SecProbe.io

Via Facsimile and U.S. Mail
Mail Stop 6010

         April 3, 2009

Terrance J. Lillis
Senior Vice President and Chief Financial Officer
Principal Financial Group, Inc.
711 High Street
Des Moines, IA 50392

Re:    Principal Financial Group, Inc .
 Form 10-K for the Fiscal Year Ended December 31, 2008
 Filed February 18, 2009
          File Number:  001-16725

Dear Mr. Lillis:

We have reviewed your filing and have the following comments.  In our
comments, we ask you to provide us with  information to better understand your
disclosure.  Where a comment requests you to  revise disclosure, the information you
provide should show us what the revised disc losure will look like and identify the annual
or quarterly filing, as appli cable, in which you intend to fi rst include it.  If you do not
believe that revised disclosure  is necessary, explain the reason in your response.  After
reviewing the information provided, we may raise additional comments and/or request
that you amend your filing.

 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 filing.  We look forward to  working with you in these respects.  We
welcome any questions you may have about our  comments or on any other aspect of our
review.  Feel free to call us at the telephone numbers listed at the end of this letter.

Item 1.  Business, page 4
1. You disclose on page 27 that you cede ma terial amounts of insurance to other
insurance companies through reinsurance.  In addition, on page 109 you disclose that
for the fiscal year ended December 31, 2008, your largest exposure to a single party-
reinsurer amounted to $18.5 bill ion or 11% of total net life insurance in force.  It
appears that this relationship and/or agr eement are material to your business. Please
revise to disclose the name of the reinsurer.   Please revise to pr ovide a description of
each of the material terms of your reinsu rance agreement, including, but not limited
to any payment provisions, ri ghts obtained, material obligat ions that must be met to

Terrance J. Lillis
Principal Financial Group, Inc. April 3, 2009 Page 2
 keep the agreement in place, term and termin ation provisions.  In addition, please file
a copy of the agreement as an exhibit.  Alternatively, please provide us with a
detailed analysis which supports your apparent conclusion that you are not
substantially dependent on this rein surance agreement pursuant to Item
601(b)(10)(ii)(B) of Regulation S-K.

Item 1A.  Risk Factors, page 18

2. You state on page 21 that as of Decemb er 31, 2008, your U.S. investment operations
held $6.6 billion of mortgage-b acked securities, or 17% of  your total fixed maturity
securities portfolio.  Please revise to include a new risk factor which discloses all the
material risks related to thes e securities.  In addition, pleas e separately disclose in the
risk factor the amount of residential mo rtgage-backed securities and commercial
mortgage-backed securities that the compa ny holds and explain the different risks
associated with the two types of securities.

Management’s Discussion and Analysis of Fi nancial Condition and Results of Operations
Critical Accounting Policies and Estimates
Fixed Maturities, Availa ble-for-Sale, page 37
 3. For your structured investment transactions, please expand your disclosure to discuss
what internal models you use to determine the value for certain investments.  Also
discuss the circumstances in which you de termine that the internal values more
accurately reflect the fair value of the investments than the external values.
 4. Please separately disclose the amount of gro ss unrealized losses th at are attributable
to movements in market interest rates and the amount that is attributable to
movements in credit spread s for each period presented.
 Mortgage loans, page 38

 5. Please disclose the amount of the valuation allowances and mortgage impairments for
each period presented and provide sensitivity  analyses around the key assumptions
for the significant estimates related to  your accounting for mortgage loans which
depict reasonably likely changes in the assumptions and the impact that the changes
in key assumptions would have  on your financial results.
  Derivatives, page 39

 6. Please expand your disclosure to discuss the process for calculating the fair value for
each material derivative instrument.  Disc uss the key assumptions used in the fair
value calculations and how the inputs are dete rmined.  Please disclose the impact of
non-performance risk, how it is determined and how non-performance risk in factored
into your fair value calculation.

Terrance J. Lillis
Principal Financial Group, Inc. April 3, 2009 Page 3

Fair Value Measurement, page 64

 7. Where you disclose that you use third-part y pricing services to assist you in
determining fair values, disclose the exte nt to which, and how, the information is
obtained and used in devel oping the fair value measurements in the consolidated
financial statements. The nature and form of this information may vary depending on
the facts and circumstances, but may include the following:

• The nature and amount of assets you va lued using prices you obtained from
pricing services, along with  the classification in th e fair value hierarchy;

• The number of quotes or prices you gene rally obtained per instrument, and if
you obtained multiple quotes or prices, how you determined the ultimate value
you used in your financial statements;

• Whether, and if so, how and why, you ad justed quotes or prices you obtained
from pricing services;

• The extent to which the pricing serv ices are gathering observable market
information as opposed to using unobs ervable inputs and/or proprietary
models in making valuation judgments and determinations;

• The procedures you performed to validat e the prices you obt ained to ensure
the fair value determination is consistent with SFAS 157, Fair Value
Measurements , and to ensure that you properl y classified your assets and
liabilities in the fair value hierarchy.
 Fixed Maturity Securities Impairments, page 75

 8. Please tell us why your disclosure “H owever, we do sell bonds under certain
circumstances, such as when we have evid ence of a significant deterioration in the
issuer's creditworthiness, when a change in regulatory requirements modifies what
constitutes a permissible investment or th e maximum level of investments held or
when there is an increase in capital requireme nts or a change in risk weights of debt
securities” does not contradict your disclosu re that you have the ability and intent to
hold available-for-sale securities with unrealized  losses until they mature or recover.

Fixed Maturity Securities Available-for-Sale, page 76

9. You disclose “We have estimated the effect  of the market illiquidity on significant
portions of our investment portfolio by m easuring the difference between valuations
provided by the cash bond market and those provided by the synthetic market for a
portion of the corporate bond and CMBS securi ties held in our investment portfolio.

Terrance J. Lillis
Principal Financial Group, Inc. April 3, 2009 Page 4
 In the current market environment the synt hetic market has more liquidity than the
cash bond market.”  Please revise your disc losure to clarify what is meant by the
synthetic market, the nature of the valuat ions obtained by the s ynthetic market and
why the synthetic market has more liquidity.

Notes to Consolidated Financial Statements

Note 17. Fair Value of Financial Instruments, page 154
 10. Please revise the table on page 157 herein  and on page 65 to show your derivative
assets and liabilities by fair value hierar chy level on a gross a nd not a net basis.
 11. In the table on page 158 herein and on page 66, please revise your fair value
measurement tables to show the transfers in  and out of Level 3 on a gross basis.  For
transfers in, discuss the specific inputs  that became unobservable and whether a
change in methodology resulted in the transfer.

*    *    *    *

 Please provide us the information request ed within 10 busine ss days or tell us
when you will provide us with a response.  Pl ease furnish a cover le tter with your response
that keys your response to our comments.  De tailed cover letters gr eatly facilitate our
review.  Please furnish your letter on EDGAR 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 a ny action with respect to the filing;
and
• the company may not assert staff comme nts as a defense in any proceeding
initiated by the Commission or any pers on under the federal s ecurities laws of
the United States.

 In addition, please be advi sed that the Division of En forcement 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.

Terrance J. Lillis
Principal Financial Group, Inc. April 3, 2009 Page 5

  Please contact Dana Hartz, Staff Acc ountant, at (202) 551-3648 or Don Abbott,
Review Accountant, at (202) 551-3608 if  you have any questions regarding the
processing of your response as well as any questions regarding comments on the
financial statements and related matters.   You may contact Jennifer Riegel, Staff
Attorney, at (202) 551-3575 or
Jeffrey Riedler , Assistant Director , at (202) 551-3715 with
questions on any of the other comments.  In th is regard, do not hesitate to contact me, at
(202) 551-3679.

        S i n c e r e l y ,

        J i m  B .  R o s e n b e r g
Senior Assistant Chief
Accountant