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Principal Gets Regulatory Approval, Moves Ahead On Demutualization

September 09, 2001 at 08:00 PM
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Principal Gets Regulatory Approval, Moves Ahead On Demutualization

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Principal Mutual Holding Company, Des Moines, Iowa, has received state regulatory approval from Iowa for its demutualization plan. The company filed the plan with the Iowa Insurance Commission in March. Principals policyholders approved the plan in July.

The demutualization plan "complies with all provisions of law, is fair and equitable to the company and its eligible policyholders, and the reorganized company will have the amount of capital and surplus deemed by the Commissioner to be reasonably necessary for its future solvency," Iowa Insurance Commisioner Terri Vaughan says in an explanation accompanying the approval order.

Under the plan, Principal Financial would compensate the Principal Mutual policyholders for their loss of policy-based ownership by giving them 261 million shares of stock and $1.3 billion in cash and policy credits.

Principal Financial said it has filed a preliminary prospectus with the Securities and Exchange Commission in connection with the initial public offering of Principal Financial Group Inc. common stock.

Principal said the IPO is expected to occur in the next 60 days and will consist of 100 million common-stock shares selling between $18.50 and $20.50.

In addition to Principal, Prudential Insurance Company of America, Newark, N.J., is in the process of converting into a public company.

Reproduced from National Underwriter Life & Health/Financial Services Edition, September 10, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

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