Primerica 2010 Annual Report - Direct Selling News

housed at our Duluth and Roswell, Georgiasites. We rely on these systems throughout ourbusiness for a variety of functions. Ourinformation technology systems run a varietyof third-party and proprietary software,including Primerica Online (our website portalto our sales force), our insuranceadministration system, Virtual Base Shop (ourpaperless office for RVPs), TurboApps (ourpoint-of-sale data collection tool for product/recruiting applications), our licensing decisionand support system and our compensationsystem.Despite the implementation of security andback-up measures, our information technologysystems may be vulnerable to physical orelectronic intrusions, viruses or other attacks,programming errors and similar disruptions.The failure of any one of these systems for anyreason could cause significant interruptions toour operations, which could have a materialadverse effect on our business, financialcondition and results of operations. We retainconfidential information in our informationtechnology systems, and we rely on industrystandard commercial technologies to maintainthe security of those systems. Anyone who isable to circumvent our security measures andpenetrate our information technology systemscould access, view, misappropriate, alter, ordelete information in the systems, includingpersonally identifiable client information andproprietary business information. In addition,an increasing number of jurisdictions requirethat clients be notified if a security breachresults in the disclosure of personallyidentifiable client information. Any compromiseof the security of our information technologysystems that results in inappropriate disclosureor use of personally identifiable clientinformation could damage our reputation in themarketplace, deter people from purchasing ourproducts, subject us to significant civil andcriminal liability and require us to incursignificant technical, legal and other expenses.In the event of a disaster, our businesscontinuity plan may not be sufficient,which could have a material adverseeffect on our business, financialcondition and results of operations.Our infrastructure supports a combination oflocal and remote recovery solutions forbusiness resumption in the event of a disaster.In the event of either a campus-widedestruction of all buildings or the inability toaccess our main campus in Duluth, Georgia, ourbusiness recovery plan provides for ouremployees to perform their work functions viaa dedicated business recovery site located 25miles from our main campus, by remote accessfrom an employee’s home or by relocation ofemployees to our New York or Ontario offices.However, in the event of a full scale local orregional disaster, our business recovery planmay be inadequate, and our employees andsales representatives may be unable to carryout their work, which could have a materialadverse effect on our business, financialcondition and results of operations.We may be materially adverselyaffected by currency fluctuations in theUnited States dollar versus theCanadian dollar.In recent periods, exchange rate fluctuationshave been significant. A weaker Canadian dollarrelative to the U.S. dollar would result in lowerlevels of reported revenues, net income, assets,liabilities and accumulated othercomprehensive income in our U.S. dollarfinancial statements. We have not historicallyhedged against this exposure. Significantexchange rate fluctuations between the U.S.dollar and Canadian dollar could have amaterial adverse effect on our financialcondition and results of operations.Primerica 2010 Annual Report 57