The Principal Financial Group Announces New Direct Connect Service for Health Savings Accounts; New Service Offers Simplified Way to Administer Health Savings Accounts

Business Wire, May 10, 2006

DES MOINES, Iowa -- Beginning in May, the Principal Financial Group(R), will offer a landmark employer health savings account (HSA) service. Leveraging the same technology that The Principal(R) uses to simplify 401(k) transactions, the Principal Direct Connect Health Savings Accounts service will make it easier for employers to administer employee HSAs.

"We are excited to introduce this new robust platform to our customers," said Barrie Christman, president and chief executive officer of Principal Bank. "This web-based service allows employers to electronically make contributions and transfer funds into employee HSAs, automating the entire process. The development of this system represents the commitment of The Principal to the HSA marketplace, and more importantly, to being easy to do business with."

The implementation of the Principal Direct Connect Health Savings Accounts service eliminates the need for employers to send paper forms or checks to Principal Bank for HSA contributions, reducing the time and paperwork associated with administering HSAs. This new service will save employers time while also allowing employers to:

--Forward HSA contributions deducted from employee's payroll electronically to Principal Bank using the Automated Clearing House (ACH).

--Pay fees and make contributions to Principal Bank for health savings account participants.

--Move money, through automation, into each participant's checking account with Principal Bank.

--Review HSA News for additional information and updates through the alerts provided on the employer page.

"The development of this employer tool is one more example of our commitment to transforming healthcare through health savings accounts and flexible benefit designs that encourage employee participation," said Jerry Ripperger, director for consumer health for the Principal Financial Group. "For years The Principal has been helping employers manage retirement accounts with this same technology. It's natural then for us to provide the same capabilities for our health plans. Having investment management, health care and banking expertise under one roof gives us the ability to help our employers get the most out of their benefit dollars."

The Principal began offering HSAs with high deductible health plans (HDHPs) in September 2004. The Principal HSA is available to anyone who has a qualified HDHP either through The Principal or through another insurance provider.

The Principal continues to look at new ways to educate consumers about health savings accounts including a recent HSA calculator that allows individuals to estimate potential savings. This calculator and additional resources are available at: http://www.principal.com/bank/products/hsa/index.htm.> About Principal Bank

Established in 1998, Principal Bank was one of the first direct banks approved and chartered by the Office of Thrift Supervision as a federal savings bank and has experienced rapid growth to $1.265 billion in assets as of December 31, 2005. Principal Bank is a member of the Principal Financial Group.

About the Principal Financial Group

The Principal Financial Group(R) (The Principal (R))(1) is a leader in offering businesses, individuals and institutional clients a wide range of financial products and services, including retirement and investment services, life and health insurance, and banking through its diverse family of financial services companies and national network of financial professionals. A member of the Fortune 500, the Principal Financial Group has $205.3 billion in assets under management(2) and serves some 16.0 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG. For more information, visit www.principal.com.

(1) "The Principal Financial Group" and "The Principal" are registered service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.

(2) As of March 31, 2006.