May 24, 2019

Financial Results for the Fiscal Year Ended March 31, 2019
Fukoku Mutual Life Insurance Company (President: Yoshiteru Yoneyama) announces financial
results for the fiscal year ended March 31, 2019.

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

P. 1

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

P. 3

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

P. 11

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

P. 12…………………………..…..

P. 23

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

P. 24

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

P. 26………………………………

P. 27……………………………………………………..……….

P. 28

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

P. 29

11. Status of Separate Account ……………………….………………..………………..

P. 30

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

P. 37

5. Breakdown of Ordinary Profits (Fundamental Profit)

8. Disclosed Claims Based on Categories of Obligors
9. Risk-monitored Loans

Attached: Supplementary Materials for the fiscal year ended March 31, 2019

Fukoku Mutual Life Insurance Company

Financial Summary for the Fiscal Year Ended March 31, 2019
1. Business Highlights(1) Policies in Force, New Policies and Surrendered and Lapsed Policies(i) Policies in Force
As of March 31, 2018
Number of policies

As of March 31, 2019

AmountNumber of policies

Amount(Thousands)

Changes(%, Pre-FYE)(100 millions ofyen)

Changes(%, Pre-FYE)(Thousands)

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

Individual insurance

3,180

100.3

227,653

98.3

3,179

100.0

226,080

99.3

Individual annuities

687

95.6

26,684

95.6

657

95.7

25,523

95.6

3,868

99.4

254,338

98.0

3,837

99.2

251,603

98.9

Group insurance––

170,732

99.5

–

–

173,064101.4

Group annuities––

21,803

101.1

–

–

21,890100.4

Subtotal

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

(ii) New Policies
Total
Year ended
March 31, 2018

Net increase by
conversion

New business

Number of policies

AmountAmountAmount(Thousands)

Changes(%, Pre-FYE)(100 millions ofyen)

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

Individual insurance

363

89.6

13,814

88.5

13,216

90.1

597

64.1

Individual annuities

7

17.5

211

13.3

224

14.0

(13)

–

370

83.0

14,025

81.6

13,440

82.6

584

63.9

Group insurance

–

–

343

44.3

343

44.3

–

–

Group annuities

–

–

158

979.1

158

979.1

–

–

Subtotal

Total
Year ended
March 31, 2019

Number of policies(Thousands)

AmountChanges(%, YoY)

Net increase by
conversion

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

Individual insurance

351

96.8

15,445111.8

13,293

100.6

2,151

359.8

Individual annuities

7

102.7

215

101.9

228

101.7

(12)

–

358

96.9

15,660111.7

13,521

100.6

2,138

365.7

Group insurance

–

–

566

164.9

566

164.9

–

–

Group annuities

–

–

0

0.4

0

0.4

–

–

Subtotal

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

(iii) Surrendered and Lapsed Policies (Individual Insurance and Individual Annuities)
Year ended
March 31, 2018Year ended
March 31, 2019

Changes(%, YoY)

Changes(%, YoY)

Amount of surrender andlapse (100 millions of yen)

12,69796.70

12,445

98.00

Surrender and lapse ratio (%)

4.89(0.12)

4.89

0.00

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

1

Fukoku Mutual Life Insurance Company

(2) Annualized Premiums(i) Policies in Force(100 millions of yen, %)As of March 31, 2018

As of March 31, 2019

Changes(%, Pre-FYE)

Changes(%, Pre-FYE)

Individual insurance

2,747

98.8

2,724

99.2

Individual annuities

1,296

96.5

1,240

95.7

Total

4,043

98.1

3,964

98.0

1,107

101.4

1,120

101.2

Medical coverage and living benefits(ii) New Policies(100 millions of yen, %)Year ended March 31, 2018Year ended March 31, 2019

Changes(%, Pre-FYE)

Changes(%, Pre-FYE)

Individual insurance

148

69.9

146

98.5

Individual annuities

6

12.2

6

100.1

154

58.8

152

98.6

77

99.2

74

96.6

Total
Medical coverage and living benefits

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

(3) Selected Items of Statements of Operations(100 millions of yen, %)Year ended March 31, 2018Year ended March 31, 2019

Changes(%, Pre-FYE)

Changes(%, Pre-FYE)

Premium and other income

5,672

98.7

5,256

92.7

Investment income

1,736

108.4

1,834

105.7

Claims and other payments

5,011

102.5

4,679

93.4

Investment expenses

396

88.9

485

122.6

Ordinary profits

564

104.4

533

94.4

(4) Statements of Surplus(100 millions of yen, %)Year ended March 31, 2018Year ended March 31, 2019

Changes(%, Pre-FYE)

Changes(%, Pre-FYE)

Unappropriated surplus

646

106.7

606

93.9

Reserve for dividends to policyholders

386

111.7

346

89.8

Net surplus

22

100.5

22

99.5

Unappropriated surplus carried forward

237

100.0

237

100.0

Note: Unappropriated surplus for the years ended March 31, 2018 and 2019 included reversal of voluntary
surplus reserve of ¥45 million and ¥1 million, respectively.

(5) Total Assets(100 millions of yen, %)As of March 31, 2018

As of March 31, 2019

Changes(%, Pre-FYE)

Total assets

66,266100.9

2Changes(%, Pre-FYE)

66,845

100.9

Fukoku Mutual Life Insurance Company

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

As of March 31, 2018

As of March 31, 2019

AmountAmount% of total

240,462

Monetary claims bought

3.7 %% of total

241,282

3.6 %

443

0.0

299

0.0

31,502

0.5

23,8500.4

5,380,830

82.2

5,499,523

83.2

Domestic bonds

2,818,618

43.1

2,782,013

42.1

Domestic stocks

740,828

11.3

672,528

10.2

Foreign securities

1,713,869

26.2

1,930,616

29.2

Foreign bonds

1,434,457

21.9

1,614,469

24.4

279,4124.3

316,147

4.8

107,514

1.6

114,3641.7

593,7349.1

561,138

8.5

Policy loans

57,181

0.9

56,332

0.9

Ordinary loans

536,5538.2

504,806

7.6

Real estate

213,674

3.3

212,555

3.2

Others85,664

1.3

76,438

1.2

Allowance for possible loan losses(2,049)(0.0)(2,096)(0.0)

6,544,262

100.0

6,612,991

100.0

1,998,720

30.5

2,220,198

33.6

Money held in trust
Securities

Foreign stocks and other securities
Other securities
Loans

Total
Foreign currency denominated assets

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

(2) Changes (Increase/Decrease) in Assets(Millions of yen)

Year ended March 31, 2018Year ended March 31, 2019

Cash, deposits, and call loans

4,187

820

Monetary claims bought

(309)

(144)

Money held in trust

1,714(7,652)

Securities

83,353

118,693

Domestic bonds(24,918)(36,605)

Domestic stocks

84,237(68,299)

Foreign securities

11,266

216,747

Foreign bonds(10,545)

180,012

Foreign stocks and other securities

21,812

36,735

12,7686,850(33,987)(32,596)

Policy loans(2,057)(849)

Ordinary loans(31,930)(31,746)

Real estate(752)(1,118)Others361(9,225)

Allowance for possible loan losses

(273)

(46)

54,29368,72931,851

221,477

Other securities
Loans

Total
Foreign currency denominated assets

3

Fukoku Mutual Life Insurance Company

(3) Investment Income(Millions of yen)

Year ended March 31, 2018

Interest, dividends and other income

Year ended March 31, 2019

149,219

151,1902235Interest and dividends on securities

124,480

126,834

Interest on loans

10,054

9,329

Income from real estate for rent

14,541

14,876

Other interest and dividends

120

114

Gains on money held in trust, net

1,769

–

–

3,276

15,28027,729Gains on sales of domestic bonds

4,903

1,424

Gains on sales of domestic stocks

1,798

24,393

Gains on sales of foreign securities

8,578

1,911

819

315

167,088

182,511

Interest on deposits

Gains on trading securities, net
Gains on sales of securities

Other investment income
Total(4) Investment Expenses(Millions of yen)

Year ended March 31, 2018

Interest expenses

Year ended March 31, 2019

4,216

3,864

–

371

Losses on trading securities, net

1,498

–

Losses on sales of securities

4,977

11,610Losses on sales of domestic bonds

391

1,582

Losses on sales of domestic stocks

1,095

2,563

Losses on sales of foreign securities

3,421

7,464

Other losses on sales of securities

68

–

0

39

0

39

225

5,875

16,013

13,396

Provision of allowance for possible loan losses

279

88

Depreciation of real estate for rent and other assets

4,271

4,165

Other investment expenses

8,158

9,186

Total

39,64048,599Losses on money held in trust, net

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

Year ended March 31, 2018

Net investment income

127,447

4

Year ended March 31, 2019

133,911

Fukoku Mutual Life Insurance Company

(6) Other Information on Investments(i) Investment Yield by Asset Categories( %)Year ended March 31, 2018Year ended March 31, 2019

Cash, deposits, and call loans

0.00

0.00

Monetary claims bought

1.35

1.37

Money held in trust

5.94(1.33)

Securities

2.34

2.48

Domestic bonds

1.69

1.58

Domestic stocks

3.59

9.51

Foreign securities

2.99

2.25

Foreign bonds

2.24

2.04

Foreign stocks and other securities

7.32

3.48

1.70

1.62

1.44

1.36

Real estate

2.41

2.16

Total

2.06

2.14

2.60

2.02

Loans
Ordinary loans

Overseas investments

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

(ii) Average Daily Balance(Millions of yen)

Year ended March 31, 2018Year ended March 31, 2019237,757

208,360

593

351

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

29,792

27,8794,892,260

5,018,992

Domestic bonds

2,793,416

2,739,522

Domestic stocks

376,094

377,021

Foreign securities

1,637,753

1,810,168

Foreign bonds

1,396,318

1,542,378

241,435

267,789

608,862575,375

550,366

518,700

215,590

215,266

6,182,430

6,252,153

2,014,749

2,182,145

Securities

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

5

Fukoku Mutual Life Insurance Company

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

As of March 31, 2018
As of March 31, 2019
Carrying value on the Net valuation gains/losses included Carrying value on the Net valuation gains/losses included
balance sheet
in the statement of operationsbalance sheet
in the statement of operations

Trading securities

179,768(7,938)

119,960(4,530)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, 2018
Book value Fair value

As of March 31, 2019

Gains/Losses
Gains

Gains/Losses

Book value Fair value

Losses

Gains

Losses

Held-to-maturity debt securities

758,872

897,574

138,702138,702–759,519

899,819

140,300

140,300–

Domestic bonds

738,632

876,835

138,203138,203–

738,491878,209

139,718

139,718–

Foreign bonds

20,23920,738

498

498

–

21,02821,610

581

581

–

Monetary claims bought

–

–

–

–

–

–

–

–

–

–

Negotiable certificate of deposits

–

–

–

–

–

–

–

–

–

–

Others

–

–

–

–

–

–

–

–

–

–

Policy-reserve-matching bonds

973,736

1,134,148

160,412

162,375

1,962

938,273

1,111,124

172,850

173,088

237

Domestic bonds

971,937

1,132,289

160,352

162,315

1,962

936,473

1,109,273

172,799

173,037

237

Foreign bonds

1,799

1,859

59

59

–

1,799

1,850

50

50

–

–

–

–

–

–

–

–

–

–

–

Available-for-sale securities

2,941,466

3,404,811

463,345531,772

68,427

3,134,467

3,606,817

472,350

502,516

30,166

Domestic bonds

1,023,447

1,080,932

57,48467,947

10,462

1,020,560

1,098,130

77,56979,6002,031

Domestic stocks

305,353

671,850

366,497

370,2783,780

299,394603,602304,208

312,902

8,693

Foreign securities

1,538,185

1,558,823

20,63773,35952,721

1,735,720

1,808,479

72,75890,53017,772Foreign bonds

Investments in subsidiaries and affiliates

1,290,483

1,290,268(214)

46,42546,6401,453,532

1,503,448

49,91562,862

12,946

Foreign stocks and other securities

247,701

268,554

20,852

26,933

6,081

282,188

305,030

22,842

27,667

4,825

Other securities

74,48093,20518,72520,187

1,462

78,791

96,605

17,813

19,483

1,669

Money held in trust

–

–

–

–

–

–

–

–

–

–

Monetary claims bought

–

–

–

–

–

–

–

–

–

–

Negotiable certificate of deposits

–

–

–

–

–

–

–

–

–

–

Others

–

–

–

–

–

–

–

–

–

–

Total

4,674,074

5,436,534

762,459

832,849

70,3904,832,260

5,617,761

785,501

815,904

30,403

Domestic bonds

2,734,016

3,090,057

356,040

368,465

12,425

2,695,525

3,085,613

390,087

392,356

2,268

Domestic stocks

305,353

671,850

366,497

370,2783,780

299,394603,602304,208

312,902

8,693

Foreign securities

1,560,224

1,581,421

21,19673,91852,721

1,758,549

1,831,939

73,39091,163

17,772Foreign bonds

1,312,522

1,312,866

343

46,984

46,6401,476,361

1,526,909

50,54863,495

12,946

Foreign stocks and other securities

247,701

268,554

20,852

26,933

6,081

282,188

305,030

22,842

27,667

4,825

Other securities

74,48093,20518,72520,187

1,462

78,791

96,605

17,813

19,483

1,669

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 andExchange Law.

• Book value of securities without fair value are as follows:(Millions of yen)Held-to-maturity debt securities
Unlisted foreign bonds
Others
Policy-reserve-matching bonds
Investments in subsidiaries and affiliates
Available-for-sale securities
Unlisted domestic stocks (except over-the-counter stocks)
Unlisted foreign stocks (except over-the-counter stocks)
Unlisted foreign bonds
OthersTotal

As of March 31, 2018––––
64,83728,021
5,697––
22,32392,858

As of March 31, 2019––––
64,78730,905
5,696––
25,20995,692

Note: In this table, domestic and overseas investment partnerships are included in “Others” within “Available-forsale securities.” However, unrealized gains on available-for-sale securities corresponding to these holdings
by domestic and overseas investment partnerships (¥1,285 million as of March 31, 2018 and ¥2,109 million
as of March 31, 2019) are included in their balance sheet carrying amounts.

6

Fukoku Mutual Life Insurance Company

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

As of March 31, 2018

Money held in trust

Carrying valueon the balance
sheet

Fair value

31,50231,502As of March 31, 2019

Gains/Losses
Gains

LossesCarrying valueon the balance
sheet

–

–

23,850–Gains/Losses
Fair value

23,850–Gains

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

As of March 31, 2018
Net valuation gains/losses
included in the statementsof operations

Carrying valueon the balance sheet

Money held in trust
for trading purpose

As of March 31, 201930,502

Net valuation gains/losses
included in the statementsof operations

Carrying valueon the balance sheet

022,8500• Money held in trust classified as held-to-maturity, policy-reserve-matching and available-for-sale(Millions of yen)

As of March 31, 2018

As of March 31, 2019

Gains/Losses
Book value

Gains/Losses

Fair value

Book value
Gains

LossesFair value
Gains

LossesMoney held in trust
for held-to-maturity

–

–

–

–

–

–

–

–

–

–

Money held in trust
for policy-reservematching

–

–

–

–

–

–

–

–

–

–

Money held in trust
for available-for-sale

–

–

–

–

–

–

–

–

–

–

7

Fukoku Mutual Life Insurance Company

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

As of March 31, 2018

Interest-related

Currency- related

Stock- related

Bond- related

Hedge accounting applied–

10,755(1,082)

–

–

9,672

(453)

17

–

(98)

–

(534)

(453)

10,772(1,082)

(98)

–

9,138

Interest- related Currency- related

Stock- related

Bond- related

Hedge accounting not applied
Total
As of March 31, 2019
Hedge accounting applied
Hedge accounting not applied
Total

Others

Total

OthersTotal–(3,230)–––(3,230)

(333)

226

–

–

–

(107)

(333)

(3,004)–––(3,338)

Note: Gains and losses from applying fair value hedge accounting (currency-related gains of ¥10,755 million, stock-related losses of¥1,082 million as of March 31, 2018, and currency-related losses of ¥3,230 million as of March 31, 2019) included in gains andlosses with hedge accounting applied, and gains and losses with hedge accounting not applied are reported in the statements ofoperations.

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

As of March 31, 2018
Notional amount/contract value
Fair valueOver 1 year

As of March 31, 2019
Notional amount/contract value
Fair valueOver 1 year

Gains
(Losses)

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

Receipt fixed, payment floating
[

[

–

– ]
–

Payment fixed, receipt floating

–
–

–

[

–

– ]
–

–

– ]

–

[

–
–

–

–

–

–

–

125

(333)

–

– ]

Bought–Receipt fixed, payment floating[
Payment fixed, receipt floating–– ]320,000

[

–
–

–

[

160,000– ]500,000

596 ]

142

Total

(453) [
(453)

–

459 ]

340,000(333)

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

8

Fukoku Mutual Life Insurance Company

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

As of March 31, 2018
Notional amount/contract value
Fair valueOver 1 year
Over-the-counter transactions
Currency forward contracts
Sold
U.S. dollar
Australian dollar
Euro
Canadian dollar
British Pound
BoughtCurrency options
Sold
Call
[
U.S. dollar[
Put[
BoughtCall[
Put[
U.S. dollar[
Australian dollar[
Canadian dollar[

Gains(Losses)

As of March 31, 2019
Notional amount/contract value
Fair valueOver 1 year

Gains
(Losses)

807,994
624,796
34,582
39,25869,29340,062

–
–
–
–
–
–

797,222615,445
33,83838,76869,02940,14010,772
9,351
744
489
264
(78)

946,124
563,427
137,386
124,056
64,27456,978

–
–
–
–
–
–

948,571568,162
137,455
122,763
63,771
56,417(2,447)(4,735)
(69)
1,292
503
560

–

–

–

–

–

–

–

–

–
–]
–
–]
–
–]

–
– [

97,211352 ]
97,211
352 ]
–
–]

–

–

67

284

67

284

–

–

–
–]
–
–]
–
–]
–
–]
–
–]

–

–
–]
171,400
1,081 ]
73,960352 ]
58,680444 ]
38,760
283 ]

–
–

–

238

(842)

68

(284)

123

(321)

46

(236)

–
–

– [

–
–

– [

–

– [

–
–

– [

–
–

– [

–
–

– [

–
–

Total

– [

–
–

–
–
–
–

10,772(3,004)

Notes:1. Forward exchange rates are used for exchange rates as of March 31, 2019.
Notes:2. Figures in [ ] are option premiums which are included in the balance sheet.
Notes:3. Regarding assets and liabilities which are denominated in foreign currencies but have fixed settlement in yen under currency
forward contracts and are reported in yen amounts in the balance sheet, those currency forward contracts are excluded from thetable above.

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

As of March 31, 2018
Notional amount/contract value
Fair valueOver 1 year
Over-the-counter transactions
Yen stock forward contract
Sold
Bought

Gains(Losses)

As of March 31, 2019
Notional amount/contract value
Fair valueOver 1 year

Gains
(Losses)

1,153

1,153

2,235

(1,082)

–

–

–

–

–

–

–

–
(1,082)

–

–

–

–
–

Total

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

As of March 31, 2018
Notional amount/contract value
Fair valueOver 1 year
Exchange-traded transactions
Foreign bond futures
Sold
Bought

Gains(Losses)

As of March 31, 2019
Notional amount/contract value
Fair valueOver 1 year

Gains
(Losses)

21,714–

21,812

(98)

–

–

–

–

–

–

–

–
(98)

–

–

–

–
–

Total

9

Fukoku Mutual Life Insurance Company

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

As of March 31, 2018
Carrying valueon the balance sheet

125,280

Fair value

253,938

As of March 31, 2019
Carrying valueon the balance sheet

Gains (Losses)

128,658

125,182

Fair value

270,621

Gains (Losses)

145,438

Notes: 1. As of March 31, 2018, fair value is based on the appraisal value by the real-estate appraiser, the appraisal value for property
tax as of January 1, 2018 and the road rate as of January 1, 2017.
Notes: 2. As of March 31, 2019, fair value is based on the appraisal value by the real-estate appraiser, the appraisal value for property
tax as of January 1, 2019 and the road rate as of January 1, 2018.

10

Fukoku Mutual Life Insurance Company

3. Non-consolidated Balance Sheets(Millions of yen)
As of March
31, 2018

As of March
31, 2019

Assets:Cash and deposits:

As of March
31, 2018

As of March
31, 2019

5,650,879

5,692,082

19,29520,322

5,578,187

5,613,583

53,39558,176

56

55

Liabilities:
66,26066,771

166

172

66,093

66,599

Policy reserve

176,000

176,000

Reserve for dividends to policyholders

443

299

Reinsurance payables

31,502

23,850Subordinated bonds

191,935

191,935

5,458,790

5,567,876

Other liabilities:

46,066

51,3772,030,971

2,030,510

Corporate income tax payable

2,445

4,422

Local government bonds

114,036

102,277

Accounts payable

2,381

2,561

Corporate bonds

702,661

670,914

Accrued expenses

10,834

10,802

Cash
Bank deposits
Call loans
Monetary claims bought
Money held in trust
Securities:
Government bonds

Stocks

Policy reserves:
Reserve for outstanding claims

768,000

696,181

Unearned income

369

381

Foreign securities

1,735,580

1,953,608

Deposits received

5,756

5,987

Other securities

107,540

114,384

Guarantee deposits received

14,087

14,041

593,734

561,138

Derivatives

3,052

7,641

Policy loans

57,181

56,332

Cash collateral received for financial
instruments

2,712

1,051

Ordinary loans

536,553504,806

Asset retirement obligations

3,088

2,892

Tangible fixed assets:

218,549

216,974

Suspense receipts

1,336

1,596

Land

125,278

125,180

Reserve for employees' retirement benefits

25,417

24,517

Buildings

86,34384,441

Reserve for price fluctuation

95,798111,279

Lease assets

1,565

1,241

Deferred tax liabilities

10,733

2,429

Construction in progress

2,052

2,933

Deferred tax liabilities for land revaluation

14,241

14,225

Other tangible fixed assets

3,309

3,177

Total liabilities

6,035,126

6,087,901

23,701

22,301

Net assets:

Software21,651

20,891

Foundation funds

10,00010,000

Other intangible fixed assets

2,049

1,410

Accumulated foundation funds redeemed

106,000

106,000

167

119

112

112

59,50851,341

135,538

133,682

Accounts receivable

7,268

5,558

Legal reserve for future losses

Prepaid expenses

2,055

1,987

Other surplus:

Accrued income

28,57029,898Deposits

2,281

2,195

98

Derivatives
Suspense payments

Loans:

Intangible fixed assets:

Reinsurance receivables
Other assets:

Differential account for futures trading

Surplus:

2,954

3,071

132,584

130,611

Reserve for redemption offoundation funds

6,000

8,000

Reserve for dividend allowances

20,00020,000－

Accumulated fund for price fluctuation

41,00041,00012,1904,302

Reserve for advanced depreciation ofreal estate for tax purpose

255

210

Other reserves

2,373

3,145

Lease investment assets

700

666

Rest of the other asset

3,968

3,585

(2,049)(2,096)

Allowance for possible loan losses

Reserve for revaluation

767

767

64,561

60,633

Total foundation funds, surplus and others

251,650

249,794

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

335,658

342,748

Revaluation reserve for land, net of tax

4,173

4,132

339,831

346,880

591,482596,674

6,626,609

6,684,576

Unappropriated surplus

Total valuation and translation adjustments
Total net assets
Total assets

6,626,609

6,684,576

11

Total liabilities and net assets

Fukoku Mutual Life Insurance Company

4. Non-consolidated Statements of Operations(Millions of yen)

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

12

Year ended March 31, 2018Year ended March 31, 2019567,210
566,924286
173,641
149,219
22
124,480
10,054
14,541120
1,769－
15,280
819
6,553
8,854
1,150
3,854
237
371
3,240
749,706

525,605
525,407
198
183,473
151,19035
126,834
9,329
14,876
114－
3,276
27,729
315
962
9,220
730
4,771
－
898
2,820
718,300

501,181
126,371
166,137
106,399
73,651
28,357264
44,655－44,643
12
39,640
4,216
－
1,498
4,977
0
225
16,013
279
4,271
8,158
88,477
19,282
5,488
6,216
6,677
899
693,237
56,469467,917
104,702160,900
111,533
63,78726,754239
36,434
1,026
35,395
12
48,5993,864
371－
11,61039
5,875
13,396
88
4,165
9,186
90,655
21,377
5,595
6,220
8,615
945
664,984
53,315

288
－
288

3
60
63

547
141
13,334
3
14,02542,731142
228
15,481－
15,851
37,527

11,374(9,511)
1,862
40,86811,752(11,059)693
36,834

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 BusinessAct 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 otherthan Japan.
In addition, the notes to the non-consolidated financial statements include information which is not required underaccounting principles generally accepted in Japan but is presented herein as additional information.
Amounts of less than one million yen have been rounded down. As a result, the totals do not add up.

II. Notes to the Non-consolidated Balance Sheets
1. (1) The valuation of securities, including bank deposits and monetary claims bought which are equivalent to securities, andsecurities managed as trust assets in money held in trust, is as follows:i. Trading securities are stated at fair market value. Costs of their sales are determined by the moving average method.
ii. Held-to-maturity debt securities are stated at amortized cost under the straight-line method, cost being determinedby the moving average method.

iii. Policy-reserve-matching bonds are stated at amortized cost under the straight-line method, cost being determinedby the moving average method in accordance with “Temporary Treatment of Accounting and Auditing Concerning
Policy-reserve-matching Bonds in the Insurance Industry” (Industry Audit Committee Report No.21 issued by theJapanese Institute of Certified Public Accountants on November 16, 2000).

iv. Investments in subsidiaries and affiliates are stated at cost, cost being determined by the moving average method.
v. Available-for-sale securities with fair market value are stated at fair market value based on the market prices at theend of the fiscal year. Costs of their sales are determined by the moving average method. Net unrealized gains orlosses on these available-for-sale securities, net of taxes, are recorded as a separate component of net assets.

vi. Available-for-sale securities whose market value are deemed extremely difficult to obtain are stated at cost, cost
being determined by the moving average method, except for public and corporate bonds including foreign bonds, ofwhich the difference between acquisition cost and face value is considered to be an adjustment of interest. Suchbonds are stated at amortized cost under the straight-line method, cost being determined by the moving averagemethod.
(2) Derivative instruments are stated at fair market value.
(3) The Company revalued the land used in the operations based on the Act for Revaluation of Land (Act No.34
promulgated on March 31, 1998). The difference between fair value and book value resulting from the revaluation, netof related taxes, is recorded as revaluation reserve for land as a separate component of net assets and the related tax isrecorded as deferred tax liabilities for land revaluation.
• Date of revaluation: March 31, 2002
• Method of revaluation as prescribed for in Article 3 Paragraph 3 of the said Act:
Calculation is based on the appraisal value for property tax set forth in Article 2 item 3 of the Enforcement
Ordinance of the Act for Revaluation of Land (Government Ordinance No.119 promulgated on March 31, 1998)
and the road rate set forth in Article 2 item 4 of the said Ordinance with certain reasonable adjustments.
13

Fukoku Mutual Life Insurance Company

(4) Depreciation of tangible fixed assets is calculated by the following methods.
• Tangible fixed assets (excluding lease assets): Declining-balance method
However, buildings (excluding building attachments and structures acquired on or before March 31, 2016)acquired on or after April 1, 1998 are depreciated using Straight-line method.
• Lease assets related to finance lease transactions that do not transfer ownership: Straight-line method over thelease term with no residual value.
Other tangible fixed assets acquired for ¥100,000 or more but less than ¥200,000 are depreciated equally over three
years.
(5) Assets and liabilities denominated in foreign currencies, except for investments in subsidiaries and affiliates, aretranslated into Japanese yen at the effective exchange rate prevailing at the balance sheet date. Investments in
subsidiaries and affiliates are translated into Japanese yen at the exchange rate on the date of acquisition.
(6) Allowance for possible loan losses is provided in accordance with the Company’s standards of self-assessment andwrite-offs and reserves on credit quality:

i. For the credits of borrowers who are legally bankrupt such as being in the proceedings of bankruptcy or civil
rehabilitation (hereinafter called “legally bankrupt borrowers”) and who are substantially bankrupt (hereinafter
called “substantially bankrupt borrowers”), the Company provides the remaining amount of credits after the direct
write-off described below and the deductions of the amount expected to be collected through the disposal ofcollateral or the execution of guarantees.

ii. For the credits of borrowers who are not currently bankrupt but have a high possibility of bankruptcy (hereinafter
called “not currently bankrupt borrowers”), the Company provides the amounts deemed as necessary considering
the borrowers’ ability to pay, within the amounts after deductions of the amount expected to be collected throughthe disposal of collateral or the execution of guarantees.

iii. For the credits of borrowers other than the above, the Company provides the amounts calculated by multiplying theborrowers’ balance by the actual ratio of bad debt losses on defaults during a certain past period.
All credits are assessed by the relevant departments in accordance with the Company’s standards of selfassessment on credit quality. The results of the assessment are reviewed by the audit department, which is independentof business-related divisions. Subsequently, the allowance for possible loan losses is provided based on the results ofthese assessments.
For the credits of legally bankrupt borrowers and substantially bankrupt borrowers, the amounts remaining after
deductions of collateral value or the amounts collectible through the execution of guarantees are written-off directlyfrom the borrowers’ balances as the estimated uncollectible amounts. The amount written-off as of March 31, 2019was ¥1 million.
(7) Reserve for employees' retirement benefits is presented based on projected benefit obligations and pension plan assets
at the balance sheet date.
The Company uses the following methods for amortizing retirement benefit obligations and retirement benefit
expenses:• Method for allocation of projected retirement benefits ................

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

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

10 years

14

Fukoku Mutual Life Insurance Company

(8) Reserve for price fluctuation is calculated in accordance with Article 115 of the Insurance Business Act.
(9) 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 lease fee. The corresponding cost of the lease transactions is recorded in“Other investment expenses”, which is calculated by deducting an amount equivalent to the interest allocated over thelease term from the lease fee received.
(10) Hedge accounting is based on "Accounting Standards for Financial Instruments" (ASBJ Statement No. 10, March 10,2008). The Company applies a fair value hedge accounting as a hedge against the risk of foreign exchange fluctuationin relation to bonds denominated in foreign currencies and against the risk of price fluctuation in relation to domestic
stocks, and a designated hedge accounting (“Furiate shori”) for foreign currency swaps as a hedge against the risk offoreign exchange fluctuation in relation to bonds denominated in foreign currencies issued by the Company.
For assessing the effectiveness of hedge used, ratio analysis of comparing the fluctuations in the fair value orcash flows of hedged items and hedging instruments is mainly applied.
(11) 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) The Company accounts for consumption taxes by the tax-exclusion method. The consumption taxes on certain assets,
which are not deductible from consumption taxes withheld and that are stipulated to be deferred under the Tax Act, aredeferred as prepaid expenses and amortized equally over five years. Consumption taxes other than deferredconsumption taxes are recognized as an expense when incurred.
(13) Policy reserve is based on Article 116 of the Insurance Business Act, and the premium reserve is calculated by thefollowing method:i. In regard to the policies subject to the standard policy reserve, the method as prescribed by the Commissioner ofFinancial Services Agency (Ministry of Finance Ordinance No. 48, 1996) is applied.

ii. In regard to the policies not subject to the standard policy reserve, the net level premium method is applied.
Based on the provision of Article 69, paragraph 5, of the Enforcement Regulation of the Insurance Business Act, theCompany includes additional funded policy reserves as follows.
Among individual annuity insurance policies with an assumed interest rate of 5.00% or higher, for policies thathave begun paying annuities (excluding wife’s annuity insurance additional rider), the Company reduced the assumed
interest rate to 1.00% and funded additional policy reserves. As of March 31, 2019, the balance of these policy
reserves was ¥73,836 million.
The Company also funded additional policy reserves for certain individual annuity insurance policies, whole life
insurance policies that include distribution of surplus every five years, new cancer riders and highly advanced medical
riders. As of March 31, 2019, the balance of these policy reserves was ¥13,391 million.
(14) The software for internal use is amortized based on straight-line method over the estimated useful lives.
(15) 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 are classified as policy-reservematching bonds in accordance with “Temporary Treatment of Accounting and Auditing Concerning Policy-reservematching Bonds in Insurance Industry” (Industry Audit Committee Report No. 21 issued by the Japanese Institute ofCertified Public Accountants on November 16, 2000).
15

Fukoku Mutual Life Insurance Company

2. Asset management of the general accounts other than the separate accounts stipulated in Article 118 Paragraph 1 of the
Insurance Business Act is conducted on the principle of prudent and profitable investments, considering public and social
responsibilities of the insurance business. Based on this policy, the Company allocates the fund, securing its liquidity, fromthe medium-to-long term viewpoints. The Company is diversifying investments in assets such as foreign securities, stocks
and real estates within the acceptable range of risks in order to enhance the profitability, although yen-denominated interest
bearing assets including debt securities such as Japanese government bonds and loans are the cores of the portfolios under
the asset liability management. Derivatives are mainly used to hedge the market risk regarding spot-priced assets 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 from the basic principle and secures the safety of the assets
by utilizing control functions of the Financial and Investment Risk Management Department towards the asset
management sections, monitoring the status of market risk and credit risk periodically on a daily or monthly basis. In
addition, the Company quantifies the market risk and credit risk using value-at-risk (VaR) method in order to control thepossible maximum losses which may arise from the holding assets within a certain range of risk buffers.
The carrying amounts, fair values and their related differences of major financial assets and liabilities in thegeneral account as of March 31, 2019 were as follows:(Millions of yen)
Carrying amount

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

Fair value

Difference¥ 65,282
65,282
176,000¥ 65,282
65,282
176,000

¥–
–
–

299
299

319
319

20
20

22,85022,85022,85022,850––97,110759,519938,273
3,606,817
5,401,721

97,110899,819
1,111,124
3,606,817
5,714,871–
140,300
172,850–
313,150

56,332504,806
561,138
6,227,291
191,935
191,935

56,331
530,223586,555
6,565,879
198,912
198,912(0)25,41725,416
338,588
6,977
6,977

(107)
(3,230)¥ (3,338)(107)(3,230)¥ (3,338)––¥–

Notes: 1. The fair value of derivative instruments that are currency swaps under designated hedge accounting is includedin the fair value of subordinated bonds because it is accounted for as an integral part of the subordinated bondsthat are the hedge items.
Notes: 2. Assets and liabilities generated by derivative instruments are offset and presented net. Net liabilities in total arepresented in brackets.
16

Fukoku Mutual Life Insurance Company

(1) Cash, deposits (excluding financial instruments treated as securities based on “Accounting Standards for Financial
Instruments” (ASBJ Statement No.10, March 10, 2008)) and call loans:
The fair values of cash, deposits and call loans are based on their book values since fair values approximatebook values due to their short maturities.
(2) Securities including deposits and monetary claims bought which are treated as securities based on “AccountingStandards for Financial Instruments” (ASBJ Statement No.10, March 10, 2008) and securities managed as trust assets
in money held in trust:
The fair values of marketable securities are measured at the quoted market prices at the balance sheet date. The fairvalues of other securities without the quoted market prices are based on the prices reasonably calculated such as theprices offered by the information vendors or counterparty financial institutions.
Investments in subsidiaries and affiliates, unlisted stocks and investments in partnerships whereby partnershipassets consist of unlisted stocks whose fair values are deemed extremely difficult to obtain, are excluded from above
securities. The carrying amounts of investments in subsidiaries and affiliates, unlisted stocks and investments inpartnerships were ¥64,787 million, ¥5,696 million, and ¥27,318 million as of March 31, 2019, respectively.
(3) Loans and monetary claims bought treated as loans:
The fair values of policy loans are deemed to approximate book values, considering estimated repayment period andinterest rate conditions since their repayment deadlines have not been set up due to the characteristics that the loans arelimited to the amount of cash surrender values. Therefore, the book values are used as the fair values of policy loans.
The fair values of floating interest rate loans among the ordinary loans and monetary claims bought treated asloans approximate the book values because the market interest rates are reflected in future cash flows in a short period.
Therefore, the fair values of floating interest rate loans and monetary claims bought treated as loans are based on theirbook values. The fair values of fixed interest rate loans are measured by discounting the future cash flows to thepresent values.
The fair values of loans from legally bankrupt borrowers, substantially bankrupt borrowers and not currently
bankrupt borrowers and monetary claims bought treated as loans are computed by deducting the amount of theallowance for possible loan losses from the book values before direct write-offs.
(4) Subordinated bonds:
Subordinated bonds issued by the Company are stated at fair market values.
(5) Derivative instruments:

i. The fair values of the futures and options traded at the exchange are measured at the settlement price of theexchange.

ii. The fair values of forward contracts, options and swaps traded over the counter are based on the quoted prices
offered by counterparty financial institutions.

iii. The fair values of foreign currency forward contracts are determined based on the spot exchange rate and forward
contract rate.

3. 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 ¥172,520 million and ¥314,115 million as of March
31, 2019, respectively. The fair value is mainly based on the value calculated by the Company in accordance with realestate appraisal standards which includes some adjustments using the reference prices.
The amount corresponding to asset retirement obligations included in the carrying amount of investment and rental
properties was ¥697 million as of March 31, 2019.
17

Fukoku Mutual Life Insurance Company

4. The amount of securities lent under lending agreements was ¥299,194 million as of March 31, 2019.

5. The total amounts of credits to bankrupt borrowers, delinquent loans, delinquent loans past 3 months or more andrestructured loans, which were included in loans, was ¥940 million as of March 31, 2019;

i. The balance of credits to bankrupt borrowers was ¥157 million as of March 31, 2019.
ii. The balance of delinquent loans was ¥782 million as of March 31, 2019.
iii. There was no balance of delinquent loans past 3 months or more and restructured loans as of March 31, 2019.
The direct write-offs related to loans decreased credits to bankrupt borrowers described above by ¥1 million as of March
31, 2019.
Credits to bankrupt borrowers represent loans, excluding the balances already written-off, which meet the conditionsprescribed in Article 96 Paragraph 1 item 3 and 4 of the Enforcement Regulations of the Corporate Tax Act. Moreover,accrued interest on these loans is not recorded as income after determining that principal of or interest on these loans isunlikely to be collected due to the significant delay in repayment of principal or interest payment or for some otherreasons.
Delinquent loans are credits which accrued interest is not recorded as income due to the same reasons as describedabove, and exclude credits to bankrupt borrowers and loans for which interest payments have been suspended andrescheduled to assist and support the borrowers in the restructuring of their business.
Delinquent loans past 3 months or more are loans for which interest payments or repayments of principal aredelinquent for 3 months or more from the due date under the terms of the related loan agreements, excluding those loansclassified as credits to bankrupt borrowers and delinquent loans.
Restructured loans are loans for which certain concessions favorable to borrowers, such as interest reduction or
exemption, rescheduling of due date for repayments of principal or interest payment, waiver of claim or other terms, havebeen negotiated for the purpose of assisting and supporting the borrowers in the restructuring of their business. This
category excludes loans classified as credits to bankrupt borrowers, delinquent loans and delinquent loans past 3 months or
more.

6. Accumulated depreciation of tangible fixed assets were ¥167,181 million as of March 31, 2019.

7. Total assets in separate accounts provided for in Article 118 of the Insurance Business Act were ¥71,585 million as ofMarch 31, 2019. The amounts of separate account liabilities were the same as separate account assets.

8. The total amounts of receivables from/payables to subsidiaries were ¥3,204 million and ¥1,837 million as of March 31,
2019, respectively.

9. Deferred tax assets and deferred tax liabilities as of March 31, 2019 were ¥137,650 million and ¥135,958 million,
respectively. Valuation allowance for deferred tax assets was ¥4,121 million.
Major components of deferred tax assets were ¥86,377 million of policy reserves, ¥31,158 million of reserve forprice fluctuation and ¥12,091 million of reserve for employees' retirement benefits as of March 31, 2019.
Major component of deferred tax liabilities was ¥131,712 million of net unrealized gains on available-for-salesecurities as of March 31, 2019.
The statutory tax rate and the actual effective tax rate for the year ended March 31, 2019 were 28.0% and 1.8%,
respectively. The difference between the statutory tax rate and the actual effective tax rate was attributable mainly to-25.9% of reserve for dividends to the policyholders.
18

Fukoku Mutual Life Insurance Company

10. Changes in reserve for dividends to policyholders for the year ended March 31, 2019 were as follows:(Millions of yen)

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

¥ 53,395

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

38,630

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

(33,862)

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

12

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

¥ 58,176

11. The amount of stocks of subsidiaries was ¥64,787 million as of March 31, 2019.

12. Assets pledged as collateral as of March 31, 2019 were ¥17,839 million of securities and ¥744 million of bank deposits.
Secured debts as of March 31, 2019, were ¥5,387 million.

13. Reserve for outstanding claims for the reinsurance contracts provided in accordance with Article 71 Paragraph 1 of the
Enforcement Regulation of the Insurance Business Act (hereinafter called “reserve for outstanding claims for ceded
reinsurance”) was ¥2 million as of March 31, 2019.
Policy reserve for the reinsurance contracts provided in accordance with Article 71 Paragraph 1 of the Enforcement
Regulation of the Insurance Business Act (hereinafter called “policy reserve for ceded reinsurance”) was ¥30 million asof March 31, 2019.

14. The total amounts of adjustment items for redemption of foundation funds and appropriation of net surplus defined in
Article 30 Paragraph 2 of the Enforcement Regulation of the Insurance Business Act was ¥346,992 million as of March
31, 2019.

15. There were unused commitment line agreements under which the Company is the lender of ¥5,994 million as of March
31, 2019.

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

17. The future contribution to the Life Insurance Policyholders Protection Corporation of Japan under Article 259 of the
Insurance Business Act was estimated at ¥8,506 million as of March 31, 2019.
The contribution is recognized as operating expenses when contributed.

18. Matters Related to Employees’ Retirement Benefits as of March 31, 2019(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 planand retirement lump-sum payments. As for a defined contribution plan for these employees, the Company also has adefined contribution pension plan.
As for a defined benefit plan for sales employees, the Company has retirement lump-sum payments.
The Company places a retirement benefit trust in relation to the retirement lump-sum grant plan for sales
employees.
19

Fukoku Mutual Life Insurance Company

The simplified method for calculating retirement benefit obligation is applied to a portion of the Company’s
retirement lump-sum grant plans.
(2) Defined Benefit Plan

i. Reconciliation of beginning and end of balance of retirement benefit obligation(Millions of yen)

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

¥ 86,201

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

3,552

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

516

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

1,080

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

(4,289)Retirement benefit obligation at the end of the fiscal year………………………

¥ 87,060

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

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

¥ 52,372

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

972

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

145

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

2,693

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

(1,304)

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

¥ 54,880

iii. Reconciliation of retirement benefit obligation and pension plan assets with reserve for employees’ retirement
benefits presented on the non-consolidated balance sheet(Millions of yen)a. Funded plan retirement benefit obligation……………………………………

¥ 75,659

b. Pension plan assets………………………………….…………….…………..

(54,880)c. (a + b)……………………………………………………………….………...

20,778d. Unfunded plan retirement benefit obligation………………………………....

11,401e. Unrecognized actuarial differences……………….……..…………………

(7,833)f. Unrecognized prior service cost………………………………………..…..

171

g. Reserve for employees’ retirement benefits (c + d + e + f)..……….……...…

¥ 24,517

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

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

¥ 3,552

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

516

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

(972)

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

1,759

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

(76)

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

¥ 4,779

20

Fukoku Mutual Life Insurance Company

v. Breakdown of pension plan assets
The breakdown of asset categories as a percentage of total pension plan assets were as follows:
Domestic stocks…………………………………..………….…………………

44.3%

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

33.3%

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

9.6%

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

7.7%

Foreign bonds……………………………………………………...………..…..

3.0%

Others……………………………………………………………………………

2.1%

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

100.0%

Within the total of pension assets, 37.4% 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 thepresent and future allocation of pension plan assets, and the present and expected future long-term rateof return on a variety of assets that makes up the pension assets.

vii. Underlying actuarial assumptions
Main underlying actuarial assumptions as of March 31, 2019, were as follows:
Discount rate…………………………………..………….…………………..…

0.6%

Expected long-term rate of return on pension plan assets
Defined Benefit Plan….……………………………………………………...

3.0%

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

0.0%(3) Defined Contribution Plan
The required contribution amount by the Company to the defined contribution plan was ¥215 million as ofMarch 31, 2019.

21

Fukoku Mutual Life Insurance Company

III. Notes to the Non-consolidated Statements of Operations
1. The total amounts of revenues and expenses in connection with subsidiaries were ¥871 million and ¥8,823 million for theyear ended March 31, 2019.

2. Major items of gains on sales of securities for the year ended March 31, 2019 were as follows:(Millions of yen)Domestic bonds....................................................................................................

¥ 1,424

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

24,393Foreign securities..................................................................................................

1,911

3. Major items of losses on sales of securities for the year ended March 31, 2019 were as follows:(Millions of yen)Domestic bonds……………................................................................................

¥ 1,582

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

2,563

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

7,464

4. Major items of losses on valuation of securities for the year ended March 31, 2019 was as follows:(Millions of yen)Domestic stocks and others.................................…………………….................

¥ 39

5. For the year ended March 31, 2019, in calculating the provision of reserve for outstanding claims, a reversal of reserves foroutstanding claims reinsured of ¥8 million was added. In calculating the provision of policy reserves, a reversal of reserves
for policy reserves reinsured of ¥1 million was added.

6. Major items of gains on trading securities for the year ended March 31, 2019 were as follows:(Millions of yen)Interest, dividends and other income……………………....................................

¥ 4,225

Gains on redemption of trading securities………………………………………..

3,400

Losses on valuation of trading securities………………………………………..

(4,530)7. Losses on money held in trust for the year ended March 31, 2019 included valuation gains of ¥0 million.

8. Losses on derivative instruments for the year ended March 31, 2019 included valuation gains of ¥124 million.

22

Fukoku Mutual Life Insurance Company

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

Year ended
March 31, 2018Year ended
March 31, 201997,49591,292

16,916

27,729

1,636

–

–

–

15,28027,729Gains on derivative instruments, net––

Foreign exchange gains, net––

Other capital gains––

28,361

32,374–503

Losses on trading securities, net

7,145

949

Losses on sales of securities

4,977

11,610

0

39

225

5,875

16,013

13,396––

Fundamental profit

A

Capital gains
Gains on money held in trust, net
Gains on trading securities, net
Gains on sales of securities

Capital losses
Losses on money held in trust, net

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

B(11,444)(4,645)Fundamental profit plus net capital gains (losses)

A+B

86,05086,647

8

17

Reinsurance income––

Reversal of contingency reserve––

Reversal of specific allowance for possible loan losses

8

17

Others––29,59033,349––16,016

17,366

Provision of specific allowance for possible loan losses––

Provision of allowance for specified overseas loans––

Write-off of loans––

13,574

15,982

Non-recurring gains

Non-recurring losses
Reinsurance premiums
Provision for contingency reserve

Others
Non-recurring gains (losses)

C(29,581)(33,331)

Ordinary profits

A+B+C

56,46953,315

Notes: 1. The following amounts in respect of gains / losses on money held in trust have been excluded from capital gains / losses andincluded in fundamental profit due to their income nature (being interest and dividend income): ¥132 million in respect of theyear ended March 31, 2018 and ¥131 million in respect of the year ended March 31, 2019.
Notes: 2. The following amounts in respect of gains / losses on trading securities have been excluded from capital gains / losses andincluded in fundamental profit due to their income nature (being interest and dividend income): ¥5,647 million in respect of theyear ended March 31, 2018 and ¥4,225 million in respect of the year ended March 31, 2019.
Notes: 3. Other non-recurring losses represent the losses relating to provision of the additional policy reserves in accordance with Article
69, Paragraph 5 of the Enforcement Regulations of the Insurance Business Act.

23

Fukoku Mutual Life Insurance Company

6. Non-consolidated Statements of Changes in Net Assets[For the year ended March 31, 2018](Millions of yen)Foundation funds, surplus and others
Surplus
Other surplus
Foundation
funds

Balance at the beginning of the fiscal year

10,000

Accumulated
foundation Reserve for
Legal
funds
revaluation reserve forredeemed
future losses

106,000

112

2,849

Reserve forredemptionof foundation
funds

4,000

Reserve forReserve foradvancedspecial accountReserve for Accumulated
depreciation
for advanced
dividend
fund for priceof real estate depreciation ofallowances
fluctuation
for tax
real estate forpurposetax purpose
20,00041,000

257

100

Other
reserves

767

UnappropriatedsurplusTotal
surplusTotal
foundation
funds,
surplus andothers60,453

129,427

245,539(34,592)(34,592)(34,592)

(105)

–

–

(100)

(100)

(100)

40,86840,86840,868(2,000)

–

–

1

–

–

100

–

–

(65)

(65)

(65)

Changes in the fiscal year
Additions to reserve for dividends topolicyholders
Additions to legal reserve for future losses

105

Payment of interest on foundation funds

Net surplus for the fiscal year
Additons to reserve for redemption offoundation funds

2,000

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

Reversal of reserve for special accountfor advanced depreciation of real estate
for tax purpose(100)

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

Balance at the end of the fiscal year

–

–

–

105

2,000

–

–

(1)

(100)

–

4,107

6,110

6,110

10,000106,000

112

2,954

6,000

20,00041,000

255

–

767

64,561

135,538

251,650

Valuation and translation adjustments

Balance at the beginning of the fiscal year

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

Revaluation
reserve forland, net oftax

333,545

4,107

Total
valuationandtranslation
adjustments

337,652

Total net
assets583,192

Changes in the fiscal year
Additions to reserve for dividends
to policyholders(34,592)

Additions to legal reserve for future losses–

Payment of interest on foundation funds(100)

Net surplus for the fiscal year

40,868Additons to reserve for redemption offoundation funds–

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

Reversal of reserve for special accountfor advanced depreciation of real estate
for tax purpose–

Reversal of revaluation reserve for land,
net of tax(65)

Net changes, excluding foundation
funds, surplus and others

2,113

65

2,178

2,178

Total changes in the fiscal year

2,113

65

2,178

8,289

335,658

4,173

339,831591,482

Balance at the end of the fiscal year

24

Fukoku Mutual Life Insurance Company

[For the year ended March 31, 2019](Millions of yen)Foundation funds, surplus and others
Surplus
Other surplus
Foundation
funds

Balance at the beginning of the fiscal year

10,000

Accumulated
foundation Reserve for
Legal
funds
revaluation reserve forredeemed
future losses

106,000

112

2,954

Reserve forredemptionof foundation
funds

6,000

Reserve foradvanced
Reserve for Accumulated
depreciation
dividend
fund for priceof real estate
allowances
fluctuation
for tax
purpose20,00041,000255

Otherreserves

767

UnappropriatedsurplusTotal
surplusTotal
foundation
funds,
surplus andothers64,561

135,538

251,650(38,630)(38,630)(38,630)

(117)

–

–

(100)

(100)

(100)

36,83436,83436,834(2,000)

–

–

45

–

–

41

41

41

Changes in the fiscal year
Additions to reserve for dividends topolicyholders
Additions to legal reserve for future losses

117

Payment of interest on foundation funds

Net surplus for the fiscal year
Additons to reserve for redemption offoundation funds

2,000

Reversal of reserve for advanced depreciationof real estate for tax purpose(45)

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

Balance at the end of the fiscal year

–

–

–

117

2,000

–

–

(45)

–

(3,927)(1,855)(1,855)

10,000106,000

112

3,071

8,000

20,00041,000210

767

60,633

133,682249,794

Valuation and translation adjustments

Balance at the beginning of the fiscal year

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

Revaluation
reserve forland, net oftax

335,658

4,173

Total
valuationandtranslation
adjustments

339,831

Total net
assets591,482

Changes in the fiscal year
Additions to reserve for dividends topolicyholders(38,630)

Additions to legal reserve for future losses–

Payment of interest on foundation funds(100)

Net surplus for the fiscal year

36,834

Additons to reserve for redemption offoundation funds–

Reversal of reserve for advanced depreciationof real estate for tax purpose–

Reversal of revaluation reserve for land,
net of tax

41

Net changes, excluding foundation funds,
surplus and others

7,089

(41)

7,048

7,048

Total changes in the fiscal year

7,089

(41)

7,048

5,192

342,748

4,132

346,880

596,674

Balance at the end of the fiscal year

25

Fukoku Mutual Life Insurance Company

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

Year ended March 31, 2018Year ended March 31, 2019

64,561

60,633

45

1

45

1

Total

64,606

60,635

Appropriation of surplus

40,84836,876

Reserve for dividends to policyholders

38,63034,671

Net surplus

2,217

2,205

Legal reserve for future losses

117

105

Interest payment for foundation funds

100

100

Voluntary surplus reserve

2,000

2,000

Reserve for redemption of foundation funds

2,000

2,000

23,75823,758Unappropriated surplus
Reversal of voluntary surplus reserve
Reversal of reserve for advanced depreciation of realestate for tax purpose

Unappropriated surplus carried forward

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

26

Fukoku Mutual Life Insurance Company

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

As of March 31, 2018

As of March 31, 2019

Claims against bankrupt and quasi-bankrupt obligors

181

175

Claims with collection risk

859

772

Claims for special attention––

Subtotal[Percentage of total]

1,040[0.12%]

947[0.11%]

Claims against normal obligors

850,425

862,815

Total

851,465

863,763

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.
Notes: 2. Claims with collection risk are loans to obligors (other than bankrupt and quasi-bankrupt obligors) with deteriorated financial
condition and results of operations from which it is unlikely that the principal and interest on the loans will be recovered.
Notes: 3. Claims for special attention are loans on which principal and/or interest are past due for three months or more and loans with aconcessionary interest rate, as well as loans with renegotiated conditions in favour of the borrower, including renegotiatedschedule and/or waivers, in each case, other than the loans described in note 1 or 2 above.
Notes: 4. Claims against normal obligors are all other loans.

27

Fukoku Mutual Life Insurance Company

9. Risk-monitored Loans(Millions of yen)

As of March 31, 2018

As of March 31, 2019

Credits to bankrupt borrowers

168

157

Delinquent loans

865

782

Delinquent loans past three months or more––

Restructured loans

–

–

1,033
[0.17%]

940[0.17%]

Total[Percentage of total loans]

Notes: 1. For the credits of legally bankrupt borrowers and substantially bankrupt borrowers, the amounts remaining after deductions ofcollateral value or the amounts collectible through the execution of guarantees is written-off directly from the borrower’sbalance as the estimated uncollectible amounts. The amounts written-off related to credits to bankrupt borrowers were ¥1
million as of March 31, 2018 and ¥1 million as of March 31, 2019.
Notes: 2. Credits to bankrupt borrowers represent loans which are subject to bankruptcy, corporate reorganization or rehabilitation orother similar, including but not limited to foreign, proceedings. Accruing interest of these loans is not recorded as income after
determining that principal of or interest on these loans is unlikely to be collected due to the significant delay in repayment ofprincipal or interest payment or for some other reasons.
Notes: 3. Delinquent loans are credits whose accruing interest is not recorded as income due to the same reasons as described in note 2
above, and exclude credits to bankrupt borrowers and loans for which interest payments have been suspended and rescheduled
to assist and support the borrowers in the restructuring of their business.
Notes: 4. Delinquent loans past three months or more are loans for which interest payment or repayment of principal are delinquent forthree months or more from the due date under the terms of the related loan agreements, excluding those loans classified as
credits to bankrupt borrowers and delinquent loans.
Notes: 5. Restructured loans are loans for which certain concessions favorable to borrowers, such as interest reduction or exemptions,
rescheduling of due date of principal or interest payment, waiver of claim or other terms, have been negotiated for the purpose of
assisting and supporting the borrowers in the restructuring of their business. This category excludes loans classified as credits tobankrupt borrowers, delinquent loans and delinquent loans past three months or more.

28

Fukoku Mutual Life Insurance Company

10. Solvency Margin Ratio(Millions of yen)

As ofMarch 31, 2018

As ofMarch 31, 2019

1,475,658

1,550,103

Foundation funds and surplus

210,194

212,577

Reserve for price fluctuation

95,798111,279

Contingency reserve

187,050

204,416

1,501

1,608

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

418,167

427,014

Net unrealized gains on real estate × 85%

122,692

138,679

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

252,776

268,240

Qualifying subordinated debt

191,935

191,935––

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

Others42,325

41,135272,942

260,577

Total solvency margin(A)

General allowance for possible loan losses

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

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

(B)

Insurance risk

R1

23,252

22,927

3rd sector insurance risk

R8

9,687

9,785

Assumed investment yield risk

R2

32,156

31,373

Minimum guarantee risk

R7

–

–

Investment risk

R3

232,788

221,386

Business risk

R4

5,957

5,709

1,081.2%

1,189.7%

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

29

Fukoku Mutual Life Insurance Company

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

As of March 31, 2018

As of March 31, 2019

AmountAmountIndividual variable insurance––

Individual variable annuities

33

23

Group annuities

82,31371,561

Total

82,347

71,585(2) Individual Variable Insurance (Separate Account)
The Company has not sold the individual variable insurance.

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

As of March 31, 2018
Number ofpolicies

As of March 31, 2019
Number ofpolicies

AmountAmountIndividual variable annuities

10

27

8

20

Total

10

27

8

20

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

As of March 31, 2018
AmountAs of March 31, 2019

Percentage

AmountPercentage

Cash, deposits, call loans

7

23.1%

4

18.1%

Securities

26

76.9%

19

81.9%

Domestic bonds

–

–

–

–

Domestic stocks

–

–

–

–

Foreign securities

–

–

–

–

Foreign bonds

–

–

–

–

Foreign stocks and other securities

–

–

–

–

26

76.9%

19

81.9%

Loans

–

–

–

–

Others––––Allowance for possible loan losses

–

–

–

–

Total

33

100.0%

23

100.0%

Other securities

30

Fukoku Mutual Life Insurance Company

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

Year ended
March 31, 2018Year ended
March 31, 2019

AmountAmountInterest, dividends and other income

22

Gains on sales of securities––

Gains on redemption of securities––

Gains on valuation of securities

85Foreign exchange gains, net––

Gains on derivative instruments––

Other investment income–

0

Losses on sales of securities––

Losses on redemption of securities––

Losses on valuation of securities

88Foreign exchange losses, net––

Losses on derivative instruments––

Other investment expenses

0–

Net investment income

2(0)(iv) Fair Value Information on Securities in Separate Account for Individual Variable Annuities• Net Valuation Gains/Losses on Trading Securities(Millions of yen)

As of March 31, 2018

As of March 31, 2019

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

Trading securities

26

0

19

(2)

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

31

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, 2018

As of March 31, 2019

Carrying value on thebalance sheet

Net valuation gains/losses included in
the statement of operations

Carrying value on thebalance sheet

Net valuation gains/losses included in
the statement of operations

257,729(5,292)

188,313(6,623)

Trading securities

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)Book value

As of March 31, 2018
Gains/Losses
Fair value
Gains

As of March 31, 2019
Gains/Losses
Book value Fair value
Gains

Losses

Losses758,872

897,574

138,702138,702–759,519

899,819

140,300

140,300–

Domestic bonds

738,632

876,835

138,203––

738,491878,209

139,718

139,718–

Foreign bonds

20,23920,738498––

21,02821,610

581

581

–

Monetary claims bought

–

–

–

–

–

–

–

–

–

–

Negotiable certificate of deposits

–

–

–

–

–

–

–

–

–

–

Others

–

–

–

–

–

–

–

–

–

–

973,736

1,134,148

160,412

162,375

1,962

938,273

1,111,124

172,850

173,088

237

Domestic bonds

971,937

1,132,289

160,352

162,315

1,962

936,473

1,109,273

172,799

173,037

237

Foreign bonds

1,799

1,859

59

59

–

1,799

1,850

50

50

–

–

–

–

–

–

–

–

–

–

–

2,941,466

3,404,811

463,345531,772

68,427

3,134,467

3,606,817

472,350

502,516

30,166

Domestic bonds

1,023,447

1,080,932

57,48467,947

10,462

1,020,560

1,098,130

77,56979,6002,031

Domestic stocks

305,353

671,850

366,497

370,2783,780

299,394603,602304,208

312,902

8,693

Foreign securities

1,538,185

1,558,823

20,63773,35952,721

1,735,720

1,808,479

72,75890,53017,772Foreign bonds

1,290,483

1,290,268(214)

46,42546,6401,453,532

1,503,448

49,91562,862

12,946

247,701

268,554

20,852

26,933

6,081

282,188

305,030

22,842

27,667

4,825

74,48093,20518,72520,187

1,462

78,791

96,605

17,813

19,483

1,669

Money held in trust

–

–

–

–

–

–

–

–

–

–

Monetary claims bought

–

–

–

–

–

–

–

–

–

–

Negotiable certificate of deposits

–

–

–

–

–

–

–

–

–

–

Others

–

–

–

–

–

–

–

–

–

–

4,674,074

5,436,534

762,459

832,849

70,3904,832,260

5,617,761

785,501

815,904

30,403

Domestic bonds

2,734,016

3,090,057

356,040

368,465

12,425

2,695,525

3,085,613

390,087

392,356

2,268

Domestic stocks

305,353

671,850

366,497

370,2783,780

299,394603,602304,208

312,902

8,693

Foreign securities

1,560,224

1,581,421

21,19673,91852,721

1,758,549

1,831,939

73,39091,163

17,772Foreign bonds

1,312,522

1,312,866

343

46,984

46,6401,476,361

1,526,909

50,54863,495

12,946

247,701

268,554

20,852

26,933

6,081

282,188

305,030

22,842

27,667

4,825

74,48093,20518,72520,187

1,462

78,791

96,605

17,813

19,483

1,669

Money held in trust

–

–

–

–

–

–

–

–

–

–

Monetary claims bought

–

–

–

–

–

–

–

–

–

–

Negotiable certificate of deposits

–

–

–

–

–

–

–

–

–

–

Others

–

–

–

–

–

–

–

–

–

–

Held-to-maturity debt securities

Policy-reserve-matching bonds

Investments in subsidiaries and affiliates
Available-for-sale securities

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.

[Held-to-maturity Debt Securities](Millions of yen)
As of March 31, 2018
Carrying value on
the balance sheet

As of March 31, 2019

Fair value

Differences

758,872

897,574

138,702

Domestic bonds

738,632

876,835

Foreign bonds

20,23920,738

Monetary claims bought–

Negotiable certificate of deposits
OthersCarrying value on
the balance sheet

Fair value

Differences

759,519

899,819

140,300

138,203

738,491878,209

139,718498

21,02821,610

581

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

Domestic bonds

–

–

–

–

–

–

Foreign bonds

–

–

–

–

–

–

Monetary claims bought

–

–

–

–

–

–

Negotiable certificate of deposits

–

–

–

–

–

–

Others

–

–

–

–

–

–

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

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

32

Fukoku Mutual Life Insurance Company

[Policy-reserve-matching Bonds](Millions of yen)
As of March 31, 2018
Carrying value on
the balance sheet

As of March 31, 2019

Fair value

Differences

944,136

1,106,511

162,375

Domestic bonds

942,337

1,104,652

Foreign bonds

1,799

1,859

–

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

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

Carrying value on
the balance sheet

Fair value

Differences

929,094

1,102,182

173,088

162,315927,294

1,100,331

173,037

59

1,799

1,850

50

–

–

–

–

–

29,59927,636(1,962)

9,179

8,942

(237)

29,59927,636(1,962)

9,179

8,942

(237)

Foreign bonds

–

–

–

–

–

–

Others

–

–

–

–

–

–

[Available-for-sale Securities](Millions of yen)
As of March 31, 2018

As of March 31, 2019

Book value

Carrying value on
the balance sheet

Differences

Book value

Carrying value on
the balance sheet

Differences

1,561,884

2,093,656

531,7722,368,764

2,871,281

502,516

Domestic bonds

713,551

781,499

67,947876,036

955,637

79,600

Domestic stocks

274,161

644,439

370,278

236,860

549,763

312,902

Foreign securities

518,137

591,497

73,3591,198,845

1,289,376

90,530Foreign bonds

360,156

406,581

46,425

981,761

1,044,624

62,862Foreign stocks

157,981

184,915

26,933217,084

244,752

27,66756,032

76,22020,18757,021

76,505

19,483

Money held in trust

–

–

–

–

–

–

Monetary claims bought

–

–

–

–

–

–

Negotiable certificate of deposits

–

–

–

–

–

–

Others

–

–

–

–

–

–

1,379,581

1,311,154(68,427)

765,702735,535(30,166)

Domestic bonds

309,895

299,433(10,462)

144,524

142,493(2,031)

Domestic stocks

31,191

27,411(3,780)62,53353,839(8,693)Foreign securities

1,020,047

967,325(52,721)536,874

519,102(17,772)

Foreign bonds

930,327

883,686(46,640)

471,771458,824(12,946)

Foreign stocks

89,72083,639(6,081)

65,10360,278(4,825)18,447

16,984(1,462)

21,76920,100(1,669)

Money held in trust

–

–

–

–

–

–

Monetary claims bought

–

–

–

–

–

–

Negotiable certificate of deposits

–

–

–

–

–

–

Others

–

–

–

–

–

–

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

Other securities

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

Other securities• Book value of securities without fair value are as follows:(Millions of yen)
As of March 31, 2018

As of March 31, 2019––

Unlisted foreign bonds––

Others––

Held-to-maturity debt securities––

Investments in subsidiaries and affiliates

64,83764,787Available-for-sale securities

28,02130,905

5,697

5,696

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

Unlisted foreign bonds––

22,32325,20992,85895,692

Policy-reserve-matching bonds

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

OthersTotal

Note: In this table, domestic and overseas investment partnerships are included in “Others” within “Available-forsale securities.” However, unrealized gains on available-for-sale securities corresponding to these holdings
by domestic and overseas investment partnerships (¥1,285 million as of March 31, 2018 and ¥2,109 million
as of March 31, 2019) are included in their balance sheet carrying amounts.

33

Fukoku Mutual Life Insurance Company

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

As of March 31, 2018

Interest- related

Currency- related

Stock- related

Bond- related

OthersTotal–

10,755(1,082)

–

–

9,672

Hedge accounting not applied

(453)

17

–

(98)

–

(534)

Total

(453)

10,772(1,082)

(98)

–

9,138

Hedge accounting applied

Interest- related

Currency- related

Stock- related

Bond- related–(3,230)–––(3,230)Hedge accounting not applied

(333)

226

–

–

–

(107)

Total

(333)

(3,004)–––(3,338)

As of March 31, 2019

Hedge accounting applied

OthersTotal

Note: Gains and losses from applying fair value hedge accounting (currency-related gains of ¥10,755 million, stock-related losses of ¥1,082
million as of March 31, 2018, and currency-related losses of ¥3,230 million as of March 31, 2019) included in gains and losses withhedge accounting applied, and gains and losses with hedge accounting not applied are reported in the statements of operations.

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

As of March 31, 2018
Notional amount/contract value

As of March 31, 2019

Fair valueOver 1 year

Gains
(Losses)

Notional amount/contract value

Fair value

Gains(Losses)

–

–

–

–

–

–

125

(333)

Over 1 year

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

Receipt fixed, payment floating
[

[

–

– ]
–

Payment fixed, receipt floating

–
–

– [

– ]
–

–
–

– ]

– [

–

–

– ]

Bought–Receipt fixed, payment floating[
Payment fixed, receipt floating–– ]320,000

[

–
–

– [

160,000– ]500,000

596 ]

142

Total

(453) [
(453)

–

459 ]

340,000(333)

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

34

Fukoku Mutual Life Insurance Company

[Currency-related Transactions](Millions of yen)

As of March 31, 2018
Notional amount/contract value

As of March 31, 2019

Fair valueOver 1 year

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

Gains(Losses)

Notional amount/contract value

Fair valueOver 1 year

Gains
(Losses)

192,046
99,201
26,04026,16726,006
14,629

–
–
–
–
–
–

192,029
99,362
26,02726,327
25,691
14,619

17
(161)
12
(159)
314
10

138,780
59,882
25,68421,063
19,166
12,983

–
–
–
–
–
–

137,997
59,82125,30420,944
19,215
12,710

783
60
380
118
(48)
272

–

–

–

–

–

–

–

–

–
–]
–
–]
–
–]

–
– [

97,211352 ]
97,211
352 ]
–
–]

–

–

67

284

67

284

–

–

–
–]
–
–]
–
–]
–
–]
–
–]

–

–
–]
171,400
1,081 ]
73,960352 ]
58,680444 ]
38,760
283 ]

–
–

–

238

(842)

68

(284)

123

(321)

46

(236)
226

–
–

– [

–
–

– [

–

– [

–
–

– [

–
–

– [

–
–

– [

–
–

– [
17

Total

–
–

–
–
–
–

Notes: 1. Forward exchange rates are used for exchange rates as of March 31, 2019.
Notes: 2. Figures in [ ] are option premiums which are included in the balance sheet.

[Stock-related Transactions]
No ending balance as of March 31, 2018 and March 31, 2019.

[Bond-related Transactions](Millions of yen)

As of March 31, 2018
Notional amount/contract value

As of March 31, 2019

Fair valueOver 1 year

Gains
(Losses)

Notional amount/contract value

Fair value

Gains(Losses)Over 1 year

Exchange-traded transactions
Foreign bond futures
Sold
Bought21,714–

21,812

(98)

–

–

–

–

–

–

–

–

–

–

–

–

Total

(98)

35

Fukoku Mutual Life Insurance Company–

(iii) Hedge Accounting Applied[Interest-related Transactions]
No ending balance as of March 31, 2018 and March 31, 2019.
[Currency-related Transactions](Millions of yen)
As of March 31, 2018
Method ofhedge
accounting

Hedging instruments

Hedged items

As of March 31, 2019

Notional amount/contract value

Fair value Hedged items

Notional amount/contract valueOver 1 year

Fair valueOver 1 year

Currency forward contracts
Sold
U.S. dollar
Fair value
hedge
methodAustralian dollar
Euro
Canadian dollar

Foreigncurrencydenominatedbonds

British Pound
Bought615,948–

605,193

807,349–

810,580

525,595–

516,082

503,551–

508,347

118,220–

118,240

111,073–

110,053

43,211–42,826

8,575–

24,628–43,126–

Foreign
8,146
currency24,149 denominatedbonds
42,701

14,021–

14,11331,293–

31,112

–

–

–

–

–

–

Total
Notes:1. Forward exchange rates are used for exchange rates as of March 31, 2019.
Notes:2. Regarding assets and liabilities which are denominated in foreign currencies but have fixed settlement in yen under currency
forward contracts and are reported in yen amounts in the balance sheet, those currency forward contracts are excluded from thetable above.

[Stock-related Transactions](Millions of yen)
As of March 31, 2018
Method ofhedge
accounting

Hedging instruments

Hedged items

As of March 31, 2019

Notional amount/contract value

Fair value Hedged items

Notional amount/contract valueOver 1 year

Fair valueOver 1 year

Stock forward contracts
Fair value
hedge
methodSold
BoughtDomestic
stocks

1,153

1,153

2,235

–

–

–

Domestic
stocks

–

–

–

–

–

–

Total

[Bond-related Transactions]
No ending balance as of March 31, 2018 and March 31, 2019.

36

Fukoku Mutual Life Insurance Company

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

Year ended
March 31, 2018Year ended
March 31, 2019

Ordinary revenues

8,064

7,967

Ordinary profits

583

551

Net surplus attributable to the parent company

411

367

Comprehensive income

466

451

As of March 31, 2018

As of March 31, 201984,88885,147

1,127.4%

1,236.4%

Total assets
Solvency margin ratio(2) Scope of Consolidation and Application of Equity Method
Number of consolidated subsidiaries: 6
Number of unconsolidated subsidiaries accounted for under the equity method: 0
Number of affiliates accounted for under the equity method: 037

Fukoku Mutual Life Insurance Company

(3) Consolidated Balance Sheets(Millions of yen)
As of
As of
March 31, 2018 March 31, 2019
Assets:

As of
As of
March 31, 2018 March 31, 2019
Liabilities:

Cash and deposits

157,703

153,017

Call loans

176,000

176,000

7,467,875

7,476,860

22,166

24,584443

299

7,391,773

7,393,634

31,502

23,850Reserve for dividends to policyholders

53,39558,176

7,203,196

7,287,916

Reserve for dividends to policyholders(subsidiary)

539

465

Loans

597,285564,778

Agency payables

70

117

Tangible fixed assets

218,895

217,393

Reinsurance payables

75

88

Land

125,278

125,180

Subordinated bonds

191,935

191,935

Buildings

86,54884,624

Other liabilities

59,50962,838

Lease assets

1,565

1,241

Net defined benefit liabilities

34,01932,470Construction in progress

2,052

2,933

Reserve for price fluctuation

105,521

121,357

Other tangible fixed assets

3,450

3,413

Deferred tax liabilities

8,875

1,743

38,05634,254

Deferred tax liabilities for land revaluation

14,241

14,225

Software

24,64323,1697,882,122

7,901,637

Goodwill

37－

Lease assets

11,226

9,532

Foundation funds

10,00010,000

Other intangible fixed assets

2,148

1,553

Accumulated foundation funds redeemed

106,000

106,000

0

1

Reserve for revaluation

112

112

221

173

Consolidated surplus

139,621

137,669

67,341

58,813

Total foundation funds, surplus and others

255,733

253,781

Net defined benefit asset

107

177

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

344,585

352,453

Deferred tax assets

166

185

Revaluation reserve for land, net of tax

4,173

4,132

(2,049)(2,096)

Foreign currency translation adjustment

(377)

(496)

Accumulated remeasurements of defined
benefit plans(6,055)(5,517)

Total accumulated other comprehensive
income342,326

350,571

8,690

8,774

606,750

613,127

8,488,872

8,514,764

Monetary claims bought
Money held in trust
Securities

Intangible fixed assets

Agency receivables
Reinsurance receivables
Other assets

Allowance for possible loan losses

Policy reserves
Reserve for outstanding claims
Policy reserve

Total liabilities
Net assets:

Non-controlling interests
Total net assets
Total assets

8,488,872

8,514,764

38

Total liabilities and net assets

Fukoku Mutual Life Insurance Company

(4) Consolidated Statements of Operations and Comprehensive Income[Consolidated Statements of Operations](Millions of yen)
Year ended March 31, 2018Year ended March 31, 2019

Premium and other income

597,178

577,450

Investment income

199,395

208,598

Interest, dividends and other income

173,481

174,763

Gains on money held in trust, net

1,769

–

–

3,276

Gains on sales of securities

16,78029,281Other investment income

811

315

Ordinary revenues:

Gains on trading securities, net

Gains on separate accounts, net

6,553

962

Other ordinary revenues

9,890

10,685

Total ordinary revenues

806,464

796,734

Ordinary expenses:
Claims and other payments

561,881564,389

Claims132,639

110,872

Annuities

167,565

200,064

Benefits

119,468

125,198

Surrenders

113,367

101,023

Other payments

28,84027,231

26,600

4,291

–

2,418

26,588

1,860

Provision of interest portion of reserve for dividends to policyholders

12

12Provision of interest portion of reserve for dividends to policyholders (subsidiary)00Investment expenses

38,27847,271

Interest expenses

4,232

3,892

–

371

Provision of policy reserve and others
Provision of reserve for outstanding claims
Provision of policy reserve

Losses on money held in trust, net
Losses on trading securities, net

1,498

–

Losses on sales of securities

4,977

11,610Losses on valuation of securities
Losses on derivative instruments, net
Foreign exchange losses, net
Provision of allowance for possible loan losses
Depreciation of real estate for rent and other assets
Other investment expenses
Operating expenses

0

39

225

5,875

16,012

13,397

280

88

4,271

4,165

6,781

7,829

98,72599,232Other ordinary expenses

22,62326,362

Total ordinary expenses

748,109741,547

Ordinary profits

58,35455,187Extraordinary gains:
Gains on disposal of fixed assets

288

3

–

60

288

63

Losses on disposal of fixed assets

552

213

Impairment losses

141

228

13,693

15,836

OthersTotal extraordinary gains
Extraordinary losses:

Provision of reserve for price fluctuation
Losses on advanced depreciation of real estate for tax purpose
Total extraordinary losses
Provision of reserve for dividends to policyholders (subsidiary)
Surplus before income taxes：

3–

14,39016,278336

337

43,916

38,635

Income taxes:
Current

12,377

12,345

Deferred(9,722)(10,450)

Total income taxes

2,655

1,895

Net surplus

41,261

36,739Net surplus attributable to non-controlling interests
Net surplus attributable to the parent company

39

100

1

41,161

36,738

Fukoku Mutual Life Insurance Company

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

Year ended
March 31, 2018Year ended
March 31, 2019

Net surplus

41,261

36,739Other comprehensive income:

5,356

8,376

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

2,115

7,957

56

(119)

Remeasurements of defined benefit plan, net of tax

3,184

538

Comprehensive income:

46,61845,116Comprehensive income attributable to the parent company

46,51845,024100

92

Foreign currency translation adjustments

Comprehensive income attributable to non-controlling interests

40

Fukoku Mutual Life Insurance Company

(5) Consolidated Statements of Cash Flows
Year ended
March 31, 2018

(Millions of yen)
Year ended
March 31, 2019

Surplus before income taxes

43,916

38,635

Depreciation of real estate for rent and other assets

4,271

4,165

Depreciation

8,830

12,147

Impairment losses

141

228

Amortization of goodwill

763

37

Increase (decrease) in reserve for outstanding claims

(56)

2,418

Cash flows from operating activities:

26,588

1,860

Provision of interest portion of reserve for dividends to policyholders

12

12Provision of interest portion of reserve for dividends to policyholders (subsidiary)

0

0

336

337

Increase (decrease) in policy reserve

Provision of reserve for dividends to policyholders (subsidiary)
Increase (decrease) in allowance for possible loan losses

273

46

Increase (decrease) in net defined benefit liabilities

(390)

(870)

13,693

15,836

Interest, dividends and other income(173,481)(174,763)

Losses (gains) on securities, net(18,402)(15,622)

Increase (decrease) in reserve for price fluctuation

Interest expenses

4,232

3,892

Foreign exchange losses (gains), net

16,012

13,397

Losses (gains) on tangible fixed assets, net

(63)

145

Decrease (increase) in agency receivable

3

(1)

(20)

47

Decrease (increase) in reinsurance receivable(1,875)(878)

Increase (decrease) in agency payable

(28)

47

Increase (decrease) in reinsurance payable

(4)

13

1,642

915

Decrease (increase) in other assets except from investing and financing activities

Increase (decrease) in other liabilities except from investing and financing activities
Others

17,202

18,544(56,403)(79,406)

Interest, dividends and other income received

180,718

178,314

Interest expenses paid

(4,491)(3,866)

Dividends to policyholders paid

(32,138)(33,862)

Subtotal

Dividends to policyholders paid (subsidiary)

(395)

(412)

(14,492)(10,790)

72,79849,976

Net decrease (increase) in deposits

225

138

Proceeds from sales and redemption of monetary claims bought

271

144

(8,800)(2,000)

Corporate income tax (paid) refunded
Net cash provided by (used in) operating activities [a]Cash flows from investing activities:

Increase in money held in trust
Decrease in money held in trust

8,800

9,263

Payments for purchase of securities(916,556)(644,228)

Proceeds from sales and redemption of securities

821,149

607,481

Payments for additions to loans(83,642)(89,212)

Proceeds from collections of loans

108,673

113,336

Proceeds from and payments for settlements of derivatives, net

22,930(28,014)

Others(5,897)(6,735)

Subtotal [b](52,845)(39,825)[a + b]

19,952

10,151

Payments for purchase of tangible fixed assets(7,376)(6,398)Proceeds from sales of tangible fixed assets

551

95

Payments for purchase of intangible fixed assets(6,479)(5,119)Net cash provided by (used in) investing activities(66,150)(51,247)

Proceeds from issuance of subordinated bonds

30,000–

Redemption of subordinated bonds(30,000)

–

(100)

(100)

Cash flows from financing activities:

Payment of interest on foundation funds
Dividends paid to non-controlling interests
Payments for lease obligations
Net cash provided by (used in) financing activities

(13)

(7)

(1,526)(2,915)(1,641)(3,023)

Effect of exchange rate changes on cash and cash equivalents

(643)

(180)

Net increase (decrease) in cash and cash equivalents

4,363(4,475)

Cash and cash equivalents at the beginning of the fiscal year

328,236

332,599

Cash and cash equivalents at the end of the fiscal year

332,599

328,124

41

Fukoku Mutual Life Insurance Company

(6) Consolidated Statements of Changes in Net Assets[For the year ended March 31, 2018](Millions of yen)Foundation funds, surplus and others

Balance at the beginning of the fiscal year

Foundation funds

Accumulated
foundation funds
redeemed

10,000106,000

Total foundation
Consolidated surplus funds, surplus andothersReserve forrevaluation
112

133,217249,329(34,592)(34,592)

(100)

(100)

41,161

41,161(65)(65)

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

–

–

–

6,403

6,403

10,000106,000

112

139,621

255,733

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

342,470

Foreign currencytranslation
adjustments

4,107

(433)

Accumulated
Total accumulated
remeasurements of other comprehensive
defined benefit plansincome(9,240)336,904

Non-controllinginterests

Total net assets

8,603

594,837

Changes in the fiscal year
Additions to reserve for dividends topolicyholders(34,592)

Payment of interest on foundation funds(100)

Net surplus attributable to the parent
company for the fiscal year

41,161

Reversal of revaluation reserve for land,
net of tax(65)

Net changes, excluding foundation funds,
surplus and others

2,115

65

56

3,184

5,422

86

5,508

Total changes in the fiscal year

2,115

65

56

3,184

5,422

86

11,912

344,585

4,173

(377)

(6,055)342,326

8,690

606,750

Balance at the end of the fiscal year

42

Fukoku Mutual Life Insurance Company

[For the year ended March 31, 2019](Millions of yen)Foundation funds, surplus and others

Balance at the beginning of the fiscal year

Foundation funds

Accumulated
foundation funds
redeemed

10,000106,000

Total foundation
Consolidated surplus funds, surplus andothersReserve forrevaluation
112

139,621

255,733(38,630)(38,630)

(100)

(100)

36,73836,73841

41

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

–

–

–

(1,951)(1,951)

10,000106,000

112

137,669

253,781

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

344,585

Foreign currencytranslation
adjustments

4,173

(377)

Accumulated
Total accumulated
remeasurements of other comprehensive
defined benefit plansincome(6,055)342,326

Non-controllinginterests

Total net assets

8,690

606,750

Changes in the fiscal year
Additions to reserve for dividends topolicyholders(38,630)

Payment of interest on foundation funds(100)

Net surplus attributable to the parent
company for the fiscal year

36,738

Reversal of revaluation reserve for land,
net of tax

41

Net changes, excluding foundation funds,
surplus and others

7,867

(41)

(119)

538

8,244

84

8,329

Total changes in the fiscal year

7,867

(41)

(119)

538

8,244

84

6,377

352,453

4,132

(496)

(5,517)

350,571

8,774

613,127

Balance at the end of the fiscal year

43

Fukoku Mutual Life Insurance Company

Notes to the Consolidated Financial Statements
I. Presentation of the Consolidated Financial Statements
1. Basis of Presentation
The accompanying consolidated financial statements have been prepared from the accounts maintained by Fukoku MutualLife Insurance Company (the “Company”) and its consolidated subsidiaries in accordance with theprovisions set forth in the Insurance Business Act of Japan and its related rules and regulations and in conformity withaccounting principles generally accepted in Japan, which are different in certain respects from accounting principles
generally accepted in countries and jurisdictions other than Japan.
In addition, the notes to the consolidated financial statements include information which is not required underaccounting principles generally accepted in Japan but is presented herein as additional information.
Amounts of less than one million yen have been rounded down. As a result, the totals do not add up.

2. Principles of Consolidation(1) Scope of Consolidation
Consolidated subsidiaries as of March 31, 2019 are listed below:
Fukoku Capital Management, Inc.
Fukokushinrai Life Insurance Co., Ltd.
Fukoku Information Systems Co., Ltd.
Fukoku Life International (U.K.) Ltd.
Fukoku Life International (America) Inc.
Fukoku Life Investments Singapore Pte. Ltd.
Major unconsolidated subsidiary is Fukoku Business Service Company Limited.
Four subsidiaries are excluded from the scope of consolidation, as each one of them is small in its total assets,
amount of sales, net surplus for the period and surplus and are sufficiently insignificant to reasonable judgement on
their impact on the financial position and results of operation of the Company's group.
(2) Application of Equity Method
Unconsolidated subsidiaries (such as Fukoku Business Service Company Limited, etc.) are insignificant in their impact
on net surplus attributable to the parent company and consolidated surplus, and also immaterial as a whole, therefore,
application of equity method is not applied.
There are no affiliates for the year ended March 31, 2019.
(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 used and 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 the immaterial amount of
goodwill, such amount is fully charged to operating expenses when incurred.

44

Fukoku Mutual Life Insurance Company

II. Notes to the Consolidated Balance Sheets
1. (1) 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 determinedby the moving average method.

iii. Policy-reserve-matching bonds are stated at amortized cost under the straight-line method, cost being determinedby the moving average method in accordance with “Temporary Treatment of Accounting and Auditing Concerning
Policy-reserve-matching Bonds in the Insurance Industry” (Industry Audit Committee Report No.21 issued by theJapanese Institute of Certified Public Accountants on November 16, 2000).

iv. Investments in unconsolidated subsidiaries and affiliates which are not accounted for under the equity method arestated at cost, cost being determined by the moving average method.

v. Available-for-sale securities with fair market value are stated at fair market value based on the market prices at theend of the fiscal year. Costs of their sales are determined by the moving average method. Net unrealized gains orlosses on these available-for-sale securities, net of taxes, are recorded as a separate component of net assets.

vi. Available-for-sale securities whose market value are deemed extremely difficult to obtain are stated at cost, cost
being determined by the moving average method, except for public and corporate bonds including foreign bonds, ofwhich the difference between acquisition cost and face value is considered to be an adjustment of interest. Suchbonds are stated at amortized cost under the straight-line method, cost being determined by the moving averagemethod.

(2) Derivative instruments are stated at fair market value.
(3) The Company revalued the land used in the operations based on the Act for Revaluation of Land (Act No.34
promulgated on March 31, 1998). The difference between fair value and book value resulting from the revaluation, netof related taxes, is recorded as revaluation reserve for land as a separate component of net assets and the related tax isrecorded as deferred tax liabilities for land revaluation.
• Date of revaluation: March 31, 2002
• Method of revaluation as prescribed for in Article 3 Paragraph 3 of the said Act:
Calculation is based on the appraisal value for property tax set forth in Article 2 item 3 of the Enforcement
Ordinance of the Act for Revaluation of Land (Government Ordinance No.119 promulgated on March 31,
1998) and the road rate set forth in Article 2 item 4 of the said Ordinance with certain reasonable adjustments.

(4) Depreciation of the Company’s tangible fixed assets is calculated by the following methods.
• Tangible fixed assets (excluding lease assets): Declining-balance method
However, buildings (excluding building attachments and structures acquired on or before March 31, 2016) acquiredon or after April 1, 1998 are depreciated using Straight-line method.
• Lease assets related to finance lease transactions that do not transfer ownership: Straight-line method over the leaseterm with no residual value.
Other tangible fixed assets acquired for ¥100,000 or more but less than ¥200,000 are depreciated equally over three
years.

45

Fukoku Mutual Life Insurance Company

(5) Assets and liabilities denominated in foreign currencies, except for investments in unconsolidated subsidiaries andaffiliates, are translated into Japanese yen at the effective exchange rate prevailing at the balance sheet date.
Investments in unconsolidated subsidiaries and affiliates are translated into Japanese yen at the exchange rate on thedate of acquisition.
(6) Allowance for possible loan losses for the Company is provided in accordance with the standards of self-assessment
and write-offs and reserves on credit quality:

i. For the credits of borrowers who are legally bankrupt such as being in the proceedings of bankruptcy or civil
rehabilitation (hereinafter called “legally bankrupt borrowers”) and who are substantially bankrupt (hereinafter
called “substantially bankrupt borrowers”), the Company provides the remaining amount of credits after the direct
write-off described below and the deductions of the amount expected to be collected through the disposal ofcollateral or the execution of guarantees.

ii. For the credits of borrowers who are not currently bankrupt but have a high possibility of bankruptcy (hereinafter
called “not currently bankrupt borrowers”), the Company provides the amounts deemed as necessary considering
the borrowers’ ability to pay, within the amounts after deductions of the amount expected to be collected throughthe disposal of collateral or the execution of guarantees.

iii. For the credits of borrowers other than the above, the Company provides the amounts calculated by multiplying theborrowers’ balance by the actual ratio of bad debt losses on defaults during a certain past period.
All credits are assessed by the relevant departments in accordance with the Company’s standards of self- assessment
on credit quality. The results of the assessment are reviewed by the audit department, which is independent ofbusiness-related divisions. Subsequently, the allowance for possible loan losses is provided based on the results ofthese assessments.
For the credits of legally bankrupt borrowers and substantially bankrupt borrowers, the amounts remaining after
deductions of collateral value or the amounts collectible through the execution of guarantees are written-off directlyfrom the borrowers’ balances as the estimated uncollectible amounts. The amount written-off as of March 31, 2019was ¥1 million.
(7) Net defined benefit liability, which is provided for employees’ retirement benefits, is calculated by deducting theamount of pension assets from the amount of retirement benefit obligations incurred as of the balance sheet date basedon the projected retirement benefits as of the current fiscal year end.
The Company uses the following methods of accounting in relation to retirement benefits:• Method for allocation of projected retirement benefits ........................

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

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

10 years(8) Reserve for price fluctuation is calculated in accordance with Article 115 of the Insurance Business Act.
(9) As for the finance lease transactions where the Company is a lessor, the lease fee is recorded in “Interest, dividends andother income” at the time of receiving lease fee. The corresponding cost of the lease transactions is recorded in “Other
investment expenses”, which is calculated by deducting an amount equivalent to the interest allocated over the leaseterm from the lease fee received.

46

Fukoku Mutual Life Insurance Company

(10) Hedge accounting is based on "Accounting Standards for Financial Instruments" (ASBJ Statement No. 10, March 10,2008). The Company applies a fair value hedge accounting as a hedge against the risk of foreign exchange fluctuationin relation to bonds denominated in foreign currencies and against the risk of price fluctuation in relation to domestic
stocks, and a designated hedge accounting (“Furiate shori”) for foreign currency swaps as a hedge against the risk offoreign exchange fluctuation in relation to bonds denominated in foreign currencies issued by the Company.
For assessing the effectiveness of hedge used, ratio analysis of comparing the fluctuations in the fair value or cash
flows of hedged items and hedging instruments is mainly applied.

(11) The Company accounts for consumption taxes by the tax-exclusion method. The consumption taxes on certain assets,
which are not deductible from consumption taxes withheld and that are stipulated to be deferred under the Tax Act, aredeferred as prepaid expenses and amortized equally over five years. Consumption taxes other than deferredconsumption taxes are recognized as an expense when incurred.

(12) Policy reserve is based on Article 116 of the Insurance Business Act, and the premium reserve is calculated by thefollowing method:i. In regard to the policies subject to the standard policy reserve, the method as prescribed by the Commissioner ofFinancial Services Agency (Ministry of Finance Ordinance No. 48, 1996) is applied.

ii. In regard to the policies not subject to the standard policy reserve, the net level premium method is applied.
Based on the provision of Article 69, paragraph 5, of the Enforcement Regulation of the Insurance Business Act, theCompany includes additional funded policy reserves as follows.
Among individual annuity insurance policies with an assumed interest rate of 5.00% or higher, for policies thathave begun paying annuities (excluding wife’s annuity insurance additional rider), the Company reduced the assumed
interest rate to 1.00% and funded additional policy reserves. As of March 31, 2019, the balance of these policy
reserves was ¥73,836 million.
The Company also funded additional policy reserves for certain individual annuity insurance policies, whole life
insurance policies that include distribution of surplus every five years, new cancer riders and highly advanced medical
riders. As of March 31, 2019, the balance of these policy reserves was ¥13,391 million.
(13) Intangible fixed assets are amortized as follows:

i. Software for internal use is amortized based on the straight-line method over the estimated useful lives.
ii. Lease assets are amortized based on the straight-line method over the lease term.

(14) 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 are classified as policy- reservematching bonds by the Company in accordance with “Temporary Treatment of Accounting and Auditing Concerning
Policy-reserve-matching Bonds in Insurance Industry” (Industry Audit Committee Report No. 21 issued by theJapanese Institute of Certified Public Accountants on November 16, 2000).

47

Fukoku Mutual Life Insurance Company

2. Asset management of the general accounts other than the separate accounts stipulated in Article 118 Paragraph 1 of the
Insurance Business Act is conducted on the principle of prudent and profitable investments by the Company, considering

public and social responsibilities of the insurance business. Based on this policy, the Company allocates thefund, securing its liquidity, from the medium-to-long term viewpoints. The Company is diversifying
investments in assets such as foreign securities, stocks and real estates within the acceptable range of risk inorder to enhance the profitability, although yen-denominated interest bearing assets including debt securities
such as Japanese government bonds and loans are the cores of the portfolios under the asset liability
management. Derivatives are mainly used to hedge the market risk regarding spot-priced assets and liabilities.
Major financial instruments including securities, loans and derivatives are exposed to market risk and credit
risk.
The Company manages its asset management risk by establishing internal control systems including various rules
pursuant to the “Three Basic Rules related to Enterprise Risk Management” established by the Board of Directors.
Specifically, the Company eliminates excessive risk deviating from the basic principle and secures the safety of the assets
by utilizing control functions of the Financial and Investment Risk Management Department towards the asset
management sections, monitoring the status of market risk and credit risk periodically on a daily or monthly basis. In
addition, the Company quantifies the market risk and credit risk using value-at-risk (VaR) method in order to control thepossible maximum losses which may arise from the holding assets within a certain range of risk buffers.
The carrying amounts, fair values and their related differences of major financial assets and liabilities in thegeneral account as of March 31, 2019 were as follows:(Millions of yen)

Carrying amount

Fair value

Difference

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

¥ 151,527¥ 151,527¥–

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

151,527

151,527–

Call loans

176,000

176,000–

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

299

319

20

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

299

319

20

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

22,85022,850–Total money held in trust..........................................

22,85022,850–

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

97,11097,110–

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

1,256,418

1,505,773

249,355

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

1,923,187

2,174,682

251,494

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

3,909,427

3,909,427–

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

7,186,144

7,686,993

500,849

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

59,972

59,971(0)

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

504,806

530,223

25,417

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

564,778

590,195

25,416

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

8,101,599

8,627,886

526,286

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

191,935

198,912

6,977

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

191,935

198,912

6,977

(107)

(107)

–

Monetary claims bought:

Money held in trust:

Securities:

Loans:

1

2

Derivative instruments :Hedge accounting not applied.................…….........
Hedge accounting applied……................................

(3,230)(3,230)–Total derivative instruments.......................……......

¥ (3,338)¥ (3,338)¥–

48

Fukoku Mutual Life Insurance Company

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

(1) Cash, deposits (excluding financial instruments treated as securities based on “Accounting Standards for Financial
Instruments” (ASBJ Statement No.10, March 10, 2008)) and call loans:
The fair values of cash, deposits and call loans are based on their book values since fair values approximate bookvalues due to their short maturities.
(2) Securities including deposits and monetary claims bought which are treated as securities based on “AccountingStandards for Financial Instruments” (ASBJ Statement No.10, March 10, 2008) and securities managed as trust assets
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 suchas the prices offered by the information vendors or counterparty financial institutions.
Investments in unconsolidated subsidiaries and affiliates, unlisted stocks and investments in partnerships
whereby partnership assets consist of unlisted stocks whose fair values are deemed extremely difficult to obtain, areexcluded from above securities. The carrying amounts of investments in unconsolidated subsidiaries and affiliates,
unlisted stocks and investments in partnerships were ¥404 million, ¥5,696 million, and ¥27,318 million as of March
31, 2019, respectively.
(3) Loans and monetary claims bought treated as loans:
The fair values of policy loans are deemed to approximate book values, considering estimated repayment period andinterest rate conditions since their repayment deadlines have not been set up due to the characteristics that the loans arelimited to the amount of cash surrender values. Therefore, the book values are used as the fair values of policy loans.
The fair values of floating interest rate loans among the ordinary loans and monetary claims bought treated asloans approximate the book values because the market interest rates are reflected in future cash flows in a short period.
Therefore, the fair values of floating interest rate loans and monetary claims bought treated as loans are based on theirbook values. The fair values of fixed interest rate loans are measured by discounting the future cash flows to thepresent values.
The fair values of loans from legally bankrupt borrowers, substantially bankrupt borrowers and not currently
bankrupt borrowers and monetary claims bought treated as loans are computed by deducting the amount of theallowance for possible loan losses from the book values before direct write-offs.
(4) Subordinated bonds:
Subordinated bonds issued by the Company are stated at fair market values.
(5) Derivative instruments:

i. The fair values of the futures and options traded at the exchange are measured at the settlement price of theexchange.

ii. The fair values of forward contracts, options and swaps traded over the counter are based on the quoted prices
offered by counterparty financial institutions.

iii. The fair values of foreign currency forward contracts are determined based on the spot exchange rate and forward
contract rate.

49

Fukoku Mutual Life Insurance Company

3. 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 ¥171,231 million and ¥312,797 million as of March
31, 2019, respectively. The fair value is mainly based on the value calculated by the Company in accordance with realestate appraisal standards which includes some adjustments using the reference prices.
The amount corresponding to asset retirement obligations included in the carrying amount of investment and rental
properties was ¥695 million as of March 31, 2019.

4. The amount of securities lent under lending agreements was ¥299,194 million as of March 31, 2019.

5. The total amounts of credits to bankrupt borrowers, delinquent loans, delinquent loans past 3 months or more andrestructured loans, which were included in loans, was ¥954 million as of March 31, 2019;

i. The balance of credits to bankrupt borrowers was ¥172 million as of March 31, 2019.
ii. The balance of delinquent loans was ¥782 million as of March 31, 2019.
iii. There was no balance of delinquent loans past 3 months or more and restructured loans as of March 31, 2019.
The direct write-offs related to loans decreased credits to bankrupt borrowers described above by ¥1 million as ofMarch 31, 2019.
Credits to bankrupt borrowers represent loans, excluding the balances already written-off, which meet theconditions prescribed in Article 96 Paragraph 1 item 3 and 4 of the Enforcement Regulations of the Corporate Tax Act.
Moreover, accrued interest on these loans is not recorded as income after determining that principal of or interest on theseloans is unlikely to be collected due to the significant delay in repayment of principal or interest payment or for someother 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 restructuring of their business.
Delinquent loans past 3 months or more are loans for which interest payments or repayments of principal aredelinquent for 3 months or more from the due date under the terms of the related loan agreements, excluding those loansclassified as credits to bankrupt borrowers and delinquent loans.
Restructured loans are loans for which certain concessions favorable to borrowers, such as interest reduction or
exemption, rescheduling of due date for repayments of principal or interest payment, waiver of claim or other terms, havebeen negotiated for the purpose of assisting and supporting the borrowers in the restructuring of their business. This
category excludes loans classified as credits to bankrupt borrowers, delinquent loans and delinquent loans past 3 months
or more.

6. Accumulated depreciation of tangible fixed assets were ¥167,799 million as of March 31, 2019.

7. Total assets in separate accounts provided for in Article 118 of the Insurance Business Act were ¥71,585 million as ofMarch 31, 2019. The amounts of separate account liabilities were the same as separate account assets.

8. The total amounts of receivables from/payables to unconsolidated subsidiaries were ¥3,093 million and ¥36 million as ofMarch 31, 2019, respectively.
50

Fukoku Mutual Life Insurance Company

9. Deferred tax assets and deferred tax liabilities as of March 31, 2019 were ¥143,826 million and ¥141,111 million,
respectively. Valuation allowance for deferred tax assets was ¥4,274 million.
Major components of deferred tax assets were ¥87,060 million of policy reserves, ¥33,980 million of reserve forprice fluctuation and ¥14,325 million of net defined benefit liability as of March 31, 2019.
Major component of deferred tax liabilities was ¥136,073 million of net unrealized gains on available-for-salesecurities as of March 31, 2019.
The statutory tax rate and the actual effective tax rate for the year ended March 31, 2019 were 28.0% and4.9%, respectively. The difference between the statutory tax rate and the actual effective tax rate was attributable
mainly to -25.1% of reserve for dividends to the policyholders.

10. Changes in reserve for dividends to policyholders for the year ended March 31, 2019 were as follows:(Millions of yen)

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

¥ 53,395

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

38,630

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

(33,862)

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

12

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

¥ 58,176

11. Changes in reserve for dividends to policyholders (Fukokushinrai Life Insurance Co., Ltd.) for the year ended March 31,
2019 were as follows:(Millions of yen)

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

¥ 539

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

(412)

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

0

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

337

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

¥ 465

12. The amount of stocks of unconsolidated subsidiaries was ¥404 million as of March 31, 2019.

13. Assets pledged as collateral as of March 31, 2019 were ¥17,839 million of securities and ¥744 million of bank deposits.
Secured debts as of March 31, 2019, were ¥5,387 million.

14. Reserve for outstanding claims for the reinsurance contracts provided in accordance with Article 71 Paragraph 1 of the
Enforcement Regulation of the Insurance Business Act (hereinafter called “reserve for outstanding claims for ceded
reinsurance”) was ¥70 million as of March 31, 2019.
Policy reserve for the reinsurance contracts provided in accordance with Article 71 Paragraph 1 of the
Enforcement Regulation of the Insurance Business Act (hereinafter called “policy reserve for ceded reinsurance”) was¥54 million as of March 31, 2019.

51

Fukoku Mutual Life Insurance Company

15. There were unused commitment line agreements under which the Company is the lender of ¥5,994 million as of March
31, 2019.

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

17. The future contribution to the Life Insurance Policyholders Protection Corporation of Japan under Article 259 of the
Insurance Business Act was estimated at ¥10,530 million as of March 31, 2019.
The contribution is recognized as operating expenses when contributed.

18. Matters Related to Employees’ Retirement Benefits as of March 31, 2019(1) Overview of Employees’ Retirement Benefit Plan
As for a defined benefit plan for office-based employees, the Company and its comsolidated subsidiaries have adefined benefit corporate pension plan and retirement lump-sum payments. As for a defined contribution plan for these
employees, the Company also has a defined contribution pension plan.
As for a defined benefit plan for sales employees, the Company has retirement lump-sum payments.
The Company places a retirement benefit trust in relation to the retirement lump-sum grant plan for sales
employees.
The simplified method for calculating retirement benefit obligation is applied to a portion of the Company andsome consolidated subsidiaries’ retirement lump-sum grant plans.
(2) Defined Benefit Plan

i. Reconciliation of beginning and end of balance of retirement benefit obligation(Millions of yen)

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

¥ 86,420

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

3,667

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

516

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

1,080

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

(4,301)Retirement benefit obligation at the end of the fiscal year………………………

¥ 87,382

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

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

¥ 52,509

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

972

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

145

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

2,768

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

(1,306)

Others……………………………………………………………………………

1

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

¥ 55,090

52

Fukoku Mutual Life Insurance Company

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……………………………………

¥ 75,691

b. Pension plan assets………………………………….…………….…………..

(55,090)c. (a + b)……………………………………………………………….………...
d. Unfunded plan retirement benefit obligation………………………………....

20,601
11,691e. Net amount of liabilities and assets presented
on the consolidated balance sheet………………………………………….
f. Net defined benefit liabilities……………………………………………..…..
g. Net defined benefit assets…………………………………………………….

32,292
32,470(177)

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

¥ 32,292

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

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

¥ 3,667Interest cost…………………………………..……….…………….…………..

516

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

(972)

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

1,759

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

(76)

Others……………………………………………………………………………

(1)

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

¥ 4,892

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

¥ 823

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

(76)

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

¥ 747

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….……………………………………….…

¥ (7,833)

Unrecognized prior service cost………...………………………………..……..

171

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

¥ (7,662)

vii. Breakdown of pension plan assets
The breakdown of asset categories as a percentage of total pension plan assets were as follows:(Millions of yen)Domestic stocks…………………………………..………….…………………

44.1%

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

33.5%

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

9.6%

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

7.7%

Foreign bonds……………………………………………………...………..…..

3.0%

Others……………………………………………………………………………

2.1%

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

100.0%

Within the total of pension assets, 37.3% of this amount is accounted for by the retirement benefit trust
established in relation to the retirement lump-sum payments plan for sales employees.
53

Fukoku Mutual Life Insurance Company

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 thepresent and future allocation of pension plan assets, and the present and expected future long-term rateof return on a variety of assets that makes up the pension assets.

ix. Underlying actuarial assumptions
Main underlying actuarial assumptions as of March 31, 2019, were as follows:
Discount rate…………………………………..………….…………………..…

0.6%

Expected long-term rate of return on pension plan assets
Defined Benefit Plan….……………………………………………………...

3.0%

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

0.0%(3) Defined Contribution Plan
The required contribution amount by the Company and its consolidated subsidiaries to the defined contribution
plan was ¥324 million as of March 31, 2019.

III.

Notes to the Consolidated Statements of Operations

1. The total amounts of revenues and expenses in connection with unconsolidated subsidiaries were ¥83 million and ¥1,806
million for the year ended March 31, 2019.
2. For the year ended March 31, 2019, in calculating the provision of reserve for outstanding claims, a provision of reserves
for outstanding claims reinsured of ¥59 million was deducted. In calculating the provision of policy reserves, a provisionof reserves for policy reserves reinsured of ¥0 million was deducted.

IV.

Notes to the Consolidated Statements of Comprehensive Income

1. Other Comprehensive Income
The reclassification adjustments and tax effect amounts related to other comprehensive income for the year ended March
31, 2019 were as follows:i. Net unrealized gains (losses) on available-for-sale securities, net of tax(Millions of yen)Amount incurred during the fiscal year…………………………………………

¥ 34,395

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

(23,903)

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

11,032

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

(3,074)

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

¥ 7,957

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

¥ (119)Reclassification adjustments…………………………..………………………..

–

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

(119)

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

–

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

¥ (119)54

Fukoku Mutual Life Insurance Company

iii. Remeasurements of defined benefit plans, net of tax(Millions of yen)V.

Amount incurred during the fiscal year…………………………………………

¥ (935)

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

1,683

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

747

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

(209)

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

538

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

¥ 8,376

Notes to the Consolidated Statements of Cash Flows
1. Cash and cash equivalents as of March 31, 2019 consist of "Cash," "Deposits in transfer account," "Current deposits,""Ordinary deposits," "Notice deposits," "Time deposits maturing within 3 months of the date of acquisition," "Foreign
currency deposits maturing within 3 months of the date of acquisition," "Negotiable certificate of deposits maturing
within 3 months of the date of acquisition," "Call loans" and "Monetary claims bought maturing within 3 months of thedate of acquisition."

2. Reconciliations of cash and cash equivalents in the consolidated statements of cash flows to the consolidated balance
sheet accounts as of March 31, 2019 were as follows:(Millions of yen)

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

¥ 153,017

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

176,000

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

299

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

(100)

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

(792)

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

(299)

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

¥ 328,124

55

Fukoku Mutual Life Insurance Company

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

As of March 31, 2018

As of March 31, 2019

Credits to bankrupt borrowers

180

172

Delinquent loans

865

782

Delinquent loans past three months or more––

Restructured loans

–

–

1,045

954

[0.18%][0.17%]

Total[Percentage of total loans]

Notes: 1. For the credits of legally bankrupt borrowers and substantially bankrupt borrowers, the amounts remaining after deductions ofcollateral value or the amounts collectible through the execution of guarantees is written-off directly from the borrower’sbalance as the estimated uncollectible amounts. The amounts written-off related to credits to bankrupt borrowers were ¥1
million as of March 31, 2018 and ¥1 million as of March 31, 2019.
Notes: 2. Credits to bankrupt borrowers represent loans which are subject to bankruptcy, corporate reorganization or rehabilitation orother similar, including but not limited to foreign, proceedings. Accruing interest of these loans is not recorded as income after
determining that principal of or interest on these loans is unlikely to be collected due to the significant delay in repayment ofprincipal or interest payment or for some other reasons.
Notes: 3. Delinquent loans are credits whose accruing interest is not recorded as income due to the same reasons as described in note 2
above, and exclude credits to bankrupt borrowers and loans for which interest payments have been suspended and rescheduled
to assist and support the borrowers in the restructuring of their business.
Notes: 4. Delinquent loans past three months or more are loans for which interest payment or repayment of principal are delinquent forthree months or more from the due date under the terms of the related loan agreements, excluding those loans classified as
credits to bankrupt borrowers and delinquent loans.
Notes: 5. Restructured loans are loans for which certain concessions favorable to borrowers, such as interest reduction or exemptions,
rescheduling of due date of principal or interest payment, waiver of claim or other terms, have been negotiated for the purposeof 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.

56

Fukoku Mutual Life Insurance Company

(8) Status of Insurance Claims Paying Ability of the Company and Insurance Subsidiaries(Millions of yen)

As ofMarch 31, 2018

As ofMarch 31, 2019

1,556,422

1,633,028

Foundation funds and surplus

223,166

225,497

Reserve for price fluctuation

105,521

121,357

Contingency reserve

189,211

206,629

–

–

1,502

1,608

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

429,908

439,727

Net unrealized gains on real estate × 85%

122,692

138,679

Sum of unrecognized actuarial differences and unrecognized prior service cost

(8,410)(7,662)

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

255,285

270,629

Qualifying subordinated debt

191,935

191,935

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

Deductible items––

45,60944,625

276,097

264,149

Total solvency margin(A)

Catastrophe loss reserve
General allowance for possible loan losses

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

(B)

Insurance risk

R1

23,75623,369General insurance risk

R5

–

–

Catastrophe risk

R6

–

–

3rd sector insurance risk

R8

9,798

9,903

Small amount and short-term insurance risk

R9

–

–

Assumed investment yield risk

R232,54231,752

Minimum guarantee risk

R7

–

–

Investment risk

R3

235,431

224,456

Business risk

R4

6,030

5,789

1,127.4%

1,236.4%

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

57

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, 2018

As ofMarch 31, 2019

100,176102,253

Foundation funds and surplus

69,434

69,935Reserve for price fluctuation

9,722

10,078Contingency reserve

2,161

2,212

0

0

13,06414,147

–

–

2,509

2,389

Qualifying subordinated debt––

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

Deductible items

–

–

3,284

3,490

21,15020,907

Total solvency margin(A)

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

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

(B)

Insurance risk

R1

519

451

3rd sector insurance risk

R8

110

117

Assumed investment yield risk

R2

385

378

Minimum guarantee risk

R7

–

–

Investment risk

R3

20,32820,099Business risk

R4

426

420

947.2%

978.1%

Solvency margin ratio
(A)
× 100
(1/2) × (B)Note: Above figures are calculated based on Articles 86 and 87 of the Enforcement Regulation of the Insurance Business Act andMinistry of Finance No.50, 1996.

58

Fukoku Mutual Life Insurance Company