497 1 vl497pnlvuliivsai102819file.htm VULI IV - DEFINITIVE SAI 102819 VL 497 PNL VULI IV SAI 102819 Combined Document

PART B
STATEMENT OF ADDITIONAL INFORMATION
PRINCIPAL® VARIABLE UNIVERSAL LIFE INCOME IV
dated October 28, 2019
This Statement of Additional Information provides information about the Principal® Variable Universal Life Income IV Insurance Policy (the “Policy”) sponsored by Principal National Life Insurance Company through its Principal National Life Insurance Company Variable Life Separate Account.
This Statement of Additional Information is not a prospectus but does provide information that supplements the Policy’s prospectus dated October 28, 2019. It should be read with that prospectus which is available without charge. To request a copy of the prospectus, please contact us at:
Principal® Variable Universal Life Income IV
Principal Financial Group
P.O. Box 10431
Des Moines, Iowa 50306-0431
Telephone: 1-800-247-9988
Fax: 1-866-885-0390






TABLE OF CONTENTS

 
Page
GENERAL INFORMATION AND HISTORY
The Company
Principal National Life Insurance Company Variable Life Separate Account
Administrative and Facilities Services
Independent Registered Public Accounting Firm
UNDERWRITERS
UNDERWRITING PROCEDURES
PERFORMANCE DATA
FINANCIAL STATEMENTS
APPENDIX A - Principal National Life Insurance Company - Variable Life Separate Account Financials
 
APPENDIX B - Principal National Life Insurance Company Financials
 



2


GENERAL INFORMATION AND HISTORY
The Company
Principal National Life Insurance Company (the “Company”) is the issuer of the Principal Variable Universal Life Income IV Insurance Policy (the “Policy”). The Company is a stock life insurance company with its home office at: Principal Financial Group, 711 High Street, Des Moines, Iowa 50306-0431. It is authorized to transact life insurance business in the District of Columbia and in every state except New York. The Company is a wholly-owned subsidiary of Principal Financial Services, Inc. (“PFS”), which in turn is a wholly owned subsidiary of Principal Financial Group, Inc.
The Progressive Corporation (“Progressive”), an Ohio corporation, organized the Company on November 6, 1967, as an Ohio domiciled life insurance company. PFS acquired control of the Company from Progressive pursuant to a Purchase and Sale Agreement dated August 22, 2003. PFS subsequently redomesticated the Company to Iowa and on October 21, 2003, changed the Company’s name from Progressive American Life Insurance Company to Principal Health Insurance Company. PFS originally intended to use the Company to sell group medical insurance and to provide third party administrative services to self-insured customers. However, PFS never used the Company for these purposes. PFS eventually determined that the best strategic use of the Company would be to offer and sell individual life insurance products. On October 16, 2007, PFS changed the Company’s name to Principal National Life Insurance Company to reflect this change in purpose.
Principal National Life Insurance Company Variable Life Separate Account
The Company’s board of directors established the Variable Life Separate Account (the “Separate Account”) under Iowa law on November 28, 2007. It is registered as a unit investment trust with the U.S. Securities and Exchange Commission (the “SEC”). This registration does not involve SEC supervision of the investments or investment policies of the Separate Account.
All of the units of the Separate Account are owned by the Company. Policy owners may purchase units of the divisions of the Separate Account.
Administrative and Facilities Services
Principal Life Insurance Company (“PLIC”) provides administrative support services and facilities to the Company. PLIC is a wholly-owned subsidiary of Principal Financial Services, Inc. and an affiliate of the Company. PLIC’s address is 711 High Street, Des Moines, Iowa, 50306-0431.
Independent Registered Public Accounting Firm
Ernst & Young LLP, 801 Grand Avenue, Suite 3000, Des Moines, Iowa, 50309, serves as the independent registered public accounting firm for the Company.
UNDERWRITERS
The principal underwriter of the Policy is Principal Securities, Inc. ("PSI") formerly Princor Financial Services Corporation which is a wholly-owned subsidiary of Principal Financial Services, Inc. and an affiliate of the Company. PSI’s address is Principal Securities, Inc., 655 9th Street, Des Moines, IA 50392. PSI was incorporated in Iowa in 1968, and is a securities broker-dealer registered with the SEC as well as a member of the Financial Institutions Regulatory Authority. The Policies may also be sold through other broker-dealers authorized by PSI and applicable law to do so.
The Company pays commissions on sales of the Policy of no more than 50% of premiums received in the first Policy Year (or the first year following an Adjustment) up to the Target Premium. In addition, a commission of up to 3.0% of premium above the Target Premium received in the first Policy Year (or first year following an Adjustment) may be paid. In the second through fifteenth years following the Policy Date (or Adjustment Date), commissions range from 0% to 2.0% of premiums received. PSI also receives 12b-1 fees in connection with purchases and sales of certain mutual funds underlying the Policies. The 12b-1 fees for the underlying mutual funds are shown in the prospectuses of each underlying mutual fund.
The Policy’s offering to the public is continuous. As the principal underwriter, PSI is paid for the distribution of the Policy. This is a new Policy and therefore does not have commissions information to disclose for the last three fiscal years.

3


UNDERWRITING PROCEDURES
Guaranteed maximum cost of insurance rates are based on 2001 CSO Unismoke Mortality Table (the prevailing mortality table approved by the National Association of Insurance Commissioners), age nearest birthday, with distinction for the insured's gender.
PERFORMANCE DATA
The Separate Account may publish advertisements containing information (including graphs, charts, tables and examples) about the performance of one or more of its divisions.
The Policy was not offered prior to October 28, 2019. The Separate Account may publish advertisements containing information about the hypothetical performance of one or more of its divisions for this Policy as if the Policy had been issued on or after the date the underlying mutual fund in which such division invests was first offered. The hypothetical performance from the date of the inception of the underlying mutual fund is derived by reducing the actual performance of the underlying mutual fund by the fees and charges of the Policy as if it had been in existence. The yield and total return figures described below vary depending upon market conditions, the composition of the underlying mutual fund’s portfolios and operating expenses. These factors and possible differences in the methods used in calculating yield and total return should be considered when comparing the Separate Account performance figures to performance figures published for other products. The Separate Account may also quote rankings, yields or returns published by independent statistical services or publishers and information regarding performance of certain market indices. Any performance data quoted for the Separate Account represents historical performance and is not intended to indicate future performance.
From time to time, the Separate Account or an underlying fund may advertise the “yield” and “effective yield” of a money market division or of the underlying fund in which it invests. Both yield figures are based on historical earnings and are not intended to indicate future performance. The “yield” of the division refers to the income generated in the division over a seven day period (the period will be stated in the advertisement). This income is then “annualized.” That is, the amount of income generated during that week is assumed to be generated each week over a 52-week period and is shown as a percentage. The “effective yield” is calculated similarly but, when annualized, the income earned in the division is assumed to be reinvested. The “effective yield” is slightly higher than the “yield” because of the compounding effect of this assumed reinvestment. Neither yield quotation reflects a sales load deducted from purchase payments which, if included, would reduce the “yield” and “effective yield.” For the period ended December 31, 2018, the 7-day annualized and effective yields of the Fidelity VIP Government Money Market Division were 2.10% and 2.10%, respectively.
In addition, the Separate Account advertises the “yield” for certain other divisions. The “yield” of a division is determined by annualizing the net investment income per unit for a specific, historical 30-day period and dividing the result by the ending maximum offering price of the unit for the same period. This yield quotation does not reflect a contingent deferred sales charge which, if included, would reduce the “yield.” No contingent deferred sales charge is assessed on investments in the Separate Account divisions of the Policy, however, Policies which are fully surrendered within the first fourteen policy years (or within fourteen years of a policy face amount increase) are subject to a surrender charge.
Performance history of the underlying mutual funds is measured by comparing the value of the underlying mutual fund at the beginning of the period to the value of the underlying mutual fund at the end of the period.
The Separate Account also advertises the average annual total return of its various divisions. The average annual total return for any of the divisions is computed by calculating the average annual compounded rate of return over the stated period that would equate an initial premium of $1,000 to the ending redeemable policy value.
The performance information does not include any charges or fees that are deducted from your Policy. These are charges and fees such as the sales charge, charge for taxes, surrender charges, transfer fees (if any), cost of insurance charge, asset based charge, monthly administrative charge, monthly policy issue charge, policy loan interest charge (if any), and charges for optional insurance benefits. Some of these charges vary depending on your age, gender, face amount, underwriting class, premiums, policy duration, and account value. All of these policy charges will have a significant impact on your Policy’s value and overall performance. If these charges and fees were reflected in the performance data, performance would be lower. To see the impact of these charges and fees on your Policy’s performance, you should obtain a personalized illustration based on historical underlying mutual fund performance from your financial adviser.

4


Following are the hypothetical average annual total returns for the periods ended December 31, 2018 assuming the Policy had been offered as of the effective dates of the underlying mutual funds in which the divisions invest:
Division
Effective
Date
One
Year
Five
Years
Ten
Years
Since
Inception
AllianceBernstein International Value
05/10/2001
-22.79
 %
-1.50
 %
4.04
%
 
AllianceBernstein Small Cap Growth
08/05/1996
-0.89
 %
6.53
 %
16.64
%
 
AllianceBernstein Small/Mid Cap Value
05/02/2001
-15.03
 %
4.42
 %
12.95
%
 
American Century VP Capital Appreciation
11/20/1987
-5.36
 %
5.46
 %
12.71
%
 
American Century VP Income & Growth
10/30/1997
-7.19
 %
5.95
 %
11.06
%
 
American Century VP Inflation Protection
12/31/2002
-2.82
 %
1.16
 %
3.03
%
 
American Century VP Mid Cap Value
10/29/2004
-12.96
 %
6.37
 %
12.15
%
 
American Century VP Value
05/01/1996
-9.28
 %
5.12
 %
10.19
%
 
American Funds Blue Chip Income and Growth
07/05/2001
-8.66
 %
7.28
 %
11.86
%
 
American Funds Global Balanced Fund
05/02/2011
-6.01
 %
3.40
 %
 
4.49
%
American Growth
02/08/1984
-0.25
 %
10.19
 %
14.72
%
 
American International
05/01/1990
-13.13
 %
2.01
 %
7.66
%
 
American New World
06/17/1999
-14.04
 %
0.89
 %
7.61
%
 
Calvert VP Investment Grade Bond Index
03/31/2003
-0.37
 %
2.31
 %
3.16
%
 
Calvert VP Russell 2000 Small Cap Index
04/27/2000
-11.46
 %
3.68
 %
11.08
%
 
Calvert VP S&P 500 Index
12/29/1995
-4.73
 %
8.10
 %
12.71
%
 
Calvert VP S&P MidCap 400 Index
05/03/1999
-11.57
 %
5.36
 %
12.87
%
 
ClearBridge Mid Cap
11/01/1999
-12.52
 %
3.60
 %
11.96
%
 
Core Plus Bond
12/18/1987
-1.41
 %
2.41
 %
5.67
%
 
Delaware Small Cap Value
05/01/2000
-16.94
 %
3.75
 %
11.95
%
 
Delaware VIP SMID Cap Core
05/01/2000
-12.40
 %
4.34
 %
15.18
%
 
Deutsche Small Mid Cap Value
05/01/1996
-16.32
 %
1.98
 %
9.61
%
 
Diversified International
05/02/1994
-17.54
 %
0.60
 %
6.50
%
 
Dreyfus IP MidCap Stock
12/29/2000
-15.68
 %
4.01
 %
12.91
%
 
Equity Income
04/28/1998
-5.01
 %
7.60
 %
11.80
%
 
Fidelity VIP Contrafund
01/03/1995
-6.64
 %
6.52
 %
12.37
%
 
Fidelity VIP Equity-Income
11/03/1986
-8.54
 %
4.73
 %
10.97
%
 
Fidelity VIP Gov't Money Market
07/07/2000
1.55
 %
0.45
 %
0.30
%
 
Fidelity VIP High Income
10/01/1985
-3.63
 %
2.67
 %
8.80
%
 
Fidelity VIP Mid Cap
12/28/1998
-14.77
 %
3.70
 %
11.58
%
 
Franklin Mutual Global Discovery VIP
11/08/1996
-11.22
 %
1.95
 %
7.88
%
 
Franklin Rising Dividends VIP
01/27/1992
-5.07
 %
6.83
 %
11.73
%
 
Franklin Small Cap Value VIP
05/01/1998
-12.88
 %
3.17
 %
11.63
%
 
Government & High Quality Bond
05/06/1993
0.91
 %
2.08
 %
3.16
%
 
International Emerging Markets
10/24/2000
-21.02
 %
0.19
 %
6.78
%
 
Invesco VI American Franchise
09/18/2000
-3.89
 %
7.13
 %
15.29
%
 
Invesco VI American Value
01/02/1997
-12.65
 %
2.04
 %
11.59
%
 
Invesco VI Core Equity
05/02/1994
-9.61
 %
2.62
 %
8.80
%
 
Invesco VI Global Health Care
05/22/1997
0.91
 %
5.02
 %
11.74
%
 
Invesco VI Mid Cap Core Equity
09/10/2001
-11.60
 %
2.72
 %
8.42
%
 
Janus Henderson Enterprise
09/13/1993
-0.66
 %
10.51
 %
16.33
%
 
Janus Henderson Forty
05/01/1997
1.72
 %
10.35
 %
14.40
%
 
LargeCap Growth
05/02/1994
-7.30
 %
6.71
 %
12.04
%
 
LargeCap Growth I
06/01/1994
3.60
 %
10.43
 %
16.83
%
 
LargeCap S&P 500 Index
05/03/1999
-4.58
 %
8.19
 %
12.79
%
 
Lord Abbett Developing Growth Portfolio
04/30/2010
4.88
 %
4.79
 %
 
12.14
%
Lord Abbett International Opportunities Portfolio
09/15/1999
-23.67
 %
1.27
 %
9.82
%
 

5


Division
Effective
Date
One
Year
Five
Years
Ten
Years
Since
Inception
MFS Blended Research SmallCap Equity Portfolio
04/28/2006
-5.35
 %
6.02
 %
13.60
%
 
MFS New Discovery
05/01/1998
-1.72
 %
4.11
 %
15.26
%
 
MFS New Discovery Value Portfolio
10/01/2008
-11.00
 %
5.39
 %
11.37
%
 
MFS Utilities
01/03/1995
0.81
 %
4.24
 %
10.41
%
 
MFS VIT Mid Cap Value
03/07/2008
-11.61
 %
4.47
 %
11.89
%
 
MidCap
12/18/1987
-6.55
 %
8.25
 %
15.64
%
 
Multi-Asset Income
07/28/2015
-5.63
 %
 
 
3.06
%
Neuberger Berman AMT Large Cap Value
03/22/1994
-1.04
 %
6.72
 %
12.98
%
 
Oppenheimer Main Street Small Cap
07/16/2001
-10.54
 %
4.69
 %
13.09
%
 
Principal Capital Appreciation
04/28/1998
-3.41
 %
7.90
 %
12.72
%
 
Principal LifeTime 2010
08/30/2004
-3.87
 %
3.15
 %
7.65
%
 
Principal LifeTime 2020
08/30/2004
-5.40
 %
3.77
 %
8.79
%
 
Principal LifeTime 2030
08/30/2004
-7.06
 %
4.07
 %
9.28
%
 
Principal LifeTime 2040
08/30/2004
-7.85
 %
4.31
 %
9.87
%
 
Principal LifeTime 2050
08/30/2004
-8.64
 %
4.44
 %
10.08
%
 
Principal LifeTime 2060
05/01/2013
-9.25
 %
4.26
 %
 
6.46
%
Principal LifeTime Strategic Income
08/30/2004
-3.00
 %
2.74
 %
6.10
%
 
Putnam VT Growth Opportunities
01/31/2000
2.38
 %
10.44
 %
15.34
%
 
Real Estate Securities
05/01/1998
-4.21
 %
8.91
 %
12.68
%
 
SAM Balanced
06/03/1997
-5.04
 %
4.37
 %
8.85
%
 
SAM Conservative Balanced
04/23/1998
-3.49
 %
3.81
 %
7.56
%
 
SAM Conservative Growth
06/03/1997
-6.62
 %
4.92
 %
9.93
%
 
SAM Flexible Income
09/09/1997
-1.97
 %
3.55
 %
6.88
%
 
SAM Strategic Growth
06/03/1997
-8.60
 %
4.86
 %
10.51
%
 
Short-Term Income
01/12/1994
1.02
 %
1.59
 %
2.93
%
 
SmallCap
05/01/1998
-10.89
 %
4.35
 %
12.11
%
 
Templeton Global Bond VIP
01/24/1989
1.94
 %
0.83
 %
5.08
%
 
TOPS Managed Balanced ETF
06/09/2011
-6.03
 %
1.67
 %
 
3.07
%
TOPS Managed Growth ETF
04/26/2011
-8.72
 %
0.86
 %
 
2.77
%
TOPS Managed Moderate Growth ETF
06/09/2011
-7.22
 %
1.57
 %
 
3.51
%
VanEck VIP Global Hard Assets
05/01/2006
-28.42
 %
-11.64
 %
0.29
%
 
Wanger International
05/03/1995
-17.70
 %
0.63
 %
9.39
%
 

6


FINANCIAL STATEMENTS

APPENDIX A - Principal National Life Insurance Company - Variable Life Separate Account Financials

7

 

Report of Independent Registered Public Accounting Firm

To the Board of Directors of Principal National Life Insurance Company and Contract Owners of Principal National Life Insurance Company Variable Life Separate Account

Opinion on the Financial Statements
We have audited the accompanying statements of assets and liabilities of each of the subaccounts listed in the Appendix that comprise Principal National Life Insurance Company Variable life Separate Account (the Separate Account), as of December 31, 2018, the related statements of operations and the statements of changes in net assets for each of the periods indicated in the Appendix, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each subaccount as of December 31, 2018, the results of its operations and the changes in its net assets for each of the periods indicated in the Appendix, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements are the responsibility of the Separate Account’s management. Our responsibility is to express an opinion on each of the subaccounts’ 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 Separate Account 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. 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. 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 procedures included confirmation of securities owned as of December 31, 2018, by correspondence with the fund companies or their transfer agents, as applicable. 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.
/s/ Ernst & Young LLP
We have served as the Separate Account’s auditor since 2010.
Des Moines, Iowa
April 26, 2019



Appendix:
Subaccounts comprising Principal National Life Insurance Company Variable Life Separate Account
Sub Account
Statement of operations
Statements of changes in net assets
AllianceBernstein International Value Class A Division
AllianceBernstein Small Cap Growth Class A Division
AllianceBernstein Small/Mid Cap Value Class A Division
American Century VP Capital Appreciation Class II Division
American Century VP Income & Growth Class II Division
American Century VP Inflation Protection Class II Division
American Century VP Mid Cap Value Class II Division
American Century VP Value Class II Division
American Funds Insurance Series Blue Chip Income and Growth Class 2 Division
American Funds Insurance Series Growth Fund Class 2 Division
American Funds Insurance Series International Fund Class 2 Division
American Funds Insurance Series New World Fund Class 2 Division
Calvert Investment Grade Bond Index Class I Division
Calvert Russell 2000 Small Cap Index Class F
Calvert S&P 500 Index Portfolio Division
Calvert S&P MidCap 400 Index Class F Division
ClearBridge Mid Cap Class I Division
Core Plus Bond Class 1 Division
Delaware Small Cap Value Service Class Division
Delaware Smid Cap Core Service Class Division
Diversified International Class 1 Division
Dreyfus IP MidCap Stock Service Shares Division
DWS Small Mid Cap Value Class B Division (1)
Equity Income Class 1 Division
Fidelity VIP Contrafund Service Class 2 Division
Fidelity VIP Equity-Income Service Class 2 Division
Fidelity VIP Government Money Market Service Class Division
Fidelity VIP High Income Service Class 2 Division
Fidelity VIP Mid Cap Service Class 2 Division
Franklin Mutual Global Discovery VIP Class 2 Division
Franklin Rising Dividends VIP Class 2 Division
Franklin Small Cap Value VIP Class 2 Division
Government & High Quality Bond Class 1 Division
International Emerging Markets Class 1 Division
Invesco American Franchise Series II Division
Invesco American Value Series I Division
Invesco Core Equity Series II Division
Invesco Health Care Series I Division (2)
Invesco Mid Cap Core Equity Series II Division
Janus Henderson Forty Service Shares Division
LargeCap Growth Class 1 Division
LargeCap Growth I Class 1 Division
LargeCap S&P 500 Index Class 1 Division
Lord Abbett Series Fund Developing Growth Class VC Division
Lord Abbett Series Fund International Opportunities Class VC Division
MFS Blended Research Small Cap Equity Service Class Division
MFS Mid Cap Value Portfolio Service Class Division
MFS New Discovery Value Service Class Division
MFS New Discovery Value Service Class Division
MFS Utilities Service Class Division
MidCap Class 1 Division
Multi-Asset Income Class 1 Division
Neuberger Berman AMT Large Cap Value Class I Division
Oppenheimer Main Street Small Cap Service Shares Division
Principal Capital Appreciation Class 1 Division
Principal LifeTime 2010 Class 1 Division
Principal LifeTime 2020 Class 1 Division
Principal LifeTime 2030 Class 1 Division
Principal LifeTime 2040 Class 1 Division
Principal LifeTime 2050 Class 1 Division
Principal LifeTime 2060 Class 1 Division
Principal LifeTime Strategic Income Class 1 Division
Putnam VT Growth Opportunities Class IB Division
Real Estate Securities Class 1 Division
For the year ended December 31, 2018
For each of the two years in the period ended December 31, 2018


SAM Balanced Portfolio Class 1 Division
SAM Conservative Balanced Portfolio Class 1 Division
SAM Conservative Growth Portfolio Class 1 Division
SAM Flexible Income Portfolio Class 1 Division
SAM Strategic Growth Portfolio Class 1 Division
Short-Term Income Class 1 Division
SmallCap Class 1 Division
Templeton Global Bond VIP Class 2 Division
TOPS Managed Risk Balanced ETF Class 2 Division
TOPS Managed Risk Growth ETF Class 2 Division
TOPS Managed Risk Moderate Growth ETF Class 2 Division
VanEck Global Hard Assets Class S Division
Wagner International Division
 
 
American Funds Insurance Series Global Balanced Fund Class 2 Division
Janus Henderson Enterprise Service Shares Division
For the period from June 11, 2018 (commencement of operations) through December 31, 2018
 
(1)
Represented the operations of Deutsche Small Mid Cap Value Class B Division until October 13, 2018
(2)
Represented the operations of Invesco Global Health Care Series I Division until June 9, 2018.









 


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities
December 31, 2018
 
 
AllianceBernstein International Value Class A Division
 
AllianceBernstein Small Cap Growth Class A Division
 
AllianceBernstein Small/Mid Cap Value Class A Division
 
American Century VP Capital Appreciation Class II Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at fair value
$
824,662

 
$
148,170

 
$
1,233,995

 
$
269,070

Total assets
 
824,662

 
 
148,170

 
$$
1,233,995

 
 
269,070

Total liabilities
 
—

 
 
—

 
$$
—

 
 
—

Net assets
$
824,662

 
$
148,170

 
$
1,233,995

 
$
269,070

 
 
 
 
 
 
 
$$
 
 
 
 
Net assets
 
 
 
 
 
 
$$
 
 
 
 
Applicable to accumulation units
$
824,662

 
$
148,170

 
$
1,233,995

 
$
269,070

Total net assets
$
824,662

 
$
148,170

 
$
1,233,995

 
$
269,070

 
 
 
 
 
 
 
 
$$
 
 
 
 
Investments in shares of mutual funds, at cost
$
978,091

 
$
143,595

 
$
1,448,160

 
$
281,567

 
 
 
 
 
 
 
 
$$
 
 
 
 
Shares of mutual funds owned
 
66,612

 
 
8,937

 
$$
72,888

 
 
19,137

 
 
 
 
 
 
 
$$
 
 
 
 
Accumulation units outstanding
 
117,475

 
 
5,800

 
$$
56,842

 
 
20,454

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
Year ended December 31, 2018
 
 
AllianceBernstein International Value Class A Division
 
AllianceBernstein Small Cap Growth Class A Division
 
AllianceBernstein Small/Mid Cap Value Class A Division
 
American Century VP Capital Appreciation Class II Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
 
 
 
 
 
 
 
 
 
 
Investment income:
 
 
 
 
 
 
 
 
 
 
 
 
Dividends
$
14,620

 
$
—

 
$
6,387

 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
Mortality and expense risks
 
—

 
 
—

 
 
—

 
 
—

Net investment income (loss)
 
14,620

 
 
—

 
 
6,387

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on investments
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on sale of fund shares
 
2,443

 
 
(2,492)

 
 
(122)

 
 
886

Capital gains distributions
 
—

 
 
7,758

 
 
106,557

 
 
1,230

Total realized gains (losses) on investments
 
2,443

 
 
5,266

 
 
106,435

 
 
2,116

 
 
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(251,282)

 
 
(9,550)

 
 
(331,695)

 
 
(21,119)

 
 
 
 
 
 
 
 
 
 
 
 
 
Net gains (losses) on investments
 
(234,219)

 
 
(4,284)

 
 
(218,873)

 
 
(19,003)

 
 
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(234,219)

 
$
(4,284)

 
$
(218,873)

 
$
(19,003)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities
December 31, 2018
 
 
American Century VP Income & Growth Class II Division
 
American Century VP Inflation Protection Class II Division
 
American Century VP Mid Cap Value Class II Division
 
American Century VP Value Class II Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at fair value
$
752,031

 
$
547,384

 
$
1,650,645

 
$
948,884

Total assets
 
752,031

 
 
547,384

 
 
1,650,645

 
 
948,884

Total liabilities
 
—

 
 
—

 
 
—

 
 
—

Net assets
$
752,031

 
$
547,384

 
$
1,650,645

 
$
948,884

 
 
 
 
 
 
 
 
 
 
 
 
Net assets
 
 
 
 
 
 
 
 
 
 
 
Applicable to accumulation units
$
752,031

 
$
547,384

 
$
1,650,645

 
$
948,884

Total net assets
$
752,031

 
$
547,384

 
$
1,650,645

 
$
948,884

 
 
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at cost
$
806,894

 
$
576,059

 
$
1,837,263

 
$
952,268

 
 
 
 
 
 
 
 
 
 
 
 
 
Shares of mutual funds owned
 
83,373

 
 
56,782

 
 
90,101

 
 
94,699

 
 
 
 
 
 
 
 
 
 
 
 
Accumulation units outstanding
 
28,006

 
 
45,846

 
 
57,798

 
 
33,500

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
Year ended December 31, 2018
 
 
American Century VP Income & Growth Class II Division
 
American Century VP Inflation Protection Class II Division
 
American Century VP Mid Cap Value Class II Division
 
American Century VP Value Class II Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
 
 
 
 
 
 
 
 
 
 
Investment income:
 
 
 
 
 
 
 
 
 
 
 
 
Dividends
$
13,118

 
$
14,272

 
$
21,934

 
$
15,564

 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
Mortality and expense risks
 
—

 
 
—

 
 
—

 
 
—

Net investment income (loss)
 
13,118

 
 
14,272

 
 
21,934

 
 
15,564

 
 
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on investments
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on sale of fund shares
 
1,573

 
 
(1,384)

 
 
8,205

 
 
34,032

Capital gains distributions
 
55,611

 
 
—

 
 
99,156

 
 
64

Total realized gains (losses) on investments
 
57,184

 
 
(1,384)

 
 
107,361

 
 
34,096

 
 
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(132,768)

 
 
(26,675)

 
 
(370,253)

 
 
(147,547)

 
 
 
 
 
 
 
 
 
 
 
 
 
Net gains (losses) on investments
 
(62,466)

 
 
(13,787)

 
 
(240,958)

 
 
(97,887)

 
 
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(62,466)

 
$
(13,787)

 
$
(240,958)

 
$
(97,887)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities
December 31, 2018
 
 
American Funds Insurance Series Blue Chip Income and Growth
Class 2 Division
 
American Funds Insurance Series Global Balanced Fund Class 2 Division (1)
 
American Funds Insurance Series Growth Fund Class 2 Division
 
American Funds Insurance Series International Fund Class 2 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at fair value
$
1,229,539

 
$
6,326

 
$
2,377,751

 
$
1,068,234

Total assets
 
1,229,539

 
 
6,326

 
 
2,377,751

 
 
1,068,234

Total liabilities
 
—

 
 
—

 
 
—

 
 
—

Net assets
$
1,229,539

 
$
6,326

 
$
2,377,751

 
$
1,068,234

 
 
 
 
 
 
 
 
 
 
 
 
Net assets
 
 
 
 
 
 
 
 
 
 
 
Applicable to accumulation units
$
1,229,539

 
$
6,326

 
$
2,377,751

 
$
1,068,234

Total net assets
$
1,229,539

 
$
6,326

 
$
2,377,751

 
$
1,068,234

 
 
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at cost
$
1,386,498

 
$
6,847

 
$
2,506,868

 
$
1,167,072

 
 
 
 
 
 
 
 
 
 
 
 
 
Shares of mutual funds owned
 
100,453

 
 
543

 
 
34,222

 
 
60,695

 
 
 
 
 
 
 
 
 
 
 
 
Accumulation units outstanding
 
103,651

 
 
681

 
 
145,040

 
 
98,083

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
Year ended December 31, 2018
 
 
American Funds Insurance Series Blue Chip Income and Growth
Class 2 Division
 
American Funds Insurance Series Global Balanced Fund Class 2 Division (1)
 
American Funds Insurance Series Growth Fund Class 2 Division
 
American Funds Insurance Series International Fund Class 2 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
 
 
 
 
 
 
 
 
 
 
Investment income:
 
 
 
 
 
 
 
 
 
 
 
 
Dividends
$
24,960

 
$
83

 
$
10,809

 
$
19,581

 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
Mortality and expense risks
 
—

 
 
—

 
 
—

 
 
—

Net investment income (loss)
 
24,960

 
 
83

 
 
10,809

 
 
19,581

 
 
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on investments
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on sale of fund shares
 
3,122

 
 
(3)

 
 
23,340

 
 
13,738

Capital gains distributions
 
91,639

 
 
74

 
 
229,720

 
 
50,951

Total realized gains (losses) on investments
 
94,761

 
 
71

 
 
253,060

 
 
64,689

 
 
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(236,446)

 
 
(521)

 
 
(306,660)

 
 
(236,504)

 
 
 
 
 
 
 
 
 
 
 
 
 
Net gains (losses) on investments
 
(116,725)

 
 
(367)

 
 
(42,791)

 
 
(152,234)

 
 
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(116,725)

 
$
(367)

 
$
(42,791)

 
$
(152,234)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Commencement of operations, June 11, 2018.
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities
December 31, 2018
 
 
American Funds Insurance Series New World Fund Class 2 Division
 
Calvert Investment Grade Bond Index Class I Division
 
Calvert Russell 2000 Small Cap Index Class F
 
Calvert S&P 500 Index Portfolio Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at fair value
$
852,610

 
$
751,407

 
$
1,061,307

 
$
242,221

Total assets
 
852,610

 
 
751,407

 
 
1,061,307

 
 
242,221

Total liabilities
 
—

 
 
—

 
 
—

 
 
—

Net assets
$
852,610

 
$
751,407

 
$
1,061,307

 
$
242,221

 
 
 
 
 
 
 
 
 
 
 
 
Net assets
 
 
 
 
 
 
 
 
 
 
 
Applicable to accumulation units
$
852,610

 
$
751,407

 
$
1,061,307

 
$
242,221

Total net assets
$
852,610

 
$
751,407

 
$
1,061,307

 
$
242,221

 
 
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at cost
$
921,051

 
$
782,073

 
$
1,217,285

 
$
254,822

 
 
 
 
 
 
 
 
 
 
 
 
 
Shares of mutual funds owned
 
41,011

 
 
14,175

 
 
14,935

 
 
1,966

 
 
 
 
 
 
 
 
 
 
 
 
Accumulation units outstanding
 
81,973

 
 
68,715

 
 
49,050

 
 
16,758

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
Year ended December 31, 2018
 
 
American Funds Insurance Series New World Fund Class 2 Division
 
Calvert Investment Grade Bond Index Class I Division
 
Calvert Russell 2000 Small Cap Index Class F
 
Calvert S&P 500 Index Portfolio Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
 
 
 
 
 
 
 
 
 
 
Investment income:
 
 
 
 
 
 
 
 
 
 
 
 
Dividends
$
7,893

 
$
22,920

 
$
12,936

 
$
5,062

 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
Mortality and expense risks
 
—

 
 
—

 
 
—

 
 
—

Net investment income (loss)
 
7,893

 
 
22,920

 
 
12,936

 
 
5,062

 
 
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on investments
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on sale of fund shares
 
5,772

 
 
(927)

 
 
2,818

 
 
5,039

Capital gains distributions
 
23,031

 
 
—

 
 
58,950

 
 
18,179

Total realized gains (losses) on investments
 
28,803

 
 
(927)

 
 
61,768

 
 
23,218

 
 
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(171,826)

 
 
(22,454)

 
 
(228,006)

 
 
(42,129)

 
 
 
 
 
 
 
 
 
 
 
 
 
Net gains (losses) on investments
 
(135,130)

 
 
(461)

 
 
(153,302)

 
 
(13,849)

 
 
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(135,130)

 
$
(461)

 
$
(153,302)

 
$
(13,849)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities
December 31, 2018
 
 
Calvert S&P MidCap 400 Index Class F Division
 
ClearBridge Mid Cap Class I Division
 
Core Plus Bond Class 1 Division
 
Delaware Small Cap Value Service Class Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at fair value
$
1,744,469

 
$
182,744

 
$
1,458,054

 
$
1,110,681

Total assets
 
1,744,469

 
 
182,744

 
 
1,458,054

 
 
1,110,681

Total liabilities
 
—

 
 
—

 
 
—

 
 
—

Net assets
$
1,744,469

 
$
182,744

 
$
1,458,054

 
$
1,110,681

 
 
 
 
 
 
 
 
 
 
 
 
Net assets
 
 
 
 
 
 
 
 
 
 
 
Applicable to accumulation units
$
1,744,469

 
$
182,744

 
$
1,458,054

 
$
1,110,681

Total net assets
$
1,744,469

 
$
182,744

 
$
1,458,054

 
$
1,110,681

 
 
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at cost
$
1,962,497

 
$
203,151

 
$
1,519,378

 
$
1,303,841

 
 
 
 
 
 
 
 
 
 
 
 
 
Shares of mutual funds owned
 
17,855

 
 
10,588

 
 
134,880

 
 
34,091

 
 
 
 
 
 
 
 
 
 
 
 
Accumulation units outstanding
 
81,509

 
 
17,714

 
 
56,536

 
 
49,807

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
Year ended December 31, 2018
 
 
Calvert S&P MidCap 400 Index Class F Division
 
ClearBridge Mid Cap Class I Division
 
Core Plus Bond Class 1 Division
 
Delaware Small Cap Value Service Class Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
 
 
 
 
 
 
 
 
 
 
Investment income:
 
 
 
 
 
 
 
 
 
 
 
 
Dividends
$
22,058

 
$
1,039

 
$
48,549

 
$
6,694

 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
Mortality and expense risks
 
—

 
 
—

 
 
—

 
 
—

Net investment income (loss)
 
22,058

 
 
1,039

 
 
48,549

 
 
6,694

 
 
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on investments
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on sale of fund shares
 
5,045

 
 
976

 
 
(5,032)

 
 
977

Capital gains distributions
 
114,296

 
 
3,637

 
 
—

 
 
80,056

Total realized gains (losses) on investments
 
119,341

 
 
4,613

 
 
(5,032)

 
 
81,033

 
 
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(379,324)

 
 
(32,161)

 
 
(57,804)

 
 
(304,611)

 
 
 
 
 
 
 
 
 
 
 
 
 
Net gains (losses) on investments
 
(237,925)

 
 
(26,509)

 
 
(14,287)

 
 
(216,884)

 
 
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(237,925)

 
$
(26,509)

 
$
(14,287)

 
$
(216,884)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities
December 31, 2018
 
 
Delaware Smid Cap Core Service Class Division
 
Diversified International
Class 1 Division
 
Dreyfus IP MidCap Stock Service Shares Division
 
DWS Small Mid Cap Value Class B Division (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at fair value
$
1,319,539

 
$
2,052,828

 
$
195,288

 
$
236,014

Total assets
 
1,319,539

 
 
2,052,828

 
 
195,288

 
 
236,014

Total liabilities
 
—

 
 
—

 
 
—

 
 
—

Net assets
$
1,319,539

 
$
2,052,828

 
$
195,288

 
$
236,014

 
 
 
 
 
 
 
 
 
 
 
 
Net assets
 
 
 
 
 
 
 
 
 
 
 
Applicable to accumulation units
$
1,319,539

 
$
2,052,828

 
$
195,288

 
$
236,014

Total net assets
$
1,319,539

 
$
2,052,828

 
$
195,288

 
$
236,014

 
 
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at cost
$
1,815,818

 
$
2,267,863

 
$
229,891

 
$
307,764

 
 
 
 
 
 
 
 
 
 
 
 
 
Shares of mutual funds owned
 
75,316

 
 
149,623

 
 
11,687

 
 
19,346

 
 
 
 
 
 
 
 
 
 
 
 
Accumulation units outstanding
 
73,738

 
 
78,074

 
 
16,203

 
 
12,621

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
Year ended December 31, 2018
 
 
Delaware Smid Cap Core Service Class Division
 
Diversified International
Class 1 Division
 
Dreyfus IP MidCap Stock Service Shares Division
 
DWS Small Mid Cap Value Class B Division (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
 
 
 
 
 
 
 
 
 
 
Investment income:
 
 
 
 
 
 
 
 
 
 
 
 
Dividends
$
—

 
$
49,419

 
$
529

 
$
2,601

 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
Mortality and expense risks
 
—

 
 
—

 
 
—

 
 
—

Net investment income (loss)
 
—

 
 
49,419

 
 
529

 
 
2,601

 
 
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on investments
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on sale of fund shares
 
(24,188)

 
 
14,028

 
 
53

 
 
(3,308)

Capital gains distributions
 
441,986

 
 
—

 
 
18,339

 
 
45,961

Total realized gains (losses) on investments
 
417,798

 
 
14,028

 
 
18,392

 
 
42,653

 
 
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(600,993)

 
 
(486,302)

 
 
(53,642)

 
 
(90,761)

 
 
 
 
 
 
 
 
 
 
 
 
 
Net gains (losses) on investments
 
(183,195)

 
 
(422,855)

 
 
(34,721)

 
 
(45,507)

 
 
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(183,195)

 
$
(422,855)

 
$
(34,721)

 
$
(45,507)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Represented the operations of Deutsche Small Mid Cap Value Class B Division until October 13, 2018.
 
See accompanying notes.


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities
December 31, 2018
 
 
Equity Income Class 1 Division
 
Fidelity VIP Contrafund Service Class 2 Division
 
Fidelity VIP Equity-Income Service Class 2 Division
 
Fidelity VIP Government Money Market Service Class Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at fair value
$
4,172,283

 
$
5,469,453

 
$
992,320

 
$
6,067,517

Total assets
 
4,172,283

 
 
5,469,453

 
 
992,320

 
 
6,067,517

Total liabilities
 
—

 
 
—

 
 
—

 
 
—

Net assets
$
4,172,283

 
$
5,469,453

 
$
992,320

 
$
6,067,517

 
 
 
 
 
 
 
 
 
 
 
 
Net assets
 
 
 
 
 
 
 
 
 
 
 
Applicable to accumulation units
$
4,172,283

 
$
5,469,453

 
$
992,320

 
$
6,067,517

Total net assets
$
4,172,283

 
$
5,469,453

 
$
992,320

 
$
6,067,517

 
 
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at cost
$
4,374,039

 
$
5,884,576

 
$
1,062,651

 
$
6,067,516

 
 
 
 
 
 
 
 
 
 
 
 
 
Shares of mutual funds owned
 
182,514

 
 
174,687

 
 
49,991

 
 
6,067,516

 
 
 
 
 
 
 
 
 
 
 
 
Accumulation units outstanding
 
197,059

 
 
153,079

 
 
40,930

 
 
593,470

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
Year ended December 31, 2018
 
 
Equity Income Class 1 Division
 
Fidelity VIP Contrafund Service Class 2 Division
 
Fidelity VIP Equity-Income Service Class 2 Division
 
Fidelity VIP Government Money Market Service Class Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
 
 
 
 
 
 
 
 
 
 
Investment income:
 
 
 
 
 
 
 
 
 
 
 
 
Dividends
$
42,919

 
$
25,295

 
$
21,924

 
$
84,818

 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
Mortality and expense risks
 
—

 
 
—

 
 
—

 
 
—

Net investment income (loss)
 
42,919

 
 
25,295

 
 
21,924

 
 
84,818

 
 
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on investments
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on sale of fund shares
 
13,974

 
 
1,889

 
 
(8,800)

 
 
—

Capital gains distributions
 
132,739

 
 
439,872

 
 
45,426

 
 
—

Total realized gains (losses) on investments
 
146,713

 
 
441,761

 
 
36,626

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(444,185)

 
 
(886,065)

 
 
(147,728)

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Net gains (losses) on investments
 
(254,553)

 
 
(419,009)

 
 
(89,178)

 
 
84,818

 
 
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(254,553)

 
$
(419,009)

 
$
(89,178)
 
$
84,818

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities
December 31, 2018
 
 
Fidelity VIP High Income Service Class 2 Division
 
Fidelity VIP Mid Cap Service
Class 2 Division
 
Franklin Mutual Global Discovery VIP Class 2 Division
 
Franklin Rising Dividends VIP Class 2 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at fair value
$
2,089,056

 
$
3,025,792

 
$
1,622,902

 
$
2,049,422

Total assets
 
2,089,056

 
 
3,025,792

 
 
1,622,902

 
 
2,049,422

Total liabilities
 
—

 
 
—

 
 
—

 
 
—

Net assets
$
2,089,056

 
$
3,025,792

 
$
1,622,902

 
$
2,049,422

 
 
 
 
 
 
 
 
 
 
 
 
Net assets
 
 
 
 
 
 
 
 
 
 
 
Applicable to accumulation units
$
2,089,056

 
$
3,025,792

 
$
1,622,902

 
$
2,049,422

Total net assets
$
2,089,056

 
$
3,025,792

 
$
1,622,902

 
$
2,049,422

 
 
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at cost
$
2,275,073

 
$
3,432,537

 
$
1,905,823

 
$
2,158,265

 
 
 
 
 
 
 
 
 
 
 
 
 
Shares of mutual funds owned
 
436,129

 
 
103,552

 
 
95,746

 
 
81,846

 
 
 
 
 
 
 
 
 
 
 
 
Accumulation units outstanding
 
72,172

 
 
74,400

 
 
51,894

 
 
66,301

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
Year ended December 31, 2018
 
 
Fidelity VIP High Income Service Class 2 Division
 
Fidelity VIP Mid Cap Service
Class 2 Division
 
Franklin Mutual Global Discovery VIP Class 2 Division
 
Franklin Rising Dividends VIP Class 2 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
 
 
 
 
 
 
 
 
 
 
Investment income:
 
 
 
 
 
 
 
 
 
 
 
 
Dividends
$
119,620

 
$
13,835

 
$
42,454

 
$
26,312

 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
Mortality and expense risks
 
—

 
 
—

 
 
—

 
 
—

Net investment income (loss)
 
119,620

 
 
13,835

 
 
42,454

 
 
26,312

 
 
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on investments
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on sale of fund shares
 
(6,916)

 
 
(4,079)

 
 
(19,832)

 
 
632

Capital gains distributions
 
—

 
 
262,372

 
 
22,493

 
 
127,441

Total realized gains (losses) on investments
 
(6,916)

 
 
258,293

 
 
2,661

 
 
128,073

 
 
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(191,168)

 
 
(801,439)

 
 
(247,653)

 
 
(268,397)

 
 
 
 
 
 
 
 
 
 
 
 
 
Net gains (losses) on investments
 
(78,464)

 
 
(529,311)

 
 
(202,538)

 
 
(114,012)

 
 
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(78,464)

 
$
(529,311)

 
$
(202,538)

 
$
(114,012)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities
December 31, 2018
 
 
Franklin Small Cap Value VIP Class 2 Division
 
Government & High Quality Bond Class 1 Division
 
International Emerging Markets Class 1 Division
 
Invesco American Franchise Series II Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at fair value
$
578,248

 
$
1,430,287

 
$
2,516,278

 
$
141,673

Total assets
 
578,248

 
 
1,430,287

 
 
2,516,278

 
 
141,673

Total liabilities
 
—

 
 
—

 
 
—

 
 
—

Net assets
$
578,248

 
$
1,430,287

 
$
2,516,278

 
$
141,673

 
 
 
 
 
 
 
 
 
 
 
 
Net assets
 
 
 
 
 
 
 
 
 
 
 
Applicable to accumulation units
$
578,248

 
$
1,430,287

 
$
2,516,278

 
$
141,673

Total net assets
$
578,248

 
$
1,430,287

 
$
2,516,278

 
$
141,673

 
 
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at cost
$
710,186

 
$
1,512,473

 
$
2,675,054

 
$
152,388

 
 
 
 
 
 
 
 
 
 
 
 
 
Shares of mutual funds owned
 
39,606

 
 
151,033

 
 
166,421

 
 
2,581

 
 
 
 
 
 
 
 
 
 
 
 
Accumulation units outstanding
 
17,637

 
 
103,679

 
 
69,668

 
 
7,373

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
Year ended December 31, 2018
 
 
Franklin Small Cap Value VIP Class 2 Division
 
Government & High Quality Bond Class 1 Division
 
International Emerging Markets Class 1 Division
 
Invesco American Franchise Series II Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
 
 
 
 
 
 
 
 
 
 
Investment income:
 
 
 
 
 
 
 
 
 
 
 
 
Dividends
$
4,804

 
$
51,545

 
$
33,377

 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
Mortality and expense risks
 
—

 
 
—

 
 
—

 
 
—

Net investment income (loss)
 
4,804

 
 
51,545

 
 
33,377

 
 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on investments
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on sale of fund shares
 
(5,609)

 
 
(5,335)

 
 
26,253

 
 
4,919

Capital gains distributions
 
81,805

 
 
—

 
 
—

 
 
10,255

Total realized gains (losses) on investments
 
76,196

 
 
(5,335)

 
 
26,253

 
 
15,174

 
 
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(165,560)

 
 
(30,301)

 
 
(682,459)

 
 
(23,512)

 
 
 
 
 
 
 
 
 
 
 
 
 
Net gains (losses) on investments
 
(84,560)

 
 
15,909

 
 
(622,829)

 
 
(8,338)

 
 
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(84,560)

 
$
15,909

 
$
(622,829)

 
$
(8,338)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities
December 31, 2018
 
 
Invesco American Value Series I Division
 
Invesco Core Equity Series II Division
 
Invesco Health Care Series I Division (1)
 
Invesco Mid Cap Core Equity
Series II Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at fair value
$
52,060

 
$
151,813

 
$
2,299,838

 
$
397,745

Total assets
 
52,060

 
 
151,813

 
 
2,299,838

 
 
397,745

Total liabilities
 
—

 
 
—

 
 
—

 
 
—

Net assets
$
52,060

 
$
151,813

 
$
2,299,838

 
$
397,745

 
 
 
 
 
 
 
 
 
 
 
 
Net assets
 
 
 
 
 
 
 
 
 
 
 
Applicable to accumulation units
$
52,060

 
$
151,813

 
$
2,299,838

 
$
397,745

Total net assets
$
52,060

 
$
151,813

 
$
2,299,838

 
$
397,745

 
 
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at cost
$
61,428

 
$
175,649

 
$
2,814,488

 
$
477,208

 
 
 
 
 
 
 
 
 
 
 
 
 
Shares of mutual funds owned
 
3,756

 
 
4,952

 
 
98,242

 
 
37,103

 
 
 
 
 
 
 
 
 
 
 
 
Accumulation units outstanding
 
5,390

 
 
5,045

 
 
80,661

 
 
20,193

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
Year ended December 31, 2018
 
 
Invesco American Value Series I Division
 
Invesco Core Equity Series II Division
 
Invesco Health Care Series I Division (1)
 
Invesco Mid Cap Core Equity
Series II Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
 
 
 
 
 
 
 
 
 
 
Investment income:
 
 
 
 
 
 
 
 
 
 
 
 
Dividends
$
283

 
$
—

 
$
—

 
$
499

 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
Mortality and expense risks
 
—

 
 
—

 
 
—

 
 
—

Net investment income (loss)
 
283

 
 
—

 
 
—

 
 
499

 
 
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on investments
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on sale of fund shares
 
467

 
 
4,883

 
 
(30,881)

 
 
(1,333)

Capital gains distributions
 
8,081

 
 
10,889

 
 
304,278

 
 
63,915

Total realized gains (losses) on investments
 
8,548

 
 
15,772

 
 
273,397

 
 
62,582

 
 
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized appreciation or (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(16,592)

 
 
(30,507)

 
 
(268,180)

 
 
(115,821)

 
 
 
 
 
 
 
 
 
 
 
 
 
Net gains (losses) on investments
 
(7,761)

 
 
(14,735)

 
 
5,217

 
 
(52,740)

 
 
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(7,761)

 
$
(14,735)

 
$
5,217

 
$
(52,740)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Represented the operations of Invesco Global Health Care Series I Division until June 9, 2018.
 
See accompanying notes.


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities
December 31, 2018
 
 
Janus Henderson Enterprise Service Shares Division (1)
 
Janus Henderson Forty Service Shares Division
 
LargeCap Growth Class 1 Division
 
LargeCap Growth I Class 1 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at fair value
$
28,976

 
$
2,182,015

 
$
1,283,144

 
$
2,587,369

Total assets
 
28,976

 
 
2,182,015

 
 
1,283,144

 
 
2,587,369

Total liabilities
 
—

 
 
—

 
 
—

 
 
—

Net assets
$
28,976

 
$
2,182,015

 
$
1,283,144

 
$
2,587,369

 
 
 
 
 
 
 
 
 
 
 
 
Net assets
 
 
 
 
 
 
 
 
 
 
 
Applicable to accumulation units
$
28,976

 
$
2,182,015

 
$
1,283,144

 
$
2,587,369

Total net assets
$
28,976

 
$
2,182,015

 
$
1,283,144

 
$
2,587,369

 
 
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at cost
$
31,829

 
$
2,307,807

 
$
1,279,695

 
$
2,476,661

 
 
 
 
 
 
 
 
 
 
 
 
 
Shares of mutual funds owned
 
460

 
 
65,822

 
 
45,421

 
 
85,959

 
 
 
 
 
 
 
 
 
 
 
 
Accumulation units outstanding
 
833

 
 
97,198

 
 
42,368

 
 
48,215

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
Year ended December 31, 2018
 
 
Janus Henderson Enterprise Service Shares Division (1)
 
Janus Henderson Forty Service Shares Division
 
LargeCap Growth Class 1 Division
 
LargeCap Growth I Class 1 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
 
 
 
 
 
 
 
 
 
 
Investment income:
 
 
 
 
 
 
 
 
 
 
 
 
Dividends
$
2

 
$
26,679

 
$
3,104

 
$
937

 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
Mortality and expense risks
 
—

 
 
—

 
 
—

 
 
—

Net investment income (loss)
 
2

 
 
26,679

 
 
3,104

 
 
937

 
 
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on investments
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on sale of fund shares
 
(12)

 
 
559

 
 
32,962

 
 
22,606

Capital gains distributions
 
—

 
 
286,634

 
 
104,080

 
 
191,161

Total realized gains (losses) on investments
 
(12)

 
 
287,193

 
 
137,042

 
 
213,767

 
 
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(2,853)

 
 
(314,038)

 
 
(253,523)

 
 
(172,108)

 
 
 
 
 
 
 
 
 
 
 
 
 
Net gains (losses) on investments
 
(2,863)

 
 
(166)

 
 
(113,377)

 
 
42,596

 
 
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(2,863)

 
$
(166)

 
$
(113,377)

 
$
42,596

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Commencement of operations, June 11, 2018.
 
See accompanying notes.


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities
December 31, 2018
 
 
LargeCap S&P 500 Index Class 1 Division
 
Lord Abbett Series Fund Developing Growth Class VC Division
 
Lord Abbett Series Fund International Opportunities Class VC Division
 
MFS Blended Research Small Cap Equity Service Class Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at fair value
$
9,860,173

 
$
172,182

 
$
257,338

 
$
58,970

Total assets
 
9,860,173

 
 
172,182

 
 
257,338

 
 
58,970

Total liabilities
 
—

 
 
—

 
 
—

 
 
—

Net assets
$
9,860,173

 
$
172,182

 
$
257,338

 
$
58,970

 
 
 
 
 
 
 
 
 
 
 
 
Net assets
 
 
 
 
 
 
 
 
 
 
 
Applicable to accumulation units
$
9,860,173

 
$
172,182

 
$
257,338

 
$
58,970

Total net assets
$
9,860,173

 
$
172,182

 
$
257,338

 
$
58,970

 
 
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at cost
$
9,576,585

 
$
228,458

 
$
367,825

 
$
70,285

 
 
 
 
 
 
 
 
 
 
 
 
 
Shares of mutual funds owned
 
601,597

 
 
6,896

 
 
40,146

 
 
5,400

 
 
 
 
 
 
 
 
 
 
 
 
Accumulation units outstanding
 
384,576

 
 
11,371

 
 
24,776

 
 
4,573

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
Year ended December 31, 2018
 
 
LargeCap S&P 500 Index Class 1 Division
 
Lord Abbett Series Fund Developing Growth Class VC Division
 
Lord Abbett Series Fund International Opportunities Class VC Division
 
MFS Blended Research Small Cap Equity Service Class Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
 
 
 
 
 
 
 
 
 
 
Investment income:
 
 
 
 
 
 
 
 
 
 
 
 
Dividends
$
176,022

 
$
—

 
$
2,796

 
$
360

 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
Mortality and expense risks
 
—

 
 
—

 
 
—

 
 
—

Net investment income (loss)
 
176,022

 
 
—

 
 
2,796

 
 
360

 
 
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on investments
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on sale of fund shares
 
59,898

 
 
737

 
 
271

 
 
1,552

Capital gains distributions
 
356,341

 
 
25,539

 
 
35,856

 
 
7,537

Total realized gains (losses) on investments
 
416,239

 
 
26,276

 
 
36,127

 
 
9,089

 
 
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(1,113,951)

 
 
(56,721)

 
 
(109,375)

 
 
(12,533)

 
 
 
 
 
 
 
 
 
 
 
 
 
Net gains (losses) on investments
 
(521,690)

 
 
(30,445)

 
 
(70,452)

 
 
(3,084)

 
 
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(521,690)

 
$
(30,445)

 
$
(70,452)

 
$
(3,084)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities
December 31, 2018
 
 
MFS Mid Cap Value Portfolio Service Class Division
 
MFS New Discovery Service Class Division
 
MFS New Discovery Value Service Class Division
 
MFS Utilities Service Class Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at fair value
$
449,586

 
$
521,130

 
$
92,037

 
$
1,924,273

Total assets
 
449,586

 
 
521,130

 
 
92,037

 
 
1,924,273

Total liabilities
 
—

 
 
—

 
 
—

 
 
—

Net assets
$
449,586

 
$
521,130

 
$
92,037

 
$
1,924,273

 
 
 
 
 
 
 
 
 
 
 
 
Net assets
 
 
 
 
 
 
 
 
 
 
 
Applicable to accumulation units
$
449,586

 
$
521,130

 
$
92,037

 
$
1,924,273

Total net assets
$
449,586

 
$
521,130

 
$
92,037

 
$
1,924,273

 
 
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at cost
$
518,523

 
$
573,021

 
$
117,866

 
$
1,959,671

 
 
 
 
 
 
 
 
 
 
 
 
 
Shares of mutual funds owned
 
61,168

 
 
32,755

 
 
10,983

 
 
66,676

 
 
 
 
 
 
 
 
 
 
 
 
Accumulation units outstanding
 
41,971

 
 
15,964

 
 
7,450

 
 
112,828

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
Year ended December 31, 2018
 
 
MFS Mid Cap Value Portfolio Service Class Division
 
MFS New Discovery Service Class Division
 
MFS New Discovery Value Service Class Division
 
MFS Utilities Service Class Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
 
 
 
 
 
 
 
 
 
 
Investment income:
 
 
 
 
 
 
 
 
 
 
 
 
Dividends
$
3,250

 
$
—

 
$
229

 
$
15,961

 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
Mortality and expense risks
 
—

 
 
—

 
 
—

 
 
—

Net investment income (loss)
 
3,250

 
 
—

 
 
229

 
 
15,961

 
 
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on investments
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on sale of fund shares
 
11,197

 
 
4,504

 
 
299

 
 
(2,277)

Capital gains distributions
 
30,545

 
 
75,130

 
 
14,497

 
 
7,297

Total realized gains (losses) on investments
 
41,742

 
 
79,634

 
 
14,796

 
 
5,020

 
 
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(102,517)

 
 
(111,047)

 
 
(27,246)

 
 
(8,625)

 
 
 
 
 
 
 
 
 
 
 
 
 
Net gains (losses) on investments
 
(57,525)

 
 
(31,413)

 
 
(12,221)

 
 
12,356

 
 
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(57,525)

 
$
(31,413)

 
$
(12,221)

 
$
12,356

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities
December 31, 2018
 
 
MidCap Class 1 Division
 
Multi-Asset Income Class 1 Division
 
Neuberger Berman AMT Large Cap Value Class I Division
 
Oppenheimer Main Street Small Cap Service Shares Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at fair value
$
3,630,919

 
$
16,077

 
$
215,049

 
$
465,421

Total assets
 
3,630,919

 
 
16,077

 
 
215,049

 
 
465,421

Total liabilities
 
—

 
 
—

 
 
—

 
 
—

Net assets
$
3,630,919

 
$
16,077

 
$
215,049

 
$
465,421

 
 
 
 
 
 
 
 
 
 
 
 
Net assets
 
 
 
 
 
 
 
 
 
 
 
Applicable to accumulation units
$
3,630,919

 
$
16,077

 
$
215,049

 
$
465,421

Total net assets
$
3,630,919

 
$
16,077

 
$
215,049

 
$
465,421

 
 
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at cost
$
4,206,184

 
$
17,171

 
$
225,394

 
$
546,212

 
 
 
 
 
 
 
 
 
 
 
 
 
Shares of mutual funds owned
 
74,818

 
 
1,561

 
 
14,749

 
 
23,236

 
 
 
 
 
 
 
 
 
 
 
 
Accumulation units outstanding
 
42,413

 
 
1,451

 
 
10,679

 
 
19,453

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
Year ended December 31, 2018
 
 
MidCap Class 1 Division
 
Multi-Asset Income Class 1 Division
 
Neuberger Berman AMT Large Cap Value Class I Division
 
Oppenheimer Main Street Small Cap Service Shares Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
 
 
 
 
 
 
 
 
 
 
Investment income:
 
 
 
 
 
 
 
 
 
 
 
 
Dividends
$
10,730

 
$
433

 
$
2,723

 
$
317

 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
Mortality and expense risks
 
—

 
 
—

 
 
—

 
 
—

Net investment income (loss)
 
10,730

 
 
433

 
 
2,723

 
 
317

 
 
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on investments
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on sale of fund shares
 
17,119

 
 
4

 
 
624

 
 
387

Capital gains distributions
 
499,370

 
 
50

 
 
24,228

 
 
69,154

Total realized gains (losses) on investments
 
516,489

 
 
54

 
 
24,852

 
 
69,541

 
 
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(788,345)

 
 
(1,462)

 
 
(28,550)

 
 
(120,369)

 
 
 
 
 
 
 
 
 
 
 
 
 
Net gains (losses) on investments
 
(261,126)

 
 
(975)

 
 
(975)

 
 
(50,511)

 
 
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(261,126)

 
$
(975)

 
$
(975)

 
$
(50,511)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities
December 31, 2018
 
 
Principal Capital Appreciation
Class 1 Division
 
Principal LifeTime 2010 Class 1 Division
 
Principal LifeTime 2020 Class 1 Division
 
Principal LifeTime 2030 Class 1 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at fair value
$
1,101,015

 
$
117,663

 
$
485,654

 
$
3,427,470

Total assets
 
1,101,015

 
 
117,663

 
 
485,654

 
 
3,427,470

Total liabilities
 
—

 
 
—

 
 
—

 
 
—

Net assets
$
1,101,015

 
$
117,663

 
$
485,654

 
$
3,427,470

 
 
 
 
 
 
 
 
 
 
 
 
Net assets
 
 
 
 
 
 
 
 
 
 
 
Applicable to accumulation units
$
1,101,015

 
$
117,663

 
$
485,654

 
$
3,427,470

Total net assets
$
1,101,015

 
$
117,663

 
$
485,654

 
$
3,427,470

 
 
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at cost
$
1,079,402

 
$
121,643

 
$
508,495

 
$
3,621,684

 
 
 
 
 
 
 
 
 
 
 
 
 
Shares of mutual funds owned
 
42,576

 
 
9,660

 
 
38,544

 
 
295,982

 
 
 
 
 
 
 
 
 
 
 
 
Accumulation units outstanding
 
87,706

 
 
6,051

 
 
22,259

 
 
154,493

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
Year ended December 31, 2018
 
 
Principal Capital Appreciation
Class 1 Division
 
Principal LifeTime 2010 Class 1 Division
 
Principal LifeTime 2020 Class 1 Division
 
Principal LifeTime 2030 Class 1 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
 
 
 
 
 
 
 
 
 
 
Investment income:
 
 
 
 
 
 
 
 
 
 
 
 
Dividends
$
13,509

 
$
3,690

 
$
15,026

 
$
75,944

 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
Mortality and expense risks
 
—

 
 
—

 
 
—

 
 
—

Net investment income (loss)
 
13,509

 
 
3,690

 
 
15,026

 
 
75,944

 
 
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on investments
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on sale of fund shares
 
12,858

 
 
108

 
 
197

 
 
(1,761)

Capital gains distributions
 
62,598

 
 
3,033

 
 
16,576

 
 
98,651

Total realized gains (losses) on investments
 
75,456

 
 
3,141

 
 
16,773

 
 
96,890

 
 
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(132,588)

 
 
(11,543)

 
 
(58,140)

 
 
(401,991)

 
 
 
 
 
 
 
 
 
 
 
 
 
Net gains (losses) on investments
 
(43,623)

 
 
(4,712)

 
 
(26,341)

 
 
(229,157)

 
 
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(43,623)

 
$
(4,712)

 
$
(26,341)

 
$
(229,157)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities
December 31, 2018
 
 
Principal LifeTime 2040 Class 1 Division
 
Principal LifeTime 2050 Class 1 Division
 
Principal LifeTime 2060 Class 1 Division
 
Principal LifeTime Strategic Income Class 1 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at fair value
$
3,320,644

 
$
1,723,522

 
$
1,184,320

 
$
239,838

Total assets
 
3,320,644

 
 
1,723,522

 
 
1,184,320

 
 
239,838

Total liabilities
 
—

 
 
—

 
 
—

 
 
—

Net assets
$
3,320,644

 
$
1,723,522

 
$
1,184,320

 
$
239,838

 
 
 
 
 
 
 
 
 
 
 
 
Net assets
 
 
 
 
 
 
 
 
 
 
 
Applicable to accumulation units
$
3,320,644

 
$
1,723,522

 
$
1,184,320

 
$
239,838

Total net assets
$
3,320,644

 
$
1,723,522

 
$
1,184,320

 
$
239,838

 
 
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at cost
$
3,450,641

 
$
1,825,500

 
$
1,241,850

 
$
249,430

 
 
 
 
 
 
 
 
 
 
 
 
 
Shares of mutual funds owned
 
238,210

 
 
128,910

 
 
96,130

 
 
21,225

 
 
 
 
 
 
 
 
 
 
 
 
Accumulation units outstanding
 
142,457

 
 
73,133

 
 
86,524

 
 
13,703

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
Year ended December 31, 2018
 
 
Principal LifeTime 2040 Class 1 Division
 
Principal LifeTime 2050 Class 1 Division
 
Principal LifeTime 2060 Class 1 Division
 
Principal LifeTime Strategic Income Class 1 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
 
 
 
 
 
 
 
 
 
 
Investment income:
 
 
 
 
 
 
 
 
 
 
 
 
Dividends
$
70,612

 
$
37,408

 
$
25,444

 
$
6,381

 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
Mortality and expense risks
 
—

 
 
—

 
 
—

 
 
—

Net investment income (loss)
 
70,612

 
 
37,408

 
 
25,444

 
 
6,381

 
 
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on investments
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on sale of fund shares
 
12,284

 
 
2,747

 
 
20,396

 
 
350

Capital gains distributions
 
115,290

 
 
80,420

 
 
42,805

 
 
2,482

Total realized gains (losses) on investments
 
127,574

 
 
83,167

 
 
63,201

 
 
2,832

 
 
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(480,802)

 
 
(285,123)

 
 
(206,178)

 
 
(16,714)

 
 
 
 
 
 
 
 
 
 
 
 
 
Net gains (losses) on investments
 
(282,616)

 
 
(164,548)

 
 
(117,533)

 
 
(7,501)

 
 
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(282,616)

 
$
(164,548)

 
$
(117,533)

 
$
(7,501)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities
December 31, 2018
 
 
Putnam VT Growth Opportunities Class IB Division
 
Real Estate Securities Class 1 Division
 
SAM Balanced Portfolio Class 1 Division
 
SAM Conservative Balanced Portfolio Class 1 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at fair value
$
323,937

 
$
3,804,232

 
$
16,372,250

 
$
3,973,704

Total assets
 
323,937

 
 
3,804,232

 
 
16,372,250

 
 
3,973,704

Total liabilities
 
—

 
 
—

 
 
—

 
 
—

Net assets
$
323,937

 
$
3,804,232

 
$
16,372,250

 
$
3,973,704

 
 
 
 
 
 
 
 
 
 
 
 
Net assets
 
 
 
 
 
 
 
 
 
 
 
Applicable to accumulation units
$
323,937

 
$
3,804,232

 
$
16,372,250

 
$
3,973,704

Total net assets
$
323,937

 
$
3,804,232

 
$
16,372,250

 
$
3,973,704

 
 
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at cost
$
292,880

 
$
4,519,150

 
$
18,054,756

 
$
4,246,189

 
 
 
 
 
 
 
 
 
 
 
 
 
Shares of mutual funds owned
 
33,849

 
 
213,003

 
 
1,177,860

 
 
359,611

 
 
 
 
 
 
 
 
 
 
 
 
Accumulation units outstanding
 
24,046

 
 
51,460

 
 
913,531

 
 
228,818

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
Year ended December 31, 2018
 
 
Putnam VT Growth Opportunities Class IB Division
 
Real Estate Securities Class 1 Division
 
SAM Balanced Portfolio Class 1 Division
 
SAM Conservative Balanced Portfolio Class 1 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
 
 
 
 
 
 
 
 
 
 
Investment income:
 
 
 
 
 
 
 
 
 
 
 
 
Dividends
$
—

 
$
69,808

 
$
511,340

 
$
133,566

 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
Mortality and expense risks
 
—

 
 
—

 
 
—

 
 
—

Net investment income (loss)
 
—

 
 
69,808

 
 
511,340

 
 
133,566

 
 
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on investments
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on sale of fund shares
 
4,365

 
 
(34,120)

 
 
(152,734)

 
 
(6,905)

Capital gains distributions
 
16,923

 
 
313,236

 
 
805,162

 
 
149,339

Total realized gains (losses) on investments
 
21,288

 
 
279,116

 
 
652,428

 
 
142,434

 
 
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(19,391)

 
 
(504,543)

 
 
(2,007,060)

 
 
(419,594)

 
 
 
 
 
 
 
 
 
 
 
 
 
Net gains (losses) on investments
 
1,897

 
 
(155,619)

 
 
(843,292)

 
 
(143,594)

 
 
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
1,897

 
$
(155,619)

 
$
(843,292)

 
$
(143,594)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities
December 31, 2018
 
 
SAM Conservative Growth Portfolio Class 1 Division
 
SAM Flexible Income Portfolio Class 1 Division
 
SAM Strategic Growth Portfolio Class 1 Division
 
Short-Term Income Class 1 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at fair value
$
18,153,119

 
$
2,876,169

 
$
26,741,941

 
$
1,896,396

Total assets
 
18,153,119

 
 
2,876,169

 
 
26,741,941

 
 
1,896,396

Total liabilities
 
—

 
 
—

 
 
—

 
 
—

Net assets
$
18,153,119

 
$
2,876,169

 
$
26,741,941

 
$
1,896,396

 
 
 
 
 
 
 
 
 
 
 
 
Net assets
 
 
 
 
 
 
 
 
 
 
 
Applicable to accumulation units
$
18,153,119

 
$
2,876,169

 
$
26,741,941

 
$
1,896,396

Total net assets
$
18,153,119

 
$
2,876,169

 
$
26,741,941

 
$
1,896,396

 
 
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at cost
$
19,642,362

 
$
3,042,798

 
$
29,398,864

 
$
1,920,625

 
 
 
 
 
 
 
 
 
 
 
 
 
Shares of mutual funds owned
 
1,057,874

 
 
242,510

 
 
1,456,533

 
 
752,537

 
 
 
 
 
 
 
 
 
 
 
 
Accumulation units outstanding
 
1,012,784

 
 
166,349

 
 
1,513,623

 
 
142,092

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
Year ended December 31, 2018
 
 
SAM Conservative Growth Portfolio Class 1 Division
 
SAM Flexible Income Portfolio Class 1 Division
 
SAM Strategic Growth Portfolio Class 1 Division
 
Short-Term Income Class 1 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
 
 
 
 
 
 
 
 
 
 
Investment income:
 
 
 
 
 
 
 
 
 
 
 
 
Dividends
$
528,934

 
$
120,310

 
$
676,914

 
$
39,610

 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
Mortality and expense risks
 
—

 
 
—

 
 
—

 
 
—

Net investment income (loss)
 
528,934

 
 
120,310

 
 
676,914

 
 
39,610

 
 
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on investments
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on sale of fund shares
 
(27,115)

 
 
(8,301)

 
 
(67,644)

 
 
(7,112)

Capital gains distributions
 
927,464

 
 
73,381

 
 
1,510,259

 
 
—

Total realized gains (losses) on investments
 
900,349

 
 
65,080

 
 
1,442,615

 
 
(7,112)

 
 
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(2,712,640)

 
 
(242,089)

 
 
(4,635,188)

 
 
(13,793)

 
 
 
 
 
 
 
 
 
 
 
 
 
Net gains (losses) on investments
 
(1,283,357)

 
 
(56,699)

 
 
(2,515,659)

 
 
18,705

 
 
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(1,283,357)

 
$
(56,699)

 
$
(2,515,659)

 
$
18,705

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities
December 31, 2018
 
 
SmallCap Class 1 Division
 
Templeton Global Bond VIP Class 2 Division
 
TOPS Managed Risk Balanced ETF Class 2 Division
 
TOPS Managed Risk Growth ETF Class 2 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at fair value
$
1,946,995

 
$
1,588,872

 
$
462,797

 
$
1,775,285

Total assets
 
1,946,995

 
 
1,588,872

 
 
462,797

 
 
1,775,285

Total liabilities
 
—

 
 
—

 
 
—

 
 
—

Net assets
$
1,946,995

 
$
1,588,872

 
$
462,797

 
$
1,775,285

 
 
 
 
 
 
 
 
 
 
 
 
Net assets
 
 
 
 
 
 
 
 
 
 
 
Applicable to accumulation units
$
1,946,995

 
$
1,588,872

 
$
462,797

 
$
1,775,285

Total net assets
$
1,946,995

 
$
1,588,872

 
$
462,797

 
$
1,775,285

 
 
 
 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at cost
$
2,088,130

 
$
1,577,309

 
$
496,232

 
$
1,912,215

 
 
 
 
 
 
 
 
 
 
 
 
 
Shares of mutual funds owned
 
136,153

 
 
94,407

 
 
43,496

 
 
166,381

 
 
 
 
 
 
 
 
 
 
 
 
Accumulation units outstanding
 
64,595

 
 
97,154

 
 
36,746

 
 
135,155

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
Year ended December 31, 2018
 
 
SmallCap Class 1 Division
 
Templeton Global Bond VIP Class 2 Division
 
TOPS Managed Risk Balanced ETF Class 2 Division
 
TOPS Managed Risk Growth ETF Class 2 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
 
 
 
 
 
 
 
 
 
 
Investment income:
 
 
 
 
 
 
 
 
 
 
 
 
Dividends
$
6,936

 
$
—

 
$
7,932

 
$
30,076

 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
Mortality and expense risks
 
—

 
 
—

 
 
—

 
 
—

Net investment income (loss)
 
6,936

 
 
—

 
 
7,932

 
 
30,076

 
 
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on investments
 
 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on sale of fund shares
 
22,556

 
 
(10,364)

 
 
1,116

 
 
(5,326)

Capital gains distributions
 
144,370

 
 
—

 
 
24,636

 
 
106,336

Total realized gains (losses) on investments
 
166,926

 
 
(10,364)

 
 
25,752

 
 
101,010

 
 
 
 
 
 
 
 
 
 
 
 
 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(426,676)

 
 
39,337

 
 
(62,522)

 
 
(304,973)

 
 
 
 
 
 
 
 
 
 
 
 
 
Net gains (losses) on investments
 
(252,814)

 
 
28,973

 
 
(28,838)

 
 
(173,887)

 
 
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(252,814)

 
$
28,973

 
$
(28,838)

 
$
(173,887)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Assets and Liabilities
December 31, 2018
 
 
TOPS Managed Risk Moderate Growth ETF
Class 2 Division
 
VanEck Global Hard Assets Class S Division
 
Wanger International Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at fair value
$
835,246

 
$
506,008

 
$
462,801

Total assets
 
835,246

 
 
506,008

 
 
462,801

Total liabilities
 
—

 
 
—

 
 
—

Net assets
$
835,246

 
$
506,008

 
$
462,801

 
 
 
 
 
 
 
 
 
Net assets
 
 
 
 
 
 
 
 
Applicable to accumulation units
$
835,246

 
$
506,008

 
$
462,801

Total net assets
$
835,246

 
$
506,008

 
$
462,801

 
 
 
 
 
 
 
 
 
 
Investments in shares of mutual funds, at cost
$
896,740

 
$
645,446

 
$
589,019

 
 
 
 
 
 
 
 
 
 
Shares of mutual funds owned
 
76,070

 
 
30,911

 
 
20,847

 
 
 
 
 
 
 
 
 
Accumulation units outstanding
 
63,433

 
 
100,017

 
 
47,207

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Operations
Year ended December 31, 2018
 
 
TOPS Managed Risk Moderate Growth ETF
Class 2 Division
 
VanEck Global Hard Assets
Class S Division
 
Wanger International Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
 
 
 
 
 
 
 
Investment income:
 
 
 
 
 
 
 
 
 
Dividends
$
14,514

 
$
—

 
$
8,668

 
 
 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
 
 
Mortality and expense risks
 
—

 
 
—

 
 
—

Net investment income (loss)
 
14,514

 
 
—

 
 
8,668

 
 
 
 
 
 
 
 
 
 
Realized gains (losses) on investments
 
 
 
 
 
 
 
 
Realized gains (losses) on sale of fund shares
 
(17)

 
 
(29,128)

 
 
(81)

Capital gains distributions
 
42,351

 
 
—

 
 
47,383

Total realized gains (losses) on investments
 
42,334

 
 
(29,128)

 
 
47,302

 
 
 
 
 
 
 
 
 
 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
of investments
 
(121,238)

 
 
(161,623)

 
 
(154,781)

 
 
 
 
 
 
 
 
 
 
Net gains (losses) on investments
 
(64,390)

 
 
(190,751)

 
 
(98,811)

 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(64,390)

 
$
(190,751)

 
$
(98,811)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2018 and 2017, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AllianceBernstein International Value Class A Division
 
AllianceBernstein Small Cap Growth Class A Division
 
AllianceBernstein Small/Mid Cap Value Class A Division
 
American Century VP Capital Appreciation
Class II Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net assets as of January 1, 2017
$
512,536

 
$
117,492

 
$
840,359

 
$
93,099

Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
16,976

 
 
—

 
 
4,932

 
 
—

 
Total realized gains (losses) on investments
 
1,378

 
 
(15,957)

 
 
43,629

 
 
19,506

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
125,892

 
 
53,530

 
 
90,644

 
 
7,020

 
Net gains (losses) on investments
 
144,246

 
 
37,573

 
 
139,205

 
 
26,526

Net increase (decrease) in net assets resulting from operations
 
144,246

 
 
37,573

 
 
139,205

 
 
26,526

Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
304,856

 
 
25,832

 
 
444,851

 
 
118,214

 
Contract terminations and surrenders
 
(12,368)

 
 
(23,509)

 
 
(8,290)

 
 
(195)

 
Death benefit payments
 
—

 
 
—

 
 
—

 
 
—

 
Policy loan transfers
 
(15,366)

 
 
(1,745)

 
 
(7,102)

 
 
(6)

 
Transfers to other contracts
 
(27,168)

 
 
(1,909)

 
 
(82,908)

 
 
(25,084)

 
Cost of insurance and administration charges
 
(41,806)

 
 
(6,399)

 
 
(76,536)

 
 
(22,093)

 
Mortality and expenses charges
 
(579)

 
 
(89)

 
 
(1,060)

 
 
(307)

 
Surrender charges
 
(6,387)

 
 
(12,140)

 
 
(4,281)

 
 
(101)

Increase (decrease) in net assets from policy related transactions
 
201,182

 
 
(19,959)

 
 
264,674

 
 
70,428

Total increase (decrease)
 
345,428

 
 
17,614

 
 
403,879

 
 
96,954

Net assets as of December 31, 2017
 
857,964

 
 
135,106

 
 
1,244,238

 
 
190,053

 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
14,620

 
 
—

 
 
6,387

 
 
—

 
Total realized gains (losses) on investments
 
2,443

 
 
5,266

 
 
106,435

 
 
2,116

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(251,282)

 
 
(9,550)

 
 
(331,695)

 
 
(21,119)

 
Net gains (losses) on investments
 
(234,219)

 
 
(4,284)

 
 
(218,873)

 
 
(19,003)

Net increase (decrease) in net assets resulting from operations
 
(234,219)

 
 
(4,284)

 
 
(218,873)

 
 
(19,003)

Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
324,925

 
 
34,592

 
 
488,696

 
 
140,139

 
Contract terminations and surrenders
 
(18,785)

 
 
(2,901)

 
 
(37,425)

 
 
(3,162)

 
Death benefit payments
 
—

 
 
—

 
 
—

 
 
—

 
Policy loan transfers
 
(5)

 
 
(188)

 
 
(2,086)

 
 
(1,176)

 
Transfers to other contracts
 
(44,585)

 
 
(6,219)

 
 
(134,389)

 
 
(8,385)

 
Cost of insurance and administration charges
 
(53,941)

 
 
(6,922)

 
 
(93,042)

 
 
(27,995)

 
Mortality and expenses charges
 
(780)

 
 
(101)

 
 
(1,346)

 
 
(406)

 
Surrender charges
 
(5,912)

 
 
(913)

 
 
(11,778)

 
 
(995)

Increase (decrease) in net assets from policy related transactions
 
200,917

 
 
17,348

 
 
208,630

 
 
98,020

Total increase (decrease)
 
(33,302)

 
 
13,064

 
 
(10,243)

 
 
79,017

Net assets as of December 31, 2018
$
824,662

 
$
148,170

 
$
1,233,995

 
$
269,070

 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2018 and 2017, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Century VP Income & Growth Class II Division
 
American Century VP Inflation Protection Class II Division
 
American Century VP Mid Cap Value Class II Division
 
American Century VP Value Class II Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net assets as of January 1, 2017
$
433,812

 
$
392,742

 
$
1,015,007

 
$
750,369

Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
11,584

 
 
11,408

 
 
17,831

 
 
13,433

 
Total realized gains (losses) on investments
 
14,079

 
 
(2,148)

 
 
39,375

 
 
10,983

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
73,970

 
 
6,398

 
 
83,197

 
 
50,388

 
Net gains (losses) on investments
 
99,633

 
 
15,658

 
 
140,403

 
 
74,804

Net increase (decrease) in net assets resulting from operations
 
99,633

 
 
15,658

 
 
140,403

 
 
74,804

Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
199,186

 
 
130,375

 
 
573,877

 
 
313,381

 
Contract terminations and surrenders
 
(11,394)

 
 
(8,087)

 
 
(22,304)

 
 
(4,432)

 
Death benefit payments
 
—

 
 
(28,186)

 
 
—

 
 
—

 
Policy loan transfers
 
(4,031)

 
 
(12,472)

 
 
(7,437)

 
 
(3,118)

 
Transfers to other contracts
 
(22,685)

 
 
(6,317)

 
 
(72,631)

 
 
(61,745)

 
Cost of insurance and administration charges
 
(48,786)

 
 
(37,267)

 
 
(103,477)

 
 
(70,101)

 
Mortality and expenses charges
 
(675)

 
 
(516)

 
 
(1,433)

 
 
(971)

 
Surrender charges
 
(5,884)

 
 
(4,176)

 
 
(11,518)

 
 
(2,289)

Increase (decrease) in net assets from policy related transactions
 
105,731

 
 
33,354

 
 
355,077

 
 
170,725

Total increase (decrease)
 
205,364

 
 
49,012

 
 
495,480

 
 
245,529

Net assets as of December 31, 2017
 
639,176

 
 
441,754

 
 
1,510,487

 
 
995,898

 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
13,118

 
 
14,272

 
 
21,934

 
 
15,564

 
Total realized gains (losses) on investments
 
57,184

 
 
(1,384)

 
 
107,361

 
 
34,096

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(132,768)

 
 
(26,675)

 
 
(370,253)

 
 
(147,547)

 
Net gains (losses) on investments
 
(62,466)

 
 
(13,787)

 
 
(240,958)

 
 
(97,887)

Net increase (decrease) in net assets resulting from operations
 
(62,466)

 
 
(13,787)

 
 
(240,958)

 
 
(97,887)

Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
276,970

 
 
183,000

 
 
589,320

 
 
307,266

 
Contract terminations and surrenders
 
(18,236)

 
 
(6,179)

 
 
(7,692)

 
 
(18,637)

 
Death benefit payments
 
—

 
 
—

 
 
(8,098)

 
 
—

 
Policy loan transfers
 
(4,539)

 
 
(1,183)

 
 
(13,536)

 
 
(1,307)

 
Transfers to other contracts
 
(13,568)

 
 
(11,047)

 
 
(53,885)

 
 
(144,167)

 
Cost of insurance and administration charges
 
(58,717)

 
 
(42,613)

 
 
(120,826)

 
 
(85,187)

 
Mortality and expenses charges
 
(850)

 
 
(616)

 
 
(1,746)

 
 
(1,230)

 
Surrender charges
 
(5,739)

 
 
(1,945)

 
 
(2,421)

 
 
(5,865)

Increase (decrease) in net assets from policy related transactions
 
175,321

 
 
119,417

 
 
381,116

 
 
50,873

Total increase (decrease)
 
112,855

 
 
105,630

 
 
140,158

 
 
(47,014)

Net assets as of December 31, 2018
$
752,031

 
$
547,384

 
$
1,650,645

 
$
948,884

 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2018 and 2017, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Funds Insurance Series Blue Chip Income and Growth
Class 2 Division
 
American Funds Insurance Series Global Balanced Fund Class 2 Division (1)
 
American Funds Insurance Series Growth Fund Class 2 Division
 
American Funds Insurance Series International Fund Class 2 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net assets as of January 1, 2017
$
349,274

 
$
—

 
$
652,721

 
$
383,690
Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
16,439

 
 
—

 
 
8,189

 
 
10,253
 
Total realized gains (losses) on investments
 
27,186

 
 
—

 
 
119,235

 
 
1,712
 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
64,667

 
 
—

 
 
175,400

 
 
166,353
 
Net gains (losses) on investments
 
108,292

 
 
—

 
 
302,824

 
 
178,318
Net increase (decrease) in net assets resulting from operations
 
108,292

 
 
—

 
 
302,824

 
 
178,318
Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
666,685

 
 
—

 
 
1,165,135

 
 
537,845
 
Contract terminations and surrenders
 
(380)

 
 
—

 
 
(36,954)

 
 
(17,680)
 
Death benefit payments
 
—

 
 
—

 
 
(1,026)

 
 
(526)
 
Policy loan transfers
 
(7,253)

 
 
—

 
 
(78)

 
 
(6,095)
 
Transfers to other contracts
 
(62,961)

 
 
—

 
 
(50,584)

 
 
(70,468)
 
Cost of insurance and administration charges
 
(64,418)

 
 
—

 
 
(97,391)

 
 
(50,193)
 
Mortality and expenses charges
 
(890)

 
 
—

 
 
(1,347)

 
 
(696)
 
Surrender charges
 
(196)

 
 
—

 
 
(19,083)

 
 
(9,130)
Increase (decrease) in net assets from policy related transactions
 
530,587

 
 
—

 
 
958,672

 
 
383,057
Total increase (decrease)
 
638,879

 
 
—

 
 
1,261,496

 
 
561,375
Net assets as of December 31, 2017
 
988,153

 
 
—

 
 
1,914,217

 
 
945,065
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
24,960

 
 
83

 
 
10,809

 
 
19,581
 
Total realized gains (losses) on investments
 
94,761

 
 
71

 
 
253,060

 
 
64,689
 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(236,446)

 
 
(521)

 
 
(306,660)

 
 
(236,504)
 
Net gains (losses) on investments
 
(116,725)

 
 
(367)

 
 
(42,791)

 
 
(152,234)
Net increase (decrease) in net assets resulting from operations
 
(116,725)

 
 
(367)

 
 
(42,791)

 
 
(152,234)
Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
489,473

 
 
9,309

 
 
910,996

 
 
487,133
 
Contract terminations and surrenders
 
(4,289)

 
 
—

 
 
(71,829)

 
 
(22,893)
 
Death benefit payments
 
—

 
 
—

 
 
—

 
 
(777)
 
Policy loan transfers
 
(7,147)

 
 
—

 
 
(15,553)

 
 
(1,015)
 
Transfers to other contracts
 
(20,281)

 
 
(2,433)

 
 
(148,383)

 
 
(105,584)
 
Cost of insurance and administration charges
 
(96,894)

 
 
(179)

 
 
(144,217)

 
 
(73,198)
 
Mortality and expenses charges
 
(1,401)

 
 
(4)

 
 
(2,083)

 
 
(1,058)
 
Surrender charges
 
(1,350)

 
 
—

 
 
(22,606)

 
 
(7,205)
Increase (decrease) in net assets from policy related transactions
 
358,111

 
 
6,693

 
 
506,325

 
 
275,403
Total increase (decrease)
 
241,386

 
 
6,326

 
 
463,534

 
 
123,169
Net assets as of December 31, 2018
$
1,229,539

 
$
6,326

 
$
2,377,751

 
$
1,068,234
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Commencement of operations, June 11, 2018.
See accompanying notes.


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2018 and 2017, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Funds Insurance Series New World Fund Class 2 Division
 
Calvert Investment Grade Bond Index Class I Division
 
Calvert Russell 2000 Small Cap Index Class F
 
Calvert S&P 500 Index Portfolio Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net assets as of January 1, 2017
$
251,854

 
$
501,370
 
$
455,927

 
$
122,565

Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
5,174

 
 
16,454
 
 
5,328

 
 
2,574

 
Total realized gains (losses) on investments
 
2,209

 
 
401
 
 
26,364

 
 
7,911

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
98,996

 
 
1,669
 
 
59,555

 
 
21,407

 
Net gains (losses) on investments
 
106,379

 
 
18,524
 
 
91,247

 
 
31,892

Net increase (decrease) in net assets resulting from operations
 
106,379

 
 
18,524
 
 
91,247

 
 
31,892

Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
365,411

 
 
151,230
 
 
455,823

 
 
49,922

 
Contract terminations and surrenders
 
(3,441)

 
 
(4,325)
 
 
(9,731)

 
 
(506)

 
Death benefit payments
 
—

 
 
(937)
 
 
—

 
 
—

 
Policy loan transfers
 
(7,111)

 
 
(301)
 
 
(9,556)

 
 
(900)

 
Transfers to other contracts
 
(19,346)

 
 
(8,378)
 
 
(19,319)

 
 
(416)

 
Cost of insurance and administration charges
 
(37,522)

 
 
(44,535)
 
 
(63,084)

 
 
(9,671)

 
Mortality and expenses charges
 
(519)

 
 
(615)
 
 
(875)

 
 
(134)

 
Surrender charges
 
(1,777)

 
 
(2,233)
 
 
(5,025)

 
 
(261)

Increase (decrease) in net assets from policy related transactions
 
295,695

 
 
89,906
 
 
348,233

 
 
38,034

Total increase (decrease)
 
402,074

 
 
108,430
 
 
439,480

 
 
69,926

Net assets as of December 31, 2017
 
653,928

 
 
609,800
 
 
895,407

 
 
192,491

 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
7,893

 
 
22,920
 
 
12,936

 
 
5,062

 
Total realized gains (losses) on investments
 
28,803

 
 
(927)
 
 
61,768

 
 
23,218

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(171,826)

 
 
(22,454)
 
 
(228,006)

 
 
(42,129)

 
Net gains (losses) on investments
 
(135,130)

 
 
(461)
 
 
(153,302)

 
 
(13,849)

Net increase (decrease) in net assets resulting from operations
 
(135,130)

 
 
(461)
 
 
(153,302)

 
 
(13,849)

Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
488,704

 
 
221,411
 
 
502,787

 
 
93,238

 
Contract terminations and surrenders
 
(10,126)

 
 
(5,493)
 
 
(14,215)

 
 
(4,412)

 
Death benefit payments
 
—

 
 
(1,644)
 
 
(9,734)

 
 
—

 
Policy loan transfers
 
(11,400)

 
 
(535)
 
 
(2,497)

 
 
(7,419)

 
Transfers to other contracts
 
(71,707)

 
 
(13,389)
 
 
(69,080)

 
 
(3,958)

 
Cost of insurance and administration charges
 
(57,639)

 
 
(55,747)
 
 
(82,394)

 
 
(12,304)

 
Mortality and expenses charges
 
(833)

 
 
(806)
 
 
(1,191)

 
 
(177)

 
Surrender charges
 
(3,187)

 
 
(1,729)
 
 
(4,474)

 
 
(1,389)

Increase (decrease) in net assets from policy related transactions
 
333,812

 
 
142,068
 
 
319,202

 
 
63,579

Total increase (decrease)
 
198,682

 
 
141,607
 
 
165,900

 
 
49,730

Net assets as of December 31, 2018
$
852,610

 
$
751,407
 
$
1,061,307

 
$
242,221

 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2018 and 2017, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Calvert S&P MidCap 400 Index Class F Division
 
ClearBridge Mid Cap Class I Division
 
Core Plus Bond Class 1 Division
 
Delaware Small Cap Value Service Class Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net assets as of January 1, 2017
$
834,413

 
$
81,542

 
$
567,913

 
$
552,556

Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
8,380

 
 
653

 
 
19,353

 
 
4,252

 
Total realized gains (losses) on investments
 
57,362

 
 
8,641

 
 
(215)

 
 
21,532

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
102,161

 
 
4,791

 
 
11,997

 
 
62,601

 
Net gains (losses) on investments
 
167,903

 
 
14,085

 
 
31,135

 
 
88,385

Net increase (decrease) in net assets resulting from operations
 
167,903

 
 
14,085

 
 
31,135

 
 
88,385

Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
680,909

 
 
78,309

 
 
634,116

 
 
523,864

 
Contract terminations and surrenders
 
(9,169)

 
 
(176)

 
 
(4,912)

 
 
(7,949)

 
Death benefit payments
 
—

 
 
—

 
 
(472)

 
 
—

 
Policy loan transfers
 
(22,050)

 
 
—

 
 
2,073

 
 
(1,194)

 
Transfers to other contracts
 
(63,032)

 
 
(126)

 
 
(79,377)

 
 
(52,193)

 
Cost of insurance and administration charges
 
(96,808)

 
 
(14,136)

 
 
(54,762)

 
 
(77,144)

 
Mortality and expenses charges
 
(1,341)

 
 
(196)

 
 
(758)

 
 
(1,067)

 
Surrender charges
 
(4,735)

 
 
(91)

 
 
(2,537)

 
 
(4,105)

Increase (decrease) in net assets from policy related transactions
 
483,774

 
 
63,584

 
 
493,371

 
 
380,212

Total increase (decrease)
 
651,677

 
 
77,669

 
 
524,506

 
 
468,597

Net assets as of December 31, 2017
 
1,486,090

 
 
159,211

 
 
1,092,419

 
 
1,021,153

 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
22,058

 
 
1,039

 
 
48,549

 
 
6,694

 
Total realized gains (losses) on investments
 
119,341

 
 
4,613

 
 
(5,032)

 
 
81,033

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(379,324)

 
 
(32,161)

 
 
(57,804)

 
 
(304,611)

 
Net gains (losses) on investments
 
(237,925)

 
 
(26,509)

 
 
(14,287)

 
 
(216,884)

Net increase (decrease) in net assets resulting from operations
 
(237,925)

 
 
(26,509)

 
 
(14,287)

 
 
(216,884)

Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
698,224

 
 
86,642

 
 
601,039

 
 
478,674

 
Contract terminations and surrenders
 
(7,750)

 
 
(884)

 
 
(37,492)

 
 
(13,937)

 
Death benefit payments
 
(863)

 
 
—

 
 
—

 
 
—

 
Policy loan transfers
 
(3,980)

 
 
(1,155)

 
 
(3,652)

 
 
(1,224)

 
Transfers to other contracts
 
(67,115)

 
 
(9,943)

 
 
(91,880)

 
 
(48,403)

 
Cost of insurance and administration charges
 
(118,068)

 
 
(23,993)

 
 
(75,208)

 
 
(102,828)

 
Mortality and expenses charges
 
(1,705)

 
 
(347)

 
 
(1,086)

 
 
(1,484)

 
Surrender charges
 
(2,439)

 
 
(278)

 
 
(11,799)

 
 
(4,386)

Increase (decrease) in net assets from policy related transactions
 
496,304

 
 
50,042

 
 
379,922

 
 
306,412

Total increase (decrease)
 
258,379

 
 
23,533

 
 
365,635

 
 
89,528

Net assets as of December 31, 2018
$
1,744,469

 
$
182,744

 
$
1,458,054

 
$
1,110,681

 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2018 and 2017, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Delaware Smid Cap Core Service Class Division
 
Diversified International
Class 1 Division
 
Dreyfus IP MidCap Stock Service Shares Division
 
DWS Small Mid Cap Value Class B Division (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net assets as of January 1, 2017
$
864,335

 
$
1,145,251

 
$
87,304

 
$
171,305

Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
922

 
 
28,880

 
 
850

 
 
722

 
Total realized gains (losses) on investments
 
75,212

 
 
10,599

 
 
1,571

 
 
4,743

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
110,204

 
 
325,264

 
 
14,789

 
 
15,425

 
Net gains (losses) on investments
 
186,338

 
 
364,743

 
 
17,210

 
 
20,890

Net increase (decrease) in net assets resulting from operations
 
186,338

 
 
364,743

 
 
17,210

 
 
20,890

Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
443,786

 
 
809,509

 
 
68,394

 
 
77,750

 
Contract terminations and surrenders
 
(9,640)

 
 
(33,339)

 
 
(561)

 
 
(3,288)

 
Death benefit payments
 
—

 
 
—

 
 
—

 
 
—

 
Policy loan transfers
 
(14,621)

 
 
(2,051)

 
 
(1,128)

 
 
(7,827)

 
Transfers to other contracts
 
(94,449)

 
 
(127,446)

 
 
(4,914)

 
 
(2,018)

 
Cost of insurance and administration charges
 
(85,731)

 
 
(111,880)

 
 
(18,227)

 
 
(18,931)

 
Mortality and expenses charges
 
(1,188)

 
 
(1,548)

 
 
(253)

 
 
(261)

 
Surrender charges
 
(4,978)

 
 
(17,216)

 
 
(290)

 
 
(1,698)

Increase (decrease) in net assets from policy related transactions
 
233,179

 
 
516,029

 
 
43,021

 
 
43,727

Total increase (decrease)
 
419,517

 
 
880,772

 
 
60,231

 
 
64,617

Net assets as of December 31, 2017
 
1,283,852

 
 
2,026,023

 
 
147,535

 
 
235,922

 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
—

 
 
49,419

 
 
529

 
 
2,601

 
Total realized gains (losses) on investments
 
417,798

 
 
14,028

 
 
18,392

 
 
42,653

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(600,993)

 
 
(486,302)

 
 
(53,642)

 
 
(90,761)

 
Net gains (losses) on investments
 
(183,195)

 
 
(422,855)

 
 
(34,721)

 
 
(45,507)

Net increase (decrease) in net assets resulting from operations
 
(183,195)

 
 
(422,855)

 
 
(34,721)

 
 
(45,507)

Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
444,142

 
 
748,412

 
 
107,443

 
 
81,690

 
Contract terminations and surrenders
 
(25,843)

 
 
(9,936)

 
 
(1,351)

 
 
(9,235)

 
Death benefit payments
 
—

 
 
—

 
 
—

 
 
—

 
Policy loan transfers
 
(3,123)

 
 
(15,347)

 
 
615

 
 
(102)

 
Transfers to other contracts
 
(89,428)

 
 
(131,244)

 
 
(2,580)

 
 
(2,783)

 
Cost of insurance and administration charges
 
(97,326)

 
 
(137,116)

 
 
(20,926)

 
 
(20,764)

 
Mortality and expenses charges
 
(1,407)

 
 
(1,982)

 
 
(302)

 
 
(301)

 
Surrender charges
 
(8,133)

 
 
(3,127)

 
 
(425)

 
 
(2,906)

Increase (decrease) in net assets from policy related transactions
 
218,882

 
 
449,660

 
 
82,474

 
 
45,599

Total increase (decrease)
 
35,687

 
 
26,805

 
 
47,753

 
 
92

Net assets as of December 31, 2018
$
1,319,539

 
$
2,052,828

 
$
195,288

 
$
236,014

 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Represented the operations of Deutsche Small Mid Cap Value Class B Division until October 13, 2018.
 
See accompanying notes.


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2018 and 2017, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity Income Class 1 Division
 
Fidelity VIP Contrafund Service Class 2 Division
 
Fidelity VIP Equity-Income Service Class 2 Division
 
Fidelity VIP Government Money Market Service Class Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net assets as of January 1, 2017
$
1,323,044

 
$
3,066,036

 
$
641,433

 
$
5,523,076

Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
38,718

 
 
32,758

 
 
13,357

 
 
30,118

 
Total realized gains (losses) on investments
 
96,547

 
 
227,627

 
 
13,149

 
 
—

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
181,798

 
 
493,289

 
 
71,079

 
 
—

 
Net gains (losses) on investments
 
317,063

 
 
753,674

 
 
97,585

 
 
30,118

Net increase (decrease) in net assets resulting from operations
 
317,063

 
 
753,674

 
 
97,585

 
 
30,118

Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
495,850

 
 
1,748,540

 
 
380,147

 
 
11,876,125

 
Contract terminations and surrenders
 
(20,745)

 
 
(69,654)

 
 
(17,393)

 
 
(72,898)

 
Death benefit payments
 
(710)

 
 
(5,080)

 
 
(972)

 
 
—

 
Policy loan transfers
 
(6,588)

 
 
(52,107)

 
 
(12,766)

 
 
(3,751)

 
Transfers to other contracts
 
(49,124)

 
 
(282,398)

 
 
(59,589)

 
 
(10,701,212)

 
Cost of insurance and administration charges
 
(111,279)

 
 
(342,798)

 
 
(66,688)

 
 
(878,242)

 
Mortality and expenses charges
 
(1,540)

 
 
(4,746)

 
 
(924)

 
 
(12,156)

 
Surrender charges
 
(10,713)

 
 
(35,969)

 
 
(8,982)

 
 
(37,645)

Increase (decrease) in net assets from policy related transactions
 
295,151

 
 
955,788

 
 
212,833

 
 
170,221

Total increase (decrease)
 
612,214

 
 
1,709,462

 
 
310,418

 
 
200,339

Net assets as of December 31, 2017
 
1,935,258

 
 
4,775,498

 
 
951,851

 
 
5,723,415

 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
42,919

 
 
25,295

 
 
21,924

 
 
84,818

 
Total realized gains (losses) on investments
 
146,713

 
 
441,761

 
 
36,626

 
 
—

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(444,185)

 
 
(886,065)

 
 
(147,728)

 
 
—

 
Net gains (losses) on investments
 
(254,553)

 
 
(419,009)

 
 
(89,178)

 
 
84,818

Net increase (decrease) in net assets resulting from operations
 
(254,553)

 
 
(419,009)

 
 
(89,178)

 
 
84,818

Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
2,802,237

 
 
1,932,751

 
 
314,304

 
 
12,049,852

 
Contract terminations and surrenders
 
(45,179)

 
 
(92,329)

 
 
(12,150)

 
 
(182,409)

 
Death benefit payments
 
—

 
 
—

 
 
—

 
 
—

 
Policy loan transfers
 
(7,863)

 
 
(17,872)

 
 
(4,706)

 
 
(253,822)

 
Transfers to other contracts
 
(78,561)

 
 
(260,674)

 
 
(87,277)

 
 
(10,411,390)

 
Cost of insurance and administration charges
 
(162,490)

 
 
(413,872)

 
 
(75,609)

 
 
(872,787)

 
Mortality and expenses charges
 
(2,347)

 
 
(5,982)

 
 
(1,091)

 
 
(12,752)

 
Surrender charges
 
(14,219)

 
 
(29,058)

 
 
(3,824)

 
 
(57,408)

Increase (decrease) in net assets from policy related transactions
 
2,491,578

 
 
1,112,964

 
 
129,647

 
 
259,284

Total increase (decrease)
 
2,237,025

 
 
693,955

 
 
40,469

 
 
344,102

Net assets as of December 31, 2018
$
4,172,283

 
$
5,469,453

 
$
992,320

 
$
6,067,517

 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2018 and 2017, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fidelity VIP High Income Service Class 2 Division
 
Fidelity VIP Mid Cap Service
Class 2 Division
 
Franklin Mutual Global Discovery VIP Class 2 Division
 
Franklin Rising Dividends VIP Class 2 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net assets as of January 1, 2017
$
1,566,614

 
$
2,043,224

 
$
1,006,375

 
$
1,201,527

Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
98,244

 
 
12,729

 
 
21,678

 
 
22,421

 
Total realized gains (losses) on investments
 
(18,514)

 
 
97,351

 
 
59,893

 
 
56,901

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
35,966

 
 
352,032

 
 
20,561

 
 
206,084

 
Net gains (losses) on investments
 
115,696

 
 
462,112

 
 
102,132

 
 
285,406

Net increase (decrease) in net assets resulting from operations
 
115,696

 
 
462,112

 
 
102,132

 
 
285,406

Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
724,995

 
 
1,091,712

 
 
732,145

 
 
570,522

 
Contract terminations and surrenders
 
(23,154)

 
 
(73,264)

 
 
(19,932)

 
 
(11,433)

 
Death benefit payments
 
(2,030)

 
 
(2,116)

 
 
—

 
 
(43,391)

 
Policy loan transfers
 
(1,226)

 
 
(10,195)

 
 
(17,544)

 
 
(1,805)

 
Transfers to other contracts
 
(288,457)

 
 
(274,156)

 
 
(58,783)

 
 
(40,131)

 
Cost of insurance and administration charges
 
(136,293)

 
 
(244,588)

 
 
(92,120)

 
 
(124,012)

 
Mortality and expenses charges
 
(1,887)

 
 
(3,386)

 
 
(1,275)

 
 
(1,717)

 
Surrender charges
 
(11,957)

 
 
(37,834)

 
 
(10,293)

 
 
(5,904)

Increase (decrease) in net assets from policy related transactions
 
259,991

 
 
446,173

 
 
532,198

 
 
342,129

Total increase (decrease)
 
375,687

 
 
908,285

 
 
634,330

 
 
627,535

Net assets as of December 31, 2017
 
1,942,301

 
 
2,951,509

 
 
1,640,705

 
 
1,829,062

 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
119,620

 
 
13,835

 
 
42,454

 
 
26,312

 
Total realized gains (losses) on investments
 
(6,916)

 
 
258,293

 
 
2,661

 
 
128,073

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(191,168)

 
 
(801,439)

 
 
(247,653)

 
 
(268,397)

 
Net gains (losses) on investments
 
(78,464)

 
 
(529,311)

 
 
(202,538)

 
 
(114,012)

Net increase (decrease) in net assets resulting from operations
 
(78,464)

 
 
(529,311)

 
 
(202,538)

 
 
(114,012)

Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
671,369

 
 
1,148,404

 
 
419,195

 
 
596,031

 
Contract terminations and surrenders
 
(27,135)

 
 
(57,007)

 
 
(38,976)

 
 
(19,095)

 
Death benefit payments
 
—

 
 
—

 
 
(7,978)

 
 
—

 
Policy loan transfers
 
(6,152)

 
 
(17,063)

 
 
(2,883)

 
 
25,146

 
Transfers to other contracts
 
(252,083)

 
 
(151,590)

 
 
(65,093)

 
 
(109,377)

 
Cost of insurance and administration charges
 
(150,072)

 
 
(296,917)

 
 
(105,736)

 
 
(150,153)

 
Mortality and expenses charges
 
(2,168)

 
 
(4,292)

 
 
(1,528)

 
 
(2,170)

 
Surrender charges
 
(8,540)

 
 
(17,941)

 
 
(12,266)

 
 
(6,010)

Increase (decrease) in net assets from policy related transactions
 
225,219

 
 
603,594

 
 
184,735

 
 
334,372

Total increase (decrease)
 
146,755

 
 
74,283

 
 
(17,803)

 
 
220,360

Net assets as of December 31, 2018
$
2,089,056

 
$
3,025,792

 
$
1,622,902

 
$
2,049,422

 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2018 and 2017, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Franklin Small Cap Value VIP Class 2 Division
 
Government & High Quality Bond Class 1 Division
 
International Emerging Markets Class 1 Division
 
Invesco American Franchise Series II Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net assets as of January 1, 2017
$
346,842

 
$
842,428

 
$
1,335,097
 
$
79,074

Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
2,263

 
 
39,605

 
 
26,074
 
 
—

 
Total realized gains (losses) on investments
 
6,794

 
 
(2,984)

 
 
6,214
 
 
12,076

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
39,172

 
 
(19,663)

 
 
598,742
 
 
11,582

 
Net gains (losses) on investments
 
48,229

 
 
16,958

 
 
631,030
 
 
23,658

Net increase (decrease) in net assets resulting from operations
 
48,229

 
 
16,958

 
 
631,030
 
 
23,658

Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
199,340

 
 
393,189

 
 
965,774
 
 
38,054

 
Contract terminations and surrenders
 
(5,629)

 
 
(9,896)

 
 
(20,541)
 
 
(2,365)

 
Death benefit payments
 
(477)

 
 
—

 
 
(951)
 
 
—

 
Policy loan transfers
 
—

 
 
(9,760)

 
 
(36,740)
 
 
(1,708)

 
Transfers to other contracts
 
(50,592)

 
 
(43,868)

 
 
(144,073)
 
 
(5,801)

 
Cost of insurance and administration charges
 
(31,527)

 
 
(88,646)

 
 
(140,873)
 
 
(5,971)

 
Mortality and expenses charges
 
(436)

 
 
(1,227)

 
 
(1,950)
 
 
(84)

 
Surrender charges
 
(2,907)

 
 
(5,110)

 
 
(10,608)
 
 
(1,221)

Increase (decrease) in net assets from policy related transactions
 
107,772

 
 
234,682

 
 
610,038
 
 
20,904

Total increase (decrease)
 
156,001

 
 
251,640

 
 
1,241,068
 
 
44,562

Net assets as of December 31, 2017
 
502,843

 
 
1,094,068

 
 
2,576,165
 
 
123,636

 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
4,804

 
 
51,545

 
 
33,377
 
 
—

 
Total realized gains (losses) on investments
 
76,196

 
 
(5,335)

 
 
26,253
 
 
15,174

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(165,560)

 
 
(30,301)

 
 
(682,459)
 
 
(23,512)

 
Net gains (losses) on investments
 
(84,560)

 
 
15,909

 
 
(622,829)
 
 
(8,338)

Net increase (decrease) in net assets resulting from operations
 
(84,560)

 
 
15,909

 
 
(622,829)
 
 
(8,338)

Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
253,752

 
 
486,597

 
 
1,109,466
 
 
69,742

 
Contract terminations and surrenders
 
(6,804)

 
 
(3,466)

 
 
(26,224)
 
 
(3,672)

 
Death benefit payments
 
—

 
 
—

 
 
(715)
 
 
—

 
Policy loan transfers
 
(78)

 
 
(2,120)

 
 
(4,282)
 
 
(1,215)

 
Transfers to other contracts
 
(42,297)

 
 
(58,057)

 
 
(332,572)
 
 
(28,123)

 
Cost of insurance and administration charges
 
(41,862)

 
 
(100,108)

 
 
(171,991)
 
 
(9,070)

 
Mortality and expenses charges
 
(605)

 
 
(1,445)

 
 
(2,487)
 
 
(131)

 
Surrender charges
 
(2,141)

 
 
(1,091)

 
 
(8,253)
 
 
(1,156)

Increase (decrease) in net assets from policy related transactions
 
159,965

 
 
320,310

 
 
562,942
 
 
26,375

Total increase (decrease)
 
75,405

 
 
336,219

 
 
(59,887)
 
 
18,037

Net assets as of December 31, 2018
$
578,248

 
$
1,430,287

 
$
2,516,278
 
$
141,673

 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2018 and 2017, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Invesco American Value Series I Division
 
Invesco Core Equity Series II Division
 
Invesco Health Care Series I Division (1)
 
Invesco Mid Cap Core Equity
Series II Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net assets as of January 1, 2017
$
34,343

 
$
143,750

 
$
1,518,043

 
$
344,992

Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
337

 
 
1,611

 
 
6,740

 
 
1,308

 
Total realized gains (losses) on investments
 
820

 
 
8,793

 
 
51,644

 
 
(1,307)

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
2,823

 
 
11,424

 
 
186,787

 
 
53,666

 
Net gains (losses) on investments
 
3,980

 
 
21,828

 
 
245,171

 
 
53,667

Net increase (decrease) in net assets resulting from operations
 
3,980

 
 
21,828

 
 
245,171

 
 
53,667

Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
11,390

 
 
99,656

 
 
601,071

 
 
126,464

 
Contract terminations and surrenders
 
(5)

 
 
(847)

 
 
(57,913)

 
 
(260)

 
Death benefit payments
 
—

 
 
—

 
 
(1,751)

 
 
—

 
Policy loan transfers
 
—

 
 
—

 
 
(10,925)

 
 
36

 
Transfers to other contracts
 
(367)

 
 
(28,504)

 
 
(146,896)

 
 
(40,611)

 
Cost of insurance and administration charges
 
(3,075)

 
 
(17,079)

 
 
(158,851)

 
 
(23,312)

 
Mortality and expenses charges
 
(43)

 
 
(237)

 
 
(2,197)

 
 
(323)

 
Surrender charges
 
(3)

 
 
(437)

 
 
(29,906)

 
 
(134)

Increase (decrease) in net assets from policy related transactions
 
7,897

 
 
52,552

 
 
192,632

 
 
61,860

Total increase (decrease)
 
11,877

 
 
74,380

 
 
437,803

 
 
115,527

Net assets as of December 31, 2017
 
46,220

 
 
218,130

 
 
1,955,846

 
 
460,519

 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
283

 
 
—

 
 
—

 
 
499

 
Total realized gains (losses) on investments
 
8,548

 
 
15,772

 
 
273,397

 
 
62,582

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(16,592)

 
 
(30,507)

 
 
(268,180)

 
 
(115,821)

 
Net gains (losses) on investments
 
(7,761)

 
 
(14,735)

 
 
5,217

 
 
(52,740)

Net increase (decrease) in net assets resulting from operations
 
(7,761)

 
 
(14,735)

 
 
5,217

 
 
(52,740)

Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
18,600

 
 
63,026

 
 
728,283

 
 
88,367

 
Contract terminations and surrenders
 
(96)

 
 
(8,967)

 
 
(67,428)

 
 
(7,171)

 
Death benefit payments
 
—

 
 
—

 
 
—

 
 
—

 
Policy loan transfers
 
—

 
 
—

 
 
(6,846)

 
 
66

 
Transfers to other contracts
 
(558)

 
 
(86,885)

 
 
(121,557)

 
 
(62,393)

 
Cost of insurance and administration charges
 
(4,254)

 
 
(15,705)

 
 
(170,000)

 
 
(26,268)

 
Mortality and expenses charges
 
(61)

 
 
(229)

 
 
(2,456)

 
 
(378)

 
Surrender charges
 
(30)

 
 
(2,822)

 
 
(21,221)

 
 
(2,257)

Increase (decrease) in net assets from policy related transactions
 
13,601

 
 
(51,582)

 
 
338,775

 
 
(10,034)

Total increase (decrease)
 
5,840

 
 
(66,317)

 
 
343,992

 
 
(62,774)

Net assets as of December 31, 2018
$
52,060

 
$
151,813

 
$
2,299,838

 
$
397,745

 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Represented the operations of Invesco Global Health Care Series I Division until June 9, 2018.
 
See accompanying notes.


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2018 and 2017, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Janus Henderson Enterprise Service Shares Division (1)
 
Janus Henderson Forty Service Shares Division
 
LargeCap Growth Class 1 Division
 
LargeCap
Growth I Class 1 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net assets as of January 1, 2017
$
—

 
$
1,128,268

 
$
747,187

 
$
1,352,955

Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
—

 
 
—

 
 
3,823

 
 
542

 
Total realized gains (losses) on investments
 
—

 
 
72,328

 
 
23,926

 
 
74,410

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
—

 
 
298,957

 
 
257,995

 
 
401,332

 
Net gains (losses) on investments
 
—

 
 
371,285

 
 
285,744

 
 
476,284

Net increase (decrease) in net assets resulting from operations
 
—

 
 
371,285

 
 
285,744

 
 
476,284

Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
—

 
 
653,799

 
 
357,353

 
 
526,542

 
Contract terminations and surrenders
 
—

 
 
(65,348)

 
 
(10,188)

 
 
(37,189)

 
Death benefit payments
 
—

 
 
—

 
 
—

 
 
(2,030)

 
Policy loan transfers
 
—

 
 
(25,133)

 
 
(24,736)

 
 
(23,687)

 
Transfers to other contracts
 
—

 
 
(100,851)

 
 
(68,287)

 
 
(146,670)

 
Cost of insurance and administration charges
 
—

 
 
(118,506)

 
 
(69,077)

 
 
(109,948)

 
Mortality and expenses charges
 
—

 
 
(1,640)

 
 
(957)

 
 
(1,523)

 
Surrender charges
 
—

 
 
(33,746)

 
 
(5,261)

 
 
(19,205)

Increase (decrease) in net assets from policy related transactions
 
—

 
 
308,575

 
 
178,847

 
 
186,290

Total increase (decrease)
 
—

 
 
679,860

 
 
464,591

 
 
662,574

Net assets as of December 31, 2017
 
—

 
 
1,808,128

 
 
1,211,778

 
 
2,015,529

 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
2

 
 
26,679

 
 
3,104

 
 
937

 
Total realized gains (losses) on investments
 
(12)

 
 
287,193

 
 
137,042

 
 
213,767

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(2,853)

 
 
(314,038)

 
 
(253,523)

 
 
(172,108)

 
Net gains (losses) on investments
 
(2,863)

 
 
(166)

 
 
(113,377)

 
 
42,596

Net increase (decrease) in net assets resulting from operations
 
(2,863)

 
 
(166)

 
 
(113,377)

 
 
42,596

Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
37,033

 
 
1,022,190

 
 
485,752

 
 
999,756

 
Contract terminations and surrenders
 
—

 
 
(63,244)

 
 
(21,001)

 
 
(39,249)

 
Death benefit payments
 
—

 
 
—

 
 
—

 
 
—

 
Policy loan transfers
 
—

 
 
(126,613)

 
 
534

 
 
(7,869)

 
Transfers to other contracts
 
(3,724)

 
 
(283,477)

 
 
(187,820)

 
 
(269,566)

 
Cost of insurance and administration charges
 
(1,450)

 
 
(152,694)

 
 
(84,885)

 
 
(139,461)

 
Mortality and expenses charges
 
(20)

 
 
(2,205)

 
 
(1,228)

 
 
(2,015)

 
Surrender charges
 
—

 
 
(19,904)

 
 
(6,609)

 
 
(12,352)

Increase (decrease) in net assets from policy related transactions
 
31,839

 
 
374,053

 
 
184,743

 
 
529,244

Total increase (decrease)
 
28,976

 
 
373,887

 
 
71,366

 
 
571,840

Net assets as of December 31, 2018
$
28,976

 
$
2,182,015

 
$
1,283,144

 
$
2,587,369

 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Commencement of operations, June 11, 2018.
 
See accompanying notes.


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2018 and 2017, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LargeCap S&P 500 Index Class 1 Division
 
Lord Abbett Series Fund Developing Growth Class VC Division
 
Lord Abbett Series Fund International Opportunities Class VC Division
 
MFS Blended Research Small Cap Equity Service Class Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net assets as of January 1, 2017
$
6,537,457
 
$
4,753

 
$
2,055

 
$
40

Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
119,294
 
 
—

 
 
1,046

 
 
182

 
Total realized gains (losses) on investments
 
563,289
 
 
1,415

 
 
8,733

 
 
3,105

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
733,875
 
 
307

 
 
(1,100)

 
 
1,218

 
Net gains (losses) on investments
 
1,416,458
 
 
1,722

 
 
8,679

 
 
4,505

Net increase (decrease) in net assets resulting from operations
 
1,416,458
 
 
1,722

 
 
8,679

 
 
4,505

Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
2,790,296
 
 
22,299

 
 
101,094

 
 
66,253

 
Contract terminations and surrenders
 
(64,017)
 
 
(2,500)

 
 
—

 
 
—

 
Death benefit payments
 
(671)
 
 
—

 
 
—

 
 
—

 
Policy loan transfers
 
(70,018)
 
 
—

 
 
—

 
 
—

 
Transfers to other contracts
 
(1,416,488)
 
 
(14,859)

 
 
(993)

 
 
(794)

 
Cost of insurance and administration charges
 
(470,613)
 
 
(2,179)

 
 
(4,194)

 
 
(3,742)

 
Mortality and expenses charges
 
(6,516)
 
 
(30)

 
 
(57)

 
 
(52)

 
Surrender charges
 
(33,059)
 
 
(1,291)

 
 
—

 
 
—

Increase (decrease) in net assets from policy related transactions
 
728,914
 
 
1,440

 
 
95,850

 
 
61,665

Total increase (decrease)
 
2,145,372
 
 
3,162

 
 
104,529

 
 
66,170

Net assets as of December 31, 2017
 
8,682,829
 
 
7,915

 
 
106,584

 
 
66,210

 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
176,022
 
 
—

 
 
2,796

 
 
360

 
Total realized gains (losses) on investments
 
416,239
 
 
26,276

 
 
36,127

 
 
9,089

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(1,113,951)
 
 
(56,721)

 
 
(109,375)

 
 
(12,533)

 
Net gains (losses) on investments
 
(521,690)
 
 
(30,445)

 
 
(70,452)

 
 
(3,084)

Net increase (decrease) in net assets resulting from operations
 
(521,690)
 
 
(30,445)

 
 
(70,452)

 
 
(3,084)

Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
2,968,246
 
 
208,915

 
 
242,337

 
 
37,153

 
Contract terminations and surrenders
 
(123,571)
 
 
—

 
 
—

 
 
—

 
Death benefit payments
 
(19,214)
 
 
—

 
 
—

 
 
—

 
Policy loan transfers
 
(68,034)
 
 
—

 
 
—

 
 
—

 
Transfers to other contracts
 
(437,988)
 
 
(573)

 
 
(1,385)

 
 
(34,078)

 
Cost of insurance and administration charges
 
(573,232)
 
 
(13,435)

 
 
(19,466)

 
 
(7,128)

 
Mortality and expenses charges
 
(8,283)
 
 
(195)

 
 
(280)

 
 
(103)

 
Surrender charges
 
(38,890)
 
 
—

 
 
—

 
 
—

Increase (decrease) in net assets from policy related transactions
 
1,699,034
 
 
194,712

 
 
221,206

 
 
(4,156)

Total increase (decrease)
 
1,177,344
 
 
164,267

 
 
150,754

 
 
(7,240)

Net assets as of December 31, 2018
$
9,860,173
 
$
172,182

 
$
257,338

 
$
58,970

 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2018 and 2017, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MFS Mid Cap Value Portfolio Service Class Division
 
MFS New Discovery Service Class Division
 
MFS New Discovery Value Service Class Division
 
MFS Utilities Service Class Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net assets as of January 1, 2017
$
227,911

 
$
228,773

 
$
5,792

 
$
1,037,550

Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
3,545

 
 
—

 
 
119

 
 
56,682

 
Total realized gains (losses) on investments
 
15,160

 
 
4,979

 
 
1,546

 
 
(2,227)

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
20,664

 
 
63,319

 
 
874

 
 
109,712

 
Net gains (losses) on investments
 
39,369

 
 
68,298

 
 
2,539

 
 
164,167

Net increase (decrease) in net assets resulting from operations
 
39,369

 
 
68,298

 
 
2,539

 
 
164,167

Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
228,353

 
 
120,669

 
 
31,948

 
 
530,168

 
Contract terminations and surrenders
 
—

 
 
(1,458)

 
 
(61)

 
 
(16,563)

 
Death benefit payments
 
—

 
 
—

 
 
—

 
 
(2,735)

 
Policy loan transfers
 
(11,787)

 
 
6,364

 
 
—

 
 
(17,338)

 
Transfers to other contracts
 
(42,530)

 
 
(35,856)

 
 
(72)

 
 
(32,729)

 
Cost of insurance and administration charges
 
(37,148)

 
 
(28,960)

 
 
(2,328)

 
 
(131,045)

 
Mortality and expenses charges
 
(514)

 
 
(400)

 
 
(33)

 
 
(1,814)

 
Surrender charges
 
—

 
 
(753)

 
 
(31)

 
 
(8,553)

Increase (decrease) in net assets from policy related transactions
 
136,374

 
 
59,606

 
 
29,423

 
 
319,391

Total increase (decrease)
 
175,743

 
 
127,904

 
 
31,962

 
 
483,558

Net assets as of December 31, 2017
 
403,654

 
 
356,677

 
 
37,754

 
 
1,521,108

 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
3,250

 
 
—

 
 
229

 
 
15,961

 
Total realized gains (losses) on investments
 
41,742

 
 
79,634

 
 
14,796

 
 
5,020

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(102,517)

 
 
(111,047)

 
 
(27,246)

 
 
(8,625)

 
Net gains (losses) on investments
 
(57,525)

 
 
(31,413)

 
 
(12,221)

 
 
12,356

Net increase (decrease) in net assets resulting from operations
 
(57,525)

 
 
(31,413)

 
 
(12,221)

 
 
12,356

Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
254,097

 
 
265,217

 
 
78,010

 
 
650,357

 
Contract terminations and surrenders
 
(3,126)

 
 
(5,000)

 
 
—

 
 
(18,585)

 
Death benefit payments
 
—

 
 
—

 
 
—

 
 
—

 
Policy loan transfers
 
(4,057)

 
 
(736)

 
 
(2,059)

 
 
(7,121)

 
Transfers to other contracts
 
(92,298)

 
 
(22,408)

 
 
(357)

 
 
(83,856)

 
Cost of insurance and administration charges
 
(49,462)

 
 
(39,070)

 
 
(8,961)

 
 
(142,083)

 
Mortality and expenses charges
 
(713)

 
 
(564)

 
 
(129)

 
 
(2,054)

 
Surrender charges
 
(984)

 
 
(1,573)

 
 
—

 
 
(5,849)

Increase (decrease) in net assets from policy related transactions
 
103,457

 
 
195,866

 
 
66,504

 
 
390,809

Total increase (decrease)
 
45,932

 
 
164,453

 
 
54,283

 
 
403,165

Net assets as of December 31, 2018
$
449,586

 
$
521,130

 
$
92,037

 
$
1,924,273

 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2018 and 2017, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MidCap Class 1 Division
 
Multi-Asset Income Class 1 Division
 
Neuberger Berman AMT Large Cap Value Class I Division
 
Oppenheimer Main Street Small Cap Service Shares Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net assets as of January 1, 2017
$
2,560,019

 
$
—

 
$
160,967

 
$
327,632

Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
17,664

 
 
241

 
 
1,141

 
 
2,761

 
Total realized gains (losses) on investments
 
229,262

 
 
51

 
 
6,007

 
 
20,047

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
448,767

 
 
368

 
 
16,445

 
 
30,237

 
Net gains (losses) on investments
 
695,693

 
 
660

 
 
23,593

 
 
53,045

Net increase (decrease) in net assets resulting from operations
 
695,693

 
 
660

 
 
23,593

 
 
53,045

Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
697,947

 
 
14,273

 
 
50,624

 
 
199,220

 
Contract terminations and surrenders
 
(69,652)

 
 
—

 
 
(4,675)

 
 
(22,346)

 
Death benefit payments
 
—

 
 
—

 
 
(491)

 
 
—

 
Policy loan transfers
 
(26,817)

 
 
—

 
 
(4,202)

 
 
10,330

 
Transfers to other contracts
 
(98,520)

 
 
—

 
 
(3,718)

 
 
(52,423)

 
Cost of insurance and administration charges
 
(139,511)

 
 
(486)

 
 
(18,691)

 
 
(30,554)

 
Mortality and expenses charges
 
(1,933)

 
 
(8)

 
 
(258)

 
 
(422)

 
Surrender charges
 
(35,969)

 
 
—

 
 
(2,414)

 
 
(11,539)

Increase (decrease) in net assets from policy related transactions
 
325,545

 
 
13,779

 
 
16,175

 
 
92,266

Total increase (decrease)
 
1,021,238

 
 
14,439

 
 
39,768

 
 
145,311

Net assets as of December 31, 2017
 
3,581,257

 
 
14,439

 
 
200,735

 
 
472,943

 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
10,730

 
 
433

 
 
2,723

 
 
317

 
Total realized gains (losses) on investments
 
516,489

 
 
54

 
 
24,852

 
 
69,541

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(788,345)

 
 
(1,462)

 
 
(28,550)

 
 
(120,369)

 
Net gains (losses) on investments
 
(261,126)

 
 
(975)

 
 
(975)

 
 
(50,511)

Net increase (decrease) in net assets resulting from operations
 
(261,126)

 
 
(975)

 
 
(975)

 
 
(50,511)

Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
671,393

 
 
3,894

 
 
53,912

 
 
160,147

 
Contract terminations and surrenders
 
(75,161)

 
 
(65)

 
 
(4,043)

 
 
(8,639)

 
Death benefit payments
 
—

 
 
—

 
 
—

 
 
—

 
Policy loan transfers
 
(9,313)

 
 
—

 
 
220

 
 
(2,645)

 
Transfers to other contracts
 
(111,674)

 
 
(266)

 
 
(14,414)

 
 
(67,893)

 
Cost of insurance and administration charges
 
(138,798)

 
 
(917)

 
 
(18,841)

 
 
(34,759)

 
Mortality and expenses charges
 
(2,004)

 
 
(13)

 
 
(273)

 
 
(503)

 
Surrender charges
 
(23,655)

 
 
(20)

 
 
(1,272)

 
 
(2,719)

Increase (decrease) in net assets from policy related transactions
 
310,788

 
 
2,613

 
 
15,289

 
 
42,989

Total increase (decrease)
 
49,662

 
 
1,638

 
 
14,314

 
 
(7,522)

Net assets as of December 31, 2018
$
3,630,919

 
$
16,077

 
$
215,049

 
$
465,421

 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2018 and 2017, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal Capital Appreciation
Class 1 Division
 
Principal LifeTime 2010 Class 1 Division
 
Principal LifeTime 2020 Class 1 Division
 
Principal LifeTime 2030 Class 1 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net assets as of January 1, 2017
$
534,274

 
$
230,379

 
$
403,555

 
$
1,855,324

Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
10,691

 
 
2,249

 
 
10,110

 
 
38,211

 
Total realized gains (losses) on investments
 
6,730

 
 
3,214

 
 
5,498

 
 
26,213

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
125,609

 
 
8,412

 
 
52,833

 
 
321,508

 
Net gains (losses) on investments
 
143,030

 
 
13,875

 
 
68,441

 
 
385,932

Net increase (decrease) in net assets resulting from operations
 
143,030

 
 
13,875

 
 
68,441

 
 
385,932

Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
455,497

 
 
20,355

 
 
121,802

 
 
789,506

 
Contract terminations and surrenders
 
(13,432)

 
 
(90,200)

 
 
(5,740)

 
 
(20,983)

 
Death benefit payments
 
(712)

 
 
—

 
 
—

 
 
(4,974)

 
Policy loan transfers
 
(8,515)

 
 
—

 
 
(53)

 
 
(3,798)

 
Transfers to other contracts
 
(38,600)

 
 
(1)

 
 
(158)

 
 
(29,236)

 
Cost of insurance and administration charges
 
(75,923)

 
 
(8,348)

 
 
(34,053)

 
 
(188,109)

 
Mortality and expenses charges
 
(1,052)

 
 
(115)

 
 
(471)

 
 
(2,605)

 
Surrender charges
 
(6,936)

 
 
(46,579)

 
 
(2,964)

 
 
(10,836)

Increase (decrease) in net assets from policy related transactions
 
310,327

 
 
(124,888)

 
 
78,363

 
 
528,965

Total increase (decrease)
 
453,357

 
 
(111,013)

 
 
146,804

 
 
914,897

Net assets as of December 31, 2017
 
987,631

 
 
119,366

 
 
550,359

 
 
2,770,221

 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
13,509

 
 
3,690

 
 
15,026

 
 
75,944

 
Total realized gains (losses) on investments
 
75,456

 
 
3,141

 
 
16,773

 
 
96,890

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(132,588)

 
 
(11,543)

 
 
(58,140)

 
 
(401,991)

 
Net gains (losses) on investments
 
(43,623)

 
 
(4,712)

 
 
(26,341)

 
 
(229,157)

Net increase (decrease) in net assets resulting from operations
 
(43,623)

 
 
(4,712)

 
 
(26,341)

 
 
(229,157)

Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
342,643

 
 
10,121

 
 
69,210

 
 
1,213,489

 
Contract terminations and surrenders
 
(28,501)

 
 
—

 
 
(54,849)

 
 
(28,196)

 
Death benefit payments
 
—

 
 
—

 
 
—

 
 
—

 
Policy loan transfers
 
(6,178)

 
 
—

 
 
170

 
 
(36,060)

 
Transfers to other contracts
 
(49,860)

 
 
(29)

 
 
(240)

 
 
(44,713)

 
Cost of insurance and administration charges
 
(90,816)

 
 
(6,982)

 
 
(34,890)

 
 
(206,261)

 
Mortality and expenses charges
 
(1,311)

 
 
(101)

 
 
(503)

 
 
(2,979)

 
Surrender charges
 
(8,970)

 
 
—

 
 
(17,262)

 
 
(8,874)

Increase (decrease) in net assets from policy related transactions
 
157,007

 
 
3,009

 
 
(38,364)

 
 
886,406

Total increase (decrease)
 
113,384

 
 
(1,703)

 
 
(64,705)

 
 
657,249

Net assets as of December 31, 2018
$
1,101,015

 
$
117,663

 
$
485,654

 
$
3,427,470

 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2018 and 2017, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal LifeTime 2040 Class 1 Division
 
Principal LifeTime 2050 Class 1 Division
 
Principal LifeTime 2060 Class 1 Division
 
Principal LifeTime Strategic Income Class 1 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net assets as of January 1, 2017
$
2,190,468

 
$
1,011,380

 
$
690,990

 
$
117,262

Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
38,232

 
 
16,969

 
 
7,546

 
 
4,315

 
Total realized gains (losses) on investments
 
16,935

 
 
10,424

 
 
8,126

 
 
77

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
440,928

 
 
231,083

 
 
152,165

 
 
8,852

 
Net gains (losses) on investments
 
496,095

 
 
258,476

 
 
167,837

 
 
13,244

Net increase (decrease) in net assets resulting from operations
 
496,095

 
 
258,476

 
 
167,837

 
 
13,244

Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
1,029,077

 
 
602,960

 
 
391,952

 
 
83,437

 
Contract terminations and surrenders
 
(162,403)

 
 
(22,730)

 
 
(21,941)

 
 
—

 
Death benefit payments
 
—

 
 
—

 
 
—

 
 
—

 
Policy loan transfers
 
(9,015)

 
 
(43,965)

 
 
(651)

 
 
—

 
Transfers to other contracts
 
(99,775)

 
 
(41,438)

 
 
(83,861)

 
 
(304)

 
Cost of insurance and administration charges
 
(247,351)

 
 
(155,453)

 
 
(110,438)

 
 
(12,576)

 
Mortality and expenses charges
 
(3,424)

 
 
(2,151)

 
 
(1,528)

 
 
(174)

 
Surrender charges
 
(83,865)

 
 
(11,738)

 
 
(11,330)

 
 
—

Increase (decrease) in net assets from policy related transactions
 
423,244

 
 
325,485

 
 
162,203

 
 
70,383

Total increase (decrease)
 
919,339

 
 
583,961

 
 
330,040

 
 
83,627

Net assets as of December 31, 2017
 
3,109,807

 
 
1,595,341

 
 
1,021,030

 
 
200,889

 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
70,612

 
 
37,408

 
 
25,444

 
 
6,381

 
Total realized gains (losses) on investments
 
127,574

 
 
83,167

 
 
63,201

 
 
2,832

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(480,802)

 
 
(285,123)

 
 
(206,178)

 
 
(16,714)

 
Net gains (losses) on investments
 
(282,616)

 
 
(164,548)

 
 
(117,533)

 
 
(7,501)

Net increase (decrease) in net assets resulting from operations
 
(282,616)

 
 
(164,548)

 
 
(117,533)

 
 
(7,501)

Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
953,144

 
 
544,397

 
 
568,161

 
 
67,155

 
Contract terminations and surrenders
 
(103,220)

 
 
(26,669)

 
 
(81,585)

 
 
(3,965)

 
Death benefit payments
 
—

 
 
—

 
 
—

 
 
—

 
Policy loan transfers
 
(41,897)

 
 
(7,296)

 
 
(529)

 
 
—

 
Transfers to other contracts
 
(10,835)

 
 
(21,384)

 
 
(36,221)

 
 
(1,353)

 
Cost of insurance and administration charges
 
(267,390)

 
 
(185,249)

 
 
(141,285)

 
 
(13,938)

 
Mortality and expenses charges
 
(3,864)

 
 
(2,677)

 
 
(2,041)

 
 
(201)

 
Surrender charges
 
(32,485)

 
 
(8,393)

 
 
(25,677)

 
 
(1,248)

Increase (decrease) in net assets from policy related transactions
 
493,453

 
 
292,729

 
 
280,823

 
 
46,450

Total increase (decrease)
 
210,837

 
 
128,181

 
 
163,290

 
 
38,949

Net assets as of December 31, 2018
$
3,320,644

 
$
1,723,522

 
$
1,184,320

 
$
239,838

 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2018 and 2017, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Putnam VT Growth Opportunities Class IB Division
 
Real Estate Securities Class 1 Division
 
SAM Balanced Portfolio Class 1 Division
 
SAM Conservative Balanced Portfolio Class 1 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net assets as of January 1, 2017
$
178,897

 
$
2,606,540

 
$
11,510,237

 
$
2,393,319

Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
213

 
 
57,725

 
 
293,316

 
 
84,767

 
Total realized gains (losses) on investments
 
7,586

 
 
329,510

 
 
139,777

 
 
20,832

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
49,201

 
 
(110,632)

 
 
1,441,776

 
 
212,689

 
Net gains (losses) on investments
 
57,000

 
 
276,603

 
 
1,874,869

 
 
318,288

Net increase (decrease) in net assets resulting from operations
 
57,000

 
 
276,603

 
 
1,874,869

 
 
318,288

Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
67,355

 
 
1,431,127

 
 
4,403,711

 
 
1,545,276

 
Contract terminations and surrenders
 
(4,802)

 
 
(55,619)

 
 
(75,817)

 
 
(43,428)

 
Death benefit payments
 
(958)

 
 
(2,036)

 
 
(2,100)

 
 
—

 
Policy loan transfers
 
1,579

 
 
(39,479)

 
 
(130,976)

 
 
(87,136)

 
Transfers to other contracts
 
(17,922)

 
 
(283,357)

 
 
(1,098,731)

 
 
(314,205)

 
Cost of insurance and administration charges
 
(20,912)

 
 
(296,318)

 
 
(984,121)

 
 
(251,370)

 
Mortality and expenses charges
 
(289)

 
 
(4,101)

 
 
(13,627)

 
 
(3,479)

 
Surrender charges
 
(2,480)

 
 
(28,722)

 
 
(39,152)

 
 
(22,426)

Increase (decrease) in net assets from policy related transactions
 
21,571

 
 
721,495

 
 
2,059,187

 
 
823,232

Total increase (decrease)
 
78,571

 
 
998,098

 
 
3,934,056

 
 
1,141,520

Net assets as of December 31, 2017
 
257,468

 
 
3,604,638

 
 
15,444,293

 
 
3,534,839

 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
—

 
 
69,808

 
 
511,340

 
 
133,566

 
Total realized gains (losses) on investments
 
21,288

 
 
279,116

 
 
652,428

 
 
142,434

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(19,391)

 
 
(504,543)

 
 
(2,007,060)

 
 
(419,594)

 
Net gains (losses) on investments
 
1,897

 
 
(155,619)

 
 
(843,292)

 
 
(143,594)

Net increase (decrease) in net assets resulting from operations
 
1,897

 
 
(155,619)

 
 
(843,292)

 
 
(143,594)

Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
112,554

 
 
1,209,273

 
 
3,668,198

 
 
973,079

 
Contract terminations and surrenders
 
(6,904)

 
 
(75,710)

 
 
(271,488)

 
 
(23,231)

 
Death benefit payments
 
—

 
 
—

 
 
—

 
 
—

 
Policy loan transfers
 
(267)

 
 
(14,415)

 
 
(248,170)

 
 
(45,372)

 
Transfers to other contracts
 
(14,704)

 
 
(421,093)

 
 
(257,310)

 
 
(28,503)

 
Cost of insurance and administration charges
 
(23,591)

 
 
(314,470)

 
 
(1,019,804)

 
 
(282,127)

 
Mortality and expenses charges
 
(343)

 
 
(4,544)

 
 
(14,734)

 
 
(4,076)

 
Surrender charges
 
(2,173)

 
 
(23,828)

 
 
(85,443)

 
 
(7,311)

Increase (decrease) in net assets from policy related transactions
 
64,572

 
 
355,213

 
 
1,771,249

 
 
582,459

Total increase (decrease)
 
66,469

 
 
199,594

 
 
927,957

 
 
438,865

Net assets as of December 31, 2018
$
323,937

 
$
3,804,232

 
$
16,372,250

 
$
3,973,704

 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2018 and 2017, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SAM Conservative Growth Portfolio Class 1 Division
 
SAM Flexible Income Portfolio Class 1 Division
 
SAM Strategic Growth Portfolio Class 1 Division
 
Short-Term Income Class 1 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net assets as of January 1, 2017
$
11,599,631

 
$
2,262,760

 
$
18,698,030

 
$
895,073

Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
232,245

 
 
99,966

 
 
323,669

 
 
33,377

 
Total realized gains (losses) on investments
 
325,312

 
 
14,357

 
 
566,773

 
 
(2,647)

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
2,019,231

 
 
120,389

 
 
3,510,316

 
 
4,174

 
Net gains (losses) on investments
 
2,576,788

 
 
234,712

 
 
4,400,758

 
 
34,904

Net increase (decrease) in net assets resulting from operations
 
2,576,788

 
 
234,712

 
 
4,400,758

 
 
34,904

Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
5,266,228

 
 
1,234,345

 
 
6,319,287

 
 
1,076,579

 
Contract terminations and surrenders
 
(243,434)

 
 
(10,878)

 
 
(349,260)

 
 
(7,691)

 
Death benefit payments
 
(2,433)

 
 
(7,790)

 
 
(76,500)

 
 
—

 
Policy loan transfers
 
(153,733)

 
 
(6,833)

 
 
(286,504)

 
 
970

 
Transfers to other contracts
 
(533,997)

 
 
(178,312)

 
 
(811,258)

 
 
(141,264)

 
Cost of insurance and administration charges
 
(1,024,224)

 
 
(267,228)

 
 
(1,801,488)

 
 
(89,169)

 
Mortality and expenses charges
 
(14,179)

 
 
(3,699)

 
 
(24,936)

 
 
(1,235)

 
Surrender charges
 
(125,710)

 
 
(5,617)

 
 
(180,359)

 
 
(3,972)

Increase (decrease) in net assets from policy related transactions
 
3,168,518

 
 
753,988

 
 
2,788,982

 
 
834,218

Total increase (decrease)
 
5,745,306

 
 
988,700

 
 
7,189,740

 
 
869,122

Net assets as of December 31, 2017
 
17,344,937

 
 
3,251,460

 
 
25,887,770

 
 
1,764,195

 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
528,934

 
 
120,310

 
 
676,914

 
 
39,610

 
Total realized gains (losses) on investments
 
900,349

 
 
65,080

 
 
1,442,615

 
 
(7,112)

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(2,712,640)

 
 
(242,089)

 
 
(4,635,188)

 
 
(13,793)

 
Net gains (losses) on investments
 
(1,283,357)

 
 
(56,699)

 
 
(2,515,659)

 
 
18,705

Net increase (decrease) in net assets resulting from operations
 
(1,283,357)

 
 
(56,699)

 
 
(2,515,659)

 
 
18,705

Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
5,073,358

 
 
617,824

 
 
6,756,063

 
 
512,619

 
Contract terminations and surrenders
 
(934,609)

 
 
(213,412)

 
 
(538,926)

 
 
(8,580)

 
Death benefit payments
 
—

 
 
—

 
 
—

 
 
—

 
Policy loan transfers
 
(241,889)

 
 
10,679

 
 
(159,025)

 
 
(5,497)

 
Transfers to other contracts
 
(355,691)

 
 
(401,653)

 
 
(588,894)

 
 
(274,448)

 
Cost of insurance and administration charges
 
(1,139,034)

 
 
(261,093)

 
 
(1,902,294)

 
 
(106,360)

 
Mortality and expenses charges
 
(16,456)

 
 
(3,772)

 
 
(27,483)

 
 
(1,538)

 
Surrender charges
 
(294,140)

 
 
(67,165)

 
 
(169,611)

 
 
(2,700)

Increase (decrease) in net assets from policy related transactions
 
2,091,539

 
 
(318,592)

 
 
3,369,830

 
 
113,496

Total increase (decrease)
 
808,182

 
 
(375,291)

 
 
854,171

 
 
132,201

Net assets as of December 31, 2018
$
18,153,119

 
$
2,876,169

 
$
26,741,941

 
$
1,896,396

 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2018 and 2017, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SmallCap Class 1 Division
 
Templeton Global Bond VIP Class 2 Division
 
TOPS Managed Risk Balanced ETF Class 2 Division
 
TOPS Managed Risk Growth ETF Class 2 Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net assets as of January 1, 2017
$
1,469,732

 
$
904,340

 
$
332,667

 
$
1,422,000

Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
6,346

 
 
—

 
 
6,111

 
 
25,252

 
Total realized gains (losses) on investments
 
12,645

 
 
(425)

 
 
265

 
 
2,435

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
189,401

 
 
12,329

 
 
31,341

 
 
233,891

 
Net gains (losses) on investments
 
208,392

 
 
11,904

 
 
37,717

 
 
261,578

Net increase (decrease) in net assets resulting from operations
 
208,392

 
 
11,904

 
 
37,717

 
 
261,578

Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
545,204

 
 
612,070

 
 
98,376

 
 
371,274

 
Contract terminations and surrenders
 
(40,032)

 
 
(19,444)

 
 
(135)

 
 
(6,863)

 
Death benefit payments
 
—

 
 
(2,769)

 
 
—

 
 
—

 
Policy loan transfers
 
5,891

 
 
(6,786)

 
 
(2,965)

 
 
(21,143)

 
Transfers to other contracts
 
(88,526)

 
 
(28,768)

 
 
(4,885)

 
 
(22,589)

 
Cost of insurance and administration charges
 
(158,614)

 
 
(92,923)

 
 
(28,350)

 
 
(185,459)

 
Mortality and expenses charges
 
(2,195)

 
 
(1,287)

 
 
(392)

 
 
(2,567)

 
Surrender charges
 
(20,673)

 
 
(10,041)

 
 
(70)

 
 
(3,544)

Increase (decrease) in net assets from policy related transactions
 
241,055

 
 
450,052

 
 
61,579

 
 
129,109

Total increase (decrease)
 
449,447

 
 
461,956

 
 
99,296

 
 
390,687

Net assets as of December 31, 2017
 
1,919,179

 
 
1,366,296

 
 
431,963

 
 
1,812,687

 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (decrease) in net assets
 
 
 
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
6,936

 
 
—

 
 
7,932

 
 
30,076

 
Total realized gains (losses) on investments
 
166,926

 
 
(10,364)

 
 
25,752

 
 
101,010

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
 
 
 
of investments
 
(426,676)

 
 
39,337

 
 
(62,522)

 
 
(304,973)

 
Net gains (losses) on investments
 
(252,814)

 
 
28,973

 
 
(28,838)

 
 
(173,887)

Net increase (decrease) in net assets resulting from operations
 
(252,814)

 
 
28,973

 
 
(28,838)

 
 
(173,887)

Policy related transactions:
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
 
 
 
premium taxes
 
630,894

 
 
454,966

 
 
102,682

 
 
395,581

 
Contract terminations and surrenders
 
(33,417)

 
 
(16,939)

 
 
(363)

 
 
(9,381)

 
Death benefit payments
 
—

 
 
(801)

 
 
—

 
 
—

 
Policy loan transfers
 
(66,960)

 
 
(2,340)

 
 
3,174

 
 
(307)

 
Transfers to other contracts
 
(76,707)

 
 
(129,989)

 
 
(18,784)

 
 
(52,700)

 
Cost of insurance and administration charges
 
(160,346)

 
 
(104,455)

 
 
(26,540)

 
 
(190,996)

 
Mortality and expenses charges
 
(2,317)

 
 
(1,508)

 
 
(383)

 
 
(2,760)

 
Surrender charges
 
(10,517)

 
 
(5,331)

 
 
(114)

 
 
(2,952)

Increase (decrease) in net assets from policy related transactions
 
280,630

 
 
193,603

 
 
59,672

 
 
136,485

Total increase (decrease)
 
27,816

 
 
222,576

 
 
30,834

 
 
(37,402)

Net assets as of December 31, 2018
$
1,946,995

 
$
1,588,872

 
$
462,797

 
$
1,775,285

 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 


Principal National Life Insurance Company
Variable Life Separate Account
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Net Assets
 
 
 
 
 
 
 
 
 
 
Years ended December 31, 2018 and 2017, except as noted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TOPS Managed Risk Moderate Growth ETF
Class 2 Division
 
VanEck Global Hard Assets Class S Division
 
Wanger International Division
 
 
 
 
 
 
 
 
 
 
 
 
Net assets as of January 1, 2017
$
534,236

 
$
504,547

 
$
99,367

Increase (decrease) in net assets
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
11,212

 
 
—

 
 
2,128

 
Total realized gains (losses) on investments
 
(1,739)

 
 
(18,843)

 
 
5,660

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
of investments
 
73,973

 
 
19,939

 
 
35,748

 
Net gains (losses) on investments
 
83,446

 
 
1,096

 
 
43,536

Net increase (decrease) in net assets resulting from operations
 
83,446

 
 
1,096

 
 
43,536

Policy related transactions:
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
premium taxes
 
199,408

 
 
271,263

 
 
155,964

 
Contract terminations and surrenders
 
(6,280)

 
 
(4,274)

 
 
(15,431)

 
Death benefit payments
 
—

 
 
—

 
 
—

 
Policy loan transfers
 
(5,622)

 
 
(4,342)

 
 
—

 
Transfers to other contracts
 
(15,983)

 
 
(46,626)

 
 
(29,026)

 
Cost of insurance and administration charges
 
(40,620)

 
 
(51,125)

 
 
(21,105)

 
Mortality and expenses charges
 
(563)

 
 
(707)

 
 
(293)

 
Surrender charges
 
(3,243)

 
 
(2,207)

 
 
(7,969)

Increase (decrease) in net assets from policy related transactions
 
127,097

 
 
161,982

 
 
82,140

Total increase (decrease)
 
210,543

 
 
163,078

 
 
125,676

Net assets as of December 31, 2017
 
744,779

 
 
667,625

 
 
225,043

 
 
 
 
 
 
 
 
 
 
Increase (decrease) in net assets
 
 
 
 
 
 
 
 
Operations:
 
 
 
 
 
 
 
 
 
Net investment income (loss)
 
14,514

 
 
—

 
 
8,668

 
Total realized gains (losses) on investments
 
42,334

 
 
(29,128)

 
 
47,302

 
Change in net unrealized appreciation (depreciation)
 
 
 
 
 
 
 
 
 
of investments
 
(121,238)

 
 
(161,623)

 
 
(154,781)

 
Net gains (losses) on investments
 
(64,390)

 
 
(190,751)

 
 
(98,811)

Net increase (decrease) in net assets resulting from operations
 
(64,390)

 
 
(190,751)

 
 
(98,811)

Policy related transactions:
 
 
 
 
 
 
 
 
 
Net premium payments, less sales charges and applicable
 
 
 
 
 
 
 
 
 
premium taxes
 
206,368

 
 
203,621

 
 
406,870

 
Contract terminations and surrenders
 
(654)

 
 
(8,672)

 
 
(11,164)

 
Death benefit payments
 
—

 
 
—

 
 
—

 
Policy loan transfers
 
(68)

 
 
(14,955)

 
 
(5,991)

 
Transfers to other contracts
 
(2,028)

 
 
(93,882)

 
 
(7,571)

 
Cost of insurance and administration charges
 
(47,864)

 
 
(53,477)

 
 
(41,463)

 
Mortality and expenses charges
 
(691)

 
 
(772)

 
 
(599)

 
Surrender charges
 
(206)

 
 
(2,729)

 
 
(3,513)

Increase (decrease) in net assets from policy related transactions
 
154,857

 
 
29,134

 
 
336,569

Total increase (decrease)
 
90,467

 
 
(161,617)

 
 
237,758

Net assets as of December 31, 2018
$
835,246

 
$
506,008

 
$
462,801

 
 
 
 
 
 
 
 
 
 
See accompanying notes.
 


Principal National Life Insurance Company
Variable Life Separate Account

Notes to Financial Statements
December 31, 2018


1. Nature of Operations and Significant Accounting Policies

Description of Business

Principal National Life Insurance Company Variable Life Separate Account (“the Separate Account”) is a segregated investment account of Principal National Life Insurance Company (“Principal National”) and is registered under the Investment Company Act of 1940 as a unit investment trust, with no stated limitations on the number of authorized units. As directed by eligible contractholders, each division of the Separate Account invests exclusively in shares representing interests in a corresponding investment option. As of December 31, 2018, contractholder investment options included the following diversified open-end management investment companies:

Principal Variable Contracts Funds, Inc. – Class 1: (1)
Core Plus Bond Account
Diversified International Account
Equity Income Account
Government & High Quality Bond Account
International Emerging Markets Account
LargeCap Growth Account
LargeCap Growth Account I
LargeCap S&P 500 Index Account
MidCap Account
Multi-Asset Income Account (7)
Principal Capital Appreciation Account (4)
Principal LifeTime 2010 Account
Principal LifeTime 2020 Account
Principal LifeTime 2030 Account
Principal LifeTime 2040 Account
Principal LifeTime 2050 Account
Principal LifeTime 2060 Account
Principal LifeTime Strategic Income Account
Real Estate Securities Account
Short-Term Income Account
SmallCap Account
Strategic Asset Management (“SAM”) Portfolios:
Balanced Portfolio
Conservative Balanced Portfolio
Conservative Growth Portfolio
Flexible Income Portfolio
Strategic Growth Portfolio
AllianceBernstein Variable Product Series Fund, Inc.:
International Value Portfolio – Class A
Small Cap Growth Portfolio – Class A
Small/Mid Cap Value Portfolio – Class A
American Century Investments®:
VP Capital Appreciation Fund – Class II (2)
VP Income & Growth Fund – Class II
VP Inflation Protection Fund – Class II
VP Mid Cap Value Fund – Class II
VP Value Fund – Class II

Principal National Life Insurance Company
Variable Life Separate Account

Notes to Financial Statements
December 31, 2018




American Funds Insurance Series:
Blue Chip Income and Growth Fund – Class 2 (5)
Global Balanced Fund Class 2 (9)
Growth Fund – Class 2 (3)
International Fund – Class 2 (3)
New World Fund – Class 2 (3)
Calvert VP Portfolio:
Investment Grade Bond Index – Class I (2)
Russell 2000 Small Cap Index – Class F
S&P 500 Index (2)
S&P MidCap 400 Index – Class F
ClearBridge Variable Mid Cap Portfolio – Class I Shares (5)
Delaware VIP® Trust Series:
Small Cap Value – Service Class
Smid Cap Core – Service Class
Dreyfus IP MidCap Stock Portfolio – Service Shares (3)
DWS Small Mid Cap Value VIP – Class B
Fidelity® Variable Insurance Products:
Contrafund® Portfolio – Service Class 2
Equity-Income Portfolio – Service Class 2
Government Money Market Portfolio – Service Class (6)
High Income Portfolio – Service Class 2
    Mid Cap Portfolio – Service Class 2
Franklin Templeton Variable Insurance Products Trust:
Franklin Mutual Global Discovery VIP Fund – Class 2
Franklin Rising Dividends VIP Fund – Class 2
Franklin Small Cap Value VIP Fund – Class 2
Templeton Global Bond VIP Fund - Class 2
Invesco V.I. Fund:
American Franchise Fund – Series II Shares
    American Value Fund – Series I Shares (5)
Core Equity Fund – Series II Shares
    Health Care Fund – Series I Shares
    Mid Cap Core Equity Fund – Series II Shares    
Janus Henderson:
Enterprise – Service Shares (9)
Series Forty Portfolio – Service Shares
Lord Abbett Series Fund:
Developing Growth Portfolio – Class VC (7)
International Opportunities Portfolio – Class VC (7)
MFS ®:
Blended Research Small Cap Equity Portfolio – Service Class (7)
Mid Cap Value Portfolio – Service Class (5)
New Discovery Series – Service Class
New Discovery Value Portfolio – Service Class (7)
Utilities Series – Service Class
Neuberger Berman Advisors Management Trust:
    Large Cap Value Portfolio – Class I
Oppenheimer Main Street Small Cap Fund®/VA - Service Shares
Putnam VT Growth Opportunities Fund – Class IB (8)



Principal National Life Insurance Company
Variable Life Separate Account

Notes to Financial Statements
December 31, 2018


TOPS Managed Risk Series:
Balanced ETF Portfolio – Class 2     
Growth ETF Portfolio – Class 2
    Moderate Growth ETF Portfolio – Class 2
VanEck VIP Global Hard Assets Fund – Class S Shares
Wanger International (5)

(1)
Organized by Principal National.
(2)
Commencement of operations, April 24, 2014.
(3)
Commencement of operations, May 17, 2014.
(4)
Commencement of operations, April 17, 2015.
(5)
Commencement of operations, May 18, 2015.
(6)
Commencement of operations, February 8, 2016.
(7)
Commencement of operations, May 23, 2016.
(8)
Commencement of operations, November 18, 2016.
(9) Commencement of operations, June 11, 2018.

Commencement of operations date is the date the division became available to contractholders.

During 2018, the following divisions were liquidated and subsequently reinvested:

Date
 
Liquidation Division
 
Reinvested Division
 
Transferred Assets
October 13, 2018
 
LargeCap Value Class 1 Division
 
Equity Income Class 1 Division
 
$
2,142,627

The assets of the Separate Account are owned by Principal National. The assets of the Separate Account support Principal® Variable Universal Life Income III variable life insurance contracts of Principal National and may not be used to satisfy the liabilities arising from any other business of Principal National.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements and accompanying notes of the Separate Account in accordance with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported and disclosed. These estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed in the financial statements and accompanying notes.

Investments

Investments are stated at the closing net asset value (“NAV”) per share on December 31, 2018. Realized capital gains (losses) on sales of investments are determined on the basis of specific identification under the first-in, first-out method. Investment transactions are accounted for on a trade date basis. Dividends and realized gains (losses) on investments are recognized on an accrual basis as of the ex-dividend date and are automatically reinvested in shares of the funds on the payable date.

Fair Value Measurements

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 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.

Principal National Life Insurance Company
Variable Life Separate Account

Notes to Financial Statements
December 31, 2018



•
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.

All investments of the open-end management investment companies listed above represent investments in mutual funds for which a daily NAV is calculated and published. Therefore, all investments are reflected in Level 1 of the fair value hierarchy.

2. Expenses and Related Party Transactions

Principal National is compensated for the following expenses and charges:

Principal® Variable Universal Life Income III contracts - Asset based charges assumed by Principal National are compensated for by a monthly charge equivalent to an annual rate of 0.15% of the asset value of each policy through the tenth policy year. The current administrative charge is $25 per month during the first policy year. After the first policy year, the administration charge is $10 per month. A cost of insurance charge, which is based on Principal National’s expected future mortality experience, is deducted as compensation for insurance charges. All charges are assessed through the redemption of units. A sales charge of 4.25% of premiums paid up to target premium is deducted from each payment on behalf of each participant during the first policy year. In policy years two and later, the sales charge is 3.00% of premiums paid up to target premium. A tax charge of 2.00% for state and local taxes and 1.25% for federal taxes is deducted from each premium payment on behalf of each participant. The sales and tax charges are deducted from contributions by Principal National prior to their transfer to the Separate Account.

During the year ended December 31, 2018, investment advisory and management fees were paid indirectly to Principal Global Investors, LLC (“Manager”) (wholly owned by Principal Financial Services, Inc.) in its capacity as advisor to Principal Variable Contracts Funds, Inc. A portion of the management fee is paid by the Manager to the sub-advisor of each of the divisions, some of which are affiliates of the Manager. The annual rate paid by the SAM Portfolios is based upon the aggregate average daily net assets (“aggregate net assets”) of the SAM Portfolios. The investment advisory and management fee schedule for the SAM Portfolios is 0.25% of aggregate net assets up to the first $1 billion and 0.20% of aggregate net assets over $1 billion. The Principal LifeTime Accounts do not pay investment advisory and management fees.


Principal National Life Insurance Company
Variable Life Separate Account

Notes to Financial Statements
December 31, 2018



The annual rates used in this calculation for each of the other divisions are shown in the following tables.

 
 
 
 
 
First $100
 
Next $100
 
Next $100
 
Next $100
 
Over $400
Core Plus Bond Account
0.50
%
 
 
0.45
%
 
 
0.40
%
 
 
0.35
%
 
 
0.30
%
Equity Income Account
0.60

 
 
0.55

 
 
0.50

 
 
0.45

 
 
0.40

LargeCap Growth Account I
0.80

 
 
0.75

 
 
0.70

 
 
0.65

 
 
0.60

MidCap Account
0.65

 
 
0.60

 
 
0.55

 
 
0.50

 
 
0.45

Real Estate Securities Account
0.90

 
 
0.85

 
 
0.80

 
 
0.75

 
 
0.70

SmallCap Account
0.85

 
 
0.80

 
 
0.75

 
 
0.70

 
 
0.65

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
First $100
 
Next $250
 
Next $250
 
Next $250
 
Over $1,000
Diversified International Account
0.85
%
 
 
0.80
%
 
 
0.75
%
 
 
0.70
%
 
 
0.65
%
International Emerging Markets Account
1.25

 
 
1.20

 
 
1.15

 
 
1.10

 
 
1.05


 
Net Assets of Accounts
 
 
Net Assets of Accounts
 
(in millions)
 
 
(in millions)
 
First $500
 
Next $500
 
Next $1,000
 
Next $1,000
 
Over $3,000
 
 
First $200
 
Next $300
 
Over $500
LargeCap Growth
 
 
 
 
 
 
 
 
 
 
Short-Term
 
 
 
 
 
Account
0.68%
 
0.63%
 
0.61%
 
0.56%
 
0.51%
 
Income Account
0.50%
 
0.45%
 
0.40%

 
Net Assets of Accounts
 
 
 
 
(in millions)
 
 
 
 
First $500
 
Over $500
 
 
All Net Assets
Principal Capital Appreciation
 
 
 
 
LargeCap S&P 500 Index
 
Account
0.625%
 
0.500%
 
Account
0.25%
 
 
 
 
 
Multi-Asset Income Account
0.03
 
 
 
 
 
 
 
 
Net Assets of Accounts
 
 
 
 
(in millions)
 
 
 
 
First $2,000
 
Over $2,000
 
 
 
Government & High Quality Bond
 
 
 
 
 
 
Account
0.50%
 
0.45%
 
 
 



Principal National Life Insurance Company
Variable Life Separate Account

Notes to Financial Statements
December 31, 2018



The Manager has contractually agreed to limit the expenses (including acquired fund fees and expenses, but excluding interest expense, expenses related to fund investments, and other extraordinary expenses) for certain classes of shares of certain of the divisions. The reductions and reimbursements are in amounts that maintain total operating expenses at or below certain limits. The limits are expressed as a percentage of average daily net assets attributable to each class of shares on an annualized basis during the reporting period. The operating expense limits were as follows:

 
From January 1, 2018 through December 31, 2018
 
Class 1
 
Expiration
SAM Balanced Portfolio
0.86%
 
April 30, 2019
SAM Conservative Balanced Portfolio
0.84
 
April 30, 2019
SAM Conservative Growth Portfolio
0.99
 
April 30, 2019
SAM Strategic Growth Portfolio
0.99
 
April 30, 2019

The Manager has contractually agreed to limit the Separate Account’s management and investment advisory fees. The expense limit will reduce the Separate Account’s management and investment advisory fees by the following amounts:

 
All Classes
 
Expiration
LargeCap Growth Account I
0.016%
 
April 30, 2019

The Manager has contractually agreed to limit the expenses (excluding interest expense, expense related to fund investments, acquired fund fees and expenses, and other extraordinary expenses) for certain classes of shares of certain of the divisions. The reductions and reimbursements are in amounts that maintain total operating expenses at or below certain limits. The limits are expressed as a percentage of average daily net assets attributable to each class of shares on an annualized basis during the reporting period. The operating expense limits were as follows:

 
From January 1, 2018 through December 31, 2018
 
Class 1
 
Expiration
Principal LifeTime 2060 Account
0.10%
 
April 30, 2019
Multi-Asset Income Account
0.08
 
April 30, 2019
 
 
 
 

The Manager has contractually agreed to reduce the Short-Term Income Account’s expenses by 0.01% through the period ended April 30, 2019.

Reinsurance

A modified coinsurance reinsurance agreement is in place between Principal Life Insurance Company and Principal National for the Separate Accounts.

3. Federal Income Taxes

The operations of the Separate Account are a part of the operations of Principal National. Under current practice, no federal income taxes are allocated by Principal National to the operations of the Separate Account.
 

Principal National Life Insurance Company
Variable Life Separate Account

Notes to Financial Statements
December 31, 2018



4. Purchases and Sales of Investments

The aggregate cost of purchases and proceeds from sales of investments were as follows for the year ended December 31, 2018:

 
 
2018
Division
 
Purchases
 
Sales
 
 
 
 
 
 
 
AllianceBernstein International Value Class A
 
$
339,545
 
$
124,008
 
 
 
 
 
 
 
AllianceBernstein Small Cap Growth Class A
 
$
42,350
 
$
17,244
 
 
 
 
 
 
 
AllianceBernstein Small/Mid Cap Value Class A
 
$
601,640
 
$
280,066
 
 
 
 
 
 
 
American Century VP Capital Appreciation Class II
 
$
141,368
 
$
42,119
 
 
 
 
 
 
 
American Century VP Income & Growth Class II
 
$
345,698
 
$
101,649
 
 
 
 
 
 
 
American Century VP Inflation Protection Class II
 
$
197,272
 
$
63,583
 
 
 
 
 
 
 
American Century VP Mid Cap Value Class II
 
$
710,411
 
$
208,204
 
 
 
 
 
 
 
American Century VP Value Class II
 
$
322,894
 
$
256,393
 
 
 
 
 
 
 
American Funds Insurance Series Blue Chip Income and Growth Class 2
 
$
606,072
 
$
131,362
 
 
 
 
 
 
 
American Funds Insurance Series Global Balanced Fund Class 2
 
$
9,466
 
$
2,616
 
 
 
 
 
 
 
American Funds Insurance Series Growth Fund Class 2
 
$
1,151,525
 
$
404,671
 
 
 
 
 
 
 
American Funds Insurance Series International Fund Class 2
 
$
557,666
 
$
211,730
 
 
 
 
 
 
 
American Funds Insurance Series New World Fund Class 2
 
$
519,628
 
$
154,892
 
 
 
 
 
 
 
Calvert Investment Grade Bond Index Class I
 
$
244,331
 
$
79,343
 
 
 
 
 
 
 
Calvert Russell 2000 Small Cap Index Class F
 
$
574,673
 
$
183,585
 
 
 
 
 
 
 
Calvert S&P 500 Index
 
$
116,479
 
$
29,659
 
 
 
 
 
 
 
Calvert S&P MidCap 400 Index Class F
 
$
834,578
 
$
201,920
 
 
 
 
 
 
 
ClearBridge Mid Cap Portfolio Series I
 
$
91,319
 
$
36,600
 
 
 
 
 
 
 
Core Plus Bond Class 1
 
$
649,588
 
$
221,117
 
 
 
 
 
 
 
Delaware Small Cap Value Service Class
 
$
565,425
 
$
172,262
 
 
 
 
 
 
 
Delaware Smid Cap Core Service Class
 
$
886,128
 
$
225,260
 
 
 
 
 
 
 

Principal National Life Insurance Company
Variable Life Separate Account

Notes to Financial Statements
December 31, 2018


 
 
2018
Diversified International Class 1
 
$
797,831
 
$
298,752
 
 
 
 
 
 
 
Dreyfus IP MidCap Stock Service Shares
 
$
126,311
 
$
24,969
 
 
 
 
 
 
 
DWS Small Mid Cap Value Class B
 
$
130,251
 
$
36,091
 
 
 
 
 
 
 
Equity Income Class 1
 
$
2,977,895
 
$
310,659
 
 
 
 
 
 
 
Fidelity VIP Contrafund Service Class 2
 
$
2,397,917
 
$
819,787
 
 
 
 
 
 
 
Fidelity VIP Equity-Income Service Class 2
 
$
381,655
 
$
184,657
 
 
 
 
 
 
 
Fidelity VIP Government Money Market Service Class
 
$
12,134,668
 
$
11,790,567
 
 
 
 
 
 
 
Fidelity VIP High Income Service Class 2
 
$
790,989
 
$
446,150
 
 
 
 
 
 
 
Fidelity VIP Mid Cap Service Class 2
 
$
1,424,610
 
$
544,810
 
 
 
 
 
 
 
Franklin Mutual Global Discovery VIP Class 2
 
$
484,141
 
$
234,460
 
 
 
 
 
 
 
Franklin Rising Dividends VIP Class 2
 
$
749,783
 
$
261,659
 
 
 
 
 
 
 
Franklin Small Cap Value VIP Class 2
 
$
340,361
 
$
93,787
 
 
 
 
 
 
 
Government & High Quality Bond Class 1
 
$
538,142
 
$
166,287
 
 
 
 
 
 
 
International Emerging Markets Class 1
 
$
1,142,843
 
$
546,524
 
 
 
 
 
 
 
Invesco American Franchise Series II
 
$
79,996
 
$
43,367
 
 
 
 
 
 
 
Invesco American Value Series I
 
$
26,964
 
$
4,999
 
 
 
 
 
 
 
Invesco Core Equity Series II
 
$
73,915
 
$
114,608
 
 
 
 
 
 
 
Invesco Health Care Series I
 
$
1,032,561
 
$
389,508
 
 
 
 
 
 
 
Invesco Mid Cap Core Equity Series II
 
$
152,781
 
$
98,401
 
 
 
 
 
 
 
Janus Henderson Enterprise Service Shares
 
$
37,035
 
$
5,194
 
 
 
 
 
 
 
Janus Henderson Forty Service Shares
 
$
1,335,502
 
$
648,137
 
 
 
 
 
 
 
LargeCap Growth Class 1
 
$
592,936
 
$
301,009
 
 
 
 
 
 
 
LargeCap Growth I Class 1
 
$
1,191,854
 
$
470,512
 
 
 
 
 
 
 
LargeCap S&P 500 Index Class 1
 
$
3,500,609
 
$
1,269,213
 
 
 
 
 
 
 
Lord Abbett Series Fund Developing Growth Class VC
 
$
234,454
 
$
14,203
 
 
 
 
 
 
 

Principal National Life Insurance Company
Variable Life Separate Account

Notes to Financial Statements
December 31, 2018


 
 
2018

Lord Abbett Series Fund International Opportunities Class VC
 
$
280,989
 
$
21,131
 
 
 
 
 
 
 
MFS Blended Research Small Cap Equity Service Class
 
$
45,050
 
$
41,309
 
 
 
 
 
 
 
MFS Mid Cap Value Portfolio Service Class
 
$
287,892
 
$
150,640
 
 
 
 
 
 
 
MFS New Discovery Service Class
 
$
340,347
 
$
69,351
 
 
 
 
 
 
 
MFS New Discovery Value Service Class
 
$
92,736
 
$
11,506
 
 
 
 
 
 
 
MFS Utilities Service Class
 
$
673,614
 
$
259,548
 
 
 
 
 
 
 
MidCap Class 1
 
$
1,181,492
 
$
360,605
 
 
 
 
 
 
 
Multi-Asset Income Class 1
 
$
4,377
 
$
1,281
 
 
 
 
 
 
 
Neuberger Berman AMT Large Cap Value Class I
 
$
80,864
 
$
38,623
 
 
 
 
 
 
 
Oppenheimer Main Street Small Cap Service Shares
 
$
229,617
 
$
117,158
 
 
 
 
 
 
 
Principal Capital Appreciation Class 1
 
$
418,750
 
$
185,636
 
 
 
 
 
 
 
Principal LifeTime 2010 Class 1
 
$
16,844
 
$
7,112
 
 
 
 
 
 
 
Principal LifeTime 2020 Class 1
 
$
100,812
 
$
107,574
 
 
 
 
 
 
 
Principal LifeTime 2030 Class 1
 
$
1,388,084
 
$
327,083
 
 
 
 
 
 
 
Principal LifeTime 2040 Class 1
 
$
1,139,047
 
$
459,691
 
 
 
 
 
 
 
Principal LifeTime 2050 Class 1
 
$
662,224
 
$
251,668
 
 
 
 
 
 
 
Principal LifeTime 2060 Class 1
 
$
636,409
 
$
287,338
 
 
 
 
 
 
 
Principal LifeTime Strategic Income Class 1
 
$
76,017
 
$
20,705
 
 
 
 
 
 
 
Putnam VT Growth Opportunities Class IB
 
$
129,477
 
$
47,982
 
 
 
 
 
 
 
Real Estate Securities Class 1
 
$
1,592,316
 
$
854,060
 
 
 
 
 
 
 
SAM Balanced Portfolio Class 1
 
$
4,984,700
 
$
1,896,949
 
 
 
 
 
 
 
SAM Conservative Balanced Portfolio Class 1
 
$
1,255,984
 
$
390,620
 
 
 
 
 
 
 
SAM Conservative Growth Portfolio Class 1
 
$
6,529,756
 
$
2,981,819
 
 
 
 
 
 
 
SAM Flexible Income Portfolio Class 1
 
$
811,515
 
$
936,416
 
 
 
 
 
 
 

Principal National Life Insurance Company
Variable Life Separate Account

Notes to Financial Statements
December 31, 2018


 
 
2018

SAM Strategic Growth Portfolio Class 1
 
$
8,943,235
 
$
3,386,233
 
 
 
 
 
 
 
Short-Term Income Class 1
 
$
552,229
 
$
399,123
 
 
 
 
 
 
 
SmallCap Class 1
 
$
782,200
 
$
350,264
 
 
 
 
 
 
 
Templeton Global Bond VIP Class 2
 
$
454,965
 
$
261,363
 
 
 
 
 
 
 
TOPS Managed Risk Balanced ETF Class 2
 
$
135,250
 
$
43,010
 
 
 
 
 
 
 
TOPS Managed Risk Growth ETF Class 2
 
$
531,993
 
$
259,096
 
 
 
 
 
 
 
TOPS Managed Risk Moderate Growth ETF Class 2
 
$
263,233
 
$
51,511
 
 
 
 
 
 
 
VanEck Global Hard Assets Class S
 
$
203,621
 
$
174,487
 
 
 
 
 
 
 
Wanger International
 
$
462,921
 
$
70,301
 
 
 
 
 
 
 


Principal National Life Insurance Company
Variable Life Separate Account

Notes to Financial Statements
December 31, 2018


5. Changes in Units Outstanding

Transactions in units were as follows for each of the years ended December 31:

 
 
2018
 
2017
Division
 
Purchases
 
Redemptions
 
Net
increase
(decrease)
 
Purchases
 
Redemptions
 
Net
increase
(decrease)
 
 
 
 
 
 
 
 
 
 
 
 
 
AllianceBernstein International Value Class A
 
37,561
 
14,453
 
23,108
 
36,032

 
12,368

 
23,664

 
 
 
 
 
 
 
 
 
 
 
 
 
AllianceBernstein Small Cap Growth Class A
 
1,158
 
599
 
559
 
1,161

 
2,033

 
(872)

 
 
 
 
 
 
 
 
 
 
 
 
 
AllianceBernstein Small/Mid Cap Value Class A
 
19,037
 
10,895
 
8,142
 
19,158

 
7,675

 
11,483

 
 
 
 
 
 
 
 
 
 
 
 
 
American Century VP Capital Appreciation Class II
 
9,680
 
2,898
 
6,782
 
9,165

 
3,641

 
5,524

 
 
 
 
 
 
 
 
 
 
 
 
 
American Century VP Income & Growth Class II
 
9,334
 
3,419
 
5,915
 
7,547

 
3,492

 
4,055

 
 
 
 
 
 
 
 
 
 
 
 
 
American Century VP Inflation Protection Class II
 
15,152
 
5,262
 
9,890
 
10,839

 
8,023

 
2,816

 
 
 
 
 
 
 
 
 
 
 
 
 
American Century VP Mid Cap Value Class II
 
18,140
 
6,376
 
11,764
 
18,611

 
7,058

 
11,553

 
 
 
 
 
 
 
 
 
 
 
 
 
American Century VP Value Class II
 
9,784
 
8,182
 
1,602
 
10,633

 
4,830

 
5,803

 
 
 
 
 
 
 
 
 
 
 
 
 
American Funds Insurance Series Blue Chip Income
   and Growth Class 2
 
37,619
 
10,059
 
27,560
 
56,032

 
11,419

 
44,613

 
 
 
 
 
 
 
 
 
 
 
 
 
American Funds Insurance Series Global Balanced
   Fund Class 2
 
943
 
262
 
681
 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
American Funds Insurance Series Growth Fund
   Class 2
 
51,356
 
22,793
 
28,563
 
79,382

 
13,858

 
65,524

 
 
 
 
 
 
 
 
 
 
 
 
 
American Funds Insurance Series International Fund
   Class 2
 
39,824
 
17,120
 
22,704
 
48,674

 
13,736

 
34,938

 
 
 
 
 
 
 
 
 
 
 
 
 
American Funds Insurance Series New World Fund
   Class 2
 
40,863
 
12,936
 
27,927
 
33,414

 
6,312

 
27,102

 
 
 
 
 
 
 
 
 
 
 
 
 
Calvert Investment Grade Bond Index Class I
 
20,515
 
7,361
 
13,154
 
13,939

 
5,656

 
8,283

 
 
 
 
 
 
 
 
 
 
 
 
 
Calvert Russell 2000 Small Cap Index Class F
 
19,652
 
7,242
 
12,410
 
20,088

 
4,733

 
15,355

 
 
 
 
 
 
 
 
 
 
 
 
 
Calvert S&P 500 Index
 
5,955
 
1,884
 
4,071
 
3,739

 
864

 
2,875

 
 
 
 
 
 
 
 
 
 
 
 
 
Calvert S&P MidCap 400 Index Class F
 
28,286
 
8,181
 
20,105
 
30,385

 
8,844

 
21,541

 
 
 
 
 
 
 
 
 
 
 
 
 
ClearBridge Mid Cap Portfolio Series I
 
7,353
 
3,140
 
4,213
 
7,021

 
1,320

 
5,701

 
 
 
 
 
 
 
 
 
 
 
 
 
Core Plus Bond Class 1
 
23,390
 
8,613
 
14,777
 
24,499

 
5,492

 
19,007

 
 
 
 
 
 
 
 
 
 
 
 
 
Delaware Small Cap Value Service Class
 
18,226
 
6,453
 
11,773
 
20,818

 
5,785

 
15,033

 
 
 
 
 
 
 
 
 
 
 
 
 
Delaware Smid Cap Core Service Class
 
21,459
 
10,567
 
10,892
 
23,846

 
11,088

 
12,758

 
 
 
 
 
 
 
 
 
 
 
 
 
Diversified International Class 1
 
24,199
 
9,667
 
14,532
 
27,483

 
10,298

 
17,185


Principal National Life Insurance Company
Variable Life Separate Account

Notes to Financial Statements
December 31, 2018


 
 
2018
 
2017
Division
 
Purchases
 
Redemptions
 
Net
increase
(decrease)
 
Purchases
 
Redemptions
 
Net
increase
(decrease)
 
 
 
 
 
 
 
 
 
 
 
 
 
Dreyfus IP MidCap Stock Service Shares
 
7,672
 
1,789
 
5,883
 
5,237

 
1,942

 
3,295

 
 
 
 
 
 
 
 
 
 
 
 
 
DWS Small Mid Cap Value Class B
 
3,700
 
1,636
 
2,064
 
3,710

 
1,595

 
2,115

 
 
 
 
 
 
 
 
 
 
 
 
 
Equity Income Class 1
 
124,065
 
13,836
 
110,229
 
24,847

 
9,890

 
14,957

 
 
 
 
 
 
 
 
 
 
 
 
 
Fidelity VIP Contrafund Service Class 2
 
48,969
 
20,673
 
28,296
 
49,895

 
22,521

 
27,374

 
 
 
 
 
 
 
 
 
 
 
 
 
Fidelity VIP Equity-Income Service Class 2
 
12,044
 
7,023
 
5,021
 
15,428

 
6,779

 
8,649

 
 
 
 
 
 
 
 
 
 
 
 
 
Fidelity VIP Government Money Market Service
   Class
 
1,189,334
 
1,164,351
 
24,983
 
1,200,908

 
1,184,160

 
16,748

 
 
 
 
 
 
 
 
 
 
 
 
 
Fidelity VIP High Income Service Class 2
 
22,419
 
14,915
 
7,504
 
24,783

 
15,881

 
8,902

 
 
 
 
 
 
 
 
 
 
 
 
 
Fidelity VIP Mid Cap Service Class 2
 
23,829
 
11,283
 
12,546
 
25,282

 
15,041

 
10,241

 
 
 
 
 
 
 
 
 
 
 
 
 
Franklin Mutual Global Discovery VIP Class 2
 
12,012
 
6,697
 
5,315
 
21,397

 
5,845

 
15,552

 
 
 
 
 
 
 
 
 
 
 
 
 
Franklin Rising Dividends VIP Class 2
 
17,993
 
7,862
 
10,131
 
19,248

 
7,562

 
11,686

 
 
 
 
 
 
 
 
 
 
 
 
 
Franklin Small Cap Value VIP Class 2
 
6,763
 
2,489
 
4,274
 
5,802

 
2,638

 
3,164

 
 
 
 
 
 
 
 
 
 
 
 
 
Government & High Quality Bond Class 1
 
35,926
 
12,278
 
23,648
 
28,911

 
11,661

 
17,250

 
 
 
 
 
 
 
 
 
 
 
 
 
International Emerging Markets Class 1
 
25,883
 
12,546
 
13,337
 
24,118

 
8,902

 
15,216

 
 
 
 
 
 
 
 
 
 
 
 
 
Invesco American Franchise Series II
 
3,233
 
2,044
 
1,189
 
2,060

 
900

 
1,160

 
 
 
 
 
 
 
 
 
 
 
 
 
Invesco American Value Series I
 
1,650
 
441
 
1,209
 
1,103

 
338

 
765

 
 
 
 
 
 
 
 
 
 
 
 
 
Invesco Core Equity Series II
 
1,890
 
3,397
 
(1,507)
 
3,192

 
1,513

 
1,679

 
 
 
 
 
 
 
 
 
 
 
 
 
Invesco Health Care Series I
 
24,604
 
13,154
 
11,450
 
21,929

 
14,938

 
6,991

 
 
 
 
 
 
 
 
 
 
 
 
 
Invesco Mid Cap Core Equity Series II
 
4,007
 
4,482
 
(475)
 
6,065

 
3,148

 
2,917

 
 
 
 
 
 
 
 
 
 
 
 
 
Janus Henderson Enterprise Service Shares
 
967
 
133
 
834
 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Janus Henderson Forty Service Shares
 
42,145
 
26,875
 
15,270
 
32,428

 
16,957

 
15,471

 
 
 
 
 
 
 
 
 
 
 
 
 
LargeCap Growth Class 1
 
13,760
 
8,483
 
5,277
 
12,473

 
6,231

 
6,242

 
 
 
 
 
 
 
 
 
 
 
 
 
LargeCap Growth I Class 1
 
17,377
 
8,073
 
9,304
 
11,370

 
7,384

 
3,986

 
 
 
 
 
 
 
 
 
 
 
 
 
LargeCap S&P 500 Index Class 1
 
106,792
 
45,371
 
61,421
 
113,467

 
85,903

 
27,564

 
 
 
 
 
 
 
 
 
 
 
 
 
Lord Abbett Series Fund Developing Growth
   Class VC
 
11,650
 
827
 
10,823
 
1,672

 
1,551

 
121

 
 
 
 
 
 
 
 
 
 
 
 
 
Lord Abbett Series Fund International Opportunities
   Class VC
 
18,647
 
1,703
 
16,944
 
8,037

 
414

 
7,623


Principal National Life Insurance Company
Variable Life Separate Account

Notes to Financial Statements
December 31, 2018


 
 
2018
 
2017
Division
 
Purchases
 
Redemptions
 
Net
increase
(decrease)
 
Purchases
 
Redemptions
 
Net
increase
(decrease)
 
 
 
 
 
 
 
 
 
 
 
 
 
MFS Blended Research Small Cap Equity Service
   Class
 
2,626
 
2,912
 
(286)
 
5,212

 
357

 
4,855

 
 
 
 
 
 
 
 
 
 
 
 
 
MFS Mid Cap Value Portfolio Service Class
 
21,029
 
12,364
 
8,665
 
20,044

 
8,064

 
11,980

 
 
 
 
 
 
 
 
 
 
 
 
 
MFS New Discovery Service Class
 
7,113
 
1,887
 
5,226
 
4,068

 
2,030

 
2,038

 
 
 
 
 
 
 
 
 
 
 
 
 
MFS New Discovery Value Service Class
 
5,558
 
828
 
4,730
 
2,438

 
198

 
2,240

 
 
 
 
 
 
 
 
 
 
 
 
 
MFS Utilities Service Class
 
38,051
 
15,134
 
22,917
 
32,659

 
12,964

 
19,695

 
 
 
 
 
 
 
 
 
 
 
 
 
MidCap Class 1
 
7,164
 
3,846
 
3,318
 
8,475

 
4,457

 
4,018

 
 
 
 
 
 
 
 
 
 
 
 
 
Multi-Asset Income Class 1
 
331
 
110
 
221
 
1,273

 
43

 
1,230

 
 
 
 
 
 
 
 
 
 
 
 
 
Neuberger Berman AMT Large Cap Value Class I
 
2,662
 
1,848
 
814
 
2,699

 
1,801

 
898

 
 
 
 
 
 
 
 
 
 
 
 
 
Oppenheimer Main Street Small Cap Service Shares
 
5,859
 
4,091
 
1,768
 
8,001

 
4,271

 
3,730

 
 
 
 
 
 
 
 
 
 
 
 
 
Principal Capital Appreciation Class 1
 
25,448
 
13,732
 
11,716
 
38,507

 
12,154

 
26,353

 
 
 
 
 
 
 
 
 
 
 
 
 
Principal LifeTime 2010 Class 1
 
503
 
353
 
150
 
1,034

 
7,823

 
(6,789)

 
 
 
 
 
 
 
 
 
 
 
 
 
Principal LifeTime 2020 Class 1
 
2,981
 
4,585
 
(1,604)
 
5,743

 
2,003

 
3,740

 
 
 
 
 
 
 
 
 
 
 
 
 
Principal LifeTime 2030 Class 1
 
52,121
 
13,675
 
38,446
 
35,951

 
11,817

 
24,134

 
 
 
 
 
 
 
 
 
 
 
 
 
Principal LifeTime 2040 Class 1
 
37,472
 
17,954
 
19,518
 
44,698

 
26,258

 
18,440

 
 
 
 
 
 
 
 
 
 
 
 
 
Principal LifeTime 2050 Class 1
 
20,920
 
9,630
 
11,290
 
25,619

 
11,660

 
13,959

 
 
 
 
 
 
 
 
 
 
 
 
 
Principal LifeTime 2060 Class 1
 
37,620
 
18,791
 
18,829
 
28,654

 
17,189

 
11,465

 
 
 
 
 
 
 
 
 
 
 
 
 
Principal LifeTime Strategic Income Class 1
 
3,721
 
1,151
 
2,570
 
4,815

 
750

 
4,065

 
 
 
 
 
 
 
 
 
 
 
 
 
Putnam VT Growth Opportunities Class IB
 
7,790
 
3,311
 
4,479
 
6,044

 
4,274

 
1,770

 
 
 
 
 
 
 
 
 
 
 
 
 
Real Estate Securities Class 1
 
16,002
 
11,247
 
4,755
 
19,485

 
9,657

 
9,828

 
 
 
 
 
 
 
 
 
 
 
 
 
SAM Balanced Portfolio Class 1
 
195,603
 
100,368
 
95,235
 
248,270

 
132,580

 
115,690

 
 
 
 
 
 
 
 
 
 
 
 
 
SAM Conservative Balanced Portfolio Class 1
 
54,091
 
21,712
 
32,379
 
90,199

 
42,001

 
48,198

 
 
 
 
 
 
 
 
 
 
 
 
 
SAM Conservative Growth Portfolio Class 1
 
262,916
 
153,770
 
109,146
 
299,600

 
119,795

 
179,805

 
 
 
 
 
 
 
 
 
 
 
 
 
SAM Flexible Income Portfolio Class 1
 
35,142
 
53,144
 
(18,002)
 
73,602

 
28,334

 
45,268

 
 
 
 
 
 
 
 
 
 
 
 
 
SAM Strategic Growth Portfolio Class 1
 
349,100
 
174,752
 
174,348
 
359,803

 
202,786

 
157,017

 
 
 
 
 
 
 
 
 
 
 
 
 
Short-Term Income Class 1
 
38,752
 
30,192
 
8,560
 
82,711

 
18,544

 
64,167

 
 
 
 
 
 
 
 
 
 
 
 
 

Principal National Life Insurance Company
Variable Life Separate Account

Notes to Financial Statements
December 31, 2018


 
 
2018
 
2017
Division
 
Purchases
 
Redemptions
 
Net
increase
(decrease)
 
Purchases
 
Redemptions
 
Net
increase
(decrease)

SmallCap Class 1
 
17,725
 
9,868
 
7,857
 
17,430

 
9,734

 
7,696

 
 
 
 
 
 
 
 
 
 
 
 
 
Templeton Global Bond VIP Class 2
 
28,095
 
16,105
 
11,990
 
37,719

 
10,010

 
27,709

 
 
 
 
 
 
 
 
 
 
 
 
 
TOPS Managed Risk Balanced ETF Class 2
 
7,754
 
3,236
 
4,518
 
7,673

 
2,891

 
4,782

 
 
 
 
 
 
 
 
 
 
 
 
 
TOPS Managed Risk Growth ETF Class 2
 
27,658
 
18,467
 
9,191
 
27,828

 
18,128

 
9,700

 
 
 
 
 
 
 
 
 
 
 
 
 
TOPS Managed Risk Moderate Growth ETF Class 2
 
14,631
 
3,679
 
10,952
 
15,051

 
5,427

 
9,624

 
 
 
 
 
 
 
 
 
 
 
 
 
VanEck Global Hard Assets Class S
 
31,472
 
25,911
 
5,561
 
40,820

 
16,340

 
24,480

 
 
 
 
 
 
 
 
 
 
 
 
 
Wanger International
 
34,493
 
6,179
 
28,314
 
14,599

 
6,794

 
7,805

 
 
 
 
 
 
 
 
 
 
 
 
 


Principal National Life Insurance Company
Variable Life Separate Account

Notes to Financial Statements
December 31, 2018


6. Financial Highlights

Principal National sells a variable life insurance product, which has multiple investment options that could have different returns.

The Separate Account has presented the following disclosures for 2018, 2017, 2016, 2015 and 2014 in accordance with the AICPA Audit and Accounting Guide for Investment Companies. The summary may not reflect the minimum and maximum contract charges offered by Principal National as the contractholder may not have selected all available and applicable contract options as discussed in Note 2.

 
 
 
December 31,
 
For the year ended December 31, except as noted
 
 
 
 
 
 
Unit fair value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
corresponding
 
 
 
 
 
 
Expense
 
Total return (3)
 
 
 
 
 
 
to lowest
 
 
 
 
Investment
 
ratio (2)
 
corresponding to
 
 
 
Units
 
 
to highest
 
 
Net assets
 
income
 
lowest to
 
lowest to highest
 
Division
 
(000's)
 
 
expense ratio
 
 
(000's)
 
ratio (1)
 
highest
 
expense ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AllianceBernstein International Value Class A:
 
2018
 
117

 
$
7.02
 
$
825

 
1.58
%
 
—%
 
(22.77
)%
 
2017
 
94

 
$
9.09
 
$
858

 
2.48
%
 
—%
 
25.38
 %
 
2016
 
71

 
$
7.25
 
$
513

 
1.47
%
 
—%
 
(0.55
)%
 
2015
 
49

 
$
7.29
 
$
353

 
2.82
%
 
—%
 
2.68
 %
 
2014
 
35

 
$
7.10
 
$
250

 
4.20
%
 
—%
 
(6.21
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AllianceBernstein Small Cap Growth Class A:
 
2018
 
6

 
$
25.55
 
$
148

 
—%

 
—%
 
(0.89
)%
 
2017
 
5

 
$
25.78
 
$
135

 
—%

 
—%
 
34.13
 %
 
2016
 
6

 
$
19.22
 
$
117

 
—%

 
—%
 
6.48
 %
 
2015
 
5

 
$
18.05
 
$
88

 
—%

 
—%
 
(1.26
)%
 
2014
 
5

 
$
18.28
 
$
97

 
—%

 
—%
 
(1.83
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AllianceBernstein Small/Mid Cap Value Class A:
 
2018
 
57

 
$
21.71
 
$
1,234

 
0.49
%
 
—%
 
(15.03
)%
 
2017
 
49

 
$
25.55
 
$
1,244

 
0.47
%
 
—%
 
13.15
 %
 
2016
 
37

 
$
22.58
 
$
840

 
0.63
%
 
—%
 
25.10
 %
 
2015
 
26

 
$
18.05
 
$
472

 
0.83
%
 
—%
 
(5.50
)%
 
2014
 
13

 
$
19.10
 
$
252

 
0.77
%
 
—%
 
9.21
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Century VP Capital Appreciation Class II:
 
2018
 
20

 
$
13.16
 
$
269

 
—%

 
—%
 
(5.32
)%
 
2017
 
14

 
$
13.90
 
$
190

 
—%

 
—%
 
21.61
 %
 
2016
 
8

 
$
11.43
 
$
93

 
—%

 
—%
 
3.16
 %
 
2015
 
4

 
$
11.08
 
$
49

 
—%

 
—%
 
1.74
 %
 
2014 (4)
 
2

 
$
10.89
 
$
23

 
—%

 
—%
 
10.78
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Century VP Income & Growth Class II:
 
2018
 
28

 
$
26.85
 
$
752

 
1.71
%
 
—%
 
(7.19
)%
 
2017
 
22

 
$
28.93
 
$
639

 
2.15
%
 
—%
 
20.29
 %
 
2016
 
18

 
$
24.05
 
$
434

 
2.12
%
 
—%
 
13.18
 %
 
2015
 
13

 
$
21.25
 
$
273

 
1.91
%
 
—%
 
(5.93
)%
 
2014
 
12

 
$
22.59
 
$
273

 
1.82
%
 
—%
 
12.33
 %

Principal National Life Insurance Company
Variable Life Separate Account

Notes to Financial Statements
December 31, 2018


 
 
 
December 31,
 
For the year ended December 31, except as noted
 
 
 
 
 
 
Unit fair value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
corresponding
 
 
 
 
 
 
Expense
 
Total return (3)
 
 
 
 
 
 
to lowest
 
 
 
 
Investment
 
ratio (2)
 
corresponding to
 
 
 
Units
 
 
to highest
 
 
Net assets
 
income
 
lowest to
 
lowest to highest
 
Division
 
(000's)
 
 
expense ratio
 
 
(000's)
 
ratio (1)
 
highest
 
expense ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

American Century VP Inflation Protection Class II:
 
2018
 
46

 
$
11.94
 
$
547

 
2.92
%
 
—%
 
(2.85
)%
 
2017
 
36

 
$
12.29
 
$
442

 
2.62
%
 
—%
 
3.71
 %
 
2016
 
33

 
$
11.85
 
$
393

 
1.80
%
 
—%
 
4.41
 %
 
2015
 
27

 
$
11.35
 
$
305

 
1.74
%
 
—%
 
(2.49
)%
 
2014
 
17

 
$
11.64
 
$
202

 
1.40
%
 
—%
 
3.28
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Century VP Mid Cap Value Class II:
 
2018
 
58

 
$
28.56
 
$
1,651

 
1.28
%
 
—%
 
(12.95
)%
 
2017
 
46

 
$
32.81
 
$
1,510

 
1.40
%
 
—%
 
11.45
 %
 
2016
 
34

 
$
29.44
 
$
1,015

 
1.55
%
 
—%
 
22.72
 %
 
2015
 
22

 
$
23.99
 
$
537

 
1.48
%
 
—%
 
(1.56
)%
 
2014
 
16

 
$
27.37
 
$
394

 
1.03
%
 
—%
 
16.21
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Century VP Value Class II:
 
2018
 
34

 
$
28.32
 
$
949

 
1.54
%
 
—%
 
(9.29
)%
 
2017
 
32

 
$
31.22
 
$
996

 
1.54
%
 
—%
 
8.59
 %
 
2016
 
26

 
$
28.75
 
$
750

 
1.60
%
 
—%
 
20.24
 %
 
2015
 
18

 
$
23.91
 
$
429

 
2.02
%
 
—%
 
(4.01
)%
 
2014
 
15

 
$
24.91
 
$
381

 
1.28
%
 
—%
 
12.92
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Funds Insurance Series Blue Chip Income and Growth Class 2:
 
2018
 
104

 
$
11.86
 
$
1,230

 
2.09
%
 
—%
 
(8.70
)%
 
2017
 
76

 
$
12.99
 
$
988

 
2.46
%
 
—%
 
17.03
 %
 
2016
 
31

 
$
11.10
 
$
349

 
2.73
%
 
—%
 
18.72
 %
 
2015 (7)
 
10

 
$
9.35
 
$
97

 
6.18
%
 
—%
 
(6.69
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Funds Insurance Series Global Balanced Fund Class 2:
 
2018(11)
 
1

 
$
9.29
 
$
6

 
5.27
%
 
—%
 
(7.38
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Funds Insurance Series Growth Fund Class 2:
 
2018
 
145

 
$
16.39
 
$
2,378

 
0.47
%
 
—%
 
(0.24
)%
 
2017
 
116

 
$
16.43
 
$
1,914

 
0.60
%
 
—%
 
28.26
 %
 
2016
 
51

 
$
12.81
 
$
653

 
0.88
%
 
—%
 
9.49
 %
 
2015
 
27

 
$
11.70
 
$
317

 
1.11
%
 
—%
 
6.85
 %
 
2014 (5)
 
2

 
$
10.95
 
$
25

 
2.48
%
 
—%
 
8.85
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Funds Insurance Series International Fund Class 2:
 
2018
 
98

 
$
10.89
 
$
1,068

 
1.85
%
 
—%
 
(13.16
)%
 
2017
 
75

 
$
12.54
 
$
945

 
1.45
%
 
—%
 
32.14
 %
 
2016
 
40

 
$
9.49
 
$
384

 
1.73
%
 
—%
 
3.60
 %
 
2015
 
19

 
$
9.16
 
$
178

 
2.19
%
 
—%
 
(4.58
)%
 
2014 (5)
 
1

 
$
9.60
 
$
13

 
5.16
%
 
—%
 
(4.48
)%

Principal National Life Insurance Company
Variable Life Separate Account

Notes to Financial Statements
December 31, 2018


 
 
 
December 31,
 
For the year ended December 31, except as noted
 
 
 
 
 
 
Unit fair value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
corresponding
 
 
 
 
 
 
Expense
 
Total return (3)
 
 
 
 
 
 
to lowest
 
 
 
 
Investment
 
ratio (2)
 
corresponding to
 
 
 
Units
 
 
to highest
 
 
Net assets
 
income
 
lowest to
 
lowest to highest
 
Division
 
(000's)
 
 
expense ratio
 
 
(000's)
 
ratio (1)
 
highest
 
expense ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
American Funds Insurance Series New World Fund Class 2:
 
2018
 
82

 
$
10.40
 
$
853

 
0.95
%
 
—%
 
(14.05
)%
 
2017
 
54

 
$
12.10
 
$
654

 
1.11
%
 
—%
 
29.41
 %
 
2016
 
27

 
$
9.35
 
$
252

 
1.04
%
 
—%
 
5.29
 %
 
2015
 
9

 
$
8.88
 
$
83

 
0.71
%
 
—%
 
(3.16
)%
 
2014 (5)
 
1

 
$
9.17
 
$
7

 
3.70
%
 
—%
 
(8.76
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Calvert Investment Grade Bond Index Class I:
 
2018
 
69

 
$
10.94
 
$
751

 
3.32
%
 
—%
 
(0.36
)%
 
2017
 
56

 
$
10.98
 
$
610

 
2.94
%
 
—%
 
3.58
 %
 
2016
 
47

 
$
10.60
 
$
501

 
3.07
%
 
—%
 
2.51
 %
 
2015
 
42

 
$
10.34
 
$
432

 
0.20
%
 
—%
 
0.10
 %
 
2014 (4)
 
24

 
$
10.33
 
$
247

 
4.19
%
 
—%
 
3.20
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Calvert Russell 2000 Small Cap Index Class F:
 
2018
 
49

 
$
21.64
 
$
1,061

 
1.18
%
 
—%
 
(11.46
)%
 
2017
 
37

 
$
24.44
 
$
895

 
0.80
%
 
—%
 
14.10
 %
 
2016
 
21

 
$
21.42
 
$
456

 
0.46
%
 
—%
 
20.61
 %
 
2015
 
14

 
$
17.76
 
$
240

 
—%

 
—%
 
(5.38
)%
 
2014
 
8

 
$
18.77
 
$
149

 
0.41
%
 
—%
 
3.93
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Calvert S&P 500 Index:
 
2018
 
17

 
$
14.45
 
$
242

 
2.03
%
 
—%
 
(4.75
)%
 
2017
 
13

 
$
15.17
 
$
192

 
1.54
%
 
—%
 
21.46
 %
 
2016
 
10

 
$
12.49
 
$
123

 
1.25
%
 
—%
 
11.52
 %
 
2015
 
10

 
$
11.20
 
$
117

 
0.19
%
 
—%
 
0.99
 %
 
2014 (4)
 
6

 
$
11.09
 
$
67

 
2.65
%
 
—%
 
11.79
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Calvert S&P MidCap 400 Index Class F:
 
2018
 
82

 
$
21.40
 
$
1,744

 
1.27
%
 
—%
 
(11.57
)%
 
2017
 
61

 
$
24.20
 
$
1,486

 
0.73
%
 
—%
 
15.62
 %
 
2016
 
40

 
$
20.93
 
$
834

 
0.64
%
 
—%
 
19.94
 %
 
2015
 
27

 
$
17.45
 
$
473

 
—%

 
—%
 
(2.89
)%
 
2014
 
12

 
$
17.97
 
$
215

 
0.92
%
 
—%
 
8.98
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ClearBridge Mid Cap Portfolio Series I:
 
2018
 
18

 
$
10.32
 
$
183

 
0.58
%
 
—%
 
(12.47
)%
 
2017
 
14

 
$
11.79
 
$
159

 
0.55
%
 
—%
 
12.82
 %
 
2016
 
8

 
$
10.45
 
$
82

 
0.96
%
 
—%
 
9.31
 %
 
2015 (7)
 
2

 
$
9.56
 
$
22

 
—%

 
—%
 
(5.35
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Principal National Life Insurance Company
Variable Life Separate Account

Notes to Financial Statements
December 31, 2018


 
 
 
December 31,
 
For the year ended December 31, except as noted
 
 
 
 
 
 
Unit fair value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
corresponding
 
 
 
 
 
 
Expense
 
Total return (3)
 
 
 
 
 
 
to lowest
 
 
 
 
Investment
 
ratio (2)
 
corresponding to
 
 
 
Units
 
 
to highest
 
 
Net assets
 
income
 
lowest to
 
lowest to highest
 
Division
 
(000's)
 
 
expense ratio
 
 
(000's)
 
ratio (1)
 
highest
 
expense ratio
Core Plus Bond Class 1:
 
2018
 
57

 
$
25.79
 
$
1,458

 
3.59
%
 
—%
 
(1.41
)%
 
2017
 
42

 
$
26.16
 
$
1,092

 
2.72
%
 
—%
 
4.81
 %
 
2016
 
23

 
$
24.96
 
$
568

 
3.25
%
 
—%
 
4.09
 %
 
2015
 
14

 
$
23.98
 
$
347

 
3.42
%
 
—%
 
(0.50
)%
 
2014
 
9

 
$
24.10
 
$
228

 
3.38
%
 
—%
 
5.24
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Delaware Small Cap Value Service Class:
 
2018
 
50

 
$
22.30
 
$
1,111

 
0.58
%
 
—%
 
(16.95
)%
 
2017
 
38

 
$
26.85
 
$
1,021

 
0.55
%
 
—%
 
11.78
 %
 
2016
 
23

 
$
24.02
 
$
553

 
0.63
%
 
—%
 
31.04
 %
 
2015
 
17

 
$
18.33
 
$
309

 
0.43
%
 
—%
 
(6.43
)%
 
2014
 
10

 
$
19.59
 
$
199

 
0.28
%
 
—%
 
5.61
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Delaware Smid Cap Core Service Class:
 
2018
 
74

 
$
17.89
 
$
1,320

 
—%

 
—%
 
(12.43
)%
 
2017
 
63

 
$
20.43
 
$
1,284

 
0.08
%
 
—%
 
18.37
 %
 
2016
 
50

 
$
17.26
 
$
864

 
—%

 
—%
 
8.01
 %
 
2015
 
33

 
$
15.98
 
$
530

 
0.13
%
 
—%
 
7.32
 %
 
2014
 
16

 
$
14.89
 
$
239

 
—%

 
—%
 
2.90
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diversified International Class 1:
 
2018
 
78

 
$
26.29
 
$
2,053

 
2.26
%
 
—%
 
(17.53
)%
 
2017
 
64

 
$
31.88
 
$
2,026

 
1.86
%
 
—%
 
29.07
 %
 
2016
 
46

 
$
24.70
 
$
1,145

 
2.43
%
 
—%
 
0.32
 %
 
2015
 
33

 
$
24.62
 
$
812

 
2.63
%
 
—%
 
(0.32
)%
 
2014
 
18

 
$
24.70
 
$
450

 
2.33
%
 
—%
 
(3.21
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dreyfus IP MidCap Stock Service Shares:
 
2018
 
16

 
$
12.05
 
$
195

 
0.29
%
 
—%
 
(15.68
)%
 
2017
 
10

 
$
14.29
 
$
148

 
0.74
%
 
—%
 
14.96
 %
 
2016
 
7

 
$
12.43
 
$
87

 
0.81
%
 
—%
 
15.20
 %
 
2015
 
6

 
$
10.79
 
$
63

 
0.41
%
 
—%
 
(2.44
)%
 
2014 (5)
 
5

 
$
11.06
 
$
58

 
—%

 
—%
 
9.83
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
DWS Small Mid Cap Value Class B:
 
2018 (12)
 
13

 
$
18.70
 
$
236

 
0.98
%
 
—%
 
(16.33
)%
 
2017
 
11

 
$
22.35
 
$
236

 
0.34
%
 
—%
 
10.15
 %
 
2016
 
8

 
$
20.29
 
$
171

 
0.21
%
 
—%
 
16.48
 %
 
2015
 
7

 
$
17.42
 
$
115

 
—%

 
—%
 
(2.24
)%
 
2014
 
4

 
$
17.82
 
$
72

 
0.25
%
 
—%
 
5.13
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Principal National Life Insurance Company
Variable Life Separate Account

Notes to Financial Statements
December 31, 2018


 
 
 
December 31,
 
For the year ended December 31, except as noted
 
 
 
 
 
 
Unit fair value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
corresponding
 
 
 
 
 
 
Expense
 
Total return (3)
 
 
 
 
 
 
to lowest
 
 
 
 
Investment
 
ratio (2)
 
corresponding to
 
 
 
Units
 
 
to highest
 
 
Net assets
 
income
 
lowest to
 
lowest to highest
 
Division
 
(000's)
 
 
expense ratio
 
 
(000's)
 
ratio (1)
 
highest
 
expense ratio
Equity Income Class 1:
 
2018
 
197

 
$
21.17
 
$
4,172

 
1.61
%
 
—%
 
(5.02
)%
 
2017
 
87

 
$
22.29
 
$
1,935

 
2.33
%
 
—%
 
21.08
 %
 
2016
 
72

 
$
18.41
 
$
1,323

 
2.78
%
 
—%
 
15.71
 %
 
2015
 
53

 
$
15.91
 
$
842

 
2.56
%
 
—%
 
(3.93
)%
 
2014
 
39

 
$
16.56
 
$
647

 
2.40
%
 
—%
 
12.81
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fidelity VIP Contrafund Service Class 2:
 
2018
 
153

 
$
35.73
 
$
5,469

 
0.45
%
 
—%
 
(6.64
)%
 
2017
 
125

 
$
38.27
 
$
4,775

 
0.81
%
 
—%
 
21.57
 %
 
2016
 
97

 
$
31.48
 
$
3,066

 
0.71
%
 
—%
 
7.73
 %
 
2015
 
71

 
$
29.22
 
$
2,071

 
0.97
%
 
—%
 
0.41
 %
 
2014
 
42

 
$
29.10
 
$
1,223

 
0.98
%
 
—%
 
11.67
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fidelity VIP Equity-Income Service Class 2:
 
2018
 
41

 
$
24.24
 
$
992

 
2.15
%
 
—%
 
(8.56
)%
 
2017
 
36

 
$
26.51
 
$
952

 
1.65
%
 
—%
 
12.66
 %
 
2016
 
27

 
$
23.53
 
$
641

 
2.37
%
 
—%
 
17.71
 %
 
2015
 
21

 
$
19.99
 
$
412

 
3.43
%
 
—%
 
(4.26
)%
 
2014
 
14

 
$
20.88
 
$
300

 
3.35
%
 
—%
 
8.52
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fidelity VIP Government Money Market Service Class:
 
2018
 
593

 
$
10.22
 
$
6,068

 
1.55
%
 
—%
 
1.49
 %
 
2017
 
568

 
$
10.07
 
$
5,723

 
0.57
%
 
—%
 
0.60
 %
 
2016 (8)
 
552

 
$
10.01
 
$
5,523

 
0.12
%
 
—%
 
0.10
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fidelity VIP High Income Service Class 2:
 
2018
 
72

 
$
28.95
 
$
2,089

 
5.76
%
 
—%
 
(3.60
)%
 
2017
 
65

 
$
30.03
 
$
1,942

 
5.46
%
 
—%
 
6.91
 %
 
2016
 
56

 
$
28.09
 
$
1,567

 
6.27
%
 
—%
 
14.14
 %
 
2015
 
37

 
$
24.61
 
$
915

 
7.60
%
 
—%
 
(3.87
)%
 
2014
 
24

 
$
25.60
 
$
608

 
7.38
%
 
—%
 
0.91
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fidelity VIP Mid Cap Service Class 2:
 
2018
 
74

 
$
40.67
 
$
3,026

 
0.42
%
 
—%
 
(14.770
)%
 
2017
 
62

 
$
47.72
 
$
2,952

 
0.51
%
 
—%
 
20.54
 %
 
2016
 
52

 
$
39.59
 
$
2,043

 
0.36
%
 
—%
 
11.93
 %
 
2015
 
38

 
$
35.37
 
$
1,338

 
0.33
%
 
—%
 
(1.640
)%
 
2014
 
20

 
$
35.96
 
$
708

 
0.03
%
 
—%
 
6.05
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Principal National Life Insurance Company
Variable Life Separate Account

Notes to Financial Statements
December 31, 2018


 
 
 
December 31,
 
For the year ended December 31, except as noted
 
 
 
 
 
 
Unit fair value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
corresponding
 
 
 
 
 
 
Expense
 
Total return (3)
 
 
 
 
 
 
to lowest
 
 
 
 
Investment
 
ratio (2)
 
corresponding to
 
 
 
Units
 
 
to highest
 
 
Net assets
 
income
 
lowest to
 
lowest to highest
 
Division
 
(000's)
 
 
expense ratio
 
 
(000's)
 
ratio (1)
 
highest
 
expense ratio
Franklin Mutual Global Discovery VIP Class 2:
 
2018
 
52

 
$
31.27
 
$
1,623

 
2.47
%
 
—%
 
(11.22
)%
 
2017
 
47

 
$
35.22
 
$
1,641

 
1.73
%
 
—%
 
8.57
 %
 
2016
 
31

 
$
32.44
 
$
1,006

 
1.73
%
 
—%
 
12.17
 %
 
2015
 
24

 
$
28.92
 
$
694

 
2.95
%
 
—%
 
(3.63
)%
 
2014
 
16

 
$
30.01
 
$
466

 
2.41
%
 
—%
 
5.71
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Franklin Rising Dividends VIP Class 2:
 
2018
 
66

 
$
30.91
 
$
2,049

 
1.26
%
 
—%
 
(5.07
)%
 
2017
 
56

 
$
32.56
 
$
1,829

 
1.46
%
 
—%
 
20.55
 %
 
2016
 
44

 
$
27.01
 
$
1,202

 
1.30
%
 
—%
 
16.02
 %
 
2015
 
36

 
$
23.28
 
$
836

 
1.40
%
 
—%
 
(3.64
)%
 
2014
 
27

 
$
24.16
 
$
646

 
1.26
%
 
—%
 
8.73
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Franklin Small Cap Value VIP Class 2:
 
2018
 
18

 
$
32.79
 
$
578

 
0.84
%
 
—%
 
(12.86
)%
 
2017
 
13

 
$
37.63
 
$
503

 
0.51
%
 
—%
 
10.64
 %
 
2016
 
10

 
$
34.01
 
$
347

 
0.77
%
 
—%
 
30.21
 %
 
2015
 
8

 
$
26.12
 
$
202

 
0.62
%
 
—%
 
(7.41
)%
 
2014
 
7

 
$
28.21
 
$
183

 
0.53
%
 
—%
 
0.57
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Government & High Quality Bond Class 1:
 
2018
 
104

 
$
13.80
 
$
1,430

 
4.08
%
 
—%
 
0.95
 %
 
2017
 
80

 
$
13.67
 
$
1,094

 
4.11
%
 
—%
 
1.86
 %
 
2016
 
63

 
$
13.42
 
$
842

 
3.49
%
 
—%
 
1.82
 %
 
2015
 
49

 
$
13.18
 
$
649

 
3.46
%
 
—%
 
0.76
 %
 
2014
 
33

 
$
13.08
 
$
437

 
4.02
%
 
—%
 
5.06
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
International Emerging Markets Class 1:
 
2018
 
70

 
$
36.12
 
$
2,516

 
1.25
%
 
—%
 
(21.01
)%
 
2017
 
56

 
$
45.73
 
$
2,576

 
1.30
%
 
—%
 
40.84
 %
 
2016
 
41

 
$
32.47
 
$
1,335

 
1.19
%
 
—%
 
9.40
 %
 
2015
 
33

 
$
29.68
 
$
984

 
1.74
%
 
—%
 
(13.82
)%
 
2014
 
20

 
$
34.44
 
$
680

 
0.97
%
 
—%
 
(3.75
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Invesco American Franchise Series II:
 
2018
 
7

 
$
19.21
 
$
142

 
—%

 
—%
 
(3.90
)%
 
2017
 
6

 
$
19.99
 
$
124

 
—%

 
—%
 
27.00
 %
 
2016
 
5

 
$
15.74
 
$
79

 
—%

 
—%
 
2.01
 %
 
2015
 
3

 
$
15.43
 
$
45

 
—%

 
—%
 
4.75
 %
 
2014
 
2

 
$
14.73
 
$
33

 
—%

 
—%
 
8.15
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Principal National Life Insurance Company
Variable Life Separate Account

Notes to Financial Statements
December 31, 2018


 
 
 
December 31,
 
For the year ended December 31, except as noted
 
 
 
 
 
 
Unit fair value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
corresponding
 
 
 
 
 
 
Expense
 
Total return (3)
 
 
 
 
 
 
to lowest
 
 
 
 
Investment
 
ratio (2)
 
corresponding to
 
 
 
Units
 
 
to highest
 
 
Net assets
 
income
 
lowest to
 
lowest to highest
 
Division
 
(000's)
 
 
expense ratio
 
 
(000's)
 
ratio (1)
 
highest
 
expense ratio
Invesco American Value Series I:
 
2018
 
5

 
$
9.66
 
$
52

 
0.51
%
 
—%
 
(12.66
)%
 
2017
 
4

 
$
11.06
 
$
46

 
0.85
%
 
—%
 
9.94
 %
 
2016
 
3

 
$
10.06
 
$
34

 
0.41
%
 
—%
 
15.50
 %
 
2015 (7)
 
—

 
$
8.71
 
$
1

 
1.05
%
 
—%
 
(13.51
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Invesco Core Equity Series II:
 
2018
 
5

 
$
30.09
 
$
152

 
—%

 
—%
 
(9.61
)%
 
2017
 
7

 
$
33.29
 
$
218

 
0.87
%
 
—%
 
12.89
 %
 
2016
 
5

 
$
29.49
 
$
144

 
0.53
%
 
—%
 
10.00
 %
 
2015
 
3

 
$
26.81
 
$
82

 
1.05
%
 
—%
 
(6.00
)%
 
2014
 
1

 
$
28.52
 
$
35

 
0.74
%
 
—%
 
7.87
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Invesco Health Care Series I:
 
2018 (13)
 
81

 
$
28.51
 
$
2,300

 
—%

 
—%
 
0.88
 %
 
2017
 
69

 
$
28.26
 
$
1,956

 
0.37
%
 
—%
 
15.82
 %
 
2016
 
62

 
$
24.40
 
$
1,518

 
—%

 
—%
 
(11.47
)%
 
2015
 
46

 
$
27.56
 
$
1,257

 
—%

 
—%
 
3.18
 %
 
2014
 
26

 
$
26.71
 
$
688

 
—%

 
—%
 
19.67
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Invesco Mid Cap Core Equity Series II:
 
2018
 
20

 
$
19.70
 
$
398

 
0.11
%
 
—%
 
(11.58
)%
 
2017
 
21

 
$
22.28
 
$
461

 
0.33
%
 
—%
 
14.67
 %
 
2016
 
18

 
$
19.43
 
$
345

 
—%

 
—%
 
13.16
 %
 
2015
 
13

 
$
17.17
 
$
220

 
0.11
%
 
—%
 
(4.29
)%
 
2014
 
9

 
$
17.94
 
$
164

 
—%

 
—%
 
4.18
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Janus Henderson Enterprise Service Shares:
 
2018 (11)
 
1

 
$
34.78
 
$
29

 
0.02
%
 
—%
 
(10.52
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Janus Henderson Forty Service Shares:
 
2018
 
97

 
$
22.45
 
$
2,182

 
1.20
%
 
—%
 
1.72
 %
 
2017
 
82

 
$
22.07
 
$
1,808

 
—%

 
—%
 
29.98
 %
 
2016
 
66

 
$
16.98
 
$
1,128

 
0.84
%
 
—%
 
1.98
 %
 
2015
 
42

 
$
16.65
 
$
696

 
1.10
%
 
—%
 
11.90
 %
 
2014
 
23

 
$
14.88
 
$
337

 
0.03
%
 
—%
 
8.45
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LargeCap Growth Class 1:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2018
 
42

 
$
30.29
 
$
1,283

 
0.22
%
 
—%
 
(7.28
)%
 
2017
 
37

 
$
32.67
 
$
1,212

 
0.38
%
 
—%
 
34.89
 %
 
2016
 
31

 
$
24.22
 
$
747

 
0.29
%
 
—%
 
(5.13
)%
 
2015
 
21

 
$
25.53
 
$
534

 
0.16
%
 
—%
 
4.98
 %
 
2014
 
11

 
$
24.32
 
$
267

 
0.57
%
 
—%
 
11.10
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Principal National Life Insurance Company
Variable Life Separate Account

Notes to Financial Statements
December 31, 2018


 
 
 
December 31,
 
For the year ended December 31, except as noted
 
 
 
 
 
 
Unit fair value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
corresponding
 
 
 
 
 
 
Expense
 
Total return (3)
 
 
 
 
 
 
to lowest
 
 
 
 
Investment
 
ratio (2)
 
corresponding to
 
 
 
Units
 
 
to highest
 
 
Net assets
 
income
 
lowest to
 
lowest to highest
 
Division
 
(000's)
 
 
expense ratio
 
 
(000's)
 
ratio (1)
 
highest
 
expense ratio
LargeCap Growth I Class 1:
 
2018
 
48

 
$
53.66
 
$
2,587

 
0.04
%
 
—%
 
3.59
 %
 
2017
 
39

 
$
51.80
 
$
2,016

 
0.03
%
 
—%
 
33.71
 %
 
2016
 
35

 
$
38.74
 
$
1,353

 
—%

 
—%
 
1.25
 %
 
2015
 
23

 
$
38.26
 
$
861

 
0.23
%
 
—%
 
7.77
 %
 
2014
 
11

 
$
35.50
 
$
405

 
0.11
%
 
—%
 
8.63
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LargeCap S&P 500 Index Class 1:
 
2018
 
385

 
$
25.64
 
$
9,860

 
1.78
%
 
—%
 
(4.58
)%
 
2017
 
323

 
$
26.87
 
$
8,683

 
1.64
%
 
—%
 
21.47
 %
 
2016
 
296

 
$
22.12
 
$
6,537

 
1.70
%
 
—%
 
11.60
 %
 
2015
 
226

 
$
19.82
 
$
4,476

 
1.50
%
 
—%
 
1.12
 %
 
2014
 
157

 
$
19.60
 
$
3,076

 
1.27
%
 
—%
 
13.29
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Lord Abbett Series Fund Developing Growth Class VC:
 
2018
 
11

 
$
15.14
 
$
172

 
—%

 
—%
 
4.85
 %
 
2017
 
1

 
$
14.44
 
$
8

 
—%

 
—%
 
29.97
 %
 
2016 (9)
 
—

 
$
11.11
 
$
5

 
—%

 
—%
 
10.66
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Lord Abbett Series Fund International Opportunities Class VC:
 
2018
 
25

 
$
10.39
 
$
257

 
1.15
%
 
—%
 
(23.66
)%
 
2017
 
8

 
$
13.61
 
$
107

 
3.14
%
 
—%
 
39.30
 %
 
2016 (9)
 
—

 
$
9.77
 
$
2

 
3.09
%
 
—%
 
(2.79
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MFS Blended Research Small Cap Equity Service Class:
 
2018
 
5

 
$
12.90
 
$
59

 
0.60
%
 
—%
 
(5.36
)%
 
2017
 
5

 
$
13.63
 
$
66

 
0.55
%
 
—%
 
14.73
 %
 
2016 (9)
 
—

 
$
11.88
 
$
—

 
—%

 
—%
 
18.92
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MFS Mid Cap Value Portfolio Service Class:
 
2018
 
42

 
$
10.71
 
$
450

 
0.72
%
 
—%
 
(11.63
)%
 
2017
 
33

 
$
12.12
 
$
404

 
1.09
%
 
—%
 
13.38
 %
 
2016
 
21

 
$
10.69
 
$
228

 
0.67
%
 
—%
 
15.82
 %
 
2015 (7)
 
5

 
$
9.23
 
$
47

 
0.12
%
 
—%
 
(8.25
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MFS New Discovery Service Class:
 
2018
 
16

 
$
32.64
 
$
521

 
—%

 
—%
 
(1.72
)%
 
2017
 
11

 
$
33.21
 
$
357

 
—%

 
—%
 
26.32
 %
 
2016
 
9

 
$
26.29
 
$
229

 
—%

 
—%
 
8.82
 %
 
2015
 
9

 
$
24.16
 
$
206

 
—%

 
—%
 
(2.15
)%
 
2014
 
6

 
$
24.69
 
$
157

 
—%

 
—%
 
(7.49
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Principal National Life Insurance Company
Variable Life Separate Account

Notes to Financial Statements
December 31, 2018


 
 
 
December 31,
 
For the year ended December 31, except as noted
 
 
 
 
 
 
Unit fair value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
corresponding
 
 
 
 
 
 
Expense
 
Total return (3)
 
 
 
 
 
 
to lowest
 
 
 
 
Investment
 
ratio (2)
 
corresponding to
 
 
 
Units
 
 
to highest
 
 
Net assets
 
income
 
lowest to
 
lowest to highest
 
Division
 
(000's)
 
 
expense ratio
 
 
(000's)
 
ratio (1)
 
highest
 
expense ratio
MFS New Discovery Value Service Class:
 
2018
 
7

 
$
12.35
 
$
92

 
0.25
%
 
—%
 
(11.02
)%
 
2017
 
3

 
$
13.88
 
$
38

 
0.78
%
 
—%
 
15.00
 %
 
2016 (9)
 
—

 
$
12.07
 
$
6

 
—%

 
—%
 
21.31
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MFS Utilities Service Class:
 
2018
 
113

 
$
17.05
 
$
1,924

 
0.90
%
 
—%
 
0.77
 %
 
2017
 
90

 
$
16.92
 
$
1,521

 
4.23
%
 
—%
 
14.48
 %
 
2016
 
70

 
$
14.78
 
$
1,038

 
3.69
%
 
—%
 
11.30
 %
 
2015
 
57

 
$
13.28
 
$
756

 
4.18
%
 
—%
 
(14.76
)%
 
2014
 
32

 
$
15.58
 
$
498

 
2.09
%
 
—%
 
12.41
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MidCap Class 1:
 
2018
 
42

 
$
85.61
 
$
3,631

 
0.28
%
 
—%
 
(6.55
)%
 
2017
 
39

 
$
91.61
 
$
3,581

 
0.56
%
 
—%
 
25.53
 %
 
2016
 
35

 
$
72.98
 
$
2,560

 
0.42
%
 
—%
 
10.36
 %
 
2015
 
30

 
$
66.13
 
$
1,979

 
0.53
%
 
—%
 
1.64
 %
 
2014
 
24

 
$
65.06
 
$
1,570

 
0.52
%
 
—%
 
12.99
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Multi-Asset Income Class 1:
 
2018
 
1

 
$
11.08
 
$
16

 
2.61
%
 
—%
 
(5.62
)%
 
2017
 
1

 
$
11.74
 
$
14

 
2.90
%
 
—%
 
12.02
 %
 
2016 (9)
 
—

 
$
10.48
 
$
—

 
—%

 
—%
 
4.38
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Neuberger Berman AMT Large Cap Value Class I:
 
2018
 
11

 
$
20.14
 
$
215

 
1.23
%
 
—%
 
(1.03
)%
 
2017
 
10

 
$
20.35
 
$
201

 
0.61
%
 
—%
 
13.37
 %
 
2016
 
9

 
$
17.95
 
$
161

 
0.80
%
 
—%
 
27.40
 %
 
2015
 
10

 
$
14.09
 
$
139

 
0.81
%
 
—%
 
(11.83
)%
 
2014
 
8

 
$
15.98
 
$
126

 
0.83
%
 
—%
 
9.83
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Oppenheimer Main Street Small Cap Service Shares:
 
2018
 
19

 
$
23.93
 
$
465

 
0.06
%
 
—%
 
(10.51
)%
 
2017
 
18

 
$
26.74
 
$
473

 
0.66
%
 
—%
 
13.88
 %
 
2016
 
14

 
$
23.48
 
$
328

 
0.25
%
 
—%
 
17.69
 %
 
2015
 
12

 
$
19.95
 
$
244

 
0.64
%
 
—%
 
(6.12
)%
 
2014
 
9

 
$
21.25
 
$
192

 
0.57
%
 
—%
 
11.67
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal Capital Appreciation Class 1:
 
2018
 
88

 
$
12.55
 
$
1,101

 
1.21
%
 
—%
 
(3.46
)%
 
2017
 
76

 
$
13.00
 
$
988

 
1.38
%
 
—%
 
20.82
 %
 
2016
 
50

 
$
10.76
 
$
534

 
1.23
%
 
—%
 
9.13
 %
 
2015 (6)
 
21

 
$
9.86
 
$
205

 
0.29
%
 
—%
 
(0.40
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Principal National Life Insurance Company
Variable Life Separate Account

Notes to Financial Statements
December 31, 2018


 
 
 
December 31,
 
For the year ended December 31, except as noted
 
 
 
 
 
 
Unit fair value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
corresponding
 
 
 
 
 
 
Expense
 
Total return (3)
 
 
 
 
 
 
to lowest
 
 
 
 
Investment
 
ratio (2)
 
corresponding to
 
 
 
Units
 
 
to highest
 
 
Net assets
 
income
 
lowest to
 
lowest to highest
 
Division
 
(000's)
 
 
expense ratio
 
 
(000's)
 
ratio (1)
 
highest
 
expense ratio
Principal LifeTime 2010 Class 1:
 
2018
 
6

 
$
19.45
 
$
118

 
3.07
%
 
—%
 
(3.86
)%
 
2017
 
6

 
$
20.23
 
$
119

 
1.96
%
 
—%
 
11.40
 %
 
2016
 
13

 
$
18.16
 
$
230

 
2.06
%
 
—%
 
5.28
 %
 
2015
 
2

 
$
17.25
 
$
35

 
2.59
%
 
—%
 
(1.15
)%
 
2014
 
—

 
$
17.45
 
$
7

 
2.25
%
 
—%
 
4.80
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal LifeTime 2020 Class 1:
 
2018
 
22

 
$
21.82
 
$
486

 
2.79
%
 
—%
 
(5.38
)%
 
2017
 
24

 
$
23.06
 
$
550

 
2.00
%
 
—%
 
15.01
 %
 
2016
 
20

 
$
20.05
 
$
404

 
1.65
%
 
—%
 
5.75
 %
 
2015
 
24

 
$
18.96
 
$
464

 
2.59
%
 
—%
 
(1.15
)%
 
2014
 
19

 
$
19.18
 
$
360

 
2.31
%
 
—%
 
5.73
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal LifeTime 2030 Class 1:
 
2018
 
154

 
$
22.19
 
$
3,427

 
2.40
%
 
—%
 
(7.04
)%
 
2017
 
116

 
$
23.87
 
$
2,770

 
1.61
%
 
—%
 
18.23
 %
 
2016
 
92

 
$
20.19
 
$
1,855

 
1.66
%
 
—%
 
5.87
 %
 
2015
 
66

 
$
19.07
 
$
1,260

 
2.66
%
 
—%
 
(1.04
)%
 
2014
 
42

 
$
19.27
 
$
815

 
2.30
%
 
—%
 
6.05
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal LifeTime 2040 Class 1:
 
2018
 
142

 
$
23.31
 
$
3,321

 
2.10
%
 
—%
 
(7.87
)%
 
2017
 
123

 
$
25.30
 
$
3,110

 
1.41
%
 
—%
 
20.71
 %
 
2016
 
105

 
$
20.96
 
$
2,190

 
1.54
%
 
—%
 
5.43
 %
 
2015
 
74

 
$
19.88
 
$
1,481

 
2.47
%
 
—%
 
(0.85
)%
 
2014
 
53

 
$
20.05
 
$
1,055

 
2.05
%
 
—%
 
6.20
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal LifeTime 2050 Class 1:
 
2018
 
73

 
$
23.57
 
$
1,724

 
2.12
%
 
—%
 
(8.64
)%
 
2017
 
62

 
$
25.80
 
$
1,595

 
1.28
%
 
—%
 
22.16
 %
 
2016
 
48

 
$
21.12
 
$
1,011

 
1.36
%
 
—%
 
5.55
 %
 
2015
 
37

 
$
20.01
 
$
740

 
2.67
%
 
—%
 
(0.65
)%
 
2014
 
25

 
$
20.14
 
$
508

 
2.09
%
 
—%
 
6.17
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal LifeTime 2060 Class 1:
 
2018
 
87

 
$
13.69
 
$
1,184

 
2.15
%
 
—%
 
(9.22
)%
 
2017
 
68

 
$
15.08
 
$
1,021

 
0.90
%
 
—%
 
22.70
 %
 
2016
 
56

 
$
12.29
 
$
691

 
1.18
%
 
—%
 
5.49
 %
 
2015
 
37

 
$
11.65
 
$
434

 
1.26
%
 
—%
 
(0.68
)%
 
2014
 
16

 
$
11.73
 
$
186

 
0.07
%
 
—%
 
5.58
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Principal National Life Insurance Company
Variable Life Separate Account

Notes to Financial Statements
December 31, 2018


 
 
 
December 31,
 
For the year ended December 31, except as noted
 
 
 
 
 
 
Unit fair value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
corresponding
 
 
 
 
 
 
Expense
 
Total return (3)
 
 
 
 
 
 
to lowest
 
 
 
 
Investment
 
ratio (2)
 
corresponding to
 
 
 
Units
 
 
to highest
 
 
Net assets
 
income
 
lowest to
 
lowest to highest
 
Division
 
(000's)
 
 
expense ratio
 
 
(000's)
 
ratio (1)
 
highest
 
expense ratio





Principal LifeTime Strategic Income Class 1:
 
2018
 
14

 
$
17.50
 
$
240

 
2.89
%
 
—%
 
(2.99)

 
2017
 
11

 
$
18.04
 
$
201

 
2.59
%
 
—%
 
8.74
 %
 
2016
 
7

 
$
16.59
 
$
117

 
2.90
%
 
—%
 
4.73
 %
 
2015
 
4

 
$
15.84
 
$
67

 
3.02
%
 
—%
 
(0.94
)%
 
2014
 
3

 
$
15.99
 
$
50

 
4.46
%
 
—%
 
4.58
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Putnam VT Growth Opportunities Class IB:
 
2018
 
24

 
$
13.47
 
$
324

 
—%

 
—%
 
2.36
 %
 
2017
 
20

 
$
13.16
 
$
257

 
0.10
%
 
—%
 
30.95
 %
 
2016 (10)
 
18

 
$
10.05
 
$
179

 
—%

 
—%
 
0.70
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real Estate Securities Class 1:
 
2018
 
51

 
$
73.92
 
$
3,804

 
1.84
%
 
—%
 
(4.22
)%
 
2017
 
47

 
$
77.18
 
$
3,605

 
1.83
%
 
—%
 
9.20
 %
 
2016
 
37

 
$
70.68
 
$
2,607

 
1.47
%
 
—%
 
5.84
 %
 
2015
 
24

 
$
66.78
 
$
1,626

 
1.58
%
 
—%
 
4.21
 %
 
2014
 
15

 
$
64.08
 
$
944

 
1.54
%
 
—%
 
32.81
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SAM Balanced Portfolio Class 1:
 
2018
 
914

 
$
17.92
 
$
16,372

 
3.13
%
 
—%
 
(5.03
)%
 
2017
 
818

 
$
18.87
 
$
15,444

 
2.17
%
 
—%
 
15.20
 %
 
2016
 
703

 
$
16.38
 
$
11,510

 
2.16
%
 
—%
 
6.78
 %
 
2015
 
527

 
$
15.34
 
$
8,083

 
3.08
%
 
—%
 
(0.78
)%
 
2014
 
321

 
$
15.46
 
$
4,957

 
2.77
%
 
—%
 
6.84
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SAM Conservative Balanced Portfolio Class 1:
 
2018
 
229

 
$
17.37
 
$
3,974

 
3.49
%
 
—%
 
(3.45
)%
 
2017
 
196

 
$
17.99
 
$
3,535

 
2.79
%
 
—%
 
11.46
 %
 
2016
 
148

 
$
16.14
 
$
2,393

 
2.49
%
 
—%
 
6.32
 %
 
2015
 
125

 
$
15.18
 
$
1,891

 
3.39
%
 
—%
 
(0.78
)%
 
2014
 
95

 
$
15.30
 
$
1,458

 
3.06
%
 
—%
 
6.25
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SAM Conservative Growth Portfolio Class 1:
 
2018
 
1,013

 
$
17.92
 
$
18,153

 
2.84
%
 
—%
 
(6.62
)%
 
2017
 
904

 
$
19.19
 
$
17,345

 
1.59
%
 
—%
 
19.71
 %
 
2016
 
724

 
$
16.03
 
$
11,600

 
1.48
%
 
—%
 
7.01
 %
 
2015
 
567

 
$
14.98
 
$
8,495

 
2.28
%
 
—%
 
(1.06
)%
 
2014
 
402

 
$
15.14
 
$
6,094

 
1.90
%
 
—%
 
7.38
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Principal National Life Insurance Company
Variable Life Separate Account

Notes to Financial Statements
December 31, 2018


 
 
 
December 31,
 
For the year ended December 31, except as noted
 
 
 
 
 
 
Unit fair value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
corresponding
 
 
 
 
 
 
Expense
 
Total return (3)
 
 
 
 
 
 
to lowest
 
 
 
 
Investment
 
ratio (2)
 
corresponding to
 
 
 
Units
 
 
to highest
 
 
Net assets
 
income
 
lowest to
 
lowest to highest
 
Division
 
(000's)
 
 
expense ratio
 
 
(000's)
 
ratio (1)
 
highest
 
expense ratio
SAM Flexible Income Portfolio Class 1:
 
2018
 
166

 
$
17.29
 
$
2,876

 
3.96
%
 
—%
 
(1.98
)%
 
2017
 
184

 
$
17.64
 
$
3,251

 
3.32
%
 
—%
 
8.42
 %
 
2016
 
139

 
$
16.27
 
$
2,263

 
3.08
%
 
—%
 
7.04
 %
 
2015
 
85

 
$
15.20
 
$
1,288

 
3.14
%
 
—%
 
(1.30
)%
 
2014
 
108

 
$
15.40
 
$
1,671

 
3.29
%
 
—%
 
6.06
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SAM Strategic Growth Portfolio Class 1:
 
2018
 
1,514

 
$
17.67
 
$
26,742

 
2.43
%
 
—%
 
(8.59
)%
 
2017
 
1,339

 
$
19.33
 
$
25,888

 
1.44
%
 
—%
 
22.19
 %
 
2016
 
1,182

 
$
15.82
 
$
18,698

 
1.49
%
 
—%
 
6.17
 %
 
2015
 
858

 
$
14.90
 
$
12,776

 
2.34
%
 
—%
 
(1.59
)%
 
2014
 
579

 
$
15.14
 
$
8,774

 
1.55
%
 
—%
 
8.61
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Short-Term Income Class 1:
 
2018
 
142

 
$
13.35
 
$
1,896

 
2.24
%
 
—%
 
1.06
 %
 
2017
 
134

 
$
13.21
 
$
1,764

 
2.15
%
 
—%
 
2.40
 %
 
2016
 
69

 
$
12.90
 
$
895

 
2.21
%
 
—%
 
2.14
 %
 
2015
 
54

 
$
12.63
 
$
682

 
2.86
%
 
—%
 
0.72
 %
 
2014
 
50

 
$
12.54
 
$
627

 
1.80
%
 
—%
 
1.70
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SmallCap Class 1:
 
2018
 
65

 
$
30.14
 
$
1,947

 
0.32
%
 
—%
 
(10.88
)%
 
2017
 
57

 
$
33.82
 
$
1,919

 
0.38
%
 
—%
 
12.85
 %
 
2016
 
49

 
$
29.97
 
$
1,470

 
0.26
%
 
—%
 
17.39
 %
 
2015
 
39

 
$
25.53
 
$
1,002

 
0.07
%
 
—%
 
(0.08
)%
 
2014
 
12

 
$
25.55
 
$
316

 
0.30
%
 
—%
 
4.89
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Templeton Global Bond VIP Class 2:
 
2018
 
97

 
$
16.35
 
$
1,589

 
—%

 
—%
 
1.93
 %
 
2017
 
85

 
$
16.04
 
$
1,366

 
—%

 
—%
 
1.91
 %
 
2016
 
57

 
$
15.74
 
$
904

 
—%

 
—%
 
2.94
 %
 
2015
 
47

 
$
15.29
 
$
714

 
7.50
%
 
—%
 
(4.32
)%
 
2014
 
34

 
$
15.98
 
$
538

 
4.70
%
 
—%
 
1.85
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TOPS Managed Risk Balanced ETF Class 2:
 
2018
 
37

 
$
12.59
 
$
463

 
1.79
%
 
—%
 
(6.04
)%
 
2017
 
32

 
$
13.40
 
$
432

 
1.60
%
 
—%
 
10.56
 %
 
2016
 
27

 
$
12.12
 
$
333

 
1.31
%
 
—%
 
6.22
 %
 
2015
 
26

 
$
11.41
 
$
297

 
1.39
%
 
—%
 
(4.52
)%
 
2014
 
18

 
$
11.95
 
$
214

 
1.13
%
 
—%
 
3.11
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Principal National Life Insurance Company
Variable Life Separate Account

Notes to Financial Statements
December 31, 2018


 
 
 
December 31,
 
For the year ended December 31, except as noted
 
 
 
 
 
 
Unit fair value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
corresponding
 
 
 
 
 
 
Expense
 
Total return (3)
 
 
 
 
 
 
to lowest
 
 
 
 
Investment
 
ratio (2)
 
corresponding to
 
 
 
Units
 
 
to highest
 
 
Net assets
 
income
 
lowest to
 
lowest to highest
 
Division
 
(000's)
 
 
expense ratio
 
 
(000's)
 
ratio (1)
 
highest
 
expense ratio
TOPS Managed Risk Growth ETF Class 2:
 
2018
 
135

 
$
13.14
 
$
1,775

 
1.64
%
 
—%
 
(8.69
)%
 
2017
 
126

 
$
14.39
 
$
1,813

 
1.56
%
 
—%
 
17.66
 %
 
2016
 
116

 
$
12.23
 
$
1,422

 
1.59
%
 
—%
 
5.52
 %
 
2015
 
102

 
$
11.59
 
$
1,185

 
1.65
%
 
—%
 
(9.10
)%
 
2014
 
73

 
$
12.75
 
$
927

 
1.21
%
 
—%
 
1.27
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TOPS Managed Risk Moderate Growth ETF Class 2:
 
2018
 
63

 
$
13.17
 
$
835

 
1.75
%
 
—%
 
(7.19
)%
 
2017
 
52

 
$
14.19
 
$
745

 
1.72
%
 
—%
 
13.79
 %
 
2016
 
43

 
$
12.47
 
$
534

 
1.62
%
 
—%
 
6.31
 %
 
2015
 
34

 
$
11.73
 
$
393

 
1.50
%
 
—%
 
(6.31
)%
 
2014
 
23

 
$
12.52
 
$
287

 
1.11
%
 
—%
 
2.79
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
VanEck Global Hard Assets Class S:
 
2018
 
100

 
$
5.06
 
$
506

 
—%

 
—%
 
(28.43
)%
 
2017
 
94

 
$
7.07
 
$
668

 
—%

 
—%
 
(1.94
)%
 
2016
 
70

 
$
7.21
 
$
505

 
0.32
%
 
—%
 
43.34
 %
 
2015
 
49

 
$
5.03
 
$
244

 
0.03
%
 
—%
 
(33.55
)%
 
2014
 
30

 
$
7.57
 
$
227

 
—%

 
—%
 
(19.38
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Wanger International:
 
2018
 
47

 
$
9.80
 
$
463

 
2.00
%
 
—%
 
(17.72
)%
 
2017
 
19

 
$
11.91
 
$
225

 
1.28
%
 
—%
 
32.92
 %
 
2016
 
11

 
$
8.96
 
$
99

 
1.44
%
 
—%
 
(1.43
)%
 
2015 (7)
 
2

 
$
9.09
 
$
21

 
2.15
%
 
—%
 
(9.19
)%


Principal National Life Insurance Company
Variable Life Separate Account

Notes to Financial Statements
December 31, 2018


(1)
These amounts represent the dividends, excluding distributions of capital gains, received by the division from the underlying mutual fund, net of management fees assessed by the fund manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that result in direct reductions in the unit values. The recognition of investment income by the division is affected by the timing of the declaration of dividends by the underlying fund in which the divisions invest. These ratios are annualized for periods less than one year.
(2)
These ratios represent the annualized contract expenses of the divisions, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contractholder accounts through the redemption of units and expenses of the underlying fund are excluded.
(3)
These amounts represent the total return for the years indicated, including changes in the value of the underlying fund, and reflect deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units; inclusion of these expenses in the calculation would result in a reduction in the total return presented. Investment options with a date notation indicate the effective date of that investment option in the variable account. For purposes of the total return calculation the beginning unit value is typically equal to an investment option with a similar expense structure and if no such similar investment option exists, a beginning unit value of ten would typically be used. The total return is calculated for the year indicated or from the effective date through the end of the reporting period. Total returns have not been annualized for periods less than one year. These percentages represent the range of total returns available as of the report date and correspond with the expense ratio lowest to highest.
(4)
Commencement of operations, April 24, 2014. Investment income ratios have been annualized for the year ended December 31, 2014.
(5)
Commencement of operations, May 17, 2014. Investment income ratios have been annualized for the year ended December 31, 2014.
(6)
Commencement of operations, April 17, 2015. Investment income ratios have been annualized for the year ended December 31, 2015.
(7)
Commencement of operations, May 18, 2015. Investment income ratios have been annualized for the year ended December 31, 2015.
(8)
Commencement of operations, February 8, 2016. Investment income ratios have been annualized for the year ended December 31, 2016.
(9)
Commencement of operations, May 23, 2016. Investment income ratios have been annualized for the year ended December 31, 2016.
(10)
Commencement of operations, November 18, 2016. Investment income ratios have been annualized for the year ended December 31, 2016.
(11)
Commencement of operations, June 11, 2018. Investment income ratios have been annualized for the year ended December 31, 2018.
(12)
Represented the operations of Deutsche Small Mid Cap Value Class B Division until October 13, 2018.
(13)
Represented the operations of Invesco Global Health Care Series I Division until June 9, 2018.
 
 

7. Subsequent Events
    
The Separate Account performed an evaluation of subsequent events through April 26, 2019, and determined no items required recognition or disclosure.

 


APPENDIX B - Principal National Life Insurance Company Financials





Report of Independent Auditors


The Board of Directors and Stockholder
Principal National Life Insurance Company

We have audited the accompanying financial statements of Principal National Life Insurance Company (the Company), which comprise the statements of financial position as of December 31, 2018 and 2017, and the related statements of operations, comprehensive income, stockholder’s equity and cash flows for each of the three years in the period ended December 31, 2018, and the related notes to the financial statements.
Management’s responsibility for the financial statements
Management is responsible for the preparation and fair presentation of these financial statements in conformity with U.S. generally accepted accounting principles; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Principal National Life Insurance Company at December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2018, in conformity with U.S. generally accepted accounting principles.
/s/ Ernst & Young LLP

April 4, 2019



 

Princip al National Life Insurance Company
Statements of Financial Position
 
    December 31,  
    2018     2017  
    (in thousands)    
Assets            
Fixed maturities, available-for-sale $ 160,175.6   $ 137,441.3  
Policy loans   23,910.0     17,629.3  
Total investments   184,085.6     155,070.6  
Cash and cash equivalents   37,520.5     13,245.1  
Accrued investment income   1,978.7     1,597.5  
Premiums due and other receivables   3,419,862.0     2,974,776.0  
Goodwill   95.0     95 .0  
Other intangibles   1,755.0     1,755.0  
Separate account assets   172,374.3     159,393.9  
Deferred income tax es   28,598.5     21,313.2  
Other assets   408.7     305.0  
Total assets $ 3,846,678.3   $ 3,327,551.3  
Liabilities            
Contractholder funds $ 2,046,774.2   $ 1,880,492.3  
Future policy benefits and claims   1,246,614.3     1,003,673.6  
Other policyholder funds   123,145.3     87,031.2  
Income tax es currently payable   1,749.6     1,619.8  
Separate account liabilities   172,374.3     159,393.9  
Other liabilities   33,148.1     26,303.6  
Total liabilities   3,623,805.8     3,158,514.4  
Stockholder's eq uity            
Common stock, par value $1.00 per share - 5.0 million shares authorized, 2.5 million            
shares issued and outstanding (wholly owned indirectly by Principal Financial            
Group, Inc.)   2,500.0     2,500.0  
Preferred stock, par value $1.00 per share - 1.0 million shares authorized, none issued            
and outstanding   —     —  
Additional paid-in capital   235,195.7     176,404.7  
Retained deficit   (13,204.2 )   (13,956.1 )
Accumulated other comprehensive income (loss)   (1,619.0 )   4,088.3  
Total stockholder's equity   222,872.5     169,036.9  
Total liabilities and stockholder's equity $ 3,846,678.3   $ 3,327,551.3  
 
See accompanying notes.            

 

 

Principal National Life Insurance Company
Statements of Operations
 
    For the year ended December 31,  
    2018     2017     2016
          (in thousands)      
Rev enues                
Premiums and other considerations $ 7.2   $ 6.4   $ 6.6
Fees and other revenues   343.3     258.3     175.7
Net investment income   6,074.2     4,865.9     3,825.2
Net realized capital gains   44.3     —     24 .2
Total revenues   6,469.0     5,130.6     4,031.7
E xpenses                
Benefits, claims and settlement ex penses   (0.6 )   0.9     0.5
Operating ex penses   3,943.4     3,990.2     3,365.8
Total ex penses   3,942.8     3,991.1     3,366.3
Income before income taxes   2,526.2     1,139.5     665.4
Income tax es   584.0     14,080.9     197.7
Net income (loss) $ 1,942.2   $ (12,941.4 ) $ 467.7
 
See accompanying notes.                

 

 

Principal National Life Insurance Company
Statements of Comprehensiv e Income
 
    For the year ended December 31,  
    2018     2017     2016
          (in thousands)      
 
Net income (loss) $ 1,942.2   $ (12,941.4 ) $ 467.7
Other comprehensive income (loss):                
Net unrealized gains (losses) on available-for-sale securities   (6,587.8 )   2,333.8     809.1
Comprehensive income (loss) $ (4,645.6 ) $ (10,607.6 ) $ 1,276.8
 
See accompanying notes.                

 

 

Principal National Life Insurance Company
Statements of Stockholder's Equity
 
                  Accumulated      
          Additional       other   Total  
    Common   paid-in   Retained   comprehensive   stockholder's  
    stock     capital   deficit   income (loss)   equity  
              (in thousands)          
 
Balances at January 1, 2016 $               2,500.0   $             121,408.2 $                     (978.3 ) $                  945.4 $             123,875.3  
Capital contributions from parent   —     22,500.0   —   —   22,500.0  
Stock-based compensation                        
and additional related tax benefits   —     3,592.7   (220.7 ) —   3,372.0  
Net income   —     —   467.7   —   467.7  
Other comprehensive income   —     —   —   809.1   809.1  
Balances at December 31, 2016   2,500.0     147,500.9   (731.3 ) 1,754.5   151,024.1  
Capital contributions from parent   —     25,000.0   —   —   25,000.0  
Stock-based compensation   —     3,903.8   (283.4 ) —   3,620.4  
Net loss   —     —   (12,941.4 ) —   (12,941.4 )
Other comprehensive income   —     —   —   2,333.8   2,333.8  
Balances at December 31, 2017   2,500.0     176,404.7   (13,956.1 ) 4,088.3   169,036.9  
Capital contributions from parent   —     55,000.0   —   —   55,000.0  
Stock-based compensation   —     3,791.0   (309.8 ) —   3,481.2  
Effects of implementation of                        
accounting change related to the                        
reclassification of certain tax                        
effects, net         —   (880.5 ) 880.5   —  
Net income   —     —   1,942.2   —   1,942.2  
Other comprehensive loss   —     —   —   (6,587.8 ) (6,587.8 )
Balances at December 31, 2018 $              2,500.0   $           235,195.7 $             (13,204.2 ) $         (1,619.0 ) $           222,872.5  
 
See accompanying notes.                        

 

 

Principal National Life Insurance Company
Statements of Cash Flow s
 
    For the year ended December 31,    
    2018     2017     2016  
          (in thousands)        
Operating activities                  
Net income (loss) $ 1,942.2   $ (12,941.4 ) $ 467.7  
Adjustments to reconcile net income (loss) to net cash used in                  
       operating activities:                  
Net realized capital gains   (44.3 )   —     (24.2 )
Stock-based compensation   3,481.2     3,620.4     3,372.0  
Changes in:                  
Accrued investment income   (381.2 )   (239.3 )   (275.2 )
Premiums due and other receivables   (445,086.0 )   (452,205.9 )   (354,237.7 )
Future policy benefits and claims   102,052.3     82,581.5     67,928.7  
Current and deferred income taxes (benefits)   (4,523.8 )   9,012.7     (5,289.9 )
Other assets and liabilities   6,740.7     9,375.0     3,090.7  
Other   (14.1 )   (15.5 )   (17.6 )
Net adjustments   (337,775.2 )   (347,871.1 )   (285,453.2 )
Net cash used in operating activities   (335,833.0 )   (360,812.5 )   (284,985.5 )
Inv esting activities                  
Available-for-sale securities:                  
Purchases   (32,575.9 )   (17,550.4 )   (21,544.7 )
Sales   1,488.6     —     1,926.5  
Maturities   72.4     72.4     59 .6  
Net change in other investments   (7,161.2 )   (1,751.2 )   (5,888.0 )
Net cash used in investing activities   (38,176.1 )   (19,229.2 )   (25,446.6 )
Financing activities                  
Investment contract deposits   412,749.8     393,831.4     305,125.6  
Investment contract withdrawals   (69,465.3 )   (24,703.1 )   (19,341.7 )
Capital contributions from parent   55,000.0     25,000.0     22,500.0  
Ex cess tax benefits from share-based payment arrangements   —     —     459.1  
Net cash provided by financing activities   398,284.5     394,128.3     308,743.0  
Net increase (decrease) in cash and cash equivalents   24,275.4     14,086.6     (1,689.1 )
Cash and cash equivalents at beginning of year   13,245.1     (841.5 )   847.6  
Cash and cash equivalents at end of year $ 37,520.5   $ 13,245.1   $ (841.5 )
 
Supplemental information:                  
Cash paid for income taxes $ 5,877.2   $ 5,068.2   $ 4,645.8  
 
See accompanying notes.                  

 

 

Principal National Life Insurance Company
Notes to Financial Statements
December 31, 2018
(in thousands)

1. Nature of Operations and Significant Accounting Policies

Descrip tion of Business

     Principal National Life Insurance Company is 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 ”), our ultimate parent. We are a life insurance company licensed in 49 states currently selling traditional term, universal life, variable universal life and indexed universal life insurance products.

Basis of Presentation

     The accompanying financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”).

     Certain reclassifications have been made to deferred income tax liabilities related to policy loans to conform to the December 31, 2018, presentation. See Note 5, Income Taxes, under the caption “Net Deferred Income Taxes” for further details.

 

Principal National Life Insurance Company
Notes to Financial Statements – (continued)
December 31, 2018
(in thousands)
 
Recent Accounting Pronouncements    
 
        Effect on our financial
      Date of statements or other significant
Description adoption matters
Standards not yet adopted:    
Targeted improv ements to the accounting for long-duration January 1, Our implementation and
insurance contracts 2021 evaluation process to date
This authoritative guidance updates certain requirements in the   includes, but is not limited to,
accounting for long-duration insurance and annuity contracts.   identifying and documenting
        contracts and contract features in
1 . The assumptions used to calculate the liability for future policy   scope of the guidance; identifying
    benefits on traditional and limited-payment contracts will be   the actuarial models, systems and
    reviewed and updated periodically. Cash flow assumptions   processes to be updated; and
    will be reviewed at least annually and updated when necessary   evaluating our systems solutions
    with the impact recognized in net income. Discount rate   for implementing the new
    assumptions are prescribed as the current upper-medium grade   guidance. As we progress through
    (low credit risk) fixed income instrument yield and will be   our implementation, we will be
    updated quarterly with the impact recognized in other   able to better assess the impact to
    comprehensive income (“OCI”).   our financial statements;
2 . Market risk benefits, which are certain market-based options   however, we expect this guidance
    or guarantees associated with deposit or account balance   to significantly change how we
    contracts, will be measured at fair value. The periodic change   account for many of our
    in fair value related to instrument-specific credit risk will be   insurance and annuity products.
    recognized in OCI while the remaining change in fair value    
    will be recognized in net income.    
3 . Deferred acquisition costs (“DAC”) for all insurance and    
    annuity contracts will be amortized on a constant basis over    
    the expected term of the related contracts.    
4 . Additional disclosures are required, including disaggregated    
    rollforwards of significant insurance liabilities and other    
    account balances and disclosures about significant inputs,    
    judgments, assumptions and methods used in measurement.    
 
The guidance for the liability for future policy benefits for traditional    
and limited-payment contracts and DAC will be applied on a modified    
retrospective basis; that is, to contracts in force as of the beginning of    
the earliest period presented based on their existing carrying amounts.    
An entity may elect to apply the changes retrospectively. The guidance    
for market risk benefits will be applied retrospectively. Early adoption    
is permitted.    

 

 

Principal National Life Insurance Company
Notes to Financial Statements – (continued)
December 31, 2018
(in thousands)
 
    E ffect on our financial
  Date of statements or other significant
Description adoption matters
Goodwill imp airment testing January 1, We are currently evaluating the
This authoritative guidance simplifies how an entity is required to test 2020 impact this guidance will have on
goodwill for impairment by eliminating Step 2 (which measures a   our financial statements, but do
goodwill impairment loss by comparing the implied fair value of a   not expect it to have a material
reporting unit’s goodwill to the carrying amount of that goodwill) from   impact on our financial
the goodwill impairment test. A goodwill impairment loss will be the   statements. We expect the
amount by which a reporting unit’s carrying value exceeds its fair value,   guidance will reduce complexity
not to exceed the carrying amount of goodwill. Entities will continue to   and costs associated with
have the option to perform a qualitative assessment to determine if a   performing a Step 2 test, should
quantitative impairment test is necessary. Early adoption is permitted.   one be needed in the future.
    However, the impact on the
    outcome of any such future
    impairment assessment will be
    dependent on modeling factors
    that are not currently
    determinable.
 
Standards adopted:    
Reclassification of certain tax effects from accumulated other January 1, The effective date of the
comprehensive income 2018 guidance was January 1, 2019;
This authoritative guidance permits a reclassification from accumulated   however, we elected to early
other comprehensive income (“AOCI”) to retained earnings for the   adopt the guidance. The
stranded tax effects resulting from U.S. tax legislation enacted on   guidance was applied at the
December 22, 2017, which is referred to as the ‘‘Tax Cuts and Jobs   beginning of the period of
Act’’ (‘‘U.S. tax reform ’’). The amount of that reclassification includes   adoption and comparative
the change in corporate income tax rate, as well as an election to include   periods were not restated. We
other income tax effects related to the application of U.S. tax reform .   reclassified the stranded tax
The guidance also requires disclosures about stranded tax effects.   effects in AOCI resulting from
    U.S. tax reform, which includes
    the change in corporate income
    tax rate and an election to
    reclassify the tax effects of the
    one-time deemed repatriation
    tax . A reclassification of
    $880.5 was recorded as an
    increase to AOCI and a
    decrease to retained earnings.
 
Rev enue recognition January 1, We adopted the guidance using
This authoritative guidance replaces all general and most industry 2018 the modified retrospective
specific revenue recognition guidance currently prescribed by U.S.   approach, with no cumulative
GAAP. The core principle is that an entity recognizes revenue to reflect   effect to be recognized at the date
the transfer of a promised good or service to customers in an amount   of initial application. The
that reflects the consideration to which the entity expects to be entitled   guidance did not have a material
in exchange for that good or service. This guidance also provides   impact on our financial
clarification on when an entity is a principal or an agent in a transaction.   statements.
In addition, the guidance updates the accounting for certain costs    
associated with obtaining and fulfilling a customer contract. The    
guidance may be applied using one of the following two methods: (1)    
retrospectively to each prior reporting period presented, or (2)    
retrospectively with the cumulative effect of initially applying the    
standard recognized at the date of initial application.    

 

 

Principal National Life Insurance Company
Notes to Financial Statements – (continued)
December 31, 2018
(in thousands)
 
    E ffect on our financial
  Date of statements or other significant
Description adoption matters
Nonfinancial asset derecognition and partial sales of nonfinancial January 1, The guidance did not have a
assets 2018 material impact on our financial
This authoritative guidance clarifies the scope of the recently   statements.
established guidance on nonfinancial asset derecognition and the    
accounting for partial sales of nonfinancial assets. The guidance    
conforms the derecognition guidance on nonfinancial assets with the    
model for transactions in the new revenue recognition standard.    
 
E mployee share-based payment accounting January 1, The guidance was adopted
This authoritative guidance changes certain aspects of accounting for 2017 prospectively as indicated by the
and reporting share-based payments to employees including changes   guidance for each area of change
related to the income tax effects of share-based payments, tax   and did not have a material
withholding requirements and accounting for forfeitures. Various   impact on our financial
transition methods will apply depending on the situation being   statements.
addressed.    

 

     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.

Use of Estimates in the Preparation of Financial Statements

     The preparation of our financial statements and accompanying notes requires management to make estimates and assumptions that affect the amounts reported and disclosed. These estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed in the financial statements and accompanying notes. 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 measurement of goodwill and indefinite lived intangible assets and related impairments, if any; the liability for future policy benefits and claims and accounting for income taxes and the valuation of deferred tax assets.

     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. Many of these policies, estimates and related judgments are common in the insurance industry; others are specific to our businesses and operations. Actual results could differ from these estimates.

Cash and Cash Equiv alents

     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 and asset-backed securities (“ABS”). We classify our fixed maturities as available-for-sale and, accordingly, carry them at fair value. See Note 8, Fair Value Measurements, for methodologies related to the determination of fair value. We determine the appropriate classification of fixed maturity securities at the time of purchase. Unrealized gains and losses related to available-for-sale securities are reflected in stockholder’s equity, net of adjustments for income taxes.

 

Principal National Life Insurance Company
Notes to Financial Statements – (continued)
December 31, 2018
(in thousands)

     The cost of fixed maturity securities is adjusted for amortization of premiums and accrual of discounts, both computed using the interest method. The cost of fixed maturity securities is adjusted for declines in value that are other than temporary. In addition to realized capital gains and losses on investment sales, impairments in value deemed to be other than temporary are reported in net income as a component of net realized capital gains (losses). Interest income, as well as 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.

     Net realized capital gains and losses on sales of investments are determined on the basis of specific identification. In addition to realized capital gains and losses on investment sales, we report other-than-temporary impairments of securities and subsequent realized recoveries in net realized capital gains (losses).

Policy loans are reported at cost.

Premiums Due and Other Receiv ables

     Premiums due and other receivables consist primarily of the estimated reinsurance receivable for the ceding of business to Principal Life Insurance Company (“Principal Life”).

Contractholder and Policyholder Liabilities

     Contractholder and policyholder liabilities (contractholder funds, future policy benefits and claims and other policyholder funds) include reserves for universal life, variable universal life, indexed universal life and term life insurance.

     Contractholder funds consist entirely of the account balance that accrues to the benefit of the policyholders for universal life, variable universal life and indexed universal life insurance. The account balance reflects the cumulative deposits less charges plus credited interest.

     Incurred claim liability adjustments relating to prior years, which affected current operations during 2018, 2017 and 2016, resulted in part from changes in the estimates for incurred but not reported (“IBNR”) claims. Historical trends have been considered in establishing the current year IBNR liability. The claim liability also includes reported claims that are in course of settlement and claims that are due and unpaid. As of December 31, 2018 and 2017, unpaid claim liabilities were $33,648.3 and $26,976.3, respectively, which were 100% reinsured to Principal Life.

     Future policy benefits include additional reserves on contracts where benefit features result in gains in early years followed by losses in later years and for universal life, variable universal life and indexed universal life insurance contracts that contain no lapse guarantee features. It also includes waiver active and disabled reserves for universal life, variable universal life, indexed universal life and term insurance.

     Reserves for nonparticipating term life insurance contracts are computed on a basis of assumed investment yield, mortality, morbidity and expenses, including a provision for adverse deviation, which generally varies by plan, year of issue and policy duration. Investment yield is based on our experience. Mortality, morbidity and withdrawal rate assumptions are based on our experience and are periodically reviewed against both industry standards and experience.

     Other policyholder funds consist of unearned revenue liabilities for front-end fees and return of cost of insurance ("COI") charges for universal life, variable universal life and indexed universal life insurance, and advanced premiums for term life insurance. These are paid in advance for services that will be rendered over the estimated lives of the policies and contracts. The payments are established as unearned revenue liabilities upon receipt and are amortized to net income over the estimated lives of these policies and contracts in relation to the emergence of estimated gross profits.

 

Principal National Life Insurance Company
Notes to Financial Statements – (continued)
December 31, 2018
(in thousands)

Reinsurance

     We enter into reinsurance agreements with Principal Life in the normal course of business. We assume reinsurance from and cede reinsurance to Principal Life. Assets and liabilities related to reinsurance ceded are reported on a gross basis. Premiums, fees and expenses are reported net of reinsurance ceded. The effects of reinsurance on premiums and other considerations, fees and other revenues and policy and contract benefits were as follows:

    For the year ended December 31,    
    2018     2017     2016  
Premiums and other considerations:                  
Direct $ 325,453.2   $ 277,905.7   $ 224,277.6  
Assumed   7.2     6.4     6.6  
Ceded   (325,453.2 )   (277,905.7 )   (224,277.6 )
Net premiums and other considerations $ 7.2   $ 6.4   $ 6.6  
Fees and other revenues:                  
Direct $ 230,329.6   $ 221,253.2   $ 180,204.8  
Ceded   (229,986.3 )   (220,994.9 )   (180,029.1 )
Net fees and other revenues $ 343.3   $ 258.3   $ 175.7  
Benefits, claims and settlement ex penses:                  
Direct $ 484,899.0   $ 413,388.0   $ 328,753.1  
Assumed   0.5     0.1     0.5  
Ceded   (484,900.1 )   (413,387.2 )   (328,753.1 )
Net benefits, claims and settlement expenses $ (0.6 ) $ 0.9   $ 0.5  

 

     Principal Life pays us a reinsurance expense allowance for its proportionate share of commissions and other policy expenses. The expense allowance is a reduction to operating expenses and was $291,217.2, $286,898.8 and $236,200.1, for the years ended December 31, 2018, 2017 and 2016, respectively. The cost of reinsurance related to long-duration contracts is accounted for over the life of the underlying reinsured policies using assumptions consistent with those used to account for the underlying policies. 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, 2018 and 2017, our exposure to Principal Life in our individual life insurance business was $245,166,277.3 and $211,213,025.9 of life insurance in force, representing 99.9% and 99.9% of total net individual life insurance in force, respectively.

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

     Traditional individual life insurance products include those products with fix ed and guaranteed premiums and benefits and consist of term life insurance policies. Premiums from these products are recognized as premium revenue when due. Related policy benefits and expenses are associated with earned premiums and result in the recognition of profits over the expected term of the policies and contracts.

     Universal life, variable universal life and indexed universal life products are insurance contracts with terms that are not fixed. Amounts received as payments for such contracts are not reported as premium revenues. Revenues for these products consist of policy charges for COI, 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.

Separate Accounts

     The separate account assets are legally insulated 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 investments and are presented as a summary total within the statements of financial position. An equivalent amount is reported as separate account liabilities, which represent the obligation to return the monies to the client. We receive fees for mortality, withdrawal and expense risks, as well as administrative, maintenance and investment advisory services that are included in the statements of operations. Net deposits, net investment income and realized and unrealized capital gains and losses on the separate accounts are not reflected in the statements of operations.

 

Principal National Life Insurance Company
Notes to Financial Statements – (continued)
December 31, 2018
(in thousands)

Income Taxes

     Our ultimate parent, PFG, files a U.S. consolidated income tax return that includes us. In addition, we file income tax returns in all states in which we conduct business. PFG allocates income tax expenses and benefits to companies in the group generally based upon pro rata contribution of tax able income or operating losses. We are tax ed at corporate rates on taxable income based on ex isting 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 losses 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. However, a specific exception to this rule was adopted effective January 1, 2018, to reclassify the stranded tax effects generated by U.S. tax reform from AOCI to retained earnings. Further details are included under the caption “Recent Accounting Pronouncements.”

Goodwill and Other Intangibles

     We recorded goodwill at the time or our acquisition by PFS equal to the cost paid by PFS in excess of the fair value of our net tangible assets. Goodwill is not amortized. Rather, goodwill is tested for impairment during the third quarter each year or more frequently if events or changes in circumstances indicate that the asset might be impaired.

     Other intangibles consist of values assigned to state licenses to sell insurance that were obtained at the time of acquisition. State licenses do not expire and have therefore been determined to have indefinite lives. Other intangibles are tested for impairment during the third quarter each year or more frequently if events or changes in circumstances indicate that the asset might be impaired.

2. Related Party Transactions

Expense Reimbursements

     We have entered into various related party transactions with affiliates. During the years ended December 31, 2018, 2017 and 2016, we received $15,661.9, $8,883.8 and $5,718.0, respectively, of expense reimbursements related to these agreements. We have a management services agreement with Principal Global Investors, LLC and management fees paid were $147.4, $125.0 and $100.4 during the years ended December 31, 2018, 2017 and 2016, respectively.

Cash Advance Agreement

     We are party to a cash advance agreement with PFS, which allows us to pool our available cash with 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 $20,000.0, with such advanced amounts earning interest at the daily 30-day LIBOR rate (the “Internal Crediting Rate”); and (ii) PFS to advance cash to us in aggregate principal amounts not to ex ceed $20,000.0, with such advance amounts paying interest at the Internal Crediting Rate plus 10 basis points to reimburse PFS for the costs incurred in maintaining short-term investing and borrowing programs. Under this cash advance agreement, we had a receivable of $35.9 and $13.9 as of December 31, 2018 and 2017, respectively. We earned interest of $324.9, $84.8 and $60.6 during 2018, 2017 and 2016, respectively, related to the cash advance agreement.

Reinsurance

     We assume reinsurance from Principal Life. Under this agreement, policy reserves assumed were $7.0 and $6.5 as of December 31, 2018 and 2017, respectively.

     We are a direct writer of life insurance policies and entered into a reinsurance transaction with Principal Life. Reinsurance premiums and other fees, ex penses and reserves related to reinsured business are accounted for on bases consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts. Under this agreement, we had a ceded reinsurance net asset of $3,399,153.4 and $2,975,270.3 as of December 31, 2018 and 2017,

 

Principal National Life Insurance Company
Notes to Financial Statements – (continued)
December 31, 2018
(in thousands)

respectively. We are contingently liable with respect to reinsurance ceded in the event Principal Life is unable to meet the obligations it has assumed. As of December 31, 2018, and 2017 we had a $2,979,295.2 and $2,625,335.5 recoverable from Principal Life, respectively.

     See Note 1, Nature of Operations and Significant Accounting Policies, under the caption “Reinsurance” for direct, ceded and assumed amounts included in the statements of operations.

Benefit Plans

     PFG provides defined benefit pension plan benefits to its employees. We were allocated an appropriate share of the costs associated with these benefits in accordance with an ex pense allocation agreement. Our allocated share of these benefits was $7,605.8 and $7,434.7 in 2018 and 2017, respectively.

     PFG provides qualified and non-qualified defined contribution and non-qualified deferred compensation plan benefits to its employees. We were allocated an appropriate share of the costs associated with these benefits in accordance with an ex pense allocation agreement. Our allocated share of these benefits was $4,240.3 and $5,005.7 in 2018 and 2017, respectively.

3. Goodwill and Other Intangibles

     We had goodwill of $95.0 as of both December 31, 2018 and 2017, and indefinite lived intangible assets of $1,755.0 as of both December 31, 2018 and 2017. The indefinite lived intangible assets consist of state licenses to sell insurance, which do not expire.

4. Investments

Fixed Maturities

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

        Gross   Gross    
    Amortized   unrealized   unrealized    
    cost   gains   losses   Fair value
December 31, 2018                
Fixed maturities, available-for-sale:                
U.S. government and agencies $    10,022.4 $             — $         151.7 $       9,870.7
States and political subdivisions   44,973.5   1,273.5   330.7   45,916.3
Corporate   94,057.6   520.9   3,408.6   91,169.9
Commercial mortgage-backed securities   11,172.5   105.1   57.6   11,220.0
Other debt obligations   1,999.0   —   0.3   1,998.7
Total fix ed maturities, available-for-sale $ 162,225.0 $    1,899.5 $     3,948.9 $  160,175.6
December 31, 2017                
Fixed maturities, available-for-sale:                
U.S. government and agencies $     10,029.9 $             — $           59.6 $       9,970.3
States and political subdivisions   33,881.3   2,216.2   —   36,097.5
Corporate   79,146.2   3,976.0   12.4   83,109.8
Commercial mortgage-backed securities   8,094.3   169.4   —   8,263.7
Total fix ed maturities, available-for-sale $   131,151.7 $     6,361.6 $           72.0 $   137,441.3

 

 

Principal National Life Insurance Company
Notes to Financial Statements – (continued)
December 31, 2018
(in thousands)

     The amortized cost and fair value of fix ed maturities available-for sale as of December 31, 2018, by expected maturity, were as follows:

  Amortized cost   Fair value
 
Due in one year or less $              — $               —
Due after one year through five years 46,338.5   46,635.6
Due after five years through ten years 42,139.6   42,075.4
Due after ten years 60,575.4   58,245.9
Subtotal 149,053.5   146,956.9
Mortgage-backed and other asset-backed securities 13,171.5   13,218.7
Total $  162,225.0 $  160,175.6

 

     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            
 
Major components of net investment income were as follows:            
 
  For the year ended December 31,
   2018   2017   2016  
 
Fixed maturities, available-for-sale $     5,869.8   $       4,905.3   $         3,861.3  
Policy loans 0.1   0.8   3.5  
Cash and cash equivalents 360.3   86.0   61.2  
Other (0.2 ) (0.2 ) (0.4 )
Total 6,230.0   4,991.9   3,925.6  
Investment ex penses (155.8 ) (126.0 ) (100.4 )
Net investment income $     6,074.2   $           4,865.9   $        3,825.2  

 

Net Realized Capital Gains

     Net realized capital gains on sales of fixed maturities available-for-sale were $44.3, $0.0 and $24.2 for the years ended December 31, 2018, 2017 and 2016, respectively.

     Proceeds from sales of investments (excluding call and maturity proceeds) in fixed maturities, available-for-sale were $1,488.6, $0.0 and $1,926.5 in 2018, 2017 and 2016, respectively.

Other-Than-Temporary Impairments

     We have a process in place to identify fixed maturity securities that could potentially have a credit impairment that is other than temporary. 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.

     Each reporting period, all securities are reviewed to determine whether an other-than-temporary decline in value ex ists and whether losses should be recognized. We consider relevant facts and circumstances in evaluating whether a credit or interest rate-related impairment of a security is other than temporary. Relevant facts and circumstances considered include: (1) the extent and length of time the fair value has been 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; (4) for structured securities, the adequacy of the ex pected cash flows; (5) our intent 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 ex tend to maturity. To the ex tent we determine a security is deemed to be other than temporarily impaired, an impairment loss is recognized. We did not recognize any other-than-temporary impairments as of December 31, 2018 and 2017.

 

Principal National Life Insurance Company
Notes to Financial Statements – (continued)
December 31, 2018
(in thousands)

Gross Unrealized Losses for Fixed Maturities

     For fixed maturities available-for-sale with unrealized losses, including other-than-temporary impairment losses reported in other comprehensive income, 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, 2018
    Less than     Greater than or        
    twelve months   equal to twelve months   Total  
        Gross       Gross       Gross
    Fair unrealized    Fair unrealized    Fair   unrealized
    v alue   losses   value   losses   value   losses
Fixed maturities, available-for-sale:                        
U.S. government and agencies $                 — $              — $         9,870.7 $         151.7 $           9,870.7 $        151.7
States and political subdivisions   10,733.1   330.7   —   —   10,733.1   330.7
Corporate   47,725.3   2,624.8   8,213.2   783.8   55,938.5   3,408.6
Commercial mortgage-backed securities   —   —   3,979.8   57.6   3,979.8   57.6
Other debt obligations   1,998.7   0.3   —   —   1,998.7   0.3
Total fix ed maturities, available-for-sale $     60,457.1 $    2,955.8 $      22,063.7 $        993.1 $         82,520.8 $     3,948.9

 

     Our portfolio consists of available-for-sale fixed maturities where 100% were investment grade (rated AAA through BBB-) with an average price of 99 (carrying value/amortized cost) as of December 31, 2018. Gross unrealized losses in our fix ed maturities portfolio increased during the year ended December 31, 2018, primarily due to changes in market interest rates and changes in credit spreads.

     For those securities that had been in a continuous unrealized loss position for less than twelve months, our portfolio held 43 securities reflecting an average price of 95 as of December 31, 2018. Of this portfolio, 100% was investment grade (rated AAA through BBB-) as of December 31, 2018.

     For those securities that had been in a continuous unrealized loss position for greater than or equal to twelve months, our portfolio held 9 securities reflecting an average price of 96 as of December 31, 2018. Of this portfolio, 100% was investment grade (rated AAA through BBB-) as of December 31, 2018.

     Because we expected to recover our amortized cost, 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 maturity, we did not consider these investments to be other-than-temporarily impaired as of December 31, 2018.

  December 31, 2017
    Less than   Greater than or        
    twelve months   equal to twelve months   Total  
        Gross       Gross       Gross
    Fair unrealized    Fair   unrealized   Fair   unrealized
    value   losses   value   losses   value   losses
Fixed maturities, available-for-sale:                        
U.S. government and agencies $          9,970.3 $      59.6 $          — $            — $              9,970.3 $         59 .6
Corporate   2,037.9   12.4   —   —   2,037.9   12 .4
Total fix ed maturities, available-for-sale $       12,008.2 $     72.0 $          — $            — $            12,008.2 $         72 .0

 

     Our portfolio consists of available-for-sale fixed maturities where 100% were investment grade (rated AAA through BBB-) with an average price of 99 as of December 31, 2017. Gross unrealized losses in our fixed maturities portfolio decreased during the year ended December 31, 2017, primarily due to changes in market interest rates and changes in credit spreads.

 

Principal National Life Insurance Company
Notes to Financial Statements – (continued)
December 31, 2018
(in thousands)

     For those securities that had been in a continuous unrealized loss position for less than twelve months, our portfolio held 3 securities reflecting an average price of 99 as of December 31, 2017. Of this portfolio, 100% was investment grade (rated AAA through BBB-) as of December 31, 2017.

     Because we expected to recover our amortized cost, 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 maturity, we did not consider these investments to be other-than-temporarily impaired as of December 31, 2017.

Net Unrealized Gains on Av ailable-for-Sale Securities

     The net unrealized gains on investments in fix ed maturities available-for-sale are reported as a separate component of stockholder’s equity. The cumulative amount of net unrealized gains on available-for-sale securities was as follows:

        December 31,    
        2018   2017  
 
Net unrealized gains (losses) on fixed maturities, available-for-sale     $      (2,049.4 ) $       6,289.6  
Provision for deferred income tax benefits (taxes)       430.4     (2,201.3 )
Net unrealized gains (losses) on available-for-sale securities     $      (1,619.0 ) $      4,088.3  
 
5. Income Taxes                
 
Income Tax Expense                
 
Our income taxes were as follows:                
 
  For the year ended December 31,    
  2018     2017     2016  
Current income taxes:                
U.S. federal $      6,006.9   $      5,131.1   $      5,057.3  
State 111.2     —     —  
Total current income tax es 6,118.1     5,131.1     5,057.3  
Deferred income taxes (benefits):                
U.S. federal (5,534.1 )   (5,259.0 )   (4,859.6 )
U.S. tax reform —     14,208.8     —  
Total deferred income taxes (benefits) (5,534.1 )   8,949.8     (4,859.6 )
Total income taxes $       584.0    $     14,080.9   $      197.7  

 

     U.S. tax reform made broad and complex changes to the U.S. Internal Revenue Code applicable to us. The primary impact on our 2017 financial results was associated with the effect of reducing the U.S. statutory tax rate from 35% to 21% on our deferred balances as of December 31, 2017.

     The effects of tax legislation on deferred tax es are recognized in the period of enactment. The effects of the U.S. tax reform were reflected in the 2017 financial statements as determined or as reasonably estimated provisional amounts based on available information subject to interpretation in accordance with the United States Securities and Ex change Commission's Staff Accounting Bulletin No. 118 ("SAB 118"). The provisional amount was primarily associated with limited and changing technical tax guidance. Further, the provisional amount also applies in regard to other potential technical interpretations of accounting and tax ing authorities related to elements of the U.S. tax reform subject to change. The provisional amount of $14,208.8 reported in 2017 reflects the SAB 118 final determination within the required one-year measurement period.

 

Principal National Life Insurance Company
Notes to Financial Statements – (continued)
December 31, 2018
(in thousands)

Effectiv e Income Tax Rate

     Our provision for income taxes may not have the customary relationship of tax es to income. A reconciliation between the U.S. corporate income tax rate and the effective tax rate is as follows:

  For the year ended December 31,
  2018   2017   2016  
 
U.S. corporate tax rate 21 % 35 % 35 %
Valuation allowance 15   —   —  
State income tax es 3   —   —  
Disallowed ex penses 2   —   —  
Stock options (10 ) (26 ) 26  
Dividends received deduction (6 ) (20 ) (26 )
Foreign tax credit (2 ) —   (5 )
U.S. tax reform —   1,247   —  
Effective income tax rate 23 % 1,236 % 30 %

 

Our income before income tax es is from domestic operations. We have no foreign operations.

Unrecognized Tax Benefits

     As of December 31, 2018 and 2017, we did not have any unrecognized tax benefits. We recognize interest and penalties related to uncertain tax positions in operating ex penses. As of both December 31, 2018 and 2017, we did not recognize accumulated pre-tax interest and penalties related to unrecognized tax benefits.

Net Deferred Income Taxes

     Deferred income tax es 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. Significant components of our net deferred income tax es were as follows:

  December 31,
  2018   2017
 
Deferred income tax assets:      
Net unrealized losses on available-for-sale securities $         430.4   $                —
Stock based compensation 17.3   (45 .5)
Deferred acquisition costs 28,633.6   23,151.0
Other deferred income tax assets 252.7   —
Valuation allowance (246.1) —
Total deferred income tax assets 29,087.9   23,105.5
Deferred income tax liabilities:      
Net unrealized gains on available-for-sale securities —   (1,320.8)
Intangible assets (368.9) (368.9)
Other deferred income tax liabilities (120.5) (102.6)
Total deferred income tax liabilities (489.4) (1,792.3)
Total net deferred income tax assets $   28,598.5   $        21,313.2

 

     As of December 31, 2018, charitable contributions of $1.2 million were limited under the Internal Revenue Code and were not deductible in the year generated. These contributions will be carried forward, portions of which ex pire during years 2020-2023. We maintain a valuation allowance against the deferred income tax assets associated with the charitable contributions of $246.1, as utilization of these income tax benefits within the carryforward period fail the more likely than not criteria. In management’s judgment, the remaining deferred income tax assets are more likely than not to be realized; therefore, no additional valuation allowance has been provided for the related deferred income tax assets.

 

Principal National Life Insurance Company
Notes to Financial Statements – (continued)
December 31, 2018
(in thousands)

6. Contingencies

     We are not aware of any material contingencies. It is possible we could be involved in legal and regulatory actions in the ordinary course of business. The outcome of such matters is always uncertain, and unforeseen results can occur. It is possible that such outcomes could result in losses or require us to establish accruals.

7. Stockholder's Equity                  
 
Other Comprehensiv e Income (Loss)                  
 
    For the year ended December 31, 2018  
    Pre-Tax     Tax     After-Tax  
 
Net unrealized losses on available-for-sale securities during the period $ (8,294.7 ) $ 1,741.9   $ (6,552.8 )
Reclassification adjustment for gains included in net income   (44.3 )   9.3     (35.0 )
Net unrealized losses on available-for-sale securities   (8,339.0 )   1,751.2     (6,587.8 )
Other comprehensive loss $ (8,339.0 ) $ 1,751.2   $ (6,587.8 )
 
    For the year ended December 31, 2017  
    Pre-Tax     Tax     After-Tax  
 
Net unrealized gains on available-for-sale securities during the period $ 3,590.5   $ (1,256.7 ) $ 2,333.8  
Net unrealized gains on available-for-sale securities   3,590.5     (1,256.7 )   2,333.8  
Other comprehensive income $ 3,590.5   $ (1,256.7 ) $ 2,333.8  
 
    For the year ended December 31, 2016  
    Pre-Tax     Tax     After-Tax  
 
Net unrealized gains on available-for-sale securities during the period $ 1,268.9   $ (444.1 ) $ 824.8  
Reclassification adjustment for gains included in net income   (24.2 )   8.5     (15.7 )
Net unrealized gains on available-for-sale securities   1,244.7     (435.6 )   809.1  
Other comprehensive income $ 1,244.7   $ (435.6 ) $ 809.1  

 

 

Principal National Life Insurance Company
Notes to Financial Statements – (continued)
December 31, 2018
(in thousands)

Accumulated Other Comprehensiv e Income

     A rollforward of accumulated other comprehensive income consisting entirely of net unrealized gains/(losses) on available-for-sale securities, was as follows:

    Net unrealized   Accumulated  
    gains (losses) on   other  
    av ailable-for-sale   comprehensive  
    securities   income (loss)  
 
Balances at January 1, 2016 $ 945.4 $ 945.4  
Other comprehensive income during the period, net of adjustments   824.8   824.8  
Amounts reclassified to AOCI   (15.7 ) (15.7 )
Other comprehensive income   809.1   809.1  
Balances at December 31, 2016   1,754.5   1,754.5  
Other comprehensive income during the period, net of adjustments   2,333.8   2,333.8  
Other comprehensive income   2,333.8   2,333.8  
Balances at December 31, 2017   4,088.3   4,088.3  
Other comprehensive loss during the period, net of adjustments   (6,552.8 ) (6,552.8 )
Amounts reclassified to AOCI   (35.0 ) (35.0 )
Other comprehensive loss   (6,587.8 ) (6,587.8 )
Effects of implementation of accounting change related to the reclassification of certain          
tax effects, net   880.5   880.5  
Balances at December 31, 2018 $ (1,619.0 ) $ (1,619.0 )
 
Div idend Limitations          

 

     Under Iowa law, we may pay dividends 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 (“Commissioner”) to pay a stockholder dividend or make any other distribution if such distribution would ex ceed certain statutory limitations. Iowa law gives the Commissioner discretion to disapprove requests for distributions in ex cess of these limitations. Extraordinary dividends include those made, together with dividends and other distributions, within the preceding twelve months that ex ceed the greater of (i) 10% of our statutory policyholder surplus as the previous year-end or (ii) the statutory net gain from operations from the previous calendar year, not to exceed earned surplus. Based on this limitation and 2018 statutory results, we cannot pay stockholder dividends in 2019 without exceeding the statutory limitation.

We did not pay any dividends during 2018 or 2017.

Additional Paid-In Capital

     The expenses related to stock based compensation issued by PFG are allocated to all of its subsidiaries. The allocation of equity awards, which amounted to $3,791.0, $3,903.8 and $3,592.7 for the years ended December 31, 2018, 2017 and 2016, respectively, are not settled in cash and, therefore, are reported as equity.

8. 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, 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 ex it 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

 

Principal National Life Insurance Company
Notes to Financial Statements – (continued)
December 31, 2018
(in thousands)

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.

Lev el 1 – Fair values are based on unadjusted quoted prices in active markets for identical assets or liabilities. Our Level 1 assets include highly liquid U.S. Treasury bonds and mutual funds in our separate accounts.

Lev el 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. Our Level 2 assets primarily include fix ed maturity securities.

Lev el 3 – Fair values are based on at least one significant unobservable input for the asset or liability. We have no Level 3 assets and liabilities recorded at fair value.

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 or disclosed at fair value. 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 ex ternal sources and use of internal models or other relevant information. We did not make any significant changes to our valuation processes during 2018.

Fixed Maturities

     Fixed maturities include bonds and ABS. 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.

     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 are generally reflected in Level 2.

     If we are unable to price a fix ed 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, which are reflected in Level 3. These models primarily use projected cash flows discounted using a rate derived from market interest rate curves and relevant risk spreads.

     The primary inputs, by asset class, for valuations of our Level 2 investments from third party pricing vendors or our internal pricing valuation approach are described below.

     U.S. Government and Agencies. Inputs include recently ex ecuted 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.

     Commercial Mortgage-Backed Securities 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

 

Principal National Life Insurance Company
Notes to Financial Statements – (continued)
December 31, 2018
(in thousands)

performance of the underlying collateral including prepayments, defaults, deferrals, loss severity of defaulted collateral. Other inputs include market indices and recently executed market transactions.

Separate Account Assets

     Separate account assets include mutual funds. Fair values are determined using quoted prices in active markets for identical assets, which are reflected in Level 1. Separate account assets also include money market instruments. Because of the highly liquid nature of these assets, carrying amounts may be used to approx imate fair values, which are reflected in Level 2.

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:          
 
  As of December 31, 2018
Assets/
  (liabilities)   Fair value hierarchy level
measured at
  fair value   Level 1   Level 2   Level 3  
Assets                
Fixed maturities, available-for-sale:                
U.S. government and agencies $              9,870.7 $          9,870.7 $               — $         —
States and political subdivisions 45,916.3   —   45,916.3     —
Corporate 91,169.9   —   91,169.9     —
Commercial mortgage-backed securities 11,220.0   —   11,220.0     —
Other debt obligations 1,998.7   —   1,998.7     —
Total fix ed maturities, available-for-sale 160,175.6   9,870.7   150,304.9     —
Separate account assets 172,374.3   166,317.6   6,056.7     —
Total assets $         332,549.9 $    176,188.3 $  156,361.6 $        —
 
  As of December 31, 2017
Assets/
  (liabilities)   Fair value hierarchy level    
measured at
  fair value   Level 1   Level 2   Level 3  
Assets                
Fixed maturities, available-for-sale:                
U.S. government and agencies $             9,970.3 $          9,970.3 $                   —  $        —
States and political subdivisions 36,097.5   —   36,097.5     —
Corporate 83,109.8   —   83,109.8     —
Commercial mortgage-backed securities 8,263.7   —   8,263.7     —
Total fix ed maturities, available-for-sale 137,441.3   9,970.3   127,471.0     —
Separate account assets 159,393.9   159,393.9   —     —
Total assets $         296,835.2 $      169,364.2 $        127,471.0  $        —

 

 

Principal National Life Insurance Company
Notes to Financial Statements – (continued)
December 31, 2018
(in thousands)

Transfers

Transfers of assets measured at fair value on a recurring basis between fair value hierarchy levels were as follows:

            For the year ended December 31, 2018      
    Transfers out   Transfers out   Transfers out   Transfers out   Transfers out   Transfers out
    of Lev el 1 into   of Lev el 1 into   of Lev el 2 into of Level 2 into of Level 3 into   of Lev el 3 into
    Lev el 2   Lev el 3   Lev el 1   Level 3   Level 1   Lev el 2
 
Assets                        
Separate account assets $ 5,723.4 $ — $ — $ — $ — $ —

 

Transfers between fair value hierarchy levels are recognized at the beginning of the reporting period.

     Separate account assets transferred from Level 1 to Level 2 during 2018, primarily included money market instruments as a result of additional analysis to clarify the source of the price.

We did not have any transfers between fair value hierarchy levels during 2017.

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, 2018    
            Fair v alue hierarchy level  
    Carrying amount   Fair v alue   Lev el 1 Lev el 2 Lev el 3
Assets                
Policy loans $ 23,910.0 $ 27,651.5 $ — $ — $ 27,651.5
Cash and cash equivalents   37,520.5   37,520.5   37,520.5 — —
 
            December 31, 2017    
            Fair v alue hierarchy level  
    Carrying amount   Fair v alue   Lev el 1 Lev el 2 Lev el 3
Assets                
Policy loans $ 17,629.3 $ 21,015.5 $ — $ — $ 21,015.5
Cash and cash equivalents   13,245.1   13,245.1   13,245.1 — —

 

9. Statutory Insurance Financial Information

     We prepare statutory financial statements in accordance with the accounting practices prescribed or permitted by the Insurance Division of the Department of Commerce 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.

     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, 2018, we met the minimum RBC requirements.

 

Principal National Life Insurance Company Notes to Financial Statements – (continued) December 31, 2018 (in thousands)

Statutory net loss and statutory capital and surplus were as follows:

  As of or for the year ended December 31,  
  2018   2017   2016  
 
Statutory net loss $       (3,576.8)   $         (3,899.1)   $     (4,414.0)
Statutory capital and surplus 205,183.3   148,871.5   127,875.9  
 
10. Subsequent Event            

 

     We have evaluated subsequent events through April 4, 2019, which was the date our financial statements were issued. On February 28, 2019, we received a $6,250.0 capital contribution from our parent, PFS.