ANNUALREPORT

YEⒸ2022 SANRIO CO., LTD.
APPROVAL NO. L634418

EN

DED

MARC

20

A

R

22

2022

H

31

,

FUKOKU MUTUAL LIFE
INSURANCE COMPANY

Management Principles of Fukoku LifeManagement Philosophy
Fukoku Life will continue adhering to its original management
philosophy of protecting the interests of policyholders andcontributing to society. In addition, we will continue to help our
employees achieve personal fulfillment.
Protecting theinterests of ourpolicyholders

Contributing
to society

Helping our
employees
achievepersonal
fulﬁllment

ValuesCustomercentered
ValuesCustomer-centered Values
Applying customer-centered values means that all executives
and employees of Fukoku Mutual Life Insurance Company
consistently adopt customer perspectives while creating andrendering distinctive services and experiences that provide
our customers with a true sense of security.
We will continue to view customer-centered values as
the springhead for all of our most critical corporate activities.

Code of Conduct

Business Policies

Between Fukoku Life and
Its Customers

Further strengthen our management baseand provide our customers with stability
and security. Consistently apply customercentered values. Always act in an honorable andupright manner

Between Fukoku Life andthe Regions andCommunities It Serves. Continue to emphasize theimportance of life insurance. Facilitate the achievement of abrighter future

Between Fukoku Life and Its
Staff. Remain willing to act without
fear of failure. Respect each other and pursue
growth as a team

Fukoku Life will increase the size of its customer base andsecure a stable business foundation through enhancement of
its consulting capabilities while building a strong financial basethrough the establishment of a beneficial and self-perpetuating
cycle consisting of capital enhancement, appropriate
risk-taking, and improvement of returns.

Contribute to the realization of asustainable society as a mutual company
engaged in the life insurance businessA sustainable society is an essential cornerstone for thefulfillment of long-term promises associated with life
insurance. Together with its customers, its employees, and theregions and communities it serves, Fukoku Life remains
committed to facilitating the achievement of a sustainable
society.

Increase employee job satisfaction
through human resource development
based on customer-centered values

Fukoku Life is committed to enhancing the job satisfaction of
its employees by developing human resources capable ofapplying customer-centered values and establishingenvironments that encourage them to take on new challenges.

Contents
Message from the President������������������������������������������������������������������������������������ 2
Fukoku Life’s Value Creation Process������������������������������������������������������������������������ 4
Medium-term Management Plan (Fiscal 2022–2024)����������������������������������������������� 6
Management As a Mutual Company —Pursuing Ultra-Long-Term Sustainability—�� 8
Centenary Project —Our Centenary Project in Action!—����������������������������������������� 10
Review of Operations in Fiscal 2021
Business Performance������������������������������������������������������������������������������������������ 12
Financial Soundness and Profitability (Non-consolidated)������������������������������������� 14
Investment Performance (General Account)��������������������������������������������������������� 16
Investment Policies for Fiscal 2022���������������������������������������������������������������������� 17
ESG Investment and Financing��������������������������������������������������������������������������������� 18
Environmental Protection Initiatives�������������������������������������������������������������������������� 19
Contribution to Society��������������������������������������������������������������������������������������������� 20
Business Management System�������������������������������������������������������������������������������� 21
Non-consolidated Financial Statements�������������������������������������������������������������������� 22
Consolidated Financial Statements��������������������������������������������������������������������������� 46
Corporate Organization��������������������������������������������������������������������������������������������� 77
Corporate Information����������������������������������������������������������������������������������������������� 78

FUKOKU MUTUAL LIFE INSURANCE COMPANY

1

Message from the President

I would like to express my deepest sympathies to all thoseaffected by the COVID-19 pandemic.

COVID-19 Response
We are implementing timely and appropriate measures inaccordance with our basic policies of prioritizing the livesof customers and employees, and preventing the spread of
infection resulting from our business activities.
When selling insurance, we help prevent the spread of thepandemic through measures such as online consultations andthe use of electronic systems for the delivery of sales materials.
Furthermore, we are conducting sales activities that effectively
combine both digital and conventional methods, while continuing
to fulfill the needs of our customers during the pandemic.
In terms of customer service, we are striving to alleviate
customer concerns by providing detailed information, including
guidance regarding special initiatives related to COVID-19,
primarily through after-sales services performed by telephoneor mail.

The Past Year in Review
Despite the difficult environment stemming from the pandemic,
the amounts of new policies, together with annualized
premium income from new policies—for both Fukoku MutualLife Insurance Company and Fukokushinrai Life Insurance
Company—recovered to levels higher than in fiscal 2019 (April 1,
2019–March 31, 2020), prior to the pandemic. The premiumincome for the two companies increased 8.1% year on year

2

FUKOKU MUTUAL LIFE INSURANCE COMPANY

to ¥632.0 billion, marking a return to the prepandemic level.
With regard to asset management, interest, dividends andother income generated through Fukoku Mutual Life Insurance
Company reached a record high for the fourth consecutive year.
As a result, the total fundamental profit (the standard
measure of an insurance company’s profitability) for Fukoku
Mutual Life Insurance Company and Fukokushinrai Life
Insurance Company increased 1.7% year on year to ¥84.3
billion. Meanwhile, our consolidated solvency margin ratio, anindicator of soundness, remained high at 1,274.3%. Further,in accordance with the expectations of our policyholders,
we raised dividends for policyholders of individual insurance
policies, achieving a 10th consecutive year of dividend increasefor holders of such policies.
Life insurance involves a spirit of mutual assistance.
Policyholders comprise a group of people who are insured andwho help each other, in that insurance premiums received
from policyholders are provided as insurance payouts tocustomers who need them.
In fiscal 2021, along with Fukokushinrai Life, we paidout a total of ¥517.7 billion in insurance claims, annuities,
and benefits. We will continue to provide reliable payment of
insurance claims and other benefits.

Customer-Centered Values
Founded as a policyholder-oriented mutual company, we
strive to ensure that all of our ideas and actions are basedon customer-centered values. Accordingly, all executives
and employees consistently adopt customer perspectives inmanagement, when conducting business, as well as whencreating and providing services and experiences unique to the
Fukoku Mutual Life Insurance Company.
In line with customer-centered values, we meet the needsof our clients by providing comprehensive consulting services
regarding savings-related products and third-sector insurance
products, such as death protection and medical and long-termcare insurance.

internal reserves, which are funded by ordinary profits, andcombining these with funds raised through external financing
methods, which include the raising of foundation funds and theissue of subordinated bonds.
In fiscal 2021, we expanded our internal reserves by
increasing reserve funds such as our contingency reserve. We
plan to continue our efforts to improve our financial soundness
and provide our customers with security and peace of mind.

Medium-term Management Plan
Our objective of becoming the best, rather than the biggest,
is encoded in our DNA, and through our pursuit of targets
associated with our medium-term management plan (fiscal
2019–2021), we have been working to realize our vision of
attaining the highest possible level of customer acclaim throughthorough differentiation. Although our vision has only partly beenrealized, since the beginning of fiscal 2019 we have generated
positive results. These include an increase in customer
satisfaction as demonstrated by policyholder survey results.
To draw closer to our long-term management vision ofgenerating greater customer satisfaction than any other life
insurance company, the key themes of our new medium-term
management plan (fiscal 2022–2024) are laying the groundwork
for business transformation and adopting initiatives aimed at
resolving increasingly diverse social issues.
By promoting these themes, we will strive to build avirtuous cycle for sustainable growth that links improvement in
employee satisfaction with growth in customer satisfaction.

Centenary Project
As we approach 100 years in business in 2023, we are working
on our centenary project based on a concept called THE
MUTUAL. This refers to the next generation of mutual aid
that will evolve over the coming century, as well as our aim tobecome an enterprise representing real mutual aid, by deepening
our connection to, and mutual support for, all our stakeholders.
In fiscal 2021, as part of THE MUTUAL Art for children, acollection of initiatives through which we help children connect
with their surrounding communities, we produced vegetablebased crayons featuring artwork from the Smile Gallery. At thegallery located in the second basement of our head office inUchisaiwaicho, Tokyo, art created by students attending special
needs schools throughout Japan is exhibited. Along with thesales division of our head office, our 33 branch offices locatedthroughout Japan have donated approximately 46,000 boxes of
the crayons to local nursery schools and other facilities.
We will continue to promote THE MUTUAL concept as
an expression of the next generation of mutual support, whileaiming to become a company that resonates with stakeholders
and all other related parties by the centennial anniversary of
our founding.

Financial Soundness
We must continue to ensure sound management to achievesustainable growth as social and economic environments
undergo major changes.
To maintain financial soundness regardless of theoperating environment, we are working to further strengthen
our capital. Our basic policy for doing so involves accumulating

Our Mission As a Mutual Company
We believe that our most important responsibility as an insurancecompany is to ensure the reliable payment of claims, no matter
when. At the same time, we see our mission as a mutualcompany as being to provide customers with reductions ininsurance premiums by striving to increase our dividend payouts.
To fulfill our responsibilities as an insurance company andour mission as a mutual company, we have focused primarily
on protecting the interests of our customers by pursuing anappropriate level of growth that will allow us to serve theseinterests. We believe that these moves will help customers
develop trust in us and feel secure. Life insurance is a covenantthat extends beyond a single lifetime to include subsequent
generations, making it a never-ending endeavor. In the spiritof mutual aid, we will fulfill the promises we have made to ourcustomers in perpetuity, while being close to customers.
We look forward to your continued support and cooperation.

Yoshiteru Yoneyama
President

FUKOKU MUTUAL LIFE INSURANCE COMPANY

3

Fukoku Life’s Value Creation Process
Sources of Value
Creation

Our founding spirit
Commitment to apolicyholder-oriented
approach
The only company
that has maintained
a mutual company
structure since its
founding
Motto (company mottoand company DNA)
Becoming the bestrather than biggest
Management
philosophy
Protecting the interestsof our policyholders
Contributing to society
Helping our employees
achieve personalfulfillment

ValuesCustomer-Centered
Value
Human resource
development
Spontaneity, creativity,
and altruism

4

FUKOKU MUTUAL LIFE INSURANCE COMPANYManagement BaseFinancial capital
Strong financial
base
Solvency margin
ratio: 1,234.2%*
Capital ratio:
13.31%*
Social capital
Stability andsecurity forcustomers
Number of policies
in force:
3,749,000*
Insurance claims,
annuities, andbenefits provided:¥343.4 billion**
Human capital
Human resources
who apply
customer-centeredvaluesNumber of sales
representatives:
10,083*
Number of
office-based
personnel: 2,904*
Intellectual capital
Distinctive,
quality-driven
management
Industry-leading
product
development
Dynamic asset
management thatdraws on uniqueperspectives

Management under a Mutual Company System:

Business Policies

Further strengthen our management baseand provide customers with stability andsecurity
Contribute to the realization of asustainable society as a mutual company
engaged in the life insurance businessLong-term Management Vision
Management
strategy

Target differentiation in
all business areas

Medium-term Management Plan
(Fiscal 2022–2024)
Initiatives targeting the resolution ofincreasingly diverse social issues

1. Strengthen capacity to provide self-help
consulting by integrating face-to-faceand digital approaches.
2. Bolster our ties with Generation Z,
which includes society’s future leaders.
3. Provide stability and security forworking women, senior citizens.
4. Promote Groupwide efforts to resolve
local issues.
5. Fulfill stakeholder expectations throughsustainability-oriented initiatives.

Further strengthen our management base* As of March 31, 2022** For the fiscal year ended March 31, 2022

Pursuing Ultra-Long-Term Sustainability

Value Created Jointly with
Stakeholders
Partnerships withstakeholders

Increase employee job satisfaction
through human resource development
based on customer-centered values

Customers

Be the top life insurance company in terms ofcustomer satisfaction

Community and Society

Building a virtuous cycle for sustainablegrowthPromote ESG investment andfinancing
Address climate change and otherenvironmental issues

Customersatisfaction
Improve product and service
quality, maintain financial
soundness, and enhance
dividend returns

Boost productivity
and profitability

Increase customer loyalty andgenerate a net increase incustomers

Heighten employee
motivation

Employees
Promote health management,
work style reforms

Achievement of Steadfast and Sustainable Societies

Sound management of our life
insurance business
Offer coverage through our life
insurance business

Address human rights anddiversity

Employeesatisfaction

FUKOKU MUTUAL LIFE INSURANCE COMPANY

5

Medium-term Management Plan (Fiscal 2022–2024)
Objectives
Our medium-term management plan targets improvement incustomer satisfaction rather than revenue or profit. We believethat further improving our management base by enhancing
the quality of our products and services, while improving
productivity and profitability, is an effective way of increasing
customer satisfaction.
Review of Previous PlanThrough our previous medium-term management plan (fiscal
2019–2021), we addressed the primary theme of building avirtuous cycle for sustainable growth, which achieves higher
customer satisfaction by improving employee satisfaction andimplementing initiatives targeting the achievement of our longterm management vision.
In terms of improving employee satisfaction, we received
more favorable responses to many questions included in our

surveys concerning staff attitudes. But employee satisfaction,
an indicator of progress, remained at about the same level that
had been observed when the plan was launched. With regard
to customer satisfaction, internal policyholder surveys indicatedan increase, but external surveys showed a slight decline in ourcustomer satisfaction ranking within the industry as a whole.
Concerning initiatives targeting the achievement of ourvision, we achieved more progress through some action plans
than we had initially anticipated, thanks to such COVID-19
countermeasures as the adoption of digital communication withcustomers.
Role of Plan in Management Philosophy
Our Medium-term Management Plan outlines initiatives wewill implement over the next three years, as we aim to draw
closer to our long-term management vision of being the top life
insurance company in terms of customer satisfaction.

Management Philosophy
Protecting
the interestsof ourpolicyholders

ValuesContributing
to society

Helping our
employees
achievepersonal
fulfillment

Customercentered
ValuesCustomer-centered Values

Applying customer-centered values means that all
executives and employees of Fukoku Mutual Life Insurance
Company consistently adopt customer perspectives while
creating and rendering distinctive services and experiencesthat provide our customers with a true sense of security.

Business Policies
Management Philosophy and Values■ Further strengthen our management base and provide
our customers with stability and security■ Contribute to the realization of a sustainable society as amutual company engaged in the life insurance businessBusiness Policies■ Increase employee job satisfaction through humanresource development based on customer-centered values

Long-term Management Vision
Long-term Management Vision

Be the top life insurance company in terms ofcustomer satisfaction

Management Strategy
Internal Management Policy
Medium-term Management Plan
Category-specific Strategies

6

FUKOKU MUTUAL LIFE INSURANCE COMPANYManagement Strategy
Target differentiation in all business areas

Overview of Current Plan
Our medium-term management plan will focus on two priorities:
setting up a solid foundation for business transformation, andresolving increasingly diverse social issues. Through relatedLong-term Management Vision

Be the top life insurance company in terms of customer satisfaction
Medium-term Management Plan (Fiscal 2022–2024)

Management
Strategy

Themes for priority initiatives
I. Develop solid foundation forbusiness transformation

Target differentiation in
all business areas

Internal
Management
Policyefforts, we will aim to achieve a perpetual, positive cycle ofsustainable growth. As we pursue our vision, we hope to set inmotion a cycle through which growth in employee satisfaction
generates improvement in customer satisfaction.

III. Building a virtuous cycle for sustainablegrowth

1. Reform sales representative system to generatehigher customer satisfaction
2. Optimize agency channels associated with the Group
3. Improve efficiency of business expense and optimize
investment in systems
4. Put in place mechanisms to raise awareness of aneed for change

II. Initiatives targeting the resolutionof increasingly diverse social issues

CategoryspecificStrategies

Customersatisfaction
Improve product and service
quality, maintain financial
soundness, and enhance
dividend returns

Increase customer loyalty andgenerate a net increase incustomers

Boost productivity
and profitability

Heighten employee
motivation

1. Strengthen capacity to provide self-help consulting
by integrating face-to-face and digital approaches
2. Bolster our ties with Generation Z, which includes
society’s future leaders
3. Provide stability and security for working women,
senior citizens
4. Promote Groupwide efforts to resolve local issues
5. Fulfill stakeholder expectations throughsustainability-oriented initiatives

Employeesatisfaction

Indicators of Progress in Setting Up a Virtuous Cycle for Sustainable Growth
Indicator One: Customer Satisfaction*

Indicator Two: Plan to Recommend Coverage to
Others*

19.8％
11.7％

11.0％

13.0％

29.5％

37.4％

Previous plan period
FY2018FY2019FY2020Start of ourprevious planPrevious plan period

32.0％

3.62

3.62

3.63

FY2021FY2018FY2019FY2020Start of ourcurrent plan

Start of ourprevious plan

29.2％

3.63

Previous plan period

FY2021FY2018Start of ourcurrent plan

Start of ourprevious plan

* Percentage of customers who responded “verysatisfied” (the highest level of satisfaction out ofa total of seven options) to the question, “Howsatisfied are you with Fukoku Life overall?” in ourpolicyholder survey

Indicator Three: Employee Satisfaction*

FY2019FY2020* Percentage of customers who answered “yes, I
would strongly recommend” or “yes, I would
recommend” (the top two choices out of a totalof seven) in response to the policyholder survey
question “Would you recommend insurance from
Fukoku Life to others?”

FY2021
Start of ourcurrent plan

* Average point total generated by responses to thequestion “Are you satisfied with your work at Fukoku MutualLife Insurance Company?” in our staff attitude survey. The
possible responses were “yes, very satisfied” (fivepoints), “somewhat satisfied” (four points), “neither satisfied
nor dissatisfied” (three points), “somewhat dissatisfied” (twopoints), and “not at all satisfied” (one point).

Framework for Plan’s Implementation
Medium-term Management Plan Promotion Team

Board of Directors (full-time)

We have formed a cross-departmental project team that, under the leadershipof the general manager of the Priority Theme Administration Division, will
ensure the effective implementation PDCA cycles when managing initiatives
associated with these priority themes.

Director responsible for the plan

Divisions at our headquarters

Board of Directors

Medium-term management plan promotion team
Executive office
Divisions at our headquarters, 62 branch offices in Japan, and all employees

We will implement the action plans established for each department.

Sixty-two branch offices in Japan (Branch Office Medium-termManagement Plan Committee)
Through monthly meetings of the Branch Office Medium-term Management
Plan Committee, we will seek to enhance the quality of our services by attaining
improved customer-centered indicators.

FUKOKU MUTUAL LIFE INSURANCE COMPANY

7

Management As a Mutual Company —Pursuing Ultra-Long-Term Sustainability—
Approach to Sustainability
Fukoku Life is the only company in Japan that has maintained amutual company structure since its establishment.
Based on a desire to build a policyholder-oriented company,
Yoshiteru Yoshida, the second president and effectively thefounder of Fukoku Life, insisted on that structure. He wascommitted to the idea in the belief that the ethos underlying
insurance is based on mutual support provided by policyholders
who form insurance organizations and help each other.
He viewed mutual companies as policyholder-centeredorganizations, born from a spirit of mutual support.
Our life insurance business, which has a highly public
nature and is closely connected to people’s lives, is predicatedon ultra-long-term sustainability. We believe a mutual company
structure is optimal for life insurance companies, since it
involves no shareholders and allows such levels of growth to besought as will best benefit and protect customers.
Life insurance business, which involves lifelong andmultigenerational commitment to our customers, is a neverending endeavor. To ensure that we can fulfill our obligations
in perpetuity, we must achieve sustainable growth and ensureongoing viability.
Sustainable society being a necessary prerequisite forachieving our goals, we view corporate activities aimed atattaining such a society as indispensable. Accordingly, we strive
to help secure a sustainable society through each of our mutual
support-based corporate activities.

Yoshiteru Yoshida, Fukoku Life’s second
president

The Company’s banner at the time of its establishment. To indicate thecompany’s status as a mutual organization, a Japanese character meaning
mutual was embroidered in the center of the banner.

In 1968, we began donating to the Children’s Cancer Association of Japan, inorder to facilitate more effective treatment for pediatric cancer. By 1983, we
had donated ¥1.0 billion.

8

FUKOKU MUTUAL LIFE INSURANCE COMPANY

In 2021, we donated boxes of THE MUTUAL Oyasai Crayons* (vegetablebased crayons) to nursery schools and other facilities nationwide.
* F or more information about Oyasai Crayons, please see the section“Centenary Project” on pages 10 and 11 of this report.

Relationship between Fukoku Life and Its Stakeholders

Corporate activities in the spirit of mutual aid● Protect policyholder interests
・Offer coverage through our insurance business・Board of Representative Members of
Policyholders
・Initiatives to reflect the voice of customers in
our management (Conferences of Policyholders)Customers
Contributing to society ●・Environmental protection
・Initiatives through asset management(ESG investment)
・Stewardship activities● Personal fulfillment

CommunityandSociety

・Promote health management
initiatives and work style reform
・Address human rights and diversity
・Provide opportunities for
employees’ self-actualization

Fukoku Mutual Life
Insurance Company

Employees

Priority Initiatives
We have established seven priority initiatives, based on factors such as congruity with our business operations
and potential impact on stakeholders.

Initiatives

Customers

1. S
 ound management of our life
insurance business.
2. Offer coverage through our life
insurance business.

CommunityandSociety

3. Promote ESG investment and financing.
4. Address climate change and otherenvironmental issues.

Employees

5. P romote health management, work
style reforms.
6. Address human right and diversity.

Relevant SDGs

7. Partnerships
withstakeholders

FUKOKU MUTUAL LIFE INSURANCE COMPANY

9

Centenary Project —Our Centenary Project in Action!—

Next generation of mutual aid
Fukoku Life will celebrate its 100th anniversary in November 2023 and accordingly is pushing forward with a centenary project, based on theconcept of THE MUTUAL, which embodies the Company’s aspirations as it approaches the conclusion of its first century of existence.
THE MUTUAL refers to the next generation of mutual aid that is expected to evolve over the coming century, as well as our aim tobecome an enterprise representing true mutual aid by deepening our connection to, and support for, all our stakeholders.
Through our centenary project, we hope to ensure that we share an affinity with a greatly expanded circle of individuals andorganizations by conveying the message of mutual aid associated with THE MUTUAL. These efforts will support our goal of becoming acompany that can empathize with all of its stakeholders.

Founding

Launch of Centenary Project

The Company was founded as a mutualcompany, based on the idea that the only
path ahead for the insurance business lay incustomer-centered values
It is the only company that has maintained amutual company structure since its founding

Our centenary project aims to reaffirm
our philosophy and ideas as we approachthe conclusion of our first 100 years
The actor Takumi Saitoh was selected tobe the ambassador for THE MUTUAL

2018
The 95th
Anniversary

1923
Founding

2019
The 96th
Anniversary

Find the MUTUAL
As we collaborate with our 62 branch offices nationwide, we are implementing a program called
FIND THE MUTUAL. This involves considering and exploring what the next generation of mutual aid
might be, as we turn our attention to connections between people and the ideas they generate. To
date, we have publicly disclosed corresponding initiatives implemented by 19 of our branch offices.
The Oita Branch Office participates in the Cervical Cancer
Prevention awareness project, Hellosmile, at the Sanrio
character park, Harmonyland, in Oita Prefecture. We continue
to inform women regarding the importance of cancer screening
in the hope of encouraging them to pay close attention to theirbodies and stay healthy.

Located in the city of Ogaki, Gifu Prefecture, Ohashi Ryoki Ltd.
is Japan’s largest producer of masu (square wooden boxes
traditionally used to measure rice). We are currently conducting
initiatives aimed at creating connections between local
communities and ourselves through manufacturing.

Note: Protective masks were worn, and removed only when photographs were taken.

10

FUKOKU MUTUAL LIFE INSURANCE COMPANY

Primary Initiatives in 2021
We launched THE MUTUAL Centenary Project to foster opportunities to contemplate thefuture of mutual aid together with a wide range of individuals. To facilitate this goal, we haverevamped our special centenary website.
Under the banner of encouraging deep thought concerning the future of mutual aid, we
will thoroughly ponder THE MUTUAL as a concept, and aim to communicate our thoughts to awide range of people primarily through this special centenary website.
To make it more accessible, the website has been relaunched featuring the familiar facesof both famous actor Takumi Saitoh and the Hello Kitty character, which serves as our brandmascot. The website offers a variety of content, and we invite you to have a look.

Special centenary website

100th Anniversary
Become an embodiment of THE MUTUAL as a concept
Evolve into a company that demonstrates empathy toward all people
associated with Fukoku Life2020
The 97th
Anniversary

2021
The 98th
Anniversary

2023
The 100th
Anniversary

The MUTUAL Art for children
THE MUTUAL Art for Children is a project that makes use of artwork displayed at our Smile Gallery,
which exhibits the art created by students at special-needs schools around Japan on the walls of theB2 floor of our head office building in Tokyo. Since fiscal 2020, we have used some of the art indesigns crafted to communicate the messages with which the students imbue their compositions.
Through the art associated with the project, we help connect children with society.
Driven by the hope that as many children as possible will experience the joy of drawing, we have donated approximately 46,000
vegetable-based crayons to nursery schools, preschools, and other local facilities through both our head office and 33 of our branch
offices. Our donations of the crayons, which are made primarily from the parts of vegetables destined for disposal, are just one of themany ways in which we help reduce food waste and facilitate the achievement of Sustainable Development Goals.

Art for children

Our first donation of vegetable-based
crayons

Our second donation of vegetable-based
crayons

A representative of the branch office inObihiro, Hokkaido, presents
vegetable-based crayons to children.

FUKOKU MUTUAL LIFE INSURANCE COMPANY

11

Review of Operations in Fiscal 2021
Business Performance
Note. C onsolidated: total for both Fukoku Mutual Life Insurance Company and Fukokushinrai Life Insurance Company;
non-consolidated: total for Fukoku Mutual Life Insurance Company

New Policies (Individual Insurance and Individual Annuities, Consolidated)
Annualized Premiums¥22.9 billion (¥13.5 billion, non-consolidated)
Annualized premiums for new policies increased 26.7% year on year, to¥22.9 billion and exceeding their pre-COVID-19 level in fiscal 2019.
▪ What are annualized premiums?
Annualized premiums are a indicator that demonstrates how much revenue a life
insurance company earns from its policies in one year. They are calculated byadjusting for differences in payment methods and payment periods among various
policies (monthly payments, yearly payments, single-premium payments, etc.)
and determining the average amount of premiums paid over the entire durations ofthese policies.

Policy Amounts(¥ billions)Individual insurance
Individual annuities
Fukokushinrai
Annualized premiums corresponding to medical benefits, living benefits, etc.

22.9

20.6

18.1
9.4

5.8
0.8

6.1
0.5

14.0

0.6

11.4

7.7
FY2019Individual insurance

12.8

Non-consolidated

6.2

7.2

FY2020

FY2021

Individual annuities¥1,780.5 billion (¥1,622.4 billion, non-consolidated)

13.5(¥ billions)
Fukokushinrai

1,780.5

Policy amounts for new policies rose 10.6% year on year, amounting to¥1,780.5 billion and exceeding their pre-COVID-19 level.

1,668.8

1,610.5

111.0
28.9

110.6
20.5

▪ What are policy amounts?
Policies amounts indicate the total monetary guarantees for which a life
insurance company is responsible.

1,528.8

1,479.3

1,600.1

FY2019FY2020

FY2021

158.0
22.3
Non-consolidated

1,622.4

Surrendered and Lapsed Policies (Individual Insurance and Individual Annuities, Consolidated)
Annualized Premiums¥13.2 billion (¥11.2 billion, non-consolidated)

Fukoku Life

2.72%

Surrendered and Lapsed Ratio (based on annualized premiums)

15.2

2.41 % (2.98 %, non-consolidated)

2.7

Annualized premiums for surrendered and lapsed policies grew 7.0% year
on year, to ¥13.2 billion. Meanwhile, the surrendered and lapsed ratio(based on corresponding annualized premiums) increased to 2.41% but
improved compared with its pre-COVID-19 level.
Annualized premiums for
surrendered and lapsed policies
Surrendered and lapsed policy ratio=(based on annualized premiums)
Policies in force at the beginningof the fiscal year

Policy Amounts¥1,172.3 billion (¥1,125.6 billion, non-consolidated)

FY2019

1.9

10.3

11.2

FY2020

FY2021

Fukokushinrai

Ratio

4.63%

56.1

FUKOKU MUTUAL LIFE INSURANCE COMPANY

2.41%(¥ billions)

Fukoku Life

4.34 % (4.55 %, non-consolidated)

12(¥ billions)

13.2

12.3

12.4

1,278.4

Policy amounts for surrendered
and lapsed policies
Surrendered and lapsed policy ratio=(based on amounts insured)
Policies in force at the beginningof the fiscal year

2.25%

2.0

Surrendered and Lapsed Ratio (based on amounts insured)
Policy amounts for surrendered and lapsed policies rose 9.9% year on
year, to ¥1,172.3 billion. Meanwhile, the surrendered and lapsed ratio(based on corresponding amounts insured) grew to 4.34% but improved
compared with its pre-COVID-19 level.

Ratio

Fukokushinrai

1,222.3

FY20193.91%
1,067.1
47.6

1,019.5
FY20204.34%
1,172.3
46.6

1,125.6

FY2021

Policies in Force (Individual Insurance and Individual Annuities, Consolidated)
Annualized Premiums(¥ billions)Individual insurance
Individual annuities
Fukokushinrai
Annualized premiums corresponding to medical benefits, living benefits, etc.

¥548.8 billion (¥373.1 billion, non-consolidated)
Annualized premiums for policies in force amounted to ¥548.8 billion,
remaining unchanged from their level at the end of FY2020. Medical
coverage and living benefits included in this amount have continued to
grow since the Company began disclosing statistics regarding thesebenefits in FY2003.

549.6

548.8

548.8

164.4

170.3

175.6

115.8

112.0

109.3

269.2

266.5

115.3
FY2019

Policy Amounts

Individual insurance¥26,816.6 billion (¥24,650.1 billion, non-consolidated)
Policy amounts in force declined 0.7% at fiscal year-end, to ¥26,816.6 billion.

Non-consolidated

263.8
116.2

373.1

117.3

FY2020

FY2021

Individual annuities(¥ billions)
Fukokushinrai

27,286.8

27,001.7

26,816.6

2,401.3
2,456.0

2,237.4
2,362.4

2,166.4
2,269.2

22,429.5

22,401.8

22,380.9

FY2019FY2020

FY2021

Non-consolidated

24,650.1

Corporate Insurance (Group Insurance and Group Annuities, Non-consolidated)
We provide comprehensive support to our corporate insurance customers by proposing various products and plans geared toward
corporations. Policy amounts in force for group insurance fell 1.1% compared with the end of FY2020, to ¥17,496.7 billion. Meanwhile,
policy amounts in force for group annuities increased 1.3% at fiscal year-end, to ¥2,289.8 billion.

Policy Amounts for Group Insurance
Fukoku Life

Fukokushinrai(¥ billions)

17,795.5

17,695.2

17,496.7

190.3

159.0

156.0

17,605.2

17,536.2

17,340.7

FY2019FY2020

FY2021

Policy Amounts for Group Annuities(Policy reserve)(¥ billions)

Fukoku Life

2,233.4

2,261.0

2,289.8

FY2019FY2020

FY2021FUKOKU MUTUAL LIFE INSURANCE COMPANY

13

Financial Soundness and Profitability (Non-consolidated)
Fundamental Profit¥85.8 billion

Fundamental Profit(¥ billions)

Fundamental profit rose to ¥85.8 billion, up 1.7% year on year.
▪ What is fundamental profit?
Fundamental profit is a indicator that demonstrates the periodic fundamental
profit or loss of a life insurance company. It includes impact from both
insurance-related income and expenses (insurance premiums, payment of
insurance claims, operating expenses, etc.) and investment income andexpenses (primarily interest, dividends, and other income). It is similar tooperating profit reported by general industrial companies and net operating profit
recorded by banks.
▪ What is expense gain/loss?
Expense gain/loss is the difference between projected operating expenditures
based on the expenditure rate assumed when calculating insurance premiums
and actual operating expense.
▪ What is mortality and morbidity gain/loss?
Mortality and morbidity gain/loss is the difference between projected paymentsof claims and benefits based on the insured event occurrence rate assumed
when calculating insurance premiums and actual payments of claims and benefits.
▪ What is interest gain/loss?
Interest gain/loss is the difference between projected investment income based oninterest rates assumed when calculating insurance premiums and actual investment
income.

97.4

91.2

83.4

84.3

85.8

FY2017FY2018FY2019FY2020

FY2021

Breakdown of Fundamental Profit(¥ billions)

FY2020 FY2021
Fundamental profit

84.3

85.8

Insurance-related profit/loss

47.2

37.4

Expense gains/losses(21.0)(23.0)

Mortality and morbidity gains/losses

68.3

60.4

Interest gains/losses

37.0

48.4

Solvency Margin Ratio
1,234.2%
The solvency margin ratio declined to 1,234.2%, down 27.4 percentage
points year on year. This ratio greatly exceeds the level of 200%, which is
widely considered to be a standard indicating financial soundness.
Solvency margin ratio =Total solvency margin
Solvency margin ratio(¥ billions)

Total amount of risk

1,290.8%

1,261.6%

1,189.7%

1,234.2%

1,081.2%

Total solvency margin# 100
Total amount of risk

▪ What is solvency margin ratio?
Life insurance companies maintain policy reserves primarily in preparation for
the future payment of claims. These policy reserves enable them to respondto predictable risks. However, unexpected events such as major disasters or
stock market crashes can occur at any time. Solvency margin ratio is an indicatorused by regulatory authorities that measures an insurance company’s ability torespond to unexpected risks.

1,475.6

1,550.1

1,537.8

1,847.2

1,917.8

272.9

260.5

238.2

292.8

310.7

FY2017FY2018FY2019FY2020

FY2021

Capital¥983.1 billion
The capital increased to ¥983.1 billion, up ¥36.5 billion year on year.
Our capital ratio (capital ÷ total assets) was 13.31%. The capital alone
accounted for 632.6% of the total solvency margin.
▪ What Is capital?
We place a great deal of importance on the portion of our total solvency margin
that constitutes capital base (excluding unrealized gains on securities and realestate, etc.). Accordingly, we routinely strive to strengthen our capital base,enhancing our internal reserves and obtaining financing from external sources.

14

FUKOKU MUTUAL LIFE INSURANCE COMPANY(¥ billions)Foundation funds, Accumulated foundation funds redeemed
Voluntary surplus reserve
Surbodinated obligation
Reserve for price fluctuation
Contingency reserve and additional policy reserve
Other
Capital ratio

13.22%

13.31%

946.6

983.1

304.8

335.2

172.7

176.6

191.9

241.9

241.9

89.3
128.0

91.4
128.0

93.3
128.0

FY2019FY2020

FY2021

12.63%

11.66%

12.20%

772.8

815.2

265.9

291.6

318.6

95.7

111.2

122.7

191.9

191.9

94.1
116.0

96.5
116.0

FY2017FY2018857.6

Real Net Assets¥1,887.1 billion

Real net assets

Real net assets decreased to ¥1,887.1 billion, down 3.2% year on year.
Meanwhile, our real net assets ratio (real net assets÷general accountassets) came to 25.9%.
▪ What are real net assets?
In addition to solvency margin ratio, real net assets is an indicator used bysupervisory authorities to measure the financial soundness of life insurancecompanies. It is calculated by subtracting liabilities (excluding liabilities withhighly capitalistic characteristics, such as reserve for price fluctuation andcontingency reserve) from the current market value of total assets. Negative real
net assets values sometimes lead to judgments of effective insolvency, as wellas business-suspension orders and other restrictions.

25.8%(¥ billions)

Real net assets ratio

26.9%

27.6%
25.9%

25.5%

1,690.3

1,779.5

1,709.4

FY2017FY2018FY20191,949.2

1,887.1

FY2020

FY2021

Unrealized Gains on Securities and Real Estate¥897.1 billion(¥ billions)

Unrealized gains on securities and real estate decreased to ¥897.1 billion,
down ¥106.8 billion year on year. Unrealized gains on securities decreased
to ¥749.8 billion, down ¥106.0 billion, and unrealized gains on real estate
decreased to ¥147.3 billion, down ¥0.8 billion year on year, respectively.
▪ What are unrealized gains/losses?
Unrealized gains/losses are calculated by subtracting the book values of assets fromtheir corresponding market values. A positive value indicates an unrealized gain,
while a negative value indicates an unrealized loss.

As of March As of March
31, 2021
31, 2022
Securities

855.8

749.8

Domestic bonds

283.0

195.0

Domestic stocks

370.2

351.9

Foreign secutities

171.2

173.1

148.1

147.3

1,004.0

897.1

Real estate(land, leasehold right)
Total

Ratings
To help our customers objectively determine how capable we are of paying claims, Fukoku Life obtain ratings from three neutral andunbiased rating organizations. Our current ratings can be found below.
▪ What are life insurance company ratings?
Ratings of life insurance companies are determined by independent third-party rating agencies and demonstrate the degree of reliability at whichlife insurance companies are capable of paying insurance claims and benefits in accordance with policies (insurance claims paying ability).
Rating and Investment Information, Inc.
(Insurance Claims Paying Ability)

S&P Global Ratings(Insurer Financial Strength Rating)AA-

A

Very high claims paying ability
supported by some excellent factors.

The Company has a high capacity for fulfilling its
insurance policy obligations, but is slightly too
susceptible to potential impact from businessenvironment deterioration to achieve either of ourhighest two ratings (AAA and AA).

AAA

AA

A

BBB

BB

Moody’s(Insurance Financial Strength Rating)

A2

B

The Company is in the upper-middle
range of rated organizations and has
low credit risk.

CCC

CC

C

Notes:
1. The ratings indicated are current as of July 1, 2022.
2. T he ratings indicated were provided upon request from the Company by Rating and Investment Information, Inc., S&P Global Ratings, and Moody’s InvestorsService.
3. T he ratings indicated are the opinions of their respective rating agencies and do not indicate guarantees regarding the payment of insurance claims. These ratings
are also continuously monitored by their respective agencies and are subject to change.
4. Rating and Investment Information, Inc., S&P Global Ratings, and Moody’s Investors Service are credit rating agencies as defined in Japan’s Financial Instruments
and Exchange Act.

FUKOKU MUTUAL LIFE INSURANCE COMPANY

15

Investment Performance (General Account)
Overview Result
In fiscal 2021, driven primarily by economic performance in the
United States, the global economy continued to recover fromprevious downturns caused by the COVID-19 pandemic. At thesame time, inflation intensified due to soaring commodity prices
and supply chain disruption by the escalating situation in the
Ukraine and supply constraints stemming from factors such as
logistical disruptions caused by sharp recovery in demand.
Incurring ongoing impact from fiscal spending launchedduring fiscal 2020 as a means of combatting the COVID-19
pandemic, the economy in the United States began to achievestrong growth toward the end of 2021 thanks in part to efforts
commenced in late 2021 in pursuit of recovery in inventory
levels. The European economy was generally strong as
progressive vaccination reduced death tolls and performance inthe service sector picked up following the easing of restrictions
implemented in response to the pandemic. In the second half offiscal 2021, the pace of growth in the Chinese economy slowed
down as strict lockdown implemented to sustain the nation’s
zero-COVID policy slowed consumer spending and issues
associated with real estate debt weighed down construction
demand. The Japanese economy continued to pick up thanks
to an increase in exports fueled by solid overseas demand andgrowth in capital expenditure, particularly in the manufacturingsector. However, recovery was limited in part because theglobal shortage of semiconductors and supply chain disruption
adversely affected production of manufacturing industry suchas automobile; in part because states of emergency and semiemergency measures declared and implemented in responseto the pandemic remained in effect during most of the year,
and in part due to ongoing sluggishness in terms of personal
consumption.
The Federal Reserve Board (FRB) and central banks in
Europe have begun to tighten their monetary policies as inflation
intensifies throughout the world. The European Central Bank
(ECB) has indicated that it will begin gradually slowing down
the pace of asset purchase plan in October and maintains that
it will raise interest rates only after it has completed its asset
purchase plan. Upon discontinuing its quantitative easing policy
in March, the FRB raised interest rates by 0.25% and has
indicated that it intends to continue raising them going forward.
In contrast, under its ongoing yield curve control policy, theBank of Japan (BOJ) has clearly stated that it will contain to riseinterest rates by capping the 10-year JGB yield at around 0%(allowing movement of 25 basis points on either size of zero) as
it continues to maintain its strategy of monetary easing.

To maintain stable profitability in spite of low interest rateenvironment persists, we accumulated foreign stocks and foreigncurrency denominated corporate bonds with strong risk-adjusted
return, in accordance with our policy to take more investment risk
based on our ample capital. Additionally, we allocated cash onhand into super-long JGBs to increase investment income, which
are stable investments and highly liquid. Meanwhile, we strived
to maintain risks associated with FX and stocks at appropriate
levels by utilizing derivative transactions.
Along with these measures, we also conducted efforts
aimed at executing our Management Philosophy of contributing
to society through asset management while performing ourfiduciary duty of ensuring profitability. In terms of specificinitiatives, we invested in bonds that support climate change
measures in developing countries and corporate bond fund thatengages with issuers in “purpose-driven dialogue” aimed at
encouraging issuers to make improvements in accordance with
Sustainable Development Goals (SDGs). In addition to theseprojects, we actively engaged in ESG investment and financing
to support the achievement of a sustainable society.
Through our stewardship activities, we sharedrecommendations for improving corporate value and facilitating
sustainable growth through constructive “purpose-driven
dialogue” rooted in a deep understanding of both the companies
in which we invest and their business environments, as well as
careful consideration of factors related to medium- to long-termsustainability (ESG-related factors, etc.).
Additionally, to further differentiate our asset management
activities, we strove to enhance our investment diversification
on a global scale by diversifying the asset classes managed by
our asset management subsidiaries in London, New York, andSingapore and by strengthening our relationships with threeoverseas asset management companies with which we havebusiness relationships regarding the asset management ofregions and asset classes that we deemed were not sufficiently
covered by our corporate group. By acquiring asset management
expertise through methods such as dispatching trainees tothese asset management companies and regularly exchanging
investment ideas, we are endeavoring to enhance our asset
management capabilities and develop globally minded personnel
capable of adopting more sophisticated approaches to asset
management.
Investment income increased ¥0.6 billion (0.3%) year on
year to ¥187.9 billion. As interest, dividends and other income
reached a record high for the fourth consecutive year, mainly
due to increased dividends from domestic/foreign equities andmutual funds, while a decrease in gains on sales of securities
mainly from domestic stocks.

General account assets

Breakdown of general account assets (as of March 31, 2022)(¥ billions)(¥ billions)

6,544.2

6,612.9

6,706.2

7,052.9

7,276.8

Others 80.2 (1.1%)
Loans
553.3
(7.6%)

Real estate 241.1 (3.3%)
Cash and deposits, and others*
228.6 (3.2%)

Industrial andconsumer loans 504.6 (6.9%)
Policy loans 48.6 (0.7%)

Securities
6,173.5 (84.8%)

Other securities 184.1 (2.5%)
Foreign securities 2,335.9 (32.1%)

Domestic bonds 2,884.4(39.6%)

Domestic stocks 768.9 (10.6%)
FY2017

'18

'19

'20

'21

Total: ¥ 7,276.8 billion* This total includes cash and deposits, call loans, monetary claims bought and money held in trust.

16

FUKOKU MUTUAL LIFE INSURANCE COMPANY

Foreign Securities
Foreign securities amounted to ¥2,335.9 billion, up ¥207.9 billion(9.8%) year on year. This was due primarily to our accumulationof foreign stocks with stable dividend yield and corporate bonds
issued by the companies mainly in the US and Europe, withrelatively attractive yield.

Investment expenses decreased ¥6.1 billion (12.4%) year
on year to ¥43.3 billion. This decline occurred primarily because,
foreign exchange losses which is accounted in the previous
fiscal year turned to foreign exchange gain in this fiscal year thatwere mainly due to weak yen, while an increase in losses onsales of securities, mainly domestic bonds.
Consequently, net investment income amounted to ¥144.6
billion, up ¥6.7 billion (4.9%) year on year.

Industrial and Consumer Loans
Loans amounted to ¥504.6 billion, down ¥12.6 billion (2.4%) year
on year, because repayments outpaced new loans as we carefully
selected deal expected to generate superior profitability.

Domestic Bonds
Domestic bonds amounted to ¥2,884.4 billion, up ¥105.0 billion(3.8%) year on year. This increase was primarily because, allocatedfunds on deposit into super-long JGBs to increase investment
income, which are stable investments and highly liquid.

Real Estate
Real estate amounted to ¥241.1 billion, up ¥1.6 billion (0.7%)
year on year. This was primarily due to investment in properties
with stable rent income over the medium to long term.

Domestic Stocks
Domestic stocks amounted to ¥768.9 billion, down ¥17.9 billion(2.3%) year on year. This was due mainly to a decrease inunrealized gains by declines in stock prices, while invested instocks with stable dividend yield.
Domestic bonds

Domestic stocks(¥ billions)

Foreign securities(¥ billions)(¥ billions)
2,335.9

Industrial andconsumer loans

Real estate(¥ billions)(¥ billions)

2,128.0

2,818.6 2,782.0

2,677.6

2,779.4

2,884.4

786.8

740.8

768.9

1,930.6

1,857.9

212.5

215.3

FY2017 '18

'19

213.6

1,713.8

672.5

239.5

241.1

'20

'21

612.0

536.5

FY2017 '18

'19

'20

'21

FY2017 '18

'19

'20

'21

FY2017 '18

'19

'20

'21

504.8

510.1

517.2

504.6

FY2017 '18

'19

'20

'21

Investment Policies for Fiscal 2022
Investment Environment
In fiscal 2022, the global economy is generally expected tocontinue its current recovery as it continues pent-up demand
regarding COVID-19 pandemic while abating disruptions
affecting production and logistics. Under this economic climate,
long-term interest rates in the United States are projected torise due to the FRB’s monetary tightening involving interest
rate hikes and balance sheet reduction. Japanese long-term
interest rates will have limited room to rise because the BOJ
is undertaking strong measures aimed at preventing 10-year
JGB interest rates from rising above 0.25%. Domestic andinternational stock prices are expected to remain unstable
due mainly to concerns of economic slowdown resulting frommonetary tightening policies implemented by major central
banks in the world. The Japanese yen is expected to remain
weak as it further depreciates against the US dollar due to the
FRB’s ongoing execution of monetary tightening policies.

Domestic Bonds
We will allocate funds from selling our poorly performing FXhedged foreign bonds to super-long JGBs which are stable
investments and highly liquid and corporate bonds withrelatively attractive yield.
Domestic Stocks
We will aim to improve the profitability of our portfolio byreconstituting the stocks that it comprises.
Foreign Securities
While rising FX-hedging costs are expected, we will refrain frominvesting in foreign currency-denominated bonds and replacethem with yen-denominated bonds. On the other hand, we willaccumulate foreign stocks with strong risk-adjusted return.
Industrial and Consumer Loans
We will make loans while carefully selecting investment
projects expected to generate superior profitability.
Real Estate
We will invest in select properties projected to generate stable
rent income over the medium to long term.

FUKOKU MUTUAL LIFE INSURANCE COMPANY

17

ESG Investment and Financing
Basic Approach to ESG Investment and Financing
In addition to practicing asset management with thepolicyholders’ interests at the utmost priority, we are striving
to fulfill our social responsibility through asset managementby taking into account the public nature of the life insurance
business. Since becoming a PRI signatory in Mar 2016,
we’ve incorporated ESG factors into not only our investment
decision without compromising our fiduciary duty, but
our constructive dialogue with the investee companies in
stewardship activities as well. Also, we became a supporterof TCFD recommendations in June 2020. Going forward, we
aim to contribute to a more sustainable society by promoting
ESG investments and stewardship activities while fulfilling ourfiduciary duty to secure profitability.
Endorsement of PRI
The Company became a signatory of the UN’s PRI on March
21, 2016, thus indicating its approval of the intent behind theprinciples. We believe that investing and financing, according
to these concepts, will help improve the profitability we cangenerate using the funds entrusted to us by our customers. We
also expect that such activity will further increase our ability tofulfill our responsibilities as an institutional investor.

ESG Investment and Financing Initiative
In accordance with the business policy of “contributing to
the realization of a sustainable society as a mutual company
operating life insurance business,” we are committed toinvesting assets with themes that help solve social issues,
including environmental problems.
• Supporting developing countries’ low-carbon shift
In September 2021, we invested in green bonds issued by
the World Bank. Funds raised through these bonds will be
used to support projects in developing countries that facilitate
the transition to low-carbon societies and solution for climatechange. These include the introduction of renewable energy,
improved energy efficiency, and new technologies for waste
disposal and agriculture.

• Climate change-related initiatives
In February 2021, we invested in sustainable development
bonds issued by the Inter-American Development Bank. Funds
procured through investment in these bonds are partly used
to support proper forest management in Honduras, as well as
agroforestry. This system of land use combines agriculture andforestry by maintaining livestock and cultivated crops in theareas among trees that have been planted and are being raised.

© IDB• High-yield bond investments for sustainable societies
In December 2021, we invested in a fund focused on global
high-yield corporate bonds, which covers both developed andemerging markets. The fund engages with issuers based on its
own ESG-related assessments to create positive change, which
will facilitate the realization of sustainable society and generatefavorable returns.
• Support for children’s education
In September 2020, we invested in sustainable development
bonds issued by the World Bank. Investment in these bonds
constitutes the first global project through which both issuingentities and investors invoke the importance of providing
support for education during the COVID-19 pandemic. Funds
raised through investment in these bonds will be used tosupport a swift response to the pandemic-related impact on
education in Turkey.** Funds raised by investment in sustainable development bonds will financethis and all other projects conducted by the World Bank.

© World Bank

• Incorporating ESG in research
When selecting domestic stocks, we conduct screenings
based on ESG scores provided by a subsidiary, Fukoku CapitalManagement, Inc., a PRI signatory with extensive expertise
concerning ESG assessment. In addition, when making
investment decisions we take into account ESG-related
information obtained through our stewardship activities. We
also screen some bonds based on ESG-related data.
© World Bank

18

FUKOKU MUTUAL LIFE INSURANCE COMPANY

Environmental Protection Initiatives
Environment-friendly Real Estate Development
Opened in 2010, the Osaka Fukoku Seimei Building was awarded a commendation during the Fifth Award Ceremony for Buildings in
Osaka, held in 2020. The structure received the year’s highest Comprehensive Assessment System for Built Environment Efficiency
evaluation.
Meanwhile, the Sapporo Fukoku Seimei Koshiyama Building, which opened in 2017, is the first edifice in Sapporo to be certified gold
under the Leadership in Energy and Environmental Design rating system, managed by the US Green Building Council.
The structure also received praise as an energy-saving and environment-friendly office building, obtaining a four-star rating
according to the Development Bank of Japan’s Green Building Certification System.
Due primarily to its green walls and highly efficient facilities, the Koiwa Fukoku Seimei Building (completed in fiscal 2019) became the firstbuilding maintained by Fukoku Life to receive a top ranking and ZEB Ready certification under the Building-Housing Energy-efficiency Labeling
System promoted by the Japanese government.
Conserving Energy, Reducing CO2 Emissions
Our goal for fiscal 2030 is to reduce our business-related (thatis, generated by our owned real estate and leased offices) CO 2
emissions to 46% of our fiscal 2013 figure. To this end, we are
striving to implement a variety of systems, including high-efficiency air
conditioning, LED lighting, as well as daylight and motion sensors.
At our Chiba New Town headquarters, we thus have installed 12
hybrid outdoor lights that use solar and wind power.
As a result, our CO 2 emissions in fiscal 2020 dropped 28.9%
from the fiscal 2013 level.

● CO2 Emissions* (t-CO2)
54,885FY2013(Base year)

48,154FY2018Down 28.9%
from FY2013
42,92739,043

FY2019FY2020* Accounts for the CO2 emission coefficients associated with individual energy suppliers

Endorsement of Recommendations from the Task Force on Climate-related Financial Disclosures (TCFD)
In June 2020, Fukoku Life officially endorsed recommendations issued by the Task Force on Climate-related
Financial Disclosures. Our endorsement of the TCFD recommendations reflects our recognition of theimportance of climate change and our commitment to helping attain a secure and sustainable society.
Governance

Our Sustainability Working Group monitors the status of SDG-related initiatives, including those associated with climate change,
and reports its findings to the Board of Directors.
By managing climate change-related risks, we endeavor to limit downward slides in earnings and use climate change-related
issues as opportunities to generate revenue.

Strategy

Risks• Increase in payments of insurance claims and other benefits following natural disasters, such as floods caused by global
warming, and typhoons; growth in morbidity and mortality rates stemming from outbreaks of mosquito-borne tropical diseases
and other infectious contagions caused by rising average temperatures (physical risk)• Negative impact on the value of invested and financed assets, resulting from policy changes in, and technological innovations
associated with, the transition to a low-carbon and decarbonized society (transition risk)• Reputational damage, resulting from a passive approach toward reducing greenhouse gas emissions, the main cause of climate change(reputational risk)
Opportunities• Growth in coverage requirements, stemming from risks posed by climate change• Growth in opportunities to earn returns through investment in, and financing of, companies and projects that contribute to theresolution of climate change issues• Improvement in reputation of stakeholders, reflecting disaster mitigation and other initiatives
We consider risks associated with global warming and large-scale flooding to be emerging risks. We manage them from an
integrated risk perspective, while assessing the likelihood and potential impact of their occurrence.

Physical risks• Scenario-based testing concerning tropical infectious disease outbreaks caused by rising average temperatures; quantitative
Risk
assessments regarding the financial impact of resultant increases in the payment of insurance claims and benefits
Management• Assignment of a major flood (storm surges, flooding) risk rating to all operating locations on a five-point scale
Transition risk
• A ppropriate execution and improvement of the management of credit and market risks arising from policy changes andtechnological innovations associated with the transition to a low-carbon and decarbonized society

Metrics andTargets

Life insurance providers
Indicator: CO2 emissions generated by business activities (the energy consumed by real estate owned, and offices leased by, Fukoku Life)
Targets: A 46% cut in emissions from the fiscal 2013 figure; net-zero emissions by fiscal 2050
Institutional investors
Indicator: CO 2 emissions generated by our investment portfolio (covering stocks and bonds from, and financing provided to,listed companies in Japan)
Target: Net-zero emissions by fiscal 2050

FUKOKU MUTUAL LIFE INSURANCE COMPANY

19

Contribution to Society
Fukoku Life makes a number of social contributions to
help build a better society.
Building Connections through Art and Culture
Art and culture have the power to connect people from allwalks of life. Through its classical music concerts, Fukoku Life
uses music to connect with customers, local residents, andchildren with disabilities. Not limited to concerts, however, ourefforts are expanding and include a variety of other activities.
• Fukoku Life visiting and charity concerts
These concerts have evolved since the initial Fukoku Salon
Concert, held in the lobby of our Uchisaiwaicho headquarters infiscal 1989.
Communities benefit from the concerts we organize.
These comprise visiting concerts, featuring professionalmusicians performing classical music for schools andinstitutions for individuals with disabilities, as well as charity
concerts at which audiences are asked to donate to local
charities that support community welfare efforts.
• Online visiting concerts
In fiscal 2021, the spread of the COVID-19 pandemic madeholding concerts in their conventional format prohibitively
difficult. Thus, to continue our concert-based social
contributions despite the circumstances, we held an online
concert that made possible interactive communication withspecial-needs schools throughout Japan.
We also held a visiting concert at one school and, in lieu of
official visiting concerts, we donated DVDs featuring concert
footage to a number of special-needs schools.

An online concert

Other Social Contributions•R econstruction support for disaster-stricken areas (sale oflocal products)
At our headquarters in Uchisaiwaicho and Chiba New Town,
we have been selling, since fiscal 2011, local products from the
Tohoku region’s Fukushima, Miyagi, and Iwate Prefectures thatwere affected by the Great East Japan Earthquake and Tsunami
of 2011.
In fiscal 2021, we canceled external sales in a bid to thwart
the spread of the pandemic and resumed face-to-face andpre-order sales on an exclusively internal basis. In Fukushima
Prefecture, we cancelled face-to-face sales events that fellwithin the period during which semi-emergency measures
were implemented in response to the pandemic.
During the events held for each prefecture, the basement
cafeteria of our Chiba New Town headquarters offered menus
featuring specialties and local bento boxed lunches from eachof the prefectures. Fukoku Life donated a portion of theseproceeds to areas that had been affected by the disaster.

Sales event featuring specialty products from Miyagi
Prefecture

Shorthorn Beef Hamburger Steak, a special
menu item offered at the basement cafeteria of
our Chiba New Town headquarters

Local bento lunch packages

Communication• Brand mascot
We feature Sanrio Co., Ltd.’s popular Hello Kitty character as abrand mascot on posters, pamphlets, flyers, and merchandise.

Children enjoy a visiting concert

20

FUKOKU MUTUAL LIFE INSURANCE COMPANY

Business Management System
Corporate Governance Enhancement Initiatives
We have formulated a Basic Policy on Corporate Governanceto foster an understanding of our perspective to enhance
corporate governance. We publicize this policy, along with our
Corporate Governance Report.
Basic Approach to Corporate GovernanceOur mutual company’s insurance business is a business of
our policyholders that have entrusted the management of
this business to us. No matter the circumstances, we must
survive as a life insurance company to continue fulfilling our
responsibility of reliably paying insurance claims and benefits.
To this end, we will establish a corporate governance system
based on this fundamental policy in an effort to stabilize andensure the stability our business while providing policyholders
with peace of mind.
Establishment of Management Control Measures
The Board of Directors makes important business decisions andmonitors business execution. The two external directors bringan outside perspective to the deliberations of the board. In
April 2009, Fukoku Life introduced an executive officer system.
Under this system, we have separated and strengthened
decision-making and business execution functions, with theBoard of Directors fulfilling decision-making and supervisory
functions. The Board of Full-Time Directors, comprising thepresident and executive officer and other titled executive
officers, deliberates important business execution policy
for the Company. Meanwhile, various committees havebeen established beneath the Board of Directors in an effort
to strengthen internal controls.
Members of the Audit & Supervisory Board attend
meetings of the Board of Directors, the Board of Full-Time
Directors and other important boards, auditing the executionof operations by directors. The internal audit department
performs internal audits, verifies the appropriateness ofcorporate operations and strives to ensure the soundness ofbusiness operations.
Enhancement of Internal Control System
We are a mutual company that operates a highly public life
insurance business with the goal of protecting the livelihoods ofpolicyholders. As such, we have established a “Basic Internal
Control System Policy” aimed at ensuring the suitability of
our operations, with the ultimate goal of achieving sound andappropriate management. Based on this policy, we are working
to enhance our internal control systems, which include our risk
management and compliance systems.
Enterprise risk management (ERM)
Life insurance is a “promise” to pay insurance claims andbenefits in the event of an unforeseen emergency, a lifetime
commitment to customers that can even span generations.
Events may occur, such as drastic changes in theeconomic environment or other catastrophes, during the many
months and years in which we accompany customers on
their life journey. When this happens, the role of life insurancecompanies becomes even more important.
Only after keeping this promise with unwavering
reliability regardless of the circumstances can customers
enjoy peace of mind. To maintain this reliability into the future,
Fukoku Life promotes enterprise risk management (ERM) for
overall management of a diverse range of complicated risks

from a strategic perspective based on the recognition thateach executive officer and employee is responsible for risk
management commensurate with their position.
At Fukoku Life, the Board of Directors has established
the Risk Management Committee to perform enterprise risk
management (ERM). Several subcommittees have been
established under the Risk Management Committee to manage
the various risks that arise in business operations, and to conduct
asset and liability management (ALM). The Risk Management
Committee consolidates and evaluates these risks at thecorporate level, and considers the appropriate level of acceptablerisk and risk response. Furthermore, the Risk Management
Committee has established a specialized risk management
committee to help enhance enterprise risk management.
Full-time directors are members of the Risk Management
Committee, which is chaired by the president. Other directors
chair subcommittees, creating a risk management structurethat is led by top management.
The specialized risk management committee is central
to understanding the Group’s overall risk management
situation. At Fukokushinrai Life Insurance, the Company’s
Risk Management Committee secretariat and the secretariats
of various subcommittees directly monitor the management
status of risks under their jurisdiction.
Furthermore, the audit department veriﬁes that the risk
management system is functioning effectively.
Compliance System
As members of the community, all executives and employees
undergo ongoing training in compliance-related matters so thatthey not only observe laws and regulations, but also comply
with protocols and social conventions. This training is also
aimed at enhancing the spirit of compliance. To this end, as
well as improving and reinforcing the compliance system, wehold hands-on compliance training on an ongoing basis.
However, we recognize that even the most robust of
systems cannot guarantee the complete elimination of improper
conduct. We believe that it is important to detect any improper
conduct early, deal with it swiftly and appropriately, and makeconstant improvements and work to rectify the situation in orderto prevent a recurrence. Accordingly, we believe that continuous
improvement and correction are important.
The Compliance Committee, comprising full-time directors
and other executives and chaired by the president, has theBoard of Directors’ mandate to deliberate matters related
to compliance promotion and to promote compliance. The
Compliance Control Department serves as secretariat for thiscommittee. Furthermore, the chief compliance officer andcompliance officers are stationed at headquarters to perform
regular compliance checks.
Protection of Personal Information
Fukoku Life believes that proper handling of personal informationis one of the elements most vital toward maintenance of its
status as an insurance company that is trusted by its customers.
Accordingly, we have formulated our own privacy policy and abasic policy on the handling of specific personal information toensure appropriate treatment and safeguarding of personal data.
Moving forward, we will continue to comply with Japan's
Act on the Protection of Personal Information and other related
laws and ordinances while maintaining proper handling andprotection of personal data.
FUKOKU MUTUAL LIFE INSURANCE COMPANY

21

Non-consolidated Financial Statements
Non-consolidated Balance Sheets
Fukoku Mutual Life Insurance Company
As of March 31, 2021 and 2022

As of March 31,

2021

2022

Millions of yen

Assets:Cash and deposits:
Cash …………………………………………………………………………………
Bank deposits ………………………………………………………………………
Call loans ………………………………………………………………………………
Monetary claims bought ……………………………………………………………
Money held in trust ……………………………………………………………………
Securities:
Government bonds …………………………………………………………………
Local government bonds …………………………………………………………
Corporate bonds ……………………………………………………………………
Stocks ………………………………………………………………………………
Foreign securities …………………………………………………………………
Other securities ……………………………………………………………………
Loans:
Policy loans …………………………………………………………………………
Ordinary loans ………………………………………………………………………
Tangible fixed assets:
Land …………………………………………………………………………………
Buildings ……………………………………………………………………………
Lease assets ………………………………………………………………………
Construction in progress …………………………………………………………
Other tangible fixed assets ………………………………………………………
Intangible fixed assets:
Software ……………………………………………………………………………
Lease assets ………………………………………………………………………
Other intangible fixed assets ……………………………………………………
Agency receivables ……………………………………………………………………
Reinsurance receivables ……………………………………………………………
Other assets:
Accounts receivable ………………………………………………………………
Prepaid expenses …………………………………………………………………
Accrued income ……………………………………………………………………
Deposits ……………………………………………………………………………
Derivatives …………………………………………………………………………
Cash collateral paid for financial instruments ……………………………………
Suspense payments ………………………………………………………………
Rest of the other asset ……………………………………………………………
Prepaid pension cost …………………………………………………………………
Allowance for possible loan losses …………………………………………………
Total assets……………………………………………………………………………
22

FUKOKU MUTUAL LIFE INSURANCE COMPANY

2022
Millions of
U.S. dollars¥155
159,276
159,431
136,000
239
25,277¥166
159,983
160,149
48,00080
26,070

$1
1,307
1,308
392
0
213

2,005,536
99,212
699,187
813,227
2,175,012
162,612
5,954,789

2,102,521
102,771704,056
795,801
2,388,284
184,163
6,277,599

17,178
839
5,752
6,502
19,513
1,504
51,29150,797517,293568,091

48,629504,675
553,305

397
4,123
4,520

146,816
92,635578
93
4,362
244,487

150,195
89,202
265
1,767
3,974
245,405

1,227
728
2
14
32
2,005

19,181
686
4,388
24,256
10124

19,914498
7,407
27,821
15
135

162
4
60
227
0
1

6,974
3,339
28,168
2,250
352
1,747
3,005
3,234
49,072547(4,386)¥7,157,940

5,392
3,202
31,840
1,834
35
4,499
1,871
3,653
52,328

44
26
260
14
0
36
15
29
427

912

7

(2,515)¥7,389,308(20)$60,375

As of March 31,

2021

2022

2022
Millions of
U.S. dollars

Millions of yen

Liabilities:

Policy reserves:
Reserve for outstanding claims ………………………………………………
Policy reserve ……………………………………………………………………
Reserve for dividends to policyholders ………………………………………
Reinsurance payables ………………………………………………………………
Subordinated bonds …………………………………………………………………
Other liabilities:
Cash received as collateral under securities lending transactions………
Corporate income tax payable …………………………………………………
Accounts payable …………………………………………………………………
Accrued expenses ………………………………………………………………
Unearned income …………………………………………………………………
Deposits received …………………………………………………………………
Guarantee deposits received ……………………………………………………
Derivatives …………………………………………………………………………
Cash collateral received for financial instruments …………………………
Lease obligations …………………………………………………………………
Asset retirement obligations ……………………………………………………
Suspense receipts ………………………………………………………………
Reserve for claims and other payments
Reserve for employees’ retirement benefits ……………………………………
Reserve for price fluctuation ………………………………………………………
Deferred tax liabilities ………………………………………………………………
Deferred tax liabilities for land revaluation ………………………………………
Total liabilities ………………………………………………………………………

¥19,551
5,729,511
63,232
5,812,295
87
241,935¥22,985
5,800,015
63,4115,886,412
87
241,935$187
47,389518
48,0950
1,976

61,8192,764
7,272
10,280367
6,303
13,88741,391
10
761
2,603
1,679
149,141

160,9282,767
7,282
11,438419
6,523
13,97068,377
—
553
2,355
1,711
276,328

1,314
22
59
93
3
53
114
558
—
4
19
13
2,257

23,735
172,797
26,43014,1846,440,606

3,400

27

24,850176,670
25,061
14,183
6,648,929

203
1,443
204
115
54,32512,000116,000
112

12,000116,000
112

98
947
0

3,271

3,370

27

2,400
20,00041,0004,800
20,00041,000

39
163
334

207
767
59,102
123,477
126,748
254,860

206
767
57,078123,852
127,222
255,334

1
6
466
1,011
1,039
2,086

458,287
4,185
462,473
717,333¥7,157,940

480,860
4,184
485,044740,379¥7,389,308

3,928
34
3,963
6,049
$60,375—

Net assets:

Foundation funds ……………………………………………………………………
Accumulated foundation funds redeemed ………………………………………
Reserve for revaluation ……………………………………………………………
Surplus:
Legal reserve for future losses …………………………………………………
Other surplus:
Reserve for redemption of foundation funds ……………………………
Reserve for dividend allowances ……………………………………………
Accumulated fund for price fluctuation ……………………………………
Reserve for advanced depreciation ofreal estate for tax purpose …………………………………………………
Other reserves …………………………………………………………………
Unappropriated surplus ………………………………………………………
Total foundation funds, surplus and others ……………………………………
Net unrealized gains (losses) on
available-for-sale securities, net of tax …………………………………………

Revaluation reserve for land, net of tax ……………………………………………
Total valuation and translation adjustments…………………………………………
Total net assets………………………………………………………………………
Total liabilities and net assets………………………………………………………
See notes to the non-consolidated financial statements.

FUKOKU MUTUAL LIFE INSURANCE COMPANY

23

Non-consolidated Statements of Operations
Fukoku Mutual Life Insurance Company
For the years ended March 31, 2021 and 2022

Year ended March 31,

2021

2022

Millions of yen

Ordinary revenues:
Premium and other income:Premium income …………………………………………………………………
Reinsurance income ………………………………………………………………
Investment income:Interest, dividends and other income:Interest on deposits ……………………………………………………………
Interest and dividends on securities …………………………………………
Interest on loans …………………………………………………………………
Income from real estate for rent ………………………………………………
Other interest and dividends …………………………………………………
Gains on money held in trust, net ………………………………………………
Gains on trading securities, net……………………………………………………
Gains on sales of securities ………………………………………………………
Gains on redemption of securities, net…………………………………………
Foreign exchange gains, net………………………………………………………
Reversal of allowance for possible loan losses …………………………………
Other investment income …………………………………………………………
Gains on separate accounts, net …………………………………………………
Other ordinary revenues:
Fund receipt from annuity rider …………………………………………………
Proceeds from deferred insurance ………………………………………………
Reversal of reserve for outstanding claims ……………………………………
Reversal of reserve for employees’ retirement benefits ………………………
Others ………………………………………………………………………………
Total ordinary revenues ……………………………………………………………
Ordinary expenses:
Claims and other payments:
Claims ………………………………………………………………………………
Annuities ……………………………………………………………………………
Benefits ……………………………………………………………………………
Surrenders …………………………………………………………………………
Other payments ……………………………………………………………………
Reinsurance premiums ……………………………………………………………
Provision of policy reserve and others:
Provision of reserve for outstanding claims……………………………………
Provision of policy reserves ………………………………………………………
Provision of interest portion of reserve for dividends to policyholders ………

24

FUKOKU MUTUAL LIFE INSURANCE COMPANY

2022
Millions of
U.S. dollars¥484,868
143
485,011¥486,302
158
486,461$3,973
1
3,974

5131,735
8,137
15,534
146
155,559
1,127
6,523
23,959———170
19,315
206,6572
140,247
8,048
19,074
237
167,609817
1,664
13,920
65
1,617
1,867
381
6,391
194,336

0
1,145
65
155
1
1,369
6
13
113
0
13
15
3
52
1,587

2,205
3,618
262
246
3,196
9,529
701,198

2,704
2,938
—
—
3,279
8,922
689,719

22
24
—
—
26
72
5,635

77,539151,810
106,884
52,88826,083
231
415,436

81,426
152,290
109,711
48,261
24,152
218
416,061

665
1,244
896
394
197
1
3,399

—

3,434
70,504
13¥73,952

28
576
0
$604

34,532
13¥34,545

Year ended March 31,

2021

2022

Millions of yen

Investment expenses:
Interest expenses …………………………………………………………………
Losses on sales of securities ……………………………………………………
Losses on valuation of securities …………………………………………………
Losses on derivative instruments, net …………………………………………
Foreign exchange losses, net ……………………………………………………
Provision of allowance for possible loan losses…………………………………
Depreciation of real estate for rent and other assets …………………………
Other investment expenses ………………………………………………………
Operating expenses……………………………………………………………………
Other ordinary expenses:
Deferred annuity payments ………………………………………………………
Taxes …………………………………………………………………………………
Depreciation ………………………………………………………………………
Provision of reserve for claims and other payments……………………………
Provision of reserve for employees’ retirement benefits………………………
Others ………………………………………………………………………………
Total ordinary expenses ……………………………………………………………
Ordinary profits ………………………………………………………………………
Extraordinary gains:
Gains on disposal of fixed assets…………………………………………………
Total extraordinary gains……………………………………………………………
Extraordinary losses:
Losses on disposal of fixed assets ………………………………………………
Impairment losses …………………………………………………………………
Provision of reserve for price fluctuation ………………………………………
Others ………………………………………………………………………………
Total extraordinary losses…………………………………………………………
Surplus before income taxes ………………………………………………………
Income taxes:
Current ………………………………………………………………………………
Deferred ……………………………………………………………………………
Total income taxes …………………………………………………………………
Net surplus for the year ……………………………………………………………

2022
Millions of
U.S. dollars¥4,093
11,809404
12,967
4,602
2,369
4,427
8,767
49,44391,599¥4,402
15,060
344
7,746
—
—
4,788
10,98543,32890,779

$35
123
2
63
—
—
39
89
354
741

3,944
7,304
9,739
—
—
1,069
22,057613,083
88,115

3,353
7,472
10,657
3,400
750
1,212
26,845650,967
38,752

27
61
87
27
6
9
219
5,318
316

133
133

10
10

0
0

801
198
50,051
1,059
52,11036,137

430
46
3,873
—
4,349
34,412

3
0
31
—
35
281

11,227(10,516)710¥35,427

11,069(9,975)
1,093¥33,319

90
(81)
8
$272

See notes to the non-consolidated financial statements.

FUKOKU MUTUAL LIFE INSURANCE COMPANY

25

Non-consolidated Statements of Changes in Net Assets
Fukoku Mutual Life Insurance Company
For the years ended March 31, 2021 and 2022

Millions of yen
Foundation funds, surplus and others
Surplus
Other surplus

Accumulated
foundation
funds
Reserve forredeemedrevaluation

Legal
reservefor future
lossesReserve forredemptionoffoundation
funds

Reserve fordividend
allowances

Accumulated
fund for pricefluctuation

Reserve foradvanceddepreciation ofreal estate fortax purpose

Other
reserves

UnappropriatedsurplusTotal
surplusTotal
foundation
funds, surplus
and others¥116,000¥3,176—¥20,000¥41,000

¥209

¥767

¥57,901¥123,054¥251,166(31,547)(31,547)(31,547)

(95)

—

—

Payment of interest on foundation
funds�����������

(102)

(102)

(102)

Net surplus for the fiscal year��

35,42735,42735,427(2,400)

—

—

1

—

—

(83)

(83)

(83)

For the year ended March 31, 2021

Foundation
funds

Balance at the beginning of the fiscal
year������������������������������������������������ ¥12,000¥112

Changes in the fiscal year
Additions to reserve for dividends
to policyholders�������
Additions to legal reserve for
future losses��������

95

Additions to reserve for redemptionof foundation funds������

2,400

Reversal of reserve for advanced
depreciation of real estate for tax
purpose����������

(1)

Reversal of revaluation reserve forland, net of tax�������
Net changes, excluding foundation
funds, surplus and others���

—

—

—

95

2,400

—

—

(1)

—

1,200

3,694

3,694

Balance at the end of the fiscal year���� ¥12,000¥116,000¥112¥3,271¥2,400¥20,000¥41,000

¥207

¥767

¥59,102¥126,748¥254,860

Total changes in the fiscal year��

Millions of yen
Valuation and translation adjustments

For the year ended March 31, 2021

Balance at the beginning of the fiscal year��������������

Net unrealized gains(losses) on available-for-salesecurities, net of tax

Revaluation reserve forland, net of tax

Total valuation andtranslation adjustments

Total
net assets¥284,752¥4,102¥288,855¥540,021

Changes in the fiscal year
Additions to reserve for dividends to policyholders���������

(31,547)

Additions to legal reserve for future losses�������������

—Payment of interest on foundation funds��������������

(102)

Net surplus for the fiscal year������������������

35,427

Additions to reserve for redemption of foundation funds�������

—

Reversal of reserve for advanced depreciation of real estate for tax
purpose���������������������������

—

Reversal of revaluation reserve for land, net of tax���������

(83)

Net changes, excluding foundation funds, surplus and others�����

173,534

83

173,617

173,617

Total changes in the fiscal year�������������������

173,534

83

173,617

177,312

Balance at the end of the fiscal year�����������������

¥458,287¥4,185¥462,473¥717,333

26

FUKOKU MUTUAL LIFE INSURANCE COMPANY

Millions of yen
Foundation funds, surplus and others
Surplus
Other surplus

Accumulated
foundation
funds
Reserve forredeemedrevaluation

Legal
reservefor future
lossesReserve forredemptionoffoundation
funds

Reserve fordividend
allowances

Accumulated
fund for pricefluctuation

Reserve foradvanceddepreciation ofreal estate fortax purpose

Other
reserves

UnappropriatedsurplusTotal
surplusTotal
foundation
funds, surplus
and others¥116,000¥3,271¥2,400¥20,000¥41,000

¥207

¥767

¥59,102¥126,748¥254,860(32,744)(32,744)(32,744)

(99)

—

—

Payment of interest on foundation
funds�����������

(102)

(102)

(102)

Net surplus for the fiscal year��

33,31933,31933,319(2,400)

—

—

1

—

—

1

1

1

For the year ended March 31, 2022

Foundation
funds

Balance at the beginning of the fiscal
year������������������������������������������������ ¥12,000¥112

Changes in the fiscal year
Additions to reserve for dividends
to policyholders�������
Additions to legal reserve for
future losses��������

99

Additions to reserve for redemptionof foundation funds������

2,400

Reversal of reserve for advanced
depreciation of real estate for tax
purpose����������

(1)

Reversal of revaluation reserve forland, net of tax�������
Net changes, excluding foundation
funds, surplus and others���

—

—

—

99

2,400

—

—

(1)

—

(2,024)473

473

Balance at the end of the fiscal year���� ¥12,000¥116,000¥112¥3,370¥4,800¥20,000¥41,000

¥206

¥767

¥57,078¥127,222¥255,334

Total changes in the fiscal year��

Millions of yen
Valuation and translation adjustments

For the year ended March 31, 2022

Balance at the beginning of the fiscal year��������������

Net unrealized gains(losses) on available-for-salesecurities, net of tax

Revaluation reserve forland, net of tax

Total valuation andtranslation adjustments

Total
net assets¥458,287¥4,185¥462,473¥717,333

Changes in the fiscal year
Additions to reserve for dividends to policyholders���������

(32,744)

Additions to legal reserve for future losses�������������

—Payment of interest on foundation funds��������������

(102)

Net surplus for the fiscal year������������������

33,319Additions to reserve for redemption of foundation funds�������

—

Reversal of reserve for advanced depreciation of real estate for tax
purpose���������������������������

—

Reversal of revaluation reserve for land, net of tax���������

1

Net changes, excluding foundation funds, surplus and others�����

22,572(1)

22,571

22,571

Total changes in the fiscal year�������������������

22,572(1)

22,571

23,045

Balance at the end of the fiscal year�����������������

¥480,860¥4,184¥485,044¥740,379

FUKOKU MUTUAL LIFE INSURANCE COMPANY

27

Millions of U.S. dollars
Foundation funds, surplus and others
Surplus
Other surplus

Legalreservefor future
lossesReserve forredemptionoffoundation
funds

Reserve fordividend
allowances

Accumulated
fund for pricefluctuation

Reserve foradvanceddepreciation ofreal estate fortax purpose

Other
reserves

UnappropriatedsurplusTotal
surplusTotal
foundation
funds, surplus
and others

$26

$19

$163

$334

$1

$6

$482

$1,035$2,082

(267)

(267)

(267)

(0)

—

—

Payment of interest on foundation
funds�����������

(0)

(0)

(0)

Net surplus for the fiscal year��

272

272

272

(19)

—

—

0

—

—

0

0

0

For the year ended March 31, 2022

Balance at the beginning of the fiscal
year������������������������������������������������

Foundation
funds

$98

Accumulated
foundation
funds
Reserve forredeemedrevaluation

$947

$0

Changes in the fiscal year
Additions to reserve for dividends
to policyholders�������
Additions to legal reserve for
future losses��������

0

Additions to reserve for redemptionof foundation funds������

19

Reversal of reserve for advanced
depreciation of real estate for tax
purpose����������

(0)

Reversal of revaluation reserve forland, net of tax�������
Net changes, excluding foundation
funds, surplus and others���Total changes in the fiscal year��

—

—

—

0

19

—

—

(0)

—

(16)

3

3

Balance at the end of the fiscal year����

$98

$947

$0

$27

$39

$163

$334

$1

$6

$466

$1,039$2,086

Millions of U.S. dollars
Valuation and translation adjustments

For the year ended March 31, 2022

Balance at the beginning of the fiscal year��������������

Net unrealized gains(losses) on available- for-salesecurities, net of tax

Revaluation reserve forland, net of tax

Total valuation andtranslation adjustments

Total
net assets$3,744$34$3,778$5,861

Changes in the fiscal year
Additions to reserve for dividends to policyholders���������

(267)

Additions to legal reserve for future losses�������������

—Payment of interest on foundation funds��������������

(0)

Net surplus for the fiscal year������������������

272

Additions to reserve for redemption of foundation funds�������

—

Reversal of reserve for advanced depreciation of real estate for tax
purpose���������������������������

—

Reversal of revaluation reserve for land, net of tax���������

0

Net changes, excluding foundation funds, surplus and others�����

184

(0)

184

184

Total changes in the fiscal year�������������������

184

(0)

184

188

Balance at the end of the fiscal year�����������������

$3,928$34$3,963$6,04928

FUKOKU MUTUAL LIFE INSURANCE COMPANYNon-consolidated Statements of Surplus
Fukoku Mutual Life Insurance Company
For the years ended March 31, 2021 and 2022

Year ended March 31,

2021

2022

2022
Millions of
U.S. dollars

Millions of yen¥59,102¥57,078

$466

1

1

0

1

1

0

59,10357,079466

32,74430,726251

Legal reserve for future losses …………………………………………………

99

93

0

Interest payment for foundation funds …………………………………………

102

102

0

2,400

2,400

19

2,400

2,400

19

2,601

2,595

21

Total of appropriation of surplus…………………………………………………

35,34533,321

272

Unappropriated surplus carried forward…………………………………………

¥23,758¥23,758$194

Unappropriated surplus
Reversal of voluntary surplus reserve:
Reversal of reserve for advanced depreciationof real estate for tax purpose…………………………………………………… 

Total……………………………………………………………………………………
Appropriation of surplus
Reserve for dividends to policyholders……………………………………………
Net surplus:

Voluntary surplus reserve:
Reserve for redemption of foundation funds…………………………………

Note: Net surplus is calculated by deducting reserve for dividends to policyholders from the sum of unappropriated surplus and reversal of voluntary surplus reserve.

FUKOKU MUTUAL LIFE INSURANCE COMPANY

29

Notes to the Non-consolidated Financial Statements
I. Presentation of the Non-consolidated Financial
Statements
1. Basis of presentation
The accompanying non-consolidated financial statements havebeen prepared from the accounts maintained by Fukoku MutualLife Insurance Company (the “Company”) in accordance withthe provisions set forth in the Insurance Business Act of Japanand its related rules and regulations and in conformity withaccounting principles generally accepted in Japan, which are
different in certain respects from accounting principles generally
accepted in countries and jurisdictions other than Japan.
In addition, the notes to the non-consolidated financial
statements include information which is not required underaccounting principles generally accepted in Japan but ispresented herein as additional information.
Amounts of less than one million yen have been rounded
down. As a result, the totals do not add up.
The translations of yen amounts into U.S. dollar amounts
are included solely for the convenience of the reader and havebeen made, as a matter of arithmetical computation only, at therate of ¥122.39 = US$1.00, the effective rate of exchange at thebalance sheet date of March 31, 2022. The translations should
not be construed as representations that such yen amounts
have been or could in the future be, converted into U.S. dollars
at that or any other rates.

II. Notes to the Non-consolidated Balance Sheets
1. (1) The valuation of securities, including cash and deposits
and monetary claims bought which are equivalent tosecurities, and securities managed as trust assets inmoney held in trust, is as follows:i) Trading securities are stated at fair market value. Costsof their sales are determined by the moving averagemethod.
ii) Held-to-maturity debt securities are stated at amortizedcost under the straight-line method, cost being
determined by the moving average method.
iii) Policy-reserve-matching bonds are stated atamortized cost under the straight-line method, cost
being determined by the moving average method in
accordance with “Temporary Treatment of Accounting
and Auditing Concerning Policy-reserve-matching Bonds
in the Insurance Industry” (Industry Audit Committee
Report No.21 issued by the Japanese Institute ofCertified Public Accountants on November 16, 2000).
iv) Investments in subsidiaries and affiliates are stated atcost, cost being determined by the moving averagemethod.
v) Available-for-sale securities are stated at fair market
value based on the market prices at the end of the
fiscal year. Costs of their sales are determined by
the moving average method. Public and corporate
bonds (including foreign bonds) with differences
between their acquisition costs and fair values that areconsidered as adjustments of interest are stated atamortized cost (straight-line method) determined by themoving average method. However, stocks and othersecurities without quoted market prices are stated at

30

FUKOKU MUTUAL LIFE INSURANCE COMPANY

cost, as determined using the moving average method.
Net unrealized gains or losses on these available-forsale securities, net of taxes, are recorded as a separate
component of net assets.
(2) Derivative instruments are stated at fair market value.
(3) T he Company revalued the land used in the operations basedon the Act for Revaluation of Land (Act No.34 promulgatedon March 31, 1998). The difference between fair value andbook value resulting from the revaluation, net of related
taxes, is recorded as revaluation reserve for land as aseparate component of net assets and the related tax isrecorded as deferred tax liabilities for land revaluation.
• Date of revaluation: March 31, 2002•M
 ethod of revaluation as prescribed for in Article 3
Paragraph 3 of the said Act:
Calculation is based on the appraisal value for property tax
set forth in Article 2 item 3 of the Enforcement Ordinanceof the Act for Revaluation of Land (Government OrdinanceNo.119 promulgated on March 31, 1998) and the roadrate set forth in Article 2 item 4 of the said Ordinance withcertain reasonable adjustments.
(4) D epreciation of tangible fixed assets is calculated by thefollowing methods.
•T angible fixed assets (excluding lease assets): Decliningbalance method
However, buildings (excluding building attachments andstructures acquired on or before March 31, 2016) acquiredon or after April 1, 1998 are depreciated using Straight-line
method.
•L ease assets related to finance lease transactions that
do not transfer ownership: Straight-line method over thelease term with no residual value.
Other tangible fixed assets acquired for ¥100,000 or more
but less than ¥200,000 are depreciated equally over three
years.
(5) A ssets and liabilities denominated in foreign currencies,
except for investments in subsidiaries and affiliates, aretranslated into Japanese yen at the effective exchange
rate prevailing at the balance sheet date. Investments in
subsidiaries and affiliates are translated into Japanese yen at
the exchange rate on the date of acquisition.
(6) A llowance for possible loan losses is provided in accordancewith the Company’s standards of self-assessment and writeoffs and reserves on credit quality:i) F or the credits of borrowers who are legally bankrupt
such as being in the proceedings of bankruptcy or
civil rehabilitation (hereinafter called “legally bankrupt
borrowers”) and who are substantially bankrupt(hereinafter called “substantially bankrupt borrowers”), theCompany provides the remaining amounts of credits after
the direct write-off described below and the deductions of
the amount expected to be collected through the disposalof collateral or the execution of guarantees.
ii) F or the credits of borrowers who are not currently
bankrupt but have a high possibility of bankruptcy

(hereinafter called “not currently bankrupt borrowers”),
the Company provides the amounts deemed as necessary
considering the borrowers’ ability to pay, within theamounts after deductions of the amounts expected tobe collected through the disposal of collateral or the
execution of guarantees.
iii) For the credits of borrowers other than the above, theCompany provides the amounts calculated by multiplying
the borrowers’ balance by the actual ratio of bad debt
losses on defaults during a certain past period.
All credits are assessed by the relevant departmentsin accordance with the Company’s standards of selfassessment on credit quality. The results of the assessment
are reviewed by the audit department, which is independentof business-related divisions. Subsequently, the allowancefor possible loan losses is provided based on the results ofthese assessments.
For the credits of legally bankrupt borrowers andsubstantially bankrupt borrowers, the amounts remaining
after deductions of collateral value or the amounts collectible
through the execution of guarantees are written-off directlyfrom the borrowers’ balances as the estimated uncollectible
amounts. The amount written-off as of March 31, 2021
and 2022 were ¥0 million and ¥0 million (US$6 thousand),
respectively.
(7) To ensure that benefits associated with COVID-19 infections
contracted during the fiscal year ended March 31, 2022
can be paid during the fiscal year ending March 31, 2023,
the Company sets aside as a reserve for claims and otherpayments that exceeds the reserve for outstanding claims
included under the Company’s estimated payments for thelatter fiscal year (calculated based on previous payment
amounts).
(8) Reserve for employees’ retirement benefits and prepaid
pension cost are presented based on projected benefit
obligations and pension plan assets at the balance sheet
date.
The Company uses the following methods foramortizing retirement benefit obligations and retirement
benefit expenses:• Method for allocation of projected retirement benefits.................Benefit formula basis• Amortization period of actuarial gains and losses�� 10 years• Amortization period of prior service cost��������������� 10 years(9) Reserve for price fluctuation is calculated in accordance with
Article 115 of the Insurance Business Act.
(10) Hedge accounting is based on “Accounting Standards for
Financial Instruments” (ASBJ Statement No. 10, July 4,2019). The Company applies a fair value hedge accounting
as a hedge against the risk of foreign exchange fluctuationin relation to bonds and others denominated in foreign
currencies, and a designated hedge accounting (“Furiate
shori”) for foreign currency swaps as a hedge against therisk of foreign exchange fluctuation in relation to bonds
denominated in foreign currencies issued by the Company.

For assessing the effectiveness of hedge used, ratio
analysis of comparing the fluctuations in the fair value orcash flows of hedged items and hedging instruments ismainly applied.
(11) Accounting of unrecognized actuarial differences andunrecognized prior service costs related to employees’
retirement benefits is different to the methods used forthese items in the consolidated financial statements.
(12) The Company accounts for consumption taxes by the taxexclusion method. The consumption taxes on certain assets,
which are not deductible from consumption taxes withheld
and that are stipulated to be deferred under the Tax Act, aredeferred as prepaid expenses and amortized equally over five
years. Consumption taxes other than deferred consumption
taxes are recognized as an expense when incurred.
(13) Initial premium incomes are recorded by the relevant
amounts received when the premium incomes have been
received and the responsibilities on the insurance contract
have been commenced, in principal.
Subsequent premium incomes are also recorded as theamount of payments that have been received.
Of premium incomes that have been received, theportion corresponding to the period that has yet to pass asof the end of the fiscal year is accumulated as policy reservein accordance with Article 116 of the Insurance BusinessAct and Article 69 Paragraph 1 Item 2 of the Enforcement
Regulation of the Insurance Business Act.
Premium incomes associated with the acceptance ofgroup annuities are recorded as amounts equivalent to thepolicy reserve received when accepting the transfers ofthese group annuities.
(14) Claims and other payments (excluding reinsurance
premiums) are recorded by the relevant amounts paid
when the cause for payment under the policy conditions is
occurred and the calculated amounts are paid based on thepolicy conditions.
In accordance with Article 117 of the Insurance
Business Act and Article 72 of the Enforcement Regulationof the Insurance Business Act, reserve for outstanding
claims are accumulated as for claims for which the Company
has a payment due but has not paid, or for which theoccurrence of cause for payment has not been reported but
the Company recognizes that insured payment has alreadyoccurred as of the end of the fiscal year.
Claims and other payments associated with theoutgoing transfer of group annuities are recorded as amounts
equivalent to the policy reserve transferred when recognizing
the transfers of these group annuities.
(15) Policy reserve of the Company is accumulated in accordancewith the methods stated in the statement of calculation
procedures for Insurance Premiums and Policy Reserves(Article 4 Paragraph 2 Item 4 of the Insurance Business Act)
pursuant to Article 116 Paragraph 1 of the Insurance Business
Act to prepare for the future performance of obligations under

FUKOKU MUTUAL LIFE INSURANCE COMPANY

31

the insurance contracts for which the insurer’s responsibilities
have started as of the end of the fiscal year.
Premium reserves, one of the components of policy
reserve, are calculated by the following method.
i) In regard to the policies subject to the standard policy
reserve, the method as prescribed by the Commissionerof Financial Services Agency (Ministry of FinanceOrdinance No.48, 1996) is applied.
ii) In regard to the policies not subject to the standard policy
reserve, the net level premium method is applied.
In regard to the policy reserve accumulated pursuant
to Article 69 Paragraphs 1,2, and 4 of the Enforcement
Regulation of the Insurance Business Act, when the actualassumptions for long-term future cash flows (such asassumed incidence rate and assumed interest rate) deviate
from those assumptions set in the “statement of calculation
procedures for Insurance Premiums and Policy Reserves”
and policy reserve is considered to be possibly insufficient
to cover the future performance of obligations, additional
policy reserve is required to accumulate in accordance with
Article 69 Paragraph 5 of the Enforcement Regulation of the
Insurance Business Act. The following reserves have been
established in compliance with this regulation.
Among individual annuity insurance policies with anassumed interest rate of 5.00% or higher, for policies thathave begun paying annuities (excluding wife’s annuity
insurance additional rider), the Company reduced theassumed interest rate to 1.00% and funded additional policy
reserves. As of March 31, 2021, the balance of these policy
reserves was ¥73,354 million.
The Company has also funded additional policy reserves
for certain individual annuity insurance policies, whole life
insurance policies that include distribution of surplus every
five years and new cancer riders. As of March 31, 2021, thebalance of these policy reserves was ¥1,654 million.
Among individual annuity insurance policies with anassumed interest rate of 5.00% or higher, for policies thathave begun paying annuities (excluding wife’s annuity
insurance additional rider), the Company has reduced theassumed interest rate to 1.00% and funded additional policy
reserves. As of March 31, 2022, the balance of these policy
reserves was ¥72,419 million (US$591 million).
Among whole life insurance policies with assumed
interest rates of 5.00% or higher following the fiscal year
ended March 31, 2022, the Company has reduced assumed
interest rates for policies with premiums that have been paidin full (excluding policies that have been converted into paidup or extended policies, single premium policies, and policies
for which premiums have been waived) to 1.00% and funded
additional policy reserves of ¥107,284 million (US$876
million). The establishment of these reserves rendered¥1,589 million (US$12 million) of additional policy reserves
set aside at the conclusion of the fiscal year ended March 31,
2021 unnecessary. Accordingly, the Company reversed thisamount and transferred ¥105,695 million (US$863 million)(a higher amount) from contingency reserves to additional
policy reserves. Consequently, the establishment of these32

FUKOKU MUTUAL LIFE INSURANCE COMPANY

policy reserves has had no impact on provision of policy
reserves, ordinary profits, and surplus before income taxes.
The Company has also funded additional policy
reserves for certain whole life insurance policies that include
distribution of surplus every five years, new cancer riders,highly advanced medical riders and advanced medical riders.
As of March 31, 2022, the balance of these policy reserves
was ¥77 million (US$629 thousand).
Appointed actuary for each fiscal year, verify whether
policy reserves have been reasonably accumulated inaccordance with Article 121 Paragraph 1 of the Insurance
Business Act and Article 80 of the Enforcement Regulationof the Insurance Business Act.
Contingency reserves, one of the components of policy
reserve, are accumulated pursuant to Article 116 of the
Insurance Business Act and Article 69 Paragraph 1 Item 3 ofthe Enforcement Regulation of the Insurance Business Act
to cover risks that may accrue in the future in order to ensure
performing future obligations under the insurance contracts.
(16) Depreciation of intangible fixed assets is calculated by thefollowing methods.
•S oftware: Straight-line method over the estimated useful
lives.
•L ease assets related to finance lease transactions that
do not transfer ownership: Straight-line method over thelease term with no residual value.
(17) Of the bonds corresponding to the sub-groups of individual
insurance and annuities which are set by insurance types andinvestment policies, the bonds that are held to match theduration of liabilities are classified as policy-reserve-matching
bonds in accordance with “Temporary Treatment of
Accounting and Auditing Concerning Policy-reserve-matching
Bonds in Insurance Industry” (Industry Audit Committee
Report No. 21 issued by the Japanese Institute of Certified
Public Accountants on November 16, 2000).
At the end of the fiscal year ended March 31, 2022,
the Company eliminated all sub-groups, and policy-reservematching bonds categorized for holding purposes werereclassified as available-for-sale securities. The Company
made this change following a review of its interest-raterisk management (conducted through strategic asset andliability matching) that was conducted due to the Company’s
realization that under the prevailing environment of low
interest rates in Japan, continuing to hold bonds for the
purpose of matching the duration of liabilities while securing
investment income commensurate with assumed interest
rates would be prohibitively difficult.
Due to this change, government bonds increased by¥69,841 million (US$570 million), while local government
bonds rose by ¥5,994 million (US$48 million), corporate
bonds by ¥6,132 million (US$50 million), deferred tax
liabilities by ¥22,951 million (US$187 million), and net
unrealized gains (losses) on available-for-sale securities, netof tax by ¥59,016 million (US$482 million). These changes
had no impact in terms of profit and loss.

2. The Company began applying the “Accounting Standard for
Fair Value Measurement” (ASBJ Statement No. 30, July4, 2019; hereinafter called “Accounting Standard for Fair
Value Measurement”) from the beginning of the fiscal year.
In accordance with the transitional treatments prescribedin Paragraph 19 of the Accounting Standard for Fair Value
Measurement and Paragraph 44-2 of the “AccountingStandard for Financial Instruments” (ASBJ Statement No.
10, July 4, 2019), new accounting policies set forth by the
Accounting Standard for Fair Value Measurement will beapplied prospectively. The Company has observed no material
impact from this application of the Accounting Standard for
Fair Value Measurement.
In addition, the Company has decided to provide
notes regarding matters such as the breakdown of financial
instruments by fair value level in the financial instruments
sections of notes to the non-consolidated balance sheets.
3. Asset management of the general accounts other than theseparate accounts stipulated in Article 118 Paragraph 1 ofthe Insurance Business Act is conducted on the principle
of prudent and profitable investments, considering public
and social responsibilities of the insurance business. Basedon this policy, the Company allocates the fund, securing
its liquidity, from the medium-to-long term viewpoints.
The Company is diversifying investments in assets suchas foreign securities, stocks and real estates within theacceptable range of risks in order to enhance the profitability,
although yen-denominated interest bearing assets including
debt securities such as Japanese government bonds andloans are the cores of the portfolios under the asset liability
management. Derivatives are mainly used to hedge themarket risk regarding spot-priced assets and liabilities.
Major financial instruments including securities, loans
and derivatives are exposed to market risk and credit risk.
The Company manages its asset management risk by
establishing internal control systems including various rules
pursuant to the “Three Basic Rules related to Enterprise
Risk Management” established by the Board of Directors.
Specifically, the Company eliminates excessive risk deviatingfrom the basic principle and secures the safety of theassets by utilizing control functions of the Financial andInvestment Risk Management Department towards the asset
management sections, monitoring the status of market risk
and credit risk periodically on a daily or monthly basis. In
addition, the Company quantifies the market risk and credit
risk using value-at-risk (VaR) method in order to control thepossible maximum losses which may arise from the holding
assets within a certain range of risk buffers.
The carrying amounts, fair values and their relateddifferences of major financial assets and liabilities in thegeneral account were as follows:

FUKOKU MUTUAL LIFE INSURANCE COMPANY33

As of March 31,

2021
Millions of yen
Carrying amount Fair value

Cash and deposits:
Cash and deposits not treated as securities����������������������
Total cash and deposits�����������������������������������������������������
Call loans�������������������������������������������������������������������������������
Monetary claims bought:
Claims treated as loans�����������������������������������������������������
Total monetary claims bought�������������������������������������������
Money held in trust:
Trading securities���������������������������������������������������������������
Total money held in trust���������������������������������������������������
Securities:
Trading securities���������������������������������������������������������������
Held-to-maturity debt securities����������������������������������������
Policy-reserve-matching bonds������������������������������������������
Available-for-sale securities�����������������������������������������������
Total securities�������������������������������������������������������������������
Loans:
Policy loans������������������������������������������������������������������������
Ordinary loans��������������������������������������������������������������������
Total loans��������������������������������������������������������������������������
Assets total��������������������������������������������������������������������������������
Subordinated bonds*1������������������������������������������������������������
Liabilities total����������������������������������������������������������������������������
Derivative instruments*2:
Hedge accounting not applied�������������������������������������������
Hedge accounting applied�������������������������������������������������
Total derivative instruments����������������������������������������������

Difference¥155,190
155,190
136,000¥155,190
155,190
136,000

¥—
—
—

239
239

254
254

14
14

24,277
24,277

24,277
24,277——29,426757,339
873,677
4,095,801
5,756,244

29,426
863,820
989,433
4,095,801
5,978,481—
106,481
115,755—
222,237

50,797517,293568,091
6,640,043
241,935
241,935

50,797537,281
588,078
6,882,283
246,577
246,577(0)
19,987
19,987242,239
4,642
4,642

(3,394)(37,644)¥(41,039)(3,394)(37,644)¥(41,039)——¥—*1. The fair value of derivative instruments that are currency swaps under designated hedge accounting is included in the fair valueof subordinated bonds because it is accounted for as an integral part of the subordinated bonds that are the hedge items.
*2. Assets and liabilities generated by derivative instruments are offset and presented net. Net liabilities in total are presented inbrackets.
Notes: 1. Cash, deposits (excluding financial instruments treated as securities based on “Accounting Standards for Financial
Instruments” (ASBJ Statement No. 10, March 10, 2008)) and call loans: The fair values of cash, deposits and call loans are
based on their book values since fair values approximate book values due to their short maturities.
2. Securities including deposits and monetary claims bought which are treated as securities based on “Accounting Standards
for Financial Instruments” (ASBJ Statement No. 10, March 10, 2008) and securities managed as trust assets in money heldin trust: The fair values of marketable securities are measured at the quoted market prices at the balance sheet date. The fairvalues of other securities without the quoted market prices are based on the prices reasonably calculated such as the prices
offered by the information vendors or counterparty financial institutions.
Investments in subsidiaries and affiliates, unlisted stocks and investments in partnerships whereby partnership assets
consist of unlisted stocks whose fair values are deemed extremely difficult to obtain, are excluded from above securities.
The carrying amounts of investments in subsidiaries and affiliates, unlisted stocks and investments in partnerships were¥64,787 million, ¥6,224 million, and ¥29,744 million as of March 31, 2021, respectively.
3. Loans and monetary claims bought treated as loans: The fair values of policy loans are deemed to approximate bookvalues, considering estimated repayment period and interest rate conditions since their repayment deadlines have notbeen set up due to the characteristics that the loans are limited to the amount of cash surrender values. Therefore, thebook values are used as the fair values of policy loans. The fair values of floating interest rate loans among the ordinaryloans and monetary claims bought treated as loans approximate the book values because the market interest rates arereflected in future cash flows in a short period. Therefore, the fair values of floating interest rate loans and monetaryclaims bought treated as loans are based on their book values. The fair values of fixed interest rate loans are measured bydiscounting the future cash flows to the present values.
The fair values of loans from legally bankrupt borrowers, substantially bankrupt borrowers and not currently bankrupt
borrowers and monetary claims bought treated as loans are computed by deducting the amount of the allowance forpossible loan losses from the book values before direct write-offs.
4. Subordinated bonds: Subordinated bonds issued by the Company are stated at fair market values.
5. Derivative instruments:i) The fair values of the futures and options traded at the exchange are measured at the settlement price of theexchange.
ii) The fair values of forward contracts, options and swaps traded over the counter are based on the quoted prices offeredby counterparty financial institutions.
iii) The fair values of foreign currency forward contracts are determined based on the spot exchange rate and forward
contract rate.

34

FUKOKU MUTUAL LIFE INSURANCE COMPANYAs of March 31,

2022

Millions of yen
Carrying amount Fair value

Monetary claims bought:
Claims treated as loans���������������������������������������������������
Total monetary claims bought�����������������������������������������
Money held in trust:
Trading securities�������������������������������������������������������������
Total money held in trust�������������������������������������������������
Securities:
Trading securities�������������������������������������������������������������
Held-to-maturity debt securities��������������������������������������
Available-for-sale securities���������������������������������������������
Total securities�����������������������������������������������������������������
Loans:
Policy loans����������������������������������������������������������������������
Ordinary loans������������������������������������������������������������������
Total loans������������������������������������������������������������������������
Assets total������������������������������������������������������������������������������
Subordinated bonds*1���������������������������������������������������������
Liabilities total��������������������������������������������������������������������������
Derivative instruments*2:
Hedge accounting not applied�����������������������������������������
Hedge accounting applied�����������������������������������������������
Total derivative instruments��������������������������������������������

2022

Millions of U.S. dollars
Carrying amount Fair value
Difference

Difference

¥80
80

¥81
81

¥0
0

$0
0

$0
0

$0
0

25,07025,07025,07025,070

—
—

204
204

204
204

—
—

18,493760,097
5,288,571
6,067,162

18,493
847,316
5,288,571
6,154,381—
87,218—87,218151
6,210
43,21049,572

151
6,923
43,21050,284

—
712
—
712

48,629504,675
553,305
6,645,619
241,935
241,935

48,629521,484
570,114
6,749,647
245,074
245,074(0)16,80916,809104,028
3,139
3,139

397
4,123
4,520
54,298
1,976
1,976

397
4,260
4,658
55,148
2,002
2,002

(0)
137
137
849
25
25

(4,814)(63,528)¥(68,342)(4,814)(63,528)¥(68,342)

—
—
¥—

(39)
(519)
$(558)(39)(519)$(558)——$—*1 The fair value of derivative instruments that are currency swaps under designated hedge accounting is included in the fair value of subordinated bonds because it is accounted for as an integral
part of the subordinated bonds that are the hedge items.
*2 Assets and liabilities generated by derivative instruments are offset and presented net. Net liabilities in total are presented in parentheses.
Notes: 1. Stocks without market prices, such as unlisted stocks, are not included in Securities of the above table. The amount of these stocks on the balance sheet as of March 31, 2022 was¥73,986 million (US$604 million).
2. In accordance with the transitional treatments prescribed in Paragraph 27 of the “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No.
31, July 4, 2019), investments in partnerships have not been included in Securities of the above table. As of March 31, 2022, the amount of investments in partnerships included on thebalance sheet was ¥32,380 million (US$264 million).

4. Matters concerning the breakdown of financial instruments by fair value level are as follows.
The fair values of financial instruments are classified into the following three levels according to the observability and materiality of
inputs used to measure fair value.
Fair Value Level 1: Fair values measured using (unadjusted) quoted prices in active markets for identical assets or liabilities
Fair Value Level 2: Fair values measured using directly or indirectly observable inputs other than Level 1 inputs
Fair Value Level 3: Fair values measured using material unobservable inputs
When multiple inputs with material impact are used to measure fair value, the resulting fair value is classified into the lowest fairvalue level into which any of these inputs can be categorized.
(1) Financial assets and liabilities with fair values recorded on the balance sheet as of March 31, 2022
As of March 31,

2022

Total

¥—
—

¥25,070
25,070¥——¥25,070
25,070

$—
—

$204
204

$—
—

$204
204

7,859
7,859

10,634
10,634——

18,493
18,493

64
64

86
86

—
—

151
151

1,374,059——
699,525
744,8123,372
2,821,770
2,829,629
2,829,629—
96,671
675,954—
1,129,151—
1,901,778
1,912,412
1,937,482————
28,139—28,13928,13928,1391,374,059
96,671
675,954699,525
1,902,104
3,372
4,751,688
4,770,181
4,795,251

11,226
—
—
5,715
6,085
27
23,055
23,11923,119

—
789
5,522
—
9,225
—
15,53815,625
15,830

—
—
—
—
229
—
229
229
229

11,226
789
5,522
5,715
15,541
27
38,82438,97539,180——(202)¥(202)(68,160)
20—¥(68,140)

—
—
—
¥—

(68,160)20(202)¥(68,342)

—
—
(1)
$(1)

(556)
0
—
$(556)

—
—
—
$—

(556)
0
(1)
$(558)Classification
Level 1

Money held in trust:
Trading securities������������������������
Total money held in trust������������
Securities:
Trading securities:
Foreign securities�������������������
Total trading securities������������
Available-for-sale securities:
Government bonds�����������������
Local government bonds��������
Corporate bonds���������������������
Stocks�������������������������������������
Foreign securities�������������������
Other securities����������������������
Total available-for-sale securities��
Total securities����������������������������
Assets total�����������������������������������������
Derivative instruments*:
Currency-related�������������������������
Interest-related���������������������������
Stock-related�������������������������������
Total derivative instruments�������

2022

Millions of yen
Fair value
Level 2
Level 3

Level 1Millions of U.S. dollars
Fair value
Level 2
Level 3Total

* Assets and liabilities generated by derivative instruments are offset and presented net. Net liabilities in total are presented in parentheses.
Note: In accordance with the transitional treatments prescribed in Paragraph 26 of the “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No.31, July 4,2019), investment trusts have not been included in the figures above.
As of March 31, 2022, the amount of investment trusts included on the balance sheet was ¥536,883 million (US$4,386 million).

FUKOKU MUTUAL LIFE INSURANCE COMPANY

35

(2) Financial assets and liabilities with fair values not recorded on the balance sheet as of March 31, 2022
As of March 31,

2022

Classification
Level 1

Monetary claims bought:
Claims treated as loans.�������������������
Total monetary claims bought����������
Securities:
Held-to-maturity debt securities:
Government bonds�����������������������
Local government bonds��������������
Corporate bonds���������������������������
Foreign securities�������������������������
Total held-to-maturity debt securities��
Total securities ���������������������������������
Loans:
Policy loans���������������������������������������
Ordinary loans�����������������������������������
Total loans�����������������������������������������
Assets total�����������������������������������������������
Subordinated bonds������������������������������
Liabilities total�������������������������������������������

Millions of yen
Fair value
Level 2
Level 3

FUKOKU MUTUAL LIFE INSURANCE COMPANY

Total

Level 1

Total

¥—
—

¥—
—

¥81
81

¥81
81

$—
—

$—
—

$0
0

$0
0

796,339——
20,878817,218
817,218—
7,824
20,6101,663
30,09830,098

—
—
—
—
—
—

796,339
7,824
20,61022,541
847,316
847,316

6,506
—
—
170
6,677
6,677

—
63
168
13
245
245

—
—
—
—
—
—

6,506
63
168
184
6,923
6,923

—
—
—
817,218—¥————
30,098245,074¥245,074

48,629521,484
570,114570,196—¥—

48,629521,484
570,114
1,417,512
245,074¥245,074

—
—
—
6,677
—
$—

—
—
—
245
2,002
$2,002

397
4,260
4,658
4,658
—
$—

397
4,260
4,658
11,581
2,002$2,002(3) Explanation of valuation techniques and inputs used tomeasure fair valuei) Securities (including deposits and monetary claims bought
which are treated as securities based on “AccountingStandards for Financial Instruments” [ASBJ Statement
No.10, July 4, 2019])
The fair values of securities for which unadjusted quoted
market prices in active markets are available (primarily
listed stocks and government bonds [including someforeign securities]) are classified as Fair Value Level 1.
Meanwhile, the fair values of securities for which quoted
market prices are available, but are not available in active
markets, are classified as Fair Value Level 2 (This category
primarily includes local government bonds and corporate
bonds [including some foreign securities]). When quoted
market prices are not available for securities, prices
obtained from third parties (mainly from information
vendors and financial institutions with which the Company
conducts business) and determined to have beenmeasured in accordance with prescribed accounting
standards are used to measure the fair values of thesesecurities. If the inputs used to measure the fair value of agiven security are material but unobservable, the resulting
fair value is classified as Fair Value Level 3.
ii) Money held in trust
In principle, the fair values of securities managed as trust
assets and classifed as money held in trust are measured
using the Company’s prescribed method for determining
the value of securities. These fair values are categorized
as Fair Value Level 2.
iii) Loans and monetary claims bought treated as loans
The fair values of policy loans are deemed to approximatebook values, considering estimated repayment period andinterest rate conditions since their repayment deadlines
have not been set up due to the characteristics that theloans are limited to the amount of cash surrender values.

36

2022

Millions of U.S. dollars
Fair value
Level 2
Level 3

Therefore, the book values are used as the fair values ofpolicy loans.
The fair values of floating interest rate loans among
the ordinary loans and monetary claims bought treated asloans approximate the book values because the market
interest rates are reflected in future cash flows in a shortperiod. Therefore, the fair values of floating interest
rate loans and monetary claims bought treated as loans
are based on their book values. The fair values of fixedinterest rate loans are primarily measured by discounting
the future cash flows to the present values.
The fair values of loans from legally bankrupt
borrowers, substantially bankrupt borrowers and not
currently bankrupt borrowers and monetary claims bought
treated as loans are computed by deducting the amountof the allowance for possible loan losses from the bookvalues before direct write-offs.
If the impact of unobservable inputs used to measure
the fair values of loans and monetary claims bought
treated as loans is determined to be material, the resulting
fair values are classified as Fair Value Level 3. Otherwise,
they are categorized as Fair Value Level 2.
iv) Subordinated bonds
The fair values of corporate bonds issued by the Company
are classified as Fair Value Level 2 and are measured
using the same method applied to securities.
v) Derivative instruments
The fair values of derivative instruments for which
unadjusted quoted market prices in active markets
are available (primarily exchange-traded futures andoptions) are classified as Fair Value Level 1. However,most derivative instruments are traded over the counterand have no quoted market prices. Accordingly, prices
obtained from third parties (mainly from information
vendors and financial institutions with which theCompany conducts business) and determined tohave been measured in accordance with prescribedaccounting standards are used to measure the fairvalues of these derivative instruments. Fair values ofderivative instruments that were measured using only
observable inputs or with unobservable inputs considered

to be immaterial are classified as Fair Value Level 2.
Meanwhile, fair values of derivative instruments that havebeen measured using material unobservable inputs are
categorized as Fair Value Level 3.

(4) Information concerning fair values of financial assets and liabilities that have been recorded on the balance sheet as of March 31,
2022 and classified as Fair Value Level 3i) Quantitative information regarding material unobservable inputs
When measuring fair value, the Company does not adjust quoted prices obtained from third parties and does not make estimates
related to inputs that it cannot observe. Accordingly, quantitative information regarding material unobservable inputs have been
omitted.
ii) Reconciliation of balances at the beginning of the current fiscal year and balances as of March 31, 2022, and valuation gains orlosses recognized in the statements of operations for the fiscal year ended March 31, 2022.
Year ended March 31,

2022

2022

Millions of yen
Securities,
Available-for-saleTotal
securities,
Foreign securities

Millions of U.S. dollars
Securities,
Available-for-saleTotal
securities,
Foreign securities

Balance at the beginning of the current fiscal year�����������
Gains or losses during the fiscal year���������������������������
Values recognized as gains or loses*������������������������
Changes in net unrealized gains or losses��������������������
Balance at the end of the current fiscal year��������������������

¥29,312(10)(10)(1,162)¥28,139¥29,312(10)(10)(1,162)¥28,139

$239
(0)
(0)
(9)
$229

$239
(0)
(0)
(9)
$229

* These amounts are included in investment income and investment expenses in the non-consolidated statements of operations for the fiscal year ended March 31, 2022.

iii) Explanation of the valuation process for fair value
The Company’s asset management division is
responsible for the formulation of policies and procedures
related to the measurement of fair value and theactual measurement of fair value. These fair values
are subsequently checked by the risk management
department to ensure their appropriateness andcompliance with relevant policies and procedures.
The Company verifies the appropriateness of the fairvalues it measures using a variety of suitable methods,
which include comparing quoted market prices obtained
from different third parties; confirming techniques andinputs utilized for calculation; and further comparing
measured fair values with the fair values of similar
financial instruments.
iv) Explanation of the impact on fair value in case of change
in material unobservable inputs
When measuring fair value, the Company does not adjust
quoted prices obtained from third parties and does notmake estimates related to inputs that it cannot observe.
Accordingly, it has omitted information concerning
impact on fair value stemming from changes in material
unobservable inputs.
5. The Company holds investment and rental properties suchas office buildings in Tokyo and other areas. The carrying
amounts and the fair values of investment and rental
properties were ¥193,459 million and ¥324,155 million as ofMarch 31, 2021, and ¥196,610 million (US$1,606 million) and¥328,744 million (US$2,686 million) as of March 31, 2022,

respectively. The fair value is mainly based on the value
calculated by the Company in accordance with real estateappraisal standards which includes some adjustments using
the reference prices.
The amount corresponding to asset retirement
obligations included in the carrying amount of investment
and rental properties were ¥417 million as of March 31,
2021, and ¥372 million (US$3 million) as of March 31, 2022,
respectively.
6. T he amount of securities lent under lending agreements were¥465,351 million and ¥621,280 million (US$5,076 million) as
of March 31, 2021 and 2022, respectively.
7. T he total amount of credits to bankrupt borrowers, delinquentloans, delinquent loans past 3 months or more andrestructured loans, which were included in loans, was ¥3,199
million as of March 31, 2021. The details are as follows.
i) T he balance of credits to bankrupt borrowers was ¥147
million as of March 31, 2021.
Credits to bankrupt borrowers represent loans,
excluding the balances already written-off, which meetthe conditions prescribed in Article 96 Paragraph 1 item
3 and 4 of the Enforcement Regulations of the Corporate
Tax Act. Moreover, accrued interest on these loans is notrecorded as income after determining that principal of orinterest on these loans is unlikely to be collected due tothe significant delay in repayment of principal or interest
payment or for some other reasons.

FUKOKU MUTUAL LIFE INSURANCE COMPANY

37ii) The balance of delinquent loans was ¥2,522 million as ofMarch 31, 2021.
Delinquent loans are credits which accrued interest
is not recorded as income due to the same reasons
as described above, and exclude credits to bankrupt
borrowers and loans for which interest payments havebeen suspended and rescheduled to assist and support
the borrowers in the restructuring of their business.
iii) The balance of restructured loans was ¥529 million as ofMarch 31, 2021.
Restructured loans are loans for which certain
concessions favorable to borrowers, such as interest
reduction or exemption, rescheduling of due date forrepayments of principal or interest payment, waiverof claim or other terms, have been negotiated for the
purpose of assisting and supporting the borrowers in the
restructuring of their business. This category excludes
loans classified as credits to bankrupt borrowers,
delinquent loans and delinquent loans past 3 months or
more.
iv) There were no balance of delinquent loans past 3 months
or more as of March 31, 2021.
Delinquent loans past 3 months or more are loans forwhich interest payments or repayments of principal aredelinquent for 3 months or more from the due date under
the terms of the related loan agreements, excluding thoseloans classified as credits to bankrupt borrowers anddelinquent loans.
The direct write-offs related to loans decreased credits tobankrupt borrowers described above by ¥0 million as ofMarch 31, 2021.
The total amount of claims against bankrupt and quasibankrupt obligors, claims with collection risk, delinquentloans past three months or more, and restructured loans was¥3,759 million (US$30 million) as March 31, 2022. The details
are as follows.
i) The balance of claims against bankrupt and quasi-bankrupt
obligors was ¥143 million (US$1 million) as of March 31,2022.
Of which, the estimated uncollectible amountwritten-off was ¥0 million (US$6 thousand) as of March
31, 2022.
Claims against bankrupt and quasi-bankrupt obligors
are loans to borrowers who are subject to bankruptcy,
corporate reorganization or rehabilitation or other similar
proceedings and other borrowers in serious financial
difficulties.
ii) The balance of claims with collection risk was ¥1,999
million (US$16 million) as of March 31, 2022.
Claims with collection risk are loans to obligors(other than bankrupt and quasi-bankrupt obligors) withdeteriorated financial condition and results of operations
from which it is unlikely that the principal and interest on
the loans will be recovered.
iii) There was no balance of delinquent loans past 3 months
or more as of March 31, 2022.

38

FUKOKU MUTUAL LIFE INSURANCE COMPANY

Delinquent loans past 3 months or more are loans forwhich interest payments or repayments of principal aredelinquent for 3 months or more from the due date under
the terms of the related loan agreements, excluding thoseloans classified as claims against bankrupt and quasibankrupt obligors, claims with collection risk.
iv) T he balance of restructured loans was ¥1,616 million(US$13 million) as of March 31, 2022.
Restructured loans are loans for which certain
concessions favorable to borrowers, such as interest
reduction or exemption, rescheduling of due date forrepayments of principal or interest payment, waiverof claim or other terms, have been negotiated for the
purpose of assisting and supporting the borrowers
in the restructuring of their business. This category
excludes loans classified as claims against bankrupt andquasi-bankrupt obligors, claims with collection risk, anddelinquent loans past 3 months or more.
8. A
 ccumulated depreciation of tangible fixed assets were¥173,746 million and ¥178,381 million (US$1,457 million) as
of March 31, 2021 and 2022, respectively.
9. T otal assets in separate accounts provided for in Article 118of the Insurance Business Act were ¥104,979 million and¥112,487 million (US$919 million) as of March 31, 2021
and 2022, respectively. The amounts of separate accountliabilities were the same as separate account assets.
10. T he total amounts of receivables from/payables tosubsidiaries were ¥3,070 million and ¥2,167 million asof March 31, 2021, and ¥2,334 million (US$19 million)and ¥2,714 million (US$22 million) as of March 31, 2022,
respectively.
11. D
 eferred tax assets and deferred tax liabilities as of March
31, 2021 were ¥159,775 million and ¥181,233 million,
respectively. Valuation allowance for deferred tax assets
was ¥4,972 million. Major components of deferred tax
assets were ¥90,033 million of policy reserves, ¥48,383
million of reserve for price fluctuation and ¥11,872 million ofreserve for employees’ retirement benefits as of March 31,
2021.
Major component of deferred tax liabilities was¥176,729 million of net unrealized gains on available-for-salesecurities as of March 31, 2021.
The statutory tax rate and the actual effective tax rate
for the year ended March 31, 2021 were 28.0% and 2.0%,
respectively. The difference between the statutory tax rate
and the actual effective tax rate was attributable mainly to-25.4% of reserve for dividends to policyholders.
Deferred tax assets and deferred tax liabilities as ofMarch 31, 2022 were ¥170,333 million (US$1,391 million)and ¥190,417 million (US$1,555 million), respectively.
Valuation allowance for deferred tax assets was ¥4,976
million (US$40 million).

Major components of deferred tax assets were¥98,854 million (US$807 million) of policy reserves, ¥49,467
million (US$404 million) of reserve for price fluctuation and¥12,184 million (US$99 million) of reserve for employees’
retirement benefits as of March 31, 2022.
Major component of deferred tax liabilities was¥185,335 million (US$1,514 million) of net unrealized gains
on available-for-sale securities as of March 31, 2022.

The statutory tax rate and the actual effective tax rate
for the year ended March 31, 2022 were 28.0% and 3.2%,
respectively. The difference between the statutory tax rate
and the actual effective tax rate was attributable mainly to-25.0% of reserve for dividends to policyholders.

12. Changes in reserve for dividends to policyholders were as follows:Year ended March 31,

2021

2022

Millions of yen

Balance at the beginning of the fiscal year������������������������������������������������������������

¥60,922

2022
Millions of
U.S. dollars¥63,232$516

Transfer from surplus in the previous fiscal year���������������������������������������������������

31,54732,744

267

Dividend payments to policyholders during the fiscal year�������������������������������������

(29,252)(32,580)(266)

Increase in interest������������������������������������������������������������������������������������������������

13

13

0

Balance at the end of the fiscal year���������������������������������������������������������������������

¥63,232¥63,411$518

13. The amounts of stocks of subsidiaries were ¥64,787 millionand ¥64,787 million (US$529 million) as of March 31, 2021
and 2022, respectively.
14. Assets pledged as collateral as of March 31, 2021 were¥99,608 million of securities and ¥790 million of bankdeposits.
Secured debts as of March 31, 2021, were ¥67,546
million.
These amounts include ¥60,241 million of investments
in securities deposited and ¥61,819 million of cash received
as collateral under securities lending transactions secured
by cash as of March 31, 2021.
Assets pledged as collateral as of March 31, 2022 were¥225,740 million (US$1,844 million) of securities.
Secured debts as of March 31, 2022, were ¥166,881
million (US$1,363 million).
These amounts include ¥150,826 million (US$1,232
million) of investments in securities deposited and ¥160,928
million (US$1,314 million) of cash received as collateral
under securities lending transactions secured by cash as ofMarch 31, 2022.
15. Reserve for outstanding claims for the reinsurance contracts
provided in accordance with Article 71 Paragraph 1 of the
Enforcement Regulation of the Insurance Business Act(hereinafter called “reserve for outstanding claims forceded reinsurance”) were ¥4 million and ¥0 million (US$5
thousand) as of March 31, 2021 and 2022, respectively.

Policy reserve for the reinsurance contracts provided inaccordance with Article 71 Paragraph 1 of the Enforcement
Regulation of the Insurance Business Act (hereinafter called“policy reserve for ceded reinsurance”) were ¥30 millionand ¥23 million (US$188 thousand) as of March 31, 2021
and 2022, respectively.
16. T he total amounts of adjustment items for redemption offoundation funds and appropriation of net surplus defined in
Article 30 Paragraph 2 of the Enforcement Regulation of the
Insurance Business Act were ¥462,585 million and ¥485,157
million (US$3,964 million) as of March 31, 2021 and 2022,
respectively.
17. T here were unused commitment line agreements underwhich the Company is the lender of ¥8,733 million and¥11,492 million (US$93 million) as of March 31, 2021 and
2022, respectively.
18. R
 epayments of subordinated bonds are subordinated toother obligations.
19. T he future contribution to the Life Insurance Policyholders
Protection Corporation of Japan under Article 259 of the
Insurance Business Act was estimated at ¥7,946 millionand ¥8,181 million (US$66 million) as of March 31, 2021 and
2022, respectively.
The contribution is recognized as operating expenses
when contributed.

FUKOKU MUTUAL LIFE INSURANCE COMPANY

39

20. Matters Related to Employees’ Retirement Benefits(1) Overview of Employees’ Retirement Benefit Plan
As for a defined benefit plan for office-based employees, the Company has a defined benefit corporate pension plan and retirement
lump-sum payments. As for a defined contribution plan for these employees, the Company also has a defined contribution pension
plan.
As for a defined benefit plan for sales employees, the Company has retirement lump-sum payments.
The Company places a retirement benefit trust in relation to the retirement lump-sum grant plan for sales employees.
The simplified method for calculating retirement benefit obligation is applied to a portion of the Company’s retirement lump-sum
grant plans.
(2) Defined Benefit Plani) Reconciliation of beginning and end of balance of retirement benefit obligation

As of March 31,

2021

2022

Millions of yen

Retirement benefit obligation at the beginning of the fiscal year��������������������������
Service cost�����������������������������������������������������������������������������������������������������������
Interest cost����������������������������������������������������������������������������������������������������������
Actuarial differences occurred during the fiscal year���������������������������������������������
Retirement benefit payments��������������������������������������������������������������������������������
Prior service costs occurred during the fiscal year������������������������������������������������
Retirement benefit obligation at the end of the fiscal year�����������������������������������

¥87,938
3,455
526
2,881
(4,279)54¥90,576ii) Reconciliation of beginning and end of balance of pension plan assets¥90,576
3,657
541
47
(4,178)—¥90,644

$740
29
4
0
(34)
—
$740

As of March 31,

2021

2022

¥53,704
867
6,673
2,577
(1,578)¥62,244

2022
Millions of
U.S. dollars

Millions of yen

Pension plan assets at the beginning of the fiscal year�����������������������������������������
Expected return on pension plan assets���������������������������������������������������������������
Actuarial differences occurred during the fiscal year���������������������������������������������
Contributions by the employer������������������������������������������������������������������������������
Retirement benefit payments��������������������������������������������������������������������������������
Pension plan assets at the end of the fiscal year��������������������������������������������������

2022
Millions of
U.S. dollars¥62,244
1,202
956
1,088
(1,605)¥63,886

$508
9
7
8
(13)
$521

iii) Reconciliation of retirement benefit obligation and pension plan assets with reserve for employees’ retirement benefits andprepaid pension cost presented on the non-consolidated balance sheet
As of March 31,

2021

2022

Millions of yen

a. Funded plan retirement benefit obligation���������������������������������������������������������
b. Pension plan assets�������������������������������������������������������������������������������������������
c. (a + b)�����������������������������������������������������������������������������������������������������������������
d. Unfunded plan retirement benefit obligation�����������������������������������������������������
e. Unrecognized actuarial differences����������������������������������������������������������������
f. Unrecognized prior service cost����������������������������������������������������������������������
g. Net amount of liabilities and assets presented
on the non-consolidated balance sheet�����������������������������������������������������������
h. Reserve for employees’ retirement benefits�����������������������������������������������������
i. Prepaid pension cost�����������������������������������������������������������������������������������������
j. Net amount of liabilities and assets presented
on the non-consolidated balance sheet�����������������������������������������������������������

40

FUKOKU MUTUAL LIFE INSURANCE COMPANY

2022
Millions of
U.S. dollars¥78,508(62,244)
16,263
12,067(5,111)(31)¥78,793(63,886)
14,906
11,850(2,774)
(45)

$643
(521)
121
96
(22)
(0)

23,18723,735(547)

23,937
24,850
(912)

195
203
(7)

¥23,187¥23,937$195

iv) Breakdown of retirement benefit gains and losses

As of March 31,

2021

2022

2022
Millions of
U.S. dollars

Millions of yen

Service cost..........................................................................................................

¥3,455¥3,657$29

Interest cost.........................................................................................................

526

541

4

Expected return on pension plan assets..............................................................

(867)(1,202)(9)

Amortization of actuarial differences....................................................................

1,905

1,428

11

Amortization of prior service cost.........................................................................

(72)

(13)

(0)

Retirement benefit expenses related to defined benefit plan..............................

¥4,947¥4,410$36v) Breakdown of pension plan assets
The breakdown of asset categories as a percentage of total pension plan assets were as follows:

As of March 31,

2021

2022

Domestic stocks...................................................................................................

42.9%

42.2%

Life insurance general account.............................................................................

31.8%

31.1%

Foreign stocks......................................................................................................

8.9%

10.3%

Domestic bonds...................................................................................................

9.9%

9.6%

Assets under joint management..........................................................................

3.3%

3.7%

Foreign bonds.......................................................................................................

3.2%

3.1%

Total......................................................................................................................

100.0%

100.0%

Within the total plan assets as of March 2021 and March 2022, retirement benefit trusts established in relation to the retirement
lump-sum payments plan for sales employees accounted for 35.6% and 35.7%, respectively.
vi) Method for setting the expected long-term rate of return
To set the expected long-term rate of return on pension plan assets, the Company takes into account the present and future
allocation of pension plan assets, and the present and expected future long-term rate of return on a variety of assets that makes
up the pension assets.
vii) Underlying actuarial assumptions
Main underlying actuarial assumptions were as follows:

As of March 31,

2021

2022

0.6%

0.6%

Defined Benefit Plan.........................................................................................

2.5%

3.0%

Retirement benefit trust...................................................................................

0.0%

0.0%

Discount rate........................................................................................................
Expected long-term rate of return on pension plan assets(3) Defined Contribution Plan
The required contribution amount by the Company to the defined contribution plan were ¥219 million and ¥222 million (US$1 million)
as of March 31, 2021 and 2022, respectively.

III. Notes to the Non-consolidated Statements of Operations
1. The total amounts of revenues and expenses in connection with subsidiaries were ¥869 million and ¥8,916 million for the year
ended March 31, 2021, and ¥1,326 million (US$10 million) and ¥8,687 million (US$70 million) for the year ended March 31, 2022,
respectively.

FUKOKU MUTUAL LIFE INSURANCE COMPANY

41

2. The details of gains on sales of securities were as follows:Year ended March 31,

2021

2022

2022
Millions ofMillions of yen

U.S. dollars

Domestic bonds...................................................................................................

¥7,447¥6,543$53

Domestic stocks and others.................................................................................

14,9743,932

32

Foreign securities.................................................................................................

1,400

3,444

28

Others...................................................................................................................

¥137

¥—

$—

3. The details of losses on sales of securities were as follows:Year ended March 31,

2021

2022

2022
Millions ofMillions of yen

U.S. dollars

Domestic bonds...................................................................................................

¥735¥5,343$43

Domestic stocks and others.................................................................................

7,592

7,414

60

Foreign securities.................................................................................................

3,451

2,302

18

Others...................................................................................................................

¥29

¥—

$—

4. The details of losses on valuation of securities were as follows:Year ended March 31,

2021

2022

2022
Millions ofMillions of yen

U.S. dollars

Domestic bonds...................................................................................................

¥65

¥—

Domestic stocks and others.................................................................................

281

302

2

Foreign securities.................................................................................................

¥57

¥42

$0

$—

5. For the year ended March 31, 2021, in calculating the reversal of reserve for outstanding claims, a provision of reserves foroutstanding claims reinsured of ¥3 million was added. In calculating the provision of policy reserves, a provision of reserves for policy
reserves reinsured of ¥0 million was deducted.
For the year ended March 31, 2022, in calculating the provision of reserve for outstanding claims, a reversal of reserves foroutstanding claims reinsured of ¥3 million (US$27 thousand) was added. In calculating the provision of policy reserves, a reversal ofreserves for policy reserves reinsured of ¥7 million (US$58 thousand) was added.
6. The details of gains on trading securities were as follows:Year ended March 31,

2021

2022

2022
Millions ofMillions of yen

U.S. dollars

Interest, dividends and other income...................................................................

¥1,687¥753$6

Gains on sales of trading securities......................................................................

0

0

0

Losses on redemption of trading securities.........................................................

(3,475)(1,671)(13)

Gains on valuation of trading securities................................................................

¥8,310¥2,581$21

7. Gains on money held in trust included valuation gains of ¥0 million and ¥0 million (US$0 thousand) for the year ended March 31, 2021
and 2022, respectively.
8. Losses on derivative instruments included valuation losses of ¥6,984 million and ¥1,419 million (US$11 million) for the year ended
March 31, 2021 and 2022, respectively.
9. “Others” within “Extraordinary losses” for the year ended March 31, 2021 consists of expenses associated with salary guaranties
provided to sales representatives as a countermeasure aimed at preventing the spread of COVID-19.

42

FUKOKU MUTUAL LIFE INSURANCE COMPANY

Report of Independent Auditors

FUKOKU MUTUAL LIFE INSURANCE COMPANY

43

44

FUKOKU MUTUAL LIFE INSURANCE COMPANY

FUKOKU MUTUAL LIFE INSURANCE COMPANY

45

Consolidated Financial Statements
Consolidated Balance Sheets
Fukoku Mutual Life Insurance Company and consolidated subsidiaries
As of March 31, 2021 and 2022

As of March 31,

2021

2022

2022
Millions of
U.S. dollars

Millions of yen

Assets:Cash and deposits.............................................................................................

¥325,854¥323,128$2,640Call loans...........................................................................................................

136,000

48,000392

Monetary claims bought....................................................................................

239

80

0

Money held in trust...........................................................................................

25,277

26,070213

Securities...........................................................................................................

7,417,165

7,697,988

62,897Loans.................................................................................................................

571,420556,577

4,547

Land..............................................................................................................

146,816150,195

1,227

Buildings.......................................................................................................

92,77389,379730

Lease assets.................................................................................................

618

298

2

Construction in progress..............................................................................

93

1,767

14

Other tangible fixed assets...........................................................................

4,521

4,125

33

244,823

245,765

2,008

Software.......................................................................................................

19,877

19,657160

Lease assets.................................................................................................

6,015

3,486

28

Tangible fixed assets:

Intangible fixed assets:

Other intangible fixed assets........................................................................

4,462

7,466

61

30,35530,609250

Agency receivables............................................................................................

0

0

0

Reinsurance receivables....................................................................................

170

175

1

Other assets......................................................................................................

55,44758,397477

Net defined benefit assets................................................................................

339

822

6

Deferred tax assets...........................................................................................

732

1,831

14

Allowance for possible loan losses....................................................................

(4,386)(2,516)(20)

Total assets.......................................................................................................

¥8,803,440¥8,986,931$73,428

46

FUKOKU MUTUAL LIFE INSURANCE COMPANYAs of March 31,

2021

2022

2022
Millions of
U.S. dollars

Millions of yen

Liabilities:
Policy reserves:
Reserve for outstanding claims....................................................................

¥23,713¥27,719$226

Policy reserve...............................................................................................

7,331,271

7,356,399

60,106

Reserve for dividends to policyholders.........................................................

63,232

63,411

518

Reserve for dividends to policyholders (subsidiary)......................................

308

322

2

7,418,526

7,447,853

60,853

Agency payables................................................................................................

112

165

1

Reinsurance payables........................................................................................

103

104

0

Subordinated bonds...........................................................................................

241,935

241,935

1,976

Other liabilities...................................................................................................

156,292

281,058

2,296

Reserve for claims and other payments............................................................

—

3,432

28

Net defined benefit liabilities.............................................................................

28,762

27,677

226

Reserve for price fluctuation.............................................................................

183,520

187,692

1,533

Deferred tax liabilities........................................................................................

25,85725,188205

Deferred tax liabilities for land revaluation.........................................................

14,184

14,183115

Total liabilities..................................................................................................

8,069,294

8,229,290

67,238Foundation funds...............................................................................................

12,00012,00098

Accumulated foundation funds redeemed........................................................

116,000

116,000

947

Reserve for revaluation......................................................................................

112

112

0

Consolidated surplus.........................................................................................

131,699

132,765

1,084

Net assets:

Total foundation funds, surplus and others..................................................

259,811

260,8772,131

Net unrealized gains (losses) on available-for-sale securities, net of tax...........

465,855

486,644

3,976

Revaluation reserve for land, net of tax.............................................................

4,185

4,184

34

Foreign currency translation adjustment...........................................................

(571)

(312)

(2)

Accumulated remeasurements of defined benefit plans..................................

(3,703)(2,030)(16)

Total accumulated other comprehensive income.........................................

465,765

488,486

3,991

Non-controlling interests...................................................................................

8,568

8,276

67

Total net assets................................................................................................

734,145757,640

6,190

Total liabilities and net assets.........................................................................

¥ 8,803,440¥ 8,986,931$ 73,428

See notes to the consolidated financial statements.

FUKOKU MUTUAL LIFE INSURANCE COMPANY

47

Consolidated Statements of Operations
Fukoku Mutual Life Insurance Company and consolidated subsidiaries
For the years ended March 31, 2021 and 2022

Year ended March 31,

2021

2022

Millions of yen

Ordinary revenues:
Premium and other income...............................................................................
Investment income:Interest, dividends and other income...........................................................
Gains on money held in trust, net................................................................
Gains on trading securities, net....................................................................
Gains on sales of securities..........................................................................
Gains on redemption of securities, net........................................................
Foreign exchange gains, net.........................................................................
Reversal of allowance for possible loan losses............................................
Other investment income.............................................................................
Gains on separate accounts, net..................................................................
Other ordinary revenues....................................................................................
Total ordinary revenues..................................................................................
Ordinary expenses:
Claims and other payments:
Claims...........................................................................................................
Annuities.......................................................................................................
Benefits........................................................................................................
Surrenders....................................................................................................
Other payments............................................................................................
Provision of policy reserve and others:
Provision of reserve for outstanding claims.................................................
Provision of policy reserves..........................................................................
Provision of interest portion of reserve for dividends to policyholders........
Provision of interest portion of reserve for dividends to policyholders(subsidiary)..................................................................................................
Investment expenses:
Interest expenses.........................................................................................
Losses on sales of securities.......................................................................
Losses on valuation of securities.................................................................
Losses on derivative instruments, net.........................................................
Foreign exchange losses, net.......................................................................
Provision of allowance for possible loan losses...........................................
Depreciation of real estate for rent and other assets...................................
Other investment expenses.........................................................................
Operating expenses..........................................................................................
Other ordinary expenses...................................................................................
Total ordinary expenses..................................................................................
Ordinary profits................................................................................................

48

FUKOKU MUTUAL LIFE INSURANCE COMPANY

2022
Millions of
U.S. dollars¥584,794¥632,055$5,164

175,540
1,127
6,523
26,764———170
19,315229,442
109,905
924,142

185,514817
1,664
16,760
65
1,616
1,867
381
6,391
215,080
10,762857,898

1,515
6
13
136
0
13
15
3
52
1,757
87
7,009

85,657352,581
116,736
76,283
26,673657,932

91,523309,762
116,426
71,221
24,648613,582

747
2,530
951
581
201
5,013

92
—
13

4,006
25,127
13

32
205
0

0
106

0
29,147

0
238

4,113
11,809404
12,967
4,604
2,369
4,427
7,444
48,14299,99727,923
834,101¥90,040

4,417
15,060
344
7,746
—
—
4,788
9,553
41,91099,60733,132
817,379¥40,519

36
123
2
63
—
—
39
78
342
813
270
6,678
$331

Year ended March 31,

2021

2022

2022
Millions of
U.S. dollars

Millions of yen

Extraordinary gains:
Gains on disposal of fixed assets.................................................................

¥133

¥11

$0

Total extraordinary gains................................................................................

133

11

0

Losses on disposal of fixed assets...............................................................

801

431

3

Impairment losses........................................................................................

198

46

0

Provision of reserve for price fluctuation......................................................

50,357

4,171

34

Others...........................................................................................................

1,059

—

—

Total extraordinary losses...............................................................................

52,417

4,650

37Provision of reserve for dividends to policyholders (subsidiary)................

168

195

1

Surplus before income taxes..........................................................................

37,58835,685291

Current..........................................................................................................

11,95011,945

97

Deferred.......................................................................................................

(10,603)(10,247)(83)

Total income taxes...........................................................................................

1,346

1,698

13

Net surplus.......................................................................................................

36,241

33,986277

Net surplus attributable to non-controlling interests...................................

125

74

0

Net surplus attributable to the parent company...........................................

¥36,116¥33,911$277

Extraordinary losses:

Income taxes:

See notes to the consolidated financial statements.

Consolidated Statements of Comprehensive Income
Fukoku Mutual Life Insurance Company and consolidated subsidiaries
For the years ended March 31, 2021 and 2022

Year ended March 31,

2021

2022

Millions of yen

Net surplus........................................................................................................

2022
Millions of
U.S. dollars¥36,241¥33,986$277

Net unrealized gains (losses) on available-for-sale securities, net of tax......

172,797

20,581

168

Foreign currency translation adjustments....................................................

(91)

259

2

Remeasurements of defined benefit plan, net of tax...................................

4,011

1,673

13

176,717

22,514183

Comprehensive income attributable to the parent company.......................

212,91056,633462

Comprehensive income attributable to non-controlling interests.................

48

(132)

(1)

¥212,959¥56,500$461

Other comprehensive income:Comprehensive income:See notes to the consolidated financial statements.

FUKOKU MUTUAL LIFE INSURANCE COMPANY

49

Consolidated Statements of Cash Flows
Fukoku Mutual Life Insurance Company and consolidated subsidiaries
For the years ended March 31, 2021 and 2022

Year ended March 31,

2021

2022

Millions of yen

Cash flows from operating activities:
Surplus before income taxes........................................................................
Depreciation of real estate for rent and other assets ..................................
Depreciation.................................................................................................
Impairment losses........................................................................................
Increase (decrease) in reserve for outstanding claims.................................
Increase (decrease) in policy reserve...........................................................
Provision of interest portion of reserve for dividends to policyholders........
Provision of interest portion of reserve for dividends
to policyholders (subsidiary)......................................................................
Provision of reserve for dividends to policyholders (subsidiary)...................
Increase (decrease) in allowance for possible loan losses...........................
Increase (decrease) in reserve for claims and other payments....................
Increase (decrease) in net defined benefit liabilities.....................................
Increase (decrease) in reserve for price fluctuation......................................
Interest, dividends and other income...........................................................
Losses (gains) on securities, net .................................................................
Interest expenses.........................................................................................
Foreign exchange losses (gains), net ..........................................................
Losses (gains) on tangible fixed assets, net.................................................
Decrease (increase) in agency receivable.....................................................
Decrease (increase) in reinsurance receivable.............................................
Decrease (increase) in other assets except frominvesting and financing activities................................................................
Increase (decrease) in agency payable.........................................................
Increase (decrease) in reinsurance payable..................................................
Increase (decrease) in other liabilities except frominvesting and financing activities................................................................
Others...........................................................................................................
Subtotal...................................................................................................
Interest, dividends and other income received............................................
Interest expenses paid.................................................................................
Dividends to policyholders paid....................................................................
Dividends to policyholders paid (subsidiary).................................................
Corporate income tax (paid) refunded..........................................................
Net cash provided by (used in) operating activities (a)............................
Cash flows from investing activities:
Net decrease (increase) in deposits.............................................................
Proceeds from sales and redemption of monetary claims bought ..............
Increase in money held in trust....................................................................
Decrease in money held in trust ..................................................................
Payments for purchase of securities............................................................
Proceeds from sales and redemption of securities......................................
Payments for additions to loans...................................................................
Proceeds from collections of loans..............................................................
Proceeds from and payments for settlements of derivatives, net...............
Increase (decrease) in cash received as collateral under
securities lending transactions..................................................................
Others...........................................................................................................
Subtotal (b)..............................................................................................
(a + b)......................................................................................................
50

FUKOKU MUTUAL LIFE INSURANCE COMPANY

2022
Millions of
U.S. dollars¥37,588
4,427
13,542
198
92(98,999)13¥35,685
4,788
14,52946
4,006
25,127
13

$291
39
118
0
32
205
0

0
168
2,362
—
(365)
50,357(175,540)(28,549)
4,113
4,604
590
(0)
(45)

0
195
(1,870)
3,432
755
4,171
(185,514)(2,548)4,417(1,616)
386
0
(5)

0
1
(15)
28
6
34
(1,515)
(20)
36
(13)
3
0
(0)

(540)
(2)
0

2,589
53
0

21
0
0

82
17,629(168,270)
178,058(3,933)(29,252)(188)(14,932)(38,518)

2,185
17,933(71,236)
182,614(4,388)(32,580)(181)(11,931)
62,296

17
146
(582)
1,492
(35)
(266)
(1)
(97)
508

(4,753)29(1,500)1,500(839,487)
742,811(96,899)
87,839(31,354)

2,003
158(2,310)2,310(768,599)
618,119(78,096)
86,729(76,466)

16
1
(18)
18
(6,279)
5,050
(638)
708
(624)

(6,047)(7,463)(155,325)¥(193,844)

99,108(8,672)(125,716)¥(63,420)809(70)(1,027)$(518)

Year ended March 31,

2021

2022

2022
Millions of
U.S. dollars

Millions of yen

Payments for purchase of tangible fixed assets...........................................

¥(33,165)¥(9,512)$(77)

Proceeds from sales of tangible fixed assets...............................................

387

109

0

Payments for purchase of intangible fixed assets........................................

(8,218)(11,808)(96)

Net cash provided by (used in) investing activities..................................

(196,321)(146,928)(1,200)

Proceeds from issuance of subordinated bonds..........................................

50,000——Cash flows from financing activities:
Payment of interest on foundation funds.....................................................

(102)

(102)

(0)

Dividends paid to non-controlling interests..................................................

(3)

(159)

(1)

Payments for lease obligations.....................................................................

(3,533)(3,710)(30)

Net cash provided by (used in) financing activities..................................

46,361(3,972)(32)

Effect of exchange rate changes on cash and cash equivalents.................

(205)

(219)

(1)

Net increase (decrease) in cash and cash equivalents.................................

(188,684)(88,823)(725)

Cash and cash equivalents at the beginning of the fiscal year....................

644,507455,823

3,724

Cash and cash equivalents at the end of the fiscal year..............................

¥455,823¥366,999$2,998

See notes to the consolidated financial statements.

FUKOKU MUTUAL LIFE INSURANCE COMPANY

51

Consolidated Statements of Changes in Net Assets
Fukoku Mutual Life Insurance Company and consolidated subsidiaries
For the years ended March 31, 2021 and 2022

Millions of yen
Foundation funds, surplus and others

Foundation funds

Accumulated
foundation funds
redeemed¥12,000¥116,000

Consolidated
surplus

Total foundation funds,
surplus and others¥127,315¥255,427

Additions to reserve for dividends to policyholders�������������

(31,547)(31,547)

Payment of interest on foundation funds����������������������������

(102)

(102)

Net surplus attributable to the parent company
for the fiscal year���������������������������������������������������������������

36,116

36,116

Reversal of revaluation reserve for land, net of tax�������������

(83)

(83)

For the year ended March 31, 2021
Balance at the beginning of the fiscal year������������������������������

Reserve for revaluation¥112

Changes in the fiscal year

Net changes, excluding foundation funds, surplus
and others��������������������������������������������������������������������������
Total changes in the fiscal year������������������������������������������������

—

—

—

4,383

4,383

Balance at the end of the fiscal year���������������������������������������

¥12,000¥116,000¥112¥131,699¥259,811

Millions of yen
Accumulated other comprehensive income

For the year ended March 31, 2021
Balance at the beginning of the fiscal year��������

Net unrealized
gains (losses) on
available-for-salesecurities,
net of tax

Revaluation
reserve for land,
net of tax¥292,980¥4,102Foreign currencytranslation
adjustments¥(480)

Accumulated
remeasurementsof defined
benefit plans

Total accumulated
othercomprehensive
incomeNon-controllinginterests

Total net assets¥ (7,714)¥288,888¥8,523¥552,839

Changes in the fiscal year
Additions to reserve for dividends topolicyholders������������������������������������������������

(31,547)

Payment of interest on foundation funds������

(102)

Net surplus attributable to the parent
company for the fiscal year�������������������������

36,116

Reversal of revaluation reserve for land,
net of tax�����������������������������������������������������

(83)

Net changes, excluding foundation funds,
surplus and others���������������������������������������

172,874

83

(91)

4,011

176,87745

176,923

Total changes in the fiscal year��������������������������

172,874

83

(91)

4,011

176,87745

181,306

Balance at the end of the fiscal year�����������������

¥465,855¥4,185¥(571)¥ (3,703)¥465,765¥8,568¥734,145

52

FUKOKU MUTUAL LIFE INSURANCE COMPANY

Millions of yen
Foundation funds, surplus and others

Foundation funds

Accumulated
foundation funds
redeemed¥12,000¥116,000

Consolidated
surplus

Total foundation funds,
surplus and others¥131,699¥259,811

Additions to reserve for dividends to policyholders�������������

(32,744)(32,744)

Payment of interest on foundation funds����������������������������

(102)

(102)

Net surplus attributable to the parent company
for the fiscal year���������������������������������������������������������������

33,911

33,911

Reversal of revaluation reserve for land, net of tax�������������

1

1

For the year ended March 31, 2022
Balance at the beginning of the fiscal year������������������������������

Reserve for revaluation¥112

Changes in the fiscal year

Net changes, excluding foundation funds, surplus
and others��������������������������������������������������������������������������
Total changes in the fiscal year������������������������������������������������

—

—

—

1,066

1,066

Balance at the end of the fiscal year���������������������������������������

¥12,000¥116,000¥112¥132,765¥260,877

Millions of yen
Accumulated other comprehensive income

For the year ended March 31, 2022
Balance at the beginning of the fiscal year��������

Net unrealized
gains (losses) on
available-for-salesecurities,
net of tax

Revaluation
reserve for land,
net of tax¥465,855¥4,185

Foreign currencytranslation
adjustments¥(571)

Accumulated
remeasurementsof defined
benefit plans

Total accumulated
othercomprehensive
incomeNon-controllinginterests

Total net assets¥(3,703)¥465,765¥8,568¥734,145

Changes in the fiscal year
Additions to reserve for dividends topolicyholders������������������������������������������������

(32,744)

Payment of interest on foundation funds������

(102)

Net surplus attributable to the parent
company for the fiscal year�������������������������

33,911

Reversal of revaluation reserve for land,
net of tax�����������������������������������������������������

1

Net changes, excluding foundation funds,
surplus and others���������������������������������������

20,789

(1)

259

1,673

22,720(292)

22,428

Total changes in the fiscal year��������������������������

20,789

(1)

259

1,673

22,720(292)

23,494

Balance at the end of the fiscal year�����������������

¥486,644¥4,184¥(312)¥(2,030)¥488,486¥8,276¥757,640

FUKOKU MUTUAL LIFE INSURANCE COMPANY

53

Millions of U.S. dollars
Foundation funds, surplus and others

Foundation funds

Accumulated
foundation funds
redeemed

$98

$947

Consolidated
surplus

Total foundation funds,
surplus and others$1,076$2,122

Additions to reserve for dividends to policyholders�������������

(267)

(267)

Payment of interest on foundation funds����������������������������

(0)

(0)

Net surplus attributable to the parent company
for the fiscal year���������������������������������������������������������������

277

277

Reversal of revaluation reserve for land, net of tax�������������

00

For the year ended March 31, 2022
Balance at the beginning of the fiscal year������������������������������

Reserve for revaluation$0

Changes in the fiscal year

Net changes, excluding foundation funds, surplus
and others��������������������������������������������������������������������������
Total changes in the fiscal year������������������������������������������������

—

—

—

8

8

Balance at the end of the fiscal year���������������������������������������

$98

$947

$0

$1,084$2,131Millions of U.S. dollars
Accumulated other comprehensive income

For the year ended March 31, 2022
Balance at the beginning of the fiscal year��������

Net unrealized
gains (losses) on
available- for-salesecurities,
net of tax$3,806

Revaluation
reserve for land,
net of tax$34

Foreign currencytranslation
adjustments$(4)

Accumulated
remeasurementsof defined
benefit plans$(30)

Total accumulated
othercomprehensive
income$3,805

Non-controllinginterests$70

Total net assets$5,998Changes in the fiscal year
Additions to reserve for dividends topolicyholders������������������������������������������������

(267)

Payment of interest on foundation funds������

(0)

Net surplus attributable to the parent
company for the fiscal year�������������������������

277

Reversal of revaluation reserve for land,
net of tax�����������������������������������������������������

0

Net changes, excluding foundation funds,
surplus and others���������������������������������������

169

(0)

2

13

185

(2)

183

Total changes in the fiscal year��������������������������

169

(0)

2

13

185

(2)

191

Balance at the end of the fiscal year�����������������

$3,976

$34

$(2)

$(16)

$3,991$67$6,19054

FUKOKU MUTUAL LIFE INSURANCE COMPANY

Notes to the Consolidated Financial Statements
I. Presentation of the Consolidated Financial
Statements
1. Basis of Presentation
The accompanying consolidated financial statements havebeen prepared from the accounts maintained by Fukoku MutualLife Insurance Company (the “Company”) and its consolidated
subsidiaries in accordance with the provisions set forth in the
Insurance Business Act of Japan and its related rules andregulations and in conformity with accounting principles
generally accepted in Japan, which are different in certain
respects from accounting principles generally accepted incountries and jurisdictions other than Japan.
In addition, the notes to the consolidated financial
statements include information which is not required underaccounting principles generally accepted in Japan but ispresented herein as additional information.
Amounts of less than one million yen have been rounded
down. As a result, the totals do not add up.
The translations of yen amounts into U.S. dollar amounts
are included solely for the convenience of the reader and havebeen made, as a matter of arithmetical computation only, at therate of ¥122.39 = US$1.00, the effective rate of exchange at thebalance sheet date of March 31, 2022. The translations should
not be construed as representations that such yen amounts
have been or could in the future be, converted into U.S. dollars
at that or any other rates.
2. Principles of Consolidation(1) Scope of Consolidation
Consolidated subsidiaries as of March 31, 2021 and 2022 arelisted below:
Fukoku Capital Management, Inc.
Fukokushinrai Life Insurance Co., Ltd.
Fukoku Information Systems Co., Ltd.
Fukoku Life International (U.K.) Ltd.
Fukoku Life International (America) Inc.
Fukoku Life Investments Singapore Pte. Ltd.
Major unconsolidated subsidiary is Fukoku Business
Service Company Limited.
Four subsidiaries are excluded from the scope of
consolidation, as each one of them is small in its total assets,
amount of sales, net surplus for the period and surplus andare sufficiently insignificant to reasonable judgement on theirimpact on the financial position and results of operation of
the Company’s group.
(2) Application of Equity Method
Unconsolidated subsidiaries (such as Fukoku Business
Service Company Limited, etc.) are insignificant in theirimpact on net surplus attributable to the parent company
and consolidated surplus, and also immaterial as a whole,
therefore, application of equity method is not applied.
There are no affiliates for the year ended March 31,
2021 and 2022.

(3) Fiscal Year of Consolidated Subsidiaries
The fiscal years of the overseas subsidiaries to be consolidated
end with December 31. For the preparation of consolidated
financial statements, financial statements as of that date areused and concerning any important transaction taking place
in between December 31 and the consolidated closing date,necessary adjustments for consolidation are made.

II. Notes to the Consolidated Balance Sheets
1. (1) T he valuation of securities, including cash and deposits
and monetary claims bought which are equivalent tosecurities, and securities managed as trust assets inmoney held in trust, is as follows:i) T rading securities are stated at fair market value. Costsof their sales are determined by the moving averagemethod.
ii) H eld-to-maturity debt securities are stated at amortizedcost under the straight-line method, cost being
determined by the moving average method.
iii) Policy-reserve-matching bonds are stated at amortizedcost under the straight-line method, cost being determinedby the moving average method in accordance with
“Temporary Treatment of Accounting and Auditing
Concerning Policy-reserve-matching Bonds in the
Insurance Industry” (Industry Audit Committee Report
No.21 issued by the Japanese Institute of Certified Public
Accountants on November 16, 2000).
iv) Investments in unconsolidated subsidiaries andaffiliates which are not accounted for under the equity
method are stated at cost, cost being determined by
the moving average method.
v) A vailable-for-sale securities are stated at fair market
value based on the market prices at the end of the
fiscal year. Costs of their sales are determined by
the moving average method. Public and corporate
bonds (including foreign bonds) with differences
between their acquisition costs and fair values that areconsidered as adjustments of interest are stated atamortized cost (straight-line method) determined by themoving average method. However, stocks and othersecurities without quoted market prices are stated atcost, as determined using the moving average method.
Net unrealized gains or losses on these available-for-salesecurities, net of taxes, are recorded as a separate
component of net assets.
(2) Derivative instruments are stated at fair market value.
(3) T he Company revalued the land used in the operations basedon the Act for Revaluation of Land (Act No.34 promulgatedon March 31, 1998). The difference between fair value andbook value resulting from the revaluation, net of related
taxes, is recorded as revaluation reserve for land as aseparate component of net assets and the related tax isrecorded as deferred tax liabilities for land revaluation.
• Date of revaluation: March 31, 2002

FUKOKU MUTUAL LIFE INSURANCE COMPANY

55

• Method of revaluation as prescribed for in Article 3
Paragraph 3 of the said Act:
Calculation is based on the appraisal value for property tax
set forth in Article 2 item 3 of the Enforcement Ordinanceof the Act for Revaluation of Land (Government OrdinanceNo.119 promulgated on March 31, 1998) and the roadrate set forth in Article 2 item 4 of the said Ordinance withcertain reasonable adjustments.
(4) Depreciation of the Company’s tangible fixed assets is
calculated by the following methods.
• Tangible fixed assets (excluding lease assets): Decliningbalance method
However, buildings (excluding building attachments andstructures acquired on or before March 31, 2016) acquiredon or after April 1, 1998 are depreciated using Straight-line
method.
• Lease assets related to finance lease transactions that
do not transfer ownership: Straight-line method over thelease term with no residual value.
Other tangible fixed assets acquired for ¥100,000 or more but
less than ¥200,000 are depreciated equally over three years.
(5) Assets and liabilities denominated in foreign currencies,
except for investments in unconsolidated subsidiaries
and affiliates, are translated into Japanese yen at theeffective exchange rate prevailing at the balance sheet date.
Investments in unconsolidated subsidiaries and affiliates aretranslated into Japanese yen at the exchange rate on thedate of acquisition.
(6) Allowance for possible loan losses for the Company
is provided in accordance with the standards of selfassessment and write-offs and reserves on credit quality:i) For the credits of borrowers who are legally bankrupt
such as being in the proceedings of bankruptcy or civil
rehabilitation (hereinafter called “legally bankrupt borrowers”)
and who are substantially bankrupt (hereinafter called“substantially bankrupt borrowers”), the Company provides
the remaining amounts of credits after the direct write-off
described below and the deductions of the amount expected
to be collected through the disposal of collateral or the
execution of guarantees.
ii) For the credits of borrowers who are not currently
bankrupt but have a high possibility of bankruptcy(hereinafter called “not currently bankrupt borrowers”),
the Company provides the amounts deemed as necessary
considering the borrowers’ ability to pay, within theamounts after deductions of the amounts expected to becollected through the disposal of collateral or the executionof guarantees.
iii) For the credits of borrowers other than the above, theCompany provides the amounts calculated by multiplying
the borrowers’ balance by the actual ratio of bad debt
losses on defaults during a certain past period.
All credits are assessed by the relevant departmentsin accordance with the Company’s standards of self-

56

FUKOKU MUTUAL LIFE INSURANCE COMPANY

assessment on credit quality. The results of the assessment
are reviewed by the audit department, which is independentof business-related divisions. Subsequently, the allowancefor possible loan losses is provided based on the results ofthese assessments.
For the credits of legally bankrupt borrowers andsubstantially bankrupt borrowers, the amounts remaining
after deductions of collateral value or the amounts collectible
through the execution of guarantees are written-off directlyfrom the borrowers’ balances as the estimated uncollectible
amounts. The amount written-off as of March 31, 2021
and 2022 were ¥0 million and ¥0 million (US$6 thousand),
respectively.
(7) T o ensure that benefits associated with COVID-19 infections
contracted during the fiscal year ended March 31, 2022 can be
paid during the fiscal year ending March 31, 2023, the Company
sets aside as a reserve for claims and other payments thatexceeds the reserve for outstanding claims included under
the Company’s estimated payments for the latter fiscal year
(calculated based on previous payment amounts).
(8) N et defined benefit liabilities and assets, which are provided
for employees’ retirement benefits, are calculated bydeducting the amount of pension assets from the amountof retirement benefit obligations incurred as of the balance
sheet date based on the projected retirement benefits as of
the current fiscal year end.
The Company uses the following methods of accounting in
relation to retirement benefits:• Method for allocation of projected retirement benefits����������������������������������������������������������.Benefit formula basis• Amortization period of actuarial gains and losses...10 years• Amortization period of prior service cost...............10 years(9) R eserve for price fluctuation is calculated in accordance with
Article 115 of the Insurance Business Act.
(10)	Hedge accounting is based on “Accounting Standards for
Financial Instruments” (ASBJ Statement No. 10, July 4,2019). The Company applies a fair value hedge accounting
as a hedge against the risk of foreign exchange fluctuationin relation to bonds and others denominated in foreign
currencies, and a designated hedge accounting (“Furiate
shori”) for foreign currency swaps as a hedge against therisk of foreign exchange fluctuation in relation to bonds
denominated in foreign currencies issued by the Company.
For assessing the effectiveness of hedge used, ratio
analysis of comparing the fluctuations in the fair value orcash flows of hedged items and hedging instruments ismainly applied.
(11)	The Company accounts for consumption taxes by the taxexclusion method. The consumption taxes on certain assets,
which are not deductible from consumption taxes withheld
and that are stipulated to be deferred under the Tax Act, aredeferred as prepaid expenses and amortized equally over five

years. Consumption taxes other than deferred consumption
taxes are recognized as an expense when incurred.
(12) Initial premium incomes are recorded by the relevant
amounts received when the premium incomes have been
received and the responsibilities on the insurance contract
have been commenced, in principal.
Subsequent premium incomes are also recorded as theamount of payments that have been received.
Of premium incomes that have been received, theportion corresponding to the period that has yet to pass asof the end of the fiscal year is accumulated as policy reservein accordance with Article 116 of the Insurance BusinessAct and Article 69 Paragraph 1 Item 2 of the Enforcement
Regulation of the Insurance Business Act.
Premium incomes associated with the acceptance ofgroup annuities are recorded as amounts equivalent to thepolicy reserve received when accepting the transfers ofthese group annuities.
(13)	Claims and other payments (excluding reinsurance premiums)
are recorded by the relevant amounts paid when the cause
for payment under the policy conditions is occurred and thecalculated amounts are paid based on the policy conditions.
In accordance with Article 117 of the Insurance
Business Act and Article 72 of the Enforcement Regulationof the Insurance Business Act, reserve for outstanding
claims are accumulated as for claims for which the Company
has a payment due but has not paid, or for which theoccurrence of cause for payment has not been reported but
the Company recognizes that insured payment has alreadyoccurred as of the end of the fiscal year.
Claims and other payments associated with the outgoingtransfer of group annuities are recorded as amounts equivalent
to the policy reserve transferred when recognizing the transfersof these group annuities.
(14)	Policy reserve of the Company is accumulated in accordancewith the methods stated in the statement of calculation
procedures for Insurance Premiums and Policy Reserves(Article 4 Paragraph 2 Item 4 of the Insurance BusinessAct) pursuant to Article 116 Paragraph 1 of the Insurance
Business Act to prepare for the future performance ofobligations under the insurance contracts for which theinsurer’s responsibilities have started as of the end of theconsolidated fiscal year.
Premium reserves, one of the components of policy reserve,
are calculated by the following method.
i) In regard to the policies subject to the standard policy
reserve, the method as prescribed by the Commissioner ofFinancial Services Agency (Ministry of Finance OrdinanceNo.48, 1996) is applied.
ii) In regard to the policies not subject to the standard policy
reserve, the net level premium method is applied.
In regard to the policy reserve accumulated pursuant
to Article 69 Paragraphs 1,2, and 4 of the Enforcement
Regulation of the Insurance Business Act, when the actualassumptions for long-term future cash flows (such asassumed incidence rate and assumed interest rate) deviate
from those assumptions set in the “statement of calculation
procedures for Insurance Premiums and Policy Reserves”
and policy reserve is considered to be possibly insufficient
to cover the future performance of obligations, additional
policy reserve is required to accumulate in accordance with
Article 69 Paragraph 5 of the Enforcement Regulation of the
Insurance Business Act. The following reserves have been
established in compliance with this regulation.
Among individual annuity insurance policies with anassumed interest rate of 5.00% or higher, for policies thathave begun paying annuities (excluding wife’s annuity
insurance additional rider), the Company reduced theassumed interest rate to 1.00% and funded additional policy
reserves. As of March 31, 2021, the balance of these policy
reserves was ¥73,354 million.
The Company has also funded additional policy reserves
for certain individual annuity insurance policies, whole life
insurance policies that include distribution of surplus every
five years and new cancer riders. As of March 31, 2021, thebalance of these policy reserves was ¥1,654 million.
Among individual annuity insurance policies with anassumed interest rate of 5.00% or higher, for policies
that have begun paying annuities (excluding wife’s annuity
insurance additional rider), the Company has reduced theassumed interest rate to 1.00% and funded additional policy
reserves. As of March 31, 2022, the balance of these policy
reserves was ¥72,419 million(US$591 million).
Among whole life insurance policies with assumed
interest rates of 5.00% or higher following the fiscal year
ended March 31, 2022, the Company has reduced assumed
interest rates for policies with premiums that have been paidin full (excluding policies that have been converted into paidup or extended policies, single premium policies, and policies
for which premiums have been waived) to 1.00% and funded
additional policy reserves of ¥107,284 million (US$876 million).
The establishment of these reserves rendered ¥1,589
million (US$12 million) of additional policy reserves set
aside at the conclusion of the fiscal year ended March 31,
2021 unnecessary. Accordingly, the Company reversed thisamount and transferred ¥105,695 million (US$863 million)(a higher amount) from contingency reserves to additional
policy reserves. Consequently, the establishment of thesepolicy reserves has had no impact on provision of policy
reserves, ordinary profits, and surplus before income taxes.
The Company has also funded additional policy reserves
for certain whole life insurance policies that include distributionof surplus every five years, new cancer riders, highly advanced
medical riders and advanced medical riders. As of March 31,
2022, the balance of these policy reserves was ¥77 million(US$629 thousands).
Appointed actuary for each fiscal year, verify whether
policy reserves have been reasonably accumulated inaccordance with Article 121 Paragraph 1 of the Insurance
Business Act and Article 80 of the Enforcement Regulationof the Insurance Business Act.

FUKOKU MUTUAL LIFE INSURANCE COMPANY

57

Contingency reserves, one of the components of policy
reserve, are accumulated pursuant to Article 116 of the
Insurance Business Act and Article 69 Paragraph 1 Item 3 ofthe Enforcement Regulation of the Insurance Business Act
to cover risks that may accrue in the future in order to ensure
performing future obligations under the insurance contracts.
(15)	Depreciation of intangible fixed assets is calculated by thefollowing methods.
• Software: Straight-line method over the estimated useful
lives.
• Lease assets related to finance lease transactions that do
not transfer ownership: Straight-line method over the leaseterm with no residual value.
(16)	Of the bonds of consolidated subsidiaries corresponding to
the sub-groups of individual insurance and annuities which
are set by insurance types and investment policies, thebonds that are held to match the duration of liabilities areclassified as policy-reserve-matching bonds in accordancewith “Temporary Treatment of Accounting and Auditing
Concerning Policy-reserve-matching Bonds in Insurance
Industry” (Industry Audit Committee Report No. 21 issued
by the Japanese Institute of Certified Public Accountants on
November 16, 2000).
At the end of the consolidated fiscal year ended
March 31, 2022, the Company eliminated all sub-groups,
and policy-reserve-matching bonds categorized for holding
purposes were reclassified as available-for-sale securities.
The Company made this change following a review of its
interest-rate risk management (conducted through strategic
asset and liability matching) that was conducted due to theCompany’s realization that under the prevailing environmentof low interest rates in Japan, continuing to hold bonds
for the purpose of matching the duration of liabilities while
securing investment income commensurate with assumed
interest rates would be prohibitively difficult.
Due to this change, securities increased by ¥81,967
million (US$669 million), while deferred tax liabilities rose by¥22,951 million (US$187 million), and net unrealized gains(losses) on available-for-sale securities, net of tax by ¥59,016
million (US$482 million). These changes had no impact in terms
of profit and loss.
2.	The Company began applying the “Accounting Standard for
Fair Value Measurement” (ASBJ Statement No. 30, July4, 2019; hereinafter called “Accounting Standard for Fair
Value Measurement”) from the beginning of the fiscal year.
In accordance with the transitional treatments prescribedin Paragraph 19 of the Accounting Standard for Fair Value
Measurement and Paragraph 44-2 of the “AccountingStandard for Financial Instruments” (ASBJ Statement No.
10, July 4, 2019), new accounting policies set forth by
the Accounting Standard for Fair Value Measurement will
be applied prospectively. The Company has observed nomaterial impact from this application of the AccountingStandard for Fair Value Measurement.

58

FUKOKU MUTUAL LIFE INSURANCE COMPANY

In addition, the Company has decided to provide
notes regarding matters such as the breakdown of financial
instruments by fair value level in the financial instruments
sections of notes to the consolidated balance sheets.
3.	Asset management of the general accounts other than theseparate accounts stipulated in Article 118 Paragraph 1 of the
Insurance Business Act is conducted on the principle of prudent
and profitable investments by the Company, considering public
and social responsibilities of the insurance business. Based on thispolicy, the Company allocates the fund, securing its liquidity, fromthe medium-to-long term viewpoints. The Company is diversifying
investments in assets such as foreign securities, stocks and realestates within the acceptable range of risk in order to enhance theprofitability, although yen-denominated interest bearing assets
including debt securities such as Japanese government bonds andloans are the cores of the portfolios under the asset liability
management. Derivatives are mainly used to hedge the market
risk regarding spot-priced assets and liabilities.
Major financial instruments including securities, loans
and derivatives are exposed to market risk and credit risk.
The Company manages its asset management risk by
establishing internal control systems including various rules
pursuant to the “Three Basic Rules related to Enterprise Risk
Management” established by the Board of Directors. Specifically,
the Company eliminates excessive risk deviating from the basic
principle and secures the safety of the assets by utilizing control
functions of the Financial and Investment Risk Management
Department towards the asset management sections,monitoring the status of market risk and credit risk periodicallyon a daily or monthly basis. In addition, the Company quantifies
the market risk and credit risk using value-at-risk (VaR) method inorder to control the possible maximum losses which may arise
from the holding assets within a certain range of risk buffers.
The carrying amounts, fair values and their relateddifferences of major financial assets and liabilities in thegeneral account were as follows:As of March 31,

2021
Millions of yen

Cash and deposits:
Cash and deposits not treated as securities�������������������
Total cash and deposits��������������������������������������������������
Call loans����������������������������������������������������������������������������
Monetary claims bought:
Claims treated as loans��������������������������������������������������
Total monetary claims bought����������������������������������������
Money held in trust:
Trading securities������������������������������������������������������������
Total money held in trust������������������������������������������������
Securities:
Trading securities������������������������������������������������������������
Held-to-maturity debt securities�������������������������������������
Policy-reserve-matching bonds���������������������������������������
Available-for-sale securities��������������������������������������������
Total securities����������������������������������������������������������������
Loans:
Policy loans���������������������������������������������������������������������
Ordinary loans�����������������������������������������������������������������
Total loans�����������������������������������������������������������������������
Assets total�����������������������������������������������������������������������������
Subordinated bonds*1 ���������������������������������������������������������
Liabilities total�������������������������������������������������������������������������
Derivative instruments*2 :Hedge accounting not applied����������������������������������������
Hedge accounting applied����������������������������������������������
Total derivative instruments�������������������������������������������

Carrying amount

Fair value

Difference¥321,613
321,613136,000¥321,613
321,613136,000

¥—
—
—

239
239

254
254

14
14

24,277
24,277

24,277
24,277——29,426
1,277,057
1,591,559
4,384,960
7,283,003

29,426
1,470,397
1,756,290
4,384,960
7,641,074—
193,340
164,730—
358,071

54,126517,293
571,420
8,336,553
241,935
241,935

54,126537,281591,4078,714,627
246,577
246,577(0)
19,987
19,987
378,073
4,642
4,642

(3,394)(37,644)¥(41,039)(3,394)(37,644)¥(41,039)——¥—*1. The fair value of derivative instruments that are currency swaps under designated hedge accounting is included in the fair valueof subordinated bonds because it is accounted for as an integral part of the subordinated bonds that are the hedge items.
*2. Assets and liabilities generated by derivative instruments are offset and presented net. Net liabilities in total are presented inbrackets.
Notes: 1. Cash, deposits (excluding financial instruments treated as securities based on “Accounting Standards for Financial
Instruments” (ASBJ Statement No. 10, March 10, 2008)) and call loans: The fair values of cash, deposits and call loans are
based on their book values since fair values approximate book values due to their short maturities.
2. Securities including deposits and monetary claims bought which are treated as securities based on “Accounting Standards
for Financial Instruments” (ASBJ Statement No. 10, March 10, 2008) and securities managed as trust assets in money
held in trust: The fair values of marketable securities are measured at the quoted market prices at the balance sheet date.
The fair values of other securities without the quoted market prices are based on the prices reasonably calculated such as
the prices offered by the information vendors or counterparty financial institutions.
Investments in unconsolidated subsidiaries and affiliates, unlisted stocks and investments in partnerships whereby
partnership assets consist of unlisted stocks whose fair values are deemed extremely difficult to obtain, are excluded
from above securities. The carrying amounts of investments in unconsolidated subsidiaries and affiliates, unlisted stocks
and investments in partnerships were ¥404 million, ¥6,224 million, and ¥29,744 million as of March 31, 2021, respectively.
3. Loans and monetary claims bought treated as loans: The fair values of policy loans are deemed to approximate bookvalues, considering estimated repayment period and interest rate conditions since their repayment deadlines have notbeen set up due to the characteristics that the loans are limited to the amount of cash surrender values. Therefore, thebook values are used as the fair values of policy loans. The fair values of floating interest rate loans among the ordinaryloans and monetary claims bought treated as loans approximate the book values because the market interest rates arereflected in future cash flows in a short period. Therefore, the fair values of floating interest rate loans and monetaryclaims bought treated as loans are based on their book values. The fair values of fixed interest rate loans are measured bydiscounting the future cash flows to the present values.
The fair values of loans from legally bankrupt borrowers, substantially bankrupt borrowers and not currently bankrupt
borrowers and monetary claims bought treated as loans are computed by deducting the amount of the allowance forpossible loan losses from the book values before direct write-offs.
4. Subordinated bonds: Subordinated bonds issued by the Company are stated at fair market values.
5. Derivative instruments:i) The fair values of the futures and options traded at the exchange are measured at the settlement price of theexchange.
ii) The fair values of forward contracts, options and swaps traded over the counter are based on the quoted prices offeredby counterparty financial institutions.
iii) The fair values of foreign currency forward contracts are determined based on the spot exchange rate and forward
contract rate.

FUKOKU MUTUAL LIFE INSURANCE COMPANY59

As of March 31,

Carrying amount

Monetary claims bought:
Claims treated as loans��������������������������������������������������
Total monetary claims bought����������������������������������������
Money held in trust:
Trading securities������������������������������������������������������������
Total money held in trust������������������������������������������������
Securities:
Trading securities������������������������������������������������������������
Held-to-maturity debt securities�������������������������������������
Policy-reserve-matching bonds���������������������������������������
Available-for-sale securities��������������������������������������������
Total securities����������������������������������������������������������������
Loans:
Policy loans���������������������������������������������������������������������
Ordinary loans�����������������������������������������������������������������
Total loans�����������������������������������������������������������������������
Assets total�����������������������������������������������������������������������������
Subordinated bonds*1 ��������������������������������������������������������
Liabilities total�������������������������������������������������������������������������
Derivative instruments*2 :Hedge accounting not applied����������������������������������������
Hedge accounting applied����������������������������������������������
Total derivative instruments�������������������������������������������

2022

2022

Millions of yen

Millions of U.S. dollars

Fair value

Difference

Carrying amount

Fair value

Difference

¥80
80

¥81
81

¥0
0

$0
0

$0
0

$0
0

25,07025,07025,07025,070

—
—

204
204

204
204

—
—

18,493
1,277,683
704,016
5,551,740
7,551,934

18,493
1,434,476
734,2445,551,740
7,738,954—
156,792
30,227—
187,020151
10,4395,752
45,361
61,703151
11,7205,999
45,361
63,231

—
1,281
246
—
1,528

51,901
504,675
556,577
8,133,662
241,935
241,935

51,901
521,484
573,386
8,337,492
245,074
245,074(0)16,80916,809203,830
3,139
3,139

424
4,123
4,547
66,456
1,976
1,976

424
4,260
4,684
68,122
2,002
2,002

(0)
137
137
1,665
25
25

(4,814)(63,528)¥(68,342)(4,814)(63,528)¥(68,342)

—
—
¥—

(39)
(519)
$(558)(39)(519)$ (558)——$—*1 The fair value of derivative instruments that are currency swaps under designated hedge accounting is included in the fair value of subordinated bonds because it is accounted for as an integral
part of the subordinated bonds that are the hedge items.
*2 Assets and liabilities generated by derivative instruments are offset and presented net. Net liabilities in total are presented in parentheses.
Notes: 1. Stocks without market prices, such as unlisted stocks, are not included in Securities of the above table. The amount of these stocks on the balance sheet as of March 31, 2022 was ¥9,603
million (US$78 million).
2. In accordance with the transitional treatments prescribed in Paragraph 27 of the “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No. 31,
July 4, 2019), investments in partnerships have not been included in Securities of the above table. As of March 31, 2022, the amount of investments in partnerships included on the balance
sheet was ¥32,380 million (US$264 million).

4.	Matters concerning the breakdown of financial instruments by fair value level are as follows.
The fair values of financial instruments are classified into the following three levels according to the observability and materiality of
inputs used to measure fair value.
Fair Value Level 1: Fair values measured using (unadjusted) quoted prices in active markets for identical assets or liabilities
Fair Value Level 2: Fair values measured using directly or indirectly observable inputs other than Level 1 inputs
Fair Value Level 3: Fair values measured using material unobservable inputs
When multiple inputs with material impact are used to measure fair value, the resulting fair value is classified into the lowest fairvalue level into which any of these inputs can be categorized.

60

FUKOKU MUTUAL LIFE INSURANCE COMPANY

(1)	Financial assets and liabilities with fair values recorded on the balance sheet
As of March 31,

2022

2022

Millions of yen
Fair value
Level 2
Level 3

Total

Millions of U.S. dollars
Fair value
Level 2¥——¥25,070
25,070¥——¥25,070
25,070

$—
—

7,859
7,859

10,634
10,634——

18,493
18,493

1,436,730

—

—

—
—
699,672
744,812
3,667

156,768
812,361—
1,129,151—

2,884,883
2,892,742
2,892,742

Classification
Level 1

Money held in trust:
Trading securities������������
Total money held in trust��
Securities:
Trading securities:
Foreign securities�������
Total trading securities��Available-for-sale securities:
Government bonds�����
Local government
bonds������������������������
Corporate bonds���������
Stocks�������������������������
Foreign securities�������
Other securities����������
Total available-for-salesecurities������������������
Total securities.���������������
Assets total.����������������������������
Derivative instruments*:
Currency-related�������������
Interest-related���������������
Stock-related�������������������
Total derivative instruments����������������������������

Level 1

Level 3

Total

$204
204

$—
—

$204
204

64
64

86
86

—
—

151
151

1,436,730

11,738——

11,738———28,139—156,768
812,361
699,672
1,902,104
3,667

—
—
5,716
6,085
29

1,280
6,637
—
9,225
—

—
—
—
229
—

1,280
6,637
5,716
15,54129

2,098,282
2,108,916
2,133,986

28,13928,13928,1395,011,305
5,029,798
5,054,868

23,571
23,63523,635

17,144
17,231
17,435

229
229
229

40,94541,096
41,301——(202)(68,160)
20
—

—
—
—

(68,160)
20
(202)

—
—
(1)

(556)
0
—

—
—
—

(556)
0
(1)

¥(202)¥(68,140)¥—¥(68,342)$(1)$(556)$—$(558)* Assets and liabilities generated by derivative instruments are offset and presented net. Net liabilities in total are presented in parentheses.
Note: In accordance with the transitional treatments prescribed in Paragraph 26 of the “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No.31, July 4,2019), investment trusts have not been included in the figures above.
As of March 31, 2022, the amount of investment trusts included on the balance sheet was ¥540,435 million (US$ 4,415 million).

(2)	Financial assets and liabilities with fair values not recorded on the balance sheet
AS of March 31,

Classification
Level 1

Monetary claims bought:
Claims treated as loansTotal monetary claimsbought�������������������������
Securities:
Held-to-maturity debt
securities:
Government bonds���Local government
bonds����������������������
Corporate bonds�������
Foreign securities�����
Total held-to-maturity
debt securities��������
Policy-reserve-matching
bonds:
Government bonds���Local government
bonds����������������������
Corporate bonds�������
Total policy-reservematching bonds������
Total securities��������������
Loans:
Policy loans�������������������
Ordinary loans���������������
Total loans���������������������
Assets total.��������������������������
Subordinated bonds����������
Liabilities total�����������������������

2022

2022

Millions of yen
Fair value
Level 2
Level 3

Millions of U.S. dollars
Fair value
Level 2

Total

Level 1

Level 3

Total

¥—

¥—

¥ 81

¥81

$—

$—

$0

$0

—

—

81

81

—

—

0

0

1,205,133——

1,205,133

9,846

—

—

9,846

—
—
20,87898,778108,022
1,663

—
—
—

98,778108,022
22,541

—
—
170

807
882
13

—
—
—

807
882
184

1,226,012

208,463—

1,434,476

10,017

1,703—

11,720290,940——

290,940

2,377

—

—

2,377

—
—

137,159
306,143——

137,159
306,143

—
—

1,120
2,501

—
—

1,120
2,501

290,940
1,516,953

443,303651,767——

734,244
2,168,720

2,377
12,394

3,622
5,325

—
—

5,999
17,719———1,516,953
—
¥—

—
—
—
651,767
245,074¥ 245,074

51,901
521,484
573,386
573,467—¥—

51,901
521,484
573,386
2,742,188
245,074¥245,074———
12,394
—
$—

—
—
—
5,325
2,002
$ 2,002

424
4,260
4,684
4,685
—
$—

424
4,260
4,684
22,4052,002$ 2,002

FUKOKU MUTUAL LIFE INSURANCE COMPANY

61

(3) Explanation of valuation techniques and inputs used tomeasure fair valuei) Securities (including deposits and monetary claims bought
which are treated as securities based on “AccountingStandards for Financial Instruments” [ASBJ Statement
No.10, July 4, 2019])
The fair values of securities for which unadjusted quoted
market prices in active markets are available (primarily
listed stocks and government bonds [including someforeign securities]) are classified as Fair Value Level 1.
Meanwhile, the fair values of securities for which quoted
market prices are available, but are not available in active
markets, are classified as Fair Value Level 2 (This category
primarily includes local government bonds and corporate
bonds [including some foreign securities]). When quoted
market prices are not available for securities, prices
obtained from third parties (mainly from information
vendors and financial institutions with which the Company
conducts business) and determined to have beenmeasured in accordance with prescribed accounting
standards are used to measure the fair values of thesesecurities. If the inputs used to measure the fair value of agiven security are material but unobservable, the resulting
fair value is classified as Fair Value Level 3.
ii) Money held in trust
In principle, the fair values of securities managed as trust
assets and classifed as money held in trust are measured
using the Company’s prescribed method for determining
the value of securities. These fair values are categorized as
Fair Value Level 2.
iii) Loans and monetary claims bought treated as loans
The fair values of policy loans are deemed to approximatebook values, considering estimated repayment period andinterest rate conditions since their repayment deadlines
have not been set up due to the characteristics that theloans are limited to the amount of cash surrender values.
Therefore, the book values are used as the fair values ofpolicy loans.
The fair values of floating interest rate loans among
the ordinary loans and monetary claims bought treated asloans approximate the book values because the market
interest rates are reflected in future cash flows in a shortperiod. Therefore, the fair values of floating interest rateloans and monetary claims bought treated as loans are
based on their book values. The fair values of fixed interest
rate loans are primarily measured by discounting the future
cash flows to the present values.
The fair values of loans from legally bankrupt
borrowers, substantially bankrupt borrowers and not
currently bankrupt borrowers and monetary claims bought
treated as loans are computed by deducting the amountof the allowance for possible loan losses from the bookvalues before direct write-offs.
If the impact of unobservable inputs used to measure
the fair values of loans and monetary claims bought
treated as loans is determined to be material, the resulting

62

FUKOKU MUTUAL LIFE INSURANCE COMPANY

fair values are classified as Fair Value Level 3. Otherwise,
they are categorized as Fair Value Level 2.
iv) S ubordinated bonds
The fair values of corporate bonds issued by the Company
are classified as Fair Value Level 2 and are measured using
the same method applied to securities.
v) Derivative instruments
The fair values of derivative instruments for which
unadjusted quoted market prices in active markets areavailable (primarily exchange-traded futures and options)are classified as Fair Value Level 1. However, mostderivative instruments are traded over the counter andhave no quoted market prices. Accordingly, prices obtained
from third parties (mainly from information vendors andfinancial institutions with which the Company conducts
business) and determined to have been measured inaccordance with prescribed accounting standards are used
to measure the fair values of these derivative instruments.
Fair values of derivative instruments that were measured
using only observable inputs or with unobservable inputs
considered to be immaterial are classified as Fair Value
Level 2. Meanwhile, fair values of derivative instrumentsthat have been measured using material unobservable
inputs are categorized as Fair Value Level 3.
(4) Information concerning fair values of financial assets andliabilities that have been recorded on the balance sheet as ofMarch 31, 2022 and classified as Fair Value Level 3i) Q uantitative information regarding material unobservable
inputsWhen measuring fair value, the Company does not adjust
quoted prices obtained from third parties and does notmake estimates related to inputs that it cannot observe.
Accordingly, quantitative information regarding material
unobservable inputs have been omitted.
ii) R econciliation of balances at the beginning of the current
fiscal year and balances as of March 31, 2022, andvaluation gains or losses recognized in the statements ofoperations for the consolidated fiscal year ended March
31, 2022.

Year ended March 31,

2022

2022

Millions of yen

Millions of U.S. dollars

Securities,
Available-for-sale securities,
Foreign securities

Balance at the beginning of the current fiscal year��������������

¥29,312Gains or losses and other comprehensive income during
the fiscal year�����������������������������������������������������������������
Values recognized as gains or losses* ����������������������������
1

Total

Securities,
Available-for-sale securities,
Foreign securities

Total¥29,312

$239

$239

(1,172)(1,172)

(9)

(9)

(10)

(10)

(0)

(0)

Values recognized as other comprehensive income* ��������

(1,162)(1,162)(9)(9)

Balance at the end of the current fiscal year������������������������

¥28,139¥28,139

$229

$229

2

*1 These amounts are included in investment income and investment expenses in the consolidated statements of operations for the fiscal year ended March 31, 2022.
*2 These amounts are included in net unrealized gains (losses) on available-for-sale securities, net of tax under other comprehensive income in the consolidated statements of comprehensive
income for the fiscal year ended March 31, 2022.

iii) Explanation of the valuation process for fair value
The Company’s asset management division is responsible
for the formulation of policies and procedures related to themeasurement of fair value and the actual measurement offair value. These fair values are subsequently checked by therisk management department to ensure their appropriatenessand compliance with relevant policies and procedures.
The Company verifies the appropriateness of the fair values it
measures using a variety of suitable methods, which include
comparing quoted market prices obtained from different
third parties; confirming techniques and inputs utilized for
calculation; and further comparing measured fair values withthe fair values of similar financial instruments.
iv) Explanation of the impact on fair value in case of change inmaterial unobservable inputs
When measuring fair value, the Company does not adjust
quoted prices obtained from third parties and does not makeestimates related to inputs that it cannot observe. Accordingly,
it has omitted information concerning impact on fair value
stemming from changes in material unobservable inputs.
5. The Company holds investment and rental properties suchas office buildings in Tokyo and other areas. The carrying
amounts and the fair values of investment and rental
properties were ¥192,277 million and ¥323,000 million as ofMarch 31, 2021, and ¥194,813 million (US$1,591 million) and¥326,189 million (US$2,665 million) as of March 31, 2022,
respectively. The fair value is mainly based on the value
calculated by the Company in accordance with real estateappraisal standards which includes some adjustments using
the reference prices.
The amount corresponding to asset retirement
obligations included in the carrying amount of investment
and rental properties were ¥417 million and ¥367 million(US$2 million) as of March 31, 2021 and 2022, respectively.
6. The amount of securities lent under lending agreements were¥465,351 million and ¥621,280 million (US$5,076 million) as
of March 31, 2021 and 2022, respectively.

7. T he total amount of credits to bankrupt borrowers, delinquentloans, delinquent loans past 3 months or more andrestructured loans, which were included in loans, was ¥3,216
million as of March 31, 2021. The details are as follows.
i) T he balance of credits to bankrupt borrowers was ¥164
million as of March 31, 2021.
Credits to bankrupt borrowers represent loans,
excluding the balances already written-off, which meetthe conditions prescribed in Article 96 Paragraph 1 item
3 and 4 of the Enforcement Regulations of the Corporate
Tax Act. Moreover, accrued interest on these loans is notrecorded as income after determining that principal of orinterest on these loans is unlikely to be collected due tothe significant delay in repayment of principal or interest
payment or for some other reasons.
ii) T he balance of delinquent loans was ¥2,522 million as ofMarch 31, 2021.
Delinquent loans are credits which accrued interest
is not recorded as income due to the same reasons as
described above, and exclude credits to bankrupt borrowers
and loans for which interest payments have been suspended
and rescheduled to assist and support the borrowers in the
restructuring of their business.
iii) T he balance of restructured loans was ¥529 million as ofMarch 31, 2021.
Restructured loans are loans for which certain
concessions favorable to borrowers, such as interest
reduction or exemption, rescheduling of due date forrepayments of principal or interest payment, waiver of claim
or other terms, have been negotiated for the purpose of
assisting and supporting the borrowers in the restructuringof their business This category excludes loans classified
as credits to bankrupt borrowers, delinquent loans anddelinquent loans past 3 months or moreiv) T here were no balance of delinquent loans past 3 months
or more as of March 31, 2021.
Delinquent loans past 3 months or more are loans
for which interest payments or repayments of principal
are delinquent for 3 months or more from the due dateunder the terms of the related loan agreements, excluding

FUKOKU MUTUAL LIFE INSURANCE COMPANY

63

those loans classified as credits to bankrupt borrowers anddelinquent loans.
The direct write-offs related to loans decreased credits tobankrupt borrowers described above by ¥0 million as ofMarch 31, 2021.
The total amount of claims against bankrupt andquasi-bankrupt obligors, claims with collection risk,delinquent loans past three months or more, andrestructured loans was ¥3,776 million (US$30 million) as
March 31, 2022. The details are as follows.
i) The balance of claims against bankrupt and quasi-bankrupt
obligors was ¥160 million (US$1 million) as of March 31, 2022.
Of which, the estimated uncollectible amount writtenoff was ¥0 million (US$6 thousand)as of March 31, 2022.
Claims against bankrupt and quasi-bankrupt obligors
are loans to borrowers who are subject to bankruptcy,
corporate reorganization or rehabilitation or other similar
proceedings and other borrowers in serious financial
difficulties.
ii) The balance of claims with collection risk was ¥1,999
million (US$16 million) as of March 31, 2022.
Claims with collection risk are loans to obligors(other than bankrupt and quasi-bankrupt obligors) withdeteriorated financial condition and results of operations
from which it is unlikely that the principal and interest on
the loans will be recovered.
iii) There was no balance of delinquent loans past threemonths or more as of March 31, 2022.
Delinquent loans past three months or more are loans
for which interest payments or repayments of principal aredelinquent for three months or more from the due dateunder the terms of the related loan agreements, excluding
those loans classified as claims against bankrupt andquasi-bankrupt obligors, claims with collection risk.
iv) The balance of restructured loans was ¥1,616 million(US$13 million) as of March 31, 2022.
Restructured loans are loans for which certain
concessions favorable to borrowers, such as interest
reduction or exemption, rescheduling of due date forrepayments of principal or interest payment, waiverof claim or other terms, have been negotiated for the
purpose of assisting and supporting the borrowers
in the restructuring of their business. This category
excludes loans classified as claims against bankrupt andquasi-bankrupt obligors, claims with collection risk, anddelinquent loans past three months or more.
8. Accumulated depreciation of tangible fixed assets were¥174,603 million and ¥179,324 million (US$1,465 million) as
of March 31, 2021 and 2022, respectively.

64

FUKOKU MUTUAL LIFE INSURANCE COMPANY

9. T
 otal assets in separate accounts provided for in Article 118of the Insurance Business Act were ¥104,979 million and¥112,487 million (US$919 million) as of March 31, 2021
and 2022, respectively. The amounts of separate accountliabilities were the same as separate account assets.
10. T he total amounts of receivables from/payables tounconsolidated subsidiaries were ¥2,980 million and ¥37
million as of March 31, 2021, and ¥2,245 million (US$18
million) and ¥39 million (US$320 thousand) as of March 31,
2022, respectively.
11. D
 eferred tax assets and deferred tax liabilities as of March
31, 2021 were ¥165,511 million and ¥185,492 million,
respectively. Valuation allowance for deferred tax assets
was ¥5,144 million.
Major components of deferred tax assets were ¥90,790
million of policy reserves, ¥51,385 million of reserve for pricefluctuation and ¥13,291 million of net defined benefit liabilities
as of March 31, 2021.
Major component of deferred tax liabilities was ¥180,162
million of net unrealized gains on available-for-sale securities
as of March 31, 2021.
The statutory tax rate and the actual effective tax rate
for the year ended March 31, 2021 were 28.0% and 3.6%,
respectively. The difference between the statutory tax rate
and the actual effective tax rate was attributable mainly to-24.4% of reserve for dividends to policyholders.
Deferred tax assets and deferred tax liabilities as ofMarch 31, 2022 were ¥175,093 million (US$1,430 million)and ¥193,317 million (US$1,579 million), respectively.
Valuation allowance for deferred tax assets was ¥5,133
million (US$41 million).
Major components of deferred tax assets were ¥99,652
million (US$814 million) of policy reserves, ¥52,554 million(US$429 million) of reserve for price fluctuation and ¥13,115
million (US$107 million) of net defined benefit liabilities as ofMarch 31, 2022.
Major component of deferred tax liabilities was ¥187,990
million (US$1,535 million) of net unrealized gains on availablefor-sale securities as of March 31, 2022.
The statutory tax rate and the actual effective tax rate
for the year ended March 31, 2022 were 28.0% and 4.8%,
respectively. The difference between the statutory tax rate
and the actual effective tax rate was attributable mainly to-24.1% of reserve for dividends to policyholders.

12. Changes in reserve for dividends to policyholders were as follows:Year ended March 31,

2021

2022

Millions of yen

Balance at the beginning of the fiscal year����������������������������������������������������������
Transfer from surplus in the previous fiscal year�������������������������������������������������
Dividend payments to policyholders during the fiscal year���������������������������������
Increase in interest����������������������������������������������������������������������������������������������
Balance at the end of the fiscal year�������������������������������������������������������������������

¥60,922
31,547(29,252)
13¥63,232

2022
Millions of
U.S. dollars¥63,232
32,744(32,580)
13¥63,411

$516
267
(266)
0
$518

13. Changes in reserve for dividends to policyholders (Fukokushinrai Life Insurance Co., Ltd.) were as follows:Year ended March 31,

2021

2022

Millions of yen

Balance at the beginning of the fiscal year����������������������������������������������������������
Dividend payments to policyholders during the fiscal year���������������������������������
Increase in interest����������������������������������������������������������������������������������������������
Provision of reserve for dividends to policyholders���������������������������������������������
Balance at the end of the fiscal year�������������������������������������������������������������������

14. The amount of stocks of unconsolidated subsidiaries were¥404 million and ¥404 million (US$3 million) as of March 31,
2021 and 2022, respectively.
15. Assets pledged as collateral as of March 31, 2021 were¥99,608 million of securities and ¥790 million of bank deposits.
Secured debts as of March 31, 2021, were ¥67,546
million. These amounts include ¥60,241 million of investments
in securities deposited and ¥61,819 million of cash received ascollateral under securities lending transactions secured by cash
as of March 31, 2021.
Assets pledged as collateral as of March 31, 2022 were¥225,740 million (US$1,844 million) of securities.
Secured debts as of March 31, 2022, were ¥166,881
million (US$1,363 million).
These amounts include ¥150,826 million (US$1,232
million) of investments in securities deposited and ¥160,928
million (US$1,314 million) of cash received as collateral
under securities lending transactions secured by cash as ofMarch 31, 2022.
16. Reserve for outstanding claims for the reinsurance contracts
provided in accordance with Article 71 Paragraph 1 of the
Enforcement Regulation of the Insurance Business Act(hereinafter called “reserve for outstanding claims forceded reinsurance”) were ¥26 million and ¥2 million (US$16
thousand) as of March 31, 2021 and 2022, respectively.
Policy reserve for the reinsurance contracts provided inaccordance with Article 71 Paragraph 1 of the Enforcement
Regulation of the Insurance Business Act (hereinafter called“policy reserve for ceded reinsurance”) were ¥49 millionand ¥42 million (US$350 thousand) as of March 31, 2021
and 2022, respectively.

¥328
(188)
0
168
¥308

2022
Millions of
U.S. dollars

¥308
(181)
0
195
¥322

$2
(1)
0
1
$2

17. T
 here were unused commitment line agreements underwhich the Company is the lender of ¥8,733 million and¥11,492 million (US$93 million) as of March 31, 2021 and
2022, respectively.
18. R
 epayments of subordinated bonds are subordinated toother obligations.
19. T he future contribution to the Life Insurance Policyholders
Protection Corporation of Japan under Article 259 of the
Insurance Business Act were estimated at ¥9,833 millionand ¥9,995 million (US$81 million) as of March 31, 2021 and
2022, respectively.
The contribution is recognized as operating expenses
when contributed.
20. M
 atters Related to Employees’ Retirement Benefits(1) O verview of Employees’ Retirement Benefit Plan
As for a defined benefit plan for office-based employees, theCompany and its consolidated subsidiaries have adefined benefit corporate pension plan and retirement lumpsum payments. As for a defined contribution plan for these
employees, the Company also has a defined contribution
pension plan.
As for a defined benefit plan for sales employees, theCompany has retirement lump-sum payments.
The Company places a retirement benefit trust in
relation to the retirement lump-sum grant plan for sales
employees.
The simplified method for calculating retirement benefit
obligation is applied to a portion of the Company and someconsolidated subsidiaries’ retirement lump-sum grant plans.

FUKOKU MUTUAL LIFE INSURANCE COMPANY

65

(2) Defined Benefit Plani) Reconciliation of beginning and end of balance of retirement benefit obligation

2021
Retirement benefit obligation at the beginning of the fiscal year������������������������
Service cost���������������������������������������������������������������������������������������������������������
Interest cost��������������������������������������������������������������������������������������������������������
Actuarial differences occurred during the fiscal year�������������������������������������������
Retirement benefit payments������������������������������������������������������������������������������
Prior service costs occurred during the fiscal year����������������������������������������������
Retirement benefit obligation at the end of the fiscal year���������������������������������

2022

Millions of yen¥88,356
3,551
526
2,881
(4,317)
54¥91,051ii) Reconciliation of beginning and end of balance of pension plan assets

2021
Pension plan assets at the beginning of the fiscal year���������������������������������������
Expected return on pension plan assets�������������������������������������������������������������
Actuarial differences occurred during the fiscal year�������������������������������������������
Contributions by the employer����������������������������������������������������������������������������
Retirement benefit payments������������������������������������������������������������������������������
Others������������������������������������������������������������������������������������������������������������������
Pension plan assets at the end of the fiscal year������������������������������������������������

As of March 31,¥91,051
3,701
541
47
(4,185)—¥91,156
As of March 31,

2022

Millions of yen¥53,996
867
6,673
2,666
(1,579)2¥62,627¥62,627
1,202
956
1,117
(1,608)4¥64,301

2022

Millions of
U.S. dollars

$743
30
4
0
(34)
—
$744

2022

Millions of
U.S. dollars

$511
9
7
9
(13)
0
$525

iii) Reconciliation of retirement benefit obligation and pension plan assets with net defined benefit liabilities and assets presented on
the consolidated balance sheet

2021
a. Funded plan retirement benefit obligation�������������������������������������������������������
b. Pension plan assets�����������������������������������������������������������������������������������������
c. (a + b) ��������������������������������������������������������������������������������������������������������������
d. Unfunded plan retirement benefit obligation���������������������������������������������������
e. Net amount of liabilities and assets presented on the consolidatedbalance sheet����������������������������������������������������������������������������������������������
f. Net defined benefit liabilities���������������������������������������������������������������������������
g. Net defined benefit assets������������������������������������������������������������������������������
h. Net amount of liabilities and assets presented on the consolidatedbalance sheet����������������������������������������������������������������������������������������������

Millions of yen

$644
(525)
118
100

28,42328,762(339)

26,85527,677
(822)

219
226
(6)

¥28,423¥26,855

$219

2021

FUKOKU MUTUAL LIFE INSURANCE COMPANY

As of March 31,

2022

Millions of yen¥3,551
526
(867)
1,905
(72)
(2)
¥5,039v) Remeasurements of defined benefit plan
Remeasurements of defined benefit plan (before tax effects) comprised the following:

66

2022

Millions of
U.S. dollars¥78,843(64,301)
14,542
12,3122021

Amortization of actuarial differences�������������������������������������������������������������������
Amortization of prior service cost������������������������������������������������������������������������
Total���������������������������������������������������������������������������������������������������������������������

2022¥78,551(62,627)
15,924
12,499iv) Breakdown of retirement benefit gains and losses

Service cost���������������������������������������������������������������������������������������������������������
Interest cost��������������������������������������������������������������������������������������������������������
Expected return on pension plan assets�������������������������������������������������������������
Amortization of actuarial differences�������������������������������������������������������������������
Amortization of prior service costs����������������������������������������������������������������������
Others������������������������������������������������������������������������������������������������������������������
Retirement benefit expenses related to defined benefit plan�����������������������������

As of March 31,¥3,701541(1,202)
1,428
(13)
(4)
¥4,450

As of March 31,

2022

Millions of yen¥5,698(126)¥5,571¥2,337(13)¥2,3232022

Millions of
U.S. dollars

$30
4
(9)
11
(0)
(0)
$36

2022

Millions of
U.S. dollars

$19
(0)
$18

vi) Accumulated remeasurements of defined benefit plan
Accumulated remeasurements of defined benefit plan (before tax effects) comprised the following:

As of March 31,

2021

2022

Millions of yen

Unrecognized actuarial differences���������������������������������������������������������������������
Unrecognized prior service cost��������������������������������������������������������������������������
Total���������������������������������������������������������������������������������������������������������������������

¥(5,111)(31)¥(5,143)¥(2,774)(45)¥(2,819)vii) Breakdown of pension plan assets
The breakdown of asset categories as a percentage of total pension plan assets were as follows:
Domestic stocks���������������������������������������������������������������������������������������������������������������������
Life insurance general account�����������������������������������������������������������������������������������������������
Foreign stocks������������������������������������������������������������������������������������������������������������������������
Domestic bonds���������������������������������������������������������������������������������������������������������������������
Assets under joint management��������������������������������������������������������������������������������������������
Foreign bonds�������������������������������������������������������������������������������������������������������������������������
Total����������������������������������������������������������������������������������������������������������������������������������������

2022
Millions of
U.S. dollars

$(22)
(0)
$(23)

As of March 31,

2021
42.6%
32.3%
8.8%
9.8%
3.3%
3.2%
100.0%

2022
41.9%
31.6%
10.2%
9.5%
3.6%
3.1%
100.0%

Within the total plan assets as of March 2021 and March 2022, retirement benefit trusts established in relation to the retirement
lump-sum payments plan for sales employees accounted for 35.4% and 35.5%, respectively.
viii) Method for setting the expected long-term rate of return
To set the expected long-term rate of return on pension plan assets, the Company takes into account the present and future
allocation of pension plan assets, and the present and expected future long-term rate of return on a variety of assets that makes
up the pension assets.
ix) Underlying actuarial assumptions
Main underlying actuarial assumptions were as follows:
Discount rate��������������������������������������������������������������������������������������������������������������������������
Expected long-term rate of return on pension plan assets
Defined benefit plan����������������������������������������������������������������������������������������������������������
Retirement benefit trust����������������������������������������������������������������������������������������������������

As of March 31,

2021
0.6%

2022
0.6%

2.5%
0.0%

3.0%
0.0%

(3) Defined Contribution Plan
The required contribution amount by the Company and its consolidated subsidiaries to the defined contribution plan were ¥334
million and ¥339 million (US$2 million) as of March 31, 2021 and 2022, respectively.

III. Notes to the Consolidated Statements of Operations
1. The total amounts of revenues and expenses in connection with unconsolidated subsidiaries were ¥93 million and ¥1,355 million forthe year ended March 31, 2021 and ¥128 million (US$1 million) and ¥1,197 million (US$9 million) for the year ended March 31,
2022, respectively.
2. For the year ended March 31, 2021, in calculating the provision of reserve for outstanding claims, a provision of reserves foroutstanding claims reinsured of ¥24 million was deducted. In calculating the reversal of policy reserves, a provision of reserves forpolicy reserves reinsured of ¥0 million was added.
For the year ended March 31, 2022, in calculating the provision of reserve for outstanding claims, a reversal of reserves foroutstanding claims reinsured of ¥24 million (US$200 thousand) was added. In calculating the provision of policy reserves, a reversal ofreserves for policy reserves reinsured of ¥6 million (US$52 thousand) was added.
3. “Others” within “Extraordinary losses” for the year ended March 31, 2021 consists of expenses associated with salary guaranties
provided to sales representatives as a countermeasure aimed at preventing the spread of COVID-19.

FUKOKU MUTUAL LIFE INSURANCE COMPANY

67

IV. Notes to the Consolidated Statements of Comprehensive Income
1. Other Comprehensive Income
The reclassification adjustments and tax effect amounts related to other comprehensive income were as follows:i) Net unrealized gains (losses) on available-for-sale securities, net of tax

Year ended March 31,

2021

2022

Millions of yen

Amount incurred during the fiscal year���������������������������������������������������������������������
Reclassification adjustments������������������������������������������������������������������������������������
Before tax adjustments����������������������������������������������������������������������������������������
Tax effects������������������������������������������������������������������������������������������������������������
Net unrealized gains (losses) on available-for-sale securities, net of tax��������������

¥256,428(17,606)
238,821(66,023)¥172,797

ii) Foreign currency translation adjustments¥27,373
1,036
28,409(7,827)¥20,581

2022

¥(91)
—
(91)
—
¥(91)

¥259
—
259
—
¥259

iii) Remeasurements of defined benefit plans, net of tax

2022
Millions of
U.S. dollars

Millions of yen

$2
—
2
—
$2

Year ended March 31,

2021

2022

¥3,738
1,833
5,571(1,559)4,011¥176,717

2022
Millions of
U.S. dollars

Millions of yen

Amount incurred during the fiscal year���������������������������������������������������������������������
Reclassification adjustments������������������������������������������������������������������������������������
Before tax adjustments����������������������������������������������������������������������������������������
Tax effects������������������������������������������������������������������������������������������������������������
Remeasurements of defined benefit plans, net of tax�����������������������������������������
Total other comprehensive income��������������������������������������������������������������������������

$223
8
232
(63)
$168

Year ended March 31,

2021
Amount incurred during the fiscal year���������������������������������������������������������������������
Reclassification adjustments������������������������������������������������������������������������������������
Before tax adjustments����������������������������������������������������������������������������������������
Tax effects������������������������������������������������������������������������������������������������������������
Foreign currency translation adjustments������������������������������������������������������������

2022
Millions of
U.S. dollars

¥909
1,414
2,323
(650)
1,673
¥22,514

$7
11
18
(5)
13
$183

V. Notes to the Consolidated Statements of Cash Flows
1. Cash and cash equivalents as of March 31, 2021 and 2022 consist of “Cash,” “Deposits in transfer account,” “Current deposits,”“Ordinary deposits,” “Notice deposits,” “Time deposits maturing within 3 months of the date of acquisition,” “Foreign currency
deposits maturing within three months of the date of acquisition,” “Negotiable certificate of deposits maturing within three monthsof the date of acquisition,” “Call loans” and “Monetary claims bought maturing within three months of the date of acquisition.”
2. Reconciliations of cash and cash equivalents in the consolidated statements of cash flows to the consolidated balance sheet accounts
were as follows:Year ended March 31,

2021

2022

Millions of yen

Cash and deposits����������������������������������������������������������������������������������������������������
Call loans������������������������������������������������������������������������������������������������������������������
Monetary claims bought�������������������������������������������������������������������������������������������
Time deposits maturing over 3 months of the date of acquisition���������������������������
Foreign currency deposits maturing over 3 months of the date ofacquisition���������������������������������������������������������������������������������������������������������������
Monetary claims bought maturing over 3 months of the date ofacquisition���������������������������������������������������������������������������������������������������������������Cash and cash equivalents���������������������������������������������������������������������������������������

68

FUKOKU MUTUAL LIFE INSURANCE COMPANY

2022
Millions of
U.S. dollars¥325,854
136,000
239(5,100)¥323,128
48,00080(3,100)$2,640
392
0
(25)

(931)

(1,029)(8)(239)¥455,823(80)¥366,999(0)$2,998Management’s Report on Internal Control over Financial Reporting

1. Matters relating to the basic framework of internal control over financial reporting
Yoshiteru Yoneyama, President of Fukoku Mutual Life Insurance Company (the Company), is responsible for the designand operation of internal control over financial reporting for the Company’s financial statements, namely, consolidatedbalance sheet and the related consolidated statements of operations, comprehensive income, cash flows, changes
in net assets and a summary of significant accounting policies and other explanatory information for the year ended
March 31, 2022, prepared in accordance with Article 110 Paragraph 2 of the Insurance Business Act. The Company
designs and operates its internal control over financial reporting in accordance with the basic framework for internal
control set forth in the Revision of Standards and Practice Standards for Management Assessment and Audit
Concerning Internal Control Over Financial Reporting (Council Opinions) issued by the Business Accounting Council of
the Financial Service Agency of Japan.
Internal control aims at achieving the objectives to a reasonable extent with the organized and integrated functionof individual components of internal control as a whole. Therefore, internal control over financial reporting cannot
always ensure the prevention or detection of misstatements in the presentation of financial reporting.
2. Matters relating to the scope of assessment, the basis date of assessment and the assessment procedures
The Company performed an assessment of internal control over financial reporting for its consolidated financial
statements as of the end of the fiscal year, March 31, 2022 in accordance with generally accepted assessment
standards in Japan for internal control over financial reporting.
In the assessment of internal control over financial reporting, the Company first assessed internal controls thathave a material impact on overall consolidated financial reporting (company-level controls) and, based on the results,
the Company selected the business processes to be assessed. In assessing those business processes, the Company
analyzed selected business processes, identified a key control that would have a material impact on the reliabilityof financial reporting, and assessed the establishment and operation with regard to the key control. The Company
assessed the effectiveness of internal control by the aforementioned procedures.
For the Company and its consolidated subsidiaries, the Company determined the scope of assessment of internal
control over financial reporting from the perspective of their materiality to the reliability of financial reporting. The
materiality to the reliability of financial reporting is determined in light of their degree of quantitative and qualitative
impact. The Company rationally determined the scope of assessment of internal controls incorporated into businessprocesses (process-level controls) based on the results of assessment of company-level controls regarding theCompany and one consolidated subsidiary. Other than those indicated above, five consolidated subsidiaries were
determined to be immaterial from quantitative and qualitative perspectives. Consequently, they are excluded from thescope of assessment of company-level controls.
With respect to the scope of assessment of process-level controls, the locations or business units were selected
in descending order of ordinary revenues (after elimination of inter-company transactions) in the previous fiscal year
until their combined amount reached about two-thirds of consolidated ordinary revenues. As a result, two companies(the Company and its consolidated subsidiary) were selected as significant locations or business units. At selectedsignificant locations and business units, business processes related to accounting items that were closely associatedwith the company's business objectives, including securities, ordinary loans and policy reserves, as well as premiumand other income and claims and other payments, which have a material impact on the calculation of policy reserves,
were determined to be within the scope of assessment. Furthermore, at selected significant locations and business
units and any other locations and business units, added to the scope of assessment were business processes relating
to important accounting items that have a high possibility of material misstatements and involve estimates andjudgments, and business processes relating to businesses or operations dealing with high-risk transactions.
3. Matters relating to the results of the assessment
As a result of performing the assessment, the Company concluded that the design and operation of internal control
over financial reporting for the Company were effective as of March 31, 2022.
4. Supplementary information
Not applicable
5. Other special information
Not applicable

			
			
			
			

May 18, 2022
Yoshiteru Yoneyama
President

Fukoku Mutual Life Insurance Company

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FUKOKU MUTUAL LIFE INSURANCE COMPANY

Corporate Organization

Employees (As of March 31, 2022)
Office Staff
2,904
Sales Representatives 10,083

Secretarial Div.
Strategic Planning Dept.
Compliance Control Dept.
Corporate Risk Management Dept.
Credit Analysis Div.
General Affairs Dept.
Independent Auditors

Audit & Supervisory
Board

Chiba Newtown Office Administrative Div.
Personnel Dept.
Market Planning Dept.
Retail Management Dept.
Sales Administration Dept.

Audit & Supervisory
Board Members' OfficeMarket Developing Dept.
Strategic Shinkin Bank Promotion Dept.
Strategic Market Promotion Dept.

Board of Representative
Members of Policyholders

Board of Directors

Pension Consulting Dept.
Customer Service Headquarters
Corporate Customer Service Dept.

Nomination Committee of
Candidates for
Representative Members

Secretariat for Nomination
Committee of Candidates for
Representative Members

Chief Actuary

Individual Customer Service Dept.
Underwriting and Medical Dept.

Human Resource
Development
Headquarters

Claims Dept.
Policy Administration Dept.
Policy Service Dept.

Board of Full-time Directors

Operation and System Planning Dept.
Claim Inspection Div.
Securities Investment Dept.

Council

Credit Investment and Loans Dept.
Separate Accounts Management Div.
Securities Administrative Dept.
Investment Planning Dept.
Real Estate Dept.
Accounting Dept.
Actuarial Dept.
Internal Auditing Dept.
Affiliated Business Dept.
Committee for Editing History of the Company(As of July 5, 2022)

62 Branch Offices

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Corporate Information

Directors, Audit & Supervisory
Board Members, and Executive
Officers

President and Chief Executive Officer

Audit & Supervisory Board Member (Standing)

Yoshiteru Yoneyama*

Shinji Nakao

Deputy President and Executive Officer

Audit & Supervisory Board Member (Standing)Yuuki Sakurai

Hideaki Shigematsu

Director and Senior Managing Executive Officer

Managing Executive Officer

Toshikatsu Hayashi

Takeshi Oomori

Director and Managing Executive Officer

Managing Executive Officer

Takehiko Watabe

Ichiro Yamada

Director and Managing Executive Officer

Executive Officer

Yasuyuki Kitamura

Naoyuki Asami

Director

Executive Officer

Masanori Yanagi**

Mitsuhiro Hoshino

Director

Executive Officer

Hiroshi Sato**

Kenichi Yoshioka

Director and Executive Officer

Executive Officer

Keiichi Kurota

Yuuji Yoshida

Director and Executive Officer

Executive Officer

Naoyuki Torii

Yoshiyuki Suzuki

Director and Executive Officer

Executive Officer

Naoki Sunamoto

Hirotaka Kurihara

Director and Executive Officer

Executive Officer

Takeshi Kondou

Hideki Matsushiro

Audit & Supervisory Board Member

Executive Officer

Yoshizumi Nezu***

Osamu Eguchi

Audit & Supervisory Board Member*Representative Director

Kyohei Takahashi*****External Directors***External Audit & Supervisory Board Member

Audit & Supervisory Board Member

Kunio Otani***78

FUKOKU MUTUAL LIFE INSURANCE COMPANY(As of July 5, 2022)

Directory
Fukoku Mutual Life Insurance Company(Uchisaiwaicho head office)2-2, Uchisaiwaicho 2-chome, Chiyoda-ku, Tokyo 100-0011, Japan
Phone: +81-3-3508-1101(Chiba Newtown head office)10, Otsuka 2-chome, Inzai City, Chiba 270-1352, Japan
Phone: +81-476-47-5111
Fukoku Life International (U.K.) Ltd.
1st Floor, 19 Great Winchester Street, London, EC2N 2JA, U.K.
Phone: +44-20-7283-1331(From left: J. Doran, K. Sato, E. Noma, T. Keevil, T. Taguchi
and Y. Suzuki)

Fukoku Life International (America) Inc.
Times Square Tower, 7 Times Square, 35th Floor, New York,NY 10036, U.S.A.
Phone: +1-212-221-7760(From left: A. Chang, T. Takano, A. Hashimoto, T. Yamamoto,S. Lester and M. Xu)

Fukoku Life Investments Singapore Pte. Ltd.
80 Robinson Road #16-04 Singapore 068898
Phone: +65-6220-8308(From left: K. Matsumoto, Y. Takubo, I. Chan, J. Morizane,
M. Wan and Q. Wei Ren)

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