidate our Canadian operations

XML

Investments (Tables)

6 Months Ended

Jun. 30, 2012

Investments [Abstract]

Schedule of available-for-sale securities reconciliation

The period-end cost or amortized cost, gross unrealized gains and losses, and fair value of fixed-maturity and equity securities in our available-for-sale portfolio follow:

	June 30, 2012
	Cost or amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
	(In thousands)
Securities available for sale, carried at fair value:
Fixed-maturity securities:
U.S. government and agencies	$	8,981	$	888	$	—		$	9,869
Foreign government	97,414		14,118		(148		)	111,384
States and political subdivisions	27,839		3,524		(2		)	31,361
Corporates (1)	1,181,368		120,760		(3,906		)	1,298,222
Mortgage- and asset-backed securities	348,174		26,695		(1,976		)	372,893
Total fixed-maturity securities	1,663,776		165,985		(6,032		)	1,823,729
Equity securities	25,033		7,154		(376		)	31,811
Total fixed-maturity and equity securities	$	1,688,809	$	173,139	$	(6,408	)	$	1,855,540

____________________

(1) Includes $3.1 million of other-than-temporary impairment losses recognized in accumulated other comprehensive income.

	December 31, 2011
	Cost or amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
	(In thousands)
Securities available for sale, carried at fair value:
Fixed-maturity securities:
U.S. government and agencies	$	10,050	$	935	$	—		$	10,985
Foreign government	97,206		14,818		(179		)	111,845
States and political subdivisions	28,264		2,671		—			30,935
Corporates (1)	1,250,702		111,346		(7,847		)	1,354,201
Mortgage- and asset-backed securities	425,137		29,398		(3,345		)	451,190
Total fixed-maturity securities	1,811,359		159,168		(11,371		)	1,959,156
Equity securities	21,329		5,689		(306		)	26,712
Total fixed-maturity and equity securities	$	1,832,688	$	164,857	$	(11,677	)	$	1,985,868

____________________

(1) Includes $2.6 million of other-than-temporary impairment losses recognized in accumulated other comprehensive income.

Unrealized gain (Loss) on investments

The net effect on stockholders’ equity of unrealized gains and losses on available-for-sale securities was as follows:

	June 30, 2012			December 31, 2011
	(In thousands)
Net unrealized investment gains (losses) including foreign currency translation adjustment and other-than-temporary impairments:
Fixed-maturity and equity securities	$	166,731		$	153,180
Currency swaps	(23		)	96
Foreign currency translation adjustment	(4,929		)	(6,481		)
Other-than-temporary impairments	3,124			2,562
Net unrealized investment gains excluding foreign currency translation adjustment and other-than-temporary impairments	164,903			149,357
Deferred income taxes	(57,716		)	(52,275		)
Net unrealized investment gains excluding foreign currency translation adjustment and other-than-temporary impairments, net of tax	$	107,187		$	97,082

Trading securities (and certain trading assets)

We also maintain a portfolio of fixed-maturity securities that are classified as trading securities. The carrying value of these securities was as follows:

	June 30, 2012		December 31, 2011
	(In thousands)
Fixed-maturity securities classified as trading, carried at fair value	$	29,038	$	9,640

Fair value investments on deposit with governmental authorities

As required by law, the Company has investments on deposit with governmental authorities and banks for the protection of policyholders. The fair value of investments on deposit was as follows:

	June 30, 2012		December 31, 2011
	(In thousands)
Fair value of investments on deposit with governmental authorities	$	19,309	$	19,100

Financial instruments held as collateral

Cash collateral received and reinvested was as follows:

	June 30, 2012		December 31, 2011
	(In thousands)
Securities lending collateral	$	143,963	$	149,358

Investments classified by contractual maturity date

The scheduled contractual maturity distribution of the available-for-sale fixed-maturity portfolio at June 30, 2012 follows.

	Amortized cost		Fair value
	(In thousands)
Due in one year or less	$	112,493	$	116,017
Due after one year through five years	551,201		594,914
Due after five years through 10 years	603,657		684,617
Due after 10 years	48,251		55,288
	1,315,602		1,450,836
Mortgage- and asset-backed securities	348,174		372,893
Total fixed-maturity securities	$	1,663,776	$	1,823,729

Investment income

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

	Three months ended June 30,						Six months ended June 30,
	2012			2011			2012			2011
	(In thousands)
Fixed-maturity securities	$	23,797		$	27,462		$	49,559		$	56,474
Equity securities	244			165			467			353
Policy loans and other invested assets	261			320			611			648
Cash and cash equivalents	111			65			246			135
Market return on deposit asset underlying 10% reinsurance agreement	574			650			1,604			1,159
Gross investment income	24,987			28,662			52,487			58,769
Investment expenses	(1,382		)	(1,433		)	(2,785		)	(2,914		)
Net investment income	$	23,605		$	27,229		$	49,702		$	55,855

Schedule of realized gain (loss)

The components of net realized investment gains (losses) as well as details on gross realized investment gains and losses and proceeds from sales or other redemptions were as follows:

	Three months ended June 30,						Six months ended June 30,
	2012			2011			2012			2011
	(In thousands)
Net realized investment gains (losses):
Gross gains from sales	$	4,506		$	2,145		$	6,542		$	2,957
Gross losses from sales	(56		)	(6		)	(57		)	(331		)
Gross gains from securities transferred from available-for-sale to trading	323			—			323			—
Gross losses from securities transferred from available-for-sale to trading	(6		)	—			(6		)	—
Other-than-temporary impairment losses	(127		)	(66		)	(341		)	(333		)
Gains (losses) from bifurcated options	(319		)	(38		)	(9		)	69
Net realized investment gains (losses)	$	4,321		$	2,035		$	6,452		$	2,362
Gross realized investment gains (losses) reclassified from accumulated other comprehensive income	$	4,640		$	2,073		$	6,461		$	2,293
Proceeds from sales or other redemptions	$	196,096		$	106,848		$	338,883		$	270,608

Schedule of Available-for-sale Securities in Continuous Unrealized Loss Position, Cost Basis

Investments in fixed-maturity and equity securities with a cost basis in excess of fair value were as follows:

	June 30, 2012		December 31, 2011
	(In thousands)
Fixed-maturity and equity securities with cost basis in excess of fair value	$	126,930	$	286,718

Schedule of temporary impairment losses, investments

The following tables summarize, for all securities in an unrealized loss position, the aggregate fair value and the gross unrealized loss by length of time such securities have continuously been in an unrealized loss position:

	June 30, 2012
	Less than 12 months						12 months or longer
	Fair value		Unrealized losses			Number of securities	Fair value		Unrealized losses			Number of securities
	(Dollars in thousands)
Fixed-maturity securities:
Foreign government	$	6,945	$	(148	)	12	$	—	$	—		0
States and political subdivisions	1,750		(2		)	3	—		—			0
Corporates	75,791		(2,282		)	125	13,030		(1,624		)	23
Mortgage- and asset-backed securities	9,878		(114		)	14	11,101		(1,862		)	22
Total fixed-maturity securities	94,364		(2,546		)		24,131		(3,486		)
Equity securities	1,314		(75		)	13	713		(301		)	12
Total fixed-maturity and equity securities	$	95,678	$	(2,621	)		$	24,844	$	(3,787	)

	December 31, 2011
	Less than 12 months						12 months or longer
	Fair value		Unrealized losses			Number of securities	Fair value		Unrealized losses			Number of securities
	(Dollars in thousands)
Fixed-maturity securities:
Foreign government	$	7,150	$	(179	)	10	$	—	$	—		0
States and political subdivisions	—		—			0	—		—			0
Corporates	188,643		(6,979		)	185	4,092		(868		)	11
Mortgage- and asset-backed securities	49,026		(478		)	60	25,280		(2,867		)	30
Total fixed-maturity securities	244,819		(7,636		)		29,372		(3,735		)
Equity securities	850		(306		)	78	—		—			0
Total fixed-maturity and equity securities	$	245,669	$	(7,942	)		$	29,372	$	(3,735	)

Other than temporary impairment, available for sale fixed maturity securities in default

The amortized cost and fair value of available-for-sale fixed-maturity securities in default were as follows:

	June 30, 2012				December 31, 2011
	Amortized cost		Fair value		Amortized cost		Fair value
	(In thousands)
Fixed-maturity securities in default	$	3,704	$	4,695	$	3,983	$	5,168

Other than temporary impairment, credit losses recognized in earnings

Impairment charges recognized in earnings on available-for-sale securities were as follows:

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
	(In thousands)
Impairments on fixed-maturity securities not in default	$	126	$	63	$	340	$	324
Impairments on fixed-maturity securities in default	—		—		—		4
Impairments on equity securities	1		3		1		5
Total impairment charges	$	127	$	66	$	341	$	333

Impairment losses recognized in earnings, net

Net impairment losses recognized in earnings were as follows:

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
	(In thousands)
Impairment losses related to securities which the Company does not intend to sell or more-likely-than-not will not be required to sell:
Total OTTI losses recognized	$	161	$	2	$	861	$	2
Less portion of OTTI loss recognized in accumulated other comprehensive income (loss)	76		—		563		—
Net impairment losses recognized in earnings for securities which the Company does not intend to sell or more-likely-than-not will not be required to sell before recovery	85		2		298		2
OTTI losses recognized in earnings for securities which the Company intends to sell or more-likely-than-not will be required to sell before recovery	42		64		43		331
Net impairment losses recognized in earnings	$	127	$	66	$	341	$	333

Other Than Temporary Impairment Credit Losses Recognized In Earnings, Fixed Maturity Securities Still Held

The roll-forward of the credit-related losses recognized in income for all fixed-maturity securities still held follows.

	Three months ended June 30,						Six months ended June 30,
	2012			2011			2012			2011
	(In thousands)
Cumulative OTTI credit losses recognized for securities still held, beginning of period	$	32,213		$	40,634		$	34,072		$	41,129
Additions for OTTI securities where no credit losses were recognized prior to the beginning of the period	10			—			10			4
Additions for OTTI securities where credit losses have been recognized prior to the beginning of the period	116			63			330			324
Reductions due to sales, maturities or calls of credit impaired securities	(911		)	(807		)	(2,984		)	(1,567		)
Cumulative OTTI credit losses recognized for securities still held, end of period	$	31,428		$	39,890		$	31,428		$	39,890

Schedule of derivative instruments, currency swaps

The aggregate notional balance and fair value of these currency swaps follow.

	June 30, 2012			December 31, 2011
	(In thousands)
Aggregate notional balance of currency swaps	$	5,878		$	5,878
Aggregate fair value of currency swaps	(1,987		)	(2,032		)

Schedule of derivative instruments, embedded conversion options

The fair value of these bifurcated options follows.

	June 30, 2012		December 31, 2011
	(In thousands)
Aggregate fair value of embedded conversion options bifurcated from host contract	$	7,227	$	8,583

Schedule of derivative instruments, effect on other comprehensive income (loss)

The amount of deferred loss included in accumulated other comprehensive income was as follows:

	June 30, 2012		December 31, 2011
	(In thousands)
Deferred loss related to closed forward contracts	$	26,385	$	26,385

XML

Subsequent Events (Notes)

6 Months Ended

Jun. 30, 2012

Subsequent Events [Abstract]

Subsequent events

Subsequent Events

On August 6, 2012, our Board of Directors authorized a share repurchase program of up to $75.0 million of the Company's common stock. This share repurchase program may be discontinued at any time by the Board of Directors and the Company has no obligation to repurchase any amount of its common stock under the program.

XML

Stockholders' Equity (Notes)

6 Months Ended

Jun. 30, 2012

Stockholders' Equity Note [Abstract]

Stockholders' equity

Stockholders’ Equity

A reconciliation of the number of shares of our common stock follows.

	Six months ended June 30,
	2012		2011
	(In thousands)
Common stock, beginning of period	64,883		72,843
Shares of restricted common stock issued, net	438		345
Shares of common stock issued upon lapse of restricted stock units ("RSUs")	712		584
Common stock retired	(6,165	)	(169	)
Common stock, end of period	59,868		73,603

The above reconciliation excludes RSUs which do not have voting rights and are subject to sale restrictions. As the restrictions lapse during the three years following the issuance of the RSUs, we will issue common shares with voting rights. As of June 30, 2012, we had a total of approximately 1.7 million RSUs outstanding. Approximately 178,000 RSUs were granted during the six months ended June 30, 2012 and approximately 246,000 RSUs were granted during the six months ended June 30, 2011.

On April 26, 2012, we repurchased 5,736,137 shares of our common stock beneficially owned by certain private equity funds managed by Warburg Pincus LLC ("Warburg Pincus") at $26.15 per share, for a total purchase price of approximately $150.0 million. The per-share purchase price was determined based on the closing price of our common stock on April 17, 2012, which was the date the agreement to repurchase the shares was executed. As of June 30, 2012, Warburg Pincus owned approximately 18% of the Company's outstanding common stock. At June 30, 2012, Warburg Pincus also owned warrants to purchase 4,103,110 additional shares of our common stock at an exercise price of $18.00 per share. These warrants expire in April 2017.

XML

Reinsurance (Notes)

6 Months Ended

Jun. 30, 2012

Reinsurance Disclosures [Abstract]

Reinsurance

Reinsurance

Reinsurance ceded arrangements do not relieve the Company of its primary obligation to the policyholder. We monitor the concentration of credit risk we have with any reinsurer, as well as the financial condition of the reinsurers. Details on in-force life insurance follow.

	June 30, 2012			December 31, 2011
	(Dollars in thousands)
Direct life insurance in force	$	672,899,761		$	669,938,841
Amounts ceded to other companies	(598,719,363		)	(596,975,143		)
Net life insurance in force	$	74,180,398		$	72,963,698
Percentage of reinsured life insurance in force	89		%	89		%

Due from reinsurers includes ceded reserve balances and ceded claim liabilities. Reinsurance receivable and financial strength ratings by reinsurer were as follows:

	June 30, 2012			December 31, 2011
	Reinsurance receivable		A.M. Best rating	Reinsurance receivable		A.M. Best rating
	(In thousands)
Prime Reinsurance Company (1)	$	2,471,318	NR	$	2,438,723	NR
Financial Reassurance Company 2010, Ltd. (1)	338,645		NR	335,396		NR
American Health and Life Insurance Company (1)	166,687		A-	164,387		A-
Due from Citi affiliate reinsurers	2,976,650			2,938,506
Swiss Re Life & Health America Inc. (2)	254,414		A+	252,912		A+
SCOR Global Life Reinsurance Companies	148,874		A	143,409		A
Generali USA Life Reassurance Company	113,820		A-	114,774		A-
Transamerica Reinsurance Companies	101,709		A+	103,873		A+
Munich American Reassurance Company	97,543		A+	99,240		A+
Korean Reinsurance Company	82,655		A	82,755		A
RGA Reinsurance Company	69,338		A+	67,740		A+
All other reinsurers	58,025		—	52,109		—
Due from reinsurers	$	3,903,028		$	3,855,318

____________________ 

NR – not rated

(1) Amounts shown are net of their share of the reinsurance recoverable from other reinsurers.

(2) Includes amounts ceded to Lincoln National Life Insurance and 100% retroceded to Swiss Re Life & Health America Inc.

XML

Notes Payable (Notes)

6 Months Ended

Jun. 30, 2012

Debt Disclosure [Abstract]

Notes payable

Notes Payable

In April 2010, we issued to Citi a $300.0 million note (the "Citi note") as part of our corporate reorganization. The Citi note bore interest at an annual rate of 5.5%, payable semi-annually in arrears on January 15 and July 15. It was scheduled to mature on March 31, 2015. The Citi note required us to use our commercially reasonable efforts to repay the note in full at certain mutually agreeable dates, based on certain conditions. We were in compliance with the covenants of the Citi note at June 30, 2012. No events of default or defaults occurred during the six months ended June 30, 2012.

On July 16, 2012, we issued $375.0 million in principal amount of senior notes (the "Senior Notes") and used $300.0 million of the net cash proceeds to repay the Citi note in whole at a redemption price equal to 100% of the outstanding principal amount. We issued the Senior Notes at a price of 99.843% of the principal amount with an annual interest rate of 4.750%, payable semi-annually in arrears on January 15 and July 15, commencing on January 15, 2013. The Senior Notes mature on July 15, 2022.

As unsecured senior obligations, the Senior Notes rank equally in right of payment with all existing and future unsubordinated indebtedness. They will rank senior in right of payment to all existing and future subordinated indebtedness and are structurally subordinated in right of payment to all existing and future liabilities of our subsidiaries. In addition, the Senior Notes contain covenants that restrict our ability to, among other things, create or incur any indebtedness that is secured by a lien on the capital stock of certain of our subsidiaries, and merge, consolidate or sell all or substantially all of our properties and assets.

XML

Earnings Per Share

6 Months Ended

Jun. 30, 2012

Earnings Per Share [Abstract]

Earnings per share

Earnings Per Share ("EPS")

The Company has outstanding common stock, warrants, and equity awards. Both the vested and unvested equity awards maintain non-forfeitable dividend rights that result in dividend payment obligations on a one-to-one ratio with common shares for any future dividend declarations. These equity awards are deemed participating securities for purposes of calculating EPS.

As a result of issuing equity awards that are deemed participating securities, we calculate EPS using the two-class method. Under the two-class method, we allocate earnings to common shares and to fully vested equity awards. Earnings attributable to unvested equity awards, along with the corresponding share counts, are excluded from EPS as reflected in our consolidated statements of income.

In calculating basic EPS, we deduct any dividends and undistributed earnings allocated to unvested equity awards from net income and then divide the result by the weighted-average number of common shares and fully vested equity awards outstanding for the period.

We determine the potential dilutive effect of warrants on EPS using the treasury-stock method. Under this method, we utilize the exercise price to determine the amount of cash that would be available to repurchase shares if the warrants were exercised. We then use the average market price of our common shares during the reporting period to determine how many shares we could repurchase with the cash raised from the exercise. The net incremental share count issued represents the potential dilutive securities. We then reallocate earnings to common shares and fully vested equity awards incorporating the increased, fully diluted share count to determine diluted EPS.

The calculation of basic and diluted EPS follows.

	Three months ended June 30,						Six months ended June 30,
	2012			2011			2012			2011
	(In thousands, except per-share amounts)
Basic EPS
Numerator:
Net income	$	46,180		$	37,620		$	87,936		$	84,891
Income attributable to unvested participating securities	(1,111		)	(1,097		)	(2,498		)	(2,837		)
Net income used in calculating basic EPS	$	45,069		$	36,523		$	85,438		$	82,054
Denominator:
Weighted-average vested shares	61,531			73,457			63,332			73,067
Basic EPS	$	0.73		$	0.50		$	1.35		$	1.12
Diluted EPS
Numerator:
Net income	$	46,180		$	37,620		$	87,936		$	84,891
Income attributable to unvested participating securities	(1,092		)	(1,087		)	(2,457		)	(2,802		)
Net income used in calculating diluted EPS	$	45,088		$	36,533		$	85,479		$	82,089
Denominator:
Weighted-average vested shares	62,687			74,201			64,481			74,028
Diluted EPS	$	0.72		$	0.49		$	1.33		$	1.11

XML

Securities available for sale, carried at fair value (Details) (USD $)	Jun. 30, 2012	Dec. 31, 2011
Schedule of Available-for-sale Securities [Line Items]
Cost or amortized cost	$ 1,688,809,000	$ 1,832,688,000
Gross unrealized gains	173,139,000	164,857,000
Gross unrealized losses	(6,408,000)	(11,677,000)
Fair value	1,855,540,000	1,985,868,000
Fixed-maturity securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost or amortized cost	1,663,776,000	1,811,359,000
Gross unrealized gains	165,985,000	159,168,000
Gross unrealized losses	(6,032,000)	(11,371,000)
Fair value	1,823,729,000	1,959,156,000
U.S. government and agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost or amortized cost	8,981,000	10,050,000
Gross unrealized gains	888,000	935,000
Gross unrealized losses	0	0
Fair value	9,869,000	10,985,000
Foreign government [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost or amortized cost	97,414,000	97,206,000
Gross unrealized gains	14,118,000	14,818,000
Gross unrealized losses	(148,000)	(179,000)
Fair value	111,384,000	111,845,000
States and political subdivisions [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost or amortized cost	27,839,000	28,264,000
Gross unrealized gains	3,524,000	2,671,000
Gross unrealized losses	(2,000)	0
Fair value	31,361,000	30,935,000
Corporates [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost or amortized cost	1,181,368,000	1,250,702,000
Gross unrealized gains	120,760,000	111,346,000
Gross unrealized losses	(3,906,000)	(7,847,000)
Fair value	1,298,222,000	1,354,201,000
Other-than-temporary impairment losses recognized in accumulated other comprehensive income	3,100,000	2,600,000
Asset-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost or amortized cost	348,174,000	425,137,000
Gross unrealized gains	26,695,000	29,398,000
Gross unrealized losses	(1,976,000)	(3,345,000)
Fair value	372,893,000	451,190,000
Equity securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost or amortized cost	25,033,000	21,329,000
Gross unrealized gains	7,154,000	5,689,000
Gross unrealized losses	(376,000)	(306,000)
Fair value	$ 31,811,000	$ 26,712,000

XML

Commitments and Contingent Liabilities Textuals (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2012
Commitments and Contingencies Disclosure [Abstract]
Extraordinary dividends paid to parent company	$ 150.0
Line of Credit Facility [Line Items]
Term of agreement	14 years
Letter of Credit [Member]
Line of Credit Facility [Line Items]
Current borrowing capacity	450.0
Term of agreement	14 years
Maximum borrowing capacity	$ 510.0

XML

Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2012

Accounting Policies [Abstract]

Deferred policy acquisition costs, impact of adoption

The impact of adoption was as follows:

	(In thousands, except per-share amounts)
Reduction as of January 1, 2011:
Deferred policy acquisition costs, net	$	114,265
Stockholders' equity	74,964
Reduction as of December 31, 2011:
Deferred policy acquisition costs, net	$	146,152
Stockholders' equity	95,991
Reduction for the three months ended June 30, 2011:
Income before income taxes	$	9,696
Net income	6,403
Basic earnings per share	0.08
Diluted earnings per share	0.09
Reduction for the six months ended June 30, 2011:
Income before income taxes	$	17,585
Net income	11,599
Basic earnings per share	0.16
Diluted earnings per share	0.15

Deferred policy acquisition costs, balance roll forward

The balances of and activity in DAC, which reflects the retrospective adoption of ASU 2010-26 for all periods presented, were as follows:

	Six months ended June 30,
	2012			2011
	(In thousands)
DAC balance, beginning of period	$	904,485		$	738,946
Capitalization	141,151			134,704
Amortization	(54,736		)	(47,204		)
Foreign exchange and other	(342		)	7,338
DAC balance, end of period	$	990,558		$	833,784

XML

Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2012

Stockholders' Equity Note [Abstract]

Schedule of stockholders equity

A reconciliation of the number of shares of our common stock follows.

	Six months ended June 30,
	2012		2011
	(In thousands)
Common stock, beginning of period	64,883		72,843
Shares of restricted common stock issued, net	438		345
Shares of common stock issued upon lapse of restricted stock units ("RSUs")	712		584
Common stock retired	(6,165	)	(169	)
Common stock, end of period	59,868		73,603

XML

Share-Based Transactions Textuals (Details) (USD $) In Millions, except Share data, unless otherwise specified	6 Months Ended		0 Months Ended	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Feb. 22, 2012 Management equity awards [Member]	Jun. 30, 2012 Management equity awards [Member]	Jun. 30, 2012 Quarterly incentive awards [Member]
Share Based Compensation Arrangement By Share Based Payment Award Line Items
Shares available for future grants	3,900,000
Management award vesting period				3 years
Shares of restricted common stock issued	438,000	345,000	441,900
Shares of restricted common stock issued, per share grant date fair value			$ 25.45
Total compensation cost not yet recognized				$ 24.4
Estimated recognition period-weighted average				1 year 9 months
Sales restrictions					3 years
Equity instruments other than options, nonvested					70,800

XML

Fair Value of Financial Instruments - Fair Value Hierarchy Levels of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed-maturity securities	$ 1,823,729	$ 1,959,156
Equity securities	31,811	26,712
Fair value assumptions, percentage of securities assessed by third-party pricing service	94.00%
Fair value, recurring measurements [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed-maturity securities	1,823,729	1,959,156
Equity securities	31,811	26,712
Trading securities	29,038	9,640
Separate accounts	2,500,640	2,408,598
Total fair value assets	4,385,218	4,404,106
Currency swaps	1,987	2,032
Separate accounts	2,500,640	2,408,598
Liabilities, fair value disclosure	2,502,627	2,410,630
Fair value, recurring measurements [Member] | Level 1 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed-maturity securities	249	256
Equity securities	24,525	18,069
Trading securities	0	0
Separate accounts	0	0
Total fair value assets	24,774	18,325
Currency swaps	0	0
Separate accounts	0	0
Liabilities, fair value disclosure	0	0
Fair value, recurring measurements [Member] | Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed-maturity securities	1,813,397	1,952,014
Equity securities	7,238	8,592
Trading securities	29,038	9,640
Separate accounts	2,500,640	2,408,598
Total fair value assets	4,350,313	4,378,844
Currency swaps	1,987	2,032
Separate accounts	2,500,640	2,408,598
Liabilities, fair value disclosure	2,502,627	2,410,630
Fair value, recurring measurements [Member] | Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed-maturity securities	10,083	6,886
Equity securities	48	51
Trading securities	0	0
Separate accounts	0	0
Total fair value assets	10,131	6,937
Currency swaps	0	0
Separate accounts	0	0
Liabilities, fair value disclosure	0	0
Fair value, recurring measurements [Member] | US government agencies debt sececurities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed-maturity securities	9,869	10,985
Fair value, recurring measurements [Member] | US government agencies debt sececurities [Member] | Level 1 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed-maturity securities	0	0
Fair value, recurring measurements [Member] | US government agencies debt sececurities [Member] | Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed-maturity securities	9,869	10,985
Fair value, recurring measurements [Member] | US government agencies debt sececurities [Member] | Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed-maturity securities	0	0
Fair value, recurring measurements [Member] | Foreign government debt securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed-maturity securities	111,384	111,845
Fair value, recurring measurements [Member] | Foreign government debt securities [Member] | Level 1 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed-maturity securities	0	0
Fair value, recurring measurements [Member] | Foreign government debt securities [Member] | Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed-maturity securities	111,384	111,845
Fair value, recurring measurements [Member] | Foreign government debt securities [Member] | Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed-maturity securities	0	0
Fair value, recurring measurements [Member] | US States and political subdivisions debt securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed-maturity securities	31,361	30,935
Fair value, recurring measurements [Member] | US States and political subdivisions debt securities [Member] | Level 1 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed-maturity securities	0	0
Fair value, recurring measurements [Member] | US States and political subdivisions debt securities [Member] | Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed-maturity securities	31,361	30,935
Fair value, recurring measurements [Member] | US States and political subdivisions debt securities [Member] | Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed-maturity securities	0	0
Fair value, recurring measurements [Member] | Corporate debt securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed-maturity securities	1,298,222	1,354,201
Fair value, recurring measurements [Member] | Corporate debt securities [Member] | Level 1 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed-maturity securities	249	256
Fair value, recurring measurements [Member] | Corporate debt securities [Member] | Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed-maturity securities	1,290,884	1,349,021
Fair value, recurring measurements [Member] | Corporate debt securities [Member] | Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed-maturity securities	7,089	4,924
Fair value, recurring measurements [Member] | Asset-backed securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed-maturity securities	372,893	451,190
Fair value, recurring measurements [Member] | Asset-backed securities [Member] | Level 1 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed-maturity securities	0	0
Fair value, recurring measurements [Member] | Asset-backed securities [Member] | Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed-maturity securities	369,899	449,228
Fair value, recurring measurements [Member] | Asset-backed securities [Member] | Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed-maturity securities	$ 2,994	$ 1,962

XML

Condensed Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Statement of Other Comprehensive Income [Abstract]
Net income	$ 46,180	$ 37,620	$ 87,936	$ 84,891
Unrealized investment gains (losses):
Change in unrealized gains (losses) on investment securities	3,931	16,081	21,445	12,443
Reclassification adjustment for realized investment (gains) losses included in net income	(4,640)	(2,073)	(6,461)	(2,293)
Foreign currency translation adjustments:
Change in unrealized foreign currency translation gains (losses)	(4,177)	1,041	(869)	3,647
Total other comprehensive income (loss) before income taxes	(4,886)	15,049	14,115	13,797
Income tax expense (benefit) related to items of other comprehensive income (loss)	(298)	4,903	5,166	2,825
Other comprehensive income (loss), net of income taxes	(4,588)	10,146	8,949	10,972
Total comprehensive income	$ 41,592	$ 47,766	$ 96,885	$ 95,863

XML

Segment Information (Notes)

6 Months Ended

Jun. 30, 2012

Segment Reporting [Abstract]

Segment Information

Segment Information

We have two primary operating segments – Term Life Insurance and Investment and Savings Products. We also have a Corporate and Other Distributed Products segment. Assets by segment were as follows:

	June 30, 2012		December 31, 2011
	(In thousands)
Assets:
Term life insurance segment	$	6,241,977	$	6,009,162
Investment and savings products segment	2,692,115		2,591,137
Corporate and other distributed products segment	1,016,985		1,251,521
Total assets	$	9,951,077	$	9,851,820

The Investment and Savings Products segment includes assets held in separate accounts. Excluding separate accounts, Investment and Savings Products segment assets were as follows:

	June 30, 2012		December 31, 2011
	(In thousands)
Investment and savings products segment assets, excluding separate accounts	$	192,462	$	183,622

Results of operations by segment were as follows:

	Three months ended June 30,						Six months ended June 30,
	2012			2011			2012			2011
	(In thousands)
Revenues:
Term life insurance segment	$	162,732		$	131,641		$	314,536		$	268,603
Investment and savings products segment	102,967			104,586			203,101			205,432
Corporate and other distributed products segment	34,826			38,868			69,489			77,412
Total revenues	$	300,525		$	275,095		$	587,126		$	551,447
Income (loss) before income taxes:
Term life insurance segment	$	51,724		$	36,026		$	96,007		$	85,742
Investment and savings products segment	29,444			30,470			58,314			61,509
Corporate and other distributed products segment	(9,247		)	(8,031		)	(18,935		)	(15,530		)
Total income before income taxes	$	71,921		$	58,465		$	135,386		$	131,721

Results of operations by country were as follows:

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
	(In thousands)
Revenues by country:
United States	$	246,703	$	222,909	$	477,460	$	445,312
Canada	53,822		52,186		109,666		106,135
Total revenues	$	300,525	$	275,095	$	587,126	$	551,447
Income before income taxes by country:
United States	$	54,265	$	42,652	$	102,038	$	99,658
Canada	17,656		15,813		33,348		32,063
Total income before income taxes	$	71,921	$	58,465	$	135,386	$	131,721

XML

Earnings Per Share Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2012

Earnings Per Share [Abstract]

Schedule of earnings per share, basic and diluted

The calculation of basic and diluted EPS follows.

	Three months ended June 30,						Six months ended June 30,
	2012			2011			2012			2011
	(In thousands, except per-share amounts)
Basic EPS
Numerator:
Net income	$	46,180		$	37,620		$	87,936		$	84,891
Income attributable to unvested participating securities	(1,111		)	(1,097		)	(2,498		)	(2,837		)
Net income used in calculating basic EPS	$	45,069		$	36,523		$	85,438		$	82,054
Denominator:
Weighted-average vested shares	61,531			73,457			63,332			73,067
Basic EPS	$	0.73		$	0.50		$	1.35		$	1.12
Diluted EPS
Numerator:
Net income	$	46,180		$	37,620		$	87,936		$	84,891
Income attributable to unvested participating securities	(1,092		)	(1,087		)	(2,457		)	(2,802		)
Net income used in calculating diluted EPS	$	45,088		$	36,533		$	85,479		$	82,089
Denominator:
Weighted-average vested shares	62,687			74,201			64,481			74,028
Diluted EPS	$	0.72		$	0.49		$	1.33		$	1.11

XML

Unrealized losses (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Continuous Unrealized Loss Position, Cost Basis	$ 126,930	$ 286,718
Less than 12 months [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	95,678	245,669
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	(2,621)	(7,942)
12 months or longer [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	24,844	29,372
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses	(3,787)	(3,735)
Fixed-maturity securities [Member] | Less than 12 months [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	94,364	244,819
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	(2,546)	(7,636)
Fixed-maturity securities [Member] | 12 months or longer [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	24,131	29,372
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses	(3,486)	(3,735)
Foreign government [Member] | Less than 12 months [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	6,945	7,150
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	(148)	(179)
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	12	10
Foreign government [Member] | 12 months or longer [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	0	0
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	0	0
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses	0	0
US States and political subdivisions debt securities [Member] | Less than 12 months [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	1,750	0
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	(2)	0
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	3	0
US States and political subdivisions debt securities [Member] | 12 months or longer [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	0	0
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	0	0
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses	0	0
Corporates [Member] | Less than 12 months [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	75,791	188,643
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	(2,282)	(6,979)
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	125	185
Corporates [Member] | 12 months or longer [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	23	11
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	13,030	4,092
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses	(1,624)	(868)
Asset-backed securities [Member] | Less than 12 months [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	9,878	49,026
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	(114)	(478)
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	14	60
Asset-backed securities [Member] | 12 months or longer [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	22	30
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	11,101	25,280
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses	(1,862)	(2,867)
Equity securities [Member] | Less than 12 months [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	1,314	850
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	(75)	(306)
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	13	78
Equity securities [Member] | 12 months or longer [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	12	0
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	713	0
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses	$ (301)	$ 0

XML

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2012

Accounting Policies [Abstract]

Basis of presentation

Basis of Presentation. We prepare our financial statements in accordance with U.S. generally accepted accounting principles ("GAAP"). These principles are established primarily by the Financial Accounting Standards Board ("FASB"). The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect financial statement balances, revenues and expenses and cash flows as well as the disclosure of contingent assets and liabilities. Management considers available facts and knowledge of existing circumstances when establishing the estimates included in our financial statements.

The most significant items that involve a greater degree of accounting estimates and actuarial determinations subject to change in the future are the valuation of investments, deferred policy acquisition costs assets ("DAC"), future policy benefit reserves and income taxes. Estimates for these and other items are subject to change and are reassessed by management in accordance with GAAP. Actual results could differ from those estimates.

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and those entities required to be consolidated under applicable accounting standards. All material intercompany profits, transactions, and balances among the consolidated entities have been eliminated.

The accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of normal recurring accruals, which are necessary to fairly present the balance sheets as of June 30, 2012 and December 31, 2011, the statements of income and comprehensive income for the three and six months ended June 30, 2012 and 2011, and the statements of stockholders' equity and cash flows for the six months ended June 30, 2012 and 2011. Results of operations for interim periods are not necessarily indicative of results for the entire year or of the results to be expected in future periods.

These unaudited condensed consolidated financial statements have been prepared pursuant to the rules and the regulations of the Securities and Exchange Commission (the "SEC"). Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. These condensed consolidated financial statements should be read in conjunction with the consolidated and combined financial statements and notes thereto that are included in our Annual Report on Form 10-K for the year ended December 31, 2011, as modified and updated by our Current Report on Form 8-K filed with the SEC on May 8, 2012 (together, the "2011 Annual Report").

Reclassifications

Reclassifications. Certain reclassifications have been made to prior-period amounts to conform to current-period reporting classifications. Concurrent with our January 1, 2012 adoption of ASU 2010-26, Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts ("ASU 2010-26"), certain expenses were reclassified among sales commission, insurance expenses, insurance commissions and other operating expenses. These reclassifications had no impact on net income, total stockholders’ equity or income before income taxes by segment.

New accounting principles

New Accounting Principles.

We retrospectively adopted ASU 2010-26 in our fiscal year beginning January 1, 2012. The impact of adoption was as follows:

	(In thousands, except per-share amounts)
Reduction as of January 1, 2011:
Deferred policy acquisition costs, net	$	114,265
Stockholders' equity	74,964
Reduction as of December 31, 2011:
Deferred policy acquisition costs, net	$	146,152
Stockholders' equity	95,991
Reduction for the three months ended June 30, 2011:
Income before income taxes	$	9,696
Net income	6,403
Basic earnings per share	0.08
Diluted earnings per share	0.09
Reduction for the six months ended June 30, 2011:
Income before income taxes	$	17,585
Net income	11,599
Basic earnings per share	0.16
Diluted earnings per share	0.15

The adoption of ASU 2010-26 had no impact on our cash flows or required capital.

In accordance with ASU 2010-26, we only defer the costs of acquiring new business to the extent that they result directly from and are essential to the contract transaction(s) and would not have been incurred had the contract transaction(s) not occurred. These deferred policy acquisition costs mainly include commissions and policy issuance expenses. The recovery of such costs is dependent on the future profitability of the related policies, which, in turn, is dependent principally upon mortality, persistency, investment returns, and the expense of administering the business, as well as upon certain economic variables, such as inflation. DAC is subject to recoverability testing annually and when impairment indicators exist. We make certain assumptions regarding persistency, expenses, interest rates and claims. These assumptions may not be modified, or unlocked, unless recoverability testing deems them to be inadequate. We update assumptions for new business to reflect the most recent experience. DAC is amortized over the premium-paying period of the related policies in proportion to annual premium income. Due to the inherent uncertainties in making assumptions about future events, materially different experience from expected results in persistency could result in a material increase or decrease of DAC amortization in a particular period. All other acquisition-related costs, including unsuccessful acquisition and renewal efforts, are charged to expense as incurred. Administrative costs, rent, depreciation, occupancy, equipment, and all other general overhead costs are considered indirect costs and are charged to expense as incurred.

Deferrable acquisitions costs for Canadian segregated funds are amortized over the life of the policies in relation to historical and future estimated gross profits before amortization. The gross profits and resulting DAC amortization will vary with actual fund returns, redemptions and expenses. The adoption of ASU 2010-26 did not impact the accounting for acquisition costs related to Canadian segregated funds.

The balances of and activity in DAC, which reflects the retrospective adoption of ASU 2010-26 for all periods presented, were as follows:

	Six months ended June 30,
	2012			2011
	(In thousands)
DAC balance, beginning of period	$	904,485		$	738,946
Capitalization	141,151			134,704
Amortization	(54,736		)	(47,204		)
Foreign exchange and other	(342		)	7,338
DAC balance, end of period	$	990,558		$	833,784

Fair Value Measurement Amendments. In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement ("ASU 2011-04"). The primary provisions of ASU 2011-04 result in common fair value measurement and disclosure requirements for U.S. GAAP and International Financial Reporting Standards. ASU 2011-04 changes the wording used to describe the requirements for measuring fair value and for disclosing information about fair value measurement, including requiring quantitative disclosures about the unobservable inputs used in fair value measurements. The amendments in the update were applied prospectively for our fiscal year beginning January 1, 2012. This update did not result in a significant impact on our financial position or results of operations.