May 26, 2016

Financial Results for the Year Ended March 31, 2016
Fukoku Mutual Life Insurance Company (President: Yoshiteru Yoneyama) announces financial results
for the year ended March 31, 2016.

[Contents]
1. Business Highlights･････････････････････････

P.1

2. Policies in Force by Coverage Type…………………

P.3

3. Investment Results of General Account Assets･････････････････････････

P.4

4. Non-consolidated Balance Sheets･････････････････････････

P.12

5. Non-consolidated Statements of Operations･････････････････････････

P.13

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

P.24

7. Non-consolidated Statements of Changes in Net Assets･････････････････････････

P.25

8. Non-consolidated Statements of Surplus･････････････････････････

P.27

9. Disclosed Claims Based on Categories of Obligors･････････････････････････

P.28

10. Risk-monitored Loans･････････････････････････

P.29

11. Solvency Margin Ratio･････････････････････････

P.30

12. Status of Separate Account･････････････････････････

P.31

13. Status of the Company, Subsidiaries and Affiliates･････････････････････････

P.39

Attached: Supplementary Materials for the Year Ended March 31, 2016

Fukoku Mutual Life Insurance Company

Financial Summary for the Year Ended March 31, 2016
1. Business Highlights(1) Policies in Force, New Policies and Surrendered and Lapsed Policies(i) Policies in Force
As of March 31, 2015
Number of policies

As of March 31, 2016

AmountNumber of policies(Thousands)

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

3,066

100.7

236,846

97.8

Individual annuities

739

97.5

28,71897.4

Subtotal

Changes(%, Pre-FYE)

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

3,109

101.4

234,174

98.9

715

96.8

27,833

96.9(Thousands)

Changes(%, Pre-FYE)

3,805

100.1

265,564

97.8

3,825

100.5

262,008

98.7

Group insurance－－

166,780

100.8

－

－

169,723101.8

Group annuities－－

21,232

104.6

－

－

21,18999.8

Notes: 1. Policy amounts for individual annuities are equal to (a) the funds to be held at the time annuity payments are to commence foran annuity 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.
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, 2015

Individual insurance

Net increase by
conversion

New business

Number of policies

AmountAmount(Thousands)

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

355

98.1

15,64998.0

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

14,513

91.3

1,136

1,590.2(Thousands)

21

125.8

724

128.3

744

127.6

(19)

－

377

99.4

16,37499.0

15,257

92.6

1,116

2,110.4

Group insurance

－

－

132

24.0

132

24.0

－

－

Group annuities

－

－

0

145.2

0

145.2

－

－

Individual annuities
Subtotal

Total
Year ended
March 31, 2016

Number of policies(Thousands)

Individual insurance

AmountChanges(%, YoY)(100 millionsof yen)

358

101.0

Net increase by
conversion

New businessAmountChanges(%, YoY)

16,316104.3(100 millions ofyen)AmountChanges(%, YoY)

14,915102.8(100 millionsof yen)1,400

Changes(%, YoY)

123.2

28

128.1

1,009

139.2

1,029

138.2

(20)

－

386

102.6

17,325105.8

15,945

104.5

1,379

123.6

Group insurance

－

－

452

340.7

452

340.7

－

－

Group annuities

－

－

30

13,528.6

30

13,528.6－－

Individual annuities
Subtotal

Notes: 1. Number of new policies is the sum of new business and policies after conversion.
2. Amount of new policies for individual annuities, both new business and net increase by conversion, is equal to the funds to be heldat the time annuity payments are to commence and special riders for term insurance attached to individual annuities.
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, 2015

Year ended
March 31, 2016
Changes(%, YoY)

Amount of surrender and lapse(100 millions of yen)

Surrender and lapse ratio (%)

Changes(%, YoY)

14,39993.4

13,41793.2

5.30(0.22)

5.05(0.25)

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

1

Fukoku Mutual Life Insurance Company

(2) Annualized Premiums(i) Policies in Force(100 millions of yen except percentage)

As of March 31, 2015

As of March 31, 2016

Changes(%, Pre-FYE)

Changes(%, Pre-FYE)

Individual insurance

2,736

99.5

2,748

Individual annuities

1,327

100.0

1,322

99.7

Total

4,064

99.7

4,071

100.2

1,066

100.5

1,075

100.8

Medical coverage and living benefits

100.4(ii) New Policies(100 millions of yen except percentage)

Year ended March 31, 2015

Year ended March 31, 2016

Changes(%, Pre-FYE)

Changes(%, Pre-FYE)

Individual insurance

192

96.9

Individual annuities

31

Total

224
70

Medical coverage and living benefits

200

104.2

128.1

34

107.2

100.4

234

104.6

93.2

70

100.0

Notes: 1. Annualized premiums are calculated by using coefficients based on the premium payment method. (For single premium
contracts, the amount is calculated by dividing the premium by the coverage period.)
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.
3. New policies include net increase by conversion.

(3) Selected Items of Statements of Operations(100 millions of yen except percentage)

Year ended March 31, 2015

Year ended March 31, 2016

Changes(%, Pre-FYE)

Changes(%, Pre-FYE)

Premium and other income

6,431

107.5

6,180

96.1

Investment income

2,137

110.7

1,866

87.3

Claims and other payments

4,903

97.3

5,905

120.4

Investment expenses

357

71.4

478

134.1

Ordinary profits

968

134.7

603

62.3

(4) Statements of Surplus(100 millions of yen except percentage)

Year ended March 31, 2015

Year ended March 31, 2016

Changes(%, Pre-FYE)

Changes(%, Pre-FYE)

Unappropriated surplus

930

118.7

655

70.4

Reserve for dividends to policyholders

366

116.2

352

96.0

Net surplus

325

165.3

65

20.0

Unappropriated surplus carried forward

237

87.8

237

100.0

Note: Unappropriated surplus for the years ended March 31, 2015 and 2016 included reversal of voluntary surplus reserve of¥3 million and ¥11 million, respectively.

(5) Total Assets(100 millions of yen except percentage)

Total assets

Year ended March 31, 2015

Year ended March 31, 2016

Changes(%, Pre-FYE)

Changes(%, Pre-FYE)

66,1192

106.4

64,898

98.2

Fukoku Mutual Life Insurance Company

2. Policies in Force by Coverage Type[As of March 31, 2016](Thousands of number, 100 millions of yen)

Individual insurance Individual annuities

Group insurance

Total

NumberAmountNumberAmountNumberAmountNumberAmountIllness and accident

2,161

160,713－682

17,430169,698

19,591331,095

Accident

1,019

22,054

197

543

2,400

5,524

3,616

28,122

－

－

－

－

1

5

1

5

948

58,453715

27,140

6

24

1,670

85,617

Accident

1,438

84

－

－

985

3

2,424

87

Illness

1,437

84

－

－

－

－

1,437

84

Others

1,961

94

－

－

1

0

1,963

94

Injury coverage

1,322

－

3

－

1,177

－

2,503

－

Surgical coverage

3,343

－

－

－

－

－

3,343

－

Disability coverage

260

15,007

0

10

－

－

260

15,017

Death coverage

OthersSurvival coverage
Hospitalization coverage(Thousands of number, 100 millions of yen)Group annuities

Survival coverage

Worker's asset formation
insurance and annuities

Total

NumberAmountNumberAmountNumberAmount9,642

21,189

16

352

9,658

21,541(Thousands of number, millions of yen)(Thousands of number, millions of yen)

Medical careinsurance

Hospitalization coverageGroup disability
insurance

NumberAmount287

98

Disability coverage

NumberAmount582

Notes: 1. Number of group insurance, group annuities, worker's asset formation insurance and annuities, medical care insurance
and group disability insurance show the number of insured.
2. Amounts in survival coverage for individual insurance and group insurance (other than annuity rider) show the sum ofsurvival benefits, survival claims and nursing care benefits. Amounts in survival coverage for individual annuities, annuity
rider for group insurance, worker's asset formation annuities (other than worker's asset formation funding annuities) show
the sum of (a) the funds to be held at the time annuity payments are to commence for an annuity for which annuity
payments have not yet commenced, and (b) the amount of policy reserve for an annuity for which payments havecommenced. Amounts in survival coverage for group annuities, worker's asset formation insurance and worker's asset
formation funding annuities show the amount of outstanding policy reserve.
3. Amounts in hospitalization coverage show daily hospitalization benefits.
4. Amount in hospitalization coverage for medical care insurance shows daily hospitalization benefits due to illness.
5. Amount for group disability insurance shows monthly disability benefits.

3

Fukoku Mutual Life Insurance Company

3. Investment Results of General Account Assets(1) Asset Composition(Millions of yen)

As of March 31, 2015

As of March 31, 2016

AmountAmountCash, deposits, call loans
Monetary claims bought
Money held in trust
Securities
Domestic bonds

Percentage

Percentage

282,969

4.3

312,405

4.9

870

0.0

813

0.0

34,3190.5

87,793

1.4

5,163,610

79.1

5,017,719

78.3

2,856,151

43.7

2,659,186

41.5

Domestic stocks

641,066

9.8

570,386

8.9

Foreign securities

1,583,778

24.3

1,700,012

26.5

Foreign bonds

1,287,302

19.7

1,505,637

23.5

296,475

4.5

194,374

3.0

Foreign stocks and other securities
Other securities

82,614

1.3

88,134

1.4

763,900

11.7

693,680

10.8

Policy loans

63,3111.0

61,4371.0

Ordinary loans

Loans

700,58810.7

632,2429.9

Real estate

223,794

3.4

212,879

3.3

Others62,7501.087,309

1.4

Allowance for possible loan losses(1,948)( 0.0)(1,850)( 0.0)

6,530,267

100.0

6,410,750

100.0

1,572,701

24.1

1,875,134

29.2

Total
Foreign currency denominated assets(2) Changes (Increase/Decrease) in Assets(Millions of yen)

Year ended
March 31, 2015

Cash, deposits, call loans

Year ended
March 31, 2016

99,63629,435

Monetary claims bought

(140)

(57)

Money held in trust

2,338

53,473365,107(145,891)

Domestic bonds(20,025)(196,964)

Domestic stocks

158,757(70,680)

Foreign securities

218,382

116,233

Foreign bonds

177,391

218,334

Foreign stocks and other securities

40,990(102,100)

7,993

5,520

(71,960)(70,219)

Securities

Other securities
Loans
Policy loans(1,895)(1,873)

Ordinary loans(70,065)(68,345)

Real estate(4,389)(10,914)

Others

5,847

24,559Allowance for possible loan losses
Total
Foreign currency denominated assets

4

333

97

396,771(119,516)

270,628

302,432

Fukoku Mutual Life Insurance Company

(3) Investment Income(Millions of yen)

Year ended
March 31, 2015

Interest, dividends and other income
Interest from deposits
Interest and dividends from securities
Interest from loans
Income from real estate for rent
Other interest and dividends
Gains on trading account securities
Gains from money held in trust, net
Gains from trading securities, net
Gains on sales of securities
Gains on sales of domestic bonds
Gains on sales of domestic stocks
Gains on sales of foreign securities
OthersGain on redemption of securities
Gain on derivative instruments, net
Foreign exchange gains, net
Reversal of allowance for possible loan losses
Other investment income
Total

136,700
14
107,138
15,464
13,832251－
2,349
35,232
25,221
8,746
3,458
12,940
76
－
－
2,041
270
69
201,885

Year ended
March 31, 2016

137,324
27
110,276
13,343
13,444231－
11,332－37,54830,067
2,934
4,546
－
－
－
－
77
360
186,642(4) Investment Expenses(Millions of yen)

Year ended
March 31, 2015

Interest expenses
Losses on trading account securities
Losses from money held in trust, net
Losses from trading securities, net
Losses on sales of securities
Losses on sales of domestic bonds
Losses on sales of domestic stocks
Losses on sales of foreign securities
Others
Losses on valuation of securities
Losses on valuation of domestic bonds
Losses on valuation of domestic stocks
Losses on valuation of foreign securities
Other losses on valuation of securities
Losses on redemption of securities
Losses from derivative instruments, net
Foreign exchange losses, net
Provision for allowance for possible loan losses
Write-off of loans
Depreciation of real estate for rent and other assets
Other investment expenses
Total

4,252
－
－
－
1,075
0
259
815
－
0
－
0
－
－
－
18,679
－
－
－
4,877
6,831
35,715

Year ended
March 31, 2016

4,314
－
－
12,422
5,820
－
2,701
3,119
－
－
－
－
－
－
－
3,549
8,600
－
－
4,482
6,340
45,532(5) Net Investment Income
Year ended
March 31, 2015

Net investment income

166,169
5(Millions of yen)
Year ended
March 31, 2016

141,110

Fukoku Mutual Life Insurance Company

(6) Other Information on Investments(i) Investment Yield by Asset Categories(%)

Year ended March 31, 2015

Year ended March 31, 2016

Cash, deposits, call loans(0.02)

0.06

Monetary claims bought

1.48

1.45

Money held in trust

7.35

32.88

Securities

3.27

2.57

Domestic bonds

2.45

2.09

Domestic stocks

3.31

3.53

Foreign securities

4.77

3.17

Foreign bonds

4.57

2.36

Foreign stocks and other securities

5.67

7.94

1.97

1.83

1.77

1.60

Real estate

2.28

2.41

Total

2.87

2.40

5.65

2.88

Loans
Ordinary loans

Overseas investments

Notes: 1. Investment yield above are calculated by dividing the net investment income by the average daily balance on a bookvalue basis.
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, 2015
Cash, deposits, call loans

Year ended March 31, 2016

167,043

185,218936

841

31,987

34,4654,410,141

4,540,109

Domestic bonds

2,781,691

2,641,549

Domestic stocks

320,654329,310Foreign securities

1,244,991

1,497,783

Foreign bonds

1,022,805

1,281,227

222,186

216,556

796,926

734,390732,738

672,149

228,699

216,949

5,795,874

5,883,829

1,339,832

1,699,826

Monetary claims bought
Money held in trust
Securities

Foreign stocks and other securities
Loans
Ordinary loans
Real estate
Total
Overseas investments
6

Fukoku Mutual Life Insurance Company

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

As of March 31, 2015

As of March 31, 2016

Carrying value on
the balance sheet

Net valuation gains/losses
included in the statementof operations

Carrying value on
the balance sheet

354,399

25,399319,809

Trading securities

Net valuation gains/losses
included in the statementof operations(36,617)

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)

As of March 31, 2015

As of March 31, 2016

Gains/losses

Book value

Fair value

811,903

926,148

114,245

114,245

Fair value－

768,786

936,313

167,526

167,526

Domestic bonds

742,337

853,785

111,448－

111,448－

740,989

906,313

165,323

165,323

Foreign bonds

69,56572,362

－

2,797

2,797

－

27,79730,000

2,202

2,202

Monetary claims bought

－

－

－

－

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

－

－

－

－

Others

－

－

－

－

－

－

－

－

－

－

－

1,215,695

1,346,650

130,954

131,00450

1,074,535

1,280,612

206,077

206,077－

1,174,597

1,305,280

130,683

130,73350

1,044,436

1,250,268

205,832

205,832－

41,09841,369

270

270

－

30,09830,343

244

244

－

1,433

1,236

(196)

3

200

1,433

1,140

(293)

1

294
17,263Gains
Held-to-maturity debt securities

Policy-reserve-matching bonds
Domestic bonds
Foreign bonds
Investments in subsidiaries and affiliates
Available-for-sale securities

Gains/losses

Book value
Losses

Gains

Losses2,150,593

2,760,905

610,311611,672

1,360

2,419,858

2,889,888

470,029487,293

Domestic bonds

807,550

892,795

85,24585,26924

735,758

822,51386,75487,055300

Domestic stocks

279,549

597,167

317,617317,842225

291,475

528,697

237,221244,234

7,012

Foreign securities

1,010,329

1,197,021

186,692

187,788

1,096

1,326,814

1,458,914

132,099

139,958

7,858

Foreign bonds

784,142

901,979

117,837

118,593756

1,157,841

1,265,973

108,131

111,8813,750

Foreign stocks and other securities

226,187

295,042

68,854

69,194340

168,972

192,941

23,96828,0774,108

53,16473,92020,756

20,77115

65,80979,763

13,953

16,044

2,091

Money held in trust

－

－

－

－

－

－

－

－

－

－

Monetary claims bought

－

－

－

－

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

－

－

－

－

Others

－

－

－

－

－

－

－

－

－

－

4,179,626

5,034,941

855,314856,926

1,611

4,264,614

5,107,954

843,340

860,898

17,558Domestic bonds

2,724,485

3,051,862

327,377

327,45174

2,521,184

2,979,095

457,910458,211300

Domestic stocks

279,549

597,167

317,617317,842225

291,475

528,697

237,221244,234

7,012

Foreign securities

1,122,427

1,311,990

189,563

190,859

1,296

1,386,144

1,520,398

134,254

142,407

8,153

Foreign bonds

894,806

1,015,712

120,906

121,662756

1,215,738

1,326,317

110,578

114,328

3,750

Foreign stocks and other securities

227,621296,278

68,657

69,197

540

170,406

194,081

23,67528,078

4,403

53,16473,92020,756

20,77115

65,80979,763

13,953

16,044

2,091

Money held in trust

－

－

－

－

－

－

－

－

－

－

Monetary claims bought

－

－

－

－

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

－

－

－

－

Others

－

－

－

－

－

－

－

－

－

－

Other securities

Total

Other securities

Note: The table above includes assets which are considered appropriate to deem as securities under the Financial Instruments
and Exchange Law.
* Book value of securities without fair value are as follows:(Millions of yen)

As of March 31, 2015

As of March 31, 2016

Held-to-maturity debt securities－－

Unlisted foreign bonds－－

Others－－－－Investments in subsidiaries and affiliates

35,56035,560Available-for-sale securities

17,031

14,499

8,338

6,127

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

Unlisted foreign bonds

－

－

8,693

8,371

52,59250,060

Policy-reserve-matching bonds

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

OthersTotal

7

Fukoku Mutual Life Insurance Company

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

As of March 31, 2015

Money held in trust

As of March 31, 2016

Gains/losses

Carrying
value onbalancesheetsFair value

34,31934,319－Gains

Losses－－Gains/losses

Carrying
value onbalancesheetsFair value

87,79387,793－

Gains

Losses－－* Money held in trust for trading purpose(Millions of yen)

As of March 31, 2015
Net valuation gains/losses
included in the statementsof operations

Carrying value onbalance sheets
Money held in trust
for trading purpose

As of March 31, 201633,319Net valuation gains/losses
included in the statementsof operations

Carrying value onbalance sheets(0)

86,793(0)* Money held in trust classified as held-to-maturity, policy-reserve-matching and available-for-sale(Millions of yen)

As of March 31, 2015
Book value

Fair value

Money held in trust
for held-to-maturity－－

Money held in trust
for policy-reserve-matching－

Money held in trust
for available-for-sale－

As of March 31, 2016

Gains/losses

Book value

Fair value

－

－

－

－

－

－

－

－

－

Gains

Losses

－

－

－

－

－

－

8

Gains/losses
Gains

Losses

－

－

－

－

－

－

－

－

－

－

－

Fukoku Mutual Life Insurance Company

(reference) Fair Value Information on Derivative Instruments (General Account)(i) Gains and Losses on Derivatives
As of March 31, 2015
Hedge accounting applied
Hedge accounting not applied
Total
As of March 31, 2016
Hedge accounting applied
Hedge accounting not applied
Total(Millions of yen)Interestrelated

Currencyrelated

Stockrelated

Bondrelated

Others

Total

0

820

－

－

－

(460)

685

－

200

－

426

(459)

1,506

－

200

－

1,247

Interestrelated

Currencyrelated

Stockrelated

Bondrelated

821

OthersTotal－

18,558

265

－

－

(972)

(797)

－

(212)

－

(1,982)(972)

17,760

265

(212)

－

16,841

18,823

Note: Gains and losses from applying fair value hedge accounting (currency- related, gains of ¥820 million as of March 31, 2015,
and currency-related gains of ¥18,558 million, stock-related gains of ¥265 million as of March 31, 2016) 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, 2015
Notional amount/contract value

Fair
value

Over
1 yearAs of March 31, 2016
Notional amount/contract value

Gains(losses)

Fair
value

Over
1 yearGains(losses)Over-the-counter transactions
Yen interest rate swap contracts
Receipt fixed, payment floating

85

－

0

0

－

－

－

－

Payment fixed, receipt floating

－

－

－

－

－

－

－

－

－

－

－

－

－

－ [

－

－

－

－

－

－

191

(972)

Yen interest rate swaption contracts
Sold
Receipt fixed, payment floating
[

－ ]
－

Payment fixed, receipt floating
[

－

－ ]
－

－ ]

－

－ [

－

－ [

－

－ ]

Bought－Receipt fixed, payment floating[
Payment fixed, receipt floating

300,000
[

－

－

－ ]
200,000－－ ]300,000

1,289 ]

828

Total

(460) [

100,000

1,164 ]

(459)

(972)

Notes: Figures in [ ] are option premiums which are included in balance sheet.
(reference) Interest rate swap contracts by contractual maturity dates(Millions of yen)

As of March 31, 2015

As of March 31, 2016

Yen interest rate swap contracts
1 year or
shorterOver
1 year to
3 yearsOver
3 years

1 year or
shorterOver
1 year to
3 yearsOver
3 years

85

－

－

－

－

－

Average fixed rate (receipt)

2.47%

－

－

－

－

－

Average floating rate (payment)

1.06%

－

－

－

－

－

－

－

－

－

－

－

Average floating rate (receipt)

－

－

－

－

－

－

Average fixed rate (payment)

－

－

－

－

－

－

Notional amount (receipts fixed, payments floating)

Notional amount (receipts floating, payments fixed)

9

Fukoku Mutual Life Insurance Company

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

As of March 31, 2015
Notional amount/contract valueOver 1 year

As of March 31, 2016

Fair
value

Gains
(losses)

Notional amount/contract value

Fair
value

Over 1 year

Gains(losses)Over-the-counter transactions
Currency forward contracts
724,640－

723,134

1,505

1,375,442－ 1,357,681

17,760U.S. dollar

458,741－459,295(553)

1,128,269－ 1,109,234

19,035British Pound

111,979－

111,083896

81,926－80,870

1,055

Euro

78,873－78,384488

76,339－76,871(531)

Australian dollar

46,477－45,954522

47,124－

48,215(1,091)

Canadian dollar

28,568－28,415

153

41,782－42,490

(707)

59

－

60

0

－

－

－

－

59

－

60

0

－

－

－

－

Sold

BoughtU.S. dollar
Total

1,506

17,760Notes: 1. Forward exchange rates are used for exchange rates as of March 31, 2016.
2. Regarding assets and liabilities which are denominated in foreign currencies but have fixed settlement in yen under currency forward contracts
and are reported in yen amounts in the balance sheet, those currency forward contracts are excluded from the table above.

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

As of March 31, 2015
Notional amount/contract value

As of March 31, 2016

Fair valueOver 1 year

Gains(losses)

Notional amount/contract value

Fair value

Gains(losses)Over 1 year

Over-the-counter transactions
Yen stock forward contract
Sold

－

－

－

－

823

823

557

265

Bought

－

－

－

－

－

－

－

－

－

Total

265

(v) Bond-related Transactions(Millions of yen)

As of March 31, 2015
Notional amount/contract value

As of March 31, 2016

Fair valueOver 1 year

Gains(losses)

Notional amount/contract value

Fair value

Gains(losses)Over 1 year

Exchange-traded transactions
Yen bond futures
Sold
Bought294,876－

294,440436

151,069－

151,300

(231)

－

－

－

－

－

－

－

－

40,083－40,318(235)

38,343－38,324

18

－

－

－

－

－

－

－

－

Foreign bond futures
Sold
Bought
Total

200

10

(212)

Fukoku Mutual Life Insurance Company

(reference) Fair Value of Real Estate ( Land and Leaseholds)(millions of yen)

As of March 31, 2015
Carrying value on
the balance sheets
132,263

Fair value
235,337

As of March 31, 2016
Gains(losses)

Carrying value on
the balance sheets
125,312103,073

Fair value
233,848

Gains(losses)
108,535

Notes: 1. As of March 31, 2016, fair value is based on the appraisal value by the real-estate appraiser, the appraisal value forproperty tax as of January 1, 2016 and the road rate as of January 1, 2015.
2. As of March 31, 2015, fair value is based on the appraisal value by the real-estate appraiser, the appraisal value forproperty tax as of January 1, 2015 and the road rate as of January 1, 2014.

11

Fukoku Mutual Life Insurance Company

4. Non-consolidated Balance Sheets(Millions of yen)
As ofMarch 31, 2015

As ofMarch 31, 2016

96,515

114,182

183

182

96,332

113,999

186,500

200,000

870

813

Reinsurance payables

34,31987,7935,240,955

5,091,762

2,061,294

1,881,618

Local government bonds

154,616

Corporate bonds
StocksCash
Bank deposits
Call loans
Monetary claims bought
Money held in trust
Securities
Government bonds

Foreign securities

Policy reserves
Reserve for outstanding claims
Policy reserve
Reserve for dividends to policyholders

20,7195,475,030

5,484,362

49,31150,368133

118,959

141,935

Other liabilities

55,98443,653

Corporate income tax payable

15,851

891

142,336

Accounts payable

2,911

3,869

670,380

663,209

Accrued expenses

10,587

10,281

664,735

594,312

Unearned income

357

362

1,607,208

1,722,110

Deposits received

5,355

5,625

12,772

12,92988,175

Guarantee deposits received

693,680

Differential account for futures trading

Policy loans

63,311

61,437

Ordinary loans

700,588

Tangible fixed assets

227,591Land

132,261

125,310

Buildings

90,902954

Construction in progress

5,555,450

21,305Subordinated bonds

82,719Lease assets

5,545,647

110

763,900

Other securities
Loans

As of
March 31, 2016

Liabilities:

Assets:Cash and deposits

As ofMarch 31, 2015

630

－

99

Derivatives

3,886

5,037

632,242

Asset retirement obligations

3,001

3,351

218,565

Suspense receipts

1,259

1,204

Reserve for employees' retirement benefits

46,39326,08385,978Reserve for price fluctuation of securities

46,534

68,2882,324

Deferred tax liabilities

85,74133,050

1,590

Deferred tax liabilities forrevaluation reserve for land

14,787

14,274

5,914,159

5,882,868

2,843

3,360

Total liabilities

11,017

16,093

Net assets:

10,744

10,526

Foundation funds

30,00030,000272

5,567

Accumulated foundation funds redeemed

86,00086,000105

144

52,123

68,631

Accounts receivable

9,037

8,585

Legal reserve for future losses

Prepaid expenses

898

1,053

Other surplus

Accrued income

28,136

27,731

Deposits

1,837

2,239

241

Derivatives
Suspense payments

Other tangible fixed assets
Intangible fixed assets
Software
Other intangible fixed assets
Reinsurance receivables
Other assets

Differential account for futures trading

Surplus112

143,548

148,284

2,582

2,742
145,542

Reserve for redemption of foundation funds

12,00018,000Reserve for dividend allowances

3,895

20,000761

Accumulated fund for price fluctuation

31,00041,0005,134

21,877266

2,192

Reserve for advanced depreciation ofreal estate for tax purpose

262

3,108

Lease investment assets

801

767

2,929

3,421

(1,948)(1,850)

Other reserves

767

767

93,04165,509Total foundation funds, surplus and others

259,660

264,397

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

434,236

338,4210－

Unappropriated surplus

Deferred valuation gains (losses)
under hedge accounting, net of tax
Revaluation reserve for land, net of tax
Total valuation and translation adjustments
Total net assets
Total assets

112

140,966

Rest of the other asset
Allowance for possible loan losses

Reserve for revaluation

6,611,952

6,489,815

12

Total liabilities and net assets

3,894

4,128

438,131

342,549

697,792

606,947

6,611,952

6,489,815

Fukoku Mutual Life Insurance Company

5. Non-consolidated Statements of Operations(Millions of yen)
Year ended March 31, 2015

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 from money held in trust, net
Gains from trading securities, net
Gains on sales of securities
Foreign exchange gains, net
Reversal of allowance for possible loan losses
Other investment income
Gains from separate accounts, net
Other ordinary revenues
Fund receipt from annuity rider
Fund receipt from deposit of claims paid
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 for policy reserve and others
Provision for policy reserve
Interest on accumulated dividends to policyholders
Investment expenses
Interest expenses
Losses on trading securities
Losses on sales of securities, net
Losses on valuation of securities
Losses from derivative instruments, net
Foreign exchange losses, net
Depreciation of real estate for rent and other assets
Other investment expenses
Losses on separate accounts, net
Operating expenses
Other ordinary expenses
Claim deposit payments
Taxes
Depreciation
OthersTotal ordinary expenses
Ordinary profits
Extraordinary gains:
Gains on disposal of fixed assets
Gain on contribution of securities to retirement benefit trust
State subsidy and others
Total extraordinary gains
Extraordinary losses:
Losses on disposal of fixed assets
Impairment losses
Provision of reserve for price fluctuation of securities
Total extraordinary losses
Surplus before income taxes
Income taxes：
Current
Deferred
Total income taxes
Net surplus for the year

13

Year ended March 31, 2016

643,119642,774345
213,754
136,700
14
107,138
15,464
13,832251
2,349
35,232
25,221
2,041
270
69
11,86910,861
457
4,300
1,761
1,481
2,860
867,736

618,073
617,742331
186,642
137,324
27
110,276
13,343
13,444231
11,332－37,548
－
77
360
－
9,606
656
3,741
586
1,641
2,980
814,323

490,362
112,311
155,577
118,484
75,59427,954
440
136,537
136,48254
35,715
4,252
－
1,075
0
18,679
－
4,877
6,831
－
86,36521,877
8,900
6,069
6,205
701
770,858
96,877590,510
126,262
202,982
119,535
110,088
31,163
477
9,379
9,332
47
47,886
4,314
12,422
5,820
－
3,549
8,600
4,482
6,340
2,354
86,50019,702
6,327
6,061
6,499
814
753,979
60,344

6
－
－
6

1,503
7,913
140
9,557

165
698
2,518
3,382
93,501266
242
21,754
22,26347,63827,169(2,711)
24,45869,043

14,390(8,304)
6,086
41,551

Fukoku Mutual Life Insurance Company

Notes to the Non-consolidated Financial Statements
I. Presentation of the Non-consolidated Financial Statements
1. Basis of Presentation
The accompanying non-consolidated financial statements have been prepared from the accounts
maintained by Fukoku Mutual Life Insurance Company (the “Company”) in accordance with theprovisions set forth in the Insurance Business Law of Japan and its related rules and regulations and in
conformity with accounting principles generally accepted in Japan, which are different in certain respects
from accounting principles generally accepted in countries and jurisdictions other than Japan.
In addition, the notes to the non-consolidated financial statements include information which is not
required under accounting principles generally accepted in Japan but is presented herein as additional
information.
Amounts of less than one million yen have been rounded down. As a result, total in yen shownherein do not necessarily agree with the sum of the individual amounts.

II. Notes to Balance Sheets
1. Significant Accounting Policies(1) Valuation Methods of Securities
The valuation of securities, including bank 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
average method.
ii) Held-to-maturity debt securities are stated at amortized cost under the straight-line method, cost
being determined by the moving average method.
iii) 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 Insurance Industry”(Industry Audit Committee Report No.21 issued by the Japanese 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 values are stated at fair market values based on themarket prices at the balance sheet date. Costs of their sales are determined by the moving averagemethod. Net unrealized gains or losses on these available-for-sale securities, net of taxes, arerecorded as a separate component of net assets.
Available-for-sale securities whose market value are deemed extremely difficult to obtain are statedat 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 isconsidered to be an adjustment of interest. Such bonds are stated at amortized cost under thestraight-line method, cost being determined by the moving average method.
(2) Valuation Methods of Derivative Instruments
Derivative instruments are stated at fair market value.
(3) Revaluation of Land
The Company revalues the land for business purposes based on the Law for Revaluation of Land (Law
No.34 promulgated on March 31, 1998). The difference between fair value and book value resulting
from the revaluation, net of related taxes, is recorded as revaluation reserve for land as a separate
component of net assets and the related tax is recorded as deferred tax liabilities for revaluation
reserve for land.
 Date of revaluation: March 31, 2002
 Method of revaluation as prescribed for in Article 3 Paragraph 3 of the said Law:
Calculation is based on the appraisal value for property tax set forth in Article 2 item 3 of the
Enforcement Ordinance of the Law for Revaluation of Land (Government Ordinance No.119
14

Fukoku Mutual Life Insurance Company

promulgated on March 31, 1998) and the road rate set forth in Article 2 item 4 of the said Ordinancewith certain reasonable adjustments.
(4) Depreciation of Tangible Fixed Assets
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 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 lease term without residual value
Other tangible fixed assets acquired for ¥100,000 or more but less than ¥200,000 are depreciatedequally over three years.
(5) Foreign Currency Translation
Foreign currency denominated assets and liabilities, except for investments in subsidiaries andaffiliates, are translated 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
Allowance for possible loan losses is provided in accordance with the Company’s standards of selfassessment and write-offs and reserves on credit quality:i) For the credits of borrowers who are legally bankrupt such as being in the proceedings ofbankruptcy or civil rehabilitation (hereinafter called “legally bankrupt borrowers”) and who aresubstantially bankrupt (hereinafter called “substantially bankrupt borrowers”), the Company provides
the remaining amount of credits after the direct write-off described below and the deductions of theamount expected to be collected through the disposal of collateral or the execution of guarantees.
ii) For the credits of borrowers who are not currently bankrupt but have a high possibility of bankruptcy(hereinafter called “not currently bankrupt borrowers”), the Company provides the amounts deemed
as necessary considering the borrowers’ ability to pay, within the amounts after deductions of theamount expected to be collected through the disposal of collateral or the execution of guarantees.
iii) For the credits of borrowers other than the above, the Company provides the amounts calculated bymultiplying the borrowers’ balance by the actual ratio of bad debt losses on defaults during a certain
past period.
All credits are assessed by the relevant departments in accordance with the Company’s standards ofself-assessment on credit quality. The results of the assessment are reviewed by the audit department,
which is independent of business-related divisions. Subsequently, the allowance for possible loan
losses are provided based on the results of these assessments.
For the credits of legally bankrupt borrowers and substantially bankrupt borrowers, the amounts
remaining after deductions of collateral value or the amounts collectible through the execution ofguarantees are written-off directly from the borrowers’ balances as the estimated uncollectible amounts.
The amount written-off as of March 31, 2016 was ¥247 million.
(7) Reserve for Employees’ Retirement Benefits and Method of Amortizing Retirement Benefit Expenses
Reserve for employees' retirement benefits is presented based on projected benefit obligations andpension plan assets at the balance sheet date.
The Company uses the following methods for amortizing retirement benefit obligations andretirement benefit expenses:
 Method for allocation of projected retirement benefits ...............
 Amortization period of actuarial gains and losses.......................
 Amortization period of prior service cost......................................

Benefit formula basis
10 years
10 years

In the fiscal period, the Company contributed a portion of its securities to establish a trust account for
retirement benefits amounting to ¥18,666 million and recognized a gain on contribution of securities toretirement benefit trust amounting to ¥7,913 million as an extraordinary gain.

15

Fukoku Mutual Life Insurance Company

(8) Reserve for Price Fluctuation of Securities
Reserve for price fluctuation of securities is calculated in accordance with Article 115 of the Insurance
Business Law.
(9) Lease Transactions as a Lessor
As for the finance lease transactions where the Company is a lessor, the lease fee is recorded in“Interest, dividends and other income (other interest and dividends)” at the time of receiving lease fee.
The corresponding cost of the lease transactions is recorded in “Other investment expenses”, whichis calculated by deducting an amount equivalent to the interest allocated over the lease term from thelease fee received.
(10) Accounting for Hedge Activities
Hedge accounting is based on "Accounting Standards for Financial Instruments" (ASBJ Statement No.
10, August 11, 2006). The Company applies a market price hedge accounting as a hedge against therisk of foreign exchange fluctuation in relation to foreign currency denominated bonds and against therisk of price fluctuation in relation to domestic stocks, a deferral hedge accounting as a hedge against
the risk of interest rate fluctuation in relation to loans extended by the Company, and a designatedhedge accounting (“Furiate shori”) for foreign currency swaps as a hedge against the risk of foreignexchange fluctuation in relation to foreign currency denominated bonds issued by the Company.
For assessing the effectiveness of hedge used, ratio analysis of comparing the fluctuations in thefair value or cash flows of hedged items and hedging instruments is mostly applied.
(11) Accounting for Employees’ Retirement Benefits
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.
(12) Accounting for Consumption Taxes
The Company accounts for consumption taxes by the tax-exclusion method. The consumption taxes oncertain assets, which are not deductible from consumption taxes withheld and that are stipulated to bedeferred under the Tax Law, are deferred as prepaid expenses and amortized equally over five years.
Consumption taxes other than deferred consumption taxes are recognized as an expense whenincurred.
(13) Policy Reserve
Policy reserve is based on Article 116 of the Insurance Business Law, and the premium reserve at theend of fiscal year is calculated by the following method:i) In regard to the policies subject to the standard policy reserve, the method as prescribed by theCommissioner of Financial Services Agency (Ministry of Finance Ordinance No. 48, 1996) is applied.
ii) In regard to the policies not subject to the standard policy reserve, the net level premium method
is applied.
Based on the provision of Article 69, paragraph 5, of the Enforcement Regulation of the Insurance
Business Law, the Company includes additional funded policy reserves as follows.
At the end of the fiscal year ended March 31, 2013, among individual annuity insurance policies
with an assumed interest rate of 5.00% or higher, policies that have an annuity commencement date onor prior to March 31, 2013 (excluding wife’s annuity insurance additional rider), the Company reduced
the assumed interest rate to 1.00% and funded additional policy reserves. Furthermore, for certain
hospitalization riders with surgery benefits and long-term hospitalization benefits, the Company funded
additional policy reserves. At the end of the current fiscal year, the balance of these policy reserves
was ¥47,438 million.
At the end of the current fiscal year, among individual annuity insurance policies with an assumed
interest rate of 5.00% or higher, policies that have an annuity commencement date from April 1, 2013,
through March 31, 2017 (excluding wife’s annuity insurance additional rider), the Company reduced theassumed interest rate of policy reserve to 1.00% and funded additional policy reserves. Furthermore,
for certain whole life insurance policies that include distribution of surplus every five years theCompany funded additional policy reserves. At the end of the current fiscal year, the balance of thesepolicy reserves was ¥33,100 million. As a result, compared with a situation in which the Company did
not carry out this additional funding, provisions to policy reserves increased by ¥33,100 million, andordinary profits and surplus before income taxes both decreased by ¥33,100 million.

16

Fukoku Mutual Life Insurance Company

(14) Software
The software for internal use is amortized based on straight-line method over the estimated useful lives.
(15) Policy-reserve-matching Bonds
Of the bonds corresponding to the sub-groups of individual insurance and annuities which are set by
insurance types and investment policies, the bonds that are held to match the duration of liabilities areclassified 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. Principal Accounting Standards Published before March 31, 2016 but not Applied
In accordance with the issuance of “Implementation Guidance on Recoverability of Deferred Tax Assets”(ASBJ Guidance No. 26, March 28, 2016), the method of accounting treatment relating to therecoverability of deferred tax assets has been revised.
Compulsory application of this revised guidance is from fiscal years beginning on or after April 1,
2016. The Company plans to apply this standard from the beginning of the fiscal year ending March 31,
2017.
The Company is currently evaluating the impact of the application of this guidance in the initial fiscal
year of its application.
3. Financial Instruments
Asset management of the general accounts other than the separate accounts stipulated in Article 118
Paragraph 1 of the Insurance Business Law 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 the medium-to-long term viewpoints. The
Company is diversifying investments in assets such as foreign securities and equity securities within theacceptable range of risk 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 theportfolios. Derivatives are mainly used to hedge the market risk regarding spot-priced assets andliabilities. 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 fromthe basic principle and secures the safety of the assets by utilizing control functions of the Financial andInvestment Risk Management Department towards the asset management sections, monitoring thestatus 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 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 andliabilities as of March 31, 2016 were as follows:

17

Fukoku Mutual Life Insurance Company

Carrying amount

Fair value

Difference(Millions of yen)

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

¥¥

112,405
112,405
200,000¥

112,405
112,405
200,000

―

¥

―
―

813
813

881
881

67
67

86,79386,79386,79386,793――233,015
768,786
1,074,535
1,433
2,889,888
4,967,659

233,015936,313
1,280,612
1,140
2,889,888
5,340,969―
167,526
206,077(293 )―
373,31061,437632,242
693,680
6,061,352
141,935
141,935

61,437664,774
726,2126,467,262
148,943
148,943(0 )
32,531
32,531
405,910
7,008
7,008

(1,982 )18,823
16,841(1,982 )18,823
16,841

―
―
―

¥

¥

*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.
*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)) 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) and securities managed astrust assets in money held in trust:
The fair values of marketable securities are measured at the quoted market prices at the balance sheet
date. The fair values of other securities without the quoted market prices are based on the prices
reasonably calculated such as the prices offered by the information vendors or counterparty financial
institutions.
Investments in 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 andaffiliates, unlisted stocks and investments in partnerships were ¥35,560 million, ¥6,127 million, and¥8,371 million as of March 31, 2016, respectively.
(3) Loans and monetary claims bought treated as loans:
The fair values of policy loans are deemed to approximate book values, considering estimatedrepayment period and interest rate conditions since their repayment deadlines have not been set up
18

Fukoku Mutual Life Insurance Company

due to the characteristics that the loans are limited to the amount of cash surrender values. Therefore,
the book values are used as the fair values of policy loans.
The fair values of floating interest rate loans among the ordinary loans and monetary claimsbought treated as loans approximate the book values because the market interest rates are reflected infuture cash flows in a short period. Therefore, the fair values of floating interest rate loans andmonetary claims bought treated as loans are based on their book values. The fair values of fixedinterest rate loans are measured by discounting the future cash flows to the present values.
The fair values of loans receivable from legally bankrupt borrowers, substantially bankrupt
borrowers and not currently bankrupt borrowers and monetary claims bought treated as loans arecomputed by deducting the amount of the allowance for doubtful accounts 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 the exchange.
ii) The fair values of forward contracts, options and swaps traded over the counter are based on thequoted prices offered by 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. Investment and Rental Property
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 ¥170,027 million and¥276,629 million as of March 31, 2016, respectively. The fair value is mainly based on the value
calculated by the Company in accordance with real estate appraisal standards which includes someadjustments using the reference prices.
The amount corresponding to asset retirement obligations included in the carrying amount ofinvestment and rental properties was ¥1,119 million as of March 31, 2016.
5. Securities Lent under Lending Agreements
The amount of securities lent under lending agreements was ¥18,189 million as of March 31, 2016.
6. Loans Receivable
The total amounts of credits to bankrupt borrowers, delinquent loans, delinquent loans past 3 months ormore and restructured loans, which were included in loans, was ¥990 million as of March 31, 2016;i) The balance of credits to bankrupt borrowers was ¥217 million as of March 31, 2016.
ii) The balance of delinquent loans was ¥773 million as of March 31, 2016.
iii) There was no balance of delinquent loans past 3 months or more and restructured loans as ofMarch 31, 2016.
The direct write-offs related to loans decreased credits to bankrupt borrowers described above by ¥247
million as of March 31, 2016.
Credits to bankrupt borrowers represent loans, excluding the balances already written-off, whichmeet the conditions prescribed in Article 96 Paragraph 1 item 3 and 4 of the Enforcement Regulations of
the Corporate Tax Law. Moreover, accrued interest on 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 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 to assist and support the borrowers in the restructuringof their business.
Delinquent loans past 3 months or more are loans for which interest payments or repayments ofprincipal 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 which certain concessions favorable to borrowers, such as interest
reduction or exemption, rescheduling of due date of principal or interest payment, waiver of claim or other19

Fukoku Mutual Life Insurance Company

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
Accumulated depreciation of tangible fixed assets totalled to ¥152,678 million as of March 31, 2016.
8. Separate Accounts
Total assets in separate accounts provided for in Article 118 of the Insurance Business Law were ¥79,065
million as of March 31, 2016. The amounts of separate account liabilities were the same as separate
account assets.
9. Receivables from/Payables to Subsidiaries
The total amounts of receivables from/payables to subsidiaries were ¥2,486 million and ¥2,752 million asof March 31, 2016, respectively.
10. Income Taxes
Deferred tax assets and deferred tax liabilities as of March 31, 2016 were ¥108,997 million and ¥139,188
million, respectively. Valuation allowance for deferred tax assets was ¥2,859 million.
Major components of deferred tax assets were ¥69,311 million of policy reserves, ¥19,120 million ofreserve for price fluctuation of securities and ¥12,530 million of reserve for employees' retirement benefits
as of March 31, 2016.
Major component of deferred tax liabilities was ¥131,608 million of net unrealized gains on availablefor-sale securities as of March 31, 2016.
The statutory tax rate and the actual effective tax rate for the year ended March 31, 2016 were
28.9% and 12.8%, respectively. The difference between the statutory tax rate and the actual effective tax
rate was attributable mainly to -21.3% of reserve for dividends to the policyholders, and +6.1% of the tax
rate adjustment of deferred tax assets at the end of period.
Accompanying the enactment of the Act on Partial Amendment to the Income Tax Act, etc. (Act No.
15, 2016) by the National Diet on March 29, 2016, the effective statutory tax rate of 28.9%, which wasused for calculating deferred tax assets and deferred tax liabilities, has been revised to 28.2% for items
expected to be collected or paid during the period from April 1, 2016, to March 31, 2018. For items
expected to be collected or paid on or later than April 1, 2018, the rate has been revised to 28.0%. Basedon these changes, deferred tax liabilities decreased by ¥1,076 million, and deferred tax liabilities forrevaluation reserve for land decreased by ¥433 million. Income taxes–deferred increased by ¥2,918
million.
11. Reserve for Dividends to Policyholders
Changes in reserve for dividends to policyholders for the year ended March 31, 2016 were as follows:(Millions of yen)

Balance at the beginning of current period………...................................
Transfer from surplus in previous period..................................................
Dividends paid in the current period.........................................................
Increase in interest...................................................................................
Balance at the end of current period........................................................

¥ 49,311
36,698(35,688)47¥ 50,368

12. Stocks of Subsidiaries
The amount of stocks of subsidiaries was ¥36,994 million as of March 31, 2016.
13. Pledged Assets and Secured Debts
Assets pledged as collateral as of March 31, 2016 were ¥26,284 million of securities and ¥1,279 million ofbank deposits. Secured debts as of March 31, 2016 were ¥4,906 million.

20

Fukoku Mutual Life Insurance Company

14. Policy Reserves for the Reinsurance Contracts
Reserve for outstanding claims for the reinsurance contracts provided in accordance with Article 71
Paragraph 1 of the Enforcement Regulation of the Insurance Business Law (hereinafter called “reservefor outstanding claims for ceded reinsurance”) was ¥15 million as of March 31, 2016.
Policy reserve for the reinsurance contracts provided in accordance with Article 71 Paragraph 1 of
the Enforcement Regulation of the Insurance Business Law (hereinafter called “policy reserve for ceded
reinsurance”) was ¥29 million as of March 31, 2016.
15. Adjustment Items for Redemption of Foundation Funds and Appropriation of Net Surplus
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 Law
was ¥342,662 million as of March 31, 2016.
16. Commitment Line
There were unused commitment line agreements under which the Company is the lender of ¥12,172
million as of March 31, 2016.
17. Subordinated Bonds
Repayments of subordinated bonds are subordinated to other obligations.
18. Contribution to Policyholders Protection Corporation
The future contribution to the Life Insurance Policyholders Protection Corporation of Japan under Article
259 of the Insurance Business Law was estimated at ¥10,356 million as of March 31, 2016.
The contribution was charged as operating expenses in the year in which it was paid.
19. Matters Related to Employees’ Retirement Benefits as of March 31, 2016
(1) Overview of Employees’ Retirement Benefit Plan
As for a defined benefit plan for office-based employees, the Company has a defined benefit corporate
pension plan and retirement lump-sum payments. As for a defined contribution plan for these
employees, the Company also has a defined contribution pension plan.
As for a defined benefit plan for sales employees, the Company has retirement lump-sum
payments.
The Company places a retirement benefit trust in relation to the retirement lump-sum payments
for sales employees.
(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 current period................
Service cost.................................................................................................
Interest cost.................................................................................................
Actuarial differences occurred during the period.........................................
Retirement benefit payments.......................................................................
Retirement benefit obligation at the end of current period...........................

¥ 76,725
3,067
1,073
9,106
(4,787)¥ 85,184ii) Reconciliation of beginning and end of balance of pension plan assets(Millions of yen)

Pension plan assets at the beginning of current period............................
Expected return on pension plan assets...................................................
Actuarial differences occurred during the period......................................
Contributions by the employer..................................................................
Retirement benefit payments....................................................................
Contribution amount on establishment of retirement benefit trust............
Pension plan assets at the end of current period......................................
21¥ 26,114
783(1,987 )2,380(1,322 )18,666¥ 44,636

Fukoku Mutual Life Insurance Company

iii) Reconciliation of retirement benefit obligation and pension plan assets with reserve for employees’
retirement benefits presented on the 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. Reserve for employees’ retirement benefits (c+d+e+f)........................

¥ 73,675(44,636 )
29,03911,509(14,864 )399¥ 26,083

iv) 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 cost..............................................................
Retirement benefit expenses related to defined benefit plan...................

¥ 3,067
1,073(783 )
921(76 )¥ 4,202v) Breakdown of pension plan assets
The breakdown of asset categories as a percentage of total pension plan assets is as follows:
Domestic stocks........................................................................................
Life insurance general account.................................................................
Domestic bonds........................................................................................
Foreign stocks..........................................................................................
Foreign bonds...........................................................................................
Others.......................................................................................................
Total...........................................................................................................

48.5%
33.7%
7.7%
6.7%
2.9%
0.6%
100.0%

Within the total of pension assets, 39.8% of this amount is accounted for by the retirement benefit
trust established in relation 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 and future allocation of pension plan assets, and the present and expected
future long-term rate of return on a variety of assets that makes up the pension assets.
vii) Underlying actuarial assumptions
Main underlying actuarial assumptions as of March 31, 2016, were as follows:
Discount rate............................................................................................
Expected long-term rate of return on pension plan assets
Defined Benefit Plan..............................................................................
Retirement benefit trust..........................................................................

0.6%
3.0%
0.0%

(3) Defined Contribution Plan
The contribution amount by the Company to the defined contribution plan was ¥187 million.

22

Fukoku Mutual Life Insurance Company

III. Notes to Statements of Operations
1. Transactions with Subsidiaries
The total amounts of revenues and expenses in connection with subsidiaries were ¥1,749 million and¥8,584 million for the year ended March 31, 2016.

2. Gains on Sales of Securities
Major items of gains on sales of securities for the year ended March 31, 2016 were as follows:(Millions of yen)Domestic bonds..........................................................................................
Domestic stocks and others.......................................................................
Foreign securities.......................................................................................

¥ 30,067
2,934
4,546

3. Losses on Sales of Securities
Major items of losses on sales of securities for the year ended March 31, 2016 were as follows:(Millions of yen)Domestic stocks and others.......................................................................
Foreign securities.......................................................................................

¥ 2,701
3,119

4. Policy Reserves for the Reinsurance Contracts
For the year ended March 31, 2016, reversal of reserve for outstanding claims for ceded reinsurance
considered in calculation of reversal of reserve for outstanding claims was ¥35 million and reversal ofpolicy reserve for ceded reinsurance considered in calculation of provision for policy reserve was ¥1
million.

5. (Losses) Gains on Trading Securities
Major items of (losses)gains on trading securities for the year ended March 31, 2016 were as follows:(Millions of yen)Interest, dividends and other income.........................................................
Gains (Losses) from sales of trading securities….....................................
(Losses) Gains on valuation of trading securities.....................................

¥ 9,034
12,821(36,617)

6. Gains (Losses) from Money Held in Trust
Gains (Losses) from money held in trust for the years ended March 31, 2016 included valuation losses of¥0 million.

7. Gain (Losses) from Derivative Instruments
Gains (Losses) from derivative instruments for the year ended March 31, 2016 included valuation lossesof (¥2,428 million).

23

Fukoku Mutual Life Insurance Company

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

Year ended
March 31, 2015

Year ended
March 31, 2016

A

93,18392,329

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

55,601
2,181
26,15725,221－
2,041－
19,754－－1,075
018,679－－35,846129,030
78－－
78－
32,232－
32,231－－－
1(32,153)
96,877

48,666
11,118－37,548－－－39,428－21,456
5,820
－
3,549
8,600
－
9,238
101,568－－－－－
41,224
－
8,050
73
－
－
33,100(41,224)
60,344

Fundamental profit

Notes: 1. The following amounts in respect of gains / losses from money held in trust have been excluded from capitalgains / losses and included in fundamental profit due to their income nature (being interest and dividend income):¥168 million in respect of the year ended March 31, 2015 and ¥213 million
in respect of the year ended March 31, 2016.
2. The following amounts in respect of gains / losses from trading securities have been excluded from gains/ losses and included in fundamental profit due to their income nature (being interest and dividend income):¥9,075 million in respect of the year ended March 31, 2015 and ¥9,034 million in respect of the year ended
March 31, 2016.
3. Other non-recurring losses represent the losses relating to provision of the additional policy reservesin accordance with Article 69, Paragraph 5 of the Enforcement Regulations of the Insurance Business Act.

24

Fukoku Mutual Life Insurance Company

7. Non-consolidated Statements of Changes in Net Assets[For the year ended March 31, 2015](Millions of yen)Foundation funds, surplus and others
Surplus
Other surplus

Balance at the beginning of the current period

Foundation
funds

Accumulated
foundation
funds
redeemed

35,00071,000Reserve forLegal reserve redemption
Reserve forfor futureof foundation
revaluation
losses
funds

112

2,485

18,000Reserve foradvanceddepreciation
Reserve for Accumulated of real estate
dividend
fund for pricefor tax
allowance
fluctuation
purpose

3,895

21,000

3,969

Other
reserves

767

Cumulative effects of changes inaccounting policies
Restated balance

35,00071,000112

2,485

18,0003,895

21,0003,969

767

Unappropriat
ed surplus Total surplus

Total
foundation
funds,
surplus andothers74,662

124,780

230,892(3,297)(3,297)(3,297)71,365

121,482

227,595－

10,000(31,595)(31,595)(31,595)

(97)

－

－

－

15,000Changes in the current period
Financing of additional foundation funds

10,000Additions to reserve for dividends
to policyholders

97

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

15,000

Payment of interest on foundation funds
Net surplus for the current period
Redemption of foundation funds

(621)

(621)

(621)

69,04369,04369,043－(15,000)－－(15,000)(15,000)(10,000)－－(15,000)

Additions to reserve for redemption offoundation funds

9,000

Reversal of reserve for redemption offoundation funds(15,000)(9,000)Additions to accumulated fund forprice fluctuation

10,000Additions to reserve for advanced
depreciation of real estate for tax purpose

0

(0)

－

－

Reversal of reserve for advanced
depreciation of real estate for tax purpose(3,707)

3,707

－

－

239

239

239

Reversal of revaluation reserve
for land, net of tax
Net changes, excluding foundation funds,
surplus and others
Total changes in the current period(5,000)15,000－97(6,000)－10,000(3,707)－

21,67522,06532,065

Balance at the end of the current period

30,00086,000112

2,582

12,0003,895

31,000262

767

93,041

143,548259,660Net
unrealized
Deferred
gains (losses) valuation
on available- gains (losses) Revaluation
Total
for-sale
under hedge reserve for valuation andsecurities, net accounting,land, net oftranslationof taxnet of tax
tax
adjustments

Total
net assets

Valuation and translation adjustments

Balance at the beginning of the current period

259,861

2

3,144

263,008

493,900

259,861

2

3,144

263,008

490,603

Cumulative effects of changes inaccounting policies
Restated balance(3,297)

Changes in the current period
Financing of additional foundation funds

10,000Additions to reserve for dividends
to policyholders(31,595)－

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

15,000(621)

Payment of interest on foundation funds
Net surplus for the current period

69,043

Redemption of foundation funds(15,000)

Additions to reserve for redemption offoundation funds－

Reversal of reserve for redemption offoundation funds(15,000)

Additions to accumulated fund forprice fluctuation－

Additions to reserve for advanced
depreciation of real estate for tax purpose－

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

Reversal of revaluation reserve
for land, net of tax
Net changes, excluding foundation funds,
surplus and others

239
174,375(2)

750

175,123

175,123

Total changes in the current peiod

174,375

Balance at the end of the current period

434,236(2)

750

175,123

207,1880

3,894

438,131

697,792

25

Fukoku Mutual Life Insurance Company

[For the year ended March 31, 2016](Millions of yen)Foundation funds, surplus and others
Surplus
Other surplus

Balance at the beginning of the current period

Foundation
funds

Accumulated
foundation
funds
redeemed

30,00086,000Reserve forLegal reserve redemption
Reserve forfor futureof foundation
revaluation
losses
funds

112

2,582

12,000Reserve foradvanceddepreciation
Reserve for Accumulated of real estate
dividend
fund for pricefor tax
allowance
fluctuation
purpose

3,895

31,000262

Otherreserves

767

Unappropriat
ed surplus Total surplus

Total
foundation
funds,
surplus andothers

93,041

143,548259,660(36,698)(36,698)(36,698)

(160)

－

－

(316)

(316)

(316)

41,551

41,551

41,551(6,000)－－(16,104)－－(10,000)

Changes in the current period
Additions to reserve for dividends
to policyholders

160

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

6,000
16,104

Additions to reserve for dividend allowance
Additions to accumulated fund forprice fluctuation－－

Addition to reserve for advanced
depreciation of real estate for tax purpose

7

(7)

－

－

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

(3)

3

－

－

199

199

199

10,000

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

－

－

－

160

6,000

16,10410,0003－(27,531)

4,736

4,736

30,00086,000112

2,742

18,00020,00041,000266

767

65,509148,284

264,397

Net
unrealized
Deferred
gains (losses) valuation
on available- gains (losses) Revaluation
Total
for-sale
under hedge reserve for valuation andsecurities, net accounting,land, net oftranslationof taxnet of tax
tax
adjustments

Total
net assets

Valuation and translation adjustments

Balance at the beginning of the current period

434,2360

3,894

438,131

697,792

Changes in the current period
Additions to reserve for dividends
to policyholders(36,698)－

Additions to legal reserve for future losses(316)

Payment of interest on foundation funds

41,551

Net surplus for the current period
Additons to reserve for redemption offoundation funds－

Additions to reserve for dividend allowance－

Additions to accumulated fund forprice fluctuation－

Addition to reserve for advanced
depreciation of real estate for tax purpose－

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

Reversal of revaluation reserve
for land, net of tax
Net changes, excluding foundation funds,
surplus and others

199(95,815)(0)234(95,581)

Total changes in the current period(95,815)(0)234(95,581)(95,581)(90,845)

Balance at the end of the current period

338,421－4,128

342,549

606,947

26

Fukoku Mutual Life Insurance Company

8. Non-consolidated Statements of Surplus(Millions of Yen)
Year ended
March 31, 2015

Unappropriated surplus

Year ended
March 31, 2016

93,04165,509

3

11

3

11

Total

93,04465,521

Appropriation of surplus

69,286

41,762

Reserve for dividends to policyholders

36,69835,236

Net surplus

32,588

6,526

Legal reserve for future losses

160

106

Interest payment for foundation funds

316

316

32,111

6,103

Reserve for redemption of foundation funds

6,000

6,000

Equalized reserve for dividends to policyholders

16,104－

Accumulated fund for price fluctuation

10,000－Reserve for advanced depreciation ofreal estate for tax purpose

7

2

Reserve for special account for advanced depreciationof real estate－100

23,75823,758

Reversal of voluntary surplus reserve
Reversal of reserve for advanced depreciation ofreal estate for tax purpose

Voluntary surplus reserve

Unappropriated surplus carried forward

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

27

Fukoku Mutual Life Insurance Company

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

As of March 31, 2015

As of March 31, 2016

Claims against bankrupt and quasi-bankrupt obligors

207

260

Claims with collection risk

837

736

Claims for special attention

370

－

1,415

996

[0.17%][0.14%]

816,618

714,152

818,034

715,149

Subtotal[Percentage of total]
Claims against normal obligors
Total

Notes: 1. Claims against bankrupt and quasi-bankrupt obligors are loans to borrowers who are subject to bankruptcy,
corporate reorganisation or rehabilitation or other similar proceedings and other borrowers in serious financial
difficulties.
2. Claims with collection risk are loans to obligors (other than bankrupt and quasi-bankrupt obligors) withdeteriorated financial condition and results of operations from which it is unlikely that the principal and interest on
the loans will be recovered.
3. Claims for special attention are loans on which principal and/or interest are past due for three months or more andloans with a concessionary interest rate, as well as loans with renegotiated conditions in favour of the borrower,
including renegotiated schedule and/or waivers, in each case, other than the loans described in note 1 or 2 above.
4. Claims against normal obligors are all other loans.

28

Fukoku Mutual Life Insurance Company

10. Risk-monitored Loans(Millions of yen)

As of March 31, 2015

As of March 31, 2016

Credits to bankrupt borrowers

194

217

Delinquent loans

844

773

Delinquent loans past three months or more－－

Restructured loans

370

－

1,409

990

[0.18%][0.14%]

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 ofguarantees is written-off directly from the borrower’s balance as the estimated uncollectible amounts.
The amounts written-off related to credits to bankrupt borrowers were ¥247 million as of March 31, 2015and ¥247 million as of March 31, 2016.
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 intereston these loans is unlikely to be collected due to the significant delay in repayment of principal orinterest payment or for some other reasons.
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 whichinterest payments have been suspended and rescheduled to assist and support the borrowers in the
restructuring of their business.
4. Delinquent loans past three months or more are loans for which interest payment or repayment ofprincipal are delinquent for three months or more from the due date under the terms of the related loan
agreements, excluding those loans classified as credits to bankrupt borrowers and delinquent loans.
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 orother 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.

29

Fukoku Mutual Life Insurance Company

11. Solvency Margin Ratio(Millions of yen)

As ofMarch 31, 2015

As ofMarch 31, 2016

1,397,205

1,374,588

Foundation funds and surplus

220,996

226,683

Reserve for price fluctuation of securities

46,534

68,288Contingency reserve

142,523

150,573

1,403

1,251

549,280

423,026

Net unrealized gains on real estate x 85%

99,173

105,577

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

197,683

236,087

Qualifying subordinated debt

118,959

141,935－－

Deductible items(19,000)(19,000)

Others39,65240,165238,962

207,983

Total solvency margin(A)

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

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( R1  R8 )2  R2  R3  R7   R4
2

Total amount of risk

(B)

Insurance risk

R1

25,494

24,616

3rd sector insurance risk

R8

9,575

9,577

Assumed investment yield risk

R2

35,851

33,481Minimum guarantee risk

R7

0

0

Investment risk

R3

195,142

166,913

Business risk

R4

5,321

4,691

1,169.3%

1,321.8%

Solvency margin ratio(A)(1/2) x (B)x 100

Notes: 1. The figures above are calculated based on Articles 86 and 87 of the Enforcement Regulation ofNotes: 1. the Insurance Business Law and Ministry of Finance No. 50, 1996.
2. "Deductible items" represent the capital increase to the subsidiary, Fukokushinrai Life Insurance Co., Ltd.
3. "Minimum guarantee risk" is calculated by standard method.

30

Fukoku Mutual Life Insurance Company

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

As of March 31, 2015

As of March 31, 2016

AmountAmountIndividual variable insurance－－

Individual variable annuities

149

67

Group annuities

82,85578,997

Total

83,00479,065(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)

As of March 31, 2015

As of March 31, 2016

NumberAmountNumberAmountIndividual variable annuities

43

136

23

64

Total

43

136

23

64

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

As of March 31, 2015

As of March 31, 2016

AmountPercentage

AmountPercentage

Cash, deposits, call loans

44

30.0%

26

39.1%

Securities

104

70.0%

41

60.9%

Domestic bonds

－

－

－

－

Domestic stocks

－

－

－

－

Foreign securities

－

－

－

－

Foreign bonds

－

－

－

－

Foreign stocks and other securities

－

－

－

－

104

70.0%

41

60.9%

Loans

－

－

－

－

Others－－－－Allowance for possible loan losses

－

－

－

－

149

100.0%

67

100.0%

Other securities

Total

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, 2015

Year ended
March 31, 2016

AmountAmountInterest, dividends and other income

1322

Gains on sales of securities－－

Gains on redemption of securities－－

Gains on valuation of securities

32

10

Foreign exchange gains, net－－

Gains from derivative instruments－－

Other investment income－

0

Losses on sales of securities－－

Losses on redemption of securities－－

Losses on valuation of securities

27

32

Foreign exchange losses, net－－

Losses from derivative instruments－－

Other investment expenses－

0

Net investment income

180(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, 2015
Carrying value onbalance sheet

Trading securities

104

As of March 31, 2016

Net valuation
gains/losses
included in thestatementsof operations

Carrying valueonbalance sheet

Net valuation
gains/losses
included in thestatementsof operations

41

(22)

5

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, 2015

Trading securities

As of March 31, 2016

Carrying value onbalance sheet

Net valuation gains/losses
included in the statementof operations

Carrying value onbalance sheet

Net valuation gains/losses
included in the statementof operations

431,744

29,449393,852(43,873)

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, 2015
Book value

As of March 31, 2016

Gains/losses

Fair value

Gains

Held-to-maturity debt securities

Book value

Fair value

Gains/losses

Losses

Gains

Losses811,903

926,148

114,245

114,245－768,786

936,313

167,526

167,526－

Domestic bonds

742,337

853,785

111,448

111,448－

740,989

906,313

165,323

165,323－

Foreign bonds

69,56572,362

2,797

2,797

－

27,79730,000

2,202

2,202

－

Monetary claims bought

－

－

－

－

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

－

－

－

－

Others

－

－

－

－

－

－

－

－

－

－

1,215,695 1,346,650

130,954

131,00450

1,074,535 1,280,612

206,077

206,077－

1,174,597 1,305,280

130,683

130,73350

1,044,436 1,250,268

205,832

205,832

－

270

270

－

244

244

－

Policy-reserve-matching bonds
Domestic bonds
Foreign bonds
Investments in subsidiaries and affiliates
Available-for-sale securities

41,09841,369

1,433

1,236

(196)

3

200

2,150,593 2,760,905

610,311611,672

1,360

30,09830,343

1,433

1,140

(293)

1

294

2,419,858 2,889,888

470,029487,293

17,263

Domestic bonds

807,550

892,795

85,24585,26924

735,758

822,51386,75487,055300

Domestic stocks

279,549

597,167

317,617317,842225

291,475

528,697

237,221244,234

7,012

Foreign securities

186,692

187,788

1,096

1,326,814 1,458,914

132,099

139,958

7,858

Foreign bonds

784,142

901,979

117,837

118,593756

1,157,841 1,265,973

108,131

111,8813,750

Foreign stocks and other securities

226,187

295,042

68,854

69,194340

168,972

192,941

23,96828,0774,108

53,16473,92020,756

20,77115

65,80979,763

13,953

16,044

2,091

Money held in trust

－

－

－

－

－

－

－

－

－

－

Monetary claims bought

－

－

－

－

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

－

－

－

－

Others

－

－

－

－

－

－

－

－

－

－

4,179,626 5,034,941

855,314856,926

1,611

4,264,614 5,107,954

843,340

860,898

17,5582,521,184 2,979,095

Other securities

Total
Domestic bonds

1,010,329 1,197,021

327,377

327,45174

597,167

317,617317,842225

Foreign securities

1,122,427 1,311,990

189,563

190,859

Foreign bonds

894,806 1,015,712

120,906

121,662

Foreign stocks and other securities

227,621296,278

68,657

69,197

540

170,406

Domestic stocks

Other securities

2,724,485 3,051,862
279,549

457,910458,211300

528,697

237,221244,234

7,012

1,296

1,386,144 1,520,398

134,254

142,407

8,153

756

1,215,738 1,326,317

110,578

114,3283,750

194,081

23,67528,0784,403

291,475

53,16473,92020,756

20,77115

65,80979,763

13,953

16,044

2,091

Money held in trust

－

－

－

－

－

－

－

－

－

－

Monetary claims bought

－

－

－

－

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

－

－

－

－

Others

－

－

－

－

－

－

－

－

－

－

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(Millions of yen)

As of March 31, 2015

As of March 31, 2016

Carrying
Carrying
value onvalue onFair value Differences
Fair value Differences
the balance
the balance
sheet
sheet

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

811,903

926,148

114,245768,786

936,313

167,526

Domestic bonds

742,337

853,785

111,448

740,989

906,313

165,323

Foreign bonds

69,56572,362

2,797

27,79730,0002,202

Money claims bought

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

Others

－

－

－

－

－

－

－

－

－

－

－

－

Domestic bonds

－

－

－

－

－

－

Foreign bonds

－

－

－

－

－

－

Money claims bought

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

Others

－

－

－

－

－

－

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

33

Fukoku Mutual Life Insurance Company

・ Policy-reserve-matching Bonds(Millions of yen)

As of March 31, 2015

As of March 31, 2016

Carrying
Carrying
value onvalue onFair value Differences
Fair value Differences
the balance
the balance
sheet
sheet

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

1,194,892 1,325,896

131,004 1,064,535 1,270,612

206,077

1,163,793 1,294,527

130,733 1,044,436 1,250,268

205,832

31,09831,369270

20,09820,343

244

－

－

－

－

－

－

10,00010,000－－20,80320,753(50)

Domestic bonds

10,803

10,753(50)－－

Foreign bonds

10,00010,000－10,00010,000

－

－

－

－

－

－

－

Others・ Available-for-sale Securities(Millions of yen)

As of March 31, 2015

Book value

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

As of March 31, 2016

Carrying
value onDifferences
the balance
sheet

2,087,739 2,699,411

Book value

Carrying
value onDifferences
the balance
sheet

611,672 2,161,431 2,648,724

487,293

Domestic bonds

800,549

885,818

85,269707,189794,245

87,055

Domestic stocks

270,078

587,921317,842

245,523

489,757

244,234

Foreign securities

964,096 1,151,884

187,788 1,166,940 1,306,899

139,958

Foreign bonds

756,771875,365

118,593 1,028,891 1,140,772

111,881

Foreign stocks

207,324

276,519

69,194

138,049

166,126

28,07753,01573,787

20,771

41,77857,822

16,044

Money held in trust

－

－

－

－

－

－

Money claims bought

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

Others

－

－

－

－

－

－
(17,263)

Other securities

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

62,854

61,493(1,360)258,426

241,163

Domestic bonds

7,001

6,977

(24)

28,56828,268(300)

Domestic stocks

9,470

9,245

(225)

45,95238,939(7,012)Foreign securities

46,23345,137(1,096)

159,873

152,014(7,858)Foreign bonds

27,37026,614(756)

128,950

125,200(3,750)Foreign stocks

18,862

18,522(340)

30,922

26,814(4,108)

148

133

(15)

24,031

21,940(2,091)

Money held in trust

－

－

－

－

－

－

Money claims bought

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

Others

－

－

－

－

－

－

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

As of March 31, 2015

As of March 31, 2016－－

Unlisted foreign bonds－－

Others－－

Held-to-maturity bonds－－

Investments in subsidiaries and affiliates

35,56035,560Available-for-sale securities

17,031

14,499

8,338

6,127

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

Unlisted foreign bonds

－

－

8,693

8,371

52,59250,060

Policy-reserve-matching bonds

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

Others
Total

34

Fukoku Mutual Life Insurance Company

・ Policy-reserve-matching Bonds(Millions of yen)

As of March 31, 2015
Carrying valueon the balance
sheet

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

Fair value

As of March 31, 2016

Differences

Carrying valueon the balance
sheet

Fair value

Differences

1,194,892

1,325,896

131,004

1,064,535

1,270,612

206,077

Domestic bonds

1,163,793

1,294,527

130,733

1,044,436

1,250,268

205,832

Foreign bonds

31,09831,369270

20,09820,343

244

－

－

－

－

－

－

20,80320,753(50)

10,00010,000－

Domestic bonds

10,803

10,753

(50)

－

－

－

Foreign bonds

10,00010,000－10,00010,000

－

－

－

－

－

－

－

OthersBonds whose fair value does not exceed
he carrying value on the balance sheet

Others・ Available-for-sale Securities(Millions of yen)

As of March 31, 2015
Carrying valueon the balance
sheetBook value

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

As of March 31, 2016

Differences

Carrying valueon the balance
sheetBook value

Differences

2,087,739

2,699,411

611,672

2,161,431

2,648,724

Domestic bonds

800,549

885,818

85,269707,189794,245

87,055

Domestic stocks

270,078

587,921317,842

245,523

489,757

244,234

Foreign securities

964,096

1,151,884

187,788

1,166,940

1,306,899

139,958

Foreign bonds

756,771875,365

118,593

1,028,891

1,140,772

111,881

Foreign stocks

207,324

276,519

69,194

138,049

166,126

28,07753,01573,787

20,771

41,77857,822

16,044

Money held in trust

－

－

－

－

－

－

Money claims bought

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

Others

－

－

－

－

－

－

62,854

61,493(1,360)258,426

241,163(17,263)

Domestic bonds

7,001

6,977

(24)

28,56828,268(300)

Domestic stocks

9,470

9,245

(225)

45,95238,939(7,012)Foreign securities

46,23345,137(1,096)

159,873

152,014(7,858)Foreign bonds

27,37026,614(756)

128,950

125,200(3,750)Foreign stocks

18,862

18,522(340)

30,922

26,814(4,108)

148

133

(15)

24,031

21,940(2,091)

Money held in trust

－

－

－

－

－

－

Money claims bought

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

Others

－

－

－

－

－

－

As of
March 31, 2015

As ofMarch 31, 2016

Other securities

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

Other securities

487,293* Book value of securities without fair value are as follows:(Millions of yen)Held-to-maturity bonds－－

Unlisted foreign bonds－－

Others－－

Policy-reserve-matching bonds－－

Investments in subsidiaries and affiliates

35,56035,560Available-for-sale securities

17,031

14,499

8,338

6,127

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

Unlisted foreign bonds

－

－

8,693

8,371

52,59250,060Unlisted domestic stocks (except over-the-counter stocks)

Others
Total

35

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)Interestrelated

As of March 31, 2015
Hedge accounting applied
Hedge accounting not applied
Total

Hedge accounting applied
Hedge accounting not applied
Total

Stockrelated

Bondrelated

Others

Total

0

820

－

－

－

(460)

685

－

200

－

426

(459)

1,506

－

200

－

1,247

Interestrelated

As of March 31, 2016

Currencyrelated

Currencyrelated

Stockrelated

Bondrelated

Others

821

Total

－

18,558

265

－

－

(972)

(799)

－

(212)

－

(1,983)(972)

17,759

265

(212)

－

16,84018,823

Note: Gains and losses from applying fair value hedge accounting (currency- related, gains of ¥820 million as of March 31, 2015,
and currency-related gains of ¥18,558 million, stock-related gains of ¥265 million as of March 31, 2016) included in 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, 2015
Notional amount/contract value

As of March 31, 2016

Fair
value

Gains
(losses)

Notional amount/contract valueOver 1 year

Fair
value

Gains
(losses)Over 1 year

Over-the-counter transactions
Yen interest rate swaption contracts
Sold－

Receipt fixed, payment floating
[

－
－

－

Payment fixed, receipt floating
[

－

－ ]

－ [

－

－

－ ]
－

－ ]

－

－ [

－ ]

－

－ [

－ ]

－

－

－

－

－

－

191

(972)

－

Bought－Receipt fixed, payment floating[
Payment fixed, receipt floating

300,000
[

－

－

－ ]
200,000

1,289 ]

300,000828(460) [

Total－
100,000

1,164 ]

(460)

(972)

Note: Figures in [ ] are option premium which are included in balance sheet.
・ Currency-related Transactions(Millions of yen)

As of March 31, 2015
Notional amount/contract valueOver 1 year

Over-the-counter transactions
Currency forward contracts
Sold
US dollar
Australian dollar
Euro
British Pound
Canadian dollar
Swedish krona
Norwegian krone
BoughtEuro
US dollar
Swiss franc
Swedish krona
Danish krone
British Pound

Fair
value

As of March 31, 2016
Gains(losses)

Notional amount/contract valueOver 1 year

Fair
value

Gains
(losses)

200,640
35,21534,77442,19059,87528,568
9
6

－
－
－
－
－
－
－
－

199,955
34,887
34,47942,58559,571
28,415
9
6

685
327
295
(394)
303
153
0
0

331,876
192,187
36,92936,197
34,10132,451
8
－

－
－
－
－
－
－
－
－

332,676
191,366
37,48536,724
34,10032,992
8
－

(800)
821
(555)
(526)
1
(540)
(0)
－

193
19
154
7
6
2
1

－
－
－
－
－
－
－

193
19
155
7
6
2
1

0
(0)
0
(0)
(0)
(0)
0

100
100
－
－
－
－
－

－
－
－
－
－
－
－

101
101
－
－
－
－
－

1
1
－
－
－
－
－

Total

685

(799)

Notes: 1. Forward exchange rates are used for exchange rates as of March 31, 2016.

36

Fukoku Mutual Life Insurance Company

・ Stock-related Transactions
No ending balance as of March 31, 2015 and 2016.

・ Bond-related Transactions(Millions of yen)
As of March 31, 2015
Notional amount/contract value

Fair value

As of March 31, 2016
Gains(losses)

Notional amount/contract valueOver 1 year

Fair value

Gains(losses)Over 1 year

Exchange-traded transactions
Yen bond futures
Sold
Bought294,876－－ 294,440
－
－

436
－

151,069－－ 151,300－－

Foreign bond futures
Sold
Bought40,083
－

－
－

(235)
－

38,343－－－40,318
－

Total

200

37

38,324
－

(231)
－

18
－
(212)

Fukoku Mutual Life Insurance Company

(iii) Hedge Accounting Applied・ Interest-related Transactions(Millions of yen)

As of March 31, 2015
Notional amount /contract value

Method ofhedge
accounting

Deferralhedge
methodAs of March 31, 2016

Hedging instruments

Notional amount /contract value

Fair
value

Hedged items

Fair
value

Hedged items

Over 1 year

Over 1 year

Yen interest rate swap contracts Loans
Receipt fixed, payment floating

85

－

0

－

－

－

Payment fixed, receipt floating

－

－

－

－

－

－

Total

(reference) Interest rate swap contracts by contractual maturity dates(Millions of yen)

As of March 31, 2015
Yen interest rate swap contracts

Over 1 year
to 3 years

Over 3 years

85

－

－

－

－

－

Average fixed rate (receipt)

2.47%

－

－

－

－

－

Average floating rate (payment)

1.06%

－

－

－

－

－

Notional amount(receipts floating, payments fixed)

－

－

－

－

－

－

Average floating rate (receipt)

－

－

－

－

－

－

Average fixed rate (payment)

－

－

－

－

－

－

Notional amount(receipts fixed, payments floating)

1 yearor shorter

As of March 31, 2016
1 yearor shorter

Over 1 year
to 3 years

Over 3 years

・ Currency-related Transactions(Millions of yen)

As of March 31, 2015
Method ofhedge
accounting

Hedging instruments

Notional amount /contract value

Fair
value

Hedged items

Notional amount /contract valueOver 1 year

524,133－

423,638－(British Pound)

52,110－(Euro)

36,682－(Australian dollar)

11,702(Canadian dollar)

－
－

－

Sold
(US dollar)

Foreigncurrencydenominatedbonds

BoughtFair
value

Over 1 year

Foreigncurrency523,313 denominated424,519 bonds

Currency forward contracts

Fair value
hedge
methodHedged items

As of March 31, 2016

－ 1,026,525

1,045,083
936,723－

918,504

51,51847,937－46,88335,79940,849－40,862－

11,475

10,213－

10,748

－

－

9,359

－

9,527

－

－

－

－

Total
Notes 1. Forward exchange rates are used for exchange rates as of March 31, 2016.
Notes 2. Regarding assets and liabilities which are denominated in foreign currencies but have fixed settlement in yen under currency forward
Notes 2. contracts and are reported in yen amounts in the balance sheet, those currency forward contracts are excluded from the table above.

・ Stock-related Transactions(Millions of yen)

As of March 31, 2015
Method ofhedge
accounting

Fair value
hedge
methodHedging instruments

Hedged items

As of March 31, 2016

Notional amount /contract value

Fair
value

Hedged items

Notional amount /contract valueOver 1 year

Fair
value

Over 1 year

Domestic
stocksStock forward contracts
Sold

－

－

－

823

823

557

Bought

－

－

－

－

－

－

Total

・ Bond-related Transactions
No ending balance as of March 31, 2015 and 2016.

38

Fukoku Mutual Life Insurance Company

13. Status of the Company, Subsidiaries and Affiliates(1) Selected Financial Data
(Millions of yen)

Year ended
March 31, 2015

Year ended
March 31, 2016

Ordinary revenues

1,047,224

1,010,478

Ordinary profits

101,606

63,151

Net surplus attributable to the parent company

69,63342,124Comprehensive income

249,218(54,123)

Notes: From the year ended March 31, 2016, “Net surplus” is presented as
Notes: “Net surplus attributable to the parent company.”

As ofMarch 31, 2015

As ofMarch 31, 2016

Total assets

8,326,588

8,330,606

Solvency margin ratio

1,195.7%

1,341.5%(2) Scope of Consolidation and Application of Equity Method
Number of consolidated subsidiaries: 5
Number of unconsolidated subsidiaries accounted for under the equity method: 0
Number of affiliates accounted for under the equity method: 0

39

Fukoku Mutual Life Insurance Company

(3) Consolidated Balance Sheets(Millions of yen)
As of
As of
March 31, 2015 March 31, 2016

Liabilities:

Assets:Cash and deposits

154,319

172,049

Call loans

186,500

200,000

870

813

34,31987,793

Monetary claims bought
Money held in trust
Securities

As of
As of
March 31, 2015 March 31, 2016

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

7,234,120

7,361,627

23,501

23,003

7,160,599

7,287,604

49,31150,368707

650

6,881,578

6,859,234

Loans

767,293

697,056

Agency payables

377

480

Tangible fixed assets

227,919

218,974

Reinsurance payables

125

146

Land

132,261

125,310Subordinated bonds

118,959

141,935

Buildings

91,04886,217

Other liabilities

59,24045,940

Lease assets

954

2,324

Net defined benefit liabilities

50,69140,649Construction in progress

630

1,590

Reserve for price fluctuation of securities

55,17777,289Other tangible fixed assets

3,025

3,531

Deferred tax liabilities

84,52430,837

15,323

20,941

Deferred tax liabilities forrevaluation reserve for land

14,787

14,274

Software11,613

11,259Total liabilities

7,618,005

7,713,180

Goodwill

2,328

1,564

Net assets:

Lease assets

1,102

658

Foundation funds

30,00030,000279

7,457

Accumulated foundation funds redeemed

86,00086,000

4

2

Reserve for revaluation

112

112

107

144

Consolidated surplus

145,942

151,251

59,65975,308

Total foundation funds, surplus and others

262,054

267,363137

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

440,109349,884

0－

Revaluation reserve for land, net of tax

3,894

4,128

Foreign currency translation adjustment

(52)

(115)

(3,000)(10,414)

Total accumulated othercomprehensive income

440,951

343,482

Non-controlling interests

5,576

6,578

708,582

617,425

8,326,588

8,330,606

Intangible fixed assets

Other intangible fixed assets
Agency receivables
Reinsurance receivables
Other assets
Deferred tax assets
Allowance for possible loan losses

640(1,948)(1,851)

Deferred valuation gains (losses)
under hedge accounting, net of tax

Accumulated remeasurements ofdefined benefit plans

Total net assets
Total assets

8,326,588

8,330,606

Total liabilities and net assets

Notes: From the year ended March 31, 2016, “Minority interests” is presented as “Non-controlling interests.”

40

Fukoku Mutual Life Insurance Company

(4) Consolidated Statements of Operations and Comprehensive Income[Consolidated Statements of Operations](Millions of yen)
Year ended March 31, 2015

Year ended March 31, 2016
788,854

Ordinary revenues:
Premium and other income

796,458

Investment income

239,037

210,908

Interest, dividends and other income

159,905

160,709

Gains from money held in trust, net

2,349

11,332

Gains from trading securities, net

35,232－

Gains on sales of securities

27,31038,438Foreign exchange gains, net

2,041

－

270

77

59

350

Reversal of allowance for possible loan losses
Other investment income
Gains from separate accounts, net

11,869－Other ordinary revenues

11,728

10,715

Total ordinary revenues

1,047,224

1,010,478

Ordinary expenses:
Claims and other payments

546,964

653,164

Claims116,788

130,954

Annuities

156,377

204,136

Benefits

128,295

130,191
155,996

Surrenders

116,806

Other payments

28,69431,884

Provision for policy reserve and others

242,225

127,052

Provision for policy reserve242,170

127,004

Interest on accumulated dividends to policyholders

54

47

Interest on accumulated dividends to policyholders (subsidiary)00Investment expenses

34,572

46,596

Interest expenses

4,267

4,324

－

12,422

1,075

5,820

Losses on trading securities, net
Losses on sales of securities
Losses on valuation of securities
Losses from derivative instruments, net

0－18,679

3,549

－

8,603

Depreciation of real estate for rent and other assets

4,877

4,482

Other investment expenses

5,673

5,038

Foreign exchange losses, net

Losses on separate accounts, net
Operating expenses

－

2,354

97,20998,078Other ordinary expenses

24,64622,435

Total ordinary expenses

945,618

947,327

Ordinary profits

101,606

63,151

Gains on disposal of fixed assets

6

1,503

Gain on contribution of securities to retirement benefit trust

－

7,913

State subsidy and others－

140

Total extraordinary gains

6

9,557

Losses on disposal of fixed assets

167

283

Impairment losses

698

242

Provision of reserve for price fluctuation of securities

4,851

22,111

Total extraordinary losses

5,718

22,637Extraordinary gains:

Extraordinary losses:

Provision for reserve for dividends to policyholders (subsidiary)
Surplus before income taxes

483

422

95,41149,647

Income taxes：
Current

28,933

15,619Deferred
Total income taxes(3,318)(8,336)

25,614

7,282

Net surplus

69,79642,364

Net surplus attributable to non-controlling interests
Net surplus attributable to the parent company

163

240

69,63342,124

Notes: From the year ended March 31, 2016, “Net surplus before minority interests,” “Minority interests”
Notes: and “Net surplus” are presented as “Net surplus,” “Net surplus attributable to non-controlling interests” andNotes: “Net surplus attributable to the parent company,” respectively.

41

Fukoku Mutual Life Insurance Company

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

Year ended March 31, 2015

Year ended March 31, 2016

Net surplus

69,79642,364

Other comprehensive income

179,422(96,487)

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

177,308(89,444)(2)(0)

Revaluation reserve for land, net of tax

989

433

Foreign currency translation adjustments

208

(62)

Remeasurements of defined benefit plan, net of tax

918(7,414)Comprehensive income

249,218(54,123)

Comprehensive income attributable to the parent company

248,696(55,144)

522

1,021

Deferred valuation gains (losses) under hedge accounting, net of tax

Comprehensive income attributable to non-controlling interests

Notes: From the year ended March 31, 2016, “Net surplus before minority interests,” and “Comprehensive income attributable toNotes: minority interests” are presented as “Net surplus,” and “Comprehensive income attributable to non-controlling interests,” respectively.

42

Fukoku Mutual Life Insurance Company

(5) Consolidated Statements of Cash Flows
Year ended March 31, 2015

(Millions of yen)
Year ended March 31, 2016

Cash flows from operating activities:
Surplus before income taxes
Depreciation of real estate for rent and other assets
Depreciation
Impairment losses
Amortization of goodwill(Gains) Losses on contribution of securities to retirement benefit trust
Increase (Decrease) in reserve for outstanding claims
Increase (Decrease) in policy reserve
Interest on accumulated dividends to policyholders
Interest on accumulated dividends to policyholders (subsidiary)
Provision for 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 of securities
Interest, dividends and other income(Gains) Losses on securities
Interest expenses
Foreign exchange (gains) losses, net(Gains) Losses on tangible fixed assets, net(Increase) Decrease in agency receivables(Increase) Decrease in reinsurance receivables(Increase) Decrease in other assets except from investing and financing activities
Increase (Decrease) in agency payables
Increase (Decrease) in reinsurance payables
Increase (Decrease) in other liabilities except from investing and financing activities
OthersSubtotalInterest, dividends and other income received
Interest paid
Dividends to policyholders paid
Dividends to policyholders paid (subsidiary)Corporate income tax (paid) refunded
Net cash provided by (used in) operating activities (I)95,411
4,877
7,323
698
763
－
(1,669)242,170
54
0
483
(333)
(1,467)
4,851(159,905)(57,006)
4,267(2,041)
144
(3)
(12)
(2,196)37
12(76)
15,712
152,096
171,494(4,308)(33,346)(511)(25,145)
260,278

49,647
4,482
7,425
242
763
(7,913)(498)
127,004
47
0
422
(96)
(1,623)
22,111(160,709)(25,624)
4,324
8,602
(1,231)1(37)(1,037)
103
21
1,626
15,51843,574
172,162(4,943)(35,688)(479)(31,682)
142,943(146)
141(673,696)
550,835(58,621)
121,587(81,890)(4,636)(146,427)
113,851 ] [(3,357)147(3,343)(152,980)(73)
57(1,050,013)
821,187(71,613)
132,491
45,173(4,093)(126,884)
16,059 ](7,838)
11,410(8,925)(132,237)－－
10,000(15,000)
(621)
(12)
(740)
(6,374)(50)
100,872
238,373
339,246

62,065(40,326)
－
－
(316)
(19)
(520)
20,883(377)
31,212339,246
370,458

Cash flows from investing activities:(Increase) Decrease in deposits
Proceeds from sales and redemption of monetary claims bought
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 settlement of derivatives, net
OthersSubtotal (IIa)[(I+IIa)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:
Financing of subordinated bonds
Redemption of subordinated bonds
Financing of additional foundation funds
Redemption of foundation funds
Interest payment for 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 year
Cash and cash equivalents at the end of the year

Notes: From the year ended March 31, 2016, “Dividends paid to minority interests” is presented as “Dividends paid to non-controlling interests.”

43

Fukoku Mutual Life Insurance Company

(6) Consolidated Statements of Changes in Net Assets[For the year ended March 31, 2015](Millions of yen)Foundation funds, surplus and others

Balance at the beginning of
the current period

Foundation
funds

Accumulated
foundation
funds
redeemedReserve forrevaluation

35,00071,000112

Cumulative effects of changes inaccounting policies
Restated balance

35,00071,000112

Total foundation
Consolidated funds, surplus andotherssurplus126,584

232,696(3,297)(3,297)

123,286

229,399

Changes in the current period
Financing of additional foundation funds

10,00010,000Additions to reserve for dividends
to policyholders(31,595)

Addtions to accumulated foundation
funds redeemed

15,00015,000

Payment of interest on foundation funds
Net surplus attributable to the parent
company for the current period
Redemption of foundation funds(31,595)

(621)

(621)

69,633

69,633(15,000)(15,000)

Reversal of reserve for redemption offoundation funds
Reversal of revaluation reserve
for land, net of tax(15,000)(15,000)

239

239

Net changes, excluding foundation funds,
surplus and others
Total changes in the current period(5,000)15,000－22,65532,655

Balance at the end of the current period

30,00086,000112

145,942

262,054

Accumulated other comprehensive income
Net unrealized
Deferred
gains (losses) valuation gains
on available- (losses) under Revaluation
for-salehedge
reserve forsecurities, net accounting, net land, net ofof taxof taxtax
Balance at the beginning of
the current period

263,1612

3,144

Foreigncurrencytranslation
adjustments

(261)

Total
Accumlated
accumulatedNonremeasurements
otherof defined benefit comprehensive controllinginterests
plansincome(3,918)262,127

Cumulative effects of changes inaccounting policies
Restated balance

Total net
assets

5,066 499,890(3,297)263,161

2

3,144

(261)

(3,918)262,127

5,066 496,593

Changes in the current period
Financing of additional foundation funds

10,000Additions to reserve for dividends
to policyholders(31,595)

Addtions to accumulated foundation
funds redeemed

15,000(621)

Payment of interest on foundation funds
Net surplus attributable to the parent
company for the current period

69,633

Redemption of foundation funds(15,000)

Reversal of reserve for redemption offoundation funds(15,000)

Reversal of revaluation reserve
for land, net of tax
Net changes, excluding foundation funds,
surplus and others

239
176,948

(2)

750

208

918

178,823510 179,333

Total changes in the current period

176,948

(2)

750

208

918

178,823510 211,988

Balance at the end of the current period

440,109

0

3,894

(52)

(3,000)440,951

5,576 708,582

44

Fukoku Mutual Life Insurance Company

[For the year ended March 31, 2016](Millions of yen)Foundation funds, surplus and others

Balance at the beginning of
the current period

Foundation
funds

Accumulated
foundation
funds
redeemedReserve forrevaluation

30,00086,000112

Total foundation
Consolidated funds, surplus andotherssurplus145,942

262,054(36,698)(36,698)

(316)

(316)

42,124

42,124199

199

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

－

－

－

5,309

5,309

30,00086,000112

151,251

267,363

Accumulated other comprehensive income
Net unrealized
Deferred
gains (losses) valuation gains
on available- (losses) under Revaluation
for-salehedge
reserve forsecurities, net accounting, net land, net ofof taxof taxtax
Balance at the beginning of
the current period

440,10903,894

Foreigncurrencytranslation
adjustments

(52)

Total
Accumulated
accumulated
remeasurements
other
Nonof defined benefit comprehensive controllingplansincomeinterests(3,000)440,951

Total net
assets5,576 708,582

Changes in the current period
Additions to reserve for dividends
to policyholders(36,698)(316)

Payment of interest on foundation funds
Net surplus attributable to the parent
company for the current period

42,124

Reversal of revaluation reserve
for land, net of tax
Net changes, excluding foundation funds,
surplus and others

199(90,225)

(0)

234

(62)

(7,414)(97,468)

1,002(96,466)

Total changes in the current period(90,225)

(0)

234

(62)

(7,414)(97,468)

1,002(91,157)

Balance at the end of the current period

394,884

－

4,128

(115)

(10,414)343,482

6,578 617,425

Notes: From the year ended March 31, 2016, “Net surplus,” and “Minority interests”
Notes: are presented as “Net surplus attributable to the parent company,” and “Non-controlling interests,” respectively.

45

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 maintainedby Fukoku Mutual Life Insurance Company (the “Company”) and its consolidated subsidiaries inaccordance with the provisions set forth in the Insurance Business Law of Japan and its related rules andregulations and in conformity with accounting principles generally accepted in Japan, which are different
in certain respects from accounting principles generally accepted in countries and jurisdictions other thanJapan.
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 eliminated. As a result, total in yen shown herein do
not necessarily agree with the sum of the individual amounts.

2. Principles of Consolidation(1) Scope of Consolidation
Consolidated subsidiaries as of March 31, 2016 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.
Major unconsolidated subsidiary is Fukoku Seimei Building Company Limited.
Eight subsidiaries are excluded from the scope of consolidation, as each one of them is small in
its total assets, amount of sales, net surplus for the period and surplus. And they are sufficiently
insignificant to reasonable judgement on their impact on the financial position and results of operationof the Company's group.
(2) Application of Equity method
Unconsolidated subsidiaries (such as Fukoku Seimei Building 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, 2016.
(3) Fiscal Year of Consolidated Subsidiaries
Among the subsidiaries to be consolidated, fiscal year-end of overseas subsidiaries is December 31.
For the preparation of consolidated financial statements, financial statements as of that date are usedand concerning any important transaction taking place in between December 31 and the consolidated
closing date, necessary adjustments for consolidation are made.
(4) Amortization of Goodwill
Goodwill is amortized by the straight-line method over a period of 10 years and in case of theimmaterial amount of goodwill, such amount is fully charged to operating expenses when incurred.

46

Fukoku Mutual Life Insurance Company

II. Notes to Balance Sheets
1. Significant Accounting Policies(1) Valuation Methods of Securities
The valuation of securities, including bank 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
average method.
ii) Held-to-maturity debt securities are stated at amortized cost under the straight-line method, cost
being determined by the moving average method.
iii) 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 Insurance Industry”(Industry Audit Committee Report No.21 issued by the Japanese Institute of Certified Public
Accountants on November 16, 2000).
iv) Investments in unconsolidated subsidiaries and affiliates which are not accounted for under theequity method are stated at cost, cost being determined by the moving average method.
v) Available-for-sale securities with fair market value are stated at fair market value based on themarket prices at the balance sheet date. Costs of their sales are determined by the moving averagemethod. Net unrealized gains or losses on these available-for-sale securities, net of taxes, arerecorded as a separate component of net assets.
Available-for-sale securities whose fair values are deemed extremely difficult to obtain are stated atcost, 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 isconsidered to be an adjustment of interest. Such bonds are stated at amortized cost under thestraight-line method, cost being determined by the moving average method.
(2) Valuation Methods of Derivative Instruments
Derivative instruments are stated at fair market value.
(3) Revaluation of Land
The Company revalued the land for business purposes based on the Law for Revaluation of Land (Law
No.34 promulgated on March 31, 1998). The difference between fair value and book value resulting
from the revaluation, net of related taxes, is recorded as revaluation reserve for land as a separate
component of net assets and the related tax is recorded as deferred tax liabilities for revaluation
reserve for land.
 Date of revaluation: March 31, 2002
 Method of revaluation as prescribed for in Article 3 Paragraph 3 of the said Law:

Calculation is based on the appraisal value for property tax set forth in Article 2 item 3 of the
Enforcement Ordinance of the Law 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 Ordinancewith certain reasonable adjustments.
(4) Depreciation of Tangible Fixed Assets
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 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 lease term without residual value
Other tangible fixed assets acquired for ¥100,000 or more but less than ¥200,000 are depreciatedequally over three years.

47

Fukoku Mutual Life Insurance Company

(5) Foreign Currency Translation
Foreign currency denominated assets and liabilities, except for investments in unconsolidated
subsidiaries and affiliates are translated into Japanese yen at the effective exchange rate prevailing at
the balance sheet date. Investments in unconsolidated subsidiaries and affiliates are translated into
Japanese yen at the exchange rate on the date of acquisition.
(6) Allowance for Possible Loan Losses
Allowance for possible loan losses is provided in accordance with the Company's standards of selfassessment and write-offs and reserves on credit quality:i) For the credits of borrowers who are legally bankrupt such as being in the proceedings ofbankruptcy or civil rehabilitation (hereinafter called "legally bankrupt borrowers") and who aresubstantially bankrupt (hereinafter called "substantially bankrupt borrowers"), the Company
provides the remaining amount 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 theamounts deemed as necessary considering the borrowers' ability to pay, within the amounts after deductions of the amount 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 the borrowers' balance by the actual ratio of bad debt losses on defaults
during a certain past period.
All credits are assessed by the relevant departments in accordance with the Company’s standards ofself-assessment on credit quality. The results of the assessment are reviewed by the audit department,
which is independent of business-related divisions. Subsequently, the allowance for possible loan
losses is provided based on the results of these assessments.
For the credits of legally bankrupt borrowers and substantially bankrupt borrowers, the amounts
remaining after deductions of collateral values or the amounts collectible through the executions ofguarantees are written-off directly from the borrowers’ balances as the estimated uncollectible amounts.
The amount written-off as of March 31, 2016 was ¥247 million.
(7) Accounting of Employees’ Retirement Benefits
Net defined benefit liabilities are presented after deducting pension plan assets from retirement benefit
obligations, based on estimated amounts as of the balance sheet date.
The Company uses the following methods of accounting in relation to retirement benefits.
 Method for allocation of projected retirement benefits.............................
 Amortization period of actuarial gains and losses....................................

Benefit formula basis
10 years

 Amortization period of prior service cost..................................................

10 years

In the fiscal period, the Company contributed a portion of its securities to establish a trust account for
retirement benefits amounting to ¥18,666 million and recognized a gain on contribution of securities toretirement benefit trust amounting to ¥7,913 million as an extraordinary gain.
(8) Reserve for Price Fluctuation of Securities
Reserve for price fluctuation of securities is calculated in accordance with Article 115 of the Insurance
Business Law.
(9) Lease Transactions as a Lessor
As for the finance lease transactions where the Company is a lessor, the lease fee is recorded in“Interest, dividends and other income” at the time of receiving the lease fee. The corresponding cost of
the lease transactions is recorded in “Other investment expenses,” which is calculated by deducting anamount equivalent to the interest allocated over the lease term from the lease fee received.

48

Fukoku Mutual Life Insurance Company

(10) Accounting for Hedge Activities
Hedge accounting is based on "Accounting Standards for Financial Instruments" (ASBJ Statement No.
10, August 11, 2006). The Company applies foreign currency swaps mainly as a hedge against the riskof foreign exchange fluctuation in relation to foreign currency-denominated bonds, a market pricehedge as hedge against the risk of price fluctuation in relation to domestic stocks, a deferred hedge ashedge against the risk of interest rate fluctuation in relation to loans extended by the Company, and ahedge against the risk foreign exchange fluctuation in relation to foreign currency-denominated bonds
issued by the Company.
For judging the effectiveness of hedge used, ratio analysis of comparing the fluctuations in the fairvalue or cash flows of hedged items and hedging instruments is mostly applied.
(11) Accounting for Consumption Taxes
The Company accounts for consumption taxes by the tax-exclusion method. The consumption taxes oncertain assets, which are not deductible from consumption taxes withheld and that are stipulated to bedeferred under the Tax Law, are deferred as prepaid expenses and amortized equally over five years.
Consumption taxes other than deferred consumption taxes are recognized as an expense
when incurred.
(12) Policy Reserve
Policy reserve is based on Article 116 of the Insurance Business Law, and the premium reserve at theend of fiscal year is calculated by the following method:i) In regard to the policies subject to the standard policy reserve, the method as prescribed by theCommissioner of Financial Services Agency (Ministry of Finance Ordinance No. 48, 1996) is applied.
ii) In regard to the policies not subject to the standard policy reserve, the net level premium method
is applied.
Based on the provision of Article 69, paragraph 5, of the Enforcement Regulation of the Insurance
Business Law, the Company includes additional funded policy reserves as follows.
At the end of the fiscal year ended March 31, 2013, among individual annuity insurance policies
with an assumed interest rate of 5.00% or higher, policies that have an annuity commencement date onor prior to March 31, 2013 (excluding wife’s annuity insurance additional rider), the Company reduced
the assumed interest rate to 1.00% and funded additional policy reserves. Furthermore, for certain
hospitalization riders with surgery benefits and long-term hospitalization benefits, the Company funded
additional policy reserves. At the end of the current fiscal year, the balance of these policy reserves
was ¥47,438 million.
At the end of the current fiscal year, among individual annuity insurance policies with an assumed
interest rate of 5.00% or higher, policies that have an annuity commencement date from April 1, 2013,
through March 31, 2017 (excluding wife’s annuity insurance additional rider), the Company reduced theassumed interest rate of policy reserve to 1.00% and funded additional policy reserves. Furthermore,
for certain whole life insurance policies that include distribution of surplus every five years theCompany funded additional policy reserves. At the end of the current fiscal year, the balance of thesepolicy reserves was ¥33,100 million. As a result, compared with a situation in which the Company did
not carry out this additional funding, provisions to policy reserves increased by ¥33,100 million, andordinary profits and surplus before income taxes both decreased by ¥33,100 million.
(13) Amortization Method for Intangible Fixed Assets
Intangible fixed assets are amortized as follows:i) Software
Software for internal use is amortized based on a straight-line method over the estimated useful
lives.
ii) Lease assets
Lease assets are amortized based on a straight-line method over the lease term.
(14) Policy-reserve-matching Bonds
Of the bonds corresponding to the sub-groups of individual insurance and annuities which are set by
insurance types and investment policies, the bonds that are held to match the duration of liabilities areclassified 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).
49

Fukoku Mutual Life Insurance Company

2. Accounting Changes and Corrections of Past Errors
From April 1, 2015, the Company applied the “Revised Accounting Standard for Business Combinations”(ASBJ Statement No. 21, September 13, 2013), “Revised Accounting Standard for Consolidated Financial
Statements” (ASBJ Statement No. 22, September 13, 2013), “Revised Accounting Standard for Business
Divestitures” (ASBJ Statement No. 7, September 13, 2013), and related guidance. As a result, thechanges in the Company’s ownership interest in a subsidiary is accounted for as consolidated surplus, aslong as the Company retains control over the subsidiary, and the acquisition-related costs are accounted
for as expenses in the period when the costs are incurred. With regard to business combinations
executed on or after April 1, 2015, the Company has changed the accounting method to reflect
adjustments to the allocation of acquisition cost under provisional accounting treatment on the
consolidated financial statements of the period in which the relevant business combinations became orwill become effective. In addition, the Company has changed the presentation of interim net surplus andthe presentation of minority interests has been changed to non-controlling interests.
In the Consolidated Statements of Cash Flows for the year ended March 31, 2016, with regard to
cash flows relating to the acquisition and sale of stocks of subsidiaries and affiliates that do not affect thescope of consolidation, these are classified within cash flows from financing activities. With regard to cash
flows relating to acquisition-related expenses of subsidiaries and affiliates for which a change in thescope of consolidation occurs, or expenses stemming from the acquisition or sale of stocks ofsubsidiaries and affiliates that do not affect the scope of consolidation, the Company has changed thepresentation of such expenses to be classified within cash flows from operating activities.
The Company has applied these revised accounting standards prospectively in accordance withtransitional provisions in paragraph 58-2 (4) of the Accounting Standard for Business Combinations,paragraph 44-5 (4) of the Accounting Standard for Consolidated Financial Statements and paragraph 574 (4) of the Accounting Standard for Business Divestitures.
These accounting changes have no impact on ordinary profits or surplus before income taxes forthe year ended March 31, 2016. These accounting changes have no impact on consolidated surplus as ofMarch 31, 2016.

3. Principal Accounting Standards Published before March 31, 2016 but not Applied
In accordance with the issuance of “Implementation Guidance on Recoverability of Deferred Tax Assets”(ASBJ Guidance No. 26, March 28, 2016), the method of accounting treatment relating to therecoverability of deferred tax assets has been revised.
Compulsory application of this revised guidance is from fiscal years beginning on or after April 1,
2016.The Company plans to apply this standard from the beginning of the fiscal year ending March 31,
2017.
The Company is currently evaluating the impact of the application of this guidance in the initial fiscal
year of its application.

4. Financial Instruments
Asset management of the general accounts other than the separate accounts stipulated in Article 118
Paragraph 1 of the Insurance Business Law 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 the medium-to-long term viewpoints. The
Company is diversifying investments in assets such as foreign securities and equity securities within theacceptable range of risk 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 theportfolios. Derivatives are mainly used to hedge the market risk regarding spot-priced assets andliabilities. 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 fromthe basic principle and secures the safety of the assets by utilizing control functions of the Financial andInvestment Risk Management Department towards the asset management sections, monitoring thestatus 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 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 andliabilities as of March 31, 2016, were as follows:

50

Fukoku Mutual Life Insurance Company

Carrying amount

Fair value

Difference(Millions of yen)

Cash and deposits:
Cash and deposits not treated as securities...

¥

170,272¥

170,272¥―

Total cash and deposits...................................

170,272

170,272―

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

200,000

200,000―

Claims treated as loans..................................

813

881

67

Total monetary claims bought.........................

813

881

67

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

86,79386,793―

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

86,79386,793―

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

233,015233,015―

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

1,237,993

1,521,976

283,983

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

2,105,736

2,419,734

313,998

Investments in subsidiaries and affiliates......

40

41

1

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

3,193,386

3,193,386―

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

6,770,172

7,368,155

597,982

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

64,81364,813(0 )Ordinary loans................................................

632,242664,774

32,531

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

697,056

729,587

32,531

Assets total........................................................

7,925,108

8,555,690

630,581

Subordinated bonds* ........................................

141,935

148,943

7,008

Liabilities total.....................................................

141,935

148,943

7,008

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

(1,982 )(1,982 )―Hedge accounting applied.............................

18,823

18,823―

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

¥ 16,841¥ 16,841

Monetary claims bought:

Money held in trust:

Securities:

Loans:

1

2

Derivative instruments* :¥―*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.
*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)) 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) and securities managed astrust assets in money held in trust:
The fair values of marketable securities are measured at the quoted market prices at the balance sheet
date. The fair values of other securities without the quoted market prices are based on the prices
reasonably calculated such as the prices offered by the information vendors or counterparty financial
institutions.
51

Fukoku Mutual Life Insurance Company

Investments in unconsolidated subsidiaries and affiliates, unlisted stocks and investments inpartnerships 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 ¥519
million, ¥6,127 million and ¥8,371 million as of March 31, 2016.
(3) Loans and monetary claims bought treated as loans:
The fair values of policy loans are deemed to approximate book values, considering estimatedrepayment period and interest rate conditions since their repayment deadlines have not been set up
due to the characteristics that the loans are limited to the amount of cash surrender values. Therefore,
the book values are used as the fair values of policy loans.
The fair values of floating interest rate loans among the ordinary loans and monetary claimsbought treated as loans approximate the book values because the market interest rates are reflected infuture cash flows in a short period. Therefore, the fair values of floating interest rate loans andmonetary claims bought treated as loans are based on their book values. The fair values of fixedinterest rate loans are measured by discounting the future cash flows to the present values.
The fair values of loans receivable from legally bankrupt borrowers, substantially bankrupt
borrowers and not currently bankrupt borrowers and monetary claims bought treated as loans arecomputed by deducting the amount of the allowance for doubtful accounts 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 the exchange.
ii) The fair values of forward contracts, options and swaps traded over the counter are based on thequoted prices offered by counterparty financial institutions.
iii) The fair values of foreign currency forward contracts are determined based on the spot exchange
rate and forward contract rate.

5. Investment and Rental Property
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 ¥168,709 million and¥275,299 million as of March 31, 2016, respectively. The fair value is mainly based on the value
calculated by the Company in accordance with real estate appraisal standards which includes someadjustments using the reference prices.
The amount corresponding to asset retirement obligations included in the carrying amount ofinvestment and rental properties was ¥1,117 million as of March 31, 2016.

6. Securities Lent under Lending Agreements
The amount of securities lent under lending agreements was ¥18,189 million as of March 31, 2016.

7. Loans Receivable
The total amount of credits to bankrupt borrowers, delinquent loans, delinquent loans past 3 months ormore and restructured loans, which were included in loans, was ¥997 million as of March 31, 2016.
i) The balance of credits to bankrupt borrowers was ¥223 million as of March 31, 2016.
ii) The balance of delinquent loans was ¥773 million as of March 31, 2016.
iii) There was no balance of delinquent loans past 3 months or more and restructured loans as ofMarch 31, 2016.
The direct write-offs related to loans decreased the credits to bankrupt borrowers described above by¥247 million as of March 31, 2016.
Credits to bankrupt borrowers represent loans, excluding the balances already written-off, whichmeet the conditions prescribed in Article 96 Paragraph 1 item 3 and 4 of the Enforcement Regulations of
the Corporate Tax Law. Moreover, accrued interest on these loans is not recorded as income after
52

Fukoku Mutual Life Insurance Company

determining that principal of or interest on these loans is unlikely 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 to assist and support the borrowers in the restructuringof their business.
Delinquent loans past 3 months or more are loans for which interest payments or repayments ofprincipal 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 which certain concessions favorable to borrowers, such as interest
reduction or exemption, rescheduling of due date of principal or interest payment, waiver of claim or otherterms, 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.

8. Accumulated Depreciation of Tangible Fixed Assets
Accumulated depreciation of tangible fixed assets totaled to ¥153,103 million as of March 31, 2016.

9. Separate Accounts
Total assets in separate accounts provided for in Article 118 of the Insurance Business Law were ¥79,065
million as of March 31, 2016. The amounts of separate account liabilities were the same as separate
account assets.

10. Receivables from/Payables to Unconsolidated Subsidiaries
The total amounts of receivables from/payables to unconsolidated subsidiaries were ¥2,347 million and¥171 million as of March 31, 2016, respectively.

11. Income Taxes
Deferred tax assets and deferred tax liabilities as of March 31, 2016 were ¥116,641 million and ¥144,360
million , respectively. Valuation allowance for deferred tax assets was ¥2,981 million.
Major components of deferred tax assets were ¥69,933 million of policy reserves, ¥21,641 million ofreserve for price fluctuation of securities and ¥16,610 million of net defined benefit liabilities as of March
31, 2016.
Major component of deferred tax liabilities was ¥136,763 million of net unrealized gains on availablefor-sale securities as of March 31, 2016.
The statutory tax rate and the actual effective tax rate for the year ended March 31, 2016 were
28.9% and 14.7%, respectively. The difference between the statutory tax rate and the actual effective tax
rate was attributable mainly to -20.5% of reserve for dividends to the policyholders and +6.1% of the tax
rate adjustment of deferred tax assets at the end of period.
Accompanying the enactment of the Act on Partial Amendment to the Income Tax Act, etc. (Act No.
15, 2016) by the National Diet on March 29, 2016, the effective statutory tax rate of 28.9%, which wasused for calculating deferred tax assets and deferred tax liabilities, has been revised to 28.2% for items
expected to be collected or paid during the period from April 1, 2016, to March 31, 2018. For items
expected to be collected or paid on or later than April 1, 2018, the rate has been revised to 28.0%.
Based of these changes, deferred tax assets decreased ¥8 million, deferred tax liabilities decreasedby ¥1,134 million, and deferred tax liabilities for revaluation reserve for land decreased by ¥433 million.
Income taxes-deferred increased by ¥3,025 million.

53

Fukoku Mutual Life Insurance Company

12. Reserve for Dividends to Policyholders
Changes in reserve for dividends to policyholders for the year ended March 31, 2016 were as follows:(Millions of yen)

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

¥ 49,311

Transfer from surplus in previous period…..............................................

36,698Dividends paid in the current period.........................................................

(35,688)

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

47

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

¥ 50,368

13. Reserve for Dividends to Policyholders (Fukokushinrai Life Insurance Co., Ltd.)
Changes in reserve for dividends to policyholders for the year ended March 31, 2016 were as follows:(Millions of yen)

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

¥ 707

Dividends paid in the current period.........................................................

(479)

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

0

Provision for reserve for dividends to policyholders.................................

422

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

¥ 650

14. Stocks of Unconsolidated Subsidiaries
The amount of stocks of unconsolidated subsidiaries was ¥560 million as of March 31, 2016.

15. Pledged Assets and Secured Debts
Assets pledged as collateral as of March 31, 2016 were ¥26,284 million of securities and ¥1,279 millionof bank deposits.
Secured debts as of March 31, 2016 were ¥4,906 million.

16. Policy Reserves for the Reinsurance Contracts
Reserve for outstanding claims for the reinsurance contracts provided in accordance with Article 71
Paragraph 1 of the Enforcement Regulation of the Insurance Business Law (hereinafter called “reservefor outstanding claims for ceded reinsurance”) was ¥15 million as of March 31, 2016.
Policy reserve for the reinsurance contracts provided in accordance with Article 71 Paragraph 1 of
the Enforcement Regulation of the Insurance Business Law (hereinafter called “policy reserve for ceded
reinsurance”) was ¥51 million as of March 31, 2016.

17. Commitment LineAs of March 31, 2016, there were unused commitment line agreements under which the Company is thelender of ¥2,172 million.

18. Subordinated Bonds
Repayments of subordinated bonds are subordinated to other obligations.

19. Contribution to Policyholders Protection Corporation
The future contribution to the Life Insurance Policyholders Protection Corporation of Japan under Article
259 of the Insurance Business Law was estimated at ¥12,450 million as of March 31, 2016. The
contribution was charged as operating expenses in the year in which it was paid.

54

Fukoku Mutual Life Insurance Company

20. Matters Related to Employees’ Retirement Benefits as of March 31, 2016
(1) Overview of Employees’ Retirement Benefit Plan
As for a defined benefit plan for office-based employees, the Company and its consolidated
subsidiaries have a defined benefit corporate pension plan and retirement lump-sum payments. As fora defined contribution plan for these employees, the Company also has a defined contribution pension
plan.
As for a defined benefit plan for sales employees, the Company has retirement lump-sum payments.
The Company places a retirement benefit trust in relation to the retirement lump-sum grant planfor sales employees.
(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 current period….............
Service cost.................................................................................................
Interest cost.................................................................................................
Actuarial differences occurred during the period…......................................
Retirement benefit payments.......................................................................
Retirement benefit obligation at the end of current period……....................

¥ 76,806
3,088
1,073
9,106
(4,787)¥ 85,285ii) Reconciliation of beginning and end of balance of pension plan assets(Millions of yen)

Pension plan assets at the beginning of current period.….........................
Expected return on pension plan assets.....................................................
Actuarial differences occurred during the period……..................................
Contributions by the employer....................................................................
Retirement benefit payments......................................................................
Contribution amount on establishment of retirement benefit trust...............
Pension plan assets at the end of current period…….................................

¥ 26,114
783(1,987 )2,380(1,322 )18,666¥ 44,636

iii) Reconciliation of retirement benefit obligation and pension plan assets with net defined benefit
liabilities presented on the 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. Net amount of liabilities and assets presented on the consolidated balance
sheet......................................................................................
f. Net defined benefit liabilities................................................................
g. Net defined benefit assets....................................................................
h. Net amount of liabilities and assets presented on the consolidated balance
sheet.......................................................................................

¥ 73,675(44,636 )
29,03911,61040,64940,649―¥ 40,649

iv) 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 cost..............................................................
Retirement benefit expenses related to defined benefit plan...................
55¥ 3,088
1,073(783 )
921(76 )¥ 4,223

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

¥ (10,172 )(76 )(10,248 )vi) 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.................................................................
Total............................................................................................................

¥(14,864 )
399(14,465 )vii) Breakdown of pension plan assets
The breakdown of asset categories as a percentage of total pension plan assets is as follows:
Domestic stocks..........................................................................................
Life insurance general account...................................................................
Domestic bonds..........................................................................................
Foreign stocks.............................................................................................
Foreign bonds.............................................................................................
Others.........................................................................................................
Total............................................................................................................

48.5%
33.7%
7.7%
6.7%
2.9%
0.6%
100.0%

Within the total of pension assets, 39.8% of this amount is accounted for by the retirement benefit
trust established in relation 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 and future allocation of pension plan assets, and the present and expected
future long-term rate of return on a variety of assets that makes up the pension assets.

ix) Underlying actuarial assumptions
Main underlying actuarial assumptions as of March 31, 2016 were as follows:
Discount rate..............................................................................................
Expected long-term rate of return on pension plan assets
Defined Benefit Plan...............................................................................
Retirement benefit trust..........................................................................

0.6%
3.0%
0.0%

(3) Defined Contribution Plan
The required contribution amount by the Company and its subsidiaries to the defined contribution planwas ¥279million.

56

Fukoku Mutual Life Insurance Company

III. Notes to Statements of Operations
1. Transactions with Unconsolidated Subsidiaries
The total amounts of revenues and expenses in connection with unconsolidated subsidiaries were ¥430
million and ¥2,879 million for the year ended March 31, 2016.

2. Policy Reserves for the Reinsurance Contracts
For the year ended March 31, 2016, reversal of reserve for outstanding claims for ceded reinsurance
considered in calculation of reversal of reserve for outstanding claims was ¥35 million and provision ofpolicy reserve for ceded reinsurance considered in calculation of provision for policy reserve was ¥0
million.

IV.Notes to Statement of Comprehensive Income
1. Other Comprehensive Income
The reclassification adjustments and tax effect amounts related to other comprehensive income for theyear ended March 31, 2016 were as follows:(Millions of yen)i) Net unrealized gains (losses) on available-for-sale securities, net of tax
Amount incurred during the period................................................................

¥(90,971 )Reclassification adjustments........................................................................

(40,566 )Before tax adjustments...............................................................................

(131,538 )Tax effects...................................................................................................

42,094

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

(89,444 )ii) Deferred valuation gains (losses) under hedge accounting, net of tax
Amount incurred during the period................................................................

¥ (0 )

Reclassification adjustments........................................................................

(0 )

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

(0 )Tax effects...................................................................................................

0

Deferred valuation gains (losses) under hedge accounting, net of tax.......

(0 )iii) Revaluation reserve for land, net of tax
Amount incurred during the period................................................................

¥―

Reclassification adjustments........................................................................

―

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

―Tax effects...................................................................................................

433

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

433iv) Foreign currency translation adjustments
Amount incurred during the period.................................................................

¥ (62 )

Reclassification adjustments.........................................................................

―

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

(62 )Tax effects...................................................................................................

―

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

(62 )

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Fukoku Mutual Life Insurance Company

v) Remeasurements of defined benefit plans, net of tax
Amount incurred during the period................................................................

¥ (11,093 )Reclassification adjustments........................................................................

845

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

(10,248 )Tax effects...................................................................................................

2,833

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

(7,414 )Total other comprehensive income............................................................

¥(96,487 )V. Notes to Statements of Cash Flows
1. Scope of Cash and Cash Equivalents
Cash and cash equivalents as of March 31, 2016 consist of "Cash," "Deposits in transfer account,""Current deposits," "Ordinary deposits," "Notice deposits," "Time deposits maturing within 3 months of thedate 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 of acquisition."

2. Reconciliations of Cash and Cash Equivalents
Reconciliations of cash and cash equivalents in the consolidated statements of cash flows to theconsolidated balance sheet accounts as of March 31, 2016 were as follows:(Millions of yen)

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

¥ 172,049

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

200,000

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

813

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

(300 )

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

(1,291 )Monetary claims bought maturing over 3 months of the date of acquisition…....

(813 )Cash and cash equivalents...................................................................................

¥ 370,458

3. Reclassification
Previously, foreign exchange gains and losses accompanying sales and redemption of securities andforeign exchange gains and losses accompanying settlements of derivatives were included in “Others”
within cash flows from investing activities. However, owing to an increase in materiality of these items inthe year ended March 31, 2016, these items are presented as part of “Proceeds from sales andredemption of securities” and “Proceeds from and payments for settlement of derivatives, net”
respectively.
In the year ended March 31, 2015, as components of “Others” within cash flows from investing
activities, foreign exchange gains accompanying sales and redemption of securities amounted to ¥4,761
million, and foreign exchange losses accompanying settlement of derivatives amounted to ¥60,409 million.

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Fukoku Mutual Life Insurance Company

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

As of March 31, 2015 As of March 31, 2016
Credits to bankrupt borrowers

199

223

Delinquent loans

844

773

Delinquent loans past three months or more－－

Restructured loans

370

－

1,414

997

[0.18%][0.14%]

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 ofguarantees is written-off directly from the borrower’s balance as the estimated uncollectible amounts.
The amounts written-off related to credits to bankrupt borrowers were ¥247million as of March 31, 2015.
and ¥247 million as of March 31, 2016.
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 intereston these loans is unlikely to be collected due to the significant delay in repayment of principal orinterest payment or for some other reasons.
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 whichinterest payments have been suspended and rescheduled to assist and support the borrowers in the
restructuring of their business.
4. Delinquent loans past three months or more are loans for which interest payment or repayment ofprincipal are delinquent for three months or more from the due date under the terms of the related loan
agreements, excluding those loans classified as credits to bankrupt borrowers and delinquent loans.
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 orother 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
R1
R5
R6
R8

R9

R2
R7

R3

R4

(Millions of yen)
As ofMarch 31, 2015

As ofMarch 31, 2016

1,441,649

1,417,685

Foundation funds and surplus

227,256

234,905

Reserve for price fluctuation of securities

55,17777,289Contingency reserve

144,417

152,554

－

－

1,403

1,251

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

558,124437,678

Net unrealized gains on real estate x 85%

99,173

105,577

Sum of unrecognized actuarial differences and unrecognized prior service cost

(4,217)(14,465)

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

199,957

238,473

Qualifying subordinated debt

118,959

141,935

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－－

Deductible items－－

41,39742,485

241,122

211,354

Total solvency margin(A)( ( R1  R5  R8  R9 ) 2  ( R 2  R3  R7 ) 2  R 4  R6
2

2

Catastrophe loss reserve
Allowance for possible loan losses

OthersTotal amount of risk

(B)

Insurance riskR

26,07425,164General insurance risk

R

－

－

Catastrophe risk

R

－

－

3rd sector insurance risk

R

9,689

9,690

Small amount and short-term insurance risk

R

－

－

Assumed investment yield riskR

36,23633,872

Minimum guarantee risk

R

0

0

Investment riskR

196,781

169,750

Business risk

R

5,375

4,769

1,195.7%

1,341.5%

Solvency margin ratio(A)(1/2) x (B)x 100

Notes: 1. Above figures are calculated based on Articles 86-2 and 88 of the Enforcement Regulation of the Insurance Business Law
Notes: 1. and Notification of the Financial Services Agency 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, 2015

Total solvency margin

(A)

As of
March 31, 2016

58,593

69,244

Common stock and others

35,22336,875Reserve for price fluctuation of securities

8,643

9,000

Contingency reserve

1,893

1,981

0

0

8,812

16,681

－

－

2,274

2,385

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 of solvency margin－－

Deductible items

－

－

1,745

2,319

18,984

20,455

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

OthersTotal amount of risk

( R1  R8 )  R2  R3  R7   R4
2

2

(B)

Insurance risk

R1

606

570

3rd sector insurance risk

R8

114

112

Assumed investment yield risk

R2

384

391

Minimum guarantee risk

R7

－

－

Investment risk

R3

18,19919,638Business risk

R4

386

414

617.2%

677.0%

Solvency margin ratio(A)(1/2) x (B)x 100

Note: 1. Above figures are calculated based on Articles 86 and 87 of the Enforcement Regulation of the Insurance
Note: 1. Business Law and Ministry of Finance No.50,1996.

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Fukoku Mutual Life Insurance Company