SEC Comment Letter for PRINCIPAL FINANCIAL GROUP (PFG) — Jun 23, 2006
PRINCIPAL FINANCIAL GROUP INC
Date: June 23, 2006 · CIK: 0001126328 · Accession: 0000000000-06-029483
AI Filing Summary & Sentiment
Letter
Via Facsimile and U.S. Mail Mail Stop 6010 June 23, 2006 Mr. Michael H. Gersie Executive Vice President and Chief Financial Officer 711 High Street Des Moines, IA 50392
Re: Principal Financial Group, Inc. Form 10-K for Fiscal Year Ended December 31, 2005 File No. 1-16725
Dear Mr. Gersie:
We have limited our review of your filing to the issues we have addressed in our comments. In our comments, we ask you to pr ovide us with more information so we may better understand your disclosure. After re viewing this information, we may raise additional comments.
Please understand that the purpose of our re view process is to assist you in your compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filings. We look forward to working with you in these respects. We welcome any questions you may have about our comments or any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter.
Form 10-K for the year ended December 31, 2005
Management’s Discussion and Analysis of Fi nancial Condition and Results of Operations
Critical Accounting Policies and Estimates, page 31 1. The sensitivity analyses you provide regard ing the possible variations in the value of your available-for-sale fixed matu rity securities and your deferred policy acquisition costs appear to be based on hypothetical changes in interest rates and long-term expected investment performan ce rates, respectively. Please tell us whether you believe the rates of change you disclose are reasonably likely to occur as required by FR-72, and if so, provide us proposed revised disclosure accordingly. Otherwise, please provide to us in a disclosure-type format revised
Mr. Mich ael H. Gersie Principal Financial Group, Inc. June 23, 2006 Page 2
discussions that indicate the impact of r easonably likely changes in interest rates and long-term expected investment performance rate.
Contractual Obligations and Comm ercial Commitments, page 63 2. It appears that the expect ed payments due for your contractholder funds and future policy benefits and claims liabilities are presented in the table net of present value discounts a nd present value of future net premiums as these amounts agree to the respective balance sh eet line items. Please provide us in a disclosure-type format a revised contr actual obligation table that includes the estimated timing of payment of your gross policy liabiliti es. To the extent you feel it is necessary to explain to a reader why these amounts do not agree to your balance sheet liabilities, you may include an explanation in the headnote or in a footnote to the table.
Please respond to these comments within 10 business days or tell us when you will provide us with a response. Please furnish a letter that keys your responses to our comments and provides the requested information. Detailed letters greatly facilitate our review. Please file your letter on E DGAR under the form type label CORRESP.
We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the filing includes all in formation required under the Securities Exchange Act of 1934 and th at they have provided all information investors require for an informed invest ment decision. Since the company and its management are in possession of all facts re lating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made.
In connection with responding to our co mments, please provide, in your letter, a statement from the company acknowledging that:
the company is responsible for the adequacy and accuracy of the disclosure in the filing;
staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and
the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
In addition, please be advise d that the Division of Enfo rcement has access to all information you provide to the staff of the Divi sion of Corporation Fi nance in our review of your filing or in response to our comments on your filing.
Mr. Mich ael H. Gersie Principal Financial Group, Inc. June 23, 2006 Page 3
If you have any questions, please contact Mark Brunhofer, Staff Accountant, at (202) 551-3638 or Kevin Woody, Branch Chief, at (202) 551-3629. In this regard, do not hesitate to contact me, at (202) 551-3679.
Sincerely,
Jim B. Rosenberg
Senior Assistant Chief Accountant
Show Raw Text
Via Facsimile and U.S. Mail
Mail Stop 6010
June 23, 2006
Mr. Michael H. Gersie
Executive Vice President and Chief Financial Officer
711 High Street
Des Moines, IA 50392
Re: Principal Financial Group, Inc.
Form 10-K for Fiscal Year Ended December 31, 2005
File No. 1-16725
Dear Mr. Gersie:
We have limited our review of your filing to the issues we have addressed in our
comments. In our comments, we ask you to pr ovide us with more information so we may
better understand your disclosure. After re viewing this information, we may raise
additional comments.
Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure requirements and to enhance the overall
disclosure in your filings. We look forward to working with you in these respects. We
welcome any questions you may have about our comments or any other aspect of our
review. Feel free to call us at the telephone numbers listed at the end of this letter.
Form 10-K for the year ended December 31, 2005
Management’s Discussion and Analysis of Fi nancial Condition and Results of Operations
Critical Accounting Policies and Estimates, page 31
1. The sensitivity analyses you provide regard ing the possible variations in the value
of your available-for-sale fixed matu rity securities and your deferred policy
acquisition costs appear to be based on hypothetical changes in interest rates and
long-term expected investment performan ce rates, respectively. Please tell us
whether you believe the rates of change you disclose are reasonably likely to
occur as required by FR-72, and if so, provide us proposed revised disclosure
accordingly. Otherwise, please provide to us in a disclosure-type format revised
Mr. Mich ael H. Gersie
Principal Financial Group, Inc.
June 23, 2006
Page 2
discussions that indicate the impact of r easonably likely changes in interest rates
and long-term expected investment performance rate.
Contractual Obligations and Comm ercial Commitments, page 63
2. It appears that the expect ed payments due for your contractholder funds and
future policy benefits and claims liabilities are presented in the table net of present value discounts a nd present value of future net premiums as these
amounts agree to the respective balance sh eet line items. Please provide us in a
disclosure-type format a revised contr actual obligation table that includes the
estimated timing of payment of your gross policy liabiliti es. To the extent you feel
it is necessary to explain to a reader why these amounts do not agree to your
balance sheet liabilities, you may include an explanation in the headnote or in a
footnote to the table.
Please respond to these comments within 10 business days or tell us when you
will provide us with a response. Please furnish a letter that keys your responses to our comments and provides the requested information. Detailed letters greatly facilitate our
review. Please file your letter on E DGAR under the form type label CORRESP.
We urge all persons who are responsible for the accuracy and adequacy of the
disclosure in the filing to be certain that the filing includes all in formation required under
the Securities Exchange Act of 1934 and th at they have provided all information
investors require for an informed invest ment decision. Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have made.
In connection with responding to our co mments, please provide, in your letter, a
statement from the company acknowledging that:
the company is responsible for the adequacy and accuracy of the disclosure in the
filing;
staff comments or changes to disclosure in response to staff comments do not
foreclose the Commission from taking any action with respect to the filing; and
the company may not assert staff comments as a defense in any proceeding initiated
by the Commission or any person under the federal securities laws of the United States.
In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filing or in response to our comments on your filing.
Mr. Mich ael H. Gersie
Principal Financial Group, Inc.
June 23, 2006
Page 3
If you have any questions, please contact Mark Brunhofer, Staff Accountant, at
(202) 551-3638 or Kevin Woody, Branch Chief, at (202) 551-3629. In this regard, do not
hesitate to contact me, at (202) 551-3679.
Sincerely,
Jim B. Rosenberg
Senior Assistant Chief Accountant