S&P: Principal Life positive

Standard & Poor's said it revised its outlook on Principal Life Insurance Co. and Principal National Life Insurance Co. to positive from stable on the expectations that Principal Life's capital adequacy position as measured by its model, the firm's statutory earnings capacity over a two-year horizon and, to a lesser degree, the level of net cash maintained at the holding company would become sufficient to cover the capital deficit implied by its 2010 U.S. asset stress test.

At the same time, S&P said it affirmed its ratings on Principal Life.

"The outlook revision is based on its expectation that Principal Life's capital adequacy deficiency as measured by its 2010 U.S. asset stress test will diminish over the course of time," said S&P credit analyst Donald Chu.

The company's capital deficit as measured by its stress model is buoyed up by the group's solid competitive position and earnings profile, which has demonstrated notable strength and resiliency through the financial crisis, the very strong operating company liquidity and tight asset-liability management and the holding company cash position, according to the agency.

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