Word has it the next piece of fat Vikram Pandit will be sucking out of Citigroup will be its life insurance unit Primerica, one of the first acquisitions Sanford Weill made when he began building his financial services supermarket.

The private-equity firm J.C. Flowers reportedly is working on a deal to invest in insurer Protective Life, which would then buy Primerica. Shares of Citigroup gained 2.4%, or 45 cents, to $19.41 on Thursday, while Protective jumped 0.9%, or 29 cents, to $31.89.

Citigroup refused to comment on the report, only telling Forbes.com that Primerica is financially strong.

Since taking the reins of the sprawling and troubled financial services giant in December from Chuck Prince, Pandit has stated his desire to reduce $500 billion of non-core "legacy" assets to $100 billion in two to three years. (See "Citigroup's $400B Yardsale.")

Primerica's history dates back to the booming 1980s, when celebrated investor Gerald Tsai turned an aluminum- and tin-can maker American Can into a financial services company. The 1987 crash took Primerica with it and Tsai sold the company to Sanford Weill's consumer lender Commercial Credit for $1.7 billion. Though Tsai was its largest shareholder, Weill controlled day-to-day management.

Analysts have plugged Primerica's value at around $7.5 billion, three times Protective's market capitalization. Bloomberg, which first reported the development, said It's unclear if the Primerica talks will lead to a transaction.

Like so many of its peers, Citigroup has been rocked by the subprime crisis and credit crunch. Its share price has fallen 58.3% over the past 12 months, leading to a radical rethinking in the direction of the company and its business model. (See "Crisis On Wall Street.")

J.C. Flowers, which is based in New York and is run by J. Christopher Flowers, has been prominent on the deal front of late. In May it was leading a group of investors for a 24.9% stake in German commerical property lender Hypo Real Estate. (See "J.C. Flowers Hopes For Hypo.")

In December, student lender Sallie Mae announced its would-be buyers--led by J.C. Flowers--were no longer interested in acquiring the company despite two months of often-heated negotiations and renegotiations between the parties. (See “Sallie Mae Wants To Be Alone”)

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