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

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

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

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

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

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

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

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

Shares in the insurer are down 13 percent so far this year, closing at $21.11 on Thursday.

KEEPING CUSTOMERS, SALES AGENTS

Persistency -- the percentage of investors who continue to pay regular premiums on their life policies -- has also been an issue, with some customers lapsing as a result of belt-tightening in the recession.

But persistency rates have been improving into 2011 and, going ahead into 2012, we expect to see continued improvement, Williams said.

Primerica has struggled to keep its sales agents and, to combat a high attrition rate, it recently launched a massive recruitment drive, hiring 29,000 agents in June and a record 40,000 last month.

It was a historic jump in recruiting ... a game changer of sorts, said co-CEO John Addison. But it's too early to tell how many will be licensed and how it will reflect results.

Primerica's sales volumes historically correlate to the size of its sales force.

If we look at the numbers at the beginning of the year; we had 95,000 agents. We licensed 34,000 last year ... that gives you a rough feel that about a third of the agents leave each year and a third new come in, Williams said.

One of the toughest things during the crisis was the challenges faced by our sales force.

Primerica's employees were paid partly in stock -- stock that quickly lost value in the financial industry meltdown as Citi shares slumped to below $10 at one point.

We have some very loyal guys, who are like family -- some 7,000 agents have been with us for 20 years, and another 20,000 for 10 years, said Addison. And it was these guys who got badly hit as a lot of them owned Citi stock.

Fortunately for Primerica, we were in the process of exiting Citi when the world collapsed. If we'd waited, we would have probably had collateral damage.

(Reporting by Rachel Chitra in Bangalore, Editing by Ian Geoghegan)