DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT is made this _____ day of March 2011, between
Principal Life Insurance Company (“Principal”), a life insurance company organized under the laws of
the State of Iowa, and Princor Financial Services Corporation (“Princor”), an affiliate of Principal
organized under the laws of the State of Iowa.
WITNESSETH
WHEREAS, Principal has established Separate Account B (“Separate Account”) and
registered such Separate Account as an investment company under the Investment Company Act of
1940 to fund variable annuity contracts issued by Principal Life Insurance Company;
WHEREAS, Princor is registered with the Securities and Exchange Commission as a broker-
dealer under the Securities Exchange Act of 1934 and is a member of the Financial Industry
Regulatory “FINRA”; and
WHEREAS, Principal desires to issue certain Principal Lifetime Income Solutions SM contracts
(“Contracts”) with respect to the Separate Account which will be sold and distributed by and through
Princor, and Princor is willing to sell and distribute such Contracts under the terms and conditions
stated herein;
NOW, THEREFORE, the parties agree as follows:
1. Principal hereby appoints Princor as the principal underwriter of the Contracts issued with
respect to the Separate Account, and Princor agrees to use its best efforts to sell and distribute the
Contracts through its registered representatives or through other broker-dealers registered under the
Securities and Exchange Act of 1934 whose registered representatives are authorized by applicable
law to sell variable annuity contracts.
2. All payments and other monies payable upon the sale, distribution, renewal or other
transaction involving the Contracts shall be the property of and be paid or remitted directly to
Principal, who shall retain all such payments and monies for its own account except to the extent such
payments and monies are allocated to the Separate Account. Princor shall not be deemed to have
any interest in such payments.
3 . For the administrative convenience of the parties, Principal shall
(a) pay to the registered representatives of Princor the commissions earned on the sale,
distribution, renewal or other transaction involving the Contracts as determined in the
attached Commission Schedule, and provide Princor with accurate records of all such
commissions paid on its behalf; and
(b) pay to broker-dealers with whom Princor has entered into a Selling Agreement for the
distribution of the Contracts any applicable dealer allowance or other compensation as
provided in such Selling Agreement, and provide Princor with accurate records of all
such payments paid on its behalf.
4 . Principal shall pay to Princor an amount equal to the expenses incurred by Princor in the
performance of this Agreement. Princor shall provide a statement of expenses to Principal at least
semi-annually in a form and manner agreed to by the parties.
5. Princor shall be solely responsible for the supervision and control of the conduct and
activities of its registered representatives with regard to the sale and distribution of the Contracts.
6. Principal shall assume the responsibility, including the costs thereof, for all administrative
and legal functions pertaining to the Contracts not otherwise specifically assumed by Princor in this
agreement, including but not limited to the following: the preparation, printing and filing of
prospectuses; the development, filing and compliance with federal and state securities laws and
regulations of the Separate Account; contract development; SEC registration; filing and compliance
with state insurance laws and regulations; underwriting; contract issue and contractowner service
functions; developing sales and promotional material; and training agents.
7. Principal will prepare and maintain all the books and records in connection with the offer
and sales of variable annuity contracts which are required to be maintained and preserved in
accordance with applicable securities law; and all such books and records are to be maintained and
held by Principal on behalf of and as agent for the broker-dealer whose property they are and shall
remain; and all such books and records will be made available for inspection by the Securities and
Exchange Commission at all times.
8. Principal shall send to each contractowner or such other person as appropriate a
confirmation as required by law or regulation of any transaction made with respect to the Contracts
which shall reflect the true facts of the transaction and show that confirmation of the transaction is
being sent on behalf of the broker-dealer.
9. Princor and Principal may enter into agreement with other broker-dealers duly licensed
under applicable federal and states laws and with their affiliated general agencies, if any, for the sale
and distribution of the Contracts. The commission payable to registered representatives on the sale
of Contracts there under may not exceed the amount shown on the attached Commission Schedule.
10. Anti-Money Laundering and Know Your Customer Compliance: The parties acknowledge
that they are financial institutions subject to the USA Patriot Act of 2001 and the Bank Secrecy Act
(collectively, the “AML Acts”), which require, among other things, that financial institutions adopt
compliance programs to guard against money laundering. Princor further acknowledges that they are
in compliance and will continue to comply with the AML Acts and the applicable rules, regulations of
the SEC, FINRA, or any other self-regulatory organizations, as they now exist and as they may be
amended in the future. Princor represents and warrants that, in compliance with applicable laws,
regulations and rules, (i) it has adopted a customer identification program consistent with the
applicable rules and further covenants and agrees that it will verify the identity of each of its
customers who purchases a Contract through Princor's Registered Representatives and provide for
screening all new and existing customers against the Office of Foreign Asset Control list and any
other government list that is or becomes required under the law, (ii) it will provide ongoing employee
training, (iii) it will adopt all necessary internal policies, procedures and controls to insure compliance
with the AML Acts, and all applicable rules, regulations and regulatory guidance, and (iv) the AML
program will be audited as required and steps will be taken to address any deficiencies identified.
Princor and Principal hereto further acknowledges that it has a current 314(b) notice on file with
FinCEN in accordance with section 314(b) of the USA Patriot Act and agrees to refile such notice
annually (or as otherwise required to remain current in accordance with applicable regulations) during
the term of this Agreement.
11. Princor shall use commercially reasonable efforts to inform and train its Registered
Representatives on compliance with the prospectus delivery requirements under the 1933 Act. In
addition, Princor shall use commercially reasonable efforts to train and instruct its Registered
Representatives to not make recommendations to an applicant to purchase a Contract in the absence
of reasonable grounds to believe that the purchase is suitable for such applicant, in accordance with
the suitability requirements of the 1934 Act and FINRA Conduct Rule 2310 as the same may be
amended or interpreted from time to time. Princor shall use commercially reasonable efforts to
determine that each transaction is completed with a Registered Representatives report indicating
suitability, including any required and necessary customer information, and is subjected to a review
process in compliance with FINRA Conduct Rule 3010, as the same may be amended or interpreted
from time to time. Each application shall be approved by one of the Princor's Registered Principals, in
accordance with all applicable FINRA rules.
Princor shall ensure that its Registered Representatives shall not make recommendations to purchase
a Contract except in accordance with the suitability and disclosure requirements set forth in any state
insurance law or regulation governing the offer and sale of Contracts, including any state law or
regulation governing sales to the public in general (e.g. consumer protection laws or regulations,
unfair trade practices, annuity disclosure regulations) or to senior citizens.
12. Principal agrees to indemnify and hold Princor, its partners, controlling persons, officers,
directors, shareholders, members, affiliates, employees and agents harmless from and against any
and all losses, claims, damages, costs, liabilities or expenses (including reasonable attorney's fees
and expenses), to which Princor may become subject to in connection with Principal's performance
under this agreement.
13. This agreement may be terminated by either party upon 60 days prior written notice.
Princor shall promptly notify the Securities and Exchange Commission of any such termination.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed on
the day and year written above.
PRINCIPAL LIFE INSURANCE COMPANY
By:_____________________________________
Xxxxxxx Crew, Assistant Vice President -
Principal Life Insurance Company
PRINCOR FINANCIAL SERVICES
By:_____________________________________
Xxxxx Xxxxxx, Vice President and Chief
Compliance Officer- Princor Financial
Services Corporation
