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Primerica details potential financial impacts of DOL fiduciary rule

AlthoughPrimerica Inc. it stillworking through the details of the Department of Labor's Conflict of Interest FinalRule, commonly known as the fiduciary rule, CFO Alison Rand said during the company'sfirst-quarter earningscall that the final rule's grandfathering provisions would preserve asset-basedearnings on qualified accounts, according to a transcript.

Randsaid the company understands that, under the rule, existing client assets can continuein their historical compensation structure if no new advice is provided. The grandfatheringprovisions also cover old recommendations as well as rebalancing between mutualfunds within a complex or variable annuity subaccounts, according to the CFO.

"Whilegrowth in our asset based earnings will be tied to our ability to generate new sales,as well as market conditions, we believe these earnings will remain largely intact,"Rand said during the call.

The grandfatheringprovisions also allow existing sales-based earnings accounts associated with existingsystematic savings plans to remain under historical compensation structures, Randsaid. The company estimates that about 15% of its U.S. retirement sales are coveredby the provision, while the remainder of its U.S. qualified account sales will becovered by the fiduciary rule's standards as they are associated with new investmentadvice.

Also,Rand disclosed that the company expects $3 million to $5 million of ongoing expensesper year following the rule's implementation.