EX-99.(B)(11) 6 plic-finstmtschedulesx2013.htm FINANCIAL STATEMENT SCHEDULES plic-finstmtschedules-2013 VA-Pivot

Report of Independent Registered Public Accounting Firm
The Board of Directors and Stockholder
Principal Life Insurance Company
We have audited the consolidated financial statements of Principal Life Insurance Company
(the Company) as of December 31, 2013 and 2012, and for each of the three years in the period ended December 31, 2013, and have issued our report thereon dated March 24, 2014. Our audits also included the financial statement schedules listed in Item 24(a)(3) of this Registration Statement. These schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on these schedules based on our audits.
In our opinion, the financial statement schedules referred to above, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein. As discussed in Note 1 to the consolidated financial statements, in response to new accounting standards, the Company changed its methods of accounting for the capitalization of deferred policy acquisition costs effective January 1, 2012. In addition, the Company has elected to change its methods of accounting for the cost of long duration universal life and variable universal life reinsurance contracts and for the estimated gross profits of these contracts effective January 1, 2012.


/s/Ernst & Young LLP


Des Moines, Iowa
March 24, 2014




Schedule I - Summary of Investments - Other Than Investments in Related Parties
As of December 31, 2013
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount as
 
 
 
 
 
 
 
 
 
 
 
shown in the
 
 
 
 
 
 
 
 
 
 
 
Consolidated
 
 
 
 
 
 
 
 
 
 
 
Statement of
 
 
 
 
 
 
 
 
 
 
 
Financial
Type of Investment
 
Cost
 
Value
 
Position
 
 
 
 
 
(in millions)
Fixed maturities, available-for-sale:
 
 
 
 
 
 
 
 
 
 
U.S Treasury securities and obligations of U.S government
 
 
 
 
 
 
 
 
 
 
 
corporations and agencies
 
$
 807.0 
 
$
 769.7 
 
$
 769.7 
 
States, municipalities and political subdivisions
 
 
 3,597.0 
 
 
 3,632.4 
 
 
 3,632.4 
 
Foreign governments
 
 
 451.4 
 
 
 523.6 
 
 
 523.6 
 
Public utilities
 
 
 4,182.0 
 
 
 4,410.7 
 
 
 4,410.7 
 
Redeemable preferred stock
 
 
 37.8 
 
 
 41.2 
 
 
 41.2 
 
All other corporate bonds
 
 
 23,457.4 
 
 
 24,765.2 
 
 
 24,765.3 
 
Residential mortgage-backed securities
 
 
 2,779.2 
 
 
 2,823.6 
 
 
 2,823.6 
 
Commercial mortgage-backed securities
 
 
 4,078.0 
 
 
 4,026.4 
 
 
 4,026.4 
 
Collateralized debt obligations
 
 
 391.9 
 
 
 363.4 
 
 
 363.4 
 
Other debt obligations
 
 
 4,157.5 
 
 
 4,167.8 
 
 
 4,167.8 
 
 
Total fixed maturities, available-for-sale
 
 
 43,939.2 
 
 
 45,524.1 
 
 
 45,524.1 
Fixed maturities, trading
 
 
 358.5 
 
 
 358.5 
 
 
 358.5 
Equity securities, available-for-sale:
 
 
 
 
 
 
 
 
 
 
Banks, trust and insurance companies
 
 
 60.8 
 
 
 51.1 
 
 
 51.1 
 
Industrial, miscellaneous and all other
 
 
 2.2 
 
 
 2.3 
 
 
 2.3 
 
Non-redeemable preferred stock
 
 
 45.3 
 
 
 49.2 
 
 
 49.2 
 
 
Total equity securities, available-for-sale
 
 
 108.3 
 
 
 102.6 
 
 
 102.6 
Equity securities, trading
 
 
 169.7 
 
 
 169.7 
 
 
 169.7 
Mortgage loans (1)
 
 
 10,888.3 
 
 
XXXX
 
 
 10,819.2 
Real estate, net:
 
 
 
 
 
 
 
 
 
 
Real estate acquired in satisfaction of debt
 
 
 210.2 
 
 
XXXX
 
 
 210.2 
 
Other real estate
 
 
 1,056.2 
 
 
XXXX
 
 
 1,056.2 
Policy loans
 
 
 830.1 
 
 
XXXX
 
 
 830.1 
Other investments (2)
 
 
 1,355.4 
 
 
XXXX
 
 
 1,354.1 
 
 
Total investments
 
$
 58,915.9 
 
 
XXXX
 
$
 60,424.7 

(1)
The amount shown in the Consolidated Statement of Financial Position for mortgage loans differs from cost as mortgage loans are generally reported at cost adjusted for amortization of premiums and accrual of discounts, computed using the interest method and net of valuation allowances.
(2)
The amount shown in the Consolidated Statement of Financial Position for other investments differs from cost due to accumulated earnings from minority interests in unconsolidated entities and properties owned jointly with venture partners and operated by the partners. Other investments also includes derivative assets and certain seed money investments, which are reported at fair value, and commercial mortgage loans of consolidated VIEs for which the fair value option was elected.





Schedule III - Supplementary Insurance Information
As of December 31, 2013 and 2012 and for each of the years ended December 31, 2013, 2012 and 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contractholder
 
 
 
Deferred
 
Future policy
 
and other
 
 
 
acquisition
 
benefits and
 
policyholder
Segment
 
costs
 
claims
 
funds
 
 
 
(in millions)
2013:
 
 
 
 
 
 
 
 
 
Retirement and Investor Services
 
$
 848.9 
 
$
 9,975.6 
 
$
 30,537.5 
Principal Global Investors
 
 
 - 
 
 
 - 
 
 
 - 
U.S. Insurance Solutions
 
 
 1,999.9 
 
 
 8,228.0 
 
 
 5,082.9 
Corporate
 
 
 - 
 
 
 41.4 
 
 
 (286.3)
 
Total
 
$
 2,848.8 
 
$
 18,245.0 
 
$
 35,334.1 
 
 
 
 
 
 
 
 
 
 
 
2012:
 
 
 
 
 
 
 
 
 
Retirement and Investor Services
 
$
 699.4 
 
$
 9,702.7 
 
$
 32,801.4 
Principal Global Investors
 
 
 - 
 
 
 - 
 
 
 - 
U.S. Insurance Solutions
 
 
 1,695.3 
 
 
 8,153.4 
 
 
 4,925.5 
Corporate
 
 
 - 
 
 
 50.4 
 
 
 (274.5)
 
Total
 
$
 2,394.7 
 
$
 17,906.5 
 
$
 37,452.4 




Schedule III - Supplementary Insurance Information - (continued)
As of December 31, 2013 and 2012 and for each of the years ended December 31, 2013, 2012 and 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of
 
 
 
 
 
Premiums and
 
Net
 
Benefits, claims
 
deferred
 
Other
 
 
 
other
 
investment
 
and settlement
 
acquisition
 
operating
Segment
 
considerations
 
income (1)
 
expenses
 
costs
 
expenses (1)
 
 
 
(in millions)
2013:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retirement and Investor
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Services
 
$
 1,045.5 
 
$
 1,933.1 
 
$
 2,303.4 
 
$
 75.0 
 
$
 1,032.3 
Principal Global Investors
 
 
 - 
 
 
 16.3 
 
 
 - 
 
 
 - 
 
 
 513.2 
U.S. Insurance Solutions
 
 
 1,816.5 
 
 
 684.7 
 
 
 1,826.0 
 
 
 95.6 
 
 
 675.1 
Corporate
 
 
 0.4 
 
 
 47.4 
 
 
 (14.9)
 
 
 - 
 
 
 (14.9)
 
Total
 
$
 2,862.4 
 
$
 2,681.5 
 
$
 4,114.5 
 
$
 170.6 
 
$
 2,205.7 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2012:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retirement and Investor
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Services
 
$
 1,162.6 
 
$
 2,075.1 
 
$
 2,629.1 
 
$
 84.8 
 
$
 936.8 
Principal Global Investors
 
 
 - 
 
 
 14.9 
 
 
 - 
 
 
 - 
 
 
 423.6 
U.S. Insurance Solutions
 
 
 1,769.3 
 
 
 674.2 
 
 
 1,935.5 
 
 
 (2.5)
 
 
 642.2 
Corporate
 
 
 3.0 
 
 
 47.6 
 
 
 (8.0)
 
 
 - 
 
 
 69.6 
 
Total
 
$
 2,934.9 
 
$
 2,811.8 
 
$
 4,556.6 
 
$
 82.3 
 
$
 2,072.2 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2011:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retirement and Investor
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Services
 
$
 390.4 
 
$
 2,182.3 
 
$
 1,933.3 
 
$
 119.4 
 
$
 879.8 
Principal Global Investors
 
 
 - 
 
 
 14.6 
 
 
 - 
 
 
 - 
 
 
 396.8 
U.S. Insurance Solutions
 
 
 1,724.0 
 
 
 669.3 
 
 
 1,725.1 
 
 
 143.6 
 
 
 611.0 
Corporate
 
 
 512.1 
 
 
 51.8 
 
 
 376.5 
 
 
 - 
 
 
 169.9 
 
Total
 
$
 2,626.5 
 
$
 2,918.0 
 
$
 4,034.9 
 
$
 263.0 
 
$
 2,057.5 

(1)
Allocations of net investment income and certain operating expenses are based on a number of assumptions and estimates, and reported operating results would change by segment if different methods were applied.





Schedule IV - Reinsurance
As of December 31, 2013, 2012 and 2011 and for each of the years then ended
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage
 
 
 
 
 
 
Ceded to
 
Assumed
 
 
 
of amount
 
 
 
 
Gross
 
other
 
from other
 
 
 
assumed
 
 
 
 
amount
 
companies
 
companies
 
Net amount
 
to net
 
 
 
 
($ in millions)
 
2013:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Life insurance in force
 
$
 314,777.5 
 
$
 142,623.2 
 
$
 1,455.4 
 
$
 173,609.7 
 
 0.8 
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Premiums:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Life insurance
 
$
 1,824.9 
 
$
 204.4 
 
$
 102.0 
 
$
 1,722.5 
 
 5.9 
%
 
Accident and health insurance
 
 
 1,307.9 
 
 
 168.0 
 
 
 - 
 
 
 1,139.9 
 
 - 
%
 
 
Total
 
$
 3,132.8 
 
$
 372.4 
 
$
 102.0 
 
$
 2,862.4 
 
 3.6 
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2012:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Life insurance in force
 
$
 283,990.0 
 
$
 113,869.5 
 
$
 1,606.2 
 
$
 171,726.7 
 
 0.9 
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Premiums:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Life insurance
 
$
 1,947.4 
 
$
 173.6 
 
$
 59.3 
 
$
 1,833.1 
 
 3.2 
%
 
Accident and health insurance
 
 
 1,264.7 
 
 
 162.9 
 
 
 - 
 
 
 1,101.8 
 
 - 
%
 
 
Total
 
$
 3,212.1 
 
$
 336.5 
 
$
 59.3 
 
$
 2,934.9 
 
 2.0 
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2011:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Life insurance in force
 
$
 255,618.9 
 
$
 94,096.0 
 
$
 1,814.9 
 
$
 163,337.8 
 
 1.1 
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Premiums:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Life insurance
 
$
 1,198.5 
 
$
 157.8 
 
$
 30.1 
 
$
 1,070.8 
 
 2.8 
%
 
Accident and health insurance
 
 
 1,714.8 
 
 
 159.1 
 
 
 - 
 
 
 1,555.7 
 
 - 
%
 
 
Total
 
$
 2,913.3 
 
$
 316.9 
 
$
 30.1 
 
$
 2,626.5 
 
 1.1 
%