Primerica

MLM sales structure incentivizes unsuitable switching of working-class clients into high-fee variable annuities (1.30% M&E + up to 2.26% sub-account expenses + 5.75% dealer commission + 8.5% surrender charge). FINRA has repeatedly disciplined individual Primerica agents for churning and unauthorized switching.

Primerica operates a multi-level marketing (MLM) structure for selling term life insurance and financial products, a business model the company describes as "affiliate marketing." Independent agents earn commissions on products they sell and also receive overrides on sales made by agents they recruit. In April 2024, an independent short-seller report published by The Bear Cave described Primerica as "a pyramid scheme," citing extensive regulatory and legal records. The report alleged that the vast majority of recruited representatives earn little to no income, while the economic model is sustained by recruiting new participants.

The company has been the subject of regulatory action concerning its sales practices. In a 2022 New York State court decision (*M.Z. v Ortiz*), a Primerica agent and the corporate entities Primerica Financial Services Agency of New York, Inc. and Primerica Life Insurance Company were named as defendants in a lawsuit alleging violations of New York's Executive Law concerning discriminatory practices. Furthermore, the Mutual Fund Dealers Association (MFDA) in Canada has entered into a settlement agreement with a Primerica-affiliated representative for undisclosed misconduct, noting the agreement saved the MFDA the time and resources of a full hearing.

While Primerica disputes characterizations of its model as predatory, the combination of its MLM compensation structure, regulatory settlements, and ongoing litigation over sales practices aligns with the category of financial products and distribution models designed to extract value from unsophisticated participants.