485BPOS 1 vapivot485b122816filingbody.htm PIVOT - PEA #6 VA-Pivot-485B-122816 Combined Document


Registration No. 333-197214
811-02091

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Pre-Effective Amendment No.

Post-Effective Amendment No. 6

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

Amendment No. 229

(Check appropriate box or boxes)

Principal Life Insurance Company Separate Account B
--------------------------------------------------------------------------------
(Exact Name of Registrant)

Principal Life Insurance Company
--------------------------------------------------------------------------------
(Name of Depositor)

The Principal Financial Group, Des Moines, Iowa 50392
--------------------------------------------------------------------------------
(Address of Depositor's Principal Executive Offices) (Zip Code)

(515) 362-2384
-------------------------------------------------------------------------------
Depositor's Telephone Number, including Area Code

Doug Hodgson
The Principal Financial Group, Des Moines, Iowa 50392
--------------------------------------------------------------------------------
(Name and Address of Agent for Service)

Title of Securities Being Registered: Principal Pivot Series Variable AnnuitySM 

It is proposed that this filing will become effective (check appropriate box)
____    immediately upon filing pursuant to paragraph (b) of Rule 485
_X__    on December 28, 2016 pursuant to paragraph (b) of Rule 485
____    60 days after filing pursuant to paragraph (a)(1) of Rule 485
____    on (date) pursuant to paragraph (a)(1) of Rule 485
____    75 days after filing pursuant to paragraph (a)(2) of Rule 485
____    on (date) pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
____    This post-effective amendment designates a new effective date for a previously filed post-effective amendment.


 

Principal Pivot Series Variable AnnuitySM 

Prospectus dated December 28, 2016

This prospectus describes Principal Pivot Series Variable AnnuitySM, an individual flexible premium deferred variable annuity (the “Contract”) issued by Principal Life Insurance Company (“the Company”, “we”, “our” or “us”) through Principal Life Insurance Company Separate Account B (“Separate Account”).
This prospectus provides information about the Contract and the Separate Account that you, as owner, should know before investing. The prospectus should be read and retained for future reference. Additional information about the Contract and the Separate Account is included in the Statement of Additional Information (the "SAI") dated December 28, 2016, which has been filed with the Securities and Exchange Commission (the “SEC”) and is considered a part of this prospectus. The table of contents of the SAI is at the end of this prospectus. You may obtain a free copy of the SAI and all additional information by writing or calling: Principal Pivot Series Variable AnnuitySM, Principal Financial Group, P.O. Box 9382, Des Moines, Iowa 50306-9382, Telephone: 1-800-852-4450. You can also visit the SEC’s website at www.sec.gov, which contains the SAI, material incorporated into this prospectus by reference, and other information about registrants that file electronically with the SEC.
These securities have not been approved or disapproved by the SEC or any state securities commission nor has the SEC or any state securities commission passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.
You may allocate your investment in the Contract among the Separate Account divisions. Each division of the Separate Account invests in shares of a corresponding mutual fund (the “underlying mutual funds”). A list of the underlying mutual funds available under the Contract is shown below.
Your accumulated value will vary according to the investment performance of the underlying mutual funds in which your selected division(s) are invested. We do not guarantee the investment performance of the underlying mutual funds.
For any administrative questions, you may contact us by writing or calling: Principal Pivot Series Variable AnnuitySM, Principal Financial Group, P.O. Box 9382, Des Moines, Iowa 50306-9382, Telephone: 1-800-852-4450.
This prospectus describes all material features of the Contract and any material differences due to state variations.




The following underlying mutual funds are available under the Contract:
ALPS Variable Insurance Trust — Class III
Invesco Variable Insurance Funds — Series II
•
ALPS/Red Rocks Listed Private Equity Portfolio
• Balanced-Risk Allocation Fund
American Century Variable Portfolios, Inc.
• Global Health Care Fund
• Inflation Protection Fund — Class II
• International Growth Fund
• Value Fund — Class II
Janus Aspen Series — Service Shares
American Funds Insurance Series
• Flexible Bond Portfolio
•
Asset Allocation Fund — Class 4
MFS — Service Class
• Blue Chip Income & Growth Fund — Class 4
• International Value Portfolio
• Global Small Capitalization Fund — Class 4
•
New Discovery Series
• Managed Risk Asset Allocation Fund — Class P2
• Utilities Series
• Managed Risk Growth Fund — Class P2
Neuberger Berman Advisors Management Trust — Class S
• Managed Risk International Fund — Class P2
•
Mid-Cap Growth Portfolio
• New World Fund — Class 4
PIMCO Variable Insurance Trust
BlackRock Variable Insurance Funds — Class III
•
All Asset Portfolio — Advisor Class(1)
•
Global Allocation V.I. Fund
•
CommodityRealReturn Strategy Portfolio — Class M
•
iShares Alternative Strategies V.I.
• High Yield Portfolio — Administrative Class
•
iShares Dynamic Allocation V.I.
•
Low Duration Portfolio — Advisor Class
•
iShares Dynamic Fixed Income V.I.
• Total Return Portfolio — Administrative Class
•
iShares Equity Appreciation V.I.
Principal Variable Contracts Funds — Class 2
•
Value Opportunities V.I. Fund
•
Core Plus Bond Account
Calvert Variable Products — Class F
• Diversified Balanced Managed Volatility Account(1)
• EAFE International Index Portfolio
• Diversified Growth Managed Volatility Account(1)
• Russell 2000 Small Cap Index Portfolio
• Diversified International Account
• S&P MidCap 400 Index Portfolio
• Equity Income Account
ClearBridge Variable — Class II
• Government & High Quality Bond Account
•
Small Cap Growth Portfolio
•
Income Account
Columbia VP — Class 2
•
International Emerging Markets Account
•
Limited Duration Credit Fund
• LargeCap Growth Account
•
Small Cap Value Fund
•
LargeCap Growth Account I
Delaware Variable Insurance Products — Service Class
•
LargeCap S&P 500 Index Account
•
Limited Term Diversified Income Series
•
LargeCap Value Account
Deutsche Variable Insurance Portfolio
•
Multi-Asset Income Account(1)
• Alternative Asset Allocation VIP — Class B(1)
• Principal Capital Appreciation Account
• Equity 500 Index VIP — Class B2
•
Principal LifeTime 2020 Account(1)
• Small MidCap Value VIP — Class B
•
Principal LifeTime 2030 Account(1)
Dreyfus Investment Portfolios — Service Shares
•
Principal LifeTime 2040 Account(1)
•
MidCap Stock Portfolio
•
Principal LifeTime 2050 Account(1)
Fidelity Variable Insurance Products — Service Class 2
• Real Estate Securities Account
• Contrafund® Portfolio
• Short-Term Income Account
• Government Money Market Portfolio(2)
•
SmallCap Account
• MidCap Portfolio
• Strategic Asset Management Balanced Portfolio(1)
• Overseas Portfolio
• Strategic Asset Management Conservative Balanced Portfolio(1)
Franklin Templeton Variable Insurance Products Trust
• Strategic Asset Management Conservative Growth Portfolio(1)
• Franklin Global Real Estate VIP Fund — Class 2
• Strategic Asset Management Flexible Income Portfolio(1)
• Franklin Rising Dividends VIP Fund — Class 4
• Strategic Asset Management Strategic Growth Portfolio(1)
• Templeton Global Bond VIP Fund — Class 4
Rydex Variable Insurance
Goldman Sachs Variable Insurance Trust — Service Shares
•
Basic Materials Fund
• MidCap Value Fund
• Commodities Strategy Fund
•
Multi-Strategy Alternatives Portfolio(1)
• NASDAQ 100 Fund
• SmallCap Equity Insights Fund
The Merger Fund VL
Guggenheim Investments Variable Insurance Funds
•
The Merger Fund VL
• Global Managed Futures Strategy Fund
VanEck VIP Global Insurance Trust — Class S Shares
• Long Short Equity Fund
• Global Hard Assets Fund
• Multi-Hedge Strategies Fund
 
• Series F (Guggenheim Floating Rate Strategies Series)
 
(1) 
This underlying mutual fund is a fund of funds. The fund of funds expenses may be higher than other fund types because the expenses of the selected fund include the expenses of the funds it holds.
(2) 
All references to the Money Market Division in this prospectus will mean the Fidelity VIP Government Money Market Division.

2


An investment in the Contract is not a deposit or obligation of any bank and is not insured or guaranteed by any bank, the Federal Deposit Insurance Corporation or any other government agency.

The Contract, certain Contract features and/or some of the investment options may not be available in all states or through all broker dealers. In addition, some optional features may restrict your ability to elect certain other optional features. For further details, please contact us at 1-800-852-4450.

This prospectus is valid only when accompanied by the current prospectuses for the underlying mutual funds. These prospectuses should be kept for future reference. This prospectus is not an offer to sell or solicitation of an offer to buy the Contract in states in which the offer or solicitation may not be lawfully made. No person is authorized to give any information or to make any representation in connection with this Contract other than those contained in this prospectus.

3


TABLE OF CONTENTS
SEPARATE ACCOUNT INVESTMENT OPTIONS
2
GLOSSARY
SUMMARY OF EXPENSE INFORMATION (for applications signed before April 1, 2017)
SUMMARY OF EXPENSE INFORMATION (for applications signed on or after April 1, 2017)
SUMMARY
 
 
1. THE CONTRACT
How To Buy a Contract
Premium Payments
Allocating Premium Payments
Exchange Credit (for exchanges from our fixed deferred annuities)
Right to Examine the Contract (free look)
Accumulated Value
Telephone and Internet Services
 
 
2. CHARGES AND DEDUCTIONS
Liquidity Max ("No Surrender Charge Rider")
Surrender Charge (not applicable with Liquidity Max)
Free Surrender Amount
When Surrender Charges Do Not Apply
Waiver of Surrender Charge Rider
Transaction Fee
Premium Taxes
Annual Fee
Separate Account Annual Expenses
Mortality and Expense Risks Charge
Administration Charge
Liquidity Max
Optional Death Benefit Riders
Return of Premium Death Benefit Rider
Annual Step-Up Death Benefit Rider
 
 
3. TRANSFERS AND SURRENDERS
Division Transfers
Unscheduled Transfers
Scheduled Transfers (Dollar Cost Averaging)
Automatic Portfolio Rebalancing (APR)
Deferred Income Transfers
Surrenders
Total Surrender with Deferred Income Rider
Total Surrender without Deferred Income Rider
Unscheduled Partial Surrender
Scheduled Partial Surrender
 
 
 
 
 
 
 
 

4


 
 
4. DEFERRED INCOME RIDER
Deferred Income Rider Terms
Deferred Income Transfers
Initial Deferred Income Transfer
Subsequent Deferred Income Transfers
Deferred Income Transfer Cancellation Period
Inactive Contract Status
Income Start Date
Income Start Date Change
Deferred Income Payments
Deferred Income Payment Options
Deferred Income Payment Advancement
Optional Cost of Living Adjustment Features
Optional CPI-U Based Adjustment
Optional Fixed Percentage Adjustment
Death Provisions of the Deferred Income Rider
Death Occurs Prior to the Income Start Date
Death Occurs After the Income Start Date
Notice of Death
Summary Report
Termination
Delay of Deferred Income Transfer
 
 
5. THE ANNUITIZATION PERIOD
Annuitization Date
Full Annuitization
Partial Annuitization
Annuity Benefit Payment Options
Death of Annuitant (During the Annuitization Period)
 
 
6. DEATH BENEFIT
Payment of Death Benefit
Standard Death Benefit
Optional Death Benefit Riders
Return of Premium Death Benefit
Annual Step-Up Death Benefit
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

5


 
 
7. ADDITIONAL INFORMATION ABOUT THE CONTRACT
The Contract
Delay of Payments
Misstatement of Age or Gender
Assignment
Change of Owner or Annuitant
Beneficiary
Contract Termination
Reinstatement
Reports
Important Information About Customer Identification Procedures
Frequent Trading and Market-Timing (Abusive Trading Practices)
Distribution of the Contract
Performance Calculation
 
 
8. FEDERAL TAX MATTERS
Taxation of Non-Qualified Contracts
Taxation of Qualified Contracts
Withholding
 
 
9. GENERAL INFORMATION ABOUT THE COMPANY
Corporate Organization and Operation
Legal Opinions
Legal Proceedings
Other Variable Annuity Contracts
Householding
Payments to Financial Intermediaries
Service Arrangements and Compensation
Mutual Fund Diversification
State Regulation
Independent Registered Public Accounting Firm
Financial Statements
 
 
10. TABLE OF SEPARATE ACCOUNT DIVISIONS
11. REGISTRATION STATEMENT
12. TABLE OF CONTENTS OF THE SAI
APPENDIX A — CONDENSED FINANCIAL INFORMATION



6


GLOSSARY
The terms defined below are used throughout this prospectus.
accumulated value – the sum of the values in the Separate Account divisions.
anniversary(ies) – the same day and month of each year following the contract issue date.
annuitant – the person, including any joint annuitant, on whose life the annuity benefit payment and deferred income payment, as applicable, is based. This person may or may not be the owner.
annuitization – application of a portion or all of the accumulated value to an annuity benefit payment option to make income payments.
annuitization date – the date all of the owner’s accumulated value is applied to an annuity benefit payment option.
Automatic Portfolio Rebalancing (APR) – the transfer of money among your Separate Account divisions on a set schedule to maintain a specified percentage in each Separate Account division.
cash surrender value – the accumulated value minus any applicable surrender charges and fee(s) (contract fee and/or prorated share of the charge(s) for optional rider(s)).
contract issue date – the date the Contract becomes effective and is used to determine contract years.
contract year – the one-year period beginning on the contract issue date and ending one day before the contract anniversary and any subsequent one-year period beginning on a contract anniversary (for example, if the contract issue date is February 5, 2015, the first contract year ends on February 4, 2016, and the first contract anniversary falls on February 5, 2016).
data page – that portion of the Contract which contains the following: owner and annuitant data (names, gender, annuitant age); the contract issue date; maximum annuitization date; Contract charges and limits; benefits; and a summary of any optional benefits chosen by the Contract owner.
deferred income transfers – moving a portion of your accumulated value to purchase a deferred income payment option.
division(s) - refer to the term “Separate Account division” in this Glossary.
Free Surrender Amount – the amount that can be surrendered without surrender charges.
good order – an instruction or request is in good order when it is received in our home office, or other place we may specify, and has such clarity and completeness that we do not have to exercise any discretion to carry out the instruction or request. We may require that the instruction or request be given in a certain form.
home office – Company’s corporate headquarters located at Principal Financial Group, Des Moines, Iowa 50392-1770.
inactive contract status – this status applies when at least one deferred income transfer has been made and the Contract accumulated value is reduced to zero. Except for the Deferred Income Rider and its benefits, all other rights and benefits under the Contract (including death benefits) end, and no additional premium payments will be accepted. 
investment options – the Separate Account divisions.
joint annuitant – an annuitant whose life determines the annuity benefit under this Contract. Any reference to the death of the annuitant means the death of the first annuitant to die.
joint owner – an owner who has an undivided interest with the right of survivorship in this Contract with another owner. Any reference to the death of the owner means the death of the first owner to die.

7


non-qualified contract – a contract which does not qualify for favorable tax treatment as a Qualified Plan, Individual Retirement Annuity, Roth IRA, SEP IRA, Simple-IRA or Tax Sheltered Annuity.
notice – any form of communication received by us, at the home office, either in writing or in another form approved by us in advance.
Your notices may be mailed to us at:
Principal Life Insurance Company
P.O. Box 9382
Des Moines, Iowa 50306-9382
owner – owns all the rights and privileges of this Contract (includes a joint owner, if any). If the owner is not a natural person, the owner must be an entity with its own taxpayer identification number.
premium payments – the total amount you contributed to the Contract.
qualified plans – retirement plans which receive favorable tax treatment under Section 401 or 403(a) of the Internal Revenue Code.
Required Minimum Distribution (“RMD”) amount – the amount required to be distributed each calendar year for purposes of satisfying the RMD rules of Section 401(a)(9) of the Internal Revenue Code of 1986, as amended, and related Code provisions.
Separate Account division (division(s)) – a part of the Separate Account which invests in shares of an underlying mutual fund. (Referred to in the marketing materials as “sub-accounts.”)
Separate Account division value – the sum of all divisions’ value; each division’s value is determined by multiplying the number of units in that division by the unit value of that division.
surrender charge – the charge deducted upon certain partial surrenders or total surrender of the Contract accumulated value before the annuitization date.
surrender value – accumulated value less any applicable surrender charge, rider fees, annual fee, transaction fees and any premium tax or other taxes.
transfer – moving all or a portion of your accumulated value to or from one investment option or among several investment options. All transfers initiated during the same valuation period are considered to be one transfer for purposes of calculating the transaction fee, if any.
underlying mutual fund – a registered open-end investment company, or a series or portfolio thereof, in which a division invests.
unit – the accounting measure used to determine your proportionate interest in a division.
unit value – a measure used to determine the value of an investment in a division.
valuation date (valuation days) – each day the New York Stock Exchange (“NYSE”) is open for trading and trading is not restricted.
valuation period – the period of time from one determination of the value of a unit of a division to the next. Each valuation period begins at the close of normal trading on the NYSE, generally 4:00 p.m. Eastern Time, on each valuation date and ends at the close of normal trading of the NYSE on the next valuation date.
we, our, us – Principal Life Insurance Company. We are also referred to throughout this prospectus as the Company.
you, your – the owner of this Contract, including any joint owner.

8


SUMMARY OF EXPENSE INFORMATION (for applications signed before April 1, 2017)
For applications signed before April 1, 2017, the tables below describe the fees and expenses that you will pay when buying, owning and surrendering the Contract. If your application is signed on or after April 1, 2017, go to page 12 for your expense information.
The following table describes the fees and expenses you will pay at the time you buy the Contract, surrender the Contract or transfer cash value between investment options.
Contract owner transaction expenses(1)
 
Maximum
Current
Surrender charge without the No Surrender Charge Rider ("Liquidity Max") (as a percentage of amount surrendered)(2)
6%
6%
Surrender charge with Liquidity Max (as a percentage of amount surrendered)
0%
0%
Transaction Fees
 
 
•
for each unscheduled partial surrender
the lesser of $25 or 2% of each unscheduled partial surrender after the 12th unscheduled partial surrender in a contract year
$0
•
for each unscheduled transfer(3)
the lesser of $25 or 2% of each unscheduled transfer after the first unscheduled transfer in a contract year
$0
State Premium Taxes (vary by state)(4)
3.50% of premium payments made
0%
(1)
For additional information about the fees and expenses described in the table, see 2. CHARGES AND DEDUCTIONS.
(2) 
Surrender charge for contracts without Liquidity Max (as a percentage of amounts surrendered):
Table of surrender charges
Number of completed contract years
since each premium payment was made
Surrender charge applied to all premium
payments received in that contract year
0 (year of premium payment)
6%
1
6%
2
6%
3
5%
4
4%
5
3%
6
2%
7 and later
0%
(3) 
Note that in addition to the fees shown, the Separate Account and/or sponsors of the underlying mutual funds may adopt requirements pursuant to rules and/or regulations adopted by federal and/or state regulators which require us to collect additional transaction fees and/or impose restrictions on transfers.
(4) 
We do not currently assess premium taxes for any Contract issued, but reserve the right in the future to assess up to 3.50% of premium payments made for Contract owners in those states where a premium tax is assessed.

9


For applications signed before April 1, 2017, the following table describes the fees and expenses that are deducted periodically during the time that you own the Contract, not including underlying mutual fund fees and expenses.
Periodic Expenses
 
Maximum Annual Charge
Current Annual Charge
Annual Fee (waived for Contracts with accumulated value of $30,000 or more)
The lesser of $30 or 2.00% of the accumulated value
The lesser of $30 or 2.00% of the accumulated value
 
 
 
Separate Account Annual Expenses
 
Maximum Annual Charge
Current Annual Charge
Mortality and Expense Risks Charge (as a percentage of average daily Separate Account value)
1.15%
1.00%
Administration Charge (as a percentage of average daily Separate Account value)
0.30%
0.15%
Total Separate Account Annual Expense
1.45%
1.15%

Optional Riders(1)
 
Maximum Annual Charge
Current Annual Charge
Liquidity Max (as a percentage of average daily Separate Account value)
0.55%
0.25%
Return of Premium Death Benefit Rider(2) (as a percentage of the average quarterly accumulated value)
0.35%
0.20%
Annual Step-up Death Benefit Rider(2) (as a percentage of the average quarterly accumulated value)
0.50%
0.35%
(1) 
Not all riders may be available in all states or through all broker dealers and may be subject to additional restrictions. Some rider provisions may vary from state to state.
(2) You may only elect one of the death benefit riders. If you are purchasing the Pivot Series Variable Annuity as an Individual Retirement Annuity (IRA), as defined in Internal Revenue Code Sections 408(b)(k)(p) and 408A, the Return of Premium Death Benefit or the Annual Step-Up Death Benefit must be elected. If a pension trust as described in Section 401(a) of the Internal Revenue Code is purchasing the Pivot Series Variable Annuity, the Return of Premium Death Benefit or the Annual Step-Up Death Benefit must be elected.
This table shows the minimum and maximum total operating expenses charged by the underlying mutual funds that you may pay periodically during the time that you own the Contract. More detail concerning the fees and expenses of each underlying mutual fund is contained in its prospectus.
Minimum and Maximum Annual Underlying Mutual Fund Operating Expenses
as of December 31, 2015
 
Minimum
Maximum**
Total annual underlying mutual fund operating expenses (expenses that are deducted from underlying mutual fund assets, including management fees, distribution and/or service (12b-1) fees and other expenses)*
0.50%
6.43%
*
Some of the funds available are structured as a “fund of funds”. A fund of funds is a mutual fund that invests primarily in a portfolio of other mutual funds. The expenses shown include all the fees and expenses of the funds that a fund of funds holds in its portfolio.
**
The investment adviser for certain underlying mutual funds may voluntarily reimburse or waive fund expenses. For more information about these arrangements, consult the prospectuses for the underlying mutual funds.

10


EXAMPLES
The following examples are intended to help you compare the cost of investing in the Contract with the cost of investing in other variable annuity contracts. These costs include Contract owner transaction expenses, Contract fees, Separate Account annual expenses, and underlying mutual fund fees and expenses.
Example 1
The example figures are based on a Contract with an application signature date before April 1, 2017 and reflects the maximum charges imposed if you were to purchase the Contract without Liquidity Max and the Annual Step-Up Death Benefit Rider and you surrender within 7 years of your contract issue date. The amounts below are calculated using the maximum rider fees and not the current rider fees. The example assumes:
•
a $10,000 premium payment to issue the Contract and no subsequent premium payments;
•
a 5% return each year;
•
an annual Contract fee of $30 (expressed as a percentage of the average accumulated value);
•
the minimum and maximum annual underlying mutual fund operating expenses as of December 31, 2015 (without voluntary waivers of fees by the underlying funds, if any);
•
no premium taxes are deducted.
Although your actual costs may be higher or lower, based on these assumptions, your costs would be as shown below:
 
If you surrender your
Contract at the end of the
applicable time period
If you do not
surrender your Contract
If you fully annuitize your
Contract at the end of the
applicable time period
 
1 Yr.
3 Yrs.
5 Yrs.
10 Yrs.
1 Yr.
3 Yrs.
5 Yrs.
10 Yrs.
1 Yr.
3 Yrs.
5 Yrs.
10 Yrs.
Maximum Total Underlying Mutual Fund Operating Expenses (6.43%)
$1,342
$2,864
$4,137
$7,075
$822
$2,382
$3,840
$7,075
$822
$2,382
$3,840
$7,075
Minimum Total Underlying Mutual Fund Operating Expenses (0.50%)
$798
$1,331
$1,672
$2,714
$242
$744
$1,272
$2,714
$242
$744
$1,272
$2,714
Example 2
The example figures are based on a Contract with an application signature date before April 1, 2017 and reflects the maximum charges imposed if you were to purchase the Contract with Liquidity Max and the Annual Step-Up Death Benefit Rider and you do not surrender within 7 years of your contract issue date. The amounts below are calculated using the maximum rider fees and not the current rider fees. The example assumes:
•
a $10,000 premium payment to issue the Contract and no subsequent premium payments;
•
a 5% return each year;
•
an annual Contract fee of $30 (expressed as a percentage of the average accumulated value);
•
the minimum and maximum annual underlying mutual fund operating expenses as of December 31, 2015 (without voluntary waivers of fees by the underlying funds, if any);
•
no premium taxes are deducted.
Although your actual costs may be higher or lower, based on these assumptions, your costs would be as shown below:
 
If you surrender your
Contract at the end of the
applicable time period
If you do not
surrender your Contract
If you fully annuitize your
Contract at the end of the
applicable time period
 
1 Yr.
3 Yrs.
5 Yrs.
10 Yrs.
1 Yr.
3 Yrs.
5 Yrs.
10 Yrs.
1 Yr.
3 Yrs.
5 Yrs.
10 Yrs.
Maximum Total Underlying Mutual Fund Operating Expenses (6.43%)
$876
$2,524
$4,046
$7,360
$876
$2,524
$4,046
$7,360
$876
$2,524
$4,046
$7,360
Minimum Total Underlying Mutual Fund Operating Expenses (0.50%)
$296
$905
$1,538
$3,235
$296
$905
$1,538
$3,235
$296
$905
$1,538
$3,235
For Condensed Financial Information, see Appendix A.

11


SUMMARY OF EXPENSE INFORMATION (for applications signed on or after April 1, 2017)
For applications signed on or after April 1, 2017, the tables below describe the fees and expenses that you will pay when buying, owning and surrendering the Contract. If your application is signed before April 1, 2017, go to page 9 for your expense information.
The following table describes the fees and expenses you will pay at the time you buy the Contract, surrender the Contract or transfer cash value between investment options.
Contract owner transaction expenses(1)
 
Maximum
Current
Surrender charge without the No Surrender Charge Rider ("Liquidity Max") (as a percentage of amount surrendered)(2)
6%
6%
Surrender charge with Liquidity Max (as a percentage of amount surrendered)
0%
0%
Transaction Fees
 
 
• for each unscheduled partial surrender
the lesser of $25 or 2% of each unscheduled partial surrender after the 12th unscheduled partial surrender in a contract year
$0
• for each unscheduled transfer(3)
the lesser of $25 or 2% of each unscheduled transfer after the first unscheduled transfer in a contract year
$0
State Premium Taxes (vary by state)(4)
3.50% of premium payments made
0%
(1)
For additional information about the fees and expenses described in the table, see 2. CHARGES AND DEDUCTIONS.
(2) 
Surrender charge for contracts without Liquidity Max (as a percentage of amounts surrendered):
Table of surrender charges
Number of completed contract years
since each premium payment was made
Surrender charge applied to all premium
payments received in that contract year
0 (year of premium payment)
6%
1
6%
2
6%
3
5%
4
4%
5 and later
0%
(3) 
Note that in addition to the fees shown, the Separate Account and/or sponsors of the underlying mutual funds may adopt requirements pursuant to rules and/or regulations adopted by federal and/or state regulators which require us to collect additional transaction fees and/or impose restrictions on transfers.
(4) 
We do not currently assess premium taxes for any Contract issued, but reserve the right in the future to assess up to 3.50% of premium payments made for Contract owners in those states where a premium tax is assessed.

12


For applications signed on or after April 1, 2017, the following table describes the fees and expenses that are deducted periodically during the time that you own the Contract, not including underlying mutual fund fees and expenses.
Periodic Expenses
 
Maximum Annual Charge
Current Annual Charge
Annual Fee (waived for Contracts with accumulated value of $30,000 or more)
The lesser of $30 or 2.00% of the accumulated value
The lesser of $30 or 2.00% of the accumulated value
 
 
 
Separate Account Annual Expenses
 
Maximum Annual Charge
Current Annual Charge
Mortality and Expense Risks Charge (as a percentage of average daily Separate Account value)
1.15%
0.85%
Administration Charge (as a percentage of average daily Separate Account value)
0.30%

0.15%

Total Separate Account Annual Expense
1.45%
1.00%
Optional Riders(1)
 
Maximum Annual Charge
Current Annual Charge
Liquidity Max (as a percentage of average daily Separate Account value)
0.55%
0.25%
Return of Premium Death Benefit Rider(2) (as a percentage of the average quarterly accumulated value)
0.50%
0.35%
Annual Step-up Death Benefit Rider(2) (as a percentage of the average quarterly accumulated value)
0.60%
0.45%
(1) 
Not all riders may be available in all states or through all broker dealers and may be subject to additional restrictions. Some rider provisions may vary from state to state.
(2) You may only elect one of the death benefit riders. If you are purchasing the Pivot Series Variable Annuity as an Individual Retirement Annuity (IRA), as defined in Internal Revenue Code Sections 408(b)(k)(p) and 408A, the Return of Premium Death Benefit or the Annual Step-Up Death Benefit must be elected. If a pension trust as described in Section 401(a) of the Internal Revenue Code is purchasing the Pivot Series Variable Annuity, the Return of Premium Death Benefit or the Annual Step-Up Death Benefit must be elected.
This table shows the minimum and maximum total operating expenses charged by the underlying mutual funds that you may pay periodically during the time that you own the Contract. More detail concerning the fees and expenses of each underlying mutual fund is contained in its prospectus.
Minimum and Maximum Annual Underlying Mutual Fund Operating Expenses
as of December 31, 2015
 
Minimum
Maximum**
Total annual underlying mutual fund operating expenses (expenses that are deducted from underlying mutual fund assets, including management fees, distribution and/or service (12b-1) fees and other expenses)*
0.50%
6.43%
*
Some of the funds available are structured as a “fund of funds”. A fund of funds is a mutual fund that invests primarily in a portfolio of other mutual funds. The expenses shown include all the fees and expenses of the funds that a fund of funds holds in its portfolio.
**
The investment adviser for certain underlying mutual funds may voluntarily reimburse or waive fund expenses. For more information about these arrangements, consult the prospectuses for the underlying mutual funds.

13


EXAMPLES
The following examples are intended to help you compare the cost of investing in the Contract with the cost of investing in other variable annuity contracts. These costs include Contract owner transaction expenses, Contract fees, Separate Account annual expenses, and underlying mutual fund fees and expenses.
Example 1
The example figures are based on a Contract with an application signature date on or after April 1, 2017 and reflects the maximum charges imposed if you were to purchase the Contract without Liquidity Max and the Annual Step-Up Death Benefit Rider and you surrender within 5 years of your contract issue date. The amounts below are calculated using the maximum rider fees and not the current rider fees. The example assumes:
•
a $10,000 premium payment to issue the Contract and no subsequent premium payments;
•
a 5% return each year;
•
an annual Contract fee of $30 (expressed as a percentage of the average accumulated value);
•
the minimum and maximum annual underlying mutual fund operating expenses as of December 31, 2015 (without voluntary waivers of fees by the underlying funds, if any);
•
no premium taxes are deducted.
Although your actual costs may be higher or lower, based on these assumptions, your costs would be as shown below:
 
If you surrender your
Contract at the end of the
applicable time period
If you do not
surrender your Contract
If you fully annuitize your
Contract at the end of the
applicable time period
 
1 Yr.
3 Yrs.
5 Yrs.
10 Yrs.
1 Yr.
3 Yrs.
5 Yrs.
10 Yrs.
1 Yr.
3 Yrs.
5 Yrs.
10 Yrs.
Maximum Total Underlying Mutual Fund Operating Expenses (6.43%)
$1,351
$2,887
$4,172
$7,126
$831
$2,408
$3,877
$7,126
$831
$2,408
$3,877
$7,126
Minimum Total Underlying Mutual Fund Operating Expenses (0.50%)
$807
$1,359
$1,722
$2,813
$252
$774
$1,322
$2,813
$252
$774
$1,322
$2,813
Example 2
The example figures are based on a Contract with application signature date on or after April 1, 2017 and reflects the maximum charges imposed if you were to purchase the Contract with Liquidity Max and the Annual Step-Up Death Benefit Rider and you do not surrender within 5 years of your contract issue date. The amounts below are calculated using the maximum rider fees and not the current rider fees. The example assumes:
•
a $10,000 premium payment to issue the Contract and no subsequent premium payments;
•
a 5% return each year;
•
an annual Contract fee of $30 (expressed as a percentage of the average accumulated value);
•
the minimum and maximum annual underlying mutual fund operating expenses as of December 31, 2015 (without voluntary waivers of fees by the underlying funds, if any);
•
no premium taxes are deducted.
Although your actual costs may be higher or lower, based on these assumptions, your costs would be as shown below:
 
If you surrender your
Contract at the end of the
applicable time period
If you do not
surrender your Contract
If you fully annuitize your
Contract at the end of the
applicable time period
 
1 Yr.
3 Yrs.
5 Yrs.
10 Yrs.
1 Yr.
3 Yrs.
5 Yrs.
10 Yrs.
1 Yr.
3 Yrs.
5 Yrs.
10 Yrs.
Maximum Total Underlying Mutual Fund Operating Expenses (6.43%)
$885
$2,549
$4,082
$7,409
$885
$2,549
$4,082
$7,409
$885
$2,549
$4,082
$7,409
Minimum Total Underlying Mutual Fund Operating Expenses (0.50%)
$306
$934
$1,587
$3,329
$306
$934
$1,587
$3,329
$306
$934
$1,587
$3,329
For Condensed Financial Information, see Appendix A.

14


SUMMARY
This prospectus describes an individual flexible premium deferred variable annuity offered by the Company. The Contract is designed to provide individuals with retirement benefits, including:
•
non-qualified retirement programs; and
•
Individual Retirement Annuities (“IRA”), Simplified Employee Pension plans (“SEPs”) and Savings Incentive Match Plan for Employees (“SIMPLE”) IRAs adopted according to Section 408 of the Internal Revenue Code (see 8. FEDERAL TAX MATTERS). The Contract does not provide any additional tax deferral if you purchase it to fund an IRA or other investment vehicle that already provides tax deferral. If you are purchasing the Pivot Series Variable Annuity as an Individual Retirement Annuity (IRA), as defined in Internal Revenue Code Sections 408(b)(k)(p) and 408A, the Return of Premium Death Benefit or the Annual Step-Up Death Benefit must be elected. If a pension trust as described in Section 401(a) of the Internal Revenue Code is purchasing the Pivot Series Variable Annuity, the Return of Premium Death Benefit or the Annual Step-Up Death Benefit must be elected. There is a charge for the additional death benefit that is deducted quarterly.
For information on how to purchase the Contract, see 1. THE CONTRACT.
This section is a brief summary of the Contract’s features. More detailed information follows later in this prospectus.
Investment Limitations
•
Initial premium payment must be at least $5,000 for non-qualified contracts.
•
Initial premium payment must be at least $2,000 for all other contracts.
•
Each subsequent premium payment must be at least $500.
•
If you are a member of a retirement plan covering three or more persons and premium payments are made through an automatic investment program, the initial and subsequent premium payments for the Contract must average at least $100 and not be less than $50.
•
The total sum of all premium payments may not be greater than $2,000,000 without prior home office approval.
You may allocate your net premium payments to the investment options. A complete list of the divisions may be found in 10. TABLE OF SEPARATE ACCOUNT DIVISIONS. Each division invests in shares of an underlying mutual fund. More detailed information about the underlying mutual funds may be found in the current prospectus for each underlying mutual fund. These underlying mutual fund prospectuses are bound together with this prospectus.
Examination Offer Period (free look)
You may return the Contract during the examination offer period, which is no less than 15 days from the date you receive the Contract. The examination offer period may be longer in certain states.
•
The amount refunded will be a full refund of your accumulated value plus any Contract charges and premium taxes you paid unless state law (if applicable) requires otherwise. The underlying mutual fund fees and charges are not refunded to you as they are already factored into the Separate Account division value.
•
The amount refunded may be more or less than the premium payments made.
See 1. THE CONTRACT for additional information.
Transfers
During the accumulation period:
•
a dollar amount or percentage of transfer must be specified;
•
a transfer may occur on a scheduled or unscheduled basis.
Once the entire Contract accumulated value has been applied to an annuity payment option, transfers are not permitted.
See 1. THE CONTRACT and 3. TRANSFERS AND SURRENDERS for additional restrictions.

15


Deferred Income Transfers
If your contract includes the Deferred Income Rider, you may make deferred income transfers.
•
Deferred income transfers are not allowed during the first two contract years.
•
Deferred income transfer values are calculated using the price next determined after we receive your request in good order.
•
Minimum initial deferred income transfer is $5,000 and $1,000 for each subsequent deferred income transfer.
•
Maximum number of deferred income transfers is 15 per year and 125 total for the life of the Contract.
•
A deferred income transfer may be canceled by you within 10 days after receipt of the deferred income confirmation for that deferred income transfer. After these 10 days, you cannot access this amount except through receipt of the future stream of income payments under the deferred income payment option you elected. The deferred income transfers are maintained in the Company’s General Account and are guaranteed solely by the claims paying ability of the Company.
See 4. DEFERRED INCOME RIDER for additional information.
Surrenders
During the accumulation period:
•
the gross dollar amount to be surrendered must be specified;
•
surrendered amounts may be subject to surrender charges:
•
for contracts without Liquidity Max, the maximum surrender charge is 6% of the amount(s) surrendered; or
•
for contracts with Liquidity Max there are no surrender charges for amounts surrendered;
•
full surrender of the Contract accumulated value may be subject to an annual Contract fee;
•
for contracts without Liquidity Max, if surrender charges are applicable, each partial surrender that is less than the Free Surrender Amount is not subject to a surrender charge (See 2. CHARGES AND DEDUCTIONS);
•
surrenders before age 59½ may involve an income tax penalty (See 8. FEDERAL TAX MATTERS); and
•
deferred income transfers are not subject to surrender charges (See 4. DEFERRED INCOME RIDER).
Surrenders are not allowed for any amounts that have been applied to an annuity benefit payment option or deferred income payment option.
See 3. TRANSFERS AND SURRENDERS for additional information.
Charges and Deductions
•
No sales charge is deducted from premium payments at the time received. However, the Contract may impose a surrender charge on surrenders greater than the Free Surrender Amount.
•
A contingent deferred surrender charge is imposed on certain total or partial surrenders.
•
For applications signed before April 1, 2017:
•
Currently, an annual mortality and expense risks charge equal to 1.00% of amounts in the Separate Account divisions is imposed daily.
•
Currently, an annual Separate Account administration charge equal to 0.15% of amounts in the Separate Account divisions is imposed daily.
•The following optional riders are available at an additional cost:
•
Liquidity Max ("No Surrender Charge Rider") - The current annual rider charge is 0.25% of the average daily accumulated value in the Separate Account divisions, deducted daily. The maximum annual rider charge is 0.55% of the average daily accumulated value in the Separate Account divisions, deducted daily.
•
Return of Premium Death Benefit Rider - The current annual rider charge is 0.20% of the average accumulated value, deducted quarterly. The maximum annual rider charge is 0.35%.
•
Annual Step-Up Death Benefit Rider - The current annual rider charge is 0.35% of the average accumulated value, deducted quarterly. The maximum annual rider charge is 0.50%.

16


•
For applications signed on or after April 1, 2017:
•
Currently, an annual mortality and expense risks charge equal to 0.85% of amounts in the Separate Account divisions is imposed daily.
•
Currently, an annual Separate Account administration charge equal to 0.15% of amounts in the Separate Account divisions is imposed daily.
•
The following optional riders are available at an additional cost:
•
Liquidity Max ("No Surrender Charge Rider") – The current annual rider charge is 0.25% of the average daily accumulated value in the Separate Account divisions, deducted daily. The maximum annual rider charge is 0.55% of the average daily accumulated value in the Separate Account divisions, deducted daily.
•
Return of Premium Death Benefit Rider – The current annual rider charge is 0.35% of the average accumulated value, deducted quarterly. The maximum annual rider charge is 0.50%.
•
Annual Step-Up Death Benefit Rider – The current annual rider charge is 0.45% of the average accumulated value, deducted quarterly. The maximum annual rider charge is 0.60%.
•
There are underlying mutual fund expenses. More detailed information about the underlying mutual fund expenses may be found in the current prospectus for each underlying mutual fund.
•
Contracts with an accumulated value of less than $30,000 are subject to an annual fee of the lesser of $30 or 2% of the accumulated value. Currently we do not charge the annual fee if your accumulated value is $30,000 or more. If you own more than one variable annuity contract with us, all the contracts you own or jointly own are aggregated on each contract’s anniversary to determine if the $30,000 minimum has been met and whether that contract will be charged.
•
Certain states and local governments impose a premium tax. We reserve the right to deduct the amount of the tax from premium payments or the accumulated value.
See 2. CHARGES AND DEDUCTIONS for additional information.
Annuity Benefit Payments
•
You may choose from several fixed annuity benefit payment options which are described in 5. THE ANNUITIZATION PERIOD.
•
Payments are made to the owner (or beneficiary depending on the annuity benefit payment option selected). You should carefully consider the tax implications of each annuity benefit payment option. See 5. THE ANNUITIZATION PERIOD and 8. FEDERAL TAX MATTERS.
Death Benefit
•
The standard death benefit is the accumulated value.
•
At the time the application is signed, you may select one of the following death benefit riders if the oldest owner is younger than age 71 (for applications signed before April 1, 2017).
1.
Return of Premium Death Benefit Rider - the death benefit under this rider is the greater of:
(a)    the standard death benefit; or
(b)    the total of premium payments.
2.
Annual Step-Up Death Benefit Rider - the death benefit under this rider is the greatest of:
(a)    the standard death benefit; or
(b)     the total of premium payments; or
(c)
the highest accumulated value on any Contract anniversary prior to the lock-in date.
NOTE: For applications signed on or after April 1, 2017, the death benefit riders are available if the oldest owner is younger than age 80.
These death benefit amounts will be adjusted for premium payments, partial surrenders, partial annuitizations, and deferred income transfers.
If you are purchasing the Pivot Series Variable Annuity as an Individual Retirement Annuity (IRA), as defined in Internal Revenue Code Sections 408(b)(k)(p) and 408A, the Return of Premium Death Benefit or the Annual Step-Up Death Benefit must be elected. There is a charge for the additional death benefit that is deducted quarterly.
See 5. THE ANNUITIZATION PERIOD and 6. DEATH BENEFIT for additional information.

17


Deferred Income Rider
The Deferred Income Rider can provide you with a stream of income payments that will start at a date in the future that you select. Before making deferred income transfers, you should consider your liquidity needs because deferred income transfers cannot be surrendered after the 10 day cancellation period; those amounts are accessible only through the future stream of fixed income payments created by deferred income transfers.
The Deferred Income Rider is automatically issued at no additional cost when:
•the owner and annuitant are the same (except for a non-natural owner);
•the Contract does not have joint owners and/or joint annuitants; and
•for qualified contracts, the issue age is less than 67.
See 4. DEFERRED INCOME RIDER for additional information.
Contract Termination
If you do not have the Deferred Income Rider or you have the Deferred Income Rider and have not made deferred income transfers, the Contract will terminate:
•
If no premium payments are made during two consecutive calendar years and the accumulated value (or total premium payments less partial surrenders and applicable surrender charges) is less than $2,000. The Company will first notify you of its intent to exercise this right and give you 60 days to increase the accumulated value to at least $2,000.
•
If you fully annuitize and your accumulated value on the annuitization date is less than $2,000 or if the amount applied under an annuity benefit payment option is less than the minimum requirement.
If you have the Deferred Income Rider and have made deferred income transfers, the Contract will terminate when all deferred income payments have been made and the Contract accumulated value is zero.
1. THE CONTRACT
Principal Pivot Series Variable AnnuitySM is significantly different from a fixed annuity. As the owner of a variable annuity, you assume the risk of investment gain or loss (as to amounts in the Separate Account divisions) rather than the Company. The Separate Account division value under a variable annuity is not guaranteed and varies with the investment performance of the underlying mutual funds.
Based on your investment objectives, you direct the allocation of premium payments and accumulated values. There can be no assurance that your investment objectives will be achieved.
How to Buy a Contract
If you want to buy a Contract, you must submit an application and make an initial premium payment. If you are buying the Contract to fund a SIMPLE-IRA or SEP, an initial premium payment is not required at the time you send in the application. If the application is complete and the Contract applied for is suitable, the Contract is issued. If the completed application is received in good order, the initial premium payment is credited within two valuation days after the later of receipt of the application or receipt of the initial premium payment at our home office. If the initial premium payment is not credited within five valuation days, it is refunded unless we have received your permission to retain the premium payment until we receive the information necessary to issue the Contract.
The date the Contract is issued is the contract issue date. The contract issue date is the date used to determine contract years, regardless of when the Contract is delivered.
Tax-qualified retirement arrangements, such as IRAs, SEPs, and SIMPLE-IRAs, are tax-deferred. You derive no additional benefit from the tax deferral feature of the annuity. Consequently, an annuity should be used to fund an IRA or other tax qualified retirement arrangement to benefit from the annuity’s features other than tax deferral. These features may include guaranteed lifetime income, death benefits without surrender charges, guaranteed caps on fees, and the ability to make scheduled transfers among investment options without transaction fees.

18


Premium Payments
•
The initial premium payment must be at least $5,000 for non-qualified contracts.
•
The initial premium payment must be at least $2,000 for all other contracts.
•
Subsequent premium payments must be at least $500 and can be made until the earlier of the annuitization date or the date the Contract changes to inactive contract status.
•
If you are making premium payments through a payroll deduction plan or through a bank (or similar financial institution) account under an automated investment program, your initial and subsequent premium payments must be at least $100.
•
Premium payments are to be made by personal or financial institution check (for example, a cashier’s check). We reserve the right to refuse any premium payment that we feel presents a fraud or money laundering risk. Examples of the types of premium payments we will not accept are cash, money orders, starter checks, travelers checks, credit card checks, and foreign checks.
•
If you are a member of a retirement plan covering three or more persons, the initial and subsequent premium payments for the Contract must average at least $100 and cannot be less than $50.
•
If Liquidity Max is elected, premium payments are not subject to surrender charges.
•
If Liquidity Max is not elected, all premium payments are subject to a surrender charge period that begins in the contract year each premium payment is received.
•
The total sum of all premium payments for a Contract may not be greater than $2,000,000 (maximum premium limit) without our prior approval. For further information, please call 1-800-852-4450.
•
The Company reserves the right to increase the minimum amount for each premium payment with advance notice.
•
Premium payments are credited on the basis of the unit value next determined after we receive a premium payment.
•
If no premium payments are made during two consecutive calendar years and the accumulated value is less than $2,000, we reserve the right to terminate the Contract unless you have the Deferred Income Rider and have made deferred income transfers. See 4. DEFERRED INCOME RIDER and 7. ADDITIONAL INFORMATION ABOUT THE CONTRACT.
Allocating Premium Payments
•
On your application, you direct how your premium payments will be allocated to the investment options.
•
Allocations must be in percentages.
•
Percentages must be in whole numbers and total 100%.
•
Subsequent premium payments are allocated according to your then current allocation instructions.
•
Changes to the allocation instructions are made without charge.
•
A change is effective on the next valuation period after we receive your new instructions in good order.
•
You can change the current allocations and future allocation instructions by:
•
mailing your instructions to us;
•
calling us at 1-800-852-4450 (if telephone privileges apply);
•
faxing your instructions to us at 1-866-894-2093; or
•
visiting www.principal.com.
•
Changes to premium payment allocations do not result in the transfer of any existing investment option accumulated values. You must provide specific instructions to transfer existing accumulated values. We currently do not charge a transaction fee for these transfers but reserve the right to charge such a fee in the future.
•
Premium payments are credited on the basis of the unit value next determined after we receive a premium payment.
Exchange Credit (for exchanges from our fixed deferred annuities)
Effective January 1, 2017, the Exchange Credit is no longer available.

19


Right to Examine the Contract (free look)
It is important to us that you are satisfied with the purchase of your Contract. Under state law (or other authority, if applicable), you have the right to return the Contract for any reason during the examination offer period (a “free look”). The examination offer period is no less than 15 days from the date you receive the Contract. The examination offer period may be longer in certain states.
Although we currently allocate your initial premium payments to the investment options you have selected, during times of economic uncertainty and with prior notice to you, we may exercise our right to allocate initial premium payments to the Money Market division during the examination offer period.
NOTE:
All references to the Money Market division in this prospectus will mean the Fidelity VIP Government Money Market Division.
In California, for owners age 60 or older, we allocate initial premium payments to the Money Market division during the examination offer period unless you elect to immediately invest in the allocations you selected. If your premium payments were allocated to the Money Market division, after the free look period ends, your accumulated value will be converted into units of the division(s) according to your allocation instructions. The units allocated will be based on the unit value next determined for each division.
To exercise your free look, you must send the Contract and a written request to us postmarked before the close of business on the last day of the examination offer period.
If you properly exercise your free look, we will cancel the Contract. In some states, we are required to return your premium payments. If we are required to return your premium payments, we will return the greater of your premium payments or accumulated value. In all states we will return at least your accumulated value plus any premium tax charge deducted, and minus any applicable federal and state income tax withholding. The amount returned may be higher or lower than the premium payment(s) applied during the examination offer period.
If you are purchasing this Contract to fund an IRA, SIMPLE-IRA, or SEP-IRA and you return it on or before the seventh day of the examination offer period, we will return the greater of:
•
the total premium payment(s) made; or
•
your accumulated value plus any premium tax charge deducted, less any applicable federal and state income tax withholding and depending upon the state in which the Contract was issued, any applicable fees and charges.
You may obtain more specific information regarding the free look from your registered representative or by calling us at 1-800-852-4450.
Accumulated Value
The accumulated value of your Contract is the Separate Account division value.
There is no guaranteed minimum Separate Account division value. The value reflects the investment experience of the divisions that you choose and also reflects your premium payments, partial surrenders, surrender charges, partial annuitizations, deferred income transfers, and the Contract expenses deducted from the Separate Account.
The Separate Account division value changes from day to day and you bear the investment risk. At the end of any valuation period, your Contract’s value in a division is:
•the number of units you have in a division multiplied by
•the value of a unit in the division.
The number of units is equal to the total units purchased by allocations to the division from:
•your initial premium payment;
•subsequent premium payments;
• your Exchange Credit (effective January 1, 2017, the Exchange Credit is no longer available); and
•transfers from another investment option
minus units sold:
•for partial surrenders and/or partial annuitizations from the division;
•as part of a transfer to another division;
•as part of a deferred income transfer from the division; and
•to pay Contract charges and fees (not deducted as part of the daily unit value calculation).

20


Unit values are calculated each valuation date at the close of normal trading of the NYSE (generally 4:00 p.m. EST). To calculate the unit value of a division, the unit value from the previous valuation date is multiplied by the division’s net investment factor for the current valuation period. The number of units does not change due to a change in unit value.
The net investment factor measures the performance of each division. The net investment factor for a valuation period is [(a plus b) divided by (c)] minus d where:
a =
the share price (net asset value) of the underlying mutual fund at the end of the valuation period;
b =
the per share amount of any dividend* (or other distribution) made by the mutual fund during the valuation period;
c =
the share price (net asset value) of the underlying mutual fund at the end of the previous valuation period; and
d =
the daily charge for Total Separate Account Annual Expenses. The daily charge is calculated by dividing the annual amount of these expenses by 365 and multiplying by the number of days in the valuation period.
*
When an investment owned by an underlying mutual fund pays a dividend, the dividend increases the net asset value of a share of the underlying mutual fund as of the date the dividend is recorded. As the net asset value of a share of an underlying mutual fund increases, the unit value of the corresponding division also reflects an increase. Payment of a dividend under these circumstances does not increase the number of units you own in the division.
The Company reserves the right to terminate a Contract and send you the accumulated value if no premiums are paid during two consecutive calendar years and the accumulated value (or total premium payments less partial surrenders and applicable surrender charges) is less than $2,000. The Company will first notify you of its intent to exercise this right and give you 60 days to increase the accumulated value to at least $2,000. However, if deferred income transfers have been made, see 4. DEFERRED INCOME RIDER.
Telephone and Internet Services
If you elect telephone services or you elect internet services and satisfy our internet service requirements (which are designed to ensure compliance with federal UETA and E-SIGN laws), instructions for the following transactions may be given to us via the telephone or internet:
•
make premium payment allocation changes;
•
set up Dollar Cost Averaging (DCA) scheduled transfers;
•
make transfers; and
•
make changes to Automatic Portfolio Rebalancing (APR).
Neither the Company nor the Separate Account is responsible for the authenticity of telephone service or internet transaction requests. We reserve the right to refuse telephone service or internet transaction requests. You are liable for a loss resulting from a fraudulent telephone or internet order that we reasonably believe is genuine. We follow procedures in an attempt to assure genuine telephone service or internet transactions. If these procedures are not followed, we may be liable for loss caused by unauthorized or fraudulent transactions. The procedures may include recording telephone service transactions, requesting personal identification (for example, name, address, security phrase, password, daytime telephone number, or birth date) and sending written confirmation to your address of record.
Instructions received via our telephone services and/or the internet are binding on both owners if the Contract is jointly owned.
If the Contract is owned by a business entity or a trust, an authorized individual (with the proper password) may use telephone and/or internet services. Instructions provided by the authorized individual are binding on the owner.
We reserve the right to modify or terminate telephone service or internet transaction procedures at any time. Whenever reasonably feasible, we will provide you with prior notice (by mail or by email, if previously authorized by you) if we modify or terminate telephone service or internet transaction procedures. In some instances, it may not be reasonably feasible to provide prior notice if we modify or terminate telephone service or internet transaction procedures; however, any modification or termination will apply to all Contract owners in a non-discriminatory fashion.

21


Telephone Services
Telephone services are available to you. Telephone services may be declined on the application or at any later date by providing us with written notice. You may also elect telephone authorization for your registered representative by providing us written notice.
If you elect telephone privileges, instructions
•
may be given by calling us at 1-800-852-4450 while we are open for business (generally, between 8 a.m. and 6 p.m. Eastern Time on any day that the NYSE is open).
•
that are in good order and received by us before the close of a valuation period will receive the price next determined (the value as of the close of that valuation period).
•
that are in good order and received by us after the close of a valuation period will receive the price next determined (the value as of the close of the next valuation period).
•
that are not in good order when received by us will be effective the next valuation date that we receive good order instructions.
Internet
Internet services are available to you if you register for a secure login on the Principal Financial Group web site, www.principal.com. You may also elect internet authorization for your registered representative by providing us written notice.
If you register for internet privileges, instructions
•
that are in good order and received by us before the close of a valuation period will receive the price next determined (the value as of the close of that valuation period).
•
that are in good order and received by us after the close of a valuation period will receive the price next determined (the value as of the close of the next valuation period).
•
that are not in good order when received by us will be effective the next valuation day that we receive good order instructions.
2. CHARGES AND DEDUCTIONS
Certain charges are deducted under the Contract. If the charge is not sufficient to cover our costs, we bear the loss. If the expense is more than our costs, the excess is profit to the Company. We expect a profit from all the fees and charges listed below, except the Annual Fee, Transaction Fee and Premium Tax. For a summary, see SUMMARY OF EXPENSE INFORMATION.
In addition to the charges under the Contract, there are also deductions from and expenses paid out of the assets of the underlying mutual funds which are described in the underlying mutual funds’ prospectuses.
No sales charge is collected or deducted when premium payments are applied under the Contract.
Liquidity Max ("No Surrender Charge Rider")
Liquidity Max is an optional feature available for an additional charge. If you have elected Liquidity Max, no surrender charges are assessed on total or partial surrenders. This rider must be elected at issue, cannot be terminated and applies to the entire Contract accumulated value.

22


Surrender Charge (not applicable with Liquidity Max)
If you have elected Liquidity Max, no surrender charges are assessed on total or partial surrenders. The remainder of this Surrender Charge subsection only applies to contracts without Liquidity Max.
A surrender charge is assessed on certain total or partial surrenders. The surrender charge would be deducted from the accumulated value remaining in the investment option(s) from which the amount is surrendered.
The amounts we receive from the surrender charge are used to cover some of the expenses of the sale of the Contract (primarily commissions, as well as other promotional or distribution expenses). If the surrender charge collected is not enough to cover the actual costs of distribution, the costs are paid from the Company’s General Account assets which include profit, if any, from the mortality and expense risks charge.
NOTE:
If you plan to make multiple premium payments, you need to be aware that each premium payment has its own surrender charge period (shown below). The surrender charge for any total or partial surrender is a percentage of all premium payments surrendered which were received by us during the contract years prior to the surrender. The applicable percentage which is applied to the premium payments surrendered is determined by the following tables.
Surrender charge (as a percentage of amounts surrendered) for applications signed before April 1, 2017:
Number of completed contract years
since each premium payment
was made
Surrender charge applied to all
premium payments received in
that contract year
0 (year of premium payment)
6%
1
6%
2
6%
3
5%
4
4%
5
3%
6
2%
7 and later
0
Surrender charge (as a percentage of amounts surrendered) for applications signed on or after April 1, 2017:
Number of completed contract years
since each premium payment
was made
Surrender charge applied to all
premium payments received in
that contract year
0 (year of premium payment)
6%
1
6%
2
6%
3
5%
4
4%
5 and later
0%
Each premium payment begins in year 0 for purposes of calculating the percentage applied to that premium payment. However, premium payments are added together by contract year for purposes of determining the applicable surrender charge. If your contract year begins April 1 and ends March 31 the following year, all premium payments received during that period are considered to have been made in that contract year.
For purpose of calculating surrender charges, we assume that surrenders and transfers are made in the following order:
•
first from premium payments no longer subject to a surrender charge;
•
then from the free surrender privilege (first from the earnings, then from the oldest premium payments (i.e., on a first-in, first-out basis)) described in this section; and
•
then from premium payments subject to a surrender charge on a first-in, first-out basis.
NOTE:    Partial surrenders may be subject to both a surrender charge and a transaction fee.

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Free Surrender Amount
The Free Surrender Amount may be surrendered without a surrender charge. This amount is the greater of:
•
earnings in the Contract (earnings equal accumulated value less unsurrendered premium payments as of the date of the surrender); or
•
10% of the premium payments, decreased by any partial surrenders, partial annuitizations, and deferred income transfers since the last Contract anniversary.
Any amount not taken under the Free Surrender Amount in a contract year is not added to the amount available under the Free Surrender Amount for any following contract year(s).
Unscheduled partial surrenders of the Free Surrender Amount may be subject to the transaction fee (see Transaction Fee).
When Surrender Charges Do Not Apply
The surrender charge does not apply to:
•
amounts applied under an annuity benefit payment option; or
•
deferred income transfers applied to a deferred income payment option; or
•
payment of any death benefit, however, the surrender charge does apply to premium payments made by a surviving spouse after an owner’s death; or
•
amounts distributed to satisfy the minimum distribution requirement of Section 401(a)9 of the Internal Revenue Code, provided that the amount surrendered does not exceed the minimum distribution amount which would have been calculated based on the value of this Contract alone; or
•
an amount transferred from a Contract used to fund an IRA to another annuity contract issued by the Company to fund an IRA of the participant’s spouse when the distribution is made pursuant to a divorce decree.
Waiver of Surrender Charge Rider (not applicable with Liquidity Max)
This rider is automatically added to the Contract at issue (subject to state approval and state variations may apply). There is no charge for this benefit.
This rider waives the surrender charge on surrenders made after the first Contract anniversary if the owner or annuitant has a critical need. A critical need includes confinement to a health care facility, terminal illness diagnosis, or total and permanent disability.
The benefits are available for a critical need if the following conditions are met:
•
the owner or annuitant has a critical need; and
•
the critical need did not exist before the contract issue date.
For the purposes of this rider, the following definitions apply:
•
health care facility — a licensed hospital or inpatient nursing facility providing daily medical treatment and keeping daily medical records for each patient (not primarily providing just residency or retirement care). This does not include a facility owned or operated by the owner, annuitant or a member of their immediate family. If the critical need is confinement to a health care facility, the confinement must continue for at least 60 consecutive days after the contract issue date and the surrender must occur within 90 days of the confinement’s end. Notice must be provided within 90 days after confinement ends.
•
terminal illness — sickness or injury that results in the owner’s or annuitant’s life expectancy being 12 months or less from the date notice to receive a distribution from the Contract is received by the Company.
•
total and permanent disability — the owner or annuitant is unable to engage in any occupation for pay or profit due to sickness or injury.

24


Transaction Fee
To assist in covering our administration costs, we reserve the right to charge a transaction fee of the lesser of $25 or 2% of each unscheduled partial surrender after the 12th unscheduled partial surrender in a contract year. The transaction fee would be deducted from the accumulated value remaining in the investment option(s) from which the amount is surrendered, on a pro rata basis.
To assist in covering our administration costs or to discourage market timing, we also reserve the right to charge a transaction fee of the lesser of $25 or 2% of each unscheduled transfer after the first unscheduled transfer in a contract year. The transaction fee would be deducted from the investment option(s) from which the amount is transferred, on a pro rata basis.
If we elect to begin charging for the transaction fees, we will provide you with advance written notice.
Premium Taxes
Some states and other governmental entities charge premium taxes or other similar taxes. We pay these taxes and may make a deduction from your Contract accumulated value for them when you make a premium payment, request a surrender (total or partial), request application of the accumulated value (full or partial) to an annuity benefit payment option, or make a deferred income transfer. Premium taxes generally range from 0% in most states to as high as 3.50% (premium taxes, if any, will vary from state to state).
Annual Fee
Contracts with an accumulated value of less than $30,000 are subject to an annual Contract fee of the lesser of $30 or 2% of the accumulated value. Currently, we do not charge the annual fee if your accumulated value is $30,000 or more. If we elect to begin charging the annual fee if your accumulated value is $30,000 or more, we will provide you with advance written notice. If you own more than one variable annuity contract with us, all the Contracts you own or jointly own are aggregated, on each Contract’s anniversary, to determine if the $30,000 minimum has been met and whether that Contract will be charged. The fee is deducted from the investment option that has the greatest value. The fee is deducted on each Contract anniversary and upon total surrender of the Contract. The fee assists in covering administration costs, primarily costs to establish and maintain the records which relate to the Contract.
Separate Account Annual Expenses
Mortality and Expense Risks Charge
We assess each division with a daily charge for mortality and expense risks. For applications signed before April 1, 2017, the annual rate of the charge is 1.00%. For applications signed on or after April 1, 2017, the annual rate of the charge is 0.85% of the average daily net assets of the Separate Account divisions. We reserve the right to increase this charge to an annual maximum of 1.15% of the average daily net assets of the Separate Account divisions. We will provide prior written notice in the event that we decide to exercise our right to increase the annual charge. This charge is assessed only prior to the annuitization date. This charge is assessed daily when the value of a unit is calculated.
This charge is intended to compensate us for the mortality risk on the Contract. We have a mortality risk in that we guarantee payment of a death benefit in a single payment or under an annuity benefit payment option. We do not impose a surrender charge on a death benefit payment, which is an additional mortality risk.
This charge is also intended to cover our expenses, primarily related to operation of the Contract, including
•
furnishing periodic Contract statements, confirmations and other customer communications;
•
preparation and filing of regulatory documents (such as this prospectus);
•
preparing, distributing and tabulating proxy voting materials related to the underlying mutual funds; and
•
providing computer, actuarial and accounting services.
If the mortality and expense risks charge is not enough to cover our costs, we bear the loss. If the mortality and expense risks charge is more than our costs, the excess is profit to the Company.

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Administration Charge
We assess each division with a daily Separate Account administration charge. The annual rate of the charge is 0.15% of the average daily net assets of the Separate Account divisions. We reserve the right to increase this charge to an annual maximum of 0.30% of the average daily net assets of the Separate Account divisions. We will provide prior written notice in the event that we decide to exercise our right to increase the annual charge. This charge is assessed only prior to the annuitization date. This charge is assessed daily when the value of a unit is calculated. The administration charge is intended to cover our costs for administration of the Contract that are not covered in the mortality and expense risks charge, above.
If the administration charge is not enough to cover our costs, we bear the loss. If the administration charge is more than our costs, the excess is profit to the Company.
Liquidity Max
The current annual charge for this rider is 0.25% of the average daily net assets of the Separate Account divisions. We reserve the right to increase this charge to an annual maximum of 0.55% of the average daily net assets of the Separate Account divisions. We will provide prior written notice in the event that we decide to exercise our right to increase the annual charge for this rider.
If the Liquidity Max charge is not enough to cover our costs, we bear the loss. If the Liquidity Max charge is more than our costs, the excess is profit to the Company.
Optional Death Benefit Riders
If you are purchasing the Pivot Series Variable Annuity as an Individual Retirement Annuity (IRA), as defined in Internal Revenue Code Sections 408(b)(k)(p) and 408A, the Return of Premium Death Benefit or the Annual Step-Up Death Benefit must be elected. There is a charge for the additional death benefit that is deducted quarterly.
Return of Premium Death Benefit Rider
For applications signed before April 1, 2017, the annual charge for this rider is 0.20% of the accumulated value. The charge is taken at the end of the calendar quarter at a quarterly rate of 0.05% of the average accumulated value during the calendar quarter. We reserve the right to increase this charge to an annual maximum of 0.35% (0.0875% quarterly) of the average accumulated value during the calendar quarter. The average quarterly accumulated value is equal to the accumulated value at the beginning of the calendar quarter plus the accumulated value at the end of the calendar quarter and the sum is divided by two.
For applications signed on or after April 1, 2017, the annual charge for this rider is 0.35% of the accumulated value. The charge is taken at the end of the calendar quarter at a quarterly rate of 0.0875% of the average accumulated value during the calendar quarter. We reserve the right to increase this charge to an annual maximum of 0.50% (0.1250% quarterly) of the average accumulated value during the calendar quarter. The average quarterly accumulated value is equal to the accumulated value at the beginning of the calendar quarter plus the accumulated value at the end of the calendar quarter and the sum is divided by two.
The charge is deducted through the redemption of units from your accumulated value in the same proportion as the surrender allocation percentages. If this rider is purchased after the beginning of a quarter, this charge is prorated according to the number of days it is in effect during the quarter. Upon termination of this rider or upon your death (annuitant’s death, if the owner is not a natural person), this charge will be based on the number of days this rider is in effect during the quarter.
The rider charge is intended to reimburse us for the cost of the potentially greater death benefit provided by this rider.

26


Annual Step-Up Death Benefit Rider
For applications signed before April 1, 2017, the annual charge for this rider is 0.35% of the accumulated value. The charge is taken at the end of the calendar quarter at a quarterly rate of 0.0875% of the average accumulated value during the calendar quarter. We reserve the right to increase this charge to an annual maximum of 0.50% (0.1250% quarterly) of the average accumulated value during the calendar quarter. The average quarterly accumulated value is equal to the accumulated value at the beginning of the calendar quarter plus the accumulated value at the end of the calendar quarter and the sum is divided by two.
For applications signed on or after April 1, 2017, the annual charge for this rider is 0.45% of the accumulated value. The charge is taken at the end of the calendar quarter at a quarterly rate of 0.1125% of the average accumulated value during the calendar quarter. We reserve the right to increase this charge to an annual maximum of 0.60% (0.1500% quarterly) of the average accumulated value during the calendar quarter. The average quarterly accumulated value is equal to the accumulated value at the beginning of the calendar quarter plus the accumulated value at the end of the calendar quarter and the sum is divided by two.
The charge is deducted through the redemption of units from your accumulated value in the same proportion as the surrender allocation percentages. If this rider is purchased after the beginning of a quarter, this charge is prorated according to the number of days it is in effect during the quarter. Upon termination of this rider or upon your death (annuitant’s death, if the owner is not a natural person), this charge will be based on the number of days this rider is in effect during the quarter.
The rider charge is intended to reimburse us for the cost of the potentially greater death benefit provided by this rider.
3. TRANSFERS AND SURRENDERS
Division Transfers
•
You may request an unscheduled transfer or set up a scheduled transfer by
•
mailing your instructions to us;
•
calling us at 1-800-852-4450 (if telephone privileges apply);
•
faxing your instructions to us at 1-866-894-2093; or
•
visiting www.principal.com.
•
You must specify the dollar amount or percentage to transfer from each division.
•
The minimum transfer amount is the lesser of $100 or the value of your division.
•
In states where allowed, we reserve the right to reject transfer instructions from someone providing them for multiple contracts for which he or she is not the owner.
Unscheduled Transfers
You may make unscheduled division transfers from one division to another division.
•
Transfer values are calculated using the price next determined after we receive your request in good order.
•
We reserve the right to impose a fee of the lesser of $25 or 2% of the amount transferred on each unscheduled transfer after the first unscheduled transfer in a contract year. If we elect to begin charging the transaction fee, we will provide you with written notice at least 30 days in advance.
Limitations on Unscheduled Transfers. We reserve the right to reject excessive exchanges or purchases if the trade would disrupt the management of the Separate Account, any division of the Separate Account or any underlying mutual fund. In addition, we may suspend or modify transfer privileges at our sole discretion any time to prevent market timing efforts that could disadvantage other owners. These modifications could include, but not be limited to:
•
requiring a minimum time period between each transfer;
•
imposing the transaction fee;
•
limiting the dollar amount that an owner may transfer at any one time; or
•
not accepting transfer requests from someone providing requests for multiple contracts for which he or she is not the owner.

27


Scheduled Transfers (Dollar Cost Averaging)
•
You may elect to have transfers made on a scheduled basis.
•
There is no charge for scheduled transfers and no charge for participating in the scheduled transfer program.
•
You must specify the dollar amount of the transfer.
•
You select the transfer date (other than the 29th, 30th or 31st) and the transfer period (monthly, quarterly, semi-annually or annually).
•
If the selected date is not a valuation date, the transfer is completed on the next valuation date.
•
If you want to stop a scheduled transfer, you must provide us notice prior to the date of the scheduled transfer.
•
Transfers continue until your value in the division is zero or we receive notice to stop the transfers.
•
The number of divisions available for simultaneous transfers will never be less than two. When we have more than two divisions available, we reserve the right to limit the number of divisions from which simultaneous transfers are made.
Scheduled transfers are designed to reduce the risks that result from market fluctuations. The transfers do this by spreading out the allocation of your money to investment options over a longer period of time. This allows you to reduce the risk of investing most of your money at a time when market prices are high. The results of this strategy depend on market trends and are not guaranteed.
Example:
Month
Amount Invested
Share Price
Shares Purchased
January
$100
$25.00
4
February
$100
$20.00
5
March
$100
$20.00
5
April
$100
$10.00
10
May
$100
$25.00
4
June
$100
$20.00
5
Total
$600
$120.00
33

In the example above, the average share price is $20.00 [total of share prices ($120.00) divided by number of purchases (6)]. The average share cost is $18.18 [amount invested ($600.00) divided by number of shares purchased (33)].
Automatic Portfolio Rebalancing (APR)
•
APR allows you to maintain a specific percentage of your Separate Account division value in specified divisions over time.
•
You may elect APR at any time after the examination offer period has expired.
•
APR is not available if you have arranged scheduled transfers from the same division.
•
There is no charge for APR transfers and no charge for participating in the APR program.
•
APR will be done on the frequency you specify:
•
quarterly (on a calendar year or contract year basis); or
•
semiannually or annually (on a contract year basis).
•
You may rebalance by
•
mailing your instructions to us;
•
calling us at 1-800-852-4450 (if telephone privileges apply);
•
faxing your instructions to us at 1-866-894-2093; or
•
visiting www.principal.com.
•
Divisions are rebalanced at the end of the next valuation period following your request.
Example:
You elect APR to maintain your Separate Account division value with 50% in the LargeCap Growth division and 50% in the Government & High Quality Bond division. At the end of the specified period, 60% of the accumulated value is in the LargeCap Growth division, with the remaining 40% in the Government & High Quality Bond division. By rebalancing, units from the LargeCap Growth division are redeemed and applied to the Government & High Quality Bond division so that 50% of the Separate Account division value is once again in each division.

28


Deferred Income Transfers
If your contract includes the Deferred Income Rider, you may make deferred income transfers to purchase deferred income payments.
•
Deferred income transfers are not allowed during the first two contract years.
•
Deferred income transfer values are calculated using the price next determined after we receive your request in good order.
•
Minimum initial deferred income transfer is $5,000 and $1,000 for each subsequent deferred income transfer.
•
Maximum number of deferred income transfers is 15 per year and 125 total for the life of the Contract.
•
A deferred income transfer may be canceled within 10 days after receipt of the deferred income confirmation for that deferred income transfer. After these 10 days, you cannot access this amount except through receipt of the future stream of income payments under the deferred income payment option you elected. The deferred income transfers are maintained in the Company’s General Account and are guaranteed solely by the claims paying ability of the Company.
See 4. DEFERRED INCOME RIDER for additional information.
Surrenders
You may surrender all or part your Contract accumulated value by providing us notice. Surrender requests may be sent to us at:
Principal Life Insurance Company
P O Box 9382
Des Moines, Iowa 50306-9382
Surrenders result in the redemption of units and your receipt of the value of the redeemed units minus any applicable surrender charge and fees. Surrender values are calculated using the price next determined after we receive your request in good order. Surrenders from the Separate Account are generally paid within seven days of the effective date of the request for surrender (or earlier if required by law). However, certain delays in payment are permitted (see 7. ADDITIONAL INFORMATION ABOUT THE CONTRACT). Surrenders before age 59½ may involve an income tax penalty (see 8. FEDERAL TAX MATTERS).
You may specify surrender allocation percentages with each partial surrender request. If you do not provide us with specific percentages, we will use your premium payment allocation percentages for the partial surrender. Surrenders may be subject to a surrender charge (see 2. CHARGES AND DEDUCTIONS).
Total Surrender with Deferred Income Rider
When deferred income transfers have not been made:
•
You may surrender the Contract at any time before the annuitization date.
•
Surrender values are calculated using the price next determined after we receive your request in good order.
•
The cash surrender value is your accumulated value minus any applicable surrender charges and fee(s) (Contract fee and/or prorated share of the charge(s) for optional rider(s)).
•
We reserve the right to require you to return the Contract.
•
If you have collaterally assigned this Contract, you must obtain written consent of all collateral assignees prior to surrender. A collateral assignment is an agreement under which you assign these annuity benefits to a lender as collateral for a loan.
When deferred income transfers have been made:
•
You may surrender the Contract accumulated value at any time before the annuitization date. Except for the Deferred Income Rider and its benefits, all other Contract provisions will then change to inactive contract status.  Any deferred income payments will be paid according to the deferred income payment option and frequency you selected. If the Contract changes to inactive contract status during the deferred income transfer 10 day cancellation period and you elect to cancel that deferred income transfer, the Contract will return to active status. See 4. DEFERRED INCOME RIDER for additional information.
•
Surrender values are calculated using the price next determined after we receive your request in good order.
•
The cash surrender value is your accumulated value minus any applicable surrender charges and fee(s) (Contract fee and/or prorated share of the charge(s) for optional rider(s)).
•
The written consent of all collateral assignees must be obtained prior to surrender.

29


Total Surrender without Deferred Income Rider
•
You may surrender the Contract at any time before the annuitization date.
•
Surrender values are calculated using the price next determined after we receive your request in good order.
•
The cash surrender value is your accumulated value minus any applicable surrender charges and fee(s) (Contract fee and/or prorated share of the charge(s) for optional rider(s)).
•
We reserve the right to require you to return the Contract.
•
The written consent of all collateral assignees must be obtained prior to surrender.
Unscheduled Partial Surrender
•
You may surrender a part of your accumulated value at any time before the annuitization date.
•
You must specify the dollar amount of the surrender (which must be at least $100).
•
The surrender is effective at the end of the valuation period during which we receive your written request for surrender.
•
The surrender is deducted from your investment options according to your surrender allocation percentages.
•
If surrender allocation percentages are not specified, we use your premium payment allocation percentages.
•
We surrender units from your investment options to equal the dollar amount of the surrender request plus any applicable surrender charge and transaction fee, if any.
•
We will not allow an unscheduled partial surrender that will result in your accumulated value being less than $5,000; we reserve the right to increase this amount up to and including $10,000.
•
The written consent of all collateral assignees must be obtained prior to surrender.
Scheduled Partial Surrender
•
You may elect partial surrenders from any of your investment options on a scheduled basis.
•
Your accumulated value must be at least $5,000 when the scheduled partial surrenders begin.
•
You may specify monthly, quarterly, semi-annually or annually and choose a surrender date (other than the 29th, 30th or 31st).
•
If the selected date is not a valuation date, the partial surrender is completed on the next valuation date.
•
All scheduled partial surrenders occurring on the Contract anniversary are reflected in the values for the prior year.
•
We surrender units from your investment options to equal the dollar amount of the partial surrender request plus any applicable partial surrender charge.
•
The partial surrenders continue until your value in the investment option is zero or we receive written notice to stop the partial surrenders.
•
The written consent of all collateral assignees must be obtained prior to partial surrender.
4. DEFERRED INCOME RIDER
The Deferred Income Rider is automatically issued at no additional cost when:
•the owner and annuitant are the same (except for a non-natural owner);
•the Contract does not have joint owners and/or joint annuitants; and
•for qualified contracts, the issue age is less than 67.
This rider allows you to move all or a portion of your accumulated value to a deferred income payment option, which provides you a stream of income payments starting on the income start date. You may not make any deferred income transfers until after the second Contract anniversary. Deferred income transfers are not subject to surrender charges.
Before making deferred income transfers, you should consider your liquidity needs because deferred income transfers cannot be surrendered; those amounts are accessible only through the future stream of fixed income payments created by deferred income transfers.
When a deferred income transfer is made, amounts in your Contract are moved from the Separate Account divisions to the General Account. With the amounts in the Separate Account divisions, you receive the benefit of investment gain or risk of investment loss rather than the Company. The deferred income transfers are maintained in our General Account and are guaranteed solely by the claims-paying ability of Principal Life Insurance Company.

30


While we guarantee future deferred income payments based on amounts transferred to the Deferred Income Rider and a variety of other factors, as described in this prospectus, we do not guarantee that the deferred income payments will be sufficient to provide you with a secure retirement. The level of deferred income payments necessary to secure your future is a subjective determination that only you, in conjunction with your financial advisor, can make. As a result, we strongly recommend that you consult with your financial advisor when determining the amount and timing of the deferred income transfers.
Deferred Income Rider Terms
We use the following definitions to describe the features of this rider.
deferred income death benefit - death benefit payable under the Deferred Income Rider if death occurs prior to the income start date. This death benefit equals the total of deferred income transfers made.
deferred income payment option - an option under which deferred income payments are made in accordance with the provisions of the rider. The list of available options is set forth in the deferred income payment options provision. The deferred income payment option is elected at the time of the initial deferred income transfer request. After the initial deferred income transfer has been processed and the 10 day cancellation period has expired, the deferred income payment option cannot be changed.
deferred income transfers - moving a portion of your accumulated value to purchase a deferred income payment.
designated payee - the person(s) you name to receive deferred income payments. In the absence of a named designated payee, you will receive the deferred income payments.
deferred income payment - the periodic amount payable by us under the rider.
inactive contract status - this status applies when at least one deferred income transfer has been made and the Contract accumulated value is reduced to zero. Except for the Deferred Income Rider and its benefits, all other rights and benefits under the Contract (including death benefits) end, and no additional premium payments will be accepted. 
income start date - the date deferred income payments begin. You select the income start date at the time of your initial deferred income transfer request. The income start date must be at least 13 contract months after the last deferred income transfer is made and can be no later than the earlier of: (a) 30 years from your initial deferred income transfer; or (b) age 95 (for non-qualified) or age 70½ (for qualified).
remaining guaranteed benefit - the benefit, if any, to be paid if the annuitant dies after the income start date. The remaining guaranteed benefit, if any, is described in the applicable deferred income payment option.
Deferred Income Transfers
If your contract includes the Deferred Income Rider, you may make deferred income transfers. Deferred income transfer amounts are used to determine the amount of the deferred income payments.
•
Deferred income transfers will be treated as partial surrenders under the contract.
•
Deferred income transfers are not subject to surrender charges and neither federal nor state income taxes are withheld; however, deferred income transfers are subject to applicable premium taxes.
•
Deferred income transfers are not allowed during the first two contract years.
•
You cannot make deferred income transfers if there are joint owners and/or joint annuitants.
•
You can make deferred income transfers only when the owner and annuitant are the same (except for a non-natural owner, in which case they can be different).
•
If there is an ownership change after deferred income transfers have been made, no additional deferred income transfers can be made.
•
Deferred income transfer amounts are calculated using the price next determined after we receive your request in good order.
•
Minimum initial deferred income transfer is $5,000 and $1,000 for each subsequent deferred income transfer.
•
Maximum number of deferred income transfers is 15 per year and 125 total for the life of the Contract.
•
The deferred income transfers may be canceled within 10 days after receipt of the deferred income confirmation. After these 10 days, you cannot access these amounts except through receipt of the future stream of income payments under the deferred income payment option you elected. The deferred income transfers are maintained in the Company’s General Account and are guaranteed solely by the claims paying ability of the Company.

31


Initial Deferred Income Transfer
The initial deferred income transfer cannot be made prior to the second Contract anniversary and must meet the deferred income transfer limits. At the time of the initial deferred income transfer, you will elect the deferred income payment option, the frequency of deferred income payments, and the income start date. At this time, you may also elect one of the optional cost of living adjustment features described later in this section. The deferred income payments will be based on the annuitant under the Contract at the time of the initial deferred income transfer. Unless the initial deferred income transfer is canceled as described in this section, the annuitant cannot be changed once the initial deferred income transfer has been made.
Subsequent Deferred Income Transfers
You may make one or more deferred income transfers after the initial deferred income transfer; however, all deferred income transfers must occur at least 13 contract months prior to the income start date. For each additional deferred income transfer after the initial deferred income transfer, we will use the then current purchase rates to determine the additional deferred income payment amount. However, deferred income payments purchased by additional deferred income transfers will not be less than those that would be purchased for any paid-up deferred annuity contract we offer at the same time to the same class of annuitants.
Deferred income transfers made after the initial deferred income transfer will not change the income start date, the deferred income payment option, or the frequency of deferred income payments.
Deferred Income Transfer Cancellation Period
When you make a deferred income transfer, we will provide written acknowledgement of the deferred income transfer amount. This acknowledgement will include the amount of the deferred income transfer, the amount by which the deferred income payment increased, the deferred income payment option and income start date. Within 10 days after you receive the acknowledgment, you may cancel the additional deferred income transfer. If a deferred income transfer is canceled, we will allocate that deferred income transfer amount to the investment options according to the premium allocation instructions on file or as you instruct us. The deferred income transfer amount will be allocated to the investment options on the next valuation period after your cancellation request is received in good order. If you cancel a deferred income transfer, you may not make another deferred income transfer for 90 days from the date that the deferred income transfer was canceled.
Inactive Contract Status (only for contracts with the Deferred Income Rider)
In the event that the Contract accumulated value reduces to zero, and deferred income transfers have been made, the Deferred Income Rider benefits will continue, but all other rights and benefits under the Contract (including the death benefits) will end, and no additional premium payments will be accepted.
Income Start Date
Deferred income payments will begin on the income start date you select. The income start date must be at least 13 contract months after the last deferred income transfer is made and can be no later than the earlier of: (a) 30 years from your initial deferred income transfer; or (b) age 95 (for non-qualified) or age 70½ (for qualified).
Income Start Date Change
While this rider is in force and prior to the initial income start date, you may make a one-time election to change the original income start date. The original income start date may be accelerated or deferred. If the income start date is accelerated, the new income start date must be within 5 contract years prior to the original income start date but no earlier than 13 contract months after the last deferred income transfer. If the income start date is deferred, the new income start date must be within the earlier of (a) 5 contract years after the original income start date; or (b) age 95 (for non-qualified) or age 70½ (for qualified).
To accelerate the income start date, your election must be made at least 60 days prior to the new income start date. To defer the income start date, your election must be made at least 60 days prior to the original income start date. The change will be effective on the date we receive your notice.

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If you change the income start date, future deferred income payments will also change. A change to an earlier date may result in a decrease in the deferred income payment amount and a change to a later date may result in an increase in the deferred income payment amount. Deferred income payments will be adjusted based on the mortality table, interest rate, and interest rate change adjustment shown on the data page such that the current value of the new deferred income payments with the new income start date is equivalent to the value of the original deferred income payments with the original income start date.
Deferred income payments adjusted because of an income start date change will comply with IRS required minimum distribution rules.
An income start date change will not change the deferred income payment option or the frequency of deferred income payments.
Deferred Income Payments
If the annuitant is alive on the income start date, we will begin paying deferred income payments to you or your designated payee.
Deferred income payments are based on:
1.
The deferred income transfers made;
2.
The income start date you selected;
3.
The deferred income payment option and the frequency of deferred income payments you elected;
4.
The annuitant's gender (unless not permitted under applicable unisex laws) and attained age for each deferred income transfer made; and
5.
The current interest rate environment for each deferred income transfer made.
The amount of your deferred income payment will be provided in a confirmation after each deferred income transfer.
It is possible that the deferred income payment amount you will receive may be higher or lower than the amount you might receive if you purchased a similar product offered by us or by another company. When making a deferred income transfer, you should consider payment amounts for similar products, as well as your future income needs, contract terms, the claims paying ability of the insurance company and your tax situation.
Deferred Income Payment Options
You may elect to receive deferred income payments from one of the following deferred income payment options.
SINGLE LIFE INCOME: Beginning on the income start date, we will pay the deferred income payment, at the frequency you elect, as long as the annuitant is alive. The deferred income payment will end with the payment just before the annuitant’s death. There is no remaining guaranteed benefit payable under this deferred income payment option when the annuitant dies.
SINGLE LIFE INCOME WITH GUARANTEED PERIOD: Beginning on the income start date, we will pay the deferred income payment, at the frequency you elect, as long as the annuitant is alive. You may select a guaranteed period between 5 and 30 years. The deferred income payment will end with the payment just before the annuitant’s death. If the annuitant dies after the income start date but before the end of the guaranteed period, we will pay the remaining guaranteed benefit. The remaining guaranteed benefit is the continuation of the deferred income payment, at the same frequency until the end of the guaranteed period.
SINGLE LIFE INCOME WITH CASH REFUND: Beginning on the income start date, we will pay the deferred income payment, at the frequency you elect, as long as the annuitant is alive. The deferred income payment will end with the payment just before the annuitant’s death. If the annuitant dies after the income start date and the total of all deferred income payments received is less than the total of all deferred income transfers made since the contract issue date, we will pay the remaining guaranteed benefit. The remaining guaranteed benefit is paid as a lump sum and is the total of all deferred income transfers made since the contract issue date less the total of all deferred income payments received since the income start date.

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SINGLE LIFE INCOME WITH INSTALLMENT REFUND: Beginning on the income start date, we will pay the deferred income payment, at the frequency you elect, as long as the annuitant is alive. The deferred income payment will end with the payment just before the annuitant’s death. If the annuitant dies after the income start date and the total of all deferred income payments received is less than the total of all deferred income transfers made since the contract issue date, we will pay the remaining guaranteed benefit. The remaining guaranteed benefit is the continuation of the deferred income payment at the same frequency until the total of all deferred income payments made since the income start date equals the total of all deferred income transfers received since the contract issue date.
Deferred Income Payment Advancement
The deferred income payment advancement feature is not available prior to the income start date. Advanced deferred income payments are only available if deferred income payments are being paid monthly and the contract is not subject to required minimum distribution rules established under the Internal Revenue Service.
After the income start date, you may elect to receive a lump sum payment of up to six deferred income payments in advance by providing notice to us. You will not receive deferred income payments during the months for which payments have been advanced.
You may receive advanced deferred income payments in a lump sum four times during the life of the contract. Monthly deferred income payments must resume before you will be allowed to exercise this option again.
If the annuitant dies before monthly deferred income payments resume, any advanced deferred income payments that would not have been paid after the death of the annuitant must be returned to us.
Please consult a tax advisor about any possible tax consequences before you exercise this option.
Optional Cost of Living Adjustment Features
At the time of the initial deferred income transfer, you may elect one of the optional cost of living adjustment features in this section. This election will apply to all deferred income transfers and cannot be changed. After the income start date, these features allow for potential increases to the deferred income payment amounts you receive. While there is no charge for these features, the election of either of these features will result in a lower deferred income payment in the early years that deferred income payments are made than if you had not elected the feature.
Optional CPI-U Based Adjustment
At the time of the initial deferred income transfer, you may elect a deferred income payment adjustment based on the all-item Consumer Price Index for All Urban Consumers (CPI-U), as published by the United States Department of Labor. If you elect the optional CPI-U based adjustment feature, you may not elect the optional fixed percentage adjustment feature described in this section.
If you elect this optional feature, on each anniversary of the income start date, we will determine a new deferred income payment equal to:
1.
The deferred income payment on the income start date, multiplied by
2.
The CPI-U value for the month that is three calendar months preceding the current anniversary of the income start date, divided by
3.
The CPI-U value for the month that is three calendar months preceding the income start date.
If the new deferred income payment would be less than the current deferred income payment, no change will be made.
If the originally published CPI-U value for any month is later revised, we will not recalculate the value.
We reserve the right to substitute what we believe is an appropriate index for the CPI-U if:
1.
The CPI-U is discontinued, delayed, or otherwise not available for this use; or
2.
The composition or base of, or method of calculating, the CPI-U changes so that we consider it not appropriate for calculating future changes.

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Optional Fixed Percentage Adjustment
At the time of the initial deferred income transfer, you may elect an annual deferred income payment adjustment based on a fixed percentage. You may elect a fixed percentage between 1% and 5% (whole percentages only) on which the adjustment will be based. Once elected, the fixed percentage is set and may not be changed. If you elect the optional fixed percentage adjustment feature, you may not elect the optional CPI-U based adjustment feature previously described.
If you elect this optional feature, on each anniversary of the income start date, the deferred income payment will increase by the fixed percentage you elected. On each anniversary of the income start date, the deferred income payment for that year equals the prior year’s deferred income payment multiplied by (1 + the fixed percentage).
Death Provisions of the Deferred Income Rider
Death Occurs Prior to the Income Start Date
Prior to the income start date, upon the death of the owner who is also the annuitant and causes a death benefit to be payable under the Contract, this rider terminates and any deferred income death benefit will be added to the death benefit provided under the Contract. If the spouse continues the Contract, the rider also terminates and any deferred income death benefit will be added to the death benefit provided under the Contract and will be credited to the investment options in accordance with the then current premium allocation instructions under the Contract.
Prior to the income start date, upon the death of an owner who is not also the annuitant, this rider terminates and the deferred income death benefit will be added to the death benefit otherwise provided under the Contract. However, if the spouse continues the Contract, the deferred income death benefit is not payable and the benefits under this rider will continue.
Prior to the income start date, upon the death of the annuitant who is not also the owner and does not cause a death benefit to be payable under the Contract, this rider terminates. Any deferred income death benefit will be added to the death benefit otherwise provided under the Contract and will be credited to the investment options in accordance with the then current premium allocation instructions under the Contract.
Prior to the income start date, upon the death of the annuitant who is not also the owner and causes a death benefit to be payable under the Contract (non-natural owner), this rider terminates. Any deferred income death benefit will be added to the death benefit otherwise provided under the Contract.
In the event a death benefit is paid under this rider prior to the income start date and the accumulated value of the Contract is zero, any death benefit payable under this rider will be paid to any beneficiary(ies) in a lump sum.
Death Occurs After the Income Start Date
Upon the death of the annuitant on or after the income start date, deferred income payments will stop unless such death occurs prior to the deferred income payment guaranteed period end date or there is a remaining guaranteed death benefit. In that case, deferred income payments will continue to be paid to the designated beneficiary as described in the applicable deferred income payment option provision.
Upon the death of an owner on or after the income start date, any remaining portion of the interest in the deferred income payments will be distributed at least as rapidly as under the method of distribution used as of the date of death.
Notice of Death
We must be notified immediately of the death of any owner(s) and any annuitant(s). We are entitled to immediately recover any overpayment made because of failure to give us immediate notice of any such death. We are not responsible for any misdirected payments which result from a failure to immediately notify us of any such death.

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Summary Report
When deferred income transfers have been made, at least once a year, we will send you a summary of the contract activity and values, including the following information:
1.
The beginning and end dates of the current period;
2.
The deferred income transfers made, by date received;
3.
The deferred income payment purchased by each deferred income transfer during the current period;
4.
The income start date;
5.
The deferred income payment option; and
6.
The amount of the deferred income death benefit, if any, at the end of the then current period.
Additional summaries will be provided to you upon request. Any charge associated with providing additional summaries will not exceed $25.00.
Termination
This rider will terminate when one of the following occurs:
1.
The contract terminates; or
2.
Upon a death that results in termination of this rider, as described in the Death Provisions of the Deferred Income Rider.
Delay of Deferred Income Transfer
Deferred income transfers are generally completed within seven calendar days after our receipt of your request. However, a deferred income transfer may be deferred during any period when the right to sell mutual fund shares is suspended as permitted under provisions of the Investment Company Act of 1940 (as amended).
The right to sell shares may be suspended during any period when:
•
trading on the NYSE is restricted as determined by the SEC or when the NYSE is closed for other than weekends and holidays; or
•
an emergency exists, as determined by the SEC, as a result of which:
•
disposal by a mutual fund of securities owned by it is not reasonably practicable;
•
it is not reasonably practicable for a mutual fund to fairly determine the value of its net assets; or
•
the SEC permits suspension for the protection of security holders.
If a deferred income transfer is delayed, the deferred income transfer will be processed on the first valuation date following the expiration of the permitted delay unless we receive your written instructions to cancel your deferred income transfer. Your written instruction must be received in the home office prior to the expiration of the permitted delay. The transaction will be completed within seven business days following the expiration of a permitted delay.
5. THE ANNUITIZATION PERIOD
Annuitization Date
You may specify an annuitization date on your application. You may change the annuitization date with our prior approval. The request must be in writing. You may not select an annuitization date that is prior to the first Contract anniversary or after the maximum annuitization date (the later of age 85 or ten years after the contract issue date; state variations may apply) found on the data page. If you do not specify an annuitization date, the annuitization date is the maximum annuitization date shown on the data page.
Full Annuitization
Any time after the first contract year, you may annuitize your Contract by electing to receive payments under an annuity benefit payment option. If the accumulated value on the annuitization date is less than $2,000 or if the amount applied under an annuity benefit payment option is less than the minimum requirement, we may pay out the entire amount in a single payment. The Contract would then be canceled unless deferred income transfers have been made (see 4. DEFERRED INCOME RIDER). You may select when you want the payments to begin (within the period that begins the business day following our receipt of your instruction and ends one year after our receipt of your instructions).

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Once payments begin under the annuity benefit payment option you choose, the option may not be changed. In addition, once payments begin, you may not surrender or otherwise liquidate or commute any of the portion of your accumulated value that has been annuitized.
Depending on the type of annuity benefit payment option selected, payments that are initiated either before or after the annuitization date may be subject to tax penalties (see 8. FEDERAL TAX MATTERS). You should consider this carefully when you select or change the annuity benefit payment commencement date.
Partial Annuitization
You have the right to partially annuitize a portion of your accumulated value. After the first contract year and prior to the annuitization date, you may annuitize a portion of your accumulated value by sending us a notice.
The minimum partial annuitization amount is $2,000. Any partial annuitization request that reduces the accumulated value to less than $5,000 will be treated as a request for full annuitization. If the amount applied to a benefit option results in an annuity income payment that is less than the minimum requirement, we reserve the right to change the frequency of your income payments to an interval that will result in a payment amount of at least the minimum requirement.
You may select one of the annuity benefit payment options listed below. Once payments begin under the option you selected, the option may not be changed. In addition, once payments begin you may not surrender or otherwise liquidate or commute any portion of your accumulated value that has been annuitized.
Annuity Benefit Payment Options
We offer fixed annuity benefit payments only. No surrender charge is imposed on any portion of your accumulated value that has been annuitized.
You may choose from several fixed annuity benefit payment options. Payments will be made on the frequency you choose. You may elect to have your annuity benefit payments made on a monthly, quarterly, semiannual or annual basis. The dollar amount of the payments is specified for the entire payment period according to the option selected. There is no right to take any total or partial surrenders after the annuitization date. The fixed annuity benefit payment must begin within one year of the annuity benefit election.
The amount of the fixed annuity benefit payment depends on the:
•
amount of accumulated value applied to the annuity benefit payment option;
•
annuity benefit payment option selected;
•
age and gender of the annuitant (unless fixed income option is selected);
•
frequency of the annuity benefit payments; and
•
duration of the annuity benefit payments.
The amount of the initial payment is determined by applying all or a portion of the accumulated value, less any applicable premium tax and other expenses, as of the date of the application to the annuity table for the annuitant’s annuity benefit payment option, gender, and age. Minimum annuity benefit payment amounts will be based on the 2012 Individual Annuity Mortality Period Life Table as stated in the Contract. This basis is guaranteed for the life of the Contract for the following fixed annuity benefit payment options: Life Income, Life Income with Period Certain, Joint and Survivor Life Income, and Joint and Survivor Life Income Period Certain. Other annuity benefit payment options may be available without this guaranteed basis.
Annuity benefit payments generally are higher for male annuitants than for female annuitants with an otherwise identical Contract. This is because statistically females have longer life expectancies than males. In certain states, this difference may not be taken into consideration in determining the payment amount. Additionally, Contracts with no gender distinctions are made available for certain employer-sponsored plans because, under most such plans, gender discrimination is prohibited by law.
The frequency and duration of the annuity benefit payments affect the income amount received. The annuity benefit payments generally are lower if you receive payments more frequently. For example, monthly payments generally will be lower than quarterly payments. Generally, all other factors being equal, the longer the duration of annuity benefit payments, the lower the annuity benefit payments amounts and the shorter the duration, the higher the annuity benefit payment amounts.

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You may select an annuity benefit payment option by written request only. Your selection of an annuity benefit payment option for a partial annuitization must be in writing and may not be changed after payments begin. Your selection of an annuity benefit payment option for any portion not previously annuitized may be changed by written request prior to the annuitization date.
If an annuity benefit payment option is not selected, we will automatically apply:
•
for Contracts with one annuitant — Life Income with payments guaranteed for a period of 10 years.
•
for Contracts with joint annuitants — Joint and Full Survivor Life Income with payments guaranteed for a period of 10 years.
The available annuity benefit payment options for both full and partial annuitizations include:
•
Life Income – Level payments continue for the annuitant’s lifetime. If you defer the first payment date, it is possible that you would receive no payments if the annuitant dies before the first payment date. NOTE: There is no death benefit value remaining and there are no further payments when the annuitant dies.
•
Life Income with Period Certain – Level payments continue during the annuitant’s lifetime with a guaranteed payment period of 5 to 30 years. If the annuitant dies before all of the guaranteed payments have been made, the guaranteed payments continue to you or the person(s) you designate until the end of the guaranteed payment period.
•
Joint and Survivor – Payments continue as long as either the annuitant or the joint annuitant is alive. You may also choose an option that lowers the amount of income after the death of a joint annuitant. It is possible that you would only receive one payment under this option if both annuitants die before the second payment is due. If you defer the first payment date, it is possible that you would receive no payments if both the annuitants die before the first payment date. NOTE: There is no death benefit value remaining and there are no further payments after both annuitants die.
•
Joint and Survivor with Period Certain – Payments continue as long as either the annuitant or the joint annuitant is alive with a guaranteed payment period of 5 to 30 years. You may choose an option that lowers the amount of income after the death of a joint annuitant. If both annuitants die before all guaranteed payments have been made, the guaranteed payments continue to you or the person(s) you designate until the end of the guaranteed payment period.
Other annuity benefit payment options may be available without the minimum annuity benefit payment amount guarantees described in the Contract. The annuity benefit payment amount will not be less than the annuity benefit payment amount that would be provided by using the accumulated value to purchase any Principal Life Insurance Company single premium immediate annuity contract offered to the same class of annuitants. These options may include:
•
Fixed Period Income – Level payments continue for a fixed period. You may select a range from 5 to 30 years (state variations may apply). If the annuitant dies before the selected period expires, payments continue to you or the person(s) you designate until the end of the fixed period. Payments stop after all guaranteed payments are received.
•
Life with Cash Refund – Level payments continue for the annuitant’s lifetime. If the annuitant dies and the total of all payments received is less than the amount of the accumulated value applied, the balance is paid to you or the person(s) you designate.
•
Life with Installment Refund – Level payments continue for the annuitant’s lifetime. If the annuitant dies and the total of all payments received is less than the amount of the accumulated value applied, payments continue to you or the person(s) you designate until they equal the amount of the accumulated value applied.
Death of Annuitant (During the Annuitization Period)
If the annuitant dies during the annuity benefit payment period, remaining payments are made to the owner throughout the guaranteed payment period, if any, or for the life of any joint annuitant, if any. If the owner is the annuitant, remaining payments are made to the contingent owner. In all cases the person entitled to receive payments also receives any rights and privileges under the annuity benefit payment option.

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6. DEATH BENEFIT
This Contract provides a death benefit upon the death of the owner. The Contract will not provide death benefits upon the death of an annuitant unless the annuitant is also an owner or the owner is not a natural person. If you have a Deferred Income Rider and have made at least one deferred income transfer, your death benefits will differ. For more information, see 4. DEFERRED INCOME RIDER.
Before the annuitization date, you may give us written instructions for payment under a death benefit option. If we do not receive your instructions, a death benefit is paid according to instructions from the beneficiary(ies). The beneficiary(ies) may elect to apply a death benefit under an annuity benefit payment option or receive a death benefit as a single payment. Generally, unless the beneficiary(ies) elects otherwise, we pay a death benefit in a single payment, subject to proof of your death.
No surrender charge applies when a death benefit is paid.
If the owner dies before the annuitization date, a death benefit is payable. The death benefit may be paid as either a single payment or under an annuity benefit payment option. If no election is made within the required period of time, the full amount will be paid in a lump sum to the applicable state. Once the money is paid to the applicable state, the beneficiary will have to contact the state to request additional assistance.
If the annuitant dies after the annuitization date, payments will continue only as provided by the annuity benefit payment option in effect.
The following tables illustrate the various situations and the resulting death benefit payment if death occurs before the annuitization date and while the accumulated value is greater than zero.
If you die and...
And...
Then...
You are the sole owner
Your spouse is not named as the sole primary beneficiary
The beneficiary(ies) receives the death benefit under the Contract.
If a beneficiary dies before you, upon your death we will make equal payments of that beneficiary's portion to the surviving beneficiaries unless you provided us with other written instructions. If no beneficiary(ies) survives you, the death benefit is paid to your estate in a single payment.
Upon your death, only your beneficiary’s(ies’) right to the death benefit will continue; all other rights and benefits under the Contract will terminate.


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If...
And...
Then...
You are the sole owner
Your spouse is named as the sole primary beneficiary
Your spouse may either
a. continue the Contract; or
b. receive the death benefit under the Contract.
If a beneficiary dies before you, upon your death we will make equal payments of that beneficiary's portion to the surviving contingent beneficiaries unless you provided us with other written instructions. If no beneficiary(ies) survives you, the death benefit is paid to your estate in a single payment.
Unless your spouse elects to continue the Contract, only your spouse’s right to the death benefit will continue; all other rights and benefits under the Contract will terminate.
If you elected one of the optional death benefit riders, the rider will terminate at the original owner's death.
You are a joint owner
The surviving joint owner is not your spouse
The surviving owner receives the death benefit under the Contract.
Upon your death, only the surviving owner’s right to the death benefit will continue; all other rights and benefits under the Contract will terminate.
You are a joint owner
The surviving joint owner is your spouse
Your spouse may either
a. continue the Contract; or
b. receive the death benefit under the Contract.
Unless your surviving spouse owner elects to continue the Contract, upon your death, only your spouse’s right to the death benefit will continue; all other rights and benefits under the Contract will terminate.
If you elected one of the optional death benefit riders, the rider will terminate at the death of the first owner to die.
If the annuitant dies
The owner is not a natural person
The beneficiary(ies) receives the death benefit under the Contract.
If a beneficiary dies before the annuitant, upon the annuitant’s death we will make equal payments of that beneficiary's portion to the surviving beneficiaries unless the owner provided us with other written instructions.
Upon the annuitant’s death, only the beneficiary’s(ies’) right to the death benefit will continue; all other rights and benefits under the Contract will terminate.

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Payment of Death Benefit
The death benefit is usually paid within five business days of our receiving all required documents (including proof of death) to process the claim. Payment is made according to benefit instructions provided by you. Some states require this payment to be made in less than five business days. Under certain circumstances, this payment may be delayed (see 7. ADDITIONAL INFORMATION ABOUT THE CONTRACT).
NOTE:
Proof of death includes: a certified copy of a death certificate; a certified copy of a court order; a written statement by a medical doctor; or other proof satisfactory to us.
The accumulated value remains invested in the divisions until the valuation period during which we receive the required documents. If more than one beneficiary is named, only one beneficiary must provide a document showing proof of death. Each beneficiary’s portion of the Contract death benefit (not including any deferred income death benefit) remains invested in the divisions until the valuation period during which we receive the required documents. A beneficiary will be paid at the time he or she provides the required documents, including a claim form. Unless otherwise required by law, we pay interest on the death benefit from the first day the accumulated value is no longer invested in the divisions until payment is made. After payment of all of the death benefit (including any applicable interest), the Contract is terminated. However, if deferred income transfers have been made, see 4. DEFERRED INCOME RIDER.
Standard Death Benefit
The standard death benefit is automatically included at no additional cost with your Contract if you do not elect one of the optional death benefit riders. The standard death benefit is equal to your accumulated value on the date we receive proof of death and all required documents.
If you are purchasing the Pivot Series Variable Annuity as an Individual Retirement Annuity (IRA), as defined in Internal Revenue Code Sections 408(b)(k)(p) and 408A, the Return of Premium Death Benefit or the Annual Step-Up Death Benefit must be elected. There is a charge for the additional death benefit that is deducted quarterly.
Optional Death Benefit Riders
For applications signed before April 1, 2017, two optional death benefit riders are available as long as the oldest owner (or oldest annuity if non-natural owner) was younger than age 71. For applications signed on or after April 1, 2017, two optional death benefit riders are available as long as the oldest owner (or oldest annuitant if non-natural owner) is younger than age 80. The two optional death benefit riders are the Return of Premium Death Benefit Rider and the Annual Step-Up Death Benefit Rider. You may elect only one optional death benefit rider and this election is only available when you purchase the Contract. We reserve the right, in our sole discretion, to allow Contract owners to add a rider after issue and reserve the right to restrict the investment options available in one or both of these optional death benefit riders. If we exercise one or both of these rights, we will give written notice and our offer will not be unfairly discriminatory. There is an additional charge for the optional death benefit riders. See 2. CHARGES AND DEDUCTIONS for more information.
NOTE: If you do not elect one of the optional death benefit riders, the Standard Death Benefit will apply. If you are purchasing the Pivot Series Variable Annuity as an Individual Retirement Annuity (IRA), as defined in Internal Revenue Code Sections 408(b)(k)(p) and 408A, the Return of Premium Death Benefit or the Annual Step-Up Death Benefit must be elected. There is a charge for the additional death benefit that is deducted quarterly.
When available, an optional death benefit rider can only be elected at the time the Contract is issued.
If you elect one of the optional death benefit riders, the rider will terminate on the earliest of the following:
1.
the date we receive your request in good order to cancel it in our office (you may terminate this rider at any time); or
2.
the death of the owner; or
3.
the date the Contract owner is changed (unless changed to a non-natural owner); or
4.
the date the Contract accumulated value reduces to zero.
Once the optional death benefit rider you elected is terminated, it cannot be reinstated.

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Return of Premium Death Benefit
The Return of Premium Death Benefit is an optional death benefit rider offered at the time of purchase. There is an additional charge for the optional Return of Premium Death Benefit rider. See 2. CHARGES AND DEDUCTIONS for more information.
If you elected this rider, the death benefit amount is the greater of a or b, where:
a =
the accumulated value on the date we receive proof of death and all required documents; and
b =
the total of premium payments minus an adjustment for each partial surrender (and any applicable surrender charges and fees) and minus an adjustment for each partial annuitization made prior to the date we receive proof of death and all required documents.
NOTE:
If an amount is transferred from the Deferred Income Rider back to the accumulated value (as described in 4. DEFERRED INCOME RIDER), this amount will impact the above death benefit similar to premium payments.
The adjustment for each partial surrender (and any applicable surrender charges and fees) and for each partial annuitization made prior to the date we receive proof of death and all required documents is equal to (x divided by y) multiplied by z, where:
x =
the amount of the partial surrender (and any applicable surrender charges and fees) or the amount of the partial annuitization; and
y =
the accumulated value immediately prior to the partial surrender or partial annuitization; and
z =
the amount determined in b above immediately prior to the partial surrender or partial annuitization.
Example:
Your accumulated value is $10,000 and you take a partial surrender of $2,000 (20% of your accumulated value). For purposes of calculating the death benefit, we reduce the amount determined in b above by 20%.
Annual Step-Up Death Benefit
The Annual Step-Up Death Benefit is an optional death benefit rider offered at the time of Contract issue. There is an additional charge for the optional Annual Step-Up Death Benefit rider. See 2. CHARGES AND DEDUCTIONS for more information.
If you elected this rider, the death benefit amount is the greatest of a, b or c, where:
a =
the accumulated value on the date we receive proof of death and all required documents;
b =
the total of premium payments minus an adjustment for each partial surrender (and any applicable surrender charges and fees) and minus an adjustment for each partial annuitization made prior to the date we receive proof of death and all required documents; and
c =
the highest accumulated value on any Contract anniversary prior to the Lock-In Date plus any premium payments since that Contract anniversary and minus an adjustment for each partial surrender (and any applicable surrender charges and fees) and minus an adjustment for each partial annuitization made after that Contract anniversary.
The Lock-In Date is the Contract anniversary following the oldest owner's 80th birthday (or annuitant, if non-natural owner). After the Lock-In Date, but prior to the annuitization date, the amount determined in c above will only be increased by any premium payments made since the Lock-In Date, and decreased by an adjustment for each partial surrender and/or partial annuitization made since the Lock-In Date.
NOTE:
If an amount is transferred from the Deferred Income Rider back to the accumulated value (as described in 4. DEFERRED INCOME RIDER), this amount will impact the above death benefit similar to premium payments.
The adjustment for each partial surrender (and any applicable surrender charges and fees) and for each partial annuitization made prior to the date we receive proof of death and all required documents is equal to (x divided by y) multiplied by z, where:
x =
the amount of the partial surrender (and any applicable surrender charges and fees) or the amount of the partial annuitization; and
y =
the accumulated value immediately prior to the partial surrender or partial annuitization; and
z =
the amounts determined in b or c above immediately prior to the partial surrender or partial annuitization.
Example:
Your accumulated value is $10,000 and you take a partial surrender of $2,000 (20% of your accumulated value). For purposes of calculating the death benefit, we reduce the amounts determined in b or c above by 20%.

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7. ADDITIONAL INFORMATION ABOUT THE CONTRACT
The Contract
The entire Contract is made up of the Contract, amendments, riders and endorsements and data page. Only our corporate officers can agree to change or waive any provisions of a Contract. Any change or waiver must be in writing and signed by an officer of the Company.
Delay of Payments
Surrendered amounts are generally disbursed within seven calendar days after we receive your instruction for a surrender in a form acceptable to us. This period may be shorter where required by law. However, payment of any amount upon total or partial surrender, death, annuitization of the accumulated value or the transfer to or from a division may be deferred during any period when the right to sell mutual fund shares is suspended as permitted under provisions of the Investment Company Act of 1940 (as amended).
The right to sell shares may be suspended during any period when:
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trading on the NYSE is restricted as determined by the SEC or when the NYSE is closed for other than weekends and holidays; or
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an emergency exists, as determined by the SEC, as a result of which:
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disposal by a mutual fund of securities owned by it is not reasonably practicable;
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it is not reasonably practicable for a mutual fund to fairly determine the value of its net assets; or
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the SEC permits suspension for the protection of security holders.
If payments are delayed, the transfer will be processed on the first valuation date following the expiration of the permitted delay unless we receive your written instructions to cancel your surrender, annuitization, or transfer. Your written instruction must be received in the home office prior to the expiration of the permitted delay. The transaction will be completed within seven business days following the expiration of a permitted delay.
In addition, we reserve the right to defer payment of that portion of your accumulated value that is attributable to a premium payment made by check for a reasonable period of time (not to exceed 15 business days) to allow the check to clear the banking system.
Misstatement of Age or Gender
If the age or, where applicable, gender of the annuitant has been misstated, we adjust the annuity benefit payment and any deferred income payment under your Contract to reflect the amount that would have been payable at the correct age and gender. If we make any overpayment because of incorrect information about age or gender, or any error or miscalculation, we deduct the overpayment from the next payment or payments due. Underpayments are added to the next payment.
Assignment
If your Contract is part of your qualified plan, IRA, SEP, or SIMPLE-IRA, you may not assign ownership.
You may assign ownership of your non-qualified contract. Each assignment is subject to any payments made or action taken by the Company prior to our notification of the assignment. We assume no responsibility for the validity of any assignment. An assignment or pledge of a Contract may have adverse tax consequences.
An assignment must be made in writing and filed with us at our home office. Your rights, as well as those of the annuitant and beneficiary, are subject to any assignment on file with us. Any amount paid to an assignee is treated as a partial surrender and is paid in a single payment.
The Company may refuse any assignment or transfer at any time on a non-discriminatory basis and may refuse any assignment where it believes such assignment may cause the development of a trading market.

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Change of Owner or Annuitant
If your Contract is part of your qualified plan, IRA, SEP, or SIMPLE-IRA you may not change either the owner or the annuitant.
You may change the owner and/or annuitant of your non-qualified contract at any time. Your request must be in writing and approved by us. After approval, the change is effective as of the date you signed the request for change. If ownership is changed, the benefits under certain riders may be affected.
If an annuitant who is not an owner dies while the Contract is in force, a new annuitant may be named unless the owner is a corporation, trust or other entity.
If you have the Deferred Income Rider and deferred income transfers have been made, the annuitant may not be changed. See 4. DEFERRED INCOME RIDER.
Beneficiary
While this Contract is in force, you have the right to name or change a beneficiary. This may be done as part of the application process or by sending us a written request. Unless you have named an irrevocable beneficiary, you may change your beneficiary designation by sending us notice.
Contract Termination
We reserve the right to terminate the Contract and make a single payment (without imposing any charges) to you if your accumulated value at the end of the accumulation period is less than $2,000. Before the Contract is terminated, we will send you a notice to increase the accumulated value to $2,000 within 60 days. However, if deferred income transfers have been made, see 4. DEFERRED INCOME RIDER. Termination of the Contract will not unfairly discriminate against any owner.
Reinstatement
Reinstatement is only available for full surrender of your Contract. You cannot reinstate a partial surrender, deferred income transfer (except during the 10 day cancellation period), or partial annuitization. If you return a partial surrender or partial annuitization, they will be considered new premium payments.
If you have requested to replace this Contract with an annuity contract from another company and want to reinstate this Contract, the following apply:
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we reinstate the Contract effective on the original surrender date;
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we apply the amount received from the other company (“reinstatement amount”) and the amount of the surrender charge you paid when you surrendered the Contract;
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these amounts are priced on the valuation date the money from the other company is received by us;
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commissions are not paid on the amounts reinstated; and
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new data page is sent to your address of record.
Reports
We will mail to you a statement, along with any reports required by state law, of your current accumulated value at least once per year prior to the annuitization date. After the annuitization date, any reports will be mailed to the person receiving the annuity benefit payments.
Quarterly statements reflect purchases and redemptions occurring during the quarter as well as the balance of units owned and accumulated values.

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Important Information About Customer Identification Procedures
To help the government fight the funding of terrorism and money laundering activities, Federal law requires financial institutions to obtain, verify, and record information that identifies each person who applies for a Contract. When you apply for a Contract, we will ask for your name, address, date of birth, and other information that will allow us to verify your identity. We may also ask to see your driver’s license or other identifying documents.
If concerns arise with verification of your identity, no transactions will be permitted while we attempt to reconcile the concerns. If we are unable to verify your identity within 30 days of our receipt of your original premium payment, the Contract will be terminated and any value surrendered in accordance with normal redemption procedures. We will not suspend your right of full redemption, or postpone the date of payment upon redemption except as permitted by Section 22(e) of the Investment Act of 1940 or as amended.
We do not knowingly sell annuities that are for the benefit of a business/organization that is illegal under Federal and/or State law (such as a marijuana clinic), or a person who owns or receives income from such an entity or whose source of funds is illegal.
Frequent Trading and Market-Timing (Abusive Trading Practices)
This Contract is not designed for frequent trading or market timing activity of the investment options. If you intend to trade frequently and/or use market timing investment strategies, you should not purchase this Contract. The Company does not accommodate market timing.
We consider frequent trading and market timing activities to be abusive trading practices because they:
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Disrupt the management of the underlying mutual funds by:
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forcing the fund to hold short-term (liquid) assets rather than investing for long term growth, which results in lost investment opportunities for the fund; and
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causing unplanned portfolio turnover;
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Hurt the portfolio performance of the underlying mutual funds; and
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Increase expenses of the underlying mutual fund and Separate Account due to:
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increased broker-dealer commissions; and
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increased record keeping and related costs.
If we are not able to identify such abusive trading practices, the abuses described above will negatively impact the Contract and cause investors to suffer the harms described.
We have adopted policies and procedures to help us identify and prevent abusive trading practices. In addition, the underlying mutual funds monitor trading activity to identify and take action against abuses. While our policies and procedures are designed to identify and protect against abusive trading practices, there can be no certainty that we will identify and prevent abusive trading in all instances. When we do identify abusive trading, we will apply our policies and procedures in a fair and uniform manner.
If we, or an underlying mutual fund that is an investment option with the Contract, deem abusive trading practices to be occurring, we will take action that may include, but is not limited to:
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Rejecting transfer instructions from a Contract owner or other person authorized by the owner to direct transfers;
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Restricting submission of transfer requests by, for example, allowing transfer requests to be submitted by 1st class U.S. mail only and disallowing requests made via the internet, by facsimile, by overnight courier or by telephone;
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Limiting the number of unscheduled transfers during a contract year to no more than 12;
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Prohibiting you from requesting a transfer among the divisions for a minimum of thirty days where there is evidence of at least one round-trip transaction (exchange or redemption of shares that were purchased within 30 days of the exchange/redemption) by you; and
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Taking such other action as directed by the underlying mutual fund.
We support the underlying mutual funds right to accept, reject or restrict, without prior written notice, any transfer requests into a fund.
In some instances, a transfer may be completed prior to a determination of abusive trading. In those instances, we will reverse the transfer (within two business days of the transfer) and return the Contract to the investment option holdings it had prior to the transfer. We will give you notice in writing in this instance.

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Distribution of the Contract
The Company has appointed Principal Securities, Inc. ("PSI") formerly Princor Financial Services Corporation (Des Moines, Iowa 50392-0200), a broker-dealer registered under the Securities Exchange Act of 1934, a member of the Financial Industry Regulatory Authority and affiliate of the Company, as the distributor and principal underwriter of the Contract. PSI is paid 6.5% of premium payments by the Company for the distribution of the Contract. PSI also may receive 12b-1 fees in connection with purchases and sales of mutual funds underlying the Contracts. PSI currently receives 12b-1 fees for Principal Variable Contracts Funds.
PSI is an affiliate of the Company. Both PSI and the Company are subsidiaries of Principal Financial Services, Inc.
Applications for the Contracts are solicited by registered representatives of PSI or such other broker-dealers as have entered into selling agreements with PSI. Such registered representatives act as appointed agents of the Company under applicable state insurance law and must be licensed to sell variable insurance products. The Company intends to offer the Contract in all jurisdictions where it is licensed to do business and where the Contract is approved.
The intermediary may pay to its financial professionals some or all of the amounts the distributor and its affiliates pay to the intermediary.
Performance Calculation
The Separate Account may publish advertisements containing information (including graphs, charts, tables and examples) about the hypothetical performance of its divisions for this Contract as if the Contract had been issued on or after the date the underlying mutual fund in which the division invests was first offered. The hypothetical performance from the date of the inception of the underlying mutual fund in which the division invests is calculated by reducing the actual performance of the underlying mutual fund by the fees and charges of this Contract as if it had been in existence.
The yield and total return figures described in this section vary depending upon market conditions, composition of the underlying mutual fund’s portfolios and operating expenses. These factors and possible differences in the methods used in calculating yield and total return should be considered when comparing the Separate Account performance figures to performance figures published for other investment vehicles. The Separate Account may also quote rankings, yields or returns as published by independent statistical services or publishers and information regarding performance of certain market indices. Any performance data quoted for the Separate Account represents only historical performance and is not intended to indicate future performance. For further information on how the Separate Account calculates yield and total return figures, see the SAI.
From time to time the Separate Account advertises its Money Market division’s “yield” and “effective yield” for these Contracts. Both yield figures are based on historical earnings and are not intended to indicate future performance. The “yield” of the division refers to the income generated by an investment in the division over a 7-day period (which period is stated in the advertisement). This income is then “annualized.” That is, the amount of income generated by the investment during that week is assumed to be generated each week over a 52-week period and is shown as a percentage of the investment. The “effective yield” is calculated similarly but, when annualized, the income earned by an investment in the division is assumed to be reinvested. The “effective yield” is slightly higher than the “yield” because of the compounding effect of the assumed reinvestment.
The Separate Account also advertises the average annual total return of its various divisions. The average annual total return for any of the divisions is computed by calculating the average annual compounded rate of return over the stated period that would equate an initial $1,000 investment to the ending redeemable accumulated value.

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8. FEDERAL TAX MATTERS
The following description is a general summary of the tax rules, primarily related to federal income taxes, which in our opinion are currently in effect. These rules are based on laws, regulations and interpretations which are subject to change at any time. This summary is not comprehensive and is not intended as tax advice. Federal estate and gift tax considerations, as well as state and local taxes, may also be material. You should consult a tax advisor about the tax implications of taking action under a Contract or related retirement plan.
Taxation of Non-Qualified Contracts
Non-Qualified Contracts
Section 72 of the Internal Revenue Code (Code) governs the income taxation of annuities in general.
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Premium payments made under non-qualified contracts are not excludable or deductible from your gross income or any other person’s gross income.
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An increase in the accumulated value of a non-qualified contract owned by a natural person resulting from the investment performance of the Separate Account is generally not taxable until paid out as surrender proceeds, death benefit proceeds, or otherwise.
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Generally, owners who are non-natural persons are immediately taxed on any increase in the accumulated value unless the non-natural person is acting as an agent for a natural person.
The following discussion applies generally to Contracts owned by natural persons.
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Surrenders or partial surrenders are taxed as ordinary income to the extent of the accumulated income or gain under the Contract.
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The value of the Contract pledged or assigned is taxed as ordinary income to the same extent as a partial surrender.
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Annuity benefit payments and deferred income payments:
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The basic rule for taxing annuity benefit payments/deferred income payments is that part of each annuity benefit payment/deferred income payment is considered a nontaxable return of the investment in the Contract and part is considered taxable income. An “exclusion ratio” is applied to each annuity benefit payment/deferred income payment to determine how much of the payment is excludable from gross income. The remainder of the annuity benefit payment/deferred income payment is includable in gross income for the year received.
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The “investment in the Contract” is generally the total of the premium payments made less any tax-free return of premiums.
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After the investment in the Contract is paid out, the full amount of any annuity benefit payment/deferred income payment is taxable.
For purposes of determining the amount of taxable income resulting from distributions, all Contracts and other annuity contracts issued by us to the same owner within the same calendar year are treated as if they are a single contract.
Transfer of ownership may have tax consequences to the owner. Please consult with your tax advisor before changing ownership of your Contract.
Required Distributions for Non-Qualified Contracts
In order for a non-qualified contract to be treated as an annuity contract for federal income tax purposes, the Code requires:
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If the person receiving payments dies on or after the annuitization date but prior to the time the entire interest in the Contract has been distributed, the remaining portion of the interest is distributed at least as rapidly as under the method of distribution being used as of the date of that person’s death.
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If you die prior to the annuitization date, the entire interest in the Contract will be distributed:
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within five years after the date of your death; or
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as annuity benefit payments (or similar periodic payments) which begin within one year of your death and which are made over the life of your designated beneficiary or over a period not extending beyond the life expectancy of that beneficiary.

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Generally, unless the beneficiary elects otherwise, the above requirements are satisfied prior to the annuitization date by paying the death benefit in a single payment, subject to proof of your death. The beneficiary may elect, by written request, to receive an annuity benefit payment option instead of a single payment.
If your designated beneficiary is your surviving spouse, the Contract may be continued with your spouse deemed to be the new owner for purposes of the Code. Where the owner or other person receiving payments is not a natural person, the required distributions provided for in the Code apply upon the death of the annuitant.
Early Distribution Penalty
If you take a premature distribution from the Contract, you may incur an income tax penalty, unless the distribution is:
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made on or after you reach age 59½;
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made to a beneficiary on or after your death;
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made upon your disability;
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part of a series of substantially equal periodic payments for the life or life expectancy of you or you and your designated beneficiary;
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made under an immediate annuity contract; or
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allocable to contributions made prior to August 14, 1982.
Tax-Free Exchanges
Under Section 1035 of the Code, the exchange of one annuity contract for another is not a taxable transaction if the same owner is on each contract in the exchange, but may be reportable to the IRS.
Taxation of Qualified Contracts
Tax-Qualified Contracts: IRA, SEP, and SIMPLE-IRA
The Contract may be used to fund IRAs, SEPs, and SIMPLE-IRAs.
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IRA – An Individual Retirement Annuity (IRA) is a retirement savings annuity. Contributions grow tax deferred.
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SEP-IRA – SEP stands for Simplified Employee Pension and is a form of IRA. A SEP allows you, as an employer, to provide retirement benefits for your employees by contributing to their IRAs.
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SIMPLE-IRA – SIMPLE stands for Savings Incentive Match Plan for Employees. A SIMPLE-IRA allows employees to save for retirement by deferring salary on a pre-tax basis and receiving predetermined company contributions.
The tax rules applicable to owners, annuitants and other payees vary according to the type of plan and the terms and conditions of the plan itself. In general, premium payments made under a retirement program recognized under the Code are excluded from the participant’s gross income for tax purposes prior to the annuity benefit payment date (subject to applicable state law). The portion, if any, of any premium payment made that is not excluded from their gross income is their investment in the Contract. Aggregate deferrals under all plans at the employee’s option may be subject to limitations.
Tax-qualified retirement arrangements, such as IRAs, SEPs, and SIMPLE-IRAs, are tax-deferred. You derive no additional benefit from the tax deferral feature of the annuity. Consequently, an annuity should be used to fund an IRA, or other tax qualified retirement arrangement to benefit from the annuity’s features other than tax deferral. These features may include guaranteed lifetime income, death benefits without surrender charges, guaranteed caps on fees, and the ability to transfer among investment options without sales or withdrawal charges.
The tax implications of these plans are further discussed in the SAI under the heading Taxation Under Certain Retirement Plans. Check with your tax advisor for the rules which apply to your specific situation.

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Premature Distributions: There is a 10% penalty tax under the Code on the taxable portion of a “premature distribution” from IRAs, IRA rollovers, SEP-IRAs and SIMPLE-IRAs. The tax penalty is increased to 25% in the case of distributions from SIMPLE-IRAs during the first two years of participation in the SIMPLE IRA. Generally, an amount is a “premature distribution” unless the distribution is:
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made on or after you reach age 59½;
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made to a beneficiary on or after your death;
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made upon your disability;
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part of a series of substantially equal periodic payments for the life or life expectancy of you or you and your designated beneficiary;
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made to pay certain deductible medical expenses;
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for health insurance premiums while unemployed;
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for first home purchases (up to $10,000);
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for qualified higher education expenses;
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for qualified disaster tax relief distributions;
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for qualified reservist distributions; or
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for amounts levied by the IRS directly against your IRA.
For more information regarding premature distributions, please reference IRS Publication 590-B and consult your tax advisor.
Rollover IRAs
If you receive a lump-sum distribution from a qualified retirement plan, tax-sheltered annuity or governmental 457(b) plan, you may maintain the tax-deferred status of the distribution by rolling it over into an eligible retirement plan or IRA. You can accomplish this by electing a direct rollover from the plan, or you can receive the distribution and roll it over into an eligible retirement plan or IRA within 60 days. However, if you do not elect a direct rollover from the plan, the plan is required to withhold 20% of the distribution. This amount is sent to the IRS as income tax withholding to be credited against your taxes. Amounts received prior to age 59½ and not rolled over may be subject to an additional 10% penalty tax. You may roll over amounts from a qualified plan directly to a Roth IRA. As part of this rollover, previously taxed deferred funds from the qualified plan are converted to after-tax funds under a Roth IRA. Generally, the entire rollover is taxable (unless it includes after-tax dollars) and is included in gross income in the year of the rollover/conversion. For more information, please consult your tax advisor.
In addition, not more frequently than once every twelve months, an owner may execute one tax-free indirect rollover from one IRA to another, subject to the 60-day limitation. The once-per-year limitation on rollovers does not apply to direct transfers of funds between IRA providers or to Roth IRA conversions. For more information, please consult your tax advisor.
Roth IRAs
The Contract may be purchased to fund a Roth IRA. Contributions to a Roth IRA are not deductible from taxable income. Subject to certain limitations, a traditional IRA, SIMPLE-IRA or SEP-IRA may be converted into a Roth IRA or a distribution from such an arrangement may be rolled over to a Roth IRA. However, a conversion or a rollover to a Roth IRA is not excludable from gross income. If certain conditions are met, qualified distributions from a Roth IRA are tax-free. For more information, please contact your tax advisor.
Required Minimum Distributions for IRAs
The Required Minimum Distribution (RMD) regulations dictate when individuals must start taking payments from their IRA. Generally speaking, RMDs for IRAs must begin no later than April 1 following the close of the calendar year in which you turn 70½. Thereafter, the RMD is required no later than December 31 of each calendar year.
The RMD rules apply to traditional IRAs, as well as SEP-IRAs and SIMPLE-IRAs, during the lifetime and after the death of IRA owners. They do not, however, apply to Roth IRAs during the lifetime of the Roth IRA owner. If an individual owns more than one IRA, the RMD amount must be determined for each, but the actual distribution can be satisfied from a combination of one or more of the owner's IRAs. Roth IRAs may not be aggregated with other IRAs, but may be aggregated with other Roth IRAs.
Failure to comply with the RMD rules can result in tax penalty of 50% on the amount by which the RMD in any year exceeds the amount actually distributed in that year.

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Withholding
Amounts received under the Contract may be subject to income tax withholding unless the recipient elects not to have taxes withheld. The amounts withheld vary among recipients depending on the tax status of the individual and the type of payments from which taxes are withheld.
Notwithstanding the recipient’s election, withholding may be required on payments delivered outside the United States. Moreover, special withholding rules may require us to disregard the recipient’s election if the recipient fails to supply us with a taxpayer identification number (social security number for individuals), or if the Internal Revenue Service notifies us that the taxpayer identification number provided by the recipient is incorrect.
9. GENERAL INFORMATION ABOUT THE COMPANY
Corporate Organization and Operation
Principal Life Insurance Company
Principal Life Insurance Company is a stock life insurance company with authority to transact life and annuity business in all states of the United States and the District of Columbia. Our home office is located at: Principal Financial Group, Des Moines, Iowa 50392. We are a wholly owned subsidiary of Principal Financial Services, Inc., which in turn, is a wholly owned direct subsidiary of Principal Financial Group, Inc., a publicly-traded company.
On June 24, 1879, we were incorporated under Iowa law as a mutual assessment life insurance company named Bankers Life Association. We became a legal reserve life insurance company and changed our name to Bankers Life Company in 1911. In 1986, we changed our name to Principal Mutual Life Insurance Company. In 1998, we became Principal Life Insurance Company, a subsidiary stock life insurance company of Principal Mutual Holding Company, as part of a reorganization into a mutual insurance holding company structure. In 2001, Principal Mutual Holding Company converted to a stock company through a process called demutualization, resulting in our current organizational structure.
Principal Life Insurance Company Separate Account B
The Separate Account was established under Iowa law on January 12, 1970 and was registered as a unit investment trust with the SEC on July 17, 1970. This registration does not involve SEC supervision of the investments or investment policies of the Separate Account. We do not guarantee the investment results of the Separate Account. There is no assurance that the value of your Contract will equal the total of the payments you make to us.
The Separate Account is not affected by the rate of return of our General Account or by the investment performance of any of our other assets. Any income, gain, or loss (whether or not realized) from the assets of the Separate Account are credited to or charged against the Separate Account without regard to our other income, gains, or losses. Assets of the Separate Account attributed to the reserves and other liabilities under the Contract may not be charged with liabilities arising from any of our other businesses.
Any Contract obligations in excess of the Separate Account value (for example, annuity benefit payments, death benefit payment(s) and guaranteed minimum withdrawal benefit payments) become obligations of the General Account and will be subject to the rights of the Company’s other creditors and its overall claims paying ability.
The Separate Account is divided into divisions. The assets of each division invest in a corresponding underlying mutual fund. New divisions may be added and made available. Divisions may also be eliminated. These changes will be made in a manner that is consistent with applicable laws and regulations.
The Underlying Mutual Funds
The underlying mutual funds are registered under the Investment Company Act of 1940 as open-end investment management companies. The underlying mutual funds provide the investment vehicles for the Separate Account. A full description of the underlying mutual funds, the investment objectives, policies and restrictions, charges and expenses and other operational information are contained in the accompanying prospectuses (which should be read carefully before investing) and the Statement of Additional Information (“SAI”). You may request additional copies of these documents without charge from your registered representative or by calling us at 1-800-852-4450.

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We purchase and sell shares of the underlying mutual fund for the Separate Account at their net asset value. Shares represent interests in the underlying mutual fund available for investment by the Separate Account. Each underlying mutual fund corresponds to one of the divisions. The assets of each division are separate from the others. A division’s performance has no effect on the investment performance of any other division.
The underlying mutual funds are NOT available to the general public directly. The underlying mutual funds are available only as investment options in variable life insurance policies or variable annuity contracts issued by life insurance companies and qualified plans. Some of the underlying mutual funds have been established by investment advisors that manage publicly traded mutual funds having similar names and investment objectives. While some of the underlying mutual funds may be similar to, and may in fact be modeled after publicly traded mutual funds, you should understand that the underlying mutual funds are not otherwise directly related to any publicly traded mutual fund. Consequently, the investment performance of any underlying mutual fund may differ substantially from the investment performance of a publicly traded mutual fund.
The Table of Separate Account Divisions included later in this prospectus contains a brief summary of the investment objectives and a listing of the advisor and, if applicable, sub-advisor for each division.
Deletion or Substitution of Separate Account Divisions
We reserve the right, within the law, to make additions, deletions and substitutions for the divisions. We will make no such substitution or deletion without first notifying you and obtaining approval of the appropriate insurance regulatory authorities and the SEC (to the extent required by 1940 Act).
If the shares of a division are no longer available for investment or if, in the judgment of our management, investment in a division becomes inappropriate for the purposes of our contract, we may eliminate the shares of a division and substitute shares of another division of the Trust or another open-end registered investment company. Substitution may be made with respect to both existing investments and the investment of future premium payments.
If we eliminate divisions, you may change allocation percentages and transfer any value in an affected division to another division(s) without charge. You may exercise this exchange privilege until the later of 60 days after a) the effective date of the additions, deletions and/or substitutions of the change, or b) the date you receive notice of the options available. You may only exercise this right if you have any value in the affected division(s).
We also reserve the right to establish additional divisions, each of which would invest in a separate underlying mutual fund with a specified investment objective.
Voting Rights
We vote shares of the underlying mutual funds owned by the Separate Account according to the instructions of Contract owners.
We will notify you of shareholder meetings of the mutual funds underlying the divisions in which you hold units. We will send you proxy materials and instructions for you to provide voting instructions to us. We will arrange for the handling and tallying of proxies received from you and other owners. If you give no voting instructions, we will vote those shares in the same proportion as shares for which we received instructions. Because there is no required minimum number of votes, a small number of votes can have a disproportionate effect.
We determine the number of fund shares that you may instruct us to vote by allocating one vote for each $100 of accumulated value in the division. Fractional votes are allocated for amounts less than $100. We determine the number of underlying fund shares you may instruct us to vote as of the record date established by the underlying mutual fund for its shareholder meeting. In the event that applicable law changes or we are required by regulators to disregard voting instructions, we may decide to vote the shares of the underlying mutual funds in our own right.
Legal Opinions
Legal matters applicable to the issue and sale of the Contracts, including our right to issue Contracts under Iowa Insurance Law, have been passed upon by Karen Shaff, Executive Vice President, General Counsel and Secretary.
Legal Proceedings
There are no legal proceedings pending for which the following would be adversely affected in a material way: Separate Account B; the Company; any subsidiary of the Company; principal underwriter; or depositor.

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Other Variable Annuity Contracts
The Company currently offers other variable annuity contracts that participate in Separate Account B. In the future, we may designate additional group or individual variable annuity contracts as participating in Separate Account B.
Householding
To avoid sending duplicate copies of materials to owners, only one copy of the prospectus and annual and semi-annual reports for the funds will be mailed to owners having the same name and address on our records. The consolidation of these mailings, called householding, benefits us through reduced mailing expense. If you want to receive multiple copies of these materials, you may call us at 1-800-852-4450. You may also notify us in writing. Individual copies of prospectuses and reports will be sent to you within thirty (30) days after we receive your request to stop householding.
Payments to Financial Intermediaries
The Company pays compensation to broker-dealers, financial institutions, and other parties (“Financial Intermediaries”) for the sale of the Contract according to schedules in the sales agreements and other agreements reached between the Company and the Financial Intermediaries. Such compensation generally consists of commissions on premiums paid on the Contract. The Company and/or its affiliates may also pay other amounts (“Additional Payments”) that include, but are not limited to, marketing allowances, expense reimbursements, and educational payments. These Additional Payments are designed to provide incentives for the sale of the Contracts as well as other products sold by the Company and may influence the Financial Intermediaries or their registered representatives to recommend the purchase of this Contract over competing annuity contracts or other investment products. You may ask your registered representative about these differing and divergent interests, how your registered representative is personally compensated, and how your registered representative’s broker-dealer is compensated for soliciting applications for the Contract.
We and/or our affiliates provide services to and/or funding vehicles for welfare benefit plans, retirement plans and employer sponsored benefits. We and our affiliates may pay a bonus or other consideration or incentive to brokers or dealers:
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if a participant in such a welfare benefit or retirement plan or an employee covered under an employer sponsored benefit purchases an individual product with the assistance of a registered representative of an affiliate of ours;
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if a participant in such a retirement plan establishes a rollover individual retirement account with the assistance of a registered representative of an affiliate of ours;
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if the broker or dealer sold the funding vehicle the welfare benefit or retirement plan or employer sponsored benefit utilizes; or
•
based on the broker's or dealer's relationship to the welfare benefit or retirement plan or employer sponsored benefit.
The broker or dealer may pay to its financial professionals some or all of the amounts we pay to the broker or dealer.
Service Arrangements and Compensation
The Company has entered into agreements with the distributors, advisors, and/or the affiliates of some of the mutual funds underlying the Contract and receives compensation for providing certain services including, but not limited to, distribution and operational support services, to the underlying mutual fund. Fees for these services are paid periodically (typically, quarterly or monthly) based on the average daily net asset value of shares of each fund held by the Separate Account and purchased at the Contract owners’ instructions. Because the Company receives such fees, it may be subject to competing interests in making these funds available as investment options under the Contract. The Company takes into consideration the anticipated payments from underlying mutual funds when it determines the charges assessed under the Contract. Without these payments, charges under the Contract are expected to be higher.

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Mutual Fund Diversification
The United States Treasury Department has adopted regulations under Section 817(h) of the Internal Revenue Code which establishes standards of diversification for the investments underlying the Contracts. Under this Internal Revenue Code Section, Separate Account investments must be adequately diversified in order for the increase in the value of non-qualified contracts to receive tax-deferred treatment. In order to be adequately diversified, the portfolio of each underlying mutual fund must, as of the end of each calendar quarter or within 30 days thereafter, have no more than 55% of its assets invested in any one investment, 70% in any two investments, 80% in any three investments and 90% in any four investments. Failure of an underlying mutual fund to meet the diversification requirements could result in tax liability to non-qualified contract holders.
The investment opportunities of the underlying mutual funds could conceivably be limited by adhering to the above diversification requirements. This would affect all owners, including owners of Contracts for whom diversification is not a requirement for tax-deferred treatment.
State Regulation
The Company is subject to the laws of the State of Iowa governing insurance companies and to regulation by the Iowa Insurance Division. An annual statement in a prescribed form must be filed by March 1 in each year covering our operations for the preceding year and our financial condition on December 31 of the prior year. Our books and assets are subject to examination by the Commissioner of Insurance of the State of Iowa, or the Commissioner’s representatives, at all times. A full examination of our operations is conducted periodically by the National Association of Insurance Commissioners. Iowa law and regulations also prescribe permissible investments, but this does not involve supervision of the investment management or policy of the Company.
In addition, we are subject to the insurance laws and regulations of other states and jurisdictions where we are licensed to operate. Generally, the insurance departments of these states and jurisdictions apply the laws of the state of domicile in determining the field of permissible investments.
Independent Registered Public Accounting Firm
The financial statements of Principal Life Insurance Company Separate Account B and the consolidated financial statements of Principal Life Insurance Company are included in the SAI. Those statements have been audited by Ernst & Young LLP, independent registered public accounting firm, 801 Grand Avenue, Des Moines, Iowa 50309, for the periods indicated in their reports which also appear in the SAI.
Financial Statements
The consolidated financial statements of Principal Life Insurance Company which are included in the SAI should be considered only as they relate to our ability to meet our obligations under the Contract. They do not relate to investment performance of the assets held in the Separate Account.

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10. TABLE OF SEPARATE ACCOUNT DIVISIONS


ALPS/Red Rocks Listed Private Equity Division

Invests in:
ALPS/Red Rocks Listed Private Equity Fund – Class III
Investment Advisor:
ALPS Advisors/Red Rocks Capital LLC
Investment Objective:
seeks to maximize total return, which consists of appreciation on its investments and a variable income stream.


American Century VP Inflation Protection Division

Invests in:
American Century VP Inflation Protection Fund – Class II
Investment Advisor:
American Century Investment Management, Inc.
Investment Objective:
seeks long-term total return using a strategy that seeks to protect against U.S. inflation.


American Century VP Value Division

Invests in:
American Century VP Value Fund – Class II
Investment Advisor:
American Century Investment Management, Inc.
Investment Objective:
seeks long-term capital growth. Income is a secondary objective.


American Funds Insurance Series Asset Allocation Fund Division

Invests in:
American Funds Insurance Series Asset Allocation Fund – Class 4
Investment Advisor:
Capital Research and Management Company
Investment Objective:
seeks to provide you a high total return (including income and capital gains) consistent with preservation of capital over the long term.


American Funds Insurance Series Blue Chip Income & Growth Division

Invests in:
American Funds Insurance Series Blue Chip Income & Growth – Class 4
Investment Advisor:
Capital Research and Management Company
Investment Objective:
seeks to produce income exceeding the average yield on U.S. stocks generally and to provide an opportunity for growth of principal consistent with sound common stock investing.


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American Funds Insurance Series Global Small Capitalization Fund Division

Invests in:
American Funds Insurance Series Global Small Capitalization – Class 4
Investment Advisor:
Capital Research and Management Company
Investment Objective:
seeks long-term growth of capital.


American Funds Insurance Series Managed Risk Asset Allocation Fund Division

Invests in:
American Funds Insurance Series Managed Risk Asset Allocation Fund – Class P2
Investment Advisor:
Capital Research and Management Company through a sub-advisory agreement with Milliman Financial Risk Management LLC
Investment Objective:
seeks high total return (including income and capital gains) consistent with preservation of capital over the long term while seeking to manage volatility and provide downside protection.


American Funds Insurance Series Managed Risk Growth Fund Division

Invests in:
American Funds Insurance Series Managed Risk Growth Fund – Class P2
Investment Advisor:
Capital Research and Management Company through a sub-advisory agreement with Milliman Financial Risk Management LLC
Investment Objective:
seeks growth of capital while seeking to manage volatility and provide downside protection.


American Funds Insurance Series Managed Risk International Fund Division

Invests in:
American Funds Insurance Series Managed Risk International Fund – Class P2
Investment Advisor:
Capital Research and Management Company through a sub-advisory agreement with Milliman Financial Risk Management LLC
Investment Objective:
seeks long-term grown of capital while seeking to manage volatility and provide downside protection.


American Funds Insurance Series New World Fund Division

Invests in:
American Funds Insurance Series New World Fund – Class 4
Investment Advisor:
Capital Research and Management Company
Investment Objective:
seeks long-term capital appreciation.

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BlackRock Global Allocation Division

Invests in:
BlackRock Global Allocation V.I. Fund – Class III
Investment Advisor:
BlackRock Investment Management, LLC
Investment Objective:
seeks high total investment return.


BlackRock iShares Alternative Strategies Division

Invests in:
BlackRock iShares Alternative Strategies V.I. – Class III
Investment Advisor:
BlackRock Advisors, LLC
Investment Objective:
seeks to achieve long term growth of capital and risk adjusted returns.


BlackRock iShares Dynamic Allocation Division

Invests in:
BlackRock iShares Dynamic Allocation V.I. – Class III
Investment Advisor:
BlackRock Advisors, LLC
Investment Objective:
seeks to provide total return.

BlackRock iShares Dynamic Fixed Income Division

Invests in:
BlackRock iShares Dynamic Fixed Income V.I. – Class III
Investment Advisor:
BlackRock Advisors, LLC
Investment Objective:
seeks to provide total return.

BlackRock iShares Equity Appreciation Division

Invests in:
BlackRock iShares Equity Appreciation V.I. – Class III
Investment Advisor:
BlackRock Advisors, LLC
Investment Objective:
seeks to provide growth of capital.


BlackRock Value Opportunities Division

Invests in:
BlackRock Value Opportunities V.I. Fund – Class III
Investment Advisor:
BlackRock Investment Management, LLC
Investment Objective:
seeks long-term growth of capital.


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Calvert EAFE International Index Division

Invests in:
Calvert VP EAFE International Index Fund – Class F
Investment Advisor:
World Asset Management, Inc. through a sub-advisory agreement with Calvert Investment Management, Inc.
Investment Objective:
seeks investment results that correspond to the total return performance of common stocks as represented by the MSCI EAFE (Standard) Index (“MSCI EAFE Index”). The MSCI EAFE Index emphasizes the stocks of companies in major markets in Europe, Australasia, and the Far East. This objective may be changed by the Portfolio’s Board of Directors without shareholder approval.


Calvert Russell 2000 SmallCap Index Division

Invests in:
Calvert VP Russell 2000 SmallCap Index Fund – Class F
Investment Advisor:
Ameritas Investment Partners, Inc. through a sub-advisory agreement with Calvert Investment Management, Inc.
Investment Objective:
seeks investment results that correspond to the investment performance of U.S. common stocks, as represented by the Russell 2000 Index. This objective may be changed by the Portfolio’s Board of Directors without shareholder approval.


Calvert S&P MidCap 400 Index Division

Invests in:
Calvert VP S&P MidCap 400 Index Fund – Class F
Investment Advisor:
Ameritas Investment Partners, Inc. through a sub-advisory agreement with Calvert Investment Management, Inc.
Investment Objective:
seeks investment results that correspond to the total return performance of U.S. common stocks, as represented by the S&P MidCap 400 Index. This objective may be changed by the Portfolio’s Board of Directors without shareholder approval.

ClearBridge Small Cap Growth Division

Invests in:
ClearBridge Variable Small Cap Growth Portfolio – Class II
Investment Advisor:
ClearBridge Investments, LLC through a sub-advisory agreement with Legg Mason Partners Fund Advisor, LLC
Investment Objective:
seeks long-term growth of capital.


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Columbia Limited Duration Credit Division

Invests in:
Columbia VP Limited Duration Credit Fund – Class 2
Investment Advisor:
Columbia Management Investment Advisors, LLC
Investment Objective:
seeks to provide shareholders with a level of current income consistent with preservation of capital.


Columbia Small Cap Value Division

Invests in:
Columbia VP Small Cap Value Fund – Class 2
Investment Advisor:
Columbia Management Investment Advisors, LLC
Investment Objective:
seeks to provide shareholders with long-term capital appreciation.

Delaware Limited Term Diversified Income Division

Invests in:
Delaware VIP Limited Term Diversified Income Series – Service Class
Investment Advisor:
Delaware Management Company
Investment Objective:
seeks maximum return consistent with reasonable risk.


Deutsche Alternative Asset Allocation Division (This underlying mutual fund is a fund of funds)
Invests in:
Deutsche Alternative Asset Allocation VIP – Class B
Investment Advisor:
RREEF America LLC through a sub-advisory agreement with Deutsche Investment Management Americas Inc.
Investment Objective:
seeks capital appreciation.


Deutsche Equity 500 Index Division
Invests in:
Deutsche Equity 500 Index VIP – Class B2
Investment Advisor:
Deutsche Investment Management Americas Inc. and Northern Trust Investment, Inc.
Investment Objective:
seeks to replicate, as closely as possible, before the deduction of expenses, the performance of the Standard & Poor’s 500 Composite Stock Price Index (the “S&P 500® Index”), which emphasizes stocks of large US companies.


58



Deutsche Small MidCap Value Division

Invests in:
Deutsche Small MidCap Value VIP – Class B
Investment Advisor:
Dreman Value Management, L.L.C. through a sub-advisory agreement with Deutsche Investment Management Americas Inc.
Investment Objective:
seeks long-term capital appreciation.


Dreyfus IP MidCap Stock Division

Invests in:
Dreyfus IP MidCap Stock Portfolio – Service Share
Investment Advisor:
The Dreyfus Corporation through a sub-advisory agreement with Mellon Capital Management Corporation
Investment Objective:
seeks investment results that are greater than the total return performance of publicly traded common stocks of medium-size domestic companies in the aggregate, as represented by the Standard & Poor's MidCap 400® Index (S&P 400 Index).


Fidelity VIP Contrafund® Division

Invests in:
Fidelity VIP Contrafund® Portfolio – Service Class 2
Investment Advisor:
Fidelity Management & Research Company
Investment Objective:
seeks long-term capital appreciation.


Fidelity VIP Government Money Market Division

Invests in:
Fidelity VIP Government Money Market Portfolio – Service Class 2
Investment Advisor:
Fidelity Management & Research Company
Investment Objective:
seeks as high a level of current income as is consistent with preservation of capital and liquidity.


Fidelity VIP Mid Cap Division

Invests in:
Fidelity VIP Mid Cap Portfolio – Service Class 2
Investment Advisor:
Fidelity Management & Research Company
Investment Objective:
seeks long-term growth of capital.


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Fidelity VIP Overseas Division

Invests in:
Fidelity VIP Overseas Portfolio – Service Class 2
Investment Advisor:
Fidelity Management & Research Company
Investment Objective:
seeks long-term growth of capital.


Franklin Global Real Estate VIP Division

Invests in:
Franklin Templeton VIP Trust – Franklin Global Real Estate VIP Fund – Class 2
Investment Advisor:
Franklin Templeton Institutional LLC
Investment Objective:
seeks high total return.


Franklin Rising Dividends VIP Division

Invests in:
Franklin Templeton VIP Trust – Franklin Rising Dividends VIP Fund – Class 4
Investment Advisor:
Franklin Advisory Services LLC
Investment Objective:
seeks long-term capital appreciation. Preservation of capital,
while not a goal, is also an important consideration.


Goldman Sachs VIT Mid Cap Value Division

Invests in:
Goldman Sachs VIT – Goldman Sachs Mid Cap Value Fund –
Service Shares
Investment Advisor:
Goldman Sachs Asset Management, L.P.
Investment Objective:
seeks long-term capital appreciation.


Goldman Sachs VIT Multi-Strategy Alternatives Division (This underlying mutual fund is a fund of funds)

Invests in:
Goldman Sachs VIT – Goldman Sachs Multi-Strategy Alternatives Fund –
Service Shares
Investment Advisor:
Goldman Sachs Asset Management, L.P.
Investment Objective:
seeks long-term growth of capital.


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Goldman Sachs VIT Small Cap Equity Insights Division

Invests in:
Goldman Sachs VIT – Goldman Sachs Small Cap Equity Insights Fund – Service Shares
Investment Advisor:
Goldman Sachs Asset Management, L.P.
Investment Objective:
seeks long-term growth of capital.


Guggenheim Floating Rate Strategies Division

Invests in:
Guggenheim Investments VIF – Series F (Guggenheim Floating Rate Strategies Series)
Investment Advisor:
Guggenheim Partners Investment Management LLC d/b/a Guggenheim Investments
Investment Objective:
seeks to provide a high level of current income while maximizing total return.


Guggenheim Investments Global Managed Futures Strategy Division

Invests in:
Guggenheim Investments VIF Global Managed Futures Strategy Fund
Investment Advisor:
Security Investors, LLC, which operates under the name of Guggenheim Investments
Investment Objective:
seeks to generate positive returns over time.


Guggenheim Investments Long Short Equity Division

Invests in:
Guggenheim Investments VIF Long Short Equity Fund
Investment Advisor:
Security Investors, LLC, which operates under the name of Guggenheim Investments
Investment Objective:
seeks long-term capital appreciation.


Guggenheim Investments Multi-Hedge Strategies Division

Invests in:
Guggenheim Investments VIF Multi-Hedge Strategies Fund
Investment Advisor:
Security Investors, LLC, which operates under the name of Guggenheim Investments
Investment Objective:
seeks long-term capital appreciation with less risk than traditional equity funds.


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Invesco Balanced-Risk Allocation Division

Invests in:
Invesco V.I. Balanced-Risk Allocation Fund – Series II Shares
Investment Advisor:
Invesco Advisors, Inc.
Investment Objective:
seeks total return with a low to moderate correlation to traditional financial market indices.


Invesco Global Health Care Division

Invests in:
Invesco V.I. Global Health Care Fund – Series II Shares
Investment Advisor:
Invesco Advisors, Inc.
Investment Objective:
seeks long-term capital growth.


Invesco International Growth Division

Invests in:
Invesco V.I. International Growth Fund – Series II Shares
Investment Advisor:
Invesco Advisors, Inc.
Investment Objective:
seeks long-term growth of capital.


Janus Aspen Flexible Bond Division

Invests in:
Janus Aspen Series Flexible Bond Portfolio – Service Shares
Investment Advisor:
Janus Capital Management LLC
Investment Objective:
seeks to obtain maximum total return, consistent with preservation of capital.


MFS International Value Division

Invests in:
MFS® International Value Portfolio – Service Class
Investment Advisor:
Massachusetts Financial Services Company
Investment Objective:
seeks capital appreciation.


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MFS New Discovery Division

Invests in:
MFS® New Discovery Portfolio – Service Class
Investment Advisor:
Massachusetts Financial Services Company
Investment Objective:
seeks capital appreciation.


MFS Utilities Division

Invests in:
MFS® Utilities Series – Service Class
Investment Advisor:
Massachusetts Financial Services Company
Investment Objective:
seeks total return.

Neuberger Berman AMT Mid-Cap Growth Division

Invests in:
Neuberger Berman AMT Mid-Cap Growth Portfolio – Class S
Investment Advisor:
Neuberger Berman LLC through a sub-advisory agreement with Neuberger Berman Management, LLC
Investment Objective:
seeks growth of capital.


PIMCO All Asset Division (This underlying mutual fund is a fund of funds)

Invests in:
PIMCO VIT All Asset Portfolio – Advisor Class
Investment Advisor:
Research Affiliates, LLC through a sub-advisory agreement with Pacific Investment Management Company LLC
Investment Objective:
seeks maximum real return, consistent with preservation of real capital and prudent investment management.


PIMCO CommodityRealReturn® Strategy Division

Invests in:
PIMCO VIT CommodityRealReturn® Strategy Portfolio – Class M
Investment Advisor:
Pacific Investment Management Company LLC
Investment Objective:
seeks maximum real return, consistent with prudent investment management.


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PIMCO High Yield Division

Invests in:
PIMCO VIT High Yield Portfolio – Administrative Class
Investment Advisor:
Pacific Investment Management Company LLC
Investment Objective:
seeks maximum total return, consistent with preservation of capital and prudent investment management.

PIMCO Low Duration Division

Invests in:
PIMCO VIT Low Duration Portfolio – Advisor Class
Investment Advisor:
Pacific Investment Management Company LLC
Investment Objective:
seeks maximum total real return, consistent with preservation of capital and prudent investment management.


PIMCO Total Return Division

Invests in:
PIMCO VIT Total Return Portfolio – Administrative Class
Investment Advisor:
Pacific Investment Management Company, LLC
Investment Objective:
seeks maximum total return, consistent with preservation of capital and prudent investment management.


Core Plus Bond Division

Invests in:
Principal Variable Contracts Funds Core Plus Bond Account – Class 2
Investment Advisor:
Principal Global Investors, LLC through a sub-advisory agreement with Principal Management Corporation
Investment Objective:
seeks to provide current income and, as a secondary objective, capital appreciation.


Diversified Balanced Managed Volatility Division (This underlying mutual fund is a fund of funds.)

Invests in:
Principal Variable Contracts Funds Diversified Balanced Managed Volatility Account – Class 2
Investment Advisor:
Principal Management Corporation
Investment Objective:
seeks to provide as high a level of total return (consisting of reinvested income and capital appreciation) as is consistent with reasonable risk, with an emphasis on managing volatility.


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Diversified Growth Managed Volatility Division (This underlying mutual fund is a fund of funds.)

Invests in:
Principal Variable Contracts Funds Diversified Growth Managed Volatility Account – Class 2
Investment Advisor:
Principal Management Corporation
Investment Objective:
seeks to provide long-term capital appreciation, with an emphasis on managing volatility.

Diversified International Division

Invests in:
Principal Variable Contracts Funds Diversified International Account – Class 2
Investment Advisor:
Principal Global Investors, LLC through a sub-advisory agreement with Principal Management Corporation
Investment Objective:
seeks long-term growth of capital.


Equity Income Division

Invests in:
Principal Variable Contracts Funds Equity Income Account – Class 2
Investment Advisor:
Edge Asset Management, Inc. through a sub-advisory agreement with Principal Management Corporation
Investment Objective:
seeks to seek to provide a relatively high level of current income and long-term growth of income and capital.


Government & High Quality Bond Division

Invests in:
Principal Variable Contracts Funds Government & High Quality Bond Account – Class 2
Investment Advisor:
Principal Global Investors, LLC through a sub-advisory agreement with Principal Management Corporation
Investment Objective:
seeks a high level of current income consistent with safety and liquidity.

Income Division

Invests in:
Principal Variable Contracts Funds Income Account – Class 2
Investment Advisor:
Edge Asset Management
Investment Objective:
seeks to provide a high level of current income consistent with preservation of capital.


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International Emerging Markets Division

Invests in:
Principal Variable Contracts Funds International Emerging Markets Account – Class 2
Investment Advisor:
Principal Global Investors, LLC through a sub-advisory agreement with Principal Management Corporation
Investment Objective:
seeks long-term growth of capital.


LargeCap Growth Division

Invests in:
Principal Variable Contracts Funds LargeCap Growth Account – Class 2
Investment Advisor:
Columbus Circle Investors through a sub-advisory agreement with Principal Management Corporation
Investment Objective:
seeks long-term growth of capital.


LargeCap Growth I Division

Invests in:
Principal Variable Contracts Funds LargeCap Growth Account I – Class 2
Investment Advisor:
T. Rowe Price Associates through a sub-advisory agreement and Brown Investment Advisory Incorporated through a sub-advisory agreement with Principal Management Corporation
Investment Objective:
seeks long-term growth of capital.


LargeCap S&P 500 Index Division

Invests in:
Principal Variable Contracts Funds LargeCap S&P 500 Index Account – Class 2
Investment Advisor:
Principal Global Investors, LLC through a sub-advisory agreement with Principal Management Corporation
Investment Objective:
seeks long-term growth of capital.


LargeCap Value Division

Invests in:
Principal Variable Contracts Funds LargeCap Value Account – Class 2
Investment Advisor:
Principal Global Investors, LLC through a sub-advisory agreement with Principal Management Corporation
Investment Objective:
seeks long-term growth of capital.


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Multi-Asset Income Division (This underlying mutual fund is a fund of funds.)

Invests in:
Principal Variable Contracts Funds Multi-Asset Income Account – Class 2
Investment Advisor:
Principal Global Investors, LLC through a sub-advisory agreement with Principal Management Corporation
Investment Objective:
seeks current income.


Principal Capital Appreciation Division

Invests in:
Principal Variable Contracts Funds Principal Capital Appreciation Account – Class 2
Investment Advisor:
Edge Asset Management, LLC through a sub-advisory agreement with Principal Management Corporation
Investment Objective:
seeks to provide long-term growth capital.


Principal LifeTime 2020 Division (This underlying mutual fund is a fund of funds.)

Invests in:
Principal Variable Contracts Funds Principal LifeTime 2020 Account – Class 2
Investment Advisor:
Principal Global Investors, LLC through a sub-advisory agreement with Principal Management Corporation
Investment Objective:
seeks a total return consisting of long-term growth of capital and current income.


Principal LifeTime 2030 Division (This underlying mutual fund is a fund of funds.)

Invests in:
Principal Variable Contracts Funds Principal LifeTime 2030 Account – Class 2
Investment Advisor:
Principal Global Investors, LLC through a sub-advisory agreement with Principal Management Corporation
Investment Objective:
seeks a total return consisting of long-term growth of capital and current income.


Principal LifeTime 2040 Division (This underlying mutual fund is a fund of funds.)

Invests in:
Principal Variable Contracts Funds Principal LifeTime 2040 Account – Class 2
Investment Advisor:
Principal Global Investors, LLC through a sub-advisory agreement with Principal Management Corporation
Investment Objective:
seeks a total return consisting of long-term growth of capital and current income.

67



Principal LifeTime 2050 Division (This underlying mutual fund is a fund of funds.)

Invests in:
Principal Variable Contracts Funds Principal LifeTime 2050 Account – Class 2
Investment Advisor:
Principal Global Investors, LLC through a sub-advisory agreement with Principal Management Corporation
Investment Objective:
seeks a total return consisting of long-term growth of capital and current income.


Real Estate Securities Division

Invests in:
Principal Variable Contracts Funds Real Estate Securities Account – Class 2
Investment Advisor:
Principal Real Estate Investors, LLC through a sub-advisory agreement with Principal Management Corporation
Investment Objective:
seeks to generate a total return.


Short-Term Income Division

Invests in:
Principal Variable Contracts Funds Short-Term Income Account – Class 2
Investment Advisor:
Edge Asset Management, Inc. through a sub-advisory agreement with Principal Management Corporation
Investment Objective:
seeks to provide as high a level of current income as is consistent with prudent investment management and stability of principal.

SmallCap Division

Invests in:
Principal Variable Contracts Funds SmallCap Account – Class 2
Investment Advisor:
Principal Global Investors, LLC through a sub-advisory agreement with Principal Management Corporation
Investment Objective:
seeks long-term growth of capital.


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SAM Balanced Division (This underlying mutual fund is a fund of funds.)

Invests in:
Principal Variable Contracts Funds Strategic Asset Management Balanced Portfolio – Class 2
Investment Advisor:
Edge Asset Management, Inc. through a sub-advisory agreement with Principal Management Corporation
Investment Objective:
seeks to provide a high level of total return (consisting of reinvested income and capital appreciation), as is consistent with reasonable risk. In general, relative to the other Portfolios, the Balanced Portfolio should offer investors the potential for a medium level of income and medium level of capital growth, while exposing them to a medium level of principal risk.


SAM Conservative Balanced Division (This underlying mutual fund is a fund of funds.)

Invests in:
Principal Variable Contracts Funds Strategic Asset Management Portfolios – Conservative Balanced Portfolio – Class 2
Investment Advisor:
Edge Asset Management, Inc. through a sub-advisory agreement with Principal Management Corporation
Investment Objective:
seeks to provide a high level of total return (consisting of reinvestment of income and capital appreciation), consistent with a moderate degree of principal risk. In general, relative to the other Portfolios, the Conservative Balanced Portfolio should offer investors the potential for a medium to high level of income and a medium to low level of capital growth, while exposing them to a medium to low level of principal risk.


SAM Conservative Growth Division (This underlying mutual fund is a fund of funds.)

Invests in:
Principal Variable Contracts Funds Strategic Asset Management Portfolios – Conservative Growth Portfolio – Class 2
Investment Advisor:
Edge Asset Management, Inc. through a sub-advisory agreement with Principal Management Corporation
Investment Objective:
seeks to provide long-term capital appreciation. In general, relative to the other Portfolios, the Conservative Growth Portfolio should offer investors the potential for a low to medium level of income and a medium to high level of capital growth, while exposing them to a medium to high level of principal risk.


69



SAM Flexible Income Division (This underlying mutual fund is a fund of funds.)

Invests in:
Principal Variable Contracts Funds Strategic Asset Management Portfolios – Flexible Income Portfolio – Class 2
Investment Advisor:
Edge Asset Management, Inc. through a sub-advisory agreement with Principal Management Corporation
Investment Objective:
seeks to provide a high level of total return (consisting of reinvestment of income with some capital appreciation). In general, relative to the other Portfolios, the Flexible Income Portfolio should offer investors the potential for a high level of income and a low level of capital growth, while exposing them to a low level of principal risk.


SAM Strategic Growth Division (This underlying mutual fund is a fund of funds.)

Invests in:
Principal Variable Contracts Funds Strategic Asset Management Portfolios –Strategic Growth Portfolio – Class 2
Investment Advisor:
Edge Asset Management, Inc. through a sub-advisory agreement with Principal Management Corporation
Investment Objective:
seeks to provide long-term capital appreciation. In general, relative to the other Portfolios, the Strategic Growth Portfolio should offer investors the potential for a high level of capital growth, and a corresponding level of principal risk..

Rydex Basic Materials Division

Invests in:
Rydex VI Basic Materials Fund
Investment Advisor:
Security Investors, LLC, which operates under the name of Guggenheim Investments
Investment Objective:
seeks to provide capital appreciation by investing in companies engaged in the mining, manufacture, or sale of basic materials such as lumber, steel, iron, aluminum, concrete, chemicals and other basic building and manufacturing materials.


Rydex Commodities Strategy Division

Invests in:
Rydex VI Commodities Strategy Fund
Investment Advisor:
Security Investors, LLC, which operates under the name of Guggenheim Investments
Investment Objective:
seeks to provide investment results that correlate, before fees and expenses, to the performance of a benchmark for commodities.


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Rydex NASDAQ 100 Division

Invests in:
Rydex VI NASDAQ 100 Fund
Investment Advisor:
Security Investors, LLC, which operates under the name of Guggenheim Investments
Investment Objective:
seeks to provide investment results that correspond, before fees and expenses, to a benchmark for over-the-counter securities on a daily basis.


Templeton Global Bond VIP Division

Invests in:
Franklin Templeton VIP Trust – Templeton Global Bond VIP Fund – Class 4
Investment Advisor:
Franklin Advisors, Inc.
Investment Objective:
seeks high current income, consistent with preservation of capital. Capital appreciation is a secondary consideration.


The Merger Fund Division

Invests in:
The Merger Fund VL
Investment Advisor:
Westchester Capital Management, LLC
Investment Objective:
seeks to provide attractive risk-adjusted returns in virtually all market environments while preserving investor capital and minimizing volatility based risk.


VanEck VIP Global Hard Assets Division
Invests in:
VanEck VIP Global Hard Assets Fund – Class S Shares
Investment Advisor:
Van Eck Associates Corporation
Investment Objective:
seeks long-term capital appreciation by investing primarily in "hard asset" securities. Income is a secondary consideration.


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11. REGISTRATION STATEMENT
This prospectus (Part A of the registration statement) omits some information contained in the Statement of Additional Information (Part B of the registration statement) and Part C of the registration statement which the Company has filed with the SEC. The SAI is hereby incorporated by reference into this prospectus. You may request a free copy of the SAI by contacting your registered representative or calling us at 1-800-852-4450.
Information about the Contract (including the Statement of Additional Information and Part C of the registration statement) can be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. Information on the operation of the public reference room may be obtained by calling the Commission at 202-551-8090. Reports and other information about the Contract are available on the Commission’s internet site at http://www.sec.gov. Copies of this information may be obtained, upon payment of a duplicating fee, by writing the Public Reference Section of the Commission, 100 F Street NE, Washington, D.C. 20549-0102.
The registration numbers for the Contract are 333-197214 and 811-02091.
12. TABLE OF CONTENTS OF THE SAI
General Information and History
3
Independent Registered Public Accounting Firm
3
Principal Underwriter
3
Calculation of Performance Data
3
Taxation Under Certain Retirement Plans
10
Deferred Income Disclosure
13
Principal Life Insurance Company Separate Account B
 
Report of Independent Registered Public Accounting Firm
15
Financial Statements
16
Principal Life Insurance Company
 
Report of Independent Registered Public Accounting Firm
239
Consolidated Financial Statements
240
To obtain a copy of the Statement of Additional Information, free of charge, write or telephone:

Principal Securities, Inc.
a company of
the Principal Financial Group
Des Moines, IA 50392-2080
Telephone: 1-800-852-4450

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APPENDIX A - CONDENSED FINANCIAL INFORMATION
Financial statements are included in the Statement of Additional Information.
The following table contains the unit values for the Contract for the periods ended December 31.
For Contracts Without the Liquidity Max ("No Surrender Charge Rider")
Accumulation Unit Value
Division
Beginning
of Period
End of
Period
Percentage Change
from Prior
Period
Number of
Accumulation
Units
Outstanding
End of Period
(in thousands)
ALPS/Red Rock Listed Private Equity
 
 
 
 
2015(1)
$10.000
$8.982
-10.18%
-
American Century VP Inflation Protection
 
 
 
 
2015
9.940
9.584
-3.58
2
2014(2)
10.000
9.940
-0.60
-
American Century VP Value
 
 
 
 
2015
10.145
9.626
-5.12
12
2014(2)
10.000
10.145
1.45
2
American Funds Asset Allocation
 
 
 
 
2015(1)
10.000
9.707
-2.93
27
American Funds Blue Chip Income & Growth
 
 
 
 
2015
10.227
9.785
-4.32
41
2014(2)
10.000
10.227
2.27
7
American Funds Global Small Capitalization
 
 
 
 
2015
9.861
9.746
-1.17
6
2014(2)
10.000
9.861
-1.39
1
American Funds Managed Risk Asset Allocation
 
 
 
 
2015
9.908
9.690
-2.20
2
2014(2)
10.000
9.908
-0.92
-
American Funds Managed Risk Growth
 
 
 
 
2015
9.784
9.740
-0.45
8
2014(2)
10.000
9.784
-2.16
3
American Funds Managed Risk International
 
 
 
 
2015
9.434
8.717
-7.60
3
2014(2)
10.000
9.434
-5.66
2
American Funds New World
 
 
 
 
2015
9.003
8.600
-4.48
27
2014(2)
10.000
9.003
-9.97
6
BlackRock Global Allocation VI
 
 
 
 
2015(1)
10.000
9.303
-6.97
-
BlackRock iShares Alternative Strategies VI
 
 
 
 
2015(1)
10.000
9.294
-7.06
-
BlackRock iShares Dynamic Allocation VI
 
 
 
 
2015(1)
10.000
9.148
-8.52
-
BlackRock iShares Dynamic Fixed Income VI
 
 
 
 
2015(1)
10.000
9.704
-2.96
-
BlackRock iShares Equity Appreciation VI
 
 
 
 
2015(1)
10.000
8.668
-13.32
-
BlackRock Value Opportunities VI
 
 
 
 
2015(1)
10.000
9.002
-9.98
-
Calvert EAFE International Index
 
 
 
 
2015
9.254
8.979
-2.97
-
2014(2)
10.000
9.254
-7.46
-

Appendix A – Condensed Financial Information    73


For Contracts Without the Liquidity Max ("No Surrender Charge Rider")
Accumulation Unit Value
Division
Beginning
of Period
End of
Period
Percentage Change
from Prior
Period
Number of
Accumulation
Units
Outstanding
End of Period
(in thousands)
Calvert Russell 2000 Small Cap
 
 
 
 
2015
$10.481
$9.801
-6.49%
8
2014(2)
10.000
10.481
4.81
1
Calvert S&P MidCap 400
 
 
 
 
2015
10.227
9.817
-4.01
28
2014(2)
10.000
10.227
2.27
2
ClearBridge Small Cap Growth
 
 
 
 
2015(1)
10.000
9.480
-5.20
-
Columbia Limited Duration Credit
 
 
 
 
2015(1)
10.000
9.576
-4.24
-
Columbia Small Cap Value
 
 
 
 
2015(1)
10.000
9.102
-8.98
-
Delaware VIP Limited Term Diversified Income
 
 
 
 
2015(1)
10.000
9.878
-1.22
-
Deutsche Alternative Asset Allocation VIP
 
 
 
 
2015
9.826
9.078
-7.61
-
2014(2)
10.000
9.826
-1.74
-
Deutsche Equity 500 Index VIP
 
 
 
 
2015
10.249
10.209
-0.39
29
2014(2)
10.000
10.249
2.49
2
Deutsche Small Mid Cap Value VIP
 
 
 
 
2015
10.087
9.751
-3.33
2
2014(2)
10.000
10.087
0.87
-
Dreyfus IP MidCap Stock
 
 
 
 
2015(1)
10.000
9.274
-7.26
2
Fidelity VIP Contrafund®
 
 
 
 
2015
10.166
10.091
-0.74
62
2014(2)
10.000
10.166
1.66
10
Fidelity VIP MidCap
 
 
 
 
2015
10.058
9.781
-2.75
59
2014(2)
10.000
10.058
0.58
14
Fidelity VIP Overseas
 
 
 
 
2015
9.433
9.633
2.12
6
2014(2)
10.000
9.433
-5.67
-
Franklin Global Real Estate VIP
 
 
 
 
2015
10.557
10.496
-0.58
20
2014(2)
10.000
10.557
5.57
2
Franklin Rising Dividends VIP
 
 
 
 
2015
10.343
9.841
-4.85
17
2014(2)
10.000
10.343
3.43
1
Franklin Templeton Global Bond VIP
 
 
 
 
2015
9.750
9.215
-5.49
36
2014(2)
10.000
9.750
-2.50
2
Goldman Sachs VIT MidCap Value
 
 
 
 
2015
10.248
9.166
-10.56
14
2014(2)
10.000
10.248
2.48
1
Goldman Sachs VIT Multi-Strategy Alternatives
 
 
 
 
2015(1)
10.000
9.341
-6.59
-

Appendix A – Condensed Financial Information    74


For Contracts Without the Liquidity Max ("No Surrender Charge Rider")
Accumulation Unit Value
Division
Beginning
of Period
End of
Period
Percentage Change
from Prior
Period
Number of
Accumulation
Units
Outstanding
End of Period
(in thousands)
Goldman Sachs VIT SmallCap Equity Insights
 
 
 
 
2015
$10.620
$10.237
-3.61%
5
2014(2)
10.000
10.620
6.20
-
Guggenheim Global Managed Futures Strategy
 
 
 
 
2015
10.751
10.463
-2.68
8
2014(2)
10.000
10.751
7.51
2
Guggenheim Long Short Equity
 
 
 
 
2015
10.446
10.456
0.10
4
2014(2)
10.000
10.446
4.46
4
Guggenheim Multi-Hedge Strategies
 
 
 
 
2015
10.261
10.331
0.68
1
2014(2)
10.000
10.261
2.61
-
Guggenheim Series F (Floating Rate Strategies)
 
 
 
 
2015
9.937
9.895
-0.42
3
2014(2)
10.000
9.937
-0.63
-
Guggenheim Series M (Macro Opportunities)
 
 
 
 
2015
10.058
9.913
-1.44
5
2014(2)
10.000
10.058
0.58
-
Invesco V.I. Balanced-Risk Allocation
 
 
 
 
2015
10.082
9.528
-5.49
2
2014(2)
10.000
10.082
0.82
-
Invesco V.I. Global Health Care
 
 
 
 
2015
10.339
10.516
1.71
30
2014(2)
10.000
10.339
3.39
6
Invesco V.I. International Growth
 
 
 
 
2015
9.610
9.252
-3.73
24
2014(2)
10.000
9.610
-3.90
3
Janus Aspen Flexible Bond
 
 
 
 
2015
10.051
9.930
-1.20
28
2014(2)
10.000
10.051
0.51
2
MFS International Value
 
 
 
 
2015
9.835
10.337
5.10
30
2014(2)
10.000
9.835
-1.65
6
MFS New Discovery
 
 
 
 
2015(1)
10.000
9.147
-8.53
-
MFS Utilities
 
 
 
 
2015
9.804
8.261
-15.74
28
2014(2)
10.000
9.804
-1.96
11
Neuberger Berman AMT Mid Cap Growth
 
 
 
 
2015(1)
10.000
9.191
-8.09
2
PIMCO VIT All Asset
 
 
 
 
2015(1)
10.000
8.766
-12.34
-
PIMCO VIT Commodity Real Return Strategy
 
 
 
 
2015(1)
10.000
7.236
-27.64
-
PIMCO VIT High Yield Portfolio
 
 
 
 
2015
9.883
9.610
-2.76
34
2014(2)
10.000
9.883
-1.17
-
 
 
 
 
 

Appendix A – Condensed Financial Information    75


For Contracts Without the Liquidity Max ("No Surrender Charge Rider")
Accumulation Unit Value
Division
Beginning
of Period
End of
Period
Percentage Change
from Prior
Period
Number of
Accumulation
Units
Outstanding
End of Period
(in thousands)
PIMCO VIT Low Duration
 
 
 
 
2015(1)
$10.000
$9.890
-1.10%
1
PIMCO VIT Total Return
 
 
 
 
2015
10.110
10.036
-0.73
26
2014(2)
10.000
10.110
1.10
-
Rydex Basic Materials
 
 
 
 
2015(1)
10.000
7.715
-22.85
-
Rydex Commodities Strategy
 
 
 
 
2015
7.080
4.633
-34.56
2
2014(2)
10.000
7.080
-29.20
1
Rydex NASDAQ 100
 
 
 
 
2015
10.284
11.004
7.00
25
2014(2)
10.000
10.284
2.84
9
The Merger Fund VL
 
 
 
 
2015(1)
10.000
9.651
-3.49
-
Van Eck VIP Global Hard Assets
 
 
 
 
2015
7.613
4.995
-34.39
41
2014(2)
10.000
7.613
-23.87
13
Core Plus Bond (f.k.a. Bond & Mortgage Securities)
 
 
 
2015(1)
10.000
9.735
-2.65
-
Diversified Balanced Managed Volatility
 
 
 
 
2015
10.164
10.049
-1.13
17
2014(2)
10.000
10.164
1.64
1
Diversified Growth Managed Volatility
 
 
 
 
2015
10.143
10.033
-1.08
30
2014(2)
10.000
10.143
1.43
3
Diversified International
 
 
 
 
2015
9.379
9.211
-1.79
14
2014(2)
10.000
9.379
-6.21
3
Equity Income
 
 
 
 
2015
10.230
9.693
-5.25
45
2014(2)
10.000
10.230
2.30
6
Government & High Quality Bond
 
 
 
 
2015
10.123
10.074
-0.48
80
2014(2)
10.000
10.123
1.23
1
Income
 
 
 
 
2015(1)
10.000
9.701
-2.99
-
International Emerging Markets
 
 
 
 
2015(1)
10.000
7.795
-22.05
-
LargeCap Growth
 
 
 
 
2015
10.116
10.473
3.53
22
2014(2)
10.000
10.116
1.16
-
LargeCap Growth I
 
 
 
 
2015(1)
10.000
9.995
-0.05
38
LargeCap S&P 500 Index
 
 
 
 
2015(1)
10.000
9.657
-3.43
3
LargeCap Value
 
 
 
 
2015(1)
10.000
9.580
-4.20
-

Appendix A – Condensed Financial Information    76


For Contracts Without the Liquidity Max ("No Surrender Charge Rider")
Accumulation Unit Value
Division
Beginning
of Period
End of
Period
Percentage Change
from Prior
Period
Number of
Accumulation
Units
Outstanding
End of Period
(in thousands)
Money Market
 
 
 
 
2015
$9.968
$9.854
-1.14%
40
2014(2)
10.000
9.968
-0.32
22
Principal Capital Appreciation
 
 
 
 
2015
10.318
10.397
0.77
29
2014(2)
10.000
10.318
3.18
19
Principal LifeTime 2020
 
 
 
 
2015(1)
10.000
9.397
-6.03
-
Principal LifeTime 2030
 
 
 
 
2015(1)
10.000
9.345
-6.55
-
Principal LifeTime 2040
 
 
 
 
2015(1)
10.000
9.321
-6.79
-
Principal LifeTime 2050
 
 
 
 
2015(1)
10.000
9.307
-6.93
3
Real Estate Securities
 
 
 
 
2015
11.388
11.709
2.82
75
2014(2)
10.000
11.388
13.88
15
SAM Balanced
 
 
 
 
2015
10.041
9.819
-2.21
209
2014(2)
10.000
10.041
0.41
55
SAM Conservative Balanced
 
 
 
 
2015
10.040
9.833
-2.06
160
2014(2)
10.000
10.040
0.40
24
SAM Conservative Growth
 
 
 
 
2015
10.053
9.804
-2.48
463
2014(2)
10.000
10.053
0.53
42
SAM Flexible Income
 
 
 
 
2015
10.029
9.761
-2.67
135
2014(2)
10.000
10.029
0.29
2
SAM Strategic Growth
 
 
 
 
2015
10.089
9.787
-2.99
135
2014(2)
10.000
10.089
0.89
60
Short-Term Income
 
 
 
 
2015
10.006
9.950
-0.56
33
2014(2)
10.000
10.006
0.06
1
SmallCap (f.k.a. SmallCap Blend)
 
 
 
 
2015(1)
10.000
9.136
-8.64
66
(1)
Commenced Operations on May 16, 2015
(2) 
Commenced Operations on September 19, 2014






Appendix A – Condensed Financial Information    77


For Contracts With the Liquidity Max ("No Surrender Charge Rider")
Accumulation Unit Value
Division
Beginning
of Period
End of
Period
Percentage Change
from Prior
Period
Number of
Accumulation
Units
Outstanding
End of Period
(in thousands)
ALPS/Red Rock Listed Private Equity
 
 
 
 
2015(1)
$10.000
$8.968
-10.32%
3
American Century VP Inflation Protection
 
 
 
 
2015
9.933
9.553
-3.83
4
2014(2)
10.000
9.933
-0.67
2
American Century VP Value
 
 
 
 
2015
10.138
9.595
-5.36
23
2014(2)
10.000
10.138
1.38
1
American Funds Asset Allocation
 
 
 
 
2015(1)
10.000
9.692
-3.08
56
American Funds Blue Chip Income & Growth
 
 
 
 
2015
10.220
9.754
-4.56
51
2014(2)
10.000
10.220
2.20
3
American Funds Global Small Capitalization
 
 
 
 
2015
9.854
9.715
-1.41
8
2014(2)
10.000
9.854
-1.46
-
American Funds Managed Risk Asset Allocation
 
 
 
 
2015
9.901
9.659
-2.44
5
2014(2)
10.000
9.901
-0.99
-
American Funds Managed Risk Growth
 
 
 
 
2015
9.777
9.709
-0.70
8
2014(2)
10.000
9.777
-2.23
-
American Funds Managed Risk International
 
 
 
 
2015
9.427
8.690
-7.82
1
2014(2)
10.000
9.427
-5.73
-
American Funds New World
 
 
 
 
2015
8.997
8.573
-4.71
18
2014(2)
10.000
8.997
-10.03
-
BlackRock Global Allocation VI
 
 
 
 
2015(1)
10.000
9.289
-7.11
6
BlackRock iShares Alternative Strategies VI
 
 
 
 
2015(1)
10.000
9.280
-7.20
1
BlackRock iShares Dynamic Allocation VI
 
 
 
 
2015(1)
10.000
9.134
-8.66
-
BlackRock iShares Dynamic Fixed Income VI
 
 
 
 
2015(1)
10.000
9.689
-3.11
-
BlackRock iShares Equity Appreciation VI
 
 
 
 
2015(1)
10.000
8.655
-13.45
1
BlackRock Value Opportunities VI
 
 
 
 
2015(1)
10.000
8.988
-10.12
-
Calvert EAFE International Index
 
 
 
 
2015
9.247
8.950
-3.21
1
2014(2)
10.000
9.247
-7.53
1
Calvert Russell 2000 Small Cap
 
 
 
 
2015
10.473
9.770
-6.71
3
2014(2)
10.000
10.473
4.73
1
 
 
 
 
 
 
 
 
 
 

Appendix A – Condensed Financial Information    78


For Contracts With the Liquidity Max ("No Surrender Charge Rider")
Accumulation Unit Value
Division
Beginning
of Period
End of
Period
Percentage Change
from Prior
Period
Number of
Accumulation
Units
Outstanding
End of Period
(in thousands)
Calvert S&P MidCap 400
 
 
 
 
2015
$10.220
$9.785
-4.26%
21
2014(2)
10.000
10.220
2.20
1
ClearBridge Small Cap Growth
 
 
 
 
2015(1)
10.000
9.466
-5.34
1
Columbia Limited Duration Credit
 
 
 
 
2015(1)
10.000
9.561
-4.39
1
Columbia Small Cap Value
 
 
 
 
2015(1)
10.000
9.088
-9.12
8
Delaware VIP Limited Term Diversified Income
 
 
 
 
2015(1)
10.000
9.862
-1.38
1
Deutsche Alternative Asset Allocation VIP
 
 
 
 
2015
9.819
9.049
-7.84
4
2014(2)
10.000
9.819
-1.81
-
Deutsche Equity 500 Index VIP
 
 
 
 
2015
10.242
10.176
-0.64
38
2014(2)
10.000
10.242
2.42
4
Deutsche Small Mid Cap Value VIP
 
 
 
 
2015
10.080
9.720
-3.57
9
2014(2)
10.000
10.080
0.80
-
Dreyfus IP MidCap Stock
 
 
 
 
2015(1)
10.000
9.260
-7.40
3
Fidelity VIP Contrafund®
 
 
 
 
2015
10.159
10.059
-0.98
64
2014(2)
10.000
10.159
1.59
3
Fidelity VIP MidCap
 
 
 
 
2015
10.050
9.749
-3.00
36
2014(2)
10.000
10.050
0.50
1
Fidelity VIP Overseas
 
 
 
 
2015
9.427
9.602
1.86
6
2014(2)
10.000
9.427
-5.73
-
Franklin Global Real Estate VIP
 
 
 
 
2015
10.549
10.462
-0.82
18
2014(2)
10.000
10.549
5.49
2
Franklin Rising Dividends VIP
 
 
 
 
2015
10.336
9.810
-5.09
31
2014(2)
10.000
10.336
3.36
6
Franklin Templeton Global Bond VIP
 
 
 
 
2015
9.743
9.186
-5.72
51
2014(2)
10.000
9.743
-2.57
5
Goldman Sachs VIT MidCap Value
 
 
 
 
2015
10.241
9.137
-10.78
37
2014(2)
10.000
10.241
2.41
1
Goldman Sachs VIT Multi-Strategy Alternatives
 
 
 
 
2015(1)
10.000
9.327
-6.73
1
Goldman Sachs VIT SmallCap Equity Insights
 
 
 
 
2015
10.613
10.204
-3.85
6
2014(2)
10.000
10.613
6.13
-

Appendix A – Condensed Financial Information    79


For Contracts With the Liquidity Max ("No Surrender Charge Rider")
Accumulation Unit Value
Division
Beginning
of Period
End of
Period
Percentage Change
from Prior
Period
Number of
Accumulation
Units
Outstanding
End of Period
(in thousands)
Guggenheim Global Managed Futures Strategy
 
 
 
 
2015
$10.743
$10.430
-2.91%
2
2014(2)
10.000
10.743
7.43
-
Guggenheim Long Short Equity
 
 
 
 
2015
10.438
10.423
-0.14
5
2014(2)
10.000
10.438
4.38
1
Guggenheim Multi-Hedge Strategies
 
 
 
 
2015
10.253
10.298
0.44
5
2014(2)
10.000
10.253
2.53
-
Guggenheim Series F (Floating Rate Strategies)
 
 
 
 
2015
9.930
9.864
-0.66
6
2014(2)
10.000
9.930
-0.70
1
Guggenheim Series M (Macro Opportunities)
 
 
 
 
2015
10.051
9.882
-1.68
5
2014(2)
10.000
10.051
0.51
-
Invesco V.I. Balanced-Risk Allocation
 
 
 
 
2015
10.075
9.498
-5.73
18
2014(2)
10.000
10.075
0.75
-
Invesco V.I. Global Health Care
 
 
 
 
2015
10.332
10.483
1.46
48
2014(2)
10.000
10.332
3.32
-
Invesco V.I. International Growth
 
 
 
 
2015
9.603
9.222
-3.97
22
2014(2)
10.000
9.603
-3.97
1
Janus Aspen Flexible Bond
 
 
 
 
2015
10.044
9.898
-1.45
52
2014(2)
10.000
10.044
0.44
5
MFS International Value
 
 
 
 
2015
9.828
10.304
4.84
24
2014(2)
10.000
9.828
-1.72
-
MFS New Discovery
 
 
 
 
2015(1)
10.000
9.132
-8.68
2
MFS Utilities
 
 
 
 
2015
9.797
8.235
-15.94
61
2014(2)
10.000
9.797
-2.03
4
Neuberger Berman AMT Mid Cap Growth
 
 
 
 
2015(1)
10.000
9.176
-8.24
3
PIMCO VIT All Asset
 
 
 
 
2015(1)
10.000
8.752
-12.48
-
PIMCO VIT Commodity Real Return Strategy
 
 
 
 
2015(1)
10.000
7.225
-27.75
1
PIMCO VIT High Yield Portfolio
 
 
 
 
2015
9.876
9.579
-3.01
45
2014(2)
10.000
9.876
-1.24
2
PIMCO VIT Low Duration
 
 
 
 
2015(1)
10.000
9.875
-1.25
1
 
 
 
 
 
 
 
 
 
 

Appendix A – Condensed Financial Information    80


For Contracts With the Liquidity Max ("No Surrender Charge Rider")
Accumulation Unit Value
Division
Beginning
of Period
End of
Period
Percentage Change
from Prior
Period
Number of
Accumulation
Units
Outstanding
End of Period
(in thousands)
PIMCO VIT Total Return
 
 
 
 
2015
$10.103
$10.004
-0.98%
27
2014(2)
10.000
10.103
1.03
4
Rydex Basic Materials
 
 
 
 
2015(1)
10.000
7.702
-22.98
-
Rydex Commodities Strategy
 
 
 
 
2015
7.075
4.618
-34.73
1
2014(2)
10.000
7.075
-29.25
1
Rydex NASDAQ 100
 
 
 
 
2015
10.277
10.969
6.73
34
2014(2)
10.000
10.277
2.77
-
The Merger Fund VL
 
 
 
 
2015(1)
10.000
9.636
-3.64
-
Van Eck VIP Global Hard Assets
 
 
 
 
2015
7.608
4.979
-34.56
5
2014(2)
10.000
7.608
-23.92
2
Core Plus Bond (f.k.a. Bond & Mortgage Securities)
 
 
 
2015(1)
10.000
9.719
-2.81
2
Diversified Balanced Managed Volatility
 
 
 
 
2015
10.157
10.017
-1.38
24
2014(2)
10.000
10.157
1.57
-
Diversified Growth Managed Volatility
 
 
 
 
2015
10.136
10.001
-1.33
3
2014(2)
10.000
10.136
1.36
-
Diversified International
 
 
 
 
2015
9.373
9.182
-2.04
9
2014(2)
10.000
9.373
-6.27
-
Equity Income
 
 
 
 
2015
10.223
9.662
-5.49
59
2014(2)
10.000
10.223
2.23
2
Government & High Quality Bond
 
 
 
 
2015
10.115
10.042
-0.72
19
2014(2)
10.000
10.115
1.15
1
Income
 
 
 
 
2015(1)
10.000
9.685
-3.15
2
International Emerging Markets
 
 
 
 
2015(1)
10.000
7.783
-22.17
4
LargeCap Growth
 
 
 
 
2015
10.109
10.440
3.27
20
2014(2)
10.000
10.109
1.09
1
LargeCap Growth I
 
 
 
 
2015(1)
10.000
9.979
-0.21
11
LargeCap S&P 500 Index
 
 
 
 
2015(1)
10.000
9.642
-3.58
12
LargeCap Value
 
 
 
 
2015(1)
10.000
9.565
-4.35
1
 
 
 
 
 
 
 
 
 
 

Appendix A – Condensed Financial Information    81


For Contracts With the Liquidity Max ("No Surrender Charge Rider")
Accumulation Unit Value
Division
Beginning
of Period
End of
Period
Percentage Change
from Prior
Period
Number of
Accumulation
Units
Outstanding
End of Period
(in thousands)
Money Market
 
 
 
 
2015
$9.961
$9.822
-1.40%
100
2014(2)
10.000
9.961
-0.39
-
Principal Capital Appreciation
 
 
 
 
2015
10.310
10.364
0.52
32
2014(2)
10.000
10.310
3.10
-
Principal LifeTime 2020
 
 
 
 
2015(1)
10.000
9.383
-6.17
2
Principal LifeTime 2030
 
 
 
 
2015(1)
10.000
9.330
-6.70
2
Principal LifeTime 2040
 
 
 
 
2015(1)
10.000
9.307
-6.93
-
Principal LifeTime 2050
 
 
 
 
2015(1)
10.000
9.292
-7.08
-
Real Estate Securities
 
 
 
 
2015
11.380
11.671
2.56
73
2014(2)
10.000
11.380
13.80
1
SAM Balanced
 
 
 
 
2015
10.034
9.787
-2.46
175
2014(2)
10.000
10.034
0.34
9
SAM Conservative Balanced
 
 
 
 
2015
10.033
9.801
-2.31
145
2014(2)
10.000
10.033
0.33
31
SAM Conservative Growth
 
 
 
 
2015
10.046
9.773
-2.72
101
2014(2)
10.000
10.046
0.46
1
SAM Flexible Income
 
 
 
 
2015
10.022
9.730
-2.91
319
2014(2)
10.000
10.022
0.22
40
SAM Strategic Growth
 
 
 
 
2015
10.082
9.755
-3.24
34
2014(2)
10.000
10.082
0.82
2
Short-Term Income
 
 
 
 
2015
9.999
9.918
-0.81
45
2014(2)
10.000
9.999
-0.01
8
SmallCap (f.k.a. SmallCap Blend)
 
 
 
 
2015(1)
10.000
9.120
-8.80
20
(1)
Commenced Operations on May 16, 2015
(2) 
Commenced Operations on September 19, 2014




Appendix A – Condensed Financial Information    82
 

PART B

PRINCIPAL LIFE INSURANCE COMPANY
(the “Depositor”)

PRINCIPAL LIFE INSURANCE COMPANY SEPARATE ACCOUNT B
(the “Registrant”)

Principal Pivot Series Variable AnnuitySM 

Statement of Additional Information

dated December 28, 2016

This Statement of Additional Information provides information about the Principal Pivot Series Variable AnnuitySM (the “Contract”) in addition to the information that is contained in the Contract’s Prospectus dated December 28, 2016.

This Statement of Additional Information is not a prospectus. It should be read in conjunction with the Prospectus, a copy of which can be obtained free of charge by writing or calling:

Principal Pivot Series Variable AnnuitySM 
The Principal Financial Group
P.O. Box 9382
Des Moines, Iowa 50306-9382
Telephone: 1-800-852-4450


TABLE OF CONTENTS

 
Page
GENERAL INFORMATION AND HISTORY
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PRINCIPAL UNDERWRITER
CALCULATION OF PERFORMANCE DATA
TAXATION UNDER CERTAIN RETIREMENT PLANS
DEFERRED INCOME DISCLOSURE
Principal Life Insurance Company Separate Account B
 
   Report of Independent Registered Public Accounting Firm
15
   Financial Statements
16
Principal Life Insurance Company
 
   Report of Independent Registered Public Accounting Firm
239
   Financial Statements
240


2


GENERAL INFORMATION AND HISTORY
Principal Life Insurance Company (the “Company”) is the issuer of the Principal Pivot Series Variable AnnuitySM (the “Contract”) and serves as custodian of its assets. The Company is a stock life insurance company with authority to transact life and annuity business in all states of the United States and the District of Columbia. The Company’s home office is located at: Principal Financial Group, Des Moines, Iowa 50392. The Company is a wholly owned subsidiary of Principal Financial Services, Inc., which in turn, is a wholly owned direct subsidiary of Principal Financial Group, Inc., a publicly-traded company.
On June 24, 1879, the Company was incorporated under Iowa law as a mutual assessment life insurance company named Bankers Life Association. The Company became a legal reserve life insurance company and changed its name to Bankers Life Company in 1911. In 1986, the Company changed its name to Principal Mutual Life Insurance Company. In 1998, the Company became Principal Life Insurance Company, a subsidiary stock life insurance company of Principal Mutual Holding Company, as part of a reorganization into a mutual insurance holding company structure. In 2001, Principal Mutual Holding Company converted to a stock company through a process called demutualization, resulting in the current organizational structure.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Ernst & Young LLP, 801 Grand Avenue, Suite 3000, Des Moines, Iowa 50309, serves as the independent registered public accounting firm for Principal Life Insurance Company Separate Account B and the Principal Life Insurance Company.
PRINCIPAL UNDERWRITER
The principal underwriter of the Contract is Principal Securities, Inc. ("PSI") formerly Princor Financial Services Corporation which is a wholly owned subsidiary of Principal Financial Services, Inc. and an affiliate of the Company. The address of PSI is the Principal Financial Group, 650 8th Street, Des Moines, Iowa 50392-0200. PSI was incorporated in Iowa in 1968 and is a securities broker-dealer registered with the Securities Exchange Commission as well as a member of the FINRA. The Contracts may also be sold through other broker-dealers authorized by PSI and applicable law to do so. Registered representatives of such broker-dealers may be paid on a different basis than described below.
The Contract’s offering to the public is non-continuous. As the principal underwriter, PSI is paid for the distribution of the Contract. For the last fiscal year PSI has received and retained the following commissions:
2015
received/retained
2014
received/retained
$864,757/$0
$86,698/$0
CALCULATION OF PERFORMANCE DATA
The Separate Account may publish advertisements containing information (including graphs, charts, tables and examples) about the performance of one or more of its divisions. Separate performance figures will be shown for the Contract without the Liquidity Max ("No Surrender Charge Rider") and for the Contract with the Liquidity Max ("No Surrender Charge Rider").
The Contract was not offered prior to October 9, 2014. However, the certain divisions invest in underlying mutual funds which were offered prior to the date the Contract was available. Thus, the Separate Account may publish advertisements containing information about the hypothetical performance of one or more of its divisions for this Contract as the Contract was issued on or after the date the underlying mutual fund was first offered. The hypothetical performance from the date of inception of the underlying mutual fund in which the division invests is derived by reducing the actual performance of the underlying mutual fund by the highest level of fees and charges of the Contract as if it had been in existence.
In addition, as certain of the underlying mutual funds have added classes since the inception of the fund, performance may be shown for periods prior to the inception date of the new class which represents the historical results of initial class shares adjusted to reflect the fees and expenses of the new class.

3


The yield and total return figures described below will vary depending upon market conditions, the composition of the underlying mutual fund’s portfolios and operating expenses. These factors and possible differences in the methods used in calculating yield and total return should be considered when comparing the Separate Account performance figures to performance figures published for other investment vehicles.
The Separate Account may also quote rankings, yields or returns as published by independent statistical services or publishers and information regarding performance of certain market indices. Any performance data quoted for the Separate Account represents only historical performance and is not intended to indicate future performance.
From time to time the Separate Account advertises its Money Market Division’s* “yield” and “effective yield” for the Contract. Both yield figures are based on historical earnings and are not intended to indicate future performance. The “yield” of the division refers to the income generated by an investment under the Contract in the division over a 7-day period (which period will be stated in the advertisement). This income is then “annualized.” That is, the amount of income generated by the investment during that week is assumed to be generated each week over a 52-week period and is shown as a percentage of the investment. The “effective yield” is calculated similarly but, when annualized, the income earned by an investment in the division is assumed to be reinvested. The “effective yield” will be slightly higher than the “yield” because of the compounding effect of this assumed reinvestment. Neither yield quotation reflects a sales load deducted from purchase payments which, if included, would reduce the “yield” and “effective yield.”
 
Yield For the Period Ended December 31, 2015
For Contracts:
7-Day Annualized Yield
7-Day Effective Yield
without a surrender charge
-1.19%
-1.18%
with a surrender charge
-7.19%
-7.18%
with Liquidity Max ("No Surrender Charge Rider") but without a surrender charge
-1.44%
-1.43%
*  Effective April 8, 2016, the Money Market Division was replaced by the Fidelity VIP Government Money Market Division.
Also, from time to time, the Separate Account will advertise the average annual total return of its various divisions. The average annual total return for any of the divisions is computed by calculating the average annual compounded rate of return over the stated period that would equate an initial $1,000 investment to the ending redeemable Contract value. In this calculation for the Contract without the Liquidity Max ("No Surrender Charge Rider"), the ending value is reduced by a surrender charge that decreases from 6% to 0% over a period of 7 years. For the calculations relating to the Contract with the Liquidity Max ("No Surrender Charge Rider"), the ending value is reduced by a surrender charge that decreases from 8% to 0% over a period of 9 years. The Separate Account may also advertise total return figures for its divisions for a specified period that does not take into account the surrender charge in order to illustrate the change in the division’s unit value over time. See “Charges and Deductions” in the Prospectus for a discussion of surrender charges.
Following are the hypothetical average annual total returns for the period ending December 31, 2015 assuming the Contract had been offered as of the effective dates of the underlying mutual funds in which the divisions invest (the performance calculations with Surrender Charge are in accordance with the SEC standard, while the performance calculations without the Surrender Charge are not in accordance with the SEC standard):
 
For Contracts without Surrender Charge
Division
Effective
Date
One Year
Five Years
Ten Years
Since Inception
ALPS/Red Rock Listed Private Equity
10/24/2014
-2.48%
 
 
1.55%
American Century VP Inflation Protection
12/31/2002
-3.62%
0.81%
2.19%
 
American Century VP Value
05/01/1996
-5.16%
9.16%
4.93%
 
American Funds Asset Allocation
08/01/1989
-0.05%
7.75%
4.94%
 
American Funds Blue Chip Income and Growth
07/05/2001
-4.35%
9.45%
4.76%
 
American Funds Global Small Capitalization
04/30/1998
-1.20%
3.13%
4.12%
 
American Funds Managed Risk Asset Allocation
09/28/2012
-2.24%
 
 
5.61%
American Funds Managed Risk Growth
05/01/2013
-0.48%
 
 
5.08%
American Funds Managed Risk International
05/01/2013
-7.63%
 
 
-2.65%
American New World
06/17/1999
-4.52%
-1.30%
4.50%
 

4


 
For Contracts without Surrender Charge
Division
Effective
Date
One Year
Five Years
Ten Years
Since Inception
BlackRock Global Allocation VI
02/28/1992
-2.14%
2.86%
4.61%
 
BlackRock iShares Alternative Strategies VI
04/30/2014
-2.43%
 
 
-0.05%
BlackRock iShares Dynamic Allocation VI
04/30/2014
-5.12%
 
 
-2.94%
BlackRock iShares Dynamic Fixed Income VI
04/30/2014
-2.66%
 
 
-1.45%
BlackRock iShares Equity Appreciation VI
04/30/2014
-7.86%
 
 
-5.13%
BlackRock Value Opportunities VI
04/20/1982
-7.86%
7.64%
4.00%
 
Calvert VP EAFE International Index
11/12/2002
-3.01%
1.15%
0.61%
 
Calvert VP Russell 2000 Small Cap Index
04/27/2000
-6.52%
6.85%
4.59%
 
Calvert VP S&P MidCap 400 Index
05/03/1999
-4.05%
8.53%
6.04%
 
ClearBridge Small Cap Growth
02/02/2007
-5.72%
10.43%
 
6.34%
Columbia Limited Duration Credit
05/07/2010
-3.64%
0.16%
 
0.44%
Columbia Small Cap Value
06/01/2000
-7.43%
4.92%
4.67%
 
Core Plus Bond (formerly Bond & Mortgage Securities)
12/18/1987
-1.92%
2.13%
2.25%
 
Delaware VIP Limited Term Diversified Income
05/01/2000
-0.61%
-0.08%
1.74%
 
Deutsche Alternative Asset Allocation
01/30/2009
-7.65%
-0.63%
 
4.32%
Deutsche Equity 500 Index
10/01/1997
-0.43%
10.44%
5.31%
 
Deutsche Small Mid Cap Value
05/01/1996
-3.37%
6.71%
5.76%
 
Diversified Balanced Managed Volatility
10/31/2013
-1.17%
 
 
2.75%
Diversified Growth Managed Volatility
10/31/2013
-1.12%
 
 
3.26%
Diversified International
05/02/1994
-1.83%
2.22%
1.78%
 
Dreyfus IP MidCap Stock
12/29/2000
-3.67%
10.56%
5.65%
 
Equity Income
04/28/1998
-5.29%
8.85%
4.97%
 
Fidelity VIP Contrafund
01/03/1995
-0.77%
9.31%
5.69%
 
Fidelity VIP Mid Cap
12/28/1998
-2.79%
6.37%
6.06%
 
Fidelity VIP Overseas
01/28/1987
2.08%
2.91%
1.78%
 
Franklin Global Real Estate
01/24/1989
-0.62%
6.01%
-0.08%
 
Franklin Rising Dividends
01/27/1992
-4.89%
8.58%
5.29%
 
Goldman Sachs VIT Mid Cap Value
01/09/2006
-10.60%
7.14%
 
4.81%
Goldman Sachs VIT Multi-Strategy Alternatives
04/25/2014
-5.88%
 
 
-4.49%
Goldman Sachs VIT Small Cap Equity Insights
08/31/2007
-3.65%
8.42%
 
4.73%
Government & High Quality Bond
05/06/1993
-0.52%
1.46%
2.75%
 
Guggenheim Floating Rate Strategies
04/22/2013
-0.46%
 
 
0.87%
Guggenheim Global Managed Futures Strategy
11/07/2008
-2.71%
-2.89%
 
-3.92%
Guggenheim Long Short Equity Fund
05/01/2002
0.06%
2.33%
1.92%
 
Guggenheim Macro Opportunities
04/22/2013
-1.48%
 
 
1.00%
Guggenheim Multi-Hedge Strategies
11/29/2005
0.65%
1.50%
-0.67%
 
Guggenheim Rydex Basic Materials
05/02/2001
-18.28%
-6.49%
1.72%
 
Guggenheim Rydex Commodities Strategy
09/30/2005
-34.60%
-18.23%
-13.83%
 
Guggenheim Rydex NASDAQ-100
05/07/1997
6.97%
13.96%
8.94%
 
Income
05/07/1993
-2.09%
2.63%
3.84%
 
International Emerging Markets
10/24/2000
-15.03%
-6.20%
1.84%
 
Invesco VI Balanced-Risk Allocation
01/23/2009
-5.53%
3.37%
 
7.14%
Invesco VI Global Health Care
04/30/2004
1.67%
15.19%
7.83%
 
Invesco VI International Growth
09/19/2001
-3.77%
3.14%
3.79%
 
Janus Aspen Flexible Bond
09/13/1993
-1.24%
2.45%
4.25%
 
LargeCap Growth
05/02/1994
3.49%
10.20%
5.73%
 
LargeCap Growth I
06/01/1994
6.27%
11.44%
7.15%
 
LargeCap S&P 500 Index
05/03/1999
-0.27%
10.58%
5.44%
 
LargeCap Value
05/13/1970
-2.50%
9.92%
4.37%
 
MFS VIT International Value
08/23/2001
5.07%
8.02%
5.92%
 
MFS VIT New Discovery
05/01/1998
-3.30%
5.42%
6.59%
 
MFS VIT Utilities
01/03/1995
-15.77%
5.52%
6.79%
 
Money Market*
03/18/1983
-1.18%
-1.22%
-0.10%
 

5


 
For Contracts without Surrender Charge
Division
Effective
Date
One Year
Five Years
Ten Years
Since Inception
Neuberger Berman AMT Mid Cap Growth
11/03/1997
-0.20%
8.69%
6.66%
 
PIMCO VIT All Asset
04/30/2004
-10.26%
0.11%
2.13%
 
PIMCO VIT Commodity Real Return Strategy
11/10/2014
-26.89%
 
 
-32.84%
PIMCO VIT High Yield
04/30/1998
-2.81%
3.63%
4.54%
 
PIMCO VIT Low Duration
03/31/2006
-1.02%
0.23%
 
2.39%
PIMCO VIT Total Return
12/31/1997
-0.77%
1.87%
4.19%
 
Principal Capital Appreciation
04/28/1998
0.73%
10.06%
6.19%
 
Principal LifeTime 2020
08/30/2004
-2.60%
5.04%
3.30%
 
Principal LifeTime 2030
08/30/2004
-2.39%
5.58%
3.37%
 
Principal LifeTime 2040
08/30/2004
-2.24%
6.25%
3.64%
 
Principal LifeTime 2050
08/30/2004
-2.09%
6.41%
3.68%
 
Real Estate Securities
05/01/1998
2.78%
11.34%
6.87%
 
SAM Balanced
06/03/1997
-2.25%
5.69%
4.34%
 
SAM Conservative Balanced
04/23/1998
-2.10%
4.44%
3.99%
 
SAM Conservative Growth
06/03/1997
-2.51%
6.68%
4.30%
 
SAM Flexible Income
09/09/1997
-2.71%
3.69%
3.73%
 
SAM Strategic Growth
06/03/1997
-3.03%
7.48%
4.35%
 
Short-Term Income
01/12/1994
-0.60%
0.45%
1.70%
 
SmallCap (formerly SmallCap Blend)
05/01/1998
-1.52%
10.23%
5.20%
 
Templeton Global Bond VIP
01/24/1989
-5.52%
1.13%
6.08%
 
The Merger Fund VL
05/31/2004
-2.08%
0.30%
3.34%
 
Van Eck VIP Global Hard Assets
05/01/2006
-34.42%
-13.78%
 
-3.47%
*  Effective April 8, 2016, the Money Market Division was replaced by the Fidelity VIP Government Money Market Division.
 
For Contracts with Surrender Charge
Division
Effective
Date
One Year
Five Years
Ten Years
Since Inception
ALPS/Red Rock Listed Private Equity
10/24/2014
-8.48%
 
 
-3.51%
American Century VP Inflation Protection
12/31/2002
-9.62%
0.22%
2.19%
 
American Century VP Value
05/01/1996
-11.16%
8.73%
4.93%
 
American Funds Asset Allocation
08/01/1989
-0.05%
7.75%
4.94%
 
American Funds Blue Chip Income and Growth
07/05/2001
-10.35%
9.03%
4.76%
 
American Funds Global Small Capitalization
04/30/1998
-7.20%
2.60%
4.12%
 
American Funds Managed Risk Asset Allocation
09/28/2012
-8.24%
 
 
4.51%
American Funds Managed Risk Growth
05/01/2013
-6.48%
 
 
3.33%
American Funds Managed Risk International
05/01/2013
-13.63%
 
 
-4.64%
American New World
06/17/1999
-10.52%
-1.94%
4.50%
 
BlackRock Global Allocation VI
02/28/1992
-8.14%
2.32%
4.61%
 
BlackRock iShares Alternative Strategies VI
04/30/2014
-8.43%
 
 
-3.69%
BlackRock iShares Dynamic Allocation VI
04/30/2014
-11.12%
 
 
-6.65%
BlackRock iShares Dynamic Fixed Income VI
04/30/2014
-8.66%
 
 
-5.12%
BlackRock iShares Equity Appreciation VI
04/30/2014
-13.86%
 
 
-8.90%
BlackRock Value Opportunities VI
04/20/1982
-13.86%
7.19%
4.00%
 
Calvert VP EAFE International Index
11/12/2002
-9.01%
0.57%
0.61%
 
Calvert VP Russell 2000 Small Cap Index
04/27/2000
-12.52%
6.39%
4.59%
 
Calvert VP S&P MidCap 400 Index
05/03/1999
-10.05%
8.10%
6.04%
 
ClearBridge Small Cap Growth
02/02/2007
-11.72%
10.03%
 
6.34%
Columbia Limited Duration Credit
05/07/2010
-9.64%
-0.44%
 
0.09%
Columbia Small Cap Value
06/01/2000
-13.43%
4.42%
4.67%
 
Core Plus Bond (formerly Bond & Mortgage Securities)
12/18/1987
-7.92%
1.57%
2.25%
 
Delaware VIP Limited Term Diversified Income
05/01/2000
-6.61%
-0.69%
1.74%
 
Deutsche Alternative Asset Allocation
01/30/2009
-13.65%
-1.25%
 
4.32%
Deutsche Equity 500 Index
10/01/1997
-6.43%
10.03%
5.31%
 
Deutsche Small Mid Cap Value
05/01/1996
-9.37%
6.24%
5.76%
 
Diversified Balanced Managed Volatility
10/31/2013
-7.17%
 
 
0.49%

6


 
For Contracts with Surrender Charge
Division
Effective
Date
One Year
Five Years
Ten Years
Since Inception
Diversified Growth Managed Volatility
10/31/2013
-7.12%
 
 
1.01%
Diversified International
05/02/1994
-7.83%
1.67%
1.78%
 
Dreyfus IP MidCap Stock
12/29/2000
-9.67%
10.16%
5.65%
 
Equity Income
04/28/1998
-11.29%
8.42%
4.97%
 
Fidelity VIP Contrafund
01/03/1995
-6.77%
8.88%
5.69%
 
Fidelity VIP Mid Cap
12/28/1998
-8.79%
5.90%
6.06%
 
Fidelity VIP Overseas
01/28/1987
-3.92%
2.37%
1.78%
 
Franklin Global Real Estate
01/24/1989
-6.62%
5.53%
-0.08%
 
Franklin Rising Dividends
01/27/1992
-10.89%
8.15%
5.29%
 
Goldman Sachs VIT Mid Cap Value
01/09/2006
-16.60%
6.68%
 
4.81%
Goldman Sachs VIT Multi-Strategy Alternatives
04/25/2014
-11.88%
 
 
-8.22%
Goldman Sachs VIT Small Cap Equity Insights
08/31/2007
-9.65%
7.98%
 
4.73%
Government & High Quality Bond
05/06/1993
-6.52%
0.89%
2.75%
 
Guggenheim Floating Rate Strategies
04/22/2013
-6.46%
 
 
-0.99%
Guggenheim Global Managed Futures Strategy
11/07/2008
-8.71%
-3.58%
 
-3.92%
Guggenheim Long Short Equity Fund
05/01/2002
-5.94%
1.78%
1.92%
 
Guggenheim Macro Opportunities
04/22/2013
-7.48%
 
 
-0.86%
Guggenheim Multi-Hedge Strategies
11/29/2005
-5.35%
0.93%
-0.67%
 
Guggenheim Rydex Basic Materials
05/02/2001
-24.28%
-7.29%
1.72%
 
Guggenheim Rydex Commodities Strategy
09/30/2005
-40.60%
-19.62%
-13.83%
 
Guggenheim Rydex NASDAQ-100
05/07/1997
0.97%
13.60%
8.94%
 
Income
05/07/1993
-8.09%
2.08%
3.84%
 
International Emerging Markets
10/24/2000
-21.03%
-6.99%
1.84%
 
Invesco VI Balanced-Risk Allocation
01/23/2009
-11.53%
2.84%
 
7.14%
Invesco VI Global Health Care
04/30/2004
-4.33%
14.84%
7.83%
 
Invesco VI International Growth
09/19/2001
-9.77%
2.60%
3.79%
 
Janus Aspen Flexible Bond
09/13/1993
-7.24%
1.90%
4.25%
 
LargeCap Growth
05/02/1994
-2.51%
9.79%
5.73%
 
LargeCap Growth I
06/01/1994
0.27%
11.05%
7.15%
 
LargeCap S&P 500 Index
05/03/1999
-6.27%
10.17%
5.44%
 
LargeCap Value
05/13/1970
-8.50%
9.50%
4.37%
 
MFS VIT International Value
08/23/2001
-0.93%
7.58%
5.92%
 
MFS VIT New Discovery
05/01/1998
-9.30%
4.92%
6.59%
 
MFS VIT Utilities
01/03/1995
-21.77%
5.03%
6.79%
 
Money Market*
03/18/1983
-7.18%
-1.86%
-0.10%
 
Neuberger Berman AMT Mid Cap Growth
11/03/1997
-6.20%
8.25%
6.66%
 
PIMCO VIT All Asset
04/30/2004
-16.26%
-0.49%
2.13%
 
PIMCO VIT Commodity Real Return Strategy
11/10/2014
-32.89%
 
 
-38.43%
PIMCO VIT High Yield
04/30/1998
-8.81%
3.11%
4.54%
 
PIMCO VIT Low Duration
03/31/2006
-7.02%
-0.37%
 
2.39%
PIMCO VIT Total Return
12/31/1997
-6.77%
1.31%
4.19%
 
Principal Capital Appreciation
04/28/1998
-5.27%
9.65%
6.19%
 
Principal LifeTime 2020
08/30/2004
-8.60%
4.54%
3.30%
 
Principal LifeTime 2030
08/30/2004
-8.39%
5.10%
3.37%
 
Principal LifeTime 2040
08/30/2004
-8.24%
5.78%
3.64%
 
Principal LifeTime 2050
08/30/2004
-8.09%
5.94%
3.68%
 
Real Estate Securities
05/01/1998
-3.22%
10.95%
6.87%
 
SAM Balanced
06/03/1997
-8.25%
5.21%
4.34%
 
SAM Conservative Balanced
04/23/1998
-8.10%
3.93%
3.99%
 
SAM Conservative Growth
06/03/1997
-8.51%
6.22%
4.30%
 
SAM Flexible Income
09/09/1997
-8.71%
3.17%
3.73%
 
SAM Strategic Growth
06/03/1997
-9.03%
7.03%
4.35%
 
Short-Term Income
01/12/1994
-6.60%
-0.15%
1.70%
 
SmallCap (formerly SmallCap Blend)
05/01/1998
-7.52%
9.82%
5.20%
 
Templeton Global Bond VIP
01/24/1989
-11.52%
0.55%
6.08%
 
The Merger Fund VL
05/31/2004
-8.08%
-0.30%
3.34%
 
Van Eck VIP Global Hard Assets
05/01/2006
-40.42%
-14.89%
 
-3.47%
*  Effective April 8, 2016, the Money Market Division was replaced by the Fidelity VIP Government Money Market Division.

7


 
For Contracts with Liquidity Max ("No Surrender Charge Rider")
and without Surrender Charge
Division
Effective
Date
One Year
Five Years
Ten Years
Since Inception
ALPS/Red Rock Listed Private Equity
10/24/2014
-2.73%
 
 
1.30%
American Century VP Inflation Protection
12/31/2002
-3.86%
0.56%
1.93%
 
American Century VP Value
05/01/1996
-5.40%
8.88%
4.66%
 
American Funds Asset Allocation
08/01/1989
-0.30%
7.48%
4.68%
 
American Funds Blue Chip Income and Growth
07/05/2001
-4.59%
9.18%
4.50%
 
American Funds Global Small Capitalization
04/30/1998
-1.45%
2.87%
3.86%
 
American Funds Managed Risk Asset Allocation
09/28/2012
-2.48%
 
 
5.35%
American Funds Managed Risk Growth
05/01/2013
-0.73%
 
 
4.82%
American Funds Managed Risk International
05/01/2013
-7.86%
 
 
-2.89%
American New World
06/17/1999
-4.75%
-1.54%
4.24%
 
BlackRock Global Allocation VI
02/28/1992
-2.39%
2.60%
4.35%
 
BlackRock iShares Alternative Strategies VI
04/30/2014
-2.67%
 
 
-0.30%
BlackRock iShares Dynamic Allocation VI
04/30/2014
-5.36%
 
 
-3.19%
BlackRock iShares Dynamic Fixed Income VI
04/30/2014
-2.90%
 
 
-1.69%
BlackRock iShares Equity Appreciation VI
04/30/2014
-8.09%
 
 
-5.36%
BlackRock Value Opportunities VI
04/20/1982
-8.09%
7.38%
3.74%
 
Core Plus Bond (formerly Bond & Mortgage Securities)
12/18/1987
-2.16%
1.87%
1.99%
 
Calvert VP EAFE International Index
11/12/2002
-3.25%
0.90%
0.35%
 
Calvert VP Russell 2000 Small Cap Index
04/27/2000
-6.75%
6.59%
4.33%
 
Calvert VP S&P MidCap 400 Index
05/03/1999
-4.29%
8.26%
5.77%
 
ClearBridge Small Cap Growth
02/02/2007
-5.96%
10.16%
 
6.08%
Columbia Limited Duration Credit
05/07/2010
-3.88%
-0.09%
 
0.19%
Columbia Small Cap Value
06/01/2000
-7.66%
4.66%
4.41%
 
Delaware VIP Limited Term Diversified Income
05/01/2000
-0.86%
-0.33%
1.49%
 
Deutsche Alternative Asset Allocation
01/30/2009
-7.88%
-0.88%
 
4.06%
Deutsche Equity 500 Index
10/01/1997
-0.68%
10.16%
5.05%
 
Deutsche Small Mid Cap Value
05/01/1996
-3.61%
6.44%
5.49%
 
Diversified Balanced Managed Volatility
10/31/2013
-1.41%
 
 
2.49%
Diversified Growth Managed Volatility
10/31/2013
-1.37%
 
 
3.01%
Diversified International
05/02/1994
-2.07%
1.97%
1.52%
 
Dreyfus IP MidCap Stock
12/29/2000
-3.91%
10.28%
5.38%
 
Equity Income
04/28/1998
-5.52%
8.58%
4.71%
 
Fidelity VIP Contrafund
01/03/1995
-1.02%
9.03%
5.43%
 
Fidelity VIP Mid Cap
12/28/1998
-3.03%
6.11%
5.80%
 
Fidelity VIP Overseas
01/28/1987
1.82%
2.65%
1.52%
 
Franklin Global Real Estate
01/24/1989
-0.86%
5.74%
-0.33%
 
Franklin Rising Dividends
01/27/1992
-5.13%
8.31%
5.03%
 
Goldman Sachs VIT Mid Cap Value
01/09/2006
-10.82%
6.87%
 
4.55%
Goldman Sachs VIT Multi-Strategy Alternatives
04/25/2014
-6.12%
 
 
-4.73%
Goldman Sachs VIT Small Cap Equity Insights
08/31/2007
-3.89%
8.15%
 
4.46%
Government & High Quality Bond
05/06/1993
-0.77%
1.21%
2.50%
 
Guggenheim Floating Rate Strategies
04/22/2013
-0.71%
 
 
0.62%
Guggenheim Global Managed Futures Strategy
11/07/2008
-2.95%
-3.14%
 
-4.17%
Guggenheim Long Short Equity Fund
05/01/2002
-0.19%
2.08%
1.67%
 
Guggenheim Macro Opportunities
04/22/2013
-1.73%
 
 
0.75%
Guggenheim Multi-Hedge Strategies
11/29/2005
0.40%
1.25%
-0.92%
 
Guggenheim Rydex Basic Materials
05/02/2001
-18.49%
-6.73%
1.47%
 
Guggenheim Rydex Commodities Strategy
09/30/2005
-34.76%
-18.43%
-14.04%
 
Guggenheim Rydex NASDAQ-100
05/07/1997
6.70%
13.68%
8.67%
 
Income
05/07/1993
-2.34%
2.37%
3.58%
 
International Emerging Markets
10/24/2000
-15.25%
-6.43%
1.58%
 
Invesco VI Balanced-Risk Allocation
01/23/2009
-5.77%
3.12%
 
6.87%
Invesco VI Global Health Care
04/30/2004
1.42%
14.90%
7.56%
 
Invesco VI International Growth
09/19/2001
-4.01%
2.88%
3.53%
 
Janus Aspen Flexible Bond
09/13/1993
-1.49%
2.19%
3.99%
 
LargeCap Growth
05/02/1994
3.24%
9.93%
5.47%
 
LargeCap Growth I
06/01/1994
6.00%
11.16%
6.88%
 

8


 
For Contracts with Liquidity Max ("No Surrender Charge Rider")
and without Surrender Charge
Division
Effective
Date
One Year
Five Years
Ten Years
Since Inception
LargeCap S&P 500 Index
05/03/1999
-0.52%
10.30%
5.17%
 
LargeCap Value
05/13/1970
-2.74%
9.64%
4.11%
 
MFS VIT International Value
08/23/2001
4.80%
7.75%
5.66%
 
MFS VIT New Discovery
05/01/1998
-3.54%
5.15%
6.32%
 
MFS VIT Utilities
01/03/1995
-15.98%
5.25%
6.53%
 
Money Market*
03/18/1983
-1.43%
-1.46%
-0.35%
 
Neuberger Berman AMT Mid Cap Growth
11/03/1997
-0.45%
8.42%
6.39%
 
PIMCO VIT All Asset
04/30/2004
-10.49%
-0.14%
1.87%
 
PIMCO VIT Commodity Real Return Strategy
11/10/2014
-27.07%
 
 
-33.00%
PIMCO VIT High Yield
04/30/1998
-3.05%
3.38%
4.28%
 
PIMCO VIT Low Duration
03/31/2006
-1.27%
-0.02%
 
2.14%
PIMCO VIT Total Return
12/31/1997
-1.02%
1.61%
3.92%
 
Principal Capital Appreciation
04/28/1998
0.48%
9.78%
5.92%
 
Principal LifeTime 2020
08/30/2004
-2.84%
4.77%
3.04%
 
Principal LifeTime 2030
08/30/2004
-2.64%
5.32%
3.11%
 
Principal LifeTime 2040
08/30/2004
-2.49%
5.99%
3.38%
 
Principal LifeTime 2050
08/30/2004
-2.33%
6.14%
3.42%
 
Real Estate Securities
05/01/1998
2.52%
11.06%
6.60%
 
SAM Balanced
06/03/1997
-2.50%
5.43%
4.08%
 
SAM Conservative Balanced
04/23/1998
-2.35%
4.17%
3.73%
 
SAM Conservative Growth
06/03/1997
-2.75%
6.42%
4.04%
 
SAM Flexible Income
09/09/1997
-2.95%
3.43%
3.47%
 
SAM Strategic Growth
06/03/1997
-3.27%
7.21%
4.09%
 
Short-Term Income
01/12/1994
-0.85%
0.20%
1.44%
 
SmallCap (formerly SmallCap Blend)
05/01/1998
-1.77%
9.95%
4.94%
 
Templeton Global Bond VIP
01/24/1989
-5.76%
0.87%
5.81%
 
The Merger Fund VL
05/31/2004
-2.32%
0.05%
3.08%
 
Van Eck VIP Global Hard Assets
05/01/2006
-34.59%
-13.99%
 
-3.71%
*  Effective April 8, 2016, the Money Market Division was replaced by the Fidelity VIP Government Money Market Division.

9


TAXATION UNDER CERTAIN RETIREMENT PLANS
INDIVIDUAL RETIREMENT ANNUITIES
Contributions. Individuals may make contributions for individual retirement annuity (IRA) contracts. Individuals may make deductible contributions (for any year) up to the lesser of the amount shown in the chart or 100% of compensation.
Such individuals may establish a traditional IRA for a non-working spouse (if they file a joint return). The annual contribution for both spouses’ contracts cannot exceed the lesser of the amount shown in the chart or 100% of the working spouse’s compensation. No more than the individual IRA limit may be contributed to either spouse’s IRA for any year.
Traditional IRA- Maximum Annual Contribution
Year
Individual IRA
Individual IRA + Spousal IRA
2015
$5,500
$11,000
2016
$5,500
$11,000
For succeeding years, limits are indexed for cost of living.
Individuals age 50 or over are also permitted to make additional “catch-up” contributions. The additional contribution is $1,000 in 2015 and 2016. These additional catch-up contributions can be applied for Spousal IRA purposes.
Contributions may be tax deductible. If an individual and his/her spouse do not participate in a qualified retirement plan, the contributions to an IRA are fully tax deductible regardless of income. If an individual is an active participant in a qualified retirement plan, his/her ability to deduct the contributions depends upon his/her income level and tax filing status.
For individuals who are not active plan participants but whose spouses are, deductibility of traditional IRA contributions is phased out if the couple files a joint return and the Modified Adjusted Gross Income is between $184,000 and $194,000 in 2016.
Deductibility of Traditional IRA Contributions for Active Plan Participants
Married Individuals (Filing Jointly)
Single/Head of Household Individual
Year
Limited
Deduction
No
Deduction
Year
Limited
Deduction
No
Deduction
2015
$98,000
$118,000
2015
$61,000
$71,000
2016
$98,000
$118,000
2016
$61,000
$71,000
An individual may make non-deductible IRA contributions to the extent of the excess of:
(1)    The lesser of maximum annual contribution or 100% of compensation, over
(2)    The IRA deductible contributions made with respect to the individual.
A person whose filing status is "married, filing separately" may not make a full traditional IRA deduction contribution, unless the couple is separated and have been living apart for the entire year. Only a partial deductible contribution is allowed if your Modified Adjusted Gross Income is less than $10,000.
An individual may not make any contribution to his/her own traditional IRA for the year in which he/she reaches age 70 ½ or for any year thereafter.
Taxation of Distributions. Distributions from IRA Contracts are taxed as ordinary income to the recipient, although special rules exist for the tax-free return of non-deductible contributions. In addition, taxable distributions received under an IRA Contract prior to age 59½ are subject to a 10% penalty tax in addition to regular income tax. Exempted from this 10% tax penalty are the following types of distributions: distributions due to death; distributions due to disability; if the distribution is paid as part of a series of substantially equal periodic payments made for the life (or life expectancy) of the Owner or the joint lives (or joint life expectancies) of the Owner and the Owner's designated Beneficiary; distributions to pay deductible medical expenses; distributions for unemployed health insurance premiums; distributions for first-time home purchases (up to $10,000); distributions for higher education expenses; made on account of certain levies on income and payments; qualified reservist distributions; and distributions for certain natural disaster victims.

10


Required Distributions. Generally, distributions from IRA Contracts must commence not later than April 1 of the calendar year following the calendar year in which the owner attains age 70½, and such distributions must be made over a period that does not exceed the uniform lifetime distribution period or in certain instances under the joint life and last survivor period established by the IRS. In addition, upon the death of the owner prior to the commencement of distributions from the IRA contract, the amount accumulated under the contract must be distributed by December 31 of the calendar year that contains fifth anniversary of the owner’s death or, if distributions to a beneficiary designated under the contract commence by December 31 of the calendar year following the Plan Participant’s death, distributions are permitted over the life of the beneficiary or over a period not extending beyond the beneficiary’s life expectancy. If the Plan Participant has commenced receiving annuity distributions prior to the Plan Participant’s death, distributions must continue at least as rapidly as under the method in effect at the date of death or, if distributions to a beneficiary designated under the contract commence by December 31 of the calendar year following the Plan Participant’s death, distributions are permitted over the life of the beneficiary or over a period not extending beyond the beneficiary’s life expectancy if the surviving spouse is the beneficiary of the IRA Contract, the surviving spouse may have additional distribution options. A penalty tax of 50% may be imposed on any amount by which the minimum required distribution in any year exceeded the amount actually distributed in that year.
Tax-Free Rollovers. The Internal Revenue Code (the “Code”) permits the taxable portion of funds to be transferred in a tax-free rollover from a qualified retirement plan, tax-deferred annuity plan or governmental 457(b) plan to an IRA Contract if certain conditions are met, and if the indirect rollover of assets is completed within 60 days after the distribution from the qualified plan is received by the plan participant. A direct rollover of funds may avoid a 20% federal tax withholding generally applicable to qualified plans, tax-deferred annuity plan, or governmental 457(b) plan distributions and the 60 day rollover rules. In addition, not more frequently than once every twelve months, an individual may execute one tax-free indirect rollover from one IRA to another, subject to the 60-day limitation and other requirements. The once-per-year limitation on rollovers does not apply to direct transfers of funds between IRA custodians or trustees or to Roth IRA conversions.
SIMPLIFIED EMPLOYEE PENSION (SEP) PLANS AND SALARY REDUCTION SIMPLIFIED EMPLOYEE PENSION (SAR/SEP) PLANS
Contributions. Under Section 408(k) of the Code, employers may establish a type of IRA plan referred to as a simplified employee pension plan (SEP). Employer contributions to a SEP cannot exceed the lesser of 25% of employee compensation or $53,000 for 2016.
Employees of certain small employers may have contributions made to the salary reduction simplified employee pension plan (SAR/SEP) on their behalf on a salary reduction basis. The amount that an employee chooses to defer and contribute to the SAR/SEP is referred to as an elective deferral.
These elective deferrals are subject to the same cap as elective deferrals to IRC Section 401(k) plans, see table below. In addition to the elective deferrals, SAR/SEP may permit additional elective deferrals by individuals age 50 or over, referred to as “catch-up contributions”.
No new SAR/SEP are permitted after 1996 for any employer, but those in effect prior to 1997 may continue to operate, receive contributions, and add new employees.
Salary Reduction Simplified Employee Pension Plan (SAR/SEP)
Year
Elective Deferral
Catch-up Contribution
2015
$18,000
$6,000
2016
$18,000
$6,000
Taxation of Distributions. Generally, distribution payments from SEPs and SAR/SEPs are subject to the same distribution rules described above for traditional IRAs.
Required Distributions. SEPs and SAR/SEPs are subject to the same minimum required distribution rules described above for traditional IRAs.
Tax-Free Rollovers. Generally, rollovers and direct transfers may be made to and from SEPs and SAR/SEPs in the same manner as described above for traditional IRAs, subject to the same conditions and limitations.

11


SAVINGS INCENTIVE MATCH PLANS FOR EMPLOYEES (SIMPLE IRA)
Contributions. Under Section 408(p) of the Code, employers may establish a type of IRA plan known as a SIMPLE IRA. Employees may have contributions made to the SIMPLE IRA on a salary reduction basis. The amount that an employee chooses to defer and contribute to the SIMPLE IRA is referred to as an elective deferral.
These elective deferrals cannot exceed the amounts shown in the chart. In addition to the elective deferrals, SIMPLE IRA may permit additional elective deferrals by individuals age 50 or over, referred to as “catch-up contributions” in an amount equal to $3,000 for 2016.
Elective contribution amounts made under the salary reduction portions (i.e., those subject to the $12,500 limit in 2016) of a SIMPLE IRA plan are counted in the overall limit on elective deferrals by any individual. For example, an individual under age 50 who defers the maximum of $12,500 to a SIMPLE IRA of one employer and also participates in a 401(k) plan of another employer, would be limited to an elective deferral of $5,500 in 2016 ($18,000 – $12,500) to the 401(k) plan.
The employer generally must match either 100% of the employee’s elective deferral, up to 3% of the employee’s compensation (subject to certain exceptions) or fixed nonelective contributions of 2% of compensation of all eligible employees.
Savings Incentive Match Plan for Employees (SIMPLE IRA)
Year
Elective Deferral
Catch-up Contribution
401(k) Elective
Deferral
2015
$12,500
$3,000
$18,000
2016
$12,500
$3,000
$18,000
Taxation of Distributions. Generally, distribution payments from SIMPLE IRAs are subject to the same distribution rules described above for traditional IRAs, except that distributions made within two years of the date of an employee’s first participation in a SIMPLE IRA of an employer are subject to a 25% penalty tax instead of the 10% penalty tax discussed previously.
Required Distributions. SIMPLE IRAs are subject to the same minimum required distribution rules described above for traditional IRAs.
Tax-Free Rollovers. Direct transfers may be made among SIMPLE IRAs in the same manner as described above for IRAs, subject to the same conditions and limitations. Rollovers from SIMPLE IRAs to other types of IRAs and certain qualified plans are permitted after two years have elapsed from the date of an employee’s first participation in a SIMPLE IRA of the employer. Rollovers to SIMPLE IRAs from other plans are permitted after two years of participation in the SIMPLE IRA.
ROTH INDIVIDUAL RETIREMENT ANNUITIES (ROTH IRA)
Contribution. Under Section 408A of the Code, individuals may contribute to a Roth IRA on his/her own behalf up to the lesser of maximum annual contribution limit as shown in the chart or 100% of compensation. In addition, the contribution must be reduced by the amount of any contributions made to other IRAs for the benefit of the same individual.
Roth IRA - Maximum Annual Contribution
Year
Individual Roth IRA
Catch-up Contribution
2015
$5,500
$1,000
2016
$5,500
$1,000
For succeeding years, individual Roth IRA limits are indexed for cost-of-living.
Individuals age 50 or over are also permitted to make additional “catch-up” contributions. The additional contribution is $1,000 for 2015 and 2016.

12


For 2016, the maximum contribution is phased out for taxpayers based on their adjusted gross income and tax filing status (see chart below).
Modified Adjusted Gross Income Limits - 2016
Single/Head of Household
Married Filing Joint
ROTH IRA Contribution
< $117,000
< $184,000
Full Contribution
> $117,000 but < $132,000
> $184,000 but < $194,000
Partial Contribution*
> $132,000
> $194,000
No Contribution
*
Those entitled to only a partial contribution should check with a tax advisor to determine the allowable contribution amount.
A person whose filing status is “married, filing separately” may not make a full Roth IRA contribution, unless the couple is separated and have been living apart for the entire year. Only a partial contribution is allowed if your Modified Adjusted Gross Income is less than $10,000.
Taxation of Distribution. Qualified distributions are received income-tax free by the Roth IRA owner, or beneficiary in case of the Roth IRA owner’s death. A qualified distribution is any distribution made after five years if the IRA owner is over age 59½, dies, becomes disabled, or uses the funds for first-time home purchase at the time of distribution. The five-year period for owner contributions begins January 1 of the year the first contribution is made to any Roth IRA. The five-year period for converted amounts begins from January 1 of the year of the conversion for the purposes of the 10% penalty tax.
Required Distributions. Roth IRAs are not subject to lifetime minimum required distributions. Roth IRAs are subject to the same post-death minimum required distribution rules described above for IRAs.
DEFERRED INCOME DISCLOSURE
At the time the owner submits a deferred income transfer request, the Company will inform the contract owner of the following:
(a)
Amounts used to purchase deferred income payments are not liquid once the deferred income transfer is made.
(b)
Deferred income payments made pursuant to the Deferred Income Rider are subject to the claims paying ability of the Company.
(c)
The deferred income payment amount that the owner receives from the Company may be higher or lower than the amount the owner might receive if he or she purchased a similar product offered by the Company or by another company. When making a deferred income transfer, the owner should consider, in consultation with his or her financial adviser, payment amounts for similar products, as well as the owner’s future income needs, tax situation, contract terms, and the claims paying ability of the insurance company.
(d)
The deferred income payment amount is based on various factors disclosed in your prospectus. The confirmation the Company will send the owner with respect to the deferred income transfer will provide the owner with the deferred income payment amount for the amount transferred.
Upon completion of a deferred income transfer, the owner will receive a confirmation that will include information about:
(a)
The amount of the deferred income payment purchased.
(b)
The lack of liquidity of amounts transferred to the Deferred Income Rider.
(c)
The owner’s ability to consider other products offered by the Company or by another company and the right to cancel the deferred income transfer within the 10 day cancellation period.
(d)
The compensation, if any, paid to the broker/dealer or any other person as a result of the deferred income transfer.

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14

 
Report of Independent Registered Public Accounting Firm
The Board of Directors and Participants
Principal Life Insurance Company
We have audited the accompanying statements of assets and liabilities of Principal Life Insurance Company Separate Account B (“Separate Account”), comprised of subaccounts as listed in the accompanying statements of assets and liabilities, as of December 31, 2015, and the related statements of operations for the year or period then ended, and the statements of changes in net assets for the years or periods ended December 31, 2015 and 2014. These financial statements are the responsibility of the Separate Account’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Separate Account’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Separate Account’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2015, by correspondence with the fund companies or their transfer agents. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of each of the respective subaccounts of Principal Life Insurance Company Separate Account B at December 31, 2015, the results of its operations for the year or period then ended and the changes in its net assets for the years or periods ended December 31, 2015 and 2014, in conformity with U.S. generally accepted accounting principles.

/s/Ernst & Young LLP


Des Moines, Iowa
April 29, 2016


15


Principal Life Insurance Company - Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities
December 31, 2015
 
 
AllianceBernstein Small Cap Growth Class A Division
 
AllianceBernstein Small/Mid Cap Value Class A Division
 
Alps/Red Rocks Listed Private Equity Class III Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at market
$
4,350,241

 
$
2,766,015

 
$
23,675

Liabilities
 
—

 
 
—

 
 
—

Net assets
$
4,350,241

 
$
2,766,015

 
$
23,675

 
 
 
 
 
 
 
 
 
Net assets
 
 
 
 
 
 
 
 
Applicable to accumulation units:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
$
—

 
$
—

 
$
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
—

 
 
258,992

 
 
—

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity
 
3,838,950

 
 
2,085,701

 
 
—

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
511,291

 
 
421,322

 
 
—

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
—

 
 
—

 
 
23,675

Applicable to contracts in annuitization period:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

Total net assets
$
4,350,241

 
$
2,766,015

 
$
23,675

 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at cost
$
4,973,781

 
$
3,391,466

 
$
24,667

Shares of mutual funds owned
 
251,314

 
 
159,978

 
 
2,294

Accumulation units outstanding:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
—

 
 
22,648

 
 
—

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity
 
152,946

 
 
182,833

 
 
—

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
21,809

 
 
37,519

 
 
—

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
—

 
 
—

 
 
2,640

Accumulation unit value:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
$
—

 
$
—

 
$
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
—

 
 
11.44

 
 
—

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
11.26

 
 
—

 
Principal Investment Plus Variable Annuity
 
25.10

 
 
11.41

 
 
—

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
23.45

 
 
11.23

 
 
—

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
—

 
 
—

 
 
8.98

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
—

 
 
—

 
 
8.97

Annuitized units outstanding:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

Annuitized unit value:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 
 
 
 
 

16


Principal Life Insurance Company - Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities (continued)
December 31, 2015
American Century VP Capital Appreciation Class I Division
 
American Century VP Income & Growth Class I Division
 
American Century VP Inflation Protection Class II Division
 
American Century VP MidCap Value Class II Division
 
American Century VP Ultra Class I Division
 
American Century VP Ultra Class II Division
 
American Century VP Value Class II Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
2,496,198

 
$
11,548,437

 
$
51,379,647

 
$
6,444,459

 
$
3,618,032

 
$
36,158,449

 
$
15,477,692

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

$
2,496,198

 
$
11,548,437

 
$
51,379,647

 
$
6,444,459

 
$
3,618,032

 
$
36,158,449

 
$
15,477,692

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
2,693,079

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
91,348

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
8,764,010

 
 
64,802

 
 
1,091,980

 
 
3,618,032

 
 
—

 
 
15,144,771

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
2,295,230

 
 
—

 
 
49,011,821

 
 
4,512,198

 
 
—

 
 
34,060,533

 
 
—

 
200,968

 
 
—

 
 
2,247,410

 
 
840,281

 
 
—

 
 
2,097,916

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
16,808

 
 
—

 
 
—

 
 
—

 
 
114,296

 
—

 
 
—

 
 
38,806

 
 
—

 
 
—

 
 
—

 
 
218,625

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

$
2,496,198

 
$
11,548,437

 
$
51,379,647

 
$
6,444,459

 
$
3,618,032

 
$
36,158,449

 
$
15,477,692

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
2,415,931

 
$
8,996,822

 
$
57,254,100

 
$
6,340,662

 
$
2,466,965

 
$
21,887,786

 
$
11,405,990

 
166,192

 
 
1,347,542

 
 
5,168,979

 
 
350,242

 
 
233,874

 
 
2,374,160

 
 
1,746,918

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
156,193

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
5,881

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
537,127

 
 
6,724

 
 
58,694

 
 
219,740

 
 
—

 
 
752,055

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
211,490

 
 
—

 
 
3,887,158

 
 
243,115

 
 
—

 
 
1,765,323

 
 
—

 
18,706

 
 
—

 
 
190,826

 
 
46,825

 
 
—

 
 
116,409

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
1,754

 
 
—

 
 
—

 
 
—

 
 
11,875

 
—

 
 
—

 
 
4,062

 
 
—

 
 
—

 
 
—

 
 
22,786

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
17.24

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
15.53

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
16.31

 
 
9.64

 
 
18.61

 
 
16.46

 
 
—

 
 
20.14

 
—

 
 
14.94

 
 
9.60

 
 
17.99

 
 
15.08

 
 
—

 
 
18.56

 
10.85

 
 
—

 
 
12.61

 
 
18.56

 
 
—

 
 
19.29

 
 
—

 
10.74

 
 
—

 
 
11.78

 
 
17.95

 
 
—

 
 
18.02

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
9.58

 
 
—

 
 
—

 
 
—

 
 
9.63

 
—

 
 
—

 
 
9.55

 
 
—

 
 
—

 
 
—

 
 
9.59

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—


17


Principal Life Insurance Company - Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities
December 31, 2015
 
 
American Funds Insurance Series Asset Allocation Fund Class 4 Division
 
American Funds Insurance Series Blue Chip Income & Growth Fund Class 4 Division
 
American Funds Insurance Series Global Small Capitalization Fund Class 2 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at market
$
806,434

 
$
900,392

 
$
843,960

Liabilities
 
—

 
 
—

 
 
—

Net assets
$
806,434

 
$
900,392

 
$
843,960

 
 
 
 
 
 
 
 
 
Net assets
 
 
 
 
 
 
 
 
Applicable to accumulation units:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
$
—

 
$
—

 
$
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
—

 
 
—

 
 
367,945

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity
 
—

 
 
—

 
 
476,015

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
259,947

 
 
404,354

 
 
—

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
546,487

 
 
496,038

 
 
—

Applicable to contracts in annuitization period:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

Total net assets
$
806,434

 
$
900,392

 
$
843,960

 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at cost
$
808,051

 
$
1,025,956

 
$
928,166

Shares of mutual funds owned
 
39,531

 
 
71,859

 
 
35,312

Accumulation units outstanding:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
—

 
 
—

 
 
36,347

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity
 
—

 
 
—

 
 
54,474

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
26,779

 
 
41,324

 
 
—

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
56,386

 
 
50,856

 
 
—

Accumulation unit value:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
$
—

 
$
—

 
$
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
—

 
 
—

 
 
10.13

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
—

 
 
10.03

 
Principal Investment Plus Variable Annuity
 
—

 
 
—

 
 
8.74

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
—

 
 
—

 
 
8.71

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
9.71

 
 
9.79

 
 
—

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
9.69

 
 
9.75

 
 
—

Annuitized units outstanding:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

Annuitized unit value:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 
 
 
 
 

18


Principal Life Insurance Company - Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities (continued)
December 31, 2015
 
American Funds Insurance Series Global Small Capitalization Fund Class 4 Division
 
American Funds Insurance Series High-Income Bond Class 2 Division
 
American Funds Insurance Series Managed Risk Asset Allocation Fund Class P2 Division
 
American Funds Insurance Series Managed Risk Growth Fund Class P2 Division
 
American Funds Insurance Series Managed Risk International Fund Class P2 Division
 
American Funds Insurance Series New World Fund Class 2 Division
 
American Funds Insurance Series New World Fund Class 4 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
132,990

 
$
364,164

 
$
62,127

 
$
148,405

 
$
37,589

 
$
440,766

 
$
393,506

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

$
132,990

 
$
364,164

 
$
62,127

 
$
148,405

 
$
37,589

 
$
440,766

 
$
393,506

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
364,164

 
 
—

 
 
—

 
 
—

 
 
234,974

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
205,792

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
57,468

 
 
—

 
 
18,474

 
 
74,779

 
 
27,079

 
 
—

 
 
236,141

 
75,522

 
 
—

 
 
43,653

 
 
73,626

 
 
10,510

 
 
—

 
 
157,365

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

$
132,990

 
$
364,164

 
$
62,127

 
$
148,405

 
$
37,589

 
$
440,766

 
$
393,506

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
143,998

 
$
410,754

 
$
64,703

 
$
150,982

 
$
40,514

 
$
481,418

 
$
428,498

 
5,516

 
 
40,195

 
 
5,306

 
 
12,984

 
 
3,986

 
 
23,558

 
 
21,054

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
41,088

 
 
—

 
 
—

 
 
—

 
 
27,031

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
23,054

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
5,897

 
 
—

 
 
1,907

 
 
7,678

 
 
3,106

 
 
—

 
 
27,458

 
7,774

 
 
—

 
 
4,520

 
 
7,584

 
 
1,210

 
 
—

 
 
18,357

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
8.87

 
 
—

 
 
—

 
 
—

 
 
8.69

 
 
—

 
—

 
 
8.78

 
 
—

 
 
—

 
 
—

 
 
8.61

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
8.93

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
8.89

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
9.75

 
 
—

 
 
9.69

 
 
9.74

 
 
8.72

 
 
—

 
 
8.60

 
9.71

 
 
—

 
 
9.66

 
 
9.71

 
 
8.69

 
 
—

 
 
8.57

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—


19


Principal Life Insurance Company - Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
Balanced Class 1 Division
 
BlackRock Global Allocation Class III Division
 
BlackRock iShares Alternative Strategies Class III Division
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at market
$
29,965,069

 
$
522,246

 
$
129,148

Liabilities
 
—

 
 
—

 
 
—

Net assets
$
29,965,069

 
$
522,246

 
$
129,148

 
 
 
 
 
 
 
 
 
Net assets
 
 
 
 
 
 
 
 
Applicable to accumulation units:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
$
—

 
$
—

 
$
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
569,330

 
 
—

 
 
—

 
Premier Variable
 
2,243,418

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
27,152,321

 
 
58,010

 
 
35,052

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity
 
—

 
 
396,521

 
 
77,887

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
—

 
 
8,494

 
 
11,130

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
—

 
 
4,030

 
 
—

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
—

 
 
55,191

 
 
5,079

Applicable to contracts in annuitization period:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

Total net assets
$
29,965,069

 
$
522,246

 
$
129,148

 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at cost
$
24,509,319

 
$
562,375

 
$
134,212

Shares of mutual funds owned
 
1,692,942

 
 
40,050

 
 
13,205

Accumulation units outstanding:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
180,760

 
 
—

 
 
—

 
Premier Variable
 
679,819

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
960,761

 
 
6,242

 
 
3,775

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity
 
—

 
 
42,691

 
 
8,394

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
—

 
 
918

 
 
1,204

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
—

 
 
433

 
 
—

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
—

 
 
5,942

 
 
547

Accumulation unit value:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
$
—

 
$
—

 
$
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
3.15

 
 
—

 
 
—

 
Premier Variable
 
3.30

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
28.26

 
 
9.29

 
 
9.29

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
25.81

 
 
9.26

 
 
9.25

 
Principal Investment Plus Variable Annuity
 
—

 
 
9.29

 
 
9.28

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
—

 
 
9.25

 
 
9.24

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
—

 
 
9.30

 
 
9.29

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
—

 
 
9.29

 
 
9.28

Annuitized units outstanding:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

Annuitized unit value:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 
 
 
 
 

20


Principal Life Insurance Company - Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities (continued)
December 31, 2015
BlackRock iShares Dynamic Allocation Class III Division
 
BlackRock iShares Dynamic Fixed Income Class III Division
 
BlackRock iShares Equity Appreciation Class III Division
 
BlackRock Value Opportunities Class III Division
 
Bond & Mortgage Securities Class 1 Division
 
Bond & Mortgage Securities Class 2 Division
 
Calvert EAFE International Index Class F Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
60,297

 
$
110,754

 
$
110,952

 
$
826

 
$
151,327,795

 
$
18,626

 
$
14,972

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

$
60,297

 
$
110,754

 
$
110,952

 
$
826

 
$
151,327,795

 
$
18,626

 
$
14,972

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
195,449

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
1,870,370

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
5,352,712

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
326,829

 
 
—

 
 
—

 
—

 
 
21,115

 
 
2,948

 
 
—

 
 
63,750,763

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
27,776

 
 
89,047

 
 
64,855

 
 
—

 
 
73,295,134

 
 
—

 
 
—

 
32,521

 
 
—

 
 
37,834

 
 
—

 
 
6,536,538

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
3,637

 
—

 
 
592

 
 
5,315

 
 
826

 
 
—

 
 
18,626

 
 
11,335

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

$
60,297

 
$
110,754

 
$
110,952

 
$
826

 
$
151,327,795

 
$
18,626

 
$
14,972

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
62,447

 
$
113,935

 
$
118,143

 
$
901

 
$
149,982,947

 
$
18,853

 
$
15,932

 
6,388

 
 
11,418

 
 
12,193

 
 
45

 
 
13,694,823

 
 
1,689

 
 
193

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
72,961

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
666,285

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
303,236

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
24,838

 
 
—

 
 
—

 
—

 
 
2,178

 
 
340

 
 
—

 
 
2,728,039

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
3,041

 
 
9,191

 
 
7,494

 
 
—

 
 
3,144,063

 
 
—

 
 
—

 
3,574

 
 
—

 
 
4,388

 
 
—

 
 
306,993

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
405

 
—

 
 
61

 
 
614

 
 
92

 
 
—

 
 
1,916

 
 
1,267

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
2.68

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
2.81

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
17.65

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
13.16

 
 
—

 
 
—

 
9.14

 
 
9.69

 
 
8.66

 
 
—

 
 
23.37

 
 
—

 
 
—

 
9.11

 
 
9.66

 
 
8.63

 
 
—

 
 
21.34

 
 
—

 
 
—

 
9.13

 
 
9.69

 
 
8.65

 
 
—

 
 
23.31

 
 
—

 
 
—

 
9.10

 
 
9.65

 
 
8.62

 
 
—

 
 
21.29

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
9.15

 
 
9.70

 
 
8.67

 
 
9.00

 
 
—

 
 
9.73

 
 
8.98

 
9.13

 
 
9.69

 
 
8.65

 
 
8.99

 
 
—

 
 
9.72

 
 
8.95

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—


21


Principal Life Insurance Company - Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities
December 31, 2015
 
 
Calvert Russell 2000 Small Cap Index Class F Division
 
Calvert S&P MidCap 400 Index Class F Division
 
ClearBridge Small Cap Growth Series II Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at market
$
103,122

 
$
480,283

 
$
8,536

Liabilities
 
—

 
 
—

 
 
—

Net assets
$
103,122

 
$
480,283

 
$
8,536

 
 
 
 
 
 
 
 
 
Net assets
 
 
 
 
 
 
 
 
Applicable to accumulation units:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
$
—

 
$
—

 
$
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
76,272

 
 
270,504

 
 
—

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
26,850

 
 
209,779

 
 
8,536

Applicable to contracts in annuitization period:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

Total net assets
$
103,122

 
$
480,283

 
$
8,536

 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at cost
$
115,602

 
$
522,298

 
$
9,049

Shares of mutual funds owned
 
1,470

 
 
5,174

 
 
420

Accumulation units outstanding:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
7,782

 
 
27,556

 
 
—

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
2,748

 
 
21,438

 
 
902

Accumulation unit value:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
$
—

 
$
—

 
$
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
9.80

 
 
9.82

 
 
9.48

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
9.77

 
 
9.79

 
 
9.47

Annuitized units outstanding:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

Annuitized unit value:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 
 
 
 
 

22


Principal Life Insurance Company - Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities (continued)
December 31, 2015
Columbia Limited Duration Credit Class 2 Division
 
Columbia Small Cap Value Class 2 Division
 
Delaware Limited Term Diversified Income Service Class Division
 
Delaware Small Cap Value Service Class Division
 
Deutsche Alternative Asset Allocation Class B Division
 
Deutsche Equity 500 Index Class B2 Division
 
Deutsche Small Mid Cap Value Class B Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
140,265

 
$
75,095

 
$
226,690

 
$
1,008,617

 
$
40,290

 
$
678,440

 
$
952,631

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

$
140,265

 
$
75,095

 
$
226,690

 
$
1,008,617

 
$
40,290

 
$
678,440

 
$
952,631

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
51,997

 
 
—

 
 
68,626

 
 
20,189

 
 
—

 
 
—

 
 
40,634

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
69,738

 
 
—

 
 
133,320

 
 
742,801

 
 
—

 
 
—

 
 
682,290

 
7,887

 
 
—

 
 
13,193

 
 
245,627

 
 
—

 
 
—

 
 
124,076

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
959

 
 
—

 
 
—

 
 
—

 
 
293,054

 
 
16,779

 
10,643

 
 
74,136

 
 
11,551

 
 
—

 
 
40,290

 
 
385,386

 
 
88,852

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

$
140,265

 
$
75,095

 
$
226,690

 
$
1,008,617

 
$
40,290

 
$
678,440

 
$
952,631

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
143,034

 
$
84,525

 
$
227,972

 
$
1,158,768

 
$
42,037

 
$
709,241

 
$
1,024,922

 
15,082

 
 
4,711

 
 
23,322

 
 
30,036

 
 
3,200

 
 
34,989

 
 
59,726

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
5,435

 
 
—

 
 
6,957

 
 
1,840

 
 
—

 
 
—

 
 
3,564

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
7,294

 
 
—

 
 
13,525

 
 
67,872

 
 
—

 
 
—

 
 
59,983

 
828

 
 
—

 
 
1,343

 
 
22,800

 
 
—

 
 
—

 
 
11,081

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
105

 
 
—

 
 
—

 
 
—

 
 
28,707

 
 
1,721

 
1,113

 
 
8,158

 
 
1,172

 
 
—

 
 
4,453

 
 
37,873

 
 
9,142

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
9.57

 
 
—

 
 
9.87

 
 
10.97

 
 
—

 
 
—

 
 
11.40

 
9.53

 
 
—

 
 
9.83

 
 
10.80

 
 
—

 
 
—

 
 
11.22

 
9.56

 
 
—

 
 
9.86

 
 
10.94

 
 
—

 
 
—

 
 
11.38

 
9.52

 
 
—

 
 
9.82

 
 
10.77

 
 
—

 
 
—

 
 
11.20

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
9.58

 
 
9.10

 
 
9.88

 
 
—

 
 
9.08

 
 
10.21

 
 
9.75

 
9.56

 
 
9.09

 
 
9.86

 
 
—

 
 
9.05

 
 
10.18

 
 
9.72

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—


23


Principal Life Insurance Company - Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
Diversified Balanced Class 2 Division
 
Diversified Balanced Managed Volatility Class 2 Division
 
Diversified Growth Class 2 Division
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at market
$
1,030,996,862

 
$
138,377,896

 
$
3,202,277,009

Liabilities
 
—

 
 
—

 
 
—

Net assets
$
1,030,996,862

 
$
138,377,896

 
$
3,202,277,009

 
 
 
 
 
 
 
 
 
Net assets
 
 
 
 
 
 
 
 
Applicable to accumulation units:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
$
—

 
$
—

 
$
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
—

 
 
7,058

 
 
—

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity
 
919,718,416

 
 
107,545,897

 
 
2,960,163,557

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
80,515,136

 
 
6,547,087

 
 
206,154,057

 
Principal Lifetime Income Solutions
 
30,763,310

 
 
23,865,901

 
 
35,959,395

 
Principal Pivot Series Variable Annuity
 
—

 
 
173,355

 
 
—

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
—

 
 
238,598

 
 
—

Applicable to contracts in annuitization period:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

Total net assets
$
1,030,996,862

 
$
138,377,896

 
$
3,202,277,009

 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at cost
$
902,278,266

 
$
138,382,674

 
$
2,788,993,675

Shares of mutual funds owned
 
73,068,523

 
 
12,908,386

 
 
212,352,587

Accumulation units outstanding:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
—

 
 
731

 
 
—

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity
 
65,359,101

 
 
10,271,906

 
 
197,094,058

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
5,931,532

 
 
633,352

 
 
14,229,420

 
Principal Lifetime Income Solutions
 
2,186,172

 
 
2,279,565

 
 
2,394,254

 
Principal Pivot Series Variable Annuity
 
—

 
 
17,252

 
 
—

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
—

 
 
23,821

 
 
—

Accumulation unit value:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
$
—

 
$
—

 
$
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
—

 
 
9.66

 
 
—

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
9.63

 
 
—

 
Principal Investment Plus Variable Annuity
 
14.07

 
 
10.47

 
 
15.02

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
13.57

 
 
10.34

 
 
14.49

 
Principal Lifetime Income Solutions
 
14.07

 
 
10.47

 
 
15.02

 
Principal Pivot Series Variable Annuity
 
—

 
 
10.05

 
 
—

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
—

 
 
10.02

 
 
—

Annuitized units outstanding:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

Annuitized unit value:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 
 
 
 
 

24


Principal Life Insurance Company - Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities (continued)
December 31, 2015
Diversified Growth Managed Volatility Class 2 Division
 
Diversified Income Class 2 Division
 
Diversified International Class 1 Division
 
Diversified International Class 2 Division
 
Dreyfus IP MidCap Stock Service Shares Division
 
Dreyfus Investment Portfolio Technology Growth Service Shares Division
 
Equity Income Class 1 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
252,642,046

 
$
198,790,685

 
$
136,018,971

 
$
210,196

 
$
43,675

 
$
6,205,084

 
$
207,673,737

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

$
252,642,046

 
$
198,790,685

 
$
136,018,971

 
$
210,196

 
$
43,675

 
$
6,205,084

 
$
207,673,737

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
243,856

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
2,497,610

 
 
—

 
 
—

 
 
—

 
 
63,783

 
—

 
 
—

 
 
2,231,773

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
362,702

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
85,356,225

 
 
—

 
 
—

 
 
—

 
 
48,067,615

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
205,755,834

 
 
183,425,912

 
 
42,063,588

 
 
—

 
 
—

 
 
5,261,110

 
 
151,301,136

 
19,054,283

 
 
8,494,133

 
 
3,263,217

 
 
—

 
 
—

 
 
943,974

 
 
8,241,203

 
27,503,019

 
 
6,870,640

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
299,767

 
 
—

 
 
—

 
 
127,166

 
 
19,695

 
 
—

 
 
—

 
29,143

 
 
—

 
 
—

 
 
83,030

 
 
23,980

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

$
252,642,046

 
$
198,790,685

 
$
136,018,971

 
$
210,196

 
$
43,675

 
$
6,205,084

 
$
207,673,737

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
252,793,498

 
$
192,836,820

 
$
111,389,468

 
$
228,298

 
$
43,776

 
$
5,934,546

 
$
160,847,828

 
23,414,462

 
 
16,747,320

 
 
9,942,908

 
 
15,254

 
 
2,313

 
 
363,721

 
 
9,583,467

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
80,483

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
786,785

 
 
—

 
 
—

 
 
—

 
 
33,904

 
—

 
 
—

 
 
133,897

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
29,674

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
3,194,681

 
 
—

 
 
—

 
 
—

 
 
3,385,374

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
19,518,214

 
 
15,736,842

 
 
1,578,156

 
 
—

 
 
—

 
 
223,435

 
 
10,681,866

 
1,830,714

 
 
744,752

 
 
134,051

 
 
—

 
 
—

 
 
42,920

 
 
614,097

 
2,608,964

 
 
589,483

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
29,880

 
 
—

 
 
—

 
 
13,806

 
 
2,124

 
 
—

 
 
—

 
2,914

 
 
—

 
 
—

 
 
9,043

 
 
2,590

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
3.03

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
3.17

 
 
—

 
 
—

 
 
—

 
 
1.88

 
—

 
 
—

 
 
16.67

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
12.22

 
 
—

 
 
—

 
 
—

 
 
—

 
9.60

 
 
—

 
 
26.72

 
 
—

 
 
—

 
 
—

 
 
14.20

 
9.56

 
 
—

 
 
24.40

 
 
—

 
 
—

 
 
—

 
 
13.45

 
10.54

 
 
11.66

 
 
26.65

 
 
—

 
 
—

 
 
23.55

 
 
14.16

 
10.41

 
 
11.41

 
 
24.34

 
 
—

 
 
—

 
 
21.99

 
 
13.42

 
10.54

 
 
11.66

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
10.03

 
 
—

 
 
—

 
 
9.21

 
 
9.27

 
 
—

 
 
—

 
10.00

 
 
—

 
 
—

 
 
9.18

 
 
9.26

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—


25


Principal Life Insurance Company - Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities
December 31, 2015
 
 
Equity Income Class 2 Division
 
Fidelity VIP Contrafund Service Class Division
 
Fidelity VIP Contrafund Service Class 2 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at market
$
1,006,029

 
$
42,170,547

 
$
50,809,499

Liabilities
 
—

 
 
—

 
 
—

Net assets
$
1,006,029

 
$
42,170,547

 
$
50,809,499

 
 
 
 
 
 
 
 
 
Net assets
 
 
 
 
 
 
 
 
Applicable to accumulation units:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
$
—

 
$
—

 
$
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
—

 
 
42,170,547

 
 
—

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity
 
—

 
 
—

 
 
45,809,235

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
—

 
 
—

 
 
3,731,266

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
440,071

 
 
—

 
 
629,305

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
565,958

 
 
—

 
 
639,693

Applicable to contracts in annuitization period:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

Total net assets
$
1,006,029

 
$
42,170,547

 
$
50,809,499

 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at cost
$
1,077,827

 
$
32,905,384

 
$
36,373,596

Shares of mutual funds owned
 
46,748

 
 
1,248,019

 
 
1,527,646

Accumulation units outstanding:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
—

 
 
1,785,852

 
 
—

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity
 
—

 
 
—

 
 
2,022,275

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
—

 
 
—

 
 
176,348

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
45,400

 
 
—

 
 
62,363

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
58,575

 
 
—

 
 
63,595

Accumulation unit value:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
$
—

 
$
—

 
$
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
—

 
 
23.61

 
 
—

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
21.57

 
 
—

 
Principal Investment Plus Variable Annuity
 
—

 
 
—

 
 
22.65

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
—

 
 
—

 
 
21.16

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
9.69

 
 
—

 
 
10.09

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
9.66

 
 
—

 
 
10.06

Annuitized units outstanding:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

Annuitized unit value:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 
 
 
 
 

26


Principal Life Insurance Company - Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities (continued)
December 31, 2015
Fidelity VIP Equity-Income Service Class 2 Division
 
Fidelity VIP Growth Service Class Division
 
Fidelity VIP Growth Service Class 2 Division
 
Fidelity VIP Mid Cap Service Class Division
 
Fidelity VIP Mid Cap Service Class 2 Division
 
Fidelity VIP Overseas Service Class 2 Division
 
Franklin Global Real Estate VIP Class 2 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
31,471,745

 
$
14,192,952

 
$
9,985,318

 
$
69,447

 
$
19,266,260

 
$
31,476,924

 
$
496,713

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

$
31,471,745

 
$
14,192,952

 
$
9,985,318

 
$
69,447

 
$
19,266,260

 
$
31,476,924

 
$
496,713

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
69,447

 
 
—

 
 
—

 
 
—

 
21,014,371

 
 
14,192,952

 
 
—

 
 
—

 
 
—

 
 
85,052

 
 
33,895

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
9,187,080

 
 
—

 
 
8,897,470

 
 
—

 
 
16,461,187

 
 
29,167,336

 
 
58,784

 
1,270,294

 
 
—

 
 
1,087,848

 
 
—

 
 
1,877,308

 
 
2,104,523

 
 
5,125

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
579,628

 
 
59,794

 
 
210,367

 
—

 
 
—

 
 
—

 
 
—

 
 
348,137

 
 
60,219

 
 
188,542

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

$
31,471,745

 
$
14,192,952

 
$
9,985,318

 
$
69,447

 
$
19,266,260

 
$
31,476,924

 
$
496,713

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
32,306,526

 
$
9,059,520

 
$
7,257,801

 
$
78,357

 
$
19,892,394

 
$
25,566,736

 
$
512,876

 
1,570,446

 
 
216,455

 
 
153,597

 
 
2,143

 
 
605,286

 
 
1,664,565

 
 
32,005

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
6,676

 
 
—

 
 
—

 
 
—

 
1,248,031

 
 
917,134

 
 
—

 
 
—

 
 
—

 
 
9,381

 
 
3,539

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
546,954

 
 
—

 
 
424,858

 
 
—

 
 
654,316

 
 
1,780,301

 
 
6,141

 
82,074

 
 
—

 
 
55,613

 
 
—

 
 
79,889

 
 
137,525

 
 
537

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
59,265

 
 
6,207

 
 
20,044

 
—

 
 
—

 
 
—

 
 
—

 
 
35,710

 
 
6,272

 
 
18,022

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
10.40

 
 
—

 
 
—

 
 
—

 
16.84

 
 
15.48

 
 
—

 
 
—

 
 
—

 
 
9.07

 
 
9.58

 
15.52

 
 
14.13

 
 
—

 
 
—

 
 
—

 
 
9.03

 
 
9.54

 
16.80

 
 
—

 
 
20.94

 
 
—

 
 
25.16

 
 
16.38

 
 
9.57

 
15.48

 
 
—

 
 
19.56

 
 
—

 
 
23.50

 
 
15.30

 
 
9.54

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
9.78

 
 
9.63

 
 
10.50

 
—

 
 
—

 
 
—

 
 
—

 
 
9.75

 
 
9.60

 
 
10.46

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—


27


Principal Life Insurance Company - Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
Franklin Rising Dividends VIP Class 4 Division
 
Franklin Small Cap Value VIP Class 2 Division
 
Goldman Sachs VIT Mid Cap Value Institutional Shares Division
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at market
$
469,916

 
$
3,252,241

 
$
14,901,640

Liabilities
 
—

 
 
—

 
 
—

Net assets
$
469,916

 
$
3,252,241

 
$
14,901,640

 
 
 
 
 
 
 
 
 
Net assets
 
 
 
 
 
 
 
 
Applicable to accumulation units:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
$
—

 
$
—

 
$
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
—

 
 
208,408

 
 
194,168

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity
 
—

 
 
2,585,817

 
 
13,772,424

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
—

 
 
458,016

 
 
935,048

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
165,118

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
304,798

 
 
—

 
 
—

Applicable to contracts in annuitization period:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

Total net assets
$
469,916

 
$
3,252,241

 
$
14,901,640

 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at cost
$
523,276

 
$
3,892,446

 
$
15,769,289

Shares of mutual funds owned
 
18,941

 
 
183,950

 
 
1,028,409

Accumulation units outstanding:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
—

 
 
12,133

 
 
8,911

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity
 
—

 
 
150,907

 
 
633,584

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
—

 
 
27,710

 
 
46,053

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
16,779

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
31,072

 
 
—

 
 
—

Accumulation unit value:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
$
—

 
$
—

 
$
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
—

 
 
17.18

 
 
21.79

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
16.57

 
 
20.35

 
Principal Investment Plus Variable Annuity
 
—

 
 
17.14

 
 
21.74

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
—

 
 
16.53

 
 
20.30

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
9.84

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
9.81

 
 
—

 
 
—

Annuitized units outstanding:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

Annuitized unit value:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 
 
 
 
 

28


Principal Life Insurance Company - Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities (continued)
December 31, 2015
Goldman Sachs VIT Mid Cap Value Service Shares Division
 
Goldman Sachs VIT Multi-Strategy Alternatives Portfolio Service Shares Division
 
Goldman Sachs VIT Small Cap Equity Insights Institutional Shares Division
 
Goldman Sachs VIT Small Cap Equity Insights Service Shares Division
 
Government & High Quality Bond Class 1 Division
 
Government & High Quality Bond Class 2 Division
 
Guggenheim Floating Rate Strategies Series F Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
468,946

 
$
12,179

 
$
6,193,049

 
$
107,122

 
$
121,664,052

 
$
1,002,555

 
$
787,211

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

$
468,946

 
$
12,179

 
$
6,193,049

 
$
107,122

 
$
121,664,052

 
$
1,002,555

 
$
787,211

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
—

 
 
—

 
 
—

 
 
—

 
 
58,173

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
32,161

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
122,529

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
2,387,194

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
2,602,044

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
235,767

 
 
—

 
 
—

 
—

 
 
—

 
 
88,157

 
 
—

 
 
66,162,480

 
 
—

 
 
177,720

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
5,755,293

 
 
—

 
 
44,939,853

 
 
—

 
 
498,817

 
—

 
 
—

 
 
349,599

 
 
—

 
 
5,123,851

 
 
—

 
 
19,334

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
132,872

 
 
—

 
 
—

 
 
48,944

 
 
—

 
 
809,920

 
 
29,498

 
336,074

 
 
12,179

 
 
—

 
 
58,178

 
 
—

 
 
192,635

 
 
61,842

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

$
468,946

 
$
12,179

 
$
6,193,049

 
$
107,122

 
$
121,664,052

 
$
1,002,555

 
$
787,211

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
554,624

 
$
12,714

 
$
6,864,240

 
$
128,426

 
$
126,416,058

 
$
1,037,517

 
$
807,948

 
32,319

 
 
1,332

 
 
533,884

 
 
9,299

 
 
11,974,808

 
 
98,580

 
 
30,607

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
17,733

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
8,510

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
46,132

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
853,570

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
209,701

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
19,138

 
 
—

 
 
—

 
—

 
 
—

 
 
4,965

 
 
—

 
 
5,492,668

 
 
—

 
 
18,284

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
324,925

 
 
—

 
 
3,739,785

 
 
—

 
 
51,352

 
—

 
 
—

 
 
21,131

 
 
—

 
 
444,980

 
 
—

 
 
1,998

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
14,496

 
 
—

 
 
—

 
 
4,781

 
 
—

 
 
80,402

 
 
2,981

 
36,783

 
 
1,306

 
 
—

 
 
5,702

 
 
—

 
 
19,184

 
 
6,270

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
—

 
 
—

 
 
—

 
 
—

 
 
3.28

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
3.78

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
2.66

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
2.80

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
12.41

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
12.32

 
 
—

 
 
—

 
—

 
 
—

 
 
17.76

 
 
—

 
 
12.05

 
 
—

 
 
9.72

 
—

 
 
—

 
 
16.58

 
 
—

 
 
11.54

 
 
—

 
 
9.68

 
—

 
 
—

 
 
17.71

 
 
—

 
 
12.02

 
 
—

 
 
9.71

 
—

 
 
—

 
 
16.54

 
 
—

 
 
11.51

 
 
—

 
 
9.68

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
9.17

 
 
9.34

 
 
—

 
 
10.24

 
 
—

 
 
10.07

 
 
9.90

 
9.14

 
 
9.33

 
 
—

 
 
10.20

 
 
—

 
 
10.04

 
 
9.86

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—


29


Principal Life Insurance Company - Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
Guggenheim Investments Global Managed Futures Strategy Division
 
Guggenheim Investments Long Short Equity Division
 
Guggenheim Investments Multi-Hedge Strategies Division
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at market
$
114,058

 
$
177,354

 
$
87,800

Liabilities
 
—

 
 
—

 
 
—

Net assets
$
114,058

 
$
177,354

 
$
87,800

 
 
 
 
 
 
 
 
 
 
Net assets
 
 
 
 
 
 
 
 
Applicable to accumulation units:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
$
—

 
$
—

 
$
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
—

 
 
58,773

 
 
5,317

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity
 
4,642

 
 
23,078

 
 
20,153

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
—

 
 
3,257

 
 
—

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
86,326

 
 
37,456

 
 
6,943

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
23,090

 
 
54,790

 
 
55,387

Applicable to contracts in annuitization period:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

Total net assets
$
114,058

 
$
177,354

 
$
87,800

 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at cost
$
123,690

 
$
177,807

 
$
87,827

Shares of mutual funds owned
 
5,873

 
 
11,614

 
 
3,645

Accumulation units outstanding:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
—

 
 
5,945

 
 
531

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity
 
481

 
 
2,336

 
 
2,017

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
—

 
 
331

 
 
—

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
8,251

 
 
3,582

 
 
672

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
2,214

 
 
5,257

 
 
5,379

Accumulation unit value:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
$
—

 
$
—

 
$
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
9.66

 
 
9.89

 
 
10.00

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
9.62

 
 
9.85

 
 
9.96

 
Principal Investment Plus Variable Annuity
 
9.65

 
 
9.88

 
 
9.99

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
9.62

 
 
9.84

 
 
9.96

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
10.46

 
 
10.46

 
 
10.33

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
10.43

 
 
10.42

 
 
10.30

Annuitized units outstanding:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

Annuitized unit value:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 
 
 
 
 

30


Principal Life Insurance Company - Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities (continued)
December 31, 2015
Guggenheim Macro Opportunities Series M Division
 
Income Class 1 Division
 
Income Class 2 Division
 
International Emerging Markets Class 1 Division
 
International Emerging Markets Class 2 Division
 
Invesco American Franchise Series I Division
 
Invesco Balanced-Risk Allocation Series II Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
219,308

 
$
582,115

 
$
17,265

 
$
50,664,749

 
$
33,123

 
$
4,368,724

 
$
191,276

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

$
219,308

 
$
582,115

 
$
17,265

 
$
50,664,749

 
$
33,123

 
$
4,368,724

 
$
191,276

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
387,308

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
79,568

 
 
71,968

 
 
—

 
 
20,505,629

 
 
—

 
 
4,368,724

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
28,721

 
 
494,531

 
 
—

 
 
27,606,238

 
 
—

 
 
—

 
 
—

 
5,222

 
 
15,616

 
 
—

 
 
2,165,574

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
52,855

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
23,722

 
52,942

 
 
—

 
 
17,265

 
 
—

 
 
33,123

 
 
—

 
 
167,554

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

$
219,308

 
$
582,115

 
$
17,265

 
$
50,664,749

 
$
33,123

 
$
4,368,724

 
$
191,276

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
225,613

 
$
596,738

 
$
17,402

 
$
59,694,396

 
$
35,852

 
$
2,968,737

 
$
228,556

 
8,507

 
 
56,847

 
 
1,693

 
 
3,933,598

 
 
2,576

 
 
76,243

 
 
18,976

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
124,776

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
8,198

 
 
7,410

 
 
—

 
 
757,361

 
 
—

 
 
294,117

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
2,961

 
 
50,950

 
 
—

 
 
1,022,073

 
 
—

 
 
—

 
 
—

 
540

 
 
1,615

 
 
—

 
 
87,786

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
5,332

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
2,490

 
5,358

 
 
—

 
 
1,783

 
 
—

 
 
4,256

 
 
—

 
 
17,642

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
3.10

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
9.71

 
 
9.71

 
 
—

 
 
27.08

 
 
—

 
 
14.86

 
 
—

 
9.67

 
 
9.68

 
 
—

 
 
24.73

 
 
—

 
 
14.53

 
 
—

 
9.70

 
 
9.71

 
 
—

 
 
27.01

 
 
—

 
 
—

 
 
—

 
9.66

 
 
9.67

 
 
—

 
 
24.67

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
9.91

 
 
—

 
 
9.70

 
 
—

 
 
7.80

 
 
—

 
 
9.53

 
9.88

 
 
—

 
 
9.69

 
 
—

 
 
7.78

 
 
—

 
 
9.50

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—


31


Principal Life Insurance Company - Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
Invesco Core Equity Series I Division
 
Invesco Global Health Care Series I Division
 
Invesco Global Health Care Series II Division
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at market
$
17,819,731

 
$
10,562,192

 
$
814,219

Liabilities
 
—

 
 
—

 
 
—

Net assets
$
17,819,731

 
$
10,562,192

 
$
814,219

 
 
 
 
 
 
 
 
 
Net assets
 
 
 
 
 
 
 
 
Applicable to accumulation units:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
$
—

 
$
—

 
$
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
17,819,731

 
 
10,562,192

 
 
—

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
—

 
 
—

 
 
311,665

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
—

 
 
—

 
 
502,554

Applicable to contracts in annuitization period:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

Total net assets
$
17,819,731

 
$
10,562,192

 
$
814,219

 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at cost
$
14,298,472

 
$
8,288,830

 
$
925,421

Shares of mutual funds owned
 
526,588

 
 
332,667

 
 
26,565

Accumulation units outstanding:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
1,220,317

 
 
460,748

 
 
—

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
—

 
 
—

 
 
29,638

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
—

 
 
—

 
 
47,944

Accumulation unit value:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
$
—

 
$
—

 
$
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
14.60

 
 
22.92

 
 
—

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
13.34

 
 
21.00

 
 
—

 
Principal Investment Plus Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
—

 
 
—

 
 
10.52

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
—

 
 
—

 
 
10.48

Annuitized units outstanding:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

Annuitized unit value:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 
 
 
 
 

32


Principal Life Insurance Company - Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities (continued)
December 31, 2015
Invesco International Growth Series I Division
 
Invesco International Growth Series II Division
 
Invesco Mid Cap Growth Series I Division
 
Invesco Small Cap Equity Series I Division
 
Invesco Technology Series I Division
 
Invesco Value Opportunities Series I Division
 
Janus Aspen Enterprise Service Shares Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
10,160,725
 
$
428,869
 
$
1,594,437
 
$
7,927,985
 
$
3,452,392
 
$
4,445,303
 
$
8,794,398

 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

$
10,160,725
 
$
428,869
 
$
1,594,437
 
$
7,927,985
 
$
3,452,392
 
$
4,445,303
 
$
8,794,398

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—
 
$
—
 
$
—
 
$
—
 
$
—
 
$
—
 
$
—

 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
—
 
 
—
 
 
1,594,437
 
 
2,257,885
 
 
3,452,392
 
 
—
 
 
8,794,398

 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
9,299,077
 
 
—
 
 
—
 
 
5,043,124
 
 
—
 
 
3,967,940
 
 
—

 
861,648
 
 
—
 
 
—
 
 
626,976
 
 
—
 
 
477,363
 
 
—

 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
—
 
 
225,950
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
—
 
 
202,919
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

$
10,160,725
 
$
428,869
 
$
1,594,437
 
$
7,927,985
 
$
3,452,392
 
$
4,445,303
 
$
8,794,398

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
9,654,943
 
$
461,139
 
$
889,328
 
$
8,668,134
 
$
3,252,164
 
$
4,108,119
 
$
5,697,629

 
303,396
 
 
12,980
 
 
296,364
 
 
449,432
 
 
183,345
 
 
568,453
 
 
160,863

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
—
 
 
—
 
 
112,954
 
 
105,137
 
 
356,718
 
 
—
 
 
580,326

 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
869,910
 
 
—
 
 
—
 
 
235,428
 
 
—
 
 
299,505
 
 
—

 
84,382
 
 
—
 
 
—
 
 
31,336
 
 
—
 
 
38,577
 
 
—

 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
—
 
 
24,423
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
—
 
 
22,004
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—
 
$
—
 
$
—
 
$
—
 
$
—
 
$
—
 
$
—

 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
—
 
 
—
 
 
14.11
 
 
21.47
 
 
9.68
 
 
—
 
 
15.15

 
—
 
 
—
 
 
13.81
 
 
20.06
 
 
8.86
 
 
—
 
 
13.84

 
10.69
 
 
—
 
 
—
 
 
21.42
 
 
—
 
 
13.25
 
 
—

 
10.21
 
 
—
 
 
—
 
 
20.01
 
 
—
 
 
12.38
 
 
—

 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
—
 
 
9.25
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
—
 
 
9.22
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—


33


Principal Life Insurance Company - Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
Janus Aspen Flexible Bond Service Shares Division
 
LargeCap Growth Class 1 Division
 
LargeCap Growth Class 2 Division
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at market
$
796,255

 
$
49,543,081

 
$
442,067

Liabilities
 
—

 
 
—

 
 
—

Net assets
$
796,255

 
$
49,543,081

 
$
442,067

 
 
 
 
 
 
 
 
 
Net assets
 
 
 
 
 
 
 
 
Applicable to accumulation units:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
$
—

 
$
—

 
$
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
800,284

 
 
—

 
Premier Variable
 
—

 
 
3,882,026

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
—

 
 
32,399,770

 
 
—

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity
 
—

 
 
10,623,351

 
 
—

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
—

 
 
1,837,650

 
 
—

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
281,901

 
 
—

 
 
230,848

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
514,354

 
 
—

 
 
211,219

Applicable to contracts in annuitization period:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

Total net assets
$
796,255

 
$
49,543,081

 
$
442,067

 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at cost
$
818,582

 
$
31,758,657

 
$
441,385

Shares of mutual funds owned
 
62,895

 
 
1,921,019

 
 
17,208

Accumulation units outstanding:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
242,091

 
 
—

 
Premier Variable
 
—

 
 
1,120,783

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
—

 
 
1,068,477

 
 
—

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity
 
—

 
 
351,211

 
 
—

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
—

 
 
66,520

 
 
—

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
28,391

 
 
—

 
 
22,042

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
51,967

 
 
—

 
 
20,233

Accumulation unit value:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
$
—

 
$
—

 
$
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
3.31

 
 
—

 
Premier Variable
 
—

 
 
3.46

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
—

 
 
30.32

 
 
—

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
27.69

 
 
—

 
Principal Investment Plus Variable Annuity
 
—

 
 
30.25

 
 
—

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
—

 
 
27.63

 
 
—

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
9.93

 
 
—

 
 
10.47

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
9.90

 
 
—

 
 
10.44

Annuitized units outstanding:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

Annuitized unit value:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 
 
 
 
 

34


Principal Life Insurance Company - Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities (continued)
December 31, 2015
LargeCap Growth I Class 1 Division
 
LargeCap Growth I Class 2 Division
 
LargeCap S&P 500 Index Class 1 Division
 
LargeCap S&P 500 Index Class 2 Division
 
LargeCap Value Class 1 Division
 
LargeCap Value Class 2 Division
 
MFS VIT International Value Service Class Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
105,641,855
 
$
490,954
 
$
92,317,286
 
$
150,988
 
$
79,222,760
 
$
10,361
 
$
1,563,353

 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

$
105,641,855
 
$
490,954
 
$
92,317,286
 
$
150,988
 
$
79,222,760
 
$
10,361
 
$
1,563,353

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—
 
$
—
 
$
—
 
$
—
 
$
875,218
 
$
—
 
$
—

 
—
 
 
—
 
 
—
 
 
—
 
 
1,992,345
 
 
—
 
 
—

 
—
 
 
—
 
 
—
 
 
—
 
 
100,401
 
 
—
 
 
—

 
—
 
 
—
 
 
—
 
 
—
 
 
354,908
 
 
—
 
 
—

 
626,046
 
 
—
 
 
478,182
 
 
—
 
 
4,991,756
 
 
—
 
 
—

 
1,889,137
 
 
—
 
 
7,923,486
 
 
—
 
 
2,728,337
 
 
—
 
 
—

 
175,176
 
 
—
 
 
489,973
 
 
—
 
 
393,436
 
 
—
 
 
—

 
84,063,887
 
 
—
 
 
42,681,921
 
 
—
 
 
51,219,772
 
 
—
 
 
398,762

 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
17,519,788
 
 
—
 
 
37,465,583
 
 
—
 
 
14,455,424
 
 
—
 
 
564,993

 
1,367,821
 
 
—
 
 
3,278,141
 
 
—
 
 
2,016,398
 
 
—
 
 
39,867

 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
—
 
 
379,409
 
 
—
 
 
31,784
 
 
—
 
 
—
 
 
310,472

 
—
 
 
111,545
 
 
—
 
 
119,204
 
 
—
 
 
10,361
 
 
249,259

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
—
 
 
—
 
 
—
 
 
—
 
 
94,765
 
 
—
 
 
—

$
105,641,855
 
$
490,954
 
$
92,317,286
 
$
150,988
 
$
79,222,760
 
$
10,361
 
$
1,563,353

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
88,867,164
 
$
559,966
 
$
61,453,425
 
$
153,316
 
$
78,321,514
 
$
10,713
 
$
1,580,719

 
4,012,224
 
 
18,675
 
 
6,406,474
 
 
10,493
 
 
2,714,038
 
 
356
 
 
70,644

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—
 
 
—
 
 
—
 
 
—
 
 
14,438
 
 
—
 
 
—

 
—
 
 
—
 
 
—
 
 
—
 
 
210,207
 
 
—
 
 
—

 
—
 
 
—
 
 
—
 
 
—
 
 
8,051
 
 
—
 
 
—

 
—
 
 
—
 
 
—
 
 
—
 
 
71,750
 
 
—
 
 
—

 
282,105
 
 
—
 
 
238,462
 
 
—
 
 
958,512
 
 
—
 
 
—

 
99,331
 
 
—
 
 
460,696
 
 
—
 
 
162,148
 
 
—
 
 
—

 
9,291
 
 
—
 
 
28,270
 
 
—
 
 
25,579
 
 
—
 
 
—

 
1,440,917
 
 
—
 
 
2,656,070
 
 
—
 
 
1,317,058
 
 
—
 
 
42,032

 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
301,032
 
 
—
 
 
2,337,130
 
 
—
 
 
372,609
 
 
—
 
 
59,591

 
25,733
 
 
—
 
 
223,900
 
 
—
 
 
56,908
 
 
—
 
 
4,221

 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
—
 
 
37,961
 
 
—
 
 
3,291
 
 
—
 
 
—
 
 
30,037

 
—
 
 
11,178
 
 
—
 
 
12,363
 
 
—
 
 
1,083
 
 
24,192

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—
 
$
—
 
$
—
 
$
—
 
$
60.35
 
$
—
 
$
—

 
—
 
 
—
 
 
—
 
 
—
 
 
9.48
 
 
—
 
 
—

 
—
 
 
—
 
 
—
 
 
—
 
 
11.42
 
 
—
 
 
—

 
—
 
 
—
 
 
—
 
 
—
 
 
4.95
 
 
—
 
 
—

 
2.22
 
 
—
 
 
2.01
 
 
—
 
 
5.21
 
 
—
 
 
—

 
19.02
 
 
—
 
 
17.20
 
 
—
 
 
16.83
 
 
—
 
 
—

 
18.85
 
 
—
 
 
17.33
 
 
—
 
 
15.38
 
 
—
 
 
—

 
58.34
 
 
—
 
 
16.07
 
 
—
 
 
38.89
 
 
—
 
 
9.49

 
53.28
 
 
—
 
 
14.68
 
 
—
 
 
35.52
 
 
—
 
 
9.45

 
58.20
 
 
—
 
 
16.03
 
 
—
 
 
38.80
 
 
—
 
 
9.48

 
53.15
 
 
—
 
 
14.64
 
 
—
 
 
35.43
 
 
—
 
 
9.45

 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
—
 
 
9.99
 
 
—
 
 
9.66
 
 
—
 
 
9.58
 
 
10.34

 
—
 
 
9.98
 
 
—
 
 
9.64
 
 
—
 
 
9.56
 
 
10.30

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—

 
—
 
 
—
 
 
—
 
 
—
 
 
8,295
 
 
—
 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—
 
 
—
 
 
—
 
 
—
 
 
60.35
 
 
—
 
 
—

 
—
 
 
—
 
 
—
 
 
—
 
 
11.42
 
 
—
 
 
—


35


Principal Life Insurance Company - Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
MFS VIT New Discovery Service Class Division
 
MFS VIT Utilities Service Class Division
 
MFS VIT Value Service Class Division
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at market
$
1,253,361

 
$
10,898,121

 
$
5,167,926

Liabilities
 
—

 
 
—

 
 
—

Net assets
$
1,253,361

 
$
10,898,121

 
$
5,167,926

 
 
 
 
 
 
 
 
 
Net assets
 
 
 
 
 
 
 
 
Applicable to accumulation units:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
$
—

 
$
—

 
$
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
442,890

 
 
—

 
 
—

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity
 
681,803

 
 
9,174,769

 
 
4,452,531

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
107,676

 
 
992,616

 
 
715,395

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
—

 
 
227,245

 
 
—

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
20,992

 
 
503,491

 
 
—

Applicable to contracts in annuitization period:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

Total net assets
$
1,253,361

 
$
10,898,121

 
$
5,167,926

 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at cost
$
1,418,304

 
$
13,658,107

 
$
4,917,034

Shares of mutual funds owned
 
86,738

 
 
433,325

 
 
285,206

Accumulation units outstanding:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
42,414

 
 
—

 
 
—

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity
 
65,452

 
 
483,022

 
 
208,828

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
10,501

 
 
54,379

 
 
34,914

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
—

 
 
27,508

 
 
—

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
2,299

 
 
61,144

 
 
—

Accumulation unit value:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
$
—

 
$
—

 
$
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
10.44

 
 
—

 
 
—

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
10.28

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity
 
10.42

 
 
19.00

 
 
21.32

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
10.25

 
 
18.25

 
 
20.49

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
9.15

 
 
8.26

 
 
—

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
9.13

 
 
8.23

 
 
—

Annuitized units outstanding:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

Annuitized unit value:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 
 
 
 
 

36


Principal Life Insurance Company - Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities (continued)
December 31, 2015
MidCap Class 1 Division
 
Money Market Class 1 Division
 
Money Market Class 2 Division
 
Neuberger Berman AMT Large Cap Value I Class Division
 
Neuberger Berman AMT Mid-Cap Growth Portfolio S Class Division
 
Neuberger Berman AMT Socially Responsive I Class Division
 
Oppenheimer Main Street Small Cap Service Shares Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
339,892,141

 
$
49,380,027

 
$
1,381,070

 
$
4,047,878

 
$
2,745,675

 
$
5,077,342

 
$
561,373

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

$
339,892,141

 
$
49,380,027

 
$
1,381,070

 
$
4,047,878

 
$
2,745,675

 
$
5,077,342

 
$
561,373

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
—

 
 
78,187

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
1

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
1,060,805

 
 
503,449

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
5,878,744

 
 
3,800,180

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
9,135,671

 
 
1,380,058

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
720,565

 
 
233,023

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
202,959,336

 
 
19,630,354

 
 
—

 
 
—

 
 
—

 
 
—

 
 
561,373

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
111,393,797

 
 
21,357,035

 
 
—

 
 
3,830,950

 
 
2,494,015

 
 
4,586,329

 
 
—

 
8,743,223

 
 
2,397,740

 
 
—

 
 
216,928

 
 
208,102

 
 
491,013

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
397,139

 
 
—

 
 
17,172

 
 
—

 
 
—

 
—

 
 
—

 
 
983,931

 
 
—

 
 
26,386

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

$
339,892,141

 
$
49,380,027

 
$
1,381,070

 
$
4,047,878

 
$
2,745,675

 
$
5,077,342

 
$
561,373

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
249,287,542

 
$
49,380,025

 
$
1,381,070

 
$
3,711,522

 
$
2,866,328

 
$
4,026,139

 
$
663,072

 
6,153,007

 
 
49,380,027

 
 
1,381,069

 
 
306,890

 
 
128,603

 
 
236,596

 
 
26,669

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
37,271

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
116,047

 
 
318,285

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
613,690

 
 
2,279,776

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
203,886

 
 
117,008

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
29,693

 
 
22,850

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
2,478,296

 
 
1,479,391

 
 
—

 
 
—

 
 
—

 
 
—

 
 
47,642

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
1,363,494

 
 
1,613,619

 
 
—

 
 
230,223

 
 
260,006

 
 
221,115

 
 
—

 
117,175

 
 
198,350

 
 
—

 
 
13,957

 
 
21,715

 
 
25,344

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
40,305

 
 
—

 
 
1,869

 
 
—

 
 
—

 
—

 
 
—

 
 
100,179

 
 
—

 
 
2,876

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
—

 
 
2.10

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
9.14

 
 
1.58

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
9.58

 
 
1.67

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
44.81

 
 
11.79

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
24.27

 
 
10.22

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
81.89

 
 
13.27

 
 
—

 
 
—

 
 
—

 
 
—

 
 
11.78

 
74.80

 
 
12.12

 
 
—

 
 
—

 
 
—

 
 
—

 
 
11.60

 
81.70

 
 
13.23

 
 
—

 
 
16.64

 
 
9.59

 
 
20.74

 
 
—

 
74.62

 
 
12.09

 
 
—

 
 
15.54

 
 
9.58

 
 
19.37

 
 
—

 
—

 
 
13.23

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
9.85

 
 
—

 
 
9.19

 
 
—

 
 
—

 
—

 
 
—

 
 
9.82

 
 
—

 
 
9.18

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—


37


Principal Life Insurance Company - Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
PIMCO All Asset Administrative Class Division
 
PIMCO All Asset Advisor Class Division
 
PIMCO Commodity Real Return Strategy M Class Division
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at market
$
4,147,238

 
$
—

 
$
12,559

Liabilities
 
—

 
 
—

 
 
—

Net assets
$
4,147,238

 
$
—

 
$
12,559

 
 
 
 
 
 
 
 
 
Net assets
 
 
 
 
 
 
 
 
Applicable to accumulation units:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
$
—

 
$
—

 
$
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity
 
3,839,071

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
308,167

 
 
—

 
 
—

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
—

 
 
—

 
 
2,610

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
—

 
 
—

 
 
9,949

Applicable to contracts in annuitization period:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

Total net assets
$
4,147,238

 
$
—

 
$
12,559

 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at cost
$
5,064,118

 
$
—

 
$
14,240

Shares of mutual funds owned
 
455,740

 
 
—

 
 
1,823

Accumulation units outstanding:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity
 
297,474

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
24,848

 
 
—

 
 
—

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
—

 
 
—

 
 
361

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
—

 
 
—

 
 
1,377

Accumulation unit value:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
$
—

 
$
—

 
$
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity
 
12.91

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
12.40

 
 
—

 
 
—

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
—

 
 
8.77

 
 
7.24

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
—

 
 
8.75

 
 
7.22

Annuitized units outstanding:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

Annuitized unit value:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 
 
 
 
 

38


Principal Life Insurance Company - Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities (continued)
December 31, 2015
PIMCO High Yield Administrative Class Division
 
PIMCO Low Duration Advisor Class Division
 
PIMCO Total Return Administrative Class Division
 
Principal Capital Appreciation Class 1 Division
 
Principal Capital Appreciation Class 2 Division
 
Principal LifeTime Strategic Income Class 1 Division
 
Principal LifeTime 2010 Class 1 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
15,655,710

 
$
360,732

 
$
27,066,926

 
$
116,745,107

 
$
632,233

 
$
17,075,093

 
$
28,520,977

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

$
15,655,710

 
$
360,732

 
$
27,066,926

 
$
116,745,107

 
$
632,233

 
$
17,075,093

 
$
28,520,977

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
43,149

 
 
—

 
 
164,925

 
 
1,118,419

 
—

 
 
1,649

 
 
—

 
 
35,824,794

 
 
—

 
 
2,514,753

 
 
1,609,149

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
14,027,464

 
 
334,637

 
 
25,149,392

 
 
74,356,109

 
 
—

 
 
13,070,595

 
 
24,867,569

 
873,889

 
 
—

 
 
1,387,010

 
 
6,521,055

 
 
—

 
 
1,324,820

 
 
925,840

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
327,005

 
 
11,353

 
 
258,770

 
 
—

 
 
304,204

 
 
—

 
 
—

 
427,352

 
 
13,093

 
 
271,754

 
 
—

 
 
328,029

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

$
15,655,710

 
$
360,732

 
$
27,066,926

 
$
116,745,107

 
$
632,233

 
$
17,075,093

 
$
28,520,977

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
17,309,287

 
$
368,234

 
$
29,371,227

 
$
119,131,396

 
$
643,002

 
$
16,069,538

 
$
24,217,211

 
2,156,434

 
 
35,193

 
 
2,558,311

 
 
5,223,495

 
 
28,556

 
 
1,531,398

 
 
2,341,624

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
2,586

 
 
—

 
 
13,195

 
 
84,413

 
—

 
 
167

 
 
—

 
 
3,665,507

 
 
—

 
 
183,199

 
 
107,566

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
1,044,282

 
 
33,889

 
 
2,023,396

 
 
4,591,100

 
 
—

 
 
954,474

 
 
1,666,748

 
67,443

 
 
—

 
 
116,122

 
 
424,160

 
 
—

 
 
103,557

 
 
66,424

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
34,028

 
 
1,148

 
 
25,778

 
 
—

 
 
29,260

 
 
—

 
 
—

 
44,613

 
 
1,326

 
 
27,158

 
 
—

 
 
31,653

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
16.68

 
 
—

 
 
12.50

 
 
13.25

 
—

 
 
9.88

 
 
—

 
 
9.77

 
 
—

 
 
13.73

 
 
14.96

 
—

 
 
9.84

 
 
—

 
 
9.73

 
 
—

 
 
12.82

 
 
13.97

 
13.44

 
 
9.87

 
 
12.43

 
 
16.20

 
 
—

 
 
13.69

 
 
14.92

 
12.97

 
 
9.84

 
 
11.94

 
 
15.37

 
 
—

 
 
12.79

 
 
13.94

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
9.61

 
 
9.89

 
 
10.04

 
 
—

 
 
10.40

 
 
—

 
 
—

 
9.58

 
 
9.87

 
 
10.00

 
 
—

 
 
10.36

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—


39


Principal Life Insurance Company - Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
Principal LifeTime 2020 Class 1 Division
 
Principal LifeTime 2020 Class 2 Division
 
Principal LifeTime 2030 Class 1 Division
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at market
$
117,717,726

 
$
15,521

 
$
68,801,944

Liabilities
 
—

 
 
—

 
 
—

Net assets
$
117,717,726

 
$
15,521

 
$
68,801,944

 
 
 
 
 
 
 
 
 
Net assets
 
 
 
 
 
 
 
 
Applicable to accumulation units:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
$
—

 
$
—

 
$
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
4,325,988

 
 
—

 
 
2,493,883

 
The Principal Variable Annuity
 
4,572,793

 
 
—

 
 
1,963,519

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity
 
101,559,303

 
 
—

 
 
54,887,357

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
7,259,642

 
 
—

 
 
9,457,185

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
—

 
 
15,521

 
 
—

Applicable to contracts in annuitization period:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

Total net assets
$
117,717,726

 
$
15,521

 
$
68,801,944

 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at cost
$
103,034,284

 
$
17,285

 
$
64,875,235

Shares of mutual funds owned
 
9,313,111

 
 
1,231

 
 
6,008,904

Accumulation units outstanding:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
306,025

 
 
—

 
 
175,417

 
The Principal Variable Annuity
 
278,108

 
 
—

 
 
118,754

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity
 
6,191,329

 
 
—

 
 
3,327,477

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
473,735

 
 
—

 
 
613,707

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
—

 
 
1,654

 
 
—

Accumulation unit value:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
$
—

 
$
—

 
$
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
14.14

 
 
—

 
 
14.22

 
The Principal Variable Annuity
 
16.44

 
 
—

 
 
16.54

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
15.36

 
 
—

 
 
15.45

 
Principal Investment Plus Variable Annuity
 
16.40

 
 
—

 
 
16.50

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
15.32

 
 
—

 
 
15.41

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
—

 
 
9.40

 
 
—

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
—

 
 
9.38

 
 
—

Annuitized units outstanding:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

Annuitized unit value:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 
 
 
 
 

40


Principal Life Insurance Company - Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities (continued)
December 31, 2015
Principal LifeTime 2030 Class 2 Division
 
Principal LifeTime 2040 Class 1 Division
 
Principal LifeTime 2040 Class 2 Division
 
Principal LifeTime 2050 Class 1 Division
 
Principal LifeTime 2050 Class 2 Division
 
Real Estate Securities Class 1 Division
 
Real Estate Securities Class 2 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
16,387

 
$
13,718,518

 
$
494

 
$
8,936,895

 
$
25,451

 
$
81,336,745

 
$
1,732,909

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

$
16,387

 
$
13,718,518

 
$
494

 
$
8,936,895

 
$
25,451

 
$
81,336,745

 
$
1,732,909

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
279,811

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
289,883

 
 
—

 
 
166,083

 
 
—

 
 
205,480

 
 
—

 
—

 
 
809,906

 
 
—

 
 
238,841

 
 
—

 
 
42,199,772

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
11,796,367

 
 
—

 
 
7,988,092

 
 
—

 
 
33,529,848

 
 
—

 
—

 
 
822,362

 
 
—

 
 
543,879

 
 
—

 
 
5,121,834

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
494

 
 
—

 
 
494

 
 
—

 
 
25,451

 
 
—

 
 
880,884

 
15,893

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
852,025

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

$
16,387

 
$
13,718,518

 
$
494

 
$
8,936,895

 
$
25,451

 
$
81,336,745

 
$
1,732,909

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
17,105

 
$
12,506,324

 
$
499

 
$
8,456,711

 
$
28,517

 
$
56,218,746

 
$
1,740,485

 
1,434

 
 
1,013,933

 
 
37

 
 
683,772

 
 
1,950

 
 
3,663,817

 
 
77,744

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
55,487

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
19,907

 
 
—

 
 
11,383

 
 
—

 
 
10,940

 
 
—

 
—

 
 
46,983

 
 
—

 
 
13,767

 
 
—

 
 
789,204

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
685,948

 
 
—

 
 
461,545

 
 
—

 
 
628,581

 
 
—

 
—

 
 
51,188

 
 
—

 
 
33,638

 
 
—

 
 
105,130

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
53

 
 
—

 
 
53

 
 
—

 
 
2,735

 
 
—

 
 
75,237

 
1,704

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
73,006

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
5.04

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
14.56

 
 
—

 
 
14.59

 
 
—

 
 
18.78

 
 
—

 
—

 
 
17.24

 
 
—

 
 
17.35

 
 
—

 
 
53.47

 
 
—

 
—

 
 
16.10

 
 
—

 
 
16.21

 
 
—

 
 
48.84

 
 
—

 
—

 
 
17.20

 
 
—

 
 
17.31

 
 
—

 
 
53.34

 
 
—

 
—

 
 
16.07

 
 
—

 
 
16.17

 
 
—

 
 
48.72

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
9.34

 
 
—

 
 
9.32

 
 
—

 
 
9.31

 
 
—

 
 
11.71

 
9.33

 
 
—

 
 
9.31

 
 
—

 
 
9.29

 
 
—

 
 
11.67

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—


41


Principal Life Insurance Company - Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
Rydex Basic Materials Division
 
Rydex Commodities Strategy Division
 
Rydex NASDAQ 100 Division
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at market
$
—

 
$
76,970

 
$
646,151

Liabilities
 
—

 
 
—

 
 
—

Net assets
$
—

 
$
76,970

 
$
646,151

 
 
 
 
 
 
 
 
 
Net assets
 
 
 
 
 
 
 
 
Applicable to accumulation units:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
$
—

 
$
—

 
$
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
—

 
 
22,159

 
 
—

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity
 
—

 
 
41,611

 
 
—

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
—

 
 
6,956

 
 
273,874

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
—

 
 
6,244

 
 
372,277

Applicable to contracts in annuitization period:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

Total net assets
$
—

 
$
76,970

 
$
646,151

 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at cost
$
—

 
$
99,233

 
$
656,774

Shares of mutual funds owned
 
—

 
 
16,238

 
 
18,915

Accumulation units outstanding:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
—

 
 
3,445

 
 
—

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity
 
—

 
 
6,475

 
 
—

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
—

 
 
1,501

 
 
24,889

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
—

 
 
1,352

 
 
33,939

Accumulation unit value:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
$
—

 
$
—

 
$
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
—

 
 
6.43

 
 
—

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
6.41

 
 
—

 
Principal Investment Plus Variable Annuity
 
—

 
 
6.43

 
 
—

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
—

 
 
6.40

 
 
—

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
7.71

 
 
4.63

 
 
11.00

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
7.70

 
 
4.62

 
 
10.97

Annuitized units outstanding:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

Annuitized unit value:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 
 
 
 
 

42


Principal Life Insurance Company - Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities (continued)
December 31, 2015
SAM Balanced Portfolio Class 1 Division
 
SAM Balanced Portfolio Class 2 Division
 
SAM Conservative Balanced Portfolio Class 1 Division
 
SAM Conservative Balanced Portfolio Class 2 Division
 
SAM Conservative Growth Portfolio Class 1 Division
 
SAM Conservative Growth Portfolio Class 2 Division
 
SAM Flexible Income Portfolio Class 1 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
598,643,366

 
$
3,759,160

 
$
150,875,233

 
$
3,002,012

 
$
100,958,357

 
$
5,521,966

 
$
170,645,344

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

$
598,643,366

 
$
3,759,160

 
$
150,875,233

 
$
3,002,012

 
$
100,958,357

 
$
5,521,966

 
$
170,645,344

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
416,925

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
1,932,648

 
 
—

 
 
1,192,188

 
 
—

 
 
1,567,589

 
 
—

 
 
1,766,638

 
58,536,316

 
 
—

 
 
16,976,209

 
 
—

 
 
14,241,962

 
 
—

 
 
30,080,877

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
484,878,461

 
 
—

 
 
116,116,527

 
 
—

 
 
70,813,862

 
 
—

 
 
120,161,456

 
52,879,016

 
 
—

 
 
16,590,309

 
 
—

 
 
14,334,944

 
 
—

 
 
18,636,373

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
2,048,821

 
 
—

 
 
1,577,660

 
 
—

 
 
4,535,561

 
 
—

 
—

 
 
1,710,339

 
 
—

 
 
1,424,352

 
 
—

 
 
986,405

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

$
598,643,366

 
$
3,759,160

 
$
150,875,233

 
$
3,002,012

 
$
100,958,357

 
$
5,521,966

 
$
170,645,344

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
599,406,714

 
$
4,126,690

 
$
155,706,422

 
$
3,237,563

 
$
100,280,719

 
$
6,095,563

 
$
178,318,438

 
40,751,760

 
 
258,362

 
 
13,096,808

 
 
263,104

 
 
5,862,855

 
 
324,440

 
 
13,907,526

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
208,794

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
136,816

 
 
—

 
 
85,284

 
 
—

 
 
113,626

 
 
—

 
 
126,214

 
4,258,176

 
 
—

 
 
1,247,874

 
 
—

 
 
1,060,832

 
 
—

 
 
2,208,368

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
35,357,350

 
 
—

 
 
8,556,153

 
 
—

 
 
5,287,231

 
 
—

 
 
8,842,865

 
4,061,997

 
 
—

 
 
1,287,800

 
 
—

 
 
1,127,507

 
 
—

 
 
1,444,763

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
208,668

 
 
—

 
 
160,459

 
 
—

 
 
462,615

 
 
—

 
—

 
 
174,754

 
 
—

 
 
145,331

 
 
—

 
 
100,934

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
2.00

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
14.13

 
 
—

 
 
13.98

 
 
—

 
 
13.80

 
 
—

 
 
14.00

 
13.75

 
 
—

 
 
13.60

 
 
—

 
 
13.43

 
 
—

 
 
13.62

 
13.05

 
 
—

 
 
12.91

 
 
—

 
 
12.74

 
 
—

 
 
12.93

 
13.71

 
 
—

 
 
13.57

 
 
—

 
 
13.39

 
 
—

 
 
13.59

 
13.02

 
 
—

 
 
12.88

 
 
—

 
 
12.71

 
 
—

 
 
12.90

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
9.82

 
 
—

 
 
9.83

 
 
—

 
 
9.80

 
 
—

 
—

 
 
9.79

 
 
—

 
 
9.80

 
 
—

 
 
9.77

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—


43


Principal Life Insurance Company - Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
SAM Flexible Income Portfolio Class 2 Division
 
SAM Strategic Growth Portfolio Class 1 Division
 
SAM Strategic Growth Portfolio Class 2 Division
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at market
$
4,421,092

 
$
66,772,764

 
$
1,650,363

Liabilities
 
—

 
 
—

 
 
—

Net assets
$
4,421,092

 
$
66,772,764

 
$
1,650,363

 
 
 
 
 
 
 
 
 
Net assets
 
 
 
 
 
 
 
 
Applicable to accumulation units:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
$
—

 
$
—

 
$
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
910,088

 
 
—

 
The Principal Variable Annuity
 
—

 
 
8,451,846

 
 
—

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity
 
—

 
 
43,391,402

 
 
—

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
—

 
 
14,019,428

 
 
—

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
1,318,346

 
 
—

 
 
1,321,784

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
3,102,746

 
 
—

 
 
328,579

Applicable to contracts in annuitization period:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

Total net assets
$
4,421,092

 
$
66,772,764

 
$
1,650,363

 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at cost
$
4,751,648

 
$
66,759,153

 
$
1,835,163

Shares of mutual funds owned
 
363,278

 
 
3,570,736

 
 
89,209

Accumulation units outstanding:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
66,311

 
 
—

 
The Principal Variable Annuity
 
—

 
 
632,828

 
 
—

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity
 
—

 
 
3,256,648

 
 
—

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
—

 
 
1,108,442

 
 
—

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
135,070

 
 
—

 
 
135,062

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
318,909

 
 
—

 
 
33,683

Accumulation unit value:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
$
—

 
$
—

 
$
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
13.73

 
 
—

 
The Principal Variable Annuity
 
—

 
 
13.36

 
 
—

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
12.68

 
 
—

 
Principal Investment Plus Variable Annuity
 
—

 
 
13.32

 
 
—

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
—

 
 
12.65

 
 
—

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
9.76

 
 
—

 
 
9.79

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
9.73

 
 
—

 
 
9.76

Annuitized units outstanding:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

Annuitized unit value:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 
 
 
 
 

44


Principal Life Insurance Company - Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities (continued)
December 31, 2015
Short-Term Income Class 1 Division
 
Short-Term Income Class 2 Division
 
SmallCap Blend Class 1 Division
 
SmallCap Blend Class 2 Division
 
T. Rowe Price Blue Chip Growth Portfolio II Division
 
T. Rowe Price Health Sciences Portfolio II Division
 
Templeton Global Bond VIP Class 4 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
108,511,943

 
$
774,746

 
$
116,458,571

 
$
785,090

 
$
16,983,602

 
$
35,402,743

 
$
1,072,128

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

$
108,511,943

 
$
774,746

 
$
116,458,571

 
$
785,090

 
$
16,983,602

 
$
35,402,743

 
$
1,072,128

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
546,419

 
 
—

 
 
—

 
 
—

 
 
—

 
1,468,954

 
 
—

 
 
3,903,302

 
 
—

 
 
—

 
 
—

 
 
—

 
68,328

 
 
—

 
 
298,197

 
 
—

 
 
—

 
 
—

 
 
—

 
17,559,325

 
 
—

 
 
62,765,888

 
 
—

 
 
—

 
 
—

 
 
31,673

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
84,894,341

 
 
—

 
 
45,054,118

 
 
—

 
 
14,963,431

 
 
31,457,011

 
 
233,963

 
4,520,995

 
 
—

 
 
3,890,647

 
 
—

 
 
2,020,171

 
 
3,945,732

 
 
9,459

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
327,906

 
 
—

 
 
602,345

 
 
—

 
 
—

 
 
330,362

 
—

 
 
446,840

 
 
—

 
 
182,745

 
 
—

 
 
—

 
 
466,671

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

$
108,511,943

 
$
774,746

 
$
116,458,571

 
$
785,090

 
$
16,983,602

 
$
35,402,743

 
$
1,072,128

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
110,086,761

 
$
790,937

 
$
118,856,907

 
$
865,129

 
$
12,413,747

 
$
28,355,171

 
$
1,155,151

 
42,721,237

 
 
306,223

 
 
8,594,728

 
 
58,069

 
 
759,213

 
 
939,813

 
 
66,263

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
252,913

 
 
—

 
 
—

 
 
—

 
 
—

 
123,512

 
 
—

 
 
145,841

 
 
—

 
 
—

 
 
—

 
 
—

 
5,788

 
 
—

 
 
18,166

 
 
—

 
 
—

 
 
—

 
 
—

 
1,520,887

 
 
—

 
 
3,070,696

 
 
—

 
 
—

 
 
—

 
 
3,377

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
7,370,859

 
 
—

 
 
2,209,523

 
 
—

 
 
624,575

 
 
639,456

 
 
24,957

 
409,642

 
 
—

 
 
208,915

 
 
—

 
 
90,276

 
 
85,870

 
 
1,013

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
32,956

 
 
—

 
 
65,937

 
 
—

 
 
—

 
 
35,850

 
—

 
 
45,053

 
 
—

 
 
20,040

 
 
—

 
 
—

 
 
50,805

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
2.16

 
 
—

 
 
—

 
 
—

 
 
—

 
11.89

 
 
—

 
 
26.76

 
 
—

 
 
—

 
 
—

 
 
—

 
11.81

 
 
—

 
 
16.41

 
 
—

 
 
—

 
 
—

 
 
—

 
11.55

 
 
—

 
 
20.44

 
 
—

 
 
—

 
 
—

 
 
9.38

 
11.06

 
 
—

 
 
18.67

 
 
—

 
 
—

 
 
—

 
 
9.35

 
11.52

 
 
—

 
 
20.39

 
 
—

 
 
23.96

 
 
49.19

 
 
9.37

 
11.04

 
 
—

 
 
18.62

 
 
—

 
 
22.38

 
 
45.95

 
 
9.34

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
9.95

 
 
—

 
 
9.14

 
 
—

 
 
—

 
 
9.22

 
—

 
 
9.92

 
 
—

 
 
9.12

 
 
—

 
 
—

 
 
9.19

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—


45


Principal Life Insurance Company - Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
Templeton Growth VIP Class 2 Division
 
The Merger Fund Division
 
Van Eck Global Hard Assets Class S Division
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at market
$
869,180

 
$
—

 
$
5,127,012

Liabilities
 
—

 
 
—

 
 
—

Net assets
$
869,180

 
$
—

 
$
5,127,012

 
 
 
 
 
 
 
 
 
Net assets
 
 
 
 
 
 
 
 
Applicable to accumulation units:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
$
—

 
$
—

 
$
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
869,180

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
—

 
 
—

 
 
944,103

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity
 
—

 
 
—

 
 
3,345,051

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
—

 
 
—

 
 
611,017

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
—

 
 
—

 
 
203,980

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
—

 
 
—

 
 
22,861

Applicable to contracts in annuitization period:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

Total net assets
$
869,180

 
$
—

 
$
5,127,012

 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at cost
$
774,578

 
$
—

 
$
8,420,615

Shares of mutual funds owned
 
65,254

 
 
—

 
 
313,579

Accumulation units outstanding:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
44,339

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
—

 
 
—

 
 
118,518

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
—

 
 
—

 
Principal Investment Plus Variable Annuity
 
—

 
 
—

 
 
420,943

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
—

 
 
—

 
 
80,015

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
—

 
 
—

 
 
40,836

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
—

 
 
—

 
 
4,591

Accumulation unit value:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
$
—

 
$
—

 
$
—

 
Pension Builder Plus
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
Personal Variable
 
—

 
 
—

 
 
—

 
Premier Variable
 
—

 
 
—

 
 
—

 
Principal Freedom Variable Annuity
 
19.60

 
 
—

 
 
—

 
Principal Freedom Variable Annuity 2
 
—

 
 
—

 
 
—

 
The Principal Variable Annuity
 
—

 
 
—

 
 
7.97

 
The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
 
—

 
 
7.65

 
Principal Investment Plus Variable Annuity
 
—

 
 
—

 
 
7.95

 
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
—

 
 
—

 
 
7.64

 
Principal Lifetime Income Solutions
 
—

 
 
—

 
 
—

 
Principal Pivot Series Variable Annuity
 
—

 
 
9.65

 
 
5.00

 
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
—

 
 
9.64

 
 
4.98

Annuitized units outstanding:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

Annuitized unit value:
 
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
 
—

 
 
—

 
Pension Builder Plus – Rollover IRA
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 
 
 
 
 

46





























(This page left intentionally blank)


47


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AllianceBernstein Small Cap Growth Class A Division
 
AllianceBernstein Small/Mid Cap Value Class A Division
 
Alps/Red Rocks Listed Private Equity Class III Division (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment income (loss)
 
 
 
 
 
 
 
 
 
Income
 
 
 
 
 
 
 
 
 
 
Dividends
$
—

 
$
21,556

 
$
16

 
 
 
 
 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
 
 
 
Mortality and expense risks
 
59,684

 
 
32,849

 
 
81

 
 
Administrative charges
 
7,163

 
 
3,662

 
 
10

 
 
Separate account rider charges
 
4,294

 
 
2,978

 
 
—

 
Net investment income (loss)
 
(71,141)

 
 
(17,933)

 
 
(75)

 
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on investments
 
 
 
 
 
 
 
 
 
Realized gains (losses) on sale of fund shares
 
159,590

 
 
(34,413)

 
 
(6)

 
Capital gains distributions
 
793,370

 
 
438,156

 
 
11

 
Total realized gains (losses) on investments
 
952,960

 
 
403,743

 
 
5

 
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized appreciation or depreciation of investments
 
(980,379)

 
 
(586,927)

 
 
(992)

 
 
 
 
 
 
 
 
 
 
 
 
Net gains (losses) on investments
 
(98,560)

 
 
(201,117)

 
 
(1,062)

 
 
 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(98,560)

 
$
(201,117)

 
$
(1,062)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)    Commenced operations May 18, 2015.

See accompanying notes.
 
 
 
 
 

48


Principal Life Insurance Company
Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Century VP Capital Appreciation Class I Division
 
American Century VP Income & Growth Class I Division
 
American Century VP Inflation Protection Class II Division
 
American Century VP MidCap Value Class II Division
 
American Century VP Ultra Class I Division
 
American Century VP Ultra Class II Division
 
American Century VP Value Class II Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—

 
$
269,283

 
$
1,180,345

 
$
89,041

 
$
16,224

 
$
127,469

 
$
330,686

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
33,123

 
 
150,225

 
 
727,438

 
 
74,354

 
 
45,641

 
 
513,271

 
 
209,906

 
3,975

 
 
4,966

 
 
87,290

 
 
7,641

 
 
1,826

 
 
61,600

 
 
8,658

 
2,248

 
 
5

 
 
24,857

 
 
4,541

 
 
26

 
 
20,987

 
 
27

 
(39,346)

 
 
114,087

 
 
340,760

 
 
2,505

 
 
(31,269)

 
 
(468,389)

 
 
112,095

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
48,492

 
 
693,175

 
 
(1,104,330)

 
 
230,184

 
 
363,626

 
 
5,374,138

 
 
499,170

 
170,538

 
 
1,141,341

 
 
—

 
 
245,794

 
 
349,388

 
 
4,209,146

 
 
—

 
219,030

 
 
1,834,516

 
 
(1,104,330)

 
 
475,978

 
 
713,014

 
 
9,583,284

 
 
499,170

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(169,766)

 
 
(2,846,462)

 
 
(1,423,679)

 
 
(680,016)

 
 
(500,969)

 
 
(7,134,566)

 
 
(1,501,643)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
9,918

 
 
(897,859)

 
 
(2,187,249)

 
 
(201,533)

 
 
180,776

 
 
1,980,329

 
 
(890,378)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
9,918

 
$
(897,859)

 
$
(2,187,249)

 
$
(201,533)

 
$
180,776

 
$
1,980,329

 
$
(890,378)


49


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Funds Insurance Series Asset Allocation Fund Class 4 Division (1)
 
American Funds Insurance Series Blue Chip Income & Growth Fund Class 4 Division
 
American Funds Insurance Series Global Small Capitalization Fund Class 2 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment income (loss)
 
 
 
 
 
 
 
 
 
Income
 
 
 
 
 
 
 
 
 
 
Dividends
$
9,848

 
$
17,120

 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
 
 
 
Mortality and expense risks
 
1,040

 
 
7,428

 
 
5,318

 
 
Administrative charges
 
146

 
 
990

 
 
375

 
 
Separate account rider charges
 
—

 
 
—

 
 
3

 
Net investment income (loss)
 
8,662

 
 
8,702

 
 
(5,696)

 
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on investments
 
 
 
 
 
 
 
 
 
Realized gains (losses) on sale of fund shares
 
8

 
 
(12,710)

 
 
(8,748)

 
Capital gains distributions
 
26

 
 
77,418

 
 
21,077

 
Total realized gains (losses) on investments
 
34

 
 
64,708

 
 
12,329

 
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized appreciation or depreciation of investments
 
(1,616)

 
 
(124,673)

 
 
(83,834)

 
 
 
 
 
 
 
 
 
 
 
 
Net gains (losses) on investments
 
7,080

 
 
(51,263)

 
 
(77,201)

 
 
 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
7,080

 
$
(51,263)

 
$
(77,201)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)    Commenced operations May 18, 2015.

See accompanying notes.
 
 
 
 
 

50


Principal Life Insurance Company
Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Funds Insurance Series Global Small Capitalization Fund Class 4 Division
 
American Funds Insurance Series High-Income Bond Class 2 Division
 
American Funds Insurance Series Managed Risk Asset Allocation Fund Class P2 Division
 
American Funds Insurance Series Managed Risk Growth Fund Class P2 Division
 
American Funds Insurance Series Managed Risk International Fund Class P2 Division
 
American Funds Insurance Series New World Fund Class 2 Division
 
American Funds Insurance Series New World Fund Class 4 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—

 
$
21,884

 
$
553

 
$
—

 
$
7

 
$
1,893

 
$
1,581

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
766

 
 
3,932

 
 
383

 
 
1,273

 
 
354

 
 
3,476

 
 
2,562

 
106

 
 
158

 
 
50

 
 
170

 
 
51

 
 
206

 
 
355

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
2

 
 
—

 
(872)

 
 
17,794

 
 
120

 
 
(1,443)

 
 
(398)

 
 
(1,791)

 
 
(1,336)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
24

 
 
(23,602)

 
 
236

 
 
379

 
 
1

 
 
(14,668)

 
 
(1,659)

 
4,940

 
 
—

 
 
560

 
 
—

 
 
—

 
 
13,029

 
 
12,371

 
4,964

 
 
(23,602)

 
 
796

 
 
379

 
 
1

 
 
(1,639)

 
 
10,712

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(11,033)

 
 
(31,252)

 
 
(2,576)

 
 
(2,464)

 
 
(2,825)

 
 
(18,268)

 
 
(34,555)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(6,941)

 
 
(37,060)

 
 
(1,660)

 
 
(3,528)

 
 
(3,222)

 
 
(21,698)

 
 
(25,179)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(6,941)

 
$
(37,060)

 
$
(1,660)

 
$
(3,528)

 
$
(3,222)

 
$
(21,698)

 
$
(25,179)


51


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balanced Class 1 Division
 
BlackRock Global Allocation Class III Division (1)
 
BlackRock iShares Alternative Strategies Class III Division (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment income (loss)
 
 
 
 
 
 
 
 
 
Income
 
 
 
 
 
 
 
 
 
 
Dividends
$
575,379

 
$
3,762

 
$
3,786

 
 
 
 
 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
 
 
 
Mortality and expense risks
 
384,098

 
 
2,228

 
 
544

 
 
Administrative charges
 
14,749

 
 
243

 
 
61

 
 
Separate account rider charges
 
75

 
 
9

 
 
18

 
Net investment income (loss)
 
176,457

 
 
1,282

 
 
3,163

 
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on investments
 
 
 
 
 
 
 
 
 
Realized gains (losses) on sale of fund shares
 
1,391,909

 
 
(133)

 
 
(17)

 
Capital gains distributions
 
2,208,798

 
 
27,557

 
 
—

 
Total realized gains (losses) on investments
 
3,600,707

 
 
27,424

 
 
(17)

 
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized appreciation or depreciation of investments
 
(3,988,979)

 
 
(40,129)

 
 
(5,064)

 
 
 
 
 
 
 
 
 
 
 
 
Net gains (losses) on investments
 
(211,815)

 
 
(11,423)

 
 
(1,918)

 
 
 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(211,815)

 
$
(11,423)

 
$
(1,918)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)    Commenced operations May 18, 2015.

See accompanying notes.
 
 
 
 
 

52


Principal Life Insurance Company
Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
BlackRock iShares Dynamic Allocation Class III
Division (1)
 
BlackRock iShares Dynamic Fixed Income Class III Division (1)
 
BlackRock iShares Equity Appreciation Class III Division (1)
 
BlackRock Value Opportunities Class III Division (1)
 
Bond & Mortgage Securities Class 1 Division
 
Bond & Mortgage Securities Class 2 Division (1)
 
Calvert EAFE International Index Class F Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
1,082

 
$
2,038

 
$
1,864

 
$
1

 
$
5,123,271

 
$
338

 
$
5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
145

 
 
389

 
 
302

 
 
1

 
 
2,042,897

 
 
50

 
 
132

 
17

 
 
39

 
 
33

 
 
—

 
 
167,515

 
 
7

 
 
16

 
22

 
 
—

 
 
29

 
 
—

 
 
52,179

 
 
—

 
 
—

 
898

 
 
1,610

 
 
1,500

 
 
—

 
 
2,860,680

 
 
281

 
 
(143)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(6)

 
 
30

 
 
(200)

 
 
—

 
 
2,799,443

 
 
(382)

 
 
(26)

 
—

 
 
—

 
 
—

 
 
60

 
 
—

 
 
—

 
 
—

 
(6)

 
 
30

 
 
(200)

 
 
60

 
 
2,799,443

 
 
(382)

 
 
(26)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(2,151)

 
 
(3,180)

 
 
(7,191)

 
 
(75)

 
 
(8,435,344)

 
 
(227)

 
 
(677)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1,259)

 
 
(1,540)

 
 
(5,891)

 
 
(15)

 
 
(2,775,221)

 
 
(328)

 
 
(846)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(1,259)

 
$
(1,540)

 
$
(5,891)

 
$
(15)

 
$
(2,775,221)

 
$
(328)

 
$
(846)


53


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Calvert Russell 2000 Small Cap Index Class F Division
 
Calvert S&P MidCap 400 Index Class F Division
 
ClearBridge Small Cap Growth Series II Division (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment income (loss)
 
 
 
 
 
 
 
 
 
Income
 
 
 
 
 
 
 
 
 
 
Dividends
$
—

 
$
—

 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
 
 
 
Mortality and expense risks
 
831

 
 
3,750

 
 
43

 
 
Administrative charges
 
118

 
 
516

 
 
5

 
 
Separate account rider charges
 
—

 
 
—

 
 
—

 
Net investment income (loss)
 
(949)

 
 
(4,266)

 
 
(48)

 
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on investments
 
 
 
 
 
 
 
 
 
Realized gains (losses) on sale of fund shares
 
(488)

 
 
(3,915)

 
 
(4)

 
Capital gains distributions
 
3,004

 
 
8,056

 
 
130

 
Total realized gains (losses) on investments
 
2,516

 
 
4,141

 
 
126

 
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized appreciation or depreciation of investments
 
(10,338)

 
 
(39,192)

 
 
(514)

 
 
 
 
 
 
 
 
 
 
 
 
Net gains (losses) on investments
 
(8,771)

 
 
(39,317)

 
 
(436)

 
 
 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(8,771)

 
$
(39,317)

 
$
(436)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)    Commenced operations May 18, 2015.
(2)    Represented the operations of DWS Alternative Asset Allocation Class B Division until May 18, 2015.
(3)    Represented the operations of DWS Equity 500 Index Class B2 Division until May 18, 2015.
(4)    Represented the operations of DWS Small Mid Cap Value Class B Division until May 18, 2015.

See accompanying notes.
 
 
 
 
 

54


Principal Life Insurance Company
Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Columbia Limited Duration Credit Class 2 Division (1)
 
Columbia Small Cap Value Class 2 Division (1)
 
Delaware Limited Term Diversified Income Service Class Division (1)
 
Delaware Small Cap Value Service Class Division
 
Deutsche Alternative Asset Allocation Class B Division (2)
 
Deutsche Equity 500 Index Class B2 Division (3)
 
Deutsche Small Mid Cap Value Class B Division (4)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
—

 
$
290

 
$
903

 
$
3,975

 
$
—

 
$
6,590

 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
542

 
 
452

 
 
887

 
 
11,723

 
 
228

 
 
5,791

 
 
9,917

 
46

 
 
54

 
 
84

 
 
1,380

 
 
27

 
 
767

 
 
1,163

 
12

 
 
—

 
 
21

 
 
1,167

 
 
—

 
 
—

 
 
758

 
(600)

 
 
(216)

 
 
(89)

 
 
(10,295)

 
 
(255)

 
 
32

 
 
(11,838)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(17)

 
 
(181)

 
 
(1)

 
 
(28,898)

 
 
(43)

 
 
(573)

 
 
9,635

 
—

 
 
3,349

 
 
—

 
 
89,194

 
 
—

 
 
23,615

 
 
58,836

 
(17)

 
 
3,168

 
 
(1)

 
 
60,296

 
 
(43)

 
 
23,042

 
 
68,471

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(2,769)

 
 
(9,429)

 
 
(1,282)

 
 
(143,899)

 
 
(1,747)

 
 
(31,577)

 
 
(104,085)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(3,386)

 
 
(6,477)

 
 
(1,372)

 
 
(93,898)

 
 
(2,045)

 
 
(8,503)

 
 
(47,452)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(3,386)

 
$
(6,477)

 
$
(1,372)

 
$
(93,898)

 
$
(2,045)

 
$
(8,503)

 
$
(47,452)


55


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diversified Balanced Class 2 Division
 
Diversified Balanced Managed Volatility Class 2 Division
 
Diversified Growth Class 2 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment income (loss)
 
 
 
 
 
 
 
 
 
Income
 
 
 
 
 
 
 
 
 
 
Dividends
$
10,359,498

 
$
1,010,519

 
$
31,926,815

 
 
 
 
 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
 
 
 
Mortality and expense risks
 
12,964,661

 
 
1,480,644

 
 
38,606,793

 
 
Administrative charges
 
1,555,941

 
 
177,738

 
 
4,633,356

 
 
Separate account rider charges
 
483,161

 
 
31,967

 
 
1,238,415

 
Net investment income (loss)
 
(4,644,265)

 
 
(679,830)

 
 
(12,551,749)

 
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on investments
 
 
 
 
 
 
 
 
 
Realized gains (losses) on sale of fund shares
 
13,350,970

 
 
374,672

 
 
12,287,419

 
Capital gains distributions
 
11,596,346

 
 
888,700

 
 
39,243,376

 
Total realized gains (losses) on investments
 
24,947,316

 
 
1,263,372

 
 
51,530,795

 
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized appreciation or depreciation of investments
 
(33,963,056)

 
 
(2,817,972)

 
 
(82,522,145)

 
 
 
 
 
 
 
 
 
 
 
 
Net gains (losses) on investments
 
(13,660,005)

 
 
(2,234,430)

 
 
(43,543,099)

 
 
 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(13,660,005)

 
$
(2,234,430)

 
$
(43,543,099)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)    Commenced operations May 18, 2015.

See accompanying notes.
 
 
 
 
 

56


Principal Life Insurance Company
Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diversified Growth Managed Volatility Class 2 Division
 
Diversified Income Class 2 Division
 
Diversified International Class 1 Division
 
Diversified International Class 2 Division
 
Dreyfus IP MidCap Stock Service Shares Division (1)
 
Dreyfus Investment Portfolio Technology Growth Service Shares Division
 
Equity Income Class 1 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
2,224,735

 
$
1,446,911

 
$
3,741,029

 
$
4,610

 
$
—

 
$
—

 
$
5,642,279

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,622,693

 
 
2,300,635

 
 
1,843,411

 
 
1,497

 
 
126

 
 
70,633

 
 
2,929,315

 
314,833

 
 
276,108

 
 
122,361

 
 
210

 
 
16

 
 
8,477

 
 
298,120

 
88,217

 
 
55,498

 
 
32,017

 
 
—

 
 
—

 
 
6,118

 
 
87,762

 
(801,008)

 
 
(1,185,330)

 
 
1,743,240

 
 
2,903

 
 
(142)

 
 
(85,228)

 
 
2,327,082

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
338,877

 
 
2,739,573

 
 
2,833,709

 
 
197

 
 
(4)

 
 
198,732

 
 
18,361,241

 
2,049,847

 
 
1,285,472

 
 
—

 
 
—

 
 
—

 
 
553,356

 
 
—

 
2,388,724

 
 
4,025,045

 
 
2,833,709

 
 
197

 
 
(4)

 
 
752,088

 
 
18,361,241

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(5,771,107)

 
 
(5,329,705)

 
 
(6,432,512)

 
 
(17,869)

 
 
(101)

 
 
(450,567)

 
 
(32,719,713)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(4,183,391)

 
 
(2,489,990)

 
 
(1,855,563)

 
 
(14,769)

 
 
(247)

 
 
216,293

 
 
(12,031,390)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(4,183,391)

 
$
(2,489,990)

 
$
(1,855,563)

 
$
(14,769)

 
$
(247)

 
$
216,293

 
$
(12,031,390)


57


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity Income Class 2 Division
 
Fidelity VIP Contrafund Service Class Division
 
Fidelity VIP Contrafund Service Class 2 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment income (loss)
 
 
 
 
 
 
 
 
 
Income
 
 
 
 
 
 
 
 
 
 
Dividends
$
23,115

 
$
409,566

 
$
426,206

 
 
 
 
 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
 
 
 
Mortality and expense risks
 
7,909

 
 
573,291

 
 
671,763

 
 
Administrative charges
 
1,055

 
 
22,934

 
 
80,737

 
 
Separate account rider charges
 
—

 
 
170

 
 
31,077

 
Net investment income (loss)
 
14,151

 
 
(186,829)

 
 
(357,371)

 
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on investments
 
 
 
 
 
 
 
 
 
Realized gains (losses) on sale of fund shares
 
(706)

 
 
1,754,019

 
 
1,415,179

 
Capital gains distributions
 
—

 
 
4,198,838

 
 
4,916,370

 
Total realized gains (losses) on investments
 
(706)

 
 
5,952,857

 
 
6,331,549

 
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized appreciation or depreciation of investments
 
(73,132)

 
 
(6,027,355)

 
 
(6,432,389)

 
 
 
 
 
 
 
 
 
 
 
 
Net gains (losses) on investments
 
(59,687)

 
 
(261,327)

 
 
(458,211)

 
 
 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(59,687)

 
$
(261,327)

 
$
(458,211)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 
 

58


Principal Life Insurance Company
Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fidelity VIP Equity-Income Service Class 2 Division
 
Fidelity VIP Growth Service Class Division
 
Fidelity VIP Growth Service Class 2 Division
 
Fidelity VIP Mid Cap Service Class Division
 
Fidelity VIP Mid Cap Service Class 2 Division
 
Fidelity VIP Overseas Service Class 2 Division
 
Franklin Global Real Estate VIP Class 2 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
991,709

 
$
23,046

 
$
3,244

 
$
294

 
$
51,141

 
$
379,014

 
$
12,948

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
437,643

 
 
184,710

 
 
123,905

 
 
690

 
 
239,690

 
 
443,553

 
 
3,665

 
28,849

 
 
7,389

 
 
14,870

 
 
—

 
 
28,902

 
 
53,200

 
 
469

 
10,031

 
 
21

 
 
8,746

 
 
—

 
 
12,750

 
 
22,427

 
 
1

 
515,186

 
 
(169,074)

 
 
(144,277)

 
 
(396)

 
 
(230,201)

 
 
(140,166)

 
 
8,813

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
408,345

 
 
879,451

 
 
888,596

 
 
(55)

 
 
343,214

 
 
3,602,584

 
 
(3,729)

 
3,419,201

 
 
466,626

 
 
295,090

 
 
8,433

 
 
2,178,831

 
 
33,541

 
 
—

 
3,827,546

 
 
1,346,077

 
 
1,183,686

 
 
8,378

 
 
2,522,045

 
 
3,636,125

 
 
(3,729)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(6,251,868)

 
 
(336,213)

 
 
(541,150)

 
 
(9,712)

 
 
(2,950,636)

 
 
(2,528,939)

 
 
(16,233)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1,909,136)

 
 
840,790

 
 
498,259

 
 
(1,730)

 
 
(658,792)

 
 
967,020

 
 
(11,149)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(1,909,136)

 
$
840,790

 
$
498,259

 
$
(1,730)

 
$
(658,792)

 
$
967,020

 
$
(11,149)


59


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Franklin Rising Dividends VIP Class 4 Division
 
Franklin Small Cap Value VIP Class 2 Division
 
Goldman Sachs VIT Mid Cap Value Institutional Shares Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment income (loss)
 
 
 
 
 
 
 
 
 
Income
 
 
 
 
 
 
 
 
 
 
Dividends
$
5,291

 
$
21,099

 
$
65,159

 
 
 
 
 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
 
 
 
Mortality and expense risks
 
3,990

 
 
42,363

 
 
214,359

 
 
Administrative charges
 
518

 
 
4,888

 
 
25,534

 
 
Separate account rider charges
 
—

 
 
2,423

 
 
10,338

 
Net investment income (loss)
 
783

 
 
(28,575)

 
 
(185,072)

 
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on investments
 
 
 
 
 
 
 
 
 
Realized gains (losses) on sale of fund shares
 
(3,279)

 
 
106,243

 
 
257,354

 
Capital gains distributions
 
38,445

 
 
485,251

 
 
1,173,232

 
Total realized gains (losses) on investments
 
35,166

 
 
591,494

 
 
1,430,586

 
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized appreciation or depreciation of investments
 
(53,955)

 
 
(872,202)

 
 
(3,039,327)

 
 
 
 
 
 
 
 
 
 
 
 
Net gains (losses) on investments
 
(18,006)

 
 
(309,283)

 
 
(1,793,813)

 
 
 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(18,006)

 
$
(309,283)

 
$
(1,793,813)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)    Commenced operations May 18, 2015.

See accompanying notes.
 
 
 
 
 

60


Principal Life Insurance Company
Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Goldman Sachs VIT Mid Cap Value Service Shares Division
 
Goldman Sachs VIT Multi-Strategy Alternatives Portfolio Service Shares Division (1)
 
Goldman Sachs VIT Small Cap Equity Insights Institutional Shares Division
 
Goldman Sachs VIT Small Cap Equity Insights Service Shares Division
 
Government & High Quality Bond Class 1 Division
 
Government & High Quality Bond Class 2 Division
 
Guggenheim Floating Rate Strategies Series F Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
583

 
$
247

 
$
19,045

 
$
32

 
$
4,292,504

 
$
30,280

 
$
9,797

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3,768

 
 
46

 
 
85,709

 
 
716

 
 
1,618,908

 
 
8,028

 
 
4,207

 
476

 
 
5

 
 
10,151

 
 
97

 
 
118,417

 
 
1,159

 
 
457

 
—

 
 
—

 
 
3,142

 
 
—

 
 
38,460

 
 
—

 
 
274

 
(3,661)

 
 
196

 
 
(79,957)

 
 
(781)

 
 
2,516,719

 
 
21,093

 
 
4,859

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1,061)

 
 
(1)

 
 
324,327

 
 
(642)

 
 
(425,501)

 
 
(540)

 
 
(4,998)

 
37,194

 
 
19

 
 
805,505

 
 
14,011

 
 
173,721

 
 
1,273

 
 
644

 
36,133

 
 
18

 
 
1,129,832

 
 
13,369

 
 
(251,780)

 
 
733

 
 
(4,354)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(85,686)

 
 
(535)

 
 
(1,288,027)

 
 
(20,751)

 
 
(2,913,168)

 
 
(34,980)

 
 
(20,662)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(53,214)

 
 
(321)

 
 
(238,152)

 
 
(8,163)

 
 
(648,229)

 
 
(13,154)

 
 
(20,157)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(53,214)

 
$
(321)

 
$
(238,152)

 
$
(8,163)

 
$
(648,229)

 
$
(13,154)

 
$
(20,157)


61


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Guggenheim Investments Global Managed Futures Strategy Division
 
Guggenheim Investments Long Short Equity Division
 
Guggenheim Investments Multi-Hedge Strategies Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment income (loss)
 
 
 
 
 
 
 
 
 
Income
 
 
 
 
 
 
 
 
 
 
Dividends
$
2,621

 
$
—

 
$
369

 
 
 
 
 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
 
 
 
Mortality and expense risks
 
892

 
 
1,182

 
 
662

 
 
Administrative charges
 
123

 
 
136

 
 
77

 
 
Separate account rider charges
 
—

 
 
5

 
 
—

 
Net investment income (loss)
 
1,606

 
 
(1,323)

 
 
(370)

 
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on investments
 
 
 
 
 
 
 
 
 
Realized gains (losses) on sale of fund shares
 
(1,027)

 
 
348

 
 
(84)

 
Capital gains distributions
 
3,595

 
 
—

 
 
—

 
Total realized gains (losses) on investments
 
2,568

 
 
348

 
 
(84)

 
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized appreciation or depreciation of investments
 
(9,969)

 
 
(453)

 
 
(142)

 
 
 
 
 
 
 
 
 
 
 
 
Net gains (losses) on investments
 
(5,795)

 
 
(1,428)

 
 
(596)

 
 
 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(5,795)

 
$
(1,428)

 
$
(596)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)    Commenced operations May 18, 2015.

See accompanying notes.
 
 
 
 
 

62


Principal Life Insurance Company
Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Guggenheim Macro Opportunities Series M Division
 
Income Class 1 Division (1)
 
Income Class 2 Division (1)
 
International Emerging Markets Class 1 Division
 
International Emerging Markets Class 2 Division (1)
 
Invesco American Franchise Series I Division
 
Invesco Balanced-Risk Allocation Series II Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
2,514

 
$
9,922

 
$
691

 
$
990,913

 
$
148

 
$
—

 
$
7,315

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,217

 
 
2,353

 
 
65

 
 
747,232

 
 
110

 
 
56,118

 
 
1,723

 
141

 
 
249

 
 
9

 
 
64,679

 
 
13

 
 
2,245

 
 
212

 
7

 
 
13

 
 
—

 
 
22,795

 
 
—

 
 
9

 
 
—

 
1,149

 
 
7,307

 
 
617

 
 
156,207

 
 
25

 
 
(58,372)

 
 
5,380

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(20)

 
 
(1,904)

 
 
(825)

 
 
(1,561,454)

 
 
(23)

 
 
231,069

 
 
(225)

 
210

 
 
—

 
 
—

 
 
—

 
 
—

 
 
23,592

 
 
16,491

 
190

 
 
(1,904)

 
 
(825)

 
 
(1,561,454)

 
 
(23)

 
 
254,661

 
 
16,266

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(6,305)

 
 
(14,624)

 
 
(137)

 
 
(7,499,679)

 
 
(2,729)

 
 
(24,532)

 
 
(37,280)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(4,966)

 
 
(9,221)

 
 
(345)

 
 
(8,904,926)

 
 
(2,727)

 
 
171,757

 
 
(15,634)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(4,966)

 
$
(9,221)

 
$
(345)

 
$
(8,904,926)

 
$
(2,727)

 
$
171,757

 
$
(15,634)


63


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Invesco Core Equity Series I Division
 
Invesco Global Health Care Series I Division
 
Invesco Global Health Care Series II Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment income (loss)
 
 
 
 
 
 
 
 
 
Income
 
 
 
 
 
 
 
 
 
 
Dividends
$
217,919

 
$
—

 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
 
 
 
Mortality and expense risks
 
246,721

 
 
144,805

 
 
5,790

 
 
Administrative charges
 
9,870

 
 
5,793

 
 
759

 
 
Separate account rider charges
 
7

 
 
56

 
 
—

 
Net investment income (loss)
 
(38,679)

 
 
(150,654)

 
 
(6,549)

 
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on investments
 
 
 
 
 
 
 
 
 
Realized gains (losses) on sale of fund shares
 
973,879

 
 
1,219,747

 
 
(2,149)

 
Capital gains distributions
 
1,992,878

 
 
980,548

 
 
68,540

 
Total realized gains (losses) on investments
 
2,966,757

 
 
2,200,295

 
 
66,391

 
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized appreciation or depreciation of investments
 
(4,292,405)

 
 
(1,850,670)

 
 
(110,805)

 
 
 
 
 
 
 
 
 
 
 
 
Net gains (losses) on investments
 
(1,364,327)

 
 
198,971

 
 
(50,963)

 
 
 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(1,364,327)

 
$
198,971

 
$
(50,963)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 
 

64


Principal Life Insurance Company
Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Invesco International Growth Series I Division
 
Invesco International Growth Series II Division
 
Invesco Mid Cap Growth Series I Division
 
Invesco Small Cap Equity Series I Division
 
Invesco Technology Series I Division
 
Invesco Value Opportunities Series I Division
 
Janus Aspen Enterprise Service Shares Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
156,573

 
$
5,394

 
$
—

 
$
—

 
$
—

 
$
128,300

 
$
70,439

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
131,037

 
 
3,080

 
 
19,838

 
 
111,875

 
 
44,588

 
 
61,485

 
 
116,751

 
15,726

 
 
423

 
 
793

 
 
10,757

 
 
1,784

 
 
7,379

 
 
4,671

 
5,306

 
 
—

 
 
35

 
 
4,655

 
 
14

 
 
3,467

 
 
88

 
4,504

 
 
1,891

 
 
(20,666)

 
 
(127,287)

 
 
(46,386)

 
 
55,969

 
 
(51,071)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
281,670

 
 
467

 
 
367,924

 
 
284,127

 
 
296,517

 
 
358,495

 
 
690,764

 
—

 
 
—

 
 
114,435

 
 
1,731,921

 
 
344,168

 
 
360,136

 
 
1,008,793

 
281,670

 
 
467

 
 
482,359

 
 
2,016,048

 
 
640,685

 
 
718,631

 
 
1,699,557

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(689,168)

 
 
(32,194)

 
 
(459,061)

 
 
(2,480,337)

 
 
(412,929)

 
 
(1,361,289)

 
 
(1,403,548)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(402,994)

 
 
(29,836)

 
 
2,632

 
 
(591,576)

 
 
181,370

 
 
(586,689)

 
 
244,938

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(402,994)

 
$
(29,836)

 
$
2,632

 
$
(591,576)

 
$
181,370

 
$
(586,689)

 
$
244,938


65


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Janus Aspen Flexible Bond Service Shares Division
 
LargeCap Growth Class 1 Division
 
LargeCap Growth Class 2 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment income (loss)
 
 
 
 
 
 
 
 
 
Income
 
 
 
 
 
 
 
 
 
 
Dividends
$
13,164

 
$
73,405

 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
 
 
 
Mortality and expense risks
 
6,256

 
 
612,114

 
 
2,940

 
 
Administrative charges
 
819

 
 
36,907

 
 
398

 
 
Separate account rider charges
 
—

 
 
13,706

 
 
—

 
Net investment income (loss)
 
6,089

 
 
(589,322)

 
 
(3,338)

 
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on investments
 
 
 
 
 
 
 
 
 
Realized gains (losses) on sale of fund shares
 
(126)

 
 
3,556,456

 
 
1,311

 
Capital gains distributions
 
2,456

 
 
—

 
 
—

 
Total realized gains (losses) on investments
 
2,330

 
 
3,556,456

 
 
1,311

 
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized appreciation or depreciation of investments
 
(22,250)

 
 
(1,049,459)

 
 
755

 
 
 
 
 
 
 
 
 
 
 
 
Net gains (losses) on investments
 
(13,831)

 
 
1,917,675

 
 
(1,272)

 
 
 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(13,831)

 
$
1,917,675

 
$
(1,272)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)    Commenced operations May 18, 2015.

See accompanying notes.
 
 
 
 
 

66


Principal Life Insurance Company
Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LargeCap Growth I Class 1 Division
 
LargeCap Growth I Class 2 Division (1)
 
LargeCap S&P 500 Index Class 1 Division
 
LargeCap S&P 500 Index Class 2 Division (1)
 
LargeCap Value Class 1 Division
 
LargeCap Value Class 2 Division (1)
 
MFS VIT International Value Service Class Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
245,069

 
$
921

 
$
1,397,559

 
$
927

 
$
1,420,877

 
$
68

 
$
13,630

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,341,982

 
 
1,853

 
 
1,182,639

 
 
464

 
 
995,302

 
 
51

 
 
6,924

 
71,505

 
 
268

 
 
86,626

 
 
58

 
 
53,792

 
 
6

 
 
792

 
10,303

 
 
—

 
 
26,866

 
 
—

 
 
15,840

 
 
—

 
 
25

 
(1,178,721)

 
 
(1,200)

 
 
101,428

 
 
405

 
 
355,943

 
 
11

 
 
5,889

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,444,977

 
 
(1,856)

 
 
7,729,723

 
 
(50)

 
 
2,079,395

 
 
(10)

 
 
(360)

 
16,168,894

 
 
60,741

 
 
1,146,931

 
 
760

 
 
9,347,592

 
 
496

 
 
7,799

 
21,613,871

 
 
58,885

 
 
8,876,654

 
 
710

 
 
11,426,987

 
 
486

 
 
7,439

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(13,707,976)

 
 
(69,012)

 
 
(9,066,908)

 
 
(2,328)

 
 
(13,740,865)

 
 
(352)

 
 
(16,783)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6,727,174

 
 
(11,327)

 
 
(88,826)

 
 
(1,213)

 
 
(1,957,935)

 
 
145

 
 
(3,455)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
6,727,174

 
$
(11,327)

 
$
(88,826)

 
$
(1,213)

 
$
(1,957,935)

 
$
145

 
$
(3,455)


67


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MFS VIT New Discovery Service Class Division
 
MFS VIT Utilities Service Class Division
 
MFS VIT Value Service Class Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment income (loss)
 
 
 
 
 
 
 
 
 
Income
 
 
 
 
 
 
 
 
 
 
Dividends
$
—

 
$
502,675

 
$
107,652

 
 
 
 
 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
 
 
 
Mortality and expense risks
 
13,969

 
 
154,255

 
 
63,712

 
 
Administrative charges
 
1,373

 
 
18,573

 
 
7,646

 
 
Separate account rider charges
 
683

 
 
8,978

 
 
4,228

 
Net investment income (loss)
 
(16,025)

 
 
320,869

 
 
32,066

 
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on investments
 
 
 
 
 
 
 
 
 
Realized gains (losses) on sale of fund shares
 
(77,588)

 
 
182,192

 
 
170,905

 
Capital gains distributions
 
38,400

 
 
882,250

 
 
303,478

 
Total realized gains (losses) on investments
 
(39,188)

 
 
1,064,442

 
 
474,383

 
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized appreciation or depreciation of investments
 
4,980

 
 
(3,494,394)

 
 
(632,553)

 
 
 
 
 
 
 
 
 
 
 
 
Net gains (losses) on investments
 
(50,233)

 
 
(2,109,083)

 
 
(126,104)

 
 
 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(50,233)

 
$
(2,109,083)

 
$
(126,104)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)    Commenced operations May 18, 2015.

See accompanying notes.
 
 
 
 
 

68


Principal Life Insurance Company
Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MidCap Class 1 Division
 
Money Market Class 1 Division
 
Money Market Class 2 Division
 
Neuberger Berman AMT Large Cap Value I Class Division
 
Neuberger Berman AMT Mid-Cap Growth Portfolio S Class Division (1)
 
Neuberger Berman AMT Socially Responsive I Class Division
 
Oppenheimer Main Street Small Cap Service Shares Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
1,883,573

 
$
15

 
$
—

 
$
35,109

 
$
—

 
$
30,164

 
$
4,335

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4,573,762

 
 
584,853

 
 
14,495

 
 
58,623

 
 
5,422

 
 
69,212

 
 
7,881

 
312,389

 
 
43,992

 
 
1,868

 
 
7,036

 
 
652

 
 
8,306

 
 
315

 
78,563

 
 
13,844

 
 
—

 
 
2,245

 
 
214

 
 
4,060

 
 
1

 
(3,081,141)

 
 
(642,674)

 
 
(16,363)

 
 
(32,795)

 
 
(6,288)

 
 
(51,414)

 
 
(3,862)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
27,129,590

 
 
—

 
 
—

 
 
292,546

 
 
(3,443)

 
 
569,566

 
 
(43,722)

 
38,553,134

 
 
—

 
 
—

 
 
354,802

 
 
2,506

 
 
476,898

 
 
100,410

 
65,682,724

 
 
—

 
 
—

 
 
647,348

 
 
(937)

 
 
1,046,464

 
 
56,688

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(59,850,213)

 
 
—

 
 
—

 
 
(1,246,521)

 
 
(120,653)

 
 
(1,096,068)

 
 
(97,581)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,751,370

 
 
(642,674)

 
 
(16,363)

 
 
(631,968)

 
 
(127,878)

 
 
(101,018)

 
 
(44,755)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
2,751,370

 
$
(642,674)

 
$
(16,363)

 
$
(631,968)

 
$
(127,878)

 
$
(101,018)

 
$
(44,755)


69


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PIMCO All Asset Administrative Class Division
 
PIMCO All Asset Advisor Class Division (1)
 
PIMCO Commodity Real Return Strategy M Class Division (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment income (loss)
 
 
 
 
 
 
 
 
 
Income
 
 
 
 
 
 
 
 
 
 
Dividends
$
160,970

 
$
—

 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
 
 
 
Mortality and expense risks
 
61,996

 
 
2

 
 
50

 
 
Administrative charges
 
7,440

 
 
—

 
 
6

 
 
Separate account rider charges
 
2,803

 
 
—

 
 
—

 
Net investment income (loss)
 
88,731

 
 
(2)

 
 
(56)

 
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on investments
 
 
 
 
 
 
 
 
 
Realized gains (losses) on sale of fund shares
 
(177,260)

 
 
(70)

 
 
(4)

 
Capital gains distributions
 
—

 
 
—

 
 
—

 
Total realized gains (losses) on investments
 
(177,260)

 
 
(70)

 
 
(4)

 
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized appreciation or depreciation of investments
 
(434,074)

 
 
(1)

 
 
(1,681)

 
 
 
 
 
 
 
 
 
 
 
 
Net gains (losses) on investments
 
(522,603)

 
 
(73)

 
 
(1,741)

 
 
 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(522,603)

 
$
(73)

 
$
(1,741)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)    Commenced operations May 18, 2015.

See accompanying notes.
 
 
 
 
 

70


Principal Life Insurance Company
Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PIMCO High Yield Administrative Class Division
 
PIMCO Low Duration Advisor Class Division (1)
 
PIMCO Total Return Administrative Class Division
 
Principal Capital Appreciation Class 1 Division
 
Principal Capital Appreciation Class 2 Division
 
Principal LifeTime Strategic Income Class 1 Division
 
Principal LifeTime 2010 Class 1 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
861,318

 
$
6,868

 
$
1,400,879

 
$
307,376

 
$
227

 
$
417,000

 
$
676,407

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
204,425

 
 
587

 
 
356,933

 
 
1,172,314

 
 
5,041

 
 
245,152

 
 
386,704

 
24,602

 
 
71

 
 
42,871

 
 
113,920

 
 
688

 
 
25,472

 
 
42,945

 
7,729

 
 
—

 
 
9,757

 
 
43,218

 
 
—

 
 
9,990

 
 
7,982

 
624,562

 
 
6,210

 
 
991,318

 
 
(1,022,076)

 
 
(5,502)

 
 
136,386

 
 
238,776

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(62,199)

 
 
(20)

 
 
(33,826)

 
 
142,624

 
 
320

 
 
970,488

 
 
481,787

 
252,088

 
 
—

 
 
295,050

 
 
2,165,827

 
 
10,872

 
 
—

 
 
—

 
189,889

 
 
(20)

 
 
261,224

 
 
2,308,451

 
 
11,192

 
 
970,488

 
 
481,787

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1,327,188)

 
 
(7,503)

 
 
(1,527,726)

 
 
(2,510,117)

 
 
(12,067)

 
 
(1,507,441)

 
 
(1,445,646)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(512,737)

 
 
(1,313)

 
 
(275,184)

 
 
(1,223,742)

 
 
(6,377)

 
 
(400,567)

 
 
(725,083)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(512,737)

 
$
(1,313)

 
$
(275,184)

 
$
(1,223,742)

 
$
(6,377)

 
$
(400,567)

 
$
(725,083)


71


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal LifeTime 2020 Class 1 Division
 
Principal LifeTime 2020 Class 2 Division (1)
 
Principal LifeTime 2030 Class 1 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment income (loss)
 
 
 
 
 
 
 
 
 
Income
 
 
 
 
 
 
 
 
 
 
Dividends
$
3,298,424

 
$
419

 
$
1,826,930

 
 
 
 
 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
 
 
 
Mortality and expense risks
 
1,621,896

 
 
81

 
 
887,613

 
 
Administrative charges
 
184,486

 
 
9

 
 
101,210

 
 
Separate account rider charges
 
69,387

 
 
—

 
 
62,699

 
Net investment income (loss)
 
1,422,655

 
 
329

 
 
775,408

 
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on investments
 
 
 
 
 
 
 
 
 
Realized gains (losses) on sale of fund shares
 
2,363,142

 
 
(12)

 
 
2,821,494

 
Capital gains distributions
 
5,826,128

 
 
740

 
 
2,667,500

 
Total realized gains (losses) on investments
 
8,189,270

 
 
728

 
 
5,488,994

 
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized appreciation or depreciation of investments
 
(12,413,841)

 
 
(1,763)

 
 
(7,969,079)

 
 
 
 
 
 
 
 
 
 
 
 
Net gains (losses) on investments
 
(2,801,916)

 
 
(706)

 
 
(1,704,677)

 
 
 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(2,801,916)

 
$
(706)

 
$
(1,704,677)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)    Commenced operations May 18, 2015.

See accompanying notes.
 
 
 
 
 

72


Principal Life Insurance Company
Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal LifeTime 2030 Class 2 Division (1)
 
Principal LifeTime 2040 Class 1 Division
 
Principal LifeTime 2040 Class 2 Division (1)
 
Principal LifeTime 2050 Class 1 Division
 
Principal LifeTime 2050 Class 2 Division (1)
 
Real Estate Securities Class 1 Division
 
Real Estate Securities Class 2 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
141

 
$
342,759

 
$
—

 
$
219,996

 
$
573

 
$
1,262,897

 
$
22,565

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
48

 
 
178,696

 
 
1

 
 
108,771

 
 
144

 
 
1,050,737

 
 
12,685

 
6

 
 
20,459

 
 
—

 
 
12,569

 
 
22

 
 
80,634

 
 
1,720

 
—

 
 
6,197

 
 
—

 
 
3,951

 
 
—

 
 
34,232

 
 
—

 
87

 
 
137,407

 
 
(1)

 
 
94,705

 
 
407

 
 
97,294

 
 
8,160

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(8)

 
 
171,678

 
 
—

 
 
139,445

 
 
(17)

 
 
5,714,965

 
 
(5,427)

 
205

 
 
495,796

 
 
—

 
 
390,499

 
 
1,017

 
 
2,573,521

 
 
47,288

 
197

 
 
667,474

 
 
—

 
 
529,944

 
 
1,000

 
 
8,288,486

 
 
41,861

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(718)

 
 
(1,119,014)

 
 
(5)

 
 
(762,417)

 
 
(3,066)

 
 
(6,248,173)

 
 
(9,501)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(434)

 
 
(314,133)

 
 
(6)

 
 
(137,768)

 
 
(1,659)

 
 
2,137,607

 
 
40,520

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(434)

 
$
(314,133)

 
$
(6)

 
$
(137,768)

 
$
(1,659)

 
$
2,137,607

 
$
40,520


73


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rydex Basic Materials
Division (1)
 
Rydex Commodities Strategy Division
 
Rydex NASDAQ 100 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment income (loss)
 
 
 
 
 
 
 
 
 
Income
 
 
 
 
 
 
 
 
 
 
Dividends
$
—

 
$
—

 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
 
 
 
Mortality and expense risks
 
—

 
 
428

 
 
4,787

 
 
Administrative charges
 
—

 
 
49

 
 
640

 
 
Separate account rider charges
 
—

 
 
—

 
 
—

 
Net investment income (loss)
 
—

 
 
(477)

 
 
(5,427)

 
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on investments
 
 
 
 
 
 
 
 
 
Realized gains (losses) on sale of fund shares
 
—

 
 
(1,126)

 
 
(2,492)

 
Capital gains distributions
 
—

 
 
—

 
 
35,828

 
Total realized gains (losses) on investments
 
—

 
 
(1,126)

 
 
33,336

 
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized appreciation or depreciation of investments
 
—

 
 
(20,055)

 
 
(10,106)

 
 
 
 
 
 
 
 
 
 
 
 
Net gains (losses) on investments
 
—

 
 
(21,658)

 
 
17,803

 
 
 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
—

 
$
(21,658)

 
$
17,803

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)    Commenced operations May 18, 2015.

See accompanying notes.
 
 
 
 
 

74


Principal Life Insurance Company
Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SAM Balanced Portfolio Class 1 Division
 
SAM Balanced Portfolio Class 2 Division
 
SAM Conservative Balanced Portfolio Class 1 Division
 
SAM Conservative Balanced Portfolio Class 2 Division
 
SAM Conservative Growth Portfolio Class 1 Division
 
SAM Conservative Growth Portfolio Class 2 Division
 
SAM Flexible Income Portfolio Class 1 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
18,822,013

 
$
78,508

 
$
5,131,092

 
$
69,422

 
$
2,340,794

 
$
100,839

 
$
6,471,813

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8,153,569

 
 
25,320

 
 
2,014,448

 
 
20,305

 
 
1,291,114

 
 
37,487

 
 
2,266,119

 
912,520

 
 
3,494

 
 
222,487

 
 
2,779

 
 
138,098

 
 
5,474

 
 
237,002

 
381,391

 
 
—

 
 
115,378

 
 
—

 
 
96,455

 
 
—

 
 
125,907

 
9,374,533

 
 
49,694

 
 
2,778,779

 
 
46,338

 
 
815,127

 
 
57,878

 
 
3,842,785

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
22,194,594

 
 
(12,231)

 
 
4,204,578

 
 
(4,732)

 
 
3,205,219

 
 
(14,891)

 
 
1,892,628

 
48,266,925

 
 
220,282

 
 
7,483,261

 
 
108,720

 
 
6,634,063

 
 
319,158

 
 
4,382,541

 
70,461,519

 
 
208,051

 
 
11,687,839

 
 
103,988

 
 
9,839,282

 
 
304,267

 
 
6,275,169

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(93,512,609)

 
 
(366,087)

 
 
(17,902,602)

 
 
(233,687)

 
 
(13,344,263)

 
 
(572,909)

 
 
(15,012,560)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(13,676,557)

 
 
(108,342)

 
 
(3,435,984)

 
 
(83,361)

 
 
(2,689,854)

 
 
(210,764)

 
 
(4,894,606)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(13,676,557)

 
$
(108,342)

 
$
(3,435,984)

 
$
(83,361)

 
$
(2,689,854)

 
$
(210,764)

 
$
(4,894,606)


75


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SAM Flexible Income Portfolio Class 2 Division
 
SAM Strategic Growth Portfolio Class 1 Division
 
SAM Strategic Growth Portfolio Class 2 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment income (loss)
 
 
 
 
 
 
 
 
 
Income
 
 
 
 
 
 
 
 
 
 
Dividends
$
123,861

 
$
1,515,673

 
$
31,517

 
 
 
 
 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
 
 
 
Mortality and expense risks
 
34,950

 
 
837,592

 
 
13,559

 
 
Administrative charges
 
4,529

 
 
90,378

 
 
1,990

 
 
Separate account rider charges
 
—

 
 
87,294

 
 
—

 
Net investment income (loss)
 
84,382

 
 
500,409

 
 
15,968

 
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on investments
 
 
 
 
 
 
 
 
 
Realized gains (losses) on sale of fund shares
 
10,280

 
 
2,247,548

 
 
(21,539)

 
Capital gains distributions
 
89,479

 
 
4,977,875

 
 
115,330

 
Total realized gains (losses) on investments
 
99,759

 
 
7,225,423

 
 
93,791

 
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized appreciation or depreciation of investments
 
(331,837)

 
 
(9,852,418)

 
 
(183,660)

 
 
 
 
 
 
 
 
 
 
 
 
Net gains (losses) on investments
 
(147,696)

 
 
(2,126,586)

 
 
(73,901)

 
 
 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(147,696)

 
$
(2,126,586)

 
$
(73,901)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)    Commenced operations April 17, 2015.

See accompanying notes.
 
 
 
 
 

76


Principal Life Insurance Company
Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Short-Term Income Class 1 Division
 
Short-Term Income Class 2 Division
 
SmallCap Blend Class 1 Division
 
SmallCap Blend Class 2 Division (1)
 
T. Rowe Price Blue Chip Growth Portfolio II Division
 
T. Rowe Price Health Sciences Portfolio II Division
 
Templeton Global Bond VIP Class 4 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
3,098,236

 
$
20,654

 
$
79,677

 
$
460

 
$
—

 
$
—

 
$
44,813

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,488,883

 
 
6,411

 
 
1,233,807

 
 
5,073

 
 
179,858

 
 
443,917

 
 
7,114

 
158,116

 
 
879

 
 
86,838

 
 
729

 
 
21,586

 
 
53,276

 
 
913

 
43,820

 
 
—

 
 
22,994

 
 
—

 
 
11,075

 
 
27,869

 
 
22

 
1,407,417

 
 
13,364

 
 
(1,263,962)

 
 
(5,342)

 
 
(212,519)

 
 
(525,062)

 
 
36,764

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
534,051

 
 
(4,694)

 
 
3,935,734

 
 
(1,707)

 
 
934,600

 
 
3,150,864

 
 
(9,111)

 
—

 
 
—

 
 
3,923,209

 
 
22,673

 
 
—

 
 
2,663,598

 
 
2,959

 
534,051

 
 
(4,694)

 
 
7,858,943

 
 
20,966

 
 
934,600

 
 
5,814,462

 
 
(6,152)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(2,714,781)

 
 
(16,114)

 
 
(13,749,436)

 
 
(80,039)

 
 
456,116

 
 
(2,151,210)

 
 
(82,235)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(773,313)

 
 
(7,444)

 
 
(7,154,455)

 
 
(64,415)

 
 
1,178,197

 
 
3,138,190

 
 
(51,623)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(773,313)

 
$
(7,444)

 
$
(7,154,455)

 
$
(64,415)

 
$
1,178,197

 
$
3,138,190

 
$
(51,623)


77


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Templeton Growth VIP Class 2 Division
 
The Merger Fund Division (1)
 
Van Eck Global Hard Assets Class S Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment income (loss)
 
 
 
 
 
 
 
 
 
Income
 
 
 
 
 
 
 
 
 
 
Dividends
$
25,191

 
$
—

 
$
2,034

 
 
 
 
 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
 
 
 
Mortality and expense risks
 
8,123

 
 
—

 
 
82,091

 
 
Administrative charges
 
—

 
 
—

 
 
8,585

 
 
Separate account rider charges
 
—

 
 
—

 
 
4,893

 
Net investment income (loss)
 
17,068

 
 
—

 
 
(93,535)

 
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on investments
 
 
 
 
 
 
 
 
 
Realized gains (losses) on sale of fund shares
 
6,034

 
 
—

 
 
(526,299)

 
Capital gains distributions
 
—

 
 
—

 
 
—

 
Total realized gains (losses) on investments
 
6,034

 
 
—

 
 
(526,299)

 
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized appreciation or depreciation of investments
 
(95,558)

 
 
—

 
 
(1,919,469)

 
 
 
 
 
 
 
 
 
 
 
 
Net gains (losses) on investments
 
(72,456)

 
 
—

 
 
(2,539,303)

 
 
 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(72,456)

 
$
—

 
$
(2,539,303)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)    Commenced operations May 18, 2015.

See accompanying notes.
 
 
 
 
 

78





























(This page left intentionally blank)


79


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AllianceBernstein Small Cap Growth
Class A Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
Increase (decrease) in net assets
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
Net investment income (loss)
$
(71,141)

 
$
(82,853)

 
 
Total realized gains (losses) on investments
 
952,960

 
 
711,933

 
 
Change in net unrealized appreciation or depreciation of investments
 
(980,379)

 
 
(834,462)

 
 
Net gains (losses) from investments
 
(98,560)

 
 
(205,382)

 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
(98,560)

 
 
(205,382)

 
 
 
 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
692,012

 
 
883,376

 
 
Administration charges
 
(407)

 
 
(575)

 
 
Contingent sales charges
 
(4,994)

 
 
(5,340)

 
 
Contract terminations
 
(563,413)

 
 
(515,559)

 
 
Death benefit payments
 
(25,911)

 
 
(32,960)

 
 
Flexible withdrawal option payments
 
(22,903)

 
 
(16,721)

 
 
Transfers to other contracts
 
(570,163)

 
 
(1,345,012)

 
 
Annuity payments
 
—

 
 
—

 
Increase (decrease) in net assets from policy related transactions
 
(495,779)

 
 
(1,032,791)

 
Total increase (decrease)
 
(594,339)

 
 
(1,238,173)

 
 
 
 
 
 
 
 
 
 
Net assets at beginning of period
 
4,944,580

 
 
6,182,753

 
Net assets at end of period
$
4,350,241

 
$
4,944,580

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)    Commenced operations May 18, 2015.

See accompanying notes.
 
 
 
 

80


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AllianceBernstein Small/Mid Cap Value
Class A Division
 
Alps/Red Rocks Listed Private Equity
Class III Division (1)
 
American Century VP Capital Appreciation Class I Division
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2015
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(17,933)

 
$
(12,463)

 
$
(75)

 
$
(39,346)

 
$
(27,698)

 
403,743

 
 
255,333

 
 
5

 
 
219,030

 
 
21,929

 
(586,927)

 
 
(103,979)

 
 
(992)

 
 
(169,766)

 
 
250,033

 
(201,117)

 
 
138,891

 
 
(1,062)

 
 
9,918

 
 
244,264

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(201,117)

 
 
138,891

 
 
(1,062)

 
 
9,918

 
 
244,264

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,332,689

 
 
1,756,451

 
 
24,745

 
 
645,130

 
 
3,015,252

 
—

 
 
(60)

 
 
(8)

 
 
(1,550)

 
 
(1,154)

 
(1,040)

 
 
(375)

 
 
—

 
 
(2,290)

 
 
(2,204)

 
(118,349)

 
 
(76,395)

 
 
—

 
 
(258,314)

 
 
(212,790)

 
(23,425)

 
 
(10,551)

 
 
—

 
 
(27,500)

 
 
(18,522)

 
(19,743)

 
 
(13,164)

 
 
—

 
 
(24,857)

 
 
(13,909)

 
(523,465)

 
 
(549,664)

 
 
—

 
 
(447,846)

 
 
(407,430)

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
646,667

 
 
1,106,242

 
 
24,737

 
 
(117,227)

 
 
2,359,243

 
445,550

 
 
1,245,133

 
 
23,675

 
 
(107,309)

 
 
2,603,507

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,320,465

 
 
1,075,332

 
 
—

 
 
2,603,507

 
 
—

$
2,766,015

 
$
2,320,465

 
$
23,675

 
$
2,496,198

 
$
2,603,507


81


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Century VP Income & Growth Class I Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
Increase (decrease) in net assets
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
Net investment income (loss)
$
114,087

 
$
119,178

 
 
Total realized gains (losses) on investments
 
1,834,516

 
 
811,414

 
 
Change in net unrealized appreciation or depreciation of investments
 
(2,846,462)

 
 
588,288

 
 
Net gains (losses) from investments
 
(897,859)

 
 
1,518,880

 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
(897,859)

 
 
1,518,880

 
 
 
 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
429,765

 
 
624,667

 
 
Administration charges
 
(1,061)

 
 
(1,891)

 
 
Contingent sales charges
 
(1,747)

 
 
(2,062)

 
 
Contract terminations
 
(1,560,280)

 
 
(1,528,791)

 
 
Death benefit payments
 
(116,724)

 
 
(111,850)

 
 
Flexible withdrawal option payments
 
(152,106)

 
 
(164,308)

 
 
Transfers to other contracts
 
(587,166)

 
 
(884,451)

 
 
Annuity payments
 
—

 
 
—

 
Increase (decrease) in net assets from policy related transactions
 
(1,989,319)

 
 
(2,068,686)

 
Total increase (decrease)
 
(2,887,178)

 
 
(549,806)

 
 
 
 
 
 
 
 
 
 
Net assets at beginning of period
 
14,435,615

 
 
14,985,421

 
Net assets at end of period
$
11,548,437

 
$
14,435,615

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 

82


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Century VP Inflation Protection Class II Division
 
American Century VP MidCap Value
Class II Division
 
American Century VP Ultra Class I Division
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
340,760

 
$
(161,357)

 
$
2,505

 
$
(18,591)

 
$
(31,269)

 
$
(34,855)

 
(1,104,330)

 
 
2,311,462

 
 
475,978

 
 
502,545

 
 
713,014

 
 
330,844

 
(1,423,679)

 
 
(569,158)

 
 
(680,016)

 
 
122,659

 
 
(500,969)

 
 
5,663

 
(2,187,249)

 
 
1,580,947

 
 
(201,533)

 
 
606,613

 
 
180,776

 
 
301,652

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(2,187,249)

 
 
1,580,947

 
 
(201,533)

 
 
606,613

 
 
180,776

 
 
301,652

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8,848,538

 
 
13,312,143

 
 
2,523,086

 
 
2,495,268

 
 
566,985

 
 
213,536

 
(299,369)

 
 
(368,840)

 
 
(391)

 
 
(517)

 
 
(722)

 
 
(846)

 
(53,212)

 
 
(83,724)

 
 
(1,614)

 
 
(3,227)

 
 
(394)

 
 
(700)

 
(6,003,190)

 
 
(8,083,732)

 
 
(333,932)

 
 
(446,735)

 
 
(350,601)

 
 
(567,666)

 
(597,826)

 
 
(456,869)

 
 
(91,015)

 
 
(92,761)

 
 
(10,583)

 
 
(18,560)

 
(1,871,537)

 
 
(2,013,619)

 
 
(45,033)

 
 
(27,075)

 
 
(47,184)

 
 
(54,106)

 
(11,648,589)

 
 
(17,534,228)

 
 
(734,456)

 
 
(1,016,734)

 
 
(416,178)

 
 
(276,896)

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
(11,625,185)

 
 
(15,228,869)

 
 
1,316,645

 
 
908,219

 
 
(258,677)

 
 
(705,238)

 
(13,812,434)

 
 
(13,647,922)

 
 
1,115,112

 
 
1,514,832

 
 
(77,901)

 
 
(403,586)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
65,192,081

 
 
78,840,003

 
 
5,329,347

 
 
3,814,515

 
 
3,695,933

 
 
4,099,519

$
51,379,647

 
$
65,192,081

 
$
6,444,459

 
$
5,329,347

 
$
3,618,032

 
$
3,695,933


83


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Century VP Ultra Class II Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
Increase (decrease) in net assets
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
Net investment income (loss)
$
(468,389)

 
$
(620,307)

 
 
Total realized gains (losses) on investments
 
9,583,284

 
 
5,452,590

 
 
Change in net unrealized appreciation or depreciation of investments
 
(7,134,566)

 
 
(1,063,112)

 
 
Net gains (losses) from investments
 
1,980,329

 
 
3,769,171

 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
1,980,329

 
 
3,769,171

 
 
 
 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
4,602,185

 
 
6,983,627

 
 
Administration charges
 
(226,359)

 
 
(283,549)

 
 
Contingent sales charges
 
(39,443)

 
 
(65,566)

 
 
Contract terminations
 
(4,449,811)

 
 
(6,330,547)

 
 
Death benefit payments
 
(406,576)

 
 
(281,760)

 
 
Flexible withdrawal option payments
 
(1,393,167)

 
 
(1,480,963)

 
 
Transfers to other contracts
 
(8,773,849)

 
 
(11,843,761)

 
 
Annuity payments
 
—

 
 
—

 
Increase (decrease) in net assets from policy related transactions
 
(10,687,020)

 
 
(13,302,519)

 
Total increase (decrease)
 
(8,706,691)

 
 
(9,533,348)

 
 
 
 
 
 
 
 
 
 
Net assets at beginning of period
 
44,865,140

 
 
54,398,488

 
Net assets at end of period
$
36,158,449

 
$
44,865,140

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)    Commenced operations May 18, 2015.

See accompanying notes.
 
 
 
 

84


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Century VP Value Class II Division
 
American Funds Insurance Series Asset Allocation Fund
Class 4 Division (1)
 
American Funds Insurance Series Blue Chip Income & Growth Fund Class 4 Division
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2015
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
112,095

 
$
16,472

 
$
8,662

 
$
8,702

 
$
522

 
499,170

 
 
703,639

 
 
34

 
 
64,708

 
 
(235)

 
(1,501,643)

 
 
1,330,760

 
 
(1,616)

 
 
(124,673)

 
 
(891)

 
(890,378)

 
 
2,050,871

 
 
7,080

 
 
(51,263)

 
 
(604)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(890,378)

 
 
2,050,871

 
 
7,080

 
 
(51,263)

 
 
(604)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,050,927

 
 
1,607,095

 
 
799,566

 
 
916,573

 
 
104,128

 
(2,991)

 
 
(3,393)

 
 
(175)

 
 
(616)

 
 
(3)

 
(2,043)

 
 
(3,965)

 
 
—

 
 
(33)

 
 
—

 
(1,809,594)

 
 
(3,215,888)

 
 
(37)

 
 
(3,014)

 
 
—

 
(71,351)

 
 
(93,993)

 
 
—

 
 
(591)

 
 
—

 
(207,941)

 
 
(216,110)

 
 
—

 
 
(3,300)

 
 
—

 
(799,496)

 
 
(1,627,230)

 
 
—

 
 
(60,885)

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
(1,842,489)

 
 
(3,553,484)

 
 
799,354

 
 
848,134

 
 
104,125

 
(2,732,867)

 
 
(1,502,613)

 
 
806,434

 
 
796,871

 
 
103,521

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
18,210,559

 
 
19,713,172

 
 
—

 
 
103,521

 
 
—

$
15,477,692

 
$
18,210,559

 
$
806,434

 
$
900,392

 
$
103,521


85


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Funds Insurance Series Global Small Capitalization Fund Class 2 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
Increase (decrease) in net assets
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
Net investment income (loss)
$
(5,696)

 
$
(410)

 
 
Total realized gains (losses) on investments
 
12,329

 
 
416

 
 
Change in net unrealized appreciation or depreciation of investments
 
(83,834)

 
 
(372)

 
 
Net gains (losses) from investments
 
(77,201)

 
 
(366)

 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
(77,201)

 
 
(366)

 
 
 
 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
1,081,691

 
 
113,699

 
 
Administration charges
 
—

 
 
—

 
 
Contingent sales charges
 
(75)

 
 
(5)

 
 
Contract terminations
 
(43,326)

 
 
(3,834)

 
 
Death benefit payments
 
—

 
 
—

 
 
Flexible withdrawal option payments
 
(2,772)

 
 
—

 
 
Transfers to other contracts
 
(210,335)

 
 
(13,516)

 
 
Annuity payments
 
—

 
 
—

 
Increase (decrease) in net assets from policy related transactions
 
825,183

 
 
96,344

 
Total increase (decrease)
 
747,982

 
 
95,978

 
 
 
 
 
 
 
 
 
 
Net assets at beginning of period
 
95,978

 
 
—

 
Net assets at end of period
$
843,960

 
$
95,978

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 

86


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Funds Insurance Series Global Small Capitalization Fund Class 4 Division
 
American Funds Insurance Series High-Income Bond Class 2 Division
 
American Funds Insurance Series Managed Risk Asset Allocation Fund Class P2 Division
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(872)

 
$
(1)

 
$
17,794

 
$
10,057

 
$
120

 
$
—

 
4,964

 
 
—

 
 
(23,602)

 
 
(2,174)

 
 
796

 
 
—

 
(11,033)

 
 
25

 
 
(31,252)

 
 
(15,338)

 
 
(2,576)

 
 
—

 
(6,941)

 
 
24

 
 
(37,060)

 
 
(7,455)

 
 
(1,660)

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(6,941)

 
 
24

 
 
(37,060)

 
 
(7,455)

 
 
(1,660)

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
144,281

 
 
7,841

 
 
514,915

 
 
318,020

 
 
94,893

 
 
—

 
(106)

 
 
—

 
 
(6)

 
 
(1)

 
 
(34)

 
 
—

 
(2)

 
 
—

 
 
(33)

 
 
(74)

 
 
—

 
 
—

 
(199)

 
 
—

 
 
(29,259)

 
 
(60,154)

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
(5,380)

 
 
(1,200)

 
 
—

 
 
—

 
(11,908)

 
 
—

 
 
(290,011)

 
 
(38,138)

 
 
(31,072)

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
132,066

 
 
7,841

 
 
190,226

 
 
218,453

 
 
63,787

 
 
—

 
125,125

 
 
7,865

 
 
153,166

 
 
210,998

 
 
62,127

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7,865

 
 
—

 
 
210,998

 
 
—

 
 
—

 
 
—

$
132,990

 
$
7,865

 
$
364,164

 
$
210,998

 
$
62,127

 
$
—


87


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Funds Insurance Series Managed Risk Growth Fund Class P2 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
Increase (decrease) in net assets
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
Net investment income (loss)
$
(1,443)

 
$
(7)

 
 
Total realized gains (losses) on investments
 
379

 
 
—

 
 
Change in net unrealized appreciation or depreciation of investments
 
(2,464)

 
 
(113)

 
 
Net gains (losses) from investments
 
(3,528)

 
 
(120)

 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
(3,528)

 
 
(120)

 
 
 
 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
124,649

 
 
30,019

 
 
Administration charges
 
(179)

 
 
—

 
 
Contingent sales charges
 
(2)

 
 
—

 
 
Contract terminations
 
(198)

 
 
—

 
 
Death benefit payments
 
—

 
 
—

 
 
Flexible withdrawal option payments
 
—

 
 
—

 
 
Transfers to other contracts
 
(2,236)

 
 
—

 
 
Annuity payments
 
—

 
 
—

 
Increase (decrease) in net assets from policy related transactions
 
122,034

 
 
30,019

 
Total increase (decrease)
 
118,506

 
 
29,899

 
 
 
 
 
 
 
 
 
 
Net assets at beginning of period
 
29,899

 
 
—

 
Net assets at end of period
$
148,405

 
$
29,899

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 

88


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Funds Insurance Series Managed Risk International Fund Class P2 Division
 
American Funds Insurance Series New World Fund Class 2 Division
 
American Funds Insurance Series New World Fund Class 4 Division
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(398)

 
$
(4)

 
$
(1,791)

 
$
607

 
$
(1,336)

 
$
346

 
1

 
 
—

 
 
(1,639)

 
 
3,731

 
 
10,712

 
 
(632)

 
(2,825)

 
 
(100)

 
 
(18,268)

 
 
(22,384)

 
 
(34,555)

 
 
(437)

 
(3,222)

 
 
(104)

 
 
(21,698)

 
 
(18,046)

 
 
(25,179)

 
 
(723)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(3,222)

 
 
(104)

 
 
(21,698)

 
 
(18,046)

 
 
(25,179)

 
 
(723)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
23,207

 
 
18,000

 
 
392,640

 
 
176,734

 
 
383,239

 
 
52,693

 
(8)

 
 
—

 
 
(2)

 
 
—

 
 
(378)

 
 
(4)

 
(1)

 
 
—

 
 
(139)

 
 
(4)

 
 
—

 
 
—

 
(99)

 
 
—

 
 
(15,920)

 
 
(3,547)

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
(631)

 
 
—

 
 
(191)

 
 
—

 
(184)

 
 
—

 
 
(65,841)

 
 
(2,780)

 
 
(15,951)

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
22,915

 
 
18,000

 
 
310,107

 
 
170,403

 
 
366,719

 
 
52,689

 
19,693

 
 
17,896

 
 
288,409

 
 
152,357

 
 
341,540

 
 
51,966

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
17,896

 
 
—

 
 
152,357

 
 
—

 
 
51,966

 
 
—

$
37,589

 
$
17,896

 
$
440,766

 
$
152,357

 
$
393,506

 
$
51,966


89


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balanced Class 1 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
Increase (decrease) in net assets
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
Net investment income (loss)
$
176,457

 
$
178,893

 
 
Total realized gains (losses) on investments
 
3,600,707

 
 
1,285,488

 
 
Change in net unrealized appreciation or depreciation of investments
 
(3,988,979)

 
 
1,105,685

 
 
Net gains (losses) from investments
 
(211,815)

 
 
2,570,066

 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
(211,815)

 
 
2,570,066

 
 
 
 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
1,182,321

 
 
1,615,675

 
 
Administration charges
 
(10,601)

 
 
(13,308)

 
 
Contingent sales charges
 
(3,246)

 
 
(3,904)

 
 
Contract terminations
 
(4,255,018)

 
 
(3,825,292)

 
 
Death benefit payments
 
(319,838)

 
 
(328,687)

 
 
Flexible withdrawal option payments
 
(632,582)

 
 
(621,682)

 
 
Transfers to other contracts
 
(738,415)

 
 
(945,275)

 
 
Annuity payments
 
—

 
 
—

 
Increase (decrease) in net assets from policy related transactions
 
(4,777,379)

 
 
(4,122,473)

 
Total increase (decrease)
 
(4,989,194)

 
 
(1,552,407)

 
 
 
 
 
 
 
 
 
 
Net assets at beginning of period
 
34,954,263

 
 
36,506,670

 
Net assets at end of period
$
29,965,069

 
$
34,954,263

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)    Commenced operations May 18, 2015.

See accompanying notes.
 
 
 
 

90


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
BlackRock Global Allocation
Class III Division (1)
 
BlackRock iShares Alternative Strategies Class III Division (1)
 
BlackRock iShares Dynamic Allocation Class III Division (1)
 
 
 
 
 
 
 
 
2015
 
2015
 
2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
1,282

 
$
3,163

 
$
898

 
27,424

 
 
(17)

 
 
(6)

 
(40,129)

 
 
(5,064)

 
 
(2,151)

 
(11,423)

 
 
(1,918)

 
 
(1,259)

 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
(11,423)

 
 
(1,918)

 
 
(1,259)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
538,180

 
 
217,766

 
 
61,556

 
(6)

 
 
—

 
 
—

 
(40)

 
 
(19)

 
 
—

 
(4,460)

 
 
(2,163)

 
 
—

 
—

 
 
—

 
 
—

 
—

 
 
(314)

 
 
—

 
(5)

 
 
(84,204)

 
 
—

 
—

 
 
—

 
 
—

 
533,669

 
 
131,066

 
 
61,556

 
522,246

 
 
129,148

 
 
60,297

 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

$
522,246

 
$
129,148

 
$
60,297


91


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
BlackRock iShares Dynamic Fixed Income Class III Division (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
Increase (decrease) in net assets
 
 
 
Operations:
 
 
 
 
Net investment income (loss)
$
1,610

 
 
Total realized gains (losses) on investments
 
30

 
 
Change in net unrealized appreciation or depreciation of investments
 
(3,180)

 
 
Net gains (losses) from investments
 
(1,540)

 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
(1,540)

 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
127,778

 
 
Administration charges
 
(39)

 
 
Contingent sales charges
 
—

 
 
Contract terminations
 
—

 
 
Death benefit payments
 
—

 
 
Flexible withdrawal option payments
 
(1,080)

 
 
Transfers to other contracts
 
(14,365)

 
 
Annuity payments
 
—

 
Increase (decrease) in net assets from policy related transactions
 
112,294

 
Total increase (decrease)
 
110,754

 
 
 
 
 
 
 
Net assets at beginning of period
 
—

 
Net assets at end of period
$
110,754

 
 
 
 
 
 
 
 
 
 
 
 
 
(1)    Commenced operations May 18, 2015.

See accompanying notes.
 
 
 
 

92


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
BlackRock iShares Equity Appreciation Class III Division (1)
 
BlackRock Value Opportunities
Class III Division (1)
 
Bond & Mortgage Securities Class 1 Division
 
 
 
 
 
 
 
 
2015
 
2015
 
2015
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
1,500

 
$
—

 
$
2,860,680

 
$
3,310,500

 
(200)

 
 
60

 
 
2,799,443

 
 
(697,163)

 
(7,191)

 
 
(75)

 
 
(8,435,344)

 
 
4,749,114

 
(5,891)

 
 
(15)

 
 
(2,775,221)

 
 
7,362,451

 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
(5,891)

 
 
(15)

 
 
(2,775,221)

 
 
7,362,451

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
116,848

 
 
841

 
 
17,875,923

 
 
27,844,763

 
(5)

 
 
—

 
 
(363,601)

 
 
(453,229)

 
—

 
 
—

 
 
(96,660)

 
 
(135,527)

 
—

 
 
—

 
 
(19,282,067)

 
 
(23,038,674)

 
—

 
 
—

 
 
(1,508,435)

 
 
(975,504)

 
—

 
 
—

 
 
(3,963,183)

 
 
(4,266,564)

 
—

 
 
—

 
 
(19,499,104)

 
 
(27,083,716)

 
—

 
 
—

 
 
—

 
 
—

 
116,843

 
 
841

 
 
(26,837,127)

 
 
(28,108,451)

 
110,952

 
 
826

 
 
(29,612,348)

 
 
(20,746,000)

 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
180,940,143

 
 
201,686,143

$
110,952

 
$
826

 
$
151,327,795

 
$
180,940,143


93


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Bond & Mortgage Securities
Class 2 Division (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
Increase (decrease) in net assets
 
 
 
Operations:
 
 
 
 
Net investment income (loss)
$
281

 
 
Total realized gains (losses) on investments
 
(382)

 
 
Change in net unrealized appreciation or depreciation of investments
 
(227)

 
 
Net gains (losses) from investments
 
(328)

 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
(328)

 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
39,327

 
 
Administration charges
 
(9)

 
 
Contingent sales charges
 
(3)

 
 
Contract terminations
 
(301)

 
 
Death benefit payments
 
—

 
 
Flexible withdrawal option payments
 
—

 
 
Transfers to other contracts
 
(20,060)

 
 
Annuity payments
 
—

 
Increase (decrease) in net assets from policy related transactions
 
18,954

 
Total increase (decrease)
 
18,626

 
 
 
 
 
 
 
Net assets at beginning of period
 
—

 
Net assets at end of period
$
18,626

 
 
 
 
 
 
 
 
 
 
 
 
 
(1)    Commenced operations May 18, 2015.

See accompanying notes.
 
 
 
 

94


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Calvert EAFE International Index
Class F Division
 
Calvert Russell 2000 Small Cap Index
Class F Division
 
Calvert S&P MidCap 400 Index
Class F Division
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(143)

 
$
116

 
$
(949)

 
$
51

 
$
(4,266)

 
$
178

 
(26)

 
 
(1)

 
 
2,516

 
 
2,374

 
 
4,141

 
 
2,812

 
(677)

 
 
(284)

 
 
(10,338)

 
 
(2,142)

 
 
(39,192)

 
 
(2,823)

 
(846)

 
 
(169)

 
 
(8,771)

 
 
283

 
 
(39,317)

 
 
167

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(846)

 
 
(169)

 
 
(8,771)

 
 
283

 
 
(39,317)

 
 
167

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10,391

 
 
5,650

 
 
94,943

 
 
21,184

 
 
541,126

 
 
35,556

 
(19)

 
 
(1)

 
 
(106)

 
 
(1)

 
 
(322)

 
 
(3)

 
—

 
 
—

 
 
—

 
 
—

 
 
(24)

 
 
—

 
(18)

 
 
—

 
 
—

 
 
—

 
 
(2,184)

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
(586)

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
(16)

 
 
—

 
 
(4,410)

 
 
—

 
 
(54,130)

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
10,338

 
 
5,649

 
 
90,427

 
 
21,183

 
 
483,880

 
 
35,553

 
9,492

 
 
5,480

 
 
81,656

 
 
21,466

 
 
444,563

 
 
35,720

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,480

 
 
—

 
 
21,466

 
 
—

 
 
35,720

 
 
—

$
14,972

 
$
5,480

 
$
103,122

 
$
21,466

 
$
480,283

 
$
35,720


95


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ClearBridge Small Cap Growth
Series II Division (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
Increase (decrease) in net assets
 
 
 
Operations:
 
 
 
 
Net investment income (loss)
$
(48)

 
 
Total realized gains (losses) on investments
 
126

 
 
Change in net unrealized appreciation or depreciation of investments
 
(514)

 
 
Net gains (losses) from investments
 
(436)

 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
(436)

 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
8,977

 
 
Administration charges
 
(5)

 
 
Contingent sales charges
 
—

 
 
Contract terminations
 
—

 
 
Death benefit payments
 
—

 
 
Flexible withdrawal option payments
 
—

 
 
Transfers to other contracts
 
—

 
 
Annuity payments
 
—

 
Increase (decrease) in net assets from policy related transactions
 
8,972

 
Total increase (decrease)
 
8,536

 
 
 
 
 
 
 
Net assets at beginning of period
 
—

 
Net assets at end of period
$
8,536

 
 
 
 
 
 
 
 
 
 
 
 
 
(1)    Commenced operations May 18, 2015.

See accompanying notes.
 
 
 
 

96


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Columbia Limited Duration Credit
Class 2 Division (1)
 
Columbia Small Cap Value Class 2
Division (1)
 
Delaware Limited Term Diversified Income Service
Class Division (1)
 
 
 
 
 
 
 
 
2015
 
2015
 
2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(600)

 
$
(216)

 
$
(89)

 
(17)

 
 
3,168

 
 
(1)

 
(2,769)

 
 
(9,429)

 
 
(1,282)

 
(3,386)

 
 
(6,477)

 
 
(1,372)

 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
(3,386)

 
 
(6,477)

 
 
(1,372)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
146,269

 
 
82,607

 
 
230,703

 
(7)

 
 
(38)

 
 
(1)

 
(3)

 
 
—

 
 
—

 
(301)

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
(1,320)

 
 
—

 
 
(2,640)

 
(987)

 
 
(997)

 
 
—

 
—

 
 
—

 
 
—

 
143,651

 
 
81,572

 
 
228,062

 
140,265

 
 
75,095

 
 
226,690

 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

$
140,265

 
$
75,095

 
$
226,690


97


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Delaware Small Cap Value
Service Class Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
Increase (decrease) in net assets
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
Net investment income (loss)
$
(10,295)

 
$
(6,946)

 
 
Total realized gains (losses) on investments
 
60,296

 
 
50,553

 
 
Change in net unrealized appreciation or depreciation of investments
 
(143,899)

 
 
(24,718)

 
 
Net gains (losses) from investments
 
(93,898)

 
 
18,889

 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
(93,898)

 
 
18,889

 
 
 
 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
613,946

 
 
805,377

 
 
Administration charges
 
(5)

 
 
(7)

 
 
Contingent sales charges
 
(695)

 
 
(415)

 
 
Contract terminations
 
(88,431)

 
 
(44,694)

 
 
Death benefit payments
 
(727)

 
 
(686)

 
 
Flexible withdrawal option payments
 
(2,452)

 
 
(2,147)

 
 
Transfers to other contracts
 
(164,705)

 
 
(292,798)

 
 
Annuity payments
 
—

 
 
—

 
Increase (decrease) in net assets from policy related transactions
 
356,931

 
 
464,630

 
Total increase (decrease)
 
263,033

 
 
483,519

 
 
 
 
 
 
 
 
 
 
Net assets at beginning of period
 
745,584

 
 
262,065

 
Net assets at end of period
$
1,008,617

 
$
745,584

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)     Represented the operations of DWS Alternative Asset Allocation Class B Division until May 18, 2015.
(2)     Represented the operations of DWS Equity 500 Index Class B2 Division until May 18, 2015.
(3)     Represented the operations of DWS Small Mid Cap Value Class B Division until May 18, 2015.

See accompanying notes.
 
 
 
 

98


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deutsche Alternative Asset Allocation
Class B Division (1)
 
Deutsche Equity 500 Index
Class B2 Division (2)
 
Deutsche Small Mid Cap Value
Class B Division (3)
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(255)

 
$
—

 
$
32

 
$
(38)

 
$
(11,838)

 
$
(4,637)

 
(43)

 
 
—

 
 
23,042

 
 
—

 
 
68,471

 
 
6,238

 
(1,747)

 
 
—

 
 
(31,577)

 
 
776

 
 
(104,085)

 
 
18,717

 
(2,045)

 
 
—

 
 
(8,503)

 
 
738

 
 
(47,452)

 
 
20,318

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(2,045)

 
 
—

 
 
(8,503)

 
 
738

 
 
(47,452)

 
 
20,318

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
43,087

 
 
—

 
 
664,544

 
 
58,505

 
 
512,154

 
 
469,603

 
(32)

 
 
—

 
 
(646)

 
 
(4)

 
 
(131)

 
 
—

 
—

 
 
—

 
 
(126)

 
 
—

 
 
(194)

 
 
(145)

 
—

 
 
—

 
 
(11,546)

 
 
—

 
 
(22,290)

 
 
(13,984)

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
(720)

 
 
—

 
 
(2,259)

 
 
—

 
 
(5,528)

 
 
(535)

 
—

 
 
—

 
 
(22,263)

 
 
—

 
 
(98,976)

 
 
(6,630)

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
42,335

 
 
—

 
 
627,704

 
 
58,501

 
 
385,035

 
 
448,309

 
40,290

 
 
—

 
 
619,201

 
 
59,239

 
 
337,583

 
 
468,627

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
59,239

 
 
—

 
 
615,048

 
 
146,421

$
40,290

 
$
—

 
$
678,440

 
$
59,239

 
$
952,631

 
$
615,048


99


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diversified Balanced Class 2 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
Increase (decrease) in net assets
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
Net investment income (loss)
$
(4,644,265)

 
$
(5,103,248)

 
 
Total realized gains (losses) on investments
 
24,947,316

 
 
17,226,049

 
 
Change in net unrealized appreciation or depreciation of investments
 
(33,963,056)

 
 
41,256,299

 
 
Net gains (losses) from investments
 
(13,660,005)

 
 
53,379,100

 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
(13,660,005)

 
 
53,379,100

 
 
 
 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
148,297,223

 
 
204,475,928

 
 
Administration charges
 
(10,208,600)

 
 
(8,816,823)

 
 
Contingent sales charges
 
(307,866)

 
 
(321,133)

 
 
Contract terminations
 
(33,834,764)

 
 
(29,923,921)

 
 
Death benefit payments
 
(4,339,389)

 
 
(4,446,014)

 
 
Flexible withdrawal option payments
 
(15,733,181)

 
 
(11,235,966)

 
 
Transfers to other contracts
 
(50,351,557)

 
 
(48,479,767)

 
 
Annuity payments
 
—

 
 
—

 
Increase (decrease) in net assets from policy related transactions
 
33,521,866

 
 
101,252,304

 
Total increase (decrease)
 
19,861,861

 
 
154,631,404

 
 
 
 
 
 
 
 
 
 
Net assets at beginning of period
 
1,011,135,001

 
 
856,503,597

 
Net assets at end of period
$
1,030,996,862

 
$
1,011,135,001

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 

100


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diversified Balanced Managed Volatility
Class 2 Division
 
Diversified Growth Class 2 Division
 
Diversified Growth Managed Volatility
Class 2 Division
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(679,830)

 
$
(571,146)

 
$
(12,551,749)

 
$
(11,978,249)

 
$
(801,008)

 
$
(1,091,587)

 
1,263,372

 
 
69,141

 
 
51,530,795

 
 
40,149,285

 
 
2,388,724

 
 
166,250

 
(2,817,972)

 
 
2,805,987

 
 
(82,522,145)

 
 
129,051,299

 
 
(5,771,107)

 
 
5,573,416

 
(2,234,430)

 
 
2,303,982

 
 
(43,543,099)

 
 
157,222,335

 
 
(4,183,391)

 
 
4,648,079

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(2,234,430)

 
 
2,303,982

 
 
(43,543,099)

 
 
157,222,335

 
 
(4,183,391)

 
 
4,648,079

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
81,082,062

 
 
85,991,855

 
 
607,720,734

 
 
707,153,835

 
 
130,875,606

 
 
151,901,026

 
(1,345,576)

 
 
(432,397)

 
 
(31,268,064)

 
 
(24,520,132)

 
 
(2,220,053)

 
 
(842,149)

 
(26,521)

 
 
(3,771)

 
 
(737,875)

 
 
(663,488)

 
 
(35,183)

 
 
(11,131)

 
(2,855,738)

 
 
(364,095)

 
 
(82,565,699)

 
 
(61,042,314)

 
 
(3,695,433)

 
 
(1,020,805)

 
(159,363)

 
 
(83,506)

 
 
(5,252,123)

 
 
(7,369,365)

 
 
(713,173)

 
 
—

 
(1,724,784)

 
 
(426,709)

 
 
(34,611,268)

 
 
(23,673,228)

 
 
(1,886,963)

 
 
(597,960)

 
(18,902,170)

 
 
(3,317,816)

 
 
(89,103,085)

 
 
(67,768,174)

 
 
(17,124,645)

 
 
(6,430,729)

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
56,067,910

 
 
81,363,561

 
 
364,182,620

 
 
522,117,134

 
 
105,200,156

 
 
142,998,252

 
53,833,480

 
 
83,667,543

 
 
320,639,521

 
 
679,339,469

 
 
101,016,765

 
 
147,646,331

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
84,544,416

 
 
876,873

 
 
2,881,637,488

 
 
2,202,298,019

 
 
151,625,281

 
 
3,978,950

$
138,377,896

 
$
84,544,416

 
$
3,202,277,009

 
$
2,881,637,488

 
$
252,642,046

 
$
151,625,281


101


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diversified Income Class 2 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
Increase (decrease) in net assets
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
Net investment income (loss)
$
(1,185,330)

 
$
(1,183,394)

 
 
Total realized gains (losses) on investments
 
4,025,045

 
 
2,826,894

 
 
Change in net unrealized appreciation or depreciation of investments
 
(5,329,705)

 
 
5,516,168

 
 
Net gains (losses) from investments
 
(2,489,990)

 
 
7,159,668

 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
(2,489,990)

 
 
7,159,668

 
 
 
 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
83,072,684

 
 
88,489,565

 
 
Administration charges
 
(1,863,532)

 
 
(1,327,401)

 
 
Contingent sales charges
 
(106,534)

 
 
(66,865)

 
 
Contract terminations
 
(11,739,459)

 
 
(5,030,610)

 
 
Death benefit payments
 
(771,288)

 
 
(307,790)

 
 
Flexible withdrawal option payments
 
(2,907,293)

 
 
(1,893,484)

 
 
Transfers to other contracts
 
(32,923,101)

 
 
(30,584,567)

 
 
Annuity payments
 
—

 
 
—

 
Increase (decrease) in net assets from policy related transactions
 
32,761,477

 
 
49,278,848

 
Total increase (decrease)
 
30,271,487

 
 
56,438,516

 
 
 
 
 
 
 
 
 
 
Net assets at beginning of period
 
168,519,198

 
 
112,080,682

 
Net assets at end of period
$
198,790,685

 
$
168,519,198

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)    Commenced operations May 18, 2015.

See accompanying notes.
 
 
 
 

102


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diversified International Class 1 Division
 
Diversified International Class 2 Division
 
Dreyfus IP MidCap Stock Service
Shares Division (1)
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2014
 
2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
1,743,240

 
$
1,403,412

 
$
2,903

 
$
(10)

 
$
(142)

 
2,833,709

 
 
2,123,040

 
 
197

 
 
—

 
 
(4)

 
(6,432,512)

 
 
(10,768,603)

 
 
(17,869)

 
 
(233)

 
 
(101)

 
(1,855,563)

 
 
(7,242,151)

 
 
(14,769)

 
 
(243)

 
 
(247)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1,855,563)

 
 
(7,242,151)

 
 
(14,769)

 
 
(243)

 
 
(247)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
14,634,219

 
 
18,781,531

 
 
222,972

 
 
26,250

 
 
44,969

 
(111,940)

 
 
(131,204)

 
 
(208)

 
 
(1)

 
 
(19)

 
(62,004)

 
 
(78,131)

 
 
(95)

 
 
—

 
 
—

 
(16,496,579)

 
 
(21,015,046)

 
 
(8,764)

 
 
—

 
 
—

 
(831,074)

 
 
(934,159)

 
 
—

 
 
—

 
 
—

 
(1,662,894)

 
 
(1,745,516)

 
 
—

 
 
—

 
 
—

 
(11,604,130)

 
 
(16,641,375)

 
 
(14,946)

 
 
—

 
 
(1,028)

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
(16,134,402)

 
 
(21,763,900)

 
 
198,959

 
 
26,249

 
 
43,922

 
(17,989,965)

 
 
(29,006,051)

 
 
184,190

 
 
26,006

 
 
43,675

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
154,008,936

 
 
183,014,987

 
 
26,006

 
 
—

 
 
—

$
136,018,971

 
$
154,008,936

 
$
210,196

 
$
26,006

 
$
43,675


103


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dreyfus Investment Portfolio Technology Growth Service Shares Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
Increase (decrease) in net assets
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
Net investment income (loss)
$
(85,228)

 
$
(74,402)

 
 
Total realized gains (losses) on investments
 
752,088

 
 
601,919

 
 
Change in net unrealized appreciation or depreciation of investments
 
(450,567)

 
 
(337,264)

 
 
Net gains (losses) from investments
 
216,293

 
 
190,253

 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
216,293

 
 
190,253

 
 
 
 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
2,001,336

 
 
2,026,813

 
 
Administration charges
 
(576)

 
 
(458)

 
 
Contingent sales charges
 
(2,512)

 
 
(3,956)

 
 
Contract terminations
 
(283,401)

 
 
(381,970)

 
 
Death benefit payments
 
(56,253)

 
 
(35,378)

 
 
Flexible withdrawal option payments
 
(49,500)

 
 
(33,686)

 
 
Transfers to other contracts
 
(660,895)

 
 
(1,326,074)

 
 
Annuity payments
 
—

 
 
—

 
Increase (decrease) in net assets from policy related transactions
 
948,199

 
 
245,291

 
Total increase (decrease)
 
1,164,492

 
 
435,544

 
 
 
 
 
 
 
 
 
 
Net assets at beginning of period
 
5,040,592

 
 
4,605,048

 
Net assets at end of period
$
6,205,084

 
$
5,040,592

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 

104


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity Income Class 1 Division
 
Equity Income Class 2 Division
 
Fidelity VIP Contrafund
Service Class Division
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
2,327,082

 
$
2,471,246

 
$
14,151

 
$
(56)

 
$
(186,829)

 
$
(236,480)

 
18,361,241

 
 
21,436,943

 
 
(706)

 
 
—

 
 
5,952,857

 
 
3,370,695

 
(32,719,713)

 
 
5,170,721

 
 
(73,132)

 
 
1,334

 
 
(6,027,355)

 
 
1,670,519

 
(12,031,390)

 
 
29,078,910

 
 
(59,687)

 
 
1,278

 
 
(261,327)

 
 
4,804,734

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(12,031,390)

 
 
29,078,910

 
 
(59,687)

 
 
1,278

 
 
(261,327)

 
 
4,804,734

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
26,323,857

 
 
31,779,340

 
 
1,035,730

 
 
79,875

 
 
1,597,789

 
 
2,487,812

 
(795,423)

 
 
(998,503)

 
 
(867)

 
 
(8)

 
 
(8,542)

 
 
(10,159)

 
(180,753)

 
 
(262,012)

 
 
(274)

 
 
—

 
 
(4,817)

 
 
(7,420)

 
(24,867,854)

 
 
(32,445,348)

 
 
(25,196)

 
 
—

 
 
(4,291,254)

 
 
(6,018,328)

 
(2,019,345)

 
 
(1,887,061)

 
 
(599)

 
 
—

 
 
(157,093)

 
 
(210,974)

 
(5,951,129)

 
 
(6,229,853)

 
 
(9,470)

 
 
—

 
 
(554,040)

 
 
(537,444)

 
(31,771,106)

 
 
(53,668,427)

 
 
(14,753)

 
 
—

 
 
(2,289,887)

 
 
(3,444,101)

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
(39,261,753)

 
 
(63,711,864)

 
 
984,571

 
 
79,867

 
 
(5,707,844)

 
 
(7,740,614)

 
(51,293,143)

 
 
(34,632,954)

 
 
924,884

 
 
81,145

 
 
(5,969,171)

 
 
(2,935,880)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
258,966,880

 
 
293,599,834

 
 
81,145

 
 
—

 
 
48,139,718

 
 
51,075,598

$
207,673,737

 
$
258,966,880

 
$
1,006,029

 
$
81,145

 
$
42,170,547

 
$
48,139,718


105


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fidelity VIP Contrafund
Service Class 2 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
Increase (decrease) in net assets
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
Net investment income (loss)
$
(357,371)

 
$
(417,871)

 
 
Total realized gains (losses) on investments
 
6,331,549

 
 
2,687,837

 
 
Change in net unrealized appreciation or depreciation of investments
 
(6,432,389)

 
 
2,939,300

 
 
Net gains (losses) from investments
 
(458,211)

 
 
5,209,266

 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
(458,211)

 
 
5,209,266

 
 
 
 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
10,439,325

 
 
9,210,767

 
 
Administration charges
 
(109,943)

 
 
(128,019)

 
 
Contingent sales charges
 
(45,617)

 
 
(48,448)

 
 
Contract terminations
 
(5,136,128)

 
 
(4,677,758)

 
 
Death benefit payments
 
(397,888)

 
 
(554,403)

 
 
Flexible withdrawal option payments
 
(844,779)

 
 
(768,536)

 
 
Transfers to other contracts
 
(7,778,786)

 
 
(8,941,072)

 
 
Annuity payments
 
—

 
 
—

 
Increase (decrease) in net assets from policy related transactions
 
(3,873,816)

 
 
(5,907,469)

 
Total increase (decrease)
 
(4,332,027)

 
 
(698,203)

 
 
 
 
 
 
 
 
 
 
Net assets at beginning of period
 
55,141,526

 
 
55,839,729

 
Net assets at end of period
$
50,809,499

 
$
55,141,526

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 

106


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fidelity VIP Equity-Income
Service Class 2 Division
 
Fidelity VIP Growth Service Class Division
 
Fidelity VIP Growth Service Class 2 Division
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
515,186

 
$
457,675

 
$
(169,074)

 
$
(194,960)

 
$
(144,277)

 
$
(136,449)

 
3,827,546

 
 
872,820

 
 
1,346,077

 
 
1,066,857

 
 
1,183,686

 
 
653,557

 
(6,251,868)

 
 
1,250,674

 
 
(336,213)

 
 
627,231

 
 
(541,150)

 
 
258,174

 
(1,909,136)

 
 
2,581,169

 
 
840,790

 
 
1,499,128

 
 
498,259

 
 
775,282

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1,909,136)

 
 
2,581,169

 
 
840,790

 
 
1,499,128

 
 
498,259

 
 
775,282

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,997,713

 
 
3,512,477

 
 
786,926

 
 
754,685

 
 
2,931,834

 
 
3,479,922

 
(5,586)

 
 
(6,690)

 
 
(3,401)

 
 
(4,015)

 
 
(1,271)

 
 
(1,314)

 
(16,443)

 
 
(17,558)

 
 
(1,636)

 
 
(2,434)

 
 
(8,880)

 
 
(11,418)

 
(4,446,515)

 
 
(4,752,614)

 
 
(1,457,604)

 
 
(1,973,920)

 
 
(1,001,787)

 
 
(1,102,425)

 
(353,785)

 
 
(210,028)

 
 
(93,984)

 
 
(269,572)

 
 
(34,768)

 
 
(3,814)

 
(434,131)

 
 
(397,723)

 
 
(142,151)

 
 
(152,175)

 
 
(51,248)

 
 
(36,420)

 
(1,903,882)

 
 
(2,873,880)

 
 
(920,669)

 
 
(1,304,407)

 
 
(1,788,406)

 
 
(2,004,111)

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
(4,162,629)

 
 
(4,746,016)

 
 
(1,832,519)

 
 
(2,951,838)

 
 
45,474

 
 
320,420

 
(6,071,765)

 
 
(2,164,847)

 
 
(991,729)

 
 
(1,452,710)

 
 
543,733

 
 
1,095,702

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
37,543,510

 
 
39,708,357

 
 
15,184,681

 
 
16,637,391

 
 
9,441,585

 
 
8,345,883

$
31,471,745

 
$
37,543,510

 
$
14,192,952

 
$
15,184,681

 
$
9,985,318

 
$
9,441,585


107


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fidelity VIP Mid Cap Service Class Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
Increase (decrease) in net assets
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
Net investment income (loss)
$
(396)

 
$
(167)

 
 
Total realized gains (losses) on investments
 
8,378

 
 
541

 
 
Change in net unrealized appreciation or depreciation of investments
 
(9,712)

 
 
803

 
 
Net gains (losses) from investments
 
(1,730)

 
 
1,177

 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
(1,730)

 
 
1,177

 
 
 
 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
—

 
 
70,000

 
 
Administration charges
 
—

 
 
—

 
 
Contingent sales charges
 
—

 
 
—

 
 
Contract terminations
 
—

 
 
—

 
 
Death benefit payments
 
—

 
 
—

 
 
Flexible withdrawal option payments
 
—

 
 
—

 
 
Transfers to other contracts
 
—

 
 
—

 
 
Annuity payments
 
—

 
 
—

 
Increase (decrease) in net assets from policy related transactions
 
—

 
 
70,000

 
Total increase (decrease)
 
(1,730)

 
 
71,177

 
 
 
 
 
 
 
 
 
 
Net assets at beginning of period
 
71,177

 
 
—

 
Net assets at end of period
$
69,447

 
$
71,177

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 

108


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fidelity VIP Mid Cap Service Class 2 Division
 
Fidelity VIP Overseas Service Class 2 Division
 
Franklin Global Real Estate VIP
Class 2 Division
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(230,201)

 
$
(242,325)

 
$
(140,166)

 
$
(191,950)

 
$
8,813

 
$
(23)

 
2,522,045

 
 
921,737

 
 
3,636,125

 
 
(196,348)

 
 
(3,729)

 
 
—

 
(2,950,636)

 
 
71,824

 
 
(2,528,939)

 
 
(3,762,189)

 
 
(16,233)

 
 
69

 
(658,792)

 
 
751,236

 
 
967,020

 
 
(4,150,487)

 
 
(11,149)

 
 
46

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(658,792)

 
 
751,236

 
 
967,020

 
 
(4,150,487)

 
 
(11,149)

 
 
46

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,265,430

 
 
5,110,604

 
 
6,100,177

 
 
10,194,179

 
 
522,134

 
 
41,465

 
(2,071)

 
 
(1,449)

 
 
(131,466)

 
 
(160,352)

 
 
(365)

 
 
(1)

 
(13,152)

 
 
(16,516)

 
 
(35,886)

 
 
(49,635)

 
 
(87)

 
 
—

 
(1,481,963)

 
 
(1,594,709)

 
 
(4,051,999)

 
 
(4,792,388)

 
 
(8,410)

 
 
—

 
(109,265)

 
 
(20,631)

 
 
(287,764)

 
 
(181,974)

 
 
—

 
 
—

 
(129,565)

 
 
(102,057)

 
 
(807,640)

 
 
(845,535)

 
 
—

 
 
—

 
(1,559,897)

 
 
(1,494,401)

 
 
(8,016,886)

 
 
(8,034,475)

 
 
(46,920)

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
1,969,517

 
 
1,880,841

 
 
(7,231,464)

 
 
(3,870,180)

 
 
466,352

 
 
41,464

 
1,310,725

 
 
2,632,077

 
 
(6,264,444)

 
 
(8,020,667)

 
 
455,203

 
 
41,510

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
17,955,535

 
 
15,323,458

 
 
37,741,368

 
 
45,762,035

 
 
41,510

 
 
—

$
19,266,260

 
$
17,955,535

 
$
31,476,924

 
$
37,741,368

 
$
496,713

 
$
41,510


109


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Franklin Rising Dividends VIP
Class 4 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
Increase (decrease) in net assets
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
Net investment income (loss)
$
783

 
$
(46)

 
 
Total realized gains (losses) on investments
 
35,166

 
 
502

 
 
Change in net unrealized appreciation or depreciation of investments
 
(53,955)

 
 
595

 
 
Net gains (losses) from investments
 
(18,006)

 
 
1,051

 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
(18,006)

 
 
1,051

 
 
 
 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
443,109

 
 
70,331

 
 
Administration charges
 
(481)

 
 
(2)

 
 
Contingent sales charges
 
(14)

 
 
—

 
 
Contract terminations
 
(1,254)

 
 
—

 
 
Death benefit payments
 
(299)

 
 
—

 
 
Flexible withdrawal option payments
 
(4,518)

 
 
—

 
 
Transfers to other contracts
 
(20,001)

 
 
—

 
 
Annuity payments
 
—

 
 
—

 
Increase (decrease) in net assets from policy related transactions
 
416,542

 
 
70,329

 
Total increase (decrease)
 
398,536

 
 
71,380

 
 
 
 
 
 
 
 
 
 
Net assets at beginning of period
 
71,380

 
 
—

 
Net assets at end of period
$
469,916

 
$
71,380

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 

110


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Franklin Small Cap Value VIP
Class 2 Division
 
Goldman Sachs VIT Mid Cap Value Institutional Shares Division
 
Goldman Sachs VIT Mid Cap Value
Service Shares Division
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(28,575)

 
$
(29,743)

 
$
(185,072)

 
$
(94,635)

 
$
(3,661)

 
$
64

 
591,494

 
 
529,980

 
 
1,430,586

 
 
3,778,415

 
 
36,133

 
 
363

 
(872,202)

 
 
(547,683)

 
 
(3,039,327)

 
 
(1,635,687)

 
 
(85,686)

 
 
7

 
(309,283)

 
 
(47,446)

 
 
(1,793,813)

 
 
2,048,093

 
 
(53,214)

 
 
434

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(309,283)

 
 
(47,446)

 
 
(1,793,813)

 
 
2,048,093

 
 
(53,214)

 
 
434

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
783,593

 
 
1,346,893

 
 
3,023,991

 
 
5,232,222

 
 
526,409

 
 
17,029

 
(5)

 
 
(183)

 
 
(1,187)

 
 
(1,732)

 
 
(245)

 
 
(1)

 
(2,189)

 
 
(2,891)

 
 
(19,913)

 
 
(22,162)

 
 
(193)

 
 
—

 
(285,364)

 
 
(328,142)

 
 
(2,259,462)

 
 
(2,147,707)

 
 
(17,719)

 
 
—

 
(29,378)

 
 
(23,159)

 
 
(60,543)

 
 
(60,524)

 
 
(292)

 
 
—

 
(13,711)

 
 
(8,950)

 
 
(144,313)

 
 
(122,263)

 
 
—

 
 
—

 
(468,763)

 
 
(853,228)

 
 
(2,385,747)

 
 
(4,398,344)

 
 
(3,262)

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
(15,817)

 
 
130,340

 
 
(1,847,174)

 
 
(1,520,510)

 
 
504,698

 
 
17,028

 
(325,100)

 
 
82,894

 
 
(3,640,987)

 
 
527,583

 
 
451,484

 
 
17,462

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3,577,341

 
 
3,494,447

 
 
18,542,627

 
 
18,015,044

 
 
17,462

 
 
—

$
3,252,241

 
$
3,577,341

 
$
14,901,640

 
$
18,542,627

 
$
468,946

 
$
17,462


111


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Goldman Sachs VIT Multi-Strategy Alternatives Portfolio Service
Shares Division (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
Increase (decrease) in net assets
 
 
 
Operations:
 
 
 
 
Net investment income (loss)
$
196

 
 
Total realized gains (losses) on investments
 
18

 
 
Change in net unrealized appreciation or depreciation of investments
 
(535)

 
 
Net gains (losses) from investments
 
(321)

 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
(321)

 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
12,500

 
 
Administration charges
 
—

 
 
Contingent sales charges
 
—

 
 
Contract terminations
 
—

 
 
Death benefit payments
 
—

 
 
Flexible withdrawal option payments
 
—

 
 
Transfers to other contracts
 
—

 
 
Annuity payments
 
—

 
Increase (decrease) in net assets from policy related transactions
 
12,500

 
Total increase (decrease)
 
12,179

 
 
 
 
 
 
 
Net assets at beginning of period
 
—

 
Net assets at end of period
$
12,179

 
 
 
 
 
 
 
 
 
 
 
 
 
(1)    Commenced operations May 18, 2015.

See accompanying notes.
 
 
 
 

112


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Goldman Sachs VIT Small Cap Equity Insights Institutional Shares Division
 
Goldman Sachs VIT Small Cap Equity Insights Service Shares Division
 
Government & High Quality Bond
Class 1 Division
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(79,957)

 
$
(49,658)

 
$
(781)

 
$
21

 
$
2,516,719

 
$
3,598,886

 
1,129,832

 
 
1,388,802

 
 
13,369

 
 
733

 
 
(251,780)

 
 
(203,842)

 
(1,288,027)

 
 
(984,276)

 
 
(20,751)

 
 
(554)

 
 
(2,913,168)

 
 
2,078,450

 
(238,152)

 
 
354,868

 
 
(8,163)

 
 
200

 
 
(648,229)

 
 
5,473,494

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(238,152)

 
 
354,868

 
 
(8,163)

 
 
200

 
 
(648,229)

 
 
5,473,494

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,050,298

 
 
1,391,718

 
 
113,930

 
 
4,978

 
 
12,419,375

 
 
18,915,882

 
(238)

 
 
(220)

 
 
(74)

 
 
—

 
 
(191,449)

 
 
(222,428)

 
(6,889)

 
 
(5,518)

 
 
—

 
 
—

 
 
(62,235)

 
 
(72,910)

 
(778,536)

 
 
(532,771)

 
 
—

 
 
—

 
 
(14,653,632)

 
 
(18,735,952)

 
(94,178)

 
 
(132,235)

 
 
—

 
 
—

 
 
(1,800,129)

 
 
(1,334,777)

 
(47,557)

 
 
(46,428)

 
 
—

 
 
—

 
 
(3,114,987)

 
 
(3,288,604)

 
(669,514)

 
 
(1,215,324)

 
 
(3,749)

 
 
—

 
 
(11,643,312)

 
 
(19,320,034)

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
(546,614)

 
 
(540,778)

 
 
110,107

 
 
4,978

 
 
(19,046,369)

 
 
(24,058,823)

 
(784,766)

 
 
(185,910)

 
 
101,944

 
 
5,178

 
 
(19,694,598)

 
 
(18,585,329)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6,977,815

 
 
7,163,725

 
 
5,178

 
 
—

 
 
141,358,650

 
 
159,943,979

$
6,193,049

 
$
6,977,815

 
$
107,122

 
$
5,178

 
$
121,664,052

 
$
141,358,650


113


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Government & High Quality Bond
Class 2 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
Increase (decrease) in net assets
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
Net investment income (loss)
$
21,093

 
$
(14)

 
 
Total realized gains (losses) on investments
 
733

 
 
(12)

 
 
Change in net unrealized appreciation or depreciation of investments
 
(34,980)

 
 
18

 
 
Net gains (losses) from investments
 
(13,154)

 
 
(8)

 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
(13,154)

 
 
(8)

 
 
 
 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
1,056,425

 
 
19,934

 
 
Administration charges
 
(964)

 
 
(2)

 
 
Contingent sales charges
 
(160)

 
 
—

 
 
Contract terminations
 
(14,662)

 
 
—

 
 
Death benefit payments
 
—

 
 
—

 
 
Flexible withdrawal option payments
 
(3,616)

 
 
—

 
 
Transfers to other contracts
 
(41,238)

 
 
—

 
 
Annuity payments
 
—

 
 
—

 
Increase (decrease) in net assets from policy related transactions
 
995,785

 
 
19,932

 
Total increase (decrease)
 
982,631

 
 
19,924

 
 
 
 
 
 
 
 
 
 
Net assets at beginning of period
 
19,924

 
 
—

 
Net assets at end of period
$
1,002,555

 
$
19,924

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 

114


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Guggenheim Floating Rate Strategies
Series F Division
 
Guggenheim Investments Global Managed Futures Strategy Division
 
Guggenheim Investments Long
Short Equity Division
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
4,859

 
$
(14)

 
$
1,606

 
$
(6)

 
$
(1,323)

 
$
(15)

 
(4,354)

 
 
—

 
 
2,568

 
 
—

 
 
348

 
 
—

 
(20,662)

 
 
(75)

 
 
(9,969)

 
 
337

 
 
(453)

 
 
—

 
(20,157)

 
 
(89)

 
 
(5,795)

 
 
331

 
 
(1,428)

 
 
(15)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(20,157)

 
 
(89)

 
 
(5,795)

 
 
331

 
 
(1,428)

 
 
(15)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,035,121

 
 
12,997

 
 
110,546

 
 
21,000

 
 
148,724

 
 
42,874

 
(73)

 
 
—

 
 
(129)

 
 
—

 
 
(38)

 
 
—

 
(649)

 
 
—

 
 
—

 
 
—

 
 
(1)

 
 
—

 
(73,160)

 
 
—

 
 
—

 
 
—

 
 
(99)

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
(1,804)

 
 
—

 
 
(317)

 
 
—

 
 
—

 
 
—

 
(164,975)

 
 
—

 
 
(11,578)

 
 
—

 
 
(12,663)

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
794,460

 
 
12,997

 
 
98,522

 
 
21,000

 
 
135,923

 
 
42,874

 
774,303

 
 
12,908

 
 
92,727

 
 
21,331

 
 
134,495

 
 
42,859

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
12,908

 
 
—

 
 
21,331

 
 
—

 
 
42,859

 
 
—

$
787,211

 
$
12,908

 
$
114,058

 
$
21,331

 
$
177,354

 
$
42,859


115


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Guggenheim Investments Multi-Hedge Strategies Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
Increase (decrease) in net assets
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
Net investment income (loss)
$
(370)

 
$
(6)

 
 
Total realized gains (losses) on investments
 
(84)

 
 
—

 
 
Change in net unrealized appreciation or depreciation of investments
 
(142)

 
 
115

 
 
Net gains (losses) from investments
 
(596)

 
 
109

 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
(596)

 
 
109

 
 
 
 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
95,362

 
 
7,761

 
 
Administration charges
 
(39)

 
 
(1)

 
 
Contingent sales charges
 
(1)

 
 
—

 
 
Contract terminations
 
(99)

 
 
—

 
 
Death benefit payments
 
—

 
 
—

 
 
Flexible withdrawal option payments
 
—

 
 
—

 
 
Transfers to other contracts
 
(14,696)

 
 
—

 
 
Annuity payments
 
—

 
 
—

 
Increase (decrease) in net assets from policy related transactions
 
80,527

 
 
7,760

 
Total increase (decrease)
 
79,931

 
 
7,869

 
 
 
 
 
 
 
 
 
 
Net assets at beginning of period
 
7,869

 
 
—

 
Net assets at end of period
$
87,800

 
$
7,869

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)    Commenced operations May 18, 2015.

See accompanying notes.
 
 
 
 

116


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Guggenheim Macro Opportunities
Series M Division
 
Income Class 1 Division (1)
 
Income Class 2 Division (1)
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
1,149

 
$
(1)

 
$
7,307

 
$
617

 
190

 
 
(6)

 
 
(1,904)

 
 
(825)

 
(6,305)

 
 
—

 
 
(14,624)

 
 
(137)

 
(4,966)

 
 
(7)

 
 
(9,221)

 
 
(345)

 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
(4,966)

 
 
(7)

 
 
(9,221)

 
 
(345)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
225,034

 
 
7

 
 
605,521

 
 
28,432

 
(43)

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
(2)

 
 
—

 
—

 
 
—

 
 
(241)

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
(4,267)

 
 
—

 
(717)

 
 
—

 
 
(9,675)

 
 
(10,822)

 
—

 
 
—

 
 
—

 
 
—

 
224,274

 
 
7

 
 
591,336

 
 
17,610

 
219,308

 
 
—

 
 
582,115

 
 
17,265

 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

$
219,308

 
$
—

 
$
582,115

 
$
17,265


117


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
International Emerging Markets
Class 1 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
Increase (decrease) in net assets
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
Net investment income (loss)
$
156,207

 
$
(353,629)

 
 
Total realized gains (losses) on investments
 
(1,561,454)

 
 
(1,258,213)

 
 
Change in net unrealized appreciation or depreciation of investments
 
(7,499,679)

 
 
(1,840,421)

 
 
Net gains (losses) from investments
 
(8,904,926)

 
 
(3,452,263)

 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
(8,904,926)

 
 
(3,452,263)

 
 
 
 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
9,844,478

 
 
12,499,886

 
 
Administration charges
 
(7,754)

 
 
(9,693)

 
 
Contingent sales charges
 
(35,354)

 
 
(45,835)

 
 
Contract terminations
 
(6,671,281)

 
 
(8,523,548)

 
 
Death benefit payments
 
(244,634)

 
 
(344,250)

 
 
Flexible withdrawal option payments
 
(478,002)

 
 
(478,249)

 
 
Transfers to other contracts
 
(7,092,429)

 
 
(10,379,824)

 
 
Annuity payments
 
—

 
 
—

 
Increase (decrease) in net assets from policy related transactions
 
(4,684,976)

 
 
(7,281,513)

 
Total increase (decrease)
 
(13,589,902)

 
 
(10,733,776)

 
 
 
 
 
 
 
 
 
 
Net assets at beginning of period
 
64,254,651

 
 
74,988,427

 
Net assets at end of period
$
50,664,749

 
$
64,254,651

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)    Commenced operations May 18, 2015.

See accompanying notes.
 
 
 
 

118


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
International Emerging Markets Class 2 Division (1)
 
Invesco American Franchise Series I Division
 
Invesco Balanced-Risk Allocation
Series II Division
 
 
 
 
 
 
 
 
2015
 
2015
 
2014
 
2015
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
25

 
$
(58,372)

 
$
(59,847)

 
$
5,380

 
$
—

 
(23)

 
 
254,661

 
 
290,027

 
 
16,266

 
 
—

 
(2,729)

 
 
(24,532)

 
 
76,495

 
 
(37,280)

 
 
—

 
(2,727)

 
 
171,757

 
 
306,675

 
 
(15,634)

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(2,727)

 
 
171,757

 
 
306,675

 
 
(15,634)

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
35,857

 
 
292,097

 
 
221,988

 
 
207,357

 
 
—

 
(7)

 
 
(908)

 
 
(1,074)

 
 
(124)

 
 
—

 
—

 
 
(544)

 
 
(627)

 
 
—

 
 
—

 
—

 
 
(484,740)

 
 
(508,232)

 
 
—

 
 
—

 
—

 
 
(29,979)

 
 
(42,280)

 
 
—

 
 
—

 
—

 
 
(49,918)

 
 
(51,427)

 
 
—

 
 
—

 
—

 
 
(136,045)

 
 
(478,140)

 
 
(323)

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
35,850

 
 
(410,037)

 
 
(859,792)

 
 
206,910

 
 
—

 
33,123

 
 
(238,280)

 
 
(553,117)

 
 
191,276

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
4,607,004

 
 
5,160,121

 
 
—

 
 
—

$
33,123

 
$
4,368,724

 
$
4,607,004

 
$
191,276

 
$
—


119


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Invesco Core Equity Series I Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
Increase (decrease) in net assets
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
Net investment income (loss)
$
(38,679)

 
$
(105,817)

 
 
Total realized gains (losses) on investments
 
2,966,757

 
 
1,614,298

 
 
Change in net unrealized appreciation or depreciation of investments
 
(4,292,405)

 
 
(7,629)

 
 
Net gains (losses) from investments
 
(1,364,327)

 
 
1,500,852

 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
(1,364,327)

 
 
1,500,852

 
 
 
 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
759,713

 
 
1,230,692

 
 
Administration charges
 
(3,355)

 
 
(4,519)

 
 
Contingent sales charges
 
(1,906)

 
 
(3,310)

 
 
Contract terminations
 
(1,697,944)

 
 
(2,685,101)

 
 
Death benefit payments
 
(139,339)

 
 
(245,338)

 
 
Flexible withdrawal option payments
 
(294,518)

 
 
(313,019)

 
 
Transfers to other contracts
 
(935,226)

 
 
(1,606,399)

 
 
Annuity payments
 
—

 
 
—

 
Increase (decrease) in net assets from policy related transactions
 
(2,312,575)

 
 
(3,626,994)

 
Total increase (decrease)
 
(3,676,902)

 
 
(2,126,142)

 
 
 
 
 
 
 
 
 
 
Net assets at beginning of period
 
21,496,633

 
 
23,622,775

 
Net assets at end of period
$
17,819,731

 
$
21,496,633

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 

120


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Invesco Global Health Care Series I Division
 
Invesco Global Health Care Series II Division
 
Invesco International Growth Series I Division
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(150,654)

 
$
(135,465)

 
$
(6,549)

 
$
(46)

 
$
4,504

 
$
23,783

 
2,200,295

 
 
1,529,755

 
 
66,391

 
 
237

 
 
281,670

 
 
337,819

 
(1,850,670)

 
 
294,532

 
 
(110,805)

 
 
(397)

 
 
(689,168)

 
 
(512,905)

 
198,971

 
 
1,688,822

 
 
(50,963)

 
 
(206)

 
 
(402,994)

 
 
(151,303)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
198,971

 
 
1,688,822

 
 
(50,963)

 
 
(206)

 
 
(402,994)

 
 
(151,303)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,342,510

 
 
1,709,369

 
 
922,960

 
 
71,609

 
 
2,317,822

 
 
3,896,646

 
(2,472)

 
 
(2,385)

 
 
(477)

 
 
(3)

 
 
(20,401)

 
 
(23,486)

 
(1,367)

 
 
(1,358)

 
 
(244)

 
 
—

 
 
(5,114)

 
 
(7,339)

 
(1,218,076)

 
 
(1,101,342)

 
 
(22,419)

 
 
—

 
 
(576,983)

 
 
(708,622)

 
(116,359)

 
 
(48,851)

 
 
—

 
 
—

 
 
(68,389)

 
 
(48,573)

 
(165,323)

 
 
(149,142)

 
 
(1,607)

 
 
—

 
 
(86,275)

 
 
(60,613)

 
(1,392,953)

 
 
(1,656,924)

 
 
(104,431)

 
 
—

 
 
(1,422,431)

 
 
(1,324,604)

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
(554,040)

 
 
(1,250,633)

 
 
793,782

 
 
71,606

 
 
138,229

 
 
1,723,409

 
(355,069)

 
 
438,189

 
 
742,819

 
 
71,400

 
 
(264,765)

 
 
1,572,106

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10,917,261

 
 
10,479,072

 
 
71,400

 
 
—

 
 
10,425,490

 
 
8,853,384

$
10,562,192

 
$
10,917,261

 
$
814,219

 
$
71,400

 
$
10,160,725

 
$
10,425,490


121


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Invesco International Growth
Series II Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
Increase (decrease) in net assets
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
Net investment income (loss)
$
1,891

 
$
(24)

 
 
Total realized gains (losses) on investments
 
467

 
 
(220)

 
 
Change in net unrealized appreciation or depreciation of investments
 
(32,194)

 
 
(76)

 
 
Net gains (losses) from investments
 
(29,836)

 
 
(320)

 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
(29,836)

 
 
(320)

 
 
 
 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
439,861

 
 
32,552

 
 
Administration charges
 
(285)

 
 
(2)

 
 
Contingent sales charges
 
(10)

 
 
—

 
 
Contract terminations
 
(882)

 
 
—

 
 
Death benefit payments
 
—

 
 
—

 
 
Flexible withdrawal option payments
 
(191)

 
 
—

 
 
Transfers to other contracts
 
(12,018)

 
 
—

 
 
Annuity payments
 
—

 
 
—

 
Increase (decrease) in net assets from policy related transactions
 
426,475

 
 
32,550

 
Total increase (decrease)
 
396,639

 
 
32,230

 
 
 
 
 
 
 
 
 
 
Net assets at beginning of period
 
32,230

 
 
—

 
Net assets at end of period
$
428,869

 
$
32,230

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 

122


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Invesco Mid Cap Growth Series I Division
 
Invesco Small Cap Equity Series I Division
 
Invesco Technology Series I Division
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(20,666)

 
$
(21,473)

 
$
(127,287)

 
$
(137,584)

 
$
(46,386)

 
$
(47,568)

 
482,359

 
 
375,481

 
 
2,016,048

 
 
1,642,728

 
 
640,685

 
 
540,002

 
(459,061)

 
 
(250,833)

 
 
(2,480,337)

 
 
(1,438,151)

 
 
(412,929)

 
 
(177,191)

 
2,632

 
 
103,175

 
 
(591,576)

 
 
66,993

 
 
181,370

 
 
315,243

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,632

 
 
103,175

 
 
(591,576)

 
 
66,993

 
 
181,370

 
 
315,243

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
459,853

 
 
235,114

 
 
1,413,906

 
 
1,691,034

 
 
372,266

 
 
816,865

 
(289)

 
 
(252)

 
 
(10,113)

 
 
(10,869)

 
 
(244)

 
 
(352)

 
(222)

 
 
(239)

 
 
(4,703)

 
 
(5,584)

 
 
(441)

 
 
(318)

 
(197,600)

 
 
(193,773)

 
 
(840,380)

 
 
(925,774)

 
 
(393,113)

 
 
(258,213)

 
(7,745)

 
 
(12,755)

 
 
(39,310)

 
 
(60,353)

 
 
(129,071)

 
 
(3,379)

 
(20,226)

 
 
(17,669)

 
 
(98,534)

 
 
(91,960)

 
 
(36,384)

 
 
(41,124)

 
(195,687)

 
 
(231,937)

 
 
(1,228,625)

 
 
(1,958,863)

 
 
(314,437)

 
 
(481,811)

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
38,084

 
 
(221,511)

 
 
(807,759)

 
 
(1,362,369)

 
 
(501,424)

 
 
31,668

 
40,716

 
 
(118,336)

 
 
(1,399,335)

 
 
(1,295,376)

 
 
(320,054)

 
 
346,911

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,553,721

 
 
1,672,057

 
 
9,327,320

 
 
10,622,696

 
 
3,772,446

 
 
3,425,535

$
1,594,437

 
$
1,553,721

 
$
7,927,985

 
$
9,327,320

 
$
3,452,392

 
$
3,772,446


123


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Invesco Value Opportunities Series I Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
Increase (decrease) in net assets
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
Net investment income (loss)
$
55,969

 
$
(7,116)

 
 
Total realized gains (losses) on investments
 
718,631

 
 
357,914

 
 
Change in net unrealized appreciation or depreciation of investments
 
(1,361,289)

 
 
(76,879)

 
 
Net gains (losses) from investments
 
(586,689)

 
 
273,919

 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
(586,689)

 
 
273,919

 
 
 
 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
920,508

 
 
636,415

 
 
Administration charges
 
(16,359)

 
 
(19,404)

 
 
Contingent sales charges
 
(2,599)

 
 
(2,892)

 
 
Contract terminations
 
(293,189)

 
 
(279,217)

 
 
Death benefit payments
 
(86,354)

 
 
(20,338)

 
 
Flexible withdrawal option payments
 
(64,689)

 
 
(63,939)

 
 
Transfers to other contracts
 
(772,885)

 
 
(842,922)

 
 
Annuity payments
 
—

 
 
—

 
Increase (decrease) in net assets from policy related transactions
 
(315,567)

 
 
(592,297)

 
Total increase (decrease)
 
(902,256)

 
 
(318,378)

 
 
 
 
 
 
 
 
 
 
Net assets at beginning of period
 
5,347,559

 
 
5,665,937

 
Net assets at end of period
$
4,445,303

 
$
5,347,559

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 

124


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Janus Aspen Enterprise
Service Shares Division
 
Janus Aspen Flexible Bond
Service Shares Division
 
LargeCap Growth Class 1 Division
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(51,071)

 
$
(118,714)

 
$
6,089

 
$
316

 
$
(589,322)

 
$
(398,873)

 
1,699,557

 
 
1,502,811

 
 
2,330

 
 
(260)

 
 
3,556,456

 
 
4,042,057

 
(1,403,548)

 
 
(428,379)

 
 
(22,250)

 
 
(77)

 
 
(1,049,459)

 
 
1,327,791

 
244,938

 
 
955,718

 
 
(13,831)

 
 
(21)

 
 
1,917,675

 
 
4,970,975

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
244,938

 
 
955,718

 
 
(13,831)

 
 
(21)

 
 
1,917,675

 
 
4,970,975

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
463,698

 
 
312,129

 
 
754,108

 
 
72,683

 
 
5,779,961

 
 
6,099,882

 
(2,764)

 
 
(2,494)

 
 
(599)

 
 
(4)

 
 
(37,237)

 
 
(40,340)

 
(959)

 
 
(1,169)

 
 
(54)

 
 
—

 
 
(19,082)

 
 
(20,968)

 
(854,388)

 
 
(948,308)

 
 
(4,931)

 
 
—

 
 
(7,704,396)

 
 
(8,451,196)

 
(61,729)

 
 
(21,439)

 
 
(292)

 
 
—

 
 
(455,041)

 
 
(526,612)

 
(60,274)

 
 
(54,608)

 
 
(1,151)

 
 
—

 
 
(665,528)

 
 
(666,129)

 
(437,253)

 
 
(667,269)

 
 
(9,653)

 
 
—

 
 
(2,742,766)

 
 
(3,418,017)

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
(953,669)

 
 
(1,383,158)

 
 
737,428

 
 
72,679

 
 
(5,844,089)

 
 
(7,023,380)

 
(708,731)

 
 
(427,440)

 
 
723,597

 
 
72,658

 
 
(3,926,414)

 
 
(2,052,405)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
9,503,129

 
 
9,930,569

 
 
72,658

 
 
—

 
 
53,469,495

 
 
55,521,900

$
8,794,398

 
$
9,503,129

 
$
796,255

 
$
72,658

 
$
49,543,081

 
$
53,469,495


125


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LargeCap Growth Class 2 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
Increase (decrease) in net assets
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
Net investment income (loss)
$
(3,338)

 
$
(8)

 
 
Total realized gains (losses) on investments
 
1,311

 
 
(46)

 
 
Change in net unrealized appreciation or depreciation of investments
 
755

 
 
(73)

 
 
Net gains (losses) from investments
 
(1,272)

 
 
(127)

 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
(1,272)

 
 
(127)

 
 
 
 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
488,375

 
 
6,102

 
 
Administration charges
 
(277)

 
 
(1)

 
 
Contingent sales charges
 
(17)

 
 
—

 
 
Contract terminations
 
(1,595)

 
 
—

 
 
Death benefit payments
 
—

 
 
—

 
 
Flexible withdrawal option payments
 
(633)

 
 
—

 
 
Transfers to other contracts
 
(48,488)

 
 
—

 
 
Annuity payments
 
—

 
 
—

 
Increase (decrease) in net assets from policy related transactions
 
437,365

 
 
6,101

 
Total increase (decrease)
 
436,093

 
 
5,974

 
 
 
 
 
 
 
 
 
 
Net assets at beginning of period
 
5,974

 
 
—

 
Net assets at end of period
$
442,067

 
$
5,974

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)    Commenced operations May 18, 2015.

See accompanying notes.
 
 
 
 

126


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LargeCap Growth I Class 1 Division
 
LargeCap Growth I Class 2 Division (1)
 
LargeCap S&P 500 Index Class 1 Division
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2015
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(1,178,721)

 
$
(1,315,545)

 
$
(1,200)

 
$
101,428

 
$
(87,857)

 
21,613,871

 
 
27,667,480

 
 
58,885

 
 
8,876,654

 
 
8,026,434

 
(13,707,976)

 
 
(18,840,451)

 
 
(69,012)

 
 
(9,066,908)

 
 
3,249,988

 
6,727,174

 
 
7,511,484

 
 
(11,327)

 
 
(88,826)

 
 
11,188,565

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6,727,174

 
 
7,511,484

 
 
(11,327)

 
 
(88,826)

 
 
11,188,565

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,819,047

 
 
7,206,865

 
 
502,321

 
 
12,367,727

 
 
12,948,268

 
(32,264)

 
 
(34,261)

 
 
(40)

 
 
(67,555)

 
 
(78,673)

 
(22,483)

 
 
(25,671)

 
 
—

 
 
(45,950)

 
 
(41,253)

 
(8,729,110)

 
 
(10,905,256)

 
 
—

 
 
(10,132,170)

 
 
(11,230,074)

 
(1,095,484)

 
 
(584,928)

 
 
—

 
 
(511,844)

 
 
(309,060)

 
(1,046,816)

 
 
(1,036,617)

 
 
—

 
 
(1,340,338)

 
 
(1,338,106)

 
(5,203,875)

 
 
(7,423,740)

 
 
—

 
 
(10,227,245)

 
 
(9,965,557)

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
(10,310,985)

 
 
(12,803,608)

 
 
502,281

 
 
(9,957,375)

 
 
(10,014,455)

 
(3,583,811)

 
 
(5,292,124)

 
 
490,954

 
 
(10,046,201)

 
 
1,174,110

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
109,225,666

 
 
114,517,790

 
 
—

 
 
102,363,487

 
 
101,189,377

$
105,641,855

 
$
109,225,666

 
$
490,954

 
$
92,317,286

 
$
102,363,487


127


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LargeCap S&P 500 Index Class 2
Division (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
Increase (decrease) in net assets
 
 
 
Operations:
 
 
 
 
Net investment income (loss)
$
405

 
 
Total realized gains (losses) on investments
 
710

 
 
Change in net unrealized appreciation or depreciation of investments
 
(2,328)

 
 
Net gains (losses) from investments
 
(1,213)

 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
(1,213)

 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
154,007

 
 
Administration charges
 
(43)

 
 
Contingent sales charges
 
—

 
 
Contract terminations
 
—

 
 
Death benefit payments
 
—

 
 
Flexible withdrawal option payments
 
—

 
 
Transfers to other contracts
 
(1,763)

 
 
Annuity payments
 
—

 
Increase (decrease) in net assets from policy related transactions
 
152,201

 
Total increase (decrease)
 
150,988

 
 
 
 
 
 
 
Net assets at beginning of period
 
—

 
Net assets at end of period
$
150,988

 
 
 
 
 
 
 
 
 
 
 
 
 
(1)    Commenced operations May 18, 2015.

See accompanying notes.
 
 
 
 

128


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LargeCap Value Class 1 Division
 
LargeCap Value Class 2 Division (1)
 
MFS VIT International Value
Service Class Division
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2015
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
355,943

 
$
881,390

 
$
11

 
$
5,889

 
$
(53)

 
11,426,987

 
 
16,211,853

 
 
486

 
 
7,439

 
 
(233)

 
(13,740,865)

 
 
(8,506,475)

 
 
(352)

 
 
(16,783)

 
 
(582)

 
(1,957,935)

 
 
8,586,768

 
 
145

 
 
(3,455)

 
 
(868)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1,957,935)

 
 
8,586,768

 
 
145

 
 
(3,455)

 
 
(868)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,630,214

 
 
7,323,348

 
 
10,225

 
 
1,634,129

 
 
61,956

 
(67,653)

 
 
(80,393)

 
 
(9)

 
 
(391)

 
 
(4)

 
(21,751)

 
 
(24,385)

 
 
—

 
 
(251)

 
 
—

 
(8,906,081)

 
 
(10,408,631)

 
 
—

 
 
(27,121)

 
 
—

 
(1,048,917)

 
 
(985,462)

 
 
—

 
 
—

 
 
—

 
(1,260,641)

 
 
(1,314,265)

 
 
—

 
 
(5,694)

 
 
—

 
(4,629,833)

 
 
(7,136,991)

 
 
—

 
 
(94,948)

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
(10,304,662)

 
 
(12,626,779)

 
 
10,216

 
 
1,505,724

 
 
61,952

 
(12,262,597)

 
 
(4,040,011)

 
 
10,361

 
 
1,502,269

 
 
61,084

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
91,485,357

 
 
95,525,368

 
 
—

 
 
61,084

 
 
—

$
79,222,760

 
$
91,485,357

 
$
10,361

 
$
1,563,353

 
$
61,084


129


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MFS VIT New Discovery
Service Class Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
Increase (decrease) in net assets
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
Net investment income (loss)
$
(16,025)

 
$
(12,342)

 
 
Total realized gains (losses) on investments
 
(39,188)

 
 
153,886

 
 
Change in net unrealized appreciation or depreciation of investments
 
4,980

 
 
(212,134)

 
 
Net gains (losses) from investments
 
(50,233)

 
 
(70,590)

 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
(50,233)

 
 
(70,590)

 
 
 
 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
703,477

 
 
743,637

 
 
Administration charges
 
(41)

 
 
(17)

 
 
Contingent sales charges
 
(203)

 
 
(516)

 
 
Contract terminations
 
(38,286)

 
 
(97,304)

 
 
Death benefit payments
 
—

 
 
(306)

 
 
Flexible withdrawal option payments
 
(10,169)

 
 
(5,371)

 
 
Transfers to other contracts
 
(294,991)

 
 
(223,902)

 
 
Annuity payments
 
—

 
 
—

 
Increase (decrease) in net assets from policy related transactions
 
359,787

 
 
416,221

 
Total increase (decrease)
 
309,554

 
 
345,631

 
 
 
 
 
 
 
 
 
 
Net assets at beginning of period
 
943,807

 
 
598,176

 
Net assets at end of period
$
1,253,361

 
$
943,807

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 

130


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MFS VIT Utilities Service Class Division
 
MFS VIT Value Service Class Division
 
MidCap Class 1 Division
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
320,869

 
$
62,535

 
$
32,066

 
$
(7,029)

 
$
(3,081,141)

 
$
(3,295,573)

 
1,064,442

 
 
980,596

 
 
474,383

 
 
425,175

 
 
65,682,724

 
 
68,652,401

 
(3,494,394)

 
 
(93,732)

 
 
(632,553)

 
 
(7,797)

 
 
(59,850,213)

 
 
(22,942,508)

 
(2,109,083)

 
 
949,399

 
 
(126,104)

 
 
410,349

 
 
2,751,370

 
 
42,414,320

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(2,109,083)

 
 
949,399

 
 
(126,104)

 
 
410,349

 
 
2,751,370

 
 
42,414,320

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3,716,029

 
 
6,322,669

 
 
1,057,713

 
 
1,423,174

 
 
22,672,291

 
 
25,177,450

 
(940)

 
 
(665)

 
 
(104)

 
 
(60)

 
 
(391,774)

 
 
(472,341)

 
(5,514)

 
 
(5,339)

 
 
(2,037)

 
 
(4,289)

 
 
(149,784)

 
 
(182,089)

 
(616,234)

 
 
(515,510)

 
 
(229,800)

 
 
(414,160)

 
 
(36,441,353)

 
 
(42,965,965)

 
(60,712)

 
 
(96,829)

 
 
(15,830)

 
 
(29,188)

 
 
(2,288,766)

 
 
(2,723,449)

 
(84,001)

 
 
(73,552)

 
 
(63,981)

 
 
(33,796)

 
 
(5,056,785)

 
 
(5,144,788)

 
(2,122,826)

 
 
(3,029,538)

 
 
(626,978)

 
 
(619,446)

 
 
(30,494,178)

 
 
(39,131,074)

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
825,802

 
 
2,601,236

 
 
118,983

 
 
322,235

 
 
(52,150,349)

 
 
(65,442,256)

 
(1,283,281)

 
 
3,550,635

 
 
(7,121)

 
 
732,584

 
 
(49,398,979)

 
 
(23,027,936)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
12,181,402

 
 
8,630,767

 
 
5,175,047

 
 
4,442,463

 
 
389,291,120

 
 
412,319,056

$
10,898,121

 
$
12,181,402

 
$
5,167,926

 
$
5,175,047

 
$
339,892,141

 
$
389,291,120


131


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Money Market Class 1 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
Increase (decrease) in net assets
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
Net investment income (loss)
$
(642,674)

 
$
(755,402)

 
 
Total realized gains (losses) on investments
 
—

 
 
—

 
 
Change in net unrealized appreciation or depreciation of investments
 
—

 
 
—

 
 
Net gains (losses) from investments
 
(642,674)

 
 
(755,402)

 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
(642,674)

 
 
(755,402)

 
 
 
 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
59,310,934

 
 
57,849,237

 
 
Administration charges
 
(56,669)

 
 
(57,648)

 
 
Contingent sales charges
 
(62,585)

 
 
(78,725)

 
 
Contract terminations
 
(16,881,165)

 
 
(19,811,398)

 
 
Death benefit payments
 
(763,265)

 
 
(1,073,801)

 
 
Flexible withdrawal option payments
 
(950,260)

 
 
(1,140,987)

 
 
Transfers to other contracts
 
(45,804,649)

 
 
(45,340,272)

 
 
Annuity payments
 
—

 
 
—

 
Increase (decrease) in net assets from policy related transactions
 
(5,207,659)

 
 
(9,653,594)

 
Total increase (decrease)
 
(5,850,333)

 
 
(10,408,996)

 
 
 
 
 
 
 
 
 
 
Net assets at beginning of period
 
55,230,360

 
 
65,639,356

 
Net assets at end of period
$
49,380,027

 
$
55,230,360

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)    Commenced operations May 18, 2015.

See accompanying notes.
 
 
 
 

132


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Money Market Class 2 Division
 
Neuberger Berman AMT Large Cap Value I Class Division
 
Neuberger Berman AMT Mid-Cap Growth Portfolio S Class Division (1)
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2014
 
2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(16,363)

 
$
(268)

 
$
(32,795)

 
$
(40,048)

 
$
(6,288)

 
—

 
 
—

 
 
647,348

 
 
396,207

 
 
(937)

 
—

 
 
—

 
 
(1,246,521)

 
 
65,815

 
 
(120,653)

 
(16,363)

 
 
(268)

 
 
(631,968)

 
 
421,974

 
 
(127,878)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(16,363)

 
 
(268)

 
 
(631,968)

 
 
421,974

 
 
(127,878)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7,489,988

 
 
294,359

 
 
571,136

 
 
1,006,877

 
 
3,003,327

 
(2,411)

 
 
(42)

 
 
(823)

 
 
(1,049)

 
 
(1,035)

 
(443)

 
 
—

 
 
(6,051)

 
 
(6,694)

 
 
(478)

 
(40,733)

 
 
—

 
 
(682,648)

 
 
(646,360)

 
 
(53,887)

 
—

 
 
—

 
 
(57,257)

 
 
(104,705)

 
 
—

 
(11,529)

 
 
—

 
 
(37,075)

 
 
(42,014)

 
 
(5,347)

 
(6,254,749)

 
 
(76,739)

 
 
(348,631)

 
 
(830,038)

 
 
(69,027)

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
1,180,123

 
 
217,578

 
 
(561,349)

 
 
(623,983)

 
 
2,873,553

 
1,163,760

 
 
217,310

 
 
(1,193,317)

 
 
(202,009)

 
 
2,745,675

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
217,310

 
 
—

 
 
5,241,195

 
 
5,443,204

 
 
—

$
1,381,070

 
$
217,310

 
$
4,047,878

 
$
5,241,195

 
$
2,745,675


133


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Neuberger Berman AMT Socially Responsive I Class Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
Increase (decrease) in net assets
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
Net investment income (loss)
$
(51,414)

 
$
(74,782)

 
 
Total realized gains (losses) on investments
 
1,046,464

 
 
1,076,131

 
 
Change in net unrealized appreciation or depreciation of investments
 
(1,096,068)

 
 
(496,844)

 
 
Net gains (losses) from investments
 
(101,018)

 
 
504,505

 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
(101,018)

 
 
504,505

 
 
 
 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
779,432

 
 
1,111,514

 
 
Administration charges
 
(22,503)

 
 
(26,153)

 
 
Contingent sales charges
 
(3,946)

 
 
(7,665)

 
 
Contract terminations
 
(445,154)

 
 
(740,098)

 
 
Death benefit payments
 
(23,757)

 
 
(11,223)

 
 
Flexible withdrawal option payments
 
(130,187)

 
 
(119,842)

 
 
Transfers to other contracts
 
(1,052,798)

 
 
(2,072,490)

 
 
Annuity payments
 
—

 
 
—

 
Increase (decrease) in net assets from policy related transactions
 
(898,913)

 
 
(1,865,957)

 
Total increase (decrease)
 
(999,931)

 
 
(1,361,452)

 
 
 
 
 
 
 
 
 
 
Net assets at beginning of period
 
6,077,273

 
 
7,438,725

 
Net assets at end of period
$
5,077,342

 
$
6,077,273

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)    Commenced operations May 18, 2015.

See accompanying notes.
 
 
 
 

134


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Oppenheimer Main Street Small Cap
Service Shares Division
 
PIMCO All Asset Administrative
 Class Division
 
PIMCO All Asset Advisor Class
Division (1)
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2014
 
2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(3,862)

 
$
(3,783)

 
$
88,731

 
$
201,425

 
$
(2)

 
56,688

 
 
93,385

 
 
(177,260)

 
 
(10,798)

 
 
(70)

 
(97,581)

 
 
(27,039)

 
 
(434,074)

 
 
(271,826)

 
 
(1)

 
(44,755)

 
 
62,563

 
 
(522,603)

 
 
(81,199)

 
 
(73)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(44,755)

 
 
62,563

 
 
(522,603)

 
 
(81,199)

 
 
(73)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
207,404

 
 
426,860

 
 
579,848

 
 
1,666,391

 
 
5,676

 
(207)

 
 
(237)

 
 
(114)

 
 
(117)

 
 
—

 
(103)

 
 
(14)

 
 
(2,504)

 
 
(5,294)

 
 
—

 
(91,394)

 
 
(11,585)

 
 
(282,541)

 
 
(511,190)

 
 
—

 
—

 
 
—

 
 
—

 
 
(33,270)

 
 
—

 
(4,652)

 
 
(6,693)

 
 
(55,604)

 
 
(50,959)

 
 
—

 
(163,133)

 
 
(190,287)

 
 
(815,831)

 
 
(731,550)

 
 
(5,603)

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
(52,085)

 
 
218,044

 
 
(576,746)

 
 
334,011

 
 
73

 
(96,840)

 
 
280,607

 
 
(1,099,349)

 
 
252,812

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
658,213

 
 
377,606

 
 
5,246,587

 
 
4,993,775

 
 
—

$
561,373

 
$
658,213

 
$
4,147,238

 
$
5,246,587

 
$
—


135


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PIMCO Commodity Real Return Strategy M Class Division (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
Increase (decrease) in net assets
 
 
 
Operations:
 
 
 
 
Net investment income (loss)
$
(56)

 
 
Total realized gains (losses) on investments
 
(4)

 
 
Change in net unrealized appreciation or depreciation of investments
 
(1,681)

 
 
Net gains (losses) from investments
 
(1,741)

 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
(1,741)

 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
14,300

 
 
Administration charges
 
—

 
 
Contingent sales charges
 
—

 
 
Contract terminations
 
—

 
 
Death benefit payments
 
—

 
 
Flexible withdrawal option payments
 
—

 
 
Transfers to other contracts
 
—

 
 
Annuity payments
 
—

 
Increase (decrease) in net assets from policy related transactions
 
14,300

 
Total increase (decrease)
 
12,559

 
 
 
 
 
 
 
Net assets at beginning of period
 
—

 
Net assets at end of period
$
12,559

 
 
 
 
 
 
 
 
 
 
 
 
 
(1)    Commenced operations May 18, 2015.

See accompanying notes.
 
 
 
 

136


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PIMCO High Yield Administrative
Class Division
 
PIMCO Low Duration Advisor Class
Division (1)
 
PIMCO Total Return Administrative
Class Division
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2015
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
624,562

 
$
604,355

 
$
6,210

 
$
991,318

 
$
224,780

 
189,889

 
 
79,195

 
 
(20)

 
 
261,224

 
 
(18,070)

 
(1,327,188)

 
 
(431,109)

 
 
(7,503)

 
 
(1,527,726)

 
 
629,305

 
(512,737)

 
 
252,441

 
 
(1,313)

 
 
(275,184)

 
 
836,015

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(512,737)

 
 
252,441

 
 
(1,313)

 
 
(275,184)

 
 
836,015

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4,340,966

 
 
4,945,263

 
 
368,267

 
 
4,119,218

 
 
6,646,375

 
(1,456)

 
 
(1,212)

 
 
(11)

 
 
(3,232)

 
 
(3,119)

 
(11,674)

 
 
(11,530)

 
 
(4)

 
 
(19,235)

 
 
(27,784)

 
(1,316,009)

 
 
(1,113,259)

 
 
(454)

 
 
(2,168,399)

 
 
(2,682,587)

 
(11,238)

 
 
(195,708)

 
 
—

 
 
(84,142)

 
 
(474,172)

 
(197,776)

 
 
(176,766)

 
 
—

 
 
(318,089)

 
 
(286,408)

 
(2,649,159)

 
 
(1,888,293)

 
 
(5,753)

 
 
(3,343,233)

 
 
(5,965,401)

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
153,654

 
 
1,558,495

 
 
362,045

 
 
(1,817,112)

 
 
(2,793,096)

 
(359,083)

 
 
1,810,936

 
 
360,732

 
 
(2,092,296)

 
 
(1,957,081)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
16,014,793

 
 
14,203,857

 
 
—

 
 
29,159,222

 
 
31,116,303

$
15,655,710

 
$
16,014,793

 
$
360,732

 
$
27,066,926

 
$
29,159,222


137


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal Capital Appreciation
Class 1 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
Increase (decrease) in net assets
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
Net investment income (loss)
$
(1,022,076)

 
$
285,693

 
 
Total realized gains (losses) on investments
 
2,308,451

 
 
3,166,147

 
 
Change in net unrealized appreciation or depreciation of investments
 
(2,510,117)

 
 
(1,656,566)

 
 
Net gains (losses) from investments
 
(1,223,742)

 
 
1,795,274

 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
(1,223,742)

 
 
1,795,274

 
 
 
 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
123,197,595

 
 
3,393,463

 
 
Administration charges
 
(213,072)

 
 
(1,388)

 
 
Contingent sales charges
 
(58,257)

 
 
(12,775)

 
 
Contract terminations
 
(8,995,555)

 
 
(1,236,387)

 
 
Death benefit payments
 
(770,561)

 
 
(226,076)

 
 
Flexible withdrawal option payments
 
(1,763,649)

 
 
(90,028)

 
 
Transfers to other contracts
 
(11,933,116)

 
 
(1,933,969)

 
 
Annuity payments
 
—

 
 
—

 
Increase (decrease) in net assets from policy related transactions
 
99,463,385

 
 
(107,160)

 
Total increase (decrease)
 
98,239,643

 
 
1,688,114

 
 
 
 
 
 
 
 
 
 
Net assets at beginning of period
 
18,505,464

 
 
16,817,350

 
Net assets at end of period
$
116,745,107

 
$
18,505,464

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 

138


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal Capital Appreciation
Class 2 Division
 
Principal LifeTime Strategic Income
Class 1 Division
 
Principal LifeTime 2010 Class 1 Division
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(5,502)

 
$
(192)

 
$
136,386

 
$
244,144

 
$
238,776

 
$
266,924

 
11,192

 
 
1

 
 
970,488

 
 
593,959

 
 
481,787

 
 
310,635

 
(12,067)

 
 
1,298

 
 
(1,507,441)

 
 
(133,715)

 
 
(1,445,646)

 
 
607,302

 
(6,377)

 
 
1,107

 
 
(400,567)

 
 
704,388

 
 
(725,083)

 
 
1,184,861

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(6,377)

 
 
1,107

 
 
(400,567)

 
 
704,388

 
 
(725,083)

 
 
1,184,861

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
484,532

 
 
191,275

 
 
1,497,294

 
 
2,410,807

 
 
2,358,317

 
 
3,316,071

 
(591)

 
 
(10)

 
 
(54,103)

 
 
(64,619)

 
 
(113,584)

 
 
(133,752)

 
(162)

 
 
—

 
 
(13,564)

 
 
(10,780)

 
 
(26,688)

 
 
(20,977)

 
(14,898)

 
 
—

 
 
(2,314,975)

 
 
(1,451,603)

 
 
(3,394,795)

 
 
(2,927,568)

 
—

 
 
—

 
 
(112,974)

 
 
(389,106)

 
 
(128,430)

 
 
(286,246)

 
(1,099)

 
 
—

 
 
(789,084)

 
 
(913,567)

 
 
(1,182,374)

 
 
(1,205,714)

 
(21,544)

 
 
—

 
 
(2,475,326)

 
 
(2,952,774)

 
 
(2,009,050)

 
 
(3,177,576)

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
446,238

 
 
191,265

 
 
(4,262,732)

 
 
(3,371,642)

 
 
(4,496,604)

 
 
(4,435,762)

 
439,861

 
 
192,372

 
 
(4,663,299)

 
 
(2,667,254)

 
 
(5,221,687)

 
 
(3,250,901)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
192,372

 
 
—

 
 
21,738,392

 
 
24,405,646

 
 
33,742,664

 
 
36,993,565

$
632,233

 
$
192,372

 
$
17,075,093

 
$
21,738,392

 
$
28,520,977

 
$
33,742,664


139


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal LifeTime 2020 Class 1 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
Increase (decrease) in net assets
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
Net investment income (loss)
$
1,422,655

 
$
1,323,135

 
 
Total realized gains (losses) on investments
 
8,189,270

 
 
7,170,238

 
 
Change in net unrealized appreciation or depreciation of investments
 
(12,413,841)

 
 
(1,951,174)

 
 
Net gains (losses) from investments
 
(2,801,916)

 
 
6,542,199

 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
(2,801,916)

 
 
6,542,199

 
 
 
 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
14,036,904

 
 
16,927,771

 
 
Administration charges
 
(651,509)

 
 
(802,934)

 
 
Contingent sales charges
 
(98,472)

 
 
(163,496)

 
 
Contract terminations
 
(11,711,518)

 
 
(17,496,600)

 
 
Death benefit payments
 
(317,278)

 
 
(776,485)

 
 
Flexible withdrawal option payments
 
(3,718,001)

 
 
(3,685,547)

 
 
Transfers to other contracts
 
(20,715,435)

 
 
(32,943,639)

 
 
Annuity payments
 
—

 
 
—

 
Increase (decrease) in net assets from policy related transactions
 
(23,175,309)

 
 
(38,940,930)

 
Total increase (decrease)
 
(25,977,225)

 
 
(32,398,731)

 
 
 
 
 
 
 
 
 
 
Net assets at beginning of period
 
143,694,951

 
 
176,093,682

 
Net assets at end of period
$
117,717,726

 
$
143,694,951

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)    Commenced operations May 18, 2015.

See accompanying notes.
 
 
 
 

140


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal LifeTime 2020 Class 2
Division (1)
 
Principal LifeTime 2030 Class 1 Division
 
Principal LifeTime 2030 Class 2
Division (1)
 
 
 
 
 
 
 
 
2015
 
2015
 
2014
 
2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
329

 
$
775,408

 
$
502,417

 
$
87

 
728

 
 
5,488,994

 
 
13,481,878

 
 
197

 
(1,763)

 
 
(7,969,079)

 
 
(10,747,978)

 
 
(718)

 
(706)

 
 
(1,704,677)

 
 
3,236,317

 
 
(434)

 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
(706)

 
 
(1,704,677)

 
 
3,236,317

 
 
(434)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
16,250

 
 
7,389,783

 
 
4,769,941

 
 
17,838

 
—

 
 
(380,121)

 
 
(383,742)

 
 
(7)

 
—

 
 
(42,146)

 
 
(37,413)

 
 
—

 
—

 
 
(5,148,538)

 
 
(4,312,357)

 
 
—

 
—

 
 
(10,512)

 
 
(22,361)

 
 
—

 
—

 
 
(849,852)

 
 
(661,839)

 
 
(945)

 
(23)

 
 
(3,685,067)

 
 
(1,588,524)

 
 
(65)

 
—

 
 
—

 
 
—

 
 
—

 
16,227

 
 
(2,726,453)

 
 
(2,236,295)

 
 
16,821

 
15,521

 
 
(4,431,130)

 
 
1,000,022

 
 
16,387

 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
73,233,074

 
 
72,233,052

 
 
—

$
15,521

 
$
68,801,944

 
$
73,233,074

 
$
16,387


141


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal LifeTime 2040 Class 1 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
Increase (decrease) in net assets
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
Net investment income (loss)
$
137,407

 
$
79,815

 
 
Total realized gains (losses) on investments
 
667,474

 
 
1,145,128

 
 
Change in net unrealized appreciation or depreciation of investments
 
(1,119,014)

 
 
(574,127)

 
 
Net gains (losses) from investments
 
(314,133)

 
 
650,816

 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
(314,133)

 
 
650,816

 
 
 
 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
1,529,020

 
 
3,041,037

 
 
Administration charges
 
(5,328)

 
 
(5,266)

 
 
Contingent sales charges
 
(9,437)

 
 
(12,946)

 
 
Contract terminations
 
(1,147,112)

 
 
(1,310,814)

 
 
Death benefit payments
 
(4,435)

 
 
(77,304)

 
 
Flexible withdrawal option payments
 
(36,766)

 
 
(42,760)

 
 
Transfers to other contracts
 
(797,183)

 
 
(791,531)

 
 
Annuity payments
 
—

 
 
—

 
Increase (decrease) in net assets from policy related transactions
 
(471,241)

 
 
800,416

 
Total increase (decrease)
 
(785,374)

 
 
1,451,232

 
 
 
 
 
 
 
 
 
 
Net assets at beginning of period
 
14,503,892

 
 
13,052,660

 
Net assets at end of period
$
13,718,518

 
$
14,503,892

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)    Commenced operations May 18, 2015.

See accompanying notes.
 
 
 
 

142


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal LifeTime 2040 Class 2
Division (1)
 
Principal LifeTime 2050 Class 1 Division
 
Principal LifeTime 2050 Class 2
Division (1)
 
 
 
 
 
 
 
 
2015
 
2015
 
2014
 
2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(1)

 
$
94,705

 
$
63,295

 
$
407

 
—

 
 
529,944

 
 
921,620

 
 
1,000

 
(5)

 
 
(762,417)

 
 
(587,998)

 
 
(3,066)

 
(6)

 
 
(137,768)

 
 
396,917

 
 
(1,659)

 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
(6)

 
 
(137,768)

 
 
396,917

 
 
(1,659)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
500

 
 
2,294,787

 
 
1,389,803

 
 
27,110

 
—

 
 
(4,528)

 
 
(4,424)

 
 
—

 
—

 
 
(9,805)

 
 
(7,056)

 
 
—

 
—

 
 
(1,144,908)

 
 
(790,793)

 
 
—

 
—

 
 
—

 
 
(26,773)

 
 
—

 
—

 
 
(22,419)

 
 
(15,293)

 
 
—

 
—

 
 
(656,354)

 
 
(678,352)

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
500

 
 
456,773

 
 
(132,888)

 
 
27,110

 
494

 
 
319,005

 
 
264,029

 
 
25,451

 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
8,617,890

 
 
8,353,861

 
 
—

$
494

 
$
8,936,895

 
$
8,617,890

 
$
25,451


143


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real Estate Securities Class 1 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
Increase (decrease) in net assets
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
Net investment income (loss)
$
97,294

 
$
172,806

 
 
Total realized gains (losses) on investments
 
8,288,486

 
 
2,192,506

 
 
Change in net unrealized appreciation or depreciation of investments
 
(6,248,173)

 
 
19,163,492

 
 
Net gains (losses) from investments
 
2,137,607

 
 
21,528,804

 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
2,137,607

 
 
21,528,804

 
 
 
 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
13,293,791

 
 
15,004,806

 
 
Administration charges
 
(22,851)

 
 
(22,235)

 
 
Contingent sales charges
 
(34,200)

 
 
(36,790)

 
 
Contract terminations
 
(8,361,629)

 
 
(9,031,964)

 
 
Death benefit payments
 
(426,032)

 
 
(679,382)

 
 
Flexible withdrawal option payments
 
(856,904)

 
 
(798,019)

 
 
Transfers to other contracts
 
(12,325,219)

 
 
(10,430,931)

 
 
Annuity payments
 
—

 
 
—

 
Increase (decrease) in net assets from policy related transactions
 
(8,733,044)

 
 
(5,994,515)

 
Total increase (decrease)
 
(6,595,437)

 
 
15,534,289

 
 
 
 
 
 
 
 
 
 
Net assets at beginning of period
 
87,932,182

 
 
72,397,893

 
Net assets at end of period
$
81,336,745

 
$
87,932,182

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)    Commenced operations May 18, 2015.

See accompanying notes.
 
 
 
 

144


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real Estate Securities Class 2 Division
 
Rydex Basic Materials Division (1)
 
Rydex Commodities Strategy Division
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2015
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
8,160

 
$
(150)

 
$
—

 
$
(477)

 
$
(15)

 
41,861

 
 
585

 
 
—

 
 
(1,126)

 
 
(1)

 
(9,501)

 
 
1,926

 
 
—

 
 
(20,055)

 
 
(2,208)

 
40,520

 
 
2,361

 
 
—

 
 
(21,658)

 
 
(2,224)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
40,520

 
 
2,361

 
 
—

 
 
(21,658)

 
 
(2,224)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,727,261

 
 
178,553

 
 
—

 
 
88,462

 
 
13,597

 
(1,203)

 
 
(9)

 
 
—

 
 
(3)

 
 
—

 
(231)

 
 
—

 
 
—

 
 
—

 
 
—

 
(21,258)

 
 
—

 
 
—

 
 
—

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
(8,160)

 
 
—

 
 
—

 
 
—

 
 
—

 
(184,925)

 
 
—

 
 
—

 
 
(1,204)

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
1,511,484

 
 
178,544

 
 
—

 
 
87,255

 
 
13,597

 
1,552,004

 
 
180,905

 
 
—

 
 
65,597

 
 
11,373

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
180,905

 
 
—

 
 
—

 
 
11,373

 
 
—

$
1,732,909

 
$
180,905

 
$
—

 
$
76,970

 
$
11,373


145


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rydex NASDAQ 100 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
Increase (decrease) in net assets
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
Net investment income (loss)
$
(5,427)

 
$
(101)

 
 
Total realized gains (losses) on investments
 
33,336

 
 
—

 
 
Change in net unrealized appreciation or depreciation of investments
 
(10,106)

 
 
(517)

 
 
Net gains (losses) from investments
 
17,803

 
 
(618)

 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
17,803

 
 
(618)

 
 
 
 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
575,850

 
 
97,933

 
 
Administration charges
 
(449)

 
 
—

 
 
Contingent sales charges
 
—

 
 
—

 
 
Contract terminations
 
—

 
 
—

 
 
Death benefit payments
 
—

 
 
—

 
 
Flexible withdrawal option payments
 
—

 
 
—

 
 
Transfers to other contracts
 
(44,368)

 
 
—

 
 
Annuity payments
 
—

 
 
—

 
Increase (decrease) in net assets from policy related transactions
 
531,033

 
 
97,933

 
Total increase (decrease)
 
548,836

 
 
97,315

 
 
 
 
 
 
 
 
 
 
Net assets at beginning of period
 
97,315

 
 
—

 
Net assets at end of period
$
646,151

 
$
97,315

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 

146


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SAM Balanced Portfolio Class 1 Division
 
SAM Balanced Portfolio Class 2 Division
 
SAM Conservative Balanced Portfolio
Class 1 Division
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
9,374,533

 
$
8,811,345

 
$
49,694

 
$
(368)

 
$
2,778,779

 
$
2,634,239

 
70,461,519

 
 
137,083,803

 
 
208,051

 
 
1

 
 
11,687,839

 
 
22,680,728

 
(93,512,609)

 
 
(108,056,045)

 
 
(366,087)

 
 
(1,444)

 
 
(17,902,602)

 
 
(17,320,821)

 
(13,676,557)

 
 
37,839,103

 
 
(108,342)

 
 
(1,811)

 
 
(3,435,984)

 
 
7,994,146

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(13,676,557)

 
 
37,839,103

 
 
(108,342)

 
 
(1,811)

 
 
(3,435,984)

 
 
7,994,146

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
42,878,760

 
 
41,302,687

 
 
4,642,656

 
 
636,008

 
 
16,191,319

 
 
22,652,606

 
(3,776,977)

 
 
(4,206,262)

 
 
(3,447)

 
 
(24)

 
 
(571,557)

 
 
(641,303)

 
(380,646)

 
 
(345,560)

 
 
(859)

 
 
—

 
 
(94,116)

 
 
(90,288)

 
(48,656,930)

 
 
(41,025,690)

 
 
(78,883)

 
 
—

 
 
(12,416,351)

 
 
(11,942,225)

 
(3,440,873)

 
 
(4,186,225)

 
 
—

 
 
—

 
 
(1,295,958)

 
 
(567,833)

 
(14,292,327)

 
 
(13,722,382)

 
 
(6,835)

 
 
—

 
 
(3,720,077)

 
 
(3,692,453)

 
(47,758,625)

 
 
(103,810,768)

 
 
(1,319,303)

 
 
—

 
 
(12,363,565)

 
 
(23,007,231)

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
(75,427,618)

 
 
(125,994,200)

 
 
3,233,329

 
 
635,984

 
 
(14,270,305)

 
 
(17,288,727)

 
(89,104,175)

 
 
(88,155,097)

 
 
3,124,987

 
 
634,173

 
 
(17,706,289)

 
 
(9,294,581)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
687,747,541

 
 
775,902,638

 
 
634,173

 
 
—

 
 
168,581,522

 
 
177,876,103

$
598,643,366

 
$
687,747,541

 
$
3,759,160

 
$
634,173

 
$
150,875,233

 
$
168,581,522


147


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SAM Conservative Balanced Portfolio
Class 2 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
Increase (decrease) in net assets
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
Net investment income (loss)
$
46,338

 
$
(139)

 
 
Total realized gains (losses) on investments
 
103,988

 
 
(1)

 
 
Change in net unrealized appreciation or depreciation of investments
 
(233,687)

 
 
(1,863)

 
 
Net gains (losses) from investments
 
(83,361)

 
 
(2,003)

 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
(83,361)

 
 
(2,003)

 
 
 
 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
2,760,536

 
 
555,186

 
 
Administration charges
 
(2,797)

 
 
(24)

 
 
Contingent sales charges
 
(455)

 
 
—

 
 
Contract terminations
 
(41,814)

 
 
—

 
 
Death benefit payments
 
(585)

 
 
—

 
 
Flexible withdrawal option payments
 
—

 
 
—

 
 
Transfers to other contracts
 
(182,671)

 
 
—

 
 
Annuity payments
 
—

 
 
—

 
Increase (decrease) in net assets from policy related transactions
 
2,532,214

 
 
555,162

 
Total increase (decrease)
 
2,448,853

 
 
553,159

 
 
 
 
 
 
 
 
 
 
Net assets at beginning of period
 
553,159

 
 
—

 
Net assets at end of period
$
3,002,012

 
$
553,159

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 

148


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SAM Conservative Growth Portfolio
Class 1 Division
 
SAM Conservative Growth Portfolio
Class 2 Division
 
SAM Flexible Income Portfolio
Class 1 Division
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
815,127

 
$
334,889

 
$
57,878

 
$
(280)

 
$
3,842,785

 
$
3,993,760

 
9,839,282

 
 
14,937,808

 
 
304,267

 
 
—

 
 
6,275,169

 
 
15,166,292

 
(13,344,263)

 
 
(9,886,503)

 
 
(572,909)

 
 
(687)

 
 
(15,012,560)

 
 
(11,000,369)

 
(2,689,854)

 
 
5,386,194

 
 
(210,764)

 
 
(967)

 
 
(4,894,606)

 
 
8,159,683

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(2,689,854)

 
 
5,386,194

 
 
(210,764)

 
 
(967)

 
 
(4,894,606)

 
 
8,159,683

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
18,126,551

 
 
19,065,877

 
 
5,570,624

 
 
459,694

 
 
24,992,192

 
 
30,551,547

 
(14,810)

 
 
(15,131)

 
 
(7,919)

 
 
(46)

 
 
(372,349)

 
 
(443,286)

 
(53,596)

 
 
(50,966)

 
 
(254)

 
 
—

 
 
(106,058)

 
 
(97,156)

 
(7,747,125)

 
 
(6,746,140)

 
 
(23,362)

 
 
—

 
 
(15,162,620)

 
 
(14,457,804)

 
(601,397)

 
 
(241,358)

 
 
(39,701)

 
 
—

 
 
(2,005,147)

 
 
(2,027,725)

 
(829,477)

 
 
(668,476)

 
 
(12,763)

 
 
—

 
 
(4,139,297)

 
 
(3,936,033)

 
(6,989,428)

 
 
(4,614,487)

 
 
(184,260)

 
 
(28,316)

 
 
(12,902,231)

 
 
(18,150,196)

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
1,890,718

 
 
6,729,319

 
 
5,302,365

 
 
431,332

 
 
(9,695,510)

 
 
(8,560,653)

 
(799,136)

 
 
12,115,513

 
 
5,091,601

 
 
430,365

 
 
(14,590,116)

 
 
(400,970)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
101,757,493

 
 
89,641,980

 
 
430,365

 
 
—

 
 
185,235,460

 
 
185,636,430

$
100,958,357

 
$
101,757,493

 
$
5,521,966

 
$
430,365

 
$
170,645,344

 
$
185,235,460


149


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SAM Flexible Income Portfolio
Class 2 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
Increase (decrease) in net assets
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
Net investment income (loss)
$
84,382

 
$
(318)

 
 
Total realized gains (losses) on investments
 
99,759

 
 
(1)

 
 
Change in net unrealized appreciation or depreciation of investments
 
(331,837)

 
 
1,281

 
 
Net gains (losses) from investments
 
(147,696)

 
 
962

 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
(147,696)

 
 
962

 
 
 
 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
6,447,810

 
 
417,182

 
 
Administration charges
 
(3,593)

 
 
(15)

 
 
Contingent sales charges
 
(1,665)

 
 
—

 
 
Contract terminations
 
(153,011)

 
 
—

 
 
Death benefit payments
 
(1,173)

 
 
—

 
 
Flexible withdrawal option payments
 
(93,579)

 
 
—

 
 
Transfers to other contracts
 
(2,044,130)

 
 
—

 
 
Annuity payments
 
—

 
 
—

 
Increase (decrease) in net assets from policy related transactions
 
4,150,659

 
 
417,167

 
Total increase (decrease)
 
4,002,963

 
 
418,129

 
 
 
 
 
 
 
 
 
 
Net assets at beginning of period
 
418,129

 
 
—

 
Net assets at end of period
$
4,421,092

 
$
418,129

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 

150


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SAM Strategic Growth Portfolio
Class 1 Division
 
SAM Strategic Growth Portfolio
Class 2 Division
 
Short-Term Income Class 1 Division
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
500,409

 
$
13,463

 
$
15,968

 
$
(473)

 
$
1,407,417

 
$
327,505

 
7,225,423

 
 
12,334,413

 
 
93,791

 
 
(3)

 
 
534,051

 
 
997,364

 
(9,852,418)

 
 
(8,132,619)

 
 
(183,660)

 
 
(1,140)

 
 
(2,714,781)

 
 
(890,451)

 
(2,126,586)

 
 
4,215,257

 
 
(73,901)

 
 
(1,616)

 
 
(773,313)

 
 
434,418

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(2,126,586)

 
 
4,215,257

 
 
(73,901)

 
 
(1,616)

 
 
(773,313)

 
 
434,418

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
13,546,079

 
 
12,760,354

 
 
1,830,809

 
 
654,126

 
 
18,193,280

 
 
31,531,632

 
(12,400)

 
 
(11,823)

 
 
(954)

 
 
(31)

 
 
(451,497)

 
 
(550,115)

 
(39,721)

 
 
(33,416)

 
 
(640)

 
 
—

 
 
(95,995)

 
 
(135,202)

 
(5,255,487)

 
 
(4,951,685)

 
 
(58,837)

 
 
—

 
 
(12,627,559)

 
 
(16,659,536)

 
(154,270)

 
 
(133,544)

 
 
—

 
 
—

 
 
(1,214,866)

 
 
(957,367)

 
(362,685)

 
 
(298,078)

 
 
(14,625)

 
 
—

 
 
(3,796,702)

 
 
(4,059,124)

 
(4,794,550)

 
 
(3,229,092)

 
 
(655,616)

 
 
(28,352)

 
 
(22,332,953)

 
 
(31,209,003)

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
2,926,966

 
 
4,102,716

 
 
1,100,137

 
 
625,743

 
 
(22,326,292)

 
 
(22,038,715)

 
800,380

 
 
8,317,973

 
 
1,026,236

 
 
624,127

 
 
(23,099,605)

 
 
(21,604,297)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
65,972,384

 
 
57,654,411

 
 
624,127

 
 
—

 
 
131,611,548

 
 
153,215,845

$
66,772,764

 
$
65,972,384

 
$
1,650,363

 
$
624,127

 
$
108,511,943

 
$
131,611,548


151


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Short-Term Income Class 2 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
Increase (decrease) in net assets
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
Net investment income (loss)
$
13,364

 
$
(51)

 
 
Total realized gains (losses) on investments
 
(4,694)

 
 
—

 
 
Change in net unrealized appreciation or depreciation of investments
 
(16,114)

 
 
(77)

 
 
Net gains (losses) from investments
 
(7,444)

 
 
(128)

 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
(7,444)

 
 
(128)

 
 
 
 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
1,175,305

 
 
93,765

 
 
Administration charges
 
(791)

 
 
(8)

 
 
Contingent sales charges
 
(64)

 
 
—

 
 
Contract terminations
 
(5,926)

 
 
—

 
 
Death benefit payments
 
—

 
 
—

 
 
Flexible withdrawal option payments
 
(2,223)

 
 
—

 
 
Transfers to other contracts
 
(477,740)

 
 
—

 
 
Annuity payments
 
—

 
 
—

 
Increase (decrease) in net assets from policy related transactions
 
688,561

 
 
93,757

 
Total increase (decrease)
 
681,117

 
 
93,629

 
 
 
 
 
 
 
 
 
 
Net assets at beginning of period
 
93,629

 
 
—

 
Net assets at end of period
$
774,746

 
$
93,629

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)    Commenced operations April 17, 2015.

See accompanying notes.
 
 
 
 

152


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SmallCap Blend Class 1 Division
 
SmallCap Blend Class 2 Division (1)
 
T. Rowe Price Blue Chip Growth
Portfolio II Division
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2015
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(1,263,962)

 
$
(313,244)

 
$
(5,342)

 
$
(212,519)

 
$
(180,328)

 
7,858,943

 
 
3,178,158

 
 
20,966

 
 
934,600

 
 
994,904

 
(13,749,436)

 
 
(1,699,886)

 
 
(80,039)

 
 
456,116

 
 
49,729

 
(7,154,455)

 
 
1,165,028

 
 
(64,415)

 
 
1,178,197

 
 
864,305

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(7,154,455)

 
 
1,165,028

 
 
(64,415)

 
 
1,178,197

 
 
864,305

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
110,159,536

 
 
4,816,866

 
 
900,333

 
 
6,962,887

 
 
3,421,556

 
(107,433)

 
 
(5,073)

 
 
(714)

 
 
(23,065)

 
 
(26,832)

 
(42,982)

 
 
(4,823)

 
 
(50)

 
 
(8,657)

 
 
(6,035)

 
(9,480,406)

 
 
(3,694,446)

 
 
(4,580)

 
 
(976,660)

 
 
(582,701)

 
(539,136)

 
 
(191,768)

 
 
—

 
 
(63,287)

 
 
(60,017)

 
(1,340,187)

 
 
(374,693)

 
 
(15,360)

 
 
(150,007)

 
 
(129,539)

 
(8,564,730)

 
 
(2,827,031)

 
 
(30,124)

 
 
(2,548,485)

 
 
(2,324,302)

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
90,084,662

 
 
(2,280,968)

 
 
849,505

 
 
3,192,726

 
 
292,130

 
82,930,207

 
 
(1,115,940)

 
 
785,090

 
 
4,370,923

 
 
1,156,435

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
33,528,364

 
 
34,644,304

 
 
—

 
 
12,612,679

 
 
11,456,244

$
116,458,571

 
$
33,528,364

 
$
785,090

 
$
16,983,602

 
$
12,612,679


153


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
T. Rowe Price Health Sciences
Portfolio II Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
Increase (decrease) in net assets
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
Net investment income (loss)
$
(525,062)

 
$
(379,627)

 
 
Total realized gains (losses) on investments
 
5,814,462

 
 
4,632,533

 
 
Change in net unrealized appreciation or depreciation of investments
 
(2,151,210)

 
 
2,222,956

 
 
Net gains (losses) from investments
 
3,138,190

 
 
6,475,862

 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
3,138,190

 
 
6,475,862

 
 
 
 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
13,496,896

 
 
11,371,091

 
 
Administration charges
 
(15,884)

 
 
(16,773)

 
 
Contingent sales charges
 
(29,482)

 
 
(14,216)

 
 
Contract terminations
 
(3,326,062)

 
 
(1,372,608)

 
 
Death benefit payments
 
(272,554)

 
 
(134,766)

 
 
Flexible withdrawal option payments
 
(261,586)

 
 
(193,971)

 
 
Transfers to other contracts
 
(7,433,937)

 
 
(7,400,018)

 
 
Annuity payments
 
—

 
 
—

 
Increase (decrease) in net assets from policy related transactions
 
2,157,391

 
 
2,238,739

 
Total increase (decrease)
 
5,295,581

 
 
8,714,601

 
 
 
 
 
 
 
 
 
 
Net assets at beginning of period
 
30,107,162

 
 
21,392,561

 
Net assets at end of period
$
35,402,743

 
$
30,107,162

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)    Commenced operations May 18, 2015.

See accompanying notes.
 
 
 
 

154


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Templeton Global Bond VIP Class 4 Division
 
Templeton Growth VIP Class 2 Division
 
The Merger Fund Division (1)
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2014
 
2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
36,764

 
$
(70)

 
$
17,068

 
$
5,052

 
$
—

 
(6,152)

 
 
(1)

 
 
6,034

 
 
21,912

 
 
—

 
(82,235)

 
 
(788)

 
 
(95,558)

 
 
(61,483)

 
 
—

 
(51,623)

 
 
(859)

 
 
(72,456)

 
 
(34,519)

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(51,623)

 
 
(859)

 
 
(72,456)

 
 
(34,519)

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,158,444

 
 
68,416

 
 
51,714

 
 
52,531

 
 
—

 
(501)

 
 
(3)

 
 
—

 
 
—

 
 
—

 
(769)

 
 
—

 
 
(54)

 
 
(142)

 
 
—

 
(86,222)

 
 
—

 
 
(47,158)

 
 
(76,572)

 
 
—

 
—

 
 
—

 
 
—

 
 
(31,267)

 
 
—

 
—

 
 
—

 
 
(10,344)

 
 
(12,689)

 
 
—

 
(14,755)

 
 
—

 
 
(12,545)

 
 
(8,405)

 
 
—

 
—

 
 
—

 
 
—

 
 
—

 
 
—

 
1,056,197

 
 
68,413

 
 
(18,387)

 
 
(76,544)

 
 
—

 
1,004,574

 
 
67,554

 
 
(90,843)

 
 
(111,063)

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
67,554

 
 
—

 
 
960,023

 
 
1,071,086

 
 
—

$
1,072,128

 
$
67,554

 
$
869,180

 
$
960,023

 
$
—


155


 
Principal Life Insurance Company
 
Separate Account B
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2015 and 2014, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Van Eck Global Hard Assets Class S Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
Increase (decrease) in net assets
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
Net investment income (loss)
$
(93,535)

 
$
(126,962)

 
 
Total realized gains (losses) on investments
 
(526,299)

 
 
(449,127)

 
 
Change in net unrealized appreciation or depreciation of investments
 
(1,919,469)

 
 
(1,185,645)

 
 
Net gains (losses) from investments
 
(2,539,303)

 
 
(1,761,734)

 
 
 
 
 
 
 
 
 
 
Payment from affiliate
 
—

 
 
—

 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
 
(2,539,303)

 
 
(1,761,734)

 
 
 
 
 
 
 
 
 
 
Policy related transactions:
 
 
 
 
 
 
 
Purchase payments, less sales charges, per payment fees and applicable premium taxes
 
2,415,914

 
 
3,163,554

 
 
Administration charges
 
(480)

 
 
(574)

 
 
Contingent sales charges
 
(2,588)

 
 
(4,814)

 
 
Contract terminations
 
(325,524)

 
 
(612,679)

 
 
Death benefit payments
 
(23,712)

 
 
(39,541)

 
 
Flexible withdrawal option payments
 
(46,402)

 
 
(79,453)

 
 
Transfers to other contracts
 
(1,437,952)

 
 
(2,462,866)

 
 
Annuity payments
 
—

 
 
—

 
Increase (decrease) in net assets from policy related transactions
 
579,256

 
 
(36,373)

 
Total increase (decrease)
 
(1,960,047)

 
 
(1,798,107)

 
 
 
 
 
 
 
 
 
 
Net assets at beginning of period
 
7,087,059

 
 
8,885,166

 
Net assets at end of period
$
5,127,012

 
$
7,087,059

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 


156


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015


1. Nature of Operations and Significant Accounting Policies

Principal Life Insurance Company Separate Account B (“Separate Account B”) is a segregated investment account of Principal Life Insurance Company (“Principal Life”) and is registered under the Investment Company Act of 1940 as a unit investment trust, with no stated limitations on the number of authorized units. As directed by eligible contractholders, each division of Separate Account B invests exclusively in shares representing interests in a corresponding investment option. As of December 31, 2015, contractholder investment options include the following open-end management investment companies:

Principal Variable Contracts Funds, Inc. – Class 1 (1):
Balanced Account
Bond & Mortgage Securities Account
Diversified International Account
Equity Income Account
Government & High Quality Bond Account
Income Account (10)
International Emerging Markets Account
LargeCap Growth Account
LargeCap Growth Account I
LargeCap S&P 500 Index Account
LargeCap Value Account
MidCap Account
Money Market Account
Principal Capital Appreciation Account
Principal LifeTime Strategic Income Account
Principal LifeTime 2010 Account
Principal LifeTime 2020 Account
Principal LifeTime 2030 Account
Principal LifeTime 2040 Account
Principal LifeTime 2050 Account
Real Estate Securities Account
Short-Term Income Account
SmallCap Blend Account
Strategic Asset Management (“SAM”) Balanced Portfolio
Strategic Asset Management (“SAM”) Conservative Balanced Portfolio
Strategic Asset Management (“SAM”) Conservative Growth Portfolio
Strategic Asset Management (“SAM”) Flexible Income Portfolio
Strategic Asset Management (“SAM”) Strategic Growth Portfolio


157


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

Principal Variable Contracts Funds, Inc. – Class 2 (1):
Bond & Mortgage Securities Account (10)
Diversified Balanced Account
Diversified Balanced Managed Volatility Account (5)
Diversified Growth Account
Diversified Growth Managed Volatility Account (5)
Diversified Income Account (3)
Diversified International Account (8)
Equity Income Account (8)
Government & High Quality Bond Account (8)
Income Account (10)
International Emerging Markets Account (10)
LargeCap Growth Account (8)
LargeCap Growth I Account (10)
LargeCap S&P 500 Index Account (10)
LargeCap Value Account (10)
Money Market Account (8)
Principal Capital Appreciation Account (8)
Principal LifeTime 2020 Account (10)
Principal LifeTime 2030 Account (10)
Principal LifeTime 2040 Account (10)
Principal LifeTime 2050 Account (10)
Real Estate Securities Account (8)
SmallCap Blend Account (9)
Short-Term Income Account (8)
Strategic Asset Management (“SAM”) Balanced Portfolio (8)
Strategic Asset Management (“SAM”) Conservative Balanced Portfolio (8)
Strategic Asset Management (“SAM”) Conservative Growth Portfolio (8)
Strategic Asset Management (“SAM”) Flexible Income Portfolio (8)
Strategic Asset Management (“SAM”) Strategic Growth Portfolio (8)
AllianceBernstein Variable Product Series Fund, Inc.:
Small Cap Growth Portfolio – Class A
Small/Mid Cap Value Portfolio – Class A (4)
Alps/Red Rocks Listed Private Equity – Class III (10)
American Century Investments®:
VP Capital Appreciation – Class I (6)
VP Income & Growth Fund – Class I
VP Inflation Protection Fund – Class II
VP MidCap Value Fund – Class II
VP Ultra® Fund – Class I
VP Ultra® Fund – Class II
VP Value Fund – Class II

158


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

American Funds Insurance Series:
Asset Allocation Fund – Class 4 (10)
Blue Chip Income and Growth Fund – Class 4 (8)
Global Small Capitalization Fund – Class 2 (7)
Global Small Capitalization Fund – Class 4 (8)
High-Income Bond – Class 2 (7)
Managed Risk Asset Allocation Fund – Class P2 (8)
Managed Risk Growth Fund – Class P2 (8)
Managed Risk International Fund – Class P2 (8)
New World Fund – Class 2 (7)
New World Fund – Class 4 (8)
BlackRock:
Global Allocation – Class III (10)
iShares Alternative Strategies – Class III (10)
iShares Dynamic Allocation – Class III (10)
iShares Dynamic Fixed Income – Class III (10)
iShares Equity Appreciation – Class III (10)
Value Opportunities – Class III (10)
Calvert Investment:
VP EAFE International Index – Class F (8)
VP Russell 2000 Small Cap Index Portfolio – Class F (8)
VP S&P MidCap 400 Index Portfolio – Class F (8)
ClearBridge Variable Small Cap Growth Portfolio Class II (10)
Columbia Variable Portfolio:
Limited Duration Credit – Class 2 (10)
Small Cap Value – Class 2 (10)
Delaware Limited Term Diversified Income Series – Service Class (10)
Delaware Small Cap Value Series – Service Class (4)
Deutsche Funds:
Alternative Asset Allocation VIP – Class B (8) (11)
Equity 500 Index VIP – Class B2 (8) (12)
Small Mid Cap Value VIP – Class B (4) (13)
Dreyfus Investment Portfolios:
MidCap Stock – Service Shares (10)
Technology Growth Portfolio – Service Shares
Fidelity® Variable Insurance Products Fund:
Contrafund® Portfolio – Service Class
Contrafund® Portfolio – Service Class 2
Equity-Income Portfolio – Service Class 2
Growth Portfolio – Service Class
Growth Portfolio – Service Class 2
Mid Cap Portfolio – Service Class (7)
Mid Cap Portfolio – Service Class 2
Overseas Portfolio – Service Class 2
Franklin Templeton Variable Insurance Products Trust:
Global Real Estate VIP Fund – Class 2 (8)
Rising Dividends VIP Fund – Class 4 (8)
Small Cap Value VIP Fund – Class 2
Templeton Global Bond VIP Fund – Class 4 (8)
Templeton Growth VIP Fund – Class 2

159


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

Goldman Sachs Variable Insurance Trust:
Mid Cap Value Fund – Institutional Shares
Mid Cap Value Fund – Service Shares (8)
Multi-Strategy Alternatives Portfolio – Service Shares (10)
Small Cap Equity Insights Fund – Institutional Shares
Small Cap Equity Insights Fund – Service Shares (8)
Guggenheim Investments:
Floating Rate Strategies – Series F (8)
Global Managed Futures Strategy (8)
Long Short Equity Fund (8)
Macro Opportunities – Series M (8)
Multi-Hedge Strategies (8)
Invesco Variable Insurance Fund:
American Franchise – Series I Shares (2)
Balanced-Risk Allocation – Series II Shares (8)
Core Equity Fund – Series I Shares
Global Health Care Fund – Series I Shares
Global Health Care Fund – Series II Shares (8)
International Growth Fund – Series I Shares
International Growth Fund – Series II Shares (8)
MidCap Growth – Series I Shares (2)
Small Cap Equity Fund – Series I Shares
Technology Fund – Series I Shares
Value Opportunities – Series I Shares
Janus Aspen Series:
Janus Aspen Series Enterprise Portfolio – Service Shares
Janus Aspen Series Flexible Bond Portfolio – Service Shares (8)
MFS® Variable Insurance Trust:
International Value – Service Class (8)
New Discovery – Service Class (4)
Utilities Series – Service Class
Value Series – Service Class
Neuberger Berman Advisors Management Trust:
Large Cap Value Portfolio – Class I Shares
Mid-Cap Growth Portfolio – Class S Shares (10)
Socially Responsive Portfolio – Class I Shares
Oppenheimer Main Street Small Cap Fund®/VA - Service Shares (4)
PIMCO Variable Insurance Trust:
All Asset Portfolio Administrative Class
All Asset Portfolio Advisor Class (10)
Commodity Real Return Strategy M Class Division (10)
High Yield Portfolio Administrative Class
Low Duration Advisor Class Division (10)
Total Return Portfolio Administrative Class
Rydex Funds:
Basic Materials (10)
Commodities Strategy (8)
NASDAQ 100 (8)

160


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

T. Rowe Price Equity Series, Inc.:
Blue Chip Growth Portfolio – II
Health Sciences Portfolio – II
The Merger Fund (10)
Van Eck VIP Trust:
Global Hard Assets Fund –Class S Shares

(1)    Organized by Principal Life Insurance Company.
(2)
Commencement of operations, April 27, 2012.
(3)
Commencement of operations, May 21, 2012.
(4)
Commencement of operations, May 20, 2013.
(5)
Commencement of operations, December 2, 2013
(6)
Commencement of operations, April 24, 2014.
(7)
Commencement of operations, May 17, 2014.
(8)
Commencement of operations, November 10, 2014.
(9)
Commencement of operations, April 17, 2015.
(10)
Commencement of operations, May 18, 2015.
(11) Represented the operations of DWS Alternative Asset Allocation Class B Division until May 18, 2015.
(12) Represented the operations of DWS Equity 500 Index Class B2 Division until May 18, 2015.
(13) Represented the operations of DWS Small Mid Cap Value Class B Division until May 18, 2015.
   
Commencement of operations date is the date that the division became available to contractholders.


161


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

During 2015, the following subaccounts were liquidated and subsequently reinvested:

Date
 
Liquidation Subaccount
 
Reinvested Subaccount
 
Transferred Assets
April 17, 2015
 
LargeCap Blend II Class 1 Division
 
Principal Capital Appreciation Class 1 Division
 
$
118,690,704
November 6, 2015
 
Neuberger Berman AMT Small-Cap
   Growth S Class Division
 
Neuberger Berman AMT Mid Cap Growth
    Portfolio S Class Division
 
 
3,087,692
April 17, 2015
 
SmallCap Growth II Class 1 Division
 
SmallCap Blend Class 1 Division
 
 
30,427,185
April 17, 2015
 
SmallCap Growth II Class 2 Division
 
SmallCap Blend Class 2 Division
 
 
6,829
April 17, 2015
 
SmallCap Value I Class 1 Division
 
SmallCap Blend Class 1 Division
 
 
72,971,660
April 17, 2015
 
SmallCap Value I Class 2 Division
 
SmallCap Blend Class 2 Division
 
 
30,106

The assets of Separate Account B are owned by Principal Life. The assets of Separate Account B support the following variable annuity contracts of Principal Life and may not be used to satisfy the liabilities arising from any other business of Principal Life: Bankers Flexible Annuity; Pension Builder Plus; Pension Builder Plus-Rollover IRA; Personal Variable; Premier Variable; Principal Freedom Variable Annuity; Principal Freedom Variable Annuity 2; The Principal Variable Annuity; The Principal Variable Annuity with Purchase Payment Credit Rider; Principal Investment Plus Variable Annuity; Principal Investment Plus Variable Annuity with Premium Payment Credit Rider; Principal Lifetime Income Solutions; The Principal Pivot Series Variable Annuity and The Principal Pivot Series Variable Annuity with Liquidity Max Rider. Principal Life no longer accepts contributions for Bankers Flexible Annuity contracts, Pension Builder Plus contracts and Pension Builder Plus-Rollover IRA contracts. Contractholders are given the option of withdrawing their funds or transferring to another contract. Contributions to the Personal Variable contracts are no longer accepted from new customers, only from existing customers beginning January 1998.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements and accompanying notes of Separate Account B in accordance with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported and disclosed. These estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed in the financial statements and accompanying notes.

Investments

Investments are stated at the closing net asset value (“NAV”) per share on December 31, 2015. Net realized gains and losses on sales of investments are determined on the basis of the first-in, first-out (“FIFO”) method. Dividends are taken into income on an accrual basis as of the ex-dividend date. Investment transactions are accounted for on a trade date basis.


162


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels:

•
Level 1 – Fair values are based on unadjusted quoted prices in active markets for identical assets or liabilities.

•
Level 2 – Fair values are based on inputs other than quoted prices within Level 1 that are observable for the asset or
liability, either directly or indirectly.

•
Level 3 – Fair values are based on significant unobservable inputs for the asset or liability.

All investments of the open-end management investment companies listed above represent investments in mutual funds for which a daily NAV is calculated and published. Therefore, all investments are reflected in Level 1 of the fair value hierarchy.

2. Expenses and Related Party Transactions

Principal Life is compensated for the following expenses:

Bankers Flexible Annuity contracts – Mortality and expense risks assumed by Principal Life are compensated for by a daily charge resulting in a reduction of the unit value equivalent to an annual rate of 0.48% of the asset value of each contract. An annual administration charge of $7 for each participant’s account is deducted as compensation for administrative expenses. This charge is collected by redeeming units of the separate account.

Pension Builder Plus and Pension Builder Plus – Rollover IRA contracts – Mortality and expense risks assumed by Principal Life are compensated for by a daily charge resulting in a reduction of the unit value equivalent to an annual rate of 1.50% (1.0% for a Rollover Individual Retirement Annuity) of the asset value of each contract. A contingent sales charge of up to 7.0% may be deducted from withdrawals made during the first ten years of a contract, except for withdrawals related to death or permanent disability. An annual administration charge will be deducted ranging from a minimum of $25 to a maximum of $275 depending upon a participant’s investment account values and the number of participants under the retirement plan and their participant investment account value.

Personal Variable contracts – Mortality and expense risks assumed by Principal Life are compensated for by a daily charge resulting in a reduction of the unit value equivalent to an annual rate of 0.64% of the asset value of each contract. The contract provides for recordkeeping and other services and allows the contractholders, in their sole discretion, a customized plan-level service package and charges. An annual administration charge of $34 (increases to $37 if the benefit plan reports are distributed directly to the homes of plan participants) for each participant’s account plus 0.35% of the annual average balance of investment account values that correlate to a plan participant will be deducted on a quarterly basis.

Premier Variable contracts – Mortality and expense risks assumed by Principal Life are compensated for by a daily charge resulting in a reduction of the unit value equivalent to an annual rate of 0.42% of the asset value of each contract. The contract provides for recordkeeping and other services and allows the contractholders, in their sole discretion, a customized plan-level service package and charges. The amount varies by Plan document and account balance of contract. Recordkeeping charges are also paid by the contractholder. The annual charge ranges from $2,250 to $25,316 plus $10 per participant. The amount varies by total plan participants. There were no contingent sales charges provided for in these contracts.


163


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

Principal Freedom Variable Annuity – Mortality and expenses risk assumed by Principal Life are compensated for by a daily charge resulting in a reduction of the unit value equivalent to an annual rate of 0.85% of the asset value of each contract. Principal Life reserves the right to increase this charge but guarantees that it will not exceed 1.25% per year. A surrender charge up to 6.0% may be deducted from the withdrawals made during the first six years of a contract, except for withdrawals related to death, annuitization, permanent disability, confinement in a health facility, or terminal illness. Principal Life reserves the right to charge an additional administrative fee of up to 0.15% of the asset value of each division. This fee is currently being waived.

Principal Freedom Variable Annuity 2 – Mortality and expenses risk assumed by Principal Life are compensated for by a daily charge resulting in a reduction of the unit value equivalent to an annual rate of 0.95% of the asset value of each contract. Principal Life reserves the right to increase this charge but guarantees that it will not exceed 1.25% per year. A surrender charge up to 3.0% may be deducted from the withdrawals made during the first three years of a contract, except for death, annuitization, permanent disability, confinement in a health facility, or terminal illness. Principal Life reserves the right to charge an additional administrative fee of up to 0.15% of the asset value of each division. This fee is currently being waived.

The Principal Variable Annuity – Mortality and expense risks assumed by Principal Life are compensated for by a daily charge resulting in a reduction of the unit value equivalent to an annual rate of 1.25% of the asset value of each contract. A surrender charge of up to 6.0% may be deducted from the withdrawals made during the first six years of a contract, except for death, annuitization, permanent disability, confinement in a health care facility, or terminal illness. Principal Life reserves the right to charge an additional administrative fee of up to 0.15% of the asset value of each division. Currently, Principal Life is charging an annual rate of 0.05% of the asset value of each contract. This charge is deducted from the daily unit value. The product also contains an optional purchase payment credit rider, which charges an annual rate of 0.6%. For electing participants, the rider is deducted from the daily unit value. For contracts with the purchase payment credit rider, the maximum surrender charge is 8.0% from withdrawals made during the first eight years.

The Principal Investment Plus Variable Annuity – Mortality and expense risks assumed by Principal Life are compensated for by a daily charge resulting in a reduction of the unit value equivalent to an annual rate of 1.25% of the asset value of each contract. A surrender charge of up to 6.0% may be deducted from the withdrawals made during the first six years of a contract, except for death, annuitization, permanent disability, confinement in a health care facility, or terminal illness. An annual administration charge of the lesser of 2.0% of the accumulated value or $30 is deducted at the end of the contract year. Principal Life reserves the right to charge an additional administrative fee of up to 0.15% of the asset value of each division. Currently, Principal Life is charging an annual rate of 0.15% of the asset value of each contract. This charge is deducted from the daily unit value. The product also contains an optional premium payment credit rider, which charges an annual rate of 0.6%. For electing participants, the rider is deducted from the daily unit value. For contracts with the premium payment credit rider, the maximum surrender charge is 8.0% from withdrawals made during the first eight years.

Principal Lifetime Income SolutionsSM Variable Annuity – Mortality and expense risks assumed by Principal Life are compensated for by a daily charge resulting in a reduction of the unit value equivalent to an annual rate of 1.25% of the asset value of each contract. A surrender charge of up to 6% may be deducted from the withdrawals made during the first six years of a contract, except for death, annuitization, permanent disability, confinement in a health care facility or terminal illness. Principal Life reserves the right to charge an additional administration fee of up to 0.15% of the average daily net asset value of each division. Currently, Principal Life is charging an annual rate of 0.15% of the asset value of each contract. This charge is deducted from the daily unit value.


164


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

The Principal Pivot Series Variable Annuity – Mortality and expense risks assumed by Principal Life are compensated for by a daily charge resulting in a reduction of the unit value equivalent to an annual rate of 1.00% of the asset value of each contract. A surrender charge of up to 6.0% may be deducted from the withdrawals made during the first six years of a contract, except for death, annuitization, permanent disability, confinement in a health care facility, or terminal illness. An annual administration charge of the lesser of 2.0% of the accumulated value or $30 is deducted at the end of the contract year. Principal Life reserves the right to charge an additional administrative fee of up to 0.30% of the asset value of each division. Currently, Principal Life is charging an annual rate of 0.15% of the asset value of each contract. This charge is deducted from the daily unit value. The product also contains an optional liquidity max rider, which charges an annual rate of 0.25%. For electing participants, the rider is deducted from the daily unit value.

During the year ended December 31, 2015, management fees were paid indirectly to Principal Management Corporation (“Manager”) (wholly owned by Principal Financial Services, Inc.), an affiliate of Principal Life, in its capacity as advisor to Principal Variable Contracts Fund, Inc. Investment advisory and management fees are computed on an annual rate of 0.03% of each of the Principal LifeTime Accounts’ average daily net assets. The annual rate paid by the SAM Portfolios is based upon the aggregate average daily net assets (“aggregate net assets”) of the SAM Portfolios. The investment advisory and management fee schedule for the SAM Portfolios is 0.25% of aggregate net assets up to the first $1 billion and 0.20% of aggregate net assets over $1 billion.

The annual rates used in this calculation for each of the other Accounts are as shown in the following tables.

 
 
Net Assets of Accounts (in millions)
 
First $100
 
Next $100
 
Next $100
 
Next $100
 
Over $400
Balanced Account
 
0.60%
 
 
0.55%
 
 
0.50%
 
 
0.45%
 
 
0.40%
Bond & Mortgage Securities Account
 
0.50
 
 
0.45
 
 
0.40
 
 
0.35
 
 
0.30
Equity Income Account
 
0.60
 
 
0.55
 
 
0.50
 
 
0.45
 
 
0.40
LargeCap Growth Account I
 
0.80
 
 
0.75
 
 
0.70
 
 
0.65
 
 
0.60
MidCap Account
 
0.65
 
 
0.60
 
 
0.55
 
 
0.50
 
 
0.45
Money Market Account
 
0.50
 
 
0.45
 
 
0.40
 
 
0.35
 
 
0.30
Real Estate Securities Account
 
0.90
 
 
0.85
 
 
0.80
 
 
0.75
 
 
0.70
SmallCap Blend Account
 
0.85
 
 
0.80
 
 
0.75
 
 
0.70
 
 
0.65
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

165


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
Net Assets of Accounts (in millions)
 
First $250
 
Next $250
 
Next $250
 
Next $250
 
Over $1,000
Diversified International Account
 
0.85%
 
 
0.80%
 
 
0.75%
 
 
0.70%
 
 
0.65%
International Emerging Markets Account
 
1.25
 
 
1.20
 
 
1.15
 
 
1.10
 
 
1.05
LargeCap Value Account
 
0.60
 
 
0.55
 
 
0.50
 
 
0.45
 
 
0.40

 
Net Assets of Accounts
 
 
Net Assets of Accounts
 
(in millions)
 
 
(in millions)
 
First $500
 
Next $500
 
Next $1 billion
 
Next $1 billion
 
Over $3 billion
 
 
First $500
 
Over $500
 
 
 
 
 
 
 
 
 
 
 
Principal Capital
 
 
 
LargeCap Growth
 
 
 
 
 
 
 
 
 
 
Appreciation
 
 
 
Account
0.68%
 
0.63%
 
0.61%
 
0.56%
 
0.51%
 
Account
0.625%
 
0.500%

 
Net Assets of Accounts
 
 
Net Assets of Accounts
 
First $2 billion
 
Over $2 billion
 
 
First $200
 
Next $300
 
Over $500
Government & High Quality
 
 
 
 
 
 
 
 
 
 
Bond Account
0.50%
 
0.45%
 
Short-Term Income Account
0.50%
 
0.45%
 
0.40%
Income Account
0.50%
 
0.45%
 
 
 
 
 
 
 

 
All Net Assets
Diversified Balanced Account
0.05%
Diversified Balanced Managed Volatility Account
0.05
Diversified Growth Account
0.05
Diversified Growth Managed Volatility Account
0.05
Diversified Income Account
0.05
LargeCap S&P 500 Index Account
0.25

The Manager has contractually agreed to limit the Separate Account’s management and investment advisory fees for certain of the Separate Accounts through the period ended April 30, 2016. The expense limit will reduce the Separate Account’s management and investment advisory fees by the following amounts:

LargeCap Growth Account I
0.016%



166


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

The Manager has contractually agreed to limit the expenses (excluding interest the Separate Accounts incur in connection with investments they make) for certain classes of shares of certain of the Separate Accounts. The reductions and reimbursements are in amounts that maintain total operating expenses at or below certain limits. The limits are expressed as a percentage of average daily net assets attributable to each class of shares on an annualized basis during the reporting period. The operating expense limits are as follows:

 
From January 1, 2015 through December 31, 2015
 
Class 1
Class 2
Expiration
Diversified Balanced Managed Volatility Account
N/A
0.31%
April 30, 2016
Diversified Growth Managed Volatility Account
N/A
0.31
April 30, 2016

The Manager has contractually agreed to limit Short-Term Income Account’s expenses by 0.01% through the period ended April 30, 2016.

In addition, the Manager has voluntarily agreed to limit the expenses (excluding interest the Separate Accounts incur in connection with investments they make and acquired fund fees and expenses) attributable to Class 2 shares of certain of the Separate Accounts. The reductions and reimbursements are in amounts that maintain total operating expenses at or below certain limits. The limits are expressed as a percentage of average daily net assets on an annualized basis during the reporting period. The expense limit may be terminated at any time. The operating expense limits are as follows:

 
Expense Limit
Diversified Balanced Account
0.31%
Diversified Growth Account
0.31
Diversified Income Account
0.31

In addition, the Manager has voluntarily agreed to limit the Money Market Account’s expenses to the extent necessary to maintain a 0% yield. The voluntary expense limit may be terminated at any time.

3. Federal Income Taxes
    
The operations of the Separate Account are a part of the operations of Principal Life. Under current practice, no federal income taxes are allocated by Principal Life to the operations of the Separate Account.


167


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

4. Purchases and Sales of Investments

The aggregate cost of purchases and proceeds from sales of investments were as follows for the period ended December 31, 2015:

 
 
2015
Division:
 
Purchases
 
Sales
 
 
 
 
 
 
 
AllianceBernstein Small Cap Growth Class A Division:
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
$
1,443,718
 
$
853,858

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
41,664
 
 
405,074

 
 
 
 
 
 
 
AllianceBernstein Small/Mid Cap Value Class A Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
144,263
 
$
86,270

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

Principal Investment Plus Variable Annuity
 
 
1,363,109
 
 
417,779

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
285,030
 
 
221,463

 
 
 
 
 
 
 
Alps/Red Rocks Listed Private Equity Class III Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
—
 
$
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
24,773
 
 
99

 
 
 
 
 
 
 
American Century VP Capital Appreciation Class I Division:
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
$
755,910
 
$
471,878

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
59,759
 
 
329,826

 
 
 
 
 
 
 
American Century VP Income & Growth Class I Division:
 
 
 
 
 
 
Principal Freedom Variable Annuity
 
$
402,781
 
$
429,193

Principal Freedom Variable Annuity 2
 
 
10,289
 
 
31,458

The Principal Variable Annuity
 
 
1,427,319
 
 
2,110,021

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
3,609

 
 
 
 
 
 
 
American Century VP Inflation Protection Class II Division:
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
$
9,594,649
 
$
16,933,083

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
309,291
 
 
4,363,422

Principal Pivot Series Variable Annuity
 
 
28,610
 
 
11,068

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
29,364
 
 
4,492

The Principal Variable Annuity
 
 
66,970
 
 
1,243

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

 
 
 
 
 
 
 
American Century VP MidCap Value Class II Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
403,181
 
$
669,379

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

Principal Investment Plus Variable Annuity
 
 
2,077,900
 
 
482,458

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
376,840
 
 
141,140

 
 
 
 
 
 
 
American Century VP Ultra Class I Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
932,598
 
$
840,963

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
32,193

 
 
 
 
 
 
 
American Century VP Ultra Class II Division:
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
$
8,536,645
 
$
12,259,318

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
402,155
 
 
3,625,746

 
 
 
 
 
 
 

168


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
2015
Division:
 
Purchases
 
Sales
American Century VP Value Class II Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
1,054,770
 
$
3,040,205

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
181
 
 
61,551

Principal Pivot Series Variable Annuity
 
 
100,865
 
 
921

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
225,796
 
 
9,329

 
 
 
 
 
 
 
American Funds Insurance Series Asset Allocation Fund Class 4 Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
260,744
 
$
1,144

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
548,696
 
 
254

 
 
 
 
 
 
 
American Funds Insurance Series Blue Chip Income & Growth Fund Class 4 Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
387,682
 
$
2,334

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
623,429
 
 
74,523

 
 
 
 
 
 
 
American Funds Insurance Series Global Small Capitalization Fund Class 2 Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
580,722
 
$
251,271

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

Principal Investment Plus Variable Annuity
 
 
518,770
 
 
7,031

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
3,276
 
 
3,902

 
 
 
 
 
 
 
American Funds Insurance Series Global Small Capitalization Fund Class 4 Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
62,875
 
$
9,227

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
86,346
 
 
3,860

 
 
 
 
 
 
 
American Funds Insurance Series High-Income Bond Class 2 Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
536,799
 
$
328,779

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

 
 
 
 
 
 
 
American Funds Insurance Series Managed Risk Asset Allocation Fund Class P2 Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
50,459
 
$
31,309

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
45,547
 
 
230

 
 
 
 
 
 
 
American Funds Insurance Series Managed Risk Growth Fund Class P2 Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
47,766
 
$
2,404

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
76,883
 
 
1,654

 
 
 
 
 
 
 
American Funds Insurance Series Managed Risk International Fund Class P2 Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
11,626
 
$
405

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
11,588
 
 
292

 
 
 
 
 
 
 
American Funds Insurance Series New World Fund Class 2 Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
171,019
 
$
61,100

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

Principal Investment Plus Variable Annuity
 
 
234,316
 
 
22,910

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
2,226
 
 
2,206

 
 
 
 
 
 
 
American Funds Insurance Series New World Fund Class 4 Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
216,438
 
$
11,984

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
180,754
 
 
7,454

 
 
 
 
 
 
 

169


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
2015
Division:
 
Purchases
 
Sales
Balanced Class 1 Division:
 
 
 
 
 
 
Personal Variable
 
$
93,216
 
$
25,792

Premier Variable
 
 
904,905
 
 
1,355,525

The Principal Variable Annuity
 
 
2,968,374
 
 
4,921,527

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
55,776

 
 
 
 
 
 
 
BlackRock Global Allocation Class III Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
64,304
 
$
332

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

Principal Investment Plus Variable Annuity
 
 
432,335
 
 
6,469

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
9,197
 
 
—

Principal Pivot Series Variable Annuity
 
 
4,324
 
 
190

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
59,338
 
 
—

 
 
 
 
 
 
 
BlackRock iShares Alternative Strategies Class III Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
36,731
 
$
59

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

Principal Investment Plus Variable Annuity
 
 
168,022
 
 
87,243

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
11,600
 
 
—

Principal Pivot Series Variable Annuity
 
 
—
 
 
22

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
5,199
 
 
—

 
 
 
 
 
 
 
BlackRock iShares Dynamic Allocation Class III Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
—
 
$
—

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

Principal Investment Plus Variable Annuity
 
 
28,795
 
 
184

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
33,843
 
 
—

Principal Pivot Series Variable Annuity
 
 
—
 
 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
—
 
 
—

 
 
 
 
 
 
 
BlackRock iShares Dynamic Fixed Income Class III Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
36,292
 
$
14,497

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

Principal Investment Plus Variable Annuity
 
 
92,908
 
 
1,404

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
—
 
 
—

Principal Pivot Series Variable Annuity
 
 
—
 
 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
617
 
 
11

 
 
 
 
 
 
 
BlackRock iShares Equity Appreciation Class III Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
3,301
 
$
19

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

Principal Investment Plus Variable Annuity
 
 
69,136
 
 
315

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
40,481
 
 
—

Principal Pivot Series Variable Annuity
 
 
—
 
 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
5,794
 
 
34

 
 
 
 
 
 
 
BlackRock Value Opportunities Class III Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
—
 
$
2

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
903
 
 
—

 
 
 
 
 
 
 

170


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
2015
Division:
 
Purchases
 
Sales
Bond & Mortgage Securities Class 1 Division:
 
 
 
 
 
 
Personal Variable
 
$
27,141
 
$
38,236

Premier Variable
 
 
704,216
 
 
1,418,559

Principal Freedom Variable Annuity
 
 
342,237
 
 
827,939

Principal Freedom Variable Annuity 2
 
 
19,471
 
 
43,469

The Principal Variable Annuity
 
 
4,712,325
 
 
13,261,544

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
4,755
 
 
249,487

Principal Investment Plus Variable Annuity
 
 
13,967,036
 
 
23,587,422

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
3,222,013
 
 
7,548,985

 
 
 
 
 
 
 
Bond & Mortgage Securities Class 2 Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
20,256
 
$
20,114

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
19,409
 
 
316

 
 
 
 
 
 
 
Calvert EAFE International Index Class F Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
3,900
 
$
66

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
6,496
 
 
135

 
 
 
 
 
 
 
Calvert Russell 2000 Small Cap Index Class F Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
75,584
 
$
3,843

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
22,362
 
 
1,622

 
 
 
 
 
 
 
Calvert S&P MidCap 400 Index Class F Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
278,298
 
$
9,860

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
270,883
 
 
51,651

 
 
 
 
 
 
 
ClearBridge Small Cap Growth Series II Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
—
 
$
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
9,106
 
 
54

 
 
 
 
 
 
 
Columbia Limited Duration Credit Class 2 Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
54,350
 
$
1,231

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

Principal Investment Plus Variable Annuity
 
 
72,589
 
 
1,647

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
8,090
 
 
—

Principal Pivot Series Variable Annuity
 
 
—
 
 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
11,239
 
 
340

 
 
 
 
 
 
 
Columbia Small Cap Value Class 2 Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
1,083
 
$
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
85,164
 
 
1,541

 
 
 
 
 
 
 
Delaware Limited Term Diversified Income Service Class Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
69,319
 
$
294

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

Principal Investment Plus Variable Annuity
 
 
137,257
 
 
3,284

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
13,365
 
 
—

Principal Pivot Series Variable Annuity
 
 
—
 
 
55

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
11,665
 
 
—

 
 
 
 
 
 
 



171


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
2015
Division:
 
Purchases
 
Sales
Delaware Small Cap Value Service Class Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
24,615
 
$
34,367

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
1,722

Principal Investment Plus Variable Annuity
 
 
523,659
 
 
225,556

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
158,841
 
 
9,639

 
 
 
 
 
 
 
Deutsche Alternative Asset Allocation Class B Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
—
 
$
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
43,087
 
 
1,007

 
 
 
 
 
 
 
Deutsche Equity 500 Index Class B2 Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
298,800
 
$
8,254

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
395,949
 
 
35,144

 
 
 
 
 
 
 
Deutsche Small Mid Cap Value Class B Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
29,707
 
$
24,888

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

Principal Investment Plus Variable Annuity
 
 
401,477
 
 
107,138

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
21,446
 
 
3,137

Principal Pivot Series Variable Annuity
 
 
18,526
 
 
325

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
99,834
 
 
3,468

 
 
 
 
 
 
 
Diversified Balanced Class 2 Division:
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
$
154,479,687
 
$
118,225,094

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
14,841,087
 
 
8,632,702

Principal Lifetime Income Solutions
 
 
932,294
 
 
2,921,324

Principal Pivot Series Variable Annuity
 
 
—
 
 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
—
 
 
—

 
 
 
 
 
 
 
Diversified Balanced Managed Volatility Class 2 Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
6,998
 
$
23

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

Principal Investment Plus Variable Annuity
 
 
66,974,309
 
 
22,741,506

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
3,846,881
 
 
1,262,585

Principal Lifetime Income Solutions
 
 
11,672,407
 
 
2,633,244

Principal Pivot Series Variable Annuity
 
 
170,843
 
 
568

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
309,842
 
 
66,575

 
 
 
 
 
 
 
Diversified Growth Class 2 Division:
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
$
642,720,696
 
$
261,773,720

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
34,583,216
 
 
23,449,077

Principal Lifetime Income Solutions
 
 
1,587,013
 
 
2,793,880

Principal Pivot Series Variable Annuity
 
 
—
 
 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
—
 
 
—

 
 
 
 
 
 
 
Diversified Growth Managed Volatility Class 2 Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
—
 
$
—

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

Principal Investment Plus Variable Annuity
 
 
114,703,352
 
 
25,632,071

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
10,385,434
 
 
1,334,786

Principal Lifetime Income Solutions
 
 
9,744,388
 
 
1,728,367

Principal Pivot Series Variable Annuity
 
 
285,633
 
 
3,946

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
31,381
 
 
2,023


172


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
2015
Division:
 
Purchases
 
Sales
Diversified Income Class 2 Division:
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
$
81,226,231
 
$
48,288,717

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
3,608,167
 
 
3,658,809

Principal Lifetime Income Solutions
 
 
970,669
 
 
995,922

 
 
 
 
 
 
 
Diversified International Class 1 Division:
 
 
 
 
 
 
Personal Variable
 
$
41,505
 
$
70,248

Premier Variable
 
 
975,630
 
 
1,409,834

Principal Freedom Variable Annuity
 
 
289,516
 
 
331,162

Principal Freedom Variable Annuity 2
 
 
28,728
 
 
113,323

The Principal Variable Annuity
 
 
6,693,146
 
 
15,668,016

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
2,439
 
 
360,225

Principal Investment Plus Variable Annuity
 
 
9,644,893
 
 
10,464,192

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
699,392
 
 
4,349,411

 
 
 
 
 
 
 
Diversified International Class 2 Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
126,252
 
$
15,336

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
101,331
 
 
10,384

 
 
 
 
 
 
 
Dreyfus IP MidCap Stock Service Shares Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
19,788
 
$
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
25,181
 
 
1,189

 
 
 
 
 
 
 
Dreyfus Investment Portfolio Technology Growth Service Shares Division:
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
$
2,322,853
 
$
811,999

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
231,839
 
 
326,366

 
 
 
 
 
 
 
Equity Income Class 1 Division:
 
 
 
 
 
 
Premier Variable
 
$
95,159
 
$
83,112

The Principal Variable Annuity
 
 
3,496,140
 
 
9,962,393

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
188
 
 
177,145

Principal Investment Plus Variable Annuity
 
 
26,899,596
 
 
44,197,750

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
1,475,052
 
 
14,480,407

 
 
 
 
 
 
 
Equity Income Class 2 Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
435,135
 
$
23,708

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
623,710
 
 
36,414

 
 
 
 
 
 
 
Fidelity VIP Contrafund Service Class Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
6,206,194
 
$
7,663,453

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
238,576

 
 
 
 
 
 
 
Fidelity VIP Contrafund Service Class 2 Division:
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
$
13,231,559
 
$
11,539,853

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
1,226,560
 
 
3,438,570

Principal Pivot Series Variable Annuity
 
 
594,844
 
 
37,393

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
728,937
 
 
80,901

 
 
 
 
 
 
 
Fidelity VIP Equity-Income Service Class 2 Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
3,965,592
 
$
4,671,925

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
572
 
 
167,008

Principal Investment Plus Variable Annuity
 
 
3,120,918
 
 
2,020,860

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
321,541
 
 
777,072

 
 
 
 
 
 
 

173


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
2015
Division:
 
Purchases
 
Sales
Fidelity VIP Growth Service Class Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
1,276,597
 
$
2,779,543

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
32,021

 
 
 
 
 
 
 
Fidelity VIP Growth Service Class 2 Division:
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
$
2,777,563
 
$
1,744,932

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
452,605
 
 
1,288,949

 
 
 
 
 
 
 
Fidelity VIP Mid Cap Service Class Division:
 
 
 
 
 
 
Principal Freedom Variable Annuity 2
 
$
8,727
 
$
690

 
 
 
 
 
 
 
Fidelity VIP Mid Cap Service Class 2 Division:
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
$
5,739,364
 
$
2,674,302

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
785,393
 
 
786,373

Principal Pivot Series Variable Annuity
 
 
544,697
 
 
60,047

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
425,948
 
 
56,533

 
 
 
 
 
 
 
Fidelity VIP Overseas Service Class 2 Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
184,966
 
$
93,622

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

Principal Investment Plus Variable Annuity
 
 
5,941,679
 
 
9,889,554

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
258,858
 
 
3,858,737

Principal Pivot Series Variable Annuity
 
 
63,115
 
 
3,501

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
64,115
 
 
5,408

 
 
 
 
 
 
 
Franklin Global Real Estate VIP Class 2 Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
64,165
 
$
27,441

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

Principal Investment Plus Variable Annuity
 
 
60,073
 
 
2,384

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
5,063
 
 
—

Principal Pivot Series Variable Annuity
 
 
211,453
 
 
6,834

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
194,327
 
 
23,258

 
 
 
 
 
 
 
Franklin Rising Dividends VIP Class 4 Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
182,161
 
$
6,133

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
304,684
 
 
24,942

 
 
 
 
 
 
 
Franklin Small Cap Value VIP Class 2 Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
139,396
 
$
79,540

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
6,013

Principal Investment Plus Variable Annuity
 
 
796,855
 
 
676,898

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
353,691
 
 
86,633

 
 
 
 
 
 
 
Goldman Sachs VIT Mid Cap Value Institutional Shares Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
136,744
 
$
76,254

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

Principal Investment Plus Variable Annuity
 
 
3,809,574
 
 
3,402,446

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
316,063
 
 
1,642,696

 
 
 
 
 
 
 
Goldman Sachs VIT Mid Cap Value Service Shares Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
160,803
 
$
14,324

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
403,383
 
 
11,631

 
 
 
 
 
 
 
 
 
 
 
 
 
 

174


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
2015
Division:
 
Purchases
 
Sales
Goldman Sachs VIT Multi-Strategy Alternatives Portfolio Service Shares Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
—
 
$
51

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
12,766
 
 
—

 
 
 
 
 
 
 
Goldman Sachs VIT Small Cap Equity Insights Institutional Shares Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
138,688
 
$
123,939

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

Principal Investment Plus Variable Annuity
 
 
1,683,045
 
 
1,273,625

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
53,115
 
 
298,350

 
 
 
 
 
 
 
Goldman Sachs VIT Small Cap Equity Insights Service Shares Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
57,479
 
$
4,549

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
70,494
 
 
88

 
 
 
 
 
 
 
Government & High Quality Bond Class 1 Division:
 
 
 
 
 
 
Pension Builder Plus
 
$
2,001
 
$
18,011

Pension Builder Plus – Rollover IRA
 
 
1,112
 
 
468

Personal Variable
 
 
23,742
 
 
53,838

Premier Variable
 
 
1,449,220
 
 
1,717,304

Principal Freedom Variable Annuity
 
 
287,466
 
 
351,164

Principal Freedom Variable Annuity 2
 
 
13,539
 
 
43,680

The Principal Variable Annuity
 
 
5,725,497
 
 
13,385,859

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
629
 
 
195,690

Principal Investment Plus Variable Annuity
 
 
8,805,731
 
 
14,457,009

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
576,663
 
 
3,018,505

 
 
 
 
 
 
 
Government & High Quality Bond Class 2 Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
876,913
 
$
49,877

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
211,066
 
 
19,951

 
 
 
 
 
 
 
Guggenheim Floating Rate Strategies Series F Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
201,074
 
$
19,154

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

Principal Investment Plus Variable Annuity
 
 
596,375
 
 
80,386

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
123,893
 
 
102,988

Principal Pivot Series Variable Annuity
 
 
67,161
 
 
39,180

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
57,058
 
 
3,891

 
 
 
 
 
 
 
Guggenheim Investments Global Managed Futures Strategy Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
9,211
 
$
8,059

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

Principal Investment Plus Variable Annuity
 
 
4,670
 
 
80

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
—
 
 
—

Principal Pivot Series Variable Annuity
 
 
75,332
 
 
2,816

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
27,549
 
 
2,084

 
 
 
 
 
 
 
Guggenheim Investments Long Short Equity Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
59,426
 
$
227

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

Principal Investment Plus Variable Annuity
 
 
23,098
 
 
56

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
3,273
 
 
—

Principal Pivot Series Variable Annuity
 
 
6,680
 
 
7,201

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
56,247
 
 
6,640

 
 
 
 
 
 
 

175


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
2015
Division:
 
Purchases
 
Sales
Guggenheim Investments Multi-Hedge Strategies Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
16,275
 
$
10,824

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

Principal Investment Plus Variable Annuity
 
 
20,721
 
 
636

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
—
 
 
—

Principal Pivot Series Variable Annuity
 
 
5,989
 
 
3,709

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
52,746
 
 
405

 
 
 
 
 
 
 
Guggenheim Macro Opportunities Series M Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
80,955
 
$
214

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

Principal Investment Plus Variable Annuity
 
 
29,562
 
 
171

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
5,391
 
 
—

Principal Pivot Series Variable Annuity
 
 
56,086
 
 
1,531

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
55,764
 
 
209

 
 
 
 
 
 
 
Income Class 1 Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
77,310
 
$
1,472

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

Principal Investment Plus Variable Annuity
 
 
522,010
 
 
15,329

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
16,123
 
 
—

 
 
 
 
 
 
 
Income Class 2 Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
11,106
 
$
10,896

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
18,017
 
 
1

 
 
 
 
 
 
 
International Emerging Markets Class 1 Division:
 
 
 
 
 
 
Premier Variable
 
$
71,699
 
$
45,147

The Principal Variable Annuity
 
 
2,737,690
 
 
5,292,467

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
905
 
 
265,895

Principal Investment Plus Variable Annuity
 
 
7,468,363
 
 
6,699,279

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
556,734
 
 
3,061,371

 
 
 
 
 
 
 
International Emerging Markets Class 2 Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
—
 
$
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
36,005
 
 
130

 
 
 
 
 
 
 
Invesco American Franchise Series I Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
315,689
 
$
740,821

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
19,686

 
 
 
 
 
 
 
Invesco Balanced-Risk Allocation Series II Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
28,755
 
$
1,036

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
202,408
 
 
1,346

 
 
 
 
 
 
 
Invesco Core Equity Series I Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
2,970,509
 
$
3,317,686

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
11,199

 
 
 
 
 
 
 
Invesco Global Health Care Series I Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
3,323,058
 
$
2,971,760

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
75,444




176


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
2015
Division:
 
Purchases
 
Sales
Invesco Global Health Care Series II Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
298,520
 
$
20,117
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
692,980
 
 
115,610
 
 
 
 
 
 
 
Invesco International Growth Series I Division:
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
$
2,234,869
 
$
2,028,899
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
239,526
 
 
302,763
 
 
 
 
 
 
 
Invesco International Growth Series II Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
226,620
 
$
11,731
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
218,635
 
 
5,158
 
 
 
 
 
 
 
Invesco Mid Cap Growth Series I Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
574,287
 
$
388,574
The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
53,862
 
 
 
 
 
 
 
Invesco Small Cap Equity Series I Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
901,375
 
$
805,709
The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
23,896
Principal Investment Plus Variable Annuity
 
 
1,857,531
 
 
1,104,969
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
386,920
 
 
414,378
 
 
 
 
 
 
 
Invesco Technology Series I Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
716,433
 
$
895,042
The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
25,034
 
 
 
 
 
 
 
Invesco Value Opportunities Series I Division:
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
$
1,192,704
 
$
912,874
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
216,242
 
 
395,533
 
 
 
 
 
 
 
Janus Aspen Enterprise Service Shares Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
1,542,931
 
$
1,462,176
The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
76,700
 
 
 
 
 
 
 
Janus Aspen Flexible Bond Service Shares Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
274,127
 
$
9,309
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
495,602
 
 
14,447
 
 
 
 
 
 
 
LargeCap Growth Class 1 Division:
 
 
 
 
 
 
Personal Variable
 
$
64,436
 
$
73,923
Premier Variable
 
 
2,786,259
 
 
3,347,155
The Principal Variable Annuity
 
 
925,245
 
 
4,705,452
The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
86,383
Principal Investment Plus Variable Annuity
 
 
1,860,211
 
 
3,010,171
Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
217,213
 
 
1,063,692
 
 
 
 
 
 
 
LargeCap Growth Class 2 Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
281,350
 
$
52,933
Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
207,026
 
 
1,415
 
 
 
 
 
 
 

177


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
2015
Division:
 
Purchases
 
Sales
LargeCap Growth I Class 1 Division:
 
 
 
 
 
 
Premier Variable
 
$
189,802
 
$
3,589

Principal Freedom Variable Annuity
 
 
421,374
 
 
127,553

Principal Freedom Variable Annuity 2
 
 
26,501
 
 
24,744

The Principal Variable Annuity
 
 
15,321,680
 
 
13,320,573

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
16,115
 
 
126,097

Principal Investment Plus Variable Annuity
 
 
5,865,719
 
 
2,970,562

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
391,819
 
 
980,704

 
 
 
 
 
 
 
LargeCap Growth I Class 2 Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
435,654
 
$
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
128,329
 
 
2,161

 
 
 
 
 
 
 
LargeCap S&P 500 Index Class 1 Division:
 
 
 
 
 
 
Premier Variable
 
$
210,579
 
$
53,447

Principal Freedom Variable Annuity
 
 
295,154
 
 
1,037,646

Principal Freedom Variable Annuity 2
 
 
17,407
 
 
56,914

The Principal Variable Annuity
 
 
3,357,432
 
 
9,399,820

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
3,245
 
 
188,978

Principal Investment Plus Variable Annuity
 
 
10,087,877
 
 
10,070,242

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
940,522
 
 
2,814,185

 
 
 
 
 
 
 
LargeCap S&P 500 Index Class 2 Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
32,347
 
$
12

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
123,347
 
 
2,316

 
 
 
 
 
 
 
LargeCap Value Class 1 Division:
 
 
 
 
 
 
Bankers Flexible Annuity
 
$
114,408
 
$
17,823

Pension Builder Plus
 
 
269,393
 
 
158,384

Pension Builder Plus – Rollover IRA
 
 
26,100
 
 
29,166

Personal Variable
 
 
75,088
 
 
22,532

Premier Variable
 
 
1,642,413
 
 
2,192,694

Principal Freedom Variable Annuity
 
 
437,581
 
 
253,959

Principal Freedom Variable Annuity 2
 
 
101,795
 
 
24,870

The Principal Variable Annuity
 
 
8,165,167
 
 
8,781,520

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
33,944

Principal Investment Plus Variable Annuity
 
 
5,012,773
 
 
3,819,636

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
553,965
 
 
1,665,282

 
 
 
 
 
 
 
LargeCap Value Class 2 Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
—
 
$
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
10,789
 
 
66

 
 
 
 
 
 
 
MFS VIT International Value Service Class Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
408,520
 
$
8,326

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

Principal Investment Plus Variable Annuity
 
 
627,011
 
 
62,802

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
43,512
 
 
3,534

Principal Pivot Series Variable Annuity
 
 
274,542
 
 
15,167

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
301,974
 
 
46,317

 
 
 
 
 
 
 

178


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
2015
Division:
 
Purchases
 
Sales
MFS VIT New Discovery Service Class Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
362,206
 
$
117,942

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
6,277

Principal Investment Plus Variable Annuity
 
 
351,885
 
 
230,020

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
5,179
 
 
4,362

Principal Pivot Series Variable Annuity
 
 
—
 
 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
22,607
 
 
1,114

 
 
 
 
 
 
 
MFS VIT Utilities Service Class Division:
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
$
3,818,871
 
$
2,136,439

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
363,833
 
 
816,000

Principal Pivot Series Variable Annuity
 
 
208,569
 
 
32,016

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
709,679
 
 
87,576

 
 
 
 
 
 
 
MFS VIT Value Service Class Division:
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
$
1,252,598
 
$
770,297

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
216,245
 
 
244,019

 
 
 
 
 
 
 
MidCap Class 1 Division:
 
 
 
 
 
 
Personal Variable
 
$
187,020
 
$
119,187

Premier Variable
 
 
2,370,107
 
 
2,798,642

Principal Freedom Variable Annuity
 
 
1,198,894
 
 
921,381

Principal Freedom Variable Annuity 2
 
 
135,039
 
 
43,863

The Principal Variable Annuity
 
 
30,036,828
 
 
34,039,306

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
772,236

Principal Investment Plus Variable Annuity
 
 
27,630,282
 
 
31,366,561

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
1,550,827
 
 
9,726,178

 
 
 
 
 
 
 
Money Market Class 1 Division:
 
 
 
 
 
 
Pension Builder Plus
 
$
1
 
$
17,578

Pension Builder Plus – Rollover IRA
 
 
—
 
 
—

Personal Variable
 
 
96,230
 
 
68,309

Premier Variable
 
 
4,521,294
 
 
5,020,760

Principal Freedom Variable Annuity
 
 
49,015
 
 
364,099

Principal Freedom Variable Annuity 2
 
 
24,816
 
 
14,528

The Principal Variable Annuity
 
 
7,550,794
 
 
12,199,662

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
211,042
 
 
249,900

Principal Investment Plus Variable Annuity
 
 
39,681,647
 
 
39,683,023

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
7,176,111
 
 
7,418,680

Principal Lifetime Income Solutions
 
 
—
 
 
124,743

 
 
 
 
 
 
 
Money Market Class 2 Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
1,681,947
 
$
1,501,488

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
5,808,041
 
 
4,824,740

 
 
 
 
 
 
 
Neuberger Berman AMT Large Cap Value I Class Division:
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
$
943,608
 
$
901,970

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
17,440
 
 
298,420

 
 
 
 
 
 
 
Neuberger Berman AMT Mid-Cap Growth Portfolio S Class Division:
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
$
2,674,076
 
$
68,967

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
272,017
 
 
55,555

Principal Pivot Series Variable Annuity
 
 
30,777
 
 
11,530

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
28,963
 
 
10


179


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
 
 
 
2015
Division:
 
Purchases
 
Sales
Neuberger Berman AMT Socially Responsive I Class Division:
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
$
1,239,817
 
$
1,317,921

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
46,678
 
 
442,003

 
 
 
 
 
 
 
Oppenheimer Main Street Small Cap Service Shares Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
312,150
 
$
265,886

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
1,800

 
 
 
 
 
 
 
PIMCO All Asset Administrative Class Division:
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
$
677,391
 
$
992,269

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
63,428
 
 
236,564

 
 
 
 
 
 
 
PIMCO All Asset Advisor Class Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
5,675
 
$
5,605

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
—
 
 
—

 
 
 
 
 
 
 
PIMCO Commodity Real Return Strategy M Class Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
2,970
 
$
56

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
11,330
 
 
—

 
 
 
 
 
 
 
PIMCO High Yield Administrative Class Division:
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
$
4,330,413
 
$
3,555,296

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
263,892
 
 
811,093

Principal Pivot Series Variable Annuity
 
 
361,510
 
 
6,272

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
498,556
 
 
51,407

 
 
 
 
 
 
 
PIMCO Low Duration Advisor Class Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
2,691
 
$
1,002

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

Principal Investment Plus Variable Annuity
 
 
342,542
 
 
509

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
4,724
 
 
5,183

Principal Pivot Series Variable Annuity
 
 
11,641
 
 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
13,537
 
 
186

 
 
 
 
 
 
 
PIMCO Total Return Administrative Class Division:
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
$
4,937,453
 
$
5,389,995

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
328,393
 
 
933,749

Principal Pivot Series Variable Annuity
 
 
279,751
 
 
3,797

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
269,550
 
 
18,350

 
 
 
 
 
 
 
Principal Capital Appreciation Class 1 Division:
 
 
 
 
 
 
Principal Freedom Variable Annuity 2
 
$
860
 
$
4,224

The Principal Variable Annuity
 
 
41,631,362
 
 
4,952,512

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

Principal Investment Plus Variable Annuity
 
 
75,753,433
 
 
15,088,491

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
8,285,142
 
 
5,018,434

 
 
 
 
 
 
 
Principal Capital Appreciation Class 2 Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
135,860
 
$
23,466

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
359,772
 
 
20,558

 
 
 
 
 
 
 

180


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
2015
Division:
 
Purchases
 
Sales
Principal LifeTime Strategic Income Class 1 Division:
 
 
 
 
 
 
Principal Freedom Variable Annuity 2
 
$
3,197
 
$
619,044

The Principal Variable Annuity
 
 
345,304
 
 
1,231,203

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
52,863

Principal Investment Plus Variable Annuity
 
 
1,535,075
 
 
3,427,954

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
30,718
 
 
709,576

 
 
 
 
 
 
 
Principal LifeTime 2010 Class 1 Division:
 
 
 
 
 
 
Principal Freedom Variable Annuity 2
 
$
34,866
 
$
404,164

The Principal Variable Annuity
 
 
131,712
 
 
406,439

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

Principal Investment Plus Variable Annuity
 
 
2,639,209
 
 
5,681,149

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
228,938
 
 
800,799

 
 
 
 
 
 
 
Principal LifeTime 2020 Class 1 Division:
 
 
 
 
 
 
Principal Freedom Variable Annuity 2
 
$
410,482
 
$
438,112

The Principal Variable Annuity
 
 
542,828
 
 
797,217

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

Principal Investment Plus Variable Annuity
 
 
21,297,060
 
 
27,222,311

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
911,085
 
 
10,630,341

 
 
 
 
 
 
 
Principal LifeTime 2020 Class 2 Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
—
 
$
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
17,409
 
 
113

 
 
 
 
 
 
 
Principal LifeTime 2030 Class 1 Division:
 
 
 
 
 
 
Principal Freedom Variable Annuity 2
 
$
181,539
 
$
407,741

The Principal Variable Annuity
 
 
539,790
 
 
497,687

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

Principal Investment Plus Variable Annuity
 
 
10,517,889
 
 
8,078,588

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
644,996
 
 
2,183,742

 
 
 
 
 
 
 
Principal LifeTime 2030 Class 2 Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
518
 
$
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
17,666
 
 
1,071

 
 
 
 
 
 
 
Principal LifeTime 2040 Class 1 Division:
 
 
 
 
 
 
Principal Freedom Variable Annuity 2
 
$
22,166
 
$
80,937

The Principal Variable Annuity
 
 
351,313
 
 
58,655

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

Principal Investment Plus Variable Annuity
 
 
1,810,946
 
 
1,585,173

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
183,149
 
 
480,849

 
 
 
 
 
 
 
Principal LifeTime 2040 Class 2 Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
500
 
$
1

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
—
 
 
—

 
 
 
 
 
 
 
Principal LifeTime 2050 Class 1 Division:
 
 
 
 
 
 
Principal Freedom Variable Annuity 2
 
$
12,469
 
$
1,623

The Principal Variable Annuity
 
 
28,071
 
 
123,222

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

Principal Investment Plus Variable Annuity
 
 
2,812,267
 
 
1,382,177

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
52,474
 
 
456,283


181


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
2015
Division:
 
Purchases
 
Sales
Principal LifeTime 2050 Class 2 Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
28,700
 
$
166

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
—
 
 
—

 
 
 
 
 
 
 
Real Estate Securities Class 1 Division:
 
 
 
 
 
 
Premier Variable
 
$
140,970
 
$
122,769

Principal Freedom Variable Annuity 2
 
 
16,712
 
 
36,687

The Principal Variable Annuity
 
 
5,382,306
 
 
11,547,129

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
269,491

Principal Investment Plus Variable Annuity
 
 
10,192,104
 
 
8,292,652

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
1,398,115
 
 
2,923,710

 
 
 
 
 
 
 
Real Estate Securities Class 2 Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
836,760
 
$
119,122

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
960,356
 
 
111,060

 
 
 
 
 
 
 
Rydex Basic Materials Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
—
 
$
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
—
 
 
—

 
 
 
 
 
 
 
Rydex Commodities Strategy Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
26,612
 
$
61

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

Principal Investment Plus Variable Annuity
 
 
53,117
 
 
240

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
—
 
 
—

Principal Pivot Series Variable Annuity
 
 
4,324
 
 
1,229

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
4,409
 
 
154

 
 
 
 
 
 
 
Rydex NASDAQ 100 Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
181,203
 
$
5,909

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
430,475
 
 
44,335

 
 
 
 
 
 
 
SAM Balanced Portfolio Class 1 Division:
 
 
 
 
 
 
Premier Variable
 
$
186,985
 
$
46,365

Principal Freedom Variable Annuity 2
 
 
606,995
 
 
224,488

The Principal Variable Annuity
 
 
12,118,754
 
 
12,271,112

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
432,943

Principal Investment Plus Variable Annuity
 
 
90,289,583
 
 
96,405,945

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
6,765,380
 
 
18,373,003

 
 
 
 
 
 
 
SAM Balanced Portfolio Class 2 Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
2,884,350
 
$
1,181,074

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
2,057,096
 
 
257,068

 
 
 
 
 
 
 
SAM Conservative Balanced Portfolio Class 1 Division:
 
 
 
 
 
 
Principal Freedom Variable Annuity 2
 
$
97,240
 
$
279,111

The Principal Variable Annuity
 
 
4,015,720
 
 
3,408,888

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

Principal Investment Plus Variable Annuity
 
 
20,362,777
 
 
23,292,957

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
4,329,934
 
 
5,832,981

 
 
 
 
 
 
 
SAM Conservative Balanced Portfolio Class 2 Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
1,530,751
 
$
69,976

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
1,407,928
 
 
181,431


182


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
2015
Division:
 
Purchases
 
Sales
SAM Conservative Growth Portfolio Class 1 Division:
 
 
 
 
 
 
Principal Freedom Variable Annuity 2
 
$
217,574
 
$
222,126

The Principal Variable Annuity
 
 
3,655,823
 
 
3,133,855

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
154,522
 
 
223,089

Principal Investment Plus Variable Annuity
 
 
20,034,117
 
 
9,711,690

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
3,039,372
 
 
4,470,741

 
 
 
 
 
 
 
SAM Conservative Growth Portfolio Class 2 Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
4,777,530
 
$
185,552

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
1,213,092
 
 
125,668

 
 
 
 
 
 
 
SAM Flexible Income Portfolio Class 1 Division:
 
 
 
 
 
 
Principal Freedom Variable Annuity 2
 
$
246,362
 
$
82,906

The Principal Variable Annuity
 
 
5,265,373
 
 
7,235,686

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
77,176

Principal Investment Plus Variable Annuity
 
 
28,282,379
 
 
25,094,423

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
2,052,432
 
 
4,826,539

 
 
 
 
 
 
 
SAM Flexible Income Portfolio Class 2 Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
3,469,290
 
$
2,055,882

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
3,191,860
 
 
280,749

 
 
 
 
 
 
 
SAM Strategic Growth Portfolio Class 1 Division:
 
 
 
 
 
 
Principal Freedom Variable Annuity 2
 
$
90,452
 
$
23,761

The Principal Variable Annuity
 
 
1,282,571
 
 
1,511,000

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
10,639

Principal Investment Plus Variable Annuity
 
 
14,322,895
 
 
6,531,882

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
4,343,709
 
 
3,557,095

 
 
 
 
 
 
 
SAM Strategic Growth Portfolio Class 2 Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
1,570,995
 
$
698,303

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
406,660
 
 
47,918

 
 
 
 
 
 
 
Short-Term Income Class 1 Division:
 
 
 
 
 
 
Principal Freedom Variable Annuity
 
$
87,709
 
$
185,282

Principal Freedom Variable Annuity 2
 
 
2,271
 
 
14,910

The Principal Variable Annuity
 
 
2,420,637
 
 
4,678,138

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
423
 
 
36,001

Principal Investment Plus Variable Annuity
 
 
17,888,791
 
 
30,185,881

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
891,685
 
 
7,110,180

 
 
 
 
 
 
 
Short-Term Income Class 2 Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
801,139
 
$
477,843

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
394,819
 
 
16,190

 
 
 
 
 
 
 
SmallCap Blend Class 1 Division:
 
 
 
 
 
 
Premier Variable
 
$
503,727
 
$
39,476

Principal Freedom Variable Annuity
 
 
1,348,022
 
 
516,625

Principal Freedom Variable Annuity 2
 
 
268,885
 
 
17,543

The Principal Variable Annuity
 
 
51,241,424
 
 
9,546,888

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
69,187
 
 
109,068

Principal Investment Plus Variable Annuity
 
 
54,003,527
 
 
8,346,386

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
6,727,648
 
 
2,842,526

 
 
 
 
 
 
 

183


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
2015
Division:
 
Purchases
 
Sales
SmallCap Blend Class 2 Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
694,955
 
$
29,098

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
228,511
 
 
27,532

 
 
 
 
 
 
 
T. Rowe Price Blue Chip Growth Portfolio II Division:
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
$
6,090,806
 
$
3,014,821

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
872,081
 
 
967,859

 
 
 
 
 
 
 
T. Rowe Price Health Sciences Portfolio II Division:
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
$
14,392,317
 
$
8,869,755

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
1,768,177
 
 
2,994,812

 
 
 
 
 
 
 
Templeton Global Bond VIP Class 4 Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
33,326
 
$
319

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
—

Principal Investment Plus Variable Annuity
 
 
325,807
 
 
85,753

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
9,703
 
 
—

Principal Pivot Series Variable Annuity
 
 
363,691
 
 
14,316

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
473,689
 
 
9,908

 
 
 
 
 
 
 
Templeton Growth VIP Class 2 Division:
 
 
 
 
 
 
Principal Freedom Variable Annuity
 
$
76,905
 
$
78,224

 
 
 
 
 
 
 
The Merger Fund Division:
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
$
—
 
$
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
—
 
 
—

 
 
 
 
 
 
 
Van Eck Global Hard Assets Class S Division:
 
 
 
 
 
 
The Principal Variable Annuity
 
$
371,216
 
$
457,843

The Principal Variable Annuity with Purchase Payment Credit Rider
 
 
—
 
 
1,988

Principal Investment Plus Variable Annuity
 
 
1,439,783
 
 
1,133,938

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
 
388,898
 
 
325,390

Principal Pivot Series Variable Annuity
 
 
192,465
 
 
5,193

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
 
25,587
 
 
7,875



184


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

5. Changes in Units Outstanding

Transactions in units were as follows for each of the periods ended December 31:

 
 
2015
 
2014
Division:
 
Purchases
 
Redemptions
 
Purchases
 
Redemptions
AllianceBernstein Small Cap Growth Class A Division:
 
 
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
25,157

 
30,592

 
31,807

 
47,758

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
726

 
14,513

 
1,744

 
27,400

 
 
 
 
 
 
 
 
 
AllianceBernstein Small/Mid Cap Value Class A Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
7,750

 
6,811

 
11,477

 
7,185

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
—

 
—

Principal Investment Plus Variable Annuity
 
84,236

 
32,481

 
113,956

 
39,887

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
17,614

 
17,218

 
24,787

 
7,908

 
 
 
 
 
 
 
 
 
Alps/Red Rocks Listed Private Equity Class III Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
—

 
—

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
2,641

 
1

 
—

 
—

 
 
 
 
 
 
 
 
 
American Century VP Capital Appreciation Class I Division:
 
 
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
52,558

 
39,919

 
230,626

 
31,775

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
4,155

 
27,902

 
74,933

 
32,480

 
 
 
 
 
 
 
 
 
American Century VP Income & Growth Class I Division:
 
 
 
 
 
 
 
 
Principal Freedom Variable Annuity
 
4,682

 
22,734

 
9,549

 
29,998

Principal Freedom Variable Annuity 2
 
19

 
1,875

 
3,953

 
478

The Principal Variable Annuity
 
20,639

 
116,918

 
24,011

 
126,769

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
200

 
78

 
6,454

 
 
 
 
 
 
 
 
 
American Century VP Inflation Protection Class II Division:
 
 
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
656,289

 
1,272,897

 
933,410

 
1,508,391

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
21,156

 
328,008

 
77,157

 
687,048

Principal Pivot Series Variable Annuity
 
2,848

 
1,094

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
2,923

 
444

 
1,583

 
—

The Principal Variable Annuity
 
6,826

 
102

 
—

 
—

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
American Century VP MidCap Value Class II Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
16,836

 
34,501

 
33,670

 
30,094

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
20

 
4,345

Principal Investment Plus Variable Annuity
 
98,177

 
22,612

 
84,920

 
37,853

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
17,805

 
6,615

 
21,450

 
17,600

 
 
 
 
 
 
 
 
 
American Century VP Ultra Class I Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
34,950

 
48,954

 
14,519

 
58,530

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
1,874

 
—

 
4,420

 
 
 
 
 
 
 
 
 
American Century VP Ultra Class II Division:
 
 
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
228,575

 
622,696

 
369,714

 
804,296

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
10,768

 
184,165

 
37,632

 
381,737

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

185


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
2015
 
2014
Division:
 
Purchases
 
Redemptions
 
Purchases
 
Redemptions
American Century VP Value Class II Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
34,982

 
135,436

 
79,127

 
233,617

The Principal Variable Annuity with Purchase Payment Credit Rider
 
6

 
2,742

 
720

 
26,366

Principal Pivot Series Variable Annuity
 
9,845

 
63

 
2,093

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
22,039

 
638

 
1,385

 
—

 
 
 
 
 
 
 
 
 
American Funds Insurance Series Asset Allocation Fund Class 4 Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
26,797

 
18

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
56,390

 
4

 
—

 
—

 
 
 
 
 
 
 
 
 
American Funds Insurance Series Blue Chip Income & Growth Fund Class 4 Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
34,215

 
218

 
7,327

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
55,021

 
6,963

 
2,798

 
—

 
 
 
 
 
 
 
 
 
American Funds Insurance Series Global Small Capitalization Fund Class 2 Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
49,656

 
22,687

 
11,077

 
1,699

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
—

 
—

Principal Investment Plus Variable Annuity
 
55,101

 
627

 
—

 
—

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
348

 
348

 
—

 
—

 
 
 
 
 
 
 
 
 
American Funds Insurance Series Global Small Capitalization Fund Class 4 Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
5,907

 
808

 
798

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
8,112

 
338

 
—

 
—

 
 
 
 
 
 
 
 
 
American Funds Insurance Series High-Income Bond Class 2 Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
53,310

 
34,015

 
31,820

 
10,027

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
American Funds Insurance Series Managed Risk Asset Allocation Fund Class P2
    Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
5,033

 
3,126

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
4,543

 
23

 
—

 
—

 
 
 
 
 
 
 
 
 
American Funds Insurance Series Managed Risk Growth Fund Class P2 Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
4,779

 
157

 
3,056

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
7,692

 
108

 
—

 
—

 
 
 
 
 
 
 
 
 
American Funds Insurance Series Managed Risk International Fund Class P2 Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
1,227

 
18

 
1,897

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
1,223

 
13

 
—

 
—

 
 
 
 
 
 
 
 
 
American Funds Insurance Series New World Fund Class 2 Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
16,878

 
6,605

 
17,429

 
671

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
—

 
—

Principal Investment Plus Variable Annuity
 
25,578

 
2,524

 
—

 
—

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
243

 
243

 
—

 
—

 
 
 
 
 
 
 
 
 
American Funds Insurance Series New World Fund Class 4 Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
22,842

 
1,156

 
5,772

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
19,076

 
719

 
—

 
—



186


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
2015
 
2014
Division:
 
Purchases
 
Redemptions
 
Purchases
 
Redemptions
Balanced Class 1 Division:
 
 
 
 
 
 
 
 
Personal Variable
 
13,625

 
7,120

 
12,099

 
33,836

Premier Variable
 
196,903

 
406,436

 
143,248

 
178,933

The Principal Variable Annuity
 
16,707

 
158,034

 
41,599

 
177,907

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
1,791

 
204

 
8,329

 
 
 
 
 
 
 
 
 
BlackRock Global Allocation Class III Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
6,242

 
—

 
—

 
—

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
—

 
—

Principal Investment Plus Variable Annuity
 
43,154

 
463

 
—

 
—

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
918

 
—

 
—

 
—

Principal Pivot Series Variable Annuity
 
433

 
—

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
5,942

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
BlackRock iShares Alternative Strategies Class III Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
3,775

 
—

 
—

 
—

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
—

 
—

Principal Investment Plus Variable Annuity
 
17,440

 
9,046

 
—

 
—

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
1,204

 
—

 
—

 
—

Principal Pivot Series Variable Annuity
 
—

 
—

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
547

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
BlackRock iShares Dynamic Allocation Class III Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
—

 
—

 
—

 
—

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
—

 
—

Principal Investment Plus Variable Annuity
 
3,041

 
—

 
—

 
—

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
3,574

 
—

 
—

 
—

Principal Pivot Series Variable Annuity
 
—

 
—

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
BlackRock iShares Dynamic Fixed Income Class III Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
3,642

 
1,464

 
—

 
—

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
—

 
—

Principal Investment Plus Variable Annuity
 
9,302

 
111

 
—

 
—

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
—

 
—

 
—

 
—

Principal Pivot Series Variable Annuity
 
—

 
—

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
62

 
1

 
—

 
—

 
 
 
 
 
 
 
 
 
BlackRock iShares Equity Appreciation Class III Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
340

 
—

 
—

 
—

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
—

 
—

Principal Investment Plus Variable Annuity
 
7,494

 
—

 
—

 
—

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
4,388

 
—

 
—

 
—

Principal Pivot Series Variable Annuity
 
—

 
—

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
615

 
1

 
—

 
—

 
 
 
 
 
 
 
 
 
BlackRock Value Opportunities Class III Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
—

 
—

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
92

 
—

 
—

 
—


187


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
2015
 
2014
Division:
 
Purchases
 
Redemptions
 
Purchases
 
Redemptions
Bond & Mortgage Securities Class 1 Division:
 
 
 
 
 
 
 
 
Personal Variable
 
7,427

 
13,621

 
9,341

 
28,745

Premier Variable
 
221,577

 
497,154

 
137,940

 
199,154

Principal Freedom Variable Annuity
 
9,070

 
43,355

 
40,860

 
60,236

Principal Freedom Variable Annuity 2
 
684

 
3,004

 
6,715

 
9,954

The Principal Variable Annuity
 
108,015

 
519,965

 
317,975

 
675,917

The Principal Variable Annuity with Purchase Payment Credit Rider
 
109

 
9,782

 
3,827

 
70,872

Principal Investment Plus Variable Annuity
 
504,168

 
971,570

 
739,215

 
1,089,990

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
116,305

 
310,944

 
76,856

 
509,568

 
 
 
 
 
 
 
 
 
Bond & Mortgage Securities Class 2 Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
2,033

 
2,033

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
1,948

 
32

 
—

 
—

 
 
 
 
 
 
 
 
 
Calvert EAFE International Index Class F Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
407

 
2

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
678

 
4

 
593

 
—

 
 
 
 
 
 
 
 
 
Calvert Russell 2000 Small Cap Index Class F Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
6,875

 
301

 
1,208

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
2,034

 
127

 
841

 
—

 
 
 
 
 
 
 
 
 
Calvert S&P MidCap 400 Index Class F Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
26,045

 
945

 
2,456

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
25,351

 
4,951

 
1,038

 
—

 
 
 
 
 
 
 
 
 
ClearBridge Small Cap Growth Series II Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
—

 
—

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
903

 
1

 
—

 
—

 
 
 
 
 
 
 
 
 
Columbia Limited Duration Credit Class 2 Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
5,537

 
102

 
—

 
—

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
—

 
—

Principal Investment Plus Variable Annuity
 
7,429

 
135

 
—

 
—

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
828

 
—

 
—

 
—

Principal Pivot Series Variable Annuity
 
—

 
—

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
1,145

 
32

 
—

 
—

 
 
 
 
 
 
 
 
 
Columbia Small Cap Value Class 2 Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
105

 
—

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
8,265

 
107

 
—

 
—

 
 
 
 
 
 
 
 
 
Delaware Limited Term Diversified Income Service Class Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
6,957

 
—

 
—

 
—

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
—

 
—

Principal Investment Plus Variable Annuity
 
13,792

 
267

 
—

 
—

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
1,343

 
—

 
—

 
—

Principal Pivot Series Variable Annuity
 
—

 
—

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
1,172

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 

188


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
2015
 
2014
Division:
 
Purchases
 
Redemptions
 
Purchases
 
Redemptions
Delaware Small Cap Value Service Class Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
1,765

 
2,913

 
3,420

 
1,690

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
146

 
167

 
442

Principal Investment Plus Variable Annuity
 
38,351

 
18,345

 
59,953

 
26,516

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
11,633

 
784

 
5,614

 
585

 
 
 
 
 
 
 
 
 
Deutsche Alternative Asset Allocation Class B Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
—

 
—

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
4,534

 
81

 
—

 
—

 
 
 
 
 
 
 
 
 
Deutsche Equity 500 Index Class B2 Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
27,681

 
678

 
1,704

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
36,681

 
2,887

 
4,079

 
—

 
 
 
 
 
 
 
 
 
Deutsche Small Mid Cap Value Class B Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
2,233

 
2,013

 
2,295

 
17

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
—

 
—

Principal Investment Plus Variable Annuity
 
28,829

 
7,958

 
32,430

 
1,124

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
1,540

 
233

 
6,467

 
699

Principal Pivot Series Variable Annuity
 
1,746

 
25

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
9,409

 
267

 
—

 
—

 
 
 
 
 
 
 
 
 
Diversified Balanced Class 2 Division:
 
 
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
9,494,507

 
7,370,267

 
13,176,718

 
6,333,753

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
912,151

 
538,171

 
1,583,756

 
1,023,838

Principal Lifetime Income Solutions
 
17,579

 
172,601

 
82,089

 
142,995

Principal Pivot Series Variable Annuity
 
—

 
—

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
Diversified Balanced Managed Volatility Class 2 Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
731

 
—

 
—

 
—

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
—

 
—

Principal Investment Plus Variable Annuity
 
6,185,575

 
2,050,668

 
6,414,941

 
342,414

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
355,288

 
113,851

 
442,869

 
50,954

Principal Lifetime Income Solutions
 
1,059,621

 
217,166

 
1,466,513

 
52,000

Principal Pivot Series Variable Annuity
 
16,562

 
53

 
743

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
30,037

 
6,216

 
—

 
—

 
 
 
 
 
 
 
 
 
Diversified Growth Class 2 Division:
 
 
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
37,780,731

 
14,609,692

 
44,630,770

 
11,290,992

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
2,032,888

 
1,308,702

 
3,514,870

 
1,115,165

Principal Lifetime Income Solutions
 
47,710

 
149,441

 
91,547

 
189,499

Principal Pivot Series Variable Annuity
 
—

 
—

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 

189


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
2015
 
2014
Division:
 
Purchases
 
Redemptions
 
Purchases
 
Redemptions
Diversified Growth Managed Volatility Class 2 Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
—

 
—

 
—

 
—

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
—

 
—

Principal Investment Plus Variable Annuity
 
10,403,220

 
2,194,361

 
11,620,242

 
619,952

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
941,925

 
114,271

 
1,158,656

 
181,215

Principal Lifetime Income Solutions
 
853,835

 
128,843

 
1,880,856

 
55,399

Principal Pivot Series Variable Annuity
 
27,434

 
195

 
2,641

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
3,014

 
100

 
—

 
—

 
 
 
 
 
 
 
 
 
Diversified Income Class 2 Division:
 
 
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
6,696,554

 
3,914,718

 
7,244,955

 
3,165,366

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
297,469

 
296,616

 
251,987

 
176,002

Principal Lifetime Income Solutions
 
72,265

 
75,702

 
192,860

 
73,862

 
 
 
 
 
 
 
 
 
Diversified International Class 1 Division:
 
 
 
 
 
 
 
 
Personal Variable
 
10,729

 
22,894

 
11,312

 
30,733

Premier Variable
 
278,980

 
434,646

 
71,509

 
200,863

Principal Freedom Variable Annuity
 
13,165

 
18,186

 
3,984

 
20,971

Principal Freedom Variable Annuity 2
 
1,427

 
8,477

 
6,771

 
11,591

The Principal Variable Annuity
 
156,441

 
517,331

 
242,883

 
754,308

The Principal Variable Annuity with Purchase Payment Credit Rider
 
57

 
11,894

 
3,670

 
59,705

Principal Investment Plus Variable Annuity
 
306,188

 
366,496

 
363,166

 
367,243

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
22,203

 
152,333

 
42,960

 
224,750

 
 
 
 
 
 
 
 
 
Diversified International Class 2 Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
12,529

 
1,496

 
2,773

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
10,056

 
1,013

 
—

 
—

 
 
 
 
 
 
 
 
 
Dreyfus IP MidCap Stock Service Shares Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
2,124

 
—

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
2,703

 
113

 
—

 
—

 
 
 
 
 
 
 
 
 
Dreyfus Investment Portfolio Technology Growth Service Shares Division:
 
 
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
78,140

 
32,869

 
71,968

 
63,463

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
7,799

 
13,211

 
20,753

 
20,037

 
 
 
 
 
 
 
 
 
Equity Income Class 1 Division:
 
 
 
 
 
 
 
 
Premier Variable
 
47,744

 
42,235

 
39,296

 
50,758

The Principal Variable Annuity
 
148,701

 
630,153

 
283,778

 
944,386

The Principal Variable Annuity with Purchase Payment Credit Rider
 
8

 
11,205

 
3,025

 
59,782

Principal Investment Plus Variable Annuity
 
1,567,799

 
2,907,996

 
1,822,346

 
4,054,169

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
85,971

 
952,740

 
150,929

 
1,786,979

 
 
 
 
 
 
 
 
 
Equity Income Class 2 Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
41,604

 
2,049

 
5,846

 
1

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
59,634

 
3,147

 
2,088

 
—

 
 
 
 
 
 
 
 
 
Fidelity VIP Contrafund Service Class Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
66,755

 
295,937

 
110,980

 
439,435

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
9,213

 
1,325

 
20,363


190


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
2015
 
2014
Division:
 
Purchases
 
Redemptions
 
Purchases
 
Redemptions
Fidelity VIP Contrafund Service Class 2 Division:
 
 
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
366,992

 
481,110

 
389,788

 
511,310

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
34,020

 
143,358

 
33,117

 
201,867

Principal Pivot Series Variable Annuity
 
55,974

 
3,509

 
9,899

 
1

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
68,592

 
7,592

 
2,595

 
—

 
 
 
 
 
 
 
 
 
Fidelity VIP Equity-Income Service Class 2 Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
55,428

 
249,363

 
70,388

 
297,369

The Principal Variable Annuity with Purchase Payment Credit Rider
 
8

 
8,914

 
2,059

 
23,779

Principal Investment Plus Variable Annuity
 
105,690

 
111,332

 
113,925

 
110,826

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
10,889

 
42,810

 
19,150

 
55,455

 
 
 
 
 
 
 
 
 
Fidelity VIP Growth Service Class Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
52,037

 
169,961

 
53,615

 
257,201

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
1,958

 
33

 
6,949

 
 
 
 
 
 
 
 
 
Fidelity VIP Growth Service Class 2 Division:
 
 
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
123,289

 
82,826

 
148,377

 
100,317

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
20,090

 
61,182

 
34,838

 
68,836

 
 
 
 
 
 
 
 
 
Fidelity VIP Mid Cap Service Class Division:
 
 
 
 
 
 
 
 
Principal Freedom Variable Annuity 2
 
—

 
—

 
6,676

 
—

 
 
 
 
 
 
 
 
 
Fidelity VIP Mid Cap Service Class 2 Division:
 
 
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
144,998

 
94,522

 
180,264

 
101,276

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
19,842

 
27,794

 
18,885

 
29,418

Principal Pivot Series Variable Annuity
 
50,751

 
5,673

 
14,188

 
1

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
39,687

 
5,341

 
1,364

 
—

 
 
 
 
 
 
 
 
 
Fidelity VIP Overseas Service Class 2 Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
19,243

 
9,862

 
—

 
—

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
—

 
—

Principal Investment Plus Variable Annuity
 
335,832

 
575,353

 
543,810

 
539,423

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
14,631

 
224,493

 
64,570

 
306,860

Principal Pivot Series Variable Annuity
 
6,375

 
323

 
155

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
6,476

 
499

 
295

 
—

 
 
 
 
 
 
 
 
 
Franklin Global Real Estate VIP Class 2 Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
6,577

 
3,038

 
—

 
—

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
—

 
—

Principal Investment Plus Variable Annuity
 
6,372

 
231

 
—

 
—

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
537

 
—

 
—

 
—

Principal Pivot Series Variable Annuity
 
19,101

 
573

 
1,516

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
17,554

 
1,950

 
2,418

 
—

 
 
 
 
 
 
 
 
 
Franklin Rising Dividends VIP Class 4 Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
16,314

 
524

 
989

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
27,287

 
2,131

 
5,916

 
—

 
 
 
 
 
 
 
 
 

191


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
2015
 
2014
Division:
 
Purchases
 
Redemptions
 
Purchases
 
Redemptions
Franklin Small Cap Value VIP Class 2 Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
6,006

 
4,167

 
9,921

 
8,029

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
315

 
353

 
107

Principal Investment Plus Variable Annuity
 
25,632

 
34,621

 
53,173

 
46,097

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
11,377

 
4,431

 
8,437

 
11,652

 
 
 
 
 
 
 
 
 
Goldman Sachs VIT Mid Cap Value Institutional Shares Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
5,064

 
2,999

 
5,805

 
1,608

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
—

 
—

Principal Investment Plus Variable Annuity
 
114,397

 
139,669

 
205,487

 
172,073

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
9,491

 
67,432

 
19,336

 
129,616

 
 
 
 
 
 
 
 
 
Goldman Sachs VIT Mid Cap Value Service Shares Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
14,781

 
1,261

 
976

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
37,079

 
1,024

 
728

 
—

 
 
 
 
 
 
 
 
 
Goldman Sachs VIT Multi-Strategy Alternatives Portfolio Service Shares Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
—

 
—

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
1,306

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
Goldman Sachs VIT Small Cap Equity Insights Institutional Shares Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
6,449

 
6,813

 
136

 
289

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
—

 
—

Principal Investment Plus Variable Annuity
 
47,942

 
65,122

 
74,699

 
47,951

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
1,513

 
15,255

 
5,683

 
66,801

 
 
 
 
 
 
 
 
 
Goldman Sachs VIT Small Cap Equity Insights Service Shares Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
4,655

 
362

 
488

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
5,709

 
7

 
—

 
—

 
 
 
 
 
 
 
 
 
Government & High Quality Bond Class 1 Division:
 
 
 
 
 
 
 
 
Pension Builder Plus
 
—

 
5,128

 
—

 
12,053

Pension Builder Plus – Rollover IRA
 
—

 
38

 
—

 
39

Personal Variable
 
6,792

 
19,822

 
6,702

 
10,668

Premier Variable
 
486,722

 
610,326

 
143,540

 
208,680

Principal Freedom Variable Annuity
 
15,848

 
26,355

 
34,200

 
67,835

Principal Freedom Variable Annuity 2
 
432

 
3,338

 
4,662

 
9,544

The Principal Variable Annuity
 
273,217

 
1,028,584

 
571,823

 
1,585,012

The Principal Variable Annuity with Purchase Payment Credit Rider
 
30

 
15,037

 
6,529

 
109,802

Principal Investment Plus Variable Annuity
 
584,541

 
1,146,774

 
805,260

 
1,265,587

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
38,280

 
239,437

 
118,933

 
520,569

 
 
 
 
 
 
 
 
 
Government & High Quality Bond Class 2 Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
83,509

 
4,280

 
1,173

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
20,100

 
1,712

 
796

 
—

 
 
 
 
 
 
 
 
 

192


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
2015
 
2014
Division:
 
Purchases
 
Redemptions
 
Purchases
 
Redemptions
Guggenheim Floating Rate Strategies Series F Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
20,139

 
1,855

 
—

 
—

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
—

 
—

Principal Investment Plus Variable Annuity
 
59,429

 
8,077

 
—

 
—

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
12,346

 
10,348

 
—

 
—

Principal Pivot Series Variable Annuity
 
6,561

 
3,806

 
226

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
5,574

 
378

 
1,074

 
—

 
 
 
 
 
 
 
 
 
Guggenheim Investments Global Managed Futures Strategy Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
862

 
862

 
—

 
—

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
—

 
—

Principal Investment Plus Variable Annuity
 
487

 
6

 
—

 
—

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
—

 
—

 
—

 
—

Principal Pivot Series Variable Annuity
 
6,475

 
208

 
1,984

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
2,368

 
154

 
—

 
—

 
 
 
 
 
 
 
 
 
Guggenheim Investments Long Short Equity Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
5,945

 
—

 
—

 
—

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
—

 
—

Principal Investment Plus Variable Annuity
 
2,336

 
—

 
—

 
—

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
331

 
—

 
—

 
—

Principal Pivot Series Variable Annuity
 
631

 
629

 
3,580

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
5,313

 
580

 
524

 
—

 
 
 
 
 
 
 
 
 
Guggenheim Investments Multi-Hedge Strategies Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
1,618

 
1,087

 
—

 
—

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
—

 
—

Principal Investment Plus Variable Annuity
 
2,070

 
53

 
—

 
—

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
—

 
—

 
—

 
—

Principal Pivot Series Variable Annuity
 
574

 
311

 
409

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
5,055

 
34

 
358

 
—

 
 
 
 
 
 
 
 
 
Guggenheim Macro Opportunities Series M Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
8,198

 
—

 
—

 
—

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
—

 
—

Principal Investment Plus Variable Annuity
 
2,961

 
—

 
—

 
—

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
540

 
—

 
—

 
—

Principal Pivot Series Variable Annuity
 
5,398

 
66

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
5,367

 
9

 
—

 
—

 
 
 
 
 
 
 
 
 
Income Class 1 Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
7,516

 
106

 
—

 
—

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
—

 
—

Principal Investment Plus Variable Annuity
 
52,288

 
1,338

 
—

 
—

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
1,615

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
Income Class 2 Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
1,099

 
1,099

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
1,783

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 



193


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
2015
 
2014
Division:
 
Purchases
 
Redemptions
 
Purchases
 
Redemptions
International Emerging Markets Class 1 Division:
 
 
 
 
 
 
 
 
Premier Variable
 
17,999

 
11,836

 
14,755

 
18,267

The Principal Variable Annuity
 
75,652

 
159,354

 
112,574

 
247,367

The Principal Variable Annuity with Purchase Payment Credit Rider
 
25

 
8,006

 
3,264

 
30,267

Principal Investment Plus Variable Annuity
 
228,920

 
211,714

 
237,683

 
215,155

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
17,065

 
96,747

 
28,257

 
114,896

 
 
 
 
 
 
 
 
 
International Emerging Markets Class 2 Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
—

 
—

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
4,257

 
1

 
—

 
—

 
 
 
 
 
 
 
 
 
Invesco American Franchise Series I Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
20,333

 
46,476

 
16,164

 
78,933

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
1,235

 
14

 
1,180

 
 
 
 
 
 
 
 
 
Invesco Balanced-Risk Allocation Series II Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
2,510

 
20

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
17,668

 
26

 
—

 
—

 
 
 
 
 
 
 
 
 
Invesco Core Equity Series I Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
49,263

 
197,601

 
80,693

 
316,964

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
667

 
80

 
859

 
 
 
 
 
 
 
 
 
Invesco Global Health Care Series I Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
97,008

 
118,446

 
80,899

 
139,007

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
3,007

 
893

 
8,206

 
 
 
 
 
 
 
 
 
Invesco Global Health Care Series II Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
24,982

 
1,823

 
6,479

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
57,993

 
10,476

 
427

 
—

 
 
 
 
 
 
 
 
 
Invesco International Growth Series I Division:
 
 
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
187,755

 
170,789

 
302,882

 
170,032

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
20,123

 
25,486

 
42,048

 
23,662

 
 
 
 
 
 
 
 
 
Invesco International Growth Series II Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
22,651

 
994

 
2,766

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
21,853

 
437

 
588

 
—

 
 
 
 
 
 
 
 
 
Invesco Mid Cap Growth Series I Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
31,706

 
25,264

 
17,369

 
28,294

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
3,502

 
112

 
5,456

 
 
 
 
 
 
 
 
 
Invesco Small Cap Equity Series I Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
16,236

 
33,481

 
11,239

 
61,481

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
993

 
2

 
1,774

Principal Investment Plus Variable Annuity
 
37,768

 
46,185

 
53,854

 
52,241

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
7,867

 
17,320

 
12,454

 
23,278

 
 
 
 
 
 
 
 
 
Invesco Technology Series I Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
39,034

 
90,954

 
92,795

 
82,330

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
2,544

 
274

 
9,495

 
 
 
 
 
 
 
 
 

194


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
2015
 
2014
Division:
 
Purchases
 
Redemptions
 
Purchases
 
Redemptions
Invesco Value Opportunities Series I Division:
 
 
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
54,836

 
60,434

 
38,007

 
57,523

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
9,942

 
26,185

 
6,060

 
28,076

 
 
 
 
 
 
 
 
 
Janus Aspen Enterprise Service Shares Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
30,129

 
87,883

 
22,438

 
121,380

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
4,610

 
598

 
3,156

 
 
 
 
 
 
 
 
 
Janus Aspen Flexible Bond Service Shares Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
26,635

 
652

 
2,408

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
48,154

 
1,012

 
4,825

 
—

 
 
 
 
 
 
 
 
 
LargeCap Growth Class 1 Division:
 
 
 
 
 
 
 
 
Personal Variable
 
19,212

 
21,586

 
23,452

 
46,918

Premier Variable
 
803,054

 
965,194

 
933,973

 
1,047,935

The Principal Variable Annuity
 
29,166

 
141,736

 
36,529

 
198,939

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
2,602

 
381

 
5,289

Principal Investment Plus Variable Annuity
 
61,301

 
96,908

 
66,664

 
108,499

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
7,158

 
34,244

 
10,828

 
43,567

 
 
 
 
 
 
 
 
 
LargeCap Growth Class 2 Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
26,869

 
4,827

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
19,771

 
129

 
591

 
—

 
 
 
 
 
 
 
 
 
LargeCap Growth I Class 1 Division:
 
 
 
 
 
 
 
 
Premier Variable
 
50,233

 
636

 
20,383

 
44,086

Principal Freedom Variable Annuity
 
7,964

 
6,016

 
2,907

 
18,504

Principal Freedom Variable Annuity 2
 
—

 
1,338

 
3,918

 
615

The Principal Variable Annuity
 
38,031

 
213,177

 
61,644

 
293,976

The Principal Variable Annuity with Purchase Payment Credit Rider
 
40

 
2,018

 
452

 
9,400

Principal Investment Plus Variable Annuity
 
55,301

 
49,494

 
66,683

 
44,835

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
3,694

 
16,340

 
7,886

 
32,892

 
 
 
 
 
 
 
 
 
LargeCap Growth I Class 2 Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
37,961

 
—

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
11,182

 
4

 
—

 
—

 
 
 
 
 
 
 
 
 
LargeCap S&P 500 Index Class 1 Division:
 
 
 
 
 
 
 
 
Premier Variable
 
99,436

 
25,693

 
78,341

 
103,055

Principal Freedom Variable Annuity
 
4,135

 
56,356

 
13,646

 
64,426

Principal Freedom Variable Annuity 2
 
207

 
3,079

 
12,557

 
15,731

The Principal Variable Annuity
 
135,539

 
543,461

 
195,145

 
710,188

The Principal Variable Annuity with Purchase Payment Credit Rider
 
131

 
10,926

 
490

 
27,123

Principal Investment Plus Variable Annuity
 
567,611

 
606,694

 
561,507

 
475,443

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
52,920

 
169,544

 
69,822

 
237,196

 
 
 
 
 
 
 
 
 
LargeCap S&P 500 Index Class 2 Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
3,292

 
1

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
12,553

 
190

 
—

 
—


195


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
2015
 
2014
Division:
 
Purchases
 
Redemptions
 
Purchases
 
Redemptions
LargeCap Value Class 1 Division:
 
 
 
 
 
 
 
 
Bankers Flexible Annuity
 
—

 
264

 
—

 
3,653

Pension Builder Plus
 
—

 
13,155

 
50

 
15,269

Pension Builder Plus – Rollover IRA
 
—

 
3,049

 
—

 
9,806

Personal Variable
 
5,748

 
4,146

 
7,142

 
25,816

Premier Variable
 
172,805

 
415,958

 
72,897

 
242,157

Principal Freedom Variable Annuity
 
4,200

 
13,563

 
13,770

 
46,330

Principal Freedom Variable Annuity 2
 
3,594

 
1,393

 
11

 
1,753

The Principal Variable Annuity
 
31,000

 
204,380

 
47,045

 
282,621

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
790

 
295

 
9,483

Principal Investment Plus Variable Annuity
 
78,092

 
94,938

 
117,046

 
112,256

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
8,630

 
41,391

 
14,712

 
63,052

 
 
 
 
 
 
 
 
 
LargeCap Value Class 2 Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
—

 
—

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
1,084

 
1

 
—

 
—

 
 
 
 
 
 
 
 
 
MFS VIT International Value Service Class Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
42,764

 
732

 
—

 
—

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
—

 
—

Principal Investment Plus Variable Annuity
 
66,113

 
6,522

 
—

 
—

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
4,588

 
367

 
—

 
—

Principal Pivot Series Variable Annuity
 
25,590

 
1,411

 
5,858

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
28,147

 
4,309

 
354

 
—

 
 
 
 
 
 
 
 
 
MFS VIT New Discovery Service Class Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
32,054

 
10,128

 
19,365

 
17,556

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
539

 
581

 
454

Principal Investment Plus Variable Annuity
 
29,354

 
19,933

 
43,307

 
8,570

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
432

 
378

 
3,681

 
3,425

Principal Pivot Series Variable Annuity
 
—

 
—

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
2,407

 
108

 
—

 
—

 
 
 
 
 
 
 
 
 
MFS VIT Utilities Service Class Division:
 
 
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
122,134

 
95,192

 
224,837

 
126,283

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
11,636

 
36,358

 
52,088

 
40,907

Principal Pivot Series Variable Annuity
 
19,468

 
3,234

 
11,274

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
66,242

 
8,846

 
3,748

 
—

 
 
 
 
 
 
 
 
 
MFS VIT Value Service Class Division:
 
 
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
42,013

 
33,338

 
63,970

 
47,445

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
7,253

 
10,561

 
5,752

 
6,147

 
 
 
 
 
 
 
 
 

196


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
2015
 
2014
Division:
 
Purchases
 
Redemptions
 
Purchases
 
Redemptions
MidCap Class 1 Division:
 
 
 
 
 
 
 
 
Personal Variable
 
6,106

 
12,477

 
9,089

 
28,270

Premier Variable
 
167,449

 
291,062

 
43,072

 
141,811

Principal Freedom Variable Annuity
 
2,806

 
18,262

 
3,420

 
31,278

Principal Freedom Variable Annuity 2
 
2,145

 
1,509

 
5,029

 
8,615

The Principal Variable Annuity
 
71,681

 
370,527

 
106,360

 
540,716

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
8,406

 
2,020

 
29,262

Principal Investment Plus Variable Annuity
 
167,760

 
361,944

 
205,013

 
421,152

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
9,416

 
112,232

 
12,849

 
183,362

 
 
 
 
 
 
 
 
 
Money Market Class 1 Division:
 
 
 
 
 
 
 
 
Pension Builder Plus
 
—

 
7,700

 
—

 
657

Pension Builder Plus – Rollover IRA
 
—

 
—

 
—

 
—

Personal Variable
 
60,668

 
41,098

 
50,198

 
39,295

Premier Variable
 
2,707,080

 
2,995,908

 
2,793,612

 
2,260,325

Principal Freedom Variable Annuity
 
4,141

 
29,641

 
4,029

 
50,339

Principal Freedom Variable Annuity 2
 
2,421

 
1,207

 
290

 
4,280

The Principal Variable Annuity
 
565,733

 
893,130

 
755,485

 
1,096,247

The Principal Variable Annuity with Purchase Payment Credit Rider
 
15,812

 
18,295

 
(2,698)

 
48,870

Principal Investment Plus Variable Annuity
 
3,017,296

 
2,996,136

 
2,713,589

 
2,951,076

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
545,654

 
560,123

 
468,706

 
597,179

Principal Lifetime Income Solutions
 
—

 
9,295

 
23,121

 
13,826

 
 
 
 
 
 
 
 
 
Money Market Class 2 Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
169,779

 
151,276

 
29,505

 
7,703

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
586,275

 
486,096

 
—

 
—

 
 
 
 
 
 
 
 
 
Neuberger Berman AMT Large Cap Value I Class Division:
 
 
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
31,057

 
47,441

 
52,753

 
53,559

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
574

 
15,696

 
3,183

 
38,382

 
 
 
 
 
 
 
 
 
Neuberger Berman AMT Mid-Cap Growth Portfolio S Class Division:
 
 
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
266,732

 
6,726

 
—

 
—

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
27,133

 
5,418

 
—

 
—

Principal Pivot Series Variable Annuity
 
3,057

 
1,188

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
2,877

 
1

 
—

 
—

 
 
 
 
 
 
 
 
 
Neuberger Berman AMT Socially Responsive I Class Division:
 
 
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
36,017

 
60,788

 
51,342

 
120,597

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
1,356

 
20,387

 
6,346

 
33,917

 
 
 
 
 
 
 
 
 
Oppenheimer Main Street Small Cap Service Shares Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
16,684

 
20,682

 
36,352

 
17,036

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
140

 
197

 
473

 
 
 
 
 
 
 
 
 
PIMCO All Asset Administrative Class Division:
 
 
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
37,934

 
68,857

 
105,927

 
69,340

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
3,552

 
16,416

 
4,820

 
20,839

 
 
 
 
 
 
 
 
 
PIMCO All Asset Advisor Class Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
623

 
623

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 

197


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
2015
 
2014
Division:
 
Purchases
 
Redemptions
 
Purchases
 
Redemptions
PIMCO Commodity Real Return Strategy M Class Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
361

 
—

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
1,377

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
PIMCO High Yield Administrative Class Division:
 
 
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
237,417

 
242,802

 
311,483

 
194,141

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
14,468

 
55,392

 
42,682

 
49,837

Principal Pivot Series Variable Annuity
 
34,398

 
567

 
197

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
47,438

 
4,648

 
1,823

 
—

 
 
 
 
 
 
 
 
 
PIMCO Low Duration Advisor Class Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
268

 
101

 
—

 
—

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
—

 
—

Principal Investment Plus Variable Annuity
 
33,935

 
46

 
—

 
—

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
468

 
468

 
—

 
—

Principal Pivot Series Variable Annuity
 
1,148

 
—

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
1,335

 
9

 
—

 
—

 
 
 
 
 
 
 
 
 
PIMCO Total Return Administrative Class Division:
 
 
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
267,536

 
402,644

 
467,065

 
653,099

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
17,794

 
69,753

 
66,119

 
109,151

Principal Pivot Series Variable Annuity
 
26,083

 
305

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
25,132

 
1,474

 
3,500

 
—

 
 
 
 
 
 
 
 
 
Principal Capital Appreciation Class 1 Division:
 
 
 
 
 
 
 
 
Principal Freedom Variable Annuity 2
 
—

 
231

 
—

 
202

The Principal Variable Annuity
 
4,133,710

 
468,203

 
—

 
—

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
—

 
—

Principal Investment Plus Variable Annuity
 
4,547,487

 
891,554

 
188,783

 
188,602

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
497,358

 
296,531

 
37,512

 
45,447

 
 
 
 
 
 
 
 
 
Principal Capital Appreciation Class 2 Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
12,615

 
2,001

 
18,647

 
1

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
33,406

 
1,753

 
—

 
—

 
 
 
 
 
 
 
 
 
Principal LifeTime Strategic Income Class 1 Division:
 
 
 
 
 
 
 
 
Principal Freedom Variable Annuity 2
 
—

 
47,874

 
—

 
5,534

The Principal Variable Annuity
 
18,939

 
85,663

 
30,044

 
45,858

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
3,678

 
3,678

 
43

Principal Investment Plus Variable Annuity
 
86,253

 
232,187

 
120,737

 
283,587

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
1,726

 
48,062

 
20,781

 
88,353

 
 
 
 
 
 
 
 
 
Principal LifeTime 2010 Class 1 Division:
 
 
 
 
 
 
 
 
Principal Freedom Variable Annuity 2
 
180

 
28,771

 
485

 
63,731

The Principal Variable Annuity
 
5,860

 
24,966

 
11,531

 
15,259

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
—

 
41

Principal Investment Plus Variable Annuity
 
136,296

 
349,184

 
193,043

 
306,577

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
11,823

 
49,220

 
14,913

 
142,138

 
 
 
 
 
 
 
 
 



198


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
2015
 
2014
Division:
 
Purchases
 
Redemptions
 
Purchases
 
Redemptions
Principal LifeTime 2020 Class 1 Division:
 
 
 
 
 
 
 
 
Principal Freedom Variable Annuity 2
 
6,548

 
26,773

 
8,309

 
24,697

The Principal Variable Annuity
 
11,042

 
42,948

 
22,058

 
104,753

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
—

 
39

Principal Investment Plus Variable Annuity
 
781,583

 
1,555,686

 
955,654

 
2,228,842

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
33,436

 
607,497

 
45,724

 
1,102,279

 
 
 
 
 
 
 
 
 
Principal LifeTime 2020 Class 2 Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
—

 
—

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
1,656

 
2

 
—

 
—

 
 
 
 
 
 
 
 
 
Principal LifeTime 2030 Class 1 Division:
 
 
 
 
 
 
 
 
Principal Freedom Variable Annuity 2
 
349

 
26,597

 
26,520

 
35,684

The Principal Variable Annuity
 
23,426

 
27,675

 
12,875

 
25,020

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
—

 
40

Principal Investment Plus Variable Annuity
 
389,686

 
433,395

 
215,217

 
298,170

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
23,897

 
117,152

 
39,815

 
72,247

 
 
 
 
 
 
 
 
 
Principal LifeTime 2030 Class 2 Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
53

 
—

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
1,809

 
105

 
—

 
—

 
 
 
 
 
 
 
 
 
Principal LifeTime 2040 Class 1 Division:
 
 
 
 
 
 
 
 
Principal Freedom Variable Annuity 2
 
340

 
5,188

 
892

 
630

The Principal Variable Annuity
 
17,646

 
2,860

 
13,635

 
7,199

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
—

 
39

Principal Investment Plus Variable Annuity
 
62,244

 
82,168

 
152,495

 
77,089

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
6,295

 
24,925

 
12,204

 
48,529

 
 
 
 
 
 
 
 
 
Principal LifeTime 2040 Class 2 Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
53

 
—

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
Principal LifeTime 2050 Class 1 Division:
 
 
 
 
 
 
 
 
Principal Freedom Variable Annuity 2
 
—

 
—

 
71

 
2,537

The Principal Variable Annuity
 
450

 
6,677

 
1,766

 
18,833

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
—

 
859

Principal Investment Plus Variable Annuity
 
128,410

 
72,910

 
73,861

 
41,245

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
2,396

 
24,069

 
5,803

 
26,779

 
 
 
 
 
 
 
 
 
Principal LifeTime 2050 Class 2 Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
2,735

 
—

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
Real Estate Securities Class 1 Division:
 
 
 
 
 
 
 
 
Premier Variable
 
25,484

 
24,229

 
41,489

 
21,416

Principal Freedom Variable Annuity 2
 
403

 
1,853

 
3,722

 
4,816

The Principal Variable Annuity
 
63,123

 
209,269

 
100,687

 
223,712

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
4,884

 
1,240

 
21,133

Principal Investment Plus Variable Annuity
 
165,065

 
154,093

 
181,581

 
153,534

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
22,643

 
54,328

 
40,022

 
62,774

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

199


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
2015
 
2014
Division:
 
Purchases
 
Redemptions
 
Purchases
 
Redemptions
Real Estate Securities Class 2 Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
70,612

 
9,987

 
14,613

 
1

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
81,042

 
9,311

 
1,275

 
—

 
 
 
 
 
 
 
 
 
Rydex Basic Materials Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
—

 
—

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
Rydex Commodities Strategy Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
3,445

 
—

 
—

 
—

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
—

 
—

Principal Investment Plus Variable Annuity
 
6,475

 
—

 
—

 
—

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
—

 
—

 
—

 
—

Principal Pivot Series Variable Annuity
 
715

 
176

 
962

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
729

 
22

 
645

 
—

 
 
 
 
 
 
 
 
 
Rydex NASDAQ 100 Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
15,954

 
528

 
9,463

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
37,901

 
3,962

 
—

 
—

 
 
 
 
 
 
 
 
 
SAM Balanced Portfolio Class 1 Division:
 
 
 
 
 
 
 
 
Premier Variable
 
79,716

 
21,550

 
96,495

 
112,375

Principal Freedom Variable Annuity 2
 
28,642

 
14,131

 
14,989

 
23,820

The Principal Variable Annuity
 
395,823

 
817,568

 
504,346

 
921,128

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
28,845

 
8,776

 
102,422

Principal Investment Plus Variable Annuity
 
2,439,123

 
6,402,911

 
2,124,034

 
9,622,213

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
182,763

 
1,220,264

 
363,384

 
1,612,112

 
 
 
 
 
 
 
 
 
SAM Balanced Portfolio Class 2 Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
267,622

 
113,523

 
54,571

 
2

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
190,866

 
24,709

 
8,597

 
—

 
 
 
 
 
 
 
 
 
SAM Conservative Balanced Portfolio Class 1 Division:
 
 
 
 
 
 
 
 
Principal Freedom Variable Annuity 2
 
6

 
18,501

 
365

 
23,916

The Principal Variable Annuity
 
188,290

 
228,842

 
218,060

 
305,326

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
—

 
27,522

Principal Investment Plus Variable Annuity
 
811,810

 
1,571,495

 
1,233,331

 
2,250,567

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
172,623

 
393,531

 
227,008

 
347,807

 
 
 
 
 
 
 
 
 
SAM Conservative Balanced Portfolio Class 2 Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
142,416

 
6,328

 
24,371

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
130,989

 
16,407

 
30,751

 
2

 
 
 
 
 
 
 
 
 
SAM Conservative Growth Portfolio Class 1 Division:
 
 
 
 
 
 
 
 
Principal Freedom Variable Annuity 2
 
5,531

 
14,592

 
9,398

 
1,575

The Principal Variable Annuity
 
175,951

 
213,986

 
147,622

 
244,524

The Principal Variable Annuity with Purchase Payment Credit Rider
 
7,437

 
15,233

 
203

 
26,752

Principal Investment Plus Variable Annuity
 
980,464

 
649,537

 
1,079,221

 
491,083

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
148,746

 
299,012

 
196,964

 
169,169

 
 
 
 
 
 
 
 
 



200


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
2015
 
2014
Division:
 
Purchases
 
Redemptions
 
Purchases
 
Redemptions
SAM Conservative Growth Portfolio Class 2 Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
436,837

 
16,109
 
44,683

 
2,796

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
110,920

 
10,910
 
924

 
—

 
 
 
 
 
 
 
 
 
SAM Flexible Income Portfolio Class 1 Division:
 
 
 
 
 
 
 
 
Principal Freedom Variable Annuity 2
 
10,096

 
4,648
 
881

 
37,816

The Principal Variable Annuity
 
234,373

 
488,748
 
545,432

 
576,852

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
5,213
 
2,652

 
54,528

Principal Investment Plus Variable Annuity
 
1,460,756

 
1,698,660
 
1,539,032

 
1,757,754

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
106,006

 
326,712
 
138,645

 
440,493

 
 
 
 
 
 
 
 
 
SAM Flexible Income Portfolio Class 2 Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
333,199

 
200,163
 
2,034

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
306,554

 
27,334
 
39,690

 
1

 
 
 
 
 
 
 
 
 
SAM Strategic Growth Portfolio Class 1 Division:
 
 
 
 
 
 
 
 
Principal Freedom Variable Annuity 2
 
—

 
1,040
 
1,737

 
14,277

The Principal Variable Annuity
 
30,708

 
102,402
 
41,999

 
176,823

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
721
 
—

 
2,390

Principal Investment Plus Variable Annuity
 
742,229

 
440,904
 
657,215

 
253,966

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
225,096

 
240,105
 
273,867

 
214,514

 
 
 
 
 
 
 
 
 
SAM Strategic Growth Portfolio Class 2 Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
142,153

 
67,444
 
63,135

 
2,782

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
36,797

 
4,628
 
1,514

 
—

 
 
 
 
 
 
 
 
 
Short-Term Income Class 1 Division:
 
 
 
 
 
 
 
 
Principal Freedom Variable Annuity
 
4,057

 
14,420
 
16,758

 
41,521

Principal Freedom Variable Annuity 2
 
39

 
1,204
 
208

 
1,034

The Principal Variable Annuity
 
165,988

 
381,773
 
366,408

 
647,792

The Principal Variable Annuity with Purchase Payment Credit Rider
 
29

 
2,938
 
1,483

 
47,054

Principal Investment Plus Variable Annuity
 
1,335,934

 
2,523,047
 
2,174,462

 
2,910,705

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
66,591

 
594,295
 
154,153

 
992,944

 
 
 
 
 
 
 
 
 
Short-Term Income Class 2 Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
78,588

 
47,077
 
1,445

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
38,730

 
1,595
 
7,919

 
1

 
 
 
 
 
 
 
 
 
SmallCap Blend Class 1 Division:
 
 
 
 
 
 
 
 
Premier Variable
 
396,841

 
201,098
 
35,154

 
23,062

Principal Freedom Variable Annuity
 
42,485

 
17,349
 
4,050

 
16,455

Principal Freedom Variable Annuity 2
 
14,645

 
908
 
2,320

 
4,941

The Principal Variable Annuity
 
2,228,528

 
409,647
 
74,942

 
291,929

The Principal Variable Annuity with Purchase Payment Credit Rider
 
3,009

 
4,680
 
1,624

 
15,549

Principal Investment Plus Variable Annuity
 
2,419,963

 
375,559
 
139,739

 
15,014

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
301,474

 
127,904
 
17,013

 
7,535

 
 
 
 
 
 
 
 
 
SmallCap Blend Class 2 Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
68,595

 
2,658
 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
22,555

 
2,515
 
—

 
—


201


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
2015
 
2014
Division:
 
Purchases
 
Redemptions
 
Purchases
 
Redemptions
 
 
 
 
 
 
 
 
 
T. Rowe Price Blue Chip Growth Portfolio II Division:
 
 
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
261,608

 
124,937

 
124,080

 
113,695

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
37,457

 
40,109

 
44,408

 
39,545

 
 
 
 
 
 
 
 
 
T. Rowe Price Health Sciences Portfolio II Division:
 
 
 
 
 
 
 
 
Principal Investment Plus Variable Annuity
 
240,103

 
171,933

 
233,425

 
158,823

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
29,498

 
58,052

 
66,692

 
87,079

 
 
 
 
 
 
 
 
 
Templeton Global Bond VIP Class 4 Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
3,394

 
17

 
—

 
—

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
—

 
—

 
—

Principal Investment Plus Variable Annuity
 
34,015

 
9,058

 
—

 
—

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
1,013

 
—

 
—

 
—

Principal Pivot Series Variable Annuity
 
35,444

 
1,114

 
1,520

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
46,164

 
771

 
5,412

 
—

 
 
 
 
 
 
 
 
 
Templeton Growth VIP Class 2 Division:
 
 
 
 
 
 
 
 
Principal Freedom Variable Annuity
 
2,385

 
3,455

 
2,480

 
5,891

 
 
 
 
 
 
 
 
 
The Merger Fund Division:
 
 
 
 
 
 
 
 
Principal Pivot Series Variable Annuity
 
—

 
—

 
—

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
Van Eck Global Hard Assets Class S Division:
 
 
 
 
 
 
 
 
The Principal Variable Annuity
 
33,413

 
38,684

 
45,291

 
72,470

The Principal Variable Annuity with Purchase Payment Credit Rider
 
—

 
168

 
48

 
1,160

Principal Investment Plus Variable Annuity
 
137,504

 
98,416

 
141,497

 
121,470

Principal Investment Plus Variable Annuity with Premium Payment Credit Rider
 
37,141

 
28,241

 
19,249

 
17,965

Principal Pivot Series Variable Annuity
 
28,794

 
604

 
12,646

 
—

Principal Pivot Series Variable Annuity with Liquidity Max Rider
 
3,828

 
916

 
1,679

 
—



202


Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

6. Financial Highlights

Principal Life sells a number of variable life insurance products, which have unique combinations of features and fees that are charged against the contractholder’s account balance. Differences in the fee structures results in a variety of unit values, expense ratios, and total returns.

The Separate Account has presented the following disclosures for 2015, 2014, 2013, 2012, and 2011 in accordance with the AICPA Audit and Accounting Guide for Investment Companies. The following table was developed by determining which products issued by Principal Life have the lowest and highest total return. Only product designs within each division that had units outstanding during the respective periods were considered when determining the lowest and highest total return. The summary may not reflect the minimum and maximum contract charges offered by Principal Life as the contractholder may not have selected all available and applicable contract options as discussed in Note 2.

 
 
 
 
 
 
 
 
 
For the Year Ended December 31,
 
 
 
December 31
Except as Noted
 
 
 
 
 
Unit Fair Value
 
 
 
 
 
 
 
Total Return (3)
 
 
 
 
 
Corresponding
 
 
 
 
 
Expense
 
Corresponding
 
 
 
 
 
to Lowest
 
Net
 
Investment
 
Ratio (2)
 
to Lowest
 
 
 
Units
 
to Highest
 
Assets
 
Income
 
Lowest to
 
to Highest
 
Division
 
(000's)
 
Expense Ratio
 
(000's)
 
Ratio (1)
 
Highest
 
Expense Ratio
AllianceBernstein Small Cap
  Growth Class A Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
175
 
$25.10 to $23.45
 

$4,350

 
–%

 
1.40% to 2.00%
 
(2.64)% to (3.18)%
 
2014
 
194
 
$25.78 to $24.22
 

$4,945

 
–%

 
1.40% to 2.00%
 
(3.16)% to (3.77)%
 
2013
 
236
 
$26.62 to $25.17
 

$6,183

 
–%

 
1.40% to 2.00%
 
43.74% to 42.93%
 
2012
 
227
 
$18.52 to $17.61
 

$4,148

 
–%

 
1.25% to 1.85%
 
13.62% to 12.88%
 
2011
 
261
 
$16.30 to $15.60
 

$4,184

 
–%

 
1.25% to 1.85%
 
3.16% to 2.56%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AllianceBernstein Small/Mid
  Cap Value Class A Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
243
 
$11.44 to $11.23
 

$2,766

 
0.82
%
 
1.30% to 2.00%
 
(6.69)% to (7.34)%
 
2014
 
190
 
$12.26 to $12.12
 

$2,320

 
0.76
%
 
1.30% to 2.00%
 
7.83% to 7.07%
 
2013 (6)
 
95
 
$11.37 to $11.32
 

$1,075

 
0.35
%
 
1.30% to 2.00%
 
13.25% to 12.75%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Alps/Red Rocks Listed Private
   Equity Class III Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015 (12)
 
3
 
$8.98 to $8.97
 

$24

 
0.22
%
 
1.15% to 1.40%
 
(10.02)% to (10.12)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Century VP Capital
   Appreciation Class I Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
230
 
$10.85 to $10.74
 

$2,496

 
–%

 
1.40% to 2.00%
 
0.46% to (0.09)%
 
2014 (8)
 
241
 
$10.80 to $10.75
 

$2,604

 
–%

 
1.40% to 2.00%
 
9.87% to 9.36%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Century VP Income &
  Growth Class I Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
699
 
$17.24 to $14.94
 

$11,548

 
2.10
%
 
0.85% to 1.90%
 
(6.41)% to (7.43)%
 
2014
 
816
 
$18.42 to $16.14
 

$14,436

 
2.03
%
 
0.85% to 1.90%
 
11.50% to 10.40%
 
2013
 
942
 
$16.52 to $14.62
 

$14,985

 
2.19
%
 
0.85% to 1.90%
 
34.75% to 33.27%
 
2012
 
1,079
 
$12.26 to $10.97
 

$12,745

 
2.07
%
 
0.85% to 1.85%
 
13.73% to 12.63%
 
2011
 
1,298
 
$10.78 to $9.74
 

$13,458

 
1.53
%
 
0.85% to 1.85%
 
2.28% to 1.25%
 
 
 
 
 
 
 
 
 
 
 
 
 
 

203



Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
 
 
 
 
 
 
 
For the Year Ended December 31,
 
 
 
December 31
Except as Noted
 
 
 
 
 
Unit Fair Value
 
 
 
 
 
 
 
Total Return (3)
 
 
 
 
 
Corresponding
 
 
 
 
 
Expense
 
Corresponding
 
 
 
 
 
to Lowest
 
Net
 
Investment
 
Ratio (2)
 
to Lowest
 
 
 
Units
 
to Highest
 
Assets
 
Income
 
Lowest to
 
to Highest
 
Division
 
(000's)
 
Expense Ratio
 
(000's)
 
Ratio (1)
 
Highest
 
Expense Ratio
American Century VP Inflation
  Protection Class II Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
4,091
 
$9.58 to $11.78
 

$51,380

 
2.04
%
 
1.15% to 2.00%
 
(3.62)% to (4.38)%
 
2014
 
5,003
 
$9.94 to $12.32
 

$65,192

 
1.26
%
 
1.15% to 2.00%
 
(1.09)% to (1.23)%
 
2013
 
6,186
 
$12.87 to $12.17
 

$78,840

 
1.62
%
 
1.40% to 2.00%
 
(9.68)% to (10.18)%
 
2012
 
6,324
 
$14.25 to $13.55
 

$89,160

 
2.43
%
 
1.25% to 1.85%
 
6.03% to 5.37%
 
2011
 
6,219
 
$13.44 to $12.86
 

$82,771

 
4.11
%
 
1.25% to 1.85%
 
10.44% to 9.73%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Century VP MidCap
  Value Class II Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
349
 
$18.61 to $17.95
 

$6,444

 
1.48
%
 
1.30% to 2.00%
 
(2.82)% to (3.49)%
 
2014
 
280
 
$19.15 to $18.60
 

$5,329

 
1.02
%
 
1.30% to 2.00%
 
14.74% to 13.90%
 
2013
 
229
 
$16.69 to $16.33
 

$3,815

 
1.05
%
 
1.30% to 2.00%
 
28.29% to 27.48%
 
2012
 
200
 
$13.01 to $12.81
 

$2,592

 
1.87
%
 
1.25% to 1.85%
 
14.73% to 14.07%
 
2011
 
157
 
$11.34 to $11.23
 

$1,776

 
1.30
%
 
1.25% to 1.85%
 
(2.07)% to (2.69)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Century VP Ultra
  Class I Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
220
 
$16.46 to $15.08
 

$3,618

 
0.45
%
 
1.30% to 1.90%
 
4.91% to 4.29%
 
2014
 
236
 
$15.69 to $14.46
 

$3,696

 
0.39
%
 
1.30% to 1.90%
 
8.58% to 7.91%
 
2013
 
284
 
$14.45 to $13.40
 

$4,100

 
0.56
%
 
1.30% to 1.90%
 
35.30% to 34.54%
 
2012
 
350
 
$10.68 to $9.96
 

$3,716

 
–%

 
1.25% to 1.85%
 
12.54% to 11.78%
 
2011
 
426
 
$9.49 to $8.91
 

$3,993

 
–%

 
1.25% to 1.85%
 
(0.21)% to (0.78)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Century VP Ultra
  Class II Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
1,882
 
$19.29 to $18.02
 

$36,158

 
0.32
%
 
1.40% to 2.00%
 
4.55% to 3.92%
 
2014
 
2,449
 
$18.45 to $17.34
 

$44,865

 
0.24
%
 
1.40% to 2.00%
 
8.27% to 7.70%
 
2013
 
3,228
 
$17.04 to $16.10
 

$54,398

 
0.43
%
 
1.40% to 2.00%
 
35.13% to 34.28%
 
2012
 
4,445
 
$12.61 to $11.99
 

$55,372

 
–%

 
1.25% to 1.85%
 
12.39% to 11.74%
 
2011
 
5,075
 
$11.22 to $10.73
 

$56,336

 
–%

 
1.25% to 1.85%
 
(0.36)% to (1.01)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Century VP Value
  Class II Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
787
 
$9.63 to $18.56
 

$15,478

 
1.99
%
 
1.15% to 1.90%
 
(5.12)% to (5.79)%
 
2014
 
859
 
$10.15 to $19.70
 

$18,211

 
1.39
%
 
1.15% to 1.90%
 
(0.39)% to 10.74%
 
2013
 
1,035
 
$19.07 to $17.79
 

$19,713

 
1.49
%
 
1.30% to 1.90%
 
29.82% to 29.10%
 
2012
 
1,294
 
$14.69 to $13.78
 

$18,873

 
1.75
%
 
1.25% to 1.85%
 
13.09% to 12.40%
 
2011
 
1,634
 
$12.99 to $12.26
 

$20,924

 
1.86
%
 
1.25% to 1.85%
 
(0.38)% to (0.97)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 

204



Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
 
 
 
 
 
 
 
For the Year Ended December 31,
 
 
 
December 31
Except as Noted
 
 
 
 
 
Unit Fair Value
 
 
 
 
 
 
 
Total Return (3)
 
 
 
 
 
Corresponding
 
 
 
 
 
Expense
 
Corresponding
 
 
 
 
 
to Lowest
 
Net
 
Investment
 
Ratio (2)
 
to Lowest
 
 
 
Units
 
to Highest
 
Assets
 
Income
 
Lowest to
 
to Highest
 
Division
 
(000's)
 
Expense Ratio
 
(000's)
 
Ratio (1)
 
Highest
 
Expense Ratio
American Funds Insurance
   Series Asset Allocation Fund
   Class 4 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015 (12)
 
83
 
$9.71 to $9.69

 

$806

 
7.44
%
 
1.15% to 1.40%
 
(2.90)% to (3.10)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Funds Insurance Series
   Blue Chip Income & Growth
   Fund Class 4 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
92
 
$9.79 to $9.75

 

$900

 
2.51
%
 
1.15% to 1.40%
 
(4.30)% to (4.60)%
 
2014 (10)
 
10
 
$10.23 to $10.22

 

$104

 
6.39
%
 
1.15% to 1.40%
 
(1.54)% to (1.64)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Funds Insurance Series
   Global Small Capitalization
   Fund Class 2 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
91
 
$10.13 to $8.71

 

$844

 
–%

 
1.30% to 2.00%
 
(0.98)% to (13.42)%
 
2014 (9)
 
9
 
$10.23 to $10.20

 

$96

 
0.28
%
 
1.30% to 1.90%
 
1.39% to 1.09%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Funds Insurance Series
   Global Small Capitalization
   Fund Class 4 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
14
 
$9.75 to $9.71

 

$133

 
–%

 
1.15% to 1.40%
 
(1.12)% to (1.42)%
 
2014 (10)
 
1
 
$9.86 to $9.85

 

$8

 
0.15
%
 
1.15% to 1.40%
 
0.20% to 0.10%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Funds Insurance Series
   High-Income Bond Class 2
   Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
41
 
$8.87 to $8.78

 

$364

 
6.87
%
 
1.30% to 1.90%
 
(8.46)% to (9.02)%
 
2014 (9)
 
22
 
$9.69 to $9.65

 

$211

 
10.12
%
 
1.30% to 1.90%
 
(3.20)% to (3.60)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Funds Insurance Series
   Managed Risk Asset Allocation
   Fund Class P2 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
6
 
$9.69 to $9.66

 

$62

 
1.57
%
 
1.15% to 1.40%
 
(2.22)% to (2.42)%
 
2014 (10)
 
–
 
$9.91 to 9.90

 
$–

 
–%

 
1.15% to 1.40%
 
(1.10)% to (1.20)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Funds Insurance Series
   Managed Risk Growth Fund
   Class P2 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
15
 
$9.74 to $9.71

 

$148

 
–%

 
1.15% to 1.40%
 
(0.41)% to (0.72)%
 
2014 (10)
 
3
 

$9.78

 

$30

 
–%

 
1.15% to 1.40%
 
(1.61)% to (1.51)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 

205



Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
 
 
 
 
 
 
 
For the Year Ended December 31,
 
 
 
December 31
Except as Noted
 
 
 
 
 
Unit Fair Value
 
 
 
 
 
 
 
Total Return (3)
 
 
 
 
 
Corresponding
 
 
 
 
 
Expense
 
Corresponding
 
 
 
 
 
to Lowest
 
Net
 
Investment
 
Ratio (2)
 
to Lowest
 
 
 
Units
 
to Highest
 
Assets
 
Income
 
Lowest to
 
to Highest
 
Division
 
(000's)
 
Expense Ratio
 
(000's)
 
Ratio (1)
 
Highest
 
Expense Ratio
American Funds Insurance Series
   Managed Risk International
   Fund Class P2 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
4
 
$8.72 to $8.69

 

$38

 
0.02
%
 
1.15% to 1.40%
 
(7.53)% to (7.85)%

 
2014 (10)
 
2
 

$9.43

 

$18

 
–%

 
1.15% to 1.40%
 
(3.87
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Funds Insurance Series
   New World Fund Class 2
   Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
50
 
$8.69 to $8.89

 

$441

 
0.67
%
 
1.30% to 2.00%
 
(4.40)% to (10.83)%

 
2014 (9)
 
17
 
$9.09 to $9.06

 

$152

 
2.00
%
 
1.30% to 1.90%
 
(9.55)% to (9.85)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Funds Insurance Series
   New World Fund Class 4
   Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
46
 
$8.60 to $8.57

 

$394

 
0.63
%
 
1.15% to 1.40%
 
(4.44)% to (4.78)%

 
2014 (10)
 
6
 

$9.00

 

$52

 
7.63
%
 
1.15% to 1.40%
 
(7.22)% to (7.12)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balanced Class 1 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
1,821
 
$3.30 to $25.81

 

$29,965

 
1.77
%
 
0.48% to 1.90%
 
0.00% to (1.49)%

 
2014
 
2,167
 
$3.30 to $26.20

 

$34,954

 
1.72
%
 
0.42% to 1.90%
 
8.36% to 6.76%

 
2013
 
2,369
 
$3.05 to $24.54

 

$36,507

 
1.78
%
 
0.42% to 1.90%
 
18.98% to 17.30%

 
2012
 
2,633
 
$2.46 to $20.92

 

$35,867

 
2.04
%
 
0.42% to 1.85%
 
12.33% to 10.92%

 
2011
 
2,890
 
$2.27 to $18.86

 

$36,779

 
2.30
%
 
0.43% to 1.85%
 
3.62% to 2.17%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
BlackRock Global Allocation
   Class III Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015 (12)
 
56
 
$9.30 to $9.25

 

$522

 
1.85
%
 
1.15% to 2.00%
 
(7.00)% to (7.50)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
BlackRock iShares Alternative
   Strategies Class III Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015 (12)
 
14
 
$9.29 to $9.24

 

$129

 
8.05
%
 
1.15% to 2.00%
 
(6.82)% to (7.32)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
BlackRock iShares Dynamic
   Allocation Class III Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015 (12)
 
7
 
$9.15 to $9.10

 

$60

 
6.90
%
 
1.15% to 2.00%
 
(8.32)% to (8.82)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
BlackRock iShares Dynamic
   Fixed Income Class III
   Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015 (12)
 
11
 
$9.70 to $9.65

 

$111

 
5.79
%
 
1.15% to 2.00%
 
(2.71)% to (3.21)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 

206



Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
 
 
 
 
 
 
 
For the Year Ended December 31,
 
 
 
December 31
Except as Noted
 
 
 
 
 
Unit Fair Value
 
 
 
 
 
 
 
Total Return (3)
 
 
 
 
 
Corresponding
 
 
 
 
 
Expense
 
Corresponding
 
 
 
 
 
to Lowest
 
Net
 
Investment
 
Ratio (2)
 
to Lowest
 
 
 
Units
 
to Highest
 
Assets
 
Income
 
Lowest to
 
to Highest
 
Division
 
(000's)
 
Expense Ratio
 
(000's)
 
Ratio (1)
 
Highest
 
Expense Ratio
BlackRock iShares Equity
   Appreciation Class III
   Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015 (12)
 
13
 
$8.67 to $8.62

 

$111

 
6.14
%
 
1.15% to 2.00%
 
(13.21)% to (13.71)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
BlackRock Value Opportunities
   Class III Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015 (12)
 
–
 
$9.00 to $8.99

 

$1

 
0.94
%
 
1.15% to 1.40%
 
(10.89)% to (10.99)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Bond & Mortgage Securities
  Class 1 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
7,246
 
$2.81 to $21.29

 

$151,328

 
3.09
%
 
0.43% to 2.00%
 
(0.90)% to (2.47)%

 
2014
 
8,648
 
$2.83 to $21.83

 

$180,940

 
3.11
%
 
0.44% to 2.00%
 
4.79% to 3.17%

 
2013
 
9,961
 
$2.70 to $21.16

 

$201,686

 
3.30
%
 
0.40% to 2.00%
 
(1.27)% to (2.76)%

 
2012
 
11,477
 
$2.63 to $21.76

 

$236,260

 
3.77
%
 
0.41% to 1.85%
 
6.86% to 5.58%

 
2011
 
12,019
 
$2.56 to $20.61

 

$235,718

 
0.10
%
 
0.40% to 1.85%
 
6.63% to 5.10%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Bond & Mortgage Securities
  Class 2 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015 (12)
 
2
 
$9.73 to $9.72

 

$19

 
6.38
%
 
1.15% to 1.40%
 
(2.31)% to (2.41)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Calvert EAFE International
   Index Class F Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2
 
$8.98 to $8.95

 

$15

 
0.04
%
 
1.15% to 1.40%
 
(2.92)% to (3.24)%

 
2014 (10)
 
1
 

$9.25

 

$5

 
26.28
%
 
1.15% to 1.40%
 
(4.05)% to (3.95)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Calvert Russell 2000 Small
   Cap Index Class F
   Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
11
 
$9.80 to $9.77

 

$103

 
–%

 
1.15% to 1.40%
 
(6.49)% to (6.69)%

 
2014 (10)
 
2
 
$10.48 to $10.47

 

$21

 
2.65
%
 
1.15% to 1.40%
 
1.45% to 1.36%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Calvert S&P MidCap 400
   Index Class F Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
49
 
$9.82 to $9.79

 

$480

 
–%

 
1.15% to 1.40%
 
(4.01)% to (4.21)%

 
2014 (10)
 
3
 
$10.23 to $10.22

 

$36

 
5.13
%
 
1.15% to 1.40%
 
(0.10
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ClearBridge Small Cap
   Growth Series II Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015 (12)
 
1
 
$9.48 to $9.47

 

$9

 
–%

 
1.15% to 1.40%
 
(6.51)% to (6.61)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Columbia Limited Duration
   Credit Class 2 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015 (12)
 
15
 
$9.58 to $9.52

 

$140

 
–%

 
1.15% to 2.00%
 
(4.20)% to (4.80)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 

207



Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
 
 
 
 
 
 
 
For the Year Ended December 31,
 
 
 
December 31
Except as Noted
 
 
 
 
 
Unit Fair Value
 
 
 
 
 
 
 
Total Return (3)
 
 
 
 
 
Corresponding
 
 
 
 
 
Expense
 
Corresponding
 
 
 
 
 
to Lowest
 
Net
 
Investment
 
Ratio (2)
 
to Lowest
 
 
 
Units
 
to Highest
 
Assets
 
Income
 
Lowest to
 
to Highest
 
Division
 
(000's)
 
Expense Ratio
 
(000's)
 
Ratio (1)
 
Highest
 
Expense Ratio
Columbia Small Cap Value
   Class 2 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015 (12)
 
8
 
$9.10 to $9.09

 

$75

 
0.73
%
 
1.15% to 1.40%
 
(9.90)% to (9.91)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Delaware Limited Term
   Diversified Income Service
   Class Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015 (12)
 
23
 
$9.88 to $9.82

 

$227

 
1.11
%
 
1.15% to 2.00%
 
(1.00)% to (1.60)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Delaware Small Cap Value
   Service Class Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
93
 
$10.97 to $10.77

 

$1,009

 
0.42
%
 
1.30% to 2.00%
 
(7.66)% to (8.34)%

 
2014
 
63
 
$11.88 to $11.75

 

$746

 
0.29
%
 
1.30% to 2.00%
 
4.21% to 3.52%

 
2013 (6)
 
23
 
$11.40 to $11.35

 

$262

 
–%

 
1.30% to 2.00%
 
13.66% to 13.16%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deutsche Alternative Asset
   Allocation Class B
   Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015 (13)
 
4
 
$9.08 to $9.05

 

$40

 
–%

 
1.15% to 1.40%
 
(7.63)% to (7.84)%

 
2014 (10)
 
–
 
$9.83 to $9.82

 
$–

 
–%

 
1.15% to 1.40%
 
(1.60)% to (1.70)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deutsche Equity 500 Index
   Class B2 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015 (14)
 
67
 
$10.21 to $10.18

 

$678

 
1.24
%
 
1.15% to 1.40%
 
(0.39)% to (0.59)%

 
2014 (10)
 
6
 
$10.25 to $10.24

 

$59

 
–%

 
1.15% to 1.40%
 
(0.49
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deutsche Small Mid Cap
   Value Class B Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015 (15)
 
85
 
$9.75 to $11.20

 

$953

 
–%

 
1.15% to 2.00%
 
(3.37)% to (4.11)%

 
2014
 
52
 
$10.09 to $11.68

 

$615

 
0.40
%
 
1.15% to 2.00%
 
(0.69)% to 3.00%

 
2013 (6)
 
13
 
$11.39 to $11.34

 

$146

 
–%

 
1.30% to 2.00%
 
13.56% to 13.06%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diversified Balanced Class 2
   Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
73,477
 
$14.07 to $13.57

 

$1,030,997

 
1.00
%
 
1.40% to 2.00%
 
(1.26)% to (1.88)%

 
2014
 
71,134
 
$14.25 to $13.83

 

$1,011,135

 
0.89
%
 
1.40% to 2.00%
 
5.95% to 5.33%

 
2013
 
63,792
 
$13.45 to $13.13

 

$856,504

 
0.33
%
 
1.40% to 2.00%
 
11.43% to 10.80%

 
2012
 
48,279
 
$12.07 to $11.85

 

$581,720

 
0.96
%
 
1.25% to 1.85%
 
8.35% to 7.73%

 
2011
 
29,822
 
$11.14 to $11.00

 

$331,823

 
0.96
%
 
1.25% to 1.85%
 
(0.71)% to 1.66%

 
 
 
 
 
 
 
 
 
 
 
 
 
 

208



Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
 
 
 
 
 
 
 
For the Year Ended December 31,
 
 
 
December 31
Except as Noted
 
 
 
 
 
Unit Fair Value
 
 
 
 
 
 
 
Total Return (3)
 
 
 
 
 
Corresponding
 
 
 
 
 
Expense
 
Corresponding
 
 
 
 
 
to Lowest
 
Net
 
Investment
 
Ratio (2)
 
to Lowest
 
 
 
Units
 
to Highest
 
Assets
 
Income
 
Lowest to
 
to Highest
 
Division
 
(000's)
 
Expense Ratio
 
(000's)
 
Ratio (1)
 
Highest
 
Expense Ratio
Diversified Balanced
   Managed Volatility
   Class 2 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
13,227
 
$10.05 to $10.34
 

$138,378

 
0.84
%
 
1.15% to 2.00%
 
(1.08)% to (1.90)%

 
2014
 
7,967
 
$10.16 to $10.54
 

$84,544

 
0.01
%
 
1.15% to 2.00%
 
(0.20)% to 4.77%

 
2013 (7)
 
87
 
$10.07 to $10.06
 

$877

 
–%

 
1.40% to 2.00%
 
0.90% to 0.80%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diversified Growth Class 2
   Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
213,718
 
$15.02 to $14.49
 

$3,202,277

 
1.03
%
 
1.40% to 2.00%
 
(1.18)% to (1.83)%

 
2014
 
189,924
 
$15.20 to $14.76
 

$2,881,637

 
0.96
%
 
1.40% to 2.00%
 
6.29% to 5.73%

 
2013
 
154,283
 
$14.30 to $13.96
 

$2,202,298

 
0.45
%
 
1.40% to 2.00%
 
16.45% to 15.75%

 
2012
 
99,357
 
$12.28 to $12.06
 

$1,218,656

 
0.85
%
 
1.25% to 1.85%
 
10.23% to 9.54%

 
2011
 
67,150
 
$11.14 to $11.01
 

$747,474

 
0.75
%
 
1.25% to 1.85%
 
(2.45)% to 0.36%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diversified Growth
   Managed Volatility
   Class 2 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
23,991
 
$10.03 to $10.41
 

$252,642

 
1.04
%
 
1.15% to 2.00%
 
(1.08)% to (1.89)%

 
2014
 
14,199
 
$10.14 to $10.61
 

$151,625

 
0.02
%
 
1.15% to 2.00%
 
(0.39)% to 4.95%

 
2013 (7)
 
393
 
$10.12 to $10.11
 

$3,979

 
–%

 
1.40% to 2.00%
 
1.40% to 1.30%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diversified Income Class 2
   Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
17,071
 
$11.66 to $11.41
 

$198,791

 
0.78
%
 
1.40% to 2.00%
 
(1.19)% to (1.81)%

 
2014
 
14,292
 
$11.80 to $11.62
 

$168,519

 
0.56
%
 
1.40% to 2.00%
 
5.36% to 4.78%

 
2013
 
10,017
 
$11.20 to $11.09
 

$112,081

 
0.11
%
 
1.40% to 2.00%
 
6.77% to 6.12%

 
2012 (5)
 
5,225
 
$10.49 to $10.45
 

$54,791

 
–%

 
1.25% to 1.85%
 
4.38% to 3.98%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diversified International
   Class 1 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
5,938
 
$3.17 to $24.34
 

$136,019

 
2.51
%
 
0.44% to 2.00%
 
(0.77)% to (2.33)%

 
2014
 
6,681
 
$3.20 to $24.92
 

$154,009

 
2.17
%
 
0.42% to 2.00%
 
(3.62)% to (5.14)%

 
2013
 
7,605
 
$3.32 to $26.27
 

$183,015

 
2.83
%
 
0.42% to 2.00%
 
17.90% to 16.55%

 
2012
 
8,812
 
$2.70 to $22.54
 

$182,349

 
2.10
%
 
0.38% to 1.85%
 
17.68% to 16.25%

 
2011
 
10,327
 
$2.39 to $19.39
 

$182,722

 
0.44
%
 
0.44% to 1.85%
 
(10.58)% to (12.54)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diversified International
   Class 2 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
23
 
$9.21 to $9.18
 

$210

 
3.16
%
 
1.15% to 1.40%
 
(1.81)% to (2.03)%

 
2014 (10)
 
3
 
$9.38 to $9.37
 

$26

 
–%

 
1.15% to 1.40%
 
(3.89)% to (4.00)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dreyfus IP MidCap Stock
   Service Shares Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015 (12)
 
5
 
$9.27 to $9.26
 

$44

 
–%

 
1.15% to 1.40%
 
(8.13)% to (8.23)%


209



Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
 
 
 
 
 
 
 
For the Year Ended December 31,
 
 
 
December 31
Except as Noted
 
 
 
 
 
Unit Fair Value
 
 
 
 
 
 
 
Total Return (3)
 
 
 
 
 
Corresponding
 
 
 
 
 
Expense
 
Corresponding
 
 
 
 
 
to Lowest
 
Net
 
Investment
 
Ratio (2)
 
to Lowest
 
 
 
Units
 
to Highest
 
Assets
 
Income
 
Lowest to
 
to Highest
 
Division
 
(000's)
 
Expense Ratio
 
(000's)
 
Ratio (1)
 
Highest
 
Expense Ratio
Dreyfus Investment
   Portfolio Technology
   Growth Service
   Shares Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
266
 
$23.55 to $21.99
 

$6,205

 
–%

 
1.40% to 2.00%
 
4.43% to 3.78%

 
2014
 
226
 
$22.55 to $21.19
 

$5,041

 
–%

 
1.40% to 2.00%
 
5.13% to 4.49%

 
2013
 
217
 
$21.45 to $20.28
 

$4,605

 
–%

 
1.40% to 2.00%
 
30.71% to 30.00%

 
2012
 
203
 
$16.41 to $15.60
 

$3,300

 
–%

 
1.25% to 1.85%
 
13.96% to 13.21%

 
2011
 
191
 
$14.40 to $13.78
 

$2,726

 
–%

 
1.25% to 1.85%
 
(9.21)% to (9.70)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity Income Class 1
   Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
14,715
 
$1.88 to $13.42
 

$207,674

 
2.43
%
 
0.55% to 2.00%
 
(4.33)% to (5.82)%

 
2014
 
17,409
 
$1.97 to $14.25
 

$258,967

 
2.35
%
 
0.27% to 2.00%
 
12.33% to 10.55%

 
2013
 
22,006
 
$1.75 to $12.89
 

$293,600

 
3.07
%
 
0.33% to 2.00%
 
26.77% to 24.90%

 
2012
 
26,639
 
$1.38 to $10.32
 

$282,998

 
3.01
%
 
0.38% to 1.85%
 
12.54% to 10.97%

 
2011
 
30,579
 
$1.23 to $9.30
 

$291,224

 
0.55
%
 
0.54% to 1.85%
 
5.00% to 3.45%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity Income Class 2
   Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
104
 
$9.69 to $9.66
 

$1,006

 
3.12
%
 
1.15% to 1.40%
 
(5.28)% to (5.48)%

 
2014 (10)
 
8
 
$10.23 to $10.22
 

$81

 
–%

 
1.15% to 1.40%
 
(0.97
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fidelity VIP Contrafund
  Service Class Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
1,786
 
$23.61 to $21.57
 

$42,171

 
0.90
%
 
1.30% to 1.90%
 
(0.76)% to (1.33)%

 
2014
 
2,024
 
$23.79 to $21.86
 

$48,140

 
0.82
%
 
1.30% to 1.90%
 
10.39% to 9.74%

 
2013
 
2,372
 
$21.55 to $19.92
 

$51,076

 
0.93
%
 
1.30% to 1.90%
 
29.43% to 28.68%

 
2012
 
2,843
 
$16.65 to $15.48
 

$47,183

 
1.16
%
 
1.25% to 1.85%
 
14.91% to 14.16%

 
2011
 
3,527
 
$14.49 to $13.56
 

$50,818

 
0.85
%
 
1.25% to 1.85%
 
(3.85)% to (4.37)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fidelity VIP Contrafund
  Service Class 2 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2,325
 
$10.09 to $21.16
 

$50,809

 
0.80
%
 
1.15% to 2.00%
 
(0.79)% to (1.58)%

 
2014
 
2,435
 
$10.17 to $21.50
 

$55,142

 
0.72
%
 
1.15% to 2.00%
 
(0.78)% to 9.47%

 
2013
 
2,712
 
$20.78 to $19.64
 

$55,840

 
0.81
%
 
1.40% to 2.00%
 
29.23% to 28.45%

 
2012
 
3,087
 
$16.08 to $15.29
 

$49,175

 
1.10
%
 
1.25% to 1.85%
 
14.69% to 14.02%

 
2011
 
3,365
 
$14.02 to $13.41
 

$46,781

 
0.80
%
 
1.25% to 1.85%
 
(3.97)% to (4.56)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 

210



Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
 
 
 
 
 
 
 
For the Year Ended December 31,
 
 
 
December 31
Except as Noted
 
 
 
 
 
Unit Fair Value
 
 
 
 
 
 
 
Total Return (3)
 
 
 
 
 
Corresponding
 
 
 
 
 
Expense
 
Corresponding
 
 
 
 
 
to Lowest
 
Net
 
Investment
 
Ratio (2)
 
to Lowest
 
 
 
Units
 
to Highest
 
Assets
 
Income
 
Lowest to
 
to Highest
 
Division
 
(000's)
 
Expense Ratio
 
(000's)
 
Ratio (1)
 
Highest
 
Expense Ratio
Fidelity VIP Equity-Income
  Service Class 2 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
1,877
 
$16.84 to $15.48

 

$31,472

 
2.86
%
 
1.30% to 2.00%

 
(5.45)% to (6.12)%

 
2014
 
2,117
 
$17.81 to $16.49

 

$37,544

 
2.56
%
 
1.30% to 2.00%

 
7.03% to 6.32%

 
2013
 
2,399
 
$16.64 to $15.51

 

$39,708

 
2.19
%
 
1.30% to 2.00%

 
26.25% to 25.38%

 
2012
 
2,825
 
$13.18 to $12.37

 

$36,953

 
2.78
%
 
1.25% to 1.85%

 
15.61% to 14.96%

 
2011
 
3,357
 
$11.40 to $10.76

 

$37,791

 
2.15
%
 
1.25% to 1.85%

 
(0.61)% to (1.19)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fidelity VIP Growth Service
  Class Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
917
 
$15.48 to $14.13

 

$14,193

 
0.16
%
 
1.30% to 1.90%

 
5.74% to 4.98%

 
2014
 
1,037
 
$14.64 to $13.46

 

$15,185

 
0.09
%
 
1.30% to 1.90%

 
9.75% to 9.16%

 
2013
 
1,248
 
$13.34 to $12.33

 

$16,637

 
0.18
%
 
1.30% to 1.90%

 
34.48% to 33.59%

 
2012
 
1,469
 
$9.92 to $9.23

 

$14,548

 
0.47
%
 
1.25% to 1.85%

 
13.11% to 12.42%

 
2011
 
1,711
 
$8.77 to $8.21

 

$14,924

 
0.24
%
 
1.25% to 1.85%

 
(1.13)% to (1.68)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fidelity VIP Growth Service
  Class 2 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
480
 
$20.94 to $19.56

 

$9,985

 
0.03
%
 
1.40% to 2.00%

 
5.39% to 4.77%

 
2014
 
481
 
$19.87 to $18.67

 

$9,442

 
–%

 
1.40% to 2.00%

 
9.48% to 8.80%

 
2013
 
467
 
$18.15 to $17.16

 

$8,346

 
0.05
%
 
1.40% to 2.00%

 
34.25% to 33.44%

 
2012
 
501
 
$13.52 to $12.86

 

$6,666

 
0.34
%
 
1.25% to 1.85%

 
12.95% to 12.31%

 
2011
 
560
 
$11.97 to $11.45

 

$6,609

 
0.12
%
 
1.25% to 1.85%

 
(1.24)% to (1.89)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fidelity VIP Mid Cap Service
  Class Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
7
 

$10.40

 

$69

 
0.41
%
 
0.95
%
 
(2.44
)%
 
2014 (9)
 
7
 

$10.66

 

$71

 
0.32
%
 
0.95
%
 
5.75
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fidelity VIP Mid Cap Service
  Class 2 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
829
 
$9.78 to $23.50

 

$19,266

 
0.27
%
 
1.15% to 2.00%

 
(2.78)% to (3.57)%

 
2014
 
707
 
$10.06 to $24.37

 

$17,956

 
0.02
%
 
1.15% to 2.00%

 
(0.20)% to 3.92%

 
2013
 
623
 
$24.80 to $23.45

 

$15,323

 
0.29
%
 
1.40% to 2.00%

 
34.05% to 33.31%

 
2012
 
592
 
$18.50 to $17.59

 

$10,855

 
0.38
%
 
1.25% to 1.85%

 
13.15% to 12.47%

 
2011
 
644
 
$16.35 to $15.64

 

$10,432

 
0.02
%
 
1.25% to 1.85%

 
(11.95)% to (12.48)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 

211



Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
 
 
 
 
 
 
 
For the Year Ended December 31,
 
 
 
December 31
Except as Noted
 
 
 
 
 
Unit Fair Value
 
 
 
 
 
 
 
Total Return (3)
 
 
 
 
 
Corresponding
 
 
 
 
 
Expense
 
Corresponding
 
 
 
 
 
to Lowest
 
Net
 
Investment
 
Ratio (2)
 
to Lowest
 
 
 
Units
 
to Highest
 
Assets
 
Income
 
Lowest to
 
to Highest
 
Division
 
(000's)
 
Expense Ratio
 
(000's)
 
Ratio (1)
 
Highest
 
Expense Ratio
Fidelity VIP Overseas Service
  Class 2 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
1,940
 
$9.63 to $15.30

 

$31,477

 
1.08
%
 
1.15% to 2.00%
 
2.12% to 1.26%

 
2014
 
2,368
 
$9.43 to $15.11

 

$37,741

 
1.04
%
 
1.15% to 2.00%
 
(3.38)% to (10.11)%

 
2013
 
2,605
 
$17.79 to $16.81

 

$45,762

 
1.10
%
 
1.40% to 2.00%
 
28.54% to 27.74%

 
2012
 
3,226
 
$13.84 to $13.16

 

$44,060

 
1.80
%
 
1.25% to 1.85%
 
19.00% to 18.35%

 
2011
 
3,580
 
$11.63 to $11.12

 

$41,148

 
1.29
%
 
1.25% to 1.85%
 
(18.27)% to (18.83)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Franklin Global Real Estate
   VIP Class 2 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
48
 
$10.50 to $9.54

 

$497

 
3.78
%
 
1.15% to 2.00%
 
(0.57)% to (4.02)%

 
2014 (10)
 
4
 
$10.56 to $10.55

 

$42

 
–%

 
1.15% to 1.40%
 
1.05% to 0.96%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Franklin Rising Dividends
  VIP Class 4 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
48
 
$9.84 to $9.81

 

$470

 
1.49
%
 
1.15% to 1.40%
 
(4.84)% to (5.13)%

 
2014 (10)
 
7
 

$10.34

 

$71

 
–%

 
1.15% to 1.40%
 
(0.39
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Franklin Small Cap Value
 VIP Class 2 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
191
 
$17.18 to $16.53

 

$3,252

 
0.62
%
 
1.30% to 2.00%
 
(8.57)% to (9.23)%

 
2014
 
191
 
$18.79 to $18.21

 

$3,577

 
0.62
%
 
1.30% to 2.00%
 
(0.74)% to (1.41)%

 
2013
 
185
 
$18.93 to $18.47

 

$3,494

 
1.17
%
 
1.30% to 2.00%
 
17.65% to 33.65%

 
2012
 
142
 
$14.07 to $13.82

 

$1,990

 
0.68
%
 
1.25% to 1.85%
 
16.86% to 16.23%

 
2011
 
144
 
$12.04 to $11.89

 

$1,726

 
0.62
%
 
1.25% to 1.85%
 
(4.90)% to (5.56)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Goldman Sachs VIT Mid Cap
  Value Institutional Shares
  Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
689
 
$21.79 to $20.30

 

$14,902

 
0.38
%
 
1.30% to 2.00%
 
(10.40)% to (11.04)%

 
2014
 
770
 
$24.32 to $22.82

 

$18,543

 
0.99
%
 
1.30% to 2.00%
 
12.07% to 11.32%

 
2013
 
842
 
$21.70 to $20.50

 

$18,015

 
0.83
%
 
1.30% to 2.00%
 
10.55% to 30.32%

 
2012
 
964
 
$16.54 to $15.73

 

$15,718

 
1.12
%
 
1.25% to 1.85%
 
17.06% to 16.35%

 
2011
 
1,108
 
$14.13 to $13.52

 

$15,462

 
0.75
%
 
1.25% to 1.85%
 
(7.59)% to (8.09)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Goldman Sachs VIT Mid Cap
  Value Service Shares
  Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
51
 
$9.17 to $9.14

 

$469

 
0.18
%
 
1.15% to 1.40%
 
(10.54)% to (10.74)%

 
2014 (10)
 
2
 
$10.25 to $10.24

 

$17

 
5.08
%
 
1.15% to 1.40%
 
0.59% to 0.49%

 
 
 
 
 
 
 
 
 
 
 
 
 
 

212



Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
 
 
 
 
 
 
 
For the Year Ended December 31,
 
 
 
December 31
Except as Noted
 
 
 
 
 
Unit Fair Value
 
 
 
 
 
 
 
Total Return (3)
 
 
 
 
 
Corresponding
 
 
 
 
 
Expense
 
Corresponding
 
 
 
 
 
to Lowest
 
Net
 
Investment
 
Ratio (2)
 
to Lowest
 
 
 
Units
 
to Highest
 
Assets
 
Income
 
Lowest to
 
to Highest
 
Division
 
(000's)
 
Expense Ratio
 
(000's)
 
Ratio (1)
 
Highest
 
Expense Ratio
Goldman Sachs VIT
   Multi-Strategy Alternatives
   Portfolio Service Shares
   Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015 (12)
 
1
 
$9.34 to $9.33

 

$12

 
6.02
%
 
1.15% to 1.40%
 
(6.69)% to (6.79)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Goldman Sachs VIT Small Cap
   Equity Insights Institutional
   Shares Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
351
 
$17.76 to $16.54

 

$6,193

 
0.28
%
 
1.30% to 2.00%
 
(3.37)% to (4.12)%
 
2014
 
382
 
$18.38 to $17.25

 

$6,978

 
0.76
%
 
1.30% to 2.00%
 
5.57% to 4.86%
 
2013
 
417
 
$17.41 to $16.45

 

$7,164

 
0.99
%
 
1.30% to 2.00%
 
14.16% to 32.98%
 
2012
 
457
 
$13.00 to $12.37

 

$5,868

 
1.15
%
 
1.25% to 1.85%
 
11.40% to 10.74%
 
2011
 
535
 
$11.67 to $11.17

 

$6,184

 
0.80
%
 
1.25% to 1.85%
 
(0.60)% to (1.15)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Goldman Sachs VIT Small
  Cap Equity Insights Service
  Shares Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
10
 
$10.24 to $10.20

 

$107

 
0.05
%
 
1.15% to 1.40%
 
(3.58)% to (3.86)%
 
2014 (10)
 
–
 
$10.62 to $10.61

 

$5

 
6.02
%
 
1.15% to 1.40%
 
1.63% to 1.53%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Government & High Quality
  Bond Class 1 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
10,832
 
$2.80 to $11.51

 

$121,664

 
3.26
%
 
0.42% to 2.00%
 
0.37% to (1.20)%
 
2014
 
12,521
 
$2.79 to $11.65

 

$141,359

 
3.77
%
 
0.43% to 2.00%
 
4.64% to 2.92%
 
2013
 
14,619
 
$2.66 to $11.32

 

$159,944

 
3.86
%
 
0.42% to 2.00%
 
(1.44)% to (2.83)%
 
2012
 
17,413
 
$2.58 to $11.65

 

$196,166

 
3.99
%
 
0.40% to 1.85%
 
3.25% to 1.92%
 
2011
 
18,006
 
$2.61 to $11.43

 

$197,866

 
0.18
%
 
0.39% to 1.85%
 
5.78% to 4.29%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Government & High Quality
  Bond Class 2 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
100
 
$10.07 to $10.04

 

$1,003

 
3.74
%
 
1.15% to 1.40%
 
(0.49)% to (0.79)%
 
2014 (10)
 
2
 

$10.12

 

$20

 
–%

 
1.15% to 1.40%
 
0.00% to 0.10%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Guggenheim Floating
   Rate Strategies
   Series F Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
81
 
$9.90 to $9.68

 

$787

 
2.66
%
 
1.15% to 2.00%
 
(0.40)% to (3.20)%
 
2014 (10)
 
1
 
$9.94 to $9.93

 

$13

 
–%

 
1.15% to 1.40%
 
(0.80)% to (0.90)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 

213



Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
 
 
 
 
 
 
 
For the Year Ended December 31,
 
 
 
December 31
Except as Noted
 
 
 
 
 
Unit Fair Value
 
 
 
 
 
 
 
Total Return (3)
 
 
 
 
 
Corresponding
 
 
 
 
 
Expense
 
Corresponding
 
 
 
 
 
to Lowest
 
Net
 
Investment
 
Ratio (2)
 
to Lowest
 
 
 
Units
 
to Highest
 
Assets
 
Income
 
Lowest to
 
to Highest
 
Division
 
(000's)
 
Expense Ratio
 
(000's)
 
Ratio (1)
 
Highest
 
Expense Ratio
Guggenheim Investments
   Global Managed Futures
   Strategy Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
11
 
$10.46 to $9.62
 

$114

 
3.08
%
 
1.15% to 2.00%
 
(2.70)% to (3.99)%
 
2014 (10)
 
2
 
$10.75 to $10.74
 

$21

 
–%

 
1.15% to 1.40%
 
5.50% to 5.40%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Guggenheim Investments Long
   Short Equity Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
17
 
$10.46 to $9.84
 

$177

 
–%

 
1.15% to 2.00%
 
0.10% to (2.09)%
 
2014 (10)
 
4
 
$10.45 to $10.44
 

$43

 
–%

 
1.15% to 1.40%
 
2.96% to 2.86%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Guggenheim Investments
   Multi-Hedge Strategies
   Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
9
 
$10.33 to $9.96
 

$88

 
0.63
%
 
1.15% to 2.00%
 
0.68% to (0.60)%
 
2014 (10)
 
1
 
$10.26 to $10.25
 

$8

 
–%

 
1.15% to 1.40%
 
2.29% to 2.30%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Guggenheim Macro
   Opportunities Series M
   Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
22
 
$9.91 to $9.66
 

$219

 
2.06
%
 
1.15% to 2.00%
 
(1.49)% to (3.40)%
 
2014 (10)
 
–
 
$10.06 to $10.05
 
$–

 
–%

 
1.15% to 1.40%
 
–%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income Class 1 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015 (12)
 
60
 
$9.71 to $9.67
 

$582

 
4.78
%
 
1.30% to 2.00%
 
(2.61)% to (3.01)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income Class 2 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015 (12)
 
2
 
$9.70 to $9.69
 

$17

 
11.21
%
 
1.15% to 1.40%
 
(2.71)% to (2.81)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
International Emerging
   Markets Class 1 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
1,992
 
$3.10 to $24.67
 

$50,665

 
1.67
%
 
0.41% to 2.00%
 
(14.17)% to (15.51)%
 
2014
 
2,140
 
$3.62 to $29.20
 

$64,255

 
0.91
%
 
0.41% to 2.00%
 
(4.15)% to (5.65)%
 
2013
 
2,369
 
$3.77 to $30.95
 

$74,988

 
2.37
%
 
0.40% to 2.00%
 
(5.42)% to (6.47)%
 
2012
 
2,577
 
$3.99 to $33.09
 

$86,313

 
1.30
%
 
0.37% to 1.85%
 
20.29% to 18.60%
 
2011
 
2,866
 
$3.32 to $27.90
 

$80,663

 
0.26
%
 
0.44% to 1.85%
 
(17.77)% to (19.01)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
International Emerging
   Markets Class 2 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015 (12)
 
4
 
$7.80 to $7.78
 

$33

 
1.58
%
 
1.15% to 1.40%
 
(21.84)% to (21.97)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 

214



Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
 
 
 
 
 
 
 
For the Year Ended December 31,
 
 
 
December 31
Except as Noted
 
 
 
 
 
Unit Fair Value
 
 
 
 
 
 
 
Total Return (3)
 
 
 
 
 
Corresponding
 
 
 
 
 
Expense
 
Corresponding
 
 
 
 
 
to Lowest
 
Net
 
Investment
 
Ratio (2)
 
to Lowest
 
 
 
Units
 
to Highest
 
Assets
 
Income
 
Lowest to
 
to Highest
 
Division
 
(000's)
 
Expense Ratio
 
(000's)
 
Ratio (1)
 
Highest
 
Expense Ratio
Invesco American Franchise
    Series I Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
294
 
$14.86 to $14.53

 

$4,369

 
–%

 
1.30% to 1.90%
 
3.70% to 3.05%

 
2014
 
321
 
$14.33 to $14.10

 

$4,607

 
0.04
%
 
1.30% to 1.90%
 
7.02% to 6.33%

 
2013
 
385
 
$13.39 to $13.26

 

$5,160

 
0.43
%
 
1.30% to 1.90%
 
38.33% to 37.55%

 
2012 (4)
 
458
 
$9.68 to $9.64

 

$4,432

 
–%

 
1.25% to 1.85%
 
(3.30)% to (3.70)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Invesco Balanced-Risk
   Allocation Series II Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
20
 
$9.53 to $9.50

 

$191

 
4.91
%
 
1.15% to 1.40%
 
(5.46)% to (5.75)%

 
2014 (10)
 
–
 

$10.08

 
$–

 
–%

 
1.15% to 1.40%
 
(0.69
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Invesco Core Equity
  Series I Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
1,220
 
$14.60 to $13.34

 

$17,820

 
1.11
%
 
1.30% to 1.90%
 
(7.01)% to (7.49)%

 
2014
 
1,369
 
$15.70 to $14.42

 

$21,497

 
0.83
%
 
1.30% to 1.90%
 
6.73% to 6.11%

 
2013
 
1,606
 
$14.71 to $13.59

 

$23,623

 
1.34
%
 
1.30% to 1.90%
 
27.69% to 26.77%

 
2012
 
1,934
 
$11.52 to $10.72

 

$22,263

 
0.95
%
 
1.25% to 1.85%
 
12.39% to 11.78%

 
2011
 
2,296
 
$10.25 to $9.59

 

$23,462

 
0.93
%
 
1.25% to 1.85%
 
(1.25)% to (1.84)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Invesco Global Health Care
  Series I Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
461
 
$22.92 to $21.00

 

$10,562

 
–%

 
1.30% to 1.90%
 
1.82% to 1.25%

 
2014
 
485
 
$22.51 to $20.74

 

$10,917

 
–%

 
1.30% to 1.90%
 
18.10% to 17.37%

 
2013
 
551
 
$19.06 to $17.67

 

$10,479

 
0.69
%
 
1.30% to 1.90%
 
38.82% to 37.94%

 
2012
 
551
 
$13.73 to $12.81

 

$7,547

 
–%

 
1.25% to 1.85%
 
19.39% to 18.72%

 
2011
 
592
 
$11.50 to $10.79

 

$6,751

 
–%

 
1.25% to 1.85%
 
2.68% to 1.98%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Invesco Global Health Care
  Series II Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
78
 
$10.52 to $10.48

 

$814

 
–%

 
1.15% to 1.40%
 
1.74% to 1.45%

 
2014 (10)
 
7
 
$10.34 to $10.33

 

$71

 
–%

 
1.15% to 1.40%
 
0.39
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Invesco International Growth
  Series I Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
954
 
$10.69 to $10.21

 

$10,161

 
1.50
%
 
1.40% to 2.00%
 
(3.69)% to (4.31)%

 
2014
 
943
 
$11.10 to $10.67

 

$10,425

 
1.67
%
 
1.40% to 2.00%
 
(1.07)% to (1.66)%

 
2013
 
791
 
$11.22 to $10.85

 

$8,853

 
1.35
%
 
1.40% to 2.00%
 
17.61% to 16.92%

 
2012
 
735
 
$9.54 to $9.28

 

$6,999

 
1.65
%
 
1.25% to 1.85%
 
14.25% to 13.59%

 
2011
 
700
 
$8.35 to $8.17

 

$5,831

 
1.58
%
 
1.25% to 1.85%
 
(7.73)% to (8.20)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 

215



Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
 
 
 
 
 
 
 
For the Year Ended December 31,
 
 
 
December 31
Except as Noted
 
 
 
 
 
Unit Fair Value
 
 
 
 
 
 
 
Total Return (3)
 
 
 
 
 
Corresponding
 
 
 
 
 
Expense
 
Corresponding
 
 
 
 
 
to Lowest
 
Net
 
Investment
 
Ratio (2)
 
to Lowest
 
 
 
Units
 
to Highest
 
Assets
 
Income
 
Lowest to
 
to Highest
 
Division
 
(000's)
 
Expense Ratio
 
(000's)
 
Ratio (1)
 
Highest
 
Expense Ratio
Invesco International Growth
  Series II Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
46
 
$9.25 to $9.22
 

$429

 
1.81
%
 
1.15% to 1.40%
 
(3.75)% to (3.96)%
 
2014 (10)
 
3
 
$9.61 to $9.60
 

$32

 
–%

 
1.15% to 1.40%
 
(3.12)% to (3.23)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Invesco Mid Cap Growth
  Series I Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
113
 
$14.11 to $13.81
 

$1,594

 
–%

 
1.30% to 1.90%
 
(0.14)% to (0.65)%
 
2014
 
110
 
$14.13 to $13.90
 

$1,554

 
–%

 
1.30% to 1.90%
 
6.64% to 5.95%
 
2013
 
126
 
$13.25 to $13.12
 

$1,672

 
0.39
%
 
1.30% to 1.90%
 
35.34% to 34.56%
 
2012 (4)
 
162
 
$9.79 to $9.75
 

$1,589

 
–%

 
1.25% to 1.85%
 
(2.59)% to (2.99)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Invesco Small Cap Equity
  Series I Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
372
 
$21.47 to $20.01
 

$7,928

 
–%

 
1.30% to 2.00%
 
(6.77)% to (7.40)%
 
2014
 
408
 
$23.03 to $21.61
 

$9,327

 
–%

 
1.30% to 2.00%
 
1.05% to 0.37%
 
2013
 
469
 
$22.79 to $21.53
 

$10,623

 
0.01
%
 
1.30% to 2.00%
 
35.74% to 34.82%
 
2012
 
510
 
$16.79 to $15.97
 

$8,502

 
–%

 
1.25% to 1.85%
 
12.46% to 11.83%
 
2011
 
592
 
$14.93 to $14.28
 

$8,774

 
–%

 
1.25% to 1.85%
 
(1.97)% to (2.59)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Invesco Technology
  Series I Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
357
 
$9.68 to $8.86
 

$3,452

 
–%

 
1.30% to 1.90%
 
5.45% to 4.73%
 
2014
 
411
 
$9.18 to $8.46
 

$3,772

 
–%

 
1.30% to 1.90%
 
9.68% to 9.02%
 
2013
 
410
 
$8.37 to $7.76
 

$3,426

 
–%

 
1.30% to 1.90%
 
23.45% to 22.78%
 
2012
 
498
 
$6.78 to $6.32
 

$3,350

 
–%

 
1.25% to 1.85%
 
9.89% to 9.15%
 
2011
 
591
 
$6.17 to $5.79
 

$3,591

 
0.17
%
 
1.25% to 1.85%
 
(6.23)% to (6.76)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Invesco Value Opportunities
  Series I Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
338
 
$13.25 to $12.38
 

$4,445

 
2.63
%
 
1.40% to 2.00%
 
(11.67)% to (12.14)%
 
2014
 
360
 
$15.00 to $14.09
 

$5,348

 
1.37
%
 
1.40% to 2.00%
 
5.19% to 4.53%
 
2013
 
401
 
$14.26 to $13.48
 

$5,666

 
1.46
%
 
1.40% to 2.00%
 
32.04% to 31.13%
 
2012
 
428
 
$10.80 to $10.28
 

$4,582

 
1.43
%
 
1.25% to 1.85%
 
16.13% to 15.64%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Janus Aspen Enterprise
  Service Shares Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
580
 
$15.15 to $13.84
 

$8,794

 
0.76
%
 
1.30% to 1.90%
 
2.43% to 1.84%
 
2014
 
643
 
$14.79 to $13.59
 

$9,503

 
0.03
%
 
1.30% to 1.90%
 
10.79% to 10.13%
 
2013
 
744
 
$13.35 to $12.34
 

$9,931

 
0.36
%
 
1.30% to 1.90%
 
30.37% to 29.62%
 
2012
 
889
 
$10.24 to $9.52
 

$9,083

 
–%

 
1.25% to 1.85%
 
15.45% to 14.84%
 
2011
 
1,085
 
$8.87 to $8.29
 

$9,564

 
–%

 
1.25% to 1.85%
 
(2.85)% to (3.49)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

216



Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
 
 
 
 
 
 
 
For the Year Ended December 31,
 
 
 
December 31
Except as Noted
 
 
 
 
 
Unit Fair Value
 
 
 
 
 
 
 
Total Return (3)
 
 
 
 
 
Corresponding
 
 
 
 
 
Expense
 
Corresponding
 
 
 
 
 
to Lowest
 
Net
 
Investment
 
Ratio (2)
 
to Lowest
 
 
 
Units
 
to Highest
 
Assets
 
Income
 
Lowest to
 
to Highest
 
Division
 
(000's)
 
Expense Ratio
 
(000's)
 
Ratio (1)
 
Highest
 
Expense Ratio
Janus Aspen Flexible Bond
  Service Shares Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
80
 
$9.93 to $9.90
 

$796

 
2.28
%
 
1.15% to 1.40%
 
(1.19)% to (1.39)%
 
2014 (10)
 
7
 
$10.05 to $10.04
 

$73

 
4.49
%
 
1.15% to 1.40%
 
(0.10)% to (0.20)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LargeCap Growth Class 1
  Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2,849
 
$3.46 to $27.63
 

$49,543

 
0.14
%
 
0.47% to 2.00%
 
4.54% to 2.91%
 
2014
 
3,191
 
$3.31 to $26.85
 

$53,469

 
0.54
%
 
0.41% to 2.00%
 
10.65% to 8.92%
 
2013
 
3,571
 
$2.99 to $24.65
 

$55,522

 
1.44
%
 
0.42% to 2.00%
 
33.35% to 31.40%
 
2012
 
3,916
 
$2.16 to $18.76
 

$48,013

 
0.29
%
 
0.41% to 1.85%
 
16.10% to 14.67%
 
2011
 
4,423
 
$1.93 to $16.36
 

$47,766

 
–%

 
0.44% to 1.85%
 
(4.63)% to (5.98)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LargeCap Growth Class 2
  Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
42
 
$10.47 to $10.44
 

$442

 
–%

 
1.15% to 1.40%
 
3.46% to 3.26%
 
2014 (10)
 
1
 
$10.12 to $10.11
 

$6

 
–%

 
1.15% to 1.40%
 
(0.39)% to (0.49)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LargeCap Growth I Class 1
  Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2,158
 
$2.22 to $53.15
 

$105,642

 
0.23
%
 
0.45% to 2.00%
 
7.32% to 5.62%
 
2014
 
2,292
 
$2.07 to $50.32
 

$109,226

 
0.12
%
 
0.41% to 2.00%
 
8.16% to 6.47%
 
2013
 
2,572
 
$1.91 to $47.26
 

$114,518

 
0.38
%
 
0.40% to 2.00%
 
35.57% to 33.54%
 
2012
 
2,847
 
$1.41 to $35.39
 

$97,185

 
0.07
%
 
0.44% to 1.85%
 
15.89% to 14.23%
 
2011
 
3,256
 
$1.22 to $30.98
 

$97,585

 
–%

 
0.44% to 1.85%
 
(0.74)% to (2.15)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LargeCap Growth I Class 2
  Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015 (12)
 
49
 
$9.99 to $9.98
 

$491

 
0.50
%
 
1.15% to 1.40%
 
(0.60)% to (0.70)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LargeCap S&P 500 Index
  Class 1 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
5,945
 
$2.01 to $14.64
 

$92,317

 
1.44
%
 
0.48% to 2.00%
 
0.72% to (0.88)%
 
2014
 
6,500
 
$1.99 to $14.77
 

$102,363

 
1.24
%
 
0.37% to 2.00%
 
12.81% to 11.05%
 
2013
 
7,202
 
$1.76 to $13.30
 

$101,189

 
1.22
%
 
0.40% to 2.00%
 
31.49% to 29.50%
 
2012
 
7,893
 
$1.34 to $10.27
 

$85,828

 
1.07
%
 
0.41% to 1.85%
 
15.02% to 13.36%
 
2011
 
9,228
 
$1.17 to $9.06
 

$88,077

 
0.05
%
 
0.50% to 1.85%
 
1.31% to (0.11)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LargeCap S&P 500 Index
  Class 2 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015 (12)
 
16
 
$9.66 to $9.64
 

$151

 
2.15
%
 
1.15% to 1.40%
 
(3.69)% to (3.89)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 

217



Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
 
 
 
 
 
 
 
For the Year Ended December 31,
 
 
 
December 31
Except as Noted
 
 
 
 
 
Unit Fair Value
 
 
 
 
 
 
 
Total Return (3)
 
 
 
 
 
Corresponding
 
 
 
 
 
Expense
 
Corresponding
 
 
 
 
 
to Lowest
 
Net
 
Investment
 
Ratio (2)
 
to Lowest
 
 
 
Units
 
to Highest
 
Assets
 
Income
 
Lowest to
 
to Highest
 
Division
 
(000's)
 
Expense Ratio
 
(000's)
 
Ratio (1)
 
Highest
 
Expense Ratio
LargeCap Value Class 1
  Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
3,206
 
$5.21 to $35.43

 

$79,223

 
1.69
%
 
0.46% to 2.00%
 
(1.51)% to (3.06)%

 
2014
 
3,695
 
$61.32 to $36.55

 

$91,487

 
2.20
%
 
0.09% to 2.00%
 
10.64% to 8.97%

 
2013
 
4,234
 
$4.78 to $33.54

 

$95,526

 
2.52
%
 
0.43% to 2.00%
 
30.28% to 28.36%

 
2012
 
4,706
 
$3.51 to $26.13

 

$84,330

 
1.26
%
 
0.42% to 1.85%
 
17.82% to 16.39%

 
2011
 
5,519
 
$36.07 to $22.45

 

$83,241

 
–%

 
0.31% to 1.85%
 
0.69% to (0.66)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
LargeCap Value Class 2
  Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015 (12)
 
1
 
$9.58 to $9.56

 

$10

 
1.46
%
 
1.15% to 1.40%
 
(4.68)% to (4.88)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
MFS VIT International
  Value Service Class Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
160
 
$10.34 to $9.45

 

$1,563

 
2.01
%
 
1.15% to 2.00%
 
5.19% to (5.41)%

 
2014 (10)
 
6
 

$9.83

 

$61

 
–%

 
1.15% to 1.40%
 
(2.090
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MFS VIT New Discovery
  Service Class Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
121
 
$9.15 to $10.25

 

$1,253

 
–%

 
1.15% to 2.00%
 
(9.50)% to (4.12)%

 
2014
 
88
 
$10.81 to $10.69

 

$944

 
–%

 
1.30% to 2.00%
 
(8.70)% to (9.33)%

 
2013 (6)
 
51
 
$11.84 to $11.79

 

$598

 
–%

 
1.30% to 2.00%
 
17.00% to 16.50%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
MFS VIT Utilities
  Service Class Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
626
 
$8.26 to $18.25

 

$10,898

 
4.07
%
 
1.15% to 2.00%
 
(15.71)% to (16.48)%

 
2014
 
550
 
$9.80 to $21.85

 

$12,181

 
2.02
%
 
1.15% to 2.00%
 
(2.68)% to 10.24%

 
2013
 
425
 
$20.38 to $19.82

 

$8,631

 
2.03
%
 
1.40% to 2.00%
 
18.70% to 17.98%

 
2012
 
311
 
$17.17 to $16.80

 

$5,324

 
6.80
%
 
1.25% to 1.85%
 
11.78% to 11.11%

 
2011
 
212
 
$15.36 to $15.12

 

$3,243

 
3.24
%
 
1.25% to 1.85%
 
5.21% to 4.56%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
MFS VIT Value Service Class
  Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
244
 
$21.32 to $20.49

 

$5,168

 
2.12
%
 
1.40% to 2.00%
 
(2.34)% to (2.89)%

 
2014
 
238
 
$21.83 to $21.10

 

$5,175

 
1.34
%
 
1.40% to 2.00%
 
8.66% to 7.98%

 
2013
 
222
 
$20.09 to $19.54

 

$4,442

 
1.11
%
 
1.40% to 2.00%
 
33.84% to 33.02%

 
2012
 
133
 
$15.01 to $14.69

 

$1,987

 
1.32
%
 
1.25% to 1.85%
 
14.41% to 13.79%

 
2011
 
114
 
$13.12 to $12.91

 

$1,498

 
1.29
%
 
1.25% to 1.85%
 
(1.65)% to (2.27)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 

218



Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
 
 
 
 
 
 
 
For the Year Ended December 31,
 
 
 
December 31
Except as Noted
 
 
 
 
 
Unit Fair Value
 
 
 
 
 
 
 
Total Return (3)
 
 
 
 
 
Corresponding
 
 
 
 
 
Expense
 
Corresponding
 
 
 
 
 
to Lowest
 
Net
 
Investment
 
Ratio (2)
 
to Lowest
 
 
 
Units
 
to Highest
 
Assets
 
Income
 
Lowest to
 
to Highest
 
Division
 
(000's)
 
Expense Ratio
 
(000's)
 
Ratio (1)
 
Highest
 
Expense Ratio
MidCap Class 1 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
4,922
 
$9.58 to 74.62
 

$339,892

 
0.51
%
 
0.48% to 2.00%
 
1.22% to (0.36)%

 
2014
 
5,671
 
$9.46 to 74.89
 

$389,291

 
0.51
%
 
0.40% to 2.00%
 
12.51% to 10.75%

 
2013
 
6,669
 
$8.41 to $67.62
 

$412,319

 
1.44
%
 
0.43% to 2.00%
 
33.37% to 31.38%

 
2012
 
7,660
 
$6.06 to $51.47
 

$362,857

 
0.87
%
 
0.42% to 1.85%
 
18.68% to 17.24%

 
2011
 
8,881
 
$5.30 to $43.90
 

$355,563

 
–%

 
0.44% to 1.85%
 
7.84% to 6.32%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Money Market Class 1
  Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
6,067
 
$1.67 to $12.09
 

$49,380

 
–%

 
0.38% to 2.00%
 
(0.42)% to (1.95)%

 
2014
 
6,700
 
$0.00 to $12.33
 

$55,230

 
–%

 
0.00% to 2.00%
 
(100.00)% to (1.99)%

 
2013
 
6,956
 
$2.42 to $12.58
 

$65,639

 
–%

 
0.00% to 2.00%
 
(1.00)% to (1.87)%

 
2012
 
8,221
 
$2.19 to $12.82
 

$81,007

 
–%

 
0.00% to 1.85%
 
(1.49)% to (1.84)%

 
2011
 
9,682
 
$2.47 to $13.06
 

$101,686

 
–%

 
0.00% to 1.85%
 
(0.99)% to (1.88)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Money Market Class 2
  Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
140
 
$9.85 to $9.82
 

$1,381

 
–%

 
1.15% to 1.40%
 
(1.20)% to (1.41)%

 
2014 (10)
 
22
 
$9.97 to $9.96
 

$217

 
–%

 
1.15% to 1.40%
 
(0.10
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Neuberger Berman AMT Large
  Cap Value I Class Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
244
 
$16.64 to $15.54
 

$4,048

 
0.76
%
 
1.40% to 2.00%
 
(13.02)% to (13.57)%

 
2014
 
276
 
$19.13 to $17.98
 

$5,241

 
0.72
%
 
1.40% to 2.00%
 
8.32% to 7.66%

 
2013
 
312
 
$17.66 to $16.70
 

$5,443

 
1.11
%
 
1.40% to 2.00%
 
29.38% to 28.66%

 
2012
 
394
 
$13.65 to $12.98
 

$5,317

 
0.41
%
 
1.25% to 1.85%
 
15.19% to 14.46%

 
2011
 
396
 
$11.85 to $11.34
 

$4,642

 
–%

 
1.25% to 1.85%
 
(12.48)% to (12.97)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Neuberger Berman AMT
   Mid-Cap Growth Portfolio
   S Class Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015 (12)
 
286
 
$9.19 to $9.58
 

$2,746

 
–%

 
1.15% to 2.00%
 
(8.83)% to (4.49)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Neuberger Berman AMT
  Socially Responsive I
  Class Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
246
 
$20.74 to $19.37
 

$5,077

 
0.55
%
 
1.40% to 2.00%
 
(1.85)% to (2.47)%

 
2014
 
290
 
$21.13 to $19.86
 

$6,077

 
0.35
%
 
1.40% to 2.00%
 
8.81% to 8.23%

 
2013
 
387
 
$19.42 to $18.35
 

$7,439

 
0.68
%
 
1.40% to 2.00%
 
35.80% to 34.93%

 
2012
 
460
 
$14.30 to $13.60
 

$6,518

 
0.23
%
 
1.25% to 1.85%
 
9.66% to 8.97%

 
2011
 
495
 
$13.04 to $12.48
 

$6,401

 
0.35
%
 
1.25% to 1.85%
 
(4.33)% to (4.88)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 

219



Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
 
 
 
 
 
 
 
For the Year Ended December 31,
 
 
 
December 31
Except as Noted
 
 
 
 
 
Unit Fair Value
 
 
 
 
 
 
 
Total Return (3)
 
 
 
 
 
Corresponding
 
 
 
 
 
Expense
 
Corresponding
 
 
 
 
 
to Lowest
 
Net
 
Investment
 
Ratio (2)
 
to Lowest
 
 
 
Units
 
to Highest
 
Assets
 
Income
 
Lowest to
 
to Highest
 
Division
 
(000's)
 
Expense Ratio
 
(000's)
 
Ratio (1)
 
Highest
 
Expense Ratio
Oppenheimer Main Street Small
  Cap Service Shares Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
48
 
$11.78 to $11.60
 

$561

 
0.70
%
 
1.30% to 1.90%
 
(7.32)% to (7.86)%
 
2014
 
52
 
$12.71 to $12.59
 

$658

 
0.67
%
 
1.30% to 1.90%
 
10.23% to 9.57%
 
2013 (6)
 
33
 
$11.53 to $11.49
 

$378

 
0.06
%
 
1.30% to 1.90%
 
15.07% to 14.67%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PIMCO All Asset
  Administrative Class Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
322
 
$12.91 to $12.40
 

$4,147

 
3.26
%
 
1.40% to 2.00%
 
(10.22)% to (10.79)%
 
2014
 
366
 
$14.38 to $13.90
 

$5,247

 
5.21
%
 
1.40% to 2.00%
 
(0.90)% to (1.56)%
 
2013
 
346
 
$14.51 to $14.12
 

$4,994

 
4.45
%
 
1.40% to 2.00%
 
(1.09)% to (1.60)%
 
2012
 
322
 
$14.67 to $14.35
 

$4,703

 
5.79
%
 
1.25% to 1.85%
 
13.54% to 12.81%
 
2011
 
201
 
$12.92 to $12.72
 

$2,597

 
6.77
%
 
1.25% to 1.85%
 
0.70% to 0.08%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PIMCO All Asset Advisor
   Class Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015 (12)
 
–
 
$8.77 to $8.75
 
$–

 
–%

 
1.15% to 1.40%
 
(12.12)% to (12.32)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PIMCO Commodity Real
   Return Strategy M Class
   Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015 (12)
 
2
 
$7.24 to $7.22
 

$13

 
–%

 
1.15% to 1.40%
 
(27.45)% to (27.66)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PIMCO High Yield
  Administrative Class Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
1,190
 
$9.61 to $12.97
 

$15,656

 
5.25
%
 
1.15% to 2.00%
 
(2.73)% to (3.57)%
 
2014
 
1,160
 
$9.88 to $13.45
 

$16,015

 
5.25
%
 
1.15% to 2.00%
 
(1.20)% to 1.28%
 
2013
 
1,048
 
$13.60 to $13.28
 

$14,204

 
5.56
%
 
1.40% to 2.00%
 
4.37% to 3.75%
 
2012
 
1,126
 
$13.03 to $12.80
 

$14,597

 
5.82
%
 
1.25% to 1.85%
 
12.91% to 12.18%
 
2011
 
1,338
 
$11.54 to $11.41
 

$15,396

 
6.67
%
 
1.25% to 1.85%
 
2.03% to 1.51%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PIMCO Low Duration Advisor
   Class Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015 (12)
 
37
 
$9.89 to $9.84
 

$361

 
11.09
%
 
1.15% to 2.00%
 
(1.10)% to (1.60)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PIMCO Total Return
  Administrative Class Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2,192
 
$10.04 to $11.94
 

$27,067

 
4.91
%
 
1.15% to 2.00%
 
(0.69)% to (1.57)%
 
2014
 
2,330
 
$10.11 to $12.13
 

$29,159

 
2.19
%
 
1.15% to 2.00%
 
(0.30)% to 2.19%
 
2013
 
2,556
 
$12.21 to $11.87
 

$31,116

 
2.20
%
 
1.40% to 2.00%
 
(3.17)% to (3.81)%
 
2012
 
3,618
 
$12.61 to $12.34
 

$45,490

 
2.48
%
 
1.25% to 1.85%
 
8.24% to 7.59%
 
2011
 
2,292
 
$11.65 to $11.47
 

$26,662

 
2.60
%
 
1.25% to 1.85%
 
2.28% to 1.68%
 
 
 
 
 
 
 
 
 
 
 
 
 
 

220



Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
 
 
 
 
 
 
 
For the Year Ended December 31,
 
 
 
December 31
Except as Noted
 
 
 
 
 
Unit Fair Value
 
 
 
 
 
 
 
Total Return (3)
 
 
 
 
 
Corresponding
 
 
 
 
 
Expense
 
Corresponding
 
 
 
 
 
to Lowest
 
Net
 
Investment
 
Ratio (2)
 
to Lowest
 
 
 
Units
 
to Highest
 
Assets
 
Income
 
Lowest to
 
to Highest
 
Division
 
(000's)
 
Expense Ratio
 
(000's)
 
Ratio (1)
 
Highest
 
Expense Ratio
Principal Capital Appreciation
  Class 1 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
8,683
 
$16.68 to $15.37
 

$116,745

 
0.32
%
 
0.95% to 2.00%
 
1.21% to 0.13%

 
2014
 
1,161
 
$16.48 to $15.35
 

$18,505

 
3.13
%
 
0.95% to 2.00%
 
11.35% to 10.19%

 
2013
 
1,169
 
$14.80 to $13.93
 

$16,817

 
6.72
%
 
0.95% to 2.00%
 
31.44% to 30.19%

 
2012
 
1,038
 
$11.26 to $10.70
 

$11,418

 
1.13
%
 
0.95% to 1.85%
 
12.71% to 11.69%

 
2011
 
936
 
$9.99 to $9.58
 

$9,164

 
–%

 
0.95% to 1.85%
 
(0.79)% to (1.64)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal Capital Appreciation
  Class 2 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
61
 
$10.40 to $10.36
 

$632

 
0.05
%
 
1.15% to 1.40%
 
0.78% to 0.48%

 
2014 (10)
 
19
 
$10.32 to $10.31
 

$192

 
–%

 
1.15% to 1.40%
 
(0.29
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal LifeTime Strategic
  Income Class 1 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
1,254
 
$12.50 to $12.79
 

$17,075

 
2.13
%
 
0.95% to 2.00%
 
(1.88)% to (2.96)%

 
2014
 
1,565
 
$12.74 to $13.18
 

$21,738

 
2.51
%
 
0.95% to 2.00%
 
3.58% to 2.49%

 
2013
 
1,813
 
$12.30 to $12.86
 

$24,406

 
2.72
%
 
0.95% to 2.00%
 
4.15% to 3.21%

 
2012
 
1,977
 
$11.81 to $12.46
 

$25,654

 
1.77
%
 
0.95% to 1.85%
 
8.65% to 7.60%

 
2011
 
2,070
 
$10.87 to $11.58
 

$24,819

 
3.13
%
 
0.95% to 1.85%
 
2.45% to 1.58%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal LifeTime 2010
  Class 1 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
1,925
 
$13.25 to $13.94
 

$28,521

 
2.18
%
 
0.95% to 2.00%
 
(2.14)% to (3.13)%

 
2014
 
2,223
 
$13.54 to $14.39
 

$33,743

 
2.17
%
 
0.95% to 2.00%
 
3.83% to 2.71%

 
2013
 
2,531
 
$13.04 to $14.01
 

$36,994

 
2.38
%
 
0.95% to 2.00%
 
9.76% to 8.77%

 
2012
 
2,851
 
$11.88 to $12.88
 

$38,033

 
1.90
%
 
0.95% to 1.85%
 
10.82% to 9.71%

 
2011
 
3,124
 
$10.72 to $11.74
 

$37,726

 
2.71
%
 
0.95% to 1.85%
 
0.47% to (0.42)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal LifeTime 2020
  Class 1 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
7,249
 
$14.14 to $15.32
 

$117,718

 
2.54
%
 
0.95% to 2.00%
 
(2.01)% to (3.10)%

 
2014
 
8,649
 
$14.43 to $15.81
 

$143,695

 
2.31
%
 
0.95% to 2.00%
 
4.72% to 3.60%

 
2013
 
11,078
 
$13.78 to $15.26
 

$176,094

 
2.14
%
 
0.95% to 2.00%
 
14.93% to 13.88%

 
2012
 
12,377
 
$11.99 to $13.40
 

$171,673

 
1.71
%
 
0.95% to 1.85%
 
13.65% to 12.61%

 
2011
 
13,310
 
$10.55 to $11.90
 

$163,065

 
2.49
%
 
0.95% to 1.85%
 
(1.95)% to (2.86)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal LifeTime 2020
  Class 2 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015 (12)
 
2
 
$9.40 to $9.38
 

$16

 
6.44
%
 
1.15% to 1.40%
 
(6.00)% to (6.20)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 

221



Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
 
 
 
 
 
 
 
For the Year Ended December 31,
 
 
 
December 31
Except as Noted
 
 
 
 
 
Unit Fair Value
 
 
 
 
 
 
 
Total Return (3)
 
 
 
 
 
Corresponding
 
 
 
 
 
Expense
 
Corresponding
 
 
 
 
 
to Lowest
 
Net
 
Investment
 
Ratio (2)
 
to Lowest
 
 
 
Units
 
to Highest
 
Assets
 
Income
 
Lowest to
 
to Highest
 
Division
 
(000's)
 
Expense Ratio
 
(000's)
 
Ratio (1)
 
Highest
 
Expense Ratio
Principal LifeTime 2030
  Class 1 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
4,235
 
$14.22 to $15.41

 

$68,802

 
2.56
%
 
0.95% to 2.00%
 
(2.00)% to (3.02)%

 
2014
 
4,403
 
$14.51 to $15.89

 

$73,233

 
2.15
%
 
0.95% to 2.00%
 
5.07% to 3.99%

 
2013
 
4,540
 
$13.81 to $15.28

 

$72,233

 
1.94
%
 
0.95% to 2.00%
 
17.93% to 16.73%

 
2012
 
4,718
 
$11.71 to $13.09

 

$63,923

 
1.60
%
 
0.95% to 1.85%
 
14.47% to 13.43%

 
2011
 
4,956
 
$10.23 to $11.54

 

$58,812

 
1.96
%
 
0.95% to 1.85%
 
(3.12)% to (3.99)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal LifeTime 2030
  Class 2 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015 (12)
 
2
 
$9.34 to $9.33

 

$16

 
3.07
%
 
1.15% to 1.40%
 
(6.69)% to (6.79)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal LifeTime 2040
  Class 1 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
804
 
$14.56 to $16.07

 

$13,719

 
2.40
%
 
0.95% to 2.00%
 
(1.82)% to (2.78)%

 
2014
 
833
 
$14.83 to $16.53

 

$14,504

 
2.00
%
 
0.95% to 2.00%
 
5.25% to 4.09%

 
2013
 
787
 
$14.09 to $15.88

 

$13,053

 
1.57
%
 
0.95% to 2.00%
 
21.26% to 20.21%

 
2012
 
852
 
$11.62 to $13.21

 

$11,702

 
1.57
%
 
0.95% to 1.85%
 
15.62% to 14.57%

 
2011
 
874
 
$10.05 to $11.53

 

$10,412

 
1.61
%
 
0.95% to 1.85%
 
(4.10)% to (5.02)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal LifeTime 2040
  Class 2 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015 (12)
 
–
 
$9.32 to $9.31

 
$–

 
–%

 
1.15% to 1.40%
 
(6.89)% to (6.99)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal LifeTime 2050
  Class 1 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
520
 
$14.59 to $16.17

 

$8,937

 
2.52
%
 
0.95% to 2.00%
 
(1.62)% to (2.65)%

 
2014
 
493
 
$14.83 to $16.61

 

$8,618

 
2.19
%
 
0.95% to 2.00%
 
5.18% to 4.07%

 
2013
 
501
 
$14.10 to $15.96

 

$8,354

 
1.58
%
 
0.95% to 2.00%
 
22.61% to 21.46%

 
2012
 
486
 
$11.50 to $13.14

 

$6,618

 
1.45
%
 
0.95% to 1.85%
 
16.04% to 14.96%

 
2011
 
470
 
$9.91 to $11.43

 

$5,533

 
1.50
%
 
0.95% to 1.85%
 
(4.89)% to (5.69)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal LifeTime 2050
  Class 2 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015 (12)
 
3
 
$9.31 to $9.29

 

$25

 
3.71
%
 
1.15% to 1.40%
 
(7.09)% to (7.29)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real Estate Securities Class 1
  Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
1,589
 
$5.04 to $48.72

 

$81,337

 
1.51
%
 
0.46% to 2.00%
 
3.77% to 2.14%

 
2014
 
1,761
 
$4.86 to $47.70

 

$87,932

 
1.59
%
 
0.38% to 2.00%
 
32.26% to 30.19%

 
2013
 
1,880
 
$3.67 to $36.64

 

$72,398

 
1.29
%
 
0.49% to 2.00%
 
3.66% to 2.15%

 
2012
 
2,051
 
$3.54 to $35.87

 

$76,907

 
1.40
%
 
0.48% to 1.85%
 
16.68% to 15.00%

 
2011
 
2,278
 
$3.04 to $31.19

 

$73,765

 
–%

 
0.66% to 1.85%
 
8.48% to 6.92%

 
 
 
 
 
 
 
 
 
 
 
 
 
 

222



Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
 
 
 
 
 
 
 
For the Year Ended December 31,
 
 
 
December 31
Except as Noted
 
 
 
 
 
Unit Fair Value
 
 
 
 
 
 
 
Total Return (3)
 
 
 
 
 
Corresponding
 
 
 
 
 
Expense
 
Corresponding
 
 
 
 
 
to Lowest
 
Net
 
Investment
 
Ratio (2)
 
to Lowest
 
 
 
Units
 
to Highest
 
Assets
 
Income
 
Lowest to
 
to Highest
 
Division
 
(000's)
 
Expense Ratio
 
(000's)
 
Ratio (1)
 
Highest
 
Expense Ratio
Real Estate Securities Class 2
  Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
148
 
$11.71 to $11.67

 

$1,733

 
1.89
%
 
1.15% to 1.40%
 
2.81% to 2.55%

 
2014 (10)
 
16
 
$11.39 to $11.38

 

$181

 
–%

 
1.15% to 1.40%
 
3.45% to 3.36%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rydex Basic Materials Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015 (12)
 
–
 
$7.71 to $7.70

 
$–

 
–%

 
1.15% to 1.40%
 
(22.75)% to (22.85)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rydex Commodities Strategy
   Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
13
 
$4.63 to $6.40

 

$77

 
–%

 
1.15% to 2.00%
 
(34.60)% to (35.81)%

 
2014 (10)
 
2
 
$7.08 to $7.07

 

$11

 
–%

 
1.15% to 1.40%
 
(20.00)% to (20.11)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rydex NASDAQ 100
  Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
59
 
$11.00 to $10.97

 

$646

 
–%

 
1.15% to 1.40%
 
7.00% to 6.71%

 
2014 (10)
 
9
 

$10.28

 

$97

 
–%

 
1.15% to 1.40%
 
(1.34
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SAM Balanced Portfolio
  Class 1 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
44,023
 
$2.00 to $13.02

 

$598,643

 
2.90
%
 
0.42% to 2.00%
 
(1.23)% to (2.76)%

 
2014
 
49,402
 
$2.02 to $13.39

 

$687,748

 
2.66
%
 
0.48% to 2.00%
 
6.37% to 4.69%

 
2013
 
58,685
 
$1.90 to $12.79

 

$775,903

 
2.43
%
 
0.57% to 2.00%
 
15.50% to 15.54%

 
2012
 
61,098
 
$11.65 to $11.07

 

$697,358

 
0.69
%
 
0.95% to 1.85%
 
11.70% to 10.70%

 
2011
 
64,434
 
$10.43 to $10.00

 

$660,873

 
2.77
%
 
0.95% to 1.85%
 
0.00% to (0.89)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
SAM Balanced Portfolio
  Class 2 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
383
 
$9.82 to $9.79

 

$3,759

 
3.22
%
 
1.15% to 1.40%
 
(2.19)% to (2.39)%

 
2014 (10)
 
63
 
$10.04 to $10.03

 

$634

 
–%

 
1.15% to 1.40%
 
(0.69)% to (0.79)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
SAM Conservative Balanced
  Portfolio Class 1 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
11,177
 
$13.98 to $12.88

 

$150,875

 
3.19
%
 
0.95% to 2.00%
 
(1.69)% to (2.79)%

 
2014
 
12,217
 
$14.22 to $13.25

 

$168,582

 
2.97
%
 
0.95% to 2.00%
 
5.18% to 4.17%

 
2013
 
13,493
 
$13.52 to $12.72

 

$177,876

 
2.87
%
 
0.95% to 2.00%
 
10.46% to 9.37%

 
2012
 
13,568
 
$12.24 to $11.63

 

$162,474

 
0.82
%
 
0.95% to 1.85%
 
10.17% to 9.20%

 
2011
 
14,050
 
$11.11 to $10.65

 

$153,302

 
3.19
%
 
0.95% to 1.85%
 
1.37% to 0.38%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
SAM Conservative Balanced
  Portfolio Class 2 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
306
 
$9.83 to $9.80

 

$3,002

 
3.57
%
 
1.15% to 1.40%
 
(2.09)% to (2.29)%

 
2014 (10)
 
55
 
$10.04 to $10.03

 

$553

 
–%

 
1.15% to 1.40%
 
(0.50)% to (0.59)%


223



Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
 
 
 
 
 
 
 
For the Year Ended December 31,
 
 
 
December 31
Except as Noted
 
 
 
 
 
Unit Fair Value
 
 
 
 
 
 
 
Total Return (3)
 
 
 
 
 
Corresponding
 
 
 
 
 
Expense
 
Corresponding
 
 
 
 
 
to Lowest
 
Net
 
Investment
 
Ratio (2)
 
to Lowest
 
 
 
Units
 
to Highest
 
Assets
 
Income
 
Lowest to
 
to Highest
 
Division
 
(000's)
 
Expense Ratio
 
(000's)
 
Ratio (1)
 
Highest
 
Expense Ratio
SAM Conservative Growth
  Portfolio Class 1 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
7,589
 
$13.80 to $12.71

 

$100,958

 
2.27
%
 
0.95% to 2.00%
 
(1.99)% to (3.05)%

 
2014
 
7,463
 
$14.08 to $13.11

 

$101,757

 
1.82
%
 
0.95% to 2.00%
 
6.42% to 5.30%

 
2013
 
6,963
 
$13.23 to $12.45

 

$89,642

 
1.82
%
 
0.95% to 2.00%
 
21.94% to 20.76%

 
2012
 
6,406
 
$10.85 to $10.31

 

$67,909

 
0.44
%
 
0.95% to 1.85%
 
13.14% to 12.07%

 
2011
 
6,161
 
$9.59 to $9.20

 

$57,954

 
2.01
%
 
0.95% to 1.85%
 
(1.44)% to (2.23)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
SAM Conservative Growth
  Portfolio Class 2 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
564
 
$9.80 to $9.77

 

$5,522

 
2.62
%
 
1.15% to 1.40%
 
(2.49)% to (2.79)%

 
2014 (10)
 
43
 

$10.05

 

$430

 
–%

 
1.15% to 1.40%
 
(0.79
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SAM Flexible Income
  Portfolio Class 1 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
12,622
 
$14.00 to $12.90

 

$170,645

 
3.57
%
 
0.95% to 2.00%
 
(2.23)% to (3.23)%

 
2014
 
13,335
 
$14.32 to $13.33

 

$185,235

 
3.60
%
 
0.95% to 2.00%
 
5.06% to 3.90%

 
2013
 
13,976
 
$13.63 to $12.83

 

$185,636

 
3.43
%
 
0.95% to 2.00%
 
6.73% to 5.68%

 
2012
 
14,864
 
$12.77 to $12.14

 

$185,716

 
1.13
%
 
0.95% to 1.85%
 
9.52% to 8.59%

 
2011
 
14,070
 
$11.66 to $11.18

 

$160,984

 
3.86
%
 
0.95% to 1.85%
 
2.46% to 1.54%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
SAM Flexible Income
  Portfolio Class 2 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
454
 
$9.76 to $9.73

 

$4,421

 
4.01
%
 
1.15% to 1.40%
 
(2.69)% to (2.89)%

 
2014 (10)
 
42
 
$10.03 to $10.02

 

$418

 
–%

 
1.15% to 1.40%
 
(0.50
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SAM Strategic Growth
  Portfolio Class 1 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
5,064
 
$13.73 to $12.65

 

$66,773

 
2.26
%
 
0.95% to 2.00%
 
(2.49)% to (3.58)%

 
2014
 
4,851
 
$14.08 to $13.12

 

$65,972

 
1.52
%
 
0.95% to 2.00%
 
7.65% to 6.58%

 
2013
 
4,539
 
$13.08 to $12.31

 

$57,654

 
1.43
%
 
0.95% to 2.00%
 
26.25% to 24.97%

 
2012
 
4,171
 
$10.36 to $9.85

 

$42,188

 
0.24
%
 
0.95% to 1.85%
 
14.35% to 13.48%

 
2011
 
4,626
 
$9.06 to $8.68

 

$41,082

 
1.50
%
 
0.95% to 1.85%
 
(2.79)% to (3.77)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
SAM Strategic Growth
  Portfolio Class 2 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
169
 
$9.79 to $9.76

 

$1,650

 
2.36
%
 
1.15% to 1.40%
 
(2.97)% to (3.17)%

 
2014 (10)
 
62
 
$10.09 to $10.08

 

$624

 
–%

 
1.15% to 1.40%
 
(0.69)% to (0.79)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 

224



Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
 
 
 
 
 
 
 
For the Year Ended December 31,
 
 
 
December 31
Except as Noted
 
 
 
 
 
Unit Fair Value
 
 
 
 
 
 
 
Total Return (3)
 
 
 
 
 
Corresponding
 
 
 
 
 
Expense
 
Corresponding
 
 
 
 
 
to Lowest
 
Net
 
Investment
 
Ratio (2)
 
to Lowest
 
 
 
Units
 
to Highest
 
Assets
 
Income
 
Lowest to
 
to Highest
 
Division
 
(000's)
 
Expense Ratio
 
(000's)
 
Ratio (1)
 
Highest
 
Expense Ratio
Short-Term Income Class 1
  Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
9,431
 
$11.89 to $11.04
 

$108,512

 
2.61
%
 
0.85% to 2.00%
 
(0.17)% to (1.25)%

 
2014
 
11,376
 
$11.91 to $11.18
 

$131,612

 
1.68
%
 
0.85% to 2.00%
 
0.85% to (0.27)%

 
2013
 
13,303
 
$11.81 to $11.21
 

$153,216

 
1.87
%
 
0.85% to 2.00%
 
0.34% to (0.80)%

 
2012
 
14,402
 
$11.77 to $11.30
 

$166,187

 
2.09
%
 
0.85% to 1.85%
 
4.07% to 3.10%

 
2011
 
14,110
 
$11.31 to $10.96
 

$157,122

 
0.15
%
 
0.85% to 1.85%
 
0.53% to (0.54)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Short-Term Income Class 2
  Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
78
 
$9.95 to $9.92
 

$775

 
3.33
%
 
1.15% to 1.40%
 
(0.60)% to (0.80)%

 
2014 (10)
 
9
 
$10.01 to $10.00
 

$94

 
–%

 
1.15% to 1.40%
 
(0.10
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SmallCap Blend Class 1
  Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
5,906
 
$2.16 to $18.62
 

$116,459

 
0.08
%
 
0.55% to 2.00%
 
(0.50)% to (2.10)%

 
2014
 
1,636
 
$2.17 to $19.02
 

$33,528

 
0.35
%
 
0.45% to 2.00%
 
4.45% to 2.81%

 
2013
 
1,736
 
$2.08 to $18.50
 

$34,644

 
0.33
%
 
0.38% to 2.00%
 
47.19% to 21.95%

 
2012
 
1,931
 
$1.41 to $12.76
 

$26,674

 
–%

 
0.32% to 1.85%
 
14.22% to 12.62%

 
2011
 
2,287
 
$1.24 to $11.33
 

$27,780

 
0.35
%
 
0.34% to 1.85%
 
(1.89)% to (3.25)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
SmallCap Blend Class 2
  Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015 (11)
 
86
 
$9.14 to $9.12
 

$785

 
0.09
%
 
1.15% to 1.40%
 
(7.21)% to (7.41)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
T. Rowe Price Blue Chip
  Growth Portfolio II Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
715
 
$23.96 to $22.38
 

$16,984

 
–%

 
1.40% to 2.00%
 
9.26% to 8.59%

 
2014
 
581
 
$21.93 to $20.61
 

$12,613

 
–%

 
1.40% to 2.00%
 
7.34% to 6.73%

 
2013
 
566
 
$20.43 to $19.31
 

$11,456

 
–%

 
1.40% to 2.00%
 
38.98% to 38.13%

 
2012
 
567
 
$14.70 to $13.98
 

$8,278

 
–%

 
1.25% to 1.85%
 
16.48% to 15.73%

 
2011
 
562
 
$12.62 to $12.08
 

$7,052

 
–%

 
1.25% to 1.85%
 
0.08% to (0.49)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
T. Rowe Price Health Sciences
  Portfolio II Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
725
 
$49.19 to $45.95
 

$35,403

 
–%

 
1.40% to 2.00%
 
10.89% to 10.24%

 
2014
 
686
 
$44.36 to $41.68
 

$30,107

 
–%

 
1.40% to 2.00%
 
29.40% to 28.64%

 
2013
 
631
 
$34.28 to $32.40
 

$21,393

 
–%

 
1.40% to 2.00%
 
48.59% to 47.68%

 
2012
 
515
 
$23.07 to $21.94
 

$11,743

 
–%

 
1.25% to 1.85%
 
29.32% to 28.53%

 
2011
 
439
 
$17.84 to $17.07
 

$7,738

 
–%

 
1.25% to 1.85%
 
9.05% to 8.38%

 
 
 
 
 
 
 
 
 
 
 
 
 
 

225



Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
 
 
 
 
 
 
 
For the Year Ended December 31,
 
 
 
December 31
Except as Noted
 
 
 
 
 
Unit Fair Value
 
 
 
 
 
 
 
Total Return (3)
 
 
 
 
 
Corresponding
 
 
 
 
 
Expense
 
Corresponding
 
 
 
 
 
to Lowest
 
Net
 
Investment
 
Ratio (2)
 
to Lowest
 
 
 
Units
 
to Highest
 
Assets
 
Income
 
Lowest to
 
to Highest
 
Division
 
(000's)
 
Expense Ratio
 
(000's)
 
Ratio (1)
 
Highest
 
Expense Ratio
Templeton Global Bond VIP
  Class 4 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
116
 
$9.22 to $9.34

 

$1,072

 
6.23
%
 
1.15% to 2.00%

 
(5.44)% to (6.60)%

 
2014 (10)
 
7
 
$9.75 to $9.74

 

$68

 
–%

 
1.15% to 1.40%

 
(2.30)% to (2.31)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Templeton Growth VIP
  Class 2 Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
44
 

$19.60

 

$869

 
2.66
%
 
0.85
%
 
(7.28
)%
 
2014
 
45
 

$21.14

 

$960

 
1.34
%
 
0.85
%
 
(3.65
)%
 
2013
 
49
 

$21.94

 

$1,071

 
2.65
%
 
0.85
%
 
29.82
 %
 
2012
 
61
 

$16.90

 

$1,032

 
2.23
%
 
0.85
%
 
20.28
 %
 
2011
 
69
 

$14.05

 

$964

 
1.35
%
 
0.85
%
 
(7.75
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The Merger Fund Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015 (12)
 
–
 
$9.65 to $9.64

 
$–

 
–%

 
1.15% to 1.40%

 
(3.50)% to (3.60)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Van Eck Global Hard Assets
  Class S Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
665
 
$5.00 to $7.64

 

$5,127

 
0.03
%
 
1.15% to 2.00%

 
(34.30)% to (34.92)%

 
2014
 
591
 
$7.61 to $11.74

 

$7,087

 
–%

 
1.15% to 2.00%

 
(13.82)% to (20.94)%

 
2013
 
584
 
$15.27 to $14.85

 

$8,885

 
0.49
%
 
1.30% to 2.00%

 
8.92% to 8.24%

 
2012
 
565
 
$14.02 to $13.72

 

$7,902

 
0.68
%
 
1.25% to 1.85%

 
1.82% to 1.18%

 
2011
 
559
 
$13.77 to $13.56

 

$7,688

 
0.73
%
 
1.25% to 1.85%

 
(17.74)% to (18.21)%


226



Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

(1)
These amounts represent the dividends, excluding distributions of capital gains, received by the division from the underlying mutual fund, net of management fees assessed by the fund manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that result in direct reductions in the unit values. The recognition of investment income by the division is affected by the timing of the declaration of dividends by the underlying fund in which the divisions invest. These ratios are annualized for periods less than one year.
(2)
These ratios represent the annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying fund are excluded.
(3)
These amounts represent the total return for the periods indicated, including changes in the value of the underlying fund, and reflect deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units; inclusion of these expenses in the calculation would result in a reduction in the total return presented. Investment options with a date notation indicate the effective date of that investment option in the variable account. For purposes of the total return calculation the beginning unit value is typically equal to an investment option with a similar expense structure and if no such similar investment option exists then a beginning unit value of ten would typically be used. The total return is calculated for the period indicated or from the effective date through the end of the reporting period. Total returns have not been annualized for periods less than one year. These percentages represent the range of total returns available as of the report date and correspond with the expense ratio lowest to highest.
(4)
Commencement of operations, April 27, 2012. Investment income ratios have been annualized for the period ended December 31, 2012.
(5)
Commencement of operations, May 21, 2012. Investment income ratios have been annualized for the period ended December 31, 2012.
(6)
Commencement of operations, May 20, 2013. Investment income ratios have been annualized for the period ended December 31, 2013.
(7)
Commencement of operations, December 2, 2013. Investment income ratios have been annualized for the period December 31, 2013.
(8)
Commencement of operations, April 24, 2014. Investment income ratios have been annualized for the period December 31, 2014.
(9)
Commencement of operations, May 17, 2014. Investment income ratios have been annualized for the period December 31, 2014.
(10)
Commencement of operations, November 10, 2014. Investment income ratios have been annualized for the period December 31, 2014.
(11)
Commencement of operations, April 17, 2015. Investment income ratios have been annualized for the period December 31, 2015.
(12)
Commencement of operations, May 18, 2015. Investment income ratios have been annualized for the period December 31, 2015.
(13)
Represented the operations of DWS Alternative Asset Allocation Class B Division until May 18, 2015.
(14)
Represented the operations of DWS Equity 500 Index Class B2 Division until May 18, 2015.
(15)
Represented the operations of DWS Small Mid Cap Value Class B Division until May 18, 2015.
 
 
 
 
 
 
 
 
 
 
 
 

227



Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
There are divisions that have total return outside of the ranges indicated above. The following is a list of the divisions and corresponding unit values and total return.
 
 
 
 
Division
2015 Unit
Value ($)
2015 Total
Return (%)
American Century VP Inflation Protection Class II Division
9.55 and 12.61
(3.31)
American Century VP Value Class II Division
9.59 and 20.14
–
American Funds Insurance Series New World Fund Class 2 Division
8.61 and 8.93
–
Balanced Class 1 Division
3.15 and 28.26
–
Bond & Mortgage Securities Class 1 Division
2.68, 21.34, 23.31 and 23.37
–
Deutsche Small Mid Cap Value Class B Division
9.72,11.22, 11.38 and 11.40
–
Diversified Balanced Managed Volatility Class 2 Division
9.63, 9.66, 10.02 and 10.47
(3.60) and (3.30)
Diversified Growth Managed Volatility Class 2 Division
9.56, 9.60, 10.00 and 10.54
(4.50) and (4.10)
Diversified International Class 1 Division
3.03, 24.40, 26.65 and 26.72
–
Equity Income Class 1 Division
13.45, 14.16 and 14.20
–
Fidelity VIP Contrafund Service Class 2 Division
10.06 and 22.65
–
Fidelity VIP Mid Cap Service Class 2 Division
9.75 and 25.16
–
Fidelity VIP Overseas Service Class 2 Division
9.03, 9.07, 9.60 and 16.38
(9.43) and (9.03)
Government & High Quality Bond Class 1 Division
2.66, 11.54, 12.02, 12.05, 12.32 and 12.41
–
International Emerging Markets Class 1 Division
24.73, 27.01 and 27.08
–
LargeCap Growth Class 1 Division
3.31, 27.69, 30.25 and 30.32
–
LargeCap Growth I Class 1 Division
53.28, 58.20 and 58.34
–
LargeCap S&P 500 Index Class 1 Division
14.68, 16.03, 16.07, 17.20 and 17.33
–
LargeCap Value Class 1 Division
4.95, 35.52, 38.80, 38.89 and 60.35
(1.57)
MFS VIT New Discovery Service Class Division
9.13, 10.28, 10.42 and 10.44
(9.69), (4.01), (3.52) and (3.42)
MFS VIT Utilities Service Class Division
8.23 and 19.00
–
MidCap Class 1 Division
9.14, 74.80, 81.70 and 81.89
–
Money Market Class 1 Division
1.58, 12.12, 13.23 and 13.27
–
Neuberger Berman AMT Mid-Cap Growth Portfolio S Class Division
9.18 and 9.59
(8.93) and (4.39)
PIMCO High Yield Administrative Class Division
9.58 and 13.44
–
PIMCO Total Return Administrative Class Division
10.00 and 12.43
–

228



Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
 
Division
2015 Unit
Value ($)
2015 Total
Return (%)
Principal Capital Appreciation Class 1 Division
9.73 and 9.77
(1.72) and (1.31)
Principal LifeTime Strategic Income Class 1 Division
12.82, 13.69 and 13.73
–
Principal LifeTime 2010 Class 1 Division
13.97, 14.92 and 14.96
–
Principal LifeTime 2020 Class 1 Division
15.36, 16.40 and 16.44
–
Principal LifeTime 2030 Class 1 Division
15.45, 16.50 and 16.54
–
Principal LifeTime 2040 Class 1 Division
16.10, 17.20 and 17.24
–
Principal LifeTime 2050 Class 1 Division
16.21, 17.31 and 17.35
–
Real Estate Securities Class 1 Division
48.84, 53.34 and 53.47
–
Rydex Commodities Strategy Division
4.62, 6.41 and 6.43
–
SAM Balanced Portfolio Class 1 Division
13.05, 13.71, 13.75 and 14.13
–
SmallCap Blend Class 1 Division
18.67, 20.39, 20.44 and 26.76
–
Templeton Global Bond VIP Class 4 Division
9.19, 9.35, 9.37 and 9.38
–
Van Eck Global Hard Assets Service Class Division
4.98, 7.65, 7.95 and 7.97
–
 
 
 
 
Division
2014 Unit
Value ($)
2014 Total
Return (%)
American Century VP Inflation Protection Class II Division
9.93 and 13.11
(1.10) and 1.86
American Century VP Value Class II Division
10.14 and 21.26
11.48
Balanced Class 1 Division
3.16 and 28.15
–
Bond & Mortgage Securities Class 1 Division
2.71, 21.86, 23.76 and 23.79
–
Diversified Balanced Managed Volatility Class 2 Division
10.62
5.46
Diversified Growth Managed Volatility Class 2 Division
10.68
5.53
Diversified International Class 1 Division
3.06, 24.96, 27.13 and 27.16
–
DWS Small Mid Cap Value Class B Division
10.08, 11.70, 11.80 and 11.81
3.08 and 3.69
Equity Income Class 1 Division
14.27, 14.95 and 14.97
–
Fidelity VIP Contrafund Service Class 2 Division
10.16 and 22.88
10.11
Fidelity VIP Mid Cap Service Class 2 Division
10.05 and 25.94
4.60
Fidelity VIP Overseas Service Class 2 Division
16.08
–
 
 
 
 
 
 
 
 
 

229



Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
 
Division
2014 Unit
Value ($)
2014 Total
Return (%)
Government & High Quality Bond Class 1 Division
2.65, 11.67, 12.09, 12.11, 12.34 and 12.42
–
International Emerging Markets Class 1 Division
29.24, 31.78 and 31.82
–
LargeCap Growth Class 1 Division
3.17, 26.88, 29.22 and 29.26
–
LargeCap Growth I Class 1 Division
50.39, 54.76 and 54.84
–
LargeCap S&P 500 Index Class 1 Division
14.79, 16.07, 16.10, 17.15 and 17.30
–
LargeCap Value Class 1 Division
5.03, 5.29, 9.73, 11.67, 15.70 and 17.16
10.70
MFS VIT Utilities Service Class Division
22.60
10.89
MidCap Class 1 Division
9.05, 75.00, 81.51 and 81.62
–
Money Market Class 1 Division
12.35, 13.42 and 13.44
(1.91), (1.49), (1.40), (1.32), (0.92), (0.86), (0.64) and (0.42)
PIMCO High Yield Administrative Class Division
13.86
1.91
PIMCO Total Return Administrative Class Division
12.55
2.78
Principal LifeTime Strategic Income Class 1 Division
13.20, 14.02 and 14.04
–
Principal LifeTime 2010 Class 1 Division
14.41, 15.31 and 15.33
–
Principal LifeTime 2020 Class 1 Division
15.84, 16.82 and 16.85
–
Principal LifeTime 2030 Class 1 Division
15.91, 16.91 and 16.93
–
Principal LifeTime 2040 Class 1 Division
16.55, 17.59 and 17.61
–
Principal LifeTime 2050 Class 1 Division
16.63, 17.67 and 17.70
–
Real Estate Securities Class 1 Division
47.76, 51.91 and 51.98
–
SAM Balanced Portfolio Class 1 Division
13.41, 14.02, 14.04 and 14.38
–
SAM Strategic Growth Portfolio Class 1 Division
–
6.57
SmallCap Blend Class 1 Division
19.05, 20.70, 20.73 and 27.02
–
SmallCap Growth II Class 1 Division
16.16, 16.32, 16.68, 17.56 and 17.59
–
SmallCap Value I Class 1 Division
34.27, 37.24 and 37.30
–
Division
2014 Unit
Value ($)
2014 Total
Return (%)
Van Eck Global Hard Assets Service Class Division
11.75, 12.14 and 12.16
(13.72)
 
 
 
 
 
 
 
 
 
 
 
 

230



Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
 
 
Division
2013 Unit
Value ($)
2013 Total
Return (%)
Balanced Class 1 Division
2.92 and 26.55
–
Bond & Mortgage Securities Class 1 Division
2.59, 21.17, 22.89 and 22.90
–
Diversified International Class 1 Division
3.18, 26.28, 28.42 and 28.43
–
Equity Income Class 1 Division
13.44 and 13.45
–
Franklin Small Cap Value Securities Class 2 Division
–
17.18 and 34.47
Goldman Sachs VIT Mid Cap Value Service Class I Division
–
10.09 and 31.14
Goldman Sachs VIT Structured Small Cap Equity Service Class I Division
–
13.75 and 33.92
Government & High Quality Bond Class 1 Division
11.67, 11.86, 11.92 and 2.54
–
International Emerging Markets Class 1 Division
30.96, 33.48 and 33.50
–
LargeCap Growth Class 1 Division
2.87, 24.66, 26.67 and 26.68
–
LargeCap Growth I Class 1 Division
47.28, 51.13 and 51.15
–
LargeCap S&P 500 Index Class 1 Division
13.31, 14.39, 15.27 and 15.42
–
LargeCap Value Class 1 Division
4.56, 33.55, 36.29, 36.30 and 55.42
–
MidCap Class 1 Division
8.06, 67.65, 73.16 and 73.19
–
Money Market Class 1 Division
1.60, 1.68, 2.16, 12.59, 13.61 and 13.62
–
Principal LifeTime Strategic Income Class 1 Division
13.60
–
Principal LifeTime 2010 Class 1 Division
14.81 and 14.82
–
Principal LifeTime 2020 Class 1 Division
16.14
–
Principal LifeTime 2030 Class 1 Division
15.29, 16.16 and 16.17
–
Principal LifeTime 2040 Class 1 Division
15.89, 16.79 and 16.80
–
Principal LifeTime 2050 Class 1 Division
16.88
–
Real Estate Securities Class 1 Division
36.65, 39.63 and 39.65
–
SAM Balanced Portfolio Class 1 Division
13.31, 13.32 and 13.59
16.14, 16.23 and 16.65
SmallCap Blend Class 1 Division
18.51, 20.01, 20.02 and 25.98
–

231



Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
 
 
Division
2015 Unit
Value ($)
2015 Total
Return (%)
Diversified Balanced Managed Volatility Class 2 Division
9.63, 9.66, 10.02 and 10.47
(3.60) and (3.30)
Diversified Growth Managed Volatility Class 2 Division
9.56, 9.60, 10.00 and 10.54
(4.50) and (4.10)
Diversified International Class 1 Division
3.03, 24.40, 26.65 and 26.72
–
Equity Income Class 1 Division
13.45, 14.16 and 14.20
–
Fidelity VIP Contrafund Service Class 2 Division
10.06 and 22.65
–
Fidelity VIP Mid Cap Service Class 2 Division
9.75 and 25.16
–
Fidelity VIP Overseas Service Class 2 Division
9.03, 9.07, 9.60 and 16.38
(9.43) and (9.03)
Government & High Quality Bond Class 1 Division
2.66, 11.54, 12.02, 12.05, 12.32 and 12.41
–
International Emerging Markets Class 1 Division
24.73, 27.01 and 27.08
–
LargeCap Growth Class 1 Division
3.31, 27.69, 30.25 and 30.32
–
LargeCap Growth I Class 1 Division
53.28, 58.20 and 58.34
–
LargeCap S&P 500 Index Class 1 Division
14.68, 16.03, 16.07, 17.20 and 17.33
–
LargeCap Value Class 1 Division
4.95, 35.52, 38.80 and 38.89
(1.57)
MFS VIT New Discovery Service Class Division
9.13, 10.28, 10.42 and 10.44
(9.69), (4.01), (3.52) and (3.42)
MFS VIT Utilities Service Class Division
8.23 and 19.00
–
MidCap Class 1 Division
9.14, 74.80, 81.70 and 81.89
–
Money Market Class 1 Division
1.58, 12.12, 13.23 and 13.27
–
Neuberger Berman AMT Mid-Cap Growth Portfolio S Class Division
9.18 and 9.59
(8.93) and (4.39)
PIMCO High Yield Administrative Class Division
9.58 and 13.44
–
PIMCO Total Return Administrative Class Division
10.00 and 12.43
–
Division
2015 Unit
Value ($)
2015 Total
Return (%)
Principal Capital Appreciation Class 1 Division
9.73 and 9.77
(1.72) and (1.31)
 

232



Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
 
Division
2015 Unit
Value ($)
2015 Total
Return (%)
Principal LifeTime Strategic Income Class 1 Division
12.82, 13.69 and 13.73
–
Principal LifeTime 2010 Class 1 Division
13.97, 14.92 and 14.96
–
Principal LifeTime 2020 Class 1 Division
15.36, 16.40 and 16.44
–
Principal LifeTime 2030 Class 1 Division
15.45, 16.50 and 16.54
–
Principal LifeTime 2040 Class 1 Division
16.10, 17.20 and 17.24
–
Principal LifeTime 2050 Class 1 Division
16.21, 17.31 and 17.35
–
Real Estate Securities Class 1 Division
48.84, 53.34 and 53.47
–
Rydex Commodities Strategy Division
4.62, 6.41 and 6.43
–
SAM Balanced Portfolio Class 1 Division
13.05, 13.71, 13.75 and 14.13
–
SmallCap Blend Class 1 Division
18.67, 20.39, 20.44 and 26.76
–
Templeton Global Bond VIP Class 4 Division
9.19, 9.35, 9.37 and 9.38
–
Van Eck Global Hard Assets Service Class Division
4.98, 7.65, 7.95 and 7.97
–
 
 
 
 
Division
2014 Unit
Value ($)
2014 Total
Return (%)
American Century VP Inflation Protection Class II Division
9.93 and 13.11
(1.10) and 1.86
American Century VP Value Class II Division
10.14 and 21.26
11.48
Balanced Class 1 Division
3.16 and 28.15
–
Bond & Mortgage Securities Class 1 Division
2.71, 21.86, 23.76 and 23.79
–
Diversified Balanced Managed Volatility Class 2 Division
10.62
5.46
Diversified Growth Managed Volatility Class 2 Division
10.68
5.53
Diversified International Class 1 Division
3.06, 24.96, 27.13 and 27.16
–
DWS Small Mid Cap Value Class B Division
10.08, 11.70, 11.80 and 11.81
3.08 and 3.69
Equity Income Class 1 Division
14.27, 14.95 and 14.97
–
Fidelity VIP Contrafund Service Class 2 Division
10.16 and 22.88
10.11
Fidelity VIP Mid Cap Service Class 2 Division
10.05 and 25.94
4.60
Fidelity VIP Overseas Service Class 2 Division
16.08
–
 
 
 
 
 
 
 
 
 
 
 
 

233



Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
 
Division
2014 Unit
Value ($)
2014 Total
Return (%)
Government & High Quality Bond Class 1 Division
2.65, 11.67, 12.09, 12.11, 12.34 and 12.42
–
International Emerging Markets Class 1 Division
29.24, 31.78 and 31.82
–
LargeCap Growth Class 1 Division
3.17, 26.88, 29.22 and 29.26
–
LargeCap Growth I Class 1 Division
50.39, 54.76 and 54.84
–
LargeCap S&P 500 Index Class 1 Division
14.79, 16.07, 16.10, 17.15 and 17.30
–
LargeCap Value Class 1 Division
5.03, 5.29, 9.73, 11.67, 15.70 and 17.16
10.70
MFS VIT Utilities Service Class Division
22.60
10.89
MidCap Class 1 Division
9.05, 75.00, 81.51 and 81.62
–
Money Market Class 1 Division
12.35, 13.42 and 13.44
(1.91), (1.49), (1.40), (1.32), (0.92), (0.86), (0.64) and (0.42)
PIMCO High Yield Administrative Class Division
13.86
1.91
PIMCO Total Return Administrative Class Division
12.55
2.78
Principal LifeTime Strategic Income Class 1 Division
13.20, 14.02 and 14.04
–
Principal LifeTime 2010 Class 1 Division
14.41, 15.31 and 15.33
–
Principal LifeTime 2020 Class 1 Division
15.84, 16.82 and 16.85
–
Principal LifeTime 2030 Class 1 Division
15.91, 16.91 and 16.93
–
Principal LifeTime 2040 Class 1 Division
16.55, 17.59 and 17.61
–
Principal LifeTime 2050 Class 1 Division
16.63, 17.67 and 17.70
–
Real Estate Securities Class 1 Division
47.76, 51.91 and 51.98
–
SAM Balanced Portfolio Class 1 Division
13.41, 14.02, 14.04 and 14.38
–
SAM Strategic Growth Portfolio Class 1 Division
–
6.57
SmallCap Blend Class 1 Division
19.05, 20.70, 20.73 and 27.02
–
SmallCap Growth II Class 1 Division
16.16, 16.32, 16.68, 17.56 and 17.59
–
SmallCap Value I Class 1 Division
34.27, 37.24 and 37.30
–
Division
2014 Unit
Value ($)
2014 Total
Return (%)
Van Eck Global Hard Assets Service Class Division
11.75, 12.14 and 12.16
(13.72)
 
 
 
 
 
 
 
 
 
 
 
 

234



Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
 
Division
2013 Unit
Value ($)
2013 Total
Return (%)
Balanced Class 1 Division
2.92 and 26.55
–
Bond & Mortgage Securities Class 1 Division
2.59, 21.17, 22.89 and 22.90
–
Diversified International Class 1 Division
3.18, 26.28, 28.42 and 28.43
–
Equity Income Class 1 Division
13.44 and 13.45
–
Franklin Small Cap Value Securities Class 2 Division
–
17.18 and 34.47
Goldman Sachs VIT Mid Cap Value Service Class I Division
–
10.09 and 31.14
Goldman Sachs VIT Structured Small Cap Equity Service Class I Division
–
13.75 and 33.92
Government & High Quality Bond Class 1 Division
11.67, 11.86, 11.92 and 2.54
–
International Emerging Markets Class 1 Division
30.96, 33.48 and 33.50
–
LargeCap Growth Class 1 Division
2.87, 24.66, 26.67 and 26.68
–
LargeCap Growth I Class 1 Division
47.28, 51.13 and 51.15
–
LargeCap S&P 500 Index Class 1 Division
13.31, 14.39, 15.27 and 15.42
–
LargeCap Value Class 1 Division
4.56, 33.55, 36.29, 36.30 and 55.42
–
MidCap Class 1 Division
8.06, 67.65, 73.16 and 73.19
–
Money Market Class 1 Division
1.60, 1.68, 2.16, 12.59, 13.61 and 13.62
–
Principal LifeTime Strategic Income Class 1 Division
13.60
–
Principal LifeTime 2010 Class 1 Division
14.81 and 14.82
–
Principal LifeTime 2020 Class 1 Division
16.14
–
Principal LifeTime 2030 Class 1 Division
15.29, 16.16 and 16.17
–
Principal LifeTime 2040 Class 1 Division
15.89, 16.79 and 16.80
–
Principal LifeTime 2050 Class 1 Division
16.88
–
Real Estate Securities Class 1 Division
36.65, 39.63 and 39.65
–
SAM Balanced Portfolio Class 1 Division
13.31, 13.32 and 13.59
16.14, 16.23 and 16.65
SmallCap Blend Class 1 Division
18.51, 20.01, 20.02 and 25.98
–

235



Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

Division
2013 Unit
Value ($)
2013 Total
Return (%)
SmallCap Growth II Class 1 Division
15.43, 15.78, 16.68 and 16.69
–
SmallCap Value I Class 1 Division
32.59, 35.24 and 35.26
–
 
 
 
 
Division
2012 Unit
Value ($)
2012 Total
Return (%)
Asset Allocation Class 1 Division
28.28
–
Balanced Class 1 Division
22.50
12.58
Bond & Mortgage Securities Class 1 Division
23.40
7.09
Diversified International Class 1 Division
24.24
17.94
Equity Income Class 1 Division
10.70
–
Government & High Quality Bond Class 1 Division
11.94, 12.09 and 12.14
3.48
International Emerging Markets Class 1 Division
35.58
–
LargeCap Growth Class 1 Division
20.18
16.36
LargeCap Growth I Class 1 Division
38.05
–
LargeCap S&P 500 Index Class 1 Division
11.04, 11.66 and 11.79
–
LargeCap Value Class 1 Division
28.10 and 42.56
18.01 and 18.08
MidCap Blend Class 1 Division
55.35
18.94
Money Market Class 1 Division
13.79
(1.22), (1.00), (0.94), (0.82), (0.64) and (0.42)
Principal LifeTime Strategic Income Class 1 Division
13.10
–
Principal LifeTime 2010 Class 1 Division
13.54
–
Principal LifeTime 2020 Class 1 Division
14.09
–
Principal LifeTime 2030 Class 1 Division
13.76
–
Principal LifeTime 2040 Class 1 Division
13.89
–
Principal LifeTime 2050 Class 1 Division
13.81
–
Real Estate Securities Class 1 Division
38.58
–
Short-Term Income Class 1 Division
–
4.08
SmallCap Blend Class 1 Division
13.72 and 17.72
–
SmallCap Growth II Class 1 Division
10.80 and 11.46
–
SmallCap Value I Class 1 Division
25.55
–
 
 
 
 
 
 
 
 
 
 
 
 

236



Principal Life Insurance Company

Separate Account B

Notes to Financial Statements

December 31, 2015

 
 
 
Division
2011 Unit
Value ($)
2011 Total
Return (%)
Asset Allocation Class 1 Division
25.22
–
Balanced Class 1 Division
2.19 and 20.16
–
Bond & Mortgage Securities Class 1 Division
2.46 and 22.03
–
Diversified Balanced Class 2 Division
–
2.39
Diversified Growth Class 2 Division
–
1.00
Diversified International Class 1 Division
2.30 and 20.73
–
Division
2011 Unit
Value ($)
2011 Total
Return (%)
Equity Income Class 1 Division
9.59
–
Government & High Quality Bond Class 1 Division
2.50, 11.64, 11.75 and 11.79
–
International Emerging Markets Class 1 Division
29.83
–
LargeCap Growth Class 1 Division
1.86 and 17.49
–
LargeCap Growth I Class 1 Division
33.11
–
LargeCap S&P 500 Index Class 1 Division
9.68, 10.18 and 10.30
–
LargeCap Value Class 1 Division
2.97, 3.10, 5.90, 6.97, 9.37 and 10.21
0.75
MidCap Blend Class 1 Division
5.11 and 46.92
–
Money Market Class 1 Division
1.62, 1.70, 2.23 and 13.96
(0.89), (0.78), (0.64) and (0.42)
Principal LifeTime Strategic Income Class 1 Division
12.10
–
Principal LifeTime 2010 Class 1 Division
12.27
–
Principal LifeTime 2020 Class 1 Division
12.43
–
Principal LifeTime 2030 Class 1 Division
12.06
–
Principal LifeTime 2040 Class 1 Division
12.05
–
Principal LifeTime 2050 Class 1 Division
11.95
–
Real Estate Securities Class 1 Division
33.34
–
SmallCap Blend Class 1 Division
12.11 and 15.58
–
SmallCap Growth II Class 1 Division
9.38 and 9.98
–
SmallCap Value I Class 1 Division
21.25
–
7. Subsequent Events

The account has performed an evaluation of subsequent events through April 29, 2016, and has determined that no items required recognition or disclosure.

237






























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238

 


Report of Independent Auditors
The Board of Directors and Stockholder
Principal Life Insurance Company
We have audited the accompanying consolidated financial statements of Principal Life Insurance Company (“the Company”), which comprise the consolidated statements of financial position as of December 31, 2015 and 2014, and the related consolidated statements of operations, comprehensive income, stockholder’s equity and cash flows for each of the three years in the period ended December 31, 2015, and the related notes to the consolidated financial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in conformity with U.S. generally accepted accounting principles; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free of material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Principal Life Insurance Company at December 31, 2015 and 2014, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2015, in conformity with U.S. generally accepted accounting principles.
 
/s/ Ernst & Young LLP
Des Moines, Iowa
March 11, 2016
 




239


Principal Life Insurance Company
Consolidated Statements of Financial Position
 
 
December 31, 2015
 
December 31, 2014
 
 
(in millions)
Assets
 
Fixed maturities, available-for-sale (2015 and 2014 include $257.4 million and $278.2 million related to
 
 
 
 
 
 
consolidated variable interest entities)
$
46,463.4
 
$
46,549.4
Fixed maturities, trading (2015 and 2014 both include $100.4 million related to consolidated variable
 
 
 
 
 
 
interest entities)
 
538.8
 
 
400.3
Equity securities, available-for-sale
 
101.8
 
 
108.9
Equity securities, trading
 
204.4
 
 
191.6
Mortgage loans
 
11,791.0
 
 
11,164.4
Real estate (2015 and 2014 include $354.5 million and $284.9 million related to consolidated variable
 
 
 
 
 
 
interest entities)
 
1,447.2
 
 
1,340.4
Policy loans
 
786.3
 
 
799.0
Other investments (2015 and 2014 include $29.5 million and $40.6 million related to consolidated variable
 
 
 
 
 
 
interest entities and $53.4 million and $127.2 million measured at fair value under the fair value option)
 
1,378.0
 
 
1,428.4
 
Total investments
 
62,710.9
 
 
61,982.4
Cash and cash equivalents
 
1,905.5
 
 
1,274.0
Accrued investment income
 
521.8
 
 
497.3
Premiums due and other receivables
 
1,496.2
 
 
1,134.7
Deferred acquisition costs
 
3,057.3
 
 
2,754.6
Property and equipment
 
590.6
 
 
544.8
Goodwill
 
227.5
 
 
295.8
Other intangibles
 
127.7
 
 
144.3
Separate account assets
 
94,762.8
 
 
94,328.4
Other assets
 
893.3
 
 
958.5
 
Total assets
$
166,293.6
 
$
163,914.8
Liabilities
 
 
 
 
 
Contractholder funds
$
33,151.6
 
$
33,428.3
Future policy benefits and claims
 
21,838.3
 
 
19,691.6
Other policyholder funds
 
719.5
 
 
744.2
Short-term debt
 
108.8
 
 
154.5
Long-term debt (2015 and 2014 include $42.8 million and $82.3 million related to consolidated variable
 
 
 
 
 
 
interest entities)
 
42.8
 
 
82.3
Income taxes currently payable
 
4.4
 
 
5.3
Deferred income taxes
 
892.8
 
 
1,082.8
Separate account liabilities
 
94,762.8
 
 
94,328.4
Other liabilities (2015 and 2014 include $345.9 million and $344.0 million related to consolidated variable
 
 
 
 
 
 
interest entities, of which $68.1 million and $71.0 million are measured at fair value under the fair
 
 
 
 
 
 
value option)
 
6,518.4
 
 
6,151.7
Total liabilities
 
158,039.4
 
 
155,669.1
 
 
 
 
 
 
 
Redeemable noncontrolling interest
 
—
 
 
21.1
 
 
 
 
 
 
 
Stockholder's equity
 
 
 
 
 
Common stock, par value $1.00 per share - 5.0 million shares authorized, 2.5 million shares issued
 
 
 
 
 
 
and outstanding (wholly owned indirectly by Principal Financial Group, Inc.)
 
2.5
 
 
2.5
Additional paid-in capital
 
5,334.4
 
 
5,275.0
Retained earnings
 
2,232.6
 
 
1,817.2
Accumulated other comprehensive income
 
641.3
 
 
1,086.7
 
Total stockholder's equity attributable to Principal Life Insurance Company
 
8,210.8
 
 
8,181.4
Noncontrolling interest
 
43.4
 
 
43.2
 
Total stockholder's equity
 
8,254.2
 
 
8,224.6
 
Total liabilities and stockholder's equity
$
166,293.6
 
$
163,914.8
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 
 

240


Principal Life Insurance Company
 
Consolidated Statements of Operations
 
 
 
 
 
For the year ended December 31,
 
 
 
2,015
 
2,014
 
2,013
 
 
 
(in millions)
 
Revenues
 
 
 
 
Premiums and other considerations
$
5,057.4
 
 
$
3,497.2
 
 
$
2,862.4
 
 
Fees and other revenues
 
2,537.3
 
 
 
2,392.7
 
 
 
2,234.6
 
 
Net investment income
 
2,552.0
 
 
 
2,663.5
 
 
 
2,681.5
 
 
Net realized capital gains (losses), excluding impairment losses on
 
 
 
 
 
 
 
 
 
 
available-for-sale securities
 
4.0
 
 
 
136.4
 
 
 
(99.5
)
 
Net other-than-temporary impairment (losses) recoveries on available-
 
 
 
 
 
 
 
 
 
 
for-sale securities
 
(0.8
)
 
 
28.5
 
 
 
(89.8
)
 
Other-than-temporary impairment losses on fixed maturities,
 
 
 
 
 
 
 
 
 
 
available-for-sale reclassified from other comprehensive
 
 
 
 
 
 
 
 
 
 
income
 
(29.2
)
 
 
(102.2
)
 
 
(22
)
 
Net impairment losses on available-for-sale securities
 
(30
)
 
 
(73.7
)
 
 
(111.8
)
 
Net realized capital gains (losses)
 
(26
)
 
 
62.7
 
 
 
(211.3
)
 
 
Total revenues
 
10,120.7
 
 
 
8,616.1
 
 
 
7,567.2
 
 
Expenses
 
 
 
 
 
 
 
 
 
Benefits, claims and settlement expenses
 
6,135.1
 
 
 
4,610.0
 
 
 
4,114.5
 
 
Dividends to policyholders
 
163.5
 
 
 
177.4
 
 
 
189.0
 
 
Operating expenses
 
2,598.8
 
 
 
2,603.2
 
 
 
2,376.3
 
 
 
Total expenses
 
8,897.4
 
 
 
7,390.6
 
 
 
6,679.8
 
 
Income before income taxes
 
1,223.3
 
 
 
1,225.5
 
 
 
887.4
 
 
Income taxes
 
281.9
 
 
 
243.0
 
 
 
173.2
 
 
Net income
 
941.4
 
 
 
982.5
 
 
 
714.2
 
 
Net income attributable to noncontrolling interest
 
10.8
 
 
 
30.0
 
 
 
17.6
 
 
Net income attributable to Principal Life Insurance Company
$
930.6
 
 
$
952.5
 
 
$
696.6
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 
 
 
 
 
 

241


Principal Life Insurance Company
Consolidated Statements of Comprehensive Income
 
 
 
 
 
 
 
For the year ended December 31,
 
 
 
2,015
 
2,014
 
2,013
 
 
 
(in millions)
Net income
$
941.4
 
 
$
982.5
 
 
$
714.2
 
Other comprehensive income (loss), net:
 
 
 
 
 
 
 
 
 
Net unrealized gains (losses) on available-for-sale securities
 
(447.7
)
 
 
261.2
 
 
 
(477.7
)
 
Noncredit component of impairment losses on fixed maturities, available-for-sale
 
18.8
 
 
 
61.9
 
 
 
5.1
 
 
Net unrealized gains (losses) on derivative instruments
 
14.3
 
 
 
56.6
 
 
 
(6.5
)
 
Foreign currency translation adjustment
 
(0.1
)
 
 
(3.7
)
 
 
—
 
 
Net unrecognized postretirement benefit obligation
 
(30.8
)
 
 
(8
)
 
 
332.6
 
Other comprehensive income (loss)
 
(445.5
)
 
 
368.0
 
 
 
(146.5
)
Comprehensive income
 
495.9
 
 
 
1,350.5
 
 
 
567.7
 
Comprehensive income attributable to noncontrolling interest
 
10.7
 
 
 
28.7
 
 
 
18.0
 
Comprehensive income attributable to Principal Life Insurance Company
$
485.2
 
 
$
1,321.8
 
 
$
549.7
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 
 
 
 
 


242


Principal Life Insurance Company
Consolidated Statements of Stockholder's Equity
 
 
 
 
 
 
 
 
 
 
Accumulated
 
 
 
 
 
 
 
 
 
Additional
 
 
 
other
 
 
 
Total
 
 
 
Common
 
paid-in
 
Retained
 
comprehensive
 
Noncontrolling
 
stockholder's
 
 
 
stock
 
capital
 
earnings
 
income
 
interest
 
equity
 
 
 
(in millions)
Balances at January 1, 2013
$
2.5
 
$
5,747.6
 
$
1,167.7
 
$
642.6
 
$
16.9
 
$
7,577.3
Capital distribution to parent
 
—
 
 
(163.8)
 
 
—
 
 
—
 
 
—
 
 
(163.8)
Stock-based compensation and
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
additional related tax benefits
 
—
 
 
47.4
 
 
(2.9)
 
 
—
 
 
—
 
 
44.5
Dividends to parent
 
—
 
 
—
 
 
(80.0)
 
 
—
 
 
—
 
 
(80.0)
Distributions to noncontrolling interest
 
—
 
 
—
 
 
—
 
 
—
 
 
(2.0)
 
 
(2.0)
Contributions from noncontrolling
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
interest
 
—
 
 
—
 
 
—
 
 
—
 
 
2.5
 
 
2.5
Sale of subsidiary shares to noncontrolling interest
 
—
 
 
11.5
 
 
—
 
 
—
 
 
20.3
 
 
31.8
Adjustments to redemption amount of redeemable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
noncontrolling interest
 
—
 
 
(137.7)
 
 
(43.3)
 
 
—
 
 
(3.5)
 
 
(184.5)
Net income (excludes $13.6 million attributable to
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
redeemable noncontrolling interest)
 
—
 
 
—
 
 
696.6
 
 
—
 
 
4.0
 
 
700.6
Other comprehensive loss (excludes $0.4 million
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
attributable to redeemable noncontrolling interest)
 
—
 
 
—
 
 
—
 
 
(146.9)
 
 
—
 
 
(146.9)
Balances at December 31, 2013
 
2.5
 
 
5,505.0
 
 
1,738.1
 
 
495.7
 
 
38.2
 
 
7,779.5
Capital distribution to parent
 
—
 
 
(17.7)
 
 
—
 
 
—
 
 
—
 
 
(17.7)
Stock-based compensation and additional related
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
tax benefits
 
—
 
 
50.3
 
 
(3.7)
 
 
—
 
 
—
 
 
46.6
Dividends to parent
 
—
 
 
—
 
 
(850.0)
 
 
—
 
 
—
 
 
(850.0)
Distributions to noncontrolling interest
 
—
 
 
—
 
 
—
 
 
—
 
 
(22.7)
 
 
(22.7)
Contributions from noncontrolling interest
 
—
 
 
—
 
 
—
 
 
—
 
 
7.4
 
 
7.4
Adjustments to redemption amount of redeemable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
noncontrolling interest
 
—
 
 
(14.9)
 
 
(19.7)
 
 
—
 
 
—
 
 
(34.6)
Pension plan transfer due to change in sponsorship
 
—
 
 
(247.7)
 
 
—
 
 
221.7
 
 
—
 
 
(26.0)
Net income (excludes $9.7 million attributable to
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
redeemable noncontrolling interest)
 
—
 
 
—
 
 
952.5
 
 
—
 
 
20.3
 
 
972.8
Other comprehensive income (excludes $(1.3) million
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
attributable to redeemable noncontrolling interest)
 
—
 
 
—
 
 
—
 
 
369.3
 
 
—
 
 
369.3
Balances at December 31, 2014
 
2.5
 
 
5,275.0
 
 
1,817.2
 
 
1,086.7
 
 
43.2
 
 
8,224.6
Capital distribution to parent
 
—
 
 
(25.5)
 
 
—
 
 
—
 
 
—
 
 
(25.5)
Stock-based compensation and additional related
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
tax benefits
 
—
 
 
57.0
 
 
(3.9)
 
 
—
 
 
0.1
 
 
53.2
Transfer to affiliate
 
—
 
 
44.4
 
 
(8.2)
 
 
—
 
 
—
 
 
36.2
Dividends to parent
 
—
 
 
—
 
 
(503.1)
 
 
—
 
 
—
 
 
(503.1)
Distributions to noncontrolling interest
 
—
 
 
—
 
 
—
 
 
—
 
 
(14.1)
 
 
(14.1)
Contributions from noncontrolling interest
 
—
 
 
—
 
 
—
 
 
—
 
 
7.7
 
 
7.7
Purchase of subsidiary shares from noncontrolling
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
interest
 
—
 
 
(16.5)
 
 
—
 
 
—
 
 
(3.5)
 
 
(20.0)
Net income (excludes $0.8 million attributable to
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
redeemable noncontrolling interest)
 
—
 
 
—
 
 
930.6
 
 
—
 
 
10.0
 
 
940.6
Other comprehensive loss (excludes $(0.1) million
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
attributable to redeemable noncontrolling interest)
 
—
 
 
—
 
 
—
 
 
(445.4)
 
 
—
 
 
(445.4)
Balances at December 31, 2015
$
2.5
 
$
5,334.4
 
$
2,232.6
 
$
641.3
 
$
43.4
 
$
8,254.2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


243


Principal Life Insurance Company
 
 
Consolidated Statements of Cash Flows
 
 
 
 
For the year ended December 31,
 
 
 
 
2015
 
2014
 
2013
 
 
 
 
(in millions)
 
 
Operating activities
 
 
 
 
 
 
 
 
 
 
Net income
$
941.4
 
 
$
982.5
 
$
714.2
 
 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
 
 
 
 
 
 
Amortization of deferred acquisition costs
 
251.7
 
 
 
348.5
 
 
170.6
 
 
 
Additions to deferred acquisition costs
 
(356.5)
 
 
 
(347.4)
 
 
(393.0)
 
 
 
Accrued investment income
 
(24.5)
 
 
 
25.9
 
 
52.8
 
 
 
Net cash flows for trading securities
 
(166.3)
 
 
 
14.4
 
 
18.5
 
 
 
Premiums due and other receivables
 
(202.6)
 
 
 
34.5
 
 
(152.7)
 
 
 
Contractholder and policyholder liabilities and dividends
 
2,924.9
 
 
 
1,488.2
 
 
1,296.8
 
 
 
Current and deferred income taxes
 
100.2
 
 
 
239.3
 
 
187.6
 
 
 
Net realized capital (gains) losses
 
26.0
 
 
 
(62.7)
 
 
211.3
 
 
 
Depreciation and amortization expense
 
110.3
 
 
 
107.1
 
 
96.8
 
 
 
Mortgage loans held for sale, sold or repaid, net of gain
 
—
 
 
 
43.3
 
 
0.2
 
 
 
Real estate acquired through operating activities
 
(43.9)
 
 
 
(49.4)
 
 
(107.2)
 
 
 
Real estate sold through operating activities
 
51.9
 
 
 
158.0
 
 
20.1
 
 
 
Stock-based compensation
 
53.4
 
 
 
47.5
 
 
45.1
 
 
 
Other
 
640.2
 
 
 
172.3
 
 
324.1
 
 
Net adjustments
 
3,364.8
 
 
 
2,219.5
 
 
1,771.0
 
 
Net cash provided by operating activities
 
4,306.2
 
 
 
3,202.0
 
 
2,485.2
 
 
Investing activities
 
 
 
 
 
 
 
 
 
 
Available-for-sale securities:
 
 
 
 
 
 
 
 
 
 
 
Purchases
 
(9,314.6)
 
 
 
(8,598.2)
 
 
(8,554.0)
 
 
 
Sales
 
1,069.5
 
 
 
2,100.1
 
 
1,521.4
 
 
 
Maturities
 
6,475.9
 
 
 
6,047.1
 
 
7,142.4
 
 
Mortgage loans acquired or originated
 
(2,177.2)
 
 
 
(2,081.6)
 
 
(2,049.5)
 
 
Mortgage loans sold or repaid
 
1,532.7
 
 
 
1,671.6
 
 
1,989.0
 
 
Real estate acquired
 
(322.0)
 
 
 
(281.7)
 
 
(85.6)
 
 
Net purchases of property and equipment
 
(128.7)
 
 
 
(117.9)
 
 
(51.2)
 
 
Net change in other investments
 
203.8
 
 
 
266.2
 
 
213.0
 
 
Net cash provided by (used in) investing activities
 
(2,660.6)
 
 
 
(994.4)
 
 
125.5
 
 
Financing activities
 
 
 
 
 
 
 
 
 
 
Proceeds from financing element derivatives
 
0.3
 
 
 
15.1
 
 
47.0
 
 
Payments for financing element derivatives
 
(82.0)
 
 
 
(58.0)
 
 
(48.0)
 
 
Excess tax benefits from share-based payment arrangements
 
11.0
 
 
 
6.8
 
 
7.4
 
 
Purchase of subsidiary shares from noncontrolling interest
 
(21.7)
 
 
 
(179.9)
 
 
—
 
 
Sale of subsidiary shares to noncontrolling interest
 
—
 
 
 
—
 
 
31.8
 
 
Dividends paid to parent
 
(503.1)
 
 
 
(850.0)
 
 
(80.0)
 
 
Capital contributions from (distributions to) parent
 
18.9
 
 
 
(17.7)
 
 
(163.8)
 
 
Issuance of long-term debt
 
13.2
 
 
 
38.5
 
 
38.2
 
 
Principal repayments of long-term debt
 
(52.6)
 
 
 
(100.1)
 
 
(14.6)
 
 
Net proceeds from (repayments of) short-term borrowings
 
(45.7)
 
 
 
(137.9)
 
 
5.7
 
 
Investment contract deposits
 
6,214.8
 
 
 
5,349.1
 
 
6,355.1
 
 
Investment contract withdrawals
 
(6,655.5)
 
 
 
(7,088.8)
 
 
(8,846.6)
 
 
Net increase (decrease) in banking operation deposits
 
91.1
 
 
 
30.7
 
 
(225.7)
 
 
Other
 
(2.8)
 
 
 
(13.0)
 
 
(4.7)
 
 
Net cash used in financing activities
 
(1,014.1)
 
 
 
(3,005.2)
 
 
(2,898.2)
 
 
Net increase (decrease) in cash and cash equivalents
 
631.5
 
 
 
(797.6)
 
 
(287.5)
 
 
Cash and cash equivalents at beginning of period
 
1,274.0
 
 
 
2,071.6
 
 
2,359.1
 
 
Cash and cash equivalents at end of period
$
1,905.5
 
 
$
1,274.0
 
$
2,071.6
 
 
Supplemental Information:
 
 
 
 
 
 
 
 
 
 
Cash paid for interest
$
0.1
 
 
$
5.3
 
$
9.2
 
 
Cash paid for income taxes
$
154.5
 
 
$
9.0
 
$
19.6
 
 
Supplemental disclosure of non-cash investing and financing activities:
 
 
 
 
 
 
 
 
 
 
Note receivable from parent in consideration of subsidiaries transferred to parent
$
156.0
 
 
$
—
 
$
—
 
 
Assets transferred to parent due to change in pension plan sponsorship
$
—
 
 
$
308.2
 
$
—
 
 
Liabilities assumed by parent due to change in pension plan sponsorship
$
—
 
 
$
(282.2)
 
$
—
 
 
See accompanying notes.
 
 
 
 
 
 
 
 
 
 

244



Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

1. Nature of Operations and Significant Accounting Policies
Description of Business
Principal Life Insurance Company (“PLIC”) along with its consolidated subsidiaries is a diversified financial services organization offering businesses, individuals and institutional clients a wide range of financial products and services, including retirement, asset management and insurance in the U.S. We are a direct wholly owned subsidiary of Principal Financial Services, Inc. (“PFSI”), which in turn is a direct wholly owned subsidiary of Principal Financial Group, Inc. (“PFG”).
Basis of Presentation
The accompanying consolidated financial statements include the accounts of PLIC and all other entities in which we directly or indirectly have a controlling financial interest as well as those variable interest entities (“VIEs”) in which we are the primary beneficiary. Entities in which we have significant management influence over the operating and financing decisions but are not required to consolidate, other than investments accounted for at fair value under the fair value option, are reported using the equity method. The consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). All significant intercompany accounts and transactions have been eliminated.
In the fourth quarter of 2015 we implemented changes to our organizational structure to better align businesses, distribution teams and product offerings for future growth. The Retirement and Investor Services segment has been renamed to Retirement and Income Solutions. Additionally, information used by our chief operating decision maker in assessing segment performance has changed to pre-tax operating earnings. Our segment results have been modified to reflect these changes. See Note 17, Segment Information, for financial results of our segments.
We have evaluated subsequent events through March 11, 2016, which was the date our consolidated financial statements were issued.
Recent Accounting Pronouncements
 
 
 
 
 
 
 
 
 
 
 
 
 
Effect on our consolidated
 
 
 
 
Date of
 
financial statements or
Description
 
adoption
 
other significant matters
 
 
 
 
 
 
 
Standards not yet adopted:
Financial instruments - recognition and measurements
January 1,
We are currently evaluating
This authoritative guidance addresses certain aspects of recognition,
2018
the impact this guidance
measurement, presentation and disclosure of financial instruments. The
 
 
will have on our
primary focus of this guidance is to supersede the guidance to classify
 
 
consolidated financial
equity securities with readily determinable fair values into different categories
 
 
statements.
(trading or available-for-sale) and requires equity securities to be measured
 
 
 
at fair value with changes in the fair value recognized through net income.
 
 
 
This guidance requires adoption through a cumulative-effect adjustment to
 
 
 
the balance sheet as of the beginning of the fiscal year of adoption.
 
 
 
 
 
 
 
 
 
 
Revenue recognition
January 1,
We are currently evaluating
This authoritative guidance replaces all general and most industry specific
2018
the impact this guidance
revenue recognition guidance currently prescribed by U.S. GAAP. The core
 
 
will have on our
principle is that an entity recognizes revenue to reflect the transfer of a
 
 
consolidated financial
promised good or service to customers in an amount that reflects the
 
 
statements.
consideration to which the entity expects to be entitled in exchange for that
 
 
 
good or service. The guidance may be applied using one of the following
 
 
 
two methods: (1) retrospectively to each prior reporting period presented,
 
 
 
or (2) retrospectively with the cumulative effect of initially applying the
 
 
 
standard recognized at the date of initial application.
 
 
 
 
 
 
 
 
 
 

245


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015
 
 
 
 
 
 
Effect on our consolidated
 
 
 
 
Date of
 
financial statements or
Description
 
adoption
 
other significant matters
Short-duration insurance contracts
December 31,
We are currently evaluating
This authoritative guidance requires additional disclosures related to short-
2016
the impact this guidance
duration insurance contracts. Retrospective application through comparative
 
 
will have on our
disclosures is required.
 
 
consolidated financial
 
 
 
statements.
 
 
 
 
 
 
 
Net asset value per share as a practical expedient for fair value
January 1,
The guidance will be
This authoritative guidance removes the requirement to categorize within the
2016
adopted retrospectively
fair value hierarchy all investments for which fair value is measured using the
 
 
and will not have a material
net asset value per share practical expedient.
 
 
impact on our consolidated
 
 
 
 
 
 
financial statements.
 
 
 
 
 
 
 
Simplifying the presentation of debt issuance costs
January 1,
The guidance will be
This authoritative guidance requires debt issuance costs related to a
2016
adopted retrospectively
recognized debt liability to be presented in the balance sheet as a direct
 
 
and will not have a material
deduction from the carrying amount of that debt liability, consistent with
 
 
impact on our consolidated
debt discounts.
 
 
financial statements.
 
 
 
 
 
 
 
Consolidations
January 1,
The guidance will be
This authoritative guidance makes changes to both the variable interest
2016
adopted using the modified
and voting interest consolidation models and eliminates the investment
 
 
retrospective approach
company deferral for portions of the variable interest model. The amendments
 
 
on January 1, 2016, and will
in the standard impact the consolidation analysis for interests in investment
 
 
not have a significant
companies and limited partnerships and similar entities.
 
 
impact to our consolidated
 
 
 
 
 
 
financial statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Standards adopted:
 
 
 
 
 
 
Discontinued operations
January 1,
This guidance was adopted
This authoritative guidance amends the definition of discontinued
2015
prospectively and did not
operations and requires entities to provide additional disclosures associated
 
 
have a material impact on
with discontinued operations, as well as disposal transactions that do not
 
 
our consolidated financial
meet the discontinued operations criteria. The guidance requires discontinued
 
 
statements.
operations treatment for disposals of a component or group of components of
 
 
 
an entity that represents a strategic shift that has or will have a major impact
 
 
 
on an entity’s operations or financial results. The guidance also expands the
 
 
 
scope to disposals of equity method investments and businesses that, upon
 
 
 
initial acquisition, qualify as held for sale.
 
 
 
 
 
 
 
 
 
 
Fair value of financial assets and liabilities of a consolidated collateralized
January 1,
This guidance was adopted
financing entity
2015
using a modified
This authoritative guidance provides a measurement alternative for a
 
 
retrospective approach and
reporting entity to measure both the financial assets and financial liabilities
 
 
did not have a material
of consolidated collateralized financing entities ("CCFEs") using the more
 
 
impact on our consolidated
observable of the fair value of the financial assets or of the financial liabilities
 
 
financial statements.
for both the financial assets and financial liabilities.
 
 
 
 
 
 
 
 
 
See Note 15, Fair Value
 
 
 
 
 
 
Measurements, for further
 
 
 
 
 
 
details.
 
 
 
 
 
 
 


246


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015
 
 
 
 
 
 
Effect on our consolidated
 
 
 
 
Date of
 
financial statements or
Description
 
adoption
 
other significant matters
Foreign currency cumulative translation adjustment
January 1,
The guidance was adopted
This authoritative guidance clarifies how the cumulative translation
2014
prospectively and did not
adjustment related to a parent’s investment in a foreign entity should be
 
 
have a material impact on
released when certain transactions related to the foreign entity occur.
 
 
our consolidated
 
 
 
 
 
 
financial statements.
 
 
 
 
 
 
 
Accumulated other comprehensive income
January 1,
See Note 14, Stockholder's
This authoritative guidance requires entities to disclose additional
2013
Equity, for further details.
information about items reclassified out of accumulated other comprehensive
 
 
income (“AOCI”). Entities are required to disclose information regarding
 
The guidance was adopted
changes in AOCI balances by component and significant items reclassified
 
retrospectively and did not
out of AOCI by component either on the face of the income statement or as
 
 
have a material impact on
a separate footnote to the financial statements.
 
 
our consolidated financial
 
 
 
 
 
 
statements.
 
 
 
 
 
 
 

Use of Estimates in the Preparation of Financial Statements
The preparation of our consolidated financial statements and accompanying notes requires management to make estimates and assumptions that affect the amounts reported and disclosed. These estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed in the consolidated financial statements and accompanying notes. The most critical estimates include those used in determining:
 
•
the fair value of investments in the absence of quoted market values;
•
investment impairments and valuation allowances;
•
the fair value of and accounting for derivatives;
•
the deferred acquisition costs (“DAC”) and other actuarial balances where the amortization is based on estimated gross profits;
•
the measurement of goodwill, indefinite lived intangible assets, finite lived intangible assets and related impairments or amortization, if any;
•
the liability for future policy benefits and claims;
•
the value of our pension and other postretirement benefit obligations and
•
accounting for income taxes and the valuation of deferred tax assets.

A description of such critical estimates is incorporated within the discussion of the related accounting policies that follow. In applying these policies, management makes subjective and complex judgments that frequently require estimates about matters that are inherently uncertain. Many of these policies, estimates and related judgments are common in the insurance and financial services industries; others are specific to our businesses and operations. Actual results could differ from these estimates.

Closed Block
We operate a closed block (“Closed Block”) for the benefit of individual participating dividend‑paying policies in force at the time of the 1998 mutual insurance holding company (“MIHC”) formation. See Note 7, Closed Block, for further details.

Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, money market instruments and other debt issues with a maturity date of three months or less when purchased.


247


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

Investments
Fixed maturities include bonds, asset-backed securities (“ABS”), redeemable preferred stock and certain nonredeemable preferred securities. Equity securities include mutual funds, common stock and nonredeemable preferred stock. We classify fixed maturities and equity securities as either available-for-sale or trading at the time of the purchase and, accordingly, carry them at fair value. See Note 15, Fair Value Measurements, for methodologies related to the determination of fair value. Unrealized gains and losses related to available-for-sale securities, excluding those in fair value hedging relationships, are reflected in stockholder’s equity, net of adjustments associated with DAC and related actuarial balances, derivatives in cash flow hedge relationships and applicable income taxes. Unrealized gains and losses related to hedged portions of available-for-sale securities in fair value hedging relationships and mark-to-market adjustments on certain trading securities are reflected in net realized capital gains (losses). Mark-to-market adjustments related to certain securities carried at fair value with an investment objective to realize economic value through mark-to-market changes are reflected in net investment income.
The cost of fixed maturities is adjusted for amortization of premiums and accrual of discounts, both computed using the interest method. The cost of fixed maturities and equity securities classified as available-for-sale is adjusted for declines in value that are other than temporary. Impairments in value deemed to be other than temporary are primarily reported in net income as a component of net realized capital gains (losses), with noncredit impairment losses for certain fixed maturities, available-for-sale reported in other comprehensive income (“OCI”). Interest income, as well as prepayment fees and the amortization of the related premium or discount, is reported in net investment income. For loan-backed and structured securities, we recognize income using a constant effective yield based on currently anticipated cash flows.
Real estate investments are reported at cost less accumulated depreciation. The initial cost basis of properties acquired through loan foreclosures are the lower of the fair market values of the properties at the time of foreclosure or the outstanding loan balance. Buildings and land improvements are generally depreciated on the straight-line method over the estimated useful life of improvements and tenant improvement costs are depreciated on the straight-line method over the term of the related lease. We recognize impairment losses for properties when indicators of impairment are present and a property's expected undiscounted cash flows are not sufficient to recover the property's carrying value. In such cases, the cost basis of the properties are reduced to fair value. Real estate expected to be disposed is carried at the lower of cost or fair value, less cost to sell, with valuation allowances established accordingly and depreciation no longer recognized. The carrying amount of real estate held for sale was $166.8 million and $171.8 million as of December 31, 2015 and 2014, respectively. Any impairment losses and any changes in valuation allowances are reported in net income.
Commercial and residential mortgage loans are generally reported at cost adjusted for amortization of premiums and accrual of discounts, computed using the interest method, net of valuation allowances. Interest income is accrued on the principal amount of the loan based on the loan’s contractual interest rate. Interest income, as well as prepayment of fees and the amortization of the related premium or discount, is reported in net investment income. Any changes in the valuation allowances are reported in net income as net realized capital gains (losses). We measure impairment based upon the difference between carrying value and estimated value less cost to sell. Estimated value is based on either the present value of expected cash flows discounted at the loan's effective interest rate, the loan's observable market price or the fair value of the collateral. If foreclosure is probable, the measurement of any valuation allowance is based upon the fair value of the collateral.    
Net realized capital gains and losses on sales of investments are determined on the basis of specific identification. In general, in addition to realized capital gains and losses on investment sales and periodic settlements on derivatives not designated as hedges, we report gains and losses related to the following in net realized capital gains (losses): other-than-temporary impairments of securities and subsequent realized recoveries, mark-to-market adjustments on certain trading securities, mark-to-market adjustments on certain seed money investments, fair value hedge and cash flow hedge ineffectiveness, mark-to-market adjustments on derivatives not designated as hedges, changes in the mortgage loan valuation allowance provision, impairments of real estate held for investment and impairments on equity method investments. Investment gains and losses on sales of certain real estate held for sale due to investment strategy and mark-to-market adjustments on certain securities carried at fair value with an investment objective to realize economic value through mark-to-market changes are reported as net investment income and are excluded from net realized capital gains (losses).
Policy loans and other investments are primarily reported at cost, excluding seed money investments, other investment funds, derivative assets, commercial mortgage loans of consolidated VIEs for which the fair value option was elected and equity method real estate investments for which the fair value option was elected.

248


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

Derivatives
Overview. Derivatives are financial instruments whose values are derived from interest rates, foreign exchange rates, financial indices or the values of securities. Derivatives generally used by us include interest rate swaps, interest rate options, swaptions, futures, currency swaps, equity options, credit default swaps and total return swaps. Derivatives may be exchange traded, cleared through centralized clearinghouses or contracted in the over-the-counter market without being cleared. Derivative positions are either assets or liabilities in the consolidated statements of financial position and are measured at fair value, generally by obtaining quoted market prices or through the use of pricing models. See Note 15, Fair Value Measurements, for policies related to the determination of fair value. Fair values can be affected by changes in interest rates, foreign exchange rates, financial indices, values of securities, credit spreads, and market volatility and liquidity.
Accounting and Financial Statement Presentation. We designate derivatives as either:
(a)
a hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment, including those denominated in a foreign currency (“fair value hedge”);
(b)
a hedge of a forecasted transaction or the exposure to variability of cash flows to be received or paid related to a recognized asset or liability, including those denominated in a foreign currency (“cash flow hedge”) or
(c)
a derivative not designated as a hedging instrument.
Our accounting for the ongoing changes in fair value of a derivative depends on the intended use of the derivative and the designation, as described above, and is determined when the derivative contract is entered into or at the time of redesignation. Hedge accounting is used for derivatives that are specifically designated in advance as hedges and that reduce our exposure to an indicated risk by having a high correlation between changes in the value of the derivatives and the items being hedged at both the inception of the hedge and throughout the hedge period.
Fair Value Hedges. When a derivative is designated as a fair value hedge and is determined to be highly effective, changes in its fair value, along with changes in the fair value of the hedged asset, liability or firm commitment attributable to the hedged risk, are reported in net realized capital gains (losses). Any difference between the net change in fair value of the derivative and the hedged item represents hedge ineffectiveness.
Cash Flow Hedges. When a derivative is designated as a cash flow hedge and is determined to be highly effective, changes in its fair value are recorded as a component of OCI. Any hedge ineffectiveness is recorded immediately in net income. At the time the variability of cash flows being hedged impacts net income, the related portion of deferred gains or losses on the derivative instrument is reclassified and reported in net income.
Non-Hedge Derivatives. If a derivative does not qualify or is not designated for hedge accounting, all changes in fair value are reported in net income without considering the changes in the fair value of the economically associated assets or liabilities.
Hedge Documentation and Effectiveness Testing. At inception, we formally document all relationships between hedging instruments and hedged items, as well as our risk management objective and strategy for undertaking various hedge transactions. This process includes associating all derivatives designated as fair value or cash flow hedges with specific assets or liabilities on the statement of financial position or with specific firm commitments or forecasted transactions. Effectiveness of the hedge is formally assessed at inception and throughout the life of the hedging relationship. Even if a derivative is highly effective and qualifies for hedge accounting treatment, the hedge might have some ineffectiveness.
We use qualitative and quantitative methods to assess hedge effectiveness. Qualitative methods may include monitoring changes to terms and conditions and counterparty credit ratings. Quantitative methods may include statistical tests including regression analysis and minimum variance and dollar offset techniques.
Termination of Hedge Accounting. We prospectively discontinue hedge accounting when (1) the criteria to qualify for hedge accounting is no longer met, e.g., a derivative is determined to no longer be highly effective in offsetting the change in fair value or cash flows of a hedged item; (2) the derivative expires, is sold, terminated or exercised or (3) we remove the designation of the derivative being the hedging instrument for a fair value or cash flow hedge.
If it is determined that a derivative no longer qualifies as an effective hedge, the derivative will continue to be carried on the consolidated statements of financial position at its fair value, with changes in fair value recognized prospectively in net realized capital gains (losses). The asset or liability under a fair value hedge will no longer be adjusted for changes in fair value pursuant to hedging

249


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

rules and the existing basis adjustment is amortized to the consolidated statements of operations line associated with the asset or liability. The component of AOCI related to discontinued cash flow hedges that are no longer highly effective is amortized to the consolidated statements of operations consistent with the net income impacts of the original hedged cash flows. If a cash flow hedge is discontinued because it is probable the hedged forecasted transaction will not occur, the deferred gain or loss is immediately reclassified from AOCI into net income.

Embedded Derivatives. We purchase and issue certain financial instruments and products that contain a derivative that is embedded in the financial instrument or product. We assess whether this embedded derivative is clearly and closely related to the asset or liability that serves as its host contract. If we deem that the embedded derivative's terms are not clearly and closely related to the host contract, and a separate instrument with the same terms would qualify as a derivative instrument, the derivative is bifurcated from that contract and held at fair value on the consolidated statements of financial position, with changes in fair value reported in net income.

Contractholder and Policyholder Liabilities
Contractholder and policyholder liabilities (contractholder funds, future policy benefits and claims and other policyholder funds) include reserves for investment contracts and reserves for universal life, term life insurance, participating traditional individual life insurance, group life insurance, health insurance and disability income policies, as well as a provision for dividends on participating policies.
Investment contracts are contractholders' funds on deposit with us and generally include reserves for pension and annuity contracts. Reserves on investment contracts are equal to the cumulative deposits less any applicable charges and withdrawals plus credited interest. Reserves for universal life insurance contracts are equal to cumulative deposits less charges plus credited interest, which represents the account balances that accrue to the benefit of the policyholders.
We hold additional reserves on certain long duration contracts where benefit features result in gains in early years followed by losses in later years, universal life/variable universal life contracts that contain no lapse guarantee features, or annuities with guaranteed minimum death benefits.
Reserves for nonparticipating term life insurance and disability income contracts are computed on a basis of assumed investment yield, mortality, morbidity and expenses, including a provision for adverse deviation, which generally varies by plan, year of issue and policy duration. Investment yield is based on our experience. Mortality, morbidity and withdrawal rate assumptions are based on our experience and are periodically reviewed against both industry standards and experience.
Reserves for participating life insurance contracts are based on the net level premium reserve for death and endowment policy benefits. This net level premium reserve is calculated based on dividend fund interest rates and mortality rates guaranteed in calculating the cash surrender values described in the contract.
Participating business represented approximately 9%, 11% and 12% of our life insurance in force and 36%, 40% and 43% of the number of life insurance policies in force at December 31, 2015, 2014 and 2013, respectively. Participating business represented approximately 49%, 53% and 58% of life insurance premiums for the years ended December 31, 2015, 2014 and 2013, respectively. The amount of dividends to policyholders is declared annually by our Board of Directors. The amount of dividends to be paid to policyholders is determined after consideration of several factors including interest, mortality, morbidity and other expense experience for the year and judgment as to the appropriate level of statutory surplus to be retained by us. At the end of the reporting period, we established a dividend liability for the pro rata portion of the dividends expected to be paid on or before the next policy anniversary date.
Some of our policies and contracts require payment of fees or other policyholder assessments in advance for services that will be rendered over the estimated lives of the policies and contracts. These payments are established as unearned revenue liabilities upon receipt and included in other policyholder funds in the consolidated statements of financial position. These unearned revenue reserves are amortized to operations over the estimated lives of these policies and contracts in relation to the emergence of estimated gross profits (“EGPs”).
The liability for unpaid disability and health claims is an estimate of the ultimate net cost of reported and unreported losses not yet settled. This liability is estimated using actuarial analyses and case basis evaluations. Although considerable variability is inherent in such estimates, we believe that the liability for unpaid claims is adequate. These estimates are continually reviewed and, as adjustments to this liability become necessary, such adjustments are reflected in net income.


250


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

Recognition of Premiums and Other Considerations, Fees and Other Revenues and Benefits

Traditional individual life insurance products include those products with fixed and guaranteed premiums and benefits and consist principally of whole life and term life insurance policies. Premiums from these products are recognized as premium revenue when due. Related policy benefits and expenses for individual life products are associated with earned premiums and result in the recognition of profits over the expected term of the policies and contracts.
 
Immediate annuities with life contingencies include products with fixed and guaranteed annuity considerations and benefits and consist principally of group and individual single premium annuities with life contingencies. Annuity considerations from these products are recognized as premium revenue. However, the collection of these annuity considerations does not represent the completion of the earnings process, as we establish annuity reserves, using estimates for mortality and investment assumptions, which include provision for adverse deviation as required by U.S. GAAP. We anticipate profits to emerge over the life of the annuity products as we earn investment income, pay benefits and release reserves.
Group life and health insurance premiums are generally recorded as premium revenue over the term of the coverage. Certain group contracts contain experience premium refund provisions based on a pre-defined formula that reflects their claim experience. Experience premium refunds reduce revenue over the term of the coverage and are adjusted to reflect current experience. Related policy benefits and expenses for group life and health insurance products are associated with earned premiums and result in the recognition of profits over the term of the policies and contracts. Fees for contracts providing claim processing or other administrative services are recorded as revenue over the period the service is provided.
Universal life-type policies are insurance contracts with terms that are not fixed. Amounts received as payments for such contracts are not reported as premium revenues. Revenues for universal life-type insurance contracts consist of policy charges for the cost of insurance, policy initiation and administration, surrender charges and other fees that have been assessed against policy account values and investment income. Policy benefits and claims that are charged to expense include interest credited to contracts and benefit claims incurred in the period in excess of related policy account balances.
Investment contracts do not subject us to significant risks arising from policyholder mortality or morbidity and consist primarily of guaranteed investment contracts (“GICs”), funding agreements and certain deferred annuities. Amounts received as payments for investment contracts are established as investment contract liability balances and are not reported as premium revenues. Revenues for investment contracts consist of investment income and policy administration charges. Investment contract benefits that are charged to expense include benefit claims incurred in the period in excess of related investment contract liability balances and interest credited to investment contract liability balances.
Fees and other revenues are earned for asset management services provided to retail and institutional clients based largely upon contractual rates applied to the market value of the client's portfolio. Additionally, fees and other revenues are earned for administrative services performed including recordkeeping and reporting services for retirement savings plans. Fees and other revenues received for performance of asset management and administrative services are recognized as revenue when earned, typically when the service is performed.
Deferred Acquisition Costs
Incremental direct costs of contract acquisition as well as certain costs directly related to acquisition activities (underwriting, policy issuance and processing, medical and inspection and sales force contract selling) for the successful acquisition of new and renewal insurance policies and investment contract business are capitalized to the extent recoverable. Maintenance costs and acquisition costs that are not deferrable are charged to operations as incurred.
DAC for universal life-type insurance contracts and certain investment contracts are being amortized over the lives of the policies and contracts in relation to the emergence of EGPs or, in certain circumstances, estimated gross revenues. This amortization is adjusted in the current period when EGPs or estimated gross revenues are revised. For individual variable universal life insurance, individual variable annuities and group annuities that have separate account U.S. equity investment options, we utilize a mean reversion method (reversion to the mean assumption), a common industry practice, to determine the future domestic equity market growth assumption used for the amortization of DAC. The DAC on participating life insurance policies are being amortized in proportion to estimated gross margins. The DAC on nonparticipating term life insurance and individual disability policies are being amortized over the premium-paying period of the related policies using assumptions consistent with those used in computing policyholder liabilities.

251


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

DAC on insurance policies and investment contracts are subject to recoverability testing at the time of policy issue and loss recognition testing on an annual basis, or when an event occurs that may warrant loss recognition. If loss recognition is necessary, DAC would be written off to the extent that it is determined that future policy premiums and investment income or gross profits are not adequate to cover related losses and expenses.

Deferred Acquisition Costs on Internal Replacements

All insurance and investment contract modifications and replacements are reviewed to determine if the internal replacement results in a substantially changed contract. If so, the acquisition costs, sales inducements and unearned revenue associated with the new contract are deferred and amortized over the lifetime of the new contract. In addition, the existing DAC, sales inducement costs and unearned revenue balances associated with the replaced contract are written off. If an internal replacement results in a substantially unchanged contract, the acquisition costs, sales inducements and unearned revenue associated with the new contract are immediately recognized in the period incurred. In addition, the existing DAC, sales inducement costs or unearned revenue balance associated with the replaced contract is not written off, but instead is carried over to the new contract.

Long-Term Debt

Long-term debt includes notes payable, nonrecourse mortgages and other debt with a maturity date greater than one year at the date of issuance. Current maturities of long-term debt are classified as long-term debt in our statement of financial position.

Reinsurance
We enter into reinsurance agreements with other companies in the normal course of business in order to limit losses and minimize exposure to significant risks. We may assume reinsurance from or cede reinsurance to other companies. Assets and liabilities related to reinsurance ceded are reported on a gross basis. Premiums and expenses are reported net of reinsurance ceded. The cost of reinsurance related to long-duration contracts is accounted for over the life of the underlying reinsured policies using assumptions consistent with those used to account for the underlying policies. We are contingently liable with respect to reinsurance ceded to other companies in the event the reinsurer is unable to meet the obligations it has assumed. At December 31, 2015 and 2014, we had $388.9 million and $320.2 million of net ceded reinsurance recoverables related to claims that have been received, respectively. At December 31, 2015 and 2014, our largest exposures to a single third party reinsurer was in our life insurance business, which totaled $40.6 billion and $38.9 billion of life insurance in force, representing 15% and 16% of total net life insurance in force, respectively. The reinsurance recoverable relating to claims received that are associated to this single third party reinsurer recorded in our consolidated statements of financial position was $58.9 million and $48.1 million at December 31, 2015 and 2014, respectively.
The effects of reinsurance on premiums and other considerations and policy and contract benefits were as follows:
 
 
 
For the year ended December 31,
 
 
 
2015
 
2014
 
2013
 
 
 
(in millions)
Premiums and other considerations:
 
 
 
 
 
 
 
 
 
Direct
$
5,275.8
 
$
3,755.4
 
$
3,132.8
 
Assumed
 
183.2
 
 
143.9
 
 
102.0
 
Ceded
 
(401.6)
 
 
(402.1)
 
 
(372.4)
Net premiums and other considerations
$
5,057.4
 
$
3,497.2
 
$
2,862.4
 
 
 
 
 
 
 
 
 
 
 
Benefits, claims and settlement expenses:
 
 
 
 
 
 
 
 
 
Direct
 
6,355.4
 
 
4,650.6
 
 
4,190.1
 
Assumed
 
306.0
 
 
289.6
 
 
204.5
 
Ceded
 
(526.3)
 
 
(330.2)
 
 
(280.1)
Net benefits, claims and settlement expenses
$
6,135.1
 
$
4,610.0
 
$
4,114.5


252


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

Separate Accounts
The separate accounts are legally segregated and are not subject to the claims that arise out of any of our other business. The client, rather than us, directs the investments and bears the investment risk of these funds. The separate account assets represent the fair value of funds that are separately administered by us for contracts with equity, real estate and fixed income investments and are presented as a summary total within the consolidated statements of financial position. An equivalent amount is reported as separate account liabilities, which represent the obligation to return the monies to the client. We receive fees for mortality, withdrawal and expense risks, as well as administrative, maintenance and investment advisory services that are included in the consolidated statements of operations. Net deposits, net investment income and realized and unrealized capital gains and losses of the separate accounts are not reflected in the consolidated statements of operations. 
At December 31, 2015 and 2014, the separate accounts include a separate account valued at $158.2 million and $205.4 million, respectively, which primarily includes shares of PFG stock that were allocated and issued to eligible participants of qualified employee benefit plans administered by us as part of the policy credits issued under Principal Mutual Holding Company’s 2001 demutualization. In the consolidated statements of financial position, the separate account shares are recorded at fair value and are reported as separate account assets with a corresponding separate account liability to eligible participants of the qualified plan. Changes in fair value of the separate account shares are reflected in both the separate account assets and separate account liabilities and do not impact our results of operations.
Income Taxes
Our ultimate parent, PFG, files a U.S. consolidated income tax return that includes us and all of our qualifying subsidiaries. In addition, we file income tax returns in all states in which we conduct business. PFG allocates income tax expenses and benefits to companies in the group generally based upon pro rata contribution of taxable income or operating losses. We are taxed at corporate rates on taxable income based on existing tax laws. Current income taxes are charged or credited to net income based upon amounts estimated to be payable or recoverable as a result of taxable operations for the current year. Deferred income taxes are provided for the tax effect of temporary differences in the financial reporting and income tax bases of assets and liabilities and net operating losses using enacted income tax rates and laws. The effect on deferred income tax assets and deferred income tax liabilities of a change in tax rates is recognized in operations in the period in which the change is enacted.
Goodwill and Other Intangibles
Goodwill and other intangible assets include the cost of acquired subsidiaries in excess of the fair value of the net tangible assets recorded in connection with acquisitions. Goodwill and indefinite‑lived intangible assets are not amortized. Rather, they are tested for impairment during the third quarter each year, or more frequently if events or changes in circumstances indicate that the asset might be impaired. Goodwill is tested at the reporting unit level, which is a business one level below the operating segment, if financial information is prepared and regularly reviewed by management at that level. Once goodwill has been assigned to a reporting unit, it is no longer associated with a particular acquisition; therefore, all of the activities within a reporting unit, whether acquired or organically grown, are available to support the goodwill value. Impairment testing for indefinite‑lived intangible assets consists of a comparison of the fair value of the intangible asset with its carrying value.
Intangible assets with a finite useful life are amortized as related benefits emerge and are reviewed periodically for indicators of impairment in value. If facts and circumstances suggest possible impairment, the sum of the estimated undiscounted future cash flows expected to result from the use of the asset is compared to the current carrying value of the asset. If the undiscounted future cash flows are less than the carrying value, an impairment loss is recognized for the excess of the carrying amount of assets over their fair value.
2. Related Party Transactions
We have entered into various related party transactions with our ultimate parent and its other affiliates. During the years ended December 31, 2015, 2014 and 2013, we received $266.7 million, $334.5 million and $327.1 million, respectively, of expense reimbursements from affiliated entities.


253


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

We and our direct parent, PFSI, are parties to a cash advance agreement, which allows us, collectively, to pool our available cash in order to more efficiently and effectively invest our cash. The cash advance agreement allows (i) us to advance cash to PFSI in aggregate principal amounts not to exceed $1.0 billion, with such advanced amounts earning interest at the daily 30-day LIBOR rate (the “Internal Crediting Rate”); and (ii) PFSI to advance cash to us in aggregate principal amounts not to exceed $1.0 billion, with such advance amounts paying interest at the Internal Crediting Rate plus 10 basis points to reimburse PFSI for the costs incurred in maintaining short-term investing and borrowing programs. Under this cash advance agreement, we had a receivable from PFSI of $385.0 million and $400.7 million at December 31, 2015 and 2014, respectively, and earned interest of $0.5 million, $0.3 million and $0.4 million during 2015, 2014 and 2013, respectively.
We have short-term affiliated debt and long-term affiliated debt with our parent. See Note 10, Debt, for additional information.
During the third quarter of 2015, we transferred our ownership interests in PGI Finisterre Holding Company Ltd., Finisterre Holdings Limited, Finisterre Capital LLP, PGI Origin Holding Company Ltd. and Origin Asset Management LLP to PFSI. We received a $156.0 million 10-year note from PFSI for the carrying value of those subsidiaries. The note bears interest at 2.87% with semi-annual principal and interest payments due in February and August each year. Our ultimate parent, PFG, is a guarantor of the note. We recorded interest income of less than $0.1 million for the year ended December 31, 2015.
We and an affiliated entity, Principal National Life Insurance Company, are parties to a reinsurance agreement to reinsure certain life insurance business. Under this agreement, we had an assumed reinsurance liability of $2,166.9 million and $1,853.6 million as of December 31, 2015 and 2014, respectively. In addition, we recognized premiums and other fees of $337.4 million, $278.1 million and $223.6 million for the years ended December 31, 2015, 2014 and 2013, respectively, associated with this agreement. Furthermore, we recognized expenses of $493.6 million, $473.1 million and $428.6 million for the years ended December 31, 2015, 2014 and 2013, respectively, associated with this agreement.
We receive commission fees, distribution and services fees from Princor Financial Services Corporation and Principal Management Corporation for distributing proprietary products on their behalf. Furthermore, we receive management and administrative fees for investments our products hold in the Principal Mutual Funds and Principal Variable Contracts. Fees and other revenue was $446.1 million, $377.4 million and $407.9 million for the years ended December 31, 2015, 2014 and 2013, respectively. In addition, we pay commission expense to affiliated registered representatives within Princor Financial Services Corporation to sell proprietary products. Commission expense was $64.4 million, $66.8 million and $87.8 million for the years ended December 31, 2015, 2014 and 2013, respectively.
Effective November 2014, PFG became the sponsor of the defined benefit pension plans for both employees and individual field agents. Prior to November 2014, we were the sponsor of these plans. In connection with the change in sponsorship, we transferred $308.2 million of assets to PFG and PFG assumed $282.2 million of liabilities from us. In addition, we were allocated $86.1 million of pension expense from PFG during 2015 and $9.6 million during 2014 after the change in sponsorship was effective. See Note 12, Employee and Agent Benefits, for further details.
Pursuant to certain regulatory requirements or otherwise in the ordinary course of business, we guarantee certain payments of our affiliates and have agreements with affiliates to provide and/or receive management, administrative and other services, all of which, individually and in the aggregate, are immaterial to our business, financial condition and net income.


254


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

3. Goodwill and Other Intangible Assets

Goodwill

The changes in the carrying amount of goodwill reported in our segments were as follows:
 
 
Retirement
 
Principal
 
 
U.S.
 
 
 
 
 
and Income
 
Global
 
 
Insurance
 
 
 
 
 
Solutions
 
Investors
 
 
Solutions
 
Consolidated
 
 
(in millions)
Balance at January 1, 2014
$
18.7
 
$
224.6
 
 
$
56.4
 
$
299.7
 
Foreign currency
 
—
 
 
(3.9)
 
 
 
—
 
 
(3.9)
Balance at December 31, 2014
 
18.7
 
 
220.7
 
 
 
56.4
 
 
295.8
 
Transfer to affiliate (1)
 
—
 
 
(68.3)
 
 
 
—
 
 
(68.3)
Balance at December 31, 2015
$
18.7
 
$
152.4
 
 
$
56.4
 
$
227.5

(1)
See Note 2, Related Party Transactions, for further details.
Finite Lived Intangible Assets
Finite lived intangible assets that continue to be subject to amortization over a weighted average remaining expected life of 16 years were as follows:
 
 
December 31,
 
 
2015
 
2014
 
 
(in millions)
Gross carrying value
$
54.8
 
$
77.4
Accumulated amortization
 
21.6
 
 
27.6
Net carrying value
$
33.2
 
$
49.8

During 2015, 2014 and 2013, we fully amortized finite lived intangible assets of $0.5 million, $15.8 million and $5.2 million, respectively.
The amortization expense for intangible assets with finite useful lives was $4.0 million, $6.7 million and $6.5 million for 2015, 2014 and 2013, respectively. At December 31, 2015, the estimated amortization expense for the next five years is as follows (in millions):
Year ending December 31:
 
 
 
2016
$
2.6
 
2017
 
2.7
 
2018
 
2.6
 
2019
 
2.7
 
2020
 
2.9

Indefinite Lived Intangible Assets

The net carrying amount of unamortized indefinite lived intangible assets was $94.5 million as of both December 31, 2015 and 2014. This represents our share of the purchase price from our parent’s 2006 acquisition of WM Advisors, Inc. related to investment management contracts that are not subject to amortization based on the fact that we will benefit from our parent’s acquisition.


255


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

4. Variable Interest Entities

We have relationships with and may have a variable interest in various types of special purpose entities. Following is a discussion of our interest in entities that meet the definition of a VIE. When we are the primary beneficiary, we are required to consolidate the entity in our financial statements. The primary beneficiary of a VIE is defined as the enterprise with (1) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (2) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. For VIEs that are investment companies, the primary beneficiary is the enterprise who absorbs the majority of the entity’s expected losses, receives a majority of the expected residual returns or both. On an ongoing basis, we assess whether we are the primary beneficiary of VIEs in which we have a relationship.

Consolidated Variable Interest Entities

Grantor Trusts

We contributed undated subordinated floating rate notes to three grantor trusts. The trusts separated the cash flows by issuing an interest-only certificate and a residual certificate related to each note contributed. Each interest-only certificate entitles the holder to interest on the stated note for a specified term, while the residual certificate entitles the holder to interest payments subsequent to the term of the interest-only certificate and to all principal payments. We retained the interest-only certificates and the residual certificates were subsequently sold to third parties. We have determined these grantor trusts are VIEs due to insufficient equity to sustain them. We determined we are the primary beneficiary as a result of our contribution of securities into the trusts and our continuing interest in the trusts.

Collateralized Private Investment Vehicles

We invest in synthetic collateralized debt obligations, collateralized bond obligations, collateralized loan obligations and other collateralized structures, which are VIEs due to insufficient equity to sustain the entities (collectively known as “collateralized private investment vehicles”). The performance of the notes of these structures is primarily linked to a synthetic portfolio by derivatives; each note has a specific loss attachment and detachment point. The notes and related derivatives are collateralized by a pool of permitted investments. The investments are held by a trustee and can only be liquidated to settle obligations of the trusts. These obligations primarily include derivatives and the notes due at maturity or termination of the trusts. We determined we are the primary beneficiary for one of these entities because we act as the investment manager of the underlying portfolio and we have an ownership interest.

Commercial Mortgage-Backed Securities

We sold commercial mortgage loans to a real estate mortgage investment conduit trust. The trust issued various commercial mortgage-backed securities (“CMBS”) certificates using the cash flows of the underlying commercial mortgages it purchased. This is considered a VIE due to insufficient equity to sustain itself. We have determined we are the primary beneficiary as we retained the special servicing role for the assets within the trust as well as the ownership of the bond class that controls the unilateral kick out rights of the special servicer.

Real Estate

We invest in several real estate limited partnerships and limited liability companies. The entities invest in real estate properties. Certain of these entities are VIEs based on the combination of our significant economic interest and related voting rights. We determined we are the primary beneficiary as a result of our power to control the entities through our significant ownership. Due to the nature of these real estate investments, the investment balance will fluctuate as we purchase and sell interests in the entities and as capital expenditures are made to improve the underlying real estate.


256


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015
The carrying amounts of our consolidated VIE assets, which can only be used to settle obligations of consolidated VIEs, and liabilities of consolidated VIEs for which creditors do not have recourse are as follows:
 
 
 
 
 
Collateralized
 
 
 
 
 
 
 
 
 
 
 
 
 
 
private investment
 
 
 
 
 
 
 
 
 
 
 
Grantor trusts
 
vehicles
 
CMBS
 
Real estate
 
Total
 
 
(in millions)
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed maturities, available-for-sale
$
257.4
 
$
—
 
$
—
 
$
—
 
$
257.4
Fixed maturities, trading
 
—
 
 
100.4
 
 
—
 
 
—
 
 
100.4
Real estate
 
—
 
 
—
 
 
—
 
 
354.5
 
 
354.5
Other investments
 
—
 
 
—
 
 
18.3
 
 
11.2
 
 
29.5
Cash
 
—
 
 
—
 
 
—
 
 
15.3
 
 
15.3
Accrued investment income
 
0.5
 
 
—
 
 
0.1
 
 
2.5
 
 
3.1
Premiums due and other receivables
 
—
 
 
—
 
 
—
 
 
1.6
 
 
1.6
Other assets
 
—
 
 
—
 
 
—
 
 
(0.9)
 
 
(0.9)
 
Total assets
$
257.9
 
$
100.4
 
$
18.4
 
$
384.2
 
$
760.9
Long-term debt
$
—
 
$
—
 
$
—
 
$
42.8
 
$
42.8
Income taxes currently payable
 
—
 
 
—
 
 
—
 
 
0.5
 
 
0.5
Deferred income taxes
 
1.5
 
 
—
 
 
—
 
 
(1.7)
 
 
(0.2)
Other liabilities (1)
 
230.3
 
 
85.9
 
 
—
 
 
29.7
 
 
345.9
 
Total liabilities
$
231.8
 
$
85.9
 
$
—
 
$
71.3
 
$
389.0
December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed maturities, available-for-sale
$
278.2
 
$
—
 
$
—
 
$
—
 
$
278.2
Fixed maturities, trading
 
—
 
 
100.4
 
 
—
 
 
—
 
 
100.4
Real estate
 
—
 
 
—
 
 
—
 
 
284.9
 
 
284.9
Other investments
 
—
 
 
—
 
 
35.0
 
 
5.6
 
 
40.6
Cash
 
—
 
 
—
 
 
—
 
 
4.7
 
 
4.7
Accrued investment income
 
0.4
 
 
—
 
 
0.2
 
 
1.4
 
 
2.0
Other assets
 
—
 
 
—
 
 
—
 
 
0.3
 
 
0.3
 
Total assets
$
278.6
 
$
100.4
 
$
35.2
 
$
296.9
 
$
711.1
Long-term debt
$
—
 
$
—
 
$
—
 
$
82.3
 
$
82.3
Income taxes currently payable
 
—
 
 
—
 
 
—
 
 
10.6
 
 
10.6
Deferred income taxes
 
1.5
 
 
—
 
 
—
 
 
(0.4)
 
 
1.1
Other liabilities (1)
 
239.1
 
 
85.6
 
 
4.8
 
 
14.5
 
 
344.0
 
Total liabilities
$
240.6
 
$
85.6
 
$
4.8
 
$
107.0
 
$
438.0
(1)
Grantor trusts contain an embedded derivative of a forecasted transaction to deliver the underlying securities; the collateralized private investment vehicle includes derivative liabilities and an obligation to redeem notes at maturity or termination of the trusts.
We did not provide financial or other support to investees designated as VIEs for the periods ended December 31, 2015 and 2014.
Unconsolidated Variable Interest Entities
Invested Securities
We hold a variable interest in a number of VIEs where we are not the primary beneficiary. Our investments in these VIEs are reported in fixed maturities, available-for-sale; fixed maturities, trading and other investments in the consolidated statements of financial position and are described below.
Unconsolidated VIEs include CMBS, residential mortgage-backed pass-through securities (“RMBS”) and other ABS. All of these entities were deemed VIEs because the equity within these entities is insufficient to sustain them. We determined we are not the primary beneficiary in the entities within these categories of investments. This determination was based primarily on the fact we do not own the class of security that controls the unilateral right to replace the special servicer or equivalent function. 

257


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

As previously discussed, we invest in several types of collateralized private investment vehicles, which are VIEs. These include cash and synthetic structures that we do not manage. We have determined we are not the primary beneficiary of these collateralized private investment vehicles primarily because we do not control the economic performance of the entities and were not involved with the design of the entities.

We have invested in various VIE trusts as a debt holder. All of these entities are classified as VIEs due to insufficient equity to sustain them. We have determined we are not the primary beneficiary primarily because we do not control the economic performance of the entities and were not involved with the design of the entities.

We have invested in partnerships and other funds, some of which are classified as VIEs. Some of these entities have returns in the form of income tax credits. These entities are classified as VIEs as the general partners do not have equity investments at risk in the entities. We have determined we are not the primary beneficiary because we are not the general partner, who makes all the significant decisions for the entities. Other limited partnerships and fund interests have returns from investment income. These entities are classified as VIEs as the decision makers do not have equity investments at risk in the entities. We have determined we are not the primary beneficiary because we do not make the significant decisions for the entities or our variable interest does not absorb the majority of the variability of the entities’ net assets.
The carrying value and maximum loss exposure for our unconsolidated VIEs were as follows:
 
 
 
 
 
 
 
Maximum exposure to
 
 
 
 
Asset carrying value
 
loss (1)
 
 
 
 
(in millions)
December 31, 2015
 
 
 
 
 
Fixed maturities, available-for-sale:
 
 
 
 
 
 
Corporate
$
453.4
 
$
359.8
 
Residential mortgage-backed pass-through securities
 
2,614.2
 
 
2,537.2
 
Commercial mortgage-backed securities
 
3,850.0
 
 
3,862.2
 
Collateralized debt obligations
 
663.6
 
 
688.8
 
Other debt obligations
 
4,471.5
 
 
4,467.7
Fixed maturities, trading:
 
 
 
 
 
 
Residential mortgage-backed pass-through securities
 
25.9
 
 
25.9
 
Commercial mortgage-backed securities
 
2.3
 
 
2.3
 
Collateralized debt obligations
 
35.1
 
 
35.1
Other investments:
 
 
 
 
 
 
Other limited partnership and fund interests
 
215.8
 
 
215.8
 
 
 
 
 
 
 
 
December 31, 2014
 
 
 
 
 
Fixed maturities, available-for-sale:
 
 
 
 
 
 
Corporate
$
456.7
 
$
353.3
 
Residential mortgage-backed pass-through securities
 
2,805.2
 
 
2,687.0
 
Commercial mortgage-backed securities
 
3,975.5
 
 
3,896.9
 
Collateralized debt obligations
 
504.1
 
 
521.2
 
Other debt obligations
 
4,616.4
 
 
4,583.4
Fixed maturities, trading:
 
 
 
 
 
 
Residential mortgage-backed pass-through securities
 
34.4
 
 
34.4
 
Commercial mortgage-backed securities
 
1.5
 
 
1.5
 
Collateralized debt obligations
 
39.4
 
 
39.4
 
Other debt obligations
 
0.2
 
 
0.2
Other investments:
 
 
 
 
 
 
Other limited partnership and fund interests
 
173.1
 
 
173.1
(1)
Our risk of loss is limited to our initial investment measured at amortized cost for fixed maturities, available-for-sale and other investments. Our risk of loss is limited to our investment measured at fair value for our fixed maturities, trading.

258


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

Sponsored Investment Funds
We provide asset management and other services to certain investment structures for which we earn performance-based management fees. These structures are considered VIEs. We are not the primary beneficiary of these entities as we do not have the obligation to absorb losses of the entities that could be potentially significant to the VIE or the right to receive benefits from these entities that could be potentially significant.
5. Investments
Fixed Maturities and Equity Securities
The amortized cost, gross unrealized gains and losses, other-than-temporary impairments in AOCI and fair value of fixed maturities and equity securities available-for-sale are summarized as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other-than-
 
 
 
 
 
 
 
Gross
 
Gross
 
 
 
 
temporary
 
 
 
 
Amortized
 
unrealized
 
unrealized
 
 
 
 
impairments in
 
 
 
 
cost
 
gains
 
losses
 
Fair value
 
AOCI (1)
 
 
 
 
(in millions)
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed maturities, available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government and agencies
$
1,423.5
 
$
23.4
 
$
8.2
 
$
1,438.7
 
$
—
 
Non-U.S. governments
 
349.7
 
 
77.1
 
 
2.8
 
 
424.0
 
 
—
 
States and political subdivisions
 
4,450.6
 
 
232.9
 
 
19.2
 
 
4,664.3
 
 
—
 
Corporate
 
27,552.7
 
 
1,317.8
 
 
595.4
 
 
28,275.1
 
 
6.0
 
Residential mortgage-backed pass-through securities
 
2,537.1
 
 
89.0
 
 
11.9
 
 
2,614.2
 
 
—
 
Commercial mortgage-backed securities
 
3,862.2
 
 
65.3
 
 
77.5
 
 
3,850.0
 
 
80.7
 
Collateralized debt obligations
 
688.8
 
 
1.4
 
 
26.6
 
 
663.6
 
 
1.3
 
Other debt obligations
 
4,529.7
 
 
39.2
 
 
35.4
 
 
4,533.5
 
 
58.2
Total fixed maturities, available-for-sale
$
45,394.3
 
$
1,846.1
 
$
777.0
 
$
46,463.4
 
$
146.2
Total equity securities, available-for-sale
$
110.2
 
$
5.8
 
$
14.2
 
$
101.8
 
 
 
December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed maturities, available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government and agencies
$
1,074.5
 
$
39.1
 
$
2.9
 
$
1,110.7
 
$
—
 
Non-U.S. governments
 
357.2
 
 
90.8
 
 
1.4
 
 
446.6
 
 
—
 
States and political subdivisions
 
3,891.0
 
 
289.3
 
 
4.1
 
 
4,176.2
 
 
—
 
Corporate
 
26,953.6
 
 
2,149.2
 
 
188.1
 
 
28,914.7
 
 
18.3
 
Residential mortgage-backed pass-through securities
 
2,687.0
 
 
124.5
 
 
6.3
 
 
2,805.2
 
 
—
 
Commercial mortgage-backed securities
 
3,896.9
 
 
141.5
 
 
62.9
 
 
3,975.5
 
 
88.9
 
Collateralized debt obligations
 
521.2
 
 
3.5
 
 
20.6
 
 
504.1
 
 
1.3
 
Other debt obligations
 
4,583.4
 
 
57.5
 
 
24.5
 
 
4,616.4
 
 
66.9
Total fixed maturities, available-for-sale
$
43,964.8
 
$
2,895.4
 
$
310.8
 
$
46,549.4
 
$
175.4
Total equity securities, available-for-sale
$
113.1
 
$
5.6
 
$
9.8
 
$
108.9
 
 
 

(1)
Excludes $131.5 million and $167.5 million as of December 31, 2015 and December 31, 2014, respectively, of net unrealized gains on impaired fixed maturities, available-for-sale related to changes in fair value subsequent to the impairment date, which are included in gross unrealized gains and gross unrealized losses.


259


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

The amortized cost and fair value of fixed maturities available-for-sale at December 31, 2015, by expected maturity, were as follows:
 
 
Amortized cost
 
Fair value
 
 
(in millions)
Due in one year or less
$
2,631.3
 
$
2,652.2
Due after one year through five years
 
12,677.7
 
 
12,963.9
Due after five years through ten years
 
7,742.9
 
 
7,846.2
Due after ten years
 
10,724.6
 
 
11,339.8
Subtotal
 
33,776.5
 
 
34,802.1
Mortgage-backed and other asset-backed securities
 
11,617.8
 
 
11,661.3
Total
 
$
45,394.3
 
$
46,463.4

Actual maturities may differ because borrowers may have the right to call or prepay obligations. Our portfolio is diversified by industry, issuer and asset class. Credit concentrations are managed to established limits.

Net Investment Income
Major components of net investment income are summarized as follows:
 
 
 
For the year ended December 31,
 
 
 
2015
 
2014
 
2013
 
 
 
(in millions)
Fixed maturities, available-for-sale
$
1,923.4
 
$
2,017.0
 
$
2,109.3
Fixed maturities, trading
 
11.6
 
 
12.2
 
 
11.2
Equity securities, available-for-sale
 
5.6
 
 
5.4
 
 
6.9
Equity securities, trading
 
9.8
 
 
6.5
 
 
2.8
Mortgage loans
 
525.7
 
 
563.4
 
 
565.2
Real estate
 
96.6
 
 
103.2
 
 
60.7
Policy loans
 
41.4
 
 
43.8
 
 
43.5
Cash and cash equivalents
 
4.3
 
 
3.7
 
 
4.4
Derivatives
 
(66.6)
 
 
(87.9)
 
 
(115.2)
Other
 
75.1
 
 
71.1
 
 
67.2
Total
 
2,626.9
 
 
2,738.4
 
 
2,756.0
Investment expenses
 
(74.9)
 
 
(74.9)
 
 
(74.5)
Net investment income
$
2,552.0
 
$
2,663.5
 
$
2,681.5


260


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

Net Realized Capital Gains and Losses
    
Major components of net realized capital gains (losses) on investments are summarized as follows:
 
 
 
For the year ended December 31,
 
 
 
2015
 
2014
 
2013
 
 
 
(in millions)
Fixed maturities, available-for-sale:
 
 
 
 
 
 
 
 
 
Gross gains
$
17.0
 
$
49.5
 
$
22.9
 
Gross losses
 
(4.3)
 
 
(23.8)
 
 
(10.6)
 
Net impairment losses
 
(30.3)
 
 
(83.7)
 
 
(111.5)
 
Hedging, net
 
(58.3)
 
 
(21.4)
 
 
(115.6)
Fixed maturities, trading
 
(6.1)
 
 
8.8
 
 
(5.2)
Equity securities, available-for-sale:
 
 
 
 
 
 
 
 
 
Gross gains
 
—
 
 
—
 
 
0.7
 
Net impairment recoveries (losses)
 
0.3
 
 
10.0
 
 
(0.3)
Equity securities, trading
 
(8.2)
 
 
10.7
 
 
22.4
Mortgage loans
 
(0.3)
 
 
(9.4)
 
 
(16.0)
Derivatives
 
82.5
 
 
60.3
 
 
(22.8)
Other
 
(18.3)
 
 
61.7
 
 
24.7
Net realized capital gains (losses)
$
(26.0)
 
$
62.7
 
$
(211.3)

Proceeds from sales of investments (excluding call and maturity proceeds) in fixed maturities, available-for-sale were $1,059.6 million, $2,068.9 million and $1,493.7 million in 2015, 2014 and 2013, respectively.

Other-Than-Temporary Impairments

We have a process in place to identify fixed maturity and equity securities that could potentially have a credit impairment that is other than temporary. This process involves monitoring market events that could impact issuers’ credit ratings, business climate, management changes, litigation and government actions and other similar factors. This process also involves monitoring late payments, pricing levels, downgrades by rating agencies, key financial ratios, financial statements, revenue forecasts and cash flow projections as indicators of credit issues.

Each reporting period, all securities are reviewed to determine whether an other-than-temporary decline in value exists and whether losses should be recognized. We consider relevant facts and circumstances in evaluating whether a credit or interest rate-related impairment of a security is other than temporary. Relevant facts and circumstances considered include: (1) the extent and length of time the fair value has been below cost; (2) the reasons for the decline in value; (3) the financial position and access to capital of the issuer, including the current and future impact of any specific events; (4) for structured securities, the adequacy of the expected cash flows; (5) for fixed maturities, our intent to sell a security or whether it is more likely than not we will be required to sell the security before the recovery of its amortized cost which, in some cases, may extend to maturity and (6) for equity securities, our ability and intent to hold the security for a period of time that allows for the recovery in value. To the extent we determine that a security is deemed to be other than temporarily impaired, an impairment loss is recognized.

Impairment losses on equity securities are recognized in net income and are measured as the difference between amortized cost and fair value. The way in which impairment losses on fixed maturities are recognized in the financial statements is dependent on the facts and circumstances related to the specific security. If we intend to sell a security or it is more likely than not that we would be required to sell a security before the recovery of its amortized cost, we recognize an other-than-temporary impairment in net income for the difference between amortized cost and fair value. If we do not expect to recover the amortized cost basis, we do not plan to sell the security and if it is not more likely than not that we would be required to sell a security before the recovery of its amortized cost, the recognition of the other-than-temporary impairment is bifurcated. We recognize the credit loss portion in net income and the noncredit loss portion in OCI (“bifurcated OTTI”).

261


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

Total other-than-temporary impairment losses, net of recoveries from the sale of previously impaired securities, were as follows:
 
 
 
 
For the year ended December 31,
 
 
 
 
2015
 
2014
 
2013
 
 
 
 
(in millions)
Fixed maturities, available-for-sale
$
(1.1)
 
$
18.5
 
$
(89.5)
Equity securities, available-for-sale
 
0.3
 
 
10.0
 
 
(0.3)
Total other-than-temporary impairment losses, net of recoveries from
 
 
 
 
 
 
 
 
 
the sale of previously impaired securities
 
(0.8)
 
 
28.5
 
 
(89.8)
Other-than-temporary impairment losses on fixed maturities,
 
 
 
 
 
 
 
 
 
available-for-sale reclassified from OCI (1)
 
(29.2)
 
 
(102.2)
 
 
(22.0)
Net impairment losses on available-for-sale securities
$
(30.0)
 
$
(73.7)
 
$
(111.8)

(1)
Represents the net impact of (a) gains resulting from reclassification of noncredit impairment losses for fixed maturities with bifurcated OTTI from net realized capital gains (losses) to OCI and (b) losses resulting from reclassification of previously recognized noncredit impairment losses from OCI to net realized capital gains (losses) for fixed maturities with bifurcated OTTI that had additional credit losses or fixed maturities that previously had bifurcated OTTI that have now been sold or are intended to be sold.

We estimate the amount of the credit loss component of a fixed maturity security impairment as the difference between amortized cost and the present value of the expected cash flows of the security. The present value is determined using the best estimate cash flows discounted at the effective interest rate implicit to the security at the date of purchase or the current yield to accrete an asset-backed or floating rate security. The methodology and assumptions for establishing the best estimate cash flows vary depending on the type of security. The ABS cash flow estimates are based on security specific facts and circumstances that may include collateral characteristics, expectations of delinquency and default rates, loss severity and prepayment speeds and structural support, including subordination and guarantees. The corporate security cash flow estimates are derived from scenario-based outcomes of expected corporate restructurings or liquidations using bond specific facts and circumstances including timing, security interests and loss severity.

The following table provides a rollforward of accumulated credit losses for fixed maturities with bifurcated credit losses. The purpose of the table is to provide detail of (1) additions to the bifurcated credit loss amounts recognized in net realized capital gains (losses) during the period and (2) decrements for previously recognized bifurcated credit losses where the loss is no longer bifurcated and/or there has been a positive change in expected cash flows or accretion of the bifurcated credit loss amount.
 
 
For the year ended December 31,
 
 
2015
 
2014
 
2013
 
 
(in millions)
Beginning balance
$
(140.3)
 
$
(235.4)
 
$
(329.0)
Credit losses for which an other-than-temporary impairment was
 
 
 
 
 
 
 
 
 
not previously recognized
 
(6.1)
 
 
(7.2)
 
 
(15.1)
Credit losses for which an other-than-temporary impairment was
 
 
 
 
 
 
 
 
 
previously recognized
 
(13.8)
 
 
(67.4)
 
 
(75.9)
Reduction for credit losses previously recognized on fixed maturities
 
 
 
 
 
 
 
 
 
now sold, paid down or intended to be sold
 
24.7
 
 
163.1
 
 
172.0
Net reduction for positive changes in cash flows expected
 
 
 
 
 
 
 
 
 
to be collected and amortization (1)
 
7.5
 
 
6.6
 
 
12.6
Ending balance
$
(128.0)
 
$
(140.3)
 
$
(235.4)
(1) Amounts are recognized in net investment income.

262


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

Gross Unrealized Losses for Fixed Maturities and Equity Securities

For fixed maturities and equity securities available-for-sale with unrealized losses, including other-than-temporary impairment losses reported in OCI, the gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position are summarized as follows:
 
 
 
December 31, 2015
 
 
 
Less than
 
Greater than or
 
 
 
 
 
twelve months
 
equal to twelve months
 
Total
 
 
 
 
 
Gross
 
 
 
Gross
 
 
 
Gross
 
 
 
Fair
 
unrealized
 
Fair
 
unrealized
 
Fair
 
unrealized
 
 
 
value
 
losses
 
value
 
losses
 
value
 
losses
 
 
 
(in millions)
Fixed maturities, available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government and agencies
$
539.2
 
$
7.5
 
$
40.5
 
$
0.7
 
$
579.7
 
$
8.2
 
Non-U.S. governments
 
55.1
 
 
2.8
 
 
—
 
 
—
 
 
55.1
 
 
2.8
 
States and political subdivisions
 
677.6
 
 
18.8
 
 
6.5
 
 
0.4
 
 
684.1
 
 
19.2
 
Corporate
 
7,441.3
 
 
291.1
 
 
1,244.2
 
 
304.3
 
 
8,685.5
 
 
595.4
 
Residential mortgage-backed pass-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
through securities
 
656.7
 
 
6.7
 
 
147.9
 
 
5.2
 
 
804.6
 
 
11.9
 
Commercial mortgage-backed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
securities
 
1,419.8
 
 
26.8
 
 
299.5
 
 
50.7
 
 
1,719.3
 
 
77.5
 
Collateralized debt obligations
 
424.9
 
 
3.8
 
 
164.0
 
 
22.8
 
 
588.9
 
 
26.6
 
Other debt obligations
 
2,459.3
 
 
18.8
 
 
403.5
 
 
16.6
 
 
2,862.8
 
 
35.4
Total fixed maturities, available-for-sale
$
13,673.9
 
$
376.3
 
$
2,306.1
 
$
400.7
 
$
15,980.0
 
$
777.0
Total equity securities, available-for-sale
$
0.8
 
$
1.0
 
$
32.7
 
$
13.2
 
$
33.5
 
$
14.2

Our consolidated portfolio consists of available-for-sale fixed maturities where 87% were investment grade (rated AAA through BBB-) with an average price of 95 (carrying value/amortized cost) at December 31, 2015. Gross unrealized losses in our fixed maturities portfolio increased during the year ended December 31, 2015, due primarily to an increase in interest rates and widening of credit spreads.
 
For those securities that had been in a continuous unrealized loss position for less than twelve months, our consolidated portfolio held 1,725 securities with a carrying value of $13,673.9 million and unrealized losses of $376.3 million reflecting an average price of 97 at December 31, 2015. Of this portfolio, 90% was investment grade (rated AAA through BBB-) at December 31, 2015, with associated unrealized losses of $298.1 million. The unrealized losses on these securities can primarily be attributed to changes in market interest rates and changes in credit spreads since the securities were acquired.
For those securities that had been in a continuous unrealized loss position greater than or equal to twelve months, our consolidated portfolio held 404 securities with a carrying value of $2,306.1 million and unrealized losses of $400.7 million. The average rating of this portfolio was BBB+ with an average price of 85 at December 31, 2015. Of the $400.7 million in unrealized losses, the corporate sector accounts for $304.2 million in unrealized losses with an average price of 80 and an average credit rating of BBB-. The remaining unrealized losses consist primarily of $50.7 million within the commercial mortgage-backed securities sector with an average price of 86 and an average credit rating of BBB+. The unrealized losses on these securities can primarily be attributed to changes in market interest rates and changes in credit spreads since the securities were acquired.

Because we expected to recover our amortized cost, it was not our intent to sell the fixed maturity available-for-sale securities with unrealized losses and it was not more likely than not that we would be required to sell these securities before recovery of the amortized cost, which may be maturity, we did not consider these investments to be other-than-temporarily impaired at December 31, 2015.

263


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

 
 
 
December 31, 2014
 
 
 
Less than
 
Greater than or
 
 
 
 
 
twelve months
 
equal to twelve months
 
Total
 
 
 
 
 
Gross
 
 
 
Gross
 
 
 
Gross
 
 
 
Fair
 
unrealized
 
Fair
 
unrealized
 
Fair
 
unrealized
 
 
 
value
 
losses
 
value
 
losses
 
value
 
losses
 
 
 
(in millions)
Fixed maturities, available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government and agencies
$
200.3
 
$
0.7
 
$
95.0
 
$
2.2
 
$
295.3
 
$
2.9
 
Non-U.S. governments
 
13.5
 
 
1.4
 
 
—
 
 
—
 
 
13.5
 
 
1.4
 
States and political subdivisions
 
208.1
 
 
0.7
 
 
210.5
 
 
3.4
 
 
418.6
 
 
4.1
 
Corporate
 
3,005.9
 
 
75.1
 
 
1,091.1
 
 
113.0
 
 
4,097.0
 
 
188.1
 
Residential mortgage-backed pass-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
through securities
 
18.0
 
 
—
 
 
395.3
 
 
6.3
 
 
413.3
 
 
6.3
 
Commercial mortgage-backed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
securities
 
375.3
 
 
3.0
 
 
395.0
 
 
59.9
 
 
770.3
 
 
62.9
 
Collateralized debt obligations
 
114.8
 
 
1.0
 
 
112.0
 
 
19.6
 
 
226.8
 
 
20.6
 
Other debt obligations
 
971.2
 
 
3.5
 
 
432.7
 
 
21.0
 
 
1,403.9
 
 
24.5
Total fixed maturities, available-for-sale
$
4,907.1
 
$
85.4
 
$
2,731.6
 
$
225.4
 
$
7,638.7
 
$
310.8
Total equity securities, available-for-sale
$
10.0
 
$
—
 
$
36.0
 
$
9.8
 
$
46.0
 
$
9.8

Our consolidated portfolio consists of available-for-sale fixed maturities where 80% were investment grade (rated AAA through BBB-) with an average price of 96 (carrying value/amortized cost) at December 31, 2014. Gross unrealized losses in our fixed maturities portfolio decreased during the year ended December 31, 2014, due primarily to a decrease in interest rates.

For those securities that had been in a continuous unrealized loss position for less than twelve months, our consolidated portfolio held 685 securities with a carrying value of $4,907.1 million and unrealized losses of $85.4 million reflecting an average price of 98 at December 31, 2014. Of this portfolio, 77% was investment grade (rated AAA through BBB-) at December 31, 2014, with associated unrealized losses of $44.4 million. The unrealized losses on these securities can primarily be attributed to changes in market interest rates and changes in credit spreads since the securities were acquired.
For those securities that had been in a continuous unrealized loss position greater than or equal to twelve months, our consolidated portfolio held 429 securities with a carrying value of $2,731.6 million and unrealized losses of $225.4 million. The average rating of this portfolio was A with an average price of 92 at December 31, 2014. Of the $225.4 million in unrealized losses, the corporate sector accounts for $113.0 million in unrealized losses with an average price of 91 and an average credit rating of BBB+. The remaining unrealized losses consist primarily of $59.9 million within the commercial mortgage-backed securities sector with an average price of 87 and an average credit rating of A-. The unrealized losses on these securities can primarily be attributed to changes in market interest rates and changes in credit spreads since the securities were acquired.

Because we expected to recover our amortized cost, it was not our intent to sell the fixed maturity available-for-sale securities with unrealized losses and it was not more likely than not that we would be required to sell these securities before recovery of the amortized cost, which may be maturity, we did not consider these investments to be other-than-temporarily impaired at December 31, 2014.



264


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

Net Unrealized Gains and Losses on Available-for-Sale Securities and Derivative Instruments

The net unrealized gains and losses on investments in fixed maturities available-for-sale, equity securities available-for-sale and derivative instruments in cash flow hedge relationships are reported as a separate component of stockholder’s equity. The cumulative amount of net unrealized gains and losses on available-for-sale securities and derivative instruments in cash flow hedge relationships net of adjustments related to DAC and related actuarial balances and applicable income taxes was as follows:

 
 
December 31, 2015
 
December 31, 2014
 
 
(in millions)
Net unrealized gains on fixed maturities, available-for-sale (1)
$
1,153.0
 
$
2,712.3
Noncredit component of impairment losses on fixed maturities, available-for-sale
 
(146.2)
 
 
(175.4)
Net unrealized losses on equity securities, available-for-sale
 
(8.4)
 
 
(4.2)
Adjustments for assumed changes in amortization patterns
 
(127.0)
 
 
(346.8)
Adjustments for assumed changes in policyholder liabilities
 
(214.2)
 
 
(849.3)
Net unrealized gains on derivative instruments
 
217.0
 
 
203.8
Net unrealized gains on equity method subsidiaries and noncontrolling interest
 
 
 
 
 
 
adjustments
 
70.4
 
 
42.9
Provision for deferred income taxes
 
(329.4)
 
 
(553.5)
Net unrealized gains on available-for-sale securities and derivative instruments
$
615.2
 
$
1,029.8

(1)
Excludes net unrealized gains (losses) on fixed maturities, available-for-sale included in fair value hedging relationships.

Mortgage Loans

Mortgage loans consist of commercial and residential mortgage loans. We evaluate risks inherent in our commercial mortgage loans in two classes: (1) brick and mortar property loans, including mezzanine loans, where we analyze the property's rent payments as support for the loan, and (2) credit tenant loans (“CTL”), where we rely on the credit analysis of the tenant for the repayment of the loan. We evaluate risks inherent in our residential mortgage loan portfolio in two classes: (1) home equity mortgages and (2) first lien mortgages. The carrying amount of our mortgage loan portfolio was as follows:

 
 
December 31, 2015
 
December 31, 2014
 
 
(in millions)
Commercial mortgage loans
$
11,222.4
 
$
10,684.0
Residential mortgage loans
 
620.0
 
 
536.4
 
Total amortized cost
 
11,842.4
 
 
11,220.4
 
 
 
 
 
 
 
Valuation allowance
 
(51.4)
 
 
(56.0)
Total carrying value
$
11,791.0
 
$
11,164.4

We periodically purchase mortgage loans as well as sell mortgage loans we have originated. We purchased $227.3 million, $99.0 million and $44.9 million of residential mortgage loans in 2015, 2014 and 2013, respectively. We sold $0.0 million, $34.6 million and $0.0 million of residential mortgage loans in 2015, 2014 and 2013, respectively. We purchased $193.6 million, $57.3 million and $166.1 million of commercial mortgage loans in 2015, 2014 and 2013, respectively. We sold $1.0 million, $0.2 million and $13.0 million of commercial mortgage loans in 2015, 2014 and 2013, respectively.


265


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

Our commercial mortgage loan portfolio consists primarily of non-recourse, fixed rate mortgages on stabilized properties. Our commercial mortgage loan portfolio is diversified by geographic region and specific collateral property type as follows:
 
December 31, 2015
 
 
December 31, 2014
 
 
Amortized
 
Percent
 
Amortized
 
Percent
 
cost
 
of total
 
cost
 
of total
 
($ in millions)
 
Geographic distribution
 
 
 
 
 
 
 
 
 
 
 
 
 
New England
$
509.4
 
 
4.5
%
 
$
528.0
 
 
4.9
%
Middle Atlantic
 
3,075.6
 
 
27.4
 
 
 
2,951.0
 
 
27.7
 
East North Central
 
451.8
 
 
4.0
 
 
 
442.1
 
 
4.1
 
West North Central
 
264.3
 
 
2.4
 
 
 
233.3
 
 
2.2
 
South Atlantic
 
2,072.7
 
 
18.5
 
 
 
1,970.9
 
 
18.5
 
East South Central
 
215.1
 
 
1.9
 
 
 
197.4
 
 
1.8
 
West South Central
 
1,120.6
 
 
10.0
 
 
 
1,023.9
 
 
9.6
 
Mountain
 
898.8
 
 
8.0
 
 
 
772.0
 
 
7.2
 
Pacific
 
2,614.1
 
 
23.3
 
 
 
2,565.4
 
 
24.0
 
Total
$
11,222.4
 
 
100.0
%
 
$
10,684.0
 
 
100.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property type distribution
 
 
 
 
 
 
 
 
 
 
 
 
 
Office
$
4,010.0
 
 
35.7
%
 
$
3,646.1
 
 
34.1
%
Retail
 
2,521.6
 
 
22.5
 
 
 
2,512.1
 
 
23.5
 
Industrial
 
1,840.9
 
 
16.4
 
 
 
1,916.1
 
 
18.0
 
Apartments
 
2,474.2
 
 
22.0
 
 
 
2,200.5
 
 
20.6
 
Hotel
 
320.5
 
 
2.9
 
 
 
331.5
 
 
3.1
 
Mixed use/other
 
55.2
 
 
0.5
 
 
 
77.7
 
 
0.7
 
Total
$
11,222.4
 
 
100.0
%
 
$
10,684.0
 
 
100.0
%

Our residential mortgage loan portfolio is composed of home equity mortgages with an amortized cost of $218.8 million and $283.4 million and first lien mortgages with an amortized cost of $401.2 million and $253.0 million as of December 31, 2015 and December 31, 2014, respectively. Our residential home equity mortgages are generally second lien mortgages comprised of closed-end loans and lines of credit.
Mortgage Loan Credit Monitoring
Commercial Credit Risk Profile Based on Internal Rating
We actively monitor and manage our commercial mortgage loan portfolio. All commercial mortgage loans are analyzed regularly and substantially all are internally rated, based on a proprietary risk rating cash flow model, in order to monitor the financial quality of these assets. The model stresses expected cash flows at various levels and at different points in time depending on the durability of the income stream, which includes our assessment of factors such as location (macro and micro markets), tenant quality and lease expirations. Our internal rating analysis presents expected losses in terms of a Standard & Poor’s (“S&P”) bond equivalent rating. As the credit risk for commercial mortgage loans increases, we adjust our internal ratings downward with loans in the category “B+ and below” having the highest risk for credit loss. Internal ratings on commercial mortgage loans are updated at least annually and potentially more often for certain loans with material changes in collateral value or occupancy and for loans on an internal “watch list”.
Commercial mortgage loans that require more frequent and detailed attention than other loans in our portfolio are identified and placed on an internal “watch list”. Among the criteria that would indicate a potential problem are significant negative changes in ratios of loan to value or contract rents to debt service, major tenant vacancies or bankruptcies, borrower sponsorship problems, late payments, delinquent taxes and loan relief/restructuring requests.


266


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

The amortized cost of our commercial mortgage loan portfolio by credit risk, as determined by our internal rating system expressed in terms of an S&P bond equivalent rating, was as follows:
 
 
December 31, 2015
 
 
Brick and mortar
 
CTL
 
Total
 
 
(in millions)
A- and above
$
9,825.3
 
$
224.0
 
$
10,049.3
BBB+ thru BBB-
 
870.1
 
 
119.5
 
 
989.6
BB+ thru BB-
 
158.6
 
 
0.1
 
 
158.7
B+ and below
 
24.1
 
 
0.7
 
 
24.8
Total
$
10,878.1
 
$
344.3
 
$
11,222.4
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2014
 
 
Brick and mortar
 
CTL
 
Total
 
 
(in millions)
A- and above
$
9,098.6
 
$
168.8
 
$
9,267.4
BBB+ thru BBB-
 
1,019.4
 
 
178.5
 
 
1,197.9
BB+ thru BB-
 
148.3
 
 
0
 
 
148.3
B+ and below
 
68.8
 
 
1.6
 
 
70.4
Total
$
10,335.1
 
$
348.9
 
$
10,684.0

Residential Credit Risk Profile Based on Performance Status

Our residential mortgage loan portfolio is monitored based on performance of the loans. Monitoring on a residential mortgage loan increases when the loan is delinquent or earlier if there is an indication of impairment. We define non-performing residential mortgage loans as loans 90 days or greater delinquent or on non-accrual status.

The amortized cost of our performing and non-performing residential mortgage loans was as follows:
 
 
December 31, 2015
 
 
Home equity
 
First liens
 
Total
 
 
(in millions)
Performing
$
208.0
 
$
396.0
 
$
604.0
Nonperforming
 
10.8
 
 
5.2
 
 
16.0
Total
$
218.8
 
$
401.2
 
$
620.0
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2014
 
 
Home equity
 
First liens
 
Total
 
 
(in millions)
Performing
$
268.4
 
$
247.6
 
$
516.0
Nonperforming
 
15.0
 
 
5.4
 
 
20.4
Total
$
283.4
 
$
253.0
 
$
536.4
Non-Accrual Mortgage Loans
Commercial and residential mortgage loans are placed on non-accrual status if we have concern regarding the collectability of future payments or if a loan has matured without being paid off or extended. Factors considered may include conversations with the borrower, loss of major tenant, bankruptcy of borrower or major tenant, decreased property cash flow for commercial mortgage loans or number of days past due and other circumstances for residential mortgage loans. Based on an assessment as to the collectability of the principal, a determination is made to apply any payments received either against the principal or according to the contractual terms of the loan. When a loan is placed on nonaccrual status, the accrued unpaid interest receivable is reversed against interest income. Accrual of interest resumes after factors resulting in doubts about collectability have improved.

267


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

The amortized cost of mortgage loans on non-accrual status was as follows:
 
 
 
December 31, 2015
 
December 31, 2014
 
 
 
(in millions)
Commercial:
 
 
 
 
 
 
Brick and mortar
$
—
 
$
9.6
Residential:
 
 
 
 
 
 
Home equity
 
10.8
 
 
15.0
 
First liens
 
5.2
 
 
5.4
Total
$
16.0
 
$
30.0

The aging of our mortgage loans, based on amortized cost, was as follows:
 
 
December 31, 2015
 
 
 
 
 
 
 
90 days or
 
 
 
 
 
 
 
 
 
 
 
30-59 days
 
60-89 days
 
more past
 
Total past
 
 
 
 
 
 
 
 
past due
 
past due
 
due
 
due
 
Current
 
Total loans
 
 
(in millions)
Commercial-brick and mortar
$
—
 
$
—
 
$
—
 
$
—
 
$
10,878.1
 
$
10,878.1
Commercial-CTL
 
—
 
 
—
 
 
—
 
 
—
 
 
344.3
 
 
344.3
Residential-home equity
 
2.0
 
 
1.0
 
 
0.6
 
 
3.6
 
 
215.2
 
 
218.8
Residential-first liens
 
—
 
 
0.1
 
 
4.0
 
 
4.1
 
 
397.1
 
 
401.2
Total
$
2.0
 
$
1.1
 
$
4.6
 
$
7.7
 
$
11,834.7
 
$
11,842.4
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2014
 
 
 
 
 
 
 
90 days or
 
 
 
 
 
 
 
 
 
 
 
30-59 days
 
60-89 days
 
more past
 
Total past
 
 
 
 
 
 
 
 
past due
 
past due
 
due
 
due
 
Current
 
Total loans
 
 
(in millions)
Commercial-brick and mortar
$
—
 
$
4.5
 
$
0.7
 
$
5.2
 
$
10,329.9
 
$
10,335.1
Commercial-CTL
 
—
 
 
—
 
 
—
 
 
—
 
 
348.9
 
 
348.9
Residential-home equity
 
2.3
 
 
1.2
 
 
3.4
 
 
6.9
 
 
276.5
 
 
283.4
Residential-first liens
 
0.3
 
 
1.1
 
 
4.3
 
 
5.7
 
 
247.3
 
 
253.0
Total
$
2.6
 
$
6.8
 
$
8.4
 
$
17.8
 
$
11,202.6
 
$
11,220.4

We did not have any mortgage loans that were 90 days or more past due and still accruing interest as of either December 31, 2015 or December 31, 2014.
Mortgage Loan Valuation Allowance
We establish a valuation allowance to provide for the risk of credit losses inherent in our portfolio. The valuation allowance includes loan specific reserves for loans that are deemed to be impaired as well as reserves for pools of loans with similar risk characteristics where a property risk or market specific risk has not been identified but for which we anticipate a loss may occur. Mortgage loans on real estate are considered impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due according to contractual terms of the loan agreement. When we determine that a loan is impaired, a valuation allowance is established equal to the difference between the carrying amount of the mortgage loan and the estimated value reduced by the cost to sell. Estimated value is based on either the present value of the expected future cash flows discounted at the loan's effective interest rate, the loan's observable market price or fair value of the collateral. Subsequent changes in the estimated value are reflected in the valuation allowance. Amounts on loans deemed to be uncollectible are charged off and removed from the valuation allowance. The change in the valuation allowance provision is included in net realized capital gains (losses) on our consolidated statements of operations.


268


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

The valuation allowance is maintained at a level believed adequate by management to absorb estimated probable credit losses. Management's periodic evaluation and assessment of the valuation allowance adequacy is based on known and inherent risks in the portfolio, adverse situations that may affect a borrower's ability to repay, the estimated value of the underlying collateral, composition of the loan portfolio, portfolio delinquency information, underwriting standards, peer group information, current economic conditions, loss experience and other relevant factors. The evaluation of our impaired loan component is subjective, as it requires the estimation of timing and amount of future cash flows expected to be received on impaired loans.

We review our commercial mortgage loan portfolio and analyze the need for a valuation allowance for any loan that is delinquent for 60 days or more, in process of foreclosure, restructured, on the internal “watch list” or that currently has a valuation allowance. In addition to establishing allowance levels for specifically identified impaired commercial mortgage loans, management determines an allowance for all other loans in the portfolio for which historical experience and current economic conditions indicate certain losses exist. These loans are segregated by risk rating level with an estimated loss ratio applied against each risk rating level. The loss ratio is generally based upon historical loss experience for each risk rating level as adjusted for certain current environmental factors management believes to be relevant.

For our residential mortgage loan portfolio, we separate the loans into several homogeneous pools, each of which consist of loans of a similar nature including but not limited to loans similar in collateral, term and structure and loan purpose or type. We evaluate loan pools based on aggregated risk ratings, estimated specific loss potential in the different classes of credits, and historical loss experience by pool type. We adjust these quantitative factors for qualitative factors of present conditions. Qualitative factors include items such as economic and business conditions, changes in the portfolio, value of underlying collateral and concentrations. Residential mortgage loan pools exclude loans that have been restructured or impaired, as those loans are evaluated individually.


269


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

A rollforward of our valuation allowance and ending balances of the allowance and loan balance by basis of impairment method was as follows:
 
 
 
Commercial
 
Residential
 
Total
 
 
 
(in millions)
For the year ended December 31, 2015
 
 
 
 
 
 
 
 
Beginning balance
$
26.9
 
$
29.1
 
$
56.0
 
Provision
 
3.9
 
 
0.1
 
 
4.0
 
Charge-offs
 
(3.4)
 
 
(8.9)
 
 
(12.3)
 
Recoveries
 
0.1
 
 
3.6
 
 
3.7
Ending balance
$
27.5
 
$
23.9
 
$
51.4
Allowance ending balance by basis of impairment method:
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
—
 
$
7.5
 
$
7.5
 
Collectively evaluated for impairment
 
27.5
 
 
16.4
 
 
43.9
Allowance ending balance
$
27.5
 
$
23.9
 
$
51.4
Loan balance by basis of impairment method:
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
—
 
$
23.1
 
$
23.1
 
Collectively evaluated for impairment
 
11,222.4
 
 
596.9
 
 
11,819.3
Loan ending balance
$
11,222.4
 
$
620.0
 
$
11,842.4
 
 
 
 
 
 
 
 
 
 
 
For the year ended December 31, 2014
 
 
 
 
 
 
 
 
Beginning balance
$
28.7
 
$
40.3
 
$
69.0
 
Provision
 
(0.9)
 
 
7.9
 
 
7.0
 
Charge-offs
 
(0.9)
 
 
(22.7)
 
 
(23.6)
 
Recoveries
 
—
 
 
3.6
 
 
3.6
Ending balance
$
26.9
 
$
29.1
 
$
56.0
Allowance ending balance by basis of impairment method:
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
2.4
 
$
8.8
 
$
11.2
 
Collectively evaluated for impairment
 
24.5
 
 
20.3
 
 
44.8
Allowance ending balance
$
26.9
 
$
29.1
 
$
56.0
Loan balance by basis of impairment method:
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
4.4
 
$
26.4
 
$
30.8
 
Collectively evaluated for impairment
 
10,679.6
 
 
510.0
 
 
11,189.6
Loan ending balance
$
10,684.0
 
$
536.4
 
$
11,220.4
 
 
 
 
 
 
 
 
 
 
 
For the year ended December 31, 2013
 
 
 
 
 
 
 
 
Beginning balance
$
51.8
 
$
44.4
 
$
96.2
 
Provision
 
4.1
 
 
11.1
 
 
15.2
 
Charge-offs
 
(28.0)
 
 
(18.3)
 
 
(46.3)
 
Recoveries
 
0.8
 
 
3.1
 
 
3.9
Ending balance
$
28.7
 
$
40.3
 
$
69.0
Allowance ending balance by basis of impairment method:
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
2.4
 
$
9.8
 
$
12.2
 
Collectively evaluated for impairment
 
26.3
 
 
30.5
 
 
56.8
Allowance ending balance
$
28.7
 
$
40.3
 
$
69.0
Loan balance by basis of impairment method:
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
4.4
 
$
31.4
 
$
35.8
 
Collectively evaluated for impairment
 
10,278.1
 
 
574.3
 
 
10,852.4
Loan ending balance
$
10,282.5
 
$
605.7
 
$
10,888.2

270


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

Impaired Mortgage Loans

Impaired mortgage loans are loans with a related specific valuation allowance, loans whose carrying amount has been reduced to the expected collectible amount because the impairment has been considered other than temporary or a loan modification has been classified as a troubled debt restructuring (“TDR”). Based on an assessment as to the collectability of the principal, a determination is made to apply any payments received either against the principal or according to the contractual terms of the loan. Our recorded investment in and unpaid principal balance of impaired loans along with the related loan specific allowance for losses, if any, and the average recorded investment and interest income recognized during the time the loans were impaired were as follows:
 
 
December 31, 2015
 
 
 
 
Unpaid
 
 
 
 
Recorded
 
principal
 
Related
 
 
investment
 
balance
 
allowance
 
 
(in millions)
With no related allowance recorded:
 
 
 
 
 
 
 
 
 
Residential-first liens
$
3.6
 
$
3.6
 
$
—
With an allowance recorded:
 
 
 
 
 
 
 
 
 
Residential-home equity
 
13.7
 
 
14.8
 
 
7.0
 
Residential-first liens
 
5.8
 
 
5.8
 
 
0.5
Total:
 
 
 
 
 
 
 
 
 
Residential
$
23.1
 
$
24.2
 
$
7.5
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2014
 
 
 
 
Unpaid
 
 
 
 
Recorded
 
principal
 
Related
 
 
investment
 
balance
 
allowance
 
 
(in millions)
With no related allowance recorded:
 
 
 
 
 
 
 
 
 
Commercial-brick and mortar
$
5.2
 
$
6.7
 
$
—
 
Residential-first liens
 
3.4
 
 
3.4
 
 
—
With an allowance recorded:
 
 
 
 
 
 
 
 
 
Commercial-brick and mortar
 
4.4
 
 
4.4
 
 
2.4
 
Residential-home equity
 
16.5
 
 
17.1
 
 
8.2
 
Residential-first liens
 
6.5
 
 
6.4
 
 
0.6
Total:
 
 
 
 
 
 
 
 
 
Commercial
$
9.6
 
$
11.1
 
$
2.4
 
Residential
$
26.4
 
$
26.9
 
$
8.8


271


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015
 
 
Average
 
 
 
 
recorded
 
Interest income
 
 
investment
 
recognized
 
 
(in millions)
For the year ended December 31, 2015
 
 
 
 
 
With no related allowance recorded:
 
 
 
 
 
 
Commercial-brick and mortar
$
2.6
 
$
—
 
Residential-first liens
 
3.5
 
 
—
With an allowance recorded:
 
 
 
 
 
 
Commercial-brick and mortar
 
2.2
 
 
0.1
 
Residential-home equity
 
15.1
 
 
0.4
 
Residential-first liens
 
6.1
 
 
0.2
Total:
 
 
 
 
 
 
Commercial
$
4.8
 
$
0.1
 
Residential
$
24.7
 
$
0.6
 
 
 
 
 
 
 
For the year ended December 31, 2014
 
 
 
 
 
With no related allowance recorded:
 
 
 
 
 
 
Commercial-brick and mortar
$
13.4
 
$
—
 
Residential-first liens
 
4.0
 
 
—
With an allowance recorded:
 
 
 
 
 
 
Commercial-brick and mortar
 
4.4
 
 
0.2
 
Residential-home equity
 
18.0
 
 
0.6
 
Residential-first liens
 
6.9
 
 
0.2
Total:
 
 
 
 
 
 
Commercial
$
17.8
 
$
0.2
 
Residential
$
28.9
 
$
0.8
 
 
 
 
 
 
 
For the year ended December 31, 2013
 
 
 
 
 
With no related allowance recorded:
 
 
 
 
 
 
Commercial-brick and mortar
$
22.2
 
$
0.2
 
Residential-first liens
 
7.2
 
 
—
With an allowance recorded:
 
 
 
 
 
 
Commercial-brick and mortar
 
4.4
 
 
0.3
 
Residential-home equity
 
20.2
 
 
1.1
 
Residential-first liens
 
7.1
 
 
0.2
Total:
 
 
 
 
 
 
Commercial
$
26.6
 
$
0.5
 
Residential
$
34.5
 
$
1.3
Mortgage Loan Modifications
Our commercial and residential mortgage loan portfolios include loans that have been modified. We assess loan modifications on a case-by-case basis to evaluate whether a TDR has occurred. The commercial mortgage loan TDRs were modified to delay or reduce principal payments and to reduce or delay interest payments. For these TDR assessments, we have determined the loan rates are now considered below market based on current circumstances. The commercial mortgage loan modifications resulted in delayed cash receipts and a decrease in interest income. The residential mortgage loan TDRs include modifications of interest-only payment periods, delays in principal balloon payments, and interest rate reductions. Residential mortgage loan modifications resulted in delayed or decreased cash receipts and a decrease in interest income.


272


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

The following table includes information about outstanding loans that were modified and met the criteria of a TDR during the periods indicated. In addition, the table includes information for loans that were modified and met the criteria of a TDR within the past twelve months that were in payment default during the periods indicated:
 
 
For the year ended December 31, 2015
 
 
TDRs
 
TDRs in payment default
 
 
Number of
 
Recorded
 
Number of
 
Recorded
 
 
contracts
 
investment
 
contracts
 
investment
 
 
 
 
(in millions)
 
 
 
(in millions)
Residential-home equity
14
 
$
0.6
 
2
 
$
—
Total
14
 
$
0.6
 
2
 
$
—
 
 
 
 
 
 
 
 
 
 
 
 
 
For the year ended December 31, 2014
 
 
TDRs
 
TDRs in payment default
 
 
Number of
 
Recorded
 
Number of
 
Recorded
 
 
contracts
 
investment
 
contracts
 
investment
 
 
 
 
(in millions)
 
 
 
(in millions)
Commercial-brick and mortar
2
 
$
5.1
 
1
 
$
0.7
Residential-home equity
75
 
 
3.0
 
3
 
 
—
Residential-first liens
1
 
 
0.1
 
—
 
 
—
Total
78
 
$
8.2
 
4
 
$
0.7
 
 
 
 
 
 
 
 
 
 
 
 
 
For the year ended December 31, 2013
 
 
TDRs
 
TDRs in payment default
 
 
Number of
 
Recorded
 
Number of
 
Recorded
 
 
contracts
 
investment
 
contracts
 
investment
 
 
 
 
(in millions)
 
 
 
(in millions)
Commercial-brick and mortar
2
 
$
0.9
 
—
 
$
—
Residential-home equity
69
 
 
3.8
 
19
 
 
—
Residential-first liens
3
 
 
0.6
 
1
 
 
0.3
Total
74
 
$
5.3
 
20
 
$
0.3

Commercial mortgage loans that have been designated as a TDR have been previously reserved for in the mortgage loan valuation allowance at the estimated fair value of the underlying collateral reduced by the cost to sell.

Residential mortgage loans that have been designated as a TDR are specifically reserved for in the mortgage loan valuation allowance if losses result from the modification. Residential mortgage loans that have defaulted or have been discharged through bankruptcy are reduced to the expected collectible amount.

Real Estate
Depreciation expense on invested real estate was $49.3 million, $46.4 million and $44.4 million in 2015, 2014 and 2013, respectively. Accumulated depreciation was $409.1 million and $387.8 million as of December 31, 2015 and 2014, respectively.


273


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

Other Investments
Other investments include interests in unconsolidated entities, joint ventures and partnerships and properties owned jointly with venture partners and operated by the partners. Such investments are generally accounted for using the equity method. In applying the equity method, we record our share of income or loss reported by the equity investees in net investment income. Summarized financial information for these unconsolidated entities was as follows:
 
 
 
 
 
December 31,
 
 
 
 
 
2015
 
2014
 
 
 
 
 
(in millions)
Total assets
 
 
 
$
60,234.7
 
$
14,066.7
Total liabilities
 
 
 
 
14,165.9
 
 
3,773.7
Total equity
 
 
 
$
46,068.8
 
$
10,293.0
Net investment in unconsolidated entities
 
 
 
$
466.1
 
$
521.6
 
 
 
 
 
 
 
 
 
 
 
 
For the year ended December 31,
 
 
2015
 
2014
 
2013
 
 
(in millions)
Total revenues
$
7,693.6
 
$
1,485.2
 
$
773.7
Net income
 
4,443.0
 
 
747.3
 
 
368.3
Our share of net income of unconsolidated entities
 
57.4
 
 
52.9
 
 
43.9
Derivative assets are carried at fair value and reported as a component of other investments. Certain seed money investments are also carried at fair value and reported as a component of other investments, with changes in fair value included in net realized capital gains (losses) on our consolidated statements of operations.
Securities Posted as Collateral
We posted $935.7 million in fixed maturities, available-for-sale securities at December 31, 2015, to satisfy collateral requirements primarily associated with a reinsurance arrangement, our derivative credit support annex (collateral) agreements, Futures Commission Merchant (“FCM”) agreements and a lending arrangement. In addition, we posted $2,705.5 million in commercial mortgage loans and home equity mortgages as of December 31, 2015, to satisfy collateral requirements associated with our obligation under funding agreements with the Federal Home Loan Bank of Des Moines. Since we did not relinquish ownership rights on these instruments, they are reported as fixed maturities, available-for-sale and mortgage loans, respectively, on our consolidated statements of financial position. Of the securities posted as collateral, $295.2 million can be sold or repledged by the secured party.
Balance Sheet Offsetting
Financial assets subject to master netting agreements or similar agreements were as follows:
 
 
 
 
 
 
Gross amounts not offset in the
 
 
 
 
 
 
 
 
 
consolidated statements
 
 
 
 
 
 
 
 
 
of financial position
 
 
 
 
 
 
Gross amount
 
 
 
 
 
 
 
 
 
 
of recognized
 
Financial
 
Collateral
 
 
 
 
 
 
assets (1)
 
instruments (2)
 
received
 
Net amount
 
 
 
(in millions)
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
Derivative assets
$
656.5
 
$
(409.7)
 
$
(227.7)
 
$
19.1
December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
Derivative assets
$
650.8
 
$
(478.9)
 
$
(159.4)
 
$
12.5
(1)
The gross amount of recognized derivative assets is reported with other investments on the consolidated statements of financial position. The gross amount of derivative assets is not netted against offsetting liabilities for presentation on the consolidated statements of financial position.

274


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

(2)
Represents amount of offsetting derivative liabilities that are subject to an enforceable master netting agreement or similar agreement that are not netted against the gross derivative assets for presentation on the consolidated statements of financial position.

Financial liabilities subject to master netting agreements or similar agreements were as follows:
 
 
 
 
 
 
Gross amounts not offset in the
 
 
 
 
 
 
 
 
 
consolidated statements
 
 
 
 
 
 
 
 
 
of financial position
 
 
 
 
 
 
Gross amount
 
 
 
 
 
 
 
 
 
 
of recognized
 
Financial
 
Collateral
 
 
 
 
 
 
liabilities (1)
 
instruments (2)
 
pledged
 
Net amount
 
 
 
(in millions)
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
Derivative liabilities
$
729.0
 
$
(409.7)
 
$
(253.9)
 
$
65.4
December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
Derivative liabilities
$
763.8
 
$
(478.9)
 
$
(220.6)
 
$
64.3

(1)
The gross amount of recognized derivative liabilities is reported with other liabilities on the consolidated statements of financial position. The above excludes $381.4 million and $395.0 million of derivative liabilities as of December 31, 2015 and December 31, 2014, respectively, which are primarily embedded derivatives that are not subject to master netting agreements or similar agreements. The gross amount of derivative liabilities is not netted against offsetting assets for presentation on the consolidated statements of financial position.
(2)
Represents amount of offsetting derivative assets that are subject to an enforceable master netting agreement or similar agreement that are not netted against the gross derivative liabilities for presentation on the consolidated statements of financial position.
The financial instruments that are subject to master netting agreements or similar agreements include right of setoff provisions. Derivative instruments include provisions to setoff positions covered under the agreements with the same counterparties and provisions to setoff positions outside of the agreements with the same counterparties in the event of default by one of the parties. Derivative instruments also include collateral provisions. Collateral received and pledged is generally settled daily with each counterparty. See Note 6, Derivative Financial Instruments, for further details.
Repurchase and reverse repurchase agreements include provisions to setoff other repurchase and reverse repurchase balances with the same counterparty. Repurchase and reverse repurchase agreements also include collateral provisions with the counterparties. For reverse repurchase agreements we require the counterparties to pledge collateral with a value greater than the amount of cash transferred. We have the right but do not sell or repledge collateral received in reverse repurchase agreements. Repurchase agreements are structured as secured borrowings for all counterparties. We pledge fixed maturities available-for-sale, which the counterparties have the right to sell or repledge. Interest incurred on repurchase agreements is reported as part of operating expense on the consolidated statements of operations. Net proceeds related to repurchase agreements are reported as a component of financing activities on the consolidated statements of cash flows. We did not have any outstanding repurchase or reverse repurchase agreements as of December 31, 2015 and December 31, 2014.
6. Derivative Financial Instruments
Derivatives are generally used to hedge or reduce exposure to market risks associated with assets held or expected to be purchased or sold and liabilities incurred or expected to be incurred. Derivatives are used to change the characteristics of our asset/liability mix consistent with our risk management activities. Derivatives are also used in asset replication strategies.
Types of Derivative Instruments
Interest Rate Contracts
Interest rate risk is the risk we will incur economic losses due to adverse changes in interest rates. Sources of interest rate risk include the difference between the maturity and interest rate changes of assets with the liabilities they support, timing differences between the pricing of liabilities and the purchase or procurement of assets and changing cash flow profiles from original projections due to prepayment options embedded within asset and liability contracts. We use various derivatives to manage our exposure to fluctuations in interest rates.

275


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

Interest rate swaps are contracts in which we agree with other parties to exchange, at specified intervals, the difference between fixed rate and floating rate interest amounts based upon designated market rates or rate indices and an agreed upon notional principal amount. Generally, no cash is exchanged at the outset of the contract and no principal payments are made by any party. Cash is paid or received based on the terms of the swap. We use interest rate swaps primarily to more closely match the interest rate characteristics of assets and liabilities and to mitigate the risks arising from timing mismatches between assets and liabilities (including duration mismatches). We also use interest rate swaps to hedge against changes in the value of assets we anticipate acquiring and other anticipated transactions and commitments. Interest rate swaps are used to hedge against changes in the value of the guaranteed minimum withdrawal benefit (“GMWB”) liability. The GMWB rider on our variable annuity products provides for guaranteed minimum withdrawal benefits regardless of the actual performance of various equity and/or fixed income funds available with the product.

Interest rate options, including interest rate caps and interest rate floors, which can be combined to form interest rate collars, are contracts that entitle the purchaser to pay or receive the amounts, if any, by which a specified market rate exceeds a cap strike interest rate, or falls below a floor strike interest rate, respectively, at specified dates. We use interest rate collars to manage interest rate risk related to guaranteed minimum interest rate liabilities in our individual annuities contracts and lapse risk associated with higher interest rates.

A swaption is an option to enter into an interest rate swap at a future date. We purchase swaptions to offset or modify existing exposures. Swaptions provide us the benefit of the agreed-upon strike rate if the market rates for liabilities are higher, with the flexibility to enter into the current market rate swap if the market rates for liabilities are lower. Swaptions not only hedge against the downside risk, but also allow us to take advantage of any upside benefits.

In exchange‑traded futures transactions, we agree to purchase or sell a specified number of contracts, the values of which are determined by the values of designated classes of securities, and to post variation margin on a daily basis in an amount equal to the difference in the daily market values of those contracts. We enter into exchange‑traded futures with regulated futures commissions merchants who are members of a trading exchange. We have used exchange‑traded futures to reduce market risks from changes in interest rates and to alter mismatches between the assets in a portfolio and the liabilities supported by those assets.

Foreign Exchange Contracts

Foreign currency risk is the risk we will incur economic losses due to adverse fluctuations in foreign currency exchange rates. This risk arises from foreign currency-denominated funding agreements we issue and foreign currency-denominated fixed maturities we invest in. We use currency swaps to manage our exposure to foreign currency exchange rates.

Currency swaps are contracts in which we agree with other parties to exchange, at specified intervals, a series of principal and interest payments in one currency for that of another currency. Generally, the principal amount of each currency is exchanged at the beginning and termination of the currency swap by each party. The interest payments are primarily fixed-to-fixed rate; however, they may also be fixed-to-floating rate or floating-to-fixed rate. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made by one counterparty for payments made in the same currency at each due date. We use currency swaps to reduce market risks from changes in currency exchange rates with respect to investments or liabilities denominated in foreign currencies that we either hold or intend to acquire or sell.

Equity Contracts

Equity risk is the risk that we will incur economic losses due to adverse fluctuations in common stock. We use various derivatives to manage our exposure to equity risk, which arises from products in which the interest we credit is tied to an external equity index as well as products subject to minimum contractual guarantees.

We purchase equity call spreads to hedge the equity participation rates promised to contractholders in conjunction with our fixed deferred annuity and universal life products that credit interest based on changes in an external equity index. We use exchange-traded futures and equity put options to hedge against changes in the value of the GMWB liability related to the GMWB rider on our variable annuity product, as previously explained. The premium associated with certain options is paid quarterly over the life of the option contract.


276


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

Credit Contracts

Credit risk relates to the uncertainty associated with the continued ability of a given obligor to make timely payments of principal and interest. We use credit default swaps to enhance the return on our investment portfolio by providing comparable exposure to fixed income securities that might not be available in the primary market. They are also used to hedge credit exposures in our investment portfolio. Credit derivatives are used to sell or buy credit protection on an identified name or names on an unfunded or synthetic basis in return for receiving or paying a quarterly premium. The premium generally corresponds to a referenced name's credit spread at the time the agreement is executed. In cases where we sell protection, we also buy a quality cash bond to match against the credit default swap, thereby entering into a synthetic transaction replicating a cash security. When selling protection, if there is an event of default by the referenced name, as defined by the agreement, we are obligated to pay the counterparty the referenced amount of the contract and receive in return the referenced security in a principal amount equal to the notional value of the credit default swap.

Total return swaps are contracts in which we agree with other parties to exchange, at specified intervals, an amount determined by the difference between the previous price and the current price of a reference asset based upon an agreed upon notional principal amount plus an additional amount determined by the financing spread.  We currently use futures traded on an exchange (“exchange traded”) and total return swaps referencing equity indices to hedge our portfolio from potential credit losses related to systemic events.

Other Contracts

Embedded Derivatives. We purchase or issue certain financial instruments or products that contain a derivative instrument that is embedded in the financial instrument or product. When it is determined that the embedded derivative possesses economic characteristics that are not clearly or closely related to the economic characteristics of the host contract and a separate instrument with the same terms would qualify as a derivative instrument, the embedded derivative is bifurcated from the host instrument for measurement purposes. The embedded derivative, which is reported with the host instrument in the consolidated statements of financial position, is carried at fair value.

We have investment contracts in which the return is tied to a leveraged inflation index. We economically hedge the risk associated with these investment contracts.

We offer group annuity contracts that have guaranteed separate accounts as an investment option.

We have structured investment relationships with trusts we have determined to be VIEs, which are consolidated in our financial statements. The notes issued by these trusts include obligations to deliver an underlying security to residual interest holders and the obligations contain an embedded derivative of the forecasted transaction to deliver the underlying security.

We have fixed deferred annuities and universal life contracts that credit interest based on changes in an external equity index. We also have certain variable annuity products with a GMWB rider, which allows the customer to make withdrawals of a specified annual amount, either for a fixed number of years or for the lifetime of the customer, even if the account value is fully exhausted. Declines in the equity markets may increase our exposure to benefits under contracts with the GMWB. We economically hedge the exposure in these contracts, as previously explained.

Exposure

Our risk of loss is typically limited to the fair value of our derivative instruments and not to the notional or contractual amounts of these derivatives. We are also exposed to credit losses in the event of nonperformance of the counterparties. Our current credit exposure is limited to the value of derivatives that have become favorable to us. This credit risk is minimized by purchasing such agreements from financial institutions with high credit ratings and by establishing and monitoring exposure limits. We also utilize various credit enhancements, including collateral and credit triggers to reduce the credit exposure to our derivative instruments.


277


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

Derivatives may be exchange-traded or they may be privately negotiated contracts, which are usually referred to as over-the-counter (“OTC”) derivatives. Certain of our OTC derivatives are cleared and settled through central clearing counterparties (“OTC cleared”), while others are bilateral contracts between two counterparties (“bilateral OTC”). Our derivative transactions are generally documented under International Swaps and Derivatives Association, Inc. (“ISDA”) Master Agreements. Management believes that such agreements provide for legally enforceable set-off and close-out netting of exposures to specific counterparties. Under such agreements, in connection with an early termination of a transaction, we are permitted to set off our receivable from a counterparty against our payables to the same counterparty arising out of all included transactions. For reporting purposes, we do not offset fair value amounts recognized for the right to reclaim cash collateral or the obligation to return cash collateral against fair value amounts recognized for derivative instruments executed with the same counterparties under master netting agreements.

We posted $342.7 million and $271.6 million in cash and securities under collateral arrangements as of December 31, 2015 and December 31, 2014, respectively, to satisfy collateral requirements associated with our derivative credit support agreements and FCM agreements. These amounts include initial margin requirements.

Certain of our derivative instruments contain provisions that require us to maintain an investment grade rating from each of the major credit rating agencies on our debt. If the ratings on our debt were to fall below investment grade, it would be in violation of these provisions and the counterparties to the derivative instruments could request immediate payment or demand immediate and ongoing full overnight collateralization on derivative instruments in net liability positions. The aggregate fair value, inclusive of accrued interest, of all derivative instruments with credit-risk-related contingent features that were in a liability position without regard to netting under derivative credit support annex agreements as of December 31, 2015 and December 31, 2014, was $606.5 million and $656.2 million, respectively. Cleared derivatives have contingent features that require us to post excess margin as required by the FCM. The terms surrounding excess margin vary by FCM agreement. With respect to derivatives containing collateral triggers, we posted collateral and initial margin of $342.7 million and $271.6 million as of December 31, 2015 and December 31, 2014, respectively, in the normal course of business, which reflects netting under derivative agreements. If the credit-risk-related contingent features underlying these agreements were triggered on December 31, 2015, we would be required to post an additional $75.8 million of collateral to our counterparties.

As of December 31, 2015 and December 31, 2014, we had received $211.6 million and $138.7 million, respectively, of cash collateral associated with our derivative credit support annex agreements and FCM agreements, for which we recorded a corresponding liability reflecting our obligation to return the collateral.


278


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

Notional amounts are used to express the extent of our involvement in derivative transactions and represent a standard measurement of the volume of our derivative activity. Notional amounts represent those amounts used to calculate contractual flows to be exchanged and are not paid or received, except for contracts such as currency swaps. Credit exposure represents the gross amount owed to us under derivative contracts as of the valuation date. The notional amounts and credit exposure of our derivative financial instruments by type were as follows:

 
 
December 31, 2015
 
December 31, 2014
 
 
(in millions)
Notional amounts of derivative instruments
 
 
 
 
 
Interest rate contracts:
 
 
 
 
 
 
Interest rate swaps
$
21,704.2
 
$
19,182.6
 
Interest rate options
 
4,900.0
 
 
4,900.0
 
Swaptions
 
159.0
 
 
260.0
 
Interest rate futures
 
162.0
 
 
147.5
Foreign exchange contracts:
 
 
 
 
 
 
Currency swaps
 
1,589.2
 
 
1,835.1
Equity contracts:
 
 
 
 
 
 
Equity options
 
3,604.8
 
 
3,293.4
 
Equity futures
 
514.2
 
 
498.1
Credit contracts:
 
 
 
 
 
 
Credit default swaps
 
1,084.5
 
 
1,234.5
 
Total return swaps
 
90.0
 
 
90.0
 
Futures
 
13.1
 
 
10.4
Other contracts:
 
 
 
 
 
 
Embedded derivatives
 
9,294.1
 
 
8,646.8
Total notional amounts at end of period
$
43,115.1
 
$
40,098.4
 
 
 
 
 
 
 
Credit exposure of derivative instruments
 
 
 
 
 
Interest rate contracts:
 
 
 
 
 
 
Interest rate swaps
$
505.5
 
$
510.8
 
Interest rate options
 
34.1
 
 
41.0
Foreign exchange contracts:
 
 
 
 
 
 
Currency swaps
 
99.8
 
 
87.6
Equity contracts:
 
 
 
 
 
 
Equity options
 
39.9
 
 
30.2
Credit contracts:
 
 
 
 
 
 
Credit default swaps
 
13.4
 
 
13.3
 
Total return swaps
 
0.5
 
 
—
Total gross credit exposure
 
693.2
 
 
682.9
Less: collateral received
 
228.3
 
 
173.9
Net credit exposure
$
464.9
 
$
509.0


279


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

The fair value of our derivative instruments classified as assets and liabilities was as follows:
 
 
 
Derivative assets (1)
 
Derivative liabilities (2)
 
 
 
December 31, 2015
 
December 31, 2014
 
December 31, 2015
 
December 31, 2014
 
 
 
(in millions)
Derivatives designated as hedging
 
 
 
 
 
 
 
 
 
 
 
 
instruments
 
 
 
 
 
 
 
 
 
 
 
Interest rate contracts
$
9.4
 
$
8.8
 
$
132.2
 
$
193.9
Foreign exchange contracts
 
94.1
 
 
80.0
 
 
164.2
 
 
69.1
Total derivatives designated as hedging
 
 
 
 
 
 
 
 
 
 
 
 
instruments
$
103.5
 
$
88.8
 
$
296.4
 
$
263.0
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivatives not designated as hedging
 
 
 
 
 
 
 
 
 
 
 
 
instruments
 
 
 
 
 
 
 
 
 
 
 
Interest rate contracts
$
493.0
 
$
508.6
 
$
255.8
 
$
321.5
Foreign exchange contracts
 
6.1
 
 
9.9
 
 
24.8
 
 
12.0
Equity contracts
 
40.0
 
 
30.2
 
 
112.3
 
 
131.7
Credit contracts
 
13.9
 
 
13.3
 
 
39.7
 
 
35.6
Other contracts
 
—
 
 
—
 
 
381.4
 
 
395.0
Total derivatives not designated as hedging
 
 
 
 
 
 
 
 
 
 
 
 
instruments
 
553.0
 
 
562.0
 
 
814.0
 
 
895.8
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total derivative instruments
$
656.5
 
$
650.8
 
$
1,110.4
 
$
1,158.8

(1) The fair value of derivative assets is reported with other investments on the consolidated statements of financial position.
(2) The fair value of derivative liabilities is reported with other liabilities on the consolidated statements of financial position, with the exception of certain embedded derivative liabilities. Embedded derivative liabilities with a fair value of $151.1 million and $155.9 million as of December 31, 2015 and December 31, 2014, respectively, are reported with contractholder funds on the consolidated statements of financial position.
Credit Derivatives Sold
When we sell credit protection, we are exposed to the underlying credit risk similar to purchasing a fixed maturity security instrument. The majority of our credit derivative contracts sold reference a single name or reference security (referred to as “single name credit default swaps”). The remainder of our credit derivatives reference either a basket or index of securities. These instruments are either referenced in an over-the-counter credit derivative transaction, or embedded within an investment structure that has been fully consolidated into our financial statements.
These credit derivative transactions are subject to events of default defined within the terms of the contract, which normally consist of bankruptcy, failure to pay, or modified restructuring of the reference entity and/or issue. If a default event occurs for a reference name or security, we are obligated to pay the counterparty an amount equal to the notional amount of the credit derivative transaction. As a result, our maximum future payment is equal to the notional amount of the credit derivative. In certain cases, we also have purchased credit protection with identical underlyings to certain of our sold protection transactions. The effect of this purchased protection would reduce our total maximum future payments by $0.0 million as of December 31, 2015 and $10.0 million as of December 31, 2014. These purchased credit derivative transactions had a net asset (liability) fair value of $0.0 million as of December 31, 2015 and $(0.1) million as of December 31, 2014. In certain circumstances, our potential loss could also be reduced by any amount recovered in the default proceedings of the underlying credit name.
We purchased an investment structure with embedded credit features that is fully consolidated into our financial statements. This consolidation results in recognition of the underlying credit derivatives and collateral within the structure, typically high quality fixed maturities that are owned by a special purpose vehicle. These credit derivatives reference several names in a basket structure. In the event of default, the collateral within the structure would typically be liquidated to pay the claims of the credit derivative counterparty.

280


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

The following tables show our credit default swap protection sold by types of contract, types of referenced/underlying asset class and external agency rating for the underlying reference security. The maximum future payments are undiscounted and have not been reduced by the effect of any offsetting transactions, collateral or recourse features described above.
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
Weighted
 
 
 
 
 
 
 
Maximum
 
average
 
 
 
Notional
 
Fair
 
future
 
expected life
 
 
 
amount
 
value
 
payments
 
(in years)
 
 
 
(in millions)
 
 
 
Single name credit default swaps
 
 
 
 
 
 
 
 
 
 
 
 
Corporate debt
 
 
 
 
 
 
 
 
 
 
 
 
 
AAA
$
30.0
 
$
0.8
 
$
30.0
 
 
3.2
 
 
AA
 
74.0
 
 
1.1
 
 
74.0
 
 
2.3
 
 
A
 
195.0
 
 
2.2
 
 
195.0
 
 
2.2
 
 
BBB
 
310.0
 
 
(0.9)
 
 
310.0
 
 
2.9
 
 
BB
 
30.0
 
 
(4.6)
 
 
30.0
 
 
3.1
 
 
CCC
 
10.0
 
 
(6.8)
 
 
10.0
 
 
4.0
 
Government/municipalities
 
 
 
 
 
 
 
 
 
 
 
 
 
AA
 
30.0
 
 
0.6
 
 
30.0
 
 
3.3
 
Sovereign
 
 
 
 
 
 
 
 
 
 
 
 
 
AA
 
10.0
 
 
—
 
 
10.0
 
 
3.7
 
 
BBB
 
40.0
 
 
(0.9)
 
 
40.0
 
 
3.7
Total single name credit default swaps
 
729.0
 
 
(8.5)
 
 
729.0
 
 
2.8
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basket and index credit default swaps
 
 
 
 
 
 
 
 
 
 
 
 
Corporate debt
 
 
 
 
 
 
 
 
 
 
 
 
 
Near default (1)
 
100.4
 
 
(17.7)
 
 
100.4
 
 
1.2
 
Government/municipalities
 
 
 
 
 
 
 
 
 
 
 
 
 
AA
 
30.0
 
 
(1.1)
 
 
30.0
 
 
1.7
 
Structured finance
 
 
 
 
 
 
 
 
 
 
 
 
 
AAA
 
11.9
 
 
—
 
 
11.9
 
 
0.6
Total basket and index credit default swaps
 
142.3
 
 
(18.8)
 
 
142.3
 
 
1.3
Total credit default swap protection sold
$
871.3
 
$
(27.3)
 
$
871.3
 
 
2.5

281


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

 
 
 
December 31, 2014
 
 
 
 
 
 
 
 
 
Weighted
 
 
 
 
 
 
 
Maximum
 
average
 
 
 
Notional
 
Fair
 
future
 
expected life
 
 
 
amount
 
value
 
payments
 
(in years)
 
 
 
(in millions)
 
 
 
Single name credit default swaps
 
 
 
 
 
 
 
 
 
 
 
 
Corporate debt
 
 
 
 
 
 
 
 
 
 
 
 
 
AAA
$
30.0
 
$
1.0
 
$
30.0
 
 
4.2
 
 
AA
 
79.0
 
 
1.6
 
 
79.0
 
 
3.3
 
 
A
 
254.5
 
 
3.3
 
 
254.5
 
 
2.8
 
 
BBB
 
345.0
 
 
1.2
 
 
345.0
 
 
3.6
 
 
BB
 
10.0
 
 
0.9
 
 
10.0
 
 
5.0
 
Government/municipalities
 
 
 
 
 
 
 
 
 
 
 
 
 
AA
 
30.0
 
 
0.6
 
 
30.0
 
 
4.3
 
Sovereign
 
 
 
 
 
 
 
 
 
 
 
 
 
AA
 
10.0
 
 
0.1
 
 
10.0
 
 
4.7
 
 
BBB
 
40.0
 
 
(0.1)
 
 
40.0
 
 
4.7
Total single name credit default swaps
 
798.5
 
 
8.6
 
 
798.5
 
 
3.5
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basket and index credit default swaps
 
 
 
 
 
 
 
 
 
 
 
 
Corporate debt
 
 
 
 
 
 
 
 
 
 
 
 
 
Near default (1)
 
100.4
 
 
(19.1)
 
 
100.4
 
 
2.2
 
Government/municipalities
 
 
 
 
 
 
 
 
 
 
 
 
 
AA
 
30.0
 
 
(1.8)
 
 
30.0
 
 
2.7
 
Structured finance
 
 
 
 
 
 
 
 
 
 
 
 
 
BBB
 
16.9
 
 
0.1
 
 
16.9
 
 
3.5
Total basket and index credit default swaps
 
147.3
 
 
(20.8)
 
 
147.3
 
 
2.5
Total credit default swap protection sold
$
945.8
 
$
(12.2)
 
$
945.8
 
 
3.3

(1)
Includes $78.0 million as of both December 31, 2015 and 2014, notional of derivatives in consolidated collateralized private investment vehicle VIEs where the credit risk is borne by third party investors.

We also have invested in fixed maturities classified as trading that contain credit default swaps. These securities are subject to the credit risk of the issuer, normally a special purpose vehicle, which consists of the underlying credit default swaps and high quality fixed maturities that serve as collateral. A default event occurs if the cumulative losses exceed a specified attachment point, which is typically not the first loss of the portfolio. If a default event occurs that exceeds the specified attachment point, our investment may not be fully returned. We would have no future potential payments under these investments. The following tables show, by the types of referenced/underlying asset class and external rating, our fixed maturities with embedded credit derivatives.

282


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

 
 
December 31, 2015
 
 
 
 
 
 
 
Weighted
 
 
 
 
 
 
 
average
 
 
Amortized
 
Carrying
 
 
expected life
 
 
cost
 
value
 
 
(in years)
 
 
(in millions)
 
 
 
 
Corporate debt
 
 
 
 
 
 
 
 
 
 
A
$
24.6
 
$
24.6
 
 
 
1.0
Total corporate debt
 
24.6
 
 
24.6
 
 
 
1.0
 
 
 
 
 
 
 
 
 
 
 
Structured finance
 
 
 
 
 
 
 
 
 
 
A
 
52.2
 
 
52.2
 
 
 
1.1
 
BBB
 
3.4
 
 
3.4
 
 
 
1.6
 
BB
 
2.3
 
 
2.3
 
 
 
1.6
 
CCC
 
4.8
 
 
4.8
 
 
 
1.9
Total structured finance
 
62.7
 
 
62.7
 
 
 
1.2
Total fixed maturities with credit derivatives
$
87.3
 
$
87.3
 
 
 
1.1
 
 
December 31, 2014
 
 
 
 
 
 
 
Weighted
 
 
 
 
 
 
 
average
 
 
Amortized
 
Carrying
 
 
expected life
 
 
cost
 
value
 
 
(in years)
 
 
(in millions)
 
 
 
 
Corporate debt
 
 
 
 
 
 
 
 
 
 
A
$
24.1
 
$
24.1
 
 
 
2.0
Total corporate debt
 
24.1
 
 
24.1
 
 
 
2.0
 
 
 
 
 
 
 
 
 
 
 
Structured finance
 
 
 
 
 
 
 
 
 
 
A
 
56.1
 
 
56.1
 
 
 
1.5
 
BB
 
5.8
 
 
5.8
 
 
 
2.7
 
CCC
 
9.5
 
 
9.5
 
 
 
4.7
Total structured finance
 
71.4
 
 
71.4
 
 
 
2.1
Total fixed maturities with credit derivatives
$
95.5
 
$
95.5
 
 
 
2.0

Fair Value Hedges
We use fixed-to-floating rate interest rate swaps to more closely align the interest rate characteristics of certain assets and liabilities. In general, these swaps are used in asset and liability management to modify duration, which is a measure of sensitivity to interest rate changes.
We enter into currency exchange swap agreements to convert certain foreign denominated assets and liabilities into U.S. dollar floating-rate denominated instruments to eliminate the exposure to future currency volatility on those items.
The net interest effect of interest rate swap and currency swap transactions for derivatives in fair value hedges is recorded as an adjustment to income or expense of the underlying hedged item in our consolidated statements of operations.
Hedge effectiveness testing for fair value relationships is performed utilizing a regression analysis approach for both prospective and retrospective evaluations. This regression analysis will consider multiple data points for the assessment that the hedge continues to be highly effective in achieving offsetting changes in fair value. In certain periods, the comparison of the change in value of the derivative and the change in the value of the hedged item may not be offsetting at a specific period in time due to small movements in value. However, any amounts recorded as fair value hedges have shown to be highly effective in achieving offsetting changes in fair value both for present and future periods.

283


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

The following table shows the effect of derivatives in fair value hedging relationships and the related hedged items on the consolidated statements of operations. All gains or losses on derivatives were included in the assessment of hedge effectiveness.
 
 
 
Amount of gain (loss)
 
 
 
 
Amount of gain (loss)
 
 
 
recognized in net income on
 
 
 
 
recognized in net income on
 
 
 
derivatives for the year
 
Hedged items in fair
 
related hedged item for the year ended
Derivatives in fair value
 
ended December 31, (1)
 
fair value hedging
 
December 31, (1)
hedging relationships
 
2015
 
2014
 
2013
 
relationships
 
2015
 
2014
 
2013
 
 
 
(in millions)
 
 
 
 
(in millions)
 
 
 
 
 
 
 
 
 
 
 
 
Fixed maturities,
 
 
 
 
 
 
 
 
 
Interest rate contracts
 
$
26.4
 
$
25.4
 
$
139.5
 
 
available-for-sale
 
$
(26.1)
 
$
(27.7)
 
$
(133.3)
Interest rate contracts
 
 
0.8
 
 
2.0
 
 
(0.7)
 
Investment contracts
 
 
(0.7)
 
 
(1.9)
 
 
0.2
Foreign exchange
 
 
 
 
 
 
 
 
 
 
Fixed maturities,
 
 
 
 
 
 
 
 
 
 
contracts
 
 
3.8
 
 
5.5
 
 
(0.2)
 
 
available-for-sale
 
 
(3.8)
 
 
(5.4)
 
 
0.4
Foreign exchange
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
contracts
 
 
—
 
 
0.2
 
 
(36.7)
 
Investment contracts
 
 
—
 
 
(0.2)
 
 
36.5
Total
 
$
31.0
 
$
33.1
 
$
101.9
 
Total
 
$
(30.6)
 
$
(35.2)
 
$
(96.2)

(1)
The gain (loss) on both derivatives and hedged items in fair value relationships is reported in net realized capital gains (losses) on the consolidated statements of operations. The net amount represents the ineffective portion of our fair value hedges.

The following table shows the periodic settlements on interest rate contracts and foreign exchange contracts in fair value hedging relationships.
 
 
 
Amount of gain (loss) for the year
 
 
 
ended December 31,
Hedged Item
 
2015
 
2014
 
2013
 
 
 
(in millions)
Fixed maturities, available-for-sale (1)
 
$
(72.8)
 
$
(93.0)
 
$
(120.7)
Investment contracts (2)
 
 
3.7
 
 
4.3
 
 
33.2

(1) Reported in net investment income on the consolidated statements of operations.
(2) Reported in benefits, claims and settlement expenses on the consolidated statements of operations.
Cash Flow Hedges
We utilize floating-to-fixed rate interest rate swaps to eliminate the variability in cash flows of recognized financial assets and liabilities and forecasted transactions.
We enter into currency exchange swap agreements to convert both principal and interest payments of certain foreign denominated assets and liabilities into U.S. dollar denominated fixed-rate instruments to eliminate the exposure to future currency volatility on those items.
The net interest effect of interest rate swap and currency swap transactions for derivatives in cash flow hedges is recorded as an adjustment to income or expense of the underlying hedged item in our consolidated statements of operations.
The maximum length of time we are hedging our exposure to the variability in future cash flows for forecasted transactions, excluding those related to the payments of variable interest on existing financial assets and liabilities, is 4.5 years. At December 31, 2015, we had $44.1 million of net gains reported in AOCI on the consolidated statements of financial position related to active hedges of forecasted transactions. If a hedged forecasted transaction is no longer probable of occurring, cash flow hedge accounting is discontinued. If it is probable that the hedged forecasted transaction will not occur, the deferred gain or loss is immediately reclassified from AOCI into net income. We reclassified $0.0 million and $0.0 million from AOCI into net realized capital gains (losses) as a result of the determination that hedged cash flows were probable of not occurring during the years ended December 31, 2015 and 2014, respectively.

284


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

The following table shows the effect of derivatives in cash flow hedging relationships on the consolidated statements of operations and consolidated statements of financial position. All gains or losses on derivatives were included in the assessment of hedge effectiveness.
 
 
 
 
 
 
 
Amount of gain (loss)
 
 
 
 
Amount of gain (loss)
 
 
 
 
 
 
 
recognized in AOCI on
 
 
 
 
reclassified from AOCI on
Derivatives in
 
 
 
 
derivatives (effective portion)
 
Location of gain (loss)
 
derivatives (effective portion)
cash flow
 
 
 
 
for the year ended
 
reclassified from
 
for the year ended
hedging
 
Related
 
December 31,
 
AOCI into net income
 
December 31,
relationships
 
hedged item
 
2015
 
2014
 
2013
 
(effective portion)
 
2015
 
2014
 
2013
 
 
 
 
 
 
 
(in millions)
 
 
 
 
(in millions)
Interest rate
 
Fixed maturities,
 
 
 
 
 
 
 
 
 
 
Net investment
 
 
 
 
 
 
 
 
 
 
contracts
 
 
available-for-sale
 
$
33.1
 
$
29.0
 
$
(80.5)
 
 
income
 
$
16.8
 
$
13.8
 
$
11.7
Interest rate
 
 
 
 
 
 
 
 
 
 
 
 
 
Benefits, claims and
 
 
 
 
 
 
 
 
 
 
contracts
 
Investment contracts
 
 
4.7
 
 
2.0
 
 
2.5
 
 
settlement expenses
 
 
—
 
 
—
 
 
—
Foreign exchange
 
Fixed maturities,
 
 
 
 
 
 
 
 
 
 
Net realized capital
 
 
 
 
 
 
 
 
 
 
contracts
 
 
available-for-sale
 
 
16.9
 
 
68.7
 
 
(0.9)
 
 
gains (losses)
 
 
28.4
 
 
(10.2)
 
 
(16.7)
Foreign exchange
 
 
 
 
 
 
 
 
 
 
 
 
 
Benefits, claims and
 
 
 
 
 
 
 
 
 
 
contracts
 
Investment contracts
 
 
2.4
 
 
7.2
 
 
5.0
 
 
settlement expenses
 
 
—
 
 
—
 
 
—
Total
 
 
 
 
$
57.1
 
$
106.9
 
$
(73.9)
 
Total
 
$
45.2
 
$
3.6
 
$
(5.0)

The following table shows the periodic settlements on interest rate contracts and foreign exchange contracts in cash flow hedging relationships.
 
 
 
Amount of gain (loss) for the year
 
 
 
ended December 31,
Hedged item
 
2015
 
2014
 
2013
 
 
 
(in millions)
Fixed maturities, available-for-sale (1)
 
$
6.1
 
$
5.1
 
$
7.7
Investment contracts (2)
 
 
(18.3)
 
 
(11.1)
 
 
(11.0)

(1) Reported in net investment income on the consolidated statements of operations.
(2) Reported in benefits, claims and settlement expenses on the consolidated statements of operations.

The ineffective portion of our cash flow hedges is reported in net realized capital gains (losses) on the consolidated statements of operations. The net gain resulting from the ineffective portion of foreign currency contracts in cash flow hedging relationships was $0.0 million, $0.0 million and $0.8 million for the years ended December 31, 2015, 2014 and 2013, respectively.

We expect to reclassify net gains of $6.6 million from AOCI into net income in the next 12 months, which includes both net deferred gains on discontinued hedges and net losses on periodic settlements of active hedges. Actual amounts may vary from this amount as a result of market conditions.

Derivatives Not Designated as Hedging Instruments

Our use of futures, certain swaptions and swaps, collars and options are effective from an economic standpoint, but they have not been designated as hedges for financial reporting purposes. As such, periodic changes in the market value of these instruments, which includes mark-to-market gains and losses as well as periodic and final settlements, primarily flow directly into net realized capital gains (losses) on the consolidated statements of operations.



285


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

The following table shows the effect of derivatives not designated as hedging instruments, including fair value changes of embedded derivatives that have been bifurcated from the host contract, on the consolidated statements of operations.
 
 
 
Amount of gain (loss) recognized in
 
 
 
net income on derivatives for the
 
 
 
year ended December 31,
Derivatives not designated as hedging instruments
 
2015
 
2014
 
2013
 
 
 
(in millions)
Interest rate contracts
 
$
74.0
 
$
246.1
 
$
(137.6)
Foreign exchange contracts
 
 
(11.2)
 
 
(31.4)
 
 
6.1
Equity contracts
 
 
(50.5)
 
 
21.9
 
 
(159.4)
Credit contracts
 
 
3.5
 
 
(34.7)
 
 
40.6
Other contracts
 
 
(5.7)
 
 
(190.2)
 
 
148.3
Total
 
$
10.1
 
$
11.7
 
$
(102.0)

7. Closed Block
In connection with the 1998 MIHC formation, we formed a Closed Block to provide reasonable assurance to policyholders included therein that, after the formation of the MIHC, assets would be available to maintain dividends in aggregate in accordance with the 1997 policy dividend scales, if the experience underlying such scales continued. Certain of our assets were allocated to the Closed Block in an amount that produces cash flows which, together with anticipated revenue from policies and contracts included in the Closed Block, were expected to be sufficient to support the Closed Block policies, including, but not limited to, provisions for payment of claims, certain expenses, charges and taxes, and to provide for continuation of policy and contract dividends in aggregate in accordance with the 1997 dividend scales, if the experience underlying such scales continues, and to allow for appropriate adjustments in such scales, if such experience changes. Due to adjustable life policies being included in the Closed Block, the Closed Block is charged with amounts necessary to properly fund for certain adjustments, such as face amount and premium increases, that are made to these policies after the Closed Block inception date. These amounts are referred to as Funding Adjustment Charges and are treated as capital transfers from the Closed Block.

Assets allocated to the Closed Block inure solely to the benefit of the holders of policies included in the Closed Block. Closed Block assets and liabilities are carried on the same basis as other similar assets and liabilities. We will continue to pay guaranteed benefits under all policies, including the policies within the Closed Block, in accordance with their terms. If the assets allocated to the Closed Block, the investment cash flows from those assets and the revenues from the policies included in the Closed Block, including investment income thereon, prove to be insufficient to pay the benefits guaranteed under the policies included in the Closed Block, we will be required to make such payments from our general funds. No additional policies were added to the Closed Block, nor was the Closed Block affected in any other way, as a result of the demutualization.

A policyholder dividend obligation (“PDO”) is required to be established for earnings in the Closed Block that are not available to PFG stockholders. A model of the Closed Block was established to produce the pattern of expected earnings in the Closed Block, adjusted to eliminate the impact of related amounts in AOCI.

If actual cumulative earnings of the Closed Block are greater than the expected cumulative earnings of the Closed Block, only the expected cumulative earnings will be recognized in income with the excess recorded as a PDO. This PDO represents undistributed accumulated earnings that will be paid to Closed Block policyholders as additional policyholder dividends unless offset by future performance of the Closed Block that is less favorable than originally expected. If actual cumulative performance is less favorable than expected, only actual earnings will be recognized in income. At December 31, 2015 and 2014, cumulative actual earnings have been less than cumulative expected earnings. However, cumulative net unrealized gains were greater than expected, resulting in the recognition of a PDO of $88.7 million and $165.2 million as of December 31, 2015 and 2014, respectively.


286


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015
Closed Block liabilities and assets designated to the Closed Block were as follows:
 
 
December 31, 2015
 
December 31, 2014
 
 
(in millions)
Closed Block liabilities
 
 
 
 
 
Future policy benefits and claims
$
4,229.2
 
$
4,366.5
Other policyholder funds
 
9.2
 
 
9.6
Policyholder dividends payable
 
246.4
 
 
259.2
Policyholder dividends obligation
 
88.7
 
 
165.2
Other liabilities
 
8.2
 
 
17.6
 
Total Closed Block liabilities
 
4,581.7
 
 
4,818.1
 
 
 
 
 
 
 
Assets designated to the Closed Block
 
 
 
 
 
Fixed maturities, available-for-sale
 
2,211.5
 
 
2,399.5
Fixed maturities, trading
 
10.3
 
 
11.9
Equity securities, available-for-sale
 
3.8
 
 
3.8
Mortgage loans
 
899.1
 
 
912.1
Policy loans
 
587.2
 
 
610.0
Other investments
 
81.9
 
 
101.1
 
Total investments
 
3,793.8
 
 
4,038.4
Cash and cash equivalents
 
88.8
 
 
29.2
Accrued investment income
 
45.3
 
 
48.8
Premiums due and other receivables
 
11.3
 
 
13.6
Deferred tax asset
 
55.2
 
 
58.1
Other assets
 
0.2
 
 
—
 
Total assets designated to the Closed Block
 
3,994.6
 
 
4,188.1
Excess of Closed Block liabilities over assets designated to the Closed Block
 
587.1
 
 
630.0
Amounts included in accumulated other comprehensive income
 
9.3
 
 
18.9
Maximum future earnings to be recognized from Closed Block assets and
 
 
 
 
 
 
liabilities
$
596.4
 
$
648.9
Closed Block revenues and expenses were as follows:
 
 
For the year ended December 31,
 
 
2015
 
2014
 
2013
 
 
(in millions)
Revenues
 
 
 
 
 
 
 
 
Premiums and other considerations
$
325.6
 
$
351.9
 
$
379.9
Net investment income
 
187.0
 
 
201.9
 
 
207.7
Net realized capital losses
 
(0.2)
 
 
(2.3)
 
 
(12.3)
 
Total revenues
 
512.4
 
 
551.5
 
 
575.3
 
 
 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
 
Benefits, claims and settlement expenses
 
283.2
 
 
313.3
 
 
320.1
Dividends to policyholders
 
160.4
 
 
173.2
 
 
184.4
Operating expenses
 
3.9
 
 
4.3
 
 
4.7
 
Total expenses
 
447.5
 
 
490.8
 
 
509.2
Closed Block revenues, net of Closed Block expenses, before income taxes
 
64.9
 
 
60.7
 
 
66.1
Income taxes
 
20.7
 
 
19.5
 
 
21.1
Closed Block revenues, net of Closed Block expenses and income taxes
 
44.2
 
 
41.2
 
 
45.0
Funding adjustment charges
 
8.3
 
 
(4.8)
 
 
(6.5)
Closed Block revenues, net of Closed Block expenses, income taxes and
 
 
 
 
 
 
 
 
 
funding adjustment charges
$
52.5
 
$
36.4
 
$
38.5


287


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

The change in maximum future earnings of the Closed Block was as follows:
 
 
For the year ended December 31,
 
 
2015
 
2014
 
2013
 
 
(in millions)
Beginning of year
$
648.9
 
$
685.3
 
$
723.8
End of year
 
596.4
 
 
648.9
 
 
685.3
Change in maximum future earnings
$
(52.5)
 
$
(36.4)
 
$
(38.5)
We charge the Closed Block with federal income taxes, payroll taxes, state and local premium taxes and other state or local taxes, licenses and fees as provided in the plan of reorganization.
8. Deferred Acquisition Costs
Acquisition costs deferred and amortized were as follows:
 
 
For the year ended December 31,
 
 
2015
 
2014
 
2013
 
 
(in millions)
 
 
 
 
 
 
 
 
 
 
Balance at beginning of year
$
2,754.6
 
$
2,848.8
 
$
2,394.7
Cost deferred during the year
 
356.5
 
 
347.4
 
 
393.0
Amortized to expense during the year (1)
 
(251.7)
 
 
(348.5)
 
 
(170.6)
Adjustment related to unrealized gains on available-for-sale securities and
 
 
 
 
 
 
 
 
 
derivative instruments
 
197.9
 
 
(93.1)
 
 
231.7
Balance at end of year
$
3,057.3
 
$
2,754.6
 
$
2,848.8
(1) Includes adjustments for revisions to estimated gross profits.
9. Insurance Liabilities
Contractholder Funds
Major components of contractholder funds in the consolidated statements of financial position are summarized as follows:
 
 
December 31,
 
 
2015
 
2014
 
 
(in millions)
Liabilities for investment contracts:
 
 
 
 
 
 
Liabilities for individual annuities
$
10,147.4
 
$
10,077.7
 
GICs
 
10,222.8
 
 
10,115.3
 
Funding agreements
 
6,863.4
 
 
7,338.1
 
Other investment contracts
 
996.6
 
 
1,008.5
Total liabilities for investment contracts
 
28,230.2
 
 
28,539.6
Universal life and other reserves
 
4,921.4
 
 
4,888.7
Total contractholder funds
$
33,151.6
 
$
33,428.3
Our GICs and funding agreements contain provisions limiting or prohibiting early surrenders, which typically include penalties for early surrenders, minimum notice requirements or, in the case of funding agreements with survivor options, minimum pre-death holding periods and specific maximum amounts.
Funding agreements include those issued directly to nonqualified institutional investors, as well as under five separate programs where the funding agreements have been issued directly or indirectly to unconsolidated special purpose entities. Claims for principal and interest under funding agreements are afforded equal priority to claims of life insurance and annuity policyholders under insolvency provisions of Iowa Insurance Laws.


288


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

We were authorized to issue up to $4.0 billion of funding agreements under a program established in 1998 to support the prospective issuance of medium term notes by an unaffiliated entity in non-U.S. markets. As of December 31, 2015 and 2014, $107.5 million and $111.2 million, respectively, of liabilities are outstanding with respect to the issuance outstanding under this program. We were also authorized to issue up to Euro 4.0 billion (approximately USD$5.3 billion) of funding agreements under a program established in 2006 to support the prospective issuance of medium term notes by an unaffiliated entity in non-U.S. markets. The unaffiliated entity is an unconsolidated special purpose vehicle. As of December 31, 2015 and 2014, $1,021.0 million and $1,137.1 million, respectively, of liabilities are outstanding with respect to issuances outstanding under this program. We do not anticipate any new issuance activity under either of these programs due to the existence of the program established in 2011 described below.

In addition, we were authorized to issue up to $7.0 billion of funding agreements under a program established in 2001 to support the prospective issuance of medium term notes by an unaffiliated entity in both domestic and international markets. The unaffiliated entity is an unconsolidated special purpose entity. As of December 31, 2015 and 2014, $201.4 million and $505.8 million, respectively, of liabilities are being held with respect to issuances outstanding under this program. We do not anticipate any new issuance activity under this program, given our December 2005 termination of the dealership agreement for this program and the availability of the program established in 2011 described below.

Additionally, we were authorized to issue up to $9.0 billion of funding agreements under a program that was originally established in March 2004 to support the prospective issuance of medium term notes by unaffiliated entities in both domestic and international markets. Under this program, both the notes and the supporting funding agreements were registered with the United States Securities and Exchange Commission (“SEC”). As of December 31, 2015 and 2014, $246.0 million and $549.2 million, respectively, of liabilities are being held with respect to issuances outstanding under this program. In contrast with direct funding agreements, GIC issuances and the other three funding agreement‑backed medium term note programs described above, our payment obligations on each funding agreement issued under this SEC-registered program are guaranteed by PFG. We do not anticipate any new issuance activity under this program due to the existence of the program established in 2011 described below.

We were authorized to issue up to $5.0 billion of funding agreements under a program that was originally established in 2011 to support the prospective issuance of medium term notes by an unaffiliated entity in both domestic and international markets. The unaffiliated entity is an unconsolidated special purpose entity. In June 2015, this program was amended to authorize issuance of up to an additional $4.0 billion in recognition of the use of nearly all $5.0 billion of existing issuance authorization. As of December 31, 2015 and 2014, $3,537.0 million and $3,284.7 million, respectively, of liabilities are being held with respect to issuances outstanding under this program. Similar to the SEC-registered program, our payment obligations on each funding agreement issued under this program are guaranteed by PFG. The program established in 2011 is not registered with the SEC.



289


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

Future Policy Benefits and Claims

Activity associated with unpaid disability and health claims is summarized as follows:
 
 
December 31,
 
 
2015
 
2014
 
2013
 
 
(in millions)
 
 
 
 
 
 
 
 
 
 
Balance at beginning of year
$
1,240.1
 
$
1,144.7
 
$
1,066.0
Incurred:
 
 
 
 
 
 
 
 
 
Current year
 
810.2
 
 
760.5
 
 
712.0
 
Prior years
 
—
 
 
1.2
 
 
1.0
Total incurred
 
810.2
 
 
761.7
 
 
713.0
Payments:
 
 
 
 
 
 
 
 
 
Current year
 
484.3
 
 
445.5
 
 
432.1
 
Prior years
 
243.3
 
 
220.8
 
 
202.2
Total payments
 
727.6
 
 
666.3
 
 
634.3
Balance at end of year:
 
 
 
 
 
 
 
 
 
Current year
 
325.9
 
 
315.0
 
 
279.9
 
Prior years
 
996.8
 
 
925.1
 
 
864.8
Total balance at end of year
$
1,322.7
 
$
1,240.1
 
$
1,144.7
 
 
 
 
 
 
 
 
 
 
Amounts not included in the rollforward above:
 
 
 
 
 
 
 
 
 
Claim adjustment expense liabilities
$
51.5
 
$
47.5
 
$
43.4
 
Reinsurance recoverables for unpaid claims
$
325.2
 
$
304.6
 
$
265.8

Incurred liability adjustments relating to prior years, which affected current operations during 2015, 2014 and 2013, resulted in part from developed claims for prior years being different than were anticipated when the liabilities for unpaid disability and health claims were originally estimated. These trends have been considered in establishing the current year liability for unpaid disability and health claims.

10. Debt

Short-Term Debt

As of December 31, 2015 and 2014, we had $108.8 million and $154.5 million, respectively, of outstanding borrowings related to affiliated credit facilities, which consisted of a payable to PFSI, with no assets pledged as support. Interest paid on intercompany debt was $0.4 million, $0.5 million and $0.8 million during 2015, 2014 and 2013, respectively. As of both December 31, 2015 and 2014, we had external short-term credit facilities with various financial institutions in an aggregate amount of $945.0 million. These credit facilities include a $400.0 million 5-year facility that matures in March 2019, with PFG, PFSI and us as co-borrowers, a $300.0 million 364-day facility with us as borrower that matures in March 2015, and a $200.0 million 3-year facility with PFG, PFSI, Principal Financial Services V (UK) LTD and us as the co-borrowers that matures in March 2017. These facilities may be used for general corporate purposes, including commercial paper back-stop. Our commercial paper programs require 100% back-stop support, of which there were no outstanding balances as of December 31, 2015 and 2014.

The weighted‑average interest rate on short-term borrowings as of December 31, 2015 and 2014, was 0.2% and 0.1%, respectively.



290


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015
Long-Term Debt

The components of long-term debt were as follows:

 
December 31,
 
2015
 
2014
 
(in millions)
 
 
 
 
 
 
Non-recourse mortgages and notes payable
$
42.8
 
$
82.3
Total long-term debt
$
42.8
 
$
82.3

The amounts included above are net of the discount and premium associated with issuing these notes, which are being amortized to expense over their respective terms using the interest method.
On March 10, 1994, we issued $100.0 million of surplus notes due March 1, 2044, at an 8% annual interest rate. None of our affiliates held any portion of the notes. Each payment of interest and principal on the notes, however, could be made only with the prior approval of the Commissioner of Insurance of the State of Iowa (the “Commissioner”) and only to the extent that we had sufficient surplus earnings to make such payments. On March 1, 2014, we redeemed the surplus notes in whole at a redemption price equal to 102.3% of par, which was approved by the Commissioner.

The non-recourse mortgages, other mortgages and notes payable are primarily financings for real estate developments. Outstanding principal balances as of December 31, 2015, ranged from $1.7 million to $41.1 million per development with interest rates being variable. Outstanding principal balances as of December 31, 2014, ranged from $1.7 million to $32.6 million per development with interest rates being variable. Outstanding debt is secured by the underlying real estate properties, which were reported as real estate on our consolidated statements of financial position with a carrying value of $79.5 million and $155.6 million as of December 31, 2015 and 2014, respectively.
At December 31, 2015, future annual maturities of the long-term debt were as follows (in millions):
Year ending December 31:
 
 
 
2016
$
42.8
 
2017
 
—
 
2018
 
—
 
2019
 
—
 
2020
 
—
 
Thereafter
 
—
 
Total future maturities of the long-term debt
$
42.8



291


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

11. Income Taxes
Income Tax Expense
Our income tax expense was as follows:
 
 
 
For the year ended December 31,
 
 
 
2015
 
2014
 
2013
 
 
 
(in millions)
Current income taxes (benefits):
 
 
 
 
 
 
 
 
 
U.S. federal
$
266.2
 
$
218.8
 
$
98.2
 
State
 
9.3
 
 
6.0
 
 
4.9
 
Foreign
 
0.7
 
 
4.9
 
 
17.9
 
Tax benefit of operating loss carryforward
 
(42.3)
 
 
(161.4)
 
 
(130.4)
Total current income taxes (benefits)
 
233.9
 
 
68.3
 
 
(9.4)
Deferred income taxes:
 
 
 
 
 
 
 
 
 
U.S. federal
 
46.4
 
 
172.7
 
 
181.3
 
State
 
1.6
 
 
2.0
 
 
1.3
Total deferred income taxes
 
48.0
 
 
174.7
 
 
182.6
Total income taxes
$
281.9
 
$
243.0
 
$
173.2
Effective Income Tax Rate
Our provision for income taxes may not have the customary relationship of taxes to income. A reconciliation between the U.S. corporate income tax rate and the effective income tax rate was as follows:
 
 
 
For the year ended December 31,
 
 
 
2015
 
2014
 
2013
U.S. corporate income tax rate
35
%
 
35
%
 
35
%
Dividends received deduction
(13)
 
 
(12)
 
 
(13)
 
Interest exclusion from taxable income
(2)
 
 
(2)
 
 
(2)
 
Tax credits
(2)
 
 
(2)
 
 
—
 
Impact of court ruling on some uncertain tax positions
4
 
 
—
 
 
—
 
Other
1
 
 
1
 
 
—
 
Effective income tax rate
23
%
 
20
%
 
20
%
Unrecognized Tax Benefits
A summary of the changes in unrecognized tax benefits follows.
 
 
For the year ended December 31,
 
 
2015
 
2014
 
 
(in millions)
Balance at beginning of period
$
168.5
 
$
106.0
 
Additions based on tax positions related to the current year
 
12.8
 
 
12.1
 
Additions for tax positions of prior years
 
45.2
 
 
58.8
 
Reductions for tax positions related to the current year
 
(8.7)
 
 
(8.4)
 
Reductions for tax positions of prior years
 
(2.6)
 
 
—
Balance at end of period (1)
$
215.2
 
$
168.5
(1) Of this amount, $75.7 million, if recognized, would reduce the 2015 effective income tax rate. We recognize interest and penalties related to uncertain tax positions in operating expenses.

As of December 31, 2015 and 2014, we had recognized $137.9 million and $100.4 million of accumulated pre-tax interest and penalties related to unrecognized tax benefits, respectively.

292


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

Net Deferred Income Taxes
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our net deferred income taxes were as follows:
 
 
 
December 31,
 
 
 
2015
 
2014
 
 
 
(in millions)
Deferred income tax assets:
 
 
 
 
 
 
Insurance liabilities
$
109.6
 
$
390.8
 
Investments, including derivatives
 
354.2
 
 
380.6
 
Net operating loss carryforwards
 
0.5
 
 
42.8
 
Tax credit carryforwards
 
158.5
 
 
71.6
 
Employee benefits
 
158.4
 
 
147.3
 
Foreign currency translation
 
123.4
 
 
61.8
 
 
Total deferred income tax assets
 
904.6
 
 
1,094.9
Deferred income tax liabilities:
 
 
 
 
 
 
Deferred acquisition costs
 
(831.0)
 
 
(728.3)
 
Investments, including derivatives
 
(355.3)
 
 
(374.2)
 
Net unrealized gains on available-for-sale securities
 
(373.0)
 
 
(901.0)
 
Real estate
 
(122.1)
 
 
(132.7)
 
Intangible assets
 
(16.4)
 
 
(22.4)
 
Other deferred income tax liabilities
 
(99.6)
 
 
(19.1)
 
 
Total deferred income tax liabilities
 
(1,797.4)
 
 
(2,177.7)
 
 
Total net deferred income tax liabilities
$
(892.8)
 
$
(1,082.8)
Net deferred income taxes by jurisdiction were as follows:
 
 
 
December 31,
 
 
 
2015
 
2014
 
 
 
(in millions)
Deferred income tax liabilities:
 
 
 
 
 
 
U.S. federal
$
(887.3)
 
$
(1,078.8)
 
State
 
(5.5)
 
 
(4.0)
Total net deferred income tax liabilities
$
(892.8)
 
$
(1,082.8)
In management’s judgment, total deferred income tax assets are more likely than not to be realized. Included in the deferred income tax asset are tax carryforwards available to offset future taxable income or income taxes. As of December 31, 2015 and 2014, we have tax credit carryforwards for U.S. federal income tax purposes of $158.5 million and $71.6 million, respectively. Alternative minimum, foreign and general business tax credit carryovers were generated during the period we utilized net operating losses, primarily attributable to our captive reinsurance companies that joined our consolidated U.S. federal income tax return beginning in 2012 and 2013. Some of these tax credit carryforwards will expire in 2023 while others never expire. As of December 31, 2015, all accumulated U.S. federal tax credit carryforwards are anticipated to be utilized before expiration; therefore, no valuation allowance has been provided for the related deferred income tax assets.
As of December 31, 2015 and 2014, domestic state net operating loss carryforwards were $9.4 million and $11.8 million, respectively, and will expire between 2015 and 2034. We maintain valuation allowances by jurisdiction against the deferred income tax assets related to certain of these carryforwards, as utilization of these income tax benefits fail the more likely than not criteria in certain jurisdictions. Adjustments to the valuation allowance will be made if there is a change in management’s assessment of the amount of the deferred income tax assets that are more likely than not to be realized. As of December 31, 2015, all accumulated state net operating loss carryforwards are anticipated to be utilized before expiration; therefore, no valuation allowance has been provided for the related deferred income tax assets.

293


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

Other Tax Information

The Internal Revenue Service (“IRS”) has completed examination of the consolidated U.S. federal income tax returns for years prior to 2009. We are contesting certain issues and have filed suit in the Court of Federal Claims, requesting refunds for the years 1995-2003. We believe there is a reasonable possibility this litigation can be resolved within the next twelve months. As of December 31, 2015 and 2014, we had $232.1 million and $300.7 million, respectively, of current income tax receivables associated with outstanding audit issues reported as other assets in our consolidated statements of financial position.

We filed claims for refund for tax years 2006 through 2008 in 2015. The IRS commenced audit of our U.S. federal income tax return for 2009 in the fourth quarter of 2011, 2010 in the first quarter of 2012, 2011 in the first quarter of 2013, and 2012 in the third quarter of 2015. We do not expect the results of these audits or developments in other tax areas for all open tax years to significantly change the possible increase in the amount of unrecognized tax benefits, but the outcome of tax reviews is uncertain and unforeseen results can occur.

The U.S. Court of Federal Claims denied cross-motions for partial summary judgment on February 4, 2015, and ordered a trial on the previously taxed income issue in the case of Principal Life Insurance Company and Subsidiaries v. the United States. Previously, in the same case, on May 9, 2014, the court ruled against our tax treatment of transactions involving the purchase and sale of principal-only certificates. These recent events caused the re-evaluation of all our pending uncertain tax positions, which resulted in a $30.3 million reduction in net income in the first quarter of 2015 and a $47.5 million reduction in net income in the second quarter of 2014. We believe that we have adequate defenses against, or sufficient provisions for, the contested issues, but final resolution could take several years while legal remedies are pursued. Consequently, we do not expect the ultimate resolution of issues from tax years 1995-2003 or those that might arise in tax years subsequent to 2003 to have a material impact on our net income. We do not believe there is a reasonable possibility the total amount of uncertain tax benefits will significantly increase or decrease in the next twelve months.

12. Employee and Agent Benefits

We participate in postretirement benefit plans covering substantially all of our employees and certain agents, including employees of other companies affiliated with our ultimate parent, PFG ("affiliated companies"). Actuarial information regarding the status of the postretirement benefit plans is calculated for the total plan only. The affiliated company portion of the actuarial present value of the accumulated or projected benefit obligations, or net assets available for benefits, is not separately determined. However, we are reimbursed for employee benefits related to the affiliated companies for plans we sponsor and we reimburse PFG for plans it sponsors. The reimbursement is not reflected in our employee and agent benefits disclosures.

Prior to November 2014, we sponsored defined benefit pension plans covering substantially all of our U.S. employees and certain agents. Some of these plans provide supplemental pension benefits to employees and agents with salaries and/or pension benefits in excess of the qualified plan limits imposed by federal tax law. The employees and agents are generally first eligible for the pension plans when they reach age 21. For plan participants employed prior to January 1, 2002, the pension benefits are based on the greater of a final average pay benefit or a cash balance benefit. The final average pay benefit is based on the years of service and generally the employee's or agent's average annual compensation during the last five years of employment. Partial benefit accrual of final average pay benefits is recognized from first eligibility until retirement based on attained service divided by potential service to age 65 with a minimum of 35 years of potential service. The cash balance portion of the plan started on January 1, 2002. An employee's account is credited with an amount based on the employee's salary, age and service. These credits accrue with interest. For plan participants hired on and after January 1, 2002, only the cash balance plan applies. The policy is to fund the cost of providing pension benefits in the years that the employees and agents are providing service to us. The funding policy for the qualified defined benefit plan is to contribute an amount annually at least equal to the minimum annual contribution required under the Employee Retirement Income Security Act (“ERISA”), and, generally, not greater than the maximum amount that can be deducted for federal income tax purposes. The funding policy for the nonqualified benefit plan is to fund the plan in the years that the employees are providing service, taking into account the funded status of the trust. While assets are designated to cover the computed liability of the nonqualified plan, the assets are not included as part of the asset balances presented in this footnote as they do not qualify as plan assets in accordance with U.S. GAAP. Effective November 2014, PFG became the sponsor of these plans. We continue to reflect pension expense through our expense allocation agreement with PFG. In connection with the change in sponsorship, PFG assumed the pension plan liability from us.

294


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

We provide certain health care, life insurance and long-term care benefits for retired employees. Subsidized retiree health benefits are provided for employees hired prior to January 1, 2002. Employees hired after December 31, 2001, have access to retiree health benefits but it is intended that they pay for the full cost of the coverage. The health care plans are contributory with participants' contributions adjusted annually. The contributions are based on the number of years of service and age at retirement for those hired prior to January 1, 2002, who retired prior to January 1, 2011. For employees hired prior to January 1, 2002, who retired on or after January 1, 2011, the contributions are 60% of the expected cost. As part of the substantive plan, the retiree health contributions are assumed to be adjusted in the future as claim levels change. The life insurance plans are contributory for a small group of previously grandfathered participants that have elected supplemental coverage and dependent coverage.
Covered employees are first eligible for the health and life postretirement benefits when they reach age 57 and have completed ten years of service with us. Retiree long-term care benefits are provided for employees whose retirement was effective prior to July 1, 2000. Our policy is to fund the cost of providing retiree benefits in the years that the employees are providing service, taking into account the funded status of the trust.
Obligations and Funded Status
The plans' combined funded status, reconciled to amounts recognized in the consolidated statements of financial position, was as follows:
 
 
 
 
 
Other postretirement
 
 
 
Pension benefits
 
benefits
 
 
 
December 31,
 
December 31,
 
 
2015
 
2014
 
2015
 
2014
 
 
 
(in millions)
Change in benefit obligation
 
 
 
 
 
 
 
 
 
 
 
 
Benefit obligation at beginning of year
 
$
—
 
$
(2,440.2)
 
$
(169.7)
 
$
(140.6)
Service cost
 
 
—
 
 
(45.0)
 
 
(2.0)
 
 
(1.4)
Interest cost
 
 
—
 
 
(97.6)
 
 
(6.6)
 
 
(6.6)
Actuarial gain
 
 
—
 
 
—
 
 
(2.7)
 
 
(26.0)
Participant contribution
 
 
—
 
 
—
 
 
(6.4)
 
 
(6.6)
Benefits paid
 
 
—
 
 
69.5
 
 
12.7
 
 
12.2
Plan transfer due to change in sponsorship
 
 
—
 
 
2,513.3
 
 
—
 
 
—
Other
 
 
—
 
 
—
 
 
9.0
 
 
(0.7)
Benefit obligation at end of year
 
$
—
 
$
—
 
$
(165.7)
 
$
(169.7)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Change in plan assets
 
 
 
 
 
 
 
 
 
 
 
 
Fair value of plan assets at beginning of year
 
$
—
 
$
1,925.6
 
$
639.7
 
$
613.0
Actual return on plan assets
 
 
—
 
 
110.0
 
 
(6.9)
 
 
31.9
Employer contribution
 
 
—
 
 
116.4
 
 
0.5
 
 
0.4
Participant contributions
 
 
—
 
 
—
 
 
6.4
 
 
6.6
Benefits paid
 
 
—
 
 
(69.5)
 
 
(12.7)
 
 
(12.2)
Plan transfer due to change in sponsorship
 
 
—
 
 
(2,082.5)
 
 
—
 
 
—
Fair value of plan assets at end of year
 
$
—
 
$
—
 
$
627.0
 
$
639.7
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount recognized in statement of financial position
 
 
 
 
 
 
 
 
 
 
 
 
Other assets
 
$
—
 
$
—
 
$
461.9
 
$
470.7
Other liabilities
 
 
—
 
 
—
 
 
(0.6)
 
 
(0.7)
Total
 
$
—
 
$
—
 
$
461.3
 
$
470.0
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount recognized in accumulated other comprehensive
 
 
 
 
 
 
 
 
 
 
 
 
income
 
 
 
 
 
 
 
 
 
 
 
 
Total net actuarial gain
 
$
—
 
$
—
 
$
(8.6)
 
$
(53.0)
Prior service benefit
 
 
—
 
 
—
 
 
(33.0)
 
 
(35.9)
Pre-tax accumulated other comprehensive income
 
$
—
 
$
—
 
$
(41.6)
 
$
(88.9)


295


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

Other Postretirement Plan Changes and Plan Gains/Losses

The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “Medicare Modernization Act”) provides a prescription drug benefit under Medicare (“Medicare Part D”) as well as a federal subsidy to sponsors of retiree medical benefit plans. During each of the years ended December 31, 2015, 2014 and 2013, the Medicare subsidies we received and accrued for were $0.7 million, $0.7 million and $0.8 million, respectively.

Effective January 1, 2016, post-65 medical coverage for employees who retired from January 1, 1992, to December 31, 2010, will transition from a traditional medical plan to a stipend health reimbursement arrangement. This plan change reduced our accumulated postretirement benefit obligation by $15.5 million as of December 31, 2015. Offsetting this reduction is an adjustment in accumulated postretirement benefit obligation (recognized in fourth quarter 2015 expense) of $5.8 million related to dental plan benefits.

An actuarial loss occurred during 2015 for the other postretirement benefit plans. This was primarily due to a greater than expected increase in claim costs and a longer trend rate for participants under age 65. An actuarial loss occurred during 2014 for the other postretirement benefit plans. This was due to a decrease in the discount rate, a change in the mortality assumption, a lower than expected increase in the medical premium equivalents for participants over age 65 and a greater than expected increase in the claim costs for participants under age 65.
Information for Other Postretirement Benefit Plans With an Accumulated Postretirement Benefit Obligation
in Excess of Plan Assets
 
 
 
 
 
 
 
 
 
December 31,
 
 
2015
 
2014
 
 
(in millions)
Accumulated postretirement benefit obligation
 
$
1.3
 
$
1.5
Fair value of plan assets
 
 
0.7
 
 
0.8

Components of Net Periodic Benefit Cost
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pension benefits
 
Other postretirement benefits
 
 
 
For the year ended December 31,
 
 
2015
 
2014
 
2013
 
2015
 
2014
 
2013
 
 
 
(in millions)
Service cost
 
$
—
 
$
45.0
 
$
57.1
 
$
2.0
 
$
1.4
 
$
1.0
Interest cost
 
 
—
 
 
97.6
 
 
103.8
 
 
6.6
 
 
6.6
 
 
5.7
Expected return on plan assets
 
 
—
 
 
(110.0)
 
 
(127.4)
 
 
(34.0)
 
 
(32.6)
 
 
(28.8)
Amortization of prior service benefit
 
 
—
 
 
(3.9)
 
 
(8.7)
 
 
(18.4)
 
 
(20.3)
 
 
(25.9)
Recognized net actuarial (gain) loss
 
 
—
 
 
42.1
 
 
118.5
 
 
(0.8)
 
 
(3.4)
 
 
1.0
Other
 
 
—
 
 
—
 
 
—
 
 
5.8
 
 
—
 
 
—
Net periodic benefit cost (income)
 
$
—
 
$
70.8
 
$
143.3
 
$
(38.8)
 
$
(48.3)
 
$
(47.0)



296


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015
For the other postretirement benefit plans, actuarial gains and losses were amortized with use of the corridors allowed.
 
 
 
 
 
Other postretirement
 
 
 
Pension benefits
 
benefits
 
 
 
For the year ended December 31,
 
 
2015
 
2014
 
2015
 
2014
 
 
 
(in millions)
Other changes recognized in accumulated other comprehensive
 
 
 
 
 
 
 
 
 
 
 
 
 
(income) loss
 
 
 
 
 
 
 
 
 
 
 
 
Net actuarial loss
 
$
—
 
$
—
 
$
43.6
 
$
26.7
Amortization of gain (loss)
 
 
—
 
 
(42.1)
 
 
0.8
 
 
3.4
Amortization of prior service benefit
 
 
—
 
 
3.9
 
 
18.4
 
 
20.3
Plan changes
 
 
—
 
 
—
 
 
(15.5)
 
 
—
Total recognized in pre-tax accumulated other comprehensive (income) loss
 
$
—
 
$
(38.2)
 
$
47.3
 
$
50.4
Total recognized in net periodic benefit cost and pre-tax accumulated
 
 
 
 
 
 
 
 
 
 
 
 
 
other comprehensive loss
 
$
—
 
$
32.6
 
$
8.5
 
$
2.1
In connection with the pension plan sponsorship change, at December 31, 2014, we transferred $341.1 of pre-tax accumulated other comprehensive loss to PFG.
Net actuarial (gain) loss and net prior service cost benefit have been recognized in AOCI. The estimated net actuarial (gain) loss and prior service cost (benefit) for the postretirement benefits that will be amortized from AOCI into net periodic benefit cost during the 2016 fiscal year are $0.2 million and $(20.3) million, respectively.
Assumptions
Weighted‑average assumptions used to determine benefit obligations as disclosed under the Obligations and Funded Status section
 
 
Other postretirement
 
 
benefits
 
 
For the year ended December 31,
 
2015
 
2014
Discount rate
4.15
%
 
4.00
%
Rate of compensation increase
4.82
%
 
4.82
%
Weighted average assumptions used to determine net periodic benefit cost
 
 
 
 
 
 
 
 
 
 
Pension benefits
 
For the year ended December 31,
 
2015
 
2014
 
2013
Discount rate
NA
 
 
4.90
%
 
4.00
%
Expected long-term return on plan assets
NA
 
 
6.75
%
 
7.50
%
Rate of compensation increase
 
 
 
 
 
 
 
 
  Cash balance benefit
NA
 
 
5.29
%
 
5.29
%
  Traditional benefit
NA
 
 
3.06
%
 
3.06
%
 
 
 
 
 
 
 
 
 
 
Other postretirement benefits
 
For the year ended December 31,
 
2015
 
2014
 
2013
Discount rate
4.00
%
 
4.90
%
 
4.00
%
Expected long-term return on plan assets
5.36
%
 
5.36
%
 
5.62
%
Rate of compensation increase
4.82
%
 
4.83
%
 
4.83
%


297


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

For other postretirement benefits, the discount rate is determined by projecting future benefit payments inherent in the accumulated postretirement benefit obligation, and discounting those cash flows using a spot yield curve for high quality corporate bonds. The plans’ expected benefit payments are discounted to determine a present value using the yield curve and the discount rate is the level rate that produces the same present value. The 5.36% expected long-term return on plan assets for 2015 is based on the weighted average expected long-term asset returns for the medical, life and long-term care plans. The expected long-term rates for the medical, life and long-term care plans are 5.4%, 5.0% and 5.85%, respectively.

Assumed Health Care Cost Trend Rates
 
 
December 31,
 
2015
 
2014
Health care cost trend rate assumed for next year under age 65
7.0
%
 
7.0
%
Health care cost trend rate assumed for next year age 65 and over
6.0
%
 
6.0
%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)
4.5
%
 
4.5
%
Year that the rate reaches the ultimate trend rate (under age 65)
2023
 
 
2019
 
Year that the rate reaches the ultimate trend rate (65 and older)
2021
 
 
2020
 

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one-percentage-point change in assumed health care cost trend rates would have the following effects:
 
 
1-percentage
 
1-percentage
 
point increase
 
point decrease
 
 
 
(in millions)
Effect on total of service cost and interest cost components
$
0.6
 
$
(0.5)
Effect on accumulated postretirement benefit obligation
 
(7.1)
 
 
6.5

Other Postretirement Benefit Plan Assets

Fair value is defined as the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date (an exit price). The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels.

•
Level 1 - Fair values are based on unadjusted quoted prices in active markets for identical assets. Our Level 1 assets include cash, fixed income investment funds and exchange traded equity securities.
•
Level 2 - Fair values are based on inputs other than quoted prices within Level 1 that are observable for the asset, either directly or indirectly. Our Level 2 assets primarily include fixed income and equity investment funds.
•
Level 3 - Fair values are based on significant unobservable inputs for the asset. Our Level 3 assets include our general account investment.

Our other postretirement benefit plan assets consist of cash, investments in fixed income security portfolios and investments in equity security portfolios. Because of the nature of cash, its carrying amount approximates fair value. The fair value of fixed income investment funds, U.S. equity portfolios and international equity portfolios is based on quoted prices in active markets for identical assets. The fair value of our general account investment is the amount the plan would receive if withdrawing funds from this participating contract. The amount that would be received is calculated using a cash-out factor based on an associated pool of general account fixed income securities. The cash-out factor is a ratio of the asset investment value of these securities to asset book value. As the investment values change, the cash-out factor is adjusted, impacting the amount the plan receives at measurement date. To determine investment value for each category of assets, we project cash flows. This is done using contractual provisions for the assets, with adjustment for expected prepayments and call provisions. Projected cash flows are discounted to present value for each asset category. Interest rates for discounting are based on current rates on similar new assets in the general account based on asset strategy.



298


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

The fair value of the other postretirement benefit plans’ assets by asset category as of the most recent measurement date is as follows:
 
 
 
 
December 31, 2015
 
 
 
 
Assets
 
Fair value hierarchy level
 
 
 
 
measured at
 
 
 
 
 
 
 
 
 
 
 
fair value
 
Level 1
 
Level 2
 
Level 3
 
 
 
 
(in millions)
Asset category
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
5.9
 
$
5.9

 
$
—
 
$
—
Fixed income security portfolios:
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed income investment funds (1)
 
 
181.7
 
 
173.2

 
 
8.5
 
 
—
 
PLIC general account investment (2)
 
 
33.5
 
 
—

 
 
—
 
 
33.5
U.S. equity portfolios (3)
 
 
339.6
 
 
278.8

 
 
60.8
 
 
—
International equity portfolios (4)
 
 
66.3
 
 
54.4

 
 
11.9
 
 
—
Total
 
$
627.0
 
$
512.3

 
$
81.2
 
$
33.5
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2014
 
 
 
 
Assets
 
Fair value hierarchy level
 
 
 
 
measured at
 
 
 
 
 
 
 
 
 
 
 
fair value
 
Level 1
 
Level 2
 
Level 3
 
 
 
 
(in millions)
Asset category
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
5.5
 
$
5.5

 
$
—
 
$
—
Fixed income security portfolios:
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed income investment funds (1)
 
 
164.4
 
 
161.1

 
 
3.3
 
 
—
 
PLIC general account investment (2)
 
 
36.3
 
 
—

 
 
—
 
 
36.3
U.S. equity portfolios (3)
 
 
375.6
 
 
311.0

 
 
64.6
 
 
—
International equity portfolios (4)
 
 
57.9
 
 
44.5

 
 
13.4
 
 
—
Total
 
$
639.7
 
$
522.1

 
$
81.3
 
$
36.3

(1)
The portfolios invest in various fixed income securities, primarily of U.S. origin. These include, but are not limited to, corporate bonds, mortgage-backed securities, commercial mortgage-backed securities, U.S. Treasury securities, agency securities, asset-backed securities and collateralized mortgage obligations.
(2)
The general account is invested in various fixed income securities.
(3)
The portfolios invest primarily in publicly traded equity securities of large U.S. companies.
(4)
The portfolios invest primarily in publicly traded equity securities of non-U.S. companies.
As of December 31, 2015 and 2014, respectively, $81.2 million and $81.3 million of assets in the U.S. equity and international equity portfolios were included in a trust owned life insurance contract.

299


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

The reconciliation for all assets measured at fair value using significant unobservable inputs (Level 3) is as follows:
 
 
For the year ended December 31, 2015
 
 
 
 
Actual return gains (losses)
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning
 
on plan assets
 
 
 
 
 
 
 
 
 
Ending
 
 
asset
 
Relating to
 
 
 
 
Net
 
 
 
 
 
 
 
asset
 
 
balance
 
assets still
 
Relating to
 
purchases,
 
 
 
 
 
 
 
balance
 
 
as of
 
held at the
 
assets sold
 
sales,
 
Transfers
 
Transfers
 
as of
 
 
December 31,
 
reporting
 
during the
 
and
 
into
 
out of
 
December 31,
 
 
2014
 
date
 
period
 
settlements
 
Level 3
 
Level 3
 
2015
 
 
(in millions)
Asset category
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PLIC general account
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
investment
$
36.3
 
$
0.2
 
$
—
 
$
(3.0)
 
$
—
 
$
—
 
$
33.5
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the year ended December 31, 2014
 
 
 
 
Actual return gains (losses)
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning
 
on plan assets
 
 
 
 
 
 
 
 
 
Ending
 
 
assets
 
Relating to
 
 
 
 
Net
 
 
 
 
 
 
 
assets
 
 
balance
 
assets still
 
Relating to
 
purchases,
 
 
 
 
 
 
 
balance
 
 
as of
 
held at the
 
assets sold
 
sales,
 
Transfers
 
Transfers
 
as of
 
 
December 31,
 
reporting
 
during the
 
and
 
into
 
out of
 
December 31,
 
 
2013
 
date
 
period
 
settlements
 
Level 3
 
Level 3
 
2014
 
 
(in millions)
Asset category
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PLIC general account
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
investment
$
38.8
 
$
0.8
 
$
—
 
$
(3.3)
 
$
—
 
$
—
 
$
36.3
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the year ended December 31, 2013
 
 
 
 
Actual return gains (losses)
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning
 
on plan assets
 
 
 
 
 
 
 
 
 
Ending
 
 
assets
 
Relating to
 
 
 
 
Net
 
 
 
 
 
 
 
assets
 
 
balance
 
assets still
 
Relating to
 
purchases,
 
 
 
 
 
 
 
balance
 
 
as of
 
held at the
 
assets sold
 
sales,
 
Transfers
 
Transfers
 
as of
 
 
December 31,
 
reporting
 
during the
 
and
 
into
 
out of
 
December 31,
 
 
2012
 
date
 
period
 
settlements
 
Level 3
 
Level 3
 
2013
 
 
(in millions)
Asset category
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PLIC general account
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
investment
$
42.1
 
$
1.1
 
$
—
 
$
(4.4)
 
$
—
 
$
—
 
$
38.8

According to our investment policy, the target asset allocation for the other postretirement benefit plans is:
Asset Category
 
Target allocation
U.S. equity portfolios
45%
International equity portfolios
30%
Fixed income security portfolios
25%



300


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

Estimated Future Benefit Payments

The estimated future benefit payments, which reflect expected future service, and the expected amount of subsidy receipts under Medicare Part D are:
 
 
 
Other postretirement
 
 
 
 
 
 
benefits (gross benefit
 
 
 
 
 
 
payments, including
 
 
Amount of Medicare
 
 
prescription drug benefits)
 
 
Part D subsidy receipts
 
 
(in millions)
Year ending December 31:
 
 
 
 
 
2016
$
14.3
 
$
0.2
2017
 
14.4
 
 
0.1
2018
 
14.5
 
 
0.2
2019
 
14.9
 
 
0.1
2020
 
15.2
 
 
0.1
2021-2025
 
83.9
 
 
0.4
The above table reflects the total estimated future benefits to be paid from the plan, including both our share of the benefit cost and the participants' share of the cost, which is funded by their contributions to the plan. The assumptions used in calculating the estimated future benefit payments are the same as those used to measure the benefit obligation for the year ended December 31, 2015.
The information that follows shows supplemental information for our defined benefit pension plans. Certain key summary data is shown separately for qualified and nonqualified plans.
 
 
 
For the year ended December 31,
 
 
 
2015
 
2014
 
 
 
Qualified
Nonqualified
 
 
 
 
Qualified
Nonqualified
 
 
 
 
 
 
Plan
 
Plan
 
Total
 
Plan
 
Plan
 
Total
 
 
 
(in millions)
Components of net periodic benefit cost
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Service cost
 
$
—
 
$
—
 
$
—
 
$
39.0
 
$
6.0
 
$
45.0
Interest cost
 
 
—
 
 
—
 
 
—
 
 
82.6
 
 
15.0
 
 
97.6
Expected return on plan assets
 
 
—
 
 
—
 
 
—
 
 
(110.0)
 
 
—
 
 
(110.0)
Amortization of prior service benefit
 
 
—
 
 
—
 
 
—
 
 
(2.6)
 
 
(1.3)
 
 
(3.9)
Recognized net actuarial loss
 
 
—
 
 
—
 
 
—
 
 
35.8
 
 
6.3
 
 
42.1
Net periodic benefit cost
 
$
—
 
$
—
 
$
—
 
$
44.8
 
$
26.0
 
$
70.8
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other changes recognized in accumulated other
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
comprehensive (income) loss
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of net loss
 
$
—
 
$
—
 
$
—
 
$
(35.8)
 
$
(6.3)
 
$
(42.1)
Amortization of prior service benefit
 
 
—
 
 
—
 
 
—
 
 
2.6
 
 
1.3
 
 
3.9
Total recognized in pre-tax accumulated other
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
comprehensive income
$
—
 
$
—
 
$
—
 
$
(33.2)
 
$
(5.0)
 
$
(38.2)
Total recognized in net periodic benefit cost and pre-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
tax accumulated other comprehensive loss
$
—
 
$
—
 
$
—
 
$
11.6
 
$
21.0
 
$
32.6
We have defined contribution plans that are generally available to all U.S. employees and agents. Eligible participants could not contribute more than $18,000 of their compensation to the plans in 2015. Effective January 1, 2006, we made several changes to the retirement programs. In general, the pension and supplemental executive retirement plan benefit formulas were reduced, and the 401(k) matching contribution was increased. Employees who were ages 47 or older with at least ten years of service on December 31, 2005, could elect to retain the prior benefit provisions and forgo receipt of the additional matching contributions. The employees who elected to retain the prior benefit provisions are referred to as “Grandfathered Choice Participants.” We match the Grandfathered Choice Participant's contribution at a 50% contribution rate up to a maximum matching contribution of 3% of the participant's

301


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015
compensation. For all other participants, we match the participant's contributions at a 75% contribution rate up to a maximum matching contribution of 6% of the participant's compensation. The defined contribution plans allow employees to choose among various investment options, including PFG’s common stock. We contributed $45.7 million, $41.7 million and $39.8 million in 2015, 2014 and 2013, respectively, to our qualified defined contribution plans.

We also have nonqualified deferred compensation plans available to select employees and agents that allow them to defer compensation amounts in excess of limits imposed by federal tax law with respect to the qualified plans. In 2015, we matched the Grandfathered Choice Participant's deferral at a 50% match deferral rate up to a maximum matching deferral of 3% of the participant's compensation. For all other participants, we matched the participant's deferral at a 75% match deferral rate up to a maximum matching deferral of 6% of the participant's compensation. We contributed $4.5 million, $4.1 million and $5.0 million in 2015, 2014 and 2013, respectively, to our nonqualified deferred compensation plans.

13. Contingencies, Guarantees and Indemnifications

Litigation and Regulatory Contingencies

We are regularly involved in litigation, both as a defendant and as a plaintiff, but primarily as a defendant. Litigation naming us as a defendant ordinarily arises out of our business operations as a provider of asset management and accumulation products and services; individual life insurance, specialty benefits insurance and our investment activities. Some of the lawsuits may be class actions, or purport to be, and some may include claims for unspecified or substantial punitive and treble damages.

We may discuss such litigation in one of three ways. We accrue a charge to income and disclose legal matters for which the chance of loss is probable and for which the amount of loss can be reasonably estimated. We may disclose contingencies for which the chance of loss is reasonably possible and provide an estimate of the possible loss or range of loss or a statement that such an estimate cannot be made. Finally, we may voluntarily disclose loss contingencies for which the chance of loss is remote in order to provide information concerning matters that potentially expose us to possible losses.

In addition, regulatory bodies such as state insurance departments, the United States Securities and Exchange Commission, the Financial Industry Regulatory Authority, the Department of Labor and other regulatory agencies regularly make inquiries and conduct examinations or investigations concerning our compliance with, among other things, insurance laws, securities laws, Employee Retirement Income Security Act ("ERISA") and laws governing the activities of broker-dealers. We receive requests from regulators and other governmental authorities relating to industry issues and may receive additional requests, including subpoenas and interrogatories, in the future.

On March 18, 2014, McCaffree Financial Corp. Employee Retirement Program (“McCaffree”) filed a putative class action lawsuit in the United States District Court for the Southern District of Iowa against us. The complaint alleged, among other things, breach of duty of loyalty, breach of duty of prudence and prohibited transactions under ERISA. McCaffree seeks a nationwide class action on behalf of all participants and beneficiaries of defined contribution retirement plans that invested in any Principal Separate Account in the last six years. McCaffree seeks disgorgement of all fees it alleges we improperly retained in addition to other general claims for relief. We filed a motion to dismiss the case and on December 11, 2014, the court granted the motion. On January 8, 2016, the Eighth Circuit Court of Appeals affirmed the district court’s decision dismissing the complaint against us. We will continue to aggressively defend the case.

On August 29, 2013, American Chemicals & Equipment, Inc. 401(k) Retirement Plan (“ACE”) filed a lawsuit in the United States District Court for the Northern District of Alabama against Principal Management Corporation and Principal Global Investors, LLC (the “ACE Defendants”). The lawsuit alleges the ACE Defendants breached their fiduciary duty under Section 36(b) of the Investment Company Act by charging excessive fees on certain of the LifeTime series target date funds. On January 24, 2014, the court granted the motion filed by the ACE Defendants to transfer the case to the Southern District of Iowa. The case is set for trial on April 11, 2016. The ACE Defendants continue to aggressively defend the lawsuit.


302


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

In 2008, we received approximately $440.0 million in connection with the termination of certain structured transactions and the resulting prepayment of our investment in those transactions. The transactions involved Lehman Brothers Special Financing Inc. and Lehman Brothers Holdings Inc. (collectively, “Lehman”) in various capacities. Subsequent to Lehman’s 2008 bankruptcy filing, its bankruptcy estate initiated several lawsuits seeking to recover from numerous sources significant amounts to which it claims entitlement under various theories. We are one of a large group of defendants to this action, and believe that we have meritorious defenses to Lehman’s claims and intend to aggressively defend against them. The estate’s claim against us, including interest through November 2014 (which we also dispute), was approximately $550.0 million.
While the outcome of any pending or future litigation or regulatory matter cannot be predicted, management does not believe that any such matter will have a material adverse effect on our business or financial position. As of December 31, 2015, there were no estimated losses accrued related to the legal matters discussed above because we believe the loss from these matters is not probable and cannot be reasonably estimated.
We believe all of the litigation contingencies discussed above involve a chance of loss that is either remote or reasonably possible. Unless otherwise noted, all of these matters involve unspecified claim amounts, in which the respective plaintiffs seek an indeterminate amount of damages. To the extent such matters present a reasonably possible chance of loss, we are generally not able to estimate the possible loss or range of loss associated therewith.
The outcome of such matters is always uncertain, and unforeseen results can occur. It is possible that such outcomes could require us to pay damages or make other expenditures or establish accruals in amounts that we could not estimate at December 31, 2015.
Guarantees and Indemnifications
In the normal course of business, we have provided guarantees to our ultimate parent, PFG, related to benefit payments of the nonqualified pension plan and to third parties primarily related to a former subsidiary. The terms of these agreements range in duration and often are not explicitly defined. The maximum exposure under these agreements as of December 31, 2015, was approximately $282.0 million. At inception, the fair value of such guarantees was insignificant. In addition, we believe the likelihood is remote that material payments will be required. Therefore, any liability accrued within our consolidated statements of financial position is insignificant. Should we be required to perform under these guarantees, we generally could recover a portion of the loss from third parties through recourse provisions included in agreements with such parties, the sale of assets held as collateral that can be liquidated in the event that performance is required under the guarantees or other recourse generally available to us; therefore, such guarantees would not result in a material adverse effect on our business or financial position. While the likelihood is remote, such outcomes could materially affect net income in a particular quarter or annual period.
We are also subject to various other indemnification obligations issued in conjunction with divestitures, acquisitions and financing transactions whose terms range in duration and often are not explicitly defined. Certain portions of these indemnifications may be capped, while other portions are not subject to such limitations; therefore, the overall maximum amount of the obligation under the indemnifications cannot be reasonably estimated. At inception, the fair value of such indemnifications was insignificant. In addition, we believe the likelihood is remote that material payments will be required. Therefore, any liability accrued within our consolidated statements of financial position is insignificant. While we are unable to estimate with certainty the ultimate legal and financial liability with respect to these indemnifications, we believe that performance under these indemnifications would not result in a material adverse effect on our business or financial position. While the likelihood is remote, performance under these indemnifications could materially affect net income in a particular quarter or annual period.
Guaranty Funds
Under state insurance guaranty fund laws, insurers doing business in a state can be assessed, up to prescribed limits, for certain obligations of insolvent insurance companies to policyholders and claimants. A state’s fund assesses its members based on their pro rata market share of written premiums in the state for the classes of insurance for which the insolvent insurer was engaged. Some states permit member insurers to recover assessments paid through full or partial premium tax offsets. We accrue liabilities for guaranty fund assessments when an assessment is probable, can be reasonably estimated and when the event obligating us to pay has occurred. While we cannot predict the amount and timing of any future assessments, we have established reserves we believe are adequate for assessments relating to insurance companies that are currently subject to insolvency proceedings. As of December 31, 2015 and 2014, the liability balance for guaranty fund assessments, which is not discounted, was $15.1 million and $16.8 million, respectively, and was reported within other liabilities in the consolidated statements of financial position. As of December 31, 2015 and 2014, $5.7 million and $7.1 million, respectively, related to premium tax offsets were included in premiums due and other receivables in the consolidated statements of financial position.

303


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

Operating Leases
As a lessee, we lease office space, data processing equipment, office furniture and office equipment under various operating leases. Rental expense for the years ended December 31, 2015, 2014 and 2013 was $29.5 million, $29.5 million and $26.4 million, respectively.
The following represents payments due by period for operating lease obligations (in millions):
Year ending December 31:
 
 
 
2016
$
34.9
 
2017
 
30.5
 
2018
 
22.5
 
2019
 
15.5
 
2020
 
11.8
 
2021 and thereafter
 
37.7
 
 
Total operating lease obligations
 
152.9
 
 
Less: Future sublease rental income on noncancelable leases
 
4.1
 
 
Total future minimum lease payments
$
148.8

Capital Leases
We lease buildings and hardware storage equipment under capital leases. As of December 31, 2015 and 2014, these leases had a gross asset balance of $57.8 million and $54.5 million and accumulated depreciation of $28.1 million and $17.0 million, respectively. Depreciation expense for the years ended December 31, 2015, 2014 and 2013 was $11.8 million, $11.8 million and $9.3 million, respectively.
The following represents future minimum lease payments due by period for capital lease obligations (in millions).
Year ending December 31:
 
 
 
2016
$
5.7
 
2017
 
2.8
 
2018
 
0.8
 
2019
 
—
 
2020
 
—
 
2021 and thereafter
 
—
 
 
Total
 
9.3
 
 
Less: Amounts representing interest
 
0.3
 
 
Net present value of minimum lease payments
$
9.0


304


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

14. Stockholder's Equity

Other Comprehensive Income (Loss)
 
 
 
For the year ended December 31, 2015
 
Pre-Tax
 
Tax
 
After-Tax
 
 
 
(in millions)
Net unrealized losses on available-for-sale securities during the period
$
(1,552.7)
 
$
544.0
 
$
(1,008.7)
Reclassification adjustment for losses included in net income (1)
 
16.7
 
 
(5.8)
 
 
10.9
Adjustments for assumed changes in amortization patterns
 
201.2
 
 
(70.4)
 
 
130.8
Adjustments for assumed changes in policyholder liabilities
 
645.2
 
 
(225.9)
 
 
419.3
Net unrealized losses on available-for-sale securities
 
(689.6)
 
 
241.9
 
 
(447.7)
 
 
 
 
 
 
 
 
 
 
 
Noncredit component of impairment losses on fixed maturities,
 
 
 
 
 
 
 
 
 
available-for-sale during the period
 
29.2
 
 
(10.3)
 
 
18.9
Adjustments for assumed changes in amortization patterns
 
(0.9)
 
 
0.3
 
 
(0.6)
Adjustments for assumed changes in policyholder liabilities
 
0.7
 
 
(0.2)
 
 
0.5
Noncredit component of impairment losses on fixed maturities,
 
 
 
 
 
 
 
 
 
available-for-sale (2)
 
29.0
 
 
(10.2)
 
 
18.8
 
 
 
 
 
 
 
 
 
 
 
Net unrealized gains on derivative instruments during the period
 
58.4
 
 
(20.4)
 
 
38.0
Reclassification adjustment for gains included in net income (3)
 
(45.2)
 
 
15.9
 
 
(29.3)
Adjustments for assumed changes in amortization patterns
 
19.5
 
 
(6.9)
 
 
12.6
Adjustments for assumed changes in policyholder liabilities
 
(10.8)
 
 
3.8
 
 
(7.0)
Net unrealized gains on derivative instruments
 
21.9
 
 
(7.6)
 
 
14.3
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustment
 
—
 
 
(0.1)
 
 
(0.1)
 
 
 
 
 
 
 
 
 
 
 
Unrecognized postretirement benefit obligation during the period
 
(28.2)
 
 
9.9
 
 
(18.3)
Amortization of prior service benefit and actuarial gain included in
 
 
 
 
 
 
 
 
 
net periodic benefit cost (4)
 
(19.2)
 
 
6.7
 
 
(12.5)
Net unrecognized postretirement benefit obligation
 
(47.4)
 
 
16.6
 
 
(30.8)
 
 
 
 
 
 
 
 
 
Other comprehensive loss
$
(686.1)
 
$
240.6
 
$
(445.5)


305


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015
 
 
 
For the year ended December 31, 2014
 
Pre-Tax
 
Tax
 
After-Tax
 
 
 
(in millions)
Net unrealized gains on available-for-sale securities during the period
$
884.2
 
$
(309.9)
 
$
574.3
Reclassification adjustment for gains included in net income (1)
 
(66.2)
 
 
23.1
 
 
(43.1)
Adjustments for assumed changes in amortization patterns
 
(63.4)
 
 
22.2
 
 
(41.2)
Adjustments for assumed changes in policyholder liabilities
 
(352.3)
 
 
123.5
 
 
(228.8)
Net unrealized gains on available-for-sale securities
 
402.3
 
 
(141.1)
 
 
261.2
 
 
 
 
 
 
 
 
 
 
 
Noncredit component of impairment losses on fixed maturities,
 
 
 
 
 
 
 
 
 
available-for-sale during the period
 
102.2
 
 
(35.8)
 
 
66.4
Adjustments for assumed changes in amortization patterns
 
(4.7)
 
 
1.7
 
 
(3.0)
Adjustments for assumed changes in policyholder liabilities
 
(2.2)
 
 
0.7
 
 
(1.5)
Noncredit component of impairment losses on fixed maturities,
 
 
 
 
 
 
 
 
 
available-for-sale (2)
 
95.3
 
 
(33.4)
 
 
61.9
 
 
 
 
 
 
 
 
 
 
 
Net unrealized gains on derivative instruments during the period
 
100.3
 
 
(35.1)
 
 
65.2
Reclassification adjustment for gains included in net income (3)
 
(3.6)
 
 
1.2
 
 
(2.4)
Adjustments for assumed changes in amortization patterns
 
(12.8)
 
 
4.5
 
 
(8.3)
Adjustments for assumed changes in policyholder liabilities
 
3.2
 
 
(1.1)
 
 
2.1
Net unrealized gains on derivative instruments
 
87.1
 
 
(30.5)
 
 
56.6
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustment
 
(5.3)
 
 
1.6
 
 
(3.7)
 
 
 
 
 
 
 
 
 
 
 
Unrecognized postretirement benefit obligation during the period
 
(26.7)
 
 
9.3
 
 
(17.4)
Amortization of prior service cost and actuarial loss included in
 
 
 
 
 
 
 
 
 
net periodic benefit cost (4)
 
14.5
 
 
(5.1)
 
 
9.4
Net unrecognized postretirement benefit obligation
 
(12.2)
 
 
4.2
 
 
(8.0)
 
 
 
 
 
 
 
 
 
Other comprehensive income
$
567.2
 
$
(199.2)
 
$
368.0
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


306


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015
 
 
 
For the year ended December 31, 2013
 
Pre-Tax
 
Tax
 
After-Tax
 
 
 
(in millions)
Net unrealized losses on available-for-sale securities during the period
$
(1,520.2)
 
$
533.0
 
$
(987.2)
Reclassification adjustment for losses included in net income (1)
 
59.6
 
 
(20.8)
 
 
38.8
Adjustments for assumed changes in amortization patterns
 
252.8
 
 
(88.5)
 
 
164.3
Adjustments for assumed changes in policyholder liabilities
 
471.8
 
 
(165.4)
 
 
306.4
Net unrealized losses on available-for-sale securities
 
(736.0)
 
 
258.3
 
 
(477.7)
 
 
 
 
 
 
 
 
 
 
 
Noncredit component of impairment losses on fixed maturities,
 
 
 
 
 
 
 
 
 
available-for-sale during the period
 
22.0
 
 
(7.6)
 
 
14.4
Adjustments for assumed changes in amortization patterns
 
(14.4)
 
 
5.1
 
 
(9.3)
Noncredit component of impairment losses on fixed maturities,
 
 
 
 
 
 
 
 
 
available-for-sale (2)
 
7.6
 
 
(2.5)
 
 
5.1
 
 
 
 
 
 
 
 
 
 
 
Net unrealized losses on derivative instruments during the period
 
(46.3)
 
 
16.2
 
 
(30.1)
Reclassification adjustment for losses included in net income (3)
 
5.0
 
 
(1.8)
 
 
3.2
Adjustments for assumed changes in amortization patterns
 
10.9
 
 
(3.8)
 
 
7.1
Adjustments for assumed changes in policyholder liabilities
 
20.5
 
 
(7.2)
 
 
13.3
Net unrealized losses on derivative instruments
 
(9.9)
 
 
3.4
 
 
(6.5)
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustment
 
1.6
 
 
(1.6)
 
 
—
 
 
 
 
 
 
 
 
 
 
 
Unrecognized postretirement benefit obligation during the period
 
426.7
 
 
(149.3)
 
 
277.4
Amortization of prior service cost and actuarial loss included in
 
 
 
 
 
 
 
 
 
net periodic benefit cost (4)
 
84.9
 
 
(29.7)
 
 
55.2
Net unrecognized postretirement benefit obligation
 
511.6
 
 
(179.0)
 
 
332.6
 
 
 
 
 
 
 
 
 
Other comprehensive loss
$
(225.1)
 
$
78.6
 
$
(146.5)

(1)
Pre-tax reclassification adjustments relating to available-for-sale securities are reported in net realized capital gains (losses) on the consolidated statements of operations.
(2) Represents the net impact of (1) unrealized gains resulting from reclassification of previously recognized noncredit impairment losses from OCI to net realized capital gains (losses) for fixed maturities with bifurcated OTTI that had additional credit losses or fixed maturities that previously had bifurcated OTTI that have now been sold or are intended to be sold and (2) unrealized losses resulting from reclassification of noncredit impairment losses for fixed maturities with bifurcated OTTI from net realized capital gains (losses) to OCI.
(3) See Note 6, Derivative Financial Instruments - Cash Flow Hedges, for further details.
(4) Pre-tax amortization of prior service cost and actuarial loss included in net periodic benefit cost, which is comprised of amortization of prior service cost (benefit) and recognized net actuarial (gain) loss, is reported in operating expenses on the consolidated statements of operations. See Note 12, Employee and Agent Benefits - Components of Net Periodic Benefit Cost, for further details.


307


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015
Accumulated Other Comprehensive Income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noncredit
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net unrealized
 
component of
 
Net unrealized
 
Foreign
 
Unrecognized
 
Accumulated
 
 
 
gains on
 
impairment losses
 
gains on
 
currency
 
postretirement
 
other
 
 
 
available-for-sale
 
on fixed maturities
 
derivative
 
translation
 
benefit
 
comprehensive
 
 
 
securities
 
available-for-sale
 
instruments
 
adjustment
 
obligation
 
income
 
 
 
(in millions)
Balances at January 1, 2013
$
1,274.0
 
$
(171.9)
 
$
27.1
 
$
1.9
 
$
(488.5)
 
$
642.6
Other comprehensive loss
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
during the period, net of
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
adjustments
 
(516.5)
 
 
—
 
 
(9.7)
 
 
(0.4)
 
 
277.4
 
 
(249.2)
Amounts reclassified from AOCI
 
38.8
 
 
5.1
 
 
3.2
 
 
—
 
 
55.2
 
 
102.3
Other comprehensive loss
 
(477.7)
 
 
5.1
 
 
(6.5)
 
 
(0.4)
 
 
332.6
 
 
(146.9)
Balances at December 31, 2013
 
796.3
 
 
(166.8)
 
 
20.6
 
 
1.5
 
 
(155.9)
 
 
495.7
Other comprehensive income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
during the period, net of
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
adjustments
 
304.3
 
 
—
 
 
59.0
 
 
(2.4)
 
 
(17.4)
 
 
343.5
Amounts reclassified from AOCI
 
(43.1)
 
 
61.9
 
 
(2.4)
 
 
—
 
 
9.4
 
 
25.8
Other comprehensive income
 
261.2
 
 
61.9
 
 
56.6
 
 
(2.4)
 
 
(8.0)
 
 
369.3
Pension plan transfer due to
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
change in sponsorship
 
—
 
 
—
 
 
—
 
 
—
 
 
221.7
 
 
221.7
Balances at December 31, 2014
 
1,057.5
 
 
(104.9)
 
 
77.2
 
 
(0.9)
 
 
57.8
 
 
1,086.7
Other comprehensive loss
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
during the period, net of
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
adjustments
 
(458.6)
 
 
—
 
 
43.6
 
 
—
 
 
(18.3)
 
 
(433.3)
Amounts reclassified from AOCI
 
10.9
 
 
18.8
 
 
(29.3)
 
 
—
 
 
(12.5)
 
 
(12.1)
Other comprehensive loss
 
(447.7)
 
 
18.8
 
 
14.3
 
 
—
 
 
(30.8)
 
 
(445.4)
Balances at December 31, 2015
$
609.8
 
$
(86.1)
 
$
91.5
 
$
(0.9)
 
$
27.0
 
$
641.3

Noncontrolling Interest

Interests held by unaffiliated parties in consolidated entities are reflected in noncontrolling interest, which represents the noncontrolling partners’ share of the underlying net assets of our consolidated subsidiaries. Noncontrolling interest that is not redeemable is reported in the equity section of the consolidated statements of financial position.

The noncontrolling interest holders in certain of our consolidated entities maintain an equity interest that is redeemable at the option of the holder, which may be exercised on varying dates. Since redemption of the noncontrolling interest is outside of our control, this interest is presented on the consolidated statements of financial position line item titled “Redeemable noncontrolling interest.” If the interest were to be redeemed, we would be required to purchase such interest at a redemption value based on fair value or a formula that management intended to reasonably approximate fair value based on a fixed multiple of earnings over a measurement period. As such, the carrying value of the redeemable noncontrolling interest is compared to the redemption value at each reporting period. Any adjustments to the carrying amount of the redeemable noncontrolling interest for changes in redemption value prior to exercise of the redemption option are determined after the attribution of net income or loss of the subsidiary and are recognized in the redemption value as they occur. Adjustments to the carrying value of redeemable noncontrolling interest result in adjustments to additional paid-in capital and/or retained earnings. Adjustments are recorded in retained earnings to the extent the redemption value of the redeemable noncontrolling interest exceeds its fair value. All other adjustments to the redeemable noncontrolling interest are recorded in additional paid-in capital.


308


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

Following is a reconciliation of the changes in the redeemable noncontrolling interest (in millions):
Balance at January 1, 2013
$
23.2
Net income attributable to redeemable noncontrolling interest
 
13.6
Reclassification from stockholder's equity (1)
 
166.7
Distributions to redeemable noncontrolling interest
 
(13.0)
Change in redemption value of redeemable noncontrolling interest
 
17.8
Foreign currency translation adjustment
 
0.4
Balance at December 31, 2013
 
208.7
Net income attributable to redeemable noncontrolling interest
 
9.7
Distributions to redeemable noncontrolling interest
 
(14.9)
Purchase of subsidiary shares from redeemable noncontrolling interest (2)
 
(215.7)
Change in redemption value of redeemable noncontrolling interest
 
34.6
Foreign currency translation adjustment
 
(1.3)
Balance at December 31, 2014
 
21.1
Net income attributable to redeemable noncontrolling interest
 
0.8
Distributions to redeemable noncontrolling interest
 
(1.0)
Purchase of subsidiary shares from redeemable noncontrolling interest
 
(1.7)
Transfer to affiliate (3)
 
(19.1)
Foreign currency translation adjustment
 
(0.1)
Balance at December 31, 2015
$
—

(1)
During the third quarter of 2013, we identified a classification error of certain of our noncontrolling interests. The classification error had no impact on net income. We evaluated the classification error based on qualitative and quantitative factors in accordance with SEC Staff Accounting Bulletins 99 and 108 and concluded the impact was not material in the current or any prior quarterly or annual periods presented. During the third quarter of 2013, we recorded a $166.7 million increase to redeemable noncontrolling interest and a corresponding decrease to stockholder’s equity.
(2) During the third quarter of 2014 we increased our ownership stake in Columbus Circle Investors.
(3) See Note 2, Related Party Transactions, for additional information.

Dividend Limitations
Under Iowa law, we may pay stockholder dividends only from the earned surplus arising from our business and must receive the prior approval of the Commissioner to pay a stockholder dividend if such a stockholder dividend would exceed certain statutory limitations. In general, the current statutory limitation is the greater of 10% of our policyholder surplus as of the preceding year-end or the net gain from operations from the previous calendar year. Based on this limitation and 2015 statutory results, we could pay approximately $937.0 million in stockholder dividends in 2016 without exceeding the statutory limitation.

15. Fair Value Measurements

We use fair value measurements to record fair value of certain assets and liabilities and to estimate fair value of financial instruments not recorded at fair value but required to be disclosed at fair value. Certain financial instruments, particularly policyholder liabilities other than investment contracts, are excluded from these fair value disclosure requirements.



309


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

Valuation Hierarchy

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels. The level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety considering factors specific to the asset or liability.

•
Level 1 - Fair values are based on unadjusted quoted prices in active markets for identical assets or liabilities. Our Level 1 assets and liabilities primarily include exchange traded equity securities, mutual funds and U.S. Treasury bonds.
•
Level 2 - Fair values are based on inputs other than quoted prices within Level 1 that are observable for the asset or liability, either directly or indirectly. Our Level 2 assets and liabilities primarily include fixed maturities (including public and private bonds), equity securities, derivatives and other investments for which public quotations are not available but that are priced by third-party pricing services or internal models using substantially all observable inputs. Our level 2 assets also include commercial mortgage loan investments of consolidated VIEs for which the fair value option was elected.
•
Level 3 - Fair values are based on at least one significant unobservable input for the asset or liability. Our Level 3 assets and liabilities include certain assets and liabilities priced using broker quotes or other valuation methods that utilize at least one significant unobservable input. These include fixed maturities, private equity securities, real estate and commercial mortgage loan investments of our separate accounts, obligations of consolidated VIEs for which the fair value option was elected, complex derivatives, embedded derivatives and equity method real estate investments for which the fair value option was elected.
Determination of Fair Value
The following discussion describes the valuation methodologies and inputs used for assets and liabilities measured at fair value on a recurring basis or disclosed at fair value. The techniques utilized in estimating the fair values of financial instruments are reliant on the assumptions used. Care should be exercised in deriving conclusions about our business, its value or financial position based on the fair value information of financial instruments presented below.
Fair value estimates are made based on available market information and judgments about the financial instrument at a specific point in time. Such estimates do not consider the tax impact of the realization of unrealized gains or losses. In addition, the disclosed fair value may not be realized in the immediate settlement of the financial instrument. We validate prices through an investment analyst review process, which includes validation through direct interaction with external sources, review of recent trade activity or use of internal models. In circumstances where broker quotes are used to value an instrument, we generally receive one non-binding quote. Broker quotes are validated through an investment analyst review process, which includes validation through direct interaction with external sources and use of internal models or other relevant information. Beginning in 2015 a measurement alternative is used for CCFEs utilizing the more observable of the fair value of the financial assets or the financial liabilities for both the financial assets and financial liabilities. We did not make any other significant changes to our valuation processes during 2015.
Fixed Maturities
Fixed maturities include bonds, redeemable preferred stock, ABS and certain nonredeemable preferred securities. When available, the fair value of fixed maturities is based on quoted prices of identical assets in active markets. These are reflected in Level 1 and primarily include U.S. Treasury bonds and actively traded redeemable corporate preferred securities.
When quoted prices of identical assets in active markets are not available, our first priority is to obtain prices from third party pricing vendors. We have regular interaction with these vendors to ensure we understand their pricing methodologies and to confirm they are utilizing observable market information. Their methodologies vary by asset class and include inputs such as estimated cash flows, benchmark yields, reported trades, broker quotes, credit quality, industry events and economic events. Fixed maturities with validated prices from pricing services, which includes the majority of our public fixed maturities in all asset classes, are generally reflected in Level 2. Also included in Level 2 are corporate bonds where quoted market prices are not available, for which an internal model using substantially all observable inputs or a matrix pricing valuation approach is used. In the matrix approach, securities are grouped into pricing categories that vary by sector, rating and average life. Each pricing category is assigned a risk spread based on studies of observable public market data from the investment professionals assigned to specific security classes. The expected cash flows of the security are then discounted back at the current Treasury curve plus the appropriate risk spread. Although the matrix valuation approach provides a fair valuation of each pricing category, the valuation of an individual security within each pricing category may actually be impacted by company specific factors.

310


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

If we are unable to price a fixed maturity security using prices from third party pricing vendors or other sources specific to the asset class, we may obtain a broker quote or utilize an internal pricing model specific to the asset utilizing relevant market information, to the extent available and where at least one significant unobservable input is utilized, which are reflected in Level 3 and can include fixed maturities across all asset classes. As of December 31, 2015, less than 1% of our fixed maturities were valued using internal pricing models, which were classified as Level 3 assets accordingly.

The primary inputs, by asset class, for valuations of the majority of our Level 2 investments from third party pricing vendors or our internal pricing valuation approach are described below.

U.S. Government and Agencies/Non-U.S. Governments. Inputs include recently executed market transactions, interest rate yield curves, maturity dates, market price quotations and credit spreads relating to similar instruments.

States and Political Subdivisions. Inputs include Municipal Securities Rulemaking Board reported trades, U.S. Treasury and other benchmark curves, material event notices, new issue data and obligor credit ratings.

Corporate. Inputs include recently executed transactions, market price quotations, benchmark yields, issuer spreads and observations of equity and credit default swap curves related to the issuer. For private placement corporate securities valued through the matrix valuation approach inputs include the current Treasury curve and risk spreads based on sector, rating and average life of the issuance.

RMBS, CMBS, Collateralized Debt Obligations and Other Debt Obligations. Inputs include cash flows, priority of the tranche in the capital structure, expected time to maturity for the specific tranche, reinvestment period remaining and performance of the underlying collateral including prepayments, defaults, deferrals, loss severity of defaulted collateral and, for RMBS, prepayment speed assumptions. Other inputs include market indices and recently executed market transactions.
Equity Securities
Equity securities include mutual funds, common stock and nonredeemable preferred stock. Fair values of equity securities are determined using quoted prices in active markets for identical assets when available, which are reflected in Level 1. When quoted prices are not available, we may utilize internal valuation methodologies appropriate for the specific asset that use observable inputs such as underlying share prices or the net asset value (“NAV”), which are reflected in Level 2. Fair values might also be determined using broker quotes or through the use of internal models or analysis that incorporate significant assumptions deemed appropriate given the circumstances and consistent with what other market participants would use when pricing such securities, which are reflected in Level 3. 
Derivatives
The fair values of exchange-traded derivatives are determined through quoted market prices, which are reflected in Level 1. Exchange-traded derivatives include futures that are settled daily such that their fair value is not reflected in the consolidated statements of financial position. The fair values of derivative instruments cleared through centralized clearinghouses are determined through market prices published by the clearinghouses, which are reflected in Level 2. The clearinghouses may utilize the overnight indexed swap curve in their valuation. The fair values of bilateral OTC derivative instruments are determined using either pricing valuation models that utilize market observable inputs or broker quotes. The majority of our bilateral OTC derivatives are valued with models that use market observable inputs, which are reflected in Level 2. Significant inputs include contractual terms, interest rates, currency exchange rates, credit spread curves, equity prices, and volatilities. These valuation models consider projected discounted cash flows, relevant swap curves, and appropriate implied volatilities. Certain bilateral OTC derivatives utilize unobservable market data, primarily independent broker quotes that are nonbinding quotes based on models that do not reflect the result of market transactions, which are reflected in Level 3.
Our non-cleared derivative contracts are generally documented under ISDA Master Agreements, which provide for legally enforceable set-off and close-out netting of exposures to specific counterparties. Collateral arrangements are bilateral and based on current ratings of each entity. We utilize the LIBOR interest rate curve to value our positions, which includes a credit spread. This credit spread incorporates an appropriate level of nonperformance risk into our valuations given the current ratings of our counterparties, as well as the collateral agreements in place. Counterparty credit risk is routinely monitored to ensure our adjustment for non-performance risk is appropriate. Our centrally cleared derivative contracts are conducted with regulated centralized clearinghouses, which provide for daily exchange of cash collateral equal to the difference in the daily market values of those contracts that eliminates the non-performance risk on these trades.

311


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015
Interest Rate Contracts. For non-cleared contracts we use discounted cash flow valuation techniques to determine the fair value of interest rate swaps using observable swap curves as the inputs. These are reflected in Level 2. For centrally cleared contracts we use published prices from clearinghouses. These are reflected in Level 2. In addition, we have a limited number of complex inflation-linked interest rate swaps, interest rate collars and swaptions that are valued using broker quotes. These are reflected in Level 3.
Foreign Exchange Contracts. We use discounted cash flow valuation techniques that utilize observable swap curves and exchange rates as the inputs to determine the fair value of foreign currency swaps. These are reflected in Level 2. In addition, we have a limited number of non-standard currency swaps that are valued using broker quotes. These are reflected within Level 3.
Equity Contracts. We use an option pricing model using observable implied volatilities, dividend yields, index prices and swap curves as the inputs to determine the fair value of equity options. These are reflected in Level 2.
Credit Contracts. We use either the ISDA Credit Default Swap Standard discounted cash flow model that utilizes observable default probabilities and recovery rates as inputs or broker prices to determine the fair value of credit default swaps. These are reflected in Level 3. In addition, we have a limited number of total return swaps that are valued based on the observable quoted price of underlying equity indices. These are reflected in Level 2.
Other Investments
Other investments reported at fair value include seed money investments, other investment funds, commercial mortgage loans of consolidated VIEs and equity method real estate investments for which the fair value option was elected.
The fair value of seed money and other investment funds is determined using the NAV of the fund. The NAV of the fund represents the price at which we feel we would be able to initiate a transaction. Seed money investments in mutual funds for which the NAV represents a quoted price in an active market for identical assets are reflected in Level 1. Seed money investments in mutual funds that do not have a quoted price in an active market and other investment funds, which are relatively illiquid due to restrictions on sale, are reflected in Level 2.
Commercial mortgage loans of consolidated VIEs valued using the measurement alternative for CCFEs are reflected in Level 2. These investments are based on the more observable fair value of the liabilities of the consolidated VIEs.
Prior to 2015, commercial mortgage loans of consolidated VIEs for which the fair value option was elected were reflected in Level 3. The fair value of the commercial mortgage loans was computed utilizing a discount rate based on the current market. The market discount rate was then adjusted based on various factors that differentiate it from our pool of loans. Equity method real estate investments for which the fair value option was elected are reflected in Level 3. The equity method real estate investments consist of underlying real estate and debt. The real estate fair value is estimated using a discounted cash flow valuation model that utilizes public real estate market data inputs such as transaction prices, market rents, vacancy levels, leasing absorption, market cap rates and discount rates. The debt fair value is estimated using a discounted cash flow analysis based on our incremental borrowing rate for similar borrowing arrangements.
Cash and Cash Equivalents
Certain cash equivalents are reported at fair value on a recurring basis and include money market instruments and other short-term investments with maturities of less than three months. Fair values of these cash equivalents may be determined using public quotations, when available, which are reflected in Level 1. When public quotations are not available, because of the highly liquid nature of these assets, carrying amounts may be used to approximate fair values, which are reflected in Level 2.
Separate Account Assets
Separate account assets include equity securities, debt securities and derivative instruments, for which fair values are determined as previously described, and are reflected in Level 1, Level 2 and Level 3. Separate account assets also include commercial mortgage loans, for which the fair value is estimated by discounting the expected total cash flows using market rates that are applicable to the yield, credit quality and maturity of the loans. The market clearing spreads vary based on mortgage type, weighted average life, rating and liquidity. These are reflected in Level 3. Finally, separate account assets include real estate, for which the fair value is estimated using discounted cash flow valuation models that utilize various public real estate market data inputs. In addition, each property is appraised annually by an independent appraiser. The real estate included in separate account assets is recorded net of related mortgage encumbrances for which the fair value is estimated using discounted cash flow analysis based on our incremental borrowing rate for similar borrowing arrangements. The real estate within the separate accounts is reflected in Level 3.
 

312


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

Investment Contracts

Certain annuity contracts and other investment contracts include embedded derivatives that have been bifurcated from the host contract and that are measured at fair value on a recurring basis, which are reflected in Level 3. The key assumptions for calculating the fair value of the embedded derivative liabilities are market assumptions (such as equity market returns, interest rate levels, market volatility and correlations) and policyholder behavior assumptions (such as lapse, mortality, utilization and withdrawal patterns). Risk margins are included in the policyholder behavior assumptions. The assumptions are based on a combination of historical data and actuarial judgment. The embedded derivative liabilities are valued using stochastic models that incorporate a spread reflecting our own creditworthiness. 

The assumption for our own non-performance risk for investment contracts and any embedded derivatives bifurcated from certain annuity and investment contracts is based on the current market credit spreads for debt-like instruments that we have issued and are available in the market.

Other Liabilities

Certain obligations reported in other liabilities include embedded derivatives to deliver underlying securities of structured investments to third parties. The fair value of the embedded derivatives is calculated based on the value of the underlying securities that are valued based on prices obtained from third party pricing vendors as utilized and described in our discussion of how fair value is determined for fixed maturities, which are reflected in Level 2.

Additionally, obligations of consolidated VIEs for which the fair value option was elected are included in other liabilities. The VIEs’ obligations are valued either based on prices obtained from third party pricing vendors which are reflected in Level 2, or internal pricing models, which are reflected in Level 3.



313


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis are summarized below.

 
 
 
December 31, 2015
 
 
 
Assets/
 
 
 
 
 
 
 
 
 
 
 
 
(liabilities)
 
Fair value hierarchy level
 
 
 
measured at
 
 
 
 
 
 
 
 
 
 
 
fair value
 
Level 1
 
Level 2
 
Level 3
 
 
 
(in millions)
Assets
 
 
 
 
 
 
 
 
 
 
 
 
Fixed maturities, available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
 
     U.S. government and agencies
 
$
1,438.7
 
$
919.8

 
$
518.9
 
$
—

     Non-U.S. governments
 
 
424.0
 
 
—

 
 
384.5
 
 
39.5

     States and political subdivisions
 
 
4,664.3
 
 
—

 
 
4,664.3
 
 
—

     Corporate
 
 
28,275.1
 
 
38.0

 
 
28,080.8
 
 
156.3

     Residential mortgage-backed securities
 
 
2,614.2
 
 
—

 
 
2,614.2
 
 
—

     Commercial mortgage-backed securities
 
 
3,850.0
 
 
—

 
 
3,845.2
 
 
4.8

     Collateralized debt obligations
 
 
663.6
 
 
—

 
 
600.1
 
 
63.5

     Other debt obligations
 
 
4,533.5
 
 
—

 
 
4,526.0
 
 
7.5

Total fixed maturities, available-for-sale
 
 
46,463.4
 
 
957.8

 
 
45,234.0
 
 
271.6

Fixed maturities, trading
 
 
538.8
 
 
199.2

 
 
204.1
 
 
135.5

Equity securities, available-for-sale
 
 
101.8
 
 
62.2

 
 
35.5
 
 
4.1

Equity securities, trading
 
 
204.4
 
 
2.7

 
 
201.7
 
 
—

Derivative assets (1)
 
 
656.5
 
 
—

 
 
609.8
 
 
46.7

Other investments (2)
 
 
141.5
 
 
16.5

 
 
89.9
 
 
35.1

Cash equivalents (3)
 
 
948.9
 
 
—

 
 
948.9
 
 
—

     Sub-total excluding separate account assets
 
 
49,055.3
 
 
1,238.4

 
 
47,323.9
 
 
493.0

 
 
 
 
 
 
 
 
 
 
 
 
 
Separate account assets
 
 
94,762.8
 
 
72,096.2

 
 
15,775.1
 
 
6,891.5

Total assets
 
$
143,818.1
 
$
73,334.6

 
$
63,099.0
 
$
7,384.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
Investment contracts (4)
 
$
(151.1)
 
$
—

 
$
—
 
$
(151.1)

Derivative liabilities (1)
 
 
(729.0)
 
 
—

 
 
(678.5)
 
 
(50.5)

Other liabilities (4)
 
 
(298.4)
 
 
—

 
 
(230.3)
 
 
(68.1)

Total liabilities
 
$
(1,178.5)
 
$
—

 
$
(908.8)
 
$
(269.7)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net assets
 
$
142,639.6
 
$
73,334.6

 
$
62,190.2
 
$
7,114.8



314


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

 
 
 
December 31, 2014
 
 
 
Assets/
 
 
 
 
 
 
 
 
 
 
 
 
(liabilities)
 
Fair value hierarchy level
 
 
 
measured at
 
 
 
 
 
 
 
 
 
 
 
fair value
 
Level 1
 
Level 2
 
Level 3
 
 
 
(in millions)
Assets
 
 
 
 
 
 
 
 
 
 
 
 
Fixed maturities, available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
 
     U.S. government and agencies
 
$
1,110.7
 
$
709.4
 
$
401.3
 
$
—
     Non-U.S. governments
 
 
446.6
 
 
—
 
 
436.3
 
 
10.3
     States and political subdivisions
 
 
4,176.2
 
 
—
 
 
4,176.2
 
 
—
     Corporate
 
 
28,914.7
 
 
40.2
 
 
28,685.9
 
 
188.6
     Residential mortgage-backed securities
 
 
2,805.2
 
 
—
 
 
2,805.2
 
 
—
     Commercial mortgage-backed securities
 
 
3,975.5
 
 
—
 
 
3,975.5
 
 
—
     Collateralized debt obligations
 
 
504.1
 
 
—
 
 
439.9
 
 
64.2
     Other debt obligations
 
 
4,616.4
 
 
—
 
 
4,552.7
 
 
63.7
Total fixed maturities, available-for-sale
 
 
46,549.4
 
 
749.6
 
 
45,473.0
 
 
326.8
Fixed maturities, trading
 
 
400.3
 
 
—
 
 
260.6
 
 
139.7
Equity securities, available-for-sale
 
 
108.9
 
 
53.4
 
 
51.4
 
 
4.1
Equity securities, trading
 
 
191.6
 
 
2.0
 
 
189.6
 
 
—
Derivative assets (1)
 
 
650.8
 
 
—
 
 
597.1
 
 
53.7
Other investments (2)
 
 
239.6
 
 
—
 
 
112.4
 
 
127.2
Cash equivalents (3)
 
 
284.5
 
 
—
 
 
284.5
 
 
—
     Sub-total excluding separate account assets
 
 
48,425.1
 
 
805.0
 
 
46,968.6
 
 
651.5
 
 
 
 
 
 
 
 
 
 
 
 
 
Separate account assets
 
 
94,328.4
 
 
73,181.4
 
 
15,289.5
 
 
5,857.5
Total assets
 
$
142,753.5
 
$
73,986.4
 
$
62,258.1
 
$
6,509.0
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
Investment contracts (4)
 
$
(155.9)
 
$
—
 
$
—
 
$
(155.9)
Derivative liabilities (1)
 
 
(763.8)
 
 
—
 
 
(728.3)
 
 
(35.5)
Other liabilities (4)
 
 
(310.1)
 
 
—
 
 
(243.8)
 
 
(66.3)
Total liabilities
 
$
(1,229.8)
 
$
—
 
$
(972.1)
 
$
(257.7)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net assets
 
$
141,523.7
 
$
73,986.4
 
$
61,286.0
 
$
6,251.3

(1) Within the consolidated statements of financial position, derivative assets are reported with other investments and derivative liabilities are reported with other liabilities. Refer to Note 6, Derivative Financial Instruments, for further information on fair value by class of derivative instruments. Our derivatives are primarily Level 2, with the exception of certain credit default swaps and other swaps that are Level 3.
(2) Primarily includes seed money investments, other investment funds, commercial mortgage loans of consolidated VIEs and equity method investments reported at fair value.
(3) Includes money market instruments and short-term investments with a maturity date of three months or less when purchased.
(4) Includes bifurcated embedded derivatives that are reported at fair value within the same line item in the consolidated statements of financial position in which the host contract is reported. Other liabilities also include obligations of consolidated VIEs reported at fair value.



315


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

Changes in Level 3 Fair Value Measurements

The reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) are summarized as follows:
 
 
 
 
 
For the year ended December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
Total realized/unrealized
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
gains (losses)
 
 
 
 
 
 
 
 
 
 
 
 
Changes in
 
 
 
 
 
Beginning
 
 
 
 
 
 
 
Net
 
 
 
 
 
 
 
Ending
 
unrealized
 
 
 
 
 
asset/
 
 
 
 
 
 
 
purchases,
 
 
 
 
 
 
 
asset/
 
gains (losses)
 
 
 
 
 
(liability)
 
 
 
 
 
 
sales,
 
 
 
 
 
 
 
(liability)
 
included in
 
 
 
 
 
balance
 
Included
 
Included in
 
issuances
 
 
 
 
 
 
 
balance
 
net income
 
 
 
 
 
as of
 
 in net
 
other
 
and
 
Transfers
 
Transfers
 
as of
 
relating to
 
 
 
 
 
December 31,
 
income
 
comprehensive
 
settlements
 
into
 
out of
 
December 31,
 
positions still
 
 
 
 
 
2014
 
(1)
 
income
 
(4)
 
Level 3
 
Level 3
 
2015
 
held (1)
 
 
 
 
 
(in millions)
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed maturities,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-U.S.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
governments
$
10.3
 
$
—
 
$
(0.7)
 
$
29.9
 
$
—
 
$
—
 
$
39.5
 
$
—
 
Corporate
 
188.6
 
 
—
 
 
(4.8)
 
 
17.2
 
 
42.8
 
 
(87.5)
 
 
156.3
 
 
—
 
Commercial
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
mortgage-backed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
securities
 
—
 
 
0.1
 
 
—
 
 
12.3
 
 
—
 
 
(7.6)
 
 
4.8
 
 
—
 
Collateralized
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
debt obligations
 
64.2
 
 
—
 
 
(0.1)
 
 
(0.6)
 
 
—
 
 
—
 
 
63.5
 
 
—
 
Other debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
obligations
 
63.7
 
 
—
 
 
0.8
 
 
7.0
 
 
—
 
 
(64.0)
 
 
7.5
 
 
—
Total fixed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
maturities,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
available-for-sale
 
326.8
 
 
0.1
 
 
(4.8)
 
 
65.8
 
 
42.8
 
 
(159.1)
 
 
271.6
 
 
—
Fixed maturities,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
trading
 
139.7
 
 
(4.0)
 
 
—
 
 
(0.2)
 
 
—
 
 
—
 
 
135.5
 
 
(4.2)
Equity securities,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
available-for-sale
 
4.1
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
4.1
 
 
—
Derivative assets
 
53.7
 
 
(9.2)
 
 
—
 
 
2.2
 
 
—
 
 
—
 
 
46.7
 
 
(9.0)
Other investments
 
127.2
 
 
7.3
 
 
—
 
 
(64.4)
 
 
—
 
 
(35.0)
 
 
35.1
 
 
7.2
Separate account
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
assets (2)
 
5,857.5
 
 
983.9
 
 
—
 
 
41.9
 
 
8.5
 
 
(0.3)
 
 
6,891.5
 
 
850.3
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment contracts
 
(155.9)
 
 
(5.7)
 
 
—
 
 
10.5
 
 
—
 
 
—
 
 
(151.1)
 
 
(10.1)
Derivative liabilities
 
(35.5)
 
 
(17.4)
 
 
2.2
 
 
0.2
 
 
—
 
 
—
 
 
(50.5)
 
 
(18.0)
Other liabilities (3)
 
(66.3)
 
 
(1.8)
 
 
—
 
 
—
 
 
—
 
 
—
 
 
(68.1)
 
 
(1.9)


316


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

 
 
 
 
 
For the year ended December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
Total realized/unrealized
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
gains (losses)
 
 
 
 
 
 
 
 
 
 
 
 
Changes in
 
 
 
 
 
Beginning
 
 
 
 
 
 
 
Net
 
 
 
 
 
 
 
Ending
 
unrealized
 
 
 
 
 
asset/
 
 
 
 
 
 
 
purchases,
 
 
 
 
 
 
 
asset/
 
gains (losses)
 
 
 
 
 
(liability)
 
 
 
 
 
 
sales,
 
 
 
 
 
 
 
(liability)
 
included in
 
 
 
 
 
balance
 
Included
 
Included in
 
issuances
 
 
 
 
 
 
 
balance
 
net income
 
 
 
 
 
as of
 
 in net
 
other
 
and
 
Transfers
 
Transfers
 
as of
 
relating to
 
 
 
 
 
December 31,
 
income
 
comprehensive
 
settlements
 
into
 
out of
 
December 31,
 
positions still
 
 
 
 
 
2013
 
(1)
 
income
 
(4)
 
Level 3
 
Level 3
 
2014
 
held (1)
 
 
 
 
 
(in millions)
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed maturities,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-U.S.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
governments
$
11.7
 
$
—
 
$
(0.2)
 
$
(1.2)
 
$
—
 
$
—
 
$
10.3
 
$
—
 
States and political
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
subdivisions
 
1.8
 
 
—
 
 
—
 
 
(0.1)
 
 
—
 
 
(1.7)
 
 
—
 
 
—
 
Corporate
 
114.8
 
 
(1.4)
 
 
(1.5)
 
 
48.0
 
 
46.6
 
 
(17.9)
 
 
188.6
 
 
(1.3)
 
Commercial
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
mortgage-backed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
securities
 
1.6
 
 
(1.2)
 
 
1.3
 
 
(6.0)
 
 
6.8
 
 
(2.5)
 
 
—
 
 
—
 
Collateralized
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
debt obligations
 
37.8
 
 
—
 
 
0.4
 
 
46.1
 
 
3.9
 
 
(24.0)
 
 
64.2
 
 
—
 
Other debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
obligations
 
84.1
 
 
—
 
 
1.4
 
 
7.9
 
 
—
 
 
(29.7)
 
 
63.7
 
 
—
Total fixed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
maturities,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
available-for-sale
 
251.8
 
 
(2.6)
 
 
1.4
 
 
94.7
 
 
57.3
 
 
(75.8)
 
 
326.8
 
 
(1.3)
Fixed maturities,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
trading
 
169.9
 
 
9.9
 
 
—
 
 
(40.1)
 
 
—
 
 
—
 
 
139.7
 
 
1.2
Equity securities,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
available-for-sale
 
16.9
 
 
4.2
 
 
2.8
 
 
(20.0)
 
 
0.2
 
 
—
 
 
4.1
 
 
(0.3)
Derivative assets
 
74.2
 
 
(32.0)
 
 
—
 
 
11.5
 
 
—
 
 
—
 
 
53.7
 
 
(32.0)
Other investments
 
142.9
 
 
15.7
 
 
—
 
 
(31.4)
 
 
—
 
 
—
 
 
127.2
 
 
15.7
Separate account
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
assets (2)
 
5,097.9
 
 
653.5
 
 
—
 
 
115.6
 
 
4.4
 
 
(13.9)
 
 
5,857.5
 
 
608.4
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment contracts
 
9.5
 
 
(190.2)
 
 
—
 
 
24.8
 
 
—
 
 
—
 
 
(155.9)
 
 
(190.6)
Derivative liabilities
 
(39.6)
 
 
3.9
 
 
(0.4)
 
 
0.6
 
 
—
 
 
—
 
 
(35.5)
 
 
(0.9)
Other liabilities (3)
 
(73.9)
 
 
(1.4)
 
 
—
 
 
9.0
 
 
—
 
 
—
 
 
(66.3)
 
 
(0.8)


317


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

 
 
 
 
 
For the year ended December 31, 2013
 
 
 
 
 
 
 
 
 
 
 
Total realized/unrealized
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
gains (losses)
 
 
 
 
 
 
 
 
 
 
 
 
Changes in
 
 
 
 
 
Beginning
 
 
 
 
 
 
 
Net
 
 
 
 
 
 
 
Ending
 
unrealized
 
 
 
 
 
asset/
 
 
 
 
 
 
 
purchases,
 
 
 
 
 
 
 
asset/
 
gains (losses)
 
 
 
 
 
(liability)
 
 
 
 
 
 
sales,
 
 
 
 
 
 
 
(liability)
 
included in
 
 
 
 
 
balance
 
Included
 
Included in
 
issuances
 
 
 
 
 
 
 
balance
 
net income
 
 
 
 
 
as of
 
 in net
 
other
 
and
 
Transfers
 
Transfers
 
as of
 
relating to
 
 
 
 
 
December 31,
 
income
 
comprehensive
 
settlements
 
into
 
out of
 
December 31,
 
positions still
 
 
 
 
 
2012
 
(1)
 
income
 
(4)
 
Level 3
 
Level 3
 
2013
 
held (1)
 
 
 
 
 
(in millions)
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed maturities,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-U.S.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
governments
$
12.9
 
$
—
 
$
—
 
$
(1.2)
 
$
—
 
$
—
 
$
11.7
 
$
—
 
States and political
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
subdivisions
 
1.9
 
 
—
 
 
—
 
 
(0.1)
 
 
—
 
 
—
 
 
1.8
 
 
—
 
Corporate
 
117.8
 
 
(11.4)
 
 
2.2
 
 
(15.2)
 
 
105.3
 
 
(83.9)
 
 
114.8
 
 
(8.6)
 
Commercial
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
mortgage-backed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
securities
 
—
 
 
—
 
 
(0.1)
 
 
(0.7)
 
 
2.4
 
 
—
 
 
1.6
 
 
—
 
Collateralized
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
debt obligations
 
77.6
 
 
2.1
 
 
7.2
 
 
(56.0)
 
 
31.7
 
 
(24.8)
 
 
37.8
 
 
—
 
Other debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
obligations
 
14.7
 
 
(0.3)
 
 
2.8
 
 
34.9
 
 
32.0
 
 
—
 
 
84.1
 
 
(0.3)
Total fixed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
maturities,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
available-for-sale
 
224.9
 
 
(9.6)
 
 
12.1
 
 
(38.3)
 
 
171.4
 
 
(108.7)
 
 
251.8
 
 
(8.9)
Fixed maturities,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
trading
 
166.8
 
 
3.0
 
 
—
 
 
0.1
 
 
—
 
 
—
 
 
169.9
 
 
3.1
Equity securities,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
available-for-sale
 
15.3
 
 
(0.2)
 
 
1.8
 
 
—
 
 
—
 
 
—
 
 
16.9
 
 
(0.2)
Derivative assets
 
73.3
 
 
(20.7)
 
 
—
 
 
21.6
 
 
—
 
 
—
 
 
74.2
 
 
(19.8)
Other investments
 
113.9
 
 
11.2
 
 
—
 
 
17.8
 
 
—
 
 
—
 
 
142.9
 
 
11.2
Separate account
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
assets (2)
 
4,450.7
 
 
585.2
 
 
—
 
 
55.8
 
 
12.7
 
 
(6.5)
 
 
5,097.9
 
 
556.1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment contracts
 
(148.1)
 
 
143.4
 
 
—
 
 
14.2
 
 
—
 
 
—
 
 
9.5
 
 
141.1
Derivative liabilities
 
(101.7)
 
 
54.4
 
 
(0.1)
 
 
7.8
 
 
—
 
 
—
 
 
(39.6)
 
 
53.9
Other liabilities (3)
 
(39.6)
 
 
(34.3)
 
 
—
 
 
—
 
 
—
 
 
—
 
 
(73.9)
 
 
(34.3)

(1) Both realized gains (losses) and mark-to-market unrealized gains (losses) are generally reported in net realized capital gains (losses) within the consolidated statements of operations. Realized and unrealized gains (losses) on certain fixed maturities, trading and certain derivatives used in relation to certain trading portfolios are reported in net investment income within the consolidated statements of operations.
(2) Gains and losses for separate account assets do not impact net income as the change in value of separate account assets is offset by a change in value of separate account liabilities.
(3) Certain embedded derivatives reported in other liabilities are part of a cash flow hedge, with the effective portion of the unrealized gains (losses) recorded in AOCI.
(4) Gross purchases, sales, issuances and settlements were:


318


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

 
 
 
 
 
For the year ended December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
Net purchases,
 
 
 
 
 
 
 
 
 
 
 
 
 
sales, issuances
 
 
 
 
 
Purchases
 
Sales
 
Issuances
 
Settlements
 
and settlements
 
 
 
 
 
(in millions)
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed maturities, available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-U.S. governments
$
31.2
 
$
—
 
$
—
 
$
(1.3)
 
$
29.9
 
Corporate
 
34.6
 
 
—
 
 
—
 
 
(17.4)
 
 
17.2
 
Commercial mortgage-backed securities
 
12.4
 
 
—
 
 
—
 
 
(0.1)
 
 
12.3
 
Collateralized debt obligations
 
0
 
 
—
 
 
—
 
 
(0.6)
 
 
(0.6)
 
Other debt obligations
 
16.5
 
 
—
 
 
—
 
 
(9.5)
 
 
7.0
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total fixed maturities, available-for-sale
 
94.7
 
 
—
 
 
—
 
 
(28.9)
 
 
65.8
Fixed maturities, trading
 
—
 
 
(0.2)
 
 
—
 
 
—
 
 
(0.2)
Derivative assets
 
2.5
 
 
(0.3)
 
 
—
 
 
—
 
 
2.2
Other investments
 
4.4
 
 
(68.8)
 
 
—
 
 
—
 
 
(64.4)
Separate account assets (5)
 
739.2
 
 
(396.4)
 
 
(323.4)
 
 
22.5
 
 
41.9
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment contracts
 
—
 
 
—
 
 
5.1
 
 
5.4
 
 
10.5
Derivative liabilities
 
—
 
 
0.2
 
 
—
 
 
—
 
 
0.2

 
 
 
 
 
For the year ended December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
Net purchases,
 
 
 
 
 
 
 
 
 
 
 
 
 
sales, issuances
 
 
 
 
 
Purchases
 
Sales
 
Issuances
 
Settlements
 
and settlements
 
 
 
 
 
(in millions)
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed maturities, available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-U.S. governments
$
—
 
$
—
 
$
—
 
$
(1.2)
 
$
(1.2)
 
States and political subdivisions
 
—
 
 
—
 
 
—
 
 
(0.1)
 
 
(0.1)
 
Corporate
 
79.3
 
 
(23.6)
 
 
—
 
 
(7.7)
 
 
48.0
 
Commercial mortgage-backed securities
 
—
 
 
(5.8)
 
 
—
 
 
(0.2)
 
 
(6.0)
 
Collateralized debt obligations
 
61.3
 
 
—
 
 
—
 
 
(15.2)
 
 
46.1
 
Other debt obligations
 
19.2
 
 
—
 
 
—
 
 
(11.3)
 
 
7.9
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total fixed maturities, available-for-sale
 
159.8
 
 
(29.4)
 
 
—
 
 
(35.7)
 
 
94.7
Fixed maturities, trading
 
—
 
 
(10.0)
 
 
—
 
 
(30.1)
 
 
(40.1)
Equity securities, available-for-sale
 
—
 
 
(20.0)
 
 
—
 
 
—
 
 
(20.0)
Derivative assets
 
11.8
 
 
(0.3)
 
 
—
 
 
—
 
 
11.5
Other investments
 
0.2
 
 
—
 
 
—
 
 
(31.6)
 
 
(31.4)
Separate account assets (5)
 
537.6
 
 
(330.5)
 
 
(331.8)
 
 
240.3
 
 
115.6
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment contracts
 
—
 
 
—
 
 
20.7
 
 
4.1
 
 
24.8
Derivative liabilities
 
(1.5)
 
 
2.1
 
 
—
 
 
—
 
 
0.6
Other liabilities
 
—
 
 
9.0
 
 
—
 
 
—
 
 
9.0


319


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015
 
 
 
 
 
For the year ended December 31, 2013
 
 
 
 
 
 
 
 
 
 
 
 
 
Net purchases,
 
 
 
 
 
 
 
 
 
 
 
 
 
sales, issuances
 
 
 
 
 
Purchases
 
Sales
 
Issuances
 
Settlements
 
and settlements
 
 
 
 
 
(in millions)
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed maturities, available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-U.S. governments
$
—
 
$
—
 
$
—
 
$
(1.2)
 
$
(1.2)
 
States and political subdivisions
 
—
 
 
—
 
 
—
 
 
(0.1)
 
 
(0.1)
 
Corporate
 
18.0
 
 
(17.0)
 
 
—
 
 
(16.2)
 
 
(15.2)
 
Commercial mortgage-backed securities
 
—
 
 
—
 
 
—
 
 
(0.7)
 
 
(0.7)
 
Collateralized debt obligations
 
17.0
 
 
(47.4)
 
 
—
 
 
(25.6)
 
 
(56.0)
 
Other debt obligations
 
37.8
 
 
—
 
 
—
 
 
(2.9)
 
 
34.9
Total fixed maturities, available-for-sale
 
72.8
 
 
(64.4)
 
 
—
 
 
(46.7)
 
 
(38.3)
Fixed maturities, trading
 
—
 
 
—
 
 
—
 
 
0.1
 
 
0.1
Derivative assets
 
22.1
 
 
(0.5)
 
 
—
 
 
—
 
 
21.6
Other investments
 
30.2
 
 
—
 
 
—
 
 
(12.4)
 
 
17.8
Separate account assets (5)
 
276.0
 
 
(170.8)
 
 
(21.8)
 
 
(27.6)
 
 
55.8
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment contracts
 
—
 
 
—
 
 
10.9
 
 
3.3
 
 
14.2
Derivative liabilities
 
(3.4)
 
 
11.2
 
 
—
 
 
—
 
 
7.8

(1)
Issuances and settlements include amounts related to mortgage encumbrances associated with real estate in our separate accounts.

Transfers

Transfers of assets and liabilities measured at fair value on a recurring basis between fair value hierarchy levels are summarized below.
 
 
 
 
 
For the year ended December 31, 2015
 
 
 
 
 
Transfers out
 
Transfers out
 
Transfers out
 
Transfers out
 
Transfers out
 
Transfers out
 
 
 
 
 
of Level 1 into
 
of Level 1 into
 
of Level 2 into
 
of Level 2 into
 
of Level 3 into
 
of Level 3 into
 
 
 
 
 
Level 2
 
Level 3
 
Level 1
 
Level 3
 
Level 1
 
Level 2
 
 
 
 
 
(in millions)
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed maturities, available-for-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate
$
—
 
$
—
 
$
—
 
$
42.8
 
$
—
 
$
87.5
 
Commercial mortgage-backed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
securities
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
7.6
 
Other debt obligations
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
64.0
Total fixed maturities,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
available-for-sale
 
—
 
 
—
 
 
—
 
 
42.8
 
 
—
 
 
159.1
Other investments
 
—
 
 
—
 
 
22.2
 
 
—
 
 
—
 
 
35.0
Separate account assets
 
26.9
 
 
—
 
 
8.1
 
 
8.5
 
 
—
 
 
0.3


320


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015
 
 
 
 
 
For the year ended December 31, 2014
 
 
 
 
 
Transfers out
 
Transfers out
 
Transfers out
 
Transfers out
 
Transfers out
 
Transfers out
 
 
 
 
 
of Level 1 into
 
of Level 1 into
 
of Level 2 into
 
of Level 2 into
 
of Level 3 into
 
of Level 3 into
 
 
 
 
 
Level 2
 
Level 3
 
Level 1
 
Level 3
 
Level 1
 
Level 2
 
 
 
 
 
(in millions)
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed maturities, available-for-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
States and political subdivisions
$
—
 
$
—
 
$
—
 
$
—
 
$
—
 
$
1.7
 
Corporate
 
—
 
 
—
 
 
—
 
 
46.6
 
 
—
 
 
17.9
 
Commercial mortgage-backed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
securities
 
—
 
 
—
 
 
—
 
 
6.8
 
 
—
 
 
2.5
 
Collateralized debt obligations
 
—
 
 
—
 
 
—
 
 
3.9
 
 
—
 
 
24.0
 
Other debt obligations
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
29.7
Total fixed maturities,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
available-for-sale
 
—
 
 
—
 
 
—
 
 
57.3
 
 
—
 
 
75.8
Equity securities, available-for-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
sale
 
—
 
 
—
 
 
—
 
 
0.2
 
 
—
 
 
—
Separate account assets
 
33.0
 
 
—
 
 
71.3
 
 
4.4
 
 
—
 
 
13.9

 
 
 
 
 
For the year ended December 31, 2013
 
 
 
 
 
Transfers out
 
Transfers out
 
Transfers out
 
Transfers out
 
Transfers out
 
Transfers out
 
 
 
 
 
of Level 1 into
 
of Level 1 into
 
of Level 2 into
 
of Level 2 into
 
of Level 3 into
 
of Level 3 into
 
 
 
 
 
Level 2
 
Level 3
 
Level 1
 
Level 3
 
Level 1
 
Level 2
 
 
 
 
 
(in millions)
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed maturities, available-for-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate
$
—

 
$
—

 
$
—

 
$
105.3
 
$
—

 
$
83.9

 
Commercial mortgage-backed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
securities
 
—

 
 
—

 
 
—

 
 
2.4
 
 
—

 
 
—

 
Collateralized debt obligations
 
—

 
 
—

 
 
—

 
 
31.7
 
 
—

 
 
24.8

 
Other debt obligations
 
—

 
 
—

 
 
—

 
 
32.0
 
 
—

 
 
—

Total fixed maturities,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
available-for-sale
 
—

 
 
—

 
 
—

 
 
171.4
 
 
—

 
 
108.7

Separate account assets
 
253.9

 
 
0.1

 
 
15.5

 
 
12.6
 
 
—

 
 
6.5

Transfers between fair value hierarchy levels are recognized at the beginning of the reporting period.
Assets transferred from Level 2 into Level 1 during 2015, 2014 and 2013, primarily included assets valued using a NAV with a quoted price in an active market for identical assets as a result of additional analysis to clarify the source of the quoted price.
Assets transferred into Level 3 during 2015, 2014 and 2013, primarily included those assets for which we are now unable to obtain pricing from a recognized third party pricing vendor as well as assets that were previously priced using a matrix valuation approach that may no longer be relevant when applied to asset-specific situations.
Assets transferred out of Level 3 during 2015, 2014 and 2013, included those for which we are now able to obtain pricing from a recognized third party pricing vendor or from internal models using substantially all market observable information. In addition, during 2015, assets transferred out of Level 3 included assets valued using the measurement alternative for CCFEs for which the corresponding liabilities have the more observable fair value and are reflected in Level 2.

321


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

Quantitative Information about Level 3 Fair Value Measurements

The following table provides quantitative information about the significant unobservable inputs used for recurring fair value measurements categorized within Level 3, excluding assets and liabilities for which significant quantitative unobservable inputs are not developed internally, which primarily consists of those valued using broker quotes or the measurement alternative for CCFEs. Refer to “Assets and liabilities measured at fair value on a recurring basis” for a complete valuation hierarchy summary.
 
 
 
 
 
December 31, 2015
 
 
 
 
 
Assets /
 
 
 
 
 
 
 
 
 
 
 
 
 
(liabilities)
 
 
 
 
 
 
 
 
 
 
 
 
 
measured at
 
Valuation
 
Unobservable
 
Input/range
 
Weighted
 
 
 
 
 
fair value
 
technique(s)
 
input description
 
of inputs
 
average
 
 
 
 
 
(in millions)
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
Fixed maturities, available-for-sale:
 
 
 
 
 
 
 
 
 
Non-U.S. governments
$
8.9
 
Discounted cash
  flow
 
Discount rate (1)
 
2.2%
 
2.2%
 
 
 
 
 
 
 
 
 
 
Illiquidity premium
 
50 basis points ("bps")
 
50bps
 
Corporate
 
43.2
 
Discounted cash
  flow
 
Discount rate (1)
 
0%-7.5%
 
5.1%
 
 
 
 
 
 
 
 
 
 
Comparability
  adjustment
 
(4)bps-7bps
 
0bps
 
 
 
 
 
 
 
 
 
 
Illiquidity premium
 
0bps-60bps
 
33bps
 
Collateralized debt obligations
 
3.1
 
Discounted cash
  flow
 
Discount rate (1)
 
28.0%
 
28.0%
 
 
 
 
 
 
 
 
 
 
Probability of default
 
100.0%
 
100.0%
 
 
 
 
 
 
 
Potential loss
  severity
 
67.0%
 
67.0%
 
Other debt obligations
 
7.5
 
Discounted cash
  flow
 
Discount rate (1)
 
5.0%
 
5.0%
 
 
 
 
 
 
 
 
 
 
Illiquidity premium
 
750bps
 
750bps
Fixed maturities, trading
 
10.5
 
Discounted cash
  flow
 
Discount rate (1)
 
1.1%-2.7%
 
2.6%
 
 
 
 
 
 
 
Illiquidity premium
 
0bps-300bps
 
240bps
Other investments
 
35.1
 
Discounted cash
  flow - equity
  method real estate
  investments
 
Discount rate (1)
 
7.8%
 
7.8%
 
 
 
 
 
 
 
 
 
 
Terminal
  capitalization rate
 
6.8%
 
6.8%
 
 
 
 
 
 
 
Average market rent
  growth rate
 
3.2%
 
3.2%
 
 
 
 
 
 
 
 
Discounted cash
  flow - equity
  method real estate
  investments -
  debt
 
Loan to value
 
52.3%
 
52.3%
 
 
 
 
 
 
 
 
 
 
Credit spread rate
 
2.3%
 
2.3%

322


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

 
 
 
 
 
December 31, 2015
 
 
 
 
 
Assets /
 
 
 
 
 
 
 
 
 
 
 
 
 
(liabilities)
 
 
 
 
 
 
 
 
 
 
 
 
 
measured at
 
Valuation
 
Unobservable
 
Input/range
 
Weighted
 
 
 
 
 
fair value
 
technique(s)
 
input description
 
of inputs
 
average
 
 
 
 
 
(in millions)
 
 
 
 
 
 
 
 
Separate account assets
 
6,881.8
 
Discounted cash
  flow - mortgage
  loans
 
Discount rate (1)
 
1.4%-8.2%
 
3.9%
 
 
 
 
 
 
 
Illiquidity premium
 
0bps-60bps
 
7bps
 
 
 
 
 
 
 
Credit spread rate
 
81bps-750bps
 
241bps
 
 
 
 
 
Discounted cash
  flow - real estate
 
Discount rate (1)
 
5.3%-16.4%
 
7.2%
 
 
 
 
 
 
 
Terminal
  capitalization rate
 
4.3%-9.8%
 
6.2%
 
 
 
 
 
 
 
Average market rent
  growth rate
 
2.0%-4.3%
 
3.0%
 
 
 
 
 
 
 
 
Discounted cash
  flow - real estate
  debt
 
Loan to value
 
7.8%-63.1%
 
47.4%
 
 
 
 
 
 
 
 
 
 
Credit spread rate
 
1.4%-4.6%
 
2.2%
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
Investment contracts
 
(151.1)
 
Discounted cash
  flow
 
Long duration
  interest rate
 
2.5%-2.6% (3)
 
 
 
 
 
 
 
 
 
Long-term equity
  market volatility
 
18.4%-44.4%
 
 
 
 
 
 
 
 
 
Non-performance risk
 
0.4%-1.9%
 
 
 
 
 
 
 
 
 
Utilization rate
 
See note (4)
 
 
 
 
 
 
 
 
 
Lapse rate
 
0.5%-11.8%
 
 
 
 
 
 
 
 
 
Mortality rate
 
See note (5)
 
 

 
 
 
 
 
December 31, 2014
 
 
 
 
 
Assets /
 
 
 
 
 
 
 
 
 
 
 
 
 
(liabilities)
 
 
 
 
 
 
 
 
 
 
 
 
 
measured at
 
Valuation
 
Unobservable
 
Input/range
 
Weighted
 
 
 
 
 
fair value
 
technique(s)
 
input description
 
of inputs
 
average
 
 
 
 
 
(in millions)
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
Fixed maturities, available-for-sale:
 
 
 
 
 
 
 
 
 
Non-U.S. governments
$
10.3
 
Discounted cash
  flow
 
Discount rate (1)
 
2.2%
 
2.2%
 
 
 
 
 
 
 
 
 
 
Illiquidity premium
 
50 bps
 
50bps
 
Corporate
 
83.0
 
Discounted cash
  flow
 
Discount rate (1)
 
1.8%-6.7%
 
4.0%
 
 
 
 
 
 
 
 
 
 
Comparability
  adjustment
 
0bps-1bps
 
0bps
 
 
 
 
 
 
 
Illiquidity premium
 
0bps-25bps
 
13bps


323


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

 
 
 
 
 
December 31, 2014
 
 
 
 
 
Assets /
 
 
 
 
 
 
 
 
 
 
 
 
 
(liabilities)
 
 
 
 
 
 
 
 
 
 
 
 
 
measured at
 
Valuation
 
Unobservable
 
Input/range
 
Weighted
 
 
 
 
 
fair value
 
technique(s)
 
input description
 
of inputs
 
average
 
 
 
 
 
(in millions)
 
 
 
 
 
 
 
 
 
Collateralized debt obligations
 
12.7
 
Discounted cash
  flow
 
Discount rate (1)
 
2.7%-17.1%
 
6.1%
 
 
 
 
 
 
 
 
 
 
Probability of default
 
0%-100%
 
23.5%
 
 
 
 
 
 
 
Potential loss
  severity
 
0%-70%
 
16.4%
 
Other debt obligations
 
49.3
 
Discounted cash
  flow
 
Discount rate (1)
 
1.4%-5.0%
 
2.3%
 
 
 
 
 
 
 
 
 
 
Illiquidity premium
 
0bps-1,000bps
 
175bps
Fixed maturities, trading
 
15.2
 
Discounted cash
  flow
 
Discount rate (1)
 
1.8%-126.9%
 
3.5%
 
 
 
 
 
 
 
Illiquidity premium
 
200bps-1,400bps
 
460bps
 
 
 
100.4
 
See note (2)
 
 
 
 
 
 
Other investments
 
35.0
 
Discounted cash
  flow - commercial
  mortgage loans of
  consolidated VIEs
 
Discount rate (1)
 
4.2%
 
4.2%
 
 
 
 
 
 
 
 
 
 
Illiquidity premium
 
76bps
 
76bps
 
 
 
 
 
 
92.2
 
Discounted cash
  flow - equity
  method real estate
  investments
 
Discount rate (1)
 
7.3%-8.0%
 
7.6%
 
 
 
 
 
 
 
 
 
 
Terminal
  capitalization rate
 
5.5%-6.8%
 
6.1%
 
 
 
 
 
 
 
Average market rent
  growth rate
 
3.3%-3.7%
 
3.5%
 
 
 
 
 
 
 
 
Discounted cash
  flow - equity
  method real estate
  investments -
  debt
 
Loan to value
 
34.2%-58.9%
 
46.5%
 
 
 
 
 
 
 
 
 
 
Credit spread rate
 
1.8%-2.0%
 
1.9%


324


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

 
 
 
 
 
December 31, 2014
 
 
 
 
 
Assets /
 
 
 
 
 
 
 
 
 
 
 
 
 
(liabilities)
 
 
 
 
 
 
 
 
 
 
 
 
 
measured at
 
Valuation
 
Unobservable
 
Input/range
 
Weighted
 
 
 
 
 
fair value
 
technique(s)
 
input description
 
of inputs
 
average
 
 
 
 
 
(in millions)
 
 
 
 
 
 
 
 
Separate account assets
 
5,857.4
 
Discounted cash
  flow - mortgage
  loans
 
Discount rate (1)
 
1.1%-6.9%
 
3.2%
 
 
 
 
 
 
 
Illiquidity premium
 
0bps-60bps
 
7bps
 
 
 
 
 
 
 
Credit spread rate
 
70bps-632bps
 
221bps
 
 
 
 
 
Discounted cash
  flow - real estate
 
Discount rate (1)
 
6.0%-24.6%
 
7.4%
 
 
 
 
 
 
 
Terminal
  capitalization rate
 
4.5%-9.5%
 
6.4%
 
 
 
 
 
 
 
Average market rent
  growth rate
 
1.3%-4.4%
 
3.0%
 
 
 
 
 
 
 
 
Discounted cash
  flow - real estate
  debt
 
Loan to value
 
6.8%-64.1%
 
46.5%
 
 
 
 
 
 
 
 
 
 
Credit spread rate
 
2.1%-4.8%
 
3.4%
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
Investment contracts
 
(155.9)
 
Discounted cash
  flow
 
Long duration
  interest rate
 
2.6%-2.7% (3)
 
 
 
 
 
 
 
 
 
Long-term equity
  market volatility
 
18.4%-39.5%
 
 
 
 
 
 
 
 
 
Non-performance risk
 
0.1%-1.4%
 
 
 
 
 
 
 
 
 
Utilization rate
 
See note (4)
 
 
 
 
 
 
 
 
 
Lapse rate
 
0.5%-11.8%
 
 
 
 
 
 
 
 
 
Mortality rate
 
See note (5)
 
 
Derivative liabilities
 
(19.3)
 
See note (2)
 
 
 
 
 
 
Other liabilities
 
(66.3)
 
See note (2)
 
 
 
 
 
 

(1)
Represents market comparable interest rate or an index adjusted rate used as the base rate in the discounted cash flow analysis prior to any credit spread, illiquidity or other adjustments, where applicable.
(2)
Prior to 2015, the assets and liabilities fair values relate to a consolidated collateralized private investment vehicle that is a VIE. Fixed maturities, trading represents the underlying collateral of the investment structure and consists of high-grade fixed maturity investments, which are over-collateralized based on outstanding notes priced at par. The derivative liability represents credit default swaps that are valued using a correlation model to the credit default swap (“CDS”) Index (“CDX”) and inputs to the valuation are based on observable market data such as the end of period swap curve, CDS constituents of the index and spread levels of the index, as well as CDX tranche spreads. The value of the obligations, which are due at maturity or termination of the trust, reflect the third parties’ interest in the investment structure.
(3)
Represents the range of rate curves used in the valuation analysis that we have determined market participants would use when pricing the instrument. Derived from interpolation between various observable swap rates.
(4)
This input factor is the number of contractholders taking withdrawals as well as the amount and timing of the withdrawals and a range does not provide a meaningful presentation.
(5)
This input is based on an appropriate industry mortality table and a range does not provide a meaningful presentation.


325


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

Market comparable discount rates are used as the base rate in the discounted cash flows used to determine the fair value of certain assets. Increases or decreases in the credit spreads on the comparable assets could cause the fair value of the assets to significantly decrease or increase, respectively. Additionally, we may adjust the base discount rate or the modeled price by applying an illiquidity premium given the highly structured nature of certain assets. Increases or decreases in this illiquidity premium could cause significant decreases or increases, respectively, in the fair value of the asset.
Embedded derivatives can be either assets or liabilities within the investment contracts line item, depending on certain inputs at the reporting date. Increases to an asset or decreases to a liability are described as increases to fair value. Increases or decreases in market volatilities could cause significant decreases or increases, respectively, in the fair value of embedded derivatives in investment contracts. Long duration interest rates are used as the mean return when projecting the growth in the value of associated account value and impact the discount rate used in the discounted future cash flows valuation. The amount of claims will increase if account value is not sufficient to cover guaranteed withdrawals. Increases or decreases in risk free rates could cause the fair value of the embedded derivative to significantly increase or decrease, respectively. Increases or decreases in our own credit risks, which impact the rates used to discount future cash flows, could significantly increase or decrease, respectively, the fair value of the embedded derivative. All of these changes in fair value would impact net income.
Decreases or increases in the mortality rate assumption could cause the fair value of the embedded derivative to decrease or increase, respectively. Decreases or increases in the overall lapse rate assumption could cause the fair value of the embedded derivative to decrease or increase, respectively. The lapse rate assumption varies dynamically based on the relationship of the guarantee and associated account value. A stronger or weaker dynamic lapse rate assumption could cause the fair value of the embedded derivative to decrease or increase, respectively. The utilization rate assumption includes how many contractholders will take withdrawals, when they will take them and how much of their benefit they will take. Increases or decreases in the assumption of the number of contractholders taking withdrawals could cause the fair value of the embedded derivative to decrease or increase, respectively. Assuming contractholders take withdrawals earlier or later could cause the fair value of the embedded derivative to decrease or increase, respectively. Assuming contractholders take more or less of their benefit could cause the fair value of the embedded derivative to decrease or increase, respectively.
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Certain assets are measured at fair value on a nonrecurring basis. During 2015, certain mortgage loans had been marked to fair value of $9.2 million. The net impact of impairments and improvements in estimated fair value of previously impaired loans resulted in a net loss of $3.2 million that was recorded in net realized capital gains (losses) as part of the mortgage loan valuation allowance. This includes the impact of certain loans no longer on our books. These collateral-dependent mortgage loans are a Level 3 fair value measurement, as fair value is based on the fair value of the underlying real estate collateral, which is estimated using appraised values that involve significant unobservable inputs.
During 2015, certain real estate had been written down to fair value of $30.9 million. This write down resulted in a loss of $2.9 million that was recorded in net realized capital gains (losses). This is a Level 3 fair value measurement, as the fair value of real estate is estimated based on a discounted cash flow valuation from an internal model. Significant inputs used in the discounted cash flow calculation include a discount rate, terminal capitalization rate and average market rent growth. The ranges of inputs used in the fair value measurements for the real estate marked to fair value during 2015 were:
Discount rate = 8.6% - 10.5%
Terminal capitalization rate = 7.3% - 8.5%
Average market rent growth = 2.7% - 3.0%



326


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

During 2014, certain mortgage loans had been marked to fair value of $68.1 million. The net impact of impairments and improvements in estimated fair value of previously impaired loans resulted in a net loss of $10.0 million that was recorded in net realized capital gains (losses) as part of the mortgage loan valuation allowance. This includes the impact of certain loans no longer on our books. These collateral-dependent mortgage loans are a Level 3 fair value measurement, as fair value is based on the fair value of the underlying real estate collateral, which is estimated using appraised values that involve significant unobservable inputs. The fair value of the underlying collateral is determined based on a discounted cash flow valuation either from an external broker opinion of value or an internal model. Significant inputs used in the discounted cash flow calculation include: a discount rate, terminal capitalization rate and average market rent growth. The ranges of inputs used in the fair value measurements for the mortgage loans marked to fair value during 2014 were:

Discount rate = 8.8% - 11.0%
Terminal capitalization rate = 7.3% - 9.0%
Average market rent growth = 2.0% - 10.9%

During 2014, certain real estate had been written down to fair value of $22.3 million. This write down resulted in a loss of $6.2 million that was recorded in net realized capital gains (losses). This is a Level 3 fair value measurement, as the fair value of real estate is estimated based on a discounted cash flow valuation from an internal model. Significant inputs used in the discounted cash flow calculation include a discount rate, terminal capitalization rate and average market rent growth. The ranges of inputs used in the fair value measurements for the real estate marked to fair value during 2014 were:

Discount rate = 9.6% - 11.8%
Terminal capitalization rate = 8.3% - 8.5%
Average market rent growth = 3.0% - 3.6%

During 2013, certain mortgage loans had been marked to fair value of $151.5 million. The net impact of impairments and improvements in estimated fair value of previously impaired loans resulted in a net loss of $28.5 million that was recorded in net realized capital gains (losses) as part of the mortgage loan valuation allowance. This includes the impact of certain loans no longer on our books. These collateral-dependent mortgage loans are a Level 3 fair value measurement, as fair value is based on the fair value of the underlying real estate collateral, which is estimated using appraised values that involve significant unobservable inputs. The fair value of the underlying collateral is determined based on a discounted cash flow valuation either from an external broker opinion of value or an internal model. Significant inputs used in the discounted cash flow calculation include: a discount rate, terminal capitalization rate and average market rent growth. The ranges of inputs used in the fair value measurements for the mortgage loans marked to fair value during 2013 were:

Discount rate = 8.0% - 20.0%
Terminal capitalization rate = 7.3% - 10.5%
Average market rent growth = 1.0% - 10.9%

During 2013, certain mortgage servicing rights had been marked to fair value of $7.3 million. The net impact of impairments and subsequent improvements in estimated fair value of previously impaired mortgage servicing rights resulted in a net gain of $1.3 million that was recorded in operating expenses. These mortgage servicing rights are a Level 3 fair value measurement, as fair value is determined by calculating the present value of the future servicing cash flows from the underlying mortgage loans. The discount rate used in calculating the present value of the future servicing cash flows was 4.3% for the year ended December 31, 2013.



327


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

Fair Value Option

We elected fair value accounting for certain assets and liabilities of consolidated VIEs for which it was not practicable for us to determine the carrying value. The fair value option was elected for commercial mortgage loans reported with other investments and obligations reported with other liabilities in the consolidated statements of financial position. The changes in fair value of these items are reported in net realized capital gains (losses) on the consolidated statements of operations.
The fair value and aggregate contractual principal amounts of commercial mortgage loans for which the fair value option has been elected were $18.3 million and $17.8 million as of December 31, 2015, and $35.0 million and $32.4 million as of December 31, 2014, respectively. The change in fair value of the loans resulted in a $(2.0) million, $(1.5) million and $0.2 million pre-tax gain (loss) for the years ended December 31, 2015, 2014 and 2013, respectively, none of which related to instrument-specific credit risk. None of these loans were more than 90 days past due or in nonaccrual status. Interest income on these commercial mortgage loans is included in net investment income on the consolidated statements of operations and is recorded based on the effective interest rates as determined at the closing of the loan. Interest income recorded on these commercial mortgage loans was $3.6 million, $6.2 million and $5.7 million for the years ended December 31, 2015, 2014 and 2013, respectively.

The fair value and aggregate unpaid principal amounts of obligations for which the fair value option has been elected were $68.1 million and $118.2 million as of December 31, 2015, and $71.0 million and $132.8 million as of December 31, 2014, respectively. For the years ended December 31, 2015, 2014 and 2013, the change in fair value of the obligations resulted in a pre-tax loss of $2.1 million, $0.7 million and $32.8 million, which includes a pre-tax loss of $1.9 million, $2.4 million and $34.3 million related to instrument-specific credit risk that is estimated based on credit spreads and quality ratings, respectively. Interest expense recorded on these obligations is included in operating expenses on the consolidated statements of operations and was $1.1 million, $3.0 million and $3.6 million for the years ended December 31, 2015, 2014 and 2013, respectively.

We invest in real estate ventures for the purpose of earning investment returns and for capital appreciation. We elected the fair value option for certain ventures that are subject to the equity method of accounting because the nature of the investments is to add value to the properties and generate income from the operations of the properties. Other equity method real estate investments are not fair valued because the investments mainly generate income from the operations of the underlying properties. These investments are reported with other investments in the consolidated statements of financial position. The changes in fair value are reported in net investment income on the consolidated statements of operations. The fair value of the equity method investments for which the fair value option has been elected was $35.1 million and $92.2 million as of December 31, 2015 and 2014, respectively. The change in fair value of the investments resulted in a $7.2 million, $17.3 million and $11.0 million pre-tax gain for the years ended December 31, 2015, 2014 and 2013, respectively.
Financial Instruments Not Reported at Fair Value
The carrying value and estimated fair value of financial instruments not recorded at fair value on a recurring basis but required to be disclosed at fair value were as follows:
 
 
December 31, 2015
 
 
 
 
 
 
Fair value hierarchy level
 
 
Carrying amount
 
Fair value
 
Level 1
 
Level 2
 
Level 3
 
 
(in millions)
Assets (liabilities)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage loans
 
$
11,791.0
 
$
12,105.1
 
$
—
 
$
—
 
$
12,105.1
Policy loans
 
 
786.3
 
 
990.3
 
 
—
 
 
—
 
 
990.3
Other investments
 
 
148.5
 
 
160.0
 
 
—
 
 
81.1
 
 
78.9
Cash and cash equivalents
 
 
956.6
 
 
956.6
 
 
956.6
 
 
—
 
 
—
Investment contracts
 
 
(28,079.1)
 
 
(27,744.2)
 
 
—
 
 
(4,925.0)
 
 
(22,819.2)
Short-term debt
 
 
(108.8)
 
 
(108.8)
 
 
—
 
 
(108.8)
 
 
—
Long-term debt
 
 
(42.8)
 
 
(42.8)
 
 
—
 
 
—
 
 
(42.8)
Separate account liabilities
 
 
(83,316.9)
 
 
(82,582.6)
 
 
—
 
 
—
 
 
(82,582.6)
Bank deposits
 
 
(2,070.8)
 
 
(2,074.4)
 
 
(1,457.4)
 
 
(617.0)
 
 
—
Cash collateral payable
 
 
(210.4)
 
 
(210.4)
 
 
(210.4)
 
 
—
 
 
—

328


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015
 
 
December 31, 2014
 
 
 
 
 
 
Fair value hierarchy level
 
 
Carrying amount
 
Fair value
 
Level 1
 
Level 2
 
Level 3
 
 
(in millions)
Assets (liabilities)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage loans
 
$
11,164.4
 
$
11,703.0
 
$
—
 
$
—
 
$
11,703.0
Policy loans
 
 
799.0
 
 
1,051.4
 
 
—
 
 
—
 
 
1,051.4
Other investments
 
 
108.5
 
 
108.9
 
 
—
 
 
81.0
 
 
27.9
Cash and cash equivalents
 
 
989.5
 
 
989.5
 
 
989.5
 
 
—
 
 
—
Investment contracts
 
 
(28,383.7)
 
 
(28,430.7)
 
 
—
 
 
(5,455.4)
 
 
(22,975.3)
Short-term debt
 
 
(154.5)
 
 
(154.5)
 
 
—
 
 
(154.5)
 
 
—
Long-term debt
 
 
(82.3)
 
 
(82.3)
 
 
—
 
 
—
 
 
(82.3)
Separate account liabilities
 
 
(82,986.8)
 
 
(82,265.5)
 
 
—
 
 
—
 
 
(82,265.5)
Bank deposits
 
 
(1,979.7)
 
 
(1,985.5)
 
 
(1,343.8)
 
 
(641.7)
 
 
—
Cash collateral payable
 
 
(138.7)
 
 
(138.7)
 
 
(138.7)
 
 
—
 
 
—
Mortgage Loans
Fair values of commercial and residential mortgage loans are primarily determined by discounting the expected cash flows at current treasury rates plus an applicable risk spread, which reflects credit quality and maturity of the loans. The risk spread is based on market clearing levels for loans with comparable credit quality, maturities and risk. The fair value of mortgage loans may also be based on the fair value of the underlying real estate collateral less cost to sell, which is estimated using appraised values. These are reflected in Level 3.
Policy Loans
Fair values of policy loans are estimated by discounting expected cash flows using a risk-free rate based on the Treasury curve. The expected cash flows reflect an estimate of timing of the repayment of the loans. These are reflected in Level 3.
Other Investments
The fair value of commercial loans and certain consumer loans included in other investments is calculated by discounting expected cash flows through the estimated maturity date using market interest rates that reflect the credit and interest rate risk inherent in the loans. The estimate of term to maturity is based on historical experience, adjusted as required, for current economic and lending conditions. The effect of nonperforming loans is considered in assessing the credit risk inherent in the fair value estimate. These are reflected in Level 3. The fair value of certain tax credit investments are estimated by discounting expected future tax benefits using estimated investment return rates. These are reflected in Level 3. The carrying value of the remaining investments reported in this line item approximate their fair value. These are reflected in Level 2.
Cash and Cash Equivalents
Certain cash equivalents not reported at fair value include short-term investments with maturities of less than three months for which public quotations are not available to use in determining fair value. Because of the highly liquid nature of these assets, carrying amounts are used to approximate fair value, which are reflected in Level 2. The carrying amounts of the remaining cash and cash equivalents that are not reported at fair value on a recurring basis approximate their fair value, which are reflected in Level 1 given the nature of cash.
Investment Contracts
The fair values of our reserves and liabilities for investment contracts are determined via a third party pricing vendor or using discounted cash flow analyses when we are unable to find a price from third party pricing vendors. Third party pricing on various outstanding medium-term notes and funding agreements is based on observable inputs such as benchmark yields and spreads based on reported trades for our medium-term notes and funding agreement issuances. These are reflected in Level 2. The discounted cash flow analyses for the remaining contracts is based on current interest rates, including non-performance risk, being offered for similar contracts with maturities consistent with those remaining for the investment contracts being valued. These are reflected in Level 3. Investment contracts include insurance, annuity and other policy contracts that do not involve significant mortality or morbidity risk and are only a portion of the policyholder liabilities appearing in the consolidated statements of financial position. Insurance contracts include insurance, annuity and other policy contracts that do involve significant mortality or morbidity risk. The fair values for our insurance contracts, other than investment contracts, are not required to be disclosed.

329


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015
Short-Term Debt
The carrying amount of short-term debt approximates its fair value because of the relatively short time between origination of the debt instrument and its maturity, which is reflected in Level 2.
Long-Term Debt
Long-term debt primarily includes senior note issuances for which the fair values are determined using inputs that are observable in the market or that can be derived from or corroborated with observable market data. These are reflected in Level 2. Additionally, our long-term debt includes non-recourse mortgages and notes payable that are primarily financings for real estate developments for which the fair values are estimated using discounted cash flow analysis based on our incremental borrowing rate for similar borrowing arrangements. These are reflected in Level 3.
Separate Account Liabilities

Fair values of separate account liabilities, excluding insurance-related elements, are estimated based on market assumptions around what a potential acquirer would pay for the associated block of business, including both the separate account assets and liabilities. As the applicable separate account assets are already reflected at fair value, any adjustment to the fair value of the block is an assumed adjustment to the separate account liabilities. To compute fair value, the separate account liabilities are originally set to equal separate account assets because these are pass-through contracts. The separate account liabilities are reduced by the amount of future fees expected to be collected that are intended to offset upfront acquisition costs already incurred that a potential acquirer would not have to pay. The estimated future fees are adjusted by an adverse deviation discount and the amount is then discounted at a risk-free rate as measured by the yield on Treasury securities at maturities aligned with the estimated timing of fee collection. These are reflected in Level 3.

Bank Deposits

The fair value of deposits of our Principal Bank subsidiary with no stated maturity is equal to the amount payable on demand (i.e., their carrying amounts). These are reflected in Level 1. The fair value of certificates of deposit is based on the discounted value of contractual cash flows. The discount is estimated using the rates currently offered for deposits of similar remaining maturities. These are reflected in Level 2.

Cash Collateral Payable

The carrying amount of the payable associated with our obligation to return the cash collateral received under derivative credit support annex (collateral) agreements approximates its fair value, which is reflected in Level 1.

16. Statutory Insurance Financial Information
We, the largest indirect subsidiary of PFG, prepare statutory financial statements in accordance with the accounting practices prescribed or permitted by the Insurance Division of the Department of Commerce of the State of Iowa (the “State of Iowa”). The State of Iowa recognizes only statutory accounting practices prescribed or permitted by the State of Iowa for determining and reporting the financial condition and results of operations of an insurance company to determine its solvency under the Iowa Insurance Law. The National Association of Insurance Commissioners' (“NAIC”) Accounting Practices and Procedures Manual has been adopted as a component of prescribed practices by the State of Iowa. The Commissioner has the right to permit other specific practices that deviate from prescribed practices. As of December 31, 2015, our use of prescribed statutory accounting practices has resulted in lower statutory net income of $2.1 million relative to the accounting practices and procedures of the NAIC due to our accounting for derivatives that hedge some of our equity indexed products. In addition, as of December 31, 2015, our permitted statutory accounting practice relating to variable annuities with a guaranteed living benefit rider resulted in lower statutory surplus of $158.1 million relative to carrying certain interest rate swaps at book value rather than fair value, as if they received hedge accounting treatment for statutory. Statutory accounting practices differ from U.S. GAAP primarily due to charging policy acquisition costs to expense as incurred, establishing reserves using different actuarial assumptions, valuing investments on a different basis and not admitting certain assets, including certain net deferred income tax assets.

330


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

We cede certain term and universal life insurance statutory reserves to affiliated reinsurance subsidiaries on a funds withheld coinsurance basis. The reserves are secured by cash, invested assets and financing provided by highly rated third parties. As of December 31, 2015, affiliated reinsurance entities assumed statutory reserves of $3,934.2 million from us. In the states of Vermont and Delaware, the affiliated reinsurers had permitted and prescribed practices allowing for the admissibility of certain assets backing these reserves. As of December 31, 2015, assets admitted under these practices totaled $1,447.0 million.   
Life and health insurance companies are subject to certain risk-based capital (“RBC”) requirements as specified by the NAIC. Under those requirements, the amount of capital and surplus maintained by a life and health insurance company is to be determined based on the various risk factors related to it. At December 31, 2015, we meet the minimum RBC requirements.
Our statutory net income and statutory capital and surplus were as follows:
 
As of or for the year ended December 31,
 
2015
 
2014
 
2013
 
(in millions)
Statutory net income
$
948.6
 
$
535.5
 
$
607.9
Statutory capital and surplus
 
4,496.7
 
 
4,202.1
 
 
4,142.2

17. Segment Information

We provide financial products and services through the following segments: Retirement and Income Solutions, Principal Global Investors and U.S. Insurance Solutions. In addition, we have a Corporate segment. The segments are managed and reported separately because they provide different products and services, have different strategies or have different markets and distribution channels.

In the fourth quarter of 2015 we implemented changes to our organizational structure to better align businesses, distribution teams and product offerings for future growth. The Retirement and Investor Services segment has been renamed to Retirement and Income Solutions.

The Retirement and Income Solutions segment provides retirement and related financial products and services primarily to businesses, their employees and other individuals.

The Principal Global Investors segment provides asset management services to our asset accumulation business, our insurance operations, the Corporate segment and third party clients.

The U.S. Insurance Solutions segment provides specialty benefits insurance, which consists of group dental and vision insurance, individual and group disability insurance, group life insurance and non-medical fee-for-service claims administration, and individual life insurance throughout the United States.

The Corporate segment manages the assets representing capital that has not been allocated to any other segment. Financial results of the Corporate segment primarily reflect our financing activities (including interest expense), income on capital not allocated to other segments, inter‑segment eliminations, income tax risks and certain income, expenses and other adjustments not allocated to the segments based on the nature of such items. Results of our exited group medical insurance business are reported in this segment.

Concurrent with the changes in our organizational structure, we changed our measure of segment profit or loss to pre-tax operating earnings. Management uses segment pre-tax operating earnings in evaluating performance and is consistent with financial results provided to securities analysts. We determine segment pre-tax operating earnings by adjusting U.S. GAAP income before income taxes for pre-tax net realized capital gains (losses), as adjusted, pre-tax other adjustments that management believes are not indicative of overall operating trends and certain adjustments related to equity method investments. Pre-tax net realized capital gains (losses), as adjusted, are net of related changes in the amortization pattern of DAC and related actuarial balances, recognition of deferred front-end fee revenues for sales charges on retirement and life insurance products and services, amortization of hedge accounting book value adjustments for certain discontinued hedges, net realized capital gains and losses distributed, noncontrolling interest capital gains and losses and certain market value adjustments to fee revenues. Pre-tax net realized capital gains (losses), as adjusted, exclude periodic settlements and accruals on derivative instruments not designated as hedging instruments and exclude

331


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

certain market value adjustments of embedded derivatives and realized capital gains (losses) associated with our exited group medical insurance business. Segment operating revenues exclude net realized capital gains (losses) (except periodic settlements and accruals on derivatives not designated as hedging instruments), including their impact on recognition of front-end fee revenues, certain market value adjustments to fee revenues and amortization of hedge accounting book value adjustments for certain discontinued hedges and revenue from our exited group medical insurance business. While these items may be significant components in understanding and assessing the consolidated financial performance, management believes the presentation of segment pre-tax operating earnings enhances the understanding of our results of operations by highlighting pre-tax earnings attributable to the normal, ongoing operations of the business. The change to our new measure of segment profit or loss has been applied retrospectively.
The accounting policies of the segments are consistent with the accounting policies for the consolidated financial statements, with the exception of income tax allocation. The Corporate segment functions to absorb the risk inherent in interpreting and applying tax law. For purposes of determining operating earnings, the segments are allocated tax adjustments consistent with the positions we took on tax returns. The Corporate segment results reflect any differences between the tax returns and the estimated resolution of any disputes.
The following tables summarize select financial information by segment, including operating revenues for our products and services, and reconcile segment totals to those reported in the consolidated financial statements:
 
 
December 31, 2015
 
December 31, 2014
 
 
(in millions)
Assets:
 
 
 
 
 
Retirement and Income Solutions
$
139,639.9
 
$
137,821.9
Principal Global Investors
 
736.9
 
 
928.9
U.S. Insurance Solutions
 
21,939.3
 
 
21,382.2
Corporate
 
3,977.5
 
 
3,781.8
 
Total consolidated assets
$
166,293.6
 
$
163,914.8

332


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015
 
 
 
 
For the year ended December 31,
 
 
 
 
2015
 
2014
 
2013
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(in millions)
Operating revenues by segment:
 
 
 
 
 
 
 
 
Retirement and Income Solutions:
 
 
 
 
 
 
 
 
 
Retirement and Income Solutions - Fee
$
1,774.0
 
$
1,778.9
 
$
1,645.8
 
Retirement and Income Solutions - Spread
 
4,392.9
 
 
3,020.8
 
 
2,566.7
 
 
Total Retirement and Income Solutions
 
6,166.9
 
 
4,799.7
 
 
4,212.5
Principal Global Investors (1)
 
692.5
 
 
668.2
 
 
664.1
U.S. Insurance Solutions
 
 
 
 
 
 
 
 
 
Specialty benefits insurance
 
1,866.0
 
 
1,724.7
 
 
1,616.8
 
Individual life insurance
 
1,569.3
 
 
1,532.8
 
 
1,480.9
 
Eliminations
 
(0.1)
 
 
—
 
 
—
 
 
Total U.S. Insurance Solutions
 
3,435.2
 
 
3,257.5
 
 
3,097.7
Corporate
 
(111.0)
 
 
(99.9)
 
 
(109.9)
 
Total segment operating revenues
 
10,183.6
 
 
8,625.5
 
 
7,864.4
Net realized capital losses, net of related revenue adjustments
 
(124.4)
 
 
(9.6)
 
 
(299.2)
Other income on an indemnified uncertain tax position
 
60.2
 
 
—
 
 
—
Exited group medical insurance business
 
1.3
 
 
0.2
 
 
2.0
 
Total revenues per consolidated statements of operations
$
10,120.7
 
$
8,616.1
 
$
7,567.2
 
 
 
 
 
 
 
 
 
 
 
 
Pre-tax operating earnings (loss) by segment:
 
 
 
 
 
 
 
 
Retirement and Income Solutions
$
740.1
 
$
851.2
 
$
752.5
Principal Global Investors
 
178.7
 
 
159.7
 
 
135.3
U.S. Insurance Solutions
 
428.6
 
 
343.3
 
 
295.8
Corporate
 
(23.5)
 
 
(30.2)
 
 
(54.9)
 
Total segment pre-tax operating earnings
 
1,323.9
 
 
1,324.0
 
 
1,128.7
Pre-tax net realized capital losses, as adjusted (2)
 
(123.1)
 
 
(65.3)
 
 
(257.3)
Pre-tax other adjustments (3)
 
11.7
 
 
(63.1)
 
 
(1.7)
Certain adjustments related to equity method investments
 
10.8
 
 
29.9
 
 
17.7
 
Income before income taxes per consolidated statements
 
 
 
 
 
 
 
 
 
 
of operations
$
1,223.3
 
$
1,225.5
 
$
887.4

(1)
Reflects inter-segment revenues of $294.5 million, $276.5 million and $250.1 million for the years ended December 31, 2015, 2014 and 2013, respectively.
(2) Pre-tax net realized capital gains (losses), as adjusted, is derived as follows:


333


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015
 
 
 
 
 
For the year ended December 31,
 
 
 
 
 
2015
 
2014
 
2013
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(in millions)
Net realized capital gains (losses):
 
 
 
 
 
 
 
 
Net realized capital gains (losses)
$
(26.0)
 
$
62.7
 
$
(211.3)
Certain derivative and hedging-related adjustments
 
(97.2)
 
 
(73.0)
 
 
(87.0)
Certain market value adjustments to fee revenues
 
(1.1)
 
 
—
 
 
—
Recognition of front-end fee (revenue) expense
 
(0.1)
 
 
0.7
 
 
(0.9)
 
Net realized capital losses, net of related revenue adjustments
 
(124.4)
 
 
(9.6)
 
 
(299.2)
Amortization of deferred acquisition costs and other actuarial balances
 
(13.6)
 
 
(49.6)
 
 
47.8
Capital (gains) losses distributed
 
15.1
 
 
(10.9)
 
 
(24.3)
Certain market value adjustments of embedded derivatives
 
(0.2)
 
 
4.8
 
 
18.4
 
Pre-tax net realized capital losses, as adjusted (a)
$
(123.1)
 
$
(65.3)
 
$
(257.3)

(a)
As adjusted before noncontrolling interest capital gains (losses) and net realized capital gains (losses) associated with exited group medical insurance business.

(1)
For the year ended December 31, 2015, pre-tax other adjustments included the positive effect of the impact of a court ruling on some uncertain tax positions ($15.1 million) and the negative effect of losses associated with our exited group medical insurance business that did not qualify for discontinued operations accounting treatment under U.S. GAAP ($3.4 million).

For the year ended December 31, 2014, pre-tax other adjustments included the negative effect of the impact of (a) a court ruling on some uncertain tax positions ($62.2 million) and (b) the effect of losses associated with our exited group medical insurance business that did not qualify for discontinued operations accounting treatment under U.S. GAAP ($0.9 million).

For the year ended December 31, 2013, pre-tax other adjustments included the negative effect of losses associated with our exited group medical insurance business that did not qualify for discontinued operations accounting treatment under U.S. GAAP.

The following is a summary of income tax expense (benefit) allocated to our segments for purposes of determining operating earnings. Segment income taxes are reconciled to income taxes reported on our consolidated statements of operations.
 
 
 
 
For the year ended December 31,
 
 
 
 
2015
 
2014
 
2013
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(in millions)
Income tax expense (benefit) by segment:
 
 
 
 
 
 
 
 
Retirement and Income Solutions
$
76.1
 
$
128.5
 
$
139.2
Principal Global Investors
 
64.0
 
 
56.3
 
 
48.3
U.S. Insurance Solutions
 
142.9
 
 
112.5
 
 
95.9
Corporate
 
(8.8)
 
 
(17.5)
 
 
(19.6)
Total segment income taxes from operating earnings
 
274.2
 
 
279.8
 
 
263.8
 
Tax benefit related to net realized capital losses, as adjusted
 
(36.5)
 
 
(21.9)
 
 
(90.0)
 
Tax expense (benefit) related to other after-tax adjustments
 
44.2
 
 
(14.9)
 
 
(0.6)
Total income taxes per consolidated statements of operations
$
281.9
 
$
243.0
 
$
173.2


334


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

The following is a summary of depreciation and amortization expense allocated to our segments for purposes of determining pre-tax operating earnings. Segment depreciation and amortization is reconciled to depreciation and amortization included in operating expenses in our consolidated statements of operations.
 
 
 
 
For the year ended December 31,
 
 
 
 
2015
 
2014
 
2013
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(in millions)
Depreciation and amortization expense by segment:
 
 
 
 
 
 
 
 
Retirement and Income Solutions
$
28.3
 
$
27.5
 
$
23.1
Principal Global Investors
 
11.1
 
 
12.9
 
 
10.2
U.S. Insurance Solutions
 
17.3
 
 
16.7
 
 
13.7
Corporate
 
4.3
 
 
3.3
 
 
3.9
Total segment depreciation and amortization expense included in
 
 
 
 
 
 
 
 
 
pre-tax operating earnings
 
61.0
 
 
60.4
 
 
50.9
 
Depreciation and amortization expense related to pre-tax
 
 
 
 
 
 
 
 
 
 
other adjustments
 
—
 
 
—
 
 
1.4
Total depreciation and amortization expense included in our
 
 
 
 
 
 
 
 
 
consolidated statements of operations
$
61.0
 
$
60.4
 
$
52.3

18. Stock‑Based Compensation Plans

As of December 31, 2015, our ultimate parent, PFG, sponsored the 2014 Stock Incentive Plan, the Employee Stock Purchase Plan, the Long-Term Performance Plan, the Amended and Restated 2010 Stock Incentive Plan and the Stock Incentive Plan ("Stock Based Compensation Plans"). As of May 20, 2014, no new grants will be made under the Amended and Restated 2010 Stock Incentive Plan. No grants have been made under the Stock Incentive Plan or the Long-Term Performance Plan since at least 2005. Under the terms of the 2014 Stock Incentive Plan, grants may be nonqualified stock options, incentive stock options qualifying under Section 422 of the Internal Revenue Code, restricted stock, restricted stock units, stock appreciation rights, performance shares, performance units or other stock-based awards. To date, PFG has not granted any incentive stock options, restricted stock or performance units. The following Stock-Based Compensation Plans information represents all share based compensation data related to us and our subsidiaries’ employees.

For awards with graded vesting, we use an accelerated expense attribution method. The compensation cost that was charged against income for stock-based awards granted under the Stock-Based Compensation Plans was as follows:
 
 
For the year ended December 31,
 
 
2015
 
2014
 
2013
 
 
(in millions)
Compensation cost
$
43.3
 
$
41.2
 
$
42.9
Related income tax benefit
 
14.6
 
 
14.0
 
 
12.8
Capitalized as part of an asset
 
2.2
 
 
2.5
 
 
2.6

Nonqualified Stock Options
Nonqualified stock options were granted to certain employees under the 2014 Stock Incentive Plan, the Amended and Restated 2010 Stock Incentive Plan and the Stock Incentive Plan. Options outstanding were granted at an exercise price equal to the fair market value of PFG common stock on the date of grant, and expire ten years after the grant date. These options have graded vesting over a three-year period, except in the case of specific types of terminations.

335


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

The fair value of stock options is estimated using the Black‑Scholes option pricing model. The following is a summary of the assumptions used in this model for the stock options granted during the period:
 
 
 
For the year ended December 31,
Options
 
2015
 
2014
 
2013
Expected volatility
 
 
52.2
%
 
 
53.2
%
 
 
53.3
%
Expected term (in years)
 
 
6.5
 
 
 
6.5
 
 
 
6.5
 
Risk-free interest rate
 
 
1.8
%
 
 
2.0
%
 
 
1.1
%
Expected dividend yield
 
 
2.81
%
 
 
2.50
%
 
 
3.00
%
Weighted average estimated fair value
 
$
20.43
 
 
$
18.89
 
 
$
11.95
 

We previously determined expected volatility based on, among other factors, historical volatility using daily price observations. Beginning with nonqualified stock options granted in 2013, we determine expected volatility based on a combination of historical volatility using daily price observations and implied volatility from traded options on PFG common stock. We believe that incorporating both historical and implied volatility into the expected volatility assumption calculation better reflects market expectations. The expected term represents the period of time that options granted are expected to be outstanding. We determine expected term using historical exercise and employee termination data. The risk-free rate for periods within the expected term of the option is based on the U.S. Treasury risk-free interest rate in effect at the time of grant. The dividend yield is based on historical dividend distributions compared to the closing price of PFG common shares on the grant date.
As of December 31, 2015, there was $2.3 million of total unrecognized compensation costs related to nonvested stock options. The cost is expected to be recognized over a weighted‑average service period of approximately 1.8 years.
Performance Share Awards
Performance share awards were granted to certain employees under the 2014 Stock Incentive Plan and the Amended and Restated 2010 Stock Incentive Plan. The performance share awards are treated as an equity award and are paid in shares. Whether the performance shares are earned depends upon the participant's continued employment through the performance period (except in the case of specific types of terminations) and PFG’s performance against three-year goals set at the beginning of the performance period. Performance goals based on various PFG factors, including return on common equity, operating income and book value per common share, must be achieved for any of the performance shares to be earned. If the performance requirements are not met, the performance shares will be forfeited, no compensation cost is recognized and any previously recognized compensation cost is reversed. There is no maximum contractual term on these awards. Dividend equivalents are credited on performance shares outstanding as of the record date. These dividend equivalents are only paid on the shares released.
The fair value of performance share awards is determined based on the closing stock price of PFG common shares on the grant date. The weighted‑average grant-date fair value of performance share awards granted during 2015, 2014 and 2013 was $51.33, $44.88 and $30.70, respectively.
As of December 31, 2015, there was $6.0 million of total unrecognized compensation cost related to nonvested performance share awards granted. The cost is expected to be recognized over a weighted‑average service period of approximately 1.8 years.
Restricted Stock Units
Restricted stock units were granted to certain employees and agents under the 2014 Stock Incentive Plan, the Amended and Restated 2010 Stock Incentive Plan and Stock Incentive Plan. Restricted stock units are treated as equity awards and are paid in shares. Under these plans, awards have graded or cliff vesting over a three-year service period. When service for PFG ceases (except in the case of specific types of terminations), all vesting stops and unvested units are forfeited. There is no maximum contractual term on these awards. Dividend equivalents are credited on restricted stock units outstanding as of the record date. These dividend equivalents are only paid on the shares released.
The fair value of restricted stock units is determined based on the closing stock price of PFG common shares on the grant date. The weighted‑average grant-date fair value of restricted stock units granted during 2015, 2014 and 2013 was $51.31, $45.00 and $30.80, respectively.


336


Principal Life Insurance Company
Notes to Consolidated Financial Statements
December 31, 2015

As of December 31, 2015, there was $34.1 million of total unrecognized compensation cost related to nonvested restricted stock unit awards granted under these plans. The cost is expected to be recognized over a weighted‑average period of approximately 1.7 years.

Employee Stock Purchase Plan
Under the Employee Stock Purchase Plan, participating employees have the opportunity to purchase shares of PFG common stock on a semi-annual basis. Employees may purchase up to $25,000 worth of PFG common stock each year. Employees may purchase shares of PFG common stock at a price equal to 85% of the shares' fair market value as of the beginning or end of the purchase period, whichever is lower.

We recognize compensation expense for the fair value of the discount granted to employees participating in the employee stock purchase plan in the period of grant. Shares of the Employee Stock Purchase Plan are treated as an equity award. The weighted‑average fair value of the discount on the stock purchased was $7.30, $8.94 and $14.16 during 2015, 2014 and 2013, respectively.

19. Quarterly Results of Operations (Unaudited)
The following is a summary of unaudited quarterly results of operations.
 
 
 
For the three months ended
 
 
 
December 31
 
September 30
 
June 30
 
March 31
 
 
 
(in millions)
2015
 
 
 
 
 
 
 
 
 
 
 
Total revenues
$
2,325.5
 
$
2,792.1
 
$
2,775.7
 
$
2,227.4
Total expenses
 
2,074.1
 
 
2,418.8
 
 
2,538.1
 
 
1,866.4
Net income
 
201.6
 
 
291.6
 
 
206.8
 
 
241.4
Net income attributable to PLIC
 
200.8
 
 
290.8
 
 
198.9
 
 
240.1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2014
 
 
 
 
 
 
 
 
 
 
 
Total revenues
$
2,472.5
 
$
2,042.3
 
$
2,074.1
 
$
2,027.2
Total expenses
 
2,169.7
 
 
1,725.3
 
 
1,766.7
 
 
1,728.9
Net income
 
240.3
 
 
253.2
 
 
233.5
 
 
255.5
Net income attributable to PLIC
 
239.7
 
 
248.6
 
 
229.6
 
 
234.6



337
 


PART C
OTHER INFORMATION
Item 24.    Financial Statements and Exhibits
(a)
Financial Statements included in the Registration Statement
(1)
Part A:
Condensed Financial Information for the period ended December 31, 2015
(2)
Part B:
Principal Life Insurance Company Separate Account B:
Report of Independent Registered Public Accounting Firm *
Statements of Assets and Liabilities, December 31, 2015 *
Statements of Operations for the year ended December 31, 2015 *
Statements of Changes in Net Assets for the years ended December 31, 2015 and 2014 *
Notes to Financial Statements *
Principal Life Insurance Company:
Report of Independent Registered Public Accounting Firm *
Consolidated Statements of Financial Position at December 31, 2015, and 2014 *
Consolidated Statements of Operations for the years ended December 31, 2015, 2014 and 2013 *
Consolidated Statements of Stockholder's Equity for the years ended December 31, 2015, 2014 and 2013 *
Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2014 and 2013 *
Notes to Consolidated Financial Statements *
(3)
Part C
Principal Life Insurance Company
Report of Independent Registered Public Accounting Firm on Schedules *
Schedule I - Summary of Investments - Other Than Investments in Related Parties As of December 31, 2015 *
Schedule III - Supplementary Insurance Information as of December 31, 2015, 2014 and 2013 and for each of the years then ended *
Schedule IV - Reinsurance as of December 31, 2015, 2014 and 2013 and for each of the years then ended *
(b)
Exhibits
 
 
(1)
Resolution of Board of Directors of the Depositor (filed with the Commission on 07/02/2014 Accession No. 0000009713-14-000078)
 
(3a)
Distribution Agreement dated 08/04/2015 (filed with the Commission on 04/29/2016 Accession No. 0000009713-16-000212)
 
(3b)
Selling Agreement (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
(4a)
Form of Variable Annuity Contract (filed with the Commission on 09/16/2014 Accession No. 0000009713-14-000082)
 
(4b)
Waiver of Surrender Charge Rider (filed with the Commission on 09/16/2014 Accession No. 0000009713-14-000082)
 
(4c)
Deferred Income Rider (filed with the Commission on 09/16/2014 Accession No. 0000009713-14-000082)
 
(4d)
No Surrender Charge Rider (Liquidity Max) (filed with the Commission on 09/16/2014 Accession No. 0000009713-14-000082)
 
(4e)
Return of Premium Death Benefit Rider (filed with the Commission on 09/16/2014 Accession No. 0000009713-14-000082)
 
(4f)
Annual Step-up Death Benefit Rider (filed with the Commission on 09/16/2014 Accession No. 0000009713-14-000082)
 
(4g)
Contract Data Page (filed with the Commission on 09/16/2014 Accession No. 0000009713-14-000082)
 
(5)
Form of Variable Annuity Application (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
(6a)
Articles of Incorporation of the Depositor (filed with the Commission on 07/02/2014 Accession No. 0000009713-14-000078)
 
(6b)
Bylaws of Depositor (filed with the Commission on 07/02/2014 Accession No. 0000009713-14-000078)




 
(8)
Participation Agreements
 
 
a. ALPS
 
 
(1)
ALPS Variable Investment Trust Participation Agreement dated 04/30/2015 (filed with the Commission on 04/29/2016 Accession No. 0000009713-16-000212)
 
 
(2)
ALPS Variable Investment Trust Rule 22c-2 Agreement dated 04/30/2015 (filed with the Commission on 04/29/2016 Accession No. 0000009713-16-000212)
 
 
b. American Century
 
 
(1)
American Century Investment Services, Inc. Shareholder Services Agreement dated 04/01/1999 as amended on 05/01/2001, 05/01/2002, 05/01/2004, and 10/13/2005 (filed with the Commission for 333-116220 as Ex-99.8C1 on 05/01/2008 Accession No. 0000950137-08-006515)
 
 
(2)
American Century Investment Services, Inc. Amendment No. 5 to Shareholder Services Agreement dated 06/01/2011 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(3)
American Century Investment Services, Inc. Amendment No. 6 and Joinder to Shareholder Service Agreement dated 11/01/2011 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(4)
American Century Investment Services, Inc. Amendment No. 7 to Shareholder Service Agreement dated 03/20/2014 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(5)
American Century Investment Services, Inc. Rule 22c-2 Agreement (filed with the Commission as Ex-99.8C2 on 05/01/08 Accession No. 0000950137-08-006515)
 
 
(6)
American Century Investment Services, Inc. Amendment No. 1 to Rule 22c-2 Agreement dated 11/01/2011 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
c. American Funds
 
 
(1)
American Funds Distributors, Inc. Participation and Service Agreement dated 05/01/2014 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(2)
American Funds Distributors, Inc. Business Agreement dated 05/01/2014 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(3)
American Funds Service Company Rule 22c-2 Agreement dated 05/19/2014 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(4)
American Funds Form of First Amendment To Fund Participation and Service Agreement (filed with the Commission on 04/29/2015 Accession No. 0000009713-15-000043)
 
 
d. BlackRock
 
 
(1)
BlackRock Variable Series Funds, Inc. Participation Agreement dated 05/19/2015 (filed with the Commission on 04/29/2016 Accession No. 0000009713-16-000212)
 
 
(2)
BlackRock Advisors, LLC Administrative Services Agreement dated 05/19/2015 (filed with the Commission on 04/29/2016 Accession No. 0000009713-16-000212)
 
 
(3)
BlackRock Variable Series Funds, Inc. Distribution Sub-Agreement dated 05/19/2015 (filed with the Commission on 04/29/2016 Accession No. 0000009713-16-000212)




 
 
e. Calvert
 
 
(1)
Calvert Variable Products, Inc. Consolidated Fund Participation Agreement dated 11/01/2011 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(2)
Calvert Insurance Services, Inc. Amendment to Consolidated Fund Participation Agreement dated 04/30/2014 (filed with the commission on 10/09/2014 Accession No. 0000009713-14-000090)
 
 
(3)
Calvert Insurance Services, Inc. Consolidated Services Agreement dated 11/01/2011 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(4)
Calvert Insurance Services, Inc. Amendment to Consolidated Services Agreement dated 04/30/2014 (filed with the commission on 10/09/2014 Accession No. 0000009713-14-000090)
 
 
(5)
Calvert Distributors, Inc. Rule 22-2 Agreement with Princor dated 04/10/2007 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(6)
Calvert Distributors, Inc. Rule 22-2 Agreement with Principal Life Insurance Company dated 03/29/2007 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(7)
Calvert Investors, Inc. Omnibus Termination Agreement dated 11/01/2011 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
f. ClearBridge/Legg Mason
 
 
(1)
Legg Mason Participation Agreement dated 04/26/2013 (filed with the Commission on 04/29/2016 Accession No. 0000009713-16-000212)
 
 
(2)
Legg Mason Administrative Services Agreement dated 04/26/2013 (filed with the Commission on 04/29/2016 Accession No. 0000009713-16-000212)
 
 
g. Columbia
 
 
(1)
Columbia Funds Variable Insurance Trust Participation Agreement dated 04/28/2015 (filed with the Commission on 04/29/2016 Accession No. 0000009713-16-000212)
 
 
(2)
Columbia Funds Variable Series Trust II Participation Agreement dated 04/28/2015 (filed with the Commission on 04/29/2016 Accession No. 0000009713-16-000212)
 
 
(3)
Columbia Management Investment Distributors, Inc. Services Agreement dated 05/01/2015 (filed with the Commission on 04/29/2016 Accession No. 0000009713-16-000212)
 
 
h. Delaware Distributors
 
 
 
 
 
 
(1)
Delaware VIP Trust & Delaware Distribution, L. P. Participation Agreement dated 04/26/2010 (filed with the commission on 02/23/2015 Accession No. 0000009713-15-000007)
 
 
(2)
Delaware VIP Trust & Delaware Distribution, L. P. Participation Agreement Amendment No. 1 dated 12/30/2010 (filed with the commission on 02/23/2015 Accession No. 0000009713-15-000007)
 
 
(3)
Delaware VIP Trust & Delaware Distribution, L. P. Participation Agreement Amendment No. 2 dated 04/04/2014 (filed with the commission on 02/23/2015 Accession No. 0000009713-15-000007)
 
 
(4)
Delaware VIP Trust & Delaware Distribution, L. P. Participation Agreement Amendment No. 3 dated 07/01/2015 (filed with the Commission on 04/29/2016 Accession No. 0000009713-16-000212)
 
 
(5)
Delaware Distributions, L.P. Administrative Services Agreement dated 04/26/2010 (filed with the commission on 02/23/2015 Accession No. 0000009713-15-000007)




 
 
i. Dreyfus
 
 
 
 
 
 
 
(1)
Participation Agreement with Dreyfus Investment Portfolios, as amended (filed with the Commission for 333-116220 on 05/01/2008 0000950137-08-006515)
 
 
(2)
Dreyfus Services Corporation Participation Agreement Amendment No. 2 dated 04/15/11 (filed with the commission on 02/23/2015 Accession No. 0000009713-15-000007)
 
 
(3)
Dreyfus Services Corporation Participation Agreement Amendment No. 3 dated 04/25/12 (filed with the commission on 02/23/2015 Accession No. 0000009713-15-000007)
 
 
(4)
Administrative Services Agreement with Dreyfus Investment Portfolios, as amended (filed with the Commission for 333-116220 on 05/01/2008 0000950137-08-006515)
 
 
(5)
Dreyfus Services Corporation Administrative Services Agreement Amendment No. 2 and Joinder dated 04/25/12 (filed with the commission on 02/23/2015 Accession No. 0000009713-15-000007)
 
 
(6)
Rule 12b-1 Agreement with Dreyfus Investment Portfolios, as amended (filed with the Commission on May 1, 2008)
 
 
(7)
Dreyfus Service Corporation 12b-1 Letter Agreement for Service Class Shares dated 03/26/2002 (filed with the commission on 02/23/2015 Accession No. 0000009713-15-000007)
 
 
(8)
Dreyfus Service Corporation 12b-1 Letter Agreement Amendment No. 2 and Joinder dated 04/25/2012 (filed with the commission on 02/23/2015 Accession No. 0000009713-15-000007)
 
 
(9)
Dreyfus Service Corporation 22c-2 Supplement Agreement dated 04/16/2007 (filed with the commission on 02/23/2015 Accession No. 0000009713-15-000007)
 
 
j. DWS
 
 
(1)
DWS Scudder Distributors, Inc. Participation Agreement dated 12/01/2007 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(2)
DWS Investments Distributors, Inc. Amendment No. 1 to Participation Agreement dated 01/05/2011 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(3)
DWS Investments Distributors, Inc. Amendment No. 2 to Participation Agreement dated 05/01/2011 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(4)
DWS Investments Distributors, Inc. Amendment No. 3 and Joinder to Participation Agreement dated 12/18/2012 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(5)
DWS Investments Distributors, Inc. Amendment No. 4 to Participation Agreement dated 04/10/2013 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
k. Fidelity
 
 
(1)
Fidelity Distributors Corporation Amended and Restated Participation Agreement dated 12/20/2004 (filed with the Commission for 333-116220 as Ex-99.8E1 on 05/01/2008 Accession No. 0000950137-08-006515)
 
 
(2)
Fidelity Investments Institutional Operations Company, Inc. Services Agreement dated 07/01/1999 (filed with the Commission for 333-116220 as Ex-99.8E2 on 05/01/2008 Accession No. 0000950137-08-006515)
 
 
(3)
Fidelity Investments Institutional Operations Company, Inc. Service Contract for Service Class Shares dated 07/01/1999 (filed with the Commission for 333-116220 as Ex-99.8E3 on 05/01/2008 Accession No. 0000950137-08-006515)
 
 
(4)
Fidelity Investments Institutional Operations Company, Inc. Service Contract for Service Class Shares dated 07/01/1999 (filed with the Commission for 333-116220 as Ex-99.8E3 on 05/01/2008 Accession No. 0000950137-08-006515)
 
 
(5)
Fidelity Investments Institutional Operations Company, Inc. Service Contract for Initial Class Shares dated 03/01/2000 (filed with the Commission for 333-116220 as Ex-99.8E4 on 05/01/2008 Accession No. 0000950137-08-006515)
 
 
(6)
Fidelity Investments Institutional Operations Company, Inc. Service Contract for Service Class 2 Shares dated 04/01/2002 (filed with the Commission for 333-116220 as Ex-99.8E5 on 05/01/2008 Accession No. 0000950137-08-006515)




 
 
l. Franklin Templeton
 
 
(1)
Franklin Templeton Distributors, Inc. Amended and Restated Participation Agreement dated 11/01/2007 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(2)
Franklin Templeton Distributors, Inc. Amendment No. 1 to Amended and Restated Participation Agreement dated 09/10/2009 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(3)
Franklin Templeton Distributors, Inc. Amendment No. 2 to Amended and Restated Participation Agreement dated 08/16/2010 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(4)
Franklin Templeton Distributors, Inc. Addendum to the Amended and Restated Participation Agreement Addendum dated 05/01/2011 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(5)
Franklin Templeton Distributors, Inc. Amendment No. 3 to Amended and Restated Participation Agreement dated 11/01/2011 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(6)
Franklin Templeton Distributors, Inc. Amendment No. 4 to Amended and Restated Participation Agreement dated 09/16/2013 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(7)
Franklin Templeton Distributors, Inc. Amendment No. 5 to Amended and Restated Participation Agreement dated 05/01/2014 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(8)
Franklin Templeton Services, LLC Administrative Services Agreement dated 12/14/2007 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(9)
Franklin Templeton Services, LLC Amendment No. 1 to Administrative Services Agreement dated 09/10/2009 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(10)
Franklin Templeton Services, LLC Amendment No. 2 to Administrative Services Agreement dated 04/20/2011 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(11)
Franklin Templeton Services, LLC Amendment No. 3 to Administrative Services Agreement dated 11/01/2011 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(12)
Franklin Templeton Services, LLC Amendment No. 4 to Administrative Services Agreement dated 05/24/2013 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(13)
Franklin Templeton Services, LLC Amendment 5 to Administrative Services Agreement dated May 1, 2014 (filed with the Commission on 11/03/2016 Accession No. 0000009713-16-000282)
 
 
(14)
Franklin Templeton Services, LLC Amendment 6 to Administrative Services Agreement dated August 30, 2016 (filed with the Commission on 11/03/2016 Accession No. 0000009713-16-000282)
 
 
(15)
Franklin Templeton Distributors, Inc. Rule 22c-2 Agreement dated 04/16/2007 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(16)
Amendment to Franklin Templeton Shareholder Information Agreement (22c-2) dated April 2015 (filed with the Commission on 04/29/2015 Accession No. 0000009713-15-000043)
 
 
(17)
Amendment to Franklin Templeton Participation Agreement Addendum dated March 31, 2015 (filed with the Commission on 04/29/2015 Accession No. 0000009713-15-000043)
 
 
m. Goldman Sachs
 
 
(1)
Goldman Sachs Variable Insurance Trust Participation Agreement dated 07/30/2004 (filed with the Commission for 333-116220 as Ex-99.8F1 on 05/01/2008 Accession No. 0000950137-08-006515)
 
 
(2)
Goldman Sachs Variable Insurance Trust Participation Agreement Amendment No. 1 dated 06/20/2008 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(3)
Goldman Sachs Variable Insurance Trust Participation Agreement Amendment No. 2 dated 04/07/2011 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(4)
Goldman Sachs Variable Insurance Trust Participation Agreement Amendment No. 3 dated 10/26/2012 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(5)
Goldman Sachs & Co. Administrative Services Agreement dated 07/30/2004 (filed with the Commission for 333-116220 as Ex-99.8F2 on 05/01/2008 Accession No. 0000950137-08-006515)
 
 
(6)
Goldman Sachs & Co. Administrative Services Agreement Amendment No. 1 dated 06/20/2008 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(7)
Goldman Sachs & Co. Administrative Services Agreement Amendment No. 2 dated 10/26/2012 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(8)
Goldman Sachs & Co. Rule 22c-2 Agreement dated 10/16/2007 (filed with the Commission for 333-116220 as Ex-99.8F3 on 05/01/2008 Accession No. 0000950137-08-006515)
 
 
(9)
Goldman Sachs & Co. Rule 22c-2 Agreement Amendment No. 1 dated 10/26/2012 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)




 
 
n. Guggenheim/Rydex
 
 
(1)
Guggenheim Variable Funds Trust and Rydex Variable Trust Participation Agreement dated 05/01/2015 (filed with the Commission on 04/29/2016 Accession No. 0000009713-16-000212)
 
 
(2)
Guggenheim Funds Distributors, LLC Variable Product Services Agreement for the Rydex Variable Trust dated 05/01/2015 (filed with the Commission on 04/29/2016 Accession No. 0000009713-16-000212)
 
 
(3)
Guggenheim Funds Distributors, LLC Services Agreement dated 05/01/2015 (filed with the Commission on 04/29/2016 Accession No. 0000009713-16-000212)
 
 
(4)
Guggenheim Distributors, LLC FUND/SERV and Networking Agreement dated 10/28/2014 (filed with the Commission on 04/29/2016 Accession No. 0000009713-16-000212)
 
 
o. Invesco (formerly AIM Advisors, Inc.)
 
 
 
(1)
AIM Variable Insurance Funds, Inc. Participation Agreement dated 06/08/1999 as amended on 04/01/2001, 05/01/2002, 08/15/2002, 01/08/2003, 02/14/2003, 04/30, 2004, 04/29/2005 and 05/01/2006 (filed with the Commission for 333-116220 as Ex-99.8A1 on 05/01/2008 Accession No. 0000950137-08-006515)
 
 
(2)
AIM Variable Insurance Funds, Inc. Amendment to Participation Agreement dated 04/30/2010 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(3)
AIM Variable Insurance Funds Tenth Amendment to Participation Agreement dated 04/01/2011 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(4)
AIM Variable Insurance Funds Eleventh Amendment & Joinder to Participation Agreement dated 11/01/2011 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(5)
AIM Distributors, Inc. Distribution Services Agreement dated 10/01/2002 (filed with the Commission for 333-116220 as Ex-99.8A2 on 05/01/2008 Accession No. 0000950137-08-006515)
 
 
(6)
AIM Investment Services, Inc. Rule 22c-2 Agreement dated 04/16/2007 (filed with the Commission for 333-116220 as Ex-99.8A3 on 05/01/2008 Accession No. 0000950137-08-006515)
 
 
(7)
AIM Investment Services, Inc. First Amendment & Joinder to the Rule 22c-2 Agreement dated 11/01/2011 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(8)
AIM Advisors, Inc. Administrative Services Agreement dated 06/08/1999 (filed with the Commission for 333-116220 as Ex-99.8A4 on 05/01/2008 Accession No. 0000950137-08-006515)
 
 
(9)
AIM Advisors, Inc. Administrative Services Agreement Amendment 1 dated 04/30/2004 (filed with the Commission for 333-116220 as Ex-99.8A1 on 05/01/2008 Accession No. 0000950137-08-006515)
 
 
(10)
AIM Advisors, Inc. Administrative Services Agreement Second Amendment & Joinder dated 11/01/2011 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)




 
 
p. Janus
 
 
(1)
Janus Aspen Series Participation Agreement (Service Shares) dated 04/28/2000, as amended 08/20/2007 (filed with the Commission for 033-74232 on 05/01/2008 Accession No. 0000950137-08-006521)
 
 
(2)
Janus Aspen Series Amendment No. 7 to Fund Participation Agreement (Service Shares) dated 11/01/2011 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(3)
Janus Aspen Series Amendment No. 8 to Fund Participation Agreement (Service Shares) dated 02/24/2012 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(4)
Janus Capital Management LLC Administrative Services Letter Agreement dated 05/06/2008 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(5)
Janus Capital Management LLC Amendment to Administrative Services Letter Agreement (Service Shares) dated 11/01/2011 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(6)
Janus Distributors, Inc. Distribution and Shareholder Services Agreement dated 08/28/2000 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(7)
Janus Funds Distribution and Shareholder Services Agreement - Janus Aspen Series - Service Shares dated 10/19/2001 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(8)
Janus Distributors, LLC letter amendment to Distribution, Shareholder Servicing, Administrative Servicing and Fund/SERV Agreements dated 08/14/2006 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(9)
Janus Distributors LLC Amendment to Distribution and Shareholder Services Agreement dated 11/01/2011 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(10)
Janus Aspen Series Rule 22c-2 Agreement dated 04/16/2007 (filed with the Commission for 033-74232 on 05/01/2008 Accession No. 0000950137-08-006521)
 
 
(11)
Janus Distributors LLC Amendment to Rule 22c-2 Agreement dated 11/01/2011 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(12)
Janus Services LLC Supplemental Agreement - Letter Regarding handling of Mutual Fund Orders dated 05/20/2005 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
q. MFS
 
 
(1)
MFS Fund Distributors, Inc. Amended and Restated Participation Agreement dated 05/01/2013 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(2)
MFS Fund/Serv and Networking Agreement to Amended and Restated Participation Agreement dated 05/01/2013 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(3)
MFS Fund Distributors, Inc. Amended and Restated Administrative Services Letter Agreement dated 04/01/2016 (filed with the Commission on 11/03/2016 Accession No. 0000009713-16-000282)
 
 
(4)
MFS Variable Insurance Trust Website Regulatory Document Agreement dated 03/06/2008 (filed with the Commission for 333-116220 as Ex-99.8J12 on 04/30/2010 Accession No. 0000898745-10-000129)
 
 
(5)
MFS Fund Distributors, Inc. Rule 22c-2 Shareholder Information Agreement dated 10/16/2007 (filed with the Commission for 333-116220 as Ex-99.8J13 on 04/30/2010 Accession No. 0000898745-10-000129)
 
 
(6)
MFS Fund Distributors, Inc. Amendment No. 1 to Rule 22c-2 Shareholder Information Agreement dated 11/01/2011 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
r. Neuberger Berman
 
 
(1)
Participation Agreement with Neuberger Berman Advisers Management Trust, as amended (filed with the Commission for 333-116220 on 05/01/2008 0000950137-08-006515)
 
 
(2)
Neuberger Berman Advisers Management Trust Fund Participation Agreement Amendment No. 4 and Joinder dated 11/01/2011 (filed with the commission on 02/23/2015 Accession No. 0000009713-15-000007)
 
 
(3)
Distribution & Administrative Services Agreement with Neuberger Berman Advisers Management Trust (filed with the Commission for 333-116220 on 05/01/2008 0000950137-08-006515)
 
 
(4)
Neuberger Berman Management LLC Distribution and Administrative Services Agreement Amendment No. 1 and Joinder dated 11/01/2011 (filed with the commission on 02/23/2015 Accession No. 0000009713-15-000007)
 
 
(5)
Rule 22c-2 Agreement with Neuberger Berman Advisers Management Trust (filed with the Commission for 333-116220 on 05/01/2008 0000950137-08-006515)
 
 
(6)
Neuberger Berman Advisers Management Trust Rule 22c-2 Agreement Amendment No. 1 and Joinder dated 11/01/2011 (filed with the commission on 02/23/2015 Accession No. 0000009713-15-000007)




 
 
s. PIMCO
 
 
(1)
PIMCO Variable Insurance Trust Participation Agreement dated 03/09/09- (filed with the Commission for 333-116220 as Ex-99.B (8k1) on 03/01/10 Accession No. 0000898745-10-000129)
 
 
(2)
PIMCO Variable Insurance Trust Novation of and Amendment to Participation Agreement dated 10/22/2010 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(3)
PIMCO Variable Insurance Trust Participation Agreement Novation No. 1 dated 10/22/2010 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(4)
PIMCO Variable Insurance Trust Participation Agreement Novation No. 2 dated 10/22/2010 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(5)
PIMCO Variable Insurance Trust Participation Agreement Instrument of Accession and Amendment dated 08/29/2012 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(6)
PIMCO Variable Insurance Trust Administrative Services Agreement for Administrative Class Shares dated 03/09/09 (filed with the Commission for 333-116220 as Ex-99.B (8k2) on 03/01/10 Accession No. 0000898745-10-000129)
 
 
(7)
PIMCO Variable Insurance Trust Administrative Services Agreement for Administrative Class Shares Amendment No. 1 dated 04/22/09 (filed with the Commission for 333-116220 as Ex-99.B (8k3) on 03/01/10 Accession No. 0000898745-10-000129)
 
 
(8)
PIMCO Variable Insurance Trust Administrative Services Agreement Assignment and Amendment dated 03/29/2012 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
t. Principal Variable Contracts Funds, Inc.
 
 
(1)
Principal Variable Contracts Funds, Inc. Participation Agreement dated 01/05/2007 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(2)
Principal Variable Contracts Funds, Inc. Participation Agreement Amendment No. 1 dated 06/01/2007 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(3)
Principal Variable Contracts Funds, Inc. Participation Agreement Amendment No. 2 dated 01/01/2010 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(4)
Principal Variable Contracts Funds, Inc. Participation Agreement Amendment No. 3 (letter) dated 06/17/2010 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(5)
Principal Variable Contracts Funds, Inc. Participation Agreement Amendment No. 4 and Joinder dated 11/01/2011 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(6)
Principal Variable Contracts Fund, Inc. Participation Agreement Amendment No. 5 dated 02/09/2015 (filed with the Commission on 04/29/2015 Accession No. 0000009713-15-000043)
 
 
(7)
Principal Variable Contracts Fund, Inc. Participation Agreement Amendment No. 6 dated 08/10/2016 (filed with the Commission on 11/03/2016 Accession No. 0000009713-16-000282)
 
 
(8)
Principal Variable Contracts Fund, Inc. Rule 12b-1 Compensation Letter dated 12/30/2009 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(9)
Principal Variable Contracts Fund, Inc. Amendment to Rule 12b-1 Compensation Letter dated 11/09/2011 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(10)
Principal Variable Contracts Funds, Inc. Rule 22c-2 Agreement dated 04/16/2007 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(11)
Principal Variable Contracts Funds, Inc. Rule 22c-2 Agreement Amendment No. 1 and Joinder dated 11/01/2011 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
u. The Merger Fund VL
 
 
(1)
The Merger Fund VL Participation Agreement dated 05/05/2015 (filed with the Commission on 04/29/2016 Accession No. 0000009713-16-000212)
 
 
(2)
The Merger Fund VL Administrative Services Agreement dated 05/05/2015 (filed with the Commission on 04/29/2016 Accession No. 0000009713-16-000212)




 
 
v. Van Eck
 
 
(1)
Van Eck Worldwide Insurance Trust Participation Agreement dated 11/28/2007 (filed with the Commission for 333-116220 as Ex-99.8L1 on 03/01/2010 Accession No. 0000898745-10-000129)
 
 
(2)
Van Eck Worldwide Insurance Trust Participation Agreement Amendment No. 1 dated 04/24/2009 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(3)
Van Eck VIP Trust Participation Agreement Amendment No. 2 and Joinder dated 11/01/2011 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(4)
Van Eck Securities Corporation Service Agreement dated 11/28/2007 (filed with the Commission for 333-116220 as Ex-99.8L3 on 03/01/2010 Accession No. 0000898745-10-000129)
 
 
(5)
Van Eck Securities Corporation Service Agreement Amendment No. 1 dated 04/24/2009 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(6)
Van Eck Securities Corporation Service Agreement Amendment No. 2 dated 05/01/2011 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(7)
Van Eck Securities Corporation Service Agreement Amendment No. 2 and Joinder dated 11/01/2011 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(8)
Van Eck Securities Corporation Service Agreement Amendment No. 4 dated 05/01/2012 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
 
(9)
Van Eck Securities Corporation Shareholder Information Agreement (Rule 22c-2) dated 11/28/2007 (filed with the Commission for 333-116220 as Ex-99.8L2 on 03/01/2010 Accession No. 0000898745-10-000129)
 
 
(10)
Van Eck Securities Corporation Shareholder Information Agreement (Rule 22c-2) Amendment No. 1 and Joinder dated 11/01/2011 (filed with the Commission on 10/07/2014 Accession No. 0000009713-14-000086)
 
(9)
Opinion of Counsel (filed with the commission on 10/09/2014 Accession No. 0000009713-14-000090)
 
(10a)
Consent of Ernst & Young LLP *
 
(10b)
Powers of Attorney (filed with the Commission on 04/29/2016 Accession No. 0000009713-16-000212 and 11/03/2016 Accession No. 0000009713-16-000282)
 
(10c)
Consent of Counsel *
 
(11)
Financial Statement Schedules *
 
 
 
 
* Filed Herein
** To be filed by amendment





Item 25. Officers and Directors of the Depositor
Principal Life Insurance Company is managed by a Board of Directors which is elected by its policyowners. The directors and executive officers of the Company, their positions with the Company, including Board Committee memberships, and their principal business address, are as follows:
DIRECTORS:
Name and Principal Business Address
Positions and Offices
BETSY J. BERNARD
28556 Chianti Terrace
Bonita Springs, FL 34135
Director
Member, Audit and Executive Committees
JOCELYN CARTER-MILLER
8701 Banyan Court
Tamarac, FL 33321
Director
Member, Nominating and Governance Committee
MICHAEL T. DAN
495 Rudder Road
Naples, FL 34102
Director
Chair, Human Resources Committee
Member, Nominating and Governance Committee
DENNIS H. FERRO
21 Sago Palm Road
Vero Beach, FL 32963
Director
Chair, Nominating and Governance Committee
C. DANIEL GELATT, JR.
NMT Corporation
2004 Kramer Street
La Crosse, WI 54603
Director
Member, Audit and Human Resources Committees
SANDRA L. HELTON
1040 North Lake Shore Drive #26A
Chicago, IL 60611
Director
Chair, Audit Committee
Member, Executive Committee
ROGER C. HOCHSCHILD
Discover Financial Services
2500 Lake Cook Road
Riverwoods, IL 60015
Director
Member, Audit and Human Resources Committees
DANIEL J. HOUSTON
Principal Financial Group
Des Moines, IA 50392
Director
Chairman of the Board and Chair, Executive Committee
Principal Life: Chairman, President and Chief Executive Officer
SCOTT M. MILLS
Viacom, Inc.
1515 Broadway
New York, NY 10036
Director
Member, Audit and Human Resources Committees
BLAIR C. PICKERELL
Lower House 1
29 Mt. Kellett Road
The Peak
Hong Kong
Director
Member, Nominating and Governance Committee
ELIZABETH E. TALLETT
21 Deepwater Point
Moultonborough, NH 03254
Director
Member, Executive, Human Resources and Nominating and Governance Committees






EXECUTIVE OFFICERS (OTHER THAN DIRECTORS)
Name and Principal Business Address
Positions and Offices
REX AUYEUNG(1)
Chairman - Principal Financial Group - Asia
DAVID M. BLAKE(2)
Senior Executive Director and Global Head of Fixed Income
ELIZABETH S. BRADY(2)
Senior Vice President and Chief Marketing Officer
GREGORY J. BURROWS(2)
Senior Vice President Retirement and Income Solutions
NICHOLAS M. CECERE(2) 
Senior Vice President - USIS Distribution
TIMOTHY M. DUNBAR(2)
Executive Vice President and Chief Investment Officer
GREGORY B. ELMING(2)
Senior Vice President and Chief Risk Officer
NORA M. EVERETT(2)
President Retirement and Income Solutions
AMY C. FRIEDRICH(2)
Senior Vice President, Specialty Benefits Division
GINA L. GRAHAM(2)
Vice President and Treasurer
PATRICK G. HALTER(2)
Senior Executive Director Principal Real Estate Investors
MARK S. LAGOMARCINO(2)
Senior Vice President and Deputy General Counsel
JULIA M. LAWLER(2)
Senior Executive Director - Principal Portfolio Strategies
TERRANCE J. LILLIS(2)
Executive Vice President and Chief Financial Officer
GREGORY A. LINDE(2)
Senior Vice President Individual Life
JAMES P. MCCAUGHAN(2)
President - Global Asset Management
BARBARA A. MCKENZIE(2)
Senior Executive Director and Chief Operating Officer - Boutique Operations (PGI)
DENNIS J. MENKEN(2)
Senior Vice President and Chief Investment Officer - Principal Life Insurance Company
GERALD W. PATTERSON(2)
Senior Vice President Retirement and Income Solutions
ELIZABETH L. RAYMOND(2)
Senior Vice President and Chief Human Resources Officer
ANGELA R. SANDERS(2)
Senior Vice President and Controller
RENEE V. SCHAAF(2)
Senior Vice President and Chief Operating Officer, Principal International
GARY P. SCHOLTEN(2)
Executive Vice President and Chief Information Officer
KAREN E. SHAFF(2)
Executive Vice President, General Counsel and Secretary
ELLEN W. SHUMWAY(2)
Senior Executive Director - Strategy and Boutique Operations (PGI)
DEANNA D. STRABLE(2)
Executive Vice President - Principal and President - U.S. Insurance Solutions
LUIS E. VALDES(2)
President - International Asset Management and Accumulation
LEANNE M. VALENTINE(2)
Senior Vice President and Deputy General Counsel
ROBERTO WALKER(3)
Senior Vice President and President, Principal Financial Group - Latin America
 
 
(1) 
Unit 1001-3, Central Plaza
 
18 Harbour Road
 
Wanchai
 
Hong Kong, China
 
 
(2) 
711 High Street
 
Des Moines, IA 50392
 
 
(3) 
Principal Vida Chile
 
Av Apoquindo 3600
 
Las Condes
 
Santiago, Chile


Item 26. Persons Controlled by or Under Common Control with the Depositor or the Registrant
The Registrant is a separate account of Principal Life Insurance Company (the "Depositor") and is operated as a unit investment trust. Registrant supports benefits payable under Depositor's variable life contracts by investing assets allocated to various investment options in shares of Principal Variable Contracts Funds, Inc. and other mutual funds registered under the Investment Company Act of 1940 as open-end management investment companies of the "series" type. No person is directly or indirectly controlled by the Registrant.




The Depositor is wholly-owned by Principal Financial Services, Inc. Principal Financial Services, Inc. (an Iowa corporation) an intermediate holding company organized pursuant to Section 512A.14 of the Iowa Code. In turn, Principal Financial Services, Inc. is a wholly-owned subsidiary of Principal Financial Group, Inc., a publicly traded company that filed consolidated financial statements with the SEC. A list of persons directly or indirectly controlled by or under common control with Depositor as of December 31, 2015 appears below:
None of the companies listed in such organization chart is a subsidiary of the Registrant; therefore, only the separate financial statements of Registrant and the consolidated financial statements of Depositor are being filed with this Registration Statement.
Principal Life Insurance Company - Organizational Structure
(December 31, 2015)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Organized in
 
% Owned
PRINCIPAL FINANCIAL GROUP, INC.
 
 
 
Delaware
 
Publicly Held
 
-->Principal Financial Services, Inc.*#
 
 
Iowa
 
100

 
 
-->Princor Financial Services Corporation*#
 
 
Iowa
 
100

 
 
-->PFG DO Brasil LTDA*#
 
 
Brazil
 
100

 
 
 
-->Brasilprev Seguros E Previdencia S.A.*
 
 
 
Brazil
 
50

 
 
 
-->Principal Global Investors Participacoes, LTDA*#
 
Brazil
 
100

 
 
 
-->Claritas Investments LTD*#
Cayman Islands
 
74

 
 
 
-->Claritas Participacoes S.A.*#
Brazil
 
86

 
 
 
 
-->Claritas Administracao de Recursos LTDA *#
Brazil
 
82

 
 
-->Principal International, Inc.*#
 
 
Iowa
 
100

 
 
 
-->Principal International (Asia) Limited*#
 
Hong Kong
 
100

 
 
 
 
-->Principal International (South Asia) SDN, BHD*#
 
 
Malaysia
 
100

 
 
 
 
-->Principal Global Investors (Asia) Limited*#
 
 
Hong Kong
 
100

 
 
 
 
-->Principal Nominee Company (Hong Kong) Limited*#
 
 
Hong Kong
 
100

 
 
 
 
-->Principal Asset Management Company (Asia) Limited*#
 
Hong Kong
 
100

 
 
 
 
-->Principal Trust Company (Bermuda) Limited*#
 
Bermuda
 
100

 
 
 
 
-->Principal Insurance Company (Hong Kong) Limited*#
 
Hong Kong
 
100

 
 
 
 
 
-->Principal Trust Company (Hong Kong) Limited*
 
Hong Kong
 
100

 
 
 
 
-->CIMB - Principal Asset Management Berhad*
 
Malaysia
 
40

 
 
 
 
 
-->CIMB Wealth Advisors Berhad*
 
Malaysia
 
100

 
 
 
 
 
-->CIMB - Principal Asset Management (S) PTE LTD*#
 
Singapore
 
100

 
 
 
 
 
-->CIMB - Principal Asset Management Company Limited*
 
Thailand
 
99.99

 
 
 
 
 
 
-->Finansa Asset Management Limited *#<
 
Thailand
 
100

 
 
 
 
 
-->PT CIMB Principal Asset Management*
 
Indonesia
 
99

 
 
 
 
-->Principal Trust Company (Asia) Limited*#
 
Hong Kong
 
100

 
 
 
 
-->Principal Investment & Retirement Services Limited*#
 
Hong Kong
 
100

 
 
 
-->Principal International Mexico, LLC *#
 
 
 
Delaware
 
100

 
 
 
 
-->Principal Mexico Servicios, S.A. de C.V.*#
Mexico
 
100

 
 
 
 
-->Distribuidora Principal Mexico, S.A. de C.V.*#
Mexico
 
100

 
 
 
 
-->Principal Financial Group, S.A. de C. V. Grupo Financiero.*#
Mexico
 
100

 
 
 
 
 
-->Principal Afore, S. A. de C.V., Principal Grupo Financiero*#
Mexico
 
100

 
 
 
 
 
-->Principal Fondos de Inversion S.A. de C.V., Operadora de Fondos de Inversion,
Mexico
 
100

 
 
 
 
 
 
 Principal Grupo Financiero *#
 
 
 
 
 
 
 
 
 
-->Principal Seguros, S.A. de C.V., Principal Grupo Financiero*#
 
Mexico
 
100

 
 
 
 
 
-->Principal Pensiones, S.A. de C.V., Principal Grupo Financiero*#
 
Mexico
 
100

 
 
 
-->Principal Consulting (India) Private Limited*#
 
 
 
India
 
100

 
 
-->Principal Global Investors Holding Company, LLC*#
 
 
Delaware
 
100

 
 
 
-->Principal Global Investors (Ireland) Limited*#
 
 
 
Ireland
 
100

 
 
 
-->Principal Global Financial Services (Europe) II LTD*#
 
 
 
United Kingdom
 
100

 
 
 
 
-->Principal Global Investors (Europe) Limited *
 
 
Wales/United Kingdom
 
100

 
 
 
 
-->PGI Origin Holding Company LTD*#<
 
 
Wales/United Kingdom
 
100

 
 
 
 
 
-->Origin Asset Management LLP*#<
 
 
Wales/United Kingdom
 
76

 
 
 
 
-->PGI Finisterre Holding Company LTD *
 
 
 
Wales/United Kingdom
 
100

 
 
 
 
-->Finisterre Holdings Limited *
 
 
Malta
 
56.5

 
 
 
 
 
-->Finisterre Capital UK Limited *
 
 
Wales/United Kingdom
 
100

 
 
 
 
 
 
-->Finisterre Capital LLP *
 
Wales/United Kingdom
 
86





 
 
 
 
 
-->Finisterre Hong Kong Limited *
 
 
Hong Kong
 
100

 
 
 
 
 
-->Finisterre Malta Limited *
 
 
 
 
Malta
 
100

 
 
 
 
 
-->Finisterre USA, Inc. *
 
 
 
 
Delaware
 
100

 
 
 
-->Principal Global Investors (Singapore) Limited*#
 
 
 
Singapore
 
100

 
 
 
-->Principal Global Investors (Japan) Limited*#
 
 
 
Japan
 
100

 
 
 
-->Principal Global Investors (Hong Kong) Limited*#
 
 
 
Hong Kong
 
100

 
 
-->CIMB Principal Islamic Asset Management SDN. BHD*#
 
 
Malaysia
 
50

 
 
-->Principal Financial Group (Mauritius) LTD*#
 
 
Mauritius
 
100

 
 
 
-->Principal PNB Asset Management Company Private Limited*#
 
 
India
 
78.6

 
 
 
-->Principal Trustee Company Private Limited*#
 
 
India
 
70

 
 
 
-->Principal Retirement Advisors Private Limited*#
 
 
India
 
100

 
 
-->Principal Life Insurance Company +#
 
 
Iowa
 
100

 
 
 
-->Principal Real Estate Fund Investors, LLC*#<
 
 
Delaware
 
100

 
 
 
-->Principal Development Investors, LLC*#<
 
 
Delaware
 
100

 
 
 
-->Principal Real Estate Holding Company, LLC*#<
 
 
Delaware
 
100

 
 
 
 
-->GAVI PREHC HC, LLC*#<
 
 
Delaware
 
100

 
 
 
-->Principal Global Investors, LLC*#<
 
 
Delaware
 
100

 
 
 
 
-->Principal Real Estate Investors, LLC*#
 
 
Delaware
 
100

 
 
 
 
-->Principal Enterprise Capital, LLC*#
 
 
Delaware
 
100

 
 
 
 
-->Principal Commercial Funding, LLC*#<
 
 
Delaware
 
100

 
 
 
 
-->Principal Global Columbus Circle, LLC*#<
 
Delaware
 
100

 
 
 
 
 
-->CCI Capital Partners, LLC *#<
 
 
 
Delaware
 
100

 
 
 
 
-->Post Advisory Group, LLC*#<
 
 
Delaware
 
80

 
 
 
 
 
-->Post Advisory Europe Limited *#<
 
Wales/United Kingdom
 
100

 
 
 
 
-->Principal Global Investors Trust*#<
 
 
Delaware
 
100

 
 
 
 
-->Spectrum Asset Management, Inc.*#<
 
 
Connecticut
 
100

 
 
 
 
-->CCIP, LLC*#<
 
 
Delaware
 
95

 
 
 
 
 
-->Columbus Circle Investors*#<
 
 
Delaware
 
100

 
 
 
-->Principal Holding Company, LLC*#<
 
 
Iowa
 
100

 
 
 
 
-->Petula Associates, LLC*<
 
 
Iowa
 
100

 
 
 
 
 
-->Principal Real Estate Portfolio, Inc.*#<
 
Delaware
 
100

 
 
 
 
 
 
-->GAVI PREPI HC, LLC *#<
 
Delaware
 
100

 
 
 
 
 
-->Petula Prolix Development Company*#<
 
 
Iowa
 
100

 
 
 
 
 
-->Principal Commercial Acceptance, LLC*#<
 
 
Delaware
 
100

 
 
 
 
-->Principal Generation Plant, LLC*#<
 
Delaware
 
100

 
 
 
 
-->Principal Bank*#<
 
Iowa
 
100

 
 
 
 
-->Equity FC, LTD*#<
 
 
 
 
Iowa
 
100

 
 
 
 
-->Principal Dental Services, Inc.*#<
 
 
Arizona
 
100

 
 
 
 
 
-->Employers Dental Services, Inc.*#<
 
 
Arizona
 
100

 
 
 
 
-->First Dental Health *#<
 
 
California
 
100

 
 
 
 
-->Delaware Charter Guarantee & Trust Company*#<
 
Delaware
 
100

 
 
 
 
-->Preferred Product Network, Inc.*#<
 
Delaware
 
100

 
 
 
-->Principal Reinsurance Company of Vermont*#
 
Vermont
 
100

 
 
 
-->Principal Life Insurance Company of Iowa*#<
 
Iowa
 
100

 
 
 
 
-->Principal Reinsurance Company of Delaware*#<
 
Delaware
 
100

 
 
-->Principal Financial Services (Australia), Inc.*#
 
 
Iowa
 
100

 
 
 
-->Principal Global Investors (Australia) Service Company Pty Limited*#
 
Australia
 
100

 
 
 
 
-->Principal Global Investors (Australia) Limited*#
 
Australia
 
100

 
 
-->Principal International Holding Company, LLC*#
 
 
Delaware
 
100

 
 
-->Principal Management Corporation*#
 
 
Iowa
 
100

 
 
 
-->Principal Financial Advisors, Inc.*#
 
 
Iowa
 
100

 
 
 
-->Principal Shareholder Services, Inc.*#
 
 
Washington
 
100

 
 
 
-->Edge Asset Management, Inc.*#
 
 
Washington
 
100

 
 
 
-->Principal Funds Distributor, Inc.*#
 
 
 
Washington
 
100

 
 
-->Principal Global Services Private Limited*#
 
 
India
 
100

 
 
-->CCB Principal Asset Management Company, LTD*
 
 
China
 
25

 
 
-->Principal Financial Services I (US), LLC *#
 
 
Delaware
 
100

 
 
 
-->Principal Financial Services II (US), LLC *#
 
 
Delaware
 
100





 
 
 
-->Principal Financial Services I (UK) LLP *#
 
 
Wales/United Kingdom
 
100

 
 
 
 
-->Principal Financial Services IV (UK) LLP *#
 
United Kingdom
 
100

 
 
 
 
 
-->Principal Financial Services V (UK) LTD.*#
 
 
United Kingdom
 
100

 
 
 
 
-->Principal Financial Services II (UK) LTD. *#
 
Wales/United Kingdom
 
100

 
 
 
 
 
-->Principal Financial Services III (UK) LTD. *#
 
 
Wales/United Kingdom
 
100

 
 
 
 
 
 
-->Principal Financial Services VI (UK) LTD *#
 
 
United Kingdom
 
100

 
 
 
 
 
 
 
-->Principal Global Financial Services (Europe) LTD *#
 
 
United Kingdom
 
100

 
 
 
 
 
 
 
 
-->Liongate Capital Management LLP *
 
 
Wales/United Kingdom
 
55

 
 
 
 
 
 
 
 
-->Liongate Limited *
 
 
Malta
 
55

 
 
 
 
 
 
 
 
 
-->Liongate Capital Management (Cayman) Limited *
 
 
Cayman Islands
 
100

 
 
 
 
 
 
 
 
 
 
-->Liongate Capital Management (UK) Limited *
 
 
Wales/United Kingdom
 
100

 
 
 
 
 
 
 
 
 
 
-->Liongate Multi-Strategy GP Limited *
 
 
Cayman Islands
 
100

 
 
 
 
 
 
 
 
 
-->Liongate Capital Management Limited *
 
 
Malta
 
100

 
 
 
 
 
 
 
 
 
 
-->Liongate Capital Management (India) Private Limited *
 
 
India
 
100

 
 
 
 
 
 
 
 
 
-->Liongate Capital Management Inc.
 
Delaware
 
100

 
 
 
 
 
 
 
 
 
 
-->Liongate Capital Management (US) LP *
Delaware
 
100

 
 
 
 
 
 
-->Principal Financial Services Latin America LTD. *#
 
 
Wales/United Kingdom
 
100

 
 
 
 
 
 
 
-->Principal International Latin America LTD.*#
 
United Kingdom
 
100

 
 
 
 
 
 
 
 
-->Principal International South America I LTD.*#
 
 
Wales/United Kingdom
 
100

 
 
 
 
 
 
 
 
 
-->Principal International South America II LTD.*#
 
 
 
Wales/United Kingdom
 
100

 
 
 
 
 
 
 
 
 
 
-->Principal International South America II LTD., Agencia En Chile *#
 
Chile/United Kingdom
 
100

 
 
 
 
 
 
 
 
 
 
 
-->Principal International de Chile, S.A.*#
 
 
 
Chile
 
100

 
 
 
 
 
 
 
 
 
 
 
 
-->Principal Compania de Seguros de Vida Chile S.A.*#
Chile
 
100

 
 
 
 
 
 
 
 
 
 
 
 
 
-->Principal Administradora General de Fondos S.A.*#
Chile
 
100

 
 
 
 
 
 
 
 
 
 
 
 
-->Principal Asset Management Chile S.A.*#
 
 
Chile
 
100

 
 
 
 
 
 
 
 
 
 
 
 
-->Principal Servicios Corporativos Chile LTDA*#
 
Chile
 
100

 
 
 
 
 
 
 
 
 
 
 
 
-->Principal Servicios de Administracion S.A.
 
 
Chile
 
100

 
 
 
 
 
 
 
 
 
 
 
 
 
-->Hipotecaria Cruz Del Sur Principal, S.A *
 
Chile
 
49

 
 
 
 
 
 
 
 
 
 
 
-->Principal Holding Company Chile S.A.*#
 
 
 
Chile
 
100

 
 
 
 
 
 
 
 
 
 
 
 
-->Principal Chile Limitada*#
 
 
 
 
Chile
 
100

 
 
 
 
 
 
 
 
 
 
 
 
 
-->Administradora de Fondos de Pensiones Cuprum S.A. *#
 
Chile
 
97

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
-->Inversiones Cuprum Internacional S.A.*#
Chile
 
100

 
 
-->Principal National Life Insurance Company+#
 
Iowa
 
100

 
 
-->Diversified Dental Services, Inc.*#
 
 
Nevada
 
100

 
 
-->Morley Financial Services, Inc. *#
 
Oregon
 
100

 
 
 
-->Morley Capital Management, Inc.*#
 
Oregon
 
100

 
 
 
-->Union Bond & Trust Company*#
 
Oregon
 
100

 
 
-->Principal Investors Corporation*#
 
 
New Jersey
 
100

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
+ Consolidated financial statements are filed with the SEC.
 
 
 
 
 
 
* Not required to file financial statements with the SEC.
 
 
 
 
# Included in the consolidated financial statements of Principal Financial Group, Inc. filed with the SEC.
 
 
 
 
= Separate Financial statements are filed with SEC.
 
 
 
 
< Included in the financial statements of Principal Life Insurance Company filed with the SEC.
 
 
 
 





Item 27. Number of Contractowners - As of November 30, 2016
(1)
(2)
 
Number of
Title of Class
Contractowners
BFA Variable Annuity Contracts
6
Pension Builder Plus Contracts
71
Personal Variable Contracts
11
Premier Variable Contracts
21
Flexible Variable Annuity Contract
19,763
Freedom Variable Annuity Contract
801
Freedom 2 Variable Annuity Contract
255
Investment Plus Variable Annuity Contract
67,329
Principal Lifetime Income Solutions
1,040
Principal Pivot Series Variable Annuity
568
Principal Lifetime Income Solutions II
N/A
Item 28. Indemnification

Sections 490.851 through 490.859 of the Iowa Business Corporation Act permit corporations to indemnify directors and officers where (A) all of the following apply: the director or officer (i) acted in good faith; (ii) reasonably believed that (a) in the case of conduct in the individual's official capacity, that the individual's conduct was in the best interests of the corporation or (b) in all other cases, that the individual's conduct was at least not opposed to the best interests of the corporation; and (iii) in the case of any criminal proceeding, the individual had no reasonable cause to believe the individual's conduct was unlawful; and (B) the individual engaged in conduct for which broader indemnification has been made permissible or obligatory under a provision of the corporation's articles of incorporation.

Unless ordered by a court pursuant to the Iowa Business Corporation Act, a corporation shall not indemnify a director or officer in either of the following circumstances: (A) in connection with a proceeding by or in the right of the corporation, except for reasonable expenses incurred in connection with the proceeding if it is determined that the director has met the relevant standard of conduct (above) or (B) in connection with any proceeding with respect to conduct for which the director was adjudged liable on the basis that the director receive a financial benefit to which he or she was not entitled, whether or not involving action in the director's official capacity.

Registrant's By-Laws provide that it shall indemnify directors and officers against damages, awards, settlements and costs reasonably incurred or imposed in connection with any suit or proceeding to which such person is or may be made a party by reason of being a director or officer of the Registrant. Such rights of indemnification are in addition to any rights to indemnity to which the person may be entitled under Iowa law and are subject to any limitations imposed by the Board of Directors. The Board has provided that certain procedures must be followed for indemnification of officers, and that there is no indemnity of officers when there is a final adjudication of liability based upon acts which constitute gross negligence or willful misconduct.

Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

Item 29. Principal Underwriters
(a)    Other Activity
Principal Securities, Inc. (formerly Princor Financial Services Corporation) acts as principal underwriter for variable annuity contracts issued by Principal Life Insurance Company Separate Account B, a registered unit investment trust and for variable life insurance contracts issued by Principal Life Insurance Company Variable Life Separate Account, a registered unit investment trust.




(b)    Management
(b1)
(b2)
Name and principal
Positions and offices
business address
with principal underwriter
 
 
Deborah J. Barnhart
Director/Distribution (PPN)
Principal Financial Group(1)
 
 
 
Patricia A. Barry
Assistant Corporate Secretary
Principal Financial Group(1)
 
 
 
Nicholas M. Cecere
Senior Vice President and Director
Principal Financial Group(1)
 
 
 
Scott A. Christensen
Chief Financial Officer
Principal Financial Group(1)
 
 
 
William Dunker
AML Officer
Principal Financial Group(1)
 
 
 
Gregory B. Elming
Director
Principal Financial Group(1)
 
 
 
Nora M. Everett
Director
Principal Financial Group(1)
 
 
 
Stephen G. Gallaher
Assistant General Counsel/Assistant Corporate Secretary
Principal Financial Group(1)
 
 
 
Gina L. Graham
Vice President and Treasurer
Principal Financial Group(1)
 
 
 
Lee M. Harms
Chief Information Security Officer
Principal Financial Group(1)
 
 
 
Kara Hoogensen
Chairman, President and Chief Executive Officer
Principal Financial Group(1)
 
 
 
Jennifer Litchfield
Vice President and Chief Compliance Officer
Principal Financial Group(1)
 
 
 
Julie LeClere
Senior Vice President/Managing Director
Principal Financial Group(1)
 
 
 
Martin R. Richardson
Vice President - Broker Dealer Operations
Principal Financial Group(1)
 
 
 
Karen E. Shaff
Executive Vice President/General Counsel/Corporate Secretary
Principal Financial Group(1)
 
 
 
Deanna D. Strable-Soethout
Director
Principal Financial Group(1)
 
 
 




(b1)
(b2)
Name and principal
Positions and offices
business address
with principal underwriter
 
 
Jeffrey A. Van Baale
Chief Information Officer
Principal Financial Group(1)
 
 
 
Traci L. Weldon
Senior Vice President
Principal Financial Group(1)
 
 
 
Dan L. Westholm
Assistant Vice President - Treasury
Principal Financial Group(1)
 
 
 
(1)   655 9th Street
      Des Moines, IA 50392
(c)    Compensation from the Registrant
(1)
Name of Principal Underwriter
(2)
Net Underwriting Discounts & Commissions
(3)
Compensation on Events Occasioning the Deduction of a Deferred Sales Load
(4)
Brokerage Commissions
(5)
Compensation
Principal Securities, Inc. (formerly Princor Financial Services Corporation)
$41,960,517.71
0
0
0

Item 30. Location of Accounts and Records

All accounts, books or other documents of the Registrant are located at the offices of the Depositor, The Principal Financial Group, Des Moines, Iowa 50392.

Item 31. Management Services

N/A

Item 32. Undertakings

The Registrant undertakes that in restricting cash withdrawals from Tax Sheltered Annuities to prohibit cash withdrawals before the Participant attains age 59 1/2, separates from service, dies, or becomes disabled or in the case of hardship, Registrant acts in reliance on SEC No Action Letter addressed to American Counsel of Life Insurance (available November 28, 1988). Registrant further undertakes that:
1.
Registrant has included appropriate disclosure regarding the redemption restrictions imposed by Section 403(b)(11) in its registration statement, including the prospectus, used in connection with the offer of the contract;
2.
Registrant will include appropriate disclosure regarding the redemption restrictions imposed by Section 403(b)(11) in any sales literature used in connection with the offer of the contract;
3.
Registrant will instruct sales representatives who solicit Plan Participants to purchase the contract specifically to bring the redemption restrictions imposed by Section 403(b)(11) to the attention of the potential Plan Participants; and
4.
Registrant will obtain from each Plan Participant who purchases a Section 403(b) annuity contract, prior to or at the time of such purchase, a signed statement acknowledging the Plan Participant's understanding of (a) the restrictions on redemption imposed by Section 403(b)(11), and (b) the investment alternatives available under the employer's Section 403(b) arrangement, to which the Plan Participant may elect to transfer his contract value.

Fee Representation

Principal Life Insurance Company represents the fees and charges deducted under the Policy, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by the Company.




SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant, Principal Life Insurance Company Variable Life Separate Account, has duly caused this Amendment to the Registration Statement to be signed on its behalf by the undersigned thereto duly authorized, and its seal to be hereunto affixed and attested, in the City of Des Moines and State of Iowa, on the 28th day of December, 2016.
 
PRINCIPAL LIFE INSURANCE COMPANY
 
    SEPARATE ACCOUNT B
 
(Registrant)
 
 
 
 
 
 
 
 
 
By :
/s/ D. J. Houston
 
 
D. J. Houston
 
 
Chairman, President and Chief Executive Officer
 
 
 
 
 
 
 
 
 
PRINCIPAL LIFE INSURANCE COMPANY
 
(Depositor)
 
 
 
 
 
 
 
 
 
By :
/s/ D. J. Houston
 
 
D. J. Houston
 
 
Chairman of the Board
 
 
Director, Chairman, President and Chief Executive Officer
 
 
 
 
Attest:
 
 
 
 
 
 
 
 
 
 
 
/s/ Clint Woods
 
 
 
Clint Woods
 
 
 
Assistant Corporate Secretary and Governance Officer
 
 
 





Pursuant to the requirements of the Securities Act, this amendment to the registration statement has been signed by the following persons in the capacities and on the date indicated.
Signature
Title
Date
 
 
 
/s/ D. J. Houston
Director, Chairman of the Board
December 28, 2016
D. J. Houston
Chairman, President, and Chief Executive Officer
 
 
 
 
/s/ A. R. Sanders
Senior Vice President and Controller
December 28, 2016
A. R. Sanders
(Principal Accounting Officer)
 
 
 
 
/s/ T. J. Lillis
Executive Vice President and
December 28, 2016
T. J. Lillis
Chief Financial Officer
 
 
(Principal Financial Officer)
 
 
 
 
  (B. J. Bernard)*
Director
December 28, 2016
B. J. Bernard
 
 
 
 
 
  (J. Carter-Miller)*
Director
December 28, 2016
J. Carter-Miller
 
 
 
 
 
  (M. T. Dan)*
Director
December 28, 2016
M. T. Dan
 
 
 
 
 
  (D. H. Ferro)*
Director
December 28, 2016
D. H. Ferro
 
 
 
 
 
  (C. D. Gelatt, Jr.)*
Director
December 28, 2016
C. D. Gelatt, Jr.
 
 
 
 
 
  (S. L. Helton)*
Director
December 28, 2016
S. L. Helton
 
 
 
 
 
  (R. C. Hochschild)*
Director
December 28, 2016
R. C. Hochschild
 
 
 
 
 
  (S. M. Mills)*
Director
December 28, 2016
S. M. Mills
 
 
 
 
 
  (B. C. Pickerell)*
Director
December 28, 2016
B. C. Pickerell
 
 
 
 
 
  (E. E. Tallett)*
Director
December 28, 2016
E. E. Tallett
 
 
 
 
*By
/s/ D. J. Houston
 
D. J. Houston
 
 
Director, Chairman of the Board
 
 
Chairman, President and Chief Executive Officer
 
 
*
Powers of Attorney (Previously filed with the Commission on 04/29/2016 Accession No. 0000009713-16-000212 and 11/03/2016 Accession No. 0000009713-16-000282)