UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
1. ANNUAL REPORT PURSUANT TO SECTION 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999 Commission File Number 2-39957 and
(current number) Commission File Number 33-58028
PRINCIPAL LIFE INSURANCE COMPANY
f/k/a PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
SEPARATE ACCOUNT C
(Exact Name of Registrant, as specified in its charter)
Iowa 42-0127290
- ------------------------------- ----------------------------------
(State or other jurisdiction of IRS Employer Identification No.
incorporation or organization) (Principal Life Insurance Company)
The Principal Financial Group
Des Moines, Iowa 50392-0200
- ------------------------------- ---------------------------------
(Address) (Zip Code)
Registrant's telephone number, including area code (515) 248-3842
Securities registered pursuant to Section 12(g) of the Act:
Variable Contracts - Participating with Pooled Separate Account
Variable Benefits - HR-10 Plans
---------------------------------------------------------------
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes ___X___ No _______
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [X]
The Registrant has no voting stock.
PART I
Item 1. Business
The Registrant is a separate account established under the Iowa
insurance laws and regulations as Principal Life Insurance Company
Separate Account C on April 12, 1971, pursuant to a resolution of the
Executive Committee of the Board of Directors of Principal Life
Insurance Company. Principal Life Insurance Company was incorporated
under Iowa law as a mutual life insurance company named Bankers Life
Association. It changed its name to Bankers Life Company in 1911 and
then to Principal Mutual Life Insurance Company in 1986. The name change
to Principal LIfe Insurance Company and reorganization into a mutual
holding company structure took place in 1998. The account was formed to
receive payments under Principal Life Insurance Company Contracts
designed for use in connection with pension or profit sharing plans
which qualify under the Self-Employed Individuals Tax Retirement Act of
1962, as amended ("HR-10"). Principal Life Insurance Company offers
life, disability, health and annuity contracts written on an individual
and group basis.
Pursuant to the Amendments enacted in 1970 to the Investment Company Act
of 1940, the Account is not an investment company for purposes of the
Act.
The objective of these Contracts is to provide for the accumulation of
retirement funds and to provide for payments, usually commencing at
retirement, which tend to reflect changes in the cost of living both
during the years prior to and the years following the commencement of
annuity payments. With Bankers Flexible Annuity Contracts (Registration
No. 2-39957), Principal Life Insurance Company, as a depositor for the
Account, seeks to accomplish this objective by investing the payments
made under the Contracts in shares of Principal Variable Contracts Fund,
Inc. - Capital Value Account (f/k/a Principal Capital Accumulation Fund,
Inc.) which invests principally in common stocks. Similarly, with
Pension Builder Contracts (Registration No. 33-58028), it seeks to
accomplish this objective by investing payments made under the Contract
in three Divisions. One is a "Common Stock Division" where payments are
invested in shares of Principal Variable Contracts Fund, Inc. - Capital
Value Account. Another is a "Money Market Division" where payments are
invested in Principal Variable Contracts Fund, Inc., - Money Market
Account (f/k/a Principal Money Market Fund, Inc.), which invests in
short-term money market instruments. The third Division is a "Government
Securities Division" where payments are invested in Principal Variable
Contracts Fund, Inc. - Government Securities Account (f/k/a Principal
Government Securities Fund, Inc.), which invests in obligations issued
or guaranteed by the United States Government or its agencies. There may
be a combination of investments in the three Divisions, as directed by
Participants.
Except for those Contracts described above with payments credited to the
Registrant (Principal Life Insurance Company Separate Account C) and
Variable Annuity Contracts and Variable Life Insurance Contracts with
payments credited to Principal Life Insurance Company Separate Account B
and Variable Life Separate Account, respectively, the Company
distributes its own products as permitted under the laws of the various
jurisdictions in which the Company is authorized to do business, namely
the fifty states of the United States, the District of Columbia, the
Commonwealth of Puerto Rico and the Canadian provinces of Alberta,
British Columbia, Manitoba, Ontario and Quebec. Such distribution is
through a field agency system of approximately 1,147 full-time agents, a
group insurance sales organization of approximately 262 individuals and
through a large number of independent insurance brokers.
The Contracts described above with payments credited to the Registrant
and other Variable Annuity Contracts and Variable Life Insurance
Contracts are distributed through Princor Financial Services
Corporation, an affiliated broker-dealer offering open-end management
investment company shares, variable annuities, variable life insurance,
interests in limited partnerships and general securities to the public.
Such Contracts are sold primarily by registered representatives of the
broker-dealer who are also insurance agents of or brokers for Principal
Life Insurance Company and authorized by applicable law to sell life and
other forms of personal insurance and who are similarly authorized to
sell variable annuities. Such Contracts may also be sold through other
selected broker-dealers.
The Registration Statement filed by the Registrant was made effective
September 13, 1971, and the first sale of Bankers Flexible Annuity
Contracts occurred on October 8, 1971. Effective January 4, 1989, sales
of Bankers Flexible Annuity Contracts were discontinued.
In 1982 the Registrant filed a Registration Statement in File No.
2-78747, to register a new class of securities (called "Pension
Builder") for the same HR-10 plan market utilizing the contingent
deferred sales charge concept. The registration for Pension Builder
contracts first became effective on May 5, 1983 and the first sale under
the Pension Builder Contract was made on September 19, 1983.
In 1989 the Registrant filed a new Registration Statement in File No.
33-27256 for the contracts in view of the fact that aggregate sales
under the prior registration statement approached the amount of
contracts registered thereunder. The contracts offered by the new
registration statement are identical to contracts previously registered
under the 1933 Act in File No. 2-78747.
In 1993 the Registrant filed a new Registration Statement in File No.
33-58028 for the contracts in view of the fact that aggregate sales
under the prior registration statement approached the amount of
contracts registered thereunder. The contracts offered by the new
registration statement are identical to contracts previously registered
under the 1933 Act in File No. 33-27256. Effective September 30, 1995,
sales of Pension Builder Contracts were discontinued.
Item 2. Properties
The Registrant owns no physical properties. The principal properties of
the Depositor, Principal Life Insurance Company, are its home office
complex at The Principal Financial Group in Des Moines, Iowa.
Item 3. Legal Proceedings
None.
Item 4. Submission of Matters to a Vote of Security Holders
Inapplicable.
PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters
a. The Registrant does not issue common stock. The Contracts
described in Item 1. are distributed through Princor Financial
Services Corporation, an affiliated broker-dealer offering
open-end management investment company shares, variable annuities,
variable life insurance, interests in limited partnerships and
general securities to the public. Such Contracts are sold
primarily by registered representatives of the broker-dealer who
are also insurance agents of or brokers for Principal Life
Insurance Company and authorized by applicable law to sell life
and other forms of personal insurance and who are similarly
authorized to sell variable annuities. Such Contracts may also be
sold through other selected broker-dealers.
For Bankers Flexible Annuity Contracts (Registration No. 2-39957)
the high and low unit values for each quarterly period during 1998
and 1999 are:
Lowest Unit Value Highest Unit Value
First Quarter 1998 25.7039901 29.7421641
Second " 1998 28.9133343 30.0327198
Third " 1998 25.5325451 30.3428328
Fourth " 1998 25.8281110 30.2336310
First " 1999 29.0662723 30.9482632
Second " 1999 30.1740744 33.1373049
Third " 1999 27.9917253 32.5341224
Fourth " 1999 27.4644119 30.3602459
For Pension Builder Contracts (Registration No. 33-58028) units
were first valued at $1.00 on September 19, 1983 for the Capital
Value Division f/k/a Common Stock Division, September 22, 1983 for
the Money Market Division and March 30, 1987 for the Government
Securities Division. Listed below are the low and high unit values
for each quarterly period during 1998 and 1999.
Capital Value Money Market GovernmentSecurities
Division Division Division
------------------- ------------------- -------------------
Quarter Lowest Highest Lowest Highest Lowest Highest
------- --------- --------- --------- --------- --------- ---------
First Quarter 1998 5.0801506 5.8665362 1.8917032 1.9085747 2.0459757 2.0739041
Second " 1998 5.6972242 5.9204981 1.9087654 1.9258325 2.0601982 2.1037409
Third " 1998 5.0137197 5.9666438 1.9260245 1.9426780 2.1044991 2.1807744
Fourth " 1998 5.0674580 5.9183008 1.9428674 1.9607951 2.1436487 2.1900032
First " 1999 5.6831195 6.0565082 1.9609123 1.9751301 2.1436620 2.1837539
Second " 1999 5.8911639 6.4621709 1.9760268 1.9897774 2.1102814 2.1819446
Third " 1999 5.4368687 6.3339812 1.9899396 2.0059501 2.0846646 2.1531831
Fourth " 1999 5.3320720 5.8890498 2.0066813 2.0252333 2.1230148 2.1664268
b. The approximate number of holders of record of each group contract
and the number of the participants therein as of December 31,
1999, are as follows:
(1) (2)
Number of Group Number of
Contract Holders Participants
---------------- ------------
Bankers Flexible Annuity 16 16
Pension Builder 32 38
c. No dividends have been declared on units held by participants. Any
changes in net investment income, net realized gains and net
realized appreciation are included in the daily valuation of the
units of the Registrant.
Item 6. Selected Financial Data
The information contained in the "Statements of Net Assets, Statements
of Operations and Statements of Changes in Net Assets for Principal Life
Insurance Company Separate Account C", filed as Item 8. should be read
in conjunction with this item.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operation
All payments made to the Registrant on behalf of a Participant under a
contract (less any authorized deductions) are used to purchase shares of
Principal Variable Contracts Fund, Inc. - Capital Value Account, Money
Market Account, Inc., or Government Securities Account, as appropriate,
at net asset value. In addition, any distributions made by the Fund with
respect to shares held by the Registrant are reinvested by the Fund at
net asset value. Values under the contract increase or decrease to
reflect the investment performance of the underlying investments.
Principal Variable Contracts Fund, Inc. is an open-end diversified
management investment company, sponsored by Principal Life Insurance
Company. The principal objective of the Capital Value Account is
long-term capital appreciation and growth of future investment income.
It is intended that the assets of the Fund will consist primarily of a
portfolio of common stocks. The value of the investments held by the
Fund fluctuates daily. It is subject to the risks of changing economic
conditions as well as the risks inherent in the ability of the
management of the Account to anticipate changes in such investments
necessary to meet changes in economic conditions.
The principal objective of the Money Market Account is to seek as high a
level of income available from short-term securities as is considered
consistent with preservation of principal and maintenance of liquidity
by investing all of its assets in a portfolio of money market
instruments.
The principal objective of the Government Securities Account is to seek
a high level of current income, liquidity and safety of principal
through the purchase of obligations issued or guaranteed by the United
States Government or its agencies, with emphasis on Government National
Mortgage Association Certificates ("GNMA Certificates").
Item 8. Financial Statements and Supplementary Data
Financial Statements
Principal Life Insurance Company
Separate Account C
Year ended December 31, 1999
with Report of Independent Auditors
Principal Life Insurance Company
Separate Account C
Financial Statements
Year ended December 31, 1999
Contents
Report of Independent Auditors................................................1
Audited Financial Statements
Statements of Net Assets......................................................2
Statements of Operations......................................................3
Statements of Changes in Net Assets...........................................4
Notes to Financial Statements.................................................5
Report of Independent Auditors
Board of Directors and Participants
Principal Life Insurance Company
We have audited the accompanying individual and combined statements of net
assets of Principal Life Insurance Company Separate Account C (comprised of the
Capital Value, Government Securities, and Money Market Divisions) as of December
31, 1999, and the related statements of operations for the year then ended, and
changes in net assets for each of the two years in the period then ended. These
financial statements are the responsibility of the management of Principal Life
Insurance Company. 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 includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of December 31, 1999, by
correspondence with the transfer agent. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. 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 individual and combined financial position of the
respective divisions of Principal Life Insurance Company Separate Account C at
December 31, 1999, and the individual and combined results of their operations
for the year then ended, and the changes in their net assets for each of the two
years in the period then ended, in conformity with accounting principles
generally accepted in the United States.
/s/ Ernst & Young LLP
Des Moines, Iowa
January 31, 2000
Principal Life Insurance Company
Separate Account C
Statements of Net Assets
December 31, 1999
Assets
Investments:
Capital Value Division:
Capital Value Account - 46,485 shares at net asset value
of $30.74 per share (cost - $1,234,452) $1,428,942
Government Securities Division:
Government Securities Account - 24,235 shares at net asset
value of $10.26 per share (cost - $252,241) 248,655
Money Market Division:
Money Market Account - 273,299 shares at net asset
of $1.00 per share (cost - $273,299) 273,299
------------------
Net assets $1,950,896
==================
Unit
Units Value
--------------------
Net assets are represented by:
Capital Value Division:
Currently payable annuity contracts:
Bankers Flexible Annuity 1,566 $28.61 $ 44,803
Pension Builder Plus 3,027 5.54 16,770
Contracts in accumulation period:
Bankers Flexible Annuity 22,486 28.61 643,311
Pension Builder Plus 130,654 5.54 724,058
------------------
1,428,942
Government Securities Division:
Contracts in accumulation period -
Pension Builder Plus 116,410 2.14 248,655
Money Market Division:
Contracts in accumulation period -
Pension Builder Plus 135,182 2.02 273,299
------------------
Net assets $1,950,896
==================
See accompanying notes.
<TABLE>
<CAPTION>
Principal Life Insurance Company
Separate Account C
Statements of Operations
Year ended December 31, 1999
Capital Government Money
Value Securities Market
Combined Division Division Division
---------------------------------------------------------------
Investment income
Income:
<S> <C> <C> <C> <C>
Dividends $ 62,300 $ 32,980 $16,511 $12,809
Capital gains distributions 179,883 179,883 - -
---------------------------------------------------------------
242,183 212,863 16,511 12,809
Expenses:
Mortality and expense risks 26,992 18,323 4,611 4,058
Administration charges 2,538 1,430 365 743
---------------------------------------------------------------
29,530 19,753 4,976 4,801
---------------------------------------------------------------
Net investment income 212,653 193,110 11,535 8,008
Realized and unrealized gains (losses) on
investments
Net realized gains on investments 544,408 533,424 10,984 -
Change in net unrealized appreciation or
depreciation of investments (772,385) (745,166) (27,219) -
---------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations $ (15,324) $ (18,632) $(4,700) $ 8,008
===============================================================
</TABLE>
See accompanying notes.
<TABLE>
<CAPTION>
Principal Life Insurance Company
Separate Account C
Statements of Changes in Net Assets
Years ended December 31, 1999 and 1998
Capital Government Money
Value Securities Market
Combined Division Division Division
---------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net assets at January 1, 1998 $3,416,522 $2,736,606 $401,865 $278,051
Increase (decrease) in net assets
Operations:
Net investment income 153,324 128,976 15,263 9,085
Net realized gains on investments 71,237 67,143 4,094 -
Change in net unrealized appreciation or
depreciation of investments 149,708 142,101 7,607 -
---------------------------------------------------------------
Net increase in net assets resulting from 374,269 338,220 26,964 9,085
operations
Changes from principal transactions:
Purchase payments, less sales charges, per
payment fees and applicable premium taxes 15,564 15,564 - -
Contract terminations (180,175) (149,064) (12,091) (19,020)
Annuity payments (30,931) (30,931) - -
---------------------------------------------------------------
Decrease in net assets from principal (195,542) (164,431) (12,091) (19,020)
transactions
---------------------------------------------------------------
Total increase (decrease) 178,727 173,789 14,873 (9,935)
---------------------------------------------------------------
Net assets at December 31, 1998 3,595,249 2,910,395 416,738 268,116
Increase (decrease) in net assets
Operations:
Net investment income 212,653 193,110 11,535 8,008
Net realized gains on investments 544,408 533,424 10,984 -
Change in net unrealized appreciation or
depreciation of investments (772,385) (745,166) (27,219) -
---------------------------------------------------------------
Net increase (decrease) in net assets (15,324) (18,632) (4,700) 8,008
resulting from operations
Changes from principal transactions:
Contract terminations (1,611,286) (1,445,078) (163,383) (2,825)
Annuity payments (17,743) (17,743) - -
---------------------------------------------------------------
Decrease in net assets from principal (1,629,029) (1,462,821) (163,383) (2,825)
transactions
---------------------------------------------------------------
Total increase (decrease) (1,644,353) (1,481,453) (168,083) 5,183
---------------------------------------------------------------
Net assets at December 31, 1999 $1,950,896 $1,428,942 $248,655 $273,299
===============================================================
</TABLE>
See accompanying notes.
Principal Life Insurance Company
Separate Account C
Notes to Financial Statements
December 31, 1999
1. Investment and Accounting Policies
Principal Life Insurance Company Separate Account C (Separate Account C) was
organized by Principal Life Insurance Company (Principal Life) in accordance
with the provisions of the Iowa Insurance Laws and is a part of the total
operations of Principal Life. The assets and liabilities of Separate Account C
are clearly identified and distinguished from the other assets and liabilities
of Principal Life, with the remaining aggregate value of units registered with
the Securities and Exchange Commission under the current registration statement
(but not the authorized number of units) limited to $10.6 million. As directed
by eligible contractholders, Separate Account C invests solely in shares
representing interests in a corresponding investment option. As of December 31,
1999, the contractholder investment options consisted of the accounts of the
following diversified open-end management investment company, organized by
Principal Life: Principal Variable Contracts Fund, Inc. - Capital Value Account,
Government Securities Account and Money Market Account.
Investments are stated at the closing net asset values per share on December 31,
1999. The average cost method is used to determine realized gains and losses on
investments. Dividends are taken into income on an accrual basis as of the
ex-dividend date.
Separate Account C supports the following variable annuity contracts of
Principal Life: Bankers Flexible Annuity Contracts and Pension Builder Plus
Contracts. Contributions to Separate Account C are no longer accepted.
Use of Estimates in the Preparation of Financial Statements
The preparation of Separate Account C's 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 financial statements and accompanying notes.
2. Expenses
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 charge 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. The mortality and expense risk and annual
administration charges amounted to $5,614 and $63, respectively, during the
year 1999.
Principal Life Insurance Company
Separate Account C
Notes to Financial Statements (continued)
2. Expenses (continued)
Pension Builder Plus Contracts - Mortality and expense risks assumed by
Principal Life are compensated for by a charge equivalent to an annual rate
of 1.4965% of the asset value of each contract. A contingent sales charge of
up to 7% may be deducted from withdrawals made during the first 10 years of a
contract, except for 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. The charges for mortality and expense risks, and annual
administration amounted to $21,378 and $2,475, respectively, during the year
1999. There were no contingent sales charges during 1999.
3. Federal Income Taxes
Operations of Separate Account C 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 Separate Account C.
4. Purchases and Sales of Investment Securities
The aggregate units and cost of purchases and proceeds from sales of investments
were as follows:
<TABLE>
<CAPTION>
For the year ended December 31, 1999
------------------------------------------------------------------
Units Amount Units Amount
Purchased Purchased Redeemed Redeemed
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Capital Value Division:
Bankers Flexible Annuity - $108,922 39,587 $1,247,865
Pension Builder Plus - 102,318 36,315 233,086
------------------------------------------------------------------
- 211,240 75,902 1,480,951
Government Securities Division:
Pension Builder Plus - 16,591 75,240 168,439
Money Market Division:
Pension Builder Plus - 12,808 1,787 7,625
------------------------------------------------------------------
- $240,639 152,929 $1,657,015
==================================================================
</TABLE>
Principal Life Insurance Company
Separate Account C
Notes to Financial Statements (continued)
4. Purchases and Sales of Investment Securities (continued)
<TABLE>
<CAPTION>
For the year ended December 31, 1998
------------------------------------------------------------------
Units Amount Units Amount
Purchased Purchased Redeemed Redeemed
------------------------------------------------------------------
<S><C> <C> <C> <C> <C>
Capital Value Division:
Bankers Flexible Annuity 583 $118,506 2,052 $ 66,973
Pension Builder Plus - 52,986 21,667 139,974
------------------------------------------------------------------
583 171,492 23,719 206,947
Government Securities Division:
Pension Builder Plus - 22,045 5,485 18,873
Money Market Division:
Pension Builder Plus - 14,110 10,246 24,045
------------------------------------------------------------------
583 $207,647 39,450 $249,865
==================================================================
</TABLE>
Purchases include reinvested dividends and capital gains. Mortality adjustments
are included in purchases or redemptions, as applicable.
Money Market purchases include transactions where investment allocations are not
known at the time of the deposit. Redemptions reflect subsequent allocations to
directed investment divisions.
5. Year 2000 Issues (Unaudited)
As of January 31, 2000, virtually all of the major technology systems, processes
and infrastructure, including those which rely on third party vendors used by
Principal Life and other service providers of Separate Account C appear to be
operating smoothly following the rollover to the Year 2000. Principal Life has
experienced no significant interruptions to normal business operations,
including the processing of customer account data and transactions. Principal
Life will continue its Year 2000 vigilance into early 2001.
Based on the performance of its major technology systems to date, ongoing plans
to deal with external relationships, and contingency plans, Principal Life
believes that in the worst case scenario it will experience, at most, isolated
and insignificant disruptions of business processes as a result of Year 2000
issues. Such disruptions are not expected to have a material effect on Separate
Account C's future results of operations, liquidity, or financial condition.Item
9. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
Inapplicable.
PART III
Item 10. Directors and Executive Officers of the Registrant
Inapplicable, the Registrant does not have any directors or executive
officers.
Item 11. Executive Compensation
Inapplicable, the Registrant does not have any directors or executive
officers.
Item 12. Security Ownership of Certain Beneficial Owners and Management
No person owns beneficially or of record the assets held by the
Depositor, Principal Life Insurance Company, in the Separate Account.
As contractholders of the variable contracts each contractholder has
one vote in the election of the Board of Directors at annual meetings
and upon other Principal Life Insurance Company matters, if any, where
a policyholder's vote is taken. The contractholders have the same
voting privilege as do all other policyholders of Principal Life
Insurance Company. An individual participant (certificateholder) does
not have a vote. There are no policyholders that are entitled to cast
more than 5% of the votes to be cast.
Item 13. Certain Relationships and Related Transactions
Inapplicable.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) Documents filed as part of this report:
1. The following financial statements are submitted herewith:
Statements of Net Assets -- December 31, 1999
Statements of Operations -- Year ended December 31, 1999
Statements of Changes in Net Assets -- Years ended December 31,
1999 and 1998.
Notes to Financial Statements -- December 31, 1999
2. Schedules - All other schedules for which provision is made in
the applicable accounting regulation of the Securities and
Exchange Commission are not required under the related
instructions or are inapplicable, and therefore have been
omitted.
3. Exhibits:
(20) Subsidiaries of the Registrant
Subsidiaries of the Registrant
The Registrant is a separate account of Principal Life Insurance Company. It has
no subsidiary. Principal Life Insurance Company, as the Depositor of the
Account, owns or controls, as of December 31, 1999, subsidiaries as follows:
I. Principal Holding Company
A. Organized in Iowa.
B. Depositor owns 100% of outstanding stock.
C. Subsidiaries of Principal Holding Company as of December 31,
1999, are as follows:
1. Patrician Associates, Inc. - a real estate development
company.
a. Organized in California.
b. Principal Holding Company owns 100% of outstanding
stock.
2. Petula Associates, Ltd. - a real estate development company.
a. Organized in Iowa.
b. Principal Holding Company owns 100% of outstanding
stock.
3. Principal Development Associates, Inc. - a real estate
development company.
a. Organized in California.
b. Principal Holding Company owns 100% of outstanding
stock.
4. Principal Spectrum Associates, Inc. - a real estate
development company.
a. Organized in California.
b. Principal Holding Company owns 100% of outstanding
stock.
5. Principal FC, Ltd. - a limited purpose investment
corporation.
a. Organized in Iowa.
b. Principal Holding Company owns 100% of outstanding
stock.
6. Equity FC, Ltd. - a general business corporation that
engages in investment transactions including limited
partnership and limited liability companies.
a. Organized in Iowa.
b. Principal Holding Company owns 100% of outstanding
stock.
7. Invista Capital Management, LLC - an investment advisor.
a. Organized in Delaware.
b. Principal Holding Company owns 100% of outstanding
stock.
c. Subsidiary of Invista Capital Management, LLC is as
of December 31, 1999, is as follows:
(1) Principal Capital - Invista Trust (a business
trust and private investment company).
(a) Organized in Delaware.
(b) Invista Capital Management, LLC owns 100% of
outstanding shares.
8. HealthRisk Resource Group, Inc. - a general business
corporation engaged in providing managed care expertise and
administrative services to provider organizations.
a. Organized in Iowa.
b. Principal Holding Company owns 100% of outstanding
stock.
9. Principal Residential Mortgage, Inc. - a full service
mortgage banking company.
a. Organized in Iowa.
b. Principal Holding Company owns 100% of outstanding
stock.
c. Susidiaries of Principal Residential Mortgage, Inc. as
of December 31, 1999, are as follows:
(1) Principal Wholesale Mortgage, Inc. - a brokerage
and servicer of residential mortgages.
(a) Organized in Iowa.
(b) Principal Residential Mortgage, Inc. owns
100% of outstanding stock.
(2) Principal Reinsurance Company - a mortgage
reinsurance company.
(a) Organized in Vermont.
(b) Principal Residential Mortgage, Inc. owns
100% of outstanding stock.
10. Principal Asset Markets, Inc. - a residential mortgage loan
broker - currently inactive.
a. Organized in Iowa.
b. Principal Holding Company owns 100% of outstanding
stock.
11. Principal Portfolio Services, Inc. - a corporation which
provides mortgage diligence services.
a. Organized in Iowa.
b. Principal Holding Company owns 100% of outstanding
stock.
(12) The Admar Group, Inc. - a national managed care service
organization that developes and manages preferred provider
organizations (PPO's).
a. Organized in Florida.
b. Principal Holding Company owns 100% of outstanding
stock.
c. Subsidiary of The Admar Group, Inc. as of December
31, 1999, is as follows:
(1) Admar Corporation - a managed care services
organization.
(a) Organized in California.
(b) The Admar Group, Inc. owns 100% of
outstanding stock.
13. The Principal Financial Group, Inc. - general business
corporation established in connection with corporate
identity - currently inactive.
a. Organized in Delaware.
b. Principal Holding Company owns 100% of outstanding
stock.
14. Principal Bank - a federally chartered direct delivery
savings bank.
a. Federally organized.
b. Principal Holding Company owns 100% of outstanding
stock.
15. Principal Health Care, Inc. - a developer and administrator
of health maintenance organizations HMO's.
a. Organized in Iowa.
b. Principal Holding Company owns 100% of outstanding
stock.
16. Dental-Net, Inc. - a managed dental care services
organization.
a. Organizaed in Arizona.
b. Principal Holding Company owns 100% of outstanding
stock.
c. Subsidiary of Dental-Net, Inc. as of December 31, 1999,
is as follows:
(1) Employers Dental Services, Inc. - an prepaid
dental plan organization.
(a) Orgnized in Arizona.
(b) Dental-Net, Inc. owns 100% outstanding stock.
17. Principal Financial Advisors, Inc. - a registered investment
advisor.
a. Organized in Iowa.
b. Principal Holding Company owns 100% of outstanding
stock.
18. Delaware Charter Guarantee & Trust Company - a corporation
that administers individual and group retirement plans.
a. Organized in Delaware.
b. Principal Holding Company currently owns 100% of
outstanding stock.
19. Principal Investors Corporation - general business
corporation - not currently active.
a. Organized in New Jersey.
b. Principal Holding Company currently owns 100% of
outstanding stock.
20. Principal Product Networks, Inc. - an insurance broker which
markets select products.
a. Organized in Delaware.
b. Principal Holding Company owns 100% of outstanding
stock.
21. Professional Pensions, Inc. - a corporation engaged in
sales, marketing and administration of group insurance plans
and third party administration for defined contribution
plans.
a. Organized in Conneticut.
b. Principal Holding Company owns 100% of outstanding
stock.
c. Subsidiaries of Professional Pensions, Inc. as of
December 31, 1999, are as follows:
(1) Benefit Fiduciary Corporation - a corporation
which services as a corporate trustee for
retirement funds.
(a) Organized in Rhode Island.
(b) The Professional Pensions, Inc. owns 100% of
outstanding stock.
(2) PPI Employee Benefit Corporation - a registered
broker dealer, limited to the sale of open-end
mutual funds and variable insurance products.
(a) Organized in Connecticut.
(b) The Professional Pensions, Inc. owns 100% of
outstanding stock.
(3) Boston Insurance Trust, Inc. - a corporation which
serves as trustee and administrator of insurance
trusts and arrangements.
(a) Organized in Massacusetts.
(b) The Professional Pensions, Inc. owns 100% of
outstanding stock.
22. Principal International, Inc. - a corporation engaged in
international business development.
a. Organized in Iowa.
b. Principal Holding Company owns 100% of outstanding
stock.
c. Subsidiaries of Principal International, Inc. as of
December 31, 1999, are as follows:
(1) Principal International Espana, S.A. de Seguros de
Vida - a life insurance company (individual
group), annuities and pension.
(a) Organized in Spain.
(b) Principal International, Inc. owns 99% of
outstanding stock and Principal Holding
Company owns 1% of outstanding stock.
(c) Subsidiary of Principal Internationl Espana,
S.A. de Seguros de Vida as of December 31,
1999, are as follows:
(1) Princor International Espana Sociedad
Anonima de Agencia de Seguros - a Spain
corporation) an insurance agency -
inactive.
(a) Organized in Spain.
(b) Principal International Espana,
S.A. de Seguros de Vida owns 99%
of outstanding stock and Principal
International, Inc. owns 1% of
outstanding stock.
(2) Principal Prevision, EPSV - a pension
entity.
(a) Organized in Spain.
(b) Principal International Espana,
S.A. de Seguros de Vida controlled
mutual entity, no shares issued.
(2) Zao Principal International - inactive.
(a) Organized in Russia.
(b) Principal International, Inc. owns 99% of
outstanding stock and Principal Holding
Company owns 1% of outstanding stock.
(3) Principal International Argentina, S.A. - an
Argentina services corporation.
(a) Organized in Argentina.
(b) Principal International, Inc. owns 97.03% of
outstanding stock and Enrique S. Braun owns
2.97% of outstanding stock
(c) Subsidiaries of International Argentina, S.A.
as of December 31, 1999, are as follows:
(1) Principal Retiro Compania de Seguros de
Retiro, S.A. - an Argentina
annuity/employee benefit company.
(a) Organized in Argentina.
(b) Principal Life Compania de Seguros
S.A. owns approximately 99% of
outstanding stock and Principal
International Argentina S.A. owns
approximately 1% of outstanding
stock.
(2) Principal Life Compania de Seguros, S.A.
- an Argentina life insurance company.
(a) Organized in Argentina.
(b) Principal International Argentina,
S.A. owns 99.9963% of outstanding
stock and Principal International,
Inc. owns .0037% of outstanding
stock.
(4) Principal International Asia Limited - operating
as a regional headquarters for Asia.
(a) Organized in Hong Kong.
(b) Principal International, Inc. owns 50% of
outstanding stock and Principal Holding
Company owns 50% of outstanding stock.
(c) Subsidiary of Principal International Asia
Limited as of December 31, 1999, is as
follows:
(1) BT Funds Management (Asia) Ltd. a
funds management company.
(a) Organized in Hong Kong.
(b) Principal International (Asia)
Limited owns 99% of outstanding
stock and Principal Asset
Management Company (Asia) Limited
owns approximately 1% of
outstanding stock.
(5) Principal Asset Management Company (Asia) Ltd.
- an asset management company.
(a) Organized in Hong Kong.
(b) Principal International, Inc. owns 99% of
outstanding stock and Principal International
(Asia) Limited owns approximately 1% of
outstanding stock.
(6) Principal Insurance Company (Hong Kong) Limited
- for group life and group pension products.
(a) Organized in Hong Kong.
(b) Principal International, Inc. owns 87.169% of
outstanding stock and Principal International
(Asia) Limited owns 11.84% of outstanding
stock.
(7) Principal Trust Company (Asia) Limited - an Asia
trust company.
(a) Organized in Hong Kong.
(b) Principal Holding Company owns 20% of
outstanding stock, Principal Residential
Mortgage, Inc. owns 20% of outstanding stock,
Principal International (Asia) Limited owns
20% of outstanding stock, Principal Insurance
Company (Hong Kong) Limited owns 20%
outstanding stock and Principal
International, Inc. owns approximately 20% of
outstanding stock.
(8) Principal International de Chile, S.A. - a Chilean
holding company.
(a) Organized in Chile.
(b) Principal International, Inc. owns 99%
outstanding stock and Principal Holding
Company owns 1% of outstanding stock.
(c) Subsidiaries of Principal International de
Chile, S.A. as of December 31, 1999, is as
follows:
(1) Principal Compania de Seguros de Vida,
S.A. - a corporation for group life and
supplemental health, individual
annuities.
(a) Organized in Chile.
(b) Principal International de Chile,
S.A. owns 99% of outstanding stock
Antonia Ortuzar Vicuna owns
approximately 1% of outstanding
stock.
(c) Subsidiary of Principal Compania de
Seguros de Vida Chile, S.A. as of
December 31, 1999, is as follows:
(1) Andueza & Principal Creditos
Hipotecarios S.A. - a
residential mortgage
operation.
(a) Organized in Chile.
(b) Principal Compania de
Seguros de Vida Chile
S.A. owns 60% of
outstanding stock.
(9) Principal Mexico Compania de Seguros, S.A. de C.V.
- a life insurance company (individual group),
personal accidents.
(a) Organized in Mexico.
(b) Principal International, Inc. owns 99% of
outstanding stock and Principal Holding
Company owns 1% of outstanding stock.
(10) Principal Afore S.A. de C.V. - a pension
corporation.
(a) Organized in Mexico.
(b) Principal International, Inc. owns 99% of
outstanding stock and Principal Holding
Company owns 1% of outstanding stock.
(c) Subsidiary of Afore S.A.de C.V. as of
December 31, 1999, is as follows:
(1) Siefore Principal S.A. de C.V. - a
mutual fund (separate account) company.
(a) Organized in Mexico.
(b) Principal Afore S.A. de C.V. owns
99% of outstanding stock and
Principal International, Inc. owns
1% outstanding stock.
(11) Principal Consulting (India) Private Limited - a
consulting company - inactive.
(a) Organized in India.
(b) No shares issued.
(12) Principal Pensiones, S.A. de C.V. - single premium
annuity company.
(a) Organized in Mexico.
(b) Principal International, Inc. owns
approximatly 99% of outstanding stock and
Principal Holding Company owns approximately
1% of outstanding stock.
II. Principal Development Investors, LLC - a limited liability company.
A. Organized in Delaware.
B. Depositor owns 100% of the outstanding stock.
III. Principal Capital Management, LLC - a limited liability company that
provides investment management services.
A. Organized in Delaware.
B. Depositor owns 100% of the outstanding stock.
C. Subsidiaries of Principal Capital Management, LLC as of December
31, 1999, are as follows:
1. Principal Enterprise Capital, LLC - a limited liability
company.
(a) Organized in Delaware.
(b) Principal Capital Management, LLC owns 100% outstanding
stock.
2. Principal Commercial Acceptance, LLC - a Delaware LLC.
(a) Organized in Delaware.
(b) Principal Capital Management, LLC owns 100% outstanding
stock.
3. Principal Real Estate Investors, LLC - a regsitered
investment advisor.
(a) Organized in Delaware.
(b) Principal Capital Management, LLC owns 100% outstanding
stock.
4. Principal Commercial Funding, LLC - a correspondent lender
and service provider for loans.
(a) Organized in Delaware.
(b) Principal Capital Management, LLC owns 100% outstanding
stock.
5. Principal Real Estate Services, LLC - a limited liablity
company.
(a) Organized in Delaware.
(b) Principal Capital Management, LLC owns 100% outstanding
stock.
6. Principal Structured Investments, LLC - a limited liability
company that provides product development administration,
marketing and asset management services.
(a) Organized in Delaware.
(b) Principal Capital Management, LLC owns 100% outstanding
stock.
IV. Principal Net Lease Investors, LLC - a limited liability company which
operates as a buyer and seller of net leased investments.
A. Organized in Delaware.
B. Depositor owns 100% of the outstanding stock.
V. PT Asuransi Jiwa Principal Indonesia - a life insurance company which
offers group and individual products.
(a) Organized in Indonsesia.
(b) Principal Life Insurance Company owns approximately 90% of
outstanding stock and PT megah Cipta Persada Mandiri owns
approximately 10% of outstanding stock.
(c) Subsidiaries of PT Asuransi Jiwa Principal Indonesia as of
December 31, 1999, are as follows:
(1) PT Jasa Principal Indonesia - a defined benefit pension
company.
(a) Organized in Indonesia.
(b) PT Asuransi Jiwa Principal Indonesia owns approximately
90% of outstanding stock and PT Megah Cipta Persada
Indonesia owns approximately 10% of outstanding stock.
(2) PT Principal Capital Management Indonesia - an asset
management company.
(a) Organized in Indonesia.
(b) PT Asuransi Jiwa Principal Indonesia owns approximately
90% of outstanding stock and PT Megah Cipta Persada
Indonesia owns approximately 10% of outstanding stock.
(3) Dana Pensiun Lembaga Keuangan Principal Indonesia - a
pension company.
(a) Organized in Indonesia.
(b) PT Asuransi Jiwa Principal Indonesia controlled entity,
no shares issued.
VI. PFG Do Brasil LTDA - a holding company (pension).
(a) Organized in Brazil.
(b) Principal Financial Services, Inc. owns 100% of outstanding
stock.
(c) Subsidiaries of PFG Do Brasil LTDA as of December 31, 1999, is as
follows:
(1) BrasilPrev Previdencia Privada S.A. - an individual pension
plan company.
(a) Organized in Brazil.
(b) PFG Do Brasil LTDA owns approximately 42% of
outstanding Stock.
The Depositor's investment in its subsidiaries, which in turn includes the
subsidiary's investment in its subsidiaries, is included in the financial
statements of the Depositor.
SIGNATURES
Pursuant to the requirements of Section 15(d) of the Securities Exchange
Act of 1934, Principal Life Insurance Company has duly caused this report to be
signed on behalf of Principal Life Insurance Company Separate Account C by the
undersigned thereto duly authorized in the city of Des Moines and State of Iowa,
on the 15th day of March, 2000.
PRINCIPAL LIFE INSURANCE COMPANY SEPARATE ACCOUNT C
By PRINCIPAL LIFE INSURANCE COMPANY
/s/ J. B. Griswell
By ------------------------------------------------------
J. B. Griswell, President and Chief Executive Officer
Attest:
/s/ Joyce N. Hoffman
- ---------------------------------------
Joyce N. Hoffman
Vice President and Corporate Secretary
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant in the capacities with Principal Life Insurance Company and on the
dates indicated.
Signature Title Date
/s/ J. B. Griswell President and March 15, 2000
- --------------------- Chief Executive Officer
J. B. Griswell
/s/ D. C. Cunningham Vice President and March 15, 2000
- ---------------------- Controller (Principal
D. C. Cunningham Accounting Officer)
/s/ M. H. Gersie Executive Vice March 15, 2000
- ---------------------- President (Chief
M. H. Gersie Financial Officer)
(B. J. Bernard)* Director March 15, 2000
- ----------------------
B. J. Bernard
(J. Carter-Miller)* Director March 15, 2000
- ----------------------
J. Carter-Miller
(D. J. Drury)* Director March 15, 2000
- ----------------------
D. J. Drury
(C. D. Gelatt)* Director March 15, 2000
- ----------------------
C. D. Gelatt
(G. D. Hurd)* Director March 15, 2000
- ----------------------
G. D. Hurd
(C. S. Johnson)* Director March 15, 2000
- ----------------------
C. S. Johnson
(W. T. Kerr)* Director March 15, 2000
- ----------------------
W. T. Kerr
(L. Liu)* Director March 15, 2000
- ----------------------
L. Liu
(V. H. Loewenstein)* Director March 15, 2000
- ----------------------
V. H. Loewenstein
(R. D. Pearson)* Director March 15, 2000
- ----------------------
R. D. Pearson
(F. F. Pena)* Director March 15, 2000
- ----------------------
F. F. Pena
(J. R. Price, Jr.)* Director March 15, 2000
- ----------------------
J. R. Price, Jr.
(D. M. Stewart)* Director March 15, 2000
- ----------------------
D. M. Stewart
(E. E. Tallett)* Director March 15, 2000
- ----------------------
E. E. Tallett
(F. W. Weitz)* Director March 15, 2000
- ----------------------
F. W. Weitz
/s/ J. B. Griswell
*By -------------------------------------
J. B. Griswell
President and Chief Executive Officer
Pursuant to Powers of Attorney
Previously Filed or Included Herein
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of Principal Life
Insurance Company, an Iowa corporation (the "Company"), hereby constitutes and
appoints D. J. Drury, J. B. Griswell, G. R. Narber and J. N. Hoffman, and each
of them (with full power to each of them to act alone), the undersigned's true
and lawful attorney-in-fact and agent, with full power of substitution to each,
for and on behalf and in the name, place and stead of the undersigned, to
execute and file any of the documents referred to below relating to registration
under the Securities Act of 1933 with respect to variable annuity contracts,
with premiums received in connection with such contracts held in the Principal
Life Insurance Company Separate Account C on Form N-4 or other forms under the
Securities Act of 1933, and any and all amendments thereto and reports
thereunder with all exhibits and all instruments necessary or appropriate in
connection therewith, each of said attorneys-in-fact and agents and his or their
substitutes being empowered to act with or without the others or other, and to
have full power and authority to do or cause to be done in the name and on
behalf of the undersigned each and every act and thing requisite and necessary
or appropriate with respect thereto to be done in and about the premises in
order to effectuate the same, as fully to all intents and purposes as the
undersigned might or could do in person; hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, may do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned director has hereunto set his hand this 15th
day of March, 2000.
/s/ F. F. Pena
-------------------------------
F. F. Pena
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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