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<P align=center><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=5>SECURITIES AND EXCHANGE COMMISSION</FONT></B></P>
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     <TD noWrap align=center><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>Washington, D.C. 20549</FONT></B></TD></TR></TABLE></P>
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     <TD noWrap align=center><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=5>FORM 8-K</FONT></B><BR>
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<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">CURRENT REPORT</FONT></B></TD></TR></TABLE></P>
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     <TD noWrap align=center><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Pursuant to Section 13 or 15(d) of the</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Securities Exchange Act of 1934</FONT></B><BR>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Date of Report: </FONT><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">November 18, 2008</FONT></B><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Date of earliest event reported)</FONT></TD></TR></TABLE></P>
<P align=center><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=5>PRINCIPAL FINANCIAL GROUP, INC.</FONT></B></P>
<P align=center><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Exact name of registrant as specified in its charter)</FONT></P>
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     <TD noWrap align=center width="32%"><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>Delaware</FONT></B>&nbsp; </TD>
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     <TD noWrap align=center width="35%"><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>1-16725</FONT></B>&nbsp; </TD>
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     <TD noWrap align=center width="27%"><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>42-1520346</FONT></B>&nbsp; </TD></TR>
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     <TD noWrap align=center width="32%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>(State or other jurisdiction</FONT>&nbsp; </TD>
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     <TD noWrap align=center width="35%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>(Commission file number)</FONT>&nbsp; </TD>
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     <TD noWrap align=center width="27%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>(I.R.S. Employer</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=center width="32%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>of incorporation)</FONT>&nbsp; </TD>
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     <TD noWrap align=left width="35%">&nbsp; </TD>
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     <TD noWrap align=center width="27%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Identification Number)</FONT>&nbsp; </TD></TR></TABLE><BR>
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     <TD noWrap align=center><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>711 High Street, Des Moines, Iowa 50392</FONT></B><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>(Address of principal executive offices)</FONT><BR>
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<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>(515) 247-5111</FONT></B><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>(Registrant&#146;s telephone number, including area code)</FONT></TD></TR></TABLE></P>
<P align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:</FONT></P>
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     <TD noWrap align=left width="6%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>[ ]</FONT>&nbsp; </TD>
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     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="6%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>[ ]</FONT>&nbsp; </TD>
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     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="6%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>[ ]</FONT>&nbsp; </TD>
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     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>240.14d-2(b))</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="6%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>[ ]</FONT>&nbsp; </TD>
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     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="6%">&nbsp; </TD>
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     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>240.13e-4(c))</FONT>&nbsp; </TD></TR></TABLE><BR>
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     <TD noWrap align=left width="6%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Page 2</FONT>&nbsp; </TD>
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     <TD noWrap align=left width="15%" colSpan=3><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Item 7.01</FONT></B>&nbsp; </TD>
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     <TD noWrap align=left width="81%"><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Regulation FD Disclosure</FONT></B>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%" colSpan=3><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Since Principal Financial Group's November 4, 2008 call discussing third quarter 2008</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="98%" colSpan=5><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">financial results, a number of industry analysts and media outlets have commented on potential</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="98%" colSpan=5><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">issues for the life insurance sector, including annuities with living benefits, rating agency</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="98%" colSpan=5><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">downgrades and commercial real estate holdings. The company believes some of the commentary</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="98%" colSpan=5><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">has resulted in misinterpretation and potentially misleading information concerning The Principal&#146;s</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="98%" colSpan=5><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">financial condition. Included in the discussion below is information on: the company&#146;s minimal</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="98%" colSpan=5><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">exposure to annuities with living benefits; recent affirmations of Principal Life&#146;s insurer financial</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="98%" colSpan=5><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">strength ratings; and the quality and performance of the company&#146;s commercial real estate</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="98%" colSpan=5><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">holdings, and investment portfolio overall.</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="98%" colSpan=5><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Investors who wish to be accurately informed of The Principal's financial condition should visit our</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="98%" colSpan=5><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">website at </FONT><U><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">www</FONT></U><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">.principal.com and review the documents that can be found at the Investor</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="98%" colSpan=5><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Relations portion of the website.</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=center width="6%"><FONT face="SymbolMT,Times New Roman,Times,serif">&#183;</FONT>&nbsp; </TD>
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     <TD noWrap align=left width="90%" colSpan=3>&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Discussion by various commentators of annuities with living benefits, variously referred to</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%" colSpan=3>&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">as guaranteed minimum income benefits or guaranteed minimum withdrawal benefits</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%" colSpan=3>&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(&#147;GMWB&#148;), has created the impression that The Principal's exposure to this risk is similar</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%" colSpan=3>&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to that of other insurers. As CEO Larry Zimpleman explained at The Principal&#146;s third</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%" colSpan=3>&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">quarter earnings call, a significant point that distinguishes The Principal from other</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%" colSpan=3>&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">insurers is the small part GMWB plays in The Principal's business. With only $1 billion in</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%" colSpan=3>&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">this block, equity market volatility has minimal impact on the capital necessary to support</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%" colSpan=3>&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Principal's individual annuities business. Annuities with GMWB represented</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%" colSpan=3>&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">approximately 1/2 of 1% of The Principal's third quarter 2008 earnings.</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=center width="6%"><FONT face="SymbolMT,Times New Roman,Times,serif">&#183;</FONT>&nbsp; </TD>
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     <TD noWrap align=left width="90%" colSpan=3>&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Commentators have speculated about the possibility of agency downgrades as a reason to</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%" colSpan=3>&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">sell shares of U.S. life insurance companies. On November 7, 2008, Moody's Investors</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%" colSpan=3>&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Service </FONT><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">affirmed </FONT></B><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Principal's financial strength and debt ratings, all with stable</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%" colSpan=3>&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">outlooks. In addition, Fitch </FONT><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">affirmed </FONT></B><FONT face="TimesNewRomanPSMT,Times New &#13;&#10;Roman,Times,serif">The Principal's financial strength and debt ratings in</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%" colSpan=3>&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">September 2008, all with stable outlooks.</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%" colSpan=3>&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In our third quarter earnings call, we acknowledged the possibility of downgrades in the</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%" colSpan=3>&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">insurance sector and explained that, while strong relative ratings remain important to The</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%" colSpan=3>&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Principal, our key growth engines &#150; U.S. Asset Accumulation, Principal Global Investors</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%" colSpan=3>&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and Principal International &#150; could continue to operate successfully at a lower rating,</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%" colSpan=3>&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">particularly if downgrades were industry wide.</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%" colSpan=3>&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Some reports have contained broad, negative comments about The Principal's commercial</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%" colSpan=3>&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">real estate loan portfolio. As Chief Financial Officer Terry Lillis pointed out at our third</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%" colSpan=3>&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">quarter earnings call, every single commercial mortgage loan in our $11 billion portfolio is</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%" colSpan=3>&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">performing on schedule. In releasing third quarter 2008 results, we clearly communicated</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%" colSpan=3>&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">that we anticipate defaults and losses on commercial mortgages will increase in the future.</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%" colSpan=3>&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">However, we believe the increase will occur over a period of several years, and that we</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%" colSpan=3>&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">will have the ability to accommodate these losses going forward through the use of a</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%" colSpan=3>&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">number of capital management techniques. We would like to remind investors that our</FONT>&nbsp; </TD></TR></TABLE><BR>
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     <TD noWrap align=left width="7%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Page 3</FONT>&nbsp; </TD>
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     <TD noWrap align=left width="90%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">three key growth businesses require very little capital to support organic growth, which</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">enables us to generate substantial free cash flows on an ongoing basis. Because of strong</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">liquidity in our general account, we have the flexibility to selectively scale back on certain</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">capital intensive businesses to free up additional capital. In addition, we manage our</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">investment portfolio to match our liabilities, which, like others in the life insurance</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">industry (and different from other financial services industries), are longer-term in nature.</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="7%">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="SymbolMT,Times New Roman,Times,serif">&#183;</FONT>&nbsp; </TD>
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     <TD noWrap align=left width="90%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">We continue to believe the fundamentals of our fixed maturity portfolio remain sound and</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">that gross unrealized losses are a highly inaccurate representation of future investment</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">losses. Given our strong general account liquidity position, the longer-term nature of our</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">liabilities and our disciplined asset-liability matching, we have the ability and intent to</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">hold assets until maturity.</FONT>&nbsp; </TD></TR>
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     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
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     <TD noWrap align=left width="7%">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="SymbolMT,Times New Roman,Times,serif">&#183;</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="90%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">As we stated at our November 4 earnings call, the company has continued to enhance</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="7%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="90%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">liquidity, increasing cash and cash equivalent holdings by more than 50% from June 30 to</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="7%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="90%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">$2.3 billion at the end of the third quarter. During the third quarter, we also made</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="7%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="90%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">adjustments in our general account investment strategies, investing new cash flows</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="7%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="90%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">primarily into government and agency backed securities, and other liquid investments. In</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="7%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="90%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">addition, we closed out our very modest general account securities lending program.</FONT>&nbsp; </TD></TR></TABLE><BR>
<TABLE cellSpacing=0 cellPadding=0 border=0>
<TR vAlign=bottom>
     <TD align=center width="99%" colSpan=3><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">SIGNATURE</FONT> </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="99%" colSpan=3>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="99%" colSpan=3><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">caused this report to be signed on its behalf by the undersigned thereunto duly authorized.</FONT>&nbsp; </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="99%" colSpan=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">PRINCIPAL FINANCIAL GROUP, INC.</FONT>&nbsp; </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By:&nbsp;<U> /s/ Terrance J. Lillis</U></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="99%" colSpan=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Name: Terrance J. Lillis</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="99%" colSpan=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Title: Senior Vice President and Chief Financial</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="49%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="48%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Officer</FONT>&nbsp; </TD></TR></TABLE>Date:&nbsp; November 18, 2008<BR>
<HR align=center width="100%" noShade SIZE=2>

</BODY>

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finalreg111708.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report:
November 18, 2008
(Date of earliest event reported)
PRINCIPAL FINANCIAL GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware
1-16725
42-1520346
(State or other jurisdiction
(Commission file number)
(I.R.S. Employer
of incorporation)
Identification Number)
711 High Street, Des Moines, Iowa 50392
(Address of principal executive offices)
(515) 247-5111
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Page 2
Item 7.01
Regulation FD Disclosure
Since Principal Financial Group's November 4, 2008 call discussing third quarter 2008
financial results, a number of industry analysts and media outlets have commented on potential
issues for the life insurance sector, including annuities with living benefits, rating agency
downgrades and commercial real estate holdings. The company believes some of the commentary
has resulted in misinterpretation and potentially misleading information concerning The Principal's
financial condition. Included in the discussion below is information on: the company's minimal
exposure to annuities with living benefits; recent affirmations of Principal Life's insurer financial
strength ratings; and the quality and performance of the company's commercial real estate
holdings, and investment portfolio overall.
Investors who wish to be accurately informed of The Principal's financial condition should visit our
website at
www
.principal.com and review the documents that can be found at the Investor
Relations portion of the website.
·
Discussion by various commentators of annuities with living benefits, variously referred to
as guaranteed minimum income benefits or guaranteed minimum withdrawal benefits
("GMWB"), has created the impression that The Principal's exposure to this risk is similar
to that of other insurers. As CEO Larry Zimpleman explained at The Principal's third
quarter earnings call, a significant point that distinguishes The Principal from other
insurers is the small part GMWB plays in The Principal's business. With only $1 billion in
this block, equity market volatility has minimal impact on the capital necessary to support
The Principal's individual annuities business. Annuities with GMWB represented
approximately 1/2 of 1% of The Principal's third quarter 2008 earnings.
·
Commentators have speculated about the possibility of agency downgrades as a reason to
sell shares of U.S. life insurance companies. On November 7, 2008, Moody's Investors
Service
affirmed
The Principal's financial strength and debt ratings, all with stable
outlooks. In addition, Fitch
affirmed
The Principal's financial strength and debt ratings in
September 2008, all with stable outlooks.
In our third quarter earnings call, we acknowledged the possibility of downgrades in the
insurance sector and explained that, while strong relative ratings remain important to The
Principal, our key growth engines – U.S. Asset Accumulation, Principal Global Investors
and Principal International – could continue to operate successfully at a lower rating,
particularly if downgrades were industry wide.
·
Some reports have contained broad, negative comments about The Principal's commercial
real estate loan portfolio. As Chief Financial Officer Terry Lillis pointed out at our third
quarter earnings call, every single commercial mortgage loan in our $11 billion portfolio is
performing on schedule. In releasing third quarter 2008 results, we clearly communicated
that we anticipate defaults and losses on commercial mortgages will increase in the future.
However, we believe the increase will occur over a period of several years, and that we
will have the ability to accommodate these losses going forward through the use of a
number of capital management techniques. We would like to remind investors that our
Page 3
three key growth businesses require very little capital to support organic growth, which
enables us to generate substantial free cash flows on an ongoing basis. Because of strong
liquidity in our general account, we have the flexibility to selectively scale back on certain
capital intensive businesses to free up additional capital. In addition, we manage our
investment portfolio to match our liabilities, which, like others in the life insurance
industry (and different from other financial services industries), are longer-term in nature.
·
We continue to believe the fundamentals of our fixed maturity portfolio remain sound and
that gross unrealized losses are a highly inaccurate representation of future investment
losses. Given our strong general account liquidity position, the longer-term nature of our
liabilities and our disciplined asset-liability matching, we have the ability and intent to
hold assets until maturity.
·
As we stated at our November 4 earnings call, the company has continued to enhance
liquidity, increasing cash and cash equivalent holdings by more than 50% from June 30 to
$2.3 billion at the end of the third quarter. During the third quarter, we also made
adjustments in our general account investment strategies, investing new cash flows
primarily into government and agency backed securities, and other liquid investments. In
addition, we closed out our very modest general account securities lending program.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
PRINCIPAL FINANCIAL GROUP, INC.
By:
/s/ Terrance J. Lillis
Name: Terrance J. Lillis
Title: Senior Vice President and Chief Financial
Officer
Date:  November 18, 2008