Primerica, Inc., the successor to the A. L. Williams organization (ALW), sells life insurance policies and other financial products through a multilevel marketing organization that ALW developed in the late 1970s. Primerica's multilevel marketing organization resembles that of Herbalife in many respects and differs in some respects.
I think the biggest difference between Herbalife and Primerica is that the FTC has been barred by statute for more than three decades from doing anything about insurance companies. Indeed, the FTC is barred by statute from even investigating insurance companies without a formal request from a Congressional committee. Here is the current language of the statute:
The Commission may exercise such authority [to conduct studies and prepare reports relating to the business of insurance] only upon receiving a request which is agreed to by a majority of the members of the Committee on Commerce, Science, and Transportation of the Senate or the Committee on Energy and Commerce of the House of Representatives. The authority to conduct any such study shall expire at the end of the Congress during which the request for such study was made. [15 U.S. Code, Section 46—Additional powers of Commission.]
In addition, the Consumer Financial Protection Bureau, which was established by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, is barred from doing anything about insurance companies. See my post No. 137 dated January 4, 2016.
On the other hand, another section of the Dodd-Frank Act established the Financial Stability Oversight Council (FSOC). That section does not bar the FSOC from investigating insurance companies. Indeed, it provides for the FSOC to investigate "nonbank insurance companies." The FSOC has designated three major U.S. insurance organizations—American International Group, MetLife, and Prudential Financial—as "nonbank systemically important financial institutions." MetLife filed a lawsuit against the FSOC, a federal judge rescinded the designation, and the FSOC's appeal is ongoing. See my post No. 170 dated July 15, 2016.
Thus it appears that state insurance regulators are the only source of protection for insurance consumers against potential wrongdoing through multilevel marketing organizations in the insurance business. It remains to be seen whether the recent developments involving the FTC and Herbalife will have any influence on state insurance regulators. As far as the past is concerned, with a few minor exceptions, I am not aware of state insurance regulators showing significant concern about the potential anti-consumer aspects of the multilevel marketing organization that Primerica and its predecessor have used for many years.