# EDGAR Filing Document

**Accession Number:** 0000009712
**File Stem:** 0001104659-26-051759
**Filing Date:** 2026-4
**Character Count:** 491762
**Document Hash:** e6877ff320dfab19ed2439048b52e586
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001104659-26-051759.hdr.sgml**: 20260429

**ACCESSION NUMBER**: 0001104659-26-051759

**CONFORMED SUBMISSION TYPE**: N-VPFS/A

**PUBLIC DOCUMENT COUNT**: 1

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260429

**DATE AS OF CHANGE**: 20260429

**EFFECTIVENESS DATE**: 20260429

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** PRINCIPAL LIFE INSURANCE CO
- **CENTRAL INDEX KEY:** 0000009712

**ORGANIZATION NAME:**
- **EIN:** 420127290

**FILING VALUES:**
- **FORM TYPE:** N-VPFS/A
- **SEC ACT:** 1940 Act
- **SEC FILE NUMBER:** 811-99999
- **FILM NUMBER:** 26918104

**BUSINESS ADDRESS:**
- **STREET 1:** 711 HIGH STREET
- **CITY:** DES MOINES
- **STATE:** IA
- **ZIP:** 50392-0300
- **BUSINESS PHONE:** 5152475111

**MAIL ADDRESS:**
- **STREET 1:** 711 HIGH STREET
- **CITY:** DES MOINES
- **STATE:** IA
- **ZIP:** 50392-0300

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** PRINCIPAL MUTUAL LIFE INSURANCE CO
- **DATE OF NAME CHANGE:** 19920929

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** BANKERS LIFE CO
- **DATE OF NAME CHANGE:** 19600201

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** BANKERS LIFE ASSOCIATION
- **DATE OF NAME CHANGE:** 19600201

## Series and Classes Contracts Data

### PRINCIPAL LIFE INSURANCE CO (Series ID: S000089861)

| Class ID   | Class Name                   | Ticker Symbol   |
|:---|:---|:---|
| C000256688 | Principal Strategic Outcomes |  |
| C000256689 | Principal Strategic Income   |  |

Consolidated Financial Statements

Principal Life Insurance Company

Years Ended December 31, 2025, 2024 and 2023

Consolidated Financial Statements

Years Ended December 31, 2025, 2024 and 2023

**Contents**

Audited Consolidated Financial Statements

---

| | |
|:---|:---|
| Consolidated Statements of Financial Position | 1 |
| Consolidated Statements of Operations | 2 |
| Consolidated Statements of Comprehensive Income | 3 |
| Consolidated Statements of Stockholder's Equity | 4 |
| Consolidated Statements of Cash Flows | 5 |
| Notes to Consolidated Financial Statements | 6 |

---

**Report of Independent Registered Public Accounting Firm**

The Board of Directors and Stockholder of Principal Life Insurance Company

**Opinion on the Financial Statements**

We have audited the accompanying consolidated statements of financial position of Principal Life Insurance Company (the Company) as of December 31, 2025 and 2024, 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, 2025, and the related notes and schedules (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

**Critical Audit Matter** 

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

---

| | |
|:---|:---|
|  | &nbsp;&nbsp; ***Liability for future policy benefits and claims***<br>|
| &nbsp;&nbsp;*Description of the Matter* | &nbsp;&nbsp; At December 31, 2025, future policy benefits and claims related to traditional and limited payment long-duration contracts totaled $47.4 billion.<br>The future policy benefits liability related to these products is based on estimates of how much the Company will need to pay for future benefits and the amount of fees to be collected from policyholders for these policy features. As described in Note 11, there is uncertainty inherent in estimating this liability because there is a significant amount of management judgment involved in developing certain assumptions that impact the liability balance, which include mortality rates, and lapse termination rates.<br>Auditing the valuation of future policy benefits liabilities related to these products was complex and required the involvement of our actuarial specialist due to the high degree of judgment used by management in setting the assumptions used in the estimate of the future policy benefits liability related to these products.<br>|

---

---

| | |
|:---|:---|
| &nbsp;&nbsp;*How We Addressed the Matter in Our Audit* | &nbsp;&nbsp; We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the future policy benefits liability estimation processes, including among others, controls related to the review and approval processes that management has in place for the assumptions used in the valuation of the future policy benefits liability. This included testing controls related to management's evaluation of the need to update assumptions based on the comparison of actual company experience to previous assumptions.<br>We involved actuarial specialists to assist with our audit procedures which included, among others, an evaluation of the methodology applied by management with those methods used in prior periods. To assess the significant assumptions used by management, we compared the significant assumptions noted above to historical experience, industry data or management's estimates of prospective changes in these assumptions. In addition, we performed an independent recalculation of cash flows related to the future policy benefit reserves for a sample of cohorts or contracts which we compared to the actuarial model used by management.<br>|

---

/s/ Ernst & Young LLP

We have served as the Company's auditor since 1967.

Des Moines, Iowa

March 26, 2026

---

| | | |
|:---|:---|:---|
| **Principal Life Insurance Company** | **Principal Life Insurance Company** | **Principal Life Insurance Company** |
| **Consolidated Statements of Financial Position** | **Consolidated Statements of Financial Position** | **Consolidated Statements of Financial Position** |
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
|  | *(in millions)* | *(in millions)* |
| **Assets** |  |  |
| Fixed maturities, available-for-sale (1) | $**70292.3** | $65260.4 |
| Fixed maturities, trading (2025 and 2024 include $34.7 million and $74.7 million related to consolidated variable interest entities) | **1020.5** | 890.7 |
| Equity securities | **548.9** | 804.6 |
| Mortgage loans (2025 and 2024 include $726.5 million and $944.5 million related to consolidated variable interest entities and $0.0 million and $140.6 million measured at fair value under the fair value option) | **20096.4** | 19657.9 |
| Real estate (2025 and 2024 include $819.4 million and $781.8 million related to consolidated variable interest entities) | **2408.4** | 2463.7 |
| Policy loans | **850.5** | 852.4 |
| Other investments (2025 and 2024 include $186.7 million and $149.6 million related to consolidated variable interest entities and $167.1 million and $129.0 million measured at fair value under the fair value option) | **6726.5** | 5274.9 |
| &nbsp;&nbsp;&nbsp;Total investments | **101943.5** | 95204.6 |
| Cash and cash equivalents (2025 and 2024 include $65.5 million and $58.0 million related to consolidated variable interest entities) | **3430.6** | 3327.4 |
| Accrued investment income (2025 and 2024 include $34.0 million and $11.9 million related to consolidated variable interest entities) | **857.2** | 817.0 |
| Reinsurance recoverable and deposit receivable | **23886.8** | 23596.3 |
| Premiums due and other receivables | **3933.0** | 3883.2 |
| Deferred acquisition costs | **3940.7** | 3925.3 |
| Market risk benefit asset | **197.1** | 199.5 |
| Property and equipment | **592.7** | 639.4 |
| Goodwill | **59.5** | 59.5 |
| Other intangibles | **25.8** | 26.7 |
| Separate account assets | **149968.5** | 138860.2 |
| Other assets | **537.0** | 505.8 |
| &nbsp;&nbsp;&nbsp;Total assets | $**289372.4** | $271044.9 |
| **Liabilities** |  |  |
| Contractholder funds | $**45298.2** | $43008.5 |
| Future policy benefits and claims | **47395.8** | 44303.3 |
| Market risk benefit liability | **66.9** | 62.1 |
| Other policyholder funds | **940.6** | 961.0 |
| Short-term debt (2025 and 2024 include $0.0 million and $119.0 million related to consolidated variable interest entities) | **—** | 119.0 |
| Long-term debt | **2.9** | 24.7 |
| Deferred income taxes | **1695.7** | 1622.4 |
| Separate account liabilities | **149968.5** | 138860.2 |
| Funds withheld payable | **22910.0** | 22497.9 |
| Other liabilities (2025 and 2024 include $53.0 million and $89.3 million related to consolidated variable interest entities) | **11791.8** | 10882.2 |
| Total liabilities | **280070.4** | 262341.3 |
| Redeemable noncontrolling interest | **—** | 5.0 |
| **Stockholder's equity** |  |  |
| Common stock, par value $1.00 per share; 5,000,000 shares authorized; 2,500,000 shares issued and outstanding (wholly owned indirectly by Principal Financial Group, Inc.) | **2.5** | 2.5 |
| Additional paid-in capital | **6311.4** | 6316.9 |
| Retained earnings | **4973.0** | 5265.6 |
| Accumulated other comprehensive loss | **(1994.1)** | (2891.4) |
| &nbsp;&nbsp;&nbsp;Total stockholder's equity attributable to Principal Life Insurance Company | **9292.8** | 8693.6 |
| Noncontrolling interest | **9.2** | 5.0 |
| &nbsp;&nbsp;&nbsp;Total stockholder's equity | **9302.0** | 8698.6 |
| &nbsp;&nbsp;&nbsp;Total liabilities and stockholder's equity | $**289372.4** | $271044.9 |

---

(1) See Note 5, Investments, for further details relating to the amortized cost of fixed maturities, available-for-sale.

See accompanying notes.

---

| | | | |
|:---|:---|:---|:---|
| **Principal Life Insurance Company** | **Principal Life Insurance Company** | **Principal Life Insurance Company** | **Principal Life Insurance Company** |
| **Consolidated Statements of Operations** | **Consolidated Statements of Operations** | **Consolidated Statements of Operations** | **Consolidated Statements of Operations** |
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| **Revenues** |  |  |  |
| Premiums and other considerations | $**5786.9** | $6091.2 | $6396.7 |
| Fees and other revenues | **2354.2** | 2334.0 | 2204.7 |
| Net investment income | **3730.0** | 3534.4 | 3285.5 |
| Net realized capital losses (1) | **(54.3)** | (152.2) | (154.7) |
| Net realized capital gains on funds withheld assets (1) | **29.4** | 86.0 | 161.8 |
| Change in fair value of funds withheld embedded derivative | **(473.4)** | 579.9 | (1326.7) |
| &nbsp;&nbsp;&nbsp;Total revenues | **11372.8** | 12473.3 | 10567.3 |
| **Expenses** |  |  |  |
| Benefits, claims and settlement expenses | **7128.4** | 6832.4 | 7226.2 |
| Liability for future policy benefits remeasurement (gain) loss | **48.5** | 661.2 | (52.5) |
| Market risk benefit remeasurement loss | **63.1** | 50.6 | 33.7 |
| Dividends to policyholders | **91.7** | 99.9 | 89.2 |
| Operating expenses | **3242.6** | 3236.0 | 3121.5 |
| &nbsp;&nbsp;&nbsp;Total expenses | **10574.3** | 10880.1 | 10418.1 |
| Income before income taxes | **798.5** | 1593.2 | 149.2 |
| Income taxes (benefits) | **31.7** | 224.3 | (87.4) |
| Net income | **766.8** | 1368.9 | 236.6 |
| Net income attributable to noncontrolling interest | **0.8** | 12.0 | 19.6 |
| Net income attributable to Principal Life Insurance Company | $**766.0** | $1356.9 | $217.0 |

---

(1) Includes realized and unrealized gains (losses). See Note 5, Investments, for further details.

*See accompanying notes.*

---

| | | | |
|:---|:---|:---|:---|
| **Principal Life Insurance Company** | **Principal Life Insurance Company** | **Principal Life Insurance Company** | **Principal Life Insurance Company** |
| **Consolidated Statements of Comprehensive Income** | **Consolidated Statements of Comprehensive Income** | **Consolidated Statements of Comprehensive Income** | **Consolidated Statements of Comprehensive Income** |
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| Net income | $**766.8** | $1368.9 | $236.6 |
| Other comprehensive income, net: |  |  |  |
| &nbsp;&nbsp;&nbsp;Net unrealized gains (losses) on available-for-sale securities | **1435.4** | (679.2) | 1909.3 |
| &nbsp;&nbsp;&nbsp;Net unrealized gains (losses) on derivative instruments | **(83.8)** | 53.9 | (41.8) |
| &nbsp;&nbsp;&nbsp;Liability for future policy benefits discount rate remeasurement gain (loss) | **(458.4)** | 868.6 | (392.2) |
| &nbsp;&nbsp;&nbsp;Market risk benefit nonperformance risk remeasurement gain (loss) | **1.6** | (8.9) | (31.1) |
| &nbsp;&nbsp;&nbsp;Net unrecognized postretirement benefit obligation | **2.5** | 2.9 | 1.8 |
| Other comprehensive income | **897.3** | 237.3 | 1446.0 |
| Comprehensive income | **1664.1** | 1606.2 | 1682.6 |
| Comprehensive income attributable to noncontrolling interest | **0.8** | 12.0 | 19.6 |
| Comprehensive income attributable to Principal Life Insurance Company | $**1663.3** | $1594.2 | $1663.0 |

---

*See accompanying notes.*

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Principal Life Insurance Company** | **Principal Life Insurance Company** | **Principal Life Insurance Company** | **Principal Life Insurance Company** | **Principal Life Insurance Company** | **Principal Life Insurance Company** | **Principal Life Insurance Company** |
| **Consolidated Statements of Stockholder's Equity** | **Consolidated Statements of Stockholder's Equity** | **Consolidated Statements of Stockholder's Equity** | **Consolidated Statements of Stockholder's Equity** | **Consolidated Statements of Stockholder's Equity** | **Consolidated Statements of Stockholder's Equity** | **Consolidated Statements of Stockholder's Equity** |
|  | | | | **Accumulated** | | |
|  | | **Additional** | | **other** | | **Total** |
|  | **Common** | **paid-in** | **Retained** | **comprehensive** | **Noncontrolling** | **stockholder's** |
|  | **stock** | **capital** | **earnings** | **loss** | **interest** | **equity** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| **Balances as of January 1, 2023** | $2.5 | $6331.1 | $5907.7 | $(4574.7) | $3.8 | $7670.4 |
| Capital distributions to parent |  | (39.0) |  |  |  | (39.0) |
| Stock-based compensation |  | 27.9 | (2.7) |  |  | 25.2 |
| Dividends to parent |  |  | (1200.0) |  |  | (1200.0) |
| Distributions to noncontrolling interest |  |  |  |  | (23.2) | (23.2) |
| Contributions from noncontrolling interest |  |  |  |  | 7.6 | 7.6 |
| Net income |  |  | 217.0 |  | 19.6 | 236.6 |
| Other comprehensive income |  |  |  | 1446.0 |  | 1446.0 |
| **Balances as of December 31, 2023** | 2.5 | 6320.0 | 4922.0 | (3128.7) | 7.8 | 8123.6 |
| Capital distributions to parent |  | (35.4) |  |  |  | (35.4) |
| Stock-based compensation |  | 32.3 | (3.3) |  |  | 29.0 |
| Dividends to parent |  |  | (1010.0) |  |  | (1010.0) |
| Distributions to noncontrolling interest |  |  |  |  | (18.7) | (18.7) |
| Contributions from noncontrolling interest |  |  |  |  | 7.3 | 7.3 |
| Noncontrolling interest of deconsolidated entities |  |  |  |  | (3.0) | (3.0) |
| Net income |  |  | 1356.9 |  | 11.6 | 1368.5 |
| Other comprehensive income |  |  |  | 237.3 |  | 237.3 |
| **Balances as of December 31, 2024** | 2.5 | 6316.9 | 5265.6 | (2891.4) | 5.0 | 8698.6 |
| Capital distributions to parent | **—** | **(43.0)** | **—** | **—** | **—** | **(43.0)** |
| Stock-based compensation | **—** | **37.5** | **(3.6)** | **—** | **—** | **33.9** |
| Dividends to parent | **—** | **—** | **(1055.0)** | **—** | **—** | **(1055.0)** |
| Distributions to noncontrolling interest | **—** | **—** | **—** | **—** | **(1.6)** | **(1.6)** |
| Contributions from noncontrolling interest | **—** | **—** | **—** | **—** | **5.2** | **5.2** |
| Net income | **—** | **—** | **766.0** | **—** | **0.6** | **766.6** |
| Other comprehensive income | **—** | **—** | **—** | **897.3** | **—** | **897.3** |
| **Balances as of December 31, 2025** | $**2.5** | $**6311.4** | $**4973.0** | $**(1994.1)** | $**9.2** | $**9302.0** |

---

*See accompanying notes.*

---

| | | | |
|:---|:---|:---|:---|
| **Principal Life Insurance Company** | **Principal Life Insurance Company** | **Principal Life Insurance Company** | **Principal Life Insurance Company** |
| **Consolidated Statements of Cash Flows** | **Consolidated Statements of Cash Flows** | **Consolidated Statements of Cash Flows** | **Consolidated Statements of Cash Flows** |
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| **Operating activities** |  |  |  |
| Net income | $**766.8** | $1368.9 | $236.6 |
| Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |
| &nbsp;&nbsp;&nbsp;Net realized capital losses | **54.3** | 152.2 | 154.7 |
| &nbsp;&nbsp;&nbsp;Net realized capital gains on funds withheld assets | **(29.4)** | (86.0) | (161.8) |
| &nbsp;&nbsp;&nbsp;Change in fair value of funds withheld embedded derivative | **473.4** | (579.9) | 1326.7 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization expense | **134.6** | 145.0 | 151.2 |
| &nbsp;&nbsp;&nbsp;Amortization of deferred acquisition costs and contract costs | **395.4** | 395.0 | 396.3 |
| &nbsp;&nbsp;&nbsp;Additions to deferred acquisition costs and contract costs | **(414.2)** | (396.7) | (384.9) |
| &nbsp;&nbsp;&nbsp;Amortization of reinsurance loss | **106.6** | 642.3 | 20.4 |
| &nbsp;&nbsp;&nbsp;Market risk benefit remeasurement loss | **63.1** | 50.6 | 33.7 |
| &nbsp;&nbsp;&nbsp;Stock-based compensation | **33.9** | 29.0 | 25.1 |
| &nbsp;&nbsp;&nbsp;Income from equity method investments, net of dividends received | **(140.4)** | (33.2) | (27.5) |
| Changes in: |  |  |  |
| &nbsp;&nbsp;&nbsp;Accrued investment income | **(41.2)** | (43.0) | (45.5) |
| &nbsp;&nbsp;&nbsp;Net cash flows for trading securities and equity securities with operating intent | **(197.2)** | (8.8) | (60.0) |
| &nbsp;&nbsp;&nbsp;Premiums due and other receivables | **(116.3)** | 4.4 | (205.8) |
| &nbsp;&nbsp;&nbsp;Contractholder and policyholder liabilities and dividends | **3005.5** | 3028.5 | 3513.3 |
| &nbsp;&nbsp;&nbsp;Current and deferred income taxes (benefits) | **(197.5)** | 95.2 | (191.2) |
| &nbsp;&nbsp;&nbsp;Real estate acquired through operating activities | **(4.2)** | (82.4) | (130.8) |
| &nbsp;&nbsp;&nbsp;Real estate sold through operating activities | **—** | 130.3 | 164.8 |
| &nbsp;&nbsp;&nbsp;Funds withheld, net of reinsurance recoverable and deposit receivable | **8.9** | (96.2) | (338.3) |
| &nbsp;&nbsp;&nbsp;Other assets and liabilities | **206.2** | (154.6) | 176.1 |
| Other | **233.6** | 219.8 | 255.9 |
| Net adjustments | **3575.1** | 3411.5 | 4672.4 |
| Net cash provided by operating activities | **4341.9** | 4780.4 | 4909.0 |
| **Investing activities** |  |  |  |
| Fixed maturities available-for-sale and equity securities with intent to hold: |  |  |  |
| &nbsp;&nbsp;&nbsp;Purchases | **(15233.2)** | (14221.2) | (10704.4) |
| &nbsp;&nbsp;&nbsp;Sales | **4241.7** | 2952.1 | 4871.3 |
| &nbsp;&nbsp;&nbsp;Maturities | **7758.5** | 7134.2 | 4957.2 |
| Mortgage loans acquired or originated | **(3815.1)** | (2415.8) | (1998.7) |
| Mortgage loans sold or repaid | **3154.3** | 1802.2 | 2011.4 |
| Real estate acquired | **(135.5)** | (167.8) | (187.5) |
| Real estate sold | **201.0** | 125.8 | 130.8 |
| Net purchases of property and equipment | **(55.7)** | (43.3) | (41.1) |
| Purchase of business or interests in subsidiaries, net of cash acquired | **—** | (27.1) |  |
| Net change in other investments | **(689.1)** | (740.8) | (781.8) |
| Net cash used in investing activities | **(4573.1)** | (5601.7) | (1742.8) |
| **Financing activities** |  |  |  |
| Payments for financing element derivatives | **(41.9)** | (43.1) | (42.1) |
| Dividends paid to parent | **(1055.0)** | (1010.0) | (1200.0) |
| Distributions to parent | **(43.0)** | (35.4) | (39.0) |
| Issuance of long-term debt | **—** | 21.8 |  |
| Principal repayments of long-term debt | **(0.1)** | (0.1) | (64.0) |
| Net proceeds from short-term borrowings | **—** | 119.0 |  |
| Investment contract deposits | **11488.3** | 11745.4 | 8152.2 |
| Investment contract withdrawals | **(10456.8)** | (10858.5) | (9326.3) |
| Net increase (decrease) in banking operation deposits | **442.8** | 571.2 | (338.6) |
| Other | **0.1** | 0.4 | 0.3 |
| Net cash provided by (used in) financing activities | **334.4** | 510.7 | (2857.5) |
| Net increase (decrease) in cash and cash equivalents | **103.2** | (310.6) | 308.7 |
| Cash and cash equivalents at beginning of period | **3327.4** | 3638.0 | 3329.3 |
| Cash and cash equivalents at end of period | $**3430.6** | $3327.4 | $3638.0 |
| **Supplemental information:** |  |  |  |
| Cash paid for interest | $**0.3** | $0.1 | $1.3 |
| Cash paid for income taxes (1) | **173.9** | 70.9 | 63.1 |
| **Supplemental disclosure of non-cash activities:** |  |  |  |
| Assets received in kind from pension risk transfer transactions | $**152.7** | $405.0 | $— |
| Changes resulting from deconsolidation of an investment:  |  |  |  |
| &nbsp;&nbsp;&nbsp;Decrease in mortgage loans | **(140.6)** |  |  |
| &nbsp;&nbsp;&nbsp;Decrease in short-term debt | **54.0** |  |  |
| &nbsp;&nbsp;&nbsp;Decrease in long-term debt | **86.7** |  |  |
| Asset changes resulting from deconsolidation of residential whole loan securitizations: |  |  |  |
| &nbsp;&nbsp;&nbsp;Decrease in mortgage loans | **—** |  | (389.7) |
| &nbsp;&nbsp;&nbsp;Increase in fixed maturities, available-for-sale | **—** |  | 286.2 |
| &nbsp;&nbsp;&nbsp;Increase in fixed maturities, trading | **—** |  | 10.8 |

---

(1) See Note 15, Income Taxes, for further details.

*See accompanying notes.*

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements<br> December 31, 2025**

**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 and insurance in the U.S. We are a direct wholly owned subsidiary of Principal Financial Services, Inc. ("PFS"), 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. 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.

Uncertainties may impact our business, results of operations, financial condition and liquidity. See "Use of Estimates in the Preparation of Financial Statements" for additional details. Our estimates and assumptions could change in the future. Our results of operations and financial condition may also be impacted by other uncertainties including evolving regulatory, legislative and standard-setter accounting interpretations and guidance.

Certain reclassifications have been made to prior periods to conform to the current presentation of our policyholder account balance disclosures, which have been revised to enhance transparency regarding indexed crediting impacts and their relationship to embedded derivative and host contract adjustments. See Note 10, Contractholder Funds.

We evaluated subsequent events through March 26, 2026, which was the date our consolidated financial statements were issued.

**Consolidation**

We have relationships with various special purpose entities and other legal entities that must be evaluated to determine if the entities meet the criteria of a VIE or a voting interest entity ("VOE"). This assessment is performed by reviewing contractual, ownership and other rights, including involvement of related parties, and requires use of judgment. First, we determine if we hold a variable interest in an entity by assessing if we have the right to receive expected losses and expected residual returns of the entity. If we hold a variable interest, then the entity is assessed to determine if it is a VIE. An entity is a VIE if the equity at risk is not sufficient to support its activities, if the equity holders lack a controlling financial interest or if the entity is structured with non-substantive voting rights. In addition to the previous criteria, if the entity is a limited partnership or similar entity, it is a VIE if the limited partners do not have the power to direct the entity's most significant activities through substantive kick-out rights or participating rights. A VIE is evaluated to determine the primary beneficiary. The primary beneficiary of a VIE is 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. When we are the primary beneficiary, we are required to consolidate the entity in our financial statements. We reassess our involvement with VIEs on a quarterly basis. For further information about VIEs, refer to Note 4, Variable Interest Entities.

If an entity is not a VIE, it is considered a VOE. VOEs are generally consolidated if we own a greater than 50% voting interest. If we determine our involvement in an entity no longer meets the requirements for consolidation under either the VIE or VOE models, the entity is deconsolidated. Entities in which we have 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.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

**Recent Accounting Pronouncements**

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp; **Description** | &nbsp;&nbsp; **Date of adoption** | &nbsp;&nbsp;**Effect on our consolidated financial statements or other significant matters** |
| &nbsp;&nbsp;***Standards not yet adopted:*** |  |  |
| &nbsp;&nbsp; **Accounting for government grants received by a business entity** <br> This authoritative guidance provides specific guidance related to the recognition, measurement and presentation of government grants.<br>| &nbsp;&nbsp;January 1, 2029 | &nbsp;&nbsp; We are currently evaluating the impact this guidance will have on our consolidated financial statements.<br>|
| &nbsp;&nbsp; **Accounting for internal-use software** <br> This authoritative guidance aligns the accounting for internal-use software with the method used to develop the software, which will lead to consistency in determining when software capitalization should begin.<br>| &nbsp;&nbsp;January 1, 2028 | &nbsp;&nbsp;We are currently evaluating the impact this guidance will have on our consolidated financial statements. |
| &nbsp;&nbsp; **Disaggregation of income statement expenses** <br> This authoritative guidance expands the disclosures about a public entity's expenses and addresses requests for more granular information about the types of expenses in commonly presented expense categories.<br>| &nbsp;&nbsp;December 31, 2027 | &nbsp;&nbsp;We are currently evaluating the impact this guidance will have on our notes to the consolidated financial statements. |
| &nbsp;&nbsp; **Credit losses on purchased loans** <br> This authoritative guidance expands application of the gross up method for credit losses from purchased financial assets with credit deterioration to certain acquired loans categorized as purchased seasoned loans.<br>| &nbsp;&nbsp;January 1, 2027 | &nbsp;&nbsp; We are currently evaluating the impact this guidance will have on our consolidated financial statements.<br>|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Hedge accounting improvements** <br> This authoritative guidance aims to more closely align financial reporting with the economics of an entity's risk management activities by expanding and refining the hedge accounting guidance in five key areas: <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Similar risk assessment for cash flow hedges <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Hedging forecasted interest payments on choose-your-rate debt <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Cash flow hedges of non-financial forecasted transactions <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Net written options as hedging instruments <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Dual hedges<br>| &nbsp;&nbsp;January 1, 2027 | &nbsp;&nbsp; We are currently evaluating the impact this guidance will have on our consolidated financial statements.<br>|
| &nbsp;&nbsp;***Standards adopted:*** |  |  |
| &nbsp;&nbsp; **Improvements to income tax disclosures** <br> This authoritative guidance provides improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information.<br>| &nbsp;&nbsp;December 31, 2025 | &nbsp;&nbsp;The enhanced disclosures can be found in Note 15, Income Taxes. |
| &nbsp;&nbsp; **Improvements to reportable segments disclosures** <br> This authoritative guidance enhances the disclosures about a public entity's reportable segments and addresses requests from investors for additional, more detailed information about a reportable segment's expenses.<br>| &nbsp;&nbsp;December 31, 2024 | &nbsp;&nbsp;The enhanced disclosures can be found in Note 21, Segment Information. |

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**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp; **Description**  | &nbsp;&nbsp; **Date of adoption** | &nbsp;&nbsp;**Effect on our consolidated financial statements or other significant matters** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Targeted improvements to the accounting for long-duration insurance contracts** <br> This authoritative guidance updated certain requirements in the accounting for long-duration insurance and annuity contracts.<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The assumptions used to calculate the liability for future policy benefits on traditional and limited-payment contracts are reviewed and updated periodically. Cash flow assumptions are reviewed at least annually and updated when necessary with the impact recognized in net income. Discount rate assumptions are prescribed as the current upper-medium grade (low credit risk) fixed income instrument yield and are updated quarterly with the impact recognized in other comprehensive income ("OCI"). <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Market risk benefits ("MRBs"), which are contracts or contract features that provide protection to the policyholder from capital market risk and expose us to other-than-nominal capital market risk, are measured at fair value. The periodic change in fair value is recognized in net income with the exception of the periodic change in fair value related to our own nonperformance risk, which is recognized in OCI. <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Deferred acquisition costs ("DAC") and other actuarial balances for all insurance and annuity contracts are amortized on a constant basis over the expected term of the related contracts. <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Additional disclosures are required, including disaggregated rollforwards of significant insurance liabilities and other account balances as well as disclosures about significant inputs, judgments, assumptions and methods used in measurement.<br>The guidance for the liability for future policy benefits for traditional and limited-payment contracts and DAC was applied on a modified retrospective basis; that is, to contracts in force as of the beginning of the earliest period presented (January 1, 2021, also referred to as the transition date) based on their existing carrying amounts. An entity could elect to apply the changes retrospectively. The guidance for MRBs was applied retrospectively.<br>| &nbsp;&nbsp;January 1, 2023 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; This guidance changed how we account for many of our insurance and annuity products.<br>The additional disclosure requirements can be found in the following notes: <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Note 8, Deferred Acquisition Costs and Other Actuarial Balances <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Note 9, Separate Account Balances <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Note 10, Contractholder Funds <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Note 11, Future Policy Benefits and Claims <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Note 12, Market Risk Benefits<br>|
| &nbsp;&nbsp; **Troubled debt restructurings and vintage disclosures** <br> This authoritative guidance eliminated the accounting requirements for troubled debt restructurings ("TDRs") by creditors and enhanced the disclosure requirements for certain loan refinancing and restructuring by creditors when a borrower is experiencing financial difficulty. The update required entities to disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases. The amendments in this update were applied prospectively, except for the transition method related to the recognition and measurement of TDRs, for which an entity had the option to apply a modified retrospective transition method. Early adoption was permitted.<br>| &nbsp;&nbsp;January 1, 2023 | &nbsp;&nbsp;This guidance did not have a material impact on our consolidated financial statements. |

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**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp; **Description** | &nbsp;&nbsp; **Date of adoption** | &nbsp;&nbsp;**Effect on our consolidated financial statements or other significant matters** |
| &nbsp;&nbsp; **Targeted improvements to accounting for hedging activities – portfolio layer method**<br> This authoritative guidance is intended to further align the economics of a company's risk management activities in its financial statements with hedge accounting requirements. The guidance expanded the current single-layer method to allow multiple hedge layers of a single closed portfolio. Non-prepayable assets can also be included in the same portfolio. This guidance also clarified the current guidance on accounting for fair value basis adjustments applicable to both a single hedged layer and multiple hedged layers. Upon adoption, the application of these hedge strategies was applied prospectively. Early adoption was permitted.<br>| &nbsp;&nbsp; January 1, 2023  | &nbsp;&nbsp;This guidance did not have a material impact on our consolidated financial statements. |
| &nbsp;&nbsp; **Facilitation of the effects of reference rate reform on financial reporting** <br> This authoritative guidance provided optional expedients and exceptions for contracts and hedging relationships affected by reference rate reform. An entity could elect not to apply certain modification accounting requirements to contracts affected by reference rate reform and instead account for the modified contract as a continuation of the existing contract. Also, an entity could apply optional expedients to continue hedge accounting for hedging relationships in which the critical terms changed due to reference rate reform. This guidance eased the financial reporting impacts of reference rate reform on contracts and hedging relationships and was effective until December 31, 2022. A subsequent amendment issued in December 2022 extended the relief date from December 31, 2022, to December 31, 2024, and was effective upon issuance.<br>| &nbsp;&nbsp;March 12, 2020 | &nbsp;&nbsp;We adopted the guidance upon issuance prospectively and elected the applicable optional expedients and exceptions for contracts and hedging relationships impacted by reference rate reform through December 31, 2024. The guidance did not have an impact on our consolidated financial statements upon adoption. |

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When we adopt new accounting standards, we have a process in place to perform a thorough review of the pronouncement, identify the financial statement and system impacts and create an implementation plan among our impacted business units to ensure we are compliant with the pronouncement on the date of adoption. This includes having effective processes and controls in place to support the reported amounts. Each of the standards listed above is in varying stages in our implementation process based on its issuance and adoption dates. We are on track to implement guidance by the respective effective dates.

**Long-Duration Insurance Contracts Disclosures**

We include disaggregated rollforwards for DAC, the unearned revenue liability, separate account liabilities, policyholder account balances, the liability for future policy benefits, the additional liability for certain benefit features and MRBs. Further, for certain actuarial balances, disclosures are required for the significant inputs, judgments, assumptions and methods used in measurement, including changes in those inputs, judgments and assumptions, and the effect of those changes on measurement.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

Amounts from different reportable segments cannot be aggregated for disclosures. Factors to consider in determining the level of aggregation for disclosures include the type of coverage, geography and market or type of customer. We have identified the following levels of aggregation for long-duration insurance contract disclosures.

● Retirement and Income Solutions:

○ Workplace savings and retirement solutions – Group annuity contracts offered to the plan sponsors of defined contribution plans or defined benefit plans

○ Individual variable annuities – Variable deferred annuities and registered index-linked annuities ("RILAs") offered to individuals for both qualified and nonqualified retirement savings

○ Pension risk transfer – Single premium group annuities offered to pension plan sponsors and other institutions

○ Individual fixed deferred annuities – An exited business that offered single premium deferred annuity contracts and flexible premium deferred annuities ("FPDAs") to individuals for both qualified and nonqualified retirement savings

○ Individual fixed income annuities – An exited business that offered single premium immediate annuities ("SPIAs") and deferred income annuities ("DIAs") to individuals for both qualified and nonqualified retirement savings; also includes supplementary contracts generated by annuitizations from other individual product lines

○ Investment only – Primarily guaranteed investment contracts ("GICs") and funding agreements offered to retirement plan sponsors and other institutions

● Benefits and Protection – Specialty Benefits:

○ Individual disability – Disability insurance providing protection to individuals and/or business owners

● Benefits and Protection – Life Insurance:

○ Universal life – Universal life, variable universal life and indexed universal life insurance products offered to individuals and/or business owners, which will be collectively referred to hereafter as "universal life" contracts; includes our exited universal life insurance with secondary guarantee ("ULSG") business

○ Term life – Term life insurance products offered to individuals and/or business owners

○ Participating life – Participating life insurance contracts offered to individuals, some of which are part of a closed block of business and are only in the scope of long-duration insurance contracts disclosures for DAC

● Corporate:

○ Long-term care insurance – A closed block of long-term care insurance that is fully reinsured, which was offered on both a group and individual basis.

For the separate account liability disclosures, our Retirement and Income Solutions segment uses a Group retirement contracts level of aggregation. This consists primarily of separate account liabilities for the workplace savings and retirement solutions business as well as amounts for the investment only and pension risk transfer businesses.

**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 derivatives;

● the fair value of MRBs;

● the liability for future policy benefits and claims, including the deferred profit liability;

● the value of our other postretirement benefit obligation ("OPEB") and

● accounting for income taxes and the valuation of deferred tax assets.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

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. 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.

**Investments**

Fixed maturities include bonds, asset-backed securities ("ABS"), redeemable preferred stock and certain non-redeemable preferred securities. Equity securities include mutual funds, common stock and non-redeemable preferred stock. We classify fixed maturities as either available-for-sale or trading at the time of the purchase and, accordingly, carry them at fair value. Equity securities are also carried at fair value. See Note 19, Fair Value Measurements, for methodologies related to the determination of fair value. Unrealized gains and losses related to fixed maturities, available-for-sale, excluding those in fair value hedging relationships, are reflected in stockholder's equity, net of adjustments associated with related actuarial balances, derivatives in cash flow hedge relationships and applicable income taxes. Mark-to-market adjustments on certain fixed maturities, trading are reflected in net realized capital gains (losses). Mark-to-market adjustments on certain fixed maturities, trading are reflected in market risk benefit remeasurement (gain) loss. Unrealized gains and losses related to hedged portions of fixed maturities, available-for-sale in fair value hedging relationships are reflected in net investment income. 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 amortized cost of fixed maturities includes cost adjusted for amortization of premiums and discounts, computed using the interest method. The amortized cost of fixed maturities, available-for-sale is adjusted for changes in fair value of the hedged portions of securities in fair value hedging relationships and excludes accrued interest receivable. Accrued interest receivable is reported in accrued investment income on the consolidated statements of financial position. Fixed maturities, available-for-sale are subject to an allowance for credit loss and changes in the allowance are reported in net income as a component of net realized capital gains (losses). 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.

Commercial and residential mortgage loans are generally reported at cost adjusted for amortization of premiums and accrual of discounts, computed using the interest method and net of valuation allowances. Amortized cost excludes accrued interest receivable. 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 on the consolidated statements of operations. Accrued interest receivable is reported in accrued investment income on the consolidated statements of financial position. Any changes in the loan valuation allowances are reported in net realized capital gains (losses) on the consolidated statements of operations. See Note 5, Investments, for further details of our valuation allowance.

Our commercial and residential mortgage loan portfolios can include loans that have been modified. We assess loan modifications on a case-by-case basis to evaluate whether a change to the valuation allowance and/or a write-off is needed. See Note 5, Investments, under the caption "Mortgage Loan Modifications" for further details.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

Real estate investments are reported at cost less accumulated depreciation. The initial cost bases 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 property is 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 $222.7 million and $218.5 million as of December 31, 2025 and 2024, respectively. Any impairment losses and any changes in valuation allowances are reported in net income.

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) on the consolidated statements of operations: mark-to-market adjustments on equity securities, mark-to-market adjustments on certain fixed maturities, trading, mark-to-market adjustments on certain investment funds, mark-to-market adjustments on derivatives not designated as hedges, cash flow hedge gains (losses) when the hedged item impacts realized capital gains (losses), changes in the valuation allowance for fixed maturities, available-for-sale and certain financing receivables, impairments of real estate held for investment and impairments of 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 certain other investments are reported at cost. Interests in unconsolidated entities, joint ventures and partnerships are generally accounted for using the equity method. We had certain real estate ventures for which the fair value option had been elected in prior periods. See Note 19, Fair Value Measurements, for detail on these investments.

**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 swaps, options, futures and forwards. 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 19, 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:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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. Cash flows associated with derivatives are included within operating activities in the consolidated statements of cash flows, with the exception of cash paid for certain options with deferred premiums. Those derivatives are included in payments for financing element derivatives within financing activities in the consolidated statements of cash flows.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

***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 the same consolidated statements of operations line item that is used to report the earnings effect of the hedged item. For fair value hedges of fixed maturities, available-for-sale and mortgage loans, these changes in fair value are reported in net investment income or net realized capital gains (losses). For fair value hedges of liabilities, changes in fair value are reported in cost of interest credited. The change in the fair value of excluded components is recorded in OCI and is recognized in net income through periodic settlements. A fair value hedge determined to be highly effective may still result in a mismatch between the change in the fair value of the hedging instrument and the change in the fair value of the hedged item attributable to the hedged risk. Certain fair value hedges use the portfolio layer method to hedge a designated layer amount within a closed portfolio of prepayable assets that is expected to remain outstanding for the length of the hedging relationship and is not expected to be impacted by prepayments, defaults or other factors that affect the timing and amount of cash flows. Prepayment risk is excluded when measuring the change in fair value attributable to the hedged risk under the portfolio layer method.

***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. 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 consolidated statements of financial position or with specific firm commitments or forecasted transactions. Documentation of fair value hedges that use the portfolio layer method supports the expectation that the hedged layer amount is anticipated to be outstanding at the end of the hedging relationship and includes expectations of prepayments, defaults or other factors that affect the timing and amount of cash flows. Effectiveness of the hedge is formally assessed at inception and throughout the life of the hedging relationship. Even if a hedge is determined to be highly effective, the hedge may still result in a mismatch between the change in the fair value of the hedging instrument and the change in the fair value of the hedged item attributable to the hedged risk.

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. For portfolio layer method hedges, the assessment of hedge effectiveness includes confirming we expect the hedged layer amount to be outstanding at the end of the hedging relationship.

***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 rules and the existing basis adjustment is amortized to the consolidated statements of operations line associated with the asset or liability. If a portfolio layer method hedging relationship is discontinued, the outstanding basis adjustment is allocated to the individual assets in the closed portfolio and those amounts are amortized consistent with the amortization of other discounts or premiums associated with those assets.

The component of accumulated other comprehensive income ("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.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

***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, MRBs and other policyholder funds) include reserves for investment contracts, individual and group annuities that provide periodic income payments, universal life insurance, variable universal life insurance, indexed universal life insurance, term life insurance, participating traditional individual life insurance, group dental and vision insurance, group critical illness, group accident, group hospital indemnity, paid family and medical leave ("PFML"), group short-term and long-term disability insurance, group life insurance, individual disability insurance and long-term care insurance. It also includes 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, variable universal life and indexed 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. See Note 10, Contractholder Funds, for additional details.

We hold additional reserves on certain long-duration contracts where benefit features result in gains in early years followed by losses in later years and universal life, variable universal life and indexed universal life insurance contracts that contain no lapse guarantee features.

Refer to Note 11, Future Policy Benefits and Claims, under the caption "Long-Duration Contracts" for information about the calculation of reserves for long-duration insurance and annuity contracts.

Contracts or contract features that provide protection to the policyholder from capital market risk and expose us to other than nominal capital market risk are classified as MRBs and reported at fair value. See Note 12, Market Risk Benefits, for additional details.

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 2%, 2% and 2% of our life insurance in force and 14%, 15% and 16% of the number of life insurance policies in force as of December 31, 2025, 2024 and 2023, respectively. Participating business represented approximately 15%, 15% and 16% of life insurance premiums for the years ended December 31, 2025, 2024 and 2023, 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 establish 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. See Note 8, Deferred Acquisition Costs and Other Actuarial Balances, under the caption "Unearned Revenue Liability" for additional details.

***Short-Duration Contracts***

We include the following group products in our short-duration insurance contracts disclosures: long-term disability ("LTD"), group life waiver, dental, vision, short-term disability ("STD"), critical illness, accident, PFML, hospital indemnity and group life. Refer to Note 11, Future Policy Benefits and Claims, under the caption "Short-Duration Contracts" for additional details.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

***Liability for Unpaid Claims***

The liability for unpaid claims for both long-duration and short-duration contracts 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 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.

We incur claim adjustment expenses for both long-duration and short-duration contracts that cannot be allocated to a specific claim. Our claim adjustment expense liability is estimated using actuarial analyses based on historical trends of expenses and expected claim runout patterns.

See Note 11, Future Policy Benefits and Claims, under the caption "Liability for Unpaid Claims" for further details.

**Recognition of Premiums and Other Considerations, Fees and Other Revenues and Benefits**

Products with fixed and guaranteed premiums and benefits consist principally of whole life and term life insurance policies and individual disability income. 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 interest assumptions. We anticipate profits to emerge over the life of the annuity products as we earn investment income, pay benefits and release reserves. Any gross premium received in excess of the net premium is recognized as a deferred profit liability and amortized in relation to the expected future benefit payments. See Note 11, Future Policy Benefits and Claims, for additional details.

Group life, dental, vision, critical illness, accident, PFML, hospital indemnity and disability 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 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 administrative services performed including recordkeeping, trust and custody and reporting services for retirement savings plans, insurance companies, endowments and other financial institutions and other products. Fees and other revenues received for performance of administrative services are recognized as revenue when earned, typically when the service is performed.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

**Deferred Acquisition Costs**

Refer to Note 8, Deferred Acquisition Costs and Other Actuarial Balances, for information related to DAC on insurance policies and investment contracts. Commissions and other incremental direct costs for the acquisition of long-term service contracts are also capitalized to the extent recoverable.

**Internal Replacement Transactions**

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 consolidated statements of financial position. Long-term debt is primarily recorded at the unpaid principal balance, net of unamortized discount, premium and issuance costs.

**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 evaluate each insurance agreement to determine whether the agreement provides indemnification against loss or liability related to insurance risk. For agreements that expose the reinsurer to reasonable possibility of significant loss from insurance risk, the reinsurance method of accounting is used for the agreement. Assets and liabilities related to reinsurance ceded are reported on a gross basis on the consolidated statements of financial position. Insurance liabilities are reported before the effects of reinsurance and we record an offsetting reinsurance recoverable, net of valuation allowance. Premiums and expenses are reported net of reinsurance ceded on the consolidated statements of operations.

If an agreement does not expose the reinsurer to reasonable possibility of significant loss from insurance risk, the deposit method of accounting is used for the agreement. We record a deposit receivable, net of valuation allowance, if necessary. The deposit receivable is adjusted as amounts are paid or received on the underlying contracts. Accretion on the deposit receivable is calculated using an effective interest method and is reported in fees and other revenues and operating expense on the consolidated statements of operations.

The cost of reinsurance related to long-duration contracts is amortized over the life of the underlying reinsured policies using assumptions consistent with those used to account for the underlying policies.

We have entered into coinsurance with funds withheld reinsurance agreements in which we record a funds withheld payable that contains an embedded derivative for which the fair value is estimated based on the change in fair value of the assets supporting the funds withheld payable. The change in fair value of the funds withheld embedded derivative is separately reported on the consolidated statements of operations. Gains and losses that do not flow to the reinsurer are reported in net realized capital gains (losses) on funds withheld assets on the consolidated statements of operations.

For further information about reinsurance, refer to Note 13, Reinsurance. For further information about the financing receivables valuation allowance on the reinsurance recoverable and deposit receivable, refer to Note 5, Investments.

**Separate Accounts**

Refer to Note 9, Separate Account Balances, for information on our separate account assets and liabilities.

**Principal Life Insurance Company**

**Notes to Consolidated Financial Statements – (continued)**

**December 31, 2025**

**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, PFG files income tax returns in all states and foreign jurisdictions in which it conducts business. PFG has a tax sharing agreement with companies in the group under which it allocates income tax expenses and benefits 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, net operating loss carryforwards and tax credit carryforwards 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 net income in the period in which the change is enacted. Subsequent to a change in tax rates and laws, any stranded tax effects remaining in AOCI will be released only if an entire portfolio is liquidated, sold or extinguished.

**2. Related Party Transactions**

*Expense Agreements*

We have entered into various related party transactions with our ultimate parent and its other affiliates. During the years ended December 31, 2025, 2024 and 2023, we received $623.4 million, $567.9 million and $524.6 million, respectively, of expense reimbursements from affiliated entities, which are net of amounts paid for brand licensing agreements with PFS.

*Cash Advance Agreement*

We and our direct parent, PFS, are parties to a cash advance agreement, which allows us, collectively, to pool our available cash with other affiliates in order to more efficiently and effectively invest our cash. The cash advance agreement allows (i) us to advance cash to PFS in aggregate principal amounts not to exceed $1.0 billion, with such advanced amounts earning interest at the secured overnight financing rate ("SOFR") plus 10 basis points (the "Internal Crediting Rate"); and (ii) PFS 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 to reimburse PFS for the costs incurred in maintaining short-term investing and borrowing programs. Under this cash advance agreement, we had a receivable from PFS of $116.0 million and $73.9 million as of December 31, 2025 and 2024, respectively, and earned interest of $5.9 million, $8.3 million and $10.1 million during 2025, 2024 and 2023, respectively.

*Reinsurance*

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 $7,120.8 million and $6,514.5 million as of December 31, 2025 and 2024, respectively. In addition, we recognized premiums and other fees of $1,038.9 million, $992.3 million and $938.1 million for the years ended December 31, 2025, 2024 and 2023, respectively, associated with this agreement. Furthermore, we recognized expenses of $1,284.0 million, $1,254.0 million and $1,076.2 million for the years ended December 31, 2025, 2024 and 2023, respectively, associated with this agreement.

We and an affiliated entity, PFS Bermuda, are parties to a coinsurance with funds withheld agreement for PFS Bermuda to reinsure certain term life and pension risk transfer ("PRT") blocks of business. Under this agreement, we had a reinsurance recoverable of $4,887.1 million and $4,106.3 million as of December 31, 2025 and 2024, respectively. We had a $23.2 million and $62.2 million payable to PFS Bermuda as of December 31, 2025 and 2024, respectively, associated with the settlement statements. In addition, we ceded premiums of $990.5 million, $733.1 million and $53.4 million; net investment income on policy loans of $0.1 million, $0.0 million and $0.0 million and benefits of $1,102.3 million, $822.4 million and $76.4 million for the years ended December 31, 2025, 2024 and 2023, respectively, associated with this agreement. We passed net investment income of $275.1 million, $228.9 million and $56.1 million and net realized capital gains (losses) of $0.9 million, $3.9 million and $(1.1) million on the funds withheld assets to PFS Bermuda for the years ended December 31, 2025, 2024 and 2023, respectively. Furthermore, our operating expenses were reduced by ceding commissions and expense allowances received of $134.5 million, $129.5 million and $31.2 million for the years ended December 31, 2025, 2024 and 2023, respectively.

**Principal Life Insurance Company**

**Notes to Consolidated Financial Statements – (continued)**

**December 31, 2025**

*Notes Receivable*

As of December 31, 2025, we had the following notes receivable from PFS related to the sale of interests in subsidiaries (1) a 10-year note with a par amount of $156.0 million, which bears interest at 2.87% with semi-annual principal and interest payments due in February and August each year and (2) a 10-year note with a par amount of $300.0 million, which bears interest at 2.885% with semi-annual principal and interest payments due in May and November each year. The carrying amount of the notes is included in premiums due and other receivables on the consolidated statements of financial position. We recorded interest income on these notes of $2.0 million, $3.3 million and $4.6 million for the years ended December 31, 2025, 2024 and 2023, respectively. Our ultimate parent, PFG, is a guarantor of the notes.

*Distribution of Affiliated Products*

We receive commission fees, distribution fees and service fees from Principal Securities, Inc. and Principal Global Investors, LLC ("PGI LLC"). Furthermore, we receive management and administrative fees for investments our products sold in the Principal Mutual Funds and Principal Variable Contracts. Fees and other revenues were $417.6 million, $438.2 million and $407.1 million for the years ended December 31, 2025, 2024 and 2023, respectively. In addition, we pay commission expense to affiliated registered representatives within Principal Securities, Inc. to sell proprietary products. Commission expense was $179.3 million, $158.3 million and $95.9 million for the years ended December 31, 2025, 2024 and 2023, respectively.

*Benefit Plans*

PFG is the sponsor of the qualified defined contribution plans for both employees and individual field agents. We were allocated plan expenses from PFG of $46.4 million, $44.5 million and $44.2 million during 2025, 2024 and 2023, respectively.

PFG is also the sponsor of the nonqualified deferred compensation plans for select employees and individual field agents. We were allocated plan expenses from PFG of $2.4 million, $2.1 million and $1.8 million during 2025, 2024 and 2023, respectively.

PFG is the sponsor of the defined benefit pension plans for both employees and individual field agents. We were allocated $43.6 million, $43.7 million and $38.8 million of pension expense from PFG during 2025, 2024 and 2023, respectively.

*Other Agreements*

PGI LLC provides asset management services for us. We recognized $128.1 million, $117.0 million and $108.1 million of asset management fee expense for the years ended December 31, 2025, 2024 and 2023, respectively.

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.

**Principal Life Insurance Company**

**Notes to Consolidated Financial Statements – (continued)**

**December 31, 2025**

**3. Goodwill and Other Intangible Assets**

**Goodwill**

The changes in the carrying amount of goodwill reported in our segments were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Retirement and Income <br> Solutions** | **Benefits and Protection** | **Corporate** | **Consolidated** |
| | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| **Balance as of January 1, 2024** | $18.8 | $29.5 | $— | $48.3 |
| &nbsp;&nbsp;&nbsp;Goodwill from acquisitions (1) | 11.2 |  |  | 11.2 |
| **Balance as of December 31, 2024** | $30.0 | $29.5 | $— | $59.5 |
| **Balance as of December 31, 2025** | $**30.0** | $**29.5** | $**—** | $**59.5** |

---

(1) Relates
 to the acquisition of employee stock ownership plan business from Ascensus within our
 Retirement and Income Solutions segment.

**Finite Lived Intangible Assets**

Amortized intangible assets that continue to be subject to amortization over a weighted average remaining expected life of 11 years were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
|  | *(in millions)* | *(in millions)* |
| Gross carrying value | $**54.2** | $52.7 |
| Accumulated amortization | **28.4** | 26.0 |
| Net carrying value | $**25.8** | $26.7 |

---

The amortization expense for intangible assets with finite useful lives was $2.4 million, $1.7 million and $1.0 million for 2025, 2024 and 2023, respectively. As of December 31, 2025, the estimated amortization expense for the next five years is as follows (in millions):

---

| | |
|:---|:---|
| Year ending December 31: |  |
| &nbsp;&nbsp;&nbsp;2026 | $**2.5** |
| &nbsp;&nbsp;&nbsp;2027 | **2.5** |
| &nbsp;&nbsp;&nbsp;2028 | **2.5** |
| &nbsp;&nbsp;&nbsp;2029 | **2.5** |
| &nbsp;&nbsp;&nbsp;2030 | **2.5** |

---

**4. Variable Interest Entities**

We have relationships with various types of entities that may be VIEs. Certain VIEs are consolidated in our financial results. See Note 1, Nature of Operations and Significant Accounting Policies, under the caption "Consolidation" for further details of our consolidation accounting policies. We did not provide financial or other support to investees designated as VIEs for the periods ended December 31, 2025 and December 31, 2024.

**Consolidated Variable Interest Entities**

***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.

**Principal Life Insurance Company**

**Notes to Consolidated Financial Statements – (continued)**

**December 31, 2025**

***Sponsored Investment Fund***

We sponsored and invested in an investment fund for which a related party provided asset management services. The fund is a VIE as the equity holders lack power through voting rights to direct the activities of the entity that most significantly impact its economic performance. We determined we were the primary beneficiary of the VIE where our interest in the entity was more than insignificant. We deconsolidated the fund in 2025 due to the acquisition of substantial voting rights through investment in the fund by external investors.

***Residential Mortgage Loans***

We invest in ABS trusts. The trusts issue various collateralized mortgage obligation certificates and purchase residential mortgage loans. The trusts are considered VIEs due to insufficient equity to sustain themselves. We concluded we are the primary beneficiary as we purchase substantially all of the certificates and have the obligation to absorb losses that could potentially be significant to the VIEs.

***Asset-Backed Limited Partnership***

We invest in an ABS limited partnership. The limited partnership issues multiple notes and purchases consumer loans, auto loans, other loans and credit facilities. The limited partnership is considered a VIE due to insufficient equity to sustain itself. We concluded we are the primary beneficiary as we have purchased all of the notes and have the obligation to absorb losses and residual returns that could potentially be significant to the VIE.

***Assets and Liabilities of Consolidated Variable Interest Entities***

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 were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2024** | **December 31, 2024** |
|  | **Total assets** | **Total liabilities** | **Total assets** | **Total liabilities** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| Real estate (1) | $**883.4** | $**34.2** | $814.3 | $69.4 |
| Sponsored investment fund (2) | **—** | **—** | 150.8 | 140.8 |
| Residential mortgage loans (3) | **728.9** | **18.8** | 806.5 | 19.9 |
| Asset-backed limited partnership (4) | **256.3** | **—** | 250.0 |  |
| Total | $**1868.6** | $**53.0** | $2021.6 | $230.1 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) The
 assets of the real estate VIEs primarily include real estate, other investments and cash.
 Liabilities primarily include other liabilities.

&nbsp;&nbsp;&nbsp;&nbsp;(2) The
 assets of the sponsored investment fund VIE were primarily commercial mortgage loans
 and cash. The liabilities included short-term debt and long-term debt. The consolidated
 statements of financial position included a $0.0 million and $5.0 million redeemable
 noncontrolling interest for the sponsored investment fund as of December 31, 2025 and
 2024, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;(3) The
 assets of the residential mortgage loans VIEs primarily include residential mortgage
 loans. The liabilities primarily include other liabilities.

&nbsp;&nbsp;&nbsp;&nbsp;(4) The
 assets of the asset-backed limited partnership VIE primarily include consumer loans,
 auto loans, other loans and credit facilities. These assets are reported with cash and
 cash equivalents, other investments and fixed maturities, trading on the consolidated
 statements of financial position.

**Principal Life Insurance Company**

**Notes to Consolidated Financial Statements – (continued)**

**December 31, 2025**

**Unconsolidated Variable Interest Entities**

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 certain commercial mortgage-backed securities ("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.

We invest in cash collateralized debt obligations, collateralized bond obligations, collateralized loan obligations and other collateralized structures, which are VIEs due to insufficient equity to sustain the entities. We have determined we are not the primary beneficiary of these entities primarily because we do not control the economic performance of the entities and were not involved with the design of the entities or because we do not have a potentially significant variable interest in the entities for which we are the asset manager.

We have invested in various VIE trusts and similar entities as a debt holder. Most of these entities are classified as VIEs due to insufficient equity to sustain them. In addition, we have an entity classified as a VIE based on the combination of our significant economic interest and lack of voting rights. 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, which are classified as VIEs. The entities are VIEs as equity holders lack the power to control the most significant activities of the entities because the equity holders do not have either the ability by a simple majority to exercise substantive kick-out rights or substantive participating rights. We have determined we are not the primary beneficiary because we do not have the power to direct the most significant activities of the entities.

As previously discussed, we sponsor and invest in certain investment funds that are VIEs. We determined we are not the primary beneficiary of the VIEs for which we are the asset manager but do not have a potentially significant variable interest in the funds.

**Principal Life Insurance Company**

**Notes to Consolidated Financial Statements – (continued)**

**December 31, 2025**

The carrying value and maximum loss exposure for our unconsolidated VIEs were as follows:

---

| | | |
|:---|:---|:---|
|  | **Asset carrying value** | **Maximum exposure to loss (1)** |
|  | *(in millions)* | *(in millions)* |
| **December 31, 2025** |  |  |
| Fixed maturities, available-for-sale: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Corporate | $**289.4** | $**361.7** |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential mortgage-backed pass-through securities | **3472.4** | **3539.2** |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial mortgage-backed securities | **5363.5** | **5650.5** |
| &nbsp;&nbsp;&nbsp;&nbsp;Collateralized debt obligations (2) | **6420.6** | **6415.8** |
| &nbsp;&nbsp;&nbsp;&nbsp;Other debt obligations | **10661.0** | **12144.3** |
| Fixed maturities, trading: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential mortgage-backed pass-through securities | **8.4** | **8.4** |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial mortgage-backed securities | **65.1** | **65.1** |
| &nbsp;&nbsp;&nbsp;&nbsp;Collateralized debt obligations (2) | **292.1** | **292.1** |
| &nbsp;&nbsp;&nbsp;&nbsp;Other debt obligations | **330.5** | **330.5** |
| Other investments: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other limited partnership and fund interests | **3050.9** | **4702.7** |
| **December 31, 2024** |  |  |
| Fixed maturities, available-for-sale: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Corporate | $308.2 | $359.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential mortgage-backed pass-through securities | 3319.6 | 3517.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial mortgage-backed securities | 5177.1 | 5622.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;Collateralized debt obligations (2) | 6556.6 | 6514.8 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other debt obligations | 8882.5 | 10555.8 |
| Fixed maturities, trading: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential mortgage-backed pass-through securities | 9.1 | 9.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial mortgage-backed securities | 44.1 | 44.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;Collateralized debt obligations (2) | 210.1 | 210.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other debt obligations | 210.1 | 210.1 |
| Other investments: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other limited partnership and fund interests | 2355.0 | 4042.6 |

---

(1) Our
 risk of loss is limited to our initial investment measured at amortized cost excluding
 portfolio layer method basis adjustments for fixed maturities, available-for-sale, plus
 any unfunded commitments and/or guarantees and similar provisions for collateralized
 debt obligations and other debt obligations. Our risk of loss is limited to our investment
 measured at fair value for our fixed maturities, trading. Our risk of loss is limited
 to our carrying value plus any unfunded commitments and/or guarantees and similar provisions
 for our other investments. A carrying value of zero is used if distributions have been
 received in excess of our investment, resulting in a negative carrying value for the
 investment. Unfunded commitments are not liabilities on our consolidated statements of
 financial position because we are only required to fund additional equity when called
 upon to do so by the general partner or investment manager.

(2) Primarily
 consists of collateralized loan obligations backed by secured corporate loans.

**Principal Life Insurance Company**

**Notes to Consolidated Financial Statements – (continued)**

**December 31, 2025**

**5. Investments**

Our investments include assets backing reserves as part of a coinsurance with funds withheld agreement. The funds withheld invested assets are reported within their respective line items, primarily consisting of fixed maturities available-for-sale, mortgage loans and other investments. See Note 13, Reinsurance, for more information on the funds withheld invested assets.

**Fixed Maturities**

The amortized cost, gross unrealized gains and losses, allowance for credit loss and fair value of fixed maturities, available-for-sale were as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Amortized cost (1)** | **Gross unrealized gains** | **Gross unrealized losses** | **Allowance for credit loss** | **Fair value** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| **December 31, 2025** |  |  |  |  |  |
| Fixed maturities, available-for-sale: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;U.S. government and agencies | $**1977.3** | $**7.8** | $**266.7** | $**—** | $**1718.4** |
| &nbsp;&nbsp;&nbsp;Non-U.S. governments | **545.7** | **17.3** | **54.6** | **—** | **508.4** |
| &nbsp;&nbsp;&nbsp;States and political subdivisions | **8070.7** | **43.8** | **1004.9** | **—** | **7109.6** |
| &nbsp;&nbsp;&nbsp;Corporate | **37460.3** | **602.4** | **3010.7** | **22.5** | **35029.5** |
| &nbsp;&nbsp;&nbsp;Residential mortgage-backed pass-through securities | **3539.2** | **50.2** | **117.0** | **—** | **3472.4** |
| &nbsp;&nbsp;&nbsp;Commercial mortgage-backed securities | **5650.5** | **19.6** | **305.2** | **1.4** | **5363.5** |
| &nbsp;&nbsp;&nbsp;Collateralized debt obligations (2) | **6415.8** | **14.5** | **9.7** | **—** | **6420.6** |
| &nbsp;&nbsp;&nbsp;Other debt obligations | **10958.2** | **99.5** | **387.4** | **0.4** | **10669.9** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total excluding portfolio layer method basis adjustment | **74617.7** | **855.1** | **5156.2** | **24.3** | **70292.3** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unallocated portfolio layer method basis adjustment (3) | **(16.9)** | **16.9** | **—** | **—** | **—** |
| Total fixed maturities, available-for-sale | $**74600.8** | $**872.0** | $**5156.2** | $**24.3** | $**70292.3** |
| **December 31, 2024** |  |  |  |  |  |
| Fixed maturities, available-for-sale: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;U.S. government and agencies | $1732.7 | $0.2 | $298.0 | $— | $1434.9 |
| &nbsp;&nbsp;&nbsp;Non-U.S. governments | 553.8 | 12.6 | 84.4 |  | 482.0 |
| &nbsp;&nbsp;&nbsp;States and political subdivisions | 7161.3 | 11.5 | 1133.9 |  | 6038.9 |
| &nbsp;&nbsp;&nbsp;Corporate | 36649.4 | 343.8 | 3619.9 | 16.1 | 33357.2 |
| &nbsp;&nbsp;&nbsp;Residential mortgage-backed pass-through securities | 3517.1 | 8.7 | 206.2 |  | 3319.6 |
| &nbsp;&nbsp;&nbsp;Commercial mortgage-backed securities | 5622.0 | 4.9 | 449.8 |  | 5177.1 |
| &nbsp;&nbsp;&nbsp;Collateralized debt obligations (2) | 6514.8 | 48.0 | 6.2 |  | 6556.6 |
| &nbsp;&nbsp;&nbsp;Other debt obligations | 9421.1 | 50.0 | 576.8 | 0.2 | 8894.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total excluding portfolio layer method basis adjustment | 71172.2 | 479.7 | 6375.2 | 16.3 | 65260.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unallocated portfolio layer method basis adjustment (3) | (55.7) | 55.7 |  |  |  |
| Total fixed maturities, available-for-sale | $71116.5 | $535.4 | $6375.2 | $16.3 | $65260.4 |

---

(1) Amortized
 cost excludes accrued interest receivable of $654.9 million and $642.3 million as of
 December 31, 2025 and 2024, respectively.

(2) Primarily
 consists of collateralized loan obligations backed by secured corporate loans.

(3) Represents
 unallocated basis adjustments related to fair value hedges utilizing the portfolio layer
 method. See Note 6, Derivative Financial Instruments, for further details.

**Principal Life Insurance Company**

**Notes to Consolidated Financial Statements – (continued)**

**December 31, 2025**

The amortized cost and fair value of fixed maturities available-for-sale as of December 31, 2025, by expected maturity, were as follows:

---

| | | |
|:---|:---|:---|
|  | **Amortized cost (1)** | **Fair value** |
| | *(in millions)* | *(in millions)* |
| Due in one year or less | $**1373.1** | $**1360.4** |
| Due after one year through five years | **9651.4** | **9618.2** |
| Due after five years through ten years | **8881.9** | **8793.4** |
| Due after ten years | **28147.6** | **24593.9** |
| Subtotal | **48054.0** | **44365.9** |
| Mortgage-backed and other asset-backed securities | **26563.7** | **25926.4** |
| Total | $**74617.7** | $**70292.3** |

---

(1) Excludes unallocated basis adjustments related to fair value hedges utilizing the portfolio layer method.

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**

The major components of net investment income are shown below and are net of amounts on funds withheld invested assets that are passed directly to reinsurers. See Note 13, Reinsurance, for further details.

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | | *(in millions)* | |
| Fixed maturities, available-for-sale | $**2548.3** | $2323.6 | $2230.0 |
| Fixed maturities, trading | **54.8** | 30.7 | 32.4 |
| Equity securities | **8.9** | 6.3 | 3.5 |
| Mortgage loans | **779.8** | 695.6 | 661.5 |
| Real estate | **133.3** | 177.8 | 177.2 |
| Policy loans | **43.6** | 41.9 | 39.1 |
| Cash and cash equivalents | **151.9** | 214.7 | 148.2 |
| Derivatives | **21.1** | 94.3 | 38.6 |
| Other | **281.1** | 258.6 | 231.6 |
| Total | **4022.8** | 3843.5 | 3562.1 |
| Investment expenses | **(292.8)** | (309.1) | (276.6) |
| Net investment income | $**3730.0** | $3534.4 | $3285.5 |

---

**Principal Life Insurance Company**

**Notes to Consolidated Financial Statements – (continued)**

**December 31, 2025**

**Net Realized Capital Gains and Losses**

The major components of net realized capital gains (losses) on investments are shown below and are net of amounts on funds withheld invested assets that are passed directly to reinsurers. See Note 13, Reinsurance, for further details. The amounts below do not include net realized capital gains (losses) on funds withheld assets that are not passed to reinsurers, which are separately reported on the consolidated statements of operations. Net realized capital gains (losses) on funds withheld assets includes gains (losses) realized upon sale of assets put into the funds withheld at the start of a reinsurance transaction for the unrealized gains (losses) on the date of transfer into the funds withheld, the change in the valuation allowance on funds withheld commercial mortgage loans and unrealized gains and losses related to the change in fair value of funds withheld fixed maturities, trading, equity securities and derivatives.

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
| | *(in millions)* | *(in millions)* | *(in millions)* |
| Fixed maturities, available-for-sale: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Gross gains | $**9.3** | $12.9 | $46.8 |
| &nbsp;&nbsp;&nbsp;&nbsp;Gross losses | **(57.8)** | (45.7) | (134.8) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net credit losses (1) | **(41.6)** | (21.7) | (31.3) |
| &nbsp;&nbsp;&nbsp;&nbsp;Hedging, net (2) | **23.6** | (11.5) | 2.2 |
| Fixed maturities, trading (3) | **0.6** | (0.5) | 0.7 |
| Equity securities (4) | **71.1** | (13.8) | 0.7 |
| Mortgage loans (5) | **(50.7)** | (100.7) | (133.8) |
| Derivatives | **(78.6)** | 35.7 | (5.3) |
| Other | **69.8** | (6.9) | 100.1 |
| Net realized capital losses | $**(54.3)** | $(152.2) | $(154.7) |

---

(1) Includes
 credit sales, adjustments to the credit loss valuation allowance, write-offs and recoveries
 on available-for-sale securities.

(2) The
 change in fair value of fixed maturities, available-for-sale and the change in fair value
 of derivative hedging instruments in fair value hedging relationships are reported in
 net investment income with the earnings effect of fixed maturities, available-for-sale.
 Gains (losses) for fixed maturities, available-for-sale related to terminated cash flow
 hedges continue to be reflected in net realized capital gains (losses).

(3) Unrealized
 gains (losses) on fixed maturities, trading still held at the reporting date were $0.2
 million, $(1.4) million and $(0.2) million for the years ended December 31, 2025, 2024
 and 2023, respectively. This excludes $8.2 million, $1.7 million and $2.9 million in
 unrealized gains (losses) for the years ended December 31, 2025, 2024 and 2023, respectively,
 that were reported in market risk benefit remeasurement (gain) loss and $(5.4) million,
 $2.0 million and $6.8 million of unrealized gains (losses) for the years ended December
 31, 2025, 2024 and 2023, respectively, that were reported in net realized capital gains
 (losses) on funds withheld assets.

(4) Unrealized
 gains (losses) on equity securities still held at the reporting date were $7.7 million,
 $(13.8) million and $0.7 million for the years ended December 31, 2025, 2024 and 2023,
 respectively. This excludes $0.0 million, $0.0 million and $1.7 million unrealized gains
 (losses) for the years ended December 31, 2025, 2024 and 2023, respectively, that were
 reported in net realized capital gains (losses) on funds withheld assets.

(5) Net
 realized capital gains (losses) on mortgage loans include losses related to the deconsolidation
 of residential mortgage loan trusts in 2023.

Proceeds from sales of investments (excluding call and maturity proceeds) in fixed maturities, available-for-sale were $2,546.9 million, $2,867.2 million and $4,950.4 million in 2025, 2024 and 2023, respectively.

**Allowance for Credit Loss**

We have a process in place to identify fixed maturity securities that could potentially require an allowance for credit loss. 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.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

Each reporting period, all securities in an unrealized loss position are reviewed to determine whether a decline in value is due to credit. Relevant facts and circumstances considered include: (1) the extent the fair value is 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 and (4) for structured securities, the adequacy of the expected cash flows. To the extent we determine an unrealized loss is due to credit, an allowance for credit loss is recognized through a reduction to net income.

We estimate the amount of the allowance for credit loss 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. We do not measure a credit loss allowance on accrued interest receivable because we write off the accrued interest receivable balance to net investment income in a timely manner when we have concern regarding collectability.

Amounts on fixed maturities, available-for-sale deemed to be uncollectible are written off and removed from the allowance for credit loss. A write-off may also occur if we intend 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.

A rollforward of the allowance for credit loss by major security type was as follows.

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp;**For the year ended December 31, 2025** | &nbsp;&nbsp;&nbsp;&nbsp;**For the year ended December 31, 2025** | &nbsp;&nbsp;&nbsp;&nbsp;**For the year ended December 31, 2025** | &nbsp;&nbsp;&nbsp;&nbsp;**For the year ended December 31, 2025** | &nbsp;&nbsp;&nbsp;&nbsp;**For the year ended December 31, 2025** | &nbsp;&nbsp;&nbsp;&nbsp;**For the year ended December 31, 2025** | &nbsp;&nbsp;&nbsp;&nbsp;**For the year ended December 31, 2025** | &nbsp;&nbsp;&nbsp;&nbsp;**For the year ended December 31, 2025** | &nbsp;&nbsp;&nbsp;&nbsp;**For the year ended December 31, 2025** |
|  |<br><br>**U.S.**<br>**government**<br>**and agencies** |<br><br>**Non-U.S.**<br>**governments** |<br><br>**States and**<br>**political**<br>**subdivisions** |<br><br><br>**Corporate** | **Residential**<br>**mortgage-**<br>**backed**<br>**pass-**<br>**through**<br>**securities** |<br>**Commercial**<br>**mortgage-**<br>**backed**<br>**securities** |<br>**Collateralized**<br>**debt**<br>**obligations**<br>**(1)** |<br><br>**Other**<br>**debt**<br>**obligations** |<br><br><br>**Total** |
|  | &nbsp;&nbsp;&nbsp;&nbsp;*(in millions)* | &nbsp;&nbsp;&nbsp;&nbsp;*(in millions)* | &nbsp;&nbsp;&nbsp;&nbsp;*(in millions)* | &nbsp;&nbsp;&nbsp;&nbsp;*(in millions)* | &nbsp;&nbsp;&nbsp;&nbsp;*(in millions)* | &nbsp;&nbsp;&nbsp;&nbsp;*(in millions)* | &nbsp;&nbsp;&nbsp;&nbsp;*(in millions)* | &nbsp;&nbsp;&nbsp;&nbsp;*(in millions)* | &nbsp;&nbsp;&nbsp;&nbsp;*(in millions)* |
| Beginning balance | $**—** | $**—** | $**—** | $**16.1** | $**—** | $**—** | $**—** | $**0.2** | $**16.3** |
| Additions for credit losses not previously recorded | **—** | **—** | **—** | **22.5** | **—** | **1.5** | **—** | **0.1** | **24.1** |
| Additional increases (decreases) for credit losses on securities with an allowance recorded in the previous period | **—** | **—** | **—** | **0.1** | **—** | **(0.1)** | **—** | **0.1** | **0.1** |
| Write-offs charged against allowance | **—** | **—** | **—** | **(16.2)** | **—** | **—** | **—** | **—** | **(16.2)** |
| Ending balance | $**—** | $**—** | $**—** | $**22.5** | $**—** | $**1.4** | $**—** | $**0.4** | $**24.3** |
| Accrued interest written off to net investment income | $**—** | $**—** | $**—** | $**0.4** | $**—** | $**—** | $**—** | $**—** | $**0.4** |

---

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp;**For the year ended December 31, 2024** | &nbsp;&nbsp;&nbsp;&nbsp;**For the year ended December 31, 2024** | &nbsp;&nbsp;&nbsp;&nbsp;**For the year ended December 31, 2024** | &nbsp;&nbsp;&nbsp;&nbsp;**For the year ended December 31, 2024** | &nbsp;&nbsp;&nbsp;&nbsp;**For the year ended December 31, 2024** | &nbsp;&nbsp;&nbsp;&nbsp;**For the year ended December 31, 2024** | &nbsp;&nbsp;&nbsp;&nbsp;**For the year ended December 31, 2024** | &nbsp;&nbsp;&nbsp;&nbsp;**For the year ended December 31, 2024** | &nbsp;&nbsp;&nbsp;&nbsp;**For the year ended December 31, 2024** |
|  |<br><br>**U.S.**<br>**government**<br>**and agencies** |<br><br>**Non-U.S.**<br>**governments** |<br><br>**States and**<br>**political**<br>**subdivisions** |<br><br><br>**Corporate** | **Residential**<br>**mortgage-**<br>**backed**<br>**pass-**<br>**through**<br>**securities** |<br>**Commercial**<br>**mortgage-**<br>**backed**<br>**securities** |<br>**Collateralized**<br>**debt**<br>**obligations**<br>**(1)** |<br><br>**Other**<br>**debt**<br>**obligations** |<br><br><br>**Total** |
|  | &nbsp;&nbsp;&nbsp;&nbsp;*(in millions)* | &nbsp;&nbsp;&nbsp;&nbsp;*(in millions)* | &nbsp;&nbsp;&nbsp;&nbsp;*(in millions)* | &nbsp;&nbsp;&nbsp;&nbsp;*(in millions)* | &nbsp;&nbsp;&nbsp;&nbsp;*(in millions)* | &nbsp;&nbsp;&nbsp;&nbsp;*(in millions)* | &nbsp;&nbsp;&nbsp;&nbsp;*(in millions)* | &nbsp;&nbsp;&nbsp;&nbsp;*(in millions)* | &nbsp;&nbsp;&nbsp;&nbsp;*(in millions)* |
| Beginning balance | $— | $— | $— | $1.9 | $— | $— | $— | $0.1 | $2.0 |
| Additions for credit losses not previously recorded |  |  |  | 16.1 |  |  |  | 0.1 | 16.2 |
| Reductions for securities sold during the period |  |  |  | (0.3) |  |  |  |  | (0.3) |
| Write-offs charged against allowance |  |  |  | (1.6) |  |  |  |  | (1.6) |
| Ending balance | $— | $— | $— | $16.1 | $— | $— | $— | $0.2 | $16.3 |
| Accrued interest written off to net investment income | $— | $— | $— | $1.0 | $— | $— | $— | $— | $1.0 |

---

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp;**For the year ended December 31, 2023** | &nbsp;&nbsp;&nbsp;&nbsp;**For the year ended December 31, 2023** | &nbsp;&nbsp;&nbsp;&nbsp;**For the year ended December 31, 2023** | &nbsp;&nbsp;&nbsp;&nbsp;**For the year ended December 31, 2023** | &nbsp;&nbsp;&nbsp;&nbsp;**For the year ended December 31, 2023** | &nbsp;&nbsp;&nbsp;&nbsp;**For the year ended December 31, 2023** | &nbsp;&nbsp;&nbsp;&nbsp;**For the year ended December 31, 2023** | &nbsp;&nbsp;&nbsp;&nbsp;**For the year ended December 31, 2023** | &nbsp;&nbsp;&nbsp;&nbsp;**For the year ended December 31, 2023** |
|  |<br><br>**U.S.**<br>**government**<br>**and agencies** |<br><br>**Non-U.S.**<br>**governments** |<br><br>**States and**<br>**political**<br>**subdivisions** |<br><br><br>**Corporate** | **Residential**<br>**mortgage-**<br>**backed**<br>**pass-**<br>**through**<br>**securities** |<br>**Commercial**<br>**mortgage-**<br>**backed**<br>**securities** |<br>**Collateralized**<br>**debt**<br>**obligations**<br>**(1)** |<br><br>**Other**<br>**debt**<br>**obligations** |<br><br><br>**Total** |
|  | &nbsp;&nbsp;&nbsp;&nbsp;*(in millions)* | &nbsp;&nbsp;&nbsp;&nbsp;*(in millions)* | &nbsp;&nbsp;&nbsp;&nbsp;*(in millions)* | &nbsp;&nbsp;&nbsp;&nbsp;*(in millions)* | &nbsp;&nbsp;&nbsp;&nbsp;*(in millions)* | &nbsp;&nbsp;&nbsp;&nbsp;*(in millions)* | &nbsp;&nbsp;&nbsp;&nbsp;*(in millions)* | &nbsp;&nbsp;&nbsp;&nbsp;*(in millions)* | &nbsp;&nbsp;&nbsp;&nbsp;*(in millions)* |
| Beginning balance | $— | $— | $— | $— | $— | $— | $— | $0.1 | $0.1 |
| Additions for credit losses not previously recorded |  |  |  | 5.7 |  |  |  |  | 5.7 |
| Write-offs charged against allowance |  |  |  | (3.8) |  |  |  |  | (3.8) |
| Ending balance | $— | $— | $— | $1.9 | $— | $— | $— | $0.1 | $2.0 |
| Accrued interest written off to net investment income | $— | $— | $— | $0.1 | $— | $— | $— | $— | $0.1 |

---

(1) Primarily
consists of collateralized loan obligations backed by secured corporate loans.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

**Available-For-Sale Securities in Unrealized Loss Positions Without an Allowance for Credit Loss**

For available-for-sale securities with unrealized losses for which an allowance for credit loss has not been recorded, 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 were as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  | **Less than** | **Less than** | **Greater than or** | **Greater than or** | | |
|  | **twelve months** | **twelve months** | **equal to twelve months** | **equal to twelve months** | **Total** | **Total** |
|  |<br>**Fair**<br>**value** | **Gross**<br>**unrealized**<br>**losses** |<br>**Fair**<br>**value** | **Gross**<br>**unrealized**<br>**losses** |<br>**Fair**<br>**value** | **Gross**<br>**unrealized**<br>**losses** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| Fixed maturities, available-for-sale (1): |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;U.S. government and agencies | $**467.1** | $**11.0** | $**730.2** | $**255.7** | $**1197.3** | $**266.7** |
| &nbsp;&nbsp;&nbsp;Non-U.S. governments | **12.8** | **0.3** | **309.7** | **54.3** | **322.5** | **54.6** |
| &nbsp;&nbsp;&nbsp;States and political subdivisions | **639.4** | **8.9** | **4874.3** | **996.0** | **5513.7** | **1004.9** |
| &nbsp;&nbsp;&nbsp;Corporate | **1766.2** | **87.9** | **18881.6** | **2919.0** | **20647.8** | **3006.9** |
| &nbsp;&nbsp;&nbsp;Residential mortgage-backed pass-through securities | **173.7** | **0.6** | **1090.3** | **116.4** | **1264.0** | **117.0** |
| &nbsp;&nbsp;&nbsp;Commercial mortgage-backed securities | **342.0** | **2.5** | **3459.7** | **301.0** | **3801.7** | **303.5** |
| &nbsp;&nbsp;&nbsp;Collateralized debt obligations (2) | **1919.9** | **4.7** | **20.2** | **5.0** | **1940.1** | **9.7** |
| &nbsp;&nbsp;&nbsp;Other debt obligations | **567.0** | **1.9** | **3493.9** | **384.7** | **4060.9** | **386.6** |
| Total fixed maturities, available-for-sale | $**5888.1** | $**117.8** | $**32859.9** | $**5032.1** | $**38748.0** | $**5149.9** |

---

(1) Fair
value and gross unrealized losses are excluded for available-for-sale securities for which an allowance for credit loss has been
recorded. Gross unrealized losses exclude unallocated basis adjustments related to fair value hedges utilizing the portfolio layer
method.

(2) Primarily
consists of collateralized loan obligations backed by secured corporate loans.

Of the available-for-sale fixed maturities within our consolidated portfolio in a gross unrealized loss position, 97% were investment grade (rated AAA through BBB-) with an average price of 88 (carrying value/amortized cost) as of December 31, 2025. Gross unrealized losses in our fixed maturities portfolio decreased during the year ended December 31, 2025, primarily due to a decrease in interest rates, which was partially offset by a 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 870 securities reflecting an average price of 98 as of December 31, 2025. Of this portfolio, 93% was investment grade (rated AAA through BBB-) as of December 31, 2025, with associated unrealized losses of $96.7 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 5,758 securities reflecting an average price of 87 and an average credit rating of A as of December 31, 2025. Corporate securities with unrealized losses had an average price of 87 and an average credit rating of A-. States and political subdivisions securities with unrealized losses had an average price of 83 and an average credit rating of AA-. Collateralized mortgage obligation securities with unrealized losses had an average price of 87 and an average credit rating of AA+. CMBS with unrealized losses had an average price of 92 and an average credit rating of AA. 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, we did not record an allowance for credit loss on these securities as of December 31, 2025. Because 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 at maturity, we did not write down these investments to fair value.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Less than** | **Less than** | **Greater than or** | **Greater than or** | | |
|  | **twelve months** | **twelve months** | **equal to twelve months** | **equal to twelve months** | **Total** | **Total** |
|  |<br>**Fair**<br>**value** | **Gross**<br>**unrealized**<br>**losses** |<br>**Fair**<br>**value** | **Gross**<br>**unrealized**<br>**losses** |<br>**Fair**<br>**value** | **Gross**<br>**unrealized**<br>**losses** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| Fixed maturities, available-for-sale (1): |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;U.S. government and agencies | $710.9 | $17.2 | $806.9 | $280.8 | $1517.8 | $298.0 |
| &nbsp;&nbsp;&nbsp;Non-U.S. governments | 33.0 | 1.3 | 296.8 | 83.1 | 329.8 | 84.4 |
| &nbsp;&nbsp;&nbsp;States and political subdivisions | 743.2 | 25.9 | 4708.2 | 1108.0 | 5451.4 | 1133.9 |
| &nbsp;&nbsp;&nbsp;Corporate | 4659.5 | 149.0 | 19625.6 | 3470.0 | 24285.1 | 3619.0 |
| &nbsp;&nbsp;&nbsp;Residential mortgage-backed pass-through securities | 1652.5 | 27.6 | 1152.5 | 178.6 | 2805.0 | 206.2 |
| &nbsp;&nbsp;&nbsp;Commercial mortgage-backed securities | 691.7 | 8.2 | 3849.1 | 441.5 | 4540.8 | 449.7 |
| &nbsp;&nbsp;&nbsp;Collateralized debt obligations (2) | 582.2 | 1.3 | 28.9 | 5.0 | 611.1 | 6.3 |
| &nbsp;&nbsp;&nbsp;Other debt obligations | 1732.4 | 21.8 | 3677.3 | 554.5 | 5409.7 | 576.3 |
| Total fixed maturities, available-for-sale | $10805.4 | $252.3 | $34145.3 | $6121.5 | $44950.7 | $6373.8 |

---

(1) Fair
value and gross unrealized losses are excluded for available-for-sale securities for which an allowance for credit loss has been
recorded. Gross unrealized losses exclude unallocated basis adjustments related to fair value hedges utilizing the portfolio layer
method.

(2) Primarily
consists of collateralized loan obligations backed by secured corporate loans.

Of the available-for-sale fixed maturities within our consolidated portfolio in a gross unrealized loss position, 97% were investment grade (rated AAA through BBB-) with an average price of 88 (carrying value/amortized cost) as of December 31, 2024. Gross unrealized losses in our fixed maturities portfolio increased during the year ended December 31, 2024, primarily due to an increase in interest rates, which was partially offset by a tightening of credit spreads.

For those securities that had been in a continuous unrealized loss position for less than twelve months, our consolidated portfolio held 1,747 securities reflecting an average price of 98 as of December 31, 2024. Of this portfolio, 96% was investment grade (rated AAA through BBB-) as of December 31, 2024, with associated unrealized losses of $245.4 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 6,219 securities reflecting an average price of 85 and an average credit rating of A as of December 31, 2024. Corporate securities with unrealized losses had an average price of 85 and an average credit rating of BBB+. States and political subdivisions securities with unrealized losses had an average price of 81 and an average credit rating of AA-. Collateralized mortgage obligation securities with unrealized losses had an average price of 83 and an average credit rating of AAA. CMBS with unrealized losses had an average price of 90 and an average credit rating of AA. 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, we did not record an allowance for credit loss on these securities as of December 31, 2024. Because 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 at maturity, we did not write down these investments to fair value.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

**Net Unrealized Gains and Losses on Available-For-Sale Securities and Derivative Instruments**

The net unrealized gains and losses on investments in available-for-sale securities and the net unrealized gains and losses on derivative instruments in cash flow hedge relationships are reported as separate components 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 actuarial balances, policyholder liabilities, noncontrolling interest and applicable income taxes was as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
|  | *(in millions)* | *(in millions)* |
| Net unrealized losses on fixed maturities, available-for-sale (1) | $**(4187.5)** | $(6003.6) |
| Net unrealized gains (losses) on derivative instruments | **(40.0)** | 66.1 |
| Adjustments for assumed changes in amortization patterns | **4.2** | 5.1 |
| Adjustments for assumed changes in policyholder liabilities | **21.2** | 12.2 |
| Net unrealized gains on other investments and noncontrolling interest adjustments | **2.9** | 2.9 |
| Provision for deferred income tax benefits | **894.2** | 1260.7 |
| Net unrealized losses on available-for-sale securities and derivative instruments | $**(3305.0)** | $(4656.6) |

---

(1) Excludes
net unrealized gains (losses) on fixed maturities, available-for-sale included in fair value hedging relationships.

**Financing Receivables**

***Mortgage Loans***

Mortgage loans consist of commercial and residential mortgage loans. Our commercial mortgage loan portfolio consists primarily of non-recourse, fixed rate mortgages on stabilized properties. Our residential mortgage loan portfolio is composed of first lien mortgages.

Commercial and residential mortgage loans are generally reported at cost adjusted for amortization of premiums and accrual of discounts, computed using the interest method and net of valuation allowances. Amortized cost excludes accrued interest receivable. The amortized cost of our residential mortgage loans also includes basis adjustments related to fair value hedges in a closed portfolio. See Note 6, Derivative Financial Instruments, for further information. 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 on the consolidated statements of operations. Accrued interest receivable is reported in accrued investment income on the consolidated statements of financial position. Any changes in the loan valuation allowances are reported in net realized capital gains (losses) on the consolidated statements of operations. Further details relating to our valuation allowance are included under the caption "Financing Receivables Valuation Allowance."

***Reinsurance Recoverable and Deposit Receivable***

Our reinsurance recoverables include amounts due from reinsurers for paid or unpaid claims, claims incurred but not reported or policy benefits. We cede life, disability, medical and long-term care insurance as well as fixed annuity contracts with significant life insurance risk to other insurance companies through reinsurance. Deposit receivables include amounts due from the reinsurer for fixed annuity contracts without significant life insurance risk recorded using the deposit method of accounting.

***Other Loans***

Our other loans include consumer, auto and other loans ("other loans") of a consolidated VIE for which the fair value option was elected as well as consumer loans for which the fair value option was not elected. Other loans are generally subject to amortized cost accounting and a valuation allowance if the fair value option is not elected. Other loans are reported as a component of other investments in the consolidated statements of financial position.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

***Credit Quality Information for Financing Receivables***

The amortized cost of our financing receivables by credit risk and vintage was as follows:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  | **2025** | **2024** | **2023** | **2022** | **2021** | **Prior** | **Total** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| Commercial mortgage loans: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;A- and above | $**1572.7** | $**1319.2** | $**902.5** | $**1034.1** | $**1641.7** | $**6686.9** | $**13157.1** |
| &nbsp;&nbsp;&nbsp;BBB+ thru BBB- | **200.9** | **186.6** | **151.7** | **172.5** | **78.2** | **1146.8** | **1936.7** |
| &nbsp;&nbsp;&nbsp;BB+ thru BB- | **81.4** | **64.2** | **109.5** | **198.2** | **—** | **103.7** | **557.0** |
| &nbsp;&nbsp;&nbsp;B+ and below | **—** | **—** | **32.4** | **—** | **—** | **348.9** | **381.3** |
| &nbsp;&nbsp;&nbsp;Total | $**1855.0** | $**1570.0** | $**1196.1** | $**1404.8** | $**1719.9** | $**8286.3** | $**16032.1** |
| Residential mortgage loans: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Performing | $**1278.9** | $**337.0** | $**336.5** | $**883.7** | $**1075.4** | $**335.3** | $**4246.8** |
| &nbsp;&nbsp;&nbsp;Non-performing | **—** | **1.1** | **4.6** | **6.6** | **5.7** | **1.7** | **19.7** |
| &nbsp;&nbsp;&nbsp;Total excluding portfolio layer method basis adjustments | $**1278.9** | $**338.1** | $**341.1** | $**890.3** | $**1081.1** | $**337.0** | **4266.5** |
| &nbsp;&nbsp;&nbsp;Unallocated portfolio layer method basis adjustment (1) |  |  |  |  |  |  | **(3.6)** |
| &nbsp;&nbsp;&nbsp;Total |  |  |  |  |  |  | $**4262.9** |
| Other loans: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Performing | $**123.1** | $**28.4** | $**27.9** | $**—** | $**—** | $**—** | $**179.4** |
| &nbsp;&nbsp;&nbsp;Non-performing | **1.4** | **3.6** | **1.5** | **—** | **—** | **—** | **6.5** |
| &nbsp;&nbsp;&nbsp;Total | $**124.5** | $**32.0** | $**29.4** | $**—** | $**—** | $**—** | $**185.9** |
| Reinsurance recoverable and deposit receivable |  |  |  |  |  |  | $**23890.0** |

---

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **2024** | **2023** | **2022** | **2021** | **2020** | **Prior** | **Total** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| Commercial mortgage loans: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;A- and above | $1176.9 | $795.1 | $1180.2 | $2016.8 | $1427.7 | $6461.8 | $13058.5 |
| &nbsp;&nbsp;&nbsp;BBB+ thru BBB- | 210.0 | 394.1 | 232.2 | 235.3 | 162.9 | 1198.9 | 2433.4 |
| &nbsp;&nbsp;&nbsp;BB+ thru BB- | 215.7 | 143.4 | 154.3 | 37.8 | 40.1 | 230.4 | 821.7 |
| &nbsp;&nbsp;&nbsp;B+ and below |  |  |  |  |  | 321.7 | 321.7 |
| &nbsp;&nbsp;&nbsp;Total | $1602.6 | $1332.6 | $1566.7 | $2289.9 | $1630.7 | $8212.8 | $16635.3 |
| Residential mortgage loans: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Performing | $324.0 | $372.2 | $935.4 | $1177.8 | $131.3 | $268.6 | $3209.3 |
| &nbsp;&nbsp;&nbsp;Non-performing |  | 3.1 | 4.0 | 3.3 | 1.2 | 2.5 | 14.1 |
| &nbsp;&nbsp;&nbsp;Total excluding portfolio layer method basis adjustments | $324.0 | $375.3 | $939.4 | $1181.1 | $132.5 | $271.1 | 3223.4 |
| &nbsp;&nbsp;&nbsp;Unallocated portfolio layer method basis adjustment (1) |  |  |  |  |  |  | (8.4) |
| &nbsp;&nbsp;&nbsp;Total |  |  |  |  |  |  | $3215.0 |
| Other loans: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Performing | $84.2 | $61.9 | $— | $— | $— | $— | $146.1 |
| &nbsp;&nbsp;&nbsp;Non-performing | 0.1 |  |  |  |  | 0.1 | 0.2 |
| &nbsp;&nbsp;&nbsp;Total | $84.3 | $61.9 | $— | $— | $— | $0.1 | $146.3 |
| Reinsurance recoverable and deposit receivable |  |  |  |  |  |  | $23599.6 |

---

(1) Represents
unallocated basis adjustments related to fair value hedges utilizing the portfolio layer method. See Note 6, Derivative Financial
Instruments, for further details.

The amortized cost of commercial mortgage loans, residential mortgage loans and other loans excluded accrued interest receivable of $65.2 million, $20.0 million and $1.4 million, respectively, as of December 31, 2025, and $68.2 million, $10.9 million and $1.3 million, respectively, as of December 31, 2024.

***Financing Receivables Credit Monitoring***

*Commercial Mortgage Loan 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 models stress 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 an S&P Global ("S&P") bond equivalent rating for commercial mortgage loans. 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 are identified and placed on an internal "watch list". Among the criteria that may 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.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

*Residential Mortgage Loan 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 potential impairment. We define non-performing residential mortgage loans as loans 90 days or greater delinquent or on non-accrual status.

*Other Loans Credit Risk Profile Based on Performance Status*

Our other loans are monitored based on performance of the loans. Monitoring on other loans increases when the loan is delinquent or earlier if there is an indication of potential impairment.

**Non-Accrual Financing Receivables**

Financing receivables are placed on non-accrual status if we have concern regarding the collectability of future payments or if a financing receivable 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, against the valuation allowance or according to the contractual terms. When a financing receivable is placed on non-accrual status, the accrued unpaid interest receivable is reversed against interest income. Accrual of interest resumes after factors resulting in doubts about collectability have improved.

The amortized cost of financing receivables on non-accrual status was as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  |<br>**Beginning**<br>**amortized cost**<br>**on nonaccrual**<br>**status** |<br>**Ending**<br>**amortized cost**<br>**on nonaccrual**<br>**status** | **Amortized cost**<br>**of nonaccrual**<br>**assets without**<br>**a valuation**<br>**allowance** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| Commercial mortgage loans | $**66.6** | $**54.3** | $**—** |
| Residential mortgage loans | **12.2** | **14.6** | **7.0** |
| Other loans | **—** | **6.4** | **6.4** |
| Total | $**78.8** | $**75.3** | $**13.4** |
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  |  |  | **Amortized cost** |
|  | **Beginning** | **Ending** | **of nonaccrual** |
|  | **amortized cost** | **amortized cost** | **assets without** |
|  | **on nonaccrual** | **on nonaccrual** | **a valuation** |
|  | **status** | **status** | **allowance** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| Commercial mortgage loans | $53.9 | $66.6 | $— |
| Residential mortgage loans | 8.2 | 12.2 |  |
| Total | $62.1 | $78.8 | $— |

---

Interest income recognized on non-accrual financing receivables was as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| Commercial mortgage loans | $**0.2** | $0.8 | $1.2 |
| Residential mortgage loans | **0.6** |  |  |
| Total | $**0.8** | $0.8 | $1.2 |

---

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

The aging of our financing receivables, based on amortized cost, was as follows:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  |<br>**30-59 days**<br>**past due** |<br>**60-89 days**<br>**past due** | **90 days or**<br>**more past**<br>**due** |<br>**Total past**<br>**due** |<br>**Current** |<br>**Total (1)** | **90 days or**<br>**more and**<br>**accruing** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| Commercial mortgage loans | $**—** | $**—** | $**96.3** | $**96.3** | $**15935.8** | $**16032.1** | $**42.0** |
| Residential mortgage loans (2) | **19.6** | **6.2** | **14.0** | **39.8** | **4226.7** | **4266.5** | **5.1** |
| Other loans | **2.3** | **1.5** | **8.4** | **12.2** | **173.7** | **185.9** | **2.0** |
| Total | $**21.9** | $**7.7** | $**118.7** | $**148.3** | $**20336.2** | $**20484.5** | $**49.1** |
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  |  |  | **90 days or** |  |  |  | **90 days or** |
|  | **30-59 days** | **60-89 days** | **more past** | **Total past** |  |  | **more and** |
|  | **past due** | **past due** | **due** | **due** | **Current** | **Total (1)** | **accruing** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| Commercial mortgage loans | $57.0 | $— | $20.6 | $77.6 | $16557.7 | $16635.3 | $— |
| Residential mortgage loans (2) | 12.4 |  | 12.4 | 24.8 | 3198.6 | 3223.4 | 1.9 |
| Other loans | 2.1 | 1.8 | 1.6 | 5.5 | 140.8 | 146.3 | 1.4 |
| Total | $71.5 | $1.8 | $34.6 | $107.9 | $19897.1 | $20005.0 | $3.3 |

---

(1) As
of both December 31, 2025 and 2024, no reinsurance recoverables or deposit receivables were considered past due.

(2) Excludes
unallocated basis adjustments related to fair value hedges utilizing the portfolio layer method.

**Financing Receivables Valuation Allowance**

We establish a valuation allowance to provide for the risk of credit losses inherent in our financing receivables. The valuation allowance is maintained at a level believed adequate by management to absorb estimated expected credit losses. The valuation allowance is based on amortized cost excluding accrued interest receivable and includes reserves for pools of financing receivables with similar risk characteristics. We do not measure a credit loss allowance on accrued interest receivable because we write off the uncollectible accrued interest receivable balance to net investment income in a timely manner, generally within 90 days.

For commercial and residential mortgage loans, 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 portfolio, portfolio delinquency information, underwriting standards, peer group information, current and forecasted economic conditions, loss experience and other relevant factors. For reinsurance recoverables and deposit receivables, management's periodic evaluation and assessment of the valuation allowance adequacy is based on known and inherent risks, adverse situations that may affect a reinsurer's ability to repay, current and forecasted economic conditions, industry loss experience and other relevant factors.

Our commercial mortgage loans are pooled 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 and forecasted environmental factors management believes to be relevant. Environmental factors are forecasted for two years or less with immediate reversion to historical experience. A commercial mortgage loan is evaluated individually if it does not continue to share similar risk characteristics of a pool. We analyze the need for an individual evaluation for any commercial mortgage loan that is delinquent for 60 days or more, in process of foreclosure, restructured, on the internal "watch list" or that currently is evaluated individually.

We estimate expected credit losses for certain commercial mortgage loan commitments where we have a contractual obligation to extend credit. The expected credit losses are estimated based on the commercial mortgage loan valuation allowance process described previously, adjusted for probability of funding. The estimated expected credit losses for commercial mortgage loan commitments are reported in other liabilities on the consolidated statements of financial position. The change in the credit loss liability for commitments is included in net realized capital gains (losses) on the consolidated statements of operations. Once funded, expected credit losses for commercial mortgage loans are included within the commercial mortgage loan valuation allowance described previously.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

We evaluate residential mortgage loans based on aggregated risk factors and historical loss experience by pool type. We adjust these quantitative factors for qualitative factors of present and forecasted conditions. Qualitative factors include items such as economic and business conditions, changes in the portfolio, value of underlying collateral and concentrations. A residential mortgage loan is evaluated individually if it does not continue to share similar risk characteristics of a pool. We analyze the need for an individual evaluation for any residential mortgage loan that is delinquent for 60 days or more, in process of foreclosure, restructured, on the internal "watch list" or that currently is evaluated individually.

As discussed previously, commercial and residential mortgage loans are evaluated individually if the asset does not continue to share similar risk characteristics of a pool. When we determine a commercial or residential mortgage loan is probable of foreclosure, a valuation allowance is established equal to the difference between the carrying amount of the mortgage loan and the estimated value of the collateral reduced by the cost to sell or for certain residential mortgage loans, the present value of the loan's expected future cash flows. For certain commercial mortgage loans where repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty, we elect to establish a valuation allowance equal to the difference between the carrying amount of the mortgage loan and the estimated value of the real estate collateral, which may be reduced by the cost to sell. Estimated value may also be based on either the present value of the expected future cash flows discounted at the asset's effective interest rate or the asset's observable market price. Subsequent changes in the estimated value are reflected in the valuation allowance. Amounts on financing receivables deemed to be uncollectible are charged off and removed from the valuation allowance. The change in the valuation allowance for loans is included in net realized capital gains (losses) on the consolidated statements of operations.

Our reinsurance recoverables and deposit receivable are pooled by reinsurer risk rating with an estimated loss ratio applied against each risk rating level. The loss ratio is generally based upon industry historical loss experience and expected recovery timing as adjusted for certain current and forecasted environmental factors management believes to be relevant. Environmental factors are forecasted for five years or less with immediate reversion to industry historical experience. A reinsurance recoverable or deposit receivable is evaluated individually if it does not continue to share similar risk characteristics of a pool. We analyze the need for an individual evaluation for any reinsurance recoverable or deposit receivable based on past due payments and changes in reinsurer risk ratings. The change in the valuation allowance for reinsurance recoverables and deposit receivable is included in benefits, claims and settlement expenses on the consolidated statements of operations.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

A rollforward of our valuation allowance was as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** |
|  | **Commercial**<br>**mortgage**<br>**loans** | **Residential**<br>**mortgage**<br>**loans** |<br>**Reinsurance**<br>**recoverables** |<br>**Total** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| Beginning balance | $**186.2** | $**6.2** | $**3.3** | $**195.7** |
| Provision | **53.7** | **4.2** | **(0.1)** | **57.8** |
| Charge-offs | **(56.9)** | **(0.1)** | **—** | **(57.0)** |
| Recoveries | **0.5** | **4.8** | **—** | **5.3** |
| Ending balance | $**183.5** | $**15.1** | $**3.2** | $**201.8** |
| Accrued interest income written off to net investment income | $**3.9** | $**—** | $**—** | $**3.9** |
|  | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** |
|  | **Commercial** | **Residential** |  |  |
|  | **mortgage** | **mortgage** | **Reinsurance** |  |
|  | **loans** | **loans** | **recoverables** | **Total** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| Beginning balance | $126.1 | $6.1 | $3.2 | $135.4 |
| Provision | 111.5 | (0.6) | 0.1 | 111.0 |
| Charge-offs | (51.4) | (0.2) |  | (51.6) |
| Recoveries |  | 0.9 |  | 0.9 |
| Ending balance | $186.2 | $6.2 | $3.3 | $195.7 |
| Accrued interest income written off to net investment income | $0.3 | $— | $— | $0.3 |
|  | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** |
|  | **Commercial** | **Residential** |  |  |
|  | **mortgage** | **mortgage** | **Reinsurance** |  |
|  | **loans** | **loans** | **recoverables** | **Total** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| Beginning balance | $75.5 | $5.0 | $2.7 | $83.2 |
| Provision | 50.6 |  | 0.5 | 51.1 |
| Charge-offs |  | (0.4) |  | (0.4) |
| Recoveries |  | 1.5 |  | 1.5 |
| Ending balance | $126.1 | $6.1 | $3.2 | $135.4 |
| Accrued interest income written off to net investment income | $— | $— | $— | $— |

---

For the years ended December 31, 2025, 2024 and 2023, no allowance was recorded for other loans.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

**Mortgage Loans**

We periodically purchase mortgage loans as well as sell mortgage loans we have originated. Mortgage loans purchased and sold were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| Commercial mortgage loans: |  |  |  |
| &nbsp;&nbsp;&nbsp;Purchased | $**46.1** | $116.8 | $108.1 |
| &nbsp;&nbsp;&nbsp;Sold | **218.7** | 144.2 |  |
| Residential mortgage loans: |  |  |  |
| &nbsp;&nbsp;&nbsp;Purchased (1) | **1589.0** | 354.4 | 505.6 |
| &nbsp;&nbsp;&nbsp;Sold | **8.1** | 5.8 | 99.3 |

---

(1) 2025
includes mortgages purchased as part of a new investment focus. 2023 includes mortgage loans purchased by residential mortgage
loan VIEs.

Our commercial mortgage loan portfolio is diversified by geographic region and specific collateral property type as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2024** | **December 31, 2024** |
|  | **Amortized**<br>**cost** | **Percent**<br>**of total** | **Amortized**<br>**cost** | **Percent**<br>**of total** |
|  | *($ in millions)* | *($ in millions)* | *($ in millions)* | *($ in millions)* |
| **Geographic distribution** |  |  |  |  |
| New England | $**442.1** | **2.8%** | $348.2 | 2.1% |
| Middle Atlantic | **4414.0** | **27.4** | 4726.6 | 28.4 |
| East North Central | **464.5** | **2.9** | 592.1 | 3.6 |
| West North Central | **285.3** | **1.8** | 394.8 | 2.4 |
| South Atlantic | **3075.5** | **19.2** | 2995.0 | 18.0 |
| East South Central | **367.0** | **2.3** | 418.3 | 2.5 |
| West South Central | **1425.8** | **8.9** | 1313.9 | 7.9 |
| Mountain | **1219.8** | **7.6** | 981.1 | 5.9 |
| Pacific | **4338.1** | **27.1** | 4865.3 | 29.2 |
| Total | $**16032.1** | **100.0%** | $16635.3 | 100.0% |
| **Property type distribution** |  |  |  |  |
| Office | $**2803.3** | **17.5%** | $3189.6 | 19.2% |
| Retail | **1583.5** | **9.9** | 1479.8 | 8.9 |
| Industrial | **4300.0** | **26.8** | 4376.2 | 26.3 |
| Apartments | **6994.7** | **43.6** | 7239.1 | 43.5 |
| Hotel | **31.0** | **0.2** | 65.0 | 0.4 |
| Mixed use/other | **319.6** | **2.0** | 285.6 | 1.7 |
| Total | $**16032.1** | **100.0%** | $16635.3 | 100.0% |

---

**Mortgage Loan Modifications**

Our commercial and residential mortgage loan portfolios include loans that have been modified. We assess loan modifications that are related to our borrowers experiencing financial difficulty in the form of principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, or a term extension (or a combination thereof). Generally, an assessment of whether a borrower is experiencing financial difficulty is made on the date of the modification.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

The financing receivables valuation allowance utilizes an estimate of lifetime expected credit losses and it is recorded on each loan upon origination or acquisition. The starting point for the estimate of the valuation allowance is historical loss information, which includes losses from modification of receivables to borrowers experiencing financial difficulty. Because the effect of most modifications made to borrowers experiencing financial difficulty is already included in the valuation allowance because of the measurement methodologies used to estimate the allowance, a change to the valuation allowance is generally not recorded upon modification.

Occasionally, a modification of a loan from a borrower experiencing financial difficulty is in the form of principal forgiveness. When principal forgiveness is provided as a modification, the amount of the principal forgiven is deemed uncollectible. Therefore, that portion of the loan is written off, which results in a reduction of the amortized cost and a corresponding adjustment to the valuation allowance.

In some cases, we modify a loan by providing multiple types of concessions. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness may be granted.

We did not have any significant mortgage loans that were modified for the years ended December 31, 2025, 2024 and 2023.

**Real Estate**

Depreciation expense on invested real estate was $67.0 million, $69.5 million and $69.8 million in 2025, 2024 and 2023, respectively. Accumulated depreciation was $975.9 million and $925.2 million as of December 31, 2025 and 2024, respectively.

**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,** | **December 31,** |
|  | **2025** | **2024** |
|  | *(in millions)* | *(in millions)* |
| Total assets | $**145087.9** | $138031.1 |
| Total liabilities | **18872.9** | 14294.2 |
| Total equity | $**126215.0** | $123736.9 |
| Net investment in unconsolidated entities | $**3342.9** | $2527.4 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| Total revenues | $**24477.8** | $14542.8 | $2555.9 |
| Net income (loss) | **13377.5** | 8914.6 | (3110.6) |
| Our share of net income of unconsolidated entities | **269.6** | 164.1 | 151.0 |

---

In addition, other investments include other loans. See the captions "Financing Receivables" and "Financing Receivables Valuation Allowance" for further details related to our valuation of other loans.

Furthermore, other investments include $1,355.5 million and $1,273.5 million of cash surrender value of company owned life insurance as of December 31, 2025 and 2024, respectively.

Derivative assets are carried at fair value and reported as a component of other investments. See Note 6, Derivative Financial Instruments, for further details.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

**Securities Posted as Collateral**

As of December 31, 2025 and 2024, we posted $6,587.5 million and $6,748.8 million, respectively, in commercial mortgage loans and residential first lien mortgages to satisfy collateral requirements associated with our obligation under funding agreements with Federal Home Loan Bank of Des Moines ("FHLB Des Moines"). In addition, as of December 31, 2025 and 2024, we posted $3,610.4 million and $3,615.0 million, respectively, in fixed maturities, available-for-sale and trading securities to satisfy collateral requirements primarily associated with a reinsurance arrangement, our derivative credit support annex (collateral) agreements, Futures Commission Merchant ("FCM") agreements, a lending arrangement and our obligation under funding agreements with FHLB Des Moines. Since we did not relinquish ownership rights on these instruments, they are reported as mortgage loans, fixed maturities, available-for-sale and fixed maturities, trading, respectively, on our consolidated statements of financial position. Of the securities posted as collateral, as of December 31, 2025 and 2024, $477.4 million and $206.0 million, respectively, could 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** | **Gross amounts not offset in the** | |
|  | | **consolidated statements** | **consolidated statements** | |
|  | | **of financial position** | **of financial position** | |
|  |<br><br>**Gross amount**<br>**of recognized**<br>**assets (1)** |<br>**Financial**<br>**instruments (2)** |<br>**Collateral**<br>**received** |<br><br><br>**Net amount** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| **December 31, 2025** |  |  |  |  |
| Derivative assets | $**1154.8** | $**(330.6)** | $**(823.4)** | $**0.8** |
| Reverse repurchase agreements | **43.6** | **—** | **(43.6)** | **—** |
| &nbsp;&nbsp;&nbsp;Total | $**1198.4** | $**(330.6)** | $**(867.0)** | $**0.8** |
| **December 31, 2024** |  |  |  |  |
| Derivative assets | $629.7 | $(241.8) | $(387.0) | $0.9 |
| Reverse repurchase agreements | 97.5 |  | (97.5) |  |
| &nbsp;&nbsp;&nbsp;Total | $727.2 | $(241.8) | $(484.5) | $0.9 |

---

(1) The
gross amount of recognized derivative and reverse repurchase agreement assets are reported with other investments and cash and
cash equivalents, respectively, on the consolidated statements of financial position. The gross amounts of derivative and reverse
repurchase agreement assets are not netted against offsetting liabilities for presentation on the consolidated statements of financial
position.

(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.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

Financial liabilities subject to master netting agreements or similar agreements were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | | **Gross amounts not offset in the** | **Gross amounts not offset in the** | |
|  | | **consolidated statements** | **consolidated statements** | |
|  | | **of financial position** | **of financial position** | |
|  |<br><br>**Gross amount**<br>**of recognized**<br>**liabilities (1)** |<br>**Financial**<br>**instruments (2)** |<br>**Collateral**<br>**pledged** |<br><br><br>**Net amount** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| **December 31, 2025** |  |  |  |  |
| Derivative liabilities | $**546.0** | $**(330.6)** | $**(204.5)** | $**10.9** |
| **December 31, 2024** |  |  |  |  |
| Derivative liabilities | $471.4 | $(241.8) | $(226.4) | $3.2 |

---

(1) The
gross amount of recognized derivative liabilities is reported with other liabilities on the consolidated statements of financial
position. The above excludes derivative liabilities, which are primarily embedded derivatives that are not subject to master netting
agreements or similar agreements. The gross amounts of derivative liabilities are 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 or variation margin provisions, which are 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 expenses 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 agreements as of December 31, 2025 and December 31, 2024.

**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 and income generation 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.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

Interest rate swaps are contracts in which we agree with other parties to exchange, at specified intervals, the difference between fixed rate and/or 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; to hedge against cash variability related to forecasted transactions and to hedge against changes in the value of the guaranteed minimum withdrawal benefit ("GMWB") MRB. 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. Additionally, we utilize interest rate swaps to replicate the returns of floating rate assets.

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 options to manage prepayment risks in our assets and minimum guaranteed interest rates and lapse risks in our liabilities.

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 use exchange-traded interest rate futures to hedge against changes in value of the GMWB MRB.

Interest rate forwards, including bond forwards and treasury forwards, are contracts to take delivery of a fixed income security at a specified price at a future date. Bond forwards and treasury forwards deliver corporate or municipal and U.S. Treasury bonds, respectively. At inception of certain treasury forward contracts, we do not intend to take physical delivery. We intend to take delivery of the bond forwards referencing corporate, municipal and certain treasury bonds. Treasury forwards are used to hedge against changes in the value of the GMWB MRB and to more closely match the interest rate characteristics of assets and liabilities. Bond forwards are used to gain leverage through synthetic exposure during the forward period and fix the purchase price of a bond at a specified date in future.

***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 issued to nonqualified institutional investors in the international market and foreign currency-denominated fixed maturity and equity securities we invest in. We use various derivatives to manage our exposure to fluctuations in 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.

Currency forwards are contracts in which we agree with other parties to deliver or receive a specified amount of an identified currency at a specified future date. Typically, the price is agreed upon at the time of the contract and payment for such a contract is made at the specified future date. We use currency forwards to hedge certain foreign-denominated investments.

***Equity Contracts***

Equity risk is the risk that we will incur economic losses due to adverse fluctuations in common stock prices. We use various derivatives to manage our exposure to equity risk, which arises from products in which the return or interest we credit is tied to an external equity index as well as products subject to minimum contractual guarantees.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

We purchase equity call spreads ("option collars") 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 equity put options to hedge against changes in the value of the GMWB MRB related to the GMWB rider on our variable annuity products. We also use equity options to hedge returns credited to policyholder accounts related to our RILA products. The premium associated with certain options is paid quarterly over the life of the option contract.

We use exchange-traded equity futures to hedge against changes in the value of the GMWB MRB and returns credited to policyholder accounts related to our RILA products. We have used equity futures to hedge the economic exposure to certain fund closures in process.

We use equity total return swaps to hedge for income enhancement. Total return swaps are contracts in which we agree with other parties to periodically exchange the total return on a referenced security for an agreed-upon reference rate or spread based on specified notional amounts.

***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.

We also use credit total return swaps for income enhancement. In the case of a predefined credit event, total return swaps require the total return receiver to pay for the decline in the price of the referenced security.

In cases where we sell protection, we also buy a quality cash bond to match against the 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 swap.

***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 offer group annuity contracts that have guaranteed separate accounts as an investment option. We have fixed deferred annuities, RILAs and universal life products that credit interest based on changes in an external equity index.

We have a funds withheld payable associated with coinsurance with funds withheld reinsurance agreements. The funds withheld payable has an embedded total return swap as the total return of the funds withheld assets are transferred to the reinsurers, which is not based on our own creditworthiness.

**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.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

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 of bilateral OTC derivatives 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. OTC cleared derivatives have variation margin that is legally characterized as settlement of the derivative exposure, which reduces their fair value in the consolidated statements of financial position.

We posted $479.0 million and $512.0 million in cash and securities under collateral arrangements as of December 31, 2025 and December 31, 2024, respectively, to satisfy collateral and initial margin requirements associated with our derivative credit support agreements and FCM agreements.

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, 2025 and December 31, 2024, was $542.0 million and $472.3 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 provisions, we posted collateral and initial margin of $479.0 million and $512.0 million as of December 31, 2025 and December 31, 2024, 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, 2025, we would be required to post up to an additional $120.9 million of collateral to our counterparties.

As of December 31, 2025 and December 31, 2024, we had received $767.8 million and $345.3 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.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

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, 2025** | **December 31, 2024** |
|  | *(in millions)* | *(in millions)* |
| **Notional amounts of derivative instruments** |  |  |
| ***Interest rate contracts:*** |  |  |
| &nbsp;&nbsp;&nbsp;Interest rate swaps | $**60267.1** | $60776.6 |
| &nbsp;&nbsp;&nbsp;Interest rate options | **3578.0** | 4735.0 |
| &nbsp;&nbsp;&nbsp;Interest rate futures | **1972.0** | 845.0 |
| &nbsp;&nbsp;&nbsp;Interest rate forwards | **1687.0** | 2125.6 |
| ***Foreign exchange contracts:*** |  |  |
| &nbsp;&nbsp;&nbsp;Currency swaps | **3319.6** | 2669.3 |
| &nbsp;&nbsp;&nbsp;Currency forwards | **59.5** | 56.0 |
| ***Equity contracts:*** |  |  |
| &nbsp;&nbsp;&nbsp;Equity options | **7449.3** | 4380.1 |
| &nbsp;&nbsp;&nbsp;Equity futures | **1699.1** | 852.5 |
| &nbsp;&nbsp;&nbsp;Total return swaps | **499.6** | 775.3 |
| ***Credit contracts:*** |  |  |
| &nbsp;&nbsp;&nbsp;Credit default swaps | **531.0** | 375.0 |
| &nbsp;&nbsp;&nbsp;Total return swaps | **500.0** | 250.0 |
| ***Other contracts:*** |  |  |
| &nbsp;&nbsp;&nbsp;Embedded derivatives | **31377.6** | 27797.5 |
| Total notional amounts at end of period | $**112939.8** | $105637.9 |
| **Credit exposure of derivative instruments** |  |  |
| ***Interest rate contracts:*** |  |  |
| &nbsp;&nbsp;&nbsp;Interest rate swaps | $**13.2** | $10.0 |
| &nbsp;&nbsp;&nbsp;Interest rate options | **4.0** | 28.1 |
| &nbsp;&nbsp;&nbsp;Interest rate forwards | **1.1** |  |
| ***Foreign exchange contracts:*** |  |  |
| &nbsp;&nbsp;&nbsp;Currency swaps | **149.6** | 178.1 |
| &nbsp;&nbsp;&nbsp;Currency forwards | **0.6** | 2.4 |
| ***Equity contracts:*** |  |  |
| &nbsp;&nbsp;&nbsp;Equity options | **971.5** | 388.1 |
| &nbsp;&nbsp;&nbsp;Total return swaps | **—** | 20.8 |
| ***Credit contracts:*** |  |  |
| &nbsp;&nbsp;&nbsp;Credit default swaps | **3.4** | 4.0 |
| &nbsp;&nbsp;&nbsp;Total return swaps | **18.8** | 14.3 |
| Total gross credit exposure | **1162.2** | 645.8 |
| Less: collateral received | **865.5** | 432.8 |
| Net credit exposure | $**296.7** | $213.0 |

---

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

The fair value of our derivative instruments classified as assets and liabilities was as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Derivative assets (1)** | **Derivative assets (1)** | **Derivative liabilities (2)** | **Derivative liabilities (2)** |
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2025** | **December 31, 2024** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| **Derivatives designated as hedging instruments** |  |  |  |  |
| Interest rate contracts | $**—** | $— | $**69.8** | $83 |
| Foreign exchange contracts | **144.6** | 169.5 | **138.3** | 20.7 |
| Total derivatives designated as hedging instruments | $**144.6** | $169.5 | $**208.1** | $103.7 |
| **Derivatives not designated as hedging instruments** |  |  |  |  |
| Interest rate contracts | $**16.9** | $35.4 | $**136.0** | $246.9 |
| Foreign exchange contracts | **0.6** | 2.4 | **3.9** |  |
| Equity contracts | **971.5** | 405 | **191.6** | 119.8 |
| Credit contracts | **21.2** | 17.4 | **6.4** | 1 |
| Other contracts | **—** |  | **(1022.4)** | (2327.8) |
| Total derivatives not designated as hedging instruments | **1010.2** | 460.2 | **(684.5)** | (1960.1) |
| Total derivative instruments | $**1154.8** | $629.7 | $**(476.4)** | $(1856.4) |

---

(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 derivatives with a net liability fair value of $1,410.2
million and $578.2 million as of December 31, 2025 and 2024, respectively, are reported with contractholder funds on the consolidated
statements of financial position. Embedded derivatives with a net (asset) liability fair value of $(2,432.6) million and $(2,906.0)
million as of December 31, 2025 and 2024, respectively, are reported with funds withheld payable 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. Our credit derivative contracts sold reference a single name or reference security (referred to as "single name credit default swaps" or "single name total return swaps"). These instruments are either referenced in an OTC 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 may have purchased credit protection with identical underlyings to certain of our sold protection transactions. As of December 31, 2025 and 2024, we did not purchase credit protection relating to our sold protection transactions. In certain circumstances, our potential loss could also be reduced by any amount recovered in the default proceedings of the underlying credit name.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

The following tables show our derivative 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, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  | <br>**Notional**<br>**amount** | <br>**Fair**<br>**value** | <br>**Maximum**<br>**future**<br>**payments** | **Weighted**<br>**average**<br>**expected life**<br>**(in years)** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |  |
| **Single name credit default swaps** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Corporate debt |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;AA | $**96.7** | $**1.0** | $**96.7** | **6.4** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A | **219.3** | **(3.2)** | **219.3** | **7.2** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BBB | **130.0** | **2.3** | **130.0** | **1.5** |
| Total single name credit default swaps | **446.0** | **0.1** | **446.0** | **5.3** |
| **Single name total return swaps** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Government/municipalities |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;AAA | **40.0** | **1.2** | **40.0** | **29.6** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;AA | **195.0** | **3.5** | **195.0** | **20.5** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A | **210.0** | **9.5** | **210.0** | **21.6** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BBB | **55.0** | **1.8** | **55.0** | **15.3** |
| Total single name total return swaps | **500.0** | **16.0** | **500.0** | **21.1** |
| Total credit derivatives sold | $**946.0** | $**16.1** | $**946.0** | **13.7** |

---

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | <br>**Notional**<br>**amount** | <br>**Fair**<br>**value** | <br>**Maximum**<br>**future**<br>**payments** | **Weighted**<br>**average**<br>**expected life**<br>**(in years)** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |  |
| **Single name credit default swaps** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Corporate debt |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A | $40.0 | $0.2 | $40.0 | 0.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BBB | 160.0 | 3.6 | 160.0 | 2.1 |
| &nbsp;&nbsp;&nbsp;Sovereign |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A | 20.0 | 0.1 | 20.0 | 0.5 |
| Total single name credit default swaps | 220.0 | 3.9 | 220.0 | 1.7 |
| **Single name total return swaps** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Government/municipalities |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;AAA | 40.0 | 2.3 | 40.0 | 30.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;AA | 130.0 | 6.4 | 130.0 | 26.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A | 80.0 | 4.8 | 80.0 | 30.7 |
| Total single name total return swaps | 250.0 | 13.5 | 250.0 | 28.5 |
| Total credit derivatives sold | $470.0 | $17.4 | $470.0 | 15.9 |

---

**Fair Value and Cash Flow Hedges**

***Fair Value Hedges***

We use fixed-to-floating rate interest rate swaps to more closely align the interest rate characteristics of certain assets and also use them to align the interest rate characteristics of certain 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 into U.S. dollar denominated instruments to hedge the exposure to future currency volatility on those items.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

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. The currency related impacts of currency swap transactions for derivatives in fair value hedges is recorded as an adjustment to net realized capital gains or losses of the underlying hedged item in our consolidated statements of operations.

The following amounts were recorded on the consolidated statements of financial position related to cumulative basis adjustments for fair value hedges. The amortized cost includes the amortized cost basis and the fair value hedging basis adjustment.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | | | **Cumulative amount of fair** | **Cumulative amount of fair** |
| | | | **value hedging basis adjustment** | **value hedging basis adjustment** |
| | | | **increase/(decrease) included in the** | **increase/(decrease) included in the** |
| | **Carrying amount of hedged item** | **Carrying amount of hedged item** | **carrying amount of the hedged item** | **carrying amount of the hedged item** |
| <br>**Line item in the consolidated statements**<br>**of financial position in which the**<br>**hedged item is included** | **December 31, 2025** | **December 31, 2024** | **December 31, 2025** | **December 31, 2024** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| Fixed maturities, available-for-sale (1): |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Active hedging relationships | $**2741.8** | $3152.7 | $**(15.8)** | $(88.8) |
| &nbsp;&nbsp;&nbsp;Discontinued hedging relationships | **782.9** | 527.4 | **(6.2)** | (7.0) |
| Total fixed maturities, available-for-sale in active or discontinued hedging relationships | $**3524.7** | $3680.1 | $**(22.0)** | $(95.8) |
| Mortgage loans (2): |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Active hedging relationships | $**1471.5** | $1698.7 | $**(3.6)** | $(8.4) |
| &nbsp;&nbsp;&nbsp;Discontinued hedging relationships | **345.0** |  | **1.2** |  |
| Total mortgage loans in active or discontinued hedging relationships | $**1816.5** | $1698.7 | $**(2.4)** | $(8.4) |
| Investment contracts: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Active hedging relationships | $**3743.8** | $2769.6 | $**35.4** | $(22.0) |
| Total investment contracts in active or discontinued hedging relationships | $**3743.8** | $2769.6 | $**35.4** | $(22.0) |

---

(1) These
amounts include the amortized cost basis of closed portfolios used to designate portfolio layer hedging relationships in which
the hedged layer amount is expected to remain at the end of the hedging relationship. As of December 31, 2025 and December 31,
2024, the amortized cost basis of the closed portfolios used in these hedging relationships was $2,303.5 million and $2,793.5
million, respectively, the cumulative basis adjustments associated with these hedging relationships was $(16.9) million and $(55.7)
million, respectively, and the amount of the designated hedged items were $954.0 million and $1,160.0 million, respectively.

(2) These
amounts include the amortized cost basis of closed portfolios used to designate portfolio layer hedging relationships in which
the hedged layer amount is expected to remain at the end of the hedging relationship. As of December 31, 2025 and December 31,
2024, the amortized cost basis of the closed portfolios used in these hedging relationships was $1,471.5 million and $1,698.7
million, respectively, the cumulative basis adjustments associated with these hedging relationships was $(3.6) million and $(8.4)
million, respectively, and the amount of the designated hedged items were $192.5 million and $220.0 million, respectively.

For the years ended December 31, 2025, 2024 and 2023, $2.2 million, $(0.9) million and $(1.8) million, respectively, of the derivative instruments' gains (losses) were excluded from the assessment of hedge effectiveness.

***Cash Flow Hedges***

We utilize floating-to-fixed rate interest rate swaps to eliminate the variability in cash flows of recognized financial assets and have used them to eliminate the variability in cash flows of liabilities.

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.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

We use bond forwards and floating-to-fixed rate interest rate swaps to hedge forecasted transactions.

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 1.2 years. As of December 31, 2025, we had $15.5 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.

The following table shows the effect of derivatives in cash flow hedging relationships on the consolidated statements of financial position.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | | **Amount of gain (loss) recognized in AOCI on derivatives** | **Amount of gain (loss) recognized in AOCI on derivatives** | **Amount of gain (loss) recognized in AOCI on derivatives** |
| | | **for the year ended December 31,** | **for the year ended December 31,** | **for the year ended December 31,** |
| <br>**Derivatives in cash flow**<br>**hedging relationships** | <br>**Related hedged item** | **2025** | **2024** | **2023** |
|  |  | *(in millions)* | *(in millions)* | *(in millions)* |
| Interest rate contracts | Fixed maturities, available-for-sale | $**15.5** | $(10.8) | $30.4 |
| Interest rate contracts | Investment contracts | **—** | (9.0) | (11.0) |
| Foreign exchange contracts | Fixed maturities, available-for-sale | **(119.6)** | 92.2 | (64.0) |
| Total |  | $**(104.1)** | $72.4 | $(44.6) |

---

We expect to reclassify net gains of $32.8 million from AOCI into net income in the next twelve months, which includes both net deferred gains on discontinued hedges and net gains on periodic settlements of active hedges. Actual amounts may vary from this amount as a result of market conditions.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

***Effect of Fair Value and Cash Flow Hedges on Consolidated Statements of Operations***

The following tables show the effect of derivatives in fair value and cash flow hedging relationships and the related hedged items on the consolidated statements of operations.

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** |
|  | **Net investment**<br>**income related**<br>**to hedges of**<br>**fixed maturities,**<br>**available-**<br>**for-sale and**<br>**mortgage loans** | **Net realized**<br>**capital gains**<br>**(losses) related to**<br>**hedges of fixed**<br>**maturities,**<br>**available-**<br>**for-sale** |<br>**Benefits, claims**<br>**and settlement**<br>**expenses related**<br>**to hedges of**<br>**investment**<br>**contracts** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| Total amounts of consolidated statement of operations line items in which the effects of fair value and cash flow hedges are reported | $**3730.0** | $**(54.3)** | $**7128.4** |
| Gains (losses) on fair value hedging relationships: |  |  |  |
| Interest rate contracts: |  |  |  |
| &nbsp;&nbsp;&nbsp;Gain recognized on hedged item | $**51.2** | $**—** | $**57.4** |
| &nbsp;&nbsp;&nbsp;Loss recognized on derivatives | **(51.6)** | **—** | **(59.0)** |
| &nbsp;&nbsp;&nbsp;Amortization of hedged item basis adjustments | **3.5** | **—** | **—** |
| &nbsp;&nbsp;&nbsp;Amounts related to periodic settlements on derivatives | **36.3** | **—** | **(18.4)** |
| Foreign exchange contracts: |  |  |  |
| &nbsp;&nbsp;&nbsp;Gain recognized on hedged item | **—** | **25.1** | **—** |
| &nbsp;&nbsp;&nbsp;Loss recognized on derivatives | **—** | **(25.1)** | **—** |
| &nbsp;&nbsp;&nbsp;Amounts related to periodic settlements on derivatives | **3.1** | **—** | **—** |
| Total gain (loss) recognized for fair value hedging relationships | $**42.5** | $**—** | $**(20.0)** |
| Gains (losses) on cash flow hedging relationships: |  |  |  |
| Interest rate contracts: |  |  |  |
| &nbsp;&nbsp;&nbsp;Gain (loss) reclassified from AOCI on derivatives | $**2.4** | $**—** | $**(0.2)** |
| &nbsp;&nbsp;&nbsp;Gain reclassified from AOCI as a result that a forecasted transaction is no longer probable of occurring | **—** | **2.0** | **—** |
| &nbsp;&nbsp;&nbsp;Amounts related to periodic settlements on derivatives | **(0.6)** | **—** | **—** |
| Foreign exchange contracts: |  |  |  |
| &nbsp;&nbsp;&nbsp;Gain reclassified from AOCI on derivatives | **—** | **1.4** | **—** |
| &nbsp;&nbsp;&nbsp;Amounts related to periodic settlements on derivatives | **33.9** | **—** | **—** |
| Total gain (loss) recognized for cash flow hedging relationships | $**35.7** | $**3.4** | $**(0.2)** |

---

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** |
|  | **Net investment**<br>**income related**<br>**to hedges of**<br>**fixed maturities,**<br>**available-**<br>**for-sale and**<br>**mortgage loans** | **Net realized**<br>**capital gains**<br>**(losses) related to**<br>**hedges of fixed**<br>**maturities,**<br>**available-**<br>**for-sale** |<br>**Benefits, claims**<br>**and settlement**<br>**expenses related**<br>**to hedges of**<br>**investment**<br>**contracts** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| Total amounts of consolidated statement of operations line items in which the effects of fair value and cash flow hedges are reported | $3534.4 | $(152.2) | $6832.4 |
| Gains (losses) on fair value hedging relationships: |  |  |  |
| Interest rate contracts: |  |  |  |
| &nbsp;&nbsp;&nbsp;Loss recognized on hedged item | $(4.0) | $— | $(22.3) |
| &nbsp;&nbsp;&nbsp;Gain recognized on derivatives | 6.1 |  | 25.8 |
| &nbsp;&nbsp;&nbsp;Amortization of hedged item basis adjustments | 2.6 |  |  |
| &nbsp;&nbsp;&nbsp;Amounts related to periodic settlements on derivatives | 59.0 |  | (23.4) |
| Foreign exchange contracts: |  |  |  |
| &nbsp;&nbsp;&nbsp;Loss recognized on hedged item |  | (11.7) |  |
| &nbsp;&nbsp;&nbsp;Gain recognized on derivatives |  | 11.7 |  |
| &nbsp;&nbsp;&nbsp;Amounts related to periodic settlements on derivatives | 3.1 |  |  |
| Total gain (loss) recognized for fair value hedging relationships | $66.8 | $— | $(19.9) |
| Gains on cash flow hedging relationships: |  |  |  |
| Interest rate contracts: |  |  |  |
| &nbsp;&nbsp;&nbsp;Gain (loss) reclassified from AOCI on derivatives | $3.4 | $— | $(0.2) |
| &nbsp;&nbsp;&nbsp;Gain reclassified from AOCI as a result that a forecasted transaction is no longer probable of occurring |  | 0.5 |  |
| &nbsp;&nbsp;&nbsp;Amounts related to periodic settlements on derivatives |  |  | 9.8 |
| Foreign exchange contracts: |  |  |  |
| &nbsp;&nbsp;&nbsp;Loss reclassified from AOCI on derivatives |  | (0.2) |  |
| &nbsp;&nbsp;&nbsp;Amounts related to periodic settlements on derivatives | 26.1 |  |  |
| Total gain recognized for cash flow hedging relationships | $29.5 | $0.3 | $9.6 |

---

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** |
|  | **Net investment**<br>**income related**<br>**to hedges of**<br>**fixed maturities,**<br>**available-**<br>**for-sale and**<br>**mortgage loans** | **Net realized**<br>**capital gains**<br>**(losses) related to**<br>**hedges of fixed**<br>**maturities,**<br>**available-**<br>**for-sale** |<br>**Benefits, claims**<br>**and settlement**<br>**expenses related**<br>**to hedges of**<br>**investment**<br>**contracts** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| Total amounts of consolidated statement of operations line items in which the effects of fair value and cash flow hedges are reported | $3285.5 | $(154.7) | $7226.2 |
| Gains (losses) on fair value hedging relationships: |  |  |  |
| Interest rate contracts: |  |  |  |
| &nbsp;&nbsp;&nbsp;Gain recognized on hedged item | $45.3 | $— | $0.4 |
| &nbsp;&nbsp;&nbsp;Loss recognized on derivatives | (43.9) |  | (2.1) |
| &nbsp;&nbsp;&nbsp;Amortization of hedged item basis adjustments | (0.2) |  |  |
| &nbsp;&nbsp;&nbsp;Amounts related to periodic settlements on derivatives | 60.5 |  | (2.6) |
| Foreign exchange contracts: |  |  |  |
| &nbsp;&nbsp;&nbsp;Gain recognized on hedged item |  | 3.7 |  |
| &nbsp;&nbsp;&nbsp;Loss recognized on derivatives |  | (3.7) |  |
| &nbsp;&nbsp;&nbsp;Amounts related to periodic settlements on derivatives | 0.6 |  |  |
| Total gain (loss) recognized for fair value hedging relationships | $62.3 | $— | $(4.3) |
| Gains on cash flow hedging relationships: |  |  |  |
| Interest rate contracts: |  |  |  |
| &nbsp;&nbsp;&nbsp;Gain (loss) reclassified from AOCI on derivatives | $4.1 | $— | $(0.1) |
| &nbsp;&nbsp;&nbsp;Gain reclassified from AOCI as a result that a forecasted transaction is no longer probable of occurring |  | 1.9 |  |
| &nbsp;&nbsp;&nbsp;Amounts related to periodic settlements on derivatives |  |  | 14.2 |
| Foreign exchange contracts: |  |  |  |
| &nbsp;&nbsp;&nbsp;Gain reclassified from AOCI on derivatives |  | 1.5 |  |
| &nbsp;&nbsp;&nbsp;Amounts related to periodic settlements on derivatives | 21.4 |  |  |
| Total gain recognized for cash flow hedging relationships | $25.5 | $3.4 | $14.1 |

---

**Derivatives Not Designated as Hedging Instruments**

We use futures, certain swaps, option collars, options and forwards in effective economic hedges that 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. However, the change in fair value of the funds withheld embedded derivative is separately reported on the consolidated statements of operations. Additionally, mark-to-market gains and losses as well as periodic and final settlements for derivatives used to hedge market risk benefits are reported in market risk benefit (gain) loss on the consolidated statements of operations.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

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 and are net of amounts on funds withheld invested assets that are passed directly to reinsurers. See Note 13, Reinsurance, for further details.

---

| | | | |
|:---|:---|:---|:---|
| | **Amount of gain (loss) recognized in** | **Amount of gain (loss) recognized in** | **Amount of gain (loss) recognized in** |
| | **net income on derivatives for the** | **net income on derivatives for the** | **net income on derivatives for the** |
| | **year ended December 31,** | **year ended December 31,** | **year ended December 31,** |
| <br>**Derivatives not designated as hedging instruments** | **2025** | **2024** | **2023** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| Interest rate contracts | $**(130.6)** | $(80.9) | $(46.5) |
| Foreign exchange contracts | **(10.2)** | 5.1 | (2.8) |
| Equity contracts | **266.0** | 55.7 | (136.6) |
| Credit contracts | **7.8** | 16.3 | 4.1 |
| Other contracts (1) | **(1305.2)** | 117.1 | (1395.9) |
| Total | $**(1172.2)** | $113.3 | $(1577.7) |

---

(1) Includes the change in fair value of the funds withheld embedded derivative.

**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. 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. This includes, but is 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.

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 higher than expected earnings in the Closed Block that will need to be paid as dividends unless future performance of the Closed Block is less favorable than originally expected. A model of the Closed Block was established to produce the pattern of expected earnings, assets and liabilities in the Closed Block. These projections are utilized to determine ratios that will allow us to compare actual cumulative earnings to expected cumulative earnings and determine the amount of the PDO. As of both December 31, 2025 and 2024, the PDO was $0.0 million.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

Closed Block liabilities and assets designated to the Closed Block were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
|  | *(in millions)* | *(in millions)* |
| **Closed Block liabilities** |  |  |
| Future policy benefits and claims | $**2715.3** | $2850.0 |
| Other policyholder funds | **4.4** | 4.4 |
| Policyholder dividends payable | **153.7** | 155.1 |
| Income taxes currently payable | **0.1** | 1.3 |
| Other liabilities | **29.5** | 27.6 |
| &nbsp;&nbsp;&nbsp;Total Closed Block liabilities | **2903.0** | 3038.4 |
| **Assets designated to the Closed Block** |  |  |
| Fixed maturities, available-for-sale | **1758.9** | 1752.0 |
| Fixed maturities, trading | **0.6** | 0.7 |
| Equity securities | **0.9** | 0.9 |
| Mortgage loans | **359.2** | 413.3 |
| Policy loans | **329.4** | 353.6 |
| Other investments | **54.1** | 61.2 |
| &nbsp;&nbsp;&nbsp;Total investments | **2503.1** | 2581.7 |
| Cash and cash equivalents | **54.2** |  |
| Accrued investment income | **30.8** | 32.3 |
| Reinsurance recoverable and deposit receivable | **2.8** | 3.5 |
| Deferred tax asset | **7.9** | 51.6 |
| Other assets | **0.6** | 2.0 |
| &nbsp;&nbsp;&nbsp;Total assets designated to the Closed Block | **2599.4** | 2671.1 |
| Excess of Closed Block liabilities over assets designated to the Closed Block | **303.6** | 367.3 |
| Amounts included in accumulated other comprehensive income | **(25.6)** | (66.2) |
| Maximum future earnings to be recognized from Closed Block assets and liabilities | $**278.0** | $301.1 |

---

Closed Block revenues and expenses were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| **Revenues** |  |  |  |
| Premiums and other considerations | $**153.8** | $153.0 | $166.1 |
| Net investment income | **127.6** | 130.6 | 127.3 |
| Net realized capital gains (losses) | **1.1** | (11.2) | (10.0) |
| &nbsp;&nbsp;&nbsp;Total revenues | **282.5** | 272.4 | 283.4 |
| **Expenses** |  |  |  |
| Benefits, claims and settlement expenses | **163.3** | 151.1 | 161.6 |
| Dividends to policyholders | **89.3** | 97.4 | 86.8 |
| Operating expenses | **1.9** | 1.9 | 2.6 |
| &nbsp;&nbsp;&nbsp;Total expenses | **254.5** | 250.4 | 251.0 |
| Closed Block revenues, net of Closed Block expenses, before income taxes | **28.0** | 22.0 | 32.4 |
| Income taxes | **4.9** | 4.2 | 6.1 |
| Closed Block revenues, net of Closed Block expenses and income taxes | **23.1** | 17.8 | 26.3 |
| Funding adjustments and other transfers | **—** | 0.7 | (1.4) |
| Closed Block revenues, net of Closed Block expenses, income taxes and funding adjustments | $**23.1** | $18.5 | $24.9 |

---

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

The change in maximum future earnings of the Closed Block was as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| Beginning of year | $**301.1** | $319.6 | $344.5 |
| End of year | **278.0** | 301.1 | 319.6 |
| Change in maximum future earnings | $**(23.1)** | $(18.5) | $(24.9) |

---

We charge the Closed Block with U.S. 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 and Other Actuarial Balances**

**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 contracts are capitalized in the period they are incurred. Maintenance costs and acquisition costs that are not deferrable are charged to operating expenses as incurred.

For our long-duration insurance products and certain investment contracts, DAC is amortized on a constant level basis over the expected life of the contracts using groupings and assumptions consistent with those used in computing policyholder liabilities. For each of our long-duration insurance products, we select an inforce measure as a basis for amortization that will result in a constant level amortization pattern for the expected life of the contract. If our actual contract terminations differ from our expectation, the amortization pattern is adjusted on a prospective basis.

Some of our life and disability products within the Benefits and Protection segment have renewal commissions resulting in new DAC capitalizations in the years following the initial capitalization. We also have life products that allow for underwritten death benefit increases and cost of living adjustments, resulting in an immaterial amount of new DAC capitalizations each year. The new capitalizations are added to the existing DAC balance when incurred and amortized over the remaining life of the business.

DAC on short-duration group benefits contracts is amortized over the estimated life of the underlying contracts.

We review and update actuarial experience assumptions (such as mortality, surrenders, lapse, and premium persistency) serving as inputs to the models that establish the expected life for DAC and other actuarial balances during the third quarter of each year, or more frequently if evidence suggests assumptions should be revised. We make model refinements as necessary, and any changes resulting from these assumption updates are applied prospectively.

DAC amortization expense of $387.7 million, $388.0 million and $388.7 million related to our long-duration and short-duration contracts was recorded in operating expenses on the consolidated statements of operations for the years ended December 31, 2025, 2024 and 2023, respectively.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

The following tables summarize disaggregated DAC amounts and reconcile the totals to those reported in the consolidated statements of financial position.

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
|  | *(in millions)* | *(in millions)* |
| Retirement and Income Solutions: |  |  |
| &nbsp;&nbsp;&nbsp;Workplace savings and retirement solutions | $**528.9** | $515.5 |
| &nbsp;&nbsp;&nbsp;Individual variable annuities | **385.3** | 323.4 |
| &nbsp;&nbsp;&nbsp;Pension risk transfer | **20.7** | 19.6 |
| &nbsp;&nbsp;&nbsp;Individual fixed deferred annuities | **66.9** | 84.2 |
| &nbsp;&nbsp;&nbsp;Investment only | **10.6** | 13.0 |
| Total Retirement and Income Solutions | **1012.4** | 955.7 |
| Benefits and Protection: |  |  |
| &nbsp;&nbsp;&nbsp;Specialty Benefits: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Individual disability | **714.8** | 696.9 |
| &nbsp;&nbsp;&nbsp;Life Insurance: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Universal life | **1514.3** | 1527.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Term life | **598.1** | 636.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Participating life | **71.0** | 77.8 |
| Total Benefits and Protection | **2898.2** | 2939.0 |
| Short-duration contracts | **30.1** | 30.6 |
| Total DAC per consolidated statements of financial position | $**3940.7** | $3925.3 |

---

***Retirement and Income Solutions***

The balances and changes in DAC were as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Workplace**<br>**savings and**<br>**retirement**<br>**solutions** |<br>**Individual**<br>**variable**<br>**annuities** |<br>**Pension**<br>**risk**<br>**transfer** | **Individual**<br>**fixed**<br>**deferred**<br>**annuities** |<br>**Investment**<br>**only** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| **Balances as of January 1, 2024** | $506.4 | $279.5 | $15.4 | $106.1 | $11.5 |
| &nbsp;&nbsp;&nbsp;Costs deferred | 47.7 | 72.7 | 5.1 |  | 6.5 |
| &nbsp;&nbsp;&nbsp;Amortized to expense | (38.6) | (28.8) | (0.9) | (21.9) | (5.0) |
| **Balances as of December 31, 2024** | 515.5 | 323.4 | 19.6 | 84.2 | 13.0 |
| &nbsp;&nbsp;&nbsp;Costs deferred | **50.9** | **96.9** | **2.2** | **—** | **2.6** |
| &nbsp;&nbsp;&nbsp;Amortized to expense | **(37.5)** | **(35.0)** | **(1.1)** | **(17.3)** | **(5.0)** |
| **Balances as of December 31, 2025** | $**528.9** | $**385.3** | $**20.7** | $**66.9** | $**10.6** |

---

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

***Benefits and Protection***

The balances and changes in DAC were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Specialty Benefits** | **Life Insurance** | **Life Insurance** | **Life Insurance** |
|  | **Individual**<br>**disability** |<br>**Universal life** |<br>**Term life** |<br>**Participating life** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| **Balances as of January 1, 2024** | $667.7 | $1545.3 | $678.8 | $84.7 |
| &nbsp;&nbsp;&nbsp;Costs deferred | 79.0 | 76.7 | 17.1 | 1.7 |
| &nbsp;&nbsp;&nbsp;Amortized to expense | (49.8) | (94.3) | (59.3) | (8.6) |
| **Balances as of December 31, 2024** | 696.9 | 1527.7 | 636.6 | 77.8 |
| &nbsp;&nbsp;&nbsp;Costs deferred | **71.9** | **81.2** | **17.1** | **1.2** |
| &nbsp;&nbsp;&nbsp;Amortized to expense | **(54.0)** | **(94.6)** | **(55.6)** | **(8.0)** |
| **Balances as of December 31, 2025** | $**714.8** | $**1514.3** | $**598.1** | $**71.0** |

---

**Unearned Revenue Liability**

An unearned revenue liability is established when we collect fees or other policyholder assessments, inclusive of cost of insurance charges, administrative charges and other similar fees, for services to be provided in future periods. These unearned front-end fees are deferred and the amortization is recorded using an approach consistent with DAC.

The unearned revenue liability is included within other policyholder funds in the consolidated statements of financial position. The following table summarizes disaggregated unearned revenue liability amounts and reconciles the totals to those reported in the consolidated statements of financial position.

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
|  | *(in millions)* | *(in millions)* |
| Benefits and Protection – Life Insurance: |  |  |
| &nbsp;&nbsp;&nbsp;Universal life | $**532.9** | $510.1 |
| Total unearned revenue liability | $**532.9** | $510.1 |

---

 ****

***Benefits and Protection***

The balances and changes in the unearned revenue liability for Life Insurance – Universal life contracts were as follows:

---

| | | |
|:---|:---|:---|
|  | **For the year ended**<br>**December 31, 2025** | **For the year ended**<br>**December 31, 2024** |
|  | *(in millions)* | *(in millions)* |
| Balance at beginning of period | $**510.1** | $485.5 |
| &nbsp;&nbsp;&nbsp;Deferrals | **56.0** | 56.1 |
| &nbsp;&nbsp;&nbsp;Revenue recognized | **(33.2)** | (31.5) |
| Balance at end of period | **532.9** | 510.1 |
| Reinsurance impact | **(215.6)** | (220.8) |
| Balance at end of period after reinsurance | $**317.3** | $289.3 |

---

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

**9. Separate Account Balances**

The separate accounts are legally segregated and are not subject to 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. Refer to Note 19, Fair Value Measurements, for further information on the valuation methodologies.

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.

The Retirement and Income Solutions segment offers variable annuity contracts that allow the policyholder to allocate deposits into various investment options in a separate account. The variable annuity contracts can also include GMWB riders and guaranteed minimum death benefit ("GMDB") riders that are accounted for as MRBs. Retirement and Income Solutions also offers certain group annuity contracts that have separate accounts as an investment option.

The Benefits and Protection segment offers variable universal life products with separate account investment options.

Refer to Note 12, Market Risk Benefits, for further information on the MRBs associated with the contracts mentioned above.

As of December 31, 2025 and December 31, 2024, the separate accounts included a separate account valued at $81.7 million and $79.8 million, respectively, which primarily included 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. These shares are included in both basic and diluted earnings per share calculations. 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. 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.

**Separate Account Assets**

The aggregate fair value of assets, by major investment category, supporting separate accounts were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
|  | *(in millions)* | *(in millions)* |
| Fixed maturities: |  |  |
| &nbsp;&nbsp;&nbsp;U.S. government and agencies | $**9758.2** | $7504.4 |
| &nbsp;&nbsp;&nbsp;Non-U.S. governments | **1469.5** | 1507.8 |
| &nbsp;&nbsp;&nbsp;States and political subdivisions | **162.3** | 170.1 |
| &nbsp;&nbsp;&nbsp;Corporate | **6521.9** | 6211.2 |
| &nbsp;&nbsp;&nbsp;Residential mortgage-backed pass-through securities | **3467.1** | 3726.4 |
| &nbsp;&nbsp;&nbsp;Commercial mortgage-backed securities | **261.3** | 201.4 |
| &nbsp;&nbsp;&nbsp;Other debt obligations | **339.0** | 529.6 |
| Total fixed maturities | **21979.3** | 19850.9 |
| Equity securities | **113656.4** | 106250.3 |
| Real estate | **445.9** | 441.4 |
| Other investments | **8139.1** | 7972.0 |
| Cash and cash equivalents | **4676.3** | 3518.6 |
| Other assets | **1071.5** | 827.0 |
| Total separate account assets per consolidated statements of financial position | $**149968.5** | $138860.2 |

---

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

**Separate Account Liabilities**

The following tables summarize disaggregated separate account liability amounts and reconcile the totals to separate account liabilities reported in the consolidated statements of financial position.

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
|  | *(in millions)* | *(in millions)* |
| Retirement and Income Solutions: |  |  |
| &nbsp;&nbsp;&nbsp;Group retirement contracts | $**136674.3** | $125103.1 |
| &nbsp;&nbsp;&nbsp;Individual variable annuities | **7364.9** | 8334.9 |
| Total Retirement and Income Solutions | **144039.2** | 133438.0 |
| Benefits and Protection - Life Insurance: |  |  |
| &nbsp;&nbsp;&nbsp;Universal life | **5929.3** | 5422.2 |
| Total separate account liabilities per consolidated statements of financial position | $**149968.5** | $138860.2 |

---

 ****

***Retirement and Income Solutions***

The balances and the changes in separate account liabilities were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the year ended** | **For the year ended** | **For the year ended** | **For the year ended** |
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2024** | **December 31, 2024** |
|  | **Group**<br>**retirement**<br>**contracts** | **Individual**<br>**variable**<br>**annuities** | **Group**<br>**retirement**<br>**contracts** | **Individual**<br>**variable**<br>**annuities** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| Balance at beginning of period | $**125103.1** | $**8334.9** | $117518.5 | $9131.9 |
| &nbsp;&nbsp;&nbsp;Premiums and deposits (1) | **15458.7** | **157.1** | 16573.1 | 344.5 |
| &nbsp;&nbsp;&nbsp;Policy charges | **(344.1)** | **(166.6)** | (365.6) | (197.6) |
| &nbsp;&nbsp;&nbsp;Surrenders, withdrawals and benefit payments (1) | **(17649.8)** | **(1790.0)** | (19191.4) | (1977.7) |
| &nbsp;&nbsp;&nbsp;Investment performance | **15664.0** | **850.5** | 14632.1 | 1079.0 |
| &nbsp;&nbsp;&nbsp;Net transfers (to) from general account (1) | **(1433.1)** | **(21.0)** | (4148.3) | (2.1) |
| &nbsp;&nbsp;&nbsp;Other (2) | **(124.5)** | **—** | 84.7 | (43.1) |
| Balance at end of period | $**136674.3** | $**7364.9** | $125103.1 | $8334.9 |
| Cash surrender value (3) | $**135606.1** | $**7265.2** | $123965.4 | $8219.1 |

---

(1) Within the policyholder account balances rollforwards in Note 10, Contractholder Funds, amounts in these lines for Individual
variable annuities and Workplace savings and retirement solutions included in Group retirement contracts are reflected in net transfers
from (to) separate account.

(2) Includes amounts to be settled between the separate account and general account due to the timing of trade settlements as of
the reporting date.

(3) Cash surrender value represents the amount of the contractholders' account balances distributable at the end of the reporting
period less surrender charges.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

***Benefits and Protection***

The balances and the changes in separate account liabilities for Life Insurance – Universal life were as follows:

---

| | | |
|:---|:---|:---|
|  | **For the year ended**<br>**December 31, 2025** | **For the year ended**<br>**December 31, 2024** |
|  | *(in millions)* | *(in millions)* |
| Balance at beginning of period | $**5422.2** | $4991.3 |
| &nbsp;&nbsp;&nbsp;Premiums and deposits (1) | **178.7** | 212.4 |
| &nbsp;&nbsp;&nbsp;Policy charges | **(96.0)** | (98.4) |
| &nbsp;&nbsp;&nbsp;Surrenders, withdrawals and benefit payments (1) | **(296.2)** | (421.7) |
| &nbsp;&nbsp;&nbsp;Investment performance | **721.0** | 728.5 |
| &nbsp;&nbsp;&nbsp;Net transfers (to) from general account (1) | **(0.4)** | 10.1 |
| Balance at end of period | $**5929.3** | $5422.2 |
| Cash surrender value (2) | $**5969.3** | $5476.4 |

---

(1) Within the policyholder account balances rollforwards in Note 10, Contractholder Funds, amounts in these lines are reflected
in net transfers from (to) separate account.

(2) Cash surrender value represents the amount of the contractholders' account balances distributable at the end of the reporting
period less surrender charges. Certain products include surrender value enhancement riders that result in cash surrender values
greater than account balances.

**10. Contractholder Funds**

Contractholder funds include policyholder account balances related to contracts with significant insurance risk and investment contracts.

The following tables summarize disaggregated policyholder account balance amounts and reconcile the totals to contractholder funds reported in the consolidated statements of financial position.

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
|  |  | *(As recast)* |
|  | *(in millions)* | *(in millions)* |
| Retirement and Income Solutions: |  |  |
| &nbsp;&nbsp;&nbsp;Workplace savings and retirement solutions | $**15808.1** | $13982.8 |
| &nbsp;&nbsp;&nbsp;Individual variable annuities | **4273.0** | 1906.7 |
| &nbsp;&nbsp;&nbsp;Individual fixed deferred annuities | **3728.0** | 4460.7 |
| Total Retirement and Income Solutions | **23809.1** | 20350.2 |
| Benefits and Protection – Life Insurance: |  |  |
| &nbsp;&nbsp;&nbsp;Universal life | **6867.5** | 6953.7 |
| Total policyholder account balances for contracts with significant insurance risk or investment contracts with significant fee revenue | **30676.6** | 27303.9 |
| **Reconciling items:** |  |  |
| Investment contracts without significant fee revenue (1) | **14597.4** | 15678.8 |
| Other balances (2) | **24.2** | 25.8 |
| Total contractholder funds per consolidated statements of financial position | $**45298.2** | $43008.5 |

---

(1) Includes GICs, funding agreements and individual fixed income annuities. These contracts are not included within the disaggregated
rollforward or guaranteed minimum interest rate ("GMIR") disclosures below.

(2) Includes insignificant balances for long-duration contracts and amounts that are not accrued to the benefit of the contractholder
and, therefore, are not included within the disaggregated rollforward or GMIR disclosures below.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

**GICs and Funding Agreements**

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 and those issued to the FHLB Des Moines under their membership funding programs. As of December 31, 2025 and 2024, $3,972.5 million and $3,976.5 million, respectively, of liabilities were outstanding with respect to issuances under the program with FHLB Des Moines. In addition, we have 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.

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, 2025 and 2024, $75.7 million and $75.8 million, respectively, of liabilities were outstanding with respect to the issuance outstanding under this program.

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, 2025 and 2024, $202.1 million and $202.0 million, respectively, of liabilities were 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 established a funding agreements program 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 November 2025, the program was updated such that the special purpose entity may have outstanding medium term notes at any one time up to $10.0 billion. As of December 31, 2025 and 2024, $8,057.9 million and $8,335.8 million, respectively, of liabilities were being held with respect to issuances outstanding under this 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 United States Securities and Exchange Commission ("SEC").

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

**Policyholder Account Balances**

***Retirement and Income Solutions***

The changes in policyholder account balances were as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** |
|  | **Workplace**<br>**savings and**<br>**retirement**<br>**solutions** |<br>**Individual**<br>**variable**<br>**annuities** |<br>**Individual**<br>**fixed deferred**<br>**annuities (1)** | **Workplace**<br>**savings and**<br>**retirement**<br>**solutions** |<br>**Individual**<br>**variable**<br>**annuities** |<br>**Individual**<br>**fixed deferred**<br>**annuities (1)** |
|  |  |  |  |  | *(As recast)* | *(As recast)* |
|  | *($ in millions)* | *($ in millions)* | *($ in millions)* | *($ in millions)* | *($ in millions)* | *($ in millions)* |
| Balance at beginning of period | $**13982.8** | $**1906.7** | $**4460.7** | $12721.5 | $519.4 | $5534.1 |
| &nbsp;&nbsp;&nbsp;Premiums and deposits | **5734.4** | **2296.3** | **24.8** | 4945.1 | 1686.5 | 43.2 |
| &nbsp;&nbsp;&nbsp;Policy charges | **(36.7)** | **—** | **—** | (36.7) |  |  |
| &nbsp;&nbsp;&nbsp;Surrenders, withdrawals and benefit payments | **(4206.8)** | **(1927.4)** | **(878.5)** | (3791.8) | (2098.2) | (1255.7) |
| &nbsp;&nbsp;&nbsp;Net transfers from (to) separate account (2) | **(162.1)** | **1653.9** | **—** | (220.5) | 1635.3 |  |
| &nbsp;&nbsp;&nbsp;Interest credited | **522.5** | **82.7** | **121.9** | 395.9 | 27.3 | 132.4 |
| &nbsp;&nbsp;&nbsp;Change in fair value of embedded derivative | **—** | **236.6** | **5.9** |  | 131.7 | 15.0 |
| &nbsp;&nbsp;&nbsp;Other | **(26.0)** | **24.2** | **(6.8)** | (30.7) | 4.7 | (8.3) |
| Balance at end of period | $**15808.1** | $**4273.0** | $**3728.0** | $13982.8 | $1906.7 | $4460.7 |
| Weighted-average crediting rate (3) | **3.87%** | **3.37%** | **3.16%** | 3.26% | 3.39% | 3.09% |
| Cash surrender value (4) | $**14606.4** | $**4123.4** | $**3525.6** | $12524.6 | $1778.7 | $4208.5 |

---

(1) We use the deposit method of accounting for the reinsurance of this exited business.

(2) Within the separate account liabilities rollforwards in Note 9, Separate Account Balances, these transfers for Individual variable
annuities and Workplace savings and retirement solutions included in Group retirement contracts are reflected in premiums and deposits;
surrenders, withdrawals and benefit payments; and net transfers (to) from general account.

(3) The weighted-average crediting rate is the crediting rate as of the end of each reporting period weighted by account value.

(4) Cash surrender value represents the amount of the contractholders' account balances distributable at the end of the reporting
period less surrender charges. The cash surrender value for RILA products also includes an equity and bond adjustment that may
result in cash surrender value being greater than account balance.

The net amount at risk for policyholder account balances for Individual variable annuities is equal to the MRB net amount at risk, as reported in Note 12, Market Risk Benefits. Workplace savings and retirement solutions and Individual fixed deferred annuities do not have guarantees that provide for benefits in excess of the current policyholder account balances.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

***Benefits and Protection***

The changes in policyholder account balances for Life Insurance – Universal life were as follows:

---

| | | |
|:---|:---|:---|
|  | **For the year ended**<br>**December 31, 2025** | **For the year ended**<br>**December 31, 2024** |
|  |  | *(As recast)* |
|  | *($ in millions)* | *($ in millions)* |
| Balance at beginning of period | $**6953.7** | $6934.3 |
| &nbsp;&nbsp;&nbsp;Premiums and deposits | **1305.7** | 1283.7 |
| &nbsp;&nbsp;&nbsp;Policy charges | **(886.0)** | (877.1) |
| &nbsp;&nbsp;&nbsp;Surrenders, withdrawals and benefit payments | **(587.7)** | (591.7) |
| &nbsp;&nbsp;&nbsp;Net transfers from (to) separate account (1) | **(198.1)** | (76.4) |
| &nbsp;&nbsp;&nbsp;Interest credited | **304.2** | 306.7 |
| &nbsp;&nbsp;&nbsp;Change in fair value of embedded derivative | **17.3** | 19.6 |
| &nbsp;&nbsp;&nbsp;Other | **(41.6)** | (45.4) |
| Balance at end of period | **6867.5** | 6953.7 |
| Reinsurance impact | **(3045.1)** | (3232.8) |
| Balance at end of period after reinsurance | $**3822.4** | $3720.9 |
| Weighted-average crediting rate (2) | **4.11%** | 4.13% |
| Net amount at risk (3) | $**86094.5** | $86141.3 |
| Cash surrender value (4) | $**6045.7** | $6052.5 |

---

(1) Within the separate account liabilities rollforwards in Note 9, Separate Account Balances, these transfers are reflected in
premiums and deposits; surrenders, withdrawals and benefit payments; and net transfers (to) from general account.

(2) The weighted-average crediting rate is the crediting rate as of the end of each reporting period weighted by account value,
including indexed credits.

(3) For those guarantees of benefits that are payable in the event of death, the net amount at risk is generally defined as the
death benefit in excess of the current account balance or the fixed death benefit at the consolidated statement of financial position
date.

(4) Cash surrender value represents the amount of the contractholders' account balances distributable at the end of the reporting
period less surrender charges.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

**Guaranteed Minimum Interest Rate**

The account values, for contracts with significant insurance risk and investment contracts with significant fee revenue by range of GMIR and the related range of difference, in basis points, between rates credited to policyholders and the respective GMIR were as follows. The amounts are before reinsurance impacts of our exited U.S. retail fixed annuity and ULSG businesses.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  | **Excess of crediting rates over GMIR** | **Excess of crediting rates over GMIR** | **Excess of crediting rates over GMIR** | **Excess of crediting rates over GMIR** | **Excess of crediting rates over GMIR** | **Excess of crediting rates over GMIR** |
|  |<br>**At GMIR** | **Up to 0.50%**<br>**above GMIR** | **0.51% to 1.00%**<br>**above GMIR** | **1.01% to 2.00%**<br>**above GMIR** | **2.01% or more**<br>**above GMIR** |<br>**Total** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| **Retirement and Income Solutions** | **Retirement and Income Solutions** | **Retirement and Income Solutions** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;**Workplace savings and retirement solutions** | &nbsp;&nbsp;&nbsp;**Workplace savings and retirement solutions** | &nbsp;&nbsp;&nbsp;**Workplace savings and retirement solutions** | &nbsp;&nbsp;&nbsp;**Workplace savings and retirement solutions** | &nbsp;&nbsp;&nbsp;**Workplace savings and retirement solutions** | &nbsp;&nbsp;&nbsp;**Workplace savings and retirement solutions** | &nbsp;&nbsp;&nbsp;**Workplace savings and retirement solutions** |
| &nbsp;&nbsp;&nbsp;Up to 1.00% | $**—** | $**—** | $**—** | $**—** | $**—** | $**—** |
| &nbsp;&nbsp;&nbsp;1.01% - 2.00% | **—** | **2700.0** | **—** | **741.4** | **—** | **3441.4** |
| &nbsp;&nbsp;&nbsp;2.01% - 3.00% | **195.0** | **189.1** | **673.2** | **3935.8** | **4471.3** | **9464.4** |
| &nbsp;&nbsp;&nbsp;3.01% - 4.00% | **7.6** | **—** | **—** | **—** | **—** | **7.6** |
| &nbsp;&nbsp;&nbsp;4.01% and above | **11.9** | **—** | **—** | **—** | **—** | **11.9** |
| &nbsp;&nbsp;&nbsp;Subtotal | **214.5** | **2889.1** | **673.2** | **4677.2** | **4471.3** | **12925.3** |
| &nbsp;&nbsp;&nbsp;No GMIR |  |  |  |  |  | **2882.8** |
| &nbsp;&nbsp;&nbsp;Total |  |  |  |  |  | $**15808.1** |
| &nbsp;&nbsp;&nbsp;**Individual variable annuities** | &nbsp;&nbsp;&nbsp;**Individual variable annuities** | &nbsp;&nbsp;&nbsp;**Individual variable annuities** | &nbsp;&nbsp;&nbsp;**Individual variable annuities** | &nbsp;&nbsp;&nbsp;**Individual variable annuities** | &nbsp;&nbsp;&nbsp;**Individual variable annuities** | &nbsp;&nbsp;&nbsp;**Individual variable annuities** |
| &nbsp;&nbsp;&nbsp;Up to 1.00% | $**14.8** | $**—** | $**—** | $**—** | $**—** | $**14.8** |
| &nbsp;&nbsp;&nbsp;1.01% - 2.00% | **3.9** | **—** | **—** | **—** | **—** | **3.9** |
| &nbsp;&nbsp;&nbsp;2.01% - 3.00% | **197.2** | **—** | **—** | **—** | **—** | **197.2** |
| &nbsp;&nbsp;&nbsp;3.01% - 4.00% | **—** | **—** | **—** | **—** | **—** | **—** |
| &nbsp;&nbsp;&nbsp;4.01% and above | **—** | **—** | **—** | **—** | **—** | **—** |
| &nbsp;&nbsp;&nbsp;Subtotal | **215.9** | **—** | **—** | **—** | **—** | **215.9** |
| &nbsp;&nbsp;&nbsp;No GMIR |  |  |  |  |  | **4057.1** |
| &nbsp;&nbsp;&nbsp;Total |  |  |  |  |  | $**4273.0** |
| &nbsp;&nbsp;&nbsp;**Individual fixed deferred annuities** | &nbsp;&nbsp;&nbsp;**Individual fixed deferred annuities** | &nbsp;&nbsp;&nbsp;**Individual fixed deferred annuities** | &nbsp;&nbsp;&nbsp;**Individual fixed deferred annuities** | &nbsp;&nbsp;&nbsp;**Individual fixed deferred annuities** | &nbsp;&nbsp;&nbsp;**Individual fixed deferred annuities** | &nbsp;&nbsp;&nbsp;**Individual fixed deferred annuities** |
| &nbsp;&nbsp;&nbsp;Up to 1.00% | $**166.2** | $**8.9** | $**25.7** | $**78.8** | $**969.1** | $**1248.7** |
| &nbsp;&nbsp;&nbsp;1.01% - 2.00% | **66.8** | **0.2** | **3.1** | **21.8** | **7.6** | **99.5** |
| &nbsp;&nbsp;&nbsp;2.01% - 3.00% | **2101.8** | **—** | **—** | **—** | **—** | **2101.8** |
| &nbsp;&nbsp;&nbsp;3.01% - 4.00% | **133.4** | **—** | **—** | **—** | **—** | **133.4** |
| &nbsp;&nbsp;&nbsp;4.01% and above | **—** | **—** | **—** | **—** | **—** | **—** |
| &nbsp;&nbsp;&nbsp;Subtotal | **2468.2** | **9.1** | **28.8** | **100.6** | **976.7** | **3583.4** |
| &nbsp;&nbsp;&nbsp;No GMIR |  |  |  |  |  | **144.6** |
| &nbsp;&nbsp;&nbsp;Total |  |  |  |  |  | $**3728.0** |
| **Benefits and Protection – Life Insurance** | **Benefits and Protection – Life Insurance** | **Benefits and Protection – Life Insurance** | **Benefits and Protection – Life Insurance** | **Benefits and Protection – Life Insurance** | **Benefits and Protection – Life Insurance** | **Benefits and Protection – Life Insurance** |
| &nbsp;&nbsp;&nbsp;**Universal life** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Up to 1.00% | $**—** | $**—** | $**—** | $**14.8** | $**31.2** | $**46.0** |
| &nbsp;&nbsp;&nbsp;1.01% - 2.00% | **239.6** | **—** | **344.3** | **621.7** | **458.0** | **1663.6** |
| &nbsp;&nbsp;&nbsp;2.01% - 3.00% | **566.6** | **592.3** | **711.4** | **391.8** | **4.9** | **2267.0** |
| &nbsp;&nbsp;&nbsp;3.01% - 4.00% | **1552.7** | **55.6** | **28.6** | **112.7** | **3.3** | **1752.9** |
| &nbsp;&nbsp;&nbsp;4.01% and above | **17.0** | **9.6** | **16.1** | **7.7** | **—** | **50.4** |
| &nbsp;&nbsp;&nbsp;Subtotal | **2375.9** | **657.5** | **1100.4** | **1148.7** | **497.4** | **5779.9** |
| &nbsp;&nbsp;&nbsp;No GMIR |  |  |  |  |  | **1087.6** |
| &nbsp;&nbsp;&nbsp;Total |  |  |  |  |  | $**6867.5** |

---

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Excess of crediting rates over GMIR** | **Excess of crediting rates over GMIR** | **Excess of crediting rates over GMIR** | **Excess of crediting rates over GMIR** | **Excess of crediting rates over GMIR** | **Excess of crediting rates over GMIR** |
|  | <br>**At GMIR** | **Up to 0.50%**<br>**above GMIR** | **0.51% to 1.00%**<br>**above GMIR** | **1.01% to 2.00%**<br>**above GMIR** | **2.01% or more**<br>**above GMIR** | <br>**Total** |
|  | *(As recast)* | *(As recast)* | *(As recast)* | *(As recast)* | *(As recast)* | *(As recast)* |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| **Retirement and Income Solutions** | **Retirement and Income Solutions** | **Retirement and Income Solutions** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;**Workplace savings and retirement solutions** | &nbsp;&nbsp;&nbsp;**Workplace savings and retirement solutions** | &nbsp;&nbsp;&nbsp;**Workplace savings and retirement solutions** | &nbsp;&nbsp;&nbsp;**Workplace savings and retirement solutions** | &nbsp;&nbsp;&nbsp;**Workplace savings and retirement solutions** | &nbsp;&nbsp;&nbsp;**Workplace savings and retirement solutions** | &nbsp;&nbsp;&nbsp;**Workplace savings and retirement solutions** |
| &nbsp;&nbsp;&nbsp;Up to 1.00% | $— | $— | $— | $1041.7 | $445.2 | $1486.9 |
| &nbsp;&nbsp;&nbsp;1.01% - 2.00% | 3727 |  |  | 1056.3 |  | 4783.3 |
| &nbsp;&nbsp;&nbsp;2.01% - 3.00% | 4.6 | 186.9 | 1.8 | 2900 | 2740.1 | 5833.4 |
| &nbsp;&nbsp;&nbsp;3.01% - 4.00% | 7.6 |  |  |  |  | 7.6 |
| &nbsp;&nbsp;&nbsp;4.01% and above | 13.9 |  |  |  |  | 13.9 |
| &nbsp;&nbsp;&nbsp;Subtotal | 3753.1 | 186.9 | 1.8 | 4998 | 3185.3 | 12125.1 |
| &nbsp;&nbsp;&nbsp;No GMIR |  |  |  |  |  | 1857.7 |
| &nbsp;&nbsp;&nbsp;Total |  |  |  |  |  | $13982.8 |
| &nbsp;&nbsp;&nbsp;**Individual variable annuities** | &nbsp;&nbsp;&nbsp;**Individual variable annuities** | &nbsp;&nbsp;&nbsp;**Individual variable annuities** | &nbsp;&nbsp;&nbsp;**Individual variable annuities** | &nbsp;&nbsp;&nbsp;**Individual variable annuities** | &nbsp;&nbsp;&nbsp;**Individual variable annuities** | &nbsp;&nbsp;&nbsp;**Individual variable annuities** |
| &nbsp;&nbsp;&nbsp;Up to 1.00% | $19.2 | $— | $— | $— | $— | $19.2 |
| &nbsp;&nbsp;&nbsp;1.01% - 2.00% | 3.8 |  |  |  |  | 3.8 |
| &nbsp;&nbsp;&nbsp;2.01% - 3.00% | 231.5 |  |  |  |  | 231.5 |
| &nbsp;&nbsp;&nbsp;3.01% - 4.00% |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;4.01% and above |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Subtotal | 254.5 |  |  |  |  | 254.5 |
| &nbsp;&nbsp;&nbsp;No GMIR |  |  |  |  |  | 1652.2 |
| &nbsp;&nbsp;&nbsp;Total |  |  |  |  |  | $1906.7 |
| &nbsp;&nbsp;&nbsp;**Individual fixed deferred annuities** | &nbsp;&nbsp;&nbsp;**Individual fixed deferred annuities** | &nbsp;&nbsp;&nbsp;**Individual fixed deferred annuities** | &nbsp;&nbsp;&nbsp;**Individual fixed deferred annuities** | &nbsp;&nbsp;&nbsp;**Individual fixed deferred annuities** | &nbsp;&nbsp;&nbsp;**Individual fixed deferred annuities** | &nbsp;&nbsp;&nbsp;**Individual fixed deferred annuities** |
| &nbsp;&nbsp;&nbsp;Up to 1.00% | $213.1 | $27.5 | $56 | $196.9 | $1093.2 | $1586.7 |
| &nbsp;&nbsp;&nbsp;1.01% - 2.00% | 78.8 | 0.3 | 4.8 | 48.2 | 7.4 | 139.5 |
| &nbsp;&nbsp;&nbsp;2.01% - 3.00% | 2416.4 |  |  |  |  | 2416.4 |
| &nbsp;&nbsp;&nbsp;3.01% - 4.00% | 142 |  |  |  |  | 142 |
| &nbsp;&nbsp;&nbsp;4.01% and above |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Subtotal | 2850.3 | 27.8 | 60.8 | 245.1 | 1100.6 | 4284.6 |
| &nbsp;&nbsp;&nbsp;No GMIR |  |  |  |  |  | 176.1 |
| &nbsp;&nbsp;&nbsp;Total |  |  |  |  |  | $4460.7 |
| **Benefits and Protection – Life Insurance** | **Benefits and Protection – Life Insurance** | **Benefits and Protection – Life Insurance** | **Benefits and Protection – Life Insurance** | **Benefits and Protection – Life Insurance** | **Benefits and Protection – Life Insurance** | **Benefits and Protection – Life Insurance** |
| &nbsp;&nbsp;&nbsp;**Universal life** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Up to 1.00% | $— | $— | $1.5 | $14.9 | $4.9 | $21.3 |
| &nbsp;&nbsp;&nbsp;1.01% - 2.00% | 268.6 |  | 424 | 518.6 | 452.3 | 1663.5 |
| &nbsp;&nbsp;&nbsp;2.01% - 3.00% | 646 | 632.2 | 771.9 | 368.7 | 6.3 | 2425.1 |
| &nbsp;&nbsp;&nbsp;3.01% - 4.00% | 1559.7 | 56.7 | 34.5 | 105.4 | 7 | 1763.3 |
| &nbsp;&nbsp;&nbsp;4.01% and above | 23.5 | 2.5 | 7 | 18.9 |  | 51.9 |
| &nbsp;&nbsp;&nbsp;Subtotal | 2497.8 | 691.4 | 1238.9 | 1026.5 | 470.5 | 5925.1 |
| &nbsp;&nbsp;&nbsp;No GMIR |  |  |  |  |  | 1028.6 |
| &nbsp;&nbsp;&nbsp;Total |  |  |  |  |  | $6953.7 |

---

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

**11. Future Policy Benefits and Claims**

Future policy benefits and claims include reserves for short-duration contracts and long-duration contracts as well as certain reinsurance balances, when in a liability position.

The following tables summarize disaggregated amounts included in future policy benefit and claims and reconcile the totals to those reported in the consolidated statements of financial position.

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
|  | *(in millions)* | *(in millions)* |
| **Liability for future policy benefits by segment (1):** |  |  |
| Retirement and Income Solutions: |  |  |
| &nbsp;&nbsp;&nbsp;Pension risk transfer | $**27349.3** | $24958.1 |
| &nbsp;&nbsp;&nbsp;Individual fixed income annuities | **4367.4** | 4504.6 |
| Total Retirement and Income Solutions | **31716.7** | 29462.7 |
| Benefits and Protection: |  |  |
| &nbsp;&nbsp;&nbsp;Specialty Benefits: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Individual disability | **1994.2** | 1829 |
| &nbsp;&nbsp;&nbsp;Life Insurance: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Term life | **1515.7** | 1248 |
| Total Benefits and Protection | **3509.9** | 3077 |
| Corporate: |  |  |
| &nbsp;&nbsp;&nbsp;Long-term care insurance | **166.7** | 164.8 |
| Total liability for future policy benefits | **35393.3** | 32704.5 |
| **Additional liability for certain benefit features by segment (2):** |  |  |
| Benefits and Protection – Life Insurance: |  |  |
| &nbsp;&nbsp;&nbsp;Universal life | **6604.8** | 6037.2 |
| Total additional liability for certain benefit features | **6604.8** | 6037.2 |
| **Reconciling items:** |  |  |
| Participating contracts | **2784.3** | 2924.2 |
| Short-duration contracts | **1205.2** | 1267.4 |
| Cost of reinsurance liability | **1210.9** | 1202.2 |
| Reinsurance recoverable liability | **23.5** | 60.3 |
| Other (3) | **173.8** | 107.5 |
| Future policy benefits and claims per consolidated statements of financial position | $**47395.8** | $44303.3 |

---

(1) Amounts include the deferred profit liability.

(2) Includes reserves on certain long-duration contracts where benefit features result in gains in early years followed by losses
in later years.

(3) Includes other miscellaneous reserves and the impact of unrealized gains (losses) on the additional liability for certain benefit
features.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

**Liability for Unpaid Claims**

The liability for unpaid claims is reported in future policy benefits and claims within our consolidated statements of financial position. Activity associated with unpaid claims was as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| Balance at beginning of period | $**1379.9** | $1405.9 | $1395.0 |
| Less: reinsurance recoverable | **61.2** | 67.8 | 68.6 |
| Net balance at beginning of period | **1318.7** | 1338.1 | 1326.4 |
| Incurred: |  |  |  |
| &nbsp;&nbsp;&nbsp;Current year | **1806.4** | 1749.4 | 1650.4 |
| &nbsp;&nbsp;&nbsp;Prior years | **(129.2)** | (111.2) | (95.4) |
| Total incurred | **1677.2** | 1638.2 | 1555.0 |
| Payments: |  |  |  |
| &nbsp;&nbsp;&nbsp;Current year | **1348.8** | 1288.0 | 1189.2 |
| &nbsp;&nbsp;&nbsp;Prior years | **367.3** | 369.6 | 354.1 |
| Total payments | **1716.1** | 1657.6 | 1543.3 |
| Net balance at end of period | **1279.8** | 1318.7 | 1338.1 |
| Plus: reinsurance recoverable | **62.6** | 61.2 | 67.8 |
| Balance at end of period | $**1342.4** | $1379.9 | $1405.9 |

---

Incurred liability adjustments relating to prior years, which affected current operations during 2025, 2024 and 2023, resulted in part from developed claims for prior years being different than were anticipated when the liabilities for unpaid claims were originally estimated. These trends have been considered in establishing the current year liability for unpaid claims.

**Short-Duration Contracts**

Future policy benefits and claims include reserves for group life and disability insurance that provide periodic income payments. These reserves are computed using assumptions of mortality, morbidity and investment performance. These assumptions are based on our experience, industry results, emerging trends and future expectations. Future policy benefits and claims also include reserves for incurred but unreported group disability, dental, vision, critical illness, accident, PFML, hospital indemnity and life insurance claims. We recognize claims costs in the period the service was provided to our policyholders. However, claims costs incurred in a particular period are not known with certainty until after we receive, process and pay the claims. We determine the amount of this liability using actuarial methods based on historical claim payment patterns as well as emerging cost trends, where applicable, to determine our estimate of claim liabilities. Premium deficiency reserves may be established for short-duration contracts to provide for expected future losses. The premium deficiency reserve calculation considers, among other factors, anticipated investment income.

We have defined claim frequency as follows for each short-duration product:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• LTD: Claim frequency is based on submitted reserve claim counts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Group Life Waiver: Claim frequency is based on submitted reserve claim counts, consistent with LTD.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Dental and Vision: Claim frequency is based on the claim form, which may include one or more procedures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• STD, Critical Illness, Accident, Hospital Indemnity and PFML: Claim frequency is based on submitted claims.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Group Life: Claim frequency is based on submitted life claims (lives, not coverages).

We did not make any significant changes to our methodologies or assumptions used to calculate the liability for unpaid claims for short-duration contracts during 2025.

***Claims Development***

The following tables present undiscounted information about claims development by incurral year, including separate information about incurred claims and paid claims net of reinsurance for the periods indicated. The tables also include information on incurred but not reported claims and the cumulative number of reported claims.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

The tables present information for the number of years for which claims incurred typically remain outstanding, but do not exceed ten years. The data is disaggregated into groupings of claims with similar characteristics, such as duration of the claim payment period and average claim amount, and with consideration to the overall size of the groupings. Outstanding liabilities equal total net incurred claims less total net paid claims plus outstanding liabilities for net unpaid claims of prior years.

*LTD and Group Life Waiver Claims*

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net incurred claims (1)** | **Net incurred claims (1)** | **Net incurred claims (1)** | **Net incurred claims (1)** | **Net incurred claims (1)** | **Net incurred claims (1)** | **Net incurred claims (1)** | **Net incurred claims (1)** | **Net incurred claims (1)** | **Net incurred claims (1)** | **Incurred**<br>**but not**<br>**reported**<br>**claims** | **Cumulative**<br>**number of**<br>**reported**<br>**claims** |
|  | **December 31,** | **December 31,** | **December 31,** | **December 31,** | **December 31,** | **December 31,** | **December 31,** | **December 31,** | **December 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2016** | **2017** | **2018** | **2019** | **2020** | **2021** | **2022** | **2023** | **2024** | **2025** | **2025** | **2025** |
|  | *($ in millions)* | *($ in millions)* | *($ in millions)* | *($ in millions)* | *($ in millions)* | *($ in millions)* | *($ in millions)* | *($ in millions)* | *($ in millions)* | *($ in millions)* | *($ in millions)* |  |
| **Incurral year** |  |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;2016 | $229.8 | $228.4 | $219.4 | $219.5 | $214.4 | $218.7 | $221.9 | $219.0 | $218.0 | $**218.1** | $**0.1** | **6173** |
| &nbsp;&nbsp;&nbsp;2017 |  | 238.4 | 239.7 | 243.1 | 245.8 | 245.2 | 246.5 | 248.9 | 248.7 | **246.4** | **0.1** | **6093** |
| &nbsp;&nbsp;&nbsp;2018 |  |  | 239.4 | 245.1 | 239.2 | 239.8 | 235.3 | 238.0 | 241.9 | **241.1** | **0.1** | **5786** |
| &nbsp;&nbsp;&nbsp;2019 |  |  |  | 255.2 | 248.4 | 240.4 | 240.2 | 238.6 | 243.4 | **240.1** | **0.1** | **5963** |
| &nbsp;&nbsp;&nbsp;2020 |  |  |  |  | 252.1 | 231.0 | 221.1 | 217.7 | 211.3 | **210.6** | **0.1** | **5947** |
| &nbsp;&nbsp;&nbsp;2021 |  |  |  |  |  | 259.7 | 244.5 | 221.6 | 221.2 | **210.0** | **0.5** | **5594** |
| &nbsp;&nbsp;&nbsp;2022 |  |  |  |  |  |  | 274.3 | 240.5 | 227.6 | **222.6** | **6.1** | **5660** |
| &nbsp;&nbsp;&nbsp;2023 |  |  |  |  |  |  |  | 267.4 | 245.2 | **227.6** | **19.7** | **5407** |
| &nbsp;&nbsp;&nbsp;2024 |  |  |  |  |  |  |  |  | 263.9 | **239.0** | **3.5** | **4421** |
| &nbsp;&nbsp;&nbsp;2025 |  |  |  |  |  |  |  |  |  | **254.4** | **95.4** | **2747** |
| &nbsp;&nbsp;&nbsp;Total net incurred claims | &nbsp;&nbsp;&nbsp;Total net incurred claims | &nbsp;&nbsp;&nbsp;Total net incurred claims |  |  |  |  |  |  |  | $**2309.9** |  |  |

---

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Net cumulative paid claims (1)** | **Net cumulative paid claims (1)** | **Net cumulative paid claims (1)** | **Net cumulative paid claims (1)** | **Net cumulative paid claims (1)** | **Net cumulative paid claims (1)** | **Net cumulative paid claims (1)** | **Net cumulative paid claims (1)** | **Net cumulative paid claims (1)** | **Net cumulative paid claims (1)** |
|  | **December 31,** | **December 31,** | **December 31,** | **December 31,** | **December 31,** | **December 31,** | **December 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2016** | **2017** | **2018** | **2019** | **2020** | **2021** | **2022** | **2023** | **2024** | **2025** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| **Incurral year** |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;2016 | $16.2 | $70.6 | $105.6 | $124.9 | $136.8 | $147.2 | $157.1 | $165.3 | $171.5 | $**177.2** |
| &nbsp;&nbsp;&nbsp;2017 |  | 17.8 | 76.5 | 115.0 | 135.9 | 151.7 | 165.4 | 176.8 | 185.6 | **193.2** |
| &nbsp;&nbsp;&nbsp;2018 |  |  | 20.1 | 79.9 | 115.7 | 135.7 | 150.3 | 163.3 | 173.3 | **182.1** |
| &nbsp;&nbsp;&nbsp;2019 |  |  |  | 19.2 | 79.7 | 117.5 | 136.4 | 150.6 | 163.6 | **173.7** |
| &nbsp;&nbsp;&nbsp;2020 |  |  |  |  | 20.6 | 78.8 | 113.1 | 130.0 | 140.8 | **150.4** |
| &nbsp;&nbsp;&nbsp;2021 |  |  |  |  |  | 19.8 | 79.0 | 113.2 | 128.6 | **140.4** |
| &nbsp;&nbsp;&nbsp;2022 |  |  |  |  |  |  | 19.6 | 76.6 | 111.4 | **127.9** |
| &nbsp;&nbsp;&nbsp;2023 |  |  |  |  |  |  |  | 20.0 | 77.3 | **108.1** |
| &nbsp;&nbsp;&nbsp;2024 |  |  |  |  |  |  |  |  | 24.5 | **81.3** |
| &nbsp;&nbsp;&nbsp;2025 |  |  |  |  |  |  |  |  |  | **23.0** |
| &nbsp;&nbsp;&nbsp;Total net paid claims | &nbsp;&nbsp;&nbsp;Total net paid claims | &nbsp;&nbsp;&nbsp;Total net paid claims |  |  |  |  |  |  |  | **1357.3** |
| &nbsp;&nbsp;&nbsp;All outstanding liabilities for unpaid claims prior to 2016 net of reinsurance | &nbsp;&nbsp;&nbsp;All outstanding liabilities for unpaid claims prior to 2016 net of reinsurance | &nbsp;&nbsp;&nbsp;All outstanding liabilities for unpaid claims prior to 2016 net of reinsurance | &nbsp;&nbsp;&nbsp;All outstanding liabilities for unpaid claims prior to 2016 net of reinsurance | &nbsp;&nbsp;&nbsp;All outstanding liabilities for unpaid claims prior to 2016 net of reinsurance | &nbsp;&nbsp;&nbsp;All outstanding liabilities for unpaid claims prior to 2016 net of reinsurance | &nbsp;&nbsp;&nbsp;All outstanding liabilities for unpaid claims prior to 2016 net of reinsurance | &nbsp;&nbsp;&nbsp;All outstanding liabilities for unpaid claims prior to 2016 net of reinsurance |  |  | **250.0** |
| &nbsp;&nbsp;&nbsp;Total outstanding liabilities for unpaid claims net of reinsurance | &nbsp;&nbsp;&nbsp;Total outstanding liabilities for unpaid claims net of reinsurance | &nbsp;&nbsp;&nbsp;Total outstanding liabilities for unpaid claims net of reinsurance | &nbsp;&nbsp;&nbsp;Total outstanding liabilities for unpaid claims net of reinsurance | &nbsp;&nbsp;&nbsp;Total outstanding liabilities for unpaid claims net of reinsurance | &nbsp;&nbsp;&nbsp;Total outstanding liabilities for unpaid claims net of reinsurance | &nbsp;&nbsp;&nbsp;Total outstanding liabilities for unpaid claims net of reinsurance | &nbsp;&nbsp;&nbsp;Total outstanding liabilities for unpaid claims net of reinsurance |  |  | $**1202.6** |

---

(1) 2016-2024 unaudited.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

*Dental, Vision, STD, Critical Illness, Accident, Hospital Indemnity and PFML Claims*

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Net incurred claims (1)** | **Net incurred claims (1)** | **Incurred**<br>**but not**<br>**reported**<br>**claims** | **Cumulative**<br>**number of**<br>**reported**<br>**claims** |
|  | **December 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2024** | **2025** | **2025** | **2025** |
|  | *($ in millions)* | *($ in millions)* | *($ in millions)* | *($ in millions)* |
| **Incurral year** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;2024 | $1129.3 | $**1112.6** | $**—** | **4989358** |
| &nbsp;&nbsp;&nbsp;2025 |  | **1181.8** | **64.0** | **4888403** |
| &nbsp;&nbsp;&nbsp;Total net incurred claims |  | $**2294.4** |  |  |

---

---

| | | |
|:---|:---|:---|
|  | **Net cumulative** | **Net cumulative** |
|  | **paid claims (1)** | **paid claims (1)** |
|  | **December 31,** | **December 31,** |
|  | **2024** | **2025** |
|  | *(in millions)* | *(in millions)* |
| **Incurral year** |  |  |
| &nbsp;&nbsp;&nbsp;2024 | $1039.9 | $**1111.8** |
| &nbsp;&nbsp;&nbsp;2025 |  | **1094.6** |
| &nbsp;&nbsp;&nbsp;Total net paid claims |  | **2206.4** |
| &nbsp;&nbsp;&nbsp;All outstanding liabilities for unpaid claims prior to 2024 net of reinsurance |  | **—** |
| &nbsp;&nbsp;&nbsp;Total outstanding liabilities for unpaid claims net of reinsurance |  | $**88.0** |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) 2024 unaudited.

*Group Life Claims*

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Net incurred claims (1)** | **Net incurred claims (1)** | **Incurred**<br>**but not**<br>**reported**<br>**claims** | **Cumulative**<br>**number of**<br>**reported**<br>**claims** |
|  | **December 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2024** | **2025** | **2025** | **2025** |
|  | *($ in millions)* | *($ in millions)* | *($ in millions)* | *($ in millions)* |
| **Incurral year** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;2024 | $285.1 | $**291.8** | $**1.0** | **6027** |
| &nbsp;&nbsp;&nbsp;2025 |  | **294.1** | **31.8** | **5230** |
| &nbsp;&nbsp;&nbsp;Total net incurred claims |  | $**585.9** |  |  |

---

---

| | | |
|:---|:---|:---|
|  | **Net cumulative** | **Net cumulative** |
|  | **paid claims (1)** | **paid claims (1)** |
|  | **December 31,** | **December 31,** |
|  | **2024** | **2025** |
|  | *(in millions)* | *(in millions)* |
| **Incurral year** |  |  |
| &nbsp;&nbsp;&nbsp;2024 | $223.7 | $**289.5** |
| &nbsp;&nbsp;&nbsp;2025 |  | **231.2** |
| &nbsp;&nbsp;&nbsp;Total net paid claims |  | **520.7** |
| &nbsp;&nbsp;&nbsp;All outstanding liabilities for unpaid claims prior to 2024 net of reinsurance |  | **2.3** |
| &nbsp;&nbsp;&nbsp;Total outstanding liabilities for unpaid claims net of reinsurance |  | $**67.5** |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) 2024 unaudited.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

***Reconciliation of Unpaid Claims to Liability for Unpaid Claims***

Our reconciliation of net outstanding liabilities for unpaid claims of short-duration contracts to the liability for unpaid claims follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  |<br>**LTD and Group**<br>**Life Waiver** | **Dental, Vision, STD,**<br>**Critical Illness,**<br>**Accident, Hospital**<br>**Indemnity and PFML** |<br><br>**Group Life** |<br><br>**Consolidated** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| Net outstanding liabilities for unpaid claims | $**1202.6** | $**88.0** | $**67.5** | $**1358.1** |
| Reconciling items: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Reinsurance recoverable on unpaid claims | **31.8** | **—** | **0.9** | **32.7** |
| &nbsp;&nbsp;&nbsp;Impact of discounting | **(230.5)** | **—** | **—** | **(230.5)** |
| &nbsp;&nbsp;&nbsp;Loss adjustment expense liability | **17.1** | **4.3** | **9.3** | **30.7** |
| Liability for unpaid claims - short-duration contracts | $**1021.0** | $**92.3** | $**77.7** | **1191.0** |
| Insurance contracts other than short-duration |  |  |  | **151.4** |
| Liability for unpaid claims |  |  |  | $**1342.4** |

---

***Claim Duration and Payout***

Our historical average percentage of claims paid in each year from incurral was as follows:

---

| | | | |
|:---|:---|:---|:---|
| | **December 31, 2025 (1)** | **December 31, 2025 (1)** | **December 31, 2025 (1)** |
| <br>**Year** |<br>**LTD and Group Life**<br>**Waiver** | **Dental, Vision, STD,**<br>**Critical Illness,**<br>**Accident, Hospital**<br>**Indemnity and PFML** |<br><br>**Group Life** |
| 1 | **8.7%** | **92.5%** | **77.9%** |
| 2 | **25.4** | **7.4** | **20.0** |
| 3 | **15.5** |  |  |
| 4 | **8.0** |  |  |
| 5 | **5.8** |  |  |
| 6 | **5.2** |  |  |
| 7 | **4.4** |  |  |
| 8 | **3.6** |  |  |
| 9 | **3.0** |  |  |
| 10 | **2.6** |  |  |

---

(1) Unaudited.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

***Discounting***

The following table provides the carrying amount of liabilities reported at present value for short-duration contract unpaid claims. We use a range of discount rates to derive the present value of the unpaid claims. The ranges of discount rates as well as the aggregate amount of discount deducted to derive the liabilities for unpaid claims and interest accretion recognized are also disclosed. Interest accretion is included in benefits, claims and settlement expenses within our consolidated statements of operations.

---

| | | | |
|:---|:---|:---|:---|
|  |<br>**LTD and Group**<br>**Life Waiver** | **Dental, Vision, STD,**<br>**Critical Illness,**<br>**Accident, Hospital**<br>**Indemnity and PFML** |<br><br>**Group Life** |
|  | *($ in millions)* | *($ in millions)* | *($ in millions)* |
| Carrying amount of liabilities for unpaid claims |  |  |  |
| &nbsp;&nbsp;&nbsp;December 31, 2025 | $**1021.0** | $**92.3** | $**77.7** |
| &nbsp;&nbsp;&nbsp;December 31, 2024 | 1062.1 | 94.3 | 83.9 |
| Range of discount rates |  |  |  |
| &nbsp;&nbsp;&nbsp;December 31, 2025 | **2.8 - 7.0%** | **__ - __%** | **__ - __%** |
| &nbsp;&nbsp;&nbsp;December 31, 2024 | 2.8 - 7.0 | __ - __ | __ - __ |
| Aggregate amount of discount |  |  |  |
| &nbsp;&nbsp;&nbsp;December 31, 2025 | $**230.5** | $**—** | $**—** |
| &nbsp;&nbsp;&nbsp;December 31, 2024 | 226.6 |  |  |
| Interest accretion |  |  |  |
| &nbsp;&nbsp;&nbsp;For the year ended: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December 31, 2025 | $**36.7** | $**—** | $**—** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December 31, 2024 | 34.7 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December 31, 2023 | 34.7 |  |  |

---

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

**Long-Duration Contracts**

***Gross Premiums or Assessments and Interest Accretion***

The amount of gross premiums or assessments and interest accretion recognized by segment in the consolidated statements of operations was as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Gross premiums or assessments (1)** | **Gross premiums or assessments (1)** | **Gross premiums or assessments (1)** | **Interest accretion (2)** | **Interest accretion (2)** | **Interest accretion (2)** |
|  | **For the year ended** | **For the year ended** | **For the year ended** | **For the year ended** | **For the year ended** | **For the year ended** |
|  | **December 31,** | **December 31,** | **December 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2025** | **2024** | **2023** | **2025** | **2024** | **2023** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| Retirement and Income Solutions: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Pension risk transfer | $**2959.3** | $3103.1 | $2905.9 | $**1234.2** | $1135.1 | $1008.6 |
| &nbsp;&nbsp;&nbsp;Individual fixed income annuities | **31.0** | 46.6 | 42.5 | **197.2** | 208.4 | 219.1 |
| Total Retirement and Income Solutions | **2990.3** | 3149.7 | 2948.4 | **1431.4** | 1343.5 | 1227.7 |
| Benefits and Protection: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Specialty Benefits: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Individual disability | **651.5** | 640.0 | 624.6 | **105.0** | 99.8 | 94.5 |
| &nbsp;&nbsp;&nbsp;Life Insurance: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Universal life | **718.6** | 715.3 | 681.8 | **282.4** | 253.3 | 209.2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Term life | **693.6** | 673.3 | 649.1 | **66.6** | 57.0 | 48.2 |
| Total Benefits and Protection | **2063.7** | 2028.6 | 1955.5 | **454.0** | 410.1 | 351.9 |
| Corporate: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Long-term care insurance | **5.2** | 4.9 | 5.1 | **9.4** | 9.3 | 9.6 |
| Total per consolidated statements of operations | $**5059.2** | $5183.2 | $4909.0 | $**1894.8** | $1762.9 | $1589.2 |

---

(1) Gross premiums are included within premiums and other considerations on the consolidated statements of operations. Assessments,
which are only applicable to the Life Insurance – Universal life level of aggregation, are included within fees and other
revenues on the consolidated statements of operations.

(2) Interest accretion is included within benefits, claims and settlement expenses on the consolidated statements of operations.

***Liability for Future Policy Benefits***

The liability for future policy benefits ("LFPB") for individual and group annuities is generally equal to the present value of expected future policy benefit payments. The reserves are computed using assumptions for mortality and interest. The LFPB for non-participating term life insurance, individual disability income contracts and individual and group long-term care contracts is generally equal to the present value of expected future policy benefit payments less the present value of expected net premiums. The reserves are computed using assumptions for mortality, interest, morbidity and lapse. Cohorts are used as the unit of account for liability measurement. Actual cash flows are grouped into issue-year cohorts for the liability calculation and updated quarterly. We review and update, if necessary, assumptions used to measure cash flows for the LFPB during the third quarter of each year, or more frequently if evidence suggests assumptions should be revised. The change in our liability estimate as a result of updating cash flow assumptions is recognized in net income.

An interest accretion rate is determined for an identified cohort and remains unchanged after the issue year. For policies issued on or prior to December 31, 2020, the interest accretion rate is based on the assumed investment yield when the business was issued. For policies issued after December 31, 2020, the interest accretion rate is based on the upper-medium grade fixed-income instrument yields, which is generally equivalent to a single-A rated bond yield matched to the duration of our insurance liabilities, when the business was issued.

The LFPB is remeasured to reflect current upper-medium grade fixed-income instrument yields as of each reporting date. The liability is calculated by discounting cash flows using rate curves reflecting the currency and duration of the insurance liabilities. For discount rate tenors, or points on the curves, where the upper-medium grade fixed-income instrument yields are not liquid or limited observable market data is available, we use various estimation techniques consistent with fair value measurement guidance.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

Further details regarding reference rates used are included under "Interest Accretion and Current Discount Rates."

***Retirement and Income Solutions***

The balances and the changes in the present value for expected future policy benefits were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the year ended** | **For the year ended** | **For the year ended** | **For the year ended** |
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2024** | **December 31, 2024** |
|  | **Pension**<br>**risk**<br>**transfer** | **Individual**<br>**fixed income**<br>**annuities** | **Pension**<br>**risk**<br>**transfer** | **Individual**<br>**fixed income**<br>**annuities** |
|  | *($ in millions)* | *($ in millions)* | *($ in millions)* | *($ in millions)* |
| **Present value of expected future policy benefit payments** |  |  |  |  |
| Balance at beginning of period | $**24958.1** | $**4504.6** | $23855.8 | $4914.1 |
| Effect of changes in discount rate assumptions at beginning of period | **1938.8** | **420.4** | 1036.1 | 296.7 |
| Balance at beginning of period at original discount rate | **26896.9** | **4925.0** | 24891.9 | 5210.8 |
| &nbsp;&nbsp;&nbsp;Effect of changes in cash flow assumptions | **—** | **—** | (3.4) | (38.4) |
| &nbsp;&nbsp;&nbsp;Effect of actual variances from expected experience | **(17.9)** | **2.3** | (1.5) | (1.7) |
| Adjusted beginning of period balance at original discount rate | **26879.0** | **4927.3** | 24887.0 | 5170.7 |
| &nbsp;&nbsp;&nbsp;Interest accrual | **1234.2** | **197.2** | 1135.1 | 208.4 |
| &nbsp;&nbsp;&nbsp;Benefit payments | **(2442.8)** | **(490.0)** | (2238.1) | (500.2) |
| &nbsp;&nbsp;&nbsp;Issuances | **2973.2** | **30.5** | 3112.9 | 46.1 |
| Balance at end of period at original discount rate | **28643.6** | **4665.0** | 26896.9 | 4925.0 |
| Effect of changes in discount rate assumptions at end of period | **(1294.3)** | **(297.6)** | (1938.8) | (420.4) |
| Future policy benefits | **27349.3** | **4367.4** | 24958.1 | 4504.6 |
| Reinsurance impact | **(4366.7)** | **(4310.3)** | (3734.0) | (4469.4) |
| Future policy benefits after reinsurance | $**22982.6** | $**57.1** | $21224.1 | $35.2 |
| Weighted-average duration for future policy benefits (years) (1) | **7.9** | **7.1** | 8.0 | 7.2 |

---

(1) Represents the average of the cohort-level duration of the benefit cash flows weighted by the reserve balance for each cohort.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

***Benefits and Protection***

The balances and the changes in the present value for expected net premiums and expected future policy benefits were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the year ended** | **For the year ended** | **For the year ended** | **For the year ended** |
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2024** | **December 31, 2024** |
|  | **Specialty**<br>**Benefits** | **Life**<br>**Insurance** | **Specialty**<br>**Benefits** | **Life**<br>**Insurance** |
|  | **Individual**<br>**disability** |<br>**Term life** | **Individual**<br>**disability** |<br>**Term life** |
|  | *($ in millions)* | *($ in millions)* | *($ in millions)* | *($ in millions)* |
| **Present value of expected net premiums** |  |  |  |  |
| Balance at beginning of period | $**2680.6** | $**4107.2** | $2552.3 | $3793.7 |
| Effect of changes in discount rate assumptions at beginning of period | **436.4** | **290.1** | 313.7 | 100.1 |
| Balance at beginning of period at original discount rate | **3117.0** | **4397.3** | 2866.0 | 3893.8 |
| &nbsp;&nbsp;&nbsp;Effect of changes in cash flow assumptions | **(22.5)** | **163.2** | 183.9 | 419.9 |
| &nbsp;&nbsp;&nbsp;Effect of actual variances from expected experience | **114.8** | **11.7** | 168.3 | 42.5 |
| Adjusted beginning of period balance at original discount rate | **3209.3** | **4572.2** | 3218.2 | 4356.2 |
| &nbsp;&nbsp;&nbsp;Interest accrual | **108.8** | **208.7** | 103.5 | 190.9 |
| &nbsp;&nbsp;&nbsp;Net premiums collected | **(298.0)** | **(418.8)** | (289.1) | (390.8) |
| &nbsp;&nbsp;&nbsp;Issuances | **70.5** | **228.5** | 84.4 | 241.0 |
| Balance at end of period at original discount rate | **3090.6** | **4590.6** | 3117.0 | 4397.3 |
| Effect of changes in discount rate assumptions at end of period | **(349.8)** | **(198.4)** | (436.4) | (290.1) |
| Balance at end of period | $**2740.8** | $**4392.2** | $2680.6 | $4107.2 |
| **Present value of expected future policy benefit payments** |  |  |  |  |
| Balance at beginning of period | $**4509.6** | $**5355.2** | $4450.7 | $4879.6 |
| Effect of changes in discount rate assumptions at beginning of period | **1302.8** | **366.0** | 903.5 | 124.5 |
| Balance at beginning of period at original discount rate | **5812.4** | **5721.2** | 5354.2 | 5004.1 |
| &nbsp;&nbsp;&nbsp;Effect of changes in cash flow assumptions | **(42.6)** | **240.4** | 216.2 | 488.1 |
| &nbsp;&nbsp;&nbsp;Effect of actual variances from expected experience | **107.9** | **4.1** | 173.2 | 45.1 |
| Adjusted beginning of period balance at original discount rate | **5877.7** | **5965.7** | 5743.6 | 5537.3 |
| &nbsp;&nbsp;&nbsp;Interest accrual | **213.8** | **275.3** | 203.3 | 247.9 |
| &nbsp;&nbsp;&nbsp;Benefit payments | **(234.1)** | **(359.7)** | (219.0) | (321.6) |
| &nbsp;&nbsp;&nbsp;Issuances | **68.9** | **242.3** | 84.5 | 257.6 |
| Balance at end of period at original discount rate | **5926.3** | **6123.6** | 5812.4 | 5721.2 |
| Effect of changes in discount rate assumptions at end of period | **(1191.3)** | **(215.7)** | (1302.8) | (366.0) |
| Balance at end of period | $**4735.0** | $**5907.9** | $4509.6 | $5355.2 |
| Future policy benefits (1) | $**1994.2** | $**1515.7** | $1829.0 | $1248.0 |
| Reinsurance impact | **(430.0)** | **(491.5)** | (412.1) | (333.8) |
| Future policy benefits after reinsurance | $**1564.2** | $**1024.2** | $1416.9 | $914.2 |
| Weighted-average duration for future policy benefits (years) (2) | **17.2** | **7.4** | 18.3 | 8.4 |

---

(1) Represents the present value of expected future policy benefit payments less the present value of expected net premiums.

(2) Represents the average of the cohort-level duration of the benefits less the net premium cash flows weighted by the reserve
balance for each cohort.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

We updated our actuarial assumptions during the third quarter of 2025, resulting in a $20.1 million decrease in the LFPB and a $16.2 million increase to income before taxes, net of reinsurance, for Individual disability. This was primarily due to favorable updates to morbidity assumptions. The updates also resulted in a $77.2 million increase in the LFPB and a $54.1 million decrease to income before taxes, net of reinsurance, for Term life. This was primarily due to unfavorable updates to lapse and mortality assumptions.

We updated our actuarial assumptions during the third quarter of 2024, resulting in a $32.3 million increase in the LFPB and an $18.2 million decrease to income before taxes, net of reinsurance, for Individual disability. This was primarily due to unfavorable updates to morbidity and lapse assumptions. The updates also resulted in a $68.2 million increase in the LFPB and a $45.0 million decrease to income before taxes, net of reinsurance, for Term life. This was primarily due to unfavorable updates to mortality and lapse assumptions.

***Additional Liability for Certain Benefit Features***

The LFPB also includes an additional reserve on certain universal life contracts where benefit features result in gains in early years followed by losses in later years. The liability for these future losses is accrued in relation to estimated contract assessments. A premium deficiency exists if the net liabilities together with future premiums are determined to be insufficient to provide for expected future policy benefits. Premium deficiency testing considers, among other factors, anticipated investment income and does not include a provision for adverse deviation. We did not have a premium deficiency reserve as of December 31, 2025 or December 31, 2024.

The balances and the changes in the additional liability for certain benefit features for Life Insurance – Universal life contracts, excluding the impact of unrealized gains (losses), were as follows:

---

| | | |
|:---|:---|:---|
|  | **For the year ended**<br>**December 31, 2025** | **For the year ended**<br>**December 31, 2024** |
|  | *($ in millions)* | *($ in millions)* |
| Balance at beginning of period | $**6037.2** | $5326.5 |
| &nbsp;&nbsp;&nbsp;Effect of changes in cash flow assumptions | **6.8** | 151.9 |
| &nbsp;&nbsp;&nbsp;Effect of actual variances from expected experience | **18.5** | 28.0 |
| &nbsp;&nbsp;&nbsp;Interest accrual | **282.4** | 253.3 |
| &nbsp;&nbsp;&nbsp;Net assessments collected | **430.6** | 425.2 |
| &nbsp;&nbsp;&nbsp;Benefit payments | **(170.7)** | (147.7) |
| Balance at end of period | **6604.8** | 6037.2 |
| Reinsurance impact | **(6593.6)** | (6011.3) |
| Balance at end of period after reinsurance | $**11.2** | $25.9 |
| Weighted-average duration for additional liability (years) (1) | **21.6** | 23.3 |

---

(1) Represents the average of the cohort-level duration of the benefits less the net assessment cash flows weighted by the reserve
balance for each cohort.

We updated our actuarial assumptions during the third quarter of 2024, resulting in a $151.9 million increase in the additional liability for certain benefit features primarily due to mortality assumptions related to ULSG products, resulting in a $0.3 million decrease to income before taxes, net of reinsurance.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

***Corporate***

The balances and the changes in the present value for expected net premiums and expected future policy benefits for long-term care insurance were as follows:

---

| | | |
|:---|:---|:---|
|  | **For the year ended**<br>**December 31, 2025** | **For the year ended**<br>**December 31, 2024** |
|  | *($ in millions)* | *($ in millions)* |
| **Present value of expected net premiums** |  |  |
| Balance at beginning of period | $**30.8** | $42.8 |
| Effect of changes in discount rate assumptions at beginning of period | **(1.3)** | (3.0) |
| Balance at beginning of period at original discount rate | **29.5** | 39.8 |
| &nbsp;&nbsp;&nbsp;Effect of changes in cash flow assumptions | **3.3** | (5.3) |
| &nbsp;&nbsp;&nbsp;Effect of actual variances from expected experience | **0.3** | (2.2) |
| Adjusted beginning of period balance at original discount rate | **33.1** | 32.3 |
| &nbsp;&nbsp;&nbsp;Interest accrual | **1.8** | 1.9 |
| &nbsp;&nbsp;&nbsp;Net premiums collected | **(4.5)** | (4.7) |
| Balance at end of period at original discount rate | **30.4** | 29.5 |
| Effect of changes in discount rate assumptions at end of period | **2.0** | 1.3 |
| Balance at end of period | $**32.4** | $30.8 |
| **Present value of expected future policy benefit payments** |  |  |
| Balance at beginning of period | $**195.6** | $209.5 |
| Effect of changes in discount rate assumptions at beginning of period | **(8.8)** | (20.0) |
| Balance at beginning of period at original discount rate | **186.8** | 189.5 |
| &nbsp;&nbsp;&nbsp;Effect of changes in cash flow assumptions | **1.3** | (1.2) |
| &nbsp;&nbsp;&nbsp;Effect of actual variances from expected experience | **3.4** | 2.5 |
| Adjusted beginning of period balance at original discount rate | **191.5** | 190.8 |
| &nbsp;&nbsp;&nbsp;Interest accrual | **11.2** | 11.2 |
| &nbsp;&nbsp;&nbsp;Benefit payments | **(16.3)** | (15.2) |
| Balance at end of period at original discount rate | **186.4** | 186.8 |
| Effect of changes in discount rate assumptions at end of period | **12.7** | 8.8 |
| Balance at end of period | $**199.1** | $195.6 |
| Future policy benefits (1) | $**166.7** | $164.8 |
| Reinsurance impact | **(166.7)** | (164.8) |
| Future policy benefits after reinsurance | $**—** | $— |
| Weighted-average duration for future policy benefits (years) (2) | **9.7** | 9.3 |

---

(1) Represents the present value of expected future policy benefit payments less the present value of expected net premiums.

(2) Represents the average of cohort-level duration of the benefits less the net premium cash flows weighted by the reserve balance
for each cohort.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

***Expected Future Gross Premiums and Benefit Payments***

The amounts of expected undiscounted future benefit payments, expected undiscounted future gross premiums and expected discounted future gross premiums, utilizing the current upper-medium fixed-income instrument yield, were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
|  | *(in millions)* | *(in millions)* |
| **Retirement and Income Solutions:** |  |  |
| &nbsp;&nbsp;&nbsp;**Pension risk transfer** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expected undiscounted future benefit payments | $**42601.7** | $39532.3 |
| &nbsp;&nbsp;&nbsp;**Individual fixed income annuities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expected undiscounted future benefit payments | $**6221.3** | $6622.6 |
| **Benefits and Protection – Specialty Benefits:** |  |  |
| &nbsp;&nbsp;&nbsp;**Individual disability** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expected discounted future gross premiums | $**5683.8** | $5484.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expected undiscounted future gross premiums | $**8763.7** | $8680.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expected undiscounted future benefit payments | $**9951.7** | $9808.8 |
| **Benefits and Protection – Life Insurance:** |  |  |
| &nbsp;&nbsp;&nbsp;**Term life** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expected discounted future gross premiums | $**6929.2** | $6651.2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expected undiscounted future gross premiums | $**11960.4** | $11391.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expected undiscounted future benefit payments | $**9653.9** | $8970.7 |
| **Corporate:** |  |  |
| &nbsp;&nbsp;&nbsp;**Long-term care insurance** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expected discounted future gross premiums | $**37.4** | $38.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expected undiscounted future gross premiums | $**52.7** | $55.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expected undiscounted future benefit payments | $**363.1** | $357.3 |

---

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

***Interest Accretion and Current Discount Rates***

The interest accretion rate shown for each level of aggregation is an average of the cohort-level accretion rates weighted by the reserve balance for each cohort within that level of aggregation. The current discount rate is calculated at a cohort-level based on current upper-medium fixed-income instrument yields and weighted by the reserve balance for each cohort within each level of aggregation. The weighted-average rates were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Interest accretion rate** | **Interest accretion rate** | **Current discount rate** | **Current discount rate** |
|  | **December 31, 2025** | **December 31, 2024** | **December 31, 2025** | **December 31, 2024** |
| Retirement and Income Solutions: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Pension risk transfer | **4.70%** | 4.61% | **5.28%** | 5.55% |
| &nbsp;&nbsp;&nbsp;Individual fixed income annuities | **4.22%** | 4.22% | **5.16%** | 5.50% |
| Benefits and Protection: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Specialty Benefits: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Individual disability | **3.84%** | 3.89% | **5.43%** | 5.64% |
| &nbsp;&nbsp;&nbsp;Life Insurance: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Universal life | **4.74%** | 4.75% | **See note (1)** | See note (1) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Term life | **4.81%** | 4.82% | **4.91%** | 5.35% |
| Corporate: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Long-term care insurance | **6.16%** | 6.16% | **5.36%** | 5.58% |

---

(1) The additional liability for certain benefit features for Life Insurance – Universal life is measured using the discount
rate at contract inception. Therefore, the current discount rate is not applicable for this product.

**12. Market Risk Benefits**

Contracts or contract features that provide protection to the policyholder from capital market risk, including equity, interest rate or foreign exchange risk, and expose us to other-than-nominal capital market risk are classified as MRBs. We issue certain annuity contracts that include MRBs that have been bifurcated from the host contract. The Retirement and Income Solutions segment offers variable annuity products with GMWB riders and GMDB riders, including return-of-premium GMDB and GMWB riders for its RILA products.

MRBs are measured at fair value at the contract level and can be in either an asset or liability position, depending on certain inputs at the reporting date. MRB assets and liabilities are presented separately within the consolidated statements of financial position. Increases to an asset or decreases to a liability are described as favorable changes to fair value.

Changes in fair value are reported in MRB remeasurement (gain) loss on the consolidated statements of operations. However, the change in fair value related to our own nonperformance risk is reported in OCI. For contracts that contain multiple MRB features, the MRBs are valued on a combined basis using an integrated model.

MRBs are classified as Level 3 fair value measurements as the fair value is based on unobservable inputs. The key assumptions for calculating the fair value of the MRBs 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 MRBs are valued using stochastic models that incorporate a spread reflecting our own nonperformance risk.

The assumption for our own nonperformance risk for MRBs is based on the current market credit spreads for debt-like instruments we have issued and are available in the market. Increases (decreases) in our own nonperformance risk, which impacts the rates used to discount future cash flows, could lead to favorable (unfavorable) changes in the fair value of the MRBs.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

Long-term interest rates are used as the mean return when projecting the growth in the value of the 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. An increase (decrease) in risk-free rates could cause a favorable (unfavorable) change in the fair value of the MRBs. A decrease (increase) in market volatilities could cause a favorable (unfavorable) change in the fair value of the MRBs.

An increase (decrease) in mortality rates or the overall lapse rate assumptions could cause a favorable (unfavorable) change in the fair value of the MRBs. The lapse rate assumption may vary dynamically based on the relationship between the guarantee and associated account value. A weaker (stronger) dynamic lapse rate assumption could lead to favorable (unfavorable) changes in the fair value of the MRBs.

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. A decrease (increase) in the number of contractholders taking withdrawals, contractholders taking withdrawals earlier versus later, or contractholders taking more versus less of their benefit could lead to favorable (unfavorable) changes in the fair value of the MRBs.

The following tables summarize disaggregated MRB amounts in an asset and liability position reported in the consolidated statements of financial position.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  |<br>**Asset** |<br>**Liability** | **Net asset**<br>**(liability)** |<br>**Asset** |<br>**Liability** | **Net asset**<br>**(liability)** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| Retirement and Income Solutions: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Individual variable annuities | $**197.1** | $**66.9** | $**130.2** | $199.5 | $62.1 | $137.4 |
| Total MRB per consolidated statements of financial position | $**197.1** | $**66.9** | $**130.2** | $199.5 | $62.1 | $137.4 |

---

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

***Retirement and Income Solutions***

The net asset (liability) balances and the changes in the valuation of the MRBs for Individual variable annuities were as follows:

---

| | | |
|:---|:---|:---|
|  | **For the year ended**<br>**December 31, 2025** | **For the year ended**<br>**December 31, 2024** |
|  | *($ in millions)* | *($ in millions)* |
| Balance at beginning of period | $**137.4** | $41.5 |
| Effect of changes in nonperformance risk at beginning of period | **19.0** | 7.7 |
| Adjusted balance at beginning of period | **156.4** | 49.2 |
| Effect of: |  |  |
| &nbsp;&nbsp;&nbsp;Interest accrual and expected policyholder behavior | **(62.8)** | (66.8) |
| &nbsp;&nbsp;&nbsp;Benefit payments | **—** | 0.6 |
| &nbsp;&nbsp;&nbsp;Changes in interest rates | **13.0** | 100.4 |
| &nbsp;&nbsp;&nbsp;Changes in equity markets | **53.1** | 92.4 |
| &nbsp;&nbsp;&nbsp;Changes in equity index volatility | **(8.3)** | 12.0 |
| &nbsp;&nbsp;&nbsp;Actual policyholder behavior different from expected behavior | **(3.9)** | (12.7) |
| &nbsp;&nbsp;&nbsp;Changes in future expected policyholder behavior | **—** | (20.2) |
| &nbsp;&nbsp;&nbsp;Changes in other future expected assumptions | **(0.3)** | 1.5 |
| Adjusted balance at end of period | **147.2** | 156.4 |
| Effect of changes in nonperformance risk at end of period | **(17.0)** | (19.0) |
| Balance at end of period | $**130.2** | $137.4 |
| Weighted-average attained age of policyholders (years) (1) | **67.0** | 67.4 |
| Net amount at risk (2) | $**29.3** | $46.8 |

---

(1) The weighted-average attained age is calculated at the contract level using the total contributions since inception and the
age of the contractholders.

(2) The net amount at risk for our GMDB riders is defined
as the current GMDB amount in excess of the current account balance. The net amount at risk for our GMWB riders is defined as
the greater of the present value of the GMWB payments less the current account balance or zero. For contracts with both GMDB and
GMWB riders, the net amount at risk is the greater of the GMDB or GMWB net amount at risk. We had a decrease in the net amount
at risk in 2025 primarily as a result of increases in the equity markets.

Significant changes to inputs and assumptions that impacted the change in the MRB fair value measurement shown above were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the year ended** | **For the year ended** | **For the year ended** | **For the year ended** |
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2024** | **December 31, 2024** |
| | <br>**Change in input** | **Change in net** <br>**MRB asset (liability)** | <br>**Change in input** | **Change in net** <br>**MRB asset (liability)** |
| Long-term interest rate | Increased | Favorable | Increased | Favorable |
| Equity markets | Increased | Favorable | Increased | Favorable |
| Equity market volatilities | Increased | Unfavorable | Decreased | Favorable |
| Own nonperformance risk | Increased | Favorable | Decreased | Unfavorable |

---

See "Unobservable Inputs for Fair Value Measurement" for additional details on the inputs.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

**Unobservable Inputs for Fair Value Measurement**

The following table provides quantitative information about the significant unobservable inputs used for fair value measurements of MRBs. The utilization rate and mortality rate inputs are omitted from the table as a range does not provide meaningful presentation. The utilization rate represents the number of contractholders taking withdrawals in addition to the amount and timing of the withdrawals. The mortality rate is an input based on an appropriate industry mortality table.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Range of inputs** | **Range of inputs** | **Weighted-**<br>**Average** | **Range of inputs** | **Range of inputs** | **Weighted-**<br>**Average** |
| Retirement and Income Solutions: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Individual variable annuities |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term interest rate (1) | **4.80** | **4.84%** | **4.82%** | 4.78 | 4.85% | 4.81% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term equity market volatility | **17.80** | **38.80%** | **21.94%** | 18.10 | 35.53% | 21.76% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nonperformance risk | **0.49** | **1.12%** | **0.95%** | 0.40 | 1.10% | 0.89% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lapse rate | **0.90** | **55.00%** | **6.51%** | 0.90 | 55.00% | 5.79% |

---

(1) Represents the range of rate curves used in the valuation
analysis that we have determined market participants would use when pricing the instrument. The rate curves are derived from an
interpolation between various observable swap rates.

**13. Reinsurance**

We reinsure a portion of the insurance risks associated with our individual disability, traditional life, universal life, medical and long-term care insurance as well as pension risk transfer and retail fixed annuity contracts with significant life insurance risk through reinsurance agreements with affiliated and unaffiliated reinsurance companies, primarily on a quota share, excess loss, yearly renewable term ("YRT") or coinsurance basis. We have coinsurance with funds withheld reinsurance agreements in which we cede certain of our term life and PRT blocks of business using the reinsurance method of accounting. We also have coinsurance with funds withheld reinsurance agreements in which we cede our retail fixed annuity and ULSG blocks of business using both the reinsurance and deposit methods of accounting.

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. As of December 31, 2025 and 2024, we had $19,810.7 million and $18,698.7 million of reinsurance recoverable assets, respectively, included in reinsurance recoverable and deposit receivable on the consolidated statements of financial position, which does not reflect potentially offsetting impacts of collateral. As of December 31, 2025 and 2024, we had $23.5 million and $60.3 million of reinsurance recoverable liabilities, respectively, included in future policy benefits and claims on the consolidated statements of financial position. As of December 31, 2025 and 2024, $19,541.1 million, or 99%, and $18,396.2 million, or 99%, were with our five largest ceded reinsurers, respectively.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

The effects of reinsurance on premiums and other considerations and policy and contract benefits were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| Premiums and other considerations: |  |  |  |
| &nbsp;&nbsp;&nbsp;Direct | $**6777.3** | $6822.9 | $6423.8 |
| &nbsp;&nbsp;&nbsp;Assumed | **549.5** | 532.4 | 517.0 |
| &nbsp;&nbsp;&nbsp;Ceded | **(1539.9)** | (1264.1) | (544.1) |
| Net premiums and other considerations | $**5786.9** | $6091.2 | $6396.7 |
| Benefits, claims and settlement expenses: |  |  |  |
| &nbsp;&nbsp;&nbsp;Direct | $**8835.0** | $8681.1 | $8022.0 |
| &nbsp;&nbsp;&nbsp;Assumed | **1059.5** | 1019.8 | 853.7 |
| &nbsp;&nbsp;&nbsp;Ceded (1) | **(2766.1)** | (2868.5) | (1649.5) |
| Net benefits, claims and settlement expenses | $**7128.4** | $6832.4 | $7226.2 |
| Liability for future policy benefits remeasurement (gain) loss: |  |  |  |
| &nbsp;&nbsp;&nbsp;Direct | $**(32.0)** | $124.7 | $466.9 |
| &nbsp;&nbsp;&nbsp;Assumed | **85.4** | 126.9 | 269.6 |
| &nbsp;&nbsp;&nbsp;Ceded (1) | **(4.9)** | 409.6 | (789.0) |
| Net liability for future policy benefits remeasurement (gain) loss | $**48.5** | $661.2 | $(52.5) |

---

(1) Includes the one-time impact of YRT reinsurance transactions in 2024.

As of December 31, 2025 and 2024, we had a $4,076.1 million and $4,897.6 million reinsurance deposit receivable, respectively.

Refer to Note 5, Investments, for information on our financing receivables valuation allowance related to the reinsurance recoverable and deposit receivable.

**Cost of Reinsurance**

A reinsurance asset or liability is established to spread the expected net reinsurance costs or profits over the expected term of the contracts. The cost of reinsurance asset and liability are reported in premiums due and other receivables and liability for future policy benefits and claims, respectively, on the consolidated statements of financial position. The cost of reinsurance asset and liability included on the consolidated statements of financial position were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
|  | *(in millions)* | *(in millions)* |
| Cost of reinsurance asset | $**3327.7** | $3426.5 |
| Cost of reinsurance liability | $**1210.8** | $1202.2 |

---

Cost of reinsurance amortization, including the impact of remeasurement, of $106.6 million, $642.3 million and $20.4 million for the years ended December 31, 2025, 2024 and 2023, respectively, was reported in benefits, claims and settlement expenses and liability for future policy benefits remeasurement (gain) loss on the consolidated statements of operations. The 2024 impacts of remeasurement include the one-time impact of YRT reinsurance transactions.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

**Funds Withheld**

The following assets were held in support of our reserves associated with our coinsurance with funds withheld agreements and are reported in the line items shown on the consolidated statements of financial position.

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
|  | *(in millions)* | *(in millions)* |
| Fixed maturities, available-for-sale | $**17723.8** | $17514.5 |
| Fixed maturities, trading | **279.3** | 299.4 |
| Equity securities | **0.3** | 0.3 |
| Mortgage loans | **2401.6** | 2620.2 |
| Other investments | **1732.6** | 1166.7 |
| Cash and cash equivalents | **849.8** | 1200.6 |
| Accrued interest income | **212.1** | 213.8 |
| Net other liabilities | **(159.0)** | (287.7) |
| &nbsp;&nbsp;&nbsp;Net assets | $**23040.5** | $22727.8 |

---

Certain assets are reported at amortized cost while the fair value of those assets is reflected in the funds withheld payable. As of December 31, 2025 and 2024, we had a $22,910.0 million and $22,497.9 million funds withheld payable, which was net of a $2,432.6 million and $2,906.0 million embedded derivative asset, respectively. The change in fair value of the embedded derivative was a gain (loss) of $(473.4) million, $579.9 million and $(1,326.7) million for the years ended December 31, 2025, 2024 and 2023, respectively.

While the economic benefits of the funds withheld assets flow to the reinsurers, we retain legal ownership of the assets within the funds withheld account. Guidelines are in place to ensure the investment risk is appropriately managed. Net investment income and net realized capital gains (losses) related to the assets on the consolidated statements of operations is reported net of the amounts that flow to the reinsurers. The realized gains and losses that do not flow to the reinsurers are reported in net realized capital gains (losses) on funds withheld assets on the consolidated statements of operations.

Following are the components of net investment income on the funds withheld assets that were passed to reinsurers.

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| Fixed maturities, available-for-sale | $**1000.0** | $1028.2 | $906.9 |
| Fixed maturities, trading | **20.3** | 21.5 | 11.9 |
| Equity securities | **—** |  | 0.2 |
| Mortgage loans | **117.5** | 138.3 | 125.2 |
| Cash and cash equivalents | **40.4** | 59.5 | 58.9 |
| Other | **166.7** | 90.1 | 63.9 |
| Total | **1344.9** | 1337.6 | 1167.0 |
| Investment expenses | **(30.9)** | (41.4) | (24.7) |
| Net investment income | $**1314.0** | $1296.2 | $1142.3 |

---

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

Following are the components of net realized capital gains (losses) on the funds withheld assets that were passed to reinsurers.

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| Fixed maturities, available-for-sale | $**(53.2)** | $(58.7) | $(230.9) |
| Fixed maturities, trading | **(10.4)** |  | (0.1) |
| Equity securities | **—** |  | (1.2) |
| Mortgage loans | **(1.4)** | (1.9) | (34.1) |
| Derivatives | **(1.0)** | 2.4 | 7.2 |
| Other | **(4.0)** |  |  |
| Net realized capital losses | $**(70.0)** | $(58.2) | $(259.1) |

---

**14. Debt**

**Short-Term Debt**

The components of short-term debt were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | | | **December 31, 2025** | **December 31, 2025** |
| <br>**Obligor/Applicant** | <br>**Financing**<br>**structure** | <br>**Maturity** |<br>**Capacity** | **Short-term debt**<br>**outstanding** |
|  |  |  | *(in millions)* | *(in millions)* |
| PLIC | Credit facility | October 2027 | $**800.0** | $**—** |
| Total |  |  | $**800.0** | $**—** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | | | **December 31, 2024** | **December 31, 2024** |
| <br>**Obligor/Applicant** | <br>**Financing**<br>**structure** | <br>**Maturity** |<br>**Capacity** | **Short-term debt**<br>**outstanding** |
|  |  |  | *(in millions)* | *(in millions)* |
| PLIC | Credit facility | October 2027 | $800.0 | $— |
| Principal Credit Real Estate Income Trust | Secured subscription facility |  | 126.0 | 119.0 |
| Total |  |  | $926.0 | $119.0 |

---

Our revolving credit facility is committed and available for general corporate purposes. This credit facility also provides 100% back-stop support for our commercial paper program, of which we had no outstanding balances as of both December 31, 2025 and 2024.

A VIE that was deconsolidated in 2025 had short-term debt from a secured subscription facility. The facility provided for revolving loans, up to a maximum aggregate availability of $150.0 million, which were secured by outstanding capital commitments of us and an unaffiliated insurance company. Borrowings were permitted for any purpose under the borrowers' constituent documents and were required to be repaid within twelve months of issuance. The weighted-average interest rate on short-term borrowings from this facility as of December 31, 2024, was 6.84%.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

**Long-Term Debt**

The components of long-term debt were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  |<br><br>**Principal** | **Net unamortized**<br>**discount,**<br>**premium and**<br>**debt issuance**<br>**costs** |<br><br>**Carrying**<br>**amount** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| Non-recourse mortgages and notes payable | $**2.9** | $**—** | $**2.9** |
| Total long-term debt | $**2.9** | $**—** | $**2.9** |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  |<br><br>**Principal** | **Net unamortized**<br>**discount,**<br>**premium and**<br>**debt issuance**<br>**costs** |<br><br>**Carrying**<br>**amount** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| Secured credit facilities | $21.8 | $— | $21.8 |
| Non-recourse mortgages and notes payable | 3.0 | (0.1) | 2.9 |
| Total long-term debt | $24.8 | $(0.1) | $24.7 |

---

A VIE that was deconsolidated in 2025 had long-term debt from secured credit facilities that were primarily financings for real estate loans. As of December 31, 2024, the outstanding principal balance was $21.8 million for one loan with an interest rate of 6.47%. Outstanding debt was secured by the underlying real estate loans, which were reported as mortgage loans on our consolidated statements of financial position with a carrying value of $29.0 million as of December 31, 2024.

The non-recourse mortgages and notes payable are primarily financings for a real estate development. As of both December 31, 2025 and 2024, the notes had an interest rate of 4.0%. 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 $9.6 million and $14.3 million as of December 31, 2025 and 2024, respectively.

As of December 31, 2025, future annual maturities of long-term debt were as follows (in millions):

---

| | |
|:---|:---|
| Year ending December 31: |  |
| &nbsp;&nbsp;&nbsp;2026 | $**0.1** |
| &nbsp;&nbsp;&nbsp;2027 | **0.1** |
| &nbsp;&nbsp;&nbsp;2028 | **2.7** |
| &nbsp;&nbsp;&nbsp;2029 | **—** |
| &nbsp;&nbsp;&nbsp;2030 | **—** |
| &nbsp;&nbsp;&nbsp;Thereafter | **—** |
| &nbsp;&nbsp;&nbsp;Total future maturities of long-term debt | $**2.9** |

---

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

**15. Income Taxes**

**Income Taxes (Benefits)**

Our income taxes (benefits) were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| Current income taxes (benefits): |  |  |  |
| &nbsp;&nbsp;&nbsp;U.S. federal | $**172.6** | $178.2 | $45.8 |
| &nbsp;&nbsp;&nbsp;State | **24.2** | 24.9 | 19.1 |
| &nbsp;&nbsp;&nbsp;Foreign | **0.2** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current income taxes | **197.0** | 203.1 | 64.9 |
| Deferred income taxes (benefits): |  |  |  |
| &nbsp;&nbsp;&nbsp;U.S. federal | **(165.0)** | 16.4 | (141.0) |
| &nbsp;&nbsp;&nbsp;State | **(0.3)** | 4.8 | (11.3) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total deferred income taxes (benefits) | **(165.3)** | 21.2 | (152.3) |
| Total income taxes (benefits) |  |  |  |
| &nbsp;&nbsp;&nbsp;U.S. federal | **7.6** | 194.6 | (95.2) |
| &nbsp;&nbsp;&nbsp;State | **23.9** | 29.7 | 7.8 |
| &nbsp;&nbsp;&nbsp;Foreign | **0.2** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income taxes (benefits) | $**31.7** | $224.3 | $(87.4) |

---

Our income before income taxes was as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| Domestic | $**798.5** | $1593.2 | $149.2 |
| &nbsp;&nbsp;&nbsp;Total income before income taxes | $**798.5** | $1593.2 | $149.2 |

---

**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. federal statutory tax rate and the effective income tax rate was as follows:

---

| | | |
|:---|:---|:---|
|  | **For the year ended** | **For the year ended** |
|  | **December 31, 2025** | **December 31, 2025** |
|  | **Amount** | **Percent** |
|  | *(in millions)* | |
| U.S. federal statutory tax rate | $**167.7** | **21%** |
| State and local income taxes, net of federal income tax effect (1) | **18.9** | **2** |
| Foreign tax effects | **0.2** | **—** |
| Tax credits: |  |  |
| &nbsp;&nbsp;&nbsp;Foreign tax credits | **(30.2)** | **(4)** |
| &nbsp;&nbsp;&nbsp;Low income housing tax credits | **(10.5)** | **(1)** |
| &nbsp;&nbsp;&nbsp;Other | **(2.4)** | **—** |
| Nontaxable or nondeductible items: |  |  |
| &nbsp;&nbsp;&nbsp;Dividends received deduction | **(76.6)** | **(9)** |
| &nbsp;&nbsp;&nbsp;Interest exclusion from taxable income | **(25.0)** | **(3)** |
| &nbsp;&nbsp;&nbsp;Other | **(5.0)** | **(1)** |
| Changes in unrecognized tax benefits | **(5.4)** | **(1)** |
| Effective income tax rate | $**31.7** | **4%** |

---

(1) State taxes in Iowa, Delaware and Illinois made up the majority (greater than 50 percent) of the tax effect in this category.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

---

| | | |
|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2024** | **2023** |
| U.S. federal statutory tax rate | 21% | 21% |
| Dividends received deduction | (5) | (47) |
| Tax credits | (4) | (40) |
| Interest exclusion from taxable income | (2) | (15) |
| Impact of noncontrolling interest presentation |  | (3) |
| Employee compensation |  | (2) |
| Other postretirement employee benefits redesignation |  | (2) |
| Low income housing tax credit amortization | 3 | 24 |
| State income taxes | 2 | 4 |
| Nondeductible expenses |  | 2 |
| Other | (1) | (1) |
| Effective income tax rate | 14% | (59)% |

---

**Income Taxes Paid**

Our income taxes paid, net of refunds received, were as follows:

---

| | |
|:---|:---|
|  | **For the year ended**<br>**December 31, 2025** |
|  | *(in millions)* |
| U.S. federal | $**151.5** |
| U.S. state and local: |  |
| &nbsp;&nbsp;&nbsp;Iowa | **8.9** |
| &nbsp;&nbsp;&nbsp;Other | **13.2** |
| Foreign | **0.3** |
| Total income taxes paid, net of refunds received | $**173.9** |

---

**Unrecognized Tax Benefits**

Our changes in unrecognized tax benefits were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| Balance at beginning of period | $**34.8** | $37.7 | $40.6 |
| &nbsp;&nbsp;&nbsp;Additions based on tax positions related to the current year | **—** | 0.3 | 0.3 |
| &nbsp;&nbsp;&nbsp;Reductions for tax positions related to the current year | **(3.2)** | (3.2) | (3.2) |
| &nbsp;&nbsp;&nbsp;Settlements | **(14.4)** |  |  |
| Balance at end of period (1) | $**17.2** | $34.8 | $37.7 |

---

(1) Our 2025 effective income tax rate would not be impacted
if unrecognized tax benefits were recognized. We recognize interest and penalties related to uncertain tax positions in operating
expenses within the consolidated statements of operations.

As of December 31, 2025 and 2024, we had recognized $(0.1) million and $1.9 million of accumulated pre-tax interest and penalties expense (recovery) related to unrecognized tax benefits, respectively.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

**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. Our significant components of net deferred income taxes were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
|  | *(in millions)* | *(in millions)* |
| Deferred income tax assets: |  |  |
| &nbsp;&nbsp;&nbsp;Net unrealized losses on available-for-sale securities | $**887.4** | $1273.1 |
| &nbsp;&nbsp;&nbsp;Net operating and capital loss carryforwards | **6.4** | 21.3 |
| &nbsp;&nbsp;&nbsp;Employee benefits | **46.1** | 54.1 |
| &nbsp;&nbsp;&nbsp;Intangible assets | **83.1** | 71.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross deferred income tax assets | **1023.0** | 1419.9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Valuation allowance | **(11.9)** | (11.9) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total deferred income tax assets | **1011.1** | 1408.0 |
| Deferred income tax liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Deferred acquisition costs | **(604.8)** | (611.6) |
| &nbsp;&nbsp;&nbsp;Investments, including derivatives | **(223.5)** | (247.1) |
| &nbsp;&nbsp;&nbsp;Funds withheld embedded derivative | **(510.9)** | (610.3) |
| &nbsp;&nbsp;&nbsp;Real estate | **(128.6)** | (124.6) |
| &nbsp;&nbsp;&nbsp;Insurance liabilities | **(994.0)** | (1241.2) |
| &nbsp;&nbsp;&nbsp;Gain on sale of discontinued operations (1) | **(159.2)** | (166.8) |
| &nbsp;&nbsp;&nbsp;Other deferred income tax liabilities | **(83.6)** | (19.6) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total deferred income tax liabilities | **(2704.6)** | (3021.2) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total net deferred income tax liabilities | $**(1693.5)** | $(1613.2) |

---

(1) Represents a deferred intercompany gain on the sale of
PGI LLC to PFS, which was allocated to stockholder's equity as the result of a taxable common control transaction on the
standalone financials of the transferring entity.

Our net deferred income taxes by jurisdiction were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
|  | *(in millions)* | *(in millions)* |
| Deferred income tax assets: |  |  |
| &nbsp;&nbsp;&nbsp;State | $**2.2** | $9.2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net deferred income tax assets | **2.2** | 9.2 |
| Deferred income tax liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;U.S. federal | **(1695.7)** | (1622.4) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net deferred income tax liabilities | **(1695.7)** | (1622.4) |
| Total net deferred income tax liabilities | $**(1693.5)** | $(1613.2) |

---

In management's judgment, total deferred income tax assets are more likely than not to be realized.

As of December 31, 2025 and 2024, state net operating loss carryforwards were $66.2 million and $67.1 million, respectively, and will expire between 2032 and 2042. As of December 31, 2025, 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. As of both December 31, 2025 and 2024, valuation allowances of $11.9 million had been recorded against the income tax benefits associated primarily with net unrealized capital losses on benefit plan trusts.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

**Effects of Tax Legislation**

On July 4, 2025, the United States enacted Public Law 119-21. The accounting consequences of a change in tax law are required to be recognized in the period legislation is enacted. Generally, a company is also required to consider the impact of new tax law on realizability of deferred tax assets ("DTAs"), including determination of whether a change in valuation allowance is necessary. We evaluated the provisions of Public Law 119-21 and incorporated the effects into our 2025 financial statements, which were not material. We will continue to monitor developments related to the legislation and assess any future impacts as additional guidance becomes available.

We are currently monitoring the Pillar Two model rules proposed by the Organisation for Economic Co-operation and Development, including the Side-by-Side safe harbor agreement released in January 2026. The rules require a 15% global minimum tax but are expected to exempt U.S. multinationals from other countries' top-up taxes once enacted. Generally, a company is required to consider the impact of new tax law on realizability of its DTAs, including determination of whether a change to its valuation allowance amounts is necessary. We made an accounting policy election to disregard the Pillar Two model rules when evaluating DTAs and rather recognize a current period tax expense when incurred.

**Other Tax Information**

Income tax returns are filed in the U.S. federal jurisdiction as well as various states where we and one or more of our subsidiaries conduct business. Although determined by jurisdiction, with few exceptions our tax uncertainties relate primarily to U.S. federal income tax matters. The Internal Revenue Service ("IRS") has completed examination of our consolidated U.S. federal income tax returns for years prior to 2015.

The U.S. federal statute of limitations has expired for years prior to 2015. The IRS is currently auditing our U.S. federal income tax returns for tax years 2015-2018 and 2019-2022. The statutes remain open through normal statute extensions. We do not expect the results of these audits, subsequent related adjustments 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.

We believe we have adequate defenses against, or sufficient provisions for, contested issues, but final resolution could take several years depending on whether legal remedies are pursued. Consequently, we do not believe issues that might arise in tax years subsequent to 2014 will have a material impact on our net income.

**16. Employee and Agent Benefits**

PFG provides a U.S. qualified defined benefit pension plan, covering U.S. employees that meet certain eligibility requirements and certain agents contracted on or before December 31, 2018. A final average pay benefit formula has been in place for plan participants employed prior to January 1, 2002. For agents, this formula ended on December 31, 2018, and for employees the formula ended on December 31, 2022. 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 prior to the earliest of termination, retirement or the formula end date. A cash balance benefit was added on January 1, 2002. A participant's cash balance account is credited with an amount based on the participant's salary, age and service. These credits accrue with interest. For plan participants hired on and after January 1, 2002, only the cash balance benefit applies. For pre-2002 participants, the pension benefit earned prior to the final average pay formula end date is the greater of the final average pay benefit or the cash balance benefit earned before the end date. They will also earn a new cash balance benefit for service after the formula end date. We reflect pension expense through our expense allocation agreement with PFG.

In addition, PFG sponsors non-qualified defined benefit plans subject to Section 409A of the Internal Revenue Code. This plan is for certain highly compensated employees and agents to replace the benefit that cannot be provided by the qualified defined benefit pension plan due to IRS limits. These nonqualified plans generally parallel the qualified plan but offer different payment options. No agent has been able to become a new participant in the nonqualified plan after 2018.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

We provide certain health care, life insurance and long-term care benefits for retired employees, their beneficiaries and covered dependents ("other postretirement benefits"). While virtually all U.S. employees continue to have access to the postretirement health care and life insurance benefits, only those U.S. employees that were hired prior to January 1, 2002, and retired prior to January 1, 2011, (post-65 medical) or January 1, 2020, (life insurance and pre-65 medical) were eligible to receive subsidized benefits. All others pay the full cost of coverage. The long-term care plan was subsidized only for those who retired prior to January 1, 2000, and is no longer accessible. The subsidy level for all benefits varies by plan, age, service and retirement date. Our policy is to fund the cost of providing retiree benefits in the years the employees are providing service, taking into account the funded status of the trust. PFG is the sponsor of the post-65 retiree medical plan for both employees and individual field agents.

**Obligations and Funded Status**

The combined funded status, reconciled to amounts recognized in the consolidated statements of financial position relating to the other postretirement employee benefits plans, was as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
|  | *(in millions)* | *(in millions)* |
| **Change in benefit obligation** |  |  |
| Benefit obligation at beginning of year | $**(51.8)** | $(56.9) |
| Interest cost | **(2.6)** | (2.6) |
| Actuarial gain (loss) | **(1.4)** | 1.5 |
| Participant contributions | **(6.3)** | (6.1) |
| Benefits paid | **11.9** | 12.3 |
| Benefit obligation at end of year | $**(50.2)** | $(51.8) |
| **Change in plan assets** |  |  |
| Fair value of plan assets at beginning of year | $**75.4** | $74.0 |
| Actual return on plan assets | **9.2** | 6.4 |
| Employer contribution | **1.4** | 1.2 |
| Participant contributions | **6.3** | 6.1 |
| Benefits paid | **(11.9)** | (12.3) |
| Fair value of plan assets at end of year | $**80.4** | $75.4 |
| **Amount recognized in statement of financial position** |  |  |
| Other assets | $**30.2** | $23.6 |
| Total | $**30.2** | $23.6 |
| **Amount recognized in accumulated other comprehensive income** |  |  |
| Total net actuarial gain | $**(27.3)** | $(24.1) |
| Pre-tax accumulated other comprehensive income | $**(27.3)** | $(24.1) |

---

**Other Postretirement Plan Changes and Plan Gains/Losses**

For the year ended December 31, 2025, the other postretirement benefit plans had an actuarial loss primarily due to a decrease in discount rates. For the year ended December 31, 2024, the other postretirement benefit plans had an actuarial gain primarily due to an increase in discount rates.

We did not have any other postretirement benefit plans with an accumulated postretirement benefit obligation in excess of plan assets.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
| **Components of Other Postretirement Benefits Net Periodic Benefit Cost** | **Components of Other Postretirement Benefits Net Periodic Benefit Cost** | **Components of Other Postretirement Benefits Net Periodic Benefit Cost** | **Components of Other Postretirement Benefits Net Periodic Benefit Cost** |
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| Interest cost | $**2.6** | $2.6 | $2.8 |
| Expected return on plan assets | **(3.4)** | (3.4) | (3.5) |
| Recognized net actuarial gain | **(1.2)** | (0.9) | (0.7) |
| Net periodic benefit income | $**(2.0)** | $(1.7) | $(1.4) |

---

We use the fair market value of assets to determine components of net periodic benefit cost.

The components of net periodic benefit cost including the service cost component are included in operating expenses on the consolidated statements of operations.

The other postretirement plans use a straight-line amortization over the average future lifetime of its remaining covered group of retirees.

For the other postretirement benefit plans, amounts recognized in pre-tax accumulated other comprehensive (income) loss were as follows:

---

| | | |
|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** |
|  | *(in millions)* | *(in millions)* |
| **Other changes recognized in accumulated other comprehensive income** |  |  |
| Net actuarial gain | $**(4.4)** | $(4.5) |
| Amortization of net gain | **1.2** | 0.9 |
| Total recognized in pre-tax accumulated other comprehensive income | $**(3.2)** | $(3.6) |
| **Total recognized in net periodic benefit cost and pre-tax accumulated other comprehensive income** | $**(5.2)** | $(5.3) |

---

Net actuarial (gain) loss and net prior service cost benefit have been recognized in AOCI.

**Assumptions**

***Weighted-average assumptions used for other postretirement benefit plans to determine benefit obligations as disclosed under the Obligations and Funded Status section***

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
| Discount rate | **5.15%** | 5.35% |

---

---

| | | | |
|:---|:---|:---|:---|
| ***Weighted average assumptions used for other postretirement benefit plans to determine net periodic benefit cost*** | ***Weighted average assumptions used for other postretirement benefit plans to determine net periodic benefit cost*** | ***Weighted average assumptions used for other postretirement benefit plans to determine net periodic benefit cost*** | ***Weighted average assumptions used for other postretirement benefit plans to determine net periodic benefit cost*** |
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
| Discount rate | **5.35%** | 4.80% | 5.05% |
| Expected long-term return on plan assets | **4.75%** | 4.70% | 5.20% |

---

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 4.7% expected long-term return on plan assets for 2025 was based on the weighted average expected long-term asset returns for the medical, life and long-term care plans.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

**Assumed Health Care Cost Trend Rates Used to Determine Net Periodic Benefit Cost**

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
| Health care cost trend rate assumed for next year under age 65 | **8.50%** | 7.50% |
| Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) | **4.50%** | 4.50% |
| Year that the rate reaches the ultimate trend rate (under age 65) | **2034** | 2033 |

---

**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.

● 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.

● Level 3 – Fair values are based on significant unobservable inputs for the asset.

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 the other postretirement benefit plans' assets by asset category as of the most recent measurement date was as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  | | **Fair value hierarchy level** | **Fair value hierarchy level** | **Fair value hierarchy level** |
|  | **Assets**<br>**measured at**<br>**fair value** |<br>**Level 1** |<br>**Level 2** |<br>**Level 3** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| **Asset category** |  |  |  |  |
| Cash and cash equivalents | $**0.7** | $**0.7** | $**—** | $**—** |
| Fixed income security portfolios (1) | **37.4** | **37.4** | **—** | **—** |
| U.S. equity portfolios (2) | **29.6** | **29.6** | **—** | **—** |
| International equity portfolios (3) | **12.7** | **12.7** | **—** | **—** |
| **Total** | $**80.4** | $**80.4** | $**—** | $**—** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | | **Fair value hierarchy level** | **Fair value hierarchy level** | **Fair value hierarchy level** |
|  | **Assets**<br>**measured at**<br>**fair value** |<br>**Level 1** |<br>**Level 2** |<br>**Level 3** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| **Asset category** |  |  |  |  |
| Cash and cash equivalents | $0.8 | $0.8 | $— | $— |
| Fixed income security portfolios (1) | 35.5 | 35.5 |  |  |
| U.S. equity portfolios (2) | 28.9 | 28.9 |  |  |
| International equity portfolios (3) | 10.2 | 10.2 |  |  |
| **Total** | $75.4 | $75.4 | $— | $— |

---

(1) The portfolios invest in various fixed income securities, primarily of U.S. origin. These include, but are not limited to,
corporate bonds, residential mortgage-backed securities, commercial mortgage-backed securities, U.S. Treasury securities, agency
securities, asset-backed securities and collateralized mortgage obligations.

(2) The portfolios invest primarily in publicly traded equity securities of large U.S. companies.

(3) The portfolios invest primarily in publicly traded equity securities of non-U.S. companies.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

We have established an investment policy that provides the investment objectives and guidelines for the other postretirement benefit plans. Our investment strategy is to achieve the following:

● Obtain a reasonable long-term return consistent with the level of risk assumed and at a cost of operation within prudent levels. Performance benchmarks are monitored.

● Ensure sufficient liquidity to meet the emerging benefit liabilities for the plans.

● Provide for diversification of assets in an effort to avoid the risk of large losses and maximize the investment return to the other postretirement benefit plans consistent with market and economic risk.

In administering the other postretirement benefit plans' asset allocation strategies, we consider the projected liability stream of benefit payments, the relationship between current and projected assets of the plan and the projected actuarial liabilities streams, the historical performance of capital markets adjusted for the perception of future short- and long-term capital market performance and the perception of future economic conditions.

According to our investment policy, the target asset allocation for the other postretirement benefit plans is:

---

| | |
|:---|:---|
| **Asset category** | **Target allocation** |
| Fixed income security portfolios | **50%** |
| U.S. equity portfolios | **35%** |
| International equity portfolios | **15%** |

---

**Estimated Future Benefit Payments**

The estimated future benefit payments, which reflect expected future service are:

---

| | |
|:---|:---|
|  | **Other postretirement<br> benefits (gross benefit<br> payments, including<br> prescription drug benefits)** |
|  | *(in millions)* |
| Year ending December 31: |  |
| 2026 | $**10.4** |
| 2027 | **9.4** |
| 2028 | **8.5** |
| 2029 | **8.0** |
| 2030 | **7.3** |
| 2031-2035 | **30.7** |

---

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, 2025.

**17. Contingencies, Guarantees, Indemnifications and Leases**

**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.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

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 SEC, 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 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.

While the outcome of any pending or future litigation or regulatory matter cannot be predicted, management does not believe any such matter will have a material adverse effect on our business or financial position. 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 as of December 31, 2025.

**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 plans and the nonqualified deferred compensation plans. We also provided guarantees 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, 2025, was approximately $112.0 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 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, financing and reinsurance 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, 2025 and 2024, the liability balance for guaranty fund assessments, which is not discounted, was $17.9 million and $28.3 million, respectively, and was reported within other liabilities in the consolidated statements of financial position. As of December 31, 2025 and 2024, $13.6 million and $16.6 million, respectively, related to premium tax offsets were included in premiums due and other receivables in the consolidated statements of financial position.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

**Leases**

As a lessee, we lease office space, data processing equipment, office furniture and office equipment under various operating leases. We also lease buildings and hardware storage equipment under finance leases. Lease assets and liabilities are recognized at the commencement of a lease based on the present value of lease payments over the lease term. We generally use our incremental borrowing rate based on the information available at the lease commencement date to determine the present value of lease payments. Lease term may include options to extend or terminate the lease when it is reasonably certain we will exercise the option. Leases with an initial term of twelve months or less are not recorded on the consolidated statements of financial position. We recognize lease expense for leases on a straight-line basis over the lease term. Some of our lease agreements include payments for property taxes, insurance, utilities or common area maintenance, which are not based on an index or rate. These payments are recognized in net income in the period in which the obligation has occurred. 

We sublease certain office space to third parties, which are primarily operating leases. We record sublease income on a straight-line basis over the lease term.

The lease assets and liabilities were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
|  | *(in millions)* | *(in millions)* |
| **Assets** |  |  |
| Operating lease assets (1) | $**84.3** | $95.4 |
| Finance lease assets (1) | **41.0** | 67.6 |
| Total lease assets | $**125.3** | $163.0 |
| **Liabilities** |  |  |
| Operating lease liabilities (2) | $**78.0** | $88.1 |
| Finance lease liabilities (2) | **42.6** | 69.0 |
| Total lease liabilities | $**120.6** | $157.1 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Operating and finance lease assets are primarily reported
within property and equipment on the consolidated statements of financial position.

&nbsp;&nbsp;&nbsp;&nbsp;(2) Operating and finance lease liabilities are reported within
other liabilities on the consolidated statements of financial position.

The lease cost was as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| Finance lease cost (1): |  |  |  |
| &nbsp;&nbsp;&nbsp;Amortization of right-of-use assets | $**27.3** | $29.8 | $32.9 |
| &nbsp;&nbsp;&nbsp;Interest on lease liabilities | **2.2** | 2.6 | 1.9 |
| Operating lease cost (1) | **26.9** | 29.6 | 28.9 |
| Other lease cost (1) (2) | **6.4** | 6.7 | 6.6 |
| Sublease income (3) | **(1.2)** | (0.5) | (0.3) |
| Total lease cost | $**61.6** | $68.2 | $70.0 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Finance, operating and other lease costs are primarily
included in operating expenses on the consolidated statements of operations.

&nbsp;&nbsp;&nbsp;&nbsp;(2) Other lease cost primarily reflects variable and short-term
lease costs.

&nbsp;&nbsp;&nbsp;&nbsp;(3) Sublease income is included in fees and other revenues
on the consolidated statements of operations.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

Payments for operating leases for the years ended December 31, 2025, 2024 and 2023, were $25.9 million, $27.4 million and $32.4 million, respectively. Payments for finance leases for the years ended December 31, 2025, 2024 and 2023, were $29.3 million, $32.0 million and $34.3 million, respectively. The following represents future payments due by period for lease obligations:

---

| | | | |
|:---|:---|:---|:---|
|  | **Operating leases** | **Finance leases** | **Total** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| For the twelve months ending December 31: |  |  |  |
| 2026 | $**21.9** | $**24.7** | $**46.6** |
| 2027 | **19.5** | **15.0** | **34.5** |
| 2028 | **15.0** | **4.4** | **19.4** |
| 2029 | **9.4** | **0.2** | **9.6** |
| 2030 | **6.7** | **—** | **6.7** |
| 2031 and thereafter | **16.5** | **—** | **16.5** |
| &nbsp;&nbsp;&nbsp;Total lease payments | **89.0** | **44.3** | **133.3** |
| &nbsp;&nbsp;&nbsp;Less: interest | **11.0** | **1.7** | **12.7** |
| &nbsp;&nbsp;&nbsp;Present value of lease liabilities | $**78.0** | $**42.6** | $**120.6** |

---

The weighted-average remaining lease term and weighted-average discount rates were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
| Weighted-average remaining lease term (in years): |  |  |  |
| &nbsp;&nbsp;&nbsp;Operating leases | **6.9** | 7.0 | 7.3 |
| &nbsp;&nbsp;&nbsp;Finance leases | **2.0** | 2.8 | 3.0 |
| Weighted-average discount rate: |  |  |  |
| &nbsp;&nbsp;&nbsp;Operating leases | **3.4%** | 3.1% | 2.9% |
| &nbsp;&nbsp;&nbsp;Finance leases | **4.1%** | 4.0% | 3.5% |

---

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

**18. Stockholder's Equity**

---

| | | | |
|:---|:---|:---|:---|
| **Other Comprehensive Income** | | | |
|  | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** |
|  | **Pre-Tax** | **Tax** | **After-Tax** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| Net unrealized gains on available-for-sale securities during the period | $**1671.1** | $**(356.5)** | $**1314.6** |
| Reclassification adjustment for losses included in net income (1) | **145.0** | **(30.5)** | **114.5** |
| Adjustments for assumed changes in amortization patterns | **(1.0)** | **0.2** | **(0.8)** |
| Adjustments for assumed changes in policyholder liabilities | **9.0** | **(1.9)** | **7.1** |
| Net unrealized gains on available-for-sale securities | **1824.1** | **(388.7)** | **1435.4** |
| Net unrealized losses on derivative instruments during the period | **(100.5)** | **21.1** | **(79.4)** |
| Reclassification adjustment for gains included in net income (2) | **(5.6)** | **1.1** | **(4.5)** |
| Adjustments for assumed changes in amortization patterns | **0.1** | **—** | **0.1** |
| Net unrealized losses on derivative instruments | **(106.0)** | **22.2** | **(83.8)** |
| Liability for future policy benefits discount rate remeasurement loss (3) | **(580.1)** | **121.7** | **(458.4)** |
| Market risk benefit nonperformance risk remeasurement gain (4) | **2.0** | **(0.4)** | **1.6** |
| Unrecognized postretirement benefit obligation during the period | **4.4** | **(0.9)** | **3.5** |
| Amortization of amounts included in net periodic benefit cost (5) | **(1.2)** | **0.2** | **(1.0)** |
| Net unrecognized postretirement benefit obligation | **3.2** | **(0.7)** | **2.5** |
| Other comprehensive income | $**1143.2** | $**(245.9)** | $**897.3** |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** |
|  | **Pre-Tax** | **Tax** | **After-Tax** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| Net unrealized losses on available-for-sale securities during the period | $(996.6) | $205.4 | $(791.2) |
| Reclassification adjustment for losses included in net income (1) | 121.4 | (25.6) | 95.8 |
| Adjustments for assumed changes in amortization patterns | 9.8 | (2.1) | 7.7 |
| Adjustments for assumed changes in policyholder liabilities | 10.8 | (2.3) | 8.5 |
| Net unrealized losses on available-for-sale securities | (854.6) | 175.4 | (679.2) |
| Net unrealized gains on derivative instruments during the period | 71.2 | (15.0) | 56.2 |
| Reclassification adjustment for gains included in net income (2) | (3.5) | 0.8 | (2.7) |
| Adjustments for assumed changes in amortization patterns | 0.5 | (0.1) | 0.4 |
| Net unrealized gains on derivative instruments | 68.2 | (14.3) | 53.9 |
| Liability for future policy benefits discount rate remeasurement gain (3) | 1099.6 | (231.0) | 868.6 |
| Market risk benefit nonperformance risk remeasurement loss (4) | (11.3) | 2.4 | (8.9) |
| Unrecognized postretirement benefit obligation during the period | 4.5 | (0.9) | 3.6 |
| Amortization of amounts included in net periodic benefit cost (5) | (0.9) | 0.2 | (0.7) |
| Net unrecognized postretirement benefit obligation | 3.6 | (0.7) | 2.9 |
| Other comprehensive income | $305.5 | $(68.2) | $237.3 |

---

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** |
|  | **Pre-Tax** | **Tax** | **After-Tax** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| Net unrealized gains on available-for-sale securities during the period | $2069.1 | $(438.8) | $1630.3 |
| Reclassification adjustment for losses included in net income (1) | 355.1 | (74.8) | 280.3 |
| Adjustments for assumed changes in amortization patterns | (2.5) | 0.6 | (1.9) |
| Adjustments for assumed changes in policyholder liabilities | 0.7 | (0.1) | 0.6 |
| Net unrealized gains on available-for-sale securities | 2422.4 | (513.1) | 1909.3 |
| Net unrealized losses on derivative instruments during the period | (44.9) | 9.4 | (35.5) |
| Reclassification adjustment for gains included in net income (2) | (7.4) | 1.6 | (5.8) |
| Adjustments for assumed changes in amortization patterns | (0.9) | 0.2 | (0.7) |
| Adjustments for assumed changes in policyholder liabilities | 0.2 |  | 0.2 |
| Net unrealized losses on derivative instruments | (53.0) | 11.2 | (41.8) |
| Liability for future policy benefits discount rate remeasurement loss (3) | (496.5) | 104.3 | (392.2) |
| Market risk benefit nonperformance risk remeasurement loss (4) | (39.4) | 8.3 | (31.1) |
| Unrecognized postretirement benefit obligation during the period | 3.0 | (0.7) | 2.3 |
| Amortization of amounts included in net periodic benefit cost (5) | (0.7) | 0.2 | (0.5) |
| Net unrecognized postretirement benefit obligation | 2.3 | (0.5) | 1.8 |
| Other comprehensive income | $1835.8 | $(389.8) | $1446.0 |

---

(1) Pre-tax reclassification adjustments relating to available-for-sale securities are reported in net realized capital gains (losses)
and net realized capital gains (losses) on funds withheld assets on the consolidated statements of operations.

&nbsp;&nbsp;&nbsp;&nbsp;(2) See Note 6, Derivative Financial Instruments, under the
caption "Effect of Fair Value and Cash Flow Hedges on Consolidated Statements of Operations" for further details.

&nbsp;&nbsp;&nbsp;&nbsp;(3) Includes the discount rate remeasurement gain (loss) associated
with the LFPB and the associated reinsurance recoverable. See Note 11, Future Policy Benefits and Claims, under the caption "Liability
for Future Policy Benefits" for further details.

&nbsp;&nbsp;&nbsp;&nbsp;(4) See Note 12, Market Risk Benefits, for further details.

&nbsp;&nbsp;&nbsp;&nbsp;(5) Amount is comprised of amortization of prior service cost
(benefit) and recognized net actuarial (gain) loss, which is reported in operating expenses on the consolidated statements of
operations. See Note 16, Employee and Agent Benefits, under the caption "Components of Net Periodic Benefit Cost"
for further details.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Accumulated Other Comprehensive Loss** | **Accumulated Other Comprehensive Loss** | **Accumulated Other Comprehensive Loss** | **Accumulated Other Comprehensive Loss** | **Accumulated Other Comprehensive Loss** | **Accumulated Other Comprehensive Loss** | **Accumulated Other Comprehensive Loss** |
|  | **Net unrealized losses on available-for-sale securities (1)** | **Net unrealized gains (losses) on derivative instruments** | **LFPB discount rate remeasurement gain** | **MRB nonperformance risk gain (loss)** | **Unrecognized postretirement benefit obligation** | **Accumulated other comprehensive loss** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| **Balances as of January 1, 2023** | $(5938.8) | $40.0 | $1284.7 | $25.0 | $14.4 | $(4574.7) |
| Other comprehensive income during the period, net of adjustments | 1629.0 | (36.0) | (392.2) | (31.1) | 2.3 | 1172.0 |
| Amounts reclassified from AOCI | 280.3 | (5.8) |  |  | (0.5) | 274.0 |
| Other comprehensive income | 1909.3 | (41.8) | (392.2) | (31.1) | 1.8 | 1446.0 |
| **Balances as of December 31, 2023** | (4029.5) | (1.8) | 892.5 | (6.1) | 16.2 | (3128.7) |
| Other comprehensive income during the period, net of adjustments | (775.0) | 56.6 | 868.6 | (8.9) | 3.6 | 144.9 |
| Amounts reclassified from AOCI | 95.8 | (2.7) |  |  | (0.7) | 92.4 |
| Other comprehensive income | (679.2) | 53.9 | 868.6 | (8.9) | 2.9 | 237.3 |
| **Balances as of December 31, 2024** | (4708.7) | 52.1 | 1761.1 | (15.0) | 19.1 | (2891.4) |
| Other comprehensive income during the period, net of adjustments | **1320.9** | **(79.3)** | **(458.4)** | **1.6** | **3.5** | **788.3** |
| Amounts reclassified from AOCI | **114.5** | **(4.5)** | **—** | **—** | **(1.0)** | **109.0** |
| Other comprehensive income | **1435.4** | **(83.8)** | **(458.4)** | **1.6** | **2.5** | **897.3** |
| **Balances as of December 31, 2025** | $**(3273.3)** | $**(31.7)** | $**1302.7** | $**(13.4)** | $**21.6** | $**(1994.1)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Net unrealized losses on available-for-sale securities
for which an allowance for credit loss has been recorded were $6.3 million, $1.4 million and $1.5 million as of December 31, 2025,
2024 and 2023, respectively.

**Noncontrolling Interest**

Interests held by unaffiliated parties in consolidated entities were reflected in noncontrolling interest, which represented the noncontrolling partners' share of the underlying net assets of our consolidated subsidiaries. Noncontrolling interest that was not redeemable was reported in the equity section of the consolidated statements of financial position.

The noncontrolling interest holder in one of our consolidated VIEs maintained an equity interest that was redeemable at the option of the holder, which was exercised in 2025. Since redemption of the noncontrolling interest was outside of our control, this interest was presented on the consolidated statements of financial position line item titled "Redeemable noncontrolling interest".

Following is a reconciliation of the changes in the redeemable noncontrolling interest (in millions):

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| Beginning balance | $**5.0** | $— | $— |
| Net income attributable to redeemable noncontrolling interest | **0.2** | 0.4 |  |
| Redeemable noncontrolling interest of deconsolidated entities (1) | **(12.5)** |  |  |
| Contributions from redeemable noncontrolling interest | **7.5** | 5.0 |  |
| Distributions to redeemable noncontrolling interest | **(0.2)** | (0.4) |  |
| Ending balance | $**—** | $5.0 | $— |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) We deconsolidated a sponsored investment fund as it no longer met the requirements for consolidation.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

**Dividend Limitations**

Under Iowa law, we may pay dividends or make other distributions only from the earned surplus arising from our business and must receive the prior approval of the Commissioner of Insurance of the State of Iowa ("the Commissioner") to pay stockholder dividends or make any other distribution if such distribution would exceed certain statutory limitations. Iowa law gives the Commissioner discretion to disapprove requests for distributions in excess of these limitations. Extraordinary dividends include those made, together with dividends and other distributions, within the preceding twelve months that exceed the greater of (i) 10% of our statutory policyholder surplus as of the previous year-end excluding admitted disallowed interest maintenance reserve or (ii) the statutory net gain from operations from the previous calendar year, not to exceed earned surplus. Based on this limitation and 2025 statutory results, we could pay approximately $1,234.0 million in ordinary stockholder dividends in 2026 without prior regulatory approval. However, because the dividend test is based on dividends previously paid over rolling twelve-month periods, if paid before a specified date during 2026, some or all of such dividends may be extraordinary and require regulatory approval.

**19. 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.

**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.

● **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 at least one significant unobservable input for the asset or liability.

**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. The techniques utilized in estimating the fair value 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. We did not make any significant changes to our valuation processes during 2025.

***Fixed Maturities***

Fixed maturities include bonds, ABS, redeemable preferred stock and certain non-redeemable 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.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

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 when 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 for 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 also be impacted by company specific factors.

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. These are reflected in Level 3 in the fair value hierarchy and can include fixed maturities across all asset classes. As of December 31, 2025, approximately 3% of our total fixed maturities were Level 3 securities valued using internal pricing models.

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 non-redeemable 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.

***Mortgage Loans***

Mortgage loans reported at fair value included those of a consolidated VIE for which the fair value option was elected. Fair values of commercial mortgage loans were primarily determined by discounting the expected cash flows at current treasury rates plus an applicable risk spread, which reflected credit quality and maturity of the loans. The risk spread was based on market clearing levels for loans with comparable credit quality, maturities and risk. These are reflected in Level 3. Mortgage loans valued using securitized pricing based on observable market data should be reflected in Level 2 of the fair value hierarchy. The consolidated VIE was deconsolidated during 2025.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

***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, which reduces their fair value in the consolidated statements of financial position. The fair values of OTC cleared derivatives are determined through market prices published by the clearinghouses, which are reflected in Level 2. The clearinghouses utilize the secured overnight financing rate ("SOFR") curve in their valuation. Variation margin associated with OTC cleared derivatives is settled daily, which reduces their fair value in the consolidated statements of financial position. 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 SOFR curve to value our positions. Counterparty credit risk is routinely monitored to ensure our adjustment for nonperformance risk is appropriate. Our centrally cleared derivative contracts are conducted with regulated centralized clearinghouses, which provide for daily exchange of cash collateral or variation margin equal to the difference in the daily market values of those contracts that eliminates the nonperformance risk on these trades.

***Interest Rate Contracts.*** For non-cleared contracts, which include interest rate swaps and interest rate options, we use discounted cash flow valuation techniques to determine the fair value using observable swap curves as the inputs. These are reflected in Level 2. We have forward contracts for which we obtain prices from third party pricing vendors. 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 forward contracts 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. Currency forwards are valued using observable market inputs, including forward currency exchange rates. These are reflected in Level 2. In addition, we had a limited number of non-standard currency swaps that were valued using broker quotes. These were 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. Certain total return swaps use an accrual method comparing both cash flows to determine fair value. These are reflected in Level 2. Certain equity option contracts are valued using broker quotes. These are reflected in Level 3.

***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 to determine the fair value of credit default swaps. These are reflected in Level 2. In addition, we have total return swaps and a limited number of credit default swaps that are valued using broker quotes. These are reflected within Level 3.

***Other Investments***

Other investments reported at fair value include invested assets of consolidated sponsored investment funds, unconsolidated sponsored investment funds, other investment funds reported at fair value, other loans of a consolidated VIE for which the fair value option was elected and certain redeemable and nonredeemable preferred stock.

The fair value of investment funds is determined using the NAV of the fund. The NAV of the fund represents the price at which we would be able to initiate a transaction. Investments for which the NAV represents a quoted price in an active market for identical assets are reflected in Level 1. Investments that do not have a quoted price in an active market are reflected in Level 2.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

Other loans of a consolidated VIE for which the fair value option was elected are reflected in Level 3. The fair value of these loans is estimated using a discounted cash flow valuation model that utilizes standard assumption-setting methodology accepted by market participants in the industry. The assumptions are formed based on historical performance of the loans and utilizes market data inputs such as charge-off rates, prepayment rates, recovery rates and discount rates.

***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 three months or less. 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, cash equivalents 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.

***Market Risk Benefits***

MRBs are measured at fair value at the contract level on a recurring basis and are reflected in Level 3 as either an asset or a liability, depending on certain inputs at the reporting date. The key assumptions for calculating the fair value are market assumptions and policyholder behavior. Risk margins are included in the policyholder behavior assumptions. The assumptions are based on a combination of historical data and actuarial judgment. The MRBs are valued using stochastic models that incorporate a spread reflecting our own nonperformance risk.

The assumption for our own nonperformance risk is based on current market credit spreads for debt-like instruments we have issued and are available in the market. Refer to Note 12, Market Risk Benefits, for further information on the determination of fair value measurement of MRBs.

***Investment and Universal Life Contracts***

Certain universal life, annuity and other investment contracts include embedded derivatives that have been bifurcated from the host contract and 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 and mortality). 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 models that incorporate a spread reflecting our own creditworthiness.

The assumption for our own nonperformance risk for investment contracts and any embedded derivatives bifurcated from certain universal life, annuity and investment contracts is based on the current market credit spreads for debt-like instruments we have issued and are available in the market.

***Funds Withheld Payable***

The funds withheld payable includes an embedded derivative that has been bifurcated from the host contract and is measured at fair value on a recurring basis, which is reflected in Level 3. The fair value is determined based on the change in the estimated fair value of the underlying funds withheld investments. The fair value of these assets is determined as previously described.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

***Long-Term Debt***

Long-term debt reported at fair value included that of a consolidated VIE for which the fair value option was elected. The long-term debt was a secured credit facility that was primarily financing for commercial real estate loans. The fair value was estimated using discounted cash flow analysis based on our incremental borrowing rate for similar borrowing arrangements. These were reflected in Level 2. The consolidated VIE was deconsolidated during 2025.

**Assets and Liabilities Measured at Fair Value on a Recurring Basis**

Assets and liabilities measured at fair value on a recurring basis were as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  | | | **Fair value hierarchy level** | **Fair value hierarchy level** | **Fair value hierarchy level** |
|  | **Assets/**<br>**(liabilities)**<br>**measured at**<br>**fair value** | **Amount**<br>**measured at**<br>**net asset**<br>**value (5)** |<br>**Level 1** |<br>**Level 2** |<br>**Level 3** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| **Assets** |  |  |  |  |  |
| Fixed maturities, available-for-sale: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;U.S. government and agencies | $**1718.4** | $**—** | $**1459.3** | $**259.1** | $**—** |
| &nbsp;&nbsp;&nbsp;Non-U.S. governments | **508.4** | **—** | **—** | **508.4** | **—** |
| &nbsp;&nbsp;&nbsp;States and political subdivisions | **7109.6** | **—** | **—** | **7042.8** | **66.8** |
| &nbsp;&nbsp;&nbsp;Corporate | **35029.5** | **—** | **27.8** | **32523.9** | **2477.8** |
| &nbsp;&nbsp;&nbsp;Residential mortgage-backed pass-through securities | **3472.4** | **—** | **—** | **3472.4** | **—** |
| &nbsp;&nbsp;&nbsp;Commercial mortgage-backed securities | **5363.5** | **—** | **—** | **5361.1** | **2.4** |
| &nbsp;&nbsp;&nbsp;Collateralized debt obligations (1) | **6420.6** | **—** | **—** | **6420.6** | **—** |
| &nbsp;&nbsp;&nbsp;Other debt obligations | **10669.9** | **—** | **—** | **8914.2** | **1755.7** |
| Total fixed maturities, available-for-sale | **70292.3** | **—** | **1487.1** | **64502.5** | **4302.7** |
| Fixed maturities, trading | **1020.5** | **—** | **—** | **720.9** | **299.6** |
| Equity securities | **548.9** | **—** | **520.6** | **28.3** | **—** |
| Derivative assets (2) | **1154.8** | **—** | **—** | **1130.1** | **24.7** |
| Other investments | **273.6** | **106.4** | **—** | **—** | **167.2** |
| Cash equivalents | **2550.8** | **—** | **59.5** | **2491.3** | **—** |
| Market risk benefit asset (3) | **197.1** | **—** | **—** | **—** | **197.1** |
| &nbsp;&nbsp;&nbsp;Sub-total excluding separate account assets | **76038.0** | **106.4** | **2067.2** | **68873.1** | **4991.3** |
| Separate account assets | **149968.5** | **7613.8** | **119669.5** | **21942.7** | **742.5** |
| **Total assets** | $**226006.5** | $**7720.2** | $**121736.7** | $**90815.8** | $**5733.8** |
| **Liabilities** |  |  |  |  |  |
| Investment and universal life contracts (4) | $**(1410.2)** | $**—** | $**—** | $**—** | $**(1410.2)** |
| Market risk benefit liability (3) | **(66.9)** | **—** | **—** | **—** | **(66.9)** |
| Funds withheld payable embedded derivative (4) | **2432.6** | **—** | **—** | **—** | **2432.6** |
| Derivative liabilities (2) | **(546.0)** | **—** | **—** | **(539.4)** | **(6.6)** |
| **Total liabilities** | $**409.5** | $**—** | $**—** | $**(539.4)** | $**948.9** |
| **Net assets** | $**226416.0** | $**7720.2** | $**121736.7** | $**90276.4** | $**6682.7** |

---

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | | | **Fair value hierarchy level** | **Fair value hierarchy level** | **Fair value hierarchy level** |
|  | **Assets/**<br>**(liabilities)**<br>**measured at**<br>**fair value** | **Amount**<br>**measured at**<br>**net asset**<br>**value (5)** |<br>**Level 1** |<br>**Level 2** |<br>**Level 3** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| **Assets** |  |  |  |  |  |
| Fixed maturities, available-for-sale: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;U.S. government and agencies | $1434.9 | $— | $1178.0 | $256.9 | $— |
| &nbsp;&nbsp;&nbsp;Non-U.S. governments | 482.0 |  |  | 482.0 |  |
| &nbsp;&nbsp;&nbsp;States and political subdivisions | 6038.9 |  |  | 5973.8 | 65.1 |
| &nbsp;&nbsp;&nbsp;Corporate | 33357.2 |  | 29.1 | 30977.7 | 2350.4 |
| &nbsp;&nbsp;&nbsp;Residential mortgage-backed pass-through securities | 3319.6 |  |  | 3319.6 |  |
| &nbsp;&nbsp;&nbsp;Commercial mortgage-backed securities | 5177.1 |  |  | 5174.4 | 2.7 |
| &nbsp;&nbsp;&nbsp;Collateralized debt obligations (1) | 6556.6 |  |  | 6556.6 |  |
| &nbsp;&nbsp;&nbsp;Other debt obligations | 8894.1 |  |  | 7415.8 | 1478.3 |
| Total fixed maturities, available-for-sale | 65260.4 |  | 1207.1 | 60156.8 | 3896.5 |
| Fixed maturities, trading | 890.7 |  |  | 459.4 | 431.3 |
| Equity securities | 804.6 |  | 773.9 | 30.7 |  |
| Mortgage loans | 140.6 |  |  |  | 140.6 |
| Derivative assets (2) | 629.7 |  |  | 608.3 | 21.4 |
| Other investments | 237.1 | 106.7 |  |  | 130.4 |
| Cash equivalents | 2421.9 |  | 199.9 | 2222.0 |  |
| Market risk benefit asset (3) | 199.5 |  |  |  | 199.5 |
| &nbsp;&nbsp;&nbsp;Sub-total excluding separate account assets | 70584.5 | 106.7 | 2180.9 | 63477.2 | 4819.7 |
| Separate account assets | 138860.2 | 7573.6 | 111650.4 | 18909.5 | 726.7 |
| **Total assets** | $209444.7 | $7680.3 | $113831.3 | $82386.7 | $5546.4 |
| **Liabilities** |  |  |  |  |  |
| Investment and universal life contracts (4) | $(578.2) | $— | $— | $— | $(578.2) |
| Market risk benefit liability (3) | (62.1) |  |  |  | (62.1) |
| Funds withheld payable embedded derivative (4) | 2906.0 |  |  |  | 2906.0 |
| Long-term debt | (21.8) |  |  | (21.8) |  |
| Derivative liabilities (2) | (471.4) |  |  | (463.7) | (7.7) |
| **Total liabilities** | $1772.5 | $— | $— | $(485.5) | $2258.0 |
| **Net assets** | $211217.2 | $7680.3 | $113831.3 | $81901.2 | $7804.4 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Primarily consists of collateralized loan obligations backed by secured corporate loans.

&nbsp;&nbsp;&nbsp;&nbsp;(2) Within the consolidated statements of financial position, derivative assets are reported with other investments and derivative
liabilities are reported with other liabilities. The amounts are presented gross in the tables above to reflect the presentation
on the consolidated statements of financial position; however, are presented net for purposes of the rollforward in the Changes
in Level 3 Fair Value Measurements tables. Refer to Note 6, Derivative Financial Instruments, for further information on fair value
by class of derivative instruments.

&nbsp;&nbsp;&nbsp;&nbsp;(3) Refer to Note 12, Market Risk Benefits, for further information on the change in the Level 3 fair value measurements of MRBs.

&nbsp;&nbsp;&nbsp;&nbsp;(4) Includes bifurcated embedded derivatives that are reported at net asset (liability) fair value within the same line item in
the consolidated statements of financial position in which the host contract is reported. The funds withheld payable embedded derivative
could be in either an asset or (liability) position.

&nbsp;&nbsp;&nbsp;&nbsp;(5) Certain investments are measured at fair value using the
NAV per share (or its equivalent) practical expedient and have not been classified in the fair value hierarchy. Other investments
using the NAV practical expedient consist of certain fund interests that are restricted until maturity with unfunded commitments
totaling $2.9 million and $3.1 million as of December 31, 2025 and 2024, respectively. Separate account assets using the NAV practical
expedient consist of certain funds with varying investment strategies that also have a variety of redemption terms and conditions.
We do not have unfunded commitments associated with these funds.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

**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) was as follows:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** |
|  | | **Total realized/unrealized** | **Total realized/unrealized** | | | | |
|  | | **gains (losses)** | **gains (losses)** | | | | |
|  | **Beginning**<br>**asset/**<br>**(liability)**<br>**balance**<br>**as of**<br>**January 1,**<br>**2025** |<br>**Included**<br>**in net**<br>**income (2)** | **Included in**<br>**other**<br>**comprehensive**<br>**income (3)** | **Net**<br>**purchases,**<br>**sales,**<br>**issuances**<br>**and**<br>**settlements**<br>**(4)** |<br><br>**Transfers**<br>**into**<br>**Level 3** |<br><br>**Transfers**<br>**out of**<br>**Level 3** | **Ending**<br>**asset/**<br>**(liability)**<br>**balance**<br>**as of**<br>**December 31,**<br>**2025** |
|  | ***(in millions)*** | ***(in millions)*** | ***(in millions)*** | ***(in millions)*** | ***(in millions)*** | ***(in millions)*** | ***(in millions)*** |
| **Assets** |  |  |  |  |  |  |  |
| Fixed maturities, available-for-sale: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;States and political subdivisions | $**65.1** | $**—** | $**3.5** | $**(1.8)** | $**—** | $**—** | $**66.8** |
| &nbsp;&nbsp;&nbsp;Corporate | **2350.4** | **(5.5)** | **(24.9)** | **157.8** | **—** | **—** | **2477.8** |
| &nbsp;&nbsp;&nbsp;Commercial mortgage-backed securities | **2.7** | **—** | **0.1** | **(0.4)** | **—** | **—** | **2.4** |
| &nbsp;&nbsp;&nbsp;Other debt obligations | **1478.3** | **0.1** | **17.3** | **256.5** | **122.5** | **(119.0)** | **1755.7** |
| Total fixed maturities, available-for-sale | **3896.5** | **(5.4)** | **(4.0)** | **412.1** | **122.5** | **(119.0)** | **4302.7** |
| Fixed maturities, trading | **431.3** | **(17.7)** | **—** | **(109.2)** | **—** | **(4.8)** | **299.6** |
| Mortgage loans | **140.6** | **—** | **—** | **(140.6)** | **—** | **—** | **—** |
| Other investments | **130.4** | **(6.1)** | **—** | **42.9** | **—** | **—** | **167.2** |
| Separate account assets (1) | **726.7** | **23.1** | **—** | **(7.3)** | **—** | **—** | **742.5** |
| **Liabilities** |  |  |  |  |  |  |  |
| Investment and universal life contracts | **(578.2)** | **(258.9)** | **—** | **(573.1)** | **—** | **—** | **(1410.2)** |
| Funds withheld payable embedded derivative | **2906.0** | **(473.4)** | **—** | **—** | **—** | **—** | **2432.6** |
| **Derivatives** |  |  |  |  |  |  |  |
| Net derivative assets (liabilities) | **13.7** | **6.3** | **—** | **(1.9)** | **—** | **—** | **18.1** |

---

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** |
|  | | **Total realized/unrealized** | **Total realized/unrealized** | | | | |
|  | | **gains (losses)** | **gains (losses)** | | | | |
|  | **Beginning**<br>**asset/**<br>**(liability)**<br>**balance**<br>**as of**<br>**January 1,**<br>**2024** |<br>**Included**<br>**in net**<br>**income (2)** | **Included in**<br>**other**<br>**comprehensive**<br>**income (3)** | **Net**<br>**purchases,**<br>**sales,**<br>**issuances**<br>**and**<br>**settlements**<br>**(4)** |<br><br>**Transfers**<br>**into**<br>**Level 3** |<br><br>**Transfers**<br>**out of**<br>**Level 3** | **Ending**<br>**asset/**<br>**(liability)**<br>**balance**<br>**as of**<br>**December 31,**<br>**2024** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| **Assets** |  |  |  |  |  |  |  |
| Fixed maturities, available-for-sale: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;States and political subdivisions | $68.2 | $— | $(1.5) | $0.8 | $15.5 | $(17.9) | $65.1 |
| &nbsp;&nbsp;&nbsp;Corporate | 2305.9 | (28.2) | (25.1) | 38.9 | 58.9 |  | 2350.4 |
| &nbsp;&nbsp;&nbsp;Commercial mortgage-backed securities | 3.0 |  |  | (0.3) |  |  | 2.7 |
| &nbsp;&nbsp;&nbsp;Collateralized debt obligations | 75.4 |  | (0.7) | (71.7) |  | (3.0) |  |
| &nbsp;&nbsp;&nbsp;Other debt obligations | 1182.6 | 0.2 | (0.8) | 267.7 | 140.2 | (111.6) | 1478.3 |
| Total fixed maturities, available-for-sale | 3635.1 | (28.0) | (28.1) | 235.4 | 214.6 | (132.5) | 3896.5 |
| Fixed maturities, trading | 379.8 | (1.5) |  | 53.0 |  |  | 431.3 |
| Mortgage loans |  |  |  | 140.6 |  |  | 140.6 |
| Other investments | 164.6 | (22.9) |  | (11.3) |  |  | 130.4 |
| Separate account assets (1) | 752.8 | (17.5) |  | (8.6) |  |  | 726.7 |
| **Liabilities** |  |  |  |  |  |  |  |
| Investment and universal life contracts | (115.5) | (166.1) |  | (296.6) |  |  | (578.2) |
| Funds withheld payable embedded derivative | 2326.1 | 579.9 |  |  |  |  | 2906.0 |
| **Derivatives** |  |  |  |  |  |  |  |
| Net derivative assets (liabilities) | 5.3 | 8.3 |  | 0.4 | 0.1 | (0.4) | 13.7 |

---

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** |
|  | | **Total realized/unrealized** | **Total realized/unrealized** | | | | |
|  | | **gains (losses)** | **gains (losses)** | | | | |
|  | **Beginning**<br>**asset/**<br>**(liability)**<br>**balance**<br>**as of**<br>**January 1,**<br>**2023** |<br>**Included**<br>**in net**<br>**income (2)** | **Included in**<br>**other**<br>**comprehensive**<br>**income (3)** | **Net**<br>**purchases,**<br>**sales,**<br>**issuances**<br>**and**<br>**settlements**<br>**(4)** |<br><br>**Transfers**<br>**into**<br>**Level 3** |<br><br>**Transfers**<br>**out of**<br>**Level 3** | **Ending**<br>**asset/**<br>**(liability)**<br>**balance**<br>**as of**<br>**December 31,**<br>**2023** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| **Assets** |  |  |  |  |  |  |  |
| Fixed maturities, available-for-sale: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;States and political subdivisions | $69.1 | $— | $0.8 | $(1.7) | $— | $— | $68.2 |
| &nbsp;&nbsp;&nbsp;Corporate | 1568.3 | (4.5) | 13.3 | 593.6 | 212.4 | (77.2) | 2305.9 |
| &nbsp;&nbsp;&nbsp;Commercial mortgage-backed securities | 3.4 |  |  | (0.4) |  |  | 3.0 |
| &nbsp;&nbsp;&nbsp;Collateralized debt obligations | 56.2 |  | 1.9 | 165.8 |  | (148.5) | 75.4 |
| &nbsp;&nbsp;&nbsp;Other debt obligations | 467.8 | 1.3 | 1.2 | 537.0 | 239.5 | (64.2) | 1182.6 |
| Total fixed maturities, available-for-sale | 2164.8 | (3.2) | 17.2 | 1294.3 | 451.9 | (289.9) | 3635.1 |
| Fixed maturities, trading | 106.2 | 2.4 |  | 271.2 |  |  | 379.8 |
| Other investments | 1.4 | (5.7) |  | 168.9 |  |  | 164.6 |
| Separate account assets (1) | 1034.1 | (7.9) |  | (273.4) |  |  | 752.8 |
| **Liabilities** |  |  |  |  |  |  |  |
| Investment and universal life contracts | (46.3) | (37.8) |  | (31.4) |  |  | (115.5) |
| Funds withheld payable embedded derivative | 3652.8 | (1326.7) |  |  |  |  | 2326.1 |
| **Derivatives** |  |  |  |  |  |  |  |
| Net derivative assets (liabilities) | (4.0) | 6.1 |  | 3.1 | 0.1 |  | 5.3 |

---

(1) 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.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

(2) Both realized gains (losses) and mark-to-market unrealized
gains (losses) are generally reported in net realized capital gains (losses), net realized capital gains (losses) on funds withheld
assets or change in fair value of funds withheld embedded derivative within the consolidated statements of operations. Realized
and unrealized gains (losses) on certain securities with an investment objective to realize economic value through mark-to-market
changes are reported in net investment income within the consolidated statements of operations. Changes in unrealized gains (losses)
included in net income relating to positions still held were:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| **Assets** |  |  |  |
| Fixed maturities, available-for-sale: |  |  |  |
| &nbsp;&nbsp;&nbsp;Corporate | $**31.5** | $(39.1) | $0.3 |
| &nbsp;&nbsp;&nbsp;Other debt obligations | **—** | 0.2 | 1.9 |
| Total fixed maturities, available-for-sale | **31.5** | (38.9) | 2.2 |
| Fixed maturities, trading | **(3.0)** | (7.0) | 2.3 |
| Other investments | **6.0** | (10.0) | (5.3) |
| Separate account assets | **37.8** | (9.8) | (80.3) |
| **Liabilities** |  |  |  |
| Investment and universal life contracts | **(253.4)** | (155.8) | (29.2) |
| Funds withheld payable embedded derivative | **(473.4)** | 579.9 | (1326.7) |
| **Derivatives** |  |  |  |
| Net derivative assets (liabilities) | **3.4** | 8.1 | 7.3 |

---

(3) Changes in unrealized gains (losses) included in OCI
relating to positions still held were:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| **Assets** |  |  |  |
| Fixed maturities, available-for-sale: |  |  |  |
| &nbsp;&nbsp;&nbsp;States and political subdivisions | $**3.5** | $(1.4) | $(4.1) |
| &nbsp;&nbsp;&nbsp;Corporate | **(24.8)** | (25.7) | (38.9) |
| &nbsp;&nbsp;&nbsp;Commercial mortgage-backed securities | **0.1** |  |  |
| &nbsp;&nbsp;&nbsp;Collateralized debt obligations | **—** | 0.1 | 0.7 |
| &nbsp;&nbsp;&nbsp;Other debt obligations | **19.8** | (0.5) | (29.8) |
| Total fixed maturities, available-for-sale | **(1.4)** | (27.5) | (72.1) |

---

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

(4) Gross purchases, sales, issuances and settlements were:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** |
|  |<br>**Purchases** |<br>**Sales** |<br>**Issuances** |<br>**Settlements** | **Net purchases,**<br>**sales, issuances**<br>**and settlements** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| **Assets** |  |  |  |  |  |
| Fixed maturities, available-for-sale: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;States and political subdivisions | $**—** | $**—** | $**—** | $**(1.8)** | $**(1.8)** |
| &nbsp;&nbsp;&nbsp;Corporate | **627.4** | **(236.4)** | **—** | **(233.2)** | **157.8** |
| &nbsp;&nbsp;&nbsp;Commercial mortgage-backed securities | **—** | **—** | **—** | **(0.4)** | **(0.4)** |
| &nbsp;&nbsp;&nbsp;Other debt obligations | **703.6** | **(177.7)** | **—** | **(269.4)** | **256.5** |
| Total fixed maturities, available-for-sale | **1331.0** | **(414.1)** | **—** | **(504.8)** | **412.1** |
| Fixed maturities, trading | **245.2** | **(213.4)** | **—** | **(141.0)** | **(109.2)** |
| Mortgage loans | **—** | **—** | **—** | **(140.6)** | **(140.6)** |
| Other investments | **203.9** | **—** | **—** | **(161.0)** | **42.9** |
| Separate account assets (5) | **—** | **(49.9)** | **—** | **42.6** | **(7.3)** |
| **Liabilities** |  |  |  |  |  |
| Investment and universal life contracts | **—** | **—** | **(625.4)** | **52.3** | **(573.1)** |
| **Derivatives** |  |  |  |  |  |
| Net derivative assets (liabilities) | **(1.9)** | **—** | **—** | **—** | **(1.9)** |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** |
|  |<br>**Purchases** |<br>**Sales** |<br>**Issuances** |<br>**Settlements** | **Net purchases,**<br>**sales, issuances**<br>**and settlements** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| **Assets** |  |  |  |  |  |
| Fixed maturities, available-for-sale: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;States and political subdivisions | $2.5 | $— | $— | $(1.7) | $0.8 |
| &nbsp;&nbsp;&nbsp;Corporate | 659.3 | (322.2) |  | (298.2) | 38.9 |
| &nbsp;&nbsp;&nbsp;Commercial mortgage-backed securities |  |  |  | (0.3) | (0.3) |
| &nbsp;&nbsp;&nbsp;Collateralized debt obligations | 35.1 | (90.0) |  | (16.8) | (71.7) |
| &nbsp;&nbsp;&nbsp;Other debt obligations | 601.3 | (101.4) |  | (232.2) | 267.7 |
| Total fixed maturities, available-for-sale | 1298.2 | (513.6) |  | (549.2) | 235.4 |
| Fixed maturities, trading | 309.5 | (147.6) |  | (108.9) | 53.0 |
| Mortgage loans | 140.6 |  |  |  | 140.6 |
| Other investments | 182.1 |  |  | (193.4) | (11.3) |
| Separate account assets (5) |  | (30.3) | (60.0) | 81.7 | (8.6) |
| **Liabilities** |  |  |  |  |  |
| Investment and universal life contracts |  |  | (364.4) | 67.8 | (296.6) |
| **Derivatives** |  |  |  |  |  |
| Net derivative assets (liabilities) | 0.4 |  |  |  | 0.4 |

---

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** |
|  |<br>**Purchases** |<br>**Sales** |<br>**Issuances** |<br>**Settlements** | **Net purchases,**<br>**sales, issuances**<br>**and settlements** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| **Assets** |  |  |  |  |  |
| Fixed maturities, available-for-sale: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;States and political subdivisions | $— | $— | $— | $(1.7) | $(1.7) |
| &nbsp;&nbsp;&nbsp;Corporate | 815.2 | (27.7) |  | (193.9) | 593.6 |
| &nbsp;&nbsp;&nbsp;Commercial mortgage-backed securities |  |  |  | (0.4) | (0.4) |
| &nbsp;&nbsp;&nbsp;Collateralized debt obligations | 167.0 |  |  | (1.2) | 165.8 |
| &nbsp;&nbsp;&nbsp;Other debt obligations | 563.3 |  |  | (26.3) | 537.0 |
| Total fixed maturities, available-for-sale | 1545.5 | (27.7) |  | (223.5) | 1294.3 |
| Fixed maturities, trading | 424.7 | (138.7) |  | (14.8) | 271.2 |
| Other investments | 194.2 |  |  | (25.3) | 168.9 |
| Separate account assets (5) |  | (286.3) | (109.1) | 122.0 | (273.4) |
| **Liabilities** |  |  |  |  |  |
| Investment and universal life contracts |  |  | (69.9) | 38.5 | (31.4) |
| **Derivatives** |  |  |  |  |  |
| Net derivative assets (liabilities) | 0.8 | 2.3 |  |  | 3.1 |

---

(5) 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 were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** |
|  | **Transfers out**<br>**of Level 1 into**<br>**Level 3** | **Transfers out**<br>**of Level 2 into**<br>**Level 3** | **Transfers out**<br>**of Level 3 into**<br>**Level 1** | **Transfers out**<br>**of Level 3 into**<br>**Level 2** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| **Assets** |  |  |  |  |
| Fixed maturities, available-for-sale: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Other debt obligations | $**—** | $**122.5** |  | $**119.0** |
| Total fixed maturities, available-for-sale | **—** | **122.5** |  | **119.0** |
| Fixed maturities, trading | **—** | **—** |  | **4.8** |

---

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** |
|  | **Transfers out**<br>**of Level 1 into**<br>**Level 3** | **Transfers out**<br>**of Level 2 into**<br>**Level 3** | **Transfers out**<br>**of Level 3 into**<br>**Level 1** | **Transfers out**<br>**of Level 3 into**<br>**Level 2** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| **Assets** |  |  |  |  |
| Fixed maturities, available-for-sale: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;States and political subdivisions | $— | $15.5 | $— | $17.9 |
| &nbsp;&nbsp;&nbsp;Corporate |  | 58.9 |  |  |
| &nbsp;&nbsp;&nbsp;Collateralized debt obligations |  |  |  | 3.0 |
| &nbsp;&nbsp;&nbsp;Other debt obligations |  | 140.2 |  | 111.6 |
| Total fixed maturities, available-for-sale |  | 214.6 |  | 132.5 |
| **Derivatives** |  |  |  |  |
| Net derivative assets (liabilities) |  | 0.1 |  | 0.4 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** |
|  | **Transfers out**<br>**of Level 1 into**<br>**Level 3** | **Transfers out**<br>**of Level 2 into**<br>**Level 3** | **Transfers out**<br>**of Level 3 into**<br>**Level 1** | **Transfers out**<br>**of Level 3 into**<br>**Level 2** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| **Assets** |  |  |  |  |
| Fixed maturities, available-for-sale: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Corporate | $— | $212.4 | $— | $77.2 |
| &nbsp;&nbsp;&nbsp;Collateralized debt obligations |  |  |  | 148.5 |
| &nbsp;&nbsp;&nbsp;Other debt obligations |  | 239.5 |  | 64.2 |
| Total fixed maturities, available-for-sale |  | 451.9 |  | 289.9 |
| **Derivatives** |  |  |  |  |
| Net derivative assets (liabilities) |  | 0.1 |  |  |

---

Assets transferred into Level 3 during 2025, 2024 and 2023, 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 2025, 2024 and 2023, included those assets 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.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

**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. The MRB asset and liability are excluded from the table. Refer to Note 12, Market Risk Benefits, for information on the unobservable inputs used for fair value measurement of MRBs. The funds withheld payable embedded derivative is excluded from the table as the determination of its fair value incorporates the fair value of the invested assets supporting the reinsurance agreement. The commercial mortgage loans of a consolidated VIE are excluded from the table as the determination of fair value was based on transaction price due to proximity of purchase to year-end, and thus no inputs to be provided. Refer to "Assets and liabilities measured at fair value on a recurring basis" for a complete valuation hierarchy summary.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  | **Assets /**<br>**(liabilities)**<br>**measured at**<br>**fair value** | <br>**Valuation**<br>**technique(s)** | <br>**Unobservable**<br>**input description** | <br>**Input/range**<br>**of inputs** | <br>**Weighted**<br>**average** |
|  | *(in millions)* |  |  |  |  |
| **Assets** |  |  |  |  |  |
| Fixed maturities, available-for-sale: | Fixed maturities, available-for-sale: | Fixed maturities, available-for-sale: |  |  |  |
| &nbsp;&nbsp;&nbsp;Corporate | $**2017.3** | Discounted cash flow<br>| Discount rate (1) | 2.7%-13.1% | 8.0% |
|  |  |  | Earnings before interest, taxes, depreciation and amortization multiple | 0.9x | 0.9x |
|  |  |  | Illiquidity premium | 30 basis points ("bps")-771bps | 146bps |
|  |  |  | Comparability adjustment | (120)bps-3,462bps | 122bps |
| &nbsp;&nbsp;&nbsp;Other debt obligations | **1745.4** | Discounted cash flow<br>| Discount rate (1) | 3.4%-8.6% | 4.2% |
|  |  |  | Illiquidity premium | (83)bps-415bps | 179bps |
|  |  |  | Comparability adjustment | (10)bps-285bps | 66bps |
| Fixed maturities, trading | **118.7** | Discounted cash flow<br>| Discount rate (1) | 8.5%-13.0% | 9.5% |
|  |  |  | Earnings before interest, taxes, depreciation and amortization multiple | 0.9x | 0.9x |
|  |  |  | Illiquidity premium | (88)bps-2,047bps | 119bps |

---

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  | **Assets /**<br>**(liabilities)**<br>**measured at**<br>**fair value** | <br>**Valuation**<br>**technique(s)** | <br>**Unobservable**<br>**input description** | <br>**Input/range**<br>**of inputs** | <br>**Weighted**<br>**average** |
| | *(in millions)* | | | | |
| Separate account assets | **742.5** | Discounted cash flow - real estate<br>| Discount rate (1) | 6.8%-9.3% | 7.3% |
|  |  |  | Terminal capitalization rate<br>| 5.5%-8.0% | 6.0% |
|  |  |  | Average market rent growth rate<br>| 2.0%-3.3% | 2.7% |
|  |  | Discounted cash flow - real estate debt<br>| Loan to value | 47.2%-69.3% | 52.7% |
|  |  |  | Market interest rate | 5.3%-6.4% | 5.8% |
| **Liabilities** |  |  |  |  |  |
| Investment and universal life contracts (4)<br>| **(1410.2)** | Discounted cash flow<br>| Long duration interest rate<br>| 3.5%-4.8% (2) | 4.8% |
|  |  |  | Long-term equity market volatility<br>| 16.1%-33.4% | 21.8% |
|  |  |  | Nonperformance risk | 0.5%-1.1% | 0.9% |
|  |  |  | Lapse rate | 0.0%-55.0% | 8.0% |
|  |  |  | Mortality rate | See note (3) |  |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Assets /**<br>**(liabilities)**<br>**measured at**<br>**fair value** | <br>**Valuation**<br>**technique(s)** | <br>**Unobservable**<br>**input description** | <br>**Input/range**<br>**of inputs** | <br>**Weighted**<br>**average** |
|  | *(in millions)* |  |  |  |  |
| **Assets** |  |  |  |  |  |
| Fixed maturities, available-for-sale: | Fixed maturities, available-for-sale: | Fixed maturities, available-for-sale: |  |  |  |
| &nbsp;&nbsp;&nbsp;Corporate | $1817.8 | Discounted cash flow<br>| Discount rate (1) | 2.1%-12.7% | 8.0% |
|  |  |  | Earnings before interest, taxes, depreciation and amortization multiple<br>| 1.1x-1.7x | 1.3x |
|  |  |  | Illiquidity premium | 30bps-791bps | 142bps |
|  |  |  | Comparability adjustment<br>| (42)bps-2,947bps | 149bps |
| &nbsp;&nbsp;&nbsp;Other debt obligations | 1343.1 | Discounted cash flow<br>| Discount rate (1) | 4.9%-7.7% | 5.4% |
|  |  |  | Illiquidity premium | (83)bps-260bps | 120bps |
|  |  |  | Comparability adjustment<br>| (19)bps-415bps | 128bps |

---

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Assets /**<br>**(liabilities)**<br>**measured at**<br>**fair value** | <br>**Valuation**<br>**technique(s)** | <br>**Unobservable**<br>**input description** | <br>**Input/range**<br>**of inputs** | <br>**Weighted**<br>**average** |
| | *(in millions)* | | | | |
| Fixed maturities, trading | 175.4 | Discounted cash flow<br>| Discount rate (1) | 9.5%-13.0% | 10.4% |
|  |  |  | Earnings before interest, taxes, depreciation and amortization multiple<br>| 1.1x | 1.1x |
|  |  |  | Illiquidity premium | (32)bps-2,947bps | 186bps |
| Separate account assets | 726.7 | Discounted cash flow - real estate<br>| Discount rate (1) | 7.0%-11.0% | 7.2% |
|  |  |  | Terminal capitalization rate<br>| 5.5%-9.5% | 6.0% |
|  |  |  | Average market rent growth rate<br>| 2.0%-4.5% | 2.7% |
|  |  | Discounted cash flow - real estate debt<br>| Loan to value | 46.4%-69.5% | 59.2% |
|  |  |  | Market interest rate | 4.9%-7.2% | 6.1% |
| **Liabilities** |  |  |  |  |  |
| Investment and universal life contracts (4) | (578.2) | Discounted cash flow<br>| Long duration interest rate<br>| 3.0%-4.9% (2) | 4.8% |
|  |  |  | Long-term equity market volatility<br>| 14.5%-49.3% | 21.4% |
|  |  |  | Nonperformance risk | 0.4%-1.1% | 0.8% |
|  |  |  | Lapse rate | 0.0%-55.0% | 8.5% |
|  |  |  | Mortality rate | See note (3) |  |

---

(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 illiquidity or other adjustments, where applicable.

(2) 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.

(3) This input is based on an appropriate industry mortality table and a range does not provide a meaningful presentation.

(4) Includes bifurcated embedded derivatives that are reported at net asset (liability) fair value within the same line item in
the consolidated statements of financial position in which the host contract is reported.

Market comparable discount rates are used as the base rate in the discounted cash flows used to determine the fair value of certain assets. The use of a higher or lower discount rate would have caused 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. The use of a higher or lower illiquidity premium would have caused significant decreases or increases, respectively, in the fair value of the asset.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

Embedded derivatives within our investment and universal life contracts liability can be in either an asset or liability position, depending on certain inputs at the reporting date. Increases to an asset or decreases to a liability are described as increases to fair value. The use of a higher or lower market volatility would have caused significant decreases or increases, respectively, in the fair value of embedded derivatives in investment and universal life 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 use of higher or lower risk-free rates would have caused the fair value of the embedded derivative to significantly increase or decrease, respectively. The use of a higher or lower rate for our own credit risks, which impact the rates used to discount future cash flows, would have significantly increased or decreased, respectively, the fair value of the embedded derivative. The use of a lower or higher mortality rate assumption would have caused the fair value of the embedded derivative to decrease or increase, respectively. The use of a lower or higher overall lapse rate assumption would have caused the fair value of the embedded derivative to decrease or increase, respectively.

**Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis**

No significant assets and liabilities were measured at fair value on a nonrecurring basis for the years ended December 31, 2025, 2024 and 2023.

**Fair Value Option**

We elected fair value accounting for:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Certain other loans of a consolidated VIE that were subject to amortized cost accounting and a valuation allowance so that
credit losses are recognized within the changes in fair value in the consolidated statements of operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Certain mortgage loans and long-term debt of a consolidated VIE to provide alignment between the consolidated VIE's financial
reporting and the calculation of net asset value per share used to determine the prices at which investors could purchase and redeem
shares of the entity's stock. The consolidated VIE was deconsolidated during 2025.

The following table presents information regarding the assets and liabilities for which the fair value option was elected.

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
|  | *(in millions)* | *(in millions)* |
| **Mortgage loans of consolidated VIE (1)** |  |  |
| &nbsp;&nbsp;&nbsp;Fair value (1) | $**—** | $140.6 |
| &nbsp;&nbsp;&nbsp;Aggregate contractual principal | **—** | 140.6 |
| **Other loans of consolidated VIE (2)** |  |  |
| &nbsp;&nbsp;&nbsp;Fair value (2) | $**167.1** | $129.0 |
| &nbsp;&nbsp;&nbsp;Aggregate contractual principal | **175.8** | 139.9 |
| **Long-term debt of consolidated VIE (1)** |  |  |
| &nbsp;&nbsp;&nbsp;Fair value (1) | $**—** | $21.8 |
| &nbsp;&nbsp;&nbsp;Aggregate contractual principal | **—** | 21.8 |

---

(1) Assets and liabilities from consolidated VIE, which are
reported as mortgage loans and long-term debt on the consolidated statements of financial position, originated in December 2024
with no change in fair value recognized due to timing of origination. The consolidated VIE was deconsolidated during first quarter
2025 with no change in fair value recognized due to timing of the deconsolidation and an immaterial amount of interest expense
recognized on the long-term debt.

(2) Reported with other investments on the consolidated statements
of financial position. See Note 5, Investments, for additional information relating to other loans more than 90 days past due
or in non-accrual status.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

The following table presents information regarding the consolidated statements of operations impact of assets for which the fair value option was elected.

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| **Other loans of consolidated VIE** |  |  |  |
| &nbsp;&nbsp;&nbsp;Change in fair value pre-tax loss - instrument specific credit risk | $**(6.1)** | $(22.8) | $(5.6) |
| &nbsp;&nbsp;&nbsp;Change in fair value pre-tax loss (1) | **(6.1)** | (22.8) | (5.6) |
| &nbsp;&nbsp;&nbsp;Interest income (2) | **19.7** | 31.0 | 8.1 |

---

(1) Reported in net realized capital gains (losses) on the consolidated statements of operations.

(2) Reported in net investment income on the consolidated statements of operations and recorded based on the effective interest
rate of the loans.

**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, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  | | | **Fair value hierarchy level** | **Fair value hierarchy level** | **Fair value hierarchy level** |
|  |<br>**Carrying amount** |<br>**Fair value** | **Level 1** | **Level 2** | **Level 3** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| **Assets (liabilities)** |  |  |  |  |  |
| Mortgage loans | $**20096.4** | $**18889.0** | $**—** | $**—** | $**18889.0** |
| Policy loans | **850.5** | **802.9** | **—** | **—** | **802.9** |
| Other investments | **231.7** | **221.3** | **—** | **43.5** | **177.8** |
| Cash and cash equivalents | **879.8** | **879.8** | **879.8** | **—** | **—** |
| Reinsurance deposit receivable | **4076.1** | **3825.7** | **—** | **—** | **3825.7** |
| Cash collateral receivable | **0.7** | **0.7** | **0.7** | **—** | **—** |
| Investment contracts | **(34107.8)** | **(33615.5)** | **—** | **(8200.1)** | **(25415.4)** |
| Long-term debt | **(2.9)** | **(2.6)** | **—** | **—** | **(2.6)** |
| Separate account liabilities | **(137136.3)** | **(136188.0)** | **—** | **—** | **(136188.0)** |
| Bank deposits (1) | **(423.8)** | **(427.8)** | **—** | **(427.8)** | **—** |
| Cash collateral payable | **(837.8)** | **(837.8)** | **(837.8)** | **—** | **—** |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | | | **Fair value hierarchy level** | **Fair value hierarchy level** | **Fair value hierarchy level** |
|  |<br>**Carrying amount** |<br>**Fair value** | **Level 1** | **Level 2** | **Level 3** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| **Assets (liabilities)** |  |  |  |  |  |
| Mortgage loans | $19517.3 | $17640.2 | $— | $— | $17640.2 |
| Policy loans | 852.4 | 802.4 |  |  | 802.4 |
| Other investments | 264.9 | 262.4 |  | 97.5 | 164.9 |
| Cash and cash equivalents | 905.5 | 905.5 | 905.5 |  |  |
| Reinsurance deposit receivable | 4897.6 | 4401.9 |  |  | 4401.9 |
| Cash collateral receivable | 3.0 | 3.0 | 3.0 |  |  |
| Investment contracts | (34092.5) | (32868.1) |  | (8306.4) | (24561.7) |
| Short-term debt | (119.0) | (119.0) |  | (119.0) |  |
| Long-term debt | (2.9) | (2.5) |  |  | (2.5) |
| Separate account liabilities | (125100.3) | (124232.6) |  |  | (124232.6) |
| Bank deposits (1) | (440.4) | (442.1) |  | (442.1) |  |
| Cash collateral payable | (415.3) | (415.3) | (415.3) |  |  |

---

(1) Excludes deposit liabilities without defined or contractual maturities.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

**20. 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 Insurance & Financial Services of the State of Iowa (the "Iowa Insurance Division"). The Iowa Insurance Division 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. 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.

We cede certain term, ULSG and Closed Block life insurance statutory reserves to our 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, 2025 and 2024, our affiliated reinsurance subsidiaries assumed statutory reserves of $19,424.2 million and $19,013.3 million from us, respectively. In the states of Vermont and Delaware, the affiliated reinsurers had permitted practices allowing for the admissibility of certain assets backing these reserves. As of December 31, 2025 and 2024, assets admitted under these practices totaled $4,321.7 million and $4,254.5 million, respectively. In addition, as of December 31, 2025 and 2024, one of our affiliated reinsurance subsidiaries in Vermont ceded $11,245.3 million and $10,847.6 million of the ULSG reserves it assumed from us to an unaffiliated reinsurance company, respectively.

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. As of December 31, 2025, we met the minimum RBC requirements.

Our statutory net income (loss) and statutory capital and surplus were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **As of or for the year ended December 31,** | **As of or for the year ended December 31,** | **As of or for the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| Statutory net income | $**1128.8** | $1093.6 | $1285.0 |
| Statutory capital and surplus | **4802.3** | 4695.5 | 4753.4 |

---

**21. Segment Information** 

We provide financial products and services through the following segments: Retirement and Income Solutions and Benefits and Protection. 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.

The Retirement and Income Solutions segment provides retirement and related financial products and services primarily to businesses, their employees and other individuals. The segment includes workplace savings and retirement solutions, banking, trust and custodial services, individual variable annuities (including RILAs), pension risk transfer, investment only and our exited retail fixed annuities business.

The Benefits and Protection segment focuses on solutions primarily for small-to-mid sized businesses and their employees. The segment is organized into Specialty Benefits, which provides group dental, group life insurance, group disability insurance (including short-term disability, long-term disability and paid family and medical leave), supplemental health products (including vision, critical illness, accident and hospital indemnity) and individual disability insurance; and Life Insurance, which provides life insurance focused on the business market customer, including universal life and variable universal life (including indexed universal life) and traditional life insurance (including term life insurance). All remaining customers are part of the legacy life block of business, including universal and variable universal life insurance (including indexed universal life), traditional life insurance (including participating whole life, adjustable life products and term life insurance) and our exited ULSG business.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

Our Corporate segment manages the assets representing capital that has not been allocated to any other segment. Financial results of the Corporate segment primarily reflect income on capital not allocated to other segments, inter-segment eliminations, income tax risks and certain income, expenses and other adjustments not allocated to other segments based on the nature of such items. Results of our exited group medical and long-term care insurance businesses are reported in this segment.

Our chief operating decision maker ("CODM") is our chief executive officer. Our CODM and management team, use segment pre-tax operating earnings in evaluating performance, which is consistent with the financial results provided to and discussed with securities analysts. In addition, the financial information provided to our CODM is used in making decisions about the allocation of resources and determining annual incentive compensation paid to our employees. 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 income (loss) from exited business, pre-tax other adjustments that management believes are not indicative of overall operating trends and certain adjustments related to equity method investments and noncontrolling interest. While these items may be significant components in understanding and assessing the consolidated financial performance, management believes the presentation of 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 pre-tax net realized capital gains (losses), as adjusted, excluded from pre-tax operating earnings reflects consolidated U.S. GAAP pre-tax net realized capital gains (losses) excluding the following items that are included in pre-tax operating earnings:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Periodic settlements and accruals on derivative instruments not designated as hedging instruments,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Certain market value adjustments of derivatives and embedded derivatives and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Certain market value adjustments of derivative instruments used to economically hedge embedded derivatives.

Pre-tax net realized capital gains (losses), as adjusted, are further adjusted for:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Amortization of hedge accounting book value adjustments for certain discontinued hedges,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Certain hedge accounting market value revenue adjustments,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Certain market value adjustments to fee revenues,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The change in fair value of the funds withheld embedded derivative and net realized capital gains (losses) on funds withheld
assets associated with certain reinsurance transactions,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Pre-tax net realized capital gains (losses) related to other adjustments,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Certain variable annuity fees,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Market value adjustments of market risk benefits,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Related changes in the amortization pattern of actuarial balances,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Certain hedge accounting market value expense adjustments and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Net realized capital gains (losses) distributed.

Pre-tax income (loss) from exited business includes amounts associated with our exited U.S. retail fixed annuity and ULSG businesses, including the change in fair value of the funds withheld embedded derivative, net realized capital gains (losses) on funds withheld assets, amortization of reinsurance gain (loss) and other impacts of reinsured business. Other impacts of reinsured business primarily include change in reserves and DAC amortization.

Segment operating revenues reflect consolidated U.S. GAAP total revenues excluding:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Net realized capital gains (losses), except periodic settlements and accruals on derivatives not designated as hedging instruments
and certain market value adjustments of derivative instruments used to economically hedge embedded derivatives, and their impact
on:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Amortization of hedge accounting book value adjustments for certain discontinued hedges,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Certain hedge accounting market value revenue adjustments,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Certain variable annuity fees and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Certain market value adjustments to fee revenues.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The change in fair value of the funds withheld embedded derivative and net realized capital gains (losses) on funds withheld
assets associated with certain reinsurance transactions,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Pre-tax revenues from exited business and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Pre-tax other adjustments management believes are not indicative of overall operating trends.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

Segment expenses reflect consolidated U.S. GAAP total expenses excluding:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Pre-tax expenses associated with net realized capital gains (losses),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Periodic settlements and accruals on derivatives used to hedge MRBs,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Pre-tax expenses from exited business and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Pre-tax expense adjustments management believes are not indicative of overall operating trends.

The accounting policies of the segments are consistent with the accounting policies for the consolidated financial statements, with the exception of: (1) OPEB cost allocations, (2) certain expenses deemed to benefit the entire organization and (3) income tax allocations. For purposes of determining pre-tax operating earnings, the segments are allocated the service component of OPEB costs. The Corporate segment reflects the non-service components of OPEB costs as assumptions are established and funding decisions are managed from a company-wide perspective. Additionally, the Corporate segment reflects expenses that benefit the entire organization for which the segments are not able to influence the spend. This includes expenses such as acquisition and disposition costs, among others. The Corporate segment functions to absorb the risk inherent in interpreting and applying tax law. For purposes of determining non-GAAP operating earnings, the segments are allocated tax adjustments consistent with the positions PFG 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 and reconcile segment totals to those reported in the consolidated financial statements.

**Segment Assets**

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
|  | *(in millions)* | *(in millions)* |
| Retirement and Income Solutions | $**241566.2** | $225778.6 |
| Benefits and Protection | **46549.6** | 44806.4 |
| Corporate | **1256.6** | 459.9 |
| &nbsp;&nbsp;&nbsp;Total assets per consolidated statements of financial position | $**289372.4** | $271044.9 |

---

**Segment Operating Revenues**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** |
|  | **Retirement**<br>**and Income**<br>**Solutions** |<br>**Benefits and**<br>**Protection** |<br>**Corporate** |<br>**Total** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| Revenue from contracts with external customers (1) | $**4806.8** | $**3265.3** | $**1.3** | $**8073.4** |
| Adjustments for revenue from contracts with external customers not included in operating revenues (2) | **(70.3)** | **28.9** | **—** | **(41.4)** |
| Net investment income included in operating revenues | **3407.5** | **646.4** | **201.3** | **4255.2** |
| Inter-segment operating revenues | **80.0** | **10.5** | **(82.8)** | **7.7** |
| Eliminations of inter-segment operating revenues | **—** | **—** | **(7.7)** | **(7.7)** |
| Other affiliated operating revenues | **(1039.0)** | **729.6** | **(30.6)** | **(340.0)** |
| &nbsp;&nbsp;&nbsp;Segment operating revenues (3) | $**7185.0** | $**4680.7** | $**81.5** | **11947.2** |
| Net realized capital losses, net of related revenue adjustments |  |  |  | **(169.2)** |
| Revenues from exited business (4) |  |  |  | **(364.4)** |
| Market risk benefit derivative settlements |  |  |  | **(40.8)** |
| &nbsp;&nbsp;&nbsp;Total revenues per consolidated statements of operations |  |  |  | $**11372.8** |

---

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** |
|  | **Retirement**<br>**and Income**<br>**Solutions** |<br>**Benefits and**<br>**Protection** |<br>**Corporate** |<br>**Total** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| Revenue from contracts with external customers (1) | $4957.8 | $3181.7 | $2.7 | $8142.2 |
| Adjustments for revenue from contracts with external customers not included in operating revenues (2) | (74.7) | 25.1 |  | (49.6) |
| Net investment income included in operating revenues | 3040.1 | 607.8 | 218.1 | 3866.0 |
| Operating revenues from equity method investments | 5.7 |  |  | 5.7 |
| Inter-segment operating revenues | 89.8 | 9.7 | (92.4) | 7.1 |
| Eliminations of inter-segment operating revenues |  |  | (7.1) | (7.1) |
| Other affiliated operating revenues | (756.2) | 707.8 | (36.2) | (84.6) |
| &nbsp;&nbsp;&nbsp;Segment operating revenues (3) | $7262.5 | $4532.1 | $85.1 | 11879.7 |
| Net realized capital gains, net of related revenue adjustments |  |  |  | 126.1 |
| Revenues from exited business (4) |  |  |  | 513.3 |
| Market risk benefit derivative settlements |  |  |  | (45.8) |
| &nbsp;&nbsp;&nbsp;Total revenues per consolidated statements of operations |  |  |  | $12473.3 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** |
|  | **Retirement**<br>**and Income**<br>**Solutions** |<br>**Benefits and**<br>**Protection** |<br>**Corporate** |<br>**Total** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| Revenue from contracts with external customers (1) | $4647.5 | $3032.1 | $8.6 | $7688.2 |
| Adjustments for revenue from contracts with external customers not included in operating revenues (2) | (80.5) | 12.6 |  | (67.9) |
| Net investment income included in operating revenues | 2647.9 | 579.1 | 229.5 | 3456.5 |
| Inter-segment operating revenues | 65.9 | 13.5 | (71.4) | 8.0 |
| Eliminations of inter-segment operating revenues |  |  | (8.0) | (8.0) |
| Other affiliated operating revenues | (86.1) | 853.1 | (38.4) | 728.6 |
| &nbsp;&nbsp;&nbsp;Segment operating revenues (3) | $7194.7 | $4490.4 | $120.3 | 11805.4 |
| Net realized capital losses, net of related revenue adjustments |  |  |  | (264.7) |
| Revenues from exited business (4) |  |  |  | (927.5) |
| Market risk benefit derivative settlements |  |  |  | (45.9) |
| &nbsp;&nbsp;&nbsp;Total revenues per consolidated statements of operations |  |  |  | $10567.3 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Includes amounts reported in premiums and other considerations as well as fees and other revenues on the consolidated statements
of operations.

&nbsp;&nbsp;&nbsp;&nbsp;(2) Includes certain revenues associated with our exited U.S. retail fixed annuity and ULSG businesses and fees associated with
net realized capital gains (losses) that are not included in segment operating revenue.

&nbsp;&nbsp;&nbsp;&nbsp;(3) See Note 22, Revenues from Contracts with Customers, for additional detail relating to segment operating revenues.

&nbsp;&nbsp;&nbsp;&nbsp;(4) Revenues from exited business included:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| Change in fair value of funds withheld embedded derivative | $**(381.1)** | $447.4 | $(1085.7) |
| Net realized capital gains on funds withheld assets | **43.2** | 87.7 | 165.0 |
| Amortization of reinsurance gain | **2.4** | 3.3 | 5.9 |
| Other impacts of reinsured business | **(28.9)** | (25.1) | (12.7) |
| &nbsp;&nbsp;&nbsp;Total revenues from exited business | $**(364.4)** | $513.3 | $(927.5) |

---

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

**Segment Expenses**

The expense categories within total segment expenses included:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** |
|  | **Retirement**<br>**and Income**<br>**Solutions** |<br>**Benefits and**<br>**Protection** |<br>**Corporate** |<br>**Total** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| Benefits, claims and settlement expenses | $**4347.1** | $**2618.6** | $**1.7** |  |
| Liability for future policy benefits remeasurement (gain) loss | **(16.8)** | **58.4** | **—** |  |
| Market risk benefit remeasurement loss | **3.8** | **—** | **—** |  |
| Dividends to policyholders | **0.2** | **91.5** | **—** |  |
| Commission expense | **288.8** | **543.7** | **—** |  |
| Capitalization of deferred acquisition costs and contract costs | **(163.8)** | **(250.4)** | **—** |  |
| Amortization of deferred acquisition costs and contract costs | **86.5** | **249.5** | **—** |  |
| Depreciation and amortization | **49.0** | **13.7** | **4.8** |  |
| Compensation and other | **1459.4** | **845.1** | **49.4** |  |
| &nbsp;&nbsp;&nbsp;Total operating expenses | **1719.9** | **1401.6** | **54.2** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total segment expenses | $**6054.2** | $**4170.1** | $**55.9** | $**10280.2** |
| Net realized capital losses expense adjustments |  |  |  | **134.5** |
| Market risk benefit derivative settlements |  |  |  | **(40.8)** |
| Expenses from exited business (1) |  |  |  | **200.4** |
| &nbsp;&nbsp;&nbsp;Total expenses per consolidated statements of operations |  |  |  | $**10574.3** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** |
|  | **Retirement**<br>**and Income**<br>**Solutions** |<br>**Benefits and**<br>**Protection** |<br>**Corporate** |<br>**Total** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| Benefits, claims and settlement expenses | $4507.1 | $2465.8 | $1.7 |  |
| Liability for future policy benefits remeasurement (gain) loss | (4.9) | 145.3 |  |  |
| Market risk benefit remeasurement loss | 32.2 |  |  |  |
| Dividends to policyholders | 0.2 | 99.7 |  |  |
| Commission expense | 267.3 | 527.3 |  |  |
| Capitalization of deferred acquisition costs and contract costs | (141.8) | (254.9) |  |  |
| Amortization of deferred acquisition costs and contract costs | 80.3 | 249.7 |  |  |
| Depreciation and amortization | 52.5 | 16.6 | 6.4 |  |
| Compensation and other | 1451.4 | 828.5 | 73.1 |  |
| &nbsp;&nbsp;&nbsp;Total operating expenses | 1709.7 | 1367.2 | 79.5 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total segment expenses | $6244.3 | $4078.0 | $81.2 | $10403.5 |
| Net realized capital losses expense adjustments |  |  |  | 94.0 |
| Market risk benefit derivative settlements |  |  |  | (45.8) |
| Expenses from exited business (1) |  |  |  | 428.4 |
| &nbsp;&nbsp;&nbsp;Total expenses per consolidated statements of operations |  |  |  | $10880.1 |

---

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** |
|  | **Retirement**<br>**and Income**<br>**Solutions** |<br>**Benefits and**<br>**Protection** |<br>**Corporate** |<br>**Total** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| Benefits, claims and settlement expenses | $4586.3 | $2537.7 | $1.4 |  |
| Liability for future policy benefits remeasurement (gain) loss | (68.0) | 16.0 |  |  |
| Market risk benefit remeasurement loss | 3.7 |  |  |  |
| Dividends to policyholders | 0.2 | 89.0 |  |  |
| Commission expense | 201.4 | 494.5 |  |  |
| Capitalization of deferred acquisition costs and contract costs | (93.7) | (291.2) |  |  |
| Amortization of deferred acquisition costs and contract costs | 78.6 | 247.6 |  |  |
| Depreciation and amortization | 57.2 | 19.2 | 5.0 |  |
| Compensation and other | 1366.9 | 854.2 | 87.7 |  |
| &nbsp;&nbsp;&nbsp;Total operating expenses | 1610.4 | 1324.3 | 92.7 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total segment expenses | $6132.6 | $3967.0 | $94.1 | $10193.7 |
| Net realized capital losses expense adjustments |  |  |  | 70.0 |
| Market risk benefit derivative settlements |  |  |  | (45.9) |
| Expenses from exited business (1) |  |  |  | 200.3 |
| &nbsp;&nbsp;&nbsp;Total expenses per consolidated statements of operations |  |  |  | $10418.1 |

---

(1) Expenses from exited business included:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| Amortization of reinsurance loss | $**86.5** | $592.9 | $74.6 |
| Other impacts of reinsured business | **113.9** | (164.5) | 125.7 |
| &nbsp;&nbsp;&nbsp;Total expenses from exited business | $**200.4** | $428.4 | $200.3 |

---

**Segment Pre-Tax Operating Earnings**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** |
|  | **Retirement**<br>**and Income**<br>**Solutions** |<br>**Benefits and**<br>**Protection** |<br>**Corporate** |<br>**Total** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| Segment pre-tax operating earnings | $**1130.8** | $**510.6** | $**24.7** | $**1666.1** |
| Pre-tax net realized capital losses, as adjusted (1) |  |  |  | **(303.7)** |
| Pre-tax loss from exited business (2) |  |  |  | **(564.8)** |
| Adjustments related to equity method investments and noncontrolling interest |  |  |  | **0.9** |
| &nbsp;&nbsp;&nbsp;Total income before income taxes per consolidated statements of operations |  |  |  | $**798.5** |

---

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** |
|  | **Retirement**<br>**and Income**<br>**Solutions** |<br>**Benefits and**<br>**Protection** |<br>**Corporate** |<br>**Total** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| Segment pre-tax operating earnings (losses) | $1018.2 | $454.1 | $(8.1) | $1464.2 |
| Pre-tax net realized capital gains, as adjusted (1) |  |  |  | 32.1 |
| Pre-tax income from exited business (2) |  |  |  | 84.9 |
| Adjustments related to equity method investments and noncontrolling interest |  |  |  | 12.0 |
| &nbsp;&nbsp;&nbsp;Total income before income taxes per consolidated statements of operations |  |  |  | $1593.2 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** |
|  | **Retirement**<br>**and Income**<br>**Solutions** |<br>**Benefits and**<br>**Protection** |<br>**Corporate** |<br>**Total** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| Segment pre-tax operating earnings | $1062.1 | $523.4 | $6.6 | $1592.1 |
| Pre-tax net realized capital losses, as adjusted (1) |  |  |  | (334.7) |
| Pre-tax loss from exited business (2) |  |  |  | (1127.8) |
| Adjustments related to equity method investments and noncontrolling interest |  |  |  | 19.6 |
| &nbsp;&nbsp;&nbsp;Total income before income taxes per consolidated statements of operations |  |  |  | $149.2 |

---

(1) Pre-tax net realized capital gains (losses), as adjusted,
is derived as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| Net realized capital losses | $**(54.3)** | $(152.2) | $(154.7) |
| Funds withheld adjustments | **(106.1)** | 130.8 | (244.2) |
| Derivative and hedging-related revenue adjustments | **(76.7)** | 76.1 | 59.6 |
| Market value adjustments to fee revenues | **(0.1)** | 0.1 | 1.3 |
| Certain variable annuity fees | **68.0** | 71.3 | 73.3 |
| &nbsp;&nbsp;&nbsp;Net realized capital gains (losses), net of related revenue adjustments | **(169.2)** | 126.1 | (264.7) |
| Amortization of actuarial balances | **(14.5)** | (1.7) | (0.1) |
| Capital losses distributed | **2.5** | 0.1 | 2.5 |
| Derivative and hedging-related expense adjustments | **1.6** | (3.5) | 1.8 |
| Market value adjustments of market risk benefits | **(100.1)** | (64.2) | (75.9) |
| Market value adjustments of embedded derivatives | **(24.0)** | (24.7) | 1.7 |
| &nbsp;&nbsp;&nbsp;Net realized capital losses, net of related expense adjustments | **(134.5)** | (94.0) | (70.0) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pre-tax net realized capital gains (losses), as adjusted (a) | $**(303.7)** | $32.1 | $(334.7) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) As adjusted before noncontrolling interest capital gains (losses).

(2) Pre-tax income (loss) from exited business included:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| Change in fair value of funds withheld embedded derivative | $**(381.1)** | $447.4 | $(1085.7) |
| Net realized capital gains on funds withheld assets | **43.2** | 87.7 | 165.0 |
| Amortization of reinsurance loss | **(84.1)** | (589.6) | (68.7) |
| Other impacts of reinsured business | **(142.8)** | 139.4 | (138.4) |
| &nbsp;&nbsp;&nbsp;Total pre-tax income (loss) from exited business | $**(564.8)** | $84.9 | $(1127.8) |

---

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

**Income Tax Expense**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** |
|  | **Retirement**<br>**and Income**<br>**Solutions** |<br>**Benefits and**<br>**Protection** |<br>**Corporate** |<br>**Total** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| Segment income tax expense (benefit) | $**130.4** | $**99.4** | $**(18.9)** | $**210.9** |
| Tax benefit related to net realized capital losses, as adjusted |  |  |  | **(60.8)** |
| Tax benefit from exited business (1) |  |  |  | **(118.5)** |
| Certain adjustments related to equity method investments and noncontrolling interest |  |  |  | **0.1** |
| &nbsp;&nbsp;&nbsp;Total income taxes per consolidated statements of operations |  |  |  | $**31.7** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** |
|  | **Retirement**<br>**and Income**<br>**Solutions** |<br>**Benefits and**<br>**Protection** |<br>**Corporate** |<br>**Total** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| Segment income tax expense (benefit) | $123.7 | $90.9 | $(17.1) | $197.5 |
| Tax expense related to net realized capital gains, as adjusted |  |  |  | 8.9 |
| Tax expense from exited business (1) |  |  |  | 17.9 |
| &nbsp;&nbsp;&nbsp;Total income taxes per consolidated statements of operations |  |  |  | $224.3 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** |
|  | **Retirement**<br>**and Income**<br>**Solutions** |<br>**Benefits and**<br>**Protection** |<br>**Corporate** |<br>**Total** |
|  | *(in millions)* | *(in millions)* | *(in millions)* | *(in millions)* |
| Segment income tax expense (benefit) | $134.2 | $95.0 | $(13.3) | $215.9 |
| Tax benefit related to net realized capital losses, as adjusted |  |  |  | (66.5) |
| Tax benefit from exited business (1) |  |  |  | (236.8) |
| &nbsp;&nbsp;&nbsp;Total income tax benefit per consolidated statements of operations |  |  |  | $(87.4) |

---

(1) Income tax expense (benefit) related to exited business included:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| Change in fair value of funds withheld embedded derivative | $**(80.0)** | $94.0 | $(228.0) |
| Net realized capital gains on funds withheld assets | **9.1** | 18.4 | 34.7 |
| Amortization of reinsurance loss | **(17.7)** | (123.8) | (14.4) |
| Other impacts of reinsured business | **(29.9)** | 29.3 | (29.1) |
| &nbsp;&nbsp;&nbsp;Total income tax expense (benefit) related to exited business | $**(118.5)** | $17.9 | $(236.8) |

---

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

**22. Revenues from Contracts with Customers**

The following tables summarize disaggregation of revenues from contracts with customers, including select financial information by segment, and reconcile totals to those reported in the consolidated financial statements. Revenues from contracts with customers are included in fees and other revenues on the consolidated statements of operations.

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| **Revenue from contracts with customers by segment:** |  |  |  |
| Retirement and Income Solutions | $**606.7** | $667.1 | $556.3 |
| Benefits and Protection: |  |  |  |
| &nbsp;&nbsp;&nbsp;Specialty Benefits | **11.9** | 12.1 | 12.7 |
| &nbsp;&nbsp;&nbsp;Life Insurance | **89.9** | 92.0 | 73.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Benefits and Protection | **101.8** | 104.1 | 85.8 |
| Corporate | **(0.8)** | (0.8) | (0.8) |
| &nbsp;&nbsp;&nbsp;Total segment revenue from contracts with customers | **707.7** | 770.4 | 641.3 |
| Adjustments for fees and other revenues not within the scope of revenue recognition guidance (1) | **1576.2** | 1488.9 | 1482.9 |
| Pre-tax other adjustments (2) | **70.3** | 74.7 | 80.5 |
| &nbsp;&nbsp;&nbsp;Total fees and other revenues per consolidated statements of operations | $**2354.2** | $2334.0 | $2204.7 |

---

(1) Fees and other revenues not within the scope of the revenue recognition guidance primarily represent revenue on contracts accounted
for under the financial instruments or insurance contracts standards.

(2) Pre-tax other adjustments relate to revenues from exited business, certain variable annuity fees and market value adjustments
to fee revenues.

**Retirement and Income Solutions**

Retirement and Income Solutions offers service and trust agreements for defined contribution retirement plans, including 401(k) plans, 403(b) plans, and employee stock ownership plans. The investment components of these service agreements are in the form of mutual fund offerings. In addition, plan sponsor retirement plan trust and custody services are also available through our trust company. Individual retirement accounts ("IRAs") are offered through Principal Bank. Furthermore, services and trust agreements are offered to non-retirement customers including insurance companies, endowments and other financial institutions.

Administrative service fee revenues are earned for administrative activities performed for the defined contribution retirement plans including recordkeeping and reporting as well as trust and custody, asset management and investment services. Administrative service fee revenues are earned for administrative activities performed for non-retirement plan customers including trust and custody services, defined benefit administration and investment management activities. The majority of these activities are performed daily over time. Fee-for-service transactions are also provided upon client request. These services are considered distinct or grouped into a bundle until a distinct performance obligation is identified. Some performance obligations are considered a series of distinct services, which are substantially the same and have the same pattern of transfer to the customer.

Administrative service fee revenues can be based on a fixed contractual rate for these services or can be variable based upon contractual rates applied to the market value of the client's investments or assets under administration. If the consideration for this series of performance obligations is based on market value, it is considered variable during the billing period as the services are performed over time. The consideration becomes unconstrained and thus recognized as revenue for each billing period's series of distinct services once the market value of the client's investments or assets under administration is determined at market close. Additionally, fixed fees and other revenues are recognized point-in-time as fee-for-service transactions upon completion.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

IRAs are primarily funded by retirement savings rolled over from qualified retirement plans. The IRAs are held in savings accounts, money market accounts and certificates of deposit. Deposit account fee revenues are earned as the performance of establishing and maintaining IRA accounts is completed. Fee-for-service transactions are also provided upon client request. The establishment fees and annual maintenance fees are accrued into earnings over a period of time using the average account life. Upfront and recurring bank fees are related to performance obligations that have the same pattern of transfer to the customer and are recognized in income over time with control transferred to the customers utilizing the output method. These fees are based on a fixed contractual rate. Fixed fees and other revenues are also recognized point-in-time as fee-for-service transactions upon completion. Additionally, commission income is earned on advisory services provided to customers. The revenues are earned over time as the service is performed based upon contractual rates applied to the market value of the clients' portfolios.

The types of revenues from contracts with customers were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| Administrative service fee revenue | $**587.5** | $651.1 | $539.5 |
| Deposit account fee revenue | **13.3** | 12.4 | 11.3 |
| Commission income | **5.9** | 3.6 | 1.9 |
| Other fee revenue | **—** |  | 3.6 |
| &nbsp;&nbsp;&nbsp;Total revenues from contracts with customers | **606.7** | 667.1 | 556.3 |
| Fees and other revenues not within the scope of revenue recognition guidance | **1190.4** | 1123.3 | 1118.7 |
| Total fees and other revenues | **1797.1** | 1790.4 | 1675.0 |
| Premiums and other considerations | **2250.0** | 2644.0 | 2935.0 |
| Net investment income | **3137.9** | 2828.1 | 2584.7 |
| Total operating revenues | $**7185.0** | $7262.5 | $7194.7 |

---

**Benefits and Protection**

Fees and other revenues are earned for administrative services performed including recordkeeping and reporting services for fee-for-service products, nonqualified benefit plans, separate accounts and dental networks. Services within contracts are not distinct on their own; however, we combine the services into a distinct bundle and account for the bundle as a single performance obligation, which is satisfied over time utilizing the output method as services are rendered. The transaction price corresponds with the performance completed to date, for which the value is recognized as revenue during the period. Variability of consideration is resolved at the end of each period and payments are due when billed.

Commission income is earned through sponsored brokerage services. Performance obligations are satisfied at a point in time, upon delivery of a placed case, and the transaction price calculated per the compensation schedule is recognized as revenue.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

The types of revenues from contracts with customers were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| **Specialty Benefits:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Administrative service fees | $**11.9** | $12.1 | $12.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenues from contracts with customers | **11.9** | 12.1 | 12.7 |
| &nbsp;&nbsp;&nbsp;Fees and other revenues not within the scope of revenue recognition guidance | **17.4** | 17.8 | 18.2 |
| &nbsp;&nbsp;&nbsp;Total fees and other revenues | **29.3** | 29.9 | 30.9 |
| &nbsp;&nbsp;&nbsp;Premiums and other considerations | **3330.0** | 3223.9 | 3020.9 |
| &nbsp;&nbsp;&nbsp;Net investment income | **208.0** | 191.5 | 174.3 |
| &nbsp;&nbsp;&nbsp;Total operating revenues | $**3567.3** | 3445.3 | 3226.1 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| **Life Insurance:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Administrative service fees | $**41.4** | $36.9 | $30.3 |
| &nbsp;&nbsp;&nbsp;Commission income | **48.5** | 55.1 | 42.8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenues from contracts with customers | **89.9** | 92.0 | 73.1 |
| &nbsp;&nbsp;&nbsp;Fees and other revenues not within the scope of revenue recognition guidance | **364.9** | 341.5 | 332.6 |
| &nbsp;&nbsp;&nbsp;Total fees and other revenues | **454.8** | 433.5 | 405.7 |
| &nbsp;&nbsp;&nbsp;Premiums and other considerations | **239.0** | 251.5 | 461.6 |
| &nbsp;&nbsp;&nbsp;Net investment income | **420.0** | 402.2 | 397.8 |
| &nbsp;&nbsp;&nbsp;Total operating revenues | $**1113.8** | 1087.2 | 1265.1 |

---

**Corporate**

The Corporate segment includes inter-segment eliminations of fees and other revenues. The types of revenues from contracts with customers were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| Eliminations | $**(0.8)** | $(0.8) | $(0.8) |
| &nbsp;&nbsp;&nbsp;Total revenues from contracts with customers | **(0.8)** | (0.8) | (0.8) |
| Fees and other revenues not within the scope of revenue recognition guidance | **3.5** | 6.3 | 13.4 |
| Total fees and other revenues | **2.7** | 5.5 | 12.6 |
| Premiums and other considerations | **(2.8)** | (2.7) | (7.3) |
| Net investment income | **81.6** | 82.3 | 115.0 |
| Total operating revenues | $**81.5** | $85.1 | $120.3 |

---

**Contract Costs**

Sales compensation and other incremental costs of obtaining a contract are capitalized and amortized over the period of contract benefit if the costs are expected to be recovered. The contract cost asset, which is included in other assets on the consolidated statements of financial position, was $50.6 million and $47.1 million as of December 31, 2025 and 2024, respectively.<br>

We apply the practical expedient for certain costs where we recognize the incremental costs of obtaining these contracts as an expense when incurred if the amortization period of the assets is one year or less. These costs, along with costs that are not deferrable, are included in operating expenses on the consolidated statements of operations.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

Deferred contract costs consist primarily of commissions and variable compensation. We amortize capitalized contract costs on a straight-line basis over the expected contract life, reflecting lapses as they are incurred. Deferred contract costs are subject to impairment testing on an annual basis, or when a triggering event occurs that could warrant an impairment. To the extent future revenues less future maintenance expenses are not adequate to cover the asset balance, an impairment is recognized. For the years ended December 31, 2025, 2024 and 2023, $7.7 million, $7.0 million and $7.6 million, respectively, of amortization expense was recorded in operating expenses on the consolidated statements of operations and no impairment loss was recognized in relation to the costs capitalized.

**23. Stock-Based Compensation Plans**

As of December 31, 2025, our ultimate parent, PFG, sponsored the 2021 Stock Incentive Plan, the 2014 Stock Incentive Plan, the Employee Stock Purchase Plan, the Amended and Restated 2010 Stock Incentive Plan and the Stock Incentive Plan ("Stock-Based Compensation Plans"), which resulted in expense to us. No new grants will be made under the 2014 Stock Incentive Plan, the Amended and Restated 2010 Stock Incentive Plan or the Stock Incentive Plan. Under the terms of the 2021 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 under any plans. As part of our fair value process, for each stock-based compensation plan, PFG assesses the impact of material nonpublic information on its share price or expected volatility, as applicable, at the time of grant. No awards in 2025 required a fair value adjustment.

For awards with graded vesting, we use an accelerated expense attribution method. The compensation cost that was charged against net income for stock-based awards granted under the Stock-Based Compensation Plans was as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | *(in millions)* | *(in millions)* | *(in millions)* |
| Compensation cost | $**33.9** | $29.0 | $25.3 |
| Related income tax benefit | **7.1** | 5.9 | 5.1 |
| Capitalized as part of an asset | **1.3** | 1.2 | 1.1 |

---

**Nonqualified Stock Options**

No nonqualified stock options were granted to employees during 2025, 2024 and 2023. Previously, 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.

As of December 31, 2025, we did not have any unrecognized compensation cost related to nonvested stock options.

**Performance Share Awards**

Performance share awards were granted to certain employees under the 2021 Stock Incentive Plan, 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. The performance share awards include a relative total shareholder return modifier under which the number of shares ultimately awarded is also impacted by PFG's actual shareholder return relative to PFG's S&P 500 Financial Sector Index peer group. The fair value of performance share awards is determined using a Monte Carlo simulation model. 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 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 will be recognized and any previously recognized compensation cost will be reversed. These awards have no maximum contractual term. Dividend equivalents are credited on performance shares outstanding as of the record date. These dividend equivalents are only paid on the shares released.

The weighted-average grant-date fair value of performance share awards granted during 2025, 2024 and 2023 was $90.41, $82.52 and $91.47, respectively.

**Principal Life Insurance Company<br> Notes to Consolidated Financial Statements – (continued)<br> December 31, 2025**

As of December 31, 2025, we had $15.1 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 1.6 years.

**Restricted Stock Units**

Restricted stock units were granted to certain employees and agents under the 2021 Stock Incentive Plan, the 2014 Stock Incentive Plan and the Amended and Restated 2010 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. These awards have no maximum contractual term. 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 2025, 2024 and 2023 was $84.55, $80.38 and $86.86, respectively.

As of December 31, 2025, we had $38.4 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 quarterly basis. Employees may purchase up to $25,000 in PFG stock value annually. Employees may purchase shares of our common stock at a price equal to 90% of the shares' fair market value as of the end of the purchase period.

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 $8.36, $8.30 and $7.49 during 2025, 2024 and 2023, respectively.

Report of Independent Registered Public Accounting Firm

To the Stockholder and Board of Directors of

Principal Life Insurance Company

We have audited the consolidated financial statements of Principal Life Insurance Company (the Company) as of December 31, 2025 and 2024, for each of the three years in the period ended December 31, 2025, and have issued our report thereon dated March 26, 2026 incorporated by reference in this Form N-4. Our audits of the consolidated financial statements included the financial statement schedules included in form N-VPFS (the "schedules"). These schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's schedules, based on our audits.

In our opinion, the schedules present fairly, in all material respects, the information set forth therein when considered in conjunction with the consolidated financial statements.

/s/ Ernst & Young LLP

Des Moines, Iowa

March 26, 2026

**Schedule I - Summary of Investments - Other Than Investments in Related Parties**

**December 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
| <br>**Type of Investment** |<br><br><br>**Cost** |<br><br>**Fair**<br>**value** | **Amount as**<br>**shown in the**<br>**consolidated**<br>**statement of**<br>**financial**<br>**position** |
|  | (in millions) | (in millions) | (in millions) |
| Fixed maturities, available-for-sale: |  |  |  |
| &nbsp;&nbsp;&nbsp;U.S Treasury securities and obligations of U.S government corporations and agencies | $**1977.3** | $**1718.4** | $**1718.4** |
| &nbsp;&nbsp;&nbsp;States, municipalities and political subdivisions | **8070.7** | **7109.6** | **7109.6** |
| &nbsp;&nbsp;&nbsp;Foreign governments | **545.7** | **508.4** | **508.4** |
| &nbsp;&nbsp;&nbsp;Public utilities | **5298.5** | **4843.8** | **4843.8** |
| &nbsp;&nbsp;&nbsp;Redeemable preferred stock | **250.1** | **237.5** | **237.5** |
| &nbsp;&nbsp;&nbsp;All other corporate bonds | **31911.7** | **29948.2** | **29948.2** |
| &nbsp;&nbsp;&nbsp;Residential mortgage-backed securities | **3539.2** | **3472.4** | **3472.4** |
| &nbsp;&nbsp;&nbsp;Commercial mortgage-backed securities | **5650.5** | **5363.5** | **5363.5** |
| &nbsp;&nbsp;&nbsp;Collateralized debt obligations | **6415.8** | **6420.6** | **6420.6** |
| &nbsp;&nbsp;&nbsp;Other debt obligations | **10958.2** | **10669.9** | **10669.9** |
| &nbsp;&nbsp;&nbsp;Unallocated portfolio layer method basis adjustment | **(16.9)** | **—** | **—** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total fixed maturities, available-for-sale | **74600.8** | **70292.3** | **70292.3** |
| Fixed maturities, trading | **1020.5** | **1020.5** | **1020.5** |
| Equity securities: |  |  |  |
| &nbsp;&nbsp;&nbsp;Banks, trust and insurance companies | **28.2** | **28.2** | **28.2** |
| &nbsp;&nbsp;&nbsp;Industrial, miscellaneous and all other | **515.8** | **515.8** | **515.8** |
| &nbsp;&nbsp;&nbsp;Non-redeemable preferred stock | **4.9** | **4.9** | **4.9** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total equity securities | **548.9** | **548.9** | **548.9** |
| Mortgage loans | **20096.4** | **XXXX** | **20096.4** |
| Real estate, net: |  |  |  |
| &nbsp;&nbsp;&nbsp;Other real estate | **2408.4** | **XXXX** | **2408.4** |
| Policy loans | **850.5** | **XXXX** | **850.5** |
| Other investments | **6726.5** | **XXXX** | **6726.5** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total investments | $**106252.0** | **XXXX** | $**101943.5** |

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**Schedule III - Supplementary Insurance Information**

**As of December 31, 2025 and 2024 and for each of the years ended December 31, 2025, 2024 and 2023**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| <br>**Segment** |<br>**Deferred**<br>**acquisition**<br>**costs** |<br>**Market risk**<br>**benefit asset** |<br>**Future policy**<br>**benefits and**<br>**claims** | **Contractholder**<br>**and other**<br>**policyholder**<br>**funds** |<br>**Market risk**<br>**benefit**<br>**liability** |
|  | (in millions) | (in millions) | (in millions) | (in millions) | (in millions) |
| **2025:** |  |  |  |  |  |
| Retirement and Income Solutions | $**1012.4** | $**197.1** | $**32044.4** | $**38404.1** | $**66.9** |
| Benefits and Protection | **2928.3** | **—** | **15154.7** | **7833.2** | **—** |
| Corporate | **—** | **—** | **196.7** | **1.5** | **—** |
| &nbsp;&nbsp;&nbsp;Total | $**3940.7** | $**197.1** | $**47395.8** | $**46238.8** | $**66.9** |
| **2024:** |  |  |  |  |  |
| Retirement and Income Solutions | $955.7 | $199.5 | $29818.3 | $36027.0 | $62.1 |
| Benefits and Protection | 2969.6 |  | 14290.5 | 7940.9 |  |
| Corporate |  |  | 194.5 | 1.6 |  |
| &nbsp;&nbsp;&nbsp;Total | $3925.3 | $199.5 | $44303.3 | $43969.5 | $62.1 |

---

**Schedule III - Supplementary Insurance Information - (continued)**

**As of December 31, 2025 and 2024 and for each of the years ended December 31, 2025, 2024 and 2023**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| <br>**Segment** |<br>**Premiums**<br>**and other**<br>**considerations** |<br>**Net**<br>**investment**<br>**income (1)** |<br>**Benefits,**<br>**claims and**<br>**settlement**<br>**expenses** | **Liability for**<br>**future policy**<br>**benefits**<br>**remeasurement**<br>**(gain) loss** |<br>**Market risk**<br>**benefit**<br>**remeasurement**<br>**loss** |<br>**Amortization**<br>**of deferred**<br>**acquisition**<br>**costs** |<br>**Other**<br>**operating**<br>**expenses (1)** |
|  | (in millions) | (in millions) | (in millions) | (in millions) | (in millions) | (in millions) | (in millions) |
| **2025:** |  |  |  |  |  |  |  |
| Retirement and Income Solutions | $**2250.0** | $**3035.0** | $**4386.8** | $**(16.5)** | $**63.1** | $**96.1** | $**1651.2** |
| Benefits and Protection | **3539.7** | **616.1** | **2739.9** | **65.0** | **—** | **291.6** | **1153.5** |
| Corporate | **(2.8)** | **78.9** | **1.7** | **—** | **—** | **—** | **50.2** |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $**5786.9** | $**3730.0** | $**7128.4** | $**48.5** | $**63.1** | $**387.7** | $**2854.9** |
| **2024:** |  |  |  |  |  |  |  |
| Retirement and Income Solutions | $2644.0 | $2840.5 | $4543.0 | $(14.5) | $50.6 | $95.2 | $1649.8 |
| Benefits and Protection | 3449.9 | 583.1 | 2287.7 | 675.7 |  | 292.8 | 1118.7 |
| Corporate | (2.7) | 110.8 | 1.7 |  |  |  | 79.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $6091.2 | $3534.4 | $6832.4 | $661.2 | $50.6 | $388.0 | $2848.0 |
| **2023:** |  |  |  |  |  |  |  |
| Retirement and Income Solutions | $2935.0 | $2618.8 | $4615.8 | $(68.5) | $33.7 | $95.9 | $1562.1 |
| Benefits and Protection | 3469.0 | 545.7 | 2609.0 | 16.0 |  | 292.8 | 1078.0 |
| Corporate | (7.3) | 121.0 | 1.4 |  |  |  | 92.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $6396.7 | $3285.5 | $7226.2 | $(52.5) | $33.7 | $388.7 | $2732.8 |

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

**Schedule IV - Reinsurance**

**As of December 31, 2025, 2024 and 2023 and for each of the years then ended**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |<br>**Gross**<br>**amount** |<br>**Ceded to**<br>**other**<br>**companies** |<br>**Assumed**<br>**from other**<br>**companies** |<br><br>**Net amount** | **Percentage**<br>**of amount**<br>**assumed**<br>**to net** |
|  | ($ in millions) | ($ in millions) | ($ in millions) | ($ in millions) | ($ in millions) |
| **2025:** |  |  |  |  |  |
| Life insurance in force | $**346447.3** | $**369706.7** | $**416733.5** | $**393474.1** | **105.9%** |
| Premiums: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Life insurance and annuities | $**3992.0** | $**1386.3** | $**549.5** | $**3155.2** | **17.4%** |
| &nbsp;&nbsp;&nbsp;Accident and health insurance | **2785.3** | **153.6** | **—** | **2631.7** | **—%** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $**6777.3** | $**1539.9** | $**549.5** | $**5786.9** | **9.5%** |
| **2024:** |  |  |  |  |  |
| Life insurance in force | $338344.0 | $351462.3 | $402770.5 | $389652.2 | 103.4% |
| Premiums: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Life insurance and annuities | $4116.5 | $1113.3 | $532.4 | $3535.6 | 15.1% |
| &nbsp;&nbsp;&nbsp;Accident and health insurance | 2706.4 | 150.8 |  | 2555.6 | —% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $6822.9 | $1264.1 | $532.4 | $6091.2 | 8.7% |
| **2023:** |  |  |  |  |  |
| Life insurance in force | $329287.2 | $333380.6 | $388012.8 | $383919.4 | 101.1% |
| Premiums: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Life insurance and annuities | $3847.1 | $387.9 | $517.0 | $3976.2 | 13.0% |
| &nbsp;&nbsp;&nbsp;Accident and health insurance | 2576.7 | 156.2 |  | 2420.5 | —% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $6423.8 | $544.1 | $517.0 | $6396.7 | 8.1% |

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