May 21, 2021

Financial Results for the Fiscal Year Ended March 31, 2021
Fukoku Mutual Life Insurance Company (President: Yoshiteru Yoneyama) announces
financial results for the fiscal year ended March 31, 2021.

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

P. 1

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

P. 3

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

P. 11

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

P. 12

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

P. 24

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

P. 25

7. Non-consolidated Statements of Surplus …………………………………………

P. 27

8. Disclosed Claims Based on Categories of Obligors ……………………………….

P. 28

9. Risk-monitored Loans ………………………………………………………………

P. 29

10. Solvency Margin Ratio ………………………….…………………………………..

P. 30…………………………….……………………………

P. 31

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

P. 38

11. Status of Separate AccountAttached: Supplementary Materials for the Fiscal Year Ended March 31, 2021

Fukoku Mutual life Insurance Company

Financial Summary for the Fiscal Year Ended March 31, 2021
1. Business Highlights(1) Policies in Force, New Policies and Surrendered and Lapsed Policies(i) Policies in Force
As of March 31, 2020
Number of policies

Individual insurance
Individual annuities

As of March 31, 2021

AmountNumber of policies(Thousands)

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

3,184

100.1

224,295

99.2

Amount(Thousands)

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

3,172

99.6

224,018

99.9

627

95.4

24,560

96.2

604

96.4

23,624

96.2

3,811

99.3

248,855

98.9

3,776

99.1

247,643

99.5

Group insurance——

176,052

101.7

—

—

175,362

99.6

Group annuities——

22,334

102.0

—

—

22,610101.2

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
Total
Year ended March 31, 2020

Number of policies(Thousands)

AmountChanges(%, YoY)

Net increase by
conversion

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

Individual insurance

354

100.8

15,28899.0

13,482

101.4

1,805

83.9

Individual annuities

9

132.7

289

134.6

300

132.0

(11)

—

Subtotal

364

101.5

15,57799.5

13,783

101.9

1,793

83.9

Group insurance

—

—

111

19.7

111

19.7

—

—

Group annuities

—

—

0

10.2

0

10.2

—

—

Total
Year ended March 31, 2021

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

294

83.0

14,79396.8

10,974

81.4

3,819

211.6

Individual annuities

7

73.2

205

70.9

214

71.1

(8)

—

Subtotal

301

82.7

14,99896.3

11,188

81.2

3,810

212.4

Group insurance

—

—

30

27.4

30

27.4

—

—

Group annuities

—

—

0

183.7

0

183.7

—

—

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
the time 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)
Year ended
March 31, 2020

Year ended
March 31, 2021

Changes(%, YoY)

Changes(%, YoY)

Amount of surrender andlapse (100 millions of yen)

12,223

98.2

10,195

83.4

Surrender and lapse ratio (%)

4.86(0.03)

4.10(0.76)

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, 2020

As of March 31, 2021

Changes(%, Pre-FYE)

Changes(%, Pre-FYE)

Individual insurance

2,692

98.9

2,665

99.0

Individual annuities

1,158

93.4

1,120

96.7

Total

3,851

97.1

3,785

98.3

1,135

101.3

1,143

100.7

Medical coverage and living benefits(ii) New Policies(100 millions of yen, %)Year ended March 31, 2020

Year ended March 31, 2021
Changes(%, YoY)

Changes(%, YoY)

Individual insurance

140

95.6

114

81.7

Individual annuities

8

132.3

5

71.5

148

97.1

120

81.1

75

101.4

60

80.3

Total
Medical coverage and living benefits

Notes: 1. Annualized premiums are calculated by using coefficients based on the premium payment method. (Forsingle premium contracts, the amount 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.

(3) Selected Items of Statements of Operations(100 millions of yen, %)Year ended March 31, 2020

Year ended March 31, 2021

Changes(%, YoY)

Changes(%, YoY)

Premium and other income

5,335

101.5

4,850

90.9

Investment income

1,950

106.3

2,066

106.0

Claims and other payments

4,391

93.9

4,154

94.6

Investment expenses

588

121.1

494

84.0

Ordinary profits

488

91.7

881

180.2

(4) Statements of Surplus(100 millions of yen, %)Year ended March 31, 2020

Year ended March 31, 2021

Changes(%, YoY)

Changes(%, YoY)

Unappropriated surplus

579

95.5

591

102.1

Reserve for dividends to policyholders

315

91.0

327

103.8

Net surplus

25

117.8

26

100.2

Unappropriated surplus carried forward

237

100.0

237

100.0

Note: Unappropriated surplus for the years ended March 31, 2020 and 2021 included reversal of voluntary surplus
reserve of ¥1 million and ¥1 million, respectively.

(5) Total Assets(100 millions of yen, %)As of March 31, 2020

As of March 31, 2021

Changes(%, Pre-FYE)

Total assets

67,908101.6

2Changes(%, Pre-FYE)

71,579105.4

Fukoku Mutual Life Insurance Company

2. Investment Results of General Account Assets(1) Asset Composition(Millions of yen, %)As of March 31, 2020

As of March 31, 2021

AmountAmount% of total

515,545

Cash, deposits, and call loans

269

Monetary claims bought

7.7 %
0.0

% of total

291,190
239

4.1 %
0.0

24,156

0.4

25,2770.4

5,265,401

78.5

5,857,001

83.0

Domestic bonds

2,677,697

39.9

2,779,477

39.4

Domestic stocks

612,0199.1

786,886

11.2

Foreign securities

1,857,920

27.7

2,128,047

30.2

Foreign bonds

1,580,829

23.6

1,710,567

24.3

277,091

4.1

417,479

5.9

117,764

1.8

162,590

2.3

565,473

8.4

568,091

8.1

Policy loans

55,3390.8

50,797

0.7

Ordinary loans

510,133

7.6

517,293

7.3

Real estate

215,305

3.2

239,545

3.4

Deferred tax assets

29,397

0.4——

Others

92,6881.4

76,0001.1

Allowance for possible loan losses(2,023)(0.0)(4,386)(0.1)

6,706,213

100.0

7,052,960

100.0

2,159,294

32.2

2,421,279

34.3

Money held in trust
Securities

Foreign stocks and other securities
Other securities
Loans

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)

Year ended March 31, 2020

Cash, deposits, and call loans

Year ended March 31, 2021

274,262(224,354)

Monetary claims bought

(29)

(29)

Money held in trust

306

1,120

(234,121)

591,599

Domestic bonds(104,315)

101,779

Domestic stocks(60,509)

174,867

Foreign securities(72,696)

270,126

Foreign bonds(33,640)

129,738

Foreign stocks and other securities(39,055)

140,388

3,399

44,825

4,335

2,617

Policy loans(992)(4,541)

Ordinary loans

5,327

7,159

Real estate

2,749

24,240

Deferred tax assets

29,397(29,397)

Others

16,249(16,687)72(2,362)

93,222346,747(60,903)

261,984

Securities

Other securities
Loans

Allowance for possible loan losses
Total
Foreign currency denominated assets

3

Fukoku Mutual Life Insurance Company

(3) Investment Income(Millions of yen)

Year ended March 31, 2020

Interest, dividends and other income

Year ended March 31, 2021

153,374

155,55936

5

129,290131,735

Interest on loans

8,766

8,137

Income from real estate for rent

15,267

15,534

Other interest and dividends

13

146

Gains on money held in trust, net

314

1,127

Gains on trading securities, net

—

6,523

35,41023,959Gains on sales of domestic bonds

20,386

7,447

Gains on sales of domestic stocks

11,143

14,974

Gains on sales of foreign securities

2,987

1,400

Other gains on sales of securities

892

137

Gains on derivative instruments, net

5,577

—

70

—

Interest on deposits
Interest and dividends on securities

Gains on sales of securities

Reversal of allowance for possible loan losses
Other investment income
Total

289

170

195,037

187,341(4) Investment Expenses(Millions of yen)

Year ended March 31, 2020

Year ended March 31, 2021

Interest expenses

3,860

4,093

Losses on trading securities, net

4,979

—

Losses on sales of securities

1,935

11,80947

735

Losses on sales of domestic stocks

643

7,592

Losses on sales of foreign securities

1,244

3,451

Other losses on sales of securities—

29

13,342404

Losses on valuation of domestic bonds—

65

Losses on valuation of domestic stocks

6,689

281

Losses on valuation of foreign securities

5,876

57

Other losses on valuation of securities

776

—

—

12,967

17,543

4,602

Provision of allowance for possible loan losses

—

2,369

Write-offs of loans

262—

Depreciation of real estate for rent and other assets

4,288

4,427

Other investment expenses

8,698

8,767

Total

54,91249,443Losses on sales of domestic bonds

Losses on valuation of securities

Losses on derivative instruments, net
Foreign exchange losses, net(5) Net Investment Income(Millions of yen)

Year ended March 31, 2020

Net investment income

140,125

4

Year ended March 31, 2021

137,898

Fukoku Mutual Life Insurance Company

(6) Other Information on Investments(i) Investment Yield by Asset Categories( %)Year ended March 31, 2020

Year ended March 31, 2021

Cash, deposits, and call loans

0.00

0.00

Monetary claims bought

1.13

1.11

Money held in trust

1.32

4.67

Securities

2.59

2.54

Domestic bonds

2.37

1.81

Domestic stocks

5.34

3.91

Foreign securities

2.30

3.06

Foreign bonds

2.26

2.65

Foreign stocks and other securities

2.57

4.96

1.50

1.08

1.24

0.83

Real estate

2.42

2.39

Total

2.20

2.11

2.28

2.87

Loans
Ordinary loans

Overseas investments

Notes: 1. Investment yield above are calculated by dividing the net investment income by the average daily balance ona book value basis.
Notes: 2. Overseas investments represent the total of foreign currency denominated assets and yen denominated assets.

(ii) Average Daily Balance(Millions of yen)

Year ended March 31, 2020

Year ended March 31, 2021

302,901

357,256284

254

23,851

24,1595,036,435

5,118,459

Domestic bonds

2,675,971

2,685,341

Domestic stocks

387,301

416,990

Foreign securities

1,870,874

1,890,731

Foreign bonds

1,580,558

1,557,603

290,316

333,128565,592

565,568

509,800

512,224

216,066

230,765

6,361,344

6,524,287

2,244,447

2,261,370

Cash, deposits, and call loans
Monetary claims bought
Money held in trust
Securities

Foreign stocks and other securities
Loans
Ordinary loans
Real estate
Total
Overseas investments

5

Fukoku Mutual Life Insurance Company

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

As of March 31, 2020
As of March 31, 2021
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

89,514(9,658)53,7038,310

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

(iv) Fair Value Information on Securities (with fair value, other than trading securities)(Millions of yen)Held-to-maturity debt securities

As of March 31, 2020
Gains/Losses
Book value Fair value
Gains757,178879,712122,534
122,534

As of March 31, 2021
Gains/Losses
Book value Fair value
LossesGains—
757,339863,820
106,481
106,481

Losses—Domestic bonds

737,664

858,750

121,085

121,085—

737,240

842,721

105,480

105,480—

Foreign bonds

19,51420,962

1,448

1,448

—

20,09821,098

1,000

1,000

—

Monetary claims bought

—

—

—

—

—

—

—

—

—

—

Negotiable certificate of deposits

—

—

—

—

—

—

—

—

—

—

Others

—

—

—

—

—

—

—

—

—

—

Policy-reserve-matching bonds

892,940

1,035,765

142,825

144,107

1,281

873,677

989,433

115,755

120,379

4,623

Domestic bonds

892,940

1,035,765

142,825

144,107

1,281

873,677

989,433

115,755

120,379

4,623

Foreign bonds

—

—

—

—

—

—

—

—

—

—

Investments in subsidiaries and affiliates

—

—

—

—

—

—

—

—

—

—

3,056,561

3,450,284

393,722477,836

84,113

3,462,146

4,095,801

633,654

656,049

22,394

Domestic bonds

955,552

1,038,974

83,421

83,947525

1,106,729

1,168,558

61,82967,376

5,547

Domestic stocks

333,313543,104

209,791

232,868

23,077347,152

717,432

370,279

377,140

6,860

Foreign securities

1,675,248

1,770,514

95,265

148,498

53,233

1,898,343

2,068,561

170,217

179,442

9,225

Foreign bonds

1,389,520

1,503,075

113,555

138,270

24,715

1,557,529

1,661,043

103,513111,905

8,391

Foreign stocks and other securities

285,728

267,438(18,289)

10,22728,517

340,813407,518

66,70467,537833

Other securities

92,446

97,6905,244

12,521

7,277

109,921141,249

31,32732,089761

Money held in trust

—

—

—

—

—

—

—

—

—

—

Monetary claims bought

—

—

—

—

—

—

—

—

—

—

Negotiable certificate of deposits

—

—

—

—

—

—

—

—

—

—

Others

—

—

—

—

—

—

—

—

—

—

Total

4,706,680

5,365,762

659,082

744,478

85,395

5,093,163

5,949,055

855,891

882,909

27,017

Domestic bonds

2,586,157

2,933,490

347,333

349,140

1,807

2,717,647

3,000,714

283,066

293,236

10,170

Domestic stocks

333,313543,104

209,791

232,868

23,077347,152

717,432

370,279

377,140

6,860

Foreign securities

1,694,762

1,791,476

96,713

149,946

53,233

1,918,441

2,089,659

171,218

180,443

9,225

Foreign bonds

1,409,034

1,524,038

115,003

139,719

24,715

1,577,627

1,682,141

104,513112,905

8,391

Foreign stocks and other securities

285,728

267,438(18,289)

10,22728,517

340,813407,518

66,70467,537833

Other securities

92,446

97,6905,244

12,521

7,277

109,921141,249

31,32732,089761

Money held in trust

—

—

—

—

—

—

—

—

—

—

Monetary claims bought

—

—

—

—

—

—

—

—

—

—

Negotiable certificate of deposits

—

—

—

—

—

—

—

—

—

—

Others

—

—

—

—

—

—

—

—

—

—

Available-for-sale securities

Note: The table above includes assets which are considered appropriate to deem as securities under the Financial Instruments andExchange Law.

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

As of March 31, 2020

As of March 31, 2021

—

—

—

—

—

—

Held-to-maturity debt securities
Unlisted foreign bonds
Others
Policy-reserve-matching bonds
Investments in subsidiaries and affiliates
Available-for-sale securities
Unlisted domestic stocks (except over-the-counter stocks)
Unlisted foreign stocks (except over-the-counter stocks)
Unlisted foreign bonds
OthersTotal——

64,78732,4105,684

64,78734,607
6,224

—

—

—

—

26,72597,19728,382
99,394

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 tothese holdings by domestic and overseas investment partnerships (¥1,443 million as of March 31, 2020 and¥1,362 million as of March 31, 2021) are included in their balance sheet carrying amounts.

6

Fukoku Mutual Life Insurance Company

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

As of March 31, 2020

Money held in trust

Carrying valueon the balance
sheet

Fair value

24,15624,156

As of March 31, 2021

Gains

LossesCarrying valueon the balance
sheet

—

—

25,277

Gains/Losses—

Gains/Losses
Fair value

25,277—

Gains

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

As of March 31, 2020
Net valuation gains/losses
included in the statementsof operations

Carrying valueon the balance sheet

Money held in trust fortrading purpose

As of March 31, 2021

23,156

Net valuation gains/losses
included in the statementsof operations

Carrying valueon the balance sheet

024,2770• Money held in trust classified as held-to-maturity, policy-reserve-matching and available-for-sale(Millions of yen)

As of March 31, 2020

As of March 31, 2021

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-matchi
ng

—

—

—

—

—

—

—

—

—

—

Money held in trust foravailable-for-sale

—

—

—

—

—

—

—

—

—

—

7

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, 2020

Interest-related Currency- related—

Hedge accounting applied

Stock- related

Bond- related

OthersTotal

10,206———

10,206

Hedge accounting not applied

(240)

2,988

841

—

—

3,589

Total

(240)

13,194841——

13,795Interest- related Currency- related

Stock- related

Bond- related(37,644)———

As of March 31, 2021—

Hedge accounting applied

OthersTotal(37,644)

Hedge accounting not applied(280)(2,956)

(157)

—

—

(3,394)

Total

(280)

(40,600)

(157)

—

—

(41,039)

Note: Gains and losses from applying fair value hedge accounting (currency-related gains of ¥10,206 million as of March 31, 2020, andcurrency-related losses of ¥37,644 million as of March 31, 2021) 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, 2020
Notional amount/contract value
Fair valueOver 1 year

As of March 31, 2021
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

—
—

— [

—

— [

—

— ]
—

— ]

—
—

—

—

—

—

—

12

(280)

—

— ]

Bought—Receipt fixed, payment floating[
Payment fixed, receipt floating—— ]460,000

[

—
—

— [

460,000— ]460,000

292 ]

52

Total

(240) [
(240)

—

292 ]

120,000(280)

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

8

Fukoku Mutual Life Insurance Company

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

As of March 31, 2020
Notional amount/contract value
Fair valueOver 1 year

Over-the-counter transactions
Currency forward contracts
Sold
U.S. dollar
Australian dollar
Euro
Canadian dollar
Swedish krona
British pound
BoughtCurrency options
Sold
Call
[
U.S. dollar[
Canadian dollar[
Australian dollar[
Put[
BoughtCall[
Put[
U.S. dollar[
Canadian dollar[
Australian dollar[

As of March 31, 2021
Notional amount/contract value
Fair valueOver 1 year

Gains
(Losses)

926,852
543,461
122,875
118,449
68,37529,46644,224

—
—
—
—
—
—
—

913,126
546,763
111,146
118,725
64,171
29,09643,223————371,074448 ]
345,340440 ]
17,669
4]
8,065
2]
—
—]

—
1,197

(749) [——]
288,760
449 ]
269,648442 ]
13,000
4]
6,112
2]

—

13,726 1,001,027(3,301)
621,623
11,728155,825(275)
106,584
4,203
64,900369
34,3791,001
17,713——

1,197(756) [

0

4 [

0

2 [

—
—

—

— [

—

— [

—
—
—

667

217 [

617

175 [

12

7 [

—
37

Total

34 [
13,194— 1,041,246— 652,501— 159,088— 108,704—
68,428—34,262—
18,261——

136,01288 ]
136,012
88 ]
—
— ]
—
— ]
—
—]

—

—
—]
203,072172 ]
199,347
168 ]
3,725
3]
—
—]

—

Gains
(Losses)(40,219)(30,878)(3,262)(2,120)(3,527)
117
(548)

—

—

303

(215)

303

(215)

—

—

—

—

—

—

—

—

6

(165)

6

(162)

0

(3)

—

—
(40,600)

—
—
—
—

—
—
—
—

Notes:1. Forward exchange rates are used for exchange rates as of March 31, 2021.
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, 2020
Notional amount/contract value
Fair valueOver 1 year

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

48,350
119 ]
—
—]

—

—
—]
30,200
91 ]—7

As of March 31, 2021
Notional amount/contract value
Fair valueOver 1 year

Gains
(Losses)

112 [

—
—

— [

—

— [

—
820

Total

729 [
841

10,400
24 ]
—
— ]

—

—
—]
45,000
180 ]

—

Gains
(Losses)

17

7

—

—

—

—

15

(164)
(157)

—

—

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

(v) Bond-related Transactions

No ending balance as of March 31, 2020 and March 31, 2021.
9

Fukoku Mutual Life Insurance Company

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

As of March 31, 2020
Carrying valueon the balance sheet

125,121

Fair value

278,475

As of March 31, 2021
Carrying valueon the balance sheet

Gains (Losses)

153,354

146,819

Fair value

Gains (Losses)

294,946

148,127

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

10

Fukoku Mutual Life Insurance Company

3. Non-consolidated Balance Sheets
As ofMarch 31,
2020

As of
March 31,2021

288,668

159,431

As ofMarch 31,
2020

Assets:Cash and deposits:
Cash

Liabilities:
Policy reserves:

5,775,716

168

155

Bank deposits

288,500

159,276

Call loans

230,000

136,000

269

239

Reinsurance payables

Monetary claims bought
Money held in trust(Millions of yen)
As ofMarch 31,2021

Reserve for outstanding claims
Policy reserve
Reserve for dividends to policyholders

5,812,295

19,814

19,551

5,694,979

5,729,511

60,922

63,2328687

24,15625,277

Subordinated bonds

191,935

241,935

Securities:

5,344,665

5,954,789

Other liabilities:

122,632

149,141

Government bonds

1,932,731

2,005,536

Cash received as collateral under
securities lending transactions

67,866

61,819Local government bonds

102,704

99,212

Corporate income tax payable

6,002

2,764

Corporate bonds

664,875

699,187

Accounts payable

2,783

7,272

Stocks631,989

813,227

Accrued expenses

10,68910,280Foreign securities

1,894,581

2,175,012

Unearned income

361

367

Other securities

117,783

162,612

Deposits received

6,079

6,303

Loans:

565,473

568,091

Guarantee deposits received

13,941

13,887

Policy loans

55,33950,797

Derivatives

7,564

41,391

1,694

10

966

761

Ordinary loans

510,133

517,293

Cash collateral received for financial
instruments

Tangible fixed assets:

219,475

244,487

Lease obligationsLand

125,118

146,816

Asset retirement obligations

2,754

2,603

Buildings

87,32092,635Suspense receipts

1,928

1,679

909

578

Reserve for employees' retirement benefits

23,51923,7352,866

93

Reserve for price fluctuation

122,745

172,797

Lease assets
Construction in progress—

26,43014,213

14,1846,250,849

6,440,606

Foundation funds

12,00012,000116,000

116,000

112

112

123,054

126,748

3,176

3,271

119,878

123,477—

2,400

Other tangible fixed assets

3,260

4,362

Deferred tax liabilities

Intangible fixed assets:

23,791

24,256

Deferred tax liabilities for land revaluation

Software18,155

19,181

Total liabilities

Lease assets
Other intangible fixed assets
Agency receivables

873

686

4,762

4,388

Net assets:

4

10

Accumulated foundation funds redeemed

111

124

Reserve for revaluation

Other assets:

66,88149,072

Surplus:

Accounts receivable

5,973

6,974

Legal reserve for future losses

Prepaid expenses

2,508

3,339

Other surplus:

Reinsurance receivables

Accrued income

28,26828,168Reserve for redemption of foundation
funds

Deposits

2,239

2,250

Reserve for dividend allowances

20,00020,000Derivatives

21,360352

Accumulated fund for price fluctuation

41,00041,000—1,747

Reserve for advanced depreciation ofreal estate for tax purpose

209

207

Suspense payments

3,381

3,005

Other reserves

767

767

Rest of the other asset

Cash collateral paid for financial
instruments

3,148

3,234

57,901

59,102

Prepaid pension cost—

547

Total foundation funds, surplus and others

251,166

254,860

Deferred tax assets

29,397—Net unrealized gains (losses) on availablefor-sale securities, net of tax

284,752

458,287

Allowance for possible loan losses(2,023)(4,386)

4,102

4,185

Total valuation and translation adjustments

288,855

462,473

Total net assets

540,021717,333

6,790,871

7,157,940

Total assets

6,790,871

7,157,940

Unappropriated surplus

Revaluation reserve for land, net of tax

Total liabilities and net assets

11

Fukoku Mutual Life Insurance Company

4. Non-consolidated Statements of Operations
Year ended March 31, 2020

Ordinary revenues:
Premium and other income:Premium income
Reinsurance income
Investment income:Interest, dividends and other income:Interest on deposits
Interest and dividends on securities
Interest on loans
Income from real estate for rent
Other interest and dividends
Gains on money held in trust, net
Gains on trading securities, net
Gains on sales of securities
Gains on derivative instruments, net
Reversal of allowance for possible loan losses
Other investment income
Gains on separate accounts, net
Other ordinary revenues:
Fund receipt from annuity rider
Proceeds from deferred insurance
Reversal of reserve for outstanding claims
Reversal of reserve for employees' retirement benefits
OthersTotal ordinary revenues
Ordinary expenses:
Claims and other payments:
ClaimsAnnuities
Benefits
Surrenders
Other payments
Reinsurance premiums
Provision of policy reserve and others:
Provision of policy reserves
Provision of interest portion of reserve for dividends to policyholders
Investment expenses:
Interest expenses
Losses on trading securities, net
Losses on sales of securities
Losses on valuation of securities
Losses on derivative instruments, net
Foreign exchange losses, net
Provision of allowance for possible loan losses
Write-offs of loans
Depreciation of real estate for rent and other assets
Other investment expenses
Losses on separate accounts, net
Operating expenses
Other ordinary expenses:
Deferred annuity payments
Taxes
Depreciation
OthersTotal 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
OthersTotal extraordinary losses
Surplus before income taxes
Income taxes：
Current
Deferred
Total income taxes
Net surplus for the year

12

(Millions of yen)
Year ended March 31, 2021

533,527
533,396130
195,037
153,37436
129,290
8,766
15,26713314—
35,410
5,577
70
289
—
13,306
5,397
3,420
508
996
2,984
741,870

485,011484,868
143
206,657
155,559
5
131,735
8,137
15,534
146
1,127
6,523
23,959——170
19,315
9,529
2,205
3,618
262
246
3,196
701,198

439,176
93,315
157,816
110,820
51,40425,588230
81,40981,396
13
58,867
3,860
4,979
1,935
13,342—
17,543
—
262
4,288
8,698
3,955
92,072
21,444
4,669
6,788
8,879
1,106
692,970
48,899415,436
77,539151,810
106,884
52,88826,083
231
34,54534,532
13
49,443
4,093—
11,809404
12,967
4,602
2,369
—
4,427
8,767
—
91,59922,057
3,944
7,304
9,739
1,069
613,083
88,115

5
5

133
133

181
38
11,466—
11,68537,219801
198
50,051
1,059
52,11036,137

13,646(10,540)
3,106
34,113

11,227(10,516)710
35,427

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 MutualLife Insurance Company (the “Company”) in accordance with the provisions set forth in the Insurance Business Act of Japanand 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 to securities, andsecurities 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 themoving average method.
iii) Policy-reserve-matching bonds are stated at amortized cost under the straight-line method, cost being determined by themoving average method in accordance with “Temporary Treatment of Accounting and Auditing Concerning
Policy-reserve-matching Bonds in the Insurance Industry” (Industry Audit Committee Report No.21 issued by theJapanese Institute of Certified Public Accountants on November 16, 2000).
iv) Investments in subsidiaries and affiliates are stated at cost, cost being determined by the moving average method.
v) Available-for-sale securities with fair market value are stated at fair market value based on the market prices at the end of
the fiscal year. Costs of their sales are determined by the moving average method. Net unrealized gains or losses onthese available-for-sale securities, net of taxes, are recorded as a separate component of net assets.
Available-for-sale securities whose market value are deemed extremely difficult to obtain are stated at cost, cost being
determined by the moving average method, except for public and corporate bonds including foreign bonds, of which
the difference between acquisition cost and face value is considered to be an adjustment of interest. Such bonds arestated at amortized cost under the straight-line method, cost being determined by the moving average method.
(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 promulgatedon 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 asdeferred 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 Ordinanceof 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.

13

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) acquiredon or after April 1, 1998 are depreciated using Straight-line method.
• Lease assets related to finance lease transactions that do not transfer ownership: Straight-line method over the leaseterm 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 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 andwrite-offs and reserves on credit quality:i) For the credits of borrowers who are legally bankrupt such as being in the proceedings of bankruptcy or civil
rehabilitation (hereinafter called “legally bankrupt borrowers”) and who are substantially bankrupt (hereinafter called“substantially bankrupt borrowers”), the Company provides the remaining amounts of credits after the direct write-off
described below and the deductions of the amount expected to be collected through the disposal of collateral or the
execution of guarantees.
ii) For the credits of borrowers who are not currently bankrupt but have a high possibility of bankruptcy (hereinafter
called “not currently bankrupt borrowers”), the Company provides the amounts deemed as necessary considering theborrowers’ ability to pay, within the amounts after deductions of the amounts expected to be collected through thedisposal of collateral or the execution of guarantees.
iii) For the credits of borrowers other than the above, the Company provides the amounts calculated by multiplying theborrowers’ 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 self-assessment on
credit quality. The results of the assessment are reviewed by the audit department, which is independent ofbusiness-related divisions. Subsequently, the allowance for possible loan losses is provided based on the results of theseassessments.
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 fromthe borrowers’ balances as the estimated uncollectible amounts. The amount written-off as of March 31, 2021 was ¥0
million.
(7) Reserve for employees' retirement benefits and prepaid pension cost are presented based on projected benefit obligations
and pension plan assets at the balance sheet date.
The Company uses the following methods 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(8) Reserve for price fluctuation is calculated in accordance with Article 115 of the Insurance Business Act.

14

Fukoku Mutual Life Insurance Company

(9) Hedge accounting is based on "Accounting Standards for Financial Instruments" (ASBJ Statement No. 10, March 10,2008). 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 inforeign currencies issued by the Company.
For assessing the effectiveness of hedge used, ratio analysis of comparing the fluctuations in the fair value or cash flowsof 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, aredeferred as prepaid expenses and amortized equally over five years. Consumption taxes other than deferred consumption
taxes are recognized as an expense when incurred.
(12) Initial premium incomes are recorded by the relevant amounts received when the premium incomes have been received
and the responsibilities on the insurance contract have been commenced, in principal.
Subsequent premium incomes are also recorded as 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 as of the end of
the fiscal year 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 the policy 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 apayment due but has not paid, or for which the occurrence of cause for payment has not been reported but the Company
recognizes that insured payment has already occurred as of the end of the fiscal year.
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 of calculation
procedures for Insurance Premiums and Policy Reserves (Article 4 Paragraph 2 Item 4 of the Insurance Business Act)
pursuant to Article 116 Paragraph 1 of the Insurance Business Act to prepare for the future performance of obligations
under the insurance contracts for which the insurer’s responsibilities have started as of the end of the fiscal year.
Premium reserves, one of the components of policy reserve, are calculated by the following method.
i) In regard to the policies subject to the standard policy reserve, the method as prescribed by the Commissioner ofFinancial 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.
Appointed actuary, for each fiscal year, verifies whether a portion of the policy reserve is reasonably accumulated inaccordance with Article 121 Paragraph 1 of the Insurance Business Act and Article 80 of the Enforcement Regulation of
the Insurance Business Act.

15

Fukoku Mutual Life Insurance Company

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 coverrisks that may accrue in the future in order to ensure performing future obligations under the insurance contracts.
The balance of policy reserve as of the end of the fiscal year calculated indicated above includes policy reserve that was
additionally accumulated as follows in accordance with Article 69 Paragraph 5 of the Enforcement Regulation of the
Insurance Business Act.
Among individual annuity insurance policies with an assumed interest rate of 5.00% or higher, for policies that havebegun paying annuities (excluding wife’s annuity insurance additional rider), the Company reduced the assumed interest
rate to 1.00% and funded additional policy reserves. As of March 31, 2021, the balance of these policy reserves was¥73,354 million.
The Company also funded additional policy reserves for certain individual annuity insurance policies, whole life
insurance policies that include distribution of surplus every five years and new cancer riders. As of March 31, 2021, thebalance of these policy reserves was ¥1,654 million.
(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 the leaseterm with no residual value.
(16) Of the bonds corresponding to the sub-groups of individual insurance and annuities which are set by insurance types andinvestment policies, the bonds that are held to match 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. Primary accounting standards that have been issued by the end of the fiscal year ended March 31, 2021 but have not been
applied are as follows.
Methods of calculating the fair value will be revised in response to the announcements of accounting standards such as“Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July 4, 2019), “Accounting Standard for
Financial Instruments” (ASBJ Statement No. 10, July 4, 2019) and “Implementation Guidance on Accounting Standard for
Fair Value Measurement” (ASBJ Guidance No. 31, July 4, 2019).
These accounting standards and this guidance must be applied at the beginning of the fiscal year starting on April 1, 2021 andthe Company plans to apply these accounting standards and this guidance at the beginning of the fiscal year ending March 31,
2022.
The Company is currently in the process of evaluating the effects of applying these accounting standards and this guidance
for the fiscal year ending March 31, 2022.

3. Asset management of the general accounts other than the separate accounts stipulated in Article 118 Paragraph 1 of the
Insurance Business Act is conducted on the principle of prudent and profitable investments, considering public and social
responsibilities of the insurance business. Based on this policy, the Company allocates the fund, securing its liquidity, from themedium-to-long term viewpoints. The Company is diversifying investments in assets such as foreign securities, stocks and realestates within the acceptable range of risks in order to enhance the profitability, although yen-denominated interest bearing
assets including debt securities such as Japanese government bonds and loans are the cores of the portfolios under the asset
liability management. Derivatives are mainly used to hedge the market risk regarding spot-priced assets and liabilities.

16

Fukoku Mutual Life Insurance Company

Major financial instruments including securities, loans and derivatives are exposed to market risk and credit risk.
The Company manages its asset management risk by establishing internal control systems including various rules pursuant to
the “Three Basic Rules related to Enterprise Risk Management” established by the Board of Directors. Specifically, theCompany eliminates excessive risk deviating from the basic principle and secures the safety of the assets by utilizing control
functions of the Financial and Investment Risk Management Department towards the asset management sections, monitoring
the status of market risk and credit risk periodically on a daily or monthly basis. In addition, the Company quantifies themarket risk and credit risk using value-at-risk (VaR) method in order to control the possible maximum losses which may
arise from the holding assets within a certain range of risk buffers.
The carrying amounts, fair values and their related differences of major financial assets and liabilities in the general accountas of March 31, 2021 were as follows:
Carrying amount

Cash and deposits:
Cash and deposits not treated as securities………….….....
Total cash and deposits…....................................................
Call loans…................................................................................
Monetary claims bought:
Claims treated as loans……................................................
Total monetary claims bought………………….................
Money held in trust:
Trading securities.........................……………...................
Total money held in trust.....................................................
Securities:
Trading securities............................……………................
Held-to-maturity debt securities..........................................
Policy-reserve-matching bonds...........…………….............
Available-for-sale securities....................……………........
Total securities.......................................……………..........
Loans:
Policy loans............................................…………..…........
Ordinary loans.........................................…………….........
Total loans...............................................………….............
Assets total...............................................…………….......…......
Subordinated bonds1..........................………………...…..........
Liabilities total…..........................................……………....…....
Derivative instruments2:
Hedge accounting not applied...........……….……..............
Hedge accounting applied……............................................
Total derivative instruments.........……………..................

Fair value(Millions of yen)
Difference¥ 155,190
155,190
136,000¥ 155,190
155,190
136,000

¥—
—
—

239
239

254
254

14
14

24,277
24,277

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

29,426
863,820
989,433
4,095,801—
106,481
115,755

5,756,244

5,978,481

50,797517,293

50,797537,281568,091
6,640,043
241,935
241,935

588,078
6,882,283
246,577
246,577(3,394)(37,644)¥ (41,039)(3,394)(37,644)¥ (41,039)—
222,237(0)
19,987
19,987242,239
4,642
4,642
—
—
¥—

Notes: 1. The fair value of derivative instruments that are currency swaps under designated hedge accounting is included in the fairvalue of subordinated bonds because it is accounted for as an integral part of the subordinated bonds that are the hedge items.
Notes: 2. Assets and liabilities generated by derivative instruments are offset and presented net. Net liabilities in total are presented inbrackets.

(1) Cash, deposits (excluding financial instruments treated as securities based on “Accounting Standards for Financial
Instruments” (ASBJ Statement No.10, March 10, 2008)) and call loans:
The fair values of cash, deposits and call loans are based on their book values since fair values approximate book values
due to their short maturities.
(2) Securities including deposits and monetary claims bought which are treated as securities based on “Accounting Standards
for Financial Instruments” (ASBJ Statement No.10, March 10, 2008) and securities managed as trust assets in money heldin trust:
17

Fukoku Mutual Life Insurance Company

The fair values of marketable securities are measured at the quoted market prices at the balance sheet date. The fair valuesof other securities without the quoted market prices are based on the prices reasonably calculated such as the prices
offered by the information vendors or counterparty financial institutions.
Investments in subsidiaries and affiliates, unlisted stocks and investments in partnerships whereby partnership assets
consist of unlisted stocks whose fair values are deemed extremely difficult to obtain, are excluded from above securities.
The carrying amounts of investments in subsidiaries and affiliates, unlisted stocks and investments in partnerships were¥64,787 million, ¥6,224 million, and ¥29,744 million as of March 31, 2021, respectively.
(3) Loans and monetary claims bought treated as loans:
The fair values of policy loans are deemed to approximate book values, considering estimated repayment period andinterest rate conditions since their repayment deadlines have not been set up due to the characteristics that the loans arelimited 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 and monetary claims bought treated as loans
approximate the book values because the market interest rates are reflected in future cash flows in a short period.
Therefore, the fair values of floating interest rate loans and monetary claims bought treated as loans are based on theirbook values. The fair values of fixed interest rate loans are measured by discounting the future cash flows to the present
values.
The fair values of loans from legally bankrupt borrowers, substantially bankrupt borrowers and not currently bankrupt
borrowers and monetary claims bought treated as loans are computed by deducting the amount of the allowance forpossible loan losses from the book values before direct write-offs.
(4) Subordinated bonds:
Subordinated bonds issued by the Company are stated at fair market values.
(5) Derivative instruments:i) The fair values of the futures and options traded at the exchange are measured at the settlement price of theexchange.
ii) The fair values of forward contracts, options and swaps traded over the counter are based on the quoted prices offeredby counterparty financial institutions.
iii) The fair values of foreign currency forward contracts are determined based on the spot exchange rate and forward
contract rate.

4. The Company holds investment and rental properties such as office buildings in Tokyo and other areas. The carrying amounts
and the fair values of investment and rental properties were ¥193,459 million and ¥324,155 million as of March 31, 2021,
respectively. The fair value is mainly based on the value calculated by the Company in accordance with real estate appraisal
standards which includes some adjustments using the reference prices.
The amount corresponding to asset retirement obligations included in the carrying amount of investment and rental properties
was ¥417 million as of March 31, 2021.

5. The amount of securities lent under lending agreements was ¥465,351 million as of March 31, 2021.

18

Fukoku Mutual Life Insurance Company

6. The total amounts of credits to bankrupt borrowers, delinquent loans, delinquent loans past 3 months or more and restructuredloans, which were included in loans, was ¥3,199 million as of March 31, 2021;
i) The balance of credits to bankrupt borrowers was ¥147 million as of March 31, 2021.
ii) The balance of delinquent loans was ¥2,522 million as of March 31, 2021.
iii) The balance of restructured loans was ¥529 million as of March 31, 2021.
iv) There was no balance of delinquent loans past 3 months or more as of March 31, 2021.
The direct write-offs related to loans decreased credits to bankrupt borrowers described above by ¥0 million as ofMarch 31, 2021.
Credits to bankrupt borrowers represent loans, excluding the balances already written-off, which meet the conditionsprescribed in Article 96 Paragraph 1 item 3 and 4 of the Enforcement Regulations of the Corporate Tax Act. Moreover,accrued interest on these loans is not recorded as income after determining that principal of or interest on these loans isunlikely to be collected due to the significant delay in repayment of principal or interest payment or for some other reasons.
Delinquent loans are credits which accrued interest is not recorded as income due to the same reasons as described above,and exclude credits to bankrupt borrowers and loans for which interest payments have been suspended and rescheduled toassist and support the borrowers in the restructuring of their business.
Delinquent loans past 3 months or more are loans for which interest payments or repayments of principal are delinquent for 3
months or more from the due date under the terms of the related loan agreements, excluding those loans classified as credits
to bankrupt borrowers and delinquent loans.
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 credits to bankrupt borrowers, delinquent loans and delinquent loans past 3 months or more.

7. Accumulated depreciation of tangible fixed assets were ¥173,746 million as of March 31, 2021.

8. Total assets in separate accounts provided for in Article 118 of the Insurance Business Act were ¥104,979 million as of March
31, 2021. The amounts of separate account liabilities were the same as separate account assets.

9. The total amounts of receivables from/payables to subsidiaries were ¥3,070 million and ¥2,167 million as of March 31, 2021,
respectively.

10. Deferred tax assets and deferred tax liabilities as of March 31, 2021 were ¥159,775 million and ¥181,233 million, respectively.
Valuation allowance for deferred tax assets was ¥4,972 million.
Major components of deferred tax assets were ¥90,033 million of policy reserves, ¥48,383 million of reserve for pricefluctuation and ¥11,872 million of reserve for employees' retirement benefits as of March 31, 2021.
Major component of deferred tax liabilities was ¥176,729 million of net unrealized gains on available-for-sale securities as ofMarch 31, 2021.
The statutory tax rate and the actual effective tax rate for the year ended March 31, 2021 were 28.0% and 2.0%, respectively.
The difference between the statutory tax rate and the actual effective tax rate was attributable mainly to-25.4% of reserve for dividends to policyholders.

19

Fukoku Mutual Life Insurance Company

11. Changes in reserve for dividends to policyholders for the year ended March 31, 2021 were as follows:(Millions of yen)

Balance at the beginning of the fiscal year…...............................................

¥ 60,922

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

31,547

Dividend payments to policyholders during the fiscal year…..…………...

(29,252)

Increase in interest....................................................……………………..........
Balance at the end of the fiscal year.............................................................

13¥ 63,232

12. The amount of stocks of subsidiaries was ¥64,787 million as of March 31, 2021.

13. Assets pledged as collateral as of March 31, 2021 were ¥99,608 million of securities and ¥790 million of bank deposits.
Secured debts as of March 31, 2021, were ¥67,546 million.
These amounts include ¥60,241 million of investments in securities deposited and ¥61,819 million of cash received ascollateral under securities lending transactions secured by cash as of March 31, 2021.

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 for ceded
reinsurance”) was ¥4 million as of March 31, 2021.
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 ¥30 million as ofMarch 31, 2021.

15. The total amounts of adjustment items for redemption of foundation funds and appropriation of net surplus defined in Article
30 Paragraph 2 of the Enforcement Regulation of the Insurance Business Act was ¥462,585 million as of March 31, 2021.

16. There were unused commitment line agreements under which the Company is the lender of ¥8,733 million as of March
31, 2021.

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

18. The future contribution to the Life Insurance Policyholders Protection Corporation of Japan under Article 259 of the Insurance
Business Act was estimated at ¥7,946 million as of March 31, 2021.
The contribution is recognized as operating expenses when contributed.

19. Matters Related to Employees’ Retirement Benefits as of March 31, 2021
(1) Overview of Employees’ Retirement Benefit Plan
As for a defined benefit plan for office-based employees, the Company has a defined benefit corporate pension plan andretirement lump-sum payments. As for a defined contribution plan for these employees, the Company also has a defined
contribution pension plan.
20

Fukoku Mutual Life Insurance Company

As for a defined benefit plan for sales employees, the Company has retirement lump-sum payments.
The Company places a retirement benefit trust in relation to the retirement lump-sum grant plan for sales employees.
The simplified method for calculating retirement benefit obligation is applied to a portion of the Company’s retirement
lump-sum grant plans.
(2) Defined Benefit Plani) Reconciliation of beginning and end of balance of retirement benefit obligation(Millions of yen)

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

¥ 87,938
3,455
526
2,881
(4,279)54¥ 90,576

ii) Reconciliation of beginning and end of balance of pension plan assets(Millions of yen)

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

¥ 53,704
867
6,673
2,577
(1,578)¥ 62,244iii) Reconciliation of retirement benefit obligation and pension plan assets with reserve for employees’
retirement benefits and prepaid pension cost presented on the non-consolidated balance sheet(Millions of yen)a. Funded plan retirement benefit obligation…………………………………
b. Pension plan assets……………………………….…………….…………..
c. (a + b)…………………………………………………………….………...
d. Unfunded plan retirement benefit obligation……………………………....
e. Unrecognized actuarial differences…………….……..…………………
f. Unrecognized prior service cost……………………………………..…..
g. Net amount of liabilities and assets presented
on the non-consolidated balance sheet………………………….………...
h. Reserve for employees’ retirement benefits………………..……….……...
i. Prepaid pension cost……………………………………………….………..
j. Net amount of liabilities and assets presented
on the non-consolidated balance sheet………..…………………….…….

¥ 78,508(62,244)
16,263
12,067(5,111)(31)
23,18723,735(547)¥ 23,187iv) Breakdown of retirement benefit gains and losses(Millions of yen)

Service cost…………………………………………..…………….…………
Interest cost………………………………..……….………….….…………..
Expected return on pension plan assets………………………….….………...
Amortization of actuarial differences………………………………………....
Amortization of prior service costs……………………………………….…..

¥ 3,455
526
(867)
1,905
(72)

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

¥ 4,947

21

Fukoku Mutual Life Insurance Company

v) Breakdown of pension plan assets
The breakdown of asset categories as a percentage of total pension plan assets were as follows:
Domestic stocks……………………………..………..….……………..……
42.9%
Life insurance general account…………..….………………...……………..
31.8%
Domestic bonds…………………….………………………………………...
9.9%
Foreign stocks……………………………………………………..………....
8.9%
Assets under joint management……………………………...…………..…..
3.3%
Foreign bonds………………………………………………...…………..…..
3.2%
Total……….…………………………………………………………….....…
100.0%
Within the total of pension assets, 35.6% of this amount is accounted for by the retirement benefit trust established inrelation to the retirement lump-sum payments plan for sales employees.
vi) Method for setting the expected long-term rate of return
To set the expected long-term rate of return on pension plan assets, the Company takes into account the present andfuture allocation of pension plan assets, and the present and expected future long-term rate of return on a variety of assetsthat makes up the pension assets.
vii) Underlying actuarial assumptions
Main underlying actuarial assumptions as of March 31, 2021, were as follows:
Discount rate…………………………………..….….…………………..…
Expected long-term rate of return on pension plan assets
Defined Benefit Plan….…………………………………………………...
Retirement benefit trust…………………………………..……..………....

0.6%
2.5%
0.0%

(3) Defined Contribution Plan
The required contribution amount by the Company to the defined contribution plan was ¥219 million as ofMarch 31, 2021.

22

Fukoku Mutual Life Insurance Company

III. Notes to the Non-consolidated Statements of Operations
1. The total amounts of revenues and expenses in connection with subsidiaries were ¥869 million and ¥8,916 million for the year
ended March 31, 2021.

2. The details of gains on sales of securities for the year ended March 31, 2021 were as follows:(Millions of yen)Domestic bonds.................................................................................................
Domestic stocks and others...............................................................................
Foreign securities..............................................................................................
Others................................................................................................................

¥ 7,447
14,974
1,400
137

3. The details of losses on sales of securities for the year ended March 31, 2021 were as follows:(Millions of yen)Domestic bonds…………….............................................................................
Domestic stocks and others....................................................….......................
Foreign securities..............................................................................................
Others................................................................................................................

¥ 735
7,592
3,451
29

4. The details of losses on valuation of securities for the year ended March 31, 2021 were as follows:(Millions of yen)Domestic bonds………....................................................................................
Domestic stocks and others………..................................................................
Foreign securities.......................................................................…………......

¥ 65
281
57

5. For the year ended March 31, 2021, in calculating the reversal of reserve for outstanding claims, a provision of reserves foroutstanding claims reinsured of ¥3 million was added. In calculating the provision of policy reserves, a provision of reserves
for policy reserves reinsured of ¥0 million was deducted.

6. The details of gains on trading securities for the year ended March 31, 2021 were as follows:(Millions of yen)Interest, dividends and other income…………………….................................

¥ 1,687

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

0

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

(3,475)

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

8,310

7. Gains on money held in trust for the year ended March 31, 2021 included valuation gains of ¥0 million.

8. Losses on derivative instruments for the year ended March 31, 2021 included valuation losses of ¥6,984 million.
9. “Others” within “Extraordinary losses” consists of expenses associated with salary guaranties provided to sales representatives
as a countermeasure aimed at preventing the spread of COVID-19.

23

Fukoku Mutual Life Insurance Company

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

Year ended
March 31, 2020

Year ended
March 31, 2021

83,47384,351

41,18329,844

Gains on money held in trust, net

196

1,049

Gains on trading securities, net

—

4,836

Gains on sales of securities

35,41023,959Gains on derivative instruments, net

5,577

—

Foreign exchange gains, net——

Other capital gains——

40,74729,784Losses on money held in trust, net——

Losses on trading securities, net

7,926

—

Losses on sales of securities

1,935

11,809Losses on valuation of securities

13,342404—

12,967

17,543

4,602

—

—

Fundamental profit

A

Capital gains

Capital losses

Losses on derivative instruments, net
Foreign exchange losses, net
Other capital losses
Net capital gains (losses)

B

435

60

Fundamental profit plus net capital gains (losses)

A+B

83,90984,411

027,887

Reinsurance income——

Reversal of contingency reserve——

Reversal of specific allowance for possible loan losses

0—

Others—27,88735,00924,183——

10,597

14,857

Provision of specific allowance for possible loan losses

—

1,997

Provision of allowance for specified overseas loans——

Write-off of loans

262—

24,149

7,328

Non-recurring gains

Non-recurring losses
Reinsurance premiums
Provision for contingency reserve

Others
Non-recurring gains (losses)

C(35,009)

3,703

Ordinary profits

A+B+C

48,89988,115

Notes: 1. The following amounts in respect of gains on money held in trust have been excluded from capital gains / losses and included infundamental profit due to their income nature (being interest and dividend income): ¥118 million in respect of the year ended
March 31, 2020 and ¥78 million in respect of the year ended March 31, 2021.
Notes: 2. The following amounts in respect of gains / losses on trading securities have been excluded from capital gains / losses andincluded in fundamental profit due to their income nature (being interest and dividend income): ¥2,946 million in respect of theyear ended March 31, 2020 and ¥1,687 million in respect of the year ended March 31, 2021.
Notes: 3. Other non-recurring losses in the fiscal year ended March 31, 2020 include the amounts of additional policy reserves establishedin connection with individual insurance policies for which annuity payments had begun and the amounts of additional policy
reserves established in connection with individual insurance and third sector insurance following reviews conducted byvaluation actuaries.
Notes: 4. Other non-recurring gains in the fiscal year ended March 31, 2021 include reversals of additional policy reserves established inconnection with individual insurance during the fiscal year ended March 31, 2020 or earlier in response to reviews conducted byvaluation actuaries.
Notes: 5. Other non-recurring losses in the fiscal year ended March 31, 2021 include the amounts of additional policy reserves establishedin connection with individual insurance policies for which annuity payments had begun and the amounts of additional policy
reserves established in connection with third sector insurance following reviews conducted by valuation actuaries.

24

Fukoku Mutual Life Insurance Company

6. Non-consolidated Statements of Changes in Net Assets[For the year ended March 31, 2020](Millions of yen)Foundation funds, surplus and others
Surplus
Other surplus

Foundation
funds

Balance at the beginning of the fiscal year

10,000

Accumulated
foundation Reserve for Legal reserve
Reserve forReserve forfunds
revaluation
advanced
for future redemption of Reserve for Accumulated
redeemed
dividend fund for price depreciation oflossesfoundation
allowances
fluctuation
real estate forfunds
tax purpose

106,000

112

3,071

8,000

20,00041,000210

Otherreserves

Unappropriatedsurplus767

60,633Total
surplus

Total foundation
funds, surplus
and others

133,682249,794

Changes in the fiscal year
Financing of additional foundation funds

12,00012,000Additions to reserve for dividends topolicyholders

105

Additions to legal reserve for future losses
Additions to accumulated foundation
funds redeemed(34,671)(34,671)

(105)

—

—

10,00010,000

Payment of interest on foundation funds
Net surplus for the fiscal year
Redemption of foundation funds(34,671)

(100)

(100)

(100)

34,113

34,113

34,113(10,000)(10,000)

Additions to reserve for redemption offoundation funds

2,000

Reversal of reserve for redemption offoundation funds(10,000)——(10,000)(10,000)

1

—

—

29

29

29

(2,000)

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 fiscal year

2,000

10,000—105(8,000)

—

—

(1)

—

(2,731)(10,628)

1,371

Balance at the end of the fiscal year

12,000116,000

112

3,176

—

20,00041,000209

767

57,901

123,054251,166

Valuation and translation adjustments
Net unrealized
gains (losses)
Total
Revaluation
on availablevaluation andreserve forfor-saletranslation
land, net of tax
securities, net
adjustmentsof taxBalance at the beginning of the fiscal year

342,748

4,132

346,880

Total
net ssets

596,674

Changes in the fiscal year
Financing of additional foundation funds

12,000Additions to reserve for dividends topolicyholders(34,671)—

Additions to legal reserve for future losses
Additions to accumulated foundation
funds redeemed

10,000

Payment of interest on foundation funds(100)

Net surplus for the fiscal year

34,113

Redemption of foundation funds(10,000)

Additions to reserve for redemption offoundation funds—

Reversal of reserve for redemption offoundation funds(10,000)

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

Reversal of revaluation reserve for land,
net of tax

29

Net changes, excluding foundation funds,
surplus and others(57,995)(29)(58,025)(58,025)

Total changes in the fiscal year

(57,995)(29)(58,025)(56,653)

Balance at the end of the fiscal year

284,752

4,102

288,855

540,021

25

Fukoku Mutual Life Insurance Company

[For the year ended March 31, 2021](Millions of yen)Foundation funds, surplus and others
Surplus
Other surplus

Foundation
funds

Balance at the beginning of the fiscal year

12,000

Accumulated
foundation Reserve for Legal reserve
Reserve forReserve forfunds
revaluation
advanced
for future redemption of Reserve for Accumulated
redeemed
dividend fund for price depreciation oflossesfoundation
allowances
fluctuation
real estate forfunds
tax purpose

116,000

112

—

3,176

20,00041,000209

Total
surplusTotal
foundation
funds, surplus
and others

Other
reserves

Unappropriatedsurplus767

57,901

123,054251,166(31,547)(31,547)(31,547)

(95)

—

—

(102)

(102)

(102)

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

—

—

1

—

—

(83)

(83)

(83)

Changes in the fiscal year
Additions to reserve for dividends topolicyholders

95

Additions to legal reserve for future losses
Payment of interest on foundation funds
Net surplus for the fiscal year
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 fiscal year
Balance at the end of the fiscal year

—

—

—

95

2,400

—

—

(1)

—

1,200

3,694

3,694

12,000116,000

112

3,271

2,400

20,00041,000207

767

59,102

126,748

254,860

Valuation and translation adjustments
Net unrealized
gains (losses)
Total
Revaluation
on availablevaluation andreserve forfor-saletranslation
land, net of tax
securities, net
adjustmentsof taxBalance at the beginning of the fiscal year

284,752

4,102

288,855

Total
net ssets

540,021

Changes in the fiscal year
Additions to reserve for dividends topolicyholders(31,547)

Additions to legal reserve for future losses—

Payment of interest on foundation funds(102)
35,427

Net surplus for the fiscal year
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(83)

Net changes, excluding foundation funds,
surplus and others

173,534

83

173,617

173,617

Total changes in the fiscal year

173,534

83

173,617

177,312

Balance at the end of the fiscal year

458,287

4,185

462,473

717,333

26

Fukoku Mutual Life Insurance Company

7. Non-consolidated Statements of Surplus(Millions of yen)

Year ended March 31, 2020

Year ended March 31, 2021

57,901

59,102

Reversal of voluntary surplus reserve11

Reversal of reserve for advanced depreciation of realestate for tax purpose

1

1

Total

57,903

59,103

Appropriation of surplus

34,14435,345Reserve for dividends to policyholders

31,54732,744

Net surplus

2,597

2,601

Legal reserve for future losses

95

99

Interest payment for foundation funds

102

102

Voluntary surplus reserve

2,400

2,400

Reserve for redemption of foundation funds

2,400

2,400

23,75823,758Unappropriated surplus

Unappropriated surplus carried forward

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

27

Fukoku Mutual Life Insurance Company

8. Disclosed Claims Based on Categories of Obligors(Millions of yen)

As of March 31, 2020

As of March 31, 2021

Claims against bankrupt and quasi-bankrupt obligors

173

159

Claims with collection risk

684

2,515

Claims for special attention

227

529

Subtotal[Percentage of total]

1,085[0.12%]

3,204[0.31%]

Claims against normal obligors

913,829

1,034,137

Total

914,914

1,037,341

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 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 berecovered.
Notes: 3. Claims for special attention are loans on which principal and/or interest are past due for three months or more and loans witha concessionary interest rate, as well as loans with renegotiated conditions in favor of the borrower, including renegotiatedschedule and/or waivers, in each case, other than the loans described in note 1 or 2 above.
Notes: 4. Claims against normal obligors are all other loans.

28

Fukoku Mutual Life Insurance Company

9. Risk-monitored Loans(Millions of yen)

As of March 31, 2020

As of March 31, 2021

Credits to bankrupt borrowers

153

147

Delinquent loans

698

2,522

Delinquent loans past three months or more——

Restructured loans

227

529

1,079
[0.19%]

3,199[0.56%]

Total[Percentage of total loans]

Notes: 1. For the credits of legally bankrupt borrowers and substantially bankrupt borrowers, the amounts remaining after deductions ofcollateral value or the amounts collectible through the execution of guarantees is written-off directly from the borrower’s balanceas the estimated uncollectible amounts. The amounts written-off related to credits to bankrupt borrowers were ¥0 million as ofMarch 31, 2020 and ¥0 million as of March 31, 2021.
Notes: 2. Credits to bankrupt borrowers represent loans which are subject to bankruptcy, corporate reorganization or rehabilitation or othersimilar, including but not limited to foreign, proceedings. Accruing interest of these loans is not recorded as income after
determining that principal of or interest on these loans is unlikely to be collected due to the significant delay in repayment ofprincipal or interest payment or for some other reasons.
Notes: 3. Delinquent loans are credits whose accruing interest is not recorded as income due to the same reasons as described in note 2
above, and exclude credits to bankrupt borrowers and loans for which interest payments have been suspended and rescheduled toassist and support the borrowers in the restructuring of their business.
Notes: 4. Delinquent loans past three months or more are loans for which interest payment or repayment of principal are delinquent forthree months or more from the due date under the terms of the related loan agreements, excluding those loans classified as credits
to bankrupt borrowers and delinquent loans.
Notes: 5. Restructured loans are loans for which certain concessions favorable to borrowers, such as interest reduction or exemptions,
rescheduling of due date 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 credits tobankrupt borrowers, delinquent loans and delinquent loans past three months or more.

29

Fukoku Mutual Life Insurance Company

10. Solvency Margin Ratio(Millions of yen)

As ofMarch 31, 2020

As ofMarch 31, 2021

1,537,878

1,847,290

Foundation funds and surplus

217,313

219,495

Reserve for price fluctuation

122,745

172,797

Contingency reserve

215,014229,872

1,538

1,911

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

355,650

571,515

Net unrealized gains on real estate × 85%

145,920

141,522

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

294,153

274,189

Qualifying subordinated debt

191,935

241,935——

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

Others40,391

40,836238,265

292,826

Total solvency margin(A)

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

22,732

22,3393rd sector insurance risk

R8

9,911

9,892

Assumed investment yield risk

R230,56829,804

Minimum guarantee risk

R7

—

—

Investment risk

R3

200,132

254,865

Business risk

R4

5,266

6,338

1,290.8%

1,261.6%

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 BusinessAct 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.

30

Fukoku Mutual Life Insurance Company

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

As of March 31, 2020

As of March 31, 2021

AmountAmountIndividual variable insurance——

Individual variable annuities

22

27Group annuities

84,635

104,952

Total

84,658104,979(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, 2020
Number ofpolicies

As of March 31, 2021
Number ofpolicies

AmountAmountIndividual variable annuities

8

20

8

20

Total

8

20

8

20

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

As of March 31, 2020
AmountAs of March 31, 2021

Percentage

AmountPercentage

Cash, deposits, call loans

3

17.7%

4

16.3%

Securities

18

82.3%

22

83.7%

Domestic bonds

—

—

—

—

Domestic stocks

—

—

—

—

Foreign securities

—

—

—

—

Foreign bonds

—

—

—

—

Foreign stocks and other securities

—

—

—

—

18

82.3%

22

83.7%

Loans

—

—

—

—

Others————Allowance for possible loan losses

—

—

—

—

Total

22

100.0%

27

100.0%

Other securities

31

Fukoku Mutual Life Insurance Company

(iii) Investment Income and Expenses of Separate Account for Individual Variable Annuities(Millions of yen)

Year ended March 31, 2020

Year ended March 31, 2021

AmountAmountInterest, dividends and other income

00Gains on sales of securities——

Gains on redemption of securities——

Gains on valuation of securities

59Foreign exchange gains, net——

Gains on derivative instruments——

Other investment income——

Losses on sales of securities——

Losses on redemption of securities——

Losses on valuation of securities

55Foreign exchange losses, net——

Losses on derivative instruments——

Other investment expenses——

Net investment income(0)4(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, 2020

As of March 31, 2021

Net valuation
Net valuation
Carrying value on gains/losses included in Carrying value on gains/losses included in
the balance sheet
the statements ofthe balance sheet
the statements ofoperations
operations

Trading securities

18

(0)

22

4

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

32

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, 2020

As of March 31, 2021

Carrying value on thebalance sheet

Net valuation gains/losses includedin the statement of operations

Carrying value on thebalance sheet

168,778(15,692)

151,491

Trading securities

Net valuation gains/losses includedin the statement of operations
23,542

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

Fair Value Information on Securities (with fair value, other than trading securities)(Millions of yen)
As of March 31, 2020

As of March 31, 2021

Gains/Losses

Book value Fair value

Gains

LossesBook value Fair value

Gains/Losses
Gains

Losses

Held-to-maturity debt securities

757,178879,712122,534

122,534—

757,339863,820

106,481

106,481—

Domestic bonds

737,664

858,750

121,085

121,085—

737,240

842,721

105,480

105,480—

Foreign bonds

19,51420,962

1,448

1,448

—

20,09821,098

1,000

1,000

—

Monetary claims bought

—

—

—

—

—

—

—

—

—

—

Negotiable certificate of deposits

—

—

—

—

—

—

—

—

—

—

Others

—

—

—

—

—

—

—

—

—

—

Policy-reserve-matching bonds

892,940

1,035,765

142,825

144,107

1,281

873,677

989,433

115,755

120,379

4,623

Domestic bonds

892,940

1,035,765

142,825

144,107

1,281

873,677

989,433

115,755

120,379

4,623

Foreign bonds

—

—

—

—

—

—

—

—

—

—

Investments in subsidiaries and affiliates

—

—

—

—

—

—

—

—

—

—

3,056,561

3,450,284

393,722477,836

84,113

3,462,146

4,095,801

633,654

656,049

22,394

Domestic bonds

955,552

1,038,974

83,421

83,947525

1,106,729

1,168,558

61,82967,376

5,547

Domestic stocks

333,313543,104

209,791

232,868

23,077347,152

717,432

370,279

377,140

6,860

Foreign securities

1,675,248

1,770,514

95,265

148,498

53,233

1,898,343

2,068,561

170,217

179,442

9,225

Foreign bonds

1,389,520

1,503,075

113,555

138,270

24,715

1,557,529

1,661,043

103,513111,905

8,391

Foreign stocks and other securities

285,728

267,438(18,289)

10,22728,517

340,813407,518

66,70467,537833

Other securities

92,446

97,6905,244

12,521

7,277

109,921141,249

31,32732,089761

Money held in trust

—

—

—

—

—

—

—

—

—

—

Monetary claims bought

—

—

—

—

—

—

—

—

—

—

Negotiable certificate of deposits

—

—

—

—

—

—

—

—

—

—

Others

—

—

—

—

—

—

—

—

—

—

Total

4,706,680

5,365,762

659,082

744,478

85,395

5,093,163

5,949,055

855,891

882,909

27,017

Domestic bonds

2,586,157

2,933,490

347,333

349,140

1,807

2,717,647

3,000,714

283,066

293,236

10,170

Domestic stocks

333,313543,104

209,791

232,868

23,077347,152

717,432

370,279

377,140

6,860

Foreign securities

1,694,762

1,791,476

96,713

149,946

53,233

1,918,441

2,089,659

171,218

180,443

9,225

Foreign bonds

1,409,034

1,524,038

115,003

139,719

24,715

1,577,627

1,682,141

104,513112,905

8,391

Foreign stocks and other securities

285,728

267,438(18,289)

10,22728,517

340,813407,518

66,70467,537833

Other securities

92,446

97,6905,244

12,521

7,277

109,921141,249

31,32732,089761

Money held in trust

—

—

—

—

—

—

—

—

—

—

Monetary claims bought

—

—

—

—

—

—

—

—

—

—

Negotiable certificate of deposits

—

—

—

—

—

—

—

—

—

—

Others

—

—

—

—

—

—

—

—

—

—

Available-for-sale securities

Note: The table above includes assets which are considered appropriate to deem as securities under the Financial Instruments and Exchange Law.

[Held-to-maturity Debt Securities]
As of March 31, 2020
Carrying value on
Fair value
Differences
the balance sheet
Securities whose fair value exceeds the carrying valueon the balance sheet(Millions of yen)
As of March 31, 2021
Carrying value on
Fair value
Differences
the balance sheet

757,178879,712122,534

757,339863,820

106,481

Domestic bonds

737,664

858,750

121,085

737,240

842,721

105,480

Foreign bonds

19,51420,962

1,448

20,09821,0981,000

Monetary claims bought

—

—

—

—

—

—

Negotiable certificate of deposits

—

—

—

—

—

—

Others

—

—

—

—

—

—

—

—

—

—

—

—

Domestic bonds

—

—

—

—

—

—

Foreign bonds

—

—

—

—

—

—

Monetary claims bought

—

—

—

—

—

—

Negotiable certificate of deposits

—

—

—

—

—

—

Others

—

—

—

—

—

—

Securities whose fair value does not exceed thecarrying value on the balance sheet

33

Fukoku Mutual Life Insurance Company

[Policy-reserve-matching Bonds](Millions of yen)
As of March 31, 2020
Carrying value on
the balance sheet
Bonds whose fair value exceeds the carrying valueon the balance sheet
Domestic bonds

As of March 31, 2021

Fair value

Differences

855,085

999,192

144,107855,085

999,192———

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

Carrying value on
the balance sheet

Fair value

Differences

768,085

888,464

120,379

144,107768,085

888,464

120,379

—

—

—

—

—

—

—

—

—

37,85436,572(1,281)

105,591

100,968(4,623)37,85436,572(1,281)

105,591

100,968(4,623)Foreign bonds

—

—

—

—

—

—

Others

—

—

—

—

—

—

[Available-for-sale Securities](Millions of yen)
As of March 31, 2020

As of March 31, 2021

Book value

Carrying value on
the balance sheet

Differences

Book value

Carrying value on
the balance sheet

Differences

2,271,365

2,749,202

477,8362,940,450

3,596,499

656,049

Domestic bonds

916,2141,000,161

83,947886,068

953,445

67,376

Domestic stocks

220,830

453,699

232,868

306,727

683,867

377,140

Foreign securities

1,105,570

1,254,068

148,498

1,662,254

1,841,697

179,442

Foreign bonds

1,039,135

1,177,405

138,270

1,334,993

1,446,899

111,905

Foreign stocks

66,43476,662

10,227327,260

394,798

67,53728,75041,272

12,521

85,399117,488

32,089

Money held in trust

—

—

—

—

—

—

Monetary claims bought

—

—

—

—

—

—

Negotiable certificate of deposits

—

—

—

—

—

—

Others

—

—

—

—

—

—

785,195

701,081(84,113)521,696499,301(22,394)

Domestic bonds

39,33838,812(525)

220,660

215,113(5,547)

Domestic stocks

112,483

89,405(23,077)

40,42433,564(6,860)Foreign securities

569,678

516,445(53,233)

236,088

226,863(9,225)

Foreign bonds

350,385

325,669(24,715)

222,535

214,143(8,391)

Foreign stocks

219,293

190,775(28,517)

13,553

12,719(833)

63,69556,417(7,277)

24,522

23,760(761)

Money held in trust

—

—

—

—

—

—

Monetary claims bought

—

—

—

—

—

—

Negotiable certificate of deposits

—

—

—

—

—

—

Others

—

—

—

—

—

—

Securities whose carrying value on the balance
sheet exceeds the book value

Other securities

Securities whose carrying value on the balance
sheet does not exceed the book value

Other securities• Book value of securities without fair value are as follows:(Millions of yen)
As of March 31, 2020

As of March 31, 2021——

Unlisted foreign bonds——

Others——

Held-to-maturity debt securities——

Investments in subsidiaries and affiliates

64,78764,787Available-for-sale securities

Policy-reserve-matching bonds

32,41034,607

Unlisted domestic stocks (except over-the-counter stocks)

5,684

6,224

Unlisted foreign stocks (except over-the-counter stocks)——

Unlisted foreign bonds——

26,72528,382

97,197

99,394

OthersTotal

Note: In this table, domestic and overseas investment partnerships are included in “Others” within “Available-for-salesecurities.” However, unrealized gains on available-for-sale securities corresponding to these holdings bydomestic and overseas investment partnerships (¥1,443 million as of March 31, 2020 and ¥1,362 million as ofMarch 31, 2021) are included in their balance sheet carrying amounts.

34

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)

As of March 31, 2020

Interest- related

Currency- related

Stock- related

Bond- related

OthersTotal—

10,206———

10,206

Hedge accounting not applied

(240)

2,988

841

—

—

3,589

Total

(240)

13,194841——

13,795Hedge accounting applied

Interest- related

Currency- related

Stock- related

Bond- related

Others—(37,644)———(37,644)

Hedge accounting not applied(280)(2,956)

(157)

—

—

(3,394)

Total

(280)

(40,600)

(157)

—

—

(41,039)

As of March 31, 2021

Hedge accounting applied

Total

Note: Gains and losses from applying fair value hedge accounting (currency-related gains of ¥10,206 million as of March 31, 2020, andcurrency-related losses of ¥37,644 million as of March 31, 2021) 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, 2020
Notional amount/
Fair value
contract valueOver 1 year

Gains
(Losses)

As of March 31, 2021
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

–
–

– [

– ]
–

–
–

– ]

– [

–
–

–

–

–

–

–

12

(280)

–

– ]

Bought–Receipt fixed, payment floating[
Payment fixed, receipt floating–– ]460,000

[

–
–

– [

460,000292 ]– ]460,00052

Total(240) [
(240)

–

292 ]

120,000(280)

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

35

Fukoku Mutual Life Insurance Company

[Currency-related Transactions](Millions of yen)

As of March 31, 2020
Notional amount/contract value
Fair valueOver 1 year
Over-the-counter transactions
Currency forward contracts
Sold
U.S. dollar
Canadian dollar
British pound
Australian dollar
Euro
Other

As of March 31, 2021
Notional amount/contract value
Fair valueOver 1 year

Gains
(Losses)

Gains(Losses)

108,353
39,46522,74624,224
12,956
8,882
78

—
—
—
—
—
—
—

104,832
39,663
21,39623,335
11,536
8,821
78

3,521
(197)
1,349
888
1,419
61
(0)

68,787
38,778
13,975
9,115
5,440
1,477
—

—
—
—
—
—
—
—

71,36240,22814,913
9,130
5,530
1,558
—

(2,575)(1,450)
(938)
(15)
(90)
(81)
—

233
153
79

—
—
—

232
152
79

(1)
(1)
(0)

—
—
—

—
—
—

—
—
—

—
—
—

—
(749) [

303

(215)

303

(215)

—

—

[

136,01288 ]
136,012
88 ]
—
— ]
—
— ]

—

1,197

[

371,074448 ]
345,340440 ]
17,669
4 ]
8,065
2 ]

—

—

—

—
— ]

—

[

—
— ]

—

—

—
— ]
288,760
449 ]
269,648442 ]
13,000
4 ]
6,112
2 ]

—

—
— ]
203,072172 ]
199,347
168 ]
3,725
3 ]
—
— ]

—
—

—

6

(165)

6

(162)

0

(3)

—

—
(2,956)

BoughtEuro
U.S. dollar
Currency options
Sold
Call
[
U.S. dollar[
Canadian dollar[
Australian dollar
Put
BoughtCall[
Put[
U.S. dollar[
Canadian dollar[
Australian dollar
[

—
1,197

(756) [

—
0

4

[

—
0

2

—

—

[

—

—

[

—
667

217

[

—
617

175

[

—
12

7

[

—
37

Total

34
2,988

[

—
—
—

—
—
—
—

Notes: 1. Forward exchange rates are used for exchange rates as of March 31, 2021.
Notes: 2. Figures in [ ] are option premiums which are included in the balance sheet.

[Stock-related Transactions](Millions of yen)

As of March 31, 2020
Notional amount/contract value
Fair valueOver 1 year
Exchange-traded transactions
Stock index options
Sold
Call
[
Put
[
Bought
Call
[
Put
[

48,350119——

As of March 31, 2021
Notional amount/
Fair value
contract valueOver 1 year

Gains
(Losses)

—
]

7

112

[

—
]

—
— ]
30,200
91 ]

—

—

[

—

—

[

—
—
820

Total

729
841

[

10,400
24
—
—

—
— ]
45,000180 ]Gains(Losses)

—
]

17

7

—

—

—

—

15

(164)
(157)

—
]

—
—

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

[Bond-related Transactions]
No ending balance as of March 31, 2020 and March 31, 2021.

36

Fukoku Mutual Life Insurance Company

(iii) Hedge Accounting Applied[Interest-related Transactions]
No ending balance as of March 31, 2020 and March 31, 2021.
[Currency-related Transactions](Millions of yen)

Method ofhedge
accounting

Hedging instruments
Currency forward contracts
Sold
U.S. dollar

Fair value
hedge
methodAustralian dollar

As of March 31, 2020
As of March 31, 2021
Notional amount/
Notional amount/contract value
contract value
Hedged items
Fair value Hedged items
Fair valueOver 1 year
Over 1 year
Foreign
Foreigncurrencycurrency819,040
932,239— 808,834— 969,884
denominateddenominated504,167
582,845— 507,270— 612,273
bonds
bonds
109,919
99,610150,384—— 153,557

Euro

109,789—

110,124

105,106—

107,145

Canadian dollar

45,629—42,77550,925—53,514

Swedish krona

29,466—29,09634,379—34,262

British pound

20,069—19,956

8,598

—

9,131

—

—

—

—

—

—

BoughtTotal

Notes:1. Forward exchange rates are used for exchange rates as of March 31, 2021.
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 thetable above.

[Stock-related Transactions]
No ending balance as of March 31, 2020 and March 31, 2021.
[Bond-related Transactions]
No ending balance as of March 31, 2020 and March 31, 2021.

37

Fukoku Mutual Life Insurance Company

12. Status of the Company, Subsidiaries and Affiliates(1) Selected Financial Data
(100 million of yen)

Year ended
March 31, 2020

Year ended
March 31, 2021

Ordinary revenues

8,644

9,241

Ordinary profits

500

900

Net surplus attributable to the parent company

343

361

Comprehensive income

(275)

2,129

Total assets
Solvency margin ratio

As of March 31, 2020

As of March 31, 2021

85,74488,034

1,331.7%

1,303.9%(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: 038

Fukoku Mutual Life Insurance Company

(3) Consolidated Balance Sheets(Millions of yen)
As of
As of
March 31, 2020 March 31, 2021

Assets:

As of
As of
March 31, 2020 March 31, 2021

Liabilities:

Cash and deposits

415,816

325,854

Policy reserves:

7,515,143

7,418,526

Call loans

230,000

136,000

Reserve for outstanding claims

23,62023,713269

239

7,430,271

7,331,271

24,15625,277

Reserve for dividends topolicyholders

60,922

63,232

6,977,554

7,417,165

Reserve for dividends topolicyholders (subsidiary)

328

308

Loans

569,127

571,420

Agency payables

114

112

Tangible fixed assets:

219,883

244,823

Reinsurance payables

103

103

Land

125,118

146,816

Subordinated bonds

191,935

241,935

Buildings

87,48092,773

Other liabilities

132,340

156,292

Lease assets

933

618

Net defined benefit liabilities

34,61428,762

Construction in progress

2,866

93

Reserve for price fluctuation

133,162

183,520

Other tangible fixed assets

3,484

4,521

Deferred tax liabilities

025,857

Intangible fixed assets:

33,35930,355

Deferred tax liabilities for land
revaluation

14,213

14,184

Software

19,88919,877

Total liabilities

8,021,628

8,069,294

Lease assets

8,666

6,015

Net assets:

Other intangible fixed assets

4,803

4,462

Foundation funds

12,00012,00000Accumulated foundation funds
redeemed

116,000

116,000

124

170

Reserve for revaluation

112

112

74,05955,447

Consolidated surplus

127,315

131,699

255

339

255,427

259,811

Deferred tax assets

31,885732

292,980

465,855

Allowance for possible loan losses(2,024)(4,386)

Revaluation reserve for land,
net of tax

4,102

4,185

Foreign currency translation
adjustment

(480)

(571)

Accumulated remeasurementsof defined benefit plans(7,714)(3,703)

Total accumulated othercomprehensive income

288,888465,765

Non-controlling interests

8,523

8,568

552,839

734,1458,574,467

8,803,440

Monetary claims bought
Money held in trust
Securities

Agency receivables
Reinsurance receivables
Other assets
Net defined benefit assets

Policy reserve

Total foundation funds, surplus
and others
Net unrealized gains (losses) on
available- for-sale securities,
net of tax

Total net assets
Total assets

8,574,467

8,803,440

39

Total liabilities and net assets

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
Gains on derivative instruments, net
Reversal of allowance for possible loan losses
Other investment income
Gains on separate accounts, net
Other ordinary revenues
Total ordinary revenues
Ordinary expenses:
Claims and other payments
ClaimsAnnuities
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 trading securities, net
Losses on sales of securities
Losses on valuation of securities
Losses on derivative instruments, net
Foreign exchange losses, net
Provision of allowance for possible loan losses
Write-offs of loans
Depreciation of real estate for rent and other assets
Other investment expenses
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
OthersTotal extraordinary losses
Provision of reserve for dividends to policyholders (subsidiary)
Surplus before income taxes
Income taxes:
Current
Deferred
Total income taxes
Net surplus
Net surplus (loss) attributable to non-controlling interests
Net surplus attributable to the parent company

40

Year ended
March 31, 2020

Year ended
March 31, 2021

629,956
219,379
175,964
314—
37,162
5,577
70
289
—
15,067864,402584,794
229,442
175,540
1,127
6,523
26,764——170
19,315
109,905
924,142592,144
100,635
260,181
123,451
81,76026,11636,650—36,63713
057,587
3,885
4,979
1,935
13,342—
17,547
—
262
4,288
7,389
3,955
100,850
27,141
814,374
50,028657,932
85,657352,581
116,736
76,283
26,673
106
92
—
13
0
48,142
4,113—
11,809404
12,967
4,604
2,369
—
4,427
7,444
—
99,99727,923
834,101
90,040

5
5

133
133

183
38
11,804—
12,026
172
37,834801
198
50,357
1,059
52,417
168
37,58814,183(10,666)
3,516
34,317(70)
34,388

11,950(10,603)
1,346
36,241
125
36,116

Fukoku Mutual Life Insurance Company

(4) Consolidated Statements of Operations and Comprehensive Income (Continued)[Consolidated Statements of Comprehensive Income](Millions of yen)

Year ended
March 31, 2020

Year ended
March 31, 2021

Net surplus

34,31736,241Other comprehensive income:(61,825)

176,717

Net unrealized gains (losses) on available-for-sale securities, net of tax(59,644)

172,797

16(91)

Remeasurements of defined benefit plan, net of tax(2,197)

4,011

Comprehensive income:(27,507)

212,959

Comprehensive income attributable to the parent company(27,264)

212,910(242)

48

Foreign currency translation adjustments

Comprehensive income attributable to non-controlling interests

41

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 net defined benefit liabilities
Increase (decrease) in reserve for price fluctuation
Interest, dividends and other income
Losses (gains) on securities, net
Interest expenses
Foreign exchange losses (gains), net
Losses (gains) on tangible fixed assets, net
Decrease (increase) in agency receivable
Decrease (increase) in reinsurance receivable
Decrease (increase) in other assets except from investing and financing activities
Increase (decrease) in agency payable
Increase (decrease) in reinsurance payable
Increase (decrease) in other liabilities except from investing and financing activities
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:
Proceeds from issuance of subordinated bonds
Financing of additional foundation funds
Redemption of foundation funds
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 fiscal year
Cash and cash equivalents at the end of the fiscal year

42

Year ended
March 31, 2020

Year ended
March 31, 2021

37,834
4,288
12,55938(963)
36,637
13
0
172
(72)
(985)
11,804(175,964)(18,840)
3,885
17,547
144
1
49
(181)
(3)
14
(50)
18,415(53,655)
181,158(3,861)(31,938)(309)(12,443)
78,95037,588
4,427
13,542
198
92(98,999)
13
0
168
2,362
(365)
50,357(175,540)(28,549)
4,113
4,604
590
(0)
(45)
(540)
(2)
0
82
17,629(168,270)
178,058(3,933)(29,252)(188)(14,932)(38,518)(401)
29(1,000)1,000(547,377)
741,782(92,007)
78,936
14,231
67,866(6,860)256,199
335,150(9,644)148(7,423)
239,280(4,753)29(1,500)1,500(839,487)
742,811(96,899)
87,839(31,354)(6,047)(7,463)(155,325)(193,844)(33,165)387(8,218)(196,321)—
12,000(10,000)(100)(9)(3,223)(1,333)(514)
316,383
328,124
644,507

50,000
—
—
(102)
(3)
(3,533)46,361(205)(188,684)
644,507455,823

Fukoku Mutual Life Insurance Company

(6) Consolidated Statements of Changes in Net Assets[For the year ended March 31, 2020](Millions of yen)Foundation funds, surplus and others

Balance at the beginning of the fiscal year

Foundation funds

Accumulated
foundation funds
redeemed

10,000106,000

Reserve forrevaluation

112

Consolidated
surplus

Total foundation
funds, surplus andothers137,669

253,781

Changes in the fiscal year
Financing of additional foundation funds

12,00012,000Additions to reserve for dividends topolicyholders(34,671)

Additions to accumulated foundation funds
redeemed

10,00010,000

Payment of interest on foundation funds
Net surplus attributable to the parent company
for the fiscal year
Redemption of foundation funds(34,671)

(100)

(100)

34,38834,388(10,000)(10,000)

Reversal of reserve for redemption offoundation funds(10,000)(10,000)

29

29

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

2,000

10,000—(10,353)

1,646

Balance at the end of the fiscal year

12,000116,000

112

127,315

255,427

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 fiscal year

352,453

Foreign currencytranslation
adjustments

Accumulated
remeasurementsof defined
benefit plans(496)(5,517)

4,132

Total accumulated
other comprehensive
income350,571

Non-controllinginterests

Total net assets

8,774

613,127

Changes in the fiscal year
Financing of additional foundation funds

12,000Additions to reserve for dividends topolicyholders(34,671)

Additions to accumulated foundation funds
redeemed

10,000

Payment of interest on foundation funds(100)

Net surplus attributable to the parent company
for the fiscal year

34,388

Redemption of foundation funds(10,000)

Reversal of reserve for redemption offoundation funds(10,000)

Reversal of revaluation reserve for land,
net of tax

29

Net changes, excluding foundation funds,
surplus and others(59,472)(29)

16(2,197)(61,683)(251)(61,934)

Total changes in the fiscal year

(59,472)(29)

16(2,197)(61,683)(251)(60,288)

Balance at the end of the fiscal year

292,980

4,102

(480)

(7,714)

288,8888,523

552,839

43

Fukoku Mutual Life Insurance Company

[For the year ended March 31, 2021](Millions of yen)Foundation funds, surplus and others

Balance at the beginning of the fiscal year

Foundation funds

Accumulated
foundation funds
redeemed

12,000116,000

Reserve forrevaluation

112

Consolidated
surplus

Total foundation
funds, surplus andothers127,315

255,427(31,547)(31,547)

(102)

(102)

36,116

36,116(83)(83)

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

—

—

—

4,383

4,383

12,000116,000

112

131,699

259,811

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 fiscal year

292,980

Foreign currencytranslation
adjustments

Accumulated
remeasurementsof defined
benefit plans(480)(7,714)

4,102

Total accumulated
other comprehensive
income288,888

Non-controllinginterests

Total net assets

8,523

552,839

Changes in the fiscal year
Additions to reserve for dividends topolicyholders(31,547)

Payment of interest on foundation funds(102)

Net surplus attributable to the parent company
for the fiscal year

36,116

Reversal of revaluation reserve for land,
net of tax(83)

Net changes, excluding foundation funds,
surplus and others

172,874

83

(91)

4,011

176,87745

176,923

Total changes in the fiscal year

172,874

83

(91)

4,011

176,87745

181,306

Balance at the end of the fiscal year

465,855

4,185

(571)

(3,703)465,7658,568

734,145

44

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 MutualLife Insurance Company (the “Company”) and its consolidated subsidiaries in accordance with the provisions set forth in the
Insurance Business Act of Japan and its related rules 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 andjurisdictions other than Japan.
In addition, the notes to the 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.

2. Principles of Consolidation(1) Scope of Consolidation
Consolidated subsidiaries as of March 31, 2021 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 ofsales, net surplus for the period and surplus and are sufficiently insignificant to reasonable judgement on 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 their impact
on net surplus attributable to the parent company and consolidated surplus, and also immaterial as a whole, therefore,
application of equity method is not applied.
There are no affiliates for the year ended March 31, 2021.
(3) Fiscal Year of Consolidated Subsidiaries
Among the subsidiaries to be consolidated, fiscal year-end of overseas subsidiaries are December 31. For the
preparation of consolidated financial statements, financial statements as of that date are used and concerning any
important transaction taking place in between December 31 and the consolidated closing date, necessary
adjustments for consolidation are made.

45

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 to securities,
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) Policy-reserve-matching bonds are stated at amortized cost under the straight-line method, cost being determined by
the moving average method in accordance with “Temporary Treatment of Accounting and Auditing Concerning
Policy-reserve-matching Bonds in the Insurance Industry” (Industry Audit Committee Report No.21 issued by theJapanese Institute of Certified Public Accountants on November 16, 2000).
iv) Investments in unconsolidated subsidiaries and affiliates which are not accounted for under the equity
method are stated at cost, cost being determined by the moving average method.
v) Available-for-sale securities with fair market value are stated at fair market value based on the market
prices at the end of the fiscal year. Costs of their sales are determined by the moving average method. Net
unrealized gains or losses on these available-for-sale securities, net of taxes, are recorded as a separate
component of net assets.
Available-for-sale securities whose market value are deemed extremely difficult to obtain are stated at cost,
cost being determined by the moving average method, except for public and corporate bonds including
foreign bonds, of which the difference between acquisition cost and face value is considered to be an
adjustment of interest. Such bonds are stated at amortized cost under the straight-line method, cost being
determined by the moving average method.
(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, netof related taxes, is recorded as revaluation reserve for land as a separate component of net assets and the related tax isrecorded 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.
(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 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.

46

Fukoku Mutual Life Insurance Company

(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 ofacquisition.
(6) Allowance for possible loan losses for the Company is provided in accordance with the standards of self-assessment andwrite-offs and reserves on credit quality:i) For the credits of borrowers who are legally bankrupt such as being in the proceedings of bankruptcy or civil
rehabilitation (hereinafter called “legally bankrupt borrowers”) and who are substantially bankrupt (hereinafter
called “substantially bankrupt borrowers”), the Company provides the remaining amounts of credits after the
direct write-off described below and the deductions of the amount expected to be collected through the disposal ofcollateral 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 by multiplying theborrowers’ 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 self- assessment on
credit quality. The results of the assessment are reviewed by the audit department, which is independent ofbusiness-related divisions. Subsequently, the allowance for possible loan losses is provided based on the results of theseassessments.
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 directlyfrom the borrowers’ balances as the estimated uncollectible amounts. The amount written-off as of March 31, 2021 was¥0 million.
(7) 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 the balance
sheet date based on the projected retirement benefits as of the current fiscal year end.
The Company uses the following methods of accounting in relation to retirement benefits:• Method for allocation of projected retirement benefits ........................

Benefit formula basis• Amortization period of actuarial gains and losses.................................

10 years• Amortization period of prior service cost..............................................

10 years(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, March 10,2008). 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 inforeign currencies issued by the Company.
For assessing the effectiveness of hedge used, ratio analysis of comparing the fluctuations in the fair value or cash flowsof hedged items and hedging instruments is mainly applied.
47

Fukoku Mutual Life Insurance Company

(10) 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, aredeferred as prepaid expenses and amortized equally over five years. Consumption taxes other than deferredconsumption taxes are recognized as an expense when incurred.

(11) 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 as of the endof the fiscal year is accumulated as policy reserve in accordance with Article 116 of the Insurance Business Act andArticle 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.
(12) 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 Regulation of the
Insurance Business Act, reserve for outstanding claims are accumulated as for claims for which the Company has apayment due but has not paid, or for which the occurrence of cause for payment has not been reported but the Company
recognizes that insured payment has already occurred as of the end of the fiscal year.
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.
(13) Policy reserve of the Company is accumulated in accordance with the methods stated in the statement of calculation
procedures for Insurance Premiums and Policy Reserves (Article 4 Paragraph 2 Item 4 of the Insurance Business Act)
pursuant to Article 116 Paragraph 1 of the Insurance Business Act to prepare for the future performance of obligations
under the insurance contracts for which the insurer’s responsibilities have started as of the end of the fiscal year.
Premium reserves, one of the components of policy reserve, are calculated by the following method.
i) In regard to the policies subject to the standard policy reserve, the method as prescribed by the Commissionerof Financial Services Agency (Ministry of 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.
Appointed actuaries, for each fiscal year, verify whether a portion of the policy reserve is reasonably accumulated inaccordance with Article 121 Paragraph 1 of the Insurance Business Act and Article 80 of the Enforcement Regulation of
the Insurance Business Act.
Contingency reserves, one of the components of policy reserve, are accumulated pursuant to Article 116 of the Insurance
Business Act and Article 69 Paragraph 1 Item 3 of the Enforcement Regulation of the Insurance Business Act to coverrisks that may accrue in the future in order to ensure performing future obligations under the insurance contracts.
The balance of policy reserve as of the end of the fiscal year calculated indicated above includes policy reserve that was
additionally accumulated as follows in accordance with Article 69 Paragraph 5 of the Enforcement Regulation of the
Insurance Business Act.
Among individual annuity insurance policies with an assumed interest rate of 5.00% or higher, for policies that havebegun paying annuities (excluding wife’s annuity insurance additional rider), the Company reduced the assumed interest
rate to 1.00% and funded additional policy reserves. As of March 31, 2021, the balance of these policy reserves was¥73,354 million.
48

Fukoku Mutual Life Insurance Company

The Company also funded additional policy reserves for certain individual annuity insurance policies, whole life
insurance policies that include distribution of surplus every five years and new cancer riders. As of March 31, 2021,
the balance of these policy reserves was ¥1,654 million.
(14) 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.
(15) Of the bonds corresponding to the sub-groups of individual insurance and annuities which are set by insurance types andinvestment policies, the bonds that are held to match the duration of liabilities are classified as policy- reserve-matching
bonds by the Company 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 theJapanese Institute of Certified Public Accountants on November 16, 2000).

2. Primary accounting standards that have been issued by the end of the consolidated fiscal year ended March 31, 2021 but
have not been applied are as follows.
Methods of calculating the fair value will be revised in response to the announcements of accounting standards such as“Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July 4, 2019), “Accounting Standard for
Financial Instruments” (ASBJ Statement No. 10, July 4, 2019) and “Implementation Guidance on Accounting Standard
for Fair Value Measurement” (ASBJ Guidance No. 31, July 4, 2019).
These accounting standards and this guidance must be applied at the beginning of the fiscal year starting on April 1, 2021
and the Company plans to apply these accounting standards and this guidance at the beginning of the fiscal year ending
March 31, 2022.
The Company is currently in the process of evaluating the effects of applying these accounting standards and thisguidance for the consolidated fiscal year ending March 31, 2022.

3. Asset management of the general accounts other than the separate accounts stipulated in Article 118 Paragraph 1 of the
Insurance Business Act is conducted on the principle of prudent and profitable investments by the Company, considering
public and social responsibilities of the insurance business. Based on this policy, the Company allocates the fund, securing
its liquidity, from the medium-to-long term viewpoints. The Company is diversifying investments in assets such as foreign
securities, stocks and real estates within the acceptable range of risk in order to enhance the profitability, althoughyen-denominated interest bearing assets including debt securities such as Japanese government bonds and loans are thecores of the portfolios under the asset liability management. Derivatives are mainly used to hedge the market risk regarding
spot-priced assets and liabilities.
Major financial instruments including securities, loans and derivatives are exposed to market risk and credit risk.
The Company manages its asset management risk by establishing internal control systems including various rules
pursuant to the “Three Basic Rules related to Enterprise Risk Management” established by the Board of Directors.
Specifically, the Company eliminates excessive risk deviating from the basic principle and secures the safety of the assets
by utilizing control functions of the Financial and Investment Risk Management Department towards the asset
management sections, monitoring the status of market risk and credit risk periodically on a daily or monthly basis. In
addition, the Company quantifies the market risk and credit risk using value-at-risk (VaR) method in order to control thepossible maximum losses which may arise from the holding assets within a certain range of risk buffers.

49

Fukoku Mutual Life Insurance Company

The carrying amounts, fair values and their related differences of major financial assets and liabilities in the generalaccount as of March 31, 2021 were as follows:(Millions of yen)

Carrying amount

Cash and deposits:
Cash and deposits not treated as securities………………..
Total cash and deposits…....................................................
Call loans………………………………………………..…….
Monetary claims bought:
Claims treated as loans…….................................................
Total monetary claims bought.......………...........................
Money held in trust:
Trading securities...................................…………………..
Total money held in trust.....................................................
Securities:
Trading securities..................................……………….......
Held-to-maturity debt securities...........................................
Policy-reserve-matching bonds................……………........
Available-for-sale securities...................………………......
Total securities..........................................…………...........
Loans:
Policy loans..............................................……………........
Ordinary loans...........................................…………….......
Total loans................................................……………........
Assets total......................................................…………..……....
Subordinated bonds1................................…….…………..........
Liabilities total….......................................……...........................
Derivative instruments2:
Hedge accounting not applied.................…….....................
Hedge accounting applied……............................................
Total derivative instruments.......................……………......

Fair value

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

¥—
—
—

239
239

254
254

14
14

24,277
24,277

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

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

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

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

(3,394)(37,644)¥ (41,039)(3,394)(37,644)¥ (41,039)——¥—

Notes: 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.
Notes: 2. Assets and liabilities generated by derivative instruments are offset and presented net. Net liabilities in total arepresented in brackets.

(1) Cash, deposits (excluding financial instruments treated as securities based on “Accounting Standards for Financial
Instruments” (ASBJ Statement No.10, March 10, 2008)) and call loans:
The fair values of cash, deposits and call loans are based on their book values since fair values approximate book values
due to their short maturities.
(2) Securities including deposits and monetary claims bought which are treated as securities based on “AccountingStandards for Financial Instruments” (ASBJ Statement No.10, March 10, 2008) and securities managed as trust assets inmoney held in trust:
The fair values of marketable securities are measured at the quoted market prices at the balance sheet date. The fairvalues of other securities without the quoted market prices are based on the prices reasonably calculated such as theprices offered by the information vendors or counterparty financial institutions.
Investments in unconsolidated subsidiaries and affiliates, unlisted stocks and investments in partnerships whereby
partnership assets consist of unlisted stocks whose fair values are deemed extremely difficult to obtain, are excluded
from above securities. The carrying amounts of investments in unconsolidated subsidiaries and affiliates, unlisted
stocks and investments in partnerships were ¥404 million, ¥6,224 million, and ¥29,744 million as of March 31, 2021,
respectively.
50

Fukoku Mutual Life Insurance Company

(3) Loans and monetary claims bought treated as loans:
The fair values of policy loans are deemed to approximate book values, considering estimated repayment period andinterest rate conditions since their repayment deadlines have not been set up due to the characteristics that the loans arelimited 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 and monetary claims bought treated as loans
approximate the book values because the market interest rates are reflected in future cash flows in a short period.
Therefore, the fair values of floating interest rate loans and monetary claims bought treated as loans are based on theirbook values. The fair values of fixed interest rate loans are measured by discounting the future cash flows to the present
values.
The fair values of loans from legally bankrupt borrowers, substantially bankrupt borrowers and not currently bankrupt
borrowers and monetary claims bought treated as loans are computed by deducting the amount of the allowance forpossible loan losses from the book values before direct write-offs.
(4) Subordinated bonds:
Subordinated bonds issued by the Company are stated at fair market values.
(5) Derivative instruments:i) The fair values of the futures and options traded at the exchange are measured at the settlement price of theexchange.
ii) The fair values of forward contracts, options and swaps traded over the counter are based on the quoted prices
offered by counterparty financial institutions.
iii) The fair values of foreign currency forward contracts are determined based on the spot exchange rate andforward contract rate.

4. The Company holds investment and rental properties such as office buildings in Tokyo and other areas. The carrying
amounts and the fair values of investment and rental properties were ¥192,277 million and ¥323,000 million as of March 31,
2021, respectively. The fair value is mainly based on the value calculated by the Company in accordance with real estateappraisal standards which includes some adjustments using the reference prices.
The amount corresponding to asset retirement obligations included in the carrying amount of investment and rental
properties was ¥417 million as of March 31, 2021.

5. The amount of securities lent under lending agreements was ¥465,351 million as of March 31, 2021.

6. The total amounts of credits to bankrupt borrowers, delinquent loans, delinquent loans past 3 months or more andrestructured loans, which were included in loans, was ¥3,216 million as of March 31, 2021:
i) The balance of credits to bankrupt borrowers was ¥164 million as of March 31, 2021.
ii) The balance of delinquent loans was ¥2,522 million as of March 31, 2021.
iii) The balance of restructured loans was ¥529 million as of March 31, 2021.
iv) There was no balance of delinquent loans past 3 months or more as of March 31, 2021.
The direct write-offs related to loans decreased credits to bankrupt borrowers described above by ¥0 million as of March
31, 2021.
Credits to bankrupt borrowers represent loans, excluding the balances already written-off, which meet the conditionsprescribed in Article 96 Paragraph 1 item 3 and 4 of the Enforcement Regulations of the Corporate Tax Act. Moreover,51

Fukoku Mutual Life Insurance Company

accrued interest on these loans is not recorded as income after determining that principal of or interest on these loans isunlikely to be collected due to the significant delay in repayment of principal or interest payment or for some otherreasons.
Delinquent loans are credits which accrued interest is not recorded as income due to the same reasons as described above,and exclude credits to bankrupt borrowers and loans for which interest payments have been suspended and rescheduled toassist and support the borrowers in the restructuring of their business.
Delinquent loans past 3 months or more are loans for which interest payments or repayments of principal are delinquent
for 3 months or more from the due date under the terms of the related loan agreements, excluding those loans classified as
credits to bankrupt borrowers and delinquent loans.
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, havebeen negotiated for the purpose of assisting and supporting the borrowers in the restructuring of their business. This
category excludes loans classified as credits to bankrupt borrowers, delinquent loans and delinquent loans past 3 months
or more.

7. Accumulated depreciation of tangible fixed assets were ¥174,603 million as of March 31, 2021.

8. Total assets in separate accounts provided for in Article 118 of the Insurance Business Act were ¥104,979 million as ofMarch 31, 2021. The amounts of separate account liabilities were the same as separate account assets.

9. The total amounts of receivables from/payables to unconsolidated subsidiaries were ¥2,980 million and ¥37 million as ofMarch 31, 2021, respectively.

10. Deferred tax assets and deferred tax liabilities as of March 31, 2021 were ¥165,511 million and ¥185,492 million,
respectively. Valuation allowance for deferred tax assets was ¥5,144 million.
Major components of deferred tax assets were ¥90,790 million of policy reserves, ¥51,385 million of reserve for pricefluctuation and ¥13,291 million of net defined benefit liabilities as of March 31, 2021.
Major component of deferred tax liabilities was ¥180,162 million of net unrealized gains on available-for-sale securities
as of March 31, 2021.
The statutory tax rate and the actual effective tax rate for the year ended March 31, 2021 were 28.0% and 3.6%,
respectively. The difference between the statutory tax rate and the actual effective tax rate was attributable mainly to-24.4% of reserve for dividends to policyholders.

11. Changes in reserve for dividends to policyholders for the year ended March 31, 2021 were as follows:(Millions of yen)

Balance at the beginning of the fiscal year….......................................................

¥ 60,922

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

31,547

Dividend payments to policyholders during the fiscal year…..………………...

(29,252)

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

13

Balance at the end of the fiscal year.....................................................................

¥ 63,232

52

Fukoku Mutual Life Insurance Company

12. Changes in reserve for dividends to policyholders (Fukokushinrai Life Insurance Co., Ltd.) for the year ended
March 31, 2021 were as follows:(Millions of yen)

Balance at the beginning of the fiscal year….......................................................

¥ 328

Dividend payments to policyholders during the fiscal year…..………………...

(188)

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

0

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

168

Balance at the end of the fiscal year.....................................................................

¥ 308

13. The amount of stocks of unconsolidated subsidiaries was ¥404 million as of March 31, 2021.

14. Assets pledged as collateral as of March 31, 2021 were ¥99,608 million of securities and ¥790 million of bank deposits.
Secured debts as of March 31, 2021, were ¥67,546 million.
These amounts include ¥60,241 million of investments in securities deposited and ¥61,819 million of cash received ascollateral under securities lending transactions secured by cash as of March 31, 2021.

15. Reserve for outstanding claims for the reinsurance contracts provided in accordance with Article 71 Paragraph 1 of the
Enforcement Regulation of the Insurance Business Act (hereinafter called “reserve for outstanding claims for ceded
reinsurance”) was ¥26 million as of March 31, 2021.
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 ¥49 million as ofMarch 31, 2021.

16. There were unused commitment line agreements under which the Company is the lender of ¥8,733 million as of March 31,
2021.

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

18. The future contribution to the Life Insurance Policyholders Protection Corporation of Japan under Article 259 of the
Insurance Business Act was estimated at ¥9,833 million as of March 31, 2021.
The contribution is recognized as operating expenses when contributed.

19. Matters Related to Employees’ Retirement Benefits as of March 31, 2021
(1) Overview of Employees’ Retirement Benefit Plan
As for a defined benefit plan for office-based employees, the Company and its consolidated subsidiaries have adefined benefit corporate pension plan and retirement lump-sum payments. As for a defined contribution plan for these
employees, the Company also has a defined contribution pension plan.
As for a defined benefit plan for sales employees, the Company has retirement lump-sum payments.

53

Fukoku Mutual Life Insurance Company

The Company places a retirement benefit trust in relation to the retirement lump-sum grant plan for sales employees.
The simplified method for calculating retirement benefit obligation is applied to a portion of the Company and someconsolidated subsidiaries’ retirement lump-sum grant plans.
(2) Defined Benefit Plani) Reconciliation of beginning and end of balance of retirement benefit obligation(Millions of yen)

Retirement benefit obligation at the beginning of the fiscal year…….………

¥ 88,356

Service cost………………………………………………………….……..

3,551

Interest cost………………………………………………………….……..

526

Actuarial differences occurred during the fiscal year……………………..
Retirement benefit payments………………………………………………
Prior service costs occurred during the fiscal year………………………...

2,881(4,317)54

Retirement benefit obligation at the end of the fiscal year……………………

¥ 91,051

ii) Reconciliation of beginning and end of balance of pension plan assets(Millions of yen)

Pension plan assets at the beginning of the fiscal year……………….………

¥ 53,996

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

867

Actuarial differences occurred during the fiscal year……………………..

6,673

Contributions by the employer…………………………………………....

2,666

Retirement benefit payments………………………………………………
Others………………………………………………………………………

(1,579)2

Pension plan assets at the end of the fiscal year…………………..….………

¥ 62,627iii) Reconciliation of retirement benefit obligation and pension plan assets with net defined benefit
liabilities and assets presented on the consolidated balance sheet(Millions of yen)a. Funded plan retirement benefit obligation…………………………………
b. Pension plan assets……………………………….…………….…………..

¥ 78,551(62,627)c. (a + b)…………………………………………………………….………...
d. Unfunded plan retirement benefit obligation……………………………....

15,924
12,499e. Net amount of liabilities and assets presented
on the consolidated balance sheet……………………………….……….
f. Net defined benefit liabilities…………………………………………..…..
g. Net defined benefit assets………………………………………………….

28,42328,762(339)

h. Net amount of liabilities and assets presented
on the consolidated balance sheet………………………………….…….

¥ 28,423

iv) Breakdown of retirement benefit gains and losses(Millions of yen)

Service cost…………………………………………..…………………….…
Interest cost………………………………..……….…………….……….…..

¥ 3,551
526

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

(867)

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

1,905

Amortization of prior service costs………………………………………..….
Others…………………………………………………………………………

(72)
(2)

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

¥ 5,039

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Fukoku Mutual Life Insurance Company

v) Remeasurements of defined benefit plan
Remeasurements of defined benefit plan (before tax effects) comprised the following:(Millions of yen)Amortization of actuarial differences….…………………………..….….…
Amortization of prior service cost………...……………………..…...……..

¥ 5,698(126)

Total…………………………………………………………………………

¥ 5,571vi) Accumulated remeasurements of defined benefit plan
Accumulated remeasurements of defined benefit plan (before tax effects) comprised the following:(Millions of yen)

Unrecognized actuarial differences….………………………………..….…
Unrecognized prior service cost……...……………………………………..

¥ (5,111)(31)

Total……….……………………………………………………………….....…

¥ (5,143)vii) Breakdown of pension plan assets
The breakdown of asset categories as a percentage of total pension plan assets were as follows:
Domestic stocks…………………………………..……...…………………
Life insurance general account…………..……….………………...……....

42.6%
32.3%

Domestic bonds………………………….……………………..…………...

9.8%

Foreign stocks………………………………………………..……..……....

8.8%

Assets under joint management……………………………….………..…..
Foreign bonds…………………………………………..……………………

3.3%
3.2%

Total……….……………………………………………..…………….....…

100.0%

Within the total of pension assets, 35.4% of this amount is accounted for by the retirement benefit trust established inrelation to the retirement lump-sum payments plan for sales employees.
viii) Method for setting the expected long-term rate of return
To set the expected long-term rate of return on pension plan assets, the Company takes into account the present andfuture allocation of pension plan assets, and the present and expected future long-term rate of return on a variety ofassets that makes up the pension assets.
ix) Underlying actuarial assumptions
Main underlying actuarial assumptions as of March 31, 2021, were as follows:
Discount rate………………………………..………….…………….…..…
Expected long-term rate of return on pension plan assets

0.6%

Defined Benefit Plan….…………………………………………………...
Retirement benefit trust………………………………..……..…………....

2.5%
0.0%

(3) Defined Contribution Plan
The required contribution amount by the Company and its consolidated subsidiaries to the defined contribution plan was¥334 million as of March 31, 2021.

55

Fukoku Mutual Life Insurance Company

III. Notes to the Consolidated Statements of Operations
1. The total amounts of revenues and expenses in connection with unconsolidated subsidiaries were ¥93 million and ¥1,355
million for the year ended March 31, 2021.

2. For the year ended March 31, 2021, in calculating the provision of reserve for outstanding claims, a provision of reserves foroutstanding claims reinsured of ¥24 million was deducted. In calculating the reversal of policy reserves, a provision ofreserves for policy reserves reinsured of ¥0 million was added.

3. “Others” within “Extraordinary losses” consists of expenses associated with salary guaranties provided to sales
representatives as a countermeasure aimed at preventing the spread of COVID-19.

IV. Notes to the Consolidated Statements of Comprehensive Income
1. Other Comprehensive Income
The reclassification adjustments and tax effect amounts related to other comprehensive income for the year ended March
31, 2021 were as follows:i) Net unrealized gains (losses) on available-for-sale securities, net of tax(Millions of yen)Amount incurred during the fiscal year………………………….…………

¥ 256,428

Reclassification adjustments…………………………..……..……………..

(17,606)

Before tax adjustments…………………………………………………….

238,821Tax effects……………………………………………………..…………..

(66,023)

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

¥ 172,797

ii) Foreign currency translation adjustments(Millions of yen)Amount incurred during the fiscal year…………………………….………

¥ (91)

Reclassification adjustments…………………………..………..…………..

—

Before tax adjustments…………………………………………………….

(91)

Tax effects……………………………………………………..…………..

—

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

¥ (91)

iii) Remeasurements of defined benefit plans, net of tax(Millions of yen)Amount incurred during the fiscal year…….………………………………

¥ 3,738

Reclassification adjustments…………………………..………..…………..

1,833

Before tax adjustments…………………………………………………….

5,571

Tax effects……………………………………………………..…………..

(1,559)Remeasurements of defined benefit plans, net of tax………….………….

4,011

Total other comprehensive income………………………………………..

¥ 176,717

56

Fukoku Mutual Life Insurance Company

V. Notes to the Consolidated Statements of Cash Flows
1. Cash and cash equivalents as of March 31, 2021 consist of "Cash," "Deposits in transfer account," "Current deposits,""Ordinary deposits," "Notice deposits," "Time deposits maturing within 3 months of the date of acquisition," "Foreign
currency deposits maturing within 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 ofacquisition."

2. Reconciliations of cash and cash equivalents in the consolidated statements of cash flows to the consolidated balance sheet
accounts as of March 31, 2021 were as follows:(Millions of yen)

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

¥ 325,854

Call loans...........................................................…….............................................

136,000

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

239

Time deposits maturing over 3 months of the date of acquisition.........................

(5,100)Foreign currency deposits maturing over 3 months of the date of acquisition…..

(931)

Monetary claims bought maturing over 3 months of the date of acquisition…….

(239)

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

¥ 455,823

57

Fukoku Mutual Life Insurance Company

(7) Risk-monitored Loans(Millions of yen)

As of March 31, 2020

As of March 31, 2021

Credits to bankrupt borrowers

173

164

Delinquent loans

698

2,522

Delinquent loans past three months or more——

Restructured loans

227

529

1,099
[0.19%]

3,216[0.56%]

Total[Percentage of total loans]

Notes: 1. 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 is written-off directlyfrom the borrower’s balance as the estimated uncollectible amounts. The amounts written-off related to credits tobankrupt borrowers were ¥0 million as of March 31, 2020 and ¥0 million as of March 31, 2021.
Notes: 2. Credits to bankrupt borrowers represent loans which are subject to bankruptcy, corporate reorganization or
rehabilitation or other similar, including but not limited to foreign, proceedings. Accruing interest of these loans is
not recorded as income after determining that principal of or interest on these loans is unlikely to be collected dueto the significant delay in repayment of principal or interest payment or for some other reasons.
Notes: 3. Delinquent loans are credits whose accruing interest is not recorded as income due to the same reasons as
described in note 2 above, and exclude credits to bankrupt borrowers and loans for which interest payments havebeen suspended and rescheduled to assist and support the borrowers in the restructuring of their business.
Notes: 4. Delinquent loans past three months or more are loans for which interest payment or repayment of principal aredelinquent for three months or more from the due date under the terms of the related loan agreements, excluding
those loans classified as credits to bankrupt borrowers and delinquent loans.
Notes: 5. Restructured loans are loans for which certain concessions favorable to borrowers, such as interest reduction or
exemptions, rescheduling of due date 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 credits to bankrupt borrowers, delinquent loans and delinquent loans past
three months or more.

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Fukoku Mutual Life Insurance Company

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

As ofMarch 31, 2020

As ofMarch 31, 2021

1,616,409

1,931,765

Foundation funds and surplus

230,289

233,072

Reserve for price fluctuation

133,162

183,520

Contingency reserve

217,331232,253

—

—

1,538

1,911

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

366,504

581,556

Net unrealized gains on real estate × 85%

145,920

141,522

Sum of unrecognized actuarial differences and unrecognized prior service cost

(10,714)(5,143)

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

296,497

276,537

Qualifying subordinated debt

191,935

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——

43,944

44,599242,753

296,299

Total solvency margin(A)

Catastrophe loss reserve
General allowance for possible loan losses

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

(B)

Insurance risk

R1

23,16922,753General insurance risk

R5

—

—

Catastrophe risk

R6

—

—

3rd sector insurance risk

R8

10,033

10,030

Small amount and short-term insurance risk

R9

—

—

Assumed investment yield risk

R230,93430,145

Minimum guarantee risk

R7

—

—

Investment risk

R3

204,120

257,878

Business risk

R4

5,365

6,416

1,331.7%

1,303.9%

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.

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Fukoku Mutual Life Insurance Company

(9) Status of Insurance Claims Paying Ability of Insurance Subsidiaries(Solvency Margin Ratio)[Fukokushinrai Life Insurance Company](Millions of yen)

As ofMarch 31, 2020

As ofMarch 31, 2021

100,841

101,033

Foundation funds and surplus

70,11970,652

Reserve for price fluctuation

10,417

10,723

Contingency reserve

2,316

2,380

0

0

12,09011,165

—

—

2,344

2,347

Qualifying subordinated debt——

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

—

—

3,553

3,763

20,831

18,623

Total solvency margin(A)

General allowance for possible loan losses(Net unrealized gains (losses) on securities (before tax) and deferredhedge gains (losses) (before tax)) × 90%
Net unrealized gains on real estate × 85%
Excess amount of policy reserve based on full-time Zillmer method

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

(B)

Insurance risk

R1

444

419

3rd sector insurance risk

R8

122

137

Assumed investment yield risk

R2

365

341

Minimum guarantee risk

R7

—

—

Investment risk

R3

20,03817,898Business risk

R4

419

375

968.1%

1,084.9%

Solvency margin ratio(A)×100(1/2) × (B)Note: 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.

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Fukoku Mutual Life Insurance Company