November 24, 2022

Financial Results for the Six Months Ended September 30, 2022
Fukoku Mutual Life Insurance Company (President: Yoshiteru Yoneyama) announces
financial results for the six months ended September 30, 2022.

[Contents]
1. Business Highlights ……………………………………………..……………………

P. 1

2. Investment Results of General Account Assets …………………………………...….

P. 3

3. Non-consolidated Balance Sheets ………………………….………………….……..

P. 10

4. Non-consolidated Statements of Operations ……………………………………..…..

P. 11

5. Non-consolidated Statements of Changes in Net Assets ……..……………….…..

P. 12

6. Breakdown of Ordinary Profits (Fundamental Profit) ……………….………..…..…

P. 25

7. Disclosed Claims Based on Insurance Business Act ………………….…..……….

P. 26

8. Solvency Margin Ratio ………………………….………………………………..…..

P. 27

9. Status of Separate Account …………………………….………………………….…

P. 28

10. Status of the Company, Subsidiaries and Affiliates …………………………….……

P. 35

Attached: Supplementary Materials for the Six Months Ended September 30, 2022

Fukoku Mutual Life Insurance Company

1. Business Highlights(1) Policies in Force, New Policies and Surrendered and Lapsed Policies(i) Policies in Force
As of March 31, 2022

As of September 30, 2022

Number of policies

AmountNumber of policies(Thousands)(100 millions of yen)Amount(Thousands)

Changes(%, Pre-FYE)(100 millionsof yen)Changes(%, Pre-FYE)

Individual insurance

3,165

223,809

3,174

100.3

223,349

99.8

Individual annuities

583

22,692

573

98.2

22,231

98.0

3,749

246,501

3,747

100.0

245,58199.6

Group insurance—

173,407——

174,656100.7

Group annuities—

22,898——23,022

100.5

Subtotal

Notes: 1. Policy amounts for individual annuities are equal to (a) the funds to be held at the time annuity payments are to commence for anannuity for which annuity payments have not yet commenced and (b) the amount of policy reserve for an annuity for which payments
have commenced and (c) special riders for term insurance attached to individual annuities.
Notes: 2. Policy amount in force for group annuities is equal to the amount of outstanding policy reserve.

(ii) New Policies

Six months ended
September 30, 2021

Total

Net increase by
conversion

New business

Number of policies

AmountAmountAmount(Thousands)(100 millions of yen)(100 millions of yen)(100 millions of yen)

Individual insurance

166

8,042

6,065

1,977

Individual annuities

3

108

112

(3)

Subtotal

169

8,151

6,177

1,973

Group insurance

—

74

74

—

Group annuities

—

9

9

—

Total
Six months ended
September 30, 2022

Number of policies(Thousands)

AmountChanges(%, YoY)

Net increase by
conversion

New business(100 millionsof yen)AmountChanges(%, YoY)(100 millionsof yen)AmountChanges(%, YoY)(100 millionsof yen)Changes(%, YoY)

Individual insurance

168

101.2

7,118

88.5

5,671

93.5

1,447

73.2

Individual annuities

3

85.2

95

87.2

98

87.9

(3)

—

Subtotal

171

100.9

7,213

88.5

5,770

93.4

1,443

73.1

Group insurance

—

—

83

112.3

83

112.3

—

—

Group annuities

—

—

164

1,666.0164

1,666.0——

Notes: 1. Number of new policies is the sum of new business and policies after conversion.
Notes: 2. Amount of new policies for individual annuities, both new business and net increase by conversion, is equal to the funds to be held at thetime annuity payments are to commence and special riders for term insurance attached to individual annuities.
Notes: 3. Amount for group annuities is equal to the initial premium payment.

(iii) Surrendered and Lapsed Policies (Individual Insurance and Individual Annuities)
Six months ended
September 30, 2021

Six months ended
September 30, 2022
Changes(%, YoY)

Amount of surrender and lapse(100 millions of yen)

5,790

5,356

92.5

Surrender and lapse ratio (%)

2.34

2.17

(0.17)

Notes: 1. The amount of lapse is not offset by the amount of reinstatement which was once lapsed.
Notes: 2. The column of "Changes" of surrender and lapse ratio is increase-decrease points over year.

1

Fukoku Mutual Life Insurance Company

(2) Annualized Premiums(i) Policies in Force(100 millions of yen, %)As of March 31, 2022

As of September 30, 2022
Changes (%, Pre-FYE)

Individual insurance

2,638

2,634

99.8

Individual annuities

1,093

1,079

98.7

Total

3,731

3,713

99.5

1,154

1,163

100.8

Medical coverage and living benefits(ii) New Policies(100 millions of yen, %)Six months ended September 30, 2021

Six months ended September 30, 2022
Changes (%, YoY)

Individual insurance

63

66

104.6

Individual annuities

3

2

86.2

Total

66

68

103.8

33

37

109.5

Medical coverage and living benefits

Notes: 1. Annualized premiums are calculated by using coefficients based on the premium payment method. (For single premium contracts, theamount is calculated by dividing the premium by the coverage period.)
Notes: 2. Figures for medical coverage and living benefits represent portion of annualized premium corresponding to the medical benefits(hospitalization benefits and surgery benefits, etc.), living benefits (nursing care benefits, etc.) and premium waiver benefits, in which
disability cause is excluded but causes such as specific illness are included.
Notes: 3. New policies include net increase by conversion.

2

Fukoku Mutual Life Insurance Company

2. Investment Results of General Account Assets(1) Asset Composition(Millions of yen, %)Cash, deposits, and call loans

As of March 31, 2022

As of September 30, 2022

AmountAmount% of total

202,459

2.8 %% of total

207,956

2.9 %

80

0.0

—

—

26,0700.4

25,9360.4

6,173,529

84.8

6,081,127

84.5

Domestic bonds

2,884,480

39.6

3,085,613

42.9

Domestic stocks

768,95410.6

750,841

10.4

Foreign securities

2,335,951

32.1

2,064,803

28.7

Foreign bonds

1,823,435

25.1

1,574,920

21.9

512,516

7.0

489,882

6.8

184,143

2.5

179,869

2.5

553,305

7.6

540,601

7.5

Policy loans

48,6290.7

48,106

0.7

Ordinary loans

504,675

6.9

492,4946.8

241,164

3.3

239,665

3.3——

20,7500.3

Monetary claims bought
Money held in trust
Securities

Foreign stocks and other securities
Other securities
Loans

Real estate
Deferred tax assets
Others82,725

1.1

84,031

1.2

Allowance for possible loan losses(2,515)(0.0)(1,132)(0.0)

7,276,821

100.0

7,198,936

100.0

2,629,067

36.1

2,245,783

31.2

Total
Foreign currency denominated assets

Note: The amount of real estate is equal to the amounts of land, buildings, and construction in progress.

(2) Changes (Increase/Decrease) in Assets(Millions of yen)Six months ended September 30, 2021

Six months ended September 30, 2022

21,322

5,496

Cash, deposits, and call loans
Monetary claims bought

(15)

(80)

327

(133)

112,371(92,402)

Domestic bonds(4,648)201,132

Domestic stocks

12,716(18,113)

Foreign securities

89,072(271,148)

Foreign bonds

41,132(248,514)

Foreign stocks and other securities

47,939(22,633)

15,231(4,273)

Money held in trust
Securities

Other securities
Loans(5,204)(12,704)

Policy loans

(979)

(523)

Ordinary loans(4,224)(12,180)

1,212(1,499)—20,750

Others

(795)

1,305

Allowance for possible loan losses

1,331

1,383

130,551(77,884)

80,736(383,284)

Real estate
Deferred tax assets

Total
Foreign currency denominated assets

Note: The amount of real estate is equal to the amounts of land, buildings, and construction in progress.

3

Fukoku Mutual Life Insurance Company

(3) Investment Income(Millions of yen)Six months ended September 30, 2021

Six months ended September 30, 2022

82,183

81,2791

0Interest and dividends on securities

68,542

67,465Interest on loans

4,088

4,025

Income from real estate for rent

9,447

9,621

Interest, dividends and other income
Interest on deposits

Other interest and dividends

104

166

Gains on money held in trust, net

357—

Gains on trading securities, net

—

756

7,390

18,025

Gains on sales of domestic bonds

5,642

3,083

Gains on sales of domestic stocks

598

5,539

Gains on sales of foreign securities

1,149

9,403

Gains on redemption of securities

65

5,480

Foreign exchange gains, net

—

4,622

1,328

323

118

114

91,444

110,603

Gains on sales of securities

Reversal of allowance for possible loan losses
Other investment income
Total(4) Investment Expenses(Millions of yen)Six months ended September 30, 2021

Six months ended September 30, 2022

2,203

2,229

Losses on money held in trust, net—

116

Losses on trading securities, net

78

—

1,413

12,735Losses on sales of domestic bonds

415

6,030

Losses on sales of domestic stocks

183—

Losses on sales of foreign securities

814

6,704

386

3,373

Losses on valuation of domestic stocks

268

189

Losses on valuation of foreign securities

117

3,184

293

16,090Foreign exchange losses, net

1,125

—

Depreciation of real estate for rent and other assets

2,373

2,391

Other investment expenses

5,457

6,182

Total

13,333

43,119Interest expenses

Losses on sales of securities

Losses on valuation of securities

Losses on derivative instruments, net(5) Net Investment Income(Millions of yen)Six months ended September 30, 2021

Six months ended September 30, 2022

78,111

67,484

Net investment income

4

Fukoku Mutual Life Insurance Company

(6) Net Valuation Gains/Losses on Trading Securities(Millions of yen)

As of March 31, 2022
As of September 30, 2022
Carrying value on the Net valuation gains/losses included Carrying value on the Net valuation gains/losses included
balance sheet
in the statement of operationsbalance sheet
in the statement of operations

Trading securities

43,5632,581

35,774(165)

Note: The table above includes money held in trust for trading purpose.

(7) Fair Value Information on Securities (other than trading securities)

Held-to-maturity debt securities

As of March 31, 2022
Gains/Losses
Book value Fair value
Gains
760,097
847,316
87,21887,218(Millions of yen)
As of September 30, 2022
Gains/Losses
Book value Fair value
Losses
Gains
Losses—764,273
840,927
76,65376,820166

Domestic bonds

737,795

824,774

86,97986,979—739,728

816,451

76,72376,82096

Foreign bonds

22,302

22,541

238

238

—

24,54524,475

(69)

—

69

Policy-reserve-matching bonds

—

—

—

—

—

—

—

—

—

—

Domestic bonds

—

—

—

—

—

—

—

—

—

—

Foreign bonds

—

—

—

—

—

—

—

—

—

—

Investments in subsidiaries and affiliates

—

—

—

—

—

—

—

—

—

—

Available-for-sale securities

4,625,982

5,288,571

662,589

733,325

70,736

4,689,665

5,197,458

507,792

703,583

195,790

Domestic bonds

2,038,626

2,146,685

108,059

138,789

30,7302,320,237

2,345,885

25,647

121,271

95,623

Domestic stocks

347,574

699,525

351,951

354,992

3,041

349,213

681,415332,202

336,009

3,807

Foreign securities

2,109,727

2,282,658

172,931

209,125

36,193

1,887,461

2,011,509

124,048

218,934

94,885

Foreign bonds

1,713,754

1,782,639

68,884102,110

33,225

1,498,691

1,539,537

40,846

128,825

87,979Foreign stocks and other securities

395,972

500,019

104,047

107,015

2,968

388,770

471,972

83,202

90,108

6,906

Other securities

130,053

159,700

29,64730,417770

132,753

158,648

25,89427,368

1,473

Money held in trust

—

—

—

—

—

—

—

—

—

—

Monetary claims bought

—

—

—

—

—

—

—

—

—

—

Negotiable certificate of deposits

—

—

—

—

—

—

—

—

—

—

Others

—

—

—

—

—

—

—

—

—

—

Total

5,386,079

6,135,887

749,807820,544

70,736

5,453,939

6,038,385

584,446

780,403

195,957

Domestic bonds

2,776,421

2,971,460

195,038

225,768

30,7303,059,965

3,162,336

102,371

198,091

95,720

Domestic stocks

347,574

699,525

351,951

354,992

3,041

349,213

681,415332,202

336,009

3,807

Foreign securities

2,132,029

2,305,200

173,170

209,364

36,193

1,912,006

2,035,985

123,978

218,934

94,955

Foreign bonds

1,736,056

1,805,180

69,123102,349

33,225

1,523,236

1,564,012

40,776

128,825

88,049Foreign stocks and other securities

395,972

500,019

104,047

107,015

2,968

388,770

471,972

83,202

90,108

6,906

Other securities

130,053

159,700

29,64730,417770

132,753

158,648

25,89427,368

1,473

Money held in trust

—

—

—

—

—

—

—

—

—

—

Monetary claims bought

—

—

—

—

—

—

—

—

—

—

Negotiable certificate of deposits

—

—

—

—

—

—

—

—

—

—

Others

—

—

—

—

—

—

—

—

—

—

Notes: 1. The table above includes assets which are considered appropriate to deem as securities under the Financial Instruments andExchange Law.
Notes: 2. The securities and investment partnerships without fair value are not included in the table above.

• Book value of securities and investment partnerships without fair value are as follows:(Millions of yen)

Investments in subsidiaries and affiliates
Available-for-sale securities
Domestic stocks
OthersTotal

As of March 31, 2022

As of September 30, 2022

64,78737,973
6,198
31,774
102,760

64,78738,895
6,196
32,699103,682

Note: In this table, domestic and overseas investment partnerships are included in “Others” within“Available-for-sale securities.” However, unrealized gains on available-for-sale securities corresponding
to these holdings by domestic and overseas investment partnerships (¥3,606 million as of March 31, 2022
and ¥4,874 million as of September 30, 2022) are included in their balance sheet carrying amounts.

5

Fukoku Mutual Life Insurance Company

(8) Fair Value Information on Money Held in Trust(Millions of yen)

As of March 31, 2022
Carrying valueon the balance
sheet

Fair value

26,07026,070

Money held in trust

As of September 30, 2022

Gains/losses
Gains

LossesCarrying valueon the balance
sheet

—

—

25,936—

Gains/losses
Fair value

25,936

Gains

Losses———• Money held in trust for trading purpose(Millions of yen)

As of March 31, 2022
Carrying valueon the balance sheet

Money held in trust fortrading purpose

As of September 30, 2022

Net valuation gains/losses
included in the statementsof operations

25,070Net valuation gains/losses
included in the statementsof operations

Carrying valueon the balance sheet

024,936(117)• Money held in trust classified as held-to-maturity, policy-reserve-matching and available-for-sale(Millions of yen)

As of March 31, 2022

As of September 30, 2022

Gains/losses
Book value

Gains/losses

Fair value

Book value
Gains

LossesFair value
Gains

LossesMoney held in trust for
held-to-maturity

—

—

—

—

—

—

—

—

—

—

Money held in trust forpolicy-reserve-matching

—

—

—

—

—

—

—

—

—

—

Money held in trust foravailable-for-sale

—

—

—

—

—

—

—

—

—

—

6

Fukoku Mutual Life Insurance Company

Reference: Fair Value Information on Derivative Instruments (General Account)(i) Gains and Losses on Derivatives(Millions of yen)

As of March 31, 2022

Interest-related Currency- related

Stock- related

Bond- related

Others

Total

Hedge accounting applied—(63,528)———(63,528)

Hedge accounting not applied20(4,632)

(202)

—

—

(4,814)

Total

20(68,160)

(202)

—

—

(68,342)Interest- related Currency- related

Stock- related

Bond- related

As of September 30, 2022

Others

Total

Hedge accounting applied—(12,957)———(12,957)

Hedge accounting not applied558(3,044)9——(2,476)

Total

558

(16,001)9－—(15,433)

Note: Gains and losses from applying fair value hedge accounting (currency-related losses of ¥63,528 million as of March 31, 2022, andcurrency-related losses of ¥12,957 million as of September 30, 2022) included in gains and losses with hedge accounting applied, and gains
and losses with hedge accounting not applied are reported in the statements of operations.

(ii) Interest-related Transactions(Millions of yen)

As of March 31, 2022
Notional amount/contract value
Fair valueOver 1 year

As of September 30, 2022
Notional amount/contract value
Fair valueOver 1 year

Gains
(Losses)

Gains(Losses)Over-the-counter transactions
Yen interest rate swaption contracts
Sold—

Receipt fixed, payment floating
[

[

—

— ]
—

Payment fixed, receipt floating

—
—

— [

—

— ]
—

— ]

—

—

[

—
—

—

—

—

—

—

692

558

—

— ]

Bought—Receipt fixed, payment floating[
Payment fixed, receipt floating—— ]150,000

[

—
—

— [

30,000— ]150,000

133 ]

154

Total

20 [
20

—

133 ]

30,000558

Note: Figures in [ ] are option premiums which are included in the balance sheet.

7

Fukoku Mutual Life Insurance Company

(iii) Currency-related Transactions(Millions of yen)

As of March 31, 2022
Notional amount/
Fair value
contract valueOver 1 year

Over-the-counter transactions
Currency forward contracts
Sold
U.S. dollar
Euro
Australian dollar
Swedish krona
Canadian dollar
British pound

—

—

—

[

24,257
17 ]
24,257
17 ]
—
—]
—
—]

—

[

—
—]
138,259
198 ]
138,259
198 ]—Currency options
Sold
Call
[
U.S. dollar[
Canadian dollar
Put
BoughtCall[
Put[
U.S. dollar[(67,629)(38,129)(6,163)(15,518)(2,130)(5,621)(66)

561,854289,979
127,330
111,70915,735
10,603
6,495

—
—
—
—
—
—
—

576,598
301,440
132,610
109,990
15,531
10,5696,456(14,743)(11,460)(5,279)
1,719
204
34
39

—

—

—

—

—

—

—

356

(339) [

1,225

(956)

356

(339) [

1,186

(1,001)

38

44

—

—

—

—

231

(300)

231

(300)
(16,001)— 1,072,835— 668,660— 116,852— 167,031—
35,719—82,160—2,410

1,005,205
630,531
110,689
151,51233,58876,5392,343

Bought

Gains(Losses)

As of September 30, 2022
Notional amount/
Fair value
contract valueOver 1 year

—
—

—

— [

34,420268 ]
23,410185 ]11,010
83 ]

—

— [

—
—]

—

—

— [

—
—]
34,580532 ]
34,580
532 ]

—

—
—

6

(191) [

6(191) [
(68,160)

Total

—

Gains
(Losses)———

Notes: 1. Forward exchange rates are used for exchange rates as of September 30, 2022.
Notes: 2. Figures in [ ] are option premiums which are included in the balance sheet.
Notes: 3. Regarding assets and liabilities which are denominated in foreign currencies but have fixed settlement in yen under currency forward
contracts and are reported in yen amounts in the balance sheet, those currency forward contracts are excluded from the table above.

(iv) Stock-related Transactions(Millions of yen)

As of March 31, 2022
Notional amount/contract value
Fair valueOver 1 year

Exchange-traded transactions
Stock index option
Sold
Call
[
Put
[
Bought
Call
[
Put
[

—
—]
—
—]

—

—
—]
35,100
210 ]

—

—

Gains
(Losses)

— [

—
—

— [

—

— [

—
9

Total

(202) [
(202)

As of September 30, 2022
Notional amount/contract value
Fair valueOver 1 year

—
—]
—
—]

—

—
—]
31,300
84 ]

—

Gains
(Losses)

—

—

—

—

—

—

94

9
9

—

—

Note: Figures in [ ] are option premiums which are included in the balance sheet.

(v) Bond-related Transactions

No ending balance as of March 31, 2022 and September 30, 2022.

8

Fukoku Mutual Life Insurance Company

Reference: Fair Value of Real Estate (Land and Leaseholds)(Millions of yen)

As of March 31, 2022
Carrying valueon the balance sheet

150,197

Fair value

297,512

As of September 30, 2022
Gains (Losses)

Carrying valueon the balance sheet

147,314150,126

Fair value

Gains (Losses)

299,995

149,869

Note: Fair value is based on the appraisal value by the real-estate appraiser, the appraisal value for property tax and the road rate.

9

Fukoku Mutual Life Insurance Company

3. Non-consolidated Balance Sheets(Millions of yen)

As of March 31, 2022

Assets:Cash and deposits
Call loans
Monetary claims bought
Money held in trust
Securities:[Government bonds][Local government bonds][Corporate bonds][Stocks][Foreign securities]
Loans:
Policy loans
Ordinary loans
Tangible fixed assets
Intangible fixed assets
Agency receivables
Reinsurance receivables
Other assets
Prepaid pension costs
Deferred tax assets
Allowance for possible loan losses
Total assets

160,149
48,00080
26,0706,277,599[2,102,521][102,771][704,056][795,801][2,388,284]
553,305
48,629504,675
245,405
27,82115
135
52,328912—(2,515)
7,389,308

Liabilities:
Policy reserves:
Reserve for outstanding claims
Policy reserve
Reserve for dividends to policyholders
Reinsurance payables
Subordinated bonds
Other liabilities:
Corporate income tax payable
Lease obligations
Asset retirement obligations
Rest of the other liabilities
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
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 of real 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
10

As of September 30, 2022

141,561
73,000—25,936
6,181,707[2,418,441][100,908][590,812][776,706][2,114,949]
540,601
48,106492,494
244,431
28,00342
46
51,2691,270
20,750(1,132)
7,307,489

As of March 31, 2022

As of September 30, 2022

5,886,412
22,9855,800,015
63,41187
241,935
276,328
2,767
553
2,355
270,652
3,400
24,850176,670
25,061
14,183
6,648,929

5,935,986
34,926
5,821,017
80,04260
241,935
304,556
104
449
2,306
301,695—
25,311
178,480—
14,1436,700,473

12,000116,000
112
127,222
3,370
123,852
4,800
20,00041,000206
767
57,078255,334
480,860
4,184
485,044740,379
7,389,308

12,000116,000
112
103,966
3,463
100,503
7,200
20,00041,000205
767
31,330232,078
370,7134,225
374,938
607,016
7,307,489

Fukoku Mutual Life Insurance Company

4. Non-consolidated Statements of Operations(Millions of yen)Six months ended
September 30, 2021

Six months ended
September 30, 2022

Ordinary revenues:
Premium and other income[Premium 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][Foreign exchange gains, net]
[Gains on separate accounts, net]
Other ordinary revenues[Reversal of reserve for claims and other payments]

252,175[252,154]
95,314[82,183][357][—][7,390][—][3,869]4,909[—]

296,046[295,966]
110,603[81,279][—][756][18,025][4,622][—]
7,666[3,400]Total ordinary revenues

352,398

414,316

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
Investment expenses[Interest expenses][Losses on money held in trust, net]
[Losses on trading securities, net]
[Losses on sales of securities][Losses on valuation of securities][Losses on derivative instruments, net]
[Foreign exchange losses, net]
[Losses on separate accounts, net]
Operating expenses
Other ordinary expenses

203,953[44,778][73,919][49,835][23,995][11,308]
34,414259
34,147
6
13,333[2,203][—][78][1,413][386][293][1,125][—]44,855
11,793271,144[93,943][73,733][67,134][24,159][12,063]
32,94911,941
21,001
6
45,919[2,229][116][—][12,735][3,373][16,090][—][2,799]44,855
12,228

Total ordinary expenses

308,348

407,098

Ordinary profits

44,0507,218

Extraordinary gains:
Gains on disposal of fixed assets

10

1

Total extraordinary gains

101

Extraordinary losses:
Losses on disposal of fixed assets
Impairment losses
Provision of reserve for price fluctuation

249
8
1,897

73
0
1,810

Total extraordinary losses

2,155

1,883

Surplus before income taxes

41,905

5,336

Income taxes:
Current
Deferred

8,133
(865)

194
(2,430)Total income taxes

7,267(2,236)

Net surplus for the period

34,637

7,572

11

Fukoku Mutual Life Insurance Company

5. Non-consolidated Statements of Changes in Net Assets[For the six months ended September 30, 2021](Millions of yen)Foundation funds, surplus and others
Surplus
Other surplus

Balance at the beginning of the current period

Foundation
funds

Accumulated
foundation
funds
redeemedReserve forrevaluation

12,000116,000

112

Reserve for
Legal
Reserve foradvancedreserve for redemption Reserve for Accumulated depreciation
future losses of foundation dividend fund for price of real estate
allowances fluctuation
funds
for tax
purpose

3,271

2,400

20,00041,000207

Total
surplusTotal
foundation
funds, surplus
and others

59,102

126,748

254,860(32,744)(32,744)(32,744)

(99)

—

—

(102)

(102)

(102)

34,637

34,637

34,637(2,400)

—

—

1

—

—

0

0

0

Other Unappropriatedreserves
surplus

767

Changes in the current period
Additions to reserve for dividends topolicyholders
Additions to legal reserve for future losses

99

Payment of interest on foundation funds
Net surplus for the current period
Additions to reserve for redemption offoundation funds

2,400

Reversal of reserve for advanced
depreciation of real estate for tax purpose(1)

Reversal of revaluation reserve for land,
net of tax
Net changes, excluding foundation funds,
surplus and others
Total changes in the current period
Balance at the end of the current period

—

—

—

99

2,400

—

—

(1)

—

(706)

1,791

1,791

12,000116,000

112

3,370

4,800

20,00041,000206

767

58,396

128,539

256,651

Valuation and translation adjustments
Net
unrealized
Revaluation
gains (losses)
reserve foron availableland, net offor-saletax
securities, netof taxBalance at the beginning of the current period

458,287

4,185

Total
valuation andtranslation
adjustments

Total net

462,473

717,333

assetsChanges in the current period
Additions to reserve for dividends topolicyholders(32,744)

Additions to legal reserve for future losses—

Payment of interest on foundation funds(102)

Net surplus for the current period

34,637

Additions to reserve for redemption offoundation 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

20,695(0)

20,695

20,695

Total changes in the current period

20,695(0)

20,69522,486

Balance at the end of the current period

478,983

4,185

483,168

739,820

12

Fukoku Mutual Life Insurance Company

[For the six months ended September 30, 2022](Millions of yen)Foundation funds, surplus and others
Surplus
Other surplus
Total
surplusTotal
foundation
funds, surplus
and others

57,078127,222

255,334(30,726)(30,726)(30,726)

(93)

—

—

Payment of interest on foundation funds

(102)

(102)

(102)

Net surplus for the current period

7,572

7,572

7,572

(2,400)

—

—

1

—

—

Balance at the beginning of the current period

Foundation
funds

Accumulated
foundation
funds
redeemedReserve forrevaluation

12,000116,000

112

Reserve for
Legal
Reserve foradvancedreserve for redemption Reserve for Accumulated depreciation
future losses of foundation dividend fund for price of real estate
allowances fluctuation
funds
for tax
purpose

3,370

4,800

20,00041,000206

Other Unappropriatedreserves
surplus

767

Changes in the current period
Additions to reserve for dividends topolicyholders
Additions to legal reserve for future losses

93

Additions to reserve for redemption offoundation funds

2,400

Reversal of reserve for advanced
depreciation of real estate for tax purpose(1)

Net changes, excluding foundation funds,
surplus and others
Total changes in the current period
Balance at the end of the current period

—

—

—

93

2,400

—

—

(1)

—

(25,747)(23,256)(23,256)

12,000116,000

112

3,463

7,200

20,00041,000205

767

31,330103,966

232,078

Valuation and translation adjustments
Net
unrealized
Revaluation
gains (losses)
reserve foron availableland, net offor-saletax
securities, netof taxBalance at the beginning of the current period

480,860

4,184

Total
valuation andtranslation
adjustments

Total net

485,044740,379

assetsChanges in the current period
Additions to reserve for dividends topolicyholders(30,726)

Additions to legal reserve for future losses—

Payment of interest on foundation funds(102)

Net surplus for the current period

7,572

Additions to reserve for redemption offoundation funds—

Reversal of reserve for advanced
depreciation of real estate for tax purpose—

Net changes, excluding foundation funds,
surplus and others(110,147)

40(110,106)(110,106)

Total changes in the current period(110,147)

40(110,106)(133,362)

Balance at the end of the current period

370,7134,225

374,938

607,016

13

Fukoku Mutual Life Insurance Company

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 have been prepared from the accounts maintained by
Fukoku Mutual Life Insurance Company (the “Company”) in accordance with the provisions set forth in the Insurance
Business Act of Japan and its related rules and regulations and in conformity with accounting 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
under accounting principles generally accepted in Japan but is presented herein as additional information.
Amounts of less than one million yen have been rounded down. As a result, the totals do not add up.

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 in money held in trust, is as follows:i) Trading securities are stated at fair market value. Costs of their sales are determined by the moving averagemethod.
ii) Held-to-maturity debt securities are stated at amortized cost under the straight-line method, cost being

determined by the moving average method.
iii) Investments in subsidiaries and affiliates are stated at cost, cost being determined by the moving averagemethod.
iv) Available-for-sale securities are stated at fair market value based on the market prices at the end of the current

period. 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 are considered
as adjustments of interest are stated at amortized cost (straight-line method) determined by the moving
average method. However, stocks and other securities without quoted market prices are stated at cost, 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) The Company revalued the land used in the operations based on the Act for Revaluation of Land (Act No.34
promulgated on March 31, 1998). The difference between fair value and book value resulting from therevaluation, net of related taxes, is recorded as revaluation reserve for land as a separate component of net assets
and the related tax is recorded as deferred tax liabilities for land revaluation.
• Date of revaluation: March 31, 2002
• 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
Ordinance of the Act for Revaluation of Land (Government Ordinance No.119 promulgated on March 31,
1998) and the road rate set forth in Article 2 item 4 of the said Ordinance with certain reasonable adjustments.

14

Fukoku Mutual Life Insurance Company

(4) Depreciation of tangible fixed assets is calculated by the following methods.
• Tangible fixed assets (excluding lease assets): Declining-balance method
However, buildings (excluding building attachments and structures acquired on or before March 31, 2016)acquired on 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 overthree years.
(5) Assets 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) Allowance for possible loan losses is provided in accordance with the Company’s standards of self-assessment
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 ofcredits 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 asnecessary considering the borrowers’ ability to pay, within the amounts after deductions of the amounts
expected to be collected through the disposal of collateral or the execution of guarantees.
iii) For the credits of borrowers other than the above, the Company provides the amounts calculated bymultiplying 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 departments in accordance with the Company’s standards ofself-assessment on credit quality. The results of the assessment are reviewed by the audit department, which is
independent of business-related divisions. Subsequently, the allowance for possible loan losses is provided basedon the results of these assessments.
For the credits of legally bankrupt borrowers and substantially bankrupt borrowers, the amounts
remaining after deductions of collateral value or the amounts collectible through the execution of guarantees are
written-off directly from the borrowers’ balances as the estimated uncollectible amounts. The amount written-off
as of September 30, 2022 was ¥0 million.
(7) Reserve for employees’ retirement benefits and prepaid pension costs are presented based on projected benefit
obligations and pension plan assets at the balance sheet date.
The Company uses the following methods for amortizing 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

15

Fukoku Mutual Life Insurance Company

(8) Reserve for price fluctuation is calculated in accordance with Article 115 of the Insurance Business Act.
(9) Hedge accounting is based on “Accounting Standards for Financial Instruments” (ASBJ Statement No. 10, July4, 2019). The Company applies a fair value hedge accounting as a hedge against the risk of foreign exchange
fluctuation in relation to bonds and others denominated in foreign currencies, and a designated hedge accounting(“Furiate shori”) for foreign currency swaps as a hedge against the risk 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 fairvalue or cash flows of hedged items and hedging instruments is mainly applied.
(10) Accounting of unrecognized actuarial differences and unrecognized prior service costs related to employees’
retirement benefits is different to the methods used for these items in the consolidated financial statements.
(11) The Company accounts for consumption taxes by the tax-exclusion 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, are deferred as prepaid expenses and amortized equally over five years. Consumption taxes other thandeferred 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 the amount of payments that have been received.
Of premium incomes that have been received, the portion corresponding to the period that has yet to passas of September 30, 2022 is accumulated as policy reserve in accordance with Article 116 of the Insurance
Business Act and Article 69 Paragraph 1 Item 2 of the Enforcement Regulation of the Insurance Business Act.
Premium incomes associated with the acceptance of group annuities are recorded as amounts equivalent
to the policy reserve received when accepting the transfers of these 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 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
Regulation of 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 the occurrence of cause for payment has not beenreported but the Company recognizes that insured payment has already occurred as of September 30, 2022.
Claims and other payments associated with the outgoing transfer of group annuities are recorded as
amounts equivalent to the policy reserve transferred when recognizing the transfers of these group annuities.
(14) Policy reserve of the Company is accumulated in accordance with the methods stated in the statement ofcalculation 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 the insurance contracts for which the insurer’s responsibilities havestarted as of September 30, 2022.
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 theCommissioner of Financial Services Agency (Ministry of Finance Ordinance 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.
16

Fukoku Mutual Life Insurance Company

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 actual assumptions for long-term future cash flows (such asassumed incidence rate and assumed interest rate) deviate from those assumptions set in the “statement ofcalculation procedures for Insurance Premiums and Policy Reserves” and policy reserve is considered to bepossibly insufficient to cover the future performance of obligations, additional policy reserve is required toaccumulate in accordance with Article 69 Paragraph 5 of the Enforcement Regulation of the Insurance BusinessAct. The following reserves have been established in compliance with this regulation.
• Among individual annuity insurance policies with an assumed 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 the assumed interest rate to 1.00% and funded additional policy reserves. As of September 30, 2022,
the balance of these policy reserves was ¥71,897 million.
• Among whole life insurance policies with assumed interest rates of 5.00% or higher, the Company has
reduced assumed interest rates for policies with premiums that have been paid in full (excluding policies thathave been converted into paid-up or extended policies, single premium policies, and policies for which
premiums have been waived) to 1.00% and funded additional policy reserves. As of September 30, 2022, thebalance of these policy reserves was ¥107,035 million.
• 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 September 30, 2022, the balance of these policy reserves was ¥77 million.
Contingency reserves, one of the components of policy reserve, are accumulated pursuant to Article 116of the Insurance Business Act and Article 69 Paragraph 1 Item 3 of the 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 the following 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 thelease term with no residual value.

2. The Company began applying the Implementation Guidance on Accounting Standard for Fair Value Measurement(ASBJ Guidance No. 31, June 17, 2021; hereinafter called “Implementation Guidance on Accounting Standard for
Fair Value Measurement”) from the beginning of the interim accounting period. In accordance with the transitional
treatments prescribed in Paragraph 27-2 of the Implementation Guidance on Accounting Standard for Fair Value
Measurement, new accounting policies set forth by the Implementation Guidance on Accounting Standard for Fair
Value Measurement will be applied prospectively. As a result, certain investment trusts that had previously been
carried on the interim balance sheet at acquisition cost are stated at fair value on the interim balance sheet from the six
months ended September 30, 2022.The Company has observed no material impact from this application of the
Implementation Guidance on Accounting Standard for Fair Value Measurement.

17

Fukoku Mutual Life Insurance Company

3. The carrying amounts, fair values and their related differences of major financial assets and liabilities in the generalaccount as of September 30, 2022 were as follows:
Carrying amount

Fair value(Millions of yen)
Difference

Money held in trust:
Trading securities..............................................

24,93624,936—

Total money held in trust..................................

24,93624,936—

Trading securities..............................................

10,838

10,838—

Held-to-maturity debt securities........................

764,273

840,927

76,653Available-for-sale securities..............................

5,197,458

5,197,458—

Total securities..................................................

5,972,570

6,049,223

76,653

Policy loans.......................................................

48,106

48,106(0)

Ordinary loans...................................................

492,494503,721

11,226

Total loans.........................................................

540,601

551,827

11,226

Assets total.......................................................…......

6,538,107

6,625,988

87,880Subordinated bonds*1.........................……..…..........

241,935

240,988(946)

Liabilities total….....................................…......…....

241,935

240,988(946)

Hedge accounting not applied................…........

(2,476)(2,476)—

Hedge accounting applied……..........................

(12,957)(12,957)—

Total derivative instruments....................….......

¥(15,433)¥(15,433)¥—

Securities:

Loans:*2

Derivative instruments :*1 The fair value of derivative instruments that are currency swaps under designated hedge accounting is included in thefair value of subordinated bonds because it is accounted for as an integral part of the subordinated bonds that are thehedge items.
*2 Assets and liabilities generated by derivative instruments are offset and presented net. Net liabilities in total arepresented 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 September 30, 2022 was ¥73,983 million.
Notes: 2. In accordance with Paragraph 24-16 of the Implementation Guidance on Accounting Standard for Fair Value
Measurement, investments in partnerships are not included in Securities of the above table. As of September 30,
2022, the amount of investments in partnerships included on the balance sheet was ¥34,573 million.
Notes: 3. Investment trusts with real estate as investment trust properties which have applied Paragraph 24-9 of the
Implementation Guidance on Accounting Standard for Fair Value Measurement are included in Securities.

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 andmateriality 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 thelowest fair value level into which any of these inputs can be categorized.

18

Fukoku Mutual Life Insurance Company

(1) Financial assets and liabilities with fair values recorded on the balance sheet as of September 30, 2022
(Millions of yen)Classification

Fair value
Level 2

Level 1

Level 3

Total

Money held in trust:
Trading securities........................…….....

—

24,936—24,936

Total money held in trust..........................

—

24,936—24,936

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

—

10,838—

10,838

Total trading securities…………….…

—

10,838—

10,838Government bonds……………….…...

1,690,528——

1,690,528

Local government bonds………….….

—

94,808—94,808

Corporate bonds……………….….….

—

560,547—

560,547

Stocks………………………………...

681,415——

681,415

Foreign securities…………………….

713,670

1,270,965

26,8732,011,509

Other securities………………………

41,397113,200—

154,598

Total available-for-sale securities……

3,127,012

2,039,522

26,873

5,193,408

Total securities........................…….....

3,127,012

2,050,360

26,873

5,204,246

Assets total.....................………………..........

3,127,012

2,075,297

26,873

5,229,183

Currency-related………………..............

—(16,001)—(16,001)

Interest-related………………………….

—

558

—

558

Stock-related……………………............

9

—

—

9

Total derivative instruments...….............

¥9¥(15,443)¥—¥(15,433)

Securities:
Trading securities:

Available-for-sale securities:*

Derivative instruments :* Assets and liabilities generated by derivative instruments are offset and presented net. Net liabilities in total arepresented in parentheses.
Note: Investment trusts with real estate as investment trust properties that have applied Paragraph 24-9 of the Implementation
Guidance on Accounting Standard for Fair Value Measurement are not included in the figures above. The amount of
the investment trusts on the balance sheet as of September 30, 2022 was ¥4,049 million. Reconciliation of balancesfrom the beginning of the current fiscal year to balances as of September 30, 2022 for the investment trusts were as
follows:(Millions of yen)

Balance at the beginning of the current period…..

¥3,654

Changes in net unrealized gains or losses…….

395

Balance at the end of the current period…………

¥4,04919

Fukoku Mutual Life Insurance Company

(2) Financial assets and liabilities with fair values not recorded on the balance sheet as of September 30, 2022
(Millions of yen)Classification

Fair value
Level 2

Level 1

Level 3

Total

Securities:
Held-to-maturity debt securities:——

Local government bonds………..…….

786,641
—

7,489

—

786,6417,489

Corporate bonds….…………….….….

—

22,320—22,320Foreign securities..................................

24,475——24,475

Total held-to-maturity debt securities...

811,116

29,810—840,927

811,116

29,810—840,927

Policy loans.................................….........

——

48,106

48,106

Ordinary loans..........................................

——

503,721503,721

Total loans................................…............

——

551,827

551,827

Assets total.........................................…….......

811,116

29,810551,827

1,392,755

Subordinated bonds—

240,988—

240,988

Liabilities total..........………………….….......

¥—¥240,988¥—¥240,988

Government bonds……………….…...

Total securities.............................…….
Loans:(3) Explanation of valuation techniques and inputs used to measure fair valuei) Securities (including deposits and monetary claims bought which are treated as securities based on“Accounting Standards 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 some foreign 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 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 securities. If
the inputs used to measure the fair value of a given security are material but unobservable, the resulting fairvalue 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 aremeasured using the Company's prescribed method for determining the value of securities. These fair values
are categorized as Fair Value Level 2.
iii) Loans

The fair values of policy loans are deemed to approximate book values, considering estimated repayment
period and interest rate conditions since their repayment deadlines have not been set up due to thecharacteristics that the loans are limited to the amount of cash surrender values. Therefore, the book values
are used as the fair values of policy loans.
The fair values of floating interest rate loans among the ordinary loans approximate the book values
because the market interest rates are reflected in future cash flows in a short period. Therefore, the fairvalues of floating interest rate loans are based on their book values. The fair values of fixed interest rateloans are primarily measured by discounting the future cash flows to the present values.

20

Fukoku Mutual Life Insurance Company

The fair values of loans from legally bankrupt borrowers, substantially bankrupt borrowers and not
currently bankrupt borrowers are computed by deducting the amount of the allowance for possible loan
losses from the book values before direct write-offs.
If the impact of unobservable inputs used to measure the fair values of loans is determined to bematerial, 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 aremeasured 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,most derivative instruments are traded over the counter and have no quoted market prices. Accordingly,
prices obtained from third parties (mainly from information vendors and financial institutions with which
the Company conducts business) and determined to have been measured in accordance with prescribedaccounting standards are used to measure the fair values 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 have been 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 September 30, 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 from the beginning of the current fiscal year to balances as of September 30,

2022, and valuation gains or losses recognized in the statements of operations for the six months ended
September 30, 2022.
(Millions of yen)
Securities,
Available-for-sale securities,
Foreign securities

Total

Balance at the beginning of the current period…..

¥28,139¥28,139

Gains or losses during the current priod………

(5)

(5)

Values recognized as gains or loses …….…

(5)

(5)

Changes in net unrealized gains or losses…….

(1,260)(1,260)

Balance at the end of the current period…………

¥26,873¥26,873** These amounts are included in investment income and investment expenses in the non-consolidated
statements of operations for the six months ended September 30, 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 the actual measurement of fair value. These fair values aresubsequently checked by the risk management department to ensure their appropriateness and compliancewith 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

21

Fukoku Mutual Life Insurance Company

techniques and inputs utilized for calculation; and further comparing measured fair values with the fairvalues 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
not make 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. Notes related to the fair value of investment and rental properties are omitted as no significant change has occurredsince the previous fiscal year-end.

6. The amount of securities lent under lending agreements was ¥730,293 million as of September 30, 2022.

7. The total amount of claims against bankrupt and quasi-bankrupt obligors, claims with collection risk, delinquent loans
past three months or more, and restructured loans was ¥2,320 million as September 30, 2022. The details are as
follows.
i) The balance of claims against bankrupt and quasi-bankrupt obligors was ¥130 million as of September 30,

2022.
Of which, the estimated uncollectible amount written-off was ¥0 million as of September 30, 2022.
Claims against bankrupt and quasi-bankrupt obligors are loans to borrowers who are subject tobankruptcy, corporate reorganization or rehabilitation or other similar proceedings and other borrowers inserious financial difficulties.
ii) The balance of claims with collection risk was ¥578 million as of September 30, 2022.

Claims with collection risk are loans to obligors (other than claims against bankrupt and quasi-bankrupt
obligors) with deteriorated 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 three months or more as of September 30, 2022.

Delinquent loans past three months or more are loans for which interest payments or repayments ofprincipal are delinquent for three months or more from the due date under the terms of the related loan
agreements, excluding those loans classified as claims against bankrupt and quasi-bankrupt obligors, claims
with collection risk.
iv) The balance of restructured loans was ¥1,612 million as of September 30, 2022.

Restructured loans are loans for which certain concessions favorable to borrowers, such as interest
reduction or exemption, rescheduling of due date for repayments of principal or interest payment, waiver ofclaim 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, and delinquent loans past three months or more.

8. Accumulated depreciation of tangible fixed assets were ¥180,997 million as of September 30, 2022.

22

Fukoku Mutual Life Insurance Company

9. Total assets in separate accounts provided for in Article 118 of the Insurance Business Act were ¥108,552 million as
of September 30, 2022. The amounts of separate account liabilities were the same as separate account assets.

10. Changes in reserve for dividends to policyholders for the six months ended September 30, 2022 were as follows:(Millions of yen)

Balance at the beginning of the current period…...............................................

¥63,411

Transfer from surplus in the previous fiscal year...............................................

30,726

Dividend payments to policyholders during the current period…..…………...

(14,102)

Increase in interest....................................................……………………..........

6

Balance at the end of the current period.............................................................

¥80,042

11. The amount of stocks of subsidiaries was ¥64,787 million as of September 30, 2022.

12. Assets pledged as collateral as of September 30, 2022 were ¥261,018 million of securities.
Secured debts as of September 30, 2022, were ¥252,376 million.
These amounts include ¥225,999 million of investments in securities deposited and ¥246,336 million of cash
received as collateral under securities lending transactions secured by cash as of September 30, 2022.

13. 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”) was ¥1 million as of September 30, 2022.
Policy reserve for the reinsurance contracts provided in accordance with Article 71 Paragraph 1 of the
Enforcement Regulation of the Insurance Business Act (hereinafter called “policy reserve for ceded reinsurance”)
was ¥21 million as of September 30, 2022.

14. There were unused commitment line agreements under which the Company is the lender of ¥8,910 million as of
September 30, 2022.

15. Repayments of subordinated bonds are subordinated to other obligations.

23

Fukoku Mutual Life Insurance Company

III. Notes to the Non-consolidated Statements of Operations

1. The details of gains on sales of securities for the six months ended September 30, 2022 were as follows:(Millions of yen)Domestic bonds....................................................................................................

¥3,083

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

5,539

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

9,403

2. The details of losses on sales of securities for the six months ended September 30, 2022 were as follows:(Millions of yen)Domestic bonds…………....................................................................................

¥6,030Foreign securities.................................................................................................

6,704

3. The details of losses on valuation of securities for the six months ended September 30, 2022 were as follows:(Millions of yen)Domestic stocks and others..................................................................................

¥189

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

3,184

4. For the six months ended September 30, 2022, in calculating the provision of reserve for outstanding claims, aprovision of reserve for outstanding claims for ceded reinsurance of ¥0 million was deducted. In calculating theprovision of policy reserves, a reversal of policy reserve for ceded reinsurance of ¥1 million was added.

5. Breakdown of interest, dividends and other income for the six months ended September 30, 2022 were as follows:(Millions of yen)Interest on deposits……........................................................................................

¥0Interest and dividends on securities.......................................................................

67,465Interest on loans....................................................................………………….....

4,025

Income from real estate for rent.............................................................................

9,621

Other interest and dividends...................................................................................

166

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

¥81,279

24

Fukoku Mutual Life Insurance Company

6. Breakdown of Ordinary Profits (Fundamental Profit)(Millions of yen)

Fundamental profit
Capital gains
Gains on money held in trust, net
Gains on trading securities, net
Gains on sales of securities
Gains on derivative instruments, net
Foreign exchange gains, net
Other capital gains
Capital losses
Losses on money held in trust, net
Losses on trading securities, net
Losses on sales of securities
Losses on valuation of securities
Losses on derivative instruments, net
Foreign exchange losses, net
Other capital losses
Net capital gains (losses)
Fundamental profit plus net capital gains (losses)
Non-recurring gains
Reinsurance income
Reversal of contingency reserve
Reversal of specific allowance for possible loan losses
Others
Non-recurring losses
Reinsurance premiums
Provision for contingency reserve
Provision of specific allowance for possible loan losses
Provision of allowance for specified overseas loans
Write-offs of loans
Others
Non-recurring gains (losses)
Ordinary profits

A

B
A+B

C
A+B+C

Six months ended
September 30, 2021

Six months ended
September 30, 2022

36,117
15,597
249
—
7,390
—
—
7,957
3,743
—
523
1,413
386
293
1,125
—
11,85447,972
3
—
—
3
—
3,925
—
463
—
—
—
3,462
(3,922)44,05011,34932,611—
498
18,025
—
4,622
9,464
32,668189—
12,735
3,373
16,090—279(57)
11,292
3,601
—
—
201
3,400
7,675
—
1,517
—
—
—
6,158
(4,074)
7,218

Notes: 1. Fundamental profit and capital gains/losses for both the six months ended September 30, 2021 and the six months ended
September 30, 2022 are calculated based on revised standards.
Notes: 2. Other items break down as follows.
(Millions of yen)

Fundamental profit
Interest, dividends, and other income from gains/losses on money held in trust
Interest, dividends, and other income from gains/losses on trading securities
Foreign exchange-related hedging costs categorized under foreign exchange
gains/losses
Interest, dividends, and other investment expenses from gains/losses oncancellation of investment trusts
Portion of gains/losses on redemption of securities attributable to foreignexchange fluctuations
Other capital gains
Foreign exchange-related hedging costs categorized under foreign exchange
gains/losses
Interest, dividends, and other investment expenses from gains/losses oncancellation of investment trusts
Portion of interest, dividends, and other income attributable to foreign exchange
fluctuations in gains/losses on redemption of securities
Portion of gains/losses on redemption of securities attributable to foreignexchange fluctuations
Other capital losses
Interest, dividends, and other investment expenses from gains/losses oncancellation of investment trusts
Non-recurring gains
Reversal of reserve for claims and other payments
Non-recurring losses
Provision of policy reserves in accordance with Article 69, Paragraph 5 of the
Enforcement Regulations of the Insurance Business Act.

25

Six months ended
September 30, 2021
(7,404)107445

Six months ended
September 30, 2022
(8,852)73
258(1,265)(3,983)(2,777)279(3,914)(5,480)

7,957

9,464

1,265

3,983

2,777

—

3,914

—

—

5,480

—

279

—

279

—
—
3,462

3,400
3,400
6,158

3,462

6,158

Fukoku Mutual Life Insurance Company

7. Disclosed Claims Based on Insurance Business Act(Millions of yen)

As of March 31, 2022

Claims against bankrupt and quasi-bankrupt obligors

As of September 30, 2022

143

130

1,999

578

—

—

1,616

1,612

3,759
[0.32%]

2,320[0.18%]

Claims against normal obligors

1,175,569

1,274,487

Total

1,179,328

1,276,808

Claims with collection risk

Delinquent loans past three months or more
Restructured loans
Subtotal[Percentage of total]

Notes: 1. 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.
Notes: 2. Claims with collection risk are loans to obligors (other than claims against 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.
Notes: 3. Delinquent loans past three months or more are loans for which interest payments or repayments of principal are delinquent
for three months or more from the due date under the terms of the related loan agreements, excluding those loans classified
as claims against bankrupt and quasi-bankrupt obligors, claims with collection risk.
Notes: 4. Restructured loans are loans for which certain concessions favorable to borrowers, such as interest reduction or exemption,
rescheduling of due date for repayments 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 restructuring of their business. This category
excludes loans classified as claims against bankrupt and quasi-bankrupt obligors, claims with collection risk, and delinquentloans past three months or more.
Notes: 5. Claims against normal obligors are all other loans.

26

Fukoku Mutual Life Insurance Company

8. Solvency Margin Ratio(Millions of yen)

As ofMarch 31, 2022

Total solvency margin

(A)

As of
September 30, 2022

1,917,896

1,777,631

Foundation funds and surplus

221,320

213,606

Reserve for price fluctuation

176,670

178,480

Contingency reserve

155,458

156,975820

698(Net unrealized gains (losses) on securities (before tax)
and deferred hedge gains (losses) (before tax)) × 90%

599,576

461,400

Net unrealized gains on real estate × 85%

140,830

143,001

Excess amount of policy reserve based on full-time Zillmer method

386,741

390,040

Qualifying subordinated debt

241,935

241,935——

Deductible items(46,783)(46,783)

Others41,327

38,276

310,783

321,498

General allowance for possible loan losses

The amount of “excess amount of policy reserve based on full-time Zillmer method”
and “qualifying subordinated debt” excluded from the calculation of solvency margin

Total amount of risk √(𝑅1 + 𝑅8 )2 + (𝑅2 + 𝑅3 + 𝑅7 )2 + 𝑅4

(B)

Insurance risk

R1

21,81021,710

3rd sector insurance risk

R8

9,963

10,139Assumed investment yield risk

R2

22,182

21,705

Minimum guarantee risk

R7

—

—

Investment risk

R3

280,252

291,279

Business risk

R4

6,684

6,896

1,234.2%

1,105.8%

Solvency margin ratio
(A)
× 100
(1/2) × (B)Notes: 1. Above figures are calculated based on the provisions of Articles 86 and 87 of the Enforcement Regulation of the Insurance Business Act
and Ministry of Finance Notification No. 50, 1996.
Notes: 2. “Deductible items” represent the capital increase to the subsidiary, Fukokushinrai Life Insurance Co., Ltd.
Notes: 3. “Minimum guarantee risk” is calculated by standard method.

Reference: Economic Solvency Ratio
As ofMarch 31, 2022

Economic Solvency Ratio

228.9%

As of
September 30, 2022

223.0%

Note: Economic solvency ratio (ESR) is an indicator of an insurance company’s soundness and indicates whether or not a company has
sufficient capital to cover its risks based on market-value assessment of its assets and liabilities. The Company calculates its ESR
according to European methodology. Figures for some insurance liabilities and risks current as of September 30, 2022 have been
calculated using simplified methods.

27

Fukoku Mutual Life Insurance Company

9. Status of Separate Account(1) Separate Account Assets by Products(Millions of yen)

As of March 31, 2022

As of September 30, 2022

AmountAmountIndividual variable insurance——

Individual variable annuities

25

24Group annuities

112,462

108,528

Total

112,487

108,552(2) Individual Variable Insurance (Separate Account)
The Company has not sold the individual variable insurance.

(3) Individual Variable Annuities (Separate Account)(i) Policies in Force(Millions of yen except number of policies)

As of March 31, 2022

Number ofpolicies
Individual variable annuities
Total

As of September 30, 2022

AmountNumber ofpolicies

Amount

7

18

7

18

7

18

7

18

(ii) Breakdown of Separate Account Assets for Individual Variable Annuities(Millions of yen)

As of March 31, 2022
AmountAs of September 30, 2022

Percentage

AmountPercentage

Cash, deposits, call loans

4

18.3%

4

18.3%

Securities

20

81.7

19

81.7

Domestic bonds

—

—

—

—

Domestic stocks

—

—

—

—

Foreign securities

—

—

—

—

Foreign bonds

—

—

—

—

Foreign stocks and other securities

—

—

—

—

20

81.7

19

81.7

Loans

—

—

—

—

Others————Allowance for possible loan losses

—

—

—

—

Total

25

100.0

24

100.0

Other securities

28

Fukoku Mutual Life Insurance Company

(iii) Investment Income and Expenses of Separate Account for Individual Variable Annuities(Millions of yen)Six months ended
September 30, 2021

Six months ended
September 30, 2022

AmountAmountInterest, dividends and other income

00Gains on sales of securities——

Gains on valuation of securities

10

8

Gains on redemption of securities——

Gains on derivative instruments——

Foreign exchange gains, net——

Other investment income——

Losses on sales of securities——

Losses on valuation of securities

98

Losses on redemption of securities——

Losses on derivative instruments——

Foreign exchange losses, net——

Other investment expenses——

Net investment income

1(0)(iv) Fair Value Information on Securities in Separate Account for Individual Variable Annuities• Net Valuation Gains/Losses on Trading Securities(Millions of yen)

As of March 31, 2022

Carrying valueon the balancesheet
Trading securities

As of September 30, 2022

Net valuation
gains/losses
included in thestatements ofoperations

20

(0)

Carrying valueon the balance
sheet
19

Net valuation
gains/losses
included in thestatements ofoperations(0)

Note: The Company had no balances of money held in trust and derivative instruments.

29

Fukoku Mutual Life Insurance Company

Reference: Fair Value Information on Securities (Total of General Account and Separate Account)
Net Valuation Gains/Losses on Trading Securities(Millions of yen)

As of March 31, 2022
As of September 30, 2022
Carrying value on the Net valuation gains/losses included Carrying value on the Net valuation gains/losses included
balance sheet
in the statement of operationsbalance sheet
in the statement of operations
Trading securities

147,633

4,388

136,355(5,149)Note: The table above includes money held in trust for trading purpose.

Fair Value Information on Securities (other than trading securities)(Millions of yen)
As of March 31, 2022

As of September 30, 2022

Gains/Losses

Book value Fair value

Gains

LossesBook value Fair value

Gains/Losses
Gains

Losses

Held-to-maturity debt securities

760,097

847,316

87,21887,218—764,273

840,927

76,65376,820166

Domestic bonds

737,795

824,774

86,97986,979—739,728

816,451

76,72376,82096

Foreign bonds

22,302

22,541

238

238

—

24,54524,475

(69)

—

69

Policy-reserve-matching bonds

—

—

—

—

—

—

—

—

—

—

Domestic bonds

—

—

—

—

—

—

—

—

—

—

Foreign bonds

—

—

—

—

—

—

—

—

—

—

Investments in subsidiaries and affiliates

—

—

—

—

—

—

—

—

—

—

Available-for-sale securities

4,625,982

5,288,571

662,589

733,325

70,736

4,689,665

5,197,458

507,792

703,583

195,790

Domestic bonds

2,038,626

2,146,685

108,059

138,789

30,7302,320,237

2,345,885

25,647

121,271

95,623

Domestic stocks

347,574

699,525

351,951

354,992

3,041

349,213

681,415332,202

336,009

3,807

Foreign securities

2,109,727

2,282,658

172,931

209,125

36,193

1,887,461

2,011,509

124,048

218,934

94,885

Foreign bonds

1,713,754

1,782,639

68,884102,110

33,225

1,498,691

1,539,537

40,846

128,825

87,979Foreign stocks and other securities

395,972

500,019

104,047

107,015

2,968

388,770

471,972

83,202

90,108

6,906

Other securities

130,053

159,700

29,64730,417770

132,753

158,648

25,89427,368

1,473

Money held in trust

—

—

—

—

—

—

—

—

—

—

Monetary claims bought

—

—

—

—

—

—

—

—

—

—

Negotiable certificate of deposits

—

—

—

—

—

—

—

—

—

—

Others

—

—

—

—

—

—

—

—

—

—

Total

5,386,079

6,135,887

749,807820,544

70,736

5,453,939

6,038,385

584,446

780,403

195,957

Domestic bonds

2,776,421

2,971,460

195,038

225,768

30,7303,059,965

3,162,336

102,371

198,091

95,720

Domestic stocks

347,574

699,525

351,951

354,992

3,041

349,213

681,415332,202

336,009

3,807

Foreign securities

2,132,029

2,305,200

173,170

209,364

36,193

1,912,006

2,035,985

123,978

218,934

94,955

Foreign bonds

1,736,056

1,805,180

69,123102,349

33,225

1,523,236

1,564,012

40,776

128,825

88,049Foreign stocks and other securities

395,972

500,019

104,047

107,015

2,968

388,770

471,972

83,202

90,108

6,906

Other securities

130,053

159,700

29,64730,417770

132,753

158,648

25,89427,368

1,473

Money held in trust

—

—

—

—

—

—

—

—

—

—

Monetary claims bought

—

—

—

—

—

—

—

—

—

—

Negotiable certificate of deposits

—

—

—

—

—

—

—

—

—

—

Others

—

—

—

—

—

—

—

—

—

—

Notes: 1. The table above includes assets which are considered appropriate to deem as securities under the Financial Instruments andExchange Law.
Notes: 2. The securities and investment partnerships without fair value are not included in the table above.

[Held-to-maturity Debt Securities](Millions of yen)
As of September 30, 2022

As of March 31, 2022
Carrying valueon the balance sheet

Securities whose fair value exceeds the
carrying value on the balance sheet
Domestic bonds
Foreign bonds
Securities whose fair value does not exceed
the carrying value on the balance sheet
Domestic bonds
Foreign bonds

Fair value

Differences

Carrying valueon the balance sheet

Fair value

Differences

760,097

847,316

87,218725,273

802,093

76,820737,795
22,302824,774
22,541

86,979238

725,273—

802,093—

76,820————38,99938,833

(166)

—
—

—
—

—
—

14,45424,545

14,35824,475

(96)
(69)

30

Fukoku Mutual Life Insurance Company

[Policy-reserve-matching Bonds](Millions of yen)
As of March 31, 2022
Carrying valueon the balance sheet

As of September 30, 2022

Fair value

Differences

Carrying valueon the balance sheet

Fair value

Differences

Bonds whose fair value exceeds the carrying
value on the balance sheet
Domestic bonds

—

—

—

—

—

—

—

—

—

—

—

—

Foreign bonds
Bonds whose fair value does not exceed thecarrying value on the balance sheet
Domestic bonds

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Foreign bonds[Available-for-sale Securities](Millions of yen)
As of March 31, 2022
Carrying value on
the balance sheet

Differences

3,271,278

4,004,603

733,325

1,411,343
310,630
1,443,319
1,091,898
351,420
105,985————

1,550,132
665,623
1,652,444
1,194,009
458,435
136,402————

1,354,704
627,283
36,943
666,408
621,855
44,552
24,068————Book value

Securities whose carrying value on the balance
sheet exceeds the book value
Domestic bonds
Domestic stocks
Foreign securities
Foreign bonds
Foreign stocks
Other securities
Money held in trust
Monetary claims bought
Negotiable certificate of deposits
OthersSecurities whose carrying value on the balance
sheet does not exceed the book value
Domestic bonds
Domestic stocks
Foreign securities
Foreign bonds
Foreign stocks
Other securities
Money held in trust
Monetary claims bought
Negotiable certificate of deposits
Others

As of September 30, 2022
Carrying value on
the balance sheet

Differences

2,597,954

3,301,537

703,583

138,789354,992
209,125
102,110
107,015
30,417————

1,102,924
303,874
1,096,008
798,315
297,692
95,147————1,224,195
639,883
1,314,942
927,141
387,801
122,516————

121,271
336,009
218,934
128,825
90,10827,368————1,283,967(70,736)

2,091,711

1,895,920(195,790)

596,553
33,902630,214588,629
41,58423,297————(30,730)(3,041)(36,193)(33,225)(2,968)
(770)
—
—
—
—

1,217,313
45,339791,452
700,375
91,07737,605————

1,121,689
41,531
696,567
612,395
84,171
36,131————(95,623)(3,807)(94,885)(87,979)(6,906)(1,473)————

Book value• Book value of securities and investment partnerships without fair value are as follows:(Millions of yen)
As of March 31, 2022

As of September 30, 2022

Investments in subsidiaries and affiliates

64,78764,787Available-for-sale securities

37,97338,895

Domestic stocks

6,198

6,196

Foreign stocks——

31,77432,699OthersTotal
102,760
103,682
Note: In this table, domestic and overseas investment partnerships are included in “Others” within“Available-for-sale securities.” However, unrealized gains on available-for-sale securities
corresponding to these holdings by domestic and overseas investment partnerships (¥3,606 million
as of March 31, 2022 and ¥4,874 million as of September 30, 2022) are included in their balance
sheet carrying amounts.

31

Fukoku Mutual Life Insurance Company

Reference: Fair Value Information on Derivative Instruments (Total of General Account and Separate Account)(i) Gains and Losses on Derivatives(Millions of yen)Interest- related

Currency- related

Stock- related

Bond- related

OthersHedge accounting applied—(63,528)———(63,528)

Hedge accounting not applied20(4,632)

(202)

—

—

(4,814)

Total

20(68,160)

(202)

—

—

(68,342)

As of September 30, 2022

Interest- related

Currency- related

Stock- related

Bond- related

OthersHedge accounting applied—(12,957)———(12,957)

Hedge accounting not applied558(3,044)9——(2,476)

Total

558

(16,001)9——(15,433)

As of March 31, 2022

Total

Total

Note: Gains and losses from applying fair value hedge accounting (currency-related losses of ¥63,528 million as of March 31, 2022, andcurrency-related losses of ¥12,957 million as of September 30, 2022) included in gains and losses with hedge accounting applied, and gains
and losses with hedge accounting not applied are reported in the statements of operations.

(ii) Hedge Accounting not Applied[Interest-related Transactions](Millions of yen)

As of March 31, 2022
Notional amount/
Fair value
contract valueOver 1 year

Gains
(Losses)

As of September 30, 2022
Notional amount/
Fair value
contract valueOver 1 year

Gains
(Losses)Over-the-counter transactions
Yen interest rate swaption contracts
Sold—

Receipt fixed, payment floating
[

— ]
—

Payment fixed, receipt floating
[

—

—
—

— [

—

— ]

— ]
—

—

— [

—
—

—

—

—

—

—

692

558

—

— ]

Bought—Receipt fixed, payment floating[
Payment fixed, receipt floating— ]150,000

[

—

—
—

— [

30,000133 ]— ]150,000

154

Total

20 [
20

—

133 ]

30,000558

Note: Figures in [ ] are option premiums which are included in the balance sheet.

32

Fukoku Mutual Life Insurance Company

[Currency-related Transactions](Millions of yen)

As of March 31, 2022
Notional amount/contract value
Fair valueOver 1 year

Over-the-counter transactions
Currency forward contracts
Sold
U.S. dollar
Canadian dollar
Australian dollar
British poundEuro

64,841
43,505
13,700
5,993
—
1,642

(4,101)(2,639)
(941)
(463)
—
(58)

104,00982,268
10,603
7,075
4,062
—

—
—
—
—
—
—

105,796
84,163
10,569
7,030
4,033
—

(1,786)(1,894)
34
44
28
—

—
—

—
—

—
—

—
—

206
206

—
—

206
206

0
0

—

—

356

(339) [

1,225

(956)

1,186

(1,001)[

24,257
17 ]
24,257
17 ]
—
— ]

38

44

—
— ]

—

[

—

—

—
— ]
138,259[
198 ]
138,259
[
198 ]

—

—

—

231

(300)

231

(300)
(3,044)[
U.S. dollar[
Canadian dollar

Put

—

— [

34,420268 ]
23,410185 ]11,010
83 ]

— [

—
— ]

—

—

— [

—
— ]
34,580532 ]
34,580
532 ]

—

—

—
356

(339) [—[

U.S. dollar

Gains(Losses)

—
—
—
—
—
—

Currency options
Sold
Call

Put

Gains
(Losses)

60,73940,866
12,759
5,530
—
1,583

BoughtU.S. dollar

BoughtCall

As of September 30, 2022
Notional amount/contract value
Fair valueOver 1 year—
6(191) [

—
6

Total

(191) [
(4,632)————

Notes: 1. Forward exchange rates are used for exchange rates as of September 30, 2022.
Notes: 2. Figures in [ ] are option premiums which are included in the balance sheet.

[Stock-related Transactions](Millions of yen)

As of March 31, 2022
Notional amount/contract value
Fair valueOver 1 year

As of September 30, 2022
Notional amount/contract value
Fair valueOver 1 year

Gains
(Losses)

Gains(Losses)

Exchange-traded transactions
Stock index options
Sold
Call

[
Put

[
Bought
Call

[
Put

[

—
— ]
—
— ]

—

—
— ]
35,100
210 ]

—

—

—

[

—
—

—

[

—

—

[

—
9

Total

(202) [
(202)

—
— ]
—
— ]

—

—
— ]
31,300
84 ]

—

—

—

—

—

—

—

94

9
9

—

—

Note: Figures in [ ] are option premiums which are included in the balance sheet.

[Bond-related Transactions]
No ending balance as of March 31, 2022 and September 30, 2022.

33

Fukoku Mutual Life Insurance Company

(iii) Hedge Accounting Applied[Interest-related Transactions]
No ending balance as of March 31, 2022 and September 30, 2022.
[Currency-related Transactions](Millions of yen)
Method ofhedge
accounting

As of March 31, 2022
Hedging instruments

Notional amount/contract value

Fair value

Hedged items

Notional amount/contract valueOver 1 year

— 1,007,994

458,058—

471,016

589,665—

207,924—

217,490Euro

109,105—

Foreigncurrencydenominated625,155bonds
115,210

127,330—

132,610Australian dollar

145,982—

161,038

104,634—

102,960

Swedish krona

33,588—35,71915,735—

15,531

British pound

2,343

—

2,410

2,433

—

2,423

Canadian dollar

63,779—68,460

—

—

—

Sold
U.S. dollar

Foreigncurrencydenominatedbonds

Fair valueOver 1 year

944,465

Currency forward contracts

Fair value
hedge
methodHedged items

As of September 30, 2022————
Bought—Total
Notes:1. Forward exchange rates are used for exchange rates as of September 30, 2022.
Notes:2. Regarding assets and liabilities which are denominated in foreign currencies but have fixed settlement in yen under currency forward
contracts and are reported in yen amounts in the balance sheet, those currency forward contracts are excluded from the table above.

—[Stock-related Transactions]
No ending balance as of March 31, 2022 and September 30, 2022.
[Bond-related Transactions]
No ending balance as of March 31, 2022 and September 30, 2022.

34

Fukoku Mutual Life Insurance Company

10. Status of the Company, Subsidiaries and Affiliates(1) Selected Financial Data
(100 million of yen)Six months ended
September 30, 2021

Six months ended
September 30, 2022

Ordinary revenues

4,390

5,261

Ordinary profits

452

74

Net surplus attributable to the parent company

350

74

Comprehensive income

568(1,049)As of March 31, 2022

As of September 30, 2022

89,86989,1601,274.3%

1,142.6 %Total assets
Solvency margin ratio(2) Scope of Consolidation and Application of Equity Method
Number of consolidated subsidiaries: 6
Number of unconsolidated subsidiaries accounted for under the equity method: 0
Number of affiliates accounted for under the equity method: 0

35

Fukoku Mutual Life Insurance Company

(3) Consolidated Balance Sheets(Millions of yen)

As of March 31, 2022

As of September 30, 2022

Cash and deposits

323,128

278,655

Call loans

48,00073,000Assets:Monetary claims bought
Money held in trust
Securities

80—

26,07025,936

7,697,988

7,639,643

Loans

556,577

543,915

Tangible fixed assets

245,765244,778

Intangible fixed assets

30,60929,095

Agency receivables
Reinsurance receivables
Other assets
Net defined benefit assets
Deferred tax assets
Allowance for possible loan losses
Total assets

0

0

175

59

58,39757,223

822

1,255

1,831

23,578(2,516)(1,132)

8,986,931

8,916,008

As of March 31, 2022

As of September 30, 2022

7,447,853

7,509,255

27,71939,661

7,356,399

7,389,226

63,41180,042

Liabilities:
Policy reserves:
Reserve for outstanding claims
Policy reserve
Reserve for dividends to policyholders
Reserve for dividends to policyholders (subsidiary)

322

325

Agency payables

165

328

Reinsurance payables

104

81

Subordinated bonds

241,935

241,935

Other liabilities
Reserve for claims and other payments

281,058

310,9203,432

65

Net defined benefit liabilities

27,677

27,854

Reserve for price fluctuation

187,692

189,657

Deferred tax liabilities

25,1880

Deferred tax liabilities for land revaluation
Total liabilities

14,18314,1438,229,290

8,294,242

Net assets:
Foundation funds

12,00012,000

Accumulated foundation funds redeemed

116,000

116,000

Reserve for revaluation

112

112

Consolidated surplus

132,765

109,386

Total foundation funds, surplus and others

260,877

237,498

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

486,644

373,902

Revaluation reserve for land, net of tax

4,184

4,225

Foreign currency translation adjustments

(312)

24

Accumulated remeasurements of defined benefit plans(2,030)(1,750)Total accumulated other comprehensive income

488,486

376,401

8,276

7,866

Non-controlling interests
Total net assets
Total liabilities and net assets

36

757,640

621,766

8,986,931

8,916,008

Fukoku Mutual Life Insurance Company

(4) Consolidated Statements of Operations and Comprehensive Income[Consolidated Statements of Operations](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][Foreign exchange gains, net]
[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 money held in trust, net]
[Losses on trading securities, net]
[Losses on sales of securities][Losses on valuation of securities][Losses on derivative instruments, net]
[Foreign exchange losses, net]
[Losses on separate accounts, net]
Operating expenses
Other ordinary expenses
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
Total extraordinary losses
Provision of reserve for dividends to policyholders (subsidiary)
Surplus before income taxes
Income taxes:
Current
Deferred
Total income taxes
Net surplus for the period
Net surplus attributable to non-controlling interests
Net surplus attributable to the parent company

37

Six months ended
September 30, 2021

Six months ended
September 30, 2022

327,003106,262[90,975][357][—][9,546][—][3,869]5,806
439,072

397,512120,155[89,823][—][756][19,034][4,621][—]
8,468
526,136

310,203[49,704][158,987][53,314][36,646][11,381]
6,758
584
6,166
6
0
12,623[2,210][—][78][1,413][386][293][1,125][—]49,307
14,898393,791
45,280363,375[99,397][146,216][69,755][35,701][12,139]
44,776
11,94232,827
6
045,272[2,234][116][—][12,735][3,373][16,090][—][2,799]49,805
15,415
518,645
7,491

11
11

1
1

250
8
2,045
2,304
92
42,894

76
0
1,965
2,042
101
5,348

8,704
(988)
7,715
35,17984
35,094428(2,533)(2,105)
7,454
4
7,449

Fukoku Mutual Life Insurance Company

(4) Consolidated Statements of Operations and Comprehensive Income (Continued)[Consolidated Statements of Comprehensive Income](Millions of yen)Six months ended
September 30, 2021

Six months ended
September 30, 2022

Net surplus

35,1797,454

Other comprehensive income:

21,662(112,386)

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

20,966(113,044)

Revaluation reserve for land, net of tax—

40

Foreign currency translation adjustments

192

336

Remeasurements of defined benefit plan, net of tax

502

280

Comprehensive income:

56,841(104,932)

Comprehensive income attributable to the parent company

56,728(104,635)

113

(297)

Comprehensive income attributable to non-controlling interests

38

Fukoku Mutual Life Insurance Company

(5) Consolidated Statements of Cash Flows(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
OthersSubtotalInterest, 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
OthersSubtotal [b][a + b]
Payments for purchase of tangible fixed assets
Proceeds from sales of tangible fixed assets
Payments for purchase of intangible fixed assets
Net cash provided by (used in) investing activities
Cash flows from financing activities:
Payment of interest on foundation funds
Dividends paid to non-controlling interests
Payments for lease obligations
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period39

Six months ended
September 30, 2021

Six months ended
September 30, 2022

42,894
2,373
7,125
8
584
6,166
6
0
92
(1,331)—408
2,045(90,975)(11,666)
2,210
1,125
237
11,895(26,797)
93,959(2,194)(16,249)(93)(5,813)42,811

5,348
2,391
7,715
0
11,94232,8276
0
101(1,383)(3,367)
133
1,965(89,823)
9,843
2,234
(4,621)
69
8,403(16,213)92,354(2,217)(14,102)(99)(3,344)56,3762,673
15(2,310)2,310(409,148)
372,403(36,482)
38,367(27,683)(11,043)77——(634,627)
634,315(34,161)
45,036(156,964)

77,72785,407(4,774)
13,09855,909(5,675)108(5,423)
2,108(5,438)(77,398)(21,021)(2,496)
7(5,022)(84,909)

(102)
(159)
(1,834)(2,096)(154)
42,668455,823
498,492

(102)
(112)
(1,904)(2,118)56(30,595)
366,999
336,403

Fukoku Mutual Life Insurance Company

(6) Consolidated Statements of Changes in Net Assets[For the six months ended September 30, 2021](Millions of yen)Foundation funds, surplus and others

Balance at the beginning of the current period

Foundation funds

Accumulated
foundation funds
redeemed

12,000116,000

Reserve forrevaluation

112

Consolidated
surplus

Total foundation
funds, surplus andothers131,699

259,811(32,744)(32,744)

(102)

(102)

35,09435,09400Changes in the current period
Additions to reserve for dividends topolicyholders
Payment of interest on foundation funds
Net surplus attributable to the parent company
for the current period
Reversal of revaluation reserve for land,
net of tax
Net changes, excluding foundation funds,
surplus and others
Total changes in the current period
Balance at the end of the current period

—

—

—

2,247

2,247

12,000116,000

112

133,946

262,058

Accumulated other comprehensive income
Net unrealized gains(losses) on available- Revaluation reservefor-sale securities, for land, net of tax
net of tax
Balance at the beginning of the current period

465,855

Foreign currency
Accumulated
Total accumulatedtranslation
remeasurements of other comprehensive
adjustments
defined benefit plansincome

4,185

(571)

(3,703)465,765

Non-controllinginterests

Total net assets

8,568

734,145

Changes in the current period
Additions to reserve for dividends topolicyholders(32,744)

Payment of interest on foundation funds(102)

Net surplus attributable to the parent company
for the current period

35,094

Reversal of revaluation reserve for land,
net of tax

0

Net changes, excluding foundation funds,
surplus and others

20,938

(0)

192

502

21,633(46)

21,587

Total changes in the current period

20,938

(0)

192

502

21,633(46)

23,834

Balance at the end of the current period

486,793

4,185

(378)

(3,200)487,399

8,521

757,980

40

Fukoku Mutual Life Insurance Company

[For the six months ended September 30, 2022](Millions of yen)Foundation funds, surplus and others
Consolidated
surplus

Total foundation
funds, surplus andothers132,765

260,877(30,726)(30,726)

Payment of interest on foundation funds

(102)

(102)

Net surplus attributable to the parent company
for the current period

7,449

7,449

Balance at the beginning of the current period

Foundation funds

Accumulated
foundation funds
redeemed

12,000116,000

Reserve forrevaluation

112

Changes in the current period
Additions to reserve for dividends topolicyholders

Net changes, excluding foundation funds,
surplus and others
Total changes in the current period
Balance at the end of the current period

—

—

—

(23,379)(23,379)

12,000116,000

112

109,386

237,498

Accumulated other comprehensive income
Net unrealized gains(losses) on available- Revaluation reservefor-sale securities, for land, net of tax
net of tax
Balance at the beginning of the current period

486,644

Foreign currency
Accumulated
Total accumulatedtranslation
remeasurements of other comprehensive
adjustments
defined benefit plansincome

4,184

(312)

(2,030)488,486

Non-controllinginterests

Total net assets

8,276

757,640

Changes in the current period
Additions to reserve for dividends topolicyholders(30,726)

Payment of interest on foundation funds(102)

Net surplus attributable to the parent company
for the current period

7,449

Net changes, excluding foundation funds,
surplus and others(112,742)

40

336

280

(112,084)(409)(112,494)

Total changes in the current period(112,742)

40

336

280

(112,084)(409)(135,873)

Balance at the end of the current period

373,9024,225

24(1,750)376,401

7,866

621,766

41

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 have been prepared from the accounts maintained by Fukoku
Mutual Life 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 and regulations and in conformity with accounting
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 consolidated financial statements include information which is not required underaccounting principles generally accepted in Japan but is presented herein as additional information.
Amounts of less than one million yen have been rounded down. As a result, the totals do not add up.

2. Principles of Consolidation(1) Scope of Consolidation
Consolidated subsidiaries as of September 30, 2022 are listed 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 and are sufficiently insignificant to reasonable judgementon their impact 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 six months ended September 30, 2022.
(3) Interim Closing Dates of Consolidated Subsidiaries
Among the subsidiaries to be consolidated, interim closing dates of overseas subsidiaries are June 30. For the
preparation of consolidated financial statements, financial statements as of that date are used and concerning any
important transaction taking place in between June 30 and the consolidated closing date, necessary
adjustments for consolidation are made.

42

Fukoku Mutual Life Insurance Company

II. Notes to the 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 in money held in trust, is as follows:i) Trading securities are stated at fair market value. Costs of their sales are determined by the moving

average method.
ii) Held-to-maturity debt securities are stated at amortized cost under the straight-line method, cost

being determined by the moving average method.
iii) Investments in unconsolidated subsidiaries and affiliates which are not accounted for under theequity method are stated at cost, cost being determined by the moving average method.
iv) Available-for-sale securities are stated at fair market value based on the market prices at the end of

the current period. Costs of their sales are determined by the moving average method. Public andcorporate bonds (including foreign bonds) with differences between their acquisition costs and fairvalues that are considered as adjustments of interest are stated at amortized cost (straight-line
method) determined by the moving average method. However, stocks and other securities without
quoted market prices are stated at cost, as determined using the moving average method. Net
unrealized gains or losses on these available-for-sale securities, net of taxes, are recorded as aseparate component of net assets.
(2) Derivative instruments are stated at fair market value.
(3) The Company revalued the land used in the operations based on the Act for Revaluation of Land (Act No.34
promulgated on March 31, 1998). The difference between fair value and book value resulting from the revaluation,
net of related taxes, is recorded as revaluation reserve for land as a separate component of net assets and the related
tax is recorded as deferred tax liabilities for land revaluation.
• Date of revaluation: March 31, 2002
• 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
Ordinance of the Act for Revaluation of Land (Government Ordinance No.119 promulgated on March 31,
1998) and the road rate set forth in Article 2 item 4 of the said Ordinance with certain reasonableadjustments.
(4) Depreciation of the Company’s tangible fixed assets is calculated by the following methods.
• Tangible fixed assets (excluding lease assets): Declining-balance method
However, buildings (excluding building attachments and structures acquired on or before March 31, 2016)acquired on 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 overthe lease 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 andaffiliates, are translated into Japanese yen at the effective exchange rate prevailing at the balance sheet date.
Investments in unconsolidated subsidiaries and affiliates are translated into Japanese yen at the exchange rate on
the date of acquisition.

43

Fukoku Mutual Life Insurance Company

(6) Allowance for possible loan losses for the Company is provided in accordance with the standards ofself-assessment 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 ofcredits 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 the amounts after deductions of theamounts expected to be collected through the disposal of collateral or the execution of guarantees.
iii) For the credits of borrowers other than the above, the Company provides the amounts calculated bymultiplying 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 departments in accordance with the Company’s standards of selfassessment on credit quality. The results of the assessment are reviewed by the audit department, which is
independent of business-related divisions. Subsequently, the allowance for possible loan losses is provided
based on the results of these assessments.
For the credits of legally bankrupt borrowers and substantially bankrupt borrowers, the amounts
remaining after deductions of collateral value or the amounts collectible through the execution of guarantees
are written-off directly from the borrowers’ balances as the estimated uncollectible amounts. The amountwritten-off as of September 30, 2022 was ¥0 million.
(7) To ensure that benefits associated with COVID-19 infections contracted during the six months ended September
30, 2022 can be paid during the six months ending March 31, 2023, the Company sets aside as a reserve for claims
and other payments that exceeds the reserve for outstanding claims included under the Company’s estimatedpayments for the latter six months (calculated based on previous payment amounts of consolidated subsidiaries).
(8) Net defined benefit liabilities and assets, which are provided for employees’ retirement benefits, are calculated bydeducting the amount of pension assets from the amount of retirement benefit obligations incurred as of thebalance 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) 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
fluctuation in relation to bonds and others denominated in foreign currencies, and a designated hedge accounting(“Furiate shori”) for foreign currency swaps as a hedge against the risk 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 is mainly applied.

44

Fukoku Mutual Life Insurance Company

(11) The Company accounts for consumption taxes by the tax-exclusion 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, are deferred as prepaid expenses and amortized equally over five years. Consumption taxes other thandeferred 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 the amount of payments that have been received.
Of premium incomes that have been received, the portion corresponding to the period that has yet to pass asof September 30, 2022 is accumulated as policy reserve in 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 of group annuities are recorded as amounts equivalent to
the policy reserve received when accepting the transfers of these group annuities.
(13) Claims and other payments (excluding reinsurance premiums) are recorded by the relevant amounts paid when thecause for payment under the policy conditions is occurred and the calculated 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 theCompany has a payment due but has not paid, or for which the occurrence of cause for payment has not beenreported but the Company recognizes that insured payment has already occurred as of September 30, 2022.
Claims and other payments associated with the outgoing transfer of group annuities are recorded as amounts
equivalent to the policy reserve transferred when recognizing the transfers of these group annuities.
(14) Policy reserve of the Company is accumulated in accordance with the methods stated in the statement ofcalculation 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 the insurance contracts for which the insurer’s responsibilities havestarted as of September 30, 2022.
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 theCommissioner of Financial Services Agency (Ministry of Finance Ordinance 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 actual assumptions for long-term future cash flows (such asassumed incidence rate and assumed interest rate) deviate from those assumptions set in the “statement ofcalculation procedures for Insurance Premiums and Policy Reserves” and policy reserve is considered to bepossibly insufficient to cover the future performance of obligations, additional policy reserve is required toaccumulate in accordance with Article 69 Paragraph 5 of the Enforcement Regulation of the Insurance BusinessAct. The following reserves have been established in compliance with this regulation.
• Among individual annuity insurance policies with an assumed 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 the assumed interest rate to 1.00% and funded additional policy reserves. As of September 30, 2022,
the balance of these policy reserves was ¥71,897 million.
• Among whole life insurance policies with assumed interest rates of 5.00% or higher, the Company has
reduced assumed interest rates for policies with premiums that have been paid in full (excluding policies that
45

Fukoku Mutual Life Insurance Company

have been converted into paid-up or extended policies, single premium policies, and policies for which
premiums have been waived) to 1.00% and funded additional policy reserves. As of September 30, 2022, thebalance of these policy reserves was ¥107,035 million.
• 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 September 30, 2022, the balance of these policy reserves was ¥77 million.
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 of the 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 the following 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 overthe lease term 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, the bonds that are held to match the duration 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).

2. The Company began applying the Implementation Guidance on Accounting Standard for Fair Value Measurement(ASBJ Guidance No. 31, June 17, 2021; hereinafter called “Implementation Guidance on Accounting Standard for
Fair Value Measurement”) from the beginning of the interim accounting period. In accordance with the transitional
treatments prescribed in Paragraph 27-2 of the Implementation Guidance on Accounting Standard for Fair Value
Measurement, new accounting policies set forth by the Implementation Guidance on Accounting Standard for Fair
Value Measurement will be applied prospectively. As a result, certain investment trusts that had previously been
carried on the interim consolidated balance sheet at acquisition cost are stated at fair value on the interim consolidatedbalance sheet from the six months ended September 30, 2022. The Company has observed no material impact fromthis application of the Implementation Guidance on Accounting Standard for Fair Value Measurement.

46

Fukoku Mutual Life Insurance Company

3. The carrying amounts, fair values and their related differences of major financial assets and liabilities in the generalaccount as of September 30, 2022 were as follows:(Millions of yen)

Carrying amount

Fair value

Difference

Money held in trust:
Trading securities.....................................….......

24,93624,936—

Total money held in trust....................................

24,93624,936—

Trading securities.......................................….....

10,838

10,838—

Held-to-maturity debt securities.........................

1,279,145

1,405,965

126,819

Policy-reserve-matching bonds................….......

762,404

771,662

9,257

Available-for-sale securities..................…..........

5,442,498

5,442,498—

Total securities........................................…........

7,494,887

7,630,964

136,076

Policy loans...........................................…...........

51,421

51,421(0)

Ordinary loans.....................................…............

492,494503,721

11,226

Total loans.......................................…................

543,915555,142

11,226

Assets total..............................................…......…......

8,063,740

8,211,043

147,303

Subordinated bonds ........................…...…….........

241,935

240,988(946)

Liabilities total…............................................….…....

241,935

240,988(946)

Hedge accounting not applied...........…..............

(2,476)(2,476)—

Hedge accounting applied……...........................

(12,957)(12,957)—

Total derivative instruments................…............

¥(15,433)¥(15,433)¥—

Securities:

Loans:*1

Derivative instruments*2:*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 arepresented 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 September 30, 2022 was ¥9,601 million.
Notes: 2. In accordance with Paragraph 24-16 of the Implementation Guidance on Accounting Standard for Fair Value
Measurement, investments in partnerships are not included in Securities of the above table. As of September
30, 2022, the amount of investments in partnerships included on the balance sheet was ¥34,573 million.
Notes: 3. Investment trusts with real estate as investment trust properties which have applied Paragraph 24-9 of the
Implementation Guidance on Accounting Standard for Fair Value Measurement are included in Securities.

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 andmateriality 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 thelowest fair value level into which any of these inputs can be categorized.

47

Fukoku Mutual Life Insurance Company

(1) Financial assets and liabilities with fair values recorded on the balance sheet as of September 30, 2022
(Millions of yen)Classification

Fair value
Level 2

Level 1

Level 3

Total

Money held in trust:
Trading securities........................….….....

—

24,936—24,936

Total money held in trust..........................

—

24,936—24,936

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

—

10,838—

10,838

Total trading securities……………..…

—

10,838—

10,838

Securities:
Trading securities:

Available-for-sale securities:
Government bonds……………….…...

1,747,774——

1,747,774

Local government bonds……….….….

—

139,263—

139,263

Corporate bonds………………..….….

—

697,281—697,281

Stocks…………………………….…...

681,557——

681,557

Foreign securities………………….….

713,670

1,270,965

26,8732,011,509

Other securities…………………….…

44,897116,165—

161,063

Total available-for-sale securities….…

3,187,899

2,223,676

26,8735,438,448

Total securities...........................……...

3,187,899

2,234,514

26,8735,449,287

Assets total........…….........................….........

3,187,899

2,259,450

26,8735,474,223

Currency-related……….………..............

—(16,001)—(16,001)

Interest-related………….……………….

—

558

—

558

Stock-related……………….……............

9

—

—

9

Total derivative instruments...…..............

¥9¥(15,443)¥—¥(15,433)*

Derivative instruments :* Assets and liabilities generated by derivative instruments are offset and presented net. Net liabilities in total are presented
in parentheses.
Note: Investment trusts with real estate as investment trust properties that have applied Paragraph 24-9 of the Implementation
Guidance on Accounting Standard for Fair Value Measurement are not included in the figures above. The amount of
the investment trusts on the balance sheet as of September 30, 2022 was ¥4,049 million. Reconciliation of balancesfrom the beginning of the current fiscal year to balances as of September 30, 2022 for the investment trusts were as
follows:(Millions of yen)

Balance at the beginning of the current period………..………………..………....

¥3,654

Gains or losses and other comprehensive income during the current period…...

395

Values recognized as other comprehensive income …………………….......

395

Balance at the end of the current period…………….……………………….....…

¥4,049** These amounts are included in net unrealized gains (losses) on available-for-sale securities, net oftax under other comprehensive income in the consolidated statements of comprehensive income
for the six months ended September 30, 2022.

48

Fukoku Mutual Life Insurance Company

(2) Financial assets and liabilities with fair values not recorded on the balance sheet as of September 30, 2022
(Millions of yen)Classification

Fair value
Level 2

Level 1

Level 3

Total

Securities:
Held-to-maturity debt securities:
Government bonds……………….…...

1,181,910——

1,181,910

Local government bonds……….….….

—

95,009—95,009Corporate bonds….………………..….

—

104,570—

104,570

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

24,475－—24,475

Total held-to-maturity debt securities...

1,206,385

199,579—

1,405,965

Policy-reserve-matching bonds:
Government bonds…………….……...

332,907——332,907

Local government bonds….……….….

—

125,578—

125,578

Corporate bonds……..…………….….

—

313,175—

313,175

Total policy-reserve-matching bonds…

332,907438,754—771,662

Total securities.............................…….

1,539,293

638,334—

2,177,627

Policy loans.................................…..........

——

51,421

51,421

Ordinary loans............................…...........

——

503,721503,721

Total loans................................…............

——

555,142555,142

Assets total.........................................…….......

1,539,293

638,334

555,1422,732,769

Loans:

Subordinated bonds…………………………...

—

240,988—

240,988

Liabilities total..........………………….….......

¥—¥240,988¥—¥240,988(3) Explanation of valuation techniques and inputs used to measure fair valuei) Securities (including deposits and monetary claims bought which are treated as securities based on“Accounting Standards 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 some foreign 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 been measured inaccordance with prescribed accounting standards are used to measure the fair values of these securities. If the
inputs used to measure the fair value of a given security are material but unobservable, the resulting fairvalue 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 aremeasured using the Company's prescribed method for determining the value of securities. These fair values
are categorized as Fair Value Level 2.
iii) Loans

The fair values of policy loans are deemed to approximate book values, considering estimated repayment
period and interest rate conditions since their repayment deadlines have not been set up due to thecharacteristics that the loans are limited to the amount of cash surrender values. Therefore, the book values
are used as the fair values of policy loans.
49

Fukoku Mutual Life Insurance Company

The fair values of floating interest rate loans among the ordinary loans approximate the book values
because the market interest rates are reflected in future cash flows in a short period. Therefore, the fair valuesof floating interest rate loans are based on their book values. The fair values of fixed interest rate loans areprimarily 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 are computed by deducting the amount of the allowance for possible loan
losses from the book values before direct write-offs.
If the impact of unobservable inputs used to measure the fair values of loans is determined to bematerial, 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 aremeasured 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 and 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 fair values 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 have been 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 September 30, 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 from the beginning of the current fiscal year to balances as of September 30, 2022,

and valuation gains or losses recognized in the statements of operations for the six months ended September
30, 2022.
(Millions of yen)
Securities,
Available-for-sale securities,
Foreign securities

Total

Balance at the beginning of the current period…………….....
Gains or losses and other comprehensive income during
the current period……………………………………....…
Values recognized as gains or losses*1..……………...…

¥28,139¥28,139(1,265)(1,265)(5)(5)

Values recognized as other comprehensive income …..

(1,260)(1,260)

Balance at the end of the current period…………………...…

¥26,873¥26,873*2*1 These amounts are included in investment income and investment expenses in the consolidated statements ofoperations for the six months ended September 30, 2022.
*2 These amounts are included in net unrealized gains (losses) on available-for-sale securities, net of tax underother comprehensive income in the consolidated statements of comprehensive income for the six months
ended September 30, 2022.

50

Fukoku Mutual Life Insurance Company

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 the actual measurement of fair value. These fair values aresubsequently checked by the risk management department to ensure their appropriateness and compliancewith 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 with the fairvalues 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
not make 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. Notes related to the fair value of investment and rental properties are omitted as no significant change has occurredsince the previous fiscal year-end.

6. The amount of securities lent under lending agreements was ¥730,293 million as of September 30, 2022.

7. The total amount of claims against bankrupt and quasi-bankrupt obligors, claims with collection risk, delinquent loans
past three months or more, and restructured loans was ¥2,333 million as September 30, 2022. The details are as
follows.
i) The balance of claims against bankrupt and quasi-bankrupt obligors was ¥143 million as of September 30,

2022.
Of which, the estimated uncollectible amount written-off was ¥0 million as of September 30, 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 ¥578 million as of September 30, 2022.

Claims with collection risk are loans to obligors (other than claims against bankrupt and quasi-bankrupt
obligors) with deteriorated 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 three months or more as of September 30, 2022.

Delinquent loans past three months or more are loans for which interest payments or repayments ofprincipal are delinquent for three months or more from the due date under the terms of the related loan
agreements, excluding those loans classified as claims against bankrupt and quasi-bankrupt obligors, claims
with collection risk.
iv) The balance of restructured loans was ¥1,612 million as of September 30, 2022.

Restructured loans are loans for which certain concessions favorable to borrowers, such as interest
reduction or exemption, rescheduling of due date for repayments of principal or interest payment, waiver ofclaim or other terms, have been negotiated for the purpose of assisting and supporting the borrowers in the51

Fukoku Mutual Life Insurance Company

restructuring of their business. This category excludes loans classified as claims against bankrupt andquasi-bankrupt obligors, claims with collection risk, and delinquent loans past three months or more.

8. Accumulated depreciation of tangible fixed assets were ¥181,889 million as of September 30, 2022.

9. Total assets in separate accounts provided for in Article 118 of the Insurance Business Act were ¥108,552 million as
of September 30, 2022. The amounts of separate account liabilities were the same as separate account assets.

10. Changes in reserve for dividends to policyholders for the six months ended September 30, 2022 were as follows:(Millions of yen)

Balance at the beginning of the current period…...............................................

¥63,411

Transfer from surplus in the previous fiscal year...............................................

30,726

Dividend payments to policyholders during the current period…..…………...

(14,102)

Increase in interest....................................................……………………..........

6

Balance at the end of the current period.............................................................

¥80,042

11. Changes in reserve for dividends to policyholders (Fukokushinrai Life Insurance Co., Ltd.) for the six months ended
September 30, 2022 were as follows:(Millions of yen)

Balance at the beginning of the current period…...............................................

¥322

Dividend payments to policyholders during the current period…..…………...

(99)

Increase in interest....................................................……………………..........

0

Provision of reserve for dividends to policyholders……………………….….

101

Balance at the end of the current period.............................................................

¥325

12. The amount of stocks of unconsolidated subsidiaries was ¥404 million as of September 30, 2022.

13. Assets pledged as collateral as of September 30, 2022 were ¥261,018 million of securities.
Secured debts as of September 30, 2022, were ¥252,376 million.
These amounts include ¥225,999 million of investments in securities deposited and ¥246,336 million of cash
received as collateral under securities lending transactions secured by cash as of September 30, 2022.

14. 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”) was ¥1 million as of September 30, 2022.
Policy reserve for the reinsurance contracts provided in accordance with Article 71 Paragraph 1 of the
Enforcement Regulation of the Insurance Business Act (hereinafter called “policy reserve for ceded reinsurance”)
was ¥37 million as of September 30, 2022.

52

Fukoku Mutual Life Insurance Company

15. There were unused commitment line agreements under which the Company is the lender of ¥8,910 million as of
September 30, 2022.

16. Repayments of subordinated bonds are subordinated to other obligations.

III.

Notes to the Consolidated Statements of Operations

1. For the six months ended September 30, 2022, in calculating the provision of reserve for outstanding claims, areversal of reserve for outstanding claims for ceded reinsurance of ¥0 million was added. In calculating the provisionof policy reserves, a reversal of policy reserve for ceded reinsurance of ¥5 million was added.

IV.

Notes to the Consolidated Statements of Cash Flows

1. Cash and cash equivalents as of September 30, 2022 consist of “Cash,” “Deposits in transfer account,” “Current
deposits,” “Ordinary deposits,” “Notice deposits,” “Time deposits maturing within 3 months of the date ofacquisition,” “Foreign currency deposits maturing within 3 months of the date of acquisition,” “Negotiable certificate
of deposits maturing within 3 months of the date of acquisition,” “Call loans” and “Monetary claims bought maturing
within 3 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 as of September 30, 2022 were as follows:(Millions of yen)

Cash and deposits.............................................................................................................

¥278,655

Call loans..........................................................................................................................

73,000Time deposits maturing over 3 months of the date of acquisition...................................

(13,100)

Foreign currency deposits maturing over 3 months of the date of acquisition….……...

(2,151)

Cash and cash equivalents..................................................................................…..........

¥336,403

53

Fukoku Mutual Life Insurance Company

(7) Status of Insurance Claims Paying Ability of the Company and Insurance Subsidiaries(Consolidated Solvency Margin Ratio)(Millions of yen)

As ofMarch 31, 2022

Total solvency margin

(A)

As of
September 30, 2022

2,003,378

1,859,986

Foundation funds and surplus

235,245

227,025

Reserve for price fluctuation

187,692

189,657

Contingency reserve

157,929

159,509

Catastrophe loss reserve——

General allowance for possible loan losses

820

698

(Net unrealized gains (losses) on securities (before tax) and deferredhedge gains (losses) (before tax)) × 90%

607,419

466,009

Net unrealized gains on real estate × 85%

140,830

143,001

Sum of unrecognized actuarial differences and unrecognized prior service cost

(2,819)(2,430)

Excess amount of policy reserve based on full-time Zillmer method

389,036

392,314

Qualifying subordinated debt

241,935

241,935

The amount of “excess amount of policy reserve based on full-time Zillmer
method” and “qualifying subordinated debt” excluded from the calculation ofsolvency margin——

Deductible items——

45,28842,265

314,415

325,544

OthersTotal amount of risk √(√𝑅12 + 𝑅52 + 𝑅8 + 𝑅9)2 + (𝑅2 + 𝑅3 + 𝑅7)2 + 𝑅4 + 𝑅6

(B)

Insurance risk

R1

22,215

22,111

General insurance risk

R5

—

—

Catastrophe risk

R6

—

—

3rd sector insurance risk

R8

10,108

10,286

Small amount and short-term insurance risk

R9

—

—

Assumed investment yield risk

R2

22,50822,028Minimum guarantee risk

R7

—

—

Investment risk

R3

283,438

294,878

Business risk

R4

6,765

6,986

1,274.3%

1,142.6%

Solvency margin ratio
(A)
× 100
(1/2) × (B)Notes: 1. Above figures are calculated based on the provisions of Articles 86-2 and 88 of the Enforcement Regulation of the Insurance
Business Act and the Financial Services Agency Notification No. 23, 2011.
Notes: 2. "Minimum guarantee risk" is calculated by standard method.

54

Fukoku Mutual Life Insurance Company