August 10, 2016

Financial Results for the Three Months Ended June 30, 2016
Fukoku Mutual Life Insurance Company (President: Yoshiteru Yoneyama) announces financial results
for the three months ended June 30, 2016.

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

P.1

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

P.3

3. Non-consolidated Balance Sheets･････････････････････････

P.6

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

P.7

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

P.9

6. Solvency Margin Ratio･････････････････････････

P.10

7. Status of Separate Account･････････････････････････

P.11

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

P.12

Fukoku Mutual Life Insurance Company

1. Business Highlights(1) Policies in Force, New Policies and Surrendered and Lapsed Policies(i) Policies in Force
As of March 31, 2016
Number of policies

As of June 30, 2016
Amount(Thousands)

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

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

Individual insurance

3,109

234,174

3,125

100.5

233,841

99.9

Individual annuities

715

27,833711

99.4

27,643

99.3

3,825

262,008

3,836

100.3

261,48499.8

Group insurance－

169,723－－

171,021100.8

Group annuities－

21,189－－21,526

101.6

Subtotal

Notes:
1. Policy amounts for individual annuities are equal to (a) the funds to be held at the time annuity payments are to commence 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
Three months ended
June 30, 2015

Number of policies

Net increase by
conversion

AmountAmountAmount(Thousands)(100 millions of yen)

93

Individual insurance

New business(100 millions of yen)

4,433(100 millions of yen)

4,047

385

8

311

315

(4)

102

4,744

4,363

381

Group insurance

－

106

106

－

Group annuities

－

30

30

－

Individual annuities
Subtotal

Total
Three months ended
June 30, 2016

Number of policies(Thousands)

Individual insurance

102

AmountChanges(%, YoY)(100 millionsof yen)110.4

Net increase by
conversion

New businessAmountChanges(%, YoY)

4,103(100 millions of
yen)

92.5

AmountChanges(%, YoY)

3,809

94.1

(100 millionsof yen)293

Changes(%, YoY)

76.1

5

58.3

202

65.0

206

65.3

(4)

－

108

105.9

4,305

90.7

4,015

92.0

289

76.0

Group insurance

－

－

21

20.6

21

20.6

－

－

Group annuities

－

－

14

47.0

14

47.0

－

－

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)
Three months ended
June 30, 2015

Three months ended
June 30, 2016
Changes(%, YoY)

Amount of surrender and lapse(100 millions of yen)

3,446

3,245

94.2

Surrender and lapse ratio (%)

1.30

1.24

(0.06)

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 is 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, 2016

As of June 30, 2016
Changes (%, Pre-FYE)

Individual insurance

2,748

2,753

100.2

Individual annuities

1,322

1,321

99.9

Total

4,071

4,075

100.1

1,075

1,080

100.5

Medical coverage and living benefits(ii) New Policies(100 millions of yen except percentage)Three months ended June 30, 2015

Three months ended June 30, 2016
Changes (%, Pre-FYE)

Individual insurance

52

53

100.7

Individual annuities

10

6

59.6

Total

63

59

93.6

18

20

113.8

Medical coverage and living benefits

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)Three months ended June 30, 2015

Three Months ended June 30, 2016
Changes (%, Pre-FYE)

Premium and other income

1,731

1,980

114.4

604

564

93.4

2,071

1,458

70.4

Investment expenses

133

339

253.9

Ordinary profits

361

160

44.4

Investment income
Claims and other payments(4) Total Assets(100 millions of yen except percentage)

As of March 31, 2016

As of June 30, 2016
Changes(%, Pre-FYE)

Total assets

64,8982

64,495

99.4

Fukoku Mutual Life Insurance Company

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

As of March 31, 2016

As of June 30, 2016

AmountAmountPercentage

Percentage

Cash, deposits, call loans

312,405

4.9

423,131

6.6

Monetary claims bought

813

0.0

799

0.0

87,793

1.4

28,8480.5

5,017,719

78.3

4,923,325

77.2

Domestic bonds

2,659,186

41.5

2,652,312

41.6

Domestic stocks

570,3868.9

530,034

8.3

Foreign securities

1,700,012

26.5

1,637,026

25.7

Foreign bonds

1,505,637

23.5

1,448,447

22.7

194,374

3.0

188,578

3.0

88,134

1.4

103,952

1.6

693,68010.8

663,966

10.4

Policy loans

61,4371.0

60,7971.0

Ordinary loans

632,2429.9

603,169

9.5

Real estate

212,879

3.3

213,399

3.3

Others87,3091.4

127,935

2.0

Allowance for possible loan losses(1,850)( 0.0)(1,780)(0.0)

6,410,750

100.0

6,379,624

100.0

1,875,134

29.2

1,785,014

28.0

Money held in trust
Securities

Foreign stocks and other securities
Other securities
Loans

Total
Foreign currency denominated assets

3

Fukoku Mutual Life Insurance Company

(2) Fair Value Information on Securities (with fair value, other than trading securities)(Millions of yen)

As of March 31, 2016

As of June 30, 2016

Gains/losses

Book value

Fair value

768,786

936,313

167,526

167,526

Domestic bonds

740,989

906,313

165,323

Foreign bonds

27,79730,000

Monetary claims bought－

Negotiable certificate of deposits
OthersGains/losses

Book value

Fair value－

765,364

956,162

190,797

190,797－

165,323－

739,875

928,418

188,543

188,543

－

2,202

2,202

－

25,48927,743

2,254

2,254

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

1,074,535

1,280,612

206,077

206,077－

1,054,541

1,306,362

251,821251,821－

Domestic bonds

1,044,436

1,250,268

205,832

205,832－

1,024,441

1,276,056

251,614251,614－

Foreign bonds

30,09830,343

244

244

－

30,09930,306

206

206

－

1,433

1,140

(293)

1

294

1,557

1,118

(439)

－

439
43,133Gains
Held-to-maturity debt securities

Policy-reserve-matching bonds

Investments in subsidiaries and affiliates
Available-for-sale securities

Losses

Gains

Losses2,419,858

2,889,888

470,029487,293

17,2632,448,478

2,845,320

396,842439,975

Domestic bonds

735,758

822,51386,75487,055300

744,066

841,465

97,39898,215

817

Domestic stocks

291,475

528,697

237,221244,234

7,012

298,417

488,410

189,993205,749

15,756

Foreign securities

1,326,814

1,458,914

132,099

139,958

7,858

1,319,800

1,419,716

99,916

121,429

21,513Foreign bonds

1,157,841

1,265,973

108,131

111,881

3,750

1,143,378

1,232,695

89,316102,183

12,866

168,972

192,941

23,96828,077

4,108

176,421

187,021

10,60019,2468,646

65,80979,763

13,953

16,044

2,091

86,193

95,727

9,533

14,580

5,046

Money held in trust

－

－

－

－

－

－

－

－

－

－

Monetary claims bought

－

－

－

－

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

－

－

－

－

Others

－

－

－

－

－

－

－

－

－

－

4,264,614

5,107,954

843,340

860,898

17,5584,269,941

5,108,963

839,021882,594

43,572

Domestic bonds

2,521,184

2,979,095

457,910458,211300

2,508,384

3,045,939

537,555

538,373

817

Domestic stocks

291,475

528,697

237,221244,234

7,012

298,417

488,410

189,993205,749

15,756

Foreign securities

1,386,144

1,520,398

134,254

142,407

8,153

1,376,946

1,478,884

101,938

123,891

21,952Foreign bonds

1,215,738

1,326,317

110,578

114,328

3,750

1,198,967

1,290,745

91,777

104,644

12,866

170,406

194,081

23,67528,078

4,403

177,978

188,139

10,16019,246

9,085

65,80979,763

13,953

16,044

2,091

86,193

95,727

9,533

14,580

5,046

Money held in trust

－

－

－

－

－

－

－

－

－

－

Monetary claims bought

－

－

－

－

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

－

－

－

－

Others

－

－

－

－

－

－

－

－

－

－

Foreign stocks and other securities
Other securities

Total

Foreign stocks and other securities
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, 2016

As of June 30, 2016

Held-to-maturity debt securities－－

Unlisted foreign bonds－－

Others－－－－Investments in subsidiaries and affiliates

35,56035,495

Available-for-sale securities

14,49914,352

6,127

6,127

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

Unlisted foreign bonds

－

－

8,371

8,224

50,06049,848

Policy-reserve-matching bonds

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

OthersTotal

4

Fukoku Mutual Life Insurance Company

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

As of March 31, 2016
Carrying
value onbalancesheetsMoney held in trust

As of June 30, 2016
Carrying
value onbalancesheetsGains/losses
Fair value
Gains87,79387,793－Losses－－Gains/losses
Fair value
Gains28,848－28,848Losses－－* Money held in trust for trading purpose(Millions of yen)

As of March 31, 2016
Net valuation gains/losses
included in the statementsof operations

Carrying value onbalance sheets
Money held in trust
for trading purpose

As of June 30, 2016

86,793

Net valuation gains/losses
included in the statementsof operations

Carrying value onbalance sheets(0)27,848(134)* Money held in trust classified as held-to-maturity, policy-reserve-matching and available-for-sale(Millions of yen)

As of March 31, 2016
Book value

As of June 30, 2016

Gains/losses

Fair value

Gains

Book value

Gains/losses

Fair value

Losses

Gains

LossesMoney held in trust
for held-to-maturity

－

－

－

－

－

－

－

－

－

－

Money held in trust forpolicy-reserve-matching

－

－

－

－

－

－

－

－

－

－

Money held in trust
for available-for-sale

－

－

－

－

－

－

－

－

－

－

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

As of March 31, 2016
Carrying valueon the balance sheets
125,312Fair value
233,848

As of June 30, 2016
Carrying valueon the balance sheets

Gains / losses
108,535

125,294

Fair value

Gains/ losses

233,774

108,479

Notes:
1. As of June 30, 2016, fair value is based on the appraisal value by the real-estate appraiser, the appraisal value for property tax as of January 1, 2016 and the road rate as of January 1, 2015.
2. As of March 31, 2016, fair value is based on the appraisal value by the real-estate appraiser, the appraisal value for property tax as of January 1, 2016 and the road rate as of January 1, 2015.

5

Fukoku Mutual Life Insurance Company

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

As of March 31, 2016

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

114,182
200,000
813
87,793
5,091,762[1,881,618][142,336][663,209][594,312][1,722,110]
693,680
61,437632,242
218,565
16,093
144
68,631(1,850)6,489,815
As of March 31, 2016

Liabilities:
Policy reserves
Reserve for outstanding claims
Policy reserve
Reserve for dividends to policyholders
Reinsurance payables
Subordinated bonds
Other liabilities
Corporate income tax payable
Asset retirement obligations
Rest of other liabilities
Reserve for employees' retirement benefits
Reserve for price fluctuation of securities
Deferred tax liabilities
Deferred tax liabilities for revaluation reserve for land
Total liabilities
Net assets:
Foundation funds
Accumulated foundation funds redeemed
Reserve for revaluation
Surplus
Legal reserve for future losses
Other surplus
Reserve for redemption of foundation funds
Reserve for dividend allowances
Accumulated fund for price fluctuation
Reserve for advanced depreciation of real estate for tax purpose
Reserve for special account for advanced depreciation of real estate
Other reserves
Unappropriated surplus
Total foundation funds, surplus and others
Net unrealized gains (losses) on available-for-sale securities, net of tax
Revaluation reserve for land, net of tax
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

6

As of June 30, 2016

224,769
200,000
799
28,8484,990,568[1,874,752][148,937][657,802][549,483][1,655,612]
663,966
60,797603,169
218,943
17,21738
106,204(1,780)6,449,573
As of June 30, 2016

5,555,450
20,7195,484,362
50,368133
141,935
43,653891
3,351
39,41026,083
68,28833,05014,274
5,882,868

5,612,569
17,735
5,521,651
73,181
127
141,935
44,795
4,775
3,367
36,65225,871
69,041
8,824
14,2695,917,433

30,00086,000112
148,284
2,742
145,542
18,00020,00041,000266

30,00086,000112
126,185
2,849
123,336
24,00020,00041,000257
100
767
37,211
242,298
285,726
4,115
289,842
532,140
6,449,573－
767
65,509264,397
338,4214,128
342,549
606,947
6,489,815

Fukoku Mutual Life Insurance Company

4. Non-consolidated Statements of Operations(Millions of yen)Three months ended
June 30, 2015

Three months ended
June 30, 2016

Ordinary revenues:
Premium and other income

173,104

198,010[Premium income][173,024][197,971]

Investment income[Interest, dividends and other income]

60,47656,497[32,050][28,792][Gains from money held in trust, net]

[242]

[－]

[Gains from trading securities, net]

[8,161][Gains on sales of securities][18,067]

[－]
[201]

[Gains from derivative instruments, net][－]
[1,914][27,422]

49,221[－]
4,869[Reversal of reserve for outstanding claims][2,415][2,983][Reversal of policy reserve][44,708][－]

282,801

259,376[Gains from separate accounts, net]
Other ordinary revenues

Total ordinary revenues
Ordinary expenses:

207,143

145,827[Claims][63,490][44,134][Annuities][48,433][44,642][Benefits][30,632][27,775][Surrenders][52,505][19,163][Other payments][11,977][9,999]1237,300－12

37,288Investment expenses

13,36733,944[Interest expenses][1,118][955]

Claims and other payments

Provision for policy reserve and others
Provision for policy reserve
Provision for interest on reserve for dividends to policyholders

11[Losses on money held in trust, net][－]

[2,178][Losses from trading securities, net]

[－]
[842]

[20,545][Losses on sales of securities][－][8,501][Losses on valuation of securities][Losses from derivative instruments, net][－]
20,954[Losses on separate accounts, net]
Operating expenses

[－]
[138]
[－]
[2,182]
21,281Other ordinary expenses

5,196

4,979

Total ordinary expenses

246,673

243,333

Ordinary profits

36,127

16,043Extraordinary gains:
Gains on disposal of fixed assets

1,356

0

Other extraordinary gains

－
1,356

42

Total extraordinary gains

43

Extraordinary losses:
Losses on disposal of fixed assets

114

8

Impairment losses

128

18

Provision for reserve for price fluctuation of securities

699

753

Total extraordinary losses

941

779

Surplus before income taxes

36,542

15,306

8,339

5,603

(418)

(3,738)

Income taxes：
Current
Deferred
Total income taxes
Net surplus for the period

7

7,920

1,865

28,622

13,440

Fukoku Mutual Life Insurance Company

Notes to the Non-consolidated Financial Statements
I. Presentation of the Non-consolidated Financial Statements
1. Basis of Presentation
The accompanying non-consolidated financial statements have been prepared from the accounts maintained by
Fukoku Mutual Life Insurance Company (the “Company”) in accordance with the provisions set forth in the
Insurance Business 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 incountries 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 shown herein do notnecessarily agree with the sum of the individual amounts.

II. Notes to Balance Sheets
1. Accounting Change and Corrections of Past Errors
In line with a revision to the Corporation Tax Act, the Company adopted the “Practical Solution on a Change inDepreciation Method Due to Tax Reform 2016” (PITF No. 32, June 17, 2016) from the first quarter under review.
Accordingly, the method of depreciation was changed from the declining-balance method to the straight-line method
for facilities attached to buildings and structures acquired on or after April 1, 2016.
As a result, both ordinary profits and the surplus before income taxes increased by ¥2 million.

2. Accounting Procedures Specific to Quarterly Financial Statements
As the proposal for appropriation of unappropriated surplus for the fiscal year ended March 31, 2016 was approvedby the Board of Representative Member of Policyholders on July 5, 2016, it is included in the non-consolidatedbalance sheet as of June 30, 2016.

3. Securities Lent under Lending Agreements
The amount of securities lent under lending agreements was ¥13,056 million as of June 30, 2016.

4. Reserve for Dividends to Policyholders
Changes in reserve for dividends to policyholders for the three months ended June 30, 2016 were as follows:(Millions of yen)

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

¥ 50,368
35,236(12,435)
11¥ 73,181

5. Issue of Subordinated Bonds
At a Board of Directors meeting on July 27, 2016, a resolution was passed to issue subordinated bonds of up to¥50,000 million during the fiscal year ending March 31, 2017.

6. Deferred Tax Assets
The “Implementation Guidance on Recoverability of Deferred Tax Assets” (ASBJ Guidance No. 26, March 28,2016) has been applied from the three months under review.

8

Fukoku Mutual Life Insurance Company

5. Breakdown of Ordinary Profits (Fundamental Profit)(Millions of yen)Three months ended
June 30, 2015

A

Fundamental profit

Three months ended
June 30, 2016

21,697

18,42923,911

27,623

Gains from money held in trust, net

223－

Gains from trading securities, net

5,620

－

Gains on sales of securities

18,067

201

Gains from derivative instruments, net－

27,422Foreign exchange gains, net－－

Other capital gains－－

Capital gains

Capital losses

9,655

30,016

Losses from money held in trust, net

－

2,192

Losses from trading securities, net－

22,078

842

－

－

138

Losses on sales of securities
Losses on valuation of securities

8,501

－

311

5,606

－

－

B

14,256(2,392)A+B

35,953

16,037176

6

Losses from derivative instruments, net
Foreign exchange losses, net
Other capital losses
Net capital gains (losses)
Fundamental profit plus net capital gains (losses)
Non-recurring gains

－

－

176

2

Reversal for specific allowance for possible loan losses－

4

Others－－Reinsurance income
Reversal of contingency reserve

1－

Reinsurance premiums－－

Provision for contingency reserve－－

Provision for specific allowance for possible loan losses

1－

Allowance for specified overseas loans－－

Write-off of loans－－

Non-recurring losses

－

－

C

174

6

A+B+C

36,127

16,043

Others
Non-recurring gains (losses)
Ordinary profits

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):¥18 million in respect of the three months ended June 30, 2015 and ¥13 million in respect of the three months
ended June 30, 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):¥2,541 million in respect of the three months ended June 30, 2015 and ¥1,533 million in respect of
the three months ended June 30, 2016.

9

Fukoku Mutual Life Insurance Company

6. Solvency Margin Ratio(Millions of yen)

As ofMarch 31, 2016

As ofJune 30, 2016

1,374,588

1,318,130

Foundation funds and surplus

226,683

231,333

Reserve for price fluctuation of securities

68,28869,041

Contingency reserve

150,573

150,571

Total solvency margin(A)

Allowance for possible loan losses

1,251

1,185

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

423,026

357,157

Net unrealized gains on real estate × 85%

105,577

106,057

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

236,087

237,751

Qualifying subordinated debt

141,935

141,935－－

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

Others40,16542,097

207,983

205,287

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

24,61624,4533rd sector insurance risk

R8

9,577

9,620

Assumed investment yield risk

R2

33,48133,349Minimum guarantee risk

R7

0

0

Investment risk

R3

166,913

164,387

Business risk

R4

4,691

4,636

1,321.8%

1,284.1%

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

Notes:
1. The figures above are calculated based on Articles 86 and 87 of the Enforcement Regulation of 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.

10

Fukoku Mutual Life Insurance Company

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

As of March 31, 2016

As of June 30, 2016

AmountAmountIndividual variable insurance－－

Individual variable annuities

67

48

Group annuities

78,997

69,901

Total

79,06569,949(2) Policies in Force(i) Individual Variable Insurance
The Company has not sold the individual variable insurance.

(ii) Individual Variable Annuities(Millions of yen except number of policies)

As of March 31, 2016

As of June 30, 2016

Number ofpolicies

AmountNumber ofpolicies

AmountIndividual variable annuities

23

64

19

44

Total

23

64

19

44

11

Fukoku Mutual Life Insurance Company

8. Status of the Company, Subsidiaries and Affiliates(1) Selected Financial Data
(100 millions of yen)Three months ended
June 30, 2015

Three months ended
June 30, 2016

Ordinary revenues

3,001

3,131

Ordinary profits

367

173

Net surplus attributable to the parent company

287

139

Comprehensive income

279

(356)

(100 millions of yen)

As ofMarch 31, 2016

Total assets
Solvency margin ratio

As ofJune 30, 2016

83,306

83,331

1,341.5%

1,305.7%(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

12

Fukoku Mutual Life Insurance Company

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

As of June 30, 2016

Cash and deposits

172,049

308,450

Call loans

200,000

200,000

Assets:Monetary claims bought
Money held in trust
Securities

813

799

87,793

28,8486,859,234

6,774,865

Loans

697,056

667,296

Tangible fixed assets

218,974

219,356

Intangible fixed assets

20,941

21,928Agency receivables
Reinsurance receivables
Other assets
Deferred tax assets
Allowance for possible loan losses
Total assets

2

2

144

53

75,308113,220137

124(1,851)(1,781)8,330,606

8,333,163

As of March 31, 2016

As of June 30, 2016

7,361,627

7,455,098

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

23,003

20,2207,287,604

7,361,224

50,36873,181

650

471

480

259

Reinsurance payables

146

136

Subordinated bonds

141,935

141,935

Other liabilities

45,94049,515Net defined benefit liabilities

40,64939,843

Reserve for price fluctuation of securities

77,28978,132

Deferred tax liabilities

30,837

7,847

Deferred tax liabilities for revaluation reserve for land

14,274

14,2697,713,180

7,787,036

Foundation funds

30,00030,000

Accumulated foundation funds redeemed

86,00086,000Total liabilities
Net assets:

Reserve for revaluation

112

112

Consolidated surplus

151,251

129,710

Total foundation funds, surplus and others

267,363

245,822

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

349,884

299,559

4,128

4,115

Revaluation reserve for land, net of tax
Foreign currency translation adjustments

(115)

(312)

Accumulated remeasurements of defined benefit plans(10,414)(10,013)

Total accumulated other comprehensive income

343,482

293,350

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

13

6,578

6,954

617,425

546,127

8,330,606

8,333,163

Fukoku Mutual Life Insurance Company

(4) Consolidated Statements of Operations and Comprehensive Income[Consolidated Statements of Operations](Millions of yen)Three months ended
June 30, 2015

Three months ended
June 30, 2016

Ordinary revenues:

218,228

Premium and other income

245,223

Investment income

66,25362,985[Interest, dividends and other income][37,805][34,609][Gains from money held in trust, net]

[242]

[－]

[Gains from trading securities, net]

[8,161][－][Gains on sales of securities][18,092]

[874]

[－]

[27,422][Gains from derivative instruments, net]
[Gains from separate accounts, net]

[1,914][－]

Other ordinary revenues

15,694

4,926[Reversal of reserve for outstanding claims][1,981][2,783][Reversal of policy reserve][11,401][－]

Total ordinary revenues

300,176

313,135

Claims and other payments

220,708

158,802[Claims][64,524][45,200][Annuities][48,667][44,920][Benefits][32,921][30,710][Surrenders][62,468][27,774][Other payments][11,993][10,054]

Provision for policy reserve and others

12

73,631

Provision for policy reserve－

73,619Provision for interest on reserve for dividends to policyholders

12

11

Provision for interest on reserve for dividends to policyholders (subsidiary)00Investment expenses

13,05333,651[Interest expenses][1,121]

[957]

[－]

[2,178][Losses from trading securities, net][－]

[20,545][Losess on sales of securities]

[842]

[－]

[Losses on valuation of securities]

[－]

[138]

Ordinary expenses:[Losses on money held in trust, net]

[Losses from derivative instruments, net]
[Losses on separate accounts, net]

[8,501][－][－][2,182]
24,042

Operating expenses

23,805

Other ordinary expenses

5,857

5,629

Total ordinary expenses

263,436

295,757

Ordinary profits

36,73917,378Extraordinary gains:

1,356

0

Other extraordinary gains－

42

Total extraordinary gains

1,356

43

Gains on disposal of fixed assets

Extraordinary losses:
Losses on disposal of fixed assets

114

9

Impairment losses

128

18

Provision for reserve for price fluctuation of securities
Total extraordinary losses
Provision for reserve for dividends to policyholders (subsidiary)
Surplus before income taxes

784

843

1,026

871

120

109

36,94816,441

Income taxes:
Current

8,510

6,008

Deferred(371)(3,695)

Total income taxes

8,139

2,312

Net surplus

28,80914,128Net surplus attributable to non-controlling interests
Net surplus attributable to the parent company

14

55

130

28,754

13,998

Fukoku Mutual Life Insurance Company

(4) Consolidated Statements of Operations and Comprehensive Income (Continued)[Consolidated Statement of Comprehensive Income](Millions of yen)Three months ended
June 30, 2015

Three months ended
June 30, 2016

28,80914,128Other comprehensive income(887)(49,788)

Net unrealized gains (losses) on available-for-sale securities, net of tax(966)(49,993)

Deferred valuation gains (losses) under hedge accounting, net of tax(0)－Foreign currency translation adjustments

(71)

(196)

Remeasurements of defined benefit plan, net of tax

150

401

Comprehensive income

27,921(35,659)

Comprehensive income attributable to the parent company

27,936(36,121)

(14)

461

Net surplus

Comprehensive income attributable to non-controlling interests

15

Fukoku Mutual Life Insurance Company

Notes to the Consolidated Financial Statements
I. Presentation of the Consolidated Financial Statements
1. Basis of Presentation
The accompanying consolidated financial statements have been prepared from the accounts maintained by Fukoku
Mutual Life Insurance Company (the “Company”) and its consolidated subsidiaries in accordance with 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 consolidated financial statements include information which is not required underaccounting principles generally accepted in Japan but is presented herein as additional information.
Amounts of less than one million yen have been rounded down. As a result, total in yen shown herein do notnecessarily agree with the sum of the individual amounts.

II. Notes to Balance Sheets
1. Accounting Change and Corrections of Past Errors
In line with a revision to the Corporation Tax Act, the Company adopted the “Practical Solution on a Change inDepreciation Method Due to Tax Reform 2016” (PITF No. 32, June 17, 2016) from the first quarter under review.
Accordingly, the method of depreciation was changed from the declining-balance method to the straight-line method
for facilities attached to buildings and structures acquired on or after April 1, 2016.
As a result, both ordinary profits and the surplus before income taxes increased by ¥2 million.

2. Accounting Procedures Specific to Quarterly Financial Statements
As the proposal for appropriation of unappropriated surplus for the fiscal year ended March 31, 2016 was approvedby the Board of Representative Member of Policyholders on July 5, 2016, it is included in the consolidated balance
sheet as of June 30, 2016.

3. Securities Lent under Lending Agreements
The amount of securities lent under lending agreements was ¥13,056 million as of June 30, 2016.

4. Reserve for Dividends to Policyholders
Changes in reserve for dividends to policyholders for the three months ended June 30, 2016 were as follows:(Millions of yen)

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

¥ 50,368
35,236(12,435)
11¥ 73,181

5. Reserve for Dividends to Policyholders (Fukokushinrai Life Insurance Co., Ltd.)
Changes in reserve for dividends to policyholders for the three months ended June 30, 2016 were as follows:(Millions of yen)

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

¥ 650

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

(288)

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

0

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

109

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

¥ 471

16

Fukoku Mutual Life Insurance Company

6. Issue of Subordinated Bonds
At a Board of Directors meeting on July 27, 2016, a resolution was passed to issue subordinated bonds of up to¥50,000 million during the fiscal year ending March 31, 2017.

7. Deferred Tax Assets
The “Implementation Guidance on Recoverability of Deferred Tax Assets” (ASBJ Guidance No. 26, March 28,2016) has been applied from the three months under review.

III. Notes to Statements of Operations
1. Depreciation and Amortization of Goodwill
For the three months ended June 30, 2016, the total amount of depreciation and depreciation of real estate for rent
and other assets was ¥2,923 million and the amount of amortization of goodwill was ¥190 million.

17

Fukoku Mutual Life Insurance Company

R1
R5

R6
R8
R9

R2

R7
R3

R4

(5) Status of Insurance Claims Paying Ability of the Company and Insurance Subsidiaries(Millions of yen)
As ofMarch 31, 2016

Total solvency margin

(A)

As of
June 30, 2016

1,417,685

1,366,409

Foundation funds and surplus

234,905240,669

Reserve for price fluctuation of securities

77,28978,132

Contingency reserve

152,554

152,586

－

－

1,251

1,185

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

437,678

374,759

Net unrealized gains on real estate × 85%

105,577

106,057

Sum of unrecognized actuarial differences and unrecognized prior service cost

(14,465)(13,907)

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

238,473240,173

Qualifying subordinated debt

141,935

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－－

42,48544,815211,354

209,287

Catastrophe loss reserve
Allowance for possible loan losses

Others( ( R1  R5  R8  R9 ) 2  ( R 2  R3  R7 ) 2  R 4  R6
2

Total amount of risk

2

(B)

Insurance risk

R1

25,16425,005General insurance risk

R5

－

－

Catastrophe risk

R6

－

－

3rd sector insurance risk

R8

9,690

9,731

Small amount and short-term insurance risk

R9

－

－

Assumed investment yield risk

R2

33,872

33,743

Minimum guarantee risk

R7

0

0

Investment risk

R3

169,750

167,846

Business risk

R4

4,769

4,726

1,341.5%

1,305.7%

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

18

Fukoku Mutual Life Insurance Company